# Storm Financial Group



## Garpal Gumnut (31 October 2008)

Anyone know anything about these guys. A few of my mates are clients. They are Townsville based . I don't use advisers.

gg


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## white_crane (3 November 2008)

They're the richest people in Townsville...

Husband and wife team, been around a long time, $4b under advice

Appear to have a good reputation.


That's all I know.


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## Nashezz (3 November 2008)

Heard that they were going down the tube as the whole 'stormified' thing relied on heavily geared mortgages - not so good when property started to slide backwards.


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## Glen48 (3 November 2008)

Two here in Redcliffe Qld a Firm called (Ron) Jelich Jones ( Bob) are with them and have a lot of money to throw around and have been buying some top R. .E ( well use to be top).
The person who started it in TVL got a mention in Qld richest in a recent press release.


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## Garpal Gumnut (4 November 2008)

white_crane said:


> They're the richest people in Townsville...
> 
> Husband and wife team, been around a long time, $4b under advice
> 
> ...






Nashezz said:


> Heard that they were going down the tube as the whole 'stormified' thing relied on heavily geared mortgages - not so good when property started to slide backwards.






Glen48 said:


> Two here in Redcliffe Qld a Firm called (Ron) Jelich Jones ( Bob) are with them and have a lot of money to throw around and have been buying some top R. .E ( well use to be top).
> The person who started it in TVL got a mention in Qld richest in a recent press release.




Thanks all

I've heard all of the above.

Gearing over the past 12 months would have been brave.

They are all over Australia I believe.

gg


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## Duckman#72 (4 November 2008)

Garpal Gumnut said:


> Thanks all
> 
> I've heard all of the above.
> 
> ...




I don't believe that they are for everyone as their methodology is very aggressive. I personally don't agree with it. Below are some bits of information I've taken from Storm seminars held. 

Their actual investments are quite solid. Nothing o/seas, just Aussie shares/managed funds of which a fair portion are index tracking investments. But the main difference is the level of gearing. It is just debt on debt. The moment portfolios are re-valued upward they increase the debt accordingly. 

My understanding is that Storm as a group brokered a deal with Macquarie so that their clients could extend further than the maximum 70% gearing ratio that applies to most others looking at margin lending. I also am of the view that they say the debt is never to be repaid (or at least it is not a large part of the financial plan). As the assets grow so to does the level of debt. As I undertstand it, Storm don't follow the rule of why you need to "retire" - or at least "retire" your money in retirement. They believe it is their to be used to create more wealth even in "old age". 

When markets are going well - this doesn't seem a problem. But I think the way the market has been over the past 18 months it has highlighted a major flaw in the methodology. People need a certain comfort level at which they will sacrifice more wealth for a decent nights sleep and piece of mind. As you can see - I don't think that their actual "investment" advice (where the money was placed) would be a huge problem for them as they were fairly conservative but the "big picture plan" is a bit out there for some.

Duckman


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## Garpal Gumnut (4 November 2008)

I don't go with financial advisers and don't know much about them.

I'll pass on your thoughts to my mate.

gg


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## classer (4 November 2008)

I know they are spending a lot of hours in the office of late. My girlfriend has a  portfolio with them so I need to find out a bit more of their methods myself.
The advice up until the meltdown seems to have been ok but their fees seem to come in for some mention from others in the industry.


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## Nashezz (6 November 2008)

I work in financial planning and we received an email recently showing what constituted a 'Statement of Advice' for Storm. If it was legit, it is a joke of a document and discloses little while getting you to sign off on an open, unexplained investment plan. 

Clients are often 'double geared' so when markets go backwards it gets nasty.


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## Garpal Gumnut (6 November 2008)

classer said:


> I know they are spending a lot of hours in the office of late. My girlfriend has a  portfolio with them so I need to find out a bit more of their methods myself.
> The advice up until the meltdown seems to have been ok but their fees seem to come in for some mention from others in the industry.






Nashezz said:


> I work in financial planning and we received an email recently showing what constituted a 'Statement of Advice' for Storm. If it was legit, it is a joke of a document and discloses little while getting you to sign off on an open, unexplained investment plan.
> 
> Clients are often 'double geared' so when markets go backwards it gets nasty.





Thanks guys, I'll pass on that to my mate. When markets go against you gearing can be nasty.

gg


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## privatename (15 November 2008)

I found this forum while googling 'Storm Financial'.

I know enough about the background of one of the principals that I wouldn't deal with people with such a history. I understand they charge 7% upfront and 1.5%pa in commissions and live the lifestyle they promise their clients.


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## Garpal Gumnut (12 December 2008)

The local newspaper (Townsville Bulletin) has this mob on their front page today. It appears CBA have a hold of the rug and are pulling it with reasonable vigour.

From the news on the ground a fair few "sophisticated" North Queensland investors are in to this group for in excess of half a billion $.

gg


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## acedrum (12 December 2008)

From what I know, one of the things they offer is to set up a margin loan using the equity in your home and average in long the Aus 200 index regardless of the direction of the market.


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## Garpal Gumnut (12 December 2008)

acedrum said:


> From what I know, one of the things they offer is to set up a margin loan using the equity in your home and average in long the Aus 200 index regardless of the direction of the market.




That is my understanding of them as well acedrum.

Buying dips in a bull market while financing it with equity from businesses and homes is a reasonable but risky tactic in a bull market.

When the market turns as it has it can be disastrous.

On top of that if it is into managed funds you are paying all the little biters along the way.

It will be interesting to see the washout.

gg


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## Glen48 (12 December 2008)

The local group here in Redcliffe Q brought a ex boat yard (message there?) and have a huge banner proclaiming big things but nothing has been done for a long time.


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## Garpal Gumnut (12 December 2008)

Glen48 said:


> The local group here in Redcliffe Q brought a ex boat yard (message there?) and have a huge banner proclaiming big things but nothing has been done for a long time.




The Bully (Townsville Bulletin) described their Townsville headquarters as being quite palatial, gilt dunnies and glass everywhere else.

gg


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## beachbum (12 December 2008)

Drove past the great new Storm Headquarters in Townsville a few minutes ago. Reporters across the road filming tonights news report and the great building is looking very empty. I feel sorry for all who put faith in this lot, then again "when things are too good to be true"...............................
No doubt the Cassimatis's will have their share tucked away and all the folk who have hocked themselves to the hilt will have paid for it.

Very sad and hard lesson.


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## Glen48 (12 December 2008)

As soon as I walk in to one of those type of setting I think who is paying for all this greed and walk out. Sounds to me like they could make good money in boom times but fall apart when they have to work it out themselves. 
One of the directors here in Redcliffe has the ego massaging photo of him playing golf with Greg Norman. Then again maybe I charged him to much and send them under???


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## Garpal Gumnut (13 December 2008)

I'm off out this arvo to buy a mansion or three in Townsville.

gg


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## numbercruncher (13 December 2008)

Garpal Gumnut said:


> I'm off out this arvo to buy a mansion or three in Townsville.
> 
> gg






Opportunities and obligations everywhere hey !

happy shopping


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## Glen48 (13 December 2008)

I heard they will start up again under the name of  Tsunami Traders.  Greed is a powerful force, If Townsville is down 500M then there will be a few here in Redcliffe out of pocket as well one of the directors has house on the Canal blocks and a few properties around the other is on the board of the Leagues club so there will be a few more getting flushed out.


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## numbercruncher (13 December 2008)

lol it was just another ponzi scheme, how can people invest in these things with handouts like the following quote happening and not ask serious questions ?






> The company is also famous for its free-spending approach toward staff and client relations. Earlier this year the company hosted about 600 of its clients on a group holiday at a Sun City resort in South Africa and last year it took 400 clients on a Mediterranean trip with Emmanuel and Julie Cassimatis.




http://www.smartcompany.com.au/Free-Articles/The-Briefing/20081212-Queenslands-Storm-Financial-Group-under-pressure.html


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## Julia (16 December 2008)

> Case Two
> 
> Retirees in their sixties.
> 
> ...



Why this couple would want to expose themselves to the sort of risk they did with that asset base and a requirement for just $45,000 p.a. is beyond me.
Damn stupid imo.


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## Garpal Gumnut (16 December 2008)

Julia said:


> Why this couple would want to expose themselves to the sort of risk they did with that asset base and a requirement for just $45,000 p.a. is beyond me.
> Damn stupid imo.




agree Julia, but these folk are simple hardworking people. they were probably given a good spiel and trusted the advice. 

the word in townsville is that it will have the same effect on the economy here as if the tourism dollar stopped tomorrow.

Losses of half to one billion$ are being discussed.

gg


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## doctorj (16 December 2008)

Please be aware we have removed a number of recent posts in this thread due to copyright issues.

ASF respects the rights of content owners and will continue to take action by removing posts where necessary.

If you're unsure of your rights and obligations when posting copyrighted content, please take a moment to read https://www.aussiestockforums.com/forums/showpost.php?p=275308&postcount=1


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## Garpal Gumnut (17 December 2008)

doctorj said:


> Please be aware we have removed a number of recent posts in this thread due to copyright issues.
> 
> ASF respects the rights of content owners and will continue to take action by removing posts where necessary.
> 
> If you're unsure of your rights and obligations when posting copyrighted content, please take a moment to read https://www.aussiestockforums.com/forums/showpost.php?p=275308&postcount=1




Thanks doctorj and my apologies.

the following is part of an article and the link to the full article on the latest on Storm Financial., from Michael West at the SMH.

Taken by Storm
Michael West
December 16, 2008 - 7:04PM

Page 1 of 2 Single page view

The stories are flooding in from Storm Financial clients in shock. Very sad stories. Storm founders and directors remain bunkered down with crisis management PRs batting off the media.

Regulators and politicians are still nowhere to be seen.

After consultations with Colonial - which ran the Storm-branded index funds and pulled the plug on Storm last week then hit its clients with margin calls - the Financial Planners Association (FPA) has organised a panel of advisory firms which Storm clients can contact for an independent view of their plight. We will deal with some feedback on specific clients in a tick................

http://business.smh.com.au/business/taken-by-storm-20081216-6zq4.html


gg


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## xoa (17 December 2008)

I lived in CQ for about a month, and the television was spammed with cheesy Storm ads. Cassimatis was jiving like a white-shoe wearing transplant from the '80s. Not exactly the type of people you'd entrust with your life savings.

Fools are easily parted of their money, but they're also quick to whine and blame somebody else. Will Rudd step in and save the day?


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## Garpal Gumnut (17 December 2008)

Latest news on the ground is that many canefarmers in the Burdekin and around Ingham ( south and north of Townsville) have been caught up in this fiasco. 

Poor buggers, they had to put up with weather, greenies, futures markets and now this.

gg


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## todarellor (18 December 2008)

Colonial (CBA) should have raised the alarm bells with so much leverage being allocated but then again greed is above all a dominant human trait. Its a pity that the poor investor continues to be duped by high commission salesman!


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## tommymac (18 December 2008)

Sports stars have also been caught up 

http://business.smh.com.au/business/storm-catches-symonds-20081218-71cx.html

But what amazes me is John Buchanan's (Australia's cricket coach)
------------------------------------------------------------------------
The firm, founded by Townsville-based husband and wife team Emmanuel and Julie Cassimatis, has a ''winning'' formula says Buchanan, which he likens to the leadership of Australian cricket captains Ricky Ponting, Steve Waugh and Mark Taylor.

''So for me, when looking for an investment company with similar qualities as the Australian cricket team, I continue to be very happy with Storm Financial,'' he says.
-----------------------------------------------------------------------
 Symonds loses heaps of money and his coach praises the people who did it. I don't even care that this is PR on Buchanan's part. It's just wrong.


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## gfresh (18 December 2008)

Apparently there will be a story on The 7:30 Report tonight on them, could be worth watching for anybody interested.


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## Garpal Gumnut (19 December 2008)

Talk around town (Townsville) is that CBA and Bankwest could be dragged into this.

Many big names down the East Coast including high profile sportstars are in for losing the lot.

Many small folk have lost 70-100K and should hold on to their houses.

Anyone who went on a free trip with Storm financial to Suncity in Southern Africa last year as a reward for being good sophisticated investors are possibly burnt toast.

I'm going out on the town tonight so will keep the thread posted.

gg


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## Aussiejeff (19 December 2008)

Madoff MkII


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## pennywise (21 December 2008)

*Ignorance*

Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way. 
Here's to a better economic year ahead!


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## chops_a_must (21 December 2008)

*Re: Ignorance*

Lol.


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## white_crane (21 December 2008)

*Re: Ignorance*

damage control?


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## numbercruncher (21 December 2008)

*Re: Ignorance*

calm after the storm ?


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## Naked shorts (21 December 2008)

*Re: Ignorance*

You heard the man, EVERYONE ONE BUY STORM FINANCIAL


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## Bloveld (21 December 2008)

*Re: Ignorance*

http://www.stormfinancial.com.au/hel_main.php

I like this.

"The things we do...

Storm clients never quite know what we'll get 
up to next, and the truth is, neither do we!"


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## Solly (21 December 2008)

*Re: Ignorance*



pennywise said:


> ...... I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!




Why are there so many facing margin calls, losing houses and ruin? 
Are you saying it's all Colonial's fault?

My Financial Adviser isn't making headlines in the media......

I suggest you seek another opinion from another financial professional.


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## BTM (21 December 2008)

'Storm Financial', perhaps it should be 'Cyclone Financial' because look out what's installed. It will not be a Merry Christmas for some, adverse publicity will send this 'show' to it's grave. Brace yourselves folks!!


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## Aussiejeff (22 December 2008)

*Re: Ignorance*



pennywise said:


> I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic ... *Remember not everthing that the media writes is gosspel*. We should all be aware of the gossip mongering that has been created throughout this controversay.




In a like vein, not everything that Ponzi Scheme managers write should be taken as gosspel, either.



> *I, as a client of Storm Financial will be with them all the way.*
> Here's to a better economic year ahead!




Good luck. Wear a crash hat and pack a 'chute. The ride could be quite thrilling. 

Merry Xmas :santa:

aj


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## Garpal Gumnut (22 December 2008)

*Re: Ignorance*



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!




pennywise, your loyalty is admirable.

However should I have 

The ATO
ASIC
CBA
50000 angry investors 
Rupert Murdoch's press
AFR/SMH

against me , I would quietly take my chips off the table and get the bloody hell as far away from the storm as possible.

You appear to be made of sterner stuff.

Good on you.

Keep us posted on your portfolio.

gg


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## Solly (22 December 2008)

*Re: Ignorance*



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. .........




Please keep us regularly updated, I'm sure we are all interested to see which parties were at fault in causing the losses to these clients........


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## Julia (22 December 2008)

*Re: Ignorance*



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!




Maybe Pennywise is a representative of Storm Financial?
Maybe the PR Manager?


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## basilio (22 December 2008)

> Quote:
> Originally Posted by pennywise View Post
> 
> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> ...



*
*
That's a bit tough!! Is it possible for a PR manager of a desperately failing company to jump onto a stock forum and piously put a finger into the dyke?

Is it possible for them to have such poor spelling skills or being so quick to post they didn't do a quick check?

Is it possible for a current Storm shareholder to be so overtly rapt with their current financial position, particularly if they have been geared to the gills in the process and are currently smelling like a 3 day old fish?

Lets wait for the next thrilling installment of

*  " Storm in a Tea Cup "*

Cheers


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## sails (22 December 2008)

*Re: Ignorance*



Julia said:


> Maybe Pennywise is a representative of Storm Financial?
> Maybe the PR Manager?




Or maybe still believing the hype that got them into this mess?


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## Garpal Gumnut (22 December 2008)

*Re: Ignorance*



Garpal Gumnut said:


> pennywise, your loyalty is admirable.
> 
> However should I have
> 
> ...






Solly said:


> Please keep us regularly updated, I'm sure we are all interested to see which parties were at fault in causing the losses to these clients........






Julia said:


> Maybe Pennywise is a representative of Storm Financial?
> Maybe the PR Manager?






basilio said:


> [/B]
> That's a bit tough!! Is it possible for a PR manager of a desperately failing company to jump onto a stock forum and piously put a finger into the dyke?
> 
> Is it possible for them to have such poor spelling skills or being so quick to post they didn't do a quick check?
> ...






sails said:


> Or maybe still believing the hype that got them into this mess?




I went to a few parties over the weekend.

I started off in the Rising Sun and ended up in a mansion just below the Storm financial bunker.

About one in three folk I met had "invested with Storm"

The "lucky ones " said they were only down 50-100 k , and still owned their house.

The unlucky ones were not talking and were pointed out to me by fellow revellers ?????

Its going to be a quiet Christmas at the top end of Townsville, the Burdekin and north to Ingham and Innisfail

gg


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## awg (22 December 2008)

very easy to see how this has happened.

if you had high gearing (50-70%) from 2003 to 07, on the ASX200, you what have though your Investment advisors were the best in the world!

the big question is at what point do you start selling, if you are a long term investor, in the event of a market downturn.

maybe not 10%, as these could just be just a regular blip.

but surely after that, serious readjustment is advisable.

whats happened over the last 6 months is no regular blip, anyone with any financial knowledge knows this

if on low income, with small tax offset, high gearing would need to be monitored day to day

as for people losing their houses, one unfortunate fact I have learned is that one should not allow negative equity to occur, in other words, if a margin call is approaching, far safer to liquidate your investment for $0.

would be extremely interesting to see if any Storm investors had regular written reviews of their plans.

fundamental conflict of interest exists if planners get 7%


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## sails (22 December 2008)

Not sure if this is correct, but I heard that as the market moved higher, they would then leverage further on those gains.

Brilliant strategy if the market always went up - but if this is true, it's easy to see how the severe downturn has left them leveraged many times beyond their initial capital investment.


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## xoa (22 December 2008)

Their fatal assumption was that markets only ever go up. They didn't produce anything of value. Gamblers always lose in the long term. North Queensland's crashing property market will be the final nail in storm's coffin.


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## Solly (22 December 2008)

*Re: Ignorance*



Garpal Gumnut said:


> I went to a few parties over the weekend.
> 
> I started off in the Rising Sun and ended up in a mansion just below the Storm financial bunker.
> 
> ...





Thank goodness that 2 out of 3 had other investment strategies and hopefully avoid the tsunami after the storm.....


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## Solly (24 December 2008)

The Storm Financial Website http://www.stormfinancial.com.au
has been "under maintenance" since Monday.
I wonder what is happening?  Will it be back?


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## Aussiejeff (24 December 2008)

Solly said:


> The Storm Financial Website http://www.stormfinancial.com.au
> has been "under maintenance" since Monday.
> I wonder what is happening?  Will it be back?




Here is your answer:

*Storm Financial* = *Financial Storm*


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## GumbyLearner (24 December 2008)

here's your answer your Hon. Esq Gumnut!

Their bankrupt *****!

Wake up man, theyre are people relying on you here!


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## Garpal Gumnut (24 December 2008)

GumbyLearner said:


> here's your answer your Hon. Esq Gumnut!
> 
> Their bankrupt *****!
> 
> Wake up man, theyre are people relying on you here!




Sometimes Gumby mate the more you know the less you are able to say.
There will be much litigation.
Many are bankrupt.
One person said that the effect on NQ would be the same as if no tourists came here for 12 months as of tomorrow.
One story is of of a multim$ farmer now living in a caravan park, renting a van. I've no idea if its true or not.
There were still cars in the SF carpark yesterday when I drove past.
It may make other disasters seem like chickenfeed.
I haven't tried the website.

gg


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## GumbyLearner (24 December 2008)

Garpal Gumnut said:


> Sometimes Gumby mate the more you know the less you are able to say.
> There will be much litigation.
> Many are bankrupt.
> One person said that the effect on NQ would be the same as if no tourists came here for 12 months as of tomorrow.
> ...




I totally see where your coming from GG

http://www.youtube.com/watch?v=lHHEvedhZ-4


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## Bushman (24 December 2008)

Garpal Gumnut said:


> Anyone who went on a free trip with Storm financial to Suncity in Southern Africa last year as a reward for being good sophisticated investors are possibly burnt toast.
> 
> 
> gg




I love Sun City - Sol Kirzner's 'ancient' African resort built in the middle of the platteland. 

If I had known there were free trips going to Sun City, I would've definitely signed up to Storm Financial!


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## shaunQ (24 December 2008)

Solly said:


> The Storm Financial Website http://www.stormfinancial.com.au
> has been "under maintenance" since Monday.
> I wonder what is happening?  Will it be back?




I doubt it will be back, for people interested at looking at the site, you can go to:

http://web.archive.org/web/20071028114029/http://www.stormfinancial.com.au/

... Some hype from the site:

"Our strength comes from providing quality services and advice, based on sound research, which integrate smoothly with your life goals and ambitions"

"The Storm processes and systems are tried and true. The outstanding results achieved over 30 years demonstrate a proven formula, consistently applied, based on a rock solid foundation"

"Everything that we do at Storm is based on seasoned research and carefully considered planning."

All sounds good.


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## kotim (24 December 2008)

Any person whether working for a coproration or not may be personally liable for the "advice" they give.  Now tell me who the financial advisers were that after say a 20% fall in the market they advised their clients to go to safety (cash etc), the fact is that any financial adviser whose clietns were still in the sharemarket at 50% fall and did not advise thenm to change strategies can be held liable for the losses.

Financial advisers are considered to be the experts and will be held as such by the courts, those people in the industry who have not substantially saved their clients with the advice they gave them risk losing everything, as they should.  

People who set themselves up as advisers set themselves up so that they can give people advice according to clients risk tolerance and  circumstances.

We have a legal system that uses statute law in general for regulating things and what happens is that when we have an issue with someone or some organisation we use a lawyer who generally operates in statute law, statute law is limited liability law.  

If more people used common law (in their litigation?) which is personal liability law, then principals cannot hide behind corporate structures to personally avoid the results of their gross mistakes.

Bearing in mind I do not know what occured with individuals and Storm financial, if clients use common law, they can attack the principals of the organisation and take their money, Under common law the principal cannot so easily hide the repurcussions of the event for which they use statute law to limit the liability to the corporation itself.

If the financial advisers at Storm did not give advice to people in relation to the market downfall about getting out or hedgeing in some form or another to avoid /reduce loss, then people should use every legal avenue available to get recompense.

Yes we call say that people should take responsiblity for their actions, but by definitiion of setting up as financail advisers those people assume the liability for risk/loss on behalf of their clients.

This crisis will cause huge changes in the finacial advice arena.


----------



## Solly (24 December 2008)

The last few paragraphs of this article 

http://www.townsvillebulletin.com.au/article/2008/12/24/29831_business_desk.html

says that there are many rumours about what is happening and also ASIC would not confirm anything.

Has anybody got any further verified news about what is happening ?


----------



## Solly (24 December 2008)

Solly said:


> The Storm Financial Website http://www.stormfinancial.com.au
> has been "under maintenance" since Monday.
> I wonder what is happening?  Will it be back?





The web site http://www.stormfinancial.com.au


now says it's only temporarily unavailable due to maintenance over the xmas break... 

Solly


----------



## Solly (24 December 2008)

ABC now reports: 

"ASIC to probe troubled Storm Financial"

ASIC is examining advice the Townsville firm gave to clients in relation to margin loans...

Story here:
http://www.abc.net.au/news/stories/2008/12/24/2454843.htm

It will be interesting to see the results of their investigation.


----------



## Garpal Gumnut (24 December 2008)

Solly said:


> ABC now reports:
> 
> "ASIC to probe troubled Storm Financial"
> 
> ...




ASIC have a long record of underperformance when it comes to protecting investors.

A number of questions I might ask of ASIC's involvement.

1. Why now.   Blind Freddie knew this mob's algorithm was a recipe for disaster 12 months ago.

2.  Where.   Where will they find the documents, people to investigate properly, many like a mate of mine are too ashamed to admit their involvement.

3.   How.     The best predictor of future behaviour is past behaviour, ASIC are a joke.

4.  When       When most people have lost the lot, the bad guys have shifted money offshore and most folk have forgotten....about 2013 imho.

gg


----------



## Solly (24 December 2008)

Garpal Gumnut said:


> ASIC have a long record of underperformance when it comes to protecting investors.
> 
> A number of questions I might ask of ASIC's involvement.
> 
> ...





I just got this like sent to me ..

http://www.skynews.com.au/business/article.aspx?id=289675

SF appear to be taking action against Comm Bank.... what could have Colonial done to warrant this response from SF?


----------



## Garpal Gumnut (24 December 2008)

Solly said:


> I just got this like sent to me ..
> 
> http://www.skynews.com.au/business/article.aspx?id=289675
> 
> SF appear to be taking action against Comm Bank.... what could have Colonial done to warrant this response from SF?




And this illustrates why ASIC are impotent, any cowboy from the Blackhall Ranges can derail the process.

Storm Financial investors, stick your heads between your legs and kiss your investments goodbye.

gg


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## Glen48 (24 December 2008)

Sad part is if there is not another one running some where there will be soon.
The CEO's put all the assets in their wife's name yet the wives stick with them look at Adler?????
Until the head scammers  and their Wives are sent broke they will continue all with the legal system ASIC , ACCC  blessing.


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## Glen48 (25 December 2008)

We should start using their correct name..Storm un-financial Group or Down the S/Shute...or Australians effort in the Ponzi Games 
USA Score Made off ..1.... Australia.... 0


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## Garpal Gumnut (25 December 2008)

Glen48 said:


> Sad part is if there is not another one running some where there will be soon.
> The CEO's put all the assets in their wife's name yet the wives stick with them look at Adler?????
> Until the head scammers  and their Wives are sent broke they will continue all with the legal system ASIC , ACCC  blessing.






Glen48 said:


> We should start using their correct name..Storm un-financial Group or Down the S/Shute...or Australians effort in the Ponzi Games
> USA Score Made off ..1.... Australia.... 0




Don't worry mate, it will all work itself out

gg


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## Solly (25 December 2008)

Garpal Gumnut said:


> And this illustrates why ASIC are impotent, any cowboy from the Blackhall Ranges can derail the process.
> 
> Storm Financial investors, stick your heads between your legs and kiss your investments goodbye.
> 
> gg




You've said that you have a few mates who use them, are any of these in real trouble?

After reading the ABC story it seems that it's only an issue of $20M not the $1Billion I read about elsewhere. 
Or is this an over simplification of the total situation?


----------



## Garpal Gumnut (25 December 2008)

Solly said:


> You've said that you have a few mates who use them, are any of these in real trouble?
> 
> After reading the ABC story it seems that it's only an issue of $20M not the $1Billion I read about elsewhere.
> Or is this an over simplification of the total situation?




None in real trouble, real trouble is losing your house.

I doubt if its just $20m, I have heard of one bloke who leveraged $7m into a $20m debt, but whether its all talk or not I do not know in his case. 

$20m is bugger all money in North Queensland so I doubt if that figure is true.

gg


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## awg (25 December 2008)

It would seem unbelievable that anyone geared at 50-70% into the ASX200 index funds would have taken no action, cause if they didnt, they would be well into margin.

The precipitous falls since late October would have done it.

Surely you would expect a written warning from your FP, if you had 50% gearing, you would now be worth $0, if you had been invested 12 months or longer, even if you had quadupled over the previous 4 years.

You can bet your balls that the principals of Storm, have "diversified" their assets.

You can be fairly certain that Colonial would have been within the legal guidelines to liquidate, and would have done so because either margins were touched, or so close that some protective clause came into play, to ensure they didnt get stung due to liquidity/risk issues over the xmas period.

I would also suspect Storm Group themselves would be effectively bankrupt due to redemption requests and excessive "costs". I doubt their employees would be enjoying a financial xmas


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## Solly (25 December 2008)

Garpal Gumnut said:


> None in real trouble, real trouble is losing your house.
> 
> I doubt if its just $20m, I have heard of one bloke who leveraged $7m into a $20m debt, but whether its all talk or not I do not know in his case.
> 
> ...





Reading further ASIC says at 12/12 there were over 450 clients who owed their margin lender more than the value of their portfolios, equating to approximately $30 million owing, now it appears that there are approx 300 clients with a total of $20 million owing. So 150 clients could have cleared down there margin loan but I suppose there is a posibility that some may still have issues with debt/equity loans that are still over assets/homes. I suppose this double grearing needs experience to handle it correctly. I'm not brave enough for this strategy.


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## Julia (25 December 2008)

Glen48 said:


> Sad part is if there is not another one running some where there will be soon.
> The CEO's put all the assets in their wife's name yet the wives stick with them look at Adler?????
> Until the head scammers  and their Wives are sent broke they will continue all with the legal system ASIC , ACCC  blessing.



This is a really good point.  The legislation should be changed to include funds in the names of any family members or trusts involving family.


----------



## Sunder (25 December 2008)

Julia said:


> This is a really good point.  The legislation should be changed to include funds in the names of any family members or trusts involving family.




There are already laws that do something to protect against that.

If you transfered money to your wife (Husband in your case), 10 years ago, then the court determines that the money is not involved in any fraud or failure.

However, if you transfered funds 6 months ago to your husband, and there is no clear reason why you did it (tax reduction, balancing of assets etc), then the courts can determine that the transfer were for the sole reason for putting them out of the reach of creditors, and the court can order those transactions reversed. 

Unfortunately, including family and friends can also open a can of worms. What if your brother gave you a $1m house as a birthday gift. You had no idea there was anything dodgy going on, and in fact, your brother told you he was raking in hundreds of millions and this was just a gift to celebrate that.

You sell your house, move in, live it up big on the money from the sale of your old house, then 6 months later, the repo man takes your house and kicks you out on the street with nothing. 

How's that different from a dodgy CEO who transfers a house to his brother to put it out of the reach of creditors, and once everything is settled, he wants it back, perhaps with a small "gratuity" for looking after it? (or rather, how does that look different to a judge who determines whether to confiscate assets or not).


----------



## Monario (26 December 2008)

Some points.

1) I personally know of people who are losing there homes, one of these people is a family member. Our whole family was invested with storm. 4 seperate families. What it has done to our family, and others is devastating.

2) Storm sets up personal mortgages, invests the borrowings in the market and gears against it. When the investment failed the debt on the house is left to the investor.

3) The people who say it is the investors fault have no idea of storms management techniques, nor the way they deal with there customers.

And as a note of interest, I asked all the appropriate questions in relation to the risk, and the possibility of the market doing just what it has. My adviseor now says he wishes he had listended to my concerns a little more.  A LITTLE MORE!!!

Luckily I have written advice, diary entries of communications, and recording of some descussions. In case we ever end up in some form of litigation.

4) At some stage we will end up in some form of litigation.

5) The people who remain loyal storm customers are mad. They possibly do so in ignorance of their current position. And when june next year comes and the prepaid portion of their margin interest runs out, will recieve a nice $1000 a day interest charge(actually proportional to the loans, some will be much higher.). I also know personaly of a few such people and they are in the belief "STORM WILL FIX IT"... 

Storm were stating they would find a way for these people to reinvest the margin loan, I almost immediately realised that without a further injection of cash the lenders would not release the funds, and with most people already mortgaged to the hilt where would the funds come from? Not to mention when to reinvest with such a risky lending ratio!

One of my familiy members was in such a position, and decided to payout the loan at a loss (negative equity) on the premise they will at least get a refund on part of the interest. This has given them a little more time to get the house in order for sale. On the day the decision was made to do this the founder of Storm himself was personaly asked the question of what to. No reply was given!

I also know of some investors who have recieved letters stating Storm would recover their lost funds through future Storm profits/commisions to help them get back in the market. Were not holding our breath. I can only see this as a form of damage control, after all if they dont find a way to help, the bad press alone would be enough to send them under... A form of enforcable undertaking you could call it... Like I said we are not holding our breath.

6) Australia has not yet seen onshore losses, over the next 6-12 months australia will see a massive downturn in mining, and further losses on the dollar due to foreign investors moving offshore. Driving our markets down further. Which should be ringing loud bells of warning for any new Storm clients.

7) Due to the types of commodities and investments Australia offers we will however be amongst one of the first to pull out of the downturn. Inherent with this is the fact that Australia was one of the last to go down.

8) Expect a downturn in realestate, particularly in the mining areas, Perth will be hit hard, as will most of W.A. This will further effect Storms Model.


Please note statements 6,7,& 8 are "MY OPINION" I am not an advisor of any kind. I will answer any questions on 1-5 to the best of my ability without revealing any personal information, so please ask away, there appears to be many people with questions.


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## chops_a_must (26 December 2008)

Monario said:


> And as a note of interest, I asked all the appropriate questions in relation to the risk, and the possibility of the market doing just what it has. My adviseor now says he wishes he had listended to my concerns a little more.  A LITTLE MORE!!!



What was his _actual_ response when you asked this?


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## Monario (26 December 2008)

chops_a_must said:


> What was his _actual_ response when you asked this?




That, this is the best way for us to proceed, it is a safe step, we are running with safe margins/buffers etc. and then when the market started to fall I asked should we sell out while we have profits and restructure. The answer was no. Infact, I asked this question at the last update, given the time again and in the future would they be doing things differently? ie. selling when reasonable profits are available. The answer was No! and that when you have profits, you should borrow against them, and when the market is down find what cash you can to put in... Like we have an unlimited supply or something.

Storm were very big preachers of having a dam! or pool of money(CASH). And as the investment grows, to build this in the good times. However everytime we rasied that question they would somehow find ways for us to borrow more money, or No its not a good time to sell, the market is moving up why sell, the market is down, always some excuse. After all this went down, I found out that storm get paid commisions from the lenders, than it became more clear, if they sold a client down, so to would there commisions deminish.

I only found out that I was in trouble with my investment when the Margin lender, NOT my advisor, rang and asked if I knew I was in a margin call, I did not. They then told me I had infact been in Margin call for 6 weeks... At this point I was given paper work for a 50% sell down to transfer ito cash by Storm, the next day I asked was this a big enough step to secure, new paperwork was drafted for 100% and I personally went in to sign it, I asked if they had sold down the other 50% and they said No. I asked why and when they would and they told me they would do so at their discretion.. Not what one likes to hear from an advisor...


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## Solly (26 December 2008)

Monario said:


> I only found out that I was in trouble with my investment when the Margin lender, NOT my advisor, rang and asked if I knew I was in a margin call, I did not. They then told me I had infact been in Margin call for 6 weeks... At this point I was given paper work for a 50% sell down to transfer ito cash by Storm, the next day I asked was this a big enough step to secure, new paperwork was drafted for 100% and I personally went in to sign it, I asked if they had sold down the other 50% and they said No. I asked why and when they would and they told me they would do so at their discretion.. Not what one likes to hear from an advisor...




I found this link on a  Fairfax news site, this apparently is a copy of a letter sent by Storm advising what you described above.

http://www.theage.com.au/ed_docs/Letter.PDF

If I received something like this I'd definitely  be seeking another opinion. This to me is scary advice, not something I'd welcome.

How could you be in a margin call situation for 6 weeks and not know about ?
There must be a duty to disclose this to you in a 'reasonable' time frame. My expectation is that a Finanicial Adviser, who is getting paid handsomely would have my best interests at heart and would have these issues all in hand.. 

Although I have seen on a Colonial Margin Loan T&Cs that says:

Clause 4.4 
*You* are responsible for:
(a) monitoring your portfolio and determining when your loan is
subject to a margin call; 

Clause 4.3 also says 
(a) You agree that we may provide notice of margin call by any
or all of the following ways to you or your Client Adviser:
• In writing (including by fax, email or other electronic
means)
• Orally, including by telephone

I believe that this is all getting more complicated than it ever needed to be.


----------



## chops_a_must (26 December 2008)

Ouch. I feel really sorry for you. 

Unfortunately, the finance industry is not there to serve you.

And a lot of people here, that work in it, and are planning to work in it, are going to have an almighty shake up, as some of the things that have been perpetrated are beyond comprehension.

Just a shame as a lot of people here, with a basic understanding of investing, would have been able to give you much more worthwhile advice, and certainly actually understand risk.

I don't actually know why financial advisors exist to be honest.


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## Glen48 (26 December 2008)

Maybe a good lesson in ..If you are in in control you are not in control. ..wonder how many could have done the same thing by use their house ATM and buying Blue chip and doing it all themselves????
I guess most people trusted SFA and got SFA.


----------



## Monario (26 December 2008)

chops_a_must said:


> Ouch. I feel really sorry for you.
> 
> Unfortunately, the finance industry is not there to serve you.
> 
> ...





I agree, I have no idea why they exist either. However if you pay good money, and a substantial amount of it to have them give advice and run your investment, and they partake in doing so, why then are they not there to serve you? I employed that person to do a job for me and they failed in that job. There must be some accountability for their actions.

I was not naive, and did, and do understand a lot about investing. But one thing I failed to mention was, I had a update meeting, while I was in margin call, and was told I was not, and that the investment was fine for the moment. Obviously many other things were discussed. But I can not disclose them on a public forum.

I like many other people, only found out about his when the bubble burst so to speak. And prior to, now believe I was been blatantly lied to.


----------



## Garpal Gumnut (26 December 2008)

Monario said:


> I agree, I have no idea why they exist either. However if you pay good money, and a substantial amount of it to have them give advice and run your investment, and they partake in doing so, why then are they not there to serve you? I employed that person to do a job for me and they failed in that job. There must be some accountability for their actions.
> 
> I was not naive, and did, and do understand a lot about investing. But one thing I failed to mention was, I had a update meeting, while I was in margin call, and was told I was not, and that the investment was fine for the moment. Obviously many other things were discussed. But I can not disclose them on a public forum.
> 
> I like many other people, only found out about his when the bubble burst so to speak. And prior to, now believe I was been blatantly lied to.




Monario, you are way ahead of most investors / traders.

I got caught in the 1980's by a mob called Estate Mortgage.

They sent me broke.

I believed them.

I lost all my hard earned.

Since then I have been completely dismissive of financial advisors. They are in the same business as Real estate agents, Motor car salesmen and Late night health/aerobic machinery.

They sell a dream and make too much from it.

I would also include all tip sheets, Intelligent Investor, Huntleys and the Eureka Report in this motley mob..

The Australian , AFR and SMH , with the WSJ, Economist and Financial Times are all you need, all for free online to know as much about the market as the next bloke.

Best for the future, you will be a winner in the long run.

gg


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## chops_a_must (26 December 2008)

The real problem comes down to the way they are paid I think.

There is no money in telling you to go away as it is now. That is a problem.


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## Julia (26 December 2008)

Monario said:


> There must be some accountability for their actions.
> 
> I was not naive, and did, and do understand a lot about investing. But one thing I failed to mention was, I had a update meeting, while I was in margin call, and was told I was not, and that the investment was fine for the moment.



Isn't this the sort of thing that the mooted class action will be looking at?

Monario, are you participating in this action?   I saw Damian Scattini discussing this on ABCTV.


----------



## Garpal Gumnut (26 December 2008)

Julia said:


> Isn't this the sort of thing that the mooted class action will be looking at?
> 
> Monario, are you participating in this action?   I saw Damian Scattini discussing this on ABCTV.





Unfortunately by the time these actions get up, the money is gone, to spouses, families, super funds immune from action. etc. 

Sorry to but in but I've been there. 

Any thoughts Monario?/ Julia

gg


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## Julia (26 December 2008)

Garpal Gumnut said:


> Unfortunately by the time these actions get up, the money is gone, to spouses, families, super funds immune from action. etc.
> 
> Sorry to but in but I've been there.
> 
> ...



I suppose that's often right, gg.
I've never been involved in any class action, but many years ago had a very small investment via a lawyer in his private mortgage scheme.  The first couple of developments went fine, the interest came in every month and the capital was returned at the end, but then - despite all the valuations and other documentation looking good - it all went bad.
ASIC were completely useless until it was too late.  Eventually they appointed receivers whose fees were huge and whose efficiency was virtually non-existent.   It went on for a couple of years and eventually I got back about 5% of my invested capital.

Since then lawyers like S. & G. and Scattini seem to have run a lot of these actions so I'd hoped they would be useful.



Have you had any discussions with Mr Scattini, Monario?

Anyone else had any recent experience with class actions on other failed companies?


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## Monario (26 December 2008)

Garpal Gumnut said:


> Unfortunately by the time these actions get up, the money is gone, to spouses, families, super funds immune from action. etc.
> 
> Sorry to but in but I've been there.
> 
> ...





Yes GG your probably correct in saying that..However I have been told that they carry insurance on a per client basis, and this is where the class action will be focused...

I will be part of the class action, if it proceeds, in the mean time I am still in touch with my advisor and waiting to see the outcome of their actions.. I hold little hope of recouping any funds through them directly. However, I do believe they are tryimg, as I stated in a prior post if they do nothing, they are only hurting themselves! Not holding my breath though.

 One good thing I have time on my side as I am not close to retirement, and out of this I have learnt that I myself can manage my own investments, to a much safer level, and without hefty commisions. The added bonus of this, I will have direct control over my investment rather than having to deal through incompetent and inadequate fund managers/advisors.

The sad thing is, I like many other people will never work through an advisor again, the repercussions for the financial industry that this will create will hit hard, and be felt throughout the country. And on a moral level, I am trying to reach as big a part of the community as I can to make them aware of such problems with advisors.


----------



## Monario (26 December 2008)

Julia said:


> I suppose that's often right, gg.
> I've never been involved in any class action, but many years ago had a very small investment via a lawyer in his private mortgage scheme.  The first couple of developments went fine, the interest came in every month and the capital was returned at the end, but then - despite all the valuations and other documentation looking good - it all went bad.
> ASIC were completely useless until it was too late.  Eventually they appointed receivers whose fees were huge and whose efficiency was virtually non-existent.   It went on for a couple of years and eventually I got back about 5% of my invested capital.
> 
> ...




I have been in touch with Slater and Gordon, they are to date doing a great job. To my knoweledge at this stage, they have said there will be no upfront fees, and if the action is succesful, 30% is their fee.  I am comfortable with that and happy to have someone like scattini, genuinely concerned, and working for us.


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## awg (26 December 2008)

Solly said:


> I found this link on a  Fairfax news site, this apparently is a copy of a letter sent by Storm advising what you described above.
> 
> http://www.theage.com.au/ed_docs/Letter.PDF
> 
> ...






The date of that letter would be critical with regard to any legal action.

To me that seems like a crystal clear warning.

One investment mantra that I decided long ago was to never inject additional security to meet a margin call.

It wold be astonishing if anyone was allowed to be into margin without knowing!

Evidently Storm must have had pooled funds, in order for this to occur, otherwise the margin lender would have closed individual positions surely?

Terrible for the investors

I even feel sorry for the FPs...they would be completely broken.

In a previous existence, I saw a few FP who were broken men, as a result of the stress of the '87 crash, which saw many geared investors wiped out, blaming them.

I would hate to be a geared property developer in North Qld over the next few years.

As for that Madoff character, I seriously believe the appropriate punishment for him, would be the same as what was issued to the Chinese fellow in charge of Food and Drug administration.


----------



## agathos (26 December 2008)

Thanks Garpal Gumnut,

I thoroughly enjoys reading your varied entries into different forums in ASF. 
Your views are mature and pragmatic indeed.

I too, have ONLY bad experience with Financial Planners. 
With their mouth , they profess to be a Client's Advocate!
But, heck, most of them are just greedy $$$ Nazis.

Back in the 1990s in Singapore, banks use to use cheongsam clad ladies to lure male suckers like us and dirty old men (D.O.M) into parting their life savings and CPF aka Central Provident Fund (Singapore's version of OZ Super Annuation Fund) into various Unit Trust investments.

None of them made any money and it was soooooooooooooooo bad that when the Singapore Government began a thorough reform of these schemes, any company that wants to take client's money for investment must return at least 2.4% per annum or else they would be OUT the next year!

Next come my financial planner. In good timnes, they profess to the mantra CAPITAL PRESERVATION!

It's all bull $%##. When I was back in Singpaore to visit my dad in July 2008, I specifically instruct them to withdraw my money. They did NOT.

And when I check with them a month later, I loss SGD$20,000.

It's all HEART ACHE!

I guess the biggest issue confronting the industries mentioned by Garpal Gumnut and a few other discerning old birds in ASF , these industries including the Real Estate Agents, Car Salesmen, etc is this:

VESTED INTEREST> Most of these to put it very diplomatically and nicely are probably people who began with the right intentions to EARN a decent living & plan to contribute to the economy and the world with $$$ producing activities.

But as time went by , and under *greedy and ungodly bosses*, their TRUE NORTH shifted as $$$ creep into their eye balls and Eustachian Tubes (ear canals).

VESTED Interest is the biggest single determining factor I believe that destroys the integrity of these industries. 

Let us continue to **and *exercise $$ Diligence *when making our investment decisions.

A good tag line whether I am approached by a call center in India or a cheap sounding blog from Sydney for some "Holidays' I won is this:

"_Oh, sorry. U must have got the wrong person.I live in a rented address, have just been pronounced bankrupt and am about to hang myself. Any last words??????????"._

Most of them just hang up!

Together, let's beware of MORE *STORM Financial and FINCORP *NAZIs!

Beware, some of them may not use storm tactics, but rather sweet words!

Cheers mates...........................Blessed Xmas. and Healthy 2009.


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## Garpal Gumnut (26 December 2008)

Thanks mate.

I'm not as old as you think.

My cv includes 

Roadie for the Allman Brother Band.

Giving that Irish git who tries to save Africa his first gig in Dublin.

Being batonned by the coppers during an anti apartheid demonstration in London.

Helping a well known corporate "person of interest"  ( not Rene ) find his bags at Melbourne airport on my migration to this great land, and being invited into his circle and making my second million as a result.

Moving to glorious Queensland and working with Vinnies, a great bunch of people.

Serving in the ADF in E Timor and as a result having an absolute respect for the resilience of the human race. 

An absolute contempt for financial planners, cockroaches upon the crumbs of life, also tip sheets.

Perhaps I am old but on reflection but I wouldn't do it any different, and I don't feel old.

Storm is Storm.  there will be more.

gg


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## agathos (26 December 2008)

Ha ha Ha!
Oh GG, you are damn hilarious!

I was in East Timor too, in 2006 helping for 2 weeks on a social re-engineering mission with a church from Singapore.

The east Timorese are just simply resilient, and humble people. 

I am happy you've your $$$.
Fully agree with the cockcroach thingy. 
Hmm,. we should have more cockcroach sprays ready to give away 
free to our fellow ASF , now that times are bad........more cockcroaches will come out when the land is dark........................


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## Garpal Gumnut (26 December 2008)

agathos said:


> Ha ha Ha!
> Oh GG, you are damn hilarious!
> 
> I was in East Timor too, in 2006 helping for 2 weeks on a social re-engineering mission with a church from Singapore.
> ...




I was based at Maliana and Memo in 2001 on the border with Indonesia. 

Great people the Timorese.

They leave the bludgers for dead.

This is turning into a N.Queensland / NT thread.

I have a contract to bring some bulls up to Darwin next winter for the Darwin Show. 

Anyone interested in having a financial conference during the show.

I'll give everyone receipts that ASIC and the ATO would not be game to challenge.

gg


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## Garpal Gumnut (26 December 2008)

Sorry Storm victims I got carried away.

Keep up the anger mates.

gg


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## Solly (27 December 2008)

Story from Sunshine Coast Daily.

http://www.thedaily.com.au/news/2008/dec/27/storm-financial-adviser-wipes-out-retirees/

"Couple owe $1.3 million, are about to sell their $500,000 house and are both desperate to find any sort of work to try to extricate themselves from what seems a never ending nightmare.

The couple owe $855,000 to Colonial and a further $440,000 to the Bank of Queensland. The interest loan repayments to Colonial are covered, but they are being forced to pay $3000 a month to BOQ."


How could this have happened? 
I suppose they are not the only ones in this situation.


----------



## Jifromoz (29 December 2008)

Hi everyone, Have been following these posts with interest. My In-laws (Retired) told me last Sunday they were with Storm and after my investigation found out they had been completely and utterly stormified.  What really got my goat was that they had been told all through the last 6 months that everything was fine (It was not). Storm advised them to sell all stock at the end of October and put into a Cash management trust as it had a 100% cover for their margin loan (In excess of $1M). They where therefore earning around 4% interest on the investment and paying 7.5% on margin loan. An FP told them to do this!!!!!!! After I found this out I told them to get rid of the loan. Upshot is they now have a significant loan against the house and no income. Connolly Suthers in Townsville are also investigating a class action. Not sure what will happen going forward but I do know that they will not lose their house as our family will not allow this to happen. As to the Cassimatis clan, I would hope that the regulators & lawyers chase all of those involved and recover something.


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## Garpal Gumnut (29 December 2008)

Jifromoz said:


> Hi everyone, Have been following these posts with interest. My In-laws (Retired) told me last Sunday they were with Storm and after my investigation found out they had been completely and utterly stormified.  What really got my goat was that they had been told all through the last 6 months that everything was fine (It was not). Storm advised them to sell all stock at the end of October and put into a Cash management trust as it had a 100% cover for their margin loan (In excess of $1M). They where therefore earning around 4% interest on the investment and paying 7.5% on margin loan. An FP told them to do this!!!!!!! After I found this out I told them to get rid of the loan. Upshot is they now have a significant loan against the house and no income. Connolly Suthers in Townsville are also investigating a class action. Not sure what will happen going forward but I do know that they will not lose their house as our family will not allow this to happen. As to the Cassimatis clan, I would hope that the regulators & lawyers chase all of those involved and recover something.




This is a not uncommon story in Townsville.

Keep on fighting for them. Connolly Suthers are a respected law firm in Townsville.

gg


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## Glen48 (29 December 2008)

The Storm big wheels will most likely do a Skase and head off overseas. Skase was allowed to get his passport back and leave OZ and he claimed he only had about $1,800.00 in the bank, commonsense would tell you he would not go far on that yet the Judge agreed and we know the rest.


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## numbercruncher (29 December 2008)

Solly said:


> Story from Sunshine Coast Daily.
> 
> http://www.thedaily.com.au/news/2008/dec/27/storm-financial-adviser-wipes-out-retirees/
> 
> ...





I wonder if we are supposed to show empathy to these people - its was just glorified gambling it seems .....

Bankruptcy must surely look tempting - how many working years do they have left I wonder ?


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## Solly (29 December 2008)

numbercruncher said:


> I wonder if we are supposed to show empathy to these people - its was just glorified gambling it seems .....
> 
> Bankruptcy must surely look tempting - how many working years do they have left I wonder ?




I'm just concerned for those who really trusted the advice they were given and thought that it was this easy to be financially secure with this strategy.

I can only go on what I've read in the press but it seems that some didn't fully grasp the risks involved with double gearing. Some of those who followed the advice don't appear to me to be greedy but thought that this strategy would give them a modest sustainable income in their retirement.

I believe that Storm & their advisors would not deliberately set people up to fail, but I find it hard to fathom that Storm didn't have a mitigation strategy in place to insulate clients from large market downturns.

Maybe it will be up to the regulators & the courts to decide the eventual outcomes ?? .....


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## Stormin_Norman (30 December 2008)

i had warned a number of people about storm financial. their system and fees were quite extreme. 

people however much prefer to view potential upsides and ignore the downsides.


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## Gerkin (30 December 2008)

I believe any financial planning court cases will come down to is "Know your Client" "Know your Product" and I have already heard on the grape vine this has probably been breached in particular with retirees having huge loans and also little income(as seen on TV sob current affairs programs). Also in effect with how the index funds were managed, How well did the advisers know the products they were recommending/flogging. All of this is a Stat Law Level,

Another ground for action would be common law in regards to the "implied duty of care", 

I feel real sorry for the clients here. There will only be two things come about from this
1)Greater PI premiums for the advice industry ( I dont think the insurer will be to happy about this)
2)A great impact on the Nth Queenland Community

All FP and Owners of business's never have assets in there own name so it would be basically useless going after any FP for cash, however maybe for pride.


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## shibby (3 January 2009)

Monario said:


> I agree, I have no idea why they exist either. However if you pay good money, and a substantial amount of it to have them give advice and run your investment, and they partake in doing so, why then are they not there to serve you? I employed that person to do a job for me and they failed in that job. There must be some accountability for their actions.
> 
> I was not naive, and did, and do understand a lot about investing. But one thing I failed to mention was, I had a update meeting, while I was in margin call, and was told I was not, and that the investment was fine for the moment. Obviously many other things were discussed. But I can not disclose them on a public forum.
> 
> I like many other people, only found out about his when the bubble burst so to speak. And prior to, now believe I was been blatantly lied to.




My understanding of "being in margin call" as far as the lender was concerned was entirely different if you were a Storm client as Storm had negotiated a larger percentage rate. For example if traditional rates were say 80% then we had up to 90% so if you were to go to the lenders website there would be an alert in our account details but it would not be relevant until we reached the negotiated range.  And please also remember when Storm was trying to cash us up Challenger had frozen all accounts and only dribbled out the money.  I am also concerned as to what is happening but aren't we all guessing at the true picture at the moment and all our minds are going a little crazy.  I don't know if this is accurate but just maybe it is illegal for Storn Financial advisers to give us advice/information while there is an ASIC inquiry - I don't know I am just guessing but please just keep an open mind till we get some info one way or the other its like fighting windmills wouldn't it be better to save the angst when all the info is in front of us.


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## Mash (3 January 2009)

Storm has a lot to answer for. We knew we should have been in Margin call when the broadmarket hit 4000 points and even when we approached our advisor he insisted we weren't. And when we had a video link up with Emmanuel Cassimatis on Nov 28 he claims they had only found out an hour before our link up. After speaking to Colonial ML they insist Storm head office knew clients were in margin call on a daily basis and refused to notify us saying we would sit it out. Perhaps ego got in the way of common sense. We have lost 4 million dollars and now owe colonial $200,000 and the ANZ 2.3mill. Joined storm 3 years ago.  Got to nett worth of 12 mill...now broke and selling all our property, even the roof over our heads. From multi million to zero in 3 years after working hard for 25 years in our successful business. Never trust any one again.


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## chrisgee (4 January 2009)

Mash said:


> Storm has a lot to answer for. We knew we should have been in Margin call when the broadmarket hit 4000 points and even when we approached our advisor he insisted we weren't. And when we had a video link up with Emmanuel Cassimatis on Nov 28 he claims they had only found out an hour before our link up. After speaking to Colonial ML they insist Storm head office knew clients were in margin call on a daily basis and refused to notify us saying we would sit it out. Perhaps ego got in the way of common sense. We have lost 4 million dollars and now owe colonial $200,000 and the ANZ 2.3mill. Joined storm 3 years ago.  Got to nett worth of 12 mill...now broke and selling all our property, even the roof over our heads. From multi million to zero in 3 years after working hard for 25 years in our successful business. Never trust any one again.




I have been following this thread after I found it googling. I have a close friend that had about $1.7mill that has all now been lost, all he has now is a $350K interest only loan over his house and is trying to get a another job after 'retiring' at 50.

He and his wife are still in a state of denial and think that Storm will somehow save them. I can't understand their loyality. They are going back to see Storm in the New Year to see what can be done. I think they are crazy.

They are basically back to where they started when they were first married.
i.e. a huge debt but now only a limited amount of working life left to pay it off. Looks like they need to pay about 4K a month for 10 years just to keep their house, then there's the running costs, keeping a car going, buying food etc...
But he doesn't even have a job now !
I don't think it's looking that good for them.


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## Julia (4 January 2009)

Mash said:


> We have lost 4 million dollars and now owe colonial $200,000 and the ANZ 2.3mill. Joined storm 3 years ago.  Got to nett worth of 12 mill...now broke and selling all our property, even the roof over our heads. From multi million to zero in 3 years after working hard for 25 years in our successful business. Never trust any one again.



Do you mean that your initial investment with Storm was $4 million?

When you "got to net worth of 12 million' did you consider that maybe that was enough of an asset base to fund your retirement (many would consider that $4M was) and get out?


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## sqwark7600 (5 January 2009)

*Re: Storm Financial Group Class Action*

This type of financial advisory failure appears on a regular basis and is usually successful at attracting people immersed in their career, family and life. Usually they neither have the time, expertise nor in many cases the will to follow the disciplines of investment. They rely in sanguine naivety on the presentation of the cohort of advisory types in the community for guidance and then as a backup believe that the government with their sophisticated financial regulatory infrastructure will come to their aid when the bubble bursts.
Sadly that is not true; what does occur is immense pressure on the individual’s career and family to the extent that break-up, job loss, chronic depression and even suicide results. The initial reaction is disbelief and turmoil. What to do? It is a sad picture but may I say that in this situation you are not alone.
Having been through such a firestorm may I offer you the following simple response that worked for our group some years ago resulting in cash investments recovered and directors jailed.

You are not a lone individual in this situation, you are part of a large group and your aim should be to take advantage of that fact and build the group into a cohesive force against those that caused your situation and took fees/profits for so doing. Also Australia has a great legal system.

A class action is required; that is the most effective tool for a group of individuals wiped out financially by investment failure. Legal action can be undertaken utilising a litigation funding company or alternatively in some cases larger corporate legal firms will act on the basis of nil up front and a 30% trailing fee if they think you have a case.
The group needs to assess the situation and organise a lead administrative volunteer team and agenda; this should be done at a series of coordinated meetings facilitated by a strong chairperson. You will need to create a structure of sub group organisers to make sure information and responses are free flowing to all group members in their specific areas and towns. The first obvious major task is to access a list of all those investors involved.
The down side is that this takes time (seven years for our group-although it was complex) and personal effort; the initial major hassle is cohesion of the group both practically and legally. Expect no help from the government or industry agencies whilst they make the laws and regulations they are not very effective at policing them for the individual. 
With modern communications and your assets/house at stake you will be surprised how easy it becomes after the initial shouting dies down.
Good Luck.
This post is my opinion only; it remains your call as to your actions. :swear:


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## bunyip (5 January 2009)

Julia said:


> Do you mean that your initial investment with Storm was $4 million?
> 
> When you "got to net worth of 12 million' did you consider that maybe that was enough of an asset base to fund your retirement (many would consider that $4M was) and get out?




Mash

Commiserations for your loss. But I find myself asking similar questions to what Julia has asked. With the sort of wealth you once had, even when you were worth a 'mere' 4 million, surely it was time to think that maybe you didn't need any more wealth, particularly of the kind derived from high risk investments. If you were making staggering returns, if your wealth was growing at an amazing rate as it can do if you leverage heavily enough, surely it must have occurred to you that such returns are invariably accompanied by high risk?
Did it never occur to you that it would have been prudent to retreat to safer investments?


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## Stormin_Norman (5 January 2009)

stop losses anyone????????

how can you let your stocks fall by half and not get out?????

investors: someone who'll hold in a bear market in the mistaken belief 'itll come back'.


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## Gerkin (5 January 2009)

Sqwark
May I ask what company you invested in that you recieved cash back?

I would be very suprised if people get anything back. You must remember we are talking about alot more money here. The PI Insurers will have get out clauses that limit them to xxx, and the financial advisers will not own anything, so I really just cannot see where funds will come from. Justice may be done in the form of banning of auth reps, canceallation of AFSL but any further id be suprised.


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## Stormin_Norman (5 January 2009)

AFSL tests how well u understand regulations. not if youll make any money.


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## Glen48 (5 January 2009)

Clive James view on making money:
http://news.bbc.co.uk/2/hi/uk_news/magazine/7808009.stm


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## Gerkin (5 January 2009)

Stormin_Norman said:


> AFSL tests how well u understand regulations. not if youll make any money.




I think you read my post wrong, Sqwark was staing that a class action may bring about financial remedies for clients, all i posted was it is more likely that the Auth Reps standing and AFSL will be affected.


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## Stormin_Norman (5 January 2009)

no. i was just pointing out AFSL doesnt mean what a lot of people looking for advice think it means. that is people know what theyre doing.


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## Garpal Gumnut (5 January 2009)

The website is still down.

It looks bad for the investors.

They said they would be back on board this morning.

gg


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## pacestick (5 January 2009)

I honestly thought this thread was a fraud why would anyone who had made millions put it all into high risk stuff


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## Stormin_Norman (5 January 2009)

pacestick said:


> I honestly thought this thread was a fraud why would anyone who had made millions put it all into high risk stuff




greed.


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## awg (5 January 2009)

Julia said:


> Do you mean that your initial investment with Storm was $4 million?
> 
> When you "got to net worth of 12 million' did you consider that maybe that was enough of an asset base to fund your retirement (many would consider that $4M was) and get out?




Hi Julia,

When you consider people who are seriously wealthy, most of them got that way by taking risks and using maximum leverage.

In 4 years of 20+% sharemarket returns at 80% leverage you would have almost doubled your money annually.

ie 1 million to 8 million ( if no fees were involved)

if u did not monitor things on a very regular basis, with that leverage you could be wiped out completely in the year 2008.

there are so many people who have been in business or inherited or sold there place in Sydney that would put $1m into an investment and believe they were on a great thing, its not funny, they would not be sharemarket sophisticates.

I had money in 2 geared share funds) Colonial First State and Macquarie Geared) and they performed fantastically for 3 years.

Luckily I sold them as soon as the market was down 10%.

I would hazard a guess a lot of people didnt

I can only assume Storm had pooled funds, otherwise what took place could not have occurred.

I would be interested to know


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## Stormin_Norman (5 January 2009)

i know someone with $6mil in storm.

she didnt listen to me. i only say things once usually. and i warned her 3 times.


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## shibby (5 January 2009)

Garpal Gumnut said:


> The website is still down.
> 
> It looks bad for the investors.
> 
> ...



They are back I spoke to Sydney office today they are fully staffed, does that mean it doesn't look bad for investors? 
In my humble opinion it looks like they are tring to do the right thing - they are not hiding, have not left the country, they are there to answer questions. 
So lay off and give them a break until the truth is revealed.


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## Julia (5 January 2009)

awg said:


> Hi Julia,
> 
> When you consider people who are seriously wealthy, most of them got that way by taking risks and using maximum leverage.
> 
> ...



My point was rather that if the poster had $4 million why was there a need to leverage further, thus risking considerable loss in a downturn.




> if u did not monitor things on a very regular basis, with that leverage you could be wiped out completely in the year 2008.



Quite so.  Therefore it's beyond my comprehension that anyone would have that sort of money invested, leveraged so highly, be unable to avoid hearing about how the markets were falling, how the whole financial system was coming down around our ears, and *not do anything about it???*

I don't care how much claim people make about trusting their financial advisers etc etc.  If you put money out there in the market, you have to take responsibility yourself for showing a modicum of common sense about what happens to it.  If you're dealing with millions of dollars, then it's just damn stupid not to equip yourself with a decent level of financial literacy.





> there are so many people who have been in business or inherited or sold there place in Sydney that would put $1m into an investment and believe they were on a great thing, its not funny, they would not be sharemarket sophisticates.



You don't have to be a sharemarket sophisticate to monitor what the market is doing.  It has been all over all the media almost every single day throughout 2008.  You'd have to be living under a rock in the Gobi Desert not to know what was happening.








> I had money in 2 geared share funds) Colonial First State and Macquarie Geared) and they performed fantastically for 3 years.
> 
> Luckily I sold them as soon as the market was down 10%.



I'm pleased to hear it.  However, luck should have had nothing to do with it, but rather a considered decision which you seem to have made.





> I would hazard a guess a lot of people didnt



No, and we now see the results.


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## Solly (6 January 2009)

Can anybody explain how the insurance works?
Can the clients have access to any pay out with out taking "legal" action?


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## Trevor_S (6 January 2009)

Stormin_Norman said:


> investors: someone who'll hold in a bear market in the mistaken belief 'itll come back'.




For that statement to have any validity you would need to be able to show a decline in the All Ords in Aus. that hasn't come back.   The issues STORM clients have at the moment are all about using the wrong methodology to leverage purchases (that and the fact huge fees cut into any genuine profits made but that's another matter entirely)  I have never run my margin loans above 30% LVR and always gear positively.

I am still banking my dividends from shares purchased in the early 1990's and held through several market "corrections".  I just don't accumulate at times when shares are over priced, like the last couple years but I do hold, accumulate cash and wait.

I am buying again (not much but into the six figures worth, started in late Nov and Dec) because I think in 10 years time the market will be above where it is now.  I have paused now, will wait another couple months, continue to investigate companies I am interested in and start purchasing again

You could be right, this time it might be different and we'll never recover but my "guess" is you're wrong and I am backing my guess with cash.


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## Stormin_Norman (6 January 2009)

Stormin_Norman said:


> stop losses anyone????????
> 
> how can you let your stocks fall by half and not get out?????
> 
> investors: someone who'll hold in a bear market in the mistaken belief 'itll come back'.






Trevor_S said:


> For that statement to have any validity you would need to be able to show a decline in the All Ords in Aus. that hasn't come back.




very true trevor.

i guess my 'long term' of 4 days is a bit shorter then other's definition of long term.

i will point out that the 1927 DOW correction took to 1968 to recover in real dollar terms in some floppy attempt at defending my point. rather then getting out at -10% investors believe itll come back, with a much more short term view then you have.

youre a warren buffett buy and hold man. im a john henry go with the trend man.


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## Glen48 (6 January 2009)

In the 16 hundred 's we have the Tulip bubble collapse in the 2,000 we had the credit bubble collapse, in the X yrs we will have the next one.


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## Stormin_Norman (6 January 2009)

dont forget the railways (1800s), and the automakers (1920s).

the only big bubble that didnt really crash the economy was the dotcom (2000). maybe our current drama is a hang over from that somewhat?

anyways. this is tangential to storm financial.

why will people get two opinions on their health, but not their financial affairs?


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## awg (6 January 2009)

There website is operating

http://www.stormfinancial.com.au/index.php

no mention of any trouble!

here's a quote off it

" We've seriously bargained to achieve reduced interest rates, lower establishment and transaction costs and some of the lowest management fees in Australia. This is the result of significant positive relationships with some of Australia's leading financial institutions."

Kind of ironic in light of some of the posts on this thread.

As I have mentioned before, what really does not add up to me is how people found themselves in margin calls.

I cannot find any plausible explanation for this


As I see it there are only a few possibilities

1) Storm had a arrangement with CFS, where funds where pooled and each client had there individual gearing managed by Storm ( this seems to be the most likely)

2) Storm managed each account individually, and did not advise margin call being reached	 

3) People failed to reduce there margin after being advised ( as seems possible from the letter posted in an earlier post)

4) Some unfortunate combination of the above.

Fact of the matter if you are in negative equity, you either inject more and hope the market recovers or go broke.

My understanding is that FP Professional Indemnity Insurance would only be applicable if advice or action was incorrect, and is limited to a set amount.

You can bet there will be records of emails between Storm and CFS come out in the legal process


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## Gerkin (6 January 2009)

Solly said:


> Can anybody explain how the insurance works?
> Can the clients have access to any pay out with out taking "legal" action?




All auth reps and AFSL holders as well as doctors, lawyers, accountants have professional indemnity insurance. However to get a payout you have to prove negligence in the professional advice given or that the adviser has broken a statutory law, and that you relied on the advice.

If after all this some are deemed to be negligent, and you are suing the adviser/afsl holder you may be eligible for something, however the insurer will appeal any decision if its a court decision and drag it out longer, prob take around 4 years.

The insurer will also have a get out clause capped at xxx amount.


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## Solly (7 January 2009)

"Storm Financial bosses break their silence"

Story from The Townsville Bulletin....

http://www.townsvillebulletin.com.au/article/2009/01/07/31725_hpnews.html

Some very interesting replies to some very direct questions...:22_yikes:

Your views??


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## Garpal Gumnut (7 January 2009)

Solly said:


> "Storm Financial bosses break their silence"
> 
> Story from The Townsville Bulletin....
> 
> ...




I read it over a Smoked Salmon Eggs Benedict looking out from Magnetic Island this morning in the Townsville Bulletin, and it is the usual stuff that comes out in these debacles from the principals of Financial advising establishments on the ropes.

As Mandy Rice-Davies said of Lord Astor who denied r**ting her at a trial in the 1960's in the Old Bailey.

*"Well he would say that , wouldn't he."*

http://en.wikipedia.org/wiki/Mandy_Rice-Davies

Poor, poor bastards who have lost their hardearned. I'm over here looking at Units. They are cheaper than before Christmas.

gg


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## Solly (7 January 2009)

Garpal Gumnut said:


> .........
> *"Well he would say that , wouldn't he."*
> 
> http://en.wikipedia.org/wiki/Mandy_Rice-Davies
> ...





That's a classic gg.

Also I found this quote from the article rather strange...
"We are also a large part of the negative equity issue.
While this is no consolation, we are sure it proves we have not acted differently for ourselves. Being in the front line of course makes us the first casualties, and as such the Storm group accounts for the biggest losses alongside the group of clients that are in that position."

"the Storm group accounts for the biggest losses"....

This to me is rather a strange admission ...Storm has the bigest losses .....WTF ..... and they were giving advice to others....


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## bunyip (7 January 2009)

Garpal Gumnut said:


> I read it over a Smoked Salmon Eggs Benedict looking out from Magnetic Island this morning in the Townsville Bulletin, and it is the usual stuff that comes out in these debacles from the principals of Financial advising establishments on the ropes.
> 
> Poor, poor bastards who have lost their hardearned. I'm over here looking at Units. They are cheaper than before Christmas.
> 
> gg




Sure you have to feel sorry for them. But among all these investors who've publicly said they've been cleaned out by the Storm Financial debacle, very few have shown any inclination to admit that they themselves  bear some responsibility for their cavalier attitude towards investing. I mean, nobody these days can possibly be unaware that very high returns go hand in hand with very high risk. And nobody could have been unaware of the storm clouds brewing over the financial markets. Every day it was plastered all over the media. 
I thought Julia summed it up very well by saying _'You'd have to be living under a rock in the Ghobi desert not to know what was happening.'_

If you're heavily leveraged and the warning bells are ringing loud and clear in every newspaper and on every TV news and financial programme, surely you'd take at least partial defensive action such as quitting portion of your investments, reducing your leverage etc.
If not, then you risk getting taken to the cleaners, and it's just not reasonable to put 100% of the blame on your financial adviser. 
Sure, Storm have a lot to answer for, but so do the individual investors who got stung.


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## Glen48 (7 January 2009)

GG
Smoked Salmon eggs for breakfast things changed since I was on Magnet Island the best we could hope for was something slightly cold that ran down hill.
Is the Beer ticket machine still on one of the columns in the Public bar?
I set that up for old mate Tony Moody before he make good.


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## donteventryit (8 January 2009)

A bit of light reading. 

If you want to know exactly what has been going on for the last few months, from Storm's and the CBA's perspective, have a read here. 

http://tinyurl.com/8d89ax

Courtesy of http://business.theage.com.au/business/cba-and-storm-battle-over-meaning-of-court-order-20090107-7c19.html

Discuss.


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## Gerkin (8 January 2009)

Solly,
Of course the Storm group accounts for the biggest loss, there trail income is stuffed and goodwill non existent after the media is through with them


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## Garpal Gumnut (8 January 2009)

Glen48 said:


> GG
> Smoked Salmon eggs for breakfast things changed since I was on Magnet Island the best we could hope for was something slightly cold that ran down hill.
> Is the Beer ticket machine still on one of the columns in the Public bar?
> I set that up for old mate Tony Moody before he make good.




All quite posh now mate, although I know where there is a beer ticket machine on Maggie on Good Friday every year, the godbotherers don't let you drink that day.

gg


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## Solly (9 January 2009)

donteventryit said:


> A bit of light reading.
> 
> If you want to know exactly what has been going on for the last few months, from Storm's and the CBA's perspective, have a read here.
> 
> ...




This is the quote from Justice Grenwood that I find the most interesting:
"Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O’Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive. Of course, the ultimate position must be tested at trial where the evidence will be closely examined and findings reached on all aspects of the controversy."

The important words are "*capable* of being misleading or deceptive or *likely* to mislead or deceive.......*the ultimate position must be tested at trial *where the evidence will be closely examined"

What is very clear to me is that in the Justice's opinion there is a possibility of being deceptive etc....but this needs to be tested at trial for a finding.  The words "capable/likey" do not translate as "actually" being deceptive etc.

My belief at this point is that this is neither beneficial to Storm or The Comm Bank.

All I can see at this stage is, Lawyer's, QC's and the media all circling above...."and loving it".

And what benefit will all this be to those poor souls who are now living in trailer parks


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## donteventryit (9 January 2009)

Solly said:


> And what benefit will all this be to those poor souls who are now living in trailer parks




How will a judgement from the courts help the existing clients? From what I can make out, Storm are just nitpicking ... what are they _actually _trying to prove? That Colonial Geared Investments (CGI) should have been in touch with Storm's clients the whole time informing them of their LVR and margin call position? It seems absolutely ludicrous. 

Can anyone help me out here?


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## Julia (9 January 2009)

donteventryit said:


> How will a judgement from the courts help the existing clients? From what I can make out, Storm are just nitpicking ... what are they _actually _trying to prove? That Colonial Geared Investments (CGI) should have been in touch with Storm's clients the whole time informing them of their LVR and margin call position? It seems absolutely ludicrous.
> 
> Can anyone help me out here?




If the investments were placed via Storm, then CGI wouldn't have been communicating directly with Storm clients.

Re the nit picking, you might be right.  I expect Storm are running round trying to be seen to be doing something, anything.


----------



## Garpal Gumnut (9 January 2009)

Their investment concept as much as I can glean was to 

*margin on margin

pyramid as the bull market moved up

not to have appropriate stop losses.
*


Fountains in the vestibule, fancy dunnies with gold plated handles and a qualification in Financial Advice does not make for a safe harbour for one's hardearned money.

The money is gone.

Gone with the bear, through a zillion zeros and ones on thousands of computers.

All the junk law and prayer will not bring it back.

Banning financial advisers would seem the way to go.

Just ban the whole lot of em.

gg


----------



## donteventryit (9 January 2009)

As far as _I_ can tell it is/was this: 

Start off with relatively manageable leverage of 50% (against the margin loan) - this would be determined by serviceability. Interest payments for the equity loan and margin loan are drawn from the CMT account. The fee would be borrowed from the equity loan. 

This may be from an equity loan, superannaution (if old enough to access), possible from the sale of other investments you may have. The initial amount borrowed would 80% (approx.) be placed into investments and the remaining 20% (approx.) would be placed into a Cash Management Trust (CMT) account. 

The tax return from the investment loan are directed to the CMT to help service debt, as well as whatever surplus you currently have in your budget. 

From here let the market do its thing (ie go up). Once it has gone up ... say 10% ... sell the profit to the CMT. This will help with future interest payments, and will allow you to gear the rest back into the market (for a fee). Generally done 2:1, for every dollar of cash borrow two dollars from the margin loan to maintain the current margin loan ratio. 

This is done progressively to churn the fees out of you (which are also borrowed). 

In future years, prepay the interest on the Margin Loan from the CMT account. 

Rinse and repeat. 

Soon, the investment needs to grow by double digit percentages per annum just to afford the interest bill. 

Not only this, but the retirees that were geared, were also drawing income from the CMT - taking them closer and closer to a margin call ... Not very sustainable, unless you're in a never-ending bull market. 

I think the problem was that Storm allowed the Margin Loan LVR to dictate the investment strategy, not taking into account other debt (equity loans) that clients had. Which is why so many are now in negative equity positions. 

Anyone feel free to point out where I'm wrong or ask for clarification.


----------



## Garpal Gumnut (10 January 2009)

Garpal Gumnut said:


> Their investment concept as much as I can glean was to
> 
> *margin on margin
> 
> ...






donteventryit said:


> As far as _I_ can tell it is/was this:
> 
> Start off with relatively manageable leverage of 50% (against the margin loan) - this would be determined by serviceability. Interest payments for the equity loan and margin loan are drawn from the CMT account. The fee would be borrowed from the equity loan.
> 
> ...




There is a retraction of sorts by Storm in today's Townsville Bulletin of comments made about the initial Storm spin on litigation proceedings between it (Storm ) and CBA-Colonial.

gg


----------



## myusernam (10 January 2009)

There's been a bit of talk about the psychology of going with storm so I thought I'd explain how I found myself with them...

I first went to storm and did the education seminars around the time of semptember 11.  I was actually in there a day or two after and can remember them running around madly organising clients to throw their money into the market.  I then moved away, bought a second house (did really well!).  

Had always written them off as too higher fees etc.  Was always going to invest directly myself through a direct investment firm like neville ward or commsec direct and save myself commissions.  I moved back to townsville in 2006 and only owed $55k on my $450K home at the age of 32.  I had a bit of opportunity cost guilt at the rampant gains of the sharemarket over the last few years, and felt quite negative about my super situation as I had been in the military and had a preserved benifit that was locked away and I had to start my private sector super from scratch.  I also had relations invested with DalleCourt (same sort of strategy, although perhaps not as aggressive) who had done well.

Coming from Townsville I of course knew people who were with them but had also heard friend of a freind bad reports.  These were always vague and I pushed them aside as the usual fear when it comes to this sort of thing.  Storm kept creeping back into my consciousness.  I went to sydney and noticed that they had spread down there (logo on some big highrise in the city).  A cabdriver in cairns waxing lyrical about how good they were, a youngish fellow on a fishing trip retired and living the good life etc.

Eventually I went back and decided that if I was going to gear then I wasn't going to do it alone as I had neither the time nor the stomach for it.  I had heard that storm was the biggest single customer of commonwealth margin lending in australia and that they didn't even deal exclusivley with them.  I took faith in this and that they had been around in townsville for quite a long time, and they had made a lot of people wealthy.   The fact is in townsville a lot of people with money were with them and it gave them some sort of implied credability.  

Also 7 percent up front didn't seem quite so bad when you were geared and could easilly hop over the fee step in a rising market (showed us graphs of other investors results) compared with the 4 percent a bank adviser wanted for parrot regurgitating what fund their investment arm said was a buy.

Anyway I can't kick myself forever over one bad decision.  I consider myself fortunate in that I am still young, have a higher than average income, can still invest some money into the sharemarket and will be able to rebuild.  I had to shut everything down myself (storm wanted me to stick around geared at over 90 percent).  I certainly would have stop loss coverted to cash beforehand if I had known of my situation, but had placed my faith in them as I had paid lots of money for them to be my guide, and trusted that they had dealt with situation like this before.   If I was a retiree then I would certainly look at bankruptcy.  There are worse things.  For all those who quote greed etc - I dont beleive I am greedy.   The oldies I see in the waiting rooms there are not flashy or extravagent for the most part.  They just saw a (formerly) successfull firm and thought they were doing the best thing for themselves.  

Imagine now owing a huge sum before you are back to having nothing.  Renting, paying off a margin loan with no asset before you can then save to buy a house.  Now imagine if your'e 60.  For storm to quote retiree's positions as selling their houses and living in caravan's as "not that bad" or blaming the market is just plain wrong.  To be a storm client they made you fill out a risk profile and would only take you if you fell into the low risk category!  Marriages will be broken not just now, but in decades to come as financial hardship eats away at peoples happiness.  


I hope the advisers have trouble sleeping, not for peolpe like me, but the retirees.


----------



## Julia (10 January 2009)

Myusernam, thanks for describing your experience.  The sad irony in your situation is that - had you had the initial confidence to get into a small level of margin lending on your own - you undoubtedly would have been better off.
All the best for a recovery.  As you say, much tougher for the retirees.


----------



## chrisgee (11 January 2009)

myusernam said:


> There's been a bit of talk about the psychology of going with storm so I thought I'd explain how I found myself with them...
> 
> I first went to storm and did the education seminars around the time of semptember 11.  I was actually in there a day or two after and can remember them running around madly organising clients to throw their money into the market.  I then moved away, bought a second house (did really well!).
> 
> ...




Thanks for sharing this story, In my previous post I talked about my friends who "retired" and now face trying to "buy' their house back in their late 50's.
I just spent the last few days travelling to see them and trying to help and settle them down regarding all the "money" they have lost.

Looks like their debts are bigger than they first told me. They have refused to seek any independant advice and believe that the problems are caused by Comm Bank/Colonial & the Market and not by Storm and that Storm have said it was caused by a "Black Swan" market event.....What ever that is...  Maybe it should be called a "Brown Swan" event because that's the color everything is turning :fan  They seem to believe that when Storm win their case against the Comm Bank all will be fixed up.

I recommended that they seek independant advice, I have no idea how they will get out of this. Maybe they know something I don't.

To me their belief in Storm is almost religious :fish:, now I'm starting to see why things started to go wobbly.

chris


----------



## Solly (11 January 2009)

Garpal Gumnut said:


> There is a retraction of sorts by Storm in today's Townsville Bulletin of comments made about the initial Storm spin on litigation proceedings between it (Storm ) and CBA-Colonial.
> 
> gg





gg is there a noticable vibe in Townsville that there are significant issues that are caused by the Storm crisis?
Are many people really impacted ? Are businesses in trouble..etc ?

Me being so far away from this, it's just a "Storm" in a tea cup in my neck of the woods.....


----------



## Garpal Gumnut (11 January 2009)

Solly said:


> gg is there a noticable vibe in Townsville that there are significant issues that are caused by the Storm crisis?
> Are many people really impacted ? Are businesses in trouble..etc ?
> 
> Me being so far away from this, it's just a "Storm" in a tea cup in my neck of the woods.....




To my knowledge there are 4 different groups affected by Storm in Townsville.

1. People like myusernam who are young and working and have lost a lot, in secure jobs eg Public Service/ Army, who will recover.

2. Retirees, near retirees who have lost a lot and won't recover. They will have to sell their homes and live on a pension in rented accomodation.

3. A large number of folk from 1 and 2 who have lost a moderate amount e.g. $40-80,000 whom it won't affect.

4. The very rich, major business people in the region, farmers and "identities" about the area who are geared up to their gills. They will lose the lot, farms, businesses, reputations.

They reckon it will have the same effect on the region as if all tourism stopped for 12 months.

Sorry I cannot be more specific.

gg


----------



## Julia (11 January 2009)

chrisgee said:


> I recommended that they seek independant advice, I have no idea how they will get out of this. Maybe they know something I don't.
> 
> To me their belief in Storm is almost religious :fish:, now I'm starting to see why things started to go wobbly.
> 
> chris



Chris, you've done everything you can.  Sometimes you can't save people from themselves.



Garpal Gumnut said:


> To my knowledge there are 4 different groups affected by Storm in Townsville.
> 
> 1. People like myusernam who are young and working and have lost a lot, in secure jobs eg Public Service/ Army, who will recover.
> 
> ...



I hadn't realised Storm's tentacles had spread so far.  Awful.


----------



## Gerkin (11 January 2009)

Garpal Gumnut said:


> To my knowledge there are 4 different groups affected by Storm in Townsville.
> 
> 1. People like myusernam who are young and working and have lost a lot, in secure jobs eg Public Service/ Army, who will recover.
> 
> ...





GG, from reading your posts you seem pretty knowledgable. What do you think will happen to the property market in Townsville, And have you seen any properties come onto the market yet from this storm fallout?


----------



## mrfmad (11 January 2009)

I am also a storm financial client & agree with above comments.
You all must be idiots to believe in your advisers, media etc etc.
If i had a shop that sold milk, why would i send my customers down the road to buy milk off someone else. So the only person to promote storm would be clients & themselves dont you think. 
Storm Clients Pay for their own holidays which is another quoted error. 
You people are so ill informed that i will not be taking any of your stock pick advice seriously as i now know you believe in unfounded gossip, & chineese whispers that grow & GROW until this sort of **** is written. 
Oh yes & only Townsville clients are going through the **** not everyone else. Oh that was another untrue statement by this forum that its soon to be more (redcliff) it was only people with Colonial loan(Commonwealth) which are in Townsville. 
But you all kow so much. Infact every statement on here is wrong a lie or miss informed.
I just cant believe how you get on these forums & know so little but sprout you know all the facts. 
Be carefull people on this forum getting advice from these blokes that know everything about nothing.

I am a very happy Storm client & would like to say thank you to Storm for being up front and honest with everyone (clients only) We are all having a hard time with the sub prime & i also hope that this year bring all of us at Storm a great year.


----------



## Garpal Gumnut (11 January 2009)

Gerkin said:


> GG, from reading your posts you seem pretty knowledgable. What do you think will happen to the property market in Townsville, And have you seen any properties come onto the market yet from this storm fallout?




So far it has made not a huge difference to the property market. No increase in auctions or forced sales at the top end. They will come later towards the end of the financial year.

A new Batallion is being posted in to Townsville later this year.

The mines are starting to lay off people.

So there are good and bad things elsewhere apart from Storm.

I'm not an expert on property ( or anything really I can hear some say  lol ) but from what I hear a $400,000 sale would be about $20,000 cheaper now than in September, which is unusual as they usually go up in price in January with all the changeovers in Army/Public Service etc. 

So property is probably 5-10% down on 4 months ago from what I hear. 

gg


----------



## mrfmad (11 January 2009)

*Re: Ignorance*



Solly said:


> Why are there so many facing margin calls, losing houses and ruin?
> Are you saying it's all Colonial's fault?
> 
> My Financial Adviser isn't making headlines in the media......
> ...




Storm has 13500 clients with only 200 affected.
Not a bad % in this sub prime mess dont you think? Which is quoted from the Asic website and they still have found no problems with storms model. 
You guys realy have no idea do you?
Its called fear of the unknown & you dont know nothing about Storm do you?


----------



## Garpal Gumnut (11 January 2009)

*Re: Ignorance*



mrfmad said:


> Storm has 13500 clients with only 200 affected.
> Not a bad % in this sub prime mess dont you think? Which is quoted from the Asic website and they still have found no problems with storms model.
> You guys realy have no idea do you?
> Its called fear of the unknown & you dont know nothing about Storm do you?




Tell us more mate, I'm just going on what I hear and the fear of folk who have money tied up.

Are they still taking clients on?

Is it business as usual.

In broad terms how is your portfolio now allocated with Storm?

gg


----------



## robots (11 January 2009)

hello,

spot on mrfmad,

people read a few blogs and they are a professor on Storm, property, sub-prime, investment banking etc etc yet still pulling money box incomes

thankyou
robots


----------



## Garpal Gumnut (11 January 2009)

robots said:


> hello,
> 
> spot on mrfmad,
> 
> ...




At least we know what we are now robots.

gg


----------



## Gerkin (11 January 2009)

*Re: Ignorance*



mrfmad said:


> Storm has 13500 clients with only 200 affected.
> Not a bad % in this sub prime mess dont you think? Which is quoted from the Asic website and they still have found no problems with storms model.
> You guys realy have no idea do you?
> Its called fear of the unknown & you dont know nothing about Storm do you?




Were you a client who was heavily geared?


----------



## -Bevo- (11 January 2009)

Asic website says 300 affected who owe more than the value of their portfolios,
I wonder how many not listed in those 300 the other 13200 clients who may have lost a significant amount or have close to zero left?


----------



## robots (11 January 2009)

hello,

and those who are close to zero with BNB, MFS, Allco, numerous listed trusts, and the other 1000's of three letter codes past or present from the ASX

its all a circus

thankyou
robots


----------



## cuttlefish (11 January 2009)

The Storm model was hardly unique - it was pretty much the gospel over the past 10 years to use home equity loans to make further investments - be it investment properties or equities.  Then for those investing in equities, margin loans were pushed heavily as well.   

There are now plenty of people in the same situation as Storm clients - many will have gotten themselves there without any help from financial advisers, others will have gotten there with help from financial advisers.

I feel sorry for the Storm clients but I feel sorry for anyone that has naively over geared against the 'family home' and now faces losing said home - regardless of age - though it is clearly a much tougher situation for those near/at retirement age - its a terrible thing to face.

My main point is Storm clients are hardly alone here - this pattern is playing out across Australia and the world at the moment regardless of whether people were Storm clients or not. This aggressive, debt driven chasing of wealth is exactly what has led to the crisis the world is now facing.   

Anyone borrowing against their family home to invest was knowingly taking on risk.  Because it was so prolific it is easy to see that people became apathetic about the risks but thats a big step from being unaware there were risks.  I find it hard to believe anyone borrowing against their home to make investments wasn't aware there was risk involved in that sort of strategy.

I'm surprised that Storm didn't protect themselves and their clients with derivatives.  The relatively small cost of out of the money put options over the indexes would probably have saved them a lot of bother.

If Storm heavily pushed the aggressive, leveraged strategy to people who were at or near retirement age, without warning them clearly of the risks of such a model, that was irresponsible.  They should have been tailoring to their clients age, financial situation and appetite for risk.  But it doesn't sound like all Storm clients were using this aggressive model though - so  I don't know where or what the truth of the matter is.


----------



## cutz (11 January 2009)

robots said:


> hello,
> 
> and those who are close to zero with BNB, MFS, Allco, numerous listed trusts, and the other 1000's of three letter codes past or present from the ASX
> 
> ...




That’s the beauty of a properly diversified, minimally geared stock portfolio, a couple of stocks can take a hit and it doesn’t really matter in the big scheme of things, you just write those off at the end of the year and move on, can’t really do that with a property portfolio geared to max.


----------



## Sean K (11 January 2009)

mrfmad said:


> I am also a storm financial client & agree with above comments.
> You all must be idiots to believe in your advisers, media etc etc.
> If i had a shop that sold milk, why would i send my customers down the road to buy milk off someone else. So the only person to promote storm would be clients & themselves dont you think.
> Storm Clients Pay for their own holidays which is another quoted error.
> ...



A very happy Storm client.

Nice.


----------



## Solly (11 January 2009)

*Re: Ignorance and seeking knowledge*



mrfmad said:


> Storm has 13500 clients with only 200 affected.
> Not a bad % in this sub prime mess dont you think? Which is quoted from the Asic website and they still have found no problems with storms model.
> You guys realy have no idea do you?
> Its called fear of the unknown & you dont know nothing about Storm do you?




You are correct I don't know anything first hand about Storm but I'm eager to know more. 

I only know what I have read in the media & forums, watched on the 7:30 Report and by reading the decision of Justice Greenwood regading the dismissal of the interlocutory application.

I am curious to know why are there , as you state, "200 clients affected" ?  To me it would be a red flag if *one *client was affected if it was the result of following the advice of a financial services company.

As for ASIC not finding any problems with Storm, I can only find a statement from ASIC from 24 Dec 08 which indicates investigations are continuing and a further statement will be made in the New Year.

You mention 'Storm's Model', as I am eager to ensure that I'm not mislead or follow false understandings, can you advise and elaborate what this model actually is?


----------



## Macquack (11 January 2009)

cuttlefish said:


> They should have been tailoring to their clients age, financial situation and appetite for risk.




Yeah, but there is no money (fees) in it for Storm.

Keep pumping up those portfolio's boys.

Anybody knows that a tyre with a recommended maximum pressure of 10 psi can take at least 90 psi before it blows.


----------



## Solly (11 January 2009)

kennas said:


> A very happy Storm client.
> 
> Nice.




Maybe more happy Storm clients could post here to add balance...:70:


----------



## mrfmad (11 January 2009)

cuttlefish said:


> The Storm model was hardly unique - it was pretty much the gospel over the past 10 years to use home equity loans to make further investments - be it investment properties or equities.  Then for those investing in equities, margin loans were pushed heavily as well.
> 
> There are now plenty of people in the same situation as Storm clients - many will have gotten themselves there without any help from financial advisers, others will have gotten there with help from financial advisers.
> 
> ...




Now This guy is talking common sense. I couldn't agree with the above more.
Dont forget that Storm may not have factored in the stock market crash of this extreme but did you? 
So for 30 years they have served their clients well.
I am possitive this market crash will certainly be factored into new clients plans & Yes as far as i know it's business as usual at Storm.


----------



## mrfmad (11 January 2009)

robots said:


> hello,
> 
> spot on mrfmad,
> 
> ...




Thanks robots


----------



## Judd (11 January 2009)

I don't know much about anything much but even at my most erratic the one thing I did avoid was putting the roof over my family's head at risk.  You can argue all you like about optimising your balance sheet but, in my view, to put your residence on the line is sheer stupidity.

When we owned rental property, the banks held each property or other rental property (100% owned) as security.  Just needed to put that fence between an investment going wrong (none did) and our home.  None of this line of credit or equity loans rubbish.  Just a rort by financial institutions to con the foolish in to spending more than they can afford.

Same with the margin loan - and we have so much in the way of capital losses I doubt whether we can use them all in our lifetime - the only saving grace was that there was sufficient security outside of the margin loan to pay it out once I decided to ensure everything went pear shaped.

Argue on.


----------



## mrfmad (11 January 2009)

I dont think anyone is trying to argue. 
Just putting a different light on it other than only downramping it with 
DOOM & GLOOM


----------



## Julia (11 January 2009)

Judd said:


> Same with the margin loan - and we have so much in the way of capital losses I doubt whether we can use them all in our lifetime - the only saving grace was that there was sufficient security outside of the margin loan to pay it out once I decided to ensure everything went pear shaped.
> 
> Argue on.




Judd, sorry if I'm being dense, but I'm a bit confused about your last bit:
"once I decided to ensure everything went pear shaped".


----------



## Julia (11 January 2009)

mrfmad said:


> Dont forget that Storm may not have factored in the stock market crash of this extreme but did you?



The market didn't suddenly drop 45%  overnight.   There were plenty of warnings about what was happening, not the least of which was simply the falling market.  Surely professional financial advisers should have, in these circumstances, advised their clients in such a way as to protect their capital, and in particular for those who were leveraged.



> I am possitive this market crash will certainly be factored into new clients plans



That's nice.  Not too warm a comfort for those who have been wiped out.

May I ask you a general question?  Not specifically relating to Storm but just the general principle.   Would you like to see some legislation introduced which would mandate a level of accountability on the part of financial advisers for the advice they give?

Or do you think clients should share in the responsibility of what happens to their investments, and be sufficiently financially literate to ensure they have the capacity to do this?


----------



## Judd (11 January 2009)

Julia said:


> Judd, sorry if I'm being dense, but I'm a bit confused about your last bit:
> "once I decided to ensure everything went pear shaped".




um, a certain medical condition tended to exacerbate my moments of irrational exuberance which lead to very foolish - and expensive - trading.


All under control now; I've found an illegal source of suitable drugs (just kidding there.)


----------



## Julia (11 January 2009)

Judd said:


> um, a certain medical condition tended to exacerbate my moments of irrational exuberance which lead to very foolish - and expensive - trading.
> 
> 
> All under control now; I've found an illegal source of suitable drugs (just kidding there.)



OK, sorry for asking, didn't mean to pry.  Glad all is OK now.


----------



## Smiley (12 January 2009)

I was a Storm client and know 100s of clients all over the country.  
Do  not believe all you read in the papers but you will see them folding this week and that will be true!
I am not happy that all the clients I know had/have huge margin loans in addition to a loan 80% usually on the house value.  It is not just a few hundred but thousands.
There are two class actions against them already started.
Townsville Bulletin is advertisting lots of Storm client houses on or near Castle Hill for sale and a real estate agent told me 1000s of houses of Storm clients will be in the market now or soon.
Their model was doomed- see this interesting article:
http://www.acleardirection.com.au/storm_s_doomed_model___eureka_report_article
They have been in business only 14 years and not more - they had to admit it in the court documents with Cwth.
People went to them for financial advice and were sold a pack of lies.  
All were told not to get out of the market as their money was safe.  Those who tried to get out and did had a mighty battle to do so.  I know from experience.


----------



## Glen48 (12 January 2009)

No money is safe unless you have it in your wallet or under the bed and check it every few hours.


----------



## Smiley (12 January 2009)

do not invest what you are not willing to lose

those of us who have been stormified have learnt this lesson the hard way


----------



## Solly (12 January 2009)

Under a company search on the ASIC site it says that Storm Financial Ltd is - Under External Administration and/or Controller appointed.

Does anybody have any further info or updates ?


----------



## Jifromoz (12 January 2009)

in the Townsville Bulletin today

Storm in hands of administrators 


January 12th, 2009 

STORM Financial has been forced into voluntary administration. 

The embattled financial planning firm has been placed in the hands of Brisbane-based Worrells Solvency and Financial Accountants.

In a statement, Storm Financial joint Managing Director Emmanuel Cassimatis said Storm had no choice but to enter voluntary administration following an `aggressive’ demand from the Commonwealth Bank over margin loans.

``This is obviously a deeply distressing event and both Julie and myself are devastated,’’ he said.

``We will now be working with the administrators to formulate a proposal to assist clients in the future.’’


----------



## Aussiejeff (12 January 2009)

kennas said:


> A very happy Storm client.
> 
> Nice.




So, as of today, Storm Financial is in administration & the hands of the receivers.
The lies, damned lies will now be outed.

Maybe very happy Storm clients will now become not so happy... not so nice.

Shame, Storm... SHAME. :angry:


----------



## CoffeeKing (12 January 2009)

Jifromoz said:


> in the Townsville Bulletin today
> 
> Storm in hands of administrators
> 
> ...




1. "Didn't see it coming" eh

2.  What future clients???


----------



## Monario (12 January 2009)

Love it..... Just Keeps getting better...

Storm, you make me laugh, you managed my portfolio into the ground, pointed the finger at me, even after I asked to sell, before *All *equity was totaly lost. And left me out to dry...

Now it would appear obvious that Storm Financial, are not only unable to provide adequate advice or management to clients, but cannot even manage their own finances..

Finacial Advisors My Ar*e......

A happy storm client...:


----------



## cuttlefish (12 January 2009)

Smiley said:


> I was a Storm client and know 100s of clients all over the country.
> Do  not believe all you read in the papers but you will see them folding this week and that will be true!
> I am not happy that all the clients I know had/have huge margin loans in addition to a loan 80% usually on the house value.  It is not just a few hundred but thousands.
> There are two class actions against them already started.
> ...





Cheers for the comments Smiley - interesting to hear from someone's first hand experience.  

There seems to be a common theme of people trying to either get information about their margin position and not being given it, or trying to close out their position but not being able to do so.


Do you mean thousands of houses across Australia, or thousands in Townsville?  If thats in Townsville alone, thats a LOT of houses for a relatively small property market.


----------



## Nick Radge (12 January 2009)

Apparently there is a report on ABC 's 7.30 Report tonight on it all.


----------



## Smiley (12 January 2009)

Well the lawyers are now wondering if Storm has financial planning insurance and enough to cover claims so that clients are not left totally destitute.
I meant across Oz there would be many houses for sale not a thousand in Townsville.
I will not lose my home but have a mortgage and margin loan I could do without.
All this I can service but many of my friends/acquaintances owe the banks hundreds of thousands and will lose their homes.
I do not know how Storm is going to help clients if they won't talk to them.
They have advertised that there are support groups for Storm clients but I do not know anyone in one, unless they are talking about my friends who are supporting each other as they go to Slater and Gordon or Connolly and Suthers (litigation lawyers).


----------



## Monario (12 January 2009)

I wonder what the numbers trully are, asic say only 200.... I know personally of 10 people/families affected, friends of mine, and have read about 20 articles of others, surely that must mean the numbers out there we dont know about must be much more..

I mean, if its just these people, bugger me we must have been an unlucky group of friends....

Would anyone be interested in starting a list? no need for names, just initials... I am sure the law firms would be interested to get more accurate numbers...


----------



## Solly (12 January 2009)

I had a feeling it would all come to this....
It's now a little clearer...

On 31 Dec CBA issued a notice on Storm for full repayment of its corporate debt.

On Jan 9 Storm appointed Worrells Solvency & Forensic Accountants as administrator.

Storm will now work with the administrators to formulate a proposal to assist clients in the future.

CBA is committed to work with the administrator. 

:horse:


----------



## Julia (12 January 2009)

Nick Radge said:


> Apparently there is a report on ABC 's 7.30 Report tonight on it all.



Nothing tonight, Nick.  Perhaps tomorrow.
It would be good to see an interview with Storm's principals.


----------



## Julia (12 January 2009)

Solly said:


> I had a feeling it would all come to this....
> It's now a little clearer...
> 
> On 31 Dec CBA issued a notice on Storm for full repayment of its corporate debt.
> ...



I've had past experience with Worrells.  If there's any money left, their drawn out investigations and huge charges will soon eat it up.   If you're involved, prepare to wait for years for an outcome.


----------



## Garpal Gumnut (12 January 2009)

Monario said:


> I wonder what the numbers trully are, asic say only 200.... I know personally of 10 people/families affected, friends of mine, and have read about 20 articles of others, surely that must mean the numbers out there we dont know about must be much more..
> 
> I mean, if its just these people, bugger me we must have been an unlucky group of friends....
> 
> Would anyone be interested in starting a list? no need for names, just initials... I am sure the law firms would be interested to get more accurate numbers...




Shame mate, makes many people shy away from outing themselves when they've been taken to the cleaners.

Everyone in Townsville knows many who have been burnt.

It can't be just 200, I can guarantee.

Again I say.

Before the next one occurs.

*If you find 

Fountains in the Lobby

Gold in the Loo.

Then run as fast as you can away.*

gg


----------



## -Bevo- (12 January 2009)

Monario said:


> I wonder what the numbers trully are, asic say only 200.... I know personally of 10 people/families affected, friends of mine, and have read about 20 articles of others, surely that must mean the numbers out there we dont know about must be much more..
> 
> I mean, if its just these people, bugger me we must have been an unlucky group of friends....
> 
> Would anyone be interested in starting a list? no need for names, just initials... I am sure the law firms would be interested to get more accurate numbers...




I think that number 200 (ASIC website said 300 last time I looked) only relates to the people who still have margin owing, I suspect there's probably many more who have taken significant loss or who have accounts with close to zero left.


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## BL82 (12 January 2009)

-Bevo- said:


> I think that number 200 (ASIC website said 300 last time I looked) only relates to the people who still have margin owing, I suspect there's probably many more who have taken significant loss or who have accounts with close to zero left.




I have a feeling the number is a lot higher than both those estimates, *every* person i've heard of in storm has been left with a huge margin loan against their house which in some cases had been paid off for years.

A lot of customers got to know each other on the annual holidays(which was 100% paid for by the investors, not storm), so you can imagine the emails flying around between customers now... it really is heartbreaking stuff


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## Temjin (12 January 2009)

Sorry, but I'm not sure if anybody mentioned this yet.



> *Whatever it is, for many people it hasn't worked. Why did it fail?
> 
> *Very simple. The Australian sharemarket encountered a *black swan event. *




OMFG!!! Such an easy way out! Black swan event! Oh yeah, as if they never expected one. Since they mentioned the term "black swan", they would have read and understood Nassim's teachings. But they still fail to protect themselves from such "black swan" events by maximising leverage and worked on the assumption that the stock market will not face a 40-50%+ drop. 

Epic failure..


----------



## Monario (13 January 2009)

Garpal Gumnut said:


> Shame mate, makes many people shy away from outing themselves when they've been taken to the cleaners.
> 
> Everyone in Townsville knows many who have been burnt.
> 
> ...





I drove past the Cassimatis estate in brisbane a short while ago... Painted on the lawn was a huge piece of the male anatomy sprouting dollar signs out of it, there were also the typical LARGE Mediterranean statue type fountains that appeared to be pissing gold? I dont know why I never took the hint...

I may or may not have dreamt this..... Hmmmm


----------



## Monario (13 January 2009)

I heard there are a few advisors from storm looking for work... As it appears the cassimatis's have a cork in it, I would be more then happy to be a reference for any of you looking for work...


----------



## chrisgee (13 January 2009)

What I want to know is how come there were not processes in place to stop the carnage that developed. 

I'm not impacted but seeing what my friends are going through is truely heart breaking. I don't give a flying fark about 'black swans', finger pointing between Storm & CBA, the end result I see is two of my friends who are just ordinary people who put their complete trust in a mob that they thought would give them a comfortable retirement. They don't want a flashy house, cars, overseas hols etc.


To me as an outsider, no matter what anybody says my friends where involved with a mob who could not give them the timely, correct advice to stop them from becoming financially wrecked when the market conditions turned.

Put it simply the strategy they were given was flawed.
Their mistake was to have an blind, undenying belief in this mob.

Is there any possibility of them getting anything back ?
I believe they have a snowflakes chance in hell.

The whole thing makes me feel sick....


----------



## Smiley (13 January 2009)

Everyone I know in Storm has margin loans - this was their whole approach! 

Take out an 80% mortgage on your house and keep having the house revalued over the years to take out more equity.  Then get a margin loan which you increase a few times a year.  

Thousands of their clients are in this situation.  So typically, a person on a medium income or retired would have a mortgage on the family home - e.g. $320,000 on a home valued at $400,000 and then another million+ margin loan.  

If someone could not pay the 9.19% interest on that margin loan they were encouraged not to use equity from the market but to borrow more from the margin lender.  So there would be an additonal loan of $90,000 on that million dollar margin loan at the end of June - interest paid ahead for the financial year.

Cassimatis called this a conservative approach in the mewspapers last week.

They especially liked retirees or those nearing retirment - could extract their super funds.  They had clients put all of their super payout into the market.

For many people who have worked all their lives, this is a sad position.  So now many Storm clients (even one couple I know who have been with Emmanuel over 20 years) have applied for the aged pension as they have literally nothing (except a mortgage on their home).


----------



## Judd (13 January 2009)

chrisgee said:


> What I want to know is how come there were not processes in place to stop the carnage that developed.




This is the same question asked when things go down the toilet:  Westpoint, Fincorp, ACR, City Pacific.

I've heard that people in Geelong, Victoria are affected by Storm Financial - and that town has already had its own fiasco with a home grown promoter.   It has probably hit people in Rockhampton and various other places.

Every single downturn brings out this stuff.  Credit Corporation in the 1960's, Estate Mortgage, Pyramid Building Society (Hello Geelong - what is it with that place?), Adsteam, Bond Corp, Qunitex, Babcock and Brown, Allco, Centro,

And what do have each and every one of these things have in common.  Debt, debt and more debt a a lot of the time debt associated with property.

So in answer to your question, sadly, there is no answer as the matter relies on honesty and integrity.

And in the next boom, whenever that will be, history will be forgotten and the same thing will happen over again.

I've lost cold hard cash and it hurts but these poor blighters ..........  destitution.  Makes me sick to think that any person could encourage retirees to take such a high risk strategy.  Where were the industry representatives to try and control this?  Oh, I know, they wear the same clothing as the RE industry - only in it for their members and not the clients who are only there for extraction of their money.


----------



## sqwark7600 (13 January 2009)

According to InvestorDaily ASIC's investigation found about 3,000 of Storm's clients had entered into a margin loan for market-linked investments and over 450 clients owed their margin lender more than the value of their portfolios, equating to about $30 million.

See: http://www.investordaily.com.au/5550.htm?utm_source=newsletter&utm_medium=email

Storm are now reported to be in voluntary liquidation which indicates their business plan went down with their customers. Next come the employee and creditor actions.
A class action now has the benefit of a third party (the administrators) being in charge of Storm's books. I doubt whether there are any residual funds but there will certainly be heaps of information on the structure of the operation. Also there are a few of big names involved in this tragedy. If I am not mistaken they will already have made provisions if there is a hint of regulatory misconduct in the connection. So there is a liklihood of recovery of funds if the Storm operation was legally flawed, the class action is not fragmented and the legal team is any good. 
My opinion; your call.
:1zhelp:


----------



## cuttlefish (13 January 2009)

chrisgee said:


> What I want to know is how come there were not processes in place to stop the carnage that developed.
> 
> I'm not impacted but seeing what my friends are going through is truely heart breaking. I don't give a flying fark about 'black swans', finger pointing between Storm & CBA, the end result I see is two of my friends who are just ordinary people who put their complete trust in a mob that they thought would give them a comfortable retirement. They don't want a flashy house, cars, overseas hols etc.
> 
> ...





What I want to know is how someone can get to retirement age, and have witnessed numerous downturns, corporate collapses and other such stuff over the course of their lives, and STILL decide its a good idea to borrow against their home and put their money in complete and total trust with someone and not think its risky.

Borrowing against a home to buy assets is risky.  They knowingly took this risk.   

Its a terrible situation to be in but people need to take some responsibility for themselves being in this situation. 

Unless you are telling me that Storm clients were unaware they'd mortgaged/borrowed against their home and were unaware they had margin loans.

I'm not defending Storm - there are quite a few things mentioned on here that raise big questions about how they have acted in this - and in particular if there are people that gave instructions that were ignored, or requested information that was withheld, or erroneous or fraudulent information was given, I hope they manage to get recompensed via the courts and insurance process.

But you'd have to have been born yesterday to not have been aware there were significant risks in these strategies and that there is significant risk in handing every cent you've earnt and can borrow to one individual/institution to manage in complete trust.  So in my view the entire blame can't be placed on Storm - as terrible as the situation is for the people that are in it.


----------



## sails (13 January 2009)

cuttlefish said:


> What I want to know is how someone can get to retirement age, and have witnessed numerous downturns, corporate collapses and other such stuff over the course of their lives, and STILL decide its a good idea to borrow against their home and put their money in complete and total trust with someone and not think its risky.....




IMO, it usually comes down to slick, seductive style marketing.  People want to believe they can have a wealthy retirement especially if the risks are being glossed over.

Our last visit (complimentary initial appointment!) to a financial advisor was  just that - baiting while glossing over the risks.  I pointed out that the Oz market was at extremely high price levels - at which she prompltly rolled out her XAO chart to demonstrate that, while markets will correct, they always go back up again.  Thankfully, we declined...

If we had taken up her investment strategy (was supposed to double in 7 years), I doubt we would still have our home by now.  But with some 11 years in the stockmarket it was easy to refuse the offer.  However, it is highly likely there are some who really have no idea about financial matters and thought they were paying for expert advice.  

Some should have known better, however, if it was highly skilled marketing at work by apparently trust worthy people with a good track record, it was probably hard to resist...


----------



## Julia (13 January 2009)

cuttlefish said:


> What I want to know is how someone can get to retirement age, and have witnessed numerous downturns, corporate collapses and other such stuff over the course of their lives, and STILL decide its a good idea to borrow against their home and put their money in complete and total trust with someone and not think its risky.
> 
> Borrowing against a home to buy assets is risky.  They knowingly took this risk.
> 
> Its a terrible situation to be in but people need to take some responsibility for themselves being in this situation.



I have to agree.



> Unless you are telling me that Storm clients were unaware they'd mortgaged/borrowed against their home and were unaware they had margin loans.



Could that be possible?  Wouldn't the clients have to be issued with all the financial documentation, sign documents showing amounts involved etc?
I've never had a margin loan so don't know what's involved.


----------



## Stormin_Norman (13 January 2009)

they would have been advised in those documents to seek solicitor's advice, and may very well have been required to do so.


----------



## Smiley (13 January 2009)

Good points - but Storm was very slick.  They adamantly claimed the approach was safe and glossed over the risks.  Clients were told over and over that the investment was safe as they had factored in for all falls, margins were reasonable. I know from personal experience clents were also told that if the market fell their equity would be used to cover mortgages and Storm would not let them end up with any major losses.  

Now it all seems very obvious but to people wanting someone to help them improve their financial position and who were naive about the stock market, it was easy to be fooled by their repeated statements of "trust us" as we have been doing this for 35 years (actually much less - 14 years). Supposedly there are support groups of Storm clients who are still behind them.  Awhile ago someone commented about the Storm religious/cultish zeal and adamant statements of faith that have fooled many and I have seen it with my own eyes.


----------



## -Bevo- (13 January 2009)

Remember "The greatest risk is not to do anything" its actually posted on their website, and was a common theme for there TV ads.


----------



## awg (13 January 2009)

Julia said:


> I have to agree.
> 
> 
> Could that be possible?  Wouldn't the clients have to be issued with all the financial documentation, sign documents showing amounts involved etc?
> I've never had a margin loan so don't know what's involved.





No-one has said yet if the margin was managed by Storm. ( in pooled funds)

It seems to me 99% certain it must have been

so you would just have read a Storm PDS and signed on the dotted line.

Seems certain to me that when the **** really hit the fan XAO wise in NOV-DEC, the principles of Storm dropped the ball completely.

However if you read the supposed letter sent by Storm to their customers on 8/10/08, quoted back about post#100, then they have legally covered themselves. ( It advised them to review their position re Margin)


----------



## Ijustnewit (13 January 2009)

Monario said:


> I wonder what the numbers trully are, asic say only 200.... I know personally of 10 people/families affected, friends of mine, and have read about 20 articles of others, surely that must mean the numbers out there we dont know about must be much more..
> 
> I mean, if its just these people, bugger me we must have been an unlucky group of friends....
> 
> Would anyone be interested in starting a list? no need for names, just initials... I am sure the law firms would be interested to get more accurate numbers...




Great idea !! We are another Storm victim that has lost our life savings after being told the same stories everyone else is posting ... The "WE HAVE BEEN DOING THIS 30 YEARS !YOU CAN'T LOOSE ALL YOUR MONEY ONLY MAKE MONEY SEMINARS" The glossing over of all risks when questioned time after time and being told that we couldn't get out earlier and it was the wrong thing to do and just go away and don't worry it will be allright. Paying through the nose at every step for the fees and advice . Just for those very advisors just to sit on their hands and watch it all go down the shute. As said, we were in constant communication with this lot asking to be moved to safer ground at every drop in the market and the answer was alway "NO!NO!!NO!!! YOU CAN"T LOOSE YOUR MONEY IF THAT HAPPENED THE WHOLE WORLDS STOCK MARKETS WOULD HAVE TO DISAPEAR ect ect"""We'll, were bust and the markets are still there. I hope they locke'm up


----------



## basilio (13 January 2009)

Smiley said:


> Good points - but Storm was very slick.  They adamantly claimed the approach was safe and glossed over the risks.  Clients were told over and over that the investment was safe as they had factored in for all falls, margins were reasonable. I know from personal experience clents were also told that if the market fell their equity would be used to cover mortgages and Storm would not let them end up with any major losses.
> 
> Now it all seems very obvious but to people wanting someone to help them improve their financial position and who were naive about the stock market, it was easy to be fooled by their repeated statements of "trust us" as we have been doing this for 35 years (actually much less - 14 years). Supposedly there are support groups of Storm clients who are still behind them.  Awhile ago someone commented about the Storm religious/cultish zeal and adamant statements of faith that have fooled many and I have seen it with my own eyes.





> Remember "The greatest risk is not to do anything" its actually posted on their website, and was a common theme for there TV ads.




The name of the game in the past 10 years has always been borrowing to build equity. Whether it was buying property (it never goes down...) shares ( the stock market always goes up in the longer term ) or just lifestyle ( get it now). 

If enough people are convinced to borrow and "invest" then shares and property will increase - and richly reward the bankers,financial advisors, real estate agents and spiel merchants. In fact there doesn't have to be a real  product market or property market in existence as long as  enough people are convinced to feed the system. Just ask Madoff.

*But it is almost always a bubble*. And when it is pricked the most tangible item left is physically real assets that are practically useful (ie live in them, eat them, get energy from them). And of course a mountain of debts.

Storm is just one of the more "successful"  operations that convinced people  of the certainty of continually rising stock prices and their own credibility. And there are many others.....

Judging by the amount of personal, national and international debt, I fear this bust has a long way to go.


----------



## Monario (13 January 2009)

basilio said:


> Judging by the amount of personal, national and international debt, I fear this bust has a long way to go.




Could not agree more basilio, we are still living well compared to the rest of the world... But it is about to come crumbling down, people who lost their jobs leading up to christmas will be coming to the end of saving by feb. march. People are still losing jobs, so there is simply no work out there..

I know of close to 500 jobs in the engineering consulting game that have vaporised since mid november in brisbane CBD alone, and these jobs were all highly paid positions 175K plus... it wont be long before this trickles down


----------



## Jifromoz (13 January 2009)

*Re: Ignorance*



mrfmad said:


> Storm has 13500 clients with only 200 affected.
> Not a bad % in this sub prime mess dont you think? Which is quoted from the Asic website and they still have found no problems with storms model.
> You guys realy have no idea do you?
> Its called fear of the unknown & you dont know nothing about Storm do you?





Mrfmad, you have been quite for a couple of days. Not so happy with Storm now???
The number of affected would be virtually ALL customers that have been stormified. My In-Laws were what I would call unsophisticated investors. They were told by Storm up until mid December that everything was fine.  They were always told that they were in a low risk product as that is what they asked for. Then on the 19/12  they came to me with all of their paperwork and asked my opinion (I’m not an FP but am involved in the Finance industry). A $1.1M Margin Loan debt and $1.1M in a CMT. Offset each other and now red but what isn't discussed by some people (Mrfmad included) is that Storm has also arranged for people’s houses to be mortgaged and they still have this debt ($250K) and no income. I can assist my In laws but what about those that are either too embarrassed or don't have someone to help. I feel for them as well. I have done the following to date :

1) Paid out the margin loan (8.5% on margin loan & earning 4% on CMT, didn't take a brain surgeon to work it out - My apologies to brain surgeons) It did take two weeks for them to do it. Asked them to backdate interest and if not then will go to Ombudsman.
2) Organised with CES for Pensions.
3) Sent complaint to ASIC
4) Spoke to the bank involved - not very helpful initially. see later
5) Scanned all of their documentation and burnt to disc ready for whoever needs it (Solicitors, ASIC etc)
6)Spoke to a representative of Storm. Little help and no advice or assistance. Did say that I was very proactive and was doing the right thing.
7) Spoke to Financial Ombudsman Service who said that as amount was above their limit, Storm has to agree. You now have to go via Worrels in this regard. Good luck. They also can't act if Storm are no longer a member and the liquidation may mean this is the case.
8) Spoke to both Firms of solicitors in regard to class action. One won't make a decision at this stage and the other will get back in a day or so.
9) Phoned the bank that has the mortgage and asked for a copy of the documentation signed including the application and Low Doc Declaration.
10) Emailed our Local & Federal Members seeking assistance.
11) Sent a message to FCA Asking :
           1) Do you intend taking action against all of the planners that
               recommended "Stormifying" retired customers.
           2) Now that Storm is in Administration how can affected people get
               redress/compensation
            3) What should I tell my In-Laws. They were 1st time 
                unsophisticated investors, They were left a debt of $1+M (Until I 
                got involved and had the Margin lender payout their margin loan  
                of $1+M from the $1+ M in a Cash Mgmt Trust - which by the 
                way was paying significantly less interest than what they were 
                paying on the loan) with no contact from Storm other than they 
                were working on it and promptly all went on holidays. They are 
                left with a house that has a significant mortgage and no income. 
                I would be interested in your suggestions.
             4) The majority of FP's I have spoken to recently have all stated 
                 that they knew of Storm and their practices involving retirees in 
                 particular. Surely some of this would have been leaking back to 
                 your head quarters and starting alarm bells ringing.
             5) In my opinion your association and industry has a lot to answer 
                 for in the circumstances.
12) Battle on and make sure the In-laws keep their house safe. 

A few areas I will be concentrating on will be :

a) Why hasn’t FPA done anything in the lead up to this. 
b) The use of Low Doc Loans for aged pensioners and lodged by Storm direct to the lender (No direct customer contact with the banker). 
c) The extraordinarily high Margin loan lending margins AND buffers. The docs I have seen mentioned 85% with 10% buffer!!!! All is just about gone by then.
d) Will Professional Indemnity Insurance cover this and will it be sufficient?

Sorry for the length of the post everyone but it has been building for a couple of weeks now.


----------



## Glen48 (13 January 2009)

I wonder how much this will cost the taxpayer for these victims to be getting a pension for the rest of their days?

If Mr. & Mrs. storm had to put their assets on the line as some sort of security would they have been pushing the same barrow?
Why don't these schemes have to be approved under the  trades practice act to make sure every thing claimed is not over the top and is achievable.?
How soon for the next one to show up?


----------



## awg (13 January 2009)

It is likely there are some satisfied Storm customers.

They would have used this strategy from 2003-Late 08.

Then cashed out!

You would need b*lls of steel or timing, or luck, (like you wanted the money for something else)

or maybe your FP ( or someone else), advised you

I imagine it was not company policy to advise or facilitate exit

Unfortunately many individuals and companies with high leverage are at risk of deficit in the present climate


----------



## cuttlefish (13 January 2009)

*Re: Ignorance*



Jifromoz said:


> A $1.1M Margin Loan debt and $1.1M in a CMT. Offset each other and now red but what isn't discussed by some people (Mrfmad included) is that Storm has also arranged for people’s houses to be mortgaged and they still have this debt ($250K) and no income.




I'm just curious - what and who switched them from equities to cash and why?  Was it Storm reacting to market conditions, or was it the margin lender saying sell the stock now and pay down your margin?   (i.e. was the move to cash forced by the margin lender or was it part of Storms 'strategy'?).


----------



## drsmith (13 January 2009)

*Re: Ignorance*



Jifromoz said:


> A $1.1M Margin Loan debt and $1.1M in a CMT.



I can remember an investment advisor trying to flog this sort of structure back in 1991.


----------



## Duckman#72 (13 January 2009)

*Re: Ignorance*



cuttlefish said:


> I'm just curious - what and who switched them from equities to cash and why?  Was it Storm reacting to market conditions, or was it the margin lender saying sell the stock now and pay down your margin?   (i.e. was the move to cash forced by the margin lender or was it part of Storms 'strategy'?).




Hi Cuttlefish

This is part of the problem. The people I know that were involved with Storm were comfortable with the level of debt and also the concept of investing in the sharemarket. Unfortunately they were given "assurances", rather unrealistically, that they had a special arrangements with the underlying financiers (CBA and Macquarie) and the investments wouldn't be sold. 

As it turned out Storm is now saying that CBA and Macquarie reniged on the deal and sold out the investments regardless. 

Someone asked why clients didn't sell when they were in front. Three reasons. Firstly - Storm don't make money from clients holding cash!!! They wouldn't advise that (problem with a lot of financial planners). Secondly - greed. When things are going well, it is hard to sell. Thirdly, the whole basis of the Storm methodology was to NOT PAY OFF DEBT. I have been to a presentation and heard Storm planners say "Just because you retire, why should your money? Make it keep working for you."

Duckman


----------



## Smiley (13 January 2009)

*Re: Ignorance*



Jifromoz said:


> Mrfmad, you have been quite for a couple of days. Not so happy with Storm now???
> The number of affected would be virtually ALL customers that have been stormified.
> You are spot on  . . . Storm talked anyone out of leaving who tried - I wanted to get equity out to dover home mortgage and they would not do.  They steam roll you if you try.
> Thanks for the list of your actions as am doing many of the same myself.
> ...


----------



## Monario (13 January 2009)

*Re: Ignorance*



Duckman#72 said:


> Hi Cuttlefish
> 
> This is part of the problem. The people I know that were involved with Storm were comfortable with the level of debt and also the concept of investing in the sharemarket. Unfortunately they were given "assurances", rather unrealistically, that they had a special arrangements with the underlying financiers (CBA and Macquarie) and the investments wouldn't be sold.
> 
> ...




Spot on Duckman, not sure when you attended seminars but perhaps you heard such statements as, DEBT CREATES WEALTH, and, PAYING THE PRINCIPAL REDUCES YOUR CAPITAL POOL.

I am a young investor, started with storm when I was 23, now 30, and have nothing to show for all those years except a debt....

Sadly it has only been in recent years I have begun to get an understanding of when,where,how and why to invest.. I along with my parents had very little knoweldge, actually none, when I started with storm... I guess it is my fault for not knowing what I was getting into, but I was paying good money to have them manage my portfolio, as were all the others who have been stung...

The majority of people I know who were with them, were also like myself, had very little if no knowledge of investments.. 

I now feel as though I could self manage my own investments from what I have learned, sure I may not make gains as I did with storm but I certainly wont make losses like I had with them, and my fees will be minimal by comparison, I just feel sorry for the retirees, time is on my side, not so for them...


----------



## Gerkin (13 January 2009)

*Re: Ignorance*

Yes where is ASIC and the FPA - latter have just brought in a code of ethics - I think the first edict is something about the clients's interests coming first - oh yes![/QUOTE]

The FPA job is not to enforce legislation, thats the role of ASIC, APRA and FICS, Remember the Adviser and the AFLS holder Storm are resposible, ironically its also upto Storm to audit there advisers each year, no independence there.


----------



## Monario (13 January 2009)

Hey GG what is your opinion on what service a financial advisor should offer clients? And do you use an advisor?

I asked on many occasions for advice on buying a house, to which the only reply I recieved is we will not support you in that endevour, buying a house will be bad for your financial future.

I also asked about any advice on starting a business or who to talk to.

About the ways to diversify my portfolio to minimise the impact of potential falls in stocks..

The only advice I recieved was on the products they offered, should'nt a advisor give advice on all asepcts of finance?

P.S..... I bought my house, thank christ I did, I went against their advice, it was the only thing I did while invested with strom that actually worked!


----------



## Solly (13 January 2009)

Here's a story by Michael West from The Age

http://business.theage.com.au/business/legal-storm-brewing-20090113-7fv1.html

" Steve Reynolds is a war veteran on a pension, ''totally and permanently incapacitated as a result of the Vietnam War'', yet Storm Financial Group managed to provide him with a large mortgage over his home to punt on the stock market.

Before acting on Storm's advice to ''optimise'' his personal balance sheet, Reynolds owned a home in Townsville valued at $600,000, a car, some furniture and $250,000 in investments.

He took a mortgage over his home via Bank of Queensland and a margin loan via Macquarie and now he owes $420,000 to the Bank of Queensland and is likely to go on the road and live in his van......."

And...

"If there is evidence of wrongdoing on the part of Storm and its advisors then plaintiff lawyers, such as Slater & Gordon (which has interest in an action from 230 Storm clients), will endeavour to join the banks in a lawsuit as Storm's insurers will claim their contracts are void."

Read the whole story, it has scared the hell out of me .......

Many questions.... How could this ever happen? :dunno:


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## cuttlefish (13 January 2009)

From the article:

_Even more intriguing is how the Bank of Queensland could sign off on his $360,000 loan whose documentation recorded Reynolds' income as $100,000 ... etc .... 

"His credit applications, recording a false income, were handled by Storm."_


It would be interesting to see what went on here.  My view is that unless Storm committed actual fraud by signing documents for him,  Mr Reynolds is likely to have signed a statutory declaration stating that he earnt $100k a year.  

The article also states he got $800/week from a disability pension and $30k a year from a service pension, and also owned his home and $250k of other assets - which would likely have been producing additional income as well. It is more than possible he actually was earning close to $100k a year based on those figures.  But we can't know the truth of it.  

(sometimes the media just irritates me doing the heartstrings BS).


What this does show is we are starting to see the evidence of an Australian 'sub prime' type of scenario - where low doc loans were used to give equity loans to people based on questionable valuations and misleading income statements to invest in 'get rich quick' investment schemes.


But what a cr*pper for the bloke (Steve Reynolds) regardless.
_"and Townsville lined the footpaths as we marched down to the quay.
the clipping from the paper shows us young and strong and clean
and there's me in me slouch hat with me SLR and a green's ..."_


----------



## robots (13 January 2009)

hello,

i was only nineteen - the herd

thankyou
robots


----------



## cuttlefish (13 January 2009)

robots said:


> hello,
> 
> i was only nineteen - the herd
> 
> ...




Possibly showing your youth there robots! - my memory of it is when redgum were singing it.


----------



## myusernam (13 January 2009)

yeah I was always under the impression that they had to act in my best interests.  Plainly not the case.  Why else would the guy to advise me to sit and do nothing at 92% lvr with only 180K invested paying 70K a year interest?  

Self preservation I believe.

Also I would like to cast aspersions at the a certain bank (which bank?).  My house was paper revalued (storm had 2 bank employees that just handled storm business) once I had been with storm for a year or so and I had made huge increase in value in a static  real estate market.  Of course the money was drawn down and thrown into the market.  I think the bank representatives may have been on the commision trail also.

Interestingly when I went and saw storm a few days ago I asked about why I had never been switched to cash.  The advisor (my normal one on leave) tried to show me the redemptions but they weren't requested redemptions by storm but margin call redemptions by the lender.  I wish I had been switched to cash.  I think the individual advisor I had decided not to because he had just purchased a new storm franchise in another locality and was in financial distress.  Other clients in similar situations were switched to cash and I had not one switching, resulting effectivly in calls at 90 + % each time.


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## boundless (13 January 2009)

I can't believe people who were being greedy investing with Storm Financial are now crying poor.

Give me a break!!

You weren't crying when you were getting big returns compared to the average man on the street.

Sheesh!


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## Mash (13 January 2009)

Even when I contacted our advisor and he emailed me statements that our LVR was over 100% still insisted we hang in there. (Don't worry about what we owed apart from the Margin Loan). Storm had it covered. They had special arrangements to sit it out. Well they thought they did. Now we  have to deal with the results. To all you clients who still think the Cassimatis' will bail you out. We had personal asurrances (off the record) ( I never said this but ) blah blah blah... we won't let you lose your home... they'll just write out a cheque.....as usual they just tell you what they think you want to hear. 
How foolish we feel now!!!!! Never assume money and friendship can co exist!!


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## Temjin (13 January 2009)

While I have sympathy for those who have lost their life saving, I really do not see it is possible for them to retrieve any sort of money from Storm with their flawed business models and clever manipulation of human psychological biases. Now they are in administration and still own certain banks money, it's unlikely there would be anything left to hand out after they were paid first. Unlike Madoff's massive ponzi scheme, the client's money were invested into REAL assets, albeit with a lot of leveraging on top of that. 

Sorry to say this, but greed has got the everyone of you. I know it's a painful lesson, but you aren't the only one on this planet who suffered this fate. Madoff's clients were worse off...they were literally scammed and it wasn't even considered a "black swan" event!


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## boundless (13 January 2009)

Ah that false God called "Greed"

Live to learn within your means. If you can't afford to buy it, don't!

No wonder the world is in the #hit with everyone living on credit and borrowing against their assets


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## Monario (13 January 2009)

boundless said:


> I can't believe people who were being greedy investing with Storm Financial are now crying poor.
> 
> Give me a break!!
> 
> ...





1 post, no idea of the situation, obviously have not read the entire thread..

Bad comment, poor form....

No one was greedy investing with storm, infact the majority of people who are in the situation, as with myself and steve reynolds (a long time personal friend of myself) were trying to sell out on many occasions, but were stalled or blocked by storm.... we were trying to sell at a loss, to minimise further damages, is that greedy? yet we were stalled until we were in negative equity... would you not be crying a bit if your advisor was telling you one thing but the outcome is another...


I will never trust another Financial advisor again, as with many others... however if you think were just whinning and think storm is a good company let me know I would be happy to refer you to my advisor...

the reason I am posting here, is to let as many people know what storm are, I feel it morally important for me to at least try and stop this ever happening to another person.....


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## Jayan (13 January 2009)

> but were stalled or blocked by storm




I keep reading this sort of comment. 
How can they stop you? ... Unless you were tied up with contracts through banks or storm.

Why didn't this ring bells for you?


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## Solly (13 January 2009)

Monario said:


> 1 post, no idea of the situation, obviously have not read the entire thread..
> 
> Bad comment, poor form....
> 
> ...





What are the red flags to look out for?

GG reckons to look out for fountains in the foyer, gold turds in the dunny, eh sorry gold taps etc.... 
Sounds like they were a polished operation spouting fear and despair and you had to be with them because they were the only ones who knew the answer.
Hope the place isn't known as Clownsville after all of this...

I wonder what is the real reason Comm Bank dumped them...?


----------



## boundless (13 January 2009)

Monario said:


> 1 post, no idea of the situation, obviously have not read the entire thread..
> 
> Bad comment, poor form....
> 
> ...




Mate I have lost my life savings over the past 18 months in 3 companies that have gone into administration, but I know I was gambling with spec stocks.

You guys know you were being greedy. They are one and the same thing. It didn't pay off. The owners of this company will pop up in 6 months with a new business and carry on like nothing happened. It's been like that for 100 years and will continue for another 100 years. The rich get richer the poor get poorer.

Life sucks big time.


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## Julia (13 January 2009)

Monario said:


> No one was greedy investing with storm, infact the majority of people who are in the situation, as with myself and steve reynolds (a long time personal friend of myself) were trying to sell out on many occasions, but were stalled or blocked by storm.... we were trying to sell at a loss, to minimise further damages, is that greedy? yet we were stalled until we were in negative equity... would you not be crying a bit if your advisor was telling you one thing but the outcome is another...



I think what many of us are wondering is why you became involved with Storm in the first place?

Were you unable to make ends meet on your existing income?

I gather they ran "seminars" in an attempt to attract new business.

Presumably they explained at the outset that you would be leveraging to the high levels we've seen quoted on this thread.  Didn't that ring any alarm bells?

Sure, we've got the picture that Storm were plausible and persuasive salespeople, but even so, how is it possible that any Storm clients didn't understand that the same leverage that brought you greater returns in a bull market would likewise be devastating if the market turned?


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## Monario (14 January 2009)

Julia said:


> I think what many of us are wondering is why you became involved with Storm in the first place?
> 
> Were you unable to make ends meet on your existing income?
> 
> ...




I started to invest with storm at age 23 (now 30) to help self fund my retirment, and generally make life easier in the future, I DID NOT draw an income of any kind from my investment.. This was my first investment of any kind, and I openly admit I was naive and did not know much, this been the main factor to why I was paying for advice and managment rather than doing it myself....

The high leverage, that people claim we were set up with is not entirely true, if I remember correctly my initial LVI was 50-55%, as the market began to tip I noticed this changing, I asked the questions.... and was assured that we would be safe, and considering I was in it for retirement and not short term gains, it would be unwise to sell out... And it was specifically stated that storm did not operate in this manner, as it was not effecient to try and pick the top and bottoms of spikes and falls, and selling and buying would be a costly excersise..

As the LVI grew higher and higher and repeatedly asked about selling, and at one point contacted challenger, who explained to me I must go through storm fo rany dealings, Storm continued with the advice that things were safe and that in time markets would return...

I had a face to face update with my advisor late october, I asked for an exact figure of when I would be in margin call, and he explained that I had nothing to worry about as that could not happen, and an exact figure would be hard to calculate, I had a rough idea, and asked if I was already in Margin call... The reply was NO!, I recieved a phone call 5weeks later from macquarie explaining that I had been in margin call from the 5th of oct.

Hindsight is 20/20, I should have got seperate advice, should have forced them to sell etc. etc.. but I was investing through an advisor who was giving me false and misleading info, not to mention lying to me about my margin...

So, now.... I ask, can you explain how I was been greedy? I was following advice I paid for, are they not liable in some fashion for what they have done?

Yes by the way, alarm bells were ringing, and I agree I am partly to blame for the extent of the losses, but when you are been advised... well do I have to go on?

Is the finance industry regulated in anyway to control this sort of activity?


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## Monario (14 January 2009)

boundless said:


> Mate I have lost my life savings over the past 18 months in 3 companies that have gone into administration, but I know I was gambling with spec stocks.
> 
> You guys know you were being greedy. They are one and the same thing. It didn't pay off. The owners of this company will pop up in 6 months with a new business and carry on like nothing happened. It's been like that for 100 years and will continue for another 100 years. The rich get richer the poor get poorer.
> 
> Life sucks big time.




? pouring your life savings into 3 speculative stocks compared to investing in a broad market index of 300companies, through a financial planner. how do the 2 even compare?

And as stated this was a retirement plan for the future that I was told was conservative and geared for the long term investment I had asked for...


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## ShareGuy (14 January 2009)

> Were you unable to make ends meet on your existing income?




Oh please, what a comment! Why are we all here talking about investing???? 
Just because someone wants to earn a good return on their assets but doesn't know how (and thus goes to see a FP) does not make them greedy! On the other hand an FP company who seeks out these people and exploits them.... Greedy!

As for Boundless do you really think thowing some money at some specs is the same as investing in index funds (regardless of leverage)?? More poor form there mate.

Enough with the comments about how people should have seen alarm bells, how is a pensioner with a $500,000 unmortgaged house and no idea how to turn a computer on ment to know what was going on? That why they went to see an FP!

And for younger people with good incomes - debt was not the problem, inaction was, how bout a simple hedge Storm?????? Oh no thats right CBA was going to let them rack up debt and not ask any questions or was that cassimartis's ego speaking?


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## Monario (14 January 2009)

Solly said:


> What are the red flags to look out for?
> 
> GG reckons to look out for fountains in the foyer, gold turds in the dunny, eh sorry gold taps etc....
> Sounds like they were a polished operation spouting fear and despair and you had to be with them because they were the only ones who knew the answer.
> ...




Fear and despair where did that come from?

They were spouting, healthy returns on long term investments....

Clownsville? I live in brisbane thanks......


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## cuttlefish (14 January 2009)

Monario said:


> I started to invest with storm at age 23 (now 30) to help self fund my retirment, and generally make life easier in the future, I DID NOT draw an income of any kind from my investment.. This was my first investment of any kind, and I openly admit I was naive and did not know much, this been the main factor to why I was paying for advice and managment rather than doing it myself....
> 
> The high leverage, that people claim we were set up with is not entirely true, if I remember correctly my initial LVI was 50-55%, as the market began to tip I noticed this changing, I asked the questions.... and was assured that we would be safe, and considering I was in it for retirement and not short term gains, it would be unwise to sell out... And it was specifically stated that storm did not operate in this manner, as it was not effecient to try and pick the top and bottoms of spikes and falls, and selling and buying would be a costly excersise..
> 
> ...





Cheers Monario - the way that  you describe how things unfolded - its easy to see how people got attracted to Storm and also to see how those that did take the time to ask the pertinent questions and take action seemed to be hampered.


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## Monario (14 January 2009)

ShareGuy said:


> Oh please, what a comment! Why are we all here talking about investing????
> Just because someone wants to earn a good return on their assets but doesn't know how (and thus goes to see a FP) does not make them greedy! On the other hand an FP company who seeks out these people and exploits them.... Greedy!
> 
> As for Boundless do you really think thowing some money at some specs is the same as investing in index funds (regardless of leverage)?? More poor form there mate.
> ...




Thanks share guy, at least someone agrees with me....

I know I have made mistakes, why is it hard for people to admit that the advisors also have, and that in some respect should be liable, S*#T if they are not I know what the next uni course I will be sudying is...(Why work for the man when I can call myself a financial advisor give bad advice rip off the people and get away with it)


So yes I made mistakes, has anyone got advice on how to invest an avoid these things in the future? how an investment should be run? or are we here just to make people feel worse than we already do?


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## ShareGuy (14 January 2009)

> So yes I made mistakes, has anyone got advice on how to invest an avoid these things in the future? how an investment should be run? or are we here just to make people feel worse than we already do?
> Today 11:28 PM




HEDGE!!!!!!! You can maintain leverage over the long term if you hedge at a predeterminded point to take out all risk and wait for the market to recover. This also will avoid a hefty brogerage and CGT on your indexed funds as you don't sell them. Only CGT on the hedge to worry about.


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## Jayan (14 January 2009)

Monario said:


> The high leverage, that people claim we were set up with is not entirely true, if I remember correctly my initial LVI was 50-55%, as the market began to tip I noticed this changing, I asked the questions.... and was assured that we would be safe, and considering I was in it for retirement and not short term gains, it would be unwise to sell out... And it was specifically stated that storm did not operate in this manner, as it was not effecient to try and pick the top and bottoms of spikes and falls, and selling and buying would be a costly excersise..
> 
> As the LVI grew higher and higher and repeatedly asked about selling, and at one point contacted challenger, who explained to me I must go through storm fo rany dealings, Storm continued with the advice that things were safe and that in time markets would return...
> 
> ...




I really feel for you people that lost a lot of money in this mess, especially the pensioners. No way am I making excuses or sticking up for Storm, obviously their strategy was RISKY ... I personally wouldn't have gone near them with a barge pole. I'm in Qld and they advertised heavily on TV here, they had a local office, I could easily have been a victim if I was a risk taker!

That said ... The point I think is being missed here is way back in October, economically speaking things were looking very different to what has come about and how fast it has all happened. The stock market was on a slide but not in freefall. People were getting nervous but no one predicted how fast this debarcle would happen. One minute Australia would be ok because China was booming, a week later China was in trouble and resources bombed!

Every day on every TV, radio and soapbox a different financial guru had an opinion and they were all different, most were saying don't sell shares, they are long term blah blah! Same with Property. No one still knows what will happen, it's all just a opinion fest and everyone has one. There hasn't been anything in history to indicate where this will end and when.

*My point is ...Hindsight is 20/20*

Storm had an extremely RISKY strategy, it was great when the economy was booming, everyone was happy ... and maybe even ok in a NORMAL economic downturn, losses for sure and I wonder if in a rational world the advice would have been to hold and ride the storm just like you people were told.

Thing Is  ... No one realised this isn't a normal cycle or rational, this is doom and gloom central the whole world over and moving like a tsunami day by day ...  massive bleeding in every financial institution big and small. World banks collapsing, not your every day occurance! We might have thought it could happen but NOT imagine it WOULD happen!

*Way back in October, the world WAS a different place, lets not forget that!*


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## Solly (14 January 2009)

Monario said:


> Fear and despair where did that come from?
> 
> They were spouting, healthy returns on long term investments....
> 
> Clownsville? I live in brisbane thanks......





I should have written this better, I mean did they use tatics that if you didn't follow their methodology you'd end up poor and broke and living on welfare in your old age. I've been to seminars that bring up the old "1% will end up financially secure and 99% will end up struggling in old age."

Good to see you live in Brisneyland, that's were I do most of my work  myself  . I was just being smart about the "clowns" in the industry.


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## Solly (14 January 2009)

Jayan said:


> *Way back in October, the world WAS a different place, lets not forget that!*




I agree but I would demand that a slick, smarter than anybody else Financial Planning Coy would have a strategy in place to mitigate risk in any market circumstance. 
After all that is why they were taking the commissions and fees. Expecially if clients were asured in face to face meetings and the like that all is ok and to trust what they were doing and follow their advice. 
As for "black swan" event bullshait, if it's a "once in a hundred year event" you have must have strategies in place to account for these movements. You only have to look at history to see major unplanned events have happened, are happening and will happen again. 

If you build a house in a flood plain you put your house on stilts because history tends to suggest that it will rain and flood in that location again.
Looks like nobody saw this "Storm" coming, now they all are flooded. ":nosympath


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## Smiley (14 January 2009)

I do not think blaming the investors work here.  Like many of the senior years I had many friends and even relatives who have been stormified.  There was a lot of word of mouth/referrals and those in retirement and retirees went to Storm as they wanted someone to help them with managing finances.  

Storm declared over and over that their approach was well tested and conservative and they would protect people.  Those like myself and Steve Reynolds did not do it to make millions or out of greed but just to help with retirement, leaving something for the children.  As others have stated when one tried to get out they balked. If it had not been for a relative with Storm I would never have gone near the place, but he was so convincing too and I figured some investment would be better than just the aged pension.

The real problem here was the blind faith by Cassimatis that the market would not drop significantly and did they care?  They had those commissions coming in and fobbed people off who wanted to get out. 

After all we go to experts for our health (doctors), for legal matters (lawyers), etc but I will never go to a financial planner again.  I am not losig my house but in my 60s I  now have a large mortgage for house that was paid for 3 years ago.


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## Ijustnewit (14 January 2009)

Monario said:


> 1 post, no idea of the situation, obviously have not read the entire thread..
> 
> Bad comment, poor form....
> 
> ...




Well said Monario, we were stalled and blocked by our Storm advisors all the way down. They would'nt let us get out. For people on this forum that haven't dealt with Storm to be crictical of the victims is unfair. Only Storm clients know how CONTROLLING they were. As i said we tried to bail about 5 times and the answer was allways NO NO AND NO!!!!


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## daisy (14 January 2009)

Back in 2000 and 2001 Howard and Costello were carrying on about how we would all have to look after ourselves in retirement because the pension just wasn’t going to cut it. There was story after story about how much money you would need to have in your kitty so you could retire and maintain your current standard of living. Who doesn’t want to do that?  If that’s greed then we are all guilty. We owned our house but with only five or six years to go before my husband retired we didn’t have enough money for what everyone was saying. 
We asked our accountant for advice and he tried to sell us a master fund. There were so many fees our money was better off in the bank. So we started doing the rounds of financial planners. I knew NOTHING. I was so financially naive that I didn’t even know that managed funds were used to buy shares. I didn’t know where the money went. I had never thought about it.
We live in Townsville, Cassimatis advertised on T.V. and we ended up at his seminars. I learnt a lot from those seminars but when Cassimatis told us we needed to take out a 450K margin loan (at the time our house was worth 130K) we baulked but only because we had already had financial problems over a failed business and had lived under the sickening stress that brings. We had recovered by selling our big beautiful Queenslander and buying a smaller cheaper cottage and we had made a resolution that we would never put our house on the line again. We didn’t know about risk, bull and bear markets, margin loans and LVRs. It was just a simple matter of been there- done that, not going to do it again.
So I learnt about the market myself, rolled our super over into a DIY, got an online broker and went for it. We also changed our accountant. It just so happened that our timing into the market was impeccable. Beginners’ luck. But I had a lot of learning to do and it was that learning that got us out before the end of 2007. 
We did well out of the market and will get back in when the time is right but there were times over those bull years when we looked at each other and said if we had done what Cassimatis told us we would have been laughing. But if we’d gone with Cassimatis we would have left it all up to him, done whatever he said, and we wouldn’t have known to get out.
I am so sick of hearing the word greed being associated with the poor people who have lost everything because of Storm. Retirees who were only trying to set themselves up for self sufficiency and a comfortable retirement have lost everything. Don’t people think they are already going through enough mental anguish without heaping more coals on their heads? Whenever someone does that they betray their own lack of compassion and empathy. All these poor people are guilty of is the fear that the politicians created back then, naivety and lack of experience.
I liked Mr. Cassimatis. I’m still puzzled as to why he let what happened happen. He was already loaded so I find it hard to believe it was just because of the fees and at any rate he must have been able to see that it was all going to end in tears. And he can’t have not known it was on the cards because his float fell through apparently because there was no bear market strategy. This will always remain one of life’s mysteries to me. The only spin I can put on it is maybe his ego got in the way and it all just spiralled out of control. Fat consolation that is to the people who lost everything though.
As for the Clownsville comment ...that just shows your personality for what it truly must be.


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## Smiley (14 January 2009)

Thank you Monario, Justnewit and Daisy - what's that saying about having to walk in another's shoes before you know what they have been through. 

To use a Greek term, hubris got Cassimatis - it is like ego or tempting hte gods and just thinking you know everything.

I was promised they would always get out enough to cover my house if the market started to drop - they didn't.  The Storm apporach is debt and more debt.  Otherwise take someone who has retired and have them mortgage their house and put all their super payout into the market.

Word is that ASIC won't even chastise them.


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## sqwark7600 (14 January 2009)

daisy said:


> I am so sick of hearing the word greed being associated with the poor people who have lost everything because of Storm. Retirees who were only trying to set themselves up for self sufficiency and a comfortable retirement have lost everything. Don’t people think they are already going through enough mental anguish without heaping more coals on their heads? Whenever someone does that they betray their own lack of compassion and empathy. All these poor people are guilty of is the fear that the politicians created back then, naivety and lack of experience.



Spot on daisy. I agree and personally find that the general tone of comment and discussion on this trajedy is "silly fool you; I would never have done that". Lack of life experience and ego driven naivety seems to be alive and well. 
And for those smarter amongst us where does one who does not have the time, drive or training to predict the markets invest one's super savings if not in property, money market or shares through a financial adviser? 
My opinion; your call.


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## myusernam (14 January 2009)

If you are criticising storm members for their naivity you have to remember that if you are a member of this forum then you likely to be fairly pro-active and self educated towards investment.  Not all people are as savvy and therefore go to an advisor.  They are scared about investing in the sharemarket and wouldn't do it alone, so they take the 'safer' option of going through an advisor.  Why not go through the biggest and most prominent advisor in town?


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## daisy (14 January 2009)

myusernam said:


> If you are criticising storm members for their naivity you have to remember that if you are a member of this forum then you likely to be fairly pro-active and self educated towards investment.  Not all people are as savvy and therefore go to an advisor.  They are scared about investing in the sharemarket and wouldn't do it alone, so they take the 'safer' option of going through an advisor.  Why not go through the biggest and most prominent advisor in town?




You must have misread my post.


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## awg (14 January 2009)

but were stalled or blocked by storm




Jayan said:


> I keep reading this sort of comment.
> How can they stop you? ... Unless you were tied up with contracts through banks or storm.
> 
> Why didn't this ring bells for you?





I would suspect the vast majority of FP clients are not pro-active.

When I was with a well respected organisation, and I got sick of them advising me against selling.

I commenced emailing them with my sell instructions,  with return receipt on email.

If they had failed to follow my instructions promptly, they would clearly be open to claims for losses.

I did in fact force them to pay up once, when they neglected my instruction, and I lost money, took a LOT of jumping up and down though.

With respect to Storm, the money is probably now down the toilet, no hope of recovery.

Storms plan was so flawed it blows ones mind, using that much leverage at all time market highs was huge risk.

When I put in place my initial plan for retirement income, I calculated what would be: 

a) the most I could lose, before it really hurt...20%
b) the most I could lose, before I would be damaged critically 40%

this took into account leverage and share market risk.

that is why I repeatedly cashed down, thereby limiting my damage much closer to a than b.

anyone that exposed themselves to 100% risk..well, you have got to ask why?

I once exposed myself to about 80% total risk, (without fully realizing ) and made money, but the stress of it made me sure never to do it again

As for any FP encouraging or even allowing retirees, (or anyone) to do that is not fit to hold a licence IMO.

ps: I wonder what the principles of Storm were doing while things were going pear shaped, being that it was around the end of the year to -Xmas, and they are very wealthy people, maybe they were having a nice holiday in Nicosia or somewhere


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## Sir Osisofliver (14 January 2009)

To all Storm clients.

You have my sincerest sympathies for your current circumstances. I feel for those people (especially retiree's) that have been caught out by the highly questionable tactics of Storm financial advisors.

On behalf of my industry I most sincerely apologise that you have been treated in such a fashion. 

http://www.youtube.com/watch?v=MpHWr7GgzMg

I can see a great deal of you have decided however that now *all* financial advisers/stockbrokers/bankers etc etc are useless parasites, freeloaders, fee taking %$@#'s who you wouldn't urinate on if they were on fire.  I'f I'd just lost my life savings and now had a huge debt over my house, massive stress affecting my health and relationships and all the other negative effects of their actions, I'd be feeling that way as well.

Let me assure you however, that not everyone in the industry is out to take you for every dollar that they can. That there are indeed caring professionals in this industry. The good professionals that truly care will hopefully learn from their mistakes and be able to provide better service in the future (but no one wants to be someone's learning experience). Hopefully the bad ones will decide to find something else to do.

All I seem to be doing lately is helping people who've been shafted by their planners/brokers/accountants and try and get them back on track to financial security and independence, so I can ffully appreciate what you are going through.  With any luck you will find someone who can advise you who genuinely cares about your financial future.

I hope you all learn the lesson of control and that you do not allow anyone else the same level of control over your life ever again.

Sincerely,
Sir O


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## Bob (14 January 2009)

Solly said:


> I wonder what is the real reason Comm Bank dumped them...?




Yeah, that's a good question.  Can anyone enlighten me on what happened here?  


Bob


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## awg (14 January 2009)

Bob said:


> Yeah, that's a good question.  Can anyone enlighten me on what happened here?




Surely the same reason ANZ dumped OPUS,

They ( Storm) were into margin and to protect their (CBA) secured debt


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## Jifromoz (14 January 2009)

If anyone is interested this presentation by Storm makes very interesting veiwing

http://www.stormfinancial.com.au/multimedia/index.html

Cheers


----------



## Bob (14 January 2009)

awg said:


> Surely the same reason ANZ dumped OPUS,
> 
> They ( Storm) were into margin and to protect their (CBA) secured debt




The penny has dropped.  I was under the impression that the margin loans were against blue chip shares, obviously the debt was against the Storm company


Bob


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## sqwark7600 (14 January 2009)

awg said:


> Surely the same reason ANZ dumped OPUS,
> 
> They ( Storm) were into margin and to protect their (CBA) secured debt




Maybe this will help:
http://www.investordaily.com.au/cps...utm_medium=email&rdeCOQ=SID-3F579BCE-6FD1C182
:swear:


----------



## Judd (14 January 2009)

Sir Osisofliver said:


> On behalf of my industry I most sincerely apologise that you have been treated in such a fashion.




Sir O,

This is what I placed on another web-site.



> Now for a bit of a rant but not aimed at Financial Planners as such. I understand that this mob was proposing to float on the ASX (heaven forbid) but got nowhere as the institutions were not, to put it mildly, impressed with the model proposed. Now this is where I have a problem. If that was the case where were the ethics of fund managers or the FPA, assuming it was aware of the float, the model and Storm itself, in not shouting from the rooftops that it was trash and clients involved in such aggressive gearing were going to get burnt. You know, you do not need Government legislation such as the FSRA, if the relevant associations just got in and hammered the cowboys. Indeed, what is the point of having industry associations if they don't do that. I know, I know, the usual arguments trotted out is that we are not law enforcers and we cannot be everywhere at once, blah, blah, blah and the other arguments are that these associations are only in it for themselves and stuff the client.
> 
> If these bodies were run along the ethical lines such as displayed by Bruce Teele and his counterparts at other major listed investment companies and they stuck to it through thick and thin, I believe you would find that onerous regulation on the industry, and the subsequent flow on of compliance costs to the client (IT''S OUR MONEY OR HAVE YOU PHUCKING FORGOTTEN THAT?), would be reduced considerably and that the reputation of the industry would be enhanced.




It is absolutely no use for the FPA or any other industry body to tout that they have a code of ethics and expect their members to abide by that code.  It must be enforced, monitored and audited.  Otherwise what's the point?  However, the FPA does little in that regard.  So why wouldn't the general investor avoid advisers when all that happens is that when things go wrong IT IS ONLY THEN the industry bodies step in and simply go "Oh Dear.  How sad."

Jesus, it would have been so simple.  The FPA was aware of the concerns - have to be blind, deaf and dead not to - so get in, do a few reviews of plans against demographics - asking clients first as part of the auditing process of the FPA.  And after stress testing if not happy withdraw the planers membership of the FPA and place advertisements in local papers as to why.  Sure your going to get some heat and possible litigation but if you stay the course, that just disipates after a few years.  Otherwise the FPA is just a gutless wonder.  Grind these bastards into the dirt, they are cowards and when confronted with litigation they simply bluster and go to water.

I am so angry on behalf of these people who have probably been ripped off.


----------



## awg (14 January 2009)

sqwark7600 said:


> Maybe this will help:
> http://www.investordaily.com.au/cps...utm_medium=email&rdeCOQ=SID-3F579BCE-6FD1C182
> :swear:





that article has the most pathetic-assed excuse ever

" we will help client recover lost equity etc"

how did they propose to do that?

pray for a market reversal?

It seems that Storm must have been responsible for calculating individual margin position within the (pooled fund: assumption).

And they must have FAILED TO DO THAT.

If the whole fund was in negative equity, the margin lender would have closed it out.( which they did)

It seems incredibly incompetent, if that is the case.

I could work it with a calculator, let alone decent software.

Storm MUST have known about the equity position of each customer on a daily basis, if they had even basic software!...maybe  24 or 48 hours behind.

I think there will be a huge stink when whatever went on behind the scenes at Storm hits the light of day.

The position of CBA/Colonial is likely to be invulnerable.

If you look at margin lending agreements, I think you will find a clause that allows the lender to call back the money under certain circumstances. (like any lender for anything, even residential mortgages)

ie close you out.

I believe with CBA it is 24 hrs notice


----------



## awg (14 January 2009)

Bob said:


> The penny has dropped.  I was under the impression that the margin loans were against blue chip shares, obviously the debt was against the Storm company
> 
> 
> Bob




As I understand it Storm had an app $30 million secured debt with its bankers. This would have been for their buildings.

The margin loan situation is different, as I understand it was against managed index funds, such as Colonial or Vanguard.

As the value of these has dropped 30-40% from the NOV07 high, if you were geared at 60%+, then your equity was wiped to $0.

Seems when Colonial became aware the situation was untenable, they have closed out the entire fund.

The secured bankers have STORM offices/Directors guarentees etc as security.

The margin debts belong to the individual loan takers, secured against THEIR properties.


----------



## Julia (14 January 2009)

Monario said:


> I started to invest with storm at age 23 (now 30) to help self fund my retirment, and generally make life easier in the future, I DID NOT draw an income of any kind from my investment.. This was my first investment of any kind, and I openly admit I was naive and did not know much, this been the main factor to why I was paying for advice and managment rather than doing it myself....
> 
> The high leverage, that people claim we were set up with is not entirely true, if I remember correctly my initial LVI was 50-55%, as the market began to tip I noticed this changing, I asked the questions.... and was assured that we would be safe, and considering I was in it for retirement and not short term gains, it would be unwise to sell out... And it was specifically stated that storm did not operate in this manner, as it was not effecient to try and pick the top and bottoms of spikes and falls, and selling and buying would be a costly excersise..



And in this last above, they were no different from any of many FP's and commentators saying the same.  



> As the LVI grew higher and higher and repeatedly asked about selling, and at one point contacted challenger, who explained to me I must go through storm fo rany dealings, Storm continued with the advice that things were safe and that in time markets would return...
> 
> I had a face to face update with my advisor late october, I asked for an exact figure of when I would be in margin call, and he explained that I had nothing to worry about as that could not happen, and an exact figure would be hard to calculate, I had a rough idea, and asked if I was already in Margin call... The reply was NO!, I recieved a phone call 5weeks later from macquarie explaining that I had been in margin call from the 5th of oct.



Are you keeping notes of these dates and advice given?
Hopefully Storm will be called to account by ASIC.




> Hindsight is 20/20, I should have got seperate advice, should have forced them to sell etc. etc.. but I was investing through an advisor who was giving me false and misleading info, not to mention lying to me about my margin...
> 
> So, now.... I ask, can you explain how I was been greedy?



I haven't suggested any of you have been 'greedy'.   Credit is due to you for trying to secure your financial future originally.  I previously asked if some investors had been motivated by not enough income on a day to day basis.
(I was poor at one stage and during that time undertook a risky investment to increase the cashflow.  It all stacked up in the documentation, but it turned out that the people operating it were crooked and I lost, not least because of the massive fees charged by Worrells in the liquidation.)




> I was following advice I paid for, are they not liable in some fashion for what they have done?



You'd have to hope so.  Probably some fine print to exclude them from ultimate responsibility.  You'd need legal advice on this, I suppose.





> Yes by the way, alarm bells were ringing, and I agree I am partly to blame for the extent of the losses, but when you are been advised... well do I have to go on?
> 
> Is the finance industry regulated in anyway to control this sort of activity?




Monario, maybe have a read of the "Financial Planners" thread.  
It may be small comfort, but at least you're young and have time to make up the lost ground in the future.


----------



## Jifromoz (14 January 2009)

Hi Everyone,

I have had a reply from the Deputy CEO of the Financial PLanners Association in reagrd to some questions I put to them. The questions were in one of my previous comments. At least the assocoiation was quick to reply and offer some support. I doubt whether another planner would be able to assist my in-laws especially as they no longer have any trust in people who purport to be professional and experts in their field. (I know that only some planners need be tarred with this particular brush but the honest and professional ones will need to get in and sort this mess out and organise an overseeing authorirty that has the balls and ability to find and get rid of the cowboys) For your information and comment I have added to this thread.

The battle goes on.

Cheers
Jifromoz

Dear **********

Thanks for your email relating to Storm Financial. 

We are very worried about distressed clients just like your In-Laws who find themselves in a difficult financial situation and as you know we have put in place referral services to accommodate where we can. If you like we would happily provide them with access to professional financial planners from our membership, many of whom didn’t take holidays as a consequence of these events and worked through Christmas assisting people just like your In-Laws to get some control or guidance on the options available to them. I am unable to offer specific solutions to your questions but one of our members on the referral list may be able to offer objective advice to help them resolve the specific queries you raise.

I want to assure you that the FPA is genuinely concerned at the personal impacts this situation has had on clients and in the last few weeks we have dealt first hand with hundreds of calls from distressed, tearful and angry clients. We also appreciate that you are angry that this situation has arisen at all and whilst we share your concerns about inappropriate advice being given to unsophisticated investors we are still working through investigations to get to the bottom of those concerns and at this stage are unable to discuss the details or pre-judge the results of those investigations. If you or your In-Laws would like to make a formal complaint we would happily progress that through our Investigation processes for consideration by the Conduct Review Commission and I assure you we act on every breach of our rules triggered by a complaint. 

On the question of avenues for redress – we too are looking at the consequences of their voluntary administration but in your In-Law’s case I would recommend legal advice as the first port of call. I am not sure where your In-Laws are located but if they are in the Townsville/Cairns areas we understand there are a number of local legal advisers familiar with the circumstances and no doubt able to offer immediate advice.


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## Julia (14 January 2009)

Smiley said:


> The real problem here was the blind faith by Cassimatis that the market would not drop significantly and did they care?  They had those commissions coming in and fobbed people off who wanted to get out.



Certainly seems they had their own retirement plan way ahead of that of any of their clients.  Hard to believe they could be simply ignorant about what was happening in the market, so the only other option for their behaviour seems to be pure self interest.



> After all we go to experts for our health (doctors), for legal matters (lawyers), etc but I will never go to a financial planner again.  I am not losig my house but in my 60s I  now have a large mortgage for house that was paid for 3 years ago.



That must be simply awful, Smiley.  I'm really sorry.




Ijustnewit said:


> Well said Monario, we were stalled and blocked by our Storm advisors all the way down. They would'nt let us get out. For people on this forum that haven't dealt with Storm to be crictical of the victims is unfair. Only Storm clients know how CONTROLLING they were. As i said we tried to bail about 5 times and the answer was allways NO NO AND NO!!!!



I think someone suggested earlier in the thread that the whole Storm culture seemed to have elements of a cult.   "Controlling" is what comes across from many of you.





daisy said:


> Back in 2000 and 2001 Howard and Costello were carrying on about how we would all have to look after ourselves in retirement because the pension just wasn’t going to cut it. There was story after story about how much money you would need to have in your kitty so you could retire and maintain your current standard of living. Who doesn’t want to do that?  If that’s greed then we are all guilty.



Not greed to want to be self sufficient in retirement.



> We owned our house but with only five or six years to go before my husband retired we didn’t have enough money for what everyone was saying.
> We asked our accountant for advice and he tried to sell us a master fund. There were so many fees our money was better off in the bank. So we started doing the rounds of financial planners. I knew NOTHING. I was so financially naive that I didn’t even know that managed funds were used to buy shares. I didn’t know where the money went. I had never thought about it.



You were clearly not alone in this.



> We live in Townsville, Cassimatis advertised on T.V. and we ended up at his seminars. I learnt a lot from those seminars but when Cassimatis told us we needed to take out a 450K margin loan (at the time our house was worth 130K)



This is the sort of loan amount that has many onlookers with their jaws on the floor!   Especially with people close to retirement.  Holy ****!



> we baulked but only because we had already had financial problems over a failed business and had lived under the sickening stress that brings. We had recovered by selling our big beautiful Queenslander and buying a smaller cheaper cottage and we had made a resolution that we would never put our house on the line again. We didn’t know about risk, bull and bear markets, margin loans and LVRs. It was just a simple matter of been there- done that, not going to do it again.



So Storm didn't explain to you that there was any risk involved?  They suggested the market would always go up and by borrowing that huge amount you still would be entirely safe?  Would you have believed this?



> So I learnt about the market myself, rolled our super over into a DIY, got an online broker and went for it. We also changed our accountant. It just so happened that our timing into the market was impeccable. Beginners’ luck. But I had a lot of learning to do and it was that learning that got us out before the end of 2007.



Good for you for taking responsibility.  Your efforts to educate yourself have obviously paid off.



> We did well out of the market and will get back in when the time is right but there were times over those bull years when we looked at each other and said if we had done what Cassimatis told us we would have been laughing. But if we’d gone with Cassimatis we would have left it all up to him, done whatever he said, and we wouldn’t have known to get out.
> I am so sick of hearing the word greed being associated with the poor people who have lost everything because of Storm. Retirees who were only trying to set themselves up for self sufficiency and a comfortable retirement have lost everything. Don’t people think they are already going through enough mental anguish without heaping more coals on their heads? Whenever someone does that they betray their own lack of compassion and empathy. All these poor people are guilty of is the fear that the politicians created back then, naivety and lack of experience.



Not sure it's fair to suggest that politicians 'created fear'.  They rightly pointed out that living on the age pension was a poor option.  Their primary motive may have been to keep the welfare budget under control, given the ageing population, but I don't think they were doing anything unreasonable in urging people to save for their retirement.  Australia has a very poor record of personal savings.

"Greed" seems to be a term applicable to the Cassimatis.
To be fair to others posting on this thread, I don't think there has been a suggestion that people were greedy for "trying to provide for their retirement" but rather just astonishment at some of the leverage involved.  You've made this clear with the figures you've quoted above.  To imagine that there wouldn't be potential problems with that sort of ratio is to most of us pretty incomprehensible.




Smiley said:


> Word is that ASIC won't even chastise them.



ASIC's record isn't great in this regard.   It would do no harm to be on ASIC's back.  If you have lawyers doing this so much the better.



sqwark7600 said:


> And for those smarter amongst us where does one who does not have the time, drive or training to predict the markets invest one's super savings if not in property, money market or shares through a financial adviser?
> My opinion; your call.



"The time, drive or training":  Daisy has answered this.
No one is saying not to invest super savings in property, money market or shares.   All anyone is saying is using leverage to the extent that has occurred with at least some of Storm's clients has to be unbelievably risky especially when the market clearly was falling over the last year and more.


----------



## daisy (14 January 2009)

Julia,To be perfectly honest I really don't remember much of what was said after they proposed a 450K loan. The room started spinning and there was a buzzing in my head.


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## daisy (14 January 2009)

And Julia and others on this thread I wasn't saying that the greed thing was necessarily coming from here. I apologise if that's how it read. I've seen all kinds of smug little letters in our Townsville papers implying that people have lost everything because they were greedy. As I said what saved us was because after having lost one house we are not prepared to put our house on the line for anything.
The focus of the seminars was there was no risk because the investment was an index fund and how the market always rises higher than the last peak after a crash, and there were lots of powerpoint screens to prove it.
So provided you hang in there all will be well.


----------



## sqwark7600 (14 January 2009)

Julia said:


> No one is saying not to invest super savings in property, money market or shares.   All anyone is saying is using leverage to the extent that has occurred with at least some of Storm's clients has to be unbelievably risky especially when the market clearly was falling over the last year and more.






sqwark7600 said:


> And for those smarter amongst us where does one who does not have the time, drive or training to predict the markets invest one's super savings if not in property, money market or shares through a financial adviser?
> My opinion; your call.




Full context please. My point is simply that the punter must rely on an adviser and this adviser (Storm) had no bear market strategy.
ASIC won't help and the FPA won't help, they have no track record in this regard. What will help is (1) identify the points of law involved when licenced advisors provide advice that is flawed and consequently results in the loss of all  their clients investment funds on something as simple (for the average hands-on investor) as a forseeable margin call in a down market, (2) take a class action against the advisor(s).  
My opinion; your call


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## daisy (14 January 2009)

My point is simply that the punter must rely on an adviser and this adviser (Storm) had no bear market strategy.


Apart from the legal forms of regulation and redress which I know nothing about the problem is that most people who are as naive as I was assume that a financial planner is someone they can get advice from. Real, valid advice relating to their personal needs and profile. When we were looking for advice, even our accountant who we paid big bucks to every year, tried to sell us a master trust which would have given him great commissions etc but was useless for us. 
We even went to see an "independant financial adviser" thinking we would pay him for his time. What a crock. All independent meant was that he worked for himself and wasn't part of a group like Dallecourt. 
We got so sick of feeling like a lamb going to slaughter every time we tried to get advice that I stopped trusting the entire industry which is why I got it together got into the market by ourselves.  
The term financial adviser is actually an oxymoron.


----------



## ShareGuy (14 January 2009)

I am suprised none of storms clients posting here have mentioned the upfront fee they charged and by this I mean that the reason the intial fees were so high is that they included brokerage for when you buy and sell the units you purchased (no 4% fee in & out etc) for a period of time (I've been told ten yrs by a client). However if you investigated a bit further you still had to pay brokerage if they didn't "advise you" to sell (which of course they rarely did!)

So now that storm looks to be headed for liquidation investors have lost this too! Maybe clients could try and get this back? (unlikely)

All this is not inculding the trail of course. And another note i'm pritty sure the macquarie a/c's also pay a trail to storm so if you don't want to give them any more money take it out.

Was anyone else told the same thing?


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## Julia (14 January 2009)

sqwark7600 said:


> Full context please. My point is simply that the punter must rely on an adviser and this adviser (Storm) had no bear market strategy.
> ASIC won't help and the FPA won't help, they have no track record in this regard. What will help is (1) identify the points of law involved when licenced advisors provide advice that is flawed and consequently results in the loss of all  their clients investment funds on something as simple (for the average hands-on investor) as a forseeable margin call in a down market, (2) take a class action against the advisor(s).
> My opinion; your call



I understand your viewpoint.   But I don't think consulting any 'professional' in any field completely removes the need for personal decision making.

If you went to a doctor because you had a sore foot, would you without question accept his advice to cut your foot off?  No, of course you wouldn't.  You'd think about it and figure his advice was questionable.

All I'm saying is that anyone advised to get involved in leverage of the magnitude Daisy has described would surely have to take some personal responsibility as to whether they thought through whether this was a reasonable suggestion or not.
I can't think of any professional advice I'd blindly accept without seriously considering whether it put me at risk if implemented.  And imo borrowing so heavily when my home was at stake if it all went wrong is risky in the extreme.

Look, I'm really very sorry indeed for the people whose lives have been devastated by Storm's so called advice.   If it were me, I'd be furious, and very, very depressed.

And I understand that many investors, being inexperienced, thought they could rely on so called professional advice, especially with a firm which appeared so glossily successful.   And then there appears to have been an almost cult-like control exercised over investors by the Storm principals.

I wish I could think of something reasonable to say that would offer some comfort, but I can't, frankly.

I think we need to add this thread to the Brisconnections thread and make them both compulsory reading for any new ASF members.

What legal advice has anyone had?   Does it appear likely that you will have a case against Storm?
Please don't say you haven't sought legal advice.


----------



## Julia (14 January 2009)

daisy said:


> Julia,To be perfectly honest I really don't remember much of what was said after they proposed a 450K loan. The room started spinning and there was a buzzing in my head.



Hi Daisy, I'm not at all surprised.  You must be very thankful now for that room spinning and head buzzing.



daisy said:


> And Julia and others on this thread I wasn't saying that the greed thing was necessarily coming from here. I apologise if that's how it read. I've seen all kinds of smug little letters in our Townsville papers implying that people have lost everything because they were greedy. As I said what saved us was because after having lost one house we are not prepared to put our house on the line for anything.
> The focus of the seminars was there was no risk because the investment was an index fund and how the market always rises higher than the last peak after a crash, and there were lots of powerpoint screens to prove it.
> So provided you hang in there all will be well.



Sure.  Just that they apparently conveniently omitted discussion of the effect of leverage if the market fell.


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## Solly (14 January 2009)

The Comm Bank are going to be ruthless with this. I wish Storm luck they will really need it. 
QCs at 5 paces, let the games begin....


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## bunyip (15 January 2009)

Ijustnewit said:


> Well said Monario, we were stalled and blocked by our Storm advisors all the way down. They would'nt let us get out. For people on this forum that haven't dealt with Storm to be crictical of the victims is unfair. Only Storm clients know how CONTROLLING they were. As i said we tried to bail about 5 times and the answer was allways NO NO AND NO!!!!




They stalled you and blocked you and wouldn't let you get out?
In what way wouldn't they let you get out? How could they stop you?
I think what you mean is, they talked you out of it.
But when it was all said and done, it was _*your*_ decision whether to get out or stay in.  Correct?
Did it occur to you that it was in their best interests to keep you in there so they could continue charging you ongoing management fees?
Given that you were sufficiently concerned to approach them with a view to pulling the plug, did you consider overriding their advice to stay in? 
Did you consider adopting a middle of the road approach by quitting at least part of your investment, and retaining the rest?


----------



## bunyip (15 January 2009)

Monario said:


> The sad thing is, I like many other people will never work through an advisor again, the repercussions for the financial industry that this will create will hit hard, and be felt throughout the country. And on a moral level, I am trying to reach as big a part of the community as I can to make them aware of such problems with advisors.




So why will it be sad that you and many others will never again work through a financial advisor? 
Won't investors be better off if they stop relying on financial advisors, and instead learn some basic investment strategies, including risk control? Then they can 'row their own boats' in future, rather than rely on incompetent clowns who masquerade as investment advisors and financial planning experts, but  in reality are little more than glorified commission salesmen.


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## Monario (15 January 2009)

bunyip said:


> So why will it be sad that you and many others will never again work through a financial advisor?
> Won't investors be better off if they stop relying on financial advisors, and instead learn some basic investment strategies, including risk control? Then they can 'row their own boats' in future, rather than rely on incompetent clowns who masquerade as investment advisors and financial planning experts, but  in reality are little more than glorified commission salesmen.




Your rite Bunyip, it wont be, and I think I will be better off, as i wont have hefty fees


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## Monario (15 January 2009)

bunyip said:


> They stalled you and blocked you and wouldn't let you get out?
> In what way wouldn't they let you get out? How could they stop you?
> I think what you mean is, they talked you out of it.
> But when it was all said and done, it was _*your*_ decision whether to get out or stay in.  Correct?
> ...





I spoke to them to get out and they explained that it was notin my best interests, I did go over their heads to challenger, however they directed me back to storm as they were not authorised to deal direct with me.
I also suggested the middle road....


FYI, when it came to the crunch with my parents paying out there margin loan(post to selling out of market) storm would not assist, in the end, after trying to deal through storm, Emanuel himdelf told them face to face, if you wish to clear the margin loan, do, and that you dont need storm help to do so, go home and fax a letter to the lender explaining your wishes..

Nice to see him/storm been helpful after my parents lost everything, including their house........


----------



## Monario (15 January 2009)

My parents have been trying to get copies of some statements and a copy of the loan proposal from storm..

They have said the administrators have denied them the right to pass this on to clients, could this be true? I thought under the new freedom of nfo act, that any document relating to personal information had to be made available?


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## Jifromoz (15 January 2009)

Monario said:


> My parents have been trying to get copies of some statements and a copy of the loan proposal from storm..
> 
> They have said the administrators have denied them the right to pass this on to clients, could this be true? I thought under the new freedom of nfo act, that any document relating to personal information had to be made available?




Hi Monario, You can approach the lenders or banks to get copies of applications. I would also ask for copies of the Low Doc Declarations from the Institutions that provided the loans against the houses. I have requested copies of my In-Laws documents be sent to their address (As they quite rightly would not send them to me). No hassle and about 15 minutes on the phone.

Cheers
Jifromoz


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## daisy (15 January 2009)

Julia. 
With knowledge and hindsight your comments are valid but it must not be under estimated just how financially unsophisticated  some of the people who bought into Cassimatis’s plan were.
1.	At the time I went along, his T.V. ads went along the lines of “you have to look your future....and even if you don’t do it with me that’s fine....(and I quote) ”JUST DO IT”
So he created the impression that he was actually more concerned that you did something rather than he was after your custom. It was a very clever ad.
2.	There were 4 seminars over 2 weeks which ran along the lines I said. Again and again we were presented with information comparing the stock market with properly and showing that the market was by far the better vehicle. Cycles were never mentioned. Gearing was introduced along the way but very subtly and as far as I can recall only vaguely touched on. 
3.	If you chose to carry on, then after the seminars there was a private interview when you produce all your financial details and tell him what you are hoping to achieve. For us it was a 50k a year income as retirees.
4.	Then you are called back a week or so later and the plan that has been especially designed for you, to achieve your aim, is unveiled. This was the point when they dropped the 450K margin loan proposal.  I remember that of that 45 or 50k was fees but as my head was spinning I can’t recall what for.
So basically, we told him what we wanted and he told us how to get it. 
I’d been trying to read a bit about things as well and had got hold of a book by Donnelly about different ways you could invest. In there I had read about LICs. Had even got a shareholders’ glossy from AFIC.  Cassimatis’s process functioned so differently than any other financial planner that I had visited that up until point 4 I actually thought I was dealing with a stock broker who was going to help me find out about the market and advise me as to what to do. It was only at this point that the investment product was an index fund was revealed.

As far as getting a second opinion so to speak. My question is from where? Any financial planner that you go to just wants your business so that’s not a reliable source of advice regarding another financial planner. Even our ex-accountant (which was a big multinational firm) tried to take advantage of us when we asked for advice.
As far as the size of leverage, the overriding atmosphere was that you are in the big league now and this is what the big boys do so step up to the plate or not ...the choice is up to you. But if you want to achieve your goal then this is what you need to do. Desperate times call for desperate measures and while it wasn’t the politicians intention to engender fear among soon to be retirees I can assure you it was exactly what they did.There would have been many people who were so unsophisticated that they wouldn’t have even begun to know that more experienced people would be appalled at the amount of leverage.


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## daisy (15 January 2009)

*" There would have been many people who were so unsophisticated that they wouldn’t have even begun to know that more experienced people would be appalled at the amount of leverage."*

That group of peolpe included me.


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## Ijustnewit (15 January 2009)

bunyip said:


> They stalled you and blocked you and wouldn't let you get out?
> In what way wouldn't they let you get out? How could they stop you?
> I think what you mean is, they talked you out of it.
> But when it was all said and done, it was _*your*_ decision whether to get out or stay in.  Correct?
> ...




They could stop us for your info...It is only since the fall of their company that we are able to access information on how to shut everything down and find out what really was going on. They employed the mushroom principle to trusting people .. keep e'm in the dark and feed'em S....! We tried to get around them like Monario but got the same story. If you haven't dealt with these people you couldn't possibly understand how much control they had over peoples lives. Yes now we can clearly see that we could have done a better job ourselves and certainly no worse, but being inexperienced and just wanting some financial advice (for the first time) to better our retirement funds (not being greedy) and paying for that advice where else could we turn ? You'll probably say ... why didn't we get a second opinion ect.. As you have seen on this forum and on Storms website their business was from 75% word of mouth ,mostly families as also posted on here.The point is everyone has paid to have their finances managed by somebody that has been entrusted and paid to do the job properly . It is a simple matter of employment you pay somebody and you expect the job to be done correctly.
Sorry Bunyip, but if you think that you could have got yourself out in time dealing with this company you would have been very sadly mistaken.


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## pilots (15 January 2009)

bunyip said:


> So why will it be sad that you and many others will never again work through a financial advisor?
> Won't investors be better off if they stop relying on financial advisors, and instead learn some basic investment strategies, including risk control? Then they can 'row their own boats' in future, rather than rely on incompetent clowns who masquerade as investment advisors and financial planning experts, but  in reality are little more than glorified commission salesmen.




The best advice we ever got was in Singapore from a old Chinese man, If you want advice about money you should first make sure the the person you are talking to HAS MORE MONEY THAN YOU, if he has less money than you he should Listen to you.
ALL financial advisor's are only SALESMEN, no different than car salesmen, would you give your life savings to a car sales man???


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## Aussiejeff (15 January 2009)

Solly said:


> The Comm Bank are going to be ruthless with this. I wish Storm luck they will really need it.
> QCs at 5 paces, let the games begin....




Which bank will win the legal battle?


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## sqwark7600 (15 January 2009)

Julia said:


> What legal advice has anyone had?   Does it appear likely that you will have a case against Storm?
> Please don't say you haven't sought legal advice.




Personally I can't say, however an insight into the outcome of a similar case may be an incentive for those who have yet to bite the bullet and proceed with an action. The judge's view of the responsibilities of a financial advisor to his/her clients will be heartening for those who seem to have been hoodwinked by Storm.

http://www.corrs.com.au/corrs/website/web.nsf/Content/Pub_FS_210704_Financial_Services_Newsletter_2/$FILE/FS%20210704%20Financial%20Services%20Newsletter.pdf

:sheep:

My opinion; your call.


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## Temjin (15 January 2009)

pilots said:


> The best advice we ever got was in Singapore from a old Chinese man, If you want advice about money you should first make sure the the person you are talking to HAS MORE MONEY THAN YOU, if he has less money than you he should Listen to you.
> ALL financial advisor's are only SALESMEN, no different than car salesmen, would you give your life savings to a car sales man???




I know this is out of topic, but that advice does not necessary apply to every cases. A lot of highly successful entreprenurs and investors have broke themselve a few times, so would you ignore all of their advices even though they have been "there" before? They might even provide you with advices on why they have failed and how to prevent them next time. It's all about wisdom and what you know, and not necessary experience. I may have less money than a lot of the baby boomers who have made hundred of thousand of dollars through property speculation during the credit boom, but that does not mean they know more about investing than I do. 

It's sad that ALL financial advisors are being blamed because of what happened to Storm. While I do agree that most financial advisors are only salesman, especially those who works in the bank and are on pure commission base, there are also those who works for a fee only structure and have "unlimited" product recommendation. (and happily provide u with products with no fees and rebate all commission) These are the one you want to talk to because they are not too limited by what kind of advices they can give you. Unlike those who works for Storm, they are all required to promote their firm's investment strategy by making impractical use of high leveraging. They are there to promote their company's products, regardless of whether it is suitable for their clients or not. Greed simply got to the founders. 

Here is a better Chinese proverb, 

"He who blames others has a long way to go on his journey. He who blames himself is halfway there. He who blames no one has arrive"

By the way, I can almost understand how hard it is for unsophiscated investors to go against their financial advisors when they request to liquidate their entire investments. Manipulation tactics like fear of missed opportunities and repeated use of false hopes talk can be extremely effective in convincing people. I can certainly understand the angry for not making a firm stand when some of you had made the call to Storm to get out. 

So I geninuely hope some of you can recover some of your losts (but highly unlikely). At the very least, the founders will loss everything including their business and I hope they get sued for misleading their clients in risky investments and get thrown in jails for a few years. (and bankrupt them afterward)


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## daisy (15 January 2009)

pilots said:


> The best advice we ever got was in Singapore from a old Chinese man, If you want advice about money you should first make sure the the person you are talking to HAS MORE MONEY THAN YOU, if he has less money than you he should Listen to you.
> ALL financial advisor's are only SALESMEN, no different than car salesmen, would you give your life savings to a car sales man???




Pilot. Cassimatis was one of if not *the* richest person in Townsville. His home was if not *the *then one of the most expensive. So he actually was able to capitalise on this old chinese saying.


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## Glen48 (15 January 2009)

Strange how people are prepared to sit in their homes as the price dives loosing hundred's of thousands or have the same with Super thinking one day it will all magically return yet here they want their money back?????


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## bunyip (15 January 2009)

When I was a small boy in primary school, certain crazes would go through the school every so often. 
The yoyo craze was one of them....every kid had to have a yoyo.
Then it was autograph books, which were small books with blank pages inside, and 'Autograph Book' emblazoned on the front in large ornate lettering. You'd get all your friends to write an 'autograph' in your book, which was basically a small piece of verse that conveyed a particular message, many of which were lessons for life. Your friend would sign his work, and eventually you'd end up with a book full of handy little rhymes that conveyed useful messages.

Of all the 'autographs' in my book, the one I remember best was...

_*Love all but trust few
Always paddle your own canoe*_

I was showing my autograph book to my Dad one night, and when he came to this one he drummed his finger on the page a few times and said _'This is good advice - make sure you always remember it'._
The lesson stayed with me.

I feel pretty sorry for those who have been mauled by the Storm debacle. I hope those of you who are young enough to start over again will make sure you 'paddle your own canoe' in future.


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## Ijustnewit (15 January 2009)

bunyip said:


> When I was a small boy in primary school, certain crazes would go through the school every so often.
> The yoyo craze was one of them....every kid had to have a yoyo.
> Then it was autograph books, which were small books with blank pages inside, and 'Autograph Book' emblazoned on the front in large ornate lettering. You'd get all your friends to write an 'autograph' in your book, which was basically a small piece of verse that conveyed a particular message, many of which were lessons for life. Your friend would sign his work, and eventually you'd end up with a book full of handy little rhymes that conveyed useful messages.
> 
> ...



Thanks for that . I'm going out to get a canoe and the biggest paddle i can find at least this time I WON"T GET STUCK UP SH.T CREEK WITHOUT ONE !


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## Monario (15 January 2009)

Jifromoz said:


> Hi Monario, You can approach the lenders or banks to get copies of applications. I would also ask for copies of the Low Doc Declarations from the Institutions that provided the loans against the houses. I have requested copies of my In-Laws documents be sent to their address (As they quite rightly would not send them to me). No hassle and about 15 minutes on the phone.
> 
> Cheers
> Jifromoz




Thanks jifro.... I should have mentioned that we new that and have proceeded that way..

I just find it hard to believe that the administrators can do that, and is just one last kick in the face...


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## cuttlefish (15 January 2009)

pilots said:


> The best advice we ever got was in Singapore from a old Chinese man, If you want advice about money you should first make sure the the person you are talking to HAS MORE MONEY THAN YOU, if he has less money than you he should Listen to you.
> ALL financial advisor's are only SALESMEN, no different than car salesmen, would you give your life savings to a car sales man???





This is the thing thats gotten me about the whole financial adviser concept as well.  The ones that are really really good at their "job" will have listened to their own advice and be floating around on a big boat somewhere, or off in Aspen skiing, or saving the world through their charity organisations.   Someone that knows the secret to wealth won't be sitting in some bland office wasting their days charging people commissions to push them investment products.

The other thing that amazes me is that people believe that the path to wealth can be obtained by responding to TV commercials. Yes thats right, peolpe spend their whole lives trying to find out how to obtain wealth when all they had to do was what it said in that loud, slick TV commercial from that nice man that wanted to give you everything so much he paid money himself to advertise just so he could find you and help you.  

Anyway, this is off topic I suppose and not helpful for anyone caught out by this particular situation.   

It certainly shows why the industry needs far heavier regulation - and in a far more formal way as well - they should come up with a standardised investment strategy models and standardised rankings of risk for difference strategies or gearing levels.  

It was unbelievably irresponsible to be pushing these huge debt driven strategies to retirees - and anyone doing it should require them to sign a big, bold print disclaimer that they know they are taking a high risk investment strategy.


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## sqwark7600 (15 January 2009)

Aussiejeff said:


> Which bank will win the legal battle?



Maybe you mean: Which bank will lose the legal battle? 

It's up for bets:

http://www.smartcompany.com.au/Free...se-set-to-head-for-the-courts.html?source=RSS

If Slater and Gordon run with the class action on a 30% trailing fee basis my money is on margin lender CBA (losing). I understand that they are also the owners of Storm's responsible entity-Challenger Financial Services Group and Storm's index fund manager-Colonial First State.

For those interested in precedent try googling _Newman v Financial Wisdom_.

:sheep:

My opinion; your call.


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## Jifromoz (15 January 2009)

Hi everyone,

Hot off the press

The voluntary administrators of Storm Financial have sacked Storm’s 115 staff members and announced the closure of the business.
The administrators – Raj Khatri and Ivor Worrell from Worrells Solvency and Forensic Accountants – stated “the company’s income had reduced very significantly over recent months resulting in trading losses being incurred at a rate which the company could no longer absorb”.The administrators said Storm is no longer in a position to transact further business for its clients.
As a result, the embattled financial planning group is hoping to introduce alternative financial advisers to its clients in the near future, but was stressing client information was being kept confidential until clients specifically authorised its release


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## prawn_86 (15 January 2009)

Got a link/source for that Jifromoz?


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## Julia (15 January 2009)

Monario said:


> My parents have been trying to get copies of some statements and a copy of the loan proposal from storm..



It's your parents who were Storm clients, Monario, not you yourself?




> They have said the administrators have denied them the right to pass this on to clients, could this be true? I thought under the new freedom of nfo act, that any document relating to personal information had to be made available?



Wouldn't you or whoever was the client have received all the documentation when the loan was made?

It would also be interesting to know, if any of you investors can explain this, what you actually received from Storm in terms of documentation.
e.g. was there a written investment strategy, detailing level of risk?

That would be the most basic expectation I'd have if consulting any financial adviser.

What sort of risk assessment did they do in interview to determine appropriate level of risk?

How did they determine your aspirations/what you wanted the plan to do for you?


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## donteventryit (15 January 2009)

prawn_86 said:


> Got a link/source for that Jifromoz?




Source: http://www.moneymanagement.com.au/article/Storm-staff-sacked-by-administrators/434941.aspx


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## Monario (15 January 2009)

Julia said:


> It's your parents who were Storm clients, Monario, not you yourself?
> 
> 
> 
> ...




My whole family is with them, and are all exposed. Myself, parents, brother, inlaws, and a long list of friends.


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## Julia (15 January 2009)

Monario said:


> My whole family is with them, and are all exposed. Myself, parents, brother, inlaws, and a long list of friends.



Very sorry to hear that, Monario.
Can you comment on the questions I asked above re risk assessment etc?


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## Monario (15 January 2009)

Julia said:


> It's your parents who were Storm clients, Monario, not you yourself?
> 
> 
> 
> ...




...


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## Monario (15 January 2009)

to all those interested, please follow this link to an exposure list I have begun.

https://www.aussiestockforums.com/forums/showthread.php?t=14074


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## sails (15 January 2009)

Julia said:


> Very sorry to hear that, Monario.
> Can you comment on the questions I asked above re risk assessment etc?




Julia, from reading the stories on this thread, it looks a bit like Storm may have taken advantage of people with very little knowledge of investment or risk.  

It seems there are two extremes in this situation.  Appears there are those who started with a large amount and threw the lot into Storm to manage.  That I don't understand as they surely would have been more investment savvy and diversification didn't seem to come into it.

Then it appears there are those with little to begin with, who simply wanted to improve their financial status while trusting the seductive, slick marketing dished up by Storm (example was given in a link earlier on in this thread).  They acknowledge that they knew nothing and that's why they went for help.  Would be doubtful if they would have known the right questions to ask.

Hopefully, those that are young enough will learn some valuable lessons - but will be much tougher for retirees...


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## mini11 (15 January 2009)

There has been some speculation that Storm's business model wasn't that flash to begin with, did anyone see the collapse of Storm coming?


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## Glen48 (15 January 2009)

To days news some accountant has gone to Jail for 8 yrs out in 2 for a mini whopper ponzi scheme he fleeced his victims out of 800k not a bad return for doing 2 yrs.
Wonder how this one will pan out maybe another Skase ???


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## awg (15 January 2009)

its almost academic now

but reputable FP have you answer a questionare that profiles your risk profile.

I was of the belief it was mandatory.

From that, your profile can be deduced, ie conservative,neutral, assertive aggressive etc.

Then they place you in a diversified range of cash, fixed interest, bonds, equity, property, to suit.

leveraged equity would be reserved for the highest risk profile only!

I still have my original plan, even though am no longer with FP.

I repeat all investors should have copies of their original documentation

You may wish to check with FPA about this


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## Temjin (15 January 2009)

Monario said:


> I am not sure what you mean exactly, I guess in initial consultations by asking financial positions.Is that what you mean?. risk assements however should be done regularly.. how can it possibly be an acceptable risk for an advisor to go about taking out a 600k mortgage on a 700k home for 2 retirees?




No, a risk assessment, or rather a risk profile is to look at the current life stage the client is in and his/her sensitive to risk. It's definitely mandatory and subject to audits. 

A rule of thumb (based on study materials) is younger people with few debt will be able to take on more risk than those who are in retirement already. Of course, this rule may not necessary apply if the client's personal risk adversity is too low to accept the standard level of risk that he/she should take. i.e. he is young, can take a bigger risk, but refuse to do so because he prefer things to be safe, thus, take a balanced portfolio instead of full 100% share on margin. Or of course, it can go the other way. The retiree is asking to take on more risk against the advisor's advices. 

To your last question, it's not. They completely violate every rules in the financial planner's book when it comes to risk assessment. Storm is only in it to maximum the amount of money one can put into their branded investment products. Or probably in denial that a black swan event will never happen to them.


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## cuttlefish (15 January 2009)

Temjin said:


> No, a risk assessment, or rather a risk profile is to look at the current life stage the client is in and his/her sensitive to risk. It's definitely mandatory and subject to audits.
> 
> A rule of thumb (based on study materials) is younger people with few debt will be able to take on more risk than those who are in retirement already. Of course, this rule may not necessary apply if the client's personal risk adversity is too low to accept the standard level of risk that he/she should take. i.e. he is young, can take a bigger risk, but refuse to do so because he prefer things to be safe, thus, take a balanced portfolio instead of full 100% share on margin. Or of course, it can go the other way. The retiree is asking to take on more risk against the advisor's advices.




This is a good explanation.   In my view what the financial planning industry needs to do is make these risk assessments mandatory and have standardised 'risk levels'  (e.g. minimum risk, low risk, medium risk, high risk, kamikaze) with an accepted, industry wide description of what each risk level means.  They then should get both the adviser and client to sign the risk assessment with the adviser incidating that they acknowledge the clients desired risk level and the client acknowledging they've accepted that risk level.  It should be a standard form in large bold font - a bit like some of the documents used in real estate - and include an independant witness signing it.

That way regardless of any 'rhetoric' they spout about everything being safe - when the cr*p hits the fan the client will have a document to fall back on.  Alternately if the client comes in hungry to bet it all on red but then turns around and complains about the risks they were put into the adviser also has a document to fall back on.


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## ShareGuy (15 January 2009)

The Townsville bulletins reporting that administrators have shutdown the company with 115 staff sacked. Anyone want to employ an FP?


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## Smiley (15 January 2009)

A lot of us saw problems with Storm in 2007 and tried to get some $ out and questioned but they did just smiled and said trust us and have something to eat and a coffee.  Challenger returned us to the adviser who stalled.

What no one has mentioned on this forum is that clients were in trouble long before the market got down to 3,500 or lower. Most clients were taken out when the market was at 4,200+ .  So there goes their argument about this being the worst case scenario in history.  Anyone know how much the market had dropped when it was at 4,200?


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## donteventryit (15 January 2009)

Smiley said:


> Anyone know how much the market had dropped when it was at 4,200?






Yes, but I don't think that's going to answer your actual question. 

From market high of approx. 6,800 points down to 4,200 points = 38% fall. However, Storm wasn't invested into the ASX 200, per se. They manipulated the indices such that it was overweighted to different sectors. That's why the different investment options they used were: 

- Australian Industrials
- Australian Resources
- Australian Shares (ASX 200)

(Here's the PDS from their website - it's kind of functioning http://www.stormfinancial.com.au/pdf/Storm%20Financial%20Index%20Sharemarket%20Funds_Sep%2008.pdf http://www.stormfinancial.com.au/pdf/Notice%20of%20Amendment%20-%20CFS%20PDS%20-%20Sep%2008.pdf but probably not for much longer)

This was also their downfall back around the Tech boom, when they created a Tech index and advised clients to jump into there. Suffice to say, that didn't really work out. 

Anyway, that's why Storm had trouble working out where clients margin loan positions were - most people had different investment "mixes" away from the ASX 200, so when the market fell 2%, their portfolio could have fallen 1% or 3%. Which is why they relied on info from the margin lenders .......... 

Which is why they could never tell you what your current position was. They would just give you a print out and let you work it out.

They could have spent some money on a flash software system for their clients, but I suppose they don't provide the best bang for your (marketing) buck - like a flash headquarters does.


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## -Bevo- (15 January 2009)

Now that Storm is no more, what happens to the class action any ideas anyone?


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## Glue (15 January 2009)

Does anyone have any idea who to contact now storm is really dead in the water. We have only lost fees, a lot of tho, in the last month. What is the best way to learn about investing without an fp. We are beginners.


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## QuiteContrary (15 January 2009)

> This is a good explanation. In my view what the financial planning industry needs to do is make these risk assessments mandatory and have standardised 'risk levels' (e.g. minimum risk, low risk, medium risk, high risk, kamikaze) with an accepted, industry wide description of what each risk level means. They then should get both the adviser and client to sign the risk assessment with the adviser incidating that they acknowledge the clients desired risk level and the client acknowledging they've accepted that risk level. It should be a standard form in large bold font - a bit like some of the documents used in real estate - and include an independant witness signing it.




The regulations already exist to cover this with the exception of the witness and, sorry for the length of post, but hopefully this example may shed some light.

Sadly the industry already has too much regulation. Don’t believe me? 

I am a qualified Financial Adviser (please hold the boos until the end) – In the 3rd week of September 2007 I moved my entire superannuation balance to cash (from a highly geared 100% equity position) and unwound my non-super gearing. 

The best I could do for my retired clients was to advise them to hold 2 years income in cash and a back up of 2 years income in a capital stable fund (approximately 30% exposure to growth assets)within their account based (allocated) pensions, which I did (mind you not all of them took that advice).

For those still working all I could do was re-visit their risk profile and recommend the minimum exposure to growth assets that their risk profile suggested was appropriate.

If I had recommended that they moved 100% of their investments to cash I would have: 1) failed my next compliance audit; 2) faced the very real risk of being dismissed by my dealer group; 3) faced being reported to ASIC and 4) potentially been banned by ASIC from giving advice.

The reason behind the 3 points above is that according to ASIC I must have a reasonable basis for my advice. To do this I must have a fully completed (and current) “fact find” including a Risk Profile questionnaire for each client. If, in that questionnaire you are determined to be a “balanced” investor I have to recommend a portfolio that fits within my dealer groups definition of “balanced”.

Please don’t get me wrong, I am not (and will not) defending the Storm model (I have clients who fled in terror from the Storm proposal to borrow heavily just prior to retirement) and I feel for every Storm client who has been caught in this mess (I understand that around 20% of the total Storm client base was ‘Stormified”) and I detest underhanded, deceptive and misleading behaviour regardless of the industry in which it occurs, but the financial advice industry is already one of the most heavily regulated industries we have and no amount of regulation will ever prevent the “sharpies” from finding a new angle.

Hopefully the solicitors now circling will find a way to recoup some money for the most affected.


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## -Bevo- (15 January 2009)

Smiley said:


> A lot of us saw problems with Storm in 2007 and tried to get some $ out and questioned but they did just smiled and said trust us and have something to eat and a coffee.  Challenger returned us to the adviser who stalled.
> 
> What no one has mentioned on this forum is that clients were in trouble long before the market got down to 3,500 or lower. Most clients were taken out when the market was at 4,200+ .  So there goes their argument about this being the worst case scenario in history.  Anyone know how much the market had dropped when it was at 4,200?




Good point Smiley, I first became aware of trouble with Storm last year when I had my tax done in October, got talking about the sharemarket with my accountant he mentioned then that people were suffering big losses because of margin calls he went on to mention Storm I'm guessing it was talk around the town between accountants, Storm had said they factored in the worse declines in the sharemarket but this could not be true as there were falls equal to or worse in the past at the time people were getting into trouble.


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## Gerkin (15 January 2009)

Glue said:


> Does anyone have any idea who to contact now storm is really dead in the water. We have only lost fees, a lot of tho, in the last month. What is the best way to learn about investing without an fp. We are beginners.




Sorry to be rude or blunt, but there are people who have lost there homes + more, I dont think you will get fees back.


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## Gerkin (15 January 2009)

mini11 said:


> There has been some speculation that Storm's business model wasn't that flash to begin with, did anyone see the collapse of Storm coming?




Yes,
Ask any stockbroker or decent financial planner_(one who actually understands investment markets)_ and you will get a "Told you so response"
From reading there prospectus when they tried to list, there business model was flawed, p/e ratio too high, forecast eps too low, it was simply a cash out by directors (which the institutional mkt saw), now the directors have two parts of f all.
They had zero imstitutional support when they tried to list, no brokers wanted a piece of them, Im just glad the didnt list as there clients would have gotten the dummy shares that would be worth zero today adding to the losses.


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## cuttlefish (15 January 2009)

QuiteContrary said:


> The regulations already exist to cover this with the exception of the witness and, sorry for the length of post, but hopefully this example may shed some light.
> 
> Sadly the industry already has too much regulation. Don’t believe me?
> 
> ...




Cheers for the insight.  

Interestingly now that you mention it I was actually quite scared of putting everything into cash at the commencement of 2008 - even though it was a logical time to go to cash from a market cycle perspective - because I did not trust that the banks were not going to be hit by serious problems with the risk of associated bank runs.  (this was before the US government started bailing out institutions and banks left right and centre, and before the Australian government decided to guarantee funds in banks).   

Had I heard of a financial adviser at that time recommending people sell everything and putting it all in cash I probably would have considered this irresponsible as well.

You've made your point well - I can see that having this sort of bureaucracy can actually severely hamper a good financial advisers ability to help their clients make adjustments based on market conditions.

One of the biggest issues for the Storm clients was probably not so much that they had their money in the wrong place - but that they were put into so much leverage.  (they had their money in the wrong place as well, but the leverage amplified the losses to the levels that cause them to wipe out completely).

Does the financial planning industry have specific guidelines/regulations in relation to the amount of leverage that clients should take on?


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## Jayan (15 January 2009)

Glue said:


> Does anyone have any idea who to contact now storm is really dead in the water. We have only lost fees, a lot of tho, in the last month. What is the best way to learn about investing without an fp. We are beginners.




There was a news on our local channel tonight (Qld) that the administrators are setting up something on their website for investors help. Also said letters are going out in 2/3 days.


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## Jifromoz (15 January 2009)

I spoke to one of the people at Slater & Gordon today. They are still looking at helping people affected by Storm. We may hear next week which way they intend to proceed.


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## cuttlefish (15 January 2009)

Jifromoz said:


> I spoke to one of the people at Slater & Gordon today. They are still looking at helping people affected by Storm. We may hear next week which way they intend to proceed.




Who would they sue though?  It doesn't sound likely that there would be any money left in Storm after secured creditors are paid out.  

I guess they'd have to try to sue someone for professional indemnity (who though - the company? the individuals?) and hope that the indemnity insurance covered it. I guess the indemnity insurance should still stand if it was paid up at the time that the professional misconduct occurred - even if the company doesn't exist any more.


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## Jifromoz (15 January 2009)

cuttlefish said:


> Who would they sue though?  It doesn't sound likely that there would be any money left in Storm after secured creditors are paid out.
> 
> I guess they'd have to try to sue someone for professional indemnity (who though - the company? the individuals?) and hope that the indemnity insurance covered it. I guess the indemnity insurance should still stand if it was paid up at the time that the professional misconduct occurred - even if the company doesn't exist any more.




Cuttlefish, If I was the Lawyer (Or affected customer) I would also be inclined to look closely at the Banks that gave pensioners large equity  against their houses. I would hazard a guess that they were Low Doc Loans but "As a prudent banker should"  would have thought the lenderwould have to seriously question the age of the borrowers. I have already approached my In-laws lender and they received the documentation that I requested. I will be looking at it with interest tomorrow. Another point is that in the siituation I am involved in I know that the Bank in question did not see their applicants in the flesh and received all documentation direct from Storm. 

I have definitely not finished my work or investigations. Lucky I have another 5 days of my holiday.

ps

If anyone wants to have an idea on what I have done in the last four weeks please send me a private message. I am more than happy to share it with those affected to help.

Cheers


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## Gerkin (15 January 2009)

cuttlefish said:


> Who would they sue though?  It doesn't sound likely that there would be any money left in Storm after secured creditors are paid out.
> 
> I guess they'd have to try to sue someone for professional indemnity (who though - the company? the individuals?) and hope that the indemnity insurance covered it. I guess the indemnity insurance should still stand if it was paid up at the time that the professional misconduct occurred - even if the company doesn't exist any more.




The standard industry PI policies have protection in them that will allow clients to sue after a company is not around or the adviser out of the industry, i have seen this in othe rprofessional practises.


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## Julia (15 January 2009)

Jifromoz said:


> Cuttlefish, If I was the Lawyer (Or affected customer) I would also be inclined to look closely at the Banks that gave pensioners large equity  against their houses.



I think a Storm client earlier in this thread said Storm recorded the value of their property as considerably in excess of the true market value.
Perhaps they also altered client age on the form of application for the loan.
Perhaps this is why clients don't appear to have copies of all the initial documentation.


----------



## Julia (15 January 2009)

Julia said:


> Wouldn't you or whoever was the client have received all the documentation when the loan was made?
> 
> It would also be interesting to know, if any of you investors can explain this, what you actually received from Storm in terms of documentation.
> e.g. was there a written investment strategy, detailing level of risk?
> ...






sails said:


> Julia, from reading the stories on this thread, it looks a bit like Storm may have taken advantage of people with very little knowledge of investment or risk.



Agreed.   My questions above were designed to discover how professional the approach from Storm was, in that all the above should have been undertaken before any investment was made.  They were not meant to underline the naivete of the investors.  I'm trying to work out what liability Storm may have.  My understanding (which could be wrong) is that to carry out a proper risk assessment and provide an investment strategy is mandatory.





> They acknowledge that they knew nothing and that's why they went for help.  Would be doubtful if they would have known the right questions to ask.



I realise that.  I wasn't suggesting they should have instigated the risk profile, investment strategy etc., but was simply asking if this had happened.  The question does not reflect on the clents, but on Storm.


----------



## grace (15 January 2009)

Under the Credit Finance Act, loans made that were non-commercial in nature, must have a reasonable chance of being repaid to the lender.  It is the lendors responsibility to make reasonable investigations that when money is lent, it has a reasonable chance of being paid back.

Not sure if this is even relevant here as I haven't been paying attention to this thread.  However, if there was lending involved on a non-commercial basis, perhaps this Act could have some relevance.

Anyhow, if you don't think this is relevant at all, just completely ignore my post as I am not up to scratch with all of the facts here.


----------



## Julia (15 January 2009)

awg said:


> its almost academic now
> 
> but reputable FP have you answer a questionare that profiles your risk profile.
> 
> ...



Thank you, AWG.  This is what I was getting at in my questions earlier.
If Storm have not done this, that will increase the case against them.




Temjin said:


> No, a risk assessment, or rather a risk profile is to look at the current life stage the client is in and his/her sensitive to risk. It's definitely mandatory and subject to audits.
> 
> A rule of thumb (based on study materials) is younger people with few debt will be able to take on more risk than those who are in retirement already. Of course, this rule may not necessary apply if the client's personal risk adversity is too low to accept the standard level of risk that he/she should take. i.e. he is young, can take a bigger risk, but refuse to do so because he prefer things to be safe, thus, take a balanced portfolio instead of full 100% share on margin. Or of course, it can go the other way. The retiree is asking to take on more risk against the advisor's advices.
> 
> To your last question, it's not. They completely violate every rules in the financial planner's book when it comes to risk assessment. Storm is only in it to maximum the amount of money one can put into their branded investment products. Or probably in denial that a black swan event will never happen to them.



Thanks, Temjin.  Further confirmation of what I was thinking.




cuttlefish said:


> This is a good explanation.   In my view what the financial planning industry needs to do is make these risk assessments mandatory and have standardised 'risk levels'  (e.g. minimum risk, low risk, medium risk, high risk, kamikaze) with an accepted, industry wide description of what each risk level means.  They then should get both the adviser and client to sign the risk assessment with the adviser incidating that they acknowledge the clients desired risk level and the client acknowledging they've accepted that risk level.  It should be a standard form in large bold font - a bit like some of the documents used in real estate - and include an independant witness signing it.



I'd have hoped this was already a mandatory requirement.




> That way regardless of any 'rhetoric' they spout about everything being safe - when the cr*p hits the fan the client will have a document to fall back on.  Alternately if the client comes in hungry to bet it all on red but then turns around and complains about the risks they were put into the adviser also has a document to fall back on.



Exactly.  A properly executed risk assessment, investment strategy, should provide protection for both adviser and client.


----------



## Julia (15 January 2009)

A further question to Storm victims:
Did you receive regular statements showing your position?


----------



## Solly (15 January 2009)

cuttlefish said:


> Who would they sue though?  It doesn't sound likely that there would be any money left in Storm after secured creditors are paid out.
> 
> I guess they'd have to try to sue someone for professional indemnity (who though - the company? the individuals?) and hope that the indemnity insurance covered it. I guess the indemnity insurance should still stand if it was paid up at the time that the professional misconduct occurred - even if the company doesn't exist any more.





I believe that class actions wont proceed. Each client has a different set of circumstances, structures, equity and/ or margin loan providers, SoAs, liabilities etc.

Storm only now exists as a memory, a spur in evolution, a financial variation that failed. Darwin would be proud.

As for former clients seeking a remedy, I believe that individual action will be required. Good luck I hope they all live long enough to see this to finality.
Who would the action be targeted at ? Maybe the Banks in some cases, maybe the directors in others and maybe a combination of both.

I believe that the insurers will be seeking to check all avenues to see if they are legally liable to make any payment what-so-ever. Any legal out they can seek woud be good business sense for them.

As for the Cassimatis's it must be truely devastating for them as well, they appear to have been true believers in their business, strategy and with their quest to help their flock of faithful. (Plus live rather well for their efforts). 

They don't appear to be fly by nighters, nor scammers from an overseas boiler room, or running an off shore scam. They are highly visable people in their community. Aussies that gave it a go but ended in a train wreck and for whatever reason they got it wrong. There's some huge learnings for them as well out of all of this. 

It's real shame that the whole thing ended like this but economics is a hard master, there's no sentiment in business , when things fark up badly you take it on the chin, get up, pick up the pieces and move on. 

There's going to be finger pointing, blame, tears, regrets, what ifs etc.
But the fact is it blew up in a big way. We live in a great rich country, even the poorest here are rich compared to the way most others live in the world.

We have a welfare system that other countries can only dream about.
Most Storm victims will survive, most will have an acceptable quality of life, most will have friends and family to get them through all of this. Most will get through and survive this, somehow the Aussie fighting spirit will win through.

Don't get me wrong I know some are really hurting badly, some may be in a very bad way. ( Call Life Line or Beyond Blue...Talk to someone, any one).

But it's only money, you can't take it with you..... Houses are just houses, Homes can be anywhere and are where friends and family gather.

If you've got to start again..START AGAIN.
If you're running out of time/or are too old to start again....START AGAIN 
If you're feeling down, scared and don't know what to do....START AGAIN.
Inaction is a killer..get moving NOW, no matter what your circumstances are, and never give up, never feel sorry for yourself or wollow in self pity.

If you ended up knocked to the canvas, GET UP. If you get knocked to the canvas again GET UP AGAIN. If the person beside you gets knocked down, help them up...... get it??


----------



## Julia (15 January 2009)

Gee Whiz, Solly.  It's all so damn easy isn't it, to just "get going and stop feeling sorry for yourself" , well, when you're not affected, that is!

I have no idea how retirees in, say, their 70's are going to 'get started again' if they have lost everything they've worked all their lives to acquire.
Ever tried living on a government benefit?


----------



## Solly (16 January 2009)

Julia said:


> Gee Whiz, Solly.  It's all so damn easy isn't it, to just "get going and stop feeling sorry for yourself" , well, when you're not affected, that is!
> 
> I have no idea how retirees in, say, their 70's are going to 'get started again' if they have lost everything they've worked all their lives to acquire.
> Ever tried living on a government benefit?





Julia, 

No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.

There are only two options...
You either give in and die or fight to survive.

The choice is yours.

I made the active choice to choose to survive.
Was it easy...no.
Did it happen overnight...no.
Was it hard...you bet it was.
What did it feel like when I beat my challenges....
Like winning 10 gold medals at the Olympics.

Somebody offered me a little advice about how to eat an elephant.
Of course it's one bite at a time.
We all have our own challenges or "elephants to eat".
Sometimes it is better to remind ourselves to "eat" them one 
bite at a time.

I avoided negative people & influences. 
I met people that were also facing huge challenges in their life as well.
And I met those who had survived the most unbelievable things you could imagine. To put it in perspective living on welfare would have been a luxury to them. Most of them survived, some you will see even see in the media today, some you may pass in the steet and have no knowledge of what they experienced. 

You say you have no idea how people will start again in there 70's, then I suggest you ask them, or maybe offer to help them.

If you are in your 70's and believe you are finished because of the Storm experience, then you ARE finished.

There are always choices....always alternatives.....as long as you are breathing there is always another way out. But you must NEVER lose the momentum or the will to change your circumstances and seek a way to better your position. 

There are no excuses....there are only choices.


----------



## GumbyLearner (16 January 2009)

Solly said:


> Julia,
> 
> No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.
> 
> ...




Great post


----------



## shibby (16 January 2009)

Solly said:


> Julia,
> 
> No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.
> 
> ...




I agree, I agree I agree -I spent yesterday working through my choices had a list worked out of what I could possibly do in my 60's - widow, retired 5 years ago. Currently I have exactly $4000 to my name a mtge payment of $3000 due today, some how I have to hang on to my house (current thinking).  Yesterday I was all fired up with I won't let this beat me. I woke this morning at 4.00am a little less confident but after reading your mantra for life I feel a lot like Rocky can hear that tune in my ears and will fight another day. So out with my trusty excel sheet and more calculations.
Thank you


----------



## GumbyLearner (16 January 2009)

I dont know exactly what has happened in this situation!

The greatest thing about these kind of situations is what the big firm cant read or forsee is from the judiciary.

Dont worry small retail investor...EVERYONE is scared of the outcome...that's the key! I repeat everyone!

Its like sending smoke signals.....

We lost, you lost BUT who really LOST!!!!!:bekloppt:

Dunno? 

DYOR


----------



## Solly (16 January 2009)

shibby said:


> I agree, I agree I agree -I spent yesterday working through my choices had a list worked out of what I could possibly do in my 60's - widow, retired 5 years ago. Currently I have exactly $4000 to my name a mtge payment of $3000 due today, some how I have to hang on to my house (current thinking).  Yesterday I was all fired up with I won't let this beat me. I woke this morning at 4.00am a little less confident but after reading your mantra for life I feel a lot like Rocky can hear that tune in my ears and will fight another day. So out with my trusty excel sheet and more calculations.
> Thank you




That's the way, shibby. Let that be your theme song. I too had a fighting anthem that I would play, hum, sing, whistle. It was a constant re-enforcement that I would dig myself out of the disaster I was in. It wasn't a case of IF I survived but HOW I would survive. We all create of own luck, you just have to be constantly looking for ways to MAKE things better, then following through with ACTIONS. 

Some things I tried worked, some things didn't.

I questioned, asked, sort other opinions, I was relentless. Some days there was a black cloud hovering above me, so I just moved out of its way so the sun would shine on me.  Initially I went through the 'why me', 'how could this have happened?'. I soon realised that these questions and feelings were of no benefit to me. So I chose not to ask these questions again.

I don't believe their are any "Storm Victims" out of this episode...their are no victims...... It's just a set of events that happened to good people who now must seek their own path out of it. Doing whatever it takes for them to do it, with help from those around who can assist, legally, emotionally, physcially, etc.  But really their best assistance will be themselves. Tap your inner strength, unleash the fire within. If you don't have a fire within, then light one yourself.

The language you use, the people you associate with and the thoughts you carry will mould the outcome for you. 

If people see themselves as victims that's what they will be, if they see themselves as victors over this event, continually doing whatever it takes to overcome what has happened, that is what the outcome will be.

I didn't realise what strength I had until I started to feel real pain and discomfort. I didn't like it. Life isn't fair, that's what happens. 
In life the buck stops with you. The next step, thought, action, feeling is your call... the next step it up to the most powerful person in your life ...YOU.

NEVER sell yourself short or underestimate your own abilities.


----------



## Glue (16 January 2009)

Thanks for that Jayan, I have no expectations of getting fees back, however I would like to strongly pass on my displeasure to the Storm people how they took people on and invested only days before they went under. 







Jayan said:


> There was a news on our local channel tonight (Qld) that the administrators are setting up something on their website for investors help. Also said letters are going out in 2/3 days.


----------



## Ijustnewit (16 January 2009)

Glue said:


> Thanks for that Jayan, I have no expectations of getting fees back, however I would like to strongly pass on my displeasure to the Storm people how they took people on and invested only days before they went under.




Having dealt and been burnt by them this comes as no surprise that they were taking fees and clients up until they shut the doors . Just plain wrong and another fine example of their complete disregard for the clients best intrests and denial of the situation surrounding them. Just like the captain of the titanic " ICEBERG WHAT ICEBERG ??" and band plays on..


----------



## cuttlefish (16 January 2009)

Solly said:


> Don't get me wrong I know some are really hurting badly, some may be in a very bad way. ( Call Life Line or Beyond Blue...Talk to someone, any one).




This is very good advice.  Lifeline will listen and many people need to talk through and go over what has happened extensively as part of being able to move on.

Solly I agree with a lot of your sentiments - its all very good advice. Its important also to remember that when people are in the thick of facing their own despair it can be hard sometimes for them to see that future and find that motivation.

The first stages of an experience like this, a lot of people will go over and over again the process that led them up to the situation.  Many people that took these highly risky investment strategies will have been careful and conservative their whole lives - and will be wondering how?, how?, how did I let myself, at this stage in life, get roped into such a stupid thing, and now I've lost it all, everything I worked so hard for gone.   Many will feel deep guilt (towards their partners, their children, their pets, their friends etc.) for allowing/creating the mess.

Many who may have prided themselves on their conservative nature and their sound wealth management in the past will feel extreme shame and huge damage to their self esteem and self image.

At the late stage in life they are at, many will feel that its not possible to move on.

For anyone out there in this situation or that knows people in this situation some things in my view that can be done to help are:

* Undertake physical activity - go for a walk, get out into the sun etc.  - sunlight is a mood enhancer, so is physical exercise.  (For people that are very deeply depressed, even this first step can be hard to do - it will seem pointless - but the act of performing activity will help).

* Help them to understand that, regardless of the circumstances that led to the situation, they shouldn't blame themselves or feel guilty and that they are forgiven.  Help them to understand that their intentions were right, they were only trying to do the best for their family and loved ones and that everybody makes mistakes, small and large.  There are those that will try to blame others and have a lot of anger. Help them to forgive themselves first, so that they in turn can start to forgive the others they perceive have contributed/caused the problem.

* If you are able and willing to give them financial support let them know.  Similarly let them know that you will be there for them and support them as they work their way through the crisis.

* Help them to visualise the future again - ask them to describe what would make them happy, what would happiness be for them.  Quite often this process will help to make people realise that its often the simple things in life - time with family, friends, a walk on the beach, playing with a pet dog/cat etc. that are the most important ingredients to happiness - and these can be achieved with only a minimal amount of money and support.


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## Julia (16 January 2009)

Solly said:


> Julia,
> 
> No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.
> 
> ...



I'd have thought the options were a bit less dramatic than that, i.e. don't see that dying is the alternative.

I guess most of us have been through crises before.  I have.  And, yes, I survived too.  So will these people survive.

You've offered the inspiring words which undoubtedly will raise spirits.

Now, how about some purely practical suggestions regarding how people with insufficient income to meet their obligations can raise that income?


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## Julia (16 January 2009)

Cuttlefish, great post.

We still need answers to e.g. if you are now on government benefit which doesn't provide capacity for outgoings, how are you going to solve this?


Solly, I wonder what age you were when you experienced your crisis?


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## Monario (16 January 2009)

Monario said:


> to all those interested, please follow this link to an exposure list I have begun.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=14074




Just a reminder...


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## sails (16 January 2009)

Julia said:


> Agreed.   My questions above were designed to discover how professional the approach from Storm was, in that all the above should have been undertaken before any investment was made.  They were not meant to underline the naivete of the investors.  I'm trying to work out what liability Storm may have.  My understanding (which could be wrong) is that to carry out a proper risk assessment and provide an investment strategy is mandatory.
> 
> I realise that.  I wasn't suggesting they should have instigated the risk profile, investment strategy etc., but was simply asking if this had happened.  The question does not reflect on the clents, but on Storm.




Apologies if I misinterpreted your thoughts, Julia - I tend to skim through a bit 

I agree, it does raise a lot of questions regarding Storm.


----------



## Jifromoz (16 January 2009)

Is anyone going to the Creditors meeting next week? Would be interesting to know what is said.


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## Julia (16 January 2009)

sails said:


> Apologies if I misinterpreted your thoughts, Julia - I tend to skim through a bit
> 
> I agree, it does raise a lot of questions regarding Storm.




Heavens, no apology required, Sails.  You were quite right to emphasise the unsophistication and vulnerability of the clients.


----------



## myusernam (16 January 2009)

Temjin said:


> It's sad that ALL financial advisors are being blamed because of what happened to Storm. While I do agree that most financial advisors are only salesman, especially those who works in the bank and are on pure commission base, there are also those who works for a fee only structure and have "unlimited" product recommendation. (and happily provide u with products with no fees and rebate all commission) These are the one you want to talk to because they are not too limited by what kind of advices they can give you. Unlike those who works for Storm, they are all required to promote their firm's investment strategy by making impractical use of high leveraging. They are there to promote their company's products, regardless of whether it is suitable for their clients or not. Greed simply got to the founders.




is here really such an animal, and if so could you name any in the townsville region.  i've been stormified.


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## Stan 101 (16 January 2009)

myusernam said:


> is here really such an animal, and if so could you name any in the townsville region.  i've been stormified.




With all due respect to your obvious situation, why would you be possibly looking to jump back into the fire? From the sound of your brief post it seems like you are looking for someone to make things right for you. 
If it is advice to get out of your current situation, an accountant may be a good first call.  If it is advise to reinvest you may well be better off spending $60 and buying some basic books on finance.


----------



## donteventryit (16 January 2009)

Hey, I understand that Storm have just changed their administrator to Kordamentha? 

I heard they are a CBA appointed administrator ... And that they are more reputable ...

Anyone able to confirm this or provide further info. 

If it's on the quiet, feel free to PM me.


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## Julia (16 January 2009)

donteventryit said:


> Hey, I understand that Storm have just changed their administrator to Kordamentha?
> 
> I heard they are a CBA appointed administrator ... And that they are more reputable ...
> 
> ...



I don't know anything about Kordamentha, but have had experience with Worrells.   They were a complete disaster - huge fees and much stuffing about.  When they were appointed there was a reasonable amount available to investors from sale of properties but after Worrell's took their fees, investors received almost nothing.


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## tonzo (16 January 2009)

Hi a newbie here.  We were with storm for about four years we are realtively youthful and invested proceeds from our first house sale after the 1st big boom in brissy.  They did give us the big sell for sure but as has been mentioned here in a boom it is a reasonable risk.  Well we got out in late july with a small profit of about forty thousand after four years well down from november the previous year.  But when at our previous advice session i asked about the likliehood of a margin call they said the market would have to drop 35% to get a margin call something they said had happened only 2 or 3 times (cant remember exactly).  Well it has since dropped well below that.  However they did inform us of the risk and i would religiously check my portfolios every day via the challenger website.  Once the volatility of the sharemarket got to around 3or 4% with it going up and down this much on a given day i decided that was too much risk and volatility for me and we got out.  They didnt like it and dragged their feet about it to which due to the volatility cost us 13000.  We are now back in property (owner occupier).  My point however is that being in the shaer market is a risk and even if you are in a managed fund if you dont keep an eye on it youreslf than you are a fool.  People can always make their own decisions.  We were intending to be long term so accepted the risk but the daily volatility just made me too nervous, would love to say that i saw it coming but it was just about our individula situation.  Lets face it this has been the biggest share market drop in history not only storm clients are losing their homes.  I genuinely liked our advisors and the other clients we met and am very sda to see the house of cards come down.  However i have a mate who rents a small qlder right next to door to the Cassimatis house and it took him a couple of visits to convince me it was just one house it is massive


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## QuiteContrary (16 January 2009)

For anyone affected who is still in the dark about their first steps the Townsville ABN Amro office has a suggested checklist of things to do on their website and you may find it helpful.

You can find it here:







> http://www.growyourwealth.com.au/gr...ist-for-storm-clients.html?SSScrollPosition=0


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## Julia (16 January 2009)

tonzo said:


> Hi a newbie here.  We were with storm for about four years we are realtively youthful and invested proceeds from our first house sale after the 1st big boom in brissy.  They did give us the big sell for sure but as has been mentioned here in a boom it is a reasonable risk.  Well we got out in late july with a small profit of about forty thousand after four years well down from november the previous year.  But when at our previous advice session i asked about the likliehood of a margin call they said the market would have to drop 35% to get a margin call something they said had happened only 2 or 3 times (cant remember exactly).  Well it has since dropped well below that.  However they did inform us of the risk and i would religiously check my portfolios every day via the challenger website.  Once the volatility of the sharemarket got to around 3or 4% with it going up and down this much on a given day i decided that was too much risk and volatility for me and we got out.  They didnt like it and dragged their feet about it to which due to the volatility cost us 13000.  We are now back in property (owner occupier).  My point however is that being in the shaer market is a risk and even if you are in a managed fund if you dont keep an eye on it youreslf than you are a fool.  People can always make their own decisions.  We were intending to be long term so accepted the risk but the daily volatility just made me too nervous, would love to say that i saw it coming but it was just about our individula situation.  Lets face it this has been the biggest share market drop in history not only storm clients are losing their homes.  I genuinely liked our advisors and the other clients we met and am very sda to see the house of cards come down.  However i have a mate who rents a small qlder right next to door to the Cassimatis house and it took him a couple of visits to convince me it was just one house it is massive



Interesting, Tonzo.  Good for you for taking responsibility for your own outcome.


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## Jayan (17 January 2009)

Just wondering here ..

If there are 1,300 clients (from memory) of storm and yet they say only 300-ish in real trouble, even if 500, why did so many others escape without mass losses if the same investment strategy and sales pressure was applied?


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## Jifromoz (17 January 2009)

Jayan, Those figures relate only to margin loan losses. It completely ignores the loans against peoples homes. Unfortunately, I think there are are a lot of people out there with large loans and not enough income to meet the commitment.


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## Jayan (17 January 2009)

*ASIC gave `clean bill of health' to Storm
Michael West
January 17, 2009*

THE Australian Securities and Investments Commission failed to act on complaints about Storm Financial Group last year before the high-risk advisory house collapsed.

It is understood ASIC fielded complaints as early as the 1990s about companies associated with Storm's founder, Emmanuel Cassimatis, then again after the dotcom boom that decade, from clients who had sustained heavy losses from investing in leveraged global equities funds.

A source said the regulator received complaints about Storm last year - one from a large blue-chip financial institution - as the sharemarket was plunging. 

more

http://business.smh.com.au/business/asic-gave-clean-bill-of-health-to-storm-20090116-7j4d.html


The Commonwealth Bank, which is owed about $30 million, appointed *Korda Mentha *as receiver to Storm on Thursday. Storm had appointed its own voluntary administrator on January 9.


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## daisy (17 January 2009)

Thank you Solly for those beautiful words of wisdom on page 17. If it will help anyone get this into perspective I will offer this. I’m not trying to trade war stories and I want no sympathetic response (please)I don’t talk about this much because I can’t handle strangers attempts at sympathetic responses.  

Some years ago I watched helplessly as my only child died of cancer. He was ten.  It’s how come we lost our business. I was so distraught I couldn’t manage it properly and we also drained it dry looking for alternate therapies after the doctors had given up.  I don’t regret that. If chopping off both my arms and legs would have saved my son’s life I would have done it.
A house is just a house. Money is just money. Look to the people around you who love and care for you and want to be a part of your life. Let them help you put the pieces back together again. Life isn’t about houses and money. It’s about loving and giving and sharing. Don’t make the mistake that I have seen others make and allow your pride to come between you and those who care for you and will gladly provide anything you need as a tangible expression of their love and affection.
Stop blaming yourselves. It’s human nature to do that. I found very intricate and completely irrational ways to blame myself for something which was completely beyond my control.
 Don’t let your anger and rage at what has happened here take over your lives. Sure, pursue whatever legal avenues of redress there may be. But what is - is. Don’t let regret over what might have been turn you into the living dead. Take now as the starting point of a new beginning.  In time, you will build a new life. It may not be the life you would have chosen but if you take baby steps one day at a time then the day will come when you will find peace and possibly even joy again.
Try to find one beautiful thing in nature every day. Nature is free. It’s all around us and is a matter of infinite beauty and wonder. If you just take five minutes out of every day and really focus on a tree or a flower or even the rain you will have created five minutes of peace away from your problems. I know it sounds hippy and corny and new age but it really did help me.


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## GumbyLearner (17 January 2009)

Jayan said:


> *ASIC gave `clean bill of health' to Storm
> Michael West
> January 17, 2009*
> 
> ...




"short" them!  The question remains who is "them"? LOL


----------



## Monario (17 January 2009)

Monario said:


> to all those interested, please follow this link to an exposure list I have begun.
> 
> https://www.aussiestockforums.com/forums/showthread.php?t=14074





reminder....follow link


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## sqwark7600 (17 January 2009)

Julia said:


> I don't know anything about Kordamentha, but have had experience with Worrells.   They were a complete disaster - huge fees and much stuffing about.  When they were appointed there was a reasonable amount available to investors from sale of properties but after Worrell's took their fees, investors received almost nothing.



I consider Korda Mentha a very reputable firm. They are the administrators for Ansett and have done a brilliant job to date especially for ex-employees.

:sheep:

My opinion; your call.


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## Garpal Gumnut (17 January 2009)

sqwark7600 said:


> I consider Korda Mentha a very reputable firm. They are the administrators for Ansett and have done a brilliant job to date especially for ex-employees.
> 
> :sheep:
> 
> My opinion; your call.




the first thing they should do is turn off the lurid sign in cheap red neon on white background screeding across the roof of "Headquarters Storm" in Townsville.

It says 

"If you have integrity, nothing else matters, Richardson."

It must have been *the Church of Storm*.

It looks like a godbothering show at night.

How insulting to deceived investors.

gg


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## sqwark7600 (17 January 2009)

Very crass of them CG but in keeping with past performance don't you think?

Just a few observations for those following the legal developments in the windup of Storm: 
I think you will find that CBA have appointed Korda Mentha to come in and grab the secured assets for the loan that Storm has failed to repay whilst Worrells Solvency and Forensic Accountants are the administrative receivers voluntarily appointed by Storm who are now responsible for the whole of the company's property and have a range of statutory powers such as the power to carry on or even transfer the business of the company, to enter into contracts and to borrow money.
They (W) will probably chair the creditors meeting to establish the extent to which creditors have claims on storm. I would not expect there to be much relevant information in that for past clients.

There is plenty of great advise on this thread for those trying to fight their way through this tragedy; all I can add as one who has been through a similar event is that your only long term hope for satisfaction rests with a well run class action.
We have already heard from professionals on this thread that Financial Planning is very heavily regulated. So use the regulations.


:sheep:

My opinion; your call.


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## Jifromoz (17 January 2009)

Hi Everyone,

I have attached a link with the Financial Industry Compaints Service which has the results of prior complaints through this body. The very first one relates to appropriateness of advice. Those affected may want to put complaints in as a precursor to further action as it could help with future actions having a suucessful result on your side. I think you would need to send your complauint direct to the administrators or Recievers if the amount you are claiming is above the statutory levels. I had spoken to Worrells earlier in the week and they stated that it would be appropriate to send via them. Not sure if it now has to go to Korda Mentha now and will follow this up.
Cheers

http://www.fics.asn.au/SearchRight.asp?qu=gearing&sh=0&mh=10&ct=FICSDeterminations&submit1=Search


----------



## sqwark7600 (17 January 2009)

QuiteContrary said:


> For anyone affected who is still in the dark about their first steps the Townsville ABN Amro office has a suggested checklist of things to do on their website and you may find it helpful.
> 
> You can find it here: http://www.growyourwealth.com.au/gro...rollPosition=0



I think this site is on the right track esp. when they say "make clear notes on the progression of...your account". You should spend a lot of time on this aspect. Write every memory item up as a diary note and find and file every piece of paper, note, brochure etc. you have from Storm, your margin lender, responsible entity or fund manager.
In regard to the class action I strongly believe that it should be consolidated through one firm well experienced in the field. Further, there have been comments on the thread that such an action will not fly and there is no money to go for. Leave that to your legal team to decide, you may be surprised. Just because you have different circumstances, margin lenders or fund mixes than other Storm clients doesn't mean a class action cannot succeed. Courts in the past have accepted a spread of a few individual plaintiffs in order to direct on a consolidated approach. More on that from your legal specialists.

:sheep: 

My opinion; your call.


----------



## cutz (17 January 2009)

G’Day,

As far as I’m concerned you people that where massively geared made your beds now lay it, a far cry from dancing in the streets of Dozza feasting on the finest of Italian produce thinking you were masters of the universe.
Was it right that you guys (yeah you know who I’m talking about) where so heavily geared that tax wasn’t even a concern, something to be proud of??? 

Was it right that prudent hardworking Australians had to make up for your shortfalls?

Now with this unwinding of the debt binge and the subsequent collapse of the economy who’s going be the first to cop it? Those same PAYE workers paying the taxes that you people were proud of dodging, many of those workers, now facing an unsecure future probably only borrowed to fund their first home in an environment where they where competing with property investors that where intending on negatively gearing it to the max, can you see the irony here. 

How about retirees who steered clear of debt and are now heavily invested in cash getting bugger all on their returns.

If you people think that true hardship is losing all your cash think again for when compared to other people's experiences what have lost? Nothing.


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## sqwark7600 (17 January 2009)

Jifromoz said:


> Hi Everyone,
> 
> I have attached a link with the Financial Industry Compaints Service which has the results of prior complaints through this body. The very first one relates to appropriateness of advice. Those affected may want to put complaints in as a precursor to further action as it could help with future actions having a suucessful result on your side. I think you would need to send your complauint direct to the administrators or Recievers if the amount you are claiming is above the statutory levels. I had spoken to Worrells earlier in the week and they stated that it would be appropriate to send via them. Not sure if it now has to go to Korda Mentha now and will follow this up.
> Cheers
> ...




Hi J. Well done on your proactivity keep it up, but remember Worrells is now Storm and Korda Mentha are CBA. Personally I would be very careful submitting anything through either without solid independant legal advice.

:sheep:

My opinion; your call.


----------



## sqwark7600 (17 January 2009)

Bit early to be on the sauce isn't it C.


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## Julia (17 January 2009)

sqwark7600 said:


> I consider Korda Mentha a very reputable firm. They are the administrators for Ansett and have done a brilliant job to date especially for ex-employees.
> 
> :sheep:
> 
> My opinion; your call.



Thanks, Sqwark.  Stands to reason CBA will hire someone competent.

Does anyone know if  Storm would have had professional indemnity insurance?
If so, would it go near covering the losses of investors?

Btw, still hoping for some *practical suggestions *,to accompany the inspiring words, re just what steps investors can take to meet obligations which exceed their capacity to pay.  Solly??


----------



## Jifromoz (17 January 2009)

sqwark7600 said:


> Hi J. Well done on your proactivity keep it up, but remember Worrells is now Storm and Korda Mentha are CBA. Personally I would be very careful submitting anything through either without solid independant legal advice.
> 
> :sheep:
> 
> My opinion; your call.




Sqwark, I contacted the people at FICS. They said that if the loss is above the stautory limit then you have to go to Storm and seek their agreeance in claiming a higher amount. With Storm going into Administration and receivership now, you have to go via them. You have no choice as FICS will not look at it if it is over the Stautory levels that they are allowed to look at.

PS
Cutz - I note your comments but some of the people here are actually trying to help here. I'm assisting retirees who have not only lost their nest eggs but also have a debt on their houses that they should never have been given in the first place and now cannot afford. Your negative and ill informed comments are not for this forum and in my opinion quite repulsive.


----------



## cutz (17 January 2009)

Sorry to offend, i didn't want to start another thread.


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## Garpal Gumnut (17 January 2009)

Jifromoz said:


> PS
> Cutz - I note your comments but some of the people here are actually trying to help here. I'm assisting retirees who have not only lost their nest eggs but also have a debt on their houses that they should never have been given in the first place and now cannot afford. Your negative and ill informed comments are not for this forum and in my opinion quite repulsive.




Jifromoz,

Cutz view is valid. This is a stock forum.

The Storm clients were schmoozed in a cult like atmosphere and swallowed the line through naivity,  greed or ignorance.

It is a classic remake of many other financial disasters.

Rescue fantasies on the part of advisers is the last thing these people need. 

They need to start a class action and go for the culpable with the biggest pockets.

I can guarantee that all the money is gone, from the entity, just going on past debacles.

Also anyone helping them or offering to help, is not Mother Theresa. This is to do with money, lucre, everyone will charge them.

Any class action lawyer will take %30-%50 including fees off any payout they get.

The best lesson from this is *Stay away from financial advisers*

gg


----------



## Portfolio (17 January 2009)

"Stay away from financial advisors"??? So how do you manage your financial affairs?


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## Garpal Gumnut (17 January 2009)

Portfolio said:


> "Stay away from financial advisors"??? So how do you manage your financial affairs?




Pick a topic, any topic, and do a search on aussiestockforums.

Educate yourself.

Do a google search.

Do anything but whatever you do *STAY AWAY FROM FINANCIAL PLANNERS*

gg


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## nomore4s (17 January 2009)

Portfolio said:


> "Stay away from financial advisors"??? So how do you manage your financial affairs?




um, by yourself.

My expirences with financial planners hasn't been so good that I would continue to use them, none of them have offered a plan I couldn't set up myself.

Even if you do use one, imo you need to fully understand what they are doing with your money and the risks and costs involved.


----------



## cuttlefish (17 January 2009)

Jifromoz said:


> Cutz - I note your comments but some of the people here are actually trying to help here. I'm assisting retirees who have not only lost their nest eggs but also *have a debt on their houses that they should never have been given in the first place *and now cannot afford. Your negative and ill informed comments are not for this forum and in my opinion quite repulsive.




Jifromez - I have all sympathy for the situation the Storm clients are in, and Storm was extremely irresponsible in pushing these debt driven highly leveraged investment strategies to retirees.  However - nobody put a gun to anyone's heads and said take out a mortgage on 80% of your home - the Storm clients need to take some responsibility for the situation they are in.

The other perspective is that there are two sides to the asset bubble.  There are numerous young people desperate to have the priviledge to have the stability of their own unencumbered home and who are willing to work for 30 years to pay that off, who have simply been priced out of the market due to the bubbling property prices.   I know of the effect this has had on the younger generations lives and decisions as well - people postpone having children so both partners can work long hours just to be able to be in a position to buy the holy grail - a basic family home - something that possibly many retirees took a little too much for granted.  Many who have achieved the first step on the property ladder have then turned around to have children only to find they left it a little too long - a devastating thing for any couple.

There are also retirees that worked and saved hard earlier in their working life to buy investment property or shares when capital gains were eeked out year by year in single digit percentage gains, or at best low double digit figures - putting aside luxuries and holidays etc. - only to suddenly see a bunch of latercomers that didn't exercise the same prudence suddenly jump on the bandwagon to instant wealth and waltz around as though they were some kind of financial genuises.

I know people that fall into all of the categories described above.

I think Cutz could have been a lot more tactful - but there are two sides to every story and situation, and a forum is a place for open and two sided discussion. 

Unfortunately the irresponsible lending practices of financial institutions has led to all sorts of bizzarre abberations in asset pricing, and peoples relative wealth and financial situations, that has had all sorts of negative repercussions in many and varied ways.


----------



## sqwark7600 (17 January 2009)

Jifromoz said:


> Sqwark, I contacted the people at FICS. They said that if the loss is above the stautory limit then you have to go to Storm and seek their agreeance in claiming a higher amount. With Storm going into Administration and receivership now, you have to go via them. You have no choice as FICS will not look at it if it is over the Stautory levels that they are allowed to look at.
> 
> PS
> Cutz - I note your comments but some of the people here are actually trying to help here. I'm assisting retirees who have not only lost their nest eggs but also have a debt on their houses that they should never have been given in the first place and now cannot afford. Your negative and ill informed comments are not for this forum and in my opinion quite repulsive.




Hi Jifromoz, with respect my previous holds and further, I don't believe that Storm administrators are there to up their debt and if there is a statuory limit on FICS claims and the Storm clients claim is above that they should be proceeding through the courts if they are not willing to accept the potential for the lower outcome.

Especially for Cutz:
This is one of the disadvantages of wine:  it makes a man mistake words for thought.  ~Samuel Johnson
The avoidance of taxes is the only intellectual pursuit that still carries any reward. ~ John Maynard Keynes

:alcohol:

My opinion; your call.


----------



## Jifromoz (17 January 2009)

Hi everyone,
Sorry for my rant. A bit of stress around here at the moment. I agree with you cuttlefish. People do need to take some responsibility for what has happened. This would also include the previous principals from Storm. From the press releases they have released, they are blaming everyone but themselves and their approach to stormification of clients. 
Cheers


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## sqwark7600 (17 January 2009)

Garpal Gumnut said:


> Jifromoz,
> 
> Cutz view is valid. This is a stock forum.
> 
> ...




:iamwithst

My opinion; your call.


----------



## cutz (17 January 2009)

Sorry Guy’s,

But who do expect to bail you out of this situation, the banks? Probably not, remember when you took out a line of credit and used it to fund 100% of your portfolio you pretty much handed your **** on a platter. The banks also have obligations to the responsible public, a LOC is nothing unusual or illegal, and it could even be used as valuable tool.

How about the government via the taxpayers? why ? You didn’t seem concerned to write off all your expenses including your vacations against your income therefore avoiding taxes, don’t expect sympathy here.

Someone mentioned the Corda Mentha did a good job with Ansett so you guys should be O.K but have a read of the history and you probably find that Ansett still had assets that were worth $$$$ after the disaster.

Now I do realize that a few innocent people are caught up in this mess and I like to extend my apologies but I’m sure the majority knew what they were getting themselves into, in pursuit of the easy dollar.

So my bit of advice is lower your expectations and don’t set yourselves up for extreme disappointment down the track, as G.G pointed out the money is gone, just check the charts of the stocks or funds you were invested in, stock won’t come bouncing back in a hurry, it could take years. Every now and again the market dishes out its fury as a stark reminder that’s its no place for the school of get rich quick.


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## basilio (17 January 2009)

Storm is a disaster. The trouble is it was a very foreseeable disaster from the beginning. The basic plan of persuading investors to borrow substantially on their homes and then for Storm to borrow again in the investors behalf (double gearing) was always going to be an extremely risky strategy. Potentially great if there were  continuing excellent share market results , dangerous if the market just meandered along, and downright disastrous if there was any significant downturn. 

*But the part I find most culpable is the very high fees charged by Storm for the "privilege" of being Stomified.* This was at least 7% of the monies invested (and I imagine that included the monies borrowed by customers). According to The Age story today the bulk of Storms profits came from these upfront fees rather than the trailing commissions. So it was clear that the name of the game from Storms POV was  getting punters to invest as much as possible in the market rather than worrying about the trailing commissions. A Get Rich Quick scheme for Storm.

This disaster makes the financial planning industry look bad. What I find hard to digest is that 

1) The industry as whole seemed incapable of monitoring its members and weeding out financially dangerous practices
2) External bodies like ASIC seem to have no role in actively investigating scheme that a prudent advisor would recognise as financially risky. They only seem to become involved when everything falls over.

Its only slightly off topic but I can see similarities to the very detailed analysis given to the American SEC on the Madoff scam in Nov 2005. Here a very capable industry analyst detailed 26 plus red flags on the Madoff hedge fund which demanded closer scrutiny. But nothing happened.

There is a very good story in todays Age on Storm.


> *Clients count cost after Storm's trail of misery*
> Eric Johnston and Vanessa O'Shaughnessy
> January 17, 2009
> 
> ...




http://business.theage.com.au/busin...ter-storms-trail-of-misery-20090116-7j81.html




> Quote:
> Here is the submission by Markopolous (anonymous at the time)
> from 2005 about the activities of Mr.Madeoffs brokerage. Page 14 contains his conclusions.
> 
> ...


----------



## Stan 101 (17 January 2009)

cutz said:


> Sorry Guy’s,




For what; speaking your mind? Granted it may have been strong and to some insensitive but that is your view on the issue and you must stand by your opinions. 
You put your points across and expressed your concerns without singling out individuals. As you mentioned, we as a nation have all paid or will pay for this debacle.
Maybe if a few harsh words were muttered to the people in trouble now before they signed with Storm, their situation may be a just a little different.


cheers,


----------



## Julia (17 January 2009)

cuttlefish said:


> Solly I agree with a lot of your sentiments - its all very good advice. Its important also to remember that when people are in the thick of facing their own despair it can be hard sometimes for them to see that future and find that motivation.



Precisely what I was trying to suggest in response to Solly's original remarks.  At this early stage many people will still be feeling considerable shock and grief for their losses.




> Many will feel deep guilt (towards their partners, their children, their pets, their friends etc.) for allowing/creating the mess.



Guilt towards their pets???  




> At the late stage in life they are at, many will feel that its not possible to move on.



Correct.  And all the motherhood statements about taking charge and moving ahead are well and good, but won't fund a $3000 mortgage payment when you simply don't have it.  This is why I've asked the suppliers of the inspiring words to offer some practical suggestions as to just how people will meet their financial commitments when they don't have the income to do this.
So far nothing has been forthcoming.




> * Help them to understand that, regardless of the circumstances that led to the situation, they shouldn't blame themselves or feel guilty and that they are forgiven.  Help them to understand that their intentions were right, they were only trying to do the best for their family and loved ones






cuttlefish said:


> However - nobody put a gun to anyone's heads and said take out a mortgage on 80% of your home - the Storm clients need to take some responsibility for the situation they are in.




To paraphrase a remark of yours to me earlier, Cuttlefish, there might be an element of irony in the apparently contradictory tone of your two posts above.

*







> If you are able and willing to give them financial support let them know.



Are you suggesting ASF members should consider offering financial support?




> Quite often this process will help to make people realise that its often the simple things in life - time with family, friends, a walk on the beach, playing with a pet dog/cat etc. that are the most important ingredients to happiness - and these can be achieved with only a minimal amount of money and support.



Agree that walking on the beach with a dog is a great experience.
Doesn't put a roof over someone's head, however.





daisy said:


> Thank you Solly for those beautiful words of wisdom on page 17.



I'm still hopeful Solly will follow up his beautiful words with some practical hints.  Not sure that the mortgagor will find beautiful words OK instead of payments owing.


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## Garpal Gumnut (17 January 2009)

sqwark7600 said:


> :iamwithst
> 
> My opinion; your call.
> 
> ...




Thanks sqwark, I'm not a financial adviser but here goes.

I walk into Storms gold plated loo , have a leak and walk back to my Storm adviser for my espresso with $100 five years ago.

Less $8 for inital up front fees and $1 a year for the privilege of knowing them p.a. Less another $5

So the $100 is now $87. 

Less a fee of say $6 over the last few years to have your house valued here and there.

So that is $81.  Let me check that, see I'm not a financial adviser, I need to do it with a Mont Blanc and a piece of paper.

And sure the market has gone up and down since then but suppose I was real unlucky and just lost 33% over the last few years.

And then there were other fees.

It is now $54.

Oops its zero as the administrators have come in.

So say Korda Mentha and Slater Walker Lawyers and CBA/Macquarie all behave and charge their usual fees and their insurers agree, do you honestly think I will get $70 or $50 back.

How do they work out how much I lost?  $100, $81, $54, 

Then Korda Mentha take their cut
Then Slater Walker take their cut 30-50% *of whats left not the original $100*

So I will not have performed better than the market.

Say there is found to have been criminal liability. Will the banks and insurers pay?

As they say in the Castle, Yer Dreaming.

The XAO has lost 41% in the past 12 months.

gg

gg


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## Macquack (17 January 2009)

Julia said:


> Guilt towards their pets???




The pet dog may be the first thing to go.

How much does a german shepard cost to run per week?


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## sqwark7600 (17 January 2009)

I recently read that the reading age of the average Australian (proud to be one) is between 15 and 16 years. I am being provided with ample evidence on some posts on this thread that it is unfortunately a fact. 
Patronising hindsight about the pros and cons of margin lending, index funds and bear market exit strategies are all about spilt milk, which hopefully the pet cat gets to drink before being disposed of.
Bernie Madoff is out on bail for fraud and his was a Ponzi scheme not a margin lending scheme gone wrong. He fooled some of the smartest investers in the world including poor old Adolf Merkle who suicided. He was not a Storm advisor.
This is about unsophisticated investers examining their options having made the worst decision in their financial life and trying to pick up a few pieces. 
I think Julia is on the money for a call for practical solutions and Daisy has the stressors under control. Solly how about another soliloquy.
Meanwhile practical solution #1: Pass all financial PDS by a panel of 14 year olds to test their readability.
On a more realistic note I think Slater and Gordon have it right in their plan to go after the banks for the money or at least the homes. 


:iamwithst


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## daisy (17 January 2009)

Practical solutions. It’s hard to offer practical solutions because everybody’s circumstances will be different. 
Buy a nice bottle of wine and sit down with pen and paper. Make a list of all your assets and all your debts. Include in the asset side anything that can be sold and replaced with a cheaper version which will release some funds (like a house or a you- beaut car.) Add the cost of the cheaper version to the debit side. On the asset side add anything that can be sold that you don’t need. Like a boat or expensive jewellery. 
So basically liquidate, liquidate and liquidate some more. If you are young enough you will be able to start again. If you are retired it’s a much tougher prospect. It depends how much you will be left with. I don’t know what the bankruptcy laws are like if the debit side is too big. There is also reverse mortgages for retirees. So provided you can hang on to a property you can get the pension and release a bit of equity on your house. Reverse mortgages aren’t paid back unless the property is sold or becomes part of a deceased estate. I’m under the impression if you do release some equity on your house under one of these plans the money doesn’t count towards pension means testing.
That’s all I’ve got. Sorry,


----------



## suranyami (17 January 2009)

*Re: Practical advice*

Hi. I've been lurking on this forum for the last few days, after finding out about Storm undergoing administration. I've read just about every post on this thread, and have to say it's been an eye-opener.

I was recommended Storm by someone who is now deeply in the thick of being stormified. I personally only have a very small margin loan ($8K or so), so am not in any trouble. But I'm very worried for the person that recommended me.

I agree that what's needed now is practical advice about what to do. My concern is that the so-called 'unsophisticated' investors that have received margin calls and what-not have a first reaction of "oh, hell, how quickly can we sell the family home".

Now, call me naive, but after reading this forum, hearing about the story that has been told from Storm's point of view, the banks, the investors etc... it appears that there are some serious questions about negligent advice and unprofessional behaviour: mostly on Storm's part, but I don't think the banks and lenders can be seen as innocent either. This spells only one thing: litigation.

Now, I agree with some of the posts above, that litigation, administrators, liquidating companies, lawyers and all the rest probably spell "don't hope to see much in return", but let's look at things from another angle: why the hell would anyone go out and sell their family home when the entire setup is going to be called into legal question?

I for one would be going after:

1. Storm's professional indemnity insurance claims... I'm a measly IT subcontractor, and I'm insured for $20million PER CLAIM for professional indemnity: my clients demand it. It costs me $3K per year. Surely a Financial Adviser would have significantly more than this?

I would be claiming that the investors had been completely misinformed as to the true nature of the risk involved.

e.g. "they had a team of PhDs (Storm boast this!) that said that the downside risk was dealt with"... this COULD have been the case! If they'd done put-options on their indexes, their risk would have been hedged... this never happened).

Also, I would be seriously highlighting any efforts by investors that tried to bailout when things looked bad and were blocked/stymied by Storm's advice AND the obstacle presented by the relationship between Storm and the margin-lenders which prevented them from cashing out when they could.


2. CBA/Colonial Margin Lending/other lenders: for failing a duty of care for allowing retirees to be so highly leveraged and failing to do anything about it.


3. Criminal/common law pursuit of Cassimatis and all of the advisers that worked for them. These people gave advice that led you all to financial ruin, when anyone with even a cursory knowledge of the state of the world's financial markets over the last year could have told you to reduce your exposure. Go after all of them "joint and severally". As someone mentioned early on in this thread... try to do it through common law, not statute law, thus avoiding them hiding behind corporate structures. If that doesn't work, just go after them any way you can.

4. Contact FICS, the FPA, financial ombudsmen, ASIC, etc... use any and all ways of making financial complaints, objections, claims, lawsuits, otherwise. (I've never dealt with any of these organisations personally, either, but you have to try everything!)

I'm not an expert on these things, by a long shot, but I feel like I personally have just dodged a bullet (I almost signed up for a whole "stormified" thing: timing was not quite right, so it didn't happen), and I have loved-ones fully facing the brunt of things, so I can't just sit idly by... Get involved in the class-action suit now! Sue all of them yourselves if you can! Complain! Object! Join forces! But, for god's sake, don't lie down and let them take your life and livelihood away! They're banks, for chrissake! No-one likes them, even the people that work for them. (Yes, I've worked for banks).

So, here's my question to the forum: If I was faced with selling all my assets and being destitute after being stormified, or stalling until after there had been lengthy court-cases, class-actions suits and professional indemnity insurance claims and basically telling the margin-lenders to lump it, I know which option I'd take... what do you think would be the ramifications of this approach?

Given that the banks are going to demand their pound of flesh, surely it makes sense for the investors to do the same?


----------



## daisy (17 January 2009)

Suranyami
of course you are right about selling the family home. My assumption was that there were people stuck with margin loans they were unable to repay which are accruing interest all the time. My other assumption was that all of these court procedures, legal actions , indemnities etc are going to take years before they are resolved. 
I really don't know enough about this to offer advice to anyone.
Sorry folks.


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## awg (17 January 2009)

Does anyone know if Cassimitis was a born-again Christian type, or used some other cultish ideas to lure his customers?


----------



## chops_a_must (17 January 2009)

The smart state, hey?


----------



## Julia (17 January 2009)

Macquack said:


> The pet dog may be the first thing to go.
> 
> How much does a german shepard cost to run per week?



Well, if the pet dog was the first thing to go, then they had meagre affection for the animal in the first place, so would be unlikely to nurture any guilt about a trip to the pound.

How much does a German Shepherd cost to run per week?  Not much at all.
My dog, which is very well looked after, would cost less than $15 p.w.
I would rather spend $15 p.w. less on myself than lose her, not that the situation would ever arise.


----------



## Julia (17 January 2009)

*Re: Practical advice*



suranyami said:


> I agree that what's needed now is practical advice about what to do. My concern is that the so-called 'unsophisticated' investors that have received margin calls and what-not have a first reaction of "oh, hell, how quickly can we sell the family home".



Yes, and as Daisy has pointed the impetus to do this will be great if payments on the loan are due.  If that's the case, how long would it be practical/possible to hold out without making repayments?  (I've never had a margin loan so I honestly don't know what would happen here.)



> Now, call me naive, but after reading this forum, hearing about the story that has been told from Storm's point of view, the banks, the investors etc... it appears that there are some serious questions about negligent advice and unprofessional behaviour: mostly on Storm's part, but I don't think the banks and lenders can be seen as innocent either. This spells only one thing: litigation.



It certainly sounds like it.  However, if Storm exaggerated the value of the homes against which the loans were raised,(and this has been alleged on the thread) then the banks may have less of a case to answer than appears at present.  I guess we just don't know about this.



> Now, I agree with some of the posts above, that litigation, administrators, liquidating companies, lawyers and all the rest probably spell "don't hope to see much in return", but let's look at things from another angle: why the hell would anyone go out and sell their family home when the entire setup is going to be called into legal question?



Perhaps as above, re the repayments?  Again, I don't know the usual practice on this.




> I for one would be going after:
> 
> 1. Storm's professional indemnity insurance claims... I'm a measly IT subcontractor, and I'm insured for $20million PER CLAIM for professional indemnity: my clients demand it. It costs me $3K per year. Surely a Financial Adviser would have significantly more than this?



Thank you for bringing this up.  It's another question I've asked previously and no one has answered.
Would it be likely that the professional indemnity insurance would have a clause rejecting payout if negligence is proven?  Insurance companies aren't exactly easy-going, and if this were not the case wouldn't the door be left open for any FP to be reckless about giving advice because they knew the insurance would cover any subsequent mess?
Again, I don't know and would appreciate Sir O or another FP advising about this.





> I would be claiming that the investors had been completely misinformed as to the true nature of the risk involved.



You'd think this would be logical, but wouldn't the Storm principals have made their first priority ensuring there was some fine print declaring the client had understood all the risk before signing.
Again, I've asked what risk profile, investment strategy, leverage explanation etc was provided prior to the clients signing up, and no one has responded!




> e.g. "they had a team of PhDs (Storm boast this!) that said that the downside risk was dealt with"... this COULD have been the case! If they'd done put-options on their indexes, their risk would have been hedged... this never happened).
> 
> Also, I would be seriously highlighting any efforts by investors that tried to bailout when things looked bad and were blocked/stymied by Storm's advice AND the obstacle presented by the relationship between Storm and the margin-lenders which prevented them from cashing out when they could.



For this to work, wouldn't the investors have to have documented all these attempts at the time, i.e. their approach and the response received?
And isn't the lawyer acting for Storm going to say "well, why did you not write a clear letter of instruction to Storm demanding that your investment be liquidated by such and such a date."  If an investor has such documentation, then yes, they would certainly seem to have a good case.
But if all they can offer is that they said to Storm they were worried about the market going down but that Storm talked them out of cashing out, I doubt that will carry much weight.







> 2. CBA/Colonial Margin Lending/other lenders: for failing a duty of care for allowing retirees to be so highly leveraged and failing to do anything about it.



Sure.  Unless, as above, value of property and possibly annual income level was considerably inflated.  There are plenty of very wealthy retirees who can well afford to service a loan, so the banks are not going to ipso facto deny lending to someone who happens not to be working.






> 3. Criminal/common law pursuit of Cassimatis and all of the advisers that worked for them. These people gave advice that led you all to financial ruin, when anyone with even a cursory knowledge of the state of the world's financial markets over the last year could have told you to reduce your exposure. Go after all of them "joint and severally". As someone mentioned early on in this thread... try to do it through common law, not statute law, thus avoiding them hiding behind corporate structures. If that doesn't work, just go after them any way you can.



Certainly get legal advice about all of this.
Again, I've asked if investors have had legal advice.  Haven't seen a response though perhaps I've missed it.





> 4. Contact FICS, the FPA, financial ombudsmen, ASIC, etc... use any and all ways of making financial complaints, objections, claims, lawsuits, otherwise. (I've never dealt with any of these organisations personally, either, but you have to try everything!)
> 
> I'm not an expert on these things, by a long shot, but I feel like I personally have just dodged a bullet (I almost signed up for a whole "stormified" thing: timing was not quite right, so it didn't happen), and I have loved-ones fully facing the brunt of things, so I can't just sit idly by... Get involved in the class-action suit now! Sue all of them yourselves if you can! Complain! Object! Join forces! But, for god's sake, don't lie down and let them take your life and livelihood away! They're banks, for chrissake! No-one likes them, even the people that work for them. (Yes, I've worked for banks).
> 
> ...




Surinyami, you've made some great suggestions.  Please don't interpret my responses as being negative towards you.  On the contrary, I'm so pleased someone has made some really practical points.  I've just taken the 'devil's advocate' counterbalance in my remarks because sure as hell, neither Storm nor the banks are going to play a soft ball in this miserable affair.


----------



## Julia (17 January 2009)

daisy said:


> There is also reverse mortgages for retirees. So provided you can hang on to a property you can get the pension and release a bit of equity on your house. Reverse mortgages aren’t paid back unless the property is sold or becomes part of a deceased estate. I’m under the impression if you do release some equity on your house under one of these plans the money doesn’t count towards pension means testing.
> That’s all I’ve got. Sorry,




Daisy, I'd thought about reverse mortgages too, but rejected it on the assumption if someone already has a loan against their home (which seems to be the problem, or part of it, here) then it would probably be unlikely to be eligible for a reverse mortgage.  These are very conservative and, the last I heard, were available for no more than 30% of the value of the property.


----------



## daisy (17 January 2009)

Julia,
Every case will be different. Up here you can buy a unit for under 300k. Not palatial but a roof not rented. So if you had a house worth say 500k maybe you could sell down and buy outright a place for 300k and with a reverse mortgage and any equity (if there was any) added from the sale to the reverse mortgage could help either get out of bank debt or make a little supplement to social security. That's what I was thinking.


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## Owenzy (17 January 2009)

Well interesting reading from an ex Townsville, ex FIFO mine worker, ex Townsville property owner, ex storm client, ex Gregory st latte sipper 
 I think the whole situation was fuel by the fast growing economy of Townsville and regional Australia. There was a lot of keeping up with the Jones going on while I lived in Townsville. While the regions are best know for a easy going life style and unsophisticated approach to life there was a forced change by few business people who where out to play on this to try and make financially uneducated people feel like they needed to live a more sophisticated lifestyle and in a hurry. The ever growing expenses of property and living in Townsville and regional Aus where fueling people’s anxiety and greed to keep up or even get a head financially. The property sector in Townsville (and most of Australia) will be next to see reduced values, not to the extent of 40% share market reductions but a reduction. Time will tell, but when Riverside gardens has a for sale sign on every 3rd house if not already, then the figures of only 300-600 (depending on which paper you read) effected clients will paint an obvious picture of the damage to the region in the coming months.

Just some thoughts no malice intended to anyone.


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## daisy (18 January 2009)

I can see the flaw in that plan now. It will depend how much is owed, what other assets can be liquidated to contribute towards that debt and whether your bank will play along with the scheme or grab the money between the sale of the more expensive property and the cheaper one that you plan to reverse mortgage. It still may be an option for some people. It will just depend on how their balance sheet pans out and what policy their bank will adopt towards this.

Word up here in Townsville is that there are hundreds of properties hitting or about to hit the market because of people getting caught up in this.


----------



## Julia (18 January 2009)

daisy said:


> Julia,
> Every case will be different. Up here you can buy a unit for under 300k. Not palatial but a roof not rented. So if you had a house worth say 500k maybe you could sell down and buy outright a place for 300k and with a reverse mortgage and any equity (if there was any) added from the sale to the reverse mortgage could help either get out of bank debt or make a little supplement to social security. That's what I was thinking.



Well, yes Daisy, if these were the level of the figures involved.
I was more going by your own earlier example as follows:



> We live in Townsville, Cassimatis advertised on T.V. and we ended up at his seminars. I learnt a lot from those seminars but when Cassimatis told us we needed to take out a 450K margin loan (at the time our house was worth 130K) we baulked .



There wouldn't have been much equity to release  would there?


----------



## Solly (18 January 2009)

awg said:


> Does anyone know if Cassimitis was a born-again Christian type, or used some other cultish ideas to lure his customers?





I have met some former clients, they still feel that the Cassimitis's were unfairly treated by the Comm Bank, they are angry, upset and in debt up to their necks.

They still think Storm had the answers for them,......riches and money. All without effort. Just let the market do the work and somebody else will make you rich. You just live off the efforts of others with out any input or elbow grease from yourself

Maybe with the use of fiat money, the principles of fractional reserve banking, the magic of double entry booking and a sprinkling of fairy dust....this sure fire way to riches could just work again.....:bonk:


----------



## Macquack (18 January 2009)

Solly said:


> They still think Storm had the answers for them,......riches and money. All without effort. Just let the market do the work and somebody else will make you rich. You just live off the efforts of others with out any input or elbow grease from yourself
> 
> Maybe with the use of fiat money, the principles of fractional reserve banking, the magic of double entry booking and a sprinkling of fairy dust....this sure fire way to riches could just work again.....:bonk:




I was thinking the same thing. 

In the US, the "fairy dust" has already been supplied courtesy of the "Bailout Bill" and all the other ingredients for creating another financial crisis are already in place.

It makes "working for a living" look like a mug's game.


----------



## daisy (18 January 2009)

Julia said:


> Well, yes Daisy, if these were the level of the figures involved.
> I was more going by your own earlier example as follows:
> 
> 
> There wouldn't have been much equity to release  would there?




That's true. But that valuation was in 2000-2001. Our home is now valued at 450k. admittedly we've done a bit of work.. but property values soared here during the last boom...(plus for us personally, we bought inner city which was undesirable when we bought but now that's changed.) 

On consideration, The problem won't only be how to handle any of the margin loan that can't be repaid. I think they can go on forever provided you can service the interest on the portion you are using??? We need some input here from someone who knows about these.

The problem will be the equity loan that people took out to get the margin loan to begin with.  My understanding is that as property valuations boomed up here, some people increased their equity loan to get more money into the scheme. If that setup capitalised the interest then that debt is growing every month. Plus with property values receding.....

I really don't know what I'm trying to deal with here because I don't know enough about how the intracacies of the set up actually worked. I guess that's why it's hard for people to respond to your request for practical solutions. 

When all this mess was first exposed our papers featured a story about a couple who had to sell everything and were reduced to selling their home which, just going from their suburb, was probably valued at around the 350-450k level and living in a caravan. Their son was trying to help them. I'm sure they would have explored all their options before they made that choice.  

The talk is a lot of houses in Yarrawonga will be lost. Yarrawonga would be Townsvilles equivalent of Hamilton  in Brisbane or Mossman in Sydney. That's where I took the 600k figure from.

As I said every case will be different


----------



## Solly (18 January 2009)

Julia said:


> I'm still hopeful Solly will follow up his beautiful words with some practical hints.  Not sure that the mortgagor will find beautiful words OK instead of payments owing.






Julia
I've been told that not all people have survived this episode. I hope it isn't true. That's why I'm a firm believer that if people are in anyway despondent or depressed they quickly seek advice from organisations such as Life Line 13 11 14 , Beyond Blue 1300 22 4636 http://www.beyondblue.org.au/
Any family members or friends that are concerned about their loved ones in trouble can call for advice as well.
There are phases of behavioural change that people go through with episodes like this, 
I'm not qualified to give advice in this realm but shock, anger, sadness, grief, depression, irrational thinking can all take over at times. 

The memory of the darkest days of hurt will will one day only seem like a bee sting in the future.
Mountains that seem insurmountable at the time will be seen as little mounds on the path out.
But takes it take spades of effort, planning, perseverance and commitment. Never ever doubt that you will come through.

What can I offer as practical suggestions  ??
I'm not a financial advisor so anything I say here is purely my opinion. 

I am a very wealthy rich person. I have the ability chose where I live, where I travel, with whom I associate. I live in places that some would say are mansions, I travel in quality cars, enjoy flying in jets and travelling in boats & ships. I do all that is possible to ensure I possess great health and I am very very happy. I can look out over the sea or look towards the beautiful hinterland while having a fine wine or a good cold beer. I enjoy the company of a close circle of people. 

I spend time off shore, (I am very passionate about a south pacific island a short flight from home, but that's another story)
Life is a very hard master, I wouldn't have it any other way. What a dull boring life it would be if every thing was easy if everything was handed to you on a platter.

You ask about giving practical advice ? How can people with insufficient income meet their obligations?  

Beats me I've got no idea and I don't care. 
My life is great why would I be concerned about a bunch of people who got themselves into this mess, of high risk geared investing with a bunch of financials wizards from the Fiscal Capital of the modern world - Townsville Qld.

These people made active choices to invest in this strategy, they signed on the bottom line, the result is all of their own making.
They probably smiled and danced in the streets seeing their portfolios in the millions, "riches" like this many would never have seen.
Did it seem a little strange that out of all the, advisors, academics etc there was only one company that had "the perfect strategy" to riches and wealth? Do I hear someone mention Darwin here? But this really doesn't matter. 

All I know is that I made my own luck, picked myself up when I got knocked down. I really learnt the meaning of the phrase "Deal with it".
You asked me how old I was when I had these challenges, the answer is old enough to have known better. 

I then chose and created my own new reality and never ever gave up. Like a batter on the mound or the crease I just kept swinging until I hit a home run or knocked a ball out of the grounds for a six. If something didn't work I'd try something else, if that didn't work I'd try something else again, if that didn't work I'd try something else again......(This a very important behavioural loop) 

I'd ask others who were successful in their field how they did things, you'd be surprised how willing people are to help. One thing I do is I never stand still, inaction is the killer, brooding over things, over analysing mistakes. Keep moving, until you can move no more. One day we all will be dead....I intend to make every day the best day of my life until I am no more. The only thing that exists is this present moment, make the most of it. Nobody on this planet owes me a living, gives me my happiness or my outlook, except me.

My understanding is that many will lose their houses, businesses, farms, money, retirement savings. 
My advice to these is to ADAPT, modify your life behaviours, change your expectations, seek a remedy, then seek a remedy, then seek a remedy, then seek a remedy..........regardless of age, health issues, I can't tolerate excuses. 

Life will be different now, take an example from the wild, when your environment changes you ADAPT or perish. 
Maybe you don't need millions in the bank to live a full meaningful life....

But then again I am a very wealthy rich person, I have the ability chose where I live, where I travel, with whom I associate............ get it?


----------



## cutz (18 January 2009)

Good morning. 

I’m straying a bit off the topic here but I was just wondering how you can break a quote into individual sub quotes, as demonstrated by Julia in post #386?

Thanks in advance.


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## Macquack (18 January 2009)

Solly said:


> I'd ask others who were successful in their field how they did things, you'd be surprised *how willing people are to help*......
> But then again I am a very wealthy rich person, I have the ability chose where I live, where I travel, with whom I associate............ get it?





Solly, any actual tips on how you gained your wealth?


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## daisy (18 January 2009)

As harsh as some of Solly's words may have sounded that is the reality of the situation.
Maybe somewhere down the track litigations and idemnities etc may return some money to some of the people caught up in this but you have to deal with the here and now. 
As Sails said earlier there were two extremes of people caught up in this. I don't care about the ones who danced in the streets of Italy.
I do care about the ones who just wanted to secure a modest and secure retirement income and who were so financially illiterate they didn't understand what they were doing. Sure, they are still responsible for that blindness but I figure the majority of them are painfully aware of that now, no matter what kind of spin they put on it to avoid the bitterness of the pill they will have to swallow. But none of that rationalising and avoidance will change the reality of the situation they have found themselves in.

As Solly said the here and now for those people is adapt. Forget about personal blame. Life is full of personal challenges. Rise above them. Go to an accountant. Do a personal balance sheet of debt against assets and face the reality of the situation. Once you've got that talk to your accountant and your bank and see what options are available. Also as Solly says if it all seems insurmountable go and talk to someone like beyond blue. 
The hurdle you are facing is one that would crush most people. Don't let it crush you. If you need help in dealing with that there is no shame in that.


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## Garpal Gumnut (18 January 2009)

Solly said:


> Julia
> I've been told that not all people have survived this episode. I hope it isn't true. That's why I'm a firm believer that if people are in anyway despondent or depressed they quickly seek advice from organisations such as Life Line 13 11 14 , Beyond Blue 1300 22 4636 http://www.beyondblue.org.au/
> Any family members or friends that are concerned about their loved ones in trouble can call for advice as well.
> There are phases of behavioural change that people go through with episodes like this,
> ...






Solly I have posted this in full as this is exactly the type of smiling white teethed dung that got Storm investors into this mess in the first place.

Through the 80's and 90's a plethora of positive thinking crap came on the market from the US. 7 Habits and all that gumph.

Many simple folk followed the carpetbaggers with the smiles into all sorts of disasters of which Storm is the latest.

So forget all that positive nonsense. These people are in deep ****. Many will not recover.

Let us hope that others will learn from their mistakes.

By the way Solly does the attainment of all your wealth dispose with the necessities of excretion, as your hubris makes me think you are a little bit constipated, protesting your great wealth as if it is of your own making. 


gg


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## sqwark7600 (18 January 2009)

Great stuff Solly you outdid yourself. Daisy and Julia full marks for your positive discussion.
I agree that maintaining health in mind, body and spirit is the priority for Storm victims. Life is what it is all about so stay focussed and get on with your options.
One that we haven't discussed yet is voluntary bankruptcy. Dirty word to some especially those with a contrary agenda but first port of call for Storm when they realised their failure. I understand it needs some legal support, does not last forever, you can work and earn a living and fight the class action. Google it to check it out and let's get into more positive discussion.
For those overwhelmed by debt it is a legal option.
:sheep:


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## sqwark7600 (18 January 2009)

cutz said:


> Good morning.






cutz said:


> I’m straying a bit off the topic here but I was just wondering how you can break a quote into individual sub quotes, as demonstrated by Julia in post #386?
> 
> Thanks in advance.




Good morning. I just copy and paste the bracketed QUOTE command ahead and after the section I want quoted and repeat for each section thereafter with the above results. Regards.


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## bunyip (18 January 2009)

Solly said:


> I have met some former clients, they still feel that the Cassimitis's were unfairly treated by the Comm Bank, they are angry, upset and in debt up to their necks.
> 
> They still think Storm had the answers for them,......riches and money. All without effort. Just let the market do the work and somebody else will make you rich. You just live off the efforts of others with out any input or elbow grease from yourself
> 
> Maybe with the use of fiat money, the principles of fractional reserve banking, the magic of double entry booking and a sprinkling of fairy dust....this sure fire way to riches could just work again.....:bonk:




Solly

My grandfather had a saying that pretty much sums up what you've said above...._*'the best fertiliser for any business is the footprints of its owner'.*_


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## Solly (18 January 2009)

Macquack said:


> Solly, any actual tips on how you gained your wealth?




Here are a few of my beliefs, It may not be what you expect. These views are not unique to me, it's probably just restating obvioius things.
I'll try and revist later as I'm heading out now and I really don't like typing from my Crackberry. 

First of all you must define what you want. 
Is it a new house, a certain amount of money, a better life by doing something or taking some type of action etc, developing a new product.

This is the most important step. You cannot reach a destination if you don't know where you are travelling to. Don't say things like a I want to have heaps of money. Be specific to the point and head for it.

Determine what *you* mean by wealth/riches. 
Money does not equal riches. 
Living in the biggest tin shed on the hill with views to the island doesn't always mean wealth. This is equally important. 

Think back to some of the happiest times in your life, see that is a definition of riches. I bet you didn't think back to a time you checked you statement of position or bank balance.

Set a time frame, set milestones, pick a realistic end date to arrive. 

How will you do it, Plan your strategy and implement it.
Be willing to fine tune your course.

Surround yourself with people or have access to people who are much smarter than you.

Listen more than you talk, never be afraid to ask questions.

Remember it's all about the journey, enjoy it.

During the take-off roll, be prepared to abort before V1, when you Rotate you are committed to that course. If things go bad after that brace and prepare for impact. Always be have a seat near the exit, always have an exit strategy.

Be prepared to really make huge mistakes, take a breather pick up the pieces and start again

It's a boring & tiring life travelling around strapped in row 1A.

Avoid people that impede your progress, 

Be firm but fair.

Stick with your decisions, if you are wrong, admit it, build a bridge and get over it. Move to the next task.

Always live with in your means. 
Never buy any article, car, house, clothes, just to impress others.

You don't necesarily need to own something to have access to enjoy or use it.  Many things are free or can be accessed in a "pay per use" manner.
It's still "yours" for that time. 

Always "pay" yourself first, before paying others.

Never watch Today Tonight or A Current Affair nor any other mind numbing TV.

Google the name: Hyman Minsky. Read and consider his theories. 

Never, Never, chase something just for dollars. 

I'll elaborate more later....

But it's really all about, pre-planning, implementation, handling variation and steering things to a successful completion. No matter what the task is. 

Managing your available time is critical. Time management is simple but has huge payoffs. I call it Time Management Leverage.

Having a JOB ( Just over Broke ) is a good thing, you don't need to own a business or corporation to be rich. 

Never be greedy, we live in one of the richest, wealthiest places in the world, cherrish this land.


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## sqwark7600 (18 January 2009)

For those checking out bankruptcy this site has a fair bit of information:
http://fredappleton.com.au/faqs.html


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## pilots (18 January 2009)

Solly said:


> Here are a few of my beliefs, It may not be what you expect. These views are not unique to me, it's probably just restating obvioius things.
> I'll try and revist later as I'm heading out now and I really don't like typing from my Crackberry.
> 
> First of all you must define what you want.
> ...




Top post, I would add, set your self a budget, and live with in it.


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## daisy (18 January 2009)

If your balance sheet has more debt than assets so all you will be left with is nowhere to live and a mountain of debt that you will have to try to service somehow then bankruptcy seems to be a very sensible and viable option. I guess it would be something you would discuss with your accountant.
Once again for the here and now it would mean that you could put all this behind you and start over with a clean slate. 
Which would be a very attractive option to me personally if I was trying to deal with what some of the people caught up in this must be trying to deal with. The question over that would be if there was a successful class action in the years to come who got the money. I may be a pessimist but I'm dubious about the outcome of litigation so personally I'd choose bankruptacy now so I could just get some semblance of order and control back into my life and the hell with whatever happens further down the track regarding compensation or whatever. But it is a question that needs addressing.


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## sqwark7600 (18 January 2009)

Agree. Go Sol, and for your detractors.

_Did you know that in the human body there is a nerve that connects the eyeball to the anus?  
It's called the Anal Optic Nerve, and it is responsible for giving people a sh***y outlook on life. 
If you don't believe it, try to pull a hair from your bottom and see if it doesn't bring tears to your eyes._
:iagree:


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## sqwark7600 (18 January 2009)

daisy said:


> The question over that would be if there was a successful class action in the years to come who got the money.



That's one for the legal eagles but my understanding is that bankruptcy lasts for 3 years after which there is no obligation to pay out previous debts.
The other reservation is that in regard to the home the situation as I see it would have to be that it is mortgage stressed to the extent that there is absolutely no chance of retaining it.
What bankruptcy can do is calm the waters in what seems to be a perfect storm, no pun intended.


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## Garpal Gumnut (18 January 2009)

sqwark7600 said:


> Agree. Go Sol, and for your detractors.
> 
> _Did you know that in the human body there is a nerve that connects the eyeball to the anus?
> It's called the Anal Optic Nerve, and it is responsible for giving people a sh***y outlook on life.
> ...




Was this taken from the Storm 101 course for their Financial Planners to quote to their mug punters?

Another generation is born believing in fairies at the end of the garden.

We'll be posting on the next debacle in about 7 years.

too much waffle and too little substance does not for financial advice make.

gg


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## Solly (18 January 2009)

Garpal Gumnut said:


> Solly I have posted this in full as this is exactly the type of smiling white teethed dung that got Storm investors into this mess in the first place.
> 
> Through the 80's and 90's a plethora of positive thinking crap came on the market from the US. 7 Habits and all that gumph.
> 
> ...




gg

The main point of my post is the last sentence, especially the last two words.
"But then again I am a very wealthy rich person, I have the ability chose where I live, where I travel, with whom I associate............ get it?"I am talking about the relativeness of wealth and riches.

Thank you for reposting it in full, please look closely at some of the the words and language used. 

"I am a very wealthy rich person. I have the ability chose where I live, where I travel, with whom I associate. I live in places that some would say are mansions, I travel in quality cars, enjoy flying in jets and travelling in boats & ships. I do all that is possible to ensure I possess great health and I am very very happy. I can look out over the sea or look towards the beautiful hinterland while having a fine wine or a good cold beer. I enjoy the company of a close circle of people."

Is this any different to you? 

Your opinion of my post that "this is exactly the type of smiling white teethed dung that got Storm investors into this mess in the first place" 
I cannot see the comparison, but I respect your view.

"Through the 80's and 90's a plethora of positive thinking crap came on the market from the US. 7 Habits and all that gumph."
I totally agree, "positive thinking" produces exactly that, just "thinking" . Taking "positive actions" is the only thing that achieves a result.
Trust nobody, question, seek independent opinions, study and research things yourself. 
Make your own decisions never be rushed, a great "deal" will be there today, tomorrow and the next day. 
Take responsibility for your own actions and outcomes. Admit if you got it wrong, retrieve and move on.

BTW, here's a list of some authors that are not on my recommended reading list.
Anything by Robert Kiyosaki including anything he has co-authored, Dolf De Roos, Robert G. Allen, John Burley, 
Rhonda Byrnes (The Secret), Stephen R. Covey. 

On my recommended reading list include these authors;
Buckminster “Bucky” Fuller, Hyman Minsky, Richard Dawkins, Christopher Hitchens,
Phil McGraw (Life Strategies). 


"Many simple folk followed the carpetbaggers with the smiles into all sorts of disasters of which Storm is the latest.
So forget all that positive nonsense. These people are in deep ****. Many will not recover
Let us hope that others will learn from their mistakes"
Agreed, many will not recover......but many will recover but just in a different forms, new circumstances, different expectations, different lifestyles but recovery nevertheless. 
But sometimes the deeper the sh** , the higher the recovery will be.....

Solly


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## Julia (18 January 2009)

sqwark7600 said:


> Meanwhile practical solution #1: Pass all financial PDS by a panel of 14 year olds to test their readability.
> 
> 
> 
> :iamwithst



This is a very valid point.  How many of us have skipped through lengthy PDS documents occasionally?
We're subjected to more and more jargon in just about every aspect of life these days.  Sorry, probably going off at a tangent here.

I'd still really like to know from any Storm client what sort of risk profiling was done, what sort of clearly documented investment strategy was given following the risk profiling, and how much explanation was made of the downside of leverage.  And how clear was the risk before the client signed?


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## Julia (18 January 2009)

Solly said:


> I am a very wealthy rich person. I have the ability chose where I live, where I travel, with whom I associate. I live in places that some would say are mansions, I travel in quality cars, enjoy flying in jets and travelling in boats & ships. I do all that is possible to ensure I possess great health and I am very very happy. I can look out over the sea or look towards the beautiful hinterland while having a fine wine or a good cold beer. I enjoy the company of a close circle of people.



Thank you for your response, Solly.   I'm glad for you that your life is so good.  Undoubtedly my belief that really wealthy people don't boast about their wealth is old fashioned and quite silly.




> Beats me I've got no idea and I don't care.
> My life is great why would I be concerned about a bunch of people who got themselves into this mess, of high risk geared investing with a bunch of financials wizards from the Fiscal Capital of the modern world - Townsville Qld.
> 
> These people made active choices to invest in this strategy, they signed on the bottom line, the result is all of their own making.



Yep, nothing like a little salt in the wound, is there!




> Nobody on this planet owes me a living, gives me my happiness or my outlook, except me.



Yes, totally agree.  This is the philosophy we all should own.
Sadly, there is an increasing culture of blaming anyone other than ourselves for what happens in our lives.




> My understanding is that many will lose their houses, businesses, farms, money, retirement savings.
> My advice to these is to ADAPT, modify your life behaviours, change your expectations, seek a remedy, then seek a remedy, then seek a remedy, then seek a remedy..........regardless of age, health issues, I can't tolerate excuses.



There's nothing wrong with this advice at all, and I agree.  But, Solly, what we all do is offer advice from our own points of view, born out of our own capacity, some of which is genetic and some environmentally obtained.

Some of us have a greater ability to pick ourselves up and start again than others.  I've done it, you've done it apparently, and so have many others.
But I would also acknowledge that there are people who, for whatever reason, are shocked and bewildered by what has happened and don't have the first clue about what practical options might exist.  I've seen people physically and psychologically 'paralysed' by shock/grief/fear of the future.

This is why I've asked anyone who may have had experience in this area to come up with some practical suggestions.  

Surinyami and Daisy have at least tried.






> Maybe you don't need millions in the bank to live a full meaningful life....



 Indeed.  But you do need enough to live on.



> But then again I am a very wealthy rich person, I have the ability chose where I live, where I travel, with whom I associate............ get it?




I think we have a reasonable understanding of you, Solly, thank you, so yes, I guess we 'get it'.


----------



## Waveglider (18 January 2009)

Hi all

This blog has been incredibly interesting reading

I investigated investing with Storm but as soon as their advisor stated that if it all goes bad "Just sue us" we were out of there.

Our friends (who i tried to warn of the dangers) were heavily leveraged by Storm and have now gone from a considerable portfolio to now having a large debt on their home. (at least they still have a home)

Storm created a bull**** image of the life you could have with the outrageously priced holidays to US/Canada and recently Africa and Egypt where you stayed at the best Hotels etc etc.

I believe it became intoxicating to ordinary hard working people who where trying to create a better life for themselves.

This crash has squashed the idea of investing in the stock market with borrowed money for me (well for now anyway)

I look forward to reading further posts and learning from you all 

Best wishes to all


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## Smiley (18 January 2009)

Some good points and do not mind the positive thinkers as there are worse things than going broke, as so eloquently detailed in the post about losing a child.
We were told by Storm advisers that there was some risk but this message was hardly given credence in the face to face meetings and it was more a matter of downplaying any risk with adamant statements of, "It is safe."  After all even in the recent newspaper articles the founders claimed it was a conservative approach.
When one asked questions - for example after reading the 105+ page statement of advice (which is very hard to follow and has no personal details besides how much you are borrowing) more graphs were displayed on a large screen and the adviser just raved on about how the market goes up and down, etc.
We knew there was risk with the market dropping but with promises that they would get us out before we lost a significant amount we thought we were covered.  Obviously they did not and now there is a huge mortgage and a few thousand still in the market.
We were sold lies and yes blocked from getting out.  My adviser actually stated that there was no way the market was going to get to 1,000 points higher than it is now.  Every Storm client I know had huge margin loans; everyone was sold down and many still owing hundreds of thousands.
Everyone who was stormified that I know was in terrible shape when the market hit 4,500 (and now it is hovering at 3,500).
We will never retire unless our pittance in the market builds up enough to pay off the mortgage.  We take responsibility for being taken in by slick sales techniques and while their was religioug zeal - called a clut by an ex-ten year employee there, never heard anything spiritual nor Christian from Cassimatis.
:evilburn::evilburn:


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## daisy (18 January 2009)

The continuing thread throughout all of these posts is how people were blocked from trying to get out when they started to become uneasy about the situation. I'm not a lawyer but I would imagine that this would be one of the greatest strengths of any class action and should be documented.


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## bunyip (18 January 2009)

tonzo said:


> Hi a newbie here.  We were with storm for about four years we are realtively youthful and invested proceeds from our first house sale after the 1st big boom in brissy.  They did give us the big sell for sure but as has been mentioned here in a boom it is a reasonable risk.  Well we got out in late july with a small profit of about forty thousand after four years well down from november the previous year.  But when at our previous advice session i asked about the likliehood of a margin call they said the market would have to drop 35% to get a margin call something they said had happened only 2 or 3 times (cant remember exactly).  Well it has since dropped well below that.  However they did inform us of the risk and i would religiously check my portfolios every day via the challenger website.  Once the volatility of the sharemarket got to around 3or 4% with it going up and down this much on a given day i decided that was too much risk and volatility for me and we got out.  They didnt like it and dragged their feet about it to which due to the volatility cost us 13000.  We are now back in property (owner occupier).  My point however is that being in the shaer market is a risk and even if you are in a managed fund if you dont keep an eye on it youreslf than you are a fool.  People can always make their own decisions.  We were intending to be long term so accepted the risk but the daily volatility just made me too nervous, would love to say that i saw it coming but it was just about our individula situation.




Well done for keeping an eye on your portfolio and getting out when you did, despite Storm's attempts to dissuade you. If others had done the same thing they wouldn't have been stormified. What's interesting is that you did in fact get out, whereas some are saying that Storm blocked them from getting out.

I accept that youth and inexperience were the main factors in some of the younger Storm clients getting clobbered.
But the older investors who were burnt should have known better than to take such risks. They have short memories if they've forgotten the crash of 1987 and the havoc it wrought on the finances of so many people. They were naive if they ignored the possibility of it happening again. 

I've attached a chart showing both the 87 crash and the current crash. 
You'll see that the 87 crash was much more severe than this one in terms of how fast the market collapsed.
The current crash has taken a full year to drag the market from its peak to current levels. Anyone who kept a close eye on their portfolio and on the general market would surely have had plenty of time to get out before they were slaughtered, just as tonzo did.


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## sqwark7600 (18 January 2009)

This is what I have:

Step #1 Calculate your personal balance sheet.
Step #2 If Step #1 results in a negative outcome you can't live with; bankruptcy is your remaining legal option. 
Step #3 If Step #1 results in an outcome you can live with liquidate everything that you can live without.
Step #4 During the preceding Steps make your holistic health your number one priority. 
Step #5 Once stabilised go after those that caused this with a vengeance. You have many covenants and powerful regulations crying out to lend a hand. Do it with a consolidated class action.
Step #6 Communicate with your fellow Storm victims.

At each step seek advice as there are a multitude of organizations and agencies waiting to provide gratis help.

Can anyone add or insert a step or two. If you are a specialist please contribute and give some guidance or direction on your Step specialisation. 

:drink:


----------



## Solly (18 January 2009)

Julia said:


> Thank you for your response, Solly.   I'm glad for you that your life is so good.  Undoubtedly my belief that really wealthy people don't boast about their wealth is old fashioned and quite silly.
> 
> Yep, nothing like a little salt in the wound, is there!
> 
> ...




Julia

Re-read what I said, 
I am a very wealthy rich person. I have the ability chose where I live, where I travel, with whom I associate. I live in places that some would say are mansions, I travel in quality cars, enjoy flying in jets and travelling in boats & ships. I do all that is possible to ensure I possess great health and I am very very happy. I can look out over the sea or look towards the beautiful hinterland while having a fine wine or a good cold beer. I enjoy the company of a close circle of people.

Is this any different to you, You have shelter, probably a home that most people in the world could only ever dream of living in. You are literate, connected the internet, probably tech savvy and educated. You are free to make your own choices in your life, your daily actions are not scrutinised, your neighborhood is not subject to external threats. Your country is strong and secure. You probably drive in roadworthy cars that have air bags, ABS, multiple safety features. Have you ever flown, travelled in a boat or ship. Have you ever been to the beach or mountains...... Then you too are a very wealthy and rich person.


I'm not rubbing salt into any wounds, I'm calling it as it is. Life's tough, it isn't fair. People signed on the line, it's up to them to get out of the mess and to do whatever it takes to improve their position. If some one holds out a hand for assistance I always offer help, guidance and direction. Like others in the past did for me. I don't believe in karma, fortune tellers, tarot card readers, I only deal in facts. Cause and effect, action and reaction and as many other laws of physics that are applicable.

To all those affected by this event, start now, don't delay, don't go under, fight till your life is better, don't ever entertain the alternative for one second. The gloves are off now.


----------



## Garpal Gumnut (18 January 2009)

Solly said:


> Julia
> 
> Re-read what I said,
> 
> ...




And into the arms of another Financial Planner peddling the same old line, cheap american positivism, you betcha, YOU can get out of this folx.

These unfortunate people need to 

Sue those with the biggest pockets.
Crucify ASIC
Crucify the Financial Planners Association which from the Fin Review had a Director of Storm on the Review Panel until a few weeks ago.
Get your State and Federal members of Parliament to do the job they were elected to do.

And Never, Ever, Trust your money to a Financial Planner.

gg


----------



## eieio (18 January 2009)

Glue said:


> Does anyone have any idea who to contact now storm is really dead in the water. We have only lost fees, a lot of tho, in the last month. What is the best way to learn about investing without an fp. We are beginners.




It's easy. You read books on investing...lots of them. You do your research on the Web. You attend stock exchange seminars if you are a masochist. In other words, do your own research and control your own destiny!


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## Solly (18 January 2009)

Garpal Gumnut said:


> And into the arms of another Financial Planner peddling the same old line, cheap american positivism, you betcha, YOU can get out of this folx.
> 
> These unfortunate people need to
> 
> ...




gg

Do you know what the relationship of the previous non exec directors 

Tom Meakin, Peter Hutley, Stuart Nelson & Geoff Williams, 

was to the Cassimatis' ?


----------



## Julia (18 January 2009)

sqwark7600 said:


> This is what I have:
> 
> Step #1 Calculate your personal balance sheet.
> Step #2 If Step #1 results in a negative outcome you can't live with; bankruptcy is your remaining legal option.
> ...



Sqwark, those are very useful steps.  All I'd add would be for individuals to get their own legal advice, as separate from participating in any class action, as there could be personal and individual circumstances which a good lawyer can turn to the client's advantage.   

Most lawyers will agree to a set fee for a brief initial consultation in which they can advise you if it's worth proceeding.

However, if a Storm client is seemingly now broke, the idea of taking on legal fees may seem unacceptable.  In that case, maybe investigate Legal Aid.  I'm not sure what the current criteria for accessing this are.

In most places there is also a community legal service in which a roster of local lawyers do free consultations once a week or so at a community headquarters.  A phone call to your local Neighbourhood Centre or Court House would probably provide details of this.


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## shibby (18 January 2009)

No one else seems to have mentioned any thing similar to my particular introduction to Storm so I thought I would introduce a different slant.  I was getting close to 60 and had been working all my life - so hard that I had reached exhaustion.  I wanted to retire and smell the roses so about a  year before retirement I went to a recommended financial advisor - just a little 2 man band (re phrase I man 1 woman band) very impressed quite conservative. So I sold my house in Sydney went to country NSW bought a nice house and put the balance in Super and that is how I continued for the next couple of years.  I started to feel physically better and thought this is great, no desire for riches just a comfortable life. Grand children started to come fast and furious and I was reasonably contented with my lot.  Then my conservative FA started talking about this whole new idea of securing your financial future nothing about Storm I had never been to a Storm Office I was seeing the FA firstly Chatswood then they moved to Artarmon and then to North Sydney.  Of course that move was to be closer to Storm.  I continued to see my FA in their office not Storm's office as I had no idea there was any sort of relationship.  Then I found out that their clearical staff were employed by Storm then the Nth Sydney office disappeared and everything is now taking place in a sky scraper.  Yes I should have known better but my achiles heel was that I wanted to help financially with my grand children - I wanted them to have a good education and for that I was willing to pay.  I have in the last week found out that of my approximate $80000 paid to storm my FA recieved half (I have been told by I think a reliable source) who knows? and I am only one client. I now wonder just what  else my FA received from Storm was I just part of a package.  Look I don't blame any one but me I went into it with my eyes wide open but I was assured/and believed every thing I was told as I had years of a relationship with this person.  But what I am angry about is the following I RANG & RANG requesting to get out saying I do not want to loose my house and I was told  a) it would not happen  b)  and then when I was concerned that Storm will fold  I was told that they have insurance and  c) not to worry you will always have me behind you thats my FA talking. And this is what I am angry about where in the hell are they we have all been left with none of the promised help and no advice I am not a candidate for any other FAdvisor as I have nothing left to advise on. My Macquarie Margin Loan is OK as I paid 12 months in advance and it has 5 months to run and the cash and the debt are approx the same so no debt there thank God The money in Macquarie is earning 3.5% not enough to pay the $3000 a month mtge on my house. What I was told by my FA was that he/she bailed out into cash as he/she could do that. Where as if I bailed it would be much harder to get back in - I have no email records of my requests and no letters just the telephone records of copies I have down loaded from my Telstra accnt (its easier on line as you can sort into numerical order of the number called) and let me say there are a lot of calls. So the big question here is - was my little conservative FA sold a bag of goods by Storm or was it just pure greed. Leaving out of the question of course my greed.


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## daisy (19 January 2009)

Shibby,
Before Storm tried to float, apparently they went around Australia buying up small FAs, presumably to make their float more attractive.
From what you are saying it sounds as if your FA was one of those purchased by Storm. Which of course means they were now only offering Storm's product.
If that is the case, I would have thought it mandatory that they advised you of the change in their status from giving a broad based and a more "independant" advice to just plugging one product.


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## shibby (19 January 2009)

daisy said:


> Shibby,
> Before Storm tried to float, apparently they went around Australia buying up small FAs, presumably to make their float more attractive.
> From what you are saying it sounds as if your FA was one of those purchased by Storm. Which of course means they were now only offering Storm's product.
> If that is the case, I would have thought it mandatory that they advised you of the change in their status from giving a broad based and a more "independant" advice to just plugging one product.




Daisy thank you for that information. Therefore that timing is of the essence I need to find out just when they became storm yet I am a little confused as I know my FA still has other clients who are not with storm - maybe that was part of the agreement that they signed. *I refuse to capitalise the word storm*.


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## Solly (19 January 2009)

shibby said:


> ................ And this is what I am angry about where in the hell are they we have all been left with none of the promised help and no advice I am not a candidate for any other FAdvisor as I have nothing left to advise on. ..............




shibby, have you sort any legal advice or direction?


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## Solly (19 January 2009)

pilots said:


> Top post, I would add, set your self a budget, and live with in it.




Excellent addition, Budgeting is just disipline. If you can't pay for it or service the debt then go with out. Simple. Also if you do get into position where you are having trouble meeting commitments, go as soon as possible to the person/business you woe the money. Many seem to be afraid to do this, don't ignore the debt, don't let it build. You may be presently surprised how helpful some people/businesses are in these circumstances. Everything is flexible/negotible to some extent, just give it a go.


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## Solly (19 January 2009)

A balanced article from Michael West

*Storm founder tries again*

http://business.smh.com.au/business/storm-founder-tries-again-20090119-7k2p.html


*Cassimatises try again*

"Ironically, ASIC searches reveal that Ignite, a company associated with Emmanuel Cassimatis, has applied for a financial adviser's licence with the regulator. The approval is ''pending''. Ignite is owned by Emmanuel and Julie Cassimatis and earned royalties from Storm for providing software services.  

The Ignite application was made in late November last year, just before Commonwealth Bank began contacting Storm clients to advise them of margin calls against their positions and selling down its Storm-branded funds. (Challenger had begun selling in October)."


This is going to end well, I feel I am developing Tourette's .......:swear:


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## Smiley (19 January 2009)

Shibby, I am not quite sure why you are holding on to your margin loan. Macquarie can refund the fixed interest - minus a break fee.  I am doing that.  If you do not look at getting back in the market in the next couple months it is the thing to do. Phone their 1800 number adn talk to investments - they can fax or email you the necessary forms.


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## daisy (19 January 2009)

Solly said:


> A balanced article from Michael West
> 
> *Storm founder tries again*
> 
> ...




After reading this article my reservations about the success of litigation etc have diminished considerably. GO FOR IT!!


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## sqwark7600 (19 January 2009)

Latest update:

Step #1 Wind up all margin lending accounts, especially if your rate of return is below your interest accrual. 
Step #2 Calculate your personal balance sheet.
Step #3 If Step #2 results in a negative outcome you can't live with; bankruptcy is your remaining legal option. 
Step #4 If Step #2 results in an outcome you can live with liquidate everything that you can live without.
Step #5 During the preceding Steps make your holistic health your number one priority. If your loved one goes quiet or demonstrates a personality change watch them like a hawk. Suicide is a real danger.
Step #6 Set yourself a budget and live within it
Step #7 Spend a lot of time on collating your Storm activities. Write every memory item up as a diary note and find and file every piece of paper, note, brochure etc. you have from Storm, your FP,  the bankers, margin lender, responsible entity or fund manager. 
Step #8 Once stabilised go after those that caused this with a vengeance. You have many covenants and powerful regulations crying out to lend a hand. Do it with a consolidated class action.
Step #9 Don’t underestimate the power of networking. Communicate with your fellow Storm victims, join any group that they have set up to discuss the problem and their strategy.

At each step seek advice as there are a multitude of organizations and agencies waiting to provide gratis help.
Can anyone add or insert a step or two. If you are a specialist please contribute and give some guidance or direction on your Step specialisation.
:sheep:


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## hansella (19 January 2009)

Hi Everybody,

first time on this Aussie Stock Forum, and i wish i had all this info a couple of years ago. Luckily in the end i have just enough in my portfolio to cover my loans. Sorry about all those who are in dire straits.
I guess i knew the risks involved but never thought it would come to this. 
Some of the things that gripe me is that the Storm said the LVR should never reach more than 65-70%  for me. Which was fine until the GFC and it ended up at 95%. Storm should have stuck to their guns (and i should have been more aggressive) that once it started going over the 70%, i should have sold some or all of the shares (i guess i thought they knew what thy were doing).

The other thing is lack of what is going on. Thanks to all those messages about what to do and who to call (ABN checklist for Storm clients was very helpful). I got a letter from Storm on Friday saying they were working to resolve the issues (this was 2 days after the Administrator took over).

The 2 things i can take from this episode is :
1) never use a finanicial company as they only think about themselves. 
2) never use your house as equity


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## shibby (19 January 2009)

Smiley said:


> Shibby, I am not quite sure why you are holding on to your margin loan. Macquarie can refund the fixed interest - minus a break fee.  I am doing that.  If you do not look at getting back in the market in the next couple months it is the thing to do. Phone their 1800 number adn talk to investments - they can fax or email you the necessary forms.




I actually rang on Thursday and asked 3 questions 
1. How much will you penalise me if I pay out my loan early
2. How much pre paid interest will be refunded
3. Why when I have $890,000 in my cmt accnt and owe you $860,000
why have I only $4000 available (that was Thursday) now $3000 gone for mtge so down to $1000.  
I know I am dumb but I just couldn't get my mind around the figures - of why only $4000.  The girl on Thursday mentioned Challener so i rang Challenger - no more shares I had been completely paid out. Then I thought maybe that difference was sitting in my accnt as that is probably my pre paid interest and of course I can not use it. 
So this morning I rang spurred on by the fact that was the avenue to pursue.
for the day.
Bottom line - it is my money but the gentleman I spoke to said they will release me the $30,000 whn I pay back the loan and only then. I then said I need that $30,000 now to live on and pay my mtge his reply pay back the margin loan and you can have your $30,000 - My reply you are black mailing me  his reply - he was offended and will speak to his manager.
Been in touch with the ombudsman who has told me what avenue to pursue I want that money I do not want to be black mailed I was to examine the payout figure I want to examine my penalty charge as what ever else they up to.
My rant for the day.


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## shibby (19 January 2009)

I forgot to mention I have had no information emailed to me from Masquarie and when I rang today they had no record of me ringing nor had the woman even updated my details with my email address.
shibby


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## daisy (19 January 2009)

Shibby,
Re: the person you spoke to at Maquarie. I've learnt whenever I have a problem with a business to ask for and make a note of the full name of the person I spoke to. It serves 2 purposes. The first is it makes them personally aware that they can be in trouble with their management if they give misinformation or don't follow correct procedure. The second is that when you contact the business in future, by supplying the full name of the person you spoke to last time you can prove that this isn't your first attempt at whatever it is you are trying to do. I'm probably telling you something you already know....
Good luck with all of this.


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## Smiley (19 January 2009)

Sibby - phone Macquarie again and give them your email and ask them to email you a form to break the fixed loan and another form to authorise a refund on the prepaid interest.  Do you have a cash management account with Macquarie as they need somewhere to deposit any refund?  If you get no joy with the person you speak with, ask to talk to their manager.  Macquarie is getting rid of all margin loans by the end of June, so you would think the more they can clear up now the better.


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## cuttlefish (19 January 2009)

Julia said:


> Guilt towards their pets???



It might seem trite  - but a lot of elderly people are very attached to their pets and would feel a deep sense of responsibility towards them - particularly if they live on their own (not just elderly people either ) and the idea of not being able to afford pet food/care is just one of the many things they may be facing if in a difficult situation.   For example if someone is living in a house but is now forced to move to rental accomodation or even publicly funded accomodation they may not be allowed to keep pets in that accomodation.




> _* Cuttlefish quote - Help them to understand that, regardless of the circumstances that led to the situation, they shouldn't blame themselves or feel guilty and that they are forgiven. Help them to understand that their intentions were right, they were only trying to do the best for their family and loved ones
> 
> 
> 
> ...




When I say they shouldn't blame themselves that doesn't mean that they shouldn't accept responsibility for their contribution to the situation.  Its possible to accept responsibility for something without blaming yourself/beating youself up and allowing yourself to be destroyed by guilt.  By not accepting some responsibility and blaming it all on others they are not facing up to the situation either imo.



			
				Julia said:
			
		

> Are you suggesting ASF members should consider offering financial support?




No sorry I was probably a bit unclear - all of my comments in the post were directed at either individuals in the situation of being affected by Storm, or their friends/helpers.  As I understand it some of the people posting on here are not actually affected directly but are helping people they know that are affected - or alternately are affected but are also helping friends/parents etc. that may be going through a harder time than them and aren't posting on here.





> Agree that walking on the beach with a dog is a great experience.
> Doesn't put a roof over someone's head, however.




No but it helps to put money into perspective.  We are lucky in this country that we have a welfare system of pensions and unemployment benefits for people that are in a situation where they don't have an income of their own, and that will provide enough to fund some sort of accomodation - so nobody is going to go without a roof over their heads as far as I can see.  If they felt their happiness was strongly tied to their financial success and 'social status' then its helpful to realise and be aware that happiness can be obtained without either of these things.


In relation to practical suggestions regarding their financial situation, my view is that once people overcome the emotional impact and find the mindset to put the past behind them and move fowards, most are savvy enough to come to practical solutions to their situations - but getting over that first emotional stage and finding the will to move forward from a bad experience can be one of the most difficult steps.

But I'll continue to read the thread and if there is anything practical I think I can suggest that hasn't been mentioned already I'll put it forward.


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## sails (19 January 2009)

Smiley said:


> ...  Macquarie is getting rid of all margin loans by the end of June, so you would think the more they can clear up now the better.




I appears that Leveraged Equities have purchased Mac Margin Lending.  Sorry, don't have a link but have seen a letter dated 13th Jan, 2009.


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## donteventryit (19 January 2009)

sails said:


> I appears that Leveraged Equities have purchased Mac Margin Lending.  Sorry, don't have a link but have seen a letter dated 13th Jan, 2009.




Here you go. http://www.bendigobank.com.au/about_us/news/news_dbdetail.asp?nID=536

"Bendigo and Adelaide Bank’s Chief Executive – Partner Advised Banking, Jamie McPhee, said the Bank was delighted to strengthen the existing relationship between Leveraged Equities and Macquarie Private Wealth. "


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## hansella (19 January 2009)

Has anybody spoken to Macquarie bank about paying out there Margin Loan ?

They told me i would have to pay breakout costs for the fixed loan. I'm only paying off early (apart from Storm debacle) because they are no longer doing Margin Lending. Is this the same response other people got, or were you able to get the break costs waivered ?


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## Julia (19 January 2009)

cuttlefish said:


> It might seem trite  - but a lot of elderly people are very attached to their pets and would feel a deep sense of responsibility towards them - particularly if they live on their own (not just elderly people either ) and the idea of not being able to afford pet food/care is just one of the many things they may be facing if in a difficult situation.



Not trite at all.  But as I said earlier, I'd go without something myself to care for my dog if necessary.  



> For example if someone is living in a house but is now forced to move to rental accomodation or even publicly funded accomodation they may not be allowed to keep pets in that accomodation.



Yes, you're right, that's a very good point.  Would be heartbreaking.  I so hope that doesn't happen for any of them.



> No but it helps to put money into perspective.  We are lucky in this country that we have a welfare system of pensions and unemployment benefits for people that are in a situation where they don't have an income of their own, and that will provide enough to fund some sort of accomodation - so nobody is going to go without a roof over their heads as far as I can see.



Cuttlefish, a single person on Newstart (the dole) gets about $440 per fortnight, plus a bit extra rent allowance if renting.   That would about cover rent on a very basic flat in most places.   Very difficult then to run a car, buy food, cover insurance and medical expenses etc etc.
A pension is better by about $140 p/f.
I'm not trying to make anyone feel more depressed, but the reality of losing all one's assets is pretty grim.

But yes, focusing on any still available source of happiness like a walk with the dog on the beach, can only be helpful.




> If they felt their happiness was strongly tied to their financial success and 'social status' then its helpful to realise and be aware that happiness can be obtained without either of these things.



Sure.  I guess the concept that happiness was identified by either of those factors is something I don't understand.  The purpose of money, imo, is to provide security and choices, but I don't get the acquisition of money for its own sake or to demonstrate 'success'.


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## Julia (19 January 2009)

Solly said:


> A balanced article from Michael West



There was also a good article in Saturday's "Courier Mail" by Anthony Marx.
Can't find an e-version of it so have emailed Mr Marx for this so it can be posted here.

I've also asked both Michael West and Anthony Marx if they can investigate what sort of risk profiling was done for clients, what sort of Investment Strategy was prepared, what explanation of leverage in a falling market etc, since none of the investors have responded to these questions on this thread.

Would also like to know the level of indemnity insurance compared to losses.


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## awg (19 January 2009)

One thing is apparent from previous posts.

I learned this myself previously.

As much business as possible should be conducted by receipted email.

If you have a phone call with someone at Macquarie, FP, ( or anywhere), when you have finished, send them a receipted email, detailing the conversation that just took place.

Issue clear instructions or requests via receipted email

You will have a record of the names, emails, communications and decisions of each person you deal with.

Save them in a folder, and even print them out. 

Keeps them on their toes, I can assure you.

I have had several adverse situations rectified by this method.

I am always very courteous in my communications, and try to get them onside with me. This is not easy, one must be patient. If they realise you are businesslike, you will usually be dealt with by a customer service manager

Having worked both sides, I know if you offend people in an organisation, they wont want to help you.

Having said that, I doubt you will get much joy in the present situation, as it is now a legal /policy matter


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## sails (19 January 2009)

Julia said:


> ... a single person on Newstart (the dole) gets about $440 per fortnight, plus a bit extra rent allowance if renting.   That would about cover rent on a very basic flat in most places.   Very difficult then to run a car, buy food, cover insurance and medical expenses etc etc.
> A pension is better by about $140 p/f.
> I'm not trying to make anyone feel more depressed, but the reality of losing all one's assets is pretty grim...




It is pretty grim outlook for sure.  What worries me is that it can drive people to desperation and subsequently become targets for a new batch of rip-off, NLP style marketers to offer them hope.  With statements like - "if only you had been with us..."

Was given some good advice many years ago - always ask the company/person trying to sell their wares, "what's in it for them?"  "How are they making their money?" It sometimes helps to see more clearly if there is a conflict of interest.    

Take care, everyone...


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## awg (19 January 2009)

Julia said:


> Not trite at all.  But as I said earlier, I'd go without something myself to care for my dog if necessary.
> 
> 
> Yes, you're right, that's a very good point.  Would be heartbreaking.  I so hope that doesn't happen for any of them.




Unfortunately Julia, many Storm customers wont have that option, if they are broke.

Many rental properties and Caravan parks wont accept pets.

A big dog like a GS would eat $30 p week at least surely?

When they need Vet treatment, you are stuffed.

I know a couple of people who I advised to have their old animals put down, rather than spend several thousand on operations, which they didnt have, but they couldnt do it, cause their pets are precious to them


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## Julia (19 January 2009)

Herewith the article referred to earlier by Anthony Marx:



> Courier Mail, Edition 1 - First with the news
> SAT 17 JAN 2009, Page 072
> 
> 
> ...


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## cuttlefish (19 January 2009)

Julia said:


> Cuttlefish, a single person on Newstart (the dole) gets about $440 per fortnight, plus a bit extra rent allowance if renting.   That would about cover rent on a very basic flat in most places.   Very difficult then to run a car, buy food, cover insurance and medical expenses etc etc.
> A pension is better by about $140 p/f.
> I'm not trying to make anyone feel more depressed, but the reality of losing all one's assets is pretty grim.




Don't worry I'm not trying to trivialise the situation - it would be extremely grim to go from financial self sufficiency to that scenario - but I am pointing out that we are lucky in Australia that there is a basic quality of life available to everybody via these mechanisms - which is far different to many other countries in the world - and something many millions of people around the world would covet.   Our health system is also not great, but its there and accessible to everyone to more or less of an extent and far superior to many other locations in the world.

So to those that are affected - they may have to adjust their lifestyle - but if they focus on and understand the basic elements of their lifestyle that are important to their happiness/contentment they will be able to put things into better perspective.

Its a cliche - but health (even if not 100%, what health we have is to be appreciated), friends and family, and our personal freedoms are extremely 'valuable' assets and far more important than money.  

Sometimes in times of crisis people are so desperate and depressed that they lose perspective and act in a way that risks losing these far more important 'assets' due to their sense of hopelessness.


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## basilio (19 January 2009)

One thing that concerns me deeply is the commentary that ASIC allegedly investigated Storm and gave it a clean bill of health as late as December last year.

This seems inconceivable unless  they were using the most narrow definition of "health" possible. Why have a regulator who won't take action?



> B]
> ASIC gave `clean bill of health' to Storm[/B]
> Michael West
> January 17, 2009
> ...




http://business.theage.com.au/business/asic-gave-clean-bill-of-health-to-storm-20090117-7jc4.html


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## daisy (19 January 2009)

This is a bit that I found extremely interesting regarding complaints and conduct reviews
Weeked Financial Review
"Sydney based Storm Director Peter Hutley- .....even held one of the 11 positions on the FPA's conduct review commission, which oversees its complaints and disceplanary process. He stood down this month"


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## Sir Osisofliver (19 January 2009)

Ok Practical solutions right?

Sir O's guide to financial independence  Part 1.

1) Goals.

Identify goals that are important to you. At this stage I'd keep them as simple as possible. Eg Keep the house - not a simple goal - nor is it quantifiable. Try  - Meet the interest payments. At least you can measure the goal.  

2) Budgeting.

It's amazing how many people don't know the first thing about financial management. The first thing about financial management is budgeting. In it's simplest form that is what comes in versus what goes out.  Some people think they know what budgeting is because they know they have enough money to pay their expenses.  This ISN'T budgeting - that is called LIVING HAND TO MOUTH. I'd treat you differently if you DIDN'T start with a huge pile of debt that needs to be serviced, but for this purpose I'm going to assume you fall into that catagory.  If your expenses are higher than your income you need to either a) increase your income or b) reduce your expenses.

Income.
Work out your income.  Can this be improved? Do you need a goal to try and improve your income? You should think outside the box here. If you have a house, you may have a room not being used - rent it out as student accomodation, grow mango's in the backyard and sell them to your friends, think of ways to improve your income because there are only so many expenses you can cut.

Expenses.
Work out all your expenses. All expenses fall into one of three catcgories.  Vital Costs, Necessary Costs, Lifestyle costs.  

Vital costs are things like 10% investment monies, Electricity, Food, Rates, Mortgage etc etc

Necessary costs are things like Insurance, Petrol, Telephone, Clothing

Lifestyle costs are things like holidays, entertainment, gifts, gym fees etc etc.

If your expenses are larger than your income, start cutting your lifestyle expenses first.

If expenses are _still_ larger than income, look at ways to cut necessary costs. Sell your car (if you don't need it), tell everyone that you know you will no longer be calling them and that they will have to call you. Be brutal if it's the only way you will keep the house.

If expenses are STILL higher than income... you need to downsize your vital expenses.  This DOES NOT include the 10% of your income that you budget for investment. (This money right now will be used to pay your debt off in the near future. Longer term you will use it to invest *wisely* to increase your income). You will need to search for ways to reduce your vital costs. This may mean downsizing your home, or other extreme measures. 

If you STILL cannot pay your expenses even after factoring in all the above...you will need to investigate bankruptcy as an option.

Part 2 coming when I get around to it.

Sir O


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## sqwark7600 (19 January 2009)

The latest update-Some practical suggestions.

Step #1 Wind up all margin lending accounts, especially if your interest payment rate is greater than your interest accrual rate. If you have trouble with your bank use the services on the Banking and Financial Ombudsman Service~FOS. Their site is at: 
http://www.fos.org.au/centric/home_page.jsp

Step #2 Calculate your personal balance sheet. There are some useful calculators on this site: 
http://www.nt.gov.au/business/resources.cfm?resourcetypeid=1

Step #3 If Step #2 results in a negative outcome you can't live with, voluntary bankruptcy is a legal government regulated option. I understand that if you have a super fund that it remains intact, you can earn a living, keep a modest car and there are ways of restructuring to keep your house. You need to suffer it for 3 years and lose your credit rating for 7 years. The Insolvency and Trustee Service Australia ~ITSA is the government agency responsible for the administration and regulation of the personal insolvency system in Australia. 
Don’t be forced into bankruptcy check out the consequences of voluntary bankruptcy. Make sure you restructure as necessary prior to declaration. ITSA is on:
http://www.itsa.gov.au/
and there is a lot of information on:
http://www.fredappleton.com.au

Step #4 If Step #2 results in an outcome you can live with I would liquidate everything that you can live without. I’d think of transferring any non-liquid investments eg. property syndicates or locked mutual funds into your super.

Step #5 Make your holistic health your number one priority. If your loved-one goes quiet or demonstrates a personality change, watch them like a hawk. Suicide is a real danger; stress is carcinogenic. There are plethora of free counselling services available.

Step #6 Set yourself a budget and live within it. There is a calculator on:
http://www.nt.gov.au/business/resources.cfm?resourcetypeid=1

Step #7 Identify and activate new potential income sources. 

Step #8 If your house is under threat maybe you can get a relative to buy you out at a reasonable price and rent from them, with the option to buy back in. Maybe move in with someone who needs care.

Step #9 Spend a lot of time on collating your Storm activities. Write every memory item up as a diary note and find and file every piece of paper, note, brochure etc. you have from Storm, your FP,  the bankers, margin lender, responsible entity or fund manager. 

Step #10 Every time you speak to someone on the phone related to your Storm situation take their full name and also request a reference number (some companies do keep phone logs). Write up a diary note detailing the conversation.

Step #11 Once you and yours are stabilised go after those that caused this with a vengeance. You have many covenants and powerful regulations crying out to lend a hand. Do it with a consolidated class action. For past precedents start with:
http://www.superreview.com.au/Article.aspx?ArticleID=218427
http://www.investordaily.com/cps/rde/xchg/id/archive/IFA0000000160.xml?rdeCOQ=SID-3F579BCE-4C8B1C13

Step #12 Don’t underestimate the power of networking. Communicate with your fellow Storm victims, join any group that they have set up to discuss the problem and their strategy.

At each step seek advice as there are a multitude of organizations and agencies waiting to provide gratis help.
Can anyone add or insert a step or two. If you are a specialist please contribute and give some guidance or direction on your Step specialisation.
:sheep:


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## Julia (19 January 2009)

awg said:


> Unfortunately Julia, many Storm customers wont have that option, if they are broke.
> 
> Many rental properties and Caravan parks wont accept pets.



Agreed.  But some do.



> A big dog like a GS would eat $30 p week at least surely?



This is the second time I've been asked the cost of keeping my dog!!!  
As previously replied, she costs about $15 per week and that includes 
best available flea/worm etc treatment plus annual vet visit for vaccination etc.   



> When they need Vet treatment, you are stuffed.



No.   Vets will accept your paying off bills.  Charities will help you with food, electricity, rent to offset cost of vet bills.  It's a matter of priorities.




> I know a couple of people who I advised to have their old animals put down, rather than spend several thousand on operations, which they didnt have, but they couldnt do it, cause their pets are precious to them



I completely understand the preciousness of pets.  However, there comes a time for all our much loved pets when we have to be realistic about their state of health and potential remaining life span.  Hardest thing in the world to take that beloved dog or cat to the vet for that final time.


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## Julia (19 January 2009)

sqwark7600 said:


> The latest update-Some practical suggestions.
> 
> Step #1 Wind up all margin lending accounts, especially if your interest payment rate is greater than your interest accrual rate. If you have trouble with your bank use the services on the Banking and Financial Ombudsman Service~FOS. Their site is at:
> http://www.fos.org.au/centric/home_page.jsp
> ...




Sqwark, I reckon anyone following your steps above will immediately feel better.  Exactly what I had in mind when I suggested practical steps would be so much more useful than pretty sounding words.  Great advice.

Sir O:  I guess you're right in suggesting not everyone employs basic budgeting.   It's pretty sad when you need to spell out stuff that should have been understood as a 12 year old.


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## Slight Edge (20 January 2009)

Many clients are scared and alone. A few are beginning to accept the gravity of their situations and doing so is the first step to their healing, but many don’t know what their situation is. They are conflicted by the stories of their advisers and terrified about the reported news and the grapevine has only perpetuated the problem. 

There are some fundamental and dangerous flaws with the system and I regret that knowing this, like most revelations, is often too little too late.
Storm built an ethos and ideology that every person had the right to be as wealthy as they wanted to be. Their whole model was about “Optimisation” and the more of your financial function you “gave” to Storm the wealthier you would become. Discussions about Cars, Holidays, Expenditure, buying Property, Other investments were all dealt with at Store level and often you’d have been discouraged from straying from the course. To the point, as I’m learning now that Clients felt intimidated and embarrassed to share their true positions for fear of being made look stupid, and were gunned down when attempting to take money out of the investments but suffer some high persuasion for funds to enter the investment.

If a Storm client didn’t complete the steps they were often portrayed to be “under achieving” and service levels, I’m told, dropped for the more difficult clients who couldn’t get their heads around the increased gearing. The responsibility for becoming wealthy depended solely on whether or not YOU allowed Storm a prescriptive right to deal with your finances and dictate the sale of properties, increased borrowing, cashing in of Superannuations... You, the client had the right to be as wealthy as you WANTED to be. No matter the cost.

What I’ve come to see now, is that this defies basic physics. It is as asinine as saying “You can fly – if you really really want to”. Physics would dictate that you can flap your arms as hard as you like and never will you maintain flight. The idea of being as wealthy as you want to be should always have been “ All people have the right to be as wealthy as they can afford to be”. 

In hindsight, I’m learning that many people share my observation. In explaining this, I must make two points extremely clear – in my professional experience, Index investment is the most successful long term investment strategy (particularly for inexperienced clients with time on their side) and I feel a much more stable and dependable methodology than an array of managed funds, direct stocks and so on. The second point is that “Borrowing to Invest” is fine...for people to whom it applies. That is, the idea of borrowing to invest in an Index fund can be a superb strategy to create long term wealth for those who can afford it – and affordability, like gravity, is a grounding force.

To see clients now, with Margin Lending interest in the tens of thousands, along with Equity Loan (against their properties) interest in the same vein means that typical Mum and Dad’s with perhaps 20k surplus income to consider for investment have now got interest bills that total nearly 100k, or 5 times their actual surplus...all of a sudden, we have a problem.

The Storm process talked about using equity to invest, because it was a much more stable idea to invest bulk funds sooner, thus allowing your stored capital to work for you; which in theory poses no problem. Home Equity is the cheapest available in the market (often 2%+ cheaper than Margin Lending) and for the most part while the repayments are being met, the value of the investment you make has no bearing on the security of your home. The Bank accepts that you are using the funds for investment purposes and is happy to release that equity for use provided you pay for the use (Interest). 

Many people’s fear that using their home to invest was an unsafe strategy dissipated as they came to understand that as the value of the loan wasn’t linked to the investment, they couldn’t go into a negative equity situation with the bank (as long as interest payments were being met) and as such, couldn’t lose the home in the process. Since the majority of a person’s accumulated wealth was stored in their home and thus, inactive, it made perfect sense to mobilise the equity in a tax deductible method. 

So if we could use Home Equity to invest a large capital amount relatively safely, how did we end up where we were? The Storm “Optimisation” process saw the sum of capital entering from Home Equity Lending – let’s say, for the sake of discussion it’s 400k (From a home valued at 500k – thus 80%) and the client has the capacity to make repayments of 28k pa. With 400k capital entering the market thus, buying a securable asset, new equity was forming. On the 400k Capital (which enters the investment stream as Cash) a client might be able to access a Margin Loan, that is, lending that secures itself against cash and investments instead of property. A Margin Lender is happy to provide lending on the same provisos of serviceability but in general their ability to lend is more concerned with the clients security. In the cases of Cash, a Margin Lender may lend 1 for 1. In the case of Managed Funds, Debt ratios reach a maximum at approx 80-85% which cause a sell down in the investment. Storm negotiated higher sell down points... of 90-95% and this is an issue that we will discuss moving forward. A debt ratio of 85% means the loan is equal to 85% of your secured assets value and you WILL be sold down unless you provide cash to bring you out of the margin so that the Margin Lender isn’t compromised. In a case where a Margin can’t be met, the asset is sold down and the Margin Lender retains the value of their loan.

The Compromise came in the downward negative market which was compounded by the constant ramping up of Margin loans to cover and prepay interest - this helped tip the investment into a negative equity situation sooner. Retirees were funding (I've seen the SOA's) entire years worth of investment servicing with the margin loan - excellent if Markets always go up! These clients couldn't afford to be as wealthy as they were. Sheer physics was against them!

Even Mum and Dads had 4x + on their serviceability. Asked where the greatest gearing was and it wasn't the margin loan, or the equity loan - it was in the gearing of a clients serviceability. These clients weren't stupid, and they WERE NOT greedy -they were introduced to a method of capitalism that made perfect sense (in the way it was presented to them). These people weren't out to make a quick buck or generate unrealistic gains. Don't let sales propoganda step in the way of true client intent. These people became ingrained in a process that spiralled out of control in the last 12 months and the critical decline has cost them.

I know of a client who was a large Margin LEnding client (in excess of 3M margin loan for the last 4 years - of which Colonial would have made their 280k pa+) who was sold down with a Margin LVR of 104%. He owes 150k to the margin lender. When queried, the Margin Lender claims that instruction came from Storm NOT to sell the portfolio - to which he replied chase Storm for the Money... and he said no, he'd pursue the client - when the client asked him what the cash out LVR was, he said 90%, and confirmed that was the contract LVR - and then he agreed that had the client been cashed out at 90%, the margin loan would have been covered and SOME money would be left for the client - but refused to accept the Colonial had breached their obligation under the Margin Loan contract by selling the client out past the LVR. 

This is where I believe the MArgin Lenders are liable - for the deficit on the MArgin loans - but the question to be asked is "how did you get to the margin situation in the first place???"

Those people who think that Storm have done no wrong in the last 12 months are living in a fairy land. There are clients who were so misled in the last 3 months, they still believed that they were going to get back in EVEN though their LVR's were nearly 100%???? the second the clients took money from their CMT's to buy shares, there's every mathematical possibility they'd have gone to margin call instantly? (Max LVR's at 80-90%?)

It wasn't until Storm went into receivership that some gave up on the magic bullet. Their evangelical faith has been most disturbing - to the point I have heard Cassimatis is going to be making an appearance at the Burdekin collection of class-actionists - claiming as a victim, as a client of Storms - and believe it or not, the class actionists are "Pleased" that Manny will finally get a chance to share his side of the story???? So...for half the case he's the plaintiff...and the other half... the defendant?

I am sad that GG and others now form a verhment hatred towards Financial Planners - My Planners team are young, enthusiastic, educated and professional and have been able to navigate us safely through this market downturn under a very competitive fee structure that recognises their abilities. They have presented us with a sound long term investment structure that recognises volatility and deals with it accordingly. 

I'm embarrassed that they operate in an "Industry" and not a "Profession" and that these ex-MLC cowboys who cut their teeth selling life policies door to door by finding nappies on clothes lines - thus an emotional in - (One of Emmanuels favourite stories apparently) to where we are at now.

Don't lose faith people, there are some amazing people out there well equipped to help you out who don't have gold rimmed loos, or frappacino machines - just good honest, ethical advice.

I wish you all well.


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## Solly (20 January 2009)

Slight Edge said:


> ..........
> It wasn't until Storm went into receivership that some gave up on the magic bullet. Their evangelical faith has been most disturbing - to the point I have heard Cassimatis is going to be making an appearance at the Burdekin collection of class-actionists - claiming as a victim, as a client of Storms - and believe it or not, the class actionists are "Pleased" that Manny will finally get a chance to share his side of the story???? So...for half the case he's the plaintiff...and the other half... the defendant? ...




This guy's a class act. A victim as well ? 
I believe it may be a case of "look at what the banks have done to us all".
I am now more eager than ever to see this go to trial. 


Also for some reason it brings to mind this classic line....
"Now, you listen here! He's not the Messiah. He's a very naughty boy! Now, go away!"


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## Solly (20 January 2009)

Another intersting article from Mr West at The Age...

*Storm's founders got $2m*

"STORM Financial Group's founders and a select group of clients were the beneficiaries of cash payments from the business as the beleaguered financial services group was imploding before Christmas.

Storm's receiver, Rob Hutson from KordaMentha, confirmed last night $2 million was paid to Emmanuel and Julie Cassimatis on December 15 in a "dividend". Earlier in December, Commonwealth Bank began notifying Storm clients over breaches on their margin-loan positions.

Storm paid another $650,000 to four clients of the ailing group, also on December 15; payments that were recorded as "financial assistance". About 150 clients have received payments from Storm since the close of the financial year in June."..............

More here;

http://business.theage.com.au/business/storms-founders-got-2m-20090119-7kuw.html


Thank you Michael.


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## daisy (20 January 2009)

Thank you Sqwark and Sir O for so carefully putting these steps together (and providing websites) 
I agree with Julia that just having this step by step list to follow when there is so much confusion around you should help lighten the load. I can think of nothing else to add.

And for all the “smart state” and clownsville comments I would like to say that Queensland in general and Townsville in particular is a beautiful place to live. That’s why the cross border immigration into Q’ld has been massive over the past few years. Outside Brisbane and the SE corner Townsville has had the biggest population increase because it is a wonderful place to live. 

Our Strand which was revitalised some years ago is the most beautiful I’ve ever seen and in that I will include Tahiti and the Caribbean. This is a family town and our previous council excelled themselves in the family friendly design. There is a long winding path which takes you around the foreshore and lots of interesting bits and pieces to look at along the way. Plenty of seats to sit and eat fish and chips and feed the seagulls. A long jetty from which you can fish...

It’s never really cold up here so you don’t need lots of heavy clothes....and unlike Sydney where I grew up nobody really cares about fashion as a status symbol. In fact you can’t tell up here who has money and who hasn’t judging from their clothes. I like that.

All through the year there are festivals the bulk of which are free or next to. There are music clubs held at beer gardens in pubs which are free to be a part of and will welcome you into their community with open arms. You can be there all night and just drink water....I know because I’ve done it. The pubs don’t mind because they do well out of the night as a whole. Because it is an unsophisticated town there are all kinds of clubs you can join. My personal aim is to one day have enough time to join the Orchid Society and either do some voluntary work at our World Vision Shop or at the Aquarium. The Orchid Society have a little stall in the Warrina shopping centre from time to time and they are such nice people...one day...

There are 3 markets on Sundays where you can buy really good quality fruit and vegetables at great prices while wandering around in the sunshine soaking up the atmosphere. And you can buy really cheap plants there as well. 

Queen’s Gardens and Anderson Park and the Palmetum are glorious places to walk through and take your sandwiches as a picnic lunch.
 I could go on for pages but I’m not being paid for this by the tourist information board so I’ll stop now except to say that I live here by choice...


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## Solly (20 January 2009)

daisy said:


> And for all the “smart state” and clownsville comments I would like to say that Queensland in general and Townsville in particular is a beautiful place to live. That’s why the cross border immigration into Q’ld has been massive over the past few years. Outside Brisbane and the SE corner Townsville has had the biggest population increase because it is a wonderful place to live........
> 
> 
> I could go on for pages but I’m not being paid for this by the tourist information board so I’ll stop now except to say that I live here by choice...




Daisy my experience is that the further North you go, the more "interesting" the people become... It's paradise for some and hell for others...but that's just like anywhere..... Now the Deck Bar at Bungalow Bay...well that another story....


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## daisy (20 January 2009)

Solly,There's some "characters' up here that's for sure.
The thing that fascinates me is that of the twenty or so years that I've lived here I've only met a handful of people that grew up here. Most people have come from somewhere else and stayed. 
Thanks for the Michael West posts. I've gone from being fairly pessimistic about this because of the 'caveat empor' to quietly optimistic.


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## Smiley (20 January 2009)

Anyone have a Townsville phone number for the support group? I'm interested in going to hear what people are saying.


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## cuttlefish (20 January 2009)

I read a book once that researched how people behaved when they were lost in the wilderness.   When people began to realise they were lost, a common reaction was to increase their pace - i.e. start to walk faster or even run - trying to find a landmark or point of reference that would help them realign themselves to the position they thought they were on on their map.   This frantic running around trying to figure out where they were tended to burn valuable energy and make them even more lost.

The survivors tended to exhibit one particular trait - that was that instead of wasting energy trying to figure out where they were, they accepted that they were lost and began to re-map their surroundings based on their local frames of reference, and started to adapt to and 'live' in their new surroundings - finding things to keep them warm, building shelter, locating water, food etc.

The ones that didn't, kept racing around, burning more energy, trying to figure out how to 'get back' to where they were - many perishing in environments where there was ample food and water available.

This might seem like a lot of waffle - but one of the most difficult things for the victims of Storm to accept, particularly those in the later stages of life, will be to accept that life has changed and they will not 'get back' financially to where they were.   They need to accept this change and rebuild themselves within their new financial circumstance.

I personally would be backing what Garpal Gumnut has been saying - accept that the money is gone - the legal actions against Storm, the administrators, the banks and even the professional indemnity insurance companies are highly unlikely in my view to reap much of anything.  Heading down this path is quite likely wasting time that could be spent moving on with your new position. (but don't take my word for it, seek advice).

The practical suggestion, as Sir O has described, is to make a budget.

Figure out what your incomes and outgoings are - figure out if you are cashflow positive.  Figure out the 'fire sale' value of your assets.  You will likely be facing one of three scenario's:

(i)If you are cashflow positive, then start planning your new life - are you barely surviving to pay off what is now a large mortgage on a house that is bigger than you need when you could be living in a smaller place and having a better lifestyle?  Are there things that could be sold that aren't really used that could be used to pay down some debt which would reduce your outgoings and improve your lifestyle?  etc. etc.

(ii)If you are not cashflow positive, then is it possible to sell down assets in such a way that you can be cashflow positive?  If so then similar to above - work out what needs to be sold.  If trying to adjust cashflow/debt in order to 'save the house' first consider as well whether the house is 'worth' saving or whether its possible to have an enjoyable lifestyle in cheaper accomodation  (e.g. sell house, buy an apartment, sell house, buy a townhouse, shift from an expensive suburb to a less expensive one etc.).

(iii)If your are not cashflow positive, and selling down your assets is not likely to bring you into a situation where you can be cashflow positive then you are possibly headed for bankruptcy.   This is of course an extremely difficult thing to face - but if it is your new financial reality, then the sooner that it is faced, the sooner you will be on the other side of it - so start investigating the bankruptcy process.


And it might seem ironic - but seeking advice from an experienced financial planner - that doesn't work off commissions and doesn't push their own specialty products - and ideally one that helps people that are facing possible bankruptcy - is probably a very good idea.  Its even possible that free financial planning and legal advice for people in financial hardship is available via government support services or via charity services.


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## sqwark7600 (20 January 2009)

Here are the excuses for the $30m loan default to CBA and the financial ruination of thousands of their clients from Julia and Emmanuel. I see it as a sickening exposure of their pathetic modus operandi.

http://www.townsvillebulletin.com.au/article/2009/01/07/31725_hpnews.html

Here's a pearl:
"Viewed objectively (and we invite comparisons to any other model) not one of Storm's clients was over-geared as reported in the press."

Read it and weep.

:badsmile:


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## sqwark7600 (20 January 2009)

cuttlefish said:


> I personally would be backing what Garpal Gumnut has been saying - accept that the money is gone - the legal actions against Storm, the administrators, the banks and even the professional indemnity insurance companies are highly unlikely in my view to reap much of anything.  Heading down this path is quite likely wasting time that could be spent moving on with your new position. (but don't take my word for it, seek advice).




I don't see the logic in suggesting that once Storm clients have adjusted to the reality of the situation and restructured their lives that they should allow these two crooks to get away scott free. I could see that happening in Zimbabwe, but this is Australia and we have a proud history of fighting for our rights. I say once the smoke has settled go for them and those that contributed to the tragedy with a vengeance!
:bigun2:


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## daisy (20 January 2009)

sqwark7600 said:


> I don't see the logic in suggesting that once Storm clients have adjusted to the reality of the situation and restructured their lives that they should allow these two crooks to get away scott free. I could see that happening in Zimbabwe, but this is Australia and we have a proud history of fighting for our rights. I say once the smoke has settled go for them and those that contributed to the tragedy with a vengeance!
> :bigun2:




 My guess is that this will all take years to resolve. These things usually do. So as Sqwark says, Storm clients need to get on with things now and do whatever they need to do to restore order and control in their lives without hanging their hats on the outcome of litigation. I agree that they should not let this matter go but not hang onto it as their salvation out of this mess.
If claims are successful it will be a lovely bonus but if not.....


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## sqwark7600 (20 January 2009)

Smiley said:


> Anyone have a Townsville phone number for the support group? I'm interested in going to hear what people are saying.



The only support groups I have any knowledge of were part of the Storm organisation and were shut down on their going into administration. However 

Emmanuel says:
"There are literally hundreds of clients banding together to build positive Storm support groups across Queensland, working together to support Storm and each other through these trying times."
Yeeaar riiight!

I am sure that there are independant networks forming but none have surfaced as yet on this thread or the net.

For a legal update Slater & Gordon can be contacted of 1800555777. I understand that they are registering Storm victims and will then send out an information pack regarding a potential class action. They seem to be still at the assessment stage.
Maybe post your query on Monario's registration site. 
Also a post of the minutes of the creditors meeting would be interesting reading. 
Anyone?


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## shibby (20 January 2009)

I recieved a reply from Macquarie today on breaking my margin lending loan

Unused interest 
$33,204.76  

Break cost
$16,179.60  

This is 5 months and 10 days early


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## cuttlefish (20 January 2009)

sqwark7600 said:


> I don't see the logic in suggesting that once Storm clients have adjusted to the reality of the situation and restructured their lives that they should allow these two crooks to get away scott free. I could see that happening in Zimbabwe, but this is Australia and we have a proud history of fighting for our rights. I say once the smoke has settled go for them and those that contributed to the tragedy with a vengeance!
> :bigun2:




My view is that vengeance is just a wasted emotion - adapt, survive, move forward and build something different and better. By not letting go, and instead wasting valuable time and emotional energy continuing to pursue these people, they are effectively allowing their lives to still be controlled by this negative event.  Anger is an emotion that destroys both physically and emotionally.  It will destroy health and relationships.

Sure if there are some simple steps that can be taken to pursue for reclaimation, that does not involve too much effort and expense, go for it - but overall its not where I'd be directing the bulk of my energy were I in the situation.


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## Duckyt (20 January 2009)

Hello all, as soon as the Storm crisis hit - I've been reading the discussions.  I once worked for the Cassimatis partners many moons ago when they were just drawing up their strategy. I worked in admin for them and I can assure you all that the 'cult' belief system had started even back then - I fell for it as an employee !  It was all about 'promising' the amazing things that could happen - yet at the same time - and this can be publicly verified via news articles in the Townsville Bulletin (about 10 - 12 yrs ago) that they weren't paying their employees correctly - taking advantage of their young eagerness to please.  In fact, they were taken to court - after ex-exmployees once released from the 'spell' realised that they were entitled to paid overtime and that they shouldn't have had to stay back to work until dark without being compensated.  I was also signed up for Margin Loans etc. but when leaving realised that if something happened to me (I was a lowely admin worker) and my partner (having only been together for shortly) we were in more debt then we would have been able to handle. I got out as soon as I was able.  It sounds unbelievable but the comparisons to a 'cult' are actually quite on the mark.  My opinion was that Emmanuel was a showman and spellweaver - that's for sure.  As the old saying goes  "a leopard doesn't change its spots !"  I got out, and when announced I was leaving - was treated literally like dirt - going from one of their golden girls -to a "betrayer"...  I was able to warn my immediate family not to get invovled with them (let's just say..that media reports of themselves paying $2 million - whilst clients are imploding all around...sits just right with my opinion of their true characters - what we see behind doors). Unfortunately, my dad's brothers didn't take his advice to stay away and are now both over 60 and ruined financially...they are having to sell their farms - how do you start over at that age ?  They are truly broken men.  As so many other stories come pouring out - I believe in not blaming the victims but holding those responsible accountable - Doctors would get sued so fast for such fatally flawed advice !!!  That's what people paid them for - at $40000 a pop - people would logically assume that they would get good advice.  Also, the displayed arrogance infuriates me - here we have a company, clients in a massive implosian - and still its everyone else's fault but their own !!!

had my rant - feel better now.


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## Glen48 (20 January 2009)

From SMH
Storm receiver queries $2m 'dividend' paid to founders
Michael West
January 20, 2009

STORM Financial's founders and a select group of clients were the beneficiaries of cash payments from the business as the beleaguered financial services group was imploding before Christmas.

Storm's receiver Rob Hutson, of Korda Mentha, confirmed last night that $2 million was paid to the founders Emmanuel and Julie Cassimatis on December 15 in a "dividend". Earlier in the month the Commonwealth Bank had begun notifying clients over breaches on their margin loan positions.

Another $650,000 was paid by Storm to four clients, also on December 15, payments recorded as "financial assistance".

About 150 clients have received payments from Storm since the close of the financial year last June. Storm, which is holding a creditors' meeting in Brisbane this morning, said it had had 13,500 clients and $4.5 billion in funds under management. Many clients have lost their life savings, and some are losing their homes after following Storm's advice to borrow heavily to invest in the sharemarket.

The receiver is investigating the payments, has contacted the Australian Securities and Investments Commission and is seeing legal advice as to their status. "We are assessing the financial position [of Storm]. We have concerns about whether employee interests will be protected because a substantial amount of cash was taken out of the business in non-trading payments," Mr Hutson sid.

"We are currently taking legal advice to recover these funds for the benefit of creditors."

The CBA, which appointed Mr Hutson as receiver last Thursday, is the major secured creditor of Storm, owed about $30 million. Amid a legal dispute with the bank and facing the expiry of its credit facility at the end last month, Storm directors appointed voluntary administrators 11 days ago.

Macquarie Group, which provided margin loans to Storm clients, had a $10 million exposure to the group, but that appears to have been replaced last year with funding from the CBA.

It is unclear how much remains of Storm clients' funds under management. Challenger Financial Services and CBA's Colonial, which managed Storm-branded index funds on behalf of the group, began selling down their shares in October and November after the sharemarket had fallen 40 per cent.

Meanwhile, it has emerged that one related company of the Cassimatises, the Victorian Families Retirement and Investment Group, owns the historic Sladen House in Geelong, which appears to have been used for marketing purposes.

A 2007 report notes that Storm bought the function centre and cancelled weddings that had been booked.

"More than 20 brides have had their wedding dreams dashed with the sale of Newtown's historical Sladen House" the article


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## stormedup (20 January 2009)

I'm another who has been following this thread and an ex employee of Storm to boot!!  Have just read a comment (by Lucinda Beamna) in moneymanagement.com.au stating that staff may not get their entitlements.  I can only hope that this is heresay as staff have been sacked only being paid up to the day they finished work with all holiday and severence pay still owing.

On Fri 9 Jan, Julie and Emmanuel Cassimatis announced to the staff that "the CBA had pulled out one last bullett" and as a result "Storm is now in voluntary administration".  Julie Cassimatis stated that all staff entitlements had been transferred to a separate account and that everyone would be paid all monies owing should the need arise.

The termination letter form Worrells stated:
You will have other outstanding entitlements owing to you by the company. Accordingly we will be approaching the government's Department of education, Employment and Workplace Relations for funding for those entitlements under the General Employee Entitlements and Redundancy Scheme ( GEERS ). GEERS provides funding assistance for the following employee entitlements:
Unpaid wages;
Accrued annual leave;
Payment in lieu of notice entitlements;
Long service leave; and
Redundancy entitlements.​GEERS funding can only be obtained once the company has been place into liquidation. Further documentation regarding your entitlements and claims ith GEERS will be forwarded to you by mail in the near future.​
The majority of staff were paid at a very low rate, the entitlements owing would be a mere spit in the ocean compared to the CEO's holdings.


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## awg (20 January 2009)

Emannuel Cassimitis...sounds like an Italian name?

lots of Italian descent people live up that way

Some pretty wealthy ones might have ended up investing with him.

you can bet they would be wanting their money back

reckon plenty still adhere to the "old way" of justice

If people are ruined they can become very reckless

If I was him, I would be very worried about my throat


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## tasmart (20 January 2009)

Duckyt said:


> Hello all, as soon as the Storm crisis hit - I've been reading the discussions.




I've also been lurking and reading. I have no involvement with Storm but am saddened by the number of people that appear to have been ruined. Especially those retired or near retirement. Unfortunately having to resort to legal processes is likely to be drawn out, frustrating, probably unrewarding and only draw out the pain and suffering.

The interesting part for me is to consider how to avoid getting into such a mess. A few people have posted their 'recipes' so I thought I would try to document my thinking on this (and my approach)

1. Financial literacy.
I think there is a major failing in our educational systems to address even simple issues in financial literacy. I am grieved to know young folk who are dependant on credit card debt (often multiple) as an example. If nothing else financial literacy will address issues such as budgetting, assets, liabilities, equity and financial planning so there is less likelyhood of being lead astray. At the best it allows you to manage your own financial plan. I regret not starting my own such education earlier - but since I set up a SMSF 10 years ago I have been on a steep learning curve and am currently completing an MBA with a major focus on finance (last two modules were on financial planning). 

2. Don't put your eggs (assets) in one basket.
Although the concept of investing in an indexed fund may seem reasonable (to some) to do so through one vehicle (Storm) is inherently risky. It is best to aim to have your assets split around various classes - classically property, equities & fixed interest (both domestic and international). Although this may sound academic it is not that hard to do. And it allows you to vary amounts in each group to meet cylical changes (or you own needs). Similarily all assets into a super fund has risk. Owning (and running) a company may give your desired growth and cash flow but again building up assets outside that entity is desirable. 

3. Focus on developing income producing assets.
The bottom line should be to develop income producing assets (whatever class). So any budget should look at current, and future desired: assets, liabilities, equity and specifically income producing assets. I initially developed an Excel spreadsheet 10 years ago with this as the bottom line - and have built on it since. I now have about 20 tables that all link into the main one. I update my financial position at any time (and do daily), including my tax liability. I have a projected future table (for 20 years) of overall equity, income assets and super with realistic growth rates. I exceeded these significantly for 9 of the last 10 years.

4. Cash Flow is the key.
The biggest failing is to not have cash flow to cover your current liabilties. Hence any leverage needs to be set up so the interest payments can be covered. This is the big problem with the Storm strategy for low income clients. A strategy that relies on asset growth to cover current liabilities is doomed to failure. The subprime market collapse in the US is a spectacular example.


My 2 cents worth!


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## -Bevo- (20 January 2009)

stormedup said:


> I'm another who has been following this thread and an ex employee of Storm to boot!!  Have just read a comment (by Lucinda Beamna) in moneymanagement.com.au stating that staff may not get their entitlements.  I can only hope that this is heresay as staff have been sacked only being paid up to the day they finished work with all holiday and severence pay still owing.




And $2 million was paid to the founders Emmanuel and Julie Cassimatis on December 15 in a "dividend" how nice.
Buy the way how did that smashed window at the Townsville office happen the day they sacked everyone disgruntled employee or client of storm?


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## stormedup (20 January 2009)

-Bevo- said:


> And $2 million was paid to the founders Emmanuel and Julie Cassimatis on December 15 in a "dividend" how nice.
> Buy the way how did that smashed window at the Townsville office happen the day they sacked everyone disgruntled employee or client of storm?




$2m plus the $24m they paid themselves a few months back.

Guessing it would be a very unhappy client.  Doesn't seem like a Storm staff reaction, most of them brainwashed into the Storm "way".


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## sails (20 January 2009)

tasmart said:


> ...
> 1. Financial literacy....
> 
> 2. Don't put your eggs (assets) in one basket....
> ...




And if something looks too good to be true - run (not walk) away...

And high pressure marketing should always raise the question "is this product being flogged at a heavily inflated price?"...

Just my


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## awg (20 January 2009)

awg said:


> Emannuel Cassimitis...sounds like an Italian name?
> 
> lots of Italian descent people live up that way
> 
> ...





Apologise to quote myself

for the for the purpose of clarification

It seems the origin of the surname Cassimatis may be Greek.

I dont want to make racial offence to any person or group

I used to work for a group that was owned by a New Age Christian family
(the sort that used to talk in tongues)

they used to sell aggressively to members of their congregation, and there was cultish behavior, church members employed, and much pressure to conform the cult.

I, guess the fallout may be concentrated in certain pockets.

would feel sorry for them, got conned.

There is at least one other Group that operated, vary similar model to Storm, I have forgotten the name but they are reasonably high profile, franchised operation.

I was horrified, when I read their glossy literature, using home equity to trade on margin, all glorified. 

I expect they would be suffering major contractions at the moment


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## Jayan (20 January 2009)

-Bevo- said:


> And $2 million was paid to the founders Emmanuel and Julie Cassimatis on December 15 in a "dividend" how nice.




That's disgusting ... How can they be allowed to do that!


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## daisy (20 January 2009)

cuttlefish said:


> My view is that vengeance is just a wasted emotion - adapt, survive, move forward and build something different and better. By not letting go, and instead wasting valuable time and emotional energy continuing to pursue these people, they are effectively allowing their lives to still be controlled by this negative event.  Anger is an emotion that destroys both physically and emotionally.  It will destroy health and relationships.
> 
> Sure if there are some simple steps that can be taken to pursue for reclaimation, that does not involve too much effort and expense, go for it - but overall its not where I'd be directing the bulk of my energy were I in the situation.




I think I've been caught up in all the talk of class actions indemnities etc. 
As  more information about certain business practices associated with the banks and some of Cassimatis's private dealings have emerged, I have been struck with a deep sense of injustice over all of this and yes it would be nice to see these people get their just desserts over the cavilier way that they have behaved. 
But the more I think about this, the more I'm left wondering where this compensation and justice is going to come from. If I play devils advocate this is where I end up:

 1. That 2 million dividend just shows that even as cassimatis was making all those nice words for the newspapers he was busy stashing as much as he could get his hands on out of the system. The application for the FP licence for Ignite also shows he was already plotting his next dynasty even as this one was falling around his ears. 
My cynical opinion is that he will have got whatever money he could get his hands on into structures where it will be untouchable by receivers, court cases etc. Unless much has changed since the Alan Bond days and you can't do things like that anymore.

2. So, from what I've read the lawyers are going to go after the banks.
Which banks....the ones that gave the overly inflated equity loans that clients so eagerly wanted and were so naive they didn't even know the approximate market value of their property? Even in my sympathetic opinion that's just a bit too naive to be acceptable. 
The banks might get into trouble for not doing their homework properly but that's no guarantee they will be made to return people's money. And even if the first case rules they have to, I bet they will appeal that decision and drag the whole thing on for years and years. Look at what James Hardie did and how long they dragged that case on.

3.So that leaves the banks that provided the margin loans on the security that the clients provided on overinflated property values. They can wiggle out of this I bet.

4.The only thing that I can see that they won't be able to wiggle out of is not closing out some margin loans when the LVR dictated that they should have. But that's just going to be a drop in the bucket compared to peoples' losses. I imagine it will just be the difference between when they should have and when they did.

5. All of this might get the banks into trouble with various regulatory authorities and change things so this can't happen again but that won't necessarily restore peoples' financial status.


I hate to sound so negative and I don't want to sound like a wet blanket here and I'm not a lawyer so I don't really know whether I'm talking a lot of hot air and I'm not suggesting that people don't go through with the class action. You just never know.... But Cuttlefish is right, the first priority is using all your energy and focus on rebuilding  what is...not what might be.


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## Solly (20 January 2009)

cuttlefish said:


> My view is that vengeance is just a wasted emotion - adapt, survive, move forward and build something different and better. By not letting go, and instead wasting valuable time and emotional energy continuing to pursue these people, they are effectively allowing their lives to still be controlled by this negative event.  Anger is an emotion that destroys both physically and emotionally.  It will destroy health and relationships.
> 
> Sure if there are some simple steps that can be taken to pursue for reclaimation, that does not involve too much effort and expense, go for it - but overall its not where I'd be directing the bulk of my energy were I in the situation.




Agreed cuttlefish, hence my attitude, to get on with it, no matter how angry, upset you get it, it changes nothing. Don't waste the energy, by getting angry & upset it allows those who caused you harm to continue to have control and influence over you. 

The reality is in the long run only those who are really close to those affected will really care. Others, including me, come along to view the wreck and commotion, offer kind words, opinion, advice, etc.
I wonder how many of us here will reach into our pockets and hand over hard cash to help those in trouble. ??

Hence my hard line, that's why it's imperative for those affected to act now, and get on with it and don't waste time on non productive actions & behaviours. The reality is there is no magic wand, the journey will be long and hard, whether you make it to the finish line is up to YOU.


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## Solly (20 January 2009)

*Storm losses may top $100m *

Update Collapsed Queensland-based Storm Financial Group is believed to owe creditors more than $72 million, while losses may top $100 million.

Attendees at a creditors meeting in Brisbane today were told the Commonwealth Bank was the major creditor of the financial planning company, with secured loans of about $27 million.

Commonwealth Bank has already appointed receivers Korda Mentha.

.................................

Emmanuel and Julie Cassimatis, the company's founders, were also believed to be owed several million dollars.

BusinessDay understands Storm Financial, which was closed down by administrators from Worrells Solvency & Forensic Accountants last week, was losing about $850,000 a month.

Even so, about 40 clients are believed to have received unsecured, interest-free loans as the company unwound.

The loans, which were allegedly to help them deal with margin calls on their accounts, amounted to between $3.5 million and $4 million.

One person who attended the creditors' meeting said the administrators were mystified by the loans.


Complete story by Vanessa O'Shaughnessy and Georgia Waters is here.

http://business.smh.com.au/business/storm-losses-may-top-100m-20090120-7ldq.html


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## Monario (21 January 2009)

stormedup said:


> I'm another who has been following this thread and an ex employee of Storm to boot!!  Have just read a comment (by Lucinda Beamna) in moneymanagement.com.au stating that staff may not get their entitlements.  I can only hope that this is heresay as staff have been sacked only being paid up to the day they finished work with all holiday and severence pay still owing.
> 
> On Fri 9 Jan, Julie and Emmanuel Cassimatis announced to the staff that "the CBA had pulled out one last bullett" and as a result "Storm is now in voluntary administration".  Julie Cassimatis stated that all staff entitlements had been transferred to a separate account and that everyone would be paid all monies owing should the need arise.
> 
> ...




Hi Stormedup,
                    Firstly I would like to say sorry to hear about your personal situation, I imagine that your probably not only out of pocket for wages, but also part of the investor collapse.. However, I feel no pitty in the fact that storm have folded, after the way they conducted their business they had it coming, the only sad thing is people like myself now have to look at alternate means to recoup losses.

been an ex employee, could you perhaps shed some light on a few issues.

1) Why were storm, and the advisors so reluctant to sell under investors instruction? I myself, and have heard from many people that when the instcruction was given to sell that it was refused. Why? If I had suffered a 10-20% loss and felt it time to get out why were we held in against our wishes? I was held in up to around 102%.


2) How and where did the last 2 dividends that were drwan by emanuel come from? maybe this is the obvious, but are you telling me, he took dividends/commisions on margin loans and empty portfolios from failed investors? I mean where did the 24mill in the last 6months come from..

In anycase, if the truth is the cassimatis's have stashed close to 30mill away in the last 6months, I hope they end up rotting in hell, or a jail cell for what they have done to both, loyal and new investors. and there staff.

Maybe there going to come and sli wads of cash into all the people who have lost hugs somes letter boxes!


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## daisy (21 January 2009)

There is some highly emotive language starting to slip into the media. Here is just one that is not helping anybody.
*STORM VICTIMS.*  With the exception of the staff who have not been paid, *there are no Storm victims*. The investors who have come out of this badly were not victims of Storm but victims of their own ignorance and willingness to walk into this without checking both sides of the road first.
It’s horrible what has happened here but these people are not “Storm Victims.”
Cassimatis was a great salesman and clearly some people were more susceptible to his sales tactics than others, which is the only possible explanation I can find to explain why some people did get out when they wanted to but others didn’t.  But that doesn’t make them victims of storm rather victims of their indecisiveness and willingness to be talked out of a particular course of action.
The word victim is inappropriate. By applying it in this situation the responsibility for these people’s current situation is removed from their shoulders and allows them to blame someone else. And that’s not going to help them even get past first base as they try to restructure their lives.

The press use emotive words because it makes for good reading. Pulls the readers heartstrings and ensures they will buy tomorrows paper to find out just how Little Red Riding Hood will fare against the Big Bad Wolf.

Please everyone caught up in this understand you were not a victim of Storm. Storm was not the big bad wolf that snuck into your grannies house and hopped into her bed. You are not Little Red Riding Hood. She at least was suspicious. 
Storm was a slick operation and for whatever reasons, you fell for it. The people who have been damaged by this were damaged because they crossed their fingers and hoped. And now the class action...more hope?

Here’s something else to consider. Slater & Gordon are bottom feeders....ambulance chasers. Just because they have taken on this case does not mean that they expect to win. They work on people’s hope. Their business model works on the principle that if they win just a percentage of their cases then they will come out on top financially. They are not working for nothing because they care. 
IF this case is successful (and I've already expressed my reservations) then they will take their fees out of whatever they can get for you. I don’t know how much that is but I saw a divorce property settlement recently where the lawyers ended up with more than 50% of the total assets the couple were fighting over. 
If it goes into appeal and I’m almost certain the banks will appeal any adverse findings, the lawyers’ fees will in all likelihood go higher. Banks can take this on and on and on...all the way up to the Supreme Court and the lawyers will probably pile fees upon fees upon fees. There may not be anything left for you anyway. 

Here’s my hippy saying for the day.

An elder Cherokee Native was teaching his grandchildren about life. 
He said to them, “A fight is going on inside me … it is a terrible fight and it is between two wolves. One wolf represents fear, anger, envy, sorrow, regret, greed, arrogance, self-pity, guilt, resentment, inferiority, lies, false pride, superiority, and ego.  
The other stands for joy, peace, love, truth, friendship, empathy, generosity, faith, and compassion. The same fight is going on inside you, and inside every other person, too.” 
 They thought about it for a minute, 
then one child asked his grandfather, “Which wolf will win?” 
The old Cheree replied .   .   .”The one you feed.”


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## daisy (21 January 2009)

Solly said:


> I've been told that not all people have survived this episode. I hope it isn't true. That's why I'm a firm believer that if people are in anyway despondent or depressed they quickly seek advice from organisations such as Life Line 13 11 14 , Beyond Blue 1300 22 4636 http://www.beyondblue.org.au/
> Any family members or friends that are concerned about their loved ones in trouble can call for advice as well.
> There are phases of behavioural change that people go through with episodes like this,
> I'm not qualified to give advice in this realm but shock, anger, sadness, grief, depression, irrational thinking can all take over at times.
> ...




I hope you don't mind Soly but I edited this a bit.


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## ROE (21 January 2009)

sqwark7600 said:


> I don't see the logic in suggesting that once Storm clients have adjusted to the reality of the situation and restructured their lives that they should allow these two crooks to get away scott free. I could see that happening in Zimbabwe, but this is Australia and we have a proud history of fighting for our rights. I say once the smoke has settled go for them and those that contributed to the tragedy with a vengeance!
> :bigun2:




Do you think you can win against these guys?

Don't fight battle that you can not win.

It's a drain on your health, family and could be a costly battle that ended no where.

Treat this financial hiccups as an overwhelmed army of financial world hitting you, and if it was Sun Tzu from the Art of War he would not fight it 

When overwhelmed, you don't fight; you surrender, compromise, or flee. Surrender is complete defeat, compromise is half defeat, flight is not defeat.

As long as you are not defeated, you have another chance to win.

In another word don't surrender, keep on investing..dont fight that army of darkness, flight and rebuild your financial affairs and some days you will win again.


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## Solly (21 January 2009)

Just when you thought it couldn't get any weirder...

"..Storm Financial allegedly pumped oxygen in to rooms holding 300 or more clients to ramp up levels of enthusiasm during seminars...

....also purportedly used listening devices to monitor conversations in private rooms used for one-on-one consultations with prospective investors....

....A director of Momentum Planning, had been approached by Storm to form a joint-venture partnership to give the then-fast growing Townsville-based company a foothold in WA. 
Mr Paul said the two firms never merged because he found Storm's business practices and client ethics very troubling, likening it to a cult...." 


Complete story by Anthony Marx is here;
http://www.news.com.au/heraldsun/story/0,21985,24940447-664,00.html


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## Solly (21 January 2009)

daisy said:


> Solly said:
> 
> 
> > I've been told that not all people have survived this episode. I hope it isn't true. That's why I'm a firm believer that if people are in anyway despondent or depressed they quickly seek advice from organisations such as Life Line 13 11 14 , Beyond Blue 1300 22 4636 http://www.beyondblue.org.au/
> ...




No probs daisy, It's a privilege to be quoted.


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## Solly (21 January 2009)

*Storm may have been insolvent before dividend payment*

"STORM FINANCIAL may have already been insolvent when its founders, Emmanuel and Julie Cassimatis, paid themselves a "dividend" of $2 million in December, according to the failed wealth adviser's administrators.

In a statement yesterday, administrators Raj Khatri and Ivor Worrell said Storm Financial's liabilities exceeded its assets by $4.3 million at December 31.

At yesterday's creditors' meeting the administrators said Storm had liabilities of almost $80 million but would not comment on how much might be recovered from the sale its assets"

Vanessa O'Shaughnessy and Georgia Waters story is here;

http://business.smh.com.au/business/storm-may-have-been-insolvent-before-dividend-payment-20090120-7lmt.html


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## Solly (21 January 2009)

*Storm Financial investors warn banks of upcoming stoush*

"The Storm Investors Consumer Action Group will fight to recover lost assets.

Former clients of the failed investment advisory firm Storm Financial are vowing to take on the banking industry over the company's collapse.

Hundreds of investors met at Redcliffe in south-east Queensland last night and formed their own action group.

About 300 of the firm's former clients packed into a restaurant to hear what action they could take.

Many face the prospect of losing their homes and they voiced their anger at the banks.

The action group say banks recklessly loaned money to Storm customers and then gave them little time to rearrange their affairs when the company collapsed.

Lawyers told the crowd most of them had received terrible advice from Storm Financial and banks that loaned them money have a case to answer.

Banking expert John McLennan says the newly created Storm Investors Consumer Action Group will fight to recover lost assets."


Story by Jonathon Hall is here

http://www.abc.net.au/news/stories/2009/01/21/2470605.htm


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## sqwark7600 (21 January 2009)

Storm clients will be proven in the courts to be victims of a well planned, very smooth and aggressive scam.
Like most past scams:
There will be a cadre of activists in the group to take the lead and fight for their rights. 
Creditors will wait in line for a small percentage of their money.
Employees will also wait in line for a percentage of their entitlements.
For the victims the initial legal proceedings will be shaky as options are laid out but will consolidate in the long run.
People will depress, marriages will fail and children will be seriously affected.
The crooks will keep their act up until they hear the cell doors lock behind them; then they will find God.
Bottom feeders will circle and probe.
Lawyers will make a killing.
The finger pointing will continue ad nausium. 
It is a matter of history and human nature.
So Storm victims first get your act together and then go for the jugular.
:sheep:


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## cuttlefish (21 January 2009)

Solly said:


> *Storm may have been insolvent before dividend payment*
> 
> "STORM FINANCIAL may have already been insolvent when its founders, Emmanuel and Julie Cassimatis, paid themselves a "dividend" of $2 million in December, according to the failed wealth adviser's administrators.
> 
> ...




It does amaze me that they would even try this sort of blatant stuff.   The unfortunate thing is a lot of directors seem to get away with these sorts of things - but some don't and even end up in jail.  (e.g. Adler, Rivkin, Bond).  

Given the number of people affected the Cassamatis would be pretty stupid imo to have deliberately taken money out of the firm at a time when they were aware that it was insolvent - and December is pretty late in the day - but it sounds like they did quite a few things that were pretty stupid - they were probably hoping they would still be able to juggle their way out of it back at that point in time - in which case the close scrutiny of the books would not have come into play as it does when the administrators are called in.  

 (note - all speculation on my behalf, not wanting it imply anythiing occurred that didn't)


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## Ijustnewit (21 January 2009)

Monario said:


> Hi Stormedup,
> Firstly I would like to say sorry to hear about your personal situation, I imagine that your probably not only out of pocket for wages, but also part of the investor collapse.. However, I feel no pitty in the fact that storm have folded, after the way they conducted their business they had it coming, the only sad thing is people like myself now have to look at alternate means to recoup losses.
> 
> been an ex employee, could you perhaps shed some light on a few issues.
> ...



Well I'll never forget the comment by our advisor and I quote " We wouldn't let you loose all your money , if that happened i would go to jail,and i don't want to go to jail" here's hoping this is the first thing they told us that turns out to be the truth.


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## daisy (21 January 2009)

sqwark7600 said:


> *Storm clients will be proven in the courts to be victims of a well planned, very smooth and aggressive scam.*Like most past scams:
> There will be a cadre of activists in the group to take the lead and fight for their rights.
> Creditors will wait in line for a small percentage of their money.
> Employees will also wait in line for a percentage of their entitlements.
> ...




Sqwark, may I ask at what point these people became "victims" During the bull run perhaps...


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## Slight Edge (21 January 2009)

I can't believe the gall of the advisers, particularly the principals who "GAMBLED" on their businesses in the big roll up to the mothership prior to the float - and now, the principles are crying foul and demanding payment for their businesses... I can tell you for a fact they did so on the proviso that the payout would happen when Storm floated and they all had stars in their eyes - They were quoting multiples in the 15-17's for their shareholdings, and had openly discussed that if the float didn't happen straight away, they'd bide their time until it did.

The greedy SOB's who sold out to the mothership punted on it and lost. They were spending the cash they didn't have and the greedier ones did everything they could to secure greater shareholdings in regard to the big payday. This whole capitulation comes down to pure, unadulterated greed and the principals deserve everything they get. In the last 18 months reports of client service levels deteriorating and nasty sales tactics have been rife with many clients being made to feel stupid, belittled and undermined to sign business - what the clients didn't know is that in the rollup of businesses, their advisers who were principals (read - head sales person) took a pay cut to go on salary as a Storm employee with a retainer + commission - and as one adviser openly told clients, "I haven't written any business in the last few months so I haven't got paid" - everyone knows the hungry wolf takes the risks.

Interestingly enough, there is rumour that the principals are now crying poor - and were so quick to back up Storm when they were raking it in, but now their true colours have shown and they can't run fast enough. Some advisers are trying desperately to re-start businesses and distance themselves verhmently from Storm. This kind of gutless attitude is testament to their greedy natures. I urge the action groups of Clients to stand strong against this, and demand full compensation ahead of those greedy principals who KNEW the risks associated with rolling their businesses into storm ahead of the float. 

Don't let them get paid out before you, and for all you stalwarts and employees who still have an undying adoration for the apostles and the messiah who "became like family to you"... the writing was on the wall, and you could have moved to cash in Feb of last year which for 90% would have meant being able to get back in. These Guru's let YOU down. As clients, you wouldn't be in Negative Equity territory and as employees you wouldn't be looking for work right now.

It's time to get the priorities straight.


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## pilots (21 January 2009)

Ijustnewit said:


> Well I'll never forget the comment by our advisor and I quote " We wouldn't let you loose all your money , if that happened i would go to jail,and i don't want to go to jail" here's hoping this is the first thing they told us that turns out to be the truth.




Yes some of them will go to jail, they will get up to three years and then out, what is bad, he will have salted away 3/5 Mil some place.
When its too good to be true, the one that gets screwed is YOU.


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## sqwark7600 (21 January 2009)

daisy said:


> Sqwark, may I ask at what point these people became "victims" During the bull run perhaps...



Daisy you may; but with respect for the full answer you would have to talk to individual past clients of Storm.

A victim is usually defined as:

an unfortunate person who suffers from some adverse circumstance

a person who is tricked or swindled
http://wordnetweb.princeton.edu/perl/webwn

In the case of the unfortunate and unsophisticated Storm investors it is my opinion, based on past precedent and the revelations of the creditors meeting, that the cause of the adverse circumstances that the Storm victims are suffering, was that they were tricked or swindled. Further, I believe the judgement of their personal culpability should be left to the courts.

If you don't accept that then that's your right. Fortunately in Australia you are innocent until proven guilty. However, until a judge doesn't accept it, cause remains conjecture.

Once discovery, briefs, legal argument and evidence are presented in court the judge will have heard the full stories from both sides, weighed the legal points presented and rule. 

Meanwhile as I have stressed on my posts these people should stabilise their lives first then pursue their legal remedies when and if they can. Some I agree may not be able, but there will be some that can. Hence my belief in a class action.

Take a f'rinstance: one partner does all the financials for the family, the other manages the houshold. Is the house manager to blame for the bad investments of the finance manager. Depends of the nature of the individual. Some will suffer the consequences of placing their trust in their sole mate others will seek to make a new life whilst others will split. My point is that there are victims who may not have had the wherewithall to understand the situation and there are poor finance managers who may not have been shown how to consider their exit strategies. Certainly Mr and Mrs Storm didn't.
:sheep:


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## sqwark7600 (21 January 2009)

Slight Edge said:


> Don't let them get paid out before you, and for all you stalwarts and employees who still have an undying adoration for the apostles and the messiah who "became like family to you"... the writing was on the wall, and you could have moved to cash in Feb of last year which for 90% would have meant being able to get back in. These Guru's let YOU down. As clients, you wouldn't be in Negative Equity territory and as employees you wouldn't be looking for work right now.
> 
> It's time to get the priorities straight.




And not one had an exit strategy to offer their clients. Excellent post. 
SE.
:sheep:


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## cuttlefish (21 January 2009)

squark7600 said:
			
		

> _Originally Posted by daisy:
> Sqwark, may I ask at what point these people became "victims" During the bull run perhaps... _​
> Daisy you may; but with respect for the full answer you would have to talk to individual past clients of Storm.
> 
> ...




I'd agree that they are victims of a very risky (due to the leverage involved)  and poorly managed investment scheme, and victims of a severe fall in the stock market.  But if they deny that they had any personal responsibility for the situation they are in they are kidding themselves.

For example - anyone that takes out a loan has a responsibility to ensure that they can repay the interest and principal on that loan.  

It sounds to me like a lot of people willingly took out loans that they did not have the capacity to repay or feel comfortable about repaying if the need arose.   This sort of wreckless behaviour has consequences.   Storm didn't force people to take out loans, and every loan document you get from a bank clearly states the amount of the loan and the amount of repayments that are required.  So I can't believe that anybody was unaware they were borrowing large amounts of money and what the repayments were.

Storm did a terrible job of managing how the proceeds of those loans were invested, and were highly irresponsible in advising and encouraging people to take out large loans that they were unlikely to have the capacity to repay.  

But they didn't sign the loan documents for the clients.


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## sqwark7600 (21 January 2009)

In case you missed Solly's post the Storm Investors Action Group has been formed and will meet soon in Townsville. I am trying to get some more detail.
Investigative journalist and Emmy award winner Jonathon Hall is ABC lead journo. I quote his article:
"New South Wales Nationals Senator John Williams also addressed the function, promising to push for a Senate inquiry into the role banks played in the demise of Storm Financial."

Any more info anyone: contacts, timings, future venues?
:sheep:


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## daisy (21 January 2009)

sqwark7600 said:


> A victim is usually defined as:
> 
> an unfortunate person who suffers from some adverse circumstance
> 
> ...




I take your point. However my guess is not one of these people were calling themselves victims while they were raking it in and dancing in the streets of Italy. Nobody was complaining about tricky sales tactics then.

I think I've made it clear that my sympathy does lie with those unsophisticated investors who were not able to understand the implications of what they were doing. But I think to abrogate personal responsibility is not going to help them.

On a more practical note, by the time that the banks have got their hands on whatever of storm's money they can legally access...and I'm sure they will get first go at it, I'd be surprised if there will be anything in storm's coffers to give back to clients who have been caught up in this.

The banks can't be held responsible for storm's slick sales tactics. So unless this line of action is directed against storm's insurance or indemnity or wahtever you call it, what good is it? 

And if that is where this line of action is going to go then storms Clients are going to be taking on more than likely a large probably multi-national insurace company. 

Good Luck. In my humble opinion insurance companies are even trickier than banks when it comes to covering their backsides and avoiding payouts.


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## carey ramm (21 January 2009)

Hi

I was alerted to this forum by some distressed storm clients who have been reading the commentary. I have registered here under my real name and I am a national economist of 20 years standing. Since the October crash i have seen hundreds of victims (and that is what they are) and provided guidance and directions to them. I have also been working with the 2 main law firms assisting clients - Slater and Gordon and Connolly Suthers. I urged both of these firms to meet with some of the initial clients I was helping, and to become involved and represent them. They agreed after reviewing the documents we had collected and after meeting the clients and hearing their stories. I know there has been a wide range of comments on this forum about lawyers (and how useful they will be) but the reality is that in most of the cases i have seen these storm clients do have grounds for legal recourse against several banks. When u provide credit for both home loans and margin loans there are very strict rules and procedures that must be adhered to by the banks. 

So if u r a Storm client I would suggest u consider the following course of action:

1. Contact your home and margin loan providers and request copies of the actual loan application forms and associated consumer credit contract schedules - they must give them to u so be firm. It may take a few days for u to receive these documents.
2. Review the asset, liabilities and personal income details contained in the loan applications - look for irregularities such as: is your declared income correct or has it been overstated?
3. Make notes on what dealings you actually had with official bank staff during the loan process - did u provide copies of pay slips, etc? some of u may have never met with bank staff - again make notes of these details.
4. Compile all your storm documents and records into a coherent set in chronological order.
5. Contact either Slater and Gordon (07) 3220 2555 or Connolly Suthers (07) 4771 5664 and register with them, then make a time to go and meet with their lawyers and review the information collected in steps 1 to 4.

If u are a Macquarie Margin Lending client then u should have been contacted by them informing u that the purchaser of the business (Bendigo Bank) has excluded Storm clients from the purchase - this means u must refinance or your portfolio will be liquidated. There are set dates for when this will occur. Please see a financial planner experienced in margin lending to assess your options and don’t leave it to the last minute.

It is up to each individual to determine what they wish to do (either fight or walk away) and I wish them the best in what is clearly a difficult time regardless of which direction they choose.

Best regards

Carey Ramm
Principal Economist 
AEC Group Ltd


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## cuttlefish (21 January 2009)

sqwark7600 said:


> Investigative journalist and Emmy award winner Jonathon Hall is ABC lead journo. I quote his article:
> "New South Wales Nationals Senator John Williams also addressed the function, promising to push for a Senate inquiry into the role banks played in the demise of Storm Financial."




Politicians love any opportunity for a 10 second media grab - lets see what actually happens.

I can see the court case:

Lawyer to Victim: So the bank lent you money that they shouldn't have?
Victim: Yes
How much did they lend you?
Victim: I don't know exactly, about $XXX
Lawyer:  Did you sign this document that states the amount that the bank lent you?
Victim: Yes
Lawyer: And did you request the bank not to lend you this money?
Victim: No
Lawyer: Did you express to the bank that you did not want them to lend you the money?
Victim: No
Lawyer: Did you request the bank to loan you the money or did they bank offer to lend you the money?
Victim: My financial adviser recommended I loan the money.
Lawyer: Did you sign this document outlining the repayment requirements?
Victim: Yes
Lawyer: Did you intend to meet those repayments?
Victim: Yes
Lawyer: Have you met those repayments?
Victim: No
Lawyer: Why haven't you met those repayments?
Victim: Because I didn't have any money to make the repayments?
Lawyer: Are you stating you didn't have the capacity to make those repayments?
Victim: Yes
Lawyer: Did you sign this income declaration stating that you earnt $XXX per annum?
Victim: Yes
Lawyer: This income is sufficient to cover the loan repayments, have you lost your job?
Victim: No
Lawyer: Then why are you unable to make the repayments on the loan?
Victim: Because the income isn't as stated on the document
Lawyer: Are you saying you did not earn this level of income?
Victim: Yes
Lawyer: But you signed a document stating that you did?
Victim: Yes - but my financial adviser said it would be ok
Lawyer: You agreed to sign this because  your financial adviser recommended it?
Victim: Yes
Lawyer: Did you realise that the income statement was incorrect when you signed the document?
Victim: No, I thought that it was correct
Lawyer: But you now realise you actually don't earn this amount?
Victim: Yes, the financial adviser said it would be ok.
Lawyer: Did you speak to your accountant to verify your income?
Victim: No
Lawyer: Did you check that the income matched the amount of money that you earnt from your payslips and investment income?
Victim: No
Lawyer: Did you check that the income on the statement matched the income stated on your last tax return?
Victim: No, I just trusted my financial adviser, thats his job, not mine
Lawyer: Did the financial adviser sign the document on your behalf?
Victim: No

etc. etc.

Not much hope imvho.


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## sqwark7600 (21 January 2009)

cuttlefish said:


> For example - anyone that takes out a loan has a responsibility to ensure that they can repay the interest and principal on that loan.




Very easy to say.
Tell it to all the retail and investment banks that have failed. Maybe Mr Babcock and Brown would benefit from your wisdom or Mr Centro. Mr CBA is in the hole for about $30 to Mr Storm. Bank of Scotland, Barclays, UBS, etc etc are all in the hole for billions. Mr Obama is still shovelling money into the hole.
Also, margin lending has been around and used successfully by the market for 20 years.
With respect my point is that there is a lot more to this story than glib homilies.
:sheep:


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## pilots (21 January 2009)

cuttlefish said:


> Politicians love any opportunity for a 10 second media grab - lets see what actually happens.
> 
> I can see the court case:
> 
> ...




Thats how it should read, but the lawyers will take the long way, and take the last of the money you have, you have lost.


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## Julia (21 January 2009)

cuttlefish said:


> - anyone that takes out a loan has a responsibility to ensure that they can repay the interest and principal on that loan.



Yes.



> Storm didn't force people to take out loans, and every loan document you get from a bank clearly states the amount of the loan and the amount of repayments that are required.  So I can't believe that anybody was unaware they were borrowing large amounts of money and what the repayments were.



This is where I have difficulty understanding the claims from investors that property values and incomes were inflated.   When?  By whom?
Did they knowingly sign documents with incorrect figures on them?  If
so, any hysterical claims that they are going after the greedy banks will look pretty stupid.

Most Australian banks are reasonably conservative and I wouldn't have thought they would have lent excessive amounts across the whole range of Storm clients which is what seems to be being suggested.

Are lawyers telling distressed investors they will go for the banks because there's no money anywhere else?  If so, as already pointed out, the banks will fight until doomsday.

What were "the assets" of Storm referred to earlier?

The legal fees of the principals alone will be huge.  


No one has yet offered any answer to my question as to whether level of PI insurance Storm surely would have held would cover investors' losses.

Further question:   it seems the banks, the ATO, the Funds etc are all creditors.   Surely if there IS any money, they will get paid before the erstwhile clients get anything?

And let's not forget the fees that Worrells will charge.
A mortgage investment in which I was involved several years ago had considerable assets when it failed and was put into the hands of Worrells.
But by the time they had investigated, their fees used up all  the realised assets.


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## cuttlefish (21 January 2009)

sqwark7600 said:


> Originally Posted by cuttlefish
> For example - anyone that takes out a loan has a responsibility to ensure that they can repay the interest and principal on that loan.​
> Very easy to say.
> Tell it to all the retail and investment banks that have failed. Maybe Mr Babcock and Brown would benefit from your wisdom or Mr Centro. Mr CBA is in the hole for about $30 to Mr Storm. Bank of Scotland, Barclays, UBS, etc etc are all in the hole for billions. Mr Obama is still shovelling money into the hole.
> ...




Its very easy to say because it is true.  People that borrow money have a responsibility to pay it back. Most people learn about this from a very young age, and if you sign a document stating that you agree to borrow such and such amount, and that you have this level of income, and that you agree to pay it back, then you will be asked to honour that agreement that you signed.  

No amount of irresponsibility on behalf of the banks or financial advisers takes that fact away.  

The banks were idiots in lending money to people in this way, but they didn't put the pen in people's hands.  

Storm advisors may even have encouraged people to commit fraud in relation to income statements and encouraged people to borrow more money than they had any hope of being able to pay back, which is highly irresponsible and possibly illegal in some of the cases, but they didn't put the pen in peoples hands either.

I agree that these people are victims, but they need to also accept their own responsibility for the situation they are in - it can't all be offloaded.


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## Waveglider (21 January 2009)

If these investors believe that they will recieve any funds from a class action against the banks or storm farcial group they are unfortunatly kidding themselves.

Lawyers say you have a case (i.e. just watch us make heaps of money & you will get squat).

As several other posters have advised previously just move on


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## Slight Edge (21 January 2009)

The issue of serviceability is an easy one to understand. MOST clients never started with Millions invested. If you actually go through the history of advice, MOST initial advice was true and correct for the client at the time it was published. 

Serviceability in most inception cases was based on surplus cashflow. Current retirees weren't retirees when a lot of this advice was given which is why they had unencumbered properties and surplus cash - (non dependant children etc). Margin loans were often added after the fact and at this time a clients tax return would indicate revenue from CMT's, Investments etc which all would have contributed to the serviceability of the margin...

If you do your homework, you'll see that the Margin loans were being capitalised at a rapid rate of knots in the last couple of years and clients understanding of "How" this was being serviced was glossed over with advisers. "Buyer Beware" may well be true, but the wheels did NOT fall off with the borrowing to invest - it fell off with the borrowing what you could afford and Storm's greatest brain explosion was using interest on interest on interest to perpetuate clients positions.

I know of clients who didn't understand how the last steps were paid for and can now see the stack of cards that have been built. These steps were presented to clients as investment "successes" and clients were shown LVR charts that indicated that their debt ratios were not only NOT compromised but within safe limits.

I'm not saying that Clients don't deserve some of the responsibility - but the bully tactics used in the last 18 months have been horrendous and I feel for those people who dared to ask the hard questions and get shot down. 

I think people need to search a little deeper than some of the prima facie commentary - there are many parties at fault and yes, clients, as humans bear SOME of the blame - not all of it.


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## daisy (21 January 2009)

carey ramm said:


> Hi So if u r a Storm client I would suggest u consider the following course of action:
> 
> 1. Contact your home and margin loan providers and request copies of the actual loan application forms and associated consumer credit contract schedules - they must give them to u so be firm. It may take a few days for u to receive these documents.
> 2. Review the asset, liabilities and personal income details contained in the loan applications - look for irregularities such as: is your declared income correct or has it been overstated?.....etc etc




Mr Ramey,  I thought a signature on a document meant something. and if the clients did sign these documents with overstated incomes assets etc. ?????


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## daisy (21 January 2009)

Sorry, Mr Ramm, I seem to have mispelt your name in my last post. My apologies. 
But the question does remain if the clients signed those documents????


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## Judd (21 January 2009)

What I find interesting is that some of the Storm clients consider that they were unsophisticated.  What does that mean?  Somebody who does not know the difference between a direct share and a managed fund: who thinks that the All Ordinaries is just that; who is totally unaware that a loan from a lender be it against shares or a mortgage or credit card, has to be repaid at some stage?  Or is it someone who saw or heard about the investment returns friends, relatives and/or colleagues were getting and decided that they wanted some of that?

Strewth, it is not so long ago that I lost my family close to $0.5m - and it could have easily been more.  So who do I blame?  The broker for executing my trades?  The lender for allowing me to have so much money to lose?

Nah, decisions rest solely with the investor in my view.


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## sqwark7600 (21 January 2009)

With respect the latest update-Some practical suggestions from this thread:

Step #1 Wind up all margin lending accounts, especially if your interest payment rate is greater than your interest accrual rate. If you have trouble with your bank use the services on the Banking and Financial Ombudsman Service~FOS. Their site is at: 
http://www.fos.org.au/centric/home_page.jsp


carey ramm said:


> So if u r a Storm client I would suggest u consider the following course of action:
> 1.	Contact your home and margin loan providers and request copies of the actual loan application forms and associated consumer credit contract schedules - they must give them to u so be firm. It may take a few days for u to receive these documents.





carey ramm said:


> 6.	If u are a Macquarie Margin Lending client then u should have been contacted by them informing u that the purchaser of the business (Bendigo Bank) has excluded Storm clients from the purchase - this means u must refinance or your portfolio will be liquidated. There are set dates for when this will occur. Please see a financial planner experienced in margin lending to assess your options and don’t leave it to the last minute.




Step #2 Calculate your personal balance sheet. There are some useful calculators on this site: 
http://www.nt.gov.au/business/resources.cfm?resourcetypeid=1

Step #3 If Step #2 results in a negative outcome you can't live with, voluntary bankruptcy is a legal government regulated option. I understand that if you have a super fund that it remains intact, you can earn a living, keep a modest car and there are ways of restructuring to keep your house. You need to suffer it for 3 years and lose your credit rating for 7 years. The Insolvency and Trustee Service Australia ~ITSA is the government agency responsible for the administration and regulation of the personal insolvency system in Australia. 
Don’t be forced into bankruptcy check out the consequences of voluntary bankruptcy. Make sure you restructure as necessary prior to declaration. ITSA is on:
http://www.itsa.gov.au/
and there is a lot of information on:
http://www.fredappleton.com.au

Step #4 If Step #2 results in an outcome you can live with I would liquidate everything that you can live without. I’d think of transferring any non-liquid investments eg. property syndicates or locked mutual funds into your super.
Step #5 Make your holistic health your number one priority. If your loved-one goes quiet or demonstrates a personality change, watch them like a hawk. Suicide is a real danger; stress is carcinogenic. There are plethora of free counselling services available.
Step #6 Set yourself a budget and live within it. There is a calculator on:
http://www.nt.gov.au/business/resources.cfm?resourcetypeid=1

Step #7 Identify and activate new potential income sources. 

Step #8 If your house is under threat get a relative to buy you out at a reasonable price and rent from them, with the option to buy back in. Consider moving in with an aged loved one that needs care.

Step #9 Spend a lot of time on collating your Storm activities. Write every memory item up as a diary note and find and file every piece of paper, note, brochure etc. you have from Storm, your FP,  the bankers, margin lender, responsible entity or fund manager. 


carey ramm said:


> 2. Review the asset, liabilities and personal income details contained in the loan applications - look for irregularities such as: is your declared income correct or has it been overstated?
> 3. Make notes on what dealings you actually had with official bank staff during the loan process - did u provide copies of pay slips, etc? some of u may have never met with bank staff - again make notes of these details.
> 4. Compile all your storm documents and records into a coherent set in chronological order.



Step #10 Every time you speak to someone on the phone related to your Storm situation take their full name and also request a reference number (some companies do keep phone logs). Write up a diary note detailing the conversation.

Step #11 Once you and yours are stabilised go after those that caused this with a vengeance. You have many covenants and powerful regulations crying out to lend a hand. Do it with a consolidated class action. For past precedence start with:
http://www.superreview.com.au/Article.aspx?ArticleID=218427
http://www.investordaily.com/cps/rde/xchg/id/archive/IFA0000000160.xml?rdeCOQ=SID-3F579BCE-4C8B1C13


carey ramm said:


> 5. Contact either Slater and Gordon (07) 3220 2555 or Connolly Suthers (07) 4771 5664 and register with them, then make a time to go and meet with their lawyers and review the information collected in steps 1 to 4.



Step #12 Don’t underestimate the power of networking. Communicate with your fellow Storm victims, join any group that they have set up to discuss the problem and their strategy. Seek out the Storm Investors Action Group. 


carey ramm said:


> It is up to each individual to determine what they wish to do (either fight or walk away) and I wish them the best in what is clearly a difficult time regardless of which direction they choose.
> Best regards
> Carey Ramm
> Principal Economist
> AEC Group Ltd




At each step seek advice as there are a multitude of organizations and agencies waiting to provide gratis help.
Can anyone add or insert a step or two? If you are a specialist please contribute and give some guidance or direction on your Step specialisation. My thanks to Mr Carey Ramm.
:sheep:


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## daisy (21 January 2009)

Slight Edge said:


> I'm not saying that Clients don't deserve some of the responsibility - but the bully tactics used in the last 18 months have been horrendous and I feel for those people who dared to ask the hard questions and get shot down. ..........
> 
> I think people need to search a little deeper than some of the prima facie commentary - there are many parties at fault and yes, clients, as humans bear SOME of the blame - not all of it.




I have a feeling some of this is probably addressed at my rant earlier. I must have got up this morning and put my opinionated hat on. 
Maybe I didn't express myself very well but if this is directed at my early morning bigmouth session I would like to clarify that at no point did I intend to lay blame at anybody's doorstep. 

Blame as far as I am concerned is one of the most pointless of human emotions because it changes absolutely nothing. 

What I was trying to express was that if you see yourself as a victim of someone else's behaviour then you deny the fact that you are in charge of  your life. 
If you see yourself as a victim of your own behaviour then you are able to acknowledge the fact that you are the person who has control over your life, look inside yourself to see where you have made mistakes and attempt to change those things about yourself  which have got you into stormy waters.

This is my personal philosophy.


----------



## sqwark7600 (21 January 2009)

Judd said:


> What I find interesting is that some of the Storm clients consider that they were unsophisticated.  What does that mean?  Somebody who does not know the difference between a direct share and a managed fund: who thinks that the All Ordinaries is just that; who is totally unaware that a loan from a lender be it against shares or a mortgage or credit card, has to be repaid at some stage?  Or is it someone who saw or heard about the investment returns friends, relatives and/or colleagues were getting and decided that they wanted some of that?
> 
> Strewth, it is not so long ago that I lost my family close to $0.5m - and it could have easily been more.  So who do I blame?  The broker for executing my trades?  The lender for allowing me to have so much money to lose?
> 
> Nah, decisions rest solely with the investor in my view.




I think we are much less unsophicated than we have ever been and I bet there are more punters in this world who can dissitate about collaturalised debt obligations as well as margin lending exit strategies.
Who do we blame for the biggest share collapse since the great depression? We will be blaming in hindsight and ad nausium, with the usual suspects as scapegoats. 
So like you did yourself, let's just get on and fix it and with the hope that maybe some of the unfortunates amongst us can map out a way of picking up the pieces and the regulators can yet again try to ensure that it doesn't happen again.
Let the horse floggers desist.
:whip


----------



## daisy (21 January 2009)

daisy said:


> I have a feeling some of this is probably addressed at my rant earlier. I must have got up this morning and put my opinionated hat on.
> Maybe I didn't express myself very well but if this is directed at my early morning bigmouth session I would like to clarify that at no point did I intend to lay blame at anybody's doorstep.
> 
> Blame as far as I am concerned is one of the most pointless of human emotions because it changes absolutely nothing.
> ...




I've just realised I used the word stormy. There was no pun or implication intended.


----------



## awg (21 January 2009)

Julia said:


> Yes.
> 
> 
> 
> ...




Hi Julia, 

see attached, $100,000 is the quoted figure

http://www.theage.com.au/news/busin...-under-scrutiny/2007/03/19/1174152976959.html




carey ramm said:


> Hi
> 
> 
> 
> ...




Excellent post in my opinion.


FWIW, I think ASIC will want to make an example of the Storm principles, if they have breached ANY regs, cause they have made ASIC look incompetent.


----------



## Glen48 (21 January 2009)

can see the court case:

Lawyer to Victim: So the bank lent you money that they shouldn't have?
Victim: Yes
How much did they lend you?
Victim: I don't know exactly, about $XXX
Lawyer: Did you sign this document that states the amount that the bank lent you?
Victim: Yes
Lawyer : If you had of made a large profit would you give some money back to the Banks?
Investor: errr No why should I?
Lawyer : What would have done if you made a profit?
Investor: Give some to my kids, buy a new car, pay off the house, play the Pokies.


----------



## sqwark7600 (21 January 2009)

With respect:


daisy said:


> I have a feeling some of this is probably addressed at my rant earlier. I must have got up this morning and put my opinionated hat on.
> 
> I read your posts and most others on this thread with interest and stimulation.
> 
> ...



And so may it be.


----------



## Sir Osisofliver (21 January 2009)

Judd said:


> What I find interesting is that some of the Storm clients consider that they were unsophisticated.  What does that mean?  Somebody who does not know the difference between a direct share and a managed fund: who thinks that the All Ordinaries is just that; who is totally unaware that a loan from a lender be it against shares or a mortgage or credit card, has to be repaid at some stage?  Or is it someone who saw or heard about the investment returns friends, relatives and/or colleagues were getting and decided that they wanted some of that?
> 
> Strewth, it is not so long ago that I lost my family close to $0.5m - and it could have easily been more.  So who do I blame?  The broker for executing my trades?  The lender for allowing me to have so much money to lose?
> 
> Nah, decisions rest solely with the investor in my view.





Judd they mean a sophisticated investor as defined by Australian Corporations Law

http://www.asic.gov.au/asic/asic.ns...issued+by+a+qualified+accountant?openDocument

If you have assets over 2.5 million or an income greater than 250,000 for the last three years you are entitled to be classed as a sophisticated investor which means that.

a) You do not need to be given a prospectus to participate in a capital raising.
 and more importantly
*
b) You do not need to be provided with a Statement of Advice*

There is other stuff - go look at the link if you are interested.

cheers

Sir O


----------



## vincent191 (21 January 2009)

What good is a PI insurance policy? PI only covers negligence, error & omissions. In this case I wonder if it fits into any of the three criterias?  

The next important fact is, PI insurance requires you to notify the insurer the moment that you are aware of any circumstance that could lead to a claim. 

Hence, for the policy (if they had one) to respond, Storm would need to notified the insurer the minute they knew the fund is losing money due to their negligence. Notifying the insurer after the Company had failed is too late.

If I was the Insurance Company, I will be sleeping very well. In my opinion if Storm did have a PI policy and you were to lodge a claim against the policy, you will have little chance of success.

Remember, if you had lost money because the share market went down is not in itself a valid reason to lodge a claim. You will have to proof that Storm was negligent and made an error in giving you the advise.

The simple reasoning that "I had losted all my money following the share market collapsed and it was Storm that advised me to buy shares, therefore Storm had been negligent in giving me that advise" will not wash in a court of law. 

Storm could have given the advise in good faith and for years investors were making a profit and never complained. Now they have collapsed and suddendly it is negligience?? Come on, pull the other leg.


----------



## daisy (21 January 2009)

Sqwark,
When I first learnt about investing I read lots and lots. A common thread was that in the world of finance you should never rely on hope.

I guess what I'm worried about is that some of the people that got caught up in this didn't really understand what they were doing and hoped. 

Now my concern is that once again these people are relying on hope.re litigation etc.
Personally, I think they've got Buckleys. It may be unjust but as they say the law is not about justice.

That indemnity thing may get them a little back. I don't know enough about that to analyse it but from the looks of things it won't be that much.

I know you keep on saying get your life together first but if they are banking on winning court cases then that hope will colour the life that they are trying to rebuild and as Cuttlefish said take energy away from the monumental effort they are going to have to make just to put the pieces back together again now.

Everybody has the right to choose how to handle their lives but hope does not an informed decision make. Maybe I'm just being an overprotective mother hen......


----------



## TheAbyss (21 January 2009)

Glen48 said:


> can see the court case:
> 
> Lawyer to Victim: So the bank lent you money that they shouldn't have?
> Victim: Yes
> ...




How did you get to be so cynical Glen? Try this.

40 year old share investing son (lets call him Glen) to parents, why did you give them your money to invest you know i could have told you what to do?

Parent, Beryl at the cent auction said that they were really good and if i didnt do something i would be eating dog food when i retire as the government canned pensions. Plus you always tell me how busy you are and that i should have a portfolio, whatever that means.

Glen, But didnt you realise they said your house was worth more than it really was and your job paid less than they said? 

Parent, Yes but they said that was what they had to do to ensure the paperwork flowed smoothly and that they would look after it all for me.

Glen, But they borrowed squillions which now you have to pay back!

Parent, how was i to know? All i knew was i paid money each month and they said i would be able to retire with dignity.

Not all are after a quick buck Glen42, most of these people were probably just after a secure retirement with a few luxuries after decades of toil. Cut them some slack unless you know better.

 I am not a storm investor and do not know any but i do know my mother would have walked straight into something like this if her luck was out.


----------



## Julia (21 January 2009)

awg said:


> Hi Julia,
> 
> see attached, $100,000 is the quoted figure
> 
> http://www.theage.com.au/news/busin...-under-scrutiny/2007/03/19/1174152976959.html




Hi Awg, Thank you for that.
So that's the amount payable via FICS.  I'd have thought, though, that planners would have quite separate personal Prof. Indemnity Insurance through an insurance company, just as, say, doctors do.
Earlier in this thread an IT consultant said he/she had to carry a significant insurance.

Sir O:  I've previously asked if you could comment on this?






> FWIW, I think ASIC will want to make an example of the Storm principles, if they have breached ANY regs, cause they have made ASIC look incompetent.




Hmm, making ASIC look incompetent is not hard.


----------



## nomore4s (21 January 2009)

TheAbyss said:


> Not all are after a quick buck Glen42, most of these people were probably just after a secure retirement with a few luxuries after decades of toil. Cut them some slack unless you know better.
> 
> I am not a storm investor and do not know any but i do know my mother would have walked straight into something like this if her luck was out.




Abyss, that's fair enough but he does have a point, if the bull run had continued and they made money the clients would be praising the FP.

It's a lesson to all - don't blindly follow advice from anyone and understand the risks.


----------



## Julia (21 January 2009)

With apologies for interrupting the discussion, could posters who want to quote a previous post please do it using the QUOTE tags as Joe has directed, so it appears clear which is the previously posted quote and which are your own remarks.  Here is the thread with how to use the QUOTE tags.

https://www.aussiestockforums.com/forums/showthread.php?t=2737

A mistake I made when first using these was not realising that the initial QUOTE is different from the final one, i.e. the final one has a '/' inserted.


And if anyone is copying and pasting, no need to do that, just click on the REPLY button at the bottom right of the post you want to quote.

If you want to quote more than one post, first click on the MULTIQUOTE
button for any post(s) then that button plus the QUOTE button on the final post you are quoting.  They will all appear and you can insert your comments in between them.

Sorry if I seem picky, but it's sometimes difficult to sort out from some posts which part is quoting someone else and which part constitutes your own words.


----------



## awg (21 January 2009)

Julia said:


> Hi Awg, Thank you for that.
> So that's the amount payable via FICS.  I'd have thought, though, that planners would have quite separate personal Prof. Indemnity Insurance through an insurance company, just as, say, doctors do.
> Earlier in this thread an IT consultant said he/she had to carry a significant insurance.
> 
> Sir O:  I've previously asked if you could comment on this?




That sort of Professional Indemnity Insurance has limited liability as well.

Typically $5-20million. ( the insurance Co wont take on unlimited liability)

I would be fairly sure that conditions of payout would limited as well


----------



## Julia (21 January 2009)

Slight Edge said:


> I can't believe the gall of the advisers, particularly the principals who "GAMBLED" on their businesses in the big roll up to the mothership prior to the float - and now, the principles are crying foul and demanding payment for their businesses... I can tell you for a fact they did so on the proviso that the payout would happen when Storm floated and they all had stars in their eyes - They were quoting multiples in the 15-17's for their shareholdings, and had openly discussed that if the float didn't happen straight away, they'd bide their time until it did.



When you refer to "the principals" here, do you mean the previously independent small FP's who sold to Storm?


----------



## Julia (21 January 2009)

awg said:


> That sort of Professional Indemnity Insurance has limited liability as well.
> 
> Typically $5-20million. ( the insurance Co wont take on unlimited liability)



Per client, or in total, awg, do you know?




> I would be fairly sure that conditions of payout would limited as well



 You'd have to think so, which is why I suggested earlier that 'negligence' would quite likely not be an acceptable criteria to an insurance company.


----------



## Julia (21 January 2009)

Hello Carey,
Many thanks for your useful comments.


carey ramm said:


> Hi
> 
> I know there has been a wide range of comments on this forum about lawyers (and how useful they will be) but the reality is that in most of the cases i have seen these storm clients do have grounds for legal recourse against several banks. When u provide credit for both home loans and margin loans there are very strict rules and procedures that must be adhered to by the banks.



So action taken against the banks is more likely to be because they have failed to adhere to these rules than because they have loaned inappropriate amounts on the initial equity loan?  Or failed to check income declarations?




> 1. Contact your home and margin loan providers and request copies of the actual loan application forms and associated consumer credit contract schedules - they must give them to u so be firm. It may take a few days for u to receive these documents.



Wouldn't it have been routine for clients to have had all this documentation at the time of the loan being granted?



> 2. Review the asset, liabilities and personal income details contained in the loan applications - look for irregularities such as: is your declared income correct or has it been overstated?



Wouldn't this have been checked by the client before the loan application went in?  If not, then it seems you're suggesting Storm may have altered these details.


----------



## awg (21 January 2009)

Julia said:


> Per client, or in total, awg, do you know?
> 
> 
> You'd have to think so, which is why I suggested earlier that 'negligence' would quite likely not be an acceptable criteria to an insurance company.




I am almost certain that Storm "losers" would not be able to look towards the insurance companies, UNLESS gross negligence of some kind was done by individuals,(theft, fraud), on a case by case basis.

Insurance Companies dont stay in business by taking on excessive risk

Also most "small" companies only buy as much as they realistically think they need, due to premium cost.

In my experience, the regular policy is for $10 million TOTAL.

If you want more, like a mid-size Co, you would have to negotiate an individual contract with the IC.

I seriously doubt that an Insurance Company would allow cover for poor stock market advice losing multi-millions, they would have clauses protecting themselves.


----------



## Julia (21 January 2009)

awg said:


> I am almost certain that Storm "losers" would not be able to look towards the insurance companies, UNLESS gross negligence of some kind was done by individuals,(theft, fraud), on a case by case basis.
> 
> Insurance Companies dont stay in business by taking on excessive risk
> 
> ...




Yep, you're echoing my thoughts on this.


----------



## Julia (21 January 2009)

The following comment from Mr Scattini is taken from the news item link for which is currently on ASF Home Page:



> Mr Scattini said the collapse was brought about by "the greed of Storm and the banks".
> 
> He said Storm Financial investors were given bad advice by banks that should have known better




Isn't it Storm who were providing the advice?   What 'advice' did the banks give?  Presumably this is the start of Mr Scattini attempting to focus blame on the only likely source of money.


----------



## stormedup (21 January 2009)

Monario said:


> 1) Why were storm, and the advisors so reluctant to sell under investors instruction? I myself, and have heard from many people that when the instcruction was given to sell that it was refused. Why? If I had suffered a 10-20% loss and felt it time to get out why were we held in against our wishes? I was held in up to around 102%.




 The majority of staff was asking that same question and the majority of staff were kept in the dark.  Only the Cassimatis’, Storm’s financial advisors and their senior staff could answer that.  

Some staffroom conversation suggests that:

Storm thought that it could just convert to cash the $2.5billion of client’s investments in the “Storm Badged Indexed Funds” at their instant demand. (The consequences of dropping $2.5b was irrelevant), Colonial and Challenger didn’t see it that way.

It seemed to be common knowledge around the offices that Storm advised Colonial not to sell down when clients went into margin call.  When things turned nasty, those very same senior staff denied this and claimed the opposite.

Storm thought that CBA/Colonial would tide them over, leaving clients in margin call until the market improved.  (Mr & Mrs Cassimatis and their senior staff are notorious for their arrogance and assumed dominance over all associated parties (including Colonial and Challenger as well as any other bank/margin lender that wanted a piece of the action).

It would be reasonable to believe Colonial’s claim that Storm were advised daily of their client’s situations.  (I think I read that somewhere).  All staff had access to the Colonial website.  After logging on, the very first information available showed the exact number of clients in margin call, the number in buffer zone and the number close to buffer zone.  This was consistently showing at around 600 to 700 clients in margin call.

Storm did not want the cash that clients held used to pay off their margin loans.  If the cash was used up there would be no funds available “to buy back in”.  That meant no future income, (commission, fees, trails etc) for Storm.

This may make some sense to the more investor savvy among you.
​


Monario said:


> 2) How and where did the last 2 dividends that were drwan by emanuel come from? maybe this is the obvious, but are you telling me, he took dividends/commisions on margin loans and empty portfolios from failed investors? I mean where did the 24mill in the last 6months come from..




My apologies, the $24m was from the 2008 year.  Still collected a million dollar salary though, and flew themselves and family around in their jet while claiming they were suffering too.​


----------



## daisy (21 January 2009)

Can I ask a really stupid question here?
When people wanted to get money out of Storm they clearly had a battle on their hands. Some managed to win the battle some didn't. O.K.

But if this money that people were building up in the market during the good times (forget the last year or so) was meant to be retirement income and you had to fight to get it out then what was the actual plan to release funds for retirement.?


----------



## Duckyt (21 January 2009)

In support of stormedup - another ex-employee - I should also assure everyone of the arrogance of this couple.  From their on-going behaviour - it was obvious they didn't believe 'laws' applied to them - check out the last two highly publicised court battles - with the Federated Clerks Union back in the early 1990's through to the Ozdaq name debacle.  Staff meetings back  in the old days was that Emmanuel would make a great politiican and be able to reshape Australia !!  I'm talking visions of making it to the top job!  

Another interesting thought - the strategy that started it all back in the 1990s when it was just them (no tertiary degree between them) ?  so was it flawed from the start ?  It seemed full-steam ahead and get the qualifications later.  It just made me laugh when I checked out the website and both Julie, Emmanuel, Stuart & Bernardine were all being touted as the wonderful highly tertiary educated professionals - certainly didn't start out that way.  Let's also just say, I wouldn't be surpised if there are claims made of forging signatures !!! 

That the new allegations of oxygen & listening devices wouldn't raise my eyebrows - it would also appear to be staying true to their character.

I hope that they get their just desserts - but - also I'm not holding my breath.  But I am a big believer in karma and this collapse (due to his arrogance) will hopefully act as some sort of moral wake up call !  Remains to be seen.


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## awg (21 January 2009)

stormedup said:


> []
> 
> 
> Storm thought that it could just convert to cash the $2.5billion of client’s investments in the “Storm Badged Indexed Funds” at their instant demand. (The consequences of dropping $2.5b was irrelevant), Colonial and Challenger didn’t see it that way.
> ...





One thing you can be ABSOLUTELY certain.

Colonial etc would have email AND digital tape recordings of all their recent correspondence with Storm.

plus top notch legal advice.

the decision making ****-ups would mainly be down to Storm.

that will come out when that corro is released in court.

Storm could have issued instructions to Colonial to sell down or even liquidate.

As for the 24 hours notice of corporate loan withdrawal by CBA, happens all the time, especially when they realize their security is compromised


----------



## basilio (21 January 2009)

I think that what has happened with Storm is just the more extreme example of most of the financial planning and for profit investment companies which have developed in the last 20 years.

The theory is that these organisations are developing strategies to help us, the public, save for the future.  The savings plans, investment analysis and so are theoretically for our benefit....

*The reality is that the system is in place for the companies and the most effective employees.* Full Stop. End of story.

The entry fees, exit fees, management fees, trailing commissions and so on ensure that at the end of the day much of any surplus generated has gone as profit or costs ( salesman's wages.)

Storm was simply a turbo charged version of this process.

The clearest indication of the truth of this is the rise in the last 15 years of  union based super funds. When compulsory super was established it became clear that traditional financial organisations - Banks, Insurance companies,- were just not going to offer the value that a member owned operation could establish. The simple facts are that  managing and investing funds is not rocket science. It deserves a good wage not millions of dollars a year.

*Year in and year out the figures come up the same - industry funds are cheaper in terms of costs and actually give better returns that retail (bank/ Insurance) organizations.* Simple facts lost in the marketing lies of self interested financial sharks.

I remember with great cynicism the earnest efforts of insurance companies persuading  teachers and public servants to get out of government guaranteed defined benefit super schemes to join their expensive plans. It was a crock of sxxx then - it is even smellier now.

As far as storm goes, I think there is benefit in a class action on behalf of investors against the promoters and the banks. I suggest both were in commercial collusion against the interest of the clients. I think that could be a key to the case.

*APRA Research on superannuation Fund Performance Oct 2008*



> While some retail funds earned relatively high net returns and some not-for-profit funds earned relatively low net returns over the five-year period, retail trustees using balanced or growth investment strategies for default investment options generated significantly lower net returns on average than not-for-profit trustees using balanced or growth investment strategies.
> *
> The study found that the main component of differences in net returns between fund types is expenses. Retail fund expenses, explicit and embedded, lower the net earnings of the retail sector relative to the not-for-profit sector.
> *
> The study also found that *neither asset allocation nor investment manager skill explained differences in net returns between fund type*s. The study also examined the net return and fees for an investor with a $50,000 starting balance in each fund type. This confirmed the net under-performance of retail funds compared with not-for-profit funds and showed that retails funds have higher fees (annual, entry and exit) than other fund types on average.




http://www.apra.gov.au/media-releases/08_27.cfm


----------



## Garpal Gumnut (21 January 2009)

Storm Financial group needs to be the subject of a Royal Commission and I call on our elected representatives to hold one.

Thousands of people have lost millions of dollars in this debacle.

Allegations have been made in the press today of up to 300 clients being pepped with oxygen in a seminar room, of funds being taken out prior to Christmas by the principals and of illegal taping of clients conversations by "advisers". 

As well as Storm, ASIC and the FPA (Financial Planners Association) should be in the terms of reference, as their tolerance of this financial groups errors, incompetence and possible illegal activities has been astoundingly bereft of proper governance.

gg


----------



## jonnycage (21 January 2009)

im with you there GG

as another local (and thankfully not effected)  its really quite shocking
what has happend.


jc


----------



## shibby (21 January 2009)

Remember, if you had lost money because the share market went down is not in itself a valid reason to lodge a claim. You will have to proof that Storm was negligent and made an error in giving you the advise.

The simple reasoning that "I had losted all my money following the share market collapsed and it was Storm that advised me to buy shares, therefore Storm had been negligent in giving me that advise" will not wash in a court of law. 

Storm could have given the advise in good faith and for years investors were making a profit and never complained. Now they have collapsed and suddendly it is negligience?? Come on, pull the other leg.[/QUOTE]

For goodness sake really read some of the entries we are not whingeing we know we have done something unbelievably stupid but the arguement is that we wanted out, we knew we needed to get out, my trusty little excel sheet doesn't lie and yet I still didn't threaten to take legal advice I assumed there was some thing some where I was missing re the whole concept.  I was brought up to believe that you go to the experts for advice.  I have a BEc with a double major in economics and politics but I never studied financial planning. I went to an expert I paid an expert and didn't respect my own instinct/inteligence that the ship was sinking.  I kept saying I will lose my house and I was told I wouldn't.  And this didn't all happen overnight we were tortured for months and months and months.  I guess I just didn't have the balls.


----------



## daisy (21 January 2009)

Shibby,
What you are going through must be dreadful. But please be kind to yourself.
Self recrimination doesn't change anything. 
Most of the commentary today has been in regards to people's hopes that they are going to get their financial status restored through litigation. The cynics amongst this forum have expressed their opinions of that, for the most part not to be rude or offensive but to shake the blind faith that some of storm's clients have that the courts will fix it and make everything O.K. again. 
It seems as if some people are hanging on to that as their salvation. And are probably going to waste the rest of their lives running backwards and forwards from courts and lawyers and letting this eat them up. 
It's not easy to start again and the older you get the harder it is. But you are obviously a highly intelligent and I will assume from that resourceful woman. You have grandchildren who must bring great joy into your life. Focus on all the beautiful things  that you have  in your life and try to lay this to rest. That's not going to be easy when you have financial problems but you are clearly a strong and determined woman and you will find a way.


----------



## daisy (21 January 2009)

the mistake I made in my last post is that I left "and forwards"  out  and it didn't make sense.


----------



## eieio (21 January 2009)

Unfortunately, many kids are not educated in Real-World financial management while at school; this simply reflects the view of government that worker-bees don't really need to know about how to manage their financial affairs effectively and conserve the capital that results from any productive labour that they might engage in. Culpable neglect on the part of government imo. Thats one of the reasons why we have the Storm Financial debacle......there are a few others of course, most of them covered on this thread.

Once upon a time only doctors, lawyers, savvy business persons and the landed aristocracy were into the gearing and margin lending games. This was before bracket creep, which came about due to monetary inflation, promoted by government as the way to the never-never land of never-ending "growth". The feds consciously colluded with the RBA to feed a gigantic Ponzi scheme based on negative gearing - real estate initially, followed by the stock market. With bracket creep, everyone had to get in on the tax-minimisation thingy. Threw money into what are essentially non-productive assets to get a big ATO cheque each year. A total joke. Eventually, the "authorities" even allowed the peddling of CFDs to "just your average mum and dad" with a spare half a million or three...WTF!!!! Heck, we already had negative gearing, margin lending, Lotto, the casino, the TAB.....  All this crazy gearing was bound to end up causing lots tears some-day; that some-day has now dawned.  

Keating tried to knock negative gearing in real estate on the head - I think that he may have foreseen the long term disastrous nature of the beast. Look where he got with that!


----------



## Joe Blow (21 January 2009)

I realise that some people participating in this thread may not be familiar with the use of the 







> tags that are used to show that you are quoting from another person's post(s) but when they are messed up the result can be very confusing as sometimes it is not clear what is being quoted and what isn't. I have had to go through and fix the quote tags on several posts in this thread in an attempt to clear up some confusion over who is saying what.
> 
> For those unfamilar with the quote tags I urge you to review this thread before continuing: https://www.aussiestockforums.com/forums/showthread.php?t=2737
> 
> ...


----------



## Solly (21 January 2009)

Bill Buckby of KordaMentha said, "Cassimatis' large personal fortune, which includes various properties – one a multi-million dollar house on Melton Tce – and a Learjet, would be untouched because they were not used as securities for the company."

It appears not everbody needed to borrow against their home.....

Story from the Townsville Bulletin;
http://www.townsvillebulletin.com.au/article/2009/01/21/34121_hpnews.html


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## sam76 (21 January 2009)

Solly said:


> Bill Buckby of KordaMentha said, "Cassimatis' large personal fortune, which includes various properties – one a multi-million dollar house on Melton Tce – and a Learjet, would be untouched because they were not used as securities for the company."
> 
> It appears not everbody needed to borrow against their home.....
> 
> ...




nihonjin desuka? Yamabushi wa Mountain Priest desuka? Naze sono namae alanda no?


----------



## Julia (21 January 2009)

Joe Blow said:


> I realise that some people participating in this thread may not be familiar with the use of the quote tags that are used to show that you are quoting from another person's post(s) but when they are messed up the result can be very confusing as sometimes it is not clear what is being quoted and what isn't. I have had to go through and fix the quote tags on several posts in this thread in an attempt to clear up some confusion over who is saying what.
> 
> For those unfamilar with the quote tags I urge you to review this thread before continuing: https://www.aussiestockforums.com/forums/showthread.php?t=2737
> 
> ...



Thanks, Joe, for again calling attention to this.  I brought it up a couple of pages ago but no one seems to have taken any notice.  Even just before your post here, there are posts where it's very difficult to distinguish between the post being quoted and the new remarks.  If the Quote tags aren't used properly, we also don't know whose post you are quoting from.


----------



## Solly (21 January 2009)

shibby said:


> ...............
> 
> I guess I just didn't have the balls.




Well shibby......the next call is yours....you've got the balls now.... What's your next step??


----------



## cuttlefish (21 January 2009)

shibby said:


> For goodness sake really read some of the entries we are not whingeing we know we have done something unbelievably stupid but the arguement is that we wanted out, we knew we needed to get out, my trusty little excel sheet doesn't lie and yet I still didn't threaten to take legal advice I assumed there was some thing some where I was missing re the whole concept.  I was brought up to believe that you go to the experts for advice.  I have a BEc with a double major in economics and politics but I never studied financial planning. I went to an expert I paid an expert and didn't respect my own instinct/inteligence that the ship was sinking.  I kept saying I will lose my house and I was told I wouldn't.  And this didn't all happen overnight we were tortured for months and months and months.  I guess I just didn't have the balls.




Well you do yourself credit by objectively assessing and acknowledging your situation and your own involvement in it.  Reading your earlier post it sounds like you came into the Storm situation through an unfortunate set of coincidences rather than actively choosing to invest with them. Regardless of how it came about, as you've stated yourself - the reality is that you probably didn't have the courage of your convictions at the time the situation was occurring - but you also didn't have the benefit of hindsight that you do now.  As you state - you weren't an expert and they may have been right - the market may have turned around - and you may have looked the goose if you'd insisted on withdrawing your funds at that time.

It sounds as though you weren't alone both in your suspicions about where things were headed, or in being brow beaten into not acting to remove yourself from the situation.  If you do actually have records of faxed or emailed instructions to close out your debt you are probably on good grounds for a claim via the professional indemnity insurance channel.  

If you don't have these then you probably didn't assert yourself strongly enough - but you are not alone in finding it difficult to have the courage to remove yourself from a difficult situation.  History is littered with examples of it - often involving far more serious consequences than the loss of wealth - particulary if we factor in the cult like atmosphere that seemd to surround this company - but even without being pulled into the hype it would still have taken a lot of courage to back your own point of view against that of supposed experts.


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## Solly (21 January 2009)

sam76 said:


> nihonjin desuka? Yamabushi wa Mountain Priest desuka? Naze sono namae alanda no?




sam76, No, I'm just an ordinary Aussie from the Hinterland Ranges....Not so much a Mountian Priest, more someone who dwells or hides around the mountain ranges..maybe a bit of a Solitary existence...but never backs away from adversity


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## Garpal Gumnut (21 January 2009)

sam76 said:


> nihonjin desuka? Yamabushi wa Mountain Priest desuka? Naze sono namae alanda no?




Kon'nichi wa. Watashi wa Gumnut Garpal desu. Hajimema****e.

gg


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## shibby (21 January 2009)

Solly said:


> Well shibby......the next call is yours....you've got the balls now.... What's your next step??




Meaning the balls in my court? 
You know right at this moment I don't have a clue, except survive.


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## daisy (22 January 2009)

shibby said:


> You know right at this moment I don't have a clue, except survive.




Shibby,
That *is* step one on the road out of this mess. These b's might have taken your money. But as trite as this may sound money isn't everything. Don't let them take anything else. Just take one day at a time and a plan will emerge. 
Something I heard once about how to deal with the aftermath of a catastrophic event in your life was to use all your self discipline and allow yourself  half an hour and only half an hour each day to think about what has happened. For the rest of the day whenever the horror that you have been through threatens to take over your thoughts you schedule it to be emotionally dealt with in the time period that you have allotted. 
It was from a young woman who had suffered the most horrible of facial injuries as a result of an accident. 
But she was a survivor too.


----------



## daisy (22 January 2009)

Solly said:


> Bill Buckby of KordaMentha said, "Cassimatis' large personal fortune, which includes various properties – one a multi-million dollar house on Melton Tce – and a Learjet, would be untouched because they were not used as securities for the company."
> 
> It appears not everbody needed to borrow against their home.....
> 
> ...




All I can say to tha is they had better not plan on living in that house ever again because they would be in extreme danger of someone breaking into their house in the middle of the night and.....
In fact I'll go further and say they probably won't be able to live in this town ever again. At worst their lives will be danger at best they will be treated like lepers.
But they probably already know that so I imagine they'll move into another town and set up shop again under a different name.
That is if they can still get a financial planners licence. But surely  ASIC will  prevent these people from ever operating in this field again....

Although that really doesn't matter I suppose unless the regulatory authorities examine what has happened here and put controls in place to ensure it cannot happen again, next bull market someone else will start up doing exactly the same thing.
So I would suggest to all those who have been hurt by this and want justice and are determined to fight through the system accept the fact that your money has gone and you will not get it back and direct your anger and energy at trying to ensure that this doesn't happen again. Make that the focus of your rage and allow it to direct your actions and the course you take rather than seeking personal compensation.


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## Solly (22 January 2009)

shibby said:


> Meaning the balls in my court?
> You know right at this moment I don't have a clue, except survive.




Correct, Great you've checked that box.

Have you sort any legal advice regarding your _own_ position ?
Have you contacted your credit providers to see what is negotiable and to see if any other opitions are available to you.
I gather you are in NSW, Senator John Williams has been vocal about the event, see if he can offer anything more than hot air.
Why not touch base with the Storm Investors Consumer Action Group to see if there's anything benefical for you there.

Let us all know what progress you are making.

Also here's a report 
*Macquarie denies abandoning Storm clients *
Macquarie denies abandoning Storm clients and sets up a team dedicated to servicing affected clients.
"We have a dedicated team servicing the Storm clients who have margin loan facilities with us. We ask that clients contact us directly if they would like to discuss their margin loan options," the spokesperson said.

Here's the story, keep them to their word.
http://www.investordaily.com.au/cps/rde/xchg/id/style/5609.htm


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## Smiley (22 January 2009)

Well if being rude to the Storm adviser's face, asking to sign a form to get out is what you call being assertive, I did . . . and just got out with a pittance still in the market; they stalled.  
Though Macquarie cashed out the rest of my huge margin loan in a few days. 
The next step is the Storm Investors Consumer Action Group being formed by John McLennan (met in sou qld and will meet in Townsville next week) and I will try the lawyers - just to keep up the bad publicity and perhaps stir up the FPA and ASIC.


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## tiktok (22 January 2009)

Could someone please provide contact details for the Storm Investors Consumer Action Group?

thanks


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## Smiley (22 January 2009)

I have done a lot of online searches for the action group and no luck but am hoping there will be a public notice in the T'ville Bully about next week's mtg soon; and after the meeting I will post any contact details I have.  Anyone else out there with info on it, yes please let me know too, if you have any contacts now.


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## daisy (22 January 2009)

Smiley said:


> The next step is the Storm Investors Consumer Action Group being formed by John McLennan (met in sou qld and will meet in Townsville next week) and I will try the lawyers - just to keep up the bad publicity and perhaps stir up the FPA and ASIC.




Go Smiley, I don't have a personal involvement in storm except to say that it was a such a close shave that as this mess started to emerge I felt physically sick. And every time there was another story my stomach churned. Don't know how I'd handle it if it were me. I only know how I like to think I would handle it. Which would be with the positive perspective that you seem to have.


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## investorpaul (22 January 2009)

A family member was about to sign up with this mob about 12-18 months ago (basically at the top of the market). She went through with the majority of the paperwork but they handed it back to her and said wait 6 months because she was a guarantor on a loan and would have trouble getting a margin loan facility set up. 

Since then she has let me look at the paperwork and the fees and notes from meetings. They wanted to charge nearly $50k just to set the thing up! and their ongoing fees where crazy. The only reason she became aware of storm was when she used to work for a financial planning company which was bought out by Storm and the owners had to "work" their clients to convert them to storm clients. 

I feel sorry for any one caught up in this mess but was just wondering if anyone originally had a different financial planner that was subsequently bought and then were convinced to switch their original plan to storms?


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## Rastan (22 January 2009)

I have a question about Storm from reading the article on the weekend in the Sunday Mail. (Please excuse me for not going through the many pages of this thread).

It mentioned that the people may not get 'something back' - what is this 'something back'? Does that mean that when Storm bought the shares that they kept them in Storms name (i.e. didn't put them in the buyers name)? This sounds really strange that you would sign up for a loan and let a broker buy shares for you and not put them in your own name...

If they bought shares for their customers and put them in the customers name (e.g. what you would expect) and then the shares went kapput then how is this different to everyone else? As in boo hoo, join the queue... I met a MCQ broker 6 months before the crisis and now half my life savings are gone via a margin loan but I dont expect 'something back'. I bought the shares fair and square (on a big fat loan using my home equity), shares went kapput - I lost all my money - I don't expect anyone to 'pay me back'.

I have always wondered what the fuss was about - either you were so silly you let someone buy thousands of dollars of stock for you and keep in their name, or you bought shares in your own name and they went down and now you're left holding the pieces... 

Obviously there is something I am missing in this particular situation...?


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## shibby (22 January 2009)

investorpaul said:


> I feel sorry for any one caught up in this mess but was just wondering if anyone originally had a different financial planner that was subsequently bought and then were convinced to switch their original plan to storms?




Yes I did.


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## shibby (22 January 2009)

Rastan said:


> Obviously there is something I am missing in this particular situation...?



In my case, even though you asked to get out it just didn't happen, this is a bit of a common thread and if you start reading backwards you will see what I mean.
I remembered last evening that a pretty standard reply after my request was that it will be impossible/difficult to get back into the market. Blah blah blah gobbly gook gobbly gook.  Not blaming them, blaming me. I am not a *victim*.


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## vincent191 (22 January 2009)

Rastan.....generally speaking and I say again generally speaking.....when a Company goes broke, the liquidator sells all the assets of the Company. The proceeds from the sale is distribute according to legal priorities. The secured lenders i.e. the banks will get the first bite of the cherry.

Employees entitlements and the ATO gets the next bite of the cherry, the comes the creditors and anything left goes to repay shareholders or unit holders.

As reported in the news Storm may have paid out a $2m didvidend and other payments to a related party after learning that it is insolvent. There is a strong possibility that the liquidator will "claw back" such payments. 

It is also illegal to continue trading whilst insolvent, I hope ASIC will be investigating this. And I also hope the ATO is owed a lot of money by the Directors of Storm because the ATO has deep pockets and if they think any of the Directors have committed illegal acts then the ATO will pursue the full course of action and may even win judgement to sell off their personal assets.


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## sqwark7600 (22 January 2009)

Smiley said:


> I have done a lot of online searches for the action group and no luck but am hoping there will be a public notice in the T'ville Bully about next week's mtg soon; and after the meeting I will post any contact details I have.  Anyone else out there with info on it, yes please let me know too, if you have any contacts now.



Sara Elks wrote in the Townsville Bulletin yesterday: 


			
				Sara Elks said:
			
		

> Meeting organiser John McLennan said the situation was a "human tragedy" and he expected several hundred people to attend the meeting.
> "The stories are the same," Mr McLennan told The Australian before the meeting.
> "They're self-funded retirees who wanted to provide for their retirements ... and now they've lost everything."
> Mr McLennan is the former senior Westpac employee turned whistleblower who exposed major banks over the Swiss franc loans scandal in the 1990s.
> ...




Smiley I think you will find that the Action Group is in the very early formative stages and will take a while to get rolling.
I started with the Bulletin and they said that details of the Townsville meeting will be in their paper tomorrow.
They provided an internet address and I have sent an info request.
It is

sicag-tsv@live.com.au 

Damian Scatinni is the lead lawyer for Slater and Gordon and had no detail on the meeting.
Senator John Williams office whilst very helpful also had no detail.
I was upfront and admitted that I was not a Storm victim so maybe they were suspicious of my motives. 
Anyway good luck.
:sheep:


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## sqwark7600 (22 January 2009)

A word of warning. The enemy also trolls these threads. Be careful.
:badsmile:


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## sqwark7600 (22 January 2009)

Townsville Bulletin today:

"Storm Investors Consumer Action Group (SICAG) spokesman Mark Weir said there had been a huge response from crushed investors in Townsville and the Burdekin.
"We have the best intentions to be up there next Wednesday night," Mr Weir said. 
"We haven't yet secured a venue, but we're hoping word of mouth and the network of Storm clients will swing into action."
Mr Weir said there was `any number' of devastated clients from Townsville and the Burdekin who wanted to be represented by the consumer action group.
The group was endorsed at a meeting of about 400 angry investors who packed into the Golden Ox reception centre in Redcliffe on Tuesday night.

Full story:

http://www.townsvillebulletin.com.au/article/2009/01/22/34271_news.html

:sheep:


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## Rastan (22 January 2009)

Ahhh stupid me - people invested in the _company_  I thought it was a financial advisor (whilst risky, but considering the past 5 years it looked good) who organised individuals to setup margin loans and buy shares etc. Was it publicly listed? Is that what the kerfuffle is about then - investing in this company and then it going kapput (a'la ABC)?


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## Smiley (22 January 2009)

sqwark7600 said:


> A word of warning. The enemy also trolls these threads. Be careful.
> :badsmile:




What do you mean?


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## daisy (22 January 2009)

At the risk of sounding paranoid, sqwark does have a point. A fact that I did consider when I made an earlier remark with no intention of it being a threat just a very obvious statement of fact.


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## sqwark7600 (22 January 2009)

Smiley said:


> What do you mean?



I mean that people who may have a different agenda to yours will troll a site in order to glean any information on a situation for their own benefit; or argue their own contrary case in a seemingly friendly format for the same reason. I have seen it on another professional chat site. My acid test is don't post anything you wouldn't want your enemies to know or you wouldn't want quoted in the media. Paranoia maybe, but something to consider.
:sheep:


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## daisy (22 January 2009)

Hi everyone,
I realised last night that I had been mighty pushy in expressing my opinion yesterday. I guess I got a bit carried away.  I’m sorry if I came across as overbearing. 
Of course people have the right to resolve this issue for themselves however they choose. Please don’t let my personal cynicism and negativity affect that decision. It was just my personal opinion and is worth no more than anybody else’s personal opinion.
Please everybody who has been caught up in this just do whatever you need to do and what is right for you in order to get through what must be a horrible time and move forward into a brighter future.
I'm new to forums. It never occurred to me that there could be plants among the forum members.


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## Julia (22 January 2009)

Rastan said:


> Ahhh stupid me - people invested in the _company_  I thought it was a financial advisor (whilst risky, but considering the past 5 years it looked good) who organised individuals to setup margin loans and buy shares etc. Was it publicly listed? Is that what the kerfuffle is about then - investing in this company and then it going kapput (a'la ABC)?




That was my impression also, i.e. that clients are in trouble because of excessive leverage plus failing to exit the market at appropriate time.

  The float failed.  Did individuals still invest in Storm as a private company?


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## daisy (22 January 2009)

sqwark7600 said:


> I mean that people who may have a different agenda to yours will troll a site in order to glean any information on a situation for their own benefit; or argue their own contrary case in a seemingly friendly format for the same reason. I have seen it on another professional chat site. My acid test is don't post anything you wouldn't want your enemies to know or you wouldn't want quoted in the media. Paranoia maybe, but something to consider.
> :sheep:




Sqwark,
you've made me paranoid now. I'll be scared to say anything at all.


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## myusernam (22 January 2009)

have any storm clets had any success with getting break fees of the margin loan back?  I seem to remember this possibility being floated around.  I was with maquarie and had to pay a break fee, also have a fixed home equity loan with CBA that will cost too much to break.  Just wondering if anyone had any success and if it's worth having a go.


also those affected please dont let this take more than your money.  I have made a promise to myself that it wont affect my marriage or my childeren's happiness.


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## Judd (22 January 2009)

daisy said:


> ....I'm new to forums. It never occurred to me that there could be plants among the forum members.




Let's put it this way:

"Infamy, infamy, everybody's got it in for me."  Thanks Ken.

Just because others may be paranoid does not mean that you need to be.


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## daisy (22 January 2009)

Thanks Judd. It was making me crazy.


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## awg (22 January 2009)

sqwark7600 said:


> A word of warning. The enemy also trolls these threads. Be careful.
> :badsmile:




Hi all,

yes be prudent,

following my posts on Brisconnect thread re some suggestions I made, I received a PM, that made me a little suspicious, somewhat leading, could have been genuine?

As has been pointed out, dont put in print something not defensible in court.

You can be sued for lible/slander, or even encouraging improper conduct.

be especially careful if you are a Company Director.

If I was being attacked, I would certainly want to know what my attackers were saying, for several reasons.

most forums have trolls lurking


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## cuttlefish (22 January 2009)

Julia said:
			
		

> That was my impression also, i.e. that clients are in trouble because of excessive leverage plus failing to exit the market at appropriate time.
> 
> The float failed. Did individuals still invest in Storm as a private company?



I think Storm may have run their own index funds (i.e. a Storm badged index fund) and the margin loans used to invest in that.  I'm not sure - it would be interesting to hear this aspect clarified - what exactly did Storm invest peoples borrowings into - and how was the title to the assets (be they stocks, units in a trust etc.) registered/managed?   Did investors get statements showing where their money was invested with its value updated on a regular basis or anything like that?


Daisy - re paranoia - be alert but not alarmed ...     Its a public forum, anyone can read it, I've seen newspapers quote forum posts sometimes to support articles - not something to be paranoid about but something to keep in the back of your mind when posting on here.


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## Rastan (22 January 2009)

cuttlefish said:


> I think Storm may have run their own index funds (i.e. a Storm badged index fund) and the margin loans used to invest in that.  I'm not sure - it would be interesting to hear this aspect clarified - what exactly did Storm invest peoples borrowings into - and how was the title to the assets (be they stocks, units in a trust etc.) registered/managed?   Did investors get statements showing where their money was invested with its value updated on a regular basis or anything like that?




Something like that would explain it. As I said before I cant uderstand what the stink is if the shares were bought for the customers and put in the customers name (apart from the fact they are financial adivsers and you would obv expect better). This is essentailly what happened to me - take out a margin loan, bang financial crisis, margin calls + opimism = nothing left. 

But yeh if they took the customers money and put it into their own fund (esp if they knew at the time it was sinking) and it dissapeared then there's cause for concern. Don't forget though a LOT of fin advisors didnt 'see this coming' and up to a very late point in the game I imagine their past performance looked pretty good (i dont know just guessing based on the past 7 year bull market).


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## daisy (22 January 2009)

Thanks everyone for your comments re paranoia. I must be a little paranoid at the best of times because I did realise last night that I'd been a bit vocal yesterday and then this morning I got the wrong end of the stick and thought I might be construed as a troll pushing an agenda for reasons other than personal concern. It was making me crazy. 
And thanks for the warning also. I will be "alert but not alarmed."


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## asproboy (22 January 2009)

sqwark7600 said:


> A word of warning. The enemy also trolls these threads. Be careful.




Has anybody seen the E&J Cassimatis team lately?

It strikes me that with their business empire shut down, a nation of angry (and freshly-impoverished) clients - and their lawyers - running around, and a cool $26M allegedly siphoned out as 'dividends' over the past year, surely it'd be a snip to take the private jet out for an unscheduled spin to check out the real estate options in Majorca?

I hear Pixie Skase is heading back home; perhaps she's got something over there to rent?

Enough tongue-in-cheek; I just hope that the people behind this apparent cunningly-manipulative operation are held to account for their failure to offer appropriate advice to their clients who followed them faithfully (if perhaps thoughtlessly). I truly feel for the clients who have been used as an over-inflated cash cow.


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## Smiley (22 January 2009)

The email link for the advocacy group did not work - sent an email and it bounced back.
No one I know who has tried for a reduction in break fees has been successful.


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## sqwark7600 (22 January 2009)

cuttlefish said:


> it would be interesting to hear this aspect clarified - what exactly did Storm invest peoples borrowings into - and how was the title to the assets (be they stocks, units in a trust etc.) registered/managed?   Did investors get statements showing where their money was invested with its value updated on a regular basis or anything like that?




Storm had eight funds in their own name (~badged: 3 non-index and 5 index) with James Packer's Challenger Group as the responsible entity and listed on their site. Challenger - Storm Australian Broadmarket Indexed Trust dropped 77.2% from it's peak in May 2008 to a few days ago.

And so your two questions are very relevant.
However, it seems we will have to wait for this to unfold in the press as few details on the mechanics of Storm's customer relationships have surfaced; and that would be a pity as I see a few conflicts of interest down that street. Maybe they have been advised to remain mum by their silks.
There is next to no contact information on the Storm Investors Consumer Action Group (SICAG)...except for an email address which doesn't respond to simple info requests:
sicag_tsv@live.com.au 
Presumably they are slowly getting their act together; but to get 400 people together at Redcliffe someone had to have a mailing list and some energy. Something may be in the Townsville Bulletin tomorrow.
Your watch.
:sheep:


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## sqwark7600 (22 January 2009)

Smiley said:


> The email link for the advocacy group did not work - sent an email and it bounced back.
> No one I know who has tried for a reduction in break fees has been successful.



My try didn't bounce it just wasn't answered nor was my try to ABC investigative journalist Jonathon Hall. Couldn't contact Sara Elks who has been covering for the Australian. I believe the Townsville Bulletin must have their papers printing now so their night editor may be up and about, worth a try. 
.....SICOG is beginning to fail my smell test. 
Mark Weir is supposedly their spokesperson and John McLennan their motivational activist; both from Brisbane I understand.
:sheep:


----------



## Solly (22 January 2009)

asproboy said:


> Has anybody seen the E&J Cassimatis team lately?
> 
> It strikes me that with their business empire shut down, a nation of angry (and freshly-impoverished) clients - and their lawyers - running around, and a cool $26M allegedly siphoned out as 'dividends' over the past year, surely it'd be a snip to take the private jet out for an unscheduled spin to check out the real estate options in Majorca?
> 
> ...




Well asproboy, we now need to rely on our handpicked team of government and legal professionals to apply remedies, that is if the are warranted....
Time will tell..


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## daisy (23 January 2009)

I’ve only just remembered this and I don’t know if this information is of any use to anybody but...
As I’ve already said in 2000-2001 I knew nothing about managed funds. We had some money with another FP up here who had promised us by the time we wanted to retire we would have a certain amount of money. Then we got our annual statement and we had lost money. I didn’t understand about bull and bear markets .  I just assumed the FP we were with wasn’t any good.  I now understand that at the time we were in a bear market, so all funds would have been losing money.

So we started doing the rounds of FPs. We also responded to cassimatis’s T.V. ad and made a booking for the seminars. Before they commenced we visited another FP, who operated on his own. 

During that interview I mentioned we had booked into Cassimatis’s seminars. The FPs response was that he had people trooping in and out of his office all day long asking him to help them get them out of Ozdaq. Which is what Cassimatis called his operation then.  At the time I dismissed this as professional rivalry and sales talk. Now of course I realise that they were probably people trapped in the same situation as many people find themselves in now.

Now I’m getting into conjecture and hazy memory. But I think the name ozdaq was meant to mirror the nazdaq. And I think that the actual investment vehicle was an IT index fund which ozdaq had designed itself (by that I mean it was their own selection of stocks that comprised the index.)

Also again hazy memory but I’m almost certain  that I read somewhere that ozdaq was investigated by ASIC and cleared. I’ve tried to do an internet search for that info but can’t find it. So I may have my facts wrong. 
I’m not offering this info as a negative influence but more as if ASIC  did investigate last time around and cleared them then maybe they do have a case to answer, particularly combined with the fact that one of storms directors sat on the FP review board.


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## daisy (23 January 2009)

As far as trolls gleaning the site for information,,, I am going to assume that I am not the most intelligent person on this planet and anything I say here has probably already been considered by those whose job it is to consider .
I do intend however to be more careful of things I say as regards threats libel slander and incitement.


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## Judd (23 January 2009)

daisy said:


> ........Also again hazy memory but I’m almost certain  that I read somewhere that ozdaq was investigated by ASIC and cleared. I’ve tried to do an internet search for that info but can’t find it.




This is the PDF of Reasons for Decision by IP Australia (Trademark stuff.)  I believe that there was also a Federal Court case in which Ozdaq lost.

I should also mention that around 2000 - 2003 there were various index trusts under the Ozdaq badge, for example

http://www.search.asic.gov.au/cgi-bin/offerlist/offerlist?doc_no=016881736&time=200108250541

There was also Ozdaq Securities Pty Ltd (providing proactive financial solutions of course) headquartered in Buderim.  I'll let you guess the names of the principles of that organisation.


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## Solly (23 January 2009)

*Storm Financial's unpaid acquisition trail*

"The collapse of Storm Financial has left a trail of unpaid bills, with the worst hit being the financial planners who sold their businesses to the group during its expansionary era and who are yet to be paid.

Storm Financial owes $28.4 million to the vendors of financial planning businesses acquired by the group, the administrators have found. This is the most substantial amount owed by the group, with the Commonwealth Bank of Australia (CBA) owed $27.09 million."

Story by Lucinda Beaman is here:

http://www.moneymanagement.com.au/article/Storm-Financials-unpaid-acquisition-trail/435456.aspx


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## Solly (23 January 2009)

*FPA criticised over Storm Financial*

"Financial services commentator Paul Resnik has used a column to be published in Money Management next week to strongly criticise both the Financial Planning Association (FPA) and the Australian Securities and Investments Commission in the wake of the Storm Financial collapse."

Mike Taylor's story is here:
http://www.moneymanagement.com.au/Article/FPA-criticised-over-Storm-Financial/435458.aspx


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## daisy (23 January 2009)

In one of my very first posts into this forum I said that I liked Mr. Cassimatis and I was puzzled as to how this disaster happened. That’s actually how I came to this forum...looking for an answer. I couldn't understand how he let this happen. Blind Freddy could see this crisis coming.
But as more and more stories emerge about the way he handled his affairs I have revised my opinion and light has dawned.
Cassimatis sure was a great salesman. We weren’t prepared to bet our house but he still sucked me in.


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## daisy (23 January 2009)

daisy said:


> Blind Freddy could see this crisis coming.




By Blind Freddy I mean anybody who is involved with the market and watches it and reads about it. Which surely C. did.


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## Glue (23 January 2009)

One thing that seems to come up on this forum is self education and that storm clients should have been better self educated. I think it needs to be kept in mind that a lot, perhaps the majority of people are lacking in time (I can imagine your responses to that!) and more importantly capability. Not everyone is born equal, and it can be difficult to know where to start and how it relates to ourself.

 Also, at this stage the clients who have lost the lot or even a lot will be grieving and there are many stages to this, and some people will get stuck along the way, and eventually most will get through it, the human mind is pretty resiliant. I myself got caught and am seeking help to get out of the situation.

 Please keep in mind even the uneducated in financial world deserve the opportunity to do more than tuck money in a cash account or under the bed and we do need fp help to retire comfortably.Thanks I feel better i have that off my chest!:


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## asproboy (23 January 2009)

daisy said:


> Cassimatis sure was a great salesman. We weren’t prepared to bet our house but he still sucked me in.




As I suggested earlier - cunningly manipulative: a person with extensive industry experience who created an entire system stacked wholly in his favour, then executed a beautiful drama that capitalised on a market growth cycle, inspiring a cult-like following amongst clients whose wealth was being gouged as they made their paper returns.

'Responsible' financial prose was twisted and exploited to explain away the obvious conflicts of interest in play. All this appears to have motivated - and then preyed on - people's extreme greed then, as the drama reached a crescendo, an inevitable correction causes the whole system to implode, leaving nothing but a hastily-withdrawn dividend trail...

Evil is an intelligent and seductive beast.


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## daisy (23 January 2009)

Agree Glue,
If the gov'ts expectation is that we are to  provide for ourselves in our "golden years" then somewhere along the line education needs to be addressed. I know that some schools do now have classes and kids compete against each other and papertrade the ASX. I don't know if that is an elective subject or a cirriculum requirement. 
I was able to get into this because at the time I started I wasn't working and I viewed it as my contribution to our household. I embraced my studies  as a full time occupation. But once I got over my initial just learning what all the words meant I discovered that I was fascinated by the whole subject and it became my hobby. Very confusing when I started though.


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## Slight Edge (23 January 2009)

PLEASE PLEASE PLEASE - if you're one of the clients who have lost everything DONT let the advisers build a case to have their businesses paid for... as I have stressed before - all of those advisers... YOUR advisers knew the risks and gambled on the float in the hope that they'd be millionaires on the float of the company. Their greed cost them and it cost you...

You all deserve compensation first and foremost - Demand from your local members an enquiry and complain to Worrels, Korda Mentha, Scattini, your news papers and news services - those advisers weren't blind...just blinded.

Remember - the hungry wolf takes the most risks.


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## daisy (23 January 2009)

Slight edge,
Would those businesses be considered secured creditors?


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## Slight Edge (23 January 2009)

daisy said:


> Slight edge,
> Would those businesses be considered secured creditors?




It seems so due to the report from the administrators but I wonder if they are correct in the interpretation... I know most of the principals who are making this claim and I can tell you for a FACT that they knew what they were doing and were spending the money well and truly before they got it. 

I am amazed that how quickly they have abandoned the sinking ship - perhaps a commentary on their integrity? I know that the local principal and his little sidekick have already been contacting clients to let them know that they are going to re-establish a business and wants to know if the clients so affected will consider going back to them!

Best of luck with that - I just hope people aren't so forgiving. Remember who your ADVISER was in the last 12 months.


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## mitasol (23 January 2009)

Thank god I listened to own scepticism about 2 yrs ago when I went to a storm seminar. The two most memorable parts of that evening was the emphasis on the fact that the guy presenting the seminar was ex-Commbank, the other was learning how to avoid the heard mentality. An old employer of mine had also referred to the principal as "Count your fingers" so perhaps that had already affected my judgement  

I went to a Dallecort seminar as well and whilst not as "slick" it was still the same idea. I went away, did my numbers, factored in a few variables and decided not to risk the house.

I can empathise with those caught though, the presentation was very slick and so were the presenters.


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## daisy (23 January 2009)

Glue said:


> Please keep in mind even the uneducated in financial world deserve the opportunity to do more than tuck money in a cash account or under the bed and we do need fp help to retire comfortably.Thanks I feel better i have that off my chest!:




I know this is off topic but... 
I don't think the problem is using financial planners as such. If you are an extremely busy person they offer a service just like a dog washer. You know how to wash your dog but you are busy and you pay someone to do it for you. And you can assess whether the dogwasher is doing a good job or not. If it's still got fleas...

The problem with people using FPs is not having even the slightest idea about how the market works. So they have no idea about what is going on and/or why.
And so it's not possible to  assess the performance of their FP and people just have to take their word for it.

In all bookshops and on ebay there are heaps of books of a general nature about this subject. If you want to use FPs you don't need to know the intracies of the details but a general overview would empower decision making.


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## vincent191 (23 January 2009)

Even the professionals and the experts have been caught by Madoff. So, what hope does the ordinary person have?

So, I have gone back to the age old philosophy "if it sounds too good to be true, it most probably isn't."

I think it all comes back to greed. Despite mathematical proof that it was impossible for the Madoff scheme to make the returns that it was making, nobody wanted to listen

The same goes for the Storm debacle. Even if someone had advised some of the victims of the risk and not to do it, do you think they would have listened? 

The promoters were excellent salespeople and very impressive with their lavish lifestyles and parties (similarity with Madoff) they exploited one of our primitive instincts - GREED.


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## Happy (23 January 2009)

daisy said:


> I know this is off topic but...
> 
> I don't think the problem is using financial planners as such. If you are an extremely busy person they offer a service just like a dog washer. You know how to wash your dog but you are busy and you pay someone to do it for you. And you can assess whether the dogwasher is doing a good job or not. If it's still got fleas...





People should have right to expect sound advice from Financial Planner.

After all you are not expected to understand how bus or train works and you are not expected to drive it.

You are also not expected to understand or conduct open-heart surgery.

Why do you have to understand finances, after all you pay money to have it arranged for you.


Problem is FP often do not look after you but only care for who pays them more commission, retainers and ongoing payments for the life of investment.

High-risk investment should not represent high proportion of retirement investment.
Also investment should be structured to never evaporate completely.

It is not hard to achieve, but FP are not too interested, as it effectively cuts into their chop and they are not that ‘stupid’.


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## daisy (23 January 2009)

Happy said:


> People should have right to expect sound advice from Financial Planner.
> 
> After all you are not expected to understand how bus or train works and you are not expected to drive it.
> 
> ...




 You're right of course, people should have the right to expect sound advice from a financial planner. But that isn't the reality as you yourself,have pointed out


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## ROE (23 January 2009)

People should learn to manage their own money 

It amaze me, people go to uni, get degree work so far for their cash yet they don't put any effort into understand
how to manage their money and just blindly hand their cash to someone else to manage


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## Happy (23 January 2009)

daisy said:


> You're right of course, people should have the right to expect sound advice from a financial planner. But that isn't the reality as you yourself,have pointed out




I would push it a little bit further, responsibility should be with FP after all if train/bus driver does something wrong is responsible for their actions, you do not sign the clause – understand how it works and enter at your own risk.

How come FPs get away with it?

Is it ever going to change?

Hope it is not going to change the other way that you’ll have to understand and do everything yourself after paying a fee for the professional.


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## cuttlefish (23 January 2009)

Happy said:


> People should have right to expect sound advice from Financial Planner.
> 
> After all you are not expected to understand how bus or train works and you are not expected to drive it.
> 
> ...





No - but people do occasionally get caught in train, plane, bus and ship wrecks - sometimes at the hands of drunk and/or incompetent drivers/pilots/captains.

And there are good surgeons and bad surgeons.  (I'm pretty sure the bad ones are usually performing less intense procedures than open heart surgery though!)   e.g. 'Dr' Jayant Pattel in Queensland managed to do an enormous amount of damage and cause quite a lot of deaths before 'the system' eventually pulled him up.


If your surgeon, who just came back from the ACME prosthetic limb conference/  XYZ Pharamceuticals stomach bypass technology conference etc. and is eyeing off the latest yacht catalog whilst recommending you have the latest you beaut treatment performed ... well ... lets just say that not many people have major surgery without getting at least one second opinion and usually a few second opinions.  

(Obviously the vast majority of medical professionals are highly ethical but that doesn't mean they don't get swayed by slick marketing - we've all seen the pressure the pharmaceuticals put on Dr's - every thing on their desk is branded by one drug company or another - they go on conferences funded by pharma's etc. - its hard to believe that they all manage to maintain 100% objectively when being bombarded from all angles in this manner).


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## asproboy (23 January 2009)

Happy said:


> I would push it a little bit further, responsibility should be with FP after all if train/bus driver does something wrong is responsible for their actions, you do not sign the clause – understand how it works and enter at your own risk.
> 
> How come FPs get away with it?
> 
> ...




I completely agree - and so does Corporations Law. Your financial adviser and the firm they are employee representatives of are licensed with ASIC and have a fiduciary responsibility to deliver advice that understands and is tailored to your financial circumstances and objectives.

In this case, they have failed in their obligations and instead acted in blind self-interest. Complaints need to be raised, compensation for irresponsible and damaging advice needs to be claimed and charges need to be laid. It is time for this industry to be held accountable for their actions so the responsible operators (and there are many) do not get tarred with the same brush as these miscreants.


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## daisy (23 January 2009)

I guess the problem is that people *think *they have the right to expect sound financial advice from an FP.
That is what this forum is all about.

People *should* be able to expect sound financial advice from an FP. 
But because of trailing commissions etc I don't have any idea of how the industry could transform itself into one which meets that expectation.


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## ROE (23 January 2009)

daisy said:


> I guess the problem is that people *think *they have the right to expect sound financial advice from an FP.
> That is what this forum is all about.
> 
> People *should* be able to expect sound financial advice from an FP.
> But because of trailing commissions etc I don't have any idea of how the industry could transform itself into one which meets that expectation.




There lies the conflict of interest and people continue to lose money listen to someone else...Better off look after the money yourself.. 

You can not provide people good advices when your salary is based on commission.. Look after the clients interest and you could be out of a job or earn little..or stuff the clients and earn yourself big bucks.... hmmm 

Read Warren Buffett The snowball and he absolutely hate his stock broking job early in life as there it conflict with his clients interest...sell crab stocks to client to get better commission or quality one where it get very little commission. He end up quiting and becomes an investor instead where his money and client money sit on the same side.


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## vincent191 (23 January 2009)

How do you determine what is sound and not sound. The law is already in place for those who give unsound advise with the intend to commit fraud.


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## Julia (23 January 2009)

vincent191 said:


> How do you determine what is sound and not sound. The law is already in place for those who give unsound advise with the intend to commit fraud.




I don't actually know, but I'd be surprised if Storm's faulty advice could be proven as being given with the intent to commit fraud.

And presumably it will be legal definitions such as this which will determine whether they are eventually actually charged with anything at all.

Meantime, the lawyers will wage a campaign of trial by media (already happening) and be in no hurry to reach a conclusion as the megabucks roll in.


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## daisy (24 January 2009)

Julia, I think the lawyers doing this are the ones that you don’t pay unless you win. So I don’t know about the megabucks rolling in. Unless you mean all that lovely free publicity that they are getting in their trial by media  is bringing their name to the fore and other unrelated cases are rolling in as a consequence.


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## Solly (24 January 2009)

Happy said:


> People should have right to expect sound advice from Financial Planner.
> 
> After all you are not expected to understand how bus or train works and you are not expected to drive it.
> 
> ...




I'd expect expert advice especially with the money they would be making out me


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## daisy (24 January 2009)

Solly said:


> I'd expect expert advice especially with the money they would be making out me




Yes I would too. I’d actually think that the higher the fees the better the quality of advice I’d be getting.


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## Solly (24 January 2009)

I have been speaking with a couple who have lost their life savings and are about to lose their house after being stormified. They are terrified about what is ahead and have asked me for help. I come from a background where you are used to seeing hard things but even I found it difficult to listen to their story. They were about to enjoy retirement but now it is back to work. But they still blame the Comm Bank and not storm for their dire state. They still believe the strategy was sound. I wonder how many other are like this?


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## pilots (24 January 2009)

vincent191 said:


> Even the professionals and the experts have been caught by Madoff. So, what hope does the ordinary person have?
> 
> So, I have gone back to the age old philosophy "if it sounds too good to be true, it most probably isn't."
> 
> ...



V191, Peoples greed is most of the trouble, what makes me mad is 99% of all financial advisers are only sales men, no different to a car sales man, would you give your life savings to a car sales man


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## daisy (24 January 2009)

Townsvilles Bulletin today has an article about SICAG.

In it Mr. Scattini of Sater & Gordon says
"Some of the paperwork I've seen appears to have been forwarded on behalf of clients who had never sighted or signed it"

I can't tell from the article where it was forwarded on to ,it could have been to the index fund, but if it was to the banks and they gave out money without signed documentation?????


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## stung (24 January 2009)

I am an ex- Storm client.
When we first joined storm 2 years ago we were very clear about our objectives. Our only child has a short life expectancy and I wanted to stop work and spend time with him. If we made a little extra cash from our investments we wanted to spend it now rather than later to take him on an overseas trip before he became too ill to travel. 

When we had made a paper profit of $180 000 I went to see our advisor to ask for some money to spend,reminding him of our objectives. He was very dismissive of my request and told me I would be silly to remove any profit after such a short time as our investment was not big enough yet. We are in our mid and late 40s and he said as we had left it so late to invest we would be best to build up a bigger portfolio. I actually backed off with my request after a while because I started to feel greedy for asking for some of my own money.

When the market was falling at an alarming rate I made several phone calls to our storm advisor looking for reassurance that all was well. At several of these calls I suggested that we sell and cut our losses. This was actively discouraged and he told me to trust storm as they were watching our portfolio closely and he would keep us out of trouble. I told him that I was afraid of losing our house. He said the only way that would happen was if the market got so low that the banks would collapse and in that case their would be no bank left to collect the debt.

When they finally cashed us out he said it was to " temporarily quarantine our capital in cash" until such time as we could re enter a rising market. When we saw him at a face to face meeting later he revealed to us that there was no chance to re enter the market as there was no money left to do so.

We have now been left with a debt of $630 000. Looks like the house will go after all.


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## Mofra (24 January 2009)

stung said:


> We have now been left with a debt of $630 000. Looks like the house will go after all.



Mate that is absolutely awful, you well and trully have a case against Storm as I believe there is a provision with any AFSL to ensure that the advice provided is appropriate for your risk profile/personal situation (it would appear that Storm's advice clearly wasn't). I sincerely hope things eventually work out for the best for you.


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## alice (24 January 2009)

I have been following this forum after finding it when googling Storm Financial.

My financial advisor was one whose business was acquired by Storm.  I am very fortunate that my investments are with  the Managed Fund he originally arranged  and I have “only” suffered the losses most people have on the spiraling All Ords.

I have a margin loan which is not at margin call, however I am losing sleep over this and have decided to opt out altogether.  My peace of mind is worth more that any profits I may eventually make.

This may not be the place to ask – but as this advisor is not answering calls, or emails and seems to have disappeared I am hoping someone may tell me – how do I organize to do this – do I approach the bank who holds the loan or do I approach the fund.  I am an absolute novice and have no idea where to start.


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## Glen48 (24 January 2009)

From what i am lead to believe Mr. & Mrs. Storm have collected the loot and done Sakes and living O/S???
Also the Jet and all the other trappings can't be collected by the receivers.
This is one law that needs to be changed if ever there was an incentive to rob it is this law.


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## Solly (24 January 2009)

alice said:


> I have been following this forum after finding it when googling Storm Financial.
> 
> My financial advisor was one whose business was acquired by Storm.  I am very fortunate that my investments are with  the Managed Fund he originally arranged  and I have “only” suffered the losses most people have on the spiraling All Ords.
> 
> ...




Alice give the Financial Planning Association a call that's a start.


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## alice (24 January 2009)

Thank you - I will look them up and call them after the long weekend.


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## awg (24 January 2009)

alice said:


> I have been following this forum after finding it when googling Storm Financial.
> 
> My financial advisor was one whose business was acquired by Storm.  I am very fortunate that my investments are with  the Managed Fund he originally arranged  and I have “only” suffered the losses most people have on the spiraling All Ords.
> 
> ...




In my opinion, you should immediately contact an accountant and or solicitor.
 Hopefully you already have access to ones that you have dealt with before.

Immediately obtain the appropriate email address of your FP, Margin lender and Managed Investment Fund, send them all a receipted email stating you are unable to contact your FP and wish to make changes to your financial arrangements.

As soon as you have decided what they are, after discussion with the above mentioned, send receipted emails to the relevant organisations, requesting what you want done, and confirming the outcome.

Once you have done that, issue crystal clear instructions via receipted email.

Re the accountant and solicitor...they will probably cost you about $150- $250 per hour.

I recently spent $1000 for a solicitor to do a few hours work for me, that ended up probably saving me about $10,000 over 2 years.

You may wish to discuss your situation with other FP organsitions, if you lack the knowledge or confidence to manage your own arrangements.

If you can find a good one, they should be able to assist you to resolve your situation.

If you cannot contact your FP at all, might be worth phoning ASIC to see if his company is still operational, definately attend his office in person, if possible and attempt to ascertain, if he is just on holidays or has dissapeared..I personally would ask neighbouring businesses...I would also not hesitate to track him down to his home address ( preferably by phone)


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## daisy (24 January 2009)

awg said:


> http://www.theage.com.au/news/busin...-under-scrutiny/2007/03/19/1174152976959.html




awg posted this website a while ago about financial planners indemnity insurance. Its dated 2007. Does anybody know if the amount of the payout was upgraded as the article suggests it would be?


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## daisy (24 January 2009)

stung said:


> I am an ex- Storm client.
> We have now been left with a debt of $630 000. Looks like the house will go after all.




Stung, as if you weren't already dealing with enough. From one who has been there I know there is nothing I can say or do. I hope you all get through this O.K.


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## Julia (24 January 2009)

daisy said:


> Julia, I think the lawyers doing this are the ones that you don’t pay unless you win. So I don’t know about the megabucks rolling in. Unless you mean all that lovely free publicity that they are getting in their trial by media  is bringing their name to the fore and other unrelated cases are rolling in as a consequence.



The lawyers being engaged by the banks, Challenger, and for that matter the Storm principals are somewhat unlikely to be dependent on the no win - no fee arrangement.


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## Julia (24 January 2009)

stung said:


> I am an ex- Storm client.
> When we first joined storm 2 years ago we were very clear about our objectives. Our only child has a short life expectancy and I wanted to stop work and spend time with him. If we made a little extra cash from our investments we wanted to spend it now rather than later to take him on an overseas trip before he became too ill to travel.
> 
> When we had made a paper profit of $180 000 I went to see our advisor to ask for some money to spend,reminding him of our objectives. He was very dismissive of my request and told me I would be silly to remove any profit after such a short time as our investment was not big enough yet. We are in our mid and late 40s and he said as we had left it so late to invest we would be best to build up a bigger portfolio. I actually backed off with my request after a while because I started to feel greedy for asking for some of my own money.
> ...




Stung, I'm so very sorry about your situation, just awful for all of you.
If you've kept written records of all your contacts with your adviser that will be useful.  If you haven't, perhaps write down now as much as you can remember with dates if possible.  This will probably drag on for years and your memory will fade.

I so hope the prognosis for your child turns out not to be the case.  Doctors are not always right.
Best wishes.


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## Smiley (24 January 2009)

"He said the only way that would happen was if the market got so low that the banks would collapse and in that case their would be no bank left to collect the debt." My adviser stated exactly the same thing Stung.  

I am so sorry to hear your story and while I have heard many similar and am also involved it supsets me.  

If you are in Townsville there is an action group meeting at 6pm at Ryan Community College Hall.


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## bunyip (24 January 2009)

Happy said:


> People should have right to expect sound advice from Financial Planner.
> 
> After all you are not expected to understand how bus or train works and you are not expected to drive it.
> 
> ...





When it comes to investments, expecting sound advice from financial planners is like expecting sound advice from a car salesman. The Holden salesman will outline numerous reasons why you should buy a Holden, the Toyota salesman will put forward his most compelling argument on why a Toyota is the car for you, while the Ford sales staff will obviously espouse the virtues of Fords.
Can this possibly be regarded as impartial or useful advice? Of course not.

Financial planners are tarred with a similar brush. Impartial advice....forget it - the investments they'll recommend are the ones that pay them the highest commissions.

Why do you have to understand finances? Because if you don't, you run the risk of getting yourself badly burnt by those who will take advantage of your ignorance....just ask any Storm client.


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## daisy (24 January 2009)

Julia said:


> The lawyers being engaged by the banks, Challenger, and for that matter the Storm principals are somewhat unlikely to be dependent on the no win - no fee arrangement.




Of course. I forgot about that side. That'll be costing them. Maybe it will be cheaper to settle? fingers crossed.


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## Trevor_S (24 January 2009)

Glen48 said:


> This is one law that needs to be changed if ever there was an incentive to rob it is this law.




I don't agree with that.  I know if I had no protection of a company I may have been unwilling to start my own business back in 1994. Starting a business and having it remain successful can be difficult enough without having to put the very shelter over your head on the line.

No amount of legislation will ensure that shonks and those that are easily taken in by them are protected.

The things I see as some sort of protection are more hourly fee based FP's and education both at a rudimentary school level (something Paul Clitheroe has been arguing for decades) and self taught like many here, that and stay away from things you do not understand.. which is why I stay away from some investment sythetics etc, way to complicated for moi.

That aside...

I suspect that those who are unwilling to help themselves are often beyond help.  Trying to save everyone will see the rest of us suffering adversely, as we do now under tomes of legislation.  A justice system that seems too difficult for nearly everyone to understand, a tax act that is incomprehensible to even the ATO, a superannuation system many don't comprehend and the list goes on.  All we can do is provide everyone with the same opportunities that everyone has available to them in regards financial education and if people don't want to avail themselves of that, then they need to live with the results of that decision.  

While I feel some empathy for those who suffered financial hardship from the Storm debacle, they live in a world of their own making.  My margin loan LVR was at 40% at the end of December, until I decided to pay it out last week entirely with cheaper financing.  

It's the same with my business (which has had no debt for about 7 years and only every grow from cash flow after that).  I do not rely on my Accountant to tell me how well it's doing I look at the figures myself and have my Accountant prepare my tax for me and that's about it but I know MANY business owners that have no idea how well they are doing until there Accountant tell them.  If I had an FP I would similarly not rely on them to let me know how my investments were doing, I would know myself I would want them to provide me information and options on things like Super, Insurances, Trust structures etc certainly not on what leveraging options are suitable to my circumstances, nor what level of leveraging I feel comfortable with.

It's inappropriate use of debt that appears to have had those in Storm in dire circumstances come unstuck.  That, and the ability of the "salesmen" to talk the clients around.


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## Solly (24 January 2009)

Trevor great post thanks. Poor use of credit has seen three of my associates hit the wall. Very ugly outcome.


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## Solly (24 January 2009)

stung said:


> I am an ex- Storm client.
> When we first joined storm 2 years ago we were very clear about our objectives. Our only child has a short life expectancy and I wanted to stop work and spend time with him. If we made a little extra cash from our investments we wanted to spend it now rather than later to take him on an overseas trip before he became too ill to travel.
> 
> When we had made a paper profit of $180 000 I went to see our advisor to ask for some money to spend,reminding him of our objectives. He was very dismissive of my request and told me I would be silly to remove any profit after such a short time as our investment was not big enough yet. We are in our mid and late 40s and he said as we had left it so late to invest we would be best to build up a bigger portfolio. I actually backed off with my request after a while because I started to feel greedy for asking for some of my own money.
> ...




Your post has left me speechless


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## Julia (24 January 2009)

daisy said:


> Of course. I forgot about that side. That'll be costing them. Maybe it will be cheaper to settle? fingers crossed.



I doubt the banks will see it that way.  They will be more  about protecting their reputation than their bottom line.  And rightly so.


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## Julia (24 January 2009)

Trevor_S said:


> I don't agree with that.  I know if I had no protection of a company I may have been unwilling to start my own business back in 1994. Starting a business and having it remain successful can be difficult enough without having to put the very shelter over your head on the line.
> 
> No amount of legislation will ensure that shonks and those that are easily taken in by them are protected.
> 
> ...




You've essentially said it all, Trevor.  Couldn't agree more.  Post of the thread imo.


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## maccka (25 January 2009)

*Storm Investor Consumer Action Group (SICAG)*

Storm clients may be interested to know that the Storm Investor Consumer Action Group (SICAG) are starting to get up and running and have started to put together a website (not quite finished but starting to look very good).

http://stormfinancial.info/index.htm

They are holding a meeting in *Townsville* next Wednesday night.

Details about the meeting can be found here.

http://stormfinancial.info/index_files/Page716.htm

The e-mail contact for the NQ chapter of the group is sicag_tsv@live.com.au 

Please be patient in waiting for a reply as it is manned by a volunteer who is giving up his own time to try to coordinate a NQ response.

Hope this helps you. Good luck.


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## daisy (25 January 2009)

In relation to the FP indemnity insurance:

I found this on the net.

http://www.fpa.asn.au/files/PubAnnualReport07.pdf

It is the annual repurt for The FPA 2007

I'm not good at reading through all the guff but on p.17 it looks as if the payout limit was being mooted to increase to 280k from 100k

 It looks as if the FPA weren't happy about it but 

http://www.mccullough.com.au/publications/publications.aspx?p=47&itm=2216

gives me the impression that an upgrade of some sort did occur. 

Even the full amount (if it were 280k) probably won't be enough to cover some people's losses but at least it's reasonable start again money.


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## daisy (25 January 2009)

daisy said:


> In relation to the FP indemnity insurance:
> 
> I found this on the net.
> 
> ...




 Sorry everyone I'm only half awake. I meant to add this:

Now that I have more understanding of this insurance and given the terrible advice people were given in regards their level of gearing and the battle they had to get out when they wanted to I think a claim against this insurance would probably be successful.
The reason ASIC upgraded the payout limit was because of all those investors who had been sold Westpoint by their FPs.


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## daisy (25 January 2009)

Here's a thought for future users of Fps

Spread your risk. Don't put all your eggs in one basket.

Find out what the payout limit actually is and spread your money across different FPs so you never have more than the upper payout limit with anyone of them. 

Before the bank guarantee last year I ran around and spread our money over 4 banks. My husband thought I was nuts but it was part of my "sleep at night" strategy.

It seems as if C. offered some of his clients assurance by talking about insurance. But he would have known there was an upper payout limit. If I was in the clients situation it wouldn't have occurred to me to ask that question and he banked on that.


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## Smiley (25 January 2009)

Daisy wrote: "Here's a thought for future users of Fps. Find out what the payout limit actually is and spread your money across different FPs so you never have more than the upper payout limit with anyone of them."

I would think that anyone using this forum would think twice about using a FP at all.  My advice woud be to be in charge of your own affairs, read, invest in funds you can do directly like Vanguard, if you want to invest in shares.  FPs won't recommend buying property, as they don't get a commission on such a purchase; though always a solid investment in the long run.  After my experience with Storm, I would be loathe to pay a FP, even if I had the funds.

According to an expert in the financial area, who I know, as of 2008, all FPs had to have insurance.


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## daisy (25 January 2009)

With a bit more searching I found this:

http://www.asic.gov.au/asic/asic.ns...e+arrangements+for+AFS+licensees?openDocument

*IR 07-52 ASIC releases guidance on compensation and insurance arrangements for AFS licensees*

Tuesday 27 November 2007

It's not that hard to read and my understanding of it is that C. should have upgraded by mid 2008

There is still a question someone raised on another forum about whether you can make a claim on an FP insurance after the FP has gone into administration,
Which doesn't make sense to me.

I'll do a bit of digging around on the net and see if I can find an answer.


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## daisy (25 January 2009)

daisy said:


> With a bit more searching I found this:
> 
> http://www.asic.gov.au/asic/asic.ns...e+arrangements+for+AFS+licensees?openDocument
> 
> ...




As regards the question of the FP going into administration all I can find is this passge on the same document. (2007)

_Currently available insurance is unlikely to provide a source of funds where a licensee has become insolvent before the claim was brought. Ideally insurance policies would continue to cover the licensee after it has become insolvent or otherwise ceased business, but we understand this insurance cover is generally not available in the current market to the average licensee. We also recognise that insurers may exclude some areas of cover in currently available policies for risk management reasons.

*ASIC will encourage the development of products that provide insurance cover in these areas by setting a higher standard that we will require licensees to meet after the implementation period*_


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## daisy (25 January 2009)

Smiley said:


> Daisy wrote: "Here's a thought for future users of Fps. Find out what the payout limit actually is and spread your money across different FPs so you never have more than the upper payout limit with anyone of them."
> 
> I would think that anyone using this forum would think twice about using a FP at all.  My advice woud be to be in charge of your own affairs, read, invest in funds you can do directly like Vanguard, if you want to invest in shares.  FPs won't recommend buying property, as they don't get a commission on such a purchase; though always a solid investment in the long run.  After my experience with Storm, I would be loathe to pay a FP, even if I had the funds.




I agree Smiley but just reading some posts it seems some people just can't get this message through. It's talk about what the FP industry should be and not what it actually is. 
From reading some other forums there are obviously some FPs who do operate with integrity but if you don't know anything  you are in no position to make that judgement and are easy prey to the likes of C.


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## carey ramm (25 January 2009)

I wasnt planning on making many posts on these forums. However after reading some recent posts I felt compelled to do so.

For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls.

Come on people - is this really fair and constructive?

So when u go into the doctors u quickly whip up a 5 year medical degree, 2 years of residency and 5 years of practice experience to make u "more educated" so that u can then tell the doctor what they should or shouldnt be doing with your medical advice.

Same goes when u visit the lawyers or the accountants or the electricians, plumbers, mechanics and the list goes on.

So u want to be educated in the financial area - well whip up a quick maths heavy accounting or economics degree, a 2 year securities inistitute post degree diploma then grab 10 years experience split between the financial markets and property so u get a balanced view. Even then u would be a fool to solely take your own advice as it could hardly be objective and will be tainted with the emotions of dealing with your own money.

I am a successful businessman with businesses in most sectors of the economy including being the principal economist of one of the largest economic firms in Australia. I have two degrees in economics majoring in maths, undertaken securities institute courses and 20 years experience at all levels in both the finance and property sector. And even i go to a financial planner as i have learnt from experience that the emotions of second guessing yourself when making your own financial decisions means i cannot be as calculating and objective as when i am normally dealing with other people's money. My partners who are much more clever than I also do the same.

Now i am not saying dont get educated - but do read widely and canvass different opinions. See several financial planners about your financial needs and pick the one that best suits your circumstances.

Unfortunately this is what many Storm clients did and they chose Storm as i am sure they were told we have been round more than 20 years, we are independent as we have our own dealers license, we are one of the biggest, we run our own funds with some of the big names of the industry (macquarie, colonial, challenger), your investments are in indexed funds and not individual shares so this is low risk, and it would go on and on. Even client references were given and many people referred their friends to Storm and we know how powerful that can be. So for many clients they took the leap of faith and trusted the financial advice they were given and being relatively complex advice it made it much harder to question.

There has also been quite a few negative comments about the lawyers. In short the lawyers are doing this on a no-win no fee basis as quite frankly most storm clients are in such a bad position they cant afford a cup of coffee, much less think about running litigation against the banks. Now lawyers like Slater and Gordon do not take on these cases lightly especially when u r taking on someone like the banks and the magnitude of the costs involved. I have been dealing with them on the Storm issue from day 1 and we would not be where we are now if they did not think there were good chances of success. It isnt appropriate to go into detail on the legal strategy here.

I would also point out that Trolls are going through these forums and i would expect them to be encouraging Storm clients to take their losses on the chin and skulk away into the darkness - it is what we had to deal with in Oct, Nov and Dec with Storm when they would spam the boards and letters to editor of papers spruiking everything will be ok or dont blame Storm etc. The banks will be using PR and crisis management firms just like Storm did. Even private investigators......

I would also point out that the media are also very important in this fight and we need Storm clients to tell their story. Only a few brave ones have done that to date. Yes it does take courage but those that have been telling their story in the papers are doing so to make sure this Storm fiasco doesnt happen again and they may stop others from making the mistakes they have made. The media is a great tool for holding banks, Storm and regulators accountable through the impact on their reputation. If u want to tell your story to the media (either with or without disclosing your identity) then please email me at carey@aecgroupltd.com

I would particularly like to thank those Storm clients who stepped forward to do the interviews with Paul Barry and 4 Corners which will go to air on Feb 9. It is this level of investigative jounalism that will help Storm clients get justice. I am sure Allan Bond can agree with that.

If u r a Storm client please read my earlier post on what documents u should be collecting and who u need to contact to join the legal claim. 

Please attend the Storm Action group events - for those in Townsville it is on wed 28 jan at 6pm at Ryan College.

Best wishes

Carey Ramm
Principal Economist
AEC Group Ltd


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## Solly (25 January 2009)

Sunday Mail now reports that Slater and Gordon are filing a lawsuit against Storm executives and others. Let the games begin.........


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## daisy (25 January 2009)

carey ramm said:


> I would also point out that Trolls are going through these forums and i would expect them to be encouraging Storm clients to take their losses on the chin and skulk away into the darkness - it is what we had to deal with in Oct, Nov and Dec with Storm when they would spam the boards and letters to editor of papers spruiking everything will be ok or dont blame Storm etc. The banks will be using PR and crisis management firms just like Storm did. Even private investigators......
> 
> Please attend the Storm Action group events - for those in Townsville it is on wed 28 jan at 6pm at Ryan College.
> 
> ...




There's that word troll again. I don't know about anybody else but for me it induced a level of paranoia into what I assumed was a free and open forum.
Once I got it into perspective I realised that there are many people who partake in this forum who have one agenda or another and I read all posts keeping that in mind.


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## Macquack (25 January 2009)

daisy said:


> As regards the question of the FP going into administration all I can find is this passge on the same document. (2007)
> 
> _Currently available insurance is unlikely to provide a source of funds where a licensee has become insolvent before the claim was brought._




Another example of "donations" that a given to insurance companies. Premiums are paid for "cover" that does not exist.



daisy said:


> Ideally insurance policies would continue to cover the licensee after it has become insolvent or otherwise ceased business, but we understand this insurance cover is generally not available in the current market to the average licensee.




Ideally?



daisy said:


> We also recognise that insurers may exclude some areas of cover in currently available policies for risk management reasons.




"may exclude some areas of cover " -translates to- "read the small print and see that you are not covered".
"risk management reasons"- translates to- "we try to avoid payouts at all costs, thats how we make money".

If the insurance companies are going to wiggle their way out of paying, they should at least refund the "premiums" paid by Storm and give them back to the receiver.


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## Solly (25 January 2009)

I totally endorse Cary Ramm's position in his post above. I always seek the advice and opinions of those much smarter and more qualified than me before proceeding in any venture. For me a DYI approach has always had a reduced result or worse, plus it used more of my precious time.


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## Glen48 (25 January 2009)

Any one investing in any thing needs to realise that the money for their goods to appreciate has to come from another avenue yes some will go up or down a bit more than others but in the long run it has to stop appreciating.
House prices can't keep rising for years if they did wages would have to too keep pace, therefore if some one is setting the World on fire there has to be a catch.


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## DanielleR (25 January 2009)

carey ramm said:


> For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls.
> 
> Come on people - is this really fair and constructive?




Well to start, this is a stock forum.  The majority of people on here have higher understanding of their financial needs/situation than the standard Joe. To call people on these forums trolls just because they are negative towards people who were foolish enough to go with Storm is just plain wrong.



carey ramm said:


> So when u go into the doctors u quickly whip up a 5 year medical degree, 2 years of residency and 5 years of practice experience to make u "more educated" so that u can then tell the doctor what they should or shouldnt be doing with your medical advice.
> 
> Same goes when u visit the lawyers or the accountants or the electricians, plumbers, mechanics and the list goes on.




Now this is what I consider trolling... You don't need 15+ years to have at least some understanding of your financial circumstances.  Do you need this type of education to think to yourself, "Gee what happens if the funds/shares go down?"  

A friend of mine (a financial planner) said one of her potential clients came in with a financial plan from Storm.  It had the client geard to nearly 100%!  She advised the potential client that they do not gear people up that much because it is not responsible.  That client went to Storm even after the advice.  Should we feel sorry for that person?


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## daisy (25 January 2009)

carey ramm said:


> I wasnt planning on making many posts on these forums. However after reading some recent posts I felt compelled to do so.
> 
> For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls.
> 
> ...




Sorry everybody I got the quote tags wrong. So I'm reposting.
When the word troll was first introduced into this forum for me at least it also introduced a level of suspicion and paranoia.
But when I got it into perspective I realised that there are many people who have many different agendas that make posts. I bear that in mind when I'm reading all posts.....


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## Julia (25 January 2009)

carey ramm said:


> For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls.
> 
> Come on people - is this really fair and constructive?



I'm not sure you're being entirely fair yourself here.   I think few people here have criticised anyone for seeing a financial planner.   What has astonished many of us, though, is thatso many Storm clients  agreed to the amount of leverage that has apparently been used over their homes.

I also think it's rather unreasonable of you to suggest that people are not in a position to make sound financial decisions without acquiring all the qualifications you just happen to mention you have.   If you choose to use a financial planner then of course we respect that choice.  But if some of us have been able to  educate ourselves to a level where we are consistently profitable, whether from shares, property or a combination of both, then I don't think it's up to you to tell us we don't know what we're doing.

The analogies with, e.g. a medical degree are spurious.   The specialised training and experience a doctor has cannot be compared with learning how the markets operate.  Any reasonably intelligent person with an interest in taking responsibility for their own outcomes can, with time and practice, acquire the capacity to manage their own financial affairs with assistance as required from an accountant.


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## daisy (25 January 2009)

daisy said:


> As regards the question of the FP going into administration all I can find is this passge on the same document. (2007)
> 
> _Currently available insurance is unlikely to provide a source of funds where a licensee has become insolvent before the claim was brought. Ideally insurance policies would continue to cover the licensee after it has become insolvent or otherwise ceased business, but we understand this insurance cover is generally not available in the current market to the average licensee. We also recognise that insurers may exclude some areas of cover in currently available policies for risk management reasons.
> 
> *ASIC will encourage the development of products that provide insurance cover in these areas by setting a higher standard that we will require licensees to meet after the implementation period*_




I can see that I'm going to have to get a little more savvy about how I post.

The clauses that Macquack has highlighted and commented on was the situation when ASIC put this document together in 2007. 
The clause that I bolded was what they were saying they wanted to see happen with the implementation of the new policy which for C. should have been mid 2008.
So as I read it basically what they are saying is that while in 2007  insurance wouldn't cover claims post insolvency they wanted to see that change with the implementation of their new policy roll out.
I just can't find out if it happened or not.


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## sails (25 January 2009)

carey ramm said:


> ...For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls....




I think public forums such as ASF is more about sharing viewpoints rather than being solely a support forum. I don't believe it's about being right or wrong - it's about the freedom to express one's views and knowing the possibility that someone may well post an opposing view.  IMO, that is simply part of participating in a forum, and especially so with a large, diverse membership.  There have been some very lively debates in quite a few threads on ASF.

Personally, I feel very much for those caught up in this mess. It is distressing to read of their difficulties.   If I hadn’t become a little educated in the stock market, there is a good chance that hubby and I could have been in a similar position.  A FP attempted to “bait” us with a similar proposal couple of months before the markets made its high point. 

IMO, slick marketing becomes very compelling especially when it’s something you would really like or need.  Especially so when you believe you are in the hands of experts. Convincing people to put their hard earned homes on the line and then glibly brushing off their concerns (as outlined in so many posts on this thread) brings into question the level of potentially highly manipulative marketing techniques used on some of their clients.


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## Glue (25 January 2009)

Thanks Carey
your post was  appreciated, when selecting a fp it is hard to sort the wheat from the chaff, but you gave me heart.

cheers
Glue


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## stung (25 January 2009)

My Storm story post is on p 31.

Since I lost our life savings I feel totally stripped of any self worth. I can hardly look my young son in the eye for the guilt about how his life will now change because of my huge debt.

No post  whether it be about  utter greed, sheer stupidity, or of my own making, can make me feel any worse than I already do. But some posts like yours Carey make me feel a tad better. So thanks.


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## daisy (25 January 2009)

In yesterday's Townsville bulletin there were 2 articles about storm. 

One was about the Consumer action group meeting.

The other one was about a feng shui expert who says that just by looking at photos of storms headquarters building  her feeling was that in all probability it had bad feng shui and this would have contributed to the collapse of the company.


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## bunyip (25 January 2009)

carey ramm said:


> I wasnt planning on making many posts on these forums. However after reading some recent posts I felt compelled to do so.
> 
> For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls.
> 
> ...




Well I must be a fool then Carey, because I've got myself financially savvy and have been managing my own investments for years without relying on the advice of investment advisers/financial planners. I know several wealthy people who can make the same claim. And we didn't do it by spending years studying for university degrees in mathematics, accounting, economics or anything else. I've made money all through this financial meltdown, and in the bull run that preceded it, as have quite a few other self-educated people of my acquaintance. Bull market, bear market, flat market....there are money-making opportunities under all market conditions for those who know how to exploit them. At the very least, there are various ways to avoid losing heaps of money in tough market times.
Have any managed funds or financial planners made money during this market slump? If not, why not.....they're supposed to be the experts aren't they? They have pieces of paper to prove it, don't they?
Did any of them have the sense to convert to cash when the financial skyline was looking increasingly dark and stormy?
I'd suggest that those who did would be very much in the minority.

My sister-in-law borrowed two hundred thousand dollars for stock market investment via a financial planner. Initially she did very well....a 100% gain. But then the market showed signs of running into trouble. She was unaware of this until I pointed it out to her....she had handed over the reins to a 'financial expert' to manage her investments, and hadn't bothered keeping herself in touch with what was happening. 
I suggested she reduce her exposure by 50%. After seeking the advice of her financial planner, she decided to hang on. A bit further down the track, the market showed clear sings of having entered a bearish phase. I told her the party was over and it was time to head for the exit gate. Her adviser told her to hang on. She did.
Her gains have evaporated into thin air, and may even turn into serious loss if she continues to hold out.
Now she tells me "I wished I'd listened to you".

What's interesting, Carey, is that even though I didn't go to uni and I have no degrees or professional qualifications whatsoever, the advice I gave her was far more useful than the advice she got from her financial planner.

What I have instead of professional qualifications is, in my opinion, far more valuable....
* a sound knowledge of investment gained through concerted effort in self-educating myself
* a good deal of common sense
* the ability and willingness to adapt to changing situations

I'm not in the least impressed by professional qualifications, no matter how impressive they're made to sound by those who wish to spruik about them.
Professional qualifications are a poor substitute for common sense.....I'll back common sense any day.

Some of us, myself included, have suggested that Storm clients bear some of the responsibility for the levels of gearing they took on, the inaction they displayed when the markets showed very clear signs of caving in and every media outlet was telling us about it every day, and their indecisiveness in letting Storm talk them out of taking defensive action. 
We were quite reasonable in expressing these views, and I believe that the honest Storm clients probably agree with us. 

I find it comical, naive and pathetic that you've attempted to hang the label of 'Storm plants and bank trolls' on anyone who suggested that Storm clients should have kept their finger on the pulse.

So let me set the record straight for you.....I'm not one of those 'Storm plants and bank trolls' you mentioned. I don't for one moment believe that the banks and Storm can be absolved of all responsibility for the Storm debacle.  Believe me, I'm no fan of either banks or financial planners/advisers.
But that doesn't change my view that Storm clients must also shoulder some of the responsibility for what happened.  Nobody passed a ruling forbidding them from having any input into the management of their investments.
Nobody held a gun to their heads and forced them into anything.


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## pacestick (25 January 2009)

I agree with you bunyip you can not beat experience as a teacher. Even though I do hold  degree in marketing and human resource management which included some economics and accountancy It is not the degree that allowed me to claim 2008 as my best year in the market but instead  it was doing hours and hours of research and pu;;ing out half my net profit each time I sold so that I  am in a position to average down when I believe the bottom has been reached  not yet of corse


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## Trevor_S (25 January 2009)

carey ramm said:


> I wasnt planning on making many posts on these forums. However after reading some recent posts I felt compelled to do so.




This is not a support group, see Lifeline for that, this is a forum to mostly talk about Stocks and Investment on the ASX.

I disagree with most of what you have said.. just one example 

Would you feel sympathy for someone in this day and age that took up smoking, smoked all their life and then contracted lung cancer ?  Sure you would feel compassion  and empathy for their plight, no one wants anyone to suffer such a terrible disease but at the end of the day, who was to blame ?  



carey ramm said:


> So when u go into the doctors u quickly whip up a 5 year medical degree, 2 years of residency and 5 years of practice experience to make u "more educated" so that u can then tell the doctor what they should or shouldnt be doing with your medical advice.




1. Doctors charge an hourly rate
2. Most people would have a general understanding of health, well being & hygiene.  eg wash your hands after the toilet, brush your teeth, what foods are good for you, don't smoke etc  which is akin to the sort of level of financial information that most people should understand.   We're not talking complex financials eg with how to use financial synthetics, CFD's, warrants and option trading, commodities futures, currency hedging etc.  

How they invested appears quite simple, these guys appeared to have invested in an index fund (okay so far but I would be more inclined towards a decent LIC )  and leveraged into that index fund inappropriately.  For this "investment advice" they were charged extortionate fees to do that (their choice) (similar advice, sans leveraging, to which I gave to my younger sister for nothing, ie pay your house off as fast as you can, then 1. save the excess cash and when you have saved a reasonable amount, 2. purchase shares in a LIC (eg ARG), using value averaging and repeat 1. & 2. for 20 years, 5 years short of retirement, reassess.

To my mind they need to accept _some_ of the responsibility.  I do acknowledge there appears to be untoward (which is despicable) and inappropriate advice to some(?) clients but isn't it something like 1,200 out of 14,000 clients in true difficulty and 300 or so are looking at true financial disaster and  ? the others just suffered from the vagaries of a market downturn like the rest of the World.

As to shills from Banks and Strom, I doubt that very much from reading these threads.


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## Garpal Gumnut (25 January 2009)

Glue said:


> Thanks Carey
> your post was  appreciated, when selecting a fp it is hard to sort the wheat from the chaff, but you gave me heart.
> 
> cheers
> Glue




Glue mate, be careful that you do not mistake finance and friendship. Anyone you deal with on a financial basis should not "give you heart". That is an emotional response. If you were a Storm victim, that is precisely the mindset that got you into strife in the first place.

This forum will be interrupted by people with agendas, financial planners and their advisers with a litany of qualifications and experience. They will cajole you with sympathy and then try to win you over to their firm. Be careful.

Kerry Packer never entered or left a negotiation "feeling good" about the other bloke.

I enclose a post of mine from a few weeks ago on this topic.

Best of luck mate.

gg



Garpal Gumnut said:


> And into the arms of another Financial Planner peddling the same old line, cheap american positivism, you betcha, YOU can get out of this folx.
> 
> These unfortunate people need to
> 
> ...


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## Glen48 (25 January 2009)

I see The Ex Mrs. Bulivant is mixed up with Storm She had the local pub here purchased it for 4M and sold if for something like 11M, just how much money does one need???
The paper thinks she might have lost $50M


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## daisy (25 January 2009)

Bye everyone.
I came to find out how this happened. Found out. Got a bit obsessed. Tried to help. But can only do so much. 
I will be watching the stoush with the banks with great interest.
Good Luck to all of you.
Daisy


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## Anastasia (25 January 2009)

I have been reading this forum for awhile often wanting to respond to posts but never quite having the courage to sit down and "nut" it out. But after reading Carey Ramms post, just maybe I have the courage to do this.

My husband and I were Storm clients and have truly had our future "re-arranged" to that which we expected. And what was this? A self funded retirement with yearly funds of around $50K...not a greedy income in our belief.

Yes we are guilty of not doing our research and we have kicked ourselves many times. But circumstances have changed many times over the 12 odd years we had been with Storm. Firstly our advisers had changed three times. Then we changed funds, margin lenders, banks, etc several times, took steps, and whethered several bear markets. We never once had a margin call, our LVR was quite low (around 40%) and slowly our financial dam started to grow. No steps initially were ever taken without Emmanuel and Julie's personal stamp of approval.

Naturally our confidence in Storm grew and even when we felt nervous about the economic climate, we were assured that we, like always, would be taken care of and had nothing to be concerned with.  But as the company grew, Emmanuel and Julies's involvement directly with us became noticeably less and less with our financial advisor being seen to steer the boat.

Yes, we should have not been so trusting but this was a trust that grew after many years. And we were trying to cope with our own busy lives in the meantime. My husband was trying to run his own business and although not aware of it at the time, battling an auto-immune disease. He had to close down the business three odd years ago as he could not go on and has been an invalid ever since. His doctors and medical expenses have been high, none of which we could obtain government assistance with due to our perceived assets level.

I work full time and have been studying part-time for the last two years as I intended at some future date to retire  from my present position and work only casually in a better paying position with time to look after my husband as his condition worsened. (The fund had still not reached the $50K per year which we felt was reasonable to retire on.) I also have an ailing mother that I try to assist with.

So time to do anything else (like researching financial information) is a luxury for me. We realized Storms fees were high but have always been of the belief that you only get what you pay for. As we payed so much over so many years, we felt that we were getting the best advice.

Bottom line is that we now have a bank loan of $4300 odd in repayments per month that we have no way of servicing as I am the only income earner and my gross for the month is no where near that. My husbands super was cashed in back in July to pay off a non-tax claimable home loan that subsequently created equity that we then borrowed against to purchase more shares. So that has also gone. And because he is less than 60 years of age, he now has a taxable income of $99K to be considered at the end of the financial year. 

Our only saving grace is that we do have enough funds from the down selling
of our shares to repay the margin loan. And enough funds in an account to make bank loan home repayments for around 8 more months whilst we try and sell our home. But what will we be left with when this happens....not much to rebuild our lives. 

I just hope that my husbands condition doesn't worsen too quickly and I can get a 'little' put away in the meantime for when I will have to give up work and care for him. And we so did not want to have to depend on a pension or housing commission, the real reason behind wanting to invest to start with!!

Yes we are angry that we have both worked hard all our lives and now have nothing to show for it. Call us gullible if you must but please do not call us greedy or careless with our monies.....we truly don't deserve this judgement.


----------



## cuttlefish (26 January 2009)

carey ramm said:


> For a forum that is supposed to be about suppport there is a lot of negativity expressed in some of these posts with a common thread that the storm client losses are the clients own doing as they should have been more educated and taken control of their advice more themselves. It is this type of response i would be expecting from Storm plants and bank trolls.





I take a lot of resentment in this comment - labelling anyone with an opposing viewpoint as a 'troll or plant' is actually quite cowardly in my opinion.  Also these forums are not a 'Storm Support Group' they are a place for open, two way discussion.

Most of the people expressing an opinion in this thread have been posting on these forums for years, have no vested interest, and are only trying to offer their viewpoint for better or for worse.


----------



## bazollie (26 January 2009)

G'day Guys , I've been following this thread closely as I am aware of a number of people in the C.Q Region who have been adversly affected by this terrible breach of trust in a small part of the Financial World. 
I think that Trevor_S's comments have been a bit harsh as we can always be very smug in hindsight. 
There have been others as well who have been quite critical as well , but at the end of the day, we all make decisions based on gut feel, advice, what is the trendy product etc etc...

We can all sit back and say you should have done this that and the other , but there are some of us out there that rely soley on advice given by Solicitors, Financial Planners, Brokers, Mad Punters etc ...  

I am sure that if my Parents or in laws were involved in something like this, I would be kicking myself for not being more interested or proactive about the whole thing. 

The upshot is that there are numerous hard working aussies that have been affected and that we should be supportive of their situation, not dishing on these people for being greedy, uneducated, be positive, etc etc.. 

Who would have thought that going long on an investment in say RIO at $120 per share would have turned to sh%t now? Blue Chip shares you buy and just put in the bottom draw and come back in 5 years right!

So the All Ords are crap at the moment and a lot of our Super Fuds are crap at the moment as well. Let's all of us try and get through this and come out the other side. We can try and call this experience, but I can think of better ways to learn.

To all of you guys who have been stung, I pray that there is a solution for you and that you will be looked after by the "system"  

To all of the knockers and the "told you so people" , ease off the guys hurting at the moment and maybe even show some compassion , because what goes around comes around!!

To the terrible greedy manipulators of this system, shame on you for betraying the trust of hard working aussies and hope that karma kicks in soon!!

Regards

Bazollie


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## cuttlefish (26 January 2009)

> Storm clients may be interested to know that the Storm Investor Consumer Action Group (SICAG) are starting to get up and running and have started to put together a website (not quite finished but starting to look very good).
> 
> http://stormfinancial.info/index.htm





Geez - call me cynical - but looking at the web site they are stinging people $50 just to join this group.


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## Sunder (26 January 2009)

cuttlefish said:


> Geez - call me cynical - but looking at the web site they are stinging people $50 just to join this group.




Maybe the founding members are E & J Cassimatis? 

Or am I just being too cynical here?


----------



## Monario (26 January 2009)

cuttlefish said:


> Geez - call me cynical - but looking at the web site they are stinging people $50 just to join this group.





True, they are charging, but its a small fee to pay in my opinion as these people are voluntering there time, they are highly skilled in there fields and in my opiion are the basis of a good group of people to start the ball rolling on all these actions.

I dont think we investors will get any finances back from this debacle, but if I can stop it from happening ever again, and be the precursor to more stringent regulations, etc. etc. I am fine with the 50...

They cant be expected to be paying for flights, fees for meeting venues, etc out of there own pockets...


----------



## Monario (26 January 2009)

Sunder said:


> Maybe the founding members are E & J Cassimatis?
> 
> Or am I just being too cynical here?




Ha, not cynical, just ........ well you work it out:


----------



## stung (26 January 2009)

Sunder said:


> Maybe the founding members are E & J Cassimatis?
> 
> Or am I just being too cynical here?






Maybe not E & J Cassimatis... but I am 90% sure that one of them is a dad of my Storm financial advisor. 
If I am correct I cannot join this organisation because I feel extreme ill will towards  this advisor. If I went along to a meeting I could not trust myself not to tell his dad what a  manipulating, self serving, dispassionate son he has.
As I say I am 90% sure. If I am incorrect please forgive me. No point suing me anyway as I have no money. Storm saw to that.


----------



## cuttlefish (26 January 2009)

carey ramm said:


> So u want to be educated in the financial area - well whip up a quick maths heavy accounting or economics degree, a 2 year securities inistitute post degree diploma then grab 10 years experience split between the financial markets and property so u get a balanced view. Even then u would be a fool to solely take your own advice as it could hardly be objective and will be tainted with the emotions of dealing with your own money.




The criticism is not so much about people not educating themselves about finance, but about people making commitments that they were realistically unable to meet. If someone agrees to take out a loan, with associated loan repayments set out in the documentation, when realistically they will not be able to make those repayments then there is a certain responsibility associated with that decision.  It doesn't require several degrees to add up your income, take away your living expenses and realise whats left over is nowhere near enough to repay the loan you are about to take out.


----------



## stung (26 January 2009)

bazollie said:


> G'day Guys The upshot is that there are numerous hard working aussies that have been affected and that we should be supportive of their situation, not dishing on these people for being greedy, uneducated, be positive, etc etc..
> 
> 
> To the terrible greedy manipulators of this system, shame on you for betraying the trust of hard working aussies and hope that karma kicks in soon!!
> ...




Thanks for the support Bazollie.

I had worked very hard and was careful with how I spent my money believing that I needed to pay off my house above all else. When I finally paid it off I knew I needed to be proactive and make my money work for me and not just stick it in a savings account. 

I believed that as I did not have the knowledge myself I would be best to pay some one who knew what they were doing. Friends had suggested Storm, so I went along to see them.... the rest is history really. 

To Anastasia, It feels awful doesn't it? I hope things work out for both of our families.


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## Julia (26 January 2009)

cuttlefish said:


> The criticism is not so much about people not educating themselves about finance, but about people making commitments that they were realistically unable to meet. If someone agrees to take out a loan, with associated loan repayments set out in the documentation, when realistically they will not be able to make those repayments then there is a certain responsibility associated with that decision.  It doesn't require several degrees to add up your income, take away your living expenses and realise whats left over is nowhere near enough to repay the loan you are about to take out.



Exactly.   People following Storm's advice made the conscious decision to borrow to unsustainable levels.
As Cuttlefish has pointed out you don't even need high school maths to do the above simple arithmetic.

That said, of course, I'm feeling very sorry for everyone who is affected.

But it's simply not reasonable to come onto this stock forum - which as has been pointed out is a place for exchange of views, most assuredly not a support group - and accuse anyone suggesting that some personal responsibility is involved is a troll and 'acting for the enemy'.


----------



## Glen48 (26 January 2009)

Any one know Mr. & Mrs. C. CV's?
What is their back ground?


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## ShareGuy (26 January 2009)

Julia said:


> Exactly.   People following Storm's advice made the conscious decision to borrow to unsustainable levels.
> As Cuttlefish has pointed out you don't even need high school maths to do the above simple arithmetic.
> 
> That said, of course, I'm feeling very sorry for everyone who is affected.
> ...




I'm sure there is a bit more to it than just simple maths. If people raised the question of how they would pay the interest I'm sure storm just told them to capitalize it and never worry about paying it back. May be a stupid strategy but when a so called " professional" suggests it to an unsofisticated invester we all know the result...


----------



## sails (26 January 2009)

ShareGuy said:


> I'm sure there is a bit more to it than just simple maths. If people raised the question of how they would pay the interest I'm sure storm just told them to capitalize it and never worry about paying it back. May be a stupid strategy but when a so called " professional" suggests it to an unsofisticated invester we all know the result...




...and from the stories in this thread, "trust" appears to have played a major role in these FPs getting access to OPM (other people's money).   IMO, the abuse of trust would have to be one of the lowest forms of deception...


----------



## cuttlefish (26 January 2009)

ShareGuy said:


> I'm sure there is a bit more to it than just simple maths. If people raised the question of how they would pay the interest I'm sure storm just told them to capitalize it and never worry about paying it back. May be a stupid strategy but when a so called " professional" suggests it to an unsofisticated invester we all know the result...





Hmmm ... borrowing money they can't afford to repay to buy assets in the peak of a bull market beleiving they will only increase in value.   Sounds a lot like the strategies employed by a lot of 80's entrepeneurs.  (of course when an entrepeneur does it and fails they are crooks, but when an 'aussie battler' does it they've been ripped off ).

Sure Storm were pushing people into this, very irresponsibly, and its understandable that some naive people believed the story too much. But unfortunately if you sign a commitment then you are responsible for that commitment.  Thats the ugly facts of life.   If Storm told them to commit fraud and sign a fraudulent document, is that still excusable because they were ignorant? Where does responsibility end? 

The tax department doesn't protect you from criminal prosecution just because you use an accountant - you sign your tax return and you are responsible for checking it - no matter how complex and no matter if an accountant prepared the whole thing.  

If you take out debt that you can't afford to repay then you better make darn sure that you are monitoring the assets that have been purchased with that debt if the sale of those assets is your only means for repaying that debt.  After all - the debt that you signed for is your responsibility.  If your financial advisor isn't giving you information that is appropriate then it IS your responsibility to ensure you get the facts that you need from them or take appropriate action if they are not forthcoming.

Its also worth noting that a lot of the people affected by this situation weren't financially naive and were bright and succesful (there were a lot of businessmen who would hopefully understand the responsibility involved in signing a legal document involving a financial commitment) and also a lot of them by the sounds of it were happy to ignore advice or warnings to steer clear of these products.

If you can't take responsibility for your failures then you can't take responsibility for your successes in my opinion.


----------



## ShareGuy (26 January 2009)

cuttlefish said:


> Hmmm ... borrowing money they can't afford to repay to buy assets in the peak of a bull market beleiving they will only increase in value.   Sounds a lot like the strategies employed by a lot of 80's entrepeneurs.  (of course when an entrepeneur does it and fails they are crooks, but when an 'aussie battler' does it they've been ripped off ).
> 
> Sure Storm were pushing people into this, very irresponsibly, and its understandable that some naive people believed the story too much. But unfortunately if you sign a commitment then you are responsible for that commitment.  Thats the ugly facts of life.   If Storm told them to commit fraud and sign a fraudulent document, is that still excusable because they were ignorant? Where does responsibility end?
> 
> ...




I am actaully an accountant and can tell you that if we breach our duty of care to our clients we will be in serious trouble. I've seen the position alot of storms clients are in and not one of them hasn't said "we were stupid to do this". But that doesn't mean we should let the principles of storm off the hook and just say "ha ha how stupid are you!" to people who go involved. 

Personally I don't know how storms FP's can live with themselves.


----------



## sails (26 January 2009)

cuttlefish said:


> ...If you can't take responsibility for your failures then you can't take responsibility for your successes in my opinion.




Although, in this case, it appears Storm were happy take responsibility of other people's money and were praised as the goose laying the golden eggs during the bull market.   I would have thought they should also be taking some responsibility for the failure - especially if they are sitting on millions made on fees from these people's money.

That said, I do appreciate where you are coming from - it's a lesson I learned very early on in trading is that you are fully accountable even when things go wrong.  With the attitude you suggest above, it's a case of "my mistake", learn the lesson and get back to the business of making money.

Maybe that's why those of us who have been trading for a while are less likely to get caught up in these schemes as we know we remain fully accountable if it fails.  Perhaps that is what makes us extremely careful, do the sums, etc.


----------



## Julia (26 January 2009)

bazollie said:


> The upshot is that there are numerous hard working aussies that have been affected and that we should be supportive of their situation, not dishing on these people for being greedy, uneducated, be positive, etc etc..



As pointed out earlier, this is a stock forum, not a support group.
Please don't tell me how I 'should' be.   



> Who would have thought that going long on an investment in say RIO at $120 per share would have turned to sh%t now? Blue Chip shares you buy and just put in the bottom draw and come back in 5 years right!



When you have a margin loan against it????  For heaven's sake!



> So the All Ords are crap at the moment and a lot of our Super Fuds are crap at the moment as well. Let's all of us try and get through this and come out the other side. We can try and call this experience, but I can think of better ways to learn.



And in the process perhaps learn a bit about risk management.


----------



## Ijustnewit (26 January 2009)

stung said:


> My Storm story post is on p 31.
> 
> Since I lost our life savings I feel totally stripped of any self worth. I can hardly look my young son in the eye for the guilt about how his life will now change because of my huge debt.
> 
> No post  whether it be about  utter greed, sheer stupidity, or of my own making, can make me feel any worse than I already do. But some posts like yours Carey make me feel a tad better. So thanks.



 Yes I agree, fingerpointers and self made experts can't make me feel anyworse than I am now THANKS CAREY


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## Stan 101 (26 January 2009)

bazollie said:


> I think that Trevor_S's comments have been a bit harsh as we can always be very smug in hindsight.
> There have been others as well who have been quite critical as well , but at the end of the day, we all make decisions based on gut feel, advice, what is the trendy product etc etc...



Smug in hindsite? This kind of thing has happened before and will happen again. Ignorance is never an excuse. People's memories are short.



> We can all sit back and say you should have done this that and the other , but there are some of us out there that rely soley on advice given by Solicitors, Financial Planners, Brokers, Mad Punters etc ...



That is one's prerogative. What I really can't understand is when the market was clearly in decline and Storm clients have made it clear they wanted out, they stayed in. So screw one's own common sense and allow yourself to be talked out of what you want to do as you see the sky falling around you.




> The upshot is that there are numerous hard working aussies that have been affected and that we should be supportive of their situation



Why? There are people the world over who are struggling due to the worldwide downtrend. Why are Storm clients any different?



> Who would have thought that going long on an investment in say RIO at $120 per share would have turned to sh%t now?



 Funny, there were all those people just a short 4 years ago crying over AMP shares almost demanding that they have their money returned becuase AMP was bluechip. You remember AMP dropping through the floor, don't you? What made you think it would never happen again? Fantasy? Pull your head in!




> Blue Chip shares you buy and just put in the bottom draw and come back in 5 years right!



That and one case of Stan 101's genuine snake oil. Will cure all that ails ya. I take credit card.



> We can try and call this experience, but I can think of better ways to learn.



 It's called reading....From a book. I'm glad you are starting to finally understand there are no excuses in this world. If you want to do something, anything you must take responsibility for it regardless of who is informing you.



> To all of you guys who have been stung, I pray that there is a solution for you and that you will be looked after by the "system"



Why? Were all these people going to offer dividends to the "system" from their gains before the ASX tanked? I doubt that very much. That's a great "Australian" way. Gear yourself to the hilt and reap any rewards. When it all turns sour, look for the closest person to blame. Again, Pull your head in!



> To all of the knockers and the "told you so people" , ease off the guys hurting at the moment and maybe even show some compassion



 I think there are very few here who aren't offering compassion. There is also a lot of inability to comprehend some of the thought processes of those caught out.



> because what goes around comes around!!



No, and with that attitude it is bound to happen to your ilk again. How many times do you have to hear it. How about taking responsibility for your actions. If you want to invest, gain a little knowledge in the general area. It's not rocket science. I refer you again to AMP as that was a truly high profile case that should still be fresh in all investor's minds. Obviously not yours, though. Read into that as you wish.



> To the terrible greedy manipulators of this system, shame on you for betraying the trust of hard working aussies and hope that karma kicks in soon!!



 The world is manipulated. If you don't trust your skills to pick a manipulator and navigate through their ways, you are in the wrong game. The world is not just. It never will be.




Cheers,


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## ShareGuy (26 January 2009)

Stan 101 said:


> The world is manipulated. If you don't trust your skills to pick a manipulator and navigate through their ways, you are in the wrong game. The world is not just. It never will be.
> 
> Cheers,




Right, so we should let manipulator's get away with it? 

Is there any chance you live in Nigeria? Or do you want Australia to become a basket case like them?


----------



## cuttlefish (26 January 2009)

sails said:


> _cuttlefish quote: ...If you can't take responsibility for your failures then you can't take responsibility for your successes in my opinion.​_sails quote: Although, in this case, it appears Storm were happy take responsibility of other people's money and were praised as the goose laying the golden eggs during the bull market.




I guess my point here is this - had the Storm clients been succesful and made a lot of money out of their high risk strategy - would they have absolved themselves of all responsibility for that situation - or would they patted themselves on the back for their savvy and good sense in choosing Storm.   I suspect the latter.   

There are a lot of people prepared to accept responsibility for success but it takes a lot of bravery to accept responsibility for failure.  I have all sympathy and support for anyone with the courage to do it, and the courage and perseverence to make their way out of the horrible situation that they are in.


----------



## GumbyLearner (26 January 2009)

cuttlefish said:


> I guess my point here is this - had the Storm clients been succesful and made a lot of money out of their high risk strategy - would they have absolved themselves of all responsibility for that situation - or would they patted themselves on the back for their savvy and good sense in choosing Storm.   I suspect the latter.
> 
> There are a lot of people prepared to accept responsibility for success but it takes a lot of bravery to accept responsibility for failure.  I have all sympathy and support for anyone with the courage to do it, and the courage and perseverence to make their way out of the horrible situation that they are in.




Well said CF.


----------



## Trevor_S (26 January 2009)

bazollie said:


> I think that Trevor_S's comments have been a bit harsh as we can always be very smug in hindsight.




It's unfortunate that's your interpretation of my comments.  Personally I feel deep compassion and a sadness for the predicament of those who post like Anastasia etc but saccharine coating a turd, still leaves you with a turd.



bazollie said:


> There have been others as well who have been quite critical as well,




I have not seen that at all, I think you mistake criticism for incredulity...



bazollie said:


> but at the end of the day, we all make decisions based on gut feel, advice, what is the trendy product etc etc...




Not all of us... some of us do a modicum of research and invest in areas they have some understanding of.



bazollie said:


> Who would have thought that going long on an investment in say RIO at $120 per share would have turned to sh%t now?




Anyone that purchased RIO at $120 was speculating that the BHP bid would go ahead and they could pocket some quick money but you're right. I didn't think it would drop as far as it has, I had mid 4000's pegged, so what the hell would I know about market timing   (I don't own any RIO)



bazollie said:


> Blue Chip shares you buy and just put in the bottom draw and come back in 5 years right!




5 years ? not moi... Some of mine go back to '91. That aside, anyone using a margin loan to leverage had better be paying some attention ! 



bazollie said:


> can try and call this experience, but I can think of better ways to learn.




Indeed, which is where you have come back full circle to what some have been saying, self education, definitely easier.


----------



## Stan 101 (26 January 2009)

ShareGuy said:


> Right, so we should let manipulator's get away with it?



Are you talking about the Australians who manipulated (for want of another term) the tax system by gearing to the hilt to allow for a maximum tax deduction? That's a bit harsh. Aren't they the same people you are trying to stick up for?



> Is there any chance you live in Nigeria?




Clearly not. That is just a foolish statement and you know it.




> Or do you want Australia to become a basket case like them?



IMO Australia is already a basket case in regards to this scenario. To have people pay large fees to FP to throw darts at the ASX with borrowed money is a basket case scenario, isn't it.
And it will eventually screw up gearing for all of the rest.


cheers,


----------



## cuttlefish (26 January 2009)

Stan 101 said:


> IMO Australia is already a basket case in regards to this scenario. To have people pay large fees to FP to throw darts at the ASX with borrowed money is a basket case scenario, isn't it.
> And it will eventually screw up gearing for all of the rest.
> 
> 
> cheers,




This is the problem - on a smaller scale every tom, richard and henry has been able to use their home equity to play the Skase/Bond leverage game.  The scary thing is the size of this problem.  The real estate market is enormous - and significant price collapses will (and have in the US/UK) have a huge impact on the economy.


----------



## ShareGuy (26 January 2009)

Stan 101 said:


> Are you talking about the Australians who manipulated (for want of another term) the tax system by gearing to the hilt to allow for a maximum tax deduction? That's a bit harsh. Aren't they the same people you are trying to stick up for?
> 
> cheers,




I can only assume you don't no a great deal about the situation syorm have put people in. Have a read below of Steve Reynolds story and tell me he was worried about the tax man. I read in another artical but connot find it that he actually lost his only source of income ( a pension) due to failing the assets test because of storms adivise to leverage.

http://www.townsvillebulletin.com.au/article/2008/12/17/28485_hpnews.html

I also know of people who sold their business to retire and storm adivised them to leverage into the market of course with the proceeds instead of rolling it into super and getting the 50% retirement exemption on the CGT. 

*This sort of adivice is totally unacceptable no matter how stupid people are to take it.*

I'm not trying to stick up for anyone im just trying to advocate that Storms directors and FP's should be held accountable for breaching their duty of care. Do you not agree?

ps; Nigeria wishes they had a basket case


----------



## ShareGuy (26 January 2009)

Stan 101 said:


> Are you talking about the Australians who manipulated (for want of another term) the tax system by gearing to the hilt to allow for a maximum tax deduction? That's a bit harsh. Aren't they the same people you are trying to stick up for?
> 
> cheers,




So high income earners who try to save tax are manipulaters? Have you never claimed a tax deduction?


----------



## Solly (26 January 2009)

"QUT (Queensland University of Technology http://www.qut.edu.au/) currently delivers a Master of Business (Applied Finance) to 20 financial advisors within the Storm Financial Group. This program is delivered in four intensive sessions per year over a period of three years. This program, including assessment, is tailored to fit in with participants’ business commitments."

It's from this link here:

http://www.corped.bus.qut.edu.au/programs/ourclients.jsp#Storm

Didn't an endorsement about this course appear somewhere on the Storm website at sometime...?

As they say......."Only in Queensland"...........


----------



## Stormin_Norman (26 January 2009)

carey ramm said:


> So when u go into the doctors u quickly whip up a 5 year medical degree, 2 years of residency and 5 years of practice experience to make u "more educated" so that u can then tell the doctor what they should or shouldnt be doing with your medical advice.




its called a 2nd opinion. how many storm clients went and got one?


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## Stan 101 (26 January 2009)

ShareGuy said:


> So high income earners who try to save tax are manipulaters? Have you never claimed a tax deduction?



Yes I do believe high income earners manipulate and use the tax system to their advantage. I certainly do. I never said it was a bad thing, you brought up manipulation. Trading with life savings is not a game. It is probably the single most important thing one will ever have to consider.

Tend not to gear to max LRV and certainly don't keep drawing down off paper gains. Also have a plan to actually pay back the margin funds unless you are prepared to face the consequences. This is not hindsite smirkiness, this is simple common sense.

Have you ever stopped to think about all the people who are researching Storm now and finding this site? Take a look at how many people with Storm related stories have only a few posts and recent Aussie Stock Forum registrations.  Why are they only now joining up? Why weren't they here before they invested their cash? 
I also wonder how many are reading the wealth of knowledge on this site. Are the newcomers asking questions from some of the very resourceful members who are willing to share their expertise about any future trading methodology or did they just join here for support?

Again, this is not to be misconstrued as lack of empathy, but just trying to understand why...

cheers,


----------



## ShareGuy (26 January 2009)

Stan 101 said:


> The world is manipulated. If you don't trust your skills to pick a manipulator and navigate through their ways, you are in the wrong game. The world is not just. It never will be.
> 
> Cheers,






> Originally Posted by Stan 101
> Are you talking about the Australians who manipulated (for want of another term) the tax system by gearing to the hilt to allow for a maximum tax deduction? That's a bit harsh. Aren't they the same people you are trying to stick up for?
> 
> cheers,




I think you brought up 'manipulated', this is definately the wrong word to be using when talking about tax deductions with interest on debt. The government expects and wants people to do this as an economy cannot survive without it. (Not talking about storms use of debt)



Stan 101 said:


> Yes I do believe high income earners manipulate and use the tax system to their advantage. I certainly do. I never said it was a bad thing, you brought up manipulation. Trading with life savings is not a game. It is probably the single most important thing one will ever have to consider.
> 
> Tend not to gear to max LRV and certainly don't keep drawing down off paper gains. Also have a plan to actually pay back the margin funds unless you are prepared to face the consequences. This is not hindsite smirkiness, this is simple common sense.
> 
> ...




I in no way disagree with you that people should build up their own knowledge in order to invest and this is a great place to do it, so lets hope people do just that. 

My main point is that all the advisers and directors of storm should be held accountable for the dodgy advise that was given. I don't particularly want to see the Cassimartis' flying around in a lear jet living it up on the money they made by giving dodgy advise. Surely you agree?


----------



## Stan 101 (26 January 2009)

ShareGuy said:


> I can only assume you don't no a great deal about the situation syorm have put people in. Have a read below of Steve Reynolds story and tell me he was worried about the tax man.




Okay, I'm now officially tired of this weeping tripe. I don't know who Steve Reynolds is. But I did pick up this little tidbit from the story. The story printed by the same newspaper who was singing Storms's praises up until recently.
_"Mr Reynolds said the part he could not understand was how his bank and financial adviser could arrange for him to borrow so much money when his only income"_

And

_"How can a 60-year-old war veteran get into this position on the advice of a licensed financial adviser and how can the banks lend that large amount of money to this bloke who is on a pension?"_

So after Mr Reynolds has a huge debt, he now asks how it could happen to him. Did he not think for one second something was wrong? He damn well knew it was wrong yet did nothing. Storm was no angel and showed less than average judgement yes, but they weren't the only ones, were they? I'd like to know why Mr Reynolds wasn't feeling guilt pangs and going to the paper as he watched his portfolio rise.


There I've said it.

cheers,


----------



## Stan 101 (26 January 2009)

> My main point is that all the advisers and directors of storm should be held accountable for the dodgy advise that was given. I don't particularly want to see the Cassimartis' flying around in a lear jet living it up on the money they made by giving dodgy advise. Surely you agree?




Do you know something I don't? I thought in Australia we are innocent until proven guilty. I have no idea who the Cassimartis really are. If the courts find they are guity of "dodgy advise" they should be dealt with accordingly. 
What proof do you have that Storm gave dodgy advise? Do you have access to all the client portfolios? I'm going to make an assumption of no.
You are _*assuming*_ Storm were underhanded. Big difference to knowing.The method of gearing on gearing is nothing new, is not illegal and I personally have used the method on and off when I feel the risk is manageable. 

Personally I think it is crazy for anyone close to or at retirement age to even consider such risk. If I had worked all my life and was an "unsophisticated investor" there is no way in hell I'd go back into hock. Sure Storm may have shown pretty pamphlets about future earnings (again nothing illegal there) but if you have worked all your life, surely you would have realised that there would be some risk? I find it hard that someone could reach retirement age and not learn that life lesson. Common sense tells one that. That doesn't make Storms advise illegal or "dodgy". How about you start putting up some facts on the matter.
cheers,


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## ShareGuy (27 January 2009)

Stan 101 said:


> Do you know something I don't? I thought in Australia we are innocent until proven guilty. I have no idea who the Cassimartis really are. If the courts find they are guity of "dodgy advise" they should be dealt with accordingly.
> What proof do you have that Storm gave dodgy advise? Do you have access to all the client portfolios? I'm going to make an assumption of no.
> You are _*assuming*_ Storm were underhanded. Big difference to knowing.The method of gearing on gearing is nothing new, is not illegal and I personally have used the method on and off when I feel the risk is manageable.
> 
> ...




I have already outline a case where the 50% retirement exemption was forfeited due to storms advise, also Steve Reynolds case where he lost his pension because of storms advise (I know this from the media). And I have plently more reasons to believe the advise was dodgy but do not wish to post here. You even say above that no one considering retirement should consider such a risk, well don't you think a FP shouldn't be advising it?

On another note have a look at the action groups website, I don't know who wrote it but gees with qoutes like this:

  "If you are a disaffected Storm investor, some one who has been screwed over by the banks, or simply some one with a social conscience that would like to help … we want you!"

They are going down the road of subprime lending, which I think is misfounded and will never work, it's storms advise that is to blame not the banks!


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## cuttlefish (27 January 2009)

ShareGuy said:


> They are going down the road of subprime lending, which I think is misfounded and will never work, it's storms advise that is to blame not the banks!





Yeah I agree with this.  The banks have deeper pockets which would make them a target in that regard - but it's highly unlikely imo that the banks (based on my own experience) would not have airtight documentation in relation to the loan details and customer acknowledgements.  That is their business.  On the other hand, Storm financial would appear to have been giving the advice that led people to take out these loans - which for many instances were wreckless given the client age/status/risk profile etc.  There would appear to be strong argument that the advice given to some clients was negligent, in which case I'm assuming the PI insurance would come into play  (opinion only no lawyers here).


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## Stan 101 (27 January 2009)

Dodgy is not illegal. Ethically immoral maybe. Yes I said it's madness to go into hock and I would never recommend it but 1. I'm not a FP and 2. I wasn't privy to the client - FP conversations.

Ever thought that to lose the pension for the above chap was part of the plan to reap greater gains? Forego a government handout and use a great leverage capacity. Again. I can spend all night coming up with fantastic scenarios and so can you. Neither of us have the facts.

How do you know the man above didn't walk in and say he wanted to leave his kids $2 million because he is seeing all the "wealth" in Townsville?

I typed on this site about 12 months ago that people of Townsville were living in a fantasy land with unsustainable real estate values. The people on the street were telling me I was a fool not to be buying in Townsville when I lived there. It was an explosion waiting to happen. The Townsville I know is a city of greed and fantasy. The quantity of people driving around in the Holden Special Vehicles and the like is lunacy. It seems Storm and the Townsville population worked well together until that damn ASX got in the way and ruined it for everyone.


I suppose I'll be classed as an evil person feeding off the unfortunate when I wander in to Townsville in the coming months - year and start picking the eyes out of the real estate being liquidated. The real estate that is leveraged to the hilt just so the locals can boast about their portfolios containing 5 properties to the rest of the "latte" set at the 4 cafes in Gregory St.


I've said my piece on this now. I can not add to what I've already typed and I'm happy to disagree with you and leave it at that. I doubt we will ever see eye to eye on this matter.


Cheers,


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## ShareGuy (27 January 2009)

> I've said my piece on this now. I can not add to what I've already typed and I'm happy to disagree with you and leave it at that. I doubt we will ever see eye to eye on this matter.




Agreed, but gee what did Townsville ever do to you? Property prics here are so high for two reasons the army base and the mining boom. Now that the mining boom is coming off it will be interesting to see what happens to prices but they haven't budged a bit yet (not like NSW where they are already in recession) but they will just a matter of how far. 

ps; who doesn't need a HSV!!!!!!! lol


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## Solly (27 January 2009)

Solly said:


> "QUT (Queensland University of Technology http://www.qut.edu.au/) currently delivers a Master of Business (Applied Finance) to 20 financial advisors within the Storm Financial Group. This program is delivered in four intensive sessions per year over a period of three years. This program, including assessment, is tailored to fit in with participants’ business commitments."
> 
> It's from this link here:
> 
> ...





I beleive that this is the course referred to above;
http://www.courses.qut.edu.au/cgi-bin/WebObjects/Courses.woa/wa/selectMajorFromMain?courseID=7108


I note there is one Unit, EFN505.

*Financial Risk Management*
http://www.courses.qut.edu.au/cgi-bin/WebObjects/Courses.woa/wa/selectUnitFromCourseDetails?structureID=18528&courseID=7108&idunit=18513

Where the synopsis states in part...
"The unit covers the main areas of modern risk management. The focus is on measuring and managing risks in financial institutions........" 

"Topics covered include ....prudential regulation of financial institutions, *measurement and management of market risks*, hedging strategies....."


Interesting.........


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## pilots (27 January 2009)

People here are crying about how they have been miss lead, you was all told by a sales man you will make loads off money, had that come off you all would be happy. Well it did not come off, it was only ever going to go, two ways, up or down, you had a 50/50 chance, you lost, DON'T WASTE YOUR TIME trying to get it back, only the lawyers will win.


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## bunyip (27 January 2009)

pilots said:


> People here are crying about how they have been miss lead, you was all told by a sales man you will make loads off money, had that come off you all would be happy. Well it did not come off, it was only ever going to go, two ways, up or down, you had a 50/50 chance, you lost, DON'T WASTE YOUR TIME trying to get it back, only the lawyers will win.




I'm inclined to agree. But don't let our friend Carey Ramm hear you say that, or he'll accuse you of being a Storm plant or a bank troll.

Yesterday I was talking to a relative who has a business degree and is employed in an executive position with Telstra. He's a pretty switched on bloke who usually has his finger on the pulse, and knows plenty about the dealings in the corporate world. He reckons those big law firms take on those class action cases by setting up a trust account for clients, with say a $1000 entry fee. All the clients put in a grand each, which most of them can get hold of even if the have to get donations from family members. So the law firm might have 400 clients put in a combined total of 400 grand. The  firm goes to work on a hefty hourly rate which is paid from the trust account. When the account is getting a little depleted, they tell clients they're making solid progress, and ask them to put in another grand to continue the fight. It can go on almost forever, with the law firm having one opportunity after another to keep asking clients to inject further funds. No more funds, no more representation from the law firm.
He says they'll even take on cases they consider a long shot with limited chance of winning, but if they do win they get a very generous cut of the compensation won, and if they don't, well, they've been very well paid for their efforts anyway.


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## Trevor_S (27 January 2009)

ShareGuy said:


> it's storms advise that is to blame not the banks!




These guys would disagree with you

_Penniless couple blame bank for loss of $5.2m_

Once again I am mystified at why they had a highly leveraged margin loan at that stage of their life for (mine, in mid December was at 44% and I am in my early 40's!)... (and that doesn't mean I am not interested to find out why the bank lent them funds with such a crappy income stream ie where there falsehoods on the submitted documentation or was the bank lax in their lending practice ?) 

I (and surely everyone) knows why the FP's got them to adopt that investment model, to make money for the FP, one just had to look at the office in Townsville to see that.  It will be interesting to see if the Court thinks that advise conflicts with the Law, I doubt that it will but who knows.  

I hope they find some solace in blaming all and sundry and can get on with things but I doubt the revenge they are seeking will be the salve for the pain they feel.


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## Judd (27 January 2009)

The online Townsville Bulletin has an article today regarding an retired elderly couple who have done about $4.6m and still owe the banks $630k.  Very sad indeed.

What they were doing by having debts when retired, ie limited cash flow and vunerable when/if a down turn arrived, which it did, it totally beyond my understanding and against anything I have read previously.  Certainly you can have a margin loan when retired just make sure it is very conservatively geared (15% to no more than 25%), that you have the certain cash flow to pay off the interest plus a bit more and that the LVR for each share held is 70% or greater.  But don't use your home for the punt.  Never, never, never put the roof over your head at risk if retired unless you love the thrill of speculating and wish to increase the odds.  Simple common sense.

In any event, this couple:


don't blame Storm but blame the banks for selling the investments too soon [What before they got to zero value?];

pooled their superannuation [You gotta be kidding me.  Even the suggestion is a big warning bell] and invested with Storm.

The gentleman in question is 73.  Now I would have thought that: he was around for the 1960's credit squeeze with the resultant collapse of a number of corporations and the tanking share market, the tanking in the early 1970's of the share market; the 1987 tanking of the share market; the 1994 tanking of the share market; the 2001 tanking of the share market.  I remember them or have read about them and I'm just 50 and well aware of what can happen to share based investments, including superannuation.

Well, he now aware of the tanking of the share market 2007 to Date Unknown.

I just cannot understand the blind faith displayed by this couple and others likewise affected.

Edit:  Sorry Trevor_S, you got in before me.


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## Junior (27 January 2009)

I don't see how all the blame can be placed on Storm FPs.  The major banks knew about the advice, ASIC knew about the advice and no one had any issue with it.  We have experienced a massive stock market crash and the bursting of a huge credit bubble, lots of people lost a lot of money.  Yeah, the advice was aggressive, but the body regulating the industry was well aware that this advice was being given, and all these individual investors made a conscious decision to follow the advice in pursuit of huge gains.


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## ROE (27 January 2009)

GREED play a big part, one of the seven deadly sins 

People these day don't want to settle for 4%-6% return they want all double digit returns.. History teach you that any return higher than government bonds bear risk and that risk including losing your capital...and if you leverage with your capital well double the lost.


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## Julia (27 January 2009)

bunyip said:


> He reckons those big law firms take on those class action cases by setting up a trust account for clients, with say a $1000 entry fee. All the clients put in a grand each, which most of them can get hold of even if the have to get donations from family members. So the law firm might have 400 clients put in a combined total of 400 grand. The  firm goes to work on a hefty hourly rate which is paid from the trust account. When the account is getting a little depleted, they tell clients they're making solid progress, and ask them to put in another grand to continue the fight. It can go on almost forever, with the law firm having one opportunity after another to keep asking clients to inject further funds. No more funds, no more representation from the law firm.
> He says they'll even take on cases they consider a long shot with limited chance of winning, but if they do win they get a very generous cut of the compensation won, and if they don't, well, they've been very well paid for their efforts anyway.



I mentioned a while back that I'd had a minor association with a failed private mortgage scheme where Worrels were appointed liquidators.

What you've described above is exactly how Worrells worked.  When they were called in there was considerable value remaining in the properties.  Then Worrells strung out their investigations over several years, their fees absorbing the cash from the property sales.  Then they said "well, folks, we're doing just fine here, making real progress, but guess what, we need a bit more money from you to continue."  I don't know if anyone fell for it.

So this raises another question:  in the Storm case, who will be paying Worrells?  The Cassimatis?   And Korda Mentha are acting for CBA.
Will they be paid by the CBA or will they also ultimately bill the Storm principals?


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## asproboy (27 January 2009)

Junior said:


> I don't see how all the blame can be placed on Storm FPs.  The major banks knew about the advice, ASIC knew about the advice and no one had any issue with it.  We have experienced a massive stock market crash and the bursting of a huge credit bubble, lots of people lost a lot of money.  Yeah, the advice was aggressive, but the body regulating the industry was well aware that this advice was being given, and all these individual investors made a conscious decision to follow the advice in pursuit of huge gains.




As I understand it, Storm is accountable - under the terms of their licence - for providing advice to clients that considers their personal circumstances, attitudes to financial matters and their own financial objectives. In "selling" a 'one-size-fits-all' strategy (and an aggressive, high-risk one at that) to all the clients they could fails their obligations under their license. To continue to leverage up these clients in a way that allowed little margin for market volatility is a complete failure to the clients themselves.

There is no doubt the C's were very charismatic, had an answer for everything, and engendered a following amongst their clients that bordered on cult-like.

Let's not let our bank-bashing culture divert from the truth of the matter here. Only one firm purported to offer advice that was designed to deliver outcomes according to their clients' wishes. Storm Financial operated an 'independent' license and the banks would have no visibility of the advice for obvious privacy reasons.

From what I see, the banks merely provided products that allowed the adviser to implement that advice. If there is evidence of collusion or avoiding safeguards that should have been in place, then let's get it all out and assign the appropriate level of blame.

I currently think it's an extreme link to blame the bullet manufacturer when someone seduces you with the idea of freedom and empowerment, hands you a loaded gun, and tells you that nothing can go wrong.


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## Julia (27 January 2009)

ABC Radio News states there will be an interview with Storm principal this evening on the 7.30 Report.


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## Solly (27 January 2009)

Julia said:


> ABC Radio News states there will be an interview with Storm principal this evening on the 7.30 Report.




Thanks for the heads up, I'll be interested in observing the behaviours and language used in responses.


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## Garpal Gumnut (27 January 2009)

Julia said:


> ABC Radio News states there will be an interview with Storm principal this evening on the 7.30 Report.



It gets curioser and curioser.

From the ABC online tonight.

http://www.abc.net.au/news/stories/2009/01/27/2475655.htm

Storm customers, who face losing their homes and life savings, will gather in Townsville tomorrow night to hear options for action against the company and associated banks.

The firm's founder, Emmanuel Cassimatis, has told ABC1's 7:30 Report he has done nothing wrong and the company did not advise clients to go too heavily into debt.

He says he is also facing financial ruin and the banks are to blame for the company's collapse.

"I feel a huge moral responsibility. Our clients trusted us implicitly, we trusted the system, we trusted all the players in the system, we trusted the bank; it went horribly, horribly wrong," he said.

I'll be watching it.

gg


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## Solly (27 January 2009)

Here is a letter to The Age about two former storm clients aged 70 and 65 and retired, by a person stating that they are a forensic accountant. 

In part the letter states:

"Adjusting the model  for their actual tax rate (zero) and a realistic adjustment for living inflation (3.5%) they would in fact have still owed Macquarie around a net $90,000 at the end of the 17 years.

Had accurate and realistic modelling inputs been used, Storm's own financial model would have shown the investment to not be viable for these clients and they should not have been invested.

Subsequently, just two margin calls wiped out their wealth."

The full letter and the writer's opinion is here.

http://business.theage.com.au/business/storm-financial-letter-1-20090127-7qh0.html


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## Solly (27 January 2009)

*Storm collapse raises intervention issues *

 FPA chief executive Jo-Anne Bloch says....

that prior to November 2008 the FPA had no cause to investigate Storm as they had completed their compliance requirements and conducted themselves like any other member of the FPA.

"The fact that margin lending will become a regulated financial services product will help," she said. 

"It has been a gap in financial services that margin lending has fallen between the cracks, but the issue in terms of Storm's business model and at what point of time do you step in is one where Australian law is pretty clear and the concept of innocent until proven guilty must apply."


Full story by Kate Kachor at Investor Daily is here;

http://www.investordaily.com/cps/rde/xchg/id/style/5618.htm


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## Solly (27 January 2009)

Julia said:


> ABC Radio News states there will be an interview with Storm principal this evening on the 7.30 Report.





I saw a devastated man who can't believe his empire was pulled from under him.....

Life is a hard task master.

Transcript here:

http://www.abc.net.au/7.30/content/2008/s2475656.htm


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## pilots (27 January 2009)

Just watched the 7.30 report, it is sad what has happened, and this is only the start, you will see a lot more of this happening in the next six months. On all the share postings they tell you DYOR. The biggest mistake the people made was to believe a sales man.


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## cuttlefish (27 January 2009)

One comment that Cassimatis made in the interview led me to think that CBA may have not made the margin calls until the share portfolio's were well over the margin limit - as opposed to making the margin calls and selling the stock as soon as they hit the margin limit.    This may have occurred - and if it did then people possibly didn't get margin called until they were a lot further into the red than they were supposed to be.  This would understandably be a cause of frustration but is also quite a ridiculous thing to rely upon.   

It is incredibly poor portfolio management to rely on a lender to execute a margin call/sale of stock rather than monitoring the position of the portfolio yourself. 

 I assume that Cassamatis managed private investors portfolios on their behalf, or that we are talking about margin calls on the Storm baded index funds?  Anyway, interesting insight, on balance my subjective view (i.e. opinion only) is still that Storm bears the main responsibility for the situation.  (and that any investor that has borrowed a lot of money bears a high level of personal responsibility for monitoring the investments made with that money).



There's also downloadable video on the right hand side of the page on the link Solly posted.
http://www.abc.net.au/7.30/content/2008/s2475656.htm


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## Solly (27 January 2009)

pilots said:


> Just watched the 7.30 report, it is sad what has happened, and this is only the start, you will see a lot more of this happening in the next six months. On all the share postings they tell you DYOR. The biggest mistake the people made was to believe a sales man.





DYOR , for me is seeking multiple varied opinions from a range of people and sources, asking questions including asking the same question in multiple ways.
While I have no basic abhorrence to the engagement of FPs, I still use a spread of investment techniques, this also mitigates, avoids and transfers risk. Sometimes Salespeople have something to offer but only if you can pay the price and/or is beneficially deductable.


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## Stormin_Norman (27 January 2009)

cuttlefish said:


> One comment that Cassimatis made in the interview led me to think that CBA may have not made the margin calls until the share portfolio's were well over the margin limit - as opposed to making the margin calls and selling the stock as soon as they hit the margin limit.    This may have occurred - and if it did then people possibly didn't get margin called until they were a lot further into the red than they were supposed to be.  This would understandably be a cause of frustration but is also quite a ridiculous thing to rely upon.




he probably didnt want to give the investors the bad news they had nothing; so just waited till the banks did it.


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## No Planner Fan (27 January 2009)

For as long as fees are determined as a percentage of the amounts invested, there will always be a sceptic wondering about independence of advice given by the "professional" to the client.

The blame game which has ensued since the end of last year will continue, and doubtless Storm will be the bad guy (rightly or wrongly), but the issue of true independence is not being questioned sufficiently.

Consider for example true professionals such as accountants and solicitors.  These are not charging percentages of amounts, rather for the time and expertise employed in the service.  Some solicitors even say no win no fee.  So why not have planners say no gain, no fee - or even refunds?

It's time for the industry to self regulate properly, or the government to step in and do it for them.  By the way, standing behind a statement of advice should not be regarded as sufficient evidence that the client understands the true risks of the plan before them.

Perceived independence is as important as actual independence.


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## Trevor_S (27 January 2009)

Interestingly in todays Townsville Daily Bulletin, two pages after the article on page 3 about the retired couple loosing all their money, blaming the bank etc etc, there was 1/4 page add about attending an "investment seminar" and trading in what appeared to be financial synthetics.... make lots of money if the ad is to be believed, I wonder how many will have a go at that and take them at thier word ?  and so the World turns.


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## Julia (27 January 2009)

Solly said:


> I saw a devastated man who can't believe his empire was pulled from under him.....
> 
> Life is a hard task master.
> 
> ...




Perhaps my expectations were unrealistic, but I found the interview disappointing.  Cassimatis should have been put properly on the spot with quotes of actual LVR's reported by clients, and examples of the excessive leveraging given.

As it was, Cassimatis' statement that it would all have been just fine had the CBA not prematurely acted was pretty much allowed to stand.
Pity the CBA didn't choose to participate but I suppose they will be keeping their comments for where it matters.


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## cuttlefish (28 January 2009)

Julia said:


> Perhaps my expectations were unrealistic, but I found the interview disappointing.  Cassimatis should have been put properly on the spot with quotes of actual LVR's reported by clients, and examples of the excessive leveraging given.
> 
> As it was, Cassimatis' statement that it would all have been just fine had the CBA not prematurely acted was pretty much allowed to stand.
> Pity the CBA didn't choose to participate but I suppose they will be keeping their comments for where it matters.




Yeah I agree it was a pretty soft interview - probably negotiated up front?  (I'll do an interview if you agree not to go too hard).


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## -Bevo- (28 January 2009)

Julia said:


> Perhaps my expectations were unrealistic, but I found the interview disappointing.  Cassimatis should have been put properly on the spot with quotes of actual LVR's reported by clients, and examples of the excessive leveraging given.
> 
> As it was, Cassimatis' statement that it would all have been just fine had the CBA not prematurely acted was pretty much allowed to stand.
> Pity the CBA didn't choose to participate but I suppose they will be keeping their comments for where it matters.




I agree it was a disappointment, he might surprise everyone and make a appearance tomorrow night at the SICAG meeting Im sure there would be alot of storm clients eager to ask those hard questions.


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## bunyip (28 January 2009)

_*STORM CLIENT: I'm embarrassed that this happened - that I've done this to my family, yes. Let down? Yes.

PETER MCCUTCHEON: Let down by whom?

STORM CLIENT: I don't know. Someone - someone's dropped the ball.*_

-------------------------------------------------------------------------------------------------

Amazing isn't it, that some of those former Storm clients truly don't seem to understand how it happened. With regard to the client quoted above, he appears to be genuinely unaware that he himself is one of those people who 'dropped the ball', firstly, by not making himself fully conversant with the ins and outs of margin lending and the fearsome risks it can involve. And secondly, by not having any input into the management of his investments.
Mind you, it's a bit hard to make any intelligent input if you have virtually zero knowledge. But there's no excuse for having zero knowledge.

A 73 year old man was interviewed on my local TV station tonight. Former army officer, put half a million dollars under management with Storm when he retired some years ago. Got to a net worth of 4.6 million but has now been completely wiped out.
He and his wife were still singing the praises of the Storm principals, saying they did nothing wrong and had made every effort to look after the interests of their clients. Clearly, this is another bloke who just had no concept of the risks associated with margin lending, and how over-gearing a margin loan can be disastrous. He appeared to be totally unaware that over-gearing was probably the primary cause of his downfall.

Meanwhile, that slimy lawyer at the Storm meeting was beating the drum and doing his best to promote outrage among Stormers by telling them what they wanted to hear. That law firm must be just about drooling at the mouth in anticipation of the juicy bounty they'll get from all this.


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## Stormin_Norman (28 January 2009)

Julia said:


> Perhaps my expectations were unrealistic, but I found the interview disappointing.  Cassimatis should have been put properly on the spot with quotes of actual LVR's reported by clients, and examples of the excessive leveraging given.
> 
> As it was, Cassimatis' statement that it would all have been just fine had the CBA not prematurely acted was pretty much allowed to stand.
> Pity the CBA didn't choose to participate but I suppose they will be keeping their comments for where it matters.




he probably only agreed to appear to answer pre-agreed questions and pre-agreed questions only.


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## GumbyLearner (28 January 2009)

bunyip said:


> _*STORM CLIENT: I'm embarrassed that this happened - that I've done this to my family, yes. Let down? Yes.
> 
> PETER MCCUTCHEON: Let down by whom?
> 
> ...




Someone did indeed drop the ball. But I think what's more important is to play the ball and not the man!


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## Trevor_S (28 January 2009)

http://www.townsvillebulletin.com.au/article/2009/01/28/35411_hpnews.html



> Townsville real estate agency Ferry Property confirmed yesterday that Emmanuel and Julie Cassimatis, founders of collapsed financial planning empire Storm Financial, had listed their Melton Terrace mansion for sale.




...



> What will become of the Cassimatises, however, *who have applied for a new licence to operate as financial planners*, remains to be seen, although there are suggestions they plan to move into their other opulent mansion, a 1ha estate called Villa Paradiso at Belmont near Brisbane.


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## cuttlefish (28 January 2009)

Geez thats a fair bit of money for a concrete box with some views and no yard.  You could have bought half of North Ward with that sort of money 10 years ago.


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## cuttlefish (28 January 2009)

Woops - I realised that remark was a bit negative on the location - the views from Castle Hill over the bay and islands are truly spectacular and pretty unique throughout North Qld.

Here in Sydney we're a bit spoilt with topology, water and views so there are thousands of homes that sport them - and you can land a home here with a spectacular harbour or ocean view for that sort of money - hence my surprise at the price.


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## mini11 (28 January 2009)

Does anyone have a contact number for the Storm Investors Consumer Action Group?


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## -Bevo- (28 January 2009)

mini11 said:


> Does anyone have a contact number for the Storm Investors Consumer Action Group?




http://www.sicag.info/

Numbers are listed on the contact us page.


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## Pindibog (28 January 2009)

Glen48 said:


> Any one know Mr. & Mrs. C. CV's?
> What is their back ground?




I have been with my advisor for over 18yrs. She had changed from MLC to Ozdaq securities and then Storm until she retired. When looking through the paperwork I saw Ozdaq Securities was signed off by Julie Cassamattis?
Was Ozdaq securities the same company and then changed name to Storm?

I have the same story as most. But I have survived for over 18yrs with moderate LVR's. Never redeemed anything always reinvested. It seems over last 2-3yrs the lending became aggressive by storm. Push, push push. But responsibility is mine. Although I was always assured the interest payments were being met by the portfolio and it was still growing. Didn't know how to do figures to check. Left it there. Other than sad I feel highly embarrassed. This event has financially wiped out two generations of my family.


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## -Bevo- (28 January 2009)

Pindibog said:


> I have been with my advisor for over 18yrs. She had changed from MLC to Ozdaq securities and then Storm until she retired. When looking through the paperwork I saw Ozdaq Securities was signed off by Julie Cassamattis?
> Was Ozdaq securities the same company and then changed name to Storm?
> 
> I have the same story as most. But I have survived for over 18yrs with moderate LVR's. Never redeemed anything always reinvested. It seems over last 2-3yrs the lending became aggressive by storm. Push, push push. But responsibility is mine. Although I was always assured the interest payments were being met by the portfolio and it was still growing. Didn't know how to do figures to check. Left it there. Other than sad I feel highly embarrassed. This event has financially wiped out two generations of my family.




Sorry to hear about your situation, Yes Storm was once called Ozdaq Securities and before that I think Cassamattis Securities same people same plan different name.


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## bunyip (28 January 2009)

Pindibog said:


> I have been with my advisor for over 18yrs. She had changed from MLC to Ozdaq securities and then Storm until she retired. When looking through the paperwork I saw Ozdaq Securities was signed off by Julie Cassamattis?
> Was Ozdaq securities the same company and then changed name to Storm?
> 
> I have the same story as most. But I have survived for over 18yrs with moderate LVR's. Never redeemed anything always reinvested. It seems over last 2-3yrs the lending became aggressive by storm. Push, push push. But responsibility is mine. Although I was always assured the interest payments were being met by the portfolio and it was still growing. Didn't know how to do figures to check. Left it there. Other than sad I feel highly embarrassed. This event has financially wiped out two generations of my family.




I admire the courage and honesty of you and a handful of others who have admitted the responsibility is yours. 

Despite the forthright views I've expressed about the whole Storm thing, I feel truly sorry for you Stormers and the unfortunate situation you find yourselves in.


----------



## awg (28 January 2009)

cuttlefish said:


> One comment that Cassimatis made in the interview led me to think that CBA may have not made the margin calls until the share portfolio's were well over the margin limit - as opposed to making the margin calls and selling the stock as soon as they hit the margin limit.    This may have occurred - and if it did then people possibly didn't get margin called until they were a lot further into the red than they were supposed to be.  This would understandably be a cause of frustration but is also quite a ridiculous thing to rely upon.
> 
> It is incredibly poor portfolio management to rely on a lender to execute a margin call/sale of stock rather than monitoring the position of the portfolio yourself.
> 
> ...






Julia said:


> Perhaps my expectations were unrealistic, but I found the interview disappointing.  Cassimatis should have been put properly on the spot with quotes of actual LVR's reported by clients, and examples of the excessive leveraging given.
> 
> As it was, Cassimatis' statement that it would all have been just fine had the CBA not prematurely acted was pretty much allowed to stand.
> Pity the CBA didn't choose to participate but I suppose they will be keeping their comments for where it matters.






Did not see the show, but it will be most interesting to see a few things:

*EXACTLY how and who managed the margin on the Storm badged funds, this would surely be defined by written contract, as there are many funds of similar type. Buying and selling stock would take place regularly to balance the index & margin, redemptions etc....so who did that?

* Did Cassimatis have there money tied up in there own products?
 ie True Believers

if they did they are probably close to bankrupt themselves, they also might have given directors guarentees or security to their primary lender, whatever the case, they must be feeling sick as a dog hit by a truck


----------



## MR. (28 January 2009)

Monday 9th February 8:30pm ABC1

Four Corners opens for the year.  
Think the program might be about the Storm.


----------



## Solly (28 January 2009)

*Storm Financial software provider still active*

"Ignite Financial Systems and Research, an associate company of Storm Financial, has moved to the collapsed dealer group’s Brisbane offices.

According to Ignite’s application for an AFS licence, it is now based at No.1 Breakfast Creek Road, Newstead in Brisbane."

"An ASIC spokeswoman confirmed the regulator had received an application for a financial services licence from Ignite. 

The Ignite licence application is still being reviewed by ASIC.

“We are assessing the application, but no decision has been made about granting a licence,” she told Money Management."

"Ignite Financial Systems and Research, which changed its name from Storm Research in 2007, made an application for a licence before Christmas. 

At the time of the name change, Emmanuel Cassimatis was a director of the company and Michael Fenech was managing director.

Money Management is in the process of confirming if either is still involved with the company.

A lodgement last Friday changing some of the company details has been sent back to the company for clarification, an ASIC spokeswoman said."


Full Story by John Wilkinson from Money Management here:

http://www.moneymanagement.com.au/article/Storm-Financial-software-provider-still-active/435983.aspx


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## bunyip (28 January 2009)

GumbyLearner said:


> Someone did indeed drop the ball. But I think what's more important is to play the ball and not the man!




I wasn't playing the man instead of the ball.
I simply used the story of one man to highlight a problem that seems to have been a common factor in Storm clients getting into trouble.....namely, that many of them had a poor understanding, and in some cases virtually no understanding at all, of the effects of gearing, the risks it involved as well as the potential rewards it offered, and what level of gearing was appropriate to their individual circumstances. 
Discussion of this sort of stuff on the forum will hopefully make Storm victims more financially savvy so they won't repeat their mistakes next time around. And for some of them, those who are young enough to start again, there _*will*_ be a next time.


----------



## Solly (28 January 2009)

Julia said:


> Perhaps my expectations were unrealistic, but I found the interview disappointing.  Cassimatis should have been put properly on the spot with quotes of actual LVR's reported by clients, and examples of the excessive leveraging given.
> 
> As it was, Cassimatis' statement that it would all have been just fine had the CBA not prematurely acted was pretty much allowed to stand.
> Pity the CBA didn't choose to participate but I suppose they will be keeping their comments for where it matters.




I was equally disappointed as well. I suppose that CBA maintaining the no comment stance is because of the potential proceedings. 
Maybe the 4 Corners investigation with Chris Masters will be more in depth.

I spent some time today talking with an ex-storm client, they saw the report and are still bewildered that their money is gone. The first they knew that things were coming off the rails was when they got a call from Colonial. They were always assured by Storm that they'd never get a margin call or be at risk of losing their house. Of course there is nothing in writing. They really don't even know what is in their SoA. They were just baffled by the hype and caught up in the belief that their future was safe and secure. Now they feel really stupid and embrassed about it all and very very down.
They asked for help but the only thing I can give them is a hard case of reality, their only hope lies within themselves. They will never have the multi millionaire life style they envisaged, but just maybe they are "richer" with out it.


----------



## Solly (29 January 2009)

Another Article by Michael West

*Storm warning of 'seismic consequences'*

"AS THE banks were closing in and desperate clients had twigged to their impending ruin from a plunging stock market and its effect on their margin loans, the founder of Storm Financial Group wrote to the head of the Commonwealth Bank cautioning "seismic consequences" if the bank did not help.

It is understood Storm separately asked for an unsecured loan of $60 million from the bank to dig its clients out of trouble until the market recovered."

The full story is here:


http://business.theage.com.au/business/storm-warning-of-seismic-consequences-20090128-7s1v.html


----------



## Solly (29 January 2009)

*Storm Financial fallout – short on salvation *

"MORE than 500 people crushed by the Storm Financial meltdown crammed a Catholic church hall at Kirwan last night to hear a message of hope for salvation. 

If sheer numbers were any guide, then as Townsville Mayor Les Tyrell told the meeting, they could feel some comfort they were not alone.

Yes, there were remedies, they were told, legally and through other means – because financial planner Storm Financial, at best, had acted irresponsibly. The banks were also at fault, they were told.

However, lawyer Damian Scattini of litigation specialists Slater and Gordon told them straight that there would be no full recovery from positions where they had lost homes and lifesavings.".....................



"Mr Scattini said it was his guess that Storm Financial would be liquidated.

He said Storm Financial did have indemnity insurance but that the aggregate figure of coverage would `spread thin on the toast' for clients. Also, the insurance did not cover for acts of dishonesty which were now being revealed in their investigations."  



Tony Raggatt's full story is here:

http://www.townsvillebulletin.com.au/article/2009/01/29/35735_hpphoto.html


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## cuttlefish (29 January 2009)

Solly said:


> He said Storm Financial did have indemnity insurance but that the aggregate figure of coverage would `spread thin on the toast' for clients. Also, the insurance did not cover for acts of dishonesty which were now being revealed in their investigations."




Thats dissappointing but not unexpected - most PI policies default to around $20 million (or is it $40 million?).  Either way with it sounds like at least a thousand people affected we're talking well under $100k per person  (even at $40 million its less than $50k if there are a thousand in the queue for compensation).   PI was the only likely recourse I could see  (and a justifiable one as well by the sounds of it).

Something else that is mentioned in the article is falsification of incomes.  It sounds like Storm advisors may have encouraged people to make misleading statements about their incomes to apply for larger loans  (this wouldn't surprise me - my experience with mortgage brokers and no-doc loans is that if you have adequate LVR you were able to get finance simply by signing a stat dec and no other proof of income was required).   The unfortunate thing is that any investor that signed a stat dec or document that they knew had an incorrect  income on it are potentially parties to fraud (I'm not a lawyer so this is just an opinion, but this seems like commonsense). - it would be very hard to defend a case against a bank from that position in my view.

Given that a lot of retirees with low incomes seem to have far more debt than they can afford to repay it would seem that somehow income statements have been produced that don't reflect their true income.

Another possibility is that the high incomes were real, but a large component of the income was based on profits from realised capital gains and from investment incomes.


----------



## pilots (29 January 2009)

It is a sad ending to see just what happens to people that have very little knowledge of investing.  The saddest part is that the same people will be getting told right now we can help you get most of that money back.


----------



## Jayan (29 January 2009)

In the age of technology we live in, there is NO excuse for not being at least a bit financially savvy. There are books, magazines, internet, TV programs daily on investing and wealth building. You would either have to live in a cave or watch the shopping channel 24/7 to not have picked up at least some knowledge.

At the end of the day, investors who borrowed borrowed borrowed are the crux of the problems facing us all ATM. Whether you know it or not ..YOU are affected and picking up the tab for these people, when the debts don't get paid.

They weren't whinging when they thought the $ were rolling in, they were happy to keep on borrowing, without knowing what they were doing, if you ask them!  Oh please, I get in a car and have no idea how to drive, I get by on sheer good luck till I hit a pole, and then plead I didn't know what I was doing!

I'm over it, used to have sympathy but the FACTS are they are all dragging everyone else down with their greed! 

There are going to be many many more before this is over. With everyone running to the court house to sue everyone else over their greed and stupid decisions ... Wonder who the last man standing will be?


----------



## daisy (29 January 2009)

Storm Finanical founder Emmanual Cassimatis has asked for help from the Prime Minister to bail his clients out of debt. It comes as one thousand clients prepare for a meeting tonight. 

http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld


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## cutz (29 January 2009)

daisy said:


> Storm Finanical founder Emmanual Cassimatis has asked for help from the Prime Minister to bail his clients out of debt. It comes as one thousand clients prepare for a meeting tonight.
> 
> http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld




I’ve mentioned it before and I’ll mention it again,

Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?

There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.


----------



## tasmart (29 January 2009)

cutz said:


> I’ve mentioned it before and I’ll mention it again,
> 
> Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?
> 
> There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.




I strongly agree!

I fnd it quite annoying that people & companies that got it wrong expect (and some succeed) to be bailed out - whilst those that acted more responsibly, even with some (but sensible) leverage may get nothing! Any government initiatives using tazpayer monies should be equitable! Unfortunately politics rears it head(s).


----------



## -Bevo- (29 January 2009)

cutz said:


> I’ve mentioned it before and I’ll mention it again,
> 
> Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?
> 
> There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.




Absolutely agree there cutz, as sad as the situation is for some we have to remember that history is littered with people who have lost most or all of there life savings due to poor investments decisions, they should leave any possible recovery up to the courts or insurance but don't use taxpayers money to bailout storm clients.


----------



## MR. (29 January 2009)

daisy said:


> Storm Finanical founder Emmanual Cassimatis has asked for help from the Prime Minister to bail his clients out of debt. It comes as one thousand clients prepare for a meeting tonight.
> 
> http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld



Classic!  You're joking "Not even in Queensland"


----------



## beachbum (29 January 2009)

daisy said:


> Storm Finanical founder Emmanual Cassimatis has asked for help from the Prime Minister to bail his clients out of debt. It comes as one thousand clients prepare for a meeting tonight.
> 
> http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld




If Mr & Mrs Cassimatas are so concerned about their clients, lets see them put all their personnel assets in the pot for their clients who lost all due to a "Black Swan Event". The Melton Terrace house is on the market. Let's see where the proceeds go.


----------



## pilots (29 January 2009)

cutz said:


> I’ve mentioned it before and I’ll mention it again,
> 
> Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?
> 
> There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.



Cutz, how true, what up sets me is that we help the first ones that go's to the wall, the first ones to go to the wall is the weakest one, let them burn, look after the strong with good management.


----------



## stung (29 January 2009)

We did not see any one from the Comm Bank when we applied for our investment loan. We were interviewed by Storm and they applied on our behalf. 
I applied to the bank to have a copy of the form and it arrived today.
This form has been filled in by Storm and  does not contain our signatures.

There are a few anomalies but I do not know whether they are significant or not. 

1)  When we provided proof of income I asked that mine be downgraded on the loan application because I had a larger than normal income that year and that income would not continue. The higher income was listed on the submitted form.

2) No dependent children were listed yet we have one and he is very costly due to a chronic illness.

3) No other personal debts are listed yet I told the advisor that I owed my Mother $25 000.

4) Under a column entitled other income,  $1 850 a month is listed yet aisde from our wages we have no other income at all. I have no idea where this figure has come from.



I have now come to terms with my heavy debt ($630 000) and admit that I was financially naive when it came to margin loans but I will never let Storm off the hook because they told us so many lies. I still hate them.


----------



## stung (29 January 2009)

beachbum said:


> If Mr & Mrs Cassimatas are so concerned about their clients, lets see them put all their personnel assets in the pot for their clients who lost all due to a "Black Swan Event". The Melton Terrace house is on the market. Let's see where the proceeds go.




I agree.

I wrote him a letter enclosed a photo of my only child, told him of my son's illness (awaiting a lung transplant) and asked him for some money (desperate times call for desperate measures).

Let me tell you... all shame goes out the window when you go broke.

I did not get a reply.


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## myusernam (29 January 2009)

Cassimatis line has changed.  He states in the radio interview
http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld
and several times in the media blaming commonwealth bank and Quote" if the banks rang people when they should have" 
Insenuating that the banks should have sold down people before they went into negative equity......
But in the storm investor update which happened late last year he told people if they had received phone calls from the bank that they should refer the bank back to storm.  That they would handle everything and that the bank shouldn't be contacting anyone.
They were the ones stalling in the sell down process.


----------



## stung (29 January 2009)

cutz said:


> I’ve mentioned it before and I’ll mention it again,
> 
> Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?
> 
> There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.




I am a Storm client and I agree. 
I will not join SICAG because they blame the banks and I do not think they are at fault. I will not join a class action either if they are to persue the banks. I will if they chase the Storm executives though. I do not expect to see any money and do not care but I would love to see Mr C go to jail and some of the advisors lose their licences.

As for Mr C asking for the govt to help us out. It will never happen and we all know it including him. He is just trying to deflect the spotlight from himself. 


Come on Mr C I have admitted to being a fool to invest in this way and have accepted my debt. Why can't you admit you're a crook for having your advisors lie to us all.


----------



## Solly (29 January 2009)

From:

http://www.abc.net.au/news/stories/2009/01/29/2476873.htm?section=business

Regarding the SICAG meeting;


"Australian Securities and Investments Commission (ASIC) spokesman Trevor Clarke addressed the group and urged people to provide ASIC with information for its investigation.
"There is a dedicated phone number *1300 300 630* which we're coordinating all our responses through," he said"


----------



## Solly (29 January 2009)

stung said:


> I am a Storm client and I agree.
> I will not join SICAG because they blame the banks and I do not think they are at fault. I will not join a class action either if they are to persue the banks. I will if they chase the Storm executives though. I do not expect to see any money and do not care but I would love to see Mr C go to jail and some of the advisors lose their licences.
> 
> As for Mr C asking for the govt to help us out. It will never happen and we all know it including him. He is just trying to deflect the spotlight from himself.
> ...





I understand your position regarding joining a class action.

I suppose it's over to the regulators and legal system to make a determination about this event. 
The system may not be perfect, but it's the only one we've got.
I just wish it would move at a faster rate.


----------



## Monario (29 January 2009)

cutz said:


> I’ve mentioned it before and I’ll mention it again,
> 
> Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?
> 
> There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.





Of course CUTZ your so right.... Of course we should forget the individuals... 

After all the banking system has not burdoned the tax system in anyway, SUBPRIME MORTGAGES have nothing to do at all with the situation the world economy is in, and the hugely obscene salaries that CBA and MACQUARIE heads took on the back of these type of investments are ethically and morally correct... Its fine for them to have done what they have and have taxpayer dollar secure them, not to mention that they will after this help continue to take these obscene salaries and bonuses....

Your absolutley rite to feel that tax money should be spent only to help the corporations, why should it be spent on the indviduals who tried to be self funded retirees and not burdone the system, just because they have been self sufficient for the last ten years does not entitle them to not have to pay tax..

I also agree Whole heartedly with companies like RIO/BHP recieving 500mill a year in taxpayer funded fuel subsidies for onsite machinery, and also feel that its fine for them to continue to recieve it even after they sacked 7000 Australian employees over the last 12 months.. 

Hmmmm... Now that I have read that not sure if I do agree...:

Appears to me that with majority of people thinking like this it may not be long before the world is controlled soley by corporations, and not government...


I also agree with the 10bill spent to stimulate the economy, I mean of course the people who got it deserved it, and in no way would it have been better spent on infrustructure, And I am sure that 10bill spent on renewable resource projects would have created ZERO jobs for people who are losing them daily to move into... And would also have had no effect on the Carbon scheme we are trying to get off the ground...

I mean that 10bill that was poured in, in no way helped prop up the massive corporations that are ailing, and cutting jobs, and are the bulk of the reason the economy is stuffed.... The only reason the economy is up to SH*T is because of these greedy self funded retirees who have lost everything..(everything been on average 2mill, which encompasses there house, retirement fund, and investment)
And it has nothng to do with what banks around the country and world have done...

I feel the best course of action would be that these people lose everything incuding their homes, then rely soley on govenrment handouts over the next 15-25years of their remaining days on this earth...


----------



## Trevor_S (29 January 2009)

Monario said:


> Of course CUTZ your so right.... Of course we should forget the individuals...




"We" haven't forgotten the individual at all, those close to or in retirement will be entitled to a pension, paid for by the tax payer for as long as they live.  That's quite the healthy bail out (or largess) from the tax payer IMO. Of course, that might not give them the lifestyle they had planned on, though reading these stories, lots of them seemed to want money for the elder children and grandchildren.  I guess, like the rest of us, their siblings will have to fend for themselves.  

Those a little younger will have to start over, but as long as they have a job they can rebuild a little dignity for themselves if they hopefully come to grips with it all.

That aside, I am sure there are other retirees in similar positions and will loose large streams of income, with dividends being reduced and fixed interest tanking completely.  Welcome to the new world order of the sky rocketing welfare budget... my tax dollars at work.. I guess... never mid the infrastructure and education spending that we will forgo, in order to pay the increased welfare budget, leaving us even further behind when the economy (hopefully) resumes.

and the "aussie battler" that so often seems to be held up to the spotlight by political parties seems to be doing the best from this, (if they keep a job).  Assuming they are mortgaged out the ying yang, there loan payments are now considerably less, their fuel bill is considerably less in commuting god awful distances from outer suburbia, CPI is down etc etc  What care they as an owner occupier if their house prices fall.. I very much doubt Banks will want to foreclose as long as loan payments are met.


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## boundless (29 January 2009)

stung said:


> Why can't you admit you're a crook for having your advisors lie to us all.




You can't say things like this and get away with it. Don't be surprised if you get sued for defamation.


----------



## Solly (29 January 2009)

beachbum said:


> If Mr & Mrs Cassimatas are so concerned about their clients, lets see them put all their personnel assets in the pot for their clients who lost all due to a "Black Swan Event". The Melton Terrace house is on the market. Let's see where the proceeds go.




Well Mr Cassimatas did state in the 7:30 Report that '''I feel a huge moral responsibility."  Whatever this means....


----------



## Monario (29 January 2009)

Trevor_S said:


> "We" haven't forgotten the individual at all, those close to or in retirement will be entitled to a pension, paid for by the tax payer for as long as they live.  That's quite the healthy bail out (or largess) from the tax payer IMO. Of course, that might not give them the lifestyle they had planned on, though reading these stories, lots of them seemed to want money for the elder children and grandchildren.  I guess, like the rest of us, their siblings will have to fend for themselves.
> 
> Those a little younger will have to start over, but as long as they have a job they can rebuild a little dignity for themselves if they hopefully come to grips with it all.
> 
> ...






I still dont understand the logic here Trevor!

Do you think it ok, that these huge corporatons take massvie salaries/bonuses, then put out there hand for help?

If they had been more diligent along the way and not cocked up the schemes that trapped people wanting to better themselves, both the individual and the world would not be in this position...

So insetead of the corporations been left out to dry, it is the individual who is punished, left to scratch out an existence on the dole, while the corporations sit back, get bailed out, and let there ceo's take salaires that could buy a small country out of debt..

taxes rise, annual payrises drop, fees rise, the rich get richer the poor get poorer is the old saying... Well I am just not comfortable with that...


----------



## Solly (29 January 2009)

Monario said:


> I still dont understand the logic here Trevor!
> 
> Do you think it ok, that these huge corporatons take massvie salaries/bonuses, then put out there hand for help?
> 
> ...




British philosopher and sociologist, Herbert Spencer coined the phrase "Survival of the fittest" this relates to the concept of competition for survival or predominance.  My belief is that the term "fittest" refers only to an organism's ability to survive and not to physical strength, size or intellect.

There's no fairness test or universal policer in the matters you referred to above, you can't rely solely on Government, laws, rules etc. It's your innate belief in your own abilities that ensures and secures your own survival.


----------



## bunyip (29 January 2009)

Monario said:


> Of course CUTZ your so right.... Of course we should forget the individuals...
> 
> After all the banking system has not burdoned the tax system in anyway, SUBPRIME MORTGAGES have nothing to do at all with the situation the world economy is in, and the hugely obscene salaries that CBA and MACQUARIE heads took on the back of these type of investments are ethically and morally correct... Its fine for them to have done what they have and have taxpayer dollar secure them, not to mention that they will after this help continue to take these obscene salaries and bonuses....
> 
> ...




So if the government was to use taxpayers money to bail out Storm clients, should they also bail out every other person in the county who makes or has made an investment that failed?

A farmer sinks half a million dollars of borrowed money into developing his farm for cotton growing. The price of cotton collapses - his bank forecloses because he can't meet his loan commitments. Should taxpayers money be used to bail him out?

An entrepreneur borrows heavily to build a child care centre in a booming mining town. He runs into financial difficulty when a big chunk of his custom disappears after hundreds of miners are laid off and leave town. Should taxpayers money be used to bail him out?

I'm a currency trader. If I make some bad trading decisions that bring me undone, and the banks start closing in on me, should taxpayers money be used to bail me out?

I could give you other examples, but I won't. There are thousands of investors in hundreds of different businesses and investments who could, and sometimes do, get into financial trouble. Sometimes the fault is theirs, sometimes it's not. Should taxpayers money be used to bail them out?

If the government moved to bail out disgruntled Storm victims, it would set a precedent that could bring claims from every failed investor in the country.

By asking the government (read taxpayers) to bail out his clients, Cassamatis is doing nothing more than trying to restore a small degree of credibility to his increasingly tarnished reputation.
He knows very well it's not going to happen. And so it shouldn't.
Storm clients never offered to share their profits with me when they were doing well. Why should I and other taxpayers now be asked to share their losses?


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## Monario (29 January 2009)

bunyip said:


> So if the government was to use taxpayers money to bail out Storm clients, should they also bail out every other person in the county who makes or has made an investment that failed?
> 
> A farmer sinks half a million dollars of borrowed money into developing his farm for cotton growing. The price of cotton collapses - his bank forecloses because he can't meet his loan commitments. Should taxpayers money be used to bail him out?
> 
> ...




Point taken, but if we take the approach that, individuals should be resposible for their shortcommings why dont we take that for the corporations that have done the damage in the first palce.....

Here is one for you....

The banks have leant out massive amounts of money to clients that could not afford the loans in the first place, loans that they carry out risk analysis on, they have gone south and now, the government spends billions bailing out the banks.... Hwoe is at fault here? and why are they getting aid while the individual gets nothing?

My Question to all is not: why are we not helping the individuals get out of the Sh*t..... 

My question is: why are we *only *helping the banks/corporations that were the root cause of the majority of these problems in the first place?


----------



## Monario (29 January 2009)

bunyip said:


> Storm clients never offered to share their profits with me when they were doing well. Why should I and other taxpayers now be asked to share their losses?




True, they never offered to share profits directly with you, why would they... However, they did choose for many many years, to be self funded, and not draw an income from the tax dollar. (within this they are actually sharing proceeds of their investments by not drawing income from pensions etc.)

Did BHP offer up anything to you for the 500mill. you paid in subsidies, subsidies that were for carbon emmiting highly pollutant machinery?

Did CBA/NAB etc. offer the full rate cuts after our taxes went to prop up their failed systems?

Did local councils that bought bonds of bad debt (subprime) with taxpayer dollars offer to repay this? did the banks that sold it to them offer compensation?

Sure they did not pay tax, well actually they did, and all of them paid to some extent, but they also did not draw an income form the tax system..

I hope you can see what I am saying here...


----------



## Bill M (30 January 2009)

I have lost a lot of money in the last 18 Months as well but not with Storm Financial.

I ask nothing from the Government from ultimately my own own failures through bad investments so why should anyone else?

Without reading the whole thread all I'm going to say is if you bail out one bad apple you got to bail all of them out. My opinion is that let the receivers do their job, get back what you can and live with your mistakes. Nobody holds a gun to your head when you make these bad investment decisions, good luck to all, I know how you feel.


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## Monario (30 January 2009)

bunyip said:


> An entrepreneur borrows heavily to build a child care centre in a booming mining town. He runs into financial difficulty when a big chunk of his custom disappears after hundreds of miners are laid off and leave town. Should taxpayers money be used to bail him out?





I can give you a conclusion to this...

Raptis group have gone foul, they owe an estimated 450mill to unsecured creditors... 

Unsecured creditors, people like you and me, contractors, small business trying to get ahead....

But instead of these people been the first inline, it is the banks. The banks were the ones who leant the money under stringent risk analysis and conditions... They measured the risk and took it, and they expect the individuals who worked their arses off to to build the project and hopefully make the banks a profit, to walk away with nothng..

These people have lost wages, put there homes on the line to start business, that will now fail due to the banks initial stuff up of not measuring the risk accurately in the first place...

They now will sit back, liquidate the company, pay back the loans, and cash in on all the individuals misfortunes who were tied up in this debacle.. these people will either lose there homes to the bank and still owe money, and rely on small pathetic government assistance to continue on, or hopefully manage to pick up the pieces and move onto projects that will pay out.. But one can only struggle so long before realising the system has a few too many holes that let the big players slip through... unscathed

Do you feel that this is ok? a simple yes or no answer will suffice!


----------



## Monario (30 January 2009)

Bill M said:


> I have lost a lot of money in the last 18 Months as well but not with Storm Financial.
> 
> I ask nothing from the Government from ultimately my own own failures through bad investments so why should anyone else?
> 
> Without reading the whole thread all I'm going to say is if you bail out one bad apple you got to bail all of them out. My opinion is that let the receivers do their job, get back what you can and live with your mistakes. Nobody holds a gun to your head when you make these bad investment decisions, good luck to all, I know how you feel.




 I agree Bill, but this is not the case, here the government is propping up the banks for their mistakes, while the CEO"S of them still take home huge salaries, and move to strip the personal assets from the people they should not have leant the money to in the first place...


----------



## Trevor_S (30 January 2009)

Monario said:


> I still dont understand the logic here Trevor!




I was just pointing out, that it's not like they get nothing, ever again, well those on or near retirement age, we DO give them a bail out, to the tune of a crap load of free money they never have to pay back, in the form of a pension.



Monario said:


> Do you think it ok, that these huge corporatons take massvie salaries/bonuses, then put out there hand for help?




No but remember, the result of not supporting a "huge corporation" are huge job losses .. flip a coin...  I have long argued that Board and CEO salaries should be capped (even Warren Buffett and Gerry Hervey think they are overpaid) at 10x the median wage of the company they work for and they have no other financial entitlements then what is available to every other employee... but that's a whole other debate.  It can't be done by the shareholder, it's something Government has to legislate.



Monario said:


> If they had been more diligent along the way and not cocked up the schemes that trapped people wanting to better themselves, both the individual and the world would not be in this position...




That's one way of looking at it.



Monario said:


> So insetead of the corporations been left out to dry, it is the individual who is punished, left to scratch out an existence on the dole, while the corporations sit back, get bailed out, and let there ceo's take salaires that could buy a small country out of debt..




Complain to your local member.



Monario said:


> taxes rise, annual payrises drop, fees rise, the rich get richer the poor get poorer is the old saying... Well I am just not comfortable with that...




PM me your address, I will post you a well worn set of sneakers to be comfortable in...


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## Monario (30 January 2009)

Trevor_S said:


> I was just pointing out, that it's not like they get nothing, ever again, well those on or near retirement age, we DO give them a bail out, to the tune of a crap load of free money they never have to pay back, in the form of a pension.



 A crap load? less the $270 a fortnight.






Trevor_S said:


> No but remember, the result of not supporting a "huge corporation" are huge job losses .. flip a coin...



And clearly as we see today, and in recent time supporting them also leads to job losses...





Trevor_S said:


> That's one way of looking at it.



Show me another please, I am open to understanding this, and am not posting here just to rant and rave, but to learn and understand why there are so many flaws in the system that never seem to be fixed.




Trevor_S said:


> Complain to your local member.



I have and am in the process of talking with them on these and other issues.





Trevor_S said:


> PM me your address, I will post you a well worn set of sneakers to be comfortable in...



  The shoes would happen to be those of a company CEO..?


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## bunyip (30 January 2009)

Monario said:


> Point taken, but if we take the approach that, individuals should be resposible for their shortcommings why dont we take that for the corporations that have done the damage in the first palce.....
> 
> Here is one for you....
> 
> ...




With the Storm Financial debacle, I'm not convinced the banks were the root cause of the problem. Banks make loans available only after the borrower satisfies the banks requirements regarding income, net assets, and the ability to meet loan commitments. 
Normally the borrower must provide proof to back up whatever claims he makes in his loan application. Such proof would normally include things like pay slips from the last three months to prove income, and current valuations from a registered valuer of the borrowers main assets such as real estate. If a third party is acting on behalf of the borrower, then I presume it's the responsibility of the third party to provide the proof.
Lenders of my experience will never make the loan available without a signed statement from the client, stating that they've read and fully understand the conditions of the loan. 
The bank will normally spell out what action they, the bank, are entitled to take during the life of the loan.
I think Storm clients who are  blaming the banks for what happened are perhaps doing so prematurely and maybe unfairly.

Anyway, I'm not going to get into some pointless debate about whether the banks or Storm bear the responsibility. What I do know with absolute certainty is that anyone borrowing investment money, Stormers or anyone else, has a responsibility to themselves to keep their fingers well and truly on the pulse. Even if they employ professional investment advisers, it's nevertheless imperative that they monitor both their investments and their investment advisers. 
Some people might take issue with this, asking, quite reasonably, 'why the hell should I have to monitor my investments when I've employed a professional to do the job for me'?
And the answer is 'You shouldn't, but prudence dictates that you do'.
Why? Because if you don't, you take a hell of a risk. You assume that your adviser/financial planner is infallible. You assume he's doing everything just the way you want it done. You presume he has integrity. And that's a very dangerous assumption.

I know someone who bought an inland cattle property from a butcher who had a chain of butcher shops on the coast, four hundred kilometres away. The butcher was selling the property because it wasn't paying. It wasn't paying because he rarely went near it, and the property manager was robbing him blind, selling truckloads of cattle on the sly and pocketing the proceeds.
The butcher was a businessman, but not a cattleman, so he believed he was doing the right thing in employing a professional cattleman to manage the property. Sound thinking, but his mistake was in his attitude of 'I'll leave the running of the property entirely to my manager....he's the expert cattleman, not me.'
His outcome would have been very different if he'd had the sense to visit the property once a month and keep tabs on the operation and the bloke managing it.
Storm investors outcome would have been different if they'd kept tabs on their investments and the people managing them.

As for why do we bail out corporations but not individuals. The answer to that one is so simple it's a no brainer. Corporations are no more worthy of being bailed out than individuals are. They're bailed out as a measure of avoiding catastrophic job losses and subsequent negative flow on effects to the economy.
They're bailed out to preserve the revenue stream they provide to government.
Yes, we all know it doesn't seem fair, but that's part and parcel of capitalism at work.


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## Stormin_Norman (30 January 2009)

bunyip said:


> Yes, we all know it doesn't seem fair, but that's part and parcel of capitalism at work.




intervention in capitalism @ work.

or the 'government must be seen to be doing something' effect.


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## bunyip (30 January 2009)

Monario said:


> I can give you a conclusion to this...
> 
> Raptis group have gone foul, they owe an estimated 450mill to unsecured creditors...
> 
> ...




I don't know of anyone who's claiming the system is perfect or entirely just. But that's how our capitalist system works, rightly or wrongly. The banks and big corporations will always get looked after before the little blokes like you and me, because without them to provide the credit and the lending and the jobs, our whole system collapses.
That's just the reality of the situation. You can rant and fume about it all you want, as we all can. But the system will remain pretty much as it is.
I don't like the banks either....I've paid them a lot of money in the past which I reckon they weren't entitled to. But they are, unfortunately, a necessary evil.
For all the shortcomings of our system, I still think we're fortunate to be living in a capitalist society. Anyone who thinks otherwise should move to a communist country for a while to get a comparison.


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## bunyip (30 January 2009)

Stormin_Norman said:


> intervention in capitalism @ work.
> 
> or the 'government must be seen to be doing something' effect.





Yeh, you're probably right there Norm - it's intervention in capitalism. 
But intervention in capitalism, via government bail outs, has become so commonplace that I think we can almost view it as part of the capitalist system itself.

Governments cover their posteriors any way they can, and bail outs are just one of the methods they employ.


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## Monario (30 January 2009)

bunyip said:


> I don't know of anyone who's claiming the system is perfect or entirely just. But that's how our capitalist system works, rightly or wrongly. The banks and big corporations will always get looked after before the little blokes like you and me, because without them to provide the credit and the lending and the jobs, our whole system collapses.
> That's just the reality of the situation. You can rant and fume about it all you want, as we all can. But the system will remain pretty much as it is.
> I don't like the banks either....I've paid them a lot of money in the past which I reckon they weren't entitled to. But they are, unfortunately, a necessary evil.
> For all the shortcomings of our system, I still think we're fortunate to be living in a capitalist society. Anyone who thinks otherwise should move to a communist country for a while to get a comparison.





Perhaps we are overdue for some restructuring of the legislation that companies, failed companies, and ceo's etc. hide behind when the  things go wrong...

I, and I believe many others feel it is time that the laws that let these things happen, are updated...


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## cuttlefish (30 January 2009)

Monario said:


> A crap load? less the $270 a fortnight.





Its not much I'll grant that - but at the same time it might be time to count your blessings - there are people living in far worse off situations around the world.

Storm financial pushed clients into these products - and it sounds like many clients took zero responsibility for understanding what was happening with their money and for the level of debt that they were taking on.  Its all well and good to blame the banks - but there are three parties involved in these transactions by - Storm, the bank and THE CLIENT - the client has a responsibility to monitor their debt and their investments.

There are numerous people that are in financial strife as a result of the global meltdown - I don't see why govt money should be directed solely at Storm clients.   The only reason govt money is directed at the banks is because we'd probably be in civil war by now if they hadn't - bank runs on our major banks would be an ugly thing.

But raising the pension doesn't sound like a bad idea.


----------



## cuttlefish (30 January 2009)

stung said:


> We did not see any one from the Comm Bank when we applied for our investment loan. We were interviewed by Storm and they applied on our behalf.
> I applied to the bank to have a copy of the form and it arrived today.
> This form has been filled in by Storm and  does not contain our signatures.
> 
> ...




I'm very surprised by these comments.   It would astound me if the bank agreed to create these loans without a signature from the client.  If this is indeed true then the banks certainly should bear significant responsibility but I suspect that somewhere along the line the client will have signed something.

The fact that the mortgage brokers/Storm have knowingly put false or misleading information (with or without the clients approval) would not surprise me as this happened all over the place in the US by the sounds of it, and my experience with mortgage brokers tended to be that many were gung ho.    But the banks accepting documentation unsigned by the client - that would be quite astounding - and would almost certainly make the contracts null and void (I'm not a lawyer - but a contract with no signature isn't a contract).   

They have such stringent procedures around the loan creation processes and document check processes that I can't imagine it being the case - but *_if _* somehow this was all short circuited through some 'matey' relationship with Storm then that would be scandalous and worthy of some serious govt and legal attention.


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## Dezza (30 January 2009)

Were the documents signed by the Storm advisers on your behalf? Wonder how they got processed by Colonial Margin Lending without them...

The scary thing is where are the financial advisers that use to work for Storm now? I'm sure some would've jumped ship before the collapse and perhaps moved to one of the Big 4 banks?


----------



## Solly (30 January 2009)

*Calls to secure passport of Storm Financial's Emmanuel Cassimatis*

"As creditors of Storm Financial count the cost, founder Emmanuel Cassimatis is facing calls to surrender his passport to prevent him fleeing overseas.

Devastated former clients, mostly retirees and many who have lost their homes and entire life savings in the $100 million collapse of the Queensland-based business, also want him banned from obtaining a new financial licence."

"His private jet has been seized by liquidators and he says he has only "modest means", despite paying himself a $2 million dividend shortly before the collapse."

Peter Michael's  story is here;

http://www.news.com.au/couriermail/story/0,23739,24980495-3122,00.html


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## stung (30 January 2009)

cuttlefish said:


> I'm very surprised by these comments.   It would astound me if the bank agreed to create these loans without a signature from the client.  If this is indeed true then the banks certainly should bear significant responsibility but I suspect that somewhere along the line the client will have signed something.
> 
> The fact that the mortgage brokers/Storm have knowingly put false or misleading information (with or without the clients approval) would not surprise me as this happened all over the place in the US by the sounds of it, and my experience with mortgage brokers tended to be that many were gung ho.    But the banks accepting documentation unsigned by the client - that would be quite astounding - and would almost certainly make the contracts null and void (I'm not a lawyer - but a contract with no signature isn't a contract).
> 
> They have such stringent procedures around the loan creation processes and document check processes that I can't imagine it being the case - but *_if _* somehow this was all short circuited through some 'matey' relationship with Storm then that would be scandalous and worthy of some serious govt and legal attention.




The loan contract setting out the terms and conditions of the loan was signed by us but not the 7 page income/debt data collection form.


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## stung (30 January 2009)

boundless said:


> You can't say things like this and get away with it. Don't be surprised if you get sued for defamation.




Gee suing me would be a worthwhile exercise!


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## Solly (30 January 2009)

*Storm victim bailout unlikely*

"A RESCUE package for battered Storm Financial clients will be considered but the State Government is unlikely to bail out victims of bad investment advice, Premier Anna Bligh says."

http://www.cairns.com.au/article/2009/01/30/25971_local-news.html


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## Solly (30 January 2009)

*3000 Storm homes to hit market*

"Townsville-based economist Carey Ramm, from AEC Group, predicted about 1500 to 1600 of those properties would be in Brisbane.

Mr Ramm, who attended Wednesday night's meeting of former Storm Financial investors in Townsville, has been advising the financial planning firm's investors since before it collapsed early this month.

He said 800 homes may have to be put on the market in Townsville, with up to 300 homes in jeopardy in Cairns, and 200 each in Mackay and Brisbane."

http://www.brisbanetimes.com.au/news/queensland/3000-storm-homes-to-hit-market/2009/01/29/1232818629888.html


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## carey ramm (30 January 2009)

cuttlefish said:


> They have such stringent procedures around the loan creation processes and document check processes that I can't imagine it being the case - but *_if _* somehow this was all short circuited through some 'matey' relationship with Storm then that would be scandalous and worthy of some serious govt and legal attention.




Cuttlefish i think u may be catching on to some of the "irregularities" that are poping up in the loan documentation of many clients.

I have seen documents for loans whose validity is clearly in question.

I would urge all storm clients to request copies of their loan applications from their home loan and margin loan providers and check for "irregularities" and if unsure what they are looking for contact a lawyer (i am aware that both slater and gordon and connolly suthers are asking all the people who have contacted them to do this).


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## carey ramm (30 January 2009)

A quote from todayS SMH article by Michael West.

Storm and CBA had enjoyed a ''fruitful and strong relationship spanning 20 years'' wrote Cassimatis and the ''intertwining of our businesses ... has placed the relationship squarely as a very large disadvantage or positive opportunity depending on the outcome of discussions between you and us''.

He goes on to discuss the ''very profitable'' relationship in which CBA had ''intimate knowledge of Storm's process and credit sign-off, CBA is Storm's largest supplier''.

hmmmmm.... credit sign off.


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## Solly (30 January 2009)

carey ramm said:


> A quote from todayS SMH article by Michael West.
> 
> Storm and CBA had enjoyed a ''fruitful and strong relationship spanning 20 years'' wrote Cassimatis and the ''intertwining of our businesses ... has placed the relationship squarely as a very large disadvantage or positive opportunity depending on the outcome of discussions between you and us''.
> 
> ...




Here's the link to the full article that Carey refers to above;

http://business.theage.com.au/business/storms-death-throes-20090128-7s1c.html

(Carey it's great to see you're still visiting the forum )


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## Trevor_S (30 January 2009)

Monario said:


> A crap load? less the $270 a fortnight.




Yes a crap load, in todays dollars (remember their is also some indexation)  $270 x 26 x 15 (years) x (say 400 Storm clients ) = $42 million and change and that's just an arbitrary 400 from Storm, let alone the rest that will have a reduced income stream from Storm and be entitled to a part pension as well as the rest of the nation in the same boat eg retirees on fixed income streams from term deposits are going to be hit hard as well,  they too will start to get the pension as their term deposits mature... more welfare money needed  Those on welfare already had $10 Billion thrown at them last month, how much more a largess do you want from that tax payers pockets ? 



Monario said:


> And clearly as we see today, and in recent time supporting them also leads to job losses...




Agreed.  In *some* instances, yes some intervention I think is necessary, or it will be a total rout and MORE of joe q public will suffer.  



Monario said:


> to learn and understand why there are so many flaws in the system that never seem to be fixed.




Why ? That one's easy, incompetent Government, we get the Government we deserve.  EVERYONE has to realise that surley, especially retirees, they have decades more experience of it then I. You can't look to Government for the solution, they are the problem, you have to do that for yourself (nor offload the single most important fiscal decisions of your life to someone else, hell I don't let other people choose what I am have for breakfast, let alone where to invest my hard earned).  If people want to keep voting incompetent Government in (and we have been for as long as I have been around) this is the result of that... who to blame, look in the mirror... look at the latest "leader", a full time politician, never worked a productive day in his life and his claim to fame is being a member of the clerical union and yet people still voted for him and his band of merry men... the out come is know before the race is one and yes Howard was just as bad, as was Keating, Hawke, Fraser, Whitlam etc before them



Monario said:


> I have and am in the process of talking with them on these and other issues.




Good for you, but blaming overpaid executives seems a strange way to support them. "Blame" your federal minister and get Government to cap executive remuneration packages if that's your beef.  I too agree they are overpaid, like Kloopers of BHP and a plethora of others.



Monario said:


> The shoes would happen to be those of a company CEO..?




Well, I am CEO of my own company, not a very big one mind you  if that helps ?


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## Glen48 (30 January 2009)

Old mate Chris Skase applied to the court to get his passport backs so he could go over seas  and the PP on the bench asked him how much money he had Chris told him $1,300 ( commonsense tells you you won't go far on that amount ) yet the PP gave Skase his passport back and we know the rest.....


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## Trevor_S (30 January 2009)

carey ramm said:


> Cuttlefish i think u may be catching on to some of the "irregularities" that are poping up in the loan documentation of many clients.




A few of us have mentioned that already eg

https://www.aussiestockforums.com/forums/showpost.php?p=390580&postcount=706



> and that doesn't mean I am not interested to find out why the bank lent them funds with such a crappy income stream ie where there falsehoods on the submitted documentation or was the bank lax in their lending practice ?


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## Julia (30 January 2009)

Monario said:


> A crap load? less the $270 a fortnight.



Might be good to check your facts.
The age pension is around $580 per fortnight.  Rent assistance is also available to people who do not own their own homes and are renting.
In addition there are substantial discounts off electricity, rego, prescriptions, and many other things.
Obviously this is still a very low income, but it's decidedly better than you are trying to suggest.   Many thousands of people have been getting by on it for many years.


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## tonzo (30 January 2009)

As a former Storm client i dont remember actually providing any evidence of my wages or extra income.  We provided a bank statement to prove we had an iniatial investment amount (proceeds of a house sale) and gave verbals of wages.  After the initial paperwork any additional steps (storm speak for extra investment via margin loans) were in the form of several one page forms for us to sign plus a bigger statement to initial that outlined the process.  However after having recently borrowed money for both house and car loans the paperwork we received to borrow margin loans required only one signature whereas the home and car required multiple.  It does seem very possible to me that the loan documents might be fishy and if thats the case both storm and the banks have to be held responsible for potentially shoddy loan approvals.  However i still maintain that individual investors are responsible for there own losses.  People who are scratching their heads wondering how they ended up with so much negative equity need to take responsibility for their own finances.  I would check the value of our storm badged challenger investments several times a week against the value of our margin loans.  Once the difference between the two got close to the level where we would start to have less left over than our initial investment amount we decided to get out.  I should also mention that a year peviously we wished to cash out once we had more than doubled our initial investmant amount but were very firmly discouraged not to.  You would go into your meeting with a stratrgy in mind and they would talk you out of it.  If people paid attention to their investments which you are an idiot if you dont do even if only in a casual fashion then there is lees chance they would be in this predicament  We set our selves a limit of what we were prepared to lose and that was out initial investment amount it turns out we ended up with about 10% more in the end.  It is a tragedy for everone involved but it seems to from reading the papers and the internet that very few people involved be it clients, FA's, banks ot the Cassimatis's are willing to take responsibility.  I freely admit that i loved the tax perks involved in having big tax deuctions for my investment loans and so would every other storm client.  Life is not easy and no-one gives you anything for free but ultimately the buck stops with us for our individual choices


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## Mickel (30 January 2009)

Julia said:


> Might be good to check your facts.
> The age pension is around $580 per fortnight.  Rent assistance is also available to people who do not own their own homes and are renting.
> In addition there are substantial discounts off electricity, rego, prescriptions, and many other things.
> Obviously this is still a very low income, but it's decidedly better than you are trying to suggest.   Many thousands of people have been getting by on it for many years.




Here is the reference for aged and service pensions if anyone is interested-

http://www.dva.gov.au/factsheets/documents/IS21 Service Pension & Age Pension Rates.htm


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## Neddy (30 January 2009)

Could somebody answer this question for me please: if a Storm investor gave clear instructions to a Storm representative that a stop-loss should be set on their account at a certain level (meaning that all shares should be sold, converted to cash until further notice) and the Storm representative agreed that this would happen but then it transpired that the sell-down did not occur, then who takes the blame for subsequent losses?    I have heard of Storm investors for whom this is the case and if their instructions had been followed they would not have had the rug pulled out from under them by the bank in December.    Their instructions were given long before the bank put a freeze on withdrawals and Storm came up with a string of excuses for it not happening, but the bottom line is that investors gave clear instructions which were not implemented and the result has been catastrophic losses.

As I see it, either Storm took a deliberate decision to not implement the stop, or Storm tried to do so but the bank did not follow instruction, or Storm and the bank colluded to ensure that the sale did not take place – under any scenario I would have thought that it is a bit harsh to be accusing these investors of greed, laziness, lack of self-education, a desire to sponge off the taxpayer or any one of the other accusations that seem to have been levelled by some contributors to this group.

A fact to take into account when thinking about this issue: Storm sent a letter to investors dated 8-October advising that shares should be liquidated – turned into 100% cash – with a view to holding that cash until the market showed signs of recovery and then buying back in.    That was official, documented Storm advice, widely reported in the press and given at a time when the market was some 1,000 points above the level at which the bank shut investors down, about 2 months later.    Since Storm gave that advice at that time and investors agreed, how do we account for it not happening?    More importantly, should this not form the basis for a claim against somebody, the loss involved being easy to calculate as a function of the drop in portfolio value between instruction to sell and shut-down by the bank?


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## Garpal Gumnut (30 January 2009)

It may be worth summarising some lessons from this debacle.

1. don't trust financial advisers/financial houses/lawyers.
2. don't trust banks
3. do your own research
4. don't put your house up as collateral for a margin loan.
5. if you don't know anything about investing don't invest.
6. don't trust anybody.
7. don't believe people based on emotion, gut feeling.
8. avoid cults
9. read all posts on aussiestockforums and then read again before investing.
10. those who have been ripped off are also likely to be further ripped off by some of those offering to help. (go to 1. and keep on repeating.)

gg


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## GumbyLearner (30 January 2009)

Garpal Gumnut said:


> It may be worth summarising some lessons from this debacle.
> 
> 1. don't trust financial advisers/financial houses/lawyers.
> 2. don't trust banks
> ...




A wise recipe GG!


----------



## nigel foxwell (30 January 2009)

I was having a read of Alan Kohlers book "The Eureka Way" - had no idea that it was a book about the evils of FP's - but it is. I think those that have read it would recognise the pitfalls seen with SF.

Also, my two cents, I am an ex-Townsville resident, and have followed EC and Storm/OzDaq etc.. and as greasy as I always thought he was, we cannot blame investors for not seeing the troubles, nor for not trying to get out, nor for being "greedy" - all I can say is that I feel that EC and his organisation, his practices and methods are utterly deceitful and despicable and anyone who disagrees can discuss it with those he has wronged, in the carpark behind the Vale Hotel at closing time.

A worst - a liar, a cheat, a fraud, a malicious sociopath, with only his own over-infalted ego and net worth to worry about. At best, a complete and utter brain-dead moron. Note that I post with my real name, with nothing to hide. </end rant>


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## awg (30 January 2009)

to clarify some previous questions from self and other posters

Could each client log on and check the daily balance and structure of their account??

There are enough posters on this list who are Storm clients to answer this.

I have think the answer might be yes!?

Most/all Master trust style investments can, showing daily balance and structure of all MINs, Margin loan balance as well, I would have thought
(delayed by 24-48 hrs usually).

In my case , I could and did log on most days to see what was happening. ( not Storm)

I certainly did not wait for him to ring me.

I would ring him and ask if anything was not understood by me.

I have a relative with good assets in a fund with a private FP org, they never check the balance, over the net, even though they can, just wait for their regular review with FP. Cause they dont profess to understand the markets.

Every single person with geared share investments, has had to review their positions on an almost daily basis IMO, and make difficult decisions, to either cut their losses or hold..or even average down

The geared MINS like Colonial geared Aus equites and most of the like, returned around 50% for each of the last 3 years proceeding the last.


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## cuttlefish (30 January 2009)

I can understand people with long term investments through a financial advisor only giving their portfolio's an occasional cursory glance a few times a year ... in normal circumstances.   

But the newspaper and television was blaring non stop about a global financial collapse and the government was seeing it as necessary to guarantee money in banks and there were record falls every second day on the australian and global markets.  

In those circumstances I can't understand why someone wouldn't start to closely monitor their investments and push to get all of the information they needed to understand their personal position - particularly if they know that the roof over their heads is underpinned by those investments.


----------



## beachbum (30 January 2009)

Solly said:


> *Calls to secure passport of Storm Financial's Emmanuel Cassimatis*
> 
> "As creditors of Storm Financial count the cost, founder Emmanuel Cassimatis is facing calls to surrender his passport to prevent him fleeing overseas.
> 
> ...




Rumour has it that the above mentioned person was busy buying his daughter a residence in the past year also. He obviously knew the writing was on the wall long before his clients or was it just the act of a loving father. Who knows if this is true. If it is this is sounding like a Quintrex all over again. I hope it isn't but no doubt it will come out in the wash. Lots of others would love to own their house. It's just devastating.


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## cuttlefish (30 January 2009)

stung said:


> The loan contract setting out the terms and conditions of the loan was signed by us but not the 7 page income/debt data collection form.




I meant to reply to this the other day but forgot - but I could see that situation potentially occurring.  Its quite likely that you did sign the cover sheet of an application letter at some stage, but its quite possible the final contents (income, assets etc.) weren't all collated in the one document at the time you signed it.   I find this particular aspect of what has gone on very interesting because if it is the case then the implications are that we will have a lot more of this sort of unserviceable debt out there in the australian banking landscape.


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## cuttlefish (30 January 2009)

tonzo said:


> As a former Storm client i dont remember actually providing any evidence of my wages or extra income.  We provided a bank statement to prove we had an iniatial investment amount (proceeds of a house sale) and gave verbals of wages.  After the initial paperwork any additional steps (storm speak for extra investment via margin loans) were in the form of several one page forms for us to sign plus a bigger statement to initial that outlined the process.  However after having recently borrowed money for both house and car loans the paperwork we received to borrow margin loans required only one signature whereas the home and car required multiple.  It does seem very possible to me that the loan documents might be fishy and if thats the case both storm and the banks have to be held responsible for potentially shoddy loan approvals.  However i still maintain that individual investors are responsible for there own losses.  People who are scratching their heads wondering how they ended up with so much negative equity need to take responsibility for their own finances.  I would check the value of our storm badged challenger investments several times a week against the value of our margin loans.  Once the difference between the two got close to the level where we would start to have less left over than our initial investment amount we decided to get out.  I should also mention that a year peviously we wished to cash out once we had more than doubled our initial investmant amount but were very firmly discouraged not to.  You would go into your meeting with a stratrgy in mind and they would talk you out of it.  If people paid attention to their investments which you are an idiot if you dont do even if only in a casual fashion then there is lees chance they would be in this predicament  We set our selves a limit of what we were prepared to lose and that was out initial investment amount it turns out we ended up with about 10% more in the end.  It is a tragedy for everone involved but it seems to from reading the papers and the internet that very few people involved be it clients, FA's, banks ot the Cassimatis's are willing to take responsibility.  I freely admit that i loved the tax perks involved in having big tax deuctions for my investment loans and so would every other storm client.  Life is not easy and no-one gives you anything for free but ultimately the buck stops with us for our individual choices





Cheers for this post - I think its well balanced and gives a good insight into how things could have unfolded.  You did well to monitor your situation and have the courage to go against their 'advice' and extract yourself from the situation.   Given the high pressure sales tactics that Storm used, I can see that there could have been people that were aware/nervous about what was going on, but weren't confident enough to push past the high pressure tactics from Storm to 'stay in'.


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## Solly (30 January 2009)

From: Fairfax Business Day 

http://www.businessday.com.au/business/the-cassimatis-crusade-20090130-7tvs.html

*The Cassimatis crusade*

Storm Financial co-founders Emmanuel and Julie Cassimatis are on a crusade to find justice for their clients, according to a media release from the husband and wife.

Here is the full text of the media release, which was sent out today:

MEDIA RELEASE

30 January 2009

Emmanuel and Julie Cassimatis, founders of Storm Financial, today refuted "ridiculous'' claims that their passports should be surrendered and that their private jet had been seized by liquidators.

"I have said over and over again that my crusade is now to find justice for these clients, and I will continue that crusade until my dying breath,'' said Emmanuel Cassimatis. "We're not going anywhere.''

Julie Cassimatis also answered allegations that liquidators had seized Cassimatis assets. "That's simply not true,'' she said. "As of right now there are no liquidators involved in the situation. We have voluntarily put the plane on the market for sale - that was our decision and our action.''

The couple are calling on the Federal government and ASIC to rein in what they see as irresponsible action by the Commonwealth Bank of Australia, who they say sold Storm clients out of assets without consultation and then blamed Storm.

The bank said they were acting under instruction from Storm, and also claimed that Storm had 'sole responsibility' for the margin loans in question, both of which Emmanual Cassimatis says are blatantly untrue. He points to an injunction hearing on 24th December 2008, where Justice Greenwood said: "I am satisfied that solely for interlocutory purposes, Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive......''.

"The banks have been handed all this money, this lifeline, by the Government, and they're not passing it on to customers,'' said Mr Cassimatis. "They are happy to take the profits in good times and the government assistance in bad times, but when their customers - some of them very loyal customers of nearly 20 years - need them, where are they?''

"This could all have been avoided by the bank working with us. Instead they panicked and now the results are catastrophic. I am absolutely shattered. All I care about now is finding justice for these clients.''


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## Julia (30 January 2009)

stung said:


> Gee suing me would be a worthwhile exercise!



Stung, it's pretty impressive that you haven't lost your sense of humour!
Goodonya.


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## Solly (30 January 2009)

*"FPA found basis for charges against Storm Financial"*

"The Financial Planning Association’s (FPA) investigation into Storm Financial provided it with a basis to lay charges against the collapsed financial planning group, but the details of the group’s breaches of professional conduct will not emerge in this particular forum as the group’s membership to the industry body has been terminated.

The FPA has taken criticism in recent weeks for what some have perceived to be too soft a stance on the issues surrounding the advice given to clients of Storm Financial. In recent weeks FPA chief executive Jo-Anne Bloch has maintained that all members of the industry body deserve a fair and thorough investigation before conclusions are drawn."

Full story by Lucinda Beaman is here:

http://www.moneymanagement.com.au/article/FPA-found-basis-for-charges-against-Storm-Financial/436369.aspx


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## Julia (30 January 2009)

Solly said:


> *"FPA found basis for charges against Storm Financial"*
> 
> "The Financial Planning Association’s (FPA) investigation into Storm Financial provided it with a basis to lay charges against the collapsed financial planning group, but the details of the group’s breaches of professional conduct will not emerge in this particular forum as the group’s membership to the industry body has been terminated.



So what sort of charges can be laid by the FPA against Storm?  Do they actually have any teeth?   What can they do other than expel Storm from their esteemed membership?
Isn't it up to either the police or ASIC to lay any formal charges?


----------



## Solly (30 January 2009)

Solly said:


> From: Fairfax Business Day
> 
> http://www.businessday.com.au/business/the-cassimatis-crusade-20090130-7tvs.html
> 
> ...





I believe the key words in Justice Greenwood's statement are *"allegedly"*  and *"are capable" *...............just my opinion.


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## Solly (30 January 2009)

Julia said:


> So what sort of charges can be laid by the FPA against Storm?  Do they actually have any teeth?   What can they do other than expel Storm from their esteemed membership?
> Isn't it up to either the police or ASIC to lay any formal charges?




Julia,
It may refer to internal breaches of the FPA's rules of conduct http://www.fpa.asn.au/files/PolicyCodeOfEthicsFINAL.pdf
with reference to their Constitution http://www.fpa.asn.au/files/FPAConstitution.pdf

But I suppose we will never know....


----------



## Solly (31 January 2009)

Garpal Gumnut said:


> It may be worth summarising some lessons from this debacle.
> 
> 1. don't trust financial advisers/financial houses/lawyers.
> 2. don't trust banks
> ...





gg

Your list is brilliant, succinct and to the point.


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## chrisgee (31 January 2009)

Solly said:


> From: Fairfax Business Day
> 
> http://www.businessday.com.au/business/the-cassimatis-crusade-20090130-7tvs.html
> 
> ...





I can't help but think that this an attempt to but their spin on what has happened. I am so happy to see that he is on a "Crusade to find justice" that's exactly what all those impacted need. How could the company allow it to get to this stage ??  All the assurances etc and look where we all are.
Somebody has stuffed up in a big way. Who is to blame for this mess?
Will the courts get it right ?? Will little guy be screwed over again??
Let's hope his statements are sincere and follow through with action.
My friends are in a bad way, call them dumb, call them stupid, they don't have fancy degrees or qualifications, they just put their trust in someone who promised that all will be ok. They didn't want fancy homes, jets, fancy clothes, they just didn't want to live in poverty in their retirement. Now this looks exactly what they will have. The stress on them has been enormous and has affected their friends and family. I'm so happy to see that the Crusade has begun, but I'm starting to realise there now may be no winners except lawyers, accountants and all those who hang off them.
I know this rant probably means nothing but I feel a bit better now


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## Pindibog (31 January 2009)

I was told in a room of 300 odd people in Mackay in Nov by EC that if Storm went under we would not loose our shares. We still owned the units in various shares. I had a large amount that were not Storm Badged shares also from 18yrs of investing/saving. My issue is I had the capacity to meet margin call if one was ever made??? But all shares were sold by Colonial without notifying me. They claim they notified Storm??? Storm claim from Oct on that I had not reached margin call yet. Colonial state I had been in MC since 10/10. If I had known and offered the extra security I would still have lost as they closed down the Storm Badged funds and looking like doing same with Challenger at the worst time.


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## shibby (31 January 2009)

Pindibog said:


> I have been with my advisor for over 18yrs. She had changed from MLC to Ozdaq securities and then Storm until she retired. . .




If anyone out there has had a similar experience with their financial advisor could they tell me approximately when that move to storm took place?
I am really interested because I am trying to work out when mine did the move accross. 

Does any one know if one has to be officially advised that the shift took place?

Any help would be appreciated.


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## awg (31 January 2009)

Pindibog said:


> I was told in a room of 300 odd people in Mackay in Nov by EC that if Storm went under we would not loose our shares. We still owned the units in various shares. I had a large amount that were not Storm Badged shares also from 18yrs of investing/saving. My issue is I had the capacity to meet margin call if one was ever made??? But all shares were sold by Colonial without notifying me. They claim they notified Storm??? Storm claim from Oct on that I had not reached margin call yet. Colonial state I had been in MC since 10/10. If I had known and offered the extra security I would still have lost as they closed down the Storm Badged funds and looking like doing same with Challenger at the worst time.





Seems your story is a bit different to others, regrettable nonetheless.

Did/Do you have documentation from Storm called a "Statement of Advice"?

Did you have the capacity to check the details of your investment online?

(PLEASE someone answer this, it is fundamental to the whole issue IMO).


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## Pindibog (31 January 2009)

awg said:


> Seems your story is a bit different to others, regrettable nonetheless.
> 
> Did/Do you have documentation from Storm called a "Statement of Advice"?
> 
> ...




I have a Financial plan with Ozdac securities dated 11/12/2000. Then reconciliation letter dated 12 Feb. 2001. After that a quarterly reveiw report dated 3rd Oct. 2001. From 2004 was the next time I took a "next step" and Ozdaq was now called "Storm" They call them "statement of addititional advice".  I did not apply to check my investment online. I would think Challenger and Storm badged would have had that facility. Bulk of my other shares were MLC. No online facility set up there either. ###@@@@


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## awg (31 January 2009)

Pindibog said:


> I have a Financial plan with Ozdac securities dated 11/12/2000. Then reconciliation letter dated 12 Feb. 2001. After that a quarterly reveiw report dated 3rd Oct. 2001. From 2004 was the next time I took a "next step" and Ozdaq was now called "Storm" They call them "statement of addititional advice".  I did not apply to check my investment online. I would think Challenger and Storm badged would have had that facility. Bulk of my other shares were MLC. No online facility set up there either. ###@@@@




Thankyou for answering those questions to the best of your knowledge.

It would seem from your answer that Storm probably followed the letter of the FPA guidelines, but if it is true you were not notified about your margin situation by Storm, that would be incredibly lax of them.

Surely I would expect an official email from my margin manager, advising immediate action by me needed, as margin "buffer" is entered.

They automatically sell within 24 hrs if you enter the buffer itself, but dont cough up. (Commsec)

I have absolutely no doubt, that Storm principles,and many of their advisors, were pathetically inept if they did not advise clients to at least monitor the situation daily, with regard to margin....their houses were on the line its morally criminal.

I can understand many older clients in particular, would not elect to register and monitor their "managed" investments online, its a drag 

At the end of the day the client must make the decisions, but needs decent advice in order to do that. 

I guess many people were caught in a paralysis, clients, advisors, others, this market situation, whilst being statistically predictable, only happens a few times each century.

Business disasters around xmas are fraught as well.


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## Pindibog (1 February 2009)

awg said:


> Thankyou for answering those questions to the best of your knowledge.
> 
> It would seem from your answer that Storm probably followed the letter of the FPA guidelines, but if it is true you were not notified about your margin situation by Storm, that would be incredibly lax of them.
> 
> ...





Just had a read of the plans/advice......Looks like I will need to see a lawyer


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## Solly (1 February 2009)

*"Storm Financial's Emmanuel and Julie Cassimatis to sell"*

"THE co-founders of collapsed investment firm Storm Financial, Emmanuel and Julie Cassimatis, owe $16 million and face personal bankruptcy.

Mr Cassimatis said yesterday all their assets were for sale or to be listed – Townsville and Brisbane mansions, private jet, cars and boats.

The once high-flying entrepreneur and his wife had a fortune last year estimated at $450 million on The Sunday Mail Top 100 Rich List.

But yesterday he said: "I don't even know whether we're going to survive financially."

The bad news continues for them, with some clients lining up to sue them personally."


Full Story by Mitch Gaynor here;

http://www.news.com.au/couriermail/story/0,23739,24989406-5007190,00.html


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## Aussiejeff (1 February 2009)

Solly said:


> *"Storm Financial's Emmanuel and Julie Cassimatis to sell"*
> 
> "THE co-founders of collapsed investment firm Storm Financial, Emmanuel and Julie Cassimatis, owe $16 million and face personal bankruptcy.
> 
> ...




I reckon most clients wiped out by the Storm would be fervently hoping the Cassamati's DON'T survive financially. Just having the gall to publicly postulate the possibility that they MIGHT survive financially again shows how insensitive those creeps really are. 

Let 'em rot, I say.

aj
(fortunately not a client)


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## Mash (1 February 2009)

The gall of EC......
In the article linked above 

"We always took dividends in December," he said.

"How was I supposed to know I better not take a dividend because it's not going to look good because we're screwed?"

When we had our video link up with him on 28th November and he told us our entire portfolio had been sold out with a debt still owing to Colonial of $195,000 and we reminded him of our 2.3 million dollar debt to ANZ(Secured by property we now have to sell to pay ANZ).That was what he said our position was. "Well then your screwed!".....now he knows how we felt in November before he took his 2mill. 
Screw you!!!!!


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## cuttlefish (1 February 2009)

Mash said:


> The gall of EC......
> In the article linked above
> 
> "We always took dividends in December," he said.
> ...




Yep I noted that comment as well - I was in two minds on whether this guy genuinely believed his own BS or was just a BS artist - that line seems to show he is the latter.

And to take an 800k investment from someone in December is just shocking as well (almost half of the dividend he took).  Its just out and out theft - anyone that runs a business has a responsibility to have a good underestanding of its viability.

That short article has certainly cemented my view of character of the man.


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## Solly (1 February 2009)

There's a two page article in today's Sunday Mail, Agenda section, also by Mitch Gaynor.

In the article , EC says he is supressing 'immense anger' as he tries to help clients. His anger is directed at the Comm Bank and is infuriated by its actions. The article also refers to EC's involvement with MLC, previous interest free loans to clients during the dot com bust, current outstanding loans to 40 Storm clients. The article also states that Storms income went from $77Mil in 2007-8 to $200,000 in January.

If you can source a copy of the article, I believe it's quite a good read.


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## Julia (1 February 2009)

Mash said:


> When we had our video link up with him on 28th November and he told us our entire portfolio had been sold out with a debt still owing to Colonial of $195,000 and we reminded him of our 2.3 million dollar debt to ANZ(Secured by property we now have to sell to pay ANZ).That was what he said our position was. "Well then your screwed!".....[(





That's just an appalling thing to say, and demonstrates that his 'concern' for his clients is all a facade.

But my goodness, you were dealing in big figures!


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## Mash (1 February 2009)

Yes big figures which now result in big losses.... have been called greedy.... and nothing you all call us is any worse than the names  we have called ourselves.... I hate what we have done.... that is believing a snakeoil conman...... when we joined storm..... we were obviously marked as a cashcow....newly retired with cash sum in hand. and property to morgage...we thought we had done our homework....seen other planners.... gone through the figures....I think the problem was our LVR started conservative....50% max.....but as each "step" (Storm speak for sinking more dough) the Statement of Additional Advice only saw the LVR rise 3-4%....BUT step after step quickly had it up to 78%..... then through  "capitalizing" the interest to the loan ( now in hindsight realise wasn't in original advice they just slipped it in once we had stopped asking so many questions)...the LVR grew steeply as the market fell.. We were always correcting information in the "Statements of Advice" and asked why our loan against the properties was not included in the LVR (only the margin loan was)...we kept our own spreadsheet and when the market was at 4200 we wanted out, saw the advisor and as previously mentioned in this thread by others were stalled told they had strategies in place and in hindsight obviously they were trying to keep their cashflow up.... yes we should have jumped up and down more...should have yelled not just asked.... we will forever regret not demanding to be heard.... but like I said .... we have beaten ourselves up (Since November 28) .... only those other storm clients know the tactics and that's why we are banding together.... more for emotional support as much as anything...don't expect to get money back...just some mental and emotional stability.Sorrry went on a bit of a rant.... that's what it's like these days..... "trust us"....those words make me sick to the stomach:horse:


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## bunyip (1 February 2009)

tonzo said:


> As a former Storm client i dont remember actually providing any evidence of my wages or extra income.  We provided a bank statement to prove we had an iniatial investment amount (proceeds of a house sale) and gave verbals of wages.  After the initial paperwork any additional steps (storm speak for extra investment via margin loans) were in the form of several one page forms for us to sign plus a bigger statement to initial that outlined the process.  However after having recently borrowed money for both house and car loans the paperwork we received to borrow margin loans required only one signature whereas the home and car required multiple.  It does seem very possible to me that the loan documents might be fishy and if thats the case both storm and the banks have to be held responsible for potentially shoddy loan approvals.  However i still maintain that individual investors are responsible for there own losses.  People who are scratching their heads wondering how they ended up with so much negative equity need to take responsibility for their own finances.  I would check the value of our storm badged challenger investments several times a week against the value of our margin loans.  Once the difference between the two got close to the level where we would start to have less left over than our initial investment amount we decided to get out.  I should also mention that a year peviously we wished to cash out once we had more than doubled our initial investmant amount but were very firmly discouraged not to.  You would go into your meeting with a stratrgy in mind and they would talk you out of it.  If people paid attention to their investments which you are an idiot if you dont do even if only in a casual fashion then there is lees chance they would be in this predicament  We set our selves a limit of what we were prepared to lose and that was out initial investment amount it turns out we ended up with about 10% more in the end.  It is a tragedy for everone involved but it seems to from reading the papers and the internet that very few people involved be it clients, FA's, banks ot the Cassimatis's are willing to take responsibility.  I freely admit that i loved the tax perks involved in having big tax deuctions for my investment loans and so would every other storm client.  Life is not easy and no-one gives you anything for free but ultimately the buck stops with us for our individual choices




An excellent post. It's good to see a former Storm client put forward a balanced view, including an acknowledgement of the fact that Storm clients had a responsibility to keep themselves up to date with their investments and to take defensive action when appropriate, even if it meant stepping in and taking control from the 'investment professionals' they put in charge.


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## Monario (1 February 2009)

tonzo said:


> As a former Storm client i dont remember actually providing any evidence of my wages or extra income.  We provided a bank statement to prove we had an iniatial investment amount (proceeds of a house sale) and gave verbals of wages.  After the initial paperwork any additional steps (storm speak for extra investment via margin loans) were in the form of several one page forms for us to sign plus a bigger statement to initial that outlined the process.  However after having recently borrowed money for both house and car loans the paperwork we received to borrow margin loans required only one signature whereas the home and car required multiple.  It does seem very possible to me that the loan documents might be fishy and if thats the case both storm and the banks have to be held responsible for potentially shoddy loan approvals.  However i still maintain that individual investors are responsible for there own losses.  People who are scratching their heads wondering how they ended up with so much negative equity need to take responsibility for their own finances.  I would check the value of our storm badged challenger investments several times a week against the value of our margin loans.  Once the difference between the two got close to the level where we would start to have less left over than our initial investment amount we decided to get out.  I should also mention that a year peviously we wished to cash out once we had more than doubled our initial investmant amount but were very firmly discouraged not to.  You would go into your meeting with a stratrgy in mind and they would talk you out of it.  If people paid attention to their investments which you are an idiot if you dont do even if only in a casual fashion then there is lees chance they would be in this predicament  We set our selves a limit of what we were prepared to lose and that was out initial investment amount it turns out we ended up with about 10% more in the end.  It is a tragedy for everone involved but it seems to from reading the papers and the internet that very few people involved be it clients, FA's, banks ot the Cassimatis's are willing to take responsibility.  I freely admit that i loved the tax perks involved in having big tax deuctions for my investment loans and so would every other storm client.  Life is not easy and no-one gives you anything for free but ultimately the buck stops with us for our individual choices




Just a quick question tonzo, who was your advisor with storm?


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## Macquack (1 February 2009)

Is there anyone who can give an example *(with all the numbers) *of a typical storm investor's situation. 

e.g. Property valuation, mortgage amount, margin loan amount, shareholdings , margin call proceeds etc, and current financial position.

Sorry, if this offends anybody.


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## bunyip (1 February 2009)

Monario said:


> Perhaps we are overdue for some restructuring of the legislation that companies, failed companies, and ceo's etc. hide behind when the  things go wrong...
> 
> I, and I believe many others feel it is time that the laws that let these things happen, are updated...




Fair enough. So what are you going to do about it? Just talk, or take some real action? 
My guess is that you'll do what most of us will do - we'll have a whinge every so often but we won't take any concrete action to try and change things.
What we'll do instead is what you tried to do when you invested through Storm.....we'll try to utilise the opportunities that the system gives us.
Because that's the strength of our system....opportunities, and lots of them - opportunities we can profit from if we know the rules. 
_*And one of the rules is risk management.*_ That means keeping a close watch on your investments, even if you've appointed a professional to manage them. And keeping watch on your manager to make sure he's doing things the way you want them done. It means taking defensive action when appropriate.
You can't afford to go to sleep at the wheel when you've got investment money on the line. Particularly when it's geared investment money.


----------



## stung (1 February 2009)

Mash said:


> a snakeoil conman........ we will forever regret not demanding to be heard.... but like I said .... we have beaten ourselves up (Since November 28) .... only those other storm clients know the tactics and that's why we are banding together.... more for emotional support as much as anything...don't expect to get money back...just some mental and emotional stability.Sorrry went on a bit of a rant.... that's what it's like these days..... "trust us"....those words make me sick to the stomach:horse:




I know how you feel. I just wish I had not listened to the same crap that I now know every client heard. To think back on the conversations we had makes me ill. If I could get my hands on the throat of my advisor there is no telling what I would do.

When EC (otherwise known in our household as slime ball extraordinaire) came to Brisbane and gave a talk he told the audience that he couldn't understand why everyone was asking him "will I lose my house?" He said "why does everyone want to know that and not ask the  question "will I lose my portfolio?".
Well we, like many, have lost both you lame brain idiot.

I cannot stand the sight of him, he  makes my skin crawl. Someone in a previous post made mention of the term sociopath  and I would have to agree. Someone like him feels zero compassion and empathy.


Anyway most of my posts have been emotive and have had very little purpose but to vent my annoyance. Given that I better make this my last.
So long and may some joy return to the lives of those who have been burned by Storm bloody Financial.


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## Smiley (1 February 2009)

Stung, I know how you feel - there should be a prosecution against the advisers and of course EC.  Those not in Storm have no idea how many lies were told, how people were blocked from getting out (I checked my portfolio every week last year and did ask the adviser and Challenger how to get out), how I was told there was not 1 chance in 100 that I would be left owing on the house, how the investment was low risk, etc.  I take responsibility for signing up and trusting the adviser and not trying harder to get out.  I should have done a sit in . . . I totally understand your fury and rage but am moving on - using savings to pay down as much of the mortgage as I can, selling out of Macquarie, talking to various lawyers, checking in with the advocacy group (sicag).   I have appreciated your posts . . . thanks.


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## Jifromoz (1 February 2009)

Hi Everyone,

Here is a link to an ABC interview with Mr Cassimatis on the 28/1

http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld

I wonder if he would like to hear from the people he has devastated with his conservative advice. 

Cheers


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## Solly (1 February 2009)

stung said:


> I know how you feel. I just wish I had not listened to the same crap that I now know every client heard. To think back on the conversations we had makes me ill. If I could get my hands on the throat of my advisor there is no telling what I would do.
> 
> When EC (otherwise known in our household as slime ball extraordinaire) came to Brisbane and gave a talk he told the audience that he couldn't understand why everyone was asking him "will I lose my house?" He said "why does everyone want to know that and not ask the  question "will I lose my portfolio?".
> Well we, like many, have lost both you lame brain idiot.
> ...




Thanks for sharing your story with us all. I initially couldn't  understand  how people could get involved with this mob but after meeting and talking with ex clients I can understand how people were seduced by what they saw and were told. I have always held a hard line towards those who invested, and am sure this has been interperted as being uncaring. But you need to be very hard and discplined to extradite yourself out of this event. Keep the momentum up never doubt yourself in anyway that you will find a remedy, life will go on, it will be different but it doesn't mean that your future won't be full and complete. Do let EC be a negative factor in your life, no amount of anger, name calling etc changes anything. Don't be distracted by anything that impedes your wellbeing or way forward......EVER.


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## Monario (1 February 2009)

bunyip said:


> Fair enough. So what are you going to do about it? Just talk, or take some real action?
> My guess is that you'll do what most of us will do - we'll have a whinge every so often but we won't take any concrete action to try and change things.
> What we'll do instead is what you tried to do when you invested through Storm.....we'll try to utilise the opportunities that the system gives us.
> Because that's the strength of our system....opportunities, and lots of them - opportunities we can profit from if we know the rules.
> ...






Bunyip, I suggest you go back through this thread and read all my posts, once you have, then let me know if you still feel as though I fell asleep at the wheel!!

As for action on the items you think I am doing nothing towrads..

1) contacted senators and local members via email and post
2) had meeting with senator
3) spoke with media
4) got the word out to as many people as possible, this forum happens to be one avenue of doing that
5) spoken to lawyers in regards to litigation
6) joined with SICAG
7) Spoke with all relevant parties.

If you can suggest other means let me know....


----------



## paulchow2k (1 February 2009)

I read this thread with amazement and also appreciate those who shared the situation that you were in. I may not be with storm but I've studied books about the stock market crash in 1907 & 1927 a few years back and wondered if there was ever going to be another cash, would it become as bad as that era.

Now I'm reading first hand whats happening to people in my life time!

Thanks for sharing with me this lesson.

Paul


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## bunyip (1 February 2009)

Monario said:


> Bunyip, I suggest you go back through this thread and read all my posts, once you have, then let me know if you still feel as though I fell asleep at the wheel!!
> 
> As for action on the items you think I am doing nothing towrads..
> 
> ...




I commend your effort in trying to make some changes.
I was once very much that way inclined myself. 
As a member of the Young Nationals and also of various agricultural organisations, I was actively involved in formulating policies and submitting them to state council, from where some of them were adopted as official policy of our orgnaisation. They were then submitted to government in the hope of convincing them to make changes.
To the best of my knowledge, none of our submissions were ever adopted as government policy.

These days I'm happy to admit I just go along with the system even though it contains many things I disagree with.
I try to avoid wasting my mental energy in ranting and fuming about them - I find it more productive to put that energy into exploiting the money-making opportunities the system offers me.

I'll decline your suggestion to go back through all your posts to see if you fell asleep at the wheel, since my comments in that regard were not directed at you specifically. They were used in reference to the situation where the alarm bells were ringing loud and clear, giving plenty of time for Storm clients and other stock market investors to convert to cash, or at least drastically reduce their exposure. If they heard or read the warning signals but still didn't take defensive action, or if they were unaware of the warning signals, then I see that as a clear case of falling asleep at the wheel.


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## Macquack (1 February 2009)

bunyip said:


> ....... or if they were unaware of the warning signals, then I see that as a clear case of falling asleep at the wheel.




Storm was supposed to be a chauffeur driven, bullet proof limousine.


----------



## Solly (2 February 2009)

*"FPA stands firm on Storm investigation"*

"Issues not considered widespread 
The collapse of Storm Financial is not widespread and the FPA does not intend to investigate any firms with similar strategies."

Kate Kachor's full story from Investor Daily is here:

http://www.investordaily.com.au/cps/rde/xchg/id/style/5686.htm/


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## cuttlefish (2 February 2009)

Solly said:


> *"FPA stands firm on Storm investigation"*
> 
> "Issues not considered widespread
> The collapse of Storm Financial is not widespread and the FPA does not intend to investigate any firms with similar strategies."
> ...




lol - what a joke of an organisation that is.


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## Ijustnewit (2 February 2009)

bunyip said:


> I commend your effort in trying to make some changes.
> I was once very much that way inclined myself.
> As a member of the Young Nationals and also of various agricultural organisations, I was actively involved in formulating policies and submitting them to state council, from where some of them were adopted as official policy of our orgnaisation. They were then submitted to government in the hope of convincing them to make changes.
> To the best of my knowledge, none of our submissions were ever adopted as government policy.
> ...



Asleep at the wheel.I think not..More like we bought a expensive ticket for a flight that was doomed and .. A. Told that the pilot was the said to be an aeronautic wizard. B. Told the plane were flying in was the very best and had made many a previous succesfull flights C.Told that even after we had lost all our engines and were crashing to the earth "Just fasten your seatbelts , assume crash position" and just to put the icing on the cake,told " Don't worry you will survive! "


----------



## Ijustnewit (2 February 2009)

Ijustnewit said:


> Asleep at the wheel.I think not..More like we bought a expensive ticket for a flight that was doomed and .. A. Told that the pilot was the said to be an aeronautic wizard. B. Told the plane were flying in was the very best and had made many a previous succesfull flights C.Told that even after we had lost all our engines and were crashing to the earth "Just fasten your seatbelts , assume crash position" and just to put the icing on the cake,told " Don't worry you will survive! "



Also before anybody can say "you should have done this, you should have done that" May they also suggest that the passengers on the Titanic should have gone out and got some swimming lessons as well?"


----------



## Pindibog (2 February 2009)

Ijustnewit said:


> Also before anybody can say "you should have done this, you should have done that" May they also suggest that the passengers on the Titanic should have gone out and got some swimming lessons as well?"




Ditto, and that is their lives they have got on the line. All assume the captain is competent and if it does sink there would be evacuation strategies to get off the sinking ship so you do not drown! I bet majority of people don't know the fire evacuation procedure for there work building?


----------



## tonzo (2 February 2009)

Monario said:


> Just a quick question tonzo, who was your advisor with storm?




Started with Stuart who i thought was reasonable then went to Dean and ended with Harry.  Found Stuart to be reasonable when asking for redemptions but both Dean and esp Harry were harder to deal with.


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## Glen48 (2 February 2009)

All is not lost with the Storm victims those who have to sell hopefully can sell at the top of the market wait a few years and buy back in once R E tanks, it a matter of trying to save as much as possible for the next 3 + yrs and waiting.


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## bunyip (2 February 2009)

Ijustnewit said:


> Asleep at the wheel.I think not..More like we bought a expensive ticket for a flight that was doomed and .. A. Told that the pilot was the said to be an aeronautic wizard. B. Told the plane were flying in was the very best and had made many a previous succesfull flights C.Told that even after we had lost all our engines and were crashing to the earth "Just fasten your seatbelts , assume crash position" and just to put the icing on the cake,told " Don't worry you will survive! "




You believed and accepted all this flawed advice in the face of all the evidence to the contrary. Months before the real crash set in, the media was warning us every day of the impending disaster. The All Ords and other major world indexes were struggling, world economies had the staggers.....the warning signs were unmistakable.
As someone said in an earlier post, you'd have to be living under a rock in the Gobi Desert not to know what was happening.

You had time and opportunity to take defensive action. For whatever reason, you didn't do so.
 Now you're wondering why people are saying you went to sleep at the wheel. 

Part of the responsibility is yours.
You played the game and you lost. 
Mate, put it behind you and move on.


----------



## carey ramm (2 February 2009)

a very good interview with storm founder on abc brisbane this morning

some hard questions and puzzling answers....

http://blogs.abc.net.au/queensland/2009/02/frank-discussio.html?program=612_morning


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## Ijustnewit (2 February 2009)

bunyip said:


> You believed and accepted all this flawed advice in the face of all the evidence to the contrary. Months before the real crash set in, the media was warning us every day of the impending disaster. The All Ords and other major world indexes were struggling, world economies had the staggers.....the warning signs were unmistakable.
> As someone said in an earlier post, you'd have to be living under a rock in the Gobi Desert not to know what was happening.
> 
> You had time and opportunity to take defensive action. For whatever reason, you didn't do so.
> ...



 Yes we will put it behind us and move on. I will live by your valuable advice and never whinge again,when i buy a dodgy meal and get food poisning or purchase a product that doesn't work i will totally just blame myself for being such a stupid consumer.


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## vincent191 (2 February 2009)

Glen48 said:


> All is not lost with the Storm victims those who have to sell hopefully can sell at the top of the market wait a few years and buy back in once R E tanks, it a matter of trying to save as much as possible for the next 3 + yrs and waiting.





I don't understand what you are saying?? Please explain.


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## Glen48 (2 February 2009)

Each victim will be different however once house prices crash over the next few years victims could buy back into the market at a much reduced price..if they still want to buy a house and they have a job. I think once you are bankrupt it is all over in 5 yrs or less.


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## Trevor_S (2 February 2009)

Pindibog said:


> All assume the captain is competent




While all of us I am sure feel some empathy and compassion for your plight, that assumption is incorrect, some of us have no faith in the "captain" ie financial advisors in general and Cassamatis in particular, whatsoever.

But you're right, lost of us put faith in the person behind the counter making our sandwich has some understanding of hygiene, that the person flying the plane knows what they are doing etc... but not with my money...


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## Solly (2 February 2009)

Has anyone heard anything further about the progress of financial licence for Ignite ?
I am curious to know who are the princples behind this. Of course there has been no discovered and published mpropriety by any parties at this stage. I know it may seem a little hard for some but all parties are innocent of any wrong doings at this point in time. Can this licence be granted in these circumstances?


----------



## bunyip (2 February 2009)

Ijustnewit said:


> Yes we will put it behind us and move on. I will live by your valuable advice and never whinge again,when i buy a dodgy meal and get food poisning or purchase a product that doesn't work i will totally just blame myself for being such a stupid consumer.




I haven't suggested that all the blame is yours.
I haven't suggested that you should totally blame yourself.
I haven't suggested that you don't complain about the poor advice you were given.
I haven't suggested you don't take legal action. (although frankly I think it will be a waste of your money and time) 

I said that '_*part*_ of the responsibility is yours'. 
This statement is 100% correct whether you realise it or not.

I believe you'll get over this crisis and resume your life much more readily if you accept your part of the responsibility for what happened to you. 
I speak from experience here, having once copped quite a sizeable financial kick in the teeth myself.

But it's your life - you handle it any way you choose.


----------



## Monario (2 February 2009)

Can anyone please advise on this?

My margin loan with macquarie was closed out, to my knoweldge on the 13th of janurary, the funds were drawn directy by them from my cash management account, also held with them.

Today I recieved a letter demanding a further payment.

" Following an unsatisfied margin call on your margin loan, an amount of #### remains outstanding.

We demand that you pay this amount by sending a cheque to this office within seven (7) days from the date of this letter."

WTF, they drew the funds out themselves, there were funds left in the account so its not like there was insufficient to pay, and now for some unkown reason they want more. 

Can anyone please advise here?


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## Jayan (2 February 2009)

Glen48 said:


> All is not lost with the Storm victims those who have to sell hopefully can sell at the top of the market wait a few years and buy back in once R E tanks, it a matter of trying to save as much as possible for the next 3 + yrs and waiting.




All the houses getting dumped from this mess could drag RE prices down in towns badly affected, Townsville & Mackay for starters. I have listed my unit 4 sale and hope to get out before that happens. 

I've been tossing for awhile, Storm made my mind up!


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## Glen48 (2 February 2009)

Best of luck, take the first offer and watch patrick . net to see when the turn around occurs in USA and give it a few yrs and we will be on the same path.


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## Solly (3 February 2009)

carey ramm said:


> a very good interview with storm founder on abc brisbane this morning
> 
> some hard questions and puzzling answers....
> 
> http://blogs.abc.net.au/queensland/2009/02/frank-discussio.html?program=612_morning





Thanks for the link, I listened to this and I too believed that some of the answers were puzzling. The statement that "existing clients should have been out of the market on 1st Nov 2007", has me baffled. Does this mean also that the Storm badged Colonial/Challenger Funds should have been exited then? Would this have then make these funds unviable? I understand his opinion towards the Comm Bank but it makes me further question why the bank took this drastic action, they must have a defendable reason for it's swiftness. 

When talking about the 'black swan' event, my belief is that the strategies that were in place didn't cover or make provision for a market shift or downward rate of change of this order. Maybe the event is more like extreme value theory which deals with the extreme deviations from the median, a bit like the probability of a "once in a 100 year" flood event.  These events do happen so you attempt to build mitigation into your plans and processes. If you live on flood plain you put your house on stilts, just in case that big flood comes while you are living there. But what happened to Storm I believe will most likely show a series of events of varying magnitude that occurred in sequence or parrallel that has now lead to this result. It will be interesting to see the final findings of any investigations. 

I'm not a big fan of talk back radio, but I thought questiong EC about how many swimming pools he has in his house added no value. The taking of the $2mil was interesting, it is admirable that he is using his resources to get justice for the clients, I am eager to see what the results will be.


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## cuttlefish (3 February 2009)

I listened to it - it was an interesting interview - a bit less soft than some of the others we've seen.    I agree about the swimming pool stuff adding no value.

What I heard was someone not willing to accept that their model was cactus and that was the primary reason their investors are stuffed.  Conveniently blaming everything on the banks is just passing the buck.   He has not implemented any kind of stop losses on clients portfolio's by the sounds of it.  Thats excusable for an amateur but for supposedly professionally managed investments using retiree's homes it is not.

The comments he makes about Nov 2007 are simply about market timing - i.e. he's saying that everybody, with hindsight, would take everything out of the market at its peak.

I suspect that he has ramped up his investors leverage as the market plummetted - thinking he was doing the smart thing by increasing their holdings at the 'bottom' after a wave of panic selling.    The second wave, in October or so, has caught him out completely.  

Basically his investment model was leveraged knife catching ...  but he seems unwilling to admit to any flaws in the model, or in the way he dealt with clients and the information he gave them.

Its seems from comments on here that Storm and its advisors gave assurances about the safety of people's houses etc. that were unrealistic.

Its quite likely the bank pulled the pin aggressively and inconsiderately - but he did take them to court - thats not usually the harbinger of a good constructive relationship.


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## bunyip (3 February 2009)

Cassamatis is clearly an idiot. Also a weakling, in that he won't admit he has any responsibility for what happened to his clients. In all his interviews he tries very hard to point the finger at someone else, while absolving himself of all blame....the true sign of a man of weak character.

He ducked and weaved and wouldn't answer the question when asked what up front fees he charged his clients.
He defends his actions of putting new clients into the market while the market was plunging, hiding behind the brain-dead excuse that you buy stocks when they're cheap. After a couple of decades in the market the poor incompetent fool still can't understand that it's suicide to buy stocks in a plunging market...what looks cheap one day will look a lot cheaper in a couple of weeks when it's dropped another 20 or 30%

He keeps repeating that this event was unprecedented. Rubbish....comparing this crash to 1987, the 87 crash was far more brutal with a 25% slump in one day, and an overall drop of similar magnitude to what the current crash has dealt up so far. The drop occured over about 3 months in 87, compared to 12 months this time.
Only a fool would fail to realise the possibility of 1987 being repeated.
What Cassmatis conveniently forgets to mention is that this time there were warning signs in abundance, giving him plenty of time to get his clients into cash before they got mowed down by the coming crisis. The fact that he failed to do so proves what an incompetent and greedy moron he really is.

He's a slimy bastard if ever I saw one. One of the Storm victims said Cassamatis makes his skin crawl. Well he makes my skin crawl too...and I'm not even a Storm victim.


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## Wizard_73 (3 February 2009)

Hmmm, found this site/forum this morning.....read with a lot of interest.  Ok, I also was a storm client, as was my friends, family, work mates.  Word of mouth, the best advertising.  Friends of ours were with storm for some 10 - 12 yrs, they had tried and tried to get us to join them many a time, my biggest fear was that if they ever went under, they would close up shop and disappear.........well guess what happened.  What annoys me the most is my in laws (75, 70) owe the banks 35k.  Retirees, after losing my father-in-law last year my mother - in - law has been left with debt.  How does she pay this back short of selling her house????  I am lucky, I guess, that I am still young enough to recover and hopefully get back on my feet.  Anyway, Storm wanted me to do another step in December....After ringing my FP, yep all is good, even though I was in a margin call...apparently...but hey not to worry.  Thank god I did not go through with it....After all the previous posts I have taken the time to read this morning, this is what I feel.  I don't care that it may or may not have been my fault, when I pay someone for a service I expect service.  Be it a sparky,plumber whatever.  Storm took substantial fees from me and what have they left me with in return???  People will read this and say "Why didn't you do something?" They are supposed to be the advisors, that's why we went with them in the first place...Anyway I intend to go to lawyers find out where I stand, because Emmanuel, if you are reading this, I am sorely disappointed in you, your company and everything you did.  Wish I could take back the last 12 months.  Oh, how frustrating is it when you are trying to ring your FP and told they are not allowed to talk to you.....what a frigging joke.


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## mini11 (3 February 2009)

*FPA, ASIC and Storm Financial*

The Financial Planning Association (FPA) is holding meetings in Townsville with Storm Financial clients.

There have been suggestions that both ASIC and the FPA knew about the issues surrounding Storm ahead of time, though nothing was done to stop the collapse.

I'm interested in knowing how clients and advisers of Storm feel about the FPA and ASIC.


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## Julia (3 February 2009)

bunyip said:


> He ducked and weaved and wouldn't answer the question when asked what up front fees he charged his clients.



Yes, he noticeably did this throughout the interview, at times suggesting he didn't hear/understand the question in order to have more time to come up with a plausible answer.




> He keeps repeating that this event was unprecedented. Rubbish....comparing this crash to 1987, the 87 crash was far more brutal with a 25% slump in one day, and an overall drop of similar magnitude to what the current crash has dealt up so far. The drop occured over about 3 months in 87, compared to 12 months this time.



And he continually refers to 'a black swan event' and suggests the situation could not possibly have been foreseen and that ' nobody saw what was happening'.  Then later he quotes Opes Prime as an early example of what happened.   These two observations contradict each other.

It seems incomprehensible, but listening to him I could almost believe that he really doesn't understand why it all fell over, that he had developed such a total belief in his own infallibility that even as everything was coming down around him, he still believed that - barring the CBA's action - it would all have been just fine.


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## Trevor_S (3 February 2009)

Solly said:


> it is admirable that he is using his resources to get justice for the clients,




Based on previous actions, I see that statement as more snakeoil rather then any "genuine" attempt.

For those like me that had never heard the term until he started using it some time ago, a black swan event

Though I am not sure that's the term to use ? sure, bigger then many (including myself) expected but not "unexpected" per se.

I had stopped most purchasing in about late 2006 and went to accumulation of cash as I struggled to find value way back then. If I struggled to find value, what was he doing with his copy of "Modern Portfolio Theory" that I saw on his desk in a TV ad way back in the days of Ozdaq securities , using it as a paper weight for the money collected from fee's ?


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## bunyip (3 February 2009)

Julia said:


> Yes, he noticeably did this throughout the interview, at times suggesting he didn't hear/understand the question in order to have more time to come up with a plausible answer.
> 
> 
> 
> ...




He's a damn good actor, I'll give him that.
If his money-management ability was equal to his acting talent, Storm clients would now be sitting in cash with big smiles on their faces.


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## bunyip (3 February 2009)

A bloke who lives near me is a loans officer with Westpac. He tells me that Westpac economists are expecting a turnaround in the economy from about mid year on.

Carey Ramm.....you're an economist - would you care to give us your thoughts on this?


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## nigel foxwell (3 February 2009)

Solly said:


> *"FPA stands firm on Storm investigation"*
> 
> "Issues not considered widespread
> The collapse of Storm Financial is not widespread and the FPA does not intend to investigate any firms with similar strategies."
> ...




The FPA is just that, the _Financial Planners Association_ , designed to protect and help FP's not their clients.


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## bunyip (3 February 2009)

Solly said:


> The taking of the $2mil was interesting, it is admirable that he is using his resources to get justice for the clients, I am eager to see what the results will be.




I presume/hope you made this comment with tongue in cheek?

He was mighty cagey when asked to clarify how he's attempting to help clients....that was another one of the questions he dodged around.
I can well imagine how much effort _*he's*_ putting into trying to help clients. More grandstanding from the master himself.


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## vincent191 (3 February 2009)

Bunyip, your friend in Westpac is a very brave person to have made that statement.

Generally speaking most people think the sharemarket will make some sort of recovery by mid year. The health of the economy may lag behind (some say 12 months).


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## awg (3 February 2009)

Its possible the principles of Storm became afflicted with psychological trauma, in and during the crisis period.

This can and does lead to poor decision making, paralysis of action, denial of reality, taking of hands completely off lever, etc etc.

I imagine they would be in a form of "post traumatic shock", considering the pressure they would be under.

I have seen and heard of examples of the boss "losing it", which would be especially fateful in volatile leveraged equities.

I dont seek to excuse the actions or business model of Storm, and am not a client, but maybe part of the reason things went sour, and explain why they want to re-direct blame.


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## Julia (3 February 2009)

bunyip said:


> I presume/hope you made this comment with tongue in cheek?
> 
> He was mighty cagey when asked to clarify how he's attempting to help clients....that was another one of the questions he dodged around.
> I can well imagine how much effort _*he's*_ putting into trying to help clients. More grandstanding from the master himself.




Agree.  The clients won't see any of the 2 million they paid themselves in December or anything that is realised from sale of assets.


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## Mash (3 February 2009)

Glen48 said:


> All is not lost with the Storm victims those who have to sell hopefully can sell at the top of the market wait a few years and buy back in once R E tanks, it a matter of trying to save as much as possible for the next 3 + yrs and waiting.




What r u smoking there Glen........ u obviously don't have any property on the market now..... it already has tanked..... well upper end has..... first home owners level maybe not...... as for saving ..... trying to put food on the table for the next 3+ years will be the biggest ask..... WT?


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## Mash (3 February 2009)

awg said:


> Its possible the principles of Storm became afflicted with psychological trauma, in and during the crisis period.
> 
> This can and does lead to poor decision making, paralysis of action, denial of reality, taking of hands completely off lever, etc etc.
> 
> ...





I would be more inclined to say "EGO" was the problem with EC.... he thought he could bully the bullies.......WRONG.....


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## bunyip (3 February 2009)

vincent191 said:


> Bunyip, your friend in Westpac is a very brave person to have made that statement.
> 
> Generally speaking most people think the sharemarket will make some sort of recovery by mid year. The health of the economy may lag behind (some say 12 months).




My thoughts exactly. I'm no economist, but I'm blowed if I can see anything that points to economic recovery any time soon.


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## -Bevo- (3 February 2009)

I think EC should buy this book The Black Swan.
http://au.youtube.com/watch?v=qc6SwwUkQAY&feature=related


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## cuttlefish (3 February 2009)

bunyip you skeptic.  Can't you see that the economic recovery is going to be driven by people productively spending money that the government gives them.  By giving money to people to spend without having to earn it we will build this great nation.  (plus there's little doubt that putting all that insulation in everyone's roof should set us up as a world economic superpower).   

Apologies I think we're straying off topic ...


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## bunyip (3 February 2009)

cuttlefish said:


> bunyip you skeptic.  Can't you see that the economic recovery is going to be driven by people productively spending money that the government gives them.  By giving money to people to spend without having to earn it we will build this great nation.  (plus there's little doubt that putting all that insulation in everyone's roof should set us up as a world economic superpower).
> 
> Apologies I think we're straying off topic ...




LOL. Also, if an article in the Sunday Mail can be believed, 80 odd million of the government handout went to people who once lived in Australia, but are now living overseas.
Some of them departed the land 'down under' more than 10 years ago!

They're sure to give a nice little boost to the Australian economy as they spend our money on foreign shores!!

Yeh, I guess we're off topic a bit, but discussion of the economic future has some relevance to the situation that Storm clients find themselves in, or more specifically, how they'll cope with that situation from here on.


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## Trevor_S (3 February 2009)

Mash said:


> What r u smoking there Glen........ u obviously don't have any property on the market now..... it already has tanked..... well upper end has.....




Upper end tanked ? (I assume you are talking Townsville ?) I guess it depends on what you define as "tanked" and "upper end".  I have been looking at houses / units in the $700K price range and I see very little, if any sign of the market tanking ?  I see that price in Townsville at the bottom of upper end.  Maybe it's because the prices I am seeing are those the agent/owner hope they can get rather rather then a reflection of the selling price.  I have seen two properties withdrawn from the market, so I take it from that the owner did not _have_ to sell ?  "Tanked" to me would be a 30% or greater reduction... 5 - 10% is just the vagaries of the market.


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## Mash (3 February 2009)

Actually Rockhampton, Sunshine Coast, Gold Coast . 300-400k selling. Over 600k certainly down by 20% since Sept.... Only speakng from personal experience....


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## cuttlefish (3 February 2009)

Trevor_S said:


> Upper end tanked ? (I assume you are talking Townsville ?) I guess it depends on what you define as "tanked" and "upper end".  I have been looking at houses / units in the $700K price range and I see very little, if any sign of the market tanking ?  I see that price in Townsville at the bottom of upper end.  Maybe it's because the prices I am seeing are those the agent/owner hope they can get rather rather then a reflection of the selling price.  I have seen two properties withdrawn from the market, so I take it from that the owner did not _have_ to sell ?  "Tanked" to me would be a 30% or greater reduction... 5 - 10% is just the vagaries of the market.





Asking price is no reflection of market price - particularly in a flat market when prices get sticky and properties just sit on the market for a long time at unrealistic prices.   Buy the sales data to get a realistic view  (and even that is historical and not necessarily reflecting the current market).


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## Trevor_S (3 February 2009)

cuttlefish said:


> Asking price is no reflection of market price -




I disagree, it's some reflection not "no reflection".  You have to start somewhere as a seller. I also have a rough guide based on what I know some places sold for and I see no indication locally of "tanking".  The use of the word is hyperbole, IMO.  There may be some minor pull back not a tanking due to the financial difficulty of Storm clients.  That aside, I thought Storm victims were all portrayed as struggling near retirees doing it hard ?  how can these guys be in at the upper end ?  I earn into six figures and live in a small three bedroom unit.



cuttlefish said:


> (and even that is historical and not necessarily reflecting the current market).



Exactly...  I see no evidence (doesn't mean some people don't have anecdotal stories to tell, I just see no evidence) of tanking per se in the "upper end" locally. Like I said, I am looking at about $700K or there about which to me in Townsville is the lower edge of upper end.   I do think prices in Townsville are incredibly overinflated so a pull back is reasonable from being one of the most unaffordable places in Australia it's to be hoped for and expected.

I think I might wait a few months before buying though I have spied a place I really like


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## Garpal Gumnut (3 February 2009)

Trevor_S said:


> I disagree, it's some reflection not "no reflection".  You have to start somewhere as a seller. I also have a rough guide based on what I know some places sold for and I see no indication locally of "tanking".  The use of the word is hyperbole, IMO.  There may be some minor pull back not a tanking due to the financial difficulty of Storm clients.  That aside, I thought Storm victims were all portrayed as struggling near retirees doing it hard ?  how can these guys be in at the upper end ?  I earn into six figures and live in a small three bedroom unit.
> 
> Exactly...  I see no evidence (doesn't mean some people don't have anecdotal stories to tell, I just see no evidence) of tanking per se in the "upper end" locally. Like I said, I am looking at about $700K or there about which to me in Townsville is the lower edge of upper end.   I do think prices in Townsville are incredibly overinflated so a pull back is reasonable from being one of the most unaffordable places in Australia it's to be hoped for and expected.
> 
> I think I might wait a few months before buying though I have spied a place I really like




Townsville, from a contact who should know, has 6-800 houses and apartments for sale at any one time and last year they were clearing/selling in 30-35days from listing. There has been a small increase in housing stock over the NY however the clearance time has spun out to over 70 days.

Now the simple fact is that upwards of a thousand homes are under threat of repossession and how this is handled will depend on how the market performs.

More stock and longer clearance rates leads to lower prices and vice versa.

The sad fact is that many of these people have lived in these homes for a large part of their life and will depend on relatives or the social services to support them in their retirement. 

So prices will fall and dramatically if the banks foreclose all at once.

gg


----------



## Mash (3 February 2009)

Then stay local you don't know what the real world is doing..... stay in your cacoon...what do you know..... know all know nothin you are what the agents call tyre kickers and bottom dwellers.... won't pay fair price just want a bargain.... no better than the scum sucking cassimati's of this world


----------



## Mash (3 February 2009)

Trevor_S said:


> That aside, I thought Storm victims were all portrayed as struggling near retirees doing it hard ?  how can these guys be in at the upper end ?  I earn into six figures and live in a small three bedroom unit.




Cry me a river.....
Near retirees....or in my case....early retiree....but having purchased our properties over 20 years ago (in my early 20's).... and worked hard paying off these properties...I believe that we should ask a fair price for having taken the plunge early... what the..... you guys just love to sink in the boot don't you....who do you think you are!!!!   You ain't all that!!!!


----------



## Solly (3 February 2009)

*"Court blocks $2m Storm dividend"*

"A court has ordered a freeze on a $2 million dividend Storm Financial's founders paid to themselves shortly before the company went into administration."

"ASIC's lawyers told the court the couple knew the company was in trouble and acted improperly by paying themselves the dividend, which is under investigation by the corporate watchdog."

Full Age story is here;

http://business.theage.com.au/business/court-blocks-2m-storm-dividend-20090203-7we0.html


----------



## Pindibog (3 February 2009)

Trevor_S said:


> I disagree, it's some reflection not "no reflection".  You have to start somewhere as a seller. I also have a rough guide based on what I know some places sold for and I see no indication locally of "tanking".  The use of the word is hyperbole, IMO.  There may be some minor pull back not a tanking due to the financial difficulty of Storm clients.  That aside, I thought Storm victims were all portrayed as struggling near retirees doing it hard ?  how can these guys be in at the upper end ?  I earn into six figures and live in a small three bedroom unit.
> 
> Exactly...  I see no evidence (doesn't mean some people don't have anecdotal stories to tell, I just see no evidence) of tanking per se in the "upper end" locally. Like I said, I am looking at about $700K or there about which to me in Townsville is the lower edge of upper end.   I do think prices in Townsville are incredibly overinflated so a pull back is reasonable from being one of the most unaffordable places in Australia it's to be hoped for and expected.
> 
> I think I might wait a few months before buying though I have spied a place I really like




I am and know lots of storm clients and they don't live high end ! Average suburbia at best! Hey six figures....any openings going?


----------



## Solly (3 February 2009)

*"FPA investigating Storm advisers"*

'Ten of Storm's advisers are registered with the FPA and are now being investigated for possible breaches of the association's code of practice.'


ABC story is here:

http://www.abc.net.au/news/stories/2009/02/03/2480716.htm


----------



## Garpal Gumnut (3 February 2009)

Solly said:


> *"Court blocks $2m Storm dividend"*
> 
> "A court has ordered a freeze on a $2 million dividend Storm Financial's founders paid to themselves shortly before the company went into administration."
> 
> ...




Good one.

Lets hope ASIC do more to help claw back some of the losses the Storm customers have suffered.

The FPA, Financial Planners Association need investigating as well. They did little to warn investors before the catastrophic demise of Storm.

gg


----------



## GumbyLearner (3 February 2009)

Garpal Gumnut said:


> Good one.
> 
> Lets hope ASIC do more to help claw back some of the losses the Storm customers have suffered.
> 
> ...




Yes. Shady industry without any checks or controls. Promise you the earth...and where's your earth?


----------



## Julia (3 February 2009)

Mash said:


> Cry me a river.....
> Near retirees....or in my case....early retiree....but having purchased our properties over 20 years ago (in my early 20's).... and worked hard paying off these properties...I believe that we should ask a fair price for having taken the plunge early... what the..... you guys just love to sink in the boot don't you....who do you think you are!!!!   You ain't all that!!!!



Mash, you can ask whatever you like.  Sadly, however, a property is only worth what the market will pay.
You say "paying off these properties' (plural).  This would suggest (perhaps quite incorrectly) that both/all of your properties were borrowed against to further increase your wealth.   Just wondering, did you have a dollar figure in mind when enough would have been enough?



Solly said:


> *"Court blocks $2m Storm dividend"*
> 
> "A court has ordered a freeze on a $2 million dividend Storm Financial's founders paid to themselves shortly before the company went into administration."
> 
> ...



Thanks for that link.  Good to know ASIC is actually finally doing something useful.  I wonder if they might find a way to garner the proceeds of the Cassimatis' various assets.  Then we could actually see whether Emmanuel really means his avowed intent to apply whatever they can salvage to easing the difficulties of clients.  I won't be holding my breath.


----------



## Julia (3 February 2009)

Garpal Gumnut said:


> Good one.
> 
> Lets hope ASIC do more to help claw back some of the losses the Storm customers have suffered.
> 
> ...



Indeed they did not.  But, gg, I wonder if that's their role?  Doesn't any industry association exist for the benefit of its members primarily?

Warnings to investors should be the province of ASIC, shouldn't it?
It seems they had received several complaints about Storm going back quite a few years, but failed to find any problem.  Hardly reassures us about the watchdog capacity of our regulator.


----------



## bunyip (3 February 2009)

Mash said:


> Then stay local you don't know what the real world is doing..... stay in your cacoon...what do you know..... know all know nothin you are what the agents call tyre kickers and bottom dwellers.... won't pay fair price just want a bargain.... no better than the scum sucking cassimati's of this world




Aren't you over-reacting a bit here, ol' son?
There's nothing new about buyers looking for bargains, we've all done it - you've probably done it yourself.
Fair value is determined by the market.


----------



## nunthewiser (3 February 2009)

bunyip said:


> Aren't you over-reacting a bit here, ol' son?
> There's nothing new about buyers looking for bargains, we've all done it - you've probably done it yourself.
> Fair value is determined by the market.




Just wondering if mash paid full list price when he bought his propertys or he negotiated like the rest of us


----------



## Mash (3 February 2009)

How typical for you to assume I am a he.... laughs on you... I am woman hear me roar!!!!


----------



## nunthewiser (3 February 2009)

Just wondering if mash paid full list price when she bought her propertys or she negotiated like the rest of us

 apologys for taking your sexuality for granted


----------



## bunyip (3 February 2009)

Mash said:


> How typical for you to assume I am a he.... laughs on you... I am woman hear me roar!!!!




Couldn't care less about what gender you are....but you need to get your emotions under control.


----------



## Solly (4 February 2009)

Garpal Gumnut said:


> Good one.
> 
> Lets hope ASIC do more to help claw back some of the losses the Storm customers have suffered.
> 
> ...



Again today I have spoken with ex clients. I am totally dismayed that people were so "hands off" with their investments. I was even recently told don't worry EC will handle evetything and he'll sort it out. Never in my life do I trust  any one organisation to monitor or manage my affairs. These people are now learning a very tough lesson. Some are now displaying emence anger towards their previous saviour and financial guru. I keep saying that this is wasted energy. While they hold this position it holds them back from moving forward. I believe that EC & JC are not evil scammers, they just held a belief that their  strategy was a way to help others gain financial security while paying a good dividend to themselves to secure tneir future as well. I listened to that ABC interview several times and I hear a very scared devistated man, probably still in shock and in disbelief as to what has happened. To me he displays the behaviours of someone that truly wishes that these events could be reversed. The facts are that the company is gone and smoldering ruins remains. He's spent 34 years in this industry and held a basic belief that his strategy was sound only to find that circumstances have proved otherwise. His behaviours to me display someone who will not flee but will try to rebuild again. I believe that he will most likely be demolished by this event as well. I don't condone his business strategies or  previous life style but the blame does not lay fully with him. No amount of anger or ill feelings will change the circumstances. There will be multiple factors which caused this event, there are emence and hard learnings for all parties in this episode.


----------



## Mash (4 February 2009)

Julia said:


> Mash, you can ask whatever you like.  Sadly, however, a property is only worth what the market will pay.
> You say "paying off these properties' (plural).  This would suggest (perhaps quite incorrectly) that both/all of your properties were borrowed against to further increase your wealth.   Just wondering, did you have a dollar figure in mind when enough would have been enough?




Do you have a dollar figure where you know for sure what will keep you going for the rest of your life..... My crystal ball is obviously not as good as yours.... I was prepared to use what I had acquired to add to my nest egg.... prepared to be in it for the long haul..... and thought with PROFESSIONAL advice I would be able to sell down when needed and sit it out until it was safe to get back into the market... that was what I signed up for..... not to be stalled and kept in the market until the margin loan was higher than the securing portfolio... how else do we explain to you all...we were not greedy when we signed up with storm..... our expectations were hightened as we went along... and yes we expected good returns... but I have paid a heap of taxes over the years...having well and truly done my bit... tall poppy syndrome is alive and well in Aus.... I will recover...I still have some get up and go.... Cassimatis will not sink me... nor will all the nay sayers on this forum like those who seem to relish kicking those who have taken a king hit.... say what u will.... words are cheap.... I must say all of your bashing has made me realise the only people that really count are those I respect and hold dear... I'm glad I have those people in my life and take what the likes of this forum have to say with a grain of salt..... it's been well interesting....!!!!!!


----------



## shibby (4 February 2009)

Mash said:


> ... tall poppy syndrome is alive and well in Aus.... I will recover...I still have some get up and go.... Cassimatis will not sink me... nor will all the nay sayers on this forum like those who seem to relish kicking those who have taken a king hit.... say what u will.... words are cheap.... I must say all of your bashing has made me realise the only people that really count are those I respect and hold dear... I'm glad I have those people in my life and take what the likes of this forum have to say with a grain of salt..... it's been well interesting....!!!!!!




Go girl !! well said, they really are the pits aren't they? 
I wonder what sort of life they really lead?
On this forum they can pretend to be any thing.  It's all an illusion - we don't know if your successful, you can make up any thing you like and pretend to be who you want to be.  
The sad thing is that you obviously get great pleasure out of putting the boot in and I pity you.
I might be poor but I am loved and cherished and Mash I bet you are too. 
I will also sign off with..... it's been interesting.


----------



## MR. (4 February 2009)

Mash said:


> Do you have a dollar figure where you know for sure what will keep you going for the rest of your life..... My crystal ball is obviously not as good as yours.... I was prepared to use what I had acquired to add to my nest egg.... prepared to be in it for the long haul..... and thought with PROFESSIONAL advice I would be able to sell down when needed and sit it out until it was safe to get back into the market... that was what I signed up for..... not to be stalled and kept in the market until the margin loan was higher than the securing portfolio... how else do we explain to you all...we were not greedy when we signed up with storm..... our expectations were hightened as we went along... and yes we expected good returns... but I have paid a heap of taxes over the years...having well and truly done my bit... tall poppy syndrome is alive and well in Aus.... I will recover...I still have some get up and go.... Cassimatis will not sink me... nor will all the nay sayers on this forum like those who seem to relish kicking those who have taken a king hit.... say what u will.... words are cheap.... I must say all of your bashing has made me realise the only people that really count are those I respect and hold dear... I'm glad I have those people in my life and take what the likes of this forum have to say with a grain of salt..... it's been well interesting....!!!!!!




Tacticle questioning there people!  Are people always just over powered by greed?  Some perhaps just got lucky and got out the market after the first little shocks?   Easy for a trader/invester with their finger on the pulse hey?  Only had to answer to themselves!  So did a little more reading than perhaps someone who "pays" a fund manager? 

Would have been hard for Storm to sell down such a large portfolio! Questions either way!

Storm's leveraged model was indeed flawed. 
Who's fault was it?  

Storm's ..... no question
They bloody came up with it!


----------



## Trevor_S (4 February 2009)

Garpal Gumnut said:


> So prices will fall and dramatically if the banks foreclose all at once.




Indeed.. BUT go back and read what I was debating, it was stated that prices had TANKED already due to the Storm fiasco.debacle.drama (insert word of choice), not theorising that they might. I was just pointing out that in my experience so far, they had not and I had yet to see any real evidence of prices "tanking". I had seen a moderate retreat, (in line with the rest of Aus) and a lengthening of clearance times, (in line with the rest of Aus), so there seemed little evidence to support the bold tanking of prices statement...  so I called bullsh_it   though I did seek clarification on the posters definition of tanking...suspecting it more a newspaper headline then reality on the ground.

As to being a bottom feeder, I don't agree I am.  I do not purchase when I don't see value, I am not sure how this qualifies me as a bottom feeder per se ? if I don't see value, I don't purchase, this manifesto has served me well in business and investing (share and property). 

My throw away line in regards retirees living the high life was a mirrored reflection of the portrayal in the printed media, no doubt highlighting the most desperate cases in order to tug at the publics heart strings and sell more newspapers, often not reporting the true facts at all.  None of which detracts of course from the real pain some are feeling.



shibby said:


> The sad thing is that you obviously get great pleasure out of putting the boot in and I pity you.




You must read a different forum to me, I have yet to see anyone putting the boot in, a few that are incredulous at the investment strategy followed, a few wanting to seek clarification on the process involved and some saying that Storm's clients have to bear some of the responsibility but not boot sticking in from what I can see.


----------



## Solly (4 February 2009)

*"Storm advisers locked in $28m equity deal 
Authorised reps wait for millions"*


Story by By Kate Kachor from Investor Daily

http://www.investordaily.com/cps/rde/xchg/id/style/5703.htm


----------



## Solly (4 February 2009)

*"Regulators asleep at the wheel as Storm crashes"*

"Many of the casualties in this tragic crash could have been saved these losses if regulators -- ASIC and past federal ministers responsible for administering the industry -- had not been asleep at the wheel"

Story by Peter Switzer in The Australian-Business

http://www.theaustralian.news.com.au/business/story/0,28124,24984855-5001942,00.html


----------



## asproboy (4 February 2009)

Peter's article is a good one. The most thorough objective assessment I've seen to date is from commentator Paul Resnik, featured here:
http://www.moneymanagement.com.au/Article/Are-you-an-agent-for-me-or-my-money/436296.aspx

In it, he looks at the gaps in the financial planning profession that appear to have been exploited in this scenario, and challenges the profession to move to close them to stifle such rogues for its own reputational integrity.

The advisers who 'sold out' to Storm are unbelievable, putting their faith/greed in offers of "top dollar" and "Does handing the responsibility of compliance/regulations to someone else appeal to you?"

Shame, shame - and the regulators and FPA need to move quickly if they are to restore public confidence.


----------



## QuiteContrary (4 February 2009)

For those interested, Paul Resnick has written an opinion piece entitled "Are you an agent for me or my money" which appeared in Money Management 29th January.

Here's the opening paragraph:

"Much of what is wrong in financial planning will be found in the very public unravelling of the Storm Financial Group. Time and the courts will tell if there has been any form of illegality. In the meantime, the nature of their business model will become more open to public view. 
I have no doubt the community’s confidence in the integrity of the financial planning services available to them will continue to be severely undermined by a number of issues that have emerged to date:"

And here's the link to the full article:


http://www.moneymanagement.com.au/Article/Are-you-an-agent-for-me-or-my-money/436296.aspx

I hope you find it interesting.


----------



## schumy (4 February 2009)

To those who may still be confused by why it all went pear shaped for them, I can only add my support to what's already been said about and in the article by Paul Resnick in Money Management:

http://www.moneymanagement.com.au/Article/Are-you-an-agent-for-me-or-my-money/436296.aspx

Sums up with clarity, the whole mess perfectly.


----------



## Solly (4 February 2009)

QuiteContrary said:


> For those interested, Paul Resnick has written an opinion piece entitled "Are you an agent for me or my money" which appeared in Money Management 29th January.
> 
> Here's the opening paragraph:
> 
> ...




Thanks for the link to the article. It really says it all..............


----------



## Solly (4 February 2009)

Emmanuel Cassimatis doesn't comment on speculation of the sale of his Belmont home. 

Local Wynnum Herald article here:

http://wynnum-herald.whereilive.com.au/news/story/will-they-sell-up/



And

"The avenues for compensation for the clients of Storm Financial appear to be closing down, with one industry complaints service closing its doors to Storm clients"

Story by Lucinda Beaman from Money Management is here:   

http://www.moneymanagement.com.au/article/Storm-Financial-clients-in-compensation-no-man-s-land/436772.aspx

And

ASIC has now been granted an order in the Supreme Court today in 
freezing an account linked to Storm.

http://www.abc.net.au/news/stories/2009/02/04/2482387.htm


----------



## Solly (4 February 2009)

*4 Corners - The Perfect Storm*

*Reporter: Paul Barry to be Broadcast: 09/02/2009*

http://www.abc.net.au/4corners/content/2008/s2482023.htm

The link mentions....

Townsville rocked by layoffs of hundreds of workers, as resource companies cut costs and production or close down mines. 

Carey Ramm tells Four Corners, "Productive enterprises that employ thousands of people are struggling to refinance......" 

The collapse of Storm Financial threatens to wreck the lives of thousands of average Australians.....


----------



## Pindibog (4 February 2009)

Solly said:


> *4 Corners - The Perfect Storm*
> 
> *Reporter: Paul Barry to be Broadcast: 09/02/2009*
> 
> ...




This site has been very informative/interesting & frustrating at times. Thankyou to those that are posting these articles etc. I am still trying to refine my searching techniques! This makes things easier.


----------



## Glen48 (4 February 2009)

E C claims he needs to be cashed up to help the other victims get their money...what a noble OZ.


----------



## Julia (4 February 2009)

schumy said:


> To those who may still be confused by why it all went pear shaped for them, I can only add my support to what's already been said about and in the article by Paul Resnick in Money Management:
> 
> http://www.moneymanagement.com.au/Article/Are-you-an-agent-for-me-or-my-money/436296.aspx
> 
> Sums up with clarity, the whole mess perfectly.



It is a good article.  But it did rather leave me with the impression that the author was not allowing for any responsibility to have been taken by the Storm clients.  I emailed him to ask his thoughts about this.  Here is his reply:



> I could not agree more. I have argued for almost 10 years that we needed to have a planning process that encouraged clients to take responsibility for their financial plan and the consequences when it failed. At its simplest it is a three step process:
> 
> how much risk does the client need to take to achieve their financial goals
> how does this differ from the risk they would take on if  financial goals were not an issue
> ...


----------



## Julia (4 February 2009)

Mash said:


> Do you have a dollar figure where you know for sure what will keep you going for the rest of your life..... My crystal ball is obviously not as good as yours.



There are plenty of retirement income calculators available to help you work out what you will need.  This should also be an essential question addressed by any financial planner when offering advice.




> ... I was prepared to use what I had acquired to add to my nest egg.... prepared to be in it for the long haul..... and thought with PROFESSIONAL advice I would be able to sell down when needed and sit it out until it was safe to get back into the market... that was what I signed up for..... not to be stalled and kept in the market until the margin loan was higher than the securing portfolio.



I'm really sorry that you feel anyone on this forum is being unreasonable in the questions asked.  I don't believe a single person on ASF doesn't have some sympathy for your situation or doesn't understand how angry and upset you must be.

It's just that comments like yours in the paragraph above are hard to understand.   You say the margin loan was higher than the securing portfolio and suggest you were 'stalled' when wanting to get out.  This is what puzzles me.   Are you saying you issued clear instructions to your Storm adviser to exit your holding and this was refused?




> .. how else do we explain to you all...we were not greedy when we signed up with storm..... our expectations were hightened as we went along..



So you were started off with a fairly conservative plan but as your confidence increased and the profits also, then you were encouraged to borrow more, and more?




> . and yes we expected good returns... but I have paid a heap of taxes over the years...having well and truly done my bit..



I don't quite get the relationship between having paid taxes and expecting high returns from investments.




> . tall poppy syndrome is alive and well in Aus.



It may well be but I don't see who is the tall poppy here.  Certainly not Storm and certainly not the Storm clients.




> ... I will recover...I still have some get up and go.... Cassimatis will not sink me... nor will all the nay sayers on this forum like those who seem to relish kicking those who have taken a king hit.... say what u will.... words are cheap.... I must say all of your bashing has made me realise the only people that really count are those I respect and hold dear... I'm glad I have those people in my life and take what the likes of this forum have to say with a grain of salt..... it's been well interesting....!!!!!!



I don't believe anyone has 'bashed' you.  It's not for me to speak for anyone else but I'm just genuinely interested in how so many people seem to have been swept up in some sort of magic scheme where you could have leverage on leverage with no expectation of a day of reckoning when the market turned.

I hope the experience inspires wisdom rather than bitterness.  This can be a pretty hard ask in such a situation.  I wish you all the best.


----------



## Solly (5 February 2009)

Solly said:


> ASIC has now been granted an order in the Supreme Court today in
> freezing an account linked to Storm.
> 
> http://www.abc.net.au/news/stories/2009/02/04/2482387.htm




Here is the full text from the ASIC Media Centre website with reference to the above:

*AD09-11 Storm Financial – court order freezing $2 million payment*

Wednesday 4 February 2009

ASIC has obtained orders from the Supreme Court of Queensland freezing a payment of $2 million from Storm Financial Limited to a bank account held by Emmanuel Cassimatis & Associates Pty Ltd. Emmanuel and Julie Cassimatis are both directors and shareholders of Emmanuel Cassimatis & Associates Pty Ltd. 

The amount of $2 million was transferred from a bank account of Storm Financial Limited on 15 December 2008, within one month of the appointment of voluntary administrators to the company. ASIC is concerned that, on the information available to it, there does not seem to be a proper basis for the payment. ASIC has moved the Court for an injunction, requiring the money to be returned to Storm Financial Limited. 

The Court orders restrain Emmanuel Cassimatis, Julie Cassimatis and Emmanuel Cassimatis & Associates Pty Ltd from paying, transferring or otherwise dealing in any way with the money. 

The Court made the orders on Friday 30 January 2009 and extended the orders on Tuesday 3 February 2009. 

The matter has been adjourned until 18 February 2009, for a determination of whether ASIC is entitled to maintain the orders currently in place.

More information for investors is available at www.asic.gov.au/storm.
" © Australian Securities & Investments Commission. Reproduced with permission."


----------



## Solly (5 February 2009)

*FOS (Financial Ombudsman Service) continues to field Storm complaints 
Grievances may hit snag*

Story by Kate Kachor from Investor Daily

http://www.investordaily.com.au/cps/rde/xchg/id/style/5705.htm

(There are monetary limits for claims and impacts if Storm is liquidated.)


----------



## bunyip (6 February 2009)

Trevor_S said:


> You must read a different forum to me, I have yet to see anyone putting the boot in, a few that are incredulous at the investment strategy followed, a few wanting to seek clarification on the process involved and some saying that Storm's clients have to bear some of the responsibility but not boot sticking in from what I can see.




Absolutely correct.

The emotional and in some respects abusive tirades from Shibby and Mash were completed unwarranted, and did neither of them any credit.
It's a bit hard to feel sympathetic towards anyone who displays that sort of reaction when presented with views that don't mirror their own. 

Incidentally, Mash, we're still waiting for answers on whether you ever hunted for bargains or  attempted to negotiate the price downwards in your favour when buying real estate.


----------



## Garpal Gumnut (6 February 2009)

bunyip said:


> Absolutely correct.
> 
> The emotional and in some respects abusive tirades from Shibby and Mash were completed unwarranted, and did neither of them any credit.
> It's a bit hard to feel sympathetic towards anyone who displays that sort of reaction when presented with views that don't mirror their own.
> ...




Talking of real estate the agent took me through Manny and Julie's pile on Melton Tce. the other day. Its not a house I'd want to live in, Palazzo Pizza type place, smaller than I thought, the lift works and the views are ok, but only just ok. The chandelier doesn't look worth the money, Waterford crystal are in receivership so it may increase in value if they fold up shop. The bedrooms are ok, but not fantastic. I didn't like the kitchen. Garpaldog would not be happy in the yard. The fengshui is all wrong. 

gg


----------



## bunyip (6 February 2009)

Garpal Gumnut said:


> Talking of real estate the agent took me through Manny and Julie's pile on Melton Tce. the other day. Its not a house I'd want to live in, Palazzo Pizza type place, smaller than I thought, the lift works and the views are ok, but only just ok. The chandelier doesn't look worth the money, Waterford crystal are in receivership so it may increase in value if they fold up shop. The bedrooms are ok, but not fantastic. I didn't like the kitchen. Garpaldog would not be happy in the yard. The fengshui is all wrong.
> 
> gg




LOL....no point buying it then if Garpaldog wouldn't be happy!

Some of these upper crust houses are incredibly ugly on the outside too. Like the Cassamatis abode in Townsville......what a horrible looking pad!


----------



## Solly (6 February 2009)

*"Ignite distances itself from Storm"*

CEO of Ignite says the application for a AFSL has nothing to do with providing advice in the future.
See Mike Taylor's Money Management Story here;

http://www.moneymanagement.com.au/article/Ignite-distances-itself-from-Storm/437140.aspx


----------



## Solly (6 February 2009)

It has been reported that the Storm creditors meeting date has been extended to 16/3/09..
more details soon


----------



## Smiley (6 February 2009)

Here is your chance to contact the Cassimatis's website:
http://cassimatis.com.au/index
You can email them questions and read their claims.


----------



## Solly (6 February 2009)

Smiley said:


> Here is your chance to contact the Cassimatis's website:
> http://cassimatis.com.au/index
> You can email them questions and read their claims.




Thanks Smiley, this site is "pure gold". Although I do notice that it is badged with a Wilkinson Media link and that there is a notation on the "Forum" - "Ask as a Question" link that states, "Please note: we reserve the right to select the questions that will be published to the website." 

The mission statement on the home page is admirable, about "finding justice for all".  

And of course it must be reiterated, at this point in time no entity has been found guilty of any legal breach what-so-ever. 

What questions could persons ask of the Cassimatis' ? 

Has anybody posted a question yet?


----------



## Julia (6 February 2009)

Garpal Gumnut said:


> Garpaldog would not be happy in the yard. The fengshui is all wrong.
> 
> gg



Hello GG, I'm really interested in Garpaldog's reactions.  Good to know that he has the canine feng shui all sorted out.  

 Is there any chance you could send him down here to pass his expertise on to the German Shepherd Libbydog?
I don't think she has the faintest notion about feng shui.

I acknowledge such passing on of expertise would involve substantial fee to your good self and hope we could negotiate this.


----------



## Garpal Gumnut (6 February 2009)

Julia said:


> Hello GG, I'm really interested in Garpaldog's reactions.  Good to know that he has the canine feng shui all sorted out.
> 
> Is there any chance you could send him down here to pass his expertise on to the German Shepherd Libbydog?
> I don't think she has the faintest notion about feng shui.
> ...




lol

garpaldog sends his regards to libbydog.

since we got him this book last Christmas he's started tai chi as well.

http://www.amazon.com/Feng-Shui-Dogs-Louise-Howard/dp/0091860857

gg


----------



## bunyip (7 February 2009)

Solly said:


> Thanks Smiley, this site is "pure gold". Although I do notice that it is badged with a Wilkinson Media link and that there is a notation on the "Forum" - "Ask as a Question" link that states, "Please note: we reserve the right to select the questions that will be published to the website."
> 
> The mission statement on the home page is admirable, about "finding justice for all".
> 
> ...





*I posted the two questions below. I'll let you know what answers I get, if any.
I doubt if they'll post my questions on the website.*


You have repeatedly claimed that this event was 'unprecedented'. How can you have forgotten the precedent set by the 1987 crash which was much more brutal than the current crash in terms of the speed of the plunge?
Current crash....down approximately 50% over 12 months
1987 crash.....down 25% in one day and approximately 50% in 3 months

You've defended your actions of putting new clients into a plunging market, by stating _"You buy stocks when they're cheap"._
Given your decades of involvement in the financial markets,  can you explain your lack of understanding of the suicidal risks of buying plunging stocks....how could someone of your experience fail to realise that 'cheap' is likely to become much cheaper when the market is sinking rapidly?


----------



## chrisgee (7 February 2009)

Solly said:


> Thanks Smiley, this site is "pure gold". Although I do notice that it is badged with a Wilkinson Media link and that there is a notation on the "Forum" - "Ask as a Question" link that states, "Please note: we reserve the right to select the questions that will be published to the website."
> 
> The mission statement on the home page is admirable, about "finding justice for all".
> 
> ...





I have sent an email asking:
 What do they mean about a "Black Swan" event and also asking what strategy did they have inplace for when the market takes a large downward movement. It will be good to see if they post a reply on the website.


----------



## Macquack (7 February 2009)

cassimatis.com.au

Click here to talk directly to Emmanuel and Julie.

Talk to Us

Recent Questions

Is it true liquidators have seized your private jet?

"No. As of right now there are now liquidators involved with us. We have put our aircraft on the market for sale ourselves. It’s a Beechcraft Premier 1A, which is a seven seater aircraft with a *maximum range of three hours*. "

They will need a jet with a much longer range than 3 hours to get out of this mess.


----------



## awg (7 February 2009)

In light of the attached quote and article, and the abscence of any negative reply from any of the many Storm clients who have vented on this site.

I am going to assume beyond reasonable doubt that each and every Storm client had the capability to monitor every aspect of their investment online on a daily basis.

It would appear those that got bankrupted failed to that.

What else could explain persons allowing their debt to blow out their housing equity loan.

AFAIC their is no excuse for that laxity. 

If I am incorrect, by all means correct me.


http://www.moneymanagement.com.au/article/Ignite-distances-itself-from-Storm/437140.aspx

"Explaining the company’s activities, Fenech said it had developed software that Storm used in connection with Colonial First State and Challenger Indexed Funds.

“Storm was our client but, like everyone else, they [owe] us money – we are one of the creditors and we have turned off the software (to Storm),” he said.

Fenech said the software had not simply been re-badged from another provider and was proprietary software that had been developed by Ignite, which employs around eight developers.

He said apart from Storm, the company had two other clients, but he declined to reveal the names of the other companies using the Ignite software."


----------



## swazee (7 February 2009)

I wonder where all the vested interests rest in this forum. Carey Ramm talks about bank trolls, however I wonder if he ever discloses his past/present links with Dalle Court and why they have escaped scrutiny adopting similar if not identical strategies to Storm. When the Storm debacle blows over, rest assured that Isi Dalle Court will be the next round in the chamber....

Lets face it, double gearing is double gearing so lets remember that it is not only Storm Financial offering this sort of advice.


----------



## Glen48 (7 February 2009)

Strom Software: 
Find victims Mortgage their house to the hilt, collect a hefty fee, buy shares sit back...wait.... no reset button ooh NO.
Turn of PC and hide under the bench.


----------



## pilots (7 February 2009)

Glen48 said:


> Strom Software:
> Find victims Mortgage their house to the hilt, collect a hefty fee, buy shares sit back...wait.... no reset button ooh NO.
> Turn of PC and hide under the bench.




Glen48, you are not right at all, after the reset button, you then look around for your next lot of suckers to milk.


----------



## Glen48 (7 February 2009)

Ok course you PC blokes are smart, delete the Memory, increase the hard drive and use more ram, wave a big USB stick. should get it up and running in no time.


----------



## Glen48 (7 February 2009)

Ok course you PC blokes are smart, delete the Memory, increase the hard drive and use more ram, wave a big USB stick. should get it up and running in no time.


----------



## Solly (7 February 2009)

Solly said:


> It has been reported that the Storm creditors meeting date has been extended to 16/3/09..
> more details soon




"The administrator of Storm Financial has won an extension on the time until the next creditors meeting.

The meeting of Storm's creditors was due to happen next week, but the Federal Court has extended the meeting's convening period to March 16."



Here's the ABC link;

http://www.abc.net.au/news/stories/2009/02/06/2484634.htm


----------



## Solly (7 February 2009)

swazee said:


> I wonder where all the vested interests rest in this forum. Carey Ramm talks about bank trolls, however I wonder if he ever discloses his past/present links with Dalle Court and why they have escaped scrutiny adopting similar if not identical strategies to Storm. When the Storm debacle blows over, rest assured that Isi Dalle Court will be the next round in the chamber....
> 
> Lets face it, double gearing is double gearing so lets remember that it is not only Storm Financial offering this sort of advice.





Swazee can you give more info on Dalle Cort. All I can find is their website at 

http://www.dallecort.com/Dallecort/

I have no direct knowledge of their operations. 

Are you stating that they use the same strategies as Storm and will face similiar challenges to Storm?

I hope that Carey is still reading this forum and will offer a comment.


----------



## xoa (7 February 2009)

Every cloud has a silver lining. Now is a great time for anybody wanting to buy near-new yacht in Townsville.  Hundreds of amateur property tycoons are facing ruin and are motivated to sell.


----------



## Glen48 (7 February 2009)

Today Saturday Courier Mail has a story about 100 Townsville homes placed on the market this week with more to come, lucky for the the Victims of Australia version of the Made Off scheme house prices have risen 9.3%.


----------



## Solly (7 February 2009)

Macquack said:


> cassimatis.com.au
> 
> Click here to talk directly to Emmanuel and Julie.
> 
> ...




This A/C is quite a nimble little performer..it's no CJ but will cruise quite well around FL40....but I'm a little biased.  I believe you'll get almost 1K nm out of it depending on number of pax, payload and head wind. 
You may just be able to manage a long glide into Vila and just manage a 2 or 3 degree flare on landing.

I imagine this little luxury would be quite hard to give up and being forced to to travel "cattle" on JQ on a commute to BNE or SYD would be quite a lifestyle change. I've never travelled JQ but I believe you can take your own food on board...


----------



## Garpal Gumnut (7 February 2009)

From the not the nine o'clock garpalmedia company


*incaseitmatis.com.au

Click here to talk directly to Manuel and Jools.

Talk to Us

Recent Questions

Is it true liquidators have seized your mansions?

"No. As of right now there are now liquidators involved with us. We have put one of our mansions on the market for sale ourselves. It’s a  Premier 1A Mansion, which is a seven bedroom mansion with a maximum range lift on three levels. "

*

To be represented by garpalmedia contact gg via pm.

gg


----------



## swazee (8 February 2009)

Solly said:


> Swazee can you give more info on Dalle Cort. All I can find is their website at
> 
> http://www.dallecort.com/Dallecort/
> 
> ...





Hey Solly, Isi Dalle Court used to work at the old Storm. Essentially his model is the same, perhaps the only difference is that he only doesn't gear pensioners!! (that I know of) His cousin Gus Dalle Court was the operator of the Storm Cairns operation.

I know of one person who went there and they told him 'you have probably heard bad things about us?" They hadn't at that stage but thanked them for being honest and walked straight out the door.


----------



## Solly (8 February 2009)

*"Timing query over Storm Financial bonus"*

"...documents, obtained by The Sunday Mail, claim Storm Financial Services' owners Emmanuel and Julie Cassimatis knew their company was $51 million in debt when they took the bonus payment."

Read the full story by Ainsley Pavey here;

http://www.news.com.au/couriermail/story/0,27574,25022697-3102,00.html


----------



## GumbyLearner (8 February 2009)

Solly said:


> *"Timing query over Storm Financial bonus"*
> 
> "...documents, obtained by The Sunday Mail, claim Storm Financial Services' owners Emmanuel and Julie Cassimatis knew their company was $51 million in debt when they took the bonus payment."
> 
> ...




Definitely ammo for shareholders!
The problem with these people is they think they can do another Skase!
Wrong! 
Keep it up Solly, I don't want to see the bull**** movie. I'll hear the full story here on ASF.
Thankyou my friend!


----------



## Solly (8 February 2009)

swazee said:


> Hey Solly, Isi Dalle Court used to work at the old Storm. Essentially his model is the same, perhaps the only difference is that he only doesn't gear pensioners!! (that I know of) His cousin Gus Dalle Court was the operator of the Storm Cairns operation.
> 
> I know of one person who went there and they told him 'you have probably heard bad things about us?" They hadn't at that stage but thanked them for being honest and walked straight out the door.





Ok swazee, thanks for the post. I see that they are associated with the NAB Group with their offerings.


----------



## GumbyLearner (8 February 2009)

Solly said:


> Ok swazee, thanks for the post. I see that they are associated with the NAB Group with their offerings.




You need someone to go in and check Storm's books. ....NOW!!!!!!


----------



## bunyip (8 February 2009)

awg said:


> In light of the attached quote and article, and the abscence of any negative reply from any of the many Storm clients who have vented on this site.
> I am going to assume beyond reasonable doubt that each and every Storm client had the capability to monitor every aspect of their investment online on a daily basis.
> It would appear those that got bankrupted failed to that.
> What else could explain persons allowing their debt to blow out their housing equity loan.
> ...




Not only did they have the capacity to monitor every aspect of their investment as often as they liked, they also had the capacity to...

* Monitor the stockmarket and the world financial and economic situation as often as they liked (in fact the media did this for them every day)
* Give specific instructions to their investment managers to reduce their exposure as the situation became increasingly risky.
* Follow up on those instructions to ensure they were carried out promptly.

Anyone who failed to do any of the above was clearly 'asleep at the wheel'......a deadly mistake when you've got investment money on the line - particularly geared investment money.
Had they kept their fingers on the pulse they could have removed themselves from harms way long before their accounts got anywhere near margin call.

What's been interesting about this thread has been the contrast in attitudes among the Storm victims. Some - perhaps the majority - have been honest in facing up to their part of the responsibility for what happened. Some have admitted they went in with their eyes open. Some have admitted they were naive. Some have admitted their mistake in placing complete trust in their advisers. Some have admitted that they should have been more decisive by insisting that their instructions were carried out.

Others have shown a distinct reluctance to accept any responsibility, and have attempted to push all the blame on to someone else.

What's also been interesting is the reaction of a small number of Storm victims and at least one of their supporters. Those of us who have attempted to have a balanced discussion on this matter have been subjected to all manner of insults, such as........

* Storm plants and bank trolls.
* No better than the scum-sucking Cassamitisis.
* Tyre kickers and bottom feeders
* The 'pits'
* Sticking the boot in

Among other things....suffice to say that we've copped a tirade of abuse, insults and aggression for doing nothing more than telling the story how it is. Ahh well.......


----------



## Solly (8 February 2009)

The Sunday Mail reports that Andrew Symonds may have lost more than $1 million and Wally Fullerton Smith says he has lost everything...

The full story by Nick Leys and Michael Westlake is here;

http://www.news.com.au/couriermail/story/0,23739,25024254-952,00.html


----------



## MR. (8 February 2009)

bunyip said:


> Not only did they have the capacity to monitor every aspect of their investment as often as they liked, they also had the capacity to...
> 
> * Monitor the stockmarket and the world financial and economic situation as often as they liked (in fact the media did this for them every day)
> * Give specific instructions to their investment managers to reduce their exposure as the situation became increasingly risky.
> ...



So don't trust anyone apart from yourself with your money.  
I think many investors would "now" know this! If they didn't before!



bunyip said:


> * Storm plants and bank trolls.
> * No better than the scum-sucking Cassamitisis.
> * Tyre kickers and bottom feeders
> * The 'pits'
> * Sticking the boot in




* No better than the scum-sucking Cassamitisis.
* Tyre kickers and bottom feeders

To take advantage of someone in distress.  Property sellers offered only a portion of what a property (is/was) worth.  Not nice at all.  However as pointed out it's not just Townsville!  
The bitterness is understood by some.  
But business is business. 
As for the people who didn't have a nice property on the market when the **** hit the fan it is hard to understand the actual feeling now insulting some can be.   

The money is gone.  Regardless of being a tax payer the government can not and will not reimburse, not even part.  It would not be fair if it did and where would it end?  Its not the banks fault either.  Banks have depositors money at risk.  That's the depositor who gets laughable returns on their money.

It was Storm's fault but we can see why people ask the simple questions to storm investors after the fact.  Ofcoarse those questions, would be asked by yourself without the insight from strangers.  

Good luck,  
I sorry, ...  but I wouldn't be holding my breath of getting just a little or anything back.


----------



## bunyip (8 February 2009)

Solly said:


> The Sunday Mail reports that Andrew Symonds may have lost more than $1 million and Wally Fullerton Smith says he has lost everything...
> 
> The full story by Nick Leys and Michael Westlake is here;
> 
> http://www.news.com.au/couriermail/story/0,23739,25024254-952,00.html





Well that just about says it all......Wally Fullerton-Smith, a qualified financial planner, gets wiped off the slate by following his own investment advice!

It seriously questions Cary Ramm's views implying that financial planners are indispensable, and that we'd be fools to follow our own advice.
Carey also seems to place great importance on having a string of qualifications to your name, and years of experience across a broad spectrum of investment areas, if you're to have any hope of safely negotiating what he apparently sees as the minefield of personal investment.

Well Carey, I disagreed with you back then and I'll repeat that disagreement now....professional qualifications are a poor substitute for common sense.....I'll back common sense any day.
I reckon Wally Fullerton-Smith probably agrees with me.


----------



## Trevor_S (8 February 2009)

MR. said:


> Property sellers offered only a portion of what a property (is/was) worth.




A lesson then for all those who think they can demand what *they* think an asset is worth... it's only worth what someone else is prepared to pay.... lots of others are losing jobs etc and money isn't flowing and those that have been frugal and wondering when all the 

I don't see someone as purchasing the asset off another as anything more then a business transaction. If a buyer of RIO shares now buys off someone who paid $130, how do you view the buyer, as taking advantage  ? 

I take the contrary view to you, surely the person buying the asset should perhaps be seen as a lifeline ? After all they need a buyer and in these harder times, buyers aren't that plentiful.



MR. said:


> But business is business.




Amen.


----------



## pilots (8 February 2009)

bunyip said:


> Not only did they have the capacity to monitor every aspect of their investment as often as they liked, they also had the capacity to...
> 
> * Monitor the stockmarket and the world financial and economic situation as often as they liked (in fact the media did this for them every day)
> * Give specific instructions to their investment managers to reduce their exposure as the situation became increasingly risky.
> ...



Bunyip, Top post, this is all most the same as the tax avoidance scheme that was going around a few years ago, We had a friend that lost over $400 in that, they all got together and set up a fighting fund to take on the tax office, they lost again. When it is too good to be true, it is, and ALL SALES  people will ALWAYS SELL YOU, WHAT GIVES THEM THE BIGGEST COMMISSION.


----------



## bunyip (8 February 2009)

Trevor_S said:


> A lesson then for all those who think they can demand what *they* think an asset is worth... it's only worth what someone else is prepared to pay.... lots of others are losing jobs etc and money isn't flowing and those that have been frugal and wondering when all the
> 
> I don't see someone as purchasing the asset off another as anything more then a business transaction. If a buyer of RIO shares now buys off someone who paid $130, how do you view the buyer, as taking advantage  ?
> 
> ...



Trevor

That's a good point about bargain hunters picking up shares at discounted prices after they've had a big fall. Nothing immoral about that....it's just business. When buying anything, you buy as low as you can.

Matter of fact I'd be surprised if our friend Mash hasn't done exactly the same thing herself with shares on various occasions.
No point asking her though......she avoids those confronting questions.


----------



## Garpal Gumnut (8 February 2009)

Let us not forget the many good Australian men and women in their 60's and 70's forced to go back to work to try and extricate themselves from this debacle.

The majority of them have been self funded retirees who wouldn't even know where a centrelink office was situated.

Financial Planners have to take the blame for their circumstances.

The industry is a joke.

If you don't believe me click on this thread on what the exams are like to become a Financial Planner.

https://www.aussiestockforums.com/forums/showpost.php?p=395356&postcount=95

gg


----------



## Julia (8 February 2009)

bunyip said:


> Well that just about says it all......Wally Fullerton-Smith, a qualified financial planner, gets wiped off the slate by following his own investment advice!
> 
> It seriously questions Cary Ramm's views implying that financial planners are indispensable, and that we'd be fools to follow our own advice.
> Carey also seems to place great importance on having a string of qualifications to your name, and years of experience across a broad spectrum of investment areas, if you're to have any hope of safely negotiating what he apparently sees as the minefield of personal investment.
> ...



I read this article in today's Sunday Mail in disbelief.   How could a so called professional financial planner not have seen what was happening??

Moreover, from the same paper:


> Meanwhile, three of the former Storm Financial advisers wiped out by the collapse of the company were picked up last week by Sunshine Coast-based Infocus Money Management.
> Infocus founder Darren Steinhardt employer former Storm advisers Bob Jones from Storm's Redcliffe office, Trevor Benson from Nundah, and Wally Fullerton-Smith - who sold his Gold Coast business to Storm two years ago - after "extensive" checks, satisfied they were victims of the Storm machine.




Victims?   Perhaps this is a description that can be applied to Storm's uninformed clients, but for a professional financial planner to be considered a victim beggars belief.


----------



## Pindibog (8 February 2009)

Julia said:


> I read this article in today's Sunday Mail in disbelief.   How could a so called professional financial planner not have seen what was happening??
> 
> Moreover, from the same paper:
> 
> ...




Begs the question, What did they know or believe with regards to Storms agreements with the Bank that they too would put themselves in such a position? They do know better!


----------



## Solly (8 February 2009)

Garpal Gumnut said:


> Let us not forget the many good Australian men and women in their 60's and 70's forced to go back to work to try and extricate themselves from this debacle.
> 
> The majority of them have been self funded retirees who wouldn't even know where a centrelink office was situated.
> 
> ...




gg,  I don't know if the industry is a complete joke but it sure has a few clowns in it as evidenced by the recent events. I use a FP to assist me in certain strategies. I have diverse interests and I do not rely solely on the income stream of my investments to sustain me. I don't mind paying for advice, I pay for laywers, counsels, accountants, etc to assist me with my lifestyle.

These people are far smarter than me in their areas of expertise. I'm not interested in evasion or avoidance or infringing Part IVa of the tax act or off shore havens, double blind trusts, etc. I don't mind paying my FP for qualified advice, it spreads the wealth around, he's got a family as well to support. But I never agree to proceed with a strategy unless I'm 100% confident that it is suitable for my circumstance and I'm totally responsible for green lighting it.

There's absolutely no point being the richest man in the "village", the villagers resent you and it leaves you lonely and hollow. I'm only a recent visitor to this forum and really only started commenting after friends of friends were slightly impacted by the Storm issue and then I found others impacted to a much larger extent.  I'll probably disappear from here soon after it all starts to settles down. I usually like to move on after a while, I like change, I'm on a "sabbatical" at the moment and will soon have other interests to concentrate on but have enjoyed the commentaries here.

I don't know if ASIC's RG 146 has ever been discussed here, but if you have some spare time give it a read

Here's an extract of some sections.

RG 146.1 We have set minimum standards for the training of advisers. By setting and
enforcing these training standards, we aim to:
(a) protect consumers of financial advice by ensuring that those who
provide the advice are competent to do so. Retail clients generally do
not have the resources or expertise to assess whether their adviser has
an appropriate level of competence to provide financial advice. It is
important for ASIC to set training standards that ensure a level of
competence;
(b) help licensees comply with their legal obligations to ensure that they
and their representatives are adequately trained and competent to
provide the services covered by their AFS licence. Under the
Corporations Act, licensees must adequately train and supervise their
representatives, and must themselves be competent; and
(c) help training and education providers and professional and industry
associations understand our regulatory requirements, so that they can
develop appropriate training courses and standards.
 © Australian Securities and Investments Commission August 2008  used with permission

The average Aussie takes you at face value, so anything that attempts to help to protect consumers by ensuring that those who provide advice are competent can't be a bad thing. Nothing's perfect but at least it's an aim covered by legislation. The people I know who have come unstuck with Storm realise that they had some responsibility for the outcome. Let's face it we've all made less than positive decisions for ourselves in life, as long as they don't turn out fatal, there's always an avenue to seek a remedy and recover to an acceptable extent. 
Riches and wealth doesn't always mean mega amounts of fiat money....


----------



## swazee (8 February 2009)

January 20, 2009 11:00pm
FAILED investment group Storm Financial allegedly pumped oxygen on 300 or more clients to raise levels of enthusiasm during extended seminars.
The Queensland company, which collapsed this month, also purportedly used listening devices to monitor conversations in private rooms used for one-on-one consultations with prospective investors.

Perth-based financial planner Cameron Paul alleged yesterday that Storm executives, including founder Emmanuel Cassimatis, proudly revealed the bizarre inner workings of the company's Brisbane office about two years ago.

Mr Paul said he was shown the oxygen tanks used during the seminars and Mr Cassimatis personally told him about the use of bugs to listen in on clients.

Mr Paul, a director of Momentum Planning, had been approached by Storm to form a joint venture partnership to give the then fast-growing Townsville-based company a foothold in Western Australia.

But Mr Paul said the two firms never merged because he found Storm's business practices and client ethics troubling, likening it to a cult. 

"We were absolutely shocked," Mr Paul said.

Mr Cassimatis did not return calls yesterday.


I knew they were slick but this is truely unconscionable......


----------



## Ijustnewit (8 February 2009)

bunyip said:


> Not only did they have the capacity to monitor every aspect of their investment as often as they liked, they also had the capacity to...
> 
> * Monitor the stockmarket and the world financial and economic situation as often as they liked (in fact the media did this for them every day)
> * Give specific instructions to their investment managers to reduce their exposure as the situation became increasingly risky.
> ...



A while ago you told/advised me to get on with life and get over this. Well take some of your own medicine and stop "stirring the pot" You and your other experts/naysayers/fingerpointers ect.. on here hide behind a computer facade of self endorsed judgement of all posters before you and you just can't wait to chew up anyone that doesn't live up to your self made standards , obvisouly with little else to do..other than to see who bites . Well myself and i'm sure others are growing tired of your game.As someone else quoted "well it's been interesting"  Well i'm also sick of bittin' and tired of fightin' I hope your life continues to be one never ending success story(yeah i bet)


----------



## nomore4s (9 February 2009)

Julia said:


> I read this article in today's Sunday Mail in disbelief.   How could a so called professional financial planner not have seen what was happening??
> 
> Moreover, from the same paper:
> 
> ...






Pindibog said:


> Begs the question, What did they know or believe with regards to Storms agreements with the Bank that they too would put themselves in such a position? They do know better!




Most financial planners are imo no more than salespeople. Most of them truly don't understand the risks involved with some of the financial packages they sell. Like most salespeople they are to an extent brainwashed about the products they sell and are driven by the commissions/bonuses they receive for selling these products.

You must remember we have just been through one of the best bull runs ever as well as a strong period of economic growth (which we now know was funded on the back of dodgy economic practices & excessive leverage) and most of these FP's wouldn't have seen a true stockmarket crash and economic recession on the level that we are now seeing. My bet is if you had asked them 2-3 years ago if what we are seeing now was possible they would of all said no!
Same as all the people in the US selling subprime loans and CDO's they did not understand what they were selling and wouldn't have thought it could end like it has.

These FP's would have seen the returns some of the clients were getting and jumped in not wanting to miss out. The fact is they, like thier clients did not understand the risks involved and as a consequence are caught up in the cr@p as well.


----------



## hart2hart (9 February 2009)

I started reading this thread some weeks ago in the hope of picking up some useful advice. I am not sure what.

We already know that we were stupid and naive and that "something that seems to be too good to be true usually is". We also know that what was always a pretty meagre nest egg at best is now a non-existent one. It is pointless wasting any energy getting upset or angry. 

We were directed to Storm by our then financial adviser in 2006 and stupidly let them make our decisions. No matter how many times we said we were uncomfortable with the amount of debt we had (with no assets) we were always talked out of it. Yes, we feel pretty weak and silly about that too.

Even though we phoned and emailed, they stopped communicating with us in December and left MacQuarie Bank to chase up the loan which was quickly turning in to a negative due to the interest. We now have an argument with the bank as they did not action a letter emailed prior to Xmas asking that the loan was paid out by our cashed up share portfolio CMT until January 6th.

We are trying to be proactive, although we are starting from a pretty weak base. No matter how many skills you have, trying to get employment at 65 in a shrinking job market is not easy.

We really do need some advice on what to do. No financial planner is going to be interested in us as we really have nothing left to invest. I guess we are down to survival now. What are other people doing?  On the bright side we are not either flooded out nor surrounded by bushfires!!!


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## bunyip (9 February 2009)

Ijustnewit said:


> A while ago you told/advised me to get on with life and get over this. Well take some of your own medicine and stop "stirring the pot" You and your other experts/naysayers/fingerpointers ect.. on here hide behind a computer facade of self endorsed judgement of all posters before you and you just can't wait to chew up anyone that doesn't live up to your self made standards , obvisouly with little else to do..other than to see who bites . Well myself and i'm sure others are growing tired of your game.As someone else quoted "well it's been interesting"  Well i'm also sick of bittin' and tired of fightin' I hope your life continues to be one never ending success story(yeah i bet)




I've never claimed my life is a never-ending success story. I've had my successes but I've taken some hits as well. Any time I took a hit I admitted my part of the responsibility for it, picked up whatever pieces I could, and moved on.

Yes, I have better things to do than post on this forum, and most of the time I'm out doing them. This forum is nothing more than a diversion for me - a bit of a social club if you like where I get to talk to other posters about subjects of mutual interest. 
If you check out my average daily number of posts you'll see that I'm a low volume poster on here.

Yes, I told you to get on with your life and get over this. And I'll repeat that advice now. If you are, as you say, _'sick of bitin' and tired of fightin'_, then stop doing it!
Instead of wasting your mental energy by having a lash at me, put your energy instead into mapping out your future. It may not be quite as bad as you think.
Depending on your age, at worst you could be living in rented accommodation on the pension. Unpalatable though that may sound, you'll have enough food to eat, a secure place to live, and your health care needs will be catered for. 
I know a handful of people in this situation....they live frugally but nevertheless quite happily, with friends, social and recreational activities.
At best - and again depending on your age - you'll recover from this and still end up living a pretty good life.

But you won't achieve any of this is you waste your time trolling through this forum and swinging punches at people like me.
Direct your anger and your mental energy towards more productive pursuits. It's up to you.


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## Glen48 (9 February 2009)

10 YRS ago I went through a divorce like most others and lost about $1m after working to build up assets, now the whole World is going through a divorce and a lot will end up like Storm victims due to the down turn, so a lot of people who like to think they are high flyers will be brought to their knees.
All up can do is work out what you have and look at other income producing avenues other than trying to get a job.
I have my hopes pinned on Gold.


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## bunyip (9 February 2009)

hart2hart said:


> I started reading this thread some weeks ago in the hope of picking up some useful advice. I am not sure what.
> 
> We already know that we were stupid and naive and that "something that seems to be too good to be true usually is". We also know that what was always a pretty meagre nest egg at best is now a non-existent one. It is pointless wasting any energy getting upset or angry.
> 
> ...




Thanks for your very honest post.
Although I've been very forthright in my views, I feel genuinely sorry for the predicament you and other Storm victims find yourselves in.


Your first port of call is obviously to check with Centrelink to see what you're elibible for. Perhaps you've already done that.

You mention that you're 65 and it's hard to get jobs.
On my morning walk each day I sometimes call in and have a yarn to a 72 year old man who hires a garage where he makes wooden stands for fish tanks. He learned the skill through a TAFE course in carpentry, says there's ready demand for what he makes, and it provides a handy little money- making sideline to supplement his pension. He works 3 or 4 hours a day, whatever suits him.
It struck me as a handy way for a pensioner to make a few extra bob, or just provide him with an interesting hobby that keeps him active in body and mind.
I'm sure there are other such backyard industries that could be pursued by older people on a part time basis. It might be worth checking with TAFE to see what courses they offer.
Just a thought.........


----------



## joeyr46 (9 February 2009)

harsh but very good advice not always what we want to hear when things go wrong, I've been lucky to work with a lot of people who don't play the blame game but take responsibility and address the problems as best they can given the circumstances.When things are good or bad I often think of this saying not sure where it comes from  except attributed to Anon, (seems he wrote a lot)
Yesterday's history
Tomorrows a mystery
Today is a gift that's why it's called the present


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## hart2hart (9 February 2009)

bunyip said:


> Thanks for your very honest post.
> Although I've been very forthright in my views, I feel genuinely sorry for the predicament you and other Storm victims find yourselves in.
> 
> 
> ...




I am embarrassed that you feel sorry for us. Please don't, we at least have our lives, our health and a future unlike the bushfire victims.

Thanks for your suggestions. 

The good news is that I have obtained a small part time job which had 80 applicants. Just need a few more now. The other member of the team is getting a Taxi licence.


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## Julia (9 February 2009)

hart2hart said:


> I am embarrassed that you feel sorry for us. Please don't, we at least have our lives, our health and a future unlike the bushfire victims.
> 
> Thanks for your suggestions.
> 
> The good news is that I have obtained a small part time job which had 80 applicants. Just need a few more now. The other member of the team is getting a Taxi licence.




With an attitude like you're showing here, any employer will be lucky to have you.  I'm not surprised you won the job from 80 applicants.

I wish you every possible good luck, though I think you will make your own luck.


----------



## bunyip (9 February 2009)

hart2hart said:


> I am embarrassed that you feel sorry for us. Please don't, we at least have our lives, our health and a future unlike the bushfire victims.
> 
> Thanks for your suggestions.
> 
> The good news is that I have obtained a small part time job which had 80 applicants. Just need a few more now. The other member of the team is getting a Taxi licence.




Over the years I've read some wise words that have stuck in my mind. Here's an example...

_*The measure of a man or woman is not what happens to them in their lives, but how they react to it.*_

You appear to be reacting to your situation with immense strength of character....no crying over it, no misdirected anger, no trying to put all the blame on someone else. You're seeing the positives and you're getting on with life by making the best you can of a bad situation.
I'd hope that I'd be capable of following your example in a similar situation.

I can see you'll get over this and put it behind you. I really do wish you all the best.


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## boomai (9 February 2009)

swazee said:


> January 20, 2009 11:00pm
> FAILED investment group Storm Financial allegedly pumped oxygen on 300 or more clients to raise levels of enthusiasm during extended seminars.
> The Queensland company, which collapsed this month, also purportedly used listening devices to monitor conversations in private rooms used for one-on-one consultations with prospective investors.
> 
> ...




Hi, This is my first post as I've only just joined this forum.
As an ex-empoyee and ex-storm investor  (yes.. I've lost it all too) I can say that the above quote is totally untrue.  The first Air-Con unit in Townsville did have a oxygen enhancing mechanism.. (it pumped more fresh air from outside instead of re-cycling stale air and was supposed to increase Oxygen content by .5%)  It was a supplement much like all the sweets and tea and coffee that were doled out to try and keep people awake through long boring seminars.
There were no oxygen cylinders in Storm offices nor were there hidden microphones or recorders. 

It's taken me a couple of days to catchup on 49 pages of forum.
I have found some good inspiring information in these pages.

I obviously know a lot about Storm, their methods etc.
I'm not pro-storm.
The fault for my position has been 100% mine for not taking adequate precautions.

What has caused 500+ investors to go to the wall is the stock market falling by 52% whilst being heavily margined.. also.. some blame here can go to 80% to Storm for bad advice and 20% (in the case of clients whose margin loans (ML) were with Colonial) to CBA.

In general those clients who had ML's with Macquarie were sold down with about 20% of their stock intact.. still not enough to pay back their house loans but far better than negative equity positions.

A saying banted around was "what you can measure, you can manage".

Storm measured their clients LVR's.

But Storm did not manage their clients LVR's.

Storm showed that they could manage (limit) LVR's when in early October as they had ML clients sign documents authorising them to switch 50-75% of clients funds to cash to reduce LVR's.

Around October 17 Storm had these clients to sign a new document to switch 100% funds to cash.  Unfortunately Storm didn't pass these requests on to the Margin Lender.  Some clients who asked were told that it was in the hands of their margin lender.


I find it hard to come to terms with the lies I've believed, the bad advice that I have taken, and my family who I have let down.

I may rant a little more.. but as pointed out.. doesn't achieve results.
Thanks.


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## pilots (9 February 2009)

Boomai, I was in Brisbane last year, we meet up with a couple who's son drove a truck for a gas company, he told us that he had delivered oxygen to some clubs and casinos, as well as some offices in the town center. They did say anything about storm, but this is going on in some places.


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## shibby (9 February 2009)

boomai said:


> In general those clients who had ML's with Macquarie were sold down with about 20% of their stock intact.. still not enough to pay back their house loans but far better than negative equity positions.
> Well bad luck prevailed there in my case
> 
> Storm measured their clients LVR's.
> ...




Please tell me why, particularly when I repeatedly asked and asked to be sold up, why they wouldn't sell us up - 
I am one of many who want to know - or should I say need to know the answer to this question.

I wish you all the best I really do. I am assuming you have youth on your side so just keep plugging away, one day at a time. 
I appreciate that you have come forward it is a very brave thing you have done


----------



## Neddy (9 February 2009)

Boomai: thanks for the post – would you kindly clarify something for me?    I am aware of the storm letter dated 8-October advising clients to convert to 100% cash, and I am aware that many clients immediately signed and returned to Storm documents authorising this action, but I am unclear about why this did not happen.    With the benefit of some insider knowledge, can you explain why EC himself made the recommendation in writing but then apparently failed to act as per his own recommendations when instructed to do so?    Did he sit on the instructions to sell, or did the bank somehow prevent it from happening?

The best of luck to you in tough times....


----------



## bunyip (9 February 2009)

It took Storm long enough to realise that cash was the place to be.....by October 8 the market had already plunged 36%
It would surely have been prudent to jump ship long before the market fell that far.

This outfit seems to have been making up its risk management strategy as it went along.


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## Gerkin (9 February 2009)

Boomai
I am on your side however I hope that you have 1) posted from an IP address that cant be tracked and 2) used a fake email address to sign up.

I am only pointing this out as I know how restrictive employment contracts are in this industry, and under my contract your post could get myself in the sh*t.

Please reconsider what you post and even reconsider what your employment contract says.

My current and my previous contracts are quite restrictive in all areas including after I finish working for the firm.

Please note I am in now way connected to Storm.


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## bunyip (9 February 2009)

Boomai

If you can answer this without putting yourself at risk, then I'd appreciate your insights.

I said in an earlier post that Storm seem to have been making up their risk management strategy as they went along.
I'm happy to be corrected if I'm wrong on that point. But to me it almost beggars belief that a professional financial planning firm would wait until the market fell more than 36%, before they decided it was time to move into cash.
Even then, it appears that they didn't follow through on that decision.
Is there something I'm missing here, or did they indeed make up their risk management as they went along?
If they didn't, then can you tell us exactly what their risk management parameters were?


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## Nick Radge (9 February 2009)

If you have a Statement Of Advice (SoA) that states they will sell assets then anything otherwise is discretionary trading. Discretionary Trading is *THE* death of any broker or financial planner. I cannot stress this enough. If you can prove that they have not followed the agreed advice, for whatever reason, then they will answer to ASIC and I can assure you that ASIC will come down on them like a tonne of bricks.

Secondly, the 'basis of advice' is also an important issue that is heavily scrutinized. If they have pages of disclaimers and risk warnings yet failed to build a 'realistic' risk buffer into their assumptions, then their 'basis' for advice may be under threat. By this I mean that this bollocks LVR of 50% as 'industry standard' is not good enough because it suggest that the advisor has no historical perspective and has therefore not shown enough knowledge to form the basis of advice in the first place. This industry standard 50% LVR that brokers are using now is nothing but a cheap scapegoat. Why place 50 pages of disclaimers and risk warning in an SoA yet build a portfolio without any buffer? We've had enough historical examples to know that sh*t hits the fan and that 50% LVR is not enough. If they are true industry professionals they would know this stuff.

Unfortunately the issue here is that even if you successfully prove your case it's to a lost cause. The money has more than likely gone. I'm not sure that there is enough cause for claims to go through to CBA. I know for a fact that many major insto's are settling claims on the quiet to keep them out of the media, but they have some firm financial backing, which I don't think is apparent here.


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## Solly (9 February 2009)

boomai said:


> ........Around October 17 Storm had these clients to sign a new document to switch 100% funds to cash.  Unfortunately Storm didn't pass these requests on to the Margin Lender.  Some clients who asked were told that it was in the hands of their margin lender.
> 
> 
> I find it hard to come to terms with the lies I've believed, the bad advice that I have taken, and my family who I have let down.
> ...




boomai...Have you considered calling ASIC on 1300 300 630 ??

I believe that you should seek advice, you may be covered under the Corporations Act for alerting of this behaviour...


----------



## Solly (9 February 2009)

I've just checked the "Ask E&J" tab on their website.

I had a look at this question and response regarding an element of their strategy, here's the link.

http://cassimatis.com.au/FAQRetrieve.aspx?ID=35781

I'm unclear about what they mean when they state:
...."We don’t believe our strategies were risky in normal circumstances". What do they mean by "normal circumstances"..?


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## pilots (9 February 2009)

Just watched corners, was that right, that someone had 1.8Mil loan against his house??


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## Pindibog (9 February 2009)

pilots said:


> Just watched corners, was that right, that someone had 1.8Mil loan against his house??




I think it was 300 for house and then 1.5 margin loan or around abouts. They said he used his super? How is that so when he did not look of retirement age. Oh his wage was around $50, 000 a year. Australian version of subprime!


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## pilots (9 February 2009)

Yes every one was happy when it was on its way up, but the boot is on the other foot now. All the sales people will now be back at work looking for the next lot of people to rip off. Storm is just one of the companies that will crash this year.


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## bunyip (10 February 2009)

The two questions I posted to the Cassamatis website haven't been answered, and I doubt if they will be.
They've said they reserve the right to select the questions that will be published to the website. On that basis you'd have to think they'll select only those questions they consider easy, while avoiding any confronting questions that really put them on the line.

I asked them..........

1. You have repeatedly claimed that this event was 'unprecedented'. How can you have forgotten the precedent set by the 1987 crash which was much more brutal than the current crash in terms of the speed of the plunge?
Current crash....down approximately 50% over 12 months
1987 crash.....down 25% in one day and approximately 50% in 3 months

2. You've defended your actions of putting new clients into a plunging market, by stating "You buy stocks when they're cheap".
Given your decades of involvement in the financial markets, can you explain your lack of understanding of the suicidal risks of buying plunging stocks....how could someone of your experience fail to realise that 'cheap' is likely to become much cheaper when the market is sinking rapidly?

Maybe I'll send in another question asking why they waited until the market was down more than 36% before they decided to go to cash. And having made that decision, why they didn't follow through on it.
Then again, maybe I won't waste my time.


----------



## Solly (10 February 2009)

boomai said:


> Hi, This is my first post as I've only just joined this forum.
> .....As an ex-empoyee and ex-storm investor  (yes.. I've lost it all too) I can say that the above quote is totally untrue.  The first Air-Con unit in Townsville did have a oxygen enhancing mechanism.. (it pumped more fresh air from outside instead of re-cycling stale air and was supposed to increase Oxygen content by .5%)  It was a supplement much like all the sweets and tea and coffee that were doled out to try and keep people awake through long boring seminars.
> There were no oxygen cylinders in Storm offices nor were there hidden microphones or recorders.
> .




boomai, there was a reference in an earlier post to an article in the Herald Sun on 21 Jan by Anthony Marx that reported;

"Perth-based financial planner Cameron Paul alleged yesterday that Storm executives.....revealed the bizarre inner workings of Storm's Brisbane office .... "

Mr Paul said he was shown the oxygen tanks used during the seminars and that Mr Cassimatis personally told him about the use of room bugs to listen in on clients."

Here's the article, 
http://www.news.com.au/heraldsun/story/0,21985,24940447-664,00.html


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## Julia (10 February 2009)

Pindibog said:


> I think it was 300 for house and then 1.5 margin loan or around abouts. They said he used his super? How is that so when he did not look of retirement age. Oh his wage was around $50, 000 a year. Australian version of subprime!



I also wondered about using his super.   And how could he - or anyone - say they didn't think this was risky which is what he seemed to be suggesting.


----------



## Julia (10 February 2009)

bunyip said:


> 2. You've defended your actions of putting new clients into a plunging market, by stating "You buy stocks when they're cheap".
> Given your decades of involvement in the financial markets, can you explain your lack of understanding of the suicidal risks of buying plunging stocks....how could someone of your experience fail to realise that 'cheap' is likely to become much cheaper when the market is sinking rapidly?




Storm weren't the only people doing this.   Gerry Harvey, interviewed as part of last night's 4 Corners programme, said he has lost about 1.5 billion (that's billion with a B) by buying stocks in his own company and others as they fell.

Don't suppose too many people will take too much notice of his predictions that this GFC will all be over soon, maybe in a month or two!


----------



## Solly (10 February 2009)

I've again looked at the media release on 30/1/09 by Wilkinson Media, 

http://www.cassimatis.com.au/Storm_300108.pdf

And I find it "interesting" that their inclusion of Justice Greenwood's injunction hearing on 24th December 2008 quotes....

“I am satisfied that solely for interlocutory purposes, Storm has demonstrated a
sufficient likelihood of success in terms of Australian Broadcasting Corporation v O’Neill
demonstrating that the statement as to sole management of the margin loan accounts and
instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading
or deceptive or likely to mislead or deceive”.

But omits the next sentence in Paragraph 43 of the Reasons for Judgment in this matter by Justice Greenwood, which is, 

"Of course, the ultimate position must be tested at trial where the evidence will be closely examined and findings reached on all aspects of the controversy".


----------



## Steve Borden (10 February 2009)

With regard to the superannuation that was 'lost', perhaps it was rolled over (as were others) into the CFS FC PersSuper - CFS Geared Share (APIR Code FSF0311AU). The fund has an internal gearing benchmark of 55% and had a negative return to 31/12/08 of approx 60%.


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## donteventryit (10 February 2009)

Steve Borden said:


> With regard to the superannuation that was 'lost', perhaps it was rolled over (as were others) into the CFS FC PersSuper - CFS Geared Share (APIR Code FSF0311AU). The fund has an internal gearing benchmark of 55% and had a negative return to 31/12/08 of approx 60%.




Actually, Storm have previously recommended to clients that met preservation rules for supernannuation, to withdraw their superannuation and gear it up in their own name. 

I have heard that a client was not even disclosed important information regarding the withdrawal of superannuation ie lump sum tax, the benefits of superannuation environment in comparison to personally held investments ...

It was nothing as tricky as investing superannuation funds into a geared managed fund ... It was simply withdrawn and geared in their own names.


----------



## Steve Borden (10 February 2009)

Agreed, but for those say below the age of 55 who had to remain in the superannuation environment some were rolled into the Geared Share Fund. This effectively achieved the same gearing strategy for assets inside and outside of super.


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## Solly (10 February 2009)

Steve Borden said:


> With regard to the superannuation that was 'lost', perhaps it was rolled over (as were others) into the CFS FC PersSuper - CFS Geared Share (APIR Code FSF0311AU). The fund has an internal gearing benchmark of 55% and had a negative return to 31/12/08 of approx 60%.




Steve one ex client talked about an MLC branded geared super investment. I can't recall the exact details but I'm sure that they expressed some alarm about the fees to change over. If I see them again when I'm  back in BNE I'll ask for more info.


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## bunyip (10 February 2009)

Julia said:


> Storm weren't the only people doing this.   Gerry Harvey, interviewed as part of last night's 4 Corners programme, said he has lost about 1.5 billion (that's billion with a B) by buying stocks in his own company and others as they fell.
> 
> Don't suppose too many people will take too much notice of his predictions that this GFC will all be over soon, maybe in a month or two!




I guess it's a bit more understandable in Gerry Harvey's case, although still almost unbelievably foolish. Gerry has plenty of dough and probably thought he'd take a bit of a punt. But at least he wasn't punting with other peoples money, as Storm was. Storm were professional investment advisers, financial planners, manages of other peoples investments, and supposedly experienced market players.....they should have known better.

I wonder why Gerry would go on a nationwide TV program and make that sort of admission.

He'd be trying to sound upbeat with his prediction of a quick end to the financial crisis, obviously attempting to instil consumer confidence so as to speed up the recovery process.
I doubt if many people will swallow it.


----------



## awg (10 February 2009)

boomai said:


> Hi, This is my first post as I've only just joined this forum.
> 
> 
> Around October 17 Storm had these clients to sign a new document to switch 100% funds to cash.  Unfortunately Storm didn't pass these requests on to the Margin Lender.  Some clients who asked were told that it was in the hands of their margin lender.
> ...




If what you say is provable, I believe you would have a watertight legal case against, whoever it was that failed to follow your instructions.

I would certainly find out as much as possible about the circumstances surrounding that non action, including writing to the liquidators, asic, cassimitis website.

It seems to me you would have a stronger case than others and may be able to sue, personally.

As i have written before, I ALWAYS conduct my financial affairs be return receipt email, FOR THIS EXACT REASON, I wont bore you with the details, but it just amazes me how many ****-ups have taken place ( at least half a dozen, which the organisation I dealt with have had to rectify, cause of my emails...at first they tried to wriggle out.

Another thing is I try to only deal with the biggest, most secure companies...they still stuff things up, but they have less chance of going broke, and usually are prepared to settle on the quiet, especially after I threaten to complain to ASIC or APRA.

Good Luck


----------



## boomai (10 February 2009)

shibby said:


> Please tell me why, particularly when I repeatedly asked and asked to be sold up, why they wouldn't sell us up -
> I am one of many who want to know - or should I say need to know the answer to this question.



I'm sorry shibby, I can not tell you why.  I don't know why.  This was obviously a high level management decision. Had I been privvy to this information, I'd have known to insist on the switch to cash instead of believing blindly as other clients.



bunyip said:


> Boomai
> 
> Storm seem to have been making up their risk management strategy as they went along.
> I'm happy to be corrected if I'm wrong on that point. But to me it almost beggars belief that a professional financial planning firm would wait until the market fell more than 36%, before they decided it was time to move into cash.
> ...




I may have misled you.. I'm not a financial advisor and have no direct knowlege of Storm's risk management.. I only saw what I saw.



Solly said:


> boomai...Have you considered calling ASIC on 1300 300 630 ??
> I believe that you should seek advice, you may be covered under the Corporations Act for alerting of this behaviour...




I have talked to ASIC, however I didn't mention the above behaviour to them.
I believe that those details, however are already known to ASIC though.

I think EC sees "normal circumstances" = bull market.
He didn't believe that the market could fall this far again.



Solly said:


> boomai, there was a reference in an earlier post to an article in the Herald Sun on 21 Jan by Anthony Marx that reported;
> 
> Mr Paul said he was shown the oxygen tanks used during the seminars and that Mr Cassimatis personally told him about the use of room bugs to listen in on clients."




This is statement is untrue.  There were no bugs, there was no oxygen.
Though I can't deny that there was some rarefied atmosphere at times.



awg said:


> If what you say is provable, I believe you would have a watertight legal case against, whoever it was that failed to follow your instructions.
> 
> I would certainly find out as much as possible about the circumstances surrounding that non action, including writing to the liquidators, asic, cassimitis website.
> 
> It seems to me you would have a stronger case than others and may be able to sue, personally.




Unfortunately.. (on closer reading) the document gives Storm the right to sell down to 100% at Storm's discretion.  I had mis-read the document and believed what I wanted to read.  Others assumed the same as me.

I have my suspicions as to why Storm didn't act on the switch documents.  I can't prove them though, and it may not be helpful to other clients if I could prove them.

The four corners program last night was interesting .. I feel sorry for the other poor storm losers out there.. but I feel more sorry for the poor blighters who have lost friends and family in the terrible bushfires in Victoria.


----------



## awg (10 February 2009)

Unfortunately.. (on closer reading) the document gives Storm the right to sell down to 100% at Storm's discretion.  I had mis-read the document and believed what I wanted to read.  Others assumed the same as me.

I have my suspicions as to why Storm didn't act on the switch documents.  I can't prove them though, and it may not be helpful to other clients if I could prove them.

.[/QUOTE]

above is a qoute from a post, sorry quote tags didnt work

#############################################################


A purported copy of this doc was posted on this thread.

If Storm withheld the ability to cash out on instruction, this is the worst thing I have heard so far.

I just cannot believe that Storm principles havent breached various Corporate regulations.

It is regrettable that the Company will be insolvent, and I strongly suspect the principles will also be broke, so that no money will be recoverable.

If they were smart, they will have set up relatives much earlier to now support them, but they dont sound smart enough


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## bunyip (10 February 2009)

Boomai

I assumed - apparently incorrectly - that you were a financial advisor with Storm.
What was your position with them?


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## swazee (10 February 2009)

A friend I know received this from the Financial Planners Association today:

"Whilst the FPA’s investigations continue, and I continue to be limited in what I can say about Storm specifically until those investigations are complete, what was abundantly clear from both our members and clients’ perspectives was this:

1.	Many clients were not familiar with margin lending, and did not realise the extent to which they are in debt. Some were not even aware they had received a margin call. 
2.	The highly leveraged strategy that was applied pushed the limits of clients' available resources, and beyond. Many clients had everything tied up in a geared strategy, with no appropriate exit strategy. 
3.	The age bracket of many clients is pre or post retirement. Having all their super, savings and assets tied up in the one strategy, with Loan to Value Ratios (LVRs) at 85% at age 65+, combined with a 45% drop in the value of shares, has indeed provided the perfect storm. 
4.	There appears to have been little attention given to client income and the capacity to repay debt, in some cases. 
5.	The fee structure was well above rates typically charged in the industry, up front and ongoing, supported by our recent research. 
6.	Clients signed each and every page of a 107 page SOA and yet were not aware of what they were signing up to. They feel embarrassed and guilty for this.  They are not sheeting home the responsibility entirely to Storm, but they do feel misled by ‘trusted advisers’. 
7.	The high levels of trust placed in Storm, and the faith that was placed in financial planners from Storm, has not delivered good outcomes for Storm, their clients, or our profession.

Some of the issues the FPA will be looking at include:

1.	Our annual compliance process to see where we can add questions that might provide warning signs at a much earlier stage of potential issues that might be looming of this nature; 
2.	A second layer of market intelligence beyond our SAQ process, from members, that allows us to receive information that we can act on in a safe and reasonable manner; 
3.	The role of gearing and margin lending, and assessing client tolerance for risk, to ensure our members work to avoid or prevent the use of aggressive strategies from emerging again where inappropriate; and also as part of the Government’s legislative work in this area; 
4.	The education of consumers around financial literacy, and their relationships with financial planners, which might include actions that can be taken when clients do not understand, or wish to discontinue recommended strategies.
We welcome your input as always, and encourage you to go to the blog to start the debate about where to from here.


----------



## Trevor_S (10 February 2009)

For those who missed the Four Corners Show on STORM

it's available on ABC TV's ivew, my ISP has iview unmetered, so I use it a bit.

http://www.abc.net.au/iview/#/view/337805


----------



## MR. (10 February 2009)

Julia said:


> Gerry Harvey, interviewed as part of last night's 4 Corners programme, said he has lost about 1.5 billion (that's billion with a B) by buying stocks in his own company and others as they fell.
> 
> Don't suppose too many people will take too much notice of his predictions that this GFC will all be over soon, maybe in a month or two!






bunyip said:


> He'd be trying to sound upbeat with his prediction of a quick end to the financial crisis, obviously attempting to instil consumer confidence so as to speed up the recovery process.
> I doubt if many people will swallow it.




I thought Gerry lost 1.5 million.  I thought big deal for someone like Gerry. 
I reviewed and you are right, he said he lost 1.5 BBBBBBBillion....

He did say in the interview and I quote:
"We are on the verge of the greatest boom mankind has ever seen"


----------



## Glen48 (10 February 2009)

G H shows how much talent you need to make money in boom times.
Selling goods at 28% interest is a not to hard, i reckon he will be one of the first to go under. 
As I said he got _the nothing to pay and hock you house_ to get deeper into debt scam up and running.


----------



## Pindibog (10 February 2009)

MR. said:


> I thought Gerry lost 1.5 million.  I thought big deal for someone like Gerry.
> I reviewed and you are right, he said he lost 1.5 BBBBBBBillion....
> 
> He did say in the interview and I quote:
> "We are on the verge of the greatest boom mankind has ever seen"




He came across terrible and I wondered if he was for real!! He must have a good support team around him. See how he laughed about loosing 1.5b. I am embarrassed about storm and he is telling the whole nation about his 1.5b mistake. Oh well I still have a billion he says???? I wish...


----------



## MR. (11 February 2009)

Glen48 said:


> G H shows how much talent you need to make money in boom times.
> Selling goods at 28% interest is a not to hard, i reckon he will be one of the first to go under.
> As I said he got _the nothing to pay and hock you house_ to get deeper into debt scam up and running.




That's the only way we are going to get back to the "Boom Times"  
Loads more debt, just what we need!.......

----------------

*1.5 billion sounds like a lot of money!!!!!!!!*
Gerry Harvey's wouldn't be full of **** would he?

GH claims in the interview, since the "down turn" he has spent 1.5 billion on buying Harvey Normal shares and others!

GH is the Chairman and Director of the company.
He needs to lodge a "Change of Directors interest notice" if he has bought more HVN shares!  But he has not lodged any notice recently.
http://www.asx.com.au/asx/research/...lts.jsp?searchBy=asxCode&allinfo=&asxCode=hvn

The last notice GH lodged according to the ASX was on the 3/3/08 and 13/3/08.  The last transaction took GH share holding up by 2 million shares to 171 million shares (round figures)
http://www.asx.com.au/asxpdf/20080313/pdf/3180lsrjxcxrxg.pdf

171 million shares, according to the ASX, GH owns. At todays $2- per share price takes GH holding to = $342 million.  At the hight of the market Harvey norman was worth $7- per share so that makes $1.2 billion. (Well that's got a "B" in it.)  

It appears that GH has stretched the truth a little. He has purchased shares on the way down but that was nearly a year ago!
He bought a total of 2,440,000 shares released in two statements in March 2008 totalling just $9.78 million with an "M" not a "B". 

*Does it sound lodgical that GH just spent 1.5 billion dollars on shares?  *

Not from where I'm sitting! No wonder he can laugh.
He must have alot of faith in the opposition because he is not buying Harvey Norman!  

and you trust these directors with your money?????
You'd gota wonda? 
Where does it end..................

Happy to be corrected!  
Looks like you're right there Glen48, sounds like they might "be going under"


----------



## nomore4s (11 February 2009)

lol MR.

Well he must be delusional if he thinks we are on the verge of the greatest boom mankind has ever seen, what did we just have then?


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## Solly (11 February 2009)

*"Storm workers in limbo due to probe 
Ex-Storm staff being turned away" *

Story by Vishal Teckchandani from Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/5746.htm

Some firms wont hire ex-staff until ASIC & FPA investigations are completed.


*"Write-downs push Challenger to 10-year low"*

Story by Colin Kruger in the SMH;

http://business.smh.com.au/business/writedowns-push-challenger-to-10year-low-20090210-83hl.html

The company had exposures to MFS, Allco Finance Group, ABC Learning,  Babcock & Brown & Storm Financial.


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## Aussiejeff (11 February 2009)

Pindibog said:


> He came across terrible and I wondered if he was for real!! He must have a good support team around him. See how he laughed about loosing 1.5b. I am embarrassed about storm and he is telling the whole nation about his 1.5b mistake. Oh well I still have a billion he says???? I wish...




I just wish he would stop assaulting my eyes & ears with 1,000,000 *LOUD*, *ANNOYING*, *MINDLESS* TV ads every day.

Hey, now there's a thought. Maybe those endless [size=+2]"Hurry, Sale Ends THIS Weekend!!!!"[/size] ads are costing him BIGtime.

Poor chap. 

I'll shed a tear when he folds...

:arsch:


----------



## GumbyLearner (11 February 2009)

Aussiejeff said:


> I just wish he would stop assaulting my eyes & ears with 1,000,000 *LOUD*, *ANNOYING*, *MINDLESS* TV ads every day.
> 
> Hey, now there's a thought. Maybe those endless [size=+2]"Hurry, Sale Ends THIS Weekend!!!!"[/size] ads are costing him BIGtime.
> 
> ...




I heard there are some pretty good package travel deals to Majorca this time of year! MUHAHAHA! :


----------



## Trevor_S (11 February 2009)

Aussiejeff said:


> I just wish he would stop assaulting my eyes & ears with 1,000,000 *LOUD*, *ANNOYING*, *MINDLESS* TV ads every day.




Well stop watching mindless TV    I don't think I have watched TV for about 2 - 3 years, aside from a bit of stuff I download via channel BT of course 

That aside, I thought Gerry was refreshingly forthright and open.  I much appreciate that then a slick backed spin doctor or a snakeoil charmer (Eddy Groves, Cassamatis et al)  I don't think his quoted $1.5Bil loss is 1. realised 2. restricted to HN shares alone and 3. if he is right, his $1.5Bil loss will turn into a superb profit in a decade or so.

A bit like a few snide comments about Warren Buffets paper loss, if WB is right, his paper loss will turn into an enormous profit in a decade or so.


----------



## Aussiejeff (11 February 2009)

Trevor_S said:


> Well stop watching mindless TV    I don't think I have watched TV for about 2 - 3 years, aside from a bit of stuff I download via channel BT of course




Oh, you poor thing! How could you possibly know ANYTHING about ... ANYTHING? if you haven't kept up 24/7, 365/1 with the Idiot Box?


----------



## Trevor_S (11 February 2009)

Aussiejeff said:


> Oh, you poor thing! How could you possibly know ANYTHING about ... ANYTHING?




I'll have you know,I know alot about nothing


----------



## willemrt (11 February 2009)

carey ramm said:


> Cuttlefish i think u may be catching on to some of the "irregularities" that are poping up in the loan documentation of many clients.
> 
> I have seen documents for loans whose validity is clearly in question.
> 
> I would urge all storm clients to request copies of their loan applications from their home loan and margin loan providers and check for "irregularities" and if unsure what they are looking for contact a lawyer (i am aware that both slater and gordon and connolly suthers are asking all the people who have contacted them to do this).




Looks like Slater and Gordon also think some of those documents might not be up to scratch.

http://www.moneymanagement.com.au/a...BOQs-links-to-failed-group-emerge/437676.aspx


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## pilots (11 February 2009)

Look guys, it WON'T matter what you find they have done wrong, THE MONEY IS GONE. You can huff and puff all you want, you may get your day in court, no one will go to jail, and you will waste more money.


----------



## bunyip (11 February 2009)

pilots said:


> Look guys, it WON'T matter what you find they have done wrong, THE MONEY IS GONE. You can huff and puff all you want, you may get your day in court, no one will go to jail, and you will waste more money.




I have a similar view - the loot is gone, no matter what the outcome of any court case. 
Cassamatis may or may not end up in the slammer for a year or two, but my guess is that he won't.

When the dust finally settles down it's the law fims who will be wearing the biggest smiles. And maybe Cassamatis as well.....I'll be very surprised if he hasn't done an Alan Bond by squireling away several million dollars in untouchable assets.


----------



## Pindibog (11 February 2009)

bunyip said:


> I have a similar view - the loot is gone, no matter what the outcome of any court case.
> Cassamatis may or may not end up in the slammer for a year or two, but my guess is that he won't.
> 
> When the dust finally settles down it's the law fims who will be wearing the biggest smiles. And maybe Cassamatis as well.....I'll be very surprised if he hasn't done an Alan Bond by squireling away several million dollars in untouchable assets.




If you don't make these people/organisations accountable corruption will grow. Better to have tried and maybe fail than to have not at all!!! My life still goes on regardless.


----------



## willemrt (11 February 2009)

pilots said:


> Look guys, it WON'T matter what you find they have done wrong, THE MONEY IS GONE. You can huff and puff all you want, you may get your day in court, no one will go to jail, and you will waste more money.




Sure the money from Storm has gone, but there is the possibility the banks acted improperly in approving the loans. And the banks still have plenty of money.


----------



## Judd (11 February 2009)

Yeah, sure.  Storm was the financial adviser, people took out the loans based on Storm's advice and now the lender of the funds is at fault.  Show me where the banks (and why is it that only CBA is mentioned and not the other lenders?) forced people to take out the loans - fraud aside.

Next people in mortgage poo poo will blame the banks for offering them so much "money" to buy something they could never afford.  Oh yeah, I forgot; that is already happening.  Pfft.

Commit to a debt, then repay it or go bankrupt.

Having lost a considerable amount of money on a number of ventures I was sorry and sympathetic to the plight of Storm client's as no one likes to lose money but now my sympathy has dissipated.  I am still sorry for them in their situation but nothing more.


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## pilots (11 February 2009)

willemrt said:


> Sure the money from Storm has gone, but there is the possibility the banks acted improperly in approving the loans. And the banks still have plenty of money.



Mate, to take on a bank you need more money than you have lost on storm, the ONLY people that are telling you that you have a case, are the people that will make more money from you, telling you, we will take them to the cleaners, trust me, you are the one that will be cleaned out of your last dollar.


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## Julia (11 February 2009)

willemrt said:


> Looks like Slater and Gordon also think some of those documents might not be up to scratch.
> 
> http://www.moneymanagement.com.au/a...BOQs-links-to-failed-group-emerge/437676.aspx




Interesting article.   It's looking increasingly as though Storm fudged the documents.

Here is latest article by Michael West:
http://business.smh.com.au/business/storm-redux-20090211-83r4.html?sssdmh=dm16.360002


----------



## awg (11 February 2009)

Julia said:


> Interesting article.   It's looking increasingly as though Storm fudged the documents.
> 
> Here is latest article by Michael West:
> http://business.smh.com.au/business/storm-redux-20090211-83r4.html?sssdmh=dm16.360002




Standard Legal agreements would certainly have been entered into by the Margin lenders with Storm, vetted by lawyers.

So each side will have to flop their documents on the table.

If unsigned documentation was accepted by the lead lender, I suspect they might have a problem with those cases.

If I was a Storm client, I would be more optimistic if CBA or MQG had loaned anything, and my documents were not signed, even if Storm were negligent, the fund provider would also be negligent to some extent....so they may opt to negotiate a settlement.

As to overstated income, I dont think the case would be near as good, if the client signed, I think the obligation of checking would rest with Storm ( but I could be wrong)...I've seen some weird things in the legal system


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## asproboy (11 February 2009)

pilots said:


> Look guys, it WON'T matter what you find they have done wrong, THE MONEY IS GONE. You can huff and puff all you want, you may get your day in court, no one will go to jail, and you will waste more money.




Well, the money's not GONE until everything has been liquidated and the value has been passed from the corrupt and undeserving to those who should have been better served.

...but the real point is: what is the benefit of these things happening if not to analyse, assess and take steps to protect people from the next unscrupulous operator?

On a brighter note, I just had a quick lunch whilst enjoying the latest gags from www.cassimatis.com.au - highly recommended for light entertainment. I felt compelled to ask a question:

"Given your fee model was up-front and represented to clients as supporting the full term of the relationship, do you consider it reasonable business practice to 'withdraw' such a significant level of capital ($24M) from the "revenues" of a business, that is itself carrying so much debt, as a dividend? Was your accountant's advice NOT to treat this as a non-current liability? Would you say your accountants had a solid grasp of your business' operating model?"

I'm not holding my breath.


----------



## awg (11 February 2009)

asproboy said:


> On a brighter note, I just had a quick lunch whilst enjoying the latest gags from www.cassimatis.com.au - highly recommended for light entertainment. I felt compelled to ask a question:
> 
> 
> 
> I'm not holding my breath.





Pretty pissweak hey

Something he has NOT said, is WHAT strategy he was thinking of using to ensure clients accounts remained viable, as he seems to have rejected the "cashing out" option, the XAO is slightly lower now, than in late December, so presumably, unless he wanted to go short,:hide: everyone would be worse off than before, which is why the margin lenders closed him out!

I wish that he was FP to the Hells Angels OMG, those guys know a thing or two about liquidation


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## bunyip (11 February 2009)

pilots said:


> Mate, to take on a bank you need more money than you have lost on storm, the ONLY people that are telling you that you have a case, are the people that will make more money from you, telling you, we will take them to the cleaners, trust me, you are the one that will be cleaned out of your last dollar.




I have disdain for banks and the way they're allowed to legally rip us all off.
I wouldn't be upset at all if Storm clients could give them a kick in the teeth.
But I'm afraid Pilots has hit the nail on the head - you take on the banks, it'll go on for a long long time. 
In the unlikely event that the banks are found guilty of anything illegal, they'll simply appeal the verdict. 
Appeals are long drawn out affairs.....they go on for years, and the lawyers will love it. 
The law firms will drain one fighting fund after another - they'll keep telling you they're making progress but they need further injection of funds to continue the fight.
Stormers....play it any way you want, but think long and hard before you go throwing good money after bad.


----------



## pilots (11 February 2009)

Bunyip, If they could find a law firm that would do in on a deal that if they don't win, they don't pay, but you and I know that will never happen. Right now I will bet that you will have law firms telling them we can get your money back, IT AIN'T GOING TO HAPPEN. Storm is just one of the companies that have gone to the wall, many more to come.
When every thing was going up, we was all happy, storm was AOK. 
We all must lean that we have to take the good with the bad, the next few years we are going to get a lot of bad.


----------



## joeljp (11 February 2009)

pilots said:


> Bunyip, If they could find a law firm that would do in on a deal that if they don't win, they don't pay, but you and I know that will never happen. Right now I will bet that you will have law firms telling them we can get your money back, IT AIN'T GOING TO HAPPEN. Storm is just one of the companies that have gone to the wall, many more to come.
> When every thing was going up, we was all happy, storm was AOK.
> We all must lean that we have to take the good with the bad, the next few years we are going to get a lot of bad.




Let's say if this case is thrown out of court after years of legal battle, even though the lawyers advertised that that no win no cost, who will actually end up paying for the court costs and the defendant's expenses? I would imagine the costs will be awarded to the winning party, which would be the last nail in the coffin for many. 

I realised that it's easy to say it's best to just move on but it really is good advice from many that have put forward here. One could end up with more heartache.


----------



## nulla nulla (11 February 2009)

Find a litigation funder, put the facts before them. If it has a snow balls chance in hell they will fund it for a split of the recovered balance under some very stringent conditions. If it doesn't have a snowballs chance in hell, they will tell you not to waste your money.


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## bunyip (11 February 2009)

nulla nulla said:


> Find a litigation funder, put the facts before them. If it has a snow balls chance in hell they will fund it for a split of the recovered balance under some very stringent conditions. If it doesn't have a snowballs chance in hell, they will tell you not to waste your money.




A 'litigation funder'? Can you elaborate?


----------



## Julia (11 February 2009)

awg said:


> If unsigned documentation was accepted by the lead lender, I suspect they might have a problem with those cases.



I wasn't suggesting the documentation would have been unsigned, but rather that (as I think I read in a post from one Storm client) a bunch of papers was thrust under the client's nose - presumably following a suitable confidence-building sales spiel - and they were told, reassuringly "You don't have to worry about a thing.  Just sign each of these pages and we'll take care of all the details for you."

Judging by the naivete and gullibility which many Storm clients have shown, it would have been a piece of cake to have done this.

Subsequent to the signatures, the Storm advisers could very easily have inserted whatever figures they decided.

If this does turn out to be the case, I hope they are charged with fraud and get thrown in the slammer.


----------



## Solly (12 February 2009)

*"ASIC freeze $2 million payment to co-founders"*

"THE co-founders of failed investment firm Storm Financial lashed out at the corporate watchdog yesterday for going to court to recover $2 million"

Also it is also reported, soccer star Robbie Fowler from North Queensland Fury has expressed an interest in the Townsville mansion;

Full story by Anthony Marx in *The Courier Mail *is here;

http://www.news.com.au/couriermail/story/0,23739,25041588-3122,00.html


----------



## Solly (12 February 2009)

bunyip said:


> A 'litigation funder'? Can you elaborate?




It's like using IMF, in the actions against OPES & MFS.


----------



## vincent191 (12 February 2009)

I am more & more convienced that the Cassimatis couple is no more than a couple of SUPER SALESMEN.

They seems to know or care very little about regulations and obligations. In my opinion, all they care about is their own interest.

Sounds like they can sell snow to the eskimos.


----------



## bunyip (12 February 2009)

Julia said:


> I wasn't suggesting the documentation would have been unsigned, but rather that (as I think I read in a post from one Storm client) a bunch of papers was thrust under the client's nose - presumably following a suitable confidence-building sales spiel - and they were told, reassuringly "You don't have to worry about a thing.  Just sign each of these pages and we'll take care of all the details for you."
> 
> Judging by the naivete and gullibility which many Storm clients have shown, it would have been a piece of cake to have done this.
> 
> ...




Talking of naivety, I'm still shaking my head almost in disbelief at the Stormer interviewed on Four Corners who told of how he borrowed 1.8 million to invest through Storm. His job income was 50k. 
The interviewer, clearly curious as to how this bloke thought a 50k income could fund an annual interest bill of well over 100k, asked him how he had intended to meet the commitments on the 1.8 million loan.
His reply was 'Storm told me it would be self-funding'.
The reporter pressed him further by asking 'Did you know how that was going to happen'? 
By way of reply he could only offer again 'Storm told me it would be self funding'.

No disrespect intended towards any Stormers who may have done something similar. But it almost beggars belief that someone would not put just the tiniest bit of thought into what he was about to do, by working out that 50k annually can't possibly fund well over 100k annually.


----------



## pilots (12 February 2009)

I bet the sales people was thinking this is to good to be true when they found him.


----------



## willemrt (12 February 2009)

It looks like there might be another Storm, this time in Victoria!

http://www.moneymanagement.com.au/article/A-new-Storm-brewing/437840.aspx


----------



## Smiley (12 February 2009)

Storm Financial was a con and we accept responsibility for being caught. Cassimatis has a delusional approach to planning; maybe he believed the banks would support unsecured loans and gambling business practices. How many times did his businesses go broke before Storm - at least once, quite possibly twice? There was the same strategy for all clients - sell your home and invest in the share market. Or mortgage your houses/business to 80%+ and add on huge margin loans.  Debt was viewed as an asset. Storm especially liked those close to retirement/retirees with savings; they would take any accessible super and invest it in shares.  When asked, 'advisers' knew nothing about other avenues for investment. The strategy was to increase margin loans and house mortgages; to get more fees.  We were told "trust us", "it's safe"; the stress on repeating such phrases, has been confirmed by ex employees who relate the Storm approach to that of a cult - with special secrets to life happiness.  We were in because family and friends recommended them and we began doubting lots of things and talked about getting out.  In the first half of 2008, when we tried to get out, and sell our portfolios, Storm blocked us.  Storm had minimal PI insurance and they have ruined the lives of thousands of people.  Storm geared clients to such high levels that we were doomed with even a small drop in the market.  Clients were in a dire situation long before the market got to where it has been in 2009 - at approximately 4,800 for us. The lies continued when our "equity was turned into cash" as we were told we were taken out with our portfolio being worth more than our debt; but it wasn't. We were not greedy but the aim was to become self funded retirees; to ensure our financial future. Now we will be homeless (if we clear our debt). I was thinking of posting this on the Cassimatis website: "Can we camp on your lawn in Brisbane Manny, as you still have a house; and since your such a champion of ex-Storm clients?" imp:


----------



## vincent191 (12 February 2009)

I don't sense one iota of regret or remorse from that couple. In their mind it is all the bank's fault.

Their sense of fair play is completely absent. Their reasoning that "there is still 5 million in the bank, so why can't I take two million for myself" is completely astounding.

The concept of deception and trading whilst insolvent seems never to have crossed their minds.


----------



## beachbum (12 February 2009)

Like most cults that come crashing down the members wake up and say how could I have become involved. The cult leader mumbles incoherant rubbish and everyone realises that he lives on a another planet. It will happen again when the next mania arrives and a new generation of followers are roped in. Lets hope this cult leader is held accountable for his actions. I doubt he or other directors will ever accept resposibility. Did Bond or Skase. Never ever. Never trust anybody with your wealth. If you bugger up you can kick yourself and take the rap without too much damage. Use money that you have earnt by working hard and saving. The only person you have to answer to is your partner and they should be involved also. Apply commonsense to decisions and research. Don't believe all the glossy promo junk and initial public offering sales junk. Most of all money is not that important. Give me a roof, food, my family and health. (not necessarily in that order) Australia is still a lucky country, we place too much importance on things that are not as important as we really think. If I can contribute to the happiness of those around me ( especially my wife) my life is rich. Chin up all.


----------



## bunyip (12 February 2009)

willemrt said:


> It looks like there might be another Storm, this time in Victoria!
> 
> http://www.moneymanagement.com.au/article/A-new-Storm-brewing/437840.aspx




Unreal isn't it! Not surprising though - I've seen it all before....these sort of characters go broke or get shut down, next thing they bounce up somewhere else under a new logo, quite often in the same sort of business.
It's patently clear that we haven't seen the last of Cassamatis.

I notice that one of the authorised representatives of this Victorian outfit is a Peter John Allen.
I went to school with a bloke of that name and he ended up in the financial planning industry. Quite possibly the same bloke.


----------



## -Bevo- (12 February 2009)

Smiley said:


> In the first half of 2008, when we tried to get out, and sell our portfolios, Storm blocked us.




Then ASIC blocked Emanuel from getting his 2 million and he lashes out, oh thats right he probably needs that money to help the victims.


----------



## bunyip (12 February 2009)

vincent191 said:


> I don't sense one iota of regret or remorse from that couple. In their mind it is all the bank's fault.
> 
> Their sense of fair play is completely absent. Their reasoning that "there is still 5 million in the bank, so why can't I take two million for myself" is completely astounding.
> 
> The concept of deception and trading whilst insolvent seems never to have crossed their minds.





Yes, they seem to have no sense of fair play at all. 
But I don't think they really believe their own bull about it all being the banks fault. They'd be well aware of their own stuff ups - they just lack the character to admit it.
I also think they'd have been aware of the immorality of grabbing that 2 million and continuing to sign up new clients when they were insolvent. 

This pair and others like them make me quite angry - and I'm not even one of the people they helped to sink.
Unfortunately there are some weak and spineless people in the world.


----------



## bunyip (12 February 2009)

Smiley said:


> Storm Financial was a con and we accept responsibility for being caught. Cassimatis has a delusional approach to planning; maybe he believed the banks would support unsecured loans and gambling business practices. How many times did his businesses go broke before Storm - at least once, quite possibly twice? There was the same strategy for all clients - sell your home and invest in the share market. Or mortgage your houses/business to 80%+ and add on huge margin loans.  Debt was viewed as an asset. Storm especially liked those close to retirement/retirees with savings; they would take any accessible super and invest it in shares.  When asked, 'advisers' knew nothing about other avenues for investment. The strategy was to increase margin loans and house mortgages; to get more fees.  We were told "trust us", "it's safe"; the stress on repeating such phrases, has been confirmed by ex employees who relate the Storm approach to that of a cult - with special secrets to life happiness.  We were in because family and friends recommended them and we began doubting lots of things and talked about getting out.  In the first half of 2008, when we tried to get out, and sell our portfolios, Storm blocked us.  Storm had minimal PI insurance and they have ruined the lives of thousands of people.  Storm geared clients to such high levels that we were doomed with even a small drop in the market.  Clients were in a dire situation long before the market got to where it has been in 2009 - at approximately 4,800 for us. The lies continued when our "equity was turned into cash" as we were told we were taken out with our portfolio being worth more than our debt; but it wasn't. We were not greedy but the aim was to become self funded retirees; to ensure our financial future. Now we will be homeless (if we clear our debt). I was thinking of posting this on the Cassimatis website: "Can we camp on your lawn in Brisbane Manny, as you still have a house; and since your such a champion of ex-Storm clients?" imp:




Smiley

Thanks for your very candid post.

One question.....when you say Storm blocked you from getting out - do you mean they talked you out of it or did they block you in some other way?


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## Smiley (12 February 2009)

Answer is complicated re getting out of Storm - yes put us off, lost papers to do so, lost someone's stop loss documents, told us could not do on that day, scared another familymember with lies that all would be lost in capital gains.  In our own case, should have done a sit in until it was done. Phone calls to fund manager referred us back to Storm. Phone calls to margin lender assured us we would be taken out at different level than we were and still finding it hard to close all that down.  Every person at bank working in investment lending we talk to has a different story.  Fax a form and they need another.  You'd have to be in this to believe it. Glad to hear that there is going to be a senate inquiry.
h


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## numbercruncher (13 February 2009)

bunyip said:


> Talking of naivety, I'm still shaking my head almost in disbelief at the Stormer interviewed on Four Corners who told of how he borrowed 1.8 million to invest through Storm. His job income was 50k.
> The interviewer, clearly curious as to how this bloke thought a 50k income could fund an annual interest bill of well over 100k, asked him how he had intended to meet the commitments on the 1.8 million loan.
> His reply was 'Storm told me it would be self-funding'.
> The reporter pressed him further by asking 'Did you know how that was going to happen'?
> ...




Banks that lend for these types of ponzi schemes deserve to go down the gurgler as well .....

But instead they will get a Guvmint bailout with taxpayer debt whenl the bills come due ...

The crack-up boom - at a disco near you


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## pilots (13 February 2009)

I note that we have some ex Storm employees on this forum, would one of you tell me how much commission you would get from a wood duck that you talk in to borrowing 1.8 Mil on a wage of $50'000 a year, then how much would Storm take from him as well. Thanks.


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## carey ramm (13 February 2009)

Smiley sorry to hear about your situation. Your story about the difficulties of getting funds out at request is very similar to many others. In one case where a storm client was in a divorce settlement, storm stalled the paperwork in defiance of a federal court order for almost 9 months and of course that poor person lost the lot with the collapse.

The level of "irregularities" in the loan application document i have seen continues to stagger my belief in the banking system. Examples include:

* loans being approved the day before the application was dated and submitted
* loans totally $1.5m to a client who was originally assessed by the bank as a high credit risk for the intitial $100k home loan - yet the loans were still processed
* loans being witnessed by people in different cities to the borrower
* inflated income levels - in one extreme case a retiree had a monthly income of $104k on her loan application
* incorrect details of property owners where a person who listed a house as security wasnt even on the title deed
* then of course there are those who werent even in margin call and were sold down and those that had funds to meet a margin call but were never called (i cant see how they call it a call if no-one calls!!!).
and it goes on and on and on.... i really did expect better from our leading banks.

so please get the loan application documents (both home loan and margin loan) and check them out for irregularities. be pushy with the banks and dont let them give u the run round. if u are unsure of what u r reading then get a lawyer to look at them (if u cant get to slater and gordon or connolly suthers then a community legal aid lawyer can also help u).

i also read a comment earlier about my relationship with financial planners. i have many friends who are financial planners the same way i have many friends who are lawyers, accountants, engineers, mechanics, chefs, etc. i do not provide reccomendations to anyone (including family) on any specific financial planner - period. 

i am not aware of any other financial planners in the same boat as storm or as said in a past post "the next round in the chamber". i have had a few people see me who were in margin loans on specific stock purchases such as allco, mfs, abc learning and a few other recent gems that were being pushed by the broking houses but that is real buyer beware advice. i have not seen any clients from other financial planners in distress. with the asx hitting 3342.7 on jan 23 (which is also close to the dec bottom) i am pretty sure we  would have seen and heard about it by now as the margin lenders dont cut u much slack in meeting calls (as most storm clients can attest to).

in terms of disclosure - i am on this forum and in the press using my real name and identity. i am involved in this "crusade" (just borrowing an EC term!!!) as i was deeply moved by the many people who have come to see me for help and i gave them a personal commitment i would do my best to help them. myself and the company i work for are doing this as a community service obligation as we percieve a great social injustice has occurred.

in terms of using lawyers i can say, based on personal experience, that i agree with some of the views expressed on here that they can be the "winners" in litigation. however i can say that both the lawyer groups i am dealing with have been deeply moved by the people they have seen and i have been impressed with the compassion and understanding they have shown to the victims. 

again it is entirely up to each individual storm client whether they choose to go quitely into the night or fight on.

all i can say is the clients i am helping are choosing to fight on.


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## carey ramm (13 February 2009)

storm also paid their advisors very well with a good base and commission structure - 1 know one mid level advisor earnt $450k in the 2007/08 financial year


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## nomore4s (13 February 2009)

Carey or anyone else involved in this mess, is there any talk or evidence that perhaps the bank staff were getting some sort of kick back for approving these loans?

I've no idea if this is plausible but I'm just asking as this does go on in other industries and it just seems strange to me that the banks were so lax in the approval of these loans.


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## Julia (13 February 2009)

carey ramm said:


> *
> * loans totally $1.5m to a client who was originally assessed by the bank as a high credit risk for the intitial $100k home loan - yet the loans were still processed



Were both loans via the same bank?

*


> * inflated income levels - in one extreme case a retiree had a monthly income of $104k on her loan application



It's not impossible for a 'retiree' to have this level of income.  Whether a person is working doesn't necessarily determine their income.

In this example did the client leave the insertion of the income level to Storm?
How was the proof of income shown?


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## basilio (13 February 2009)

This business gets dirtier and dirtier. There seems little  doubt that the Storm system systematically deceived people  of the risks being taken with their money, deceived other financial institutions about the capacity of clients to pay and finally deceived clients who tried to exit.

One way or another I believe these people should be brought to justice. Hopefully it will be through successful  legal and civil proceedings.

 (But hey, since when did our financial system have a moral code worth the paper it was printed on? )

My fear is that we have yet to see the end of this type of corruption and that many more of us will lose our savings and investments in the collateral damage that will follow.


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## Steve Borden (13 February 2009)

From a financing perspective the lenders will have looked at the deals in a couple of different ways, one will be that the investment income and growth will look after the interest accruing on the margin loan, therefore the client only needs sufficient income to service the home loan and living expenses.

Alternatively, for retirees they will have looked at it from the perspective that someone with a $2m portfolio will generate $200k income from that (10%, given the long term return from ASX is 13% Storm reckoned this was feasible, this is a documented fact) and the cost of the margin loan at 50% LVR, at say 9% was $90k. Therefore surplus income is $110k pa. This is more than sufficient to cover home loan repayments, living expenses and tax. 

This is an example of a retireeing earning at least $100k pa, not saying it is right but you can pretty much make figures do what you like.

Now this requires the market to do 10% every year and as we, and presumably the Storm advisers, know that does not happen.

Also bear in mind that the a CBA home loan was more than likely approved in isolation to a CGI Margin Loan and the CGI Margin loan application asks no questions reagarding income, simply if you have enough security they will lend you the funds.

The blue sky view of the income lay somewhere between the salespeople/advisers and the lenders with the advisers getting 10% of the total commission generated and the lender's staff acheiving bonuses and/or commission based on the business being generated. Each will blame each other with the client ultimately signing a document that says they can afford the repayments.

Many of these people should not have got home loans in the first place, therefore no loan, no investment, no margin loan, no fees and finally no margin call. The home loan is the starting point, everything flows from there. 

Getting the home loan set aside should be the strategy for many of these people.


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## Trevor_S (13 February 2009)

Steve Borden said:


> someone with a $2m portfolio will generate $200k income from that (10%, given the long term return from ASX is 13% Storm reckoned this was feasible, this is a documented fact) and the cost of the margin loan at 50% LVR, at say 9% was $90k. Therefore surplus income is $110k pa. This is more than sufficient to cover home loan repayments, living expenses and tax.




10%.. a nice even number ? Sounds more like they used that number because you can figure it out in your head. 

That aside, I take it this "strategy" means the "investors" would have had to sell down part of their holdings each year to pay the interest bill on the margin loan (and the resultant tax bill from any CG) that was above the dividends received... income received after the convoluted fee structure took it's hit i.e  both directly and then indirectly via their index funds MER) ?


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## Steve Borden (13 February 2009)

Generally they just prepaid the interest annually and capitalised it, the resultant tax refund then went into the 'buffer' account to meet living/loan expenses.


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## Smiley (13 February 2009)

Steve Borden said:


> Getting the home loan set aside should be the strategy for many of these people.




How would one go about getting out present home loan - still classified as an investment loan, set aside Steve?


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## Steve Borden (13 February 2009)

Smiley said:


> How would one go about getting out present home loan - still classified as an investment loan, set aside Steve?




First step is to obtain the copies of the loan application/s and supporting information and then assessing if they are based on fact or on 'projections' or even if they are a low doc loan.

Then, if they are not based on reality or differ from the information that the borrower provided to Storm/Bank make a formal complaint to the Bank through their formal complaint mechanisms.

The Bank/lender is obligated to respond, if they do not reply within the prescribed timeframe or you are not happy with the response you then complain to the Ombudsman.

The lenders do not like dealing with the Ombudsman as it is user pays, that is, the more complaints about a lender the more they pay. It costs them to open a file so they try to avoid this is a much as possible.

The key issue is to establish a pattern, if the Lender's Head Office or Ombudsman start to see a large level of unconscionable lending from one lender or even say one branch then action can be taken.

Not saying this is guaranteed, but it can't hurt. There has been talk that a loan has already been set aside but I must stress that it is rumour only at this point.

This is different to the Ombudsman complaint system about Storm, this is a complaint against the Bank.


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## carey ramm (13 February 2009)

Julia

1. the loans were undertaken by the same bank - interesting file note from the bank saying valued client storm referral.
2.this lady had been unemployed for 9 years and then retired - actual income was $30k per annum not $104k per month after tax!!! (thats $2m pa pre tax)


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## Solly (13 February 2009)

Wilkinson Media have this latest media release from the Cassimatis' here;

http://cassimatis.com.au/120206_inquiry.pdf

(Found at http://cassimatis.com.au/)

This release tends to indicate that they support the Senate inquiry into the collapse of Storm and the actions of the Banks.


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## Solly (13 February 2009)

carey ramm said:


> Julia
> 
> 1. the loans were undertaken by the same bank - interesting file note from the bank saying valued client storm referral.
> 2.this lady had been unemployed for 9 years and then retired - actual income was $30k per annum not $104k per month after tax!!! (thats $2m pa pre tax)




This is getting bizarre, I wonder who actually filled in the sections stating the income & when & by whom were the documents signed.


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## Pindibog (13 February 2009)

Steve Borden said:


> First step is to obtain the copies of the loan application/s and supporting information and then assessing if they are based on fact or on 'projections' or even if they are a low doc loan.
> 
> Then, if they are not based on reality or differ from the information that the borrower provided to Storm/Bank make a formal complaint to the Bank through their formal complaint mechanisms.
> 
> ...




I did not look at that avenue. I am in process of getting a home loan for my mums house as she has mortgage she cannot pay. The original loan was taken out by Dad as he was working full time and could pay interest. Mum was not working (pension age). Dad died 7mths after 2nd mortgage obtained and CBA was notified. Mortgage name was not changed out of dad's name. Would this have been because she would have not passed the credit checks as she has no capacity to pay??? The loan was in Estate of "Dad" CO Mum. confused


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## bunyip (13 February 2009)

The Storm website is a joke. The same old questions stay on there day after day, with only the odd new one being added.

Someone asked him if he thought the Storm model would have been appropriate in the 87 market crash. 
He didn't even attempt to answer the question, saying instead 'We stand by our previous comments that this crisis is unprecedented'.

This person - I won't call him a man -  is a coward.


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## Julia (13 February 2009)

Solly said:


> This is getting bizarre, I wonder who actually filled in the sections stating the income & when & by whom were the documents signed.



Yes, this would seem to be a pretty fundamental point.  
Carey, do you have this information?  Surely the client to whom you refer in your last post would not have inserted this fictitious information?


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## Macquack (13 February 2009)

*cassimatis.com.au*

Talk to Us

Click here to talk directly to Emmanuel and Julie.

Recent Questions

Is it possible that you could have geared your clients any higher? - Lachlan

"Given its taken the largest event since the Great Depression in the 20’s to place Storm’s model in danger, *this question seems to answer itself*. We don’t believe our strategies were risky in normal circumstances and more than 15 years of success bears testimony to that fact." - Emmanuel and Julie

They dont answer the question, except to imply that- yes, we pretty much "maxed out" our clients debt.

They also keep referring to the "Great Depression" but conveniently ignore the "1987 stock market crash" which was only roughly seven years before the start of their "15 years of success" - and then failure.


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## Solly (14 February 2009)

Macquack said:


> *cassimatis.com.au*
> 
> Talk to Us
> 
> ...





What this answer means to me is that "Storm's model" didn't cater for all probable market conditions and corrections ; it appears that it works well in unprecidented rising markets but the model didn't handle the events of downward corrections the recently happened.

I would be interested to know what modeling was done?
Who did the modeling? What scrutiny was this model placed under and who reviewed the results of the modeling?
What was the role of Ignite Financial Systems and Research?

There appears to me to be a possible fundamental flaw in the methodology that was used. I have to defer to those qualified in these areas to provide answers and opinion.


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## shibby (14 February 2009)

Steve Borden said:


> .
> 
> 
> Also bear in mind that the a CBA home loan was more than likely approved in isolation to a CGI Margin Loan and the CGI Margin loan application asks no questions reagarding income, simply if you have enough security they will lend you the funds.




Steve, would that also apply to Macquarie Margin Lending - they have the shares as security and are not interested in assets, liabilities & salary etc. 
No matter how I try, I can only get the simplest paper work, just basic name, address, financial advisor information?


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## bunyip (14 February 2009)

Solly said:


> What this answer means to me is that "Storm's model" didn't cater for all probable market conditions and corrections ; it appears that it works well in unprecidented rising markets but the model didn't handle the events of downward corrections the recently happened.
> 
> I would be interested to know what modeling was done?
> Who did the modeling? What scrutiny was this model placed under and who reviewed the results of the modeling?
> ...




Solly

That's the understatement of the year! There was a fundamental flaw all right, and just about every other kind of flaw imaginable too!
It doesn't take any particular qualifications to work that one out! 

The two most obvious flaws are....
1. The model relied on the continuation of the bull market - a completely unrealistic expectation since bull markets are the exception rather than the norm.
2. There was no effective contingency plan in place to manage risk if the bull market ran out of steam.

He keeps harping about how this crash was an unprecedented event. When reminded that a worse precedent was established by the far more brutal 1987 crash, he pig-headedly sticks to his claim that the current crash was unprecedented.
The simple fact is that this man has proven himself incompetent to manage his clients investments. Now he's showing that he lacks the courage and character to admit it.


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## Steve Borden (14 February 2009)

Pindibog said:


> I did not look at that avenue. I am in process of getting a home loan for my mums house as she has mortgage she cannot pay. The original loan was taken out by Dad as he was working full time and could pay interest. Mum was not working (pension age). Dad died 7mths after 2nd mortgage obtained and CBA was notified. Mortgage name was not changed out of dad's name. Would this have been because she would have not passed the credit checks as she has no capacity to pay??? The loan was in Estate of "Dad" CO Mum. confused




Pindibog

This one is a little different in that when the loan/s were approved the borrower presumably had the capacity to repay. The Bank had a couple of options available after your Father passed away, leave as is (sometimes it is better not to know) or refinance into your Mother's name. The latter it would seem would not have been possible and therefore it was left as is.

It may be worth investigating if any new monies were advanced subsequent to his death or if any material variations were made to the loan/s (extension of interest only terms or like).

Seek some advice though before you make the final decision about refinancing as there may be alternatives, especially if fixed rates are involved.


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## Garpal Gumnut (14 February 2009)

shibby said:


> Steve, would that also apply to Macquarie Margin Lending - they have the shares as security and are not interested in assets, liabilities & salary etc.
> No matter how I try, I can only get the simplest paper work, just basic name, address, financial advisor information?




Can we post in any colour on this thread?

Perhaps blue for Storm Victims, red for the many Italian-Australians yet to have their day with Manny, black for the deceased and white for those who have decided to move on.

gg


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## Steve Borden (14 February 2009)

shibby said:


> Steve, would that also apply to Macquarie Margin Lending - they have the shares as security and are not interested in assets, liabilities & salary etc.
> No matter how I try, I can only get the simplest paper work, just basic name, address, financial advisor information?




Shibby

Have never seen a Macquarie application however I would assume so, in reality the margin lending criteria is pretty much if you have enough security then you get the loan, perhaps aside from a poor credit history or like.

Press a little harder with the Lender they will provide the information you need. 

I know a Qld based Bank (not Suncorp) is having the client sign a request, which includes a $60 per hour fee, to retrieve the meaningful information such evidence of income, projections provided by storm, low doc declaration, etc. It is then a judgement call as to whether you are simply sending good money after bad.


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## Smiley (14 February 2009)

Friends sent Cassimatis website a question re their inlaws who were becoming homeless, and they asked if their relatives could park their caravan on the lawn of his mansion in Brisbane (which is huge).  They are losing their home due to Storm's advice (which included borrowing hugely in Oct '08 against their home which had never been mortgaged as part of their investment plan - on his adamant insistence; this info was not in the posted question). But no surprise it was not posted in their list of queries nor replied to.


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## Julia (14 February 2009)

Smiley, I wonder what would happen if they simply rolled up with their caravan and parked it on the Cassimatis front lawn?   Preferably with the tabloid media in tow!

They could - amidst much weeping - say they were taking literally the Storm founders' declaration that all they cared about was looking after the affected investors.

What would Manny and Julie do?


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## Glen48 (14 February 2009)

The way our law works? is they turn up van in tow and get charged with break and enter, car and van checked over looking for defects, E & J C get a Police body guard. 
But then again they make be getting the yard ready and to busy to reply.


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## shibby (14 February 2009)

Garpal Gumnut said:


> Can we post in any colour on this thread?
> 
> Perhaps blue for Storm Victims, red for the many Italian-Australians yet to have their day with Manny, black for the deceased and white for those who have decided to move on.
> 
> gg




Dear GG
what about green for those who are currently coming 57 out of 57 in the Stock Picking Competition
Love Shibby


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## Garpal Gumnut (14 February 2009)

shibby said:


> Steve, would that also apply to Macquarie Margin Lending - they have the shares as security and are not interested in assets, liabilities & salary etc.
> No matter how I try, I can only get the simplest paper work, just basic name, address, financial advisor information?






Garpal Gumnut said:


> Can we post in any colour on this thread?
> 
> Perhaps blue for Storm Victims, red for the many Italian-Australians yet to have their day with Manny, black for the deceased and white for those who have decided to move on.
> 
> gg




The point I was making is that Australia is blessed with a mixture of many cultures and peoples, and Ingham, Innisfail, Cairns and the Burdekin region are no different. 
There are many with a Mediterranean attitude towards seeking redress whose loot has gone the way of all other Storm monies. They may have other avenues of appeal to the heartstrings of the guilty rather than just through the courts.

gg



shibby said:


> Dear GG
> what about green for those who are currently coming 57 out of 57 in the Stock Picking Competition
> Love Shibby




https://www.aussiestockforums.com/index.php?page=stocktips

lol Shibby, a temporary setback , its all the bank's. other people's fault, not mine, its a black swan, once in a lifetime etc etc., as my betters would say. Await the end of the month and the most incredible recovery in the Stock Competition will have occurred.

gg


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## Solly (14 February 2009)

Garpal Gumnut said:


> The point I was making is that Australia is blessed with a mixture of many cultures and peoples, and Ingham, Innisfail, Cairns and the Burdekin region are no different.
> There are many with a Mediterranean attitude towards seeking redress whose loot has gone the way of all other Storm monies. They may have other avenues of appeal to the heartstrings of the guilty rather than just through the courts.
> 
> gg





gg 
I have previously seen the results of "Car Park Counselling" in NQ.
I trust you are not referring to this ......


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## Garpal Gumnut (14 February 2009)

Solly said:


> gg
> I have previously seen the results of "Car Park Counselling" in NQ.
> I trust you are not referring to this ......




_From Alice in the Looking Glass

'When I use a word,' Humpty Dumpty said, in a rather scornful tone,' it means just what I choose it to mean, neither more nor less.'
'The question is,' said Alice, 'whether you can make words mean so many different things.'
'The question is,' said Humpty Dumpty, 'which is to be master - that's all.'
Alice was too much puzzled to say anything; so after a minute Humpty Dumpty began again. 'They've a temper, some of them - particularly verbs: they're the proudest - adjectives you can do anything with, but not verbs - however, I can manage the whole lot of them! _


I like that word *"Counselling"*

gg


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## Solly (14 February 2009)

Garpal Gumnut said:


> _From Alice in the Looking Glass
> 
> 'When I use a word,' Humpty Dumpty said, in a rather scornful tone,' it means just what I choose it to mean, neither more nor less.'
> 'The question is,' said Alice, 'whether you can make words mean so many different things.'
> ...




Well, thank you .....

"That's the effect of living backwards," the Queen said kindly: "it always makes one a little giddy at first-----"


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## Trevor_S (14 February 2009)

Their Townsville House

http://www.ferryproperty.com.au/pol...sl=2393&f_st=1&f_ct=1,4&f_ps=2&p1=residential


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## Solly (15 February 2009)

Trevor_S said:


> Their Townsville House
> 
> http://www.ferryproperty.com.au/pol...sl=2393&f_st=1&f_ct=1,4&f_ps=2&p1=residential




Thanks for the link, I played the slideshow, It's not a home I'd feel comfortable living in. This place could house many orphans from Espiritu Santo or maybe make a good backbackers hostel, I wonder how many Wicked Hi-Luxs you could park in the driveway ?....:


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## Solly (15 February 2009)

There is story by Mitch Gaynor in today's Sunday Mail that reports that former Redcliffe Storm Financial Adviser Ron Jelich "is ready to cop the consequences if found guilty of leading clients to financial devastation".
He states he is ready to sit in a court room, Senate inquiry, Royal Commission.

The story also reports that "Mr Jelich claims Mr Cassimatis has yet to fully answer several key twists to the sudden collapse of his company", also the article states the Mr Jelich had a breakdown over Xmas and spent time in hospital.

If you can get your hands on a copy of the Sunday Mail, the article is quite an interesting read.....


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## bunyip (15 February 2009)

We hear that Storm bought out numerous financial planners in Queensland and possibly in other states too. 
I wonder if they actually paid any money for them, or whether instead they offered these business an opportunity to come under the high profile Storm banner, with Storm then training them in their strategies and getting a cut of any business they put through.

It seems that these 'bought out' financial planners, despite all their training and professional qualifications, still endorsed the high risk Storm strategies - strategies that were highly unlikely to have passed approval with the financial planners association or whatever their representative organisation calls itself.
It begs the question.....were these 'bought out' financial planners just plain stupid and incompetent in adopting the high risk Storm model, or were they well aware of its risks and pitfalls but they adopted it anyway on the basis of how much income it would bring them in commissions and management fees?
In other words, were they naive and stupid or were they greedy and unscrupulous?
We can point the finger at Cassamatis, and without doubt he has a lot to answer for. But we need to keep in mind that he was not alone....he was just one of dozens of planners/advisers who were tarred with the same brush.


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## Monario (15 February 2009)

Hi All,
        Been a while since my last post, hope all are doing well.

I have a question in regards to margin loans, I hope someone can answer.

I finally recieved a copy of my documents and have been sifting through, but I am unable to find any proof of income, of any kind, on my application for finance with macquarie.. Is this unusual?


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## Macquack (15 February 2009)

Trevor_S said:


> Their Townsville House
> 
> http://www.ferryproperty.com.au/pol...sl=2393&f_st=1&f_ct=1,4&f_ps=2&p1=residential




For a house of 900 square metres, all the rooms look pokey to me.







What's with the high and low windows in this room (blocking the view). The architect should be shot.


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## Solly (15 February 2009)

bunyip said:


> We hear that Storm bought out numerous financial planners in Queensland and possibly in other states too.
> I wonder if they actually paid any money for them, or whether instead they offered these business an opportunity to come under the high profile Storm banner, with Storm then training them in their strategies and getting a cut of any business they put through.
> 
> It seems that these 'bought out' financial planners, despite all their training and professional qualifications, still endorsed the high risk Storm strategies - strategies that were highly unlikely to have passed approval with the financial planners association or whatever their representative organisation calls itself.
> ...





I haven't got the Sunday Mail article in front of me at the moment as I'm in-transit to a briefing, but I believe that Mr Jelich says he was to receive $8mil in shares if Storm floated or $5 Mill in cash in he resigned, but now he's $10mil in debt, homeless and ruined financially. Quite tragic for all concerned.
(*Please correct me if these details are inaccurate)


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## bunyip (15 February 2009)

Solly said:


> I haven't got the Sunday Mail article in front of me at the moment as I'm in-transit to a briefing, but I believe that Mr Jelich says he was to receive $8mil in shares if Storm floated or $5 Mill in cash in he resigned, but now he's $10mil in debt, homeless and ruined financially. Quite tragic for all concerned.
> (*Please correct me if these details are inaccurate)




One way or another they dangled a pretty juicy carrot in front of his nose, didn't they!
Sounds like he took the bait and has ended up paying a heavy price for it.


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## Judd (15 February 2009)

Monario said:


> Hi All,
> Been a while since my last post, hope all are doing well.
> 
> I have a question in regards to margin loans, I hope someone can answer.
> ...




No it is not unusual.   Shares were put up as security and that is the only thing you needed to do because to payout the debt all that was required was to sell the shares.  No other income is necessary for that to occur.  Nor is any liability/asset assessment needed.

Margin loans are, in my view, a very straight forward product.  LOL, I should know since I blew one up but that is another story.


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## Steve Borden (15 February 2009)

There was a presentation on the storm website that made mention of the purchasing of other planning businesses and how the purchase prices were above the industry norm. One salesperson/adviser proudly boasted his income had trebled since joining storm.

It is these salespeople/advisers and those who sold to storm that I find it difficult to feel any sympathy for as they should have known better, if there is a group in all this that could be said to have been greedy (apart from E&J) it was this lot. 

They were seduced by above average commissions and in some cases above average sale prices to the extent that they bet their, their family's and their client's future on the 'model'.


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## Trevor_S (15 February 2009)

Monario said:


> I finally recieved a copy of my documents and have been sifting through, but I am unable to find any proof of income, of any kind, on my application for finance with macquarie.. Is this unusual?




Nope, not unusual at all (though their may be some that do), I have never been asked for proof of income for the several ML's I have had over 2 decades.  ML's are based around the security of the shares ie if you don't pay the interest bill OR the value of the shares falls below the LVR (+ a small margin) then they simply sell the shares from under you if you don't supply more cash or more security to get back under the LVR. ie anyone with an margin loan should be keeping a watchful eye on their loan facility.

Margin loans are a wonderful tool if used correctly, I have been using them off an on since the early '90's and run LVR's around 30% - 40% at most.

With all due respect, how don't you know this ? These are the sorts of questions you should have been asking before you took the loan out.  I know you trusted your adviser but if you didn't understand would you not have asked them how an ML worked ?


----------



## Monario (15 February 2009)

Trevor_S said:


> Nope, not unusual at all (though their may be some that do), I have never been asked for proof of income for the several ML's I have had over 2 decades.  ML's are based around the security of the shares ie if you don't pay the interest bill OR the value of the shares falls below the LVR (+ a small margin) then they simply sell the shares from under you if you don't supply more cash or more security to get back under the LVR. ie anyone with an margin loan should be keeping a watchful eye on their loan facility.
> 
> Margin loans are a wonderful tool if used correctly, I have been using them off an on since the early '90's and run LVR's around 30% - 40% at most.
> 
> With all due respect, how don't you know this ? These are the sorts of questions you should have been asking before you took the loan out.  I know you trusted your adviser but if you didn't understand would you not have asked them how an ML worked ?




Thanks for that..

No, I understand how they work, just did not 100% know if on establishment they require proof of income etc.


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## Glen48 (15 February 2009)

Ron Jelich from Redcliffe branch of storm claims storm told him they had 18M in cash, to my way of thinking Storms agenda was to use victims equity to buy shares so were they only investing a small portion in shares and keeping the rest for themselves?


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## tigerboi (15 February 2009)

*Re:wtf..earn $50k get $1.8m loan?which bank?*

For me this sums up this mob in 1 criminal action

punter makes $50,000 per year,storm gets him margin loans worth $1.8m.

bank & storm should be charged,same as the sub prime "liar loans".

complete joke


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## Solly (16 February 2009)

*"Storm plan to regain control and sue CBA"*

"THE founders of Storm Financial plan to regain control of the failed financial planner and use it as a vehicle to sue business partner and financier Commonwealth Bank for allegedly causing Storm's collapse."

Full story by Colin Kruger from The Age is here;
http://business.theage.com.au/business/storm-plan-to-regain-control-and-sue-cba-20090215-883z.html


----------



## numbercruncher (16 February 2009)

*Re: wtf..earn $50k get $1.8m loan?which bank?*



tigerboi said:


> For me this sums up this mob in 1 criminal action
> 
> punter makes $50,000 per year,storm gets him margin loans worth $1.8m.
> 
> ...





Borrower is guilty too, charge all 3 parties with financial terrorism.


----------



## Judd (16 February 2009)

Solly said:


> *"Storm plan to regain control and sue CBA"*
> 
> "THE founders of Storm Financial plan to regain control of the failed financial planner and use it as a vehicle to sue business partner and financier Commonwealth Bank for allegedly causing Storm's collapse."




Enterprising little buggers aren't they?  This whole thing is almost surreal.

The banking arm cannot talk to the margin lending arm of the same bank due to privacy issues.  To get a mortgage you need to declare your income and debts so if you get the mortgage before you get a margin loan your income of $50k may service the mortgage debt.  The margin loan does not require an income statement or even an asset/liability assessment.  You just have to have sufficient equity in cash and shares to get some shares at a specific LVR and gearing.  Provided you keep within the margin buffer everything is hunky dory.  The only problem was that it just didn't happen.

I just don't understand that with such a large amount of debt, people did not monitor it every week or month and start to wonder "How in Christ's name am I ever going to be able to pay back this debt?"


----------



## pilots (16 February 2009)

Judd, some place today a wood duck will be sold a money making scam just as bad as Storm. If you was a sales person on a big commission would you care how they are going to pay the money back, the sales people have all been paid, and will be back at work looking for the next lot to rip off.


----------



## Junior (16 February 2009)

Judd said:


> Enterprising little buggers aren't they?  This whole thing is almost surreal.
> 
> The banking arm cannot talk to the margin lending arm of the same bank due to privacy issues.  To get a mortgage you need to declare your income and debts so if you get the mortgage before you get a margin loan your income of $50k may service the mortgage debt.  The margin loan does not require an income statement or even an asset/liability assessment.  You just have to have sufficient equity in cash and shares to get some shares at a specific LVR and gearing.  Provided you keep within the margin buffer everything is hunky dory.  The only problem was that it just didn't happen.
> 
> I just don't understand that with such a large amount of debt, people did not monitor it every week or month and start to wonder "How in Christ's name am I ever going to be able to pay back this debt?"




Obviously I don't agree that 'this is all the bank's fault'.  But if these accounts were liquidated by CBA promptly within 4-5 days of margin call they would have very few or zero accounts in negative equity.  AND Storm wouldn't have a case against them.


----------



## jonnycage (16 February 2009)

the unfolding of this mess is truly tragic, we will see it roll
out for many years to come

jonny


----------



## vincent191 (16 February 2009)

Let them go ahead and sue the CBA and ASIC. As far as I am concern the Principals of Storm aren't exactly squeaky clean. 

Whatever the Administrators & investors in Storm cannot get of them let their lawyers take them to the cleaners.


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## schumy (16 February 2009)

In response to the comments / observations made by bunyip and Steve Borden yesterday I was one of the advisers approached by Storm in 2007 - prior to it's failed IPO - to sell my business to them and have me join their team.  

It will come as no surprise to you to have me confirm that as I listened to the sales pitch it was, to use that well worn phrase, too good to be true and far from giving it any serious consideration, I couldn't run away fast enough. Need I say more!


----------



## sqwark7600 (16 February 2009)

Have been away for a bit and just caught up with the 400 posts since (wow!).

My take on the Storm model runs like this using a LVR of 80% (and I invite correction):
The SC starts with say $100k super invested in fund units; SC then borrows $80k against these units. Say SC house is worth $300k then $240k is borrowed against the home and tipped in to more units against which a margin loan of $192k is used to buy further units. If the market goes up and SC LVR reduces to a trigger level of say 70% then the loan is ratcheted back up to 80% et seq. SC now knows what happens if the market goes down.
SC now has $400k equity and a $512k loan for a $612k investment at a debt to equity ratio of 56% which value investors will know is high even for a well managed commercial company. 
Storm’s up-front fees are reported at ~7%of $612k or $42.84k with a ~1% trailing of $6.12k p.a. This leaves $569.16k to invest with $6.12k trails accruing.
Bank margin loan interest is ~8.5% of $512k or $43.52k p.a. plus fees.
But wait there’s more:
The badged index retail funds would have standard contribution fees of ~4% and management fees of ~2% a trailing fee of ~1% and a buy sell spread on the units of ~.4%. I am not sure the deal made by Storm and the fund manager but let’s say it was a straight 5% which I don’t think Storm would carry.
So the fund manager gets 5% of $569.16k or $28.46k plus trails. 
Score board:
Storm are reportedly picking up about $42.84k plus a cut from the fund unit purchase, plus trailing fees thereafter plus…..
Lender reportedly picks up about $43.52k p.a. on the margin loan plus establishment and break fees and….
Fund Manager reportedly picks up about $28.46k plus trails.
SC starts with a $569.16k portfolio of funds which accrue a buy/sell spread leaving the portfolio at a discounted value say $565k. Over the year SC costs will have totalled about $121k. 
SC at end of year 1 will need to have made 21.42% compound interest on the initial $565k to claw back to the original $612k investment.
No wonder the FPs flocked to the Storm fold; fees and commissions too! It is frightening and sad that this phenomenon seems to occur on a regular cycle and the regulators and professional associations are powerless to take any constructive action. I will watch with interest from the sideline running my own SMSF as the industry once again is smacked softly and sent to bed with their supper and I have my super. 
FP=a non professional who places bets on commission with other peoples borrowed money and then charges fees for so doing whilst needing no personal risk assessment nor exit strategy?
:sheep:


----------



## Glen48 (16 February 2009)

Even FP got caught with E& J C buying up their business which made Storm look much bigger than the really were however the F P are still waiting for their money also I see we have to call the Fire victims in Vic etc. storm survivor's  so I guess Storm Fin. victims must be called the same as both parties have lost every thing.


----------



## bunyip (16 February 2009)

schumy said:


> In response to the comments / observations made by bunyip and Steve Borden yesterday I was one of the advisers approached by Storm in 2007 - prior to it's failed IPO - to sell my business to them and have me join their team.
> 
> It will come as no surprise to you to have me confirm that as I listened to the sales pitch it was, to use that well worn phrase, too good to be true and far from giving it any serious consideration, I couldn't run away fast enough. Need I say more!




Clearly you made the right decision. Can you give us a general outline of their offer to you?


----------



## sqwark7600 (16 February 2009)

bunyip said:


> Clearly you made the right decision. Can you give us a general outline of their offer to you?



Specifically whether the fund fees were included in the Storm 7+1% slug. :sheep:


----------



## Cosgrove Fenton (16 February 2009)

Solly said:


> There is story by Mitch Gaynor in today's Sunday Mail that reports that former Redcliffe Storm Financial Adviser Ron Jelich "is ready to cop the consequences if found guilty of leading clients to financial devastation".
> He states he is ready to sit in a court room, Senate inquiry, Royal Commission.
> 
> The story also reports that "Mr Jelich claims Mr Cassimatis has yet to fully answer several key twists to the sudden collapse of his company", also the article states the Mr Jelich had a breakdown over Xmas and spent time in hospital.
> ...




The article also quotes Jelich on Cricketer Andrew Symonds "Althought it was strained for a few months, we are very good friends" and on Cricket coach John Buchanan and sports identity John Gibbs "We're very good friends. I am devastated at what's happened to them" Symonds, Buchanan and Gibbs are all stated as clients of Jelich's but how does one confirm whether or not someone is suitabilty qualified? Is there a difference between a Financial Adviser and Financial Planner and how to you confirm their qualifications/memberships to professional associations?


----------



## bunyip (16 February 2009)

Cosgrove Fenton said:


> The article also quotes Jelich on Cricketer Andrew Symonds "Althought it was strained for a few months, we are very good friends" and on Cricket coach John Buchanan and sports identity John Gibbs "We're very good friends. I am devastated at what's happened to them" Symonds, Buchanan and Gibbs are all stated as clients of Jelich's but how does one confirm whether or not someone is suitabilty qualified? Is there a difference between a Financial Adviser and Financial Planner and how to you confirm their qualifications/memberships to professional associations?




It always disgusts me when these sporting hero idiots or other high profile people get up and mislead the general public by promoting a product or organisation, when in reality they know very little about it. For example, Buchanan likening Storm management to the Australian cricket team and the captaincy of Mark Taylor, Ricky Ponting & others.
Or a few years back there was a news reader,  Ross (I think his surname was Simonds) who publicly promoted a shonky share trading software program that sold for 10 grand and promised outlandish returns of 30% a month. 
Many people bought it on his recommendation, only to find it was a con and they'd wasted their money. Once the scam was exposed, the low-life admitted he'd never used it.
Then there was Olympic sprint champion Carl Lewis and his well publicised endorsement of some sports injury product. That one was finally exposed as a scam too, but not until sales had been boosted by Lewis's lies. Then he admitted he'd never used the product.

At least in the case of Andrew Symonds and John Buchanan, it appears that they were in fact Storm clients, obviously the starry-eyed variety who couldn't differentiate between brains and a bull market.
It makes it no less immoral though, that they accepted big money to promote a company which they really knew very little about. It's not as if they were low income people who needed to make a few extra quid on the side.


----------



## Glen48 (16 February 2009)

Ian Turpey was flogging some sex improvement product turned out he didn't have a problem, I signed up on his say so then realise I was single and didn't have a girl friend and that was the problem.


----------



## sqwark7600 (16 February 2009)

hart2hart said:


> I started reading this thread some weeks ago in the hope of picking up some useful advice. I am not sure what.
> 
> We already know that we were stupid and naive and that "something that seems to be too good to be true usually is". We also know that what was always a pretty meagre nest egg at best is now a non-existent one. It is pointless wasting any energy getting upset or angry.
> 
> ...




Try post#511 for a start. Will update it soon. Good luck.
:sheep:


----------



## sqwark7600 (16 February 2009)

:sheep:







Glen48 said:


> Ian Turpey was flogging some sex improvement product turned out he didn't have a problem, I signed up on his say so then realise I was single and didn't have a girl friend and that was the problem.



That is very funny!


----------



## Mofra (16 February 2009)

sqwark7600 said:


> My take on the Storm model runs like this using a LVR of 80% (and I invite correction):



Nice run-down squark, but I'd have to make one further correction.

They would also receive upfront & trail on any life insurance products they would invariably recommend too, in addition to the investment advice - most upfronts are over 100% for the year one fee for the lump sum insurances and very handy on IP as well.


----------



## swazee (16 February 2009)

Alison Maynard from the Financial Ombudsman Service (FOS) has called the FPA to advise that there will be a Community Meeting in Townsville on Monday 23rd February to discuss Storm, and the recent floods. FOS will have all of its divisions represented, so this would be a good opportunity for clients to get more information – whether it’s about Storm’s financial advice, the banks’ lending practices and issues, or indeed about any flood claims they may have.
The Investors Action Group will also hold meetings later in the week in Rockhampton, Mackay and Cairns, and FOS will send representatives there.
Details will be on the FOS website: www.fos.org.au

FOS has also confirmed that Storm is still a member of FICS which still exists, and therefore clients can lodge complaints to FICS, through Worralls. The reason Worralls are involved is because clients are required to demonstrate that they have been through the internal dispute mechanism first, and as the voluntary administrator, Worralls provides this first step. They can also possibly assist with documentation.


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## -Bevo- (16 February 2009)

This article was in todays Townsville Bully. 

http://www.townsvillebulletin.com.au/article/2009/02/16/39211_hpnews.html 

Doesn't look good for the Cassimatises, 2 million dividend was part payment for 2007 public float.
However, the float was not supported by institutional investors and did not proceed.
According to the statement of Storm's other former chief financial officer Mark Barrett, when he asked Ms Davies (joint chief financial officer) how the company could pay the $2 million out of the $10 million dividend when the float did not proceed, she is said to have replied: `I don't know'.
The Cassimatises have denied `anything untoward' about the payment and accused the receivers of providing incorrect information to the court and being involved in improper conduct.

Banks, Black swans, receivers, ASIC it will all be there fault if poor EC goes to jail, at least there he'll have a roof over his head unlike some investors.


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## Cosgrove Fenton (16 February 2009)

Glen48 said:


> Ian Turpey was flogging some sex improvement product turned out he didn't have a problem, I signed up on his say so then realise I was single and didn't have a girl friend and that was the problem.




Hang in there Glen48! Does it have a used by date?


----------



## Cosgrove Fenton (16 February 2009)

Solly said:


> There is story by Mitch Gaynor in today's Sunday Mail that reports that former Redcliffe Storm Financial Adviser Ron Jelich "is ready to cop the consequences if found guilty of leading clients to financial devastation".
> He states he is ready to sit in a court room, Senate inquiry, Royal Commission.
> 
> The story also reports that "Mr Jelich claims Mr Cassimatis has yet to fully answer several key twists to the sudden collapse of his company", also the article states the Mr Jelich had a breakdown over Xmas and spent time in hospital.
> ...



Of course Jelich is ready to cop the consquences if found guilty - search reveals he does not hold one stick of accreditation and is not listed as a proper authority holder for Storm, who signed the statment of advice? And why does he say Symonds Buchanan and Gibbs are his clients. What are ASIC doing to stop this sort of behaviour? I'm sure Roy would love to take him fishing if Greg      
Norman doesn't want to play Golf with Ron...check out his website ronjelich.com


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## Solly (17 February 2009)

Cosgrove Fenton said:


> Of course Jelich is ready to cop the consquences if found guilty - search reveals he does not hold one stick of accreditation and is not listed as a proper authority holder for Storm, who signed the statment of advice? And why does he say Symonds Buchanan and Gibbs are his clients. What are ASIC doing to stop this sort of behaviour? I'm sure Roy would love to take him fishing if Greg
> Norman doesn't want to play Golf with Ron...check out his website ronjelich.com




Thanks for that info, I believe that Messers, Webb, Jones' & O'Brien from Redcliffe all held either Certificates and/or Diplomas in Fin Planning.

Thanks for the link to the website, it states that Mr Jelich is:
"regional managing director of Storm Financial and also Storm's National Development Manager." To me these appear to be Managerial positions and not an Advisery postion. Yes, it would be interesting to know who signed the SoA.


----------



## swazee (17 February 2009)

Cosgrove Fenton said:


> Of course Jelich is ready to cop the consquences if found guilty - search reveals he does not hold one stick of accreditation and is not listed as a proper authority holder for Storm, who signed the statment of advice? And why does he say Symonds Buchanan and Gibbs are his clients. What are ASIC doing to stop this sort of behaviour? I'm sure Roy would love to take him fishing if Greg
> Norman doesn't want to play Golf with Ron...check out his website ronjelich.com




He has had a long career in Financial Planning, and currently is a regional managing director of Storm Financial and also Storm's National Development Manager.

In these roles, he may not need to be authorised if he is not 'advising' clients. He may bring them into the business, but a sales rep does not need to be licensed!!


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## sqwark7600 (17 February 2009)

On review of the last 400 or so posts I see many opinions about the outcome of a class action, funding, the amount of time it takes and the availability of money and assets for recovery. Yes it is not an easy path and does drag on but in parallel that shouldn’t stop you getting on with your life (if it would then don’t proceed as health precedes wealth). No win no fee is I understand the basis for class action specialists Slater and Gordon’s involvement at a 30% trail on settlement; for an insight into the utility of litigation funding; try

```
http://www.imf.com.au/cases.asp?ID=9&showlist=2
```
I would caution against making any assumptions about the outcome of legal action. There are numerous examples of the tricks that sleaze use to illegally siphon off money and assets as provision against their day of reckoning and also of illegal dealings and collusion that occurs between and amongst our large corporations. This action is a prime example; try

```
http://www.mauriceblackburn.com.au/news/press_releases_and_announcements/archive/qantas%20pleads%20guilty%20to%20price%20fixing%20.asp
```
I consider that our corporation’s law is very well developed and worth using.
Also, I understand a major step before launching an action is called discovery. It is carried out by both parties. Corporations law requires detailed records be kept for up to 10 years by companies such as Storm, CBA et al. and discovery should make those documents available to your legal team.
If I were a Storm client I would join the class action and wait at least until Slater and Gordon make their decision as to whether they proceed or not and at least through to discovery before writing off a class action on an assumption. Ignore the background noise and emotion of the present as it will not take long for reality to crystallise. In regard to strategy this is an excellent media story and throw in the floods and the mining layoffs (with sincere respect for all those poor souls involved including the fire victims) the reality is that it will give you much needed free coverage for your case esp. once the bushfire hype settles.
Imho I see the Storm operation as a backcountry scam based on a very old model, lead by an unsophisticated team all of whom believed their own advertising. Corollary: If they had no risk model, no exit strategy, minimal professional liability or management malpractice insurance and allegedly were taking money from the company illegally you would hardly expect that there was any probability they have even a straw of a defence case especially when their disillusioned team starts to spill the beans for fear of complicity indictments.
By the way the directors of the IMF case above spent 3 years in the slammer.
:sheep:


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## pilots (17 February 2009)

Will all the sales people that made big bucks have to pay any of it back, I did ask what the commission on a 1.8 Mil sale was but no answer.


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## sqwark7600 (17 February 2009)

With respect the latest update-Some practical suggestions gleaned from many great posts by contributors to this site.

Step #1 Wind up all margin lending accounts, especially if your interest payment rate is greater than your interest accrual rate. If you have trouble with your bank use the services on the Banking and Financial Ombudsman Service~FOS. Their site is at: 
http://www.fos.org.au/centric/home_page.jsp
Step #1a. Apply to have the loan set aside if you are of the opinion that your bank demonstrated inconsistencies in their actions. See Steve Borden’s post # 1048 and swazee’s post # 1102. Great contributions.

Step #2 Calculate your personal balance sheet. There are some useful calculators on this site: 
http://www.nt.gov.au/business/resources.cfm?resourcetypeid=1

Step #3 If Step #2 results in a negative outcome you can't live with, voluntary bankruptcy is a legal government regulated option. I understand that if you have a super fund that it remains intact, you can earn a living, keep a modest car and there are ways of restructuring to keep your house. You need to suffer it for 3 years and lose your credit rating for 7 years. The Insolvency and Trustee Service Australia ~ITSA is the government agency responsible for the administration and regulation of the personal insolvency system in Australia. 
Don’t be forced into bankruptcy check out the consequences of voluntary bankruptcy. Make sure you restructure as necessary prior to declaration. ITSA is on:
http://www.itsa.gov.au/
and there is a lot of information on:
http://www.fredappleton.com.au

Step #4 If Step #2 results in an outcome you can live with I would liquidate everything that you can live without. I’d think of transferring any non-liquid investments eg. property syndicates or locked mutual funds into your super.
Step #5 Make your holistic health your number one priority. If your loved-one goes quiet or demonstrates a personality change, watch them like a hawk. Suicide is a real danger; stress is carcinogenic. There are plethora of free counselling services available.

Step #6 Set yourself a budget and live within it. There is a calculator on:
http://www.nt.gov.au/business/resources.cfm?resourcetypeid=1

Step #7 Identify and activate new potential income sources. 

Step #8 If your house is under threat get a relative to buy you out at a reasonable price and rent from them, with the option to buy back in.

Step #9 Spend a lot of time on collating your Storm activities. Write every memory item up as a diary note and find and file every piece of paper, note, brochure etc. you have from Storm, your FP,  the bankers, margin lender, responsible entity or fund manager. 

Step #10 Every time you speak to someone on the phone related to your Storm situation take their full name and also request a reference number (some companies do keep phone logs). Write up a diary note detailing the conversation.

Step #11 Once you and yours are stabilised go after those that caused this with a vengeance. You have many covenants and powerful regulations crying out to lend a hand. Do it with a consolidated class action. For past precedence start with:
http://www.superreview.com.au/Article.aspx?ArticleID=218427
http://www.investordaily.com/cps/rde/xchg/id/archive/IFA0000000160.xml?rdeCOQ=SID-3F579BCE-4C8B1C13

Step #12 Don’t underestimate the power of networking. Communicate with your fellow Storm victims, join any group that they have set up to discuss the problem and their strategy.

At each step seek advice as there are a multitude of organizations and agencies waiting to provide gratis help.
Can anyone add or insert a step or two. If you are a specialist please contribute and give some guidance or direction on your Step specialisation. I’ll edit as necessary.
:sheep:


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## Steve Borden (17 February 2009)

pilots said:


> Will all the sales people that made big bucks have to pay any of it back, I did ask what the commission on a 1.8 Mil sale was but no answer.




Difficult to see how the salespeople/advisers would or could be made to pay the monies back, about the only monetary penalty would be fines from ASIC and they wouldn't go back to the investor. That also assumes they have any of it left.

The commission on a $1.8m margin would actually be based on the investment, which could have been in the order of $3m. It is unlikely that this was invested all in one go and there is growth, etc so it makes it hard to judge.

That said, a $3m investment would have incurred fees of around $200k, which the employee representative would receive 10% (in addition to the salary) and the 'holiday contribution' of from memory 0.07%. This latter component was to assist with payment of the adviser's expenses for the trip to South Africa (and perhaps the previous ones). The more you sold the less you needed to put in from your own resources, flog enough product and you and the family get a free trip.


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## awg (17 February 2009)

nomore4s said:


> Carey or anyone else involved in this mess, is there any talk or evidence that perhaps the bank staff were getting some sort of kick back for approving these loans?
> 
> I've no idea if this is plausible but I'm just asking as this does go on in other industries and it just seems strange to me that the banks were so lax in the approval of these loans.





Good point

The retail staff at most banks have a "financial products sales target to achieve"

Their Union complains about this from time to time.

Not sure whether they get a bonus, or just cop the ar$e if they dont make quota.

I would consider it even more likely that the staff involved in that area (margin lending), would have "targets" in their KPIs, which may result in reduced vigilance by loan approval staff


----------



## greebly24 (17 February 2009)

As a novice investor with a tiny portfolio, I was just wondering if an upfront fee of 7%, as Storm apparently charged, is reasonable? Seems like an unreasonable amount to me.

Just wondering because someone wrote how they lost $4M. Does that mean they paid an upfront fee of $280,000? Someone else lost $12M. Did they really actually happily pay $840,000 upfront to be "stormified".

Can a conspicuous display of wealth and a slick pitch really be that effective?

And in regards to the arguments about people being greedy as opposed to people simply wanting a comfortable retirement and maybe something for the grandkids, if you got $4M then give $280,000 to the grandkids and put the rest in something nice and safe and live happily ever after.

But an old quote I like is when a journalist asked Howard Hughes, then the richest man in the world (by a long shot), how much money does a man really need?

The answer, "Just a little bit more!"


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## stung (17 February 2009)

ASIC are sending two representatives around to my house tomorrow to talk with me about my experiences with Storm.


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## GumbyLearner (17 February 2009)

stung said:


> ASIC are sending two representatives around to my house tomorrow to talk with me about my experiences with Storm.




Make sure you have some prepared well-thought out questons for THEM too!


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## sqwark7600 (17 February 2009)

stung said:


> ASIC are sending two representatives around to my house tomorrow to talk with me about my experiences with Storm.



Don't expect too much; remember they are public servants, don't work on commission, are not on an incentive bonus, don't have malpractice insurance, are well paid and their super is guaranteed by the Australian taxpayer.
I agree with GumbyL but giv'em both barrels!
Good luck.
PS. Have a trustworthy non-relative witness with you (they always do for good reason) and make sure you take full diary notes.
:sheep:


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## swazee (17 February 2009)

greebly24 said:


> As a novice investor with a tiny portfolio, I was just wondering if an upfront fee of 7%, as Storm apparently charged, is reasonable? Seems like an unreasonable amount to me.
> 
> Just wondering because someone wrote how they lost $4M. Does that mean they paid an upfront fee of $280,000? Someone else lost $12M. Did they really actually happily pay $840,000 upfront to be "stormified".
> 
> ...





Greebly, you are 100% correct. 7% is daylight robbery and when you consider the funds went into an Index funds (whch requires only passive management) then the fees are ridiculous. That is why Storm had to manufactor their own in-house products because there would not be one Index fund in Australia or the World for that matter, that would allow such high fees to be charged.

I remember that when I did my MBA Marketing subject, they talked about comparing a $10 cup of coffee that you might purchase from a boutique coffee shop vs a $3 cup bought from McDonalds. Why would someone opt for the $10...it could be the taste, but the underlying reasons are generally to do with status and that somehow drinking the $10 version elevates you into a different class. IMHO that it what happened to Storm Clients. They saw the flashy premises, full time chef, italian designer bathroom and thought, well he must be successful and I want in on the action. I can never understand why they did not link the high fees they were being charged and how he was able to afford his high standard of living.

If he was so sucessful at investing, why would he need clients. Thats right, he was there to help the average mum and dad.....the philanthropist in full stride, sharing his abundant knowledge...all for the small price of modest up-front fee and a little off the top every year. 

I wish all the Storm clients the very best in whatever action you take. I have met a few Storm clients and they have taken the decision to move on....whilst keeping a foot in the class action /FOS door.

I think the Sqwarks? post is good advice.......


----------



## swazee (17 February 2009)

sqwark7600 said:


> Don't expect too much; remember they are public servants, don't work on commission, are not on an incentive bonus, don't have malpractice insurance, are well paid and their super is guaranteed by the Australian taxpayer.
> I agree with GumbyL but giv'em both barrels!
> Good luck.
> PS. Have a trustworthy non-relative witness with you (they always do for good reason) and make sure you take full diary notes.
> :sheep:




Good advice. Also make sure you write out a chronological time line and if you have any written documents such as emails, letters from Storm, notes from your phone calls etc...this will be very helpful.

If they provided you with verbal advice only, try your best to remember what was said (or the context of same) because ASIC will be looking for a 'pattern' of behaviour across all Storm clients and this can be used as evidence if all 300 clients say the same thing. (i.e where there is smoke there is fire)

I know most clients could not get their funds out of Storm and I doubt Storm would of ever put this advice in writing, which legally they must do. I also doubt that the individual adviser kept reasonable file notes in these instances.

There are 2 things ASIC will be looking for:

1. Did Storm take enough due dilegence to 'understand your situation', your goals, objectives, time frame and most importantly your risk rolerance.

2. Was the subsequent advice provided by Storm 'reasonable based' on 1.

I still think that the maximum that can be claimed through FOS is approx. $150,000, however ASIC can send Emannual and Jules to jail if the breaches are under the Corp. Act are serious enough or they may be banned for a few years or perhaps permanently from acting as directors.


----------



## sqwark7600 (17 February 2009)

swazee said:


> There are 2 things ASIC will be looking for:
> 
> 1. Did Storm take enough due dilegence to 'understand your situation', your goals, objectives, time frame and most importantly your risk rolerance.
> 
> 2. Was the subsequent advice provided by Storm 'reasonable based' on 1.



Spot on swazee!
:sheep:


----------



## Anastasia (17 February 2009)

greebly24 said:


> And in regards to the arguments about people being greedy as opposed to people simply wanting a comfortable retirement and maybe something for the grandkids, if you got $4M then give $280,000 to the grandkids and put the rest in something nice and safe and live happily ever after.





Quite often when someone states a $4 million dollar portfolio, you don't hear the other half of the story.....the value of the loans. We had a $1.4M portfolio but this was funded with a $800K margin loan and a $550K home loan.....so not really that much to give to the grandkids, and retire on happily. And I believe this is the pattern for many Storm investors.


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## Mash (17 February 2009)

Just a quick reply so I dont get carried away ... some submitters seem to actually want to know how this all went down.....We first put in $1mill .... yes the up fronts were hefty... but we likened it to a franchisee fee.... no buy/sell spread... and the fees would be equal to other planners after 5 years... only new funds ( more borrowing) attracted the 7% ( of which the local guy got 10%)... so bit by bit we invested big dollars... but only as we got results... seems once we began to capitalize the interest to the loan the market started to slide and we were in trouble.....we tried to get our funds out but were blocked at every turn.... the lenders ( Colonial in our case) only took directive from Storm.. we were stuck.. caught in their web of deceit until we were totally stuffed...but from the beginning  advised by all the powers that be ....checked AFP approved ...no probs with ASIC... what else can you do!..obviously now once bitten twice shy...
Onwards and upwards but I still want to see the b@%$&!$'s rot in hell.


----------



## Julia (17 February 2009)

Mash said:


> ...but from the beginning  advised by all the powers that be ....checked AFP approved ...no probs with ASIC... what else can you do!..



I'd welcome views from others on this, but I suspect there is quite some level of misunderstanding here.  

"AFP approved"  what does that mean?  Just that Storm were members of the Assn of Financial Planners?   That's not a guarantee of sound advice as far as I know.   Wouldn't anyone passing the basic FP exams be eligible to become a member?

"no problems with ASIC".   Given this organisation's reluctance to act and dubious diligence when they do become involved, I wouldn't be setting too much store by this.

Even if the above two could be considered valid recommendations, such considerations would never take the place of common sense in terms of whether any individual can service loans.


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## Solly (17 February 2009)

*"Jelich breaks his silence on Storm"*

"(Mr Jelich) also disputed reports that Storm clients were not aware of the risks of investing in the stock market using borrowed funds. 
``My clients had six months of meetings and compulsory education on financial matters ... they were well educated and understood deeply all aspects of the investment,’’ Mr Jelich said. "

Full story by Bernadette Dias is here.

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/jelich-breaks-his-silence-on-storm/

I'm a little unsure of what "six months of meetings and compulsory education on financial matters " actually entails, has anybody in this forum been through this ?


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## swazee (17 February 2009)

"It has been reported that the Storm model of doing business was to borrow money for investment in share market funds to make money in a bull market, but Mr Jelich strongly disputed the premise"

You have got to be kidding me. Even after all that has happened, the client testominials, the SIAG meetings, the charges brought against Storm by the FPA, it astounds me that he can still be in denial to what actually happened. Mr Jelich, if that was not the 'general' storm model, please explain to everyone what was?

I have never heard, not even once, any semblence by E&J that perhaps the advice was a little too aggressive, inappropriate or that a mistake was made. Not even for 1 client. All I have heard is them blaming 'someone else' for the problems that occured.


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## Cosgrove Fenton (18 February 2009)

It's a pity that Jelich could not undertake 6mths of study to get some qualification then he might understand what a disaster he was promoting - as for the poor clients try 6mths of harrasment (not education!) to get them to sign. Storm was relentless in the art of courting it's potential prey and like all good courting stories once you consented you were screwed!


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## Solly (18 February 2009)

"Infocus Money Management has hired six advisors from the now-defunct Storm Financial firm"

Story in The Daily here;

http://www.thedaily.com.au/news/2009/feb/18/financial-storm-comes-focus/

A goodwill gesture ?


----------



## Smiley (18 February 2009)

I'm a little unsure of what "six months of meetings and compulsory education on financial matters " actually entails, has anybody in this forum been through this ?[/QUOTE]
We were clients for years and know dozens who were also stormified.  This is just more stormified verbage  . . . . Jelich is referring to the couple hours of graphs and stats and quotes that EC or another adviser would present to prospective clients, basically trying to sell you that stocks were a better investment than property . . . Then one had an interview where no risk analysis was done - otherwise how would they have taken all the super from so many retirees and esp disabled people and highly geared them.  Then you got the 100+ page statement of advice which was meant to confuse with weird data including assessing one's debt as an asset.  If all that was education, which took less than 8 hours by the way, how come we are all broke, were blocked from getting out and are confused as to why storm did what it did - except to make big bucks for founders
.


----------



## Solly (18 February 2009)

What's happening at cassimatis.com.au ?

It's been 6 days since we've had a "Latest News" update from Wilkinson Media and I noticed that there hasn't been a recent update to the "Recent Questions". Have people run out of questions?


----------



## Solly (18 February 2009)

Smiley said:


> I'm a little unsure of what "six months of meetings and compulsory education on financial matters " actually entails, has anybody in this forum been through this
> We were clients for years and know dozens who were also stormified.  This is just more stormified verbage  . . . . Jelich is referring to the couple hours of graphs and stats and quotes that EC or another adviser would present to prospective clients, basically trying to sell you that stocks were a better investment than property . . . Then one had an interview where no risk analysis was done - otherwise how would they have taken all the super from so many retirees and esp disabled people and highly geared them.  Then you got the 100+ page statement of advice which was meant to confuse with weird data including assessing one's debt as an asset.  If all that was education, which took less than 8 hours by the way, how come we are all broke, were blocked from getting out and are confused as to why storm did what it did - except to make big bucks for founders
> .



Thanks for your reply.....Why am I not surprised by your response.......


----------



## Steve Borden (18 February 2009)

Solly said:


> "Infocus Money Management has hired six advisors from the now-defunct Storm Financial firm"
> 
> Story in The Daily here;
> 
> ...




Solly

Just good business sense, these advisors will have been ones that sold their businesses to storm in 2007 or thereabouts. They will have a significant number of loyal clients who will not have been stormified and are still in need of advice. 

They stand to pick up a large number of clients for 'free' rather than buy them back from the administrators.


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## Bill Bailey (18 February 2009)

There's something about the Storm saga that rings a bell: why was it so hard to get your money out once it was in?  Surely it wasn't only because Storm was going to lose trailing commissions?  What it smacks of is a Ponzi or pyramid scheme, where new investors' money is needed to pay returns (and occasionally repayments of capital) to old investors.  When inflows from new investors start to dry up, then withdrawals by existing investors are 'discouraged', which certainly seems to be the case with Storm.  Was there some of this going on as well?  Did every cent that was meant to go into investments (after those generous upfront fees were deducted) actually go into those investments?


----------



## Trevor_S (18 February 2009)

greebly24 said:


> As a novice investor with a tiny portfolio, I was just wondering if an upfront fee of 7%, as Storm apparently charged, is reasonable? Seems like an unreasonable amount to me.




and to me... after all all they seem to have done is recommended unsophisticated investors buy an index fund , using a house mortgage to get capital to by shares to use as equity to get a margin loan.  They were not getting what you pay for, so all Storm needed were salesmen rather then financial wizards.  Hell, sans leveraging, I recommend to anyone who asks me (eg my sister) to invest in a decent LIC (like ARG/STW) using dollar cost averaging, because if they are asking me for advice, they surely have no idea what the hell they are doing


----------



## Jifromoz (18 February 2009)

Solly said:


> What's happening at cassimatis.com.au ?
> 
> It's been 6 days since we've had a "Latest News" update from Wilkinson Media and I noticed that there hasn't been a recent update to the "Recent Questions". Have people run out of questions?




Solly,

I asked a number of direct questions on their site but unfortunatey they were evidently too hard to answer. In any case the spin doctors will not allow any real questions to be answered.


----------



## Steve Borden (18 February 2009)

Bill Bailey said:


> There's something about the Storm saga that rings a bell: why was it so hard to get your money out once it was in?  Surely it wasn't only because Storm was going to lose trailing commissions?  What it smacks of is a Ponzi or pyramid scheme, where new investors' money is needed to pay returns (and occasionally repayments of capital) to old investors.  When inflows from new investors start to dry up, then withdrawals by existing investors are 'discouraged', which certainly seems to be the case with Storm.  Was there some of this going on as well?  Did every cent that was meant to go into investments (after those generous upfront fees were deducted) actually go into those investments?




Bill

The funds were never invested in storm but by storm in managed funds, the reason people could not get their money out was because that was against the model. There is a auditable trail that confirms the funds were not diverted elsewhere, there is no fraud in that regard.

EC and his salespeople/advisers were apparently a lot smarter than the investors and the investors needed to be protected from themselves. Don't know how many instances I have seen where people went in to take money out in June/July and ended up putting new money in. This is 'coincidently' when cashflow would have started to dry up.

Of course the response from EC is that it would make sense to be putting more money in when the market drops, black swan event, trusted Colonial, etc. The truth is that many, if not all, of the retirees were in a world of hurt when their margin loan went past an LVR of around 80% as that would have been the point when they still would have had enough equity to repay the home loans. Futhermore at that point the investment would not have generated enough income to service the margin loan let alone home loan repayments and living expenses.

It seems to me that when the market plunged the underlying home loan was forgotten and they (storm) were more concerned with keeping people in the market than having a logical exit strategy.

If the market goes back up they maybe could have survived, we now know that didn't happen.

By the way, really like the three men in a pub gag.


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## Glen48 (18 February 2009)

Storm victims would have been better of using the equity in their property and placing in machines which are available at most large venues at least they had a chance of winning or going home with some money and the screen will tell them at any given time how much they have lost.


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## bunyip (18 February 2009)

Jifromoz said:


> Solly,
> 
> I asked a number of direct questions on their site but unfortunatey they were evidently too hard to answer. In any case the spin doctors will not allow any real questions to be answered.




Same here - I asked them half a dozen very confronting questions and they haven't shown any of them, let alone answered them. I'm sure there will be dozens or even hundreds of other confronting questions that have been canned because they just don't have the courage or character to answer them.
That website is mostly just hot air, a public relations exercise to try and boost their flagging support while they continue to throw stones at CBA and deny any wrong doing themselves.


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## sqwark7600 (18 February 2009)

Steve Borden said:


> Bill
> 
> It seems to me that when the market plunged the underlying home loan was forgotten and they (storm) were more concerned with keeping people in the market than having a logical exit strategy.




I have done the sums on the basis of reported fees and layered margin loans on loans on loans over three good FYs 2004/5/6 and your point seems to be on the mark regarding Storm's disregard for their clients homes.
With a start of $100k super and $300k mortgage proceeds kicked in plus an annual prepayment of interest together with an annual increase in the margin loan as the LVR dropped in the good years the “portfolio” would be very close to a $1m. 
The increases of course would attract the 7% entry fee; and the annual trail of 1% on 1m is $10,000.
The spread of investors ranged from the $50k initial to $18m so there was a bundle in trails being made by Storm.
I bet my “dogs ashes” on the fact that Storm with the possible knowledge of the lenders coerced their clients to hold in the vain and naÃ¯ve hope (Storm’s) that the market would correct. 
No matter what happened their trails would have rolled in and probably did right up to margin loan liquidations. Now that is picking the bones in my view.
What trader on this site would enter a trade without the discipline of a money management plan, a tight stop loss and a sell plan and hold a trade during a 50% market decline? Very few I would hazard. 
So Storm whilst looking extremely stupid seems to be at least, derelict in their duty of care to their clients and at worst….well we will have to wait for the judges verdict.
:sheep:


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## Solly (18 February 2009)

I have just been advised that the Bris Supreme Court has extended the freeze on the $2 mill dividend paid to the Cassimatis' until 25th March.


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## basilio (18 February 2009)

Good article in The age on Financial Planning Association. Basically make then look like a bunch of greedy sharks. Nice comment on the Storm situation.

Overall worth a read.
*
Turning up the heat*
Michael West


Page 1 of 2 Single page view

Reeling in the aftermath of the Storm Financial collapse, the Financial Planning Association has taken a financial planner to court to stop it from planting facetious advertisements in newspapers.

The FPA was granted an interim injunction in the Federal Court against Bannister Mansfield from publishing ads which show a photo of the Association's chief executive Jo-Anne Bloch beside photos of Richard ''I am not a crook'' Nixon and Bill ''I did not have sex with that woman'' Clinton.

The photo of Ms Bloch is accompanied by the caption ''FPA members inevitably put the client first''. Ironically, the advertisement states a factual position: until a new code of practice was recently introduced, it had not been official FPA policy that client interests should come first.

*And it is clear from the Storm Financial Group debacle that FPA members can and sometimes do put their clients a distant last.

Storm was an FPA member and the FPA took no action until the firm had collapsed and its clients were losing their life savings after advice to borrow against their homes to punt the stock market. Even then, its CEO Ms Bloch still protested that the Storm leverage model was acceptable practice.*

Disaster money

The essential conflict for the FPA, and planners in general, is that planners charge fees on the size of a client's asset base, not according to performance. The greater the leverage then, the greater the fees. *And Storm charged up to 8% upfront when its clients could have achieved the same disastrous results by gearing up via the banks themselves and plunging into a Vanguard index fund, for instance, at less than 1%.*

http://business.theage.com.au/business/turning-up-the-heat-20090218-8atc.html


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## sqwark7600 (18 February 2009)

All I see is the FPA bringing the industry down and about time!
Maybe a government inquiry into the dealings of the FPA is overdue. Hey!:sheep:


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## sqwark7600 (18 February 2009)

Hey stung; did you maintain your cool today with the ISUK officuz?
:rippergun


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## sqwark7600 (18 February 2009)

Solly said:


> "Infocus Money Management has hired six advisors from the now-defunct Storm Financial firm"
> 
> Story in The Daily here;
> 
> ...




Says nothing for their ethics or credibility. To me FPs just work under a company banner and churn products for commission and trails and FPA seems to condone that; what risk, what exit strategy, gear to your limit, what market, what client, so he /she has lost their home does it affect my trails? 
Why would you even engage an FP except to clean your toilet? 
:sheep:


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## stung (18 February 2009)

sqwark7600 said:


> Hey stung; did you maintain your cool today with the ISUK officuz?
> :rippergun




Indeed I did.


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## Glen48 (18 February 2009)

Question:
If we here are being critical of others investing in Storm and being greedy, is buying Gold , Silver etc in a Bull run greed as well or is it just cashing in on a opportunity?


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## Steve Borden (18 February 2009)

sqwark7600 said:


> All I see is the FPA bringing the industry down and about time!
> Maybe a government inquiry into the dealings of the FPA is overdue. Hey!:sheep:




I see a significant level of criticism of the FPA in all this but can't quite understand what they could have done. The Association is an organisation for financial planners, it does not have legislative powers and about the best it can do fine or expel planners following a complaints process.

It is not compulsory for a planner to be a member of the FPA and it has no authority over planners outside of the organisation.

Was storm's membership of the FPA a factor in people dealing with them, I would argue not, if you trust an adviser and are satisfied with what they are doing for you then membership is a nice to have and nothing more. Do you ask your doctor if he is a member of the AMA? 

The monitoring of the conduct of financial planners is largely the remit of the license holder and ASIC, if a complaint is lodged with the FPA it can act against its members however until this event there were no complaints. 

Afterall, why would people complain if things were going swimmingly, if the suggestion is they they should have alerted ASIC to the concerns over the 'model', it is understood that they had. Much of the industry concern about storm would have easily been categorised by EC as professional jealousy or ignorance. 

The real issue is licensing, especially groups like storm that hold their own AFSL. storm conducted their own audit and while there are supposed to be processes to separate the sales and audit requirements, does anyone really think that a storm employee would have given bad audits to a storm employee? 

This is a matter of ASIC's making and ultimately their monitoring.

I am not a member of the FPA nor an apologist for same however just wanted to point out that whether storm was a member of the FPA or not it would not have changed the outcome for the storm clients. 

Now if you are talking about other financial planning debacles, that could be a different matter.


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## Gerkin (18 February 2009)

sqwark7600 said:


> All I see is the FPA bringing the industry down and about time!
> Maybe a government inquiry into the dealings of the FPA is overdue. Hey!:sheep:




The FPA is only an organisation that lays down rules for membership, not law.

The CPA organisation lays down rules and ethical guidelines, not law.

The Australian Medical Assocaitaion lays down rules for membership.

Can you see where this is going. There are bad eggs in every profession, in this case its Storm, or the two main directors. How many other advisers live their lifestyle? Not too many ill tell you that.

What about the accountants with the Enron collapse. Did the Chartered Accountants or Certified Practising Accountants get blamed? No, Arthur Anderson was disbanded. Just like storm will be.

What about the doctor that touches his patients in innappropiate ways, or the cut happy doctor, or the teacher who sleeps with his/her student? Do these professional organisations get blamed. The answer is no. Its the individual. Oh and you might say that most FP's new what was going on, yes they did but remember the word Slander, just like most students would know if their teacher was having and affair with a student, you just cant go blurting out these things.

Now I would kindly suggest that you concentrate on what happened here with Storm, and not blame the professional organisation that has actually bought some credibility to the industry. If some of you can remember the 80's would remember it is cleaner than back then.

I am not involved in the FPA or any professional bodies mentioned.


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## Mofra (18 February 2009)

Gerkin said:


> Can you see where this is going. There are bad eggs in every profession, in this case its Storm, or the two main directors. How many other advisers live their lifestyle? Not too many ill tell you that.
> 
> What about the accountants with the Enron collapse. Did the Chartered Accountants or Certified Practising Accountants get blamed? No, Arthur Anderson was disbanded. Just like storm will be.



The comments from the FPA after the collapse were more of an impetus to criticise the peak industry body more than the collapse itself. 
First unit, first semester of the basic DFP is to "know your client"; Storm didn't even get that far. Their advice was far too aggressive and not tailored to meet individual client needs, breaking some of the basic cardinal rules of FP.

For the FPA to offer support to the double gearing Storm strategy is ludicrous. There are probably only a small number of people who make up FP clients (and realistically, only a very few economic circumstances as well) upon which this strategy is appropriate.


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## bunyip (18 February 2009)

Glen48 said:


> Question:
> If we here are being critical of others investing in Storm and being greedy, is buying Gold , Silver etc in a Bull run greed as well or is it just cashing in on a opportunity?




Depends on how you do it. Nothing wrong with taking advantage of a bull market in gold or silver or anything else - that's just good business. 
But how about if you borrow a ridiculous amount of money to get a bigger slice of the action, and you don't bother putting any risk management strategy in place. 
Now you risk bankruptcy if the bull run fizzles out and a bear market takes hold. It's no longer good business - it's irresponsible, reckless gambling that's almost certain to bring you considerable grief.


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## bunyip (19 February 2009)

Gerkin said:


> The FPA is only an organisation that lays down rules for membership, not law.
> 
> The CPA organisation lays down rules and ethical guidelines, not law.
> 
> ...




If a professional organisation endorses dangerous or unethical behaviour from any of its members, then it's clearly a damning indictment on that organisation.

Did the FPA endorse the practices of Storm? 
If they did, then they deserve to be taken to the cleaners through the processes of the law.
If they didn't endorse Storms practices, then I don't see that they have any case to answer.


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## sqwark7600 (19 February 2009)

bunyip said:


> If they didn't endorse Storms practices, then I don't see that they have any case to answer.



Whilst not wishing to start a slinging match I find it very difficult to accept that there are always those libertarians/apologists who jump in and endeavour to turn the preditor into the victim.
My take is that the FPA endorsed Storm by default _esp_. in the eyes of the investor who saw the FPA CFA shingle on the wall endorsing the preditor.
:sheep:


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## sqwark7600 (19 February 2009)

I understand that the FPA has the right to discipline their members under the rules and by signing up as a member of FPA _esp_. as a CFP then the member becomes liable for discipline by the FPA if the code of conduct is ignored.
From 
http://www.moneymanagement.com.au/article/In-the-eye-of-the-Storm/435223.aspx



> “Storm Financial is...(_was_)....a principal member of the FPA, and as such the FPA has commenced a formal investigation into the group’s conduct. But while the group itself was a principal member, FPA chief executive Jo-Anne Bloch said very few of the authorised representatives of the group were Certified Financial Planners...(_there was reportedly 4 CFA's at Storm_)
> The FPA took action by facilitating impartial advice for confused Storm clients, but has refrained from taking a hard line approach against the group thus far. Bloch said last week it was important not to jump to conclusions about the group, which still (prior to the closure of the business) had many loyal clients. Bloch defended the use of margin lending and pointed to the difficult times faced by many…(_i.e. financial planners_)…in the industry as a result of the financial crisis.”




And of the 40 or so FPs under the Storm aegis how many FPA members are being investigated by the FPA?
I believe that the FPA has a responsibilty to all of it's members to ensure that their code of conduct is adhered to and enforced; otherwise disallow their banner being flaunted to unsuspecting clients.
:sheep:


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## sqwark7600 (19 February 2009)

And if you have lost confidence in the FP industry try the bankers:

http://www.businessspectator.com.au/bs.nsf/Article/Licensed-to-kill-$pd20090218-PDAPG?OpenDocument&src=sph



> “The top British bankers who signed off on the structured financial products that have ravaged the global financial system, had no recognised banking qualification! This has got to stop.”




It would be interesting to check up on the qualifications on the bank executive who authorised the margin loans of $1.8m to the Storm client on an income of $50k. 
:sheep:


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## Judd (19 February 2009)

sqwark7600 said:


> It would be interesting to check up on the qualifications on the bank executive who authorised the margin loans of $1.8m to the Storm client on an income of $50k.
> :sheep:




sqwark7600. You seem to missing the point with margin loans.  They do NOT require that one's income needs to be declared.  It has been said often enough in previous posts but to reiterate, all you need to do for a margin loan is offer cash and/or securities.  There is no income test nor is there any assets/liabilities test.

These products have been available in Australia since 1987 when Bankers Trust established the things.  If over that time, people simply act in ignorance, despite over 20 years of operation of the concept, and take them up without exploring the best/worst of them, well, they are simply stupid.


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## Junior (19 February 2009)

The primary purpose of a 'margin call' is to ensure the account doesn't go into negative equity...theoretically it shouldn't matter what the individuals income/asset situation is because they will never be forced to make any payments off the loan balance.  It just means if the gearing level gets too high the bank will liquidate the account and terminate the loan.

The issue that Storm have with CBA is that they didn't liquidate quickly enough when the market plummeted over 30% in Oct/Nov, therefore pushing a large number of clients' accounts into negative equity.


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## Judd (19 February 2009)

Junior said:


> The primary purpose of a 'margin call' is to ensure the account doesn't go into negative equity...theoretically it shouldn't matter what the individuals income/asset situation is because they will never be forced to make any payments off the loan balance.  It just means if the gearing level gets too high the bank will liquidate the account and terminate the loan.
> 
> The issue that Storm have with CBA is that they didn't liquidate quickly enough when the market plummeted over 30% in Oct/Nov, therefore pushing a large number of clients' accounts into negative equity.




I consider that your second paragraph is very relevant.  If the margin lender advised Storm that clients were in a margin buffer but Storm did not advise the *their* clients of the fact, then I believe the responsibility for that failure falls on Storm.  Then, if Storm continued to take no action despite being advised by the lender, then the financier would have been correct to sell down the holdings as per the margin lending agreement.  If the situation worsened, as it apparently did, then I consider it proper for the financier to take action to let the client's of Storm know of the position they were in.  Actually, they probably didn't even need to do that, just keep on selling due to lack of instructions being provided and then, after she all gone poop, letting Storm's clients know how much they owed - as the principal seemingly did nothing.


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## Trevor_S (19 February 2009)

Glen48 said:


> Question:
> If we here are being critical of others investing in Storm and being greedy, is buying Gold , Silver etc in a Bull run greed as well or is it just cashing in on a opportunity?




http://business.smh.com.au/business/gold-stocks-surge-but-will-it-last-20090219-8bvm.html



> Mr Thompson says such prices could hold, but “Gee you’ve got to be sitting there saying it would take only *a little bit of sanity*” for gold prices to drop, even to “a relatively good level.”


----------



## bunyip (19 February 2009)

sqwark7600 said:


> Whilst not wishing to start a slinging match I find it very difficult to accept that there are always those libertarians/apologists who jump in and endeavour to turn the preditor into the victim.




If you're referring to me, then you couldn't be further off track if you tried!

My post expressed no views about whether the FPA was or was not guilty of any wrong-doing in relation to Storm.


----------



## sqwark7600 (19 February 2009)

Judd said:


> sqwark7600. You seem to missing the point with margin loans.  They do NOT require that one's income needs to be declared.  It has been said often enough in previous posts but to reiterate, all you need to do for a margin loan is offer cash and/or securities.  There is no income test nor is there any assets/liabilities test.



Pardon my tech glitch Judd; but still…$1.8k debt and $50k p.a. income….ya gotta wonder.

So if a Storm client takes out a secured loan at an LVR of 80-90% and has kept topping up that loan to keep it at the highest LVR and the security suddenly reverses and goes into free fall to the extent that the LVR rapidly exceeds 105-110% then the bank is in the hole for 5-10%. And if the bank can’t access and sell the security before it reaches 120% it is in the hole for 20%.
It may also be in the hole for the valuations it put on clients homes. Looks like the banking buzz word for 2009 is going to be impairment and the courts will be scrutinising governance and due diligence surrounding these loans. 
I think the authorising officers are hitting the bottle at present.
But your point is right rather than look at a paltry $50k income maybe the banks should have started to prudently (another bygone banker buzz word) reduce the LVR’s on such Storm loans at some stage into the downturn if not to save the clients house, super and financial assets then to provide their shareholders with a modicum of corporate governance.



> These products have been available in Australia since 1987 when Bankers Trust established the things.  If over that time, people simply act in ignorance, despite over 20 years of operation of the concept, and take them up without exploring the best/worst of them, well, they are simply stupid.




They are not simply stupid, I consider that an arrogant remark; the banks have been proven to be the stupids on a gigantic global scale. 
In regard to the length of time margin loans have been in the market, that has no direct correlation with peoples comprehension of them. These people have been duped into accepting the particular loan from the banker packaged by a Storm financial planner without exit or risk strategies and whom we will probably find meddled a little more than is evident at present. Then we have the worst share market since the great depression.
Best/worst of them? They are a loan product low interest=good, high interest=worst.
:sheep:


----------



## Cosgrove Fenton (19 February 2009)

Judd is absolutly correct - Storm are the "Responsible Entity" and accordingly were impowered and authorized to action the margin call. I suspect they got the margin calls - hoped the market would lift and ignored the calls. The market did not lift, the bank said enough is enough and sold. Storm then have the hide to say the only received 6 minutes notice, naturally the bank sold (having decline the unsecured loan EC asked for - $60m!)having had enough of Storm crying wolf.


----------



## Glen48 (19 February 2009)

Ron Jelich Storms agent in Redcliffe gets his face on ACA Friday night should be a good show for those ex home owners in Tents and caravans, although I know Ron and I think he is deeply upset about the whole thing.


----------



## Cosgrove Fenton (19 February 2009)

Glen48 said:


> Ron Jelich Storms agent in Redcliffe gets his face on ACA Friday night should be a good show for those ex home owners in Tents and caravans, although I know Ron and I think he is deeply upset about the whole thing.




No, Jelich is only upset at what he has lost, and the fact that he was got by someone better. The "unofficial unlicensed planner -  King of Redcliffe” will shed a tear for us all and tell us he has done nothing wrong and he feels our pain - when in fact he and his band of merry men have sold products without proper consideration for their clients akin to a car salesman selling you (and assuring you but knowing otherwise) a car without an air-bag – but of course when there is a “crash” guess what ! Furthermore congrats to the Doctor who has been able to medicate this man during his stint in Hospital (assuming depression) although Doc may want to cut back the dosage cause Jelich thinks a couple of months of laying low and the Tent dwellers will forgive all and say he is a great bloke – man is that good or what. Ps Glen48 can I come over to your place as Cash Converters won’t release my Tv until next payday…


----------



## Gerkin (19 February 2009)

bunyip said:


> If a professional organisation endorses dangerous or unethical behaviour from any of its members, then it's clearly a damning indictment on that organisation.
> 
> Did the FPA endorse the practices of Storm?
> If they did, then they deserve to be taken to the cleaners through the processes of the law.
> If they didn't endorse Storms practices, then I don't see that they have any case to answer.




No they didnt ever endorse the practise of what Storm did. 

All they ever addmited was margin lending was appropiate in some circumstances. Thats al they said. Im sure theres a few people on here of have had margin loans.

I have a question for all you negatively posters here.

How did you get to own your house? You borrowed from the bank.

How did you start up and fund a business? You borrowed from the bank.

There is nothing wrong with borrowing so long as its managed properley.


----------



## Gerkin (19 February 2009)

sqwark7600 said:


> Whilst not wishing to start a slinging match I find it very difficult to accept that there are always those libertarians/apologists who jump in and endeavour to turn the preditor into the victim.
> My take is that the FPA endorsed Storm by default _esp_. in the eyes of the investor who saw the FPA CFA shingle on the wall endorsing the preditor.
> :sheep:




By Default?? I think your now clutching at straws. Just like the CPA endorsed there accountants to create fictisious transactions and shred audit papers.

No, there will always be bad egs in every industry.

Ok, sorry to sound insensitive, but was it the planning authorities fault that bushfires claimed all that property and life in Victoria for letting them build in forrested area.

We can play the blame game as long as we want to on any subject.


----------



## Glen48 (19 February 2009)

Crosgrove
I am not sure about you coming over as you may be a Storm victim and could get nasty and throw a shoe at Ron while he is on TV.
I might invite Ron as he is now down and out and I now have more assets than he has and the one with the most toys win.
Sad to think another scam is getting setup some where in the World..nothing repeats like History.


----------



## Cosgrove Fenton (20 February 2009)

Glen48 said:


> Crosgrove
> I am not sure about you coming over as you may be a Storm victim and could get nasty and throw a shoe at Ron while he is on TV.
> I might invite Ron as he is now down and out and I now have more assets than he has and the one with the most toys win.
> Sad to think another scam is getting setup some where in the World..nothing repeats like History.




Glen48
You assume Storm left me with shoes, I was able to use my laces as security and they geared me into the shoes so I lost the laces and the shoes to boot(pardon the pun!)!
Ps I used to have an "r" in my name but they took it as commission....please note your ecords
Pps be prepared to lose 7percent of your toys straight up if RJ comes to play - after all he is your mate....


----------



## asproboy (20 February 2009)

Glen48 said:


> Crosgrove
> I might invite Ron as he is now down and out and I now have more assets than he has and the one with the most toys win.




I don't think I'd feel too sorry for Ron. Not only has he lived the lifestyle we might dream of - for at least a short time - on his clients' hard-earned, he's sure to have plumped his pillows with an insurance policy to soften his fall.


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## sqwark7600 (20 February 2009)

Gerkin said:


> There is nothing wrong with borrowing so long as its managed properley.



Exactly; and the loans weren't managed at all by the Storm advisers, 4 of whom were CFP members of the FPA and who were paid high commissions and trails to do so by their duped clients. 
:sheep:


----------



## sqwark7600 (20 February 2009)

Gerkin said:


> By Default?? I think your now clutching at straws.



From the FPA site:
“The FPA is the peak professional body for financial planning in Australia, representing approximately 12,000 individuals and businesses. Over 9,000 of its 12,000 members are practising financial planners. The FPA and its members strive to improve the financial wellbeing of all Australians.
The FPA provides the leadership and professional framework that enable members to deliver quality financial advice to their clients. FPA members include financial planners from a variety of backgrounds and disciplines, including over 5,500 CERTIFIED FINANCIAL PLANNER™ professionals – *the global symbol of excellence in financial planning. All FPA practitioner members are bound by a code of ethics, high professional standards and must meet continuing professional education requirements*.”

I think most reasonable people would accept that this is a reasonable straw for a potential Storm Client to clutch at don’t you think? (My bold highlight).
:sheep:


----------



## Cosgrove Fenton (20 February 2009)

I think most reasonable people would accept that this is a reasonable straw for a potential Storm Client to clutch at don’t you think? (My bold highlight).
:sheep:[/QUOTE]

As stated by others all industries will have "bad apples". Victims of a car crash - caused by someone driving recklessly/speeding, don't look to sue the police for not stopping the negligent driver, or the fuel company who provided the petrol. "S*&% happens" Storm clients have to blame Storm (the driver) and no one else. Plenty of people (outside of the Storm vehicle) have margin loans and only a small percentage of them have suffered the damage we are seeing when compared to Storm passengers.


----------



## sqwark7600 (20 February 2009)

Cosgrove Fenton said:


> As stated by others all industries will have "bad apples". Victims of a car crash - caused by someone driving recklessly/speeding, don't look to sue the police for not stopping the negligent driver, or the fuel company who provided the petrol. "S*&% happens" Storm clients have to blame Storm (the driver) and no one else. Plenty of people (outside of the Storm vehicle) have margin loans and only a small percentage of them have suffered the damage we are seeing when compared to Storm passengers.



I am aware of that. You miss my point and it is:
that FPA endorsement of Storm and the presence of CFPs in their organistaion would lead clients to the conclusion that Storm would be following the FPA code. This is a valid legal argument as to why they should not shoulder the full responsibility for the tragedy (and isn't that their task at present). How were they to know Storm was a bunch of rotten apples? 
Let's face it, if EC had a basic exit strategy and reasonable risk management for his clients let alone himself, today he would be a hero and the global financial guru of the year.
:sheep:


----------



## Cosgrove Fenton (20 February 2009)

sqwark7600 said:


> I am aware of that. You miss my point and it is:
> that FPA endorsement of Storm and the presence of CFPs in their organistaion would lead clients to the conclusion that Storm would be following the FPA code. This is a valid legal argument as to why they should not shoulder the full responsibility for the tragedy (and isn't that their task at present). How were they to know Storm was a bunch of rotten apples?
> Let's face it, if EC had a basic exit strategy and reasonable risk management for his clients let alone himself, today he would be a hero and the global financial guru of the year.
> :sheep:




Following your logic and using my earlier example then someone injured (Storm client) in a motor accident (market crash) should pursue the Dept of Transport (FPA) for issuing a licence to the driver at fault (Storm) and you are saying the Dept of Transport (FPA) should shoulder full responsibility and that the driver at fault (Storm) walks away free? With no burden of proof that they competent drivers (advisers)?


----------



## Glen48 (20 February 2009)

Today we mourn the passing of a beloved old friend,  Common Sense, who
has been with us for many years. No one knows for sure how old he was,
since his birth records were long ago lost in bureaucratic red tape. He
will be remembered as having cultivated such valuable lessons as:
Knowing when to come in out of the rain;  Why the early bird gets the
worm;  Life isn't always fair; and maybe it was my fault.

Common Sense lived by simple, sound financial policies (don't  spend
more than you can earn) and reliable strategies (adults, not children,
are in charge).

His health began to deteriorate rapidly when well-intentioned but
overbearing regulations were set in place. Reports of a 6-year-old boy
charged with sexual harassment for kissing a classmate; teens suspended
from school for using mouthwash after lunch; and a teacher fired for
reprimanding an unruly student, only worsened his condition.

Common Sense lost ground when parents attacked teachers for doing the
job that they themselves had failed to do in disciplining their unruly
children.

It declined even further when schools were required to get parental
consent to administer sun lotion or an Aspirin to a student; but could
not inform parents when a student became pregnant and wanted to have an
abortion..

Common Sense lost the will to live as the churches became businesses;
and criminals received better treatment than their victims.

Common Sense took a beating when you couldn't defend yourself from a
burglar in your own home and the burglar could sue you for assault.

Common Sense finally gave up the will to live, after a woman failed to
realize that a steaming cup of coffee was hot. She spilled a little in
her lap, and was promptly awarded a huge settlement.

Common Sense was preceded in death, by his parents, Truth and Trust, by
his wife, Discretion, by his daughter, Responsibility, and by his son,
Reason...

He is survived by his 4 stepbrothers;
I Know My Rights
I Want It Now
Someone Else Is To Blame
I'm A Victim

Not many attended his funeral because so few realised he was gone.

If you still remember him, pass this on. If not, join the majority and
do nothing.


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## Cosgrove Fenton (20 February 2009)

Glen48

I could not agree more, you obviously have a lot of common sense but why do you let your Avatar smoke?


----------



## Glen48 (20 February 2009)

Hello
I hope to shock a few smokers into giving up....

Alan Kohler

    Prelude to a kiss-of-death
    TOP News

          The humiliation of the US Securities and Exchange Commission over Bernard Madoff and Sir Allen Stanford, and President Obama’s $US275 billion mortgage bailout plan are early wake-up calls for Australia.

    There are big differences between Australia and the US, but they shouldn’t breed complacency.

    It’s likely that Australia’s hard landing has merely been postponed, not cancelled. Even if, by some miracle, Australia can actually escape the global meltdown that is now evident, should Australia’s policy-makers assume that this country will somehow muddle through (as opposed to asserting that for political purposes)?

    From what we are now witnessing in the news out of Japan and Europe, including Russia, as well as the US, the world is experiencing an economic catastrophe far beyond anything imagined even a few months ago. The idea that Australia can avoid a painful recession is a delusion.

    It is imperative that Australia’s economic and securities policy-makers now establish a disaster plan, just like the police forces did with the threat of terrorism. The government and the Australian Securities and Investments Commission have been given some precious breathing space, which is quickly running out. It should be used urgently.

    In the US, it has been discovered that the SEC can’t pick up Ponzi schemes. Madoff and Stanford ran obvious ones: they were one-man bands; they were hedge funds without hedge fund fees; their returns were suspiciously consistent – in 1995 and 1996, for example, the returns were identical – 15.71 per cent – and so on.

    Are there none of these in Australia? Well, yes, there was Chartwell in Geelong, which has caused so much misery in a town that can least afford it.

*   Storm Financial in Townsville was not so much a Ponzi scheme, where new money finances the returns on old money, as a scandalous partnership between spivs and a bank, that should have known better, to place ordinary people in harm’s way.*

    ASIC should urgently audit Australia’s investment schemes and look for the warning signs that have been highlighted by the Madoff and Stanford debacles, if only for its own sake. The credibility and morale of the SEC has been severely damaged by its failure to act early against those two charlatans.

    Australia has an appalling system for managing savings in this country, in which financial salespeople are allowed to masquerade as advisors and receive large commissions for selling on “investment products”, which in turn are allowed to charge high, unregulated fees. It is a disaster waiting to happen.

    And the Rudd government should not simply assume that Australia will escape a significant rise in mortgage defaults.

    Yes, there are two big differences: Australia’s banks are well capitalised and, unlike in the US, mortgage interest rates have fallen sharply with the reduction in the cash rate.

    But unemployment here is about to rise sharply and house prices are still too high relative to income (three times average income versus a long-term figure of less than one).

    The US government has now been forced to use taxpayers’ money to subsidise the modification of home loans (that is, reduce repayments in an effort to cut foreclosures).

    The plan is a vast experiment in moral hazard (borrowers who took on too much debt are just being let off the hook) and it may not work anyway because ownership of the loans is so widely dispersed through mortgage securitisation.

    But what is Kevin Rudd’s plan? Hope for the bes


----------



## bunyip (20 February 2009)

Just saw the interview with Ron Jellich on A Current Affair. This character seems to have been tarred with the same brush as Cassamatis.

Both claim to feel sorry for their clients who got burnt.

Both blame the banks.

Neither of them has shown the character to admit any responsibility for giving the poor investment advice (very high gearing with no effective risk control strategy) which appears to have been the primary factor in them and hundreds of their clients getting cleaned out.


----------



## Julia (20 February 2009)

Glen48 said:


> Today we mourn the passing of a beloved old friend,  Common Sense, who
> has been with us for many years...............



I haven't seen this before.  So true.  Many thanks, Glen.
Wonder if we'll ever see the return of common sense?
It doesn't seem that we can look to governments to provide an example.


----------



## Solly (20 February 2009)

bunyip said:


> Just saw the interview with Ron Jellich on A Current Affair. This character seems to have been tarred with the same brush as Cassamatis.
> 
> Both claim to feel sorry for their clients who got burnt.
> 
> ...





Here's the Current Affair story...
It's not a program I watch but this might add insight for some.

http://video.msn.com/?mkt=en-au&brand=ninemsn&playlist=videoByUuids:uuids:f88b915c-ac1a-4ad4-a049-7fae11de7dea&showPlaylist=true&from=inline&fg=aca


----------



## Julia (20 February 2009)

Solly, I can't access the link.  Can you give us a brief synopsis of the interview?


----------



## Garpal Gumnut (20 February 2009)

There is a lull in the affairs of Storm Investors.

Everyone has an opinion .

The world moves on.

Storm "investors" in my opinion have Buckley's chance of recovering their losses.

There is no groundswell to punish those whose alleged negligence caused their losses.

In no particular order

Financial Planners
Financial Planners Association
Storm Financial
Cassimatis
ASIC
Banks

Let us move on and finish this thread, it is a useless exercise.

gg


----------



## Glen48 (20 February 2009)

GG a new scam has started in the Cayman Islands maybe we can move to that for awhile until the next one is uncovered...wait FBI are on to them so there will be no more.


----------



## Solly (21 February 2009)

*"Storm's financial maelstrom threatens banking sector"*

Here's an interesting article by Colin Kruger in the SMH, I believe it's a good precis of where things are up to at the moment.

In the article John McLennan, a banking consumer advocate, likens the Storm model to a ponzi.


http://business.smh.com.au/business/storms-financial-maelstrom-threatens-banking-sector-20090220-8dmm.html


----------



## Trevor_S (21 February 2009)

Solly said:


> In the article John McLennan, a banking consumer advocate, likens the Storm model to a ponzi.




I find this, in the same article weird.



> Strangely, many that the Herald spoke to are not blaming Storm and accept its official verdict that a "Black Swan" event was to blame rather than Storm's leveraged model.




Even though the clients need to take alot of the responsibility, I can't even begin to understand how "many that the Herald spoke to are not blaming Storm " for crappy advice ? ie overleveraging 

I guess I don't understand the human psyche


----------



## Julia (21 February 2009)

Trevor_S said:


> ven though the clients need to take alot of the responsibility, I can't even begin to understand how "many that the Herald spoke to are not blaming Storm " for crappy advice ? ie overleveraging
> 
> I guess I don't understand the human psyche



Doesn't it just reinforce the astonishing naivete of these investors?
i.e. that even now with all that has happened, they have still not woken up.


----------



## Glen48 (22 February 2009)

The Nigerian scammer's will be send them letters next tell them they can get their money back.
All those looking in can see what went wrong.


----------



## Mash (22 February 2009)

don't tar us all with the same brush.... I'd like to know who those people are who don't blame storm..maybe those that weren't double leveraged  ... and therefore haven't lost everything....makes for a better read but doesn't it...and how quickly you picked up on that one point... der...that's why they put that kind of comment in these stories. i have spoken to hundreds who blame both storm and the banks equally. The banks still have our money and we'll fight to get it back !


----------



## bunyip (22 February 2009)

Glen48 said:


> The Nigerian scammer's will be send them letters next tell them they can get their money back.
> All those looking in can see what went wrong.




One of those Nigerian scam victims was interviewed on TV a few months back. He was caught by the scam an amazing eight times! 
When asked why he didn't learn after the first time and the second and the third and so on, his reply was...._'Guess I'm the eternal optimist -  each time I thought this time it'll be different, this time it'll be legitimate'!_
Surprisingly he didn't appear to be dim-witted - he was in fact a successful businessman and quite financially well off until the scams cleaned him out.

Seeing some of those Storm victims on TV and reading about them in the papers, hearing them claim they don't understand how it happened, blaming the banks and apparently not attributing any blame to Storm, you'd have to suspect that they're prime candidates to get scammed again if they ever recover to the extent of once more having money to invest. Maybe EC will nail them again if he ever remerges in the investment advisory business, which I believe he will.
At least all the Stormers who have posted on this thread appear to realise they were conned by the Storm sales pitch. I doubt if any of them would fall for anything similar again.


----------



## Cosgrove Fenton (22 February 2009)

bunyip said:


> At least all the Stormers who have posted on this thread appear to realise they were conned by the Storm sales pitch. I doubt if any of them would fall for anything similar again.



Can someone please post the bank account details for these Nigerian chaps and if I lose my money I can blame the bank for lending to me.


----------



## swazee (22 February 2009)

Come on guys, these posts are getting little out of hand. Nigerian Scames! Give me a break.

Whilst we can finger the blame at Storm and the Banks, lets not forget the Storm clients and what they are presently going through, which I am sure are also shouldering thier fair share of the blame. If you feel the need to add salt to the wound of these clients, then find somewhere else to post such comments.

I have seen some fantastic posts that are very useful to Storm clients are aimed at helping them through this crisis, however over the last week the quality of these has dropped to a low level.

To all the Storm clients who have been adversely affected, keep your head up, stick to whatever plan you may have and most importantly keep moving forward. With the help of family and friends you will rebuild your lives and finances to enable you to live a happy and fruitful life. There is no better victory than thriumph through adversity.

Never give up.


----------



## So_Cynical (22 February 2009)

bunyip said:


> One of those Nigerian scam victims was interviewed on TV a few months back. He was caught by the scam an amazing eight times!
> When asked why he didn't learn after the first time and the second and the third and so on, his reply was...._'Guess I'm the eternal optimist -  each time I thought this time it'll be different, this time it'll be legitimate'!_
> Surprisingly he didn't appear to be dim-witted - he was in fact a successful businessman and quite financially well off until the scams cleaned him out.




Yep i remember that...it was like he was addicted to chasing that dream, and 
couldn't see it for what it was...he's eyes would light up when he talked about 
the 20 million dollar bogus check he had.

I think there's a certain part of the population that just susceptible to this kind 
of easy money, they need someone to hold there hand and like feed them the 
easy money fantasy (tell em what they want to hear) without these people 
the scammers just cant exist.


----------



## pilots (22 February 2009)

swazee said:


> Come on guys, these posts are getting little out of hand. Nigerian Scames! Give me a break.
> 
> Whilst we can finger the blame at Storm and the Banks, lets not forget the Storm clients and what they are presently going through, which I am sure are also shouldering thier fair share of the blame. If you feel the need to add salt to the wound of these clients, then find somewhere else to post such comments.
> 
> ...




Swazee, you blame the banks and storm, what are you telling me they made you go out and buy in to Storm???


----------



## Julia (22 February 2009)

Mash said:


> don't tar us all with the same brush.... I'd like to know who those people are who don't blame storm..maybe those that weren't double leveraged  ... and therefore haven't lost everything....makes for a better read but doesn't it...and how quickly you picked up on that one point... der...that's why they put that kind of comment in these stories. i have spoken to hundreds who blame both storm and the banks equally. The banks still have our money and we'll fight to get it back !



Well, I hope you're not holding your breath in the expectation of getting anything from the banks!
It wasn't the banks who made the decision to borrow against the home, then to again borrow on the shares bought with that borrowed money.
How this didn't appear to be even a bit risky is absolutely beyond me!


----------



## swazee (22 February 2009)

pilots said:


> Swazee, you blame the banks and storm, what are you telling me they made you go out and buy in to Storm???




Read by post! I said that Storm clients are also shouldering their fair share of the blame. What is the point in putting the boot in now, after the fact? A lot of these people have lost their homes, 1 has already committed suicide and many families are on the verge of breaking apart due to the stress of it all. 

Lets at least offer some intelligent and more importantly 'respectful' solutions that at least attempts to asist, not hinder the healing process.

Here is a starting point....put yourself in their shoes and think....what would I do next?


----------



## pilots (23 February 2009)

Swazi, Sorry that you have lost so much. You say you want respectful solutions, First DON'T wast any more money chasing what you have lost, its GONE.  Stop all the blame game, most of the fault here was your own, if I was to buy XYZ shares to day and they go bad, should I blame the broker that sold them to me, or should I blame the bank that let me have that let me have the money, or should I blame XYZ????????     Storm is just one of the many that WILL go to the wall this coming year.


----------



## Aussiejeff (23 February 2009)

Solly said:


> *"Storm's financial maelstrom threatens banking sector"*
> 
> Here's an interesting article by Colin Kruger in the SMH, I believe it's a good precis of where things are up to at the moment.
> 
> ...






> Slater & Gordon's Damian Scattini, who is preparing legal action on behalf of Storm clients, says it is clear that both Commonwealth and the Bank of Queensland "effectively empowered" Storm to make lending decisions on their behalf.
> 
> "The Commonwealth Bank was in partnership with Storm, there's no doubt about it," McLennan claims.
> 
> It could go a long way to deciding who might have to help wear the cost of Storm client losses, *which are expected to top [size=+1]$1 billion[/size]*.




Hopefully, there isn't a _Cyclone_ Financial Group out there, somewhere, getting ready to devastate another portion of Oz. 

Damned Storm was bad enough...


----------



## Cosgrove Fenton (23 February 2009)

swazee said:


> Come on guys, these posts are getting little out of hand. Nigerian Scames! Give me a break.
> 
> Yes, the leap to the Nigerian scams is a little farfetched, I'll agree. Swazee, we all respond to and recover from trauma in different ways - mine is to be cynical and to make dry observations - laughter can be the best medicine! The public relies on  governing bodies to regulate the players in the market, but the point is we can't always be protected from ourselves or global events. Blaming the Lenders in this case is just a waste of time and is selling false hope to Storm Victims - they are not being called Bank Victims (not that I like banks) or Global Financial Crisis Victims and there is a good reason for this.


----------



## maccka (23 February 2009)

*Re: SICAG meetings*

Dates and venues for the upcoming SICAG meetings are:

*ROCKHAMPTON* 
Tuesday Feb 24  6 pm for 6.30 pm start
Rockhampton Leagues Club, Cambridge Street, Rockhampton

*MACKAY* 
Wednesday Feb 25         6 pm for 6.30 pm start
Mackay Aero Club, Casey Street, South Mackay (old airport)

*CAIRNS*
Thursday, Feb 26         6 pm for 6.30 pm start
Admiralty Room, Frogs on The Waterfront (Cairns Cruising Yacht Club Squadron)

*Speakers* at each meeting include:
Mark Weir and Noel O’Brien (SICAG Co-Chairmen)
Mr John McLennan (SICAG consultant, bank consumer advocate)
Damian Scattini (Brisbane Practice Manager, Slater & Gordon)
ASIC representative (not confirmed to speak)

The Cairns meeting will also feature Senator John Williams and Senator Ian Macdonald speaking about the status of the Senate Inquiry into the banking and financial services industry and Desley Boyle speaking on behalf of the Qld Government.

It is also believed the representatives from the Financial Ombudsmen Service will be present at each meeting.


----------



## Solly (24 February 2009)

*"Storm over $2m last-ditch dividend"*

"EMMANUEL and Julie Cassimatis were the only remaining directors at Storm Financial when they controversially paid themselves a $2 million dividend"

"The week after paying the dividend, Mr and Mrs Cassimatis contacted Worrell Accountants."

Ron Jelich claims that "Mr Cassimatis told him in early November that Storm had $17 million to $18 million in the bank"


Full Story by Colin Kruger in the Sydney Morning Herald is here;

http://business.smh.com.au/business/storm-over-2m-lastditch-dividend-20090223-8ftw.html


----------



## Solly (24 February 2009)

Solly said:


> What's happening at cassimatis.com.au ?
> 
> It's been 6 days since we've had a "Latest News" update from Wilkinson Media and I noticed that there hasn't been a recent update to the "Recent Questions". Have people run out of questions?





It's been another week and still no further updates on
cassimatis.com.au from Wilkinson Media.

Has anyone asked any more questions ?


----------



## Solly (24 February 2009)

Solly said:


> It's been another week and still no further updates on
> cassimatis.com.au from Wilkinson Media.
> 
> Has anyone asked any more questions ?




Appears the Media Release from 17/2 regarding the Deed of Company
Arrangement (DOCA) has now been posted.


----------



## bunyip (24 February 2009)

Solly said:


> It's been another week and still no further updates on
> cassimatis.com.au from Wilkinson Media.
> 
> Has anyone asked any more questions ?




I've asked a couple more. I also invited Cassamatis to email me privately if he wasn't game to answer me publicly. Not that I seriously thought he would.

My guess is that he's copped a real razzling from angry Storm victims who are demanding answers, and he hasn't been game to publish their posts. He sees no point in continuing with the website.


----------



## Garpal Gumnut (24 February 2009)

Sometimes no matter how sorry you feel for folk, you realise that some people are going to make the same old mistakes again and again and again.

On the http://sicag.info/ site, the SF Action Group are advising people to seek advice from a member of, wait for it, The Financial Planning Association.

And these are the guys supposed to be helping the poor filched Storm investors.

Jesus wept.

gg


----------



## asproboy (25 February 2009)

Solly said:


> What's happening at cassimatis.com.au ?
> 
> It's been 6 days since we've had a "Latest News" update from Wilkinson Media and I noticed that there hasn't been a recent update to the "Recent Questions". Have people run out of questions?




Is it too wicked an idea to suggest we set up askmanny.com.au and have people post their questions to Mr Cassimatis and they are presented with full transparency?


----------



## bunyip (25 February 2009)

asproboy said:


> Is it too wicked an idea to suggest we set up askmanny.com.au and have people post their questions to Mr Cassimatis and they are presented with full transparency?




I like that idea. If nothing else, it would make for some interesting reading. 
But don't expect him to respond.....he runs and hides when people start asking him confronting questions.


----------



## maccka (25 February 2009)

Garpal Gumnut said:


> Sometimes no matter how sorry you feel for folk, you realise that some people are going to make the same old mistakes again and again and again.
> 
> On the http://sicag.info/ site, the SF Action Group are advising people to seek advice from a member of, wait for it, The Financial Planning Association.
> 
> gg




GG - Who would YOU suggest they seek advice from?:


----------



## Solly (25 February 2009)

ABC reports that Damian Scattini says Storm clients have two things that will give them a positive outcome, the have right on their side and Slater and Gordon.....

ABC story is here;

http://www.abc.net.au/news/stories/2009/02/25/2500801.htm?section=business

What exactly does "positive outcome" really mean ???


----------



## Mash (25 February 2009)

It means when the banks do something wrong    ....they can be made to pay for it!!!!   :


----------



## Julia (25 February 2009)

Mash said:


> It means when the banks do something wrong    ....they can be made to pay for it!!!!   :



So that we may better understand how this positive outcome is going to occur, Mash, could you outline exactly what the banks have done that will be shown to be illegal?

With thanks.


----------



## Mash (25 February 2009)

as usual you are unable to comprehend what is written... I didn't say illegal.... I said wrong..... but to give you insight into the allegations may prejudice the proceedings and claims....so you will just have to watch this space....let's just say the banks and other institutions are beginning to squirm.... it will take time... but like Damian says .. we have right on our side...


----------



## Julia (25 February 2009)

Mash said:


> as usual you are unable to comprehend what is written..



I'm very sorry for my abject stupidity, Mash.




> . I didn't say illegal.... I said wrong..... but to give you insight into the allegations may prejudice the proceedings and claims....so you will just have to watch this space....let's just say the banks and other institutions are beginning to squirm.... it will take time... but like Damian says .. we have right on our side...



I used the word 'illegal' advisedly.

The courts adjudicate on the law, not on moral considerations.

Re Mr Scattini being assured that 'right is on our side', that's undoubtedly correct as far as he is concerned in that the lawyers all round will be the winners, regardless of the outcome for Storm clients.


----------



## vincent191 (25 February 2009)

I am not a lawyer and I don't know the difference between wrong and illegal. All I know is the bank has got the money and trying to get it back from them is harder than extracting teeth !!


----------



## pilots (25 February 2009)

Julia, The stupid ones are them who believe they can win any thing back from the banks. The lawyers are telling the wood ducks again, we will win this. LOL,LOL.


----------



## Solly (25 February 2009)

Julia said:


> I'm very sorry for my abject stupidity, Mash.
> 
> 
> 
> ...




If Mr Scattini is so confident about getting a remedy that will result in his clients getting something positive, I would hope that the something positive is going to be monetary amounts at least in the hundreds of thousands of dollars for each client.

I am very interested to see where the banks have been negligent to allow this action to be successful against them. If there is a ruling against them then maybe the Cassimatis' may be entitled to compensation as well.

I had right on my side too once, when wealth was taken from me many years ago....Unfortunately in my case I had to write it off as a bad debt and a hard life learning experience. Every case is different but I am very interested to see what the 'silver bullet' is that the legal team has in this stoush.


----------



## basilio (25 February 2009)

Silver bullets to get money back for Storm investors? Just can't see the banks or courts wearing this one. 

Certainly there will be moral issues, but I just can't remember the last time the public won on a "moral" issue with the banks. I suspect the only justice obtainable will be natural justice rather than legal ones....


----------



## Steve Borden (25 February 2009)

basilio said:


> Silver bullets to get money back for Storm investors? Just can't see the banks or courts wearing this one.
> 
> Certainly there will be moral issues, but I just can't remember the last time the public won on a "moral" issue with the banks. I suspect the only justice obtainable will be natural justice rather than legal ones....




It may not be a silver bullet but the provision of a home loan to someone who could only afford the loan based on storm's projections or even a complete falsehood is the Bank's weak point.

The number of people who have obtained a loan when they shouldn't have is astounding, the relevant Ombudsman can't keep up with the complaints. 

If you tried to get a loan from the Bank based on made up information it could be considered fraud, what is it called when the Bank makes up the information?


----------



## basilio (25 February 2009)

> If you tried to get a loan from the Bank based on made up information it could be considered fraud, what is it called when the Bank makes up the information?




Clever business.... worth lots of bonuses...

Steve I would be delighted to see the loans set aside and all monies restored to the Storm retirees. But then where would you stop? 

I would suggest that in the current financial crisis many tens of thousands of borrowers - housing, personal loan, retail shop loans, would have supplied dodgy information. The various finance brokers and loan salesmen are extremely adept at massaging figures and pushing through loans. In America it became an art form.

This was the root of whole current problem - widely and totally unacceptable loan standards applied to millions of situations. In the end  because of the rapidly increasing price of houses it meant that unless you fudged the figures you couldn't get a loan.  Storm is a high profile example in an associated  field. And all the entities just turned a blind eye..

When the books are written about this unfolding financial disaster the storm issue will be in one of the teacups. (bad pun..)


----------



## Trevor_S (25 February 2009)

Steve Borden said:


> what is it called when the Bank makes up the information?




PROFIT if they make money out of it and LOSS if they don't.

Every P&L issued by a listed company has "made up" amounts on it.  The ONLY number I "trust" is the dividend, the rest is ephemeral.

As to those putting your trust in a Lawyer, call me skeptical... remember Storm manged to charm you, don't let your lawyers do the same thing.... not saying don't use them but BE CAREFUL.


----------



## bunyip (25 February 2009)

Steve Borden said:


> It may not be a silver bullet but the provision of a home loan to someone who could only afford the loan based on storm's projections or even a complete falsehood is the Bank's weak point.
> 
> The number of people who have obtained a loan when they shouldn't have is astounding, the relevant Ombudsman can't keep up with the complaints.
> 
> If you tried to get a loan from the Bank based on made up information it could be considered fraud, what is it called when the Bank makes up the information?




If loan applications contained information that was made up, is the bank likely to be the culprit? Would it be in the best interests of a bank to extend a loan to someone who is clearly going to be hard pressed to service the loan? Surely banks are interested in long term lending relationships with their clients, rather than high risk loans that are likely doomed to failure right from the outset.
Sure the banks can foreclose and get some or perhaps most of their money back, but successful longer term lending relationships are surely more appealing to them.


----------



## bunyip (25 February 2009)

Mash said:


> don't tar us all with the same brush.... I'd like to know who those people are who don't blame storm..maybe those that weren't double leveraged  ... and therefore haven't lost everything....makes for a better read but doesn't it...and how quickly you picked up on that one point... der...that's why they put that kind of comment in these stories. i have spoken to hundreds who blame both storm and the banks equally. The banks still have our money and we'll fight to get it back !







Once the borrower signed on the dotted line, he or she then became responsible for that decision, no matter what the outcome, and irrespective of how lousy the advice may have been.

So I'm wondering if any personal responsibility is being shouldered by those hundreds of Storm clients you've spoken to, or are they convinced it was all the fault of Storm and the banks?

And have the banks really got 'your' money, or have they simply got the money they were legally entitled to get by selling your investments to recoup as much of their loans as possible, given that the market meltdown placed them in serious risk of mass loan defaults by Storm clients. Margin loans are, afterall, structured to provide a high degree of protection to the lender if clients default on their loans.

No, I'm not trying to sink the boot in or rub salt in your wounds.....I know how gut-wrenching it can be to lose a substantial amount of money. Some of the stories I've read on this thread from Storm victims are quite distressing.
But really, some sort of balance and reality needs to prevail among those Storm victims who are vigorously pursuing the blame game.


----------



## basilio (25 February 2009)

> If loan applications contained information that was made up, is the bank likely to be the culprit? Would it be in the best interests of a bank to extend a loan to someone who is clearly going to be hard pressed to service the loan? Surely banks are interested in long term lending relationships with their clients, rather than high risk loans that are likely doomed to failure right from the outset.
> Sure the banks can foreclose and get some or perhaps most of their money back, but successful longer term lending relationships are surely more appealing to them.




Bitter, bitter, bitter laughs from the gallery, I suggest you ask the thousands of older bank employees who understood and agreed with what you are saying - and watched the entire philosophy get trashed in the last 10 years.

Once upon a time home loans were made carefully to people who  had to tell the truth on their applications and who the bank was going to see for the next 20 years. The new order of banking however ditched long term relationships for short term bonuses and the chickens have turned into emus which are going to bash their dunny doors down..

There is a real risk that the over lending by banks on unaffordable housing loans will result in widespread defalcations. At that stage the banks and, by definition, all of us are in trouble. That, by the way, is why I don't see teh law or the banks agreeing to return the loans.


----------



## Garpal Gumnut (25 February 2009)

Garpal Gumnut said:


> Sometimes no matter how sorry you feel for folk, you realise that some people are going to make the same old mistakes again and again and again.
> 
> On the http://sicag.info/ site, the SF Action Group are advising people to seek advice from a member of, wait for it, The Financial Planning Association.
> 
> ...






maccka said:


> GG - Who would YOU suggest they seek advice from?:




That is a very good question and I'd just make a few points, a Royal Commission may do a better job at recommendations.

1. The present financial planning industry is led by inept ex MLC and AMP salespeople and needs to be abolished.

2. Kickbacks from funds to planners placing people into that investment need to be banned.

3. The Financial Planners Association have the same standing as the Motor Trades association and the League of Dodgy Car Sellers, a workforce paid to sell to, not to ensure success the success of the mugs buying. They need to be abolished.

4. The punters themselves should be given public education on money management, saving and super, from Primary school onwards. Those who make unwise decisions need to be left to drift lower, those who prosper and invest wisely need to be rewarded.

5. Industry and employers need to be encouraged to educate every worker as to investment and saving.

6. The middle men, the planners, the banks and the tipsters, the runnyfunnymoney spruikers need to be watched by an organisation with balls, to quickly pursue and charge errant advice givers and charlatans.

7. ASIC needs to be abolished and replaced with an overarching body with teeth to provide transparent and effective  criminal sentences to wrongdoers.

In truth I cannot recommend anyone trustworthy for these poor bastards in Storm to see for advice. They are stuffed, but changes might prevent it happening again to others.

gg


----------



## Solly (25 February 2009)

*Slater & Gordon, the world's first law firm to list publicly....profit jumps 22%*

Full SMH story is here;

http://business.smh.com.au/business/slater--gordon-profit-jumps-22-20090225-8hup.html

Looks like the Storm clients are in good solid hands....


----------



## Mash (25 February 2009)

The banking industry needs a shake up.... that's why we are pushing for a parliamentary enquiry... not just for Storm clients but for those that may follow... Westpac was made to pay in the 90's for their abominations with the swiss franc debacle... now it's our turn ..."to keep the bastards honest"... FYI... loans approved before application date...WTF!!!....
FOS...Financial Ombudsman Service can only claim minimal amounts... along with ASIC another toothless tiger...and don't get me started on FPA.. Laws and regulations need to be changed... together we can force these changes... once again it may take time but I'm there for the long haul...not just for my own solution but for the good of many others!... I am no longer pessimistic..I will survive... and I will not stop when there are others who are willing to fight the Goliaths with me... We will finish strong!!!!


----------



## bunyip (25 February 2009)

Mash said:


> as usual you are unable to comprehend what is written... I didn't say illegal.... I said wrong..... but to give you insight into the allegations may prejudice the proceedings and claims....so you will just have to watch this space....let's just say the banks and other institutions are beginning to squirm.... it will take time... but like Damian says .. we have right on our side...




You have right on your side because Damian Scattani says so?? Well he would, wouldn't he!

I wonder if the intrepid Mr Scattani bothered to mention that in business and investment there are many practices that are wrong, greedy, unscrupulous and immoral, but are nevertheless legal.

I wonder if he mentioned that court cases are very difficult to win when the practices in question are legal in the eyes of the law?

I wonder did he mention that if the banks lose the court case they'll drag it out for years with one appeal after the other.

I wonder if he mentioned that this would suit his law firm down to the ground......big dollars for them if they can represent you Stormers in a protracted dispute. Guess who pays!

If you can take on the banks and come away with a win - a win that puts money in your pockets, not just your lawyers pockets, then I'll be genuinely happy for you. Believe me, I don't like banks. But realistically I don't like your chances, no matter what Damian Scattani tells you.


----------



## basilio (25 February 2009)

Good post GG on how to straighten out the financial services industry. 

Trouble is most of the players are in there to serve themselves. It would take a very "socialist, nanny " government to have the balls to put your recommendations a into place.  But then, when this whole sorry mess is over,perhaps the public will demand such action.  It could certainly be a policy platform for a reform government in the future.


----------



## Mash (25 February 2009)

bunyip....yes if we were told our margin loans were in fact in buffer...or even in margin call... we could have made an informed decision... but when you are not  sold out until 106% or higher with negative equity and the websites don't have up to date information (unit prices 2-3 days old) and the website can not reflect that the LVR is over 100% (just not supposed to get over this level) then who in fact has created the problem.... the banks......shock horror... the PDS... basically says.. this is the rules...but we can change them to suit ourselves and screw you...They can be beaten.. and God damn it... we will at least try to stand up to them and even if we fail (which I don't believe we will)... We will try...if not for ourselves... then maybe for our kids... lay down and roll over or get up and fight... I have chosen to fight!!!!!!


----------



## Mash (25 February 2009)

Bunyip... wonder no more... Yes ... Damian has pointed out all of the pitfalls you have mentioned.... but we have at this point basically got nothing left to lose...I expect that Slater & Gordon will make a packet....they are not a gov't initiated toothless tiger....  but the fight is no longer just for the storm client but way beyond... we live in a fortunate country where those that are least able to afford it can take on the might of those such as a bank... and not fear being shot in the street... we can but try....nothing ventured nothing gained.. I'm willing to try... as will our brothers in arms...


----------



## basilio (25 February 2009)

There is a point in fighting Mash et al. If only on principle.

I wonder though if going through the courts is the best way? I feel the legal system as it stands will tie everyone up for years until your broke.

Perhaps another strategy might be  public opinion. Do you think there could be an opportunity for a really hard documentary/movie based on the Storm story, the collusion of the banks and the impact this has had on the people? And by the way just opening up the idea of a such a documentary  could cause some consternation with the banks. Ironically you might even make a dollar out of the movie as well as forcing some sort of settlement. 

Another consideration would be attempting to lay criminal charges against the people you see as causing the problems. Again even the threat of such an action could get some results. I would open these conversations with your legal advisors. In the end you want a good result not just a protracted legal case.....


----------



## bunyip (25 February 2009)

Mash said:


> Bunyip... wonder no more... Yes ... Damian has pointed out all of the pitfalls you have mentioned.... but we have at this point basically got nothing left to lose...I expect that Slater & Gordon will make a packet....they are not a gov't initiated toothless tiger....  but the fight is no longer just for the storm client but way beyond... we live in a fortunate country where those that are least able to afford it can take on the might of those such as a bank... and not fear being shot in the street... we can but try....nothing ventured nothing gained.. I'm willing to try... as will our brothers in arms...




OK Mash.....I hope you get a positive outcome. 
As I've previously stated, I have a poor regard for banks and investment advisors.
So despite my belief that it'll be a waste of time and money, I'll be one of the first to say 'well done' if you come away with a win.


----------



## Mash (25 February 2009)

Thanks Bunyip.... we may be looking at the world through rose coloured glasses... but why not... no one would have thought only a few years ago that the US of A would have a black president....  may wonders never cease....  we have to have faith in making the world and our fantastic country a better place for all... that means all of us... together we stand.. divided we fall ....


----------



## Glen48 (25 February 2009)

Didn't know where to put this but it's a story about getting fleeced:
A couple of weeks ago a friend told me that someone she
 knew had their car broken into while they were at a football
 game. Their car was parked on the green which was adjacent
 to the football stadium and specially allotted to football
 fans. Things stolen from the car included a garage door
 remote control, some money and a GPS which had been
 prominently mounted on the dashboard.

When the victims got home, they found that their house had
 been ransacked and just about everything worth anything had
 been stolen.

The thieves had used the GPS to guide them to the house.
 They then used the garage remote control to open the garage
 door and gain entry to the house. The thieves knew the
 owners were at the football game, they knew what time the
 game was scheduled to finish and so they knew how much time
 they had to clean out the house. It would appear that they
 had brought a truck to empty the house of its contents.
  *** MOBILE PHONE ***
 I never thought of this.......
 This lady has now changed her habit of how she lists her
 names on her mobile phone after her handbag was stolen. Her
 handbag, which contained her cell phone, credit card,
 wallet... Etc...was stolen.

20 minutes later when she called her hubby, from a pay
 phone telling him what had happened, hubby says 'I
 received your text asking about our Pin number and I've
 replied a little while ago.'

When they rushed down to the bank, the bank staff told them
 all the money was already withdrawn. The thief had actually
 used the stolen cell phone to text 'hubby' in the
 contact list and got hold of the pin number. Within 20
 minutes he had withdrawn all the money from their bank
 account.
 *** Moral of the lesson:
 Do not disclose the relationship between you and the people
 in your contact list. 
Avoid using names like Home, Honey, Hubby, Sweetheart, Dad,
 Mom, etc.... 
And very importantly, when sensitive info is being asked
 through texts, CONFIRM by calling back. 
Also, when you're being text by friends or family to
 meet them somewhere, be sure to call back to confirm that
 the message came from them. If you don't reach them, be
 very careful about going places to meet 'family and
 friends' who text you.



Scary thought !!!


----------



## bunyip (25 February 2009)

basilio said:


> Once upon a time home loans were made carefully to people who  had to tell the truth on their applications and who the bank was going to see for the next 20 years. The new order of banking however ditched long term relationships for short term bonuses and the chickens have turned into emus which are going to bash their dunny doors down..




You seem to be suggesting that banks have no interest in long term lending relationships. I assure you they do.
Having said that, I don't doubt that some of their lending is short term bonus-based as well.
Irrespective of their lending culture, one of the main questions to be answered in a court case will be whether or not the banks did anything illegal in lending to Storm clients. A 'yes' answer is unlikely to be provable.


----------



## Mash (25 February 2009)

Glen48....Maybe you should have posted this along with all those bulk junk emails I recieve and delete..... now my turn to say ..AYK...now that's just stupid to text back details u know your partner already knows... ha ha ha... stupid...not really... just goes to show how easy it is to let your guard down and bang... you've been had


----------



## Julia (25 February 2009)

bunyip said:


> Irrespective of their lending culture, one of the main questions to be answered in a court case will be whether or not the banks did anything illegal in lending to Storm clients. A 'yes' answer is unlikely to be provable.



Which was my point a page and a half ago.


----------



## Julia (25 February 2009)

vincent191 said:


> I am not a lawyer and I don't know the difference between wrong and illegal. All I know is the bank has got the money and trying to get it back from them is harder than extracting teeth !!



You may not know the difference between wrong and illegal but you can bet your life that the bank does.



pilots said:


> Julia, The stupid ones are them who believe they can win any thing back from the banks. The lawyers are telling the wood ducks again, we will win this. LOL,LOL.



Yes, it seems that the very naivete and vulnerability which landed Storm investors in this mess via Storm's advice in the first place is alive and well, merely transferred to Slater & Gordon.  




Steve Borden said:


> It may not be a silver bullet but the provision of a home loan to someone who could only afford the loan based on storm's projections or even a complete falsehood is the Bank's weak point.



Where I'm still confused and puzzled is where any such 'falsehood' originated?
How on earth would it be in the banks' interests to falsify figures when such manipulations would almost certainly result in a default?
(being careful not to make any allegations here) it would be much easier to believe that Storm advisers could have presented the documentation in a less than truthful fashion to the banks.   Provided substantiating backup was submitted along with the application, I can't see how the banks will be liable for any such misrepresentation.





> If you tried to get a loan from the Bank based on made up information it could be considered fraud, what is it called when the Bank makes up the information?



Do you have proof that the bank 'made up the information'?


----------



## bunyip (25 February 2009)

Mash said:


> Thanks Bunyip.... we may be looking at the world through rose coloured glasses... but why not... no one would have thought only a few years ago that the US of A would have a black president....  may wonders never cease....  we have to have faith in making the world and our fantastic country a better place for all... that means all of us... together we stand.. divided we fall ....




Mash

Can you give us some insight about the basis on which Slater & Gordon will be paid to represent you?

No win no fee?

A client trust fund setup whereby you all put in a sum of money, and S & G draw from that at their discretion?

Something else?

Thanks.....just curious.


----------



## Mash (25 February 2009)

Bunyip..... you sound like a bank johnny.... You describe how a bank is supposed to act and how we all believe (or used to believe) a bank should act.... there seems to have been a shift in the way the banks are doing business....some of them... are franchisee's..some not....and the rewards for being "the highest lenders" are huge... all will be revealed...unless of course we are offered a substantial "settlement" to not reveal the real irregularities..... oooh.. what a wicked web they weave!!! 
Yes, we believe they disregarded usual practice when lending to storm clients... for their own short term benefit... they will be judged one way or another for their indiscretions!
Note from previous message:
Loan approved prior to application date ..... how can this be?????  go figure.....


----------



## bunyip (25 February 2009)

Julia said:


> You may not know the difference between wrong and illegal but you can bet your life that the bank does.
> 
> How on earth would it be in the banks' interests to falsify figures when such manipulations would almost certainly result in a default?
> (being careful not to make any allegations here) it would be much easier to believe that Storm advisers could have presented the documentation in a less than truthful fashion to the banks.   Provided substantiating backup was submitted along with the application, I can't see how the banks will be liable for any such misrepresentation.




I'm like you, Julia......I find it difficult to believe that a bank would consider it to be in their best interests to falsify figures to get a loan for someone who is likely to default.  Banks are by no means immune from taking losses from loan defaults.

As you've stated, it's more believable that a loan document may perhaps be falsified by a financial advisor applying for a loan on the clients behalf, with a view to collecting a massive upfront management fee based on a percentage of the loan amount.

I'd be very surprised if the banks didn't cover all their bases.


----------



## Julia (25 February 2009)

Garpal Gumnut said:


> 4. The punters themselves should be given public education on money management, saving and super, from Primary school onwards. Those who make unwise decisions need to be left to drift lower, those who prosper and invest wisely need to be rewarded.
> 
> 5. Industry and employers need to be encouraged to educate every worker as to investment and saving.
> 
> ...




gg: excellent points and I agree, but with qualifications on (4) and (5) above.
There is plenty of education out there if people choose to access it.
You are financially literate, are you not?   Why then can anyone else not similarly take advantage of available education?

I think there's a limit to what we can expect schools/teachers to take responsiblity for teaching individuals.  Surely it's not too much to expect that we can take responsibility ourselves for becoming financially literate.



bunyip said:


> You have right on your side because Damian Scattani says so?? Well he would, wouldn't he!
> 
> I wonder if the intrepid Mr Scattani bothered to mention that in business and investment there are many practices that are wrong, greedy, unscrupulous and immoral, but are nevertheless legal.
> 
> ...



Yes.   It's stuff like this that contributes to S & G's bottom line.
Extract from SMH article posted above:


> Slater & Gordon said there had been an increase in fee revenue from outside Victoria to 44% of total revenue due to its geographical diversification.
> 
> The company opened new offices in Tasmania and the Melbourne western suburb of Sunshine, and acquired the personal injuries practice of Brisbane firm Carter Capner.
> 
> It said there had been a large increase in shareholder and financial service enquiries from potential clients during the half year, most notably through the Centro class action and Storm Financial and Opes Prime matters.







> =basilio;402107]There is a point in fighting Mash et al. If only on principle.
> 
> I wonder though if going through the courts is the best way? I feel the legal system as it stands will tie everyone up for years until your broke.
> 
> Perhaps another strategy might be  public opinion. Do you think there could be an opportunity for a really hard documentary/movie based on the Storm story, the collusion of the banks and the impact this has had on the people? And by the way just opening up the idea of a such a documentary  could cause some consternation with the banks. Ironically you might even make a dollar out of the movie as well as forcing some sort of settlement.



Hasn't the 4 Corners programme already done this?   It barely raised a comment as far as I know.  And it was pretty sympathetic to investors.





> Another consideration would be attempting to lay criminal charges against the people you see as causing the problems. Again even the threat of such an action could get some results. I would open these conversations with your legal advisors. In the end you want a good result not just a protracted legal case.....



If criminal charges were a possibility one would assume S & G will already have this under control.

Mash, your zeal is understandable and I genuinely hope it's rewarded.
I just wonder if you have considered the personal toll that years of protracted court battles will have on your stress levels, not to mention the funding of such legal activities.
I, too, would be interested in the question Bunyip has asked about how the legal action is being funded?  Presumably no win, no pay?   If that's the case and if that's how it remains, then indeed you have nothing to lose it would seem.


----------



## bunyip (25 February 2009)

Mash said:


> Bunyip..... you sound like a bank johnny.... You describe how a bank is supposed to act and how we all believe (or used to believe) a bank should act.... there seems to have been a shift in the way the banks are doing business....some of them... are franchisee's..some not....and the rewards for being "the highest lenders" are huge... all will be revealed...unless of course we are offered a substantial "settlement" to not reveal the real irregularities..... oooh.. what a wicked web they weave!!!
> Yes, we believe they disregarded usual practice when lending to storm clients... for their own short term benefit... they will be judged one way or another for their indiscretions!
> Note from previous message:
> Loan approved prior to application date ..... how can this be?????  go figure.....




Well Mash - I assure you that I'm not and never have been a bank Johnny, nor have I worked in the financial industry. But I do have some knowledge of bank lending policies through loans I've taken out for investment in property and shares.


----------



## Steve Borden (25 February 2009)

Julia said:


> Do you have proof that the bank 'made up the information'?




From the instances I have seen over many years it is difficult to draw any other conclusion. Income figures are clearly made up when they have no basis in fact, and no they were not low doc loans. 

For example when the figures provided by the client to storm and then to the Bank are not the same as those that appear on the application but a self-funded retiree nevertheless meets the required commitment level. 

Or when the income amounts are based on a lender using projected income from an investment portfolio but neglecting to factor in the margin loan expense.

Or even using a projected income that includes income and growth to service the loans but not factoring in either redemption of the investment or an increasing margin loan.

As to evidence, the lack of substantiation of the figures used will be sufficient. The onus will be on the Bank to prove their figures were correct.

What's in it for the Bank, market share and profit, what's in it for the Banker,  bonuses and promotion. In the latter instance hopefully by the time it hits the fan you have moved on and it's a problem for the guy that replaced you.

Of course there was no thought to it going wrong to the extent it did so as long as the Bank got its money back that's all that ever really matters.

The Banks never really had a relationship with the client, it was simply transactional from their perspective, the relationship was run by storm and the Bank's were not 'allowed' to cross-sell to these clients. There was also a lingering view that when the next increase was being sought the deal would be churned to the Bank with the best offer. So to keep up your numbers you needed to do every deal you could to keep storm happy.


----------



## Glen48 (25 February 2009)

Mash
Shows you need a PIN for GPS some one asking for Bank PIN rather than not ringing should ring bells ( pardon the pun) I would rather ring than try and sms.
Junk Mail:
Hawke No Australian Child etc.
Steven : there will be no recession.
Chopper Ben: The recession will over by 2009
Now back to the Storm.


----------



## Solly (26 February 2009)

Julia said:


> .........................
> Mash, your zeal is understandable and I genuinely hope it's rewarded.
> I just wonder if you have considered the personal toll that years of protracted court battles will have on your stress levels, not to mention the funding of such legal activities.
> I, too, would be interested in the question Bunyip has asked about how the legal action is being funded?  Presumably no win, no pay?   If that's the case and if that's how it remains, then indeed you have nothing to lose it would seem.




Julia, I too have concerns about how the funding is being provided, also I believe at this point no position about launching a class action has been decided. With my limited exposure in this area, I hold reservations about how a class action can proceed, which leaves the question about how individual client funding will be achieved.

I cannot see the Banks parting with ANY money easily, I believe that if it does go the trial, there will be the posibility of years of protracted action, appeals etc.

I know that many ex-clients are still hurting but I fail to see how the blame can completely attributed to the banks......


----------



## Garpal Gumnut (26 February 2009)

ASIC now say they are looking at Storm and may prosecute those who gave advice to Storm investors.

That leaves a lot of leeway.

Let us hope for the punters' sake they have more intestinal fortitude than in the past.

http://www.abc.net.au/news/stories/2009/02/26/2501586.htm?section=justin

gg


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## numbercruncher (26 February 2009)

awesome stuff - be great to see some advisors/fee grabbers heads roll ...


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## Solly (26 February 2009)

From the story that gg posted

http://www.abc.net.au/news/stories/2009/02/26/2501586.htm


"Superannuation Minister Nick Sherry says he is meeting with banks to ask them not to foreclose on the people affected by the collapse."

What about those who have already been thrown out ???


----------



## Julia (26 February 2009)

The 'tone' of the report about ASIC does sound firmer than the usual procrastinating waffle from that organisation.   And at least it seems they are finally looking into Storm.

But if the money is all gone, how would they be anticipating that they could get investments back for clients?

Clearly much that we don't know.


----------



## Trevor_S (26 February 2009)

basilio said:


> Trouble is most of the players are in there to serve themselves.




Indeed, all the players, including the "investor".  There is nothing inherently wrong with that per se IMO.  No one was in the deal for any other reason then to make money.



basilio said:


> It would take a very "socialist, nanny " government to have the balls to put your recommendations a into place.  But then, when this whole sorry mess is over,perhaps the public will demand such action.




I disagree, people can demand legislative change and disclosure out the ying yang and it won't make an iota of difference except to have reams of paper less and less people will understand, and have politicians crow about  protecting their constituents with more laws..sigh  

To me, adding complexity is the wrong approach.  At the end of the day snake oil con men will still con those who have too much trust and are unable to see the con in front of them. When asked, I told several local people not to have anything to do with Storm for years beforehand, it was entirely obvious to me, with my skeptical mind that the thing was a house of cards at worst and a fleecing operation (due to exorbitant fees) at best, yet even when told this, most people still don't want to believe it, happy to believe they were paying through the nose for quality   For quite some time I was met with muffled laughter about my lack of insight, when they told me how well they were doing... legislation will NOT fix gullibility.  

The crux of the entire matter is that their remuneration is the principal driver of the behavior of most FPs (both in a good and bad way).  There are a few FPs out there that are fee for service but most people refuse to use them. I do think there are lots of decent FP's out there, like a truffle amongst fungi though, you need to spend time sniffing them out and understand completely what you are doing.

As has been stated before by me and others, it's a horrible situation you guys are in and you truly have my every empathy but to me the blame for it lies completely with the person in the mirror... that said, their does appear to be some suspicious behavior from STORM but unless they have done something illegal, then the fine print will protect them.



Mash said:


> bunyip....yes if we were told our margin loans were in fact in buffer...




Where you required to be told, or was the contact person for the banks to be Storm ? I thought you guys had delegated responsibility for decision making to Storm ?



Mash said:


> and the websites don't have up to date information (unit prices 2-3 days old) and the




I am personally not a big fan of unlisted funds, I would have gone ARG or STW etc in your situation.  Storm had a few too many fingers in the pie to my liking and that should have raised a red flag prior to speculating with them.  I use the word speculating as you guys were relying on hoped for capital gains to see you through  , anything the revolves around the greater fool theory is speculating to my mind. (hell lots of others, including Mr Buffett disagree with me on that but I am quite the conservative )



Mash said:


> We will try...if not for ourselves... then maybe for our kids... lay down and roll over or get up and fight... I have chosen to fight!!!!!!




and truly, best of luck to you, I just hope you don't suffer a double bought of pain and suffering.  My disdain for professionals unfortunately starts with lawyers.


----------



## willemrt (26 February 2009)

ASIC has admitted that it had complaints about Storm Financial back in 2006.

They say they found no reason to pursue them...hmm..

http://www.moneymanagement.com.au/article/ASIC-admits-to-Storm-Financial-complaints/468948.aspx


----------



## The Snake (26 February 2009)

As recently as two years ago, a couple of banks, namely the CBA and
National were involved in questionable lending on used cars to people 'in the
gulf'.    There were many loans set up for these people and after pressure
from different groups and I believe parliamentarians - BOTH banks wrote to 'these clients' and advised them that they were no longer required to pay their loan.   The heat from their questionable lending practices was becoming
unbearable........

  This INCLUDED the loans that were being paid ON TIME !!  In fact
there were some of the people who were actually disappointed that the
bank no longer wanted them to pay !!  Why ?   Well, for many of these people, even in the best of times it is difficult for them to get a loan.   Now that they had an opportunity to get a credit rating - something that is impossible to get if you can't get a loan - was whipped from under them.   There was only one reason these people had credit made available to them - Greed by the banks.


----------



## bunyip (26 February 2009)

Trevor_S said:


> When asked, I told several local people not to have anything to do with Storm for years beforehand, it was entirely obvious to me, with my skeptical mind that the thing was a house of cards at worst and a fleecing operation (due to exorbitant fees) at best, yet even when told this, most people still don't want to believe it, happy to believe they were paying through the nose for quality   For quite some time I was met with muffled laughter about my lack of insight, when they told me how well they were doing... legislation will NOT fix gullibility.




This is something that's always amazed me over the years. People ask for your views on a product or a service because they know you have experience in that area. 
If you tell then what they don't want to hear, they ignore your advice and go ahead with it anyway.

Somebody once asked for my views on a black box share trading software program that gave buy and sell signals each day, claimed something ridiculous like 30% monthly return , and had a 10 grand price tag.
I told him not to touch it, explained in great detail the reasons for my advice. He bought it anyway.
Then a few years later, same story with another acquaintance of mine....another black box share trading con, similar price tag, the bloke bought it after I told him it was a con.

The promise of big dollars nullifies all sense of caution, prudence and common sense in some people. It always has, it always will. A new batch of people are waiting to get fleeced by the next sharks who are swimming towards them.


----------



## Julia (26 February 2009)

FIDO's newsletter contains this link for Storm investors re ASIC's investigation.
http://www.fido.gov.au/asic/asic.nsf/byheadline/Storm+financial?openDocument


----------



## carey ramm (26 February 2009)

Looks like EC will make an appearance on 60 minutes this weekend!!!

http://sixtyminutes.ninemsn.com.au/article.aspx?id=75764

Will be interesting to see what they cover as i am aware they were looking at some of the home loan issues.... only the tip of the iceberg has been in the media to date.


----------



## Trevor_S (26 February 2009)

A couple more articles

http://www.abc.net.au/news/stories/2009/02/26/2502079.htm

http://www.abc.net.au/news/stories/2009/02/26/2501670.htm


----------



## bunyip (26 February 2009)

carey ramm said:


> Looks like EC will make an appearance on 60 minutes this weekend!!!
> 
> http://sixtyminutes.ninemsn.com.au/article.aspx?id=75764
> 
> Will be interesting to see what they cover as i am aware they were looking at some of the home loan issues.... only the tip of the iceberg has been in the media to date.




Well I hope the reporter who interviews him has a bit of fire in his or her belly, and won't let him get away with his usual dumb statements like 'this was an unprecedented event' and 'nobody saw this coming'. If the reporter has done his homework he'll know how to hit him with facts that show it wasn't an unprecedented event, and plenty of people saw it coming.

I've been very disappointed with the reporters who've interviewed him so far.....he tells them things that are blatantly inaccurate, and they just don't nail him on it at all. It seems to me that they haven't done their homework and don't know the facts well enough to counter his misinformation.


----------



## joeyr46 (26 February 2009)

bunyip said:


> Well I hope the reporter who interviews him has a bit of fire in his or her belly, and won't let him get away with his usual dumb statements like 'this was an unprecedented event' and 'nobody saw this coming'. If the reporter has done his homework he'll know how to hit him with facts that show it wasn't an unprecedented event, and plenty of people saw it coming.
> 
> I've been very disappointed with the reporters who've interviewed him so far.....he tells them things that are blatantly inaccurate, and they just don't nail him on it at all. It seems to me that they haven't done their homework and don't know the facts well enough to counter his misinformation.




He probably only agrees to go on when they agree to only ask certain questions (just like the politicians) so it's all fake really just for the semblance of news


----------



## Garpal Gumnut (26 February 2009)

carey ramm said:


> Looks like EC will make an appearance on 60 minutes this weekend!!!
> 
> http://sixtyminutes.ninemsn.com.au/article.aspx?id=75764
> 
> Will be interesting to see what they cover as i am aware they were looking at some of the home loan issues.... only the tip of the iceberg has been in the media to date.






bunyip said:


> Well I hope the reporter who interviews him has a bit of fire in his or her belly, and won't let him get away with his usual dumb statements like 'this was an unprecedented event' and 'nobody saw this coming'. If the reporter has done his homework he'll know how to hit him with facts that show it wasn't an unprecedented event, and plenty of people saw it coming.
> 
> I've been very disappointed with the reporters who've interviewed him so far.....he tells them things that are blatantly inaccurate, and they just don't nail him on it at all. It seems to me that they haven't done their homework and don't know the facts well enough to counter his misinformation.






joeyr46 said:


> He probably only agrees to go on when they agree to only ask certain questions (just like the politicians) so it's all fake really just for the semblance of news




With the utmost respect to sixtyminutes, they are not the brightest ponies in the paddock, so an expectation of financial insight may be past them.

Then again they may surprise with a naked punter in the wings to "shame" Manny.

I always put myself in to the other blokes shoes to understand these events.

If I were Manny I would.

1. Negotiate a very large payment for my appearance to an entity that couldn't be touched by a secondary lawsuit... superfund, family trust or overseas entity.

2. Pick the biggest idjjit (to borrow a phrase from Julia) on 60minutes tick tock  to interview me, I don't watch it so don't know who the resident "idjiit" is.

3. Choose the location with PR or advertising advice to provide subliminal assistance to my appearance.

4. Keep on repeating the message I need to get across, "Black Swan, CBA, Banks," etc etc etc 

5. Ensure my Channel 9 limo was of a stature befitting my ego, and then back to mansion to chill out.

gg


----------



## Julia (27 February 2009)

Garpal Gumnut said:


> With the utmost respect to sixtyminutes, they are not the brightest ponies in the paddock, so an expectation of financial insight may be past them.
> 
> Then again they may surprise with a naked punter in the wings to "shame" Manny.
> 
> ...




gg, clearly Manny would derive much benefit from your wisdom and public relations savvy.
Perhaps offer your services for a sum befitting your status?

For a percentage of such a sum I would be prepared to act as your agent, explaining to Manny how the services of Garpal Gumnut would quickly render him pure as the driven snow in the eyes of everyone concerned.


----------



## Garpal Gumnut (27 February 2009)

Julia said:


> gg, clearly Manny would derive much benefit from your wisdom and public relations savvy.
> Perhaps offer your services for a sum befitting your status?
> 
> For a percentage of such a sum I would be prepared to act as your agent, explaining to Manny how the services of Garpal Gumnut would quickly render him pure as the driven snow in the eyes of everyone concerned.




lol

5%

I am in more or less constant contact with Manny's dealings as a mate is a footman at Palazzo Cassimatis.

It is much funnier than anyone realises, unless you were a Storm punter of course.

gg


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## Trevor_S (27 February 2009)

bunyip said:


> Well I hope the reporter who interviews him has a bit of fire in his or her belly,




I was listening to an interview on the radio this afternoon with the SICAG guy, Mark.  It was interesting when pressed about the culpability of Storm investors, he dodged the question totally and placed all the blame on Storm and in particular the Banks... with all due respect to his situation, sounds like he would make an excellent politician  blame everyone else and dodge the questions that are difficult.


----------



## Glen48 (27 February 2009)

GG would EC need a F P to decide on how best to spend the money from  1 Hour or would he take his own advise and buy shares?
The first thing any one should do is take their passport but then they have right,s like the Female from Bonds getting $40K a week for flogging undies and nothing can be done about you take $4k from a bank you get 10yrs.


----------



## Garpal Gumnut (27 February 2009)

Glen48 said:


> GG would EC need a F P to decide on how best to spend the money from  1 Hour or would he take his own advise and buy shares?
> The first thing any one should do is take their passport but then they have right,s like the Female from Bonds getting $40K a week for flogging undies and nothing can be done about you take $4k from a bank you get 10yrs.




A very valid point Glen48.

I have always profited from Financial Planners so cannot give advice to punters wishing to lose all their dough and sell their children in to slavery and prostitution. There is no easy way to do it without paying fees!

The third Mrs Gumnut during the tech boom was in to financial planning in a big way and we visited one.

He spent the entire interview answering his mobile discussing marina off the plan schemes. During one long conversation he excused himself to walk out along Sturt St. and I took the opportunity to relieve him of a rather nice chair which I placed in the back carpark and retrieved later.

I sit upon it as I type and it is the best I've ever had from a financial planner.

gg


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## Glen48 (27 February 2009)

I guess it a blessing that Patel has been collared as one could end up with body parts from a donor F P causing the the recipient to act strangely and start them uttering strange statements such as this bail out will work or no one could have seen this stock market crash coming, would you like a Boiled sweet little Boy, we will keep fighting until my jet leaves?
I guess after a hard day you have to migrate to the Sea View for a cold one?


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## Glen48 (27 February 2009)

Just come back from the Redcliffe Leagues Club Hic  burp word is EC was there on the week end for the game and EC ended up having a slash....both wrists and ended up in Hospital burp .. just a rumour but I suppose hic check him out on 1 hour to see if there are any signs....although depends when he did the interview...


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## bunyip (28 February 2009)

Solly said:


> *Slater & Gordon, the world's first law firm to list publicly....profit jumps 22%*
> 
> Full SMH story is here;
> 
> ...




No doubt Slater & Gordon are delighted at the prospect of further increasing their profits courtesy of sizeable injection of funds from mauled Storm clients!


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## Macquack (28 February 2009)

Glen48 said:


> I guess it a blessing that Patel has been collared as one could end up with body parts from a donor F P causing the the recipient to act strangely and start them uttering strange statements such as this bail out will work or no one could have seen this stock market crash coming, would you like a Boiled sweet little Boy, we will keep fighting until my jet leaves?
> I guess after a hard day you have to migrate to the Sea View for a cold one?




Good stuff from the "Cryptic Kid"


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## Solly (1 March 2009)

*Sixty Minutes tonight:  "The Perfect Storm"*

Reporter: Ellen Fanning  Producer: Jonathan Harley 

...."on Sunday night, they'll see Storm's boss face the music. 

But it's also the story of the banks and loans that raise serious questions indeed."

Story overview here and transcript will also be posted later here as well.
http://sixtyminutes.ninemsn.com.au/article.aspx?id=757649


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## mrfmad (1 March 2009)

pilots said:


> Swazi, Sorry that you have lost so much. You say you want respectful solutions, First DON'T wast any more money chasing what you have lost, its GONE.  Stop all the blame game, most of the fault here was your own, if I was to buy XYZ shares to day and they go bad, should I blame the broker that sold them to me, or should I blame the bank that let me have that let me have the money, or should I blame XYZ????????     Storm is just one of the many that WILL go to the wall this coming year.




Yes i would blame your broker if you had put in a sell and he didnt put in your sell and you lost everything.
You are all asuming, and making comments on little bits of information. But every Storm client had a different position ie LVR circumstances etc. 
You all keep trying to blame Storm Only. Or clients. Well if i get a margin call and i dont get the call & all my assets are sold without a CALL! My document states i am to be Called Not Storm. Then how is that not the bloody banks fault.
Also who was looking after the clients during tha ASIC investigation that were all sold down during this time. Storm were not allowed to. So i guess thats storms fault too. Or who's fault is that. 
So yes we all share in the blame  ASIC, STORM, CLIENTS, BANKS, & FPA .
The captain of the ship must go down with his ship EC & is responsible for his crew, bit hard to correct when the banks sell everything from under you. Then when it all goes pear shaped lets dig up as much crap on the company as we can. 
MMM no one posted about Storm when they were making millions for the last 10 years or more for their clients.

So Swazi is right we all need to stop posting crap about hearsay, untruths etc. Move on. Stop rubbing salt into the wounds of those down and out.
Wish you well Swazi.

Oh thats right we are all just greedy


----------



## pilots (1 March 2009)

mrfmad said:


> Yes i would blame your broker if you had put in a sell and he didnt put in your sell and you lost everything.
> You are all asuming, and making comments on little bits of information. But every Storm client had a different position ie LVR circumstances etc.
> You all keep trying to blame Storm Only. Or clients. Well if i get a margin call and i dont get the call & all my assets are sold without a CALL! My document states i am to be Called Not Storm. Then how is that not the bloody banks fault.
> Also who was looking after the clients during tha ASIC investigation that were all sold down during this time. Storm were not allowed to. So i guess thats storms fault too. Or who's fault is that.
> ...




GREED is the word that got you all in to trouble in the first place.


----------



## Mash (1 March 2009)

mrfmad.... just a reminder that the likes of pilots,GG,julia, glen48 really have no idea what all the facts are... and no matter how we try to explain..... they don't care...and don't really want to know the facts... it's just a bit of fun to stick it to anyone they can.... those of us who have a vested interest to seeing this thing to it's best positive outcome can be found on other forums.... these guys at least occasionally provide me with some comic relief ... taking a swipe is soooo much easier... and requires much less in the intestinal fortitude and grey matter department.... so take what they say with a grain of salt...and treat most of their comments with the contempt they deserve... it does help just to vent but doesn't it....:


----------



## shibby (1 March 2009)

pilots said:


> GREED is the word that got you all in to trouble in the first place.




Please explain why you think storm victims are greedy - have a look at us, *really *have a look at us, you have seen us on the TV we are not high flyers we are simple Mums and Dads the majority over 60 who have retired, had some super and didn't really want to go on the pension.  
I can only speak for myself and a few others that I know personally we were not promised millions I was promised a return of 8% I was promised and recieved an income of $37,000 per annum are any of those figures greed, why are you so hateful I really dont understand you, the majority of us are just bewildered and scared and by now so tired of it all.  
Its always the same word greed, is there some thing so wrong with your soul that you can't look at those faces and some how relate it back to your own parents?  
Obviously I  haven't learnt anything about financial planning or planners along the way but the one thing I have learnt  is  never say words to the effect - Oh I would never do that - it's surpising what life throws you. Another good one to think about is - There but for the Grace of God go I. 
There is a little band of you who continue to put the boot in time and time again and to you I also say - humility is a special gift or maybe its a life lesson, why son't you look the word up in the dictionary there still could be time.


----------



## pilots (1 March 2009)

Mash said:


> mrfmad.... just a reminder that the likes of pilots,GG,julia, glen48 really have no idea what all the facts are... and no matter how we try to explain..... they don't care...and don't really want to know the facts... it's just a bit of fun to stick it to anyone they can.... those of us who have a vested interest to seeing this thing to it's best positive outcome can be found on other forums.... these guys at least occasionally provide me with some comic relief ... taking a swipe is soooo much easier... and requires much less in the intestinal fortitude and grey matter department.... so take what they say with a grain of salt...and treat most of their comments with the contempt they deserve... it does help just to vent but doesn't it....:




Sorry Mash, we do know what the facts are, thats why none of us lost on Storm. We would NEVER buy in to any thing, that they have to use high powered, high commissioned sales people to sell it.
If you was told just how much commission some of the sales people was making you would more mad, than you are now.
The sad fact here is that the high dollar sales people ONLY LOOK FOR THE WOOD DUCKS.


----------



## Glen48 (1 March 2009)

Shibby.
Did Storm tell you to put your house in to hock to get this 8% return?
Did you look at how much money you were putting in and do some quick figures to work out if it sounded like a good deal?
I have about 35 k in Gold and being greedy hoping it will hit 1K + soon but I know the risks and at present the USD looks like winning out in the FX market and Gold will drop or stay low at this stage I am trying to read as much as possible on Gold and if necessary take a loss and live to fight another day... to day then every thing is a gamble from driving to work, buying a house and getting married.
Going by what you have told us told us the Storm deal sounds ok????
On thing about the net you can find out any thing from around the World some times days before you read in the the Papers so what ever you have an investment in be alert ... not the type of lert's we have running the country.


----------



## shibby (1 March 2009)

Glen48 said:


> Shibby.
> Did Storm tell you to put your house in to hock to get this 8% return?
> Did you look at how much money you were putting in and do some quick figures to work out if it sounded like a good deal?



Yes and yes and I was alert I had an excel sheet running all the time and by July 2008 I had reached the hysterical point and wanted out and they wouldn't cash me up I was fobbed off time and time again and I don't know why I allowed myself to be fobbed off but I did. I came into storm through the back door and had a 4yr relationship with my FP before storm and it was her I trusted not storm and that is what I am angry about all the rest I take responsibility for. But ignoring my orders to sell is the issue for me. And how the others must feel that had no warning I can only imagine. 
I feel I was tortured but they would be bewildered and devastated you can see it in their faces. So be kind not everone is computer literate at our age.
Also another issue to take note of is if your in your 60's compulsory super hasn't always been law.


----------



## Julia (1 March 2009)

bunyip said:


> Mash
> 
> Can you give us some insight about the basis on which Slater & Gordon will be paid to represent you?
> 
> ...






Julia said:


> Mash, your zeal is understandable and I genuinely hope it's rewarded.
> I just wonder if you have considered the personal toll that years of protracted court battles will have on your stress levels, not to mention the funding of such legal activities.
> 
> I, too, would be interested in the question Bunyip has asked about how the legal action is being funded?  Presumably no win, no pay?   If that's the case and if that's how it remains, then indeed you have nothing to lose it would seem.






Mash said:


> mrfmad.... just a reminder that the likes of pilots,GG,julia, glen48 really have no idea what all the facts are... and no matter how we try to explain..... they don't care...and don't really want to know the facts... it's just a bit of fun to stick it to anyone they can.... those of us who have a vested interest to seeing this thing to it's best positive outcome can be found on other forums.... these guys at least occasionally provide me with some comic relief ... taking a swipe is soooo much easier... and requires much less in the intestinal fortitude and grey matter department.... so take what they say with a grain of salt...and treat most of their comments with the contempt they deserve... it does help just to vent but doesn't it....:



Mash, you're correct:  we don't know all the facts by any means.
Several of us have, however, attempted to warn you that the same naivete which allowed you to be bewitched by Storm's promises may well be letting you in for further expense and disappointment by the good Mr Scattini.

You've not responded to either Bunyip's or my question as to how the legal challenge is being funded.   We've suggested that if it's a case of 'no win, no fee', then (other than the emotional cost) you would seem to have nothing to lose by going along with any class action, if such an action does happen.

But in the absence of your telling us that the legal work will be on such a basis, you can hardly be surprised that we would assume you are all paying S & G for their advice.   If so, I sincerely hope you get value for money.
But maybe, instead of getting angry with us for pointing out possible future pitfalls, consider that S & G just may have their own interests as a priority, as did the Cassimatis.


----------



## Black and White (1 March 2009)

I have read a lot of comments about the Storm Debacle and most do not know the facts. Common remarks relate to their wealth (assuming that this makes them some sort of expert) - but nobody asks where the wealth came from (huge fees and charges accumulated from clients over many years). People talk about taking on the banks for calling in the margin loans (hello! this is exactly what happens if additional funds are not tipped in - why is anyone surprised at that happening?) Nobody seems to be asking why the ASIC were allowing this company to operate in the manner that it did. Gearing anyone (including old retirees) that came in the door.  AND, finally, their business practices were NOT the norm in the financial planning industry. Yes there were some that wanted to be clones of the Cassimatis method of making huge amounts of money - to them I say hope you end up in the same amount of trouble.


----------



## Black and White (1 March 2009)

P.S.
Don't be too hard on the retirees that went to Storm - if Cassimatis is good at anything it is salesmanship. He is the consumate salesman and has won many many sales awards over the years with MLC topping the entire country for selling life insurance products. You don't top Australia year after year after year for many years unless you know how to hit people's hot buttons - many invested out of fear (fear of having nothing in retirement) rather than greed. The greedy amongst them got to learn a great and sorry lesson.


----------



## Mash (1 March 2009)

to set your mind at ease yes....if a class action is commenced it will be "no win no pay".... I thought that was pretty obvious.... we don't have a lot of spare cash anymore !!!!!


----------



## GumbyLearner (1 March 2009)

Black and White said:


> P.S.
> Don't be too hard on the retirees that went to Storm - if Cassimatis is good at anything it is salesmanship. He is the consumate salesman and has won many many sales awards over the years with MLC topping the entire country for selling life insurance products. You don't top Australia year after year after year for many years unless you know how to hit people's hot buttons - many invested out of fear (fear of having nothing in retirement) rather than greed. The greedy amongst them got to learn a great and sorry lesson.




I think the greed argument could also be applied to the boss himself. He got too greedy and the complex instruments he was touting have come back to bust him. 

I agree with GG. He is the wise guy on this thread. Why trust or use FP's? DIY and keep safe. Most FP's are 'pants' to use British Slang.


----------



## Mash (1 March 2009)

Black & White... we are "surprised" about the sell because
1. we were not advised of a margin call  - therefore not given the chance to tip more in!!!
and
2. The loans were in negative equity before the sell did happen.

Double whammy!!!!


----------



## Glen48 (1 March 2009)

I read in  today's Sunday Mail about the next new scam with people putting in their life savings etc.. on would think after Storm they would keep their money under a mattress ..


----------



## bunyip (1 March 2009)

mrfmad said:


> Yes i would blame your broker if you had put in a sell and he didnt put in your sell and you lost everything.
> You are all asuming, and making comments on little bits of information. But every Storm client had a different position ie LVR circumstances etc.
> You all keep trying to blame Storm Only. Or clients. Well if i get a margin call and i dont get the call & all my assets are sold without a CALL! My document states i am to be Called Not Storm. Then how is that not the bloody banks fault.
> Also who was looking after the clients during tha ASIC investigation that were all sold down during this time. Storm were not allowed to. So i guess thats storms fault too. Or who's fault is that.
> ...





You're displaying similar tendencies to some of the other Storm clients I've seen interviewed......don't blame the Storm, blame the banks.


You may wish to consider the following points.......

1. Storm should have converted you to cash, or at least advised you to convert to cash, long before you even came close to margin call. 

2. Storm clients, as the ones whose investment funds were on the line, should have kept themselves updated on the state of the market and the economy. Yes, I know you thought you'd employed professionals to do this for you, and you assumed they were competent. But a business owner should never take his managers competence for granted......managers need regular monitoring and guidance, they need to be subjected to regular performance reviews. Stockmarket investment is a business investment just like any other kind of business. The same rules apply.

3. It may have been the banks responsibility to advise you when you were in margin call. Or the responsibility may have belonged to Storm. I don't know. But again I refer to point 1 above......your investments should have been converted to cash long before you were anywhere near margin call. And that responsibility rested firstly with Storm, and secondly with you, the clients, if Storm didn't do it.
As the market fell and fell and fell, and the stockmarket and economic crisis were plastered all over the media every single day, nobody, not Storm, not yourselves, nobody, took the prudent action of extracting you from this perilous situation before the value of your investments was completely decimated.


4. Storm geared you to highly risky levels. Worse still, they appear to have had no contingency plan for minimising the risk in the event of the stockmarket changing direction.

5. Storm slugged you heavily with up front fees that were well in excess of what was normal in the financial planning industry.


I don't think pure greed was at play in the case of every Storm victim. Different people, different situations. Some clients were clearly naive about investment matters, and were simply not aware of the risks they were taking. Some were not wealthy people at all, but were just trying to build up a nest egg so they could be self-funded in retirement. I feel truly sorry for these people. 

Then on the other end of the scale are the people who were already wealthy when they joined Storm....many houses owned outright, several million dollars worth of assets, enough passive income to retire in comfort. Not only that, but successful business careers behind them. The sort of people who have much experience of life, have invested money for years, and should have at least a reasonable level of investment knowledge, not to mention a fair level of common sense.
It's these sort of people who cause me to shake my head in disbelief when I hear of them putting all these assets at risk by gearing heavily in something as risky as the stockmarket.
One of these people said they were worth more than 4 million when they joined up with Storm, and they got up to a net worth of 12 million.
I find it hard to comprehend why, on the way to 12 million, they wouldn't have paused somewhere, say at the 7 million dollar mark, and thought something along the lines of the following....

_*'Let's see - we're worth 7 million. If we put half of that into secure assets such as residential real estate in growth areas, and get 5% annual return, we'll have an annual income of 175k, which is enough to live in luxury for the rest of our lives, help our family, go on overseas trips, enjoy life. Not only that, but our real estate will produce solid capital growth over time. We'll leave the other 3.5 million in the stockmarket, but in a conservative way that won't put the rest of our assets at risk'.*_

When people are set up for life with many millions of dollars in assets, but heavily gear those assets to get even more wealth and income, it begs the question - 'how much wealth and income do these people think they need? 

You don't need a crystal ball to know how much money you'll need to live comfortably for the rest of your life. You need a calculator and a bit of common sense.
These people should hardly be surprised or offended when told they were being greedy.


----------



## Judd (1 March 2009)

Mash said:


> to set your mind at ease yes....if a class action is commenced it will be "no win no pay".... I thought that was pretty obvious.... we don't have a lot of spare cash anymore !!!!!




That worries me a little because if you lose and costs are awarded against you...............

But as you say most of Storm's clients no longer have a lot of spare cash.


----------



## Solly (1 March 2009)

Solly said:


> *Sixty Minutes tonight:  "The Perfect Storm"*
> 
> Reporter: Ellen Fanning  Producer: Jonathan Harley
> 
> ...






The CBA response to 60 Minutes is on the site now..


http://sixtyminutes.ninemsn.com.au/article.aspx?id=757649


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## mrfmad (1 March 2009)

bunyip said:


> You're displaying similar tendencies to some of the other Storm clients I've seen interviewed......don't blame the Storm, blame the banks.
> 
> You may wish to consider the following points.......
> 
> ...




I think you need to be corrected yet again My post says
So yes we all share in the blame ASIC, STORM, CLIENTS, BANKS, & FPA . If you care to check.
That was my point entirely this forum is not listening to anything written from storm clients other than what they want to hear or read. Oh and by the way i couldnt agree with your post more. But that wouldnt matter would it.


----------



## MR. (1 March 2009)

Solly said:


> The CBA response to 60 Minutes is on the site now..
> 
> 
> http://sixtyminutes.ninemsn.com.au/article.aspx?id=757649




Commonwealth Bank Response to 60 Minutes as per link above:



> Commonwealth Bank Response to 60 Minutes:
> 
> As explained, the CBA does not believe it is appropriate for a representative to appear on your program.
> 
> ...


----------



## Macquack (1 March 2009)

bunyip said:


> You don't need a crystal ball to know how much money you'll need to live comfortably for the rest of your life. You need a calculator and a bit of common sense.
> These people should hardly be surprised or offended when told they were being greedy.




I disagree with this statement. I think you do need a crystal ball to know how much you'll need to live comfortably for the rest of your life.

For many investors, Storm provided the crystal ball and sold the intangible dream of future wealth.




Black and White said:


> ...many invested out of fear (fear of having nothing in retirement) rather than greed.




I agree with this. Storm traded on the fear of investors not having enough in retirement if they did not get on the Storm bandwagon.


----------



## Solly (1 March 2009)

mrfmad said:


> I think you need to be corrected yet again My post says
> So yes we all share in the blame ASIC, STORM, CLIENTS, BANKS, & FPA . If you care to check.
> That was my point entirely this forum is not listening to anything written from storm clients other than what they want to hear or read. Oh and by the way i couldnt agree with your post more. But that wouldnt matter would it.





I watched the 60 minutes story & have read the response from the CBA.
I'd would never have invested in Storm but that's only as a result my past experiences. Storm's modus operandi would never have passed my smell test.
Two things that I observed tonight were the naivety of Storm clients and the utter disbelief from EC that it all came unstuck. All very sad.

Don't be too hard on yourself, I bet there's many people on these forums, including me that have made major fark ups and could proudly were the Dumbass tag for past less than successful actions and decisions.  It doesn't matter what others think about what's happened to you and the other ex clients, it's irrelevant. The only thing that really matters is to seek a remedy that's acceptable to you, keep moving forward, keep your nose up and never, never, never stop until you reach that point. 


The three most useless things after you've pass V1 and rotate are the altitude above you, the runway behind you, and a tenth of a second ago.


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## Julia (1 March 2009)

bunyip said:


> 3. It may have been the banks responsibility to advise you when you were in margin call. Or the responsibility may have belonged to Storm. I don't know.



From the CBA statement following the 60 Minutes programme (thanks, Solly) it would seem that all communications to the clients were via Storm, and there was no responsibility for the bank to communicate directly with clients.





Judd said:


> That worries me a little because if you lose and costs are awarded against you...............




That's an interesting point, Judd.   Storm clients:   has Mr Scattini discussed this possible outcome and what would then happen?   Would S & G. pay the costs?
(And thanks for confirming 'no win no fee' basis of potential class action.


----------



## Julia (1 March 2009)

Who watched the '60 Minutes' programme on Storm?   What did you think?

It reminded me why I usually take pains to avoid this programme, along with most commercial television.

The reporter did a great job of putting words into the mouths of investors vis a vis the push polling that goes on in surveys for political parties.

That aside, I'm really sorry for the people who clearly were not amongst the greedy and whose lives have been so utterly devastated.


----------



## bunyip (1 March 2009)

mrfmad said:


> I think you need to be corrected yet again My post says
> So yes we all share in the blame ASIC, STORM, CLIENTS, BANKS, & FPA . If you care to check.
> That was my point entirely this forum is not listening to anything written from storm clients other than what they want to hear or read. Oh and by the way i couldnt agree with your post more. But that wouldnt matter would it.






Good of you to point out where you think I need to be corrected. You are, however, wasting your time, as I was already fully aware of you having said 'we all share in the blame ASIC, STORM, CLIENTS, BANKS, & FPA'.

I'm also aware that you came across as thinking that people were somewhat unreasonable in blaming Storm. 

Furthermore, that you made no mention of the fact that if Storm was on the ball, and if Storm clients were on the ball, margin calls would never have occurred.......clients would have quit their investments long before the situation became catastrophic.

Your agreement with my post is noted. You're right...it doesn't really matter that you agree with me. But it does at least show some balance in your thinking.


----------



## Julia (1 March 2009)

Macquack said:


> I disagree with this statement. I think you do need a crystal ball to know how much you'll need to live comfortably for the rest of your life.



Why?   There are many retirement calculators on the internet, e.g. via FIDO/ASIC, and most of the banks have these also.
And even without such an aid it's not too difficult to look at the amount of Super you have, allow for it to earn x% p.a., relate that to your life expectancy, and consider whether the resulting p.a. income is sufficient to meet your retirement needs.  That will give a close enough estimate to be a reasonable guide.


----------



## Macquack (1 March 2009)

Julia said:


> Why?   There are many retirement calculators on the internet, e.g. via FIDO/ASIC, and most of the banks have these also.
> And even without such an aid it's not too difficult to look at the amount of Super you have, *allow for it to earn x% p.a., *relate that to your life expectancy, and consider whether the resulting p.a. income is sufficient to meet your retirement needs.  That will give a close enough estimate to be a reasonable guide.




"allow for it to earn x% p.a.". Thats the first use of the crystal ball - guessing the x%.

A second use of the crystall ball is guessing inflation rates into the future.

Sorry, going off topic.


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## MR. (1 March 2009)

60 minutes.......... 


> “But this could have happened to any one of us.”



No.   I do not think so.

.

It’s the banks fault for loaning people a lot of money on perhaps low incomes!  .....  Or is it?  

Four Corners nor 60 Minutes explained this to the masses, so the outcome of the story is a little one sided. I watch these reports and the stories bring up, but do not explain,  why or how a bank would loan so much money to an individual.  

If someone has  $100,000- (in an asset or cash) and the bank was asked for a loan over that $100,000 why wouldn’t the bank loan someone perhaps as much as say $300,000 to invest in equities.  So $400,000 can now be invested in equities. The catch being if those equities dropped by 25% (from $400,000 to $300,000)  the bank has the right to sell those remaining equities to recoup the debt.  

Is this not  a fair business transaction?


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## Glen48 (2 March 2009)

On the face of it it looks like Storm might have done a bit of _Sub prime_ and altered the incomes to get the applications over the line, EC on 1 hour claims he didn't know wo filled in the application stating an income of 104K  surely there must be a signature of the Storm official who did the paper work???
Also how could some one not be asking question went you are geared for 1 or 2 M$?


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## MR. (2 March 2009)

So in addition to my last post above I can only assume:



Mash said:


> The banks still have our money and we'll fight to get it back !




No...  It appears to me the bank has their money. Your money is lost along with money of mine and millions of others by that invisible hand that hit all equity markets.


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## MR. (2 March 2009)

Glen48 said:


> On the face of it it looks like Storm might have done a bit of _Sub prime_ and altered the incomes to get the applications over the line, EC on 1 hour claims he didn't know wo filled in the application stating an income of 104K  surely there must be a signature of the Storm official who did the paper work???




If fraud is involved I hope the outcome brings some justice for Storm's clients even if not financial.


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## pilots (2 March 2009)

MR. said:


> So in addition to my last post above I can only assume:
> 
> 
> 
> No...  It appears to me the bank has their money. Your money is lost along with money of mine and millions of others by that invisible hand that hit all equity markets.




Your post is so true.
To all of you who think they will win against the banks, you are in for a shock.


----------



## Solly (2 March 2009)

Solly said:


> The CBA response to 60 Minutes is on the site now..
> 
> 
> http://sixtyminutes.ninemsn.com.au/article.aspx?id=757649





Here's the story on youtube, 

Part 1 of 2
http://www.youtube.com/watch?v=4KLUKsI-4Xs


and Part 2 of 2
http://www.youtube.com/watch?v=1T1fscqdPWo


----------



## Solly (2 March 2009)

*"Storm faces start of flood of legal claims"*

"CLIENTS of Storm Financial have started lodging legal claims against the failed wealth adviser over the financial advice they were offered."

"Emmanuel and Julie Cassimatis, appear to have received millions for providing the financial software that Storm used to generate the advice."

Full story in SMH by Colin Kruger is here;

http://business.smh.com.au/business/storm-faces-start-of-flood-of-legal-claims-20090301-8lfc.html


----------



## Smiley (2 March 2009)

If stormified clients take on CBS or BOQ and lose they will be up for legal fees, though one can acquire insurance for such a possibility.

Nothing has happened yet and it will be interesting to see if anyone gets compensation through legal channels.

I take full responsibility for taking their advice; have always budgeted and did not act out of fear but because there were supposed to be trigger points to safeguard us and thought I could thus supplement the pension.  I did ask and was told that I would always be taken out to cover the house mortgage.  We could have gotten back into the market without fees (as owned brokerage) but Storm did not do . . . 

Personally, time to refinance, move on psychologically, emotionally and plan ways to live on the aged pension in a few years as a result of this catastrophe . . .


Here is a good link for range of loans - all banks listed with up to date rates:

http://www.canstar.com.au/


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## nomore4s (2 March 2009)

Julia said:


> Who watched the '60 Minutes' programme on Storm?   What did you think?
> 
> It reminded me why I usually take pains to avoid this programme, along with most commercial television.
> 
> ...




I agree Julia, that was a very poor report. There was no real information just alot of finger pointing at the banks and Storm. The reporter was very poor, imo.
That sort of cr@p belongs more on ACA then 60min.


----------



## Monario (2 March 2009)

EC   What a dumbass pr!c...........

I like the part where he explains the Claytons loan in the 60 mins report.

" its a loan you have when you dont really have a loan, good debt, someone who borrows for consumption is bad, but borrowing for a house is good"...


I went againsr Storms advise and bought a house, Ec was dead against property, and that the only way you should ever buy a house is with cash from your investment, until then all monies should flow there...

I actually recieved a letter saying that this decision to buy a house was not supported by storm, and will be the ruin of my future, Now is that scare mongering or what?

I put 25% deposit on my home, and it did not effect my contributions to the investment at all, thank christ I did not take his advice and put it in the market!!!!

EC.... Your a d!ck!!!


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## pilots (2 March 2009)

Just watched 60 minutes on U Tube, the show is still not worth watching.
Storm, what a sales man, 7% up front, he was getting up to $2oo,ooo on a single sale. As to the wood ducks, have you not been told about a balanced portfolio??. I will bet you that the same lot will now dump money in to a fighting fund to take on the banks.


----------



## nomore4s (2 March 2009)

IMO this whole debacle is fear, greed and stupidity all round.

Fear - mainly on the part of Storms clients, fear of missing out, fear of not having enough money to retire on. This fear was taken advantage of by Storm.

Greed - On the part of everyone imo. Storm and the banks obviously but also storm clients who saw $$$ signs rolling in front of thier eyes and all commonsense went out the window.

Stupidity - Again all round. How Storm and especially the banks didn't think this would eventually end badly is beyond me, truly stupid. The banks probably did realise it would eventually end badly but due to the risks of margin loans being in their favour probably just didn't care and fleeced what they could while they could (greed again) but they could still lose out due to the amount of debt outstanding, so still stupid in my book.
The clients to a lesser degree were also stupid imo, where was the due dilligence? Where was the commonsense, that if you leverage yourself and assets to the hilt there are risks involved? They can cry foul all they want but any sort of research or risk management on their part would have saved them alot of heartache. After all it is their money and they are responsible for it. I understand they were "conned" and sweet talked into these set ups but it was still their responsibility to understand the risks involved.

my , flame away.


----------



## bunyip (2 March 2009)

Smiley said:


> If stormified clients take on CBS or BOQ and lose they will be up for legal fees, though one can acquire insurance for such a possibility.
> 
> Nothing has happened yet and it will be interesting to see if anyone gets compensation through legal channels.
> 
> ...




Smiley

Your philosophical, honest and realistic attitude are to be admired. 
No moaning or ranting from you, just a willingness to roll up your sleeves and get on with life.
With such an outlook I have no doubt you'll lead a fulfilling life irrespective of your financial situation.
I wish you well.


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## MR. (2 March 2009)

Smiley said:


> there were supposed to be trigger points to safeguard us and thought I could thus supplement the pension.  I did ask and was told that I would always be taken out to cover the house mortgage.  We could have gotten back into the market without fees (as owned brokerage) but Storm did not do . . .




Storm did not have the balls to make the *hard *decisions when required.  .............  

What if the markets rose right after we recommend everyone to sell their portfolio's?

There's that Storm crowd "they chose to sell out at the very bottom of the market...  Idiots! .... When the markets down you buy, not sell, but they chose to sell at the very bottom! Ha ... idiots"

If the banks hadn't of made their decision to sell, I wonder if Storm would have ever recommended to it's clients to sell! 
The markets are lower in value now than late last year.


----------



## -Bevo- (2 March 2009)

MR. said:


> Storm did not have the balls to make the *hard *decisions when required.  .............
> 
> What if the markets rose right after we recommend everyone to sell their portfolio's?
> 
> ...




From what I understand if Storm advised people to sell out of the market then Storms income would be Nil, instead they brought in at the market dips then topped up the loans as the market increased just before it went lower again, in which case they would repeat the process more commissions and fatter pay checks for EC. Storm did recommend that investors switch to cash in October last year but the damaged had already been done, I just watch the 60 minutes story there is some familiar faces there, cant believe they were caught up in this don't think they are greedy as some people have claimed just incredibly gullible.
EC should do jail time for this.


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## Julia (2 March 2009)

bunyip said:


> Smiley
> 
> Your philosophical, honest and realistic attitude are to be admired.
> No moaning or ranting from you, just a willingness to roll up your sleeves and get on with life.
> ...



I couldn't agree more.  Great attitude, Smiley.   Every best wish to you.

The following is an article from yesterday's "Sunday Mail".



> Storm Financial Founders Emmanuel and Julie Cassimatis will be called before a parliamentary inquiry into financial collapses that have cost investors their life savings.
> 
> The nine month investigation by the joint committee on corporation and financial services will examine what measures are needed to protect investors from massive failures such as those involving Storm, MFS and Opes Prime in the past year.
> 
> ...


----------



## mrfmad (2 March 2009)

Solly said:


> I watched the 60 minutes story & have read the response from the CBA.
> I'd would never have invested in Storm but that's only as a result my past experiences. Storm's modus operandi would never have passed my smell test.
> Two things that I observed tonight were the naivety of Storm clients and the utter disbelief from EC that it all came unstuck. All very sad.
> 
> ...




Thanks Solly

Isnt that funny my husband and i was only saying just the other day that the only posts on here worth listening to or reading are yours.

We can only follow the facts. Everyone else has so much knowledge on here about Storm model its amazing. 
Actualy pretty much what ever they have written is often very wrong or just a get the client for stupidity & EC for being a Scase. 

But I was gassed with oxygen and greed overwhelmed ME, 
I  asked MY cult if I could have a free holiday as it took them months of sales pitches and wear and tear on me to join.

I had no knowledge of what I was doing so storm tricked me and asked me to take all my plans and documents for another opinion anywhere that I wanted. What a con.

Then they diddnt even hassle me to join this hurt my ego as they hassled everyone else.

 Maybe I was blown away by those huge fees and couldnt add up how much that would cost me in the future as I was dumb.

When I left for my holiday stress started to set in and MY useless computer data at the commonwealth bank was 2 days old So MY bank couldnt direct me properly & it was all MY fault. I needed to send them new software. 

Then  boss EC came along and said we will all convert to cash until market stabilises WOW what a stupid idea! he had converting to cash LOL BWAAAAAAH. We signed peperwork to do this immediately.

Then I failed to hand deliver my paperwork into the bank  personaly myself. So my paperwork with storm to sell never went through at all with MY bank until I was in margin call.

Actualy I asked my bank to let me please go over margin another 20% so I can lose some more money. They obliged.

I then asked them now I am more than 20% over margin please be greedy or feel free to take it. Or now make the call.

As my bank document said it would be sold regardless if i met margin. But hey I could controll the banks.  

Remember MY bank details was 2 days old or more as I had failed to update my banks computer programme. With the market fluctuating what an idiot I was to not to know I was getting into margin. How foolish of me.

Then my mate ASIC came along and helped me by freezing all advice so more margins calls could go through. They decided this would help me out a bit.

With no money being made from EC, who cannot legally give advice for the next couple of months. My company which i controlled was sent into liquidation. Thanks ASIC & a bank selling out its own people.

I was then left in Limbo to watch MY money disappear and guess what? 
I am now called Brainwashed Stupid Greedy and MY bank is now a winner.

So where is your common sense guys. 
Think about it Why would someone send their own company that they have hundreds of millions invested in into financial ruin.? Oh thats right they did it for the 2 mil dividend.

Now I get to hear how you all knew what they and I was doing all along and how much of a scam etc  
Come on guys some people are seriously hurting.
Some people have been seriously misslead & ripped off by EC. 

Do you know everyone has their own way of making money and every person would disagree in a room on how to do it? 
I believe most people who buy property portfolios leverage from equity in their own home, or even to purchase a business etc. Its called using the banks money to make money. Yes when the wheels fall off you loose your home. 

Many of us have done this lately actualy people have been buying boats, cars, toys riding the boom. I have not done this ever. Nor would I. 
Perhaps its those people above who have spent endless credit card $ and now cannot pay that have put the economy in this situation.

Its just an opinion which is like a bum hole everyone has one.

Thank you Solly for your words. You are a very kind & helpful poster.
I am already back in the market using Storms model the way it should have been used. Yes my paper loss is big but I have all my chickens. Which means I will recover as soon as the market does. I have learned some valuable lessons & will make sure this never happens again.

This time I am at the stern not EC & I will rise above this and move on.


----------



## MR. (2 March 2009)

mrfmad said:


> Thanks Solly
> 
> Isnt that funny my husband and i was only saying just the other day that the only posts on here worth listening to or reading are yours.




Nice to know where we all stand.  Happy to have waisted my time here. 

Good day!


----------



## mrfmad (2 March 2009)

MR. said:


> Nice to know where we all stand.  Happy to have waisted my time here.
> 
> Good day!




This post was not meant to be offensive to you MR or other posters with useful info.
Solly just happened to stand out AAA from the rest this is a forum isnt it? I thought a discussion not a dissing match was a fair point. 

Why is it that forums all end up like this. Where if you post just a view & I very seldom do, you get a bite. But when you dont post at all you get told that not contributing to forums & only read posts you get a bite. 

Please except my humble apologies MR


----------



## Julia (2 March 2009)

mrfmad said:


> .
> ....... this is a forum isnt it? I thought a discussion not a dissing match was a fair point.






That is an excellent point.  Yes, it is definitely a forum.  It is not a support group. 

A stock market forum is a venue where members with coinciding and different views have the opportunity to express these views, in the knowledge that anything we put up will be subject to assessment, then either support or criticism by other members.

  You and some others have interpreted objective commentary - and even similarly objective warnings about the possibility of being taken for yet another ride by S. & G. -  as personal criticism.

You might like to consider reading through some threads other than Storm's so you can see that a robust exchange is the norm.

I'm really a bit confused about why you and some other Storm investors are continuing to post on this site when you are so unhappy with the commentary you've provoked (apart from Solly, of course.)
There must be heaps of Storm support groups flourishing by now.

The above is just intended to be a rational response to your post which I did find a bit hard to follow.  It's not intended as criticism.  I wish you well in whatever you decide to do.


----------



## bunyip (2 March 2009)

mrfmad said:


> This post was not meant to be offensive to you MR or other posters with useful info.
> Solly just happened to stand out AAA from the rest this is a forum isnt it? I thought a discussion not a dissing match was a fair point.
> 
> Why is it that forums all end up like this. Where if you post just a view & I very seldom do, you get a bite. But when you dont post at all you get told that not contributing to forums & only read posts you get a bite.
> ...




Well now, I wonder if I'll get an apology as well? If my memory is correct it was only yesterday that you told me - _'Oh and by the way i couldnt agree with your post more.'_

More than 1300 posts have been sent into this Storm thread so far. I've read all of them - have you?
I ask this question because of your statement that you and you husband regard only Solly's posts as being worth reading.
Maybe if you and your husband were to dig a little deeper you'd find that some of the posters are a lot more genuine and helpful and caring than you think.

Sure, there are people on here who have displayed very narrow-minded and unhelpful views by putting 100% of the blame on Storm victims, and show not the slightest empathy for the dreadful situation you find yourselves in.

But at the other end of the scale there have been many people apart from Solly who have offered  encouragement, constructive but fair criticism, balanced viewpoints, helpful advice, and have openly stated that they feel genuinely sorry for your plight.

Surely these people deserve a little better from you than an emotional outburst that pretty much tells them they're a waste of time.

Julia makes a good point......this forum is not a support group, but rather, its objective is to provide a venue where members with coinciding and different views have the opportunity to express these views, in the knowledge that anything they put up will be subject to assessment, then either support or criticism by other members.

If these objectives are not to your liking, nobody is forcing you to stay on this forum. Indeed, there would seem little point in you doing so if you feel that pretty much everyone except Solly is a fool who's having a go at you.


----------



## Solly (3 March 2009)

*"Regulators probe anomalies in bank information to Storm Financial clients"*

Here is a story from a few days ago that was sent to me by an ex Storm client.
Some interesting claims about over inflated incomes on the bank loan documents.

I wonder who filled out the income details and when were these details inserted in the documents ? 

And at what stage of "completness" did the clients sign these applications?

Tony Raggatt's Townsville Bulletin article is here.

http://http://www.townsvillebulletin.com.au/article/2009/02/28/41771_hpnews.html


----------



## bunyip (3 March 2009)

Solly said:


> *"Regulators probe anomalies in bank information to Storm Financial clients"*
> 
> Here is a story from a few days ago that was sent to me by an ex Storm client.
> Some interesting claims about over inflated incomes on the bank loan documents.
> ...




One of the women interviewed on Sixty Minutes said Storm told her to just sign the loan application documents and they'd fill in the details. 
Almost unbelievably, she did so, clearly having no understanding of the level of risk you take when you sign something without being fully aware of what you're signing.
No wonder she got taken for a ride by having a high monthly income inserted in the documentation!
However, I can't imagine why the bank would not verify the income before lending the money. It's certainly not to their benefit to lend money to someone who can't service the loan, and then have to foreclose on that client a bit further down the track. Foreclosures don't always recoup what the bank is owed.

Another Stormer who apparently had little understanding of the risk he was taking was the bloke on Sixty Minutes who took a 2 million dollar loan on an income of 26 grand. He expressed surprise that the bank had granted him such a large loan, given his low income.
Yet he took the loan anyway, obviously giving little or no thought as to how he'd meet the loan commitments with an income that was barely enough to live on.
The question is, WHY? Why would anyone, no matter how lacking they were in investment savvy, take a 2 million loan on a low income, without knowing how they'd pay back the loan or meet the interest?
Why would they do that? It just doesn't make sense.


----------



## Trevor_S (3 March 2009)

http://www.townsvillebulletin.com.au/article/2009/03/02/42135_news.html



> Townsville's top suburb has hit the big time by coming second in a list of Queensland's most elite suburbs.






> The controversial downfall of failed Townsville-based investment group Storm Financial is most likely behind the suburb's startling rise, according to Real Estate Institute of Queensland chairman Peter McGrath.
> 
> "Castle Hill is the number one spot in Townsville and where many wealthy residents choose to live, but with the unfortunate demise of Storm Financial, many of those people have been forced to sell," he said.




So did Storm clients purchase up there based on unrealised gains or ... ?  any current clients care to comment ?



> "We do know that there are people in that area that are Storm clients and will probably have to sell," he said.
> 
> "The good news is they will probably be the beneficiaries of that growth but they're certainly not going to get the prices that they were getting 12 months ago.
> 
> ...


----------



## mrfmad (3 March 2009)

bunyip said:


> Well now, I wonder if I'll get an apology as well? If my memory is correct it was only yesterday that you told me - _'Oh and by the way i couldnt agree with your post more.'_
> 
> More than 1300 posts have been sent into this Storm thread so far. I've read all of them - have you?
> I ask this question because of your statement that you and you husband regard only Solly's posts as being worth reading.
> ...




No because it was still full of wrong information. Hense my Funny response about my Storm experience. But you were entitiled to your opinion. 
So Im not sure what id be saying sorry to you for???


----------



## mrfmad (3 March 2009)

Julia said:


> That is an excellent point.  Yes, it is definitely a forum.  It is not a support group.
> 
> A stock market forum is a venue where members with coinciding and different views have the opportunity to express these views, in the knowledge that anything we put up will be subject to assessment, then either support or criticism by other members.
> 
> ...




Thanks I will take that on board.

Sorry for posting above and to all it has offended.

Forgive me after reading post after post of incorrect information I just couldnt help myself anymore & had to post the above. So far Media  ie 60 min etc have done the crappiest interviews all information is get EC & Storm clients knew nothing.  The people they gather up for their interviews would have to be of the lower education class this is why they would spit in his face, didnt know how they were going to pay for it etc. We many intelligent people got caught up in this & it would be lovely for the clients if people could see the real picture as the bank did fold on the client.

 I was not conned with a sales pitch by EC, my documents were pure with correct wages, I knew how the loan was going to be paid. So someone is not telling the truth.
So I come on here & read about all stocks along with many other stock forums. I am also a day trader & in an investment club. So i guess i am saying no im not on here for a storm support group, nor do i need one.

I just think that some others Storm members who do need help dont need to read how they were greedy, stupid, no common sense etc as something happened to them that was out of their control.
I dont think i could have such an opinion unless i had the facts to call people names when there is a far bigger picture to the model than a forum member would know. 
It has now grown to a chineese whisper not a forum if you get what i mean.

Again i thank you for your post.

As i said before i never post & will return back to reading forums. 
I await the backlash for my opinion.

Sorry to the Storm people for your loss & hope it turns around soon for you.
Sorry for offending so many on the forum.


----------



## MR. (3 March 2009)

mrfmad said:


> Thanks Solly
> 
> Isnt that funny my husband and i was only saying just the other day that the only posts on here worth listening to or reading are yours.




My point is all posts are worth reading.  Someone has taken the time to write the post.  You don't have to agree with them and many I do not.  I still read them looking for information which might help me. Agree Solly has done a terrific job here.   



mrfmad said:


> I am already back in the market using Storms model the way it should have been used.




IMO,  I still see danger here.  Hope you're not leveraged in the market looking for the market to rise!  Short maybe?  But that's a fair risk as well.  However perhaps the next person will disagree with me and agree with you.  Well this is my backlash no.......  feed back.  I don't mind at all being wrong.  Just my opinion. 



mrfmad said:


> As i said before i never post & will return back to reading forums.
> I await the backlash for my opinion.


----------



## Solly (3 March 2009)

It appears that EC & JC are not happy with the 60 Minutes Story......

Check out the latest on 
cassimatis.com.au.


(The Wilkinson Media site states that Peter Wilkinson is an ex-Reporter/Producer for 60 Minutes.)


----------



## Trevor_S (3 March 2009)

mrfmad said:


> So far Media  ie 60 min etc have done the crappiest interviews all information is get EC & Storm clients knew nothing.




be aware this is no different to nearly every media outlet and nearly every media story, it's just different this time because you are on the inside...  their job is to sell air time to advertisers and ad's in newspapers, not necessarily report  fact   be aware of this the next time you turn your tv on or read a newspaper.  That said, most of what the rest of us on here know comes from the media BUT we also get the advantage of hearing some of the personal stories from those affected.  Maybe at the end of the day there is a book in it for you and you might be able to recoup some of your losses 	:alcohol:

There is an interview with Tony D'Aloisio from ASIC about STORM etc at about 13minutes (ABCs iview is unmetered on my ISP and you need a fast intenet connection for it to stream porperly) on last nights Lateline Business for those interested.  

http://www.abc.net.au/iview/#/view/345066


----------



## Garpal Gumnut (3 March 2009)

Solly said:


> It appears that EC & JC are not happy with the 60 Minutes Story......
> 
> Check out the latest on
> cassimatis.com.au.
> ...




This thread was becoming a bit maudling until your post Solly.

I wondered whether anyone would pick on Peter's connection to Sixty Minutes.

Its one of the problems when you have a big pile and no income, as Manny is finding out, its all outgoings to people who you know may be spinning you, and no ingoings. He may be getting shafted mightily.

I presume he is paying for the PR input.

As Augustus de Morgan so famously said.

“Great fleas have little fleas upon their backs to bite 'em, And little fleas have lesser fleas, and so ad infinitum, And the great fleas themselves, in turn, have greater fleas to go on, While these again have greater still, and greater still, and so on. ”

What a hoot.

gg

ps Manny, when you read this (as I know you do) I can give you excellent advice for $400 an hour and promise not to expose you to second rate journalism and I won't be as you said Ms Fanning was – "you pass as the best bully in the school ground."
Email me on ggumnut@yahoo.com

gg


----------



## bunyip (3 March 2009)

mrfmad said:


> No because it was still full of wrong information. Hense my Funny response about my Storm experience. But you were entitiled to your opinion.




You also are entitled to your opionon, which just a couple of days ago was (to quote you).... _'Oh and by the way i couldn't agree with your post more.'_

As for your 'funny' response about your Storm experience - one our members emailed me privately and described your attemted humour as 'babbling, almost incoherent nonsense'.

I wish you well in using Storms model to recover your losses. For your sake I hope you know what you're doing.


----------



## Solly (3 March 2009)

Trevor_S said:


> be aware this is no different to nearly every media outlet and nearly every media story, it's just different this time because you are on the inside...  their job is to sell air time to advertisers and ad's in newspapers, not necessarily report  fact   be aware of this the next time you turn your tv on or read a newspaper.  That said, most of what the rest of us on here know comes from the media BUT we also get the advantage of hearing some of the personal stories from those affected.  Maybe at the end of the day there is a book in it for you and you might be able to recoup some of your losses 	:alcohol:
> 
> There is an interview with Tony D'Aloisio from ASIC about STORM etc at about 13minutes (ABCs iview is unmetered on my ISP and you need a fast intenet connection for it to stream porperly) on last nights Lateline Business for those interested.
> 
> http://www.abc.net.au/iview/#/view/345066





Thanks Trevor, I missed this going to air and on iView, I just got off a red eye special and I had a look at the transcript at;

http://www.abc.net.au/lateline/business/items/200903/s2505525.htm

TONY D'ALOISIO said...." as our investigations progress, we think there's questions around the issues of advice and conflict of interest, and we're going to pursue those investigations. And if we feel that they are sufficient, we will then look at a case, both to look at clarifying the law, there's no case law in the operation of these advice provisions and the conflict of interest provisions in the Corporations Act, and secondly to see if whether under Section 50 of the ASIC Act there is a public interest in us taking action to assist the investors."

Which could result in compensation for the investors.....But where will the money come from to pay any compensation...?


----------



## Solly (3 March 2009)

Solly said:


> It appears that EC & JC are not happy with the 60 Minutes Story......
> 
> Check out the latest on
> cassimatis.com.au.
> ...





In the "Recent Questions" tab , there is a reference to 60 Minutes' sponsor Toyota - "and what the Japanese corporations like Toyota did for allied POWs in WWII" .... Can anybody make any sense of the question or for that matter the answer...? Mr Wilkinson can you clarify and fix the sub edit....?


----------



## Cosgrove Fenton (3 March 2009)

Just read what the 74yr old nurse Leith on the EC website  wanting to blame the banks and blaming 60 minutes for "costing us the chance" to have a crack at the bank. WTF who conned this poor old dear into investing in the market in the first place! Did the banks knock on her door or was it Storm? Certainly the banks played a role and need to acknowledge this but the people who put her at risk in the first place were Storm - no question!
As for Allan and Jennifer who have so manny (ha ha) happy memories, this advice - your power, phone and fuel bills plus your kids education cannot be paid by sending a happy snap as payment of account however if it is cold you can burn them as a form of heating. Still, happy times! At least you got to go on the trip!


----------



## Solly (4 March 2009)

Garpal Gumnut said:


> ps Manny, when you read this (as I know you do) I can give you excellent advice for $400 an hour and promise not to expose you to second rate journalism and I won't be as you said Ms Fanning was – "you pass as the best bully in the school ground."
> Email me on ggumnut@yahoo.com
> 
> gg




gg 
If Ms Fanning was seen as a school groud bully, let's hope the EC &  Chas Licciardello paths never cross.......or on second thoughts maybe that would be an interesting exchange....now where did I put Julian Morrow's contact details.......


----------



## Pindibog (4 March 2009)

can anyone tell me the thread number and who posted the processes to go through. I remember reading I had to complain to bank first (have and got the reply I thought I would) before I can proceed through FOS etc. I believe if I have issues with storm I need to complain to Worrell's first ?? before I can go to FOS etc.


----------



## stung (4 March 2009)

I am back at work 7 days a week and will have my debt down to about $500 000 by Christmas. It is going to be very slow going however. 

I was wondering if I should draw some of the money out to put on the ASX 200 when there are signs that things are improving. I feel this is may help to pay the loan off quicker.  

I no longer have much confidence when it comes to decision making. What do others think? Is this a reasonable thing to do or am I being dumb all over again?


----------



## Garpal Gumnut (4 March 2009)

stung said:


> I am back at work 7 days a week and will have my debt down to about $500 000 by Christmas. It is going to be very slow going however.
> 
> I was wondering if I should draw some of the money out to put on the ASX 200 when there are signs that things are improving. I feel this is may help to pay the loan off quicker.
> 
> I no longer have much confidence when it comes to decision making. What do others think? Is this a reasonable thing to do or am I being dumb all over again?




stung, mate,

As an ex Storm client your decision making would rank with that of a victim of a Nigerian scammer.

There is no easier way to put it. You are an account waiting to be plucked.

Stick any spare dough in a CBA passbook, take your 1% pa and pray that CBA don't go down the gurgler.

That would be the safest for you.

gg


----------



## SJG1974 (4 March 2009)

Hi all.....long time reader, first time poster.

Before I start, let me clarify that I am not a Storm client, nor do I know anyone who is.  i have no involvement whatsoever. 

I am amazed that EC has been able to get this far without (from what I can see) accepting one ounce of responsibility for what has happened to his clients.

Sure, the banks have to accept responsibility for approving loans to these people (however Im sure they wont), but the CBA didn't run Storm's seminars, write their SoAs nor encourage clients to gear themselves to the hilt- EC and his representatives did that.

And this "black swan" event crap he goes on about....it isn't as if the market has fallen 50% overnight...it has taken a good 15 months to get to this stage.  The warning signs were numerous during early 2008 that things werent good.  Why didn't EC protect his clients and take the safe route even as late as mid 2008?....surely thats what these clients paid their 7% up-front for- "expert" advice.  I know of several friends whose advisers got them out of the market in June 2008 and sat them in cash ever since....so for EC to say that everyone has been affected is rubbish- it is those that haven't received good advice have been affected to this extent.

As far as I'm concerned what happened in November/December when the CBA and Storm started bickering is irrelevant- it should never have gone that far....clients should have been protected much earlier than this.  I cannot believe that some Storm clients will defend Cassimatis and blame the CBA just because they had a couple of good holidays. How do they think he paid for them???with their 7% fees!

And to say he is fighting for justice for his clients is easy to say when deep down he knows that they won't receive any....it is just his way of deflecting blame.

I have asked a few questions on his website, but received no response which isn't surprising.  Not expecting to either.


----------



## Solly (4 March 2009)

Ahh...a mystery solved.....EC & JC weren't on the BRW Rich list, but were on 

the reputable Qld "Sunday Mail's Queensland Top-100 Rich List"

according to this correction in the SMH.. (4th paragraph)

http://www.smh.com.au/news/business/money/planning/loose-change/2009/03/02/1235842325859.html


----------



## Solly (4 March 2009)

Solly said:


> In the "Recent Questions" tab , there is a reference to 60 Minutes' sponsor Toyota - "and what the Japanese corporations like Toyota did for allied POWs in WWII" .... Can anybody make any sense of the question or for that matter the answer...? Mr Wilkinson can you clarify and fix the sub edit....?




The question and answer are now gone from the site ..... probably for the better... I now feel better and and can drive my Toyota Crown guilt free.....


----------



## Garpal Gumnut (4 March 2009)

Solly said:


> The question and answer are now gone from the site ..... probably for the better... I now feel better and and can drive my Toyota Crown guilt free.....




The whole site is a bit bizarre.

The forum ain't a forum, the media leads to potted summaries of the answers to questions and many questions are unanswered. Its all over the place. It must be an all in one PR deal with Peter Wilkinson.

Its actually an old website from the early Storm/MLC days, resurrected for the penultimate chapter.

Toyota Crown eh a bit of a toff then Solly.

gg


----------



## MR. (4 March 2009)

Garpal Gumnut said:


> stung, mate,
> 
> As an ex Storm client your decision making would rank with that of a victim of a Nigerian scammer.
> 
> ...



Stung, ofcoarse you're not going to stick any spare dough in a CBA account getting 0.8 - 2.5% interest >10K.  You'd be paying off that debt. To withdraw some cash to put back into the market (perhaps years away) is the same as borrowing to put in the stock market. You'd agree.  

Perhaps an advantage in addition to any potential market gains in the market would be the tax on any gains will be offset because of your loses. An accountant would quickly answer that, but no rush.

I personally would never take a loan to buy any stocks.


----------



## Julia (4 March 2009)

Garpal Gumnut said:


> stung, mate,
> 
> As an ex Storm client your decision making would rank with that of a victim of a Nigerian scammer.
> 
> There is no easier way to put it. You are an account waiting to be plucked.




gg, that's a bit tough on Stung.  He/she did acknowledge that his/her decision making capacity was pretty much shot right now, hence asking the question on here.  

I reckon just recognising that he/she isn't up to making good decisions yet is a step on the road to recovery.

Stung, gg's advice is good.  Leave the money in the bank.  It's govt guaranteed so far.  Sorry you're having to work 7 days.  Don't kill yourself working  in an effort to expunge the misery.   
All the best.  Everything passes.

Cheers
Julia


----------



## Cosgrove Fenton (5 March 2009)

stung said:


> I am back at work 7 days a week and will have my debt down to about $500 000 by Christmas. It is going to be very slow going however.
> 
> I was wondering if I should draw some of the money out to put on the ASX 200 when there are signs that things are improving. I feel this is may help to pay the loan off quicker.
> 
> I no longer have much confidence when it comes to decision making. What do others think? Is this a reasonable thing to do or am I being dumb all over again?




Stung - we are in uncertain times, do not throw good money after bad. The Dow will begin with a 5 and the all ords a 2 before long do not risk it!


----------



## MR. (5 March 2009)

stung said:


> I was wondering if I should draw some of the money out to put on the ASX 200 when there are signs that things are improving. I feel this is may help to pay the loan off quicker.






Julia said:


> Stung, gg's advice is good.  Leave the money in the bank.  It's govt guaranteed so far.




Huh?  get off the pot!  Do you think Stung has money is in the bank with debts of $500K+ ??????? 

Stung has asked if perhaps some put into the ASX200 will help the debt be payed back a little quicker. 

Too quick to reply?

Cosgrove Fenton, makes sense! post 1337


----------



## stung (5 March 2009)

Re my last question.

Sorry for being unclear.
I was referring to the money that I have parked in a mortgage offset account. As I am sure you know it reduces the principle and therefore interest but it can be accessed as desired.
I was thinking of taking perhaps $50k maximum and dribbling it in small quantities into the stock market perhaps when the resource sector starts to show signs of recovery and rehires again and when the economy does a turnaround. I was looking ahead a few years. Given that the all ords is so low, is this not an opportunity for the future? Or am I falling for a Nigerian. 

Sorry to  upset the knowlegable by my questions but I thought I would ask around before doing anything. After all in earlier posts storm clients were accused of not doing any research or utilising similar forums as this to gain insight.


----------



## Solly (5 March 2009)

Garpal Gumnut said:


> The whole site is a bit bizarre.
> 
> The forum ain't a forum, the media leads to potted summaries of the answers to questions and many questions are unanswered. Its all over the place. It must be an all in one PR deal with Peter Wilkinson.
> 
> ...





I agree that the website isn't the easiest to nagivate, looks a bit like one of those "out of the box" setups with presupplied templates that just need renaming. It aint Web2 !

As for being a bit of toff....doesn't everybody drive wearing a cloth peaked cap, driving goggles, a silk duster, goatskin pantaloons and gloves while doing 35kph in the far right hand lane when driving along Airport Drive.........


----------



## Julia (5 March 2009)

MR. said:


> Huh?  get off the pot!  Do you think Stung has money is in the bank with debts of $500K+ ???????
> 
> Stung has asked if perhaps some put into the ASX200 will help the debt be payed back a little quicker.



I saw what he asked.   If he was talking about putting money into the market, presumably he had some money to do this.
He has subsequently confirmed this to be the case, so maybe it's you who should 'get off the pot' whatever that means.


----------



## bunyip (5 March 2009)

stung said:


> Re my last question.
> 
> Given that the all ords is so low, is this not an opportunity for the future? Or am I falling for a Nigerian.
> 
> Sorry to  upset the knowlegable by my questions but I thought I would ask around before doing anything. After all in earlier posts storm clients were accused of not doing any research or utilising similar forums as this to gain insight.




Yes, it's an opportunity for the future, as long as you don't make the mistake of trying to utilise that opportunity by buying now while the market is still plunging. Mind you, some notable people are doing just that - Gerry Harvey and Warren Buffet to name just a couple. But these blokes have plenty of dough and are able to buy stocks and put them in the bottom draw till they come good. Drawdowns don't affect them like they affect you and me. Even so, Harvey was down 1.5 billion on his stock purchases of his own company. And that was a few weeks ago - both the market and HVN shares have fallen further since then. I reckon even Gerry Harvey must be starting to scratch his head and recoginse that his timing is off - his losses are probably around the 2 billion mark by now. 

Stung, you need to know what you're doing if you're going to play the stockmarket. There will undoubtedly be some great opportunities when this economic crisis is behind us and confidence returns. The market will once again turn bullish and stock buyers will have smiles on their faces.
But you need to be able to recognise when the market trend is bullish, and it sure as hell isn't now. What appears to be cheap now will likely look pretty damn expensive when the market falls further.
I suggest you spend $30 or so and buy yourself a copy of 'Secrets For Profiting In Bull And Bear Markets', by Stan Weinstein. The book is available in the financial section of most bookshops and some newsagents.
If Storm clients had been familiar with the Weinstein methodology they would have known to get out of the market long before their accounts were fatally injured.
Weinstein's strategies will at least give you a fighting chance of being in the right stocks at the right time, teach you about risk control and money management, and perhaps most important of all, will show you how to recognise when to be out of the market.

One more word of advice.....don't kill yourself with work. Seven days a week will start taking its toll on your health, your family life, and your overall happiness. We all need some time off each week to recharge our batteries with a bit of relaxation.

Cheers mate, and I hope it all works out for you. I admire your fighting spirit.


----------



## MR. (5 March 2009)

Julia said:


> I saw what he asked.   If he was talking about putting money into the market, presumably he had some money to do this.
> He has subsequently confirmed this to be the case, so maybe it's you who should 'get off the pot' whatever that means.




Hasn't Stung then "subsequently confirmed" that there will be interest charged when that 50K is withdrawn on the mortgage offset account? Stung doesn't have the money it's just another loan from the bank. Disguised in a "mortgage offset account". 

But I'm wrong.....  Blah Blah Blah.  

Now Bunyip's post above is worth thinking about.  
Will add I think Stung has already identified future bullish stocks.


----------



## Glen48 (5 March 2009)

In Wednesday's Courier Mail : Korda Mentha? has _Cassimatis Corporate _in the Public Notice column  in admin. Maybe EC has a few other companies running???


----------



## Solly (5 March 2009)

Glen48 said:


> In Wednesday's Courier Mail : Korda Mentha? has _Cassimatis Corporate _in the Public Notice column  in admin. Maybe EC has a few other companies running???




Glen
I believe that these are under External Administration.
CASSIMATIS CORPORATE PTY LTD
STORM FINANCIAL LIMITED (formerly  CASSIMATIS SECURITIES PTY. LIMITED)
STORM FINANCIAL PROPERTY PTY LTD

and I believe that these are currently Registered.
CASSIMATIS FAMILY INVESTMENTS PTY. LTD.  
EMMANUEL CASSIMATIS & ASSOCIATES PTY LTD
IGNITE FINANCIAL SYSTEMS & RESEARCH PTY LTD (formerly STORM FINANCIAL RESEARCH PTY LTD)

Please correct me if this info is incorrect.


----------



## Glen48 (5 March 2009)

Solly
All they had was court times etc.
Any idea what he/they may have been up to?
Do you run Telstra by any chance or are there 2 of you???


----------



## Solly (5 March 2009)

Garpal Gumnut said:


> The whole site is a bit bizarre.
> 
> The forum ain't a forum, the media leads to potted summaries of the answers to questions and many questions are unanswered. Its all over the place. It must be an all in one PR deal with Peter Wilkinson.
> 
> ...





gg,
Looks like they've fixed the formating up a bit, gee I don't like mixed fonts, reminds me of the times struggling with a Mac II , PageMaker & QuarkXpress. But that's another lifetime ago.

They've added "THE 60 MINUTE DISGRACE" tab ..nice touch Madeleine..


----------



## Solly (5 March 2009)

Glen48 said:


> Solly
> 
> Do you run Telstra by any chance or are there 2 of you???




LOL ....no my middle name isn't Dennis and I'm not from Cheyenne....Although I must admit I'm a bit of a fan of their Ericsson nextG, 850mhz UMTS, gigabit back haul, HSPA Evolution, 21Mbps data network. If only Qualcom can make a chip for a device capable of that speed !  But I've become quite attached to my "Crackberry" Bold it seems to work even in a lead lined room....


----------



## Glen48 (5 March 2009)

Solly
Sounds like you have been on a high Fiber diet?


----------



## Solly (6 March 2009)

Glen48 said:


> Solly
> Sounds like you have been on a high Fiber diet?



Yep Glen, I'll cut back on the extra Psyllium husks... 
But I do get a bit excited about the technology as I travel a fair bit and it's great to be able access to my VPN/WAN from all over the place. It's a pitty that Sol's home doesn't have this level of ease of connectivity and speed...


----------



## Solly (6 March 2009)

*"Storm client book details released"*

"Sixty businesses vie for book 
Further details of Storm Financial's client book will be known today."

Story by Kate Kachor in Investor Daily is here;

http://www.investordaily.com/5938.htm


----------



## Solly (6 March 2009)

*"CBA forgives some Storm loans"*

"Some clients of Storm Financial may be relieved of their obligation to repay part of their loans funded by Commonwealth Bank, the Financial Review reported."

The Sheet story is here;

http://www.thesheet.com/nl05_news_selected.php?act=2&stream=1&selkey=7965&hlc=2&hlw=

AFR subscriber access here;

http://www.afr.com/home/login.aspx?EDP://20090306000030904426&section=financial_services


Best of luck Stormers....!!


----------



## carey ramm (6 March 2009)

I can confirm that CBA are just starting to make offers to Storm Clients in regards to their home loans. This is very much their openning offer.

BOQ are yet to do this. 

If u are registered with Slater and Gordon please make sure you check the offer with them before you agree to anything. Some of the CBA staff are being pushy - take your time and make an informed decision.

60 minutes had an enormous amount of information that had to be condensed into 14 minutes - they did a great job on what is a large and complex issue - the refusal of the banks to do an interview is an indication of just how serious some of these home loan irregularities are.


----------



## steelo (6 March 2009)

Solly said:


> Swazee can you give more info on Dalle Cort. All I can find is their website at
> 
> 
> 
> ...




The rumours are that Carey Ramm owns a share in Dalle Cort Financial Services who were bitter rivals with Storm for a number of reasons. I have also heard that ex-clients of Storm are now going to DFS for advice on how to get out of the mess they are in (such as how to pay down off their margin loans with the funds they have sitting in an offsetting bank account) and are being told they have to pay pretty hefty fees to DFS for what is relatively simple advice. DFS operates in much the same way as Storm did - ie they simply invest their clients' funds in index funds and have them borrow using margin loans as well as housing loans. They also charge a pretty hefty upfront fee - usually between 5% & 6% although I have seen some higher. They may not gear their clients as highly as Storm did but I am sure that they have some clients in the same boat boat as Storm's but they just haven't been receiving the same publicity.


----------



## classer (6 March 2009)

steelo said:


> The rumours are that Carey Ramm owns a share in Dalle Cort Financial Services who were bitter rivals with Storm for a number of reasons. I have also heard that ex-clients of Storm are now going to DFS for advice on how to get out of the mess they are in (such as how to pay down off their margin loans with the funds they have sitting in an offsetting bank account) and are being told they have to pay pretty hefty fees to DFS for what is relatively simple advice. DFS operates in much the same way as Storm did - ie they simply invest their clients' funds in index funds and have them borrow using margin loans as well as housing loans. They also charge a pretty hefty upfront fee - usually between 5% & 6% although I have seen some higher. They may not gear their clients as highly as Storm did but I am sure that they have some clients in the same boat boat as Storm's but they just haven't been receiving the same publicity.




Well I attended an hour and a half session with Dallecort Financial Services
with a friend to help her through her financial mess. They were very helpful.
Got me up to speed with what had taken place and some practical advise on the best way forward. Yes they offered their product.. but realised it would be some time before an offer like that would be affordable ( oh and believe me
she'll be learning to handle her own finances in the future). 

Cost... ZERO.

Be wary of rumours.


----------



## bunyip (6 March 2009)

steelo said:


> The rumours are that Carey Ramm owns a share in Dalle Cort Financial Services who were bitter rivals with Storm for a number of reasons. I have also heard that ex-clients of Storm are now going to DFS for advice on how to get out of the mess they are in (such as how to pay down off their margin loans with the funds they have sitting in an offsetting bank account) and are being told they have to pay pretty hefty fees to DFS for what is relatively simple advice. DFS operates in much the same way as Storm did - ie they simply invest their clients' funds in index funds and have them borrow using margin loans as well as housing loans. They also charge a pretty hefty upfront fee - usually between 5% & 6% although I have seen some higher. They may not gear their clients as highly as Storm did but I am sure that they have some clients in the same boat boat as Storm's but they just haven't been receiving the same publicity.




Maybe the man himself can clear up this rumour for us.
Carey - do you own a share in Dalle Cort Financial Services?


----------



## Solly (7 March 2009)

*"CBA offers victims loan relief if court is off limits"*

'THE Commonwealth Bank is offering financial relief to thousands of clients of failed Storm Financial, but only if they agree not to pursue claims in court."

Story by Anthony Marx is here;

http://www.news.com.au/couriermail/story/0,23739,25149599-3122,00.html


----------



## bunyip (7 March 2009)

Solly said:


> *"CBA offers victims loan relief if court is off limits"*
> 
> 'THE Commonwealth Bank is offering financial relief to thousands of clients of failed Storm Financial, but only if they agree not to pursue claims in court."
> 
> ...





_*Mark Weir, co-chairman of the Storm Investors Consumer Action Group, said the conditional offers of help suggested the bank was afraid of a wave of litigation and had implicitly admitted its culpability in dispensing high-risk margin loans through its offshoot Colonial Geared Investments.*_*

"We interpret this exercise as . . . some concession that they think they might have a problem and now want to make themselves out as the good guys," Mr Weir said.*

Above is an extract from the article.
Mark Weir is entitled to his opinion. But sometimes it's just easier and cheaper for the accused to enter into an out of court agreement, even when they're innocent.
Being innocent doesn't eliminate the possibility that shifty lawyers and public opinion will be enough to get a guilty verdict brought against you.

A friend of mine once negotiated to buy a ballet school. She and the owner of the school agreed on a price and arranged the lawyers to draw up the contract. Then the owner changed her mind and demanded a higher price. My friend refused, and said she'd open her own ballet school. The owner of the school instigated legal action against her, claiming they had an agreement and my friend broke it.
Although completely innocent, my friend was advised by her lawyer that the court case may go against her, and would end up costing her a considerable amount of money. She was advised to settle out of court, which she did.

I'm not coming out in support of CBA or any other bank that financed Stormers. I've openly stated several times in this thread that I don't like banks.
But I'd like to see some balanced comment, rather than the one-sided version that Mark Weir has come up with. 
Before Stormers go jumping on the bandwagon and claiming that the banks offer is an admission of guilt, they should realise that this is not necessarily the case. The banks may be guilty of some wrong doing, or they may have been completely legal and above board. Either way, a court case could be expensive for them, so they're considering other options. This is not necessarily an admission of guilt.

What Mark Weir doesn't mention is that even if the bank offered  him a loan that was far in excess of what he could comfortably service, nobody forced him to take that loan. He could have done the sums and recognised that a downturn in the stockmarket would result in him getting into financial difficulties.
And nobody forced him to stay heavily invested when world economies showed clear signs of trouble and the stockmarket started collapsing.
Mr Weir is another example of someone who can't seem to take responsibility for his own actions. If the stockmarket had stayed bullish he would have been piling up the loot and praising CBA for lending him the money. 
But as soon as it goes the other way he wants to blame someone else for his foolishness.


----------



## chrisgee (7 March 2009)

steelo said:


> The rumours are that Carey Ramm owns a share in Dalle Cort Financial Services who were bitter rivals with Storm for a number of reasons. I have also heard that ex-clients of Storm are now going to DFS for advice on how to get out of the mess they are in (such as how to pay down off their margin loans with the funds they have sitting in an offsetting bank account) and are being told they have to pay pretty hefty fees to DFS for what is relatively simple advice. DFS operates in much the same way as Storm did - ie they simply invest their clients' funds in index funds and have them borrow using margin loans as well as housing loans. They also charge a pretty hefty upfront fee - usually between 5% & 6% although I have seen some higher. They may not gear their clients as highly as Storm did but I am sure that they have some clients in the same boat boat as Storm's but they just haven't been receiving the same publicity.




What does this have to do with Storm victims ?  I'd like to thank carey for helping us in our time of need, he has given us some good tips and directions. It's a minefield out here trying to work out what to do and who to trust. If theres probloems with DalleCourt I'm sure we would have heard. Who cares what careys business interests are. I know others who have had problmes with loans and borrowings and who now have assets & houses for sale who got into problems all by themselves. So theres big probs all around and you just got to be smart to get yourself back on track.


----------



## chrisgee (7 March 2009)

Julia said:


> gg, that's a bit tough on Stung.  He/she did acknowledge that his/her decision making capacity was pretty much shot right now, hence asking the question on here.
> 
> I reckon just recognising that he/she isn't up to making good decisions yet is a step on the road to recovery.
> 
> ...





Julia I like your words "Everything passes" that is exactly what I need to here today...thnx


----------



## bunyip (7 March 2009)

chrisgee said:


> What does this have to do with Storm victims ?  I'd like to thank carey for helping us in our time of need, he has given us some good tips and directions. It's a minefield out here trying to work out what to do and who to trust. If theres probloems with DalleCourt I'm sure we would have heard. Who cares what careys business interests are. I know others who have had problmes with loans and borrowings and who now have assets & houses for sale who got into problems all by themselves. So theres big probs all around and you just got to be smart to get yourself back on track.




Maybe it's meant as a subtle warning for Stormers not to go rushing into the arms of the first perceived saviour who comes along.....look before you leap, lest you jump out of the frying pan into the fire.


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## MR. (7 March 2009)

steelo said:


> The rumours are that Carey Ramm owns a share in Dalle Cort Financial Services



  The rumour is here now as well. Can you add any more? not rumours, proof?  or just read the post from bunyip




chrisgee said:


> What does this have to do with Storm victims ?  I'd like to thank carey for helping us in our time of need, he has given us some good tips and directions. It's a minefield out here trying to work out what to do and who to trust. If theres probloems with DalleCourt I'm sure we would have heard. Who cares what careys business interests are. I know others who have had problmes with loans and borrowings and who now have assets & houses for sale who got into problems all by themselves. So theres big probs all around and you just got to be smart to get yourself back on track.




None of my business,  but why have you said as highlighted above?

.


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## Glen48 (7 March 2009)

Today's Sunday Mail has a story about CBA offering Storm victims some sort of settlement if they don't take CBA to court...CBA will let them stay in their homes and take ownership once the owner/s pass away..so they are still trapped.


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## bunyip (7 March 2009)

Glen48 said:


> Today's Sunday Mail has a story about CBA offering Storm victims some sort of settlement if they don't take CBA to court...CBA will let them stay in their homes and take ownership once the owner/s pass away..so they are still trapped.




Today's Sunday Mail? 
Today is Saturday.


----------



## sinner (7 March 2009)

Just ran a quick google

Ramm site:dallecort.com and it comes up with one of their ads http://www.google.com.au/search?q=r...s=org.mozilla:en-US:official&client=firefox-a

With a testimonial from one "Kay Ramm". 

"...expert advice that I needed to plan for my retirement."

 Two listings for "Ramm" in the whitepages, K Ramm and one C Ramm  living in the same suburb of Townsville.

Not conclusive and I apologise if the rumour is incorrect, but I think we would like to hear from Mr Ramm.


----------



## Glen48 (7 March 2009)

Bunyip
Feels like Sunday to me cos I was up all night trading.
Will be Sunday soon don't panic.


----------



## Trevor_S (7 March 2009)

classer said:


> Cost... ZERO.




bait ... and ...

do you think it cost them nothing to run a seminar for you ?  

That aside, you already fell for it once with Storm... be careful.

IMO stay away from ANYONE that is not a fee for service FP and if gearing into index funds is your thing, hows about starting small and dollar cost or value averaging with cash into a LIC like STW or even ARG and if you must gear, keep your LVR's very low !


----------



## Pindibog (7 March 2009)

Trevor_S said:


> bait ... and ...
> 
> do you think it cost them nothing to run a seminar for you ?
> 
> ...




Bendigo Bank have FP that charge upfront and get no commission off products.


----------



## bunyip (7 March 2009)

Glen48 said:


> Bunyip
> Feels like Sunday to me cos I was up all night trading.
> Will be Sunday soon don't panic.




Thought you must have got the jump on me by getting the Sunday Mail a day early! lol

What were you trading all night.....Forex?


----------



## Glen48 (7 March 2009)

Bunyip
Wish I could get tomorrows paper...Trading sell CFD on the DOW made 2K but went to bed at 5 am and could have make a few more bucks but then again the DOW shot up in the last hour as  more bad news came out which is why Gold went down...please explain.
If this market was Gravity Lead Balls would float.


----------



## carey ramm (7 March 2009)

well well well ... some scurulous little rumours here from a person with 1 post - well steelo - your rumour is totally incorrect. I am the major shareholder of one of australia's largest economic firms - just google me and i pop up everywhere. I do not own any share in any financial services firm. I cant be more blunt than that and any simple asic search will prove that point.

A lot of storm clients have seen me for advice and i have never recommended any financial adviser. I am in contact with a number of financial planners who are helping storm clients and they are doing a great job in assessing all the irregularities. Without their help we would not be where we are today in advancing the interest of the storm clients.

Our company, AEC Group Ltd,  has been helping this cause as a community service obligation (at no charge) because of the social injustice we have seen. We have done similar campaigns in the past. 

I should also point out that i have made a comment on a similar topic in this thread around feb 9 or 10.

So steelo or whatever your name is - u can see my real name here and u know where to contact me - why dont u drop me an email or a call if u have the guts... but i spose it is real easy to hide behind yourn single anonymous post.

I should point out that i have no problems people questioning motives etc - this is a hard campaign we are fighting and the stakes are very high and i know the other side arent going to roll over easy. but then again neither am i...


----------



## carey ramm (7 March 2009)

whilst we r on the topic of declaring interests....

maybe "swazee" might like to reveal himself as well - i think we would all find that very interesting given where "he" works.... and the rumours he pushed.

it didnt take me very long to track u down buddy and i am sure u will prove quite newsworthy.


----------



## Pindibog (7 March 2009)

carey ramm said:


> whilst we r on the topic of declaring interests....
> 
> maybe "swazee" might like to reveal himself as well - i think we would all find that very interesting given where "he" works.... and the rumours he pushed.
> 
> it didnt take me very long to track u down buddy and i am sure u will prove quite newsworthy.




Now this is getting interesting. I've got a tenner on CBA. Oh if I loose you will have to take an IOU. You know how it is!!!


----------



## MR. (7 March 2009)

swazee's first post 


swazee said:


> I wonder where all the vested interests rest in this forum. Carey Ramm talks about bank trolls, however I wonder if he ever discloses his past/present links with Dalle Court and why they have escaped scrutiny adopting similar if not identical strategies to Storm. When the Storm debacle blows over, rest assured that Isi Dalle Court will be the next round in the chamber....
> 
> Lets face it, double gearing is double gearing so lets remember that it is not only Storm Financial offering this sort of advice.







carey ramm said:


> whilst we r on the topic of declaring interests....
> 
> maybe "swazee" might like to reveal himself as well - i think we would all find that very interesting given where "he" works.... and the rumours he pushed.




Swazee doesn't spell cort correctly twice so not Dalle '. Ok, pindilbog... could be someone with a link to a bank perhaps?   bank trolls!

Childish games..... !  

Would you like to respond to these allegations Carey anyway?  But then again it's up to you.  None of my business, once again.  For what I've read, I do like the work you are doing for storm's victims. Perhaps they can ask you in person if you chose not to respond.

ps: I was in the middle of reading swazee's posts before you brought it up tonight.


----------



## happyville (8 March 2009)

carey ramm said:


> whilst we r on the topic of declaring interests....
> 
> maybe "swazee" might like to reveal himself as well - i think we would all find that very interesting given where "he" works.... and the rumours he pushed.
> 
> it didnt take me very long to track u down buddy and i am sure u will prove quite newsworthy.




mmmmmmmmm...............Mr Carey, you do protest too much.  Tell us have you ever lost a court case to Mr Cassimatis?


----------



## Solly (8 March 2009)

There's a question and reply on E&J C's web site regarding gearing for the over 65's 

http://www.cassimatis.com.au/FAQRetrieve.aspx?ID=36205

It is claimed that the question was submitted from a person from the "CBA" so I suppose we can predict the tone of the reply. 
I found the response reasonable. 

Where the post talks about the Master of Applied Finance that EC developed does anybody know the course content, electives, prerequestites etc. What inputs EC actually had into the course?
Does anybody here known any graduates ?  Which campuses is it offered?


----------



## MR. (8 March 2009)

Single posts poping up everywhere with more unsubstanciated rumours.  Come on!

Carey's response to swazee's post. Carey Ramm 13/2/09. 



carey ramm said:


> ..............
> i also read a comment earlier about my relationship with financial planners. i have many friends who are financial planners the same way i have many friends who are lawyers, accountants, engineers, mechanics, chefs, etc. i do not provide reccomendations to anyone (including family) on any specific financial planner - period.
> 
> i am not aware of any other financial planners in the same boat as storm or as said in a past post "the next round in the chamber". i have had a few people see me who were in margin loans on specific stock purchases such as allco, mfs, abc learning and a few other recent gems that were being pushed by the broking houses but that is real buyer beware advice. i have not seen any clients from other financial planners in distress. with the asx hitting 3342.7 on jan 23 (which is also close to the dec bottom) i am pretty sure we  would have seen and heard about it by now as the margin lenders dont cut u much slack in meeting calls (as most storm clients can attest to).
> ...


----------



## classer (9 March 2009)

Trevor_S said:


> bait ... and ...
> 
> do you think it cost them nothing to run a seminar for you ?




I think it cost them one mans wages for ninty minutes. It was also advertised by Dallecourt as no expense to Storm Clients as a community service obligation. You can believe what ever you want. It was helpful and was no cost to my friend.



> That aside, you already fell for it once with Storm... be careful.




Ummm ....did you actually read the post? I was there as support for a friend of mine. Personally,I prefer to take responsibility for my own mistakes. Don't need to pay someone else to screw things up for me.
Have absolutely no intention of using them.


----------



## MR. (9 March 2009)

and 60 minutes concludes with one of their mail bag picks last night.  



> "Yes Storm Financial gave bad financial advise which was motivated by greed, but individuals agreed to mortgage their own properties and borrow thousands more. That decision was also motivated by greed."
> E. Eckersley
> Para Hills, S.A. 5096




anyway.......

What has happened with Storm's investors hopefully will make people think very carefully when leveraging.  Almost everyone uses leverage,  including the companies in the world stock markets.  One could say "leverage is normal" and no wonder, it's used and advertised everywhere.  

Storm victims went in too deep.  Yes....  So if you go in with less leverage that is OK?  Perhaps, but the outcome is yet to be seen, this time round. 

In 1929, 1973, 1980 and 1987 crashes, the markets rebounded here in Australia and reached their highs again after 3 to 7 years. That includes 1929 from peak to peak was 6 years in Australia.....  But in America's 1929 crash it took near 25 years to recover.  It appears ironic that a CBA Colonial adviser first pointed that out to me in 2003.
http://stockcharts.com/charts/historical/djia1900.html

It is not my intention to rub salt into any wounds.  It is just a warning for the continued use of leverage or debt.  I will not be surprised if the All-Ords hit 2000 again purely because of de-leveraging.  Scare mongering?  Perhaps, but if you are leveraged or thinking of leveraging in the markets what will a result of 2000 do to you and even the price of properties?

Experts everywhere...... 
Even Warren Buffet changed his mind a little recently!  I'm not going to pretend to understand how the following guys come to their conclusions. But their outcomes might reflect similar. 
https://www.aussiestockforums.com/forums/showthread.php?t=6953&page=27


----------



## carey ramm (9 March 2009)

Given MR's post I thought I would put in my 20 cents worth and provide some perspective. We know that the US, UK and Europe are all in recession. Growth in Asia is slowing dramatically, the property bubble has burst and commodity prices are deflating. This is a pretty grim outlook but we have been through it before.

Since 1960, there have been 9 bear markets occurring on average every 5.4 years, lasting an average 15 months with an average market fall of 34%. Yes this is a big one but it is in line with the historical experience of 1973 and 1987. On average it takes 41 months after the market low point for the market to set a new high and the average gain in the first 12 months after the low is 32%. So what we are experiencing has happened in the past and will most likely occur in the future.

What is different is that the events this time round will have a lasting impact on the financial world for the foreseeable future. We are moving to a back to basics investment world with increased government regulation, less complex financial products and much lower leverage. Gone are the days of fancy financial engineering with the demise of the investment banks (at least for the next 5 years!!!). The re-construction of the banking industry in the US, UK and Europe, where in many cases the Government in now the major shareholder, will ensure that sensible economic and business fundamentals prevail which will be critical in rebuilding shattered investor confidence.

We must remember that over time financial markets are driven by these economic and business fundamentals. What we have seen is the negative fundamentals amplifying panic in market sentiment and for many people turning paper losses into real losses. In many cases these people either have never been through a market downturn (like Gen Y) or have short memories and expected the bull markets to run forever. Hence the herd effect takes over and real panic sets in. At times like these it is often wise to consider the advice of someone who has been through a number of bull and bear markets as they most likely will have learnt some expensive lessons in formulating their views. So in the words of Warren Buffet – “ be fearful when others are greedy and greedy only when others are fearful”. I think this is pretty apt for where we sit today.

Bear Markets in Australian Shares since 1960

Bear Markets	    Months    % fall 	Months      % gain in first
	                 to low                          to high     12 months from low
Sep 60 – Nov 60	      2	      -23.2	33	     +12
Feb 64 – Jun 65	     16	      -20.4	25	      +9
Jan 70 – Nov 71	     22	      -39.0	94	     +52
Jan 73 – Sep 74	     20	      -59.3	59	     +51
Nov 80 – Jul 82	     32	      -40.6	17	     +39
Sep 87 – Nov 87	      2	      -50.1	75	     +35
Aug 89 – Jan 91	     15	      -32.4	30	     +39
Feb 94 – Feb 95	     12	      -21.7	20	     +25
Mar 02 – Mar 03	     12	      -22.3	15	     +27
Average	                  15	        -34 	41	     +32
Nov 07 -  ?   	     12?	       -54? 	?	       ?
Source: Bloomberg


----------



## swazee (9 March 2009)

carey ramm said:


> whilst we r on the topic of declaring interests....
> 
> maybe "swazee" might like to reveal himself as well - i think we would all find that very interesting given where "he" works.... and the rumours he pushed.
> 
> it didnt take me very long to track u down buddy and i am sure u will prove quite newsworthy.




Im not sure why you would find where I work intersting or in fact newsworthy. I consider this to be a threat of sorts so if you have any allegations, lets hear them. I have no link to either Storm the banks or not any of the Storm clients. I am happy for you to know who I am, I have nothing to hide and I'm not a 'he'.

BTW, forums are designed to be anonymous, otherwise how many of Storm clients or anyone else would actually post their story.


----------



## MR. (9 March 2009)

carey ramm said:


> Given MR's post I thought I would put in my 20 cents worth and provide some perspective.




Can’t agree more with your particular extract from buffet.   Now is a far better time to be greedy when compared to the last couple of years, that’s for sure.    However, if I have read your post correctly,  you base your theory with data back to the 1960’s that we are already at or close to perhaps a bottom.  Therefore now would be the time to be greedy and perhaps that could encourage investors to take on leverage in the markets.  

It matters not to me the outcome either way in the next couple of years.  If I am wrong I will lose minimal, only just potential profits.   If someone is leveraged in the markets now and they are wrong it is a completely different story.   
I have always thought I have had a fairly good business mind and it lead to a very early retirement. Now perhaps, I may have slipped some since then.    So be it.   

But my opinion appears not alone.   
An extract from the economist Steve Keen : 
http://www.debtdeflation.com/blogs/


> My answers are that our escape route from previous downturns was to renew the private lending engine, and that this is a trick that is one recession past its use-by date.
> The 1990s recession saw private debt to GDP ratio top out at 85% in late 1990, and then fall to 76% by early 1994. From then it took off once more, with households taking over the borrowing binge mantle from business, which actually reduced its debt level from 56% of GDP to 40% in mid-1995. The household debt binge, which began in 1991 in the depths of Keating’ recession, took the household debt to GDP ratio from 30% to a peak of 99%, from which it is now falling.
> Meanwhile, business borrowing likewise began a China and Private Equity fuelled blowout in mid-2004, rising rapidly from 46% of GDP to 66%–a new record–by early 2008. The combined debt total reached 165% of GDP in March 2008, and it has since fallen to 160%.
> So what are the odds of encouraging businesses or household to start borrowing again, from their now record levels of debt?
> ...




It’s that 32% average rebound I’d like to catch, but from where? 
Nothing more in the near future on the index.


----------



## Solly (10 March 2009)

Solly said:


> There's a question and reply on E&J C's web site regarding gearing for the over 65's
> 
> http://www.cassimatis.com.au/FAQRetrieve.aspx?ID=36205
> 
> ...





Got this link sent to me 

http://handbook.uws.edu.au/hbook/course.aspx?course=2702

It appears to be the Master of Applied Finance course from the University of Western Sydney that is refered to in the post.


Some of the course units look quite interesting.....


----------



## Solly (10 March 2009)

*"Commonwealth Bank offers Storm clients deals to save their homes"*


Story by TONY RAGGATT is here;
http://www.townsvillebulletin.com.au/article/2009/03/10/43701_hpnews.html

' Carey Ramm, said the Commonwealth offer was promising but well short of expectations.

"From the behaviour I have seen, I would expect the loans to be extinguished." '


What are the chances of the CBA extinguishing loans?


----------



## Trevor_S (10 March 2009)

Solly said:


> What are the chances of the CBA extinguishing loans?




As a CBA shareholder (albeit small) I hope no chance.

Assuming the loans have been made in good faith on the part of CBA.


----------



## swazee (10 March 2009)

"A spokesman for the Commonwealth said they were working with customers to minimise their financial hardship"

Since when did the CBA enter the world of standup comedy...seriously this is a massive admission of something a lot deeper and should give Storm clients a glimmer of hope.

This is what is commonly referred to as 'Damage Control, knowing that it may avoid some of these clients taking further legal action.

If there are any lawyers on here, when was the last time a bank did something that was not in the best interests of it's shareholders, particularly when it had no trouble charging clients ridiculous fees to break their loans, which was primarily out of the control of Storm clients.

This could be a PR exercise, but I suspect something a lot more cynical.

"If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem."
J. Paul Getty


----------



## Solly (11 March 2009)

*"CBA moves to calm Storm"*


CBA, "is negotiating confidential settlements, has is team negotiating "rearrangements" with the Storm clients,
require that clients sign away any right to legal action" 

"Damien Scattini ....said the deals might open CBA to accusations of undue influence and unconscionable conduct"

Full story by Colin Kruger in The Age is here;

http://business.theage.com.au/business/cba-moves-to-calm-storm-20090310-8u8j.html


----------



## Glen48 (11 March 2009)

Looks like you don't have worry about responsibility any more:
Have a house in the Bush and no insurance no problems, Take out a margin loan  no problems.. 


The Herald has also received documents dealing with the settlement of margin loans by Storm clients for what appears to be a reduced sum.

All of the deals will require that clients sign away any right to legal action against CommBank over the debacle.

"In this climate, it is appropriate that the bank is seeking appropriate legal arrangements with its customers to ensure that any rearrangements of facilities are final and conclusive, to allow all parties to move on," the bank said in a prepared statement.

Storm clients who took the failed company's advice - borrowing against their homes, taking out margin loans, and investing the lot in index funds - were caught out when the sharemarket collapsed last year. Thousands face losses that are expected to top $1 billion.

CommBank was the largest provider of mortgages, margin loans, and fund management services to Storm clients.

A class action being prepared by Slater & Gordon is expected to allege that Storm effectively acted as an agent for CommBank, and other Storm partners like Bank of Queensland, which would make them liable for its flawed advice.

CommBank is understood to be offering a complete freeze on mortgages where the clients are pensioners and unable to make payments. These clients are in effect being offered "life tenancy" in their homes which will only be sold after their death. In some cases, CommBank will not charge interest and the loan will not be indexed to inflation.


----------



## donteventryit (11 March 2009)

So, anyone changed their minds about Storm clients receiving some sort of restitution?


----------



## bunyip (11 March 2009)

_*A class action being prepared by Slater & Gordon is expected to allege that Storm effectively acted as an agent for CBA, and other Storm partners like Bank of Queensland, which would make them liable for its flawed **advice.*_

Well now, wouldn't that just be typical of a dammed law firm.....twist things around to make it look like the banks are responsible for the advice that Storm gave their clients!
Maybe Slater & Gordon should try a little honesty and reality by saying that nobody forced Storm clients to accept and act on the advice they were given. Nobody forced them to take foolhardy risks by gearing to dangerous levels. Nobody forced them to implicitly trust someone else to look after their investments. Nobody forced them to take out those loans.
But honesty and reality don't make any money for law firms.
If the market had kept rising, clients would have been cleaning up and praising Storm and the banks for helping them.

I once bought a new Toyota Land Cruiser Wagon that turned out to be a real dud and ended up costing me a heap of money. Maybe I should have sued the relatives and friends who had Toyotas and told me they were great vehicles. Maybe I should have sued the salesman who sang the praises of Toyotas. Maybe I should have sued the finance company who arranged the lease agreement.
But I didn't. What I did instead was shrug my shoulders and say 'Ah well - nobody forced me to buy a Toyota'.


_*Slater & Gordon's Damien Scattini said the deals might open CBA to accusations of undue influence and unconscionable conduct given the distressed state of customers and the short time given for people to settle. **"It's disappointing they want to go about things this way," he said.*_

I wonder if Scattini's disappointment could be due to the decreasing likelihood of him getting a decent cut out of it, if CBA comes to some private arrangement with clients on an individual basis.


----------



## MR. (11 March 2009)

donteventryit said:


> So, anyone changed their minds about Storm clients receiving some sort of restitution?




Instead of paying their legal teams, the bank offers that money to people who will benefit more..... perhaps?



Glen48 said:


> A class action being prepared by Slater & Gordon is expected to allege that Storm effectively acted as an agent for CommBank, and other Storm partners like Bank of Queensland, which would make them liable for its flawed advice.




An agent perhaps....  So that makes the banks liable for Storms advise? How many effectively acting agents would/could the banks have altogether then? 

Where do you draw the line?  That would mean anyone who received advise and that organization suggested a particular credit facility, makes that credit facility now liable for the advise given!  How much are the banks expected to know?

Hope you win.  Certainly will clean up the whole lending industry.


----------



## Julia (11 March 2009)

bunyip said:


> _*Slater & Gordon's Damien Scattini said the deals might open CBA to accusations of undue influence and unconscionable conduct given the distressed state of customers and the short time given for people to settle. **"It's disappointing they want to go about things this way," he said.*_
> 
> I wonder if Scattini's disappointment could be due to the decreasing likelihood of him getting a decent cut out of it, if CBA comes to some private arrangement with clients on an individual basis.



Yep, exactly the thought I had when I read Mr Scattini's remark, Bunyip.


----------



## Steve Borden (11 March 2009)

bunyip said:


> _*Slater & Gordon's Damien Scattini said the deals might open CBA to accusations of undue influence and unconscionable conduct given the distressed state of customers and the short time given for people to settle. "It's disappointing they want to go about things this way," he said.
> 
> I wonder if Scattini's disappointment could be due to the decreasing likelihood of him getting a decent cut out of it, if CBA comes to some private arrangement with clients on an individual basis.*_



_*

Or he may be disappointed with the arbitrary way the offers are being made,  perhaps it's the way the offers are being 'sold' to the clients or maybe it's the divide and conquer methods being used on very vulnerable people.*_


----------



## Solly (11 March 2009)

*"ASIC gives Storm wind-up deadline"*


"THE Australian Securities and Investments Commission (ASIC) has been given until tomorrow afternoon to file an application to wind up failed investment advisory company Storm Financial."

AAP story in The Australian is here;
http://www.theaustralian.news.com.au/story/0,25197,25171943-12377,00.html


----------



## bunyip (11 March 2009)

donteventryit said:


> So, anyone changed their minds about Storm clients receiving some sort of restitution?




My opinion remains unchanged.....that if Storm clients take on the banks in a court case, the banks will drag it out for years through the appeal process if necessary, and the law firms will be the big winners.
I can't see any law firm being prepared to work indefinitely without payment on a no win no fee basis. The lawyers would want progressive payments in one form or another if the case drew out long enough, otherwise they just wouldn't continue.


----------



## Glen48 (12 March 2009)

Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam  then you could understand the Banks wanting to talk.
I can't see any banks lending $1.8M to a Victim on $50K PA...


----------



## swazee (12 March 2009)

Glen48 said:


> Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
> IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam  then you could understand the Banks wanting to talk.
> I can't see any banks lending $1.8M to a Victim on $50K PA...




Yes, if Storm were acting as the 'agent' of sorts which I beleive you will find they were, then CBA are in trouble. That is why EC keeps referring to the partnership between the Bank and Storm. 

Bunyip rightly points out....who will be prepared to roll the dice and take on one of the largest banks in Australia, for possibly many years and who is going to fund it? 

It will be interesting to see how the DOCA issue pans out over the next few days....


----------



## Solly (12 March 2009)

*"Inquiry into collapses to include role of banks"*


"THE Commonwealth Bank's secret deals to settle potentially costly litigation by its Storm Financial customers will not be enough to keep a lid on its alleged role in the debacle..."

.."Storm itself may soon be history or, alternatively, back in the hands of its founders, Emmanuel and Julie Cassimatis."

"A Federal Court judge in Brisbane yesterday gave the Australian Securities and Investments Commission until today to decide whether to proceed with its application to wind up Storm."



Full Story by Colin Kruger in the SMH is here;

http://business.smh.com.au/business/inquiry-into-collapses-to-include-role-of-banks-20090311-8v9f.html


----------



## bunyip (12 March 2009)

Glen48 said:


> Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
> IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam  then you could understand the Banks wanting to talk.
> I can't see any banks lending $1.8M to a Victim on $50K PA...




Well, one of the Storm victims interviewed on 60 Minutes claims Storm told her to just sign the documents and they'd fill in the details later. She foolishly did so, and some crazy amount of income was entered in the loan application. 
But how could it ever be proven that her Storm advisor entered those details *after* she signed the documents? Storm naturally deny doing so.
In a court case they'd say they filled in the details based on the information supplied by the client, the client then read the document, verified the details, and _*then*_ signed it.


----------



## stung (12 March 2009)

I contacted the CBA to ask about the 7 page document that outlined assets liabilities and debt. This document was not signed by me. It contained anomolies. When I asked how this document came to be, I was told that it was filled out by the CBA whilst in telephone conversation with my storm financial advisor.

I wanted to know how the $1880 in the extra monthly income was derived.
This was apparently the monthly return on investment that I was expected to receive ( 4 percent) once I signed with storm. So as far as I can ascertain my ablility to pay the loan included income from potential future earnings!! Since when has a person been able to apply for a loan and add  possible earnings to their income figure?

I also enquired as to why my income was inflated, why my son was not listed as a dependant, and why my personal debt of $25 000 was not noted. 
She claimed that this info would have been verified by the phone call we would have received from the bank. We received no such call.

All other documentation that was involved in the loan application required a signature. Why not this one?

Yes I know its all my fault but I did have a smidge of help from the banks and from storm.


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## Steve Borden (12 March 2009)

Glen48 said:


> Does any one know if Storm altered the info on victims forms forcing them to end up more highly geared?
> IF Storm had authorisation from Victims to do as Storm liked on their behalf and the Banks were aware of the scam  then you could understand the Banks wanting to talk.
> I can't see any banks lending $1.8M to a Victim on $50K PA...




The point is that the 'Bank' didn't know they were lending $1.8m to a client, the local home loan lender did the home loan in happy ignorance of what may happen with a future margin loan, this margin loan may have been with their Bank or with another Bank.

The margin lender then approves a margin loan simply on the basis of the amount of security they have, no credit assessment, no assessment of income or assets and liabilities position.

So when it all fails the Bank finds it has a $1.8m exposure to the one client with the only assessment done for the home loan. This assessment was based on projected income from the investment portfolio provided to the Bank by Storm and given the investment is gone the client is now in an untenable position.

We then find ourselves at this point of time, many hundreds of people will loans they can't service, the Bank's owed millions in outstanding margin calls that can't be repaid and hundreds of millions in home loans where clients have nearing negative equity.

The Bank knows they can't pursue all these loans, for one pursuit of the debt may not yield anything, secondly the there is the expense of the pursuit and lastly there is the Brand damage from the pursuit. Good luck to the first lender that forecloses on a disabled pensioner with no equity in his home, I know where the court of public opinion will make its judgement, swing enough opinion and the opportunistic politicians get involved.

The only course is a negotiated settlement and the CBA's first offer is a life tenancy with a 0% interest rate. We have effectively gone from we did nothing wrong to foregoing tens of millions of dollars in revenue in the space a month. 

Pretty logical business sense from the CBA, can the BoQ afford to do the same?


----------



## carey ramm (12 March 2009)

hi guys a couple of comments as have been away for a few days:

steve borden i think u r pretty much on the money in your assessment of the issue with the settlements - but hey if people are happy with the deal then that is great and it means the storm campaign may have achieved something

bunyip - the legal action is already well underway - y do u think the banks are running round trying to do settlements (certainly not out of the goodness of their hearts!!!! roflmao !!!!) - they know what is coming and they know what will come out - i could speculate that maybe even some of their own audit reports may have highlighted this issue in the past but were ignored maybe because the profits were so good. more speculation could be that the actual agreements between the banks and storm actually used the term agent....

In regards to the CBA it is very encouraging that they recognise there is a problem and have come to the negotiating table. 

interesting to see that ANZ are wanting to settle opes prime - that certainly wouldnt have happened without slater and gordon - it was also very very very intersting to see the ASIC enforceable undertaking placed on a major bank (this happens very rarely i am informed) - i am pretty sure the storm banks would have read this very very closely

bunyip - will also be very interesting to see whose handwriting actually filled out the 60 minutes female retirees loan application stating a 100k per month income - anyone want to guess??

bunyip - if i could speculate again - there will be former storm advisors having informative chats to the lawyers and ASIC  - maybe even the odd bank johny as well - sinking ships generally leak.... even spoke to a few myself - charming people.

glen this is very much about responsibility - if u sell a lemon claiming it is an orange then the consumer has every right for redress - bunyip u had plenty of govt agencies (inlcuding a lemon law for cars) to help your toyota car issue

On a last point ASIC cant be very far from taking action... now this should be quite interesting.


----------



## Trevor_S (12 March 2009)

carey ramm said:


> i could speculate that maybe even some of their own audit reports may have highlighted this issue in the past but were ignored maybe because the profits were so good.




Would this be the same Storm "investors" who were happy to take profits and ignore supposed irregularities in the paperwork themselves when times were good ?

I used to have enormous empathy for this who speculated with Storm, this empathy is wearing away with their constant bleating in the press from their "representative" about how the banks are too blame, the speculators themselves playing the naive card is wearing rather thin.  

Ironically, once again it reeks of greed on their part, the banks being the only people with money and relying on a gullible public believing banks are inherently evil and greedy politicians riding the back of that sentiment.


----------



## pilots (12 March 2009)

Trevor_S said:


> Would this be the same Storm "investors" who were happy to take profits and ignore supposed irregularities in the paperwork themselves when times were good ?
> 
> I used to have enormous empathy for this who speculated with Storm, this empathy is wearing away with their constant bleating in the press from their "representative" about how the banks are too blame, the speculators themselves playing the naive card is wearing rather thin.
> 
> Ironically, once again it reeks of greed on their part, the banks being the only people with money and relying on a gullible public believing banks are inherently evil and greedy politicians riding the back of that sentiment.



 Yes, it was all 100% AOK when it was on the way up, but now!!!. IT IS ALL THE FAULT OF STORM AND THE BANKS. Some people want it both ways.


----------



## stung (12 March 2009)

pilots said:


> Yes, it was all 100% AOK when it was on the way up, but now!!!. IT IS ALL THE FAULT OF STORM AND THE BANKS. Some people want it both ways.




No it was not AOK when things were on the way up. It was never OK. I did not profit take. I tried but my advisor blocked me with excuse after excuse. I believed him of course because I thought he had my financial interests at heart. Now I know this was not the case. He was just being a slime. 

Trying to  get out proved to be even more difficult. This  was blocked also.  "We lost your STOP/LOSS form: so sorry" followed by more excuses.

If anyone is greedy in this it is my advisor who put his own interests above mine.To think I paid the maggot  for the privelege.

How many times do you need to be told -we were lied to? 

I work in an intensive care unit. If after your open heart surgery I tell you to go home and lift as many heavy objects as possible to build up your strength and you do, who do you blame when your sternum rips apart?  Is it your own fault for trusting someone in the medical profession?

Same goes. I went to Storm for advice. That advice was on the nose and metorphorically speaking my sternum is now gaping. 

Have a heart.


----------



## pilots (12 March 2009)

stung said:


> No it was not AOK when things were on the way up. It was never OK. I did not profit take. I tried but my advisor blocked me with excuse after excuse. I believed him of course because I thought he had my financial interests at heart. Now I know this was not the case. He was just being a slime.
> 
> Trying to  get out proved to be even more difficult. This  was blocked also.  "We lost your STOP/LOSS form: so sorry" followed by more excuses.
> 
> ...




Are you telling me that you tried to get out b4 the crash???????


----------



## stung (12 March 2009)

pilots said:


> Are you telling me that you tried to get out b4 the crash???????




No. I tried to get out when the All Ords was at 5500 points and several times thereafter.


----------



## Pindibog (12 March 2009)

stung said:


> No. I tried to get out when the All Ords was at 5500 points and several times thereafter.




Stop putting all Storm clients in one basket. We all didn't realise our profits from our portfolios or go on lavish holidays etc. I have not touch mine in 18years. We did not all mortgage houses, borrow too much money. But hey we were still told lies which impacted on decisions and the Storm badged indexed funds closed. Even to those that were not at margin call. They were forced to realise their loss. I had other shares not storm badged but they were sold out from under me when I gave strict instuctions not to sell at this low point. All the time being told I was not at MC. I WAS able to inject more capital and had so in an associated CMT account??? But no they sold everything without my approval or knowledge at the time.


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## Glen48 (12 March 2009)

Looks like the banks must have got caught up in the greed as well to think some one could repay 1.8M on 50K PA even with returns from the stock I would assume they would have had a margin fo0r error????
Did the victim know he was up for 1.8M?
I must be too old as 1.8 is still a lot of money to me and i would be wearing brown clothing all my life if I know I was geared for that much.


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## swazee (12 March 2009)

Guys, there has been a lot of speculation regarding the state of Storms financial position and general state of the business leading up to the collapse. If you have not see this before, it is an intersting summation up to the period of the court hearing in early Feb. If the link does not work let me know.

http://www.austlii.edu.au/cgi-bin/s...FCA/2009/70.html?query=" storm and financial"


----------



## Judd (12 March 2009)

As well, have a read of this.  Love it.  Especially paragraphs 14 to 18.



> 14 Under clause 4, the Bank is entitled to give a borrower a notice of a margin call in circumstances where the current ratio is equal to or exceeds the margin call ratio and on receipt of such a notice the borrower must act to restore the position. By clause 4.3, the borrower agrees that the Bank may provide notice of margin call to the borrower or to the borrower’s client adviser either in writing, orally or by updating the Bank’s website. Clause 4.3(b) provides that:
> It is your obligation to keep your or your Client Adviser’s contact details up to date.
> 
> 15 Clause 4.4 provides that the borrower is responsible for monitoring the borrower’s portfolio and determining when the borrower’s loan might be subject to a margin call. The borrower is required to be in a position to receive any communications from the Bank and to act within the time limits specified in clause 4 and to ensure that a margin call does not occur. By clause 4.5, if the borrower fails to meet a margin call, the Bank may but is not obliged to, sell any or all of the security supporting the borrower’s loan and reduce the amount owing; sell more security than the minimum required to satisfy the margin call; sell the securities without first contacting the borrower, any "margin call contact, or agent you may have nominated"; and sell the securities in the order the Bank chooses.
> ...




http://www.austlii.edu.au/au/cases/cth/FCA/2008/1991.html


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## Garpal Gumnut (12 March 2009)

Am I correct in assuming that the 

Greedy
Stupid
Witless

folk have been thrown a lifeline by CBA.

What a joke.

I might get on to my margin lender and claim all my losses back over the last 12 months.

I am 

Greedy
Stupid
Witless

What a great end to this financial crisis.

Roll over and get it all back

gg


----------



## bunyip (12 March 2009)

Pindibog said:


> Stop putting all Storm clients in one basket. We all didn't realise our profits from our portfolios or go on lavish holidays etc. I have not touch mine in 18years. We did not all mortgage houses, borrow too much money. But hey we were still told lies which impacted on decisions and the Storm badged indexed funds closed. Even to those that were not at margin call. They were forced to realise their loss. I had other shares not storm badged but they were sold out from under me when I gave strict instuctions not to sell at this low point. All the time being told I was not at MC. I WAS able to inject more capital and had so in an associated CMT account??? But no they sold everything without my approval or knowledge at the time.





Yeh, I think there _has_ been an unfair tendency to blame every Storm client for being greedy. Certainly there was greed in some cases, such as those who were already wealthy and financially set up for life when they joined Storm, yet they risked it all by gearing to levels that were just downright silly. Some of these people were not exactly new to investment either, having been in business for many years, and having invested in both stocks and real estate. 
Nor were they ignorant of what the stockmarket can dish out, having seen what happened back in the 1987 crash. 
I find it pretty damned hard to feel sorry for these people.

But I can see there were others whose circumstances were entirely different, and greed wasn't a factor in them getting into strife.
I feel sorry for these people.....the same thing could have happened to me 15 or 20 years ago when I didn't have much experience or knowledge.


----------



## bunyip (12 March 2009)

carey ramm said:


> bunyip - will also be very interesting to see whose handwriting actually filled out the 60 minutes female retirees loan application stating a 100k per month income - anyone want to guess??




Yes Carey, that _will_ be interesting.
But whoever filled in the details can claim that they did so before the client signed it, and that they (the client) signed it only after they had perused the document and verified that the details were correct. 
Of course that may all be outright lies, but proving it would surely be difficult.


----------



## bunyip (12 March 2009)

stung said:


> I wanted to know how the $1880 in the extra monthly income was derived.
> This was apparently the monthly return on investment that I was expected to receive ( 4 percent) once I signed with storm. So as far as I can ascertain my ablility to pay the loan included income from potential future earnings!! Since when has a person been able to apply for a loan and add  possible earnings to their income figure?
> 
> Yes I know its all my fault but I did have a smidge of help from the banks and from storm.




A projected gain of 4% a month or 48% a year sounds a trifle unrealistic, considering that the All Ords averaged a 34% annual gain during the bull market from March 2003 to November 07.


----------



## Glen48 (13 March 2009)

In a twist of Fate most of these victim could have lost their house anyway due to the depression....and the Banks will be stuck with houses which $100K owing on them...I see the Fire victims will get $60K towards a house and $15K for contents ...the un-insured will get more ..as you do.
Me I am going to sue Graham Bell for inventing the phone and allowing me to place a trade on Gold and loose $$$


----------



## Steve Borden (13 March 2009)

bunyip said:


> A projected gain of 4% a month or 48% a year sounds a trifle unrealistic, considering that the All Ords averaged a 34% annual gain during the bull market from March 2003 to November 07.




Without wishing to speak for stung, I think you will find that he/she meant 4% pa paid monthly, of course if that doesn't suit your agenda then you could draw the other conclusion.


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## Solly (13 March 2009)

ASIC has decided not to wind up Storm at this stage. They have asked Worrells to provide a report to creditors on 16/3 regarding Storm's financial circumstances and also an opinion on whether or not the DOCA or liquidation would be in the best interests of creditors..... more to come....


----------



## nigel foxwell (13 March 2009)

ASIC have continued their standard operation of errors or omission and commission - ANZ and OPES, now Storm. Can we interpret this inaction of theirs that SF did not contravene any corporations law? Or possibly that, as with Opes (by their own admission), any action would not be a commercially acceptable risk? How much faith can we possibly have in this organisation?


----------



## Trevor_S (13 March 2009)

nigel foxwell said:


> Can we interpret this inaction of theirs that SF did not contravene any corporations law?




Unless they traded while insolvent, I doubt they did anything untoward in respect of corporation law.  Ripping off gullible customers ("getting the maximum revenue out of each customer") is what all business do, from the Banks, through Storm, to Maccas and the corner store... it's a core strategy of all business.  The only thing that keeps it in check  is decent competition. 

Storm were let down because their business model was fundamentally flawed, this is not against the law as far as I know. It's unlikely that even without a so called "black swan" event, their customers would have made money in the long term, the market tends to regress to the mean, and over swing down (and up) while they do.  Storms customers needed massive leveraging (the fatal flaw) to overcome the huge fees Storm charged and Storm could not get them to switch out to cash without going bankrupt (no more fees to sustain them !).  



nigel foxwell said:


> How much faith can we possibly have in this organisation?




They have as long a leash as their political masters give them.  That aside, why do you think ASIC should be involved, do you have some insite not available to ASIC ?


----------



## Trevor_S (14 March 2009)

http://www.townsvillebulletin.com.au/article/2009/03/13/44395_news.html



> THE signs came down at Storm Financial's office yesterday as the bank-appointed receivers and managers prepared the property for sale.
> 
> The plush Townsville headquarters of the failed national financial planning firm is one of six Storm-owned properties along the east coast that will be put to the market over the next few weeks to repay bank debts.


----------



## Solly (14 March 2009)

Trevor_S said:


> http://www.townsvillebulletin.com.au/article/2009/03/13/44395_news.html
> 
> THE signs came down at Storm Financial's office yesterday as the bank-appointed receivers and managers prepared the property for sale.
> 
> The plush Townsville headquarters of the failed national financial planning firm is one of six Storm-owned properties along the east coast that will be put to the market over the next few weeks to repay bank debts






Maybe gg could make a reasonable cash offer before auction and could add this well positioned property to his portfolio and make a quite reasonable yeild psm or maybe it could become the new Head Office of Garpal Inc...... although I believe he'd have to refit the "dunnies" as I hear he has an issue with the taps and the angle of the water jets on the bidets.


----------



## nigel foxwell (14 March 2009)

Trevor_S said:


> Unless they traded while insolvent, I doubt they did anything untoward in respect of corporation law.  Ripping off gullible customers ("getting the maximum revenue out of each customer") is what all business do, from the Banks, through Storm, to Maccas and the corner store... it's a core strategy of all business.  The only thing that keeps it in check  is decent competition.
> 
> Storm were let down because their business model was fundamentally flawed, this is not against the law as far as I know. It's unlikely that even without a so called "black swan" event, their customers would have made money in the long term, the market tends to regress to the mean, and over swing down (and up) while they do.  Storms customers needed massive leveraging (the fatal flaw) to overcome the huge fees Storm charged and Storm could not get them to switch out to cash without going bankrupt (no more fees to sustain them !).
> 
> ...




Trevor, the issue is not lengthening their leash - they can and must act independently.  They have at their disposal a range of legislation and compliance tools, the issue at hand is how they use these. The insolvency is just one issue - please remember that ASIC are also the "regulators" of the financial services industry. A quick snapshot from Regulatory Guide 181 might be a good start:

*Conflicts of interest: a definition*
RG 181.15 For the purposes of this policy, conflicts of interest are circumstances where some or all of the interests of people (clients) to whom a licensee (or its representative) provides financial services are inconsistent with, or diverge from, some or all of the interests of the licensee or its representatives. This includes actual, apparent and potential conflicts of interest.

And, getting back to the insolvency issue, ASIC's behaviour in relation to OPES: 

_ANZ Bank and Merrill Lynch have reached an in principal $253 million settlement agreement with the liquidators of Opes Prime and the corporate regulator.

The agreement follows mediation between Australian Securities and Investments Commission (ASIC), ANZ, Merrill Lynch and the Opes Prime liquidators, Ferrier Hodgson, ASIC said in a statement.

ASIC said it had agreed not to pursue legal actions against secured creditors ANZ and Merrill Lynch should the proposal be approved by the federal court and Opes Prime creditors.

Its major objective in encouraging the mediation had been to recover compensation for investors without the need for costly litigation and multiple actions, ASIC said.

"The agreement is subject to approval by Opes creditors through a scheme of arrangement to resolve all outstanding claims by Opes creditors against ANZ and other parties,'' ASIC said.

ASIC chairman Tony D'Aloisio said a compromise settlement made commercial sense.

"And hence ASIC will provide the necessary releases to allow the settlement to move forward and be considered by creditors and the court,'' he said.

"In the event that creditors or the court do not approve the settlement, the releases do not apply and ASIC will reassess its position and weigh up public interest and other considerations to determine if it will commence any civil proceedings.''_


Should ASIC not be working to both ends - recovery of financial losses as well as prosecuting to the fullest extent of the law? Should we continue to allow ASIC to let these organisations get away with their actions without ANY legal redress? Just because it is "commercially sensible"?

My point is  - we cannot trust that SF has done nothing wrong until a full and proper investigation and legal proceedings have been completed, however ASIC appear to believe that it is more expedient to let the creditors do the work.


----------



## bunyip (14 March 2009)

Trevor_S said:


> Unless they traded while insolvent, I doubt they did anything untoward in respect of corporation law.  Ripping off gullible customers ("getting the maximum revenue out of each customer") is what all business do, from the Banks, through Storm, to Maccas and the corner store... it's a core strategy of all business.  The only thing that keeps it in check  is decent competition.
> 
> Storm were let down because their business model was fundamentally flawed, this is not against the law as far as I know. It's unlikely that even without a so called "black swan" event, their customers would have made money in the long term, the market tends to regress to the mean, and over swing down (and up) while they do.  Storms customers needed massive leveraging (the fatal flaw) to overcome the huge fees Storm charged and Storm could not get them to switch out to cash without going bankrupt (no more fees to sustain them !).




Good points there Trevor.
You're probably right about Storm not doing anything wrong is respect of the law....unless it can be proved that they fudged the figures on loan applications. 
I doubt if their incompetence was illegal - if it was, damn near every stockbroker and financial advisor in the country would find themselves in court.
Screwing as much money as possible out of clients through high fees isn't illegal either.....as you say, every business does it.

Storm's business model had no chance of surviving indefinitely, due to the fact that it relied on a rising stockmarket. Storm clients had no chance of remaining unscathed long term either.....high gearing meant it was 'game over' just as soon as there was a decent correction in the market. And after four and a half years of bull market, a decent correction was inevitable and imminent.

Storm's costs were huge - a quarter of a million dollars a month just for their Telstra bill. Cash out their clients, no more revenue to meet expenses.
Therein lies one of the fatal flaws of investing money through financial planners - their interests conflict with their clients interests when the market runs out of steam and clients should be moving to the safety of cash. 
Clients and advisors are both making money in a bull market. Bear market, different story - clients should be out, but advisors need to retain the revenue stream  by telling clients to hang in there.
This is precisely what happened to the relative I mentioned in an earlier post....she had a 200 grand gain on her portfolio when the market started looking shaky. 
I told her to take the money and run, her advisor told her to stay in because _'slumps are only temporary and shares are a long term investment'. _
All her gain has now gone, but that doesn't bother her financial advisor who is still getting fees for 'managing' her portfolio.
You wonder how anyone can charge fees for losing 200 grand of a client's money - but that's the financial planning industry for you!


----------



## Garpal Gumnut (14 March 2009)

Solly said:


> Maybe gg could make a reasonable cash offer before auction and could add this well positioned property to his portfolio and make a quite reasonable yeild psm or maybe it could become the new Head Office of Garpal Inc...... although I believe he'd have to refit the "dunnies" as I hear he has an issue with the taps and the angle of the water jets on the bidets.




Not as silly as it sounds, a mate has approached me about getting in to a syndicate.

I haven't been through it all, just got a ladder and looked in the windows one night. The Real Estate Agents are talking it up, offers north of $5m are being sought. 

To be honest the main part looks like a *****house I lived near in Atlanta as a young man, and the rest looks like dongers strung along the street beside it.

Townsville CBD of which it is on the edge looks pretty sick at present so it may go for a song. It would probably come to think of it make a good *****house but I wouldn't have the energy to run one. 

gg


----------



## Jifromoz (14 March 2009)

Hi everyone,

An interesting media release on the ASIC website concerning Low Doc Loans that could potentially turn the whole "Low Doc Finance Industry " on it's ear. May have some bearing on those Stormified clients who received Low Doc Loans and it can be proven that figures were fudged or adjusted. I will follow with interest.

http://www.asic.gov.au/asic/asic.ns...enes+in+low+doc+loan+proceedings?openDocument 

Cheers


----------



## Trevor_S (14 March 2009)

nigel foxwell said:


> The insolvency is just one issue - please remember that ASIC are also the "regulators" of the financial services industry.




That's the thing though, Storm are doing what every other FP is doing in the non fee for service area.  Unless they fudged figures (highly possible with those guys), I am willing to bet one of Garps cee-gars they haven't done anything wrong, legally, this leaves them clear of ASIC.  Did they give shi_tty advice ? sure, is that illegal for an FP, no, they will always argue it suited the client at the time.  eg I see huge ads in todays paper from Dalle Court FPs, doing some spruiking, with text in a large font espousing leveraging as the tool to use to get rich, does this sound like Storm to you ?   If it was illegal, they would be shut down.

Ethically is a whole other ballgame. 



nigel foxwell said:


> And, getting back to the insolvency issue, ASIC's behaviour in relation to OPES:




Fair point about OPES.  I agree, the whole Opes thing was dodgy. AFAIK, Opes maintained in their literature that the purchaser held ownership of the shares but that NEVER happens with a margin loan, they can and will and should be able to sell them out from under you if there is a margin call you do not correct.  Same as those in here saying how can a guy on $50K per annum get a $1.5Mil loan, Easy, put your house into hock, use the money from that to buy shares, use those shares as security on a margin loan and buy a crap load of shares on the margin loan.  It's easy and that's how it should be, if people want to do that and not have any serviceability, that's their own fault but don't make it hard for me, by making Margin Loans into some sort of full doc compliance thing, or scrapping them altogether.



nigel foxwell said:


> Should ASIC not be working to both ends - recovery of financial losses as well as prosecuting to the fullest extent of the law?




Not to my mind, I want ASIC to keep it's nose out of my business.  I am happy to take the hit for financial loss's from decision I make, because the other side of that is having ASIC make the whole process unwieldy by being given a longer leash by Government.  You just have to know, if Government gets involved, it gets worse not better.  You can never protect the gullible (like me) from charlatans, I say this with some alacrity, being an ex Pasminco shareholder (those bast_ards) 



nigel foxwell said:


> Should we continue to allow ASIC to let these organisations get away with their actions without ANY legal redress? Just because it is "commercially sensible"?




What would you propose to stop that ?  Unlimited Liability is a possibility (it exists in the UK for example) I would be happy to countenance BUT that must be ubiquitous ie those who took out loans have to pay them back (ie the very ones complaining here) as well as Storm directors having everything but the shirt off their back taken .  

As a shareholder of ANZ (with the Opes debacle) and CBA (with the Storm debacle) I encourage them to go after those who have taken on debts they don't want to pay and be ruthless in getting MY money back.  You wanted my money to loan, to speculate on a continually rising ASX index ? well no problems but I want it back when we agreed.



nigel foxwell said:


> however ASIC appear to believe that it is more expedient to let the creditors do the work.




Like I said, perhaps ASIC actually know more then you in this instance, and have made their current decision based on their knowledge ?

At the end of the day it will come down to: did Storm do anything illegal ? and even if they did, there is no real redress.  Though from what some are saying they were unable to sell out when they asked Storm to convert them to cash.  Did the Bank do anything illegal ? if they did, the clients have some form of redress.   If not, take the hit, get some financial education and move on.


----------



## Garpal Gumnut (14 March 2009)

I'm not sure whether its my glasses or not but the colour on Manny's website is fading , especially his mission statement. 

gg


----------



## nigel foxwell (14 March 2009)

Trevor, I will be the first to admit that I have absolutely no insight into the detailed operations of Storm other than that which is reported in the media. I also have a higher than average but still limited working knowledge of legislation in this area.  

The position I take is as member of the public and as such, I would like to see ASIC clarify their actions and inactions. To date their actions suggest that they act on the side of expediency and not in the public interest. For you to so lightly dismiss the issue of insolvent trading is to give a free pass to all those who would be too big or expensive to take to court, and reinvigorate the bleeding ulcers of all those smaller, but no less innocent, business operators who have faced the full force of the act.

In relation to your view on the operation of all non fee-for-service FP's, you are absolutely correct. They all do have an amount of conflict of interest, but what must be recognised and corrected for ever, is that SF operated a model that would not have stood up to any scrutiny (this scrutiny was beyond and not the responsibility of clients), and that is where ASIC, as the regulator, I repeat, REGULATOR, of those with an AFS licence has utterly failed. 

It became quite apparent in the early days of this mess, that SF clients were not to blame. The number and frequency of irregularities in all aspects of the operations of all parties involved (SF, unnamed financial institutions) cannot be overlooked by ASIC.  I don’t think you are gullible Trevor, but you find it easy to let this go and carry on, putting it down to experience, but I think that there are many people who have been failed by those in question, who would like to see the law and associated regulations enacted. 
Have a look through the content on the link below, and let me know if you feel that SF, and unnamed financial institutions operated within the letter and intent of these requirements.

www . asic.gov.au/asic/ASIC.NSF/byHeadline/financial%20services%20compliance

(sorry for the disjointed URL, not enough XP yet..)

This is about justice, and trusting those who are charged with protecting us. I know that there can never by 100% prevention, and I do not want a nanny-state, however when repeated warnings go unheeded, and investigations are quit, what are we to do?  There is redress Trevor – it is called Jail. It is a deterrent, a disincentive for those that go after us to repeat this kind of mistake. I hear it is even successful in some instances.


“… it is not merely of some importance but is of fundamental importance, that justice should not only be done, but should manifestly and undoubtedly be seen to be done.” 
Lord Hewart from Rex v Sussex Justices


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## Solly (14 March 2009)

Garpal Gumnut said:


> I'm not sure whether its my glasses or not but the colour on Manny's website is fading , especially his mission statement.
> 
> gg





gg, it doesn't appear to have faded when viewed on my crackberry but the hue does seem to have changed from a feint grey to tinge of "dark brown", somewhere aroung  PMS 732. I could get the guys in post production to confirm this on monday...


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## Glen48 (15 March 2009)

Won't be long before it turns Sepia and fades to Black then R I P you show


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## Trevor_S (15 March 2009)

nigel foxwell said:


> For you to so lightly dismiss the issue of insolvent trading




? My issue is that insolvent trading IS the only real power they have in this respect, the rest of it is perspective.  Do the best by your clients etc is all a load of hot air, designed to obfuscate.



nigel foxwell said:


> is that SF operated a model that would not have stood up to any scrutiny




Agreed.



nigel foxwell said:


> (this scrutiny was beyond and not the responsibility of clients),




Disagree.  I could see it, most of the world is smarter then I. 



nigel foxwell said:


> and that is where ASIC, as the regulator, I repeat, REGULATOR, of those with an AFS licence has utterly failed.




Disagree, Storm were investigated by ASIC, Madhoff was investigated by the SEC etc etc  Don't you think ASIC would be under enormous pressure from their politically opportunistic masters to do something to save the "battlers" ?  The regulator failed because it is set up to fail, the same way the Storm business model was set up to fail.  You can't legislate against gullibility nor against well versed charlatans, attempting to do so results in the mess we are in, where those hard done by are surprised when the white knight of the regulator doesn't give them a refund for example.    eg Do I want ASIC checking the veracity of loan documents I lodge ? NO ! image they staff they would need and the taxes I would be paying ! If I lie and it all falls over, gaol me.  If Storm clients lied, they should be gaoled, if Storm staff lied, gaol them and if vicarious liability can be proven gaol the directors.  If bank staff lied, gaol them ... but you know what, no one seems to be looking into the activities of the Storm clients to see if there was any malfeasance on their part ?

As I said, if you are looking to a solution, then I could only support banning commission based FP's as the first step forward and look towards unlimited liability as another step.  Having more regulation won't work and the current system doesn't work, you protesting that won't change those glaring facts.  

Storm seemingly have complied with the current regulation otherwise ASIC would have been all over them.  That doesn't discount things like Storm and their clients (or the banks !) perhaps presenting dodgy financials for example, and if any party has done that, and it can be proven, they should have their World caved in. 



nigel foxwell said:


> It became quite apparent in the early days of this mess, that SF clients were not to blame.




I disagree vehemently with that, the buck stops with them. 



nigel foxwell said:


> The number and frequency of irregularities in all aspects of the operations of all parties involved (SF, unnamed financial institutions) cannot be overlooked by ASIC.




Like you, I can only speculate, to my mind it sounds like investors putting dodgy financial to the banks rather then the other way around.  Just look to the Sommersoft forums for people all the time trying to figure out ways to circumvent banks approval process to get themselves higher into debt, I smell a whif of a Storm strategy in that as well    Once Storm clients start wondering why there was no checking by Banks on how come they got large margin loans, I just know the clients have no idea what they are talking about ! 



nigel foxwell said:


> but you find it easy to let this go and carry on, putting it down to experience, but I think that there are many people who have been failed by those in question, who would like to see the law and associated regulations enacted.




I lost money in the current downturn (if your fond of mark-to-market as a measure of your wealth. me, not so much), about a 16% loss but that's because I didn't pay way over the money for stocks and didn't really buy much in the last 2 years where I accumulated cash, waiting for a correction.  Does that make me a genius, no, frugal, yes.  I am not looking to blame anyone for where I am at.  If I am right, things will pick back up again in the years to come.  if I am wrong, I will pack my swag and head out 



nigel foxwell said:


> Have a look through the content on the link below, and let me know if you feel that SF, and unnamed financial institutions operated within the letter and intent of these requirements.





Fixed it for you, use the "Insert Link" icon up near the fonts etc above the edit window where you are typing. 

I don't know,  I am _guessing_ based on my observations and the actions of ASIC... because Storm were audited previously AND ASIC has backed away they don't have much of a case, who knows for sure though.  Like I said, unless SF did something illegal that can be proved comprehensively (not a he said she said scenario) or they traded while insolvent, then ASIC will leave them to collapse and move on. At the end of the day the clients won't get anything out of Storm, as the directors are protected by the limited liability laws. The banks are dammed if they do (look after the most needy, it gets thrown in the in their face as covering up) dammed if they don't (heartless bastards).  

Business can do things that are illegal in the best interest of staff, for example , I had a couple staff come to me and beg me to give them a few extra hours for a short time to get by. I said I can't pay overtime, they said they would work at normal time, saves them getting another job etc (about another 6 hours a week) so I didn't employ an extra staff member on part time and let them work  it.  They left and one complained to the Workplace Ombudsmen and I was audited and done for it... Who was wrong vs who broke the law ?



nigel foxwell said:


> This is about justice,




Nothing to do with justice, all about fear, greed and gullibility.



nigel foxwell said:


> and trusting those who are charged with protecting us.




See above.  Your espousing ethereal concepts as a solutions, to my mind.  I would hazard a guess most clients don't want justice, they want their money back.



nigel foxwell said:


> I know that there can never by 100% prevention, and I do not want a nanny-state, however when repeated warnings go unheeded, and investigations are quit, what are we to do?  There is redress Trevor – it is called Jail. It is a deterrent, a disincentive for those that go after us to repeat this kind of mistake. I hear it is even successful in some instances.




I appreciate what you are saying and you have made some excellent points, *my point* boils down to the fact the system doesn't work and Storm clients have to accept most (some ?) of the responsibility, (not doing so will leave them bitter) it's no use screaming at ASIC to do something when they (probably) can't,  so, change the system....

I am just starting to repeat myself, so hows about I leave it there, stop choking this thread and let Solly continue his good work.  It is seemly actually appreciated as opposed to my drivel


----------



## Solly (15 March 2009)

On cassimatis.com.au there is now an "URGENT NOTICE TO ALL STORM CLIENTS, STAFF AND CREDITORS" regarding the proposed DOCA (Deed of Company Arrangement) from E&J C that will be put to creditors at the second Creditors meeting on 23/3/09.

On the link http://cassimatis.com.au/urgent you will find, the DOCA terms, a 'simple english' explaination of the DOCA, Formal Proof of Debt or Claim Forms for both General & Employees and an Appointment of Proxy Form to appoint Stephen Russell of Russell and Company Solicitors.

E&J C state on the link;

"We understand fully that the Storm collapse has had devastating effects oneveryone – we are part of that group and are in the same boat.  Most of us have been together as a group for many years – we are best placed to work together to fight this battle – not drawing our swords separately against each other. We have a common enemy – let us work together to defeat the CBA for what it has done to all of us."

Best of luck to all the "Storm" Troopers in your quest........


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## nigel foxwell (15 March 2009)

Thanks for the great volly Trevor - its good to see someone rebut me! Yep, agreed, I'll let this bone go. 


But just as a general question to all - does anyone know if the Action Group will be helping to encourage or support submissions to the Senate Inquiry? The terms of referencce look very interesting...


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## Julia (15 March 2009)

Trevor_S said:


> I am just starting to repeat myself, so hows about I leave it there, stop choking this thread and let Solly continue his good work.  It is seemly actually appreciated as opposed to my drivel



On the contrary, Trevor.   Your comments above are about the best summary of the Storm situation on this thread.   Drivel it is not.


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## Garpal Gumnut (15 March 2009)

Julia said:


> On the contrary, Trevor.   Your comments above are about the best summary of the Storm situation on this thread.   Drivel it is not.




I'd agree Julia, an apt summary Trevor.

By the way it sounds as if sicag.info, the Storm folks self help group are trying to oust the Mannymen from their deliberations.

gg


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## Garpal Gumnut (15 March 2009)

Garpal Gumnut said:


> Anyone know anything about these guys. A few of my mates are clients. They are Townsville based . I don't use advisers.
> 
> gg






Garpal Gumnut said:


> I'd agree Julia, an apt summary Trevor.
> 
> By the way it sounds as if sicag.info, the Storm folks self help group are trying to oust the Mannymen from their deliberations.
> 
> gg




One of my mates called me just now, concerned about the attached message  on the SICAG.INFO site.

He was concerned that SICAG might not be working on his behalf.

SICAG need to clarify and declare any conflicts of interest they have on their committee otherwise they will lose credibility and may themselves be open to litigation.

gg


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## Trevor_S (15 March 2009)

nigel foxwell said:


> Yep, agreed, I'll let this bone go.




I thought this interesting, albeit about Madhoff, it has a sentiment that might sound eerily familiar ?

http://www.nytimes.com/2009/03/14/business/14nocera.htm



> I suppose you could argue that most of Mr. Madoff’s direct investors lacked the ability or the financial sophistication of someone like Mr. Hedges. But it shouldn’t have mattered. Isn’t the first lesson of personal finance that you should never put all your money with one person or one fund? Even if you think your money manager is “God”? Diversification has many virtues; one of them is that you won’t lose everything if one of your money managers turns out to be a crook.
> 
> “These were people with a fair amount of money, and most of them sought no professional advice,” said Bruce C. Greenwald, who teaches value investing at the Graduate School of Business at Columbia University. “It’s like trying to do your own dentistry.” Mr. Hedges said, “It is a real lesson that people cannot abdicate personal responsibility when it comes to their personal finances.”
> 
> And that’s the point. People did abdicate responsibility ”” and now, rather than face that fact, many of them are blaming the government for not, in effect, saving them from themselves. Indeed, what you discover when you talk to victims is that they harbor an anger toward the S.E.C. that is as deep or deeper than the anger they feel toward Mr. Madoff. There is a powerful sense that because the agency was asleep at the switch, they have been doubly victimized. And they want the government to do something about it.






nigel foxwell said:


> But just as a general question to all - does anyone know if the Action Group will be helping to encourage or support submissions to the Senate Inquiry? The terms of referencce look very interesting...




It will be interesting to see what eventuates, the cynic in me suggests it will be mostly puffery and nothing of any real substance will come out of it.


----------



## Solly (16 March 2009)

*"Axe poised to fall on Storm Financial"*

"THE axe could fall on Storm Financial today.......a report to the failed financial adviser's creditors could decide whether it puts Storm into liquidation or lets creditors make that decision....."

"It is understood that there are concerns the founders will use the DOCA to head off any legal action against themselves as directors of Storm, as well as against the company itself."


Story in The Age by Colin Kruger is here;

http://business.theage.com.au/business/axe-poised-to-fall-on-storm-financial-20090315-8yzx.html


----------



## nigel foxwell (16 March 2009)

Yeah, the Senate Inquiry sounds interesting, will be a lot less so in practice, and the practical outcomes? Probably will be less than 50% of any recommendations and about five years away.

On the Madhoff scam (shouldn't they change it from Ponzi scheme to Madhoff scheme? He should get some recognition for his hard work...) .. people did abdicate their responsibility to a mysterious reputation... not a solid foundation of investment knowledge. Also, there were many voices for many years that called for investigation by the SEC, which was brushed aside. The reason people are calling on the Government to act is because they (SEC) did fail in their duties, if this guy was just incompetent, and acted in good faith and within the letter of the law, people would have no basis for asking the Gov' to correct their or his errors of judgment.


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## Garpal Gumnut (16 March 2009)

I met a bloke down at The Strand in Townsville today, just by chance, and he was distraught over his losses in Storm. 

He felt he had let his kids and grandkids down. The effects of this debacle will last for generations.

He seemed without hope or a plan for the future.

You who are responsible need to realise the effects you have had on ordinary people. 

gg


----------



## Solly (16 March 2009)

Garpal Gumnut said:


> I met a bloke down at The Strand in Townsville today, just by chance, and he was distraught over his losses in Storm.
> 
> He felt he had let his kids and grandkids down. The effects of this debacle will last for generations.
> 
> ...




I spent Sat arvo with a couple who have been flattened by their Storm exposure, the affect on their teenage kids is enormous. I fully endorse your last sentence. They are just ordinary folk, who just had an absolute belief in Storm......maybe they would have been better just sending all their money to Benny Hinn instead..


----------



## Jifromoz (16 March 2009)

gg, Agree with your last comment as well. I hope that justice prevails and all of the people responsible go to jail for a very very long time.

Cheers


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## Solly (17 March 2009)

*"Storm bound for liquidation"*


"THE administrators of Storm Financial have recommended that creditors put the failed wealth adviser into liquidation...."

"A liquidator would have the power to overturn the $2 million dividend the Cassimatises paid themselves on December 15..."

"The $2 million payment was also illegal ........
The founders appointed Ms Cassimatis's sister Dawn Collette to the board on December 23 and reauthorised the payment on this date."

Full Story by Colin Kruger in the SMH is here;


http://business.smh.com.au/business/storm-bound-for-liquidation-20090316-8zxx.html


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## stung (17 March 2009)

Garpal Gumnut said:


> I met a bloke down at The Strand in Townsville today, just by chance, and he was distraught over his losses in Storm.
> 
> He felt he had let his kids and grandkids down. The effects of this debacle will last for generations.
> 
> ...






Garpal Gumnut said:


> Am I correct in assuming that the
> 
> Greedy
> Stupid
> ...




I find your contrariness intriguing. Are we "ordinary folk' or "greedy, stupid and witless"?


----------



## sqwark7600 (17 March 2009)

An excellent piece from Tony Boyd on Business Spectator on the structure of this tragic fiasco:

http://www.businessspectator.com.au/bs.nsf/Article/Storm-$pd20090317-Q7QJQ?OpenDocument&src=sph&alerts&loc=center

These two seem like the cons from hell with the hides of an elephant. I hope the desperate and the broken don't fall for their latest scam and the 1000 strong class action results in the same result for them as Bernie Madoff received. However, I don't see these two ever admitting to guilt as he did; they still have a following of clients. Unbelievable!
:sheep:


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## Trevor_S (17 March 2009)

I see I am not the only one advocating the banning of commissions for FP's.  

http://www.smh.com.au/news/business...hose-bad-apples/2009/03/09/1236447130056.html



> *Commissions should be banned*.




but I disagree with this part



> Also, the law around what constitutes "appropriate advice" needs to be clarified and case law built up through the courts and the penalties for breaches increased.




Who makes the case as to what is appropriate ?  We can ask 50 people on here about appropriate advice, and get a plethora of different answers.  It's  a nonsense to my mind because it itsn't and can't be empirical.  Some older/retired investors may want to take a chance on speculative wealth accumulation, worst case scenario, they do the lot and go on a tax payer subsidised lifestyle (pension).  The advise to them might be wholly inappropriate IF the metric is a safe steady income in retirement but if they are happy with the decision, who is anyone to query that choice ?  Just because it is inappropriate advice, doesn't make it wrong.   It seems this will only ever be evoked when people are loosing money, after all, they won't be complaining (ah la Storm) to anyone if they are making money and yet Storms advice for example was wholly inappropriate (as it never had any chance of success, at least putting it all on RED at Jupiters has some chance) from the get go, so by the time this is invoked, it's too late, the money has disappeared.

I despair of any changes being ineffective, after all we have been though all of this before with little to nothing achieved.  Government is ineffectual in this regard, there track record proves this.  They will screw around at the peripheries, make it much more complicated, leading to  more friggin' paperwork and increased compliance costs that will need to be passed onto the end user.


----------



## Trevor_S (17 March 2009)

sqwark7600 said:


> and the 1000 strong class action results in the same result for them as Bernie Madoff received.




There is a huge difference between the two cases, not philosophically between the two client bases though (unfortunately).  I sure hope Storms clients thoughts of revenge aren't pinned on the Madhoff outcome ?

Madhoff was an illegal ripoff.  Storm was a legal ripoff (pending discovery into dodgy financials with the banks and even then, they probably have to prove vicarious liability if it was carried out by staff, if they want  to nail the principals or other directors)


----------



## Trevor_S (17 March 2009)

http://www.townsvillebulletin.com.au/article/2009/03/17/45011_hpnews.html



> EMMANUEL and Julie Cassimatis have appealed to devastated clients and creditors of Storm Financial to join them in the fight against the `common enemy' _ the Commonwealth Bank.


----------



## sqwark7600 (17 March 2009)

Trevor_S said:


> There is a huge difference between the two cases, not philosophically between the two client bases though (unfortunately).  I sure hope Storms clients thoughts of revenge aren't pinned on the Madhoff outcome ?
> 
> Madhoff was an illegal ripoff.  Storm was a legal ripoff (pending discovery into dodgy financials with the banks and even then, they probably have to prove vicarious liability if it was carried out by staff, if they want  to nail the principals or other directors)




With respect we do know what Madoff was about as all the evidence is out and he has been sentenced. We don't know what the cons at Storm were about because they have not been tried yet - except in your mind (but 54 litigants are about to).
:sheep:


----------



## Farencue (17 March 2009)

*"We have a common enemy _ let us work together to defeat the CBA for what it has done to all of us," the Cassimatises said in documents accompanying the DOCA.

They claimed this would be a better outcome for creditors and clients because they would not have to pay for the court action.

However, clients also have to abandon any claims against Storm, its employees and its officers, including the Cassimatises, for the advice they gave that led to their $1 billion losses.

"We believe as a collective group, working with us rather than against us, you will get a better outcome," they said.*


Ive read this whole thread with great interest as a resident of FNQ but have had no dealings with Storm myself.
I hope that no Storm clients reading the Townsville Bulletin are suckered in further by what is written above.  Absolutely unbelievable, as if Mr Cassimatis has anyone's best interests but his own in  mind.
In the world of scamsters this is called reloading.


----------



## Jifromoz (17 March 2009)

Hi everyone,

The following note is on the Cassimatis website :

17.3.09
Please continue to send in your DOCA votes:
The FIGHT IS NOT OVER! Only people power
will win this fight! Do not believe the reports
that it is all over..its not over until YOU and the creditors say so! 

It appears that it's all coming home to roost and Mr & Mrs Cassimatis are getting more frantic.

Also a good article at http://www.smartcompany.com.au/fina...ail-to-back-up-claims-of-bank-conspiracy.html 
Cheers


----------



## MarginLoanLoss (17 March 2009)

STORM INVESTORS MAY NOT BE ALONE
By Tony Martin SC​
Mr Martin is an experienced commercial barrister practising at the Sydney Bar

The hapless plight of the Storm clients is distressing.  They are facing significant losses and, in many cases, financial ruin as a consequence of an aggressive gearing strategy recommended to them by their financial adviser, Storm.

If the reported settlement with the margin lender, CommBank, proceeds, hopefully that will restore some sense of financial stability and dignity in their otherwise shattered lives.

But is this disaster confined only to the Storm investors?  Probably not. 

The core problem is to be found in the aggressive gearing strategy promoted by Storm that involved margin lending.  A margin loan enables you to borrow money to invest in shares, using existing investments as security.  Borrowing money to invest in shares in this way, also known as “gearing”, can result in higher returns relative to your equity in the share portfolio, but it can also magnify the your potential losses if the value of the share portfolio falls.

When an investor enters into a margin loan to buy shares, the margin lender takes security (i.e. a mortgage) over the share portfolio so that in the event of default the shares can be sold to repay the loan.  The investor is exposed to the risk the shares might fall in value because the share market can rise and fall frequently and rapidly.

If this happens, as it has occurred in the current financial crisis, the shares would be worth less than the loan creating a shortfall in the security for the margin lender.

To protect themselves against the possibility of a shortfall, margin lenders limit the borrower’s level of gearing to a set percentage (known as the loan-to-value ratio or LVR) of the value of the share portfolio.  Usually, the LVRs are set at a maximum of 70%.  This means that the borrower has to contribute the difference (i.e. 30%) from their own money.  This difference is called the “margin”.

The aggressive gearing strategy employed by Storm amounted to “double gearing”.  It involved the investor borrowing to buy shares using the equity in their homes as the security for that loan.  They would then use those shares as security for entering into a margin loan to buy additional shares; that is, to effectively “double up” the gearing.  This had the effect of further increasing the gains and further magnifying the losses that would otherwise have been obtained under a normal margin loan.

The strategy worked like this: an investor would borrow $50,000 to buy shares using the equity in their home.  They would then use those shares as security to take out a margin loan for another $50,000 to buy further shares.  As a result, they would have shares at a value of $100,000 but funded by a corresponding debt of $100,000, which required servicing. 

To say the least, this “double gearing” strategy was inherently risky.  It was riskier than just entering into a normal margin loan. By increasing the “gearing” level, the “risk” of the investment was also correspondingly increased. These increased risks were at least threefold. 

Firstly, there would usually be no equity in the investment from the outset.  The investor would have usually borrowed 100% of the value of the share portfolio.  This meant that the investor was exposed to the risk that any fall in the initial value of the shares would put the investor immediately in a “negative equity” position.

Secondly, the “double gearing” strategy increased the risk for the investor of their losses being magnified in a market downturn beyond that which they would have suffered if they had just entered into a normal margin loan.

Thirdly, the “double gearing” strategy increased the impact on the investor of a margin call received in the event of a market downturn.  The investor would need to meet the call from their own additional financial resources or otherwise sell part of their underlying share portfolio.  The selling of any part of their portfolio in a falling market would immediately crystallise their losses.

ASIC has recently stated that it believes that the “double gearing” strategy used by Storm has “not been widely used”, but nonetheless is “directing resources to assessing other planners and advisers” to confirm this.  Perhaps it will be found that there are relatively few investors in the position of the Storm clients who had margin loans using the “double gearing” strategy.  However, in the light of past experience in circumstances where opportunities for financial gain existed in an unregulated market, it would be surprising if these gearing practices were not more widespread than is currently apprehended. 

The fundamental problem in Australia is that margin lending is unregulated as a financial product.  However, what is clear is that any investor embarking upon a margin loan needs to be fully aware of the risks involved before entering into that transaction.  When the risks of the margin loan are further compounded by the use of the “double gearing” strategy, the need for the investor to be aware of the additional risks associated with that strategy is exacerbated.

In Australia, a large number of investors who entered into margin loans did so on the advice of their financial advisers.  As part of their obligations to their clients, the financial advisers must warn the investor of the risks involved before entering into such a transaction.  This is particularly so when the investor employed the “double gearing” strategy.  The investor must warn of all of the additional risks associated with such a strategy.  The investor must also be advised that they should have available other financial resources to meet any margin call in the event of a market downturn.  If those other financial resources were not readily available, this type of investment would probably not have been suitable for that particular investor.  
If the financial adviser did not give these warnings, that would probably constitute a breach of their duty of care to the investor. In those circumstances, the financial adviser would be liable to compensate the investor for any losses that result from that breach. The question now is how long it will take before these actions begin to surface for determination in the courts.


----------



## Garpal Gumnut (18 March 2009)

MarginLoanLoss said:


> STORM INVESTORS MAY NOT BE ALONE
> By Tony Martin SC​
> Mr Martin is an experienced commercial barrister practising at the Sydney Bar
> 
> ...




What an enlightened post and well worth a read by Storm victims, SICAG, and Manny, and CBA and BOQ.

I'll show it to my mates whose lives have been ruined.

gg


----------



## swazee (18 March 2009)

Here is interesting case against Monitor Money back in 2006 which has some similarities....

http://www.austlii.edu.au/au/cases/cth/federal_ct/2006/1716.html

1 The applicants are retired school teachers. In July 1992, the applicants consulted the respondents to obtain financial and investment advice about their future retirement. At all material times, the first respondent was a licensed securities dealer and securities adviser, and the second respondent acted as its representative. The applicants say they told the second respondent that they wanted to be in a position of having, during their retirement, an annual income of $40 000 indexed for inflation. The respondents provided financial and investment advice to the applicants over a period of 11 years. A central part of the advice given to the applicants was that they should enter into margin loans and use the money so borrowed to build up their investment portfolios. Relying on that advice, the applicants borrowed money on margin loans and made investments.

2 In 2002, the applicants were required to dispose of a substantial portion of their investment portfolios to meet margin calls which were made on the margin loans. In 2003, the applicants terminated their relationship with the respondents.


----------



## swazee (18 March 2009)

****NEWS FLASH****

ASIC puts Storm into liquidation 
Deed of arrangement flawed 

By Christine St Anne
Wed 18 Mar 2009 

The regulator has applied to the Federal Court to wind up the embattled group. 

ASIC has applied to the Federal Court to put Storm Financial into liquidation, saying it is in the best interests of creditors and retail investors. 

The regulator's application was prompted by information published on the Cassimatis website, which ASIC believes is misleading. 

This information concerned the proposal for a deed of company arrangement (DOCA) to be voted on at the creditors' meeting. 

The Federal Court had adjourned the meeting of creditors to 30 March 2009 and fixed ASIC's application for a full hearing on 24 March. 

"The issues raised by the proposed DOCA are complex and concern the conduct of potential future litigation by Storm as well as releases of liability of the directors of Storm," the ASIC statement said. 

ASIC's application to the court also raises the issue of whether the DOCA is so flawed that it could ever be in the interests of creditors. 

The regulator is investigating all of the circumstances around the collapse of Storm, which include possible actions against Storm, its directors and officers.


----------



## Solly (18 March 2009)

swazee said:


> ****NEWS FLASH****
> 
> ASIC puts Storm into liquidation
> Deed of arrangement flawed
> ...




If you want to see the full letter from ASIC to E&J C.... just go to ASIC  it's quite a good read plus there's some other interesting docs there as well.....


----------



## swazee (18 March 2009)

Solly said:


> If you want to see the full letter from ASIC to E&J C.... just go to ASIC  it's quite a good read plus there's some other interesting docs there as well.....




IMO this is the last nail in SF's coffin. SF has still not removed the DOCA from its website under ASIC orders, either they feel that it does not breach the law or they are still in denial. The pattern of misleading behaviour is disturbing albeit not surprising. It is almost a forgone conclusion that it will be put into liquidation. The Slater and Gordon class action will be probably the best avenue to 'try' and recover something from the wreckage.

If there are any Storm clients on here that have been interviwed by ASIC/FOS, I would be interested in the feedback you have been given, only in broad terms of course.

Until the next chapter......


----------



## bunyip (18 March 2009)

Garpal Gumnut said:


> What an enlightened post and well worth a read by Storm victims, SICAG, and Manny, and CBA and BOQ.
> 
> I'll show it to my mates whose lives have been ruined.
> 
> gg




Absolutely.

Cassamatis can rave on all he likes about how it was all the CBA's fault. And Storm clients can choose to believe him if they're gullible enough.

But the core of the problem was that..... 
1. Storm advised their clients to gear to highly risky levels in the highly risky stockmarket.
2. Clients accepted and acted on this advice without adequately considering the risks of the strategy, or whether it was suitable for their individual situation.
3. Clients stayed in the stockmarket as it plunged, rather than following the more prudent strategy of converting to cash before suffering catastrophic damage to their accounts. Their accounts should never have been allowed to even come close to margin call.

On point 3, the argument will rage forever about whether it was Storm's responsibility or the clients responsibility to decide when to move to cash. I'd say they both had a responsibility. And once made, the decision should have been implemented without hesitation. Nobody should have allowed Storm to fob them off or talk them out of it.
When you employ people to do a job for you, they do what you say, not the other war around.

Cassamatis would start having some credibility if he faced up to these facts, rather than hiding behind the excuse that it's all the banks fault.


----------



## sqwark7600 (18 March 2009)

In regard to ASIC's application in the Federal Court for liquidation of Storm, I think this is their most telling statement:
_"The issues raised by the proposed DOCA are complex and concern the conduct of potential future litigation by Storm as well as releases of liability of the directors of Storm," the ASIC statement said."_ My tint.
Con people to the end; and for those stupid enough to be hoodwinked a second time don't worry your proxies won't be used and hopefully you heed the second wakeup call. 
:sheep:


----------



## swazee (18 March 2009)

I wonder if Slater and Gordon have advised clients to contact AIG (PI Insurers) as part of the class action I doubt AIG can be drawn in as they are only the insurer...this may be another course of action and possibly better than taking on the CBA...

It has also been mentioned on here before about formally lodging a complaint through the CBA's internal dispute resolution scheme, if they cannot be resolved then it moves to an independant adjudicator. Again, costs nothing but wirth a try.

From the Administrators report......

"Storm carried Professional  Indemnity Insurance. Clients of Storm who are able to demonstrate that  they have  incurred  losses as a result of negligence by Storm may be paid, or partly paid, by Storms insurers 
provided the claims lodged are not subject to any of the policies exclusions."

Negligence will not be difficult to prove, particularly under the 'reasonable basis' test and the 'know your client' rule. AIG may also have other criteria they use to determine negligence....who knows.

Have any Storm clients been in contact with AIG yet??


----------



## Solly (19 March 2009)

*"ASIC targets banks over $1b Storm collapse"*

"THE corporate watchdog will widen its investigation into the $1 billion collapse of the wealth adviser, Storm Financial, to include its financial backers such as Commonwealth Bank, Macquarie Group and Challenger Financial."


"....it is believed the Australian Securities and Investments Commission is examining whether it can secure an Opes Prime-style settlement that may lead to a compensation fund."


Full Story by Eric Johnson in the Sydney Morning Herald is here;

http://business.smh.com.au/business/asic-targets-banks-over-1b-storm-collapse-20090318-927x.html


----------



## Pindibog (19 March 2009)

swazee said:


> I wonder if Slater and Gordon have advised clients to contact AIG (PI Insurers) as part of the class action I doubt AIG can be drawn in as they are only the insurer...this may be another course of action and possibly better than taking on the CBA...
> 
> It has also been mentioned on here before about formally lodging a complaint through the CBA's internal dispute resolution scheme, if they cannot be resolved then it moves to an independant adjudicator. Again, costs nothing but wirth a try.
> 
> ...




AIG (American International Group) are considered to be one of the major contributors to the current global credit situation, and the Cassimatis’ will have a very limited liability and, pro-rata little to divide amongst the creditors.


----------



## nigel foxwell (19 March 2009)

Better late than never for ASIC, they really took their time with this. It does seem that they are looking at getting some sort of compensatory outcome for creditors and investors, which would be a solid outcome. The downside is if ASIC pursues this without a view to following up with penalties for the (as yet to be determined) guilty parties.

For those of who missed it earlier - I recommend having a read of Alan Kohler's "The Eureka Way" (no endorsement to buy, I borrowed from the library). It outlines his issues with the FP landscape as it currently exists and shows examples of breaches of duty and the outcomes.


----------



## Solly (19 March 2009)

*"Storm subsidiary placed into liquidation"*

"Geelong financial planning business Victorian Families Retirement Investment Group Pty Ltd, a wholly owned subsidiary of Storm Financial, was on Thursday placed into provisional liquidation by the Federal Court in Brisbane"

Story in the Sydney Morning Herald is here;

http://news.smh.com.au/breaking-news-business/storm-subsidiary-placed-into-liquidation-20090319-931x.html


----------



## Garpal Gumnut (20 March 2009)

nigel foxwell said:


> Better late than never for ASIC, they really took their time with this. It does seem that they are looking at getting some sort of compensatory outcome for creditors and investors, which would be a solid outcome. The downside is if ASIC pursues this without a view to following up with penalties for the (as yet to be determined) guilty parties.
> 
> For those of who missed it earlier - I recommend having a read of Alan Kohler's "The Eureka Way" (no endorsement to buy, I borrowed from the library). It outlines his issues with the FP landscape as it currently exists and shows examples of breaches of duty and the outcomes.




I must warn you all that SICAG.INFO when I last looked this arvo still had a prominent link to Manny's missive about the Cassimatis plan but no mention on ASIC's significant statements over the last two days.

Any of you Storm victims get advice as there is a lot of it about.

Check the ASIC site befor you sign anything as the sicag site is either not up to date or it is............. whatever.

gg


----------



## swazee (20 March 2009)

Garpal Gumnut said:


> I must warn you all that SICAG.INFO when I last looked this arvo still had a prominent link to Manny's missive about the Cassimatis plan but no mention on ASIC's significant statements over the last two days.
> 
> Any of you Storm victims get advice as there is a lot of it about.
> 
> ...




There is very concerning. Timely information is what SF clients need at this point. Unless SIAG have communicated directly via email. If SF clients have not been notified at all by now, I would be requesting my $50 back!!

The fact that Ron Jelich one of the biggest creditors and someone had a very good idea of how Manny and SF operates voted against the DOCA should be a good indication of which way to vote.


----------



## bunyip (20 March 2009)

swazee said:


> I wonder if Slater and Gordon have advised clients to contact AIG (PI Insurers) as part of the class action I doubt AIG can be drawn in as they are only the insurer...this may be another course of action and possibly better than taking on the CBA...
> 
> It has also been mentioned on here before about formally lodging a complaint through the CBA's internal dispute resolution scheme, if they cannot be resolved then it moves to an independant adjudicator. Again, costs nothing but wirth a try.
> 
> ...




I think I recall Slater & Gordon indicating that if PI insurance could be accessed by Storm clients, it would be too thinly spread among them to make any real difference to their situation.


----------



## Garpal Gumnut (20 March 2009)

Garpal Gumnut said:


> I must warn you all that SICAG.INFO when I last looked this arvo still had a prominent link to Manny's missive about the Cassimatis plan but no mention on ASIC's significant statements over the last two days.
> 
> Any of you Storm victims get advice as there is a lot of it about.
> 
> ...






swazee said:


> There is very concerning. Timely information is what SF clients need at this point. Unless SIAG have communicated directly via email. If SF clients have not been notified at all by now, I would be requesting my $50 back!!
> 
> The fact that Ron Jelich one of the biggest creditors and someone had a very good idea of how Manny and SF operates voted against the DOCA should be a good indication of which way to vote.




Yes mate, very worrying, I checked the sicag site and as of 11.21 today there is no mention of the ASIC decision.

Its a worry.

I'll let my mates know.

gg


----------



## chrisgee (21 March 2009)

Does anybody know for sure if the Cassmattises are still in the country?
Things are getting a bit hot now. Did they ever sell their jet?
I wish I'd never heard of Storm


----------



## swazee (21 March 2009)

chrisgee said:


> Does anybody know for sure if the Cassmattises are still in the country?
> Things are getting a bit hot now. Did they ever sell their jet?
> I wish I'd never heard of Storm




He jokingly reported to a client late last year (which ended up in the paper) that he and Jules were looking around for countries without any extradition treaties with Australia!!! Not sure if he sold the plane or not, perhaps it is fuelled up and ready for take-off, particulary now that there seems to be no doubt that the dividend was paid whilst knowingly insolvent along with a few other suspicous transactions.

As anyone had any dealings with an ex-Storm adviser and 'right hand man' of Manny, David Mcullock who has apparently just started up another financial planning business in Townsville?? 

Caveat emptor


----------



## maccka (21 March 2009)

Garpal Gumnut said:


> Yes mate, very worrying, I checked the sicag site and as of 11.21 today there is no mention of the ASIC decision.
> 
> gg




Hi GG,

Please don't worry.  SICAG has been very busy emailing every member with a range of information including ASIC and the parliamentary inquiry.

It may not be on the website yet (SICAG is a volunteer run group doing the best they can with an absolutely alarming avalanche of things to be done - not least the emotional support of its members) but communication (in the form of emails, updates and a discussion forum) is flowing very well through the network of ex-Storm clients who have contacted SICAG.  

They are also currently in the process of collating some very accurate figures from all members to be submitted as part of a submission to the parliamentary inquiry.  (I am not not an executive member who is privy to any of the data so there is no point asking me for it.)

I would encourage any ex-Storm clients to contact SICAG via their website  ASAP if they haven't already done.  The support that SICAG members are giving to each other is amazing and making a hugely positive difference for a group of people who are really doing it tough at the moment.  

Cheers.  

(PS - To those of you on the list who are thinking it - please don't use my last sentence as an opportunity to promulgate the "greed"/"own fault" message. By all means you will think it (no-one can stop you) but please don't say it *again*.  It really isn't necessary to :horse: )


----------



## Garpal Gumnut (22 March 2009)

maccka said:


> Hi GG,
> 
> Please don't worry.  SICAG has been very busy emailing every member with a range of information including ASIC and the parliamentary inquiry.
> 
> ...




Good to know maccka. 

Thanks for the info.

gg


----------



## Solly (23 March 2009)

*"Alarm bells sound for the imperfect Storm"*

"CORPORATE collapse is never a lot of fun to watch from up close but there's a new and alarming variant that's emerged in the case of Storm Financial."

"......the founders have been reportedly very successful in rounding up support from unhappy investor clients to take back control of the company via what is called a Deed of Company Arrangement (DOCA)."

More here in The Australian;

http://www.theaustralian.news.com.au/business/story/0,28124,25224916-30538,00.html


----------



## Solly (23 March 2009)

*"Storm Financial creditors set to pounce"*

"KordaMentha also expects to recover up to $10 million from the sale of Storm's client book.

The Storm administrator's report ,revealed that assets theoretically available totalled $80.52 million.

...the bank might not even be able to break even because of various accounting issues and other problems in the Storm books."

Full story by Anthony Marx in The Courier Mail is here.

http://www.news.com.au/couriermail/story/0,23739,25224569-3122,00.html


----------



## Julia (23 March 2009)

Maccka, what is SICAG recommending to its members re the DOCA?
(thanks for very interesting article from the Australian re this, Solly.)


----------



## Jifromoz (23 March 2009)

Hi Everyone,

I just noticed that all mention of Wilkinson Media has been removed from the www.cassimatis.com.au website......................I wonder why?


----------



## Garpal Gumnut (23 March 2009)

Julia said:


> Maccka, what is SICAG recommending to its members re the DOCA?
> (thanks for very interesting article from the Australian re this, Solly.)






Jifromoz said:


> Hi Everyone,
> 
> I just noticed that all mention of Wilkinson Media has been removed from the www.cassimatis.com.au website......................I wonder why?




Julia and Jifromoz,

There is still no link from the SICAG site to the recent ASIC document. 

It seems that only every financial commentator in the country, and every savvy poster on ASF are against these poor people being herded back into the hands of Cassimatis, 

This will be under a scheme of arrangement called a DOCA which will absolve Manny from any future litigation.

Poor, poor people.

gg


----------



## Jifromoz (23 March 2009)

Hi gg,

Have you heard anything about the Supreme Court action by ASIC to wind Storm up ?? I thought it was all going to happen today.


----------



## Garpal Gumnut (23 March 2009)

Jifromoz said:


> Hi gg,
> 
> Have you heard anything about the Supreme Court action by ASIC to wind Storm up ?? I thought it was all going to happen today.





No jif, nothing on the ASIC site today.

gg


----------



## Pindibog (23 March 2009)

Don't loose any sleep it is in their blogs and there are lots of non supporters!!



Garpal Gumnut said:


> Julia and Jifromoz,
> 
> There is still no link from the SICAG site to the recent ASIC document.
> 
> ...


----------



## Solly (23 March 2009)

Garpal Gumnut said:


> No jif, nothing on the ASIC site today.
> 
> gg





Guys & Gals

It's on tomorrow 24/3 at the Bris Federal Court at 10:15 am.
Hearing and Interlocutory Hearing
ASIC v STORM FINANCIAL LIMITED 
(RECEIVERS AND MANAGERS APPOINTED) 
(ADMINISTRATORS APPOINTED).


----------



## Jifromoz (24 March 2009)

Hi All,

Here is a link to the SMH website in regard to todays proceedings for ASIC v Storm. Evidiently Mrs Cassimatis today and maybe Mr C tomorrow. 

http://business.smh.com.au/business/storm-misled-creditors-court-told-20090324-98v4.html

Cheers

Jifromoz


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## Trevor_S (24 March 2009)

Jifromoz said:


> Hi All,
> 
> Here is a link to the SMH website in regard to todays proceedings for ASIC v Storm.




I find it highly unlikely that the Judge will usurp the wishes of the creditors and I suspect he will leave it to the creditors to make the decision, rather then him.

but ya never know


----------



## Solly (25 March 2009)

*"Storm 'misleading' clients with net post"*


"At Brisbane's Federal Court yesterday, Robert Newlinds SC, for Australian Securities and Investments Commission, argued the court should wind up the beleaguered financial planning firm before creditors had a chance to vote on a deed of company arrangement (DOCA)."

Mrs Cassimatis.."also confirmed the company had paid a PR company more than $74,000 on December 15 last year to combat a "vicious smear campaign" launched by the Commonwealth Bank."


More in The Australian by Sarah Elks and Sara Rich here;

http://www.theaustralian.news.com.au/business/story/0,28124,25237590-643,00.html


----------



## Solly (25 March 2009)

*"Julie Cassimatis stumbles when questioned over $2m payout"*


"EMBATTLED Storm Financial co-founder Julie Cassimatis blasted the Commonwealth Bank in court yesterday for bringing down her firm but stumbled when asked to justify a $2 million payment while debts were piling up."


Full story by Anthony Marx in The Courier Mail is here;

http://www.news.com.au/couriermail/story/0,27574,25238272-3102,00.html


----------



## Kez180 (25 March 2009)

I have just read through the DOCA, it basically states that anyone who participates agrees not to hold any agent of storm, storm itself and juile + manny cassimatis liable for more than their respective P&I insurances... It is ridiculous... 

I am ashamed to be studying as a financial planner, they have dragged the industry's reputation through the mud and now they have the nerve to try and get themselves out of trouble... SCUM

~Kieran


----------



## Solly (25 March 2009)

According to The Age, Justice Logan will decide on the wind-up order at 2pm Thur 26/3.....


----------



## Kez180 (25 March 2009)

Want to learn about hedging? I bet you $5 that the ASIC application to liquidate fails, that ought to cover a happy meal if they squash the DOCA.
~Kieran


I just Posted that to cassimatis.com.... I am a spiteful person I know...


----------



## Kez180 (25 March 2009)

BTW I am trying to get a copy of the 2007 prospectus from when Storm tried to go public... I haven't had any luck with ASIC... they refered me to storm.... I just asked the woman if she really thought that was going to work....

Anyway it is for a uni assignment regarding just how bad they have cocked up....

If anyone has a pdf copy I'd love to get a hold of it...

Cheers,

Kieran


----------



## bunyip (25 March 2009)

_
Q. 
Why should I or anyone trust you? - You admitted on T.V that people should not have trusted you. In a videolink in Dec you made promises to me that you must have known could not be fulfilled. My so-called advisor a former director ignored my many requests

A.
Brian
You should trust us because we are trustworthy. I did not admit on TV you should not trust us - 60 Minutes cut off my answer and accordingly portrayed a completely different meaning to my answer. The best way and cheapest way for you to handle your losses is to register a proof of debt and vote in favour of the DOCA we are proposing - it is, we believe, the most efficient way for us all to try and get compensation for our losses. _


How about the above question and answer from the Cassamatis website. 
Someone asks why they should trust him, and he replies_ "because we're trustworthy"!!!_

After all the mistakes and incompetence, he's still claiming to be trustworthy! This character has a thicker hide than an elphant!!


----------



## SJG1974 (26 March 2009)

bunyip said:


> _
> Q.
> Why should I or anyone trust you? - You admitted on T.V that people should not have trusted you. In a videolink in Dec you made promises to me that you must have known could not be fulfilled. My so-called advisor a former director ignored my many requests
> 
> ...



The guy has not taken one ounce of responsibility for the lives his advice has ruined.  Blames everyone but himself.  It would be an injustice if the DOCA gets up and he and Mrs C can't be sued for the actions they took.


----------



## SJG1974 (26 March 2009)

Kez180 said:


> BTW I am trying to get a copy of the 2007 prospectus from when Storm tried to go public... I haven't had any luck with ASIC... they refered me to storm.... I just asked the woman if she really thought that was going to work....
> 
> Anyway it is for a uni assignment regarding just how bad they have cocked up....
> 
> ...



I would love to get my hands on a copy too....would make very interesting reading.


----------



## Smiley (26 March 2009)

Storm is now wound up by the federal court or perhaps the better phraseology is wound down.  
There are some potent submissions already on the Senate inquiry website.


----------



## donteventryit (26 March 2009)

Smiley said:


> Storm is now wound up by the federal court or perhaps the better phraseology is wound down.
> There are some potent submissions already on the Senate inquiry website.




Absolutely no chance of a the DOCA going ahead now. 

Can't post the link due to my posts, but here is an article.  

Storm Financial wound up

Colin Kruger

March 26, 2009 - 3:31PM 

The securities watchdog has succeeded in its bid to wind up failed financial advisor, Storm Financial, with the Federal Court in Queensland announcing today that the company will be put into liquidation.

The decision means Storm creditors will not have the opportunity to vote on a deed of company arrangement proposed by Storm founders, Emmanuel and Julie Cassimatis, that would have handed them control of the company, and with that, rights to a number of legal actions.

This includes action began last year by Storm against business partner, Commonwealth Bank, as well as legal action against Commbank on behalf of former Storm clients.

The DOCA would also have let the founders off the hook for any potential legal action against them by former Storm clients.

In two days of hearings this week the Australian Securities and Investments Commission (ASIC) told the court that documents posted by the founders in support of the DOCA were "misleading' and deceptive'' and allow the couple to get off scot free.

The couple still face legal action by ASIC and Storm's receivers for a $2 million "dividend payment'' which has been frozen by court order.

While the Cassimatis' claim the payment was legitimate, it appears to have been illegally paid as the couple were the only remaining Storm directors when the payment was made - three directors are the statutory minimum.

And Storm's administrators have also said their investigations "strongly suggest" the company was insolvent on December 1 - more than two weeks before the payment was made - when an $11.2 million income tax liability was due but not paid.

In the creditors report, which was released earlier this week, the administrators recommended that creditors put the company into liquidation due to the fact that it is insolvent.


----------



## Judd (26 March 2009)

Sometimes we despair of decisions made by the justice system.  But it is the only system which separates us from anarchy irrespective of how we feel about the outcomes of court cases.

In this particular case, I have the view that the justice system has saved the naive from themselves despite removing their right to consider the proposed DOCA.  Consider it a begin dictatorship if you will.

Edit:  Spelling.


----------



## Solly (26 March 2009)

donteventryit said:


> Absolutely no chance of a the DOCA going ahead now.
> 
> Can't post the link due to my posts, but here is an article.
> 
> ...




E&J C were not at the court for the the decision.


----------



## -Bevo- (26 March 2009)

While the Cassimatis' claim the payment was legitimate, it appears to have been illegally paid as the couple were the only remaining Storm directors when the payment was made - three directors are the statutory minimum.

This is not true from what I read in a article Townsville Bully I think it was, Julie Cassimatis's sister was made a director just before the payment, plus on the day of the payment I'm sure it was also mentioned that they were told the company was insolvent the day the payment was made.
They can argue all they like but you can see through there lies, Storm might be finished but I bet it wont be last time we see ASIC and the Cassimatis's in the same court room :fu:


----------



## Mash (26 March 2009)

Actually the "dividend" was in fact passed by EC & JC on the 15th Dec then they realised their illegal act and appointed JC sister to the board on Dec 23 to "ratify" the decision... Just the sort of thing EC thinks he can do with little regard for the rules..... Sorry EC your ego finally brought you undone....and when you decide to ignore a tax bill (due 1 Dec)and then pay yourself a "dividend" you've bitten off more than you can chew...hope they choke!!
BTW how much would you guys pay for a copy of the prospectus.....I could use the cash...lol


----------



## Solly (26 March 2009)

*"Storm Financial planners in the red"*

"Twelve owners of financial planning businesses acquired by Storm Financial have lodged proof of debt claims......"

Ron Jelich is claiming $8 million, Trevor and Kathleen Benson owed $5 million. 
Gus and Antonella Dalle Cort are owed $2.25 million and $1.8 mil.....

Read the full story here by Lucinda Beaman from Money Management 

http://www.moneymanagement.com.au/article/Storm-Financial-planners-in-the-red/474639.aspx


----------



## Garpal Gumnut (26 March 2009)

It is to the credit of all ASF posters that continual pressure for the truth has been kept up on the Storm Financial debacle.

sicag.info , the Storm support , seem to have dropped the ball in relation to the facts as, in turn,  Judge Logan, most ASF posters and all, I repeat all financial commentators in the News Ltd. and Fairfax media have seen it. Even bloody Sixty Minutes saw through it, a bit like having Blind Freddie calling at roulette..

The SICAG had no direct links on their web page to the ASIC site, but did have a link to cassimatis.com.au for some days, possibly a week or more.

SICAG have links to picnics and self help activities. This is what got them in to Storm in the first place. This is about money. Not about bloody picnics. 

My mood is so angry because a good friend, not the brightest bulb on the Christmas tree has lost everything to this mob.

One excuse that SICAG have given is that they are amateurs, and volunteers. Billions of $ is no place for amateurs.

Storm victims should look to their legal options collectively or individually as they are advised by folk who know what they are about.

Following is a synopsis of a good summary of today's Federal Court proceedings.

_*"THE Federal Court has ordered the winding up of failed advisory firm Storm Financial.

A meeting had been scheduled for March 30 for creditors to vote on whether to liquidate the company or accept a deed of company arrangement proposed by Storm founders Emmanuel and Julie Cassimatis.

But Federal Court judge John Logan agreed to an Australian Securities and Investments Commission (ASIC) application to have the north Queensland-based firm wound up."*_

http://www.news.com.au/business/story/0,27753,25245742-462,00.html

This is the culmination of a very sick financial advisory service industry in Australia and nothing except a Royal Commission and criminal penalties for transgressors will make a hoot of difference to prevent it happening in the future.

There are more Storms out there.


gg


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## Solly (26 March 2009)

*Australian Securities and Investments Commission, in the matter of Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) v Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) [2009] FCA 269 (26 March 2009)*

Read the judgement here......

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2009/269.html


----------



## Garpal Gumnut (26 March 2009)

Garpal Gumnut said:


> It is to the credit of all ASF posters that continual pressure for the truth has been kept up on the Storm Financial debacle.
> 
> sicag.info , the Storm support , seem to have dropped the ball in relation to the facts as, in turn,  Judge Logan, most ASF posters and all, I repeat all financial commentators in the News Ltd. and Fairfax media have seen it. Even bloody Sixty Minutes saw through it, a bit like having Blind Freddie calling at roulette..
> 
> ...






Solly said:


> *Australian Securities and Investments Commission, in the matter of Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) v Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) [2009] FCA 269 (26 March 2009)*
> 
> Read the judgement here......
> 
> http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2009/269.html




Mate, thanks for that, its worse than I thought it was.

A Royal Commission will be needed.

gg


----------



## Mash (26 March 2009)

Garpal.... from someone who is the meat in the sandwich...I think you should give credit where credit is due.... ASF has for the most part has been a victim bashing forum... and now u want to take credit for the court action..oooh pleaase... SICAG is an amateur group ( meaning survivors choosing to take action for themselves and not be sidelined by both the "professionals" and outsiders )
While you may think the picnics and the sort are a waste of time, these get togethers are more about the mental and emotional stability of those affected but in the process we have been able to draw strength and encourage the legal and political fight from within. As usual this forum has no idea what the actual survivors ( I won't be called a victim anymore) are doing and what we need to be able to do to get to other side. We will finish strong and say what you want... we put as much faith in what you have to say as well as much as what EC had to say.. SFA...SICAG has been like a duck on a lake... calm on top little feet paddling like hell underneath... We are drawing strength from those who know the whole story and not the sideline ra ra boys and girls


----------



## Garpal Gumnut (26 March 2009)

Mash said:


> Garpal.... from someone who is the meat in the sandwich...I think you should give credit where credit is due.... ASF has for the most part has been a victim bashing forum... and now u want to take credit for the court action..oooh pleaase... SICAG is an amateur group ( meaning survivors choosing to take action for themselves and not be sidelined by both the "professionals" and outsiders )
> While you may think the picnics and the sort are a waste of time, these get togethers are more about the mental and emotional stability of those affected but in the process we have been able to draw strength and encourage the legal and political fight from within. As usual this forum has no idea what the actual survivors ( I won't be called a victim anymore) are doing and what we need to be able to do to get to other side. We will finish strong and say what you want... we put as much faith in what you have to say as well as much as what EC had to say.. SFA...SICAG has been like a duck on a lake... calm on top little feet paddling like hell underneath... We are drawing strength from those who know the whole story and not the sideline ra ra boys and girls




So can you explain why a direct prominent link to the Cassimatis DOCA was on your site and not one to ASIC's decision to take court action yesterday?

gg


----------



## Garpal Gumnut (26 March 2009)

Garpal Gumnut said:


> It is to the credit of all ASF posters that continual pressure for the truth has been kept up on the Storm Financial debacle.
> 
> sicag.info , the Storm support , seem to have dropped the ball in relation to the facts as, in turn,  Judge Logan, most ASF posters and all, I repeat all financial commentators in the News Ltd. and Fairfax media have seen it. Even bloody Sixty Minutes saw through it, a bit like having Blind Freddie calling at roulette..
> 
> ...






Mash said:


> Garpal.... from someone who is the meat in the sandwich...I think you should give credit where credit is due.... ASF has for the most part has been a victim bashing forum... and now u want to take credit for the court action..oooh pleaase... SICAG is an amateur group ( meaning survivors choosing to take action for themselves and not be sidelined by both the "professionals" and outsiders )
> While you may think the picnics and the sort are a waste of time, these get togethers are more about the mental and emotional stability of those affected but in the process we have been able to draw strength and encourage the legal and political fight from within. As usual this forum has no idea what the actual survivors ( I won't be called a victim anymore) are doing and what we need to be able to do to get to other side. We will finish strong and say what you want... we put as much faith in what you have to say as well as much as what EC had to say.. SFA...SICAG has been like a duck on a lake... calm on top little feet paddling like hell underneath... We are drawing strength from those who know the whole story and not the sideline ra ra boys and girls






Garpal Gumnut said:


> So can you explain why a direct prominent link to the Cassimatis DOCA was on your site and not one to ASIC's decision to take court action yesterday?
> 
> gg




And furthermore mate, there have been no updates to your "Press Releases" page since 1/3/09, nearly 4 weeks ago.

The entries seem to contain just bank bashing articles, but neer a mention of a flood of articles in the financial press re ASIC, Cassimatis, etc etc.

Your link

http://sicag.info/index_files/Page1246.htm

These punters need more than picnics, they need information, unbiased and independent.

gg


----------



## Mash (26 March 2009)

No Garpal I am not at liberty to explain the why and how of the SICAG website... and your paraphrase of "your" website has me unsure of the insinuation... your anger seems to be misdirected... why do you cast such aspertions on SICAG... I know the bankers don't like us... where are you coming from?
A very confused mash


----------



## Garpal Gumnut (26 March 2009)

Mash said:


> No Garpal I am not at liberty to explain the why and how of the SICAG website... and your paraphrase of "your" website has me unsure of the insinuation... your anger seems to be misdirected... why do you cast such aspertions on SICAG... I know the bankers don't like us... where are you coming from?
> A very confused mash




Mate, I'll bash a bank any day of the week, but if you bash everyone with a number 2  you may get king hit by a mullet. and thats where I believe you guys are at.

gg


----------



## Mash (26 March 2009)

hey Darl... don't call me mate.... can't make out what you're saying... you seem to speak with fork tongue...please explain your cryptic ramblings... too many ales this evening maybe ???


----------



## Garpal Gumnut (26 March 2009)

Mash said:


> hey Darl... don't call me mate.... can't make out what you're saying... you seem to speak with fork tongue...please explain your cryptic ramblings... too many ales this evening maybe ???




Sorry I assumed you were an Australian. pms or email me if you need a translation.

And if you are a female , I'm sorry for calling you , mate, darl.

gg


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## Mash (26 March 2009)

And you really think this kind of retoric is any help to any one...mcp... I'll leave you in your ivory tower and go back to the real world....  where the real survivors are helping each other and getting results ...ciao...


----------



## Garpal Gumnut (26 March 2009)

Mash said:


> And you really think this kind of retoric is any help to any one...mcp... I'll leave you in your ivory tower and go back to the real world....  where the real survivors are helping each other and getting results ...ciao...






Garpal Gumnut said:


> And furthermore mate, there have been no updates to your "Press Releases" page since 1/3/09, nearly 4 weeks ago.
> 
> The entries seem to contain just bank bashing articles, but neer a mention of a flood of articles in the financial press re ASIC, Cassimatis, etc etc.
> 
> ...




You took the conversation west, mate/darl.

Answer my question above.

gg


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## donteventryit (27 March 2009)

Mash said:


> And you really think this kind of retoric is any help to any one...mcp... I'll leave you in your ivory tower and go back to the real world....  where the real survivors are helping each other and getting results ...ciao...




Mash, I believe that GG (and tell me if I'm wrong), is questioning the motive of SICAG, in regards to what information is being distriubuted to its members and its affiliations. 

SICAG openly states that they are pursuing the "banks" .... however they are not pursuing any other avenues. 

You have to admit that it is definitely suspect that SICAG would post a link to the cassimatis wesbite (who coincidentally would like to take CBA to court and needed the DOCA to go ahead to be able to do so), and not provide other information such as the numerous articles in money management, smh, the australian etc etc regarding the questionable management of company affairs by Storm over the December period. 

I beleive that GG would like to see Storm get its comeuppance and the full brunt of the law in regards to everything that has occured. By accepting the DOCA this would not have happened due to the clauses involved. 

There would seem to be very questionable links between SICAG and the interests of EC & JC, despite whatever it says on the website. 

Tell me Mash, would you have agreed to the DOCA?


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## Solly (27 March 2009)

Is there a doctor in the house....??

Just had a look at  www.cassimatis.com.au it says that the site is temporarily unavailable while it's being updated...and says "We thank you for your patients".

LOL is Wilkinson Media still looking after this site?


----------



## maccka (27 March 2009)

Julia said:


> Maccka, what is SICAG recommending to its members re the DOCA?
> (thanks for very interesting article from the Australian re this, Solly.)




Hi Julia and GG,

Sorry for late-ish reply.  Haven't been here for a while.  I see a lot has happened though.

Julia - SICAG hasn't been making any recommendations to people regarding the DOCA.  In fact they have pretty much sent out a consistent message through emails and the discussion forum that they want people to try to make sure that they have all of the relevant records (statements, advices, emails, letters, records and diary entries of conversations) together and use these to get advice regarding a range of situations (pensions, financial planning, ASIC, FOS, banks, politicians etc etc).

GG - Although there are some (outside SICAG) who believe that they are pro-Cassimatis, the group is actually trying very hard not to be either supportive or disdainful of them.

As for the members of SICAG - they tend to be fairly clearly polarised as either for or against Cassimatis with a few caught in between who don't know who to believe regarding the "Cassimatis" factor.

Personally, I don't remember the reference to the DOCA that GG talks about but it must have been there as SICAG.info now has a comment on the home page saying that the link has been removed.  All I can imagine is that in an effort to get any information out to people the link was added.  There is also a link to ASIC on the website and the work of ASIC has been in the numerous updates sent out to the approximately 1400 SICAG members via email and the discussion group.

As for the news links not being updated on the website for some time.  I really would ask people to remember that not everyone spends hours every day on their computer.   The news links are updated in other places that SICAG members access regularly. The SICAG website volunteer has had to come out of retirement to go back to work in a very full-on new job.  There are only so many hours in a day.  Surely you understand that the effort has to go into the area of highest priority at the time.

The social events are a critically important aspect of the SICAG work.  They are saving lives and connecting people together with similar situations and helping them realise that they don't have to be alone at such a horrible time.  They also serve as opportunities for people to be updated on the latest news.

Some people obviously are not seeing SICAG's successes (which are considerable and made even more so due to the volunteer nature of the group).  Only 36 days after the meeting in Redcliffe a Joint Parliamentary Inquiry into the vents surrounding Storm, Opes Prime and the Financial Services Industry was announced.  Only days ago the terms of reference were extended to look at the role of banks and margin lending.  That is a huge positive to come out of such a terrible situation.  From the inquiry, some truths can come out and that's what people want - TRUTH (whether it is for or against banks/Cassimatis/Storm/investors etc).

It is interesting to see some of the submissions coming into the parliamentary inquiry.  As least one of them does not relate to Storm and so it would offer support to the argument that bad advice is not just offered by financial planners.

If the Inquiry leads to changes in law so that the tragedies linked to financial and banking products and advice cannot happen again so easily then that is a GOOD thing.

Cheers
Maccka


----------



## Solly (27 March 2009)

*"Storm collapse 'amongst the biggest in Aust corporate history"*

ABC story here:

www.abc.net.au/news/stories/2009/03/27/2527855.htm


----------



## Garpal Gumnut (27 March 2009)

Solly said:


> Is there a doctor in the house....??
> 
> Just had a look at  www.cassimatis.com.au it says that the site is temporarily unavailable while it's being updated...and says "We thank you for your patients".
> 
> LOL is Wilkinson Media still looking after this site?




Somebody should tell Manny his clients were not patients, but some probably are now.!

gg


----------



## Solly (27 March 2009)

Solly said:


> Is there a doctor in the house....??
> 
> Just had a look at  www.cassimatis.com.au it says that the site is temporarily unavailable while it's being updated...and says "We thank you for your patients".
> 
> LOL is Wilkinson Media still looking after this site?




The error is all fixed now.... Sometimes it not that bad to have a bit of a chuckle in the midst of things being so serious....


----------



## swazee (27 March 2009)

Solly said:


> The error is all fixed now.... Sometimes it not that bad to have a bit of a chuckle in the midst of things being so serious....




 Latest News

Our website will be temporarily unavailable while we refuel and taxi to runway 19. Please check back in a few days.

We thank you for your patience and if you are wondering how I am feeling after the court decision..well, I've never been better.https://www.aussiestockforums.com/forums/images/icons/icon6.gif


----------



## -Bevo- (27 March 2009)

swazee said:


> Latest News
> 
> Our website will be temporarily unavailable while we refuel and taxi to runway 19. Please check back in a few days.
> 
> We thank you for your patience and if you are wondering how I am feeling after the court decision..well, I've never been better.https://www.aussiestockforums.com/forums/images/icons/icon6.gif




LOL yeah Beechcraft jet last seen heading towards Spanish island of Majorca.


----------



## Glen48 (27 March 2009)

If they banned Jails the crime rate would go up and like Storm they were lucky they could act this way with out any one looking over their shoulders, the whole scam was living on borrowed time but the regulators let them breathe a long longer and hence collect more victims...sadly nothing will change and after  the next one we ask the same questions.


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## Solly (27 March 2009)

-Bevo- said:


> LOL yeah Beechcraft jet last seen heading towards Spanish island of Majorca.




For some reason I have a strange feeling that the flaps may not be fully extended and it may just lead to a runway overrun on the take off roll...... Is there a shadowy character with a cheesy grin sitting in the left hand seat, with the initials 'gg' embroided on the epaulettes..? :


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## Solly (28 March 2009)

*"Storm Financial software hitch"*

"THE directors of failed Storm Financial, Emmanuel and Julie Cassimatis, are refusing to turn over key software to Storm that would allow investigators to access client files."

"....Australian Securities and Investments Commission has taken legal action to force Ignite to provide the software."

Full story by Anthony Marx in The Courier Mail is here;

http://www.news.com.au/couriermail/story/0,23739,25253842-3122,00.html


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## chrisgee (28 March 2009)

Glen48 said:


> If they banned Jails the crime rate would go up and like Storm they were lucky they could act this way with out any one looking over their shoulders, the whole scam was living on borrowed time but the regulators let them breathe a long longer and hence collect more victims...sadly nothing will change and after  the next one we ask the same questions.




What I can't believe is why it could have been allowed to get to this stage.
How can it have got to this, ASCIC, Lawyers, the Cassimattises blaming banks, banks not commenting, people ducking and weaving all over the place.
They said you could never loose your house, everyone will be ok...now that's all bullshait. How in freaking gawd's name could this have happened. My grandfather fought in the south pacific so we could all be free and have a better life. Looks like there are enemies within all around. Never trust anybody who claims to giveing away secrets to money and wealth, they arr all just scammers. Some of us may not be the smartest or best educated people in the country but jees we trusted people, the systems, government and regulaters etc. Who can fix this now. Come on tell me who is there?


----------



## Macquack (28 March 2009)

Solly said:


> *"Storm Financial software hitch"*
> 
> "THE directors of failed Storm Financial, Emmanuel and Julie Cassimatis, are refusing to turn over key software to Storm that would allow investigators to access client files."
> 
> ...






> Storm stored much of its data electronically, providing a limited physical paper trail for investigators.




This is ridiculous. It is like a paper mill refusing to supply the paper necessary to print critical documents to be put before a court.


----------



## bunyip (28 March 2009)

While ASIC are waiting to get their hands on the software that will allow them to access client files, guess who still has the software and can access the files with it.
You'd have to wonder at whether those files are going to be altered by the time ASIC get to see them. 
Or whether the software itself is still going to work. Maybe it'll develop a sudden mysterious glitch that makes it malfunction!

All this ducking and weaving pretty much confirms that there's been some dodgy dealings somewhere along the line.


----------



## bunyip (28 March 2009)

chrisgee said:


> What I can't believe is why it could have been allowed to get to this stage.
> How can it have got to this, ASCIC, Lawyers, the Cassimattises blaming banks, banks not commenting, people ducking and weaving all over the place.
> They said you could never loose your house, everyone will be ok...now that's all bullshait. How in freaking gawd's name could this have happened. My grandfather fought in the south pacific so we could all be free and have a better life. Looks like there are enemies within all around. Never trust anybody who claims to giveing away secrets to money and wealth, they arr all just scammers. Some of us may not be the smartest or best educated people in the country but jees we trusted people, the systems, government and regulaters etc. Who can fix this now. Come on tell me who is there?




Unfortunately Chris, the sad truth is that nobody can fix it. What's done is done. Storm clients may at best get some small compensation, but the sad truth is that their money is gone and the bulk of it is likely to stay gone.


----------



## Solly (28 March 2009)

*" Storm has `failed spectacularly' " *

Story in the Townsville Bulletin is here 


http://www.townsvillebulletin.com.au/article/2009/03/28/46941_hpnews.html


The paragraph I find interesting is........

"The total obligation which Storm had to the CBA at the closure of Storm's business was $27,094,574.

The directors of Storm dispute that any amount is due to the CBA in respect to the margin loan and allege that the CBA failed to execute instructions of Storm, given in writing on 26 October 2008, to redeem the underlying securities in Storm's margin loan from the CBA. They say that had it done so the securities would have been realised (and) the difference to Storm's account with CBA would have been approximately $3 million in favour of Storm."

More comments are available in the article.


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## Solly (29 March 2009)

*"Slim chance of restitution for Storm Financial investors"*

"The Storm Investors Consumer Action Group says it is unlikely that former clients of the failed investment planning company will get their money back."

ABC story here;
http://www.abc.net.au/news/stories/2009/03/26/2527415.htm


Does this mean SICAG has thrown in the towel regarding chasing some type of compensation or remedy?


----------



## Judd (29 March 2009)

Solly said:


> *" Storm has `failed spectacularly' " *
> 
> Story in the Townsville Bulletin is here
> 
> ...




What I find equally interesting is that no documentation was presented to the Court justifying the claim that Storm account would have been in the black to the tune of $3m.

Throughout the saga, seems to be these strange claims along the lines of "CBA only gave us 6 minutes to repay the loan" but nothing presented in writing to justify the allegations.  Hyperbole, confabulation and obfuscation on the part of some?


----------



## Mash (29 March 2009)

Solly
I believe what SICAG is saying is there is not much chance of getting much out of storm but there is still plenty of fights to be fought and other avenues to explore... the fight is not over yet...and let's just say the banks are still ducking and weaving trying to rid themselves of the stench of their involvement in the whole nasty setup..... just one more step in the right direction in having the doca put to rest...thank god.


----------



## Judd (30 March 2009)

Mash said:


> Solly
> I believe what SICAG is saying is there is not much chance of getting much out of storm but there is still plenty of fights to be fought and other avenues to explore... the fight is not over yet...and let's just say the banks are still ducking and weaving trying to rid themselves of the stench of their involvement in the whole nasty setup..... just one more step in the right direction in having the doca put to rest...thank god.




So in simple terms, those affected are still lashing about looking for someone else to blame for their very sad situation.

Putting aside those cases which maybe due to rather tawdry processes, ie signed blank documents allowing others to fill them in, I am curious as to the other cases, apparently the majority, who:


on the advice of Storm, refinanced their (paid off) home;

then plonked that down as security as a margin loan using CGI, which is a platform for wholesale: and, essentially

gave Power of Attorney to Storm to manage their investments, such as they were

Yet claim that the bank(s) were at fault because they, allegedly, abided by the terms and conditions of the mortgage and/or margin loan?

Don't claim that the banks, be it CBA, BOQ, "should have known."  Remortgaging a home is a separate and distinct act which requires evidence of income, expenditure, assets and liabilities.

Obtaining a margin loan requires none of this, as had been said many, many times in this thread.  All that is required is that you put up the cash and/or shares as security and you can gear to your heart's content.

The Privacy Act prevents CBA. BOQ or any other bank passing on the remortgaging details to margin lenders and the same act applies to the margin lender.

So if all were under commercial conditions, where is one or any other bank at fault?

Phooey on emotion because some took a degree of risk and lost.  That happens in every economic cycle.  Storm clients got caught out it seems.

It is very, very sad that a number are in that situation. I can appreciate the emotion (****e, having done it, it bloody hurts to lose a few hundred thousand or more) and puts enormous stress on the people involved.  But just to blame the "banks" for the situation?  Get off the grass.


----------



## Glen48 (30 March 2009)

Rumour has here in Recliffe a local celb. sunk $12 M into Storm and attempted suicide after finding out the bad news.???


----------



## pilots (30 March 2009)

So he had 12Mil to play with, with that kind of money ANYONE could retire and have a good time, he was the classic case of GREED. I bet he allso is blaming the banks for his down fall..


----------



## darkside (30 March 2009)

So he had 12Mil to play with, with that kind of money ANYONE could retire and have a good time, he was the classic case of GREED. I bet he allso is blaming the banks for his down fall..



SHE DID


----------



## pilots (30 March 2009)

So, 6% of 12Mil,  some one made good money.


----------



## Judd (30 March 2009)

Glen48 said:


> Rumour has here in Recliffe a local celb. sunk $12 M into Storm and attempted suicide after finding out the bad news.???




Yes that can happen.  It's sad but in the context of things no sadder than a 33 year old lady who suffered from Multiple Sclerosis and took her life rather than face the slow degenerative effects.  She looked rather peaceful when we found her after entering her flat (door was unlocked and we went in after knocking) after she did not show up at work for a few days.


----------



## darkside (30 March 2009)

Judd said:


> Yes that can happen.  It's sad but in the context of things no sadder than a 33 year old lady who suffered from Multiple Sclerosis and took her life rather than face the slow degenerative effects.  She looked rather peaceful when we found her after entering her flat (door was unlocked and we went in after knocking) after she did not show up at work for a few days.




Yes i see how that ties in with this thread.. WTF?????


----------



## Trevor_S (30 March 2009)

chrisgee said:


> Who can fix this now. Come on tell me who is there?




Look in the mirror, and behold the answer to your question.


----------



## Solly (30 March 2009)

Glen48 said:


> Rumour has here in Recliffe a local celb. sunk $12 M into Storm and attempted suicide after finding out the bad news.???




Glen, has the Seabrae been knocked down yet ?


----------



## Solly (30 March 2009)

*"Administrators for Storm Financial Put Historic Geelong Property on the Market"*


"A HISTORIC Geelong property owned by the failed Storm Financial Group, has been quietly put to the market for sale by administrators."

"Storm is reported to have purchased Sladen House for about $2.5 million in July 2007"

Story by Marc Pallisco in Real Estate Source is here;

http://www.realestatesource.com.au/Victoria/Administrators-for-Storm-Financial-Put-Historic-Geelong-Property-on-the-Market.html


----------



## Glen48 (30 March 2009)

Solly haven't been down that way for awhile but I heard it had been ..makes you wonder about people and their money knocking that down to build a high rise and it will most likely be a tribute to the depression. She could open another Fish Bowl and get some money back.


----------



## Solly (31 March 2009)

* "ASIC turns on Storm Financial software provider"*

ASIC takes action in the Brisbane Federal Court today.

See Money Management article here.

http://www.moneymanagement.com.au/article/ASIC-turns-on-Storm-Financial-software-provider/475154.asp


----------



## Solly (31 March 2009)

Glen48 said:


> Solly haven't been down that way for awhile but I heard it had been ..makes you wonder about people and their money knocking that down to build a high rise and it will most likely be a tribute to the depression. She could open another Fish Bowl and get some money back.




Gee I never got to visit the Fishbowl but had a friend go there when it was open they said it looked like it was decorated out of a dumpster. I suppose everybody has different tastes. I wonder what the net effect of the Storm collapse willl have on the peninsula ?


----------



## carey ramm (1 April 2009)

australian financial review will be interesting tomorrow


----------



## nigel foxwell (1 April 2009)

A big write-up expected?


----------



## Glen48 (1 April 2009)

Solly
Drove past the site today it has temporary permanent fencing around it. 
Suppose to be high rise units going up but that was BGFC.


----------



## Solly (1 April 2009)

Glen48 said:


> Solly
> Drove past the site today it has temporary permanent fencing around it.
> Suppose to be high rise units going up but that was BGFC.




Thanks Glen, I must take a detour on my next layover in the Blackall Ranges..


----------



## Solly (1 April 2009)

*Australian Securities and Investments Commission, in the matter of Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) v Storm Financial Limited (Receivers and Managers Appointed)(Administrators Appointed) (No 2) [2009] FCA 298 (1 April 2009) *


See what the court orders and the reasons for the judgment 
by Justice Logan in this matter;

http://www.austlii.edu.au/au/cases/cth/federal_ct/2009/298.html


----------



## Solly (1 April 2009)

carey ramm said:


> australian financial review will be interesting tomorrow




I hope it's an article by Duncan Hughes...


----------



## Garpal Gumnut (1 April 2009)

Solly said:


> *Australian Securities and Investments Commission, in the matter of Storm Financial Limited (Receivers and Managers Appointed) (Administrators Appointed) v Storm Financial Limited (Receivers and Managers Appointed)(Administrators Appointed) (No 2) [2009] FCA 298 (1 April 2009) *
> 
> 
> See what the court orders and the reasons for the judgment
> ...




I have just finished a nice few mudcrabs and some cleanskins with a barrister mate of mine and we read this judgement. 

It is not looking good for ........

gg


----------



## GumbyLearner (2 April 2009)

Garpal Gumnut said:


> I have just finished a nice few mudcrabs and some cleanskins with a barrister mate of mine and we read this judgement.
> 
> It is not looking good for ........
> 
> gg




Don't waste your money fighting these assholes! JMHO!


----------



## carey ramm (2 April 2009)

the afr article.....

http://www.afr.com/home/viewer.aspx...rvices&title=Banks+caught+in+eye+of+the+Storm


----------



## bunyip (2 April 2009)

Carey - thanks for the very interesting article from the AFR.

There are some sad, sad stories among ex Strom clients. I feel very sorry for some of them. 
But I feel no sympathy for the likes of like Ron Jelich. 
As Storm's national development manager, Jelich must have been well aware of the unscrupulous, incompetent and highly risky practices that were being perpetrated on unsuspecting investors. 
Now that the whole show has come crashing down, he's very vocal in criticising the very same practices that he himself would have promoted in his role as Storm's national development manager. It's difficult to feel sympathy for someone who practises that level of hypocrisy.


----------



## carey ramm (2 April 2009)

Bunyip

I totally agree with u - i have no sympathy for storm advisors. However some of them have seen the error of their ways and are now trying to help the storm victims - given the task at hand it all helps.

I should also say that many of those Storm Victims with negative equity on the margin loans have been settling those debts for vastly reduced sums even up to 3c in the $. So if u have negative equity still outstanding hold firm (get help if u dont know what u are doing).

There have been a number of home loans with irregularities that have been wiped or are being wiped clean also by the banks. CBA are also offering their lifetime tenancy agreement for some as well. Again please consider your options carefully before accepting any of these as they all contain terms that let the banks off the hook for future legal action. BOQ are in denial.

I should also point out to the many Storm victims that read this forum that if they are seeing CBA financial planners to sort out this mess it is strongly advisable they get a second opinion to make sure they are getting the most appropriate advice. I find it amazing that some people have been doing this but hey it is their decision. At least this time be fully informed on what they are doing.

There are still a lot of people yet to get their loan documents or register with Slater and Gordon. The lawyers are pushing ahead quickly so please dont delay if u wish to pursue this.

Also there have been a lot of good comments made on this thread about the financial services industry - i hope that the contributors take a few minutes and submit them to the parliamentary enquiry - i get the feeling that the time for change is nigh!!!!


----------



## Smiley (2 April 2009)

Carey, I have not heard of margin loan reductions - which financial institutions have done this?  It would help so many even if break fees were reduced. Great article in Financial Review.


----------



## -Bevo- (2 April 2009)

Thanks for the AFR link Carey, must admit the more you read into Storm the more it stinks, there's a number of exaggerated incomes I have read about now. Cassimatis website is still unavailable, I guess EC is busy again researching country's with no extradition laws with Australia or he might be busy in his crusade to find justice for all affected storm clients.


----------



## Smiley (2 April 2009)

I've heard EC is busy researching countries where he can buy land.  There's no for sale sign on that house in Brisbane as he claimed and have it on good authority that there is not even a mortgage on it . . . 
Some heart wrenching stories reading Senate Submissions . . . 
Time to move on but not forget and time for changes to the way financial instituions are regulated. . . .


----------



## Solly (2 April 2009)

jelicjones said:


> Re Storm and them  being  the guru educators....didn't they build their magic software called Phormula to track their clients portfolios [and to quickly identify who to call re another 'step' investment]and charge Storm clients for this service.A simple question .....who was watching Phormula when the portfolios went into a sustained fall...didn't alarm bells start ringing all over the offices of Storm???? Great article in Fin Review and more to come on Friday.




I find this interesting as well;

I have sighted a copy of the 2007 prospectus where it stated, in respect to "Phormula";

In Section 4.3.2.....

"Storm is able to actively manage a client’s portfolio
through a purpose-built software platform called Phormula"

"Storm is able to actively manage its clients’ portfolios by
using a purpose-built software system called Phormula, which
enables Storm to efficiently assess and monitor each client’s
borrowing and investing capacity"

"Phormula identifies clients with Step Investment opportunities
and automatically generates Statements of Additional Advice
(“SoAAs”), which are sent to clients to be authorised"

In Section 4.7......

"Ignite licenses Phormula to Storm and provides ongoing
software updates and maintenance. Phormula has been
tailored to Storm’s requirements and provides Storm’s
advisers with analytical and research tools for managing
clients’ portfolios. It also facilitates an efficient financial
advice process between Storm’s advisers and the centralised
risk management and back office functions"


----------



## Solly (3 April 2009)

*"Court blocks ASIC exhibits in Storm case"*

"A court has ordered a bundle of Storm Financial investor responses compiled by ASIC to be withheld from the public."

Story by Kate Kachor in Investor Daily is here;

http://www.investordaily.com.au/6159.htm

Also here's Justice Logan's judgement;
http://www.austlii.edu.au/au/cases/cth/federal_ct/2009/298.html


----------



## nigel foxwell (3 April 2009)

I think the lights must burn late in the ASIC offices.. between BrisConnections, SF and everything else that is happening, they must be burning through their budget, will they hit a wall?


----------



## Solly (3 April 2009)

* ASIC tight-lipped on Storm Financial money trail investigation*


ASIC has refused to confirm reports it is investigating an international money trail connected to Storm

More here on the ABC 
site;

http://www.abc.net.au/news/stories/2009/04/03/2534627.htm


----------



## Garpal Gumnut (3 April 2009)

The story on Storm is getting curiouser and curiouser

I've been driving a truck down from the Isa today and now home, have just read the AFR article on Manny and the above posts, and an alleged connection with overseas transfer of monies.

I have long been a fan of South Pacific a beautiful work made better by Tiri Te Kanawa and as I came in to Townsville just happened to have Bali Hai playing at full blast as a Prius happened to attempt a green and red hari kari in front of me at a roundabout.

The prius survived godbless its green heart.

This story will go for Manny years.

gg


----------



## Solly (4 April 2009)

*"Liquidator Has No Evidence of Storm Funds Transfer"*

"The Australian Financial Review on Friday reported that the corporate watchdog was investigating whether Storm founder Emmanuel Cassimatis sent more than $10 million offshore, possibly to Bali." 

Article posted on istockanalyst.com is here;

http://www.istockanalyst.com/article/viewiStockNews/articleid/3173704


----------



## Glen48 (4 April 2009)

EC & J are a devoted family and had no where safe to invest their money and knew SF were dodgy so why not send you hard earned loot O/S.
He is only looking after his Family like any good Hard worker would knowing the Fed's were on the case they knew they had time on their hands the only concern could be G20 style crack down on tax havens.


----------



## chrisgee (4 April 2009)

Glen48 said:


> EC & J are a devoted family and had no where safe to invest their money and knew SF were dodgy so why not send you hard earned loot O/S.
> He is only looking after his Family like any good Hard worker would knowing the Fed's were on the case they knew they had time on their hands the only concern could be G20 style crack down on tax havens.




I hope that this is not true about sending money overseas etc, i thought that he was getting justice for all and not resting until everything is fixxed up. yesterdaty i was also with some other storm victims and i'll tell you what they are damn angry about how this is going. it may be ok to say go look in the mirror and look who stuffed up, but this mob where backed by the cba, collonial, did courses for universities, had all the plaques on the wall, asicc did find anything wromg with them , had a member on their board who was in the fpa.

who does the ordinary bloke trust?? I don't want sympathy or a hand out i want somebody to be accountable for what has happened. 
There's some damn angry people out here, that wants somethimg done
i suppose itss over now to the courts to get this mess sorted. if there's a hint of criminal wrong doing by anybody involved its into the slammer they go.


----------



## Julia (4 April 2009)

chrisgee said:


> I hope that this is not true about sending money overseas etc, i thought that he was getting justice for all and not resting until everything is fixxed up. yesterdaty i was also with some other storm victims and i'll tell you what they are damn angry about how this is going. it may be ok to say go look in the mirror and look who stuffed up, but this mob where backed by the cba, collonial, did courses for universities, had all the plaques on the wall, asicc did find anything wromg with them , had a member on their board who was in the fpa.
> 
> who does the ordinary bloke trust?? I don't want sympathy or a hand out i want somebody to be accountable for what has happened.
> There's some damn angry people out here, that wants somethimg done
> i suppose itss over now to the courts to get this mess sorted. if there's a hint of criminal wrong doing by anybody involved its into the slammer they go.



"if there's a hint of criminal wrong doing by anybody involved it's into the slammer they go":   Has some lawyer assured you of that?   I might be entirely wrong but I'll be surprised if anyone goes to jail.  There have been plenty of previous examples where so called professional advisers in various capacities have given bad advice, causing clients to lose everything, and they haven't even been stopped from practising!

Can you say what you mean when you say that Storm were "backed by the CBA"?

Thanks.


----------



## Trevor_S (4 April 2009)

chrisgee said:


> i thought that he was getting justice for all and not resting until everything is fixxed up.




Oh come on.... people still can't believe that sort of hyperbole can they ? The guy was a snake oil salesmen, he isn't the first and won't be the last.  No amount of huffing from the apparatchik of the body politic will stop trusting people being charmed out of their money.



chrisgee said:


> who does the ordinary bloke trust??




Regardless of what you want to hear, there is only one answer to that question, the person in the mirror... I too am an "ordinary bloke" and started reading everything I could (and still do) in the late '80s for that very reason.  I still go to the library to read the AFR being too tight to buy it  

Just look at how simplistic the Storm model was, high leveraging into an Index fund and gouge the end user with fees.  You had to know that flash building and lifestyle came directly from the fees earned, no advanced degree in Investment needed to follow or understand that strategy.  If you want to invest similarly, save and dollar cost average into an listed Index fund, reinvest the dividends and then when you retire, take the dividends as an income stream, boring staid but fairly safe.  You don't have to use synthetics like CFD's, options etc stay well away from them until you understand them intrinsically.  

I use something similar, except I stop buying when the market appears overvalued and then start buying again when I think decent value returns.  I spend the down time trying to identify companies with excellent earnings potential that will survive idiot managers, this takes much more effort though   I have been doing this for decades and earn more in dividends then most people earn as a wage, this is rolled into savings which I accumulate and is then used to purchase more shares when I see value again (like now).  I will leave trading to those with more acumen then I.


----------



## Glen48 (4 April 2009)

One only has to look at the G20 decision to allow banks to alter their accounting methods which will allow them to look more stable than they are and the market will boom again when commonsense goes out the window we can see what we are up against. While we have Add Sick et al looking after us and we are trusting them nothing will change maybe once this depression hits and a lot more loose their life style questions will be asked and decent laws introduced. maybe...


----------



## Solly (5 April 2009)

*"Storm Financial fallout – show us the money"*

"CORPORATE regulators and lawyers – and, no doubt, Storm Financial clients – want to know where Emmanuel and Julie Cassimatis have stashed their cash."

Story by Tony Raggat in the Townsville Bulletin is here;


http://www.townsvillebulletin.com.au/article/2009/04/04/47865_hpnews.html


----------



## Solly (6 April 2009)

*"Criminal activity likely in Storm case"*

Bernie Ripoll has told former clients that it appears likely that there has been criminal activity in the company's collapse.

See more here on the ABC Site;

http://www.abc.net.au/news/stories/2009/04/06/2536128.htm


----------



## Mash (6 April 2009)

*Criminal activity*

http://au.biz.yahoo.com/090406/31/25ll3.html
The rats will be starting to jump ship... btw....did I hear that Ed Tait has resigned from CBA..hmmmmm.....splash!    :evilburn:


----------



## Solly (8 April 2009)

*"Storm client book shortlist revealed"*

"10 firms in the running 
Financial services groups have been shortlisted as bidders for Storm Financial's book of clients."

Story by By Kate Kachor in Investor Daily is here;

http://www.investordaily.com/cps/rde/xchg/id/style/6192.htm


----------



## Solly (8 April 2009)

*"Judge extends Storm Financial $2m freeze"*

Freeze extended until May.

See more here at the ABC site;

http://www.abc.net.au/news/stories/2009/04/08/2538080.htm


----------



## SJG1974 (9 April 2009)

Anyone know what Manny and Julie are doing at the moment?  Haven't heard anything about them.  The website is still "temporarily" closed for updating.  I wonder where their "crusade for justice" has taken them now???


----------



## Garpal Gumnut (9 April 2009)

SJG1974 said:


> Anyone know what Manny and Julie are doing at the moment?  Haven't heard anything about them.  The website is still "temporarily" closed for updating.  I wonder where their "crusade for justice" has taken them now???




Manny where are you?

The Eskimos need Ice.

You are the Man.

None of this "We will be back shortly stuff" on the cassimatis.com.au site

The Storm clients need your Brains.

gg


----------



## Trevor_S (9 April 2009)

Glen48 said:


> One only has to look at the G20 decision to allow banks to alter their accounting methods which will allow them to look more stable




Mark-to-Market never made a whole lot of sense in the first place IMO, even Buffett argued this some time before this hullabuloo.. one could argue it's simply fixing a screw up they made when it was introduced.


----------



## Garpal Gumnut (9 April 2009)

Garpal Gumnut said:


> Manny where are you?
> 
> The Eskimos need Ice.
> 
> ...






Trevor_S said:


> Mark-to-Market never made a whole lot of sense in the first place IMO, even Buffett argued this some time before this hullabuloo.. one could argue it's simply fixing a screw up they made when it was introduced.




Tell that to Manny , Trev.

We need Manny to make a statement.

I know you read these posts Manny.

Give us your advice.

gg


----------



## Solly (10 April 2009)

Garpal Gumnut said:


> Tell that to Manny , Trev.
> 
> We need Manny to make a statement.
> 
> ...





gg, yesterday I was with an ex Storm client and he asked the same question of how come EC seems to have gone underground. I must admit this ex client was very hot under the collar about how he ended up in the predicament he's now in. He comes from a building industry background, straight down the line sort of guy and realises he made a bad choice following the Storm model.
His doctor wants to put him and his misses on some pills to settle them down.
But he decided to hit the "Jack" a bit instead, he says it give him more clarity.

He eagerly wants to hear from EC and also asked about how he was progressing "getting justice for all". He's wondering when EC's website will be back as well.

He's now almost broke, he and his wife are working there ar_ses off just to keep their home and feed themselves. He also said how they were told it was impossible for anyone to lose their home as the Storm system would never allow this to happen. He asked about why the Phormula program that he thought was supposed to monitor and protect the clients portfolios could fail and not pick up the trend down in the market and give appropriate advice and actions to save everyone. He also had a bucket of money he was going to invest in the Storm float but thankfully that never went ahead. He also said that his ex adviser is also broke, that's a good endorsement, isn't it.
All he dreams about is to have his house back from the clutches of the bank, have money in the bank and be able to retire comfortably. All the things Storm said he could have. 


So gg, if EC does read these forums maybe he could sign up and answer a few questions while his site is down, I'm sure many, many people would love to hear from him. Especially one disappointed "brickie" wearing "Jack aftershave" and his medicated misses who have a page full of questions to ask.


----------



## chrisgee (11 April 2009)

Julia said:


> "if there's a hint of criminal wrong doing by anybody involved it's into the slammer they go":   Has some lawyer assured you of that?   I might be entirely wrong but I'll be surprised if anyone goes to jail.  There have been plenty of previous examples where so called professional advisers in various capacities have given bad advice, causing clients to lose everything, and they haven't even been stopped from practising!
> 
> Can you say what you mean when you say that Storm were "backed by the CBA"?
> 
> Thanks.




Julia I mean that cba were endorsing the loans, colonial had cobranded funds, you can't tell me that cba didn't have some idea of what was going on. It's all starting to stink a bit to me. I hope the enquiry finds what is going on, thanks to Bernie Rippol something at least is being done. Now Bernie thinks that there maybe some criminal activity,well time will tell. It's not a good easter for us at the momnet, it wasn't meant to be like this, what have we  done wrong to end up like this. all that was done was to take advice, invest the money, leave it in the hands of the so called 'professionals'. Beleive me all those involved are starting to have a stench of shait around them. Banks,storm,regulators,associations..all of them are to me on the nose. Happy Easter everyone,excecpt the onees who are the liars and cheats involved in this whole disaster


----------



## Solly (13 April 2009)

Receivers Sale - Office & Home Furniture & Appliances
In Matter of: Storm Financial Limited (Receivers and Managers Appointed) (In Liquidation)

Have a look here at Grays Online, be a part of history,
there may be something of interest to you.

http://www.graysonline.com.au/sale.asp?SALE_ID=70823


(gg, have a look at Ornaments and Artwork, I'm sure there's something there to suit your taste.)


----------



## Kez180 (14 April 2009)

Solly said:


> Receivers Sale - Office & Home Furniture & Appliances
> In Matter of: Storm Financial Limited (Receivers and Managers Appointed) (In Liquidation)
> 
> Have a look here at Grays Online, be a part of history,
> ...




Forwarded to my brissy based mother


----------



## Solly (15 April 2009)

Parliamentary Joint Committee on Corporations and Financial Services
Inquiry into Financial Products and Services in Australia
Submissions received by the Committee so far....

With some submissions by former Storm clients;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm


----------



## beamstas (15 April 2009)

Oh my...


----------



## Solly (16 April 2009)

beamstas said:


> Oh my...




I have a strange feeling gg is looking for a couple Reindeers for the foyer of Garpal Inc..


----------



## maccka (16 April 2009)

Solly said:


> I have a strange feeling gg is looking for a couple Reindeers for the foyer of Garpal Inc..




Was it GG that was driving the truck from out west recently?

Perhaps the reindeer could be hood ornaments?


----------



## Garpal Gumnut (16 April 2009)

Solly said:


> I have a strange feeling gg is looking for a couple Reindeers for the foyer of Garpal Inc..




Sorry mates for not replying.

I downloaded the catalogue and I've been speechless, such crap masquerading as a receiver's auction. I've seen better at a Vinnies benefit night on Magnetic Island.

Its all a bit like the innards of Manny's house on the Terrace. Too much gold and purple for a survivor.

A bit too grick for me I'm afraid.

I'm at best a souvlahki and VB man when it comes to grick.

gg


----------



## Julia (16 April 2009)

Solly said:


> Parliamentary Joint Committee on Corporations and Financial Services
> Inquiry into Financial Products and Services in Australia
> Submissions received by the Committee so far....
> 
> ...



Reading some of these is pretty heartbreaking.  Poor sods.


----------



## Solly (20 April 2009)

The Australian reports that 
"Emmanuel Cassimatis and his wife Julie ...own five investment properties"

See more here in this article;
"Living it up on failure as investors reel"
by Anthony Klan 

http://www.theaustralian.news.com.au/story/0,25197,25356425-2702,00.html


----------



## Solly (20 April 2009)

*CBA doing Storm damaged deals*

"The Commonwealth Bank is doing deals including life-time tenancy agreements with its Townsville Storm Financial victims but the Bank of Queensland is holding a hard line on its culpability over dubious Storm-arranged loans - and therefore setting itself up for major legal action"

More here from Michael Pascoe in The SMH, 


http://business.smh.com.au/business/cba-doing-storm-damaged-deals-20090420-ac84.html


----------



## Solly (20 April 2009)

*Symonds signed bat for Storm loan*

"Australian cricketer Andrew Symonds used a signed bat to lock in a seven-figure loan with the Commonwealth Bank of Australia that he then invested with the failed Storm Financial Services, a former Storm executive alleges."

Article states that Roy may have lost $1m...

http://business.brisbanetimes.com.au/business/symonds-signed-bat-for-storm-loan-20090420-abzi.html


----------



## Solly (21 April 2009)

"*COMMONWEALTH Bank was forced to deny* yesterday that a signed bat from cricket star Andrew Symonds got him special treatment on bank loans used to finance his disastrous investment with Storm Financial."

"....*Slater & Gordon expected to brief clients today* about the class action it is preparing against Storm and its business partners.
Slater & Gordon's Damian Scattini said the action could be ready to proceed within several weeks."


more here from Colin Kruger in The Age

http://business.theage.com.au/business/bank-denies-going-in-to-bat-for-cricketer-20090420-acou.html


----------



## Solly (22 April 2009)

*"ASIC incapable of preventing Storm situation"*

"The Storm Financial collapse could not have been prevented by ASIC in its current guise."

See the story here by Darin Tyson-Chan in Investor Daily

http://www.investordaily.com.au/cps/rde/xchg/id/style/6282.htm


----------



## Garpal Gumnut (22 April 2009)

Solly said:


> *"ASIC incapable of preventing Storm situation"*
> 
> "The Storm Financial collapse could not have been prevented by ASIC in its current guise."
> 
> ...




Solly,  mate,

I've read all your posts and have been contacted by Manny Cassimatis, to hear his side of the story.

It appears to me that the Storm Investors have been silly and greedy in equal measures, with a dollop of poor governance from the Banks/ Macquarie.

Were we in a bull market again,  Manny would be trying to sell his model on market again.

Manny and his ilk feed off other folks greed. 

gg


----------



## Smiley (22 April 2009)

GG, I know lots of ex-storm investors and we are sick of being called greedy because we tried to become self-funded retirees.  
It is easy to label people as stupid, naive, etc; what makes you so special and clever?  
So what did Manny say, if you have a special line to him?  Read the submissions online and you will see that there are professionals in the financial field who believed the word of someone who was supposedly licensed and a member of the FPA.  
The problem was storm not doing as promised and selling client's porfolios as instructed by us. . . . not because we were gamblers or incompetent.


----------



## pilots (22 April 2009)

Smiley, Any one who invests ALL the money they have in only one investment, in not only greedy, but thick as two short planks as well.


----------



## Julia (22 April 2009)

pilots said:


> Smiley, Any one who invests ALL the money they have in only one investment, in not only greedy, but thick as two short planks as well.



Pilots, I'm not sure that's entirely fair.  They did trust one financial adviser to an unreasonable extent but - as I understand it, and happy to be corrected - they didn't approve their funds going into "one investment", but rather a geared Fund which invested in a range of securities.

Perhaps a Storm investor would be able to clarify this.

Not as though they put all their money into, e.g. Allco or BNB.


----------



## pilots (22 April 2009)

Some of then ONLY invested in Storm, thats a train wreck waiting to happen when you do that.


----------



## Garpal Gumnut (22 April 2009)

Smiley said:


> GG, I know lots of ex-storm investors and we are sick of being called greedy because we tried to become self-funded retirees.
> It is easy to label people as stupid, naive, etc; what makes you so special and clever?
> So what did Manny say, if you have a special line to him?  Read the submissions online and you will see that there are professionals in the financial field who believed the word of someone who was supposedly licensed and a member of the FPA.
> The problem was storm not doing as promised and selling client's porfolios as instructed by us. . . . not because we were gamblers or incompetent.




Mate I'm not having a go at you personally, but you just have to have a look at the Auction of Storm effects.

The whole show was a schmooze.

From the moment you walked in the door you were being manipulated by the ambience and that continued with the oxygen that was pumped in to the rooms where you listened to the Storm spiel.

Yes, you were trying to be self sufficient, and good on you, you are the oil that makes the engine of Australia run.

No, you are not blameless totally. You were done over OK, but you have to accept some responsibility for being gullible. 

Many folk walked in to Storm and said to themselves, "this is a scam" and walked out again.

Manny could sell not just the ice to eskimos, but a whole refrigeration plant.

gg


----------



## darkside (22 April 2009)

So after reading 40 odd pages of the "storm thread" and the opinions of some very wise people, what do some think the outcome will be, will EC full fill his promise to bring "justice for all", will the evil banks give all the money back so their clients can have another throw of the dice, or will it just die a natural death, and then serve as a warning for some and an expensive lesson for others. No intent here just after an opinion. Cheers


----------



## donteventryit (22 April 2009)

darkside said:


> So after reading 40 odd pages of the "storm thread" and the opinions of some very wise people, what do some think the outcome will be, will EC full fill his promise to bring "justice for all", will the evil banks give all the money back so their clients can have another throw of the dice, or will it just die a natural death, and then serve as a warning for some and an expensive lesson for others. No intent here just after an opinion. Cheers




I'm guessing that ASIC will pursue *him *for a couple of things: 

1. Trading whilst insolvent
2. The to-be-proven fraud ie dodgy bank apps etc

I believe that Slater and Gordon and also other legal firms will pursue damages for dodgy advice ie not taking clients goals and objectives into account when providing advice, amongst other things etc. Not sure if they'll end up pursuing only EC and JC on this one, or the adviser or  ... this will come out over the next few weeks/months I expect. Pretty sure that there'll be a few hung out to dry though.

Also, the banks are going to be named somewhere ...


----------



## Judd (22 April 2009)

donteventryit said:


> ....Also, the banks are going to be named somewhere ...




And this is probably the really upsetting bit.  It isn't going to be bank branch in Brisbane, or Sydney, or Gosford or Albany.  Nope, it's going to be the person(s) who work(ed) in the CBA/BoQ Townsville Branch.

Obviously, organisations are, with few exceptions, responsible for the actions of their staff but I'll bet that there will be a few people in the area who, when asked what job they do, will proudly state that they work for the Tax Office rather than admit they work for a bank.


----------



## Solly (22 April 2009)

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Thursday, 23 April 2009

Justice Logan Court No. 3, Level 7

9:30 AM Hearing

4 QUD73/2009 STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) 
v VICTORIAN FAMILIES RETIREMENT & INVESTMENT GROUP PTY LTD


----------



## Solly (22 April 2009)

darkside said:


> So after reading 40 odd pages of the "storm thread" and the opinions of some very wise people, what do some think the outcome will be, will EC full fill his promise to bring "justice for all", will the evil banks give all the money back so their clients can have another throw of the dice, or will it just die a natural death, and then serve as a warning for some and an expensive lesson for others. No intent here just after an opinion. Cheers




darkside, Herbert Spencer in his 1864 book titled "Principles of Biology" coined the phase "Survival of the fittest".......that will be the outcome.


----------



## Garpal Gumnut (23 April 2009)

Garpal Gumnut said:


> Mate I'm not having a go at you personally, but you just have to have a look at the Auction of Storm effects.
> 
> The whole show was a schmooze.
> 
> ...




A contact in Brisbane has flagged me about more bad news for Storm Investors.

It will be in The Austrslian or AFR in the next few days.

gg


----------



## carey ramm (23 April 2009)

GG

I dont believe there is any more bad news for Storm Investors per se - perhaps some news that may worry certain Storm Directors and a Qld bank.

I do see that the AFR are reporting that the Bank of Qld will be first cab off the rank in the Slater and Gordon action:

"BoQ in eye of first Storm case
Wednesday, 22 April 2009 | The Australian Financial Review | Duncan Hughes 

Bank of Queensland will be sued for negligence and several breaches of the Trade Practices Act in the first case for victims of the collapse of Townsville-based Storm Financial Services."

http://www.afr.com/home/login.aspx?ATL://20090422000031066180&section=Financial Services

The AFR certainly have their teeth into the Storm / CBA / BOQ saga!!!

To all those Storm clients - hang in there!!! I know u are doing it tough but there are a number of good people in there fighting for u and we all knew up front this would be a tough fight.


----------



## chrisgee (23 April 2009)

Garpal Gumnut said:


> Solly,  mate,
> 
> I've read all your posts and have been contacted by Manny Cassimatis, to hear his side of the story.
> 
> ...




Mr gg, I don't think we are silly and stupid, it might be ok for you as i see you are a rich person. we put our faith in a company/man that assured us that all will be ok, we trusted them/him. we are honest down to earth aussies just trying to be self sufficient rather than live off the government but now it looks like we will be. call me/us silly if you wish but i'm no einstien but how can an ordindary bloke be ripped off like this in aust. it's Anzac day tomorrow and i'm sad that this country can let it's own people down. it like there are enemies within and not in the trenches in europe. i take responsibility for where i am today, but surely their must be laws and processes and checks and balances that protect the ordinary people. i still say i want to see people go to jail if there has been any criminal things done....(end of rant)


----------



## pilots (23 April 2009)

carey ramm said:


> GG
> 
> I dont believe there is any more bad news for Storm Investors per se - perhaps some news that may worry certain Storm Directors and a Qld bank.
> 
> ...


----------



## Garpal Gumnut (23 April 2009)

Garpal Gumnut said:


> Mate I'm not having a go at you personally, but you just have to have a look at the Auction of Storm effects.
> 
> The whole show was a schmooze.
> 
> ...






chrisgee said:


> Mr gg, I don't think we are silly and stupid, it might be ok for you as i see you are a rich person. we put our faith in a company/man that assured us that all will be ok, we trusted them/him. we are honest down to earth aussies just trying to be self sufficient rather than live off the government but now it looks like we will be. call me/us silly if you wish but i'm no einstien but how can an ordindary bloke be ripped off like this in aust. it's Anzac day tomorrow and i'm sad that this country can let it's own people down. it like there are enemies within and not in the trenches in europe. i take responsibility for where i am today, but surely their must be laws and processes and checks and balances that protect the ordinary people. i still say i want to see people go to jail if there has been any criminal things done....(end of rant)




Mate, sorry to bear down on you in your pain, but if you were invested in Storm Financial , you were silly and stupid. Full stop.

Now whether you were  led in to this by bad advice, or ripped off by financial institutions is another matter.

What you have to remember is that lots of folk looked at Storm, and left it alone, because they were uneasy about its model and governance.

Now if you were stupid enough to get involved that is another matter and one which you need to address yourself.

gg


----------



## Garpal Gumnut (23 April 2009)

I feel SICAG, the victim's support group could have been more pro active in pursuing Manny Cassimatis. 

I think that one of their problems is that some members have a belief still in the "Storm Model". 

They do however have a disclaimer on site about the Cassimatis connection. It seems like a bob each way.

gg


----------



## darkside (23 April 2009)

So does anyone think that EC will be returning to his website in a few days with hope and goodwill to all the people who would be checking in often, or is the sentiment that one day in the very near future the webpage will be pulled down and the browser will be re directed to "page can no longer be displayed" 

http://cassimatis.com.au/


----------



## Garpal Gumnut (23 April 2009)

darkside said:


> So does anyone think that EC will be returning to his website in a few days with hope and goodwill to all the people who would be checking in often, or is the sentiment that one day in the very near future the webpage will be pulled down and the browser will be re directed to "page can no longer be displayed"
> 
> http://cassimatis.com.au/




I doubt if the webpage will play out as you have described darkside.

When you follow the lineage of this website it goes all the way back to ozdaq, a failed imitation of the NASDAQ by Manny.

Oh I do love Jazz.

Manny oh my Mannny where are yoooooooooooooou

If Manny can communicate with gg why doesn't he communicate with his investors?



gg


----------



## darkside (23 April 2009)

Ah gg faircall and also for the fact that he has the "Cassimatis.com" domain name registered it is probably not something he would want to part with in a hurry, but in saying that one could be forgiven for wondering how long it takes to "update the content" of the page even just to keep his loyal subjects informed of whats going on , surely he owes them that, even kleenmaid had the decency to update their site and keep the punters up to date , although i do believe they were running one giant "Ponzi scheme"


http://www.kleenmaid.com.au/


----------



## Garpal Gumnut (23 April 2009)

darkside said:


> Ah gg faircall and also for the fact that he has the "Cassimatis.com" domain name registered it is probably not something he would want to part with in a hurry, but in saying that one could be forgiven for wondering how long it takes to "update the content" of the page even just to keep his loyal subjects informed of whats going on , surely he owes them that, even kleenmaid had the decency to update their site and keep the punters up to date , although i do believe they were running one giant "Ponzi scheme"
> 
> 
> http://www.kleenmaid.com.au/





darkside you are well named.

Manny is The Man.

He is, who is, etc. etc.

Even the SICAG people have not disowned him.

Watch the AFR and the Australian in the next few days.

gg


----------



## Solly (23 April 2009)

Garpal Gumnut said:


> Mate, sorry to bear down on you in your pain, but if you were invested in Storm Financial , you were silly and stupid. Full stop.
> 
> Now whether you were  led in to this by bad advice, or ripped off by financial institutions is another matter.
> 
> ...




"Mr gg"  (I like that) you are very hard and uncaring to "Mr chrisgee" but unfortunately your words however harsh reflect the reality. I have read a few posts from chrisgee I'm unclear where chris is an ex-client or whether it's family or friends who are involved, it doesn't matter, you've got to take it on the chin and "man up" or "woman up".

First rule, admit you farked up, rule two, get moving, rule three, dig yourself out, rule four, seek a remedy that you accept, rule five don't repeat the mistake, rule six, you don't owe an explanation to anybody except yourself. 

I can't tolerate, whingers, victims, the "why me" mentality. Pick up the pieces, that's if you can find any and get moving.
If it is proven that anybody has caused you any harm, if you chose,  seek to be compensated, if not get moving.
I've met some master scammers both on shore and off shore, I've helped some who have lost out and I have attempted to get them back on track. (I wish there where more like the late Ed Pankau in this world...he's  greatly missed) 

Whether people triumph or fold because of this episode is entirely up to them. Chris if you read this, I don't want to hear a whinge or a rant from you again. I endorse the wisdom of gg, consider his counsel.


----------



## pilots (23 April 2009)

Solly said:


> "Mr gg"  (I like that) you are very hard and uncaring to "Mr chrisgee" but unfortunately your words however harsh reflect the reality. I have read a few posts from chrisgee I'm unclear where chris is an ex-client or whether it's family or friends who are involved, it doesn't matter, you've got to take it on the chin and "man up" or "woman up".
> 
> First rule, admit you farked up, rule two, get moving, rule three, dig yourself out, rule four, seek a remedy that you accept, rule five don't repeat the mistake, rule six, you don't owe an explanation to anybody except yourself.
> 
> ...




Solly, good post.


----------



## darkside (24 April 2009)

Solly you hit the nail on the head, i was thinking it, but as new to this forum, certainly did'nt want to offend anyone by pointing out the facts and what could be considered the blatent obvious


----------



## Solly (24 April 2009)

*"Storm 'blocked' attempts to sell down investments"*

"STORM Financial talked many clients out of selling down their investment portfolios months before the market tanked last year in order to maintain revenue, former clients claim."

Read more by Sara Rich in "The Australian"

http://www.theaustralian.news.com.au/business/story/0,28124,25377211-20501,00.html


----------



## Solly (24 April 2009)

*"Way clear to probe Storm Financial pair"*

"STORM Financial's joint founders will not appeal a Federal Court ruling that wound up their company last month.

The 28-day window for Emmanuel and Julie Cassimatis to lodge an appeal closed yesterday"

Story by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,20797,25377774-3122,00.html


----------



## Solly (24 April 2009)

*"Storm Financial offshoot to be wound up in Federal Court"*

"A financial planning offshoot of Storm Financial, Victorian Families Retirement and Investment Group"...appears in the Federal Court in Brisbane. 

"Money Management understands the financial planning group, which was placed into liquidation last month, will be formally wound up."

Story by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/Article/Storm-Financial-offshoot-to-be-wound-up-in-Federal-Court/478240.aspx


----------



## -Bevo- (24 April 2009)

First cab off the rank Bank of Queensland. :bigun2:

http://www.townsvillebulletin.com.au/article/2009/04/24/50431_hpnews.html


----------



## chrisgee (24 April 2009)

Solly said:


> "Mr gg"  (I like that) you are very hard and uncaring to "Mr chrisgee" but unfortunately your words however harsh reflect the reality. I have read a few posts from chrisgee I'm unclear where chris is an ex-client or whether it's family or friends who are involved, it doesn't matter, you've got to take it on the chin and "man up" or "woman up".
> 
> First rule, admit you farked up, rule two, get moving, rule three, dig yourself out, rule four, seek a remedy that you accept, rule five don't repeat the mistake, rule six, you don't owe an explanation to anybody except yourself.
> 
> ...





its easy for you and mr gg to say that aferall youse are worth millions. my friends and family have been done over by these people and are facing a very scary and bleak future. i dont know what will be happeng with the leagal action but i dont think there will be much left after legal fees etc. i read the links above even me can work out that $20 mill isnt much insurance when you split it among all the victims. thats if the insrance will pay anything. you and mr gg sound like those smug rich people that sit back and shovel out advice that so is easy but i repeat you dont know what we are going thru. all the victims need the banks to right off the loans. that would be a start. remember all the victims have families and they all know which banks and people havew scammed them and they wont be afraid to tell others which banks and people scammed them. word of mouth travels far in the bush people will only take thier money to those who they trust and havent scammed friends or family and who the hell is ed pankaw ?


----------



## Cereberus (24 April 2009)

Garpal Gumnut said:


> I doubt if the webpage will play out as you have described darkside.
> 
> When you follow the lineage of this website it goes all the way back to ozdaq, a failed imitation of the NASDAQ by Manny.
> 
> ...





I am new to this forum, I was directed here by an interested friend who occasionally uses this site. 

Disclosure: I am close to Storm, many ex-Storm clients, many ex-Storm staff, "Manny" as well as close to the Banks in question and the Banking staff in relation to all this mess. Or should I say soon to be ex-Banking staff in relation to this mess. 

Personal warning to the genuinely impartial: It is obvious to me when reading this forum  who is posting from the "Storm" side and the "Banking" side as well as the regular posts from the "Cassimatis haters" based in Townsville. There is convenient misinformation being placed here, by all sides, so to the real impartial readers and ex-Storm clients  - please be extremely mindful who you think is impartial here and their motives. Some firsthand "insights" into Storm, the Banks, and the Cassimatis’ are very misleading and/or just plain false.  

Beyond this, I will say no more but I do want to genuinely contribute to this thread (and others) and warn those who are reading and contributing that some posts and posters here have hidden, undisclosed agendas. Kudos to those who have fully disclosed if involved, even if many fully disclosed posters in the mess are still misleading, in my opinion.

Can I ask gg, what do you mean by "If Manny can communicate with gg why doesn't he communicate with his investors?"

Are you saying that you personally know Manny? That you communicate with him regularly? To that end, if so, are we to believe that your comments on this forum in relation to Manny are unbiased - either positively or negatively? It seems you position in this forum is one of the "wise one", offering counsel to ex-clients and other posters. Offering educated opinions and a neutral stance.

In contrast, you began this thread initially by asking if anyone knew about these guys in Townsvile, that you had some friends who were Storm clients etc. Now it seems you claim to know about “them” and speak to them personally anyway... 

As Australia's most famous dancing, red head, jail bird and political failure once said: "Please explain". 

Oh and just a quick mention, gg, you might be well in breach of point 4 in the Forum Code of Conduct. Some of your posts, in my opinion, have stepped well over this line when replying to very fearful and burnt ex-Storm investors. Posts from how to deal with their debts, the banks, where to place their remaining equity and cash etc:

_4. Please do not offer or ask for financial advice on Aussie Stock Forums. It is illegal for anyone other than a licensed financial advisor to provide financial advice. Aussie Stock Forums is intended soley for the open discussion of stockmarket related topics._

Some others here, perhaps you might want to re-read the below point in Aussie Storm Forums Terms and Conditions:


_[*]You agree not to use this website to post anything which is knowingly false and/or defamatory, misleading, deceptive, inaccurate, abusive, hateful, harassing, obscene, threatening, invasive of a person's privacy, or otherwise violative of any law.
_
_

Just a reminder for some, but I have found reading the vast majority of posts from the majority of posters quite informative and from my perspective, well balanced._


----------



## SJG1974 (24 April 2009)

Cereberus said:


> Some firsthand "insights" into Storm, the Banks, and the Cassimatis’ are very misleading and/or just plain false.




Cereberus,

As you seem to know so much due to your close relationship with key parties in this mess, perhaps you could point out some of the misleading and false information that has been provided on this forum and provide the real story?

BTW, do you have any idea when "Manny" will reopen his website?  I asked him a question a while back, but he didn't respond.  Perhaps he is getting around to answering it?


----------



## Cereberus (24 April 2009)

SJG1974 said:


> Cereberus,
> 
> As you seem to know so much due to your close relationship with key parties in this mess, perhaps you could point out some of the misleading and false information that has been provided on this forum and provide the real story?
> 
> BTW, do you have any idea when "Manny" will reopen his website?  I asked him a question a while back, but he didn't respond.  Perhaps he is getting around to answering it?




Hi SJG1974,

A small addition to my original disclosure for clarity. 

I should say I am/was close to all above mentioned parties over the past many years, but due to events in recent months I have not been in regular communication with any of the above parties for one reason or another depending on the party. Therefore, I am not a conduit to getting answers on current questions.

So to answer your second question in relation to the Cassimatis website, I do not know if or when the website will be reopened. If I had to guess, I would think that it would not be reopened anytime soon.

In relation to your very first query, my primary intent was firstly to simply warn those innocent readers and contributors of the potential dangers when accepting advice or opinions provided here as neutral and “helpful”. As we know, the internet, due to its seeming anonymity, is a haven for this sort of behaviour but it seemed exceptional when reading this thread.

As to your first query SJG1974, well my second priority was to do just as you suggest over the next few weeks. Stay tuned, I think you will be interested.


----------



## Garpal Gumnut (24 April 2009)

Below is my answer to Cerebrus.

This guy is a bullying Storm insider.

Let us hope he keeps on posting and that this reply will not see him off.

gg







Cereberus said:


> I am new to this forum, I was directed here by an interested friend who occasionally uses this site.
> 
> _*Thanks mate, were hoping to flush you out, well done you are here and hopefully you will continue to attribute, btw, Blind Freddie would be not unaware of this thread, google storm financial and asf comes up in the top three regularly*_
> 
> ...



_

*Google peon mate.*

gg



Cereberus said:



			Hi SJG1974,

A small addition to my original disclosure for clarity. 

I should say I am/was close to all above mentioned parties over the past many years, but due to events in recent months I have not been in regular communication with any of the above parties for one reason or another depending on the party. Therefore, I am not a conduit to getting answers on current questions.

*Did your lawyer write this, you are a doppleganger.*

So to answer your second question in relation to the Cassimatis website, I do not know if or when the website will be reopened. If I had to guess, I would think that it would not be reopened anytime soon.

[I*]Do tell !!*

Click to expand...


_


Cereberus said:


> In relation to your very first query, my primary intent was firstly to simply warn those innocent readers and contributors of the potential dangers when accepting advice or opinions provided here as neutral and “helpful”. As we know, the internet, due to its seeming anonymity, is a haven for this sort of behaviour but it seemed exceptional when reading this thread.
> 
> _*Manny, sorry Cerebrus, get real.*_
> 
> As to your first query SJG1974, well my second priority was to do just as you suggest over the next few weeks. Stay tuned, I think you will be interested.




_*Stay tuned, you will be very interested 

gg

*_


----------



## darkside (24 April 2009)

chrisgee said:


> its easy for you and mr gg to say that aferall youse are worth millions. my friends and family have been done over by these people and are facing a very scary and bleak future. i dont know what will be happeng with the leagal action but i dont think there will be much left after legal fees etc. i read the links above even me can work out that $20 mill isnt much insurance when you split it among all the victims. thats if the insrance will pay anything. you and mr gg sound like those smug rich people that sit back and shovel out advice that so is easy but i repeat you dont know what we are going thru. *all the victims need the banks to right off the loans*. that would be a start. remember all the victims have families and they all know which banks and people havew scammed them and they wont be afraid to tell others which banks and people scammed them. word of mouth travels far in the bush people will only take thier money to those who they trust and havent scammed friends or family and who the hell is ed pankaw ?






I too have lost a few dollars over the last couple of years and would love nothing more than the bank writing off my loan so i can have another throw at the stumps, its only fair if others can get the bank to give them this little bit of lattitude then i should be able to roll the dice again as well, or maybe there is someone i can sue for my loss, i know it was my own fault but that doesn't seem to matter these days.


----------



## Judd (24 April 2009)

> I too have lost a few dollars over the last couple of years and would love nothing more than the bank writing off my loan so i can have another throw at the stumps, its only fair if others can get the bank to give them this little bit of lattitude then i should be able to roll the dice again as well, or maybe there is someone i can sue for my loss, *i know it was my own fault but that doesn't seem to matter these days.*




Yeah this does seem to be a bit of a problem.  It is also a problem that some, possibly including chrisgee, may not really understand what "right [sic] off" actually means as opposed to "waive."  Whether they will bother to at least make an effort to learn is a moot question.


----------



## bunyip (24 April 2009)

chrisgee said:


> its easy for you and mr gg to say that aferall youse are worth millions. my friends and family have been done over by these people and are facing a very scary and bleak future. i dont know what will be happeng with the leagal action but i dont think there will be much left after legal fees etc. i read the links above even me can work out that $20 mill isnt much insurance when you split it among all the victims. thats if the insrance will pay anything. you and mr gg sound like those smug rich people that sit back and shovel out advice that so is easy but i repeat you dont know what we are going thru. all the victims need the banks to right off the loans. that would be a start. remember all the victims have families and they all know which banks and people havew scammed them and they wont be afraid to tell others which banks and people scammed them. word of mouth travels far in the bush people will only take thier money to those who they trust and havent scammed friends or family and who the hell is ed pankaw ?




Chris mate, get real and stop being so bloody silly! Of course the bank shouldn't have to write off your loans!
People are always getting themselves into financial strife by making poor investment decisions. Should the banks write off the loans of everyone who gets caught with a bad investment? Be realistic!
The decision to take on big loans to gear yourself to dangerous levels was yours. Obviously there were many of you who had little understanding of the risk you were taking, but that doesn't absolve you of responsibility for the decisions you took.

Look - I'm not unsympathetic to your problems. I can see you're in a terrible situation and I feel genuinely sorry for you. 
But the sooner you face up to the fact that _*you*_ are just as responsible as everyone you're blaming for your problems, the sooner you'll put your troubles behind you and start rebuilding your life.


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## Mash (24 April 2009)

GG .... I will say it again... you sit in your ivory tower throwing stones...you are one of those "I know it all" types... guess what... you don't.... your condescending tone makes me gag.... ... those of us who actually know what went on with the banks and their predatory behaviour implore they will get what is coming to them.... you sound like you are a frustrated playwright...go and write about the fantasy world you live in.... out here in the real world we will be assisting those who are faultering under the bully boy tactics of the banks and those of us who still have a fire in the belly will fight on, if for nothing else but to help those who feel defeated by the likes of you who offer nothing but negativity..... 
Yes you will bleat with the "this is not a support network".... and I don't care what you think... The storm survivors have rallied.... we are united... and the banks will feel our wrath.... Storm is gone... may EC & JC be brought to justice... in the mean time we will target those who aided and abetted the cassimatis juggernaut..


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## pilots (24 April 2009)

chrisgee said:


> its easy for you and mr gg to say that aferall youse are worth millions. my friends and family have been done over by these people and are facing a very scary and bleak future. i dont know what will be happeng with the leagal action but i dont think there will be much left after legal fees etc. i read the links above even me can work out that $20 mill isnt much insurance when you split it among all the victims. thats if the insrance will pay anything. you and mr gg sound like those smug rich people that sit back and shovel out advice that so is easy but i repeat you dont know what we are going thru. all the victims need the banks to right off the loans. that would be a start. remember all the victims have families and they all know which banks and people havew scammed them and they wont be afraid to tell others which banks and people scammed them. word of mouth travels far in the bush people will only take thier money to those who they trust and havent scammed friends or family and who the hell is ed pankaw ?




Mate, tell me this, why did you get involved with this lot in the first place, was it because they offed more than any all the others did. Mate when it is to good to be true, you know the rest.


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## darkside (24 April 2009)

SJG1974 said:


> Cereberus,
> 
> As you seem to know so much due to your close relationship with key parties in this mess, perhaps you could point out some of the misleading and false information that has been provided on this forum and provide the real story?
> 
> BTW, do you have any idea when "Manny" will reopen his website?  I asked him a question a while back, but he didn't respond.  Perhaps he is getting around to answering it?




Like SJG1974, the fact the website is down was doing my head in, if anyone knows anything about HTML Code and would like to know who made the last post on their website ,and who now is contributing to it,  not that i promote "hacking" in any way and this advice should only be used for good instead of evil and for novelty value only: Go to the "WebPage" right click on the page, left click "view source" scroll to the bottom, the   href="http://,
explains the origin of the page , Mr Google will fill in the blanks.
And when you get to the originators page, the "popup" to ask if you want to install the addon , click _no_, a lot of "nasties" lurk in web pages.


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## pilots (24 April 2009)

Mash said:


> GG .... I will say it again... you sit in your ivory tower throwing stones...you are one of those "I know it all" types... guess what... you don't.... your condescending tone makes me gag.... ... those of us who actually know what went on with the banks and their predatory behaviour implore they will get what is coming to them.... you sound like you are a frustrated playwright...go and write about the fantasy world you live in.... out here in the real world we will be assisting those who are faultering under the bully boy tactics of the banks and those of us who still have a fire in the belly will fight on, if for nothing else but to help those who feel defeated by the likes of you who offer nothing but negativity.....
> Yes you will bleat with the "this is not a support network".... and I don't care what you think... The storm survivors have rallied.... we are united... and the banks will feel our wrath.... Storm is gone... may EC & JC be brought to justice... in the mean time we will target those who aided and abetted the cassimatis juggernaut..




You are going to bring the banks to justice, Mate, you MUST be on DRUGS.
You have been screwed by sales people, get over it.
If for one minute you think you will win against the banks, bend over you are going to get screwed again.


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## Solly (24 April 2009)

Geewiz,  I've just been for a cruise around the sound getting some r&r and I can't believe how quickly things change on this thread. I logged on to check my schedule and thought I'd check ASF to see what's up. 

Welcome Cereberus ( Isn't Cereberus in Greek mythology the three headed watchdog of the land of the already dead ?...Anyway I suppose that's not relevant here). It's great to have someone so well connected to the Cassimatis' I'm also eager to get a truthful unbiased view of the events. My initial contact with the whole storm saga was a couple who have lost everything and are now trying to buy their house back from the bank. 

I believe I endeavour to keep an unbiased open mind about the whole event. Next time you speak with the principals can you ask why their research area and software couldn't pick up the downward market movement and execute appropriate actions in a timely manner to protect the clients and save them from harm.

Also Chrisgee if you are still alive, regarding your question about who is Ed Pankau, have a look at this link.

http://www.pimall.com/nais/nl/n.pankau.html

I feel privileged to have known Ed, he gave a whole new meaning to the word persistence and was a true professional in tracking fraudsters, scammers and is a glowing example of seeking the truth and protecting the rights of the less fortunate.


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## Gerkin (24 April 2009)

Mash said:


> GG .... I will say it again... you sit in your ivory tower throwing stones...you are one of those "I know it all" types... guess what... you don't.... your condescending tone makes me gag.... ... those of us who actually know what went on with the banks and their predatory behaviour implore they will get what is coming to them.... you sound like you are a frustrated playwright...go and write about the fantasy world you live in.... out here in the real world we will be assisting those who are faultering under the bully boy tactics of the banks and those of us who still have a fire in the belly will fight on, if for nothing else but to help those who feel defeated by the likes of you who offer nothing but negativity.....
> Yes you will bleat with the "this is not a support network".... and I don't care what you think... The storm survivors have rallied.... we are united... and the banks will feel our wrath.... Storm is gone... may EC & JC be brought to justice... in the mean time we will target those who aided and abetted the cassimatis juggernaut..




In the real world??
Clients who invested with Storm were never in the real world. All they could care about was their promised income of 100K per annum?? Let me ask you this? How many clients were told there investments could earn them over 100K a year? Plenty, Why 10% over 1 million invested is 100K easy. Now did these average people ever bring in 100K from 1 salary in the wrok force? maybe but with their asset position which they went to Storm with probably suggests not? How can you believe an investment return of over 100K a year (without risk) when you never earnt that in a year?? Come on this is just greed, even though half of you wont admit it.

 Just have a look at the Storm Offices?? Raise any alarm bells. The Yank Investment Banks in Collins St Melbourne dont even go that far with their oppulence.

Now half of you posters are blaming the advice/investment industry before looking at your own mistakes. I know of reputable planners who were ditched in favour of Storm. Client were getting 25K tax free allocated pension + age pension + health card. But all this got cancelled when they went in search of the 100K + investment return. Why does a person need that income??


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## Solly (25 April 2009)

Gerkin said:


> In the real world??
> Clients who invested with Storm were never in the real world. All they could care about was their promised income of 100K per annum?? Let me ask you this? How many clients were told there investments could earn them over 100K a year? Plenty, Why 10% over 1 million invested is 100K easy. Now did these average people ever bring in 100K from 1 salary in the wrok force? maybe but with their asset position which they went to Storm with probably suggests not? How can you believe an investment return of over 100K a year (without risk) when you never earnt that in a year?? Come on this is just greed, even though half of you wont admit it.
> 
> Just have a look at the Storm Offices?? Raise any alarm bells. The Yank Investment Banks in Collins St Melbourne dont even go that far with their oppulence.
> ...





Have a look at this article from the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/04/22/49841_newsphoto.html

There's a link to pics that shows the fit out of the Townsville HQ.


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## pilots (25 April 2009)

Wow, just had a look at the photos of inside the office, any one, who could not see that this was a scam, after a visit to that office deserve to be taken to the cleaners.  Did any of you stop and think WHO'S paying for this????
NO!!!! you was all thinking of the 100k a year you was promised

WHEN ITS TOO GOOD TO BE TRUE...............
The same people will get screwed again, when they set up a fighting fund to take on the banks and storm


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## Solly (25 April 2009)

Mash said:


> GG .... I will say it again... you sit in your ivory tower throwing stones...you are one of those "I know it all" types... guess what... you don't.... your condescending tone makes me gag.... ... those of us who actually know what went on with the banks and their predatory behaviour implore they will get what is coming to them.... you sound like you are a frustrated playwright...go and write about the fantasy world you live in.... out here in the real world we will be assisting those who are faultering under the bully boy tactics of the banks and those of us who still have a fire in the belly will fight on, if for nothing else but to help those who feel defeated by the likes of you who offer nothing but negativity.....
> Yes you will bleat with the "this is not a support network".... and I don't care what you think... The storm survivors have rallied.... we are united... and the banks will feel our wrath.... Storm is gone... may EC & JC be brought to justice... in the mean time we will target those who aided and abetted the cassimatis juggernaut..




Mash I can understand your anger and frustration, yesterday at lunch I was talking with an ex-storm client. It's very distressing to hear their tale of hardship and angst, they were looking for a magic wand to fix things and to make it all go away. They want their old life back, the life of 'unworry', certainty and freedom to do what they want.

The harsh reality it appears is that their previous life style was built on faulty foundations and could never last. It was hard for me to see tears swelling up in their eyes as they told me that they are near the end of their tether and couldn't see them lasting too much longer in their current circumstances. Their home of almost 30 years is probably about to go. They are working frantically to keep the repayments up on a property they owned outright just a few years ago. I know that this situation is common amongst many ex-clients, some are in a far worse predicament. 

Regarding gg, it appears to me that gg is a very tough businessman, probably a firm but fair negotiator and is very streetwise. I don't agree with all of his views but his approach of calling "a spade a spade" and holding very firm views are not unusual traits in successful people. I suppose that's just gg. If he gets under your skin, it's you that lets that happen. I believe that his deliberate conformational manner, in some cases has the beneficial affect of spurring people into action and challenging their views or position. I will be watching with interest any future interactions between "Cereberus" and gg.

I'm pleased to see that the Storm survivors are united and rallying against the banks, but as for bringing people to justice, no one has been charged with anything at this stage and all parties to this saga are innocent of any wrong doing at this point. I believe that EC & JC are probably in disbelief that the company is gone and are probably deeply suffering as well but just in a different way to you. I don't believe that they set up the company, themselves and their clients to fail. Now that we have government investigators involved, legal proceedings underway, we really will need to just sit back and watch the whole saga play out. I enjoy watching and reading the commentaries, to me it's the tragedy of the wreck that's left behind that is very unpleasant especially now that I see it first hand.


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## Solly (25 April 2009)

pilots said:


> Wow, just had a look at the photos of inside the office, any one, who could not see that this was a scam, after a visit to that office deserve to be taken to the cleaners.  Did any of you stop and think WHO'S paying for this????
> NO!!!! you was all thinking of the 100k a year you was promised
> 
> WHEN ITS TOO GOOD TO BE TRUE...............
> The same people will get screwed again, when they set up a fighting fund to take on the banks and storm




pilots where I come from that type of fit out wouldn't be over the top, it's just the style and taste that's not agreeable with me. I'm often in large corporates and some of these are often very sparse but expensive but to me are more tasteful fit outs. But I do like the polished timber floors,  but then everybody is different.


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## Pindibog (25 April 2009)

You are putting all the clients into one basket!!!! Many FP were bought by Storm and clients followed. Mine had an old Queenslander home as an office. Nothing flash. When I went to TNS the office was ordinary. Never went to the new one. Brisbane office was in fitting with the building and decor of other floors. It appears in the last 4yrs Storm became more agressive. I went for 4 to 5yrs without any steps then whammo I was getting further step notifications regularly. Some I took, some I did not. Myself like many others did not draw a wage and the portfolio was a long term investment. So stop having such tunnel vision and what do you personally gain by telling people they deserve to be taken to the cleaners. Nasty!!!

Chrisgee don't waste your breath when posters attack the vunerable. Rise above it and don't bother reading the thread if it upsets you. They have an opinion worthless or not. Don't give it value by responding.




pilots said:


> Wow, just had a look at the photos of inside the office, any one, who could not see that this was a scam, after a visit to that office deserve to be taken to the cleaners.  Did any of you stop and think WHO'S paying for this????
> NO!!!! you was all thinking of the 100k a year you was promised
> 
> WHEN ITS TOO GOOD TO BE TRUE...............
> The same people will get screwed again, when they set up a fighting fund to take on the banks and storm


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## carey ramm (25 April 2009)

Well it is hotting up in here.

I would just like to comment that, like it or not, this forum has evolved into a semi support structure for storm investors and many do read it - I know that generally these forums are about investments but the reality is Storm is now dead and thankfully as an investment mechanism it is no longer available to the public. So to many the forum is useful to vent on and to keep up to date with developments (Solly u do a fantastic job). Please bear in mind that many Storm clients who do read this forum are under enormous stress, they feel despair and failure, and many are seeking medical treatment and counselling. They have families just like we do.

I too would like to welcome Cerebrus - Cerebrus it would be very useful to many of the posters on this forum if u could shed some light on the storm/banking relationship and how this worked. In particular how the banks approved all these home/investment loans where the borrower did not have the personal exertion income nor proven investment income or even asset backing to be able to service the interest payments let alone the capital repayment. If many of these people wanted to borrow to buy another investment such as say an investment house then many of them would never have gotten the funds or if a few did it would have been for a susbtantially lower amount. I for one have never seen loans like this before - ever. So please tell us how?

Many of u who comment here say u have friends who have been destroyed by Storm - well ask these friends if u can look at these loan documents and see for yourself. 

Where were the audit functions of the banks - with the volume of business Storm were writing surely some of these files must have been audited? Remember that without the home/invetsment loan there would have been no margin loan so this is very much the core of the problem.

Pilots u should remember that the vast majority of Storm clients have been totally wiped out in terms of net wealth. From the clients I have seen there is about 1 in 6 that have any slim chance of beginning the long journey of rebuilding their personal finances. Most of the others face personal bankruptcy and at an age where many are retired so they cant go out and get another job. So these people have nothing to lose and have only upside by pursuing justice. We have credit laws in this Country to protect people from bad behaviour. If there wasnt at least a smell of bad behaviour do u think ASIC would be investigating on such a large scale and there is a major Parliamentary Enquiry. Just take a look at what the media have uncovered and they are on the outside looking in.

The Storm campaign has already seen some positive outcomes for some victims such as:
- reduced negative equity payouts on margin loans
- waiving of loan break fees
- life tenancy agreements for the family home
- some home loans have been set aside completely and hopefully many more may follow (i should point out that the goal for most Storm investors is to save the family home - they realise their investments are all gone)

All of these are a better outcome than the do-nothing scenario. So Storm investors would be doing themselves a dis-service if they didnt at least look at these paths forward as opposed to copping it on the chin as all their own doing.

I should point out that not all lenders are doing this - hence the impending legal action from Slater and Gordon.


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## SJG1974 (25 April 2009)

Cereberus said:


> Hi SJG1974,
> 
> A small addition to my original disclosure for clarity.
> 
> ...




Cereberus,

I certainly will be interested.  I just hope it doesn't continue on from the rubbish that Manny and Julie tried to peddle on their now non-operational web site...."its all the banks' fault, its a black swan event that noone saw coming, trust us because we are trustworthy, our 7% fees were low by industry standards etc. etc."  That website ended up being quite comical (if you weren't a poor old Storm client that is).

It would be good to see some people associated with the workings of Storm actually take some responsibility, rather than shifting the blame all the time.

Again, your insights into this mess will be eagerly anticipated, by me at least.


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## SJG1974 (25 April 2009)

Solly said:


> Have a look at this article from the Townsville Bulletin;
> 
> http://www.townsvillebulletin.com.au/article/2009/04/22/49841_newsphoto.html
> 
> There's a link to pics that shows the fit out of the Townsville HQ.




Looks like a hotel moreso than a financial planning office.

Whats the old saying "you can't turn **** into strawberry jam".  Looks like Manny and Julie certainly tried to though...


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## kincella (25 April 2009)

quote from Marcus Padley today....
its aimed at investors generally...no matter what the investment..its a good read

Your stupidity is directly proportional to how unrealistically rich you want to be. Only the financially ambitious (to use a polite expression) sent money to the Philippines.

http://business.theage.com.au/busin...-guide-to-the-money-jungle-20090424-ai62.html


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## pilots (25 April 2009)

carey ramm said:


> Well it is hotting up in here.
> 
> I would just like to comment that, like it or not, this forum has evolved into a semi support structure for storm investors and many do read it - I know that generally these forums are about investments but the reality is Storm is now dead and thankfully as an investment mechanism it is no longer available to the public. So to many the forum is useful to vent on and to keep up to date with developments (Solly u do a fantastic job). Please bear in mind that many Storm clients who do read this forum are under enormous stress, they feel despair and failure, and many are seeking medical treatment and counselling. They have families just like we do.
> 
> ...




Carey, I am sorry that people will go down bad on this, but you are forgetting that NO ONE  held a gun to the head and said buy Storm.
Second I had people call me in Perth to tell me how good it was, one couple took ALL of the super they had in dumped it in Storm, we told them NEVER have all your eggs in the same basket. Most of the people that have lost every thing, you will find they had every thing in Storm, THAT IS A TRAIN WRECK WAITING TO HAPPEN. The worst thing about this whole sorry lot is that some of the sales people walked away with up to $250,000 commission on a single sale.


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## Solly (25 April 2009)

chrisgee said:


> its easy for you and mr gg to say that aferall youse are worth millions. my friends and family have been done over by these people and are facing a very scary and bleak future. i dont know what will be happeng with the leagal action but i dont think there will be much left after legal fees etc. i read the links above even me can work out that $20 mill isnt much insurance when you split it among all the victims. thats if the insrance will pay anything. you and mr gg sound like those smug rich people that sit back and shovel out advice that so is easy but i repeat you dont know what we are going thru. all the victims need the banks to right off the loans. that would be a start. remember all the victims have families and they all know which banks and people havew scammed them and they wont be afraid to tell others which banks and people scammed them. word of mouth travels far in the bush people will only take thier money to those who they trust and havent scammed friends or family and who the hell is ed pankaw ?




Chris,
Yes things are easy for me, because I choose it to be. Believe it or not it's exactly the same for you. No matter how upset you and your family & friends get, it changes nothing. Getting upset and ranting just tires you out and delays your way forward. What you need is action, get moving, don't brood, don't stare at the blank wall. Screaming and jumping up and down just leaves you in the same place with a hoarse voice and sore feet. 
Seek a remedy, seek advice, seek assistance, if you can't do it yourself you need help from others to get you on your way.

Everybody on this forum has made mistakes, stuff ups, there's probably some here who have lost everything a couple of times but they are still here.
You need a plan, plan you action then action your plan, if things aren't working then chart another course. I understand that you have lost out but it doesn't mean that things stay that way but you must get moving NOW.
If you lose your house, get another one. If you lose your job get another one.
If you are too old to work, sick or disabled as a last resort the government will help.
If you can work, are healthy and able you have the future at your feet. Don't waste any more precious time....
I'm a firm believer in living life in the present, the only thing that really exists is this moment, don't waste it.


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## Steve Borden (25 April 2009)

It is of course well-stated that the reason people went to Storm was to secure a sound retirement, unfortunately they were the victims of a very slick sales process that positioned the model as a low risk investment strategy compared with the risk of doing nothing. 

It was predicated on blue sky modelling with no exit mechanisms except cross your fingers and hope for the best, if that doesn't work just tell the client your house is safe and we have insurance that will cover it. The client was not to know this at the time and as Storm were FPA members and regulated by ASIC, you would have thought they knew what they were doing and if they didn't then they would have been stopped.

Furthermore not only did Storm strongly endorse the model the Bank (CBA, BoQ, etc) gave them a loan based on the Storm model, from a client's perspective surely the Bank must have completed a diligent credit assessment and would not have lent them the money if they didn't think they could repay. No matter how the Banks (and their many supporters) spin it, the approval of a loan based on investment projections provided by Storm was a quasi endorsement of the Storm model.

What the client didn't know of course was that for many, the loans were based on made up income figures, inflated property valuations and total misrepresentations of their assets and liabilities positions (by usually omitting margin loans).

So the client goes to a licenced investment adviser who makes a recommendation and in support of that recommendation a major financial institution lends them the money to invest.

Would a second opinion have been prudent, the answer is of course yes. Do they have the luxury of that now, of course not. 

Would I have invested with Storm, unreservedly no but my history, training and occupation made the flaws easy to spot. Most of the investors didn't have that knowledge or inside understanding.

So we are now where we are and the former clients of Storm are trying to save what they can, be it their house, their super or their retirement. When faced with the same situation does anyone here seriously expect them to lie down and just accept it? Would you?

We all would exhaust every possible legal avenue available, sure some would do it differently but ultimately the goal is the same. The goal being to ensure all is not lost.

It may be that the Banks come to the party or Slater & Gordon achieve an outcome that saves someone's house or someone's retirement, isn't that a good thing? Afterall, if the Bank has misrepresented a clients financial position simply to get the loan approved (and they have on many occassions) then why shouldn't they be forced to compensate, if the clients were badly advised by Storm then why shouldn't the insurers pay.

Sure the clients have to wear some blame and no one expects a magic wand to be waived with their financial position re-set to what it was in 10/07 but only the most unfeeling would begrudge them saving their house or their retirement.


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## Garpal Gumnut (25 April 2009)

It is probably useful to have a summary, now that we have everyone at the table, including some of Manny's minions in the last few days.

On reading all the posts again this is my summary.
*

1.     Much money and many people's life savings have been lost in the Storm debacle.

2.     Many unsophisticated investors were conned in to sophisticated financial instruments and gearing by smooth talking financial advisers employed by the Cassimatis' and Storm Financial Group.

3.     The FPA Financial Planning Association and Australian Security and Investment Corporation ASIC knew of the problems but were tardy in their reaction.

4.     Some bank officers must have known that the targets were unsophisticated and by collusion or turning a blind eye assisted the investors into these instruments, thus leaving their institutions, BOQ, CBA, Macquarie, open to litigation.

*

These are the known knowns. 

Anybody like to add to this.

gg


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## Trevor_S (26 April 2009)

Garpal Gumnut said:


> 2.     Many unsophisticated investors were conned in to sophisticated financial instruments
> [/B]
> ...
> These are the known knowns.
> ...




I would argue the above point is incorrect.  The investment structure was extremely simple, heavily gear into an index fund and hope on a wing and a prayer for continual CG, the same thing a whole swag of FP's push as well as many REA's and the guys at Sommersoft for example, load up out the "ying yang" with debt.  You can't get much simpler, in fact it's so simple as I have reiterated time and time again.  You don't need an FP to use that system, there are any number of listed index funds, dollar cost average into them and save a whole crap load of fees !  

There was no real "conning" to my mind, there was gullibility and an unrealistic expectation.  I am still in two minds if EC is just a slick salesman or is genuinely deluded.  I have no doubt all groups were culpable, ie the FP's the banks AND the Investors... the big difference is the last group are the ones that lost the money,  they are the ones ultimately responsible.

See the link from Kincealla and the quote from Marcus Padley below, many of the same points I have regurgitated in the past.

http://business.smh.com.au/business...-guide-to-the-money-jungle-20090424-ai62.html


Here are a few truths and tips about buying financial product:

*[*]Don't expect the law to protect you; no one can protect you from your own stupidity in your own living room.

[*]Take responsibility yourself. Have your wits about you. Common sense will suffice. You are your only defence.
*
Most dodgy products are flashing warning signals. If the salesman has travelled 100 kilometres to see you at 10.30 at night, something's wrong.

Remember the golden rule: If it's any good, you wouldn't be offered it. If you get offered it, you don't want it.

If you don't understand it, don't buy it. Complexity is camouflage.

Don't put much in any one product.

Be very careful borrowing to invest. There aren't many (any) asset classes that will reliably return you more than the cost of borrowing. There aren't any that will return it without risk.

If you are buying a dressed product, you are almost certainly paying more than market interest rates.

Reward is always balanced by risk. You will be told about the rewards. If you can't see the risks, you clearly don't understand.

Don't be rushed. There are a million financial products out there. You don't "need" to buy this particular one.

Anyone selling you a return of greater than 9.5 per cent per annum either has his fingers crossed behind his back, is lying or hoping or is selling you a greater-than-average risk.

Anyone earning a commission of more than 2 per cent is selling something hard to sell; you probably shouldn't buy.

Your stupidity is directly proportional to how unrealistically rich you want to be. Only the financially ambitious (to use a polite expression) sent money to the Philippines.


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## Solly (26 April 2009)

Trevor_S said:


> There was no real "conning" to my mind, there was gullibility and an unrealistic expectation.  I am still in two minds if EC is just a slick salesman or is genuinely deluded.  I have no doubt all groups were culpable, ie the FP's the banks AND the Investors... the big difference is the last group are the ones that lost the money,  they are the ones ultimately responsible.




Trevor, when things were going pear shaped with Storm and obviously not retrievable, a direct quote to me was "Don't worry Emmanuel with sort it all out". It was an almost "religious" belief that all will be ok. 
Maybe a delusional and unrealistic stance, but still a very powerful force when basic beliefs are being challenged.


----------



## darkside (26 April 2009)

Some friends of mine had been caught up in the whole "hype and excitement" of the Storm operation to the extent of going to the lavish parties and "hanging " with the "in crowd" and as Solly suggests they were like they had found a new religion and EC was the most revered, on numerous occasions they had told me how i was missing the boat by not jumping on board with them and almost like  "amway sales people" financial wealth was just around the corner with no input from them except the occasional party and sign a few "docs. They too had the same "mantra" going as the ship started to list and i suggested they should bail, "wer'e not worried, Manny knows what he's doing ".Now they have a massive mortgage on a once owned property, and if they both work till they are 135 years old they should be back on their feet.But at the end of the day, no one held a gun to their head and made them do it .


----------



## -Bevo- (26 April 2009)

darkside said:


> Some friends of mine had been caught up in the whole "hype and excitement" of the Storm operation to the extent of going to the lavish parties and "hanging " with the "in crowd" and as Solly suggests they were like they had found a new religion and EC was the most revered, on numerous occasions they had told me how i was missing the boat by not jumping on board with them and almost like  "amway sales people" financial wealth was just around the corner with no input from them except the occasional party and sign a few "docs. They too had the same "mantra" going as the ship started to list and i suggested they should bail, "wer'e not worried, Manny knows what he's doing ".Now they have a massive mortgage on a once owned property, and if they both work till they are 135 years old they should be back on their feet.But at the end of the day, no one held a gun to their head and made them do it .




Missed the Boat


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## Julia (26 April 2009)

Trevor_S said:


> There was no real "conning" to my mind, there was gullibility and an unrealistic expectation.



There are companies out there at present, mostly property trusts, which are offering dividends of up to 600%.   Is anyone going to look at this and think "whacko, what a great return" and buy it?  You bet someone will.
So yes, I agree much of the Storm thing was about unrealistic expectations which didn't stand up to simple logic in many instances.

That said, until we know the extent of fabrication of figures by anyone other than investors themselves maybe we need to withhold judgement.


----------



## darkside (26 April 2009)

Bevo, so funny , but alas so true, and my friends were up the front of that boat , with about 2million reasons to cry about it going over that waterfall.


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## bunyip (26 April 2009)

Solly said:


> Trevor, when things were going pear shaped with Storm and obviously not retrievable, a direct quote to me was "Don't worry Emmanuel with sort it all out". It was an almost "religious" belief that all will be ok.
> Maybe a delusional and unrealistic stance, but still a very powerful force when basic beliefs are being challenged.




Judging from some of the questions that appeared on the Cassamatis website, there were still some who thought Manny would sort it out even after the whole show had fallen off the cliff!


----------



## Solly (27 April 2009)

*"Broken record"*

"It is almost six months since the discovery of Storm Financial's troubles and the blame game continues to be played."

More from Kate Kachor in Investor Daily

http://www.investordaily.com.au/6326.htm


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## Solly (27 April 2009)

Solly said:


> ............
> 
> Welcome Cereberus .............I'm also eager to get a truthful unbiased view of the events. My initial contact with the whole storm saga was a couple who have lost everything and are now trying to buy their house back from the bank.
> 
> I believe I endeavour to keep an unbiased open mind about the whole event. Next time you speak with the principals can you ask why their research area and software couldn't pick up the downward market movement and execute appropriate actions in a timely manner to protect the clients and save them from harm.............




Maybe Cereberus you can add clarity to this as well, which I believe was from the Storm website. How is it possible with all the "behind the scenes" analysis and monitoring, why weren't actions put in place to pick up the market changes and implement suitable actions to preserve capital, investments and savings of the clients. ?


----------



## Smiley (27 April 2009)

The answer is simple - EC believed that the banks, specifically CB would carry the investors - even those with hundreds of thousands of dollars of negative equity.  He knew who they were and where the clients in margin call were and just assumed that the banks would not shut them down.  In the last few months he was shocked that the same bank shut down his line of credit and credit cards so the ego must be in the way of common sense.


----------



## Solly (28 April 2009)

*"Liquidators sell Storm Financial’s Margate land"*

"THE block of land that was to be home to the Storm Financial office is for sale, after liquidators were appointed to wind up the failed company. 
The 3249sqm block of land on Oxley Ave, Margate, is for sale with real estate agency Knight Frank. 
Offers for the parcel of land will be accepted until April 29."

"Mr Jelich said the actions of the Storm owners were ``reckless’’ and ``irresponsible’’ and said he was working to come up with a solution to finding compensation for those stung."

Full story here;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/liquidators-sell-storm-financials-margate-land/


----------



## Solly (29 April 2009)

*"Slater & Gordon pursue ANZ Bank"*

"LITIGATION giant Slater & Gordon is suing the ANZ Bank for allegedly recommending clients to invest in a Basis Capital hedge fund that collapsed, owing investors $320 million"

"The litigator is suing ANZ for negligence, misleading and deceptive conduct, and breach of contract, claiming the Basis investment was not appropriate for the "personal circumstances, risk profile and investment objectives"

Although not related to Storm, it might give the Stormies who read this thread an example of what S&G are doing in other cases....

Here's the story by Anthony Klan in The Australian;

http://www.theaustralian.news.com.au/story/0,25197,25401548-643,00.html


----------



## GumbyLearner (29 April 2009)

Has any court date been set as to Mr.Cassimatis yet?

I vividly remember that Skase left the country and a group of ex-SAS retirees offered to go over to Majorca and extract him. I hope this never comes to that.


----------



## chrisgee (29 April 2009)

Garpal Gumnut said:


> It is probably useful to have a summary, now that we have everyone at the table, including some of Manny's minions in the last few days.
> 
> On reading all the posts again this is my summary.
> *
> ...




ok i agree about not being a sophiscated investor not everybody thought that the market wouild go down like it did but werent the people supposed to be protected from any problems?  im not so angry now as we are making the best of what has happend. i have had some very sleepless nights thinking about all of this. all most want is keep thier house,a roof over thier heads i hope slater and gordon will help get something back. i know many people are trying to help which is good. i hope the investigators get to the bottom of what happened i suppose thats all we can hope for. i still want to see justice done so this can never happen again to anybody else.


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## Mr J (29 April 2009)

> i still want to see justice done so this can never happen again to anybody else




And what would that justice be? It will certainly happen to many other people many times in the future. It's human nature, and as one of the letters said, how do you protect people against themselves. They're as much to blame as anyone, as they ultimately made the decision.


----------



## Judd (29 April 2009)

> Originally Posted by Garpal Gumnut
> It is probably useful to have a summary, now that we have everyone at the table, including some of Manny's minions in the last few days.
> 
> On reading all the posts again this is my summary.
> ...




I've re-read a number of these pages.  While I still hold the view that re-mortgaging one's home, especially when retired, or cashing in superannuation, to gear into the sharemarket is just plain dumb as well as being highly risky, it is, nevertheless, be a very stressful time for those involved and who have lost, essentially, their life's work.  Not good.

To me, it does seem likely that Storm's clients signed over to the FP's a discretionary trading authority for the margin loans since the client's were having great difficulty in directly selling shares before they went deeper into margin call.  I am aware that there are two different sorts of margin loans, one directed by FP's and one directly under the control of the sharemarket investor.  Seems Storm got people to sign up for the former.

The other thing that strikes me as very odd is that Storm did not seem to have anything on offer except gearing.  No allocated pensions, no estate planning advice, no accumulation plans for superannuation, no advice on asset allocation.  Nothing except gearing.  Yet they were a member of the Financial Planning Association and that body apparently did nothing to bring that member into line?  Now that is really odd, code of ethics and all to which all financial members of the FPA are expected to adhere.  Maybe the lawyers should take a look at the FPA and ask a few pertinent questions.

Bet the FPA is now running around like a headless chook trying to justify itself (or rather distance itself) in relation to Storm.

Ah well, we will have Committees of Inquiry, recommendations will flow, regulations will be enacted and then..........history will be forgotten and future little fish will be devoured by sharks.  And then we will have a Committee of Inquiry, recommendations will flow................

Sad but it's true.


----------



## Soft Dough (29 April 2009)

I know people who were wiped out by cassimatis.

They were brainwashed into thinking that they had an understanding of the market by a very slick salesman.

They were guilty of failure to accept any common sense approaches to investment such as diversication and understanding that gearing magnifies losses.


----------



## shibby (29 April 2009)

Soft Dough said:


> I know people who were wiped out by cassimatis.
> 
> They were brainwashed into thinking that they had an understanding of the market by a very slick salesman.
> 
> They were guilty of failure to accept any common sense approaches to investment such as diversication and understanding that gearing magnifies losses.




Well this is how stupid I am - I thought I was diversified
Real estate; my home, (mortgaged, but still real estate) 
Cash; $50,000 - $100,000 so called dam account for my $37,000 per annum drawings and my $3000 per month mortgage, please note $37,000 per annum not $100,000 as someone keeps referring to. (The $100,000 per annum was the imaginary figure that storm/banks (take your pick made up to get our loans approved by the banks), 
Portfolio of shares; spread over technology, industrials and resources. 
I thought I had it covered. 
NaÃ¯ve, stupid, inexperienced that’s why I was with a financial planner.  
What I didn’t count on was Storms greed, not my greed. 
What I didn’t count on was the lies.
What I didn’t count on was that they would not cash us up until things improved, despite numerous requests.
Therefore NaÃ¯ve, stupid, inexperienced.


----------



## Soft Dough (29 April 2009)

shibby said:


> Well this is how stupid I am - I thought I was diversified
> Real estate; my home, (mortgaged, but still real estate)
> Cash; $50,000 - $100,000 so called dam account for my $37,000 per annum drawings and my $3000 per month mortgage, please note $37,000 per annum not $100,000 as someone keeps referring to. (The $100,000 per annum was the imaginary figure that storm/banks (take your pick made up to get our loans approved by the banks),
> Portfolio of shares; spread over technology, industrials and resources.
> ...




I agree, you were conned. They preyed on people like you.

but in essence, any diversification you had was negated by the fact that you were ridiculously over-geared.  Did you never think or know that when the market was falling, that you were losing money faster than anyone else ?

Because I can sure tell you that when the market was rising, the people in Storm had the knowledge that they were making money faster than everyone else.

For example - the "dam" concept was a money making scheme.  I knew people that had 300k in the "dam" when they could have had 100k and had a 200k less loan.  Everything Cassimatis did was for the maximum return for himself. The product that he sold you was a very effective money generating tool for both of you, which had the added kicker of no risk for him.  That is why there was a 1 size fits all approach, because that 1 size fit him very well.


----------



## Solly (29 April 2009)

*"Lambert hits out at licensing failures"*

"Count chairman Barry Lambert has pointed the finger at Australia’s financial services licensing system as the biggest impediment to a safe environment for investors."

"Lambert said, for example, that failed financial planning group Storm Financial “shouldn’t have had a licence”, adding that “the licensing system is the problem"."


More here in Money Management by Amal Awad and Lucinda Beaman;

http://www.moneymanagement.com.au/article/Lambert-hits-out-at-licensing-failures/479016.aspx


----------



## Solly (30 April 2009)

*"Yesterday an investor associated with a Cairns-based church group paid $1.55 million at auction for the former Cairns offices of Storm Financial."*

More in The Courier Mail by Jeremy Pierce and Melissa Ketchell;

http://www.news.com.au/couriermail/story/0,27574,25404869-3102,00.html


----------



## Solly (30 April 2009)

*"Storm subsidiary faces million dollar claims
Directors left firm a rudderless ship: court"*

Victorian Families Retirement and Investment Group looks set to face multi-million dollar claims.

Story by Kate Kachor from Investor Daily;

http://www.investordaily.com.au/6376.htm


----------



## Solly (30 April 2009)

Cereberus said:


> Hi SJG1974,
> 
> A small addition to my original disclosure for clarity.
> 
> ...




*Cereberus,* it's been a week since we've heard from you. There are many who are eager to hear from you again.
Is it possible for you to give us a weekly update?


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## Solly (30 April 2009)

Storm's Townsville HQ is to be auctioned this morning, I wonder what gg's top bid will be? Garpal Inc will look pretty flash in the new digs......


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## Solly (30 April 2009)

Solly said:


> Storm's Townsville HQ is to be auctioned this morning, I wonder what gg's top bid will be? Garpal Inc will look pretty flash in the new digs......




*Storm's Townsville HQ passed in at $5m*
"A settlement is still possible by the end of today"

See ABC story here

http://www.abc.net.au/news/stories/2009/04/30/2557193.htm


----------



## Solly (1 May 2009)

*"Millions lost in sale of luxury Storm HQ"*

"THE luxurious Townsville head office of failed Storm Financial sold after auction for more than $5 million to a local businessman yesterday."

Story by Anthony Marx in The Courier Mail is here 

http://www.news.com.au/couriermail/story/0,23739,25409968-3122,00.html

_and _

*"Sold – $5 million buys house of Storm"*

"THE owner of one of Queensland's largest privately owned training and recruitment firms, *Val Llewellyn*, is the buyer of Townsville's most opulent office building."

Story by Tony Raggatt in the Townsville Bulletin is here;

http://www.townsvillebulletin.com.au/article/2009/05/01/51631_hpnews.html

(also see *STORM CLIENTS SUE BANKS* link in the story, some interesting comments after the article)


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## Garpal Gumnut (1 May 2009)

Solly said:


> Storm's Townsville HQ is to be auctioned this morning, I wonder what gg's top bid will be? Garpal Inc will look pretty flash in the new digs......




Its been sold.

I was too busy yesterday stocking up on food and grog for the Mt.Garnet Rodeo and Races this weekend to bother going.

5 mil yesterday was a fair price for the pile.

Although to be honest I agree with my fellow Townsvillian on another thread that we are set for another huge downtrend on the ASX, a big bear, so perhaps it may come on market for less in the not too distant future. I'm all cash at present.

I prefer punting on lovely lasses and the ponies rather than the market at present.

gg


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## Trevor_S (1 May 2009)

Garpal Gumnut said:


> Although to be honest I agree with my fellow Townsvillian on another thread that we are set for another huge downtrend on the ASX, a big bear, so perhaps it may come on market for less in the not too distant future. I'm all cash at present.




Always someone with an alternate view 

http://business.smh.com.au/business/bear-sees-light-at-the-end-of-the-cave-20090501-apec.html



> The star Australian economist over the past two or three years has been Morgan Stanley's Gerard Minack. He's the bear who cogently warned any who wanted to listen of the impending crash and the reasons for it.
> 
> This morning, as the international stock market rally turns eight weeks old, the bear is having trouble growling, daring to say that the low for the economic cycle is in sight.






> First, the focus on economic recovery means a focus on 2010 corporate earnings potential, taking the sting from the lousy 2009 results.
> 
> Secondly, "if the 2010 earnings forecasts are anywhere near correct, equities are cheap''.  And thirdly:
> 
> ...




Me, I have no idea one way or the other where the ASX 200 is headed short term  I am no seer...


----------



## chrisgee (2 May 2009)

Mr J said:


> And what would that justice be? It will certainly happen to many other people many times in the future. It's human nature, and as one of the letters said, how do you protect people against themselves. They're as much to blame as anyone, as they ultimately made the decision.





gee it must be really easy 4 you to say that.i expect that when i take my car for a service i'd expect the mechanic to know what he is doing. he has a certitfcate on the wall to say he can fix things. if he breaks my car i get him to fix it again or i sue him or i front up to him and we sort it out in some other way. i choose the mechanic so am i at fault?? get real. no difference to investing in storm they took the money said all would be ok, said they knew how to give people a future without being on a pensoin and relying on the government. thier way was the best way. they had all the diplomas and uni qualifiacations to say they were smart. i read they even helped to make a university course. so there, that was an indication of being smart and trust us attitude. we are doing our best to work through all of this and it aint easy.i just dont like people saying i should have been smarter, i was as smart as i could have been at the time. never trust anyone without double ,tripple checking them out first. this has been a hard sad stressful lesson for us. anybody got any suggestions to help us rather than bag us??


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## Trevor_S (2 May 2009)

chrisgee said:


> . anybody got any suggestions to help us rather than bag us??




There is pages of useful advice in here for you.  You seem to regard useful advice as someone taking the "p_ss".  What you seem to want is a way to get all (or most) your money back and be on track ? and put all (most ?) of the blame onto others ?  The best advice I can give to that is to stop thinking like that.  Your house is not the biggest single financial decision you will ever make.  The investment decisions you make with the million(s) of dollars you earn in a lifetime is.  People will research out the ying yang what car to buy but not so much with the millions they earn.

Here's my advice
1. Don't trust your money to FP's, this is your financial future you are talking about.  You have enough ability to turn a computer, join a forum and make a post, this ability equips you with enough acumen to probably not need them.  

2. Having Lawyers involved will bring a whole other world of hurt to you, this will drag on for DECADES, with the slim chance you might get a a few cents back in the dollar.  Be wary of white knights that say they have your interest at heart, this is what EC et al also said. They are there to make money out of you and your predicament,maybe with even the best intentions at heart (perhaps like EC) but none the less, your the one "paying"

3. Regardless of what you think about comparing things to doctors, mechanics etc and the fact they too have a bit of paper on their wall (you do know there are plenty of dodgy doctors and mechanics don't you ?) , Storm LIED to you, the market does not always go up, there are long periods of correction.  Warren Buffets bit of advice on that is free, if you can't survive a 50% fall, then don't buy.  You need to accept that you were taken in and move on.  If you want to get back into the market and invest, dollar cost average into a listed index fund, and use little or no leverage, will you make a motza like this, possibly not but you won't go broke either... and read read read.  If you want to retire without a gov't pension, be frugal, save hard, invest as above, do that for 30 years, then retire.   If time is no longer on your side, you will have the OAP as a safety net.  Never invest in anything  you don't understand.  I see references to people saying "how could I have been lent so much money for a margin loan".  This sends up alarm bells straight away, they had no idea how a margin loan works !!!!! WTF !!!!

4. and most of all, look after your mental health.. hard as that may seem.

and best of luck to you all.


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## chrisgee (2 May 2009)

Trevor_S said:


> There is pages of useful advice in here for you.  You seem to regard useful advice as someone taking the "p_ss".  What you seem to want is a way to get all (or most) your money back and be on track ? and put all (most ?) of the blame onto others ?  The best advice I can give to that is to stop thinking like that.  Your house is not the biggest single financial decision you will ever make.  The investment decisions you make with the million(s) of dollars you earn in a lifetime is.  People will research out the ying yang what car to buy but not so much with the millions they earn.
> 
> Here's my advice
> 1. Don't trust your money to FP's, this is your financial future you are talking about.  You have enough ability to turn a computer, join a forum and make a post, this ability equips you with enough acumen to probably not need them.
> ...





ok thanks for the advice its just hard at the moment, the impacts are high.yes i can use the internet thanks to the generosity of friends that let me logg on or when i have spare change at the mall. i know people say youve got to start again and many have done it before. but until its you that has to do it you never know what its like. mental health is very important the doctor wanted to us to have pills but im not doing that. im keeping active and occupied anfd now off to work to pay the bills and the loans. thanks to all who give that little bit of encouragment. we will never give up or give in


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## Glen48 (2 May 2009)

I had a bloke talk me into Gold warrants and ringing me every day asking if I could put more money in anyway Gold tanked and I lost a lot now he wants the same on the Down going long. I have realised because he was the team leader has a degree and works for a large company they know just as much as any man on the street and from now on I will trust my own judgements and read as much as I can.
 I am sure your gut feeling tells you more than any FP Tea reader.
GG I backed a race horse at Mt Garnet in the 70's at 10 to 1 it got in at 4.30pm


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## Farencue (2 May 2009)

Chrisgee
Im wondering how old you are?  If you are not near retirement age the good thing is that you still have time on your side to rebuild as Trevor said.

I dont mind sharing with you that I have been ripped off many times in my life,
always too trusting and naive to think that people DIDNT have my best interests at heart - especially when I was paying them.  Duh.
Although I never lost my house or owed the bank a lot of money via a margin loan, being scammed/ripped off is a horrible feeling.

I kept asking myself why me? 

Eventually I realised that not only was I too trusting and gullible but basically I was also lazy.  Never could be bothered wading my way through product disclosure statements or "terms and conditions", I even had trouble reading operating manuals for various equipment.  

I am an excellent reader but just found all the financial/technical lingo boring.
I was basically ignorant about financial matters as well, I remember getting sucked into an AMP fund years ago when I was young, I couldnt wait to get out of the advisor's office and go to the pub, it was soooooo boring the way he was going on and on about stuff I didnt understand.  

Years later I worked out that if I had put my money in a shoebox under my bed I would have had more in the box than in the AMP fund, my money was eroded by all the fees.  If I had bothered to learn about the "product" I wouldnt have touched it with a barge pole.

Another sucker story for you Chrisgee;  when I first started in my business I got scammed for a couple of thousand dollars - by fake invoicing and fake threatening legal action letters.  Again, I didnt do my homework - stupid me just paid up after they started phoning me 5 times a day threatening me.
Sure, I was under duress and actually quite scared of these people but it was me who was dumb by paying.  I should have looked at the government scamwatch site FIRST.

I am sorry you are in financial trouble by having faith in a CONMAN.  Please ask yourself what your part in it was so that you learn your lesson well.
Were you naive, gullible, greedy, too trusting, ignorant etc etc.....
Im not having a go at you, just trying to let you know you arent the first to be conned and certainly wont be the last.  All you can do is savvy up and get smarter, educate yourself so that you wont fall prey to the next spruiker.

In my opinion, it would be unwise for you to focus on the "justice" side of things by going with the herd with Slater & Gordon and expecting a miracle.  Do some research on them and the way they operate before you give them any of your money.
I highly doubt that the banks involved will be found to have done anything that is illegal, maybe unethical but not illegal.  If I am right you wont be seeing the money you lost returned to you by the banks.

It is a bitter pill to swallow, being conned, and of course it will take time for you to move on, just make sure you move in the right direction - towards educating yourself so that you have the freedom to make your own decisions and not follow the latest financial guru. 

Good luck Chrisgee.


----------



## Julia (2 May 2009)

Great comments by Trevor and Farencue.

Chrisgee, as you've seen from Farencue's story, you're far from alone in being conned.  I allowed this to happen too.

It was many years ago and I was poor at the time, lacked the confidence to invest in a very volatile share market at the time, retail deposit rates were low and I needed more income.

Friends (who had previously been heavily involved in the market) had switched to putting their capital in a solicitor's private mortgage scheme.   They'd used this for several years over a range of development ventures, always had the interest paid on time and their capital returned when the development was complete.

I contacted the solicitor.  Was sent a range of development options all of which were offering about 4% over the retail interest rate.  Now, I had misgivings about this but the documentation all seemed to stack up and the LVR in none of the ventures was more than 70%.  There were detailed valuations by a registered valuer.

Went ahead and invested most of my then available capital (not much by today's standards but a lot to me at the time).  The first two projects went fine - I received the interest every month on time and the capital back at the end.  The next one was the redevelopment of a building on a prime site in Surfers Paradise.  They sent photographs plus detailed plans of projected alterations and final outcome.  The usual registered valuations also were provided.

After a few months, the interest payment didn't arrive.  Contacted the firm.  Told - as you would expect - no problem, just a minor hitch.  Will all be fixed soon.   I never received any more interest.   The whole private mortgage scheme fell over, thousands of investors lost most of their money.
ASIC appointed Worrell's as liquidators and their fees absorbed what value was left when the various properties were sold.
Turned out the work was not even started on several of the schemes and all the registered valuations were complete rubbish.

There was much media activity for a while (similar to Storm) but eventually something else became more interesting. 
One investor who had lost several million attempted to get a class action established but in the end concluded it would be simply a way to lose more money.

 The solicitor was eventually prosecuted by ASIC.

So, Chrisgee, many of us have been conned.   I don't blame anyone but myself.  I knew the higher interest rate was a warning.   There's always a warning somewhere with cons.  You just have to be prepared to see it and act on it.

You will make your own decision about whether Slater and Gordon have your interests at heart or their own.  I'd just suggest you ask yourself why they should be "seeking justice" for you:  they're most certainly not a welfare agency.

Good luck.


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## Solly (5 May 2009)

*"Storm Financial Sells Melbourne Office at a Loss After Just 4 Months"*

"RECEIVERS for failed investment planning company Storm Financial have reaped just $5.7 million from the sale of a city-fringe office building, once earmarked to be the group’s Melbourne headquarters."

See more here by Marc Pallisco in RealEstatesource.com.au

http://www.realestatesource.com.au/Victoria/Storm-Financial-Sells-Melbourne-Office-at-a-Loss-After-Just-4-Months.html


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## chrisgee (5 May 2009)

Julia said:


> Great comments by Trevor and Farencue.
> 
> Chrisgee, as you've seen from Farencue's story, you're far from alone in being conned.  I allowed this to happen too.
> 
> ...





Thanks everybody for the posts it is great to read them. i suppose its hard to come to terms to what has happened this is the time of life where the family sholud be having an easier time rather than working like 20 year olds starting out again. nothing can change what has happened so we will just continue on making the best of wots happened. i am just very untrustworthy of people now. who is really wanting to help and who is just in it for themselves.
i read in another post were mr gg is asking where the cassimatises are , i would like to know too, why did they present themseleves as the people to trust your life savings with and more and now they are no where to be seen. they were always very vocal before like in thier adverts. why havent we heard thier side and why is nothing happening? i dont know who is to balme for the world financial crisis but surely the little ordinary person shouldnt bear the brunt of all of this


----------



## Soft Dough (5 May 2009)

chrisgee said:


> why did they present themseleves as the people to trust your life savings with and more and now they are no where to be seen. they were always very vocal before like in thier adverts. why havent we heard thier side and why is nothing happening? i dont know who is to balme for the world financial crisis but surely the little ordinary person shouldnt bear the brunt of all of this






1. they wanted you to support them get their company back so they could make more money for themselves ( and might have just wanted to strip the company of more funds )

2. It was the little ordinary person who contributed more than their fair share to the crisis by borrowing too much to pay for housing, and consuming at a greater pace then they could support.


----------



## darkside (5 May 2009)

[mr gg is asking where the cassimatises are , i would like to know too, 


Perhaps Cerebrus could shed some light on that for us, we were told that it was all going to become clearer in the weeks to come , well they have come and past, and unfortunately Cerebrus, who promised so much has delivered , well , need i explain.


----------



## Farencue (5 May 2009)

chrisgee said:


> *i would like to know too, why did they present themseleves as the people to trust your life savings with and more and now they are no where to be seen.*




Hi again Chrisgee

Please look at the question you have posed above.  Again, I do not wish to be offensive to you.  Everything I say to you does not come from a motive to put you down. Ponder the question for a while and I would be very interested in what YOU come up with as an answer.  This is your first step towards empowerment.  A lot of us here know the answer to your question, but as I suggested you need to educate yourself.  If you get stuck coming up with an answer yourself then please ask the question of the forum again.

*they were always very vocal before like in thier adverts. why havent we heard thier side and why is nothing happening?*

More thinking and research for you to do in empowering yourself Chrisgee:
1)Why do you think these people were vocal in their adverts?

2) What do you think their side could possibly be?  That the banks are mean and nasty?  Did the banks do anything ILLEGAL in your case?

We did in fact hear their side - do you recall what their side of the story was?
Their excuse is a "black swan event".  Google that term and decide for yourself if that is in fact what happened.

*i dont know who is to balme for the world financial crisis but surely the little ordinary person shouldnt bear the brunt of all of this*

1) The question is not who but what is to blame for the world financial crisis.  It is not one almighty powerful godperson pulling strings.  It is a culmination of events, obviously not good ones.  You can easily find information on this or ask somebody on here for a simpler explanation if you get overwhelmed by all the lingo.
2) We are all little ordinary persons Chrisgee. (except maybe Mr gg)
Together we are a collective of little ordinary persons.  It affects all of us, some more so than others, depending on the financial decisions they have made and the position they are in.

I understand you may not be 20 and have your whole lifetime ahead in which to regain your finances and Im sorry you are in that position.

Who are you getting advice from now to salvage what you have left and to rebuild financially?

I understand this has made you not trust people, I have been through that myself.  This is why you need to get on the front foot and get clued up about scams, con men and the bastards of the world.  Remember, to them you are not a person but a mark, a target.  They only care about themselves.

There are no dumb questions, only ones that you dont know the answer to yet so ask, ask, ask.  
You will recover from this, you will trust again but hopefully next time it will be on your terms.

All the best.


----------



## Solly (6 May 2009)

*"Storm Financial tales of heartbreak – 'We have lost it all"*

"THEY were self-funded retirees, debt free, with their own home, four mortgage-free investment properties that were generating income, a 2ha block of land, $973,000 in savings, $78,000 in shares and $150,000 in superannuation."


Story by Lendl Ryan in The Townsville Bulletin is here;


http://www.townsvillebulletin.com.au/article/2009/05/06/52261_hpnews.html


Also have a look at the latest submissions to the
*Inquiry into Financial Products and Services in Australia* at;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm


----------



## Judd (6 May 2009)

Solly said:


> *...self-funded retirees, debt free, with their own home, four mortgage-free investment properties that were generating income, a 2ha block of land, $973,000 in savings, $78,000 in shares and $150,000 in superannuation.*



*

"Our dream was to enjoy our lives, fund ourselves and still be able to provide for our children with a legacy to help their futures," they said.

And the assets they held wasn't enough???!!!  WTF!

$$$$ signs in their eyes, aka greed, although they will not admit to that.  And a supposed businessman to boot.  The $1.2m+ in cashable assets would have been enough Wow factor for most.

No sympathy.*


----------



## pilots (6 May 2009)

Judd said:


> "Our dream was to enjoy our lives, fund ourselves and still be able to provide for our children with a legacy to help their futures," they said.
> 
> And the assets they held wasn't enough???!!!  WTF!
> 
> ...




It all comes down to GREED, nothing more, nothing less, GREED.
Now they blame every one but them self, no sympathy here.


----------



## Quincy (6 May 2009)

> THEY were self-funded retirees, debt free, with their own home, four mortgage-free investment properties that were generating income, a 2ha block of land, $973,000 in savings, $78,000 in shares and $150,000 in superannuation.






> "We had no grand plans for five-star luxury or limitless holidays, expensive cars, houses or extravagant living, simply to live comfortably and by our own means.






> "Our dream was to enjoy our lives, fund ourselves and still be able to provide for our children with a legacy to help their futures," they said.




Seems to me that they had already achieved their goal prior to their decision to invest in Storm Financial.


----------



## Julia (6 May 2009)

Makes you wonder how they succeeded in achieving the level of assets they already had that they could be so stupid.

I'll never understand that kind of pure greed.


----------



## darkside (6 May 2009)

Julia said:


> Makes you wonder how they succeeded in achieving the level of assets they already had that they could be so stupid.
> 
> I'll never understand that kind of pure greed.




Julia , good it wasn't just me that thought that, i also like the line "Will we see justice served?" , well yes it has been served, they have learn't a very valuable lesson, and perhaps realise that " not all that glitters is gold" .


----------



## nomore4s (6 May 2009)

Julia said:


> Makes you wonder how they succeeded in achieving the level of assets they already had that they could be so stupid.
> 
> I'll never understand that kind of pure greed.




I was thinking the same thing - smart enough to get that far in front and then dumb enough to put it all on the line like that.


----------



## Farencue (6 May 2009)

Im sure the tabloid papers just look for the dumbest people to write about.
Where is the shock value if someone who was pragmatic about gambling simply shrugged their shoulders and said **** happens?

Makes me wonder if the people mentioned in the story would have bet the worth of their assets in a casino?  Me thinks not.

Hmm, if my business ever fails and I cant repay my business loan maybe I could just bleat to the media about seeking "justice" and those nasty banks.


----------



## Solly (6 May 2009)

*"The gagging of Storm"*

See an article by Mark Weir Co Chairman of the Storm Investors Consumer Action Group Inc (SICAG).

Mark writes;

"......on Wednesday 15 April I was contacted by that person who confirmed that ASIC had imposed a restriction on Storm prohibiting them from engaging with their clients. The reason for this prohibition was that ASIC had become aware that Storm were advising their clients NOT to pay their negative equity debt to Colonial  and it was their considered opinion that this could be of further detriment to their circumstances through having interest accrue on the debt. I am compelled to say at this point that this reason is spurious if not outrageous" 

The full text is currently on the home page of SICAG at;  http://sicag.info


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## Garpal Gumnut (6 May 2009)

Solly said:


> *"The gagging of Storm"*
> 
> See an article by Mark Weir Co Chairman of the Storm Investors Consumer Action Group Inc (SICAG).
> 
> ...




The SICAG site never seem to have a bad word to say about Manny Cassimatis.

Maybe they know something that the AFR, Australian and most Investment sites don't know.

gg


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## Solly (7 May 2009)

*This link relates to the Slater and Gordon Class Action with regards to Storm Financial.*

http://www.slatergordon.com.au/pages/class_actions_stormfin.aspx

I found their Briefing Note, Frequently Asked Questions & Client Questionnaire to be quite interesting and may be of benefit and interest to others.


----------



## Solly (7 May 2009)

Cereberus said:


> Hi SJG1974,
> 
> A small addition to my original disclosure for clarity.
> 
> ...




*Cereberus*, it's been another week and we still haven't heard from you. 
I believe that there are still many who welcome your offer to keep us informed and are eager to hear from you again.
Any updates for us?


----------



## Solly (7 May 2009)

Solly said:


> *"The gagging of Storm"*
> 
> See an article by Mark Weir Co Chairman of the Storm Investors Consumer Action Group Inc (SICAG).
> 
> ...




And here's Kate Kachor's comment in Investor Daily;

*"Storm advisers gagged over margin calls"*

"Regulator enforces restriction
Storm Financial advisers were forbidden to contact their clients just weeks before the firm faltered."

http://www.investordaily.com.au/6423.htm


----------



## SJG1974 (7 May 2009)

Garpal Gumnut said:


> The SICAG site never seem to have a bad word to say about Manny Cassimatis.
> 
> Maybe they know something that the AFR, Australian and most Investment sites don't know.
> 
> gg



Will be interesting to see if Cereberus takes the same line when he/she reveals his/her knowledge of the inner workings of this mess that has been created.


----------



## Smiley (7 May 2009)

Having talked to and counselled many - ex-storm clients, 'greedy' is the last label I would use . . . possibly trusting and naive in ways; but not avaricious.

Humans are not motivated by one thing and while most wanted to improve their funds at retirement and some even planned to leave their children/grandchildren a small nest egg, I have not found ex-clients with the past urge to just hoard or accumulate for the sake of being rich . . . except maybe this is where we could talk about Manny.  

It is no use to tell some of you to lay off as anyone can post on a forum like this and I know that people get off on being hoiler than thou and looking down on others - you are demonstrating it over and over again.  

I have found ex-clients to be taking responsibility for their actions, knowing they trusted the wrong people and acknowledging they have learned lessons. 

They don't want to be bailed out - not suggested in any of the submissions; but there are important changes needed in the financial advising systems and lending practices.


----------



## Trevor_S (7 May 2009)

Smiley said:


> but there are important changes needed in the financial advising systems and lending practices.




I disagree, if you do that people will put even more faith "in the system" much like people put their faith "in the system" now.

You can't legislate against trust and naivety on the one hand and con artists on the other hand, all you do is make it harder for the majority of genuine poeple on both sides.  Hell, you need to hire a lawyer now to try and decipher a loan contract, most people never read a PDS etc etc  

IMO, stop trying to add complexity via legislation, realise that's the wrong tack and undo some of the stupidity done in the past that tried the exact same thing you (and others) recommend, that does nothing except add complication.  Work towards ensuring personal responsibility through education.

PS "greed" is relative


----------



## chrisgee (7 May 2009)

Smiley said:


> Having talked to and counselled many - ex-storm clients, 'greedy' is the last label I would use . . . possibly trusting and naive in ways; but not avaricious.
> 
> Humans are not motivated by one thing and while most wanted to improve their funds at retirement and some even planned to leave their children/grandchildren a small nest egg, I have not found ex-clients with the past urge to just hoard or accumulate for the sake of being rich . . . except maybe this is where we could talk about Manny.
> 
> ...





yes i agree it wasnt greed it was just wanting to draw a modest amount to live on and leave something for the family for the future.


----------



## carey ramm (7 May 2009)

Fed Govt has announced that margin lending will now be covered by the new national consumer credit protection bill - this is a positive move from the Storm fiasco.

Had it been round 2 years ago we would not have the destruction from Storm.

It is cold comfort to the Storm Investors but at least there are some positives emerging from the mess and the government is certainly responding to the issue - Now!!!

Link to the press release

http://www.treasurer.gov.au/Display...09/051.htm&pageID=003&min=njs&Year=&DocType=0


----------



## Trevor_S (7 May 2009)

carey ramm said:


> Had it been round 2 years ago we would not have the destruction from Storm.




Yes we would have.  People will continue to fall for snake oil salesmen with charm and con artists regardless of the law.  It's been happening from time immemorial, the only difference these days is we don't kill the perpetrators.

The only result is more redtape (I doubt many Storm victims read the no doubt 100's of pages of drivel that was plonked in front of them already and this will add another dozen pages) and complication for all of us



carey ramm said:


> It is cold comfort to the Storm Investors but at least there are some positives emerging from the mess and the government is certainly responding to the issue - Now!!!
> 
> Link to the press release




There is a thread discussing it here

https://www.aussiestockforums.com/forums/showthread.php?t=15398


----------



## Julia (7 May 2009)

carey ramm said:


> Fed Govt has announced that margin lending will now be covered by the new national consumer credit protection bill - this is a positive move from the Storm fiasco.
> 
> Had it been round 2 years ago we would not have the destruction from Storm.



Carey, your suggestion above promotes the myth that people do not need to take responsibility for their own research and/or decisions.

We need to encourage more personal responsibility, not less!

Already we have far too much legislation attempting to protect people from themselves.


----------



## Garpal Gumnut (7 May 2009)

Julia said:


> Carey, your suggestion above promotes the myth that people do not need to take responsibility for their own research and/or decisions.
> 
> We need to encourage more personal responsibility, not less!
> 
> Already we have far too much legislation attempting to protect people from themselves.




Best comment so far on the thread Julia.

The Stromers put their trust in Manny and Co.

If they had done their own research on ASF they would probably be down but not in negative equity.

No word from Manny.

The SICAG site still seem disinclined to criticise him, so the victims go down the path of past victims.

Plus Ã§a change, plus c'est la mÃªme chose.

gg


----------



## Mr J (8 May 2009)

Julia said:


> We need to encourage more personal responsibility, not less!
> 
> Already we have far too much legislation attempting to protect people from themselves.




Completely agree. Remove all safety labels!


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## Solly (8 May 2009)

SUPREME AND DISTRICT COURTS BRISBANE 
Friday 8 May 2009

APPLICATIONS TO COURT

10:00 AM 

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION -V- CASSIMATIS & others


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## carey ramm (8 May 2009)

Julia

this is not about protecting people from themselves - it is about protecting people from predatory lending practices. 

what this has done is require the same degree of diligence from a lender for a margin loan that they must provide for a home loan - so how can this be a bad thing?

quite simply margin lending is now a regulated loan as opposed to an unregulated loan - this is a very good move and long overdue. quite simply history has shown that the oversight of margin lending was defective and the government quite rightly too has recognised this and has acted - to place it in your words they are "taking responsibility".

i cant quite get over the continual bleating on here for storm investors to "take responsibility" - investors that are in complete financial ruin are most certainly taking responsibility - they are living their poor decision every minute of every day. many are out there trying to do whatever they can to put food on the table and pay the bills - i know some storm victims are doing 2 and 3 jobs just to keep their head above water.

i am yet to come accross a storm victim asking for a handout. most are mad, very mad about their situation and the deception they suffered. many have publicly spoken out (and that can be very embarressing) and pushed for the parliamentarty enquiry with their main objective being that they didnt want to see anyone in the future in the position they were in. most wanted to stop other people from making the same mistakes they had made.

in short they have choice but to take responsibility.


----------



## chrisgee (8 May 2009)

carey ramm said:


> Julia
> 
> this is not about protecting people from themselves - it is about protecting people from predatory lending practices.
> 
> ...




yes yes yes carey this is exactly as it is. do we wish that things were the same as 12 mths ago damn sure we do. we are living day and night with thuis decision. are we working our ar_ses off ? you bet we are. i have friends who have offered  to buy food, give money to pay car rego, repairs etc. but to date have not accepted ant hand outs,. we are mad -mad at our ourselves , mad at storm (a word i have trouble saying these days). mad a banks - mad at the advisers. being mad and reading the positive things here has pushed us along into making our situation better. we will come out of this- we will keep fighting until our lives are better- by better i mean have our own roof over our heads- not being chased by banks- not being scorned by faceless poeple on the internet- we are real people going through real pain- but we are absolutely determined to do what ever it takes to make our lives better- i never want to see any other fellow aussies go through wot we are going through- call us dumb silly niave or wot ever but we are going to come out of this wiser stronger and harder- may be one day mr gg will look to one of us for some wisdom. live long and .....never let any one put you down.


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## Sir Osisofliver (8 May 2009)

carey ramm said:


> Julia
> 
> this is not about protecting people from themselves - it is about protecting people from predatory lending practices.
> 
> ...




Carey let me ask you a couple of simple questions.....

a) If the Storm clients portfolio's were protected with a simple put option in MARCH 08 (When it was bloody obvious to Blind Freddy that things were going pear shaped in the Markets)... how many of them would have gone down the gurgler?  

b) If a properly risk weighted reserve was in place for the margin lending portfolio... how many of them would be in this position?

This issue is not one of "predatory lending practices", but a complete and total lack of risk management practices. I frequently use the double debt strategy that is talked about in that article - but I use it in a manner that is *safe* and not the freaking cowboy approach that Storm employed. 

Now the industry gets more regulation (instead of more *education*) and I have to wade through more red tape to do the same thing.  More red tape = less time per client - so to make the same amount of money I was making last year - I need to have richer clients.  Which means I target my services towards rich people - and the Mum and Dad investors get left to the tender mercies of "Dodgy Brothers 'R us" financial services group.


Cheers

Sir O


----------



## Garpal Gumnut (8 May 2009)

Sir Osisofliver said:


> Carey let me ask you a couple of simple questions.....
> 
> a) If the Storm clients portfolio's were protected with a simple put option in MARCH 08 (When it was bloody obvious to Blind Freddy that things were going pear shaped in the Markets)... how many of them would have gone down the gurgler?
> 
> ...




Sir O, 

As usual you are an expert at pointing out the elephant in the room.

The SICAG committee seem unable to grasp this fact.

The Cassimatises had no repeat no, plan in place for a bear market.

And SICAG still do not in any way criticise them.

I've advised my stormer mate to avoid SICAG or any of their future meetings.

There is something not right there.

Manny/Cerebus where are youuuuuuuuuuuuuu?

Go to sicag.info and if you can avoid the money spider all their spin on this is on there.

gg


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## Mash (8 May 2009)

So GG you are the bank plant on this site..... SICAG getting too close to the bone are they.... you seem to spend a lot of time attempting to discredit them.... yes they have become bothersome to the banks haven't they...and FYI... they are ants on the website.... thought you could at least tell what an ant looked like with all your worldly knowledge. We decided the ant symbol was indicitive of our fight. One could be stomped on and flicked away however a few thousand ants might just be able to keep attacking long enough to see some result.
IMHO there is no use contiuing to rant at EC & co we all know they were snake oil salesman who were aided and abbetted by many others including the banks. We will leave EC to the authorities and continue to fight the banks who are intent on picking over the rotting carcasses of the storm survivors.


----------



## Garpal Gumnut (8 May 2009)

Mash said:


> So GG you are the bank plant on this site..... SICAG getting too close to the bone are they.... you seem to spend a lot of time attempting to discredit them.... yes they have become bothersome to the banks haven't they...and FYI... they are ants on the website.... thought you could at least tell what an ant looked like with all your worldly knowledge. We decided the ant symbol was indicitive of our fight. One could be stomped on and flicked away however a few thousand ants might just be able to keep attacking long enough to see some result.
> IMHO there is no use contiuing to rant at EC & co we all know they were snake oil salesman who were aided and abbetted by many others including the banks. We will leave EC to the authorities and continue to fight the banks who are intent on picking over the rotting carcasses of the storm survivors.




Believe it or not mate, but I hate banks more than you do.

What gets up my nose is your crawing position on your site.

There is is not one comment about Storms deriliction in their management of their clients portfolio.

Manny laughs, SICAG has money spiders on their web, and the whole cycle will repeat itself.

Wake up mate.

gg


----------



## Mash (8 May 2009)

at least do me the courtesy of reading the post before you reply....
oh I am not your mate either..darl....


----------



## Julia (8 May 2009)

I suppose we all have our own attitudes to life and its vicissitudes.

Earlier on the thread I described how I'd lost money some years ago, the amount being really significant to me at the time. 

  I'd failed to take notice of a warning sign in the form of an interest rate that was decidedly above the market rate.

Did anyone force me to sign up?    No.

Did I object while the good money was coming in?   No, absolutely not.

Did I feel foolish when it all fell over?   You bet, and very sorry I'd exposed myself to the risk.

But it simply didn't occur to me to go on to all and sundry about how I'd been victimised.    My choice.  My responsibility.  My result.

Nothing to do but move on and learn from the lesson.


----------



## Sir Osisofliver (8 May 2009)

Julia said:


> I suppose we all have our own attitudes to life and its vicissitudes.
> 
> Earlier on the thread I described how I'd lost money some years ago, the amount being really significant to me at the time.
> 
> ...




Now Imagine that 1000 other people were involved, that you started an action group, that you complained loudly through the press and now the Government have decided that the style of unlisted fund you were invested in must now be governed by the APRA/ASIC/ASX and that if you wanted to invest in that style of product in the future you'll have an extra 30 pages of disclaimer..... would it have made *any* difference whatsoever to your investment decision?  No you trusted the adviser involved.  Once again it's not the product or asset class involved, it's how it's used/promoted and the ignorance of the audience involved

Sir O


----------



## Garpal Gumnut (8 May 2009)

Garpal Gumnut said:


> Believe it or not mate, but I hate banks more than you do.
> 
> What gets up my nose is your crawing position on your site.
> 
> ...






Mash said:


> So GG you are the bank plant on this site..... SICAG getting too close to the bone are they.... you seem to spend a lot of time attempting to discredit them.... yes they have become bothersome to the banks haven't they...and FYI... they are ants on the website.... thought you could at least tell what an ant looked like with all your worldly knowledge. We decided the ant symbol was indicitive of our fight. One could be stomped on and flicked away however a few thousand ants might just be able to keep attacking long enough to see some result.
> IMHO there is no use contiuing to rant at EC & co we all know they were snake oil salesman who were aided and abbetted by many others including the banks. We will leave EC to the authorities and continue to fight the banks who are intent on picking over the rotting carcasses of the storm survivors.






Mash said:


> at least do me the courtesy of reading the post before you reply....
> oh I am not your mate either..darl....






Julia said:


> I suppose we all have our own attitudes to life and its vicissitudes.
> 
> Earlier on the thread I described how I'd lost money some years ago, the amount being really significant to me at the time.
> 
> ...






Sir Osisofliver said:


> Now Imagine that 1000 other people were involved, that you started an action group, that you complained loudly through the press and now the Government have decided that the style of unlisted fund you were invested in must now be governed by the APRA/ASIC/ASX and that if you wanted to invest in that style of product in the future you'll have an extra 30 pages of disclaimer..... would it have made *any* difference whatsoever to your investment decision?  No you trusted the adviser involved.  Once again it's not the product or asset class involved, it's how it's used/promoted and the ignorance of the audience involved
> 
> Sir O




Mash darl,

I must be blunt with you.

You have been sold a pup by Manny and Co.

You have lost heaps.

 You are not as bright as the average punter on ASF.

You may be able to recoup some losses from the banks involved with Storm, Macquarie, CBA and Bank of Queensland.
At the end due to you and those like you, Manny will keep his assets and like Lazarus arise again to skim darls and mugs like you again.

His Manny Cassimatis website is down but SICAG by ommision allow his tainted financial philosphy to live on.

Money spiders rule OK.

gg


----------



## Garpal Gumnut (8 May 2009)

From the sicag website





_
The gagging of Storm



Members will be only too mindful of those events leading up the destruction of our Investment Portfolios representing a lifetime's effort, sacrifice and labour.

You will all recall that during the period of volatility in the Share market in the last 3 months of 2008, there was not one among us who was not vitally concerned about the welfare of their Investment. It is also fair to say that we might have reasonably expected a Margin Call in accordance with our understanding of the processes which controlled our investment. This 'safety net', although not without attaching some pain, would have at the very least, salvaged a portion of our investment enabling us to live and fight another day. Maybe we would have been a bit financially battered and bruised - not unlike many millions of others who had followed Equities based Investments, but certainly not on life support as we find ourselves now.

It is now a matter for the historical record that the Investment model did not function according to our expectation, for reasons we are all in the process of determining, causing us all to be in the Financial devastation, emotional distress and hardship we are all experiencing today. 

Another issue associated with the above events which I would suggest to members is the singular most issue that, from my and other members' of the Committee experience, compounded enormously the shock, despair, anger and bewilderment felt by us all during that critical time, is that surrounding the inability of Storm Clients to remain in touch with their Advisers or the failure of Advisers to maintain contact with their Client. It is our belief that it was the 'vacuum' so created that contributed significantly to SICAG being as remarkably successful as it was in engaging with Storm clients and harnessing the combined strength of you all to embark on our campaign for justice.

I do not need to remind you of the emotional turmoil that existed in that period leading up to Xmas after out portfolios had been sold down. It was a time when most of all we needed answers and the support of our Advisers. There was much conjecture as to why this was not available- in the first instance it was thought that our advisers were deliberately avoiding all contact although there was also strong  evidence (although unsubstantiated at the time) to suggest that Storm had been prohibited from engaging with their clients by ASIC. This confusion persisted until the occasion of the inaugural meeting of SICAG on 20 January. When, in attempting to substantiate if ASIC had in fact delivered this directive to Storm, it was denied by the ASIC representative at the Meeting.

Clearly this did nothing to dispel the matter or the emotion is was causing. It wasn't until early March that further enquiries led to an email being sent to a key person within ASIC, identified as being able to clarify the matter. Then on Wednesday 15 April I was contacted by that person who confirmed that ASIC had imposed a restriction on Storm prohibiting them from engaging with their clients. The reason for this prohibition was that ASIC had become aware that Storm were advising their clients NOT to pay their negative equity debt to Colonial  and it was their considered opinion that this could be of further detriment to their circumstances through having interest accrue on the debt. I am compelled to say at this point that this reason is spurious if not outrageous. What of all the Storm clients who were with Macquarie and all others who were not sold down in negative equity or had other products under management by Storm. At a time when contact with their Advisers was of paramount importance, they were victimised by default. Furthermore I have not heard of anyone who was advised not to pay their debt. They might have been told to get a complete reconciliation before paying it and in any event, most clients could not have paid it even if they had wanted to- and still can't!

This restriction was enforced for the period from about the middle of December through the Xmas period. Members will be aware that from Xmas Eve Storm Offices, as is the usual practice, operated on a limited staffing arrangement. It should be made clear  that  has it has been confirmed that contravention of this restriction would have resulted in severe sanctions being imposed by ASIC on any Adviser found in breach of this directive.

Mark Weir,_


gg


----------



## Mash (8 May 2009)

gg 
you are so rude! Why is it ok for you to call me mate yet the darl comment is met with such a lambasting. Tsk tsk!!! Have a bit of a complex there !
Your comment will be treated with the contempt it deserves !:flush:

You really are hung upon on ec aren't you? Many ex clients have often agreed with the fact we were conned by him, I despise the man, but he would not have been able to carry out his abhorrent plans without the assistance of the fine upstanding institutions we are now pursuing. 

cheers mate


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## Soft Dough (8 May 2009)

Mash said:


> You really are hung upon on ec aren't you? Many ex clients have often agreed with the fact we were conned by him, I despise the man, but he would not have been able to carry out his abhorrent plans without the assistance of the fine upstanding institutions we are now pursuing.




It seems that one of the problems is that people were not reading what they were signing. It is not only the advisor's responsibility to explain every point, but the client's responsibility to ensure they understand every point.

eg the cases of income being much higher than in reality, these were signed off by the client.

I can understand how storm clients have to believe that the banks are to blame as that is their last hope, but in reality, it was the poor planning by storm and the client's neglect wrt understanding what they were getting themselves into that ultimately caused the problems, not the supplier of the abused vehicle.


----------



## SJG1974 (8 May 2009)

Where on earth are Manny and Julie?  Perhaps their crusade for justice has taken them to some far off place where there are no computers or internet.

Surely they can clear up this mess for us.  I want to hear their side of the story on how those nasty banks made them take a sausage machine approach to preparing financial strategies and how those nasty banks forced Storm to charge 7% up front and how those nasty banks are responsible for the lack of an exit strategy.  

Or maybe they can at least provide a feel good story or two about those wonderful holidays they took clients on.

Cereberus, do you know where they might be????  Can you shed any light on this for us?


----------



## Farencue (8 May 2009)

Mash said:


> gg
> I despise the man, but he would not have been able to carry out his abhorrent plans without the assistance of the fine upstanding institutions we are now pursuing.




Well Mash, I beg to differ.
The man would not have been able to carry out his abhorrent plans without people like you.

and Mr gg, I agree with you there is something definitely not right about the SICAG website.  The emotionally loaded language, the absence of criticism of Storm and "a person" from ASIC contacting Mr Weir on the 15th of April.  I did read a news article where Mr Weir was at a meeting with ASIC on I think the 16th April.  Its strange that meeting isnt mentioned on the website.  I will have to search for it again.  It doesnt add up thats for sure.


----------



## Soft Dough (8 May 2009)

SJG1974 said:


> Where on earth are Manny and Julie?  Perhaps their crusade for justice has taken them to some far off place where there are no computers or internet.




Nah, they have no clients to screw now that storm is officially dead, and they failed in recruiting clients to support their DOCA.


----------



## darkside (8 May 2009)

Farencue said:


> Well Mash, I beg to differ.
> The man would not have been able to carry out his abhorrent plans without people like you.
> Cheers




Thanks Farencue, you stole my line, i had it already worded and ready to go till i got to the bottom of the page and saw you had already beaten me to the post


----------



## bunyip (8 May 2009)

Mash said:


> gg
> you are so rude! Why is it ok for you to call me mate yet the darl comment is met with such a lambasting. Tsk tsk!!! Have a bit of a complex there !
> Your comment will be treated with the contempt it deserves !:flush:
> 
> ...




Good to see you getting into the 'mate' routine there Mash. Afterall, we're all mates in here.......aren't we?

I reckon you actually enjoy this thread and your clashes with GG, otherwise why would you keep doing it!


----------



## Garpal Gumnut (8 May 2009)

It is gratifying to hear that I am not alone in my suspicions of the SICAG agenda.

I will advise my mate to avoid their sausage sizzles in future.

gg


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## Farencue (8 May 2009)

ah sorry darkside!  Here's the article I was looking for.  

Storm investor group talks to ASIC
Sara Rich | April 17, 2009 
Article from:  The Australian 

AN action group representing the interests of former Storm Financial clients has been invited to assist the regulator in its investigations into the collapse of the financial planning firm.
The Storm Investors Consumer Action Group, which represents 1400 former Storm clients, met senior executives of the Australian Securities and Investments Commission in Brisbane yesterday *to discuss how they could work together. *
SICAG co-chair Noel O'Brien, who attended the private meeting with fellow chair Mark Weir, told ASIC deputy chairman Jeremy Cooper and financial services chief Tim Castle about the hardship former Storm clients were experiencing. 
"What we have collected over a period of time is information from our members as to the terribly desperate situation that they find themselves in, and ASIC is interested in understanding how bad that situation is and I think they have a better grasp of that situation today," said Mr O'Brien. 
*Contrary to a media report, the issue of the banks' alleged involvement in the collapse of Storm was not discussed at the meeting. * 

However, Mr O'Brien told The Australian that the investors' group believes the banks "have a lot to answer for". When the global financial crisis intensified last November, the Commonwealth Bank of Australia sold down $178million of client shares in order to meet margin calls because it said Storm's instructions had become inadequate to clear the calls. The investors' group believes hundreds of clients were unaware they were in breach of their loan conditions. 
"We believe the banks should have called on us for our margin calls and none of us ever got one," Mr O'Brien said. 
*The bank said yesterday Storm's clients had authorised the bank to make all margin call notifications direct to Storm.*


----------



## Mash (8 May 2009)

Hey softdough
those statements of 
"eg the cases of income being much higher than in reality, these were signed off by the client."
These were, I repeat (do you understand) these were not signed by the client they were accepted by the banks without any confirmation from the client.... HOW MANY TIMES DO YOU HAVE TO BE TOLD...... why do you think the banks are offering settlements and deals... they know they did not adhere to bank lending policy and are trying to divide and scare the older clients to try and bury all their wrong doing (stay in your house until you die then we'll sell it off...but in the meantime you are unable to pursue legal action against us 'cause they think the older ones will crumble under the pressure of their bully boy tactics) .... If you are going to offer opinion at least TRY and get the facts straight..


----------



## Farencue (8 May 2009)

Also, Im taking a punt in the dark here, but I reckon the Cassimatis' lawyers have possibly advised them to shut down their website.  If you go to the ASIC website and click on Storm Financial, there is a very interesting piece titled "letter to Mr and Mrs Cassimatis"

Also on ASIC website is the fact that ASIC commenced an investigation into Storm Financial on December 12th 2008.  Also public knowledge elsewhere is that the portfolios were sold down by Colonial in late November because nobody paid their margin calls (obviously because Storm didnt advise their clients)

From SICAG: _"Then on Wednesday 15 April I was contacted by that person who confirmed that ASIC had imposed a restriction on Storm prohibiting them from engaging with their clients. The reason for this prohibition was that ASIC had become aware that Storm were advising their clients NOT to pay their negative equity debt to Colonial and it was their considered opinion that this could be of further detriment to their circumstances through having interest accrue on the debt. I am compelled to say at this point that this reason is spurious if not outrageous."_

Gosh, I wonder if Storms advice to its clients at that stage was possibly *illegal* and thats why ASIC stepped in?  Im not sure why SICAG thinks it would be "spurious if not outrageous" if ASIC's reason really *was* because it was in the punters best interest to not accrue interest on the debt?  Sounds like something Mr Cassimatis would say in my opinion.

Anyhow, where's the evidence of this email sent by one of the top doggies at ASIC?  SICAG sure werent shy about putting up another letter from the bank re the Hardship Taskforce.  There is no proof such an email exists, and as I mentioned earlier if there was a meeting between SICAg and ASIC *the very next day* surely the hot topic would have come up?

Mr gg, I put it to you that SICAG is almost a carbon copy of Mr Cassimatis' rantings about "justice".
The language used is very similar and SICAG appear to have a very similar agenda of bashing the nasty banks.

I also love the disclaimer on the SICAG website.


----------



## Garpal Gumnut (8 May 2009)

Farencue said:


> ah sorry darkside!  Here's the article I was looking for.
> 
> Storm investor group talks to ASIC
> Sara Rich | April 17, 2009
> ...




Thanks Farencue mate,

It sounds as if SICAG are a one agenda force.

Get the banks.

They ignore the culpability of Manny Caassimatis and his mates over 20 years.

They will get done like a dinner in any court in this land

gg


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## Julia (8 May 2009)

Farencue said:


> *The bank said yesterday Storm's clients had authorised the bank to make all margin call notifications direct to Storm.*



So the Storm clients can hardly accuse the bank  of being at fault for failing to contact them directly.


----------



## Julia (8 May 2009)

Mash said:


> Hey softdough
> those statements of
> "eg the cases of income being much higher than in reality, these were signed off by the client."
> These were, I repeat (do you understand) these were not signed by the client they were accepted by the banks without any confirmation from the client.... HOW MANY TIMES DO YOU HAVE TO BE TOLD...... why do you think the banks are offering settlements and deals... they know they did not adhere to bank lending policy and are trying to divide and scare the older clients to try and bury all their wrong doing (stay in your house until you die then we'll sell it off...but in the meantime you are unable to pursue legal action against us 'cause they think the older ones will crumble under the pressure of their bully boy tactics) .... If you are going to offer opinion at least TRY and get the facts straight..



You accuse others of being rude.  Does it occur to you that your own remarks are rude, especially the capitals?

So could you please tell us, Mash, once and for all who did the apparent falsifying of the loan documents?

With thanks.


----------



## Farencue (8 May 2009)

Mash said:


> Hey softdough
> those statements of
> "eg the cases of income being much higher than in reality, these were signed off by the client."
> These were, I repeat (do you understand) these were not signed by the client they were accepted by the banks without any confirmation from the client....
> ...




Mash, all we have to go by is anecdotes by people who were conned and want to blame the banks (funny they dont blame Mr Cassimatis).  We havent seen any evidence for what you are saying.  We have seen no evidence on the SICAG website either, just very emotionally charged bank bashing.

My prediction is Mr Cassimatis will face criminal charges.


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## Farencue (8 May 2009)

Thats right Julia, the question for Mash is who falsified the documents?

Mash says the banks *accepted* unsigned documents.

*from whom* were the documents accepted Mash?


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## Mash (8 May 2009)

Farencue
with regard to your quote.
"The bank said yesterday Storm's clients had authorised the bank to make all margin call notifications direct to Storm. "


So if it's in print that makes it true...guess what?..... the banks are lying through their teeth...have you not heard of spin doctors...the PR department..they are lying ..... On one hand the lenders say it is your responsibility to monitor your investment and loan but should you ask them to cash in the portfolio to pay down the loan they insisted you deal through the advisor and would not take direction from the client.... Pray tell...how does one do both! This question is one the lenders choose not to answer... My bank has refused to supply my loan docs without a court order.....  what do they have to hide ?????


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## Soft Dough (8 May 2009)

Mash said:


> "eg the cases of income being much higher than in reality, these were signed off by the client."
> These were, I repeat (do you understand) these were not signed by the client they were accepted by the banks without any confirmation from the client....




Well who signed the forms then?

So what you are saying, is that all erroneous forms were not signed by the clients, and that these forms are still unsigned?



Mash said:


> If you are going to offer opinion at least TRY and get the facts straight..




Where do you get your facts from?



Mash said:


> My bank has refused to supply my loan docs without a court order.....  what do they have to hide ?????




Just go to your filing cabinet and get your photocopy out.


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## Farencue (8 May 2009)

and there lies the rub Mash.

You say that the banks say you are responsible to monitor your own investments yet to deal with your portfolio you had to go through your *advisor.*

If you signed over authority to Storm (which was also posed as a question which you havent answered yet) then they are acting on your behalf, but ultimately you should be aware of what they are up to on your behalf.

Have you obtained a court order?  The Freedom of Information Act should have provision for you but Im sure you have looked into that already.  Did you receive a letter from the bank stating you had to have a court order or is it because the whole matter is in ASICs hands now that you are unable to get a copy?  

I suspect it is the latter because it sounds as though you DID sign over authority to Storm to act on your behalf and so the copy of the loan documentation would have been in their possession, which of course is now in the hands of ASIC.

The rest of your rhetoric I gracefully will ignore.  If you would like to educate me on the FACTS then please feel free to supply the FACTS.  Anecdotes and rhetoric does not give me an education.


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## Mash (8 May 2009)

Farencue said:


> Thats right Julia, the question for Mash is who falsified the documents?
> 
> Mash says the banks *accepted* unsigned documents.
> 
> *from whom* were the documents accepted Mash?




From Storm without any input from the client....once again.. you have all been told this many many many times before...the banks were in bed with storm....  they accepted storm figures without checking their validity.... they got their bonus for " lender of the year".. do you actually think some little branch in Townsville had more "clients" coming through the door than a branch in Sydney or Melbourne... hellooooo.... now they are ducking for cover and saying we did nothing wrong... yes you did.... guilt by association with cassimatis...


----------



## Garpal Gumnut (8 May 2009)

Farencue said:


> and there lies the rub Mash.
> 
> You say that the banks say you are responsible to monitor your own investments yet to deal with your portfolio you had to go through your *advisor.*
> 
> ...




From this and other posts it appears that sicag.info credibiliy falls by the minute,

gg


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## Soft Dough (8 May 2009)

Mash said:


> From Storm without any input from the client




So the copies of these documents that the banks have are unsigned?


----------



## Julia (8 May 2009)

Mash said:


> Farencue
> 
> 
> So if it's in print that makes it true...guess what?..... the banks are lying through their teeth...have you not heard of spin doctors...the PR department..they are lying ..... On one hand the lenders say it is your responsibility to monitor your investment and loan but should you ask them to cash in the portfolio to pay down the loan they insisted you deal through the advisor and would not take direction from the client.... Pray tell...how does one do both! This question is one the lenders choose not to answer... My bank has refused to supply my loan docs without a court order.....  what do they have to hide ?????






Soft Dough said:


> Well who signed the forms then?
> 
> So what you are saying, is that all erroneous forms were not signed by the clients, and that these forms are still unsigned?
> 
> ...



Mash, so can you confirm that what you are saying unequivocally is that :

1.   Storm falsified the loan documents

2.   You did not at any stage sign agreement for Storm to act on your behalf which in turn would mean that,

3.   The bank were duty bound to contact you, not Storm, in the event of margin call

4.   You engaged in whatever you engaged in with Storm without ensuring you had a copy for yourself of *all the related documentation.*

If the above points are not correct, then it would be good if you could correct them so that we can be clear about what you are alleging.


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## Farencue (8 May 2009)

Julia

If those *are* the points Mash is making, then my prediction still stands.
Criminal charges will be brought against Storm and NOT the banks.

Mash, if you care to answer a few of the questions put to you I also have another one to add:  What is it SICAG will do for you that ASIC wont?

Also the answer to your question  _"Pray tell...how does one do both! This question is one the lenders choose not to answer..."_

I dont think its the banks not choosing to answer Mash, you cant do both, either you were in charge of whatever you were doing with your investments or Storm were.  I dont think you would be discussing this here if it _wasnt_ Storm who had the authority to act on your behalf.

Again, its terrible what has happened to the people who believed in Mr Cassimatis and his ilk.


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## Farencue (8 May 2009)

Mash said:


> From Storm without any input from the client....once again.. you have all been told this many many many times before...*the banks were in bed with storm....  they accepted storm figures without checking their validity....* they got their bonus for " lender of the year".. do you actually think some little branch in Townsville had more "clients" coming through the door than a branch in Sydney or Melbourne... hellooooo.... now they are ducking for cover and saying we did nothing wrong... yes you did.... guilt by association with cassimatis...




Ah Mash, silly me, I get it now.  Your argument is that the onus was on the banks to check figures supplied by licensed financial planners who are required to abide by regulations set down by ASIC, and who are also required to provide true and accurate information. I havent checked the regulations but I am presuming that falsifying documents is against the regulations.  I'll check on that and get back to you.

Of course the onus would never be on Storm to provide *non falsified* documents, although there is a very big chance ASIC might not think so.
Probably because it's illegal but what the hey...

Im thinking too Mash you are pretty involved with SICAG because you use "we" and so I also understand now why you defend them and their agenda.  Thats cool Mash, every dog has its day so they say!


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## Solly (9 May 2009)

*"When the truth is buried deliberately in the detail"*

"To disclose should mean to expose, to reveal, to allow the truth to be known. But in financial planning, disclosure now refers instead to impenetrable documents - reams of paper containing line after line of fine print."

"Graeme and Susan McDonald invested with the failed the Townsville financial planner Storm Financial. According to their submission, their aim was to pay their own way in retirement so they would not be a burden on the taxpayer."


See more by Ruth Williams in Business Day here in the SMH

http://business.smh.com.au/business/when-the-truth-is-buried-deliberately-in-the-detail-20090508-ay1o.html?page=1


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## Solly (9 May 2009)

*"Storm Financial founders ordered to return $2 million dividend"*

"STORM Financial founders Emmanuel and Julie Cassimatis have been ordered to return a contentious $2 million `dividend' they paid themselves in the dying days of the wealth adviser late last year."

"Those funds will now be used to pay the employee entitlements in full," Mr Buckby said.

Story by Tony Raggatt is here in the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/05/09/52705_hpnews.html


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## Solly (9 May 2009)

Also in the above article it is reported that Val Llewellyn from the Axial Group who bought the old Townsville Storm premises has turned down the option to acquire the plant and equipment/furnishings. These will now be sold through Grays online. 

Some of the items mentioned in Tony Raggatt's story are; 

.."French provincial wine tables, Himalayan rugs, Oriental dress torso statues, pink velvet Ottomans, velvet chairs, a cream fabric love seat, leather, fabric and velvet armchairs and lounges, and stacks of office furniture and chairs."

I feel that some of these items would fit in very well in the HQ of Garpal Inc, although for some reason I'm not getting a good picture of the image of gg lounging on a pink velvet Ottoman or canoodling in a cream fabric love seat, dressed in a Hefneresque smoking jacket robe, tipping ash from his Gran Corona.


----------



## Farencue (9 May 2009)

A quote from the SMH article solly posted (bolding mine)

"I believe you should be focusing less on consumer education and more on the regulating of financial advisers and the type of schemes they currently employ," one Storm submission says. *"We, the public, need to be protected from ourselves."*


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## Julia (9 May 2009)

Solly said:


> I feel that some of these items would fit in very well in the HQ of Garpal Inc, although for some reason I'm not getting a good picture of the image of gg lounging on a pink velvet Ottoman or canoodling in a cream fabric love seat, dressed in a Hefneresque smoking jacket robe, tipping ash from his Gran Corona.



Oh, I don't know, Solly.  It's something I think would work pretty well.  Maybe add in Garpaldog at gg's well shod feet.


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## chrisgee (9 May 2009)

Mash said:


> From Storm without any input from the client....once again.. you have all been told this many many many times before...the banks were in bed with storm....  they accepted storm figures without checking their validity.... they got their bonus for " lender of the year".. do you actually think some little branch in Townsville had more "clients" coming through the door than a branch in Sydney or Melbourne... hellooooo.... now they are ducking for cover and saying we did nothing wrong... yes you did.... guilt by association with cassimatis...




one problem is that some signed documents taht they may not have fully understood or read all the way through. but they trusted people so i suppose signing something that you dont really understand is a problem. even when reading these documents they are long and sometimes impossible to really know what they were all about. i thnk alot of people just did things out of trust especially if you were with someone for 10 years or so. when things were going well nobody wass complaining about the signatures  on documents or loans as it seems it didnt matter. but when it all falls apart you feel like you need to blame someone. does anybody know anyone where the bank has forgiven the debt or put the loans aside? i suppose if there are confidintial agreements we will never know.


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## Garpal Gumnut (9 May 2009)

Solly said:


> *"Storm Financial founders ordered to return $2 million dividend"*
> 
> "STORM Financial founders Emmanuel and Julie Cassimatis have been ordered to return a contentious $2 million `dividend' they paid themselves in the dying days of the wealth adviser late last year."
> 
> ...






It will be interesting to see whether sicag.info,  the victims' site will bother to mention this to their members.

I suspect not.

Manny seems to be a no go zone for them.

gg


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## bunyip (9 May 2009)

chrisgee said:


> when things were going well nobody wass complaining about the signatures  on documents or loans as it seems it didnt matter. but when it all falls apart you feel like you need to blame someone.




And that, Chris our friend, is exactly why you Stormers have copped some flak on this thread. 
Cassamatis was your hero when the market was going up and everything was rosy. And the banks were your friends for lending you the money that allowed you to cut yourselves a generous slice of the juicy stock market pie.
But as soon as it all falls apart you make villains of your heroes and you blame them for all your woes.

To their credit, a handful of Stormers on here have been honest enough to  admit that they themselves played a big part in their downfall by being too naive and trusting. 
But the overwhelming and recurring theme from Stormers and SICAG has been to blame it on someone else.


----------



## Mash (9 May 2009)

there are other ways to get information to ex storm clients  not just the sicag website. you never know what bank scum likes to patrol the sicag site.


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## Garpal Gumnut (9 May 2009)

Mash said:


> there are other ways to get information to ex storm clients  not just the sicag website. you never know what bank scum likes to patrol the sicag site.




I think the AFR and the Australian are some of the best portals for information as well as our own Townsville Bulletin.

I still find it strange that not one adverse comment agains the Cassimatis has ever been made on the sicag.info site, not one.

There is bugger all except politicians statements on the sicag site, and an anti bank stance.

And again may I state that I am no friend of the banks.



gg


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## SJG1974 (9 May 2009)

Garpal Gumnut said:


> I think the AFR and the Australian are some of the best portals for information as well as our own Townsville Bulletin.
> 
> I still find it strange that not one adverse comment agains the Cassimatis has ever been made on the sicag.info site, not one.
> 
> ...



I agree gg that it is odd how no mention is made of the Cassimatis' on the SICAG site.  I do recall an answer or two to questions posed on the now offline www.cassimatis.com.au site which mentioned SICAG...I do recall wondering whether there was any link between SICAG and the Cassimatis'.

Coincidence perhaps, but it certainly does smell fishy that SICAG are blaming the banks but not the salesman who recommended the banks' products.


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## darkside (9 May 2009)

See the one person who can shed so much light on this thread, and promised so much, but so far has delivered, zip, zilch, nought, nada , nothing, come on "Cereberus" , where are you ? don't leave us hanging.


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## bunyip (9 May 2009)

SJG1974 said:


> Coincidence perhaps, but it certainly does smell fishy that SICAG are blaming the banks but not the salesman who recommended the banks' products.




There are a couple of possible explanations.....

1. SICAG recognise that legal action against Cassamatis has no chance of getting any money out of the dry Storm coffers.

2. SICAG believe that action against the banks offers them a slim hope of recouping some of their losses, and they see Cassamatis as an ally in this endeavour due to his vehement condemnation of the banks.


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## Farencue (10 May 2009)

So Mash, bank scum aside for the moment, did you in fact authorise Storm to act on your behalf?

I realise I am not as eloquent as yourself in this conversation, but you have yet to answer the question posed to you numerous times.


----------



## maccka (10 May 2009)

Hello All,

So once again this forum is hotting up... seems to follow the action in the media arena ... things certainly seem to be hotting up there and will get hotter as the Parliamentary inquiry progresses.



Soft Dough said:


> So the copies of these documents that the banks have are unsigned?




As I understand it from media reports (drat can never find them when I want to quote them) there would appear to have been a number of documents that are unsigned.



Julia said:


> Mash, so can you confirm that what you are saying unequivocally is that :
> 
> 1.   Storm falsified the loan documents
> 
> ...





Without placing the blame at the feet of anyone (especially before court cases are launched and heard)...

It would appear that in some cases, some documents were falsified by someone.  It may be that only forensics will narrow down the who answer.

It would also appear that a number of the contracts between banks and clients are contracts with specific clauses making reference to the fact that the banks in question will (i) keep details on websites up to date (which they often did not) and (ii) would contact clients directly in the event of margin calls (which it appears did not happen until portfolios were in negative equity situations.  Some clients still have not received any contact from their banks advising of negative equity.).

Not all documentation (eg worksheets, proprietary documents) were available to clients. I suspect that many of these documents are going to be the ones that hold the answers to many of the questions for ex-Storm clients and all of us chasing answers to the questions.



Mash said:


> there are other ways to get information to ex storm clients  not just the sicag website. you never know what bank scum likes to patrol the sicag site.




It has been noted before on this forum that SICAG are very active in communicating with members in non-public ways.



Garpal Gumnut said:


> I think the AFR and the Australian are some of the best portals for information as well as our own Townsville Bulletin.
> 
> I still find it strange that not one adverse comment agains the Cassimatis has ever been made on the sicag.info site, not one.
> 
> ...




I agree with you GG.  "The Bully" and AFR seem to be doing some very fine reporting.  It is interesting that they are very interested in the answers being uncovered by SICAG.  Those reputable papers seem to place confidence in the organisation.



SJG1974 said:


> I agree gg that it is odd how no mention is made of the Cassimatis' on the SICAG site.  I do recall an answer or two to questions posed on the now offline www.cassimatis.com.au site which mentioned SICAG...I do recall wondering whether there was any link between SICAG and the Cassimatis'.
> 
> Coincidence perhaps, but it certainly does smell fishy that SICAG are blaming the banks but not the salesman who recommended the banks' products.




A check of the whole Cassimatis disclaimer on the SICAG website shows the following (I am hoping that the attachment did stick).

It is this statement that may help forum members with their questions about why SICAG is not being publicly Anti-Cassimatis.

"...SICAG takes a neutral position until such time as the due processes have been completed.  "

It goes on to say...

"SICAG has been set up to look after the interests of those who suffered losses in the wake of the dispute between Storm Financial and the CBA and Macquarie bank as to which party was responsible for managing clients margin loans. "

"It does not exist to promote the interests of Storm Financial or its founders Julie and Emmanuel Cassimatis."

It seems pretty clear to me that they are trying quite hard to let "due process" take its course before they launch against individuals.

It also appears to me that the banks have been behaving badly in recent times (and not just with SF) and don't like it when they get caught out being bad.  

Why shouldn't pressure be placed on banks to own up to their bad behaviour and make restitution IF they are found to have been at fault (or to have contributed to this tragedy)?

I would like to raise my own point in this discussion about SICAG.

It exists to serve the interests of its own members, not the banks, not SF, and certainly not many of the members of this forum.  It has a number of objectives which it is working towards achieving and appears to be doing so very successfully.  

One of its objectives is to bring about a parliamentary inquiry.  I think all on this forum can agree that this has happened and that they have succeeded in this.

Another is to connect its members in a variety of ways to offer support and comfort.  The "warm fuzzy picnics" are part of this mechanism and again I can say that they are working well to reduce the misery suffered by ex-Storm clients.

The fact that all of the work of the SICAG committee is being done by volunteer ex-Storm clients who are themselves going through their own personal hell can only be a credit to their dedication to offering genuine assistance.  (Yes - I support them.  No - I am not a committee member or an ex-Storm client for that matter.)

May I suggest a truce between GG and Mash until such time as ALL of the relevant facts are out in the open for all to see?

late night (early morning) regards to all

Happy Mothers' Day:70:


----------



## Garpal Gumnut (10 May 2009)

maccka said:


> Hello All,
> 
> So once again this forum is hotting up... seems to follow the action in the media arena ... things certainly seem to be hotting up there and will get hotter as the Parliamentary inquiry progresses.
> 
> ...




With respect maccka,

I repeat that SICAG never, ever, publish anything vaguely adverse about the Cassimatis.

This is from yesterdays Townsville Bulletin.

It is fact.

It is not pending for any court action in the future.

Manny was forced to hand back a $2mil dividend he paid himself and Julie, late last year before the whole show went **** up..

http://www.townsvillebulletin.com.au/article/2009/05/09/52705_hpnews.html

The SICAG site says that many in SICAG still support Manny.

However many victims do not.

By ignoring facts and facts not subject to future legal action you give the impression on SICAG that Manny is immune from adverse comment by that organisation.

No amount of sausage sizzles will get around that

And many victims mate will have a crap Mothers Day.

gg


----------



## carey ramm (10 May 2009)

GG

this saga is like peeling an onion - as each layer of lies and deception is peeled off (particularly through the media) so to does a layer of support for EC / Storm.

from the people i speak to there are very few people left that hold the view that he is blameless. 

the reality is that EC has liquidators, ASIC, creditors, victims, regulators, journalists and lawyers all chasing him - in seeking financial restitution for storm victims he is basically irrelevant. in terms of seeeking justice etc he is very relevant but for many storm victims battling to keep the family home he is not the main fight at present - i am sure EC's time will come.

it is the banks that were the willing partners in this fiasco that are still dodging and weaving - yes they are now picking up the pace and doing lots of deals - this is why the lawyers, SICAG etc have been very focussed on them - there is 1 overriding goal - save the family home of the storm victims. 

once the family home is secure there is a nice big juicy parliamentary enquiry where Storm can be tackled... and no doubt the regulators will have some views on them as well in the meantime.

i should disclose that i am *not* a member of SICAG. i do however speak to them from time to time and have generally found them to be very focussed on saving the family home and providing emotional support to storm victims. they are very much a volunteer grass roots sort of organisation who are providing true support to the storm victims (they mainly communicate to victims through email updates and #9 came through this weekend).

as u are aware there are many people out there emotionally kicking the storm victims when they are down and in the depths of despair - SICAG is 1 organisation that is trying to counter this. some people may not like SICAG or where they came from but at least they are out there trying to help.


----------



## find the truth (10 May 2009)

Hi 
I have some friends who were stormified.  I have been reading all of the posts with interest. A couple of questions/comments that I have are :

1) I saw back in the early posts that Storm recommended to *all* of their customers that they moved all investments into cash back in late October. My friends did so and their margin loan was paid out with a small surplus. Why didn't the other Storm investors that were sold out in December/January act on this advice at the time? 

2) I would suggest that a reasonably large part of the $2M recovered by ASIC will go back to Mr & Mrs C as they were employees of Storm as well. Cold comfort for the Storm customers.

3) Whilst some of the Banks could have a case to answer in regard to the negative equity in Margin loans the damage was done well before it all blew up.


----------



## Solly (11 May 2009)

find the truth said:


> Hi
> I have some friends who were stormified.  I have been reading all of the posts with interest. A couple of questions/comments that I have are :
> 
> 1) I saw back in the early posts that Storm recommended to *all* of their customers that they moved all investments into cash back in late October. My friends did so and their margin loan was paid out with a small surplus. Why didn't the other Storm investors that were sold out in December/January act on this advice at the time?
> ...




Welcome "find the truth", good to see another poster with a close exposure to the situation.

I'm not sure how much money will be left for th General Employee Entitlements and Redundancy Scheme (GEERS), I believe that the Storm group had approx 164 staff across the country. It will be interesting to see what consideration is given to the principals. 

I agree that once the margin loan was paid out quickly it reduced the liability but this didn't help those who still had large equity loans against their property.

I also agree that the damage was done before 'it all blew up', I am eager to see the findings and conclusions from the investigators and authorities.


----------



## Pindibog (11 May 2009)

Julia said:


> So the Storm clients can hardly accuse the bank  of being at fault for failing to contact them directly.




Thats a load of crap. I never did and now I find I was in MC for 2 mths all the time getting deeper unbeknowns to me until  I reached neg. equity then they decided to sell everything and then take my savings money.


----------



## Garpal Gumnut (11 May 2009)

find the truth said:


> Hi
> I have some friends who were stormified.  I have been reading all of the posts with interest. A couple of questions/comments that I have are :
> 
> 1) I saw back in the early posts that Storm recommended to *all* of their customers that they moved all investments into cash back in late October. My friends did so and their margin loan was paid out with a small surplus. Why didn't the other Storm investors that were sold out in December/January act on this advice at the time?
> ...




Where is Manny? 
Has anyone been to his site recently.
Surely he has some plan to save his clients?
Where is Manny.
A carton of VB for a positive sighting.

gg


----------



## Solly (11 May 2009)

Garpal Gumnut said:


> Where is Manny?
> Has anyone been to his site recently.
> Surely he has some plan to save his clients?
> Where is Manny.
> ...





That's a fair call gg. 

No updates on the website. No comments, no media statements, he's as visible as Claude Rains.

I had a sad call today from one of his ex-clients that had a pretty crappy Mother's Day ( ..... as you mentioned in a previous post).

There's nothing I can do to help except suggest cognitive behaviour therapy. 

Maybe you need to offer a case of Ouzo.


----------



## Solly (12 May 2009)

Pindibog said:


> Thats a load of crap. I never did and now I find I was in MC for 2 mths all the time getting deeper unbeknowns to me until  I reached neg. equity then they decided to sell everything and then take my savings money.




From 

http://www.commbank.com.au/about-us/news/on-the-record/2009/02032009-stormfinancial.aspx

"All investment advice to Storm Financial’s clients was given by Storm Financial under a formal Statement of Advice.  Pursuant to these Statements of Advice, the Storm Financial clients were mainly invested in CFS Funds, Challenger Funds and MLC Index Funds.
CGI had the responsibility of keeping Storm Financial fully updated with data on every margin loan held by Storm Financial clients.  We took our responsibilities seriously, providing data to Storm Financial daily on each and every client’s margin loan.  On top of this we provided up to date data on our web site (for both advisers and clients) which can be utilised 24/7 to check the clients account.  Storm Financial accessed this data over 11,000 times. On two occasions this data did not transfer across to Storm Financial correctly. Storm Financial informed us and we sent a new file immediately.
Our borrowers had the responsibility of monitoring their portfolio and taking any action required to avoid or clear a margin call.  At any time, any of these borrowers could have contacted Storm Financial and obtained the current details of their margin loan portfolio from Storm Financial (based on the information CGI supplied to Storm Financial on a daily basis)."

Does this warrant further investigation and comment?


----------



## Pindibog (12 May 2009)

Solly said:


> From
> 
> http://www.commbank.com.au/about-us/news/on-the-record/2009/02032009-stormfinancial.aspx
> 
> ...




Yes and it will be had in court. If you had a mortgage went off to work one day and your repayment did not go through unbeknowns to you as you thought it was paid as that is what hubby said. You get home the bank has sold the house and taken all the furniture too because you were behind in repayments. Never gave you the opportunity to remedy it but you didn't know as hubby said he paid it!


----------



## Solly (12 May 2009)

Pindibog said:


> Yes and it will be had in court. If you had a mortgage went off to work one day and your repayment did not go through unbeknowns to you as you thought it was paid as that is what hubby said. You get home the bank has sold the house and taken all the furniture too because you were behind in repayments. Never gave you the opportunity to remedy it but you didn't know as hubby said he paid it!



I would choose a husband more carefully....but seriously it appears to me that CBA's position is quite firm stating that it was Storm's responsibility to advise their clients of their overall financial status. I gather that this is still a matter of dispute between the parties.


----------



## Smiley (12 May 2009)

Anyone have a subscription to the AFR? I would love to know what is in this article:
"Storm probe now a criminal inquiry"
Tuesday, 12 May 2009 | The Australian Financial Review | Duncan Hughes


----------



## Sir Osisofliver (12 May 2009)

carey ramm said:


> GG
> 
> this saga is like peeling an onion - as each layer of lies and deception is peeled off (particularly through the media) so to does a layer of support for EC / Storm.
> 
> ...




Carey,

Just curious if you have a response to my post back on page 86

Sir O


----------



## Solly (12 May 2009)

Smiley said:


> Anyone have a subscription to the AFR? I would love to know what is in this article:
> "Storm probe now a criminal inquiry"
> Tuesday, 12 May 2009 | The Australian Financial Review | Duncan Hughes



The article by Duncan Hughes says that  ASIC are now obtaining loan files of former investors and seeking access to bank computer records. They have subpoenas to interview current and former bank employees. ASIC are looking for possible breaches of the criminal code in addition to contravention of the Corporations Act and ASIC Act.
If you can get a copy of the AFR it's quite an interesting article.


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## nunthewiser (12 May 2009)

happy birthday GG


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## carey ramm (12 May 2009)

I just read the AFR and it is interesting - follows the information in the SICAG update number 9.

Sir Osis..

Your view seems to be commonly shared by the Townsville office of a major broking firm who have made similar comments in the Townsville press. I agree with the thrust of what u (and they) r saying - 

a) If the Storm clients portfolio's were protected with a simple put option in MARCH 08 (When it was bloody obvious to Blind Freddy that things were going pear shaped in the Markets)... how many of them would have gone down the gurgler? probably none depending on the nature of the put option - but hindsight is a wonderful thing - if the market had of risen to 8,000 well... anyway i dont work for storm and i couldnt possible hope to understand their concept of risk mangement.

b) If a properly risk weighted reserve was in place for the margin lending portfolio... how many of them would be in this position? probably none but now we will have margin lending as a regulated product we can be sure a "properly risk weighted reserve" will be in place - this may be a burden to some financial advisers but should nmean no difference for those financial advisers that are currently doing this (as u obviously are) - the difference is the rogues will now be forced to comply or face prosecution.

For GG and the great EC hunt - i did hear that EC was seen at woolworths shopping centre in townsville CBD with JC on the weekend - that will make 2 weekends in a row he has been seen here - maybe he is escaping the clutches of the southern winter....


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## -Bevo- (12 May 2009)

carey ramm said:


> For GG and the great EC hunt - i did hear that EC was seen at woolworths shopping centre in townsville CBD with JC on the weekend - that will make 2 weekends in a row he has been seen here - maybe he is escaping the clutches of the southern winter....




Surprised he is walking around in public here.
Someone might spit in his face or swot him like a fly.


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## Solly (12 May 2009)

*"Final Storm Financial bids decision imminent"*

"The successful bidders for up to 10,000 clients of collapsed dealer group Storm Financial are scheduled to be announced this Friday, according to Steve Prendeville, director of advice firm broker Kenyon Prendeville."

More here by Liam Egan in Money Management

http://www.moneymanagement.com.au/Article/Final-Storm-Financial-bids-decision-imminent/481053.aspx


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## Sir Osisofliver (12 May 2009)

Hi Carey - thanks for the reply....



carey ramm said:


> Your view seems to be commonly shared by the Townsville office of a major broking firm who have made similar comments in the Townsville press. I agree with the thrust of what u (and they) r saying -
> 
> a) If the Storm clients portfolio's were protected with a simple put option in MARCH 08 (When it was bloody obvious to Blind Freddy that things were going pear shaped in the Markets)... how many of them would have gone down the gurgler? probably none depending on the nature of the put option - but hindsight is a wonderful thing - if the market had of risen to 8,000 well... anyway i dont work for storm and i couldnt possible hope to understand their concept of risk mangement.



Unfortunately I don't understand their concept of risk management either. This would have been a reasonably simple exercise for them if they had based it on a put option against the asx200 index for example. Not to mention that their brokers would have made money on doing so and they would now be seen as champions. One single and extremely cheap piece of _insurance_in the form of an option should have almost totally hedged their portfolio. When you take out a mortgage against a house the lender makes you take out insurance to protect their vested interests in the asset.  I've always been a firm believer that if you borrow funds for the share market you should protect your asset. (This goes double when your house is on the line too) - Of course if the market had gone up to 8000, you would have simply closed out the option position, and bought another one at 7500 points it would have cost a few percent of the value of the portfolio - cheap insurance for piece of mind eh?


> b) If a properly risk weighted reserve was in place for the margin lending portfolio... how many of them would be in this position? probably none but now we will have margin lending as a regulated product we can be sure a "properly risk weighted reserve" will be in place - this may be a burden to some financial advisers but should nmean no difference for those financial advisers that are currently doing this (as u obviously are) - the difference is the rogues will now be forced to comply or face prosecution.



 Really? Of course how much of a reserve is necessary for a client is dependent upon what their risk profile is like. Fits nicely into KYC legislation eh? So you get a client who can be *convinced* to sign off against a minimal or non-existent reserve based upon their risk profile...and what has changed? It is the same issue of "predatory *advisers*" seeking to line their own pockets. The *product* of margin lending and whatever legislation is applied is immaterial. The dodgy brothers will still be dodgy, and the punters who place their trust in them will still get fleeced.  

Of course if they actually *ban* the use of margin lending and double debt, it all becomes moot, and those clients I could have helped reach financial security earlier in a very safe and secure manner will have to try something else to achieve the same level of leverage and return on own funds.  Hey maybe we should put them into options trading and CFD's eh? They're safe as houses them things...

Cheers

Sir O


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## Garpal Gumnut (12 May 2009)

-Bevo- said:


> Surprised he is walking around in public here.
> Someone might spit in his face or swot him like a fly.




I do some voluntary work for a charity in Townsvile, and I dropped a client off at Centrelink on Ross River Rd.today.

He was sure he saw Manny and Julie getting a fast track in to a room at the back.

The bloke has some sort of an illness so I don't know how reliable the info is. 

He volunteered the info without any comment from me, he was as surprised as me.

It gets stranger and straanger.

gg


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## -Bevo- (12 May 2009)

Garpal Gumnut said:


> I do some voluntary work for a charity in Townsvile, and I dropped a client off at Centrelink on Ross River Rd.today.
> 
> He was sure he saw Manny and Julie getting a fast track in to a room at the back.
> 
> ...




If that turned out to be true it would indeed be strange although he might be seeking some financial counseling , happen to have a chat with a uncle who used to live here the other day, he worked in finance manny years ago and was offered a job buy EC when he was only a small operation he declined the offer because he said EC was a crook back then, I guess people never change.
Theres been mention that incomes were overstated but Uncle believes what happened is they add the projected incomes from the investments into the applications for margins or something to that effect, Sir Osisofliver would probably have a better idea.


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## Solly (13 May 2009)

Garpal Gumnut said:


> I do some voluntary work for a charity in Townsvile, and I dropped a client off at Centrelink on Ross River Rd.today.
> 
> He was sure he saw Manny and Julie getting a fast track in to a room at the back.
> 
> ...




Well gg,  Centrelink do offer a service called  *"Supporting you in the global financial crisis"*

If claiming a payment because of unemployment they will ask some questions about the claimants situation, such as:

whether you have been made redundant or have left your job voluntarily
details of any payouts you received when your job ended
details of family circumstances, such as partners or dependants
details of any savings or assets you might have
.
I believe it's open to anybody who meets the criteria for assistance.

For anyone that needs more details or assistance have a look at: http://www.centrelink.gov.au/internet/internet.nsf/individuals/global_financial_crisis.htm


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## Kez180 (13 May 2009)

Soft Dough said:


> Well who signed the forms then?
> 
> So what you are saying, is that all erroneous forms were not signed by the clients, and that these forms are still unsigned?
> 
> Just go to your filing cabinet and get your photocopy out.




I am willing to believe that in a few cases loan applications were not signed...

I am NOT willing to believe that the bank let one cent go to a storm client without signatures on loan contracts and mortgage documents... Banks are not stupid, when **** hits the fan it is these two documents that matter...

Mash obviously didn't read the fine print let alone take a copy for himself...


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## Solly (13 May 2009)

*"CBA to slash dividend"*

"Mr Norris said he was comfortable with the provisions taken by CBA for its exposures to *Storm Financial* and Timbercorp"

See more here from SMH

http://www.news.com.au/heraldsun/story/0,21985,25472965-664,00.html


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## Solly (13 May 2009)

SUPREME AND DISTRICT COURTS BRISBANE 

Thursday 14 May 2009

APPLICATIONS TO COURT
10:00 AM 
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION -V- CASSIMATIS & others


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## Garpal Gumnut (13 May 2009)

Solly said:


> SUPREME AND DISTRICT COURTS BRISBANE
> 
> Thursday 14 May 2009
> 
> ...




Perhaps somebody here could let *SICAG.INFO* know about this so that they could 

*INFORM THEIR MEMBERS*

Manny and Julie seem like a no go area for SICAG.

Manny's site is still down.

But the SICAG's is up, so it may not matter.

gg


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## Solly (14 May 2009)

> Originally Posted by Cereberus
> Hi SJG1974,
> 
> A small addition to my original disclosure for clarity.
> ...





*Cereberus*, it's been yet another week 
and we still haven't heard from you. 

I still believe that there are still many who welcome your offer 
to keep us informed and are eager to hear from you again.

Any updates for us?


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## Solly (14 May 2009)

I believe that things are now ramping up, as Carey stated the layers are beginning to fall away to expose some very interesting elements. 

I'm sure many with be very interested with the direction that this saga is now taking. 

Keep you eyes open and your ears peeled for further developments......


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## bunyip (14 May 2009)

Farencue said:


> So Mash, bank scum aside for the moment, did you in fact authorise Storm to act on your behalf?
> 
> I realise I am not as eloquent as yourself in this conversation, but you have yet to answer the question posed to you numerous times.




Mash, still waiting for your answer on this one.
You've been very vocal on this thread but I notice that you tend to lie low when you're faced with confronting questions.


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## Solly (14 May 2009)

*"Mr Norris was grilled by analysts over the bank's exposure to borrowers who had lost money on investments owing to the collapse of Storm Financial."*

More here by George Lekakis in the Herald Sun;

http://www.news.com.au/heraldsun/story/0,21985,25476054-664,00.html


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## donteventryit (15 May 2009)

Bump. 

*Sale Heading*: Storm - IT, Audio Visual, Teleconferencing - Townsville Pick Up  
*Sale type*: Online Auction  
*Under Instructions From*: Mr Bill Buckby, Mr Robert Hutson & Mr David Winterbottom of KordaMentha 
*In Matter of*: Storm Financial Limited (Receivers and Managers Appointed) (In Liquidation) 
*Sale Location*: Online 
*Sale Start Date/Time*: 21/05/2009 4:00 PM AEST 
*Sale End Date/Time*: 25/05/2009 6:00 PM AEST 

http://www.graysonline.com.au/sale.asp?SALE_ID=70932​
*Catalogue available on*: 21/5/2009 4:00:00 PM


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## Garpal Gumnut (15 May 2009)

I had a very interesting conversation with an elderly Greek gentleman , a bit of an identity in North Queensland with no past or present association with the finance industry, who was sitting beside me in business class.

He had many interesting things to say about the matters we have been discussing.

He also said that many Greeks still have great attachment to Greece and he in fact has many land holdings in Greece, in his own name and that of his family,  he called it his "future land" , in case things ever went **** up in Queensland with his farms and businesses.

Much of what he said is unprintable, but I learnt a lot from him. 

gg


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## chrisgee (15 May 2009)

Garpal Gumnut said:


> I had a very interesting conversation with an elderly Greek gentleman , a bit of an identity in North Queensland with no past or present association with the finance industry, who was sitting beside me in business class.
> 
> He had many interesting things to say about the matters we have been discussing.
> 
> ...




good to see mr gg your travelling business class at least some can afford to fly in style or were you on the tilt train? I have met some greek people as well who are very attached to the old country-still give thier kids greek names call thier boats greek names. they are really nice great people one even went see mr c years ago when he was starting out but he did not go ahaed because he just felt it was too risky. this guy still has as a big house with a pool and drives great cars. maybe we sholud have asked him for advice instead. we havent joined sicag because not sure if will help at all. we will just keep working hard i suppose. does anybody know what the court thing was all about this week? will that help investers ? i dont really have much to say but thought i would check the site for any news. i think a lot of us are getting really tired and need a rest but we cant. hope everyone one has a great weekend i will have a few beers after i finish work tonight.
mr gg do you think mr c has land somewhere?


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## Garpal Gumnut (15 May 2009)

chrisgee said:


> good to see mr gg your travelling business class at least some can afford to fly in style or were you on the tilt train? I have met some greek people as well who are very attached to the old country-still give thier kids greek names call thier boats greek names. they are really nice great people one even went see mr c years ago when he was starting out but he did not go ahaed because he just felt it was too risky. this guy still has as a big house with a pool and drives great cars. maybe we sholud have asked him for advice instead. we havent joined sicag because not sure if will help at all. we will just keep working hard i suppose. does anybody know what the court thing was all about this week? will that help investers ? i dont really have much to say but thought i would check the site for any news. i think a lot of us are getting really tired and need a rest but we cant. hope everyone one has a great weekend i will have a few beers after i finish work tonight.
> mr gg do you think mr c has land somewhere?




sorry , some background.

It was on a flight from Brisbane to Townsville.

I try to travel business class as their is more chance of carking it in a crash at the front, as opposed to ending up in a nursing home if you are in the back with godbotherers and gideons visiting every second thursday for evermore with that jesuscreeping look they have, if you survive with hideous injuries.

Greeks are great people. But not all people are Greek. And not all Greeks are all nice people. I'm no philosopher , but after 3000 years I thinks thats a fair summation of all greek philosophy. 

Working hard is good, its got me out of a few scrapes.

I'd normally recommend groups like sicag but they explicitely state on their site that some of the group are friends or agree with the Cassimatis doctrine.

Make your own mind up. 

Even I could not state this elderly gentleman's opinion of Manny in a public forum.

gg


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## bunyip (15 May 2009)

chrisgee said:


> i think a lot of us are getting really tired and need a rest but we cant. hope everyone one has a great weekend i will have a few beers after i finish work tonight.




Chris
Hang in there mate - you're not beaten until you give up. 
There are many people on here (including those of us who have given you Stormers a serve when we thought it was justified) who feel much sympathy for you and your situation. 
With perseverance and determination I'm sure you'll come through this crisis. 
Hope you enjoy your beer....have one for me while you're at it.


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## chrisgee (16 May 2009)

bunyip said:


> Chris
> Hang in there mate - you're not beaten until you give up.
> There are many people on here (including those of us who have given you Stormers a serve when we thought it was justified) who feel much sympathy for you and your situation.
> With perseverance and determination I'm sure you'll come through this crisis.
> Hope you enjoy your beer....have one for me while you're at it.




thanks bunyip and mr gg for the replies-just thought one more thing i see where there could be some criminal activities in this mess-is there anyway that the courts/asicc can make any guilty people sell up the homes, properties etc ? if someone in a bank or storm is proven to have done somethimng criminal can they be forced to pay money to those they have caused grief to? or have i been watching to much yank tv shows? ive been speaking with a mate at work who reckons it goiung to be really hard to get any money back through the legal action-gee i hope he is wrong-


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## Garpal Gumnut (16 May 2009)

chrisgee said:


> thanks bunyip and mr gg for the replies-just thought one more thing i see where there could be some criminal activities in this mess-is there anyway that the courts/asicc can make any guilty people sell up the homes, properties etc ? if someone in a bank or storm is proven to have done somethimng criminal can they be forced to pay money to those they have caused grief to? or have i been watching to much yank tv shows? ive been speaking with a mate at work who reckons it goiung to be really hard to get any money back through the legal action-gee i hope he is wrong-




Unfortunately Chris, you have Buckleys chance of ever getting money back from guilty parties in matters like this.

They often have to spend what they have on legal fees or on other fees associated with defending themselves.

Also they often have laundered money, transferred it to family members in the form of gifts, or put it into entities such as overseas trusts or superannuation which are safe from sequestration of debts.

Buying land and houses and gifting to family is a common ploy.

Read back over the scams of the last 30 years and you will find most of the guilty parties are still living in luxury.

gg


----------



## Solly (18 May 2009)

*Storm damage*

"Bernie Ripoll's inquiry into financial products and services in Australia has opened a window on to the personal financial tragedies caused by the collapse of Storm Financial."

See more from Tony Boyd in Business Spectator;

http://www.businessspectator.com.au/bs.nsf/Article/Leveraging-Storm---or-The-personal-tragedy-of-Stor-pd20090518-S5TRH


----------



## Solly (18 May 2009)

Got this link sent to me, it reports that

*"The highest individual loss in Rockhampton is said to be $12 million" *

How can this be?

Also see the rather sad statements form Debbie and Kevin Locke...

The article is here;

http://www.themorningbulletin.com.au/story/2009/02/24/shattered-victims-pledge-to-fight-on-after-storm-c/


----------



## Julia (18 May 2009)

Thanks for the links, Solly.

I find this comment by Damian Scattini interesting:



> Brisbane lawyer Damian Scattini told the crowd the advice they were given from Storm was poor and the action of banks was “s**t house”.
> 
> He said it was too early to say if there would be a class action.



Wasn't he gathering the erstwhile investors together with the promise of a class action?
Hope they haven't paid him in advance.


----------



## bunyip (18 May 2009)

chrisgee said:


> thanks bunyip and mr gg for the replies-just thought one more thing i see where there could be some criminal activities in this mess-is there anyway that the courts/asicc can make any guilty people sell up the homes, properties etc ? if someone in a bank or storm is proven to have done somethimng criminal can they be forced to pay money to those they have caused grief to? or have i been watching to much yank tv shows? ive been speaking with a mate at work who reckons it goiung to be really hard to get any money back through the legal action-gee i hope he is wrong-





Employees of the banks or Storm were working on behalf of that particular organisation at the time. Therefore any action or prosecution would be against the organisation, rather than against the individual employed by them.
Highly unlikely that you'd have any claim for getting money from an individual who worked for the company, even if they did something wrong or illegal.


----------



## maccka (18 May 2009)

Julia said:


> Thanks for the links, Solly.
> 
> I find this comment by Damian Scattini interesting:
> 
> ...




Hello Julia,

Firstly, Damien Scattini did not gather the investors together at the meetings, SICAG called the meetings.  He was an invited guest.

Having seen a video of one of the meetings that Damien attended (Margate) I can state that he definitely has NOT promised a class action.  In fact, he made it VERY clear that a class action might not be possible.  He outlined that class actions do not happen as far as Qld courts are concerned and that class actions (for Qlders) are something that happen in Federal court.

He explained that with everyone having such different circumstances (eg banks, circumstances going in and coming out etc) that a "class action" may not be appropriate/possible.  

He talked about class actions, representative actions and individual actions etc as possibilities depending on what information comes out when they look at everyone's situations.

On the question of costs, he said (please forgive my punctuation):

"At this point, we will charge you nothing. 

There will be no obligation either way.  We'll investigate this thing.  

And if it comes to the point where we say "we can't help you" then we won't charge you anything for that.

Now if we run all the way to the end of the case and we get you a good result, we'll charge you and we'll charge you heaps.

Because we have to and that's the fact."

He warned against litigating if people asked their heart and the answer was to the effect of "When I went into this deal, I understood the risks - my house was at risk, this was dangerous advice but I was prepared to take that risk because of the up-side." 

He said "you need to think about that because it's a very important thing."

Damien came across as extremely sincere and made no promises of class actions.  He explained the possible costs at different stages of a possible legal campaign quite clearly and indicated no costs would be incurred by clients until they entered into an agreement.

Cheers
Maccka


----------



## Glen48 (18 May 2009)

I see yet more crash's Great Southern, Kleenmaid  owing millions when will it stop or some Gov. body act?
 Wonder how long until the next one?


----------



## Solly (19 May 2009)

Glen48 said:


> I see yet more crash's Great Southern, Kleenmaid  owing millions when will it stop or some Gov. body act?
> Wonder how long until the next one?




Glen, here's an article from the SMH by Jacob Saulwick and Ruth Williams;

*Job well done, government tells ASIC*

"THE Federal Government is standing by the performance of its corporate regulators, despite almost 200,000 investors losing, or being locked out of, about $30 billion in savings."


----------



## Solly (19 May 2009)

Does anybody know what has happened to the "crusade" ?

As per the media release of 30 Jan 09.....

"*I have said over and over again that my crusade is now to find justice for these clients, and I will continue that crusade until my dying breath,'' said Emmanuel Cassimatis. "We're not going anywhere*.''

"We seek him here, we seek him there............."


----------



## bunyip (19 May 2009)

Solly said:


> Does anybody know what has happened to the "crusade" ?
> 
> As per the media release of 30 Jan 09.....
> 
> ...




Manny's 'crusade' was, as some of us pointed out at the time, nothing more than hot air....big talk from a man of small character.

Feathering his own nest has always been his main priority, with the interests of his clients running a very poor second.


----------



## Garpal Gumnut (19 May 2009)

bunyip said:


> Manny's 'crusade' was, as some of us pointed out at the time, nothing more than hot air....big talk from a man of small character.
> 
> Feathering his own nest has always been his main priority, with the interests of his clients running a very poor second.




Unlike the crusades of old I think Manny took a wrong turn and is fighting mossies in the Gabon.

gg


----------



## Julia (19 May 2009)

maccka said:


> Hello Julia,
> 
> Firstly, Damien Scattini did not gather the investors together at the meetings, SICAG called the meetings.  He was an invited guest......




Maccka, thank you for setting the record straight on this, and my apologies for what has been a wrongly drawn conclusion from remarks made by various contributors to this thread about what their expectations were from Slater and Gordon.


----------



## The_Bman (19 May 2009)

Here is one way to get 60 cents in the dollar:

http://www.graysonline.com.au/sale.asp?SALE_ID=70932


----------



## Solly (19 May 2009)

The_Bman said:


> Here is one way to get 60 cents in the dollar:
> 
> http://www.graysonline.com.au/sale.asp?SALE_ID=70932





Noticed again there's some rather interesting Period Furniture, Reproduction Furniture, Artworks & Figurines.

Can't wait to see the full catalogue when it becomes available on 21/5/2009.


http://www.graysonline.com.au/sale.asp?SALE_ID=70931


I'm just wondering what items gg will score for 9 bucks. 
Might even just get a glimpse of him when he backs up the Diamond T and loads up his winnings on the flatbed tray.


----------



## maccka (19 May 2009)

Julia said:


> Maccka, thank you for setting the record straight on this, and my apologies for what has been a wrongly drawn conclusion from remarks made by various contributors to this thread about what their expectations were from Slater and Gordon.




You are welcome.  Glad to be of help.

Thank you for your apology.


----------



## Julia (19 May 2009)

Maccka, I would, however, suggest that several Stormified clients are definitely under the impression that Mr Scattini represents their personal saviour.
Thus my assumption that he must have promised , um, 'justice'.


----------



## maccka (19 May 2009)

Julia said:


> Maccka, I would, however, suggest that several Stormified clients are definitely under the impression that Mr Scattini represents their personal saviour.
> Thus my assumption that he must have promised , um, 'justice'.




Hi Julia,

I have watched it again since your comment and I can tell you that on the video he doesn't promise justice.  He does indicate that they (S&G) will investigate it carefully.  I think that this is why people see him so positively.

I suspect that part of the respect that Mr Scattini garners with some ex-Storm clients may be due to the fact that he is one of the first people that showed a serious desire to help and an understanding of the pain that people were (are) suffering. He has a track record for getting to the truth of the matter and bringing the truth out into the open for all to see.  

I don't get the feeling of people seeing Scattini as a personal saviour.

I believe he is seen as a very savvy man who really understands the mystical machinations of big business and finance.  He is someone who can "Mix it with the big boys", see through deception or fuzzy distraction and not be put off by them, keep his eye on the big picture and his plan and come out the other side of a meeting with more answers (and another puzzle piece for "the picture") then when he went in.  

I think that many of the ex-Storm clients probably look positively at most people prepared to look closely at what happened and everyone (including themselves) involved.  From what I see, Ex-Storm clients want the real truth to come out as against the "truth" according to one institution or another and for many they see the parliamentary inquiry as the best vehicle they have to achieve this.  

Cheers
maccka


----------



## Solly (20 May 2009)

Other quotes in the media from EC, 

“I feel a huge moral responsibility. Our clients trusted us implicitly, we trusted the system, we trusted all the players in the system, we trusted the bank. It went horribly, horribly wrong,”  (on the ABC)


“My finger points squarely at the Commonwealth Bank,”  (on Channel 9)


Is there anybody anywhere that can give an update on the progress of the "crusade" or a snapshot of where the "Stomers" stand on recovering anything ?


----------



## SJG1974 (20 May 2009)

Solly said:


> Other quotes in the media from EC,
> 
> “I feel a huge moral responsibility. Our clients trusted us implicitly, we trusted the system, we trusted all the players in the system, we trusted the bank. It went horribly, horribly wrong,”  (on the ABC)
> 
> ...



I too would love an update on Manny's crusade and all of the work he is doing to bring those nasty banks who lost his clients' money to justice.  He must be working around the clock considering no-one has seen him, and his informative internet site is still being updated with new content.

Perhaps Cereberus can assist here, but for some reason he seems to have gone to ground also....


----------



## Solly (21 May 2009)

SJG1974 said:


> I too would love an update on Manny's crusade and all of the work he is doing to bring those nasty banks who lost his clients' money to justice.  He must be working around the clock considering no-one has seen him, and his informative internet site is still being updated with new content.
> 
> Perhaps Cereberus can assist here, but for some reason he seems to have gone to ground also....




Alas it has been another week and still no response or news from Cereberus. This to me is very dissapointing. So much promised but absolutely nothing delivered.


----------



## Garpal Gumnut (21 May 2009)

I was in the Great Northern Hotel last night and saw a group of southerners having a few beers. 

One of them had a folder with ASIC written on it.

So I went over and had a chat about the footy, trying to have a sqizz at the folder. But I couldn't.

I asked them straight out were they up here about Storm.

I don't know if they were bankers or ASIC.

They all then left. There woulld have been 10 or so of them, pasty looking fellows who've seen little sunlight.

Anyone seen Manny in Townsville?

I'll be eating out down Palmer St. tonight so will keep an eye out for ASIC , Bankers and / or Manny.

Something is up, something big.

gg


----------



## Solly (21 May 2009)

Garpal Gumnut said:


> Something is up, something big.
> 
> gg



Methinks you could just be on the money,
gg....


----------



## carey ramm (21 May 2009)

GG - i think u are very much on the money!!! 

I think the regulators are taking the storm saga very seriously and have been interviewing a range of people - this from todays paper...

http://www.townsvillebulletin.com.au/article/2009/05/21/54551_hpnews.html


----------



## Garpal Gumnut (21 May 2009)

Garpal Gumnut said:


> I was in the Great Northern Hotel last night and saw a group of southerners having a few beers.
> 
> One of them had a folder with ASIC written on it.
> 
> ...






Solly said:


> Methinks you could just be on the money,
> gg....






carey ramm said:


> GG - i think u are very much on the money!!!
> 
> I think the regulators are taking the storm saga very seriously and have been interviewing a range of people - this from todays paper...
> 
> http://www.townsvillebulletin.com.au/article/2009/05/21/54551_hpnews.html




Thanks guys, 

I only got my copy of the Bully just now, and its all in there.

A few of my lads are doing some work down Sturt St. today so I'll post you on any events or movements.

gg


----------



## Julia (21 May 2009)

gg, do you have a link to the Bulletin story?


----------



## Garpal Gumnut (21 May 2009)

Julia said:


> gg, do you have a link to the Bulletin story?




Its in Carey's post above, Julia.

gg


----------



## maccka (21 May 2009)

Hi All,

Given the interest people have always had in how this might play out in court I thought I would include this link.

http://www.moneymanagement.com.au/article/Storm-Financial-legal-action-takes-shape/482213.aspx

It states that he said that a class action was not appropriate in this case which matches the information he gave people at the various SICAG public meetings from February onward.  

Cheers
maccka


----------



## Garpal Gumnut (21 May 2009)

Garpal Gumnut said:


> I was in the Great Northern Hotel last night and saw a group of southerners having a few beers.
> 
> One of them had a folder with ASIC written on it.
> 
> ...




Sorry I can't give any updates as its bloody cold here tonight 18 degrees and I'm off to bed. Too bloody cold to go chasing the ASIC mob, or Manny.

gg


----------



## Solly (21 May 2009)

The momentum is gathering and the games have now begun.

Keep your eyes peeled and ears pricked, many will be quite surprised with what will be seen to be played out in the public arena.


----------



## Julia (21 May 2009)

Garpal Gumnut said:


> Its in Carey's post above, Julia.
> 
> gg



Thanks, g.g.  Sorry.  I missed Carey's post.


----------



## chrisgee (22 May 2009)

i am pleased to see that something is happening maybe now they will get to the bottom of what is going on. i hear that not everybody is happy with the way the banks are helping out with those who are in trouble i suppose everybody has to decide what is best for them i hear some have taken up the offers and some are not happy with signing confidentiality clauses etc. i suppose its up to everybody to decide. i really hope the asic guys really hammer those who have done somethinh wrong. i'm not confident that they will get those who scammed people but we will wait and see.
i really want to see all of this come out in the open so the whole of aust can see what went wrong i know some are doing it really tough at the momnet we are making ends meet but its the future that scares us a bit. i'm sure hope the government and the law stands behind the people who have lost out big time.


----------



## Solly (23 May 2009)

*"Storm Financial collapse focus of federal inquiry"*

"STORM Financial's owners and the big banks will be expected to give evidence to the federal parliamentary inquiry examining the company's dramatic collapse."

MP Bernie Ripoll holds a private meeting with Commonwealth Bank representatives.

More here in an article by Stefanie Balogh in The Courier Mail;

http://www.news.com.au/couriermail/story/0,20797,25523190-3122,00.html


----------



## Garpal Gumnut (23 May 2009)

Solly said:


> *"Storm Financial collapse focus of federal inquiry"*
> 
> "*STORM Financial's owners* and the big banks will be expected to give evidence to the federal parliamentary inquiry examining the company's dramatic collapse."
> 
> ...




Thanks for keeping us up to date.

Your posts alone are better than some Storm sites.

gg


----------



## Solly (23 May 2009)

Garpal Gumnut said:


> Thanks for keeping us up to date.
> 
> Your posts alone are better than some Storm sites.
> 
> gg




Thanks gg for the compliment


----------



## Solly (23 May 2009)

*"Storm boss's great Storm sofa buyback"*

"It seems Storm Financial founder Julie Cassimatis just can't part with her treasured belongings.

Mrs Cassimatis is believed to have bid on a number of items once belonging to the collapsed financial advisory firm and now up for auction at Grays Online."

Story by Lendl Ryan in The Townsville Bulletin is here;

http://www.townsvillebulletin.com.au/article/2009/05/23/55055_hpnews.html


Looks like `JC – Belmont' has been quite busy.

I'm a little disappointed not to  see 'gg - Townsville' in the bidding history for some of these tasteful Figurines 














​
Your chance to outbid some quite famous bidders and collect some memorabilia is here;

http://www.graysonline.com.au/catalogue.asp?SALE_ID=70931&SALE_TYPE=THUMB


----------



## Garpal Gumnut (23 May 2009)

Solly said:


> *"Storm boss's great Storm sofa buyback"*
> 
> "It seems Storm Financial founder Julie Cassimatis just can't part with her treasured belongings.
> 
> ...




Thanks Solly.

As you know, when one invests it is always better to use other people's money OPM.

When I want to look at **** pieces of nouveaux riche sculpture or furniture, I go to other people's places OPP.

To be fair to Julie, there must be a fair few JC's in Belmont.

I know for a fact one lived in Jerusalem a few years ago.

gg


----------



## chrisgee (23 May 2009)

Solly said:


> *"Storm boss's great Storm sofa buyback"*
> 
> "It seems Storm Financial founder Julie Cassimatis just can't part with her treasured belongings.
> 
> ...






if this is true that this is really jc bidding over $1100 for a expresso coffee machine this makes me a bit peeved some of us think international roast instant coffee to drink is a luxury at the moment . then there's replica ships-signalling lamp. but what about the toilet brushes and holders towels, candles, toilet roll holders, dinner plates, mugs rubbish bin, vases, teapot, 
bookends and tea candles. are these things they can't do with out? looks like someone is setting another office somewhere, maybe i'm wrong. jeepers this whole debacle is just getting wieder and wieder. when will some of the exclients be able to afford to buy any of this stuff? gee i'm still a bit peeved.


----------



## Garpal Gumnut (23 May 2009)

chrisgee said:


> if this is true that this is really jc bidding over $1100 for a expresso coffee machine this makes me a bit peeved some of us think international roast instant coffee to drink is a luxury at the moment . then there's replica ships-signalling lamp. but what about the toilet brushes and holders towels, candles, toilet roll holders, dinner plates, mugs rubbish bin, vases, teapot,
> bookends and tea candles. are these things they can't do with out? looks like someone is setting another office somewhere, maybe i'm wrong. jeepers this whole debacle is just getting wieder and wieder. when will some of the exclients be able to afford to buy any of this stuff? gee i'm still a bit peeved.




Its not any wierder than it was mate. 

The ex clients have got sicag.info to help them out.

Doubtless they will have something, someday, to say about Manny and Julie Cassimatis.

So far its all the banks fault.

gg


----------



## Solly (23 May 2009)

Solly said:


> *"Storm boss's great Storm sofa buyback"*
> 
> "It seems Storm Financial founder Julie Cassimatis just can't part with her treasured belongings.
> 
> ...




Here's a list of some items 'JC – Belmont' has bid on or is currently winning.

Some quite interesting items

Lot..............Qty...Description
0001-70931	    1	Office desk
0005-70931	    1	2 seater sofa in cream fabric
0013-70931	    1	Qty 2 prints of Venice
0016-70931	    1	Drexel Heritage card, backgammon or chess table
0020-70931	    1	Side board
0022-70931	    1	Office desk open design
0029-70931    1	Tall boy 6 drawer
0036-70931	    1	Arm chair in gold ornate timber frame
0039-70931	    2	Ottoman with black paisley skirt with pink deep button top
0047-70931	    2	2 Seater sofa in gold fabric
0048-70931	    6	2 Piece library setting
0051-70931	    15	Elko Interiors tub chair
0061-70931	    2	Garstone 2 seater sofa with rolled arms
0062-70931	    2	Garstone leather arm chair
0063-70931	    1	Ornamental cabin trunk
0068-70931	    1	Qty assorted kitchen ware
0087-70931	    1	Dining table
0088-70931    1	Bench seat
0089-70931	    1	Buffet
0090-70931	    1	Buffet
0091-70931	    2	Lounge chair
0092-70931	    8	Executive office chair
0096-70931	    1	Qty 2 framed prints
0101-70931    2 Herman Miller office chair
0108-70931	    3	Extension dining table
0120-70931	    2	Hali hand made carpets
0122-70931	    1	Replica ships signalling lamp on tripod
0124-70931	    4	Dining chair
0125-70931	    4	Dining chair
0126-70931	    1	Dining table with cutlery drawer
0132-70931    1	Kitchen trolley
0133-70931	    1	San Marino SME/2-LS espresso machine 2 group
0134-70931	    1	Ibertal Doge83 coffee grinder and dispenser
0140-70931	    1	Orford FM30F display fridge
0142-70931	    1	Preparation trolley
0146-70931	    1	Qty approx 53 cartons assorted glassware
0148-70931	    1	Qty 6 chaffing dishes
0149-70931	    1	Qty 14 planter tubs
0155-70931	    1	2 Seater sofa in gold fabric
0160-70931    1	Qty 2 Karlsson wall clocks
0163-70931	    1	`Two Peas in a Pod` acrylic painting
0165-70931	    1	`Fly Away Home` acrylic painting
0190-70931	    1	Meeting table
0198-70931	    1	Panasonic NN-C2000W convection microwave oven
0199-70931	    1	Harros cappuccino machine
0207-70931	    1	Qty 2 lanterns
0224-70931	    1	Large qty assorted stationery items
0254-70931    1	Qty assorted items
0255-70931	    1	Qty 13 carpet protectors
0260-70931	    2	Wonderest support-a-pedic single ensemble bed
0261-70931	    1	Qty 3 sheet sets


----------



## Soft Dough (23 May 2009)

Solly said:


> Here's a list of some items 'JC – Belmont' has bid on or is currently winning.
> 
> 0068-70931	    1	Qty assorted kitchen ware
> 0087-70931	    1	Dining table
> ...




Is JC buying some catering equipment for a last supper before leaving our presence?


----------



## Solly (24 May 2009)

*"Julie Cassimatis chases seized items on-line"*

"Her family's $400 million fortune is gone and her business is bankrupt, but Storm Financial founder Julie Cassimatis seemingly can't let go of her favourite things."

See more by Daryl Passmore and and Mitch Gaynor in The Sunday Mail here;

http://www.news.com.au/couriermail/story/0,20797,25527720-3122,00.html


Also for those interested the latest bid on the Expresso Machine is $1409.

It must be quite a unit as Grays advise that it is the buyers responsibility to supply professional plumbing for its removal.


----------



## Julia (24 May 2009)

I can't think of anything much more humiliating than seeing your personal possessions up for auction.


----------



## Solly (24 May 2009)

One rather item that I find a little baffling for a financial advisory company to own is a gun/rifle safe...




It's up for auction here;

http://www.graysonline.com.au/lot.asp?LOT_ID=3632298

Maybe it could have had other uses like locking up the Grange or storing the company back up data tapes....Any ideas gg ?


----------



## Solly (24 May 2009)

Solly said:


> *"Julie Cassimatis chases seized items on-line"*
> 
> "Her family's $400 million fortune is gone and her business is bankrupt, but Storm Financial founder Julie Cassimatis seemingly can't let go of her favourite things."
> 
> ...





Another item in the article that could be of some encouragement to the ex-clients is this -

"Behind the scenes, it was understood the Commonwealth Bank and law firm Slater and Gordon were on the verge of a deal that could see thousands of investors escape from their crippling financial situation."

I will be very interested to see what remedy is offered

Good luck "Stormers" !


----------



## Soft Dough (24 May 2009)

Solly said:


> *Also for those interested the latest bid on the Expresso Machine is $1409.
> *



*

I might just buy it to annoy ol' Julie*


----------



## Solly (24 May 2009)

Soft Dough said:


> I might just buy it to annoy ol' Julie




The present bidding for the San Marino SME/2-LS espresso machine 

is at  $1759 with "JC- Belmont" being out bid at the moment.

This could become quite a hot item and turn into 

"The Great Storm Espresso Machine Bidding Battle" 

and will be very interesting to see who nails it at 7:00pm Monday.

The San Marino is quite a sturdy unit, 
I believe you can even mount them in mobile coffee vans.


----------



## awg (24 May 2009)

Solly said:


> One rather item that I find a little baffling for a financial advisory company to own is a gun/rifle safe...
> 
> 
> 
> Maybe it could have had other uses like locking up the Grange or storing the company back up data tapes....Any ideas gg ?







I reckon it probably had inside what Gun safes are made to hold.

IMO some of the investors on his books would have been the sort to request there money back with intent.

Do you reckon Manny would be a bit paranoid toward the end?

It isnt illegal to have guns, so long as you have a licence.


----------



## Garpal Gumnut (24 May 2009)

re The Graysonline auction, of Storm effects and baubles.


It may suit those who having cash that may be at risk in the future, to turn that cash into goods,

The goods may be more easily distributed to family and friends should the cash be at risk of removal should that future I outline in the paragraph below ensue. 

Such a scenario could develop through bad luck, bad investment or adverse decisions by creditors, or courts, and thus the cash would be at risk of sequestration..

Its rather similar to the $10 million dollar thread, cash and real estate is more easily traced. The auction baubles can be gifted.

https://www.aussiestockforums.com/forums/showthread.php?t=15630

Now I am not suggesting that folk bidding on Graysonline would do such a nefarious thing, but just suggesting it as a possibility for a small minority of bidders at auctions of all types. 

There may be some bargains but none of the stuff appeals to me, and to my knowledge I have debts only that decrease my taxable income through legal means, which I can easily repay through capital cash assets.

gg


----------



## Solly (26 May 2009)

*"The supposedly perfect Storm, gone for a song"*

"The last vestiges of Storm Financial opulence have  
gone under the hammer."


"`JC' was outbid on several items including a number of sofas and armchairs, sideboards, an ottoman and assorted kitchenware."


Story by Chris Quagliata in The Townsville Bulletin is here;


http://www.townsvillebulletin.com.au/article/2009/05/26/55471_hpnews.html


----------



## Garpal Gumnut (26 May 2009)

Solly said:


> "The last vestiges of Storm Financial opulence have
> gone under the hammer."




I would have to strongly disagree with that statement from the article.

Thousands will have to sell up, dispose of real estate and goods.

Many farms will be sold , particularly some old Italian ones in the Burdekin  and Ingham, Atherton areas.

No the hammers are not finished yet mate.

There are many angry people out there.

Hammers will be used again.

gg


----------



## maccka (26 May 2009)

Garpal Gumnut said:


> I would have to strongly disagree with that statement from the article.
> 
> Thousands will have to sell up, dispose of real estate and goods.
> 
> ...





Sadly GG - I have to agree on that.  

The next couple of months will constitute crunch time for many.


----------



## SJG1974 (29 May 2009)

Well another week goes by and still the cassimatis.com.au site is still temporarily down whilst the content is updated.

Manny hasn't made any appearances and we still await the great Cereberus and his informed opinions on the inner workings of this mess.

Manny....Cereberus....where are you??


----------



## Steve Borden (29 May 2009)

SJG1974 said:


> Well another week goes by and still the cassimatis.com.au site is still temporarily down whilst the content is updated.
> 
> Manny hasn't made any appearances and we still await the great Cereberus and his informed opinions on the inner workings of this mess.
> 
> Manny....Cereberus....where are you??




Manny's in Townsville for a christening this weekend.


----------



## donteventryit (29 May 2009)

Steve Borden said:


> Manny's in Townsville for a christening this weekend.




Isn't it his daughter's 21st in Townsville also?


----------



## -Bevo- (29 May 2009)

SJG1974 said:


> Well another week goes by and still the cassimatis.com.au site is still temporarily down whilst the content is updated.
> 
> Manny hasn't made any appearances and we still await the great Cereberus and his informed opinions on the inner workings of this mess.
> 
> Manny....Cereberus....where are you??




Id doubt the website will ever get updated, although I would like to be proven wrong.
I think the only content update happening is the contents of a certain Belmont address after JCs little spending spree.


----------



## Solly (30 May 2009)

*"Storm fallout"*

"THE Commonwealth Bank is facing mounting pressure for its part in the Storm Financial debacle amid speculation the Cassimatises will re-ignite their legal battle against the bank."

Read more here by Tony Raggatt in The Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/05/30/56365_hpnews.html


----------



## Solly (30 May 2009)

*Does anybody have an update on Ron Jelich?*

I'm not aware of anything since this article from Feb.


http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/jelich-breaks-his-silence-on-storm/


----------



## Smiley (30 May 2009)

from one who is well informed -
Re Ron Jelich, ex MLC, ex top official at Storm, followed Manny right off the clliff  . . . . speaking to ASIC and feeling guilty, hear he's preparing a submission for enquiry
Manny not likely to be Cerebrus unless someone helping him log on . . . IT skills are minimal
perhaps EC and JC in town to collect their purchases from headquarters and check on the various houses purchased late 2008 . . . .
Bank info on all Storm loans was tracked by Manny but just hoped Cwth/Colonial would carry debts - he knew clients were in negative equity - data online told him, banks told him, some clients told him . . . .
Enquiry coming to town 2nd Sept 09:
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/index.htm


----------



## Solly (4 June 2009)

*"ASIC chair blames flawed models"*

"The ASIC chairman then went on to cite as an example the extensive use of margin loans with margin to value ratios that could not sustain the market downturn.

He said a good example was Storm Financial where “for example, margin lending was extended to a ‘whole balance sheet’ (ie, against all of an investor’s assets) with additional leverage against unrealised gains as the market rose."


See the full article in Money Management here;

http://www.moneymanagement.com.au/article/ASIC-chair-blames-flawed-models/483911.aspx


----------



## chrisgee (5 June 2009)

has anybody got any good news for the storm people? we haven't got any closer to resolving things. some friends are still waiting to see what the bank can do but i fear it wont be much. i see mr cassimatis may be taking action against the comm bank...good luck with that i say. i read mr gg is in russia does anubody up in townsville got any news ? are assic still there? i wish this would really hurry up and get resolved. i fear its going to be a long cold winter ahead.


----------



## Solly (5 June 2009)

*FEDERAL COURT OF AUSTRALIA*
Queensland Registry
Tuesday, 9 June 2009

Commonwealth Law Courts Building
119 North Quay

10:15 AM Interlocutory Hearing

1 QUD73/2009 STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (ADMINISTRATORS APPOINTED) 
v VICTORIAN FAMILIES RETIREMENT & INVESTMENT GROUP PTY LTD


----------



## Ferret (6 June 2009)

chrisgee said:


> i wish this would really hurry up and get resolved. i fear its going to be a long cold winter ahead.




Sorry, Chris, but I wouldn't hold your breath.  The money's gone and its unlikely any investors will ever see any compensation for their losses.

From here on its about whether EC, JC or the various lending banks are guilty of any wrong doings and end up fined or imprisoned.


----------



## Trevor_S (6 June 2009)

chrisgee said:


> i wish this would really hurry up and get resolved. i fear its going to be a long cold winter ahead.




It will be 20 years *at least* before it's finished, based on other similar instances.


----------



## pilots (6 June 2009)

As long as a lawyer some place can still make out of this it will never be over, the ONLY thing thats over is any hope of the punters getting ANY money back at all.


----------



## Solly (7 June 2009)

*It is reported in the Daily Telegraph that Andrew Symonds,* 

"...had up to $4million in his portfolio after borrowing $1million to invest with Storm Financial Group.

Four weeks later, the company was doomed, robbing Symonds of a seven-figure sum, said to be $1.5million. In the same month, Symonds clashed with a fan at Brisbane pub the Normanby, earning a rebuke from CA."

See the article by Peter Badel here;

http://www.news.com.au/dailytelegraph/story/0,22049,25597314-5006069,00.html

Roy's had a lot on his mind lately, it makes me wonder what were the contributory factors for his recent wayward behaviour. I believe that there are members of his family that have also lost money with Storm.


----------



## Solly (7 June 2009)

*An article by Anthony Marx in the Weekend edition of The Courier Mail *
describes the plight of ex Storm clients Keith &  Diane Ensor and Des & Teresa Lockett.

The article describes the plight of the Ensors as they are forced to sell their family home, the Comm Bank required they repay more than $100,000 in margin loans. They once had nearly $2 million in their portfolio and now have an old Corolla and a 17 year old caravan, are living in near poverty and have nowhere to call home.

The Locketts, who wanted to be self funded retirees, lost $1.2 million, are struggling to survive, sold their home, have their belongings in storage, now live in a tiny duplex and are selling their cars . Ms Lockett dry-wretched for weeks when they got the margin call, is unwell and on medication to help cope. 

The article says that the Cassimatis' are still living in their substantial dwelling at Belmont.

If you can get a copy of the paper, you can read the whole article on page 37. 

I am eager to see the outcomes of all the investigations into the Storm saga and identify the root cause of the collapse and associated repercussions.


----------



## pilots (7 June 2009)

Solly said:


> *An article by Anthony Marx in the Weekend edition of The Courier Mail *
> describes the plight of ex Storm clients Keith &  Diane Ensor and Des & Teresa Lockett.
> 
> The article describes the plight of the Ensors as they are forced to sell their family home, the Comm Bank required they repay more than $100,000 in margin loans. They once had nearly $2 million in their portfolio and now have an old Corolla and a 17 year old caravan, are living in near poverty and have nowhere to call home.
> ...




Solly, So tell me this, was a gun held to the Locketts head at any time, to make them buy in to this get rich rip off, or was it that they was naive, or was they just plan GREEDY, you tell me what made them do it.


----------



## Solly (7 June 2009)

pilots said:


> Solly, So tell me this, was a gun held to the Locketts head at any time, to make them buy in to this get rich rip off, or was it that they was naive, or was they just plan GREEDY, you tell me what made them do it.




I have no direct knowledge of why the persons mentioned in the article invested in Storm. But others I have met have told me that they invested in Storm because they trusted that Storm would be able to give them a safe comfortable income stream in retirement. 

The yearly income they told me that they were expecting, to me was quite modest. I wouldn't call the ex clients I have met as being greedy, I saw no outwardly obvious sign of wealth. They had quite modest homes, cars and lifestyles.

I was horrified when one ex client explained to me their level of debt and gearing. Although at the time they did not see any real risk of their exposure to the volatility of the markets. 

They had an unshakable belief in the abilities of Storm and EC to be able to ride out of any problems looking after their portfolio and their future. Even when the situation turn dire they were confident that all would be ok.

These particular ex clients are now barely able to feed themselves, service their existing debts and have no nest egg for retirement. They realise they are responsible for agreeing to go with Storm but they are mystified how with all the perceived checks and balances that are in place how they are now left with less than nothing.

I have a vivid recollection of speaking on the phone with this ex Storm client regarding the massive problems facing him and hearing the sound of his wife vomiting in the background.


----------



## Soft Dough (7 June 2009)

Solly said:


> The yearly income they told me that they were expecting, to me was quite modest. I wouldn't call the ex clients I have met as being greedy, I saw no outwardly obvious sign of wealth. They had quite modest homes, cars and lifestyles.




Why did nobody question as to why they needed gearing when 1.2 million at 4% is approximately $50k per annum almost tax free.

Why?

Because they wanted to significantly outperform the market and were prepared to take the risk in doing so.

Also

because their advisors were greedy and unethical in not having plans to suit individual situations, and hence risk tolerance.

I blame 

50% Emmanuel Cassimatis
50% The investors - who were either naive or greedy, and there is no excuse for either when investing millions of dollars.

Final parting message.

NEVER EVER rely on someone else to protect your millions when they are making commissions on your money. Research the risks, benefits, strategies and fees yourself AND have your accountant go over it AND get a second opinion.  If people did this, Storm would never have existed, or would never have been able to put people into the situation they were put in.


----------



## pilots (7 June 2009)

Solly said:


> I have no direct knowledge of why the persons mentioned in the article invested in Storm. But others I have met have told me that they invested in Storm because they trusted that Storm would be able to give them a safe comfortable income stream in retirement.
> 
> The yearly income they told me that they were expecting, to me was quite modest. I wouldn't call the ex clients I have met as being greedy, I saw no outwardly obvious sign of wealth. They had quite modest homes, cars and lifestyles.
> 
> ...




The first thing we learnt was to have a balanced portfolio, tell me what did they have apart from Storm??? my bet is they had all the eggs in one basket


----------



## Solly (7 June 2009)

pilots said:


> The first thing we learnt was to have a balanced portfolio, tell me what did they have apart from Storm??? my bet is they had all the eggs in one basket




Correct...


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## Julia (7 June 2009)

pilots said:


> The first thing we learnt was to have a balanced portfolio, tell me what did they have apart from Storm??? my bet is they had all the eggs in one basket



Well, if Storm had been genuinely an all round Financial Adviser they would have advised on investments other than just the share market, wouldn't they?

So when you say they had 'all the eggs in one basket' clients should still have been able to expect Storm to invest their funds across several asset classes, including cash.  Obviously this didn't happen.

The point I'm trying to make (badly I think) is that going to just one financial adviser should not be considered the eggs in one basket as that adviser should provide advice for one's whole situation.


----------



## Solly (8 June 2009)

I have found some of the submissions to the 
Inquiry into Financial Products and Services in Australia 
are quite interesting.

The submissions can be found here:

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm

One submission I found interesting is submission number 30 by 
Sean and Paula McArdle who are former Storm clients.

Sean McArdle is a Forensic police officer and Sergeant with 20 years service with the QLD Police. 
On page 6 of their submission it is stated that the McArdles believe, 

"that criminal activity has occurred during the brokering and approval stages of loans  ........ 
and bribes been given to senior CBA staff for loan approvals. This criminal activity applies equally to both Storm and Bank staff."

Here is the link to their submission; 

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub30.pdf

I trust that the full details of their claims of criminal activity have been given to the appropriate investigating bodies 
and will be fully investigated and be quickly substantiated or dismissed.


----------



## darkside (8 June 2009)

I do sympathsise with the Mcardle's in their submission, as i am sure everyone on this site does, i also see pages upon pages of questions and accusations leveled at all and sundrie in their affidavid, does anyone else not see that if a tenth of the research and effort was put in before actually signing on the bottom line and throwing "hard earned coin" at a over zealous but under performing   Storm Salesman they wouldn't be in this position.
Perhaps Sean could have pooped his head in next door and had a chat with the boys in the "Fraud Squad", they would have used that worn out old addage " matey, if it looks too good, well it is " and if your not shown a Terms and Conditions document after insisting on it ,  maybe you should walk away, thats just my opinion, i'm sure everyone else on here has their own. On a plus side , being in forensics at least he will be able to see how it unfolded and where it went.


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## pilots (8 June 2009)

Darkside, what a lot of people don't under stand is that 9 out of 10 FP are only sales people, no different to a car sales man. Most of the Storm mob had all the eggs in the one basket.


----------



## darkside (8 June 2009)

pilots said:


> Darkside, what a lot of people don't under stand is that 9 out of 10 FP are only sales people, no different to a car sales man. Most of the Storm mob had all the eggs in the one basket.




Pilots, so true , hence my reference to "over zealous, yet under performing sales people" and i bet a lot of these people , actually research their car purchase way more thoroughly, and shop around more before buying that 4 year old 2nd hand commodore that costs them a shade over $10,000 and they have to repay for a few years , yet sign up for million dollar plus margin loan with out even reading the term and conditions.


----------



## pilots (8 June 2009)

We have in our street a FP, he is about 55/60, his wife told mine that they have just paid off the car they have, it is a bout five years old, he is still renting a house, now people go to him for advice, and yet he has not got his own act together at that age. When you see him go to work each day he looks and talks like he has a million dollars.


----------



## Solly (8 June 2009)

pilots said:


> We have in our street a FP, he is about 55/60, his wife told mine that they have just paid off the car they have, it is a bout five years old, he is still renting a house, now people go to him for advice, and yet he has not got his own act together at that age. When you see him go to work each day he looks and talks like he has a million dollars.





Does FP = Financial Plodder..:


----------



## asproboy (9 June 2009)

pilots said:


> We have in our street a FP, he is about 55/60, his wife told mine that they have just paid off the car they have, it is a bout five years old, he is still renting a house, now people go to him for advice, and yet he has not got his own act together at that age. When you see him go to work each day he looks and talks like he has a million dollars.






Solly said:


> Does FP = Financial Plodder..:




I must say I'm confused by these views on Financial Planner personal wealth, particularly in light of the 'greed = guilty' nature of a lot of this thread's posts! At the risk of going off-topic, do you want your financial planner to have obvious wealth (at the risk of being labelled a 'scamster' - EC I'm thinking of you) or do you want someone who's role-modelling living within your means, building a secure nest-egg, focusing on an active portfolio rather than non-growth assets such as the family home (at the risk of perceptions that you don't even have your own house in order)?

Pilots, I have no idea of the personal circumstances of your neighbour, how long he's been an FP, what his work/life balance is like or his level of wealth that may be inapparent to the casual observer. Nor the type of advice he offers.

Am I alone in thinking a financial planner who's socially-minded, delivers sound advice that helps his clients rest easy with solid wealth strategies, charges reasonably to support his business and himself with a modest lifestyle while setting he and his wife for a secure future is a GOOD thing? 

It's intrigued me for a long time that people saw Manny making more money than he could prudently spend and couldn't wait to get on board, not realising THEY were the ones getting gouged for his benefit!!


----------



## chrisgee (9 June 2009)

asproboy said:


> I must say I'm confused by these views on Financial Planner personal wealth, particularly in light of the 'greed = guilty' nature of a lot of this thread's posts! At the risk of going off-topic, do you want your financial planner to have obvious wealth (at the risk of being labelled a 'scamster' - EC I'm thinking of you) or do you want someone who's role-modelling living within your means, building a secure nest-egg, focusing on an active portfolio rather than non-growth assets such as the family home (at the risk of perceptions that you don't even have your own house in order)?
> 
> Pilots, I have no idea of the personal circumstances of your neighbour, how long he's been an FP, what his work/life balance is like or his level of wealth that may be inapparent to the casual observer. Nor the type of advice he offers.
> 
> ...




hey we thought we were getting good sound advice. thungs didnt look like a scam i really think storm really believed taht they had a stratedgy that worked. i dont think that the cassimatises thought it would fall over. they havent run away they are still here they didnt bolt off. evetybody is a salesman, in your job i bet you sell things, so do i , so do banks , other finnancial planners , everybody sells something. 
peple like to beat up all the stom clients they are not a bunch of no hopers and morons. everybody thouight they were doing the right thing. storm complied with all the government rules, assic said they were ok, they had funds branded by the comminwealth bank/cololinal etc. 
and who on this forum doesnt want to be financially secure ???

things are taking thier toll on the family but somehow we will get through this. of course we all want to have a rich life, look at the haeds of the banks, the insurance companies, phone companies, private companies etc they can live a good life . what cant we with out being scorned for wanting to have a better life. our problem is we backed the wrong horse


----------



## nomore4s (9 June 2009)

chrisgee said:


> things didnt look like a scam i really think storm really believed that they had a stratedgy that worked. i dont think that the cassimatises thought it would fall over.




It is a strategy that will work in the right conditions. If you are advising your clients to take on this sort of strategy you also need to be able to recognise when conditions change and advise them to reduce gearing levels ASAP.


----------



## Dark Leopard (9 June 2009)

I have been a long time visitor to this forum to watch and read what is happening with this whole Storm saga.

I am sure that there is much more to come. 

I am sure many will be very surprised about what will be revealed.

There are many twists and turns still to come and much, much more to come out.

Those who have done nothing wrong have nothing to fear.

I have full confidence in those who are behind the investigations into this whole matter.

No stone must be left unturned.


----------



## Kez180 (9 June 2009)

Dark Leopard said:


> I have been a long time visitor to this forum to watch and read what is happening with this whole Storm saga.
> 
> I am sure that there is much more to come.
> 
> ...




Why is it that half the people involved with this whole debacle speak/write in semi cryptic gobblygook... 

and wtf? dark leopard, its called a panther you spanker....


----------



## darkside (9 June 2009)

Kez180 said:


> Why is it that half the people involved with this whole debacle speak/write in semi cryptic gobblygook...
> 
> and wtf? dark leopard, its called a panther you spanker....




KEZ180, matey that was a touch harsh, clearly dark leopard is in the know and has his finger on the pulse , surely your not claiming you knew there was more to come , i thought it was all over, :there are more twists and turns ,,, no way , once again i thought it was all cut and dry. And Those who have done nothing wrong have nothing to fear, see i believed those who had done nothing wrong would have been whipped on the D*** with a wet shoelace. And as for cryptic him and "cerebus" must get together, speaking of which, he promised so much and delivered, well, we all know that one.


----------



## Solly (9 June 2009)

Dark Leopard said:


> I have been a long time visitor to this forum to watch and read what is happening with this whole Storm saga.
> 
> I am sure that there is much more to come.
> 
> ...




Is there anything specific you can share with us?

Is there something that is about to happen?

Are you connected to Storm ?


----------



## Solly (9 June 2009)

Solly said:


> I have found some of the submissions to the
> Inquiry into Financial Products and Services in Australia
> are quite interesting.
> 
> ...





For those who are interested the McArdles have posted a supplementary submission which I believe is the 2nd of 3 submissions that they will post.

It is here at this link

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub30a.pdf


----------



## Solly (9 June 2009)

Smiley said:


> from one who is well informed -
> Re Ron Jelich, ex MLC, ex top official at Storm, followed Manny right off the clliff  . . . . speaking to ASIC and feeling guilty, hear he's preparing a submission for enquiry
> Manny not likely to be Cerebrus unless someone helping him log on . . . IT skills are minimal
> perhaps EC and JC in town to collect their purchases from headquarters and check on the various houses purchased late 2008 . . . .
> ...





*RADOMIR (RON) JELICH has sent his submission to the*
Inquiry into Financial Products and Services in Australia,
some quite interesting reading.

Read it here, submission number 54
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub54.pdf


----------



## darkside (9 June 2009)

Solly, or anyone that may know, a lot of the agents came from MLC according to Ron Jelich in his submission, did they just leave MLC and take their client base or did MLC not trade any longer in these areas and they just picked up the slack , i can't work out the link between the companys ?


----------



## Solly (10 June 2009)

*"Bank 'linked' system to Storm"*

"THE Commonwealth Bank devised a computer system that encouraged clients of Storm Financial to increase their borrowing, making them more vulnerable to a sharemarket plunge, according to a former senior manager of the collapsed financial planner.

A submission to a Government inquiry by Ron Jelich focuses on the close relationship between the Commonwealth, its subsidiary Colonial First State, and Storm, which was placed into voluntary administration in January."


The full story is here by Jacob Saulwick in the SMH;

http://business.smh.com.au/business/bank-linked-system-to-storm-20090609-c288.html


----------



## Solly (10 June 2009)

darkside said:


> Solly, or anyone that may know, a lot of the agents came from MLC according to Ron Jelich in his submission, did they just leave MLC and take their client base or did MLC not trade any longer in these areas and they just picked up the slack , i can't work out the link between the companys ?




darkside, this may help, these are my recollections of EC's MLC link based on Storm's old website Multimedia presentation. 

In 1972 EC had an agency with MLC Life and within 5 years was MLC's highest producing agent in the country and stayed in that position for the next 14 years. He specialised in life and risk insurance and superannuation. He was awarded MLC's Garvan medal and was inducted into the MLC Hall of Fame. In 1980 JC worked in the MLC offices, in approx 1983 she was granted an MLC agency and was one of the MLC Top Ten Achievers. From 1996 EC & JC merged businesses and became Cassimatis Securities P/L and were a total financial planning business and also got their own dealers licence. Ozdaq & Storm then followed.


----------



## Smiley (10 June 2009)

As Ron details in his submission a lot of MLC insurance salesman left MLC to go independent/to EC - including one ex-bankrupt, some asked to leave MLC for non compliance . . . recruited to Ozdaq/Storm . . . interesting David McCullough and Carey Fraser are ex Cwth Bank employees . . . . 
Now have more of the picture . . .there is an applicable term in all this - Greek actually - 'hubris' about those who tempt the gods - really their egos get too big and then the gods strike them down . . . think EC did not believe market would drop to the extent it did (this can't happen to me attitude) and if it did he thought banks would just carry his debt and that of those in margin call . . .the ego got so inflated it had to burst (some almost divine force struck) and did EC & JC care about their clients?  . .  they're still in the Belmont mansion and buying up big  . . . Ron made a good point about millions going missing in Dec - more than 2 million . . . .bring on the parliamnetary enquiry


----------



## Garpal Gumnut (10 June 2009)

Smiley said:


> As Ron details in his submission a lot of MLC insurance salesman left MLC to go independent/to EC - including one ex-bankrupt, some asked to leave MLC for non compliance . . . recruited to Ozdaq/Storm . . . interesting David McCullough and Carey Fraser are ex Cwth Bank employees . . . .
> Now have more of the picture . . .there is an applicable term in all this - Greek actually - 'hubris' about those who tempt the gods - really their egos get too big and then the gods strike them down . . . think EC did not believe market would drop to the extent it did (this can't happen to me attitude) and if it did he thought banks would just carry his debt and that of those in margin call . . .the ego got so inflated it had to burst (some almost divine force struck) and did EC & JC care about their clients?  . .  they're still in the Belmont mansion and buying up big  . . . Ron made a good point about millions going missing in Dec - more than 2 million . . . .bring on the parliamnetary enquiry




Its always easier to get money back when you've been done over by one person. Then you know that person and you can apply pressure to get back the money.

It sounds like these poor stormers have been done over by hundreds of people, all feeding off their naievity, a few thou here , a few thou there, a million here a million there.

So , it is more difficult to put pressure on hundreds of people who have ripped you off, because of the number of them,  you would need to employ hundreds of people to apply the pressure.

So , the stormers have zilch chance of getting anything back in my opinion.

This will go on forever, and Manny will resurrect.

And a Cohiba to the first person who pms me with the name of the poster in this thread recently who has to be Manny in disguise. He uses the same crap English syntax that was on Manny's site before it went down, a linguist mate of mine tells me.

gg


----------



## Trevor_S (10 June 2009)

Dark Leopard said:


> Those who have done nothing wrong have nothing to fear.




That I vehemently disagree with that.  I have been embroiled in the past in quasi legislative enquiries where I have done nothing wrong but expediency insists I might have.  Truth is not the outcome of the legal system.



Garpal Gumnut said:


> So , the stormers have zilch chance of getting anything back in my opinion.




Agree.



Garpal Gumnut said:


> This will go on forever




Agree.



Garpal Gumnut said:


> , and Manny will resurrect.




Agree.  Sh_it floats 

and I don't think people can be protected from the likes, it is repeated all the time.  Peoples own desire to "better themselves financially" with no self education, will see to that. 

All I can say is best of luck to them though... I hope they manage to shake it off.  I would be interested to revisit in 10 years and 20 years if it wasn't to painful for those that still lived.


----------



## Quincy (10 June 2009)

Dark Leopard said:


> . . . I am sure many will be very surprised about what will be revealed.






Garpal Gumnut said:


> This will go on forever, and Manny will resurrect.
> 
> gg




Maybe something like this : - 


*==>*


----------



## Dark Leopard (10 June 2009)

Well my appearance on the forum has caused a slight stir. For those who are wondering, I am in no way connected to Storm, the principals or the industry.

I'm just an observer, a helper and a friend to those in need. I have observed first hand the anguish, the pain and the suffering. I'm here to assist in small measured manner.

I'm sure there are many who are a little uncomfortable.

The truth carries weight, just wait and see.


----------



## Mash (10 June 2009)

A big welcome to Dark Leopard.... us storm survivors need all the help we can get...and we are willing to take support and help from whoever is willing or able to provide it.. we know we did nothing  wrong..and a big raspberry to those who think the banks are totally blameless in this mess.........  as you say "the truth carries weight".... the truth will come out....hopefully sooner rather than later.... until then we will continue to support each other in any way we can.....


----------



## Garpal Gumnut (10 June 2009)

Dark Leopard said:


> Well my appearance on the forum has caused a slight stir. For those who are wondering, I am in no way connected to Storm, the principals or the industry.
> 
> I'm just an observer, a helper and a friend to those in need. I have observed first hand the anguish, the pain and the suffering. I'm here to assist in small measured manner.
> 
> ...






Mash said:


> A big welcome to Dark Leopard.... us storm survivors need all the help we can get...and we are willing to take support and help from whoever is willing or able to provide it.. we know we did nothing  wrong..and a big raspberry to those who think the banks are totally blameless in this mess.........  as you say "the truth carries weight".... the truth will come out....hopefully sooner rather than later.... until then we will continue to support each other in any way we can.....




Jayzoo, jayzoo, jayzoo,

What is the difference between a Storm Victim and a Storm Survivor, pray tell in this hyperspace that the fallen occupy.

gg


----------



## Green08 (10 June 2009)

Dark Leopard said:


> I'm just an observer, a helper and a friend to those in need.




ahhh but which gender are you




​


----------



## Soft Dough (10 June 2009)

Dark Leopard said:


> I have been a long time visitor to this forum to watch and read what is happening with this whole Storm saga.
> 
> I am sure that there is much more to come.
> 
> ...




Lucky there is someone here like you, who no doubt knows what a dog, and what a misleading useless ripoff fool Emmanuel Cassimatis is am I right?

I like it when people like you and Cerebrus come to places like this, it makes us believe that people like Emmanuel Cassimatis REALLY is interested in the lives he destroyed, or perhaps just his life, which even though is still opulent, is nowhere near as private, and pleasurable as it was before he took down many innocent, though naive investors with his greed. I'd hate to be him at the moment, he has no friends, and probably can't sleep at night, gets sweats and probably knows where the smoking guns are that would put him away for good... but then again nobody will be smart enough to find them I guess.

Welcome to the forum


----------



## Solly (10 June 2009)

*"Founder readied Storm for CBA injection"*

"At the height of last year's financial crisis Storm Financial's founder, Emmanuel Cassimatis, allegedly altered the full extent of the business's current liabilities as the now failed group attempted to make a funding deal with the Commonwealth Bank."

See the article here by Stuart Washington in the SMH.

http://business.theage.com.au/business/founder-readied-storm-for-cba-injection-20090610-c2u4.html


Stuart has asked in his article, 

"Exactly why there were delays in acting on people's margin loans has not been clearly answered by Colonial Geared Investments or Storm Financial"

Do you know what happened between October and December? 
E-mail swashington@smh.com.au


----------



## Solly (10 June 2009)

*"New advisers emerge for remaining Storm Financial clients"*


"A wholly-owned subsidiary of Financial Index Australia, FIA Agencies, has emerged as the purchaser of the remainder of the Storm Financial client book.'

See the article here by Liam Egan in Money Management;


http://www.moneymanagement.com.au/article/New-advisers-emerge-for-remaining-Storm-Financial-clients/485609.aspx


----------



## Solly (10 June 2009)

*"Colonial Geared Investments' systems were flawed: former Storm Financial executive"*

"The Commonwealth Bank of Australia’s Colonial Geared Investments arm did not have the human or technological resources to handle the share market meltdown and the subsequent sell-down of Storm Financial clients’ share portfolios, a parliamentary inquiry has heard."

Story here by Lucinda Beaman in Money Management;

http://www.moneymanagement.com.au/article/Colonial-Geared-Investments-systems-were-flawed-former-Storm-Financial-executive/485380.aspx


----------



## Julia (10 June 2009)

Dark Leopard said:


> I have been a long time visitor to this forum to watch and read what is happening with this whole Storm saga.
> 
> I am sure that there is much more to come.
> 
> ...






Dark Leopard said:


> Well my appearance on the forum has caused a slight stir. For those who are wondering, I am in no way connected to Storm, the principals or the industry.
> 
> I'm just an observer, a helper and a friend to those in need. I have observed first hand the anguish, the pain and the suffering. I'm here to assist in small measured manner.
> 
> ...



I don't want to be rude, but I can't see the point of your two posts, Dark Leopard.

If you have something useful to contribute, why not simply post it?

The attempt at building up suspense just seems a bit silly to me.


----------



## Solly (11 June 2009)

*"Storm cosy with CBA"*

"A COSY relationship between Storm Financial and the Commonwealth Bank led to relaxed prudential standards and `creative' handling of clients' asset valuations and loan applications, a former business development manager to the failed wealth adviser has claimed."


More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/06/11/58331_hpnews.html


----------



## Solly (11 June 2009)

* "Storm tried to 'help' investors"*

"STORM Financial's dying days are revealed in a document that shows the desperate attempts by Storm founder Emmanuel Cassimatis to keep his business alive as it sought funding from Commonwealth Bank."

"....Storm said it was attempting to forestall customers' margin calls by spending $300,000 to $400,000 a month."

More by Stuart Washington in The Age here;

http://business.theage.com.au/business/storm-tried-to-help-investors-20090610-c3oa.html


----------



## Quincy (11 June 2009)

*Storm helped by CBA valuations*



> The forthcoming inquiry into financial services has found the Commonwealth Bank of Australia (CBA) and Storm processed $25 million worth of loan applications from Storm's clients on June 30 to meet the end of year deadline, reported The Australian Financial Review newspaper.
> 
> The paper reported the loan applications were made by clients who wanted to take advantage of upgraded valuations on their homes to borrow money to invest in Storm-linked index funds.




See HERE


----------



## Dark Leopard (11 June 2009)

I have short message for all who are touched by this unfortunate episode.

There are many good men and woman working on the side of right, investigators, enforcers and lawmakers can only do so much.

They need your help.

There are many who are yet to contribute, many who know much more.

Come forward, divulge and tell.

There are many avenues to assist.

Truth will out.


----------



## Soft Dough (11 June 2009)

Dark Leopard said:


> I have short message for all who are touched by this unfortunate episode.
> 
> There are many good men and woman working on the side of right, investigators, enforcers and lawmakers can only do so much.
> 
> ...




Sure, but you will never ever post anything about Emmanuel Cassimatis and his poor management, which lead his clients into financial ruin, whilst he hid behind a company structure.

He was always a salesman, and his greed for commission lead him to overgear people of retirement age.

Can you post your opinions about Emmanuel Cassimatis?  Or is it a bit difficult for you to do so?

"I have a short message for all the people who have been mislead and ill-informed by storm financial

There were many good men and women who trusted this company with their money, but unfortunately there were no checks in place to protect their assets.

they now need help

There is one person who can contribute, who knows much much more

Come forward manny, confess and tell

The authorities will assist

Prison no doubt?"


----------



## carey ramm (11 June 2009)

AFR has a very interesting read on the front page and page 62 and 63 today .... (makes 3 front pages for storm in the AFR - something EC couldnt manage when storm was still operating)

http://www.afr.com/home/login.aspx?ATL://20090611000031236211&section=News

really makes u wonder if some of these banks are really fit and proper to hold a banking license

also seems to be the start of storm insiders starting to come out ... must be plenty of guilty consciences out there!

it is also very interesting to see that ASIC have concerns about the terms of the CBA settlements that are occurring  - if CBA have done nothing wrong then they should have no problem allowing clients legal redress if it is found the CBA has acted improperly

GG i bet u a beer (at The Brewery of course) that:

1. Stormers will get something back (there are already substantial numbers that have taken bank settlements and improved their position from where it was)
2. It will not go on forever - yes it may take a year or two but not a decade

In terms of that Cohiba i think we can be pretty confident that many people read this forum regularly (it has a huge number iof hits) so my money is on JC from Belmont - the infamous grays online bidder!

This forum is very much troll central....


----------



## Dark Leopard (11 June 2009)

As it is stated - Evil triumphs when good people do nothing.

Now is the time to come forward whether you were associated with Storm, the Banking sector or have substantiated knowledge that will assist to end the suffering of those adversely affected by this event.

There are many faceless people working with much energy in the background giving their all, eager to see the successful positive finalisation of this episode.

If you can help, the ball is in your court.

Be brave, be true.


----------



## jonnycage (11 June 2009)

apart from the cryptic posts  def leopard,  do you really have anything
of substance to offer ?  just another manny in disguise ?  yawn

jc


----------



## -Bevo- (11 June 2009)

Dark Leopard said:


> As it is stated - Evil triumphs when good people do nothing.
> 
> Now is the time to come forward whether you were associated with Storm, the Banking sector or have substantiated knowledge that will assist to end the suffering of those adversely affected by this event.
> 
> ...




Hi Dark Leopard,

Can you tell me when you plan to bring your website back its still Temporarily unavailable?

http://www.cassimatis.com.au/


----------



## jonnycage (11 June 2009)

-Bevo- said:


> Hi Dark Leopard,
> 
> Can you tell me when you plan to bring your website back its still Temporarily unavailable?
> 
> http://www.cassimatis.com.au/






spot on bevo,   good call mate

jc


----------



## Kez180 (11 June 2009)

can a mod please confirm that 'Cerberus' and 'Dark Leopard' have the same IP address?


----------



## Soft Dough (11 June 2009)

Dark Leopard

What do you think of Emmanuel Cassimatis?

Does it get you excited thinking about it?


----------



## Garpal Gumnut (11 June 2009)

carey ramm said:


> AFR has a very interesting read on the front page and page 62 and 63 today .... (makes 3 front pages for storm in the AFR - something EC couldnt manage when storm was still operating)
> 
> http://www.afr.com/home/login.aspx?ATL://20090611000031236211&section=News
> 
> ...




Mate, as usual you are very much a one eyed man in the land of the blind, and wise with it..

You will lose your bet, but I'll have a beer with you at the Brewery when its all over.

What amazes me are the "Storm Survivors".      http://sicag.info

They still back Manny.

Never a link to adverse publicity, media or findings against Manny and Julie.

Manny is such a good salesman, even to the end. Poor poor mugs.

gg


----------



## pilots (11 June 2009)

carey ramm said:


> AFR has a very interesting read on the front page and page 62 and 63 today .... (makes 3 front pages for storm in the AFR - something EC couldnt manage when storm was still operating)
> 
> http://www.afr.com/home/login.aspx?ATL://20090611000031236211&section=News
> 
> ...




Carey, you say that Storm holders will get some thing, I will tell you what they are going to get, they will be conned out of more money, by the way I have a real big bridge for sale in Sydney will make you a lot of money, are you interested??


----------



## Mash (11 June 2009)

GG
Certainly this "survivor" does not support ec... we just know that his ego and bad advice was aided and abetted by the banks.... he would not have spread his "crappy advice" without the backing and back room dealings from all banks...... CBA (Colonial Margin Lending),Macquarie, ANZ, NAB, Westpac and BoQ.. 

and pilots... I think you need some new material....big bridge in sydney ... yaaawn..if you can't be constructive at least be entertaining


----------



## Steve Borden (11 June 2009)

pilots said:


> Carey, you say that Storm holders will get some thing, I will tell you what they are going to get, they will be conned out of more money, by the way I have a real big bridge for sale in Sydney will make you a lot of money, are you interested??




The fact is that hundreds of CBA/Storm clients have received offers from the Bank, these offers entail a combination of the write-off of debt, reduced or no interest being charged and permanent tenancy. Many have accepted these offers and many more will accept over the coming days and weeks.

Sure they have to sign away their rights to sue the CBA or CBA Group Entities although some don't appear to have much of a case (especially those who weren't with CGI).

So if you were a CBA/Storm client who is having your debt halved or not having to pay interest on your $250k home loan ever again or at the very least know that your house is not going to sold out from under you then I would think they believe they have received something.

Of course it all depends on your agenda.


----------



## Solly (11 June 2009)

*" Storm Financial inquiry: 'Alarm bells already ringing' "*

"Inquiry chairman Bernie Ripoll says he has spoken with Storm founder, Emmanuel Cassimatis, and a picture of what happened is starting to emerge."

Story by Murray Cornish from the ABC.

http://www.abc.net.au/news/stories/2009/06/11/2595544.htm


----------



## Garpal Gumnut (11 June 2009)

Solly said:


> *" Storm Financial inquiry: 'Alarm bells already ringing' "*
> 
> "Inquiry chairman Bernie Ripoll says he has spoken with Storm founder, Emmanuel Cassimatis, and a picture of what happened is starting to emerge."
> 
> ...




Solly its a shame Bernie Ripoll hasn't spoken to you today, your forensic collection of data on this debacle shows a knowledge of the workings better than poor ole Bernie will get from Manny or CBA.

Keep it up mate.

Well done.

gg


----------



## bunyip (11 June 2009)

Dark Leopard said:


> I have short message for all who are touched by this unfortunate episode.
> 
> There are many good men and woman working on the side of right, investigators, enforcers and lawmakers can only do so much.
> 
> ...




_'Come forward, divulge and tell'_ eh? LOL

You're not Kevin Rudd by any chance, are you? That's the sort of pooncy manner of speaking that he favours!


----------



## Julia (11 June 2009)

Kez180 said:


> can a mod please confirm that 'Cerberus' and 'Dark Leopard' have the same IP address?




Might be best not to give the troll an audience.


----------



## Solly (12 June 2009)

carey ramm said:


> AFR has a very interesting read on the front page and page 62 and 63 today .... (makes 3 front pages for storm in the AFR - something EC couldnt manage when storm was still operating)
> 
> http://www.afr.com/home/login.aspx?ATL://20090611000031236211&section=News
> 
> ...




Thanks Carey for the steer to this AFR article, I just managed to finish reading it now. 

I was quite amazed where it states in Duncan Hughes' AFR article on page 60;

" A former CBA executive based in Townsville, involved on the Cassimatis account for three years, says the (the CBA VAS desktop property valuation) system was used "to deliver customers up to Storm for them to pick them off".
"The CBA proactively delivered their customers to Storm in a falling market. By offering Storm the opportunity to increase clients borrowings without first seeking the clients approval, it gave tacit approval to the Storm model."

I look forward to the CBA's response after the commencement of the federal parliamentary inquiry on June 24.


----------



## Smiley (12 June 2009)

Thanks to Steve Borden and Carey Ramm for clarity and information on this forum amidst the waffling.  It is good to hear from those who are informed and in touch with stormified clients.
By being in touch with each other two, speaking up, and the resultant publicity, ex-clients are having an influence on educating others about financial planning and what to be careful of.


----------



## Solly (12 June 2009)

*"Inquiry holds key to Storm's missing millions"*

"The final moments of Storm Financial and it's desperate dance to stay alive are becoming clearer"

More by Stuart Washington in the SMH is here;

http://business.smh.com.au/business/inquiry-holds-key-to-storms-missing-millions-20090612-c5g1.html 

Stuart also hopes that Ralph Norris is called to the inquiry to help answer the mysteries....


----------



## darkside (12 June 2009)

Also, a big thanks to solly , he has kept us well informed, dug up plenty of facts , oh and i forgot to mention , not 1 cryptic post or story that failed to deliver, i think if Bernie got to spend some time with solly he would be well informed and up to date .


----------



## Solly (12 June 2009)

Solly said:


> *"Inquiry holds key to Storm's missing millions"*
> 
> "The final moments of Storm Financial and it's desperate dance to stay alive are becoming clearer"
> 
> ...




opps crackberry prob here's the proper link;

http://business.smh.com.au/business/inquiry-holds-key-to-storms-missing-millions-20090612-c5g1.html


----------



## Solly (12 June 2009)

darkside said:


> Also, a big thanks to solly , he has kept us well informed, dug up plenty of facts , oh and i forgot to mention , not 1 cryptic post or story that failed to deliver, i think if Bernie got to spend some time with solly he would be well informed and up to date .






Garpal Gumnut said:


> Solly its a shame Bernie Ripoll hasn't spoken to you today, your forensic collection of data on this debacle shows a knowledge of the workings better than poor ole Bernie will get from Manny or CBA.
> 
> Keep it up mate.
> 
> ...




Thanks darkside & gg. Just doing a bit to help out where I can.
Had a lunchtime chat today with a Stormer who is not in a good way, hope my postings are of benefit in some way to those who visit this little quark of cyberspace. Maybe Bernie can pm me if he needs a hand. :


----------



## Kez180 (12 June 2009)

Solly said:


> Thanks darkside & gg. Just doing a bit to help out where I can.
> Had a lunchtime chat today with a Stormer who is not in a good way, hope my postings are of benefit in some way to those who visit this little quark of cyberspace. Maybe Bernie can pm me if he needs a hand. :




*Tips hat to Solly* Yeah the constant vigil for new articles has been much appreciate by myself, thank you kind sir!

~Kieran


----------



## Solly (12 June 2009)

*"Storm Financial inquiry to tour Australia"*

"INVESTORS who lost millions in the collapse of Townsville-based Storm Financial will have a chance to be heard at a series of public hearings across Australia."

More by Stefanie Balogh in the Courier Mail;

http://www.news.com.au/couriermail/story/0,23739,25616585-3122,00.html

MP Bernie Ripoll is heading the parliamentary inquiry, I might just rock up and have coffee and donut with him when he's in town, .....


----------



## Garpal Gumnut (12 June 2009)

Solly said:


> *"Storm Financial inquiry to tour Australia"*
> 
> "INVESTORS who lost millions in the collapse of Townsville-based Storm Financial will have a chance to be heard at a series of public hearings across Australia."
> 
> ...




So you should Solly.

Tell him you are by acclaim, the resident Storm expert on ASF.

I will pm you a badge of office.

Otherwise he may be misinformed.

gg


----------



## Solly (13 June 2009)

*"Commonwealth Bank 'panicked' as financial Storm hit."*


"A FORMER Storm Financial manager has alleged a "seamless, very close relationship" with the Commonwealth Bank led to a relaxation of standards.

Ron Jelich, who served as national business development manager for the Townsville-based firm, maintains that there was a "creative" handling of clients' paperwork in relation to asset valuations and loan applications". "


More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,25628656-3122,00.html


----------



## Dark Leopard (13 June 2009)

Good Citizens, 

If you have anything to offer the 
Inquiry into Financial Products and Services in Australia,
you can make a submission.

Remember when making a submission you are protected by parliamentary privilege. It is an offence for anyone to try to stop you from making a submission by threats or intimidation. It is an offence for anyone to harass you or discriminate against you because you have made a submission. The content of the submission is also protected but only after the committee has accepted it. This means that what you say in the submission, once the committee has accepted it, cannot be used in court against you or anyone else. You can also request that your submission be kept confidential.

To find out more visit the Parliamentary Joint Committee Website.

The first public hearing is: 
Canberra, Wednesday 24 June 2009

5:30pm – 8:30pm
Committee Room 2S1, Parliament House
Canberra ACT

Time	
5:30pm – 8:30pm
Witness ASIC (details to be advised)


Followed by these further public hearings.

26/08/2009	Melbourne, VIC	 	 	 
28/08/2009	Canberra, ACT	 	 	 
02/09/2009	Townsville, QLD	 	 	 
03/09/2009	Brisbane, QLD	 	 	 
04/09/2009	Sydney, NSW.


Dark Leopard: END of Transmission.


----------



## Quincy (13 June 2009)

> Dark Leopard: END of Transmission.




Hello, HAL do you read me, HAL? 
HAL: Affirmative, Dave, I read you. 
Dave Bowman: Open the pod bay doors, HAL. 
HAL: I'm sorry Dave, I'm afraid I can't do that. 
Dave Bowman: What's the problem? 
HAL: I think you know what the problem is just as well as I do. 

HAL: I know I've made some very poor decisions recently, but I can give you my complete assurance that my work will be back to normal. I've still got the greatest enthusiasm and confidence in the mission. And I want to help you.


----------



## chrisgee (13 June 2009)

i should check these forums more often there is a lot that seems to be going on. enquiries-senate stuff-mr jelnick doing a good dump on every body-ha ha everybody seems to be smarter in hindesight. things are still tough i wish this would be all over quicker- its a lot to go back to work when your are a lot older earn crap money long hours and to think that somebody else might be eating in your family kitchen-sleeping in your bedroom-have another car parked in your garage-cooking on your bbq-looking at the flowers and plants you planted-trying to hang on to a house that holds so many family memories- the birthdays- the christmases-the fun times.
yes its hard but we will hang on and dig in for as long as it takes. mr c and the banks you guys have to come together and sort all of this out. 
im not having a good day with all of this but we will never ever ever be beaten by all of this. thanks to all those that care about what we are going through.


----------



## Solly (13 June 2009)

It has been reported that ASIC is considering proceedings against the Comm Bank under the public interest powers of section 50 of the ASIC Act to recover damages on behalf of Storm investors.

More to come.......


----------



## Garpal Gumnut (13 June 2009)

Solly said:


> It has been reported that ASIC is considering proceedings against the Comm Bank under the public interest powers of section 50 of the ASIC Act to recover damages on behalf of Storm investors.
> 
> More to come.......




Very interesting Solly.

I always find that rats prefer to jump a ship sinking, on a weekend.

ASIC must be lining all the rabbits up at long last.

gg


----------



## -Bevo- (13 June 2009)

Solly said:


> It has been reported that ASIC is considering proceedings against the Comm Bank under the public interest powers of section 50 of the ASIC Act to recover damages on behalf of Storm investors.
> 
> More to come.......




I wonder if this is the reason for Slater and Gordon delaying there proceedings?

Wonder what they have planned for salesman manny.


----------



## Mash (13 June 2009)

So pray tell...do the holier than thou's still think the banks have done no wrong.... .... perhaps the storm survivors are not just lone sailors after all...as a group have we per chance been able to show that the banks have some aportionment of blame for the juganaut EC and his coherts produced... People power will finish strong!!!!!


----------



## Solly (14 June 2009)

*"ASIC may take CBA to court"*

"THE corporate regulator is considering proceedings against the Commonwealth Bank to recover damages on behalf of investors in Storm Financial.

Australian Securities and Investments Commission (ASIC) chairman Tony D'Aloisio has told a Senate Estimates committee hearing the regulator is looking at a potential case under its public interest powers of section 50 of the ASIC Act."

"Mr D'Aloisio said their investigations were looking at `wrongdoing'.

"That is in the sense of breaches of the law – but we are also looking at the potential to recover compensation for the investors for breaches of the Corporations Act," he said."

Read the story here by Tony Raggatt in the Townsville Bulletin;


http://www.townsvillebulletin.com.au/article/2009/06/14/58785_hpnews.html


----------



## carey ramm (14 June 2009)

Slater and Gordon are in detailed "without prejudice" negotiations with the CBA. They wrote to all their clients with a detailed confidential update a few weeks ago and stated that they expected a negotiating timeframe of 6 weeks. All of these negotiations by there very nature are confidential but by the fact that they are actually underway is a promising sign. If you are a Slater's client and havent received this update then contact them and ask for this. If u arent a Slater's client, or without legal representation, then i suggest you speak with the CBA hardship team. I am amazed that only 40% of storm clients have opted for legal respresentation.

ASIC too have signaled publicly that they may also act for restitution for clients from banks - again the fact that ASIC have raised such a move publicly is another promising sign. ASIC have achieved a good outcome recently with Opes Prime.

Based on the research AEC have done for our submission to the enquiry CBA accounts for over 70% of Storm clients so this is why it is the focus of attention at present as any settlement here will do the greatest good. Of course once u have a settlement / restitution with one bank than the others will more than likely follow suit.

I also think that in the coming weeks we will start to see more detail emerge on the Colonial management of the Storm margin loans. From what i have collected and passed on this will become very interesting.

To all those storm clients out there that read this forum, and i know there are a lot of u, all i can urge is to hang in there. I know i have been saying hang in there for the last few months - BUT- please keep this in perspective - it has been under 6 months since this fiasco has occurred and enormous progress has been made to date even getting banks into a negotiating and settlement fame of mind. Remember also that all of the detail to date on the wrongdoings has mainly been pulled together and exposed by outsiders trying to help u - people on the outside digging away - there has been no help or exposure from Storm of relationships or wrong doings (Jelich is a late starter) despite their early promises. EC has simply left u all in the lurch. His court case is defunct so there should be nothing stopping him putting all the evidence from his court case of alleged wrongdoing by the banks into the public arena so it can at least increase the pressure on the banks to settle with his former clients. If the Storm directors had any shred of decency left then now is the time for them to do this. 

If u r doing settlements with the CBA that u can live with then that is great news but please use a lawyer as u dont want to be screwed over again. If u dont have legal representation then u need to move very fast - otherwise u could be left out in the cold.


----------



## Solly (14 June 2009)

For those interested, have a look at the Hansard Senate Economics Legislation Committee Budget Estimates of 4/6/09

http://www.aph.gov.au/hansard/senate/commttee/S12054.pdf

There is some interesting reading especially between Senator Ian MacDonald, Senator Williams and ASIC chairman Tony D'Aloisio.

Go to page 95 on the pdf and look for.

CHAIR””The suggestion is that we deal with Storm first and then move on to other issues.
Senator IAN MACDONALD””I guess the first question might be just for a brief update on where ASIC is with the investigation into Storm?

Enjoy.....


----------



## Solly (14 June 2009)

*"Storm inquiry targets banks"*

"THE head of the federal parliamentary inquiry which is investigating the failed Storm Financial investment advisory company says he will work with corporate regulators to bring the banks to account for their part in the collapse."

More from Mitch Gaynor in The Sunday Mail here;

http://www.news.com.au/couriermail/story/0,23739,25630844-3122,00.html

Stormers, maybe that weight is beginning to lift just a little...


----------



## Farencue (14 June 2009)

"The chairman of the inquiry into the financial services industry, Bernie Ripoll, said he was "completely satisfied" the inquiry's terms of reference had enough firepower to target the banks *if* they were found to have done anything wrong".

Here's another quote from the same article - bolding mine.


----------



## jonnycage (14 June 2009)

Solly said:


> For those interested, have a look at the Hansard Senate Economics Legislation Committee Budget Estimates of 4/6/09
> 
> http://www.aph.gov.au/hansard/senate/commttee/S12054.pdf
> 
> ...


----------



## Solly (15 June 2009)

*A "Smash Me Manny" doll..??*

gg, have you been up to something??

Have your very own for $59.95

Have a look here..

http://www.minimemodelworks.com/content/order/finvill.php


Sourced from this Business Day article.

http://business.watoday.com.au/business/just-horsing-around-in-hollywood-20090614-c7ck.html


----------



## Solly (15 June 2009)

*"I'll call on banks to explain Storm and Opes collapses: inquiry head"*


"Bernie Ripoll, the chairman of the inquiry into financial products and services, said he was not interested in a show or a circus. But he said he would not hesitate to call Ralph Norris, as chief executive of the Commonwealth Bank, or Mike Smith, as chief executive of the ANZ Bank, to appear at public hearings if it helped uncover serious systemic issues surrounding the collapse of Storm and Opes Prime"

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/ill-call-on-banks-to-explain-storm-and-opes-collapses-inquiry-head-20090614-c7ce.html


----------



## Smiley (15 June 2009)

Solly, This is too good . . . a manny doll. EC would have a boost to the deflated ego in finally making it with the high flyers from the USA.  Perhaps we can hope for an Aussie manufacturer and a possible business venture for the stormified. It is well worth a look.


----------



## Solly (15 June 2009)

*"Storm insurers run for cover on insolvency'*

Creditors of Storm Financial Services might not be able to make claims on up to $60 million on professional indemnity and other insurance cover because of issues about whether the financial adviser was technically solvent when the policies were agreed.

Story by Duncan Hughes in the AFR ( subscription required) 

http://www.afr.com/home/login.aspx?ATL://20090612000031239295&section=Financial%20Services


----------



## -Bevo- (15 June 2009)

Solly said:


> *A "Smash Me Manny" doll..??*
> 
> gg, have you been up to something??
> 
> ...


----------



## Solly (16 June 2009)

Another interesting submission to the 
Inquiry into Financial Products and Services in Australia

Submission No 64, two retired school teachers from North Sydney who have lost everything.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub64.pdf


----------



## pilots (16 June 2009)

Solly said:


> Another interesting submission to the
> Inquiry into Financial Products and Services in Australia
> 
> Submission No 64, two retired school teachers from North Sydney who have lost everything.
> ...




You read that and you see what I mean when I say the sales people only look for the wood ducks, as long as you have wood ducks you are going to have sales people rip them off. Would be good to see all the sales commission have to be paid back, now that would be a good start.


----------



## Dark Leopard (16 June 2009)

Good Citizens, 

Again I ask, If you have anything to offer the 
Inquiry into Financial Products and Services in Australia,
you can make a submission.


If you can help, please take time to go here and find out more.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/index.htm

Remember when making a submission you are protected by 
parliamentary privilege once the submission is accepted.

Dark Leopard: END of Transmission.


----------



## jonnycage (16 June 2009)

Dark Leopard said:


> Good Citizens,
> 
> Again I ask, If you have anything to offer the
> Inquiry into Financial Products and Services in Australia,
> ...





thanks manny,

hows the weather in belmont this morning ?


----------



## Julia (16 June 2009)

Solly said:


> Another interesting submission to the
> Inquiry into Financial Products and Services in Australia
> 
> Submission No 64, two retired school teachers from North Sydney who have lost everything.
> ...



That's a pretty awful read.   Obviously quite intelligent people who were unbelievably naive about anything financial. 
The last piece about the ANZ is very damning.


----------



## Judd (16 June 2009)

Julia said:


> That's a pretty awful read.   Obviously quite intelligent people who were *unbelievably naive about anything financial*.
> The last piece about the ANZ is very damning.




Yep.  And former teachers to boot who apparently could not be bothered or were disinclined to educate themselves about matters financial.

However, it is an awful read yet still displaying that horrible approach by many of the public of "If the bank is happy to lend me this much it must be OK"  as opposed to "Strewth, that's a lot of money I/we have to pay back!"  Oh dear.


----------



## Solly (16 June 2009)

*"Warning on Storm deals"*

"Offers being made to former Storm Financial clients by the Commonwealth Bank's Hardship Team should be treated with extreme caution, according to the group representing former clients of the failed investment firm.

The Storm Investors Consumer Action Group (SICAG) co-chairman Mark Weir said this “hardship team” was acting like a wolf in sheep's clothing."

"ASIC has over 40 agents working on the Storm Financial case and has until August 31 to start proceedings to recover investors' funds."

More in the Mackay Daily Mercury;

http://www.dailymercury.com.au/story/2009/06/16/warning-on-storm-deals/


----------



## Solly (17 June 2009)

*"Unseen hands that signed the papers"*

"A NSW couple who lost their fortune in the collapse of Storm Financial said some of their home-loan documents had been witnessed by bankers they had never met, working from an office in Nambour, Queensland, that they had never visited."

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/unseen-hands-that-signed-the-papers-20090616-cgjj.html


----------



## maccka (17 June 2009)

*Breaking News - CBA admits fault*

Interesting news...

*CBA admits fault on Storm Financial client loans*

The Commonwealth Bank of Australia (CBA) has issued an apology regarding its involvement with the clients of failed financial planning group Storm Financial. 

A statement issued by the bank said it acknowledged that while the circumstances relating to some clients of Storm were "not caused directly by the bank", they did involve the bank to "some degree". 

Commonwealth Bank chief executive Ralph Norris said the bank had identified "shortcomings in how we lent money to our customers involved with Storm Financial. 

"We are not proud of our involvement in some of these issues and we are working toward a fair and equitable outcome for our affected customers." 

Norris said that those affected "can be assured that where we have done wrong, we will put it right". 

"I am committed to the identification and resolution of all issues relating to the bank's involvement with Storm Financial," Norris said. 

etc ...

http://www.moneymanagement.com.au/A...t-on-Storm-Financial-client-loans/486995.aspx


----------



## donteventryit (17 June 2009)

*Re: Breaking News - CBA admits fault*



maccka said:


> Interesting news...
> 
> *CBA admits fault on Storm Financial client loans*
> 
> http://www.moneymanagement.com.au/A...t-on-Storm-Financial-client-loans/486995.aspx




From the same article ... 

_But Norris pointed the blame for the losses incurred by the clients as a result of the financial advice provided by Storm Financial with the financial planning group, saying *the bank was not responsible for the advice provided by Storm. *

"That was clearly the responsibility of Storm Financial, a licensed financial advisory company," Norris said._

Or in plain english, the only reason the clients of Storm applied for the loan was because of Storm advice ...


----------



## carey ramm (17 June 2009)

the CBA announcement is certainly a move in the right direction - and not before time. will be interesting to see market reaction to this tomorrow...

it seems more and more is unravelling every day

i am going to buy the AFR on the weekend for some light leisurely reading also


----------



## Solly (17 June 2009)

*Re: Breaking News - CBA admits fault*



maccka said:


> Interesting news...
> 
> *CBA admits fault on Storm Financial client loans*
> 
> ...




maccka I just had a call from a Stormer about this article. They have a problem trying to understand what ...."not caused directly by the bank", they did involve the bank to "some degree"....actually means.
I must admit it is ambiguous to me as well. 
This to me is very strange statement to make.


----------



## Steve Borden (17 June 2009)

*Re: Breaking News - CBA admits fault*



Solly said:


> maccka I just had a call from a Stormer about this article. They have a problem trying to understand what ...."not caused directly by the bank", they did involve the bank to "some degree"....actually means.
> I must admit it is ambiguous to me as well.
> This to me is very strange statement to make.




It means the CBA is now acknowledging they provided home loans to people who should never have received a home loan and that the issues with CGI and CFS are a different matter.

It was always clear that they had problem with the home loans, the other issues are more complicated.

Interesting to see if BoQ management now show the same leadership given most of their home loans are worse than the CBA loans albeit fewer in number.


----------



## Solly (17 June 2009)

Here's another link I just got:

*"Bank backs down over Storm loans"*

"THE Commonwealth Bank has suspended repayment obligations on loans made to customers caught up in the Storm Financial debacle.

In an embarrassing backflip, the bank admitted it made mistakes in the way it lent money to customers involved with the failed financial adviser, which collapsed earlier this year."

More here by Allison Jackson in The Australian;

http://www.news.com.au/business/story/0,27753,25650607-31037,00.html


And it's also hit the ABC 

*"CBA admits Storm mistakes"*

By Online business reporter Michael Janda

http://www.abc.net.au/news/stories/2009/06/17/2601097.htm

Quite good exposure ...


----------



## Garpal Gumnut (17 June 2009)

Solly said:


> Here's another link I just got:
> 
> *"Bank backs down over Storm loans"*
> 
> ...




Thanks for the info Solly.

This will be a great relief to many Stormers in Townsville.

gg


----------



## Solly (17 June 2009)

Another interesting submission to the 
Inquiry into Financial Products and Services in Australia

Stated in Submission No 66, (Name Withheld)...

"Having recently perused the loan documents mentioned above we found the
information contained in our balance sheet was incorrect. Our assets were over stated by
approx $700000.00 in one entry and it showed we had $20000.00 with bank we have
never dealt with, ever………….."

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub66.pdf


----------



## Solly (17 June 2009)

*"CBA's mea culpa"*

"Commonwealth Bank's sudden admission of guilt in relation to Storm Financial leaves the Bank of Queensland looking like a shag on a rock. 

It also strengthens the chances of former Storm clients winning damages in their class actions against organisations complicit in the Storm disaster"

More by Tony Boyd in Business Spectator

http://www.businessspectator.com.au/bs.nsf/Article/CBAs-mea-culpa-pd20090617-T4C7N?OpenDocument


----------



## carey ramm (17 June 2009)

the key message in the statement today is that even those storm victims who have accepted a settlement already will not be precluded from improving on that agreed settlement now that CBA has accepted some responsibility for the storm fiasco - we must remember that without the home loans from CBA and others there would have been significantly lower margin loan debt exposure for storm clients to the flawed storm model.

lets also make it very clear that this statement from CBA in no way exonerates EC and the Storm directors as they were at the very heart of these loan irregularities.


----------



## awg (17 June 2009)

Now that the top man, Ralph, knows he is gonna have to stand up and answer the question,

" Did CBA breach numerous guidelines, and even regulations, with regard to making loans"

Clearly the answer is going to be yes, in a number of cases.

There is no way the bank should foreclose those homes under these circs IMO.

Seems like they may realise this

It will be interesting what they do with the cases where loans were issued in accordance with proper practice


----------



## shibby (17 June 2009)

Dark Leopard said:


> Good Citizens,
> 
> Again I ask, If you have anything to offer the
> Inquiry into Financial Products and Services in Australia,
> ...




Well for what its worth I think you have a great sense of humor and I don’t think any of us should be dismissive of what your message is really saying.  
Come on folks if you know something that can help the Stormies,  any thing at all, just come forward otherwise you will carry the burden for the rest of your life. 
This is the chance to really help when it is most needed. 
We just want the truth to come out and then we can get on with the rest of our lives.
You can also think of it in another way and that is that you could be helping your generation or even your future children’s or grand children’s generation.  
Here is your chance to make a difference. 
Make it a little harder for this to ever happen again.


----------



## Pindibog (17 June 2009)

carey ramm said:


> the key message in the statement today is that even those storm victims who have accepted a settlement already will not be precluded from improving on that agreed settlement now that CBA has accepted some responsibility for the storm fiasco - we must remember that without the home loans from CBA and others there would have been significantly lower margin loan debt exposure for storm clients to the flawed storm model.
> 
> lets also make it very clear that this statement from CBA in no way exonerates EC and the Storm directors as they were at the very heart of these loan irregularities.




Carey,

I am having settlement of my mothers house next week. My husband & I have got a home loan to pay her mortgage which she could not pay. There are heaps of legal issues with the loans still being in fathers name when he is dead amoungst other things. Should I not buy the house?? and hold off??

I have consulted my solicitors and they have said they can't give financial advise.


----------



## Solly (18 June 2009)

*"Commonwealth Bank admits mistakes over Storm collapse"*

"THE Commonwealth Bank head has admitted wrongdoing in the case of the failed advisory group Storm Financial, which has ruined thousands of investors"

More by Anthony Marx in The Courier Mail 

http://www.news.com.au/couriermail/story/0,23739,25652144-3122,00.html


*"Storm Financial clouds threaten Commonwealth Bank of Australia"*

THE Commonwealth Bank's reputation as one of the nation's most trusted institutions has taken another blow after it admitted "shortcomings" in its dealings with thousands of customers affected by the $3 billion collapse of Storm Financial.

More by Anthony Klan in the Australian 

http://www.theaustralian.news.com.au/business/story/0,28124,25652968-20501,00.html


----------



## Solly (18 June 2009)

*"Action against CBA possible: SICAG"*

Negotiated settlement planned.

Client group will move to reach a negotiated settlement with the CBA in the wake of the bank's admission of its involvement in the collapse of Storm Financial.

More by By Christine St Anne in Investor Daily

http://www.investordaily.com.au/cps/rde/xchg/id/style/6734.htm


----------



## Solly (18 June 2009)

*"Bank 'villain' in investor's wipeout"*

"COOLUM Beach policeman Sean McArdle is in no doubt -- Storm advisers were the "used car salesmen" but the Commonwealth Bank was the villain.

The forensic police officer is one of thousands of Storm customers wiped out in the $3 billion investment maelstrom."

Story by Tony Raggart and Andrew Fraser in The Australian

http://www.theaustralian.news.com.au/story/0,25197,25653101-5006786,00.html


----------



## Solly (18 June 2009)

*"Commonwealth Bank's backflip as Storm breaks"*

"THE Commonwealth Bank's spectacular backflip yesterday over its involvement in the $3 billion collapse of Storm Financial has cleared the way for a full settlement later this year of issues affecting 2500 of its customers -- but only in cases where it admits wrongdoing."

More by Richard Gluyas and Sara Rich in The Australian 

http://www.theaustralian.news.com.au/business/story/0,28124,25652215-643,00.html


----------



## Solly (18 June 2009)

*"Commonwealth's imperfect Storm"*

"COMMONWEALTH Bank chief executive Ralph Norris is trying to head off any regulatory backlash to its role in financing clients of the failed Storm Financial with an abject apology and admission of wrongdoing issued yesterday."

More by Martin Collins and  John Durie in The Australian:

http://www.theaustralian.news.com.au/story/0,25197,25651765-5013408,00.html


----------



## Solly (18 June 2009)

*"CBA takes blame"*

"THE Commonwealth Bank has owned up to its involvement in the risky investment practices of Storm Financial, announcing it will immediately suspend repayment obligations for all its loans made to Storm customers."

More by Tony Raggatt in the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/06/18/59601_hpnews.html


----------



## Soft Dough (18 June 2009)

Solly said:


> *"CBA takes blame"*
> 
> "THE Commonwealth Bank has owned up to its involvement in the risky investment practices of Storm Financial, announcing it will immediately suspend repayment obligations for all its loans made to Storm customers."
> 
> ...




This is great news for investors who will hopefully have a legal leg to stand on, but absolutely damning for storm financial.

It just shows how corrupt storm financial was, and how commission motivated they were.

Shame on Emmanuel Cassimatis for fostering such deceiptful practices, placing people's retirements, their lifelong work rewards and their mental health on the line for a profit.

We will probably see him prancing around as a white knight now that this has come to light, but the focus should always remain on the fact that it was storm who were supposedly managing these assets and should have stated them correctly.

I think that we will find out however that people were signing blank documents and allowing the con-artists at storm to fill in their paperwork, and if this comes out, perhaps they will receive nothing, and storm and bank employees will be in very very big trouble.


----------



## Dark Leopard (18 June 2009)

Good Citizens, 

Investigators and Enforcement Officers are hard working and dedicated.

If you have anything to contribute to assist in the successful finalisation of this issue

please consider contributing to the Inquiry into Financial Products and Services in Australia.

If you consider that you have anything of value to assist ASIC, contact them directly.

There are people reading this message that can assist.

ACT NOW:

Dark Leopard: END of Transmission.


----------



## Soft Dough (18 June 2009)

Dark Leopard said:


> There are people reading this message that can assist.




There are also people reading, and maybe even contributing to these very forums , who caused the mess.

Dark Leopard.  I note that you have never attempted to answer my questions regarding your thoughts on Emmanuel Cassimatis.

Please enlighten us otherwise no doubt anyone with half a brain will put 2 and 2 together..


----------



## Kez180 (18 June 2009)

Soft Dough said:


> There are also people reading, and maybe even contributing to these very forums , who caused the mess.
> 
> Dark Leopard.  I note that you have never attempted to answer my questions regarding your thoughts on Emmanuel Cassimatis.
> 
> Please enlighten us otherwise no doubt anyone with half a brain will put 2 and 2 together..




I don't think EC would bother jumping on forums and stirring the pot, if he had half a brain he'd be hiding himself and as much money as he can lay hands on under a very very deep rock, not drawing attention to himself...

This could well be one of the brainwashed employees though...


----------



## pilots (18 June 2009)

Soft Dough said:


> There are also people reading, and maybe even contributing to these very forums , who caused the mess.
> 
> Dark Leopard.  I note that you have never attempted to answer my questions regarding your thoughts on Emmanuel Cassimatis.
> 
> Please enlighten us otherwise no doubt anyone with half a brain will put 2 and 2 together..




Soft Dough, VERY good post, I like you have smelt a rat for some time.


----------



## Solly (18 June 2009)

* "CBA slammed over 'dodgy' Storm loans"*

With audio to AM and words from Carey...

http://www.abc.net.au/news/stories/2009/06/18/2601374.htm


----------



## carey ramm (18 June 2009)

pindibog - i have sent u a private message on this forum - regards carey


----------



## Anastasia (18 June 2009)

"The Bank of Queensland (BOQ) is believed to have threatened to sue the clients of financial planning group Storm Financial for misrepresenting their income levels in loan applications, according to a lawyer close to the issue.........But BOQ head of corporate affairs Caroline Dunworth refuted the suggestion that the bank would take such action against individual clients."

I wonder why they don't wish to sue former "now destitute" clients of Storm Financial!!!!!

Full story in Money Management today 
A tale of two banks  18 June 2009 by Lucinda Beaman


----------



## Solly (18 June 2009)

*"Tears of joy as Commonwealth Bank admits fault in Storm Financial collapse"*

``I am relieved, speechless and very pleased.’’ 
Those were the words of former Storm director Ron Jelich after news broke that the Commonwealth Bank of Australia has admitted partial responsibility for the Storm Financial collapse..

More by Paul Lancaster in the Redcliffe and Bayside Herald;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/tears-of-joy-as-commonwealth-bank-admits-fault-in-storm-financial-collapse/

I've never met Ron but I read he wasn't too well earlier in the year, good to see he's looking happier.....


----------



## Solly (18 June 2009)

*The Australian's Andrew Main on CBA's Storm Financial backflip. *

Click on the embedded Trading Day video from Sky News;

http://www.theaustralian.news.com.au/business/story/0,28124,25654496-36418,00.html


----------



## Solly (19 June 2009)

*"Storm Financial incomes at Bank of Queensland branch 'all alike' "*

"A FINANCIAL planner claims loan applications from the failed Storm Financial group, processed through a Townsville branch of the Bank of Queensland, consistently showed the same income, regardless of the person's real income or circumstances.

Townsville financial planner Andrew Cook said documentation he had seen showed many of the loans made through the North Ward branch of the Bank of Queensland put a person's income at about $100,000."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,25657828-5006786,00.html


----------



## Solly (19 June 2009)

*"Storm heat now on Bank of Queensland"*

"STORM Financial's fleeced clients have turned the heat on the Bank of Queensland after the Commonwealth Bank this week conceded it should wear some of the blame for the debacle."

More by Nick Nichols on goldcoast.com.au

http://www.goldcoast.com.au/article/2009/06/19/90015_gold-coast-business.html


----------



## Solly (19 June 2009)

*"BoQ next stop for Storm fight"*

"CLIENTS of the failed Storm Financial who took out margin loans with the Bank of Queensland are unlikely to avoid a court battle, unlike those who dealt with the Commonwealth Bank."

"Storm founder Emmanuel Cassimatis told The Australian yesterday he did not think the bank had gone far enough in its admission. "The main point is the bank's system did not make the margin calls to its clients as it had always done ... in the past," he said. "The consequence of this was that Storm clients were fatally wounded rather than battered and bruised as they would have been under normal circumstances, as were most investors during the global financial crisis." "

More by Sara Rich in The Australian;

http://www.theaustralian.news.com.au/business/story/0,,25656974-36418,00.html


----------



## Solly (19 June 2009)

*"CBA has $200m limit on Storm"*

"Having indicated that the impact of Storm's demise was not material to its $220 billion loan book, Commonwealth is expected by the market to spend between $100 million and $200 million to settle potential claims against it."

More by Jacob Saulwick and Stuart Washington in The Age 

http://business.theage.com.au/business/cba-has-200m-limit-on-storm-20090618-clys.html


----------



## Solly (19 June 2009)

*"CBA urged to write-off Storm client debts"*

"An economist (Carey) says the Commonwealth Bank should write-off the debts of its clients who lost up to $3 billion when Queensland's Storm Financial company collapsed earlier this year."

More here;

http://www.abc.net.au/news/stories/2009/06/18/2601483.htm


----------



## carey ramm (19 June 2009)

For those storm victims out there who have loans with the BOQ this is what u have been waiting for:

Storm investors take BoQ to court
Friday, 19 June 2009 | The Australian Financial Review | Duncan Hughes duhughes@afr.com.au 

Bank of Queensland will face legal action today from about 1300 former Storm Financial Services investors, after its refusal to follow Commonwealth Bank of Australia's lead by offering compensation.

It has been a busy week...


----------



## Solly (19 June 2009)

*"Storm: bank did not check"*

"THE Bank of Queensland has admitted it did not check people's incomes when lending them millions of dollars in the Storm Financial debacle.

However, it steadfastly denies it has done anything wrong and is now threatening to sue customers for signing loan application documents with incorrect information about their incomes."

More here from Tony Raggatt in the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/06/19/59831_hpnews.html


----------



## carey ramm (19 June 2009)

Todays AFR

Storm investors take B0Q to court
Duncan Hughes duhughesafr.com.au

The Australian Financial Review 119 Jun 2009 I Page: 54 I Financial Services
Bank of Queensland will face legal action today from about 1300 former Storm Financial Services investors, after its refusal to follow Commonwealth Bank of Australias lead by offering compensation.

The board of law firm Slater & Gordon last night approved the case, which seeks damages for an alleged breach of Bank of Queenslands duty of care and alleged unconscionable and misleading conduct in its treatment of customers.

Lawyer Damian Scattini, who has been representing Storm clients, said representative rather than class actions would be brought because of the difficulty in establishing sufficient common ground between investors. A representative action usually involves using an individual case for future settlements.

It follows the admission by CBA chief executive Ralph Norris on Wednesday that the bank had made mistakes, and the suspension of repayment obligations until August 31 and an undertaking that existing settlements would not preclude more payments.

“In stark contrast, Bank of Queensland has been completely bloody-minded and impractical,” Mr Scattini said. “Its like a bunch of schoolboys refusing to admit fault after being caught smoking behind a shed. If they want to play that way, so be it. We like an outing [in court].”

Mr Scattini claimed the bank had threatened to countersue the law firm for costs and launch a counterclaim against the former investors for providing misleading information about income when making loan applications.
A spokesman for the bank denied the claim.

The Australian Financial Review has previously revealed the intimate relationship between Storm Financial and the Bank of Queenslands north ward Townsville branch that allegedly enabled massive amounts of money to be lent to investors who had little, if any, chance of paying the interest unless stockmarkets provided double-digit returns.

Andrew Cook, a former CBA Townsville bank manager turned financial adviser, claims Bank of Queenslands lending practices to Storm investors were worse than those of CBA.

“CBAs loans had some semblance of reason. The Bank of Queensland plucked figures out of the air, there was no reason in many of their loans,” said Mr Cook, who has spent several months working pro bono with former Storm victims. “If the CBA has admiffed defeat, then surely its time for Bank of Queensland to follow.”

An internal report submitted to Storms board of directors shows that by August 2008 Storms clients had invested about $4.9 billion in its various self-branded index funds, with about 37 per cent, or $1 .8 billion, funded by margin lending. Investors are believed to have lost about $3 billion in the collapse.

Labor MP Bernie Ripoll, chairman of the parliamentary joint commiffee on corporations and financial services, which begins public hearings next Wednesday, has also stepped up pressure.

“The CBA has now admitted to making mistakes and now is the time for the other banks involved in this unmitigated disaster to act in good faith towards their clients and follow suit,” Mr Ripoll said.

Restoring Storm investors to their original position could cost CBA about $800 million and Bank of Queensland between $250 million and $300 million, according to estimates by Carey Ramm, the Townsville-based principal economist at AEC Group, a consultancy with offices in four states.

Northern exposure Stephen Reynolds
"CBA needed some good publicity before next week?s public hearings in federal parliament, where it is going to cop a bucketful. Those bastards at the Bank of Queensland are also up to their neck in it", said Mr Reynolds, a 70-year-old Vietnam War veteran who was geared to $1 .2m through a Bank of Queensland home loan and Colonial Geared Investments margin loan.

Barry Peace
"Talk is cheap, lets see some action," said Mr Peace, a 54-year-old grandfather and retired panel beater who lost $1 40,000 on a CBA margin loan. Peace, who lives in Townsville, also has a $500,000 mortgage with the Bank of Queensland

Elizabeth Corcoran
"l hope Bank of Queensland will offer a moratorium on payments," said Ms Corcoran a 62-year-old florist and marriage celebrant who lives on Magnetic Island, off the coast of Queensland. The mortgage on her house was used to invest in Storm andleft her $273,000 in debt.


----------



## joku (19 June 2009)

Sure the banks have a small part to play in all this, but hearing Storm Financial clients blaming all their problems on the banks disgusts me. Storm Financial themselves were always the main blame. Their fake customer income/financial reports were happening on a large enough scale that only a couple of weeks after starting work for Storm, my mate was already telling me about the consistent fake reporting going on around him. Not to mention the blatantly irresponsible hype they were putting out to get their customers to agree to massive leverage. 

This report about Ron Jelich above and the concern for his health also sickens me. The guy spends his life on luxury holiday trips from the quick dirty money he made. Poor guy.

The banks are just easy targets for lawsuits while the criminals walk away with their pockets full.


----------



## Smiley (19 June 2009)

What rubbish by EC: "The main point is the bank's system did not make the margin calls to its clients as it had always done ... in the past," he said. 
I never heard this happening for clients - stormy advisers did this in the past . . .again EC just thought the Cwth bank would carry clients who were in negative equity, if they'd run out of funds to put into the portfolio.
Agree, put the blame where it lies with storm for giving the advice and the whole plan, but the banks bear a responsibility too; doing the loans, working in conjunction with storm.  
Some clients signed documents which were altered afterwards - by storm or bank - who knows if anyone will ever get to the bottom of this debacle. 
I hope all stormy advisers are named and called to account.
Clients who ahve been stormified do take responsibility for asking for, accepting and trusting shonky advice.


----------



## Farencue (19 June 2009)

I did get a small laugh out of Mr C suddenly returning to the scene via the newspaper report.
Now that the banks have admitted their dodgy checks and balance system for loan approvals - Mr C figures that absolves him of all responsibility ie: "its safe to come out now".
I still find it very strange that there appears to be a major backlash against the banks and not a peep against Mr C.

Does anyone have any theories?


----------



## Pindibog (19 June 2009)

joku said:


> Sure the banks have a small part to play in all this, but hearing Storm Financial clients blaming all their problems on the banks disgusts me. Storm Financial themselves were always the main blame. Their fake customer income/financial reports were happening on a large enough scale that only a couple of weeks after starting work for Storm, my mate was already telling me about the consistent fake reporting going on around him. Not to mention the blatantly irresponsible hype they were putting out to get their customers to agree to massive leverage.
> 
> This report about Ron Jelich above and the concern for his health also sickens me. The guy spends his life on luxury holiday trips from the quick dirty money he made. Poor guy.
> 
> The banks are just easy targets for lawsuits while the criminals walk away with their pockets full.




Your mate could be a good whistle blower and provide the enquiry/SICAG with valuable information. I am sure he contributed too for clients getting large loans!!


----------



## Solly (19 June 2009)

*"More submissions needed for Cairns Storm hearing"*

"A Cairns public hearing into the collapse of Queensland company Storm Financial may be cancelled unless more local investors make submissions to a federal parliamentary inquiry."

More on ABC from Cathy van Extel;

http://www.abc.net.au/news/stories/2009/06/19/2603035.htm


----------



## darkside (19 June 2009)

joku said:


> Sure the banks have a small part to play in all this, but hearing Storm Financial clients blaming all their problems on the banks disgusts me. Storm Financial themselves were always the main blame. Their fake customer income/financial reports were happening on a large enough scale that only a couple of weeks after starting work for Storm, my mate was already telling me about the consistent fake reporting going on around him. Not to mention the blatantly irresponsible hype they were putting out to get their customers to agree to massive leverage.
> 
> This report about Ron Jelich above and the concern for his health also sickens me. The guy spends his life on luxury holiday trips from the quick dirty money he made. Poor guy.
> 
> The banks are just easy targets for lawsuits while the criminals walk away with their pockets full.




Thank you, i thought it was just me being cynical when i read Ron Jelich's story in the paper, it was like "he was the victim" yet when he was taking the money from his clients and and even though he felt like he wasn't doing the right thing by them he continued to take their "hard earned" and margin them to the hilt !!!!! No he was just as guilty as all the others involved , even more so , if he genuinely knew it was wrong but did nothing , thats attrocious.


----------



## Solly (19 June 2009)

Another interesting submission to Inquiry into Financial Products and Services in Australia:

Submission number 72.

"I'm 46 this year. I was hoping to semi-retire in a motorhome, and travel and work around Australia.

Instead, I have lost my entire share portfolio and am saddled with $300,000 of debt. Rather than travelling from caravan park to caravan park, I live in one permanently and won't be going around Australia anytime soon thanks to Storm Financial's advice and Macquarie Bank's actions."

The full submission is here;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub72.pdf


----------



## Garpal Gumnut (19 June 2009)

The bright light of investigation will stay on the banks for a while but the Storm "model" was the real cause of the loss of the Stormers capital.

An irrational belief in a never ending bull market and the delusion that buy and hold was the gospel of market strategies and that one could time the bottom.

Manny seems to have escaped scot free. The politicians would not dare try to corner him.

He is a charming fellow and deserves by his very survival, to continue his valuable financial advisory business in a new company structure. Manny ex Stormers would follow him again I am told.

The 2000th post on this thread.

gg


----------



## GumbyLearner (19 June 2009)

Garpal Gumnut said:


> The bright light of investigation will stay on the banks for a while but the Storm "model" was the real cause of the loss of the Stormers capital.
> 
> An irrational belief in a never ending bull market and the delusion that buy and hold was the gospel of market strategies and that one could time the bottom.
> 
> ...




He might go to Majorca! Nudge, nudge, wink, wink, say no more, say no more!


----------



## Solly (20 June 2009)

*"Are banks to blame for the Storm pain?"*

"In November last year, Storm founder Julie Cassimatis thought she could still see a way out for Storm Financial and its investors.

"By sticking with your plan (which is in a good position for recovery) and with Storm we will together do the very best to meet your needs both long and short term," Cassimatis wrote to an investor in a letter obtained by the Herald."

More in this article from the SMH here;

http://business.smh.com.au/business/are-banks-to-blame-for-the-storm-pain-20090619-cr5b.html


----------



## Solly (20 June 2009)

*"Relying each day on tranquilisers to deal with a reversal of fortune"*

"WITH the nation's biggest lender behind him, and paying top fees for financial advice, Bruce Milburn figured he had the brakes in place to cope with a falling market. He didn't.

The 54-year-old Storm Financial investor now owes about $300,000 to the Commonwealth Bank......"

More by Jacob Saulwick in the SMH;

http://business.smh.com.au/business/relying-each-day-on-tranquilisers-to-deal-with-a-reversal-of-fortune-20090619-cr5n.html


----------



## Solly (20 June 2009)

*"CBA scraps party and braces for Storm"*

"Queensland MP and parliamentary committee chairman Bernie Ripoll 
....said last night that CBA's announcement on Wednesday that it had "identified shortcomings" in its lending to Storm clients was "a step in the right direction", noting by way of contrast that there were other banks, including Bank of Queensland, Macquarie and ANZ, that were "dragging the chain" in terms of responding to his inquiries."

More by Andrew Main in The Australian...

http://www.theaustralian.news.com.au/business/story/0,28124,25661584-5017978,00.html


----------



## Solly (20 June 2009)

*"Bank claim in Storm saga"*

"A BESIEGED Bank of Queensland yesterday  
sought to defend its contentious practice of  
offering low-document loans to aged pensioners in the Storm Financial fiasco."

More by Tony Raggatt in the Townsville Bulletin is here;

http://www.townsvillebulletin.com.au/article/2009/06/20/59965_hpnews.html


----------



## Solly (20 June 2009)

Garpal Gumnut said:


> He is a charming fellow and deserves by his very survival, to continue his valuable financial advisory business in a new company structure. Manny ex Stormers would follow him again I am told.
> 
> 
> gg




gg, during the week one Stormer said exactly that to me, that they would invest again with EC & JC and stated to me that the media has misrepresented many things and that banks had not stood by them in their time of need. I suppose each to their own, it's a free country.....

Just as an aside, where I have previously given support and faith in financial advisory services companies, now after observing the journey in these forums over the past few months I have now wound back my personal exposure to these companies and have found a hands on approach now gives me more control and responsibilty over my own future, financial security and independence. I believe why pay commissions where moderate research and a logical level head will give me bigger gains and greater satisfaction.


----------



## carey ramm (20 June 2009)

GG 

Congrats on starting this thread which looks to be one of the largest on ASF. I note it has a lot more hits than posts (trolls). Pity it is about such a horribly long train wreck.

There has been a lot of media attention on the banks of late as opposed to EC. This is because we the Australian public did not believe that our banks would be involved in such a fiasco as this. I must say I was impressed by Norris from the CBA coming out and taking control of the situation – admitting they had screwed up and saying they will make it right. This is what we expect from a chairman of such a public institution as the CBA. Yes the fact that a number of internal documents, which were quite damning, were about to hit the media may have prodded the CBA along but the reality is that they could have chosen to stay in the bunker and deny everything (like BOQ) – but they didn’t and this is a good thing for both the bank and the storm victims.

We expect better from our banks. Just go back through this forum and look at the many posts telling storm victims “the banks don’t make mistakes”, “they don’t write off loans”, “give up”, “the only winners will be the lawyers”, and the list goes on and on. Well folks banks do make mistakes - and you WERE WRONG!!! 

In terms of EC getting off scot free I would make these points. This is one of the largest financial losses for small investors in Australian history. You don’t lose $3 billion + of small investors funds with such shoddy documentation, flawed models, etc and get to walk away. ASIC are investigating this outside the media spotlight which is what they should be doing in the interests of fairness. I am aware that a number of storm and bank staff have engaged legal counsel to attend the ASIC interviews with them and ASIC have been doing a lot of these formal interviews. I also have been formally interviewed by ASIC and will given evidence if requested at any formal proceedings. The saying the “wheels of justice turn slowly” is very apt but they do turn and the light at the end of the tunnel for many storm and bank staff is a bloody big train. Whatever happens EC has already gone down in infamy!!!

I should also provide some perspective on the CBA announcement. There were 14,000 investors with storm and their investments have all gone up in smoke. The losses to these people are monumental ($2billion +). What we are fighting for impacts only 3,500 storm clients (just 25% of the client base). These are the people who were double geared by storm and the banks using their homes as leverage into a failed financial model. Without the home loans (many of which contained “irregularities”) there was no massive margin loan. What I have agreed to help is to save the family home for these people – their financial losses on the investment portfolio remain and these losses are large. If we are successful in settling these loans then my small involvement will be at an end.

I will, in conjunction with several staff from AEC, be making a punchy little submission to the Parliamentary Enquiry.


----------



## Solly (20 June 2009)

*"A $1.48 margin loan on a salary of $45,000"*

(A mother of three)"........went to see her Storm Financial planner in February last year. Instead of withdrawing money to buy a motor home, the Brisbane receptionist was persuaded to borrow another $200,000 and invest more deeply in the sharemarket."

More by Stuart Washington in the SMH here;

http://business.brisbanetimes.com.au/business/a-148-margin-loan-on-a-salary-of-45000-20090619-cr5m.html


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## carey ramm (20 June 2009)

Hi Solly keep up the great work - i know a lot of the storm victims come on here to keep up with the news through your links.


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## Solly (20 June 2009)

carey ramm said:


> Hi Solly keep up the great work - i know a lot of the storm victims come on here to keep up with the news through your links.




no prob carey, I'm happy to help


----------



## Quincy (20 June 2009)

SJG1974 said:


> Well another week goes by and still the cassimatis.com.au site is still temporarily down whilst the content is updated.
> 
> Manny hasn't made any appearances and we still await the great Cereberus and his informed opinions on the inner workings of this mess.
> 
> Manny....Cereberus....where are you??




"Emmanual, who once upon a time was affectionately known as "Manny" to his legions of fans, was spotted at the *Simon and Garfunkel *concert in Brisbane on Wednesday night"

As reported in today's "Financial Review" - page 8, June 20-21, 2009.


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## bunyip (20 June 2009)

Below is an extract from a story on one of Solly's links.

While I feel very sorry for Ms Richards, I find it truly amazing that anyone would believe it was 'a no-risk strategy' to take on such a level of borrowing to invest in the stock market. 


_A $1.48 margin loan on a salary of $45,000
June 20, 2009

TRACEY RICHARDS went to see her Storm Financial planner in February last year. Instead of withdrawing money to buy a motor home, the Brisbane receptionist was persuaded to borrow another $200,000 and invest more deeply in the sharemarket.

It was her third big investment in margin loans through Storm. In 2001 she invested her life savings of $250,000 and later tipped in another $400,000 from the sale of her home.

That is now all gone and she is left with debts of $300,000 she cannot repay.

Ms Richards, a mother of three, has been left suicidal and despairing. The motor home she bought for semi-retirement and a planned trip around Australia has become her permanent residence in a Brisbane caravan park.

Her story has similar threads to many others. Ms Richards, 46, said she was told by her Storm adviser, Stuart Drummond, to ignore the margin calls that came through late last year, with the words: "Don't even talk to the bank; I'm your financial adviser, I'm taking care of it."

There was some talk - which many others heard - that Storm would look after it all, and that after the market recovered, she could repay Storm the money. When the truth finally dawned, the new harsh realities included a Christmas without presents and a sober realisation about the role of Storm.

"I can't describe how awful I felt when my children gave me Christmas gifts and I was not able to give them anything," she says.

"I was in a state of shock. Like a lot of Storm people, we so much believed in them that I didn't really believe he lied to me.

"From my point of view, *I thought it was a no-risk strategy.*_


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## Macquack (20 June 2009)

Garpal Gumnut said:


> The bright light of investigation will stay on the banks for a while but *the Storm "model" was the real cause of the loss of the Stormers capital.*




I agree with GG.

Question - Since when has "loan documentation" been utilised for the purpose of protecting the borrower rather than the lender?


----------



## bunyip (20 June 2009)

bunyip said:


> Below is an extract from a story on one of Solly's links.
> 
> While I feel very sorry for Ms Richards, I find it truly amazing that anyone would believe it was 'a no-risk strategy' to take on such a level of borrowing to invest in the stock market.





Further to my post above, if Ms Richards reads this forum I urge her and others like her to consider the considerable potential of her life from here on, rather than dwelling on what's she's lost. As a woman in her mid forties she has a lot of living to do yet and she still has time to set herself up for a comfortable retirement. 
Furthermore, her family need her to be around for them. 
I can understand that Storm victims are extremely upset, even traumatised by what's happened, but suicide is a poor choice and is unfair to their friends and family.
Some Storm victims are young enough to start again, others have age against them and are facing a life on the pension. 
But even life on the pension can be quite enjoyable for people with simple needs and the desire to get in and enjoy what's available to them.

Hang in there Stormers....with or without heaps of money, there are still many things in life that you can enjoy.


----------



## Jifromoz (20 June 2009)

An interesting article in The Age.

http://business.theage.com.au/business/super-better-be-ready-for-a-big-shakeup-20090619-craa.html


----------



## Pindibog (20 June 2009)

carey ramm said:


> Hi Solly keep up the great work - i know a lot of the storm victims come on here to keep up with the news through your links.




I do it is my morning and afternoon read with a cuppa. Live in the country and too far to drive just to pick up a newpaper. Good work Solly!


----------



## chrisgee (20 June 2009)

well its been another exciting week here-im running out of my money trying to read all the posts and news storys. i cant believe that the cba has said they havent been perfect-gee who would have thought that-?? im not saying that i think things are going to turnout allright but it gives a bit of hope- Mr C and the banks-what ever went wrong you guys have to really sort this out. im no leagl eagle but when something like this stuffs up there alweays a cause. like if i dont put oil in my car it runs ok for a while but then the motor blows up. but the cause of the breakdown was me not putting oil in the engine. somebody was letting storm run on a dry sump-so whiose fault was it??- im all for assic and the inquiryes let them roll-we just want our money and houses back- just like what we had before this mess happened. i dont care whose faullt it was-we just want to have the life we had before- our money in the bank and nobody taking our houses off us.


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## Steve Borden (20 June 2009)

Garpal Gumnut said:


> The bright light of investigation will stay on the banks for a while but the Storm "model" was the real cause of the loss of the Stormers capital. gg






Macquack said:


> I agree with GG.
> 
> Question - Since when has "loan documentation" been utilised for the purpose of protecting the borrower rather than the lender?




The whole Storm model was predicated on the ability of the investor to continue to leverage the equity in their properties as the values increased. This only worked if the Bank's were compliant and/or complicit in the use of unverifiable incomes to underpin the servicing of the loans.

So in essence the home loan issue is part of the Storm model.

Effectively no home loan, no investment, with no investment there is no margin loan and if you don't have a margin loan you don't get a margin call.

The home loan was the starting point and at this time it is the easist component to focus on and get the investors some relief.

There is no doubt, given the over > 50 investors I have seen, that the advice was flawed and in many instances it had no hope of ever achieving the projections. It seems to have been lost on many that the redemption of capital does not represent income and as a consequence the retired investors were going around in ever diminishing circles until the capital ran out.

Yes the Storm model was flawed however is there any point pursuing Storm at this time? 

The heart of the issue with BoQ is their preparedness to accept information from Storm and then use different information in the applications in order to get the loans approved. They didn't even have the sense to sanitise the files to ensure contradicatory information was removed.

Of course they blame the client, it is rather amusing that poor old BoQ is now intimating they have been the victim of a co-ordinated 'fraud' by some 300 clients from all over Australia who overestimated their incomes to around the same amount and all left out the margin loans on their applications.

That being the case they must be either in on it or incompetent or as is more likely, both.


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## Anastasia (20 June 2009)

Pindibog said:


> I do it is my morning and afternoon read with a cuppa. Live in the country and too far to drive just to pick up a newpaper. Good work Solly!




I likewise want to thank you Solly for keeping us up to date..... and to Carey Ramm. You have both been great sources of what the latest is in this real life tragedy and given us hope and the will to keep going when often there was none or not much. THANK YOU.


----------



## Quincy (20 June 2009)

Article in today's "Financial Review" - Weekend Edition, June 20-21, 2009

*"CBA too slow to mop up after Storm"*

View attachment AFR - 20-21 June, 2009.pdf


----------



## Garpal Gumnut (20 June 2009)

Thank you Solly and Carey, and all other posters for keeping us up to speed with the latest reportings on Storm.

This is from the SMH's Stuart Washington, award winning financial journalist. It is a small extract from a much bigger piece which forensically examines the players and apportions potential blame for this tragic flat earth destruction of peoples lives and savings.

http://business.smh.com.au/business/are-banks-to-blame-for-the-storm-pain-20090619-cr5b.html?page=-1



> How on earth did Julie and Emmanuel Cassimatis think they could rescue "Stormers"?On November 10 last year the ASX 200 was down 37 per cent for the year. For anyone with $1 million invested in the index with a $800,000 margin loan - or an 80 per cent "loan-to-value" ratio - this was bad news. The $200,000 in shares you thought you owned would have been wiped out, leaving you owing the bank $170,000.
> 
> Yet somehow Julie Cassimatis thought she could rescue clients facing these kinds of losses. In the letter obtained by the Herald, she told Taylor that Storm could "assist you until the markets recover by way of an advance each month".
> 
> ...




gg


----------



## chrisgee (21 June 2009)

Garpal Gumnut said:


> Thank you Solly and Carey, and all other posters for keeping us up to speed with the latest reportings on Storm.
> 
> This is from the SMH's Stuart Washington, award winning financial journalist. It is a small extract from a much bigger piece which forensically examines the players and apportions potential blame for this tragic flat earth destruction of peoples lives and savings.
> 
> ...





thanks mr gg for highlighting this-i showed this story to the family and we all agree that this is very good summary of the debarcle-i know its goingv over old ground but how can banks be so naive about what was going on- i had a mate say to me investing in storm was no different to investing in any company that goes belly up- you take a punt but sometimes things turn to crap-but this is different everybody said taht they were ok-no bad press about them -heaps of people recommnding them-storm assured all that they had it all under control-smart computer systems etec etc ---
i really cant wait to see what the comm bank offer all- does anybody know what could happen after 31 august??


----------



## Trevor_S (21 June 2009)

WARNING: Don't go to this thread on another forum if you're a Storm investor looking for empathy or sympathy

http://forum.globalhousepricecrash.com/index.php?showtopic=51916

eg



> If the market had kept going up all those Storm investors would be laughing on their round the world holiday trips. They were gamblers who deserved to pay the price. It was the Storm like investors, earning 45k a year but leveraging millions of dollars in investments, that caused the stock markets and property markets to inflate so high.
> 
> In order for markets to find an equilibrium people like that woman have to lose everything, and so they should.


----------



## Julia (21 June 2009)

Interesting, Trevor.  Thanks.   Demonstrates that ASF members were not unusually unkind in comments made.


----------



## ngardiner (21 June 2009)

Julia said:


> Interesting, Trevor.  Thanks.   Demonstrates that ASF members were not unusually unkind in comments made.




GHPC are pretty well known for their particular brand of arrogance when it comes to others' misfortunes. They tend to pick on people who make investment decisions that they don't approve of.

Each to their own, I suppose. I personally don't care what car you drive, what suburb you live in or what you invest in but others seem to take delight in schadenfreude when it doesn't work out, regardless of the circumstances.

I wouldn't take anything to heart. All GHPC has is those who bother to take the bait by refuting their claims - you'll never win, it just goes in circles, it's a pointless endeavour.


----------



## Solly (22 June 2009)

*"ASIC in hot seat over Storm and Opes Prime"*

"Mr D'Aloisio and ASIC deputy chairman Jeremy Cooper will be the first to face the Parliamentary Joint Committee on Corporations and Financial Services inquiry into financial products and services in public hearings in Canberra starting on Wednesday."

More in The Australian by Blair Speedy here;

http://www.theaustralian.news.com.au/business/story/0,28124,25668039-36418,00.html


----------



## Trevor_S (22 June 2009)

ngardiner said:


> but others seem to take delight in schadenfreude when it doesn't work out, regardless of the circumstances.




Really ? I don't get that at all from reading there.  In fact the opposite, on the whole (generalisation here), they seem intent on trying to get housing viewed as a home  rather then an over leveraged wealth destroying "investment", they want Government subsiding of the property market removed and tax payer money used more widely to increase genuine productivity (or returned to the tax payer), they want reform of the rental market to allow for increased labour mobility, reform of the tax base to tax consumption (not enterprise or income) ,  seem intent on exposing real estate and economic charlatans and pointing out some of the holes in arguments presented by some in the main stream media.

I guess as I support those sentiments, I read their forums occasionally.  There are a few very smart individuals there, and it's much the same as any forum in terms of sorting the wheat from the chaff.

They can be brutal in their assessments though, I give you that  and very quick to challenge concepts where inappropriate leverageing is used to artificially inflate wealth (most of the Australian residential property market for example).  So if you're a sensitive sort, it may be best not to visit.

but I digress off topic


----------



## -Bevo- (22 June 2009)

Trevor_S said:


> Really ? I don't get that at all from reading there.  In fact the opposite, on the whole (generalisation here), they seem intent on trying to get housing viewed as a home  rather then an over leveraged wealth destroying "investment", they want Government subsiding of the property market removed and tax payer money used more widely to increase genuine productivity (or returned to the tax payer), they want reform of the rental market to allow for increased labour mobility, reform of the tax base to tax consumption (not enterprise or income) ,  seem intent on exposing real estate and economic charlatans and pointing out some of the holes in arguments presented by some in the main stream media.
> 
> I guess as I support those sentiments, I read their forums occasionally.  There are a few very smart individuals there, and it's much the same as any forum in terms of sorting the wheat from the chaff.
> 
> ...




Good post Trevor, I share same view about that site as you, while the mainstream might refer to them as doom and gloomers, in many cases they tell it like it is, I know I have a few friends up to there eyeballs and beyond in property / consumption debt who at some stage I believe will share similar fate to that of stormers.


----------



## Solly (22 June 2009)

Another two submissions of interest to the
Inquiry into Financial Products and Services in Australia.


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub74.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub79.pdf


----------



## Solly (23 June 2009)

*"CBA's Storm announcement 'disappointing'"*

"Australia's biggest lender will worsen the situation for investor clients of collapsed financial adviser Storm Financial, the government says.

Commonwealth Bank of Australia announced last week it would suspend all repayment obligations for loans taken out by Storm Financial customers until August 31."

More in the Brisbane Times from AAP here;

http://news.brisbanetimes.com.au/breaking-news-national/cbas-storm-announcement-disappointing-20090622-ctxk.html


----------



## Solly (23 June 2009)

*"CBA gives Storm victims working 'holiday'"*

"THE Commonwealth Bank has been castigated for continuing to charge interest on Storm Financial victims' loans after last week's offer of a loan repayment holiday.

Bernie Ripoll, the head of a parliamentary inquiry into Storm Financial's collapse, said yesterday he was "hugely disappointed" by the bank's position, which he said would leave clients worse off."


More from Stuart Washington in the Sydney Morning Herald is here;

http://business.smh.com.au/business/cba-gives-storm-victims-working-holiday-20090622-ctz5.html


----------



## Quincy (23 June 2009)

> *Why Storm failed its investors*
> 
> BY Stuart Washington - June 23, 2009 - 12:35PM
> 
> ...




More here : - http://business.smh.com.au/business/why-storm-failed-its-investors-20090623-cur4.html


----------



## bunyip (23 June 2009)

carey ramm said:


> GG
> 
> Congrats on starting this thread which looks to be one of the largest on ASF. I note it has a lot more hits than posts (trolls). Pity it is about such a horribly long train wreck.
> 
> ...





Carey

Perhaps you shouldn't crow too loudly too soon. And perhaps you should refrain from using capital letters to make your point - I know that Joe, the owner and moderator of this forum, views the use of capital letters as akin to shouting. He considers it to be quite rude, and he takes a dim view of it.
You can always use the *bold* or the underline functions if you wish to emphasize a point.

You made yourself look foolish with your first post on this thread, by accusing us of being bank trolls and Storm plants if we were in any way critical of Storm clients. Further, you looked pretty silly by singing the praises of financial advisers, and suggesting that we'd have to be fools to manage our own investments, rather than use the services of an adviser.
You big-noted yourself by listing all your qualifications, and you suggested that we'd need years of experience across a broad spectrum of investments before we'd be competent to mange our own affairs.
All of which is, of course, absolute garbage. 
You showed a lack of understanding of the fact that this forum is for discussion on a broad range of issues, rather than a support mechanism for Storm victims.
All in all you gave every indication of your disapproval of this thread. 
_Now you do an about face by congratulating GG for starting it!_

On the issue of lawyers and banks, you should realise that the certain winners out of the Storm debacle will indeed be the law firms, just as some of us have been saying all along. They're the ones who are guaranteed to walk away from all this with a smile on their faces, win lose or draw.
Stormers getting compensation from the banks is by no means certain. So far the banks are giving no indication of that happening. Rather, they seem intent of taking measures that will bring them even more money from the Storm collapse.

I've said in more than one of my posts that I detest banks, and will be delighted if they're found to have done something wrong and are forced to pay compensation. 
If that does in fact happen, then let's be grateful that justice has been served and the bully boy banks have been pulled into line. But let's not resort to childish point-scoring by people like yourself throwing off at anyone who expressed doubt that such an outcome would eventuate.
Similarly, if banks get out of this scot free, I hope the people who predicted that outcome will not be so childish as to score points by shouting 'See - I told you so!'
This thread is not about point-scoring and it's not about offering a support mechanism for damaged Stormers, as you originally suggested. 
It's about sharing and discussing our views in a mature manner that befits grown men and women.


----------



## Judd (23 June 2009)

Stuart Washington's article in the SMH referred to by Quincy (Post 2033) raises a matter which no-one has explained to my satisfaction.

When I had a margin loan, it was directly with the lender.  All correspondence was directly between myself and the finance provider.  All buy/sell decisions were mine and once the trade was finalized T+3, the details would appear online within the margin loan.  As an aside, while I never held unlisted managed funds under the margin loan some of my acquaintances did and they noticed that the unit prices for these were always by 3 or 4 days behind.  Seems it was due to data feed by the fund mangers, not the margin lender.  So possibly any brouhaha about delayed LVR advice based on unit pricing should be directed towards the fund manager and not the margin lender in these cases.  I am assuming here that the Storm index funds were unlisted.  Bit of a crock unlisted funds since listed index funds are way cheaper but then they don't pay trailing commissions to financial advisers.

Yet that does not appear to be the case in respect of Storm Financial clients.  They were, apparently, required to give instructions to the financial provider who would then (supposedly) act on those instructions.  So were these margin loans the type where the financial adviser acts as agent on behalf of the client and dealt directly with the financial provider?  In other words, did Storm clients effectively provide a form of a power of attorney to Storm?

If that is the case, then some of the statements by CBA and other banks start to make sense in that the contact would probably require them to deal with Storm as the client and not the actual beneficiary.  So when things were really going pear shaped, and the banks were not (as apparently claimed by them) receiving instructions from Storm Financial on what to do with accounts deep in margin loan, they took action to directly contact Storm client's.  Way, way too late it would seem but it does start to make some sort of sense to me if my line of thought in paragraph 3 holds true.

I notice that the CEO of CBA has stated somewhere that while they will look at rectifying errors in respect of loans, the bank will not accept responsibility for the financial advice provided to Storm clients.  Hmmm, maybe some houses could be safe but any funds lost due to the market kacking itself  may not be.


----------



## Pindibog (23 June 2009)

Solly said:


> *"CBA gives Storm victims working 'holiday'"*
> 
> "THE Commonwealth Bank has been castigated for continuing to charge interest on Storm Financial victims' loans after last week's offer of a loan repayment holiday.
> 
> ...





Lets get it right from CBA hardship team mouth. They are just adding the interest up for the 3 mths but to make things worse they are going to charge you interest on the 3mths interest you have deferred!!! Show where that helps anyone but CBA? Again they have increased their cashcow abilities on the unsuspecting. When I asked for the loan repayments to be stopped NONE of this was explained to me. They said yes the loan repayments have been stopped unitl 31/8. I only found out through the ministers office that the interest was accruing and being charged interest on that. I rang CBA and they confirmed. How ridiculous is that!! Misleading again. You read the Hansard report from Wed.17th and even the ministers thought the CBA had stopped repayment of loans and interest.


----------



## awg (23 June 2009)

I asked about this in the first few pages of this thread, but got no answer.

Where are the risk assesments carried out for each client when they first invested?

I still have my old one thru Commonwealth Premium.

It consists of a multiple choice test and various small tables, identifying risk profile and asset allocation.

They MUST be completed by all reputable financial planners 

So how is it possible that people where put into super aggressive options, that did not qualify.

It is almost impossible for a retiree to qualify for aggressive option!

did they get done??

whats the story???


----------



## Trevor_S (23 June 2009)

Pindibog said:


> Show where that helps anyone but CBA?




Shareholders ! You know, those 1000's of retirees and scrip owners, in the former case relying on the income stream from dividends to live on and in the later case, paying them an income ?  For without that income, those groups couldn't pay tax and support the massive welfare budget.

Superannuants ! You know that massive group of people relying on the Super for future retirement plans that often old scrip in the bank

Employees: You know, that group of many 1000 that rely on a profitable bank for a job

Australian Public: You know, the big profits made are taxed at 30%, that goes to Government to implement their (often hairbrained) schemes.

That enough people ? 

Yes it sucks for Storm "investors".


----------



## Farencue (23 June 2009)

There seem to be some who were "stormified" posting on this thread who continue to choose to not to learn from their mistakes but expect everyone else to bail them out.

Incidentally Pindibog, repayments suspended by the CBA means exactly that.  *Repayments suspended.*
Of course the interest continuing to be charged does not seem fair to the "victims" at this stage but I would think people who consider themselves as "investors" can at least read and comprehend plain English.
I sincerely hope you have an accountant and not some other financial planner helping you out of the mess you created for yourself.

And again, the lack of any noise by those posting here, especially the "advisors", seems very very suspicious to me.  
I ask again of those who consider themselves innocent victims: why has nobody said a peep about EC and JC who have *scammed* you blind?
All well and good to blame the banks and I am glad that the banks shoddy loan checksheet has been exposed, but the banks did not scam you outright, the people to who you signed an authority to act on your behalf did.
So why are you not seeking recourse from them?


----------



## pilots (23 June 2009)

Farencue said:


> There seem to be some who were "stormified" posting on this thread who continue to choose to not to learn from their mistakes but expect everyone else to bail them out.
> 
> Incidentally Pindibog, repayments suspended by the CBA means exactly that.  *Repayments suspended.*
> Of course the interest continuing to be charged does not seem fair to the "victims" at this stage but I would think people who consider themselves as "investors" can at least read and comprehend plain English.
> ...




Because they will have all the money they have SCAMMED off the wood ducks hidden away and will be untouchable.


----------



## Farencue (23 June 2009)

Thanks for the heads up pilots but I was thinking some might want blood at least.

Anyway, after having a quick dig around, and I dont think Solly has posted it
before, here is an excerpt from an article titled "Storm Chasers" at www.professionalplanners.com.au 
The O'Brien referred to is Noel O'Brien, co chairman of SICAG.  The bolding is mine.

 "O’Brien is angry about the portrayal of Storm clients by some commentators as greedy and naÃ¯ve. “All of this hullabaloo about margin lending and that we should have known better… the basis of the exposure was always that history has shown that when we have a fall in the market it will recover,” he says. 

“Our buffers were sufficient to see us through that. We’re getting a lot of comment from people in hindsight saying, ‘You should have seen this’. That’s pretty amazing because no one else in the world saw it. We could sleep at night because we had these buffers built in that allowed for downturns in the market.” 

He insists none of the members of SICAG are “high flyers”, despite the overseas trips that Storm arranged and some clients enjoyed, which Professional Planner understands cost $25,000 per head. 

“I live a modest life, my wife and I had a modest income and we were really proud that we could call ourselves self-funded retirees, therefore avoiding becoming a burden on the taxpayers,” O’Brien says.* “We were comfortable in our strategy.”**O’Brien is adamant that the actions of CBA, and Colonial Margin Lending, engineered the collapse of Storm* and vows to fight to protect the assets of all creditors. 

*“[If it wasn’t for the banks] we would still be in the game*, we would all still have our houses,” he says. “*We would still be scared to death about what’s happening worldwide, because it’s never happened before; it’s unprecedented and has been created by the banks *which have rorted their systems, but we’d still be in there fighting. Our aim is to get total restitution; our aim is to get people’s houses back and get them back in the game.”

Perhaps that is the answer to my question: the members of SICAG believe that *the banks* took them out of "the game".
Of course EC and JC and the rest of the crew wouldnt have taken the stormified out of the game, they were too busy with their heads in the sand taking fees and commissions.

As I have said before, the naive "investors" were never going to be winners in what Mr O'Brien considered a game.  It was always EC's game along with all of his salesmen who have been astonishingly silent.


----------



## Solly (23 June 2009)

Another four submissions of interest to the
Inquiry into Financial Products and Services in Australia.


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub82.pdf

http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub83.pdf

http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub84.pdf

http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub85.pdf


----------



## pilots (23 June 2009)

Farencue said:


> Thanks for the heads up pilots but I was thinking some might want blood at least.
> 
> Anyway, after having a quick dig around, and I dont think Solly has posted it
> before, here is an excerpt from an article titled "Storm Chasers" at www.professionalplanners.com.au
> ...




It sure would be good to see all the sales people have to pay back all the high priced commissions they conned out of the people, now that would be good.


----------



## Pindibog (23 June 2009)

Farencue said:


> There seem to be some who were "stormified" posting on this thread who continue to choose to not to learn from their mistakes but expect everyone else to bail them out.
> 
> Incidentally Pindibog, repayments suspended by the CBA means exactly that.  *Repayments suspended.*
> Of course the interest continuing to be charged does not seem fair to the "victims" at this stage but I would think people who consider themselves as "investors" can at least read and comprehend plain English.
> ...




Get your facts right you ignorant person. I did not create this for myself and am helping a family member. They are on the verge of suicide and I will fight to the end and expose both Storm and CBA for the tangled mess they weaved.
By the way suspended means "defer temporarily"  not charge double interest!!


----------



## Solly (23 June 2009)

I've just arrived back to home base after a red eye special so I'm probably a little lagged. And I just took a call from a Stormer in a bit of a distressed state regarding the Comm Bank offer to suspend payments til 31st Aug but as I understand the interest is still being capitalised.

I understand how the initial offer to suspend payments was seen by some as an offer not demand any interest & principal, so I went to the Comm Bank and actually read the Press Release. 

Here it is: http://www.commbank.com.au/about-us/news/media-releases/2009/170609-news-storm-financial.aspx

The actual statement is;
"As a sign of the Bank’s commitment, it will immediately suspend repayment obligations until 31 August 2009 for all loans made to customers in relation to Storm Financial."

To me that's pretty clear, only repayment obligations are suspended.

But what I find notable is this part of the statement:

"In the context of a $220 billion loan book, the financial impact to the Bank of the Storm Financial issue is not considered material.

*Nevertheless the Commonwealth Bank acknowledges that the impacts for customers are more than financial*."

It's the *"more than financial"* part that is really starting to grind some down. You'll never unscramble an egg but I'm starting to question whether the distress these people are experiencing warrants the medicine that's being dispensed to them.

My opinion is that if I was in the Stormers position I would be doing _*what ever it takes*_ to arrive at a satisfactory remedy and _*under no circumstances give up, give in or fold*_.


----------



## Julia (23 June 2009)

Judd said:


> Stuart Washington's article in the SMH referred to by Quincy (Post 2033) raises a matter which no-one has explained to my satisfaction.
> 
> When I had a margin loan, it was directly with the lender.  All correspondence was directly between myself and the finance provider.  All buy/sell decisions were mine and once the trade was finalized T+3, the details would appear online within the margin loan.  As an aside, while I never held unlisted managed funds under the margin loan some of my acquaintances did and they noticed that the unit prices for these were always by 3 or 4 days behind.  Seems it was due to data feed by the fund mangers, not the margin lender.  So possibly any brouhaha about delayed LVR advice based on unit pricing should be directed towards the fund manager and not the margin lender in these cases.  I am assuming here that the Storm index funds were unlisted.  Bit of a crock unlisted funds since listed index funds are way cheaper but then they don't pay trailing commissions to financial advisers.
> 
> ...



Judd, what you say makes complete sense and is how I imagined it all happened.



awg said:


> I asked about this in the first few pages of this thread, but got no answer.
> 
> Where are the risk assesments carried out for each client when they first invested?
> 
> ...



awg, either a basic risk assessment was not done, i.e. I don't recall any Stormer describing this happening, or it was done as window dressing and then ignored.

And I'd echo the surprise others have expressed about all the anger from Stormers being directed toward the banks.   It's the Cassimatises who set up the whole delicious scheme which everyone was happy about while the market rose but which was designed just to continue to benefit the advisers when it all went pear shaped.   Why aren't you more angry at your advisers?



Farencue said:


> There seem to be some who were "stormified" posting on this thread who continue to choose to not to learn from their mistakes but expect everyone else to bail them out.
> 
> Incidentally Pindibog, repayments suspended by the CBA means exactly that.  *Repayments suspended.*
> Of course the interest continuing to be charged does not seem fair to the "victims" at this stage but I would think people who consider themselves as "investors" can at least read and comprehend plain English.
> ...


----------



## Farencue (23 June 2009)

Get my facts about what right Pindibog?  

Oh, I see, its not you who was stormified.  I hope the person you are "helping" has received some good advice on how to deal with the situation.
My brother in law recently committed suicide Pindibog, but it wasnt because he was stormified.

Learn to think critically before you make any more emotional appeals, *your *ignorance is showing.


----------



## awg (23 June 2009)

As no Stormer has mentioned risk management, I can only assume that none was done.

Every Financial planner I have ever seen does these.

As far as I knew, it is a condition of their licensing requirement.

Further than that though, it cuts to the absolute heart of the matter, for every party.

The planners, banks and clients are all liable

"Jointly and Severally" liable...I wonder if anyone else has had reason to contemplate that horrid clause like I have, funnily enough, in a bank finance deal..just one thing that taught me to be cautious with risk management.

Any person that allowed themselves to place 100% of their money into the share market after 4 years of above average returns takes a very high risk, that is evident at any level.

to add a margin loan would only be acceptable to the absolute highest risk taker, with an understanding that a black swan event can wipe your capital to zero in days.

To risk the house on that was absolute madness beyond my comprehension.

I went through all the permutations and posibilties myself over the years, and I can tell you I would not substantially leverage my PPOR again.

disclosure..my capital is substantially down over the last 18 months

As to the banks, as far as I can see, they definitely should be liable for something, as to how much, that would be a huge guess.

I imagine in cases where the banks approval process was improper, they will have far greater liability

Storm is at fault, but they would have nothing left

Not trying to be critical of individuals 

just have a burning curiosity

hey fin planners etc, Carey, Solly, that have seen numerous ex-stormers, do you know?

any risk assesments done??

when all the details come out, this will be one long tale of lame-assed hubris and stupidity


----------



## Garpal Gumnut (23 June 2009)

awg said:


> As no Stormer has mentioned risk management, I can only assume that none was done.
> 
> Every Financial planner I have ever seen does these.
> 
> ...




As the opener of this thread.

I must vote this the most cogent assessment, of this sesquipidalian saga, on the thread.

Listen up and learn... Stormers, Financial Advisers, ASIC, Banks and Government.

gg

gg


----------



## bunyip (23 June 2009)

Farencue said:


> Thanks for the heads up pilots but I was thinking some might want blood at least.
> 
> Anyway, after having a quick dig around, and I dont think Solly has posted it
> before, here is an excerpt from an article titled "Storm Chasers" at www.professionalplanners.com.au
> ...





Noel O'Brien sounds like he was completely out of touch with reality, and still is. Most of what he's saying is so highly inaccurate, it's laughable.
I wonder if he reads this forum. If he does, then there are a couple of things that should be pointed out to him. 

Let's summarise his main points...

* Nobody in the world saw it coming. 
* The basis of the exposure was always that history has shown that when we have a fall in the market it will recover.
* Our buffers were sufficient to see us through that.
* CBA, and Colonial Margin Lending, engineered the collapse of Storm.
* If it wasn’t for the banks we would still be in the game, we would all still have our houses. We would still be scared to death about what’s happening worldwide, because it’s never happened before; it’s unprecedented and has been created by the banks which have rorted their systems, but we’d still be in there fighting.

Well, Noel O'Brien, here is the reality that you can't see for yourself....

Lots of people saw the impending financial meltdown and stockmarket crash. In fact you'd have to be living under a rock in the Gobi Desert _*not*_ to see it, given that dire warnings were being given daily in every media outlet for months beforehand. These warnings, incidentally, came in plenty of time for investors to take defensive action before their portfolios were decimated.
Yes Noel, the market has always recovered after past slumps, just as it will recover again this time. Only problem is that when you're geared as heavily as you Stormers were, a decent sort of a market crash will wipe you off the slate long before the next recovery comes along to bail you out of trouble.
And please don't tell us you didn't know that a decent market crash was possible, even likely. Booms are invariably followed by busts - you surely must have known that.
Had you forgotten the lessons of the 50% market crash of 1987? 
Surely you'd heard of the great depression of the 1930's, and the 1929 market crash that preceded it. 
Surely you were aware of various other markets slumps between 1929 and 1987. 
Were you really incapable of comprehending the possibility of the same thing happening all over again? 
The suggestion that this market slump and financial crisis were unprecedented is utter rubbish. It's all happened before.....you just chose to ignore the historical facts.

Now you're blaming the banks. 
No mention of Cassamatis and how he duped you.
No mention of the cavalier attitude and reckless behaviour that caused you to take on massive loans relative to the value of your assets.
No mention of the fact that your plan was doomed to failure because it depended on the stockmarket continuing to go up. 
No mention of the fact that no bank can afford to sit on its hands and do nothing while the security of its clients loans becomes increasingly risky as the market keeps going downhill in a big way.

Perhaps the banks are partly to blame for the trouble you find yourselves in. 
But it's just downright childish of you to blame them totally, while you refuse to take any responsibility or blame for the part you played.


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## Garpal Gumnut (24 June 2009)

awg said:


> As no Stormer has mentioned risk management, I can only assume that none was done.
> 
> Every Financial planner I have ever seen does these.
> 
> ...






bunyip said:


> Noel O'Brien sounds like he was completely out of touch with reality, and still is. Most of what he's saying is so highly inaccurate, it's laughable.
> I wonder if he reads this forum. If he does, then there are a couple of things that should be pointed out to him.
> 
> Let's summarise his main points...
> ...




It must be the winter solstice.

Two excellent posts late at night.

Stormers, SICAG, Bernie Ripoll and Banks should read this, oh and you too Manny!

gg


----------



## Ferret (24 June 2009)

Some very good posts here by awg, bunyip and others.

I'm one who finds it quite incredible that SICAG and so many stormers are placing all their blame on the banks and none on Storm and the people behind Storm.

Storm did an absolutely amazing job selling themselves to their clients when their clients still see no fault in Storm after whats happened.  

Seems being "stormified" didn't mean being geared to the hilt - it meant being brainwashed.


----------



## stung (24 June 2009)

Farencue said:


> Thanks for the heads up pilots but I was thinking some might want blood at least.
> 
> Anyway, after having a quick dig around, and I dont think Solly has posted it
> before, here is an excerpt from an article titled "Storm Chasers" at www.professionalplanners.com.au
> ...




Noel O'Brien is the father of Andrew O'Brien (a former Storm financial advisor). He is very unlikely to lay blame at the feet of Storm or their salesmen.

In my case, all the banks did wrong was loan me too much money and in combination with Storm were a bit creative with the figures to have the loan approved. It was Storm who kept ignoring our requests to sell out while we still had a fighting chance.
Instead they left it too late so that our remaining funds had to be used to service the margin loan, leaving zilch to use to put back into a rising market. 

I lay blame with EC for being a crook, his salespeople for decieving their clients, the banks for reckless lending and myself for falling for it all.


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## Garpal Gumnut (24 June 2009)

stung said:


> *Noel O'Brien is the father of Andrew O'Brien (a former Storm financial advisor). *He is very unlikely to lay blame at the feet of Storm or their salesmen.
> 
> In my case, all the banks did wrong was loan me too much money and in combination with Storm were a bit creative with the figures to have the loan approved. It was Storm who kept ignoring our requests to sell out while we still had a fighting chance.
> Instead they left it too late so that our remaining funds had to be used to service the margin loan, leaving zilch to use to put back into a rising market.
> ...




Fair dinkum.

I've heard everything now.

This is a crazy parade.

Is he really the father of a Storm Adviser.

Perhaps this should be disclosed on the SICAG site.

gg


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## Solly (24 June 2009)

*"Bank may be left with $800k bill"*

"WHEN the Commonwealth Bank sold out 14,500 investors in its Storm Financial branded indexed investment funds, it locked in billions of dollars worth of losses."

"Did the bank sacrifice them (the investors) in an argument with Cassimatis or did the bank simply panic?"

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/06/24/60565_business_desk.html


----------



## Solly (24 June 2009)

*"Storm investors withdraw from client list"*

"Clients resentful over sale
Claims emerge that former Storm investors withdrew names from client list after book sale."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/6773.htm?rdeCOQ=SID-3F579BCE-238087D2


----------



## Solly (24 June 2009)

*"CBA defends charging interest on Storm loans"*

More by Murray Cornish from the ABC;

"A CBA spokesman says it has made its position clear and one size does not fit all for Storm clients, so it is working through it on a case-by-case basis."

http://www.abc.net.au/news/stories/2009/06/23/2605835.htm


----------



## Quincy (24 June 2009)

awg said:


> Further than that though, it cuts to the absolute heart of the matter, for every party.
> 
> The planners, banks and clients are all liable  . . .
> 
> ...






Ferret said:


> I'm one who finds it quite incredible that SICAG and so many stormers are placing all their blame on the banks and none on Storm and the people behind Storm.






chrisgee said:


> . . .   -so whiose fault was it??- im all for assic and the inquiryes let them roll-we just want our money and houses back- just like what we had before this mess happened. i dont care whose faullt it was-we just want to have the life we had before- our money in the bank and nobody taking our houses off us.




On a slightly different tangent, regarding the prospects of potential claims for compensation for Storm investors, the following is a summary of a matter that I am currently involved with (as an investor).

The liquidators of my matter (approximately $133 million shortfall after liquidation) believe that there are grounds for commencing actions against various parties for breach of statutory and/or other obligations, however they have advised us (the investors) that “wrongdoing itself is not enough to justify us pursuing such litigation”. 

In my matter, they have advised that any damages claims are unlikely to be recoverable as, firstly :

i. there is limited Directors and Officers' liability
insurance (D&O); and

ii. the directors have insufficient personal assets.

Secondly, they have said that whilst there appears to be insurance available to cover claims made against the various parties involved (other parties in my matter include the subject company’s auditors and property valuers), again, even if such proceedings were successful, they consider that *the likely amount of damages that may be awarded against these parties will be significantly reduced  by reason of the “proportionate liability” legislation which requires the Court to allocate liability between the various wrongdoers.*  This would involve the Court having regard to the extent to which the various companies were responsible, which would probably operate to reduce any award of damages against each individual party.

I am not saying that this stance would necessarily apply to Storm, however It would seem that if this "proportionate liability" legislation was to be applied in the Storm matter (if an action was commenced), then it may be that only a certain percentage of the money lost could be claimed from the Banks involved.

May or may not apply to Storm - just my


----------



## Solly (24 June 2009)

*"Why Storm failed its investors"*

"Failed financial planning firm Storm Financial was within moments of being able to avoid a large amount of pain its customers experienced."

More by Stuart Washington from the SMH;

http://business.brisbanetimes.com.au/business/why-storm-failed-its-investors-20090623-cur4.html


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## Smiley (24 June 2009)

Yes, Noel is indeed Andrew's dad . . . 

risk assessment . .  you gotta be kidding. . . .i know dozens of stormified people and none had this done, except for a shonky tick a choice - i want minimal risk or high risk and people chose the first . . . but did not get this. . .

i also marvel at blaming the banks but the vast majority of those i talk to now realise EC was the financial 'guru' and all his peons ('advisers') did just what he said.. . they blame EC and JC and themselves. . . 

but there are some who cnnot believe they were such idiots to follow EC and somehow believe he had a good strategy  . . . wake up stormies  . . . he and JC are still living in their mansion and your house is gone

clients thought they were protected as 'advisers' promised they would pull them out of the market and their homes were never in danger. . . . when numerous phone calls were made and clients even fronted up to ask that their portoflios be sold . .  their instructions were not often followed. . . . i know this personally . . . 

even smart people can be caught out . . . just look at Madoff's clients. . . 

don't like the term victim, as stormified chose to sign up with storm . . . . and they/ we are paying the price 

live stream today - listen into ASIC:
The Parliamentary Joint Committee on Corporations and Financial Services will hold its first public hearing for its inquiry into financial products and services tomorrow, Wed 24 June 2009, starting at 5.30pm in Committee Room 2S1, Parliament House, Canberra.

The hearing will be streamed live on the web: http://webcast.aph.gov.au/livebroadcasting/


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## Smiley (24 June 2009)

"Failed financial planning firm Storm Financial was within moments of being able to avoid a large amount of pain its customers experienced."

Stuart Washington is misinformed as many clients were sold down in Oct and Nov 08 - with their portfolios worth less than their huge margin loans


----------



## stung (24 June 2009)

Garpal Gumnut said:


> Fair dinkum.
> 
> I've heard everything now.
> 
> ...




I made mention of this on pg 34 (post 672). I thought this was significant information but no one responded so I left it alone. 

I do note, however, back then it appears I was only game to say that I was 90% sure. It also seems I wasn't game to name anyone. 

The reason I did not join SICAG is because  Noel O'Brien is  a founder. Having said that I do believe that they have done some great work dealing with the banks, and this in turn has helped me. I just wish they would admit that it was Storm that played the major role in the debarcle.


----------



## Quincy (24 June 2009)

Article in the Financial Review by Patrick Durkin - 22 June, 2009.


*"REGULATOR'S ADVICE: INVEST BETWEEN THE FLAGS"* 

The Australian Securities and Investments Commission is to launch a big awareness campaign targeting retail investors, amid fears that the disclosure-based regime has failed them.

The move comes after collapses that have wiped more than $73 billion from their savings.


More here : 
	

		
			
		

		
	

View attachment AFR - 22.06.2009.pdf


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## awg (24 June 2009)

So no risk management at all from anyone.

So the investors who put their home on the line, what they did is say

"bet the house on red"...and lost

The advisors who permitted this, after 4 years of high market returns should be in jail, I have absolutely no qualms about that. Criminal Incompetence.

No wonder commssion Fin planning now to be finished up

Absolute greed by the planners 

Manny should be in the can, but the guy seems very cunning, wouldnt surprise me if he has his ar$e legally covered.

The mathematics and logic are terribly simple.

If you dont understand how an Investment works (Margin loan) dont invest in it...you MUST know EXACTLY what your margin is, and know what you will do when if it is hit ie ( close out your position within 24 hrs!)

for Ralphie babie to admit, he must be as shocked as me laxity of CBA risk management in relation to this.

1987 shows a recent example of what can happen to heavily margined equity holders, which is still well within the memory of most people involved in this debacle


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## donteventryit (24 June 2009)

http://www.businessspectator.com.au/bs.nsf/fmISBlogHome?OpenForm&src=blb&is=Non-Industry&blog=Aurelia%20the%20Wise

This all sounds a little too familiar ...

Posted 24 Jun 2009 7:40 AM
It's all relative
Dear Aurelia

I'm a financial advisor, which doesn't make me the most popular kid on the block at the moment. But that's not my main problem. My big problem is that one of my biggest clients has lost three-quarters of her net worth due to my recommendations, and she happens to be my sister-in-law. This is causing a lot of tension in the family, as you can imagine, including some very heavy pressure from the head of our family, who expects me to pay her back the losses. My response to them all is caveat emptor, but they don't understand Latin.

Robert J, Brisbane

Dear Robert

What's the old story about not doing business with children, animals or family? If we are keeping with matters latin, I was glad to see you used a small cap in describing your family. While you don't say it I am guessing that you probably over-fertilised your own positions so you have had similar losses or at least I hope so. It's your only defence. If you happened to get out of the market in one piece and didn't share the intel with the family and all your other clients you are probably in an extraordinarily painful position. Any thoughts of living in a boatshed somewhere down the south coast while they cool off?​


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## Judd (24 June 2009)

awg said:


> ....If you dont understand how an Investment works (Margin loan) dont invest in it...you MUST know EXACTLY what your margin is, and know what you will do when if it is hit ie ( close out your position within 24 hrs!).....




If there is one thing that I am starting to find annoying it is reading submissions in which the author is complaining about high LVR's being the problem.

It wasn't the LVR (Loan to Valuation Ratio) which was the problem.  It was the gearing involved.

So to set things straight for those "Stormers" who may occasionally read [this forum,] and do not understand the difference, gearing is the loan divided by the asset value which is then expressed as a percentage.

Thus 60000 (loan)/300000 (Asset Value) equals 20% (gearing).

Onto LVR which is the ratio expressed as a percentage that the margin lender will use to determine how much to lend against a particular product.  It is also used plus the buffer to determine when a margin call will be triggered.

Hence,  Market Value of Asset 300,000, LVR 75%, Lending Value 300000*75% equals 225000.  Buffer at 10% of Lending Value equals 22500.  Lending Value plus Buffer 247500.  Subtract amount of Loan (60000) equals 187500 or 62.5% of the Market Value.  That means, in this example, the Market Value would need to fall by 62.5% before a margin call would be made.

For "Stormers", the gearing killed you.  Pure and simple excessive gearing.

By the way, those calculations took me less than 5 minutes and its primary school maths done by hand on the back of an envelope.  Understanding the basics of a margin loan was explained to me when I applied for one.

So to educated people, including retired teachers, who made submissions to the inquiry you could ask yourselves whether you have been a tad lazy in the application of your past training and work.

Love and kisses, I'm off to earn a living.


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## asproboy (24 June 2009)

I'm sure Manny, Mr Jelich and others are feeling better today knowing that they're not living in Germany:
http://www.smh.com.au/world/zimmer-frame-gang-tortures-adviser-who-lost-20090624-cw44.html


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## Solly (24 June 2009)

*"CBA, Storm victims wind up negotiations"*


"Three days of intensive talks between Commonwealth Bank of Australia and a representative of former investor clients of collapsed Storm Financial concluded yesterday amid hopes of a settlement."

See the full story by Duncan Hughes in the Australian Financial Review.......


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## Farencue (24 June 2009)

Like Mr gg, Ive always thought that SICAG mob were very suss in their emotionally laden language with no hard facts or anything to say about the Storm advisers.  How very very interesting that Mr O'Briens son was/is a Storm adviser.

Doesnt really give them much credibility in my opinion, although I do appreciate that a poster here says they were helped by SICAG.

I was beginning to think that the reason nobody was blaming Storm was because the punters were friends and family of the scamming advisers.  I cant think why someone would scam their own family and so it leads me back to the thought that pure greed drove the majority of these people.  Some of the submissions to the parliamentary enquiry are nothing but sob stories highlighting their naiveity.

Yes, Storm certainly have a lot to answer for, wonder if anything will be forthcoming?


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## Farencue (24 June 2009)

Interesting too Judd that you are saying that it was the gearing that was the problem not the LVR.

Here is an excerpt from Ron Jelich's submission to the Parliamentary Joint Committee:

"The favourable treatment of one of my clients, Andrew Symonds, is a
good example of the intimate relationship that existed between
Storm and the CBA. I recall that my associate Andrew O’Brien was
doing a refinance of Andrew Symonds’s property from Suncorp to
CBA.
The conventional lending requirement against residential property is
an 80% LVR. When Amanda Holmes from CBA Townsville heard that
it was Andrew Symonds she indicated that she would lend Andrew
90% LVR rather than the 80%.
Andrew O’Brien, my associate, suggested that if he obtained a signed
cricket bat from Andrew Symonds, would CBA waive the mortgage
insurance? This was agreed to and the loan went through at a 90%
LVR with complimentary mortgage insurance.
My understanding is that Andrew Symonds did not know about this
arrangement. Andrew O’Brien did however organize for him to sign
the cricket bat and it was provided to the representatives from CBA.
Andrew Symonds subsequently invested that money and also monies
from a margin loan through Colonial."

What a web that has been woven, fancy Andrew O'Brien being an "associate" of Mr Jelich.  No wonder nobody has anything bad to say about Storm, old boys club perhaps?

I find it rather strange Mr Jelich thinks there is anything unusual about a 90% LVR and that Amanda from the CBA only lent 90%  because it was Andrew Symonds.  *What a load of horsecrap Mr Jelich.*Westpac lent me 90% no problems (nothing to do with Storm) all I had to do was take out mortgage insurance.  So what if CBA waived it?  Also why did Andrew O'Brien offer the signed bat when Andrew Symonds knew nothing about it (according to Mr Jelich).

I do feel some sympathy for people like chrisgee who obviously have no clue about investing (all they want is their house and money back like they had before ) and I hope those people can learn some lessons about being scammed - as I did once upon a time.

People like Ron Jelich and the O'Briens and the rest of their ilk?  Just cant think of the appropriate words at the moment.  Ah thats it - scumbags.


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## bunyip (24 June 2009)

stung said:


> Noel O'Brien is the father of Andrew O'Brien (a former Storm financial advisor). He is very unlikely to lay blame at the feet of Storm or their salesmen.
> 
> In my case, all the banks did wrong was loan me too much money and in combination with Storm were a bit creative with the figures to have the loan approved. It was Storm who kept ignoring our requests to sell out while we still had a fighting chance.
> Instead they left it too late so that our remaining funds had to be used to service the margin loan, leaving zilch to use to put back into a rising market.
> ...




Stung

I give you the highest praise for your candid and realistic appraisal of the Storm debacle. 
You balanced viewpoint and above all, your honesty in accepting part of the blame yourself, are a nice change after all the rot we've been hearing from SCIAG about how it was all the fault of the banks.

I commend you for having the character to come out and tell the true story.

Stormers would be doing themselves a huge favour if they faced up to the truth as squarely as you've done.

All the best to you.


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## Quincy (24 June 2009)

Farencue said:


> . . . . Here is an excerpt from Ron Jelich's submission to the Parliamentary Joint Committee:
> 
> "The favourable treatment of one of my clients, Andrew Symonds, is a
> good example of the intimate relationship that existed between
> ...





I wonder if Ron Jelich obtained Andrew Symonds' ("one of my clients") authority to divulge details about Mr. Symonds' personal dealings with Jelich and Storm and the CBA etc. in his submission ?


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## Onlooker (24 June 2009)

Of course, if all those "Stormers" had known something about Greek syntax, they would have known where they would finish up, to wit:

"Greek Syntax
The Restrictive Use of the Attribute Adjective: For example John 10:11 Jesus says, "I am the good shepherd". In Greek, the word order is "I am the shepherd the good", that is 'article', 'noun', 'article', 'adjective'. This is the second way the attributive adjective can be formed. The noun 'shepherd' is being modified by the adjective 'good'. Notice that 'good' still comes after the second definite article which modifies this noun. This position helps to emphasis the quality of "good" as if to say that not all shepherds are good. It could be translated, "I am the shepherd, that is, the good one (as opposed to the others who are not good)".

Therefore, "Storm Financial" is just the Greek way of writing "Financial Storm."


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## Trevor_S (24 June 2009)

pilots said:


> Because they will have all the money they have SCAMMED off the wood ducks hidden away




No there isn't, there is not money.  It's not as though it;s all tucked away in an account earning 6%, rubbing their hands together like Dr Evil and cackling.  It's GONE.  To get any back, you have to take it from someone else.

That aside, maybe Storm "victims/investors whatever they call them selves can adopt the German philosophy.

http://www.smh.com.au/world/zimmer-frame-gang-tortures-adviser-who-lost-4-million-20090624-cw44.html


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## Onlooker (24 June 2009)

I wish to post a few links but can't do so until I have posted at least 5 submissions, so here goes number 2


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## Onlooker (24 June 2009)

... and number 3


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## Onlooker (24 June 2009)

and number 4   (almost there!)


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## Onlooker (24 June 2009)

... finally, number 5!  (maybe Storm Financial clients ought to have a bit of a delayed-action bar in their investments, too


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## Onlooker (24 June 2009)

Watch http://www.youtube.com/watch?v=4KLUKsI-4Xs and http://www.youtube.com/watch?v=1T1fscqdPWo&feature=related (copy and paste URL into your browser)

Emotional reportage but not hard-hitting enough!

So how did that desparate sailing-couple, Vivienne and Maurice, shown at the beginning and end of those video clips, finish up with nothing except a huge mortgage on their house? Here's an example of how it might have happened which assumed a relatively 'safe' 75% lending margin (some Banks lent as high as 100%!) and completely ignored very heavy bank and interest charges - not to mention the upfront 7% and ongoing 1% commission to our friends Emmanuel and Julie:

1) They borrowed 75% against their $1 million house

2) They invested the borrowed $750,000 in shares

3) They borrowed another 75% against the first lot of shares to buy another $562,500 worth.

4) This could have gone on several more times like the veritable financial perpetuum mobile it seemed to be but let's assume they came to their senses and stopped there. They now held shares totalling $1,312,500 and had loans totalling $1,312,500

5) Then the 'unthinkable' happened: the sharemarket dropped 50% and the value of the shares was reduced to $656,250. The lenders called for top-up money to restore the 75%/25% margin failing which they sold all shares at $656,250 (perhaps even lower!) which left a shortfall of $656,250 against the loans. All shares were gone and the 'gambler' - sorry, investor - was left with a debt of $656,250 against the house which would also need to be sold to repay the balance of the loan.

Push up the gearing to 85, 95, even 100%, continue the "buy, borrow, then buy again" routine a few more times, allow for an even steeper drop in share values (some of Australia's most conservative company shares had dropped to as little as one-third of their former value at the climax of the shake-out), and it's easy to see how that housewife fighting back her tears could have finished up with nothing except two margin loans totalling 2.5 million dollars! Or the 73-year old granny who finished up with a 1.18 million margin loan and a $256,000-debt on her house! Welcome to the real world of high-stakes finances!

Did our friend Emmanuel explain this possibility to his clients? He seemed to have laughed those loans off as a Claytons loan - "the loan you have when you are not having a loan." Of course, every 100%-geared up client meant a doubling of Storm Financial's fees!

Some of those investors didn't look sophisticated enough to withdraw money from an ATM, let alone buy and sell shares. Who did it for them? And who told them what to buy and what to sell? Given the number of clients, Storm Financial could have been in no position to individually monitor and manage those portfolios. Did they use a cookie-cutter routine of 'get-set-and-forget' with the same shares for all their clients? A highly dangerous strategy even with a paid-up portfolio which allows one to sit it out when things go bad; totally suicidal with a highly-geared portfolio when each market downturn could mean a margin-call and a potential sell-off! What analysis, if any, was good old Emmanuel referring to when he said, "In the analysis we did, we did not believe the house was at risk"? What professional expertise did this former insurance salesman possess that made him think he could bet his clients' money (and worse, his clients' BORROWED money!) on his aberrant model of an ever-rising market? Even at the absolute nadir of the collapsing market in October 2008, when the index had almost halved from where it had been just five months earlier, and when Storm Financial were finally forced to send out this letter http://www.theage.com.au/ed_docs/Letter.PDF, urging clients to convert what was left of their portfolios into cash, they advocated that clients should NOT use the cash to repay their 8%-interest margin loans, but to keep it on deposit at 4% "so that the cash can be switched back into equities to gain from any upswing in the future." Many people instructed Storm Financial to switch to cash. Had Storm Financial acted on those instructions, a lot of pain could have been avoided. But here's the kicker: not one of those instructions was acted on ... read more at http://business.smh.com.au/business/why-storm-failed-its-investors-20090623-cur4.html

There are many questions: such as who declared on the bank's loan application form that the unemployed widow shown in the video clip, who finished up with a $300,000-debt, had a MONTHLY after-tax income of $104,000 ? And what was the 'sales pitch' employed by those dozens, if not hundreds, of Storm Financial's 'investment consultants'? What presentations and promises did they make to their would-be investors? 

Those people must have had some idea of how dangerous a game it was they were playing. I mean, our 'yachtie' Maurice, who wondered aloud on-camera how the banks could have lent him $2 million, didn't look like someone who'd spent his life selling shoelaces door-to-door. He must've realised how dangerously deep he was into this high-stake poker-game! Was it greed that conquered all their fears, that stopped them from asking some searching questions? Every suburban accountant or solicitor could have told them of the dangers!

Of course, had things gone their way, had the market gone UP by 50% to give them a PROFIT of $656,250 - and all on borrowed money! -, they would no doubt have rubbed their hands with glee and regarded the rest of us, who conducted their financial affairs with a little more caution, as complete simpletons. However, now that the party is over for them, they're desperately trying to portrait themselves as innocents who have been had. As my Canadian friend Chris put is rather succinctly, "Playing dumb is not an option!" They were all playing "double-or-nothing" - and got it!


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## Smiley (24 June 2009)

Onlooker, your points have already been made many times on this forum and do not believe everyting you read/hear in papers - the media.  This is untrue:
"Many people instructed Storm Financial to switch to cash. Had Storm Financial acted on those instructions, a lot of pain could have been avoided. But here's the kicker: not one of those instructions was acted on"

Many people who signed the Storm October paper to sell their portfolios, were sold down in Oct and Nov or Dec - al ended up with little left or in negative territory . . . such is


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## carey ramm (24 June 2009)

*The Front Page of Every Newspaper Tomorrow!!*

Slater & Gordon and Commonwealth Bank map way forward for Storm clients

National law firm Slater & Gordon and Commonwealth Bank of Australia (CBA) will implement an accelerated resolution process designed to achieve a fair and equitable outcome for former Storm Financial clients who entered loan agreements with CBA or Colonial Geared Investments.  

Key features of the process include:
·	An individual review by CBA of each client’s circumstances assessed against a framework developed in consultation with S&G;
·	Full and frank disclosure of documents and facts relevant to each client by CBA;
·	The provision by S&G of independent legal and financial advice paid for by CBA;
·	A commitment to good faith negotiations; and
·	Former High Court Justice Ian Callinan as an independent arbitrator where agreement cannot be reached between CBA and the client.

S&G and CBA have nominated a group of S&G clients, selected at random, to take part in the resolution process.

The process does not prejudice the ASIC investigation that is ongoing or anything flowing from that investigation.  

CBA has agreed that any clients who participate in the process will still be able to participate in any outcome arising from the ASIC investigation, on the basis that they are placed in no worse position as a result of participation in the process.  

CBA has also agreed that any client who is dissatisfied with an arbitrated outcome remains free to pursue any legal remedy available to that person.  


Now i am sure that this will be very welcome news to all those storm victims who regsitered with Slater and Gordon. It is a great outcome and avoids lengthy litigation.


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## carey ramm (24 June 2009)

Aark Aark Aark.... is that a crow i hear Bunyip!

Sorry didnt mean to be petty...


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## Onlooker (24 June 2009)

Point taken, Smiley, and neither would I believe everything a socalled Financial Adviser tells me!  Can anybody tell me what their specific educational and professional prerequisites are?  I heard a whisper that the intrepid Emmanuel Cassimatis has applied for a new Financial Adviser's license; is that something else I should not believe?

What bothers me most about this model of endless greed is that there seemed to have been no end-point.  Did the individuals who engaged in this debt-upon-debt arrangement have any specific target in mind when they would sell out, pay off their loans, and be happy with what they had got?


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## Solly (24 June 2009)

*"We won't benefit from Storm loans: CBA*"

''It has been reported that we will capitalise the deferred interest and add it to the debt at the end of the suspension period, with the suggestion that we will gain from this,'' Commonwealth Bank said in a statement. ''We have never said this and it has never been our intention.''

I stand corrected my interperation of the Comm Bank Media Release was wrong.

More here by Chris Zappone in Business Day;

http://business.brisbanetimes.com.au/business/we-wont-benefit-from-storm-loans-cba-20090624-cwjk.html


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## carey ramm (24 June 2009)

onlooker - i could be wrong but the application form for the lady with the $104k per month salary was a personal client of EC and to the untrained eye (such as me) it certainly looked like EC's handwriting. Also the lady did happen to mention to me that EC kindly filled the forms out. Maybe Storm just got so used to having zeros everywhere that they just added a few to $104 out of habit.


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## Onlooker (24 June 2009)

Carey Ramm, very interesting!  There is one victim who seemed genuine enough and gullible enough to have been talked into something she was completely unfamiliar with.  As for many of the other more 'able-bodied' players who now scream they have been wronged, they sound a little bit like the former Sydney Ferries boss who has just appeared on the ABC's 7 o'clock news, claiming he had run up some $200,000 worth of private purchases on his company credit card "because nobody told me not to"  (totally apropos but you get the drift, don't you?) This culture of going for broke and then, if caught, hoping for some sort of divine intervention has become far too ingrained in our country.  Whatever happened to common sense and personal responsibility?  The rest of us have to pay for this "privatise gains, socialise losses" attitude!


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## Steve Borden (24 June 2009)

carey ramm said:


> *The Front Page of Every Newspaper Tomorrow!!*
> 
> Slater & Gordon and Commonwealth Bank map way forward for Storm clients
> 
> ...




This is a welcome step for the many hundreds of CBA clients who are struggling to retain the family home. The fact that the CBA have now been dragged to the table given their earlier statements is due in no small part to the work done by you, S&G and some tenacious types in the media. Well done to all who have got the action this far.

Would think this places BoQ in a very uncomfortable position, hopefully they finally start to show some leadership and act responsibly rather than hiding in the hope it will all go away. Any diminution of shareholder value stemming from this is the sole responsibility of its North Ward branch and the management who allowed the activities to continue unrestrained.


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## Solly (24 June 2009)

And as Carey stated above, it's now hitting the wires (or wireless if on UMTS ) 

*"CBA, law firm agree to Storm negotiations"*

"The Commonwealth Bank may have avoided a class action from Storm Financial clients it lent to.

The bank has been accused of irresponsibly lending to people who invested through Storm, with some losing their house as a result of the collapse of the Townsville-based financial adviser."

http://www.abc.net.au/news/stories/2009/06/24/2607635.htm


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## Pindibog (24 June 2009)

Did anyone listen to the first of the public hearings into the collapse of Storm , Opes Prime and others as ASIC appeared? I missed it.


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## darkside (24 June 2009)

So , if the CBA has to hand back "bucket loads" of cash to  aggrieved "stormers" will this effect their share price, their dividends and also  the future direction of the bank. Surely there must be some shareholders with an opinion on this ..


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## Solly (24 June 2009)

From;

http://www.commbank.com.au/about-us/news/media-releases/2009/240609-storm-customers.aspx

*"Commonwealth Bank commits to Storm customers"*

24 June 2009: The Commonwealth Bank restated today its commitment to identifying and resolving any shortcomings in how the Bank lent money to Commonwealth Bank customers involved with Storm Financial Ltd.
The Bank stated:
Where we have done wrong, we will put it right. This can only be done on a case-by-case basis.
We will suspend repayments on customer loan obligations until 31 August, 2009.
It has been reported that we will capitalise the deferred interest and add it to the debt at the end of the suspension period, with the suggestion that we will gain from this.  We have never said this and it has never been our intention. We will ensure no customer will pay additional interest as a result of this payment suspension, and any customer who has been identified as being wronged by the Bank will have this interest waived altogether in the overall settlement.
We restate our commitment that no customer will be disadvantaged as a result of any shortcomings identified in the Bank’s lending practices, however the Bank is not responsible for the financial advice provided independently by Storm Financial.
Any settlement agreed between the Bank and its customers, either in the past or future, will be improved should the Bank be required to do so to meet its obligations.

The Bank remains committed to an accelerated resolution process for its customers. To expedite this process the Bank is continuing to offer assistance in paying for independent legal and financial advice.
In addition, the Bank is working with law firm Slater & Gordon to implement an accelerated resolution process.  The Bank is also working with former High Court Justice Ian Callinan to achieve independent and fair outcomes for customers.
The Bank again appealed to customers experiencing hardship to contact the Bank to discuss their situation.


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## Julia (24 June 2009)

Onlooker said:


> This culture of going for broke and then, if caught, hoping for some sort of divine intervention has become far too ingrained in our country.  Whatever happened to common sense and personal responsibility?  The rest of us have to pay for this "privatise gains, socialise losses" attitude!



I strongly agree about this.  (And in a general sense, not having specifically a go at Stormers here.)

ABC Radio's early hours talkback programme last night was on "Super" and the number of financially illiterate people phoning in was unbelievable.
No understanding that Super is simply a vehicle for holding assets in a tax advantaged situation and absolutely no clue from most of them that if they'd simply been following the daily reports of markets being savaged, they could have instructed their Super funds to switch to the Cash option.

I didn't hear one person suggest that e.g." well, I've really learned something through this downturn and that is that I need to acquire some knowledge and start taking some personal responsibility for my own outcomes."




darkside said:


> So , if the CBA has to hand back "bucket loads" of cash to  aggrieved "stormers" will this effect their share price, their dividends and also  the future direction of the bank. Surely there must be some shareholders with an opinion on this ..



Darkside, CBA have stated that the amounts involved with the Storm mess are immaterial to their total situation, so I don't think the shareholders will be too worried about the bottom line.
If I were still a CBA shareholder I'd be much happier to think that the bank is fulfilling its responsibilities, albeit somewhat belatedly.


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## Cosgrove Fenton (24 June 2009)

Quincy said:


> I wonder if Ron Jelich obtained Andrew Symonds' ("one of my clients") authority to divulge details about Mr. Symonds' personal dealings with Jelich and Storm and the CBA etc. in his submission ?




So true Quincy - of course Ron Jelich has, as he is a Finanical Planner NOT. I love Jelich being quoted as 'my clients this and my clients that' the fact remains he would have not signed one statement of advice. Sure he would of been in the room nodding his approval at 7% commission - endorsing, if not presenting himself only to have someone like Andrew O'Brien sign off on the SOA.

If you want a good laugh read his submission to the Senate Comittee, especially the part where he reckons he was conned by EC. That makes EC the guy that sells the ice to the guy who sells it to the Eskimos. High praise indeed from someone who is not qualified but has conned ASIC by his non compliance and non qualified advice. Maybe I'm a cynic but should he be a free man given the blantant flouting of the law? 
My accountant is s#%t scared to even go near the topic of fin planning as he does not hold the necessary ticket to give advice to the public - and then there is Jelich....


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## stung (25 June 2009)

_What bothers me most about this model of endless greed is that there seemed to have been no end-point.  Did the individuals who engaged in this debt-upon-debt arrangement have any specific target in mind when they would sell out, pay off their loans, and be happy with what they had got?[/QUOTE]_

Speaking of end points Onlooker I make this point. 

After the initial buy-in with Storm I expected maybe two or three added steps over several years. Instead  we were advised at least 5 or 6 times in the first 18 months to add to our margin loan. 

In one of the meetings I asked our advisor "when does this all end? when does the time come when we sit back and say enough?"  Astonishingly he replied that it "never ends"! 

I knew with that reply that I needed to start taking some control over my situation and perhaps  not follow the advisor's strong recommendations to the letter. Alas the market declined  and I  never got my chance to develop a backbone.


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## Solly (25 June 2009)

*"Commonwealth Bank plans to right wrongs of Storm Financial debacle"*

MORE than 2500 clients of the now-collapsed Storm Financial, who made their disastrous investment on the back of Commonwealth Bank margin loans, could be cleared of debt and have their life savings returned within months.

CBA said yesterday it had "done wrong" to many of its customers and had agreed to an "accelerated resolution process" for those granted margin loans with little hope of repaying the money after last year's stockmarket crash.

More by Michael McKenna in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,25686778-36418,00.html


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## Solly (25 June 2009)

*"ASIC goes on defensive as investors unaware of low bar for advisers"*

"Australian Securities & Investment Commission chairman Tony D'Aloisio told The Australian last night that while he was yet to be fully briefed on the criticism of ASIC made by inquiry submissions, he believed the regulator was likely to have acted appropriately at the time."

More by Siobhain Ryan in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,25686728-36418,00.html


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## Solly (25 June 2009)

*"ASIC close to Storm compensation decision"*

"Tentative deadline of August
The corporate regulator plans to make a decision over potential compensation action for Storm Financial investors in the coming months."

More by Kate Kachor in Investor Daily is here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/6784.htm?rdeCOQ=SID-3F579BCE-DE578736


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## Solly (25 June 2009)

*"CBA mediation scheme to settle Storm investor claims"*

"THE COMMONWEALTH BANK has taken the unprecedented step of trying to settle any individual dispute over its involvement with the collapsed financial planner, Storm Financial, through a formal mediation scheme in an effort to avoid years of costly legal action."

More by Danny John in the Sydney Morning Herald here;

http://business.smh.com.au/business/cba-mediation-scheme-to-settle-storm-investor-claims-20090624-cwu8.html


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## Quincy (25 June 2009)

Solly said:


> *"ASIC close to Storm compensation decision"*
> 
> "Tentative deadline of August
> The corporate regulator plans to make a decision over potential compensation action for Storm Financial investors in the coming months."
> ...





As stated in the above referenced article by Solly, Mr. D'Aloisio refers to potential "*compensataion action*". This possible action would be initiated under section 50 powers of the ASIC Act where ASIC fund the action by way of the tax payer. The main criterion for ASIC to declare a section 50 action is that it is considered to be "in the publc interest".

If a section 50 action is declared by ASIC it doesn't mean that compensation is automatically paid to affected investors. It just means that ASIC will use its own nominated legal people and funds to purse the so called "wrong doers".  

ASIC would still have to go through the same process as say eg. Slater & Gordon in pursuing recovery litigation. It is a possibility that ASIC won't be able to recover any funds.

Hopefully for Storm investors, ASIC will declare a section 50 action and be successful in obtaining some compensation.


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## Solly (25 June 2009)

Another two submissions of interest to the
Inquiry into Financial Products and Services in Australia;


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub91.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub92.pdf


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## Solly (25 June 2009)

*"Storm Financial victims score win with Commonwealth Bank"*

"Luke Vogel, who is on the steering committee of the Storm Investors Consumer Action Group, said he was glad a court battle had been avoided but wary about how adequate settlements will be determined."

More here by Anthony Marx in The Courier Mail;

http://www.news.com.au/couriermail/story/0,23739,25684957-3122,00.html


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## Smiley (25 June 2009)

"Luke Vogel, who is on the steering committee of the Storm Investors Consumer Action Group, said he was glad a court battle had been avoided but wary about how adequate settlements will be determined."

Me thinks Luke also had close ties to storm and is actually an-ex storm employee.

Great work Carey Ramm and Slater and Gorden.

The support Carey has given so many stormified clients has helped people weather months of challenging times - his optimism, concern, expertise and behind the scene negotiations on behalf of the stormified is so appreciated . . . .

Now BoQ trolls - your turns to convince those in power to do the right thing.


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## manorleas (25 June 2009)

Andrew O'Brien and Luke Vogel were both employees of Ron Jelich, prior to the busines being sold to Storm, and were both in an "advisory" capacity.   Andrew & Ron went on to be employed by Storm when the business was sold, whereas Luke did not.  Mr Noel O'Brien (who is Andrew's father) is a very very long time friend of Ron's.  I believe a couple of other ex Storm employees were involved in the creation of the SICAG website and initial establishment of the group but I'm not sure about their current level of involvement.  

It is also well known in the industry that quite a few of the ex Storm advisors are now working for In Focus (another financial planning practice), spruiking the Storm message under a different banner.


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## Onlooker (25 June 2009)

Thank you, "Stung", for replying to my question:

QUOTE What bothers me most about this model of endless greed is that there seemed to have been no end-point. Did the individuals who engaged in this debt-upon-debt arrangement have any specific target in mind when they would sell out, pay off their loans, and be happy with what they had got? UNQUOTE

and making this admission:

QUOTE Speaking of end points Onlooker I make this point.   After the initial buy-in with Storm I expected maybe two or three added steps over several years. Instead we were advised at least 5 or 6 times in the first 18 months to add to our margin loan. 

In one of the meetings I asked our advisor "when does this all end? when does the time come when we sit back and say enough?" Astonishingly he replied that it "never ends"! 

I knew with that reply that I needed to start taking some control over my situation and perhaps not follow the advisor's strong recommendations to the letter. Alas the market declined and I never got my chance to develop a backbone.UNQUOTE

So it wasn't just an 'automatic' process!  All those Storm 'victims' decided time and again to go deeper and deeper into the market.  Whether they were talked into it is not so much the point as the fact that it was their decision and their decision only.

Now the Forum seems to evolve entirely about the Banks and what they did or did not do.  Has anybody gone past the victim-mentality and tried to figure out what the situation would have been six months down the track if the Banks had not pulled the pin?  Has anybody bothered to look at the All Ords and figured out that all those Stormers would have lost their pants anyway?

At the nadir of the shake-out in October 2008 the All Ords was around 3300.  It was even lower in March 2009 when it hit 3111 on the 6th of March.  Even now, in June, it is still only around 3800.  Those who suffered the most were the ones who were sucked into the market in the months leading up to May 2008 when the All Ords hit a high of 6033.  In hindsight, it was bad advice to buy in then, and it was shocking advice to do so with borrowed money.  It proves the old adage that the average punter buys near the top and sells near the bottom.

Not only Stormers did this, others did, too, or else the All Ords would never have gone as high as 6033 as it was those fully invested, highly-leveraged - or "stormified" - punters who caused this bubble in the first place.  Those who did buy are now licking their wounds!  Only the Stormers seem to think they are entitled to some sort of redress!   

Why don't they vent their anger and direct their questions to Mr Cassimatis?  I have not seen any demonstrations on the frontlawn of the Cassimatis's mansion!  On what well-reasoned and logically-derived-at professional analysis or stockmarket insight did Mr Cassimatis base his advice to them to add more and more money at the top of the market - AND BORROWED MONEY AT THAT!  And don't forget the bottom-line (I hate that phrase!):  the ultimate responsibility rested with the Stormers!  They signed on the dotted line and didn't have the backbone that "Stung" now regrets not having had to say 'No" and to get off the merry-go-round in time.

None of the Stormers will learn anything from this experience unless they accept responsibility for their own action.  But perhaps they don't want to learn anything.  Maybe all they want to do is wait for the next Messiah to lead you to another 'Promised Land of Plenty."  And right now they seem to be punting on another Messiah, those legal firms who hold out the hope for them that they will get their money back.


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## Onlooker (25 June 2009)

To "Stung" and other Stormers:

It would indeed be interesting to learn more about the modus operandi of Storm Financial in its glory days.  How did they approach you?  What were you told?  Was this a business transaction between equals or more like a "give us your money and we'll do the rest" situation?  What choice of investment strategies were you offered, if any, given your particular circumstances?   Was a financial snapshot taken of your particular circumstances so as to tailor your investments to your needs?  Did you have the risks of gearing (i.e. borrowing money to fund your investments and the possibility of margin calls) explained to you?

Mr Cassimatis obviously earned huge sums of money from this business but, given the number of clients, he couldn't have done it all by myself.  Others must have partaken of the bounty.  What did those other salespeople - sorry, Financial Advisers - earn?  Where are they now?  Can they sleep at night?  I hear that some of them are now involved with the Action Group.  Poachers turned gamekeepers?  Did they do what they preached and and got into the scheme up to their eyeballs?  Did Mr Cassimatis?  How much did any of them lose?


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## Julia (25 June 2009)

Quincy said:


> As stated in the above referenced article by Solly, Mr. D'Aloisio refers to potential "*compensataion action*". This possible action would be initiated under section 50 powers of the ASIC Act where ASIC fund the action by way of the tax payer. The main criterion for ASIC to declare a section 50 action is that it is considered to be "in the publc interest".
> 
> If a section 50 action is declared by ASIC it doesn't mean that compensation is automatically paid to affected investors. It just means that ASIC will use its own nominated legal people and funds to purse the so called "wrong doers".
> 
> ...



So the taxpayer would fund this process.   If there is no money to be found from the Cassimatises (and I'd imagine they will have found a suitable means of , um, disposing of their own funds some long time ago) are you saying if compensation is deemed (by whom?  ASIC?) to be payable, the taxpayer is also going to be up for paying this?

I don't think I'd be exactly ecstatic about my tax dollars  being paid to people who didn't exert personal responsibility over what happened to their money.  No one is going to compensate most of us for the wrong decisions we make.

Onlooker, you make valid points.  If you read through this whole thread (a considerable undertaking by this point) you'll see that we've been through all this and asked all your questions re risk profile etc etc before.
Few answers were offered.


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## Onlooker (25 June 2009)

People travel overseas and stuff up.  Then they cry, "The Government must help us!"  Please note:  we are the government; we are to pay for their follies.

People get caught out without adequate insurance.  Then they cry, "The Government must help us!"  Please note:  we are the government; we are to pay for their stupidity.

People engage in harmful acivities (smoking, drug-taking, ec.)  Then they cry, "The Government must help us!"  Please note:  we are the government; we can't live their lives for them.

People make high-risk investments.  Then they cry ..... need I go on?

I don't want a nanny-State!  I don't want to be anybody's nanny!

Please use MY tax-dollars for building better roads, better schools, better hospitals!  And to give a modicum of support to those who have truly become dependent on the State - which, I imagine, means that we are already paying for those ex-Stormers who are now on a support pension.


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## Kez180 (25 June 2009)

Julia said:


> So the taxpayer would fund this process.   If there is no money to be found from the Cassimatises (and I'd imagine they will have found a suitable means of , um, disposing of their own funds some long time ago) are you saying if compensation is deemed (by whom?  ASIC?) to be payable, the taxpayer is also going to be up for paying this?
> 
> I don't think I'd be exactly ecstatic about my tax dollars  being paid to people who didn't exert personal responsibility over what happened to their money.  No one is going to compensate most of us for the wrong decisions we make.
> 
> ...




The taxpayers would fund the litigation not the compensation...

I assume that if ASIC was to sue Storm it would be as a sort of token kick to the head...

If they go ahead it will be after the banks simply because they are solvent and could pay compensation if ordered to.


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## Farencue (25 June 2009)

This thread has taken a turn for the better, now we are hearing a bit more about what really went on and who was involved in this scam instead of all the boohoo stories from people who "only wanted a comfortable life".  
We all want a comfortable life but some of us dont believe there is such a thing as an easy or free ride.  

SICAG was a stinking fish from the start - an old boys club determined to take down the banks because they thought that would take the focus off themselves and the fact they were nothing but greedy and were enticed by members of their own family as well as their "associates" and "close friends".  I guess it is a bit hard to explain to your close friends that you essentially involved them in a scam.  

And Manorleas:  Thankyou very much for this information:
*"It is also well known in the industry that quite a few of the ex Storm advisors are now working for In Focus (another financial planning practice), spruiking the Storm message under a different banner".*

Take heed you Stormers, dont get caught out again!  Stung and Onlooker, thankyou for your contribution here.


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## Onlooker (25 June 2009)

Yes, "Julia", quite a thread and over a hundred pages already!  It seems to confirm one of Schopenhauer's sayings:

"There are few ways by which you can make more certain of putting people into a good humour than by telling them of some trouble that has recently befallen you, or by disclosing some personal weakness of yours."

And what greater weakness is there than greed?  

The sharemarket mirrors the sort of society we live in.  And for each one of us, the way we operate in this market is a very good indicator of the sort of person we are:  avaricious or cautious, stupid or disciplined.  

It's a game!  Would you have bet everything you had on a game?

In quite recent times, we have had the Bernie Madoff and the Allan Stanford (sorry, SIR Allan Stanford!) scandals in the USA; we have our own Financial Storm here.  In times past, we have had the Tulip Boom, the South Sea Bubble and hundreds more ... and there will be many more in the future because you cannot legislate against greed!  And nor can, or should, you help those who engage in it.  

As I wrote in a previous post:  

"Had things gone their way, had the market gone UP by 50%, they would no doubt have rubbed their hands with glee and regarded the rest of us, who conducted their financial affairs with a little more caution, as complete simpletons. However, now that the party is over for them, they're desperately trying to portrait themselves as innocents who have been had. As my Canadian friend Chris put is rather succinctly, *"Playing dumb is not an option!"* They were all playing "double-or-nothing" - and got it, one way or the other!"


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## Onlooker (25 June 2009)

oh, and I forgot, here's a Public Appeal to assist Mr Cassimatis and all his super-charged salespeople who are also suffering:

http://www.youtube.com/watch?v=qDC0qcf0kzE&feature=player_embedded

(Who said you couldn't smile even with tears in your eyes?


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## Onlooker (25 June 2009)

The same people who gave us the lovely word "Schadenfreude", also have the very fitting saying, "Geteiltes Leid ist halbes Leid", meaning that a loss shared is only half a loss.

So allow me to tell you of my experience as we went through the 2008 shake-out:

The high-point was the 1st of July 2007 when the All Ords stood at 6853.  We were all financial geniuses who had just found the secret of everlasting prosperity!

The euphoria lasted until December 2007 by which time the market had ever-so-slowly declined by about 10%.  

By March 2008 it had declined 20% in slow, small, incremental steps.  Nothing to worry about as we were still flying high.  In fact, all throughout the next three months things improved slightly but then the rot set in in July 2008.

By October 2008 I was down 45% from the all-time high in July 2007.

By November 2008 I was 55% down!

The new year brought the tiniest of recoveries, and as recently as March and April I was still 30% to 40% down.

As of today, when the All Ords is at 3802, I am still 29% off my best and all indications are that the recovery will be long and slow.  The All Ords may be back at 4000 by Christmas!

During all this time I remained pretty much fully invested.  It was all my own money and I did not need any of it as the dividend income from the underlying shares gave me an adequate income (of course, it took a toll on my nerves but that's another story for another time 

THAT is the difference between investing and gambling!
THAT is the difference between me and Storm!

Had I been 'stormified' and in the market with other people's money, I would've lost my pants, too, as those other people would've wanted their money back - and who can blame them?  

I'm still down many hundreds of thousands of dollars!  Money I regret not having, not because I want it for myself but for what it could've done for some of the charities I support in India and in Bali.  

I can't sue anybody for my own folly!  Perhaps I should've sued my parents for putting such a dumb bastard into the world but, alas, they're already both dead.


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## Farencue (25 June 2009)

Julia, I thought you might be interested to know that not all publications are reporting that the CBA is compensating the Stormers.
This article calls it a dispute resolution process, which of course is not the same thing as being compensated.  For some reason I cant post the link, so have copied the article from www.moneymanagement.com.au

*CBA in mediation with Storm clients
25 June 2009 | by Benjamin Levy 

The Commonwealth Bank (CBA) is trying to avoid a lengthy litigation process with former clients of Storm Financial by instituting a dispute resolution process. The bank is working with Slater and Gordon, which is representing many former Storm clients, to institute the process. 

A statement by Slater and Gordon affirmed that the CBA would review clients' circumstances on a case-by-case basis, including full disclosure of documents relevant to each client. An initial group of Slater and Gordon clients have been selected at random to take part in the process. 

Former High Court Justice Ian Callinan will work as an independent arbitrator if CBA and former clients cannot reach an agreement.

The CBA said any client who is dissatisfied with the dispute resolution process is free to pursue other legal outcomes, according to a statement released by the bank.

Slater and Gordon practice group leader Damian Scattini said there had been no change in previous statements from the Bank of Queensland, but the door was still open for them. Slater and Gordon has not called on Macquarie Bank for comment.

The Bank of Queensland is believed to have threatened to sue former Storm clients for misrepresenting their income, but the head of corporate affairs Caroline Dunworth denied the allegation. BOQ has said it is not reviewing its lending practices in relation to former Storm clients.*

Manorleas, again a problem with linking but I have just read an article in the Redcliffe & Bayside Herald dated 11th February 2009 where the Redcliffe Leagues Club denied links with Storm.

Redcliffe Leagues Club denies Storm connection 
11 Feb 09 @ 01:42pm by Paul Lancaster
KIPPA-RING: 
THE Redcliffe Leagues Club has hit back at ``ugly rumours’’ it is involved with the collapsed financial adviser Storm Financial Group. 
General manager Tony Murphy dismissed ``bad gossip’’ that the club had links to Storm Financial, through club director Bob Jones and other Storm agents. 
``The club is not broke, is not closing its doors and does not have any investments with Storm,’’ Mr Murphy said. 
``Under our charter we have the power to invest money back into the club or with community groups.’’ 
He said there had been no board discussion about the Storm Financial collapse. 
``These guys worked with Storm and Bob Jones on the club board, but that’s all,’’ he said. ``It is OK to invest in shares but the club has no links or investments with Storm Financial.’’ 
Mr Murphy said the club was looking forward to the Dolphins` football season launch on February 21. 
Some Storm Financial representatives were thrown a lifeline by financial planning company Infocus Money Management. Infocus, a Sunshine Coast-based firm with 42 offices Australia-wide, has employed Redcliffe-based Storm advisers and has given advice to former Storm clients. 
Infocus managing director Darren Steinhardt said the financial planning industry needed to help rather than ``sit back and watch the fallout from Storm’s demise’’. 
One of Storm Financial Redcliffe’s high profile directors, Bob Jones, has taken a job as a financial planner with Infocus . 
Mr Steinhardt said the decision to employ Mr Jones, along with two other ex-Storm advisers, and Dolphins greats Wally Fullerton-Smith and Trevor Benson, was not taken lightly. 
``It’s commercially very risky considering the negative publicity surrounding Storm Financial but the risk of not doing anything is even greater,’’ Mr Steinhardt said. 
Mr Jones was unavailable for comment. 

Interestingly, the previous director of In Focus who I wont name here (but I did pay to find out his name so I do have the facts) has a very bad name in a certain part of the Northern Territory and North Queensland.  He has passed himself off as an accountant when he is in fact not one.  
His brother who is a qualified accountant is a very dodgy character who caused extreme distress to me and others in the area of finances.

Ah, gotta love a small world.


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## Judd (25 June 2009)

The Bank of Queensland has virtually told Slater & Gordon and Stormers to rack off.

See today's BOQ announcement on ASX web-site.


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## Farencue (25 June 2009)

Thanks onlooker for outlining your situation.  All the best to you.


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## Julia (25 June 2009)

Onlooker said:


> The same people who gave us the lovely word "Schadenfreude", also have the very fitting saying, "Geteiltes Leid ist halbes Leid", meaning that a loss shared is only half a loss.
> 
> So allow me to tell you of my experience as we went through the 2008 shake-out:
> 
> ...



Onlooker, you've outlined the situation and philosophy of many of us who've been posting on this thread, whether we've held on through the downturn, or cashed out when the market fell.   Whichever, we took responsibility and made a decision, the results of which we accept today.

This is why any notion of our taxes paying 'compensation' to Stormers is less than welcome.   

Keiran, thank you for info that the taxpayer wouldn't actually be doing this.
I hope you're right.





Farencue said:


> Julia, I thought you might be interested to know that not all publications are reporting that the CBA is compensating the Stormers.
> This article calls it a dispute resolution process, which of course is not the same thing as being compensated.  For some reason I cant post the link, so have copied the article from www.moneymanagement.com.au



Farencue, thanks for that.   I might be quite wrong, but I had the impression that the process referred to in Quincy's earlier post wasn't to do with the CBA but rather to do with a separate consideration by ASIC.


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## Onlooker (25 June 2009)

Thanks for your best wishes, Farencue, but I'm okay.  "What does not kill me, makes me stronger." (Friedrich Nietzsche, Twilight of the Idols, 1888)

My point in setting out my own position was to illustrate to all those ex-Stormers that, had they done without gearing and worked entirely with their own money (or just the borrowed money on their houses which wasn't subject to margin calls), they could have sat out the Financial Storm (if you will pardon the pun), notched up paper losses of about 50% at its worst moments, and perhaps be no more than 30% down today.  Having 70% left is better than having less than nothing, don't you think?

Without preempting anything, my guess is that this whole thing will turn on how this gearing-up-to-the-gills business was presented and explained to the punters.

On a lighter note (and please forgive me my levity), they may discover having been bullied at school:

QUOTE
A New South Wales man has successfully sued the state's Education Department for the bullying he suffered as a schoolboy in the 1990s. David Gregory, 30, from Mollymook, south of Sydney, suffers obsessive compulsive disorder and agoraphobia and has blamed his condition on bullying he was subject to while at the Farrer Agricultural High School in Tamworth. He was seeking more than $2 million in lost earnings, but Justice Elizabeth Fullerton has awarded him almost $470,000 for losses connected to his inability to work. The court heard Mr Gregory was subjected to six years of bullying at the school in the NSW's north-west. He was called a "poof" and a "Nazi" and he was hit and publicly humiliated. He alleged that teachers had done nothing to deal with complaints and had not intervened to stop him being socially ostracised. Mr Gregory will also be paid for future medical costs relating to his mental illnesses, but the amount of damages has not been set.
UNQUOTE

Isn't it a funny world we live in?  By the way, this may be my last post for quite a while as Im off to Europe to sue my old school


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## Quincy (25 June 2009)

Kez180 said:


> The taxpayers would fund the litigation not the compensation...
> 
> I assume that if ASIC was to sue Storm it would be as a sort of token kick to the head...




Yes, that's it. 

Also, ASIC, as part of their process, will be continuing to look at the circumstances surrounding the Storm collapse with the possible outcome being the pursuit of Storm / Storm directors (under its various powers as a regulator) to enforce compliance with the Corporations Act. They can seek from a court, declarations of contravention and orders against various parties which may result in restricting the "wrong-doer's" business activities for a period of time or issuing fines or applying for a custodial sentence.

These potential courses of action (and I'm not saying that they will come to pass) may not result in any financial compensation for Storm investors as such but ASIC might consider itself justified in commencing such proceedings as its objectives include the deterrence of corporate misconduct.


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## manorleas (25 June 2009)

Farencue,  I believe that a number of directors and staff of the Redcliffe Leagues Club were Storm clients on an individual level, however the club itself was not involved.

“*Some Storm Financial representatives were thrown a lifeline by financial planning company Infocus Money Management. Infocus, a Sunshine Coast-based firm with 42 offices Australia-wide, has employed Redcliffe-based Storm advisers and has given advice to former Storm clients. “*

This should read, the advisers have been contacting their old Storm clients to get them to change their adviser to In Focus.  In this way, the trail commission on thousands of life insurance and superannuation policies (which weren’t affected by the margin loan debacle) will now be paid to In Focus and then on to the advisers.  When Storm went belly up the trail most probably wasn’t being paid to anyone.  I hope the purchasers of the Storm book got a good price – it's a diminishing source of revenue.

*``It’s commercially very risky considering the negative publicity surrounding Storm Financial but the risk of not doing anything is even greater,’’ Mr Steinhardt said.*

If these advisers eventually get banned from practicing, In Focus has increased its trail book with very little risk to themselves.


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## Onlooker (25 June 2009)

And that, "Quincy" (do you still live in your houseboat? , should be ASIC's main aim:  to deter would-be offenders!  With criminality in these cases being so difficult to prove, the few who do get caught ought to be dealt with most severely (cutting off their goolies comes to mind).

Does anyone know how difficult it is to obtain a Financial Planner's license?  Is it just another one of those multiple-question tests?  I mean, there ought to be several different grades of license which would limit license-holders to specific values.  After all, being the Master of the Universe over a BILLION dollars is quite a different responsibility to being in charge of a mere MILLION.

Road users are required to undergo different tests and hold different licenses depending on the type of vehicle they drive (motorbike, car, truck, bus, commercial use, etc.)


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## Big Max (25 June 2009)

Pindibog said:


> Did anyone listen to the first of the public hearings into the collapse of Storm , Opes Prime and others as ASIC appeared? I missed it.




Yes, I listened to the hearings. Nothing sensational. Most of the questions relating to Storm were fended off by D'Aloisio on the basis on ASIC's on-going investigation into Storm. He did say his 30 agents were poring over 9 million pages of Storm-related documents!


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## bunyip (25 June 2009)

manorleas said:


> Andrew O'Brien and Luke Vogel were both employees of Ron Jelich, prior to the busines being sold to Storm, and were both in an "advisory" capacity.   Andrew & Ron went on to be employed by Storm when the business was sold, whereas Luke did not.  Mr Noel O'Brien (who is Andrew's father) is a very very long time friend of Ron's.  I believe a couple of other ex Storm employees were involved in the creation of the SICAG website and initial establishment of the group but I'm not sure about their current level of involvement.
> 
> It is also well known in the industry that quite a few of the ex Storm advisors are now working for In Focus (another financial planning practice), spruiking the Storm message under a different banner.




If that's the case then it's no wonder SCIAG are putting out such a distorted version of events by blaming the banks....seems like it's all about directing the heat away from mates and relatives who are former employees of the failed company!


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## Onlooker (25 June 2009)

If there is any money to be recovered, it would be from Mr Cassimatis (and his salespeople?)  ASIC already recovered from Mr Cassimatis the $2 MILLION he paid himself just days before the company folded.

The SEC in the USA promptly froze all the assets of SIR Allan Stanford.  In case you're not familiar with this very recent event, here it is:

QUOTE
The Financial Storm may even pale into insignificance when compared to billionaire Allen Stanford (sorry, Sir Allen, as he now sports the clipped mustache and Saville Row style of English aristocracy following a 2006 knighthood by the Caribbean island of Antigua; he also claimed to be related to the founder of California's Stanford University until the institution filed a trademark infringement suit) who is alleged to have bilked investors of $12.5 BILLION. Depositors flogged to his Bank of Antigua despite, in the hierarchy of offshore banking havens, Antigua being one of the world's least-regulated and least-transparent. As David Marchant, an offshore banking analyst based in Miami, comments, "Antigua was the wild west and Stanford was the chief cowboy. In their greedy desire to avoid paying a 15 to 20 percent tax, they put their money with an offshore crook who ultimately taxed them 100 percent." A 50-page indictment showed the scam dated back to September 1999 and continued until about February 17 this year. In Antigua they're already calling him Sir Allen SCAM-ford!
UNQUOTE

I am surprised how localised and little-reported this Storm Financial mess is, at least down here in the Deep South.  And nowhere is there a thorough investigative exposÃ© of the man himself!  Is investigative journalism dead or has it to do with our onerous libel and privacy laws?

I was caught out years ago by someone who, despite quite obviously bilking people, won his case on a legal technicality.  He walked away with $85,000, leaving me shaking my head and asking my lawyer if there is no register that tracked such people as he had quite obviously done similar things before and would do them again.  "Sorry," said my lawyer, "our privacy laws prevent us from doing this."  Charles Dickens was right. "The law is an ass."


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## Ironhalo (25 June 2009)

Hi guys, long time reader of this thread (back on about page 20-30 odd), but due to having a filthy hotmail account, I wasn't able to comment. Alas, all is good now.

Just wanted to throw some insight into this debacle from someone who probably should have known better, but hindsight is a wonderful thing.

Solly posted what was my submission into the Parliamentary Inquiry earlier, I won't link it again, but you can probably piece together which one it was noting my hatred of a certain Colonial Margin Lending....

Emotional rhetoric aside, I am still bloody livid over the whole affair. Both with Storm and the CBA/Colonial. Most of the whole story in terms of getting involved with Storm is in my submission, but there were a few things that may prove interesting little asides:

1. Risk management. Risk was discussed at length, and the plethora of paperwork we were given outlined that investing in 'shares was an inherently risky activity' quite plainly. So why we now have people bleating about not being a little nervous when they had 1.2+ million dollar margin loans is beyond me. We had to view and sign EVERY page of the Storm documentation which explained the entire process clearly. In my anger post-collapse I double checked it to see if I had had the wool pulled over my eyes....alas, I couldn't really fault it. We had signed it saying we understood it. We were given the option of taking it to an accountant/lawyer before signing. We even took it all home and digested it before returning it. 

For people to say 'oh I was tricked into it! Give me my financial position pre-Storm back' is laughable. Don't get me wrong, I wouldn't urinate on EC if he was on fire in the street, but people have themselves to blame for their level of debt.

2. Colonial/CBA. My biggest bugbear with these clowns is that they happily lent us what I consider a modest increase based on our assets ($27 000) one week for the purposes of increasing our Index Fund, but then sold it all down ONE and FOUR weeks later, when we weren't even in Margin Call. No matter your position, the whole fund got sold at basement prices. Who the hell 'bought' these shares? I had NO way of checking my LVR and received NO bank statements from Colonial for the months of Oct-Nov. People say 'oh well you should have known' but let's get one thing clear, I PAID a licensed body to look after my affairs and was paying monthly repayments to an establishment that prides itself on 'having a personal relationship with their customers'. ONE phonecall would have saved my investment and I would have either shifted to cash (as I had previously directed them to), or injected more into it. Blaming people for going 120% into Margin Call is like paying a doctor to operate on you, but then cutting yourself open to 'check' his/her work. I accept the losses I made, and I have learned some very good lessons.

3. The 'Bank/Storm' Relationship. A few little interesting things have come up that we remember since we started going in there. I remember that the Storm staff had just gotten back from Europe and our advisor was telling us about how much fun him and his g/f had. I asked 'how much was it?' and his reply was 'apparently the banks picked up a lot of the tab mate, no idea why. I'm not going to complain, we'll have to get you guys along next year!' 

While I don't feel particularly sorry for my advisor (he was about late-20's, same age as us and had just started at Storm) I asked him in Dec 08 what his feelings were regarding his future job prospects with Storm. He told me, 'mate, I've been told that we are all fine and that there is enough money to get us through this downturn. I'm abotu to go overseas with the g/f for Christmas and I can tell you now I wouldn't be leaving without having a job to come back to.' Poor bastard, he probably found out overseas that he was unemployed with no benefits/salary paid. Oh well, his price for his involvement in Storm is a now no-doubt toxic resume.

4. SICAG. Pretty dodgy if you ask me, and some good points raised by previous posters. The whole 'it was the evil banks, EC/JC are innocent!' reeks of sycophants dining at a certain table in Belmont every other week. My family in Brisbane (who recommended Storm to me) went through O'Brien/Jelich and Co. and they dropped their clients like a hot potato when it all went down. 

My brother realised there were warning signs with the Redcliffe branch of Storm (and how cavalier they were getting) when a certain house on the Redcliffe shoreline went up for sale and my brother's adviser was telling him how Ron Jelich was going to buy this 'edifice' for the new Brisbane Storm HQ. 
I think the house is the epitome of architectual evil; a huge yellow monstrosity that looks like it was designed by a kindergarden student, but it sold a few years ago via auction for ~$2.6 million. Apparently O'Brien told my brother that Jelich rang the auctioneer (realising he had missed the auction) and said 'is the buyer still there?' to which it was responded 'yes'. The story goes that Jelich told the buyer to wait there, walked up to him and offered him another $400-600k on top of the price he just bought it at. The final scary nail in the coffin was that the hose wasn't zoned half commercial, so it proved useless to Storm. Alas, this was pretty much a sign of their attitude to their perceived unending supply of money in the end.

I even heard that one Storm employee was using the infamous company jet for flying lessons at some point....but I can't back that up in concrete.

Anyway, someone I know has just been offered a very large sum (six figures) from the CBA to make this whole thing go away. It doesn't get them back where they were (and neither should it noting again, the RISK they willingly took) but it has allowed them to retire with peace of mind. So for thsoe saying the banks aren't at fault, clearly the banks lawyers don't seem to think so....

If you have any more questions, let me know....I'm happy to rain on Storm's parade as a disgruntled customer.


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## awg (25 June 2009)

I am a CBA shareholder, so I am annoyed they have stuffed things such that they now have a liability.

IMHO, if their is natural justice, where customers went over 100% margin, that is the fault of Storm/CGI/CBA etc, not the client, and as Storm is no longer around to be liable, that means the lender should be, if not legally, then morally.

Not sure what happened re Opus Prime/ ANZ but I think they settled many on that basis.

As well, if the bank allowed dodgy loans to be processed, and it can be shown that bank employees were negligent or culpable, well that could mean that the home mortgage may be reduced, or even wiped.

Which would leave the client minus 100% of their original investment, but no margin loan and a house still.

Dont know how much that would cost, but thats how I would look at settling it if I had the magic wand.

More likely they will probably p!ss away a portion of that amount with legal fees and inquiry costs


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## Onlooker (25 June 2009)

"Ironhalo", you seem to be well on your way to a full recovery from this disaster!  And the lesson learnt will be invaluable in the future!

The down-selling of assets by Colonial seems reminiscent of the panicky sell-off by the ANZ Bank during the Opes-Prime disaster.  These margin-call procedures don't appear to be anything like an online computer-automated stop-loss order.  Instead, they required that the lender first contact the borrowers to give them the option to top up with extra funds before pulling the trigger on the underlying security. Given the number of clients and the limited number of bank staff, it is difficult to see how these financial institutions could have gone through the whole process in a timely and orderly fashion.  

As for your frank and outspoken assessment of ex-Stormers' bleating, I invite you to watch again the video clip at http://www.youtube.com/watch?v=4KLUKsI-4Xs&feature=player_embedded and the lady's interjection' "We don't understand what we were doing."  That same person would've probably jumped up and down at Woolies for having been overcharged on a bag of potato chips.


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## Farencue (25 June 2009)

Ironhalo, thanks so much for posting I hope you continue to do so.
Im glad your friend has some peace of mind.

My question is who did you sit down and go through the risk assessment with?  The lender or Storm?
thanks!


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## Onlooker (25 June 2009)

Well, "awg", we all will pay for this through higher bank charges.  The outright winners, as so often, are the lawyers!  Didn't I read somewhere that their fee is 30% of each client's settlement?  Would that be in addition to the legal fees the CBA has since offered to pay?

I note that the Bank of Queensland said that they had no margin loans with Storm clients and that all their loans were mortgage-backed housing loans.


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## Ironhalo (25 June 2009)

Hey Onlooker, Farencue et al, good to be here.

As for the risk assessment, it was done via Storm. Now that you say it, my g/f just reminded me that one line was used over and over again, 'if Storm were to collapse tomorrow, your index fund remains in your name and would not be impacted....our only money made is via upfront fees and for step installments that you may make through us, so there is no risk you will lose your fund.'

We were working with an ongoing margin loan (which we paid Storm ~$3k in fees to set up and maintain); imagine our chagrin when I found that out of the $1000 a month we were putting into the scheme via our own payments and the regular margin increases by Colonial, Storm was taking 6.6% ($66) a month for doing 2/5ths of nothing. I rang my adviser and got this changed instantly, as why would we have paid upfront fees only to pay extra each month?

Mate, while I feel sorry for these people that are now destitute, surely the alarm bells must have been ringing when they were being asked to take away paperwork outlining $1.2million margin loans when they were on $40k incomes or even worse, pensions. I am of the opinion that these people saw the pretty numbers, thought they were 'playing with the big boys' and were preparing to spend their twilight years clinking champagne glasses together on the balcony of their Gold Coast apartment in some form of parodied cliche retirement advertisement.

The person who I mentioned that got offered the big bikkies by CBA wasn't leveraged to this amount (and there is no way in hell I would have let them get to that point, such was my advice), but the best they still had to look forward to was starting a 25 year mortgage at the age of 55 from scratch. Needless to say, they are in a LOT better position now, and with their accumulated super, family and friends, and ongoing employment, they are well placed to have a great retirement.

As for me, even though my loss was comparatively small, the contempt I was treated with by Colonial would make me all too happy to take them to court for their incompetence, even if the result was out of a completely avoidable $11k loss was that I paid $10,999 in legal fees and walked away with $1. At least the bastards would still be forced to pay for their stupidity.

As for the video, boo freaking hoo. 'We didn't know what we were doing!!!', then why did you happily accept the profits and SIGN the multiple copies of forms you were given by Storm! For all their mistakes/incompetence in the collapse, their paperwork was legit and transparent. No excuses.

'We had 2 margin loans of 2.5million dollars!'..........WTF!?!?!?!?


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## Onlooker (25 June 2009)

"Ironhalo", my sentiment entirely!  I couldn't have put it better myself:  WTF!!!  

Anyway, anyone who gives money to a financial adviser with a name like Storm should have it taken off them by a responsible adult before they lose the lot.  I think, in hindsight you would agree with that, wouldn't you?


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## Ironhalo (25 June 2009)

The name always struck me as a weird choice, despite their performance.

I think I might start a finance company and name it 'Trainwreck' with the slogan 'the light at the end of the tunnel, is an oncoming train!'


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## Onlooker (25 June 2009)

Many, many years ago when I worked and lived in Samoa, I encountered an amazing piece of 'local justice':  women with pots and sticks in their hands would surround a wrong-doer's house and bang those sticks and pots together all day long and throughout the night until the wrong-doer had made the necessary reparations.

Now I don't want to put ideas into your heads but ...  

Nice one, "Ironhalo"; why not start a sister company with the name Tsunami Traders ? (although I heard that Mr Cassimatis already tried to register that one as soon as he gets his new license


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## Farencue (25 June 2009)

Thanks Ironhalo.
People are funny creatures, I imagine because there was no pile of cash that the stormers physically handed over to Storm it was kinda like Monopoly money that would magically transform into riches. Their riches. Probably didnt even think of the loss side of the ledger.  I bet if they had to hand over physical cash they would have thought twice about it!

Have you ever known anyone that spends like crazy on credit cards without a clue how they will ever repay?  Maybe that sort of mentality.


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## Ironhalo (25 June 2009)

That's the thing, I did Economics at uni, I'm doing an MBA (or Mediocre But Arrogant as I like to call it) so I'm not an idiot when it comes to understanding finances.

The whole Storm involvement was one of convenience, I pay them a fee, and I don't really have to stress about monitoring LVR's etc while I was at sea saving valiantly saving our shorelines from evil Indo fishermen and illegal immigrants... 

I should have known better, and now I do. Lesson learned. The thing is though, is that when Storm went ****-up, I didn't care that I now had to take an active interest in my index fund, I was more angry that my upfront fees to Storm were now rendered null and void. 

What really made me apoplectic with rage was watching my perfectly healthy and managed fund sold from under me with no consultation in the name of panic and incompetence. How can a non-risky and well serviced loan taken out two weeks prior suddenly go into Margin Call? I even placed $5000 of my own money as an extra payment on the $27 000 increase to the margin loan so I wouldn't have to worry about it for some time. The LVR was fine, and under no threat of margin call, even at the near-bottom of the market. Hence why I bought extra.

Colonial will pay. And I'll happily laugh the day EC is booted out of Casa Para'diso in Belmont and is forced to offer 'hand shandies' for spare change to passing cars in the Valley.


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## Farencue (25 June 2009)

Based on what you have said Ironhalo I will be watching Colonial with interest.
The fishermen are another story, I worked at a hospital in the Northern Territory that overnight became a medical checkpoint for those that were detained before they were flown at taxpayer expense to Darwin for "processing".
But I digress, thanks again for the info.


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## Onlooker (25 June 2009)

A fitting summing-up:  http://www.youtube.com/watch?v=vrNCncdkC5Q&feature=related


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## Quincy (25 June 2009)

Here's an article that came out today : - 

*Bank of Queensland defends connection with Storm Financial clients*


Bank of Queensland Ltd (BoQ) says there is no evidence of dishonest practices by the bank in connection with Storm Financial clients. 

BoQ sought on Thursday to clarify its position given what it said was "significant misinformation" in the media about its dealings with Storm Financial and Storm customer accounts. 

Based on "the bank's knowledge and enquiries to date", it said, "there is no evidence of improper or dishonest practices or conduct by the bank in connection with Storm clients". 

BoQ said in a statement to the Australian stock exchange that there also was "no evidence that the bank has engaged in any misleading and deceptive conduct or unconscionable conduct in relation to its lending to Storm clients". 


More here :  http://www.businessspectator.com.au...Queensland-caught-in-Storm-TC4PL?OpenDocument

AAP  - 12:44 PM, 25 Jun 2009


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## carey ramm (25 June 2009)

I have heard some whispers that Bank Of Queensland maybe changing their position from that in their press release they put out today - maybe the PR spin doctors arent running BOQ any more.

So for all those BOQ storm victims fingers crossed for some welcome news.... I for one will be reading the friday edition of the Financial Review !!!!


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## Solly (25 June 2009)

Another two submissions of interest to the
Inquiry into Financial Products and Services in Australia.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub96.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub100.pdf


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## Solly (25 June 2009)

*"More good news for Storm Financial investors"*

"It is good news for hundreds of Peninsula-based Storm investors, including Steve Hart who stated on television that he had lost hundreds of thousands of dollars. 
But others like Clontarf retirees David and Isabel Dowling ``lost everything’’ and were forced to sell their family homes to repay their debts. 
Luke Vogel, a former Storm Financial adviser, and his wife Niki, of Scarborough, said they had lost $400,000 since the Commonwealth Bank (CBA) sold their shares.."

More by Paul Lancaster in the Redcliffe and Bayside Herald;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/more-good-news-for-storm-financial-investors/


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## Onlooker (25 June 2009)

"Solly", some of those submissions appear like clutching at straws.  Mr & Mrs Clare's call their loan application "false" but they do not say who declared those "false" income figures.  Are they suggesting that they signed a blank application form and allowed some other person to fill in the blanks afterwards?  

While, with some difficulty, I can feel some sympathy for some of those old and penniless pensioners who tried to better their lot, I fail to see why Mr & Mrs Clare, close to retirement age and with a $1.35 million home and an annual income of approx. $65,000, would want to enter into a high-risk poker-game to make even more money?

They take issue with the "falsely" declared annual income of $142,111 by writing, "If we did [have such an income], we certainly would not be borrowing money to make more."   Why, was $65,000 a year not enough?

At the time they applied for two CBA margin loans totalling $850,000, they already had an NBA margin loan of an unspecified sum on which they paid between $7,500 and $11,000 a month in interest.  That would suggest that the NBA margin loan was around $1 million.  What madness made them want to load up with another $850,000 in debt ?  If that is not greed, I don't know what is!


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## darkside (25 June 2009)

Onlooker said:


> "Solly", some of those submissions appear like clutching at straws.  Mr & Mrs Clare's call their loan application "false" but they do not say who declared those "false" income figures.  Are they suggesting that they signed a blank application form and allowed some other person to fill in the blanks afterwards?
> 
> While, with some difficulty, I can feel some sympathy for some of those old and penniless pensioners who tried to better their lot, I fail to see why Mr & Mrs Clare, close to retirement age and with a $1.35 million home and an annual income of approx. $65,000, would want to enter into a high-risk poker-game to make even more money?
> 
> ...




Onlooker , your a very hard marker! a lot of these people were not just influenced by greed , but by the very "Storm Model" that introduced "fear" as a motivator, i went to one of their "over the top" hyped up seminars, it was a bit like going to see some sort of evangelist do his thing , and they preyed on the people's fear of , no pension in the future, becoming a burden on their family , being cast out with no hope for a comfy retirement, then came the clincher , invest with us and all your cares will be gone. Unfortunately a lot in the room fell for it, i suppose it's a bit like time share selling , only way more expensive and disgusting.


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## Onlooker (25 June 2009)

But that's my very point, "darkside":  how could that kind of "angst" exist with people in that bracket of wealth and income?  As stated, I have sympathy with those less fortunate who faced a bleak retirement, but owners of million-dollar homes with above-average incomes from investments?  That's where greed comes in!  And there is nothing wrong with greed _per se_ which is a powerful driving force in our economy and all our lives but we owe it to ourselves and to our families to control it so that it doesn't lead us down the path of this debt-laden madness!  There is no law against hype just as there is no law against gullibility and neither are the two an excuse before the law.  In their heart of hearts, these Stromers know they have been stupid - utterly stupid! - but being the gamblers they are, they have one more throw of the dice to see if they can get something back.  Good luck to them!


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## darkside (25 June 2009)

Ok , i think the point you are trying to make , is when something bad happens to us , we need someone to blame, unfortunately that is a scenario thats played out everywhere in life every day, not just in this forum ,a few of them have put their "hands up" and taken some responsibility , but the majority have blamed the banks , with one or two baming EC and his woefull business acumen.


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## Onlooker (25 June 2009)

It's a very normal response to try and find the fault elsewhere.  This denial is one of the steps in the process of finding peace within oneself.  You mentioned that you attended one of those 'stormy' seminars.  How did you stop yourself from being sucked in?

As for the Banks, I am no apologist for them but they will have to draw the line somewhere.  As for Mr Cassimatis and his troupe of salespeople, words fail me!  Let's hope the old saying, 'what goes around, comes around', comes true for them!


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## darkside (25 June 2009)

Onlooker said:


> It's a very normal response to try and find the fault elsewhere.  This denial is one of the steps in the process of finding peace within oneself.  You mentioned that you attended one of those 'stormy' seminars.  How did you stop yourself from being sucked in?
> 
> As for the Banks, I am no apologist for them but they will have to draw the line somewhere.  As for Mr Cassimatis and his troupe of salespeople, words fail me!  Let's hope the old saying, 'what goes around, comes around', comes true for them!




How did i stop myself from being sucked in , you know the deal " if it looks to good to be true" well maybe it is, they offered me a $100 000 a year on top of my income for doing nothing , even in my world , there is still no such thing as a "Free Lunch"


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## Onlooker (25 June 2009)

There you are!  You came up with the right answer!  And it wasn't rocket science, was it?

Now here's a little twist for all those Bank-haters:  why not demand the 7% commission back from Mr Cassimatis?  Every $100,000 you borrowed from the Bank and ploughed into the fickle sharemarket, put another $7,000 into Mr Cassimatis's pocket (and that's not counting "kick-back" and trailing commisions!)


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## Onlooker (25 June 2009)

... and now it's time for my nightcap, Late Night Live on ABC Radio, and bedtime.  I will sleep well as the only money I have to worry about is my own  

I started with nothing and still have most of it!


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## Julia (25 June 2009)

Solly said:


> Another two submissions of interest to the
> Inquiry into Financial Products and Services in Australia.



These seem to take forever to download.  I read the first one and gave up on the second.   



Onlooker said:


> "Solly", some of those submissions appear like clutching at straws.  Mr & Mrs Clare's call their loan application "false" but they do not say who declared those "false" income figures.  Are they suggesting that they signed a blank application form and allowed some other person to fill in the blanks afterwards?



Just exactly this has previously been described in the thread.



> While, with some difficulty, I can feel some sympathy for some of those old and penniless pensioners who tried to better their lot, I fail to see why Mr & Mrs Clare, close to retirement age and with a $1.35 million home and an annual income of approx. $65,000, would want to enter into a high-risk poker-game to make even more money?
> 
> They take issue with the "falsely" declared annual income of $142,111 by writing, "If we did [have such an income], we certainly would not be borrowing money to make more."   Why, was $65,000 a year not enough?
> 
> At the time they applied for two CBA margin loans totalling $850,000, they already had an NBA margin loan of an unspecified sum on which they paid between $7,500 and $11,000 a month in interest.  That would suggest that the NBA margin loan was around $1 million.  What madness made them want to load up with another $850,000 in debt ?  If that is not greed, I don't know what is!



I agree.  If they found the $65,000 p.a. insufficient to live on, they could simply have taken out a reverse mortgage on their home, and stayed away from any margin lending.






darkside said:


> How did i stop myself from being sucked in , you know the deal " if it looks to good to be true" well maybe it is, they offered me a $100 000 a year on top of my income for doing nothing , even in my world , there is still no such thing as a "Free Lunch"



So, Onlooker isn't a 'hard market' at all, darkside.  You saw through it because you looked at it objectively.  It's hard to see why others couldn't have done likewise, especially when they were not exactly below the poverty line.

It seems as though there are two separate issues here:
1.  the involvement of clients in unreasonable borrowings via both equity
     loan and margin loans.   It's hard to see why they were not responsible
     for this, unless Storm actually altered figures and did not inform them.
2.  the behaviour by CBA which sounds shonky.

I'm not particularly a follower of Warren Buffet's philosophy, but one thing he said (or is reputed to have said) that is valuable is:

*Never invest in something you don't understand.*

If Storm clients went ahead with borrowing millions on a low income, they can't possibly have understood what they were doing.  

Or perhaps that's being too kind, and they rather just hoped they'd get away with it on the basis that the market wouldn't ever fall.


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## Solly (26 June 2009)

*"BoQ defends its links with Storm"*

"THE Bank of Queensland is facing a battle on two fronts over its involvement with failed financial planner Storm Financial, with an investigation by the corporate regulator and the prospect of court action next week."

More by Danny John and Stuart Washington in The Age here;

http://business.theage.com.au/business/boq-defends-its-links-with-storm-20090625-cy73.html


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## Solly (26 June 2009)

*"Bank of Queensland defends dealings with Storm Financial"*

"THE Bank of Queensland has defended its dealings with 319 clients of failed Storm Financial, alleging it did no wrong in lending them about $105 million."

More by Anthony Marx in The Courier Mail is here;

http://www.news.com.au/couriermail/story/0,23739,25691093-3122,00.html


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## Solly (26 June 2009)

As per the heads up from Carey:

*"BoQ to admit it is under probe"*

"Bank of Queensland will be forced to make a humiliating change today to the strongly worded denial issued about its involvement with Storm Financial, the Townsville-based adviser that collapsed with losses totalling about $3 billion."

See more by Duncan Hughes on page 58 of the Australian Financial Review.....


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## Solly (26 June 2009)

*"Slater & Gordon confirms BOQ action"*

"Claims bank hand in glove with Storm"

More by Kate Kachor in Investor Daily 

http://www.investordaily.com.au/cps/rde/xchg/id/style/6790.htm?rdeCOQ=SID-3F579BCE-209802F5


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## Solly (26 June 2009)

*"Bank claims no fault in Storm saga"*

"However the Townsville Bulletin understands the bank will have to correct a statement issued yesterday claiming it was not being investigated for its part in the financial tsunami which has wiped out thousands of investors."

More by Tony Raggatt here in the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/06/26/60861_hpnews.html


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## carey ramm (26 June 2009)

onlooker - much of what u say has been discussed at length in previous posts. the issue with the banks only impact 3500 of storms 14000 clients so only about 25%. the other 75% have done their dough cold - the balance most of whom are either technically insolvent or debt crippled have issues with several banks of which CBA has admitted they were partly to blame for the position these people found themselves in. now banks dont just put their hand up and compensate clients for losses unless their own lawyers etc have said "we have a problem". this problem will now be solved on a case by case basis. these people wont get everything back - what they will get is a fair and just settlement.

as for EC and storm and trying to recoup the comissions etc that is a very futile move as when u shake him upside down u wont get $3 billion falling out of his pockets. Storm has been liquidated by the creditors which includes some storm clients but there is a very large shortfall in the asset sales over what is owed to the first mortgagee (CBA) so there will be no distribution to unsecured creditors. CBA will pursue EC personally for the shortfall through the guarantee provisions on the loans and this will then most likely result in EC being financially liquidated ( i dont suspect the CBA would be in any frame of mind to go easy on EC given the recent history!!). The professionally indemntity insurance is insufficient (only $20m) and most likely invalid but i understand Slater and Gordon are pursuing them anyway on behalf of storm victims. Then there are those storm victims who invested in the last week or two before they closed their doors where it is now known storm traded insolvent - well those storm clients will be suing the storm directors personally.

most of the focus of late has been on the banks as the story has moved on from EC and company - storm has shut, the business sold and they are all under investigation by ASIC. i think everyone is keen to see the results of that investigation which should be come clear by end of august. i believe everyone is now aware that storm very clearly overgeared its clients.

the banks on the other hand have been saying for 6 months they did nothing wrong with some (25%) of the storm clients, wereas for those people who have been  involved in sorting the mess out, felt that the banks had done some bad stuff. finally this week CBA fessed up that there were problems.

as for the 7% commissions well if people want to pay that then so be it.


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## Onlooker (26 June 2009)

"Carey Ramm", you summarised the situation well and I agree that the focus has shifted to the Bank, if for no other reason than that they are the last ones left with any money!

It appears the Banks will now be blamed for having approved loan applications which should have been refused for various reasons and/or having called in the loans too soon.

If loans were approved based on falsified or omitted information, then those who were 'gilding the lily' must be made to answer for this.

If Banks had a legal obligation to verify that information but failed to do so, then they have to accept the consequences.

All this will no doubt be done in a totally legalistic method devoid of emotive arguments such as "this poor old pensioner should never have taken out a loan", etc.  as indeed it should. The days of the friendly neighbourhood bank manager who in fact counselled you not  to take out a loan disappeared sometime in the 60s.  These days, loan applications are centrally processed, crunched through a computer, and if the numbers stack up, the loan is granted.

As for the Banks having called in the loans too soon (when? towards the end of 2008?):  even six months later, the All Ords still has not improved sufficiently to have bailed out those who went into the market too heavy and too high.  Anyway, it wasn't the market that was their downfall:  it was their gearing!  

I am sure that all parties will firmly keep in mind that these transactions took place between consenting adults.  Nobody was forced to do anything.  Persuaded, yes; coerced, no!

As you very rightly say, "everyone is now aware that Storm very clearly overgeared its clients."  So while the immediate focus has shifted to the Banks, the moral condemnation must firmly stay with Storm and its operatives.  Storm never factored in the (ever-present) possibility of a rapid downturn in the market, either in its marketing of the scheme or in the staffing that would be required to handle a sudden flood of redemptions.

With regard to your closing comment, "as for the 7% commissions well if people want to pay that then so be it":  this argument could equally be applied to everything else that happened in this disgusting display of greed.  If people wanted to do it, then so be it!   But they must also accept responsibility for it!


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## Onlooker (26 June 2009)

Just thinking aloud:

It would be very illuminating to see the financial investment records of Mr Cassimatis and his cohorts.  Did they practise what they preached?  Did they gear up and buy up at the top of the market?

If they did not, or worse, if they sold down, while persuading others to keep gearing up and buying up, then their moral (if not indeed legal) condemnation must be absolute!

Will we ever see those records?


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## Julia (26 June 2009)

I heard something on the radio news this morning about a new law having been passed which places additional responsibility on the lender to ensure the borrower can afford the repayments.

Presumably this is as a result of the Storm debacle.  Can only be a good thing if people continue to refuse to take responsibility for themselves.

Promotes the nanny state, though.


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## Onlooker (26 June 2009)

No laws will ever protect against greed!  When greedy promoter meets greedy investor, you have the perfect storm!

This whole Bank-bashing bit (setting aside any illegalities that may have occurred and which must be brought to account) is akin to having your house burnt down by a mad arsonist but since he is on Centrelink benefits and can't be got at, you move on to the supermarket-chain that sold him the matches ...

Perhaps those Storm clients who did get sold out in November and December ought to thank the Banks for doing so when they did, because the All Ords was around 3300 in November and 3500 in December but dropped even farther to a sickening 3111 on the 6th of March 2009.

Those of us who went through it, live to tell the tale!  Why?  Because we did so with our own money and did not become greedy and geared up and up and up again!  If it was so easy to make money, we'd all be rich!  And some of us who are prudent enough and take the trouble of doing the necessary research, ought to be filthy-rich!  But that's not how the market works!  

Those who borrowed so recklessly against their houses should have kept in mind that the house is only a security to those who lend the money.  Those who borrowed it, must still repay it (plus interest!)


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## Onlooker (26 June 2009)

P.S. The reason I am in this Forum so early is because I am on the computer going through the daily routine of checking the overnight financial news from London and New York to make whatever changes may be necessary to protect my investments.  It's something I have to go through each morning.  No pain, no gain!  Ex-Stormers, please note!


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## Onlooker (26 June 2009)

In yesterday's post I inadvertently stated that "the high-point was the 1st of July 2007 when the All Ords stood at 6853. We were all financial geniuses who had just found the secret of everlasting prosperity!"  That was a typo!  We all felt like financial geniuses on the *1st of November *2007!!! 

With everybody smacking their lips and salivating at the thought of all that money they might be getting back from those naughty, naughty Banks, few people seem to be interested in the details of this disaster.  And what a disaster it has been!  Take for example Mr & Mrs Clare whose submission is on public record:  http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub100.pdf

In this submission they state that they took out their first margin loan (of approx. $1 million ?) in March 2008.  By that time the market had already been in a continual decline for three months from its high-point in the 6800s to around the 5500s (it had gone as low as 5163 on 18/3/08!)  "Never mind all that," I can hear them say, "it'll be up there again at 6800-plus soon," and in they went, boots and all, with $1 million.  Not trickling it in, a hundred thousand here, a hundred thousand there, to test the water; no, a cool $1,000,000 !  But even that wasn't enough, oh no!  Let's go for the jugular and add another $800,000 (or was it $850,000 ?) in short order.   That was in May 2008 when the market had gone through a bit of a sucker-rally and been, very momentarily, above 6000.  They were probably jumping up and down and hurrying their loan application along lest they miss the next bull market.  

Well, it was all the way downhill from there on out:  the All Ords was at 30/6/08 5332, at 31/7/08 5052, at 29/8/08 5209, at 30/9/08 4631, at 31/10/08 3982, at 28/11/08 3672, at 31/12/08 3659, at 30/1/09 3478, at 27/2/09 3296 - but thankfully, by that time the Banks had already sold them out! 

Now it's all bleating hearts:  "We weren't told"; "The loan application had irregularities."  Get real!  With that kind of investment approach you would've lost your pants anyway; having used other people's money, you've lost your underpants as well!  Personally, I'd be too embarrassed to parade my stupidity in public but, I guess, desperate people do desperate things!

By the way, the All Ords are right now at 3890 which is still about the same level at which most Stormers were sold out, and still a good 30% down from the 5500 at which point many of them would've "stormed" into the market.   Ergo:  had the Banks not sold them out then and they'd still be in market now, little would have changed for them except that their interest bill on those huge margin loans would have put on another $100,000 or so.  I would suggest the Banks did them a favour!


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## shibby (26 June 2009)

Onlooker said:


> P.S. The reason I am in this Forum so early is because I am on the computer going through the daily routine of checking the overnight financial news from London and New York to make whatever changes may be necessary to protect my investments.  It's something I have to go through each morning.  No pain, no gain!  Ex-Stormers, please note!




Why don't you go back and crawl under your rock you supercilious child, we have now listened to you prouncing around for days and your really are very boring. Start lecturing us when you have lived a little longer.


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## Steve Borden (26 June 2009)

Onlooker said:


> Personally, I'd be too embarrassed to parade my stupidity in public but, I guess, desperate people do desperate things!




Indeed, although it is apparent that hasn't stopped you so far.


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## Onlooker (26 June 2009)

Having been excoriated for being forensic rather than forgiving on this subject, I bow out, although I must say I thought I was in the Aussie Stock Forum and not some sort of feel-good support group.

Pulling the age-card ("Start lecturing us when you have lived a little longer") is quite ironic as I'm of the same vintage (aged 64) as many Stormers.  We all grew up having learned that you must work for what you want.  We all grew up saving our pennies in piggy-banks, paying off lay-buys, and saving in a Christmas Club - when did financial conservatism become old-fashioned?  I must've missed it - and aren't I glad I did!  

Good-bye and good luck!


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## Quincy (26 June 2009)

*ASIC investigates Bank of Queensland*

Bank of Queensland Ltd (BOQ) says it is the subject of an investigation by the Australian Securities and Investments Commission (ASIC).

The regional bank said it was made aware that it was under investigation on Thursday, June 25, Brisbane-based BOQ said in a statement on Friday.

The news comes after the bank told the stock exchange on Thursday there is no evidence it had acted dishonestly in relation to clients of collapsed investment group Storm Financial.

BOQ spokeswoman Caroline Dunworth confirmed that the ASIC investigation was related to Storm Financial, but said she couldn't be more specific.



More here :  http://news.smh.com.au/breaking-new...tigates-bank-of-queensland-20090626-czhh.html

June 26, 2009 - 3:59PM


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## Onlooker (26 June 2009)

P.S. I forgot to mention that I am new to this Aussie Stock Forum and only just now discovered a little thing called 'Private Messages.'  I opened it and - lo and behold! - a dozen or so private messages congratulating me on my comments.  Yes, I 'do a Turnbull' and won't tell you who they were but isn't it a pity that dissenting voices have to whisper lest they get stomped on?  Majority rules - and always drags us down to the lowest denominator!

This was my last post - I promise!!!


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## Solly (26 June 2009)

Another link about what Quincy posted above with some additional quotes from Carey:

"*Bank of Qld confirms ASIC investigation"*

"Storm was headquartered in Townsville, where economist Carey Ramm says the Bank of Queensland needs to also accept blame.

"With the Bank of Queensland, it actually has some of the worst documentation that I have seen out of all the Storm clients," he said."

http://www.abc.net.au/news/stories/2009/06/26/2609997.htm


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## Pindibog (26 June 2009)

shibby said:


> Why don't you go back and crawl under your rock you supercilious child, we have now listened to you prouncing around for days and your really are very boring. Start lecturing us when you have lived a little longer.




...


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## Cosgrove Fenton (26 June 2009)

shibby said:


> Why don't you go back and crawl under your rock you supercilious child, we have now listened to you prouncing around for days and your really are very boring. Start lecturing us when you have lived a little longer.




Onlooker Woof Woof all you did was restate what the previous 2000+ posts had established and your prancing around like you've invented the wheel...


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## Monario (27 June 2009)

Hi all,

Been away for a while gathering my composure... Has anyone heard anything on the Macquarie front in regards to ASIC or any other form of info relating to Storm?


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## Monario (27 June 2009)

I cant believe some people!!!

Onlooker, Most of the people who went down with storm did indeed grow up along those same lines as you, including myself, and my entire family and close friends(all whom were storm victims)

We all worked hard to get what we had, we all researched what we did, or at least thought we had!!! We all had wealth that we had worked our lives to create, do you think the banks lent us money just on our good word!! No they leant us money because they could see our assetts.

We all know we made an error in judgment, and some silly mistakes, or perhaps rediculous, but what I must say is... WE WERE NOT THE ONLY ONES MAKING THEM!!!

We have paid dearly for them, and I as well as most others are still and will be into the future!!! But the others That made them have walked away from it unscathed, and these others were the ones that were supposed to have our backs, but when the heat turned up, the scurried away with their tails between their legs.

Tell me, how Hard do you think CBA worked for their 2.5bill profit? I dont think they did an honest days work to tell you the truth, and to raise interest rates a few days before announcing the storm deals they are making, Gee what a coincidence?

I think people should have a hard think before typing and posting comments on this site, especially people who clearly have no idea exactly what unfolded within the storm confines!!!!

Dont crawl under a rock as someone told you to, I think you need to crawl out open your eyes and learn about what really happened!!!




Onlooker said:


> Having been excoriated for being forensic rather than forgiving on this subject, I bow out, although I must say I thought I was in the Aussie Stock Forum and not some sort of feel-good support group.
> 
> Pulling the age-card ("Start lecturing us when you have lived a little longer") is quite ironic as I'm of the same vintage (aged 64) as many Stormers.  We all grew up having learned that you must work for what you want.  We all grew up saving our pennies in piggy-banks, paying off lay-buys, and saving in a Christmas Club - when did financial conservatism become old-fashioned?  I must've missed it - and aren't I glad I did!
> 
> Good-bye and good luck!


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## Ferret (27 June 2009)

Monario said:


> We all worked hard to get what we had, we all researched what we did, or at least thought we had!!! QUOTE]
> 
> Just what research did you do?  Enough to learn that the Storm model meant multiple layers of leverage?  If you knew that and still agreed to be stormified, you took the risk and you should bear the consequences.
> 
> I'm not going to support this culture of looking for others to blame for our own mistakes.


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## Solly (27 June 2009)

*"Bank of Queensland admits Storm error"*

"BANK of Queensland was forced to make an embarrassing correction, confirming it was the subject of a regulatory investigation into its lending to clients of the Storm Financial collapse."

More by Kerrie Sinclair in the Herald Sun here;

http://www.news.com.au/heraldsun/story/0,21985,25696309-664,00.html


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## Solly (27 June 2009)

*"Bank wrong on Storm investigation claim"*

"It is understood investigators with the Australian Securities and Investments Commission told the bank to correct the record after it issued a statement denying improper conduct and that it was not under investigation by ASIC."

More by Tony Raggatt from the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/06/27/61051_hpnews.html


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## Solly (27 June 2009)

Another two submissions of interest to
Inquiry into Financial Products and Services in Australia.


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub103.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub104.pdf


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## carey ramm (27 June 2009)

feret

what these people did was invest in managed investment funds like the vast majority of australians do in some form or another. yes they used leverage, and some used a lot of leverage. but these same people also signed documents to sell out and minimise their losses and yes they would have lost some money (as many other australians have done so in the past year) but it would not have been fatal - as it has become. now the banks have started admitting errors the final piece of the puzzle that remains unanswered is why werent the sell orders signed by the clients enacted????

now because the sell orders werent acted upon many clients ended up in negative equity up to 140% - when even the margin loan prospectuses indicated that they will sell u up before u get into negative equity. this isnt about research it is about a systems breakdown or ignoring client instructions...

i know that if i put a sell order into a stockbroker and soemewhere bewteen the broker and the asx they decided not to act on my instructions (and not even call me to say they hadnt acted) i would be mighty peeved and would be most certainly calling my lawyer. I am sure u would feel the same way.

so the $3billion question remaining is  - was it Storm or the margin lenders who didnt act on the client sell orders????


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## bunyip (27 June 2009)

carey ramm said:


> Aark Aark Aark.... is that a crow i hear Bunyip!
> 
> Sorry didnt mean to be petty...




Actually Carey, I was thinking more of a rooster that struts around the farm yard with his chest puffed out, crowing loudly and thinking he's far more important than he really is.


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## chrisgee (27 June 2009)

again it has been a week of action and heaps of things to read. i like what carey said about things not being done properley-who didnt sell when they were supposed to ?- if this had been done properley the storm people would not be in the mess that it has become- see there is blame to given out- i read abiove how some posters are bagging the storm investors again- hey its not that simple- things were supposed to be inplace to stop any of this from happening-remember 'no one will lose your house' 'just keep following what your are told to do' - 'you are safe'-'dont worry'- yep i cant wait to see what asicc and the cops find- things havent been done right- look the almighty comm bank has had the gumption tio say something wasnt quite right-i wonder if we will ever hear from mr c again?? I hope so lots would like to hear his side of the story-


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## Quincy (27 June 2009)

Article in the Weekend Edition of the Financial Review - June 27-28, 2009.


*"THE BANK MANAGERS WHO WERE TOO GOOD TO BE TRUE"*

The mystery of how two BoQ managers outdid all their peers may be unlocked by the Storm inquiry."

Story by Duncan Hughes



More here :   
	

		
			
		

		
	

View attachment AFR - 27-28 June, 2009.pdf


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## Monario (27 June 2009)

Ferret, I took independant advice on what storm was offering, I spoke with several clients before I entered. I did look at the leveraging, and in my case the levels used were acceptable, and i had more cash to secure it all the way. 

My problems oocured from been kept in the dark, my mistake was to much trust, my lesson is, I now know I dont need an FP to run my investments!!

How it happened was, I was told I was not in margin call when I was, I was told not to worry as my investment was safe, little did I know MML was selling me down the whole time, and neither Storm or MML were informing me, I was not given the opportunity to use more cash to secure, and if i was I would still have my porfolio. Due to an inability to handle the volume of trades and process all the info MML and Challenger funds were closed down for several days, so I could not even get info, and when I was able to get it it was inaccurate, that my friend is definately not a mistake on my behalf.

And do you honestly think that Macquarie acted appropriately, I should have been informed of these sell downs. 

Its due dilligence, "this client is in margin call, and no action has been taken" 1st sell down, "This client is in margin call again and we have sold him down once I wonder why no action has been taken, oh well" 2nd sell down. " this is really strange, this client is in margin for a 3rd time, do you think we should contact him and see what is happening? Na he should be making use of the inaccesable and inaccurate data we provide" 3rd sell down..  "Gee wizz, this guy is now in a Neg. Equity position, we should give him a call now" and I get the call, but what use is it now?

And as I stated in the post you quoted, I am not looking to wholly lay the blame on others, but the other parties that made mistakes, i.e. banks etc. should be made to pay also. I have paid dearly for my mistakes, why should the others walk freely and be allowed to contiue on in the same fashion. I accept I made mistakes, its time all the others did too.




Ferret said:


> Monario said:
> 
> 
> > We all worked hard to get what we had, we all researched what we did, or at least thought we had!!! QUOTE]
> ...


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## mikes (27 June 2009)

further to carey ramm

and what was the trigger percentage for margin calls which the investors advisedly and properly informed signed off on.  where is the written evidence.


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## DocK (27 June 2009)

I've been following this thread from the beginning, but haven't posted as I have no interest in being labelled by some of the posters who quite often leap to conclusions.  My main source of irritation is being called "greedy" for investing via Storm in the first place.

We are in our mid-forties, are self-employed, have worked hard all of our lives and paid our taxes, and those of the staff we employ.  We stupidly decided to use the equity tied up in our home to provide future capital growth that we intended to use for our children's education, some much-needed home improvements, and to be independant upon retirement.  It seems there are some on this forum that regard anyone who tries to better their situation as "greedy".  We don't take lavish holidays, we live frugally, we earn modest salaries from our business, but we "greedily" wanted to acheive financial security by investing in what we thought was a moderately risky investment - an index fund.  We were aware that borrowing against our home added to the risk, and we were prepared to take that risk - we have another 15 to 20 years of working lives ahead of us. We don't blame anyone for that decision, and it is one that many people our age have made - not just those invested through Storm.  I understand that it is common for financial advisers to recommend borrowing against equity in the family home - for clients of our age.  Our level of gearing on our margin loan was 35% prior to the market turning down, and never exceeded 70%.  We did not receive a margin call, and had cash reserves available to reduce our margin loan in the event it was necessary.  We don't "blame" Storm or the banks for our losses in the market - hopefully there will be a future recovery and our remaining investment will grow in time.

We do however lay blame where we feel it is deserved.  Firstly at ourselves for trusting in financial planners to have our best interests at heart.  Hindsight is a wonderful thing, and we were guilty of being gullible and naive.  It is clear now that we were paying way too much for what was basically a simple product, and being used as "cash cows" for the benefit of Storm's directors and advisors.  Dollar cost averaging is a strategy put forward by some and criticised by others, and making further small investments as the market dropped was portrayed to us as a way of recouping losses faster when the market eventually turned upwards again, than if we just sat and held.  Smart choice?  Again - hindsight tells the story, but neither our advisor (clearly) or ourselves thought the market would drop as much as it did.  Where we did do the right thing though, was in ensuring our margin loan lvr remained below 50% - that's probably all that saved us.  I feel for those that tried to cash out and were prevented.  We are computer "savvy" and were checking on our margin loan status daily (although the investment values from Challenger were always a few days behind) but I don't think it's unreasonable that a lot of the older, less computer-literate people trusted in their highly paid advisors to do this for them. 
Secondly, I do lay some blame on the CBA.  Yes we were aware that we willingly borrowed from them and would have to pay them back.  I'm not sure if our financial position was "enhanced" by Storm employees along the way - and don't really feel that it matters as we were happy to accept the loan made to us. However, our initial loan was based upon a valuation carried out by a licenced valuer and we were comfortable at the level of equity we retained in our home.  Had we known that the CBA carried out a desk-top valuation on our home from several thousand km away and then provided that information to Storm with the sole purpose of enabling both organisations to profit from further borrowings - we would not have increased our loan when we did.  No doubt some posters will say we should have conducted our own valuation on our home, we had no idea that the CBA had not conducted a proper valuation and accepted that the increased value stated was realistic.  Our area had been growing in value and as we had no intention of selling we weren't up-to-the-minute on house values in our suburb.  We do feel that the CBA and Storm were putting their own interests ahead of their clients and were quite clearly operating as a joint venture in this regard - and it was not made known to us.  As already stated, it must be clear to the CBA's legal people that they have a case to answer or the deals being offered would not be forthcoming.  Nothing will convince me that a bank really cares about any hardship endured by its clients - and I don't really know that it should (I'm still a shareholder too!)  Banks do care about PR though, and it's now obvious that shoddy lending practices were occurring.
Thirdly, not particularly happpy the Macquarie insisted that their margin loan be repaid, even though it was well within acceptable lvr.  This necessitated breaking a pre-paid interest period and consequent break costs.  

A very valuable lesson has been learned - although at a fairly high price.  Unfortunately the whole experience has left us cynical and distrustful of almost everyone - not the type of person I wanted to be.  There are some posters who pride themselves on being much more financially knowledgeable than a lot of the retired clients of Storm, and are quick to disparage them for being so uneducated about their own finances.  I think it's a shame that some of our older Aussies who have lived their lives honestly have had to learn the hard way not to expect the same treatment from others.  How much research is reasonable? Can I accept the word of my doctor and dentist but not by financial planner?  Should I get a degree in accountancy so I can double-check the work my accountant does on our tax returns?  Yes, we are all responsible for our own decisions, and again hind-sight proves that you trust others at your own peril - but a lot of Storm's ex-clients (not all) did not just blindly trust - but thought the research they had done was adequate.  It seems that sometimes the "safe" thing to do is nothing - and no doubt once we'd retired on a government pension there would be those quick to accuse us of being "lazy" for not providing for ourselves - probably those so quick to accuse us all of being "greedy" now!

Rant over


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## stung (27 June 2009)

Monario said:


> Hi all,
> 
> Been away for a while gathering my composure... Has anyone heard anything on the Macquarie front in regards to ASIC or any other form of info relating to Storm?




Monario,
I would be keen also to have some info on Macquarie. My other half has contacted Macquarie on a number of issues and they have been quite rude. 

They said  the level of LVR reached before a margin call, (despite what was agreed upon in our Storm documents),  could be changed  whenever Macquarie wanted and we could not do a thing about it. We have had no joy with them at all.

They seem as arrogant as CBA was when they were first approached earlier in the year. Of course CBA has changed their tune and are  now extremely polite in telephone conversations.


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## stung (27 June 2009)

Thanks Solly for the regular updates. 
Much appreciated.


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## Judd (27 June 2009)

stung said:


> Monario,
> I would be keen also to have some info on Macquarie. My other half has contacted Macquarie on a number of issues and they have been quite rude.
> 
> *They said  the level of LVR reached before a margin call, (despite what was agreed upon in our Storm documents),  could be changed  whenever Macquarie wanted and we could not do a thing about it. We have had no joy with them at all.
> ...




[In relation to bolded part]  Alterations to the LVR often occur and its a business decision by the lender to manage their risks.  Nothing unusual or deceitful about that.  All margin lenders set the Loan to Value Ratio of a particular product according to their view on risk, liquidity and ratio to margin loan book.  Can go up, down or not move.  Their ability to do that is in the prospectus your financial adviser should [note the word should] have handed to you.  Can affect overall gearing in either a positive or negative manner - more so if your only holding a one product wonder - but that is just one of the risks of investing that you need to manage if you use margin loans.  It's not rocket science.


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## awg (27 June 2009)

carey ramm said:


> feret
> 
> so the $3billion question remaining is  - was it Storm or the margin lenders who didnt act on the client sell orders????




I agree. My guess..Storm 

I have told my story elswhere about badged WRAP funds, and why I opted out, due in part, relating to difficulties having immediate action on my account.

All buy and sell orders should be receipt emailed and stored!  





DocK said:


> I've been following this thread from the beginning, but haven't posted as I have no interest in being labelled by some of the posters who quite often leap to conclusions.  My main source of irritation is being called "greedy" for investing via Storm in the first place.
> 
> Rant over




It was a fair and balanced rant IMO.

I think most of the "greed" word has been mainly directed towards Storms 7% commission grab. This caused a vortex of conflicted interest.

I also totally agree that, regretably the majority of people are simply not in a position to manage their own money.

On a forum such as this, by its very nature, most people are very interested in that topic, know about "money", and I'm afraid admissions of financial misadventure are not met with a great deal of sympathy.

There would be an awful lot of smart people who were not involved with Storm whose assets would have been decimated due to leverage, even if they did not get margin called.


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## twiceshy (27 June 2009)

awg, exactly!  A lot of other people are down, and are still down - _moi!_ -, but not out (yet), as they can wait (or actively work) towards a recovery which, in the end, will come - as will death 

The Stormers made the mistake of investing with borrowed money.  "Invest with borrowed money" - If that is not an oxymoron, I don't know what is?  I mean, you either have money to invest or you don't.  And it was money which was borrowed short-term!  I mean would anybody commit themselves to a mortgaged house purchase on the condition that the lender can recall the money at any time?  Of course not!

The Stormers should not read too much into the CBA's preparedness to enter negotiations.  Bankers are not the best PR people and, having refused any negotiations from the outset, only inflamed the situation.  They belatedly realised (or were advised by their PR people) that it would be so much better to be seen to be doing something and in the process slowly, slowly suck the oxygen out of the argument.  EC knew about PR; the first thing he did was engage a highly-paid PR firm who advised him how to deflect the Stormers' anger:  get stuck into the big bad banks!

I have never had a margin loan and wouldn't take one if it was offered to me at 0% interest, but I would imagine they operate similarly to placing a stop-loss order which I do quite often with my shares.  How does a stop-loss order work?  I tell my broker that if a certain share falls below a certain price, he should sell it within a certain price band so as to limit my losses.  In placing such an order, I agree to be bound by the broker's conditions which are, amongst others, that he will use his best endeavours to do so but cannot guarantee that the order will be executed, either because the market dropped so quickly that he could never sell within the price band stipulated by me, or for virtually any other reason.  I should think that margin calls and margin call selling is governed by similar terms.

Yes, the banks may make sympathetic sounds and, yes, their lawyers may eventually interprete the letter of the law less strictly but they won't roll over for one simple reason:  they can't afford to!  Roll over now and they have to roll over every time another loan goes belly-up.  It would completely undermine the functioning of our economy which is build on credit.

I would be interested to see here in this Forum displayed or quoted the relevant paragraphs from the prospectus and the margin loan documentation that describe how and when margin calls would be exercised.  So far I have only read about "I thought they would..." or "I was told they would..."


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## DocK (27 June 2009)

twiceshy said:


> awg, exactly!  A lot of other people are down, and are still down - _moi!_ -, but not out (yet), as they can wait (or actively work) towards a recovery which, in the end, will come - as will death
> 
> The Stormers made the mistake of investing with borrowed money.  "Invest with borrowed money" - If that is not an oxymoron, I don't know what is?  I mean, you either have money to invest or you don't.  And it was money which was borrowed short-term!  I mean would anybody commit themselves to a mortgaged house purchase on the condition that the lender can recall the money at any time?  Of course not!..."




Twiceshy - I think you'll find that many regular posters on this forum have used borrowed money to invest in one form or another.  Borrowing against home equity and margin lending are fairly common practices advocated by a plethora of financial planners - it's the level of gearing that can get you into trouble!  I think you're a bit confused about what is short-term lending (presumably you mean margin lending by this?) and borrowing against the house - which was done on the same basis as any other home loan - we had a 25 year loan - hardly short-term.  


I fully respect your decision to not use margin lending - but that doesn't make you right and me wrong - it just means we're comfortable with different levels of risk.


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## chrisgee (27 June 2009)

ive just come back for a re read of things again. im not a computer geek or a flash typist but i just want to say many go financial advisers like storm and others because you thought you were doing the right thing. i get an engineer to to drwaings for me, i get a brickie to lay bricks,i get a chippe to cut wood, i go to a heart specialist if i need an aortic valve replaced-- get what im saying-- many went to storm because they thought they were going to specialists in thier field to provide expert advice and financial strategy..full stop...history shows they were wrong..but whose fault is it ?? storm ? banks ? regulators..investors ? yep i think all must carry some degree of blame and responsibility but the weighting of blame must come out and be proven. id like to see this done in a legal way..in court if possible and in public. good to see the comm bank say they are not too flash with what they were involved in..good to see some investors saying they'd do things differently....but what about mr c ???  i cant wait to hear his side of things.
i supppose he cant say anything in public beacuse of whats happenimg but does anybodu know if mr c will make an appearance at the inquiry?? 
i just want it all to come out so it never happens again


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## stung (27 June 2009)

Judd said:


> [In relation to bolded part]  Alterations to the LVR often occur and its a business decision by the lender to manage their risks.  Nothing unusual or deceitful about that.  All margin lenders set the Loan to Value Ratio of a particular product according to their view on risk, liquidity and ratio to margin loan book.  Can go up, down or not move.  Their ability to do that is in the prospectus your financial adviser should [note the word should] have handed to you.  Can affect overall gearing in either a positive or negative manner - more so if your only holding a one product wonder - but that is just one of the risks of investing that you need to manage if you use margin loans.  It's not rocket science.




I paid Storm to manage my financial affairs including my margin loan.


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## twiceshy (27 June 2009)

DocK, point well made and point taken!  In fact, your previous 'rant' is very rational and, for what it is worth, you ought to make it a submission to the Senate.  That is, for what it is worth, because being the cynic that I am, I don't believe much will come of it.  It's just another 'being seen to be doing something' exercise.  In the end, maybe another layer of regulations which will ultimately be outwitted by another scheme.

It would be a pity that, after having learnt your lesson and paid for it so dearly, you turned your back completely on the capitalist system.  We all more or less got there the same way as you are getting there right now:  by trial and error!

The learning is twofold:  learning the rules of the system and learning about yourself, since it is as much about psychology as it is about economics (perhaps even more so about the former than the latter).   Fear and greed, greed and fear - it's being played out day after day on the stockmarket.  

Knowing about yourself, knowing what emotional buttons they can press to get you going, is essential in controlling your action.  I have made it a rule a very long time ago never to make important decisions when I am on an emotional high or an emotional low.  I have also a cross-section of friends from various walks of life and with contrasting characteristics who are not afraid to tell each other when we are about to do something stupid.  You might have guessed by now that I am the resident cynic   

Don't think for a moment that I personally wasn't tempted to take out a margin loan when things seemed to be going up and up and up - it just seemed all so easy!  My online broker drowned me in promotional mail; every day as I opened the FinReview I was looking at full-page ads extolling the virtue of being geared up.  Instinct told me not to!  As you write, it's all about what you are comfortable with.


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## twiceshy (27 June 2009)

chrisgee, the advent of the financial adviser/planner is a fairly recent development.  Somehow - and I am still at a loss how this happened but I guess it would have to do with vested interests - the accounting profession was excluded from this new group of professionals (and I am using the word 'professionals' with a lot of charity  

Many of us already use accountants with whom we have an ongoing, strong relationship and they know our financial situation, how we got there and where we are going, better than any financial adviser.  And yet, they are expressly forbidden from giving us financial advice (unless, I guess, they sat through the requisite examinations which I doubt are anything as difficult as sitting the CPA or Chartered examinations which require university studies these days.)  

With the financial planning business being such a relatively new profession, they will need as many years and as many professional develoment upgrades as did the accounting profession before it became what it is today:  a relatively well-ordered and well-qualified bunch of people.  That took quite a while as I can still remember when bookkeeper-type people were handed accounting diplomas on no more credentials than that they had done that sort of work for a required number of years.  

To weed out the financial planning profession requires that those people need to sit for far more stringent examinations then they do at present, and that their practising certificates should be graded and limited to specific ranges of investment portfolios, i.e. a planner who advises on a million-dollar portfolio must hold a more advanced license than a planner who does the mum-and-dad stuff, etc. and would need to re-apply year after year under stringent conditions which would include further education, etc.  Maybe all this is already happening?  I do not know as I wouldn't use any of those guys (except as a doormat perhaps


----------



## twiceshy (27 June 2009)

As I wrote just a moment ago, for every scam that gets closed down, another one opens up.  Here's an item fresh off this evening's new:

QUOTE
*Gambling scams expose regulation deficiencies*

Sport is an Australian national obsession, but it seems some con men are taking advantage of that passion for their financial gain.

Moreover, some of the firms conducting the scams remain registered as companies long after suspicions first surface about their bona fides.

The Australian Securities and Investments Commission (ASIC) registers companies and regulates investment schemes, but does not regulate gambling schemes, even when they pose as investments. 

Betting scheme crackdown

The authorities that are responsible for regulating gambling schemes are the Australian Competition and Consumer Commission (ACCC), the state departments of fair trading and, in the cases of criminal fraud, police. 

The ACCC and the Queensland Police and Office of Fair Trading this week launched a joint campaign against sport arbitrage and gambling schemes and scams based on the Gold Coast.

They say hundreds of Australians have fallen prey to such operators, and buying into investment schemes which claim to give you access to computer software which will help you gamble successfully, is likely to be a losing bet.

"It's estimated that up to $20 million may have been lost by Australian consumers in these schemes. It's hard to tell at this stage exactly how much, but we're talking about a lot of money," ACCC deputy chairman Peter Kell said.

He says up-front fees of $3,000 to 19,000 are commonly charged for access to gambling software, or syndicates that place the bets for you.

And the Queensland Police say they have had one unlucky punter come forward who invested $146,000 between two of these companies.

While it may seem ridiculous for anyone to invest so much money into such a scheme, the authorities say the marketing materials usually look very professional, and these organisations occasionally pool resources to avoid the appearance of a one-man show.

"We found an office where six companies were located where they shared telemarketing staff and other facilities," said Joe Camilleri from Queensland's Office of Fair Trading.

The ACCC says a loss of confidence in the mainstream markets during the financial crisis is tempting consumers to look for alternatives.

"We've seen a 60 per cent increase in scams reported to us over the last year, and a 67 per cent increase in the number of people reporting losses," Mr Kell said.

Take the money and run

While some of these companies do actually bet on your behalf, Mr Camilleri says others just walk away with the cash.

"About 50 per cent of complainants are telling us that, once they pay their money to the operators of these schemes, they are no longer able to contact these companies," he said.

Even where the companies do actually place bets, the authorities say the returns are rarely anywhere near those promised or hinted at, and they have had staff from some of these operations come forward and tell them that the bets came straight from the newspaper form guide.

Fair Trading and the Queensland police tried to visit 39 sports betting schemes based on the Gold Coast, but they found only 8 operating at their registered addresses.

Authorities say more than 650 complaints have been lodged since the beginning of last year, and Detective Superintendent Brian Hay say the schemes have been multiplying rapidly.

"There's a whole plethora of different circumstances, environments, entities. This is not one or two people, it's not one or two companies, it's almost if you like a nefarious, insidious industry that has populated a certain landscape," he said.

First hand experience

Although Queensland based, the schemes do not just target Queenslanders, but the authorities say most of the complaints have come from there and New South Wales. 

Recently I received a call from a Brisbane-based company claiming past returns of between 26 and 95 per cent a month on its horse racing scheme.

I cannot name it, because it may be one of the organisations currently under investigation, but I was only too happy to hear their spiel so I could share it with ABC News Online readers.

In return for having this company manage a gambling account using their computer system, I was asked for an $8,800 dollar sign-up fee, and between $1,000 and $10,000 in capital to start the gambling account.

In their sales pitch, the company claimed its software system was developed by a former employee of Kerry Packer, who their salesman said used to help Mr Packer with his horse racing picks.

The company also claimed it had been around for 15 years, but a quick search of the ASIC database revealed it was only registered in May last year.

When I searched internet investor forums, dozens of people had been given similar offers from the same company. 

Nick Miller from South Australia responded to my post on the forum and gave me a call. He says he was rung about eight times over a period of several weeks by this company.

"It was heavy pressure selling," he said. 

"It was, 'we've only got so many spots left for South Australia, we've got one left in South Australia, and one for NSW so you'd better sign up now or you'll miss out,' and then I just said, no I'm not interested in it."

Company registration

While Mr Miller smelt a rat and did not invest despite their persistence, he is concerned about how easy it is for such businesses to set up and remain as legally registered companies.

"When I was talking to this Tom guy he said, 'as you know we're regulated, we're required, every year we have to register with ASIC', he made some reference to that," he said. 

"It sort of shocked me a little bit to think that there could be rogue operators like this that have obviously got a registration."

ASIC told the ABC that gambling schemes are not classified as investments and therefore do not fall under its jurisdiction.

But ASIC is responsible for company registers, and ASIC's database reveals that the regulator got information last November that the Brisbane company which contacted me and Mr Miller is no longer at its registered address.

Mr Kell says that is a good reason why consumers should not rely solely on the companies register when checking the legitimacy of a firm.

"One of the messages we have to send here, because it has been used in the marketing by these companies, is that simply registering a company doesn't make it immediately trustworthy," he said.

The length of time taken to investigate dodgy companies, and the apparent difficulty in shutting operations down until well after they have swindled thousands of dollars from investors, raises some serious questions about consumer protection regulation, and the funding of investigation and enforcement in Australia.

Given that it seems unlikely that regulators will be given the resources needed to better filter companies when they first start up, the ACCC says consumer awareness is the best defence.

"With these sports investment schemes the only certain bet is that you'll lose money," Mr Kell said.
UNQUOTE

Those smart guys will always be one step ahead of laws and regulations!  Therefore, you need to watch out for yourself!


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## awg (27 June 2009)

stung said:


> I paid Storm to manage my financial affairs including my margin loan.




Indeed, and they entered into a contract with CBA/CGI etc

IMO any arrangement that allows clients to go substantially over 100% margin is so flawed that the fault rests jointly and severally with all the partners to that agreement.

That is the thing that amazes me, and I know there is a huge sh!tfight going on now, but I always understood, once your buffer was triggered, you have 24-48 hrs, or get sold down, no ifs, no buts.

I guess one problem is that Managed Investment updates are often several days behind constituent stock price.

So that could be a factor, but thats why buffers exist


I dont know what Iranian justice mandates for ripping out the life savings of thousands, but a few public executions would be great, they could have them at half time during State of Origin


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## twiceshy (27 June 2009)

chrisgee, don't be too surprised if this whole thing will turn on some technicality and the principal players in this drama will get away unscathed.  

Our legal system isn't so much about justice as it is about who can come up with the best lawyer.  The court room is a stage and the best actor get the bouquets!  In the olden days, when the laws were not as 'refined' as they are now, public humiliation in stocks and pillories was a major part of punishment.  In the Middle East, public floggings and beheadings deal with such matters.


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## twiceshy (27 June 2009)

awg, we must have been thinking along the same lines


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## Garpal Gumnut (27 June 2009)

Can anyone shed light on the composition of the higher eschelon of SICAG and their biases.

I know they are against the banks and pro Storm victims, but I'm unsure about their links with other players in this drama.

gg


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## Judd (27 June 2009)

Drat.  Connection problems.

Was going to attach the Margin Loan application from Colonial Geared Investments.  This seems to be the one directed towards financial planners and does appear to provide power of attorney.

Veeery complicated.  Would need a few weeks to go through it before I could get a feel and understanding of it before I signed the bloody thing.

Anyway here is the link

https://www.colonialgearedinvestments.com.au/gearing_information/CML_Application_2007-08.pdf


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## twiceshy (27 June 2009)

Judd, have just read through the Colonial Mutual Application.  Nothing noteworthy there other than that you authorise CBA to act upon instructions from the Client Advisor (Storm) and that all dealings are subject to the "Margin Loan Terms and Conditions."  Those conditions require exhaustive study as they list all the nuts and bolts that makes it all work.  I suspect it's quite a lengthy decument, even in small print.  Have you read it thoroughly?  Can it be put on the web?


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## twiceshy (27 June 2009)

Have tracked down the Terms and Conditions on the web at https://www.colonialgearedinvestments.com.au/gearing_information/H984_CGI_MarginLoan_TCs_text_v7.pdf and will make it my bedtime reading


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## twiceshy (27 June 2009)

Cutting to the chase on Colonial Mutual Margin Loan Terms and Conditions, paragraph 4.3 throiugh to 4.5 puts it all squarely on the borrower:
_
Notice of Margin Call

4.3 (a) You agree that we may provide notice of margin call *by any
or all of the following ways to you or your Client Adviser*:
• In writing (including by fax, email or other electronic
means)
• Orally, including by telephone
• Updating the Colonial Geared Investments website.
(b) It is your obligation to keep your or your Client Adviser’s
contact details up to date.

4.4 *You are responsible for*:
(a) *monitoring your portfolio and determining when your loan is
subject to a margin call*; and
(b) being in a position to receive any communications from us
in relation to this clause and to act within the time limits
specified in this clause; and
(c) ensuring that a margin call does not occur.

4.5 *If you do not meet a margin call*:
(a) *we may (but are not obliged to) sell *any, or all of the security
supporting your loan and reduce the amount owing.
(b) we may, if we consider it necessary or prudent to do so,
sell more security than the minimum required to satisfy the
margin call.
(c) *we may sell security without first contacting you, any margin
call contact, or agent you may have nominated.*
(d) we may sell security in the order we choose.
_

(bold emphasis added by me)

Signed, sealed and delivered - or better, stitched up for good!

That took less than 10 minutes to read.  I rest my case.


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## trainspotter (27 June 2009)

Never trust anything with the name "STORM" in it ... kinda gives it away really. Not sure about the Melbourne Storm RLC either ... look what happened with Matthew Johns. And there was that movie with George Clooney in it "The perfect storm" .... sums it up pretty much. Also the Storm worm botnet that infected computers in September 2007 was another beauty to stay away from. I could go on and on and on but I wont. Storm in a teacup ... now that is my final word.


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## darkside (27 June 2009)

twiceshy said:


> chrisgee, don't be too surprised if this whole thing will turn on some technicality and the principal players in this drama will get away unscathed.
> 
> Our legal system isn't so much about justice as it is about who can come up with the best lawyer.  The court room is a stage and the best actor get the bouquets!  In the olden days, when the laws were not as 'refined' as they are now, public humiliation in stocks and pillories was a major part of punishment.  In the Middle East, public floggings and beheadings deal with such matters.




So true, one of the prosecuters i work with, told me the other day after i gave him a spray about what i considered an open and shut case but we lost it ,that nowadays  "*money buys justice*"  and when all the legal eagles turn up on massive pay packets , whoever throws the most money at the court system and PR spin will come out the winners.


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## twiceshy (27 June 2009)

yes, darkside, and unfortunately for the Stormers, "boo hoo we didn't know" or "boo hoo we didn't understand" are not legal arguments.

Once we're of legal age, we are responsible for our actions, however old or feeble-minded (until or unless we want to admit ourselves to an insane asylum.)

And no law will change that!  Imagine the cries of "Discrimination, unfairness" by those same people we wanted to protect, if we enacted laws that made special provisions or even quarantined people of a certain age or educational standard!

Those Margin Loan Terms and Conditions are in very clear and very plain English.  I don't know how plainer they could have been written.

As I said before, the whole thing will probably turn on some technicality.


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## carey ramm (27 June 2009)

twice shy - i think u may find that CML have changed their terms and conditions for margin lending from what it was in 2008 and prior - i wonder why they would have done that...

and 

bunyip have u done anything to help any storm victims out? or have u just puffed around here making them feel like crap.


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## twiceshy (27 June 2009)

Just caught your last post before logging off:  a bit cryptic on your part.  Could you elucidate?   How did the 2008 version read?  The subsequent changes could be a revealing pointer!  Look forward to reading your reply in the morrow


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## Judd (27 June 2009)

carey ramm said:


> twice shy -* i think u may find that CML have changed their terms and conditions for margin lending from what it was in 2008 and prior* - i wonder why they would have done that...
> 
> and
> 
> bunyip have u done anything to help any storm victims out? or have u just puffed around here making them feel like crap.




Now that [in bold] is interesting.  Always curious about these sorts of matters.

As for bunyip, that entity hasn't been engaged by "Stormers" to be nice to them or anyone else.  That's your task.

Lovely lawyer jokes given to me by a couple of legal eagles.

"The trouble with law is lawyers"  However, I think that is an actual quote from somewhere.

"One lawyer in town?  Starvation.  Two lawyers in town?  Prosperity."

I don't think the latter was referring to the clients of the legal profession.

Well, I laughed anyway. :

But I believe the more pertinent adage is "Ignore the law at your own peril."


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## Pindibog (27 June 2009)

awg said:


> Indeed, and they entered into a contract with CBA/CGI etc
> 
> IMO any arrangement that allows clients to go substantially over 100% margin is so flawed that the fault rests jointly and severally with all the partners to that agreement.
> 
> ...




After I was sold out on 4/12 I found out I had been in margin call for 56days?? and let go to 107.5% Never contacted and I had the capacity to remedy it. Every time I contacted Storm they stated I was not in margin call...


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## Iggy_Pop (27 June 2009)

After reading this thread and linked documents for a few weeks, the problem with Storm seem to be 

1. Storm as a business was based on one financial model, a highly geared index fund
2. Revenue came in the form of upfront fees, trailing commissions and whatever other kick backs came back from margin loans etc
3. Storm had considerable debt, with acquisitions of other financial businesses being made and a failed floating of the company

When the market starts to go down, a reduced number of new investors would be investing reducing revenue from upfront commissions, a key part of their revenue stream.  As the market got worse, the funds should have been swapped to cash, but that would stop the trailing commissions and the business would go under in any case, now due to no revenue. Storm hoped they could get through the downturn with more borrowing from CBA, but CBA refused. But as the margin loans became negative, the banks had to sell to protect their investment. This results in Storm with a large debt and no revenue. When the margin loans were sold down, Storm lasted about five weeks, before being wound up. 

From my perspective, Storm was always doomed as a business with all revenue coming from one area, and working with high leverage. As soon as that revenue stream was impacted, they were in trouble. Most businesses try to establish a few revenue streams to give some chance of riding out the tougher times.  

Storm had the option of changing over to cash but instead chose to stick it out and take all of their investors down with them


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## Julia (27 June 2009)

Iggy_Pop said:


> After reading this thread and linked documents for a few weeks, the problem with Storm seem to be
> 
> 1. Storm as a business was based on one financial model, a highly geared index fund
> 2. Revenue came in the form of upfront fees, trailing commissions and whatever other kick backs came back from margin loans etc
> ...



Excellent summary, Iggy Pop.



twiceshy said:


> .
> 
> To weed out the financial planning profession requires that those people need to sit for far more stringent examinations then they do at present, and that their practising certificates should be graded and limited to specific ranges of investment portfolios, i.e. a planner who advises on a million-dollar portfolio must hold a more advanced license than a planner who does the mum-and-dad stuff, etc. and would need to re-apply year after year under stringent conditions which would include further education, etc.  Maybe all this is already happening?  I do not know as I wouldn't use any of those guys (except as a doormat perhaps



Sensible idea.   The study and examination criteria for FP Licence has been discussed in other threads.  It's astonishingly minimal.  They are essentially salespeople, rather than advisers in any genuine professional sense.





Monario said:


> Tell me, how Hard do you think CBA worked for their 2.5bill profit? I dont think they did an honest days work to tell you the truth, and to raise interest rates a few days before announcing the storm deals they are making, Gee what a coincidence?



Monario, the tiny amount involved in that very small interest rate rise just on the interest owing by Storm clients, wouldn't even register on CBA's bottom line!  To suggest the rise had anything to do with Storm is simply ridiculous.
CBA have already stated that they will not be 'materially affected' by the entirety of the Storm debacle.

I'm really sorry for you and all the other people who are having to come to terms with this mess.  I don't think there would be too many people on this forum who haven't made a substantial mistake at some point in their learning experiences.   Best wishes for the future.


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## Julia (27 June 2009)

twiceshy said:


> Cutting to the chase on Colonial Mutual Margin Loan Terms and Conditions, paragraph 4.3 throiugh to 4.5 puts it all squarely on the borrower:
> _
> Notice of Margin Call
> 
> ...



So, we may assume that Storm clients signed over their responsibility to Storm it seems.
And we all know what happened after that.


Carey Ramm:  where is it determined that Bunyip holds the responsibility for comforting the Stormers?
As has been pointed out in the past, this is a forum, not a support group.

I have absolutely no wish to increase the misery of any Storm client, but I do get pretty annoyed at you coming onto this forum and telling people what attitude they should adopt.   A forum is a place for discussion, back and forth, pros and cons.  Any of us who put up a comment do so in the knowledge that someone else may criticise, disprove, or object to what we say.


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## Garpal Gumnut (27 June 2009)

Pindibog said:


> After I was sold out on 4/12 I found out I had been in margin call for 56days?? and let go to 107.5% Never contacted and I had the capacity to remedy it. Every time I contacted Storm they stated I was not in margin call...




And is the Inquiry run by Bernie Ripoll going to hear about this or will it just get the spin from SICAG about the banks being the only culprits in this fiasco?

gg


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## Quincy (28 June 2009)

*ASIC licensing hurdles lower than many realise*

25 June 2009 | by Lucinda Beaman 

The Australian Securities and Investments Commission (ASIC) has terminated less than 1 per cent of 4,811 financial services licences over the past two years.

According to media reports today, ASIC official Joanna Bird told the joint committee inquiry into financial services that the “minimum requirements for licensing were lower than some investors realised”.

“They may have a perception that if they have a licence, it's gone through ASIC and everything's all right," The Australian reports.

Bird said the two requirements licensees must meet are being “of good character” and “likely to comply with their licence conditions”.

Count chairman Barry Lambert warned earlier this year that the licensing regime employed by ASIC was too lax.

"The biggest problem in our industry, in my view, is our licensing system,” Lambert said at Money Management's State of the Industry forum in April. 


The Australian said ASIC will submit a chronology of events relating to its handling of the Storm Financial case to the joint committee by July 31, but has asked that it not be released to the public. The report will include when ASIC first received complaints against Storm Financial and what its responses were. 

http://www.moneymanagement.com.au/article/ASIC-licensing-hurdles-lower-than-many-realise/487883.aspx


I agree. The issuing of an AFSL by ASIC and the ongoing overseeing of the obligations associated therewith should be much more stringent. The current requirements for holding a licence and the monitoring of same by ASIC are currently much too lax. 

This matter of holding an AFSL should bring with it much more accountability / penalties along the way by ASIC (while it is in force). When (if) an AFSL is cancelled it is usually only after the subject company is at a point of no return, which of course is all too late then for investors.

If no AFSL then the company wanting you to invest with them can't operate.


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## carey ramm (28 June 2009)

Bunyip / Julia – the point I am trying to make is that there are a lot of views on this topic and I hope people like u will make a submission to the parliamentary enquiry. This is how u can make a change – all it takes is 1 hour of your time.

In terms of the stormers, of the many that I have come across, the majority’s main concern is that they don’t want this to happen to anybody else.

This is why they are making submissions to the parliamentary enquiry, knowing full well they will be open to criticism on forums like this, so that they can tell their story and hopefully bring about change.

And they have certainly copped their fare share of criticism on this forum.

They are also telling their story so that hopefully they can stop people like Storm and Co from doing this again to other people – so that people like ASIC can investigate this sorry tale fully. Without them standing up, Storm and Co will be free to do this again and again.

Many storm victims are still to embarrassed or distressed to go public with their story. Hopefully this will change with time. Hopefully known of them are your family or friends.


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## DocK (28 June 2009)

Garpal Gumnut said:


> And is the Inquiry run by Bernie Ripoll going to hear about this or will it just get the spin from SICAG about the banks being the only culprits in this fiasco?
> 
> gg




Totally agree!  I hope all of the ex-Storm clients who have experienced this type of treatment by Storm let both the enquiry and ASIC know (for what it's worth).

One phone conversation with one of the "higher-ups" at SICAG was enough to convice me that although they profess to be neutral, you won't see SICAG going after either the Storm directors or advisors any time soon.  It quite annoys me at times that SICAG are seen by the general public as representing *all* ex-stormers, when I suspect that quite a few of them hope to "use" the voices of the many to further the ends of themselves and their mates/family.  

It struck me as odd right from the beginning that their website contained only links to news releases about the banks, or E&J defending themselves, and not one single link to the many articles published that discussed last-minute dividends, failure to act on instructions, mysterious financial "loans" made to a select few of their clients from a company that was already insolvent, dodgy board meetings etc etc.  The disclaimer at the bottom of their website seeks to put a "neutral spin" on the group - but is hard to swallow when the entire focus of the site is on the banks alone!   

I hope I'm wrong, but have not joined as I don't wish to be used to further someone's agenda which is probably very different to my own.

I do feel, however, that a lot of people have gained much-needed information and support from being able to meet others in the same situation as themselves.  The emotional devastation felt by many following the loss of their lifesavings was exacerbated by the lack of reliable information to be had at the time.  SICAG do seem to have provided a support network for those that need it (and yes Julia, this forum is certainly *not* the place to come for support).  I will also grudgingly admit that the CBA may never have buckled under the pressure to examine its lending practices/procedures if not for the onslaught from SICAG and associated "friends-of-SICAG" - and I may eventually benefit from that


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## Quincy (28 June 2009)

http://senatormacdonald.org/data/ASIC Statement re Storm Financial 25 Feb 09.pdf


Part of the above statement that reads "*ASIC's powers are framed around a presumption of compliance by licencees . . . *" basically sums up the problem (in my opinion) with the current system that is being administered by ASIC.


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## twiceshy (28 June 2009)

Here is the latest news on the Madoff rip-off in the States.  It may serve as an inspiration for the Australian authorities:

QUOTE
*Madoff ordered to forfeit $210b assets*

US authorities are demanding Bernard Madoff forfeit over $US170 billion ($210 billion) in illegally obtained assets as they seek to keep the disgraced Wall Street mogul in prison for the rest of his life.

Three days before the financier returns to a New York courtroom tomorrow for sentencing after pleading guilty to one of the biggest, most complex financial scams in history, US District Judge Denny Chin authorised the confiscation of Madoff's gargantuan holdings.

"Bernard L Madoff is liable for a personal money judgment in the amount of $US170 billion, a sum of money representing the amount of proceeds obtained as a result of... offences charged in counts 1, 3, 4 and 11 of the information," the judge wrote, referring to the charges against the tycoon.

In an accompanying order the US District Court, Southern District of New York also stipulated that wife Ruth Madoff be stripped of $US85 million ($105 million) in assets, leaving her with just $US2.5 million in cash.

US authorities have asked for 150 years in jail for Bernard Madoff, 71, who is accused of defrauding billions from investors in one of the largest fraudulent operations of modern times, according to documents made public here.

"The scope, duration and nature of Madoff's crimes render him exceptionally deserving of the maximum punishment allowed by law," prosecutor Lev Dassin said in a memorandum.

He added that "a reasonable sentence in his case would be the guidelines sentence of 150 years or, alternatively, a term of years that both would assure that Madoff remain in prison for life and forcefully would promote general deterrence."

The former chairman of the Nasdaq stock exchange has been in jail since March after admitting guilt in the scheme, the biggest in Wall Street history and estimated to have involved around $61 billion ($75 billion).

Many of the investors were elderly retirees who thought their life savings were in safe hands.

Madoff told the court in March that of the billions of dollars which passed through his hands during his three-decade scam he never invested one cent in the market.

Instead he stashed the funds in a Chase Manhattan bank account.

The funds were then used to pay out "dividends" to investors in what is known as a "Ponzi scheme."

Prosecutors say about $US13 billion ($16 billion) were handed to Madoff.

- AFP

UNQUOTE


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## twiceshy (28 June 2009)

In response to the DocK #2188 post:

QUOTE
Twiceshy - I think you'll find that many regular posters on this forum have used borrowed money to invest in one form or another. Borrowing against home equity and margin lending are fairly common practices advocated by a plethora of financial planners - it's the level of gearing that can get you into trouble! I think you're a bit confused about what is short-term lending (presumably you mean margin lending by this?) and borrowing against the house - which was done on the same basis as any other home loan - we had a 25 year loan - hardly short-term. 
UNQUOTE

Well, DocK, I AM confused:  if you borrowed money against your house on a 25-year loan, how could you have been taken down?  That would have been no margin loan!

If I had taken a mortgage against my house and then taken the stash of money to my sharebroker and told him to buy 10,000 BHP shares with it at the top of the market at $50, I would still be holding the shares today, despite the shares having gone as low as $20 in the meantime.  Essentally, I could have spent the loan money on Iced Vovos and the lender couldn't have cared less because he was secured by the mortgage over my house.  

So, please enlighten me, how did you get taken down?  Was it because you didn't leave it at that but, having bought a Storm product (I refuse to call it an investment) with the proceeds from your house loan, you borrowed once again against the Storm product by way of margin loan?


----------



## twiceshy (28 June 2009)

carey ramm said:


> In terms of the stormers, of the many that I have come across, the majority’s main concern is that they don’t want this to happen to anybody else.




carey ramm, your view of the world is quite charitable.

And will you publish on this Forum the Margin Loan Terms and Conditions as they applied in 2008?


----------



## Pindibog (28 June 2009)

Garpal Gumnut said:


> And is the Inquiry run by Bernie Ripoll going to hear about this or will it just get the spin from SICAG about the banks being the only culprits in this fiasco?
> 
> gg




Yes he will hear and alot more..


----------



## twiceshy (28 June 2009)

Stormers, don't expect too much from our politicians.  They've just spent the last two weeks devoting all their waking hours to the OzCar (or RuddMobile) affair and a certain fake email while the rest of the world is going to hell in a handcart.  

You may have more luck with the newly-formed Australian Sex Party http://www.sexparty.org.au/  , who promise all their members and would-be-members a pleasurable experience "in keeping with our credo that member's needs always ‘come first’."


----------



## DocK (28 June 2009)

twiceshy said:


> DocK, point well made and point taken!  In fact, your previous 'rant' is very rational and, for what it is worth, you ought to make it a submission to the Senate.  That is, for what it is worth, because being the cynic that I am, I don't believe much will come of it.  It's just another 'being seen to be doing something' exercise.  In the end, maybe another layer of regulations which will ultimately be outwitted by another scheme.
> 
> It would be a pity that, after having learnt your lesson and paid for it so dearly, you turned your back completely on the capitalist system.  We all more or less got there the same way as you are getting there right now:  by trial and error!
> 
> ...






twiceshy said:


> In response to the DocK #2188 post:
> 
> QUOTE
> Twiceshy - I think you'll find that many regular posters on this forum have used borrowed money to invest in one form or another. Borrowing against home equity and margin lending are fairly common practices advocated by a plethora of financial planners - it's the level of gearing that can get you into trouble! I think you're a bit confused about what is short-term lending (presumably you mean margin lending by this?) and borrowing against the house - which was done on the same basis as any other home loan - we had a 25 year loan - hardly short-term.
> ...




Twiceshy - you seemed to have changed your mind overnight?  Perhaps you need to re-read my original post?  I have never claimed to have lost the lot and indeed I did retain part of my original investment.  I use the word investment as units in a managed fund run by Challenger that invest exclusively in the All Ords 200 certainly qualifies as an investment in most people's opinion - if not yours.  It has never been the nature of the investment that was questionable - and indeed it would have consisted of quite a few BHP shares, amongst other blue-chips that make up the top 200. 

Your original post led me to believe you were confusing a home loan as being short-term, in comparison to a margin loan which certainly could be.  I had both.  I had a comfortable level of gearing prior to the market downfall and did not receive a margin call - all of this is in my original post.  

As I have already stated (again in my original post) where I feel I was "taken down" - and I would prefer to use the words "misled" or perhaps even "deceived" was in the CBA re-valuing my home without my request using a highly questionable method and making that valuation available to Storm with the express intent to lend me more money - I relied on the valuation as being accurate and having been done on the same basis as prior valuations by a registered valuer in my area, who actually at least drove past my home.  The hand-in-glove nature of the relationship between the branch of the CBA and Storm operating together as a sales force is what I object to, as I had been given no reason to suspect that my advisor and my banker had any other than the usual arms-length business relationship.  The lending practices employed by some (if not all?) of the banks involved is where I feel let down.


----------



## twiceshy (28 June 2009)

Well, I just hope that after all these cataclysmic shake-outs, frugality will again become fashionable.  I have been practising it for years.  My wife has been badgering me about our trusty old TOYOTA Camry (model 1989, 380,000km).  She wants to trade it in because it has no CD-player, no power steering, no automatic window winder. Well, have I a surprise for her when she comes home!!!  http://www.youtube.com/watch?v=XVcbZbOqMR4


----------



## Julia (28 June 2009)

twiceshy said:


> In response to the DocK #2188 post:
> 
> 
> 
> Well, DocK, I AM confused:  if you borrowed money against your house on a 25-year loan, how could you have been taken down?  That would have been no margin loan!



Seems that you misunderstood what Dock was saying.



> If I had taken a mortgage against my house and then taken the stash of money to my sharebroker and told him to buy 10,000 BHP shares with it at the top of the market at $50, I would still be holding the shares today, despite the shares having gone as low as $20 in the meantime.  Essentally, I could have spent the loan money on Iced Vovos and the lender couldn't have cared less because he was secured by the mortgage over my house.
> 
> So, please enlighten me, how did you get taken down?  Was it because you didn't leave it at that but, having bought a Storm product (I refuse to call it an investment) with the proceeds from your house loan, you borrowed once again against the Storm product by way of margin loan?




Dock has clarified his/her situation.
But what you describe in your second paragraph is exactly what many Stormers did, i.e. took out a margin loan on the shares bought with the borrowed money of the equity loan in the house.


----------



## twiceshy (28 June 2009)

Julia said:


> But what you describe in your second paragraph is exactly what many Stormers did, i.e. took out a margin loan on the shares bought with the borrowed money of the equity loan in the house.




And all I can reply to that is "Boo-hoo."


----------



## DocK (28 June 2009)

twiceshy said:


> And all I can reply to that is "Boo-hoo."




Twiceshy - this forum is so enriched by the high quality of your posts - please continue to enlighten us with such insightful and wise words


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## twiceshy (28 June 2009)

I thought you might say that, DocK  

Incidentally, an archeological team has just uncovered 10,000-year-old bones and fossil remains of what is believed to be the first financial adviser - see below:


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## bunyip (28 June 2009)

carey ramm said:


> bunyip have u done anything to help any storm victims out? or have u just puffed around here making them feel like crap.






Have I puffed around making Storm victims feel like crap?
No.

Have I done anything to help Storm victims out?
Yes.

I've offered sound advice in answer to queries about how people can go about getting the knowledge and ability to mange their own investments.

I've been forthright in correcting your personal view that people would be fools to attempt to mange their own investments, and they should employ the services of a financial planner.

In various posts I've shown empathy towards Storm victims, by offering them sympathy and encouragement and attempting to make them aware that, wealth or no wealth, they can still lead decent and fulfilling lives.

I've attempted to bring some balance to a discussion in which many unbalanced views have been offered. 

I've been forthright in correcting the view that it was pure greed that got Stormers into trouble.

I've been forthright in correcting the view that it was all the fault of the banks.

I've stated, quite correctly, that Stormers need to accept their share of the responsibility if they're to come to terms with what happened, get some form of closure, and move on with their lives.

I've commended Stormers who've shown the character to give a balanced and realistic synopsis of the various aspects of the Storm debacle, including accepting some of the responsibility themselves.

Some will see some value in what I've said. Others will not. That's up to them.


----------



## chrisgee (28 June 2009)

Quincy said:


> View attachment 31299
> 
> 
> http://senatormacdonald.org/data/ASIC Statement re Storm Financial 25 Feb 09.pdf
> ...





quincy this is exactly as i see it all happening -everybody is ducking and weaving around things- if the good senator sees that the current framework is designed around assuming that all are acting and complying with the current legislation and NOTHING could have been done to stop what has just happened. we need a complete overhaul of the whole financial sector- in my mind investing with storm should have been just as safe as investing with the comm bank directly. it really peaves me reading people bagging storm investors- i think the main blame lies with a system that allowed this to happened in the first place- i repeat i am no financial genius so i go somewhere i believe that all is ok , above board, approved and licenced to operate etc. i should have a reasonable expectation that i should have faith the fin adviser i choose- they all should be of a reputable character and be trustworthy - why should those who chose storm be villified because of thier choice- im sure there is more to the whole saga and more will come out- i just hope it all does. i reckon there are people that no much more but have yet to speak up


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## twiceshy (28 June 2009)

This whole sad saga displays a total lack of honour.  Of course, not many people these days know the word - see http://www.youtube.com/watch?v=yGf6DBZg9So&feature=related


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## twiceshy (28 June 2009)

Quincy said:


> View attachment 31299
> 
> 
> http://senatormacdonald.org/data/ASIC Statement re Storm Financial 25 Feb 09.pdf




Did anybody read the rest of the thirteen pages?

QUOTE Margin loans are not regulated under the Corporations Act.  ASIC's ability to deal with mortgage and loan issues is limited, because these matters are ordinarily determined by the general law of property and contracts UNQUOTE

Quite!

It then considers if it should have taken steps to stop Storm's aggressive gearing model but concluded:

QUOTE Consider the difficulty of ASIC trying to close down an advisory model during 2006 or 2007 which was producing high returns for its investors. UNQUOTE

Exactly!  The same people who now bemoan their losses would have strongly objected to being shut out from such an obvious money-making scheme.


----------



## twiceshy (28 June 2009)

http://www.youtube.com/watch?v=pG2vZz7QULY

Food for thought!  And get the book and read it, slowly, one page at a time!  Go to http://www.alaindebotton.com/


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## twiceshy (29 June 2009)

A new week, a new beginning!  Let's start it positively by agreeing that from now on we won't use the word "victim" any longer.  It imprisons us!  Instead, let's call ex-Stormers "*potential multi-millionaires whose timing went wrong*."

The potential is still there! (or is it?)  If there is nothing wrong with high gearing and the Storm-model, and it was only the big, bad Banks who stuffed things up, well, let's recover past losses by starting all over again, but this time with a different Bank!  Go for it!


----------



## shibby (29 June 2009)

Is it just me or has anyone else noticed the similarities between Twiceshy and Onlooker it is uncanny. 
Onlooker decided to take his marbles and run on the 26th June and Twiceshy began posting on the 27th June, he/she obviously just can’t resist. 
Even the name could be a little clue. 
I decided I would read all their posts in one sitting and the similarity is amazing.
Are we allowed to submit under two different names? 
Does anyone know?. 
Can you imagine having a discussion with yourself?


----------



## Ironhalo (29 June 2009)

It certainly would appear that way. 

'I am superior to all because I get up at 11am and review financial news from New York and London....suck that Stormers!'

What is this mythical 'New York' and a small town called 'London' he speaks of?


----------



## Julia (29 June 2009)

shibby said:


> Is it just me or has anyone else noticed the similarities between Twiceshy and Onlooker it is uncanny.
> Onlooker decided to take his marbles and run on the 26th June and Twiceshy began posting on the 27th June, he/she obviously just can’t resist.
> Even the name could be a little clue.
> I decided I would read all their posts in one sitting and the similarity is amazing.
> ...



Joe uses stringent measures to ensure no poster can register two names.
If you feel you have a complaint, it would be more constructive to contact Joe directly about this than to post on the thread.


----------



## twiceshy (29 June 2009)

shibby, very flattering to think that you spent so much time researching my posts (and, I am sure, Onlooker, who- or wherever s/he is, thinks likewise, don't you, Onlooker?)  It gives me hope that my words have sunk in.

Now here's a thought:  wouldn't it have been nice if you had used those same analytical skills back then in 2008 to arrive at the conclusion that all easy-money schemes eventually come a cropper?  They always have and they always will - except for those that set them up!

Anyway, I may imitate Onlooker and pick up my marbles and leave you to it as I begin to find all this quite, quite tiring and I am suffering from grievance fatigue.

P.S. If you do want to control what is written and by whom about this whole sorry affair, then you may wish to start your *own* website.  Last time I looked, www.meaculpa.org was still available!  However, while you are on a public forum, you simply have to accept that other people may have other opinions.  That's what makes life so interesting!


----------



## shibby (29 June 2009)

twiceshy said:


> shibby, very flattering to think that you spent so much time researching my posts (and, I am sure, Onlooker, who- or wherever s/he is, thinks likewise, don't you, Onlooker?)
> Dont flatter yourself there appeared to be a trend
> It gives me hope that my words have sunk in.
> 
> ...




I do hope you leave this forum and never return but you won't your need an audience, and will take it anyway you can.


----------



## Ironhalo (29 June 2009)

Twiceshy, I have no idea what you are think you are contributing to this thread except some rather comedy-desolate links and four consecutive posts talking to yourself. In any other forum that would be considered trolling.

People made mistakes trusting a licensed financial company to handle something as pedestrian as the monitoring of an indexed fund. However, these people weren't Gordan Gecko-esque Wall Street cocaine addicts, they were on the whole unsophisticated retirees who got taken for a ride by a very slick Emmanuel Cassimatis, who just happened to watch the usually modest ASX200 enjoy 4 or so bumper years in a row before the rather large global market collapsed. Remember that, and show a little bit of respect as there are people in this forum who have had the harrowing job of trying to talk rifles out of people's hands, or talk people down from suicide.

For all your swagger about these people blaming (partially at least) the banks, then explain why someone close to me has just been offered a six figure settlement outside of court from one of the banks involved pertaining to some rather nefarious actions on the bank's behalf? I will say no more.

GG: In regards to your previous posts pertaining to SICAG and what/who they are linked to, I'll put my nose to the ground and see if I can suss anything out. My family is from Redcliffe, and my brother hears things through the local business grapevine up there. I'll see what I can dig up.

An interesting anecdote, apparently for a few years there Storm used to have their annual party at the Bullivant's Redcliffe mansion....my brother went one year and distinctly remembers seeing Andrew Symonds etc all drinking beers with EC. Seems like he had no shame in who he ripped off. Not that Andrew Symonds seems to have shame anyway...ahem....


----------



## awg (29 June 2009)

Julia said:


> Joe uses stringent measures to ensure no poster can register two names.
> If you feel you have a complaint, it would be more constructive to contact Joe directly about this than to post on the thread.





I dont think there is anything to stop you closing an account then opening another one.

A peek at the "members" list would suggest Onlooker is no longer a current member.

I could be wrong about that, of course


----------



## Garpal Gumnut (29 June 2009)

Ironhalo said:


> GG: In regards to your previous posts pertaining to SICAG and what/who they are linked to, I'll put my nose to the ground and see if I can suss anything out. My family is from Redcliffe, and my brother hears things through the local business grapevine up there. I'll see what I can dig up.
> .




Thanks Ironhalo, I don't have anything against the Stormers, one of them is a mate, (see first post) , but SICAG seem to have ignored the salesmen who got these poor buggers in to this schamozzle in the first place. Salesmen = Manny and all who advised at Storm.

If it helps you can access old Ozdaq.com.au and Cassimatis.com.au pages at THEWAYBACKMACHINE. Just google it. It shows all the parties and trips.

gg


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## Ironhalo (29 June 2009)

Rogue's Gallery?

http://web.archive.org/web/20070828...mfinancial.com.au/images/galleries/xmas/7.jpg

Sydney staff:
I laughed to see Bernadine has written 'JP Qual' next to her name....wow because you have to study a long time to be a Justice of the Peace!
http://web.archive.org/web/20070828212025/www.stormfinancial.com.au/off_syd.php

Brisbane (Redcliffe) staff:
Hold onto your hats, one of the guys did so well with clients that he was 'qualified for international conventions!' And here's me thinking that qualification consisted of talking EC/your boss into giving you a few days off to sit on a plane for a week long jolly?
http://web.archive.org/web/20070828211551/http://www.stormfinancial.com.au/off_red.php#terry

Brisbane (Nundah) staff:
One of the had a Diploma of Business. Hmmm....
http://web.archive.org/web/20070828211649/www.stormfinancial.com.au/off_nun.php

Brisbane (CBD) staff:
Very much the family affair it would seem.
http://web.archive.org/web/20070828211727/www.stormfinancial.com.au/off_bri.php

I'll see if I can cross reference any of these people with the SICAG members and see if we can draw any conclusions.


----------



## Ironhalo (29 June 2009)

Well O'Brien is a giveaway, he's the father of one of the Redcliffe 'advisors' (but we all knew that.)

Weir is mentioned here: http://business.smh.com.au/business...rom-threatens-banks-20090220-8dmm.html?page=4 
_
Either way, things ended badly for Weir. Nearly two months after acting on Storm's advice to liquidate all investments, he was contacted by Colonial on December 8 and told that he was in negative equity and owed them $80,000.

No margin call had been made at any time. It would be another month before Storm itself would collapse, but for its clients it was already over.

Strangely, many that the Herald spoke to are not blaming Storm and accept its official verdict that a "Black Swan" event was to blame rather than Storm's leveraged model._

The article also mentioned that he and EC were on the overseas trip together....could well be that they are friends. He doesn't seem to blame Storm for any of his financial gloom either.


----------



## Garpal Gumnut (29 June 2009)

Ironhalo said:


> Well O'Brien is a giveaway, he's the father of one of the Redcliffe 'advisors' (but we all knew that.)
> 
> Weir is mentioned here: http://business.smh.com.au/business...rom-threatens-banks-20090220-8dmm.html?page=4
> _
> ...




Yes, I have met many here in Townsville who swear by Manny. He is quite a charismatic guy.

So, he is either correct, then miscalculated and the banks are to blame or he is a narcissist who was wrong and still believes he was correct.

Either way many ordinary folk wouldn't know the difference and thus he has a very large following, even in SICAG.

Talk about Townsville is that he will set up again once he gets his FP licence back.

gg


----------



## Ironhalo (29 June 2009)

I just spoke to my brother and he gave me some rather nice info re: SICAG. He said he spoke to Weir some months ago regarding some information he got from his margin lender bank (Colonial) pertaining to Storm selling down his shares. 

My brother (despite sending in the authorisation to his advisor (O'Brien) to sell him down in Oct 08) got hold of an email from the Redcliffe Storm office to Colonial dated sometime in LATE Nov-early Dec (he wouldn't tell me the date as he didn't want to be quoted) that had his name and some other clients on it. Basically the email contained a list of names that Storm wanted sold down. Of course it was far too late at this stage. My brother was amazed from a privacy perspective that Colonial sent him a copy of this with OTHER clients names all over it (another example of how inept Colonial was/is in the whole incident), and felt that SICAG could use the info to get to the bottom of why if took Storm nearly two months to send the Margin Lenders an email. 

My brother said that he was told by Weir 'not to believe in the authenticity of the Email, as they (Colonial) could be making anything up'. My brother confirmed that is was legit and told Weir that it clearly showed that BOTH Storm AND the banks were at fault for the late selldown of the investments.

Weir's reposnse? 'That kind of thing doesn't help our cause mate.' My brother found that VERY odd.

I have no doubt that SICAG is a force of good intentions and support for Storm clients (I would be a cold hearted mongrel to think they haven't been a voice of hope and reason and even a lifeline for many Stormers), but it is abundantly clear that they have no intention of implicating their good friends Manny/Julie in the whole affair. As I said, I am sure there have been some interesting dinners being held at Belmont between the two SICAG chairs and the clandestine Cassimatis crew.


----------



## awg (29 June 2009)

Garpal Gumnut said:


> Talk about Townsville is that he will set up again once he gets his FP licence back.
> 
> gg





You are joking I assume?

I doubt he will be able to get an AFSL anytime in the forseeable future


----------



## Garpal Gumnut (29 June 2009)

Ironhalo said:


> I just spoke to my brother and he gave me some rather nice info re: SICAG. He said he spoke to Weir some months ago regarding some information he got from his margin lender bank (Colonial) pertaining to Storm selling down his shares.
> 
> My brother (despite sending in the authorisation to his advisor (O'Brien) to sell him down in Oct 08) got hold of an email from the Redcliffe Storm office to Colonial dated sometime in LATE Nov-early Dec (he wouldn't tell me the date as he didn't want to be quoted) that had his name and some other clients on it. Basically the email contained a list of names that Storm wanted sold down. Of course it was far too late at this stage. My brother was amazed from a privacy perspective that Colonial sent him a copy of this with OTHER clients names all over it (another example of how inept Colonial was/is in the whole incident), and felt that SICAG could use the info to get to the bottom of why if took Storm nearly two months to send the Margin Lenders an email.
> 
> ...




Thats extremely interesting. I wonder if the Inquiry will examine this. Probably not. 



awg said:


> You are joking I assume?
> 
> I doubt he will be able to get an AFSL anytime in the forseeable future




Seemingly he will get an AFSL. Its not all that difficult to get, and the way things are panning out, with the evidence to the inquiry by SICAG higherups, Manny will be very unlucky to even get a mention.

Manny is a lot smarter than many on this forum give him credit. 

And the politicians won't be all that keen to slice him up, they'd prefer to go after the banks.

So he'll have SICAG, some Stormers and the Pollies all asking him polite questions.

I might even go and see him meself when he sets up again.

When he starts off he makes a moxa for his clients, its only when the overseas trips start that things start to go bad. I doubt if Manny could handle Kazakistan, so I'll forgoe the Louis Quinze weekends and sip me VB at home in South Townsville.

gg

gg


----------



## awg (29 June 2009)

Garpal Gumnut said:


> Thats extremely interesting. I wonder if the Inquiry will examine this. Probably not.
> 
> 
> 
> ...




You may be correct about the AFSL.

I thought being bankrupt, trading whilst insolvent, or even "fit and proper person" conditions may apply, but I couldnt see them during a brief perusal.

Thing that may slow him up is the proposed tightening of the "advice for commission model."

btw, I dont doubt he is a very smart man.

just like Bernie Madoff.

I disagree that he will not be grilled, I would have many questions for him.

He was in charge, he cannot duck that, that is why Ralph Norris has had to cough up.

I would be absolutely astounded if it turns out he did not make some corporate regulatory slip ups under the pressure he would have been under


----------



## bunyip (29 June 2009)

awg said:


> You are joking I assume?
> 
> I doubt he will be able to get an AFSL anytime in the forseeable future




I wouldn't be so sure of that - although I do hope you're right.
Stranger things have happened.
It wouldn't be the first time a bunch of investors have been wiped out, and the bloke in charge of their investments got another licence, re-opened under a new name and carried on as usual.

Come to think of it, has he actually lost his financial planners licence, or whatever qualification or licence he operated under?


----------



## Garpal Gumnut (29 June 2009)

awg said:


> You may be correct about the AFSL.
> 
> I thought being bankrupt, trading whilst insolvent, or even "fit and proper person" conditions may apply, but I couldnt see them during a brief perusal.
> 
> ...






bunyip said:


> I wouldn't be so sure of that - although I do hope you're right.
> Stranger things have happened.
> It wouldn't be the first time a bunch of investors have been wiped out, and the bloke in charge of their investments got another licence, re-opened under a new name and carried on as usual.
> 
> Come to think of it, has he actually lost his financial planners licence, or whatever qualification or licence he operated under?




I agree with the tenor of what you guys are saying .

The stormers will lose and Manny in some other guise will get up again.


However I would ask you to consider the following points. 


1. SICAG never publishes any adverse press about Manny..never.

2. SICAG publish anything vaguely negative about the banks and their relationship with Storm.

3. SICAG never publish anything negative about the flawed Storm model.

4. The mainstream media have slagged off on Manny without causing a dint in his relationship with Stormers including many in SICAG.

5. The mainstream media thus far have not followed up on the relationship between some in SICAG and Manny, even though SICAG to their credit admit that relationship at the bottom of their site, where the money spider never goes!

5. Many Stormers not involved in SICAG or not higherups in SICAG, suffer a deep and intense shame over their losses and would not front the Inquiry.

6. Many of the Stormers may still believe in the "Storm Model" and feel done in by the banks.

7. The inbuilt biases and relationships of the members of the Inquiry are a bit of a wildcard.


Finally remember that if any of you lost as much dough as Stormers, SICAGERs and Manny, you would all probably behave in the same way as they do now.

gg


----------



## DocK (29 June 2009)

As I mentioned back in post #2215, one phone call to SICAG was enough to convince me that they won't be saying anything negative about E & J or any of the advisors, despite a poor attempt to appear neutral.


----------



## awg (29 June 2009)

my interest in this thread is mainly in the way the system works.

I havnt looked at sicag or that side

during the upcoming inquiry, hopefully a lot of hard questions will get asked.

it is supposed to be looking at systemic issues

I suppose I am naive in expecting that much change will come about

but one thing I am fairly sure of

the bureaucrat who signs off on Mannys AFSL would think long and hard before they put their x on the spot

there is no way he will come up smelling of roses


----------



## DocK (29 June 2009)

I was fortunate that my level of gearing was low enough originally that I didn't get a margin call - but from what I've read and heard it seems to me that one of the main causes of the losses incurred by many is the sheer size of the Cassimatis Ego.  I get the feeling that Manny thought he could practically dictate to the market itself, if not his lenders.  Whether Storm passed on sell instructions when given or delayed in the hope of a recovery or a "rescue package" from their lenders is something that I hope comes to light eventually.  It seems no-one wants to claim responsibility for pulling the trigger on a margin call - CGI seem to have been waiting for Storm to give the go-ahead, and Storm claim that it should have been CGI's responsibility and they didn't have the necessary data to make a decision.  I suspect nobody is being completely truthful and it's likely neither organisation had enough "bodies" to cope with the rapidity of events at the time.  

I was monitoring my own position as I'm a bit of a control freak and wouldn't have trusted my "advisor" to do it - he could never return a phone call promptly in calm times as it was.  However I had no idea until recently how many of their client base were retired.  Most of the "more mature" clients probably lacked a high degree of computer literacy and had been led to believe that E & J were practically their best friends and had been assured so often that the system was "crash-proof" they trusted in what they were told. 

I recall reading an article (or it may have been Bernie's submission) where Manny asked the planners who were still owed money to extend the terms of repayment so Storm could move the liability from "current" to "non-current" on their balance sheet prior to going to CBA for another loan to get some of his clients out of margin call.  This was as late as Nov or Dec 2008.  The fact that he expected to be given a further unsecured loan with the promise of repayment to come "when the market returned to its previous level" I think sums up just how deluded about his own power the man had become by then.  

The level of gearing I had was reasonably low, and I am of an age where I have enough working years ahead of me to recover - but I'm still shocked at the level of gearing he had a lot of his retired clients at.  Why he didn't convert indexed funds to cash in time to avert disaster is the main question that I think needs to be answered.


----------



## Mash (29 June 2009)

get over yourselves.... without sicag this thread would have finished long ago...the banks would have walked away smirking at those little old investors they managed to grind into the ground and would not have thought twice at the lives they have helped ruin and the suicides that would have eventuated..... sicag came about because the little guys decided they were not  going to be murdered and buried by anyone.... EC was by then exposed for thinking he was bigger than the banks and could play hard ball with the big boys... he wasn't and he couldn't..... the pieces of the puzzle came together..and by a calling to arms we have been able to at least have the wrongdoing looked at ..... without the banks EC could not have done what he did....they were partners in crime....EC and the banks equally liable..... you really are a bunch of conspiracy theorists aren't you... 
SICAG ... we will finish strong.
BTW...GG ... the critters on the sicag website are ants ( symbolically...one ant can be crushed many in unison can be very annoying.. enough to make the big boys move ... even admit wrongdoing maybe!!).... money spiders!!!!... wrong again GG....


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## Garpal Gumnut (29 June 2009)

Mash said:


> get over yourselves.... without sicag this thread would have finished long ago...the banks would have walked away smirking at those little old investors they managed to grind into the ground and would not have thought twice at the lives they have helped ruin and the suicides that would have eventuated..... sicag came about because the little guys decided they were not  going to be murdered and buried by anyone.... EC was by then exposed for thinking he was bigger than the banks and could play hard ball with the big boys... he wasn't and he couldn't..... the pieces of the puzzle came together..and by a calling to arms we have been able to at least have the wrongdoing looked at ..... without the banks EC could not have done what he did....they were partners in crime....EC and the banks equally liable..... you really are a bunch of conspiracy theorists aren't you...
> SICAG ... we will finish strong.
> BTW...GG ... the critters on the sicag website are ants ( symbolically...one ant can be crushed many in unison can be very annoying.. enough to make the big boys move ... even admit wrongdoing maybe!!).... money spiders!!!!... wrong again GG....




Mate , this thread was up and running long before SICAG was ever thought of, and also long before the Stormers realised what **** they were in.

So read on brother.

gg


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## Mash (29 June 2009)

GG...at least read the post before you reply..you display the same arrogance EC displayed.... did I say sicag started the thread....no..... yes you started the thread and had very little knowledge of what was actually happening ...that apparantly hasn't changed... 
If not for the likes of solly and carey there would be little substance to this thread at all....
BTW please refrain from referring to me as your mate or your brother.


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## -Bevo- (29 June 2009)

Garpal Gumnut said:


> Either way many ordinary folk wouldn't know the difference and thus he has a very large following, even in SICAG.
> 
> Talk about Townsville is that he will set up again once he gets his FP licence back.
> 
> gg




Oh dear, you mean we get to have a sequel someone said the circus would continue for manny years looks like that might come true, I'm curious though if the believers in manny and I take it almost all of them would have been completely ruined financially have little to no capital, were would all the new money come from to invest in his new scheme since I don't believe here in Townsville he would find any new clients other than financially wreaked ex stormers who still believe in him and think it was all the banks fault.
I know he is a great salesman but I just can't see it happening.


----------



## Solly (29 June 2009)

*"Bank of Qld urged to negotiate with Storm clients"*

"Clients of failed investment group Storm Financial are urging the Bank of Queensland to follow the Commonwealth Bank's lead and negotiate a settlement.

Storm Investor Action Group spokesman Mark Weir says the Bank of Queensland needs to offer some relief to clients facing debt and financial ruin."

From the ABC here;

http://www.abc.net.au/news/stories/2009/06/29/2610983.htm


----------



## Solly (29 June 2009)

Another two submissions of interest to the 
Inquiry into Financial Products and Services in Australia

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub107.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub108.pdf


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## Ironhalo (29 June 2009)

When is SICAG going to pressure Manny to sell 'Casa Paradiso' in Belmont and move into some more modest digs to enable him in his quest to 'fight for justice for my clients until the day I die'?

Oops.

Mash, SICAG are a great support line to Stormers, but you need to question why they refuse to even blame/implicate Manny into this debacle. As it stands, it appears that they are happily going for the bank's jugular, while ensuring Manny and Julie are kept out of it.


----------



## Julia (29 June 2009)

Garpal Gumnut said:


> Either way many ordinary folk wouldn't know the difference and thus he has a very large following, even in SICAG.
> 
> Talk about Townsville is that he will set up again once he gets his FP licence back.
> 
> gg






Mash said:


> get over yourselves.... without sicag this thread would have finished long ago..



That seems a rather arrogant assumption, Mash.   The debacle that is Storm is ongoing news.   We usually discuss newsworthy events of a financial nature.   

May I ask you one question?   Do you yourself blame Mr Cassimatis - or do you believe everything he suggested, all the strategies he advised clients to adopt - were perfectly fine, and all would have been entirely well had the banks not behaved badly?

It would be good to get this clear.


----------



## Garpal Gumnut (29 June 2009)

Julia said:


> That seems a rather arrogant assumption, Mash.   The debacle that is Storm is ongoing news.   We usually discuss newsworthy events of a financial nature.
> 
> May I ask you one question?   Do you yourself blame Mr Cassimatis - or do you believe everything he suggested, all the strategies he advised clients to adopt - were perfectly fine, and all would have been entirely well had the banks not behaved badly?
> 
> It would be good to get this clear.




Julia you are wasting bandwidth.

Our little mate Mash would not answer this.

gg


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## Joe Blow (29 June 2009)

The accounts Onlooker and twiceshy have been permanently suspended as they have been identified as being operated by the same individual.


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## Julia (29 June 2009)

Garpal Gumnut said:


> Julia you are wasting bandwidth.
> 
> Our little mate Mash would not answer this.
> 
> gg



Wouldn't she, gg?   You disappoint me.
I thought it fair to allow her the opportunity to make her position clear and perhaps even display some objectivity.   Let's hope she will rise to the challenge.


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## Ironhalo (29 June 2009)

That's the thing. It makes me sad to think that there are actually Stormers out there (myself being an ex-Stormer) who seriously believe that Manny/Julie had no part in this, and that 'effectively double mortgaging' the house was a safe and perfectly valid strategy.

In THEORY the Storm model was fine (like communism I guess!), but it should have been scaled back. There is nothing wrong with unlocking a safe amount of your home equity to invest, but the WHOLE thing + hundreds of thousands of dollars more? Insanity! I think it all started falling apart at the seams around Sep 08 when I noticed a lot more people getting phoned up (friends included) and told 'Hey guess what? We just found an extra lot of equity in your house! Let's borrow a crapload more oh, and look at that, we will be taking 6.6% out of that extra money you borrowed too...' Thank god none of my friends/close ones ever went through with that madness. Most of them are in a LOT better positions for not doing so.

What angers me, is that their blind belief in Cassimatis still to this day won't allow them to move on and take the life that is rightfully theirs. Manny is still washing his luxury car behind the gates of his mansion in Brisbane, and the fact his ego was deluded to such an extent that he started a website and hired a PR rep to try and make his image squeaky clean was enough for me to vomit.

Here's one for you valiant Stormers/SICAG zealots:

1. Why did EC/Julie let a company with billions on it's books have no adequate indemnity insurance?

2. Why was it reported (by Ron Jelich) that the cash holdings of the company were above $20 million yet a month later all of this had magically disappeared and the company was insolvent with a paltry $2 million in the bank? I'll hazard a guess and tell you where most of that went.....Geneva.

3. Why did Manny/Julie give themselves a multimillion dollar payment while their company was struggling in its death throes? Why did they sign one of Julie's rellies as a Director of the company to legally ensure that this was payment was made as quickly as possible in accordance with the law that states such a payment cannot be authorised unless there are more than 3 directors voting on it in the company? At that stage the only two directors of Storm were EC and Julie, everyone else had jumped ship or was pushed.

Yes, the banks stuffed up. But EC/Julie stuffed up harder. They were paid a LOT of money for their services.....it appears their greed got out of control, and the lifestyle they were funding spiralled out of control as well. 

I am sure Manny started out with good intentions, but in the end it was all about how much they could take. Manny knew the end was coming sooner or later, but by then his greed was too far gone. 

It should be his gates SICAG is smashing down, not putting your faith in two men who have obviously intrinsic/ulterior reasons to remain in Manny's good books.


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## maccka (29 June 2009)

Julia said:


> That seems a rather arrogant assumption, Mash.   The debacle that is Storm is ongoing news.   We usually discuss newsworthy events of a financial nature.




I think perhaps what Mash is suggesting here is that many of the events that have occurred over the last couple of weeks have only come about because of an absolutely dogged and relentless determination by the SICAG team.  

If SICAG had not been formed then it is likely that there would now be a very unorganized group of investors who could not have the collective power that they have now with an action group to work on the behalf of its members.

It is also likely that there would have been a lot more forced house sales and deaths.

Without this incredibly dedicated group of people a lot of the explosive evidence that will be revealed in the coming months would not have been uncovered and banks such as the CBA would not have made the statements they made last week.

There is an argument that many of the newsworthy events of a financial nature have for the most part come about as a result of the work of SICAG.

The parliamentary inquiry that is occurring is a DIRECT result of the good work of SICAG.   It is a simple thing to look back at the posts to this forum and see how many in recent weeks have come about as a result of people reading the submissions to this inquiry.  

Many of the reputable financial newspapers and journals are basing their articles on the research and work done by SICAG.  Why?  This group has made it their business to uncover answers related to this financial event.  They have nothing to gain by not investigating every possible lead.  Whether individuals on this forum (or other fora) believe it or not is irrelevant - SICAG is a reputable organisation with credibility in the places that it counts - with its members as well in the nation's parliamentary, legal and financial systems.  Yes - even with the banks who are becoming increasingly nervous about SICAG.



Julia said:


> May I ask you one question?   Do you yourself blame Mr Cassimatis - or do you believe everything he suggested, all the strategies he advised clients to adopt - were perfectly fine, and all would have been entirely well had the banks not behaved badly?
> 
> It would be good to get this clear.




I believe that over time many ex-Storm clients (and I am in contact with many many of them on a regular basis) are coming to the realization that things were not as they believed/expected in the Storm camp.  But most of the ones I talk to believe that Storm and the banks were in it together and that had the banks (particularly the CBA and its affiliates) not behaved as badly as they did most of the Storm clients would now be starting to come out of this situation.

Cheers
Maccka


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## Ironhalo (29 June 2009)

Well said Maccka. I can't knock SICAG's efforts in keeping Stormers sane and giving them some comfort and relief, I think they have a great thing going in terms of moral support.

I just can't fathom why they won't speak badly against Manny and Storm in general.


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## maccka (29 June 2009)

Mash said:


> SICAG ... we will finish strong.
> BTW...GG ... the critters on the sicag website are ants ( symbolically...one ant can be crushed many in unison can be very annoying.. enough to make the big boys move ... even admit wrongdoing maybe!!).... money spiders!!!!... wrong again GG....




Mash speaks the truth.  The critters are ants not spiders.  They are there for the benefit of SICAG members not necessarily for other people.  

As Mash suggested, it came about when SICAG members were at a bbq together and one was bitten by a fierce ant.  Thinking nothing of it he squashed it only to have it let off a pheromone in its death throws that caused hundreds of ants to swarm out of the nest and set to biting the big boy that squashed their fellow ant.  It did not take long before the annoyance of the mass of ants moved the SICAG members from their comfortable positions to somewhere else that the ants were much happier with.

They are one of a number of metaphors the SICAG members use to remember that the "little guys" can beat the "big guys".

Another metaphor is one of rust.  Rust is something that starts off very small but if left unattended to can sink a ship.

cheers
Maccka


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## maccka (30 June 2009)

Ironhalo said:


> I just can't fathom why they won't speak badly against Manny and Storm in general.






Garpal Gumnut said:


> However I would ask you to consider the following points.
> 
> 1. SICAG never publishes any adverse press about Manny..never.
> 
> 2. SICAG publish anything vaguely negative about the banks and their relationship with Storm.




I think this particular issue is one that will need time before it is resolved.  The SICAG committee is a committee of very clever and strategic thinkers.  You can bet they have a fantastic poker hand and have the cards close to their chest waiting for the perfect time to lay them down and expose critical information at a critical point.   

I don't claim to know the answer to this but you may find that it works to their advantage not to say anything until they have indisputable evidence.  Also, please remember that no-one is helped if they make claims about people that turn out to be libelous. 

Given the savvy nature of the SICAG committee I believe you will find that they are yet to have made an announcement about any person, business or organisation (website or otherwise) that is untrue.  You will also find that specific allegations can all be backed with evidence.



Garpal Gumnut said:


> 4. The mainstream media have slagged off on Manny without causing a dint in his relationship with Stormers including many in SICAG.




GG - I think that this is not right.  I think that EC and JC's cred has taken a serious dint.  If serious research was done, I think you would find that there are very few ex-storm clients (including SICAG members) who will publicly (and even privately) speak in favour of them.



Garpal Gumnut said:


> 5. The mainstream media thus far have not followed up on the relationship between some in SICAG and Manny, even though SICAG to their credit admit that relationship at the bottom of their site, where the money spider never goes!




Could you be a bit more specific about this please?  What sort of relationship do you believe exists between SICAG and EC/JC?  

I look at the disclaimer and I think it is pretty clear that the committee don't have a relationship with them.  Also, I think it is important to remember that "some members of SICAG may still have relationships with the Cassimatis' ..." does not equate to all members, most members or even many of the members.  It may mean only 1 or 2 members who have been vocal.



Garpal Gumnut said:


> 5. Many Stormers not involved in SICAG or not higherups in SICAG, suffer a deep and intense shame over their losses and would not front the Inquiry.




I don't really understand this comment.  Are you suggesting that all of the submissions to the inquiry from ex-Storm clients are from SICAG members?  Are you saying that people who submit to the inquiry are/have not felt deep and intense shame over the losses?  Are you saying that people should not be fronting the inquiry?  Are you saying that people might submit something in writing but then not show up in person if asked?  



Garpal Gumnut said:


> 7. The inbuilt biases and relationships of the members of the Inquiry are a bit of a wildcard.




Sorry GG.  I don't really understand this either (must be having a really bad night!)  Which biases and relationships are you referring to?  And shouldn't an inquiry go into any situation with a range of people who can look at the issues representing a range of views?  If one member of the inquiry is anti-banks wouldn't it be good to have another who was pro-banks?  Surely, there is no point going into an inquiry knowing what the outcome will be is there?  Otherwise the whole exercise is a terrible waste of time and money and emotional energy.





Ironhalo said:


> I have no doubt that SICAG is a force of good intentions and support for Storm clients (I would be a cold hearted mongrel to think they haven't been a voice of hope and reason and even a lifeline for many Stormers), but it is abundantly clear that they have no intention of implicating their good friends Manny/Julie in the whole affair. As I said, I am sure there have been some interesting dinners being held at Belmont between the two SICAG chairs and the clandestine Cassimatis crew.




What's to say that the dinners have been comfortable and pleasant affairs for the C family?  Maybe they were an information gathering exercise?  There are a lot of questions that need to be answered.  Sometimes you don't know the significance of some pieces of information until every player in a situation has been spoken to.  

I am yet to see any evidence that suggests that EC/JC are good friends with any of the SICAG committee or the great majority of SICAG members that I come into contact with.

cheers
Maccka


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## bunyip (30 June 2009)

maccka said:


> Mash speaks the truth.  The critters are ants not spiders.  They are there for the benefit of SICAG members not necessarily for other people.
> 
> As Mash suggested, it came about when SICAG members were at a bbq together and one was bitten by a fierce ant.  Thinking nothing of it he squashed it only to have it let off a pheromone in its death throws that caused hundreds of ants to swarm out of the nest and set to biting the big boy that squashed their fellow ant.  It did not take long before the annoyance of the mass of ants moved the SICAG members from their comfortable positions to somewhere else that the ants were much happier with.
> 
> ...




_They are there for the benefit of SICAG members not necessarily for other people. _

Maccka

Do you think it would benefit them if the were made aware of the fact that they were taken for a ride by Storm?
Without this realization (which many of them clearly don't have) isn't it possible that some of them may get duped again by another slick and dodgy salesman a bit further down the track?

Do you think it would benefit Stormers if they were made aware of the enormous risks they took by heavily gearing into such a risky investment vehicle as the stock market? (clearly some of them still haven't caught on to this fact, and some of the younger ones with years of saving and investing in front of them may therefore be destined to repeat their mistakes).

I'm all in favour of a support group - I'd definitely join it myself if I was a Stormer. But gee, I'd expect my group to tell me the full story and to go after *all* the people who are in the wrong, rather than to avoid any criticism of the organisation that was primarily responsible.


----------



## maccka (30 June 2009)

bunyip said:


> Maccka
> 
> Do you think it would benefit them if the were made aware of the fact that they were taken for a ride by Storm?




Hi Bunyip,

I am not an ex-Storm client although I have a large number of family and friends who were and am a member of SICAG.  Having said that... Yes - I do and I expect that when the time is right, if the evidence can prove it to the satisfaction of a court then I would like see it said publicly by SICAG.



bunyip said:


> Without this realization (which many of them clearly don't have) isn't it possible that some of them may get duped again by another slick and dodgy salesman a bit further down the track?




Yes - it is possible.  Not as likely as it was before this debacle but still possible.  Many people have learnt a lot of strong lessons through all of this.  I believe most ex-Storm clients and the people that know them (such as family - ppl like me) will be asking a lot more questions of the "experts" they engage with particularly in the financial/banking arena.



bunyip said:


> Do you think it would benefit Stormers if they were made aware of the enormous risks they took by heavily gearing into such a risky investment vehicle as the stock market? (clearly some of them still haven't caught on to this fact, and some of the younger ones with years of saving and investing in front of them may therefore be destined to repeat their mistakes).




Yes - I do.  I think this whole mess is so very confusing  for the individuals involved (and some of it well hidden by the institutions involved) that some people still don't know exactly happened to their portfolios.  I think time is teaching most people about the risks that they took.  

I personally believe the majority of the ex-Storm people I come into contact with understood that there were risks in their investment vehicles but believed that there were multiple layers of protection that would allow time to protect against the losses of their investment.  I also believe, that the great majority of people believed that their houses were not at risk due to the layers of protection.  

I also believe that there are a small number of people that had no understanding of any of the risks.  



bunyip said:


> I'm all in favour of a support group - I'd definitely join it myself if I was a Stormer. But gee, I'd expect my group to tell me the full story and to go after *all* the people who are in the wrong, rather than to avoid any criticism of the organisation that was primarily responsible.




Yes - quite a reasonable request.  As a SICAG member I do expect the SICAG committee to tell me the full story and go after *all * the people who are in the wrong *when the time is right.*  I expect the SICAG team to put their considerable intellect to work and use any legal means possible to uncover and expose the truth.  If this means they have to be a little bit silent at times (while they are working intensely in the background) and hold information back from a public (including with SICAG membership) arena for strategic reasons then I am prepared to wait as I know the results will be better for my family and friends if they act in a logical, strategically planned manner than a rushed and emotional one. 

They haven't publicly criticized EC/JC or even some of the advisers.  I am not privy to knowing exactly why this is but you can bet there is a very good reason.

Cheers
Maccka


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## bunyip (30 June 2009)

maccka said:


> Yes - quite a reasonable request.  As a SICAG member I do expect the SICAG committee to tell me the full story and go after *all * the people who are in the wrong *when the time is right.*  I expect the SICAG team to put their considerable intellect to work and use any legal means possible to uncover and expose the truth.  If this means they have to be a little bit silent at times (while they are working intensely in the background) and hold information back from a public (including with SICAG membership) arena for strategic reasons then I am prepared to wait as I know the results will be better for my family and friends if they act in a logical, strategically planned manner than a rushed and emotional one.
> 
> They haven't publicly criticized EC/JC or even some of the advisers.  I am not privy to knowing exactly why this is but you can bet there is a very good reason.
> 
> ...




Maccka

Yes, there will be  reasons why SICAG haven't criticised anyone from the Storm organisation.
I just hope those reasons are legitimate and all above board, and don't involve protecting mates and/or family who worked for Storm.

Thanks for your comments.

Bunyip


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## Farencue (30 June 2009)

maccka said:


> Hi Bunyip,
> .....Yes - quite a reasonable request.  As a SICAG member I do expect the SICAG committee to tell me the full story and go after *all * the people who are in the wrong *when the time is right.*  I expect the SICAG team to put their considerable intellect to work and use any legal means possible to uncover and expose the truth.  If this means they have to be a little bit silent at times (while they are working intensely in the background) and hold information back from a public (including with SICAG membership) arena for strategic reasons then I am prepared to wait as I know the results will be better for my family and friends if they act in a logical, strategically planned manner than a rushed and emotional one.
> 
> *They haven't publicly criticized EC/JC or even some of the advisers.  I am not privy to knowing exactly why this is but you can bet there is a very good reason.*
> ...





I hope your faith in SICAG will be rewarded for your family and friends' sakes Maccka.
I thought the reason they havent criticised "some" of the advisers is because those advisers are actually part of SICAG.
Here is a few gems I have located: the first one is called "Operation Willowbank" it is a cached page from the now defunct Storm website:

".....That's exactly what George Cassimatis and Redcliffe's Andrew O'Brien had to do in order to get the ever-busy Storm CEO Emmanuel Cassimatis out to the Jelich Jones Race Day at Willowbank Raceway this month.
The highly covert Operation Willowbank consisted of many lies and much deception with George and Andrew convincing Emmanuel that the reason they had him out of bed at 4.30am was to attend an important client breakfast at Redcliffe.
Unfortunately for George & Andrew, as soon as they started travelling south the motor-mad Emmanuel knew something was up.
The boys were forced to turn up the tales and only when they arrived at Willowbank did Emmanuel realise, much to his delight, the full extent of their trickery.
The morning consisted of six laps around the track at speeds reaching 170 km/h followed by a mind blowing hot lap behind the wheel of a V8 Super Car - under the guidance of a professional racing car driver of course!
On behalf of Storm Financial & Jelich Jones we would like to say a big thanks to Rod Dawson and the Rad Speed team for taking care of the crew."

aw how sweet, isnt Andrew the son of Noel O'Brien?

here is another one, found on a webpage of the Redcliffe Hospital Foundation:
"Today we were joined on the walk by Mark Weir a longtime client and friend of Ron's. Without any training [that we know of] Mark put in a courageous performance walking every step of the 30kms. That is a rare feat by any standards."

To some non Stormers such as myself, it certainly appears that some members of SICAG seem to be part of a trail that lead to Manny.  Their disclaimer is a red flag in my opinion.

It's heartening to see that Carey Ramm who posts here appears to play a major part in the Storm victims fight for justice.  

http://www.aecgroupltd.com/aecascent28/perspective.asp


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## Solly (30 June 2009)

*"BoQ told to get its act together"*

"The head of a parliamentary inquiry ......
Bernie Ripoll called on the chief executive, David Liddy, to "do the right thing" and said he would meet Mr Liddy soon to discuss the need for a genuine offer of help to all 319 Bank of Queensland customers affected by the Storm fallout."

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/boq-told-to-get-its-act-together-20090629-d2ie.html


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## Aussiejeff (30 June 2009)

Smiley said:


> I have talked to dozens of the stormfied and except for a small handful of ex-clients who are still in the throes of denial these stormfied have had common comments about the EC & JC - i.e. "crooks", "scum", "uncaring", *"hope they do jail time" . . . *.




One can only hope that after Madeoffs come-uppance last night, maybe some Cassimatis' might sleep a tad less easily until their own ju$tice is dealt?


----------



## Solly (30 June 2009)

In relation to the above few posts, one Stormer that I have spoken with has decided not to join SICAG. I didn't question why but I believe that they didn't wish to advertise the fact that they were impacted by the collapse and couldn't see any value for themselves in joining the action group.

But after some very rough, tough and emotionally debilitating times after their margin call, total investment loss and being thrown into quite large negative equity, they have picked themselves up and vowed to do "whatever it takes" to dig themselves out. Faced with the loss of their life's work, savings and cherished family home they have a fire in their belly to continue on with life and this "never say die" belief that they will recover. 

They are now very distrusting of many things, including the banks, financial advisers and do gooders. They realise they made the decision to go with Storm but regardless of who is to blame for the collapse, their only focus now is to get themselves back to a position where they are happy with their lives and financially secure. They are approaching an age where they should be looking towards a comfortable retirement. I know they have sort legal advice and are exploring that avenue as well. 

I can't predict what their final outcome will be but after seeing them come from a position of total inaction and devastation, to a position of exploring all avenues to improve their lot with unstoppable momentum, I will be surprised if the don't achieve some type of positive result. They are focusing on how to get themselves out of their position and are a great example of someone giving their all to overcome the adversity that they are facing.

I hope they read this forum and post their own version of events of what happened to them when their life was "Stormified"....


----------



## bunyip (30 June 2009)

Farencue said:


> I hope your faith in SICAG will be rewarded for your family and friends' sakes Maccka.
> I thought the reason they havent criticised "some" of the advisers is because those advisers are actually part of SICAG.
> Here is a few gems I have located: the first one is called "Operation Willowbank" it is a cached page from the now defunct Storm website:
> 
> ...





It's not too hard to work out why Noel O'Brien has stuck so doggedly to the Cassamatis line that the banks are to blame, and the economic meltdown and stock market crash were unprecedented events that nobody saw coming.


----------



## Hidden Agendas? (30 June 2009)

bunyip said:


> It's not too hard to work out why Noel O'Brien has stuck so doggedly to the Cassamatis line that the banks are to blame, and the economic meltdown and stock market crash were unprecedented events that nobody saw coming.




It seems that everyone is aware of the O'Brien relationship with Storm and what could happen to junior if findings are made against him. Any expectation of impartiality is laughable.

Of course Luke Vogel the IT guy from SICAG is a former Storm staff member.

Some other little known items of interest that I have gleaned from those who I understand are in the know:

1. EC was fundamental in the formation of SICAG and contributed funding to its formation;

2. Ron Jelich assisted in the funding of SICAG trips;

3. The Slater & Gordon/SICAG relationship is not as close as it is purported to be given SICAG were feeding information back info to EC;

4. SICAG members are openly stating that Manny is going to own the CBA when this is all finished; and

5. SICAG members are happy to recommend the services of a former Storm advisor who has been adversely mentioned.

SICAG have done some good work but its focus on the Banks to the exclusion of EC, JC and the other advisers is obvious for all to see.

For those former clients of Storm unfortunately it is not the White Knight but merely a front for the interests of EC & JC.


----------



## Ironhalo (30 June 2009)

Explosive stuff mate.

4. SICAG members in Townsville are openly stating that Manny is going to own the CBA when this is all finished.

I am curious as to what sort of 'ownage' he is talking about....ownerage in terms of the branches up North, or 'ownage' as per the videos on Youtube that depict people getting hurt in somewhat humourous ways ala Funniest Home Videos?


----------



## Garpal Gumnut (30 June 2009)

Ironhalo said:


> Explosive stuff mate.
> 
> 4. SICAG members in Townsville are openly stating that Manny is going to own the CBA when this is all finished.
> 
> I am curious as to what sort of 'ownage' he is talking about....ownerage in terms of the branches up North, or 'ownage' as per the videos on Youtube that depict people getting hurt in somewhat humourous ways ala Funniest Home Videos?




Its a bit like Alice in Wonderland.

The http://sicag.info site now has a Storm Financial logo in the top right hand corner where the money spiders live.

Weirder and weirder.

Manny is looking for a good outcome from the Inquiry and he may actually get one, so him taking over a large financial institution is not out of the question if he has the backing of SICAG. 

He would be entitled to a large payout for his losses and impugned character.

Maybe SICAG are not as silly as it seems, aligning with Manny may get their money back.

gg


----------



## Solly (30 June 2009)

*"CGI admitted systems were 'inaccurate': submission"*

"A client of a Securitor financial planner has used a submission to a parliamentary inquiry to allege Colonial Geared Investments (CGI) has admitted information it provided regarding its clients’ margin loan was “inaccurate” for a period of weeks during the share market meltdown last year."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/article/CGI-admitted-systems-were-inaccurate-submission/488499.aspx


And here is the submission;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub109.pdf


----------



## Solly (30 June 2009)

Another submission of interest to the 

Inquiry into Financial Products and Services in Australia

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub111.pdf


----------



## Garpal Gumnut (30 June 2009)

Solly said:


> Another submission of interest to the
> 
> Inquiry into Financial Products and Services in Australia
> 
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub111.pdf




If this lady's account, of her treatment by Storm, can be verified there may very well be grounds for criminal charges.

gg


----------



## Cosgrove Fenton (30 June 2009)

maccka said:


> I believe that over time many ex-Storm clients (and I am in contact with many many of them on a regular basis) are coming to the realization that things were not as they believed/expected in the Storm camp.  But most of the ones I talk to believe that Storm and the banks were in it together and that had the banks (particularly the CBA and its affiliates) not behaved as badly as they did most of the Storm clients would now be starting to come out of this situation.
> 
> Cheers
> Maccka
> ...




Hi all,
 (as told to them by Storm)  inserted by me in the above. 

It is as simple as this:

1. Storm (MC/JC/Jelich and co) hit upon an idea to supercharge an investment vehicle - aka gearing into shares. They get paid every time people add to this investment vehicle and whilst the vehicle is on the road. Giving Storm excellent profits.

2. To make the investment vehicle go quicker they pitch to the banks to make available stronger fuel  with larger petrol tanks (read loans/facility/ higher LVR ratios) outside of the normal unleaded fuel they sell. Banks (being profit driven institutions they are) provide the fuel (pats on back all round!).

3. People (in varying degrees) invest in these vehicles based on the following facts:
          - they like supercharged investment vehicles to get from a to b quickly (aka greed).
          - Storm gets them to buy a supercharged investment vehicle based   on it's safety record and perceived low risk (aka trust). Storm are salespeople.
          - some people are wood ducks and will never learn (aka wood ducks)

The investment roads get slippery - there is a crash!

The carsales people (read Storm) say their car is not at fault - it was the fuel (read Banks). The Petrol co (Banks) says it just supplied the fuel and has no duty of care to Roadworthy the Investment Vehicle. Main Roads (ASIC) had received complaints about dodgy unroadworthy cars but did not stop the car dealership from selling more.  

Summary
1. The cars were overpriced, unroadworthy and promoted by slick without morals salepeople. Blame Storm 80%.

2. Fuel Companies should at least checkout would they sell petrol to. 
Blame Banks 5%.

3. Drivers continue to take risks in poor conditions - some pay a heavy price.
Blame investors 10% (except wood ducks they will always be wood ducks and will never even know it).

4. Main Roads should have banned these modified death traps way before innocent people got hurt. Blame ASIC 5%

Storm will cry foul on the Banks to shift blame and avoid hard time and financial ruin. Question "whilst others have suffered in this Crash why are there way more Storm Victims with more serious injuries than any other vehicle?"

Investors will blame Banks as Storm as no money and you may as well chase someone who has got some dough to settle.


----------



## Solly (30 June 2009)

*"Storm loan agreements set to expire"*

"Pre-paid loan agreements at the centre of the Storm Financial investment scheme expire at the end of today."

More by Murray Cornish from the ABC;

http://www.abc.net.au/news/stories/2009/06/30/2612013.htm


----------



## Cosgrove Fenton (30 June 2009)

Garpal Gumnut said:


> If this lady's account, of her treatment by Storm, can be verified there may very well be grounds for criminal charges.
> 
> gg




This lady highlights the very thing that was "Storm" - I doubt the bank filled out her loan application....me thinks Mr Storm may have questions to answer, of course this sort of deception would have been a one off er sorry I mean "a black swan" event. 

Ps blame the banks!


----------



## Julia (30 June 2009)

maccka said:


> I think perhaps what Mash is suggesting here is that many of the events that have occurred over the last couple of weeks have only come about because of an absolutely dogged and relentless determination by the SICAG team.
> 
> If SICAG had not been formed then it is likely that there would now be a very unorganized group of investors who could not have the collective power that they have now with an action group to work on the behalf of its members.
> 
> ...



I'm not sure why you have become the spokesperson for Mash.  Clearly you're very pro SICAG and your information above is naturally biased.
That's fine.

I disagree that all that has occurred has been as a result of SICAG.
To assert this is to underplay the role of the financial press.

Anyway, I'm not especially interested iin SICAG.
But I am interested in how Mash personally regards Mr and Mrs Cassimatis.






Solly said:


> Another submission of interest to the
> 
> Inquiry into Financial Products and Services in Australia
> 
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub111.pdf



Reading through this submission, it's clear this person had misgivings about the advice she received at every stage.  Yet, against her better judgement she went ahead.   

This is the point I just can't get over.   It was clear to this lady that she was in way over her head, yet she persisted.

I feel very sorry for her.   It looks fairly obvious that Storm inflated her earnings and assets, and the bank failed to check this with her, such was the deliciously trusting relationship between Storm and the bank.

However, apart from that, it's clear that she herself was aware of the figures involved in every step of the increased borrowings, knew it was unsustainable, but went ahead anyway.

Hard to see why she is not responsible for the situation in which she now finds herself.


----------



## Garpal Gumnut (30 June 2009)

Julia said:


> I'm not sure why you have become the spokesperson for Mash.  Clearly you're very pro SICAG and your information above is naturally biased.
> That's fine.
> 
> I disagree that all that has occurred has been as a result of SICAG.
> ...




There are Manny believers about, in large numbers, and they will ensure he rises again in a bigger and better Storm.

I'm actually starting to get a sneaking admiration for Manny, reading some of the posts on ASF.

His Storm logo is back on the SICAG site, and no politicians have said boo to a monkey about him.

He may actually come out of this intact and start off again.

gg


----------



## bunyip (30 June 2009)

maccka said:


> Hi Bunyip,
> 
> I am not an ex-Storm client although I have a large number of family and friends who were and am a member of SICAG.
> 
> ...




Maccka

Why join SICAG yourself if you're not an ex-Storm client?


----------



## Ironhalo (30 June 2009)

You could be right GG.

The appearance of the Storm logo on the SICAG site is quite strange.

And Bunyip....that's a bloody good question.

How about it Maccka? Why pay $50 to join something that you have no need to?


----------



## Anastasia (30 June 2009)

I too would like to know why the Storm logo/ business card is at the top of the SICAG web site given the disclaimer at the bottom of the very same web page: 
"SICAG does not have an affiliation with E.and J. Cassimatis and there is no influence being made on committee decisions by the directors of Storm Financial et.etc."  

Please explain.......


----------



## maccka (30 June 2009)

Ironhalo said:


> You could be right GG.
> 
> The appearance of the Storm logo on the SICAG site is quite strange.
> 
> ...





Hi Guys,

Re - the logo on the SICAG site...

I suspect it is there not to show support for Storm Financial but to show a little irony and use their (SF) own slogan to show the emotion that people are feeling.  The members of SICAG are pretty cranky and have been sending out warnings for months now.  

Re - the bloody good question... 

That's really pretty simple to answer.

I see it as a way to support people who are supporting my family and friends.  I see it as a way to start to find out what happened.

I am certainly pro-SICAG (have never pretended not to be).  I don't believe (as some members of this forum do) that there are sinister links between SICAG and others.

I don't think I have a problem with ex-Storm staff (advisors or others) being members of the group.  They have also been devastated (financially and emotionally) and I suspect that they are a very valuable (and probably very willing) source of information. 

Storm traded on relationships.  It encouraged advisors/staff to be friendly with clients.  It encouraged potential clients to talk to current clients to learn about the products/process.  One of the outcomes of the amazing Storm trips were the firm friendships that were formed by the people traveling together.  It used these relationships to build its business.  In many ways it is a clever marketing and business strategy.  "Word of mouth is the best advertising".  It also contributed hugely to the devastation of whole communities of people eg small towns like those on the Atherton tablelands and regional cities.

The firm friendships and networks that ex-Storm clients created are one of the very few remaining positives that exist for many.  To be connected with others experiencing similar feelings is an important way to overcome the adversity you are facing.  Knowing you are not alone and that you can talk to others who really truly understand is an important part of healing and moving on.  

SICAG works as a group because it is built on these relationships and common experiences.  It's one of the reasons the social events (that some on this forum like to "poo poo") are an important part of the group's culture. It has taken this positive aspect of the Storm culture and applied it to their own advantage in building an organisation that is strong enough to ask tough questions and not be afraid of loud distracting squeaks in the public arena, bullies and isn't being sidetracked by red herrings.

For the record - I am not an EC or JC fan.  I am not an EC or JC hater either.  I am happy to ignore the court of public opinion on this and wait to hear what really happened backed by evidence and not conjecture before I make up my own mind.  

I am too busy trying to help friends and family (and ex-Storm clients including SICAG members) to waste energy on being either a "Manny believer" or a "Manny hater".

Cheers
Maccka


----------



## maccka (30 June 2009)

Julia said:


> I'm not sure why you have become the spokesperson for Mash.  Clearly you're very pro SICAG and your information above is naturally biased.
> That's fine.




Hi Julia,

I'm not trying to be a spokesperson for Mash or SICAG.  I am just expressing a view like other people on this forum.  Yes - it is biased towards SICAG but in many ways I believe it is actually quite open to a range of possibilities.



Julia said:


> I disagree that all that has occurred has been as a result of SICAG.
> To assert this is to underplay the role of the financial press.




I didn't actually say that I believed that ALL that has occurred has been as a result of SICAG.  I said "many" and "for the most part".

_There is an argument that many of the newsworthy events of a financial nature have for the most part come about as a result of the work of SICAG._  (Should have multiquoted - Sorry)

I certainly didn't intend to underplay the role of the financial press as they have been a *very important part* *even critical part *of getting the message out.  What I was trying to say was that many of the very reputable articles put out by them are using the research (whether it is referenced in the article or not) done by SICAG.  The journalists obviously have the ability to research further than SICAG's work and they do.

cheers
Maccka


----------



## Solly (1 July 2009)

Inquiry into Financial Products and Services in Australia
Public hearings and transcripts

Details are here;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/index.htm


Canberra 24/06/2009 transcript is here;

http://www.aph.gov.au/hansard/joint/commttee/J11928.pdf


----------



## Smiley (1 July 2009)

We know what really happened, ego driven by a gambling attitude was instrumental in the downfall of EC and Storm (i.e. it was well known that EC, Jelich, Royes and other advisers in Strom had a penchant for heavy gambling - just look at the $10,000s thrown away on the European and African trips in gambling at the casinos). EC seems to have had an inflated ego and thought: the share market would not keep dropping, and even if it did the banks (esp CWB) would carry Storm, and even if it didn't he could start again - as he had when things went bust in the 90s. To not acknowledge his role in the downfall of Storm and the way people were mainpulated to take out big loans in the second half of 2008, is to be an apologist for a crook.


----------



## Solly (1 July 2009)

maccka said:


> Storm traded on relationships.  It encouraged advisors/staff to be friendly with clients.  It encouraged potential clients to talk to current clients to learn about the products/process.  One of the outcomes of the amazing Storm trips were the firm friendships that were formed by the people traveling together.  It used these relationships to build its business.  In many ways it is a clever marketing and business strategy.  "Word of mouth is the best advertising".  It also contributed hugely to the devastation of whole communities of people eg small towns like those on the Atherton tablelands and regional cities.




maccka, this is one thing that amazed me, referrals that were made to family, friends, neighbours, work colleagues, etc.. I suppose this is just the basic human behaviour of wanting to assist and share something that is perceived to be good..


----------



## maccka (1 July 2009)

Solly said:


> maccka, this is one thing that amazed me, referrals that were made to family, friends, neighbours, work colleagues, etc.. I suppose this is just the basic human behaviour of wanting to assist and share something that is perceived to be good..




I'm sure that this is what it is.

cheers
Maccka


----------



## Kez180 (1 July 2009)

Garpal Gumnut said:


> If this lady's account, of her treatment by Storm, can be verified there may very well be grounds for criminal charges.
> 
> gg




Yeah, it would make my day to see the storm crew go to jail...


----------



## gagaga (1 July 2009)

hehe


----------



## Judd (1 July 2009)

Been reading the submissions to the parliamentary inquiry.  Some of those make you weep.  Not only at the devastation wrought upon people but also weeping in frustration at the foolish actions displayed by supposedly mature adults.  

One example is a person with public and private work experience essentially signing blank mortgage documents.  How how how could you do that when the person's work experience would involve at some level and some stage the need to exchange contracts?  Just hand a signed blank copy to the counterparty and hope they complete it properly?  Beyond belief.  Storm must have had an absolute wow of a sales pitch, almost cult like.  Don't know how you prevent people from following false Messiahs.

Insistence that something be done to "protect us from ourselves."  Why?  I don't want the level of protection they probably envisage.  How?  Enact legislation making stupidity and greed illegal?

Expectations that lenders should offer advice.  Hmmm, maybe but the next step is to insist that your mortgagor be required to provide advice if you wish to redecorate your home before selling in order to improve the sale price.

And for goodness sake these witness to the Committee.  Still mixing up LVR versus gearing and the whole damn lot implicitly assuming that every person living in this country wants or needs financial advice.  I have no wish to go near a financial adviser and yet the inference is that I should be forced to.

Grrrr.  Flucking nanny state from that aspect.


----------



## tasmart (1 July 2009)

Solly said:


> Inquiry into Financial Products and Services in Australia
> Public hearings and transcripts
> 
> Canberra 24/06/2009 transcript is here;
> ...




It is interesting reading this and will be even more interesting to see the result. There seems to be a focus already on the low level of education required to become a "Financial Adviser" as well as a lot of discussion about the complexity of renumeration and relationships between advisors, products and financiers.

Unfortunately it is likely to be some time before anything results and it is probable that it will lead to a more complex (and more expensive) regulatory system - which (cynically) means punters will need to pay more to lose their money.

I have read a lot of the submissions and find them heartbreaking. I can imagine how the 'victims' feel, especially as many seemed to start from a relatively secure and financially responsible position ........ but were lead astray.


----------



## Julia (1 July 2009)

Judd said:


> Insistence that something be done to "protect us from ourselves."  Why?  I don't want the level of protection they probably envisage.  How?  Enact legislation making stupidity and greed illegal?
> 
> Expectations that lenders should offer advice.  Hmmm, maybe but the next step is to insist that your mortgagor be required to provide advice if you wish to redecorate your home before selling in order to improve the sale price.
> 
> ...




Yep, Grrrr, from me also, Judd.  I'm fed up with the need to legislate for the lowest common denominator.  Just hate the nanny state stuff.


----------



## Kez180 (1 July 2009)

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub115.pdf

ASF, of parliamentary fame...

(Bottom of page 9)


----------



## Fatcat (1 July 2009)

Kez180 said:


> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub115.pdf
> 
> ASF, of parliamentary fame...
> 
> (Bottom of page 9)





Very very sad indeed. I'm staggered Manny has the audacity to show his face in public. They mustn't sell baseball bats in Townsville.


----------



## Solly (1 July 2009)

*"Bank of Queensland reveals Storm exposure"*

"Litigation over Bank of Queensland's (BOQ) involvement with the failed financier Storm Financial could substantially eat into the bank's profit just as losses from bad debts peak."

More from AAP in The Age...

http://business.theage.com.au/business/bank-of-queensland-reveals-storm-exposure-20090701-d549.html


----------



## Garpal Gumnut (1 July 2009)

maccka said:


> Hi Guys,
> 
> Re - the logo on the SICAG site...
> 
> ...




Perhaps Maccka, you can explain the following from the SICAG site.

It is advice on the left lower border of the site which reasonably advises victims of the Cassimates and the Banks to avoid predatory financial advisers. Then it gets interesting.


The last sentence advises people not to pay for advice but rather to pay as they go for financial products, as they did with Storm. I've emboldened the relevant advice. It seems like a vote of confidence in the Storm model.

I believe the industry is totally against this, as the fees charged induce the planners to rope in more mugs into products the advisers profit from.



> Whilst we can and will use revenue that we can generate from this site to assist us in our fight, the Committee has decide not to allow financial planning firms or other parties with vested interest to advertise here. It should be obvious that whilst some approaches have been genuine, others are clearly predatory.  It is NOT in the best interests of SICAG or its members to allow such predation. Those of us who would like to obtain independent financial advice should contact the FPA for a suitable list of advisers.
> 
> Be aware that we have received communications from some members who have been charged large sums of money for essentially useless advice or a simple explanation of their circumstances.
> Before you commit to anything, ask about fees!
> *Remember, the Storm Fees model charged nothing for discussions until something was actually done.  Most of the financial planning industry charge fees for each appointment regardless of outcome!*




gg


----------



## Solly (1 July 2009)

Another submission of interest to the

Inquiry into Financial Products and Services in Australia;


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub116.pdf


----------



## Garpal Gumnut (1 July 2009)

From the SICAG site.

They have taken down the Storm advertisement.



A Storm is Coming! …




> Some people have confused the graphic that was here as being a business card for Storm Financial.
> 
> 
> 
> ...




And still no mention on SICAG of Manny or Storm stuffing up. 
Maybe it never happened.

gg


----------



## Solly (1 July 2009)

Here's a link sent to me, 

It's is a written interview with EC by Kristen Paech from Professional Planner on 06 February 2009. 

http://www.professionalplanner.com.au/current-issues/interview-with-emmanuel-cassimatis-from-storm-financial.html

I'm tending to agree with gg, it's not the last we'll see of EC in the financial arena.


----------



## Garpal Gumnut (1 July 2009)

I would bet London to a brick that Manny will be back, as large as life, with his old mates pushing away for him in the background, in prominent positions in the new Storm.

He's smarter than anyone, smarter than SICAG, smarter than the Inquiry, and smarter than anyone on ASF.

He'll survive.

gg


----------



## Ironhalo (1 July 2009)

Tin hat firmly in place lads, why is that after this last few days of 'conversation' on this forum regarding SICAG's priorities, and the appropriateness of having the Storm logo on its website, that it is now inexplicably removed?

Coincidence non, tout le monde?


----------



## Julia (1 July 2009)

Solly said:


> Here's a link sent to me,
> 
> It's is a written interview with EC by Kristen Paech from Professional Planner on 06 February 2009.
> 
> ...



And if the continued reluctance to blame Manny as evidenced on this thread persists, he'll have no trouble in acquiring new clients for the new firm.

That interview (though it's noted he wouldn't agree to actual interview but just provided written answers to questions) is pathetic.

The comments which followed were interesting, and I especially noticed this:



> (4) If the CBA would have come to the rescue this time. How long would this have taken to repay, on top of the other outstanding loans. As a CBA shareholder I say well done CBA.




Very good point, huh.


----------



## Farencue (1 July 2009)

Excellent point Mr gg - why would you even say ANYTHING positive about Storm at all on the SICAG site?

I wonder if anyone thinks that SICAG is just a front, setting the stage so to speak for the next chapter in Manny's adventures.  Are the genuine wood ducks being set up to be, what is known in scamspeak,  "reloaded"?

And Mash, I find it hilarious that you come on here and say without SICAG this thread wouldnt exist.  I dont think you and a few others here who act as apologists are the wood ducks at all.

Ironhalo, yes I do think the SICAG people who troll this site probably thought the Storm logo was a tad obvious, wonder if they will act upon gg's sharp eyed observation?

Yes, it stunk from the beginning and the sharks are using the clownfish to further their own purposes.
Are you paying attention Chrisgee?

One last thing, the submission that mentioned this forum - you have got to be kidding, what sort of credibility does this person think that lends him?
I note the same submission mentions also "the gagging of storm".
What a load of bollocks!


----------



## Steve Borden (1 July 2009)

The sole reason this thread exists is due the high risk, one size fits all advice model of Storm. In the middle of that is the lenders and the fund managers who got swept up in the fee factory that was Storm.

It begins and ends with EC & JC and their sales people.

The positioning of the model as being low risk was a nonsense and the way they sold it as being a lesser risk than not doing anything was a con. 

I have a great deal of sympathy for those who have lost it all and now face an uphill battle to live in retirement, I can't subscribe to a need for the use of pejoratives to describe them though. A great majority of these people thought they were doing the best for themselves and their families and they deserved better.

To be sold a strategy that saw an 18 year old student get the same as a 75 year old can't be called advice and breaks every fundamental of Financial Planning.

To be clear, Storm and its sales people were not planners, they made no assessment of an investor's situation other than how much debt their properties could bear and structured the investment around that. For that they charged 7%.

This whole debacle was a timebomb waiting to happen and its about time people understood that unless the market grew every year at at least 10% they were getting nowhere, sure the gross assets were increasing but so was the debt. Anything less and the model was cannibalising their net equity.

With regard to the 'gagging of storm', of course ASIC told the sales people not to provide 'advice'. In light the absolute garbage they had been telling clients to that point who knows what they would have said. 

Stuff like we do the worrying for you or you won't lose your house or EC has a 'special' relationship with the Banks or its all a big mistake and Storm are suing the CBA and they will win or there are people much worse off than you or I am in the same boat. Not sure how that would have done anything but make the position worse. 

Not Black swan, Wayne Swan, The New World Order or any other conspiracy, just mums and dads getting dudded by a pea and thimble merchant and his acolytes.


----------



## Farencue (2 July 2009)

Steve Borden
I would be very interested in your opinion on why SICAG have not said a peep about "the Manny method" if you are so inclined.


----------



## Solly (2 July 2009)

*"Bank of Queensland may be hit by Storm Financial fallout"*

"BoQ has a total lending exposure of $105 million from 319 Storm Financial clients - $20 million more than the bank's interim 2009 cash profit."

More here by Alison Bell in The Courier Mail;

http://www.news.com.au/business/story/0,27753,25721481-462,00.html


----------



## Solly (2 July 2009)

In a previous post sometime ago I believe it was asked if the Storm principals followed the same strategy of investment as the clients.

In an article by Tony Raggatt in the Townsville Bulletin on January 7 2009, the questioned is asked; 

"Is your house mortgaged and the funds secured against it invested and leveraged with margin loans?"

The answer is, "Yes."

The link to the full story is here;

http://www.townsvillebulletin.com.au/article/2009/01/07/31725_hpnews.html


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## Steve Borden (2 July 2009)

Farencue said:


> Steve Borden
> I would be very interested in your opinion on why SICAG have not said a peep about "the Manny method" if you are so inclined.




Farencue

I and many others have likened Storm to a 'cult'. There are several similarities such as a supreme leader who was all-knowing, a group of very unsuspecting followers who were separated from the rest of the community by being told they were special and we (the rest) were the herd. They fostered inclusive, group activities which reinforced their 'specialness' to the point the belief was so strong in the model who were trying to remove funds in late 2008 were actually convinced to put more in.

That being the case there is a significant proportion of the clients who would rather believe that is was all the Banks fault and not that of the model because of the belief and faith in EC and less so JC (she is not the messiah just a millionaire hunter).

Don't get me wrong the Banks and the Margin Lenders contributed to this in a large way but they didn't start the timer without an exit strategy.

In answer to your question though I think there are a few reasons why SICAG are not going 'hard' on EC and the rest:

1. This aforementioned belief in the model and EC;
2. If EC said it was so then it must be so;
3. A view that there is little point in pursuing EC & Storm given they have no real money while the Banks have very deep pockets; 
4. Some very deep and complex relationships, which should be placed on the record for the purposes of transparency; and
5. A lack of understanding why it all failed, ie if your house burned down that is easy to explain, with this issue there are many known unkowns and unknown unknowns, which then lead to conspiracy theories.

Do I think EC will make a comeback the answer is yes, do I think the SICAG guys are protecting shielding him from criticism my view changes quite regularly. 

The guys from SICAG are good hearted people who have donated a lot of time to helping others but they are now not the main game, now that S&G and the politicians are involved this will  be taken down a path that SICAG can't control. SICAG did however create the enviroment for these parties to become involved.


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## Steve Borden (2 July 2009)

Steve Borden said:


> Farencue
> 
> I and many others have likened Storm to a 'cult'. There are several similarities such as a supreme leader who was all-knowing, a group of very unsuspecting followers who were separated from the rest of the community by being told they were special and we (the rest) were the herd. They fostered inclusive,  group activities which reinforced their 'specialness' to the point the belief was so strong in the model who were trying to remove funds in late 2008 were actually convinced to put more in.




I meant ...exclusive, group activities....

Too late to edit.


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## Smiley (2 July 2009)

With all the judgments and moralising it is good to read Steve Borden's balanced assessment.  

RE SICAG, it has kept the issue of Storm alive, there is not contact and there has been no financing of it by EC and JC (I sought reassurances before I joined and I do believe Mark and Noel - they are perhaps naive at times but well meaning and they have a focus on justice for the stormified). And as Steve has explained, more eloquently than I can at the moment, there are many layers to this whole debacle and relationships are complex.

I do not believe EC will arise from the ashes of storm and if he does, myself and my friends will make sure he is picketed, shamed in the media and kept under our spotlight.


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## Farencue (2 July 2009)

Thanks Steve, your opinion is appreciated.


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## bunyip (2 July 2009)

Farencue said:


> Excellent point Mr gg - why would you even say ANYTHING positive about Storm at all on the SICAG site?
> 
> I wonder if anyone thinks that SICAG is just a front, setting the stage so to speak for the next chapter in Manny's adventures.  Are the genuine wood ducks being set up to be, what is known in scamspeak,  "reloaded"?
> 
> And Mash, I find it hilarious that you come on here and say without SICAG this thread wouldnt exist.  I dont think you and a few others here who act as apologists are the wood ducks at all.




Yeh well, poor Mash is out of touch with reality - again. She comes on this forum, full of fire and arrogance and bad manners, but has a tendency towards slinking away with her tail between her legs whenever confronting questions are put to her.
She forgets that GG started this thread back in October 2008, long before SICAG was even thought of. It's been going strong ever since, and would continue going strong even if SICAG was disbanded tomorrow.

I have no doubt that Manny will be back in the financial advisory business in one form or another. And I have no doubt that some of his new clients will be former Storm clients. It's clear that some Stormers still regard him as the Messiah and would follow him to hell and back. Some people just never learn.

As for SICAG being a front to set the stage for the next chapter of Manny adventures - that's an interesting thought.
Their behaviour does raise the question - is there an agenda of deflecting the heat away from certain people who were part of the Storm organization?

I see Manny is sticking to his claim that it was all someone else's fault. I wouldn't be surprised if people referred to him as  'un-Manny', as there's nothing manly about someone who continues to shirk all responsibility for a disaster in which he was a central player. 
It must be extremely vexing for the more clear-thinking Stormers to continue hearing Manny repeating the same old lines about how the market slump and economic meltdown were unprecedented, and how the banks are to blame. 

For anyone who believes the rot that this market slump was unprecedented, here's a brief synopsis of the 2008/09 crash and also the 1987 crash.
2008/09 crash....All Ords down 56% in 16 months. 
1987 crash...All Ords down 25% in one day, and 50% in 7 weeks. 

It's clear that the 2008/09 slump was a relatively sedate affair compared with the brutal market plunge of 1987.
Manny and Noel O'Brien, please take note - remember this next time you're tempted to dish out inaccurate claims about how the current market crash was unprecedented.

*Question for EC*...How do you think your brilliant Storm model would have fared in 1987?
_*Answer*_...It would have fared no better than it fared in 2008.....there would have been the same margin calls, the same foreclosures, the same disaster that played out this time around.

Given the inept performance of Storm Financial in protecting their clients from a completely avoidable disaster, it must be particularly galling to thinking Storm victims to see Storm portrayed as a competent organisation with a conservative investment model, all above board and squeaky clean and smelling like roses .
I use the term 'thinking Storm victims' in reference to those who are no longer swallowing the lies and deception. Unfortunately there are still some Stormers who can't see the reality of how and why they ended up in their present situation.

For anyone who is still inclined to believe that the 2008/09 slump had no precedent, the charts below present compelling pictorial evidence.
Click on the chart to enlarge it.


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## Ironhalo (2 July 2009)

Bunyip, dead on.

I have no doubt that from a social perspective, SICAG have done a world of good for the Storm investors who rallied to their flag and trumpet calls. I will never take away from the fact that I am sure there are a number of Stormers who have taken solace in the group. If that saves them from doing something rash, then it has served its purpose.

What I would love to know, is why SICAG REFUSES to implicate Manny/Julie. It is a war they should be fighting on two fronts, the banks on one hand, the personal destruction of Manny and an admittance of guilt on his behalf. 

But they won't. As I said earlier, evidence that my brother had showing that Storm KNEW week to week on whom was in Margin Call with the banks was sat on for months by Storm and the advisors. And when he rang SICAG to tell them this (thinking it would help them) he was told in no uncertain terms that 'that won't help our cause' by a very flustered and obviously panicked chairperson doing his best to backpedal.

When I look back on my involvement with Storm, I wanted an 'invest and forget' scheme that pandered to the fact that I was away on warships for half the year, and couldn't manage an investment in detail in the middle of the Arafura Sea/Pacific Ocean! Lesson learned. I have made more money on investing by myself this year then I ever made with Storm now that I am again based on land.

Storm was a pack of cards waiting to fall down, albeit with a backup plan that was never instigated due to 1. spiraling greed for more and more investment percentages from clients for Manny and the banks, and 2. incompetance.

Both these two need to be addressed.


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## Big Max (2 July 2009)

Ironhalo said:


> That's the thing. It makes me sad to think that there are actually Stormers out there (myself being an ex-Stormer) who seriously believe that Manny/Julie had no part in this, and that 'effectively double mortgaging' the house was a safe and perfectly valid strategy.
> 
> In THEORY the Storm model was fine (like communism I guess!), but it should have been scaled back. There is nothing wrong with unlocking a safe amount of your home equity to invest, but the WHOLE thing + hundreds of thousands of dollars more? Insanity! I think it all started falling apart at the seams around Sep 08 when I noticed a lot more people getting phoned up (friends included) and told 'Hey guess what? We just found an extra lot of equity in your house! Let's borrow a crapload more oh, and look at that, we will be taking 6.6% out of that extra money you borrowed too...' Thank god none of my friends/close ones ever went through with that madness. Most of them are in a LOT better positions for not doing so.
> 
> ...




Iron Halo, you are right on the money. the ASIC and Joint Parliamentary Inquiries will answer all these and many more questions. Bring it on!


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## Big Max (2 July 2009)

bunyip said:


> Yeh well, poor Mash is out of touch with reality - again. She comes on this forum, full of fire and arrogance and bad manners, but has a tendency towards slinking away with her tail between her legs whenever confronting questions are put to her.
> She forgets that GG started this thread back in October 2008, long before SICAG was even thought of. It's been going strong ever since, and would continue going strong even if SICAG was disbanded tomorrow.
> 
> I have no doubt that Manny will be back in the financial advisory business in one form or another. And I have no doubt that some of his new clients will be former Storm clients. It's clear that some Stormers still regard him as the Messiah and would follow him to hell and back. Some people just never learn.
> ...




Bunyip, when are you going to smell the coffee. SICAG has done a power of work - much of it behind the scenes - for its 1500+ members. To suggest that it is some sort of front to EC/JC has got to be a joke. Please tell me you are smoking something illegal. Better still, come to one of SICAG's meetings. I'll come and pick you up personally.


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## Big Max (2 July 2009)

Ironhalo said:


> Bunyip, dead on.
> 
> I have no doubt that from a social perspective, SICAG have done a world of good for the Storm investors who rallied to their flag and trumpet calls. I will never take away from the fact that I am sure there are a number of Stormers who have taken solace in the group. If that saves them from doing something rash, then it has served its purpose.
> 
> ...




I agree with most of your comments, Iron Halo. You ask why SICAG hasn't condemned EC/JC on its website or its public utterings. Good question. I think the best way to answer it is to point out - as an earlier commentator suggested - EC still has a strong almost Messiah-like following. We have a lot of SICAG members who still look at the sun rising in the east each morning and see it as a signal that Manny has just climbed out of bed. True. Whenever a negative comment is made about EC or the Storm model, SICAG gets a (diminishing) number of calls (mostly from the Burdekin) from members telling us to stop rubbishing Manny and/or Storm. So, in view of the disparate views of the SICAG membership on these issues (it's probably 90%-10%) SICAG has elected to leave it to the courts, the ASIC and Joint Parliamentary Inquiries make the decision. Compromises, I know, never provide a satisfactory outcome and sometimes send the wrong signal - hence the conspiracy line in your posting.


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## Big Max (2 July 2009)

Garpal Gumnut said:


> Perhaps Maccka, you can explain the following from the SICAG site.
> 
> It is advice on the left lower border of the site which reasonably advises victims of the Cassimates and the Banks to avoid predatory financial advisers. Then it gets interesting.
> 
> ...




I'm on Macka's side with all this. He/she seems to be a welcome voice of reason and objectivity in the online discussions. The bold passage referred to by GG on the SICAG website is fact, is it not? Does GG think it's a free plug?


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## Big Max (2 July 2009)

I am the Media Director for SICAG (Storm Investors Consumer Action Group). I was not a Storm client. The following comments are offered in that capacity and not on behalf of the SICAG committee. There's no secret about Luke Vogel, Ron Jelich or Noel O'Brien's direct and indirect connections to the failed Storm investment advisory firm. Luke and Noel are now committee members of SICAG (Storm Investors Consumer Action Group). SICAG, in association with John McLennan (bank consumer advocate and SICAG consultant) has worked tirelessly for its 1500 members and has played a significant role in forcing the CBA to the negotiating table. That must and should be publicly acknowledged. SICAG has made no secret of its connections with Ron Jelich and Andrew O'Brien (Noel's son) - they are "friends of SICAG" and are doing their best to redress the insufferable damage done to their former clients. Ron is on the public record as standing ready to accept whatever blame and penalties are sheeted home to him as a key member of the Storm Financial group. Andrew and Ron have willingly shared their inside knowledge of the Storm organisation with SICAG, ASIC, the Joint Parliamentary Inquiry and have also offered their services to Slater & Gordon to help effect a just outcome for their former clients. SICAG is an open book and welcomes any scrutiny of its committee, its consultants and its motives. Any attempts to divert it from its core raison d'etre have been resisted. SICAG has a notice on its home page - www.wsicag.info - distancing the organisation from Emmanuel Cassimatis. He can fight his own battles. The organisation was established six months ago to seek redress for its members, implement a professional media campaign to highlight the plight of members that's my role), create an information forum for former Storm clients and to provide psychological, financial and legal support for its members. SICAG Co-chairman Mark Weir and his fellow committeemen may not be perfect but I can assure forum watchers these are men of honour who have committed thousands of voluntary man-hours fighting for their members. History will be kind to them.


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## maccka (2 July 2009)

Big Max said:


> I am the Media Director for SICAG (Storm Investors Consumer Action Group).






Big Max said:


> SICAG Co-chairman Mark Weir and his fellow committeemen may not be perfect but I can assure forum watchers these are men of honour who have committed thousands of voluntary man-hours fighting for their members. History will be kind to them.




Hear Hear!   Well said Big Max! 

I second your comments.  All of them! :iagree:

cheers
Maccka


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## bunyip (2 July 2009)

Big Max said:


> Bunyip, when are you going to smell the coffee. SICAG has done a power of work - much of it behind the scenes - for its 1500+ members. To suggest that it is some sort of front to EC/JC has got to be a joke. Please tell me you are smoking something illegal. Better still, come to one of SICAG's meetings. I'll come and pick you up personally.




Max

It wasn't me who suggested that SICAG was a front for EC/JC.....I merely commented that it's an interesting thought......which it is.
You really can't blame people for wondering - I mean, there's been a Storm logo on the SICAG website until recently, and there's been no criticism of Storm or even a suggestion that they bear some of the responsibility for what happened. On the contrary, as GG has pointed out, some of the wording on the website appears to be an endorsement of Storm's practices.
Further, you really can't blame people for wondering if SICAG is being careful not to direct any heat towards family members and close friends who were part of the Storm organisation.

Personally I think SICAG is a great idea and I'd certainly be a member myself if I was a Storm casualty. Even without being a Stormer, I'd go to a meeting if I lived anywhere near one of the venues.
I don't doubt you for a moment when you say SICAG has done a power of work behind the scenes for its members. Not only that, but it must be of immense value in providing moral support and a social network for a group of people who are clearly under a lot of emotional and financial stress.
But what SICAG needs to do to enhance its credibility is firstly, stop appearing to be so one-sided as to blame the banks, while letting the Storm organisation off the hook without even a hint of criticism.
Secondly, they need to stop making misleading claims such as the financial crisis and stock market crash have no precedent, and nobody saw them coming.
That's just complete rubbish - the SCIAG people who are saying it are well aware that's it's not correct, as is Manny Cassamatis.


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## stung (2 July 2009)

Big Max said:


> I am the Media Director for SICAG (Storm Investors Consumer Action Group). I was not a Storm client. The following comments are offered in that capacity and not on behalf of the SICAG committee. There's no secret about Luke Vogel, Ron Jelich or Noel O'Brien's direct and indirect connections to the failed Storm investment advisory firm. Luke and Noel are now committee members of SICAG (Storm Investors Consumer Action Group). SICAG, in association with John McLennan (bank consumer advocate and SICAG consultant) has worked tirelessly for its 1500 members and has played a significant role in forcing the CBA to the negotiating table. That must and should be publicly acknowledged. SICAG has made no secret of its connections with Ron Jelich and Andrew O'Brien (Noel's son) - they are "friends of SICAG" and are doing their best to redress the insufferable damage done to their former clients. Ron is on the public record as standing ready to accept whatever blame and penalties are sheeted home to him as a key member of the Storm Financial group. Andrew and Ron have willingly shared their inside knowledge of the Storm organisation with SICAG, ASIC, the Joint Parliamentary Inquiry and have also offered their services to Slater & Gordon to help effect a just outcome for their former clients. SICAG is an open book and welcomes any scrutiny of its committee, its consultants and its motives. Any attempts to divert it from its core raison d'etre have been resisted. SICAG has a notice on its home page - www.wsicag.info - distancing the organisation from Emmanuel Cassimatis. He can fight his own battles. The organisation was established six months ago to seek redress for its members, implement a professional media campaign to highlight the plight of members that's my role), create an information forum for former Storm clients and to provide psychological, financial and legal support for its members. SICAG Co-chairman Mark Weir and his fellow committeemen may not be perfect but I can assure forum watchers these are men of honour who have committed thousands of voluntary man-hours fighting for their members. History will be kind to them.





The friends of SICAG (ex advisors) _"doing their best to redress the insufferable damage done to their ex-clients"_- what a crock!!!!

Why did they allow this damage to happen in the first place. Many advisors knew the utter financial devastation that was upon us a long time before we did. How about an apology for ruining lives?

Don't forget boys there may be a number of ex-clients providing info to the same organisations about how some advisors provided deceitful advice and information. 

I hope some of them are investigated by ASIC and never permitted to give financial advice again.


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## Pindibog (2 July 2009)

I will join that picket line!!







Smiley said:


> With all the judgments and moralising it is good to read Steve Borden's balanced assessment.
> 
> RE SICAG, it has kept the issue of Storm alive, there is not contact and there has been no financing of it by EC and JC (I sought reassurances before I joined and I do believe Mark and Noel - they are perhaps naive at times but well meaning and they have a focus on justice for the stormified). And as Steve has explained, more eloquently than I can at the moment, there are many layers to this whole debacle and relationships are complex.
> 
> I do not believe EC will arise from the ashes of storm and if he does, myself and my friends will make sure he is picketed, shamed in the media and kept under our spotlight.


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## stung (2 July 2009)

What's a wood duck?
Do I classify as one?


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## Solly (2 July 2009)

stung said:


> What's a wood duck?
> Do I classify as one?




stung, a "wood duck"  is a colloquial term used for an "easy target". 
Like a "wood duck" floating on a pond.

Are you one ?....Only if you let yourself be one.


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## stung (2 July 2009)

Solly said:


> stung, a "wood duck"  is a colloquial term used for an "easy target".
> Like a "wood duck" floating on a pond.
> 
> Are you one ?....Only if you let yourself be one.




Well, I think I was more of a bleeding albatross. They saw me coming.


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## bunyip (2 July 2009)

stung said:


> The friends of SICAG (ex advisors) _"doing their best to redress the insufferable damage done to their ex-clients"_- what a crock!!!!
> 
> Why did they allow this damage to happen in the first place. Many advisors knew the utter financial devastation that was upon us a long time before we did. How about an apology for ruining lives?
> 
> ...




I think Stung has a point....there appears to be a conflict of interest when former Storm advisers are now on the committee of SICAG, supposedly to fight for justice for Storm victims. That justice should include coming down hard on those in Storm who gave shonky advice and deceived clients by keeping them in the dark about their true position. 
Realistically, is any former Storm adviser going to do anything to turn up the heat on himself, thereby possibly leaving him open to legal action? I'd say it's highly unlikely.


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## darkside (2 July 2009)

stung said:


> The friends of SICAG (ex advisors) _"doing their best to redress the insufferable damage done to their ex-clients"_- what a crock!!!!
> 
> Why did they allow this damage to happen in the first place. Many advisors knew the utter financial devastation that was upon us a long time before we did. How about an apology for ruining lives?
> 
> ...





Stung , well said, i was trying to put it into words but thought i would just ride your "coat tails" . 

The way Ron was in the paper blaming all and sundry about the downfall of his clients and how he was the victim was disgracefull , so yes he should put his hand up and say , " I let you people down ,and even stood by and watched it collapse because i didn't have the guts to stand up for my beliefs and back my own judgement". They should not even be allowed to give financial advice in a Monopoly Game , let alone real life......!!!!


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## Garpal Gumnut (2 July 2009)

bunyip said:


> I think Stung has a point....there appears to be a conflict of interest when former Storm advisers are now on the committee of SICAG, supposedly to fight for justice for Storm victims. That justice should include coming down hard on those in Storm who gave shonky advice and deceived clients by keeping them in the dark about their true position.
> Realistically, is any former Storm adviser going to do anything to turn up the heat on himself, thereby possibly leaving him open to legal action? I'd say it's highly unlikely.




Blind Freddie would see the sense behind that statement.
Good on you bunyip.

Lets hope the poor Stormers don't get done over twice.

The Silence of the Lambs  silamb.info would be a better moniker for sicag.info given their refusal to publish any of the hundreds of thousands of negative comments about Emmanuel Cassimatis and Co. made in the mainstream media by the likes of Michael West from the AFR and others.

I still can't believe that a former Storm Advisor is inside the sicag tent pissing out.

Poor poor Storm bastards.

gg


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## Julia (2 July 2009)

Big Max said:


> Bunyip, when are you going to smell the coffee. SICAG has done a power of work - much of it behind the scenes - for its 1500+ members. To suggest that it is some sort of front to EC/JC has got to be a joke..






> Originally Posted by Ironhalo
> Bunyip, dead on.







Big Max said:


> I agree with most of your comments, Iron Halo.




Um, Big Max, first you suggest to Bunyip that he needs to get with it or something, then you suggest you agree with Ironhalo who has strongly supported what Bunyip said!

Either you don't know what you want to say or you're trying to have a foot in both camps.


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## Ironhalo (2 July 2009)

Big Max said:


> (EC) He can fight his own battles. The organisation was established six months ago to seek redress for its members, implement a professional media campaign to highlight the plight of members that's my role), create an information forum for former Storm clients and to provide psychological, financial and legal support for its members. SICAG Co-chairman Mark Weir and his fellow committeemen may not be perfect but I can assure forum watchers these are men of honour who have committed thousands of voluntary man-hours fighting for their members. History will be kind to them.




History will be kind to them? Well it has been very kind to their family members/friends who were all too keen to go on the Storm overseas holidays (as EC was quoted, 'paid in part by the banks'...and yes I realise that these trips were often self-funded, but my advisor told me they were very much subsidised by Storm), and were high-fiving each other in Aug last year when they were raking in huge commissions and riding in the company jet.

I'm all for moral support for victims, but what about justice for victims? Banks are an easy target, you don't need much to set the mob off on a lynching when it comes to those institutions. So tell me, why aren't SICAG organising pickets outside of Belmont? 

I'll put it as blunt as I can. There are people obviously waiting for Manny to re-emerge as a pheonix from the flames, and when he does, family members/friends in SICAG will be well positioned and well rewarded for their efforts in deflecting liability away from the Cassimatis couple.

The fact that Stormers may benefit in the interim from the banks is a nice aside, and helps heal middle class guilt.

Maybe I am being harsh, but my intuition has serve me well over 12 years as a Naval Officer....not going to ignore it now. As GG and a few others said, I don't feel comfortable knowing that the previous exponents and beneficiaries of all things Storm are now baying for blood and carrying the SICAG standard into battle.


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## Glen48 (3 July 2009)

If you are going to try and get money from the Banks get in quick before they go under.. I reckon another 18 mths or less and we will have our own Sub prime and CDS's as well to worry about.


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## Solly (3 July 2009)

*"ASIC probes Storm Financial collapse"*

"THE Australian Securities & Investments Commission's investigation into the collapse of Storm Financial includes Macquarie Group and Challenger, along with the two key banks, Commonwealth Bank of Australia and Bank of Queensland.

".......suggests ASIC is pushing...to ensure full restitution for those wrongfully hurt by the affair."

"CBA ...has suspended the North Queensland area manager in charge of the Townsville branch."

More by Martin Collins & John Durie in The Australian is here;

http://www.theaustralian.news.com.au/story/0,25197,25724805-5013408,00.html


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## Solly (3 July 2009)

*"Waging the war of independence"*

"Law firm Slater & Gordon says financial institutions must shoulder a lot of the blame for the Storm Financial mess, and the deeper the authorities dig, the worse these organisations look."

More in AFR - Asset magazine by Leng Yeow.


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## Farencue (3 July 2009)

Gee isnt it coincidental that after 100 odd pages - quite a few of them discussing SICAG up pops Big Max the media director.
Is your name and position listed on the website Big Max for public record?

Wake up and smell the coffee yourself Big Max (looking at this kind of language in one of your first posts I doubt you are a media professional - I really do)
This is an internet forum where people who are interested in stocks, property and yes even the failure of the Storm model have gathered to discuss it. 

Yet so many apologists have turned up here once posters started asking why there is no peep of Manny's SCAM, now why would that be Big Max?  What directed you to this forum to defend SICAG when a media professional should know that anonymous internet forums dont really cut it as a reputable source of anything?  Where were all the SICAG people in the opening pages of this thread?

We can discuss our suspicions of SICAG as members of the public looking from the outside in - and Big Max because you are the media director I will give you a tip:  SICAG looks very very suss and the disclaimer about EC serves to make SICAG look even more suss.  Have you smelt the coffee yet - do you understand what *we* are saying?

Do you understand that some us believe that SICAG is a huge conflict of interest?  Do you understand that some of us feel that the gullible, financially ignorant people who were scammed by Storm are merely being set up to be reloaded by the scummy financial advisers who got them into this mess in the first place, that these scummy financial advisers have no business advocating for their victims until they are scrutinised?

A big bunch of bully boys who have been busted and called for what they really are - greedy, self interested "financial advisers" - are now collectively waving a big stick to get people who have their own brains (ie non Storm/non SICAG posters here) to fall into line with their personal agenda?  Sorry Big Max, but some of us believe that it was  people like O'Brien and Jelich, Cassimatis et al who actually got these people into the mess they find themselves in the *first instance*
Blind Freddie can see that it could be for these same greedy, self interested financial advisers' personal agendas that they stick together and point the finger at the banks.  

I read Ron Jelich's submission to parliament, I didnt see where he admitted his own part in "stomifying" the wood ducks or how much he personally gained out of what he was doing.  In fact Ron Jelich's submission seemed to be about how he and EC weren't really on speaking terms for a time and about the relationship between Storm and the banks.  
Now my reading comprehension could be under par so do you care to point out where Ron Jelich publicly disclosed exactly what his part in all this was Big Max, you know the nitty gritty details?

So, Big Max, if you are a media professional perhaps you should take on board that some members of the public think that your media direction is rather odd.


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## Garpal Gumnut (3 July 2009)

It is incumbent on SICAG to come clean about any conflicts the higherups have in this affair.

It is incumbent that they discuss Emmanuel Cassimatis role in this affair.

I would guess that most Stormers now come to this forum rather than SICAG for information.

Googling "Storm Financial" put ASF 5th on the list, I didn't see any mention of SICAG.

There have been over 200,000 visitors to this thread.

That is because viewers of posts can be assured of fearless correct and true comment.

SICAG, get the old Storm advisors out in the open.

Give us a money spider paragraph on Manny.

gg


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## Big Max (3 July 2009)

Farencue said:


> Gee isnt it coincidental that after 100 odd pages - quite a few of them discussing SICAG up pops Big Max the media director.
> Is your name and position listed on the website Big Max for public record?
> 
> Wake up and smell the coffee yourself Big Max (looking at this kind of language in one of your first posts I doubt you are a media professional - I really do)
> ...




Farencue, Garpal Gumnut.
Yes, I am listed on the website. You ask: Where was SICAG during the early days of this forum? Simple. No time for musing back then. We were busy doing practical and necessary tasks such as organising and conducting information road shows (Margate, Mackay, Rocky, Townsville and Cairns), providing much-needed support for distressed and sometimes suicidal Storm victims, answering thousands of phone and email messages, driving a media campaign that has been critical in bringing the CBA (and soon the other banks) to the negotiating table . . . do you want me to go on? As for Jelich, O'Brien and Cassimatis - pick up the phone and ask THEM the questions you want answers. Cassimatis won't take your calls, but I can assure you Jelich and O'Brien will. Both are on the record as ready to accept whatever penalty comes their way for their part in the Stormification process.


----------



## maccka (3 July 2009)

Apologies for the length of this post.  There are lots of quotes to support my points. 



Garpal Gumnut said:


> I would guess that most Stormers now come to this forum rather than SICAG for information.




Opinion only not fact.  There is no evidence that can either support or disprove this statement.  The statement is not one of definitive fact which is why the addition of the words "I would guess" are important.  People reading it need to read the whole sentence (not just the end) to see the opinion and then try to make a judgement as to how much value they should place on your statements.  (This is true of any statement one reads anywhere.)



Garpal Gumnut said:


> There have been over 200,000 visitors to this thread.




That does not equate to 200000 individual people.  It is views. Since one person can view the thread more than once in a day it doesn't necessarily mean it is being viewed by hundreds of thousands of people.



Garpal Gumnut said:


> That is because viewers of posts can be assured of fearless correct and true comment.




Sorry GG but that is not correct.  If it was true, it would mean that all of the information on the thread is true and correct.  That cannot possibly be given the wide variety of opinions that are exhibited on the thread.

There are posts on this thread are correct and there are others which are hugely inaccurate and full of comments which are so inaccurate that they border on defamation and libel.  There are a number of posts here which would be viewed dimly by legal processes and it could be argued, appear to breach ASF Terms and Conditions (esp Dot point 3).

There are certainly many many comments that are hurtful and nasty and probably written to provoke others. Those posts probably breech the ASF forum Code of Conduct (particularly rule 2.) 

There are some posts that are supportive and seek to help people learn from their experiences and the experiences others have had.  This is one of the reasons the thread is valuable (when you discard the stuff that is of no value.)

It depends on why you come to this forum as to which posts you will value and which you will not.  I would suggest that posts such as Solly's research on current media are considered very valuable to most people.  I can happily state that they are one of the main reasons I keep coming back - despite the trashing that some members of this forum seem to love to dish out regularly. (That and the fact that I have pretty thick skin!  )




Garpal Gumnut said:


> Googling "Storm Financial" put ASF 5th on the list, I didn't see any mention of SICAG.




That is very easy to explain.  SICAG and Storm Financial are not the same.  It is like googling "banana" and expecting to see an audio file of a whale song appear. They aren't the same thing.  Do a better google search and you will find them eg "Storm action group" comes up with pages of links where at least the first page is full of direct references that can be used to link to SICAG.  Incidentally SICAG comes up as the 4th or 5th link (at this point in time.)



Farencue said:


> Gee isnt it coincidental that after 100 odd pages - quite a few of them discussing SICAG up pops Big Max the media director.
> Is your name and position listed on the website Big Max for public record?




Yes it is.  Have you looked?



Farencue said:


> What directed you to this forum to defend SICAG when a media professional should know that anonymous internet forums dont really cut it as a reputable source of anything?






Garpal Gumnut said:


> I would guess that most Stormers now come to this forum rather than SICAG for information.
> ...
> That is because viewers of posts can be assured of fearless correct and true comment.




So we can see here an example of the wide variety of views that I was discussing earlier on this thread.  Farencue thinks the forum doesn't cut it as a reputable source however GG has been agitating for some time now to try to get someone from SICAG to talk here.



Farencue said:


> Where were all the SICAG people in the opening pages of this thread?




Are people only allowed to be involved if they were here at the start of the thread?

Your first post to this thread was 17th-March-2009, 02:50 PM.  You weren't here then (at the start of the thread either).  Mine was 24th-January-2009, 09:57 PM (I wasn't here at start either).  If I was here before you does that make my right to communicate on the forum stronger than yours?  Of course it does not.  

The important point is that Big Max is here now.



Julia said:


> Um, Big Max, first you suggest to Bunyip that he needs to get with it or something, then you suggest you agree with Ironhalo who has strongly supported what Bunyip said!
> 
> Either you don't know what you want to say or you're trying to have a foot in both camps.




Julia, There is another explanation (many actually).  One of the most obvious ones is that people don't read posts properly and in detail and tend to read only the bits they want to see.  Then when they process the information and comment about it they communicate misunderstanding and misinformation.

When you read the information again carefully, you will see that Big Max agrees with particular points that Ironhalo has made not with his (Ironhalo's) whole post.  

Ironhalo has on a couple of occasions communicated that he sees good in some of the work that SICAG does.  Bunyip has also expressed that view at least once.  



Big Max said:


> Iron Halo, you are right on the money. the ASIC and Joint Parliamentary Inquiries will answer all these and many more questions. Bring it on!






Big Max said:


> Bunyip, when are you going to smell the coffee. SICAG has done a power of work - much of it behind the scenes - for its 1500+ members. To suggest that it is some sort of front to EC/JC has got to be a joke.






Big Max said:


> I agree with most of your comments, Iron Halo.






Ironhalo said:


> Well said Maccka. I can't knock SICAG's efforts in keeping Stormers sane and giving them some comfort and relief, I think they have a great thing going in terms of moral support.






Ironhalo said:


> I have no doubt that from a social perspective, SICAG have done a world of good for the Storm investors who rallied to their flag and trumpet calls. I will never take away from the fact that I am sure there are a number of Stormers who have taken solace in the group. If that saves them from doing something rash, then it has served its purpose.






bunyip said:


> Personally I think SICAG is a great idea and I'd certainly be a member myself if I was a Storm casualty. Even without being a Stormer, I'd go to a meeting if I lived anywhere near one of the venues.
> I don't doubt you for a moment when you say SICAG has done a power of work behind the scenes for its members. Not only that, but it must be of immense value in providing moral support and a social network for a group of people who are clearly under a lot of emotional and financial stress.
> But what SICAG needs to do to enhance its credibility ...




Julia, there is another explanation (many actually).  One of the most obvious ones is that people don't read posts properly and in detail and tend to read only the bits they want to see.  Then when they process the information and comment about it they communicate misunderstanding and misinformation.

In my opinion, this confused reading and processing happens often and is seen regularly on this thread.  (I have been guilty of miscommunication myself when I gave Julia the impression that I was underplaying the role of the financial media.)

People need to read and post with care.  Buyer beware applies in opinion forums like this one just as it does when dealing with finances.

People have asked questions about SICAG - questions that people obviously want answers to.  Big Max has come to answer them.  What I would ask people in this forum to accept is that once you get the answers you have sought (from the source) perhaps you might need to open yourselves to the possibility that there may be truth in what they say.  Find other reputable sources and then evidence to use to verify the answers you have been given (as either as true or untrue). 

If you find it to be untrue (with credible evidence) then find a credible way to expose the information for everyone (outside this forum) to see - perhaps write to the Parliamentary inquiry (I have seen submissions go up within a couple of hours of receipt in Canberra) or talk to financial media with a good reputation.

If you decide it to be true please stop trying to damage the reputation of a very hard working group of people doing it tough. It is not Australian or fair.

cheers
Maccka


----------



## Garpal Gumnut (3 July 2009)

maccka said:


> That does not equate to 200000 individual people.  It is views. Since one person can view the thread more than once in a day it doesn't necessarily mean it is being viewed by hundreds of thousands of people.
> 
> 
> 
> ...




Mate,

ASF has had about 1000 views to this thread in the last 24 hours. 

They were not all from Pasadena or Almaty. !!!! How many has SICAG had in the past 24 hours, repeat or single views.

Veiled threats also mate, have the opposite effect on ASF, ask Octivar, or some of the other financial abortions that have occurred recently in Australia

You still refuse on your site to say boo about Manny, and you still have ex Storm people inside the tent without full disclosure.

That is what is the problem, and one which you and any of the other SICAG posters on ASF will not answer.

So in Summary

MANNY
THE TENT

gg


----------



## Kez180 (3 July 2009)

Garpal Gumnut said:


> Mate,
> 
> ASF has had about 1000 views to this thread in the last 24 hours.
> 
> ...




Aside from the 'my site is better than yours' epenis wars, I completely agree with gg.

SICAG should have a public opinion of EC, JC and Storm, be it good, bad or ugly so that the people looking to them for support can better understand the inherent conflicts of interest that must be present.

I also think that if any ex stormers want to come out and right what they have done they should be very clear what they have done, and what connections with storm they have had.

It also annoys the **** out of me when people say stuff like,'it will happen when the time is right' 'it is all going on behind the scenes'...

It was the same mumbo jumbo that conned many storm clients into massive leverage...


----------



## maccka (3 July 2009)

Garpal Gumnut said:


> Mate,
> 
> ASF has had about 1000 views to this thread in the last 24 hours.




That's great.  (BTW - the term "Mate" doesn't bother me at all.  I see it as a sign of friendship.  Will be pleased to know that you do also.)



Garpal Gumnut said:


> They were not all from Pasadena or Almaty. !!!! How many has SICAG had in the past 24 hours, repeat or single views.




I have no idea.  I am not privy to that information.   



Garpal Gumnut said:


> Veiled threats also mate, have the opposite effect on ASF, ask Octivar, or some of the other financial abortions that have occurred recently in Australia




Threats?  What threats have I made?  Veiled or otherwise? 



Garpal Gumnut said:


> You still refuse on your site to say boo about Manny, and you still have ex Storm people inside the tent without full disclosure.
> 
> That is what is the problem, and one which you and any of the other SICAG posters on ASF will not answer.




I don't answer on this question as I have no credible information to do so with.   Not only that but I don't have any authorisation either as I am only a member of the organisation not a spokesperson.  I would not be so presumptuous as to believe that I can speak authoritively for a group without the right to do so.  (I suspect most of the other known SICAG members that post to this site don't have answers or authorisation either and that is probably why they don't answer.)

As for full disclosure I believe that you got your answer on their assistance to SICAG from Big Max yesterday.  The advisors that he mentioned yesterday aren't committee members and they are giving valuable assistance on the inside dealings of SF.

Keep asking questions.  Ask them all over the place.  Be persistent. Send emails, post messages on forums such as these, make phone calls, visit people personally, make submissions to the Parliamentary inquiry, go to the public hearings, read anything of a credible nature you can get your hands/computers on.  

People need to move beyond one or two places/spaces/forums and put active energy into uncovering the truth as there is very little chance that the answers will just come to us because we "will" it or are arrogant enough to believe that they should come to us where we happen to be asking the question.  

If you really are interested in finding out the truth about what really happened you will do what it takes and not limit yourself to one place/space to ask your questions.  Won't you?  I know I do and I'm not a SF investor.

You may get the answers you want on this forum or you may get them in another forum (eg Parliamentary Inquiry, reputable newspaper, SICAG website etc).  

Personally I think that it really doesn't matter who asks the questions or even who gets to the bottom of the truth so long as the information (all of it) comes out and people discover what happened and who (if it was a person/organisation) was responsible for each little bit that contributed to this disaster.

cheers
Maccka


----------



## Garpal Gumnut (3 July 2009)

maccka said:


> That's great.
> 
> I don't answer on this question as I have no credible information to do so with.   Not only that but I don't have any authorisation either as I am only a member of the organisation not a spokesperson.  I would not be so presumptuous as to believe that I can speak authoritively for a group without the right to do so.  (I suspect most of the other known SICAG members that post to this site don't have answers or authorisation either and that is probably why they don't answer.)
> 
> ...





Go to Sollys posts.

He has all the submissions to the Inquiry about Storm and Manny and the others.

Then publish them on SICAG.

The poor Stormers who rely just on SICAG are not being made aware of these.

They are safe to publish as they are parliamentary privelige.

Again I say to you publish and disclose 

MANNY
THE TENT

gg


----------



## maccka (3 July 2009)

Kez180 said:


> SICAG should have a public opinion of EC, JC and Storm, be it good, bad or ugly so that the people looking to them for support can better understand the inherent conflicts of interest that must be present.




I'm guessing that SICAG will be asked for their opinion when they give evidence to the Parliamentary Inquiry.  I look forward to the answer.  I also look forward to the evidence the EC and JC give as well as former staff (including advisors).  I think that good questions and answers will come from everyone involved. 

I would ask people to stop and think about how the general public and media react when people give an opinion and then change their mind when full evidence comes out later.  With headlines such as "backflip" and "embarrassing change of position" regularly doing damage, who does it serve to give an opinion before the facts are all in?



Kez180 said:


> I also think that if any ex stormers want to come out and right what they have done they should be very clear what they have done, and what connections with storm they have had.




I agree.  I think you will find that process is occurring.



Kez180 said:


> It also annoys the **** out of me when people say stuff like,'it will happen when the time is right' 'it is all going on behind the scenes'...
> 
> It was the same mumbo jumbo that conned many storm clients into massive leverage...




I can see how on one level you might believe that.  The reality in most cases just because you don't see it doesn't mean that it isn't happening.  

I couldn't see the wind in Cyclone Larry but I certainly saw its effects as it destroyed the houses in my street.  I find it hard to see box jellyfish also but I certainly feel their effects when they sting me behind the scenes.

Kez180, everyone on this forum has different positions on this whole situation but I would like to think that we all want the same ultimate outcome - to see the truth (all of it) come out.

cheers
Maccka


----------



## maccka (3 July 2009)

Garpal Gumnut said:


> Go to Sollys posts.
> 
> He has all the submissions to the Inquiry about Storm and Manny and the others.
> 
> ...




Why publish what is already published on a far more authoritative site (the parliamentary site http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm) than the SICAG one?  That would be a waste of bandwidth.  Even though they are protected by Parliamentary Privilege.

I think you will find that people who are choosing the rely only on SICAG are very aware of these submissions.  Remember there is more to the SICAG communication channels than the home website.

GG - You can tell me to publish and disclose as much as you like but it can't make the change you want as I do not have that power.  I am one person - one member only.   Surely you don't believe that I am posting anonymously as Manny do you?  You don't think that I am a SICAG committee member do you? It would be a waste of time and energy if you thought either of those things as I am not.  

cheers
Maccka


----------



## Ironhalo (3 July 2009)

We can coat **** in sugar all we like on this thread, and pontificate on who is doing good for whom etc etc.

The nuts and the bolts of it is, is that SICAG, for a group that has assisted the Stormers socially and morally, has an OBLIGATION to state what their stance is on Emmanuel Cassimatis and the Storm Empire. To date, NO ONE has done that, and in fact they have diverted ALL attention/blame onto the banks.

I hate the banks as much as the next person, but I find it very hard to swallow that there are ex-Storm advisors jumping on the SICAG bandwagon. 

Where were all of these advisors over Nov 08 when the world was going to hell in a handbasket and people were being placated with Storm secretaries saying 'such and such will call you back, but don't worry' while their fortunes disappeared down the tube because Manny was trying to ride it out and keep his profits rolling in instead of doing what was asked, and selling everyone into cash?

Where was Ron Jelich and Andrew O'Brien in Redcliffe when 3 members of my family who paid them a shedload of money for financial advice got pretty much taken to the cleaners because none of them would stand up and do their job, or answer a phone?

Where were the advisors when Manny cleaned out the Storm coffers and paid himself and Julie a $2 million bonus for failing? That could have saved at least 10-12 families from being homeless, not to mention where the rest of the money went....(*cough* offshore *cough*)

Don't talk to me of the 'crusade' SICAG is running on the banks. And don't tell me that members of the SICAG chair aren't fraternising with the Cassimatisses out of hours either. I commend SICAG in their zeal, but you need to start spreading the blame to EC....blame that is rightfully deserved. A cursory glance at website logs shows some of the key SICAG members went on overseas jaunts with Storm, and were well involved with EC/JC on a social level. Therefore, SICAG is biased by default. It might not be true, but perception is the reality.

When I see articles appearing on SICAG attributing partial/half/majority blame to EC/JC and their greed and disclosing the links of key members to Storm, maybe then I might actually recommend that my family joins it. Until then (and I hate to use such a spiteful anaolgy, but I feel it's poignant), it'd be like the Japanese building war memorials for POWs six months after the war....the efforts are appreciated, but they still leave a very sour taste in one's mouth.


----------



## Garpal Gumnut (3 July 2009)

maccka said:


> Why publish what is already published on a far more authoritative site (the parliamentary site http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm) than the SICAG one?  That would be a waste of bandwidth.  Even though they are protected by Parliamentary Privilege.
> 
> I think you will find that people who are choosing the rely only on SICAG are very aware of these submissions.  Remember there is more to the SICAG communication channels than the home website.
> 
> ...




Mate,

I would bet London to a brick, that SICAG would have a printout of each and every post on this thread at their daily meetings, as would every main stream journalist with an interest in Storm. 

If they didn't then they would be a real bunch of amateurs.

I just find it amazing the spin they put on their website and the advisors they have in the tent.

I know they are amateurs and the website is not the best I've ever visited, in fact its a pretty poor effort, but they leave the impression that Manny is a NO GO zone for them.

This affects peoples perceptions of them.

And it is now out that they are being advised by ex Storm advisors who possibly were parties to advising victims to invest in Storm.

Its not brain science mate.

MANNY
THE TENT

gg


----------



## Julia (3 July 2009)

I've just had a look at the SICAG website for the first time.  Might have missed it, but I couldn't see any reference at all to the bad advice from Storm, just lots about the big bad banks.
Seems less than realistic.


----------



## maccka (3 July 2009)

Garpal Gumnut said:


> Mate,
> 
> I would bet London to a brick, that SICAG would have a printout of each and every post on this thread at their daily meetings, as would every main stream journalist with an interest in Storm.
> 
> If they didn't then they would be a real bunch of amateurs.




You can bet they are learning fast.  



Garpal Gumnut said:


> I know they are amateurs and the website is not the best I've ever visited, in fact its a pretty poor effort, but they leave the impression that Manny is a NO GO zone for them.




I know what will come when I write this and so I will put my flame suit on now...

GG (and others) while that is your perception (which is your right to hold)  and seems incredibly obvious to you that it is the only way it can be seen, it does not actually mean that it is the way that it is seen by other people.  Other people (with as much intellect as you - or more - or less) may and do see the disclaimers and other information as reasonable and cautious given that not all the information is out yet. 




Garpal Gumnut said:


> This affects peoples perceptions of them.




GG - You are correct and one of the dangers with perceptions is that for some people perceptions equal reality.  



Garpal Gumnut said:


> And it is now out that they are being advised by ex Storm advisors who possibly were parties to advising victims to invest in Storm.
> 
> Its not brain science mate.






Big Max said:


> SICAG has made no secret of its connections with Ron Jelich and Andrew O'Brien (Noel's son) - they are "friends of SICAG" and are doing their best to redress the insufferable damage done to their former clients. Ron is on the public record as standing ready to accept whatever blame and penalties are sheeted home to him as a key member of the Storm Financial group. Andrew and Ron have willingly shared their inside knowledge of the Storm organisation with SICAG, ASIC, the Joint Parliamentary Inquiry and have also offered their services to Slater & Gordon to help effect a just outcome for their former clients.




Ron Jelich and Andrew O'Brien are sharing information with SICAG.  That doesn't mean advising.  And from my point of view, just because some one gives advice doesn't mean that the person being given the advice has to take it.  You can bet London to a brick that this is a lesson the SICAG committee learned the hard way.

cheers
Maccka


----------



## Ironhalo (3 July 2009)

maccka said:


> There are posts on this thread are correct and there are others which are hugely inaccurate and full of comments which are so inaccurate that they border on defamation and libel.  There are a number of posts here which would be viewed dimly by legal processes and it could be argued, appear to breach ASF Terms and Conditions (esp Dot point 3).




Well I suppose that it is only fair and decent that SOMEONE goes to Court over all this.

Justice and all right?


----------



## maccka (3 July 2009)

Ironhalo said:


> Well I suppose that it is only fair and decent that SOMEONE goes to Court over all this.
> 
> Justice and all right?




Ah Ok - This might be what GG thought were threats.  They weren't.  My comment was meant to point out the people need to be careful what they post.

Yep - hopefully Justice will be brought down.  I suspect it is more likely to be over the legal issues behind all of this rather than a few indiscreet posts on an internet forum.  

Cheers
Maccka


----------



## Ironhalo (3 July 2009)

Too true mate.

Don't get me wrong, I appreciate your posts, it's good to see some level headed responses and some honest banter.

Makes this thread entertaining at any rate.


----------



## DocK (3 July 2009)

Just as a matter of interest *Maccka,* could you tell us a little of the general split of opinions amongst SICAG members? At the social gatherings I assume people would share "war stories" and compare who was told what, when.  Do the majority of SICAG members still think Manny had their best interests at heart, or do the majority now blame him at least partially for their losses?  Or is there an unspoken rule that to openly question the "model" would be inappropriate, at least in the presence of group heirarchy?

I think it is unrealistic to expect the "group" as a whole to share one point of view, as there will be those who will never be prepared to hear any criticism of Manny and Julie, but I'm wondering if those with contrary views feel free to voice them?

If so, and all members are aware that they don't all necessarily agree, I don't see a problem with an "every man in it for themselves" approach.  Nothing to stop any member so inclined  going after Manny (and ex-staff) outside of SICAG - or perhaps even forming an off-shoot once they're done with the banks.  Transparancy is the key - and is what was missing with Storm all along.  If there is transparency about the different motives at work within SICAG, then nobody is being "used" to further someone else's agenda and all is well 

My


----------



## maccka (3 July 2009)

DocK said:


> Just as a matter of interest Macca, could you tell us a little of the general split of opinions amongst SICAG members? At the social gatherings I assume people would share "war stories" and compare who was told what, when.  Do the majority of SICAG members still think Manny had their best interests at heart, or do the majority now blame him at least partially for their losses?  Or is there an unspoken rule that to openly question the "model" would be inappropriate, at least in the presence of group heirarchy?
> 
> I think it is unrealistic to expect the "group" as a whole to share one point of view, as there will be those who will never be prepared to hear any criticism of Manny and Julie, but I'm wondering if those with contrary views feel free to voice them?
> 
> ...




Hi DocK,

Unfortunately with the exception of 1 SICAG meeting (the information session - wasn't social) held in Cairns I have not been able to attend a social function personally. So I cannot give first hand experience.  Through my own networks I have heard about almost all of them though.  As I said I have a wide number of family and friends involved all around Queensland.  Take what I say here now as what it is - hearsay.

What I have heard about these social gatherings does seem to be close to what you have described...

People do tell their own war stories and voice opinions.  People openly express their opinions and do so in front of the committee members (when they are present - obviously the committee members tend to attend gatherings in SE Qld mostly) and former Storm staff (including advisors).  I have not heard of any big nasty arguments between people with different points of view.  Nor have I heard of people being asked not to speak out against EC/JC or SF.

The committee members are very open and respond as quickly as possible to emails and phone calls and are happy to speak to people in person if it is possible.

I don't know the proportions (although Big Max indicated 90% to 10%) but from what I hear they are changing to more people are starting to think that perhaps things weren't as they had been led to believe.

As these social gatherings have been happening for quite a few months now I suspect that while they are still opportunities to voice concerns and share stories I think they are also now starting to become more personal "catch-ups" between friends where things other than SF and SICAG are discussed. 

I agree with your point about expecting every member of the group to hold to one position.  I think with a membership of 1500 it would be nearly impossible.  

I also agree on the point of transparency.  In my case, I am happy to support SICAG committee as from where I sit they have been extremely transparent.  When I call or email to ask questions they answer them.  They do not shirk hard questions.  They have from time to time elected not to give direct answers to some of my questions at that point in time (for strategic reasons) but they have always answered them in the fullness of time.  What's more the committee members I am in contact also provide the evidence to back their answers.  

Cheers
Maccka


----------



## Garpal Gumnut (3 July 2009)

maccka said:


> I don't know the proportions (although Big Max indicated 90% to 10%) but from what I hear they are changing to more people are starting to think that perhaps things weren't as they had been led to believe.
> 
> 
> Maccka




Mate,

Was that 90% still believe in the Cassimatis model. or 90% don't.

gg


----------



## maccka (3 July 2009)

Garpal Gumnut said:


> Mate,
> 
> Was that 90% still believe in the Cassimatis model. or 90% don't.
> 
> gg




Hi GG, 

You'd have to check with Big Max since it was his figures I was quoting but I'd hazard a guess that it is 90% think things weren't as they believed they were and 10% believe that there wasn't a problem with SF or its model.  The great majority of people I know that got caught up are no longer feeling warm and fuzzy about SF/EC or JC.

While there may be doubts about the SF aspect of it I would have to say that I see almost universal belief by members I talk to in the negative involvement of most of the banks involved particularly CBA.  Even people who did not have home loans or margin loans with CBA have issues with CBA and its affiliates that closed down the Storm Funds and SF with what some consider to be indecent haste and without due process.

cheers
Maccka


----------



## Garpal Gumnut (3 July 2009)

maccka said:


> Hi GG,
> 
> You'd have to check with Big Max since it was his figures I was quoting but I'd hazard a guess that it is 90% think things weren't as they believed they were and 10% believe that there wasn't a problem with SF or its model.  The great majority of people I know that got caught up are no longer feeling warm and fuzzy about SF/EC or JC.
> 
> ...




Yes, thats my estimation of it too in Townsville.

Thanks

gg


----------



## Solly (3 July 2009)

Another three submissions of interest to the 

Inquiry into Financial Products and Services in Australia;


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub121.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub122.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub123.pdf


----------



## Garpal Gumnut (3 July 2009)

Solly said:


> Another three submissions of interest to the
> 
> Inquiry into Financial Products and Services in Australia;
> 
> ...




Mate you need to publish these submissions not as attachments but in full blown text.

The alleged behaviour of Cassimatis and the Banks needs to be seen in black and white.

Many Stormers would not have the ability to view these, and they certainly would not be published on the SICAG site.

gg


----------



## Ironhalo (4 July 2009)

Those last 3 submissions are particularly harrowing. 

And people say 'the banks were to blame!'. It is becoming readily apparent that Storm and CBA/BoQ were in a symbiotic relationship. Despite the sheet naivety of the people involved, it would appear that loan docs were fudged all over the shop. Manny knew EXACTLY what he was doing, and that his final gamble would send many people recklessly over the edge. When that didn't work, he simply took millions and ran.

How EC/JC can sleep at night on their Egyptian Cotton sheets in the Belmont mansion is beyond me.

Suicide would be an honourable way out for these bastards.


----------



## Garpal Gumnut (4 July 2009)

Ironhalo said:


> Those last 3 submissions are particularly harrowing.
> 
> And people say 'the banks were to blame!'. It is becoming readily apparent that Storm and CBA/BoQ were in a symbiotic relationship. Despite the sheet naivety of the people involved, it would appear that loan docs were fudged all over the shop. Manny knew EXACTLY what he was doing, and that his final gamble would send many people recklessly over the edge. When that didn't work, he simply took millions and ran.
> 
> ...




Tell it to SICAG mate.

They have ex Storm Advisers in the tent, and only bag the banks.

Many of the Storm Clients are trusting fools who still believe in the Storm model.

SICAG in no way are advising them otherwise, so they are ripe for the picking by other so called Financial Advisers.

gg


----------



## Ironhalo (4 July 2009)

Standing by for the re-emergence of Storm under one of the following self-grandiosing monikers...with help of course from some of the dodgier SICAG 'background advisors' and Manny's friends:

Tsunami Traders 'Like Thailand we strike best at Christmas'
Cyclone Securities 'Like Cyclone Tracy, we also strike best at Christmas'
Ignite Investments 'Watching your future ignite into flames!'
or....
Greedy-Pricks-With-Delusions-of-Grandeur-R-Us

I think even some of the honest SICAG members are being taken for a ride.


----------



## Garpal Gumnut (4 July 2009)

Ironhalo said:


> Standing by for the re-emergence of Storm under one of the following self-grandiosing monikers...with help of course from some of the dodgier SICAG 'background advisors' and Manny's friends:
> 
> Tsunami Traders 'Like Thailand we strike best at Christmas'
> Cyclone Securities 'Like Cyclone Tracy, we also strike best at Christmas'
> ...




You've got it in one mate.

The SICAG is a signifier for all that is wrong with Financial Management in Australia for the average person.

Even their site is a MLC clone, remeber MLC, gimme the money I'll pay when yer dead.

SICAG

A Quote from the SICAG site        "We will finish Strong"  

whos we?

A Quote from the SICAG site"        A Storm is Coming"   

They took the Storm logo down after I complained about its inapropriatness.

A Quote from the SICAG site         "Remember, the Storm Fees model charged nothing for discussions until something was actually done.  Most of the financial planning industry charge fees for each appointment regardless of outcome"...................

This is an undisguised endorsement of the Storm model and advice to stay away from reputable financial advisers who charge for advice and not for commission as Storm did. ASIC endorses time based advice and discourages the Storm based model of large commissons on products purchased. 

Is SICAG aware of this ?


gg


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## Solly (4 July 2009)

*"Some give advice, others only sell"*

"LABELLING of financial planners could be split between "sales people" and "advisers" under options being considered by a parliamentary inquiry into the fallout from Storm Financial's collapse."

More by Stuart Washington in the SMH is here;

http://business.smh.com.au/business/some-give-advice-others-only-sell-20090703-d7qp.html


----------



## Solly (4 July 2009)

*"Quick justice"
"Stuart Washington argues we could take a leaf from the US book on corporate failure"*

"The chairman of ASIC, Tony D'Aloisio, argues that the regulator was not at fault in Storm Financial and other collapses because it was the business model that failed. And it's not his job to police business models..."

More here in the Sydney Morning Herald;


http://business.smh.com.au/business/quick-justice-20090703-d7qr.html?page=1


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## Smiley (4 July 2009)

GG, Many of us spoke to SICAG founders about their intended inronic but inappropriate use of the symbol on the website and asked that it be removed; you do love taking credit . . .  
Solly, Please do not post entire submissions.  If people are accessing this site, they have the downloand ability to go to this link and open submissions themselves:
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm
I have been to SICAG meetings and found people very critical of EC and the Storm model; now seen to be product sales and not good advice. Hindsight i life is always fascinating, could have . . . but didn't  . . . the important thing here is to have ways to move on  . . . financially and emotionally, as the vast majority are doing.


----------



## Solly (4 July 2009)

Garpal Gumnut said:


> Mate you need to publish these submissions not as attachments but in full blown text.
> 
> The alleged behaviour of Cassimatis and the Banks needs to be seen in black and white.
> 
> ...





gg, I've been through and seen some very tough things in my life especially off shore, but reading a couple of those submissions left a bit of a lump in my throat..

I'm having lunch with a Stormer today, there's not much I can do but maybe a couple of cab sauvs will help temporarily deaden the pain. They are desperately trying to hold on to their house but probably don't have enough working life left in them to buy it back. But I really admire their shear guts and determination to keep on going and going and going...


----------



## Solly (4 July 2009)

Smiley said:


> GG, Many of us spoke to SICAG founders about their intended inronic but inappropriate use of the symbol on the website and asked that it be removed; you do love taking credit . . .
> Solly, Please do not post entire submissions.  If people are accessing this site, they have the downloand ability to go to this link and open submissions themselves:
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm
> I have been to SICAG meetings and found people very critical of EC and the Storm model; now seen to be product sales and not good advice. Hindsight i life is always fascinating, could have . . . but didn't  . . . the important thing here is to have ways to move on  . . . financially and emotionally, as the vast majority are doing.





Smiley, I believe gg's request regarding posting the submissions was really to add emphasis to the content of those submissions. Although some selective quoting may well add clarity in discussion to the factual positions of those impacted.


----------



## Garpal Gumnut (4 July 2009)

Smiley said:


> GG, Many of us spoke to SICAG founders about their intended inronic but inappropriate use of the symbol on the website and asked that it be removed; you do love taking credit . . .
> Solly, Please do not post entire submissions.  If people are accessing this site, they have the downloand ability to go to this link and open submissions themselves:
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm
> I have been to SICAG meetings and found people very critical of EC and the Storm model; now seen to be product sales and not good advice. Hindsight i life is always fascinating, could have . . . but didn't  . . . the important thing here is to have ways to move on  . . . financially and emotionally, as the vast majority are doing.




Mate, of course I take the credit, wouldn't you. The Storm advertisement is on a Storm Victims site for yonks, and 8 EIGHT hours after I give them a bollocking over it its down.  Wouldn't you take credit.. The last time I was that lucky was with an SP bookie when Fine Cotton romped home. I still have the pot of paint to remind me.

In fact credit is not the point. The poor Stormers are, and if ASF can make Mr O'Brien and Mr.Jelly more accountable , then we don't want the credit. We are just happy.

I still think they should take the advice down to go to financial planners who rather than charge by the hour as recommended take a percentage of some dodgy product they sell to them. Perhaps you could have a word to Mr.O'Brien and Mr.Jelly. You can take the credit and I'll keep the paint.

The SICAG hierarchy may not be all that bright, may have ex storm advisers in the wings to pick over the carcass, but they are , I would agree, good people trying to do their best.

And can you ask them to get rid of the money spider.

its rule 101 in lecture 101 of web development...do not have distracting money spiders on a serious website, 

You can take the credit when it comes down,

gg


----------



## Steve Borden (4 July 2009)

Garpal Gumnut said:


> I still think they should take the advice down to go to financial planners who rather than charge by the hour as recommended take a percentage of some dodgy product they sell to them.
> 
> gg




gg

I think you will find the comments about the charging by advisors was in relation to some Townsville advisors charging hundreds of dollars to confirm that they (the client) we in a world of hurt and they would need to sell the family home.

All well intentioned and prudent but to then mix this up with the upfront model used by Storm (it was not a commission model) and suggest the latter was/is more effective reflects an illogical comparison. 

In both instances the client was paying for bad advice.

The storm fee factory was able to sustain the upfront model only because the fees generated from old investors were subsidising the advice being provided to new investors pending the investment and so on. This is why storm eventually failed, no new fees coming in meant they could not sustain the sausage factory and EC's lifestyle.

Put simply storm's advice was bad, their fees astronomical and their exit strategy was EC's relationship with the CBA. It wasn't a matter of if but when it would all end in tears.

You, me and others can agree on this all we like but there remains many people wed to the belief that storm and EC did nothing wrong. 

Unfortunately it seems their minds will not be changed and to this end have gone back to a former storm adviser in Townsville. Go figure.


----------



## chrisgee (4 July 2009)

well i cant belive what has been happening this week-theres a lot to read again- Im really starting to get grumpy with what im reading -im feeling grumpier than mr gg with his rumbling prostate I reckon i make mr gg look like gandhi with the way i am feeling at the moment. i read that mr & mrs c also borrowed against thier house/s to invest in storm--is this right? they dont seem to be stacking shelves at coles at night to make ends meet- they must have done some wise things with thier money-why has mr c gone quiet? -didnt his website site say he wouldnt rest until he got justice for everyone? is mr c ever going to say anything? why is he so so quiet ? he had plenty to say for years and now nothing -i read some of the subs to the enquiry-if what some people are saying is really true then some poeple are in really big trouble- i think the banks have a lot to answer for-why would they risk depositors funds lending to people to invest in this type of scheme?? maybe they knew they would win because they had the security of peoples homes-i remember when i got my first bank loan they almost wanted my first born as security- something smells really smells-theres not much that really can be said i suppose but its good to be able to vent a bit on forums like this-i know others are doing it worse but everyone has just got to hang in there until all this gets sorted out-i dont know what is the best way to go but everyone has to do what ever they can to make sure they dont get beaten by this- with mr norris saying hes not too proud of the way the comm bank has behaved in all of this gives some glimmer of hope that some will be helped out a bit-i remember carey wrote that most stormers really will do anything they can to hold on to ythe family home-yep carey thats right mate.


----------



## Garpal Gumnut (4 July 2009)

Steve Borden said:


> gg
> 
> I think you will find the comments about the charging by advisors was in relation to some Townsville advisors charging hundreds of dollars to confirm that they (the client) we in a world of hurt and they would need to sell the family home.
> 
> ...




Steve I accept your points.

But lets try and put these wood ducks in to best practice.

The advice may have been moot on a certain date in DEC 08 or JAN 09, but it is crap advice, on the SICAG site, now ?Jul0409.

Nobody goes to a financial adviser for free advice " As Storm did" according to the SICAG website.

It is an endorsement of the Storm Model, from a mob who have ex Storm Advisers in the Tent.

I'm going to stop posting about this as its obvious to Blind Freddie that the Wood Ducks, Storm Clients are dim, and that SICAG will do them over as Manny did, that ex MAnny mates advise SICAG, and they will all be poorer but happy in their godbothering belief in Manny and SICAG.

gg

gg


----------



## mikes (4 July 2009)

it was some ride, taken with a likeable jockey , "qualified to australian standards" on a race track , "regulated under australian rules".

2004   retired from work, cashed in super est. $300,000 and owned house outright with no debts. 

nov 2007  net equity in share investments of $1.1 million & owned house on which $250,000 mortgage owing

9 oct 2008  net equity in share investments of $100,000  & owned house on which $250,000 mortgage owing

feb  2009  share investments all sold, $105,000 owing in share sale washup, and owned house on which $250,000 mortgage owing

mar 2009  est. assets of $100,000 cash  & no owned  house & now renting.


in context  -    "non storm" investors in shares, who did not borrow as of mar 2009 have shares worth est. 50% of what the shares were worth in  nov 2007.
if had not got involved with storm, would now probably own shares of est. value $150,000 and living in owned house with no mortgage.


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## Garpal Gumnut (4 July 2009)

The money spiders have disappeared. on the SICAG site.

I'd guess that someone not connected with ASF has suggested this.

See my previous posts on.

Storm advertising on SICAG site................gone
Money spiders........................................gone

The last to go will be  the crap advice to see Financial Advisers who don't charge upfront fees as Storm did, but put the wood ducks into crap investments and charge 7% when you can do it for 0.00% through Comsec.

And after that we will get disclosure about SICAG.

How many ordinary victims are on the Committee.
How may Financial Advisers are on the Committee
How many ex Storm advisers e,g O'Brien Jnr and Jelly are advising them.

gg


----------



## maccka (4 July 2009)

Garpal Gumnut said:


> when you can do it for 0.00% through Comsec.




GG,

Just wondering mate...

Why do you think any ex-Storm investor would go near CommSec when it is associated with CBA?  

cheers
Maccka


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## Ironhalo (4 July 2009)

Funny that. I have never had a drama with CommSec as I believe they are a seperate entity to the Margin Lending division.

I have made more money courtesy of CommSec then Storm ever came close to making me.


----------



## Garpal Gumnut (4 July 2009)

maccka said:


> GG,
> 
> Just wondering mate...
> 
> ...




Once greed overcomes fear they will be back to CBA/WBC/ANZ/BOQ/MQG or someother. Some may have never left. Ask Manny where he banks mate

gg


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## darkside (4 July 2009)

Garpal Gumnut said:


> The money spiders have disappeared. on the SICAG site.
> 
> I'd guess that someone not connected with ASF has suggested this.
> 
> ...






Ah yes , i had 2 goes at reading the content on their site, 1st and last , because the "money spiders" made it near on impossible, will have another look now the crawley spiders have gone..


----------



## Garpal Gumnut (4 July 2009)

Garpal Gumnut said:


> The money spiders have disappeared. on the SICAG site.
> 
> I'd guess that someone not connected with ASF has suggested this.
> 
> ...






Ironhalo said:


> Funny that. I have never had a drama with CommSec as I believe they are a seperate entity to the Margin Lending division.
> 
> I have made more money courtesy of CommSec then Storm ever came close to making me.






darkside said:


> Ah yes , i had 2 goes at reading the content on their site, 1st and last , because the "money spiders" made it near on impossible, will have another look now the crawley spiders have gone.




Yes the money spiders have gone.
The Storm ad has gone.

Hey these guys are starting to look more Professional.
However they still leave the disclaimer about Manny at the bottom of the page, where few go, as its such a crap site, you'd never navigate to the end.

Perhaps the Cassimatis disclaimer should be at the TOP of THE SITE.

gg


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## bunyip (4 July 2009)

Did anyone see the programme last night on SBS about the boom of the roaring 20's and the subsequent 1929 stock market crash?

There were many similarities with the boom from early 2003 to late 2007 and the subsequent 2008/09 crash.

The banking system in the 1920's was largely unregulated, allowing for the creation of new financial products designed to appeal to investors.
Adventurous lending policies meant that much of the investment in the stock market was with borrowed money. Margin lending was rife, with many investors borrowing several times the net worth of their assets to invest in the market.
The reckless level of borrowing was fuelled by easy credit and an almost unshakeable belief that the market would keep going up. 

Stock market exuberance gripped the country, with every man and his dog investing in stocks. Some of the more astute financial analysts and investors saw what was coming, and gave repeated warnings for at least a year before the crash. They were mostly ignored. 
Joe Kennedy, father of  the future US president JFK, commented that...*'When the shoe shine boys know as much about stocks as I do, maybe it's time to get out of the market'.* Kennedy did exactly that.

When the crash finally came, banks called in margin loans and investors were wiped out en masse, including many who were formerly multi millionaires. 
(I imagine that investors cried foul and bad-mouthed the banks for foreclosing on loans, just like they're doing this time around.)
A severe recession followed as the economy collapsed and employment soared out of control. The recession deepened into what is now know as 'the great depression'.
Thousands of banks were wiped out -  2000 US banks went broke in 1931 alone.
When Franklin Roosevelt became US president in 1933, he introduced measures to regulate the banking system so as to avoid a repeat of the boom/bust cycle.

Does any of the above sound familiar? Isn't it all very similar to the boom from 2003 to late 2007, followed by the devastating market crash of 2008/09?
Like President Roosevelt back in 1933, President Obama is now introducing regulation back into the US banking system in an effort to avoid another boom/bust cycle. 
You wonder why regulation was ever removed from the banking system in the first place. Or whether it will be removed again one day, leaving the door wide open for the whole boom/bust cycle to be repeated.

Does anyone still believe Manny Cassmatis and certain SICAG members who claim that the 20008/09 financial meltdown and market crash were unprecedented?


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## darkside (4 July 2009)

Bunyip , yes i was watching it , and found it quite good, it certainly explained a lot of things that i never knew went on behind the scenes, alas , during one of the commercial breaks i closed my eyes for 2 seconds and fell asleep , when i woke SBS were up to their usual, of showing naked people for no other reason than they can , mind you i didn't shut my eyes then .

I will be down loading the stockmarket story and watching it again when i am more awake, may even have another peak at the art show after as well.


----------



## DocK (4 July 2009)

Reminds me of some song lyrics.  From the Hilltop Hoods - Audience with the Devil:

Chorus
Sitting with the devil, this is what I learned,
Apart from the ways a human soul can be burned,
It’s that though we learn from our mistakes we’re condemned,
To make those same mistakes again and again,
Sitting with the devil, this is what I learned,
Apart from the ways a human soul can be burned,
It’s that though we learn from our mistakes we’re condemned,
To make those same mistakes
again and again,
again and again,
again and again,

again and again.

Or for the older forumites - Everything Old is New Again!


----------



## bunyip (4 July 2009)

DocK said:


> Reminds me of some song lyrics.  From the Hilltop Hoods - Audience with the Devil:
> 
> Chorus
> Sitting with the devil, this is what I learned,
> ...




Yeh, the same mistakes are destined to be repeated from one generation to the next....human nature guarantees it.

In my last post I said 'employment soared out of control'. I did of course mean to say that _*un*_employment soared out of control.


----------



## Garpal Gumnut (4 July 2009)

From the SICAG site







> A Storm is Coming! …
> 
> 
> 
> ...




Lets hope they put the Cassimatis disclaimer at the top of the site otherwise the Stormers may get ripped off by the next generation of Mannies.


gg


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## Ironhalo (5 July 2009)

The latest SICAG email update hit my friends today...no surprise there is not ONE mention of any media comment towards Manny.

Here are some excerpts, seriously guys, I know you are trying to achieve justice, but it's time to turn one barrel of the 12 gauge on Storm for a change. I applaud the social work SICAG is achieving, but WHY won't you turn ANY attention on the Cassimatis's? An explanation is owed:

_It is necessary to make a comment in regard to two connected issues that potentially will cause most concern in the process of reaching a satisfactory conclusion to this dispute. The bank in its rhetoric is unmistakeably implying that it should be understood that the share market had suffered unprecedented falls and that they will not willingly be responsible for addressing losses as a result. The other connected issue is the question of who was responsible for managing our margin loans and making the margin calls in the face of a ‘tanking market’. Members will be aware that the bank has been sheeting the blame entirely back to Storm and to the clients on this question. However we feel sure that members will be unanimous in their belief that despite the market volatility, the investment model they invested in which was conducted in a ‘joined at the hip’ relationship by Storm and CBA, under no circumstances should it have allowed their financial wellbeing, along with their lives to be totally decimated. For the bank to maintain the stance that their Terms and Conditions are legally binding and that this entitled them to sit on their hands and do nothing while watching their clients be destroyed, for no other reason other than that they simply could, will by any standard of unconscionable conduct be unsustainable in the face of intense negotiations. _

That's great, now where's the pressure on Manny? Why is he sitting but 20km away and you guys with your presence are doing nothing to ask him where it all went awry?

_The bank managers who were too good to be true

Duncan Hughes

The mystery of how two BoQ managers outdid all their peers may be unlocked by the Storm inquiry.
Being the top-performing branch in Bank of Queensland's 215-strong national network is no small feat. But doing it two years in a row earned a stream of accolades for Declan Carnes and Matthew Buchanan, the owner-managers of Bank of Queensland's North Ward branch on the outskirts of Townsville. Carnes was the celebrated branch manager of the year in 2006 for achieving sales three times budget, and Buchanan shared the glory from the unprecedented pinnacle of back-to-back top performances. Chief executive David Liddy was gushing: the two owner-managers "represent the bank's five core values - passion, achievement, courage, integrity and teamwork - and this is reflected both in their growing customer base and their branch's amazing financial performance". Not everyone was enraptured. "Bank management was always running around telling other branches that we could do it like the North Ward," said Jeff Jones , a former Bank of Queensland branch manager who has been involved in finance for 30 years.
"But they would never tell us how they did it." The branch's "amazing" financial performance is under scrutiny as part of a seven-month criminal and corporate investigation into the collapse of Storm Financial by the Australian Securities and Investments Commission, a federal parliamentary inquiry and a pending legal action by former customers. The Storm disaster has ensnared Bank of Queensland and Commonwealth Bank of Australia, the two lenders with the strongest ties to the Townsville-based financial advisory firm that collapsed in January, sinking thousands ofcustomers in hundreds of millions of dollars of debt. For months, despite mounting evidence of dodgy loan applications, both banks stood their ground that they had done no wrong. The mess Storm clients were in was solely due to the failed firm's advice and of the clients' own making. "I believe the situation they got themselves into is their responsibility," CBA chief Ralph Norris said in February. But last week - just before the inquiry's first public hearing and following ASIC's suggestion that it could use its own powers to force a settlement for Storm clients - Norris recanted. In an extraordinary about-face Norris admitted his bank had identified shortcomings in lending to Storm clients and promised to put things right. This week he went even further, agreeing to work with law firm Slater & Gordon, which is representing 1300 clients, to implement an accelerated resolution process and bringing in former High Court judge Ian Callinan as an independent arbitrator. Liddy dug in. After months of fobbing off detailed inquiries from TheAustralian Financial Review about Bank of Queensland's involvement and exposure Liddy finally went on the record on Thursday to clarify what the bank called "significant misinformation". There was no evidence of improper or dishonest practices or conduct, no evidence of misleading or deceptive conduct, no proceedings from Slater & Gordon and no formal investigations from ASIC, the bank said in a 15-point rebuttal aimed at soothing investor concerns about any costly fallout. ASIC demanded a rebuttal of the rebuttal, which Bank of Queensland was forced to issue on Friday afternoon. His comments that it was not facing any legal action were pilloried by lawyers and former investors.

According to the bank, there are about 319 customers who were associated with Storm with aggregate loans of about $105 million. It would not comment on other Bank of Queensland branch managers' claims that the vast bulk, if
not all, came from the North Ward branch. Through its franchise model the bank pays owner-managers initial, or
upfront, commissions of about 0.5 per cent and trailing commissions of some 0.15 per cent, on loans. Based on the bank's numbers that would mean in the four years to the end of 2008 the branch earned about $1 million in
commissions from bank loans alone. But former managers, like Jones, claim the branch at its peak was generating
loans of between $20 million and $30 million a month, massively inflating commissions. The bank would not comment. *According to Storm's former national development manager, Ron Jelich, whohas provided lengthy statutory declarations to the parliamentary inquiry, the North Ward branch and Storm headquarters had worked "hand in glove" for several years. "I have accounts from three former Townsville Storm staff that Buchanan was in their office every day," Jelich said.* Buchanan referred questions to the head office, which refused to comment. Carnes would not comment. The AFR has previously reported on several cases of former Storm clients who
claimed they were unaware that they had taken out Bank of Queensland loan and remortgages because all the paper work was handled by Storm advisers._

This is all well and good, and I commend SICAG on trying to find answers. The question is, why aren't SICAG looking for the obvious answers from the guy who is actually responsible and lives but 20km away in Belmont behind iron gates?

The bias is really getting old.


----------



## Ironhalo (5 July 2009)

Storm advisor training sessions:

http://www.fukung.net/v/149/management.jpg


----------



## Garpal Gumnut (5 July 2009)

Ironhalo said:


> Storm advisor training sessions:
> 
> http://www.fukung.net/v/149/management.jpg




?           SICAG

gg


----------



## Solly (5 July 2009)

I had a drink with a non SICAG Stormer yesterday, I thought he's a bit fragile at the moment and maybe not really sure which way things will go. 

He's not very glowing in his assessment of his own abilities in picking wealth creation strategies, financial advisers or banks.

He's facing 20 years of work to buy his house back if things don't go well with the actions against the various parties. He'll be able to enjoy owing it again in his seventies. 

I asked the leading question about who he thought was responsible for his predicament. I must admit I was expecting good spray about EC & the company but his main concern was why the Banks lent him money. He had a long history with his financial adviser, MLC and the Comm Bank.

I've know this guy for over 20 years, a straight down the line regular trusting Aussie. I wasn't fully aware of his toxic exposure to Storm until it all went pear shaped and it was too late. He and his wife are doing it tough at the moment but as he said, not as tough as some other Stormers.

The stress on him is really starting to show he's looking a bit gaunt and greyer but the one thing that struck me was his attitude. He says he got himself into this, so he's the one that's going to get himself out. 

When we parted I wished him good luck in getting back to an even keel, he thanked me but he said luck will have nothing to do with it. 

Gotta admire that. 

I hope he posts some updates here.


----------



## Garpal Gumnut (5 July 2009)

Solly said:


> I had a drink with a non SICAG Stormer yesterday, I thought he's a bit fragile at the moment and maybe not really sure which way things will go.
> 
> He's not very glowing in his assessment of his own abilities in picking wealth creation strategies, financial advisers or banks.
> 
> ...




All true mate,

My mate who was the subject of the first post on this thread is on zerloft from his doc, and is a shadow of his former self. 

He still believes in Manny and is a SICAG believer, though not a member.

They reckon the old Manny could sell bibles in a brothel.

Charisma mate, charisma.

gg


----------



## bunyip (5 July 2009)

Ironhalo said:


> Storm advisor training sessions:
> 
> http://www.fukung.net/v/149/management.jpg




LOL....Good to see a man whose retained his sense of humour even after getting stormified!


----------



## Garpal Gumnut (5 July 2009)

Wise advice for Storm investors from the Sydney Morning Herald.

http://business.smh.com.au/business...ponzipacking-spivs-20090703-d7qu.html?page=-1

gg


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## bunyip (5 July 2009)

Garpal Gumnut said:


> Wise advice for Storm investors from the Sydney Morning Herald.
> 
> http://business.smh.com.au/business...ponzipacking-spivs-20090703-d7qu.html?page=-1
> 
> gg





Some great advice on there eh Garpal!

Every boom/bust teaches the same lessons....1929, 1987, 2008/09, and various other significant boom/busts. 
But the lessons are forgotten by many by the time the next boom/bust cycle rolls around.

I particularly liked the following extracts from the link you posted.

_4. Tread warily with debt and avoid it if at all possible.When it comes to stocks, debt is an accelerant. It turbocharges those gains when the market is running hot. But during the inevitable crash, it will destroy you.

The most you can lose with your own money is 100 per cent.

With debt, you can lose a hell of a lot more. Just ask anyone who invested with Storm Financial or who was enticed by banks offering margin loans for shares. When the property market falls, banks rarely call in a loan or ask you to top up the security. With shares, they don't hesitate.

5. Do your own research. Don't rely solely on financial advisers. Some are good. But many know little more than you and, even worse, are putting your money into things that pay them the biggest commission, not the biggest return for you. They earn commissions even when you are going down the gurgler.

Fees and commissions were one of the biggest rorts of the boom years. And not just for advisers. Macquarie, Babcock and all the property trusts sucked in your cash, loaded up with debt and then paid themselves handsomely.

The more they borrowed, the more they spent, the bigger their fee. And those big fat dividends they paid you? They borrowed the money for them as well._


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## bunyip (5 July 2009)

Amid the repeated claims from EC, some banks, and some folks in SICAG that the 2008 slump was unprecedented, I thought it appropriate to post the following article on this forum. It appears to have been written during the boom leading up to the 2008 market crash. 
It refers to the US market - the corresponding slumps in the Australian market may have been more or less than the US figures, but would nevertheless have been significant.
I'm not sure why the 1987 crash isn't included among the worst ten crashes.

........................................................................................................................................

_In the midst of the three-year bull market that everybody around the world has been enjoying, it is worth getting a perspective of the kind of losses that are possible on the stock market. Most of the 10 crashes below happened over more than one year rather than in short durations (such as the 1987 Black Monday) but were no less painful for those involved. In fact, slow deaths are often more painful. The ranking and data were obtained from a financial article on About.com titled "Worst Stock Market Crashes" written by Dustin Woodward, and considers only those stock market crashes after 1900. A trivial noted by the author: 6 out of the top 11 crashes started in either September or November.

Some personal notes about the crashes:
1) It is interesting to note that all but two of the 10 most severe crashes happened in the early part of the 20th century, which suggests that either the economy has acquired more sophisticated self-correcting mechanisms or that the Federal Reserve's economic management has worked well in recent times. 
2) 5 of 10 have been in periods leading to war, during war and even after war (1919-21), with another (2000-02) at least partly due to imminent and limited war (terrorist, Iraq). Political problems weigh heavy on the market more than anything else.
3) Two of the four most severe crashes have been linked to the Great Depression, and there was a whole 2 decades where a secular bear haunted the economy. This is the kind of long-term gloominess that can kill off the spirit of the last bulls.

For those who think this is an inauspicious article, read no further.

10th Worst Stock Market Crash: 2000 - 2002
Key events: Tech bubble bursting, September 11th terrorist attack 

Date Started: 1/15/2000
Date Ended: 10/9/2002

Total Days: 999
Starting DJIA: 11,792.98
Ending DJIA: 7,286.27
Total Loss: -37.8% 

9th Worst Stock Market Crash: 1916 - 1917
Key events: US being drawn into World War 1

Date Started: 11/21/1916
Date Ended: 12/19/1917

Total Days: 393
Starting DJIA: 110.15
Ending DJIA: 65.95
Total Loss: -40.1% 

8th Worst Stock Market Crash: 1939 - 1942
Key events: World War 2, attack on Pearl Harbour

Date Started: 9/12/1939
Date Ended: 4/28/1942

Total Days: 959
Starting DJIA: 155.92
Ending DJIA: 92.92
Total Loss: -40.4% 

7th Worst Stock Market Crash: 1973 - 1974
Key events: Vietnam war, Watergate scandal 

Date Started: 1/11/1973
Date Ended: 12/06/1974

Total Days: 694
Starting DJIA: 1051.70
Ending DJIA: 577.60
Total Loss: -45.1%

6th Worst Stock Market Crash: 1901 - 1903
Key events: Assassination of President William McKinley; a severe drought causing alarm about US food supplies

Date Started: 6/17/1901
Date Ended: 11/9/1903

Total Days: 875
Starting DJIA: 57.33
Ending DJIA: 30.88
Total Loss: -46.1% 

5th Worst Stock Market Crash: 1919 - 1921
Key events: Followed a post war boom, bursting of the first big tech bubble- the automobile sector (but after bottoming, this decade saw tremendous growth in the stock market and the economy, often called the roaring twenties)

Date Started: 11/3/1919
Date Ended: 8/24/1921

Total Days: 660
Starting DJIA: 119.62
Ending DJIA: 63.9
Total Loss: -46.6%

4th Worst Stock Market Crash: 1929
Key events: End of the roaring twenties, and kicked off the Great Depression

Date Started: 9/3/1929
Date Ended: 11/13/1929

Total Days: 71
Starting DJIA: 381.17
Ending DJIA: 198.69
Total Loss: -47.9%

3rd Worst Stock Market Crash: 1906-1907
Key events: The "Panic of 1907" due to a credit crunch in New York, as well as gloom due to President Roosevelt's antitrust drive

Date Started: 1/19/1906
Date Ended: 11/15/1907

Total Days: 665
Starting DJIA: 75.45
Ending DJIA: 38.83
Total Loss: -48.5%

2nd Worst Stock Market Crash: 1937-1938
Key events: Legacy of Great Depression, war scare and Wall street scandals

Date Started: 3/10/1937
Date Ended: 3/31/1938 

Total Days: 386
Starting DJIA: 194.40
Ending DJIA: 98.95
Total Loss: -49.1%

Worst Stock Market Crash: 1930-1932

This is the grand daddy of them all. Investors lost 86% of their money over this 813 day beast. This market crash combined with the 1929 crash, makes up the Great Depression. 

If you had $1000 on 9/3/1929 (beginning of the 4th worst crash, it would have gone down to a whopping $108.14 by July 8th, 1932 (end of the worst crash) or an 89.2% loss. To recover from a loss like that, you would have to watch your portfolio go up 825%! The full recovery didn't take place until 1954, 22 years later! 

Date Started: 4/17/1930
Date Ended: 7/8/1932

Total Days: 813
Starting DJIA: 294.07
Ending DJIA: 41.22
Total Loss: -86.0%_


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## Dark Leopard (6 July 2009)

Good Citizens, 

Again I ask, If you have anything to offer the 
Inquiry into Financial Products and Services in Australia,
you can make a submission.

Remember when making a submission you are protected by 
parliamentary privilege once the submission is accepted.

Dark Leopard: END of Transmission.


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## Ironhalo (6 July 2009)

Thank you Batman, and if the citizens of Gotham need you, we'll be sure to shine your symbol on the clouds.


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## Fatcat (6 July 2009)

When is Manny due to front up before the parlimentary enquiry?


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## jonnycage (6 July 2009)

yes def leppard,  when are you due ?.   ps  your last album tanked


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## Smiley (6 July 2009)

All I have heard is that EC is not appearing before the inquiry in Townsville - perhaps Brisbane . . . 
It's hard to figure out many stormfied views on EC but the vast majority I know are not postive about him and would never even invest again through a financial planner, if they had the $.  The word of mouth, referral from relatives, friends, bankers has creted tension in many relationships but it sure worked to get us in.
While EC was a veyr good salesman he was not that impressive as a speaker and maybe people just thought he is one of us, in his blue jeans - a down to earth guy who has made good  . . .


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## Big Max (6 July 2009)

Smiley said:


> GG, Many of us spoke to SICAG founders about their intended inronic but inappropriate use of the symbol on the website and asked that it be removed; you do love taking credit . . .
> Solly, Please do not post entire submissions.  If people are accessing this site, they have the downloand ability to go to this link and open submissions themselves:
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm
> I have been to SICAG meetings and found people very critical of EC and the Storm model; now seen to be product sales and not good advice. Hindsight i life is always fascinating, could have . . . but didn't  . . . the important thing here is to have ways to move on  . . . financially and emotionally, as the vast majority are doing.




Ah, another voice of reason in this debate. Thanks Smiley.

By the way, GG, there is a world outside Aussie Stock Forums. You may spend your life in this world, but SICAG is working very hard IN THE REAL WORLD to get an effective outcome for its members. SICAG is not perfect. You are quick to point out the negatives . . . what about acknowledging the positives?
Big Max


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## Big Max (6 July 2009)

GG, they are/were not money spiders; they are/were ants. The ant metaphor grew out of the SICAG information road trip earlier this year. We were sitting on the verandah of a  Storm client's house in Rocky where we were being billeted when Co-chairman Noel O'Brien was attacked by some nasty little black ants. That prompted a humorous discussion about how the ants reminded us of SICAG and its strategy to get EC/JC and the banks to admit their role and their level of culpability in the Storm affair and breast the negotiating table. The man running the website (Luke Vogel) thought it worthwhile putting some active ants on the site. Not all that Machiavellian, hey GG?

You say the SICAG website is a clone of the MLC site. Maybe. The SICAG site was build from a Microsoft template. Again, not all that Machiavellian.

We are all looking forward to seeing EC/JC under the spotlights at the two current inquiries and perhaps other subsequent, related hearings.

Big Max


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## Solly (6 July 2009)

Another three submissions of interest to the 

Inquiry into Financial Products and Services in Australia;


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub125.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub126.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub127.pdf


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## Garpal Gumnut (6 July 2009)

Smiley said:


> GG, Many of us spoke to SICAG founders about their intended inronic but inappropriate use of the symbol on the website and asked that it be removed; you do love taking credit . . .
> Solly, Please do not post entire submissions.  If people are accessing this site, they have the downloand ability to go to this link and open submissions themselves:
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm
> I have been to SICAG meetings and found people very critical of EC and the Storm model; now seen to be product sales and not good advice. Hindsight i life is always fascinating, could have . . . but didn't  . . . the important thing here is to have ways to move on  . . . financially and emotionally, as the vast majority are doing.




Smiley , if the submissions are in the public domain, why are you against them being published in their entirety.

The ones presented so far on this site, ASF, not SICAG , are very damning of Manny, Storm advisers and the Banks.

Why should the poor Storm victims who may not be internet savvy have to go a step further to access the submissions. What is there to hide?

gg


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## Smiley (6 July 2009)

GG, post away  . .  i have no objection to inquiry submissions being read by as many as possible. . .  just seems a doubling up . . .  in fact i have had my hand in a couple of them and want as much openness and transparency and visibility of these stories., . . think ya got me wrong. . . .

great end to SBS story on 1920s stockmarket crash . . 
"History repeats itself, , ,  human folly and greed are much stronger forces in financial affairs than reason and restraint" 
. . . sounded so familiar as at the heart of that crash was borrowing to invest in shares with big loans. . . .


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## Solly (7 July 2009)

*"Advisers calling for an end to commission payments"*

An article by the author of submission number 40 to the

Inquiry into Financial Products and Services in Australia.

More here on LIVE-PR; 

http://www.live-pr.com/en/advisers-calling-for-an-end-to-r1048293822.htm


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## Garpal Gumnut (7 July 2009)

Dear Solly, darkside, bunyip and others who have toiled to inform the Storm investors of their rights and options in relation to EC, Storm Advisers and the Banks.

The SICAG site has now.

1. Gotten rid of the money spiders.

2. Gotten rid of the Storm advert.

This is in large part due to to your efforts and those of other ASF posters and Storm investors contacting the SICAG site.

May I ask you all to persist in asking that a paragraph on the left lower part of the SICAG site be altered. It appears to endorse the Storm Model, of not charging upfront fees, rather sugesting that fees be paid on committment to investments with Financial advisers.

This contravenes all common sense and professional advice presently given to investors.

I am sure this is an oversight on SICAG's part but it has been repeatedly pointed out to them. 

Somebody in SICAG needs to remove this reference to Storm.  



> We have been approached by several organisations wanting to advertise their services on our web-site.
> 
> 
> 
> ...






This is not good advice to be giving to injured Storm Investors.

I endorse the SICAG's efforts to take care with all advisers.

But advising them to follow Advisers who behave as Storm did is unwise.



gg


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## Solly (7 July 2009)

Another submission of interest to the 

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub130.pdf


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## -Bevo- (7 July 2009)

Smiley said:


> great end to SBS story on 1920s stockmarket crash . .
> "History repeats itself, , ,  human folly and greed are much stronger forces in financial affairs than reason and restraint"
> . . . sounded so familiar as at the heart of that crash was borrowing to invest in shares with big loans. . . .




I didn't see it on SBS but I think your referring to this documentary that is posted on you tube,

http://www.youtube.com/view_play_li...29+-+The+Great+Wall+Street+Crash+&+Depression

Wonder if Grandpa Cassimatis was advising people to borrow truck loads of money to invest in stocks back then, stormers might find this doc interesting.


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## Solly (8 July 2009)

Another two submissions of interest to the 

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub131.pdf


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub133.pdf


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## Solly (8 July 2009)

*"Complaints over CGI systems failure continue"*

"More former clients of Storm Financial and Colonial Geared Investments have voiced frustration about perceived inadequacies in the systems of CGI for handling the share market volatility of last year."

More by Lucinda Beaman in Money Management;

http://www.moneymanagement.com.au/article/Complaints-over-CGI-systems-failure-continue/489596.aspx


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## Garpal Gumnut (8 July 2009)

Solly said:


> *"Complaints over CGI systems failure continue"*
> 
> "More former clients of Storm Financial and Colonial Geared Investments have voiced frustration about perceived inadequacies in the systems of CGI for handling the share market volatility of last year."
> 
> ...




This could be why EC is so adamant he was correct, it will be interesting to see what the lawyers and judges decide.

gg


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## Judd (9 July 2009)

I have read most of the submissions.  As a general observation, the aspect which comes through to me is that, in a lot of these cases, the people had achieved, or were well on their way to achieving, their retirement goals.  They just didn't need Storm or any financial planner.

So why Storm?  Trying to keep up with the Jones'?  Dissatisfaction with their own very worthy efforts?  A pining for the wine dark seas of the Aegean - as displayed in retirement pamphlets - but income only allowing an annual dipping of the toes at Trinity Beach?

Only they will know I suppose.  A very sad outcome for them in any event.


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## tasmart (9 July 2009)

Judd said:


> I have read most of the submissions.  As a general observation, the aspect which comes through to me is that, in a lot of these cases, the people had achieved, or were well on their way to achieving, their retirement goals.  They just didn't need Storm or any financial planner.
> 
> So why Storm?  Trying to keep up with the Jones'?  Dissatisfaction with their own very worthy efforts?  A pining for the wine dark seas of the Aegean - as displayed in retirement pamphlets - but income only allowing an annual dipping of the toes at Trinity Beach?
> 
> Only they will know I suppose.  A very sad outcome for them in any event.




I felt the same on my reading. Many were relatively diversified - owned house, share portfolio, super - but were lead into an all eggs + borrowed ones into one basket which cost quite a bit as well.

Sadly it has harmed a lot of people. Hopefully others will learn and avoid such a scenario.


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## Kez180 (9 July 2009)

I think storm's marketing centered around making people scared of things like inflation, becoming a burden on others and of missing the gravy train...

Once they were scared, storm could step in and 'save' them...


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## Steve Borden (9 July 2009)

Kez180 said:


> I think storm's marketing centered around making people scared of things like inflation, becoming a burden on others and of missing the gravy train...
> 
> Once they were scared, storm could step in and 'save' them...




The risk from doing nothing was greater than the risk from doing something...


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## tasmart (9 July 2009)

Steve Borden said:


> The risk from doing nothing was greater than the risk from doing something...




Yeah - that is the financial planners marketing slogan!

Sadly the relative risks were not actually appreciated!


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## Julia (9 July 2009)

Kez180 said:


> I think storm's marketing centered around making people scared of things like inflation, becoming a burden on others and of missing the gravy train...
> 
> Once they were scared, storm could step in and 'save' them...



You're very likely right.  Nothing as motivating as fear.


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## Solly (10 July 2009)

For those interested, Slater and Gordon's FAQs in relation to the action against Storm was updated on July 1.

See the FAQs at this link;

http://www.slatergordon.com.au/pages/class_actions_stormfin.aspx


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## Anastasia (10 July 2009)

Everyone has their story for joining Storm. Ours  was simple. True we had paid off our home, both supers accumulating, and the bank account growing. 

And this was the problem. We were advised by many not to let our money just sit in the bank earning low interest. "Get it to really work for you". Advisers on TV (money talk shows) were telling us to put our spare cash into indexed funds for our retirement. The government was telling a similar story so as not to have so many dependent  pensioners. 

So we thought, 'Yes this makes sense to us". But where to start as we knew nothing about investing. So we sought the advice of a couple of what we thought were reputable advisers, Cassimatis Securities Pty Ltd (later Storm) being one of them.....and in the final washing Cassimatis Securities Pty Ltd seemed the one...especially since our trusted friend and acquaintance with our MLC super fund that was doing very well, as well as our accountant though all sounded good and above board. And it actually was back in 1997. 

We believe the wheels of conservative investing fell off three odd years ago when they developed their own funds, and their priorities changed considerably.....and that is the sad story we are now in.....our story of why we joined Storm.


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## chrisgee (11 July 2009)

gee anastasia your story sounds very familiar-i wonder why! yep it was all about trust-something we are finding a bit hard to do again- how do you know who to trust?? i rememnber those comm bank school banking passbook years ago-those comm bank tin money boxes that you would put your one,two and five cents in and take to the bank and get emptied- gee it seems like they try to get you very very early to trust the banks-that is why i cant beleive what has happened now- you think you are doing the right thing in dealing with big banks and a financial mob that has been around for ages-then look what happens the whole thing turns to crap-i hope that people who read this take a bitof a lesson about the banks-friends and family are not happy with what has happened and beleive me they are now very carefull which banks they will now do business with. maybe we should bring back the community type building societies-what do you think?? and there is still not a peep from mr c- i'd really love to hear from him-i would like to speak to him directly . does anybody know his number or his email ? big max can you help?


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## Monario (11 July 2009)

Julia said:


> Excellent summary, Iggy Pop.
> 
> Monario, the tiny amount involved in that very small interest rate rise just on the interest owing by Storm clients, wouldn't even register on CBA's bottom line!  To suggest the rise had anything to do with Storm is simply ridiculous.
> CBA have already stated that they will not be 'materially affected' by the entirety of the Storm debacle.
> ...


----------



## Judd (12 July 2009)

Monario said:


> Just wanted to update you guys on what I know!!!
> 
> maybe I was been a little over the top stating that the rise had anything to do with Storm... BUT...
> 
> ...




That is good to hear but bear in mind that the cost to the CBA is a *one-off* hit.  From what I have read and understand, CBA is reviewing the loans only not the investment losses so, assuming that is correct, Storm clients have still lost heaps of money such as fees paid to to Storm and their investment funds.

Nevertheless, any settlement may assist Storm clients in some way to getting back on their feet which is good.


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## Anastasia (13 July 2009)

An interesting article in todays Australia......not surprised by the content....expected as much.
http://www.theaustralian.news.com.au/business/story/0,,25772289-30538,00.html


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## Krusty the Klown (13 July 2009)

Anastasia said:


> Everyone has their story for joining Storm. Ours  was simple. True we had paid off our home, both supers accumulating, and the bank account growing.
> 
> And this was the problem. We were advised by many not to let our money just sit in the bank earning low interest. "Get it to really work for you". Advisers on TV (money talk shows) were telling us to put our spare cash into indexed funds for our retirement. The government was telling a similar story so as not to have so many dependent  pensioners.
> 
> ...




From what you say it sounds like the managers of Storm got caught up in the bull run like everyone else.

This will probably sound harsh, but I'm surprised that Storm is the only financial planning company to succumb to this end, considering the gravity of the GFC and compared to 1929.

Are there any other financial planning firms or financial planners that have ended up this way?


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## Garpal Gumnut (13 July 2009)

From the foregoing I take it that greed had nothing to do with comfortable people, hocking themselves up to the eyeballs in debt, with a spinmeister par excellence like Manny Cassimatis.

They sacheted into a morass of double debt, abetted by the banks in an altruistic attempt to save the state from having to pay them pensions.

If this be true the community has a duty to rescue them from foolishness in the future.

Wayne Swan says there is no need to investigate the banks.

The banks will give them as little as possible and only where loans are proven to be defective as a result of proven incompetence.

SICAG have put certain submissions into the coming Inquiry but my bet is that nothing will come from them. 

Manny will set up again.

Perhaps in funeral insurance which seems to be the de rigeur "investment" of the day at present on TV ads.

Life can be a bit of a joke at times. 

And life repeats.

gg


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## Julia (13 July 2009)

Garpal Gumnut said:


> They sacheted into a morass of double debt, abetted by the banks in an altruistic attempt to save the state from having to pay them pensions.



Altruistic?  You must be joking!  Many of these people were already far beyond access to government pensions in terms of their existing wealth, and even for those who were not, I rather doubt that saving their fellow taxpayers was uppermost in their minds.





> If this be true the community has a duty to rescue them from foolishness in the future.



No, the community does not.  It's time people took responsibility for their own outcomes.





> Wayne Swan says there is no need to investigate the banks.
> 
> The banks will give them as little as possible and only where loans are proven to be defective as a result of proven incompetence.



And in so doing, they are looking after their shareholders.


----------



## Solly (13 July 2009)

Julia said:


> Altruistic?  You must be joking!  Many of these people were already far beyond access to government pensions in terms of their existing wealth, and even for those who were not, I rather doubt that saving their fellow taxpayers was uppermost in their minds.




I believe some were only looking at "drawing down" not much more than what the government pension was paying. One comment I heard was that they were proud not to be a burden on the taxpayer for their future. 



> No, the community does not.  It's time people took responsibility for their own outcomes.




There maybe some benefit in support, it may be cheaper and more effective in the long term. After all we do support others who unwillingly have inflicted self harm.




> And in so doing, they are looking after their shareholders.




From what I've seen I'm wondering why the banks approved these loans in the first place. I'm not sure if the shareholders interests where foremost in the first instance. Surely the modeling would have raised red flags I read in a article where "pensioners" were allegedly "earning" over $100K per annum.

And as for gg comments about EC's abilities in the sales arena, I believe that his past performance speaks for its self.

I've had a long talk tonight with a Stormer, they are not doing to well at the moment. It's hard to hear the anguish and pain in their voice knowing that they may soon lose almost everything they worked for all their life. I have been wondering lately, why in a great land as this, something like this could happen.....


----------



## Solly (14 July 2009)

*"CBA in Storm coverage talks"*

"A MEETING between the Commonwealth Bank and former Storm Financial policy-holders has agreed to set up a trial group to expedite ways of compensating people who have lost money through their involvement with the financial services company."

More from Michael McKenna and Andrew Fraser in The Australian;

http://www.theaustralian.news.com.au/story/0,25197,25778609-5013404,00.html


----------



## Solly (14 July 2009)

*"BoQ branch performance startles"*

"Confidential documents reveal a Bank of Queensland branch at the centre of the controversy around Storm Financial was lending more than $20 million a month at the height of the collapsed advisers' popularity."

Read more on page 48 in today's Australian Financial Review by Duncan Hughes.


----------



## Solly (14 July 2009)

*"Compensation talks for Storm"*

"KEY POINTS: One investigation is focusing on a possible systemic overstatement of borrower incomes and borrower collateral asset values. Negotiations are continuing. Investors in the collapsed Townsville-based financial adviser Storm Financial meet today with Commonwealth Bank of Australia officials to discuss compensation amid speculation the bill could range from *a few hundred million to $1 billion.*"

Read more on page 44 in the Australian Financial Review of 13/7 by Duncan Hughes.


----------



## Judd (14 July 2009)

Garpal Gumnut said:


> From the foregoing I take it that greed had nothing to do with comfortable people, hocking themselves up to the eyeballs in debt, with a spinmeister par excellence like Manny Cassimatis.
> 
> They sacheted into a morass of double debt, abetted by the banks in an altruistic attempt to save the state from having to pay them pensions.
> 
> ...




GG,

You've been around long enough to know that:


when it comes to finances, most of the population - and by that I mean around 70% - are inept.  Just ask someone the formula for calculating compound interest.

when money is lost, again most of the population do not hold themselves accountable for that loss.  It always has to be somebody else at fault.

the fear of losing out is a big factor.  Look how many were peering over the back fences of friends, neighbours and family to see "how well they were doing" in comparison.

regret of past decisions can have a big influence on people.  Paid off house for 20 years, on age pension, want to get off age pension.  So what did you do with the money you previously used to pay the mortgage?  Invest it or spend it?

are very naive in some matters.  Notice how many expected the lenders of the funds to provide some form of financial advice, yet it was Storm advisers who were paid to provide advice not the banks.

I won't go on as it is too depressing except to say that as a result of the above, aka the few, the numerically very few, legislation will probably be introduced to make it more difficult and time consuming to obtain a margin loan (Like I really want to banks to go into detail of my finances  - NOT.)

So what will probably happen?  Forget margin loan with its in-built safety features, go for a home line of credit and hope to pay it off before your retirement date as required under most mortgage agreements.  Won't that be fun.


----------



## Solly (14 July 2009)

*"North Ward data published by AFR"*

"The Financial Review published some data on the trading performance of selected franchises of Bank of Queensland as at February 2007, and which illustrates the curiously successful efforts of the bank’s North Ward branch in Townsville."

More here in The Sheet;

http://www.thesheet.com/nl06_news_selected.php?act=2&stream=1&selkey=8562&hlc=2&hlw=


----------



## Solly (14 July 2009)

*"ASIC probes top BoQ branch results"*

"Described as being 'astonishing', these volumes were around five times better than the head office benchmark and three to four times more than the best branches were doing in other states."

More here by Tim Neary in Broker News;

http://www.brokernews.com.au/news/asic-probes-top-boq-branch-results/35956


----------



## darkside (14 July 2009)

Judd said:


> GG,
> 
> You've been around long enough to know that:
> 
> ...





Judd, good sensible post, well said ,  good words of wisdom and yet blatently obvious and simple logic....


----------



## Garpal Gumnut (14 July 2009)

darkside said:


> Judd, good sensible post, well said ,  good words of wisdom and yet blatently obvious and simple logic....




I'd agree with darkside , a good post Judd.

gg


----------



## Solly (15 July 2009)

Another submission of interest to the 

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub137.pdf


----------



## Farencue (15 July 2009)

Mr and Mrs Heard's story clearly illustrates that Storm ignored their wishes on 2 occasions, I wonder what Mr Dallecourt and Mr Fuller have to say to them now?


----------



## Solly (16 July 2009)

*"Ex-BoQ auditor a witness in Storm case"*

"A former senior Bank of Queensland auditor is expected to become a star witness in legal action to be brought on behalf of about 1300 former clients who were involved in Storm Financial, the collapsed financial adviser."

More on page 22 in The Australian Financial Review by Duncan Hughes


----------



## carey ramm (16 July 2009)

Thought i would drop by and catch up on everything and geez there has been some ground covered.

Farencue - i have come accross a number of people whose sell orders were ignored by storm - in one instance there was 5 different excuses on why it didnt happen ranging from we lost the forms, etc... the only excuse these people didnt hear was "the dog ate your forms"!!! in another case storm ignored a federal court order for 6 months that was part of divorce proceedings - unfortunately for this person this 6 months was march 2008 to dec 2008 so they lost the lot.

Solly - the AFR article today is important for those storm BoQ victims. There is a range of stuff that has surfaced in the last few months that really is quite damning and this is one of them - i bet there is a very very good story there...when it comes out in the fullness of time. It will be interesting to see what APRA say about this as it is a prudential requirement for banks to disclose to the regulator when auditors leave. I am sure there is much much more that will come out on BoQ in the court process. Surely BoQ shareholders must be questioning the board on the storm and franchise fiascos.

SICAG - whilst i have no official involvement with SICAG i have worked with them on several issues and can say that they are working in the interests of the storm clients. we recently helped them collate a SICAG survey for use in the parliamentary enquiry. yes i am aware of the background of all the people involved and their former links with EC and co (the first thing i did was research them thoroughly) - but i have noticed that as all the truth has come out on Storm their position towards EC and the Storm directors has changed dramatically - particularly since march 09. we are now at the point in this campaign that what SICAG and people like me say about Storm publicly doesnt really matter as the ball is very much in the court of the ASIC regulators. this may change depending on the actions of ASIC. yes there are still true died in the wool Storm supporters out there and whilst i find it amazing no matter what they hear they wont change their stance - but these arent the people running SICAG. its a horribly draining job handling the emotional torment of many of these victims and SICAG are doing a good job on this (especially when u consider that these guys are going through this as well personally) - the lawyers dont have the time or resources to do this. also bear in mind that these guys arent professionals and they will be the first to admit this. the real challenge for SICAG will be how they handle any conflict of interest should ASIC decide to prosecute any of the people working with SICAG such as Jellich - he has come out publicly and said if he is found to have done anything wrong he will take his medicine but in the meantime he is one of the few people who was part of the storm mess who is actually trying to clean it up and help the affected people - if only EC and JC took the same view.

On a final note to all the cba stormers - the resolution process is starting and holds strong promise that a fair and equitable solution can be reached - just remember the words you were told at the start of this process by Slater and Gordon.


----------



## awg (16 July 2009)

A question,

If one has proof/evidence that sell orders were not acted on

Can a lawsuit be mounted to make the persons responsible for that (non)action personally liable?

I would think the answer is yes.

I  have very limited knowledge of the various laws in relation to this matter.

However, I always kept email of every instruction I issued.

On two occasions, my sell orders were not acted on correctly.

In both cases, I was compensated, once fully, no questions asked, the other occasion, I had to fight for partial compo, both major brokers.


----------



## Julia (16 July 2009)

awg said:


> A question,
> 
> If one has proof/evidence that sell orders were not acted on
> 
> ...



Certainly seems reasonable, awg.
I guess in the case of Storm, the principals will have ensured they can demonstrate they are broke and can't pay.
Perhaps I'm being unkind in suggesting such behaviour.


----------



## Garpal Gumnut (16 July 2009)

carey ramm said:


> Thought i would drop by and catch up on everything and geez there has been some ground covered.
> 
> Farencue - i have come accross a number of people whose sell orders were ignored by storm - in one instance there was 5 different excuses on why it didnt happen ranging from we lost the forms, etc... the only excuse these people didnt hear was "the dog ate your forms"!!! in another case storm ignored a federal court order for 6 months that was part of divorce proceedings - unfortunately for this person this 6 months was march 2008 to dec 2008 so they lost the lot.
> 
> ...




Thanks Carey.

An opportune post.

There is more afoot which a contact in Canberra has advised me of, which should bring all the jigsaw together.

You may not be aware of this, but it will become clearer as events unfold.

I do believe you about SICAG, a good bunch of people by and large, some misguided MC believers, and Jelly babies on the shelf. But who cares, its moving along.

I have booked 2 months in to Lennons in October 2011, which is when I reckon, the Criminal Trials will be on. I got a special deal at $85 a night.

A short walk up to the Courts.

It will be a Nuttall type event with Manouri me Frouta for dessert. 

gg


----------



## Solly (16 July 2009)

Garpal Gumnut said:


> Thanks Carey.
> 
> An opportune post.
> 
> ...




gg, I'm sure that Lennons will not have such a distinguished guest in their presence since LBJ camped over in their old digs in 1966...


----------



## Garpal Gumnut (16 July 2009)

Solly said:


> gg, I'm sure that Lennons will not have such a distinguished guest in their presence since LBJ camped over in their old digs in 1966...





lolololololololololol

gg


----------



## Smiley (17 July 2009)

I appreciate Carey's voice of reason and having talked at length with the SICAG founders I am utterly convinced of their sincerity and motivation to improve things for the stormified. 
A word with someone in the know from ASIC this week convinced me we should possibly book a few hotels in Brisbane for the trial event - hard to pin down dates; though applaud your intuitive knowing GG in being able to specify the date as Oct 2010.
Some great stuff in recent submissions and hoping all 'advisers' will be called to account and not just EC and JC and board of directors (though the latter changed quite a bit in the final days of storm). . . .


----------



## Garpal Gumnut (17 July 2009)

Smiley said:


> I appreciate Carey's voice of reason and having talked at length with the SICAG founders I am utterly convinced of their sincerity and motivation to improve things for the stormified.
> A word with someone in the know from ASIC this week convinced me we should possibly book a few hotels in Brisbane for the trial event - hard to pin down dates; though applaud your intuitive knowing GG in being able to specify the date as Oct 2010.
> Some great stuff in recent submissions and hoping all 'advisers' will be called to account and not just EC and JC and board of directors (though the latter changed quite a bit in the final days of storm). . . .




Sorry mate, you got the date wrong.

Oct 2011.

Some time has been pencilled in by the Registrar according to my contacts.

Also there is more to come as I indicated in my reply yesterday to Carey Ramm, 

The pond will be subject to Ripolls.

gg


----------



## chrisgee (17 July 2009)

well i hope you are all correct about people going to court ovrer all of this-its about time we saw some action- so maybe there are some breaches of laws-as i said before people and companies cannot act in a way the causes damages to people and expect to get a way with it-if people have been dishonest then they need to pay the price-how can people take your money say they will look after you -say your future is ok- and then have it all fall over-people want thier money back, thier house back and thirer lives back the way it was before all of this happened-ive been very angry about all of this and very upset- if only people could see what some have gone through and are going thru - i dont care where the money comes from but people need to be given thier lives back- who is really wrong ? banks ? government ? storm ? what are they going to do about it -we need  to see some strong leadership from all of these- they need the guts to say who is wrong. im off on a trip out west for a few days maybe things will be better when the bus comes back into town- i hope so- i really hope so-


----------



## Judd (17 July 2009)

chrisgee said:


> well i hope you are all correct about people going to court ovrer all of this-its about time we saw some action- so maybe there are some breaches of laws-as i said before people and companies cannot act in a way the causes damages to people and expect to get a way with it-if people have been dishonest then they need to pay the price-how can people take your money say they will look after you -say your future is ok- and then have it all fall over-people want thier money back, thier house back and thirer lives back the way it was before all of this happened-ive been very angry about all of this and very upset- if only people could see what some have gone through and are going thru - i dont care where the money comes from but people need to be given thier lives back- who is really wrong ? banks ? government ? storm ? what are they going to do about it -we need  to see some strong leadership from all of these- they need the guts to say who is wrong. im off on a trip out west for a few days maybe things will be better when the bus comes back into town- i hope so- i really hope so-




chrisgee (and others affected)

While you want everything to be put back as before, you may wish to take heed of this from Slater & Gordon's Frequently Asked Questions in respect of Storm:



> *What are my prospects of recovering everything?*
> 
> In our experience, it is _extremely unlikely_ that you will recover everything that you have lost.  At best you will recover _some _of your financial losses.
> 
> Please note that in these sort of cases, the law generally does not provide compensation for your emotional anguish and distress as opposed to, for example, a personal injuries matter.




And that is before S&G takes its cut.

I wish people well in this matter and those bodies who have wronged Storm clients be brought to heel but I'd be tempering my expectations.

And, unlike Smiley, I found the submissions to the Parliamentary Committee disturbing at a number of levels.  Not only in regard to the losses that individuals and families have suffered but also from statements such as, "We didn't know anything about investing/margin loans/gearing/debt."

What is it like not knowing and making no effort to find out?  And as for the argument that "I'm paying good money for them to look after my wealth," if some mongrel was taking $7,000 of every $100,000 I put up and leaving me to pay the interest on the $100,000, where it was borrowed money, I'd be sleeping at the base of his bed every night to make sure the dastard did his job properly.

I have, as you can gather, as slightly different view of the definition of responsibility.

By the way, just like the rest of the population, including Storm clients, I am greedy.  It is one of the strongest emotions in investing.  Otherwise there would be no point as the objective is to improve on your current and/or future financial position.


----------



## Garpal Gumnut (17 July 2009)

Agree mate, one of the big problems you have got is that some SICAG folk still believe the Storm bull****.

On their site they even advise against seeing financial planners who charge by the hour "Unlike Storm".

gg


----------



## Smiley (17 July 2009)

Garpal Gumnut said:


> Agree mate, one of the big problems you have got is that some SICAG folk still believe the Storm bull****.
> 
> On their site they even advise against seeing financial planners who charge by the hour "Unlike Storm".




So true GG - go figure and it may take years for them to see the light.
Well, as the saying goes, "You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time."
Some stormified fall into the former category and others of us admit we were fooled and won't be again . . . 
Only a small difference between EC and a ponzi schemer like Madoff - you had to know investors were going to lose out when the market fell but if you were a gambler like EC the thrill of the game meant it did not matter who got hurt and just keep telling clients "it's safe, we know what we are doing". . . .

And I don't think the submissions are wonderful and most don't address the terms of reference but they are revealing of the above.


----------



## darkside (17 July 2009)

Garpal Gumnut said:


> Agree mate, one of the big problems you have got is that some SICAG folk still believe the Storm bull****.
> 
> On their site they even advise against seeing financial planners who charge by the hour "Unlike Storm".
> 
> gg




GG, i really don't care what they believe on their site, or what they tell people, the main thing is, the "money spiders" are gone, and the people who visit the site can now do so without being accosted by the "crawlies".


----------



## Julia (17 July 2009)

Judd said:


> chrisgee (and others affected)
> 
> While you want everything to be put back as before, you may wish to take heed of this from Slater & Gordon's Frequently Asked Questions in respect of Storm:
> 
> ...



Completely agree, Judd.   I suspect some Stormers are going to be disappointed all over again.


----------



## bunyip (17 July 2009)

Garpal Gumnut said:


> Agree mate, one of the big problems you have got is that some SICAG folk still believe the Storm bull****.
> 
> On their site they even advise against seeing financial planners who charge by the hour "Unlike Storm".
> 
> gg




Even worse is that co-chairman of SICAG, Noel O'Brien, is one of those who are still swallowing the Storm lies. Or at least he was until recently anyway - don't know if that's still the case or whether he's finally opened his eyes and started seeing through all the lies.
A couple of weeks back I on this thread I gave Noel a spray for his absurd acceptance of the Cassamatis line that the financial meltdown and market crash were unprecedented. I posted a couple of charts showing both the 1987 crash and the 2008 crash, and in another post I included some info I pulled off the internet, showing the market crashes that have occurred since the early part of last century.
I hope someone in SICAG referred Noel to these posts so he could get some much needed enlightenment.

SICAG was formed primarily to seek justice for Storm victims - this process will be expedited if those at the helm of SICAG stop believing the lies being bandied around by the main culprit in the whole sorry affair.


----------



## Quincy (18 July 2009)

Solly said:


> *"Ex-BoQ auditor a witness in Storm case"*
> 
> "A former senior Bank of Queensland auditor is expected to become a star witness in legal action to be brought on behalf of about 1300 former clients who were involved in Storm Financial, the collapsed financial adviser."
> 
> More on page 22 in The Australian Financial Review by Duncan Hughes




As referred to in above post - 
	

		
			
		

		
	

View attachment AFR - 16 July 2009.pdf


----------



## Garpal Gumnut (18 July 2009)

darkside said:


> GG, i really don't care what they believe on their site, or what they tell people, the main thing is, the "money spiders" are gone, and the people who visit the site can now do so without being accosted by the "crawlies".




The money spiders are back.
They are a worry at SICAG.

gg


----------



## Solly (18 July 2009)

Garpal Gumnut said:


> The money spiders are back.
> They are a worry at SICAG.
> 
> gg




gg, I think it is a trap. Maybe the SICAG bunch are attempting to use some mind games to unsettle you.   Or maybe they just fixed a dodgey animated gif... I'm not a fan of the "money spiders" either but I do see they are still looking for a site logo. Any suggestions ?


----------



## Julia (18 July 2009)

Garpal Gumnut said:


> The money spiders are back.
> They are a worry at SICAG.
> 
> gg



With apologies for my ignorance, what actually are money spiders?


----------



## Garpal Gumnut (18 July 2009)

Julia said:


> With apologies for my ignorance, what actually are money spiders?




Julia you surprise me.

They are Linyphiidae.

gg


----------



## darkside (18 July 2009)

Garpal Gumnut said:


> Julia you surprise me.
> 
> They are Linyphiidae.
> 
> gg




Funny GG , not entirely helpfull , but none the less amusing in your own way.


Julia, the "money spiders"  are irritating little ant gifs on the SICAG website , that GG , named the "Money Spiders"  some while back . He has now been revered by all the Araneide lovers world wide, and not so adored from the SICAG site, although he was only trying to help them , by pointing out how hard it was to navigate their site with these annoying little crawlies all over the place.


----------



## Julia (18 July 2009)

Thank you for the entymological reference gg.
It doesn't help me at all to understand the connection to Storm.
I'm happy to admit to being dim about this.
Kindly indulge me and explain the relevance to Storm.
With grateful thanks.
Julia


----------



## darkside (18 July 2009)

Solly said:


> gg, I think it is a trap. Maybe the SICAG bunch are attempting to use some mind games to unsettle you.   Or maybe they just fixed a dodgey animated gif... I'm not a fan of the "money spiders" either but I do see they are still looking for a site logo. Any suggestions ?




Oh Solly, you are so leaving the door open with that one, ok let me start , How about an "EMU"

Yes you know why.


----------



## Julia (18 July 2009)

Ah, thank you, Darkside.
Being unfamiliar with the SICAG website, I had no idea what he was on about.


----------



## darkside (18 July 2009)

Julia said:


> Ah, thank you, Darkside.
> Being unfamiliar with the SICAG website, I had no idea what he was on about.




Your welcome , sometimes GG is just too funny for his own good, but we still love him !!


----------



## Garpal Gumnut (18 July 2009)

darkside said:


> Your welcome , sometimes GG is just too funny for his own good, but we still love him !!




Thanks Solly, darkside and Julia.

I seem to have upset the Manny Cassimatis believers in SICAG.

I have received some quite inappropriate emails at ggumnut@yahoo.com  but I can live with that.

So I propose a deal with the SICAG higherups.

They can keep their money spiders but they get rid of this blatant endorsement of the Cassimatis Storm Model.

An obscenity on a blog dedicated to protecting Storm Victims.

From SICAG



> Before you commit to anything,ask about fees!
> 
> Remember, the Storm Fees model charged nothing for discussions until something was actually done.  Most of the financial planning industry charge fees for each appointment regardless of outcome!




I really feel this is quite an inappropriate statement on a site dedicated to work for Storm Victims.

The "outcome" for the "free" advice from Storm was poverty, penury and a wholesale wreckage of the dreams and aspirations of Australian investors who did not want to bludge off the system.

So I repeat.

Keep the money spiders.

Get rid of the Storm endorsement.

(btw, a Storm logo was recently only just taken down from the site after I complained.)

gg


----------



## Smiley (19 July 2009)

GG, I totally applaud your comments in terms of the inappropriate statement on the SICAG site about the storm model - no fees upfront.
I think everyone would gladly have paid fees for good advice and not 7% commission for lousy advice. 
It also concerns me that negotiations are being done on behalf of ex-clients as if SICAG represents all  . . . .
So stormified out there - let Mark and Noel know you do not like the endrosement of the storm model on the SICAG site (perhaps added by Luke Vogel, who claims all would have been saved if only banks had acted sooner - what about the sh... advice) and queries should be made of stormified opinions before they act.


----------



## darkside (19 July 2009)

Garpal Gumnut said:


> Thanks Solly, darkside and Julia.
> 
> I seem to have upset the Manny Cassimatis believers in SICAG.
> 
> ...





No GG, thats not the deal , the "money spiders" have to go , you have come this far, i think all of the storm victims will feel more than compensated by the whole Storm debarcle if they just Baygon the spiders. 

Ok , maybe it won't cheer them up , but it will make me feel a lot better, now back to the logo !


----------



## maccka (19 July 2009)

Julia said:


> Thank you for the entymological reference gg.
> It doesn't help me at all to understand the connection to Storm.
> I'm happy to admit to being dim about this.
> Kindly indulge me and explain the relevance to Storm.
> ...




Hi Julia,

There is no connection to Storm Financial.  The connection is to SICAG.  It has been explained in a number of posts on this forum that you must have missed.



maccka said:


> Mash speaks the truth.  The critters are ants not spiders.  They are there for the benefit of SICAG members not necessarily for other people.
> 
> As Mash suggested, it came about when SICAG members were at a bbq together and one was bitten by a fierce ant.  Thinking nothing of it he squashed it only to have it let off a pheromone in its death throws that caused hundreds of ants to swarm out of the nest and set to biting the big boy that squashed their fellow ant.  It did not take long before the annoyance of the mass of ants moved the SICAG members from their comfortable positions to somewhere else that the ants were much happier with.






Big Max said:


> GG, they are/were not money spiders; they are/were ants. The ant metaphor grew out of the SICAG information road trip earlier this year. We were sitting on the verandah of a  Storm client's house in Rocky where we were being billeted when Co-chairman Noel O'Brien was attacked by some nasty little black ants. That prompted a humorous discussion about how the ants reminded us of SICAG and its strategy to get EC/JC and the banks to admit their role and their level of culpability in the Storm affair and breast the negotiating table. The man running the website (Luke Vogel) thought it worthwhile putting some active ants on the site. Not all that Machiavellian, hey GG?




I think Mash explained them also but couldn't find the quote.

Also GG.  Spiders have 8 legs.  Ants have 6.  The critters on the SICAG site have 6 legs and 2 antennae.  Quite obviously they are ants.  

I wonder if the focus by this forum on these critters is a huge waste of energy.  Maybe it needs to go into more important things?

cheers
Maccka


----------



## Garpal Gumnut (19 July 2009)

Smiley said:


> GG, I totally applaud your comments in terms of the inappropriate statement on the SICAG site about the storm model - no fees upfront.
> I think everyone would gladly have paid fees for good advice and not 7% commission for lousy advice.
> It also concerns me that negotiations are being done on behalf of ex-clients as if SICAG represents all  . . . .
> So stormified out there - let Mark and Noel know you do not like the endrosement of the storm model on the SICAG site (perhaps added by Luke Vogel, who claims all would have been saved if only banks had acted sooner - what about the sh... advice) and queries should be made of stormified opinions before they act.




thanks Smiley,

I feel like the one eyed man in the land of the blind.

The SICAG site oozes sympathy for Manny, the Cassimatis model and the Storm Financial model.

My mate, of whom I spoke in the first post of this thread has finally seen the light.

But SICAG seem protective of Manny and Julie.

And it just doesn't make sense.

They have dumped quite rightly on everyone else in this saga.

The money spider mob keep on going for some reason.

What they fail to realise is that unless Manny Cassimatis and Storm Financial had existed with their **** financial model, they wouldn't be in the hole they are in now.

But they still endorse the Storm model on their front page and they still have that ****ing money spider aroamin all over the place like a Masonic meeting in the Vatican.

gg


----------



## Julia (19 July 2009)

maccka said:


> Hi Julia,
> 
> There is no connection to Storm Financial.  The connection is to SICAG.  It has been explained in a number of posts on this forum that you must have missed................




Thank you maccka.   Your clarification is much appreciated.


----------



## Solly (19 July 2009)

If SICAG are still looking for a logo maybe they could use the "Atom Ant" symbol, it would fit in with their website theme, maybe Hanna-Barbera could cut a deal with them under the circumstances. Of course I'm too young to remember the original TV show but I'm sure gg would have fond memories watching on his 18 inch B&W PYE....


----------



## Solly (20 July 2009)

*"Storm wash-up hits Coast hard"*

"Dozens of Coast residents have been devastated by losses from the Storm Financial fallout, MP Alex Somlyay says."

More here by Alan Lander in The Sunshine Coast Daily;

http://www.thedaily.com.au/news/2009/jul/19/storm-wash--hits-coast-hard-financial/


----------



## Solly (20 July 2009)

Regarding the Inquiry into Financial Products and Services in Australia;

There appears to be 31 recent submissions that are 'confidential'.

It would be interesting to know if any are related to Storm.


----------



## Garpal Gumnut (20 July 2009)

Solly said:


> If SICAG are still looking for a logo maybe they could use the "Atom Ant" symbol, it would fit in with their website theme, maybe Hanna-Barbera could cut a deal with them under the circumstances. Of course I'm too young to remember the original TV show but I'm sure gg would have fond memories watching on his 18 inch B&W PYE....




lol mate, but if Atom Ant were their logo who would be Ferocious Flea and mad scientist Professor Von Gimmick.

Let us not go there.

I could send down some Garpalmoneyspiders which breed in my office.

Although I guess the following might be more apt.

A TROJAN HORSE.

It was full of opposing people of a nationality which evades my ailing memory, who sneaked into Troy, destroying the happiness and wealth of the populace.

Much as Storm has.

Would it be appropriate?

SICAG 

gg



A TROJAN HORSE


----------



## Judd (20 July 2009)

Solly said:


> *"Storm wash-up hits Coast hard"*
> 
> "Dozens of Coast residents have been devastated by losses from the Storm Financial fallout, MP Alex Somlyay says."
> 
> ...




Stupid thing is that there is absolutely nothing wrong with margin loans as a product.  It's the extreme gearing that Storm advised their clients to take which is/was the real issue.  Stand in front of an oncoming train and you are going to get totaled.  So who is at fault?  You for standing in front of the train or the train running merrily along its tracks minding its own business?

I was going to make a submission along those lines to the Parliamentary Committee but came to the conclusion that that is not what they wish to hear.  You cannot put brains into a monument aka Committees of Inquiry (dumb buggers cannot even get their definitions correct.).


----------



## awg (20 July 2009)

Has there been any indication of what type, or level of settlement CBA are offering?

It would seem to me the most they would do is waive some, or at most all of outstanding home equity loans

I could not forsee that anyone would get back one cent of any lost investment money.

As a shareholder of CBA, I for one would not want them to, unless they were legally obliged, which would suppose extreme negligence or criminal conduct by CBA.

Many Storm investors would have had investments over $500k, and therefore be classified as "sophisticated investors"

In this instance, investors are expected to have reasonable knowledge

It would be really interesting to see who reduced their equity exposure at the right time, or even pulled out entirely, as they should have done, if resistance was encountered

No-one is offering to compensate me for "losing" money on shares I held, including CBA.

I could have sold them at $60, or $50 

I dont mean to be heartless, and have a different view about Storm, but they aint around anymore


----------



## Garpal Gumnut (20 July 2009)

Judd said:


> Stupid thing is that there is absolutely nothing wrong with margin loans as a product.  It's the extreme gearing that Storm advised their clients to take which is/was the real issue.  Stand in front of an oncoming train and you are going to get totaled.  So who is at fault?  You for standing in front of the train or the train running merrily along its tracks minding its own business?
> 
> I was going to make a submission along those lines to the Parliamentary Committee but came to the conclusion that that is not what they wish to hear.  You cannot put brains into a monument aka Committees of Inquiry (dumb buggers cannot even get their definitions correct.).




Perhaps a representative from ASF such as Solley should present the opinions of "unsophisticated" investors to the Parliamentarians in their Inquiry into Storm Financial.

There is more sense talked about Storm on this thread, and throughout on ASF about how to avoid becoming a "fish"for the inept Financial Advisers and Banks who prey on the ordinary person in Australia.

gg


----------



## Julia (20 July 2009)

Judd said:


> Stupid thing is that there is absolutely nothing wrong with margin loans as a product.  It's the extreme gearing that Storm advised their clients to take which is/was the real issue.  Stand in front of an oncoming train and you are going to get totaled.  So who is at fault?  You for standing in front of the train or the train running merrily along its tracks minding its own business?



Good analogy, Judd.  I'm getting pretty tired of all the protecting people from themselves stuff.





awg said:


> Has there been any indication of what type, or level of settlement CBA are offering?
> 
> It would seem to me the most they would do is waive some, or at most all of outstanding home equity loans
> 
> ...



Quite understand how you feel.   Some years ago I was "done" by a crooked solicitor.  Lost quite a lot of money. 

  I haven't spent the years following expecting either the State or my fellow tax payers to take responsibility.

The fact that the solicitor was eventually struck off, disciplined etc, didn't improve my financial situation.   Nor do his actions mean that all solicitors have to be subjected to a raft of unreasonable restrictions in their business.



Garpal Gumnut said:


> Perhaps a representative from ASF such as Solley should present the opinions of "unsophisticated" investors to the Parliamentarians in their Inquiry into Storm Financial.



Good Lord, gg, don't they have one of the most litigious legal firms in the country acting for them?  What more do they need????


----------



## Big Max (21 July 2009)

chrisgee said:


> gee anastasia your story sounds very familiar-i wonder why! yep it was all about trust-something we are finding a bit hard to do again- how do you know who to trust?? i rememnber those comm bank school banking passbook years ago-those comm bank tin money boxes that you would put your one,two and five cents in and take to the bank and get emptied- gee it seems like they try to get you very very early to trust the banks-that is why i cant beleive what has happened now- you think you are doing the right thing in dealing with big banks and a financial mob that has been around for ages-then look what happens the whole thing turns to crap-i hope that people who read this take a bitof a lesson about the banks-friends and family are not happy with what has happened and beleive me they are now very carefull which banks they will now do business with. maybe we should bring back the community type building societies-what do you think?? and there is still not a peep from mr c- i'd really love to hear from him-i would like to speak to him directly . does anybody know his number or his email ? big max can you help?




Chrisgee. Sorry, can't help with EC's contact details. Contrary to GG and other conspiracy theorists, we at SICAG do not have that particular gentleman on speed dial.
On another matter, I hope I get the hotel room next to GG in 2011 when the Storm bad guys face the bewigged man with the gavel. It will be good to catch up again.


----------



## Solly (22 July 2009)

For those interested, Slater and Gordon's FAQs in relation to the action against Storm was updated on July 17.

See the FAQs at this link;

http://www.slatergordon.com.au/pages/class_actions_stormfin.aspx


----------



## Smiley (22 July 2009)

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/storm-financial-founders-distress/

If you want to see where EC & JC re living check out the article above and anyone wanting to write to them would do well to address post to Cassimatis at London Road, Belmont, Qld  4153 . . . have a scroll down google maps street view and you could probably get an approximate address. . . those in SE Qld could print the photo and drive by and find out the exact number . . .
I still reckon we should get a caravan/camping endeavour going on that massive lawn of theirs . . . .


----------



## Ironhalo (22 July 2009)

I actually had a very weird dream the other night where I threw clods of dirt into Manny's face and had a screaming match with him....makes a nice change from normal cliched dream themes of winning the lottery, grinding your teeth, or seeing your friends!

Maybe I have been reading this thread too long! 

At any rate, I actually almost feel sorry for Manny....but not quite. It's not like he's packed and flown to Majorca, but still....maybe we need to book an ASF floor at the hotel in Brisbane for when his trial starts?


----------



## darkside (22 July 2009)

Big Max said:


> Chrisgee. Sorry, can't help with EC's contact details. Contrary to GG and other conspiracy theorists, we at SICAG do not have that particular gentleman on speed dial.
> On another matter, I hope I get the hotel room next to GG in 2011 when the Storm bad guys face the bewigged man with the gavel. It will be good to catch up again.




Just for laughs i am sharing the room on the other side then, and we can car pool, i have free parking at the law courts , should be a hoot. !!!!


----------



## Garpal Gumnut (22 July 2009)

Big Max said:


> Chrisgee. Sorry, can't help with EC's contact details. Contrary to GG and other conspiracy theorists, we at SICAG do not have that particular gentleman on speed dial.
> On another matter, I hope I get the hotel room next to GG in 2011 when the Storm bad guys face the bewigged man with the gavel. It will be good to catch up again.






darkside said:


> Just for laughs i am sharing the room on the other side then, and we can car pool, i have free parking at the law courts , should be a hoot. !!!!




sorry I'm a bit pist at the Darwin Showgrounds, huge amount of work went into etc etc etc, am usinf computer of odd lookinh committee guy who looks like he nomally uses morse.

anyway.

If youse like I have contacts at Lennons and can book a whole bloody floor or two for asf members although I get the ensuite with the spa.

remember its oct 2011, that the real dirt will out in the courts in Brsbdne on Storm.

The inquiry by Bernie who himself is cawsing a few ripples in governance circles wil not get to the bottom of it all. 

You can walk and meet cabinet ministers on their way to 2 and a half inside, so thanks darkside I'll pass up on the lift.

gg


----------



## Solly (22 July 2009)

gg, I'm looking forward to seeing you and Big Max having a sing-a-long around the Steinbach in The Lennons Bar at 2am after debating the finer points of the evidence presented in the daily proceedings.

I really hope I'll still be in Oz in Oct '11 and not stuck on a DC-8 on heading for BogotÃ¡ from Miami


----------



## Solly (22 July 2009)

Another two submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub140.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub141.pdf


----------



## Garpal Gumnut (23 July 2009)

Solly said:


> gg, I'm looking forward to seeing you and Big Max having a sing-a-long around the Steinbach in The Lennons Bar at 2am after debating the finer points of the evidence presented in the daily proceedings.
> 
> I really hope I'll still be in Oz in Oct '11 and not stuck on a DC-8 on heading for BogotÃ¡ from Miami




Lennons at2am with you guys around the peeano would be heaven on a stick awaiting jail time for the bastards who send so many good folk broke.

Sorry Solly I misspelled your name earlier.

I may be going on a similar trip to you next year, I plan on ecuador and then by mbike hopefully doen to Pata
gonia and tierrla del fuego.

take care mate.

gg


----------



## carey ramm (23 July 2009)

i hear there are some new job vacancies at the aitkenvale branch of the CBA - the branch where most of the storm loans went through - interesting...


----------



## DocK (23 July 2009)

Not the first "vacancy" to eventuate at CBA.  I was told by a CBA employee in Brisbane that at least one senior manager is no longer employed by CBA as a direct result of the "Storm Situation".


----------



## chrisgee (23 July 2009)

looks like there has been some action since ive been away-a few vacancies in the 'which bank' hey-i wonder why? - ok big max i see you you cant help but maybe ill write a letter to mr c or maybe now i cant be bothered it probably would be thrown in the bin any way- mr gg reckomns there will be some action in 2011 that will be interesting to see-ive read a couple of subs to the enquiry they seem to have a familiar ring to them- why was money lent out in the first place? if the banks said no to the loans none of this would have happened- its probably more complex than this ill also let the guys with the wigs and gavels work that out- they are way smatatrer than me- are you guys serious about meeting at lennons ? it might be worth a bus trip down just see the action- i still dont trust the big guys with all of this-at least i've just spent a few days out of town with some real decent folk-and thats always good to be around in times like this--


----------



## jmac2005 (23 July 2009)

I'm new to the aussie stock forum, yes I've been subscribed for a while, but a bit computer illiterate, which probably makes me stupid in some people's eyes on this forum.
We have a settlement currently with the solicitors at the moment, (every settlement is different).
We had our margin loan with BT Financial - yes we made money before we sold out, that happened after receiving a letter in the mail lunch time and had till 4pm to pay, off we flew to Storm Financial and had a fair go at our financial planner (use that term loosley Carey Fraser), she sold some stock down on the spot - another week went buy and got another margin call.. Ran in again, had the receptionist and her trying to get more money out of us on the spot and if my husband hadn't have used a few ajectival phrases and stood his ground we would have lost our house.  He even lased up Manny.
We never got first home owners grant, baby bonuses and all the other handouts that the y generation and others have.. When we bought our home interest rates were 18 1/2% we paid our 10 year loan off in 4 and had 2 overseas trips - we did without.  Its alright for some of you to call us nieve or stupid, but we went to so many seminars.  We were cautious, we invested once with David McCallum and sat still - they came back every 6-12 months and wanted more money - when we said no - we were palmed off to Carey Fraser.  They only got money out of us in April when I was under the care of doctors and hospitals and had no fight left in me, signed and bullied under duress.....
I don't know if its worth a submission to Parliament - but wouldn't trust a financial planner or even the Commonwealth Bank (who by the way changes the goal posts all the time cause we are better off than some) as far as I could through them.  Did they sell a faulty product - yes, were we mislead - probably - have we accepted responsbility for our fault - yes what about the Financial planner who infalted the earnings....
Our solicitor has told us some interesting stories too.
So you can see - settlements are being offered, thank god we did not have a margin loan with someone else or loans with the B o Qld.
Waiting on solicitor's advice now - ran into the original financial planner in a shopping centre carpark - took alot not to abuse him...
Jmac



awg said:


> Has there been any indication of what type, or level of settlement CBA are offering?
> 
> It would seem to me the most they would do is waive some, or at most all of outstanding home equity loans
> 
> ...


----------



## Ironhalo (23 July 2009)

jmac2005 said:


> We never got first home owners grant, baby bonuses and all the other handouts that the y generation and others have..




Yes but you didn't have $25-30k HECS loans, your first house didn't cost 12-15 years of salary to pay off, and all of your health care was practically free. I'm sorry but the Boomers vs Gen X vs Gen Y argument never works for me. Each has had their fair share of pro's and con's. Although I must guiltily admit that I get a perverse feeling of amusement watching a Gen Y at work get their 'comeuppance' at the hands of the Gen X/Boomers....but I digress....

Good to hear that things seem to be working out for you mate, a person close to me just got a settlement from CBA which will mean she will keep her house and will look forward to a great retirement. Not as great as it could have been, but it's a godsend noting what has happened over the past year or so. 

hang in there buddy.


----------



## jmac2005 (23 July 2009)

I couldn't afford to go to uni, that was your choice to further your education not mine - why should I pay. I didn't live at home from the age of 16, that's why I don't have HECS fees and in regard to Medical - I pay insurance have done since I was 16...  You also forget that the government propped up the ABC baby sitters and howard propped up his brother's company...
never took a cent off anyone including parents...
How do you know what I was earning from 1982... did you see my pay check, did you pay my rent,etc...
you aren't in my shoes, shame I can't afford the 4 QC'S in my class from school and shame I went to school wtih Julie Garvey, (Cassimatis)..
cause we both put our heads down, didn't spend money I'm at fault..
jmac



Ironhalo said:


> Yes but you didn't have $25-30k HECS loans, your first house didn't cost 12-15 years of salary to pay off, and all of your health care was practically free. I'm sorry but the Boomers vs Gen X vs Gen Y argument never works for me. Each has had their fair share of pro's and con's. Although I must guiltily admit that I get a perverse feeling of amusement watching a Gen Y at work get their 'comeuppance' at the hands of the Gen X/Boomers....but I digress....
> 
> Good to hear that things seem to be working out for you mate, a person close to me just got a settlement from CBA which will mean she will keep her house and will look forward to a great retirement. Not as great as it could have been, but it's a godsend noting what has happened over the past year or so.
> 
> hang in there buddy.


----------



## Mr J (23 July 2009)

> We never got first home owners grant, baby bonuses and all the other handouts that the y generation and others have..




Yeah, most of Gen Y doesn't have it either .


----------



## Garpal Gumnut (23 July 2009)

chrisgee said:


> looks like there has been some action since ive been away-a few vacancies in the 'which bank' hey-i wonder why? - ok big max i see you you cant help but maybe ill write a letter to mr c or maybe now i cant be bothered it probably would be thrown in the bin any way- mr gg reckomns there will be some action in 2011 that will be interesting to see-ive read a couple of subs to the enquiry they seem to have a familiar ring to them- why was money lent out in the first place? if the banks said no to the loans none of this would have happened- its probably more complex than this ill also let the guys with the wigs and gavels work that out- they are way smatatrer than me- are you guys serious about meeting at lennons ? it might be worth a bus trip down just see the action- i still dont trust the big guys with all of this-at least i've just spent a few days out of town with some real decent folk-and thats always good to be around in times like this--




Don't worry mate, every dawg has its day, don't worry about a bus, I'll pick you up from the Ross Island Hotel in my Bentley and drive you to Lennons in Brisbane. If you don't snore you can sleep on the sofa in the big suite.

The big wigs have left 3 months of sittings in the courts for sept-nov 2011.

gg


----------



## Solly (23 July 2009)

Another four submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub142.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub143.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub147.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub150.pdf


----------



## Ironhalo (23 July 2009)

Jmac, rage less mate, I am on your side.

I am going off stats that are well reported. House affordability on the whole is worse for first home buyers now then when my parents bought in the 70-80's. You didn't want to go to uni? That's your choice mate, but the point I was making is that HECS wasn't even a consideration back then, you wanted to go to uni and could get a job to support your alcohol/food/book habit while you were there, you could do it. And you could get a job without someone looking down their nose at your Bachelor of Arts degree as well.

No doubt you did it tough, but on the whole the Boomers did well with what they were given, as will the newer Gens. Saying 'I don't get what the Y's get' is silly, you had other things that balance it out.

But we digress.


----------



## maccka (23 July 2009)

This makes for interesting reading.


*Storm loans often broke BoQ policy*

http://www.news.com.au/couriermail/story/0,27574,25825141-3102,00.html

cheers
Maccka


----------



## Solly (24 July 2009)

maccka said:


> This makes for interesting reading.
> 
> 
> *Storm loans often broke BoQ policy*
> ...




Thanks maccka, to me, the below quote from the article is very interesting.

' Storm's Brisbane manager Stuart Drummond, speaking publicly for the first time, said CBA and BoQ home loans were "done properly". He said some BoQ loan documents were signed in Storm offices and bank officials did not meet customers "all the time". '

Does this mean Storm were acting as a type of "agent" for the bank?


----------



## Steve Borden (24 July 2009)

Solly said:


> Thanks maccka, to me, the below quote from the article is very interesting.
> 
> ' Storm's Brisbane manager Stuart Drummond, speaking publicly for the first time, said CBA and BoQ home loans were "done properly". He said some BoQ loan documents were signed in Storm offices and bank officials did not meet customers "all the time". '
> 
> Does this mean Storm were acting as as type of "agent" for the bank?




The BoQ says not, Storm suggests so.

In any event I would think that Stuart Drummond also considers the 'advice' he was delivering was similarly 'proper'.

The evidence on both counts suggests Mr Drummond needs to establish what the word proper actually means.


----------



## Solly (24 July 2009)

Steve Borden said:


> The BoQ says not, Storm suggests so.
> 
> In any event I would think that Stuart Drummond also considers the 'advice' he was delivering was similarly 'proper'.
> 
> The evidence on both counts suggests Mr Drummond needs to establish what the word proper actually means.




"Proper", I believe the meaning can be a bit vague, similar to "reasonableness", "legitimate interest", "cooperation" and "good faith"


----------



## jmac2005 (24 July 2009)

Not a boomer, try the next lot, better half is..
the offer we got wipe money from the loan, 1 percent below market rate, money towards solicitor's fees and an interesting paragraph that says (and our solicitor said it was the first time he'd seen it we were the 4th one he'd seen), that if it transpires that irregularities or wrong-doing occured by the bank it doesn't stop us from further action...
just been on the phone again with the which bank, things are changing again...  Might have been worth our while hanging out to the last minute.
Just go without, starve and kill the loan like the last ime.  Only invested in April, tried to get out in July, only wanted a few extra funds incase I was diagnosed with a medical condition that all the docs thought I had, didn't want to be burden on family, public health system at all..
I don't really trust this hardship lot, first 2 we saw she had never heard of the Storm Financial problem.... we did tell her about the home being revalued without being seen - which I understand might be against banking practises, also we kept copies of all documents, so was concerned when the bank sent copies in the mail and they blanked out stuff, also asked why was their own approved by a bank in Mackay when we had ample commonwealth banks where I live.  What was discussed and what the solicitor told us, would have been worthwhile gems of information but won't put this out here, might tip people off...
Yes we are lucky we still have a house but will be working till 70..
got fired up yesterday after the visit, we didn't go on any of their hols, or put everything in one basket, probably helped too.
jmac


Ironhalo said:


> Jmac, rage less mate, I am on your side.
> 
> I am going off stats that are well reported. House affordability on the whole is worse for first home buyers now then when my parents bought in the 70-80's. You didn't want to go to uni? That's your choice mate, but the point I was making is that HECS wasn't even a consideration back then, you wanted to go to uni and could get a job to support your alcohol/food/book habit while you were there, you could do it. And you could get a job without someone looking down their nose at your Bachelor of Arts degree as well.
> 
> ...


----------



## Iggy_Pop (24 July 2009)

jmac2005 said:


> Not a boomer, try the next lot, better half is..
> 
> Yes we are lucky we still have a house but will be working till 70..
> got fired up yesterday after the visit, we didn't go on any of their hols, or put everything in one basket, probably helped too.
> jmac




Well done jmac, keep up the pressure and I am sure you will do better than the original offer. 

All the best


----------



## Ironhalo (24 July 2009)

Jmac keep up the pressure mate, and remember that anything you do with CBA doesn't pleclude you from ASIC saying that the bank has to wipe your loan if they find it shouldn't have been granted in the first place. 

Best of luck mate, chin up.


----------



## Solly (25 July 2009)

*"Storm deluge and water under the bridge"*

"It's always nice to shake hands with old faces. Former High Court judge Ian Callinan no doubt will rediscover the joys as he toils to adjudicate how much compensation is due to battered and bankrupt investors in collapsed Storm Financial."

Read more in The Australian Financial Review of Saturday, 25 July 2009.


----------



## Solly (25 July 2009)

*"CBA lets Townsville duo go"*

"Two former senior managers for Commonwealth Bank of Australia in north Queensland have left the bank following investigations into the collapsed advisory company, Storm Financial."

Read more by Duncan Hughes on page 53 of The Australian Financial Review of July 24, 09.


----------



## chrisgee (25 July 2009)

Garpal Gumnut said:


> Don't worry mate, every dawg has its day, don't worry about a bus, I'll pick you up from the Ross Island Hotel in my Bentley and drive you to Lennons in Brisbane. If you don't snore you can sleep on the sofa in the big suite.
> 
> The big wigs have left 3 months of sittings in the courts for sept-nov 2011.
> 
> gg




thanks mr gg you made me laugh-yes i do snore loud especially if ive had a few reds-cheap reds these days and sometimes out of cardboard but hope this will change soon-geewiz a couple of senior bank johnnies been given the flick-thats very concidential isnt it-i think the "witch bank" is starting to see some things that arent too right with things-and i hope the good judge helps out as well making sure all is above board when negotiating things-also got a mate who is a stomer-his dear misses is not too flash at the moment either- i cant beleive how aged we are all starting to look compared with 12 months ago-wish we knew what was really happening the not knowninfg is taking its toll a bit-if there has been criminal things done i really hope these guys go into the big house for a while-may be it will be a lesson to others not to mess around with the ordinary folk- gee still not a peep from anybody at the palace at belmont-i hope this is all over soon-im back to work now-


----------



## Solly (25 July 2009)

*The submission to the 

Inquiry into Financial Products and Services in Australia

by AEC Group Ltd as authorised by Mr Carey Ramm;*

http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub154.pdf


----------



## Solly (25 July 2009)

Another six submissions of interest to the

Inquiry into Financial Products and Services in Australia;


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub149.pdf


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub152.pdf


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub157.pdf


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub159.pdf


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub160.pdf


http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub161.pdf


----------



## darkside (25 July 2009)

Solly said:


> *The submission to the
> 
> Inquiry into Financial Products and Services in Australia
> 
> ...





I do remember the TV interview, and it's quite amazing how AEC saw the writing on the wall, and detailed how it would all pan out , yet Storm continued to live in denial.


----------



## Solly (26 July 2009)

*"Storm loss takes its toll"*

"ONE in four Storm financial investors have begun taking medication for depression since the collapse of the Townsville-based company, according to a new survey."

More by Mitch Gaynor in The Sunday Mail here;

http://www.news.com.au/couriermail/story/0,23739,25834534-3122,00.html


----------



## Solly (27 July 2009)

*"Sacked salesman a 'scapegoat' for Storm"*

"Graham Lynham, A former top salesman with Commonwealth Bank of Australia claims he has been made a scapegoat for the bank's involvement in the collapse of Storm Financial, which is estimated to have led to $3 billion of client losses."

Read more by Duncan Hughes on page 44 in The Australian Financial Review of Monday, 27 July 2009.


----------



## Solly (27 July 2009)

*"CBA dismisses staff pending investigation"*

"CBA has confirmed that two of its former senior managers have left their positions after coming under scrutiny from the Australian Securities and Investments Commission (ASIC) in a seven month long investigation."

More from Mortgage Business here

http://www.mortgagebusiness.com.au/breaking-news/2460-cba-dismisses-staff-pending-investigation


----------



## Garpal Gumnut (27 July 2009)

Solly said:


> *The submission to the
> 
> Inquiry into Financial Products and Services in Australia
> 
> ...




Carey mate,

That is one good submission.

Good on you.

gg


----------



## shiftyphil (27 July 2009)

> *ASIC to investigate Storm Financial collapse*
> 
> FAILED advisory firm Storm Financial is to be investigated in a public examination funded by the Australian Securities and Investments Commission (ASIC)
> 
> ...




http://www.news.com.au/business/story/0,27753,25840794-31037,00.html


----------



## Solly (27 July 2009)

*ASIC to investigate Storm Financial collapse*

$450,000 allocated for a public examination.

Investigate "Possible breaches of duty and corporate offences"

More here in The Australian;

http://www.theaustralian.news.com.au/story/0,25197,25840794-12377,00.html


----------



## Solly (27 July 2009)

Garpal Gumnut said:


> Carey mate,
> 
> That is one good submission.
> 
> ...




gg, could to see you are back from the top end I hope the show went well, I heard that there was a nasty incident while trying to pen a frisky love sick Black Angus, it's good to see it didn't involve you 

Anyway, regarding the AECgroup submission I found the statistics quoted in Table 1.1. quite amazing:

"Proportion of clients that did not receive a Storm Financial / Colonial PDS *41.4%*

Proportion of clients that did not read the PDS or have it explained *59.3%*."


----------



## Solly (28 July 2009)

*"Storm Financial founders Emmanuel and Julie Cassimatis face grilling"*

"The couple, founders and joint chief executives of Townsville-based Storm, yesterday said the company's "directors and officers have nothing to fear from an open and transparent" inquiry."

More from Liam Walsh in The Courier Mail is here;

http://www.news.com.au/couriermail/story/0,23739,25842653-953,00.html


----------



## Solly (28 July 2009)

*"Storm Financial inquiry gets go-ahead"*

"THE liquidators of the failed Storm Financial empire are expected to call more than 40 witnesses to give evidence after the corporate watchdog approved a public inquiry into the collapse."

More by Anthony Klan in The Australian is here;

http://www.theaustralian.news.com.au/business/story/0,28124,25844151-643,00.html


----------



## Solly (28 July 2009)

*"No Storm connection says CBA executive"*

"Bank confirms no link.
Reports a former CBA executive was fired over links to Storm Financial are untrue."

More by Kate Kachor in Investor Daily is here;

http://www.investordaily.com/cps/rde/xchg/id/style/7035.htm


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## jmac2005 (28 July 2009)

What amazed me when we first met the Hardship team from which bank - she said she didn't know anything about the collapse of Storm Financial (she was from Sydney - did she live under a rock).  Also couldn't explain why our loan had to be approve from Mackay instead of the local branch which I had been with since I was born??  Couldn't really explain why the house had a valuation done without being seen yet when we bought an investment property we had a chap here who went through the place like the public trust does when you die... I never wanted to go guarantor for a loan (in between jobs) and had my father's words ringing in my ears don't go guarantor for a loan for family or friends, she said you would have paid the loan out when we sold the place from under you...(the financial planner said it didn't matter, the banks just approve loans - she is also the same person who told us in July - you won't lose your house), she is also the same person that continually included the the unit in the list of assets, when we continually told her it had sold a couple of years ago and to strike it from records - and why did she bother going on 60 minutes - what to shed a couple of tears)...
anyway, still no word from the solicitors, guess it will cost us to have this put in words to the which bank... (the handlers change every 5 minutes and its obvious the right hand doesn't talk to the left hand), they are probably fishing as well... bit of *rse covering on their end, quite picky on what we tell them.  Well least I' doing a variety of jobs I didn't know I could ever do and be nice to check out chicks whether the supermarkets or small stores.
jmac







Ironhalo said:


> Jmac keep up the pressure mate, and remember that anything you do with CBA doesn't pleclude you from ASIC saying that the bank has to wipe your loan if they find it shouldn't have been granted in the first place.
> 
> Best of luck mate, chin up.


----------



## bunyip (28 July 2009)

_Mark Weir, co-chair of Storm Investors' Consumer Action Group, supported anything "*to find out just where the blame lies* in the whole mess"._

I thought Mark Weir and Noel O'Brien and others at the helm of SICAG had already made up their minds where the blame lies....haven't they been claiming that all the fault is with the banks!


----------



## Solly (28 July 2009)

Submissions to the Parliamentary Joint Committee 
on Corporations and Financial Services;

By Luke Vogel;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub173.pdf

Plus Supplementary

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub173a.pdf


----------



## Solly (28 July 2009)

Another nine submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub162.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub163.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub164.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub165.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub166.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub167.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub168.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub171.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub175.pdf


----------



## darkside (28 July 2009)

bunyip said:


> _Mark Weir, co-chair of Storm Investors' Consumer Action Group, supported anything "*to find out just where the blame lies* in the whole mess"._
> 
> I thought Mark Weir and Noel O'Brien and others at the helm of SICAG had already made up their minds where the blame lies....haven't they been claiming that all the fault is with the banks!




Bunyip, that was a "given" they had been beating the drum right from the start , turning out the same old mantra as the Cassimatis website, in the pursuit of justice from the evil banks.

How bad would it look to be part of an investigation group , only to find you were part of the problem and not part of the solution !!!!!


----------



## carey ramm (28 July 2009)

It is great news about the public examination in the Federal Court and with a date of september should help provide some great insight into the whole debacle - the good thing is that u cant lie in court unless you want to risk perjury and judges tend to take a dim view of that!

So in a few weeks EC and Company will be taking the stand and finally answering some tough questions - lets hope they start with the advisers first so the scene can be set for EC. The reality is that EC and his band of "merry men" havent said anything of value or even apologised to their victims since this whole thing began. Well guys and girls your time of reckoning is just beginning!

Will be interesting also to see what role the other "independent" directors had in the last year.

The old BOQ has been in the press a bit of late and I think that in the next day or so it is going to get a whole lot worse.......

GG thankyou for your kind words on our submission. We wanted it to be a concise submission that provided some alternate views on how the financial sector should be reformed in light of recent events. We did not want our submission to be a storm bashing exercise - we think the Federal Court and ASIC are the more appropriate arenas for that.


----------



## Solly (28 July 2009)

*"ASIC releases super grant for Storm Financial investigation"*

"According to ASIC documents, Worrells received a grant of $441,760, but a statement from the liquidator said it had obtained more than $450,000 of funding. The previous record for a grant was $99,000."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/Article/ASIC-releases-super-grant-for-Storm-Financial-investigation/491965.aspx


----------



## Ironhalo (28 July 2009)

http://www.aph.gov.au/senate/committ...ons/sub173.pdf

In regards to your response Luke (Vogel), why is it that in the 51 pages of (admittedly well crafted) dialogue, is Storm not mentioned once as being in any way, shape or form partly responsible for ANYTHING that transpired?

Aren't you the 'Media' go-to man for SICAG? Sorry to beat a dead horse, but by proxy, SICAG's perceived focus on 'the banks at all cost and Manny was just a victim' again comes into question by association based on the sentiments in your submission.

I know you guys are trying to do what's best (and I agree wholeheartedly with your comments on the CBA treating Storm customers with absolute derision after everything went pear shaped), but surely you could acknowledge that the SICAG dinner-pals at Belmont are at least PARTIALLY responsible for some of this mess?

Why were Storm 'Financial Planners' (and I use that term loosely) happy to send retirees up to the hilt, knowing full well that each step-investment brought them one shove closer to the precipice? According to your submission, you worked for Jelich-Jones as well? So in other words, you have realised that at some small level you may be complicit in all of this? 

Sorry for the sarcasm, but I find it increasingly amusing/interesting that ex-Storm employees and associates of the Storm umbrella are now beating their chests seeking blood from the big bad banks on 'behalf' of the very clients they drew their salaries, 'hot V8 laps' and world trips from.

Some rather concerning points from your submission:
*'Storm Directors apparently did agree to cease contact with their clients until after the Christmas period in good faith. (So technically, ASIC didn’t gag Storm, but they did seek to!). It is clear that ASIC engaged in a very heavy handed treatment of Storm Financial on the basis of an ASSERTION by the CBA. This assertion has never to the best of my knowledge been backed up by any form of evidence.'*

So, the b.s. we got fed from the Storm offices about 'we've been forced by ASIC to keep our mouths shut' was a lie? You mean that during the time that I was paying Storm to monitor my investment, they decided in 'good faith' to not return anyone's call, despite knowing people were in margin call? Well that is illuminating. Talk about a 12 month ban ruining the business is laughable noting Storm effectively decided to stop answering phones and/or taking any action on behalf of clients in the worst financial incident since the 80's. That spells 'our company is effed' right there.

*'Were clients told of the LVR increases and or given an opportunity to opt out if they were uncomfortable with the decision? The answer is no.'*

Yeah you know why they weren't told? See above.

*'How is it defensible that the Australian Government can and did rush to the aid of “The Four Pillars” during the later part of last year by guaranteeing funds and borrowings to ensure a fundamentally strong banking system when at the same time those very same banks failed dismally to accord the same latitude to the same “mum and dad” Australians who guaranteed the banks security!'
*
The same could be asked of the Cassimatis's as to why their indemnity insurance was non-existant and why they decided to award themselves a few million dollars just before the company tanked.

*'Having subsequently viewed my loan application document (most of which was blacked out under the guise of being “Commercially sensitive evaluative information” - National Privacy Principle 6.2) I found that our income levels had been artificially inflated and expenses understated (2 dependent children had not been recorded).'*

Ask the friendly Storm adviser who submitted your forms to the CBA. Let me guess, he/she told you 'don't worry about that bit about expenses/income, we have all that information on file, we'll fill that out?'

Sorry mate, but the banks aren't solely responsible for this mess.


----------



## Garpal Gumnut (28 July 2009)

carey ramm said:


> It is great news about the public examination in the Federal Court and with a date of september should help provide some great insight into the whole debacle - the good thing is that u cant lie in court unless you want to risk perjury and judges tend to take a dim view of that!
> 
> So in a few weeks EC and Company will be taking the stand and finally answering some tough questions - lets hope they start with the advisers first so the scene can be set for EC. The reality is that EC and his band of "merry men" havent said anything of value or even apologised to their victims since this whole thing began. Well guys and girls your time of reckoning is just beginning!
> 
> ...





I'm confused about  where committee members of SICAG stand on Manny Cassimatis. A mate in townsville tells me they have been "deciding on the best submissions for the inquiry". Best for whom ?

Enclosed is a snippet from a Luke Vogel late last year in the Courier Mail. Is this the same Luke Vogel who was an adviser for Storm?



> If there is one thing that news publishers should not tollerate is sloppy reporting. The report is full of holes and inaccuracies. The reported should have asked alot more questions in order to report the story correctly.
> 
> 1. All clients are required to attend education workshops before they proceed. 2. A comprehensive "fact find" is completed before a preliminary financial plan is produced. 3. A financial plan is developed with full consideration of the clients circumstances. 4. Every client is required to initial EVERY page of every document produced along the way in order to ensure that they are fully aware of everything they are doing. 5. At every stage in the plan preparation process clients are given the opportunity to ask questions and seek clarification on points they may not understand. 6. Once everything is clear only then will implementation of the plan proceed. In short EVERY client knew exactly what they were getting into and only have themselves to blame if they now feel somehow cheated. Fortunately, the vast majority of their clients have strong faith in Emmanuel & Julie to navigate these turbulent times on their behalf. Incidentally, the 2005 Christmas party you refered to in the article was also inaccurately reported.
> 
> ...




And then this from January of this year in Quest Community News



> SCARBOROUGH:
> THE human side of the Storm Financial tragedy unfolded last week as almost 300 investors turned out at the Golden Ox, Margate, to form a united group ready to fight a long battle for compensation.
> -------------------------------------
> More reports in the Townsville Bulletin
> ...




Is this the same Luke Vogel?



Ironhalo said:


> http://www.aph.gov.au/senate/committ...ons/sub173.pdf
> 
> In regards to your response Luke (Vogel), why is it that in the 51 pages of (admittedly well crafted) dialogue, is Storm not mentioned once as being in any way, shape or form partly responsible for ANYTHING that transpired?
> 
> ...




I fnd it bizarre that former Storm Advisers and their relations seem to be leading the SICAG submissions after their inept knowledge and advice in financial matters led so many unsuspecting investors to ruination.

gg


----------



## Ironhalo (29 July 2009)

Nice detective work GG.

Like Ron Jelich, these Redcliffe based Storm employees somehow now suddenly feel outraged that their clients (whom had they been doing their job properly wouldn't have let them get themselves into this level of risk) have been dealt the hand of 'injustice' from the banks.

I have some admiration for Ron Jelich (albeit small) in that he pretty much repented his sins in his submission stating 'I should have spoken up....I will carry this to my grave', but it doesn't negate the fact that these people DIDN'T speak up, and ultimately were happy to earn the big bucks and enjoy cavorting in the Cassmatis's court; yet when it went pear-shaped, they are now the 'voice of reason' to the banks. The very institutions that although responsible for shouldering some of the blame, were in a symbiotic, profit-making relationship with Storm, and vicariously, their employees.. And don't tell me 'we never saw any of that!', my advisor loved telling me about Manny shouting most of the employees on the world trip in 08....Mediterranean wasn't it?

Verily, the hypocrisy offends me. I will hand it to SICAG, your moral support for victims has been commendable, and I am sure you have talked people back from the edge. But these are desperate people who should never have been pushed to the edge to begin with. 

51 page submissions from the media head of SICAG that completely fail to address the glaring failures of Storm to show any sense of responsibility, professionalism or competance in Oct-Dec last year leave me shaking my head in disbelief.

My mother, brother and sister (all Redcliffe locals), who were loyal clients of Jelich-Jones before they sold out refuse to attend any SICAG meetings for this very hypocrisy.

It's harsh, sure, but it's reality. Or at least a perception....and we all know that old saying...


----------



## Solly (29 July 2009)

Tony Raggatt from the Townsville Bulletin reports that more staff are expected to leave the Commonwealth Bank in the wake of the Storm Financial scandal. 

http://www.townsvillebulletin.com.au/article/2009/07/29/67125_business_desk.html


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## Solly (29 July 2009)

*"An estimated 100 Rockhampton investors have lost about $100 million."*

As reported in the The Morning Bulletin here;

http://www.themorningbulletin.com.au/story/2009/07/28/asic-to-probe-eye-of-storm/


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## donteventryit (29 July 2009)

Garpal Gumnut said:


> *Is this the same Luke Vogel?*
> 
> gg






Garpal Gumnut said:


> *I do not work for Storm Financial.*
> Posted by: Luke Vogel of 7:36pm December 14, 2008
> 
> gg




GG, I'd say he's got you on a technicality. It only says that he does not work for Storm (as in, at that time). It does not say if he ever worked for them. 

Pretty sure that all the adviser's were let go before 14/12/2008, so technically ...


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## Solly (29 July 2009)

*"Storm liquidators to hold public probe"*

"The Storm Investors Action Group says it is considering a list of victims to recommend as witnesses for the hearing."

More by Murray Cornish from the ABC;

http://www.abc.net.au/news/stories/2009/07/29/2639403.


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## Farencue (29 July 2009)

The advisers knew they were playing the game.
Greed kept them in the game and they willingly suckered the wood ducks for more.  Greed probably blinded them to the very real consequences of a game that is played and lost.

ASIC commenced it's investigation into Storm on December 12th.
In other words thats when the jig was up, sure Manny and Julie did the old switcheroo with the 5 million on December 15th but were quickly busted.

If Manny got caught with his hand in the cookie jar, where would that leave the ones on the lower rungs of the ladder, you know, the anonymous people aka the advisers, who willingly and happily got the ducks into this mess by encouraging and abetting them to get more funds from the banks?  I dont think the ducks were all greedy but maybe they were clueless.

Not looking good at all with ASIC on the trail - the best bet as an adviser I would think, is to bluff it out and take up the "evil banks" mantra on behalf of those they knowingly suckered.  
After all, it is now the banks asking for the money they lent out, not Storm, they already got theirs upfront.  
Pretty clever formula really: "you borrow money, give me a cut and we will have a flutter with the rest.  Oh, yes you do have to repay the bank, but we will worry about that later after you get rich."

Hopefully in September we will get to the crux of the matter instead of the Bluff Boys hanging on for as long as they possibly can with obscure submissions to the inquiry and dodgy websites.


----------



## Ironhalo (29 July 2009)

So SICAG are going to 'choose' who they want to go before the probe eh?

None of their members who are against Manny or anti-Storm I would hazard a guess?


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## darkside (29 July 2009)

GG, Nice work, if ever CSI is looking for a detective you are the "go to" man , that is fantastic, Luke"s story now has about as much credibility as a "today tonight" hatchet job" on a dodgy time share resort .... Go you good thing !!!!!!


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## darkside (29 July 2009)

Ironhalo said:


> Nice detective work GG.
> 
> Like Ron Jelich, these Redcliffe based Storm employees somehow now suddenly feel outraged that their clients (whom had they been doing their job properly wouldn't have let them get themselves into this level of risk) have been dealt the hand of 'injustice' from the banks.
> 
> ...




Ironhalo, good post, i agree with most of it, although, unlike yourself, i have no sympathy for Ron Jelich, he knew what he was doing was wrong, he had plenty of opportunities to say enough is enough, it's going to come crashing down and people are going to hurt.
When he was in the paper blaming the "Evil Banks" for the misery they had caused he could have been decent enough to say , i also did a deal with the devil and led the flock to the slaughter but no, it was everyone elses fault.
christ can't i sue someone for that, of course, "the evil banks"


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## Ironhalo (29 July 2009)

Heheh thanks dark, don't get me wrong though, by stating I had some admiration, that level of admiration hovers somewhere between admiration towards my morning bowel movements, and a Japanese war criminal on ANZAC Day.


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## darkside (29 July 2009)

Ironhalo said:


> Heheh thanks dark, don't get me wrong though, by stating I had some admiration, that level of admiration hovers somewhere between admiration towards my morning bowel movements, and a Japanese war criminal on ANZAC Day.




HA ha, ok thats funny. Hey i love Lucas Vogel's , statements" Please be advised that I have never been an employee of Storm Financial Ltd"  yet in the paper "Speaking after the meeting, Luke Vogel, a former Storm Financial adviser".  Come on Lucas, your using just a little too much lattitude when it comes to the truth.

I'm sure the submission are not going to be that gulliable and stupid, well i hope not !!!!!!!


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## Hidden Agendas? (29 July 2009)

Ironhalo said:


> So SICAG are going to 'choose' who they want to go before the probe eh?
> 
> None of their members who are against Manny or anti-Storm I would hazard a guess?




The SICAG executive, which is comprised of a former Storm employee, the father of an adviser who should rightly be facing ASIC investigation and several close friends of Emmanuel & Julie, will decide how this is played out. More like a cheer squad for Storm.

Who are they representing, the group, themselves or others?

They have ingratiated themselves into the CBA dispute resolution process when Slater & Gordon is clearly more able to look after the interests of the litigants.

This extract from their website is telling:

"SICAG was formed out of a need to seek justice (and restitution) from a banking and financial services industry that has been able to get away with murder!

Hundreds if not thousands of mum and dad investors have lost their life savings and any possibility of a reasonable future in retirement as a direct result of poor banking industry practices and perhaps poor financial advice."

Yep, the Bank's fault and maybe, just maybe a little bit of poor advice.

Until they acknowledge what everyone else knows, that the advice was rubbish and that E&J and the advisers started this road to misery, they need to be treated with absolute suspicion as to their motivation and agenda.

Of course they won't because they can't as this would harm themselves, their families and their special friends.


----------



## Solly (30 July 2009)

*"Bank agrees to transparency on loans"*

"The Commonwealth Bank of Australia will hand over documents about devastated Storm Financial customers in a resolution process with lawyers Slater & Gordon."

More by Liam Walsh in the Herald Sun here;

http://www.news.com.au/heraldsun/story/0,21985,25855046-664,00.html


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## Solly (30 July 2009)

*Slater & Gordon signs an umbrella agreement with the Commonwealth Bank of Australia (CBA) establishing the Storm Financial Resolution Scheme.*

Key elements of the scheme include:
• An individual review by CBA of each client’s circumstances assessed against a framework
developed in consultation with S&G;
• Full and frank disclosure of documents and facts relevant to each client by CBA;
• The provision by S&G of independent legal and financial advice paid for by CBA;
• A commitment to good faith negotiations; and
• Former High Court Justice Ian Callinan to provide independent determinations where
agreement cannot be reached between CBA and the client.

See the full Slater and Gordon Media Release of 29 July 09 here;

http://www.slatergordon.com.au/pages/news_publications.aspxhttp://www.slatergordon.com.au/pages/news_publications.aspx


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## DocK (30 July 2009)

Hidden Agendas? said:


> The SICAG executive, which is comprised of a former Storm employee, the father of an adviser who should rightly be facing ASIC investigation and several close friends of Emmanuel & Julie, will decide how this is played out. More like a cheer squad for Storm.
> 
> Who are they representing, the group, themselves or others?
> 
> ...




Absolutely!  This is exactly why I chose not to join this group, and resent the fact that they are seen to be representative of all "ex-storm clients".  I acknowledge that there may not have been any "deal" for me to consider from CBA without the pressure that they have mounted, but I absolutely start frothing at the mouth and steaming at the ears whenever I read a submission like Vogel's where *all* the blame is placed squarely on the evil banks and none apparently attributed to a flawed model built largely around a massively inflated ego and predatory nature.  The more information that comes to light about the way the Cassimatis' conducted themselves, the more unethical and immoral they appear imo - and I would be disappointed if they emerge from the whole affair unscathed.

I have read most of the submissions (thanks, Solly, for the excellent links) and while a lot of them bring tears to my eyes, I do find the "how could the bank have possibly lent me this much money on my income" line to be hard to swallow.  I knew what my income was when I accepted my loans, and so would every other storm client.  Regardless of whether the bank in question was acting on accurate information, and/or applying standard loan evaluation criteria or not (and that's a whole other can of worms) the person accepting an offer of finance knows what their own financial situation is and surely knows that loans have to be repaid one way or another.  

The lack of transparency/disclosure about the true nature of the relationships between storm/cba/cgi/macquarie are another matter entirely in my view, as is the nature and methods of valuations used to solicit further borrowings.


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## Garpal Gumnut (30 July 2009)

There is more to come out about SICAG.

Keep reading ASF all you Storm victims for independent, financial adviser free, information on the true rogues in the wipeout of your savings.

SICAG is top heavy with former Storm employees, managers and family of Storm employees.

Remember it was Storm that got you into this in the first place and then they lined you up like wood ducks for the banks.

gg


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## Ironhalo (30 July 2009)

DocK, so true. I was nearly apoplectic with rage reading Luke Vogel's submission. 51 pages of 'the banks are evil, and Storm did the best they could to save the mum and dad investors'.....rubbish. What is abundantly clear in all the mess is that the following happened:

1. Storm was doing very well leading up to the GFC, with many of their customers nevertheless in a risky situation should the market fall about half. Custoemrs were told that there were safety nets in place to ensure that they were sold down before this happened.
2. GFC hit, Storm started losing income from a lack of people investing. Step investments dried up and Storm started going backwards. It appeared for all their bluster and success, Storm had very little cash in reserve for the business should they hit a rough patch.
3. Storm sent letters in Oct advising all investors to sign release forms allowing Storm to sell their investments down and hold the cash in Cash Management accounts while the crisis 'blew' over. This didn't happen. In fact, sensing a quick cash grab, Storm investors were told to 're-value' their clients houses and take out further margin loans/increases as a way of skimming 6-7% off these step-investments to keep the Cassmatis' able to buy aviation fuel for the private jet for the next few months.
4. Storm in the meantime told ASIC they would stop speaking to clients out of 'good faith'. Storm then told their client base that ASIC has imposed this ban. Thousands of 'mum and dad investors' spend the next month and a half over Christmas desperately trying to get in contact with Storm, to no avail.
5. The Cassmatis's sensing the ship going down, approve the transfer of a few million dollars (all that is left) into their own accounts using a family member to 'smuggle' the money out of the company coffers under the guise of a 'normal business payment'.
6. By the end of Christmas, Colonial/CBA has sold all Storm clients down regardless of whether they are in margin call or not. Some clients have minimal losses, while heavily geared 'Stormified' investors are wiped out.
7. Cassmatis attempts to take up the clarion call for the 'mum and dad investors' he has leeched off stating that the banks (in conjunction with a 'black swan' event) are responsible for wiping out his clients. There is outcry against him. Manny rethinks his options and tries to further an agenda of blaming the banks.
8. SICAG, a group consisting of Cassmatis sycophants and ex-Storm employees and supporters of Storm (their heads filled with memories of the halcyon days of EOY parties and world trips) starts an active campaign de-crying the banks as being architects of the demise of Storm.

Predictions:
9. SICAG will hand pick a bunch of die-hard Storm victims from their pool of members who will dutifully recant the belief that the banks are responsible for this entire mess, with the hope that Manny/Julie are deflected from all/any repercussions. Not to mention the fact that SICAG is now populated by 'born again' ex-adviser's that are trying to protect themselves and their family members from any calls of negligence.

I can't believe the SICAG members don't see this.


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## Smiley (30 July 2009)

Great posts and totally agree with your points Ironhalo - a good summary - a mark of a person is how one handles a crisis and EC/Storm did so in late 2008 by leaching what remained from clients.  
Reminds me of the cult followings of many users (whether fascists/totalitarians, cult leaders; Madoff made people feel special too - eventually in all the wrong ways)
Love seeing storm advisers falling over each other to dob in shady practices of EC and there is much more to be revealed.  
SICAG does not speak for the many stormified I have spoken to, counselled and committee should be careful with whom they align themselves at this time . . . could not even finish reading Vogel's tale - blah, blah; he worked in IT for storm  . . . . 
SICAG committee  - time to distance yourself from all things storm


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## Farencue (30 July 2009)

Ironhalo, I believe the stormified will have no choice but to see the truth once September rolls around.
The SICAG bluff will be revealed for what it is.
Kinda reminds me of when Clinton said he "did not have sexual relations with that woman" although the truth was outed eventually.

The Storm MO is to bluff your way until the end, by that time you would have hopefully lined all your ducks up in a row, that way when you are found to have acted improperly (as the advisers did) by ASIC, you will still have all the sheep bleating your innocence.

SICAG stunk like a rotten fish right from the start!!!

PS _ Smiley, I saw something in brief the other night where Madoff said he couldnt believe that he got away with what he did for so long!!


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## Solly (30 July 2009)

*"PI insurers face $300m in claims"*

"Those who are holding Storm Financial … will probably announce by the end of this year that they're out of it - they're not covering for financial advisers,"

More here by Ruth Liew in Financial Standard;

http://www.financialstandard.com.au/news/view/26400/


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## Solly (30 July 2009)

*"God brought you to me"*

"A financial planner who has interviewed dozens of former Storm Financial clients has revealed some of the strange practices employed by former Storm agents to get sales across the line."

More here by Lucinda Beaman in Money Management;

http://www.moneymanagement.com.au/article/God-brought-you-to-me/492413.aspx


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## Steve Borden (30 July 2009)

Solly said:


> *"God brought you to me"*
> 
> "A financial planner who has interviewed dozens of former Storm Financial clients has revealed some of the strange practices employed by former Storm agents to get sales across the line."
> 
> ...




It was more like, I have a trip to Italy to pay for, $1m @ 7% @ 10% will cover part of this, thank you God for bringing them to me.


----------



## Solly (30 July 2009)

Another six submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub178.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub179.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub181.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub187.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub189.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub190.pdf


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## Solly (30 July 2009)

Solly said:


> *"God brought you to me"*
> 
> "A financial planner who has interviewed dozens of former Storm Financial clients has revealed some of the strange practices employed by former Storm agents to get sales across the line."
> 
> ...





This is the link to the submission Lucinda refers to above, number 178;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub178.pdf


----------



## Garpal Gumnut (30 July 2009)

Solly said:


> *"God brought you to me"*
> 
> "A financial planner who has interviewed dozens of former Storm Financial clients has revealed some of the strange practices employed by former Storm agents to get sales across the line."
> 
> ...





Part of that article reads



> 30 July 2009 | by Lucinda Beaman
> Print this article Comments
> 
> David Price
> ...




Listen up SICAG and Storm advisers. This is what we have said all along. Your site still has the money spiders and advice to clients stung by Storm to seek financial advice from advisers who follow the Storm model, and don't ask for fees upfront until they are stung for the 7%.

At least you took the Storm logo down from the SICAG site, after much pushing from this forum.

Do the decent thing and save these poor bastards from being duped by Storm clones in the future.

Thankfully others apart from SICAG and the higher ups there, are putting submissions to the inquiry.

The truth will out.

gg


----------



## Anastasia (30 July 2009)

DocK said:


> I have read most of the submissions (thanks, Solly, for the excellent links) and while a lot of them bring tears to my eyes, I do find the "how could the bank have possibly lent me this much money on my income" line to be hard to swallow.  I knew what my income was when I accepted my loans, and so would every other storm client.  Regardless of whether the bank in question was acting on accurate information, and/or applying standard loan evaluation criteria or not (and that's a whole other can of worms) the person accepting an offer of finance knows what their own financial situation is and surely knows that loans have to be repaid one way or another.




I agree with you in that we knew what our income was (sad as it is), and acknowledge that one day the loan would have to be repaid. And that is where our trust built and we made a very bad "call"..... that is why we believed our investment was so solid. We thought that surely with such huge loans and a dismal income (and we are not "youngsters"), our investments through Storm Financial must be very solid/sound and going to produce favourable enough returns in the future otherwise the banks would not lend to us in the first place. In hindsight it was apparently very foolish to come to this conclusion and place so much trust in the banks. 
Don't get me wrong. I also hold Storm Financial very responsible for our position...neither is an innocent party in this nightmare.


----------



## Solly (30 July 2009)

*"CBA claims scheme for Storm clients established"*

"The Commonwealth Bank says the establishment of the Storm Financial Resolution Scheme will help to ease the hardship of customers caught up in the company's collapse."

More from the ABC here;

http://www.abc.net.au/news/stories/2009/07/30/2640756.htm


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## Ironhalo (30 July 2009)

http://www.smartcompany.com.au/Prem...ons-from-the-collapse-of-Storm-Financial.html

Some salient advice for the SICAG stooges that think Manny/Storm could do no wrong.

And:

http://www.smartcompany.com.au/fina...ail-to-back-up-claims-of-bank-conspiracy.html

Check this section out:
'Worrells found that by 19 November last year, the company's joint chief financial officer knew a $11.2 million tax bill was due on 1 December, but there were no funds to pay the bill.

On 15 December, Emmanuel and Julie Cassimatis paid a dividend to themselves of $2 million. On that day the company did not have the statutory minimum number of directors.

On 23 December, the $2 million payment was reaffirmed after Julie Cassimatis's sister Dawn Collette joined the board as a director.'

Nah it's all the bank's fault. Manny/Julie were just fighting for justice on behalf of their clients.


----------



## Judd (30 July 2009)

Anastasia said:


> In hindsight it was apparently very foolish to come to this conclusion and place so much trust in the banks.
> Don't get me wrong. I also hold Storm Financial very responsible for our position...neither is an innocent party in this nightmare.




This is where I have the problem.  The banks did not provide financial advice, Storm did.  The banks - or it seems certain employees of the banks facilitated the matter - lent money.  So why place trust in the financiers to provide advice or even care about you?  They lend, they want it back plus interest.  That's what it was all about.  Pretty easy to understand.

The bank lends me money to buy a home. Are they expected to provide advice on decorating the thing?  Advice on possible improvements to the property to enhance it's sale value?  Suggest that you put $xx amount aside per month so that your rates/insurance/maintenance costs are covered?  And the buggers even expect me to pay the money back and they can jack up the interest rate.  Horror!

Some of the loans involving Storm clients are obviously really suss otherwise the CBA would not have entered into the current negotiations but in the final analysis you were initially really suckered by Storm advisers.  The subsequent actions are the periphery because without Storm advice you simply would not have gone there because you did not have the knowledge nor the apparently ability.  The piper played and you followed, mesmerized by it all until too late.

A tip.  Never invest except over your own name, over your own signature with your own broker and NEVER give anyone the right to act on your behalf in these matter except under an Enduring Power of Attorney.  And if you do not understand what I am saying then stick to term deposits.


----------



## Solly (30 July 2009)

I got sent this link from a Stormer, who is now starting to feel a like happier. 

Is this the real reason for the Storm saga....??

*"Storm Financial had bad Feng Shui"*

An older article....but a good one that you may enjoy...


----------



## Solly (30 July 2009)

*"Commonwealth Bank extends commitment to customers impacted by Storm Financial"*

The Commonwealth Bank has extended for another month a moratorium on interest payments for customers impacted by the collapse of Storm Financial.
The extension to 30 September 2009 is to enable customers to register for participation in the Storm Financial Resolution Scheme.

Customers who register for the Scheme will have their interest payments suspended until their participation in the Scheme ends: either through the customer accepting an offer or the customer withdrawing from the Scheme.

See the full Media Release here;

http://www.commbank.com.au/about-us/news/media-releases/2009/300709-news-storm-financial.aspx


----------



## Anastasia (30 July 2009)

Judd said:


> This is where I have the problem.  The banks did not provide financial advice, Storm did.  The banks - or it seems certain employees of the banks facilitated the matter - lent money.  So why place trust in the financiers to provide advice or even care about you?  They lend, they want it back plus interest.  That's what it was all about.  Pretty easy to understand........And if you do not understand what I am saying then stick to term deposits.




I will totally ignore your condesending attitude and not give it the attention you are seeking...I just hope you feel a lot bigger for saying it and that it was worth putting me down.

If you read what I said in my earlier post, I do hold Storm very accountable for giving me the bad advise, and I cannot believe now how gullible we were but..... I believe that if the banks realized that there is every likely hood this investment will go pear shaped, that their clients would have absolutely no way of repaying the loans, then it was their duty of care not to give us the loans. When they did however keep increasing our loans over the years, it reinforced in us the belief that Storm must be giving us the right advice.

If I were prescribed a drug by my doctor and had that script continually filled by my pharmacist who knew my medical condition and he knew that it would eventually make me very ill or harm me. Qould I not hold the pharmacist accountable? Yes the doctor is very much to blame for prescribing me the drug. 

But is not the pharmacist also to blame. He knows that it would eventually harm me. If he said "No I cannot give you this drug as it will harm you"; wouldn't that make me then want to get another opinion or at least question why I am being prescribed such medication. 

I am sorry Judd if I am not so "bright" when it comes to finances...I guess that is why I sought financial advice. And also Judd just for your information, I am a very capable person working in a very specialised area that I feel very confident in and capable. People seek my advice because they have no or little knowledge in what I do but require my assistance. They build up a lot of trust in me and I have a duty of care to them. You see Judd....we don't have to be all knowing about everything. And if you do not understand what I am saying then don't build a house with glass walls.


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## Garpal Gumnut (30 July 2009)

Garpal Gumnut said:


> Talking of real estate the agent took me through Manny and Julie's pile on Melton Tce. the other day. Its not a house I'd want to live in, Palazzo Pizza type place, smaller than I thought, the lift works and the views are ok, but only just ok. The chandelier doesn't look worth the money, Waterford crystal are in receivership so it may increase in value if they fold up shop. The bedrooms are ok, but not fantastic. I didn't like the kitchen. Garpaldog would not be happy in the yard. The fengshui is all wrong.
> 
> gg






Solly said:


> I got sent this link from a Stormer, who is now starting to feel a like happier.
> 
> Is this the real reason for the Storm saga....??
> 
> ...





As you can see from the article in the Bully ( Tsv Bulletin) and from garpaldog's reaction back in February to the yard of Manny's pile on Melton Tce., the whole show was an accident waiting to happen. 

Too much nouveaux clutter getting in the way of giving proper advice to the poor mugs who paid for the tawdry baubles and fibro that made up storm Headquarters.

Just driving past it any self respecting Chinese person would put his foot on the gas and crash the lights at Blackwood St. to avoid the bad fengshui.

gg


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## Judd (30 July 2009)

Anastasia said:


> I will totally ignore your condesending attitude and not give it the attention you are seeking...I just hope you feel a lot bigger for saying it and that it was worth putting me down.
> 
> If you read what I said in my earlier post, I do hold Storm very accountable for giving me the bad advise, and I cannot believe now how gullible we were but..... I believe that if the banks realized that there is every likely hood this investment will go pear shaped, that their clients would have absolutely no way of repaying the loans, then it was their duty of care not to give us the loans. When they did however keep increasing our loans over the years, it reinforced in us the belief that Storm must be giving us the right advice.
> 
> ...




You left the "c" out out condescending.

Yep I annoy people sometinmes  It is not intentional usually.  My IQ is between 100 and 120.  Average just like most.  Very good at somethings - like most people, very bad at others - like most people.  Actually very much average.

BUT having sufficient capital losses that my estate will have to deal with that issue once I shuffle off this mortal coil and having lost additional funds having to use assets to pay out loans and stuff like that, I feel OK about asking questions and being skeptical about justifications on reasons people - of average intelligence - do their dosh.

Don't know you, you don't know me.  Fine.  Let's keep it that way as I intend to.


----------



## Anastasia (30 July 2009)

Judd said:


> You left the "c" out out condescending.




...people in glass houses Judd....


----------



## Trevor_S (30 July 2009)

Anastasia said:


> You see Judd....we don't have to be all knowing about everything.




Indeed but the entire reason you go to School/Uni is to get an education, to go on to get a job.  The main reason you get a job is to earn money.  You then spend you whole life working to earn money.  I would expect EVERYONE to want to spend a modicum amount of time understanding something they invest 50+ years of their life working towards ie earning money.  I can't know everything but that's why I never bothered to learn how to lay a concrete slab, or work a chainsaw, or weld, or fix a car.  I didn't spend my entire life working towards having one.  If the Car craps itself, I will catch a taxi or ride a pushbike, inconvenient but no big deal.  Some smooth talker cons me out of all my money through self imposed naivety, it's much more then an inconvenience.  I am sure I fall in about the middle of the IQ bell curve, so you don't need to be the sharpest tool in the shed to work that out.  

Leverage out the ying yang and buy STW and no need to pay me a commission... similar advice Storm gave "investors".  I mean come on, the guy reeked... He had "Statistics for Management" on his desk for his TV ad, I have that book on the shelf behind me, that alone was enough to raise alarm bells 

If you don't understand, as you insist, put it in the bank.... (oh the irony !)

Blame ?  IMO
1) 70% "the investor", 
2) 26% Storm, 
3) 4% the banks.  

The bank gave you heaps of money because that's how margin loans work (thank god), and they had security over the shares, you abdicated responsibility to monitoring that to a bunch of charlatans, now it looks like they ability to gain access to the wonderful product will be curtailed because the Government feels the need to try an attempt to protect people from themselves.  

No use going after 1 or 2 as they have bupkiss, only option is to go after 3 and use the weight of a self indulgent publics poor opinion on banks to help sway the process and grab the ear of some property speculating pollie to help out.

I am sure if any of the "investors" made a motza you would not have been thanking the bank.

Situation sucks for Storm investors but it's their own doing... I will reserve my sympathy and donations for people like this

http://www.jamesnachtwey.com/jn/images/JN0011SUINGA.jpg


I didn't get anything from a shi*ty investment in Pasminco all those years ago, I should have sued the bank  ? nahhh.. I take responsibility for a lack of prudent due diligence on my part 

I see another charlatan is in town, Dyhpania Bolt (sp ?)... wonder how many will go ?


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## Judd (30 July 2009)

Anastasia said:


> ...people in glass houses Judd....




I'm of Irish heritage.  T'was to be sure, to be sure.


----------



## Judd (30 July 2009)

Trevor_S said:


> ...The bank gave you heaps of money because that's how margin loans work (thank god), and they had security over the shares, you abdicated responsibility to monitoring that to a bunch of charlatans, now it looks like they ability to gain access to the wonderful product will be curtailed because the Government feels the need to try an attempt to protect people from themselves.




I tend to agree.  There is nothing wrong with margin loans as a product.  They are very, very simple to operate and understand if you take the time (about ten minutes with a spreadsheet) and are interested.  If not stay away.  Just keep the bloody gearing low.  Unless you have gonads the size of basket balls, wire on your chest as opposed to hair, and rip the top off long-necks with your gums as only [insert non-derisory name] need teeth, DON'T go above 30% gearing, ie asset value v loan if I have to spell it out.

That is where I have difficulty with the submission by David Price from Strategy Planning.  In his submission he is proposing that only those on incomes of $180k plus should be allowed access to margin loans.

Sorry fella, but a lot on those incomes have had their Ferrari's and Porches repossessed as well as foreclosure on their homes.  Plus they are selling off the holiday pad at Portsea.

Oh well, life and all that.

PS:  And there is a God?  Shall refrain as the person in the photograph you provided a link to, Trevor_S, requires more than profanity is able to provide.   Hell can be on this earth.


----------



## darkside (30 July 2009)

Judd said:


> This is where I have the problem.  The banks did not provide financial advice, Storm did.  The banks - or it seems certain employees of the banks facilitated the matter - lent money.  So why place trust in the financiers to provide advice or even care about you?  They lend, they want it back plus interest.  That's what it was all about.  Pretty easy to understand.
> 
> The bank lends me money to buy a home. Are they expected to provide advice on decorating the thing?  Advice on possible improvements to the property to enhance it's sale value?  Suggest that you put $xx amount aside per month so that your rates/insurance/maintenance costs are covered?  And the buggers even expect me to pay the money back and they can jack up the interest rate.  Horror!
> 
> ...




Judd, i will go out on a limb for you , once again i found your post , firm but fair, it got to the point , although some what brutally.
Clearly, some may want it "sugar coated" and with the level of blame pointed at someone else, lets face it, it is human nature ! cheers


----------



## Anastasia (30 July 2009)

In my life time, I have flown interstate and international many a time. I don't know how to fly a jet. I don't even know how to close the doors. I don't know what the pilot looks like, if he is healthy, young, old, of sound mind. I don't know what condition the jet is in, nor the runway, or if the wallabies have been cleared from our lovely take-off/landing strip, let alone the birds. 

I don't place my life's savings in the pilots or airlines hands. But I do place my *life* which I believe is worth so much more. And why do I do this? Because I trust that there are enough governing bodies and standards in place to guarantee me this protection. Every governing body has a Duty of Care to their clients.....financial advisers and banks not being exempt. 

Trevor_S..... I agree with you that we are culpable - but not 70%. My husband and I have belted ourselves for our naivety many a time. And we have learnt one of lifes hard lessons. We are paying the price. But so too should Storm and the financial institutions for their part in this catastrophe, and I believe that 26%/ 4% is letting them off too generously.

I wonder if in future I should check out the cockpit and see if that diploma is hanging up on the cabin wall.


----------



## Julia (30 July 2009)

Anastasia said:


> I will totally ignore your condesending attitude and not give it the attention you are seeking...I just hope you feel a lot bigger for saying it and that it was worth putting me down.



Anastasia, I don't find Judd's remarks condescending.  They are realistic, though.   He probably wouldn't get 10 out of 10 for tact, but this is a stock forum, not a support group, as has been pointed out previously on this thread.
I'm very sorry that you're in a difficult situation.  Can be difficult to be objective about things when you're so personally affected.






> If I were prescribed a drug by my doctor and had that script continually filled by my pharmacist who knew my medical condition and he knew that it would eventually make me very ill or harm me. Qould I not hold the pharmacist accountable? Yes the doctor is very much to blame for prescribing me the drug.
> 
> But is not the pharmacist also to blame. He knows that it would eventually harm me. If he said "No I cannot give you this drug as it will harm you"; wouldn't that make me then want to get another opinion or at least question why I am being prescribed such medication.



Completely disagree.  It's not the pharmacist's role to interfere in treatment unless you specifically were to ask him/her for advice.  Even then the pharmacist's training does not equate to that of the doctor.
So the analogy doesn't hold water imo.

Ditto your analogy about pilots and planes.  If you died in a plane crash, it might be nothing to do with the pilot, and lots to do with the aircraft, the weather, anything at all.


----------



## darkside (30 July 2009)

Anastasia said:


> In my life time, I have flown interstate and international many a time. I don't know how to fly a jet. I don't even know how to close the doors. I don't know what the pilot looks like, if he is healthy, young, old, of sound mind. I don't know what condition the jet is in, nor the runway, or if the wallabies have been cleared from our lovely take-off/landing strip, let alone the birds.
> 
> I don't place my life's savings in the pilots or airlines hands. But I do place my *life* which I believe is worth so much more. And why do I do this? Because I trust that there are enough governing bodies and standards in place to guarantee me this protection. Every governing body has a Duty of Care to their clients.....financial advisers and banks not being exempt.
> 
> ...




Anastasia, i agree, i would be more than happy whilst sitting on the international flight with you to have trust in the pilot, but then should'nt the hostie be able to fly the plane for a while, lets face it she is in the industry so that just goes without saying .

We are on the same flight are we not, i booked a seat on Asiana Airlines , i didn't know they had the worst safety record in the world , well i would have if i had done just a smidgeon of research on the airline. So here we are , the worst airline in the world with the hostie flying it, so who can i sue for putting me in this terrible predicament.


----------



## Judd (30 July 2009)

Anastasia said:


> I wonder if in future I should check out the cockpit and see if that diploma is hanging up on the cabin wall.




Nah.  Rather check that s/he has been snorting clean coke before trundling down the run[high]way at 200mph.


----------



## Anastasia (30 July 2009)

Judd said:


> ....There is nothing wrong with margin loans as a product.  They are very, very simple to operate and understand if you take the time (about ten minutes with a spreadsheet) and are interested.  If not stay away.




I agree that there is nothing wrong with margin loans and we fully understand the mechanics of its operation. When our margin loans were closed down, we had sufficient funds to pay it out.

It was our home loan that was our undoing as we, like many ex-Storm clients have mentioned in their submissions, were under the impression/ guaranteed that our homes would never be at risk...there was an "arrangement" with the banks for this never to occur. And we believed them as it was the only way we could reason as to why the banks would lend us the money in the first place. 

We could and may still have to sell our home and walk away with nothing to clear the debt. But I cannot understand how in a full home loan (not low doc loan), when all assets, liabilites, incomes etc are listed, we could secure a home loan unless there was a "special" arrangement between Storm and the bank.


----------



## Anastasia (30 July 2009)

Julia said:


> ...
> Completely disagree.  It's not the pharmacist's role to interfere in treatment unless you specifically were to ask him/her for advice.  Even then the pharmacist's training does not equate to that of the doctor.
> So the analogy doesn't hold water imo.




Julia, I agree it is not the pharmacist's role to interfer in treatment nor give advice. But drugs is their business as are the side-effects and contraindications. I actually have to be on a medication which clashes with another drug. The first time I was put on it, I went through a very serious cross examination by the pharmacist. He was still not satisfied and actually phoned my doctor to clear up the point of contention.

The pharmacist ended up prescribing me the meds eventually but only after stressing his concerns and my speaking again with the doctor. The point I guess I am trying to make is that he made me alert to a fact. That I now take the drug is my decision based on all the facts. I acknowledge that it is my decision to put the tablet in my mouth...not the doctors nor the pharmacist... but I now have all the facts to make that decision. And my doctor was actually impressed with the "young" pharmacist's concerns as drug errors can happen very easily.


----------



## Judd (31 July 2009)

Anastasia said:


> I agree that there is nothing wrong with margin loans and we fully understand the mechanics of its operation. When our margin loans were closed down, we had sufficient funds to pay it out.
> 
> It was our home loan that was our undoing as we, like many ex-Storm clients have mentioned in their submissions, were under the impression/ guaranteed that our homes would never be at risk...there was an "arrangement" with the banks for this never to occur. And we believed them as it was the only way we could reason as to why the banks would lend us the money in the first place.
> 
> We could and may still have to sell our home and walk away with nothing to clear the debt. But I cannot understand how in a full home loan (not low doc loan), when all assets, liabilites, incomes etc are listed, we could secure a home loan unless there was a "special" arrangement between Storm and the bank.




I certainly hope that you do not lose your home.  Nup.  No way.  In my youth even though I was working, I actually had to spend time under a tent for a week or so.  Had no funds and no where and no one to turn to.  Rather unpleasant.  Nobody with any semblance of empathy or a partial working brain takes any pleasure in the discomfort or distress of others.

But once we have been there do we question?  Bet your bottom dollar we do.

Seems your home loan was probably "rolled-up" in your overall loan by the Good Ol' Boys at Storm.

Sh!te its complicated.  Home loan taken out (who cares which bank), those funds plonked down for margin loan (which or that bank).  Woodducks talked/encouraged (Where is Marhilia Jackson a'singing and a'rocking to bring the Good Lord to the people) to sign all those lovely monies over to Storm to manage.  Yeah, babe, gimmie a separately managed account to Bloom after.  I treat you like my own.

Once these loans are rolled up and once you hand over management of both your assets and your debts you are owned.  You have lost control and are swimming with sharks.

The amount of debt trashed Storm clients.  The asset value fell but the level of debt remained the same.  There was no "out" unless you stood at your advisers desk with a VR1 chambered for a 505 Gibbs loaded and unlocked.

Nup.  A better brain than mine is required for this quagmire but I am certain that unless individuals are prepared to stand in front of a mirror (privacy can be an avenue for quiet contemplation) and say, gently at first but getting more insistent over time, "I screwed up" there will be no personal closure.  

Plucking hurts at a number of levels but ongoing anger just don't cut it.


----------



## Ferret (31 July 2009)

darkside said:


> Anastasia, i agree, i would be more than happy whilst sitting on the international flight with you to have trust in the pilot, but then should'nt the hostie be able to fly the plane for a while, lets face it she is in the industry so that just goes without saying .
> 
> We are on the same flight are we not, i booked a seat on Asiana Airlines , i didn't know they had the worst safety record in the world , well i would have if i had done just a smidgeon of research on the airline. So here we are , the worst airline in the world with the hostie flying it, so who can i sue for putting me in this terrible predicament.




Darkside has it right.  This is a good analogy.


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## Pindibog (31 July 2009)

How is it the clients fault that did not mortgage a house to invest?
Had been using the ML facility moderately for over 13yrs. Never received margin call. Let blow out to 107% and had cash in dam account for inevitable margin call. Lets not also forget the banks closed down the Storm badged index funds and made clients realise their losses when the market was so low. There are clients suffering that did not even have margin loans. But as per usual ASF puts all stromers in one basket.
Storm and Banks DO have alot to answer and they are both corrupt and negligent in their duties!


----------



## Solly (31 July 2009)

*"Storm confusion surrounds CBA scheme"*

"Clients harbour litigation concerns.
Former clients of Storm Financial wary of CBA's resolution process."

More by Kate Kachor in Investor Daily

http://www.investordaily.com.au/cps/rde/xchg/id/style/7068.htm


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## Farencue (31 July 2009)

Solly said:


> *"Storm confusion surrounds CBA scheme"*
> 
> "Clients harbour litigation concerns.
> Former clients of Storm Financial wary of CBA's resolution process."
> ...





From the article:
"SICAG lodged its submission to the Parliamentary Joint Committee's inquiry into financial services collapses yesterday.

For SICAG, *the key points they wished to highlight were not about the appropriateness of the Storm investment model* but that CBA and Storm were both party to the collapse."


----------



## Smiley (31 July 2009)

I don't know how SICAG committee members can lodge a submission.  Why not just do so in their own names? I know for a fact SICAG members were not surveyed for other than Carey Ramm's (AEC submission).  The committe cannot represent themselves as speaking for the members. Does this seem strange to anyone else?


----------



## Garpal Gumnut (31 July 2009)

Smiley said:


> I don't know how SICAG committee members can lodge a submission.  Why not just do so in their own names? I know for a fact SICAG members were not surveyed for other than Carey Ramm's (AEC submission).  The committe cannot represent themselves as speaking for the members. Does this seem strange to anyone else?




This is exactly the point I have been making over the last 6 months.

How can an organisation,  with a significant percentage of the people on the committee either ex Storm managers or advisers, or relatives of them, represent in submissions to the Inquiry ordinary Storm victims.

It defies belief.

gg


----------



## Farencue (31 July 2009)

Surely SICAG members and the SICAG committee are in complete agreement about the "evil banks" and can be one voice to the inquiry?
As the article says, the submission is not about the inappropriateness of the Storm financial model.....


----------



## Hidden Agendas? (31 July 2009)

Smiley said:


> I don't know how SICAG committee members can lodge a submission.  Why not just do so in their own names? I know for a fact SICAG members were not surveyed for other than Carey Ramm's (AEC submission).  The committe cannot represent themselves as speaking for the members. Does this seem strange to anyone else?




Still Implementing Cassimatis Agenda & Gospel


----------



## bunyip (31 July 2009)

Anastasia said:


> I agree with you in that we knew what our income was (sad as it is), and acknowledge that one day the loan would have to be repaid. And that is where our trust built and we made a very bad "call"..... that is why we believed our investment was so solid. We thought that surely with such huge loans and a dismal income (and we are not "youngsters"), our investments through Storm Financial must be very solid/sound and going to produce favourable enough returns in the future otherwise the banks would not lend to us in the first place. In hindsight it was apparently very foolish to come to this conclusion and place so much trust in the banks.
> Don't get me wrong. I also hold Storm Financial very responsible for our position...neither is an innocent party in this nightmare.






Anastasia

It seems to me that your trust was placed in Storm, more so than in the banks.
It was Storm who let you down. 
The banks safeguarded themselves from massive losses by calling in margin loans once the market starting caving in. You or I would have done the same in their position.
Sure, we can come down on the banks now by saying they should never have lent you the money. But lending is their business. You ask them for money, they'll lend it to you if they believe they can do so with reasonable safety to themselves.
The banks only gave you what you asked for.

Storm were a different matter altogether - they were completely incompetent. 
First, they gave you absolutely terrible advice by recommending that you risk all your assets by borrowing heavily for stock market investment. Such a strategy ensured that you'd be in trouble if the market fell by even a modest percentage.
Second, Storm sat on their hands and did nothing to protect the investments of their clients as the market caved in. Only when it was too late did they wake up and ask clients to sign authorisation for their investments to be converted to cash. Even then, Storm failed to act on those authorisations.

Cassamatis should hang his head in shame. The man is a disgrace. And to top it all off he claims his investment model wasn't flawed and he did nothing wrong.

Can I ask you a quick question here....... 
You were aware your borrowings were very large and your income was small. You knew that your loans were for investment in the stock market via Storm. 
Even if you'd had no previous experience with stocks, you would have heard many times in your life about the risks of the stock market.

Did it not occur to you that stock market investment via Storm or anyone else, using money raised through very large loans against a small income, was highly risky?

Please believe me when I say I'm not trying to rub salt into your wound here. I just fail to see how anyone, even if they were inexperienced investors, could fail to see significant risk in such a strategy.


----------



## Anastasia (31 July 2009)

Just read this report and once again am not surprised to see EC going to ground....
http://www.abc.net.au/news/stories/2009/07/31/2641851.htm?section=business


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## bunyip (31 July 2009)

Garpal Gumnut said:


> This is exactly the point I have been making over the last 6 months.
> 
> How can an organisation,  with a significant percentage of the people on the committee either ex Storm managers or advisers, or relatives of them, represent in submissions to the Inquiry ordinary Storm victims.
> 
> ...




It certainly does defy belief. It's a joke.

Storm victims are being duped.....again.


----------



## pilots (31 July 2009)

bunyip said:


> Anastasia
> 
> It seems to me that your trust was placed in Storm, more so than in the banks.
> It was Storm who let you down.
> ...




Bunyip, this post sum's it up perfect, Storm was a bunch of sales people who  sold this flawed system to ANYONE they could, they was ONLY interested in what commission they could make. The banks have done nothing wrong.


----------



## Julia (31 July 2009)

pilots said:


> The banks have done nothing wrong.



I'm not so sure about that.  Will await the outcome of the enquiry on this aspect.  At the very least, they appear not to have, in some cases, checked on the borrower's capacity to service the loan.


----------



## Anastasia (31 July 2009)

bunyip said:


> Anastasia
> 
> ...
> Can I ask you a quick question here.......
> ...





Yes we were very aware of this huge risk. But we are not recent investors with Storm. We joined back in the 1990's with a max LVR of 40%. During this time we weathered quite a few market dips that to be honest scared the hell out of us. But each time we were assured by Storm (actually called Cassimatis Securities then) that all would be okay....we were in for the long haul, that markets dropped every now and then, but we were in for the long run and all would be okay. And it was....not one margin call ever.

So over the years our trust in the model and Storm grew. It was only in the last couple of years that our LVR started to creep up to 60% but always we were assured that all was okay. And with such a history of trust and all being okay, we overcame our fears and trusted them as was the norm. 

Then they wanted to take another step in July/August last year that would take our LVR up over 70% (cashed in my husbands super). We raised our objections/ concerns about such a high LVR but were assured that the market would very soon correct its downward swing and our LVR would once again drop to more favourable figures.

So once again gullible/naive us trusted them....they had never steered us in the wrong direction before.....we had always recovered from market corrections intact before. 

And for the record we never received a margin call this time or ever. The bank closed down the portfolio, most of the monies raised paying out the margin loan. But in the bank closing down the fund (and our margin loan), they also disposed of our assets that brough in enough income to pay our huge monthly home loan repayments.....and this is our position at the moment. 

This is where we are at......


----------



## Garpal Gumnut (31 July 2009)

bunyip said:


> It certainly does defy belief. It's a joke.
> 
> Storm victims are being duped.....again.




Agree Bunyip.



bunyip said:


> Anastasia
> 
> It seems to me that your trust was placed in Storm, more so than in the banks.
> It was Storm who let you down.
> ...




Agree Bunyip.



pilots said:


> Bunyip, this post sum's it up perfect, Storm was a bunch of sales people who  sold this flawed system to ANYONE they could, they was ONLY interested in what commission they could make. The banks have done nothing wrong.




I don't agree, the banks bear some responsibility, but most of the blame should be sheeted to Storm.



Julia said:


> I'm not so sure about that.  Will await the outcome of the enquiry on this aspect.  At the very least, they appear not to have, in some cases, checked on the borrower's capacity to service the loan.




Agree Julia, the tragedy is that the Poor Stormers may be done over again by the inquiry.

SICAG seem to have the ear of the Inquiry officers.

gg


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## pilots (31 July 2009)

Julia said:


> I'm not so sure about that.  Will await the outcome of the enquiry on this aspect.  At the very least, they appear not to have, in some cases, checked on the borrower's capacity to service the loan.




So Julia who's fault is that? if I ask the bank for one hell of a lot of money, it should be up to me to be able to pay it back, now if I cant do that, then the bank has Evey right to close me down. The banks are no different to a hock shop, if you don't pay the loan back they sell your goods, and thats how it should be.


----------



## Ferret (31 July 2009)

Julia said:


> I'm not so sure about that.  Will await the outcome of the enquiry on this aspect.  *At the very least, they appear not to have, in some cases, checked on the borrower's capacity to service the loan*.




Probably right, but at the risk of sounding very pro-banks, these checks should be to protect the banks and their shareholders.  The checks may provide protection for the borrower against themselves, but this is not the reason for them.  

People have to take responsibility for borrowing money.  The banks shouldn't have to shoulder this responsibility because they are the lenders.


----------



## Pindibog (31 July 2009)

pilots said:


> So Julia who's fault is that? if I ask the bank for one hell of a lot of money, it should be up to me to be able to pay it back, now if I cant do that, then the bank has Evey right to close me down. The banks are no different to a hock shop, if you don't pay the loan back they sell your goods, and thats how it should be.




The banks are a 'party to the offence'. they enabled Storm's flawed model to run. They are just as much to blame.


----------



## Judd (31 July 2009)

Pilots,

From my meager (mis)understanding, quite a number of loans originated from the CBA or BoQ branches in Townsville.  If you have an 'in" to friendly bank staff, system checks and balances can be overridden or ignored.  The head office over 2,000 km away or even the regional manager, may just think, "Gees, they're doing good business.  Hooray for my bonus" without even contemplating why the heck are they doing such good business given the demographics.

The Trust Company, based in Melbourne, had to compensate clients in Townsville to the tune of some $16m because of the activities, over some years, of its Townsville manager.  Similar thing can happen with banks.  So yeah, the CBA has some issues here as Ralph Norris, to his credit, has admitted.

But the initial element for disaster was Storm's model replete with lies and sold as an all dancing, all singing savior to financial woes.  How could any financial planner with even a shred of decency or ethics, entice a disabled person to commute their lifetime indexed pension and invest the lump sum with Storm plus borrow more?  And that ethos permeated the whole structure.

The trouble with conmen is that they are personable, you feel that they are your friend, you trust them and feel comfortable around them and wish to some extent to be like them.  Sadly they do not have the word conman tattooed on their forehead from the day they were born. 

And now the clients of these dastards are going through terrible trauma, in danger of losing their homes and potentially in debt for the rest of their lives.  Positively awful situation.  Losing money hurts.  Losing a lot of money hurts big time.  And you want to lash out at something or someone.  As a result of that, it seems to me some are unable to take a deep breath, step back and ask themselves at what stage did I screw up? 

Anyway, I'll say no more at all on this thread as I have no wish for Storm clients to feel any further angst as a consequence of my thoughts on the issue.


----------



## pilots (31 July 2009)

Pindibog said:


> The banks are a 'party to the offence'. they enabled Storm's flawed model to run. They are just as much to blame.




The banks are not the police for all the wood ducks that get them self in trouble, the banks lend money to ANYONE, it is up to the borrower to pay it back its not the banks job to police this.


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## Garpal Gumnut (31 July 2009)

pilots said:


> The banks are not the police for all the wood ducks that get them self in trouble, the banks lend money to ANYONE, it is up to the borrower to pay it back its not the banks job to police this.




And it is up to so called financial advisers like Storm to keep wood ducks safe from flack from lenders like the banks.

SICAG the wood ducks support group seem unable or unwilling to accept the responsibility of Storm Advisers and Directors in this debacle.

They are more interested in having money spiders and disclaimers about Manny Cassimatis on their site, than exploring the issues facing Storm victims.

gg


----------



## bunyip (31 July 2009)

Not in my wildest imagination would I ever claim the banks are squeaky clean - I dislike them intensely and I'd be very surprised if they're entirely blameless in the Storm debacle.
But the bulk of the blame is with the incompetent and unscrupulous Cassamatis and the unscrupulous salesmen/women who worked for Storm.

Even with all the bad advice and ridiculous levels of gearing, most Storm clients would have been OK if Cassamatis had taken the precaution of moving them to cash well before the market fell so far that their positions were beyond salvation.

It's not as if the market folded overnight as it did in the 1987 crash. This time it went down in a relatively sedate manner. Cassamatis was well aware of what was happening and he had plenty of time to take defensive action on behalf of his clients.
He has no excuses....apart from the lies he's invented.


----------



## Garpal Gumnut (31 July 2009)

bunyip said:


> Not in my wildest imagination would I ever claim the banks are squeaky clean - I dislike them intensely and I'd be very surprised if they're entirely blameless in the Storm debacle.
> But the bulk of the blame is with the incompetent and unscrupulous Cassamatis and the unscrupulous salesmen/women who worked for Storm.
> 
> Even with all the bad advice and ridiculous levels of gearing, most Storm clients would have been OK if Cassamatis had taken the precaution of moving them to cash well before the market fell so far that their positions were beyond salvation.
> ...




Mate , tell that to Moneyspidercentral.

sicag.info

They live in a parallel universe, where Manny is innocent until proven guilty, and the banks are guilty until proven innocent.

This is always a dangerous tactic in law.

gg


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## Steve Borden (31 July 2009)

pilots said:


> The banks are not the police for all the wood ducks that get them self in trouble, the banks lend money to ANYONE, it is up to the borrower to pay it back its not the banks job to police this.




So your premise is that the customer says they earn this much and the Bank accepts it as long as there is enough security to cover the debt? Even for prime, full-doc loans?

Banks have a duty of care to ensure they deal with loan applications diligently and prudently when assessing a client's capacity to repay, that is why they are treated differently to pawn brokers.

It's fair to say that all lenders will write some bad loans over time, if they don't they are not doing their job properly but to write upwards of 1000 (as is the case with the CBA) with the same characteristics points to a failure of systems, policy and perhaps ethics.  

Ralph Norris has acknowledged as much, the BoQ is yet to own up to that reality.


----------



## pilots (31 July 2009)

Steve Borden said:


> So your premise is that the customer says they earn this much and the Bank accepts it as long as there is enough security to cover the debt? Even for prime, full-doc loans?
> 
> Banks have a duty of care to ensure they deal with loan applications diligently and prudently when assessing a client's capacity to repay, that is why they are treated differently to pawn brokers.
> 
> ...




The banks went on the paper work that was given to them, if that paper work was wrong, is that the banks fault???. Now what you should be going after is the ones who handed in that paper work that was so wrong. I don't blame the banks or storm, I blame the sales people, and the wood ducks that was to thick to see it coming.


----------



## Steve Borden (31 July 2009)

pilots said:


> The banks went on the paper work that was given to them, if that paper work was wrong, is that the banks fault???. Now what you should be going after is the ones who handed in that paper work that was so wrong. I don't blame the banks or storm, I blame the sales people, and the wood ducks that was to thick to see it coming.




So you don't blame Storm now?

In the main for parties not employed the Banks used their own figures to come up with an income figure, the CBA mostly used Investment - Margin Loan x between 5 - 8% or the deeming rate. Sometimes they did Investment x 5 - 8% - Margin loan x 8%. Don't know how BoQ came up with their figures but the terms plucked, rear and end are involved.

The core problem with the loans was that the clien'ts did not provide the figures the Bank used, Storm and the Bank came up with an arbitrary figure that did not and has never had a basis in fact. 

Should the clients of Storm trusted Storm, the salespeople or the Banks, clearly not. Do all parties share blame, of course but to suggest the Bank's are faultless is a nonsense and not supported by the ample facts.


----------



## Julia (31 July 2009)

pilots said:


> So Julia who's fault is that? if I ask the bank for one hell of a lot of money, it should be up to me to be able to pay it back, now if I cant do that, then the bank has Evey right to close me down. The banks are no different to a hock shop, if you don't pay the loan back they sell your goods, and thats how it should be.






Ferret said:


> Probably right, but at the risk of sounding very pro-banks, these checks should be to protect the banks and their shareholders.  The checks may provide protection for the borrower against themselves, but this is not the reason for them.
> 
> People have to take responsibility for borrowing money.  The banks shouldn't have to shoulder this responsibility because they are the lenders.




The point Ferret has made is what I had in mind.  It seems unusual to me that several Stormers had loans from banks not in their own area, despite a branch of the same bank existing there.   It's in the banks' interests to ensure the documentation offered to them is correct.   Hardly a major job to have some clerk contact the client and confirm.

In no way at all am I condoning anyone not taking responsibility for the amount they borrow.




Pindibog said:


> The banks are a 'party to the offence'. they enabled Storm's flawed model to run. They are just as much to blame.



No, they are not.   It is not the responsibility of the banks to supervise financial advice from a private company.





Steve Borden said:


> So your premise is that the customer says they earn this much and the Bank accepts it as long as there is enough security to cover the debt? Even for prime, full-doc loans?
> 
> Banks have a duty of care to ensure they deal with loan applications diligently and prudently when assessing a client's capacity to repay, that is why they are treated differently to pawn brokers.
> 
> ...



Exactly.   I just don't believe any of us are really in a position to make categorical assertions about the culpability of the banks until more information is made public.


----------



## Ironhalo (31 July 2009)

Julia said:


> Exactly.   I just don't believe any of us are really in a position to make categorical assertions about the culpability of the banks until more information is made public.




As much as I blame Storm for the majority of my family member's woes, the fact that the CBA has just offered my mother a six-figure sum to 'not sue' is a pretty clear indication that they are in some way culpable. My mother just got her loan documents back from CBA (after much reluctance from teh bank), and they have whole sections 'nikko-ed' out in thick black ink for no apparent reason. The thing is, my mother didn't have loans even approaching the level of gearing that some people had, so one can only wonder what sort of fictitious info is on some of their paperwork. Who put in the false figures we wonder? Storm? The CBA trying to validate their own lending?

So while Storm and the individuals are to blame, the banks aren't squeaky clean either. And if I was a shareholder in CBA/BoQ, I would be livid. 

I just don't buy the SICAG line that the banks are 100% guilty, I think it's more like 50-50%, not taking into account people that should have known better.


----------



## Garpal Gumnut (31 July 2009)

I guess some people will be doing time for all these shenanigans.

One can only guess at the sentences. I came across this article tonight on a scam that defrauded many older unsophisticated investors.

http://www.news.com.au/story/0,27574,25862889-29277,00.html




> Robert Ewen Day, 65, will be one of Victoria's oldest prisoners after being jailed on Friday for 11 years over the eight-year fraud.
> 
> The deception took place between 1996 and 2004 while Day operated Grove Conveyancing Services, which had offices in Geelong and Werribee.
> 
> ...




gg


----------



## Solly (31 July 2009)

Another thirteen submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub179.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub193.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub195.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub198.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub199.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub200.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub202.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub203.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub204.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub207.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub210.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub211.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub227.pdf


----------



## Solly (31 July 2009)

*"The parliamentary inquiry into the collapse of Storm Financial may be forced to subpoena the Townsville-based company's founder, Emmanuel Cassimatis."*

Inquiry chairman Bernie Ripoll says;

"I must say I am disappointed that Emmanuel Cassimatis has decided not to put in a submission or, in his words, postpone a submission because there's a current inquiry going on through ASIC."

As Anastasia linked before from the ABC;

http://www.abc.net.au/news/stories/2009/07/31/2641851.htm?site=northqld


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## Garpal Gumnut (31 July 2009)

Solly said:


> *"The parliamentary inquiry into the collapse of Storm Financial may be forced to subpoena the Townsville-based company's founder, Emmanuel Cassimatis."*
> 
> Inquiry chairman Bernie Ripoll says;
> 
> ...




Good old Bernie, this does make me feel that in spite of Moneyspidercentral, the Inquiry will delve deep and surgically into the corpse of Storm Financial.

gg


----------



## Anastasia (31 July 2009)

Am I the only one that finds this incredible/unbelievable considering what all that is presently happening. http://www.brokernews.com.au/contents/news/new-industry-role-for-boqs-liddy/36208

_The head of the Commonwealth Bank and chairman of the ABA (Australian Banking Association) Ralph Norris welcomes the appointment of David Liddy (head of the Bank of Queensland) as deputy chairman of the ABA who will have an important role in the industry discussions on regulation._


----------



## Julia (31 July 2009)

Thanks for further links to submissions, Solly.  There is undoubtedly the same theme running through all of these which makes it clear Storm had just the one model for everyone and no plan for a market downturn.

I'm still blown away by the level of borrowing by some of the clients.


----------



## Garpal Gumnut (31 July 2009)

Julia said:


> Thanks for further links to submissions, Solly.  There is undoubtedly the same theme running through all of these which makes it clear Storm had just the one model for everyone and no plan for a market downturn.
> 
> I'm still blown away by the level of borrowing by some of the clients.




Agree Julia, it is amazing.

I still cannot understand how Moneyspidercentral are going so easy on Storm and Manny.

gg


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## chrisgee (1 August 2009)

theres a lot to read again this week-i tried to read the submissions the stories are all too familar-gee mr c may be forced to front the enquiry that will be good to see- i wonder what gems we will hear from him- i see mr gg thinks that some people may end up in the big house-yes that would be good if theres been any criminal stuff going on -if they are guilty i hope they end up doin time and end up locked up with a cosy big hairy boyfriend for a few years-that will sort them out- i hope there is a light at the end of the tunnell soon-i know i cant comment on things and offers being made but i really hope everybody at least gets there house back-everybody joined this mob hoping that it would make things easier and better for themselves and families when you dont know much about money stuff- youd reckon you could trust the banks and finance people who say they can help you out. the big lesson out of all of this is not to trust any bugger in anything until you understand it yourself- books librarys and the net are easy cheap ways to learn a lot-and when you need help start asking bloody questions and dont stop until you are happy with the answers-it saves a lot of pain-end of my rant!


----------



## Solly (1 August 2009)

chrisgee said:


> theres a lot to read again this week-i tried to read the submissions the stories are all too familar-gee mr c may be forced to front the enquiry that will be good to see- i wonder what gems we will hear from him- i see mr gg thinks that some people may end up in the big house-yes that would be good if theres been any criminal stuff going on -if they are guilty i hope they end up doin time and end up locked up with a cosy big hairy boyfriend for a few years-that will sort them out- i hope there is a light at the end of the tunnell soon-i know i cant comment on things and offers being made but i really hope everybody at least gets there house back-everybody joined this mob hoping that it would make things easier and better for themselves and families when you dont know much about money stuff- youd reckon you could trust the banks and finance people who say they can help you out. the big lesson out of all of this is not to trust any bugger in anything until you understand it yourself- books librarys and the net are easy cheap ways to learn a lot-and when you need help start asking bloody questions and dont stop until you are happy with the answers-it saves a lot of pain-end of my rant!




chrisgee, keep questioning everything, never sign up to anything you don't fully understand. I hope you get your house back but you may get even more. A determination under Section 50 of the ASIC Act may even be considered. 

It's a rough time for Stormers, I again had a lunchtime chat with one. It's not pleasant to hear the anguish, to see the stress and observe the pain. For Stormers there is no magic wand, no miracle elixir but never give up in seeking a remedy to your situation. 

Dig in, stand firm and take whatever action it takes to better your predicament. Never fold, give in or accept an outcome that is less than what you deserve.


----------



## Garpal Gumnut (1 August 2009)

chrisgee said:


> theres a lot to read again this week-i tried to read the submissions the stories are all too familar-gee mr c may be forced to front the enquiry that will be good to see- i wonder what gems we will hear from him- i see mr gg thinks that some people may end up in the big house-yes that would be good if theres been any criminal stuff going on -if they are guilty i hope they end up doin time and end up locked up with a cosy big hairy boyfriend for a few years-that will sort them out- i hope there is a light at the end of the tunnell soon-i know i cant comment on things and offers being made but i really hope everybody at least gets there house back-everybody joined this mob hoping that it would make things easier and better for themselves and families when you dont know much about money stuff- youd reckon you could trust the banks and finance people who say they can help you out. the big lesson out of all of this is not to trust any bugger in anything until you understand it yourself- books librarys and the net are easy cheap ways to learn a lot-and when you need help start asking bloody questions and dont stop until you are happy with the answers-it saves a lot of pain-end of my rant!






Solly said:


> chrisgee, keep questioning everything, never sign up to anything you don't fully understand. I hope you get your house back but you may get even more. A determination under Section 50 of the ASIC Act may even be considered.
> 
> It's a rough time for Stormers, I again had a lunchtime chat with one. It's not pleasant to hear the anguish, to see the stress and observe the pain. For Stormers there is no magic wand, no miracle elixir but never give up in seeking a remedy to your situation.
> 
> Dig in, stand firm and take whatever action it takes to better your predicament. Never fold, give in or accept an outcome that is less than what you deserve.




I'd agree with Solly, chrisgee.

Hang in there mate. Most folk at ASF were waiting for this to happen ( to some Financial Advice mob ) and we will back you with advice and support in your fight against Storm and the Banks.

gg


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## Monario (3 August 2009)

Trevor_S said:


> Indeed but the entire reason you go to School/Uni is to get an education, to go on to get a job.  The main reason you get a job is to earn money.  You then spend you whole life working to earn money.  I would expect EVERYONE to want to spend a modicum amount of time understanding something they invest 50+ years of their life working towards ie earning money.  I can't know everything but that's why I never bothered to learn how to lay a concrete slab, or work a chainsaw, or weld, or fix a car.  I didn't spend my entire life working towards having one.  If the Car craps itself, I will catch a taxi or ride a pushbike, inconvenient but no big deal.  Some smooth talker cons me out of all my money through self imposed naivety, it's much more then an inconvenience.  I am sure I fall in about the middle of the IQ bell curve, so you don't need to be the sharpest tool in the shed to work that out.




Perhaps we should be teaching more on the subject of money in school then? I wonder why such little practicle knoweldge of it is given in the school years, that is without taking it as an elective!!! perhaps economics should be core over sports?


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## Monario (3 August 2009)

As time goes by on this thread, I realise that the majority of posters, are Ill informed, and instead of feeling anger towards the comments made by some un-sympathetic fools, I now take a laugh at how ignorrant they are!!!!

For those people here is some more info on the great banks that you support, to tear apart and tell me how stupid we were to invest in this manner!!

Colonial, run by CBA closed/sold out several cash investments made when the market was up, at  the bottom of the market, these investments had neither margin or mortgage attached.. And these investments were large sums... 

So than, why would a Bank close out these cash investments, when the owners were happy to leave them sit a grow over time? BECAUSE THE BANKS had there heads so far up there own A@#'s they had no idea what was going on with storm investors!!!!

I dont think you will find one storm investor that lays blame soley on the banks, and takes none themselves, but what you will find all of them want, is some others, i.e. the Banks to stand up and say, Sorry we screwed up too!!!

Monza!!!!


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## Solly (3 August 2009)

*"Questions raised over Storm inquiry"*

"The establishment of yet another inquiry into the Storm Financial collapse has left many wondering if it will be money well spent."

More by Kate Kachor in Investor Daily is here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7081.htm


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## Ironhalo (3 August 2009)

Monario, what side of the fence are you on? You are calling the majority of the people in this forum 'ignorant and ill-informed', yet the majority of the people in this forum simply refuse to believe the bullcrap that SICAG are peddling in regards to it being solely the banks fault.

I don't know how I can say it any clearer, but STORM (and therefore  EMMANUEL CASSIMATIS) himself failed to take action to sell Storm investors down when they told him to. The banks were just as bad noting that they didn't ring their own clients to tell them they were approaching a situation that they wouldn't recover from unless they took action.

I spent the weekend with my brother who has his finger on the pulse on what was transpiring at Storm in Redcliffe, QLD, as he knows a lot of the local identities in question up there having been a previous client of Jelich Jones. Turns out one of his own school chums worked for Storm and he saw him the other day at the local shops. My brother gave it to him with both barrels, and asked why no one got sold down when their LVR's were spiralling to 80%, then 90% and finally > 100%. 

You know what this guy said? He told my brother that they had specific orders directly from Manny in Townsville to not sell ANYONE down under ANY circumstances. Basically because, 1. if the sold people down even for a few months, Storm would lose their cash flow and 2. Manny arrogantly believed he could talk sense into the banks. Sadly, it's an example of another Storm employee who knew what they were doing was wrong, but were happy to shut their mouths and keep accepting the money and benefits that they were feeding from at Manny's table.

Manny's neglect (and the people that worked for him) have resulted in the 1000's of families devastated by this crisis. At your next SICAG circle-jerk, I suggest you bring that little nugget of information up to one of the myriad of ex-employees/wolves in sheeps clothing having a sausage and beer in the corner and see what they say.


----------



## carey ramm (3 August 2009)

*Attention All CBA Townsville Storm Clients*

Slater and Gordon are working out of the Townsville offices of AEC Group at 233 Flinders St East and have lawyers on the ground this week to meet with CBA clients as part of the resolution process for Storm clients. If there are any Storm clients out there in NQ who dont understand this process or not registered with Slaters this is a good opportunity to come in and have a chat and discuss their options.

Can u please circulate this info.


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## DocK (3 August 2009)

Ironhalo said:


> ....asked why no one got sold down when their LVR's were spiralling to 80%, then 90% and finally > 100%.
> 
> You know what this guy said? He told my brother that they had specific orders directly from Manny in Townsville to not sell ANYONE down under ANY circumstances. Basically because, 1. if the sold people down even for a few months, Storm would lose their cash flow and 2. Manny arrogantly believed he could talk sense into the banks...




I hope your brother will be passing this information on to ASIC, Senate Enquiry etc as it is precisely the type of information that *must* come to light.  So much angst is being suffered by people who just can't understand why their instructions to sell weren't acted upon.  Cassimatis blames the banks, the banks blame Storm.  The clients are the ones who deserve to know the plain unadulterated truth of the matter, and I hope this particular ex-Storm employee and others will *honestly* answer the question that has been asked so often in submissions - why weren't instructions to sell acted upon - imo because the Cassimatis ego is obviously so huge they thought they could dictate to the banks and have them carry a multitude of clients in margin call until some undetermined time in the future, with no security, purely because Manny & Julie didn't want to lose their "cash cows", and were willing to guarantee that everything would be OK in the long run - because Manny said so!


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## Garpal Gumnut (3 August 2009)

I see that Moneyspidercentral now have a quote from Thomas Jefferson on their front page, pushing their disclaimer about the Cassimatises even further down the page.

The disclaimer should be at the top, as Storm put the victims into the hands of the banks in the first place.

It was good ole American can do claptrap and "truisms" that got the poor Storm victims into this mess in the first place.

Next MSC will have Seven Habits for Highly Successful Nuns ripped off by Storm in the header.

Perhaps Seven Nuns would be a good logo for MSC.

gg


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## Ironhalo (3 August 2009)

This is getting out of hand. 

SICAG now attribute the Banks with the 'fall of mankind?'. Funny, a lot of the SICAG members who were formally Storm employees seemed to have no dramas with banks when they were riding the crest of their margin lending fortunes back in early 08! 

It is fair to say that SICAG has now completely revealed their true bias, their true intentions, and their true existing relationship with the Cassimatises.


----------



## Hidden Agendas? (3 August 2009)

Solly said:


> *"Questions raised over Storm inquiry"*
> 
> "The establishment of yet another inquiry into the Storm Financial collapse has left many wondering if it will be money well spent."




Does anyone think it odd that SICAG is advocating that the liquidators not hold a public enquiry into Storm?

The only people who have anything to hide from the liquidators are the Directors and senior staff of Storm. This is an investigation in the circumstances behind the collapse of Storm and any insolvent trading or preferrential creditor payments. 

Is this just another example of looking after special friends?


----------



## Ironhalo (3 August 2009)

Hidden Agendas....got it in one buddy.


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## Big Max (3 August 2009)

Ironhalo said:


> Nice detective work GG.
> 
> Like Ron Jelich, these Redcliffe based Storm employees somehow now suddenly feel outraged that their clients (whom had they been doing their job properly wouldn't have let them get themselves into this level of risk) have been dealt the hand of 'injustice' from the banks.
> 
> ...




Luke Vogel is not the media spokesman for SICAG. He built and maintains the website and is on the SICAG committee.


----------



## Big Max (3 August 2009)

Garpal Gumnut said:


> There is more to come out about SICAG.
> 
> Keep reading ASF all you Storm victims for independent, financial adviser free, information on the true rogues in the wipeout of your savings.
> 
> ...




GG and other critics:
While I generally peruse the posts on ASF with a mix of bemusement and a raised eyebrow, the sweeping criticisms of the bona fides of the members of the SICAG committee cannot go unchallenged. I am NOT a former Storm investor; I act as SICAG's media adviser and have attended every meeting of the group since its formation in January this year. The fact (never denied or concealed) that some of the committee guys have links - direct and indirect - to Storm Financial and EC/JC - should not detract from the commendable job they have done and continue to do for their distressed members. This is an open invitation to come along to the next meeting of SICAG and judge for yourself from ground level rather than from the ivory tower of anonymous ignorance. What can I say about those who happily benefit from SICAG's campaign but snootily refuse to hand over $50 to help the cause because of some perceived moral stance? It leaves me speechless...


----------



## Smiley (3 August 2009)

Your point is what Big Max - re Luke Vogel?
The quote from Jefferson also bother me . . .as does the disclaimer. . . who cares if we did not pay until we signed up . . . we then paid for lousy advice and paid too much and will continue paying for the rest of our lives. . . .SICAG could be much more up front about all of this. . . .
And did you read Luke's submission? Why no mention of his advisers and their actions? 
I appreciate the efforts of the SICAG founders and their intentions but there is a problem when they do not distance themselves more from Storm and the processs we under went in being stormified.


----------



## Monario (3 August 2009)

Ironhalo said:


> Monario, what side of the fence are you on? You are calling the majority of the people in this forum 'ignorant and ill-informed', yet the majority of the people in this forum simply refuse to believe the bullcrap that SICAG are peddling in regards to it being solely the banks fault.
> 
> I don't know how I can say it any clearer, but STORM (and therefore  EMMANUEL CASSIMATIS) himself failed to take action to sell Storm investors down when they told him to. The banks were just as bad noting that they didn't ring their own clients to tell them they were approaching a situation that they wouldn't recover from unless they took action.
> 
> ...




The side of the fence I sit on.

1) Ex storm investor

2) Have been to a sicag meeting, and although I follow there progress, do not have anything to do with them directly, nor support there ideas 100%.

3) Have fought my own battles directly with the banks, Margin lenders, Storm.

4) Know in person dozens of ex. storm investors and there stories

5) Am of the belief the majority of people on here that poo poo what stormers are trying to achieve, have no direct contact with any ex stormers, and have developed there oinions on assumptions and what is written in the press rather than going out to find out the real truths of this utterly disgusting F%^k up!!!

I hope that clears it up for you a bit where I stand Ironhalo, whilst I dont think everyone here is in the same bost there seem to be quite a few who dont know a thing about what they a commenting on!!!


----------



## Big Max (3 August 2009)

Farencue said:


> Ironhalo, I believe the stormified will have no choice but to see the truth once September rolls around.
> The SICAG bluff will be revealed for what it is.
> Kinda reminds me of when Clinton said he "did not have sexual relations with that woman" although the truth was outed eventually.
> 
> ...




Farencue, tell me about the SICAG bluff.


----------



## Big Max (3 August 2009)

Anastasia said:


> I will totally ignore your condesending attitude and not give it the attention you are seeking...I just hope you feel a lot bigger for saying it and that it was worth putting me down.
> 
> If you read what I said in my earlier post, I do hold Storm very accountable for giving me the bad advise, and I cannot believe now how gullible we were but..... I believe that if the banks realized that there is every likely hood this investment will go pear shaped, that their clients would have absolutely no way of repaying the loans, then it was their duty of care not to give us the loans. When they did however keep increasing our loans over the years, it reinforced in us the belief that Storm must be giving us the right advice.
> 
> ...




Anastasia. Be patient. You will get used to the kneejerk nature of debate on this site, generally based on a superficial knowledge of what is happening in the REAL world vis a vis the E-world, a world that is inhabited by all sorts of strange bedfellows. Stay calm and try not to take the baits.


----------



## Big Max (3 August 2009)

Trevor_S said:


> Blame ?  IMO
> 1) 70% "the investor",
> 2) 26% Storm,
> 3) 4% the banks.
> ...


----------



## Ironhalo (3 August 2009)

Monario: Thanks for your post mate, I know you're hurting re: the Storm mess. In terms of myself, I also got stung by Storm/CBA to the tune of 12k (thank god I only got in 'early') and on top of that my brother lost over 30k, my sister 25k, and my mother 230k. They invested via the Redcliffe branch (previously Jelich-Jones), and I did it via the North Sydney branch, so my personal experience with the negligence of Storm and the CBA spans two states. My best mate also invested in Townsville and he as we speak is dodging bullets in Afghanistan trying to earn some money to pull himself out of financial devastation.

I have always maintained that SICAG have been a good morale-boosting crutch for a lot of people, but there is a rather concerning ulterior motive which is becoming abundantly more blatant as we start reaching the business end of the ASIC investigations.

Big Max: Sorry if I got you confused with Luke, my bad, and I will apologise unreservedly. The fact of the matter is though, is that Luke Vogel is a committee member, and it has since come out that he was a self-confessed ex-advisor in the Redcliffe branch. And therein lies the rub. 

The fact that there are ex-Storm employees who were complicit in getting people into these situations (completely bereft of any financial advice that could be considered professional) is a disgusting hypocrisy.

Weir is now stating vehemently that he sees a seperate inquiry by Worrell's to be a 'waste of time.' Wait on, I thought that the whole idea was 'to get to the bottom of this mess?' Here's a quote from the SICAG website:

*In order to be successful, our campaign needs to muster as much support as possible from every sector of the community including:
· Government
· Industry     <---- As long as you don't drag up our ex-Storm SICAG committee members eh?
· General Public
· Anyone who already has a grievance against the banks, finance industry, regulators, or any other related party....*

Thanks for the kind offer to join SICAG, but you can kindly stick your $50 where it proverbials. Storm has taken enough money from my family without having to pay a bunch of Manny sycophants and ex-employees more to divert all blame from Storm/Manny and onto the banks.

Until SICAG admits publicly that the blame must be shared between the Cassmatis's, the employees who sat back and did nothing (and forged loan docs) AND the banks, then we on this forum will continue to poke our finger at your motives.


----------



## Ironhalo (3 August 2009)

Big Max said:


> Blame ?  IMO
> 1) 70% "the investor",
> 2) 26% Storm,
> 3) 4% the banks....
> ...




Last I checked, Manny was still living in a palatial mansion in Belmont, no?


----------



## Big Max (3 August 2009)

Pindibog said:


> How is it the clients fault that did not mortgage a house to invest?
> Had been using the ML facility moderately for over 13yrs. Never received margin call. Let blow out to 107% and had cash in dam account for inevitable margin call. Lets not also forget the banks closed down the Storm badged index funds and made clients realise their losses when the market was so low. There are clients suffering that did not even have margin loans. But as per usual ASF puts all stromers in one basket.
> Storm and Banks DO have alot to answer and they are both corrupt and negligent in their duties!




Well said Pindibog. Nice to hear a voice of reason.


----------



## Big Max (3 August 2009)

Smiley said:


> I don't know how SICAG committee members can lodge a submission.  Why not just do so in their own names? I know for a fact SICAG members were not surveyed for other than Carey Ramm's (AEC submission).  The committe cannot represent themselves as speaking for the members. Does this seem strange to anyone else?




For the record, SICAG's membership survey was initiated and commissioned by SICAG. Carey agreed to a request from me and John McLennan several months ago to assist with the collation of SICAG's submission. The request was made because of Carey's expertise in dealing with submissions of this nature and his company's considerable computer grunt - weapons that SICAG did not possess. AEC assisted SICAG in setting the questions and crunched the replies. SICAG notes that Carey  elected to use the SICAG survey in his own submission. The information will also appear in SICAG's submission which should be on the web this week. SICAG and AEC have been working together for some time to assist former Storm investors.


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## Garpal Gumnut (3 August 2009)

Big Max said:


> For the record, SICAG's membership survey was initiated and commissioned by SICAG. Carey agreed to a request from me and John McLennan several months ago to assist with the collation of SICAG's submission. The request was made because of Carey's expertise in dealing with submissions of this nature and his company's considerable computer grunt - weapons that SICAG did not possess. AEC assisted SICAG in setting the questions and crunched the replies. SICAG notes that Carey  elected to use the SICAG survey in his own submission. The information will also appear in SICAG's submission which should be on the web this week. SICAG and AEC have been working together for some time to assist former Storm investors.




Max mate,

Its all about appearances and perceptions.

If so many ex Storm advisers, Manny friends and their families are controlling SICAG, then the assumption is that the SICAG submission will be skewed to exonerate Storm, Manny and his acolytes.

Its not brain science mate.

gg


----------



## Big Max (3 August 2009)

pilots said:


> Bunyip, this post sum's it up perfect, Storm was a bunch of sales people who  sold this flawed system to ANYONE they could, they was ONLY interested in what commission they could make. The banks have done nothing wrong.




pilots, get your head out of the clouds. How could you justify a bank lending $1million to a 70-year-old illiterate German migrant who was on a $30K-a-year pension? Wait till you see the hundreds of dodgy loan applications that were sexed up to get loans over the line - ASIC will tell us who was responsible for this creativity. What about the CBA's desktop property valuation software that trawled through CBA/Storm client databases looking for assets that could be valued upwards, sight unseen!!! There is a tonne of evidence that Storm and CBA were joined at the hip in shovelling loan money out to Storm clients  who were either naive, blinkered, greedy or a combination of all three.


----------



## bunyip (3 August 2009)

Big Max said:


> GG and other critics:
> 
> The fact (never denied or concealed) that some of the committee guys have links - direct and indirect - to Storm Financial and EC/JC - should not detract from the commendable job they have done and continue to do for their distressed members. This is an open invitation to come along to the next meeting of SICAG and judge for yourself from ground level rather than from the ivory tower of anonymous ignorance. What can I say about those who happily benefit from SICAG's campaign but snootily refuse to hand over $50 to help the cause because of some perceived moral stance? It leaves me speechless...




Some of the SICAG committee is comprised of former Storm salesmen, pals of EC, and relatives of former Storm salesmen. 

It's understandable that some Storm victims refuse to join SICAG because they see the obvious conflict of interest in having these people on the SICAG committee.


----------



## Sunder (3 August 2009)

Big Max said:


> pilots, get your head out of the clouds. How could you justify a bank lending $1million to a 70-year-old illiterate German migrant who was on a $30K-a-year pension? Wait till you see the hundreds of dodgy loan applications that were sexed up to get loans over the line - ASIC will tell us who was responsible for this creativity.




I think that last bit will be the most interesting outcome. If it wasn't CBA, regardless who it was - Storm or the investor, then I hardly think the bank is at fault, except as victim of their own lack of due diligence. 

It reminds me of all the "Why did the bank let me borrow so much?" questions that was being asked on www.news.com.au when interest rates hit 9%. The bank does not, and in my opinion, should not care about the serviceability of an *investment* loan, as long as the underlying security has a high likelihood of covering debt in the case of default.


----------



## Big Max (3 August 2009)

Monario said:


> As time goes by on this thread, I realise that the majority of posters, are Ill informed, and instead of feeling anger towards the comments made by some un-sympathetic fools, I now take a laugh at how ignorrant they are!!!!
> 
> Ironhalo, you make Monario look like one of the Three Wise Men. Smell the coffee . . . the decision by CBA (and soon the BoQ and other banks) to cut deals with Storm victims would never have happened without SICAG's concerted seven-month campaign, Slater & Gordon's significant legal muscle and Carey Ramm's powerful input. SICAG is not perfect and is an easy target for the ignorenti, but as I said once before on ASF, history will be kind to this people power movement.


----------



## Ironhalo (3 August 2009)

Big Max....

Whether history is kind to SICAG remains to be seen, once the ASIC/Worrell's inquiry starts throwing names around. I don't know if you have been reading my posts, but I fully ENDORSE and APPLAUD the support SICAG have given to the mum and dad investors in terms of people to talk to etc etc...

What I categorically abhor is the fact that ex-Storm employees and pals of EC are on the committee, and are blocking any outcry against Storm. Trust me mate, Colonial Lending sold me down when I wasn't in margin call without notification (making someone in the bank a nice profit), so I am out for the bank's blood as much as the next man and SICAG member.

But the fact remains, is that Storm (and its SICAG flag waving ex-employees) were undeniably complicit in this treachery. I have no doubt in my mind who was 'filling in the blanks' on clients loan docs and I suspect it was Storm. 

The amount of people who were told at their Storm meetings 'oh just leave that blank, we'll fill it out for you' seems to be a little too dodgy if you ask me. My adviser even noticably got cranky when my g/f and I filled out everything on our initial loan doc (with initials beside it), as if we'd taken away his ability to earn a commission or something. It was quite odd, and I for one should have seen it as a warning sign.

Notwithstanding your attempts to discredit my theory that Manny ordered his staff not to sell anyone down when they should have, I got it from the direct mouth of a Storm employee who was there when the crap hit the fan, and BOTH Storm and the CBA sat on their hands and did nothing.

And as for terming people on this forum 'ignorant', maybe your superiors on the SICAG committee might like to remind Manny at their next campfire singalong that my family (and the people you decry on this forum) that his inaction and greed cost us collective millions. 

Until I see SICAG admit that the banks AND Storm/Manny & Julie were to blame, we'll continue drawing our own conclusions as to where SICAG's true loyalties lie. My mother got a six-figure sum from the CBA as a result of the pressure by Slater and Gordon and all involved. Well done there.

What I want to know is, when will SICAG seek justice on the Cassimatis', financial or otherwise?


----------



## Solly (3 August 2009)

*"Storm inquiry attracts late submissions rush"*

"A rush of last minute submissions to the parliamentary inquiry into the collapse of Storm Financial has left committee staff struggling to sort through all the documents."

More by Murray Cornish from the ABC;

http://www.abc.net.au/news/stories/2009/08/03/2643921.htm


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## Garpal Gumnut (3 August 2009)

Ironhalo said:


> Big Max....
> 
> That remains to be seen. I don't know if you have been reading my posts, but I fully ENDORSE and APPLAUD the support SICAG have given to the mum and dad investors in terms of people to talk to etc etc...
> 
> ...




And Max, mate, if what Ironhalo says , can be proven in court, then Moneyspidercentral's gambit of not exposing Manny, of not getting more submissions criticising the "Storm Model" , will backfire, and  may give the banks an out.

The poor Storm victims are the ones who will suffer.

gg


----------



## bunyip (3 August 2009)

Big Max said:


> Monario said:
> 
> 
> > As time goes by on this thread, I realise that the majority of posters, are Ill informed, and instead of feeling anger towards the comments made by some un-sympathetic fools, I now take a laugh at how ignorrant they are!!!!
> ...


----------



## Garpal Gumnut (3 August 2009)

Monario said:


> As time goes by on this thread, I realise that the majority of posters, are Ill informed, and instead of feeling anger towards the comments made by some un-sympathetic fools, I now take a laugh at how ignorrant they are!!!!
> 
> I dont think you will find one storm investor that lays blame soley on the banks, and takes none themselves, but what you will find all of them want, is some others, i.e. the Banks to stand up and say, Sorry we screwed up too!!!
> 
> Monza!!!!




Monario, 

I do hate putting the boot into people who are suffering but I will make an exception with you.

Most posters on this thread and on asf in general are well informed. They also weren't wiped out by a shonky financial Advisor who charged upfront fees of 7%.

If you think any institution with deep pockets is going to stand up and say "we screwed up", then you really are living in la la land. 

the banks will parley and use all legal means to minimise their losses in this. and so they should. Blind Freddie could see that. They are not charities.

The court room is the place for litigation.

The confessional for heartfelt pleas for forgiveness.

ASF is neither of those. It is a forum for folk who have lost and won, who when they lose don't blame others, but learn from it and dust themselves off and get into the game again.

gg


----------



## Farencue (3 August 2009)

Gosh Big Max, who on earth could have possibly "sexed up" the loan docs?
Surely the evil banks didnt do "hundreds"? You dont think anyone from Storm may have had a hand in this "sexing up"?  
"Sexing up" really is an interesting choice of words by the way to describe the word falsifying.

Speaking of words, Monario - you really need to learn how to spell the word ignorant lest you are thought of as ignorant yourself.


----------



## Monario (3 August 2009)

Ironhalo said:


> I spent the weekend with my brother who has his finger on the pulse on what was transpiring at Storm in Redcliffe, QLD, as he knows a lot of the local identities in question up there having been a previous client of Jelich Jones. Turns out one of his own school chums worked for Storm and he saw him the other day at the local shops. My brother gave it to him with both barrels, and asked why no one got sold down when their LVR's were spiralling to 80%, then 90% and finally > 100%.
> 
> You know what this guy said? He told my brother that they had specific orders directly from Manny in Townsville to not sell ANYONE down under ANY circumstances. Basically because, 1. if the sold people down even for a few months, Storm would lose their cash flow and 2. Manny arrogantly believed he could talk sense into the banks. Sadly, it's an example of another Storm employee who knew what they were doing was wrong, but were happy to shut their mouths and keep accepting the money and benefits that they were feeding from at Manny's table.
> 
> ...


----------



## Ironhalo (3 August 2009)

Which is exactly why SICAG don't want any more 'inquiries' cropping up.


----------



## Garpal Gumnut (3 August 2009)

Ironhalo said:


> Which is exactly why SICAG don't want any more 'inquiries' cropping up.




Exactly, Dr Watson.

gg


----------



## Monario (3 August 2009)

Garpal Gumnut said:


> Monario,
> 
> I do hate putting the boot into people who are suffering but I will make an exception with you.
> 
> ...




GG, I appreciate your comments, and as I have stated I have learnt from my mistakes, the biggest lesson is I can run my own investments with minimal overheads, 100% control over my money, and more effeciency than a FA.  however answer me this...

If an individual makes a mistake when dealing with a bank, and inturn owes the bank money, or defaults on a loan.. There are penalties payable!!!

Why then when a bank makes a mistake should we QUOTE when they lose don't blame others, but learn from it and dust themselves off and get into the game again..

I am after the same justice the banks would seek.... 

I wish to only recoup the losses the banks incurred me, I do not want compensation for a bad investment choice...


----------



## Garpal Gumnut (3 August 2009)

Monario said:


> GG, I appreciate your comments, and as I have stated I have learnt from my mistakes, the biggest lesson is I can run my own investments with minimal overheads, 100% control over my money, and more effeciency than a FA.  however answer me this...
> 
> If an individual makes a mistake when dealing with a bank, and inturn owes the bank money, or defaults on a loan.. There are penalties payable!!!
> 
> ...




Fair call mate.

Litigate the banks.

gg


----------



## doctorj (3 August 2009)

Folks, please remember to keep one eye on the ASF T&C and codes of conduct when making posts.

I know there are posters to this thread that have lost a lot of money and emotions are high, but this thread can only go on as long as Joe is satisfied people will continue to behave appropriately.


----------



## carey ramm (4 August 2009)

I for one welcome the Worrells investigation and believe it is money well spent by ASIC. In making this point i believe SICAG's Mark Weir (referring to his media comments) does not fully understand how the Worrells action fits in.

Why? Firstly the Worrells action will provide a forensic investigation into how storm operated and will no doubt focus on the last year and what went wrong especially the issues of margin calls, the large ex gratia dividend payment and the role of directors in the last 3 months. Secondly, it will be timely with Storm directors and advisers in Federal Court in September this year while things are still fresh in their mind!! It really makes them start to answer the tough questions and put their fingers on the sticky paper. I think ASIC will find this very useful to supplement any action they may choose to make down the track. The Worrells action is also needed to fulfill their liquidation role as they may not have been getting the full co-operation of Storm diretors and staff in answering key questions about the collapse of the company. I believe every storm investor wants to know what, how, when and why Storm collapsed with the information give under oath.

We have to remember that the terms of reference for the parliamentary enquiry really do focus on what needs to be changed in the industry and what we can learn from the collapse of Storm. It is not as rigid nor adversarial in questioning and investigation as the Worrells or ASIC actions because it is not a court room!! 

The real action will come from any ASIC legal action as this will be the full blown knock em down stoush where the storm directors, storm advisers and bank officials future (think potential custodial sentences and large fines) is very much on the line.

I hope this provides some perspective.


----------



## Solly (4 August 2009)

*"Cassimatis Silence 'Cowardly and Scandalous"*

"Storm Financial founder, chairman and joint chief executive Emmanuel Cassimatis has caused outrage by failing to make a submission to the federal parliamentary inquiry investigating its collapse"

As reported by Duncan Hughes on page 48 of The Australian Financial Review of Tuesday, 04 August 2009.


----------



## Solly (4 August 2009)

*"Storm lender on a $10m buying spree"*

"The owner-manager of a top-performing Bank of Queensland branch linked to adviser Storm Financial went on a buying spree, amassing about $10 million of industrial land, flats and houses until just weeks before Storm's collapse."

See more by Duncan Hughes on page 48 in The Australian Financial Review of Tuesday, 04 August 2009.


----------



## Solly (4 August 2009)

*"More Storm questions for CBA staff"*

"Past and current Commonwealth Bank of Australia staff who were involved with handling Storm Financial accounts are being subpoenaed for a new round of questioning about the collapsed adviser by the Australian Securities and Investments Commission."

See more by Duncan Hughes on page 44 in The Australian Financial Review of 3/8/09.


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## DocK (4 August 2009)

carey ramm said:


> I for one welcome the Worrells investigation and believe it is money well spent by ASIC. In making this point i believe SICAG's Mark Weir (referring to his media comments) does not fully understand how the Worrells action fits in.
> 
> Why? Firstly the Worrells action will provide a forensic investigation into how storm operated and *will no doubt focus on the last year and what went wrong especially the issues of margin calls, the large ex gratia dividend payment and the role of directors in the last 3 months*. Secondly, it will be timely with Storm directors and advisers in Federal Court in September this year while things are still fresh in their mind!! It really makes them start to answer the tough questions and put their fingers on the sticky paper. I think ASIC will find this very useful to supplement any action they may choose to make down the track. The Worrells action is also needed to fulfill their liquidation role as they may not have been getting the full co-operation of Storm diretors and staff in answering key questions about the collapse of the company. I believe every storm investor wants to know what, how, when and why Storm collapsed with the information give under oath.
> 
> ...




Could it be that some of the SICAG leaders received money from Storm's piggy bank/war chest to get them out of bother, and are now worried they may have to cough it back up as Storm were clearly insolvent at the time??  I seem to recall reading a court transcript which mentioned "unsecured loans made to selected clients" in Dec 2008.  Jelich seemed confused as to where the money had gone - I suspect several unsecured "loans" were made to Manny & Julie's nearest and dearest at the expense of the client base and general and their creditors in particulat.  This is something that no doubt Worrells would be keen to uncover and those who received the money keen to keep under wraps!


----------



## Prime (4 August 2009)

bunyip said:


> Max
> 
> We're not denying that SICAG is doing some commendable work and getting some worthwhile results.
> Our criticism lies in the fact that SICAG seem intent on deflecting the heat away from EC and his Storm henchmen.
> ...




Bunyip,
Through what mechanism has SICAG deflected heat from EC?

We are only able to work with information and facts.  To date, we have uncovered wrongdoing by banks and their cronies and employees ...

We have not been able (except for anecdotal evidence) to discover significant facts or information regarding criminal wrong doing. 

You assert /imply significant criminal culpability for EC and his hencemen, you must clearly be in possession of some damming documentary evidence if you can assert such heat deflection.  If so, please forward same to the appropriate authority asap so that they can and will be brought to account.

If you cant backup what you say, then you should remain respectfully mute.

Prime.


----------



## Prime (4 August 2009)

DocK said:


> Could it be that some of the SICAG leaders received money from Storm's piggy bank/war chest to get them out of bother, and are now worried they may have to cough it back up as Storm were clearly insolvent at the time??




No.


----------



## Ironhalo (4 August 2009)

Prime, it could be said that SICAG hasn't exactly looked too hard for any wrongdoing on Storm's behalf, the website is a clear example of that.

Why don't we ask all the ex-employees who were told not to sell their clients out in Oct 08 and save them from financial devastation? I have heard it anecdotally from a number of sources now (and Ron Jelich has alluded to it in his parliament submission) that ex-Storm principals and staff knew that what they were doing wasn't in the best interests of their clients, and yet no one did anything about it. 

We are happy to see SICAG take it to the banks, but answer us this, once the banks are sorted, will SICAG be seeking justice for their members against EC?

I also find it odd that over the past few days, that ever since people started questioning the motives of SICAG, a lot of SICAG posters have suddenly leapt back out of the woodwork in this thread.

Will be interesting to see what transpires over the next few weeks at any rate. Solly, thanks for the links, the AFR sounds like it could be an interesting read today!


----------



## Prime (4 August 2009)

Ironhalo said:


> Which is exactly why SICAG don't want any more 'inquiries' cropping up.




Your comment is non sequitur.

SICAG are seeking truth and justice ... why would we not want more inquisition to and exposure of the facts surrounding the collapse?

There are too many arm chair experts in this forum making uneducated and ill-informed comments about matters they clearly don't understand.


----------



## Prime (4 August 2009)

Ironhalo said:


> Prime, it could be said that SICAG hasn't exactly looked too hard for any wrongdoing on Storm's behalf, the website is a clear example of that.
> 
> Why don't we ask all the ex-employees who were told not to sell their clients out in Oct 08 and save them from financial devastation? I have heard it anecdotally from a number of sources now (and Ron Jelich has alluded to it in his parliament submission) that ex-Storm principals and staff knew that what they were doing wasn't in the best interests of their clients, and yet no one did anything about it.
> 
> We are happy to see SICAG take it to the banks, but answer us this, once the banks are sorted, will SICAG be seeking justice for their members against EC?




Ironhalo,
Perhaps you could elucidate on how we might find incriminating hard evidence to support your assertions?  I've said it before and I'll say it again ... we can only deal with information and facts (not heresay like is common in this forum).  If you think we've missed some important facts, please let us know and more importantly provide the direction on how we go about uncovering those facts so that we can forward same to ASIC and other authorities.

You seemed to have lost sight of SICAGs major mission ... we are here for our members ... to give them back some of their lives.  and seek compensation from whereever wrong doing was found.  Not to put too fine a point on it, EC & Storm are dead ducks and PI insurance companies are scrambling for cover .... even if we could uncover details of criminality then the best we could expect is custodial sentences and the like ... none of which is likely to put food on the tables of any and all victims.

Justice against EC and Storm is being investigated by ASIC, Worrells and JPC.  SICAG welcomes the findings and subsequent actions ... but we're not in a position to provide much if any hard evidence towards these results.


----------



## darkside (4 August 2009)

Ironhalo said:


> Big Max....
> 
> Whether history is kind to SICAG remains to be seen, once the ASIC/Worrell's inquiry starts throwing names around. I don't know if you have been reading my posts, but I fully ENDORSE and APPLAUD the support SICAG have given to the mum and dad investors in terms of people to talk to etc etc...
> 
> ...




Nice work, go big feller, don't hold back. !!!!!


----------



## Ironhalo (4 August 2009)

Not meaning to be rude mate, but I'm only stating reported fact from SICAG from what is published in the media:

*"Frankly, I cannot possibly see what this inquiry will achieve that the parliamentary inquiry or ASIC's inquiry aren't achieving," Investors Consumer Action Group joint chairman Mark Weir said.

"I hesitate to make any expression of conjecture here but there seems to be something going on.

"[Almost] half a million dollars is not an insignificant sum of money, but in the scheme of what has been wasted in this whole exercise it's not that much."

The Worrell inquiry will seek comment from more than 40 potential witnesses, a company statement said.  *

I am champing at the bit as much as SICAG members to see CBA brought to task for what they have done, but anything that might shed light on the potentially negligent actions of EC and his employees should be welcomed with open arms.

As for incriminating evidence on Storm's inaction, my brother got it out of one of the ex-Redcliffe Storm employees in passing at the local shops. I am sure there are some disgruntled Storm employees still waiting for their redundancy/termination payments that would quite happily spill the beans. Although, some of the ex-advisors are now waving the flag for SICAG, so maybe that might not be the best idea eh?

You are not reading my posts, I have said time and time again that I applaud the work SICAg has done in terms of saving devastated people from doing something incredibly stupid, only a heartless person would state otherwise.

But the fact remains, and as many people on this forum have stated, that SICAG's strategy seems based around blaming the banks for 100% of the problem, when in actuality it is clear that Storm/EC/former advisors should be held equally accountable.

The disturbing thing is, that even if in your opinion there is a lack of evidence or an unwillingness by SICAG to look into this fact, one would still reasonably expect that there would be an acknowledgment of the failure of Manny/Julie/Storm somewhere on the SICAG website. There is no mention of this, and never has been. And this very reason is why members of my family, and others we know affected by this refuse to attend a SICAG meeting.

I am not someone sitting on my high horse poking the downtrodden with a stick, myself and my entire family got stung by Storm/CBA and their negligence. WHY aren't SICAG demanding answers from ex-employees and Storm principals? Why isn't there public outcry demanding EC/Julie to be taken to task for what they have done? Noting that some ex-employees/family members of those who stood back and let it all happen are now members of SICAG, you only have to ask them at your next meeting surely?

You mention that criminal charges won't put food on the table of people affected. No it won't, but it will sure take food off the people responsible, which is how justice should work.


----------



## Kez180 (4 August 2009)

Prime said:


> Bunyip,
> Through what mechanism has SICAG deflected heat from EC?
> 
> We are only able to work with information and facts.  To date, we have uncovered wrongdoing by banks and their cronies and employees ...
> ...




I think you will find documentary evidence of some serious negligence on the part of storm in their SOAs, before the collapse other financial planning firms were passing storm SOAs around in forward emails as a joke they were that bad...


----------



## DocK (4 August 2009)

DocK said:


> Could it be that some of the SICAG leaders received money from Storm's piggy bank/war chest to get them out of bother, and are now worried they may have to cough it back up as Storm were clearly insolvent at the time??  I seem to recall reading a court transcript which mentioned "unsecured loans made to selected clients" in Dec 2008.  Jelich seemed confused as to where the money had gone - I suspect several unsecured "loans" were made to Manny & Julie's nearest and dearest at the expense of the client base and general and their creditors in particulat.  This is something that no doubt Worrells would be keen to uncover and those who received the money keen to keep under wraps!






Prime said:


> No.




Found it - from Justice Logan, Federal Court, in ruling re ASIC vs Cassimatis re DOCA: http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2009/269.html


"_As regards the sum of $3.525 million described as “Loans to Clients” the Administrators advise that this represents advances to, or security provided for, Storm clients who were unable to “correct their positions” or “in situations where the clients LVR were high”. The Administrators have been advised that these advances were unsecured, interest free and repayable “in due course”, that is without a fixed repayment date, and that they relate to at least 117 separate clients. Internal documents of Storm record that “As the market recovers Storm will recoup these funds in full”.



Given that the advances are unsecured, were made to clients who were apparently suffering some degree of financial difficulty, and may have relied upon the market recovering for repayment, the collectability of much of the advances sum must be in doubt."_

I have personally been told by an ex-storm client that "Manny & Julie helped us out" - not surprisingly, their submission to the Senate enquiry laid all the blame for their losses squarely on CBA and none on their good mates!


----------



## Hidden Agendas? (4 August 2009)

Prime said:


> Bunyip,
> Through what mechanism has SICAG deflected heat from EC?
> 
> We are only able to work with information and facts.  To date, we have uncovered wrongdoing by banks and their cronies and employees ...
> ...




I somehow don't think Luke, sorry I mean Prime, is going to bag his special friends given the content of the only submission from a SICAG operative so far published.

The argument that they have found wrongdoing by the Banks and nothing criminal by Storm is a matter of semantics, they have found nothing criminal done by the Banks either. This furphy about no money, why pursee them, etc is as hollow as the Cassimatis claim to fight this to his last breath.


----------



## Prime (4 August 2009)

Hidden Agendas? said:


> I somehow don't think Luke, sorry I mean Prime, is going to bag his special friends given the content of the only submission from a SICAG operative so far published.
> 
> The argument that they have found wrongdoing by the Banks and nothing criminal by Storm is a matter of semantics, they have found nothing criminal done by the Banks either. This furphy about no money, why pursee them, etc is as hollow as the Cassimatis claim to fight this to his last breath.




I'm not sure what you mean by "special friends" ... perhaps you'd like to clarify?

Oh contraire ... there is significant evidence to demonstrate criminality on the part of the banks or at the very least some of their staff.  We know for a fact that Senator Williams has provided at least a couple of "briefs" to ASIC for further action.  This is a matter of public record in hansard.  You'll have to stay tuned for the outcomes of those cases.

Furphy about no money? ... another unsupported opinion.  Again, our (SICAGs) brief is clear.  EC, Storm ARE being pursued by the appropriate authorities ... SICAGs input is minimal because we don't have the capacity to investigate the company records in the same way as ASIC, Worrells and JPC can and will do.

I would urge anyone who makes comment in this forum (or any other forum for that matter) to stick to the facts and not try to push their hidden agenda through unsubstaniated or unsupported opinions.

So in two short paragraphs you have implied some sort of sinister alegance, and declared as factual two points that either inaccurate or unsupported.

So, what is your "Hidden Agenda"?  You clearly have a barrow to push?  Perhaps you are the one with special friends in the banks?


----------



## Prime (4 August 2009)

DocK said:


> Found it - from Justice Logan, Federal Court, in ruling re ASIC vs Cassimatis re DOCA: http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2009/269.html
> 
> 
> "_As regards the sum of $3.525 million described as “Loans to Clients” the Administrators advise that this represents advances to, or security provided for, Storm clients who were unable to “correct their positions” or “in situations where the clients LVR were high”. The Administrators have been advised that these advances were unsecured, interest free and repayable “in due course”, that is without a fixed repayment date, and that they relate to at least 117 separate clients. Internal documents of Storm record that “As the market recovers Storm will recoup these funds in full”.
> ...




I have no doubt that these loans may well have been made, but you are inferring that the SICAG leadership is involved.  The loans to some clients, and SICAGs leadship and their relationship to EC/Storm are separate issues and should not, through conjecture, be sewn into the same piece of fabric.  It is plainly wrong.

If you have proof that the SICAG leadship are anything but straight up and down you need to provide this evidence to the authorities. I challenge you.


----------



## Ironhalo (4 August 2009)

Prime you are right in terms of the fact that no one should be pointing fingers at individuals at this stage without a lack of hard facts.

But I am very confident that the ASIC/Worrell's investigations will tell us exactly who is at fault in due course.

What I can confidently say is that I think the following will transpire:
1. CBA (maybe BoQ) will settle with Storm clients owing to forged loan docs, and unsavoury lending practices, in an effort to stave off the Slater and Gordon class action.
2. EC/Julie will be hauled over the coals over the sudden depletion of funds late last year from Storm's working funds. Some recipients of these mystery loans might be named, as well as negligent advisors complicit to the fraudulent Storm model will also be named.
3. A raft of civil/criminal suits may follow.

Justice will be done.


----------



## Prime (4 August 2009)

Kez180 said:


> I think you will find documentary evidence of some serious negligence on the part of storm in their SOAs, before the collapse other financial planning firms were passing storm SOAs around in forward emails as a joke they were that bad...




You think? or you know?

If you know, then you need to bring the evidence to the table.  ASIC investigated Storm (as a result of complaints) only months before the collapse and apparently found nothing.  By law ALL fin planning companies undergo regular compliance audits ... so now after the collapse there are suddenly all these issues of "serious negligence" that appear to be systemic?

I guess like the regulators in the US, everyone was asleep at the wheel ... APRA, ASIC, both internal and external compliance auditors ... the lot ... everyone!

I'm sure I could look at any SOA and find issues with the template software that created them.  The fact (if it is fact) that the SOAs were being emailed around as a joke does not prove nor support "serious negligence".

Again, bring it to the table as a document for evidence.  I'd love to see an example on this forum for "peer" review.

Kez180, Lets get away from the heresay rumour mongering and stick to cold hard facts.


----------



## Prime (4 August 2009)

Ironhalo said:


> Prime you are right in terms of the fact that no one should be pointing fingers at individuals at this stage without a lack of hard facts.
> 
> But I am very confident that the ASIC/Worrell's investigations will tell us exactly who is at fault in due course.
> 
> ...




Agree 100%


----------



## Prime (4 August 2009)

Ironhalo said:


> You mention that criminal charges won't put food on the table of people affected. No it won't, but it will sure take food off the people responsible, which is how justice should work.




That, Ironhalo, is the brief of the authorities to pursue (from a legal point of view).  

SICAG is on the "Victim Support" side of the equation and we make no apology for that.


----------



## DocK (4 August 2009)

Prime said:


> I have no doubt that these loans may well have been made, but you are inferring that the SICAG leadership is involved.  The loans to some clients, and SICAGs leadship and their relationship to EC/Storm are separate issues and should not, through conjecture, be sewn into the same piece of fabric.  It is plainly wrong.
> 
> If you have proof that the SICAG leadship are anything but straight up and down you need to provide this evidence to the authorities. I challenge you.




Perhaps if there were more transparency regarding these transactions, those left in the dark, such as I, would be less suspicious and cynical when the head of SICAG is openly against an enquiry which may very well bring some of these dealings out in the open for all to be aware of.  I don't know if the SICAG leadership are involved - I also don't know for sure that they're not!  What I do know is that funds were "lent" to some, and not others...

I challenge you to make public on SICAG's site a list of the fortunate benificiaries - but of course this would not come under SICAG's purview, would it

I'm not sure that you're "getting" the fact that there are many ex-storm clients, such as myself, who would happily have joined SICAG if they were at least seen to be impartial.  Criminal actions may yet to be proven, but I've yet to see/hear an admission from SICAG that the actions taken by EC/JC were ill-advised at best, and morally bankrupt at worst.


----------



## Mofra (4 August 2009)

Kez180 said:


> I think you will find documentary evidence of some serious negligence on the part of storm in their SOAs, before the collapse other financial planning firms were passing storm SOAs around in forward emails as a joke they were that bad...



I was working for a risk planning firm for a short while who often had Storm SOAs pass our desks (or at the very least a personal balance sheet) -  we'd regularly read in amazement at how the "planning" was almost identical for every client they passed us - equity lend to the hit then leverage over the borrowing via margin loans.


----------



## Prime (4 August 2009)

DocK said:


> Perhaps if there were more transparency regarding these transactions, those left in the dark, such as I, would be less suspicious and cynical when the head of SICAG is openly against an enquiry which may very well bring some of these dealings out in the open for all to be aware of.  I don't know if the SICAG leadership are involved - I also don't know for sure that they're not!  What I do know is that funds were "lent" to some, and not others...




SICAG is not against any enquiry that brings any relevant details into sharp focus.  What were not sure about is why ASIC have provided Worrells with the funding to undertake such an enquiry when you'd have thought ASIC was in the box seat to carry out same as part of its own continuing investigations



> I challenge you to make public on SICAG's site a list of the fortunate benificiaries - but of course this would not come under SICAG's purview, would it




I accept the challenge.  Who are they and or where do I get the names?  Of course I would need to make sure that in so publishing their names that I am not leaving myself open to defamation suites.

Another undercurrent that you're implying here, is that all recipients of those funds did so with sinister intent.  Have you got any real information?



> I'm not sure that you're "getting" the fact that there are many ex-storm clients, such as myself, who would happily have joined SICAG if they were at least seen to be impartial.  Criminal actions may yet to be proven, but I've yet to see/hear an admission from SICAG that the actions taken by EC/JC were ill-advised at best, and morally bankrupt at worst.




I do get the fact that SICAG have been around for over 6 months now and you're judging SICAG over the whole of that time based on one observation by its leadship in recent times.  To be fair, I don't think it would matter what the excuse, you'd find something else to complain about.  It goes to prove you cant keep everyone happy.

You are also asking the SICAG leadership to make a judgement call about the ethicacy or other of the advice.  How can you expect that when the membership are themselves polarised on the issue?  We represent ALL members and it is not in anyones interest to label the advice good bad or indifferent.

Also quite frankly, none of us are qualified to cast such judgement on the quality of advice.  Even ASIC gave Storm a clean bill of health just months earlier and you would have to think that they were better qualified than any other to pass that judgement.


----------



## Prime (4 August 2009)

Mofra said:


> I was working for a risk planning firm for a short while who often had Storm SOAs pass our desks (or at the very least a personal balance sheet) -  we'd regularly read in amazement at how the "planning" was almost identical for every client they passed us - equity lend to the hit then leverage over the borrowing via margin loans.




Agreed.

I think that just about every financial planning company in the country uses a template software to generate financial plans, SOA's , SOAA's ... 

The only thing that would be massaged in the SOA's would be the numbers and names if the individuals.

Be under no illusion ... THIS IS COMMON PRACTICE THROUGHOUT THE ENTIRE FINANCIAL PLANNING INDUSTRY!


----------



## Steve Borden (4 August 2009)

Prime said:


> Agreed.
> 
> I think that just about every financial planning company in the country uses a template software to generate financial plans, SOA's , SOAA's ...
> 
> ...




That is true but unlike Storm a 28 year old does not get the same strategy as an 82 year old, with the only pre-determinate being the amount of equity in their property.


----------



## Prime (4 August 2009)

Steve Borden said:


> That is true but unlike Storm a 28 year old does not get the same strategy as an 82 year old, with the only pre-determinate being the amount of equity in their property.




Actually, I think people would be shocked to find that most of the strategies are very similar with the major difference being the number and type of investments and the differnces in margin lending levels.

Your point it correct though ... the "one size fits all" plan was not (in hindsight) appropriate.  Having said that, Storms say they maintained additional safety parameters for retirees in comparison to "normal" investors.


----------



## darkside (4 August 2009)

Prime said:


> Actually, I think people would be shocked to find that most of the strategies are very similar with the major difference being the number and type of investments and the differnces in margin lending levels.
> 
> Your point it correct though ... the "one size fits all" plan was not (in hindsight) appropriate.  Having said that, Storms say they maintained additional safety parameters for retirees in comparison to "normal" investors.




WTF , the majority of submissions we have read, that Solly has kindly linked for us, are from elderly retired or close to retirement age people, I bet they sleep well at night knowing they had those extra safety parameters in place.


----------



## DocK (4 August 2009)

Prime said:


> I accept the challenge.  Who are they and or where do I get the names?  Of course I would need to make sure that in so publishing their names that I am not leaving myself open to defamation suites.
> 
> Another undercurrent that you're implying here, is that all recipients of those funds did so with sinister intent.  Have you got any real information?




Of course I don't know who they all are!  That's my point.  And I've not implied recipients took funds with sinister intent - I've no doubt their intent was to save their homes, and I'm sure almost every ex-storm client would gratefully accept an unsecured loan were it offered - but it hasn't been offered to all, just a chosen few...  And those few would naturally be unlikely to now publicly blame Manny & Julie for their situation. I'm sure if Worrell's are able to follow the money trail they'll come up with the information eventually - whether those funds will have to be paid back is another matter entirely I guess.  The CBA would no doubt want to lay claim to them given the amount Storm owed them at the time.





Prime said:


> I do get the fact that SICAG have been around for over 6 months now and you're judging SICAG over the whole of that time based on one observation by its leadship in recent times.  To be fair, I don't think it would matter what the excuse, you'd find something else to complain about.  It goes to prove you cant keep everyone happy.




If you read my older posts you'll see that I'm not judging SICAG based on recent developments, I've been aware of and following their website from inception, being an ex-storm client myself.  As I've stated in the past, they've done a power of good in the morale-boosting arena, and have been successful in promoting their point of view - ie banks to blame for everything - but I've never felt the view "portrayed" by SICAG is one I wished to subscribe to.  No, you can't keep everyone happy, and I didn't want to be used to ensure the happiness of people who may not necessarily want the same outcomes I do. 



Prime said:


> You are also asking the SICAG leadership to make a judgement call about the ethicacy or other of the advice.  How can you expect that when the membership are themselves polarised on the issue?  We represent ALL members and it is not in anyones interest to label the advice good bad or indifferent.
> 
> Also quite frankly, none of us are qualified to cast such judgement on the quality of advice.  Even ASIC gave Storm a clean bill of health just months earlier and you would have to think that they were better qualified than any other to pass that judgement.




Not asking SICAG leadership to make a judgement call - just wondering why there is *nothing* on the site that allows for the fact that the advice might have been questionable.  There are numerous links to media articles - all about the banks, and none about the model or directors.  There is an open letter to the banks, how about an open letter to Manny? At the very least if the site is not going to address the issue of the advice given, it should also refrain from actively warning its members away from "fee-for-service" advisors, simply because storm did things differently, therefore any other way must be incorrect????

You are obviously an avid SICAG supporter, and I am obviously quite cynical about its leadership's motives, so I doubt we're likely to agree.  Perhaps we should call it quits and let future events unfold as they will.  I'm sure most, if not all, will be revealed with time (and forensic accounting/court appearances).


----------



## Ironhalo (4 August 2009)

Prime said:


> Actually, I think people would be shocked to find that most of the strategies are very similar with the major difference being the number and type of investments and the differnces in margin lending levels.
> 
> Your point it correct though ... the "one size fits all" plan was not (in hindsight) appropriate.  Having said that, Storms say they maintained additional safety parameters for retirees in comparison to "normal" investors.




Wow. So you mean to tell me that despite me paying the same fees, the retirees that got wiped out regardless had better 'safety parameters'? Jesus wept.

See what I mean about people's perception of SICAG? Can you undersatnd why some people what no part of it when this kind of thing is actually believed by the people on the committee?

EC and his employees knew the parameters....and blatantly ignored them. Both anecdotally and evidentally.


----------



## Prime (4 August 2009)

DocK said:


> Of course I don't know who they all are!




Well, when you do find out let me know and I'll get it put up on the web-site.



> ... but I've never felt the view "portrayed" by SICAG is one I wished to subscribe to.  No, you can't keep everyone happy, and I didn't want to be used to ensure the happiness of people who may not necessarily want the same outcomes I do.




I have to admit that you are an enathema to me.  On one hand you recon SICAG are doing a good job but for the fact that they cant and wont make a call about something they cannot hope to judge with any real cred.  

At the end of the day though .... will you benefit from SICAGs efforts ... probably yes. 




> Not asking SICAG leadership to make a judgement call - just wondering why there is *nothing* on the site that allows for the fact that the advice might have been questionable.  There are numerous links to media articles - all about the banks, and none about the model or directors.




You clearly dont "get" the fact that to publish anything that (to use your words above) "might have been questionable" is in fact making a judgement call and would further polarise the membership.

Again, the model was scrutinised by ASIC and given a clean bill of health, the directors will have to face their peers in the approriate legal forums, not here and certainly not on the SICAG web-site unless we have undisputable facts to present.



> There is an open letter to the banks, how about an open letter to Manny?




I'll talk to the commitee about producing an open letter to EC ... I guess now that the JPC submissions are behind us we will have a bit of time to devote to such a document.



> At the very least if the site is not going to address the issue of the advice given, it should also refrain from actively warning its members away from "fee-for-service" advisors, simply because storm did things differently, therefore any other way must be incorrect????




You actually have interpreted that warning incorrectly.  That warning was placed on the web-site to achieve two parallell purposes.
1. To warn vulnerable ex-Storm victims that "some" less that honourable advisers were taking advantage of shell shocked people and charging them heaps for nothing of substance.
2. To advise other advisory firms that we would not promote other financial planning firms on our web-site for fear that they would similarly take advantage of the shell schocked membership.

I cant tell you how many approaches we rejected for these so-called "offers of assistance".  You only had to google "Storm Financial" and there were numerous sponsored links addressed to "ex-Storm Clients". 

SICAG does not apologise for adopting this type of motherhood behaviour in fact I think they should be commended for it.




> You are obviously an avid SICAG supporter, and I am obviously quite cynical about its leadership's motives, so I doubt we're likely to agree.  Perhaps we should call it quits and let future events unfold as they will.  I'm sure most, if not all, will be revealed with time (and forensic accounting/court appearances).




I agree.  History will judge SICAG and every other player in this debacle for their behaviour.

I trust that neither of us will be to proud to admit the other was right when the dust is fully settled.


----------



## Solly (4 August 2009)

Another nineteen submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub176.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub194.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub209.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub219.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub220.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub223.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub224.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub228.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub229.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub237.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub238.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub239.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub240.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub241.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub242.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub243.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub244.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub245.pdf


----------



## Monario (4 August 2009)

Ironhalo said:


> Prime, it could be said that SICAG hasn't exactly looked too hard for any wrongdoing on Storm's behalf, the website is a clear example of that.
> 
> Why don't we ask all the ex-employees who were told not to sell their clients out in Oct 08 and save them from financial devastation? I have heard it anecdotally from a number of sources now (and Ron Jelich has alluded to it in his parliament submission) that ex-Storm principals and staff knew that what they were doing wasn't in the best interests of their clients, and yet no one did anything about it.
> 
> ...


----------



## Prime (4 August 2009)

Ironhalo said:


> See what I mean about people's perception of SICAG? Can you undersatnd why some people what no part of it when this kind of thing is actually believed by the people on the committee?




No, actually I don't.  The Storm model and beliefs of SICAG are unrelated.



> EC and his employees knew the parameters....and blatantly ignored them. Both anecdotally and evidentally.




Actually EC established the parameters. (To the best of my knowledge)


----------



## carey ramm (4 August 2009)

Been reading the posts and there has certainly been some debate today.

Firstly I am not alone in saying that Storm gave crappy advice. Slater and Gordon have also said those exact words. Numerous others have as well. The Storm model was fundamentally flawed - pure and simple. It was clear in 2002 that the Storm model became stressed from a relatively small market downturn and many Storm investors got hurt financially. Did Storm learn from this? History tells us they did not. Quite clearly Storm directors and advisors did not understand the product they were selling. This is not surprising considering the chequered past of some of these Storm advisers in terms of past compliance issues with dealer groups prior to joining Storm.

Secondly who filled in the majority of those dodgy loan applications that the banks failed to check. Storm had its own internal loans processing unit and these are the people who dealt with the banks. The problems started here inside Storm then flowed through to the banks. Where were the advisors when all this was going on?

Thirdly the Storm SOA. Well they were total crap that came out of a 1 size fits all model (if u could call it that). How the people who created them can live with what they did is beyond me. I have seen many SOA's from other financial planners that are good considered documents that are tailored to meet clients needs and goals. It is not correct to make generic statements that all SOA's are of the same crap standard as Storm's. If this was the case then why did we not see any other major planning firms and their clients come to grief in the market downturn like Storm?  

Now i have seen all sorts of things that Storm did based on the points above. I have documented them and provided them to the regulators. 

Prime, I actually posted this morning how the Worrells action fits in. I was very surprised to see Mark Weirs recent media comment on the subject and can only presume he was quoted out of context.



> Firstly the Worrells action will provide a forensic investigation into how storm operated and will no doubt focus on the last year and what went wrong especially the issues of margin calls, the large ex gratia dividend payment and the role of directors in the last 3 months. Secondly, it will be timely with Storm directors and advisers in Federal Court in September this year while things are still fresh in their mind!! It really makes them start to answer the tough questions and put their fingers on the sticky paper. I think ASIC will find this very useful to supplement any action they may choose to make down the track. The Worrells action is also needed to fulfill their liquidation role as they may not have been getting the full co-operation of Storm diretors and staff in answering key questions about the collapse of the company. I believe every storm investor wants to know what, how, when and why Storm collapsed with the information give under oath.




I will be very interested to see where the money went at the end and who got payments. I would bet a nice bottle of red that we will see some familiar names pop up. Surely the directors at some of the satellite Storm offices could shed some light on this but isnt it amazing how quiet they have all been (with the exception of RJ) - why is this so????


----------



## Monario (4 August 2009)

carey ramm said:


> Been reading the posts and there has certainly been some debate today.
> QUOTE]
> 
> Hi carey, things really seem to be heating up over the last few days!!!
> ...


----------



## Garpal Gumnut (4 August 2009)

carey ramm said:


> Been reading the posts and there has certainly been some debate today.
> 
> Firstly I am not alone in saying that Storm gave crappy advice. Slater and Gordon have also said those exact words. Numerous others have as well. The Storm model was fundamentally flawed - pure and simple. It was clear in 2002 that the Storm model became stressed from a relatively small market downturn and many Storm investors got hurt financially. Did Storm learn from this? History tells us they did not. Quite clearly Storm directors and advisors did not understand the product they were selling. This is not surprising considering the chequered past of some of these Storm advisers in terms of past compliance issues with dealer groups prior to joining Storm.
> 
> ...




Thanks Carey , a reasonable summary of what is happening.

I still can't understand why SICAG , Moneyspidercentral,  still do not even mention any of the adverse findings or upcoming investigation into Storm and the Cassimates.

Also their express endorsement of the Storm model in advising Stormers to only see financial advisers who do not charge hourly fees but rather commissions on products once chosen seems not just foolish but bizarre, especially as they imply that as that was what Storm did, it was the ideal.

It is good to hear from you as so many Financial Advisers seem to only have a Grade 9 education and Year 4 intellects and preschoolers drives for objects.

gg


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## Ironhalo (4 August 2009)

As usual Carey, good post mate.


----------



## carey ramm (4 August 2009)

Monario

With regards to BOQ I understand that Slater and Gordon are ready to lodge their statement of claim and get the legal process underway. I met with the person who is first BOQ cab off the rank last week and they are a very good choice. It takes a special person to stand up and be strong and take on a bank. I know this person reads this forum so i am sure they will appreciate your support. Of course once the first case is underway than the floodgates of other clients will open.

To be honest getting the CBA resolution process underway is a big task and this has been the focus of late. It is expected that all these CBA storm clients will be processed before christmas which is a massive task in itself.

I am sure the other banks will start to feature more prominently in coming weeks.


----------



## Steve Borden (4 August 2009)

carey ramm said:


> Been reading the posts and there has certainly been some debate today.
> 
> Firstly I am not alone in saying that Storm gave crappy advice. Slater and Gordon have also said those exact words. Numerous others have as well. The Storm model was fundamentally flawed - pure and simple. It was clear in 2002 that the Storm model became stressed from a relatively small market downturn and many Storm investors got hurt financially. Did Storm learn from this? History tells us they did not. Quite clearly Storm directors and advisors did not understand the product they were selling. This is not surprising considering the chequered past of some of these Storm advisers in terms of past compliance issues with dealer groups prior to joining Storm.





Perhaps those who invested in the original ozdaq hi-tech fund could share their experiences also, especially those who were advanced monies to keep them afloat.

Is it just me or does it seem a conflict for an adviser to lend money to a client and then dictate how that money is repaid and from where the funds are sourced.

Makes you wonder in who's interest the advice was given.


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## carey ramm (4 August 2009)

Steve

I think i know one of the people u are referring to. It was despicable the way Storm preyed on these poor people after wiping them out with their 2002 Ozdaq screwup - launching an australian hi tech index just as the nasdaq was tanking.

It is certainly not ethical to loan funds to clients who are in difficulty as a result of your poor advice and then get them to access their superannuation to pay out some of the losses and then bleed them dry over a 5 year period. And this was a person who EC handled personally. Storm certainly didnt abide by the credit act. Lots of loan irregularities on this one as well.

This is one case that has been referred to the regulators.


----------



## cuttlefish (4 August 2009)

From the SICAG web site:

"_Before you commit to anything, ask about fees!

Remember, the Storm Fees model charged nothing for discussions until something was actually done.  Most of the financial planning industry charge fees for each appointment regardless of outcome!_"

This quote from the SICAG web site makes it pretty obvious to an independant observer that SICAG is a sympathiser of Storm financial group and their model.   This statement can be seen as directly supporting one aspect of the Storm model.

Storm charged nothing for the first appointment ... the old adage of "you get what you pay for" certainly held true in this situation.

SICAG are pushing it uphill if they think they will convince people they are independant and not Storm sympathisers.  


			
				Prime said:
			
		

> I think that just about every financial planning company in the country uses a template software to generate financial plans, SOA's , SOAA's ...
> 
> The only thing that would be massaged in the SOA's would be the numbers and names if the individuals.
> 
> Be under no illusion ... THIS IS COMMON PRACTICE THROUGHOUT THE ENTIRE FINANCIAL PLANNING INDUSTRY!




For example here we have someone that claims to be a representative of SICAG using upper case text in their posts ("shouting") in order to defend Storms SOA's.  Very independant


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## Solly (4 August 2009)

I found this submission rather interesting, 

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf

This submission alleges that some loan document details were falsified.


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## Monario (4 August 2009)

Solly said:


> I found this submission rather interesting,
> 
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf
> 
> This submission alleges that some loan document details were falsified.




WHOLY Moly!!!! thats a doozie, this is a must read to all on this forum!!


----------



## Steve Borden (4 August 2009)

Solly said:


> I found this submission rather interesting,
> 
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf
> 
> This submission alleges that some loan document details were falsified.




Solly

The interesting thing about this one is that it was a broker originated deal not a deal directly from Storm to the Bank.

So in this instance Storm passed the deal to the broker who passed the deal to the Bank's Broker credit team.

Would think the aggrieved party should be making significant complaints to the Broker, Mortgage Choice and Mortgage Choice's IDR as it was the broker who it would seem made the misrepresentations not the Bank, they just accepted them. They should be able to obtain some satisfaction from this process or broker's PI.

Storm's relationship with the CBA in Townsville was not a broker relationship as this would have had a seriously deterimental effect on the their (Storm's) ability to get the loans approved on the terms required and in the time frames demanded. There is also the potential liability that would stem from originating loans of the nature that they got the CBA approve.

In short, and generally, if referrer sends dodgy loan to CBA and loan goes bad it is CBA in firing line while if a broker sends a dodgy loan to CBA and loan goes bad, broker is in firing line.


----------



## Iggy_Pop (4 August 2009)

Interesting, one account overdrawn $45k, home loan overdrawn $100k, a business which ran at a loss for several years, relatively low salaries, limited assets other than a house, then go out and borrow a heap to invest in Storm on credit. 

How do we protect people in these situations? Maybe some truth in the forms would have prevented a loan.


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## Ironhalo (4 August 2009)

With my 'let's see reason' hat on, these people should have never even contemplated taking such a huge loan out noting their financial situation. If you were to be rendered unemployed tomorrow, would you go and take out a six-figure loan to throw on the share market?

At the end of the day, these people signed for the amount they were given. Had they been making a crap-tin of money, they'd have no drama with the banks. Because they made a loss, now they demand compensation and their gamble back.

Sorry, as bad as the falsification on the loan docs is, at some point they would have been sat down, and told what the total amount of the debt was, as well as their fortnightly/monthly payment obligation. 

I have little sympathy, although I am annoyed at the blatant forgery on the docs.


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## Monario (5 August 2009)

An interesting article... I ove the Macquarie banner above the article, slight irony that they advertise on a page with bad press that they were involved in, perhaps not many know they were also in on it??


http://www.investordaily.com.au/cps/rde/xchg/id/style/7090.htm?rdeCOQ=SID-3F579BCE-7CC657B8


While I appreciate the media coverage in relation to CBA/CGI, I think there need sot be a little more press on the others involved. Macquarie, Bank of Qld. Challenger!!


----------



## Monario (5 August 2009)

Monario said:


> An interesting article... I ove the Macquarie banner above the article, slight irony that they advertise on a page with bad press that they were involved in, perhaps not many know they were also in on it??
> 
> 
> http://www.investordaily.com.au/cps/rde/xchg/id/style/7090.htm?rdeCOQ=SID-3F579BCE-7CC657B8
> ...




Sorry for my bad typing, I should resort to index fingers only rather than touch typing when i am posting on here at 4am... Yaawn!!!


----------



## Solly (5 August 2009)

Monario said:


> An interesting article... I ove the Macquarie banner above the article, slight irony that they advertise on a page with bad press that they were involved in, perhaps not many know they were also in on it??
> 
> 
> http://www.investordaily.com.au/cps/rde/xchg/id/style/7090.htm?rdeCOQ=SID-3F579BCE-7CC657B8
> ...





In Kate Kachor's article Gus Dalle Cort states that ASIC did had hand EC & JC  an enforceable undertaking against the company and the advisers were gagged in December 2008....I wonder what was the reasoning behind this ?


----------



## Prime (5 August 2009)

Solly said:


> In Kate Kachor's article Gus Dalle Cort states that ASIC did had hand EC & JC  an enforceable undertaking against the company and the advisers were gagged in December 2008....I wonder what was the reasoning behind this ?




That is a long story.

ASIC (in front of hundreds of people in Margate) denied gagging Storm.

It has since been determined that the EU was provided to Storm directors in December, although Storm refused to be gagged for 12 months as demanded.

Apparently ASIC sought this EU on the assertion of the CBA believing that Storm was advising their clients not to pay the negative equity that resulted from the late sell down.

Clearly the independent regulator is not as independent as it would have everyone believe!


----------



## donteventryit (5 August 2009)

Prime said:


> That is a long story.
> 
> ASIC (in front of hundreds of people in Margate) denied gagging Storm.
> 
> ...




So Prime, if the first lot of margin calls and associated sell downs occured in September 2008 (ASX200 approx. 4,500 points), but the Enforceable Undertaking didn't come into play until December 2008, why didn't Storm Financial adviser's get in touch with their clients to make arrangements? 

Why were adviser's not taking appointments? Or even phone calls? 

That's right, there were arrangements. Sell down letters. But, why were these sell down letters not lodged (even though they were returned) after they were practically demanded by Storm? 

Why was Julie Cassimatis writing letters to clients stating ... 

_"By sticking with your plan (which is in a good position for recovery) and with Storm we will together do the very best to meet your needs both long and short term". _

... even as the market continued to decline (ASX200 3,500 points). Surely, if there were margin calls at 4,500 points, sticking to the plan (whatever that was) at 3,500 points you were in big trouble???? 

_Another investor and former Storm staffer, Luke Vogel, said he remembers his adviser, Andrew O'Brien, saying that "if I went into margin call not to worry … because Storm would not allow it to happen because Storm had a central 'dam' of money"._ Source: 

What happended to this central dam of money? Why were Storm telling clients not to worry ...

Tell me how the banks are at fault here again?

Source: http://business.theage.com.au/business/storms-weird-demise-20090619-cra9.html?page=-1


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## Ironhalo (5 August 2009)

Exactly. I couldn't even get my Storm advisor to ring me back from Sep-Dec 08.

If the gag was placed in Dec, what were they doing for the other 3 months? Taking bets to see which clients could get into the worst situation?

In terms of the central money dam, I think we'll find that that may have disappeared in the following ways:
1. EC/JC giving themselves (well attempting to give themselves) nice big bonuses before it all fell in a heap; and
2. The 117 clients who they gave 'no specified payback' loans to at the vinegar stroke. I'll hazard a guess and state that 117 of those clients will be ex-advisers (they all made a point of telling us they were invested in the Storm model) and other hangers-on who frequented the Storm world trips/functions. I seem to remember that Storm had 113 employees on the books when they folded....a convenient number as well?


----------



## Hidden Agendas? (5 August 2009)

donteventryit said:


> _Another investor and former Storm staffer, Luke Vogel, said he remembers his adviser, Andrew O'Brien, saying that "if I went into margin call not to worry … because Storm would not allow it to happen because Storm had a central 'dam' of money"._ Source:




I wait in expectation for the legal action to commence, surely Mr Vogel will be suing Mr O'Brien given the nature of this 'advice'.

My guess is though it will all be the Bank's fault.


----------



## carey ramm (5 August 2009)

The CBA submission to the parliamentary enquiry is up and makes solid reading. Whilst i dont agree with some of their recommendations for moving the financial planning industry forward, their commentary on the storm relationship and lessons they have learned and how they will stop this occurring again is very welcome. It is blunt and to the point - pity we dont have the Storm Directors submission to compare with.

This submission clearly shows the leadership of Norris and their intent to fix this problem.

Now the other banks need to follow suit.


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## Ironhalo (5 August 2009)

Noting Luke Vogel is in the SICAG committee with the father of his adviser, I can't see it happening.


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## Farencue (5 August 2009)

Ironhalo said:


> Noting Luke Vogel is in the SICAG committee with the father of his adviser, I can't see it happening.




Was Luke Vogel himself an adviser?


----------



## Hidden Agendas? (5 August 2009)

donteventryit said:


> _Another investor and former Storm staffer, Luke Vogel, said he remembers his adviser, Andrew O'Brien, saying that "if I went into margin call not to worry … because Storm would not allow it to happen because Storm had a central 'dam' of money"._ Source:




And yet the rusted-on Cassimatis supporters who now double as SICAG executives can't understand why ASIC stopped the sales reps from talking to clients.

This is a prime example of the rubbish they were telling people, if in fact they bothered to return their calls.


----------



## Smiley (5 August 2009)

It is timely to note that I actually did get a meeting with my adviser late in 2008 - probably because I was sending many emails and she knew I would not let up.  
She tried to make excuses and claimed that she was just following Manny's instructions and this is why she had not sold down my portfolio earlier as I had requested to cover my loan.
Tried to blame banks in America for the market falling - though this was in direct contradiciton to her saying months earlier that our market movements did not relate to what happened in the USA.  
She also tried to blame Macquarie for not putting the cash loan into my CMT when the portfolio was sold down; it was somehow floating around the bank not earning interest- admitted this was not true in face to face meeting.  
Then she lied and told me the portfolio had been sold down in positive equity - was down at least 5% I later learned. 
She wanted me to not shut down the margin loan and claimed I would be "killing my chickens" - I told her "the chickens have been cremated".
Storm is on the front line for bad advice, too highly gearing clients and not following our instructions.
I look forward to any investigations, prosecutions.:


----------



## Ironhalo (5 August 2009)

Luke Vogel used to 'work' at Storm Redcliffe. Andrew O'Brien's father (his old advisor) is one of the head SICAG committee members.


----------



## Julia (5 August 2009)

carey ramm said:


> The CBA submission to the parliamentary enquiry is up and makes solid reading. Whilst i dont agree with some of their recommendations for moving the financial planning industry forward, their commentary on the storm relationship and lessons they have learned and how they will stop this occurring again is very welcome. It is blunt and to the point - pity we dont have the Storm Directors submission to compare with.
> 
> This submission clearly shows the leadership of Norris and their intent to fix this problem.
> 
> Now the other banks need to follow suit.



Carey, is the CBA submission available for public reading?
If so, could you kindly post a link?
Thanks.


----------



## Farencue (5 August 2009)

Yes I saw an article describing Mr Vogel as a Storm "staffer".........


----------



## carey ramm (5 August 2009)

cba submission

http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub357.pdf


----------



## Farencue (5 August 2009)

Thanks Carey.

From the submission by CBA:
*At no time did we provide any personal financial advice to Storm’s clients. The advice provided and the associated duties and obligations were unquestionably the responsibility of Storm.*

Im sure that Prime et al would like the opportunity to rebut the above here on this very forum full of ignorant posters.

Lastly from the same submission:

*"We have been working with ASIC since December 2008, when we proactively notified them
regarding our concerns in relation to Storm. We are also working constructively with the
Storm Investors Consumers Action Group (SICAG) to assist our customers."*

Now the reason is clear why the banks are so evil, it was the CBA that contacted ASIC - gee if only they had shut up and given Manny the 60 million he needed, all would still be sweet.

A big thankyou to the CBA for protecting the rest of their shareholders!!


----------



## Solly (5 August 2009)

*"CBA brings regulator into frame on Storm Financial collapse"*

The Commonwealth Bank of Australia (CBA) has named the corporate regulator, along with itself and Storm Financial, as one of the key stakeholders involved in the circumstances leading to the hardship suffered by some clients of the collapsed financial planning group."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/article/CBA-brings-regulator-into-frame-on-Storm-Financial-collapse/493238.aspx


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## Garpal Gumnut (5 August 2009)

Again Solly and Carey, Thank you for all the updates.

The CBA submission is particularly useful.

I have no doubt that criminal charges will flow from this, on the evidence contained in all the submissions, and gaol time for some.

Unfortunately, the little guys, the advisers and the lowly financial foot soldiers will not be able to afford the lawyers to save themselves from gaol time.

The big fish like you know who will avoid this fate by the use of expensive silks, paid for by the dubious gains over many years.

I have spent some time in the Creek, Stuart Creek, for those not in the know, Townsvilles own correction centre. It is not a nice place and I believe some of the screws were Storm investors.

It may be worthwhile for the little guys in this saga to tell all they know to the Inquiry, ASIC or the Fraud Squad when they come a knocking on the door as they surely will.

This may shorten or eliminate time spent in a place which defies description. 

So we move on to another stage in this saga. Loyalty may not be the best policy. Save yer skins mates.

gg


----------



## bunyip (5 August 2009)

Prime said:


> Bunyip,
> Through what mechanism has SICAG deflected heat from EC?
> 
> We are only able to work with information and facts.  To date, we have uncovered wrongdoing by banks and their cronies and employees ...
> ...




It's not up to me to provide hard evidence against Cassamatis and his Storm outfit, but you can bet that hard evidence will come to light as this little saga plays out in court.
Regardless, I would have thought that enough stories have come to light from disgusted Storm investors to at least invoke some negative sentiment towards Storm on the SICAG website.
But instead, not a word against Storm or EC - on the contrary, favourable comment on the SICAG home page about the Storm fees model.

Many former Storm clients have attested that Storm Financial was a shonky and incompetent outfit for the following reasons.....

*They charged abnormally high up front fees.
*They geared clients to extremely risky levels.
*They ignored instructions from clients.
*They made grab after grab for more cash by enticing clients to borrow increasing amounts of money, irrespective of their comfort levels and whether or not these extra borrowings were appropriate to individual circumstances, and then belting them with fees of 7% of the additional borrowings.
*They made no effort to put clients into balanced portfolios, but rather, put all the eggs in one basket by focusing on stock market investment.
*They employed a highly risky and flawed investment model that was doomed to implode unless the stock market kept rising.
*They sat on their hands and watched while the stock market collapsed, and their client's portfolios with it. 
*They failed in their duties to protect the wealth of their clients by moving them to cash well before the value of their portfolios was decimated.

Will I go on?...there's no need to - many burnt Storm clients have attested that all the above is correct, and lots more besides. 

The incompetence and dodgy practices of Storm were bad enough, but then when SICAG is formed to seek justice for Storm clients, we find that the committee is largely comprised of  EC pals and former Storm advisers, and at least one relative of a former Storm adviser.
We hear highly misleading claims from at least one SICAG helmsman that the market crash and financial meltdown had no precedent.
We see repeated attempts to put the blame on the banks, but nothing at all about the unscrupulous practices and incompetence of Storm. 

And you wonder why SICAG is copping some flak!!
You wonder why people are suggesting that SICAG appears to be deflecting the heat away from Cassamatis by directing the blame elsewhere!!
You wonder why people are saying there's a conflict of interest by having Manny pals, former Storm advisers, and a relative of an ex Storm adviser on the SICAG committee!

Nobody disputes that SICAG has done some good work for mauled Storm clients. But when their target seems to be almost entirely the banks, while there's no mention of the dodgy practices of Storm and its advisers, it's no wonder that people question whether SICAG really are the impartial seekers of justice that we're led to believe.


----------



## DocK (5 August 2009)

What he said!


----------



## Garpal Gumnut (5 August 2009)

bunyip said:


> It's not up to me to provide hard evidence against Cassamatis and his Storm outfit, but you can bet that hard evidence will come to light as this little saga plays out in court.
> Regardless, I would have thought that enough stories have come to light from disgusted Storm investors to at least invoke some negative sentiment towards Storm on the SICAG website.
> But instead, not a word against Storm or EC - on the contrary, favourable comment on the SICAG home page about the Storm fees model.
> 
> ...




bunyip mate, I have posted many many posts on SICAG, or Moneyspidercentral as I call them. 

They are now superfluous, with the recent submissions from the big players, except from Manny of course who is exempt from criticism by them. 

I repeat their job, if they ever had one is finished, finito, dead parrot, dead moneyspider.

Do not waste energy on them



Garpal Gumnut said:


> Again Solly and Carey, Thank you for all the updates.
> 
> The CBA submission is particularly useful.
> 
> ...




This is where the action comes from now on. Tell all, truthful evidence at the Inquiry, to ASIC, Worrells or the Fraud Squad will make a huge diifference to the small operators in junior positions at Storm and the Banks.

gg


----------



## darkside (5 August 2009)

What Bunyip said as well, but with interest and GST. Nice post.......


----------



## Monario (5 August 2009)

Garpal Gumnut said:


> Again Solly and Carey, Thank you for all the updates.
> 
> The CBA submission is particularly useful.
> 
> ...




GG

I am familiar with Stuart Prison, sometimes referred to as that farm or creek... I did some work there once on the security systems, lets hope the quality of my work will hold the little buggers nice and tight!!! LOL...

On a serious note though, do you really think that individual advisors could do time I asked the question a few pages back (133 I think) that if advisors new they were giving bad advise not in the clients best interests that would they liable and could be sued for Professional Misconduct? Can anyone shed some light?

I believe I have some damning evidence from my advisor in the form of email and phone message that would confirm this!!


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## Monario (5 August 2009)

I agree wholly with Bunyip in post   #2724 ...

Hence the reason I have stated previously, whilst I follow SICAG's progress I do not support them..

E & JC plus a number of advisors in my opinion need to be brought to justice, but so do the poor practices of the banks involved..

I think one of the biggest things that needs to come out of this for the banks is a formula of client to staff ratio so they can better manage themselves!!! Whilst streamlining perfomance and costs is important for the shareholder, this is a very good example in my opinion where companies have not had suffecient ability to service and monitor their client base adequately... Thus adversly effecting the share holder...


----------



## Garpal Gumnut (5 August 2009)

Monario said:


> GG
> 
> I am familiar with Stuart Prison, sometimes referred to as that farm or creek... I did some work there once on the security systems, lets hope the quality of my work will hold the little buggers nice and tight!!! LOL...
> 
> ...



 looked 

Yes getting out to the farm makes it easier than in the creek. Criminal charges are being looked at due to the consistency and alleged fraudulent advice given by the minnows.

The big guys will hide behind the defence of "we never authorised that". Yes the little guys will get to know the creek very well.

Their only way out as happened with Fitzgerald is to come clean, and spell out the whole truth. They won't be able to do a SICAG on the truth, and stay out of the creek.

gg.


----------



## cuttlefish (5 August 2009)

Monario said:


> GG
> 
> I am familiar with Stuart Prison, sometimes referred to as that farm or creek... I did some work there once on the security systems, lets hope the quality of my work will hold the little buggers nice and tight!!! LOL...
> 
> ...




You don't typically go to jail for being bad at your job.  Even if it can be shown that demonstrably erroneous advice was given its still not likely to attract criminal charges.

Jail is for criminal behaviour -  fraud,  insolvent trading if a director,  missappropriation of funds etc. and it has to be proven beyond doubt in court.  Prosecutions will only occur in situations where there is a strong case. 

I suspect most individual advisors are unlikely to face charges except in the cases where there is clear evidence that they deliberately falsified documents.


----------



## Garpal Gumnut (5 August 2009)

cuttlefish said:


> You don't typically go to jail for being bad at your job.  Even if it can be shown that demonstrably erroneous advice was given its still not likely to attract criminal charges.
> 
> Jail is for criminal behaviour -  fraud,  insolvent trading if a director,  missappropriation of funds etc. and it has to be proven beyond doubt in court.  Prosecutions will only occur in situations where there is a strong case.
> *
> I suspect most individual advisors are unlikely to face charges except in the cases where there is clear evidence that they deliberately falsified documents.*




Oh, do tell.

lol

gg


----------



## Monario (5 August 2009)

cuttlefish said:


> You don't typically go to jail for being bad at your job.  Even if it can be shown that demonstrably erroneous advice was given its still not likely to attract criminal charges.
> 
> Jail is for criminal behaviour -  fraud,  insolvent trading if a director,  missappropriation of funds etc. and it has to be proven beyond doubt in court.  Prosecutions will only occur in situations where there is a strong case.
> 
> I suspect most individual advisors are unlikely to face charges except in the cases where there is clear evidence that they deliberately falsified documents.





Sorry Cuttle,Perhaps my post was not clear... Hwta I was mainly asking is could they be individually liable for the advise, sued for the advise? Were they not professionals conducting themselves in the matter of advice in the clients best interest... I believe my advisor knew what he was doing was wrong but did not act, and did not allow me to act in a timely manner to stave off disaster!!


----------



## Garpal Gumnut (5 August 2009)

Unless the advisers fess up to any criminal behaviour and give evidence against the big folks, then they will go to gaol.

gg


----------



## Solly (5 August 2009)

Another thirteen submissions of interest to 

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub247.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub248.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub249.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub252.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub253.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub255.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub258.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub259.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub260.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub261.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub263.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub269.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub270.pdf


----------



## Garpal Gumnut (5 August 2009)

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub270.pdf

This submission alone would keep a State Prosecutor busy for a week or so on a Criminal writ.

gg


----------



## cuttlefish (5 August 2009)

So did CBA accept loan applications without a clients signature?

That seems truly remarkable.


----------



## Solly (5 August 2009)

Garpal Gumnut said:


> looked
> 
> Yes getting out to the farm makes it easier than in the creek. Criminal charges are being looked at due to the consistency and alleged fraudulent advice given by the minnows.
> 
> ...




gg, I don't know the creek but I knew a poor lost soul who had a hard up bringing, lost his way early on in life, got involved with the wrong crowd and notched up a few misdemeanors. Ended up doing porridge in No.2 Division in the old Boggo Rd. 

It wasn't pretty, he never was the same after his release, even though he'd paid his dues, the limp was always was with him, I'm sure the scars remained.  I'd also counsel those to do anything possible to avoid incarceration at any cost.


----------



## Monario (5 August 2009)

Garpal Gumnut said:


> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub270.pdf
> 
> This submission alone would keep a State Prosecutor busy for a week or so on a Criminal writ.
> 
> gg




For those that have read this submission, I have wondered myself who purchase these large share parcels, at a time when the market was in free fall!! I wonder if they were simply passed to the banks.... I would assume that this is a question that will never be answered!!!


----------



## Steve Borden (5 August 2009)

cuttlefish said:


> So did CBA accept loan applications without a clients signature?
> 
> That seems truly remarkable.




Not implausible but they will have signed the loan contract/schedule and the mortgage, that's all the Bank needs to enforce its rights.


----------



## Judd (5 August 2009)

Monario said:


> For those that have read this submission, I have wondered myself *who purchase these large share parcels*, at a time when the market was in free fall!! I wonder if they were simply passed to the banks.... I would assume that this is a question that will never be answered!!!




They were more than likely sold to no one in particular Monario.

The fund simply ceased trading and the underlying assets liquidated, ie sold on the market, with the proceeds going towards reducing the margin loan debt of individual Storm clients.  Despite the market being in free fall, there were still buyers out there.  Some big insto may have bought some of the underlying shares of the indexed funds.  To them it is just a tranche of individual shares on offer at a certain price.  If attractive, they'll buy.  Same as any person would.  When shares are on offer on the market, I don't know if the seller is a distressed one or not - and I don't need to know.  It is merely a transaction. Money does not have emotion.  Only people do.


----------



## Monario (5 August 2009)

Judd said:


> They were more than likely sold to no one in particular Monario.
> 
> The fund simply ceased trading and the underlying assets liquidated, ie sold on the market, with the proceeds going towards reducing the margin loan debt of individual Storm clients.  Despite the market being in free fall, there were still buyers out there.  Some big insto may have bought some of the underlying shares of the indexed funds.  To them it is just a tranche of individual shares on offer at a certain price.  If attractive, they'll buy.  Same as any person would.  When shares are on offer on the market, I don't know if the seller is a distressed one or not - and I don't need to know.  It is merely a transaction. Money does not have emotion.  Only people do.





Yes Judd I agree with what you have said here, and understand it..

My point however is the way the dealings took place, IMO and many others the institutions were looking at making profits, and what better way to make them than to scoop up these share parcels..

It is a possibilty that this happened IMO.. But we will never really know!!

The way some things took place was disgraceful, for instance fixed loans been forceably closed out by ht e banks, then having huge break fees applied. IMO that is pure profiteering!!!


----------



## Julia (5 August 2009)

cuttlefish said:


> You don't typically go to jail for being bad at your job.  Even if it can be shown that demonstrably erroneous advice was given its still not likely to attract criminal charges.
> 
> Jail is for criminal behaviour -  fraud,  insolvent trading if a director,  missappropriation of funds etc. and it has to be proven beyond doubt in court.  Prosecutions will only occur in situations where there is a strong case.
> 
> I suspect most individual advisors are unlikely to face charges except in the cases where there is clear evidence that they deliberately falsified documents.



I agree.   Can't think of any example where someone giving dodgy advice has gone to jail.  I stand to be corrected though.  What about ventures such as Westpoint where FA's Australia wide recommended their clients invest?
I don't think there were criminal charges against any of them.

I've certainly been given bad advice in the past, ASIC have been involved, but no one went to jail.



Monario said:


> Sorry Cuttle,Perhaps my post was not clear... Hwta I was mainly asking is could they be individually liable for the advise, sued for the advise? Were they not professionals conducting themselves in the matter of advice in the clients best interest... I believe my advisor knew what he was doing was wrong but did not act, and did not allow me to act in a timely manner to stave off disaster!!



Just try proving that he was malicious in intent rather than simply incompetent.


----------



## donteventryit (5 August 2009)

Julia said:


> I agree. Can't think of any example where someone giving dodgy advice has gone to jail.  I stand to be corrected though.  What about ventures such as Westpoint where FA's Australia wide recommended their clients invest?
> I don't think there were criminal charges against any of them.
> 
> I've certainly been given bad advice in the past, ASIC have been involved, but no one went to jail.




Julia, 

Here you go - the adviser and westpoint in one: 

http://www.investordaily.com.au/cps/rde/xchg/id/style/4403.htm

_The District Court found the three defendants (licensee, corporate authorised representative and director of the business) had caused the client financial losses by reason of the defendants' negligence at common law, and a breach of section 12DA of the ASIC Act (misleading or deceptive conduct, or conduct likely to mislead or deceive)._

And

_[...as the law currently stands, if the adviser makes a misleading or incorrect statement to a client, that the client could reasonably be expected to act on, the adviser could be fully liable._


----------



## Solly (6 August 2009)

*"Penitent yet defiant, CBA steers blame on to Storm"*

"THE Commonwealth Bank is continuing to use the computer valuation system which, it admits, was partly responsible for irresponsible lending to clients of Storm Financial"

More by Jacob Saulwick in The Sydney Morning Herald is here;

http://business.smh.com.au/business/penitent-yet-defiant-cba-steers-blame-on-to-storm-20090805-ea4k.html


----------



## Solly (6 August 2009)

*"Norris admits Storm failings"*

"Commonwealth Bank of Australia chief executive Ralph Norris admitted yesterday the bank had failed to follow "our own policies and lending practices" when lending to clients of Storm Financial, which collapsed in January, resulting in expected losses for investors of more than $3 billion."

Read more by Duncan Hughes in The Australian Financial Review of Thursday, 06 August 2009.


----------



## Solly (6 August 2009)

*"Storm Financial 'pressured' Commonwealth Bank staff"*

"THE Commonwealth Bank has admitted some of its staff misused the bank's systems to write loans for Storm Financial customers that were larger than they should have been."

See more by Emma Chalmers in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,25888278-3122,00.html


----------



## Pindibog (6 August 2009)

Judd said:


> They were more than likely sold to no one in particular Monario.
> 
> The fund simply ceased trading and the underlying assets liquidated, ie sold on the market, with the proceeds going towards reducing the margin loan debt of individual Storm clients.  Despite the market being in free fall, there were still buyers out there.  Some big insto may have bought some of the underlying shares of the indexed funds.  To them it is just a tranche of individual shares on offer at a certain price.  If attractive, they'll buy.  Same as any person would.  When shares are on offer on the market, I don't know if the seller is a distressed one or not - and I don't need to know.  It is merely a transaction. Money does not have emotion.  Only people do.




If individuals new (CBA) that they were going to sell off all these shares I would think being human nature the way it is that some would have been tipped off to reap rewards of a bargain?!!!


----------



## Judd (6 August 2009)

Pindibog said:


> If individuals new (CBA) that they were going to sell off all these shares I would think being human nature the way it is that some would have been tipped off to reap rewards of a bargain?!!!




I know from where you are coming but conspiracies are too complicated to organise effectively.  The dealer desk will simply ring a counterpart offering say a block of 1.5M BHP at $xx.yy.  Since the NAB options trading fiasco, banks have up the ante across the board on the trading actions that their dealers take.  System is not perfect by any means however.


----------



## Pindibog (6 August 2009)

Pindibog said:


> If individuals new (CBA) that they were going to sell off all these shares I would think being human nature the way it is that some would have been tipped off to reap rewards of a bargain?!!!




Sorry for the spelling : I meant Knew but went to edit and too much time had gone past.


----------



## bunyip (6 August 2009)

Monario said:


> GG
> 
> I am familiar with Stuart Prison, sometimes referred to as that farm or creek... I did some work there once on the security systems, lets hope the quality of my work will hold the little buggers nice and tight!!! LOL...
> 
> ...




Monario

I have my doubts that ex-Storm advisers will do time over this, the reason being that incompetence is not illegal.
As for suing them for professional misconduct, I'm not sure if that would do any good either - I mean, you're hardly likely to get any money out of them even if they're found guilty.

Nevertheless, if you believe you have damming evidence from your adviser then I suggest you pass it on to the authorities.....you just never know, it might be instrumental in getting a conviction that results in punishment for the person concerned.
I'd certainly be giving it a shot if I was in your position.


----------



## Judd (6 August 2009)

SICAG's submission to the Parliamentary Inquiry.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub276.pdf

Nothing to do with Storm as such but I note that quite a number of the submissions imply that because the Index could not collapse, index funds were totally safe and the banks "should be nice and have seen us through this minor setback."  Maybe but in two days, 6 and 7 October 2008 (around the time the Storm funds were going under) it is estimated that $US6.5 trillion was wiped off global sharemarkets.  Given that credit was totally frozen for two or so months, there was the distinct possibility of complete financial meltdown in which case there may not have been sharemarkets period.


----------



## Julia (6 August 2009)

donteventryit said:


> Julia,
> 
> Here you go - the adviser and westpoint in one:
> 
> ...



Thanks donteventryit.  I have had a quick glance through that article and don't see anywhere that anyone went to jail.  Did I miss it?


----------



## donteventryit (6 August 2009)

Julia said:


> Thanks donteventryit.  I have had a quick glance through that article and don't see anywhere that anyone went to jail.  Did I miss it?




Touche - no jail time. Posting more than once a day is obiously above me. 

Here is a link to the original case: http://www.austlii.edu.au/au/cases/qld/QDC/2007/165.html. What was important about this case, was that the individual adviser was found liable for the entire investment amount plus interest. 

The judge commented that _I am satisfied that the plaintiff would not have invested if such a warning has been told to him by the first defendant. _ Similar to the Storm case, the clients were not adequetely warned of the risks (losing capital, margin calls) ... many people have stated to Storm that they did not want to lose capital, they wanted a low risk investment, that they wouldn't receive a margin call and that is what they thought they were getting. 

Surely dragging the advisers through court and going through some distress is better than letting them walking away ...


----------



## Monario (6 August 2009)

donteventryit said:


> Touche - no jail time. Posting more than once a day is obiously above me.
> 
> Here is a link to the original case: http://www.austlii.edu.au/au/cases/qld/QDC/2007/165.html. What was important about this case, was that the individual adviser was found liable for the entire investment amount plus interest.
> 
> ...




Thanks for this Donteventryit, I will be looking further into this.... All the way down i was asking my advisor the typical question, and before things got bad I was informing him of my wishes, to which I was continually been talked out of and actually stopped at times from doing!!! I will be taking him for as much as I can get, just the way he took me!!!

One of the things I never understood with storm is why they were against diversification, but the way they explained it to me made it sound like a dirty word. I was so naive, and for this to have been my first experiece into investments has been both bad and good.

Good that I have learnt a tough lesson and that I will have time to recover..

Bad that it cost so much and has caused such distress amongst the community,and will continue too!!!

I think from this it is clear to many that the regulations need a stringent upgrade, and that the requirment to obtain a FP/FA or even become one need a overhaul...


----------



## Pindibog (6 August 2009)

Judd said:


> SICAG's submission to the Parliamentary Inquiry.
> 
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub276.pdf
> 
> Nothing to do with Storm as such but I note that quite a number of the submissions imply that because the Index could not collapse, index funds were totally safe and the banks "should be nice and have seen us through this minor setback."  Maybe but in two days, 6 and 7 October 2008 (around the time the Storm funds were going under) it is estimated that $US6.5 trillion was wiped off global sharemarkets.  Given that credit was totally frozen for two or so months, there was the distinct possibility of complete financial meltdown in which case there may not have been sharemarkets period.




I can't open it. It says "file is damaged". Even when I go to the submission site. Anyone else experiencing difficulties?


----------



## Monario (6 August 2009)

Pindibog said:


> I can't open it. It says "file is damaged". Even when I go to the submission site. Anyone else experiencing difficulties?





Opens for me Pindi....


----------



## Julia (6 August 2009)

donteventryit said:


> Surely dragging the advisers through court and going through some distress is better than letting them walking away ...




Certainly.   I'm pleased to hear what happened.  It's still quite different from going to jail, though, which is what Cuttlefish and I were saying.



Monario said:


> .... and that the requirment to obtain a FP/FA or even become one need a overhaul...



Can you clarify what you mean about "the requirement to obtain a FP/FA"?


----------



## cuttlefish (6 August 2009)

donteventryit said:


> What was important about this case, was that the individual adviser was found liable for the entire investment amount plus interest.




Reading through the analysis of this case you posted earlier - you are right  that it is an interesting case and does set some interesting precedents.  It would be enough to make me scared to work as a Financial Adviser thats for sure! 

Certainly it does not look like in that case that there was deliberate fraud, and there were plenty of disclaimers given to the investor that they were responsible for their own decisions and weren't being given financial advice - but still the advisor was found liable due to mistakes they made.

So maybe there is a reasonable chance that Storm advisors will come under the gun if the right pressure is applied.


----------



## Monario (6 August 2009)

Julia said:


> Can you clarify what you mean about "the requirement to obtain a FP/FA"?




What I mean is the requirments obtain a licence to become an advisor!!


----------



## Mofra (6 August 2009)

Monario said:


> What I mean is the requirments obtain a licence to become an advisor!!



Generally an adviser operates under the AFSL of their employer - technical a Dipl. of Fina Serv (FP) is enough to meet the minimum qualifications to be a FP, although generally higher qualifications & experience are asked for by reputable firms. 

The industry itself seems to be pushing for greater regulation, as real FPs don't want their reputations sullied by the industry cowbows.


----------



## Ironhalo (6 August 2009)

Why, what a pleasant surprise, is this you Ron?

Can you please, in the spirit of seeking justice for Storm clients, explain to me why my family who were your former clients before Jelich-Jones sold out to Storm, were all wiped out with no one in your branch selling them down when they ordered the Redcliffe advisors to do so back in Oct?

Last I recall, Storm principals were making 'big bonuses from sales' as well while they step-invested retirees into further hock just as the GFC was in its full stride. Pot, kettle, meet black.

Yours in justice,
Ironhalo


----------



## Garpal Gumnut (6 August 2009)

Ironhalo said:


> Why, what a pleasant surprise, is this you Ron?
> 
> Can you please, in the spirit of seeking justice for Storm clients, explain to me why my family who were your former clients before Jelich-Jones sold out to Storm, were all wiped out with no one in your branch selling them down when they ordered the Redcliffe advisors to do so back in Oct?
> 
> ...




Wait about mate.

An SC mate of mine assures me that these transgressions are in the criminal area as well as the civil.

I doubt you will get much dough back ( I hope you do though mate) , but many of these jokers will end up behind bars.

I am assured that both the Commonwealth and Queensland DPP's have been briefed on this debacle.

Fraud is fraud.

gg


----------



## Solly (6 August 2009)

gg, what's your take on the SICAG submission?


----------



## Garpal Gumnut (6 August 2009)

Solly said:


> gg, what's your take on the SICAG submission?




Thanks for asking.



Its better than I thought it would be.
Its a bit full on with "poor me" sentiments, this is a Financial Inquiry, not a Lifeline meeting.
There is an underestimation of Storm and the Cassimatis' culpability in the debacle
The criticism of the banks and managed funds role is apposite and correct imho.
There is no declaration of interest, of the committee members being relatives of ex Storm advisors and in fact ex Storm advisors, which may attract allegations of bias. 
It didn't have any moneyspiders or Storm advertisements on it, which was a plus.

gg


----------



## Solly (6 August 2009)

*"CBA chairman Schubert to retire"*

"The focus will now switch to the future of Ralph Norris whose term as chief executive has recently been mired by the Commonwealth Bank's involvement in providing inappropriate loans to clients of the collapse financial services firm Storm Financial."

More here from Peter Ryan on the ABC;

http://www.abc.net.au/news/stories/2009/08/06/2648313.htm


----------



## Solly (7 August 2009)

*"Penitent yet defiant, CBA steers blame on to Storm"*

"THE Commonwealth Bank is continuing to use the computer valuation system which, it admits, was partly responsible for irresponsible lending to clients of Storm Financial."

More by Jacob Saulwick in The Age here;

http://business.theage.com.au/business/penitent-yet-defiant-cba-steers-blame-on-to-storm-20090805-ea4k.html


----------



## Solly (7 August 2009)

*"ASIC calls for review of laws"*

"FINANCIAL advisers should be required by law to act in the best interests of their clients, and incentives paid to advisers that "distort" financial advice should be removed, the corporate regulator says."

More by Ruth Williams in The Age is here;

http://business.theage.com.au/business/asic-calls-for-review-of-laws-20090806-ebip.html


----------



## Solly (7 August 2009)

*"CBA inflated loans to Storm Financial customers"*

"THE Commonwealth Bank has admitted its system for valuing properties was misused by staff to give bigger loans to clients of the failed Storm Financial."

Read more by Sara Rich in The Australian here;

http://www.theaustralian.news.com.au/story/0,24897,25888969-643,00.html


----------



## Solly (7 August 2009)

*"Storm investors say ASIC should be replaced"*

"Financial regulators need to improve their monitoring and policing skills to identify and stop rogue advisers before they cause widespread losses, former Storm Financial investors have recommended to a federal parliamentary inquiry into the $3 billion collapse."

Read more by Duncan Hughes on page 51 in The Australian Financial Review of 7/08/2009.


----------



## Solly (7 August 2009)

*"CBA owns up: the computer did it"*

"NO MATTER how hard they try, Australia's banks just can't keep out of trouble."

See more in The Age / Full Disclosure by Mark Hawthorne here;

http://business.theage.com.au/business/cba-owns-up-the-computer-did-it-20090806-ebj2.html


----------



## Julia (7 August 2009)

Solly said:


> *"ASIC calls for review of laws"*
> 
> "FINANCIAL advisers should be required by law to act in the best interests of their clients, ...



This comes across to me as a pretty extraordinary statement.
I'd have thought acting in the best interests of clients should be the prime function of a financial adviser and assumed.

Yes, I know financial advisers have rather had their own interests at heart, but to make a public statement like this is damning indeed.


----------



## carey ramm (7 August 2009)

Julia unfortunately ASIC are spot on in what they say on acting in the interests of the client - presently there is no legal obligation. In our submission we address this right up front.



> AECgroup believes there are three key obligations of a financial adviser to their client:
> 1.	The advisor avoids conflicts of interest and acts in the best interests of the client, not their personal or employer’s interests;
> 2.	Legally, advisers are required to have a reasonable basis for any recommendations or advice they provide; and
> 3.	The advisor will provide all information the client would need to make their own judgment on the suitability of a product.
> ...




I know that in speaking to one storm adviser who worked previously for another financial planning firm before joining storm, that they were very concerned about the storm model and the sales approach and the loan documentation. When they raised this with the directors they were told they didnt know anything and belittled. So this adviser then continued putting large numbers of storm clients into this flawed model (and collecting very large bonus cheques along the way) all the time knowing what they were doing was wrong. 

There were also some advisers that left Storm after realising that the models were flawed and the processes dodgy.

This is why we need to push for change in this industry.


----------



## Mr J (7 August 2009)

Fee structure should be changed to be mainly performance-based, commissions should be illegal. Half the problems solved right there.


----------



## Trevor_S (7 August 2009)

Julia said:


> I'd have thought acting in the best interests of clients should be the prime function of a financial adviser and assumed.




It is ... by good advisors and by bad advisors as well.  I am sure STORM would have preferred their clients made money ad infinitum, that they didn't is simply a reflection on shi_tty advice.  30 seconds of looking into their model and you realise the risk from over leveraging.  The best interest of the client is something that's impossible to define by law, and only helps with hindsight after it's all gone pear shaped, that's the rub.

No amount of complicating things further (ie changing the laws simply adds more complication)  will change that fact.   Those agitating for changes to the law are doing so for either their own political ends or are naive, with the only outcome being complication via obfuscation.

You can't protect people from their own gullibility and trying to do so makes it worse (for those of us who aren't gullible will now have incredible hoops to jump through or have access to products taken away e.g margin loans), it will not make the situation "better".  

All they should do is ensure the first line of any disclosure statement should read

YOU REALISE IN SIGNING THIS YOU COULD LOOSE ALL YOUR MONEY, WITH NO RECOURSE. 

and leave it at that.  Everything after that statement in any PDS would be hyperbole anyway, just as it is now.

No amount of fiddle farting around with the law will stop charlatans ripping people off, nor stop the gullible giving their money to them.  

I don't have a solution to that, aside from education and simplification.  

If people feel the need to use a financial advisor, visit one that's fee for service only, at least you have some chance of getting untainted (but not necessarily good) advice.

Hell, Warren Buffet gives free advice ! If you can't afford to loose 50% of your funds, then stay away from the sharemarket (that loss will multiply many times over with leverageing)


----------



## Kez180 (7 August 2009)

Mr J said:


> Fee structure should be changed to be mainly performance-based, commissions should be illegal. Half the problems solved right there.




But performance measured how?

If it is on returns it pushes advisors to take on additional risks to get a higher return, and therefore get more money...

Commissions should go, but I don't think that it is as simple as saying an advisor should be paid for performance...

A lot of the time clients want FPs to predict the future... it just isn't possible to be right 100% of the time...


----------



## Garpal Gumnut (7 August 2009)

In China I'm told the doctors usen't get paid unless the patient got better.

If that were the case with Storm, Julie Cassimatis would be buying her tableware in Crazy Clark's not in an online upmarket auction house.

Poor Storm bastards.

gg


----------



## Hidden Agendas? (7 August 2009)

I see AEC and SICAG in their respective submissions are quoting the results of the survey they conducted, that's all good but when I completed my survey I answered a question regarding who my adviser was.

I haven't seen the results for this one published, is this because the results show a disproportionate weighting to advisors who are friends or family of the SICAG executive?

If there is nothing to hide then why is it being hidden?


----------



## Sunder (7 August 2009)

Julia said:


> This comes across to me as a pretty extraordinary statement.
> I'd have thought acting in the best interests of clients should be the prime function of a financial adviser and assumed.
> 
> Yes, I know financial advisers have rather had their own interests at heart, but to make a public statement like this is damning indeed.




I think what they should do, is have two classes of financial advisor.

1. Call it "Financial Services Broker" or something. They are permitted to sell any product they want, but it should be pretty clear that they get paid by commission, and they are not permitted to charge fees for their services.

2. Call the second class "financial advisors". These people charge for advice, and are not permitted to recommend specific products, only types of investments. So they can say "You need a margin loan and leverage into an index fund - here is a list of 5 margin lenders in alphabetical order. This one has the lowest fees according to what you say, but you need to apply to them directly - I can't help you fill out the paperwork." They must make a statutory declaration once every quarter or so, to declare that they have not received any commissions for recommending products.

The problem is not that financial advisors are or are not acting in the client's best interest. The problem is that the average person can't tell whether they are or not.


----------



## Mr J (7 August 2009)

Kez180 said:


> But performance measured how?
> 
> If it is on returns it pushes advisors to take on additional risks to get a higher return, and therefore get more money...
> 
> ...




Which is why I said half the problem. The only way to solve the problem completely is for people to educate themselves, which we know won't happen.

An advisor should certainly be paid by performance. It's the only way to guarantee - risk aside - that their interests are aligned with those of the client. Stopping advisors from ramping risk to generate high returns is an issue less easily solved, which is why I didn't mention it. No single sentence answer!


----------



## Julia (7 August 2009)

carey ramm said:


> Julia unfortunately ASIC are spot on in what they say on acting in the interests of the client - presently there is no legal obligation. In our submission we address this right up front.



Well, I find it quite pathetic that legislation needs to be enacted  for something that should be automatic.

How would this legal obligation be enforced?   Surely all the adviser has to do is say "well, I absolutely believed that the advice I gave Mr X was in his best interests".   How is anyone going to disprove that?

And in the meantime he continues to feather his own nest, with little concern about the relevance of the advice to the client's situation.





> I know that in speaking to one storm adviser who worked previously for another financial planning firm before joining storm, that they were very concerned about the storm model and the sales approach and the loan documentation. When they raised this with the directors they were told they didnt know anything and belittled. So this adviser then continued putting large numbers of storm clients into this flawed model (and collecting very large bonus cheques along the way) all the time knowing what they were doing was wrong.



Not really anything to say about such woeful moral bankruptcy.  No wonder the industry has such a bad name.






Mr J said:


> Fee structure should be changed to be mainly performance-based, commissions should be illegal. Half the problems solved right there.



I don't see how you could have a performance-based fee.   What would be the criteria?   e.g. my p/f rises 10%, so I pay the FA 0.5%?
What happens if my p/f goes backwards?  Do I get a refund?





Trevor_S said:


> The best interest of the client is something that's impossible to define by law, and only helps with hindsight after it's all gone pear shaped, that's the rub.



I agree.



> No amount of complicating things further (ie changing the laws simply adds more complication)  will change that fact.   Those agitating for changes to the law are doing so for either their own political ends or are naive, with the only outcome being complication via obfuscation.



Further agree.  Seems like grandstanding and window dressing to me.
I can't see how it will make any actual difference.


----------



## Solly (7 August 2009)

*"Storm Financial investors forced back to work""*

"AN action group for former Storm Financial investors estimates half of its members will have to sell their homes to clear debts and a quarter will be forced to rely on Centrelink benefits."

See more by Emma Chalmers in The Courier-Mail here;

http://www.news.com.au/business/story/0,27753,25895238-462,00.html


----------



## Ironhalo (8 August 2009)

'Hey guys I'm a former Storm employee who after pocketing a few years of bonuses, have now seen the light and am standing up for my clients rights and justice and stuff!

In an effort to ease my middle class guilt about my dispicable efforts to rip off my clients, I am now campaigning hard to show my former clients that I am in no way responsible for their distress....I lost my multi-million dollar properties in Redcliffe, I am destitute! I can't even gaffaw at the end of year party at the Bullivant's Redcliffe mansion anymore!?!

Bring the banks down, bring them all down! They were solely responsible for our misfortune, how dare the ASX reduce in value so much! CBA are to blame for hundreds of my clients signing loan documents! It wasn't our gross incompetence and greed, honest I swear!'

Screw you ex-Storm employees.


----------



## stormedup (8 August 2009)

Ironhalo

How succinct, hit the nail right on the head


----------



## Solly (8 August 2009)

*"ASIC calls for a debate on its role"*

"WHERE was ASIC? It has been a recurring cry following a series of spectacular failures that have followed last year's market crisis: financial planners Storm Financial..."

More by Ruth Williams in The Age;

http://business.theage.com.au/business/storm-damage-a-haunting-presence-20090807-ed1h.html


----------



## Solly (8 August 2009)

*"Storm damage a haunting presence"*

"A STORM Financial sign is still lighting up the sky on a building in Sydney, and it's visible from the house of the departing chief executive of the Investment and Financial Services Association, Richard Gilbert."

Read more by Ruth Williams in The Age;

http://business.theage.com.au/business/storm-damage-a-haunting-presence-20090807-ed1h.html


----------



## Solly (8 August 2009)

*"Storm clients outraged over doctored files"*

"Files contained blacked-out sections.
Storm clients reveal details of mix ups over loan files and doctored client files."

Read more by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7118.htm


----------



## Solly (8 August 2009)

*"CBA ramps up internal reviews"*

"To go beyond regulatory requirements.
CBA has used its submission to the parliamentary inquiry to voice the lessons learned from the Storm collapse."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/7111.htm


----------



## Solly (8 August 2009)

*"More tickety boo boo than tickety boo"*

"Even with modern communication, sometimes the message doesn't get through. The Commonwealth Bank's helpful media unit obviously wasn't getting the memos early this year about Storm Financial."

Read more in AFR Prince in The Australian Financial Review Saturday, 08 August 2009.


----------



## Solly (8 August 2009)

*"Planners eye revamp"*

"The licensing regime for financial planners might need to be overhauled, said Bernie Ripoll, the Labor MP overseeing the parliamentary inquiry into financial products and services."

Read more on Page 7 of The Australian Financial Review by Sally Patten.


----------



## Solly (8 August 2009)

Another three submissions of interest to 

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub253.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub264.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub267.pdf


----------



## Solly (8 August 2009)

*"CBA Storm deal 'confusing'"*

"The Storm Investors Consumer Action Group (SICAG) says many former Storm Financial clients are still confused about the proposed settlement deal from the Commonwealth Bank."

More from Niki Lyons on the ABC;

http://www.abc.net.au/news/stories/2009/08/07/2648792.htm


----------



## chrisgee (8 August 2009)

ive just read the sub no 253-this is just so dam sad- i jsut couldnt help but get a lump in my throat when i read what happend to this lady-how could this be allowed to happen to a 66 year old widowed pensioner- not in my country-we dont live in some back woods in a land of scammers- this is australia- what the hell has gone wrong???? as you can tell im fired up a bit today- i think its because we just dont really know what is going to happen- come on banks shows some compassion for those of stumbled into this mess-we all have friends and family that will be your customers now and in the future- i know one bloke who wont go near one bank beacuse of whats happened to his mates in this debacle-we wont ever go near a financial advioser again- no never ever - we will work it all out ourselves- it looks like it cant be too hard considering some of the numbskulls in the game- i wonder what is going to happened to mr c's mob- we are all waiting for the answers- still not a word -not a peep- i suppose there is going to be a lot of ducking and weaving by everbody in this mess-thats ok i willing to wait to see- just as long as they get to bottom of what farked up!


----------



## Anastasia (8 August 2009)

chrisgee said:


> ive just read the sub no 253-this is just so dam sad- i jsut couldnt help but get a lump in my throat when i read what happend to this lady-how could this be allowed to happen to a 66 year old widowed pensioner- not in my country-we dont live in some back woods in a land of scammers- this is australia- what the hell has gone wrong????...




Chrisgee, I too read this submission and totally agree with you...it is indeed a sad day when something like this is allowed to happen. But I also believe that ever person one day has to meet their "Maker" (even if justice is served in this lifetime), and this certainly includes the greedy who prey on the innocent. So bring on ASIC, the Senate inquiry, civil action, criminal action.... and then when all is done, one day the "Maker".....hell has not gone wrong.... it is just in waiting.


----------



## bunyip (8 August 2009)

Ironhalo said:


> 'Hey guys I'm a former Storm employee who after pocketing a few years of bonuses, have now seen the light and am standing up for my clients rights and justice and stuff!
> 
> In an effort to ease my middle class guilt about my dispicable efforts to rip off my clients, I am now campaigning hard to show my former clients that I am in no way responsible for their distress....I lost my multi-million dollar properties in Redcliffe, I am destitute! I can't even gaffaw at the end of year party at the Bullivant's Redcliffe mansion anymore!?!
> 
> ...




Indeed......screw the ex-Storm employees, particularly those who are now portraying themselves as independent seekers of justice for ex-Storm clients. 
No wonder the composition of the SICAG committee has raised more than a few eyebrows and prompted _'conflict of interest'_ comments from thinking people.


----------



## Julia (8 August 2009)

Have also read Sub. 253 but honestly don't find it any more sad than any of the others.  They are all miserable stories.

In this instance, the lady concerned was aware that more borrowings were being layered on top of one another, despite her minimal income.

Didn't she say to herself:  "this just can't be the sensible thing to do:  my income can't service these loans"?

I'm in no way excusing the woeful behaviour of the so called adviser.


----------



## -Bevo- (8 August 2009)

bunyip said:


> Indeed......screw the ex-Storm employees, particularly those who are now portraying themselves as independent seekers of justice for ex-Storm clients.
> No wonder the composition of the SICAG committee has raised more than a few eyebrows and prompted _'conflict of interest'_ comments from thinking people.




Not sure if you guys have seen this article its from afew months ago, its about a former credit manager to Storm Financial and a right-hand man to salesman Mannie.

http://www.townsvillebulletin.com.au/article/2009/03/21/45981_hpnews.html

Its a complete joke ex-storm adviser now apparently has the needs of the Storm Financial clients at heart.


----------



## Pindibog (8 August 2009)

Julia said:


> Have also read Sub. 253 but honestly don't find it any more sad than any of the others.  They are all miserable stories.
> 
> In this instance, the lady concerned was aware that more borrowings were being layered on top of one another, despite her minimal income.
> 
> ...




She was probably fed the portfolio is making enough money to cover these expenses!


----------



## jmac2005 (9 August 2009)

This is the same chap we saw in the car park at Vincent Village a few weeks back, carrying bulk toilet paper (wondered if that was to mop up the b/s that he spun us), took all of my intestinal fortitude not to give him a "Gibbs smack" to the back of the head", but maybe he did a good thing and had our marin loan with BT Financial, who knows, signed the deal, Commonwealth bank still stuffing up, interesting how they said they didn't give financial advice - I know this is hearsay from a solicitor's office, but apparently some storm clients were going to the bank and showing what they were offered and the bank warmed them off storm - did they just give this advice to selected clients or should they have given that across the board... just a thought.
jmac


----------



## Judd (9 August 2009)

jmac2005 said:


> This is the same chap we saw in the car park at Vincent Village a few weeks back, carrying bulk toilet paper (wondered if that was to mop up the b/s that he spun us), took all of my intestinal fortitude not to give him a "Gibbs smack" to the back of the head", but maybe he did a good thing and had our marin loan with BT Financial, who knows, signed the deal, *Commonwealth bank still stuffing up, interesting how they said they didn't give financial advice* - I know this is hearsay from a solicitor's office, but apparently some storm clients were going to the bank and showing what they were offered and the *bank warmed them off storm* - did they just give this advice to selected clients or should they have given that across the board... just a thought.
> jmac




That is NOT financial advice.  I am now going to warn you about the dodgy used car dealer just down the road.  He is a bit dodgy, mate, so be careful.  That is not telling you not to go to that car dealer or what car to buy.  All your choice.  But having said that, the bank staff, while probably trying to be helpful, should have just shut up and said "No comment."  Big trouble with we humans:  we're always way too eager to give our view to someone else.

Just like this post.


----------



## Solly (10 August 2009)

*"Too many cooks"*

"In what could well be classed as the most thorough investigation of the past 12 months, yet another industry player has turned detective in an attempt to solve the mystery of Storm Financial."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7129.htm


----------



## Solly (10 August 2009)

*"Storm meeting to cover offer details"*

"Coast investors in the failed Storm Financial group may learn this week how much they could get out of a proposed settlement offer."

More by Alan Lander in Sunshine Coast Daily here;

http://www.thedaily.com.au/news/2009/aug/10/storm-financial-meeting-cover-offer-details/


----------



## abagnale (10 August 2009)

I have been a long time observer of this saga and have been following this forum and media posts for some time.

I still have mixed emotions about where the real balme lies for this collapse.

I too have read the submissions and there a some truly terrible circumstances that these people have found themselves in.


----------



## Solly (10 August 2009)

*"Bank of Qld reneges on Storm submission"*

More from the ABC here; 

http://www.abc.net.au/news/stories/2009/08/10/2651242.htm


----------



## Solly (10 August 2009)

*"Storm Financial collapse plan outlined"*

"Investors in the failed advisory firm Storm Financial will be given details of a proposed settlement deal with the Commonwealth Bank at the first of a series of meetings this week."

More here in Business Day by Paul Osborne;

http://news.brisbanetimes.com.au/breaking-news-business/storm-financial-collapse-plan-outlined-20090810-ef9y.html


----------



## Garpal Gumnut (11 August 2009)

Over 24hours without a post on Storm Financial.

Must be a record of some sorts.

gg


----------



## nunthewiser (11 August 2009)

off topic ...sorry 

chelsea are great and the queen and garpal need a better soccer team to follow 

thankyou 

as you were


----------



## Solly (11 August 2009)

Garpal Gumnut said:


> Over 24hours without a post on Storm Financial.
> 
> Must be a record of some sorts.
> 
> gg




gg, I'm itching to post, but I can't substantiate the details I have been told...


----------



## Garpal Gumnut (11 August 2009)

Solly said:


> gg, I'm itching to post, but I can't substantiate the details I have been told...




If they are the same I've heard I'd wait before posting until they have been confirmed.

gg


----------



## Ironhalo (11 August 2009)

All I have seen over the past few days is this:

http://www.moneymanagement.com.au/A...frame-on-Storm-Financial-collapse/493238.aspx

CBA is pretty much blaming ASIC as well as Storm.


----------



## Solly (11 August 2009)

Garpal Gumnut said:


> If they are the same I've heard I'd wait before posting until they have been confirmed.
> 
> gg





agreed gg, this is going to be "white hot"....


----------



## carey ramm (12 August 2009)

I understand that the storm directors and key staff will appear in federal court starting on sept 24 with 28 days setdown. This will finally start to shed some light on storms collapse, the $20m dividend paid in FY2008, role of directors (especially the supposed idependent ones) and of course why storm didnt action the margin calls when supposed to leaving their clients in negative equity.


----------



## Solly (12 August 2009)

carey ramm said:


> I understand that the storm directors and key staff will appear in federal court starting on sept 24 with 28 days setdown. This will finally start to shed some light on storms collapse, the $20m dividend paid in FY2008, role of directors (especially the supposed idependent ones) and of course why storm didnt action the margin calls when supposed to leaving their clients in negative equity.




Thanks Carey, this will be quite an eventful time....


----------



## Solly (12 August 2009)

*"Breach of contract Storm brewing for BoQ"*

"BANK of Queensland is facing accusations of breach of contract and misleading, deceptive and unconscionable conduct in a threatened court action on behalf of Storm Financial victims."

More by Stuart Washington in The Age here;

http://business.theage.com.au/business/breach-of-contract-storm-brewing-for-boq-20090811-egyp.html


----------



## Solly (12 August 2009)

*"Bank's last chance before legal storm"*

"THE Bank of Queensland has been given one last chance to settle claims from victims of the Storm Financial collapse or face a class action seeking substantial damages."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,25915824-3122,00.html


----------



## Solly (12 August 2009)

The Submission to the Parliamentary Joint Committee on Corporations and Financial Services, 

by Ann and Mark Weir.


http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub280.pdf


----------



## Solly (12 August 2009)

Another twenty three submissions of interest to 

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub268.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub275.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub278.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub282.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub283.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub285.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub286.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub287.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub288.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub295.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub296.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub297.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub302.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub303.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub304.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub305.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub306.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub307.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub310.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub313.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub321.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub323.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub328.pdf


----------



## Solly (12 August 2009)

*"No apologies: CBA's Norris answers his critics"*

"Mr Norris rejected his critics, saying he would 'rather be respected than popular.' "

Read more on page 1 of The Australian Financial Review by Vesna Poljak.


----------



## abagnale (12 August 2009)

I have been working my way through reading some of those submissions. There is some pretty scary stuff. I read the attachments on number 275. The response by John Clothier from CGI is very direct. 
How are all these poor people going to dig themselves out of all of this. I wouldn't mind traveling up to Brisbane to sit in on these hearings. 
These folk all sound like decent people just caught up in something out of their control. Where does the fault and blame really belong ?


----------



## Farencue (12 August 2009)

It is my understanding that Queensland law does not allow for "class" actions, if this is the case the journalist is being a tad sloppy.
Rather, Slater & Gordon are acting on an individual case to test if the BoQ will do as CBA did for those who were Stormified (in regard to their loans).


Also in regard to Mr Weir's submission and his opening paragraph:
"The following is an attempt to describe our involvement in an episode in our
lives,*the magnitude of which is unprecedented in the history of Australia* in respect of the Financial destruction and human emotional toll it has inflicted on us and other members of the Queensland community and beyond."

The skeptic in me says this could be an exaggeration in regard to Manny's greed/the collapse of Storm.  Would anyone here agree with Mr Weir that indeed this whole fiasco is unprecedented in the history of Australia?


----------



## Kez180 (12 August 2009)

One of the main points that I have noted from reading the parliamentary submissions is that most of the people who invested with storm have very poor general knowledge and less than average communication skills... Combined with a complete lack of financial acumen. 

Example:

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub280.pdf Bottom of page 6

"On a number of occasions we expressed our concern that our investment
strategy was not sufficiently diversified but the answer was always that ”žwe
have our house‟. The reality was that we didn‟t have our house, it was
geared into the Investment- in effect double geared – as the funds borrowed
against the house were used to support further margin loan borrowings. This
scenario created a situation of ”ždouble jeopardy‟. Accordingly there should
have been some recognition of this in setting our LVR risk level."

*Wiki definition of 'Double Jeopardy' *

http://en.wikipedia.org/wiki/Double_jeopardy


----------



## Julia (12 August 2009)

abagnale said:


> I have been working my way through reading some of those submissions. There is some pretty scary stuff. I read the attachments on number 275. The response by John Clothier from CGI is very direct.
> How are all these poor people going to dig themselves out of all of this. I wouldn't mind traveling up to Brisbane to sit in on these hearings.
> These folk all sound like decent people just caught up in something out of their control. Where does the fault and blame really belong ?



There are now 142 pages arguing about this.
Where do you think the blame lies?
Do you think the people concerned made choices?



Kez180 said:


> One of the main points that I have noted from reading the parliamentary submissions is that most of the people who invested with storm have very poor general knowledge and less than average communication skills... Combined with a complete lack of financial acumen.
> 
> Example:
> 
> ...



I agree.   Many of them are naive in the extreme.  

It's difficult to know whether they simply "didn't know what they didn't know" or did have an underlying awareness of the risks they were taking but forged on anyway with the encouragement of their dodgy advisers.


----------



## Ironhalo (12 August 2009)

What really concerns me is that there were so many people who have listed the reasons they forged ahead on this risky road as 'I/we just wanted to be self-sufficient in retirement'. A lofty and noble goal, but the thing is, that by judging from some of the reports, these people were already going to be financially independent noting their assets and their current ages. 

I'm sorry, but taking a $700-800k margin loan against your house when you are on an income of $20-30k is risky, no matter what your level of financial acumen.

In terms of the banks selling people down without margin calls, or even if they weren't in margin call is inherently unprofessional and negligent of the banks (and they are being held accountable), but so is signing loan papers for an amount you can never hope to pay back, on an income that is considered barely above the official poverty line, even if you are retired.

All parties must share the blame, and learn from it. Hindsight is a wonderful thing.


----------



## Steve Borden (12 August 2009)

Farencue said:


> It is my understanding that Queensland law does not allow for "class" actions, if this is the case the journalist is being a tad sloppy.
> Rather, Slater & Gordon are acting on an individual case to test if the BoQ will do as CBA did for those who were Stormified (in regard to their loans).
> 
> 
> ...




I think what Mr Weir suggested is partly true, but only with regard to the fact that a single adviser group has never exposed such a large number of clients to the same aggressive, double gearing strategy without having an exit strategy. This was further exacerbated by the advisory group having close relationships with lenders that allowed prudent banking practice to be subverted in the pursuit of commissions and bonuses.

The financial destruction and human emotional toll flowed from this, the market did not create the issue, it merely exposed the issue.

The fact that this occured was not an if but a when, EC's problem is that occured before *he* was able to exit.


----------



## Garpal Gumnut (12 August 2009)

Julia said:


> There are now 142 pages arguing about this.
> Where do you think the blame lies?
> Do you think the people concerned made choices?
> 
> ...




A good post Julia.

From the submissions many of the fallen seem to still believe that Manny did not charge excessive fees nor was he responsible for the mess.

So, if they believe that after losing millions, imagine what their mindset was like when the market was booming and Storm advisors were advising even higher leverage, on their homes !!!

I was having a beer with my trickcyclist mate an hour or so ago, and he said that this belief is unshakeable in this type of person. So arguing or trying to rationalise with these people is useless. They believe and thats it.

Manny could sell ice (and freezers to keep it in) to eskimos. And these eskimos are sitting in the hot sun now wondering what to do.

gg


----------



## abagnale (12 August 2009)

Julia said:


> There are now 142 pages arguing about this.
> Where do you think the blame lies?
> Do you think the people concerned made choices?
> 
> ...




The blame clearly lies with the systems that are in place to allow this to happen. I just have no idea what you need to have to do to stop this from happening again.


----------



## Judd (12 August 2009)

abagnale said:


> The blame clearly lies with the systems that are in place to allow this to happen. I just have no idea what you need to have to do to stop this from happening again.




The blame lies with people.  As a group we not all that bright and switched on.  Cannot be bothered to ask the right questions because we are not sufficiently curious.  Those who were and did ran a mile from Storm.  Same as those who considered Henry Kaye, property spriuker, a charlatan and never believed that $52 a week would buy an investment property.  And a lot of those were not necessarily financially literate or held university degrees.  They just knew and it is something you cannot teach.  Simply, as with Storm, those that stayed away knew, deep in their guts, that the numbers just didn't add up.  You either have it or you don't.


----------



## Julia (12 August 2009)

abagnale said:


> The blame clearly lies with the systems that are in place to allow this to happen. I just have no idea what you need to have to do to stop this from happening again.



No.  The blame does not lie with systems.  Thousands of people have used these systems and facilities responsibly and successfully.
*People *as Judd correctly points out, attempted to misuse these systems and fell on their faces.

If you are going to borrow far in excess of what you know you can reasonably pay back, or are counting on an always rising market to allow you to cover the outgoings, then that is simply taking a massive risk.

Even if the lending procedures of the banks were, as it appears, irresponsible, it's still up to the borrower to work out his/her capacity to service these borrowings.


Don't blame perfectly functional systems.



Judd said:


> The blame lies with people.  As a group we not all that bright and switched on.  Cannot be bothered to ask the right questions because we are not sufficiently curious.  Those who were and did ran a mile from Storm.  Same as those who considered Henry Kaye, property spriuker, a charlatan and never believed that $52 a week would buy an investment property.  And a lot of those were not necessarily financially literate or held university degrees.  They just knew and it is something you cannot teach.  Simply, as with Storm, those that stayed away knew, deep in their guts, that the numbers just didn't add up.  You either have it or you don't.


----------



## Smiley (13 August 2009)

Here we go again. . . have read most of the submissions and find that the vast majority are putting the blame where it lies - taking responsibility and not saying fees were reasonable . . . . tho somewhat surprised at mark weir's bold defense of some things storm - like fee model  . . . outrageous . . . .


----------



## donteventryit (13 August 2009)

Steve Borden said:


> I think what Mr Weir suggested is partly true, but only with regard to the fact that a single adviser group has never exposed such a large number of clients to the same aggressive, double gearing strategy without having an exit strategy. This was further exacerbated by the advisory group having close relationships with lenders that allowed prudent banking practice to be subverted in the pursuit of commissions and bonuses.
> 
> The financial destruction and human emotional toll flowed from this, the market did not create the issue, it merely exposed the issue.
> 
> The fact that this occured was not an if but a when, EC's problem is that occured before *he* was able to exit.




Great post Steve.


----------



## Pindibog (13 August 2009)

Julia said:


> No.  The blame does not lie with systems.  Thousands of people have used these systems and facilities responsibly and successfully.
> *People *as Judd correctly points out, attempted to misuse these systems and fell on their faces.
> 
> If you are going to borrow far in excess of what you know you can reasonably pay back, or are counting on an always rising market to allow you to cover the outgoings, then that is simply taking a massive risk.
> ...




The perfectly functional system that left me in margin call and did not contact and I had the capacity to lower LVR. Oh lets not forget the perfect system that had me in MC for 56 days and then sold everything, withdrew money from an account they had no approval to and closed the Storm baged index funds at the lowest point making people who didn't even have margin loans suffer. Yeah just perfect!


----------



## Kez180 (13 August 2009)

Pindibog said:


> The perfectly functional system that left me in margin call and did not contact and I had the capacity to lower LVR. Oh lets not forget the perfect system that had me in MC for 56 days and then sold everything, withdrew money from an account they had no approval to and closed the Storm baged index funds at the lowest point making people who didn't even have margin loans suffer. Yeah just perfect!




So far I have heard no account that puts the CGI online system to more than 2 weeks out of date... if I had a margin loan of 30% I would check the market twice a day, let alone 50% or higher and a home loan like most of the leveraged storm clients ... 

What were you thinking when you watched the news? Most of the lending was for index funds, so when you see the index fall by 20% over a week why didn't you pull your money out? If the advisor was being difficult over the phone, why didn't you just go there in person and say 'I want my money out NOW'???

Your only real crime was to trust your advisor... But you could have saved yourself if you'd used common sense....


----------



## Julia (13 August 2009)

Pindibog said:


> The perfectly functional system that left me in margin call and did not contact and I had the capacity to lower LVR. Oh lets not forget the perfect system that had me in MC for 56 days and then sold everything, withdrew money from an account they had no approval to and closed the Storm baged index funds at the lowest point making people who didn't even have margin loans suffer. Yeah just perfect!



You are describing failed decisions by individuals.  I have no idea to whom you gave responsibility for monitoring your margin loan.
But what you describe above is not a failure of the margin lending system of itself.  

If the problem were with margin lending per se then thousands of other people would be in the same situation as you.  They are not because they have managed their situations differently.

That said, I hope there will be some positive outcome for you of the enquiries.


----------



## Pindibog (13 August 2009)

Julia said:


> You are describing failed decisions by individuals.  I have no idea to whom you gave responsibility for monitoring your margin loan.
> But what you describe above is not a failure of the margin lending system of itself.
> 
> If the problem were with margin lending per se then thousands of other people would be in the same situation as you.  They are not because they have managed their situations differently.
> ...




I am not debating the margin lending but the specific companies involved with this debacle. I agree if there was a problem with ML then why aren't thousands of others given the same fate as us. Indexes shut down, sell down of whole portfolio instead of just enough to get back to buffer, letting peoples LVR go past 100%. Storm and CBA/CGI etc did not abide by the rules which we thought were in place. I was not double geared or retired.

I went into market over 19yrs ago when all ords was just 3300 so I did not feel a need to get out as I was going to ride the 'storm' just like the other times. My portfolio was for long term. I had the capacity to inject more funds. These funds were made available and documentation of securities given to cover entire loan when market started spiralling. I was not in MC at that time. Yes I did believe my advisor and did not check myself. This was from 19yrs of trust with him and banks processes. My life has many aspects which take my attention and at the time I left it to my advisor. My understanding was the indexed funds were based on all ords 200, and S&P 300 etc. Not all of them at once would fail. 
Why would I sell at bottom of market when I had the capacity to ride it out and wait another 5 + yrs to improve? If I was on the ball I would have sold at top and then had a huge capital gains problem. The portfollio was not prominent in my mind and I had left it to grow as it supposidly was supporting itself. The 'balance of scales" ??
Lots of lessons have been learnt.


----------



## Pindibog (13 August 2009)

Solly you are slipping. Interesting submission 369. I'll let you link it


----------



## Garpal Gumnut (13 August 2009)

Steve Borden said:


> I think what Mr Weir suggested is partly true, but only with regard to the fact that a single adviser group has never exposed such a large number of clients to the same aggressive, double gearing strategy without having an exit strategy. This was further exacerbated by the advisory group having close relationships with lenders that allowed prudent banking practice to be subverted in the pursuit of commissions and bonuses.
> 
> The financial destruction and human emotional toll flowed from this, the market did not create the issue, it merely exposed the issue.
> 
> The fact that this occured was not an if but a when, EC's problem is that occured before *he* was able to exit.




Excellent comment Steve.

gg


----------



## maccka (13 August 2009)

Pindibog said:


> Solly you are slipping. Interesting submission 369. I'll let you link it




I'm not sure but I think Solly might be away at the moment.

So the link to submission number 369.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub369.pdf

cheers
Maccka


----------



## Garpal Gumnut (13 August 2009)

maccka said:


> I'm not sure but I think Solly might be away at the moment.
> 
> So the link to submission number 369.
> 
> ...




I believe that Solly is away.

Who do Levitt Robinson represent?

There are so many legal people  with a nose in the trough, that I'm confused.

Poor Storm bastards.

gg


----------



## Garpal Gumnut (13 August 2009)

Do any ASF posters know if Bernie Ripoll and Ian McDonald have got the background, intellectual rigour and common financial sense to get their heads around the Inquiry in to Storm Financial?

gg


----------



## Ironhalo (13 August 2009)

My rellies in QLD have returned from the Slater and Gordon meeting held tonight in Redcliffe about half an hour ago. Some very interesting points have come out, with CBA senior staff in attendance that are heading up the Resolution Scheme:

1. CBA have acknowledged fault and mentioned that 'they will fix and compensate the actions they took', and will pay up to $8000 in legal fees per client to Slater & Gordan. CBA apologised to everyone present for their actions, and many people there appreciated the two young CBA guy's honesty and said they were genuinely shameful of the bank's actions.

2. Macquarie or any other banks are excluded for the time being. Anyone with a CBA/CGA loan will be eligible for financial compensation.

3. Storm advisers will be dealt with on a case by case basis and will be investigated and charged with fraud where applicable. S&G are being paid by the bank to pursue this, so guess who the banks will be chasing? Storm advisers are about to get their come-uppance.

4. Slater and Gordon indicated that 'Manny' will be found fully culpable for fraudulent business practices, and will be pursuing him in court. At this stage they are looking to 'take Manny to the cleaners.' *Apparently Manny offered S&G $1 million to make the legal pursuit problems 'go away'. He was told in no uncertain terms to get stuffed.* The insurers are being pressured as well legally.

5. SICAG have (and colour me surprised) dismissed EVERY ex-Storm affiliated member and associate ex-Storm employee as of this week noting the legal developments. There are un-substantiated claims that O'Brien may have left or been asked to leave SICAG noting the above.

6. ASIC's summary to Parliament to come at the end of Aug.

Stay tuned...very interesting times ahead.


----------



## Garpal Gumnut (13 August 2009)

Ironhalo said:


> My rellies in QLD have returned from the Slater and Gordon meeting held tonight in Redcliffe about half an hour ago. Some very interesting points have come out, with CBA senior staff in attendance that are heading up the Resolution Scheme:
> 
> 1. CBA have acknowledged fault and mentioned that 'they will fix and compensate the actions they took', and will pay up to $8000 in legal fees per client to Slater & Gordan. CBA apologised to everyone present for their actions, and many people there appreciated the two young CBA guy's honesty and said they were genuinely shameful of the bank's actions.
> 
> ...




Alleluia,

A shameful chapter closes.

A new one opens and prison beckons for the guilty.

gg


----------



## Ironhalo (13 August 2009)

Another sign of Manny's arrogance. That he would try and offer $1 million (despite saying, 'I am financially devastated!') under the table to make it all go away. 

Good try. And the advisers complicit in all this are about to realise they aren't in the clear yet either.


----------



## Monario (14 August 2009)

Ironhalo said:


> Another sign of Manny's arrogance. That he would try and offer $1 million (despite saying, 'I am financially devastated!') under the table to make it all go away.
> 
> Good try. And the advisers complicit in all this are about to realise they aren't in the clear yet either.




Thanks for the updates Ironhalo!!!! Was there any mention of what might be coming in regards to Macquarie BOQ etc....


----------



## Ironhalo (14 August 2009)

I asked them about that and they said 'not at this stage'. BoQ will be under the pump very soon, but they are holding out.

The biggest catalyst for all of this I think is that Storm Townsville was filled with ex-CBA staff who exploited the systems knowledge/relationships that they had with existing CBA/Colonial staff.

I am stoked, my Colonial index shares were sold from under me (I wasn't even remotely near margin call) one month after they granted us the loan (and also despite having extra cash in the accelerator account to react to any market drops), costing me to the tune of 11k so I am hoping to get some of this back.

Can't wait to see what happens to Manny.


----------



## Monario (14 August 2009)

Ironhalo said:


> I asked them about that and they said 'not at this stage'. BoQ will be under the pump very soon, but they are holding out.
> 
> The biggest catalyst for all of this I think is that Storm Townsville was filled with ex-CBA staff who exploited the systems knowledge/relationships that they had with existing CBA/Colonial staff.
> 
> ...




Great to hear, I am happy for you, lets hope the other banks come out of the woodwork now. 

Yes, Sc#$w Manny, I hope he gets all and more than he deserves, I spoke with him personally a few times close to the end, and the assurance he gave me, well I dont need to go there again..... E&J Cassimatis can rott in hell for the things they have done, I bet Manny's first wife Eleni is laughing riht now!!!


----------



## -Bevo- (14 August 2009)

Ironhalo said:


> 4. Slater and Gordon indicated that 'Manny' will be found fully culpable for fraudulent business practices, and will be pursuing him in court. At this stage they are looking to 'take Manny to the cleaners.' *Apparently Manny offered S&G $1 million to make the legal pursuit problems 'go away'. He was told in no uncertain terms to get stuffed.* The insurers are being pressured as well legally.




This was in yesterdays Townsville Bulletin,

http://www.townsvillebulletin.com.au/article/2009/08/13/70935_hpnews.html

Financial Planning Association is pursuing charges of professional misconduct against three of Storm's former advisers.
Anyone happen to know who the three adviser's are?


----------



## Judd (14 August 2009)

-Bevo- said:


> This was in yesterdays Townsville Bulletin,
> 
> http://www.townsvillebulletin.com.au/article/2009/08/13/70935_hpnews.html
> 
> ...




Bit of a joke in someways.  Had dinner with my former accountant last night. (Yeah, she is a good sort but I'm married.  End of that story.)  She also has qualifications as a financial planner.  Obviously, the Storm situation was raised as it is a pretty hot topic in the financial planning industry at the moment.  She indicated to me that the Storm model was well known, and generally derided, to a number of FP groups and was also known to the FPA.

She gave a wry laugh when she said watch the FPA try to distance itself from this fiasco.

And just as an aside, while some, especially those affected by the events, consider it the issue of the millennium, probably the vast majority of the general population are unaware of it and if they are couldn't give a toss.


----------



## Farencue (14 August 2009)

Colour me surprised too Ironhalo.
How extrememly interesting that SICAG is giving some of its members the boot!
Wonder what Big Max is up to?


----------



## DocK (14 August 2009)

In the absence of Solly, the submission from CHOICE makes a lot of sense to me

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub361.pdf


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## Ironhalo (14 August 2009)

Judd said:


> And just as an aside, while some, especially those affected by the events, consider it the issue of the millennium, probably the vast majority of the general population are unaware of it and if they are couldn't give a toss.




For some of the retirees who have lost their houses and super (and trust me, they are to blame as well as Storm and the banks), it is their biggest issue.

It's like the outbreak of AIDS in Africa, it's possibly one of the biggest epidemics in the world at the current moment, but noting I don't have AIDS, I don't give two hoots, and neither do you.

Harsh human nature I am afraid.


----------



## bunyip (14 August 2009)

Ironhalo said:


> Another sign of Manny's arrogance. That he would try and offer $1 million (despite saying, 'I am financially devastated!') under the table to make it all go away.
> 
> Good try. And the advisers complicit in all this are about to realise they aren't in the clear yet either.




If he has in fact offered $1 million to make it all go away, it would be desperation more than arrogance. He's arrogant as well, but at present he must be desperate man who's staring at the prospect of criminal action and a possible jail term.
I'm surprised he hasn't cracked under the pressure, had a heart attack or ended up in hospital with a stress-related illness.

How destructive is the combination of greed, arrogance and ego! Cassamatis had it all - now he's blown it because 'all' wasn't enough for him.


----------



## Smiley (14 August 2009)

See comments by Allan McDonald - ex-head of IT at Ozdaq and then Storm - a few insights in his statement about what it was like to be an employee there and how things were handled - parliamentary submission #376


----------



## chrisgee (14 August 2009)

this whole thing is getting crazier-after last night im not too confident that the little guy is every going to get everything back-everybodies trying to help but i really dont know who you can trust anymore- so cba has been a naughty boy- mr s says storm gave crumby advice- cba says its helping - but what about the others- my head is spinning with all of this- if you are pushing shait up hill with all of this dont let the buggers wear you down- its a freaking big job sorting this all out- sometimes you just feell like youve been suckered by them all-gee i hope if any fraud has been done they end up on the chain gang-yes mr gg i read yourpost about the prision it sounds like a bad place


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## Judd (14 August 2009)

chrisgee said:


> this whole thing is getting crazier-after last night im not too confident that the little guy is every going to get everything back-everybodies trying to help but i really dont know who you can trust anymore- so cba has been a naughty boy- mr s says storm gave crumby advice- cba says its helping - but what about the others- my head is spinning with all of this- if you are pushing shait up hill with all of this dont let the buggers wear you down- its a freaking big job sorting this all out- sometimes you just feell like youve been suckered by them all-gee i hope if any fraud has been done they end up on the chain gang-yes mr gg i read yourpost about the prision it sounds like a bad place




Just keep on trusting your gut instinct, chrisgee, and keep on asking question after question until you nail it to your satisfaction.

I've been reading those submissions and, truthfully, it is hard going but not as hard for the individuals involved.  While I have a view that people should watch over their own money, even if employing a financial adviser, it astounds me that these people were just treated as financial cannon fodder by the very people they trusted and dealt with on a frequent basis.  I haven't the scope of words to express my distain for such individuals.  Simply appalling.


----------



## Ironhalo (14 August 2009)

Chris, hang in there mate.

The thing is, you're not and never were going to get everything back. Some responsibility must rest on the shoulders of people who signed loan docs and knowingly saw the large six-figure sums they were asking for fromt eh banks to punt on the share market. 

Make sure your stuff is into Slater & Gordon and you should be ok.


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## Big Max (14 August 2009)

Ironhalo said:


> My rellies in QLD have returned from the Slater and Gordon meeting held tonight in Redcliffe about half an hour ago. Some very interesting points have come out, with CBA senior staff in attendance that are heading up the Resolution Scheme:
> 
> 1. CBA have acknowledged fault and mentioned that 'they will fix and compensate the actions they took', and will pay up to $8000 in legal fees per client to Slater & Gordan. CBA apologised to everyone present for their actions, and many people there appreciated the two young CBA guy's honesty and said they were genuinely shameful of the bank's actions.
> 
> ...




I watch posts on this site with one eyebrow raised. Ironhalo is smoking something illegal or his rellies are. Wrong, mate. There have been NO sackings, movements, cleanouts etc at SICAG. It's business as usual. For the information of GG, Ironhalo and others whose ignorance of SICAG's REAL work astounds me, the organisation was praised at last night's meeting by Damian Scattini of Slater & Gordon for its exemplary work for its members. Damian's comments (shock, horror GG and Ironhalo) were met with spontaneous applause that quickly developed into a standing ovation that lasted at least a minute - long enough for me to pull out the camera and take a pic. Wanna see it? I'll bring it to Brisvegas next month GG and I'll show it to you over a beer while we discuss Manny's appearance in the Federal Court. As for you, Ironhalo, would a retraction be asking too much?


----------



## Garpal Gumnut (14 August 2009)

chrisgee said:


> this whole thing is getting crazier-after last night im not too confident that the little guy is every going to get everything back-everybodies trying to help but i really dont know who you can trust anymore- so cba has been a naughty boy- mr s says storm gave crumby advice- cba says its helping - but what about the others- my head is spinning with all of this- if you are pushing shait up hill with all of this dont let the buggers wear you down- its a freaking big job sorting this all out- sometimes you just feell like youve been suckered by them all-gee i hope if any fraud has been done they end up on the chain gang-yes mr gg i read yourpost about the prision it sounds like a bad place





Yes Chris,

Prison is a very, very nasty place. awful, violent and dangerous.

All lower ranking Storm advisers would be well advised to come clean with all they know at the Inquiry.

Rich people have good lawyers, who can wriggle out of punishment for crimes.

The only way for Storm advisers to get on with their lives, is to tell all, and in all likelihood, should they do, they will escape gaol.

gg


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## GumbyLearner (14 August 2009)

Garpal Gumnut said:


> Yes Chris,
> 
> Prison is a very, very nasty place. awful, violent and dangerous.
> 
> ...




A royal commission may help.


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## Garpal Gumnut (14 August 2009)

Big Max said:


> I watch posts on this site with one eyebrow raised. Ironhalo is smoking something illegal or his rellies are. Wrong, mate. There have been NO sackings, movements, cleanouts etc at SICAG. It's business as usual. For the information of GG, Ironhalo and others whose ignorance of SICAG's REAL work astounds me, the organisation was praised at last night's meeting by Damian Scattini of Slater & Gordon for its exemplary work for its members. Damian's comments (shock, horror GG and Ironhalo) were met with spontaneous applause that quickly developed into a standing ovation that lasted at least a minute - long enough for me to pull out the camera and take a pic. Wanna see it? I'll bring it to Brisvegas next month GG and I'll show it to you over a beer while we discuss Manny's appearance in the Federal Court. As for you, Ironhalo, would a retraction be asking too much?




Mate, this is exactly the sort of emotion that got you guys in to this mess in the first place.

You are followers of anyone, who promises a solution.

You do not examine evidence objectively.

Perhaps all at last night's meeting now might go on a feelgood holiday to South Africa or Mauritius to solidify the feeling. Ask Manny along.!!

SICAG with ex Storm Insiders on board is not an objective instrument.

gg


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## Ironhalo (14 August 2009)

Big Max, leave your emotion at the door.

I am only going off what my mother and sister told me while they were driving home. Again, and for the record, I totally agree with what SICAG is doing. I again, applaud SICAG for what you have done for the families affected. Good on SICAG for working with Slater and Gordon, it is appreciated by all involved.

What isn't appreciated are the Ron Jelich and friends who stood by and did nothing but count their bonuses, and accepted world trips as they geared their middle-aged and retiring clients to the wall. I KNOW there are prominent people in Redcliffe who were hospitalised and lost everything in this debacle. Guys like Ron Weir seem down the line. Unfortunately for you Big Max, you admit you worked for Storm in some fashion (it has been mentioned you were an ex-adviser?) so understandably you might be a little riled up to learn that perhaps you and you ex-colleagues may be found responsible in part for all this to some degree. I don't know your involvement with Storm/Ron Jelich (as there is conflicting info) so I won't jump to a conclusion.

I was told (as I indicated, I wasn't there) that from the words of a SICAG person there, that some members (re: not committee members per se) in SICAG who were of Storm affiliation were told to step down and keep away. And last time I checked, SICAG wasn't 'employing' people so the word 'sacked' seems a little over the top.

I won't retract anything. SICAG doing it's best for people (as it is doing) is to be applauded. Mate, I'll sit there and giggle like a schoolgirl when Manny is led into the docks, or his home at Belmont is sold from under him. Same for the advisers involved.

But if you think myself or other people affected are willing to let ex-Storm employees who for a long time benefited from their own negligence/stupidity/deceit, suddenly jump on the 'fighting for justice for the Storm clients bus', then you are terribly mistaken. SICAG doesn't offend me, I find them to be of noble intent and again (I don't know how many times I have to say it) I appluad what they have achieved. However, the grubs who have decided to cling onto the SICAG train who were responsible for the mess in the first place offend me to my core, and I can't wait to see these people get the born-again 'justice' they are so desperately suddenly seeking.

After 12+ years as a military officer, I have found it's in my best interests to remain unbiased, and to form analytical decisions based on the evidence at hand. The world isn't all roses as I have found, and people on this Earth are not all full of good intentions.


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## darkside (14 August 2009)

Ironhalo, i am with you , friends of mine who were "shafted" by the whole storm debarcle were assured last night that all the ex storm advisers were no longer in the drivers seat of "money spider central" or were even allowed to be part of the operation as it would be a conflict of interest, (no **** Sherlock) .

They actually asked the question as i had told them about the advisers holding roles in the operation and they were quite disturbed about that, it's now apparent that they were at the other meeting.

 How about a retraction, or at least fess up ......BigMax


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## GumbyLearner (14 August 2009)

Viva.... Dodge Vegas

http://www.abc.net.au/news/stories/2009/08/05/2646500.htm?site=local

While many Australians have been doing it tough during the economic downturn, it seems white collar criminals and organised crime gangs have been quietly getting on with business.

According to a Fraud Barometer devised by the accounting firm KPMG, major fraud may have exceeded $300 million since January 2008. That's $100 million for each of the six month periods surveyed.

KPMG's forensic auditors who have been running a fine tooth comb through company balance sheets have found both commercial businesses and government agencies to be key targets.

Much of the fraud detected is of the "inside job" variety where often trusted staff members manipulate accounting systems or deceive their employer to divert funds to their own bank accounts.

The survey found that 83 percent of frauds have occurred on Australia's eastern seaboard with Queensland the most popular state for fraud activities.

KPMG's national head of forensic, Gary Gill, says fraudsters are not just attracted to Queensland's tropical climate but also find it conducive to the development of financial scams.

"Investment scams are popular in the Sunshine State, with half of all investment scams identified in Australian occurring in Queensland," Mr Gill said.

*Royal Commission bring it on!!*


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## Big Max (15 August 2009)

Ironhalo said:


> Big Max, leave your emotion at the door.
> 
> I am only going off what my mother and sister told me while they were driving home. Again, and for the record, I totally agree with what SICAG is doing. I again, applaud SICAG for what you have done for the families affected. Good on SICAG for working with Slater and Gordon, it is appreciated by all involved.
> 
> ...




It's frustrating having to correct so many inaccuracies. I have never worked for Storm, was never a Storm adviser, never invested a drachma with EC, never had any connection with Storm (thank God). Where do you get your information from old mate? I am a paid consultant - the only person on the SICAG executive who is being paid. Not a bad effort for blokes like Mark (not Ron) Weir and Nobby O'Brien who have lost millions of dollars and yet continue to put thousands of unpaid man-hours into helping people like your rellies. Give SICAG a rest and get stuck into the real bad guys. Oh, and give me a ring any time to check facts - 0419 782729.


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## GumbyLearner (15 August 2009)

Big Max said:


> It's frustrating having to correct so many inaccuracies. I have never worked for Storm, was never a Storm adviser, never invested a drachma with EC, never had any connection with Storm (thank God). Where do you get your information from old mate? I am a paid consultant - the only person on the SICAG executive who is being paid. Not a bad effort for blokes like Mark (not Ron) Weir and Nobby O'Brien who have lost millions of dollars and yet continue to put thousands of unpaid man-hours into helping people like your rellies. Give SICAG a rest and get stuck into the real bad guys. Oh, and give me a ring any time to check facts - 0419 782729.




Well you are willing to give your time to this forum, which is admirable in itself.

The only problem is when you face a bunch of people from North Qld, the majority of which are from Townsville, and even then a solid subset are ex-military. 

Break -em. That's right try to break them!

Battle?

In their eyes bring it on?

It is not so much a question of subjectivity? It's really a question of why have Australian Lending Rules stood up during this financial crisis.

Why you may ask?

because there are rules in this country and that has a lot to do with why the top 4 in OZ are top ten worldwide.

There are rules my friend and really those who were involved should really BE ****en scared because any litigator worth his salt is really going to bring it to public attention!

JMO

DYOR


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## Big Max (15 August 2009)

GumbyLearner said:


> Well you are willing to give your time to this forum, which is admirable in itself.
> 
> The only problem is when you face a bunch of people from North Qld, the majority of which are from Townsville, and even then a solid subset are ex-military.
> 
> ...




Just for the record . . . I lived in the Townsville region for over 30 years, served as an officer in the Army Reserve and have been up as many dry gullies as the next bloke. I'm into FACTS, not hearsay and cheap shots. Let's all aim the M16s at the real bad guys - Storm and the banks. We are wasting a lot of time on who's who in the zoo at SICAG - it's not the main game in my humble opinion. Are you coming to the SICAG/Slater&Gordon meeting next Wednesday night? Come up and say "g'day". You too, GG and Ironhalo. See www.sicag.info for meeting information.


----------



## abagnale (15 August 2009)

Julia said:


> No.  The blame does not lie with systems.  Thousands of people have used these systems and facilities responsibly and successfully.
> *People *as Judd correctly points out, attempted to misuse these systems and fell on their faces.
> 
> If you are going to borrow far in excess of what you know you can reasonably pay back, or are counting on an always rising market to allow you to cover the outgoings, then that is simply taking a massive risk.
> ...




Julia, the systems I am referring to are the systems in place for the checks and balances that should be mandatory in the monitoring of these types of schemes or investments. I have no issue with margin loans, mortgages against assets, derivatives, double gearing, etc. These are all admirable vehicles to use to enhance wealth when used with extreme care and in the hands of the streetwise. But the manner in which these were used in the storm case leaves me to question who was monitoring their application, use and deployment. There appears to be some internal failure with in the CBA to allow the approval of these home equity loans to clients who should not have normally received them, the submission from the CBA appears to admit this.

I don't have a finance background but I am very suspicious of people claiming to make me wealthy and secure my future. As for the storm model where everything seemed to be in the one basket, the one stop shop, everything in house, with the same strategy for all, I would have walked out the door. In my field we rely on proven systems to ensure all goes well. People always make mistakes and make wrong judgments, that is why we rely on systems that employ multiple redundancies, roll backs, proven standard operating procedures, checklists and crosschecks, go and no go rules, etc. There are laws and severe penalties and consequences for non compliance. If we don't follow these systems people die. Simple as that. I gather there are a couple of others on this forum in the same field as me.

It appears to me that the storm experience was a live experiment using real people and their money using a model that was not fully beta tested before deployment and hit turbulence that the structure could not withstand. The crash investigators will pick over the hulk looking for clues, closely inspecting the pieces, analysing the recorded data and checking the logs etc . In this case the captain, crew and their service providers have all survived and will aid with the investigation into the hull loss, willingly I trust.

I can't blame people wanting to improve their lot in life and many saw storm as their saviour. There were some well respected names in the background, CBA, Colonial, other big banks, the principals appear to have been around for a long time in the business and many happy clients, etc. But it did come crashing down so to me there were not robust systems in place to prevent this from happening. You can't gamble with people lives whether it is financial or physical. People make mistakes that is why you need systems in place to, mitigate, transfer and avoid lethal errors. I don't have the answers to prevent this from happening again, I will leave this to experts in the field of regulation and compliance.


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## Buckeroo (15 August 2009)

As I don't ever get involved in financial houses like Storm (mainly because I've never trusted any of them since the 1989 collapse), I don't have too much to add except I think its absolutely awesome that there are 2866 posts with a grand total of 242,143 views. 

Must be close to a record?

Cheers


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## Solly (15 August 2009)

*Some catchup news links of interest;*

*"Storm lending case 'a Townsville issue'"*

http://news.brisbanetimes.com.au/breaking-news-business/storm-lending-case-a-townsville-issue-20090812-ei89.html

*"Lawyers meet with Storm investors*"

http://www.theaustralian.news.com.au/business/story/0,28124,25921078-643,00.html

*"Bank's last chance before legal storm"*

http://www.news.com.au/business/story/0,27753,25916137-462,00.html

*"Centrelink benefits cut short by pre-cost investment reporting"*

http://www.moneymanagement.com.au/article/Centrelink-benefits-cut-short-by-pre-cost-investment-reporting/494225.aspx

*"Bank of Qld 'hindering' Storm settlement"*

http://www.abc.net.au/news/stories/2009/08/13/2654299.htm

*"Storm Financial victims seek compensation from banks"*

http://www.news.com.au/couriermail/story/0,23739,25927114-3122,00.html

*"BoQ has week to respond to draft"*

http://www.theaustralian.news.com.au/story/0,25197,25926556-5006786,00.html

*"Storm investors rely on bank to reveal truth"*

http://www.theaustralian.news.com.au/business/story/0,28124,25929813-36418,00.html

(I picked a bad time to go missing with all the action that's been happening


----------



## Solly (16 August 2009)

*"BoQ denies sales talks for Townsville branch"*

"Bank of Queensland has denied claims by Townsville businessmen that its controversial North Ward branch, which is at the centre of several investigations involving collapsed Storm Financial, is for sale."

See the article on page 42 of The Australian Financial Review of 14/8/09 by Duncan Hughes & Matthew Drummond.


----------



## bunyip (16 August 2009)

_In its submission to the parliamentary inquiry into financial products and services, the bank admitted its system for valuing properties was misused by some staff to give bigger loans to Storm clients. Slater & Gordon lawyer Damian Scattini said in cases where a loan was inappropriately provided to a customer "you would be looking to put them in a position they would have been had they never have gone to that bank". He said in extreme cases this might involve dissolving the loan, "but that's one end of the spectrum and most things fall towards the middle". _


Above is an extract from one of the links provided by Solly.

On the one hand, the banks need to be punished for any wrongdoing in giving extraordinarily large loans to Storm clients.
But on the other hand, why should anyone who was foolish enough to accept these large loans, get full compensation for their foolishness?

If a bank offers me a massive loan when my modest income means I have only limited loan-servicing capacity, am I going to be stupid enough to accept it? If I am, and I get into trouble, surely it's my fault just as much or more than the bank's fault.
Reading through all those submissions to the Parliamentary Inquiry, it almost beggars belief to see so many people who admit to being concerned about the size of their loans, but they went ahead with the loans anyway. 
The large loans would have been risky enough even they were for relatively safe investments like real estate - but the people concerned invested these massive funds in the stock market, of all things! Some of them even cashed safe investment like real estate, and sunk those funds as well into stocks.
Not only that, but they had no risk management in place, such as selling out if their investment declined by a certain percentage. 

Now they hold out their hands for compensation for their foolishness.
I'm not without sympathy for Stormers whose lives have been devastated, but surely there's such a thing as taking responsibility for our own actions.

I know it's all been said before on this thread, but it prompts me to say it again after reading through those submissions and hearing talk of full compensation.


----------



## Anastasia (16 August 2009)

Solly said:


> *"BoQ denies sales talks for Townsville branch"*
> 
> "Bank of Queensland has denied claims by Townsville businessmen that its controversial North Ward branch, which is at the centre of several investigations involving collapsed Storm Financial, is for sale."
> 
> See the article on page 42 of The Australian Financial Review of 14/8/09 by Duncan Hughes & Matthew Drummond.




Wonder where this business is based?
http://www.seekcommercial.com.au/Business/Listing.aspx?ListingId=9150


----------



## specialed (16 August 2009)

bunyip said:


> _In its submission to the parliamentary inquiry into financial products and services, the bank admitted its system for valuing properties was misused by some staff to give bigger loans to Storm clients. Slater & Gordon lawyer Damian Scattini said in cases where a loan was inappropriately provided to a customer "you would be looking to put them in a position they would have been had they never have gone to that bank". He said in extreme cases this might involve dissolving the loan, "but that's one end of the spectrum and most things fall towards the middle". _
> 
> 
> Above is an extract from one of the links provided by Solly.
> ...




Bunyip, If you really understood this whole mess you would know that much of the distress felt by the storm victims, is not so much caused by the effect of the stock market crash but rather the margin call (or lack there of ) debacle caused by a panicking CBA. How can they, the storm clients "take responsibility for their actions" when the actions of the CBA and CGI ensured that the actions ( that is, the margin call facility) that Storm investors believed they had set in place to avoid this disaster was taken from them. It like instructing a broker to sell for you at two dollars but its done at 50 cents, or worse, asking to buy at 50 cents but they buy at two dollars then bill you for it. In all aspects of our lives, financial or otherwise we put in place mechanisms to protect us. If we fall asleep at the wheel then we should take responsibility for our actions…..but when someone else takes away your ability to save yourself then THEY need to be held accountable, and they should pay, not only for your actual loss but for all the pain and suffering they have caused along the way.


----------



## Solly (17 August 2009)

*"BoQ chief in spotlight"*

"THE managing director of the Bank of Queensland, David Liddy, will be called in front of a parliamentary inquiry into collapsed financial schemes, but the heads of other major banks may avoid the public scrutiny.'

Read more by Jacob Saulwick in the SMH here;

http://business.smh.com.au/business/boq-chief-in-spotlight-20090816-emc1.html


----------



## Solly (17 August 2009)

*"Better radar would spot another Storm"*

"Differences with ASIC may be emerging over responsibility for corporate supervision.
The regulator blames recent financial failures on factors other than its own stewardship. 
The Investment and Financial Services Association has called on the securities regulator to boost its monitoring of the wealth industry in an effort to protect consumers from unscrupulous operators."

Read more by Sally Patten on page 44 of The Australian Financial Review of 17/08/2009.


----------



## Kez180 (17 August 2009)

Big Max said:


> Just for the record . . . I lived in the Townsville region for over 30 years, served as an officer in the Army Reserve and have been up as many dry gullies as the next bloke. I'm into FACTS, not hearsay and cheap shots. Let's all aim the *STYERS* at the real bad guys - Storm and the banks. We are wasting a lot of time on who's who in the zoo at SICAG - it's not the main game in my humble opinion. Are you coming to the SICAG/Slater&Gordon meeting next Wednesday night? Come up and say "g'day". You too, GG and Ironhalo. See www.sicag.info for meeting information.




Fixed....


----------



## Big Max (17 August 2009)

Kez180 said:


> Fixed....




STEYRS ... your fix is fixed!


----------



## Ironhalo (17 August 2009)

Hahahahaha!


----------



## darkside (17 August 2009)

Kez180 said:


> Fixed....




OOOh, nearly slipped through to the keeper, nice catch !!!!!


----------



## Solly (17 August 2009)

*ASIC's submission to the 
Inquiry into Financial Products and Services in Australia*

From page 14, " Criticism has been levelled at ASIC that it should have done more to prevent
the collapse of Storm and, possibly, Opes. ASIC rejects those criticisms."

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub378.pdf


----------



## Judd (17 August 2009)

Page 36 of ASIC submission.

"The challenge for ASIC, Government and industry is to improve access to advice for retail investors...."

I wish that had read:

"The challenge for ASIC, Government and industry is to improve access to advice for *those* retail investors *who elect to receive such advice*...."

The rest is pretty much as I expected.

What none of the submissions actually spell out is that due to Governments of various persuasions continually changing the goal posts and the financial industry developing more and more complicated products, it is easy for the general punter: to think they need financial advice when probably they don't; start to believe the talking heads that they have to be self-funded retires; and poor old retirees. believing there is a safe way to get off the age pension when, of course, there isn't and in any case, if your 65+ yo and retired, it is way too late to do anything but accept that you are on the age pension.


----------



## bunyip (17 August 2009)

specialed said:


> Bunyip, If you really understood this whole mess you would know that much of the distress felt by the storm victims, is not so much caused by the effect of the stock market crash but rather the margin call (or lack there of ) debacle caused by a panicking CBA. How can they, the storm clients "take responsibility for their actions" when the actions of the CBA and CGI ensured that the actions ( that is, the margin call facility) that Storm investors believed they had set in place to avoid this disaster was taken from them. It like instructing a broker to sell for you at two dollars but its done at 50 cents, or worse, asking to buy at 50 cents but they buy at two dollars then bill you for it. In all aspects of our lives, financial or otherwise we put in place mechanisms to protect us. If we fall asleep at the wheel then we should take responsibility for our actions…..but when someone else takes away your ability to save yourself then THEY need to be held accountable, and they should pay, not only for your actual loss but for all the pain and suffering they have caused along the way.




I'm well aware of the allegations against the banks in relation to margin calls, or lack of them.

My comments were in regard to people complaining about the banks lending them so much money, yet the investors went ahead with the loan in spite of feeling well outside their comfort zone.
If you think the size of these loans and the market crash had little to do with investors getting wiped out, you're dead wrong.
Sure, the situation was exacerbated by them not knowing they were in margin call. Whether that's the fault of the banks or the fault of Storm is another matter.
And it can't be denied that it's partly the investors fault....they had a responsibility to themselves to monitor their positions and keep in touch with their situation at all times. 
Prudence should have dictated that they get out of the market well before they got near a margin call. 
It's not acceptable to say they were leaving it all to Storm. A foray into the stock market is a business investment - just like any other business it needs careful monitoring by the owner, even when the owner employs the services of a manager.
Not everyone got into trouble buying stocks through margin loans. Many prudent investors used margin lending to good effect, and got out of the market when it showed clear signs of running into trouble.
The simple fact is that a market decline of well over 50% was going to put most people in trouble if they used the level of gearing that was common among Storm clients.
The market fell quite a bit further over the 3 months or so after clients were sold out. Realistically, many of them would have been battling to hang on, given their level of gearing.

As I've stated on a number of occasions, I'm not without sympathy for the plight that ex-Storm clients find themselves. But I do get rather tired of reading complaints against the banks for lending them so much money, given the fact that Stormers went against their better judgement by accepting those large loans. They must take their share of the responsibility for that decision, rather than simply dishing out blame to the banks for lending them so much.


----------



## Solly (18 August 2009)

*"Call for reforms after Storm Financial collapse"*

"THE nation's corporate watchdog has rejected criticism that it should have intervened before Storm Financial collapsed.

The Australian Securities & Investments Commission also rejected claims it should and done more to protect about 3000 investors who lost their life savings."

More by Anthony Marx from the Herald Sun is here;


http://www.news.com.au/heraldsun/story/0,21985,25943459-664,00.html


----------



## Solly (18 August 2009)

*"ASIC denies it 'gagged' Storm"*

"THE corporate regulator has rejected claims by burned Storm Financial clients that it ''gagged'' the financial planning outfit in the weeks leading up to Storm's demise, and that it failed to properly act on warnings about the Queensland-based entity."

More by Ruth Williams in The Age is here;

http://business.theage.com.au/business/asic-denies-it-gagged-storm-20090817-enrf.html


----------



## Solly (18 August 2009)

*"CBA hunting wrong heads: Storm"*

"Commonwealth Bank of Australia's crackdown on its Queensland staff continues with the departure of another senior state manager. A junior manager who worked at the bank's Aitkenvale regional office, linked to collapsed adviser Storm Financial, is also facing disciplinary action."

Read more by Duncan Hughes on page 20 in the The Australian Financial Review of 18/8/09.


----------



## Solly (18 August 2009)

*Transcript of the Alan Kohler interview with Ralph Norris on ABC's Inside Business from 16/8/09.*

http://www.abc.net.au/insidebusiness/content/2009/s2657211.htm

(Also with embedded Vodcast of the interview)


----------



## Solly (18 August 2009)

*"Hope rises for Storm casualties"*

"THE last time Rockhampton victims of failed investment group Storm Financial gathered for a public meeting they were fighting for the hope of a future.

Last night more than 100 local victims were told they had reason for hope."

Read more by Kieran Campbell in The Morning Bulletin here; 

http://www.themorningbulletin.com.au/story/2009/08/18/hope-rises-for-storm-casualties/


----------



## chrisgee (18 August 2009)

Solly said:


> *"CBA hunting wrong heads: Storm"*
> 
> "Commonwealth Bank of Australia's crackdown on its Queensland staff continues with the departure of another senior state manager. A junior manager who worked at the bank's Aitkenvale regional office, linked to collapsed adviser Storm Financial, is also facing disciplinary action."
> 
> Read more by Duncan Hughes on page 20 in the The Australian Financial Review of 18/8/09.




gee i will go get the paper to have a read of this-so theres been some more movement inside the bank- i wonder what the real story is i really hope it now comes out- hey bunyip i agree that the stormies need to take some responsibilty but its really damn hard living through all of this-the pressure gets damn hard sometimes and you feel like packing up and shooting through-but one thing i can promise this like black duck aint going anywhere until this whole damn thing is over and thoise that have buggered up fix what they have done-so my message today is dig in and fight until we get this sorted-and dont give a toss what anyone else says or thinks-no matter who they are- ive still got a fire in my guts about all of this and nothings going to put it out-


----------



## bunyip (18 August 2009)

chrisgee said:


> gee i will go get the paper to have a read of this-so theres been some more movement inside the bank- i wonder what the real story is i really hope it now comes out- hey bunyip i agree that the stormies need to take some responsibilty but its really damn hard living through all of this-the pressure gets damn hard sometimes and you feel like packing up and shooting through-but one thing i can promise this like black duck aint going anywhere until this whole damn thing is over and thoise that have buggered up fix what they have done-so my message today is dig in and fight until we get this sorted-and dont give a toss what anyone else says or thinks-no matter who they are- ive still got a fire in my guts about all of this and nothings going to put it out-




Good on you Chris. Yeh, I know it's hard for you folks who got stormified. It's good that you and a handful of others on this thread are admitting your part of the responsibility...it takes character to do that.
Hang in there mate and keep the fire in the belly - you'll come through this OK I'm sure.
And if you're ever going to have another crack at the stock market, make sure you first read Stan Weinstein's book -_ 'Secrets For Profiting In Bull And Bear Markets'. _
If you read that book and implement the strategies it suggests, you'll have more knowledge and ability than 90% of people who play the market.
Any investor who read Weinstein would never have gone near Storm or any other Financial Planner - they would have had the ability to take charge of their own investments.
Not only that, but they would have known how to recognise when it was time to vacate the market before the crash really set in.

I mentioned this book early in this thread. It costs 30 - 40 dollars and can be found on the shelves of most bookshops. 
I wonder how many Stormers went out and bought it - my guess is very few.


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## darkside (18 August 2009)

bunyip said:


> Read Stan Weinstein's book - 'Secrets For Profiting In Bull And Bear Markets'.
> If you read that book and implement the strategies it suggests, you'll have more knowledge and ability than 90% of people who play the market.
> Any investor who read that book would never have gone near Storm or any other Financial Planner - they would have had the ability to take charge of their own investments.
> Not only that, but they would have known how to recognise when it was time to vacate the market before the crash really set in.




Fantastic advice, i read the book after Julia put me onto it, and it so opened my eyes. I quantified his do's and don'ts, wrote some software from it, let the programme choose my stock and my profits have gone up immensly. It's taken away the element of gambling and changed it to trading with purpose. Top advice Bunyip .


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## bunyip (18 August 2009)

darkside said:


> Fantastic advice, i read the book after Julia put me onto it, and it so opened my eyes. I quantified his do's and don'ts, wrote some software from it, let the programme choose my stock and my profits have gone up immensly. It's taken away the element of gambling and changed it to trading with purpose. Top advice Bunyip .




It was me who put Julia on to it. I'm sure she'll correct me if I'm wrong, but I believe the knowledge Julia gained from Stan Weinstein's book was instrumental in getting her out of the market somewhere near the top.

Early in this thread I told of a relative of mine who borrowed a pile of money to sink into the market through a Financial Planner. She was sitting on 100% profit when my knowledge of Weinstein's methodology told me the market had run out of steam.
I advised her to cash out at least half her investment. Her FP told her not to.
A little later when I felt certain the bull market was finished, I told her to quit her entire investment. Her FP told her not to.
In both cases she took the advice of her Financial planner and ignored mine.
She paid a heavy price as the market crashed and changed her 100% gain into a heavy loss.

Stormers would have saved themselves a lot of grief if they'd known and implemented the strategies of Stan the Man.


----------



## DocK (18 August 2009)

Thanks for the book rec - have ordered it from the library.  I'm one ex-Storm client who has been busy reading and self-educating.  So far have read and mostly digested _Smart Trading Plans (Justine Pollard), Active Investing (Alan Hull) Trading in a Nutshell (Nick Radge) Charting for Dummies (various) Candelstick Charting (can't remember author)_and am currently trying to understand _Predicting any Market (Jeff Greeblatt)_ but finding it very heavy going - a bit over my head I think.  

Riding an uptrend and exiting once the trend ends seems to be the common theme - and has been working for me so far.  Fine tuning the conditions for entry and exit is a work in progress - there seem to be a thousand ways to "skin a cat" and I'm finding it difficult to settle on one method.  

A common theme in just about every book I've read is the importance of risk and money management, position sizing, diversification and stop-losses.  I've read those chapters a number of times   I've even considered actually buying a book and posting it to a certain person in Belmont as his attitude was obviously:

risk and money management = let my clients take all the risk and I'll manage the money I make off them

position sizing = getting my clients to take the largest investment position the banks and I can squeeze out of them

diversification = actually still think an index fund following asx 200 gives good diversification, and

stop losses = what's that?  

I would obviously be better off today if I had started my financial education prior to walking into a Storm office - but I foolishly used to believe that professionals could be trusted to behave in a professional way, and that my bank and my financial planner had their client's interests at heart   I'm now older, broker and wiser - but unfortunately also cynical, suspicious, doubting and still a little bit bitter and twisted  I'm finding the hardest part of getting back into investing is that the confidence to decide on a strategy and stick to it is still lacking.  Second guessing not only everyone else, but also myself, is a legacy of having been a "stormer", and one that will take some time to get over I think.  Ah well, at least now if I lose the lot it will be all my own fault and nobody elses


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## darkside (18 August 2009)

Bunyip , i hope Julia knows your riding her "coat tails" on this book , KIDDING , it is a great read and should just about be mandatory before your allowed to trade. It certianly would have prevented the whole "storm" Sh1tf1ght.


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## carey ramm (18 August 2009)

*Good News For ANZ Storm Clients*



> At no time did ANZ have a formal relationship with Storm. However, ANZ has currently identified around 160 of our customers who may have borrowed from ANZ to invest through Storm Financial. Following the review of the 160 customer files, we have determined that the lending decisions for a small number of customers did not comply with ANZ’s credit policies and we are undertaking further review to assess whether others could also be in that group.
> We are in the process of contacting those customers who we have identified in our review where our lending policies were not followed correctly. Where it is established that there has been non-compliance with ANZ policies and procedures in lending to these customers we will ensure they are treated appropriately and fairly. Our approach will include assessing financial hardship on a case-by-case basis having regard to their individual circumstances and rectifying financial detriment that resulted directly from any action on ANZ’s part.




Starting to gather momentum it would seem.


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## bunyip (18 August 2009)

DocK said:


> Thanks for the book rec - have ordered it from the library.  I'm one ex-Storm client who has been busy reading and self-educating.  So far have read and mostly digested _Smart Trading Plans (Justine Pollard), Active Investing (Alan Hull) Trading in a Nutshell (Nick Radge) Charting for Dummies (various) Candelstick Charting (can't remember author)_and am currently trying to understand _Predicting any Market (Jeff Greeblatt)_ but finding it very heavy going - a bit over my head I think.
> 
> Riding an uptrend and exiting once the trend ends seems to be the common theme - and has been working for me so far.  Fine tuning the conditions for entry and exit is a work in progress - there seem to be a thousand ways to "skin a cat" and I'm finding it difficult to settle on one method.
> 
> ...





Alan Hull is another whose methods I rate highly. In many respects his investment strategies are similar to Weinstein's.

Alan used to (and possibly still does) run a subscription service which included a weekly newsletter identifying the strongest sectors and the most promising stocks in those sectors.
And in a bear market he finds the best shorting candidates by identifying the weakest sectors and the weakest stocks in those sectors.
I knew a couple of blokes who used his newsletter and swore by it.

An interesting thing about Hull's and Weinstein's approaches is that neither of them diversify by holding stocks across a wide range of industries. Some investors might see this as a risky move, but in reality it makes plenty of sense. Zero in on the strongest sectors and focus on the strong stocks in those sectors. Once that sector runs out of steam, find the next sectors that are on fire. 
Far from being a risky strategy, it maximises portfolio performance by investing always in the outperformers. The risk aspect is controlled by prudent position sizing and stop losses. Once a stock stops outperforming, you get rid of it and find another outperformer to replace it.

Diversification sounds good in theory, but it can be a two-edged sword. The downside of diversification is that it puts some of your funds into non-performing stocks - these funds can be more gainfully employed in strongly performing stocks.
Bear in mind that we're not talking about a 'hold forever' approach here....the idea is that you hold them only while they perform. They stop performing, you get rid of them.
But constantly culling non performers and keeping strong performers in your portfolio, you end up with a portfolio of strongly performing stocks that maximise your returns.


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## maccka (18 August 2009)

carey ramm said:


> *Good News For ANZ Storm Clients*
> 
> 
> 
> Starting to gather momentum it would seem.




Hi Carey,

Where is this quoted from please?

Cheers
maccka


----------



## Solly (18 August 2009)

*"In the wake of the Storm"*

"ANOTHER Commonwealth Bank staffer is believed to have left the bank in the wake of the Storm Financial collapse."

More by Tony Raggatt in the Townsville Bulletin is here;

http://www.townsvillebulletin.com.au/article/2009/08/18/72205_hpnews.html


----------



## Steve Borden (18 August 2009)

maccka said:


> Hi Carey,
> 
> Where is this quoted from please?
> 
> ...




It's from their submission to the enquiry (number 379) on page 3 of 129.


----------



## Solly (18 August 2009)

maccka said:


> Hi Carey,
> 
> Where is this quoted from please?
> 
> ...




maccka, looks like Carey is off line, the quote is from page 3 of the ANZ's submission to the inquiry, # 379.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub379.pdf


----------



## Solly (18 August 2009)

Steve Borden said:


> It's from their submission to the enquiry (number 379) on page 3 of 129.




Steve..great minds think alike..


----------



## Steve Borden (18 August 2009)

Solly said:


> Steve..great minds think alike..




Solly, the sad thing is I would have posted it about 10 minutes earlier if I could work out how to add the link

By the way you are doing a great job keeping us informed, thank you.


----------



## Solly (19 August 2009)

*"ANZ admits Storm breach"*

"The ANZ has joined the Commonwealth Bank in admitting that its lending to clients of the collapsed Storm Financial breached its own policies."

More by Jacob Saulwick in the SMH is here;

http://business.smh.com.au/business/anz-admits-storm-breach-20090818-ep34.html


----------



## Solly (19 August 2009)

*"Our customers can be assured that, where we have done wrong, we will put it right," Mr Norris said.*

More here by Richard Gluyas in The Australian;

http://www.theaustralian.news.com.au/business/story/0,28124,25949447-36418,00.html


----------



## Solly (19 August 2009)

*"It's a minor point that while CBA has had a public mea culpa or two of its Storm dirty linen, ASIC is yet to put up its hand to admit its own massive failure."*

Read more by Michael Pascoe in the article "ASIC sniffs the wind" in the SMH Business Day here;

http://business.smh.com.au/business/asic-sniffs-the-wind-20090818-eocd.html


----------



## Solly (19 August 2009)

*"ASIC defends role in Storm Financial collapse"*

"AUSTRALIA'S corporate watchdog has defended its role in dealing with the collapse of advisory firm Storm Financial."

More by Paul Osborne from AAP on NEWS.com.au here;

http://www.news.com.au/story/0,27574,25947140-29277,00.html


----------



## cuttlefish (19 August 2009)

ASIC is a joke.


----------



## abagnale (19 August 2009)

Solly said:


> *"ASIC defends role in Storm Financial collapse"*
> 
> "AUSTRALIA'S corporate watchdog has defended its role in dealing with the collapse of advisory firm Storm Financial."
> 
> ...




I am still having an issue trying to work out the complex interconnections between all the parties in this saga. I cannot understand how the CBA & Storm came to such a bitter falling out. I would have thought that in business you do all you can to ensure any problems you are having are kept behind closed doors and you negotiate a mutually beneficial resolution. And you do everythiing possible to enure your brand is unsoiled in the public arena. 
To an outsider the whole debacle looks very sloppy.  
Maybe everbody needed Big Max brought in earlier.


----------



## donteventryit (19 August 2009)

abagnale said:


> Maybe everbody needed Big Max brought in earlier.




Serious question here abagnale, but why Big Max?


----------



## abagnale (19 August 2009)

donteventryit said:


> Serious question here abagnale, but why Big Max?




I don't know Big Max from a bar of soap but I'm impressed with his directness in his answers and his manner. Maybe if some heads were knocked together earlier a better quicker resolution may have eventuated. Just IMHO.


----------



## bunyip (19 August 2009)

abagnale said:


> I am still having an issue trying to work out the complex interconnections between all the parties in this saga. I cannot understand how the CBA & Storm came to such a bitter falling out. I would have thought that in business you do all you can to ensure any problems you are having are kept behind closed doors and you negotiate a mutually beneficial resolution. And you do everythiing possible to enure your brand is unsoiled in the public arena.
> To an outsider the whole debacle looks very sloppy.
> Maybe everbody needed Big Max brought in earlier.




How did Storm and CBA have such a bitter falling out? 
Simple.....Storm believed their cosy relationship with the banks, particularly with CBA, would ensure favourable treatment for Storm clients when the market ran into trouble.  
My understanding is that Cassamatis tried to broker a deal with CBA to go easy on Storm clients, carry them through until market conditions improved, cut them a bit of slack by not selling them down. 
The banks, understandably, were not having a bar of it - they had very large sums of money riding on these Storm clients, and the plunging market put those funds at risk of catastrophic loss if they didn't act quickly.
From the banks perspective it was a case of _'To hell with cosy relationships - the plunging market means our money lent to Storm clients is at significant risk  and we have to act quickly if we're to avoid disaster'._

The simple fact is this....stock market investment is extremely risky unless you have risk management measures in place. Lending for stocks carries particular risks for banks. Why? - because companies sometimes go broke and the stock price falls to zero. Once a company goes out of business it ceases to exist. Therefore its stocks also cease to exist.

Compare this to real estate.....no matter how low house prices fall, a house never goes broke or ceases to exist. Inflation and ever-tightening land supplies ensure that  house and land prices rise over time. 
Building costs rise almost constantly....it'd be impossible to find a builder who would quote you the same price per square metre today as he was quoting 10 years ago. 
It'd be close to impossible to find a block of land that isn't worth more today than it was worth 5 or 10 years ago.
For these reasons, real estate is correctly regarded as a far safer investment than stocks.
Knowing this, banks take a very different attitude between lending for real estate and lending for stock market investment. 
Banks address the additional risk of lending for stocks by putting in place safety nets such as margin calls.
If you're a real estate investor with borrowed funds, the banks are not going to sell you up if the value of your real estate assets comes under a bit of pressure. Why would they?...they have a mortgage over your assets and they know that long term, real estate values will rise.
Different story with margin loans for stocks...the stock market starts to seriously slide,  banks won't hesitate to make margin calls, or sell people down if margin calls are not met. Can we blame them? They know that stocks can decline to zero and they could lose their entire loan if they don't take swift action to address the problem.

I know, I know....many Storm clients say they were sold down without ever receiving a margin call. My guess is that a margin call was made, but it just wasn't passed on to you because of a communication breakdown somewhere along the line. The banks say it was Storm's responsibility to keep clients advised of margin calls, since Storm was acting on behalf of clients. Storm says it was the banks responsibility to advise clients when they were in margin call.
Hopefully the truth will come out in coming months as the inquiry gets underway.


----------



## Steve Borden (19 August 2009)

abagnale said:


> I am still having an issue trying to work out the complex interconnections between all the parties in this saga. I cannot understand how the CBA & Storm came to such a bitter falling out. I would have thought that in business you do all you can to ensure any problems you are having are kept behind closed doors and you negotiate a mutually beneficial resolution. And you do everythiing possible to enure your brand is unsoiled in the public arena.
> To an outsider the whole debacle looks very sloppy.
> Maybe everbody needed Big Max brought in earlier.




The best (?) analogy I can draw is a once loving relationship that ends in a bitter divorce. Ego, blame, arrogance takes over and reason gets left behind to the extent they start fighting over the children, the furniture and the gold fish.

When it gets to that stage it's very hard re-establish logical discussion.

In the CBA/Storm divorce case though neither party apparently wanted custody.


----------



## DocK (19 August 2009)

Alan Kohler's commentary in _Business Spectator_ regarding ASIC's new stance on commission-based financial advice makes good reading imo

http://www.businessspectator.com.au/bs.nsf/Article/Ban-pd20090819-V2SMZ?OpenDocument&src=mp

I think the idea of charging a fixed fee, payable over a set period, would lead to more "ordinary people" having faith in the value of advice, which would likely also lead to more people being prepared to pay for a financial plan in the long run.  Given that the advice would not be commission-based, and therefore have no bearing on the reward to the adviser, it would be far more likely to include strategies that encompassed property investment, bond or fixed-interest holdings as well as share/managed fund portfolios, and would likely be far more balanced in favour of the investor than the advice handed out by the majority of advisers these days - which is naturally skewed towards products that return a commission.  

Now if only someone could convince the govt that the cost of having a financial plan prepared could be tax deductable straight up.


----------



## Judd (19 August 2009)

> How did Storm and CBA have such a bitter falling out?
> Simple.....Storm believed their cosy relationship with the banks, particularly with CBA, would ensure favourable treatment for Storm clients when the market ran into trouble



.

Don't forget, bunyip, that the CBA also called in the commercial loans on Storm the business.  Usually, that only happens when a bank is not confident that the business is viable, ie will not be able to pay the interest on the loan let alone repaying the loan itself.   And once a commercial loan has been handed over to the credit department look out because those boys and girls don't even love their mothers let alone a business proprietor whose business has gone sour.


----------



## Judd (19 August 2009)

DocK said:


> Alan Kohler's commentary in _Business Spectator_ regarding ASIC's new stance on commission-based financial advice makes good reading imo
> 
> http://www.businessspectator.com.au/bs.nsf/Article/Ban-pd20090819-V2SMZ?OpenDocument&src=mp
> 
> ...




DocK, asset allocation is something that you can do yourself without the assistance of a financial planner.  You just sit down and think "Of my funds how comfortable am I with 25% (or whatever) in international shares/bonds, 60% local shares/bonds/property (apart from your own home), 15% cash/term deposits."  It is not about what a planner thinks, they are not you so they do not really know how or what you think.  It is about how comfortable you are with any investment.

I'd rather planners acted in the form of mentors.  People to bounce an idea off before taking action but having absolutely nothing to do with the actual investing process.  Only invest in your name over your own signature at your address and with your own broker.

The other role I'd would like to see for planners is advice on tax effective investing but again no role in implementing those investments and estate planning.

Then you could throw SoAs, FSR Act and all that other crap where it belongs - down the toilet.


----------



## avagood4 (19 August 2009)

Judd said:


> I'd rather planners acted in the form of mentors.  People to bounce an idea off before taking action but having absolutely nothing to do with the actual investing process.  Only invest in your name over your own signature at your address and with your own broker.
> 
> The other role I'd would like to see for planners is advice on tax effective investing but again no role in implementing those investments and estate planning.
> 
> Then you could throw SoAs, FSR Act and all that other crap where it belongs - down the toilet.




Judd,

This sounds like what an accountant did before this FSR Act was enacted


----------



## DocK (19 August 2009)

And that's all well and good in theory - but what some of you don't seem able to grasp is that not every Australian in need of financial guidance is capable of managing their own affairs - for various reasons, but lack of knowledge would be the main one.  How do you bounce ideas off a mentor if you simply don't have any ideas to start with?  I know it _should_be possible for all of us to run our own investments - but some folk simply lack the intellect and/or ability/confidence/whatever.  I've nothing but respect for those of you who have spent years handling your own financial decisions - but not everyone has that ability.  Some people would definitey be better off if *never* allowed to make their own decisions.  Part of paying for a plan would involve being educated about the myriad choices that exist.  Sometimes it pays to have someone point out to you what it is that you don't know.  Young people's financial direction could be altered drastically by sitting down and discussing with a qualified planner what their goals and financial aspirations are, and learnng the options available to acheive them.  In an ideal situation parents/schools provide basic info re budgeting, saving, etc - but we all know this doesn't always happen in the real world.


----------



## bunyip (19 August 2009)

Judd said:


> .
> 
> Don't forget, bunyip, that the CBA also called in the commercial loans on Storm the business.  Usually, that only happens when a bank is not confident that the business is viable, ie will not be able to pay the interest on the loan let alone repaying the loan itself.   And once a commercial loan has been handed over to the credit department look out because those boys and girls don't even love their mothers let alone a business proprietor whose business has gone sour.




Yeh, the CBA lowered the boom on the Cassamatis outfit when they saw that Storm's cash cow had died.
It must have been a sinking feeling for Cassamatis to realise that very few new clients were coming through the door and very few existing clients were taking out additional loans, therefore Storm no longer had the opportunity of milking 7% from millions of dollars worth of new investment each month.
No wonder the unscrupulous bastards grabbed 2 million dollars before the doors slammed closed on them.


----------



## Judd (19 August 2009)

DocK said:


> And that's all well and good in theory - but what some of you don't seem able to grasp is that not every Australian in need of financial guidance is capable of managing their own affairs - for various reasons, but lack of knowledge would be the main one.  How do you bounce ideas off a mentor if you simply don't have any ideas to start with?




You start by being interested and reading books, scouring the internet, joining the Australian Shareholders Association or Australian Investors Association and asking questions, such as on this site, until your bore other people totally sh!tless.




DocK said:


> I know it _should_be possible for all of us to run our own investments - but some folk simply lack the intellect and/or ability/confidence/whatever.  I've nothing but respect for those of you who have spent years handling your own financial decisions - but not everyone has that ability.




Yes they do.  Anyone with average intellect can manage their own financial affairs.  It is just having the confidence to do so but see my comment above.  However, they also need to be prepared to lose money sometimes (but not in the manner of Storm clients)




DocK said:


> Some people would definitey be better off if *never* allowed to make their own decisions.




Just like this lady:

http://www.timesonline.co.uk/tol/money/investment/article6796737.ece

And this is the jurisdiction whose financial advisory model ASIC suggests be adopted in this country.  There are always and always will be rogues.  When will politicians and people in this great country get it through their thick heads that no amount of legislation and education will stop crooks who will prey on people enticing them to do stupid things.



> You do not need a qualification in financial planning to realise that a complex and risky stock market investment is probably not appropriate for a woman in her eighties. Having no financial qualifications, however, did not stop a salesman from St James’s Place, the wealth manager, from persuading Benitia Middleton, 80, to move £216,000, the majority of her life savings, from cash into a risky investment bond.
> 
> By the time Mrs Middleton’s children found out about, and sold, the investment, she had made a real-terms loss of several thousand pounds. Had Mrs Middleton left her £216,000 in cash, she would have been about £70,000 better off. The St James’s Place salesman, meanwhile, pocketed about £12,000 commission on the deal.






DocK said:


> Part of paying for a plan would involve being educated about the myriad choices that exist.  Sometimes it pays to have someone point out to you what it is that you don't know.




Only if you wish to complicate things.  Do you really wish to know about puts, calls, collars, CFDs, alpha, beta, vega?  If you don't , then don't and leave them alone.  I am more than happy to leave them alone and muddle along in my own simple way as I live my simple life.  And bugger the rest.



DocK said:


> Young people's financial direction could be altered drastically by sitting down and discussing with a qualified planner what their goals and financial aspirations are, and learnng the options available to acheive them.  In an ideal situation parents/schools provide basic info re budgeting, saving, etc - but we all know this doesn't always happen in the real world.




Generally, they take no notice of us now, as we took no notice of our parents, so why should they take notice about finances?  Sitting down and talking or thinking things through does not have the immediacy that quite a number young people crave and want.  And taking away the ability to make mistakes takes away the element of leaning that not everything is safe.

As for introducing it to schools, pleeeeease no more loading of the already overloaded curriculum.  Half the blighters cannot even spell let alone write and as for the level of numeracy, forget it.  Universities are having to do remedial courses to get some of their students to be able to write fluently, so it would be better if these worthy institutions of higher learning concentrated on the basics, knwn as the three R's.  Oh, the horror of it all.

Anyway, where are these wonderful financially literate teachers to come from?  It is distinctly possible given their demographics they they are in debt to their collective eyeballs and would not even know how to balance an account let alone the ins and outs of a general ledger.


----------



## DocK (19 August 2009)

Judd said:


> You start by being interested and reading books, scouring the internet, joining the Australian Shareholders Association or Australian Investors Association and asking questions, such as on this site, until your bore other people totally sh!tless.




I'm sorry to have bored you.   Criticised for not educating myself, and now criticised for doing so????  Won't bore you further after this post.





> Yes they do.  Anyone with average intellect can manage their own financial affairs.  It is just having the confidence to do so but see my comment above.  However, they also need to be prepared to lose money sometimes (but not in the manner of Storm clients)




Not everyone has average intellect, and some need help.  Should those who struggle to understand all things financial make no effort to secure their futures?





> Only if you wish to complicate things.  Do you really wish to know about puts, calls, collars, CFDs, alpha, beta, vega?  If you don't , then don't and leave them alone.  I am more than happy to leave them alone and muddle along in my own simple way as I live my simple life.  And bugger the rest.




Yes, I want to know anything that can help me be more effective, efficient, and hopefully profitable.  I want to know if the way I'm muddling along is the best way for me, and my tax situation etc. 




> Generally, they take no notice of us now, as we took no notice of our parents, so why should they take notice about finances?  Sitting down and talking or thinking things through does not have the immediacy that quite a number young people crave and want.  And taking away the ability to make mistakes takes away the element of leaning that not everything is safe.
> 
> As for introducing it to schools, pleeeeease no more loading of the already overloaded curriculum.  Half the blighters cannot even spell let alone write and as for the level of numeracy, forget it.  Universities are having to do remedial courses to get some of their students to be able to write fluently, so it would be better if these worthy institutions of higher learning concentrated on the basics, knwn as the three R's.  Oh, the horror of it all.
> 
> Anyway, where are these wonderful financially literate teachers to come from?  It is distinctly possible given their demographics they they are in debt to their collective eyeballs and would not even know how to balance an account let alone the ins and outs of a general ledger.




You have quite a dim view of our country's young people, haven't you?  Yes, literacy and numeracy skills are an issue with some, but I believe there are also a lot of intelligent kids in their 20's who don't necessarily want an instant fix, but could use a few tips to help them into their first homes, businesses or whatever their dreams are.


----------



## Judd (19 August 2009)

Suit yourself DocK.  I express my views and you express yours, as is your right.  If you don't like my views, so be it.  I'll survive that trauma.


----------



## Solly (20 August 2009)

*"BoQ faces test case over Storm"*

"THE Bank of Queensland is being sued for almost $400,000 in losses and damages in the first legal action linked to the collapse of Storm Financial."

More by Stuart Washingtonn in The Age here;

http://business.theage.com.au/business/boq-faces-test-case-over-storm-20090819-eqna.html


----------



## Solly (20 August 2009)

*"ANZ Bank admits 160 customers were Storm investors"*

"THE ANZ Bank has done a backflip and acknowledged that it has exposure to the Storm Financial collapse."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,25955118-3122,00.html


----------



## Solly (20 August 2009)

*"ANZ calls for professionalisation of planning"*

"The ANZ Banking Group has admitted elements of failure in its dealings with Opes Prime and Storm Financial at the same time as calling for the greater professionalisation of the financial planning industry."

More by Mike Taylor in Money Management here;

http://www.moneymanagement.com.au/article/ANZ-calls-for-professionalisation-of-planning/494884.aspx


----------



## Solly (20 August 2009)

*"Bank to be hit with writ over Storm"*

"Bank of Queensland will today be served with a writ by a former investor in collapsed adviser Storm Financial after it failed to respond to demands for a negotiated settlement."

Read more in The Australian Financial Review of Thursday, 20 August 2009 by Duncan Hughes


----------



## Solly (20 August 2009)

*"ANZ makes admission on Storm"*

"Australia and New Zealand Banking Group has followed the Commonwealth Bank of Australia and admitted its lending practices to clients of collapsed adviser Storm Financial could have contributed to investor losses, which are estimated to have topped $3 billion."

Read more in the The Australian Financial Review of Wednesday, 19 August 2009 by Duncan Hughes.


----------



## Solly (20 August 2009)

*"BoQ faces Storm test"*

"LAWYERS will launch legal action alleging unconscionable conduct against one of the key lenders in the Storm Financial debacle today, a meeting of more than 500 investors in the failed wealth advisor was told last night."

Also it is also reported;

_S&G to chase Storm's $25 million public indemnity insurance
Director's insurance may be voided
Directors & Auditors to be pursued _

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/08/20/72935_hpnews.html


----------



## abagnale (20 August 2009)

Solly said:


> *"BoQ faces Storm test"*
> 
> "LAWYERS will launch legal action alleging unconscionable conduct against one of the key lenders in the Storm Financial debacle today, a meeting of more than 500 investors in the failed wealth advisor was told last night."
> 
> ...




This was my point in a previous post about having systems in place to check compliance. I trust any allegations of fraud as mentioned in the article are being fully investigated. The last paragraph describing the ex-clients state and disposition is quite disturbing.
Seems a very hard way to get a fiscal education. Best of luck Stormies.


----------



## Ironhalo (20 August 2009)

Interesting comments about the stashes of money these guys may have hidden...Bali? Jewelery?

Good to see they are keeping the pressure on, I can't wait to see 'Casa Belmont' sold for a song, and Cassimatis in the dole queue.


----------



## bunyip (20 August 2009)

Ironhalo said:


> Interesting comments about the stashes of money these guys may have hidden...Bali? Jewelery?
> 
> Good to see they are keeping the pressure on, I can't wait to see 'Casa Belmont' sold for a song, and Cassimatis in the dole queue.




Interesting, yes, but a low act on the part of Damian Scattini to publicly spread  rumours about Cassamatis having stashes in Bali and buried in the backyard. 
Very unprofessional conduct from Scattini that does him no credit at all.


As for Cassamatis in the dole queue, I wouldn't be holding my breath. 
Asset protection is a growth industry - I'd be surprised if Cassamatis doesn't have a nice little trust set up where he's been shovelling assets that are untouchable because they're not in his name. 
I remember similar 'dole queue' comments when Bondy went broke. The reality was that the 'broke' Alan Bond was worth millions of dollars that had been siphoned off into various untouchable entities. Untouchable, that is, by the authorities and the liquidators and the general public, but not untouchable by Bond himself.
Oh no...Bondy was a smart man who had it all figured out and had taken steps to protect many millions of his dollars. Bond ending up in the dole queue was about as likely as me ending up in Canberra as Prime Minister.
My guess is that it won't be any different with Cassamatis.....there's no chance of seeing him in a dole queue. More's the pity.


----------



## Ironhalo (20 August 2009)

Yeah too right mate.

We all know it's not going to happen, but wishful thinking....


----------



## Mash (20 August 2009)

Yes Bondi and co. may have syphoned his assets off to the relations... manny and julie both directors....   hopefully all assets in one or the other's name (JC of Belmont may not get to keep all of her most cherished and paid for twice posessions .....LOL)..... getting narky....may both of them rot in hell!!!!... I can but dream..... for if I can not dream then only the nightmares will prevail!!!
between the administrators... ASIC and the inquiry..let's hope justice will prevail...and for all you nay sayers.... I don't care what you say 'cause way back in the beginning you said this would all come to nothing..... How wrong you were!!!!!!.
WE WILL FINISH STRONG!!!!!
Oh and BTW.... ANZ now admitting fault!!!!!!...lol...lol....lol...told ya so!!!!!!!!!!
Yeah I know childish.... but don't care... she who laughs last.... laughs loudest!!!!!!
GOY'self.....


----------



## Julia (20 August 2009)

DocK said:


> And that's all well and good in theory - but what some of you don't seem able to grasp is that not every Australian in need of financial guidance is capable of managing their own affairs - for various reasons, but lack of knowledge would be the main one.  How do you bounce ideas off a mentor if you simply don't have any ideas to start with?  I know it _should_be possible for all of us to run our own investments - but some folk simply lack the intellect and/or ability/confidence/whatever.  I've nothing but respect for those of you who have spent years handling your own financial decisions - but not everyone has that ability.  Some people would definitey be better off if *never* allowed to make their own decisions.  Part of paying for a plan would involve being educated about the myriad choices that exist.  Sometimes it pays to have someone point out to you what it is that you don't know.  Young people's financial direction could be altered drastically by sitting down and discussing with a qualified planner what their goals and financial aspirations are, and learnng the options available to acheive them.  In an ideal situation parents/schools provide basic info re budgeting, saving, etc - but we all know this doesn't always happen in the real world.



Those are reasonable comments.   I have several friends who are very intelligent, all tertiary educated, successful in their own career fields, but woefully ignorant about financial matters.   I don't really know why this is, but my attempts to interest them in putting their money to work is met with "oh yes, I know you're right.  I should be doing something, but I'm afraid of the share market".  

There is some work being done in the schools re financial education, at least via a friend who is an accountancy teacher in our local high school.  It's not part of the curriculum and she devised her own series of workshops on bank accounts, good and bad debt, budgeting etc.

I'm on the board of a youth shelter which accommodates usually around 20 young people, aged 16 - 20, who can't live at home for various reasons.
We offered them the option of budgeting/financial management and only two indicated even vague interest.  These kids would have had no positive modelling from their parents and this is where the problem begins.



[


----------



## Solly (21 August 2009)

*"Storm Financial taken to court by retired school teacher"*

"A RETIRED Townsville school teacher in poor health is the first devastated investor to file a suit after the demise of advisory firm Storm Financial."

More by Anthony Marx in The Courier Mail is here;

http://www.news.com.au/couriermail/story/0,23739,25958136-3122,00.html


----------



## Solly (21 August 2009)

A submission of interest to the 

Inquiry into Financial Products and Services in Australia

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub375.pdf


----------



## Solly (21 August 2009)

*"Hope for Storm Financial victims"*

"OUT of pocket Storm Financial investors heard last night they may have some hope of retrieving money from the banks that pulled the plug on the failed investment firm."

More by Roger Dickinson in cairns.com.au;

http://www.cairns.com.au/article/2009/08/21/59631_local-news.html


----------



## Solly (21 August 2009)

*"National network gives Slater & Gordon 12.9pc boost"*

"Listed law firm Slater & Gordon has reported another bumper year of financial results, buoyed by its continued diversification away from personal injury claims to major litigation involving pharmaceutical giant Merck, Centro Properties Group, Storm Financial and Opes Prime."

Read more by Alex Boxsell in The Australian Financial Review of Friday, 21 August 2009.


----------



## Solly (21 August 2009)

*"BoQ finally owns up to Storm risks"*

"Bank of Queensland has publicly admitted for the first time that it faces financial, reputational and regulatory risks arising from its involvement with Storm Financial, the Queensland-based financial adviser that collapsed with losses estimated at about $3 billion."

Read more by Duncan Hughes in The Australian Financial Review of Friday, 21 August 2009.


----------



## Solly (21 August 2009)

*"BoQ will defend Storm test case"*

"THE Bank of Queensland says it will defend accusations of improper lending to a Townsville victim of the Storm Financial crisis as a test case for hundreds of similar claims was lodged in Brisbane's Supreme Court yesterday."

Read more by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/08/21/73125_hpnews.html


----------



## abagnale (21 August 2009)

bunyip said:


> Interesting, yes, but a low act on the part of Damian Scattini to publicly spread  rumours about Cassamatis having stashes in Bali and buried in the backyard.
> Very unprofessional conduct from Scattini that does him no credit at all.
> 
> 
> ...




I also found the comments from Mr Scattini a bit strange, I suppose a little theaterical posturing is good for his  clients. 
After reading and following this saga in the media for sometime I reckon that the total collapse came as an unexpected shock to the directors.
Let's hope everything comes out in the open about the real inputs and sequence of events that lead to this spectular crash.


----------



## Jifromoz (21 August 2009)

Hi Everyone, 
Have been lurking reading all of the submissions. Solly, you are doing a terrific job putting in the links for the enquiry and  news articles. Very much appreciated.

I have just noticed that BOQ have made the following announcement on the ASX today 

"*Statement from Bank of Queensland regarding claim filed by Slater &
Gordon 21 August 2009*
The Bank has received a claim in respect of a former BOQ customer and former client of Storm Financial.
The claim relates to a single loan and is not considered financially material to the Bank. As proceedings have been commenced, the Bank will seek advice and deal with the claim in the normal course."

A touch of arrogance I think.

I will watch closely how they handle this going forward. I think the blow torch may soon be turned up another level by those affected by this.


----------



## Solly (21 August 2009)

*"BoQ receives Storm Financial claim; shares plunge 5.3%"*

"Bank of Queensland Ltd (BOQ) shares plunged ....after the lender said it had received a claim from a former customer regarding failed Townsville financial firm Storm Financial."

More here in Business Speculator;

http://www.businessspectator.com.au/bs.nsf/Article/BOQ-receives-claim-regarding-Storm-Financial-pd20090821-V549S?OpenDocument


----------



## Trevor_S (21 August 2009)

Solly said:


> *"Storm Financial taken to court by retired school teacher"*
> 
> "A RETIRED Townsville school teacher in poor health is the first devastated investor to file a suit after the demise of advisory firm Storm Financial."




mmmm for someone professing an appetite for low risk 







> Ms Rubin also borrowed $602,000 in a margin loan from Macquarie Bank




her words and her actions don't quite add up ?


----------



## Solly (21 August 2009)

Jifromoz said:


> Hi Everyone,
> Have been lurking reading all of the submissions. Solly, you are doing a terrific job putting in the links for the enquiry and  news articles. Very much appreciated.




No prob Jifromoz, I understand that Stormers have a lot on their minds at the moment, I hope my posts make it a little easier to track what's happening.

I look forward to one day having a few celebratory drinks with those who have been through so much.  

I had another long talk with a Stormer tonight, until the battery on their Nokia gave up. It's great to hear an uplifted tone in their voice, the belief of some glimmer of hope on horizon. I know it's a hard slog, there have been some dark days in the past. But now things are starting to change and change rather quickly. There's now been a "tipping point", the tide is changing, opinion is turning, no longer are Stormers faceless unseen collateral damage in the posturing of the corporate players.

I posted this before and I'll say it again, don't accept a remedy to this event that is anything less than you deserve. Keep the fire in the belly, keep the kinetic energy and momentum up.

If you truly want a positive result never, never give in.
It doesn't matter what anyone else thinks, you are the most important person in the argument. Don't stop, falter, fold or capitulate.   

Pick your aim point, it's better to go in hard and solid, than to go in long and drift.


----------



## Julia (21 August 2009)

Trevor_S said:


> mmmm for someone professing an appetite for low risk
> 
> her words and her actions don't quite add up ?



I thought the same.  Ditto the stories of some of the other investors.

I do feel for those who appear not to have been advised they were in margin call (we have yet to be sure whose fault this was, but probably Storm, given many investors appear to have totally delegated all responsibilities to Storm on their behalf) and who could have fronted with the necessary cash.

But those who borrowed so massively on small incomes and inappropriate asset bases surely must have known they were taking a huge risk.


----------



## Garpal Gumnut (21 August 2009)

Julia said:


> I thought the same.  Ditto the stories of some of the other investors.
> 
> I do feel for those who appear not to have been advised they were in margin call (we have yet to be sure whose fault this was, but probably Storm, given many investors appear to have totally delegated all responsibilities to Storm on their behalf) and who could have fronted with the necessary cash.
> 
> But those who borrowed so massively on small incomes and inappropriate asset bases surely must have known they were taking a huge risk.




I agree Julia,

Its an inescapable fact that folly and a blind belief in the bull market, fed by the Cassimatis model, contributed to bad money management decisions by Storm investors.

gg


----------



## Solly (22 August 2009)

Solly said:


> *"Storm Financial taken to court by retired school teacher"*
> 
> "A RETIRED Townsville school teacher in poor health is the first devastated investor to file a suit after the demise of advisory firm Storm Financial."
> 
> ...





Here's the direct link to Ms Rubin's submission to the Inquiry mentioned in the article.


http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub125.pdf


----------



## Judd (22 August 2009)

All of the submissions from Storm clients make for very sad reading.  The whole saga is sad.

A couple of things come through to me in these submissions:



there seems to be some fixation with being a self funded retiree (what does it matter where retirement income comes from.  What is so dishonourable about receiving Government assistance.  That's why I pay tax);

the wish to get off the Age Pension (if you haven't built up income producing assets before you retire, it's too late);

the desire to leave an inheritance (blowed if I know how that would have been remotely feasible with all the debt hanging over the Estate.  Anyway the kids names are not on the title deed to your home and they never paid a cent towards paying off the mortgage or building up your assets, so what gives them the right to your assets?); and

many suggestions that there be more regulations and rules and regulations and rules, and so forth (Well, it is going to cost you and as a result you probably wont be able to afford detailed advice.  In any event you cannot legislation for ethics and the lack of them is the essential issue which got many people into trouble in the first place.)


----------



## shibby (22 August 2009)

Julia said:


> I thought the same.  Ditto the stories of some of the other investors
> *But those who borrowed so massively on small incomes and inappropriate asset bases surely must have known they were taking a huge risk.*




We were lied to, what is so hard to understand about that.

*Those are reasonable comments. I have several friends who are very intelligent, all tertiary educated, successful in their own career fields, but woefully ignorant about financial matters. I don't really know why this is, but my attempts to interest them in putting their money to work is met with "oh yes, I know you're right. I should be doing something, but I'm afraid of the share market".*

There is a little inconsistency here in what you are saying
It’s all right for your tertiary educated friends to be woefully ignorant but not for Ms Rubin.

I always feel Julia a little sour grapes on your part you were conned by someone you trusted and the Solicitor got way with it.  Therefore when people who stand up and fight and actually look like winning the battle, you are contemptuous and always looking for the negativity.

Instead of concentrating on how naive people are just look at how brave she is standing up there knowing she will be criticized by all and sundry, yet she does it.
She is fighting that fight for all of us. I am not even with BOQ but what she does helps me with the ANZ and any of the others like NAB and Westpac.
I have been around lawyers half my life and it “sure aint” easy going to court, what a brave woman she is, applaud her, she is the public face of this next stage of the Storm battle.

I applaud you Ms Rubin and don’t let the comments of a few who have never walked in your shoes take away just how brave you are. Stay Strong.


----------



## chrisgee (22 August 2009)

yep so much to read again this week- i read in the afr that mr jelick wasnt too happy that the wrong people in the bank were being targeted- oh well thats the way it goes-maybe they should have been more careful lending out other peoples money--its great to see things starting to get moving- good luck with the action with the bank of bananas- lucky we dont have anything to with them-and mr scatini mention the fraud word- i wonder where that is going to go ??- looks like he may know more about things than most people-
can wait to see if the real truth comes out- hang in there guys-lets show everybody that the stomies are a real force to deal with and they will curse the day they crossed us--


----------



## stormedup (22 August 2009)

Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)


----------



## Garpal Gumnut (22 August 2009)

stormedup said:


> Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)




Fair dinkum ????

gg


----------



## darkside (22 August 2009)

stormedup said:


> Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)




Ahh, that is so true, the Phormula Software pack was written on C++ with Excel 2003 used to tally up the portfolios but was never intended to cope with monitoring or even handling lots of data , nor would it have been capable of identifying individual client portfolios.
 Yet this was touted and purchased off themselves (ignite software) EC's own company for a shade over a million dollars, nice work if you can get it.


----------



## Solly (22 August 2009)

Garpal Gumnut said:


> Fair dinkum ????
> 
> gg




gg, my thoughts as well...


----------



## Solly (22 August 2009)

stormedup said:


> Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)






darkside said:


> Ahh, that is so true, the Phormula Software pack was written on C++ with Excel 2003 used to tally up the portfolios but was never intended to cope with monitoring or even handling lots of data , nor would it have been capable of identifying individual client portfolios.
> Yet this was touted and purchased off themselves (ignite software) EC's own company for a shade over a million dollars, nice work if you can get it.




I remember reading in the prospectus for the failed float that "Phormula", was used by Storm to "assess and monitor the client’s borrowing and investing capacity" , it was also used "to identify market opportunities across the client base and provides clients with timely investment advice".

It also "identifies clients with Step Investment opportunities
and automatically generates Statements of Additional Advice which are sent to clients..."

The mind boggles...


----------



## Garpal Gumnut (22 August 2009)

Garpal Gumnut said:


> I agree Julia,
> 
> Its an inescapable fact that folly and a blind belief in the bull market, fed by the Cassimatis model, contributed to bad money management decisions by Storm investors.
> 
> gg






Solly said:


> Here's the direct link to Ms Rubin's submission to the Inquiry mentioned in the article.
> 
> 
> http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub125.pdf






stormedup said:


> Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)






Garpal Gumnut said:


> Fair dinkum ????
> 
> gg






darkside said:


> Ahh, that is so true, the Phormula Software pack was written on C++ with Excel 2003 used to tally up the portfolios but was never intended to cope with monitoring or even handling lots of data , nor would it have been capable of identifying individual client portfolios.
> Yet this was touted and purchased off themselves (ignite software) EC's own company for a shade over a million dollars, nice work if you can get it.




Is this whole submission exercise serious or a greek farce.

Let us hope that Bernie Ripoll and Ian McDonald have a full transcript of this thread in front of them before they read the submissions.

It is totally unbelievable.

gg


----------



## stormedup (22 August 2009)

Solly, your comments on Phormula are what the Cassimatis family would have liked the system to do but that was a bit of wishful thinking.  They had been working on it for years.  EC & JC even went off to London to try and sell it a few years ago.

They didn't even own it then!!  They had been contracting the work out to a couple of software developers for years.  It was only when they recruited some new blood (incest appeard to be rife) that they were advised they didn't own it.  I have heard that they didn't even have user rights.   Not one person in the company had even thought of this for about 5 years.  As a result, Ignite bought the development company.  I understand that those poor blighters sold on similar terms as the Storm subsidiaries did.  That is, Ignite take over the assets and pay the wages, but will only pay for the purchase (in shares) when the company lists.


----------



## Solly (22 August 2009)

Garpal Gumnut said:


> .............The big wigs have left 3 months of sittings in the courts for sept-nov 2011.
> 
> gg





gg, after the recent developments it looks like it's going to be an interesting time in '11.

I sent a Telex to Lennons, I'm sure they will book out quickly,
I'm just waiting on a reply...


----------



## Julia (22 August 2009)

shibby said:


> [/B]
> We were lied to, what is so hard to understand about that.
> 
> *Those are reasonable comments. I have several friends who are very intelligent, all tertiary educated, successful in their own career fields, but woefully ignorant about financial matters. I don't really know why this is, but my attempts to interest them in putting their money to work is met with "oh yes, I know you're right. I should be doing something, but I'm afraid of the share market".*
> ...



Whatever makes you think that I consider that "it's all right for my tertiary educated friends to be ignorant"  etc?   Can't you see that I was using them as an example of people who are bright in other ways, but nonetheless still financially challenged in their thinking?

The fundamental difference between them and Storm investors, however, is that they have not borrowed amounts they could never expect to pay back or service loans on.  My criticism of them relates purely to their reluctance to sensibly invest money rather than leave it long term sitting in cash deposits.





> I always feel Julia a little sour grapes on your part you were conned by someone you trusted and the Solicitor got way with it.  Therefore when people who stand up and fight and actually look like winning the battle, you are contemptuous and always looking for the negativity.



You're welcome to form whatever view you wish.  The solicitor in my case didn't actually 'get away with it' in terms of not being taken to task, although he didn't go to jail.

ASIC's intervention, however, as in many other instances, occurred too late to prevent my investment being lost.
It was a long time ago, I simply wrote it off and moved on.  These days I wouldn't give that amount a second thought.

Nothing will change my belief that anyone who borrows more than they can reasonably service is taking a huge risk, or similarly who borrows massively on the assumption the market will always go up.  If that makes me contemptuous, so be it.

Be that as it may, I'm very sorry for anyone who has lost their home, or is at risk of this happening.  I've previously acknowledged that it seems clear the banks' lending practices have left a good deal to be desired and if Stormers receive some compensation then I will be pleased for them/you.


----------



## shibby (23 August 2009)

Julia said:


> Whatever makes you think that I consider that "it's all right for my tertiary educated friends to be ignorant"  etc?   Can't you see that I was using them as an example of people who are bright in other ways, but nonetheless still financially challenged in their thinking?
> 
> The fundamental difference between them and Storm investors, however, is that they have not borrowed amounts they could never expect to pay back or service loans on.




And my point is,  *SO FAR, NOT YET !!!!!!!!*

Dont forget we had homes we had money in term deposits we were "bright in other ways"


----------



## Judd (23 August 2009)

shibby said:


> And my point is,  *SO FAR, NOT YET !!!!!!!!*
> 
> Dont forget we had homes we had money in term deposits we were "bright in other ways"




Raises an interesting issue.  At what point does personal responsibility for investment decisions, or any other decision, kick in as opposed to accepting or relying on other entities for a decision making process.

The proposed alterations to contracts for unfair clauses could have some really fascinating outcomes.


----------



## Garpal Gumnut (23 August 2009)

Solly said:


> gg, after the recent developments it looks like it's going to be an interesting time in '11.
> 
> I sent a Telex to Lennons, I'm sure they will book out quickly,
> I'm just waiting on a reply...




Unfortunately the picture doesn't show where we'll be.

It is on the pool level, garden apartments with the jacuzzi.

Its all booked mate.

gg


----------



## Solly (24 August 2009)

*"ANZ admits lending policy failure"*

"Customers caught up in Storm
ANZ admits areas of non-compliance with lending policies for some of its customers caught up in the Storm collapse."

More here by Victoria Papandrea in Investor Daily;

http://www.investordaily.com/cps/rde/xchg/id/style/7232.htm


----------



## Solly (24 August 2009)

*"ASIC bid to stop another Storm Financia*l"

"A RADICAL proposal that investor's should be licensed before they can dive into the sharemarket has been presented to Federal Parliament."

More here by Anthony Marx in the Herald Sun;

http://www.news.com.au/heraldsun/story/0,21985,25971075-664,00.html


----------



## Solly (24 August 2009)

*"Little for victims in Storm salvage"*

"Nearly half the money raised from selling assets of collapsed adviser Storm Financial has been paid to the Commonwealth Bank of Australia, which is currently negotiating compensation for the advisers' former clients."

Read more in the The Australian Financial Review of 24/8/09 by Duncan Hughes.


----------



## Judd (24 August 2009)

*"ASIC raises alarm over new CFD trade risks"*

"The corporate regulator already warns on its consumer protection website that CFDs are ''much riskier than a flutter on the horses or a night at the casino''.

But now the Australian Securities and Investments Commission is focusing on the risks posed by CFD brokers pooling client funds and using the money to offset other clients' trades."

By Lucy Battersby in the Sydney Morning Herald

http://business.smh.com.au/business/asic-raises-alarm-over-new-cfd-trade-risks-20090823-ev1u.html


----------



## Solly (24 August 2009)

Garpal Gumnut said:


> Unfortunately the picture doesn't show where we'll be.
> 
> It is on the pool level, garden apartments with the jacuzzi.
> 
> ...




That's great gg, it will be a good view of the proceedings from there. 

But since they changed the access the entry from Burnett Lane gets a bit tight. If you're unfamiliar I'd recommend that the valet park the Azure as there's a bit of a sharp left to the car park.

It's a pity the Talk of the Town on the 30th floor is gone, it was a great place to chow down. That's where I first learnt it's prudent to keep your ears open around dining pollies and constabulary. :


----------



## abagnale (24 August 2009)

Solly said:


> *"ASIC bid to stop another Storm Financia*l"
> 
> "A RADICAL proposal that investor's should be licensed before they can dive into the sharemarket has been presented to Federal Parliament."
> 
> ...




Dont know if making investors be licenced to invest in particular stratigies is the best way to go.
How would this be administered effectively ?


----------



## Solly (24 August 2009)

*"Storm founders ordered to appear at public examination"*

"THE founders of Storm Financial have been summonsed to appear at a public examination into the failed advisory firm."

More here;

http://www.news.com.au/story/0,27574,25974047-29277,00.html


----------



## Solly (24 August 2009)

Parliamentary Joint Committee on Corporations and Financial Services
Inquiry into Financial Products and Services in Australia

Public hearings;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/index.htm


----------



## Solly (25 August 2009)

*"Blame game over Storm"*

"...a submission to the parliamentary inquiry into the disaster suggests data relied upon by Commonwealth subsidiary Colonial Geared Investments was inaccurate for almost a month in late 2008."

See more by Anthony Marx from the Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,25976456-3122,00.html


Here is the submission that is referred to in Anthony's article;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub109.pdf


----------



## Solly (25 August 2009)

*"Callinan enters centre of Storm"*

"A retired High Court judge has been asked to make an out-of-court ruling about whether a bank continues to have a duty of care to its *margin loan borrowers* where a financial adviser has recommended the product."

Read more by Duncan Hughes in The Australian Financial Review of 25/08/2009


----------



## Solly (25 August 2009)

*"Devil in the detail"*

"A confidential 64-page document has been produced by the Commonwealth Bank of Australia setting out how the complex resolution of potentially 3000 investor claims from Storm Financial clients will be handled."

Read more by Duncan Hughes in The Australian Financial Review of 25/08/2009


----------



## Solly (25 August 2009)

A submission to the Inquiry into Financial Products and Services in Australia claims

"Untruths in the CBA submission to the Parliamentary enquiry [sic]".

Read the details here;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub386.pdf


----------



## Solly (26 August 2009)

*"CBA 'fully appraised' of Storm business model"*

"FORMER staff of the Commonwealth Bank and Storm Financial have lashed out at the bank's depiction of its relationship with the collapsed financial planner, claiming that upper echelons within the bank's credit department were fully appraised of Storm's business model."

More by Jacob Saulwick in the SMH is here;

http://business.smh.com.au/business/cba-fully-appraised-of-storm-business-model-20090825-ey2r.html


----------



## Solly (26 August 2009)

*"CBA lied to Storm inquiry, say ex-staff"*

"Commonwealth Bank of Australia lied about its involvement with collapsed investment adviser Storm Financial, according to a submission to the federal government's inquiry into financial services."

Read more by Duncan Hughes in The Australian Financial Review of Wednesday, 26 August 2009


----------



## Solly (26 August 2009)

*"FPA membership can't be bought: chief"*

"Process requires due diligence and audit.
Claims that FPA membership carries no obligation and is simply bought are untrue, the association's chief said."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7246.htm


----------



## Judd (26 August 2009)

Solly said:


> *"CBA lied to Storm inquiry, say ex-staff"*
> 
> "Commonwealth Bank of Australia lied about its involvement with collapsed investment adviser Storm Financial, according to a submission to the federal government's inquiry into financial services."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Wednesday, 26 August 2009




Have to be careful about this.  If true, Ralph and crew would be very, very silly boys, since misleading a Parliamentary inquiry is, if proven, Contempt of Parliament for which a range of penalties including jail, may be applied by the Supreme Court.



> Contempt of Parliament is directly comparable with contempt of court. The Parliamentary Privilege Act 1987 sets out a number of instances of contempt including disobedience to an order for attendance or production of documents by either House or a parliamentary committee; refusing to answer questions put by a House or a committee; threatening or bribing MPs; and creating a disturbance in or near Parliament House. The act does not however intend to limit the powers of Parliament. Section 12 provides:
> 
> 'Nothing in this Act contained shall be deemed or taken, or held or construed, directly or indirectly, by implication or otherwise, to affect any power or privilege possessed by either House of Parliament before the passing of this Act in any manner whatsoever.'


----------



## specialed (26 August 2009)

"...a submission to the parliamentary inquiry into the disaster suggests data relied upon by Commonwealth subsidiary Colonial Geared Investments was inaccurate for almost a month in late 2008."


The sooner the CBA takes responsibility for its role in the Margin Call (or lack there of ) debacle the sooner this can all be rectified. How can investors be expected to make informed decisions about their investments if they do not have access to up to date information. Surely if the banks have sold a product that is in effective defective, and does not work as its customers could have rightly expected it to, then they are liable for the damage it has caused. If the banks were aware of this before selling the product then surely they have deliberately engaged in deceptive practice, and therefore they should have their banking licence revoked. Should Commsec customers be concerned about the effectiveness of its product? If not, then why can it work so effectively yet CGI’s product, also owned by the CBA, not.


----------



## abagnale (26 August 2009)

Judd said:


> Have to be careful about this.  If true, Ralph and crew would be very, very silly boys, since misleading a Parliamentary inquiry is, if proven, Contempt of Parliament for which a range of penalties including jail, may be applied by the Supreme Court.




I would think that the CBA would have been ultra careful with the wording and content of their submission and would have had the submission prepared by some high paid silks. 
To claim that there are untruths is a pretty game position.  I have no idea who is right but someone is wrong. I've read many of the submissions and the whole episode is really verging on unbelievable. I still cant see how people could have slept at night with that level of debt and gearing. Somebody was a good salesperson. 
I don't wish any ill will towards the stormies and really hope they can come out of this with some money and restore their dignity.


----------



## Judd (26 August 2009)

abagnale said:


> I've read many of the submissions and the whole episode is really verging on unbelievable. I still cant see how people could have slept at night with that level of debt and gearing. Somebody was a good salesperson.




I know from where you are coming.  I rejected a loan against our home to invest in the sharemarket because I felt it was sort of dodgy (but looked very good on the computer screen) so I blew up a margin loan instead.  Fortunately, that was with assets unconnected to our home and covered by other assets not associated with the loan.  The loss of money hurt but it was no where near as bad as some Stormers.  I'd be sweating every night dreaming about that level of debt that needed to be repaid no matter what some talking head said about it being safe and not to worry.  I'm a worrier kind of person.

I am coming around to a view that with some people something just clicks in their head to reject a proposal.  They may not be able to say at the time why they rejected it but they do.  Must be gut instinct and not much more than that.


----------



## Solly (26 August 2009)

Regarding the Inquiry into Financial Products and Services in Australia,
here is a response to adverse comment submitted by Jo-Anne Bloch from the Financial Planning Association of Australia Limited;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/gadvcom1.pdf


----------



## Garpal Gumnut (26 August 2009)

Solly said:


> Regarding the Inquiry into Financial Products and Services in Australia,
> here is a response to adverse comment submitted by Jo-Anne Bloch from the Financial Planning Association of Australia Limited;
> 
> http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/gadvcom1.pdf





Good one Solly. The Financial Planners association FPA appear to have the wind up.

There are one or two Stormers planning to roll them in to a lawsuit I've been told.

The FPA are quite a funny pack of useless muppets really. 

They represent Planners who are paid by the big funds to recommend their investments to unread investors like the Storm victims.

Professional , I doubt it.

gg


----------



## Anastasia (26 August 2009)

I was just talking to a friend who is off to Europe for a four month holiday soon and it really got my blood boiling. Not for my friend going...hell, she and her partner really deserve it.

But I became angry as it has always been our wish to have a "little" six month stay in France/ Italy but were always advised by Storm that we must hurt now for future pleasures (so to speak). So we have worked hard all our adult lives, never went on any trips, and now have nothing to show for it but a bad debt. 

How I wish we had done all those wonderful things and more ($250,000 of my husbands super that we would of had even if no investments were undertaken) ....blow most of our money admittedly...but be no worse off then we now are... and at least have done it and had fun doing it. It is said we should never had any regrets when we come to the end of our life.....I guess I still have a huge mountain to climb if that is the case.


----------



## Ferret (26 August 2009)

Anastasia,

Whilst Storm might have dissuaded you from using some cash to take an extended holiday, I'm betting that at the same time they were saying "Follow our plan for you and you'll be able to have all that in the future".

The truth is very few of us could ever afford to go on an extended european vacation.  Just an example of Storm preying on ordinary people to pull in their commissions.

To my mind using a large chunk of retirement savings for a vacation is a poor decision, but in your situation I can certainly understand you wishing you had.  Don't give up on life, there are many wonderful things you can enjoy without a mountain of money.


----------



## Solly (27 August 2009)

*"ANZ Storm cloud could get bigger"*

"ANZ has admitted the number of customers exposed to collapsed planner Storm Financial could exceed its initial estimates of 160 as the banking giant pushes ahead with a review of its lending book."

More by Eric Johnston and Lucy Battersby in SMH is here;

http://business.smh.com.au/business/anz-storm-cloud-could-get-bigger-20090826-ezu2.html


----------



## Solly (27 August 2009)

*"FPA membership can't be bought: chief"*

"Process requires due diligence and audit
Claims that FPA membership carries no obligation and is simply bought are untrue, the association's chief said."

More by Kate Kachor from Investor Daily here;

http://www.investordaily.com.au/7246.htm


----------



## Solly (27 August 2009)

*"CBA stands by submission content"*

"Identifies deficiencies
CBA has confirmed the accuracy of information provided to the Parliamentary Joint Committee."

More by Kate Kachor in Investor Daily is here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7260.htm


----------



## Solly (27 August 2009)

*"Losses not our fault, ANZ tells inquiry"*

"Misplaced optimism that equity and property markets would continue to boom paved the way for heavy investor losses in the collapses of Opes Prime and Storm Financial, a senior Australia and New Zealand Banking Corporation executive said yesterday."

Read more by Duncan Hughes in The Australian Financial Review of 27/08/2009


----------



## Solly (27 August 2009)

*"Rates copy stirs Storm"*

"TOWNSVILLE City Council has been caught out trying to charge a victim of Storm Financial $12 for  
a copy of his rates notice.

The devastated former Storm client, veteran pensioner Steve Reynolds, was trying to collect documents for a hardship claim to Bank of Queensland."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/08/27/74775_news.html


----------



## Solly (27 August 2009)

*"No homes lost due to Storm: ANZ"*

"ANZ Bank has publicly pledged that none of its customers will lose their homes as a result of the bank's entanglement with Storm Financial."

More by Richard Gluyas in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,25986050-36418,00.html


----------



## chrisgee (27 August 2009)

Anastasia said:


> I was just talking to a friend who is off to Europe for a four month holiday soon and it really got my blood boiling. Not for my friend going...hell, she and her partner really deserve it.
> 
> But I became angry as it has always been our wish to have a "little" six month stay in France/ Italy but were always advised by Storm that we must hurt now for future pleasures (so to speak). So we have worked hard all our adult lives, never went on any trips, and now have nothing to show for it but a bad debt.
> 
> How I wish we had done all those wonderful things and more ($250,000 of my husbands super that we would of had even if no investments were undertaken) ....blow most of our money admittedly...but be no worse off then we now are... and at least have done it and had fun doing it. It is said we should never had any regrets when we come to the end of our life.....I guess I still have a huge mountain to climb if that is the case.





i know exactly where you are coming from-things where supposed to be very very different at this stage of life-i cant wait to see what comes from the hearings this will be a start- lets see who and what crawls out from under that rocks-i dont trust any of them now-all i want to see is what has been wrongly taken away be givven back to the people who lost everythimng- im not going to stop until i see this happen-you cant treat people like this- you cant discard people as if they are rubbish and walk away as if nothings wrong- people are hurting some hurting very very much-so i will not stop until i see everybody that has been flattened be this restored to where they should be- a life times work destroyed- i dont think so- keep fighting until you can fight no more to make sure justice is done- who is at fault..? let the court of public opinion decide. im freaking fired up today


----------



## Solly (27 August 2009)

*"Which bank weathers the Storm"*

On the ABC The World Today, text & podcast.

_The Commonwealth Bank, has offered to pay for the case against it to be run._

(Course language warning) 

http://www.abc.net.au/worldtoday/content/2009/s2668762.htm


----------



## Landyman (27 August 2009)

So, was it the Gumnut way back  at the start of this thread who predicted the lawyers would be the ones to clean up?

Have not the lawyers (S&G) been engaged by "money  spider central" or SICAG.

Can anyone give an example of any organisation and lawyers in  particular working in  the interests of anyone other than  those who are paying the bills.(CBA)

So, it has taken 150 pages for the Gumnut's prediction to come to fruition.


----------



## Solly (28 August 2009)

*"ANZ Storm cloud could get bigger"*

"The bank also revealed a staff member at a branch on Queensland's Sunshine Coast who had approved loans for Storm customers outside ANZ guidelines was a client of the high-risk financial planner."

More by Eric Johnston and Lucy Battersby in The Age / SMH is here;

http://business.smh.com.au/business/anz-storm-cloud-could-get-bigger-20090826-ezu2.html


----------



## Judd (28 August 2009)

Landyman said:


> .........Can anyone give an example of any organisation and lawyers in  particular working in  the interests of anyone other than  those who are paying the bills.(CBA)...........




The ATO.  Admittedly this is actually the taxpayer but the ATO has funded court cases against itself in order to achieve a determination by the courts on contentious tax issues and principles.  The ATO has lost the cases on a number of occasions.

Maybe, just maybe, the CBA is taking a higher stance by going to the courts on a "let's get these legal issues sorted out once and for all."  If so, good on them because a court decision should decide the level of responsibilities on banks, financial institutions and also the clients.  And there could be worthwhile flow on effects.

Can only wait and see.


----------



## Pindibog (28 August 2009)

Landyman said:


> So, was it the Gumnut way back  at the start of this thread who predicted the lawyers would be the ones to clean up?
> 
> Have not the lawyers (S&G) been engaged by "money  spider central" or SICAG.
> 
> ...




Well it was never going to be for free!! Look at the whole picture. If this proposal wasn't presented alot of people would not have been able to take banks/storm to task. If they did it would be determental financially even with the no win, no pay firm. Stormers have every right to leave the proposal if they are not happy. I don't know what other choice they have. Am awaiting on what ASIC's will do. Hopefully it will be a welcome surprise.


----------



## Garpal Gumnut (28 August 2009)

Steve Borden said:


> The best (?) analogy I can draw is a once loving relationship that ends in a bitter divorce. Ego, blame, arrogance takes over and reason gets left behind to the extent they start fighting over the children, the furniture and the gold fish.
> 
> When it gets to that stage it's very hard re-establish logical discussion.
> 
> In the CBA/Storm divorce case though neither party apparently wanted custody.




And from the sound of it Storm Financial should have been in counselling for years earlier.

gg


----------



## Solly (29 August 2009)

*"Widow lost everything when Securitor used Storm strategy"*

"A QUEENSLAND widow who lived on a $10,920-a-year pension with a $60,000 mortgage was advised to take out loans totalling $700,000 by a financial planner from the St George Bank-owned planner network Securitor"

More by Stuart Washington is here;

http://business.smh.com.au/business/widow-lost-everything-when-securitor-used-storm-strategy-20090828-f2g2.html


----------



## Solly (29 August 2009)

*"Severe Storm alert for Norris"*

"The parliamentary inquiry will have some probing questions for the CBA chief executive - if he turns up."

Read more by Duncan Hughes in The Australian Financial Review of 29/08/2009.


----------



## Solly (29 August 2009)

*"EMMANUEL CASSIMATIS"*

"Back in the days when his Storm Financial group seemed like a good idea, Emmanuel Cassimatis was quite the public gadabout."

Read more by Duncan Hughes in The Australian Financial Review of 29/08/2009


----------



## Solly (29 August 2009)

*Inquiry into Financial Products and Services in Australia

Public hearings *

26/08/2009	Melbourne, VIC
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/260809.htm

28/08/2009	Canberra, ACT
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/280809.htm

01/09/2009	Cairns, QLD
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/010909.htm

02/09/2009	Townsville, QLD
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/020909.htm

03/09/2009	Brisbane, QLD
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/030909.htm

04/09/2009	Sydney, NSW
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/040909.htm

16/09/2009	Canberra, ACT
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/160909.htm


Read the relevant submissions referenced in the above here;
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sublist.htm

*Transcripts of the hearings will be posted here;*
http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/index.htm


----------



## Solly (29 August 2009)

*"Investors to be warned of share risks to homes"*

"INVESTORS who borrow against their home to buy shares will have to be given clear warnings of the risks, including that they might lose their house, under new margin lending regulations set to be unveiled by the Rudd government."

More by Nicola Berkovic in The Australian of August 29, 2009.

http://www.theaustralian.news.com.au/business/story/0,28124,25996755-20501,00.html


----------



## Judd (29 August 2009)

Solly said:


> *"Investors to be warned of share risks to homes"*
> 
> "INVESTORS who borrow against their home to buy shares will have to be given clear warnings of the risks, including that they might lose their house, under new margin lending regulations set to be unveiled by the Rudd government."
> 
> ...




So are they also going to warn those who borrow against their home to buy a boat, a car, have a holiday, household goods, etc, could also lose their home?  What a Doh! society we are becoming.


----------



## bunyip (29 August 2009)

Solly said:


> *"Widow lost everything when Securitor used Storm strategy"*
> 
> "A QUEENSLAND widow who lived on a $10,920-a-year pension with a $60,000 mortgage was advised to take out loans totalling $700,000 by a financial planner from the St George Bank-owned planner network Securitor"
> 
> ...




One difference between Securitor and Storm is that Securitor charged around 3% fees compared to 7% by Storm. In all other respects they both appear to have employed similar unscrupulous, cash-grabbing tactics designed to feather their own nests, without any regard for the welfare of their clients.

I'm not a Storm victim, yet even I feel angry and disgusted at the greed and total disdain for other people that was exhibited by Storm and the unscrupulous advisers who worked for them.
These apologies for men and women should hang their heads in shame - it's questionable whether they're even fit to be called human beings.


----------



## bunyip (29 August 2009)

Solly said:


> *"Investors to be warned of share risks to homes"*
> 
> "INVESTORS who borrow against their home to buy shares will have to be given clear warnings of the risks, including that they might lose their house, under new margin lending regulations set to be unveiled by the Rudd government."
> 
> ...




That'd be right....warn them about the obvious that they should be able to see for themselves. 
While we're at it, let's put notices on toilet doors telling them to make sure they use the toilet paper after they've finished. 
Then let's spend millions of dollars by resurrecting those 'Slip Slop Slap' ads on TV to warn people they might get fried if they don't take precautions against sunburn.
And we'll warn them of the risks of drinking alcohol - no, hang on a minute, the government make billions by taxing alcohol sales - we'd better not interfere with that nice little cash cow. We'll continue allowing alcohol ads on TV, but of course we'll maintain the advertising ban on cigarette companies and we'll continue forcing them to put warnings on cigarette packets for the idiots who have too little intelligence to know the health risks of smoking tobacco.
While we're in the business of protecting people against themselves, let's pass a law compelling vehicle manufactures to put warning signs on car doors to let drivers know they could get hurt or killed if they speed or drink-drive.
And how about a law enforcing real estate agents to tell people they could lose their assets if they're used as collateral for real estate loans.

Where the hell is it going to stop - all this legislation to protect idiots against themselves??!! Adults of normal intelligence shouldn't need other adults to hold their hands and guide them through life every step of the way. Different story if they're intellectually disabled, or of frail mind because of age. But we already have organizations that look after these people and do everything possible to ensure that their best interests are being met.

Once kids grow up and leave home and make their own way in the world, they should be responsible for themselves and the decisions they make - even the poor decisions. It's not the responsibility of government or the general community to mollycoddle them with never-ending advice and legislation and hand-holding.


----------



## Ironhalo (29 August 2009)

Number 1 rule of law making: You can't legislate against stupidity.

It's useless even trying.


----------



## Harleyquin (29 August 2009)

bunyip said:


> That'd be right....warn them about the obvious that they should be able to see for themselves.
> While we're at it, let's put notices on toilet doors telling them to make sure they use the toilet paper after they've finished.
> Then let's spend millions of dollars by resurrecting those 'Slip Slop Slap' ads on TV to warn people they might get fried if they don't take precautions against sunburn.
> And we'll warn them of the risks of drinking alcohol - no, hang on a minute, the government make billions by taxing alcohol sales - we'd better not interfere with that nice little cash cow. We'll continue allowing alcohol ads on TV, but of course we'll maintain the advertising ban on cigarette companies and we'll continue forcing them to put warnings on cigarette packets for the idiots who have too little intelligence to know the health risks of smoking tobacco.
> ...




What you are conveniently forgeting is that this legislation is designed to stop companies like storm conning people out of their life savings.  Many storm investors were not even told that they had a margin loan and were not warned of the risks.  They were told 'you won't have to worry our team of experts will be looking after your money and they will buy low and sell high and we all have our money in the same place as yours and we want to make sure that we do well so you'll never have to worry'.  They had a polished answer for every one of their clients concerns including 'can I ever lose my home ;  eg 'No never we will make sure that never happens as we have buffers in place to make sure this never happens'.  This is the sort of spiel that these professional conmen used.  And don't forget Storm Financial was a legitimate financial planning firm, a member of the Financial Planning Association and approved by ASIC.  When investors went looking for a financial planner they had all the qualifications and the investors for the most part were financially naive.  Most of you on this forum are well aware of the risks but most of storms investors knew nothing of the share market and put their trust in a legitimate financial planner with a degree and doctorate in financial planning.  Not all of storm's planners were uneducated but they were all schooled by one of the greatest conmen this country has ever produced.  Many of storms victims were far from stupid but not everyone knows what to do to improve their financial situation or they are too busy and want to leave it to the experts.  Storm Financial had all the bits of paper needed!!!  Their biggest crime has been that they have trusted a legitimate financial planner to help them achieve financial independence and not to have to rely on the old age pension.  If you are one of those people who know how to achieve your financial goals in life then you are very lucky but just remember not everyone has this ability and need the help of these experts.  Most are now saying they would never trust another financial planner.  What do ASIC and all the other experts tell us all 'Go to a legitimate financial planner and take their advice' and that's exactly what storm clients did.

Storm Financial and all of the banks involved with them have not followed legal lending practices.  How can they lend retirees over a million dollars on the old age pension?  This is exactly what happened and Storm Financial's experts assured them they would always be ok no matter what happened to the market.


----------



## Garpal Gumnut (29 August 2009)

rfont4 said:


> What you are conveniently forgeting is that this legislation is designed to stop companies like storm conning people out of their life savings.  Many storm investors were not even told that they had a margin loan and were not warned of the risks.  They were told 'you won't have to worry our team of experts will be looking after your money and they will buy low and sell high and we all have our money in the same place as yours and we want to make sure that we do well so you'll never have to worry'.  They had a polished answer for every one of their clients concerns including 'can I ever lose my home ;  eg 'No never we will make sure that never happens as we have buffers in place to make sure this never happens'.  This is the sort of spiel that these professional conmen used.  And don't forget Storm Financial was a legitimate financial planning firm, a member of the Financial Planning Association and approved by ASIC.  When investors went looking for a financial planner they had all the qualifications and the investors for the most part were financially naive.  Most of you on this forum are well aware of the risks but most of storms investors knew nothing of the share market and put their trust in a legitimate financial planner with a degree and doctorate in financial planning.  Not all of storm's planners were uneducated but they were all schooled by one of the greatest conmen this country has ever produced.  Many of storms victims were far from stupid but not everyone knows what to do to improve their financial situation or they are too busy and want to leave it to the experts.  Storm Financial had all the bits of paper needed!!!  Their biggest crime has been that they have trusted a legitimate financial planner to help them achieve financial independence and not to have to rely on the old age pension.  If you are one of those people who know how to achieve your financial goals in life then you are very lucky but just remember not everyone has this ability and need the help of these experts.  Most are now saying they would never trust another financial planner.  What do ASIC and all the other experts tell us all 'Go to a legitimate financial planner and take their advice' and that's exactly what storm clients did.
> 
> Storm Financial and all of the banks involved with them have not followed legal lending practices.  How can they lend retirees over a million dollars on the old age pension?  This is exactly what happened and Storm Financial's experts assured them they would always be ok no matter what happened to the market.




This is the most eloquently put , elaboration of the mindset of Storm investors and makes me for one, more cognisant of how they came to be in the position they are now in.

It behoves The Senate Inquiry to read all of the ASF posts , to understand the motives behind the Storm victims.

Moneyspidercentral may not communicate that to the Inquiry as some of the higherups in SICAG are still Storm believers.

gg


----------



## Harleyquin (29 August 2009)

Garpal Gumnut said:


> This is the most eloquently put , elaboration of the mindset of Storm investors and makes me for one, more cognisant of how they came to be in the position they are now in.
> 
> It behoves The Senate Inquiry to read all of the ASF posts , to understand the motives behind the Storm victims.
> 
> ...




Whether you like it or not we are all different, it's what makes this old world of ours such an interesting place.  Aren't you the lucky one who obviously doesn't need a financial planner.  Well not all of us are that lucky our talents obviously lie elsewhere.  

Legislation on margin loans is long overdue in this country.  The collapse of Storm involves white collar crime and fraudulent activity and one would hope that this parliamentary inquiry will flush out those responsible.  

The blame game is well and truly on and the banks involved with storm are blaming storm's advice.  What the banks and others with your mindset all need to realise is that storm could not borrow anything they could only recommend a level of borrowing.  It was up to the banks to make sure that the borrowers could afford to service those loans and they have failed in their duty of care to do just that.  Recommending and allowing borrowing of margin loans of any size by retirees, those close to retirement and those who simply couldnt' afford it is not on and if it takes legislation to ever prevent this scenario from ever occurring again so be it.

The margin loan issue is the one which has got so many victims into the level of financial ruin that they now find themselves in.  

Why were LVR's allowed to blow out as far as they did?  

Who was responsible for advising the clients they were in margin call?

In the past the banks have done it, why didn't they do it this time?

Storms advice wasn't real wonderful but had the banks given all clients the chance to correct their LVR's or given them a margin call when they reached the recommended level, none of this destruction of the clients portfolios would have occurred. 

Had the major bank in this debacle not given storm 24 hours to repay their debts, storm may still be in existence and none of this would ever have occurred.  Now that the all ords is up over 4400 all of storm's clients would be back in there, their valuation would have been down like everyone else in the market, but they would not have been out of the game completely, with no hope for a financial future of any kind.

You are very lucky that you have the knowledge to prevent this occurring to you but those who don't are now on anti depressants and sleeping tablets to cope with the fact that they have no home, no money and a huge debt.  They have no future and it was all done supposedly by a legal financial planning organisation and their co-conspirators.

There are many of us out there who need the advise of a good financial planner and the financial industry needs a total revamp.  At the present time if you go to a financial planner you, the client, are given a Statement of Advice so that you are supposedly aware of any risks.  I would like to see the financial advisors of the future sign the Statement of Advice so that they then become responsible for any problems arising from their advice.  It is about time that they became more professional and took responsibility for all advice given.  That's what clients pay for.


----------



## Garpal Gumnut (29 August 2009)

Harleyquin said:


> Whether you like it or not we are all different, it's what makes this old world of ours such an interesting place.  Aren't you the lucky one who obviously doesn't need a financial planner.  Well not all of us are that lucky our talents obviously lie elsewhere.
> 
> Legislation on margin loans is long overdue in this country.  The collapse of Storm involves white collar crime and fraudulent activity and one would hope that this parliamentary inquiry will flush out those responsible.
> 
> ...




Mate you have been burnt, but you still have that sneaking suspicion that it was activities outside your control that got you in to this.

I quote you.



> Storms advice wasn't real wonderful




No mate, Storms advice wasn't really wonderful.

It was absolute crap.

Repeat it every 10 minutes until you don't ever publish the same externalising sentence ever again.

It   was   crap.

And you swallowed it.

gg


----------



## chrisgee (29 August 2009)

hey ive been into the newsagent between shifts to read some of the story in the fin review-very interesting stuff-so mr norris may not be the shining light that everybody thinks what i found funny is that mr c will be under the spotlight at the inquiry on friday and then next person in will be mr norris-that's if he turns up-theres now many more questions than answers about this whole thing- sure mr gg i agreee that storms advice may have been not that good but why did the banks loan the money-im going to see if i can make it to some of the hearings- i bet mr c will give a very polished response-and mr norris will also give a very polished response- that reminds me, whats that old saying--You cant polish a turd- Id better stop now before i upset joe-i want to go and read more posts before my money runs out--oh wait a minitue it already has-


----------



## Monario (29 August 2009)

Garpal Gumnut said:


> Mate you have been burnt, but you still have that sneaking suspicion that it was activities outside your control that got you in to this.
> 
> I quote you.
> 
> ...





GG,
      Do you take your car to a mechanic? ( I am a mechanic by the way) well if not you I am sure some do....

If you had your car serviced, and as a result they did a shoddy repair on the stearing, resulting in you hitting a power pole at 100k's an hour and crippling you... for say 10 years..

An investigation found that the professional service the mechanic offered was, afterall not so professional and was the direct cause... However because it was within your control to gain a second opinion you wont get any compensation... Would you Swallow it???


----------



## Harleyquin (29 August 2009)

Garpal Gumnut said:


> Mate you have been burnt, but you still have that sneaking suspicion that it was activities outside your control that got you in to this.
> 
> I quote you.
> 
> ...




As I said 'Aren't you lucky you knew that.'  It appears that's all you know.  

Storm's investment strategy has been a standard but risky form of investment for as long as people have been investing in the stock market.  It may not have been real wonderful, but it wasn't crap.  What is crap is the blinkers that you have on regarding the whole issue here.

There are many who do still believe in this form of investment and fortunately for them they can afford it.  It is the ones who cannot afford it, don't understand it and get conned with the help of the major banks who need help here and your attitude doesn't help those who have been severely burnt.  We are one of the lucky ones we have been burnt but have more than enough to still survive.  

There are a lot of investors out there who are very clever at what they are clever at and they don't have the time or the inclination to take care of their financial situation.  They need help from good, genuine financial planners.  The banks don't need to be involved at all.  Their involvement was pure greed.


----------



## Harleyquin (29 August 2009)

Monario said:


> GG,
> Do you take your car to a mechanic? ( I am a mechanic by the way) well if not you I am sure some do....
> 
> If you had your car serviced, and as a result they did a shoddy repair on the stearing, resulting in you hitting a power pole at 100k's an hour and crippling you... for say 10 years..
> ...




Thank you Monario you are spot on there.  My husband is an electrician and if he does any electrical work he is responsible for it and can go for murder if he is unprofessional.  A lot of these so called financial planners are not professionals and yet they are members of the Financial Planners Association and approved by ASIC.  How are any of us supposed to know who to go to and who to stay away from.

When you pay for financial advice you expect them to be professionals and to look after your finances.

The directors of Storm Financial and the CBA bank had a close relationship and the bank encouraged storms level of borrowing using their VAS system.  They revalued property so they could lend even more money than storm recommended.  

The bank are blaming a couple of rogue employees, what a load of hogwash, everyone of their superiors right to the top would have been aware of exactly what was happening.  And what about the auditors don't tell me they didn't know what was happening.  You can guarantee everyone of them knew exactly what was happening and that it was highly unethical if not highly illegal.  So why did they do it and why did they allow it to continue?

It meant big bucks for the banks that's exactly why they did it, why they encouraged it, why they allowed it to continue and why they have tried desperately to cover it up.  The CBA made four billion dollars profit last year, it's all about money and profit.  People are no longer important to these banks their attitude has become quite despicable.

Read the submissions to the parliamentary inquiry they all tell the same story.  Why, they can't all be wrong.  There is far more to this collapse than meets the eye and we can all only hope and pray that the parliamentary inquiry gets to the bottom of this collapse and some of those unfortunate victims receive some form of compensation for being duped by a corrupt system.


----------



## Garpal Gumnut (29 August 2009)

Harleyquin said:


> Thank you Monario you are spot on there.  My husband is an electrician and if he does any electrical work he is responsible for it and can go for murder if he is unprofessional.  A lot of these so called financial planners are not professionals and yet they are members of the Financial Planners Association and approved by ASIC.  How are any of us supposed to know who to go to and who to stay away from.
> 
> When you pay for financial advice you expect them to be professionals and to look after your finances.
> 
> ...




So what you are saying is that it was not Storm's fault.!!!!!!!!!!!!!!!!!!!!

Are you a moneyspider from SICAG ?

I will not say anything more except.

In eight years tme you will be on here complaining about the next FP who takes your dough.

Folk here post to advise each other and to learn.

And you are not victims. You are investors in a dodgy product that failed to live up to your expectations.


gg


----------



## Judd (29 August 2009)

Garpal Gumnut,

No matter how hard you try, you will never get through that, putting any CBA involvement aside, it was not margin loans (darn safe if managed properly, ie dont get the LVR above 20% if you wish to sleep soundly at night unless you are really hairy chested) and/or borrowing against the house which was the problem per se.  It was the sheer amount of debt incurred which remained constant while the market went south.

Debt carries risk at some level.  People with storm were seemingly fed a line of bull that any level of debt was safe.  I don't know why they believed such rubbish but they did.

Why they did not add up their monthly statement of position and ponder how is this debt to be paid off can only be answered by the individuals concerned.

Debt, debt, debt.  It will trash you if not managed correctly.

And the CBA and other financial institutions had some involvement.  It is now a matter of determining the degree of that involvement and the level of responsibility which should be apportioned between the banks, the advisers and the clients themselves.

-----------------------------------------------------------------
From an uneducated git who barely passed Year 11 but was fortunate, having been raised in the then slum of Footscray, to be able to observe and mingle with some of the best rip off merchants that suburb produced.


----------



## darkside (29 August 2009)

Harleyquin said:


> Whether you like it or not we are all different, it's what makes this old world of ours such an interesting place.  Aren't you the lucky one who obviously doesn't need a financial planner.  Well not all of us are that lucky our talents obviously lie elsewhere.
> 
> The blame game is well and truly on and the banks involved with storm are blaming storm's advice.  What the banks and others with your mindset all need to realise is that storm could not borrow anything they could only recommend a level of borrowing.  It was up to the banks to make sure that the borrowers could afford to service those loans and they have failed in their duty of care to do just that.
> 
> .





I am not really 100% with you there, i don't think it is the banks responsibility to make sure and certain that you are able to service the loan , thats why the bank takes security, if you can't repay the loan they get their money back.

It's the banks job to lend you the money, hell, thats what they do, thats how they make their money. I don't think they should be giving too much financial advice, thats what the FPs are for and to a lesser extent do some research.

A simple rule perhaps for next time, " if you don't think you can afford the repayments on the loan , you cant"  "if you think your spouse is having an affair , they are"  if you think your kids are on drugs, yes ,there selling "crack" on the corner.
Not trying to be confrontational, just realistic.


----------



## gooner (29 August 2009)

darkside said:


> I am not really 100% with you there, i don't think it is the banks responsibility to make sure and certain that you are able to service the loan , thats why the bank takes security, if you can't repay the loan they get their money back.
> 
> It's the banks job to lend you the money, hell, thats what they do, thats how they make their money. I don't think they should be giving too much financial advice, thats what the FPs are for and to a lesser extent do some research.
> 
> ...




Darkside

Whilst I agree it is the borrower's responsibility to ensure they know what they are getting themselves into and that they can afford it, from a legal point of view, there have been some cases where borrowers have won their case due to predatory lending, where the bank would know the borrowers could not pay.

Not a legal case, but I recall one of the majors, CBA I think, waived car loans that had been made to NT aborigines who were on welfare. No way they could pay.

I think there needs to be some responsibility on banks to lend responsibly. Not everyone is as financially savvy as you and me


----------



## Solly (29 August 2009)

Solly said:


> *"Severe Storm alert for Norris"*
> 
> "The parliamentary inquiry will have some probing questions for the CBA chief executive - if he turns up."
> 
> Read more by Duncan Hughes in The Australian Financial Review of 29/08/2009.




I don't know if you have been able to get a copy of this today but it is quite an interesting read.

In the article, it states that a former senior CBA employee whose evidence against the bank will be used in the forthcoming legal action has provided internal bank emails to lawyers which allegedly demonstrates that decisions were made by managers who reported directly to the CEO.

Also in the article Mark Weir from SICAG, talking about the relationship between CBA & Storm, states;
"They were not so much joined at the hip as Siamese twins."

Duncan Hughes also reports about the Masters Degree in Applied Finance from University of Western Sydney. UWS denies that EC & JC had anything to do with the design of the course. Carey Ramm says the degree was considered a joke as eligilibility did not require previous tertiaty qualifications.

Get yourself a copy of the paper and make your own opinions.


----------



## darkside (29 August 2009)

gooner said:


> Darkside
> 
> Whilst I agree it is the borrower's responsibility to ensure they know what they are getting themselves into and that they can afford it, from a legal point of view, there have been some cases where borrowers have won their case due to predatory lending, where the bank would know the borrowers could not pay.
> 
> ...




Gooner, 

I agree to an extent and sure the banks must at least make an effort, but as far as financially savvy goes, people are going to have to do some research, christ they say your home is your biggest investment, but people borrowed way more than just the value of their homes, thats why they are losing them.

As a few have pointed out " we cant legislate against stupidity"  but that seems to be what we are trying to achieve. Lets not legislate to the extent that we penalise the researched and educated investor for the mistakes of others. 

As i stated , i don't  disagree that the banks share some responsibility, but surely the investor must take some blame. Fvc# i just spilt my hot coffee, who can i sue for that , nescafe get your legal firm ready.


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## Harleyquin (29 August 2009)

darkside said:


> Gooner,
> 
> I agree to an extent and sure the banks must at least make an effort, but as far as financially savvy goes, people are going to have to do some research, christ they say your home is your biggest investment, but people borrowed way more than just the value of their homes, thats why they are losing them.
> 
> ...




I disagree that the investor should take some blame.  I am not an astute investor that's why I went to a financial planner.  That's why I needed to take the advice from an expert in the financial field.  If I was able to educate myself I wouldn't need to go to a financial planner.  There does need to be some legislation in place to protect those seeking financial advice because they don't know how to do it themselves.  If I was as clever with finances as many of you profess to be I wouldn't bother going to a financial planner either and I would also have known better than to do what Storm suggested.  Unfortunately I didn't know.  

Are financial planners professionals who can be trusted or not?  Make up your minds.  If they can be trusted then none of us made a mistake in going to Storm.  If they can't be trusted then we made a huge mistake in going to Storm.  In which case why were they licensed to give financial advice.  Why were they members of the Financial Planning Association.

Why didn't Storm Financial explain to their clients what a margin loan was.  Why didn't many of us find out until it was too late.  I admit I'm a first time investor and I had no idea that I had to educate myself before taking financial advice from an expert.

Does that mean that if I am advised to have brain surgery from a brain surgeon that I'll have to educate myself about brain surgery first before I have the operation or do I trust him because he's a professional.  

We need genuine professional financial planners who can be trusted and it looks like the only way we are going to achieve that is to legislate.  This does not mean for one moment that if you want to borrow against your home to take out a personal loan to buy a car or similar that the legislation needs to cover those types of personal loans, it simply means that FP's/Banks cannot advise/lend huge margin loans for financial planners to play the stock market on their clients behalf.

Some of you are just going to accept that we all have to start somewhere with this understanding of how the financial world operates.  Give yourselves a pat on the back if you've made it.  I'm still in financial preschool and it's been a painful journey so far.  I've been to hell and looking for that arrow that says 'this way back.'


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## darkside (29 August 2009)

Harleyquin said:


> I disagree that the investor should take some blame.  I am not an astute investor that's why I went to a financial planner.  That's why I needed to take the advice from an expert in the financial field.  If I was able to educate myself I wouldn't need to go to a financial planner.  There does need to be some legislation in place to protect those seeking financial advice because they don't know how to do it themselves.  If I was as clever with finances as many of you profess to be I wouldn't bother going to a financial planner either and I would also have known better than to do what Storm suggested.  Unfortunately I didn't know.
> 
> Are financial planners professionals who can be trusted or not?  Make up your minds.  If they can be trusted then none of us made a mistake in going to Storm.  If they can't be trusted then we made a huge mistake in going to Storm.  In which case why were they licensed to give financial advice.  Why were they members of the Financial Planning Association.




 All i am saying , is DYOR and think about the consequences, honestly, if you thought the repayments on your loan were to high, question it.

And i don't profess to be clever when it comes to all things financial, what i do hold as utmost importance is research and  responsibility.

If the electrician came to my house and told me i needed it rewired with 6mil twin and earth for ten grand, i would think thats a touch excessive, maybe i should find out if thats right and do a little research, i may go to a few forum sites, read a little about it before i hand over the spondoolies.


Because what i know about electrical work i can write on an aspirin with an axe, but i am sure i would have a good handle on it before i ended up parting with my hard earned. 

And to use your "brain surgeon " as an example, well yes i would do a few google searchers about the surgeon and the type of surgery, lets face it , what if it was Dr Patel who was doing the surgery , a simple google search years before described him as an attrocious surgeon who was a dismal Quack at best. So yes i would have to say i would do some research,  not just say, go ahead cut my head open and lets go. 

Nescaffe still havent replied to my Email, but thats ok , Breville made the kettle that boiled the water, so they are also in my lawsuit, and the council  who run the pipes, and that plumber who piped it to the house.


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## Harleyquin (29 August 2009)

twiceshy said:


> Did anybody read the rest of the thirteen pages?
> 
> QUOTE Margin loans are not regulated under the Corporations Act.  ASIC's ability to deal with mortgage and loan issues is limited, because these matters are ordinarily determined by the general law of property and contracts UNQUOTE
> 
> ...




Not all of us were with storm in 2006 or 2007 many joined after that time and timing shouldn't be an issue.  If there's a problem it should be sorted.  Had it been sorted then none of us would now be in this position.


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## Julia (29 August 2009)

Harleyquin said:


> As I said 'Aren't you lucky you knew that.'  It appears that's all you know.
> 
> Storm's investment strategy has been a standard but risky form of investment for as long as people have been investing in the stock market.  It may not have been real wonderful, but it wasn't crap.  What is crap is the blinkers that you have on regarding the whole issue here.



I would disagree that the Storm model was a 'standard (but risky) form of investment.
Most financial planners would not recommend that people engage in levels of debt they could never attempt to service.





> The banks don't need to be involved at all.  Their involvement was pure greed.



Really?  From whom would you have borrowed then?



Judd said:


> Garpal Gumnut,
> 
> No matter how hard you try, you will never get through that, putting any CBA involvement aside, it was not margin loans (darn safe if managed properly, ie dont get the LVR above 20% if you wish to sleep soundly at night unless you are really hairy chested) and/or borrowing against the house which was the problem per se.  It was the sheer amount of debt incurred which remained constant while the market went south.
> 
> ...



This is the bit that we keep coming back to, isn't it.   How could even the most uneducated investor imagine they were going to service a $600,000 loan on an age pension income?
Why didn't they ask the adviser how this could be done?
There would simply be no plausible answer to such a question.




darkside said:


> I am not really 100% with you there, i don't think it is the banks responsibility to make sure and certain that you are able to service the loan , thats why the bank takes security, if you can't repay the loan they get their money back.
> 
> It's the banks job to lend you the money, hell, thats what they do, thats how they make their money. I don't think they should be giving too much financial advice, thats what the FPs are for and to a lesser extent do some research.



Correct.  Except for the financial planners actually employed by the banks, it's not the bank's business to offer financial advice.
If Storm investors had taken their whole situation, including Storm's advice, to a bank FP, I'd be very surprised indeed if such advice would have been endorsed.







gooner said:


> Darkside
> 
> Whilst I agree it is the borrower's responsibility to ensure they know what they are getting themselves into and that they can afford it, from a legal point of view, there have been some cases where borrowers have won their case due to predatory lending, where the bank would know the borrowers could not pay.
> 
> ...



That's true, and the banks seem to be admitting they were less than assiduous in the checking of application details.
That does not, however, remove responsibility of undertaking any given level of debt from the investor.




Harleyquin said:


> I disagree that the investor should take some blame.  I am not an astute investor that's why I went to a financial planner.  That's why I needed to take the advice from an expert in the financial field.  If I was able to educate myself I wouldn't need to go to a financial planner.  There does need to be some legislation in place to protect those seeking financial advice because they don't know how to do it themselves.  If I was as clever with finances as many of you profess to be I wouldn't bother going to a financial planner either and I would also have known better than to do what Storm suggested.  Unfortunately I didn't know.



Harleyquin, I quite see the point you're making, but surely if someone tells you you can borrow twice the value of your house, wouldn't you ask
"really"?  "How does that work?"  
It simply doesn't make sense to even the most financially uneducated.
It's like going into the supermarket and buying a trolleyfull of goods, value $100 when you only have $50 to spend.





> Are financial planners professionals who can be trusted or not?  Make up your minds.  If they can be trusted then none of us made a mistake in going to Storm.  If they can't be trusted then we made a huge mistake in going to Storm.  In which case why were they licensed to give financial advice.  Why were they members of the Financial Planning Association.



It's unreasonable and unfair to generalise against all financial planners on the basis of Storm's completely unprofessional behaviour.





> Why didn't Storm Financial explain to their clients what a margin loan was.  Why didn't many of us find out until it was too late.  I admit I'm a first time investor and I had no idea that I had to educate myself before taking financial advice from an expert.



Gee whiz, why didn't you ask?????

If you didn't know how a margin loan worked why in the name of heaven would you engage in it?





> Does that mean that if I am advised to have brain surgery from a brain surgeon that I'll have to educate myself about brain surgery first before I have the operation or do I trust him because he's a professional.



That's not a realistic analogy.
If you were advised by a brain surgeon to have surgery, you wouldn't need to know the first thing about how such a procedure would be carried out to ask to see the X-ray and have it explained to you, ask what the operation would accomplish, what the expected outcome would be, and what the long term prognosis would be. 
 And if you didn't completely understand the response, you would hopefully persist with your questions until you did, or ask for a referral for a second opinion.




> We need genuine professional financial planners who can be trusted and it looks like the only way we are going to achieve that is to legislate.



Nonsense.   There is way too much legislating for the tiny percentage of  crooked so called professionals.



> This does not mean for one moment that if you want to borrow against your home to take out a personal loan to buy a car or similar that the legislation needs to cover those types of personal loans, it simply means that FP's/Banks cannot advise/lend huge margin loans for financial planners to play the stock market on their clients behalf.



Re this last suggestion, they could only do that, i.e. 'play the stock market', as you put it, if the client gave them permission to do so.





> Some of you are just going to accept that we all have to start somewhere with this understanding of how the financial world operates.  Give yourselves a pat on the back if you've made it.  I'm still in financial preschool and it's been a painful journey so far.  I've been to hell and looking for that arrow that says 'this way back.'



And it's been a very hard lesson.   I'm really sorry that you are in this situation which must be unbelievably stressful.

But placing total blame on every aspect other than investors will only mean that something similar could easily occur again.

Good luck.


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## Harleyquin (29 August 2009)

Solly said:


> *"FPA membership can't be bought: chief"*
> 
> "Process requires due diligence and audit
> Claims that FPA membership carries no obligation and is simply bought are untrue, the association's chief said."
> ...




What does the FPA do to ensure that their members are genuine professional planners.  Do their members have to keep the FPA up to date with their standard of advice.  I don't understand how storm 'got away' with the standard of advice they were giving for so long without something being done by the FPA.  Does the FPA have something in place to study their member's methodology annually to make sure everything is as it should be or do they simply depend on an investor or two making a complaint.  Surely they should have something in place themselves to ensure that their members are not putting their clients finances in jeopardy.

If what I'm reading on this forum is any indication, I see no reason why anyone should ever bother going to a financial planner.  

If you know what you are doing - you don't need a financial planner.  

If you don't know what you are doing - then you have to learn what you should and shouldn't be doing before you go to a financial planner.  By this time you are educated enough to do it all of your own investing and - you don't need a financial planner either.  

The FP's are effectively out of a job if this is the case.

Let's just get rid of the FP's and the FPA they have just made themselves all redundant!!!


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## Harleyquin (30 August 2009)

Julia said:


> I would disagree that the Storm model was a 'standard (but risky) form of investment.
> Most financial planners would not recommend that people engage in levels of debt they could never attempt to service.
> 
> 
> ...




You obviously have no idea what storm investors were told.  We were told that we could borrow up to 60% of our valuation and anything over that was unsafe.  We were never told that they would be borrowing twice as much as our home was worth.  We were never told that we would have a second loan, called a margin loan, so how were we to question something that we were not told about.

When we went into storm we were well aware that we had to ask lots of questions but being a first time client we were taking in a lot of information that was completely new to us, we asked as many questions as we could, we even asked 'are there any other questions we should be asking'.  I don't know how we could have asked anything more.

Your comment ''Really?  From whom would you have borrowed then?'' - why should we be expected to borrow at all, we never asked to borrow anything and we did question the safety aspect of borrowing so much.  We were assured that the money borrowed would be well looked after by experts and we had nothing to worry about.  Before investing we talked to others who were with storm and they assured us that their investment strategy was sound and it was the best thing they had ever done.  I'd be interested to hear what they have to say now.  I was taking in so much information that we completely forgot about the interest we would be paying, we only thought about that aspect of the investment at a later stage.  Call it information overload if you will.

I do agree with all of you that we should have done more research before handing our money over or before borrowing.  I do also agree with you that we should have sought the advice of an accountant or someone else.  However hindsight is a truly wonderful thing we now realise the many things that we should have done and we certainly won't be making the same mistake again.  We'll never have enough assets or money to make the same mistake again.  We all make mistakes and we have made unknowingly the biggest mistake of our lives in going to storm, but we had no idea that this could possibly happen and our planner assured us that we had chosen a very safe level of investment.  We trusted that he knew what he was talking about and he was right.  

We are well aware that we have made many mistakes.  The biggest mistake we made was trusting a financial planner.  I apologise if I've generalised against all financial planners I'm sure there are some genuine financial advisors out there but we didn't find one and now it's too late for us, they have destroyed us enough financially to the point where we may still have our own home but will only have the old age pension to live on.

I'm taking on board all that you are telling me on this forum and it's helping.  The storm planners were very good salesmen and we knew we needed help with our finances as we did not understand how to help ourselves financially.  There will never be a next time for us as we will never give another financial planner our trust I'd rather die broke than trust another one.


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## Monario (30 August 2009)

Garpal Gumnut said:


> So what you are saying is that it was not Storm's fault.!!!!!!!!!!!!!!!!!!!!
> 
> Are you a moneyspider from SICAG ?
> 
> ...





Well GG I have learnt my lessons, I hope!! and feel I wont be here 8 years from now....


Yes we are investors in a dodgy product, but were are also victims.....

Victims of systems that failed, and should not have!!!!

Victims of the poor performing FPA and ASIC...

Vistims of banks who did not have their customers best interes at heart, which if you look at there profiles all proudly claim to have!!


If these governing bodies, and the government allow these sort of activities to continue without legislative changes to protect against these dodgy companies and investments been setup, they are no better than the conmen and criminals that run them, therefore I say why waste my tax dollar financing such useless bodies as these...

Sure, we made a mistake falling into these investment traps... But they should never have been allowed to get off the ground, and if they did, how the hell did one of these bodies not pick something up in their 15+ years of operation!!!!


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## Ironhalo (30 August 2009)

http://www.youtube.com/watch?v=WINDtlPXmmE&feature=related

SICAG's inspiration according to the website. I quite like it, but only because I have a general hatred of humanity...


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## Anastasia (30 August 2009)

There have been comments made off and on now over the many months of how could people/ pensioners on low/ no incomes expect to pay off such massive loans....didn't they question it?

Well, we did several times and this was the answer, more or less, that we received each time; "You wont. You will die owing a big debt, and your kids/ estate will inherit that big debt, but they will also inherit an even bigger income. That is how the big boys play the game. Do you think Kerri Packer is going to die with no debt? Hell no... he will have massive debts and be smiling because he will have left an even bigger income. This is how you get ahead with investments and making money...and this is how you get ahead of the tax man, or he just takes it all otherwise".

Now this may not be what everyone who asked was told, but I remember it distinctly and though it made sense as I have read articles/books about strategies used by "the big boys" and indeed a lot of their wealth is paper money, borrowed monies etc.

I/ we didn't for one moment pretend we were in the same league as the "big boys" but decided that if this strategy is what is used in the industry, why shouldn't we use it. I guess we now know the reason... the down turn of the market. But we were also assured/ promised that we would never get a margin call as we would be looked after by Storm. We did ask lots of questions. But we always got what we though were reasonable answers.

You know the rest.


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## bunyip (30 August 2009)

Anastasia said:


> There have been comments made off and on now over the many months of how could people/ pensioners on low/ no incomes expect to pay off such massive loans....didn't they question it?
> 
> Well, we did several times and this was the answer, more or less, that we received each time; "You wont. You will die owing a big debt, and your kids/ estate will inherit that big debt, but they will also inherit an even bigger income. That is how the big boys play the game. Do you think Kerri Packer is going to die with no debt? Hell no... he will have massive debts and be smiling because he will have left an even bigger income. This is how you get ahead with investments and making money...and this is how you get ahead of the tax man, or he just takes it all otherwise".
> 
> ...




Rather than question how you were going to pay off your debts, I think the comments have been more about how Storm clients expected to service their loans.
This is, after all, what it all boils down to in the end.......if you borrow so much that you can't meet the interest payments, then you've effectively sealed your financial fate.

I accept that Storm victims were generally lacking in financial and investment acumen. Yet I'm still perplexed at how anyone could borrow money without considering how they were going to pay the interest.
To quote Harleyquin...._*'we completely forgot about the interest we would be paying, we only thought about that aspect of the investment at a lat**er stage.*'  _

Consider a situation where Harleyquin or any other Stormer on an income of say, 60 grand, goes to a bank and asks for a loan of 10 grand to put a new kitchen in their house. 
The bank says _'We'll lend you the 10 grand no problem. In fact we'll lend you 150 grand so you can renovate the whole house, build that granny flat you've always wanted, put on an extra room or two for the kids, buy that pool you've always dreamed about. You might even want to get yourself a couple of new cars as well, and take that European cruise you've been talking about.'_
OK, what are you going to do? Do you grab the 150 grand as quick as you can, or do you stop and consider the interest payments and if you'll be able to meet them?
If your 60 grand income leaves you with only a 5 grand surplus after paying income tax and meeting living expenses, then blind Freddy can see that it's hardly prudent to take on a level of borrowing that requires you to find an additional 10 grand or more each year just to meet the interest payments.
It doesn't take years of investment and finance experience to work it out. Nor do you need to be a mathematical genius.
Common sense and thirty seconds punching figures into a calculator are surely going to tell you that a 5 grand surplus won't fund a 10 grand interest bill.


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## cuttlefish (30 August 2009)

Anastasia said:


> "You wont. You will die owing a big debt, and your kids/ estate will inherit that big debt, but they will also inherit an even bigger income. That is how the big boys play the game. Do you think Kerri Packer is going to die with no debt? Hell no... he will have massive debts and be smiling because he will have left an even bigger income. This is how you get ahead with investments and making money...and this is how you get ahead of the tax man, or he just takes it all otherwise".




Bond and Skase are also counted among the number who applied that strategy very effectively .... for a time.

Did anybody ever ask why it was so easy for people with zero financial acumen to get so wealthy.   There's some useful BS indicators/warning bells in finance ... one is if someone you don't know from a bar of soap is going out of their way to sell you an investment scheme, property or any other kind of money making venture the first question to ask is .... if its so effective, why are they trying so hard to push it on to me, someone you barely know ... rather than keep this secret financial success story all to yourself.  

So if someone gives you a free overseas trip just for putting money into their investment scheme ... CLANG CLANG CLANG ... if someone gives you a free flight to look at an investment property ... CLANG CLANG CLANG ... if someone offers to make you as wealthy as Packer and Murdoch without you having to lift a finger ... CLANG CLANG CLANG.

But thats all not much use in hindsight.


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## Solly (30 August 2009)

Anastasia said:


> There have been comments made off and on now over the many months of how could people/ pensioners on low/ no incomes expect to pay off such massive loans....didn't they question it?
> 
> Well, we did several times and this was the answer, more or less, that we received each time; "You wont. You will die owing a big debt, and your kids/ estate will inherit that big debt, but they will also inherit an even bigger income. That is how the big boys play the game. Do you think Kerri Packer is going to die with no debt? Hell no... he will have massive debts and be smiling because he will have left an even bigger income. This is how you get ahead with investments and making money...and this is how you get ahead of the tax man, or he just takes it all otherwise".
> 
> ...




Anastasia, what was the most surprising thing for me was the statement to me by a Stormer that the debt was never to be paid off. This strategy has never been presented to me as a "retail investor". I found this a very alien method for creating wealth for private investors and the thought of carrying large debt levels in markets that can be so volatile was daunting.

Their belief in the Storm model and faith in the principals was unshakable. I was at a social gathering with this Stormer before the collapse and when the matter of some jitters about Storm were circulating. At this stage I had no idea of what lay ahead but I started to ask some general questions about Storm and its model and whether it would be prudent to seek the opinion of others to ensure that their investments were safe.

I was quickly told how solid the Storm model was, that there were safeguards in place, Storm had weathered previous large markets adjustments, the principals where mega rich and they have large property holdings in TVL and around the country, had a private jet, the Comm Bank is behind them, etc, etc. Their last part of the conservation is still very vivid to me where I was told that there's nothing to worry about as EC will sort it all out. 

Then when it all went belly up, I was very seriously concerned for a time that their losses may have become too much for them to cope with. They lost their whole life savings and effort. 

I admire their strength and determination to battle the dark days they have been through and to cope and survive. I wish them all the best and hope one day I will see the spark of joy back in their eyes.


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## Anastasia (30 August 2009)

bunyip said:


> Rather than question how you were going to pay off your debts, I think the comments have been more about how Storm clients expected to service their loans.
> This is, after all, what it all boils down to in the end.......if you borrow so much that you can't meet the interest payments, then you've effectively sealed your financial fate.....




I agree that we should have asked how we were to service the loans....in fact we did...and this was the answer: " You don't have to service the loans. The scheme pays it for you. Interest from loan to be paid 4%, interest earned from investment 11%, fund raises enough cash to service loans. If the market goes down, don't worry about it...there will be enough money in the dam to survive and besides we have arrangements in place where you won't get a margin call.

And this was what happened over the 11 years we were with Storm. Market dipped several times and we survived without a graze to our knees.


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## Harleyquin (30 August 2009)

bunyip said:


> Rather than question how you were going to pay off your debts, I think the comments have been more about how Storm clients expected to service their loans.
> This is, after all, what it all boils down to in the end.......if you borrow so much that you can't meet the interest payments, then you've effectively sealed your financial fate.
> 
> I accept that Storm victims were generally lacking in financial and investment acumen. Yet I'm still perplexed at how anyone could borrow money without considering how they were going to pay the interest.
> ...




Bunyip you are spot on when you say 'if you borrow the money you consider the interest repayments as you have to repay that money'  I would under normal circumstances think the same way.  The Storm model was 'sold' to us as a strategy, we would never have to worry about those things as we were paying storm to manage this interest and it wasn't to be our concern, they were the experts who were going to look after us.  The point is the loans were far too great and the margin loans were never explained.  If we had known that we had a second loan called a margin loan we would have been very worried.  This is a genuine investment strategy but not for low income workers or retirees that's where storm and the banks made their big mistake.  I believe that it was storm policy NOT to mention the interest but to steer us all away from that line of thinking.

There are people out there who would like to go and do this all over again but they are the big earners paying big tax and they can afford to do this.  The problem was that we were all told that we could do it too with storm looking after us.  I have read all of your criticisms and knowing what I now know I agree with what you are saying but at the time we knew none of that.  

This is also a multi layered problem though, the banks involved still lent a massive amount of money to low income workers.  I earn less than 20 thousand a year gross and had a million dollar loan and didn't have the know how at that time to realise that it could be this dangerous as I firmly believed storms promises that they would manage this for us.  Now we hear that the CBA's monitoring system was out of action between Sept and Oct when the big drop came it wasn't being monitored.  We are all still learning and I don't like what I'm now learning.  

When Storm advised us to borrow a large amount of capital, all the banks had to say to storm was 'no way these people cannot afford it and we will only lend them x amount of dollars;  but they didn't - what did they do -they added to the problem by inflating our incomes to six figures and revaluing our properties to many times their true valuations and we all have the proof that they have done this.

We are members of SICAG and it's been the best thing to come out of all this.  Suddenly there were thousands of people whe were left dead in the water financially and no idea how and why.  I know that you who are very financially aware will criticise this and I don't care the point is we are not all as financially aware as many of you obviously are...but at this rate we are getting there really fast.  SICAG has been a great emotional support and the committee and support they give us has been amazing.

When something like this occurs there is no support agency or any description set up to cope with such a problem.  Lifeline were shocked but no help they could only listen and the other agencies that will come to your mind were exactly the same.  Even the doctors, no idea, none of this has ever happened to them and they cannot possibly understand what it is like.  It is soul destroying.  Our biggest crime was we trusted who we thought was a genuine financial planner and we are now paying the ultimate price for giving them that trust and the banks are very much a part of this, they were the ones who backed this scheme financially.

The banks were very aware of the interest we were paying that's why they did it , they all made a fortune from storm and it's clients, we were their cash cows.  Now that the all ords have gone up we would still be in the market, if storm had sold off when the market was going down and bought up when it crashed none of us would be in this position,  They didn't do what they told us they were going to do.  We have all been lied to and the banks have helped them do it with their irresponsible lending, they lent massive amounts to storm during 2008 when the market was going down.  Why?


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## mellifuous (30 August 2009)

I'm not an investor in Storm, and I can tell you that I never would have been.

About 25 years ago when I got my first bag of money, I was 'advised' to invest into in an N.A.B. product - and what a waste that was.

I learnt there and then not to trust 'financial advisors' - I figured they were self interested and commission driven.

Instead, 20 years after retirement, I took the advice of a friend and invested with City Pacific's FMF.

The rest is history.  A lot of us lost a lot, no matter where we invested.  I'm pi77ed big time and I'll fight every inch of the way to get as much as I can back.

I admire your group for its tenacity. I only wish we had the same cohesion amongst FMF investors.

You folk fell where I never would, and I fell where you probably never would.

There's a trap out there for each of us, all we have to do is find it, and fall into it.


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## Harleyquin (30 August 2009)

mellifuous said:


> I'm not an investor in Storm, and I can tell you that I never would have been.
> 
> About 25 years ago when I got my first bag of money, I was 'advised' to invest into in an N.A.B. product - and what a waste that was.
> 
> ...




Thank you for that.  SICAG has been the best thing to come out of the storm debacle.  Knowing what I know now I wouldn't touch storm with a ten foot pole unless i could give them all a decent whack with it.

However the idea of a group such as SICAG is brilliant and I would like to see something set up for everyone who needs this type of emotional, financial, legal and personal support.  The guys on the committee are just brilliant.  They have really put themselves on the line to help everyone.  They say two heads are better than one, well two thousand are a two thousand times better than one.  We have all realised there is a deep need for this type of group.  We are only one group - this forum has shown me just how many others are in a similar position.

I would dearly love to find a decent genuine person who can help us with our finances and the sad reality is - it's never going to happen.  We've learnt the hard way you have to do it yourself and forget about the financial experts - they don't exist.


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## bunyip (30 August 2009)

Anastasia said:


> I agree that we should have asked how we were to service the loans....in fact we did...and this was the answer: " You don't have to service the loans. The scheme pays it for you. Interest from loan to be paid 4%, interest earned from investment 11%, fund raises enough cash to service loans. If the market goes down, don't worry about it...there will be enough money in the dam to survive and besides we have arrangements in place where you won't get a margin call.
> 
> And this was what happened over the 11 years we were with Storm. Market dipped several times and we survived without a graze to our knees.





I doubt if you got a loan at 4% interest. Nor does an investment in the stock market pay 11% 'interest'. 
A simple check or two would have made this information available to you, even if you weren't particularly financially savvy.

The fact is that it really was quite silly and irresponsible of you to swallow their lies, rather than put in a small amount of effort to find out if their information was accurate.
 Sorry if that offends you, but it's the truth.


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## Anastasia (30 August 2009)

bunyip said:


> I doubt if you got a loan at 4% interest. Nor does an investment in the stock market pay 11% 'interest'.
> A simple check or two would have made this information available to you, even if you weren't particularly financially savvy.
> 
> The fact is that it really was quite silly and irresponsible of you to swallow their lies, rather than put in a small amount of effort to find out if their information was accurate.
> Sorry if that offends you, but it's the truth.




I'm not offended....after what we have been through do you think your comments/insults can offend me. 

However, for the record, we did do a lot of research...actually even confided with our accountant who is very well know and has a very good reputation...and yes we did have  loans and returns at those percentages way back when we first got in.... but you are entitled to your view and your "all knowing everything" attitude. So be it...


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## bunyip (30 August 2009)

Harleyquin said:


> This is also a multi layered problem though, the banks involved still lent a massive amount of money to low income workers.  I earn less than 20 thousand a year gross and had a million dollar loan and didn't have the know how at that time to realise that it could be this dangerous as I firmly believed storms promises that they would manage this for us.




You were offered a loan of 1 million dollars and you accepted it, even though your income was less than 20 grand.
Sorry, but a 10 year old kid could work out that you'd never meet the loan commitments, even without the market crashing. 
Anyone who takes on that level of debt on such a small income to invest in the stock market, of all things, is very naive to believe that they, the investor, should bear none of the blame when it all falls apart.

Certainly, the banks and Storm were complicit in your downfall. Add in a sizeable stock market correction, combine it with a 'sit on your hands and do nothing' policy from Storm as the market slumped, aided and abetted by you, the investors, by not instructing Storm to get you out of the market before your investments were decimated.....your financial demise was assured.

Yes, I'm well aware that some clients did in fact instruct Storm to cash them out, but Storm ingored those instructions.
For that, Storm deserve absolute condemnation.
But as investors who were employing these people, it was the clients responsibility to insist that their instructions were followed, and to make sure that they were.
If they failed to do so then that's further reason why they must accept part of the blame for what happened.

Don't misunderstand me - in no way am I condoning the actions of Storm and the banks. 
Both of them were unprincipled, dishonest and incompetent.
Both of them must accept their part of the blame. Both of them must be punished.
But the blame doesn't belong 100% to them - part of it belongs to you.


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## mellifuous (30 August 2009)

I don't think the objective view is really satisfactory - to my mind, it's the subjective view that's important.  Further, I'm sure one size does not fit all.

From an outsider's perspective, the mere fact that the ANZ bank has given certain undertakings about homes is significant.   Even the CBA's utterances are a valuable insight to the impact of this mess.  It's clear the banks have liability and that must give hope to storm investors.

In the FMF, the CBA extended a facility from $150m to $240m when the fund couldn't even pay back the initial $150m.   I liken our circumstances with respect to the Fund as to individuals in Storm.  I think the CBA has a lot to answer for.

As far as I understand it, Banks don't tend to care about 'consequences' - their prime concerns are profits and loan security.   In the ordinary course of business, these are perfectly normal pursuits.

However, there are many circumstances where banks should not lend, and they should restrain their desire for profits in preference to not putting others at risk of financial ruin as a consequence of lending.

'I told you so' doesn't help - regardless of the motivation for the investment. Individuals are badly hurt and are entitled to recover when and as much as they can.


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## Big Max (30 August 2009)

Harleyquin said:


> Thank you for that.  SICAG has been the best thing to come out of the storm debacle.  Knowing what I know now I wouldn't touch storm with a ten foot pole unless i could give them all a decent whack with it.
> 
> However the idea of a group such as SICAG is brilliant and I would like to see something set up for everyone who needs this type of emotional, financial, legal and personal support.  The guys on the committee are just brilliant.  They have really put themselves on the line to help everyone.  They say two heads are better than one, well two thousand are a two thousand times better than one.  We have all realised there is a deep need for this type of group.  We are only one group - this forum has shown me just how many others are in a similar position.
> 
> I would dearly love to find a decent genuine person who can help us with our finances and the sad reality is - it's never going to happen.  We've learnt the hard way you have to do it yourself and forget about the financial experts - they don't exist.




GG, Ironhalo et al. Your comments please?


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## bunyip (30 August 2009)

Anastasia said:


> I'm not offended....after what we have been through do you think your comments/insults can offend me.
> 
> However, for the record, we did do a lot of research...actually even confided with our accountant who is very well know and has a very good reputation...and yes we did have  loans and returns at those percentages way back when we first got in.... but you are entitled to your view and your "all knowing everything" attitude. So be it...




I'm pleased my comments don't offend you - they were never intended to - but it's regrettable that you think I'm trying to insult you.

Throughout this thread I've attempted to bring some balance to the discussion. 
I've disagreed with the people who've laid all the blame on one party. It's just not realistic to claim it was all Storm's fault or all the banks fault or all the fault of the investors.
Similarly, I've disagreed with those who have attempted to absolve any of the above parties from all responsibility.....that also is unrealistic.

Whether you do or don't agree with me, whether you are or are not offended or insulted by what I say, I'll stick with my carefully considered opinion that every party involved bears part of the responsibility for what happened.....Storm, banks, and investors. And probably ASIC as well.

And for what it's worth - don't ever ask an accountant for investment advice, or even for his opinion about an investment that you're considering. 
Accountants are experts in taxation matters, but taxation and investment are two separate areas, even though one affects the other. 
Investment advice is outside the area of expertise of accountants.
Sure, some accountants are also licensed investment advisers, but all that really means is that they can legally sell you investment products on which they earn a commission. Guess which investments they'll recommend - the ones that pay them the best commissions.
I'm not suggesting that your accountant was an investment adviser trying to sell you a product - it sounds like you simply ran the Storm proposal past him to get his views.
The fact that he or she appears to have commented favourably on Storm's investment model, gives credence to my view that accountants should not be asked for advice or opinions about investments, unless your queries relate specifically to the taxation implications of investments.


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## awg (30 August 2009)

2 really interesting submissions to the inquiry blew me away

One from the Storm IT guy

Another one from a Storm employee with assets of over $10 million

sorry I cant quote the submission numbers, but they are mind boggling really (I think they are both skint now)

Read the Financial Review, and it regularly has stories about very smart businessmen worth many millions, gone broke.

Happens all the time, will never stop


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## bunyip (30 August 2009)

Big Max said:


> GG, Ironhalo et al. Your comments please?




Max

I'm happy to accept your invitation to comment.  
Harleyquin's glowing endorsement of SICAG doesn't change the views that I've expressed on a number of occasions......

* SICAG are to be commended for the progress they've made towards getting justice for Storm clients.

* They should be going hard after Storm as well, rather than focusing solely on the banks.

* The endorsement of the Storm fees model should be removed from the SICAG home page- it's crazy to make favourable comment on a fees structure that belted clients with 7% up front fees.

* There's a conflict of interest in the SICAG committee being partly comprised of former Storm advisers and/or their relatives.


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## cuttlefish (30 August 2009)

Harleyquin said:


> Does that mean that if I am advised to have brain surgery from a brain surgeon that I'll have to educate myself about brain surgery first before I have the operation or do I trust him because he's a professional.




Very few people would have any kind of major surgery without getting at least a second and often a third opinion and asking a lot of questions about the operation and potential risks and side effects.  

Especially if it was offered by a surgeon that had a big flashing neon sign on his building and offered you pastic surgery that was going to take 25 years off your apppearance.

Also with surgery, the patient is nearly always referred to the surgeon by another qualified medical professional (typically a GP).  And reputable surgeons will often encourage patients to get a second opinion from another surgeon.  And in spite of all of this there are still many people that end up with complications and unexpected and life changing results from having major surgery - and few of them end up succesfully suing because they were fully warned of the risks.


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## darkside (30 August 2009)

Big Max said:


> GG, Ironhalo et al. Your comments please?




Max

Who are you trying to convince, us, you , "Money spiders" clearly you have a glowing testimony from a happy person,( fantastic) but are you out there trying to help people through a difficult time or sell a product.????

Lets get it in perspective, we are not the enemy, all people have done is offered views or advice, not expect you to gloat over a joyous post ..


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## Garpal Gumnut (30 August 2009)

Big Max said:


> GG, Ironhalo et al. Your comments please?






bunyip said:


> Max
> 
> I'm happy to accept your invitation to comment.
> Harleyquin's glowing endorsement of SICAG doesn't change the views that I've expressed on a number of occasions......
> ...




My thoughts exactly bunyip.

Max

Would you care to comment on bunyip's points ?

gg


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## Ironhalo (30 August 2009)

Max,

How many times do you want me to say it (in six different languages) that I applaud the work of SICAG? Have you not read my previous posts?

My biggest bug bear is that there are still people in SICAG who are EC sycophants who still adamantly believe that they were screwed by the big, bad evil banks (and don't get me wrong, a seperate level of hell is reserved for those involved at CBA/Colonial) but it's time to look at the whole picture.

You have repeatedly said 'well the banks were the only ones we could target really, so hence that was out strategy.' Wrong.

Now that we have the banks out of the way, how about we hold Manny/Julie over the barrel for their part in all this including:
1. Manny moaning about the banks, but then happily taking clients on bank subsidised jaunts around the world.
2. Taking millions of dollars as the company went under under dodgy pretenses (and signing a relative to the board of directors to do so), and
3. Why Storm was still signing on clients in Dec while insolvent.

I say it's time we turn on the advisers now as well, who were happily skimming percentage commissions off the top of investor step-investments as they drove their elderly clients just before Storm folded into financial ruin.

Guess there's no chance of that there with so many of them lurking in the SICAG membership/fan club eh? Re: Ron Jelich, Andrew O'Brien et al....I could go on?

I applaud what you've done, I just think some of the individuals who have suddenly 'seen the light' and who have aligned themselves with SICAG to be offensive to all five senses.


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## Grey Ghost (30 August 2009)

> 2 really interesting submissions to the inquiry blew me away
> 
> One from the Storm IT guy
> 
> ...




AWG can you elaborate on why you can't quote the submission numbers?

These submissions sound like they would be very informative.


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## bunyip (30 August 2009)

Ironhalo said:


> Max,
> 
> How many times do you want me to say it (in six different languages) that I applaud the work of SICAG? Have you not read my previous posts?
> 
> ...




Ironhalo

I think we're probably wasting our time in trying to convince Max that we're not the enemy and we're not entirely against SICAG.
He clearly holds the rather narrow viewpoint that if we have any criticism at all of any aspect of SICAG's modus operandi, if we suggest some way in which they can do an even better job of representing the interests of their members, then we must be dead against them.

Nothing could be further from the truth - but Max believes what Max wants to believe.


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## Smiley (30 August 2009)

Grey Ghost said:


> AWG can you elaborate on why you can't quote the submission numbers?
> 
> These submissions sound like they would be very informative.



I think he is referring to Allan Mcdonald's submission - IT guy submission no. 376; ex storm adviser who lost millions sounds like Ron Jelich.


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## awg (30 August 2009)

Grey Ghost said:


> AWG can you elaborate on why you can't quote the submission numbers?
> 
> These submissions sound like they would be very informative.






Smiley said:


> I think he is referring to Allan Mcdonald's submission - IT guy submission no. 376; ex storm adviser who lost millions sounds like Ron Jelich.





I just cant remember that is the only reason.

Solly puts them up, and I have only read a few

It was in the 300s..between 310 to 340 if memory serves me

It wasnt Jelich, it was a female who had done some "marketing consultancy" work for Storm, and objected, amongst other things, to being treated by the banks as a ex-Stormer, as they evidently were dealt with by a different process.

What surprised me, is she demonstrated that she was a sophisticated investor, as she had shares worth more than $10 million, built up over a long time, but still got caught out by basic investment mistakes

ie over-gearing, non-diversification, a failure to recognise that market crashes are inevitable, poor risk management, inaction, greed, etc etc.

The IT guy was at the beating heart of the mess and confesses that he realised the whole thing was poorly run, but that he was sucked in by salesmanship and employee loyalty, and lack of investment knowledge.
A very honest submission. 

I do not look down on people who lost their money, I have had a long-term interest in these matters, but still make mistakes, and sometimes feel naive.
I lost money in the GFC, but was fortunate to cut my gearing at the outset, as per my plan, hence my interest..could have been me!

A good salesman can part the cash from you amazingly well, and it would have taken immense discipline to pull out of something that had been so successful.

I once worked for a wonderfully gifted salesman. He completely believed himself, and was so convincing, he often made sales to people who did not need it. That opened my eyes right up..he was a so-called Christian, but he would have sold his daughter to the slave trade if the commission was high enough.

BTW, as per my very early questions..whatever happened re the situations where people requested redemptions, but they were not acted on...I am not a lawyer, but that is hideous.

People responsible for that should be in jail IMO, no doubt at all, white collar crime...if you work for an organisation that is acting in a unconscionable manner, then you have no alternative but to object in writing, resign, or face the consequences.

Sometimes I think the tribal justice system makes more sense than ours.
If you stuff up peoples lives, make good, or they decide what happens to you


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## Harleyquin (30 August 2009)

bunyip said:


> You were offered a loan of 1 million dollars and you accepted it, even though your income was less than 20 grand.
> Sorry, but a 10 year old kid could work out that you'd never meet the loan commitments, even without the market crashing.
> Anyone who takes on that level of debt on such a small income to invest in the stock market, of all things, is very naive to believe that they, the investor, should bear none of the blame when it all falls apart.
> 
> ...




We never asked to go into the stock market, we asked for financial advice.  When we were told how much we could borrow as a home loan we voiced our concerns to storm and to others, we were told 'this is how financial planners invest today and it is tax effective.'  We were paying so much PAYE tax that I was virtually working for nothing.  

Once we agreed to this financial advice we knew we were taking on a loan for a little over half a million and we only found out about the margin loan, for another half a million, after the collapse and were horrified that we had a second loan.  In hindsight we should have been aware of it but we weren't.  We can certainly accept our share of the blame for that but we were never made aware by storm that we had a second loan.  I thought we may have been the only one but since asking other stormies I have found out that this in fact was a common occurrence.   I would have asked about margin loans if I'd known what one was, I had never heard of them.  Storm may have assumed we knew, we didn't, and I believe that they deliberately down played the margin loan issue. 

As far as the loan commitments were concerned we were told not to worry about the debt, not to worry about anything associated with the debt just leave it all up to storm and we did.  The common thread running through all the submissions to the parliamentary inquiry tell us the same thing was told to everyone irrespective of where they lived so the advisors were well drilled by their boss.  They appeared to be a very successful company who knew what they were doing.  We asked our advisor what qualifications he had, he was well qualified.  I think I've said this before but Storm were members of the FPA and ASIC approved.  The FPA and ASIC obviously supported storms strategy or both of them would have done something about it long before this collapse.  What else do you ask?

I thought I had done enough research before investing with these people.  I asked storm investors who had been with storm for some time, saw a lot of extremely clever people at the storm seminars they were very happy with their investment and recommended storm.  I know other stormies who asked accountants and others who were recommended to storm by their banks.  I was told that accountants couldn't give financial advice - is this right?  Who would you have gone to, to find out more and what other research would you advise that we should have done?

I asked another financial planner after the collapse if we should have asked a lawyer and he said 'why there was nothing legally wrong with their paperwork it wouldn't have helped.'  I do agree that we should have asked someone else to explain their strategy to us but I still don't know who we should have asked.  It's time to clean up the financial planning industry if it's ever going to be viable, so many have become quite disillusioned with them.  I now know others who have been through the same thing with other planners and said 'you should have asked me I would have told you never to trust one, don't trust anyone with your money'  Wish I'd asked them before I went to storm.

I would never take on this level of debt again, for many of the reasons that you have all said, yet I know a couple who have repaid their debts and are now going back into the market doing the same thing and this couple were one of the people who I asked, they recommended it, are very astute business people and believe that storm did nothing wrong.  They do believe that the Cassimatis' haven't done the right thing but say the advisors are not to blame for this, they honestly believe in storms strategy.  They blame the CBA totally for this collapse and have explained to us why they believe the CBA are totally to blame and it makes sense to me. Who do you believe?  They have done extremely well and knew the risks, accepted them and can afford to commit to this level of debt.  They have told me that they should never have allowed those who cannot afford it to get so far into debt.

In the past when a client reached margin call the banks sent out a letter advising clients and storm that they were in margin call and giving them five days to correct their LVR's.  Why didn't they do the same thing this time?  The bank say they don't have to.  Have the banks rules changed since 2003 and if they have why didn't they tell storm or their clients that they have changed their rules?  Clients were never advised this time but the banks say that they did advise storm.  Who do you believe.  It is vital that this is sorted as the banks sold everyone down at the worst possible time and suddenly there was 72 million super cheap shares on the market.   Who bought them?  Many believe there is insider trading involved.  What does everyone else think?

Why did the CBA lend Storm Financial so much money and why did they demand it back in 24 hours thus forcing Storm into receivership?  Was there a good reason for doing this and if so what was it?  Had they supported storm through this difficult down time none of this would have happened.  The CBA stayed very close to Storm Financial when they were doing well but as soon as things started to get a little dicey they dropped storm like a hot potato and all it's clients with it leaving them all dead in the water.  Something smells really badly there.  What are your thoughts?

I hope this parliamentary inquiry gets to the bottom of exactly what did happen.  The banks have been protected for far too long in this country and it's about time they were brought to task for their irresponsibility in lending anyone money if they cannot afford it, and as much as I hate to now admit it, you're right we have to accept our share of the blame as well I guess.  My only comment there is we were told that we didn't have to worry as the experts would take care  of everything and we would eventually be self supporting and we believed them - our biggest mistake.  We were told we wouldn't make anything for about five years.  If the bank hadn't foreclosed on storm when it did this prediction may very well have come true.  Who knows, I certainly don't.

The margin loan issue is the big one here and there is very little legislation at present protecting those who cannot afford to have a margin loan but hopefully those who do understand the margin loan concept, want to continue to have one and can afford it can still apply for one as before.  I don't know exactly what this legislation involves but something needs to be done to protect those who cannot protect themselves without affecting those who can.  

You're right there were many many storm clients who wanted to be cashed up long before the crash and storm would not do it, why, because they would then be losing money, it was all about money in the end, when it should have been about the clients.  Storm and the banks all knew this crash was a possibility, we could all see what was happening in the US early in 2008, and we all knew the market was dropping, it was never a matter of if but when.  I know many who were told 'don't follow the herd' when they wanted to take their money out of the market.  Storm should have been doing that anyway if they were doing their job properly.  They weren't and we are all aware of it. 

I have found it very hard to blame ourselves when we thought that we were paying storm to take good care of our finances for us.  I blame myself every day for trusting them as they have destroyed so many of us financially and emotionally.  They say what doesn't kill you makes you stronger and we might be dead financially but in other ways we have much to live for and if anyone out there in forum land has any great ideas on how thousands of ex stormies with no money and no home can get ahead and prosper don't keep that info to yourself....share it around a little.


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## Solly (30 August 2009)

Harleyquin said:


> .............
> 
> Once we agreed to this financial advice we knew we were taking on a loan for a little over half a million and we only found out about the margin loan, for another half a million, after the collapse and were horrified that we had a second loan.  In hindsight we should have been aware of it but we weren't.  We can certainly accept our share of the blame for that but we were never made aware by storm that we had a second loan...........




Harleyquin, did your Statement of Advice mention the margin loan?


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## Harleyquin (30 August 2009)

awg said:


> I just cant remember that is the only reason.
> 
> Solly puts them up, and I have only read a few
> 
> ...




Here's a direct link to the submissions for the parliamentary inquiry if anyone would like it.
http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sublist.htm


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## awg (30 August 2009)

Harleyquin said:


> In the past when a client reached margin call the banks sent out a letter advising clients and storm that they were in margin call and giving them five days to correct their LVR's.  Why didn't they do the same thing this time?  The bank say they don't have to.  Have the banks rules changed since 2003 and if they have why didn't they tell storm or their clients that they have changed their rules?  Clients were never advised this time but the banks say that they did advise storm.  Who do you believe.  It is vital that this is sorted as the banks sold everyone down at the worst possible time and suddenly there was 72 million super cheap shares on the market.   Who bought them?  Many believe there is insider trading involved.  What does everyone else think?
> 
> Why did the CBA lend Storm Financial so much money and why did they demand it back in 24 hours thus forcing Storm into receivership?  Was there a good reason for doing this and if so what was it?  Had they supported storm through this difficult down time none of this would have happened.  The CBA stayed very close to Storm Financial when they were doing well but as soon as things started to get a little dicey they dropped storm like a hot potato and all it's clients with it leaving them all dead in the water.  Something smells really badly there.  What are your thoughts?
> 
> ...





I encountered a parallel situation.

One I was not aware of when I initially entered into my WRAP fund.

Macquarie was the provider, but MY provider was a third party, who badged the service under their own name ( a very reputable provider)

I had to deal entirely with my adviser from bank X, if i rang Macquarie, they fobbed me off, they took virtually no responsibility at all.

Once, my adviser took 2 weeks leave, and bank X employees could not action my market requirements re Managed Investments sales, as they were " not authorised"..ie not FPA, I complained about this in writing more than once. ( leveraged CFS Oz equities fund was one such fund!)

I had a separate broker for shares, so that was OK.

If the market had tanked while he was on holidays, I could not have sold out.

Eventually he got another FPA as his sidekick.

The basic idea was you didnt sell...just buy and hold for the long term.

My compaint led to Macquarie paying me some compensation.

I joined ASF, commenced a SMSF instead, for better or worse.

The reason CBA etc sold everything up is obvious...there was negative equity.

Storm did not act quick enough to prevent this happening.

Banks will not support negative equity, even though, if they had, the market has now recovered, but who was to know it would not have kept falling.

I worked out my plan in a very straightforward manner..ask myself what happens if the market falls 20%...or 40%, as per 1987, with respect to my gearing etc etc...back of the envelope stuff.

I am kicking myself a bit, cause I very nearly decided to buy Put Options for both 20% and 40% falls over 12 months, at the height of the market, to negate the risk outlined with my envelope calcs.

I agree that 99% of people are not in a position to manage their money for various reasons, including lack of knowledge and time, or inclination.
Of course, this is just my opinion from talking to people I know personally

The posters on ASF who believe otherwise are kidding themselves IMO, which isnt to say that people should not learn and investigate as much as they can.

I am a bit of a do-it-yourself man, but you have to ask a lot of questions, I can tell you that I have copped some serious scorn over the years, some of it justified perhaps, due to maybe biting off more than I can chew, but there you go

How ironic that ASIC is now cracking down on really educational stuff such as Tech/A system type  threads, that are more helpful than most, if you want to get up to speed on all this stuff


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## Julia (30 August 2009)

mellifuous said:


> As far as I understand it, Banks don't tend to care about 'consequences' - their prime concerns are profits and loan security.   In the ordinary course of business, these are perfectly normal pursuits.




It doesn't appear they gave due consideration to loan security in this instance.



> However, there are many circumstances where banks should not lend, and they should restrain their desire for profits in preference to not putting others at risk of financial ruin as a consequence of lending.




It's simply not in the bank's interests to lend to people who can't service the loan and this to me is the most puzzling aspect of this whole grubby affair.

Many Stormers have alleged that the value of their property plus level of earnings was highly inflated but no one seems to know who did this inflating.
The most obvious here would seem to be Storm fiddling the figures they offered to the bank with the loan applications.

If, as has been said by several stormers, clients just passed their signing rights over to Storm, and didn't check documentation plus have a copy of absolutely everything, they can hardly be all that surprised if they have become pawns in Storm's ponzi scheme, designed to make Storm principals and advisers wealthy.



bunyip said:


> And for what it's worth - don't ever ask an accountant for investment advice, or even for his opinion about an investment that you're considering.
> Accountants are experts in taxation matters, but taxation and investment are two separate areas, even though one affects the other.
> Investment advice is outside the area of expertise of accountants.




Completely agree.  Accountants can be very helpful with tax and planning, but often are breathtakingly ignorant about investment.



> Sure, some accountants are also licensed investment advisers, but all that really means is that they can legally sell you investment products on which they earn a commission. Guess which investments they'll recommend - the ones that pay them the best commissions.



Yep, usually quite true, as with bank employed financial planners.


----------



## Julia (30 August 2009)

Harleyquin said:


> We never asked to go into the stock market, we asked for financial advice.  When we were told how much we could borrow as a home loan we voiced our concerns to storm and to others, we were told 'this is how financial planners invest today and it is tax effective.'  We were paying so much PAYE tax that I was virtually working for nothing.
> 
> Once we agreed to this financial advice we knew we were taking on a loan for a little over half a million and we only found out about the margin loan, for another half a million, after the collapse and were horrified that we had a second loan.  In hindsight we should have been aware of it but we weren't.  We can certainly accept our share of the blame for that but we were never made aware by storm that we had a second loan.  I thought we may have been the only one but since asking other stormies I have found out that this in fact was a common occurrence.   I would have asked about margin loans if I'd known what one was, I had never heard of them.  Storm may have assumed we knew, we didn't, and I believe that they deliberately down played the margin loan issue.



So did you give Storm the right to sign documents on your behalf?
Did you ask for and receive copies of all documentation?
Did you initially receive a written plan explaining how they suggested you invest, what the projected time span of the investment was, what results they suggested would accrue?





> As far as the loan commitments were concerned we were told not to worry about the debt, not to worry about anything associated with the debt just leave it all up to storm and we did.



I guess this is the bit that blows me away, i.e. that you could be so trusting of something which was clearly unreasonably too good to be true.



> The common thread running through all the submissions to the parliamentary inquiry tell us the same thing was told to everyone irrespective of where they lived so the advisors were well drilled by their boss.  They appeared to be a very successful company who knew what they were doing.  We asked our advisor what qualifications he had, he was well qualified.  I think I've said this before but Storm were members of the FPA and ASIC approved.  The FPA and ASIC obviously supported storms strategy or both of them would have done something about it long before this collapse.



Yes, ASIC appear to have received little attention for their inaction thus far.
Hopefully this will be addressed.  They are worse than useless for the most part, a waste of tax payer dollars.



> I thought I had done enough research before investing with these people.  I asked storm investors who had been with storm for some time, saw a lot of extremely clever people at the storm seminars they were very happy with their investment and recommended storm.  I know other stormies who asked accountants and others who were recommended to storm by their banks.  I was told that accountants couldn't give financial advice - is this right?  Who would you have gone to, to find out more and what other research would you advise that we should have done?



All you needed to do was get out a calculator as has been already suggested.
And make sure you were given support documentation for what they claimed would be happening.

Or even, however peculiar such a question might appear to be, ask
   "What happens if the market falls significantly, a la 1987????"







> I asked another financial planner after the collapse if we should have asked a lawyer and he said 'why there was nothing legally wrong with their paperwork it wouldn't have helped.'  I do agree that we should have asked someone else to explain their strategy to us but I still don't know who we should have asked.  It's time to clean up the financial planning industry if it's ever going to be viable, so many have become quite disillusioned with them.  I now know others who have been through the same thing with other planners and said 'you should have asked me I would have told you never to trust one, don't trust anyone with your money'  Wish I'd asked them before I went to storm.



Lawyers, like accountants, are not experts in investment.

And it's quite unfair to brand the whole FP industry as being as corrupt as Storm.  Some of them are certainly about as useful as  **** on a bull, but most of them are not outright corrupt.








> I would never take on this level of debt again, for many of the reasons that you have all said, yet I know a couple who have repaid their debts and are now going back into the market doing the same thing and this couple were one of the people who I asked, they recommended it, are very astute business people and believe that storm did nothing wrong.  They do believe that the Cassimatis' haven't done the right thing but say the advisors are not to blame for this, they honestly believe in storms strategy.  They blame the CBA totally for this collapse and have explained to us why they believe the CBA are totally to blame and it makes sense to me. Who do you believe?  They have done extremely well and knew the risks, accepted them and can afford to commit to this level of debt.  They have told me that they should never have allowed those who cannot afford it to get so far into debt.



Again, we come back to who fudged the figures?  No one, to my knowledge, has ever clarified this in all these pages.





> In the past when a client reached margin call the banks sent out a letter advising clients and storm that they were in margin call and giving them five days to correct their LVR's.  Why didn't they do the same thing this time?



A reasonable guess would be because clients signed over all responsibility to Storm so the banks advised Storm rather than the client.  So why would you blame the banks if that is what happened, rather than Storm if the latter failed to either pass the warning on to the client, or take appropriate steps to ameliorate the problem?




> The bank say they don't have to.  Have the banks rules changed since 2003 and if they have why didn't they tell storm or their clients that they have changed their rules?  Clients were never advised this time but the banks say that they did advise storm.



As above.   They are not going to advise clients if their instructions are that Storm is acting 100% on the client's behalf.




> Who do you believe.  It is vital that this is sorted as the banks sold everyone down at the worst possible time and suddenly there was 72 million super cheap shares on the market.   Who bought them?  Many believe there is insider trading involved.  What does everyone else think?



The banks were simply protecting their own interests and that of their shareholders, don't you think?  They stood to lose money if they did not sell as was apparently their right.  They're not a charity.  Do you know that they did not give Storm plenty of warning that things were getting close to the edge?
If Storm were really acting on your behalf as they had promised, wouldn't they have been watching the market and preventing your getting a margin call??




> Why did the CBA lend Storm Financial so much money and why did they demand it back in 24 hours thus forcing Storm into receivership?  Was there a good reason for doing this and if so what was it?  Had they supported storm through this difficult down time none of this would have happened.  The CBA stayed very close to Storm Financial when they were doing well but as soon as things started to get a little dicey they dropped storm like a hot potato and all it's clients with it leaving them all dead in the water.  Something smells really badly there.  What are your thoughts?



This paragraph is essentially a rewording of earlier remarks, harleyquin and the same response applies.   I'm sure we are all holding our breath in anticipation of the inquiry's examination of responses by both Storm and the banks.







> The margin loan issue is the big one here and there is very little legislation at present protecting those who cannot afford to have a margin loan but hopefully those who do understand the margin loan concept, want to continue to have one and can afford it can still apply for one as before.  I don't know exactly what this legislation involves but something needs to be done to protect those who cannot protect themselves without affecting those who can.



Nothing wrong with margin loans as a facility.   Like anything, though, they can be misused.


----------



## mellifuous (31 August 2009)

awg said:


> What surprised me, is she demonstrated that she was a sophisticated investor, as she had shares worth more than $10 million, built up over a long time, but still got caught out by basic investment mistakes




There's a trap for each of us - all one has to do is find it, and fall into it.

'sophisticated investor'?, like James Packer? 

There's an old saying about gamblers, 'they're either losers and liars'.

The truth is that  investing just about anywhere but a bank is gambling.

The 'winners' of today are probably going to be the 'losers' of tomorrow - no need for anyone to be smug about it.


----------



## mellifuous (31 August 2009)

Julia said:


> It's simply not in the bank's interests to lend to people who can't service the loan and this to me is the most puzzling aspect of this whole grubby affair.
> .




It's my view that the bank lent to the FMF because it didn't take into account the 'consequences' of their lending.  The  bank took into account the security for their loan - that is, the fund had the assets, and in the end could 'service' the loan, but at the expense of investors money: The bank was safe, we were not.

I think that respect to Storm clients, it was exactly the same scenario, in the event things went pear-shaped, the bank was safe, not so the clients.

I call it 'enabling' - any silly thing a lender wants to get up to, the bank will enable it, providing their investment is safe: the consequences for the lender have not been an issue that the bank considered.

There is no need to be puzzled by the behavior of a bank - they derive their profit from lending (full stop).

http://www.youtube.com/watch?v=coItaKim-vQ

An interesting tv series to watch is 'the Ascent of Money' - in my opinion banks today are no different from those guys who sat behind desks in the Florentine ghetto many moons ago - they're just learnt to wear suits and work out of big buildings.   

If they could take their 'pound of flesh' as Shiloh had wished, then they would.


----------



## Solly (31 August 2009)

*"Macquarie ducks for cover on margin loans to Storm Financial"*

"MACQUARIE Group has revealed Storm Financial was once its fourth-biggest customer for margin lending when the bank also provided a loan to the financial planner, which collapsed at the start of the year."

More by Eric Johnston in The Age here;

http://business.theage.com.au/business/macquarie-ducks-for-cover-on-margin-loans-to-storm-financial-20090830-f3z3.html


----------



## Solly (31 August 2009)

*"Storm planner providing advice"*

"A FORMER Storm Financial planner has been working in North Sydney, advising people on their remaining Storm-affected finances, to the distress of some former customers.

The planner, Anne O'Neill, was working last week as an authorised representative of another financial planning group, AAA Financial Intelligence, which charges commissions on investments of up to 6.6 per cent."

More by Stuart Washington in the SHM here;

http://business.smh.com.au/business/storm-planner-providing-advice-20090830-f40w.html


----------



## Solly (31 August 2009)

*"Storm Financial inflated pensioner incomes fifty-fold to secure loans"*

"THE Bank of Queensland waved through investment loan applications from failed investment group Storm Financial that inflated the annual income of pensioners into seven-figure sums."

More here by Michael McKenna in The Australian

http://www.theaustralian.news.com.au/business/story/0,28124,26004517-5001942,00.html


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## Harleyquin (31 August 2009)

Solly said:


> Harleyquin, did your Statement of Advice mention the margin loan?



Solly there was so much in the S of A that I didn't understand and don't remember reading anything about a margin loan, that's not to say it's not in there, I'm sure it is.  Have you seen Storms Statement of Advice - it is an onerous 100 page document full of financial jargon which has not been designed to be read by the ordinary person.  I tried reading it and ending up giving up as I found my comprehension level wavering.  I took it back to the advisor and said 'I cannot understand all this can you explain it to me in layman's terms.'  He must have laughed all the way to the bank!!!  I'm sure now that the 'devil was in the detail' and there was plenty of detail.  I don't have our statement of advice it's with our solicitor so I can't check but I'm sure it would be there.

This Statement of Advice is another bone of contention for me they should be simpler, to the point and aimed at the people who are reading them ie those who are starting off on their first financial planning experience.  My husband and I are both readers and yet we both found this 'so called' document hard to read as it was full of garbage and the important bits including the margin loan would no doubt have been in there somewhere.

I certainly accept the critiicism which has been aimed at storm, the directors have a lot to answer for and EC and JC have a lot of explaining to do and I believe that their advisors / salespeople need to be explain their part in this as well.  They have all played a major part in this human tragedy.  They have preyed on the financially naive and swindled them out of their life savings and it has been a major crime and should be treated as such. 

Most ex clients, including us asked for a conservative approach and said that we didn't want anything risky.  How many times I sat there and said 'are you sure this is safe' and he said 'yes the whole Australian economy would have to collapse before you even begin to run into trouble as we have buffers in place to protect your investment.'  I'm sure that every client would have asked the same questions and we were all told the same polished answers.  This is now comming out in the submissions.  There are a lot of problems which are now blaringly obvious to all of us which at the beginning we were unaware of.

We had become very disillusioned with storms advice and the whole investment long before it crashed and wished that we had never done it, we were starting to see the light well before the crash but were assured that they knew what they were doing.  Read the submissions and you will see just how many clients did ask to be cashed up, did voice their concerns we all did this was our money and our homes on the line.  The advisors were still telling us at the end of December that we had nothing to worry about.

I spoke to our advisor on his last day at work.  He was on the phone assuring me that we wouldn't lose our home and we would be ok at the same time as he was packing up his office to leave.  He was lying through his teeth.

Have spoken to a client who invested two days before they went into administration and fees were taken out mid January after they went into administration.  How legal is this?

Storm and the bank did have a close relationship until the very end and they have both combined their 'talents' to scam the financially uneducated of everything they owned.  We all blame ourselves for not educating ourselves enough to know what to do and for trusting who we all assumed to be a genuine financial planner.  OK we've all made that mistake but the price we are all paying for this mistake is far far too high, most of us have been not only been financially destroyed but emotionally as well and are now surviving one day at a time on anti depressants and sleeping tablets.

We can now see what many of the problems have been but it's a high price to pay for a genuine mistake.  We all make mistakes in life but we are paying a huge price.  No wonder ex stormies are angry and upset our lives and lifestyles have been destroyed and many now have to somehow survive on an old age pension and the possibility of paying off a mortgage loan even after selling the family home.  With inflation there is no way they are going to be able to do this.


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## Judd (31 August 2009)

A rant.

In someways it is a pity that stormers cannot sue parliament.  From my understanding those Statements of Advice are required under the FSR Act passed by parliament because of concerns that investors, such as stormers and others, were not receiving proper advice they could understand.  Of course, the financial planning industry got a touch concerned that if the SoAs did not cover all aspects they could get sued.  So the legal compliance fellas stepped in and look at what we/you got.  It's all parliament's fault.

Actually, it's a total joke.  You have self-interested industry and Government organisations putting forward a view that "only" 30% of investors seek the advice of financial planners and the fiance (the word should read "finance" but whatever) world is so complicated, the inference being Armageddon unless that 70% seek advice.  No body has asked that 70% how many of them actually want financial advice.

Maybe a number of them, such as myself, stay away from complicated investment products because they are and I wish to keep things simple.  It is not, in my view, very complicated to buy any of the shares listed on the stock exchange be it Telstra or BHP or Wesfarmers or indeed STW which tracks the top 200 companies, ie an index fund and way, way cheaper than any storm product.

It is complicated if I wished to buy unlisted managed funds or structured capital protected stuff or use CFD's or trade.  At least it is complicated to me so I stay away from the darn things.

And now proposals to warn people that you could lose your home if you borrow to buy shares and margin loans are an awfully dangerous product and possibly we should be licensing investors and only allow this certain class of investor to put money into this product but not others.

Jesus.  Whatever happened to freedom of choice?  Of course, I forgot.  With freedom of choice comes responsibility but it seems that aspect is not such a grand concept.

End of rant.  Amen


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## mellifuous (31 August 2009)

Judd said:


> And now proposals to warn people that you could lose your home if you borrow to buy shares and margin loans are an awfully dangerous product and possibly we should be licensing investors and only allow this certain class of investor to put money into this product but not others




Yes, I saw this submission on APAC.  With the actuary suits talking to the senate suits.    They agree with ASIC that we need education and warnings for protection in our various investments (mine with the FMF).

No mention of bad people out there - no mention that knowledge doesn't prevent bad people doing bad things.

There is no aspect of our life on this earth whereby law and education actually stops bad people doing bad things.  It's convenient to blame consumers because we were left to 'rot' by those we trusted.  

If our police took the same view that we might be protected against robbery by knowing its illegal (for example), then we really would be doomed.

Even such a disclaimer 'you may lose your house' can be overcome as easily as a smoker overcomes the picture of a rotting lung in order to buy a packet of cigarettes.


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## Ironhalo (31 August 2009)

Harleyquin, mate I'm not having a go at you here, but I just pulled out one of my SOA's from Storm (it is sitting in my filing cabinet in pergatory awaiting judgement on Judgement Day!) and I'm going to be very blunt.

Page 1 - Introduction letter telling us when the recommendation would expire.
Page 2 - Summary of Recommendations. This listed everything in layman's terms as to what the recommendation was. 
Pages 5-6 - Existing Assets and Liabilities
Pages 8-12 - Asset Distribution
Pasge 13-20+ - Year by Year breakdown of expected asset growth

In our case, the second page read: 'We suggest that you increase the size of your capital base by borrowing $x from the (insert bank) and an additional $x from your existing margin loan with (insert hated bank).

The paragraph underneath this then showed us the total amount of debt we would have, and the distribution of this cash in the investment.

It also listed the fees at the bottom of the page. I also note that our individual adviser was entitled to 10% of what Storm took in fees (taken out of the 7% Storm was charging). Certainly there was a lot of motivation for these advisers to get people further into debt.

At the bottom of every single page was a box that read, 'We have read and UNDERSTOOD this page', with room for a signature from both of us.

Storm may have been a lot of things (and in hindsight, had I not been so 'hands off' with my investment I wouldn't have done it...even noting we were pretty happy with the relatively small amount of debt in our case), but their paperwork was legitimate, even if the advice/plan ultimately wasn't.

At no stage were you hoodwinked, coerced or forced to sign or proceed with anything. If you signed it and didn't understand it, then sadly (and I don't want to kick you when you are down mate, my family is in your same situation), but it is your fault to some degree as well. My adviser even offered for us to take it away for a second opinion/legal if we wanted to. 

Looking at our 'plan', I realised very quickly that Storm was an unnecessary middle man who took a lot of money to do very little but offer us a nice coffee when we came in....I could have done the same thing with a few hours of phonecalls after work to a bank to establish it, and a Comsec account.

And as for you Ron Jelich, don't preach to us about seeking justice. You and your fellow advisers aren't going to slink out of this by rallying to the SICAG flag and participating in circle-jerks with your victi....I mean ex-clients. SICAG's reputation is sadly and unfarily lessened by allowing ex-Storm employe...I mean, leeches attached. Manny wasn't so bad when you Storm employees were having beers in the Bullivant's Redcliffe mansion, and patting yourselves on the back on your continued 7% pillage of your elderly clients, now was he?

Oh that's right the Bullivants got screwed by the Redcliffe branch too. Oops!


----------



## DocK (31 August 2009)

Ironhalo said:


> Harleyquin, mate I'm not having a go at you here, but I just pulled out one of my SOA's from Storm (it is sitting in my filing cabinet in pergatory awaiting judgement on Judgement Day!) and I'm going to be very blunt.
> 
> Page 1 - Introduction letter telling us when the recommendation would expire.
> Page 2 - Summary of Recommendations. This listed everything in layman's terms as to what the recommendation was.
> ...




Have to agree here.  I've always been bemused at the number of ex-stormers who seemed to be unaware of their level of debt.  Although my SOAs are very lengthy, they are also quite clear about what was proposed as far as new borrowings went, as well as the source of the proposed loan.  I doubt it is possible to obtain a margin loan anywhere without having to sign *something* and the simplest of questions such as "what am I signing this for" would have let you know it was for a margin loan.  

I'm eagerly waiting to hear what all the various enquiries will eventually uncover over the whole "whose responsibility was it to inform clients of margin calls" million-dollar question.  All I know is that my margin loan was with Macquarie, and although I didn't receive a margin call, if I had I would have expected to be contacted by the bank involved as I am absolutely certain I never authorised Macquarie to deal with Storm or anyone else when it came to the relationship between them and I.  As far as I was/am concerned, the loan may have been applied for at the advice of Storm, but they were never appointed to act as my agent when it came to dealings with the loan once in place.  CGI may however have had different procedures in place - I guess we'll find out eventually.....


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## Ironhalo (31 August 2009)

That's exactly right DocK. My biggest bugbear wasn't with Storm admittedly (it was in terms of them not selling me down when I asked them to, and my hatred for them iis exacerbated by the way they have screwed over my other family members), but with the fact that Colonial sold down my shares and paid out their margin loan without informing me, causing us to make unnecessary losses when there was a significant dam of money available in a seperate Colonial account to pull us out of margin call if need be. 

What completely spins me out, is that this is the SAME margin loan that they approved and serviced us with barely a month prior.


----------



## abagnale (31 August 2009)

I don't want to sound critical of the stormies that didn't know they had a margin loan but I cannot understand how you could bet your house, savings and future by not reading or understanding the SoA.

It seems to me that they were caught in some magic spell that blinded them to real risks that could occur. Being sold a dream that they could have Nirvana by following the mystical piper.


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## Big Max (31 August 2009)

darkside said:


> Max
> 
> Who are you trying to convince, us, you , "Money spiders" clearly you have a glowing testimony from a happy person,( fantastic) but are you out there trying to help people through a difficult time or sell a product.????
> 
> Lets get it in perspective, we are not the enemy, all people have done is offered views or advice, not expect you to gloat over a joyous post ..




With friends like you  . . . you know the old saying.

What product am I and/or SICAG selling old mate, apart from a pie comprising healthy lashings of support, solace, fellowship and, hopefully, redress?

Fiddling while Rome burns or ingratiating yourself with GG and other SICAG bashers serves no objective purpose. It's all about the victims.

Max (0419 782729)


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## Big Max (31 August 2009)

Ironhalo said:


> Max,
> 
> How many times do you want me to say it (in six different languages) that I applaud the work of SICAG? Have you not read my previous posts?
> 
> ...




Name the Manny sycophants on the SICAG committee pleeeeeeeze.


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## Big Max (31 August 2009)

Harleyquin said:


> We never asked to go into the stock market, we asked for financial advice.  When we were told how much we could borrow as a home loan we voiced our concerns to storm and to others, we were told 'this is how financial planners invest today and it is tax effective.'  We were paying so much PAYE tax that I was virtually working for nothing.
> 
> Once we agreed to this financial advice we knew we were taking on a loan for a little over half a million and we only found out about the margin loan, for another half a million, after the collapse and were horrified that we had a second loan.  In hindsight we should have been aware of it but we weren't.  We can certainly accept our share of the blame for that but we were never made aware by storm that we had a second loan.  I thought we may have been the only one but since asking other stormies I have found out that this in fact was a common occurrence.   I would have asked about margin loans if I'd known what one was, I had never heard of them.  Storm may have assumed we knew, we didn't, and I believe that they deliberately down played the margin loan issue.
> 
> ...




Harleyquin, you are right on the money and your aim is true. Your posting is sane, measured and to the point. Compulsory reading.
Big Max (0419 782729 anytime GG, Ironhalo, Bunyip et al)


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## Solly (31 August 2009)

*"Parliamentary inquiry begins into Storm Financial failure"*

"Storm founders Emmanuel and Julie Cassimatis are not scheduled to give evidence to any of the hearings."

More here in the Brisbane Times from AAP.

http://www.brisbanetimes.com.au/queensland/parliamentary-inquiry-begins-into-storm-financial-failure-20090831-f4yh.html


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## bunyip (31 August 2009)

Harleyquin said:


> We never asked to go into the stock market, we asked for financial advice.  When we were told how much we could borrow as a home loan we voiced our concerns to storm and to others, we were told 'this is how financial planners invest today and it is tax effective.'  We were paying so much PAYE tax that I was virtually working for nothing.
> 
> Once we agreed to this financial advice we knew we were taking on a loan for a little over half a million and we only found out about the margin loan, for another half a million, after the collapse and were horrified that we had a second loan.  In hindsight we should have been aware of it but we weren't.




I'm wondering how you could have a margin loan without knowing about it.
I've never taken out a margin loan myself, but I assume that just like any other loan there's documentation to be signed by the client....loan application forms, loan acceptance forms, a form that you sign to say you've read the loan conditions and you understand and accept the risks.


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## bunyip (31 August 2009)

Big Max said:


> Harleyquin, you are right on the money and your aim is true. Your posting is sane, measured and to the point. Compulsory reading.
> Big Max (0419 782729 anytime GG, Ironhalo, Bunyip et al)





Now Max - why would I want to ring you?


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## Solly (31 August 2009)

Harleyquin said:


> Solly there was so much in the S of A that I didn't understand and don't remember reading anything about a margin loan, that's not to say it's not in there, I'm sure it is.  Have you seen Storms Statement of Advice - it is an onerous 100 page document full of financial jargon which has not been designed to be read by the ordinary person.  I tried reading it and ending up giving up as I found my comprehension level wavering.  I took it back to the advisor and said 'I cannot understand all this can you explain it to me in layman's terms.'  He must have laughed all the way to the bank!!!  I'm sure now that the 'devil was in the detail' and there was plenty of detail.  I don't have our statement of advice it's with our solicitor so I can't check but I'm sure it would be there.
> 
> This Statement of Advice is another bone of contention for me they should be simpler, to the point and aimed at the people who are reading them ie those who are starting off on their first financial planning experience.  My husband and I are both readers and yet we both found this 'so called' document hard to read as it was full of garbage and the important bits including the margin loan would no doubt have been in there somewhere.
> 
> ...




Yes Harleyquin I am aware of the Storm SoA. I'm sure that there are many people in this forum who have signed agreements, legal docs etc without completely reading all the details & fine print. I know I have and these are measured risks I have knowingly taken. I've been lucky and in only one instance did I need some minor prodding from a friendly silk to extradite me from the mire. 

With anything major or of high value/impact I now use a fine tooth comb and seek independent opinion.

I wish you good luck in your quest....


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## Garpal Gumnut (31 August 2009)

bunyip said:


> Max
> 
> I'm happy to accept your invitation to comment.
> Harleyquin's glowing endorsement of SICAG doesn't change the views that I've expressed on a number of occasions......
> ...




Max , as you have been asked before, can you comment, on bunyip's reply to you.

If you are unable to comment to these points, just say so.

They appear valid criticisms of the SICAG model.

gg


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## darkside (31 August 2009)

Big Max said:


> With friends like you  . . . you know the old saying.
> 
> What product am I and/or SICAG selling old mate, apart from a pie comprising healthy lashings of support, solace, fellowship and, hopefully, redress?
> 
> ...




Don't you even read the posts before you reply to them , do you just glean over the title and then comprise a vitriolic redress??

"with friends like you" i acknowledged the fact you had a glowing testimony to the point of talking it up. (fantastic)

What product are you selling 

 It's a fair question , if i came on a site, sprouting slices of pie full of lashings of support with testimonys from satisfied clientele i am sure others would draw on the same conclusion.

Fiddling while Rome burns 

As stated by myself and numerous others, this is a site for views and advice, not taking some form of Schadenfreude in others plight. (why all the anger , direct it at Storm ,the banks,  the dodgy  advisers that stole , lied and alledgedly falsified documents ,not us we didn't do this to the clients of storm)

As for calling you , i'm with Bunyip on this one, unless you can see other views and not just what you percieve them to be,,,,,Whats the point !!!!


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## Ironhalo (31 August 2009)

Max,

I don't know how many more times you need it said to you. I indicated it in my last post, but evidently you just see the words 'SICAG, Ironhalo, Manny' and assume I am dumping a big truckload of manure onto SICAG's efforts. 

So I will say it again, and hopefully you read this. 'I applaud SICAG for their work, HOWEVER, there are a number of people who have associated themselves with SICAG who were ex-Storm employees and relatives which only seeks to discredit and tarnish SICAG's good credibility.'

Can you not see why people might be a bit dodgy about the whole thing when Andrew O'Brien's father is on the committee, despite his best intentions? Or you yourself, who have been quoted in the media as being an 'ex-Storm employee?'. Why is this so hard to deny and why can't you answer questions? Why won't SICAG now turn on Manny? He's the one who bled his clients and company dry and left it open for CBA to practically shut down, so why is SICAG so scared of stating so?

Could it be, and hmmmm lets' all put our tinfoil hats on here, that some members of SICAG who worked for Storm are still in some way in contact or friends with Emmanuel Cassimatis?

And no I will not call you, attempting to discuss this matter with you would be as effective as booing at the Special Olympics. I am not discussing this matter with an ex-Storm employee...period.


----------



## darkside (31 August 2009)

Ironhalo said:


> Max,
> 
> attempting to discuss this matter with you would be as effective as booing at the Special Olympics.




Ironhalo,

I am so stealing that line from you .

Absolutely PMSL


----------



## Solly (31 August 2009)

darkside said:


> Ironhalo,
> 
> I am so stealing that line from you .
> 
> Absolutely PMSL




Hope you are wearing your DEPENDs


----------



## darkside (31 August 2009)

Solly said:


> Hope you are wearing your DEPENDs




 Come on Solly, admit it , that was funny. !!!!


----------



## Grey Ghost (31 August 2009)

Solly said:


> *"Parliamentary inquiry begins into Storm Financial failure"*
> 
> "Storm founders Emmanuel and Julie Cassimatis are not scheduled to give evidence to any of the hearings."
> 
> More here in the Brisbane Times from AAP.




Why am I not surprised at this news.
I have a distinct feeling that E & J  Cassimatis will be loathe to appear in person at ANY enquiry into this disaster and will have to be dragged kicking and screaming first.


----------



## Garpal Gumnut (31 August 2009)

Grey Ghost said:


> Why am I not surprised at this news.
> I have a distinct feeling that E & J  Cassimatis will be loathe to appear in person at ANY enquiry into this disaster and will have to be dragged kicking and screaming first.




From the Brisbane times article 



> The former managing director of the company's Cairns branch, Gus Dalle Cort, is expected to give evidence tomorrow defending Storm's investment model and accusing the Commonwealth Bank of misleading and deceptive conduct.
> 
> Storm founders Emmanuel and Julie Cassimatis are not scheduled to give evidence to any of the hearings.




http://www.brisbanetimes.com.au/que...to-storm-financial-failure-20090831-f4yh.html

And from an article in Moneymanagement by Lucinda Beaman.



> Twelve owners of financial planning businesses acquired by Storm Financial have lodged proof of debt claims with the administrators of the collapsed group.
> 
> Ron Jelich, who was one of the public faces of Storm, has lodged the most substantial proof of debt. Jelich is claiming $8 million under his own name and more than $284,000 under Ron Jelich Professional Planning Pty Ltd.
> 
> ...




http://www.moneymanagement.com.au/article/Storm-Financial-planners-in-the-red/474639.aspx

gg


----------



## Big Max (31 August 2009)

Ironhalo said:


> Max,
> 
> I don't know how many more times you need it said to you. I indicated it in my last post, but evidently you just see the words 'SICAG, Ironhalo, Manny' and assume I am dumping a big truckload of manure onto SICAG's efforts.
> 
> ...




It is so frustrating trying to engage with you. I am NOT, NEVER WAS, NEVER WANTED TO BE, NEVER WOULD HAVE BEEN LIKELY TO BE an ex-Storm employee. What part of NOT do you not grasp? I suggest you READ my postings instead of "gleaning" (interesting word) over them. Dear oh dear.


----------



## Garpal Gumnut (31 August 2009)

Big Max said:


> It is so frustrating trying to engage with you. I am NOT, NEVER WAS, NEVER WANTED TO BE, NEVER WOULD HAVE BEEN LIKELY TO BE an ex-Storm employee. What part of NOT do you not grasp? I suggest you READ my postings instead of "gleaning" (interesting word) over them. Dear oh dear.




Max, you are getting a bit emotional and tired.

Save your energies for the Inquiry.

Things are hotting up and the truth will out for the Storm victims.

gg


----------



## Solly (31 August 2009)

darkside said:


> Come on Solly, admit it , that was funny. !!!!




The PC police will wallop me :


----------



## darkside (31 August 2009)

Max
Once again , why the anger , how about directing it towards the perpetrators of the problem, you remember The Evil Banks, the disgracefull, stealing lying fraudulent FPs and how could we forget good old Emmanual and Julie who didn't renew their Domain Name or Web Hosting .

http://cassimatis.com.au/

Now how are all those people who are waiting for the website to be updated going to feel. I thinks Mannys "crusade for justice " maybe on the skids. 


Max calm down , chill, fight the bad guys , don't shoot the messenger.

And if the word is so interesting , glean what you want from this.


----------



## Harleyquin (31 August 2009)

Julia said:


> So did you give Storm the right to sign documents on your behalf?
> Did you ask for and receive copies of all documentation?
> Did you initially receive a written plan explaining how they suggested you invest, what the projected time span of the investment was, what results they suggested would accrue?
> 
> ...



* I don't remember giving storm the right to sign documentation on our behalf and I don't remember them asking us to.
*We didn't ask for all documentation but they usually gave us copies of all paperwork.
* Received a Statement of Advice - someone said on here that they found it easy to understand, we found it difficult to get our head around it.  I admit we both loathe reading anything financial or legal and have no interest in doing it.  Have learnt our big lesson here and we now have a lawyer who is making a fortune from us as we now take everything to him.  I did consider taking the storm SoA to him and I don't know I didn't we do lead a busy life and I blame myself for this-that was certainly my mistake.
* It now blows both of us away to realise how trusting we were.  I do think our age group are very trusting, the younger generation are taught from an early age to question everything and I think it's a good thing.  Often wish we weren't so trusting but we are, but we are also able to be trusted and we are very honest.  We've found out the hard way that EC and JC and their co conspirators, whoever they may be, havent' been honest or trustworthy.
* Someone said the other day on here that storms advice was crap and we swallowed it and the more I think about it there is certainly a lot of truth in that statement.  We had no idea that a licensed financial planner could be so dodgy.
*None of us know for sure who fudged the figures, we can only hope that ASIC and the parliamentary inquiry get to the bottom of this because someone certainly did.
*Re Margin call letters, Storm clients who received margin calls in 2001 and 2003 (and I have only checked with one so can't generalise here) say they haven't given storm any extra responsibility since 2003.  Other stormies may be able to elaborate on this as we weren't with storm then.
* I do agree wholeheartedly with you Julia that if storm were really acting on our behalf as they promised they would, they would have been watching the market closely and preventing margin calls.  This is one aspect of this whole saga which infuriates storm clients we were all watching what was happening to the market and many wanted out and storm wouldn't do it, we were all told to trust storm, and I think even before the crash there were many of us who were so worried that we would have preferred to be out of the market.  LVR's for storm clients were allowed to blow out by storm and/or the banks and I don't know why.  Someone might be able to enlighten all of us on this also.
* I have spoken to many people in the last six months who agree with you on margin loans - and they have been used successfully for as long as people have been investing apparently.  I know little to nothing about them but there are many who swear by them as long as they are not misused.
* I think at the end of the day all ex stormies want to know why things, our supposed safe investments, went so horribly wrong.  The financial and emotional destruction to our lives is something that no one could possibly understand unless it happened to them and we are all extremely angry.
* I have really enjoyed hearing the comments for and against, I expected a super blast when I got on here and it hasn't been as bad as I expected, and I'm learning and hopefully something can be put in place so that nobody else ever has the suffer the way we have all had to suffer over the past eight or nine months.  Irrespective of whose fault it is or isn't it has been dreadful and once again I say that SICAG has been our lifeline despite what others may or may not think.  I will sing their praises forever as we would never have coped as well as we have without their help and support.


----------



## darkside (31 August 2009)

Harleyquin,

Good post , don't give up , someone on here a few months ago posted an absolutely fantastic few paragraphs about not giving up,  seeing the  light at the end of the tunnel  and most importantly look forward and move ahead, i really wish i could have found it again , but in 70 odd pages it became a struggle.

Like everyone on here all i can do is wish you the best, sympathise with your situation and realise that it is a very hard valuable lesson that will certainly help you in the future.

Cheers Darkside


----------



## Anastasia (31 August 2009)

Harleyquin said:


> * I don't remember giving storm the right to sign documentation on our behalf and I don't remember them asking us to.
> *We didn't ask for all documentation but they usually gave us copies of all paperwork.
> * Received a Statement of Advice - someone said on here that they found it easy to understand, we found it difficult to get our head around it.  I admit we both loathe reading anything financial or legal and have no interest in doing it.  Have learnt our big lesson here and we now have a lawyer who is making a fortune from us as we now take everything to him.  I did consider taking the storm SoA to him and I don't know I didn't we do lead a busy life and I blame myself for this-that was certainly my mistake.
> * It now blows both of us away to realise how trusting we were.  I do think our age group are very trusting, the younger generation are taught from an early age to question everything and I think it's a good thing.  Often wish we weren't so trusting but we are, but we are also able to be trusted and we are very honest.  We've found out the hard way that EC and JC and their co conspirators, whoever they may be, havent' been honest or trustworthy.
> ...




Harleyquin, well stated.....my thoughts exactly...I applaud you and wish you well in your future....hang in there....I plan to be a winner no matter what in the final wash....won't let E & J take anything more from us...so keep your spirit up.


----------



## darkside (31 August 2009)

Anastasia said:


> Harleyquin, well stated.....my thoughts exactly...I applaud you and wish you well in your future....hang in there....I plan to be a winner no matter what in the final wash....won't let E & J take anything more from us...so keep your spirit up.




Anastasia, 

Hang in there, what i said to Harleyquin, applies to you as well.
Hold your head up, keep positive, and yes maintain your spirit.

Darkside.


----------



## Ironhalo (31 August 2009)

Harleyquin and Anastasia, I totally sympathise with you, and my thoughts and prayers are with you both. I got duped by Storm, never again.

Chin up and fight hard.


----------



## Solly (1 September 2009)

*"Mac Bank unscathed in Storm fiasco"*

"AS MARKETS fell last October and Storm Financial was in the throes of what became a monumental collapse, it managed to meet its corporate obligations to at least one party: Macquarie Group."

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/mac-bank-unscathed-in-storm-fiasco-20090831-f595.html


----------



## Solly (1 September 2009)

*"Macquarie Bank acknowledges impact of Storm Financial collapse"*

"MACQUARIE Bank has acknowledged to a parliamentary inquiry that failed institution Storm Financial was one of its biggest clients for margin loans."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26007904-3122,00.html


----------



## Solly (1 September 2009)

*"CBA boss feels the heat on Storm Financial"*

'COMMONWEALTH Bank boss Ralph Norris may be ordered to appear before the parliamentary inquiry into the Storm Financial investment debacle after a Nationals senator blasted him yesterday for failing to attend."

More by Jamie Walker and Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26009401-20501,00.html


----------



## Solly (1 September 2009)

*"Battered by Storm, investors seek truth"*

"ANGRY former Storm Financial customers will get a chance to vent their frustrations to Federal parliamentarians at a sitting in Cairns today."

More in the Cairns Post by Henry Tuttiett here; 

http://www.cairns.com.au/article/2009/09/01/61415_local-news.html


----------



## Solly (1 September 2009)

*"Norris declines Storm invitation"*


"Commonwealth Bank of Australia chief executive Ralph Norris could be subpoenaed to face a federal parliamentary committee into the collapse of Storm after he declined an invitation to attend a hearing this Friday."

Read more in The Australian Financial Review of Sept 1 2009 by Duncan Hughes.


----------



## Big Max (1 September 2009)

darkside said:


> Max
> Once again , why the anger , how about directing it towards the perpetrators of the problem, you remember The Evil Banks, the disgracefull, stealing lying fraudulent FPs and how could we forget good old Emmanual and Julie who didn't renew their Domain Name or Web Hosting .
> 
> http://cassimatis.com.au/
> ...




Hey Darkside, when you're proven to be wrong, it's polite to apologise and important that you correct the record. I'll say it again . . . not only am I not a former Storm employee, I am not a former Storm client! I am a paid consultant to SICAG. Do the right thing.:nono::nono::nono:


----------



## abagnale (1 September 2009)

Hey Big Max as I don't have the history here most have, can you tell  us what the biggest whinge the SICAG members have with Storm?
I get mixed messages it seems to be the Banks are bad and evil, then the advisers are crook. It just doesn't seem to make sense that the whole company was set up to fail.

I see Mr Norris will not appear at the Inquiry the same as E&J. As somebody looking from the outside it's all very confusing.

Maybe we will all have to wait for Channel 9 to produce the 'Moneybelly' series for it all to make sense.


----------



## Ironhalo (1 September 2009)

Big Max said:


> Hey Darkside, when you're proven to be wrong, it's polite to apologise and important that you correct the record. I'll say it again . . . not only am I not a former Storm employee, I am not a former Storm client! I am a paid consultant to SICAG. Do the right thing.:nono::nono::nono:




I'd love to apologise, but I have nothing to apologise about. As long as you keep trying to paint GG, Bunyip and myself as some kind of SICAG-haters who take delight in seeing Stormer's pain, when all we have done is illustrate concerns a lot of people have with some of the members of SICAG and some of the unsavoury Storm employees who have leapt onto the SICAG bandwagon, then you will continue to get forum posts you don't like. Trust me mate, I'm pretty sure I can speak for the others and say that we aren't the enemy, we're on your side. 

And for someone who really is on the periphery of the Storm experience, i.e. not an ex-employee, not a Storm investor, you certainly get apoplectic about anyone being dark over the whole affair and raising even the most basic questions about your 'employer', whom while they have done some excellent work, have sullied themselves to a small degree by allowing the ex-Storm bottomfeeders to board their ship. 

If no one in SICAG has a love for Manny, then why hasn't there been ONE post, paragraph or article pertaining to Storm's negligence in all of this on the website? Instead we have a disclaimer practically supporting Storm's bonkers fee structure and vitriol/quotes about the evil of banks. The very banks who ensured that Storm (and vicariously it's clients) did very well for themselves during the good years. People ask why CBA shut the door on Storm practically overnight. Do you really think that Manny was an innocent bystander who was trying to save his clients from financial ruin first and foremost? I don't believe he meant any harm to his clients initially, but when it all went pear-shaped, it very quickly became about 'how many treasure chests we can offload off the sinking ship'. In short, it would appear that the wheels were coming off long before the company imploded as spectacularly as it did.

There is NO mention of Storm's negligence, Manny/Julie's greed or incompetence ANYWHERE on the SICAG website. As an analytical man (and I am sure I am not the lone ranger), I look at that say 'hmmm why would they do that?', as a first impression. It might not be the right impression, but because no one can give me an answer on it, and noting my brother who after receiving some explosive evidence from his bank showing that Emmanuel Cassimiatis ignored a large printed client list of people who had demanded to be sold down, was told by a key SICAG committee member 'that's not going to help our cause', my impression/perception becomes my reality. I won't mention names, because as we say, no names-no court-martials. 

Sorry mate, but my family got screwed by Storm, and to see some of the architects of this (and some of the most vocal are the very same people who ignored their phone calls last year when it was all going down) waving the SICAG 'justice' banner and screaming for compensation and 'what's best for the clients', it boils my blood. The banks are 1/3 of this drama, with the other 1/3 resting on the morally corrupt advisers who against their own morals continued to peddle their trusting clients into further financial ruin (ask anyone at your SICAG meetings who got their house mysteriously revalued and their margin loan step-increased right as the GFC had hit); and the other 1/3 rests with a certain couple in Belmont who have barely made a comment since they attempted to take their millions from the business and leave their clients high and dry with nothing but empty promises and platitudes for warmth.

Maxy, I'm sure if this wasn't an anonymous Internet forum you and I would probably have a beer over it and sit there and mull it together like two adults.

*shrugs*


----------



## bunyip (1 September 2009)

darkside said:


> Anastasia,
> 
> Hang in there, what i said to Harleyquin, applies to you as well.
> Hold your head up, keep positive, and yes maintain your spirit.
> ...




I definitely endorse Darkside's remarks....I too hope that Storm victims can find some closure on this and move on with lives that hopefully still contain joys and pleasures.
I think most of us over-estimate how much money we really need to lead fulfilling and enjoyable lives. Many of the best pleasures in life don't have a price tag - they're absolutely free.


----------



## darkside (1 September 2009)

Big Max said:


> Hey Darkside, when you're proven to be wrong, it's polite to apologise and important that you correct the record. I'll say it again . . . not only am I not a former Storm employee, I am not a former Storm client! I am a paid consultant to SICAG. Do the right thing.:nono::nono::nono:




Max, 

Are you refering to your own post? if so then i am big enough to accept your apology , otherwise *please in bold *, with sugar on top show me where i am proven wrong and said you worked for "storm" , or anything else i should retract .

Are you just gleaning over the posts again (i know you love that word).

 Clearly "humble" is not one in your vocabulary, other than that , then yes i accept your apology , and you should move on, then cut the medication in half, (DYOR i am not a Dr, just IMHO)  and direct your anger in the right place. 

A paid consultant to SIGAG, wow, when your finished promoting them, i'm sure with the professionalism  and restraint you have demonstrated on this site the job offers will keep flooding in .   

Do the right thing or wake up to yourself, works both ways.


----------



## Anastasia (1 September 2009)

To Darkside, Ironhalo, Bunyip, Solly and all who have offered us encouragement and a little consideration on this thread, "THANK YOU"I realize that this is a forum and as such members are at liberty to post their views. But it does mean a lot to sometimes read well directed words as trust me, we have done a very good job belting ourselves up...sometimes we can be our own worst enemies. And you are right....well directed words, and a little human compassion don't cost anything and do go a long way. So THANK YOU again and cheers..... see you at the Northern GG when this is all over.


----------



## DocK (1 September 2009)

Solly said:


> *"Parliamentary inquiry begins into Storm Financial failure"*
> 
> "Storm founders Emmanuel and Julie Cassimatis are not scheduled to give evidence to any of the hearings."
> 
> ...






Solly said:


> *"Norris declines Storm invitation"*
> 
> 
> "Commonwealth Bank of Australia chief executive Ralph Norris could be subpoenaed to face a federal parliamentary committee into the collapse of Storm after he declined an invitation to attend a hearing this Friday."
> ...




This is what I don't get.  I'm not at all knowledgeable about the ins and outs of parliamentary enquiries, but surely it's all pointless if the Cassimatises (sp?)(Cassimatisii (?)- sounds like a disease - quite apt) aren't made to front up and answer the hard questions we all want answers to?  Same with CBA.

I want to know:  

1.  What went wrong in the "marriage" to make CBA file for divorce with such haste?  Had the relationship been going sour for some months (a fact storm would have been at pains to keep private from their clients) or was it prompted by panic? 

2.  Who was really responsible for communicating margin calls to clients?

3.  For how long had storm been trading whilst knowing they were insolvent, or nearly so.  Clearly they were still gouging new clients for fees until the bitter end - and should have known they had no hope of covering liabilities to ATO and CBA at that stage, let alone the rest     

4.  Why didn't storm act on the written requests to cash out of the managed funds?  

5.  How do they justify taking such a massive dividend on 30 June 2008 (when the ship must have been starting to list a  bit, if not already taking on water) and how do they justify signing on Julie's sister as a director in order to pay another 2mill div to themselves in the dying days prior to being wound up, as well as pre-paying PR firms, law firms etc for costs they knew they'd incur after being wound up - presumably in an attempt to reincarnate themselves?

6.  What happened to the "war chest" and on what basis was it determined that some clients were "helped out" with unsecured, interest-free loans from company funds, and others weren't?  

7.  How do they sleep at night?  Seriously.  I'd be interested to know if they care at all about the lives they've helped to ruin because they either believed their own ego-fuelled lies, or were simply too busy looking out for themselves to care.

I'm sure other questions will come to me, and I'm sure there are  very, very many other ex-clients who would like the same answers.  I don't really see the point in having lots of devastated people with very similar stories to tell have to go through the pain of publicly "baring their souls" and having to endure the humiliation and scorn of some sections of the community, if the main players in this tragedy aren't going to be made to account for themselves.  I may be bitter and twisted, but I want my pound of flesh!  Monetary compensation would be welcome if it comes, but I won't be happy until Manny & Julie are made to stand up and account for their decisions and actions.  If they really feel they've done nothing wrong - why are they hiding??  Bring back the stocks I say - and let me load up!  

Rant over - I feel better now


----------



## Solly (1 September 2009)

*"Spotlight on Storm debacle"*
By STUART WASHINGTON IN CAIRNS for the SMH

"And there is the tantalising prospect that the committee may even hear from Emmanuel Cassimatis, the chief executive of the failed company and the architect of its disastrous strategy, when hearings move to Brisbane on Thursday."

http://business.theage.com.au/business/spotlight-on-storm-debacle-20090901-f5mz.html

*"I'm a big loser too: Storm boss"*
By STUART WASHINGTON IN CAIRNS for the SMH

"The Cairns office of Storm Financial had no idea what was happening to its clients' money as the market plunged precipitously late last year, the former managing director of Storm Financial in Cairns, Gus Dalle Cort, told a parliamentary committee hearing today"

http://business.smh.com.au/business/im-a-big-loser-too-storm-boss-20090901-f6gk.html


----------



## Quincy (1 September 2009)

Solly said:


> *"Norris declines Storm invitation"*
> 
> 
> "Commonwealth Bank of Australia chief executive Ralph Norris could be subpoenaed to face a federal parliamentary committee into the collapse of Storm after he declined an invitation to attend a hearing this Friday."
> ...




See the following article (as referenced by the above post).

View attachment AFR - 010909.pdf


----------



## bunyip (1 September 2009)

DocK said:


> This is what I don't get.  I'm not at all knowledgeable about the ins and outs of parliamentary enquiries, but surely it's all pointless if the Cassimatises (sp?)(Cassimatisii (?)- sounds like a disease - quite apt) aren't made to front up and answer the hard questions we all want answers to?  Same with CBA.
> 
> I want to know:
> 
> ...




1. The 'marriage' between CBA and Storm was going to last only while there was money in it for CBA. The marriage was over as soon as CBA decided that the security of their loans was at risk. The financial meltdown and ensuing market crash, combined with the absurd levels of gearing of Storm clients, meant that the banks became increasingly edgy as clients approached margin call.  My guess is that margin calls were made to Storm, since Storm apparently were acting on behalf of clients.
For whatever reason, Storm didn't notify clients of those margin calls. Hence, margin calls were not met, so the bank sold clients down to recover its money.

2. It's been virtually impossible to find out who had the responsibility of notifying Storm clients of margin calls. The banks say it was Storm's responsibility, and Storm claim it was the banks responsibility. Storm clients themselves don't seem to know. The question has been asked a number of times on this thread....._'Did you authorise Storm to act on your behalf'?_ 

As far as I'm aware, no Storm client has yet answered that question.

3. How long Storm had been trading while insolvent? - this is another question that has no clear answer at this stage. Perhaps the truth will come out once the enquiry gets underway.

4. Storms failure to comply with requests to move clients to cash was almost certainly a result of their fear of losing their income stream. Every client moved to cash would have meant a loss of ongoing management fees for Storm. And it would have been bad publicity - had the story got around that Storm clients were cashing out en masse, new clients would have been loathe to sign on with Storm. The number of new clients had already dwindled alarmingly as the market crash took hold. To lose thousands of existing clients as well would have been the death knell for Storm.

5. Smooth-talking Cassamatis has shown considerable talent for inventing reasons to justify his massive dividend grabs while he was busy watching his clients get wiped out. The simple fact is that the big dividends cannot be justified.
As for signing Julie's sister on as a director so they could get their grubby hands on another 2 million dollar dividend when they knew their company was finished.....this low act really shows the true character of these people.

6. The 'war chest' (if it ever existed) was problem much smaller than Storm led clients to believe. More likely, however, is that the war chest was nothing but a figment of Storm's imagination.

7. I'd be pretty sure that the Cassamatisis and their former Storm advisers have had many sleepless nights. But I suspect that they're worrying more about themselves than about their former clients. I doubt if many of them have feelings of guilt and remorse for the clients lives they've wrecked.


----------



## Harleyquin (1 September 2009)

Solly said:


> *"Spotlight on Storm debacle"*
> By STUART WASHINGTON IN CAIRNS for the SMH
> 
> "And there is the tantalising prospect that the committee may even hear from Emmanuel Cassimatis, the chief executive of the failed company and the architect of its disastrous strategy, when hearings move to Brisbane on Thursday."
> ...



Wouldn't mind a crystal ball to see what's going to happen with this inquiry and if I get a chance to throw it at EC all the better.  EC was the big ideas man behind storm and he is the one we all want to see up there getting a grilling from the big boys, the man needs stringing up, and his wife is in there up to her neck as well.  

According to Gus Dalle Court's evidence today ASIC and Storm Central in Townsville have gagged their employees during the most crucial time.  That needs to be explaned by EC for starters. 

There are some good comments on this forum keep them coming.  We all want to know exactly what happened.  I've blamed myself for eight months and cursed storm and anyone associated with them for just as long.  Depression then set in and I'm just coming back to life with the help of a few little white pills.  Will be glad when this whole sordid mess is well and truly sorted and behind us and we can move on.  

We aren't flash people and don't need a fortune to be happy but what these mongrels have done to so many is beyond human belief.  That's my little spack attack for the day.  Thanks for the words of encouragement you have no idea how much it all helps.


----------



## Garpal Gumnut (1 September 2009)

I'm staying at the Southbank in Townsville for tonight and will get any goss I can from Ripoll and McDonald.

The staffers accompanying these shows like a beer and will divulge to a yokel like moi.

Should be interesting tomorrow. I'll have a hipflask with me.

Della Corte certainly made a duclorange of the Storm behaviour in the dying days of Storm.

The SICAG model will come under increasing pressure if the reactions of Storm victims in Cairns to the testimony is any indication.

Manny's role will be a major point pressed in Townsville and further south this week.

The SICAG model will have Jelich to flesh out the role of Storm.

From what I heard today, there will be grounds to recommend criminal charges, so book your place in Lennons early.

gg


----------



## Mindstorm (1 September 2009)

Garpal Gumnut said:


> I'm staying at the Southbank in Townsville for tonight and will get any goss I can from Ripoll and McDonald.
> 
> The staffers accompanying these shows like a beer and will divulge to a yokel like moi.
> 
> ...





Hi,

Could you please explain to me what you mean by "The SICAG model"?  

Thanks!


----------



## specialed (1 September 2009)

Dito, Can you please explain what you mean by "the SICAG Model". Fair dinkum Garpel, I read your posts and swear when your not submitting some reply on here you must be searching for the latest conspiracy theory.   Cant wait to here your analysis of "The Sicag Model".   Can you also let me know who it was who really shot kennedy, oh, and Is Michael Jackson really dead ??


----------



## Solly (1 September 2009)

*"Storm Financial 'gagged staff'"*

"STORM Financial gagged staff from speaking to clients as they presided over "chaos" allowing some of their 4000 investors to be financially destroyed, an inquiry has heard."

More by Peter Michael in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26011595-3102,00.html


----------



## Solly (1 September 2009)

*"Storm inquiry eyes CBA chief"*

"Commonwealth Bank chief executive Ralph Norris is facing the threat of being compelled to appear before a federal parliamentary committee's inquiry into Storm Financial after the committee was formally notified yesterday he would not appear at hearings on Friday."

More from STUART WASHINGTON IN CAIRNS from the SMH

http://business.watoday.com.au/business/storm-inquiry-eyes-cba-chief-20090901-f5w8.html


----------



## Solly (1 September 2009)

*'Where's Norris?', asks Storm inquirers*

"An Opposition member of the Parliamentary Joint Committee on Corporations and Financial Services has expressed his disappointment that Commonwealth Bank (CBA) chief executive Ralph Norris will not be appearing at hearings in Sydney this Friday to discuss the bank’s involvement with Storm Financial."

More from Mike Taylor in Money Management here;

http://www.moneymanagement.com.au/article/wheres-norris-asks-storm-inquirers/496408.aspx


----------



## Solly (1 September 2009)

*" 'Chaos' behind the scenes as Storm failed "*

"AS Storm Financial veered towards collapse late last year its senior staff had virtually no idea of the dire situation the company and its clients were in, an inquiry has heard.
Its customers knew even less, especially in the final days as the company's head office ordered advisers not to talk to clients."

More from AAP on news.com.au

http://www.news.com.au/story/0,27574,26012726-29277,00.html


----------



## Garpal Gumnut (1 September 2009)

Solly said:


> *"Storm Financial 'gagged staff'"*
> 
> "STORM Financial gagged staff from speaking to clients as they presided over "chaos" allowing some of their 4000 investors to be financially destroyed, an inquiry has heard."
> 
> ...






> Mr Dalle Cort is the first former Storm adviser to give evidence to a joint parliamentary inquiry into Financial Products and Services in Cairns today.
> 
> His evidence that he did not call the banks for clarification as his 1000 clients faced devastating margin calls drew gasps of horror from the packed public gallery.




http://www.news.com.au/couriermail/story/0,23739,26011595-3102,00.html

Its all coming out now, and its only the first day. No wonder there were gasps of horror.

gg


----------



## specialed (1 September 2009)

Garpal Gumnut said:


> I'm staying at the Southbank in Townsville for tonight and will get any goss I can from Ripoll and McDonald.
> 
> The staffers accompanying these shows like a beer and will divulge to a yokel like moi.
> 
> ...




Still Waiting...What is the SICAG model ?


----------



## Solly (1 September 2009)

Garpal Gumnut said:


> I'm staying at the Southbank in Townsville for tonight and will get any goss I can from Ripoll and McDonald.
> 
> The staffers accompanying these shows like a beer and will divulge to a yokel like moi.
> 
> ...




gg, Lennons is looking good, see that tight left turn to the car park but the valet reckons you should have no problem getting the Azure down the ramp.


----------



## Harleyquin (1 September 2009)

Solly said:


> *"Storm inquiry eyes CBA chief"*
> 
> "Commonwealth Bank chief executive Ralph Norris is facing the threat of being compelled to appear before a federal parliamentary committee's inquiry into Storm Financial after the committee was formally notified yesterday he would not appear at hearings on Friday."
> 
> ...




The CBA submission contradicts what almost everyone else's submission has stated.  Interesting days ahead for the CBA Solly and about time.  I look forward to seeing him try to squirm out of this one.


----------



## Ironhalo (1 September 2009)

SICAG Model *(noun)* a system of actions performed by SICAG

1. To blame the banks/ASIC solely for the implosion of Storm Financial, at the exclusion of anyone who was also responsible, thereby attempting to ensure questions are not asked of people who are morally bankrupt (_see also: Emmanuel Cassimatis and Storm Employees_) "SICAG is about getting a decent outcome for all its members and furthermore ensuring that both the banking and financial services industry act ethically and can be held responsible for their actions. Additionally, we here in Australia need to be confident that the regulators are doing their jobs and not simply sitting on their hands."
2. To provide a means of moral support to victims and their families.
3. While doing a good job at the above, sadly concurrently dodging questions pertaining to links and conflict of interest between key SICAG members and ex-Storm employees responsible for skimming clients while driving them into financial ruin._ (see also: hypocrisy, Ron Jelich and Andrew O'Brien)_

That define the model for you?


----------



## Garpal Gumnut (1 September 2009)

specialed said:


> Still Waiting...What is the SICAG model ?




Get Maxie to answer bunyips's points above and I'll answer yours mate.

Ironhalo might give you some insight mate.

gg


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## Grey Ghost (1 September 2009)

Solly said:


> *"Storm inquiry eyes CBA chief"*
> 
> "Commonwealth Bank chief executive Ralph Norris is facing the threat of being compelled to appear before a federal parliamentary committee's inquiry into Storm Financial after the committee was formally notified yesterday he would not appear at hearings on Friday."
> 
> More from STUART WASHINGTON IN CAIRNS from the SMH




Unfortunately this is starting to follow a predictable pattern.  First E and J Cassimatis are no shows and now despite previously mouthing conciliatory platitudes about mistakes made by the CBA Ralph Norris is refusing to come out of his bank vault and we haven't even got to the BOQ yet who have dug in even more.  I'm not sure what powers this inquiry has to compel people to appear before it but I think they'll need everything they've got to have any chance of getting them to front.  
There is a lot of manuevering yet to go on about who is actually going to front it.  For the sake of all the stormies out there I hope all the big players in this disaster are compelled to front even if they have to be dragged in if necessary:bbat:


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## Garpal Gumnut (1 September 2009)

This is getting like the Scahpelle Corby thread, there are so many new posters in the last few days.

Refreshing to get folk out from behind their curtains and give their views.

Storm will be up front in the media over the next few weeks.

Let us hope the truth will out.

Manny's site is still down. The "Crusade" foundered.

gg


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## Garpal Gumnut (1 September 2009)

> Mr Dalle Cort also told the committee that products offered by Storm had not been the responsibility of Storm Financial's advisers, and that documentation for loans had been handled by Storm's Townsville headquarters.
> 
> The chairman of the committee, Bernie Ripoll, asked Mr Dalle Cort what his clients had received for their fees if the banks were entirely responsible for the lending.




http://business.smh.com.au/business/im-a-big-loser-too-storm-boss-20090901-f6gk.html

Bernie sounds like he has his finger on the pulse.


gg


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## bunyip (1 September 2009)

I see that Gus Dalle Cort is still defending Storm's debt-focused investment model....another clown who can't seem to face up to reality.


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## DocK (1 September 2009)

bunyip said:


> 1. The 'marriage' between CBA and Storm was going to last only while there was money in it for CBA. The marriage was over as soon as CBA decided that the security of their loans was at risk. The financial meltdown and ensuing market crash, combined with the absurd levels of gearing of Storm clients, meant that the banks became increasingly edgy as clients approached margin call.  My guess is that margin calls were made to Storm, since Storm apparently were acting on behalf of clients.
> For whatever reason, Storm didn't notify clients of those margin calls. Hence, margin calls were not met, so the bank sold clients down to recover its money.
> 
> 2. It's been virtually impossible to find out who had the responsibility of notifying Storm clients of margin calls. The banks say it was Storm's responsibility, and Storm claim it was the banks responsibility. Storm clients themselves don't seem to know. The question has been asked a number of times on this thread....._'Did you authorise Storm to act on your behalf'?_
> ...




I addressed that question in an earlier post of mine when I stated I absolutely never gave storm the authority to act on my behalf in any way with my margin lender - but in my case it was Macquarie and not CGI and I was not in margin call, hence no call to be made.  There appears to be  a great deal of debate about whether CGI took it upon themselves to appoint storm as the agent for their clients or whether storm requested that it be so - and from reading several submissions it would appear that a good deal of CGI clients expected direct contact from CGI in the event of a call.

I don't mean any offence Bunyip, and I don't disagree with your comments above, but the main point of my post/rant was that I personally want to see Emmanuel & Julie answer the questions I posed.   I'm sure most of us are quite aware of the reasons for most of their actions - I want to see them have to stand in front of a room full of ex-clients and account for themselves.  I have a cynical feeling that this enquiry may amount to little more than satisfying politician's desire for currying favour with the public in a "let's be seen to be doing the right thing" way - and for all the hype it may actually achieve very little.  I hope not.  At the very least I dearly wish to see E & J try to justify what we all know is unjustifiable.  

Petty of me, but I want something for my fees


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## Solly (1 September 2009)

*Inquiry into Financial Products and Services in Australia*

The transcript from the Melbourne hearing on 26/08/2009.

Happy reading....

http://www.aph.gov.au/hansard/joint/commttee/J12133.pdf


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## Solly (1 September 2009)

*"Storm and bank staff face inquiry"*

"However, the chances of Storm founders Emmanuel and Julie Cassimatis coming before the inquiry are fading.

Lawyers for the couple are negotiating terms which are understood to include that the taking of any evidence be closed to the public."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/09/01/75855_news.html


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## Mindstorm (1 September 2009)

gg, (I tried to quote your post but am not allowed to until I have made 5 posts)

I don't want to appear rude, but I asked you to explain a phrase that you used, "The Storm model", and another poster also asked.

You have posted since, but not explained to us what your explanation of your phrase is.

So, I will ask you again.

What is "The Storm model"?


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## Steve Borden (1 September 2009)

Harleyquin said:


> The CBA submission contradicts what almost everyone else's submission has stated.  Interesting days ahead for the CBA Solly and about time.  I look forward to seeing him try to squirm out of this one.




Harleyquin

I get the preoccupation with having Mr Norris in front of the inquiry, I'm sure it would be a great spectacle but it's not like he is going to get sliced and diced by a group of mid-level, career politicians. Any specific questions will simply be deferred to his colleague who was in charge of that area.

All he would have done was give an overview and re-state righting the wrongs, etc and provide a summary the submission.

Wouldn't you rather hear from the bloke in charge of margin lending or the bloke in charge of CFS or even the bloke in charge of the bloke in charge of the North Qld Area Office. They are the ones who knew what was going on and went on.

It's the same with BoQ, the CEO will push the company line, Carnes and Buchanan and the former auditor are the only ones who really know what they were up to.

Of equal interest is whether Cassimatis acolyte McCulloch will continue to be his master's mouthpiece or finally show some fortitude and let everyone know just how flawed the model was and how unethical Storm and its salespeople were.

Ain't going to happen though.


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## Landyman (1 September 2009)

Garpal Gumnut said:


> Max, you are getting a bit emotional and tired.
> 
> Save your energies for the Inquiry.
> 
> ...




Gumnut,

As a Townsville local I am surpised you have not yet twigged to just who "Big Max" is.

I think you will find he used to be quite high up in  the local sausage wrapper TD Bulletin.

Do you still ride a Harley Max?

Landyman


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## Harleyquin (1 September 2009)

DocK said:


> This is what I don't get.  I'm not at all knowledgeable about the ins and outs of parliamentary enquiries, but surely it's all pointless if the Cassimatises (sp?)(Cassimatisii (?)- sounds like a disease - quite apt) aren't made to front up and answer the hard questions we all want answers to?  Same with CBA.
> 
> I want to know:
> 
> ...



Re: No 2 Margin Calls
Email from a ex stormie says 

*'We had no margin calls from Storm or CGI in 2008-9.   We eventually had a letter from Clothier saying margin calls were never sent to clients - only to storm.  This is untrue as we had margin calls a few years ago and the letter states after all the figures "and a copy has been sent to your financial adviser."  If there was to be any change in margin call arrangements then we should have been notified.  Also - if storm negotiated higher LVRs - we also should have been informed.  So Dallecort is the biggest loser in Cairns?  Well our losses are greater than his.*

Where does the lying begin and where does it end?  I bet my left arm that this ex stormie is telling the truth.  Many who have been in storm for some time received these same letters from the CBA/CGI in the past and have the original letters to prove it and yet this time they didn't send them out.  WHY???  Many ex stormies who received these letters are now saying the same thing - clients were never informed but should have been informed of any changes, if there were any, and yet the CBA now say that it has never been their policy to send these letters out to clients now or in the past.  Unbelieveable but true.

Clients had LVR's go as high as 137% no wonder they found themselves in negative equity.  Whose fault is this???  Storm directors and the big boys from the top end of town were all in it up to their necks.  The money was too good to say no to.  Dok if they bring in the stocks you'll have plenty of mates helping you load up.  

I don't know exactly what happened and I doubt anyone of us do but someone in their mansion does and they need to get them and their cronies out of there and face the music and the quicker the better so we can all move on.  This is white collar fraud at the highest level.  We already know it they just have to prove it and it shouldn't be too hard.  Once they start lying they have to make sure that they continue with that same lie or they'll soon get caught out and with everyone of the players telling a different version of the story the next couple of months should prove to be very interesting indeed.  

Real Peyton Place stuff this.  Where is Magnum PI when you need him.  Probably in darn Hawaii enjoying himself and good on him.


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## Ironhalo (1 September 2009)

Harley you gave me a laugh with your Magnum PI reference, he's probably back-mouthing Higgins while driving around the island in his 80's Ferrari mate!

For those new to the thread (welcome), the *Storm model* consisted of a husband and wife team who headed up a company called Storm, and they were very active in the Townsville area. Along the way they acquired a few other interstate/Brisbane financial advice firms with the promise that they would pay for the acquisitions with millions of dollars by floating the company on the ASX. The plan failed, but business continued, and by all accounts was doing well. Storm HQ still owed their acquired companies millions, but since everyone was earning a great profit, the issue wasn't pressed, and it was intimated that when the company successfully floated in the future, these owners would be paid.

Storm's main model was rather tame at first, small margin loans to help clients invest in the stock market (primarily investing in the ASX200 index funds) with the promise that clients would make on average 13.5% p.a. (taking into account bad years) on the stock market with a long term view over say, 20-30 years. Storm charged 7% fees on all investments (roughly speaking, and abnormally high for the industry regardless) but boasted of second-to-none customer service and client relations. Most referrals to the business were by word-of-mouth, such was the fervour of their client base.

Storm boasted of 'strong links' to the banks, and clients were given favourable loan considerations due to this 'relationship', not to mention that LVRs on the Storm badged index funds were set 10% higher than the market average to reflect the faith Storm and the banks had in each other. The link was allegedly so strong (both the banks and Storm were cleaning up) that Storm took large groups of clients on overseas holidays (which were paid for by clients) but subsidised heavily by the banks. One client was famously quoted as stating, when asking Emmanuel Cassimatis overseas at a glitzy function 'who was paying for most of this?' got the reply 'enjoy it mate, it's on the banks!'

Of course greed got the better of the company, and soon they were urging people to take out massive loans, often in excess of what they could ever pay back to gamble on the normally stable ASX200 index. There are reports that pensioners on <$20k a year, were signing loan docs for margin loans for over $900k-1mil. Of course Storm and the banks were making their cash from this, and the market was on the up so everyone was happy.

Of course all went awry when the GFC hit. The Cassimatis's, desperate to save the business/make some quick cash (as their profits were now going backwards), through Storm advisers phoned trusting elderly and soon to be retired clients and informed them that 'hey guess what, good news, you can afford to borrow more money as we have just found more equity in your assets/homes!' This was to prove the last nail in the coffin for many Storm clients. The GFC turned disasterous, with the ASX200 losing up to 40% over one/two weeks. Client's had sent letters to Storm demanding Storm sold their investments down, but under apparent orders from Townsville HQ, this didn't happen, despite Storm advisors having a day to day feed of how much deepening trouble their client's were getting into. Still they did nothing. Storm went into shutdown mode, and clients weren't able to access their accounts (due to the banks not returning calls) and Storm advisors were gagged/trying to bail from the sinking ship. No one got given any status updates as to their margin LVR levels, and when the smoke cleared, people found that the banks had called in their margin loans, and in some cases, had sold down their investments at the lowest end of the market without consultation and taken the proceeds for the margin loans. Regardless, people were still left owing the banks up to 30% more then what they borrowed/saved during their entire lives....all payable within a few weeks before and over Christmas.

And that is where the situation is, and that should explain the 'Storm model' hopefully as accurately as I can make it out to be.

SICAG is a group of people/clients/ex-employees (cough)/relatives of Storm employees (cough, cough) who banded together to try and remedy the situation, support each other, and get justice for the victims. This has proven successful, with a class action by Slater and Gordon forcing the banks to admit some of the blame in not informing clients of their margin loan calls and selling their shares without consultation.

HOWEVER, there are some discrepancies in terms of what some people feel is a conflict of interest in terms of SICAG not putting any of the blame onto Emmanuel/Julie Cassimatis, or any of the ex-Storm employees/Storm executives. Many in this forum believe that some of the individuals rallying behind the good work of SICAG are hypocritically the same people (or relatives of the same people) that propagated and knowingly exacerbated the situation by placing their trusting and vulnerable clients into more debt. I have defined the SICAG model (albeit rather sarcastically) below. 

In saying that, I fully endorse the good work that SICAG have done in providing moral support to the Storm victims. There have been many stories of SICAG people talking people back from the edge. 

I just don't agree with the company they keep.

*SICAG Model* *(noun)* a system of actions performed by SICAG

1. To blame the banks/ASIC solely for the implosion of Storm Financial, at the exclusion of anyone who was also responsible, thereby attempting to ensure questions are not asked of people who are morally bankrupt (_see also: Emmanuel Cassimatis and Storm Employees_) "SICAG is about getting a decent outcome for all its members and furthermore ensuring that both the banking and financial services industry act ethically and can be held responsible for their actions. Additionally, we here in Australia need to be confident that the regulators are doing their jobs and not simply sitting on their hands."
2. To provide a means of moral support to victims and their families.
3. While doing a good job at the above, sadly concurrently dodging questions pertaining to links and conflict of interest between key SICAG members and ex-Storm employees responsible for skimming clients while driving them into financial ruin._ (see also: hypocrisy, Ron Jelich and Andrew O'Brien)_

Hope that is of assistance.


----------



## Solly (2 September 2009)

*"Storm founder Emmanuel Cassimatis to face inquiry"*

"FALLEN Storm Financial founder Emmanuel Cassimatis is tipped to make a star appearance at an inquiry into the collapse of his multimillion-dollar empire."

More by Peter Michael from the Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26013817-3102,00.html


----------



## Solly (2 September 2009)

*"Storm inquiry eyes CBA chief"*

"We can actually carry out a subpoena or summons to have him appear, I believe that's the power the committee has," National Party senator John Williams told BusinessDay.

More by Stuart Washingtion from the SMH here;

http://business.watoday.com.au/business/storm-inquiry-eyes-cba-chief-20090901-f5w8.html


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## Solly (2 September 2009)

*"Macquarie says not a Storm advice giver
Firm supports margin lending proposal"*

"Macquarie has used its submission to the parliamentary inquiry into Storm Financial to distance itself from the collapsed advice group."

More by Kate Kachor from Investor Daily here;

http://www.investordaily.com/7286.htm


----------



## Solly (2 September 2009)

*"Storm base central to crash"*

"THE central role of Storm Financial's headquarters in the financial planner's collapse emerged yesterday as a former senior staffer in Cairns said he had no knowledge of what was happening to his clients' money in last year's market crash."

More by Stuart Washington in Cairns for the SMH here;

http://business.smh.com.au/business/storm-base-central-to-crash-20090901-f6z8.html


----------



## Solly (2 September 2009)

*"Storm Financial probe goes to Townsville"*

"A federal parliamentary inquiry into Storm financial will head to the company's headquarters in Townsville on Wednesday to discover why advisers were ordered not to talk to customers just days before the company's collapse."

More from AAP in the SMH here;

http://news.smh.com.au/breaking-news-national/storm-financial-probe-goes-to-townsville-20090902-f74t.html


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## Solly (2 September 2009)

*"Ex-Storm adviser's theory on downfall"*

"WITH the parliamentary inquiry investigating Storm in town today, it is interesting to look at one of the inquiry's submissions from the former wealth adviser's IT manager, Allan McDonald."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/09/02/76065_business_desk.html


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## Anastasia (2 September 2009)

I found this interesting reading....seems BoQ are in strife in more than one way.
http://cspcentral.com.au/2009/09/bank-of-queensland-finances-telco-scam/


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## Solly (2 September 2009)

Ironhalo said:


> *SICAG Model* *(noun)* a system of actions performed by SICAG
> 
> 1. To blame the banks/ASIC solely for the implosion of Storm Financial, at the exclusion of anyone who was also responsible, thereby attempting to ensure questions are not asked of people who are morally bankrupt (_see also: Emmanuel Cassimatis and Storm Employees_) "SICAG is about getting a decent outcome for all its members and furthermore ensuring that both the banking and financial services industry act ethically and can be held responsible for their actions. Additionally, we here in Australia need to be confident that the regulators are doing their jobs and not simply sitting on their hands."
> 2. To provide a means of moral support to victims and their families.
> ...




Ironhalo, Macquarie is your friend....

http://www.macquariedictionary.com.au/anonymous@9c97492388912/-/p/dict/addaword_blurb.html


----------



## Pindibog (2 September 2009)

Solly said:


> *"Storm and bank staff face inquiry"*
> 
> "However, the chances of Storm founders Emmanuel and Julie Cassimatis coming before the inquiry are fading.
> 
> ...




There is a vacant spot on Thurs morning for 1  1/2hrs. I assumed that was for them.


----------



## Harleyquin (2 September 2009)

bunyip said:


> I see that Gus Dalle Cort is still defending Storm's debt-focused investment model....another clown who can't seem to face up to reality.



Here's portion of an email from one of Dalle Cort's ex clients after hearing his comments at yesterday's inquiry in Cairns.

*Funny Gus Dalle Cort told us that they were talking to the banks daily - or perhaps it was 'in contact with the banks daily'. Gee if he was the biggest loser in Cairns don't know what other clients with $millions margin loans lost - I know what I lost....... sounds like they are all suffering from selective memory losses.*

Here's the direct link to the parliamentary inquiry submissions.  Gus Dalle Cort's is No. 153.  Some others of interest are 357 -CBA, 369 -Levitt/solicitors and 386 -Carmela R and Kristy D -two former CBA employees who worked for storm.



http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sublist.htm

See there are almost 400 submissions on there now and if you add the supplementaries there is a lot of reading to be done.  There's a lot of people out there who have lost everything and don't have the know how to put a submission in which is a real shame as the submissions only represent a small part of the thousands who have been financially ruined but they certainly give an insight into the collapse from all the players.  Apart from Ron Jelich and Gus Dalle Cort doesn't look like any other advisors put in a submission unless they have marked them as confidential.
[
COLOR="Black"]We're all hoping that the truth comes out over the coming months and we can all move on.  We're tired, sick and broke, but still in there fighting and ANGRY and for those of you who believe we are also to blame, we do blame ourselves for being sucked in and not knowing how to do our research properly.[/COLOR]


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## Harleyquin (2 September 2009)

Solly said:


> Ironhalo, Macquarie is your friend....
> 
> http://www.macquariedictionary.com.au/anonymous@9c97492388912/-/p/dict/addaword_blurb.html




That's an interesting site Solly.  I can think of a few I'd like to put in there but I don't think they'd pass the PC test.


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## Harleyquin (2 September 2009)

Garpal Gumnut said:


> This is getting like the Scahpelle Corby thread, there are so many new posters in the last few days.
> 
> Refreshing to get folk out from behind their curtains and give their views.
> 
> ...



I've only just discovered this site GG and I see where you've started it and not so long ago either considering the length some of them have been on the go.  If I'd known it existed before I would have been on here long before this bashing everyone's ear.  It's a great site and I'm interested not only in seeing some sort of resolution and a successful outcome for all victims/survivors of this calamity but finding a way forward, it's not so easy when retirement is just around the corner.

Not only interested in the Storm thread either.  Looks like we can learn a thing or two about trading ourselves.  Don't have the confidence or the money to try it just yet but will keep working on it.  Don't think I'll bother going through the experts who don't know what to do or how to monitor anyone's portfolio again.  I apologise to all those genuine financial people out there but once bitten twice shy.

Have been looking at the newbie thread and some of the others.  If anyone has any super duper advice on exactly where we go and what we do I'll gladly accept your advice we all need to move forward....but I'll try to do my research before I do it...might need some helpful advice there too.  No good sitting here on the fence or going backwards forever.  

GOOD LUCK TO ALL YOU EX-STORMIES OUT THERE -GO GET 'EM- AND LET'S CONTINUE TO STICK TOGETHER AND FIGHT THIS THING TO THE BITTER END.


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## Ironhalo (2 September 2009)

You've got a great attitude Harley, good to have you aboard mate.


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## Pindibog (2 September 2009)

Harleyquin said:


> Here's portion of an email from one of Dalle Cort's ex clients after hearing his comments at yesterday's inquiry in Cairns.
> 
> *Funny Gus Dalle Cort told us that they were talking to the banks daily - or perhaps it was 'in contact with the banks daily'. Gee if he was the biggest loser in Cairns don't know what other clients with $millions margin loans lost - I know what I lost....... sounds like they are all suffering from selective memory losses.*
> 
> ...




I have sent you a private email please check your inbox.


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## bunyip (2 September 2009)

DocK said:


> I addressed that question in an earlier post of mine when I stated I absolutely never gave storm the authority to act on my behalf in any way with my margin lender -
> 
> 
> I personally want to see Emmanuel & Julie answer the questions I posed.   I'm sure most of us are quite aware of the reasons for most of their actions - I want to see them have to stand in front of a room full of ex-clients and account for themselves.  I have a cynical feeling that this enquiry may amount to little more than satisfying politician's desire for currying favour with the public in a "let's be seen to be doing the right thing" way - and for all the hype it may actually achieve very little.  I hope not.  At the very least I dearly wish to see E & J try to justify what we all know is unjustifiable.
> ...




Sorry Dok - I obviously missed your answer that you never gave Storm authority to act on your behalf with your margin lender.

Yes, it'd be good to see EC and JC trying to defend themselves in front of a room full of ex-clients. But their answers would probably be just a rehash of the drivel and evasive waffling they gave on their website when confronted with hard questions from angry ex-clients.

I share your concern that this enquiry will achieve little more than to make some politicians look like they care. 
It will also highlight what we already know - that incompetence and unprincipled behaviour were rife in both Storm and their lenders.
But I'm doubtful that incompetence and unprincipled behaviour will be considered sufficient grounds for criminal charges to be laid.

My guess is that Storm and their advisers will come out of this relatively unscathed, apart from personal financial losses. 
I think we'll find some of the banks partly compensating some clients. But overall I think Stormers might end up being disappointed with the final deal that's negotiated with the banks.


----------



## chrisgee (2 September 2009)

wish i could get to the enquiry-good luck to everybody that is appearing-give it your best-the truth has got to somehow come out-we are really proud of all of your efforts-go give it to them straight!!!!!!
dont let any of the buggers get away with anything-we know something smells rotten we just have to find were the stench started-
GO BERNIE GO !!!!


----------



## Ironhalo (2 September 2009)

Face Townsville and hold your nose to the air. That's where the source of the pestilence is coming from.

There's also a miasma of filth hanging over the Brisbane suburb of Belmont too.


----------



## Julia (2 September 2009)

Ironhalo, you have provided a good summary of the Storm and SICAG models.

This, from the Courier Mail, is just a breathtaking statement imo:



> Storm investors group co-chairman Mark Weir, who founded the action group, said there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank.




This from Mr Weir confirms the aspersions cast on SICAG throughout this thread.

The other thing I will never understand is how Storm investors who were already well set up for retirement, more than adequately funded for same,
risked at least some of this with such massive borrowing to make even more
money.

It seems enough would never have been enough.


----------



## Ironhalo (2 September 2009)

Julia you have to be bloody joking, he said that!?!

I am speechless. Well, would it be considered a conspiracy theory to state that we now know where the true allegiances lie?

It makes me sick.

Do you have a link? I'd love to read the whole article.


----------



## simcat (2 September 2009)

Has Mr Weir ever heard of the concept of 'justice'?  Blame should be levelled at the parties responsible for causing this mess, irrespective of whether victims can receive money out of them.

If it so happens that some of the parties responsible also have the funds to make reparations ie the banks, then all the better but the principle of justice needs to be upheld, NOT the immoral act of 'let's forget about who is actually the major cause' ie Storm and it's dodgy advice.


----------



## cuttlefish (2 September 2009)

From Julia's post: 



> Storm investors group co-chairman Mark Weir, who founded the action group, said there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank.




That statement by Mark Weir, if true, is astounding Julia 

Its all well and good for SICAG and some ex-stormers to blame the banks but this mess would never have occurred in the first place if:

* Storm had tailored financial plans to suit the individual clients stage of life, personal goals and personal risk appetite

* Storm had not participated in the misrepresentation of clients income streams or asset values and/or aggressively encouraged clients to misrepresent their income streams and asset values to the banks.

* Storm had not formed innappropriate relationships with their banking partners and arguably crossed boundaries of due process in dealing with the banks. (e.g hiring of ex-bank staff etc.).

* Storm had not encouraged the banks into providing high risk lending products to clients that they were aware were not of the calibre or sophistication to understand these products or equipped to service the debt requirements in the event of asset price collapses.

* Storm had not failed to adequately monitor clients investments and take appropriate risk mitigation measures to prevent loss of clients investments.


Storm is the biggest cause of this problem as far as I can see.

The whole ludicrously risky investment model was formulated by Storm and then aggressively pedalled as a one size fits all investment model. 

There are plenty of submissions and anecdotal evidence that Storm advisors knowingly participated in or encouraged the misrepresentation of income streams.  If Storm were a responsible financial advice firm they would not have allowed CBA to make these sorts of loans to their clients even if CBA were aggressively pushing the loans onto the clients.  Instead in fact Storm was actively encouraging CBA to provide these products and encouraging their clients to take them up.  Storm was the middle man acting irresponsibly to both parties (the clients and the banks).

Storm can't have it both ways.  If they were the financial advisor then their job was to know a clients financial circumstances and thus recommend AGAINST taking out these high risk loans for people that were not at a stage of life or of the financial means or sophistication to understand them or service them.  

Had Storm acted responsibly in the first place when advising and dealing with clients then the entire snowball effect of stock price collapses, banks making ill timed margin calls and the other 'big bad bank' problems that have been harped on about simply would not have occurred.


----------



## Solly (2 September 2009)

I look forward to gg's commentary on today 's developments....


----------



## donteventryit (2 September 2009)

Solly said:


> I look forward to gg's commentary on today 's developments....




I look forward to commentary from the following: 

Big Max
Mindstorm
Specialed
Maccka
Mash
Even what Harleyquin thinks after giving SICAG a big wrap earlier on page 151.

So, what's the agenda of SICAG again? 

Yes, agreed they have helped support and console etc. However, their agenda to steer the blame to the banks and away from EC & JC and the adviser's is becoming crystal clear.


----------



## darkside (2 September 2009)

Julia said:


> Ironhalo, you have provided a good summary of the Storm and SICAG models.
> 
> This, from the Courier Mail, is just a breathtaking statement imo:
> 
> ...




You've got to be kidding me, when a few of us even mentioned that "Storm" was at best highly negligent and anyone not preaching that were less than responsible, we were accused of being on a witch hunt and  had mob mentality. In fact you could say we were hammered to the max for it.

Nice work Julia, you have now found the bullets to fill the rest of GG's clip with this one.

And for the record , the word was gambled , although your diplomacy  chose risked.


----------



## Ironhalo (2 September 2009)

I am really bloody seething with anger over that statement. 

In my mind (and no doubt Big Max will be here to tell me off), this is the surest sign that SICAG is Emmanuel-friendly. I'm not talking about the poor members who attend their meetings, I'm talking about the very committee itself.

I can understand their anger towards the banks, but if they were really after justice, they would have been gunning for Manny/Julie and the reprehensible satellite regional Storm directors as well.

If SICAG were serious about taking this all the way, they'd be looking at pointing the finger of blame at those mostly responsible. Instead, they are filling the devout Cassmiatis congregation with anti-bank creed. Why will SICAG not admit Storm was in the wrong here as much as the banks and had a hand in this?!? WHY? It doesn't effect the class action to admit this.

It disgusts me on so many levels to think that the person in charge of seeking justice for Storm clients apparently stands so ready to deflect all blame from his puppet master. Perhaps the reason we haven't heard anything from the Cassimatis' of late is because their fan club is doing an admirable job of representing them as is?

Which brings me to another bone of contention that I discovered in previous threads....


Big Max said:


> Not only am I not a former Storm employee, I am not a former Storm client! *I am a paid consultant to SICAG.* Do the right thing.:nono::nono::nono:




Quite an interesting development. Now can you explain to me Big Max why SICAG 'is paying to employ you?' If you're not an ex-Storm employee, not an investor, then why do you come in here questioning MY motives as to why I won't join SICAG? I was the one who got screwed over, not you evidently. I can only hazard a guess and say that you might have had family in Redcliffe who got done over? If so, go knock on Ron Jelich's door for answers. 

From the website, I was under the impression that SICAG was meant to be a volunteer organisation made up of people that had been screwed over by Storm, and not a self-licking icecream involving 'jobs for the boys'? Happy to stand corrected of course.

Oh and also, can you just for once say 'Emmanuel/Julie Cassimatis and their partners/ex-employees are both guilty of negligence AS WELL AS the banks?' I dare you.


----------



## darkside (2 September 2009)

donteventryit said:


> I look forward to commentary from the following:
> 
> Big Max
> Mindstorm
> ...




Ok , go easy on Max , he is not here to defend himself, he even had the decency to apologise to me a few posts ago for being wrong.!



Big Max said:


> Hey Darkside, when you're proven to be wrong, it's polite to apologise and important that you correct the record. I'll say it again . . . not only am I not a former Storm employee, I am not a former Storm client! I am a paid consultant to SICAG. Do the right thing.:nono::nono::nono:




And i also believe he included as part of the apology, correcting the record, so i have a lot of respect for someone who can admit when they are wrong.

A paid consultant to SIGAC , silly me , i thought it was a volunteer organisation , how did i get such a dumb idea in my head . !!



Big Max said:


> I am the Media Director for SICAG (Storm Investors Consumer Action Group).  Mark Weir and his fellow committeemen may not be perfect but I can assure forum watchers these are men of honour who have committed thousands of voluntary man-hours fighting for their members. History will be kind to them.




christ i hope history is kind to them , makes me feel all warm and fuzzy.
Halo , you stole my line. !!!!




Ironhalo said:


> Oh and also, can you just for once say 'Emmanuel/Julie Cassimatis and their partners/ex-employees are both guilty of negligence AS WELL AS the banks?' I dare you.




I double dare you with vanilla and choc coating !


----------



## donteventryit (2 September 2009)




----------



## darkside (2 September 2009)

donteventryit said:


>




no , not me , stop it , not true, how do they get these ideas.


----------



## cuttlefish (2 September 2009)

This is a quote by a former Storm employee and CBA staffer (from this article)

http://business.smh.com.au/business/storm-blames-banks-for-margin-call-fiasco-20090902-f7wa.html



> Ms Richards said Storm clients did not have to sign loan documents under Commonwealth Bank procedures.




If thats true its a serious worry - I do not even fathom how that could be legal.  I would be interested to hear CBA's clarification or response to that particular point - its sounds bizarre.   

(and just because the banks may have made some glaring errors as well it doesn't let Storm off the hook in any way - it just means CBA weren't doing their job in preventing Storm from acting badly - a bit like a security guard reading the newspaper while criminal walks in and steals something - just because the security gaurd is negligent it doesn't absolve the criminal).


----------



## darkside (2 September 2009)

cuttlefish said:


> a bit like a security guard reading the newspaper while criminal walks in and steals something - just because the security gaurd is negligent it doesn't absolve the criminal).




Nice analogy, seems to fit this situation to a tee.


----------



## abagnale (2 September 2009)

Julia said:


> Ironhalo, you have provided a good summary of the Storm and SICAG models.
> 
> This, from the Courier Mail, is just a breathtaking statement imo:
> 
> ...




Maybe this is a tactic to blame CBA to maximise their claim/case. But seems a very strange thing to say after the advice & investment model all came from storm.


----------



## Solly (2 September 2009)

*"Storm blames banks for margin call fiasco"*

From STUART WASHINGTON IN TOWNSVILLE for The Age.

"Storm Financial had no formal process about margin calls being made to their clients as the market fell, with former Storm staff arguing today margin calls were the sole responsibility of their margin loan providers."


http://business.theage.com.au/business/storm-blames-banks-for-margin-call-fiasco-20090902-f7wa.html


----------



## Solly (2 September 2009)

*Storm founder 'tried to save customers'*

"Former Commonwealth Bank staff have rejected the company's official line that low level employees were responsible for questionable dealings with failed financial services firm Storm Financial."

More by Evan Schwarten in Sunshine Coast Daily here;

http://www.thedaily.com.au/news/2009/sep/02/aap-storm-founder-tried-to-save-customers/


----------



## Solly (2 September 2009)

*"Commonwealth Bank 'told untruths'about Storm Financial*"

"FORMER top employees of failed Storm Financial told a parliamentary inquiry today that the Commonwealth Bank had a far greater role with the advisory firm than has previously been acknowledged."

More here by Anthony Marx in Townsville for the Courier Mail

http://www.news.com.au/couriermail/story/0,27574,26016731-3102,00.html


----------



## Solly (2 September 2009)

Ironhalo said:


> Julia you have to be bloody joking, he said that!?!
> 
> I am speechless. Well, would it be considered a conspiracy theory to state that we now know where the true allegiances lie?
> 
> ...




Here's the link that contains the quote that Julia referenced;
(Last Paragraph)
http://www.news.com.au/couriermail/story/0,23739,26013817-3102,00.html


----------



## Judd (2 September 2009)

The following is from the link in Solly's post 3137.  Pick the discrepancy (hint: It is in bold)



> Mr Dalle Cort, who termed himself ''Cairns' biggest loser'' after he was left with a loss of more than $450,000, blamed the collapse on the *''product failure'' of margin loans*.
> 
> ''We couldn't possibly know,'' he said. ''*The data coming through from the banks was bizarre.*''






> Cairns financial planner Jo Tuck, of Menico Tuck Parrish Financial Services, said she did not recognise the problems Mr Dalle Cort described with margin loans. ''Listening to Gus this morning, I didn't actually recognise his method of doing business,'' she said.
> 
> ''We did have *CGI (Colonial Geared Investments) loans*, and we did have *managed trusts* and in November, *as with a lot of planners*, we were really very, very *actively managing our margin loans*. It's not that the product failed at the end of the day, it's that the strategy failed.''


----------



## Solly (2 September 2009)

I wonder who gg has bailed up in Townsville this evening :


----------



## Mindstorm (2 September 2009)

donteventryit said:


> I look forward to commentary from the following:
> 
> Big Max
> Mindstorm
> ...




Sorry, not sure why I am on your 'list'


----------



## Anastasia (2 September 2009)

As reported today: http://www.thedaily.com.au/news/2009/sep/02/aap-storm-founder-tried-to-save-customers/

"The inquiry also heard Storm Financial founder Emmanuel Cassimatis offered to take responsibility for his clients' mounting debts in a desperate attempt to save the company and its customers late last year.

David McCulloch, a former Storm executive, said Mr Cassimatis had offered to take over responsibility for the multi-million dollar debt from the bank, but would need to secure a loan to do so.

"It was probably a last throw of the dice by Storm," he said.

"(We said) 'You've got the debt on your books anyway, obviously Storm is a strong corporate entity, we will take on the debt and pay you back over two years or four years when the market eventually recovers'."

Am I going to be gullible and swallow the above by David McCulloch or should I state the obvious and comment that they were just trying to ensure their future income stream and keep viable those clients of more benefit to them. I personally know of clients offered money by Storm (but never actually received it) to meet margin calls and many others who were not. It is "strange" that those offered funds had quite a bit of potential for future growth/ Storm survival if the funds had come through.

Be prepared for more heart string pulling tomorrow by Manny....such a nice, salt of the earth human being.

The sarcasm meter is ticking away again!!!


----------



## Ironhalo (2 September 2009)

Thanks for the Courier Mail link Solly.


----------



## cuttlefish (2 September 2009)

Anastasia said:


> Am I going to be gullible and swallow the above by David McCulloch or should I state the obvious and comment that they were just trying to ensure their future income stream and keep viable those clients of more benefit to them. I personally know of clients offered money by Storm (but never actually received it) to meet margin calls and many others who were not. It is "strange" that those offered funds had quite a bit of potential for future growth/ Storm survival if the funds had come through.
> 
> Be prepared for more heart string pulling tomorrow by Manny....such a nice, salt of the earth human being.
> 
> The sarcasm meter is ticking away again!!!




I doubt that Manny had evil intent - I think he just believed his own BS all the way to the end.  Like a lot of failed entrepeneurs they will point to the period 10 years down the track when the asset sold out from under them by the 'evil banks' for a song is now worth a lot more than they paid for it. 

The same will probably apply to the portfolios that were sold out from under clients.  Unfortunately sound financial advice does not involve hocking yourself to the absolute limit plus a little more (fudged income, fudged asset values, more lenient margin call conditions) to take a one way bet on a market.


----------



## Monario (2 September 2009)

Hi all, just wondering if anyone can tell me if they know of any live feeds for the inquiry tomorrow at the brisbane convention center?

If not can someone pack me a strong thermas of coffee heavily sugared, I am on nightshift at the moment and will need it to stay awake and hear all the BS from EC.


----------



## darkside (2 September 2009)

simcat said:


> Has Mr Weir ever heard of the concept of 'justice'?  Blame should be levelled at the parties responsible for causing this mess, irrespective of whether victims can receive money out of them.
> 
> If it so happens that some of the parties responsible also have the funds to make reparations ie the banks, then all the better but the principle of justice needs to be upheld, NOT the immoral act of 'let's forget about who is actually the major cause' ie Storm and it's dodgy advice.




Simcat, 1st post and a good one, welcome aboard!


----------



## bunyip (2 September 2009)

Julia said:


> The other thing I will never understand is how Storm investors who were already well set up for retirement, more than adequately funded for same,
> risked at least some of this with such massive borrowing to make even more
> money.
> 
> It seems enough would never have been enough.




This is something that intrigues me too......the number of people who were well set up for retirement by owning their own home and three or four investment properties, some of them even more - yet they went and risked it all in an attempt to build even more wealth.
Why would you do that, when you already had a net worth of a couple of million dollars and a reliable income of probably 50 grand plus? Why??

Fear of inflation eroding your income doesn't come into it - real estate is pretty much indexed for inflation via ever-increasing rentals and values.
Most people would give their right arm to be in that position....they'd kick back and enjoy the fruits of their labour and they'd never work again.

Can any Stormer who was in that position - out of debt and with enough real estate rental income to give you a comfortable lifestyle for the rest of your days - throw any light on what possessed you to put it all at risk to attain more wealth that you didn't need?


----------



## Garpal Gumnut (2 September 2009)

cuttlefish said:


> From Julia's post:
> 
> 
> 
> ...




Thanks cuttlefish. The statement by ex storm employees in Townsville today appeared to be orchestrated as a Tweedledum exercise.

From the body language of the Inquiry people it was not swallowed.

Many of the submissions seemed to have been made in preparation for a response by the Tweedledee , the old Manny C. tomorrow in Brisbane.



Solly said:


> I look forward to gg's commentary on today 's developments....




It was quite a disgrace really that the SICAG model in all its glory was represented, slay the banks, who by the way I feel are not blameless and exonerate Storm as a charity beset by evil lenders.



Solly said:


> *"Storm blames banks for margin call fiasco"*
> 
> From STUART WASHINGTON IN TOWNSVILLE for The Age.
> 
> ...




This alternate view was not well elaborated today, although from press reports was yesterday in Cairns.

The question remains, if Storm were handling these folks portfolios , what were they getting 7% commission for? Certainly not for monitoring the buffers of clients which to me would appear to be a primary function of a labelled advisor with labelled funds and labelled margin loans with banks.



Anastasia said:


> As reported today: http://www.thedaily.com.au/news/2009/sep/02/aap-storm-founder-tried-to-save-customers/
> 
> "The inquiry also heard Storm Financial founder Emmanuel Cassimatis offered to take responsibility for his clients' mounting debts in a desperate attempt to save the company and its customers late last year.
> 
> ...




A reasonable comment Anastasia.

From the body language of the Inquiry staff and the comments of Storm victims , the SICAG model, had its best run today and failed to convince. Some of the witnesses appeared tainted and hesitant and it will be interesting to see how the days events appear in the Report.

The final decision on whether the SICAG model will be successful will depend on how Manny performs tomorrow. Lets hope someone pours some oxygen into the Inquiry room in Brisbane to make him spark.

The advisors and public servants were exemplary and stayed aloof from lurkers like me, and I was unable to get any off the record information.

It really is a very well run Inquiry and the truth will out.

I also believe from what I heard today that Criminal Charges will be in the offing at its completion.

gg

gg


----------



## cuttlefish (2 September 2009)

bunyip said:


> Can any Stormer who was in that position - out of debt and with enough real estate rental income to give you a comfortable lifestyle for the rest of your days - throw any light on what possessed you to put it all at risk to attain more wealth that you didn't need?




Bunyip and Julia I understand the question and I suspect you'll get a variety of answers (I can think of plenty ranging from wanting to travel the world in retirement, to wanting to provide for the kids/grandkids), but there's few people in the world that can't find a reason to have more money. I think it could be rubbing salt into a pretty harsh wound - particularly for the people arguably already had it all and lost it - to be asking this question.


----------



## Solly (2 September 2009)

*CONFIRMED*

Public hearing - Brisbane, Thursday 3 September 2009
9:00am – 4:30pm
Brisbane Convention & Exhibition Centre - P3&4 Room
Cnr Merivale & Glenelg Streets
Brisbane QLD 4101

Time:	
9:00am – 10:30am
Witness:
Mr Emmanuel Cassimatis
Mrs Julie Cassimatis


----------



## Judd (2 September 2009)

bunyip said:


> Can any Stormer who was in that position - out of debt and with enough real estate rental income to give you a comfortable lifestyle for the rest of your days - throw any light on what possessed you to put it all at risk to attain more wealth that you didn't need?




I would bet that they didn't know that they didn't need it.  From the comments from a number of the ex-Storm clients and the contents of the submissions to Parliament, EC and crew put the fear of running out of money in retirement in front of anything else.  Convince people that they do not and will not have sufficient funds, whatever their assets levels, to be able to retire, convince them that the age pension will disappear, convince them that they will not be self-funded retires, convince them that you are the expert and they know little about investing.  Play on the emotions and you have got them.

And, boy, did these people get taken for a ride.  Just think about it.  $100,000 borrowed at 10% is $10,000.  $7,000 fee taken from the $100k.  The remaining $93k would have to return $17k (18.3%) in the first year (before tax considerations) just to break even.  That's credit card territory but bamboozle tyro's with numbers and those "small" issues disappear.


----------



## ngardiner (2 September 2009)

bunyip said:


> Why would you do that, when you already had a net worth of a couple of million dollars and a reliable income of probably 50 grand plus? Why??




After reading most of the submissions, I haven't come to the conclusion that this is the position of most Storm investors. Many of them appeared to own their home outright but a number of others stated that they were just encouraged by Storm to leverage the additional equity in their property that they had gained over 10, 20, 30 years. This didn't mean that they owned the house outright. $400,000 - $500,000 in equity could have borrowed as much as $800,000 through margin.

I certainly didn't get the idea that most had the number of rental properties necessary to gross $50,000 a year.


----------



## Harleyquin (2 September 2009)

Ironhalo said:


> I am really bloody seething with anger over that statement.
> 
> In my mind (and no doubt Big Max will be here to tell me off), this is the surest sign that SICAG is Emmanuel-friendly. I'm not talking about the poor members who attend their meetings, I'm talking about the very committee itself.
> 
> ...



I know there may be some or many ex stormies who only blame the banks but there are hopefully many more who realise that EC was the big boy with the big ideas.


----------



## Mindstorm (2 September 2009)

I know that there were some who 'apparently' can be said to have had enough assets (of whatever kind) already.

But what of those who were not that lucky?

How many of the Storm clients were already 'asset rich'?  and how many were people who were, as they are saying, investing for 'self-funded retirement'?

Much will be made of the 'millionaires' who were Storm investors, but what about all of the 'small' investors, the people who have lost $25K to $450K, (just about the amount of negative equity to have lost their savings or their home?).

If you are 25/30 years old, $25K is a huge amount that you were saving for your 'future'.  

If you are 45/50 years old, $450K is enough to lose to the home that you have worked to pay off your whole working life.

Not everyone who invested with the banks, via Storm, were in there with huge portfolios worth millions.

Do not believe everything you read in the media.  The media makes its money from sensationalism and a bit of truth.


----------



## Garpal Gumnut (2 September 2009)

Solly said:


> *CONFIRMED*
> 
> Public hearing - Brisbane, Thursday 3 September 2009
> 9:00am – 4:30pm
> ...




I'll see if I can book the redeye from TSV to BNE in the morning.

Thanks Solly

gg


----------



## bunyip (2 September 2009)

ngardiner said:


> After reading most of the submissions, I haven't come to the conclusion that this is the position of most Storm investors. Many of them appeared to own their home outright but a number of others stated that they were just encouraged by Storm to leverage the additional equity in their property that they had gained over 10, 20, 30 years. This didn't mean that they owned the house outright. $400,000 - $500,000 in equity could have borrowed as much as $800,000 through margin.
> 
> I certainly didn't get the idea that most had the number of rental properties necessary to gross $50,000 a year.




I realise that not every Storm investor was already wealthy enough to be set up for life before they joined Storm.
But I know for a fact that some of them were.


----------



## Solly (2 September 2009)

gg, my sources advise that Plaza Rooms P3&4 are prepped and ready to go.
Take the Merivale & Glenelg Sts entrance, take escalators to the plaza level, the rooms are on the right. 
It appears that limited refreshments will be provided.

You might have to take Y Class at such short notice


----------



## Mindstorm (2 September 2009)

bunyip said:


> I realise that not every Storm investor was already wealthy enough to be set up for life before they joined Storm.
> But I know for a fact that some of them were.




"some"  ?


So, how many of the (approximate number) 13,500 clients fall into your "some" bracket?

135?  1%?

1,350?  10%?

How many does your "some" equate to?


----------



## Harleyquin (2 September 2009)

I know there may be some or many ex stormies who only blame the banks but there are hopefully many more who realise that EC was the big boy with the big ideas.I know that I'm probably going over old ground here but just have to have my two bobs worth.  Each and every one of us are entitled to our own opinion it's what makes a forum like this so interesting, and I see you all having a 'go' at each other and enjoying every minute of it.

EC was the ultimate salesman / conman and his sidekick Julie was his aider / abettor and slept with him occasionally!.  I want to see EC and JC up there and tried for their part in this - and then given a little cell somewhere special to live out the rest of their days- should come as quite a shock after all the gilt edged everything he's been used to at our expense.   His biggest mistake was that he hasn't tailored investment strategies for the individual - not news to anyone anymore.  Rumours have abounded for some time that EC even hand picked his advisors, none of us know for sure but it could be true?   I also happen to agree that the planners themselves have to take their share of the blame for this they were supposedly trained professionals and nobody can tell me that they didn't know how dangerous/risky this type of same size fits all investment could be.  It was the planners who we dealt with, it was the planners who gave us the same old spiel that is repeated often on here and in the submissions.  They were the mongrels who lied to us, promised the earth and delivered stuff all...and I know that many of you also blame us for getting sucked in and sucked in we did - big time.  We even filled out paperwork at Storm so they knew what type of investment we wanted and then ignored it.  I've asked for my storm paperwork months ago - why hasn't it arrived yet?

Someone said on here the other day that their advice was crap and we swallowed it and I was just a bit put out and let fly.  Then I looked at it again and thought he's right we did swallow it and darn well choked to death on it as well.  I blame myself everyday for trusting these mongrels and their promises.  They didn't promise to make us rich and we never asked to be rich but we all/most asked for a safe and conservative financial plan.  We all know the stock market goes up and down.  Storm played on this 'we will sell when it's high and buy when it's low / we'll take advantage of those dips', what a load of bulls..t, it never happened.  They bought up big time when they knew the market was falling throughout 08 and I see no evidence in any of my paperwork where they sold off when it was high.  I'm a newbie and there is no way I'd put my money in on a falling market esp when you could see every day what was happening overseas.  Common sense tells you to wait until the bottom drops out of it and then go for your life.

Every financial person in this country was aware, or should have been aware, of the problems in the US/Iceland and wherever else they plied their rotten trade for nearly two years before the market crashed and if they say they weren't they should have been because even us newbies' knew something was happening, we didn't know exactly what or when, but the signs were there long before the crash.  Storm experts if they exist had to know - did they ignore it?  There has been much criticism on their decisions leading up to the crash so I won't go over old ground but nearly all or all of it is spot on.

There is much I don't understand about this whole sorry saga and someone also said the other day 'banks lend money that's what they do' and you're right they do.  When we went for our first home loan we had to provide evidence that we could service not only the the interest but the repayments as well.  All banks employ thousands of financially astute employees who are well aware of the correct lending procedures.  Why didn't they apply these same procedures to us this time instead of lending the huge loans recommended by storm.  Storm may have falsified income and other income or the banks may have done it, this will need to be proved one way or the other, and until all the documents are examined we have no way of knowing who has done any of the falsifying, that is why this inquiry needs to get to the bottom of what really happened so that we are all no longer left wondering, who did it???  Smacks big time of white collar crime.

I don't remember giving storm permission to do anything on our behalf but then they have done a lot of underhand things did they get us to all sign something under false pretences.  Storm never once asked us 'to sign this and we'll fill in the details'.  SICAG is there for all who have been affected by storm as far as I'm aware, and someone will correct me in the next five minutes if I'm wrong, but for most of us SICAG has been our lifeline and I shall continue to sing their praises.  I'm entitled to my opinion and if yours if different for your own reasons I shall respect that too.  There is no one to talk to who understands what we are going through and the SICAG site offers us all sorts of information.  If you disagree with some of that information that's fine it's hard to fine tune it to meet everyones' needs.  Storm clients consisted of those who had been in the market for a long long time and knew exactly what the storm model was and agreed with it to those who knew nothing and just went along with their advisor because they believed what he was saying and everyone else in between.  It is my understanding that SICAG doesn't have the funds to employ anyone it is only a volunteer group to help those affected by this disaster.


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## cuttlefish (2 September 2009)

SICAG makes me feel ill.  To use vulnerable people to further the Storm cause is despicable.  If the comments attributed to Mark Weir earlier on i this thread are true then this is exactly whats happening.   

Harlequin you are happy with an organisation who's leader makes the statement:  "there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank".


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## cuttlefish (2 September 2009)

> SICAG is there for all who have been affected by storm as far as I'm aware, and someone will correct me in the next five minutes if I'm wrong




close ... 21 minutes ...


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## bunyip (2 September 2009)

*Storm investors group co-chairman Mark Weir, who founded the action group, said there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank.*

An extraordinary statement from Mark Weir.
Seems to me that this bloke is a real Cassamatis fan who is intent on deflecting the heat away from EC.
Even without the prospect of getting any money out of Storm, I would have thought that Weir and his SICAG committee would have Storm squarely in their sights for all the lousy things they've done.

What's also intriguing is that Mark Weir thinks it was the CBA who obliterated Storm. I believe that Weir needs to open his eyes and realise that Storms income had all but dried up due to a lack of new clients signing on.
Even if CBA hadn't lowered the boom on them, does he really think Storm could have continued to operate without a healthy supply of new customers to fleece to the tune of 7%?

Big Max - your comments, please?


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## Julia (2 September 2009)

Ironhalo said:


> Julia you have to be bloody joking, he said that!?!
> 
> I am speechless. Well, would it be considered a conspiracy theory to state that we now know where the true allegiances lie?
> 
> ...



I only quoted that part because the rest of the article doesn't relate particularly to SICAG and I just about fell off my chair when I read that quote from Mr Weir.

Have now found the whole article:

http://www.news.com.au/couriermail/story/0,23739,26013817-3122,00.html


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## bunyip (2 September 2009)

Mindstorm said:


> "some"  ?
> 
> 
> So, how many of the (approximate number) 13,500 clients fall into your "some" bracket?
> ...




The numbers don't interest me. What interests me is why wealthy people who were set up for life would risk it all by signing up with Storm and taking on absurd levels of gearing to invest in the stock market.
I know for a fact that there were wealthy people, albeit a minority, who did exactly that.


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## Ironhalo (2 September 2009)

I agree SICAG has been good for the victims Harley, and I am sure people have benefitted from having a focus, and being around other people in the same situation.

What frustrates most of us in here to no end, and as soon as this whole thing started we suspected it, is that SICAG refuses to place any blame on the Storm model, and has not at any stage stood up to it's members and said officially 'Emmanuel/Julie Cassimatis and the other Storm directors are just as guilty as the banks.' Instead, we have the father of one of the key advisors as a committee member, as well as people like Ron Jelich (who aided and abetted the whole thing....although I did hear he was in a poor way after the whole thing, I'm not entirely heartless) who now use SICAG as their own speaking post.

People can make their own minds up, but it is evidently clear that in light of Mark Weir's comments recently, SICAG has no desire to bring the Cassmatis's to account, nor condemn their flawed model and modus operandi publicly. What screwed Storm was Cassimatis' greed. If anyone doesn't think so, then can anyone explain the following:

a. Why did Storm manage over a billion in funds, had a company private jet, luxurious offices, yet have next to no 'war reserves' of cash in the company accounts? Why did they fold over what is reported to be a $20 million loan? And why after they made a $26 million dollar profit at the end of Jun 08, did the Cassimatis's award themselves a $24 million dividend??? What financial adviser would do that?

b.  Why were they still signing clients up in Dec 08 after allegedly insolvent? Why did they then 'fight for justice for their clients' by awarding themselves a $2 million payment by appointing a random family member to the board in a failed attempt to make it legal?

c. Why there is so much anecdotal evidence of high-value clients who when after ringing Storm to demand to be sold down, were called back by Emmanuel and told to 'stick with the plan, this is what we talked about', while their livelihoods and savings were disappearing down the toilet?

Call it a tin-foil hat theory (and this might seem out there), but this is my suspicion of the main driving factor behind SICAG:
*
1. SOME (not all) members of the SICAG committee don't want to upset their dinner party/drinking buddy Emmanuel by declaring his rightful guilt/negligence in public and drawing possible legal/civil action to him or his employees....of which many of the committee members are either related to, or friendly with.*

The fact that they have made people feel better by doing so and peopling the air with a legal target (the banks) is by and by, and merely a nice by-product. Either SICAG committee members are 1. naive but well meaning, or 2. cunning and taking advantage of vulnerable people to best further their 'Manny is innocent, it's the evil banks!' cause.

I will dedicate my time to ensure this doesn't happen. Even if I have to show up to the SICAG meetings and ensure vulnerable people don't get taken for another ride, I'll bloody do it. My rellies all live in Redcliffe, and they have seen SICAG for what it really is....a bunch of Storm alumni pushing the Cassimatis creed of innocence, which is why they left in disgust after the first few weeks of it being established.


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## Anastasia (2 September 2009)

cuttlefish said:


> SICAG makes me feel ill.  To use vulnerable people to further the Storm cause is despicable.  If the comments attributed to Mark Weir earlier on i this thread are true then this is exactly whats happening.
> 
> Harlequin you are happy with an organisation who's leader makes the statement:  "there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank".




I was equally upset by the comment and wanted to know why such a comment was made. I have since been informed (from a very reliable source) that Mark Weir was misquoted. What he actually said was: "there was no point now chasing Storm financially because it had been totally obliterated by the Commonwealth Bank". 

Hence the reason SICAG are chasing the banks. All their energies have been put into helping the ex-stormies seek financial restitution as far as is possible so that we can move on with our lives. This is also the intentions of the lawyers such as Slater and Gordon. Chasing Storm for all criminal intention purposes is at the centre of ASIC, Worrels etc.....another battle to be played out.


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## Anastasia (2 September 2009)

I have heard that the "Big Day" in Brisbane tomorrow is being telecast direct by Austar ....now who do I know that has Austar!!!


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## Julia (2 September 2009)

donteventryit said:


> I
> 
> So, what's the agenda of SICAG again?
> 
> Yes, agreed they have helped support and console etc. However, their agenda to steer the blame to the banks and away from EC & JC and the adviser's is becoming crystal clear.



If you want to persuade people to your point of view, you first lay the groundwork by offering them sympathy, understanding and all that warm fuzzy stuff.

You have the ideal base to work from - a lot of people who are shocked, hurt and bewildered.  A shoulder to cry on is just what they seek, and are then so grateful for.

I am quite carefully not accusing SICAG here, just making a quite general observation.

I'm mystified as to what SICAG's real agenda is.



Anastasia said:


> As reported today: http://www.thedaily.com.au/news/2009/sep/02/aap-storm-founder-tried-to-save-customers/
> 
> "The inquiry also heard Storm Financial founder Emmanuel Cassimatis offered to take responsibility for his clients' mounting debts in a desperate attempt to save the company and its customers late last year.
> 
> ...



Oh phooey!!!   What utter and obvious window dressing:  a last ditch attempt to save face by Manny.  Pathetic, really.


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## Julia (2 September 2009)

Anastasia said:


> I was equally upset by the comment and wanted to know why such a comment was made. I have since been informed (from a very reliable source) that Mark Weir was misquoted. What he actually said was: "there was no point now chasing Storm financially because it had been totally obliterated by the Commonwealth Bank".
> 
> .




You may like to get in touch with the journalist who wrote the article.
I don't doubt he would have recorded or written verbatim the comment by Mr Weir.   If it is incorrect, then he will no doubt be requested to publish a retraction.


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## Mindstorm (2 September 2009)

bunyip said:


> The numbers don't interest me. What interests me is why wealthy people who were set up for life would risk it all by signing up with Storm and taking on absurd levels of gearing to invest in the stock market.
> I know for a fact that there were wealthy people, albeit a minority, who did exactly that.




Facts?  Well, okay, let us in on your FACTS!

Yes, exactly................. a minority, that YOU know about?

But what about the majority? do you know anyone in the majority?

The numbers don't bother you?

What about the people?  the majority of people? are they just NUMBERS to you?  

Were you involved with Storm?  Were your parents?  Your family?  Friends? Do you not have any compassion for the people who have been duped here?  

Or, are you just a 'blow hard' who likes to see your name in print no matter what rubbish you are spouting?

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL


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## cuttlefish (3 September 2009)

Mindstorm said:


> Facts?  Well, okay, let us in on your FACTS!
> 
> Yes, exactly................. a minority, that YOU know about?
> 
> ...




give it up mate - in case you didn't notice this is a stock forum - not a storm victims love-in.  SICAG seems to have the monopoly on that unfortunately.


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## Monario (3 September 2009)

And the Saga continues...

This is likely old news to most but, from some info I have gathered, former Storm High Up, David McCulloch, has set up shop and offering financial advice.. The things that is new news to me, is he appears to be taking on a lot of former storm clients, Bastard. 

I have heard from some of my sources some terrible claims of false and misleading advice in regards to clients previous portfolios held with storm. I got some of this info directly from a friend who is seeing him, and what David has explained in relation to my friends Loans could not be further from the truth.. I quickly gave said friend a slap up the side of the head so to speak, but I dont think he is listening to me...

I cannot believe that at this stage into the inquiry etc. that any advisor tied to storm be allowed to operate, at least until all findings are finalised.. 

This just plain makes me sick!!!!


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## Ironhalo (3 September 2009)

Monario, some people just never learn.

Let him learn (again) the hard way.


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## Garpal Gumnut (3 September 2009)

I've been castrating some calves since midnight and off to the airport after a shower to catch the redeye to Brisbane for the inquiry.

Talking of which, I do hope Manny turns up to the Inquiry.

In concentrating on the banks , the SICAG model will ensure that Storm will not be the last Financial Planners debacle, should they get their way.

From evidence recently the Storm menagerie are spawning other active Planning companies that are operating as I write.

The Financial Planners Association and ASIC are gooses really.

These guys are playing for hgh stakes and are not stupid, I'd even say they are convincing for the gullible.

If he doesn't turn up I'll probably just visit the art gallery and catch up with a girlfriend down there who's picking me up from Eagle Farm. Although I must admit I'd pass up on pleasure to see Manny squirm.

gg


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## Monario (3 September 2009)

I hope he is there too GG, be heading straight there after a 12hr shift... I figure if he is not I might take a drive out to the Eagles Nest (london rd. Belmont) care to tag along? I have a spare seat on my D9....


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## Solly (3 September 2009)

*"Storm blames banks for margin call fiasco"*

"Storm Financial had no formal process about margin calls being made to their clients as the market fell, with former Storm staff arguing today margin calls were the sole responsibility of their margin loan providers."

More from Stuart Washington from SMH/Age;

http://business.theage.com.au/business/storm-blames-banks-for-margin-call-fiasco-20090902-f7wa.html


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## Solly (3 September 2009)

*"Former Storm staffers say bank to blame"*

"INQUIRIES into Storm Financial are on the verge of answering a central mystery - whether investors' pain was caused by a ****-up, a conspiracy or plain old greed - *when Storm's architects, Emmanuel and Julie Cassimatis, appear in Brisbane today*."

More from Stuart Washington in the SMH is here;

http://business.smh.com.au/business/former-storm-staffers-say-bank-to-blame-20090902-f8hc.html


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## Solly (3 September 2009)

*"Defiant Cassimatis likely to target CBA"*

Read more on page 43 of the Australian Financial Review Sept 3 2009 by Duncan Hughes and AAP.


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## Solly (3 September 2009)

Garpal Gumnut said:


> I've been castrating some calves since midnight and off to the airport after a shower to catch the redeye to Brisbane for the inquiry.
> 
> Talking of which, I do hope Manny turns up to the Inquiry.
> 
> ...




gg, remember a castration knife can't be taken on board as carry on


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## Judd (3 September 2009)

Monario said:


> I cannot believe that at this stage into the inquiry etc. that any advisor tied to storm be allowed to operate, at least until all findings are finalised..
> 
> This just plain makes me sick!!!!




Totally surprised me as well.  After reading the 26 August transcript of the inquiry it appears to be a quirk in the licensing system.  The principal of the firm holds the license and a planner can be an authorized representative under that license and so can move from firm to firm.  Buggered if I know where their ethics are after screwing so many.  They probably don't have any.


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## Judd (3 September 2009)

Solly said:


> gg, remember a castration knife can't be taken on board as carry on




He should be able to source one in Brisbane.  As it is only going to be used on a one-off basis, he can leave it behind when he boards to go home.


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## manorleas (3 September 2009)

They've all set up shop elsewhere.  Can't post the links because I haven't made enough posts.  Look for Infocus Redcliffe office & Infocus Chermside office.

There are others, but I can't recall where they went to at the moment.  It'll come back to me.

Manorleas


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## bunyip (3 September 2009)

Mindstorm said:


> Facts?  Well, okay, let us in on your FACTS!
> 
> Yes, exactly................. a minority, that YOU know about?
> 
> ...




The aggressive tone of your post does you no credit at all. People of character and maturity are able to express themselves in a calm and reasonable manner, even when they're angry. 
This is a public forum whose objective is discussion and sharing of views and ideas on just about any subject at all. It's not realistic to think we'll agree with every view expressed, but we need to be mature enough to disagree in a courteous manner.
By 'flying off the handle' as you've done, you've degraded yourself as an immature little person who can't keep a lid on his/her anger.
You're in breach of forum rules. Be warned that if you keep it up, I'll be lodging an official complaint with the moderator and asking that you be disciplined.

As for the 'rubbish' I'm spouting...if you'd read this entire thread, as I have, you would have seen posts from people who have told of what level of wealth and real estate ownership they had before getting tied up with Storm. Some of them were substantially wealthy, were at or near retirement age, and had no need to ever work again. 
Also, if you read through all the submissions to the Parliamentary enquiry you'll find that some people had significant wealth before getting tangled up with Storm.

Yes, I do have compassion for Storm victims, and I've expressed it in a number of my posts.
I acknowledge, as I've done many times previously, that most Stormers were just ordinary people trying to build up a nest egg so they'd have a decent quality of life in retirement.
Obviously, I was not directing my query to them when I asked why people who were already wealthy and set up for retirement, would risk their wealth by gearing heavily to invest in the stock market through Storm.

In no way do I condone the unscrupulous dealings of Storm and the banks. I'll be one of those applauding if anyone is sent to jail over this.
But I stand by my query to the people who were already financially well off before joining Storm......why did they risk their wealth when there was clearly no need to do so?


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## donteventryit (3 September 2009)

I was going back over some old information, and came across this in the judgement from Judge Greenwood on 24 December 2008. 

http://www.austlii.edu.au/au/cases/cth/federal_ct/2008/1991.html

The most important points in the article suggest that Storm was not responsible for relaying information to clients regarding the margin loan, as they did not receive commission from the product. This is completely different to what actually happens on loans, where an adviser is attached. All communication is made via the adviser. Only if it becomes apparent that the adviser is not making contact with the client, will the margin lender step in – however, by this time clients could be deep in negative equity. 

Here are some of the pertinent points from the judgement. 

20 EC says (para 26) that the clients were responsible for identifying circumstances which would constitute a margin call. However, if a margin call did arise, the Bank would give notice to the client borrower. If the client borrower did not respond to the margin call, the Bank would take action to sell the underlying securities. The only role (para 27) which Storm had in the management or monitoring of margin loan facilities for customers of the Bank "was that CGI was entitled to give notice of a margin call to the customer by giving such notice to Storm".

23 By the end of November 2008, EC says that clients of Storm who had taken up margin loans with the Bank faced a negative equity position of approximately $37 million.

24 These events led to a meeting on 1 December 2008 at the Sydney premises of the Bank. EC & JC met with Messrs Grimshaw, Tait and Clothier of the Bank. EC & JC complained that for a period of some weeks data supplied by the Bank had been inaccurate and unreliable. That data related to *daily data sheets sent by the Bank to Storm* which set out details of each client, the balance of the loan, the credit limit, the security value, the market value of the securities, the current loan to security ratio and the margin call to security ratio. *The data was thus comprehensive and sent daily to Storm. *Some of the statistics in the margin ratio column are incorrect. The daily variation in values is said due to rapidly changing market circumstances is said to be the explanation for those errors.

26 Another meeting occurred on 4 December 2008 at the Bank's office. EC attended with a view to seeking a solution to the problem which had arisen for clients basing margin calls and particularly those whose facilities had "gone into negative equity". Mr McCullough and Ms Richards, executives of Storm, attended the meeting. It lasted for three hours. 

28. EC thought that he might be able to assist in resolving the Bank's concern about the 640 or so accounts. EC put a proposal to the Bank that Storm borrow from the Bank a sufficient sum to recover "the lost funds represented by this negative equity; that it [Storm] would then, by some means provide financial assistance to the relevant clients in the same amount so that they could recover the negative equity positions (without selling their own assets or otherwise devoting their own funds at the time) and, in the period of the ensuing year or two, work to recover such shortfall". EC says that he intended that the Bank would regard this as a generous offer by Storm because Storm would take on the primary liability itself in a direct relationship with the Bank.​
Is not receiving commission grounds to not pass on information to clients? I believe that this will be the crux of the EX & JC defence. 

The fact that the information received from CGI was not good enough, in my eyes does not absolve their duty to calculate their clients LVR and inform them if they are in margin call. After all, they have made themselves out to be their adviser/mentor/guide ... 

Thoughts?


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## shibby (3 September 2009)

donteventryit said:


> I was going back over some old information, and came across this in the judgement from Judge Greenwood on 24 December 2008.
> 
> http://www.austlii.edu.au/au/cases/cth/federal_ct/2008/1991.html
> 
> ...



My Comment
I really would like to remind EC that there were other margin lenders apart from Colonial mine was with Macquarie. 
I was in margin call, most of September and begged my Financial advisor to sell me up (face to face) on the 30th September 2008 and her reply was 
"I have sold me up I am not allowed to sell you up". 
They are the same words uttered by Gus Dalle Court in Tuesdays hearing. 
(He was given orders not to sell anyone up)
I never heard from Macquarie ever during that time.
I was finally sold up on 28th October by Storm.


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## Judd (3 September 2009)

shibby said:


> My Comment
> I really would like to remind EC that there were other margin lenders apart from Colonial mine was with Macquarie.
> I was in margin call, most of September and begged my Financial advisor to sell me up (face to face) on the 30th September 2008 and her reply was
> *"I have sold me up I am not allowed to sell you up". *
> ...




Good gracious!  Talk about a control freak. They really did treat the whole thing as if it was their money and not yours.  The more I read of this the more I understand the fury against Storm and the finance lenders.


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## Ironhalo (3 September 2009)

I know of a guy who worked at one of the Storm offices who started there just as it all hit the fan (no names, no court-martials) who confirmed that Manny REFUSED to sell anyone up, and anyone that demanded it was phoned and given the spiel 'this is exactly the type of knee-jerk reaction we told you we wanted to avoid.....you need to stick to the plan' and words to that effect.

He said it was the most soul-destroying thing he had ever seen, as he watched the senior advisers on the phone telling people that everything was fine, when most of the junior people in the office knew it wasn't. 

A family member of mine rang CGI after it all went down and demanded to know who authorised the sale of his investment. He got an Email back (that had been forwarded to Storm HQ a few months previous) that had a list of clients (including him) that were in negative equity, which obviously was a mistake noting the privacy invasion involved.

In other words, Manny and Storm advisers KNEW that their people were in negative equity, but sat on their hands and did nothing about it, and didn't even bother calling their clients.

If as Manny claims, it was solely the banks responsibility, what exactly were Storm clients getting for their 7% fees? Use of the Storm fax machines to send off scatter-gun loan apps for ridiculous amounts of money and a coffee?


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## carey ramm (3 September 2009)

Hi Ya Shibby!!!

i am most interested in your comment that your adviser had sold their portfolio up but was under instructions not to sell your portfolio.

In recent weeks i have become aware that during the may to september period some of the advisers sold their private portfolios. I am collecting information on which advisers and dates.

Shibby can u tell me (either in a post or as a private message) which adviser u had and what date they told u they had sold their portfolio.

If anyone else out there has information on advisers selling out can they contact me also. Shows how useful this forum really is.

Guys the reason storm didnt want to sell anyone out (why storm instructed advisers not to sell anyone out) was that they new if they liquidated the portfolios there would be no way they could get anyone back in the market and hence they would have no clients and no business (storm would have been back to square 1) - so they cross their fingers and hoped the market would bounce back before the margin loans were called in (they gambled for purely selfish reasons and lost with the clients being the big losers). Most stormers were sold out between 4400 and 4000. The market fell another 23% from this point. At 3100 the negative equity in the storm portfolios would have exceeded $300m. 

Another point to remember is that the Maquarie margin lending book was of similar size to CGI - there was over $2billion in margin loans! I understand that once the Margin lending book reached a certain size, the interest rates on the Storm corporate loan facility (used for building purchases etc) became zero. Pure conflict of interest!!!

I also suggest you read the Alan McDonald submission (the Storm IT guy) as i think he is pretty much on the money in terms of what happened and how it went down.


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## simcat (3 September 2009)

I am only guessing but I imagine the other reason for Storm not wanting to sell everyone up is that their clients would no longer receive an income from the index and the whole house of cards would fall due to not being able to service loan repayments.  Interest return on cash would have been bugger all.

Even those that had pre-paid interest would only have been spared in the short term.  With a $1m loan say, if you're relying on the income to help meet at least part of the loan repayments and if you're out of the market for 3-6 months and get no income it's only a metter of time until you're out the door backwards.

Storm (EC) must have known this to be the case (if they had even an ounce of brains) - he would have been caught in a no win situation so he had to ride it through and pray the market would rise in time.


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## Steve Borden (3 September 2009)

simcat said:


> I am only guessing but I imagine the other reason for Storm not wanting to sell everyone up is that their clients would no longer receive an income from the index and the whole house of cards would fall due to not being able to service loan repayments.  Interest return on cash would have been bugger all.
> 
> Even those that had pre-paid interest would only have been spared in the short term.  With a $1m loan say, if you're relying on the income to help meet at least part of the loan repayments and if you're out of the market for 3-6 months and get no income it's only a metter of time until you're out the door backwards.
> 
> Storm (EC) must have known this to be the case (if they had even an ounce of brains) - he would have been caught in a no win situation so he had to ride it through and pray the market would rise in time.




Seems pausible but somewhat contradicted by sending letters out seeking authority to convert everyone to cash.


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## Smiley (3 September 2009)

RE "Seems pausible but somewhat contradicted by sending letters out seeking authority to convert everyone to cash."
But then storm sat on those authorities for weeks (late october, early nov some portfolios were sold down) and some portfolios were never converted to cash.  Even then the cash only got placed in the interest earning cash management trust after weeks of the stormified negotiating with banks like macquarie - another stuff up by the 'advisors'.
I totally concur with the comments of the employee who said that Manny knew clients were in trouble and storm workers were told to present a happy front in the latter days (Oct-Dec) as have talked to various ex-employees . . .  Manny was looking over their shoulders as they sat at the computers with peoples portfolios listed as being in negative equity and he just said, "ah well."
He thought the banks would carry the clients and storm.


----------



## Steve Borden (3 September 2009)

Smiley said:


> RE "Seems pausible but somewhat contradicted by sending letters out seeking authority to convert everyone to cash."
> But then storm sat on those authorities for weeks (late october, early nov some portfolios were sold down) and some portfolios were never converted to cash.  Even then the cash only got placed in the interest earning cash management trust after weeks of the stormified negotiating with banks like macquarie - another stuff up by the 'advisors'.
> I totally concur with the comments of the employee who said that Manny knew clients were in trouble and storm workers were told to present a happy front in the latter days (Oct-Dec) as have talked to various ex-employees . . .  Manny was looking over their shoulders as they sat at the computers with peoples portfolios listed as being in negative equity and he just said, "ah well."
> He thought the banks would carry the clients and storm.




Has any one actually confirmed that the forms 'cashing out' the investments were actually sent?

Is it possible the reason why people didn't receive margin calls and were sold down was because it was as result of the 'cashing out' and not a margin call?


----------



## Solly (3 September 2009)

Just witnessed EC's grilling at the Inquiry.

One thing you can say is that he is consistent, it's all the banks' fault.

JC couldn't make it, EC said she's unwell.

It will be a good transcript to read.

Bit of an issue when EC's silk spoke out of turn and upset Mr Ripoll.

Another highlight was when there was a disapproving geer from the gallery when EC said that clients were warned that they could lose their homes using the Storm strategy.

Very interesting times ahead.


----------



## Ironhalo (3 September 2009)

Solly, what was their response to JC not being there?

Also, did EC look sick/under the pump?


----------



## Solly (3 September 2009)

Ironhalo said:


> Solly, what was their response to JC not being there?
> 
> Also, did EC look sick/under the pump?




Nil response to JC not being there.

EC looks fine, calm and deliberate in his reponses, even managed a joke or two.


----------



## Farencue (3 September 2009)

Thanks Solly for the updates!


----------



## shibby (3 September 2009)

carey ramm said:


> Hi Ya Shibby!!!
> 
> i am most interested in your comment that your adviser had sold their portfolio up but was under instructions not to sell your portfolio.
> 
> ...




Anne O'Neill from the North Sydney Office - It was the 30th September,2009 but her words were she had sold herself up but was not allowed to sell me up meant that it could have been that day or any other day before. 
She actually was sitting at her desk and she mimicked reaching over to the telephone and said it was easy I just picked up the phone.
I want someone to ask her to produce her reconciliation sheet that Storm mailed to us all it has the date that the shares were sold.
Words like fiduciary duty????? where was it? There was a complete lack of any concern any loyalty how do you legislate for that how do you make people in a position of trust, trustworthy.
Steve Borden.
My understanding is that most people recieved the letters for a sell up, first a 50% followed shortly by 100% but they didn't action them all. I know of two cases where they never actioned the letters up until Storm closed its doors.


----------



## DocK (3 September 2009)

Judd said:


> I would bet that they didn't know that they didn't need it.  From the comments from a number of the ex-Storm clients and the contents of the submissions to Parliament, EC and crew put the fear of running out of money in retirement in front of anything else.  Convince people that they do not and will not have sufficient funds, whatever their assets levels, to be able to retire, convince them that the age pension will disappear, convince them that they will not be self-funded retires, convince them that you are the expert and they know little about investing.  Play on the emotions and you have got them.
> 
> And, boy, did these people get taken for a ride.  Just think about it.  $100,000 borrowed at 10% is $10,000.  $7,000 fee taken from the $100k.  The remaining $93k would have to return $17k (18.3%) in the first year (before tax considerations) just to break even.  That's credit card territory but bamboozle tyro's with numbers and those "small" issues disappear.



Agree that the "fear" on having to rely on the govt pension has been a recurring theme in submissions.  I can state that their information sessions spent a lot of time on showing the effects of tax and inflation on savings, and how it was necessary to invest in a way that would keep you ahead of this.  I wish I could claim to have had more than enough to be happy with prior to investing with storm, but alas I was merely a mid-forties self-employed parent who owned three-quarters of a bog-ordinary home, a modest equity in our business, some super (but nowhere near enough to retire on yet), very little in the way of investments and a few "toys".   My desire was to use the equity we'd built up in our home to make enough to pay it off entirely and ensure we had enough to retire on when that great day came.  Of course I now own one-quarter of my home and have a piddling amount left invested - and the toys have been sold to reduce debt  I thank God that we're still young enough to hopefully work our way back to where we started in the first place. 

As far as the calculations above regarding returns goes - the whole "model" was always portrayed as a long-term one, and to expect to break even in the first year is unrealistic.  The 7% fee was a one-off and there were very low ongoing trails after that (Storm were covering buy/sell spread) - so if funds were invested for 10 years or more (as was my intention) the actual return required to cover interest and fees was nowhere near 18% - more like 11% pre-tax. Once the taxation benefits were factored in (if on a mid to high tax bracket) then the ave annual roi required to break even drops to 7 - 8% pa.  If you average out the annual return of the all ords over the past many years this is not unattainable.  Of course, when you get years where black swans sh#t all over the place it'll take a hell of a lot longer to get square.  As I see it now, Storm's (and therefore also my own) major error was in "holding on" after the initial 20% fall - I now know this would have been a prudent time (if not before) to cash out and wait for the swans to disappear over the horizon.

Don't get me wrong - I'm not trying to justify their fees.  I now know (after having done the research I should have done in the first place ) that I can acheive more or less (prob more) the same returns by putting what I have left in STW, Argo, Aust Found etc etc for a fraction of what they were charging for doing more or less the same thing.  




bunyip said:


> *Storm investors group co-chairman Mark Weir, who founded the action group, said there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank.*
> 
> An extraordinary statement from Mark Weir.
> Seems to me that this bloke is a real Cassamatis fan who is intent on deflecting the heat away from EC.
> ...




One phone discussion with Mr Weir was enough to convince me not to join SICAG.  I asked whether they were open to the fact that the "model" and advice were clearly flawed and was told in no uncertain terms that unless I could prove illegal conduct I probably shouldn't be making such comments.  He struck me as a man who was totally unprepared to listen to any point of view that didn't align with his own and I was left with the impression that any anti-Cassimatis sentiments were most unwelcome.  It doesn't surprise me in the least to read that he sees no point in blaming storm - this no doubt would not suit his own agenda.  I have always felt that although the support and friendship a lot of people have found through SICAG is wonderful, the whole organisation was set up purely to put pressure on the banks - using people power.  Some of these people may benefit a little in the end, but you can bet your life that they'll also have been used to benefit those with the most to lose/already lost even more.



Julia said:


> If you want to persuade people to your point of view, you first lay the groundwork by offering them sympathy, understanding and all that warm fuzzy stuff.
> 
> You have the ideal base to work from - a lot of people who are shocked, hurt and bewildered.  A shoulder to cry on is just what they seek, and are then so grateful for.
> 
> ...




Another way to persuade people to your point of view is to slip them some money under the table to get them out of strife that has come out of company funds.  Pretty hard for the same people to then turn around and "bite the hand that fed them".  I know some people that won't hear a bad word about E & J - and I'm not surprised why.


----------



## Quincy (3 September 2009)

*CBA panic led to Storm collapse: Cassimatis* 

" 
The founder of Storm Financial, Emmanuel Cassimatis, today blamed the Commonwealth Bank for panicking and withdrawing credit from his business, leading to the collapse of the financial planning business with investor losses of up to $3 billion.

In a rare public appearance before a federal parliamentary committee sitting in Brisbane today, Mr Cassimatis blamed failed processes within Commonwealth Bank for the events that led to Storm's collapse, culminating in Commonwealth Bank withdrawing credit.
"



STUART WASHINGTON IN BRISBANE - September 3, 2009 - 11:13AM 

http://business.smh.com.au/business/cba-panic-led-to-storm-collapse-cassimatis-20090903-f93p.html


----------



## DocK (3 September 2009)

Quincy said:


> *CBA panic led to Storm collapse: Cassimatis*
> 
> "
> The founder of Storm Financial, Emmanuel Cassimatis, today blamed the Commonwealth Bank for panicking and withdrawing credit from his business, leading to the collapse of the financial planning business with investor losses of up to $3 billion.
> ...




I don't know what planet Cassimatis comes from, but I find it quite hard to believe that he somehow thinks the CBA was "obliged" to support his business when it was quite clear that it was insolvent and unable to pay it's debts.  Actually, whether storm the business was broke or not is irrelevant in a way to its clients as they were not invested with storm, but in managed funds.  That he expected the bank to simply carry negative equity on all storm's client's margin loans until some uncertain time in the future when the market recovered (and what if it hadn't?) is ludicrous.  Since when do banks extend credit from the goodness of their hearts - as a shareholder I wouldn't want them to.  I run a business and have equipment financed through banks - would I expect them to carry my loans for some unknown period of time without any extra security if I couldn't meet my commitments?? Yeah, when pigs fly!


----------



## Quincy (3 September 2009)

*Storm Financial product 'like ordering Big Mac'*

3/09/2009 12:21:01 PM

http://money.ninemsn.com.au/article.aspx?id=857822





> Former Storm financial boss Emmanuel Cassimatis has compared his company's "financial advice" product akin to ordering a Big Mac off the menu at McDonald's.
> 
> Mr Cassimatis has spoken about the Townsville-based firm's collapse during a federal parliamentary Inquiry into Financial Products and Services in Australia, in Brisbane on Thursday.
> 
> ...


----------



## Julia (3 September 2009)

Steve Borden said:


> Seems pausible but somewhat contradicted by sending letters out seeking authority to convert everyone to cash.



Perhaps such letters were simply window dressing.  It seems they were not actioned.



DocK said:


> I don't know what planet Cassimatis comes from, but I find it quite hard to believe that he somehow thinks the CBA was "obliged" to support his business when it was quite clear that it was insolvent and unable to pay it's debts.  Actually, whether storm the business was broke or not is irrelevant in a way to its clients as they were not invested with storm, but in managed funds.  That he expected the bank to simply carry negative equity on all storm's client's margin loans until some uncertain time in the future when the market recovered (and what if it hadn't?) is ludicrous.  Since when do banks extend credit from the goodness of their hearts - as a shareholder I wouldn't want them to.  I run a business and have equipment financed through banks - would I expect them to carry my loans for some unknown period of time without any extra security if I couldn't meet my commitments?? Yeah, when pigs fly!



Great post, Dock, as was your previous one.


----------



## bunyip (3 September 2009)

Steve Borden said:


> Seems pausible but somewhat contradicted by sending letters out seeking authority to convert everyone to cash.






That was quite likely just a publicity stunt to make it look like Storm had the situation under control. 
Clients have told of how they signed those letters of authority and returned them immediately, but EC still didn't convert them to cash.


----------



## Judd (3 September 2009)

shibby said:


> Anne O'Neill from the North Sydney Office




And here she is again or was.  You have been warned dear readers.  She apparently has left that firm but beware of the name - and the associated reputation.

http://business.smh.com.au/business/storm-planner-providing-advice-20090830-f40w.html



> *Storm planner providing advice*
> STUART WASHINGTON
> August 31, 2009
> 
> ...


----------



## Quincy (3 September 2009)

*Storm boss under fire from inquiry* 

By David Barbeler | September 03, 2009 -4:02pm



> Outside the inquiry, Mr Cassimatis apologised to Storm clients.
> 
> "I am sorry for everything that's gone on,'' he said. "I'm working every single day to try and remedy that.''




http://www.theaustralian.news.com.au/business/story/0,28124,26021601-36418,00.html


Hmmm . . . .

http://cassimatis.com.au/


----------



## Solly (3 September 2009)

I was looking for gg today but couldn't see him although things were rather rushed especially in the scrum around  EC as he left the centre.

Maybe I didn't recognise him without his hat and cuban. Hope he didn't run into problems with the baggage handlers loading the castration kit in the hold.

Not sure if he has his gphone with him or we have to wait until he's back in the Garpal Den but a post from him about today's proceedings would be very interesting and welcomed.


----------



## Solly (3 September 2009)

*"Storm Financial boss under fire from inquiry"*

"FORMER Storm Financial boss Emmanuel Cassimatis has come under fire for the firm's blanket approach to investors who have lost their homes since its collapse.
He was also called a liar by angry clients when he spoke at the federal parliamentary Inquiry into Financial Products and Services in Australia, in Brisbane today."

Read more by David Barbeler from News.com.au & AAP here;

http://www.news.com.au/business/story/0,27753,26021601-31037,00.html


----------



## Solly (3 September 2009)

*"Storm founder gives evidence at inquiry"*

"Mr Cassimatis told the federal parliamentary inquiry he does not know why the banks did not warn his customers when their investments fell below a certain level.

He told the Brisbane hearing the banks should have issued 'margin calls'.

"I went straight to the bank and said 'guys there's a problem here - you didn't issue the calls, you didn't do what contractually what should've happened'," he said.:

More by Emma Pollard from the ABC here;

http://www.abc.net.au/news/stories/2009/09/03/2675567.htm


----------



## Kez180 (3 September 2009)

Solly said:


> I was looking for gg today but couldn't see him although things were rather rushed especially in the scrum around  EC as he left the centre.
> 
> Maybe I didn't recognise him without his hat and cuban. Hope he didn't run into problems with the baggage handlers loading the castration kit in the hold.
> 
> Not sure if he has his gphone with him or we have to wait until he's back in the Garpal Den but a post from him about today's proceedings would be very interesting and welcomed.




Thanks for going along Solly, Much appreciated!

I'll go to the Canberra hearing on the 16th and report back! won't be anywhere near as good as watching EC squirm though...


----------



## bunyip (3 September 2009)

It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated. 
That is the main question he should have been asked, in my opinion. 
If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.

The banks, the global financial crisis, the level of gearing, have all been blamed for the demise of Storm and their clients. The real blame lies with the sheer incompetence of Storm in that they failed to manage the situation.
The economic meltdown and market crash didn't wipe out everyone who had margin loans. Those who were more switched on that Cassamatis had the good sense to retreat to cash in plenty of time to avoid disaster. Cassamatis didn't, and it was this failure on his part, more than any other factor, that caused the wipeout of so many of his clients.
To my way of thinking, this is criminal neglect and he should go on trial for it.


----------



## DocK (3 September 2009)

bunyip said:


> It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated.
> That is the main question he should have been asked, in my opinion.
> If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.
> 
> ...




I think he badly misread the situation, and his ego wouldn't allow him to consider he might have been on the wrong track.  The storm website used to have a weekly market commentary (which towards the end wasn't being updated weekly at all).  I recall reading lots of positive sentiment about China and other developing nations having a huge appetite for Oz resources, and how this was expected to continue for several years.  Australia could simply keep selling to China, India etc and it'd be all good.  The situation with the sub-prime lending and bank weaknesses in the USA was downplayed as not being that relevant to our market as our banks were so much stronger.   I think he totally misunderstood the impact that events in USA would have on our own market - as if Australia's economy was completely disconnected.  I also think he failed to grasp the global nature of the downturn until it was well and truly underway, and by then he couldn't afford to get everybody out as he'd be cutting off his income stream.  The rest, as they say, is history.  
I think this is the kinder option, as otherwise he knew full well what was likely to happen and just didn't care about his clients at all - that makes no sense from a business point of view if he wanted to retain a customer base for the future.  Either way, for the fees they charged I expected a much higher level of professionalism.  We'd all be better off if he'd used a portion of our fees to educate himself and his advisers in economics and market history instead of wishful thinking.

I must say, all this ranting is becoming quite therapeutic


----------



## Judd (3 September 2009)

And some tell it they way they see it.

http://business.smh.com.au/business/big-bad-bank-ploy-cant-convince-20090903-f9a1.html



> *Big bad bank ploy can't convince*
> STUART WASHINGTON IN BRISBANE
> September 3, 2009 - 2:18PM
> 
> ...


----------



## Monario (3 September 2009)

Well I did not make it to the inquiry today  I was just too tired after my shift!!

But now I wish I had made the extra effort to hear him say he told his clients we could lose our homes... WHAT A D*#K  I would say the only reason a big portion of his clients hung in until the end was the fact that they were assured they would not lose them...

I wish I could see him Face to Face and have him say it to me just to see how thick his hide really is.....


----------



## Jifromoz (3 September 2009)

Steve Borden said:


> Has any one actually confirmed that the forms 'cashing out' the investments were actually sent?
> 
> Is it possible the reason why people didn't receive margin calls and were sold down was because it was as result of the 'cashing out' and not a margin call?




Steve, My In laws were moved into 100% cash in late October. Still had the margin loan. Their equity (Exc Home loan) was around $80K. They would have been well over margin call levels but as it went into cash the margin went to 100%. But the problem was they were earning 4% and paying 8.5% and therfore going backwards. All on the say of Storm advisers to enable them to maintain their income stream.


----------



## Solly (3 September 2009)

*"Crash waiting to happen"*

"The submissions rolling in to the parliamentary inquiry into financial products and services is sobering reading. They tell of how financially unsophisticated people seeking a self-funded retirement were left exposed to unscrupulous financial planners and their reckless advice. These were not the unlicensed shonks knocking on doors; they were, in fact, licensed planners."

More by John Collett in the SMH

http://www.smh.com.au/news/business/money/superannuation/crash-waiting-to-happen/2009/09/02/1251570744251.html?page=fullpage#contentSwap1


----------



## Solly (3 September 2009)

Storm Investors Consumer Action Group Inc

Supplementry submission to the 

Inquiry into Financial Products and Services in Australia.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub276a.pdf


----------



## Solly (3 September 2009)

Ron Jelich's

Supplementry submission to the 

Inquiry into Financial Products and Services in Australia.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub54a.pdf


----------



## Garpal Gumnut (3 September 2009)

I will be brief as I am quite tired from travelling coach to and from Brisbane, attending the Inquiry and other brief activities not suitable to expand upon on this forum.

The Inquiry restored my faith in democracy in Australia.

Manny Cassimatis looked older than when I last saw him at Peppers Hidden Vale tucking in to a Waigu steak, just five moths ago. 

Manny Cassimatis was unconvincing and repetitive in his evidence to the Inquiry much as a McDonald's executive would be in denying that a lifetime of big Macs in no way contributed to his terminal bowel cancer.

His lawyer bobbed up briefly to earn his $5000 for the day but was swatted by Sen. John Williams and thereafter attended to his hose.

The Inquiry members in particular Bernie Ripoll and John Williams were magnificent. They cut to the chase in a forensic manner and let Manny tighten the rope, challenging his bizarre take on financial planning appropriately.

The public , media and Storm victims were scathing about the Storm model and the SICAG model.

I was greatly surprised that nearly all Stormers had heard of Aussiestockforums and were now getting their information and advice from ASF rather from the SICAG site.

Some expressed disgust at the former Storm Logo on the SICAG site, the connection of committee members to Storm and Storm advisers, the advice on the SICAG site to seek out financial advisers who followed Storm principles and the failure of SICAG to in any way attribute blame to Storm or the Cassimatis.

I doubt if next January SICAG will have enough people renew their membership to afford a candle to shine a light on a moneyspider.

The victims were scathing about the banks and look forward to Norris of CBA fronting the Inquiry. 

The Storm victims were one and all good people, battlers, hard workers, the backbone of our country. 

They have been let down by Storm, SICAG and the Banks.

The only shining light for them are their Lawyers, Scattini et al, and the Inquiry.

gg


----------



## Julia (3 September 2009)

bunyip said:


> It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated.
> That is the main question he should have been asked, in my opinion.
> If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.
> 
> ...



Yes, I completely agree.


----------



## darkside (3 September 2009)

Solly said:


> Storm Investors Consumer Action Group Inc
> 
> Supplementry submission to the
> 
> ...




Ironhalo.

read this submission through and tell me who you think wrote it , i will give you a clue, t's all the evil banks fault , EC hardly rates a mention and of course the people helping are "men of high quality "

Have a guess , or anyone else can jump in for that matter and guess.


----------



## Ironhalo (3 September 2009)

No surprise to see Mark Weir (or the Mouth of Sauron, as myself and my g/f refer to him/SICAG as) or Baron Jelich not point any blame at Storm.

Everything in their submissions is 'CBA/CGI this, CBA/CGI that.' Yes, the banks were at fault, but they were in a symbiotic relationship with Storm, and both were playing their clients for money printing presses. Not once in the submissions was it alluded to that Storm was also negligent, nor any mention of the fact that Storm advisers were in fact the ones seeking extra margin loans for their clients to gain more cash flow during the GFC. My mother actually commented to me today that at one point, her Storm adviser (Andrew O'Brien....son of the committee member of the same name) was phoning her weekly telling her 'we can borrow an extra few thousand due to the revaluation of your assets.' Mum felt like it was a matter of Storm 'clutching at straws'. It was and thank god she drew a line in the sand.

Andrew O'Brien rang my brother recently asking him permission to sign him on as his financial adviser, and my brother (who puts up with even less excreta then me) told him where to stick it. So it looks like the ex-Storm employees were waiting in the wings ready to pick off their vulnerable ex-clients, particularly in Redcliffe where the prime SICAG membership seems to lie. Well that explains Noel O'Brien's interest in being on the SICAG committee, look out for your son and all that?

I like the disclaimer that Mark Weir threw in about the advisers not knowing these things were taking place. Bullcrap. They knew it, and they were using it to full advantage to gain their 10% commission from the Storm fees.

SICAG, truly you make me sick.


----------



## Harleyquin (3 September 2009)

Quincy said:


> *Storm Financial product 'like ordering Big Mac'*
> 
> 3/09/2009 12:21:01 PM
> 
> http://money.ninemsn.com.au/article.aspx?id=857822




I'm astounded at EC's evidence today in only blaming 1. - the banks and 2. - the economic situation.  He and the CBA had a cosy little relationship going for a long time and he arrogantly assumed when things went belly up that they would stand by him.  He liked his debt even called it a 'clayton's debt', well I'd like to serve him up our claytons debt and see how he likes the claytons repayments.

Can't the man see that it was his ideas which instigated this whole fiasco.  He claims clients were told they could lose their homes - rubbish.  We were given a sheet to fill out so they knew what level of risk we were prepared to take.  We specifically asked for a low risk, conservative investment and storms paperwork will prove that what I am saying is correct.  Our advisor said nothing about a one size fits all approach, we are only hearing about this since the collapse.  There was no emphasis put on 'you could lose your house.' as he has incorrectly stated today.  Quite the opposite in fact happened.  Our main concern was 'Can we lose our home'  Storm's reply 'You will never lose your home.'  The man doesn't know when to stop lying.

1. - My concern with all of the banks involved and CBA in particular - is why did they support him during the good times, they are supposed to be the financial experts so they knew that his plans were flawed and yet they lent his company massive amounts of money just as they lent storms clients massive amounts of money.  I know banks lend money but not irresponsibly, they helped to finance his dodgy plans at our expense.  What they have done is criminal    and 

2. - We were all told that they knew the market went up and down and would take advantage of the dips.  OK it was a big dip but the point I'm making is storm never took advantage of it.  Quite the opposite in fact.  Our storm advisor told us that they would be the ones monitoring our portfolios and they knew when to take money out and put money in.  Total lies just like EC today.  He should have known there was a big dip coming and should have been prepared for it.  What he has done is criminal.

3. - The advisors, those who had financial planning degrees would most certainly have known that we all wanted a different approach and yet they told us a pack of lies to get us into this financial scheme.  Most of the advisors slinked off like scalded cats after storm closed up shop, a couple at least have realised the consequences of storms actions and are trying to help our situation and have put submissions in telling us their side of the story.  Where are the rest of them.  Most are now working as advisors again, some even offering to help storm clients.  I spoke to our advisor on his last day and asked if we could lost our home and he said 'no one is losing their home.'  What they did was criminal.

4. - The clients - we were the big fat jewfish who took the bait and got ourselves hauled into the boat.  We blame ourselves for getting sucked in and we blame all of the above for doing it.  Nobody goes into a financial planner and takes on a financial plan that they know is risky, unless you are Bill Gates and Mates.  While everything was going down the gurgler the CBA 'forgot' to contact clients about their margin loans until it was too late and now have the gall to say they didn't have to, Storm weren't watching the market and looking out for anyones financial interests except their own and the advisors were being told to tell us a pack of lies, again, by storm central and thought nothing of following their boss' orders.  Why didn't they dob him in at that point?  Clients were watching the market and wanting to get out and couldn't because storm wouldn't allow it.  What a disgusting mess.  The more we find out the worse it becomes.  Wish we knew exactly what did happen - they are all out there covering their own bums and hoping their pants don't catch on fire...

If you are reading this and think 'I knew not to get involved with these mongrels'  then good on you, wish we'd known to do the same and one of you could have warned us.  Our lives have been changed forever.


----------



## Harleyquin (3 September 2009)

Quincy said:


> *Storm boss under fire from inquiry*
> 
> By David Barbeler | September 03, 2009 -4:02pm
> 
> ...







Utter garbage - EC didn't give two hoots what happened to clients before and a leopard never changes his spots, the man is a wolf in sheeps clothing.  Hope the three little pigs catch him and cook him...or maybe that only happens in fairy stories.


----------



## Ironhalo (3 September 2009)

darkside said:


> Ironhalo.
> 
> read this submission through and tell me who you think wrote it , i will give you a clue, t's all the evil banks fault , EC hardly rates a mention and of course the people helping are "men of high quality "
> 
> Have a guess , or anyone else can jump in for that matter and guess.




Well I have to say, from a first assessment, it appears our good mate Big Max might have had a hand in this.

He is ex-military (from about a decade+ ago I would presume), which would explain the unnecessary line numbering and the fact that his submission finished with 'ends'....for no apparent reason. I know when I write a military signal the final line is 'transmission ends'. Bizarre format for a financial submission to parliament, see my point below.

It also says 'signed by', which indicates to me that the signatories didn't write it.

It also references Ron Jelich's supplementary submission, which indicates to me that SICAG and Jelich colluded on their responses, to get 'their story straight'. Gee, SICAG having planning meetings with the Redcliffe ex-principal of Storm? I thought SICAG was about getting justice for the clients and not about cavorting/discussing plans with the architects of Storm's failures and the Storm Redcliffe figure who sat by and did nothing as his client's fortunes disappeared down the gurgler?

And we get attacked for suggesting SICAG is biased towards Storm/Manny? Spare me.


----------



## darkside (3 September 2009)

Ironhalo said:


> Well I have to say, from a first assessment, it appears our good mate Big Max might have had a hand in this.
> 
> He is ex-military (from about a decade+ ago I would presume), which would explain the unnecessary line numbering and the fact that his submission finished with 'ends'....for no apparent reason. I know when I write a military signal the final line is 'transmission ends'. Bizarre format for a financial submission to parliament, see my point below.
> 
> ...




Well , i think it was Max's handy work  and he does speak in terms of "men of honour"  when it comes to Luke Vogel, Ron Jelich and Noel O'Brien all ex storm advisors or heavily involved with storm .

Now in this submission, we get the term "men of high quality" coincidence , me thinks not.

Now after EC's testimony today SICAG should  stand up and say storm and EC screwed their clients in the name of greed and incompetence.

Once again , i dare you to say it .

Oh and the new term . Do the right thing :behead:


----------



## Garpal Gumnut (3 September 2009)

Garpal Gumnut said:


> I was greatly surprised that nearly all Stormers had heard of Aussiestockforums and were now getting their information and advice from ASF rather from the SICAG site.
> 
> Some expressed disgust at the former Storm Logo on the SICAG site, the connection of committee members to Storm and Storm advisers, the advice on the SICAG site to seek out financial advisers who followed Storm principles and the failure of SICAG to in any way attribute blame to Storm or the Cassimatis.
> 
> ...




excuse me for quoting my own post.

The number of views of this ASF thread as of now is 

 	266,919

It will be interesting to see how many views we get over the next weeks and months as opposed to the SICAG MODEL.

gg


----------



## Harleyquin (3 September 2009)

Garpal Gumnut said:


> excuse me for quoting my own post.
> 
> The number of views of this ASF thread as of now is
> 
> ...




GG excuse my ignorance, but what is a moneyspider?


----------



## Monario (4 September 2009)

Firstly, I would like to say that it is nice to see more constructive posts on this forum, we seem to have finaly weeded out the majority of " it yours fault for what happened deal with it" types and are now focusing on the real issues, thank you to all who are resposible for recent posts...

In light of the last few weeks happenings, expecially todays hearing of EC, I am sure many peoples eyes have been opened to the real cause of this debacle and the greedy high ups througout both Storm and the Banks who when the times were good clearly could only see bright neon dollar signs flashing in front of them.

I only hope that some justice comes form all this and also some reform, I also pray that the ex storm advisors who are still operating, some of which using the same investment model are shut down in the short term..

I know there are a number out there, and the advice these FP's are providing to already financialy devastated ex Storm investors MUST BE STOPPED, I only wish I knew how to...

The ones I know of appear to have setup under the same priciples as storm, and are sucking the same percentage style commsions out of clients that storm did... I also feel that this style of FEE structure would have to be one of the items reformed under any new laws..

I continually hear stories of manny Sucking large sums in Fee's out everyday, one instance today was 150K in fees on a new investment... I do not understand how this behaviour can possibly be allowed to happen...

I hope some serious changes in this industry are just around the corner, or I might just take out one of those FP licenes myself and make a mint!!


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## Monario (4 September 2009)

bunyip said:


> It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated.
> That is the main question he should have been asked, in my opinion.
> If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.
> 
> .





True Bunyip, but in doing so Manny would have also been reducing his income stream from the commsions he was recieving, would he not? A pure conflict of interest. 

The comment he made also about taking over his clients loans also seems to me to point to the fact that he would have lost these commisions, why else would anyone take on such a large, bad debt? surely it had to be the fact that the debt would have been creating an income..


----------



## Solly (4 September 2009)

*"Storm Financial boss Emmanuel Cassimatis provides no answers"*

"FEAR turned to anger turned to tears and the room turned to Emmanuel Cassimatis for answers.

He had none, just a black zip-up folder full of personal research rejected by the parliamentary inquiry into the crippling collapse of his advisory firm, Storm Financial, which financially wiped out thousands of people."

More from Trent Dalton in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26023405-952,00.html


----------



## Solly (4 September 2009)

*"CBA feels wrath over Storm collapse"*

"Some former customers of Storm Financial have called for a Royal Commission into the company's collapse.

A parliamentary inquiry into the financial services sector has questioned the founder of Townsville-based company Storm Financial in Brisbane today."

Bank executives are expected to speak at the sitting in Sydney.

More from the ABC here;

http://www.abc.net.au/news/stories/2009/09/03/2676088.htm


----------



## Solly (4 September 2009)

*"Storm made secret CBA deal"*

"A SECRET deal between Commonwealth Bank and Storm Financial has been revealed as a factor behind $3 billion in investor losses.

Details outlined in a letter from Colonial to Mr Cassimatis said in the unlikely event of margin calls, CGI ''will work in partnership to clear the margin call''.

''This 'will work in partnership' strikes me as being nearly the nub of the entire issue,'' said Senator Brett Mason, who later speculated a close relationship with Storm may have led to a relaxation of bank standards........

A disenchanted former Storm staffer, Ron Jelich, described Storm Financial as ''a wild or unrealistic dream or idea'', because it did not have the cash reserves to meet its obligations when the crash occurred.

Mr McArdle compared Commonwealth Bank's actions to the institutional corruption uncovered by the Fitzgerald royal commission into the Queensland police."

More by Stuart Washington in The Age;

http://business.theage.com.au/business/storm-made-secret-cba-deal-20090903-fa05.html


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## Solly (4 September 2009)

*"Six key issues emerge in fiasco's wake"*

"Storm Financial lived up to its name again yesterday as co-founder and chief executive Emmanuel Cassimatis broke months of silence to give his side of the story about the collapse."

Read more in the Australian Financial Review Friday, 04 September 2009 in COMMENT by Duncan Hughes


----------



## Solly (4 September 2009)

*"Storm Financial's Emmanuel Cassimatis sorry for investors"*

"THE co-founder of failed Storm Financial apologised yesterday for the hurt caused to investors but he once again blamed that the Commonwealth Bank for destroying his advisory firm.

Emmanuel Cassimatis told a parliamentary inquiry in Brisbane this morning that he still feels the "crushing effect'' every day of the disaster, which saw 3000 clients lose their life savings."

More by Anthony Marx in the Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26021076-3122,00.html


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## Solly (4 September 2009)

Garpal Gumnut said:


> I will be brief as I am quite tired from travelling coach to and from Brisbane, attending the Inquiry and other brief activities not suitable to expand upon on this forum.
> 
> The Inquiry restored my faith in democracy in Australia.
> 
> ...




gg, great to see you made it down, it's not that pleasant in 'cattle' when you aren't used to it. It's a pity the days are now gone when people of stature could grab a jump seat at short notice with a local crew on one of TAA's T-Jets. 

I tried to get a couple of pics of proceedings but some mysterious force zapped my Nikon D3X. I wonder what the problem could be ?


----------



## Smiley (4 September 2009)

From newspapers: "Now it was Mr Cassimatis with tears in his eyes. They welled, but they didn't run."

Anti-social personality disorder is a newer term for sociopaths like EC - he cries for himself and not others  . . . more characteristics include: 
"Lack of concern regarding society’s rules and expectations; unlawful behavior; lack of regard for the truth" . . .sound familiar?

Just a small sample of EC and storm lies follow:

- we have a unique strategy and critics are just jealous
- our investment strategy is not speculation 
- our fees are the lowest in the industry
- our advisors are the highest qualified in the industry
- your house will never be at risk
- you have brokerage rights so we convert to cash at trigger points
- we closely monitor portfolios 
- we don't gt trailing commissions (what about .35%?)
- there is only ever one fee for advice (oops didn't mention "step ups")
- fees are claimable on taxes
- the share market is safer than property investment
- the aged pension is being removed by the govt
- LVRs are conservative (did not include home loans)
- we get discounted loan rates for you
- storm is your good fortune.

others care to add to the litany of untruths - gaol time is well deserved . . . .EC & JC are still living in their 6 bedroom, 7 bathroom, 1500 sq metre mansion . . . surprised some of you down in Bris have not camped on their lawn if you're homeless

Give me a break . . . Re it's the bank's fault because they wouldn't lend us millions to prop up a bad business model  . . . another ploy by a crook  . . .deflect attention from own wrongdoing

big Max - better let Mark and Noel know the stormified up north are not happy with their lack of criticism of all things storm . . . .


----------



## schumy (4 September 2009)

I’ve only followed this saga from time to time so I’m not well qualified to comment on any of the details. But I did attend the afternoon session of the Senate Inquiry in Brisbane yesterday in the capacity of an interested bystander (I’m not connected with Storm in any way) and was astonished listening to the submission of the 3 representatives of SICAG. They made a long winded introduction in which they wasted valuable submission time praising this nation, democracy, blah, blah, blah and then chose to limit what they did say to fanning the flames regarding a terrible conspiracy between the CBA and Storm but when it soured CBA pulled the plug. 

So they seem to think the outcome was all a vindictive plot hatched by the CBA to grab their money and run. They don’t seem to understand the concept of personal responsibility, said they still trusted their Storm advisers implicitly and when one of them gave an explanation about their margin loan, they demonstrated to me at least, a poor understanding of it and seemed confused. At the end of their submission they got a standing ovation from most of those present. I was left shaking my head in disbelief. If these people are representing the interests of the ex-clients of Storm, I would be worried.


----------



## Steve Borden (4 September 2009)

Solly said:


> I tried to get a couple of pics of proceedings but some mysterious force zapped my Nikon D3X. I wonder what the problem could be ?




Solly

I am not an expert biologist but my understanding is that the species you attempted to photograph (the Emmanueli Cassimati) is notoriously hard to capture on film after certain events.

The Emmanueli Cassimati is a parasitic invertebrate exists simply to feed off its host, once it has drained the host of its life-savings it moves on, however it can also fall prey to larger forms of itself, they are known as Banks.

Once the Emmanueli Cassimati has fallen victim to effectively itself it becomes reclusive and very hard to detect, it is also very difficult to photograph because as you can appreciate without other people's money forming its backbone it tends to become only a reflection of itself.

In summary the are considerable difficulties in photographing the reflection of a spineless parasite.

Or so I am told.


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## Smiley (4 September 2009)

Schumy - not all the stormified are as naive as SICAG founders/or loyal to their family in this weird way  . . . makes me mad this happened at inquiry - waffling bs and support of the model; but then storm has been compared to a cult at times and true believers are often blind. . . .
well said Steveo. . . .am sure the alani bondi and the christo skaso are well proven to be related to the cassimati species - not a totally new finding


----------



## carey ramm (4 September 2009)

thought it timely to post this position from cba written to the 60 minutes producer jonathon harley

Commonwealth Bank statement to 60 Minutes re: Storm Financial
3 March 2009
Hi Jonathan
Further to our conversation, as explained, in view of the Cassimatis litigation and ASIC inquiry the CBA does not believe it is appropriate for a representative to appear on your program.
We are, however, concerned and sympathetic to those who followed financial planning advice from Storm Financial and are seeking to assist them where feasible.
We have already assisted your preparation of your story and are providing the following responses to your questions to assist the accuracy of the 60 Minutes program. 
The Bank considers the collapse of the Storm Financial group to be serious, complex, and extremely unfortunate for those involved and the issues of responsibility are matters that are already  being tested in the appropriate forums.
A) How/why did were clients sold down in the ColonialFund? 
Colonial Geared Investments (CGI) 
           Since the collapse of Storm Financial, there have been allegations aired in the media that CGI “dropped the ball” in relation to margin calls.  These allegations are untrue – CGI kept its part of the agreement in the margin call management process. 
          It’s important to understand the roles of CGI and Storm Financial (borrower’s financial planner) in the margin loan management process. 
          CGIs role is to keep Storm Financial up to date with the relevant information concerning their client’s margin loan. 
          The role of the Storm Financial (under the authority of the borrower) is to manage the portfolio regarding the level of indebtedness and the purchase or sale of security. 
          Storm Financial clients were sold down when Storm Financial advised CGI who and how much should be sold. When the clients’ Margin Loans went into margin call, Storm Financial advised CGI what should be sold / redeemed to clear the clients margin call in full.  This process worked well over the past decade. Storm Financial continued to meet its responsibilities even as the market started to fall.  In October and November 2008 Storm Financial instructed CGI to effect $672 million worth of sales to address clients’ loans in margin call. 
          However, as the markets continued to fall, Storm Financial’s instructions became inadequate to clear margin calls.  In November 2008, CGI was forced to step in to ensure all margin calls were addressed in full. If this had not happened, Storm Financial clients would have accumulated more losses as the market continued to fall. After attempting to obtain instructions from Storm Financial in line with the practice of the past decade, it became apparent that Storm Financial’s response to size and duration of the market fall was seriously inadequate.  CGI formed the view that Storm Financial was no longer fulfilling its role in relation to margin calls. 
          Under the margin loan, CGI reserves the right, if the borrower fails to address a margin call, to sell down the security on the margin loan.  We instructed redemption requests totalling around $178 million of CFS, Challenger and MLC in an effort to clear these clients’ margin calls. 

B) Do we have a responsibility to these clients– weren’t they our customers as a result of their Margin Loan being provided by Colonial Geared Investments? 
          The Bank met its responsibilities to these customers, and our customers also have responsibilities to us.  Those responsibilities are governed by the terms of our agreements – in this case the Margin Loan terms and conditions. 
          Under the Margin Loan agreement, each Borrower expressly authorised CGI to deal directly with Storm Financial in relation to the margin loan and to take instructions from Storm Financial.  This is the case with all CGI’s margin loans, not just those of Storm Financial clients.  The arrangement reflects the fact that CGI’s margin loan is a product designed to be offered through licensed financial planners and the product model is for CGI to deal with the planner directly.  If borrowers want to deal directly with the Commonwealth Bank in relation to a margin loan, then they have the option of a CommSec Margin loan.  (Storm Financial did not recommend the CommSec Margin loan to its clients.) 
          CGI offered the tools through which these investments could be geared – ie the CGI Margin Loan. CGI did not offer any advice; its role was that of lender. 
          All investment advice to Storm Financial’s clients was given by Storm Financial under a formal Statement of Advice.  Pursuant to these Statements of Advice, the Storm Financial clients were mainly invested in CFS Funds, Challenger Funds and MLC Index Funds.
          CGI had the responsibility of keeping Storm Financial fully updated with data on every margin loan held by Storm Financial clients.  We took our responsibilities seriously, providing data to Storm Financial daily on each and every client’s margin loan.  On top of this we provided up to date data on our web site (for both advisers and clients) which can be utilised 24/7 to check the clients account.  Storm Financial accessed this data over 11,000 times. On two occasions this data did not transfer across to Storm Financial correctly. Storm Financial informed us and we sent a new file immediately.
          Our borrowers had the responsibility of monitoring their portfolio and taking any action required to avoid or clear a margin call.  At any time, any of these borrowers could have contacted Storm Financial and obtained the current details of their margin loan portfolio from Storm Financial (based on the information CGI supplied to Storm Financial on a daily basis). 

C) How Storm clients could take out home mortgages to fund their Storm investments? 
          Customers use the security of their home loan investment for a number of reasons, including other investment categories. 
          The Commonwealth Bank provided home loans for Storm Financial clients who applied and met the Bank’s lending criteria.  We assume that these customers’ decision to apply for home loans with the Bank was taken on the basis of advice given by Storm Financial. 
          Any home loan customer of the Bank who is a former Storm Financial client and is having difficulty meeting their home loan commitments should contact the Bank to discuss their options.  The Bank has a range of measures available to provide flexibility for borrowers in financial hardship.


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## bunyip (4 September 2009)

Monario said:


> True Bunyip, but in doing so Manny would have also been reducing his income stream from the commsions he was recieving, would he not? A pure conflict of interest.
> 
> The comment he made also about taking over his clients loans also seems to me to point to the fact that he would have lost these commisions, why else would anyone take on such a large, bad debt? surely it had to be the fact that the debt would have been creating an income..




Ah yes, Blind Freddy can see why Cassamatis didn't convert clients to cash in time to save their portfolios - it was all about money for him, as usual. Converting clients to cash would have put a serious dent in his income.
Of course he will never admit as much, but it would have been interesting to watch him squirm if they'd nailed him down with hard questions such as _'When the market was dropping and the value of your clients portfolios was evaporating further every day, why didn't you address the situation by converting your clients to cash until the market recovered?_

As for taking over his clients loans, I doubt if he ever had any intention of doing so. I'd say it was just a PR exercise to make him look like a good bloke who really cared about his clients.


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## Farencue (4 September 2009)

Interesting Ironhalo, about the end of transmission thing....
We had a few rather brief visits from "dark leopard" here at ASF.
Funnily enough, dark leopard would say "end of transmission".

And, where is Big Max?  Would love to hear his unique spin on things.
Mark Weir will bluff until the end.
Criminal charges will laid, guaranteed.


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## bunyip (4 September 2009)

Big Max

In view of the information that's come to light over the last couple of days, both at the Enquiry and through this forum, I think it's time you favoured us with another of your posts.
In particular, I'd be interested in hearing your reponses to Posts 3251 & 3254 from Ironhalo, Post 3248 from GG, and Post 3266 from Smiley.

Come on Max - it's not like you to be short of words. We look forward to hearing from you.


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## Steve Borden (4 September 2009)

Thanks Carey

I could be wrong but is the CBA saying that "In October and November 2008 Storm Financial instructed CGI to effect $672 million worth of sales to address clients’ loans in margin call". and "Under the margin loan, CGI reserves the right, if the borrower fails to address a margin call, to sell down the security on the margin loan.  We instructed redemption requests totalling around $178 million of CFS, Challenger and MLC in an effort to clear these clients’ margin calls". 

If that is the case then Storm did know about the margin calls and actually acted upon them in a majority of the cases, it was only at the death when Storm wasn't responding did they (CGI) act on their own.

I also have evidence that Storm did action some of the conversions to cash.

Please bear in mind the CBA (CGI) will have copies of the requests to sell down from Storm and will produce as necessary.

Therefore CBA has written evidence from Storm of something Storm said didn't happen.

I wonder who is not telling the truth?


----------



## Quincy (4 September 2009)

bunyip said:


> . . . As for taking over his clients loans, I doubt if he ever had any intention of doing so. *I'd say it was just a PR exercise to make him look like a good bloke* who really cared about his clients.





Another PR excercise perhaps ? 



> As he walked out of the inquiry, The Courier-Mail asked how his health was coping with the Storm collapse. He stopped on the spot.
> 
> "Many years ago I had to haul a little girl out of a car that had been in a head-on collision," he said. "In that experience you don't have the luxury of worrying about how you feel.
> 
> ...


----------



## Julia (4 September 2009)

schumy said:


> I’ve only followed this saga from time to time so I’m not well qualified to comment on any of the details. But I did attend the afternoon session of the Senate Inquiry in Brisbane yesterday in the capacity of an interested bystander (I’m not connected with Storm in any way) and was astonished listening to the submission of the 3 representatives of SICAG. They made a long winded introduction in which they wasted valuable submission time praising this nation, democracy, blah, blah, blah and then chose to limit what they did say to fanning the flames regarding a terrible conspiracy between the CBA and Storm but when it soured CBA pulled the plug.
> 
> So they seem to think the outcome was all a vindictive plot hatched by the CBA to grab their money and run. They don’t seem to understand the concept of personal responsibility, said they still trusted their Storm advisers implicitly and when one of them gave an explanation about their margin loan, they demonstrated to me at least, a poor understanding of it and seemed confused. At the end of their submission they got a standing ovation from most of those present. I was left shaking my head in disbelief. If these people are representing the interests of the ex-clients of Storm, I would be worried.



Thanks for your report, Schumy.  Confirms the impression to date.

Carey, many thanks for the copy of CBA's comments to 60 Minutes.

This extract is telling:



>  Under the Margin Loan agreement, each Borrower expressly authorised CGI to deal directly with Storm Financial in relation to the margin loan and to take instructions from Storm Financial. This is the case with all CGI’s margin loans, not just those of Storm Financial clients. The arrangement reflects the fact that CGI’s margin loan is a product designed to be offered through licensed financial planners and the product model is for CGI to deal with the planner directly. If borrowers want to deal directly with the Commonwealth Bank in relation to a margin loan, then they have the option of a CommSec Margin loan. (Storm Financial did not recommend the CommSec Margin loan to its clients.)




Seems to confirm that Storm dropped the ball, rather than CGI.
Why am I not surprised!


----------



## Farencue (4 September 2009)

Julia, I think there are a fair few of us here who are not surprised.

Manny is a conman.  There have been Mannys before him and there certainly will be many more Mannys to come.


----------



## Pindibog (4 September 2009)

Julia said:


> Thanks for your report, Schumy.  Confirms the impression to date.
> 
> Carey, many thanks for the copy of CBA's comments to 60 Minutes.
> 
> ...




My loan agreement does not state any such thing. If they changed the rules at some stage they did not notify or obtain authorisation from clients to do so. Lender is to contact me as per Original financial plan and loan agreements.


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## bunyip (4 September 2009)

_B) Do we have a responsibility to these clients– weren’t they our customers as a result of their Margin Loan being provided by Colonial Geared Investments? 
 The Bank met its responsibilities to these customers, and our customers also have responsibilities to us. Those responsibilities are governed by the terms of our agreements – in this case the Margin Loan terms and conditions. 
 Under the Margin Loan agreement, each Borrower expressly authorised CGI to deal directly with Storm Financial in relation to the margin loan and to take instructions from Storm Financial._

Above is an extract from Carey's post.

Can any ex-Storm client confirm that you authorised CGI to deal directly with Storm, and take instructions from them in relation to your margin loan?
Some of you must have copies of that agreement if such an agreement was  made.

If this claim from CGI can be proven correct, it will really blow Cassamatis out of the water in regard to his repeated claims that it was not Storms responsibility to advise clients when they were in margin call.


----------



## Pindibog (4 September 2009)

bunyip said:


> _B) Do we have a responsibility to these clients– weren’t they our customers as a result of their Margin Loan being provided by Colonial Geared Investments?
>  The Bank met its responsibilities to these customers, and our customers also have responsibilities to us. Those responsibilities are governed by the terms of our agreements – in this case the Margin Loan terms and conditions.
>  Under the Margin Loan agreement, each Borrower expressly authorised CGI to deal directly with Storm Financial in relation to the margin loan and to take instructions from Storm Financial._
> 
> ...




I have no such agreement and my loan agreement was in 2000. No notifications or changes advised. Also the bank stated their  maximum LVR was 62% in my case. Funny how they let that blow out of the water!!! I think when Paul Johnston (original head of ML) left and Clothier things changed. My original agreement never changed!


----------



## Steve Borden (4 September 2009)

Pindibog said:


> I have no such agreement and my loan agreement was in 2000. No notifications or changes advised. Also the bank stated their  maximum LVR was 62% in my case. Funny how they let that blow out of the water!!! I think when Paul Johnston (original head of ML) left and Clothier things changed. My original agreement never changed!




Pindibog

I think the Bank will try to rely on the following with regard to changing LVRs:

(c) We may also, at any time, in our absolute discretion and
without notice to you, increase, decrease, add to, delete or
otherwise vary the borrowing limit applying to any securities.


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## bunyip (4 September 2009)

Pindibog said:


> My loan agreement does not state any such thing. If they changed the rules at some stage they did not notify or obtain authorisation from clients to do so. Lender is to contact me as per Original financial plan and loan agreements.






We posted at exactly the same time, so I missed your post.

So then, it looks like CGI is trying to pull the wool over everyone's eyes with their claim that clients authorised them to deal direct with Storm.

Sooner or later one or the other party is going to produce proof that they're being truthful and the other is a liar.


----------



## Farencue (4 September 2009)

I asked you many posts ago Pindibog, whether you signed an authority for Storm to act on your behalf, are you saying you did not?


----------



## Harleyquin (4 September 2009)

Pindibog said:


> I have no such agreement and my loan agreement was in 2000. No notifications or changes advised. Also the bank stated their  maximum LVR was 62% in my case. Funny how they let that blow out of the water!!! I think when Paul Johnston (original head of ML) left and Clothier things changed. My original agreement never changed!




Pindibog a lot of ex stormies are saying exactly the same thing that you have just said.


----------



## Harleyquin (4 September 2009)

bunyip said:


> We posted at exactly the same time, so I missed your post.
> 
> So then, it looks like CGI is trying to pull the wool over everyone's eyes with their claim that clients authorised them to deal direct with Storm.
> 
> Sooner or later one or the other party is going to produce proof that they're being truthful and the other is a liar.






In the paper today it says that the CBA were contacting up to 2000 clients a day to let them know they were in margin call but no calls were given to storm clients.  The last time storm clients went into margin call the CBA sent them out letter advising them they were in margin call and giving them five days to correct their LVR's. 

There were a lot of very astute investors who are ex storm -just as there are a lot of totally inexperienced ones - and  the experienced among us say 'if the bank had given us a 30 cent phone call we could have corrected our LVR and none of this would have happened.'  That's why we are all asking 'why didn't the bank give us all a call'  They have made a fortune from storm and it's clients why couldn't they afford to give us all a 30 cent phone call.  Some of the people you have 'bashed' on this site have repeatedly said this and they have lots of supporters who agree with them.  This is the primary reason they are blaming the banks and want compensation.  I think it's unfortunate that the media have reported SICAG members as saying 'we are only going after the banks because they are the only ones with any money' because this is certainly not the primary reason.  

The CBA/CGI helped to fund the overseas trips which were organised by storm, those who went had to pay their own way but the CBA/CGI provided the funds to make sure that the people who went got three times what they had paid for.

Neither the banks or storm have sent out any paperwork to say that their rules have changed.  So why didn't they send out these same notices this time?  If they had sent them out no storm client may not be any worse off than the many other investors out there who have margin loans and they certainly wouldn't be in negative equity.  If you read Gus Dalle Corts submission he obviously believed this, he asks 'WHY DIDN'T THEY DO IT THIS TIME.'  It's my guess that the other advisors also believed that this would happen.

If you read the ANZ banks submission they say they were approached by storm and they disagreed with storms requirements saying that it contravened their lending practices.  Many of the other banks and the CBA in particular have closely aligned themselves with storm and the only way they could do this is to break their own lending practices and to break their own margin call rules.  This has been the very aspect of this case which has got so many of us into negative equity and ruined us.

I've made my thoughts on storm central very clear and there is mounting evidence that this man EC and close cohorts should be jailed for life, and there appears to be many who would agree with this.  Just reading his responses to yesterday's questioning is enough to realise that this man is a self centered, self serving, egotistical individual who would be far better off residing in a jail cell than his present mansion.  The banks who closely aligned themselves with him all knew his strategy, knew it was flawed and still agreed to support him and us financially despite knowing that it was morally, ethically and legally wrong.

There are many ex stormies who have been investing very succesfully for a long long time using margin loans and they are now so busy they put this responsibility into storms hands because they had seen how succesful it could be.  Storm and the banks haven't played by the rules and now these people find themselves ruined as well when they can prove that this strategy has been succesful as long as it was managed correctly.  That's probably why the advisors believed in what they were doing/selling but most have  have lied to us / certainly haven't told us the truth.

Let's hope the truth does all come out and we all find out exactly what did happen.  At the moment we can only look at the information which is being presented.


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## Rainbow (4 September 2009)

I've been watching this, as a member of SICAG, and you have raised my suspicions. When we first heard about the Parliamentary Inquiry, SICAG did not want us to post our individual stories - they wanted to put across the one voice and told us not to send in information... else we'd choke it up on non-relevant sob stories. They seem most insistent on pushing the CGI/Commonwealth bandwagon, yet offer little in the way of comment regarding other institutions and their theory as to why we ended up broke too. Maybe now they've heard Manny lie through his teeth, they'll see the light.


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## Monario (4 September 2009)

Julia said:


> Thanks for your report, Schumy.  Confirms the impression to date.
> 
> Carey, many thanks for the copy of CBA's comments to 60 Minutes.
> 
> ...




Julia, I dont think it is a case of Strom dropped the Ball, in no way am I defending Storm or Manny, but I think mulitple parties DROPPED THE BALL..

CGI and Macquarie are not without blame here!!


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## Monario (4 September 2009)

Quincy said:


> Another PR excercise perhaps ?






Quote:
As he walked out of the inquiry, The Courier-Mail asked how his health was coping with the Storm collapse. He stopped on the spot.

"Many years ago I had to haul a little girl out of a car that had been in a head-on collision," he said. "In that experience you don't have the luxury of worrying about how you feel.

" In times of stress, one does not have the luxury of self-remorse."

Now it was Mr Cassimatis with tears in his eyes. They welled, but they didn't run.

http://www.news.com.au/couriermail/s...05-952,00.html 


Oh Manny please, is this some sort of analogy for some adive you gave people in earlier life a pulled them out of the crap you dumped them in perhaps?

I wonder why Julie was really not there? Perhaps some marital stress as she has finally seen the conman he is, likely the reason Manny's first wife left him...

I just cant wait to see him stripped of his personal wealth!!! Surely this slime ball will not be let to get away with holding onto personal assets he gained while giving false and negligent advice!!! Jail in Australia would be to good for this man..


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## Farencue (4 September 2009)

Thanks for posting Rainbow and welcome.
Some of us have thought SICAG was a little off from its inception.


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## Judd (4 September 2009)

Monario said:


> Julia, I dont think it is a case of Strom dropped the Ball, in no way am I defending Storm or Manny, but I think mulitple parties DROPPED THE BALL..
> 
> CGI and Macquarie are not without blame here!!




It just seems to get stranger and stranger.

At the Cairns session it was reported in a news article that Mr Dalle Cort "blamed the collapse on the ''product failure'' of margin loans.  We couldn't possibly know,'' he said. ''The data coming through from the banks was bizarre.''

Yet in the same report another planner from a separate group stated that ''We did have CGI (Colonial Geared Investments) loans, and we did have managed trusts and in November, as with a lot of planners, we were really very, very actively managing our margin loans."

The implication being that the data coming from CGI to other planner groups was "clean" and able to be acted upon to manage margin loans.  The other implication is that those margin loans where the planner had the authority to act, while busier than a one-armed paper hanger, did but Storm didn't.

That other planner is also reported to have said "It's not that the product failed at the end of the day, it's that the strategy failed.''

Go figure.  It's beyond me but certainly blame, at varying degrees, rests at levels in this fiasco.

The main thing is, however, if and where the financial providers are at fault those affected should be set right.  Irrespective of that, those Storm advisers still need to be pilloried and where possible taken to the cleaners.  Make them do the washing, cleaning and cooking for those they have shafted and then toss them a dollar coin every week as a donation for their labour.  A dream I know but it would be nice.


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## darkside (4 September 2009)

schumy said:


> I’ve only followed this saga from time to time so I’m not well qualified to comment on any of the details. But I did attend the afternoon session of the Senate Inquiry in Brisbane yesterday in the capacity of an interested bystander (I’m not connected with Storm in any way) and was astonished listening to the submission of the 3 representatives of SICAG. They made a long winded introduction in which they wasted valuable submission time praising this nation, democracy, blah, blah, blah and then chose to limit what they did say to fanning the flames regarding a terrible conspiracy between the CBA and Storm but when it soured CBA pulled the plug.
> 
> So they seem to think the outcome was all a vindictive plot hatched by the CBA to grab their money and run. They don’t seem to understand the concept of personal responsibility, said they still trusted their Storm advisers implicitly and when one of them gave an explanation about their margin loan, they demonstrated to me at least, a poor understanding of it and seemed confused. At the end of their submission they got a standing ovation from most of those present. I was left shaking my head in disbelief. If these people are representing the interests of the ex-clients of Storm, I would be worried.




Thanks schumy, 

welcome to our side of the world, if you had said anything against SIGAC in the last few weeks you would have been banished to the corner with the others who chose to speak out against their agenda.

Now all of a sudden the "money Spiders" have dissapeared from the thread and will probably go into hiding till well after the inquiry, then we will see them re emerge like a phoenix from the ashes to once again take advantage of the unfortunates that were taken down by storm .

It's akin to letting "jack the ripper" loose in "The Razor Shop".


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## darkside (4 September 2009)

Rainbow said:


> I've been watching this, as a member of SICAG, and you have raised my suspicions. When we first heard about the Parliamentary Inquiry, SICAG did not want us to post our individual stories - they wanted to put across the one voice and told us not to send in information... else we'd choke it up on non-relevant sob stories. They seem most insistent on pushing the CGI/Commonwealth bandwagon, yet offer little in the way of comment regarding other institutions and their theory as to why we ended up broke too. Maybe now they've heard Manny lie through his teeth, they'll see the light.




 Rainbow , welcome

I would like you to meet Max , where is he , so many unanswered questions.

He promised so much , took everyone to task and delivered, well 2 handfulls of fresh air. 

Max my new mantra. Do the right thing :shake::shake::shake::shake:


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## Pindibog (4 September 2009)

Rainbow said:


> I've been watching this, as a member of SICAG, and you have raised my suspicions. When we first heard about the Parliamentary Inquiry, SICAG did not want us to post our individual stories - they wanted to put across the one voice and told us not to send in information... else we'd choke it up on non-relevant sob stories. They seem most insistent on pushing the CGI/Commonwealth bandwagon, yet offer little in the way of comment regarding other institutions and their theory as to why we ended up broke too. Maybe now they've heard Manny lie through his teeth, they'll see the light.




The submissions were going to the inquiry not SICAG. I have only ever read encouragement from SICAG to submit whatever story. Mine bashes all!!
If you had something different it should be out there.


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## Pindibog (4 September 2009)

Farencue said:


> I asked you many posts ago Pindibog, whether you signed an authority for Storm to act on your behalf, are you saying you did not?




Did I not answer you?? I can't work this sites search engine out???

Anyway I did not. I am not a professional in the area of contractual law and by the looks when you believe one thing to be true there is another clause stating they can do whatever they want (LVR's for eg). 

Whenever I redeemed/moved/puchased shares or moved money around it had to be signed by me. They were unable to do it on my behalf. I have lots of evidence to show this.


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## manorleas (4 September 2009)

"The implication being that the data coming from CGI to other planner groups was "clean" and able to be acted upon to manage margin loans. The other implication is that those margin loans where the planner had the authority to act, while busier than a one-armed paper hanger, did but Storm didn't."


The reality is that Storm didn't need to rely on data from CGI.  When monies are invested in an index fund, it's a very simple matter to calculate an estimated current value (by the minute if needed) and hence the LVR - it's not rocket science, and they supposedly had very sophisticated software.    

I think you will find that the authority to take instruction from Storm was on the original margin loan application.  The older CGI applications also had a section to complete for who to contact when a margin call occurred.

Manorleas


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## Trevor_S (4 September 2009)

simcat said:


> Has Mr Weir ever heard of the concept of 'justice'?  Blame should be levelled at the parties responsible for causing this mess, irrespective of whether victims can receive money out of them.




That presupposes you wish to assign "guilt" to other parties ?  It seems patiently obvious to me that if you didn't invest with Storm, you would not have lost money through Storm.

While some "investors" continue to maintain a naivety, to my mind this should be no defence. If it is, CBA, Storm et al should be able to, rightly or wrongly, use the same defence. (EC seems to be doing that very thing)

Just because someone proposes a system for you to get rich/live comfortably/make a squllion doesn't mean you should pay any heed.  They can dress up a charlatans advice in whatever clothes they want, at the end of the day YOU need to sign the cheque.  The buck stops with YOU... a soon as you abrogate that responsibility, don't be surprised when it comes back to bite you in the ar$e, as in this case and many others.  

There were many that could smell the stink of it all from driving past their office, you just had to open your eyes.  I find it incredibly hard to believe everyone is that financially naive.  While Storm investors were all selling in Nov 08 - Mar 09 I was buying.  While you guys were all buying in 07 and 08, I was holding, while I have never been tested I am sure I fall somewhere  in the middle of the IQ bell curve, so I am not particularly mentally adroit.  It's not that hard and if it is, stick it in the Bank.

Once the Politicians get involved you know it's a sideshow, as was pointed out before this even started.

The only difference between Madhoff and EC is that he genuinely believed his own bullsh*t, while Madhoff new it was a con and that's why he'll be "ok" and Madhoff is in jail. Same con, different clientele.


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## Ironhalo (4 September 2009)

Trevor_S said:


> While some "investors" continue to maintain a naivety, to my mind this should be no defence. If it is, CBA, Storm et al should be able to, rightly or wrongly, use the same defence. (EC seems to be doing that very thing)
> 
> Just because someone proposes a system for you to get rich/live comfortably/make a squllion doesn't mean you should pay any heed.  They can dress up a charlatans advice in whatever clothes they want, at the end of the day YOU need to sign the cheque.  The buck stops with YOU... a soon as you abrogate that responsibility, don't be surprised when it comes back to bite you in the ar$e, as in this case and many others.




No one is saying that Storm clients aren't to blame, but when you are paying fees to someone to manage your investment who had a very good reputation (at the time), boasted of advanced software that tracked investments, were given the tick of approval from ASIC, had a licence to operate under the FPA, and had good working relationships with the big margin lenders, you'd assume that a simple thing such as monitoring an LVR and advising clients of a potential margin call wouldn't be hard between Storm and a major lender. You'd also expect them to have a large war kitty of cash in the company reserves to see through rough patches too...turns out that cash was all in private jets and mansions. Hindsight is a wonderful thing.

Most of us had no access to our LVR's, and any calls to CBA/CGI/Storm trying to sell before people went into negative equity were ignored. I got granted a margin loan 4 weeks prior to being sold down without a phonecall at the bottom of the market slump....and I was 35% off margin call. No explanation, no nothing.



Trevor_S said:


> I find it incredibly hard to believe everyone is that financially naive.  While Storm investors were all selling in Nov 08 - Mar 09 I was buying.  While you guys were all buying in 07 and 08, I was holding, while I have never been tested I am sure I fall somewhere  in the middle of the IQ bell curve, so I am not particularly mentally adroit.  It's not that hard and if it is, stick it in the Bank.




Stick it in the bank and earn less interest than the rate of inflation? This isn't a thread for boasting of success on the share market. I've made most of my losses back since Dec 08 by doing my own thing, but managed to lose five figures in Storm/Colonial due to their incompetence in Oct 08.

As a Naval Officer, I think people who drive their boats up the wrong side of a waterway to be idiots for putting themselves in danger. But not everyone knows the intricacies of the regulations pertaining to avoiding collision at sea, so I can't look down my nose at a father taking his kids fishing in a runabout when I am trying to berth a patrol boat, and they are unwittingly in my way. 

What would you do if one of your relatives went into Rockhampton hospital for a routine operation and died, because your qualified doctor turned out to be Jayant Patel? Would you throw your hands in the air and say 'well serves us right, we should have personally checked his qualifications and not taken the regulatory authorites word for it that he was qualified to provide us with medical advice?' You'd be out for blood wouldn't you?

No one here claims that they don't share blame for what happened, but coming into a thread and shooting from the hip saying 'well I made cash, you guys didn't, therefore vicariously you lose' is stupid and unwelcome. There is more at play here then a simple used car saleman, hence the 140+ pages in here, and a massive class action by lawyers. Again, hindsight is a wonderful thing.


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## Ironhalo (4 September 2009)

Trevor_S said:


> That presupposes you wish to assign "guilt" to other parties ?  It seems patiently obvious to me that if you didn't invest with Storm, you would not have lost money through Storm.




Captain Obvious, you have been awarded the Distinguished Service Medal for services to stating the obvious.


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## Garpal Gumnut (4 September 2009)

269139 hits on this thread since it started.

266,919 hits,  less than 24 hours ago.

I wonder if the SICAG Model has the same number.

Remember Storm victims , membership of ASF is free and as well as giving you up to date INDEPENDENT advice, it may give you education on financial matters so that it won't happen again.

Oh and no moneyspiders, Storm logos or advice to collate your submissions to the Inquiry into a one fits all model.

No advice to get into further financial advice with financial advisers following the Storm fee model.

And I don't think that any ex Storm advisers or their relatives would be game to poke their heads up on the forum.

And we don't make deals with banks.

gg


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## DocK (4 September 2009)

Trevor_S said:


> That presupposes you wish to assign "guilt" to other parties ?  It seems patiently obvious to me that if you didn't invest with Storm, you would not have lost money through Storm.




Gosh you're clever, aren't you?  This sort of holier-than-thou attitude serves only to plump up your own sense of smug self-righteousness in my opinion.  Does it contribute in any way to the thread? - only if having a kick at people who have had plenty of practice at kicking themselves makes you feel good.  It seems patently obvious to me that you're the sort of person who loves to look down his nose at people if at all possible.



> While some "investors" continue to maintain a naivety, to my mind this should be no defence. If it is, CBA, Storm et al should be able to, rightly or wrongly, use the same defence. (EC seems to be doing that very thing)




Unlike CBA, Storm et al - I don't charge anyone a penny for my naivety.  Seems to me that if you're going to charge a fee for a service, naivety ceases to become an acceptable excuse for negligence.



> Just because someone proposes a system for you to get rich/live comfortably/make a squllion doesn't mean you should pay any heed.  They can dress up a charlatans advice in whatever clothes they want, at the end of the day YOU need to sign the cheque.  The buck stops with YOU... a soon as you abrogate that responsibility, don't be surprised when it comes back to bite you in the ar$e, as in this case and many others.
> 
> There were many that could smell the stink of it all from driving past their office, you just had to open your eyes.  I find it incredibly hard to believe everyone is that financially naive.  While Storm investors were all selling in Nov 08 - Mar 09 I was buying.  While you guys were all buying in 07 and 08, I was holding, while I have never been tested I am sure I fall somewhere  in the middle of the IQ bell curve, so I am not particularly mentally adroit.  It's not that hard and if it is, stick it in the Bank.




I am so, so, so sick of being labelled as a greedy, gullible, fool by people like yourself who quite likely has become an expert-via-media.  You don't know me.  You probably know very few ex-storm clients, if any.  To label us all as greedy simply because we were trying to make the most of what we had is grossly unjust and small-minded.  I could call you ignorant, self-important, judgemental and just plain mean - but since I don't know you I shall refrain and keep my opinion to myself


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## maccka (4 September 2009)

Judd said:


> It just seems to get stranger and stranger.
> 
> At the Cairns session it was reported in a news article that Mr Dalle Cort "blamed the collapse on the ''product failure'' of margin loans.  We couldn't possibly know,'' he said. ''The data coming through from the banks was bizarre.''
> 
> ...




Hello all,

**SIGH**  I was at both the Cairns and Brisbane sessions and have recordings that I took of every bit of testimony that was given.  They were two VERY long days.

I have to say that I have found it very frustrating over the past few days to see the way some of the media have reported these sessions.  Sometimes the "quotes" you see attributed to people in the news article above actually aren't true quotes.  Words are left out by the journalist (in this case that doesn't necessary change the total meaning but in others it does).  While that is not particularly an issue in the article that Judd is quoting here it definitely is in a number of the other articles that have been linked in this forum.  In fact not only is misquoting a problem but also the fact that much of the context is removed from the quotes which changes the meaning of their quote.

After checking the recordings I can pretty much confirm that Dalle Cort did say what Judd reports above.

In talking about what SF was trying to do to help the clients while the market was falling and the problems SF was having with data.

Dalle Cort - "For a period of time - for over a month - that never changed.  So how could we manage something we couldn't manage?"

More conversation regarding what SF was doing.  Nothing that particularly offers much information - a brief mention of signing a piece of paper so when data did get back to being correct they could act.

Ripoll - _"So you really didn't know at any given point what was happening with that particular product." _

Dalle Cort - _"Not that I didn't know.  We couldn't possibly know.  Because the data coming through from the banks was bizarre.  It simply wasn't showing what was real."_

Williams - _"So you're saying that the monitoring of the market coming through from the banks simply wasn't keeping pace with the fall of the markets."_

Dalle Cort - _"Absolutely! Without a doubt.  And it sickens me that they continually state that there was no problems with their systems."_

After checking the recording (it will be backed soon by Hansard records) for the other planner from a separate group I can tell you that the financial planner Judd talks about here is Ms Joanne Tuck (I believe it was) and she gave the evidence about managing the margin loans of her own CGI clients.  She did say that they were very, very actively managing the loans.  

Regarding the data for CGI Margins Loans she said "We would go on to the internet and look at the margin loan balances.  We would go on to the internet and value the portfolios ourselves."  

She didn't actually say that the product didn't fail. She said "_His_ [referring to Dalle Cort] _comment that the product failed at the end of the day.  Well I would say that his strategy failed at the end of the day_".   

She also admitted that her business was owned by a big bank. _"My business and my partner's business is actually licensed by a licensed securities dealer who is owned, dare I say it, by a big bank"._  It would be interesting to know "which bank?".  

A question I have been wondering about in the days since hearing this on Tuesday - If she was able to access clean data from CGI why did she need to go to the internet and value the portfolios by herself?

She admitted herself that some of her evidence seems like sour grapes but then suggested that she felt they were bloody well worth investigating.

tired 
Maccka


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## Solly (4 September 2009)

*"Storm founder's apology 'overdue' "*

"The *Storm Investor Consumer Action Group* believes an apology from the founder of the failed investment group Storm Financial has been a long time coming.

The action group's co-chairman, Noel O'Brien, says while Mr Cassimatis did apologise, it was long overdue.

"I think he's been a little bit too quiet for a little bit too long," he said.

"Okay, he's putting a heck of a lot of blame on the Commonwealth Bank and that's justifiably so, but I think he may have let himself and his former clients down by not being out there more for them earlier in the piece.

More from Penny Timms on the ABC;


http://www.abc.net.au/news/stories/2009/09/04/2676312.htm


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## Judd (4 September 2009)

While it is true that people should be responsible for their own financial affairs and outcomes, it is also true, to my mind, that you need the mind set to be curious about those issues.  If you haven't got that "spark" it is difficult.  I consider myself fortunate that I am curious about money amongst other things.

From what I have read, most Storm clients simply did not know how to go about things.  They worked, did shifts, were on duty at sea 24/7 for a few weeks or in East Timor, Afghanistan Iraq.  Shagged out.  Went home to family.  Normal stuff.  Highly unlikely that on arriving home they sat down and explored Elliot Wave theory, Relative Strength Indicators or what the market is doing to day.  Closest thing they got to it was watching the talking heads on TV or reading the finance section of the newspaper.

So in an attempt to improve their family's lot they sought advice.  Sure, the best thing they could have done was absolutely nothing.  I have no sympathy for those who had $4m in investable assets and proceeded to lose the lot through Storm.  Unless you won Tattslotto the day before, you would need some financial acumen to achieve that amount.  However, most didn't have that amount.

As most referrals to financial planners is by word of mouth then that is where a lot went.  Why?  Read "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay first published in 1841.  To go against the herd is darn difficult.

Yep, some blame still rests with the investors in my view as after all they did sign the documents and write the cheque.  But the blame does not all rest with them.

maccka, thank you for the clarification.


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## maccka (4 September 2009)

manorleas said:


> The reality is that Storm didn't need to rely on data from CGI.  When monies are invested in an index fund, it's a very simple matter to calculate an estimated current value (by the minute if needed) and hence the LVR - it's not rocket science, and they supposedly had very sophisticated software.
> 
> Manorleas




Actually Manorleas I think you will find that they did need the data.  As I understand it if a fund is suspended then there is no value for the units and therefore there is no way to calculate a loan to value ratio.  If there is no value how can you compare a loan to it to get a ratio?

Maccka


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## Solly (4 September 2009)

*"CBA blames Storm for margin call delays"*

"Commonwealth Bank has blamed Storm Financial for not passing on margin calls to its investors despite admitting the bank did not contact the customers itself.

Appearing before an inquiry into the collapse of the Townsville-based financial planner, CBA also admitted information it supplied Storm about the financial health of its customers was not completely reliable."

More from AAP in the SMH;

http://business.smh.com.au/business/cba-blames-storm-for-margin-call-delays-20090904-fb8u.html


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## Solly (4 September 2009)

*"Sales and bonus culture directly linked to collapse of Storm: FSU"*

'The Finance Sector Union (FSU) has called for an end to the sales and bonus culture that it said was directly linked to the collapse of Storm Financial.'

More from Corrina Jack in Money Management;

http://www.moneymanagement.com.au/article/Sales-and-bonus-culture-directly-linked-to-collapse-of-Storm-FSU/497037.aspx


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## maccka (4 September 2009)

Judd said:


> As most referrals to financial planners is by word of mouth then that is where a lot went.  Why?  Read "Extraordinary Popular Delusions and the Madness of Crowds" by Charles Mackay first published in 1841.  To go against the herd is darn difficult.
> 
> ...
> 
> maccka, thank you for the clarification.




Judd you are welcome. 

With regard to going against the herd you might be interested to hear that on Tuesday, in Cairns, the committee heard testimony (in the open mic session) of how the "network nature" of word of mouth has devastated whole families and communities leaving them with very few reserves (financial or emotional) to deal with this tragedy.  It is something that I believe really hasn't shown up much through the submissions although it was mentioned in one of the submissions from a couple of Storm clients.

Maccka


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## Monario (4 September 2009)

Trevor_S said:


> There were many that could smell the stink of it all from driving past their office, you just had to open your eyes.  I find it incredibly hard to believe everyone is that financially naive.  While Storm investors were all selling in Nov 08 - Mar 09 I was buying.  While you guys were all buying in 07 and 08, I was holding, while I have never been tested I am sure I fall somewhere  in the middle of the IQ bell curve, so I am not particularly mentally adroit.  It's not that hard and if it is, stick it in the Bank.




Where, where, where were you Oh great one when we needed you, You could have been the great mesiah we needed to lead us poor stary cattle away from the lions den.



Trevor_S said:


> Once the Politicians get involved you know it's a sideshow, as was pointed out before this even started.




You should jump up at the next hearing and let Bernie know of his folly, I will chip in and shout you your expenses for the trip if you like!!



Trevor_S said:


> The only difference between Madhoff and EC is that he genuinely believed his own bullsh*t, while Madhoff new it was a con and that's why he'll be "ok" and Madhoff is in jail. Same con, different clientele.




EC is a pathological liar, its not hard to see that, NOW, once again where were you when we needed you oh great one!!.

Serioulsy trevor, how have any of the comments you made here contributed postively to this forum? 

I just love the explotation of hindsight some wise people use!!


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## DocK (4 September 2009)

Judd said:


> While it is true that people should be responsible for their own financial affairs and outcomes, it is also true, to my mind, that you need the mind set to be curious about those issues.  If you haven't got that "spark" it is difficult.  I consider myself fortunate that I am curious about money amongst other things.
> 
> From what I have read, most Storm clients simply did not know how to go about things.  They worked, did shifts, were on duty at sea 24/7 for a few weeks or in East Timor, Afghanistan Iraq.  Shagged out.  Went home to family.  Normal stuff.  Highly unlikely that on arriving home they sat down and explored Elliot Wave theory, Relative Strength Indicators or what the market is doing to day.  Closest thing they got to it was watching the talking heads on TV or reading the finance section of the newspaper.
> 
> ...




A reasonable and probably fairly accurate summary of a lot of ex-stormers.  Most of us are quite willing to accept some blame (and have been feeling a lot of guilt, amongst other emotions).  One of the saddest aspects to the whole tragedy is that most of us probably thought we were being responsible by going to a reputable financial planner and dealing with reputable banks.  

I bet most of us are now "sparked-up" and a lot more curious about the inns and outs of waves/indicators/oscillators/indexes ad nauseum than we used to be


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## maccka (4 September 2009)

carey ramm said:


> Hi Ya Shibby!!!
> 
> Another point to remember is that the Maquarie margin lending book was of similar size to CGI - there was over $2billion in margin loans! I understand that once the Margin lending book reached a certain size, the interest rates on the Storm corporate loan facility (used for building purchases etc) became zero. Pure conflict of interest!!!




Hi Carey,

What happens to the economy when someone tries to sell up the equivalent of $4m (CGI + Macquarie) lending all at once as people are moving to get out of their loans?

Maccka


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## Solly (4 September 2009)

Just got an unsubstantiated message to say that at the Inquiry today in Sydney a CBA representative said that in future CBA will ensure that they will contact clients directly who are in margin call, instead of relying on the advisers. 

Will have to wait for the transcript for the exact words that were stated for verification.


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## Garpal Gumnut (4 September 2009)

Solly said:


> Just got an unsubstantiated message to say that at the Inquiry today in Sydney a CBA representative said that in future CBA will ensure that they will contact clients directly who are in margin call, instead of relying on the advisers.
> 
> Will have to wait for the transcript for the exact words that were stated for verification.




It makes sense mate.

Financial advisers are dills, better suited to working on the roads as stop go people but they'd probably stuff that up as well.

gg


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## Monario (4 September 2009)

Carey, or anyone else for tht matter.

Could you throw some light on the ramifications of the advisors selling there personal portfolios down, but not advising clients?

Dont these so called advisors have a duty of care, i fthey were saying one thing but doing another, why can not the individual advisor be taken to the cleaners?


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## Solly (4 September 2009)

Garpal Gumnut said:


> It makes sense mate.
> 
> Financial advisers are dills, better suited to working on the roads as stop go people but they'd probably stuff that up as well.
> 
> gg




gg, for some reason I can't come up with a caption so I'll just provide the link...

http://www.newspix.com.au/Packages/ViewImage.aspx?id=732124

(with apologies to Rupert)


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## Judd (4 September 2009)

Don't sweat it, Monario.  Although he is a tad harsh, Trevor_S has made a valid point about people needing to take responsibility for their own financial matters.  Other aspects could be considered contentious and open to debate.

However, along with the best of us, since finance involves numbers, I am sure the omnipotent ones can provide the solution to this question:

The least common multiple of positive integers a, b, c and d is equal to a + b + c + d. Prove that abcd is divisible by at least one of 3 and 5.​


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## Steve Borden (4 September 2009)

maccka said:


> Actually Manorleas I think you will find that they did need the data.  As I understand it if a fund is suspended then there is no value for the units and therefore there is no way to calculate a loan to value ratio.  If there is no value how can you compare a loan to it to get a ratio?
> 
> Maccka




It would have been quite simple to fix a historical point of reference when say the All Ords was 5130 on 4/9/08 and the fund was worth $1m, then on 17/10/08 when the All Ords was 3988 work on the basis the fund had reduced in value by 23% add say another 5% as a margin for error and assume the fund was worth $0.72m. Now if the margin loan was for $0.70m it would have been safe to say the client was in margin call. Alternatively if the margin loan was for $0.50m then the LVR was 69%.

Sure it's a lot of work but that's what they were getting paid for, it aint rocket science, but rather than do the work and earn our money let's pin it all on the Bank.

They apparently had these fantastic systems why didn't they run a shadow ledger to protect their client's interests?


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## Garpal Gumnut (4 September 2009)

Solly said:


> gg, for some reason I can't come up with a caption so I'll just provide the link...
> 
> http://www.newspix.com.au/Packages/ViewImage.aspx?id=732124
> 
> (with apologies to Rupert)




Or this with apologies to cartoonstocks


gg


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## Harleyquin (4 September 2009)

Garpal Gumnut said:


> It makes sense mate.
> 
> Financial advisers are dills, better suited to working on the roads as stop go people but they'd probably stuff that up as well.
> 
> gg




GG why do all the financial experts tell us to go to a licensed financial planner and take their advice?  Whether you go to ASIC, David Koch and there's a few others I have seen but can't recall their names but this is their advice.  For the financially astute they don't need anyone they can look after themselves.  Nobody should ever assume that we all know what to do with our finances and how we can make the most of them.  We were very good at putting our money in the bank and were constantly told by others that we should be doing something more constructive with our money but had no idea what to do or who to go to, so our first port of call was a licensed financial planner and we took their advice.  We had no idea if iwhat they were suggesting was the right thing to do or not but didn't know what else to do.  

We still don't know what to do so from now on we will just put it in the bank.  I think that those of you out there who are clever with your money are very very lucky.  We have things that we are clever with but knowing how to manage our money and make the most of it isn't one of them.  Someone from this forum has sent me a link and said 'you can do it' and I intend to read it this weekend.  Maybe I'll learn what to do after all.

Financial planners will need to come with a warning label on them from now as there are thousands of us who have been seriously burned and we all have twenty or more close relatives who are looking at us thinking 'look what a financial planner did to them there is no way I'll go near one' and suddenly you have millions who will never ever trust a financial planner again, and we are one of them and have many many family members who are thinking 'no way we don't want to know about these mongrels if you can't trust them.'

The sad part is there are some wonderful financial planners out there and they are being ostracised by this occuring to so many.  The hard part is finding out who to trust and who not to trust and  I don't know how to do that.  It interests me that so many clever financial people on this forum say they will never trust a financial planner either.  Wonder why???


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## Garpal Gumnut (4 September 2009)

Harleyquin said:


> GG why do all the financial experts tell us to go to a licensed financial planner and take their advice?  Whether you go to ASIC, David Koch and there's a few others I have seen but can't recall their names but this is their advice.  For the financially astute they don't need anyone they can look after themselves.  Nobody should ever assume that we all know what to do with our finances and how we can make the most of them.  We were very good at putting our money in the bank and were constantly told by others that we should be doing something more constructive with our money but had no idea what to do or who to go to, so our first port of call was a licensed financial planner and we took their advice.  We had no idea if iwhat they were suggesting was the right thing to do or not but didn't know what else to do.
> 
> We still don't know what to do so from now on we will just put it in the bank.  I think that those of you out there who are clever with your money are very very lucky.  We have things that we are clever with but knowing how to manage our money and make the most of it isn't one of them.  Someone from this forum has sent me a link and said 'you can do it' and I intend to read it this weekend.  Maybe I'll learn what to do after all.
> 
> ...




Yes mate its a caveat emptor or buyer beware situation.

Many of the older financial planners are ex insurance salesmen who sold insurance nobody would ever need.

The younger ones just do courses that any old jack could do online or through TAFE.

Investing is risky.

We are all prone to greed and fear.

Just recognising that is half the battle. some poor storm bastards say they weren't greedy. If they weren't that is a surprise. What they lacked was fear, because Manny , and the other Storm advisers who are now connected with SICAG took care of that with their spiel.

So trust nobody.

Recognise greed and fear.

Make up your own mind about investments.

Have a stop loss, that is a point where if you are wrong you get out and go into cash or another investment.

Anyone can be a financial planner.

Oh and if you go to one and they have a good looking sort at the front desk, fish in a tank and a crapper better than yours. RUN.

gg


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## Harleyquin (4 September 2009)

Garpal Gumnut said:


> Yes mate its a caveat emptor or buyer beware situation.
> 
> Many of the older financial planners are ex insurance salesmen who sold insurance nobody would ever need.
> 
> ...






Thanks for the advice GG so I need to find one with some old decrepid at the desk, no fish and an old outhouse out the back.  Sounds like good financial advice. ...and educate yourself so you don't need a financial planner, and look after your own money.  I'm taking this all on board, by this time next year I should be half way there I reckon.


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## Garpal Gumnut (4 September 2009)

Harleyquin said:


> Thanks for the advice GG so I need to find one with some old decrepid at the desk, no fish and an old outhouse out the back.  Sounds like good financial advice. ...and educate yourself so you don't need a financial planner, and look after your own money.  I'm taking this all on board, by this time next year I should be half way there I reckon.




Mate , there are very few asf'ers who haven't been taken by some bastard adviser at one time or another.

Welcome to the club.

And your plan is a good one. 

Learn the search button. Its all in asf.

gg


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## Judd (4 September 2009)

Harleyquin said:


> Thanks for the advice GG so I need to find one with some old decrepid at the desk, no fish and an old outhouse out the back.  Sounds like good financial advice. ...and educate yourself so you don't need a financial planner, and look after your own money.  I'm taking this all on board, by this time next year I should be half way there I reckon.




Harleyquin,

I assume, for what you have written, that you don't have much money.  Nothing shameful about that.  However, if you can, just go to a bookstore, go to the personal fiance section and just browse.  Buy if you like the book and you have $20-$30 in your pocket.  Stay away from stuff you feel is too technical for you.  Get some ideas.  Go to your local Library and browse.  Search the internet, if you come across investment books you, and only you, feel you are interested in, ask the library to get it in for you.  

Whatever you decide, get a $10 calculator from your local supermarket and play with some finance numbers and estimates.  For profits, halve the result because you're probably being too optimistic.  For losses, double them just to be on the safe side.

Just keep on asking question after question until YOU are satisfied.  Always ask yourself what is in in for them and how much am I left with.  Generally the answer will be a lot and not much.

And keep on kicking those Storm advisers in the nuts.  They thoroughly  deserve it.


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## Harleyquin (4 September 2009)

Judd said:


> Harleyquin,
> 
> I assume, for what you have written, that you don't have much money.  Nothing shameful about that.  However, if you can, just go to a bookstore, go to the personal fiance section and just browse.  Buy if you like the book and you have $20-$30 in your pocket.  Stay away from stuff you feel is too technical for you.  Get some ideas.  Go to your local Library and browse.  Search the internet, if you come across investment books you, and only you, feel you are interested in, ask the library to get it in for you.
> 
> ...




Thanks for the tips Judd.  We've got a debt but theres a lot worse off than us we're not wonderful but will survive somehow, after giving them written instructions that we wanted a low risk and balanced investment, just as well we didn't ask for anything too risky.  The worst thing we did was trust them.  Won't make that mistake again I can tell you.  We found out the hard way that there is no such thing as a financial expert.  I knew I wasn't one and now know I've got plenty of company.  There's fraudulent activity involved here just have to find out how and where and hope it doesn't happen to anyone else.  

First thing they should do is scrap the Statement of Advice they give clients to sign and give us a Statement of Advice that they sign guaranteeing their advice, that makes more sense.  I intend to try and educate myself so I won't need one.  We had saved well and had property and money and maybe had enough to retire on at todays prices but not sure if we had enough to retire on at tomorrows prices, that's the tricky bit.  If we could have had enough to succesfully retire on we wouldn't have had to worry about the old age pension but now we don't have a choice, in a couple of years we'll be lining up with the best of them and there's thousands of us now in this position and we are going to cost the government millions.  

They'll be paying for our housing, our health costs and the list goes on and on and with inflation it could be billions.  It will be cheaper for the government to find out who is responsible and get some sort of compensation for us.  Whatever happens life goes on but we have all been financially and emotionally ruined.  Most of us are now only surviving because we are living on anti depressants, sleeping tablets and a glass of two of anything alcoholic.  Everything I earn now goes on bank interest we'll never even make a dint in the principal and will eventually lose our house, as soon as I give up work we won't be able to afford the interest so we'll have to sell and then we will lose everything. Many others have already lost everything.  One day it will be our turn.

Many of us have our names down with Slater and Gordon and if they can successfully negotiate something in our favour we may survive a little easier.  I just hope and pray that something positive will happen eventually.  If we can ever scrape together enough money to invest it won't be with a planner anyway.


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## Julia (4 September 2009)

bunyip said:


> We posted at exactly the same time, so I missed your post.
> 
> So then, it looks like CGI is trying to pull the wool over everyone's eyes with their claim that clients authorised them to deal direct with Storm.
> 
> Sooner or later one or the other party is going to produce proof that they're being truthful and the other is a liar.



There was part of Carey Ramm's post a few pages where he quoted the CBA's letter to 60 Minutes which addressed this point.

I don't imagine it's inconceivable that Storm could have provided CGI with fraudulent documentation instructing CGI to advise Storm rather than the client in event of margin call.




Harleyquin said:


> I've made my thoughts on storm central very clear and there is mounting evidence that this man EC and close cohorts should be jailed for life



Hope you are not intending to hold your breath waiting for this to happen.
I will be very surprised if Manny or his minions do any jail time at all.


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## Monario (4 September 2009)

Julia said:


> Hope you are not intending to hold your breath waiting for this to happen.
> I will be very surprised if Manny or his minions do any jail time at all.





I hope your wrong Julia, at the very least I would hope these people are heavily fined sued and stripped of asstes they gained while taking part in near criminal activities, givinf false and misleading advice etc.

I can tell you if these people get away scott free, I will be out to open my own FP business...


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## bunyip (4 September 2009)

Harleyquin said:


> Thanks for the advice GG so I need to find one with some old decrepid at the desk, no fish and an old outhouse out the back.  Sounds like good financial advice. ...and educate yourself so you don't need a financial planner, and look after your own money.  I'm taking this all on board, by this time next year I should be half way there I reckon.






What you need to do is learn the basics of prudent investing so you can do it yourself and don't need to go anywhere near investment advisers. 
You said you were good at some things. Well, you weren't always good at them were you? You became good at them only after you gathered information and knowledge and then put it into practice.
Investment is pretty much the same. And believe it or not, the knowledge you need is damned easy to get hold of and is really mostly good old common sense. Best of all, it's pretty simple and you don't require a whole lot of it.

The three main investment areas are cash, real estate, and stocks.

For a method of stock market investment that's simple, profitable, and requires no more than one hour of your time each week, read Post No. 2887 on Page 145 of this thread, and also the next few posts after that.
Once you become fully conversant with this methodology you'll have more stock market  knowledge and ability than about 95% of people who play the market.
No Storm client would have been wiped out if they'd known and implemented this particular method of investing in stocks. They would have known when to get into the market, when to get out, and how to identify the most suitable stocks. And they wouldn't have needed Manny bloody Cassamatis or any other investment adviser to tell them how to do it.

Real estate.....a bit of common sense and a few bob to get you started are all you need here. Residential real estate in growth areas will increase in value faster than the rate of inflation, and rentals will go up accordingly. Many people have built impressive property portfolios by putting deposits on houses in growth areas, borrowing the balance, and letting their tenants and the tax man meet most of the loan commitments. The amount of money that comes out of your pocket every month can be surprisingly small if you adopt this approach to property investment.
If you can fund the deposit on a house, banks will usually lend you the rest if you show you can meet the loan commitments.  You can always utilise fixed rate loans if you're worried about interest rate rises.
The big growth areas in Queensland are the south east corner, Brisbane out to Toowoomba, Bundaberg, Hervey Bay, and various major centres along the central and northern coastline. Rocky, Mackay, Townsville, Cairns, have all experienced strong growth and will do so again, although they've currently slowed down to some extent.
The following link may give you some useful information.
http://www.hotspotting.com.au/

As for cash, well, I think most of us know how to use short term bank products such as term deposits etc, when we're looking for a temporary home for surplus funds.

Hope this helps. I'm not a qualified investment adviser, just an ordinary bloke who's had sufficient interest in investment to do lots of reading and research over the years to come up with a few simple strategies that work.


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## Monario (5 September 2009)

bunyip said:


> Real estate.....a bit of common sense and a few bob to get you started are all you need here. Residential real estate in growth areas will increase in value faster than the rate of inflation, and rentals will go up accordingly. Many people have built impressive property portfolios by putting deposits on houses in growth areas, borrowing the balance, and letting their tenants and the tax man meet most of the loan commitments. The amount of money that comes out of your pocket every month can be surprisingly small if you adopt this approach to property investment.
> If you can fund the deposit on a house, banks will usually lend you the rest if you show you can meet the loan commitments.  You can always utilise fixed rate loans if you're worried about interest rate rises.
> The big growth areas in Queensland are the south east corner, Brisbane out to Toowoomba, Bundaberg, Hervey Bay, and various major centres along the central and northern coastline. Rocky, Mackay, Townsville, Cairns, have all experienced strong growth and will do so again, although they've currently slowed down to some extent.
> The following link may give you some useful information.
> ...


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## GumbyLearner (5 September 2009)

Garpal Gumnut said:


> Mate , there are very few asf'ers who haven't been taken by some bastard adviser at one time or another.
> 
> Welcome to the club.
> 
> ...




Wise words

But my own personal experience is don't lie down just yet. 
Fraud is fraud. It just depends if it was "knowingly" misrepresented. That's where, if proven, jail may be involved.


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## Solly (5 September 2009)

*"CBA blames Storm over margin calls"*


"Commonwealth Bank executives have told a parliamentary inquiry in Sydney that it was the responsibility of Storm Financials responsibility to inform its clients about margin calls.

Rather than come out firing, as the failed investment company's founder did yesterday at the inquiry into the collapse of Storm, the bank's representatives apologised to customers who lost their homes and livelihoods in the collapse.

*CBA says it had changed procedures in 2003, effectively giving Storm the responsibility of telling its clients when margin loans were called.
*
The bank says that up until to November 2008, Storm was active in dealing with margin calls."

More from the ABC here;

http://www.abc.net.au/news/stories/2009/09/04/2677290.htm


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## Solly (5 September 2009)

*"How CBA deal fuelled Storm's grand delusion"*

"A SECRET agreement between Storm Financial founder Emmanuel Cassimatis and Commonwealth Bank greatly increased the investment risks for Storm Financial's customers. But the bank failed to tell them of the risks.

In Brisbane, disenchanted former Storm staff member Ron Jelich, who sold his Redcliffe financial planning business to Storm, referred to the dictionary definition of chimera to explain Storm: ''A fanciful mental illusion or fabrication; a wild and unrealistic dream or idea.


...common CBA practice to make loans to retirees without requiring their signature on any loan application.'


Excellent article by Stuart Washington from The Age is here;

http://business.theage.com.au/business/how-cba-deal-fuelled-storms-grand-delusion-20090904-fbet.html


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## Solly (5 September 2009)

*"Families and friendships ruptured by Storm lashing"*

"IN the mid-1990s, Emmanuel Cassimatis and his wife Julie drove the 90km from Townsville down to Ayr for a barbecue with Julie's brother, well-known Ayr builder Danny Garvey, who had invited along several of the town's better-known citizens to meet the well-known Townsville financial adviser."

Read more by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,26029085-5006786,00.html


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## Solly (5 September 2009)

*"CBA grilled over Storm share sell-off"*

"THE Commonwealth Bank of Australia has told a parliamentary inquiry that when the stockmarket tanked last year, Storm Financial ordered it not to contact its clients directly to notify them of margin calls."

More by Sara Rich and Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26027672-36418,00.html


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## Solly (5 September 2009)

*"Storm forced to face music in travelling Parliamentary inquiry"*

"ON WEDNESDAY afternoon Lorna Abdy stood up in a room full of about 100 people in Townsville and told her story.

The room fell quiet as Mrs Abdy - a Charters Towers woman - said she was worried about her son, Raymond, a 29-year-old with an acquired brain injury after a car accident 11 years ago.........

A Cairns woman, Kate McColl, who has a seven-year-old and a four-year-old, fought back tears as she addressed the committee in Cairns to highlight what she called the ''network nature'' of the effects of the collapse....

''My parents are Storm Financial clients and I'm still working hard to keep the ownership of their home. They were retired and both of them have had to return to work in their late 60s,''

More by Stuart Washington in the SMH is here;

http://business.smh.com.au/business/storm-forced-to-face-music-in-travelling-parliamentary-inquiry-20090904-fbfi.html


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## Solly (5 September 2009)

*"Cap'n Manny and his crazy crew"*

"The Commonwealth Bank has plenty of questions to answer about its disastrous relationship with Storm Financial. Stuart Washington reports"

http://business.smh.com.au/business/capn-manny-and-his-crazy-crew-20090904-fbf0.html

_(Stuart, I'm sure gg is impressed with the headline to your story..)_


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## Solly (5 September 2009)

*"CBA supplied 'substantial, accurate information' "*

"Commonwealth Bank of Australia executives have claimed the bank supplied Storm Financial with daily updates about its clients' debt positions as the sharemarket was crashing late last year and rejected claims from the adviser that the data was seriously flawed."

Read more  by Marsha Jacobs in The Australian Financial Review of Sept 5 2009.


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## GumbyLearner (5 September 2009)

Well this is where you need to make a decision Solly?

Do you have faith in the lenders or the borrowers?

Both are subject to the Statutory LAW of the Commonwealth?

Your choice of course?


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## Solly (5 September 2009)

I was with a group during the week where one Stormer said that they had recently been at a pretty low ebb. I shared my stories about some people I know who are going through some tough times as well.

It gave me quite some joy when he told the little group that he had recently stumbled across a little site called ASF, after it was referred to him.

He asked if the others had heard about ASF and how it has given him it a lot of help, information and hope regarding his current predicament. 

Of course I truthfully said that I had heard of ASF and I too had learnt a lot from it.

So I just wanted to let you know first hand that there are some people out there who really appreciate your posts and guiding comments especially during   the some of the most difficult times they have faced in their life...


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## pegasus (5 September 2009)

carey ramm said:


> Hi Ya Shibby!!!
> 
> i am most interested in your comment that your adviser had sold their portfolio up but was under instructions not to sell your portfolio.
> 
> ...




Carey, I am not sure where you are heading with this idea of advisers selling out before thier clients besides stirring the pot. Most of the advisers (that I know of) not only were sold out with thier clients but most of them ended up with very heavy negative equity as they had loans with CGI.  Cant speak for all of them but quite a few did.


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## Solly (5 September 2009)

Solly said:


> *"Six key issues emerge in fiasco's wake"*
> 
> "Storm Financial lived up to its name again yesterday as co-founder and chief executive Emmanuel Cassimatis broke months of silence to give his side of the story about the collapse."
> 
> Read more in the Australian Financial Review Friday, 04 September 2009 in COMMENT by Duncan Hughes




The last paragraph of Duncan's article says it all,

"The danger for the parliamentary inquiry is that it will become a high-profile sideshow unless it now refocuses on key issues and personalities making the major decisions in the company's final days, particularly,* who pulled the plug on investor's margin loans*."


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## Quincy (5 September 2009)

Solly said:


> *"CBA supplied 'substantial, accurate information' "*
> 
> "Commonwealth Bank of Australia executives have claimed the bank supplied Storm Financial with daily updates about its clients' debt positions as the sharemarket was crashing late last year and rejected claims from the adviser that the data was seriously flawed."
> 
> Read more  by Marsha Jacobs in The Australian Financial Review of Sept 5 2009.




See : -   
	

		
			
		

		
	

View attachment AFR - 05-06 SEP 2009.pdf




> Mr Cohen said that when the bank raised the issue of market falls with Storm, Mr Cassimatis's wife, Julie, emailed asking CBA not to contact customers directly.


----------



## Solly (5 September 2009)

Solly said:


> *"How CBA deal fuelled Storm's grand delusion"*
> 
> "A SECRET agreement between Storm Financial founder Emmanuel Cassimatis and Commonwealth Bank greatly increased the investment risks for Storm Financial's customers. But the bank failed to tell them of the risks.
> 
> ...




Maybe living up to their slogan..??


----------



## Harleyquin (5 September 2009)

bunyip said:


> What you need to do is learn the basics of prudent investing so you can do it yourself and don't need to go anywhere near investment advisers.
> You said you were good at some things. Well, you weren't always good at them were you? You became good at them only after you gathered information and knowledge and then put it into practice.
> Investment is pretty much the same. And believe it or not, the knowledge you need is damned easy to get hold of and is really mostly good old common sense. Best of all, it's pretty simple and you don't require a whole lot of it.
> 
> ...



Thanks Bunyip I've read the posts you've recommended and the book is on my next shopping list.  Can't thank you enough.  As I find useful info on this site I'm putting it all in one document as a future reference.


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## Judd (5 September 2009)

That is really good, Harleyquin.

If I may make an observation.  Stormers were screwed to the wall by following the advice of others and others includes well meaning friends and family.

Same concept could be said for information on this forum.  Although it is free and freely given, posters have their own ideas, wants, needs and objectives.  These are not yours.  You have to develop your own.  So sometimes it can be better not to look at what others have achieved but explore and take up those aspects which interest you, discard others with which you are not comfortable and just go your own way.  Your finances, money matters and other more important things are between you and your partner, no one else.

Now just go for it - but slowly.


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## Rainbow (5 September 2009)

Pindibog said:


> The submissions were going to the inquiry not SICAG. I have only ever read encouragement from SICAG to submit whatever story. Mine bashes all!!
> If you had something different it should be out there.




Maybe you should go back through the posts on the SICAG website then and find the one I'm talking about. It is out there.


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## Monario (5 September 2009)

pegasus said:


> Carey, I am not sure where you are heading with this idea of advisers selling out before thier clients besides stirring the pot. Most of the advisers (that I know of) not only were sold out with thier clients but most of them ended up with very heavy negative equity as they had loans with CGI.  Cant speak for all of them but quite a few did.




Pegasus, I know personally of advisors who had sold out, some had not your right, but mine had. and more had sold either part or all.. Just like manny mine had lies to me about selling, he slipped up at a face to face near the end and outed himself!!


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## Julia (5 September 2009)

Judd said:


> That is really good, Harleyquin.
> 
> If I may make an observation.  Stormers were screwed to the wall by following the advice of others and others includes well meaning friends and family.
> 
> ...



Judd, you've highlighted a really good principle.  

In the case of Bunyip's recommendation, however, reading Weinstein's book is something I think a lot of people on this site would endorse.  For me, at least, it was like someone turning a light on.

Harleyquin will probably first want to understand how a stock market works and hopefully she'll take advantage of the ASX's education section.


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## Garpal Gumnut (5 September 2009)

Harleyquin said:


> Thanks Bunyip I've read the posts you've recommended and the book is on my next shopping list.  Can't thank you enough.  As I find useful info on this site I'm putting it all in one document as a future reference.






Judd said:


> That is really good, Harleyquin.
> 
> If I may make an observation.  Stormers were screwed to the wall by following the advice of others and others includes well meaning friends and family.
> 
> ...






Julia said:


> Judd, you've highlighted a really good principle.
> 
> In the case of Bunyip's recommendation, however, reading Weinstein's book is something I think a lot of people on this site would endorse.  For me, at least, it was like someone turning a light on.
> 
> Harleyquin will probably first want to understand how a stock market works and hopefully she'll take advantage of the ASX's education section.




I reckon that you Harleyquin should start a thread called Harleyquin.

You have a good attitude and you could chronicle your recovery using as much assets of knowledge from asf as possible to become self sufficient again.

gg


----------



## chrisgee (5 September 2009)

ok its been another very very  busy week again-i tried to keep up with wahts been happening and my head is spinning-i cant believe that mr c said that stomers were told that they could lose the house if things went bad-what a load of bullshait-id like to use another word but im sure id get banned-the 
exact opposite was told-if anything went bad they would bail you out-were any other stormers told by this mob you could end up losing the house???
gee this makes me so so mad-they siad they woulld look after you-there is NOTHING to worry about-its all in hand-what about the CB freaking A-they changed the policy of advising margining calls in 2003-was anybody told?-come on mr megabucks norris show some b*lls on this-id like to get mr norris and mr c in front of judge judy on one of her bad attitude days and rip into both of them and make them come back with some real answers-not the waffle we heard at the enquiry from mr c and not the ducking and weaving we heard from the CB freaking A. im not a smart ar*e shinny bum i real worker- how about some justice-end of weekly rant-!!!!!!!


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## Judd (5 September 2009)

chrisgee said:


> ok its been another very very  busy week again-i tried to keep up with wahts been happening and my head is spinning-i cant believe that mr c said that stomers were told that they could lose the house if things went bad-what a load of bullshait-id like to use another word but im sure id get banned-the
> exact opposite was told-if anything went bad they would bail you out-were any other stormers told by this mob you could end up losing the house???
> gee this makes me so so mad-they siad they woulld look after you-there is NOTHING to worry about-its all in hand-what about the CB freaking A-they changed the policy of advising margining calls in 2003-was anybody told?-come on mr megabucks norris show some b*lls on this-id like to get mr norris and mr c in front of judge judy on one of her bad attitude days and rip into both of them and make them come back with some real answers-not the waffle we heard at the enquiry from mr c and not the ducking and weaving we heard from the CB freaking A. im not a smart ar*e shinny bum i real worker- how about some justice-end of weekly rant-!!!!!!!




Good rant, chrisgee.  Keep it going as it can be cathartic.  I'm serious.

Just bear in mind that Mr Norris was not the CEO of CB-[expletive deleted]-A in 2003 so you maybe aiming at the wrong person.  He is picking up the reins on legacy issues which did not occur, presumably, on his watch.  It is what CB-[expletive deleted]-A does now to correct those wrongs which is the important part.


----------



## Garpal Gumnut (5 September 2009)

chrisgee said:


> ok its been another very very  busy week again-i tried to keep up with wahts been happening and my head is spinning-i cant believe that mr c said that stomers were told that they could lose the house if things went bad-what a load of bullshait-id like to use another word but im sure id get banned-the
> exact opposite was told-if anything went bad they would bail you out-were any other stormers told by this mob you could end up losing the house???
> gee this makes me so so mad-they siad they woulld look after you-there is NOTHING to worry about-its all in hand-what about the CB freaking A-they changed the policy of advising margining calls in 2003-was anybody told?-come on mr megabucks norris show some b*lls on this-id like to get mr norris and mr c in front of judge judy on one of her bad attitude days and rip into both of them and make them come back with some real answers-not the waffle we heard at the enquiry from mr c and not the ducking and weaving we heard from the CB freaking A. im not a smart ar*e shinny bum i real worker- how about some justice-end of weekly rant-!!!!!!!




That was no rant mate.

A good summary.

Hang in mate, your day is coming.

gg


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## DocK (5 September 2009)

Harleyquin said:


> Thanks Bunyip I've read the posts you've recommended and the book is on my next shopping list.  Can't thank you enough.  As I find useful info on this site I'm putting it all in one document as a future reference.




I just picked up a copy I'd ordered from my local library - I'm expecting big things after the reviews it's been getting



Monario said:


> bunyip said:
> 
> 
> > Real estate.....a bit of common sense and a few bob to get you started are all you need here. Residential real estate in growth areas will increase in value faster than the rate of inflation, and rentals will go up accordingly. Many people have built impressive property portfolios by putting deposits on houses in growth areas, borrowing the balance, and letting their tenants and the tax man meet most of the loan commitments. The amount of money that comes out of your pocket every month can be surprisingly small if you adopt this approach to property investment.
> ...




Sometimes I think the only good decision we made when it came to all things storm, was to ignore their advice to sell the factory owned by our smsf and put the money into the market.  We bought the factory about 5 years ago and our business rents it from our smsf - by far the best financial decision we've ever made.  If I ever have enough spare cash for a deposit on property investment I think I'd go for commercial property again.  Guess it depends where though.



chrisgee said:


> ...*I'd like to get mr norris and mr c in front of judge judy on one of her bad attitude days and rip into both of them and make them come back with some real answers-not the waffle we heard at the enquiry from mr c and not the ducking and weaving we heard from the CB freaking A.* im not a smart ar*e shinny bum i real worker- how about some justice-end of weekly rant-!!!!!!!




What a very excellent idea chrisgee - would rate its backside off!


----------



## Harleyquin (6 September 2009)

DocK said:


> I just picked up a copy I'd ordered from my local library - I'm expecting big things after the reviews it's been getting
> 
> Sometimes I think the only good decision we made when it came to all things storm, was to ignore their advice to sell the factory owned by our smsf and put the money into the market.  We bought the factory about 5 years ago and our business rents it from our smsf - by far the best financial decision we've ever made.  If I ever have enough spare cash for a deposit on property investment I think I'd go for commercial property again.  Guess it depends where though.
> 
> What a very excellent idea chrisgee - would rate its backside off!




I agree with you Chrisgee.  It looks like the inquiry is pressing the CBA for more answers.  We are all getting extremely tired of the storm issue which should never have been allowed to reach this point.  Many of us have spent the last six to eight months trying desperately to try and work out exactly where it all went wrong.  

Let's hope the inquiry can find out exactly what did happen.  In our case we thought we were going to a decent financial planner and were not aware that we had to understand and monitor everything, thought that's what we were paying them for -OK we made a mistake. Now all we want to know is 'Exactly why did it go so horribly wrong and who is to blame for destroying us financially and emotionally.'


----------



## Monario (6 September 2009)

Harleyquin said:


> I agree with you Chrisgee.  It looks like the inquiry is pressing the CBA for more answers.  We are all getting extremely tired of the storm issue which should never have been allowed to reach this point.  Many of us have spent the last six to eight months trying desperately to try and work out exactly where it all went wrong.
> 
> Let's hope the inquiry can find out exactly what did happen.  In our case we thought we were going to a decent financial planner and were not aware that we had to understand and monitor everything, thought that's what we were paying them for -OK we made a mistake. Now all we want to know is 'Exactly why did it go so horribly wrong and who is to blame for destroying us financially and emotionally.'




Yes Halrey. we are all wondering the same, Many people in the public, and here on ASF have the view that WE are the ones responsible, and although I do feel some responsibility for letting it go so far, I definately do not feel as though we are at the top of the food chain in blame on this one...

As you stated, and everyone knows, we were paying top dollar to have them manage our investment, and on many occasions, the words, DONT WORRY we know best and that is why you are paying for us to look after your... blah blah... you know how it goes...

So with that I say, if FP's can absolve themselves of all responsibility when things go t1ts up, than i think governments should have a look if this form of business should be allowed to continue..

And as I have said before, if it is, I will be off to get my FP licence...


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## Joe Blow (6 September 2009)

Ladies and gentlemen, I am urging you all to please be very careful when using the QUOTE tags. Some posting in this thread have been messing them up of late and in some instances it looks like they are attributing the words of one poster to another. This is something I do not wish to occur for obvious reasons.

If you do not understand how the QUOTE tags work please read this thread: https://www.aussiestockforums.com/forums/showthread.php?t=2737

It is actually very simple and to ensure that you get it right, please consider using the 'Preview Post' button (next to 'Submit Reply') before submitting your post, so you can review it thoroughly first. Please be aware that an 'Edit' button appears on your post for 20 minutes after you do submit it, so there really is no excuse for not ensuring that your post is formatted correctly.


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## Garpal Gumnut (6 September 2009)

Harleyquin said:


> I agree with you Chrisgee.  It looks like the inquiry is pressing the CBA for more answers.  We are all getting extremely tired of the storm issue which should never have been allowed to reach this point.  Many of us have spent the last six to eight months trying desperately to try and work out exactly where it all went wrong.
> 
> Let's hope the inquiry can find out exactly what did happen.  In our case we thought we were going to a decent financial planner and were not aware that we had to understand and monitor everything, thought that's what we were paying them for -OK we made a mistake. Now all we want to know is 'Exactly why did it go so horribly wrong and who is to blame for destroying us financially and emotionally.'






Monario said:


> Yes Halrey. we are all wondering the same, Many people in the public, and here on ASF have the view that WE are the ones responsible, and although I do feel some responsibility for letting it go so far, I definately do not feel as though we are at the top of the food chain in blame on this one...
> 
> As you stated, and everyone knows, we were paying top dollar to have them manage our investment, and on many occasions, the words, DONT WORRY we know best and that is why you are paying for us to look after your... blah blah... you know how it goes...
> 
> ...




Thanks guys and gals.

My hope would be that FInancial Planners would cease to exist.

I feel financial management should be introduced in primary school and that it should be a required subject for an OP score in high school.

It is just as important as Maths and English.

With some exeptions such as Carey and other shining lights who should cater for rich people playing in a bigger game, the ordinary Jo Blow ( excuse me Joe , not you) should be able to plan his or her investments, super and inflows and outflows as well as any financial planner.

So Bernie Ripoll, I know you read ASF, (our spies are everywhere,) be a different politician and ban the FP manque type old Nat Mutual leeches and educate our youth about finances.

gg


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## maccka (6 September 2009)

Garpal Gumnut said:


> I feel financial management should be introduced in primary school and that it should be a required subject for an OP score in high school.
> 
> It is just as important as Maths and English.




Hmmm - as a teacher I have a real dilemma when people say stuff like this.  I heard it at the inquiry on Thursday and instantly had a very negative reaction to it.  At the same time I understand what people are trying to suggest.

This is why the negative jumps out..
  1 - If many people in the financial industries cannot educate themselves properly (as seems evidenced by the lack of qualifications attached to being a financial advisor) or others (as seems evidenced by the extensive education plan that SF clients thought they were getting) what makes you think that primary and secondary teachers would do better?
  2 - How deeply would you expect a primary or secondary student to learn aspects of financial management?  
  3 - What is currently in the curriculum of our students that you believe should be thrown out in order to fit the financial management curriculum?
  4 - Are you aware of what aspects of finances are already included in the curricula (primary and secondary) around the nation?  You might actually be quite surprised to see what is actually there.  It is not all in maths by the way.
  5 - There are aspects of financial management (eg superannuation) that most students wouldn't learn (even if it was in the curriculum) as it is not relevant enough to their world at the point in time that the learning is occurring.  
  6 - Learning in the 21st century is about life long skills.  (This is a point that non-educators may find challenging and are likely to criticize loudly as they don't have the understanding of current educational philosophies) If too much emphasis on financial knowledge is placed on school curricula we run the risk of teaching our students information that will be obsolete within 2 - 3 years (even less).  Students need to learn how to be flexible with their learning and find answers that are relevant to their context at the time they are learning.  We need to develop our primary and secondary school students as people who recognise that information changes rapidly and learn at all times in their life.

On the other hand...
I definitely see why people want to add it.  A lot of it is about trying to give students some understanding of finances before they leave school.

It was brought up by representatives of the Australian Investors Association in Brisbane on Thursday.  Senator McLucas was very quick to point out why it really is not a valid option.  I would suggest you might like to read the Hansard when it comes out to get your own understanding of what she said.

All too often I hear people use school as the fix-up for society's problems and so have an almost inbuilt cringe mechanism when people suggest putting yet another thing in a very overcrowded curriculum. 

Cheers
Maccka


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## Solly (6 September 2009)

*"Legal tussle over Storm documents"*

"PEOPLE involved in Storm Financial's collapse, including the founder, Emmanuel Cassimatis, may face further action over the collapse of the financial planning group, legal manoeuvring at a parliamentary committee hearing suggested last week.

Mr Cassimatis told the committee he had gathered documents and asked for permission to table them.

Tabling documents before a parliamentary committee means they gain the protection of parliamentary privilege"

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/legal-tussle-over-storm-documents-20090906-fcss.html


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## Julia (6 September 2009)

maccka said:


> Hmmm - as a teacher I have a real dilemma when people say stuff like this.  I heard it at the inquiry on Thursday and instantly had a very negative reaction to it.  At the same time I understand what people are trying to suggest.
> 
> This is why the negative jumps out..
> 1 - If many people in the financial industries cannot educate themselves properly (as seems evidenced by the lack of qualifications attached to being a financial advisor) or others (as seems evidenced by the extensive education plan that SF clients thought they were getting) what makes you think that primary and secondary teachers would do better?
> ...




Top post, Maccka.   The level of financial information offered seems to vary by school.   The high school where I mentor students has basic financial management included in its accounting option but this was a programme designed by the individual teacher and not part of the Qld Education curriculum.  This teacher also arranged for outside people to come in and talk to her students about the sharemarket during the time they played the Sharemarket Game on the ASX

On the other hand, we offered a series of financial management workshops to the same school as part of the Youth Mentoring Programme and received zilch interest from the school.

As you suggest, the curriculum is already overcrowded, teachers are having to deal with unprecedented behaviour issues amongst students, and I'm quite over hearing people suggest that 'schools should teach A, B, C, and D. etc'
It's about time parents took a bit more of the responsibility that should be regarded theirs rather than the school's.  All too often, however, the parents haven't a clue themselves.


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## cuttlefish (6 September 2009)

Even the most basic of financial education could be taught in schools and would benefit people.  

* Live within your means (spend less than you earn)
* Invest the difference in appreciating assets
* Whereever possible, only use debt to invest in assets that return an income and are likely to appreciate in value.
* Whereever possible, don't go into debt to purchase items that don't generate an income and are likely to depreciate in value
* Appreciate what you have and don't put yourself into debt to buy things that you can't afford and don't need.

There's still a LOT of people that think their first car is their first big investment and think its a good idea to spend a lot of money on their first sofa because if they buy quality the first time around they won't need to buy another one for a long time (I'm serious - there really are people out there that think like this).


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## Harleyquin (6 September 2009)

My hope would be that FInancial Planners would cease to exist.  I feel financial management should be introduced in primary school and that it should be a required subject for an OP score in high school.  It is just as important as Maths and English....and ban the FP manque type old Nat Mutual leeches and educate our youth about finances.gg[/QUOTE said:
			
		

> GG you never said a truer word there.  Financial management, I like that term far better than financial planning.  I would like to see Financial Planning made illegal in this country.  I expect many to disagree with me however I care not.  If financial management - all aspects of investing including the share market- were taught in schools we would have no need for these so called experts who are the only profession that I'm aware of who don't take any professional responsibility of their advice.
> 
> How many of you out there have read some expert or other say -
> 'Go to a licensed financial planner and take their advice'?
> ...


----------



## cuttlefish (6 September 2009)

Harleyquin - there is quite an irony that posters on this forum and other forums feel that, to protect themselves legally, they should refer readers to the fact that they are not financial advisors and to seek 'professional advice' while at the same time knowing full well that a big chunk of 'professional advice' is ordinary to say the least.


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## Harleyquin (6 September 2009)

> Learning in the 21st century is about life long skills.  (This is a point that non-educators may find challenging and are likely to criticize loudly as they don't have the understanding of current educational philosophies) If too much emphasis on financial knowledge is placed on school curricula we run the risk of teaching our students information that will be obsolete within 2 - 3 years (even less).  On the other hand...I definitely see why people want to add it.  A lot of it is about trying to give students some understanding of finances before they leave school.  All too often I hear people use school as the fix-up for society's problems and so have an almost inbuilt cringe mechanism when people suggest putting yet another thing in a very overcrowded curriculum.




Teachers, in this technological age, have been teaching students now for quite some time for jobs which haven't been invented yet.  The basics of the the three R's are still as relevant today as they ever were, today teachers are expected to take on a lot more of the testing and reporting processes than they were a generation ago.  I can appreciate all the points that you have made in your statement.  I know teachers in primary and secondary schools are an extremely dedicated and hard working group and the school curriculum is certainly overcrowded and the teaching profession has changed far more than many realise.  

I just happen to believe that financial management is an extremely important subject / issue and if the basics were taught this would be better than nothing. A lot of it, as you have already stated, is about trying to give students a good basic understanding of finances before they leave school.  If it isn't feasible to include this in the present curriculum then maybe we need to look at how it could be included without taking up a lot of time.  

My suggestion would be for a panel of financial people, teachers and parents to look at coming up with a good reference book which explains everything in simple language and yet covers the important issues, the risks, the types of investments, the need to keep abreast of current issues and the need to educate yourself and how to do it prior to making any important financial decisions.  This way every child is guaranteed to receive the same level of financial education and the teachers would simply be teaching the information in this book.  

It could also be taught that this is a good basic reference book to refer to before deciding what to do in the future and included in that advice would be 'it is to be stressed that it is important to keep up with current information' and the book could be updated say every five years to try and keep the information current.  With a lot of thought this subject could take up only a small amount of time and be an important part of their first year of high school when they are taking most subjects prior to making a choice of which subjects they will take later on.

In this way perhaps the students still receive this important information and is far better than receiving nothing at all.  I am not aware what information students receive at present but there is a definite need for specific financial education.  Students in primary or high school used to and perhaps still do receive sex education which consisted of a couple of sessions but at least they were given the information.

If the suggestion for a good, basic reference book is successful then it could also be recommended for anyone to read before embarking on their financial journey in life...and to read other reference material.  Often at the back of these books other books on the subject can be recommended.  I would certainly agree that there is a need for change and more education.  How we manage to achieve than is open to debate but nothing ventured nothing gained.


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## Harleyquin (6 September 2009)

Rainbow said:


> Maybe you should go back through the posts on the SICAG website then and find the one I'm talking about. It is out there.



Pindibog is right the submissions haven't been posted on the SICAG website they are sent to the relevant people for the parliamentary inquiry and can be viewed by anyone.


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## Grey Ghost (7 September 2009)

"Legal tussle over Storm documents"

Previously posted by  Solly - Quote
"PEOPLE involved in Storm Financial's collapse, including the founder, Emmanuel Cassimatis, may face further action over the collapse of the financial planning group, legal manoeuvring at a parliamentary committee hearing suggested last week.

Mr Cassimatis told the committee he had gathered documents and asked for permission to table them.

Tabling documents before a parliamentary committee means they gain the protection of parliamentary privilege"
End Quote


Manny was being very sneaky and tricky at his recent appearance at the inquiry.  In an earlier post I said that I didn't think he and JC would show up at all.  Well I was half right JC played the sick card and didn't front (like to know exactly just what her ailment was - probably something along the lines of fear of having to answer awkward questions).  As for Manny he was clearly trying to play a get out of jail free card.  I recall that the DOCA he put forward when Storm fell over early this year would have completely let him off the hook.  Fortunately it didn't get off the ground however he was obviously playing a similar game at the inquiry by trying to table some documents and get them under parliamentary privilege which would have helped his cause no end and made it more difficult for any other agency to prosecute him at a later date.  Also his lawyer supposedly 'offered' to help the inquiry but fortunately was told to button up and keep quiet.  No doubt he was going to try and pull some stunt to try and make it  a lot more difficult for anyone to see to it that Mannies day of reckoning comes.  Fortunately Bernie and the crew didn't fall for any of this but it illustrates how sneaky this slippery eel is and if everyone isn't careful he'll slip through any net that is put out for him.
All I can say is that if Manny appears to offer ANY co-operation about anything everyone should be very careful when dealing with him as he is almost certainly running another agenda - ie to get himself out of any potential day of reckoning.

PS sorry about the quote as it had a link in it and I haven't had 5 posts yet I had some trouble copying it.  I'll try and do better next time.


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## Solly (7 September 2009)

*"Storm did not act on margin calls: CBA"*

"Storm should have informed clients"

More from Wouter Klijn in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7336.htm


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## Solly (7 September 2009)

*"More Storm action for BoQ"*

"Bank of Queensland is facing a second writ from a former Storm Financial investor as the bank stands firm against a push for a negotiated settlement on behalf of clients who borrowed to invest in Storm products."

Read more by Duncan Hughes in The Australian Financial Review of Monday, 07 September 2009.


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## Solly (7 September 2009)

Solly said:


> *"Legal tussle over Storm documents"*
> 
> "PEOPLE involved in Storm Financial's collapse, including the founder, Emmanuel Cassimatis, may face further action over the collapse of the financial planning group, legal manoeuvring at a parliamentary committee hearing suggested last week.
> 
> ...




*"Storm can't clear parliamentary committee"*

_Another version from Stuart with an interesting pic from Glenn Hunt_
(I reckon I predict a sardonic comment from gg)

http://business.theage.com.au/business/storm-cant-clear-parliamentary-committee-20090906-fct8.html


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## Harleyquin (7 September 2009)

Grey Ghost said:


> Manny was being very sneaky and tricky at his recent appearance at the inquiry.  In an earlier post I said that I didn't think he and JC would show up at all.  Well I was half right JC played the sick card...No doubt he was going to try and pull some stunt to try and make it  a lot more difficult for anyone to see to it that Mannies day of reckoning comes.  Fortunately Bernie and the crew didn't fall for any of this but it illustrates how sneaky this slippery eel is and if everyone isn't careful he'll slip through any net that is put out for him.  All I can say is that if Manny appears to offer ANY co-operation about anything everyone should be very careful when dealing with him as he is almost certainly running another agenda - ie to get himself out of any potential day of reckoning.




Grey Ghost you've hit the nail well and truly on the head with your obs of EC and JC.  Fortunately the former advisors realise it now.  Unfortunately it is too late to save our investments but we all want to see this animal in a cage so that he can't repeat these offences, and many believe that his partner in crime JC isn't as innocent as she would like any of us to believe.  

Whether anyone likes it or not there are former storm advisors out there who were duped by this man and are now doing everything they can to help or rectify the present situation and I for one appreciate what help they are able to give.  Their information will hopefully help our efforts to convict those responsible and help us to receive some form of compensation as we certainly need all the help they can give us.  I know there are many of you who can't forgive your advisor and we struggle to do that also.  We all realise that they should have been in a position to know better.

Manny doesn't seem to realise that his strategy was far too aggressive for those of us who wanted a safer investment and he made it impossible for our advisors to do that.  I cannot forgive him for that.  The banks are financially educated to realise this also, but realised very early on that by 'attaching' themselves like leeches to this man, that there was big money to be made, and they made it and would be continuing to make it if the GFC hadn't occurred.  The advisors always believed that storm central would protect us in the event of a downturn, they didn't, and the banks were from what I'm finding out very much a part of this.

I know I'm going over old ground here but I cannot understand why they placed margin calls with their other clients at a safe level and their investments are still safe.  They let storm clients blow out of all proportion until it was far far too late.  Manny no doubt would have contributed to this but the bank has the final say on when this should occur and no storm client was ever advised until it was too late.  I want the banks to explain why they did this as it was this very aspect that killed us and the company.  

Manny had billions of his clients money invested, was responsible for it and should have been watching what was happening in the rest of the world and been prepared for any inevitability.  From all accounts he wasn't prepared.  The global financial crisis didn't occur overnight, the signs were there two years before that a drop was possible.  Had the company adopted the policy which convinced us that they knew what they were doing, ie selling high and buying low, then we would have been well placed for a recovery.  

Other investors on this forum knew that something was happening and prepared for it.  Storm had the resources to employ the best and didn't do it.  If anyone is greedy it isn't the investors it's EC's company and the leeches who attached themselves to this company.  This inquiry is now starting to get to the truth of the matter and we are seeing for the first time in Australian history the major banks admitting to their major shortcomings.


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## Farencue (7 September 2009)

maccka said:


> Hmmm - as a teacher I have a real dilemma when people say stuff like this.  I heard it at the inquiry on Thursday and instantly had a very negative reaction to it.  At the same time I understand what people are trying to suggest.
> 
> This is why the negative jumps out..
> 1 - If many people in the financial industries cannot educate themselves properly (as seems evidenced by the lack of qualifications attached to being a financial advisor) or others (as seems evidenced by the extensive education plan that SF clients thought they were getting) what makes you think that primary and secondary teachers would do better?
> ...





Could not agree with you more Maccka.  My teenage son is in his 4th year of working hard at 2 jobs after school and on weekends.  He has saved over 10k as well as contributing $200 per month to a managed fund, which was set up with the first grand he saved.
He did not receive a financial education at school and we, his parents, are definitely not wealthy.  We have given him advice from things we learnt along the way ourselves eg: dont blow all your savings on your first car, save more than you spend, put away a percentage of each pay for savings, compound interest, depreciation, how to spot a conman who only wants your money etc...

It is all a bit of commonsense and research and critical thinking.

I understand people wanting the government to legislate the industry to ensure no financial mistakes are made but you will always get people who dont know the saying "if it is too good to be true then it is" or "no such thing as a free lunch".
It is human nature to want an easy, get rich quick way (and I am not pointing fingers at Stormers) and it is also human nature to want to follow the herd.

I have been conned more than once in my life financially, and the best thing about it is I can pass the education I received the hard way to my kids.  

Critical thinking is the best life skill you can teach kids in my opinion.


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## Harleyquin (7 September 2009)

cuttlefish said:


> Harleyquin - there is quite an irony that posters on this forum and other forums feel that, to protect themselves legally, they should refer readers to the fact that they are not financial advisors and to seek 'professional advice' while at the same time knowing full well that a big chunk of 'professional advice' is ordinary to say the least.



Cuttlefish I hope I'm reading your post correctly.  Do you mean that we are not financial advisors?  I'm a tad confused and not sure exactly what you mean, so I hope I'm answering you correctly?!!

Prior to going to a financial advisor I was under the distinct impression that we were seeing someone who was an expert in the financial field who was going to help us with our financial situation as this is what you read from many of the experts.  After reading the many comments on this forum I understand what you are all saying is correct that in fact *a big chunk of 'professional advice' is ordinary to say the least'*  I was never aware of this before and wish that I had known.  If I had of been we wouldn't have bothered going to a financial planner.  We trusted them far too easily thinking that they knew exactly what we wanted, after filling out our paperwork telling them this, and believed that they would genuinely look after us.  Had either of us realised this, we would have just educated and invested ourselves as I now know many of you do on this forum. Unfortunately we found this out too late as have many others.  Most storm victims will never trust another advisor and many will just put their money in the bank if they ever get enough.  I had no idea this forum existed until a couple of weeks ago so I'm still reading through many of the former posts and if I'm travelling over old ground for many of you I apologise as I haven't finished reading them all yet, just give me a little more time.  

I want to see that statement* 'see a licensed financial planner and take their advice'* banned, it is not good advice for those of us seeking a solution to our financial problems.  Our situation with Storm has proved this statement to be quite untrue, they all need to come with a significant warning, saying 'only use a financial planner at your own risk' or something similar.  Had any of us taken this advice we would all be ok.  I was at a social function on Saturday night and talking about our situation and someone at our table said that they had worked for a financial planner a few years ago and she said 'I went to a financial planner and got a financial plan drawn up but I never let them act on it'  and someone said 'why?' and she said ' I just decided what I agreed with it and I only acted on the parts that I agreed with, it's easy to do, come and see me and you can do it all yourself.'

There were about twelve of us at the same table of a similar age and we were talking about financial advice and most people at the table said 'we'll never have enough money to worry about it.'  I do worry about it but don't know if I can develop the skills that I need to be successful and just as importantly if I've got the time to start all over again.  Someone said to me 'don't worry about going into an old peoples home and going on the pension, we'll all be there.'  One couple at the table had lost their teenage so in a car accident a while back and she said 'just live for today and don't worry about tomorrow none of us know if we are even going to be here and if we are the government can look after us, you'll get cheap doctors and chemists don't worry about any of it, we all pay our taxes and we all work hard just enjoy it while you can.'


----------



## bunyip (7 September 2009)

Garpal Gumnut said:


> Thanks guys and gals.
> 
> 
> 
> ...




Absolutely agree that personal financial management & investment etc should be taught in secondary schools.

Even if it wasn't an OP subject, make it compulsory for one lesson a week - just basic stuff like savings plans, budgets, taxation benefits of borrowing for real estate and shares, taxation implications including tax deductibility of expenses related to investments, the importance of making sure your real estate investments are in growth areas, websites to find information, etc etc.
Most teachers probably have insufficient knowledge to teach such a subject at present, but it's only a matter of making it part of teacher training. In the meantime while teachers themselves are being trained in this subject, maybe the education department could liase with professionals from the real estate, banking  and stockbroking industries to come up with a way of getting investment information into schools.

One thing certain is that something needs to be done to address the current situation where the average 17 - 18 year old leaving school has virtually no investment knowledge and will never get it unless they're fortunate enough to have a curious mind and an ambitious nature that compels them to seek out ways of educating themselves about investment as they go through life.

In secondary school I was compelled to sit through a boring 30 minute lesson each week called 'Music Appreciation'. It was run by a dour music teacher in her mid sixties, and for half an hour each week she attempted to get our class of 15 year old boys interested in Mozart, Beethoven, Bach, and sundry other musical geniuses of yesteryear. 
No wonder we used to give the teacher a hard time by misbehaving during her music class! As 15 year olds we were bored silly by learning about composers of classical music. If we'd had some switched on investment guru showing us what was possible by saving and investing in shares and real estate, I'm sure we would have found it more interesting and beneficial than our music appreciation class.

I've been educating my four kids in personal investment since they were about 10 years old. The eldest, who will finish her uni degree and join the workforce at the end of this year, has already set her investment and personal wealth goals and has mapped out a plan for achieving them. She knows exactly what she's going to do, and she has the knowledge and the desire to do it. 
Her mentor, me, has no formal qualifications as an investment adviser. 
She's very much in the minority, but every kid could be just like her, with a similar level and knowledge and commitment towards getting ahead financially, if professionals taught them about personal finance management and investment while they were still in school.


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## Rainbow (7 September 2009)

Harleyquin said:


> Pindibog is right the submissions haven't been posted on the SICAG website they are sent to the relevant people for the parliamentary inquiry and can be viewed by anyone.




That's right, but that's not what I said. I'll reiterate... SICAG members were initialy told by SICAG committee not to post individual stories to the Parliamentary Inquiry ...


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## bunyip (7 September 2009)

Monario said:


> Yes Halrey. we are all wondering the same, Many people in the public, and here on ASF have the view that WE are the ones responsible, and although I do feel some responsibility for letting it go so far, I definately do not feel as though we are at the top of the food chain in blame on this one...




Monario
Let's be fair here.....most of the people in this forum who have attributed any blame to you Storm investors have said you must bear _*your share*_ of the responsibility for taking on unsustainable levels of borrowing etc etc.
I don't know of anyone whose put 100% of the blame on you. If anyone has, then they're very much in the minority.
Most of us have the sense to see that Storm, the banks, and the individual investors themselves all played a part in the debacle that resulted from investing through Storm Financial.


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## Judd (7 September 2009)

bunyip said:


> ....but every kid could be just like her...




Hmmm, so you are suggesting that there is a "one size fits all model." Wasn't that what Storm offered?

Also if proper attention had been made in music class during your school years, you may now be a world famous classical musician.  But, despite the quality of the teaching, it does not seem that the necessary interest was there otherwise you would have explored that subject irrespective of the teaching.

I'm a cautious about assuming what one family does or can achieve is applicable to all families.  It doesn't allow for individual personalities and traits.


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## sails (7 September 2009)

Harleyquin said:


> ...I want to see that statement* 'see a licensed financial planner and take their advice'* banned, it is not good advice for those of us seeking a solution to our financial problems...




Harleyquin, I agree with you, but while ever it is illegal to give any sort of financial advice, anybody offering suggestions or simply ideas in the financial area will have to use that statement to cover themselves.  IMO, it's more of a legal disclaimer rather than a recommendation to see a planner.


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## Harleyquin (7 September 2009)

bunyip said:


> Absolutely agree that personal financial management & investment etc should be taught in secondary schools...Even if it wasn't an OP subject, make it compulsory for one lesson a week - just basic stuff ....I've been educating my four kids in personal investment since they were about 10 years old. The eldest, who will finish her uni degree and join the workforce at the end of this year, has already set her investment and personal wealth goals and has mapped out a plan for achieving them. She knows exactly what she's going to do, and she has the knowledge and the desire to do it.




Congratulations Bunyip your children are very lucky that they have a dad who is interested and knows what to do.  I'm doing a lot of reading at the moment but have no idea how to even begin to plan a financial strategy.  I can budget and save but have no idea how to make my money work for me.  Hopefully by the time I finish all this reading I'll develop enough confidence to have a go, if not, I'll just have to go back to putting our money into a term deposit as we have always done before losing everything in the storm.

I agree with everyone who has said that some basic financial advice needs to be incorporated into the present school curriculum.  I personally like the idea of a good reference book but others may have a better idea.  My husband often got 100% for maths at school and I regularly got in the 90% and yet neither of us have any idea where to start financially, we are both hopeless.  We followed the market and could see what was happening last year and we are novices -that's why I cannot understand why this situation is as bad as it is.  We blame ourselves for misplacing our trust.  We have been called greedy and told 'this is all your fault', that hurts so much as we thought we were doing the right thing.


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## DocK (7 September 2009)

Judd said:


> Hmmm, so you are suggesting that there is a "one size fits all model." Wasn't that what Storm offered?
> 
> Also if proper attention had been made in music class during your school years, you may now be a world famous classical musician.  But, despite the quality of the teaching, it does not seem that the necessary interest was there otherwise you would have explored that subject irrespective of the teaching.
> 
> I'm a cautious about assuming what one family does or can achieve is applicable to all families.  It doesn't allow for individual personalities and traits.




Agree that all families are different - Bunyip's children are very lucky to have a mentor who both has some financial knowledge and is willing to share it.  Lots of kids aren't so lucky, and I think the answer lies partly in educating the parents.  Wish I knew how this could effectively be done - a lot of folk simply aren't interested.  Perhaps free community sessions run by industry types (who would all naturally be pushing their own barrows) would at least give interested people an overview of the options?  

I'd love to see kids given more financial instruction at school, but acknowledge that there just isn't time to teach them all they should know.  It is also impossible to make the average teenager interested in a subject they often don't see as relevant to them.  Julia mentioned she got zero interest in a programme she was willing to run - doesn't surprise me really - kids these days are so busy and stressed with so many more extra-curricular activities than most of us had, and more pressure on them for the all important OP (or equivalent).  I'm sure they're quite keen to pay attention to the driving instructor, and the sex ed classes (if they don't know it all already) but something as boring as how to save money and invest wisely just doesn't seem important when you probably won't be earning any real money for years.

I'm sure I'll get shouted down for this - and I know it's viewed as very important by some - but I'd like to see some of the time spent on religious instruction in schools be spent on basic life skills and how to behave with ethics/morals in our rapidly changing society.


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## Farencue (7 September 2009)

Harleyquin
Exactly where have you seen the words "see a financial planner and take their advice" written?
I have seen "see a financial advisor FOR financial advice" written, which is a completely different scenario to "take their advice".

Always, always apply critical thinking to everything you do, whether it is finances or deciding to join a committee.

DocK, my kids go to Catholic schools and "religion" at their schools is actually called "religion and ethics".  They cover many different subjects and discuss the ethics involved eg: female circumcision in some African countries.


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## Julia (7 September 2009)

Harleyquin said:


> There were about twelve of us at the same table of a similar age and we were talking about financial advice and most people at the table said 'we'll never have enough money to worry about it.'



And as long as they take such a view, no, they indeed will never have enough money to 'worry about it'.



> I do worry about it but don't know if I can develop the skills that I need to be successful



Of course you can.  Don't exaggerate the difficulty of learning the basics of sensible investing.



> she said 'just live for today and don't worry about tomorrow none of us know if we are even going to be here and if we are the government can look after us, you'll get cheap doctors and chemists don't worry about any of it, we all pay our taxes and we all work hard just enjoy it while you can.'



I wonder if she will feel quite so cheerful and philosophical when the age pension just doesn't cover quite basic living expenses, when more and more drugs are removed from the PBS, when waiting lists at hospitals blow out even further than they are now, and you stand the risk of dying on a gurney in the hospital corridor.




Judd said:


> Also if proper attention had been made in music class during your school years, you may now be a world famous classical musician.  But, despite the quality of the teaching, it does not seem that the necessary interest was there otherwise you would have explored that subject irrespective of the teaching.



I agree, Judd.   Personally I'd hate to see any attempts to interest young people in classical music dispensed with.
Obviously it's really difficult to devise a curriculum which covers everything we think young people should know about.




> I'm a cautious about assuming what one family does or can achieve is applicable to all families.  It doesn't allow for individual personalities and traits.



Bunyip, you are in the minority in teaching your girls about money management and investment.  I completely agree that you're doing the right thing.  But remember that the number of adults who understand anything about even the most basic investment is minimal, sadly.


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## Mash (7 September 2009)

Rainbow said:


> I've been watching this, as a member of SICAG, and you have raised my suspicions. When we first heard about the Parliamentary Inquiry, SICAG did not want us to post our individual stories - they wanted to put across the one voice and told us not to send in information... else we'd choke it up on non-relevant sob stories. They seem most insistent on pushing the CGI/Commonwealth bandwagon, yet offer little in the way of comment regarding other institutions and their theory as to why we ended up broke too. Maybe now they've heard Manny lie through his teeth, they'll see the light.




Sorry Rainbow...that statement is false..... SICAG was pushing for as many people as possible to lodge submissions and just tell their stories....


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## specialed (7 September 2009)

The comments that attack SICAG and its motives or the role it should play astound me. They, like everyone, are interested in finding out the cause of this nightmare, and in time who is responsible and where the blame lies, be it with the banks, Storm, ASIC. Hopefully this will help to ensure it doesn’t happen again. However, SICAG was originally set up by storm clients to support each other. Many of these retired people are fighting to stop their lives sinking further into despair, if that is possible, with many having already been forced by the bank to sell everything they own. Most have been financially destroyed, and so if going after the CBA and CGI , rather than STORM for financial recompense seems suspicious to you,  try existing under the permanent threat of losing your house, with no prospect of gaining employment because of your age. 

The CBA have admitted problems with their loans, discrepancies in their systems (presumably the accuracy of their market monitoring software). Their submission appears to contain statements that are inaccurate in the least and possibly deliberately dishonest or deceitful at worst.  The CBA has already begun a process of limited compensation, and has already admitted “some” fault. All this and there are still (at least) three investigations into this debacle to be completed.  What more has to happen before some of the contributors to this forum eat humble pie, and admit that these people are victims and that SICAG, whatever its committee make up is should be doing nothing but seeking compensation for it members. Personally I don’t care who is on the committee if the end result is a better payout for those who have lost everything. STORM financial is a dead horse, the CBA took care of that and they have ensured that there is no compensation within that area that can help the victims.

Surely SICAG’s primary role should be to help its members gain some form of financial security from this debacle, and this stage that means the CBA and CGI for their role in this margin call disaster. Nothing else is going to help these people rebuild what’s left of their lives. 

It is the role of the senate inquiry, the ASIC investigation and the inquiry by the liquidators to establish how this happened and who is at fault.  Those contributors who continue with discussions regarding the composition of SICAG,  its “model”, its purpose and all the other rubbish I read shows little in the way of an intelligent understanding of this whole affair. They also seem to have a very juvenile and naÃ¯ve understanding of how people operate and the extent to which companies show scant regard for its customers, not to mention a very naive understanding of the way the media reports much of this.  

Keep up the great work SICAG, and just go for the money !


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## Judd (7 September 2009)

CBA?  Yeah, need a solid whip and kick to the nuts and must correct errors and failings.

Manny.  Pity they have done away with the public stocks.

But Stormers?  Totally blameless are they specialed?  Not even sentient beings capable of cogent thought?  Cannot even tie their own shoelaces?  Drones?  Just saw Manny on telly and thought, Gee here is all my money I'll ever earn plus my house and let's go Yipee!  Despite all the huffing and puffing, it is people who make the decisions and they failed themselves and need to take a degree of responsibility.  Not all certainly but definitely a degree of the blame.  And no one will be able to convince me otherwise.

In the words of my 81 year old mother-in-law. who lives in Mossman, is sharp as a tack and like many other Queenslanders has been following the Storm story with interest, has reported to me of farms lost around Ingham "Dear, dear me such foolish people to bet the house.  Careless."


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## Farencue (7 September 2009)

Specialed, two points you made:

SICAG set up by Storm CLIENTS? Er, I do believe there are ex Storm staff involved or am I wrong on that count?

The naive, unintelligent postings here?
The same could be said for the people who bet their house at the Manny casino and lost.


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## specialed (7 September 2009)

Judd said:


> CBA?  Yeah, need a solid whip and kick to the nuts and must correct errors and failings.
> 
> Manny.  Pity they have done away with the public stocks.
> 
> ...




Its as simple as this.....They were informed (By the CBA and Storm) that if their margin loan LVR went above a certain amount they would recieve a margin call. Simple...It did, they didnt..no chance to save their portfolio..simply wiped out.. I was with storm people when all hell broke loose in September....And the common comment was "we almost got a margin call"......and then suddenly " We never got a margin call....its all gone..everything we have". It is now clear that they were not even able to monitor it themselves as the CBA through CGI couldnt even ensure their information was up to date....

To say these people have not taken a degree of responsibility is to show an ignorance to this whole event and shows that as you say, you are following the events but have obviously not spoken to any storm investors.  These people have shouldered their responsibility for their desicions and the mental wellbeing of many of these people is showing the effects of this. With the greatest repect to your mother in law a margin loan is set up so you are not "betting the house". And thousands of people have recieved margin calls.But not after it blew out, in some cases to 40% above their agreed LVR. I mean please, what was the bank doing that it could move from 80% to 120% before being sold. Oh and what did the bank have to loose when this happened. Nothing. Infact..didnt this happen at a time when the CBA was desperatly trying to shore up its cash reserves ?

Storm investors never had the chance to save their houses as the responsibilty to monitor the LVR lay with someone else...And this responsibility was paid for in heavy commissions and heavy fees to the banks....As I stated earlier, even if they wanted to monitor the information was not current. How would you like to monitor the markets today, buy tomorrow only to find you are buying or selling at last weeks prices. It is difficult for me to see the Storm investors as having much responsibility for what happened when the CBA and storm acted to ensure they could not be responsible for the decision to save their homes....


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## specialed (7 September 2009)

Farencue said:


> Specialed, two points you made:
> 
> SICAG set up by Storm CLIENTS? Er, I do believe there are ex Storm staff involved or am I wrong on that count?
> 
> ...





You are wrong...Maybe you should not just believe all you hear....


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## Ironhalo (7 September 2009)

specialed said:


> You are wrong...Maybe you should not just believe all you hear....




Yeah specialed? So you haven't read the last month or so of forum posts?

If that's not the case, can you explain what the father of Andrew O'Brien (a Storm Redcliffe adviser), Luke Vogel (an ex-Storm Redcliffe employee) are doing on the Storm committee?

And can you also explain why Andrew O'Brien called my brother up in the wake of Storm collapsing and 'volunteered' to take over again as his financial adviser but in a non-Storm capacity (evidently trying to take advantage of his past clients that were spectacularly failed during their time with Storm?) Or why evidence/an Email my brother had that implicated Storm/Manny in knowing full well their clients were in negative equity, was jumped on by the SICAG committee as it 'wasn't going to help their aims?'

Open your eyes, and don't be taken for another fool twice. SICAG is great on the surface, but dig a little deeper and you will find that there may be another agenda. 

And as great as their BBQ's on Sutton's Beach might be, ask yourself one question, why has SICAG not ONCE placed ANY blame on Emmanuel Cassimatis on their website? Exactly.


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## Garpal Gumnut (7 September 2009)

specialed,

What is your relationship to 

1. SICAG
2. SICAG committee members
3. Storm Financial
4. Manny and Julie Cassimatis
5. Ex Financial Advisers of Storm Financial
6. Ex owners of Storm Franchises in Queensland, NSW and Victoria.
7. The financial advising industry.

gg


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## bunyip (7 September 2009)

Julia said:


> Bunyip, you are in the minority in teaching your girls about money management and investment.  I completely agree that you're doing the right thing.  But remember that the number of adults who understand anything about even the most basic investment is minimal, sadly.




Julia

The minimal number of adults with any appreciable amount of investment knowledge to pass on to their children is precisely the reason why I think the basics of saving and investment should be included as part of the school curriculum.
If the average parent lacks investment know-how to pass on to their children, then either we come up with another way of educating young people about how to make money work for them, or we do nothing and allow the present situation to continue - a situation where people end up falling victim to shonky outfits like Storm Financial, all because they lacked simple, basic investment knowledge that would have enabled them to take charge of their own investments.


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## specialed (7 September 2009)

Garpal Gumnut said:


> specialed,
> 
> What is your relationship to
> 
> ...




1. NONE
2. Very close to a founder and have seen first hand how hard they work trying to salvage their own lives while supporting the grief and dispair of others.
3. NONE
4. Would like to meet them in a very dark ally
5. NONE
6. NONE
7. NONE and after seeing this debarcle unfold will not in future...

And Ironhalo...with regards to digging a little deeper, your conspiracy theories are hilarious and when you find out who really shot JFK let me know, or better still wave to me as your ship leaves roswell on your journey home....

Anyone with any understanding of the investors will know that alot of the families of Storm employees were investors, as I'm sure Storm employees were as well. 

And if the email is so crucial...why have I missed it in your submission to the senate...or were you too busy trying to dispell the conspiracy of 9 / 11 that you didn't bother writing one ?


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## specialed (7 September 2009)

Ironhalo said:


> Yeah specialed? So you haven't read the last month or so of forum posts?
> 
> If that's not the case, can you explain what the father of Andrew O'Brien (a Storm Redcliffe adviser), Luke Vogel (an ex-Storm Redcliffe employee) are doing on the Storm committee?
> 
> ...





Why would anyone in their right mind try to blame someone who might ??? have information that would help them when they try to sue a third party. Even someone of average intelligence can work why you would not want to do that....at this stage. The CBA is the only avenue for the storm investors to recoupe some of the money that this has cost them. Let ASIC identify the blame....


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## bunyip (7 September 2009)

Judd said:


> Hmmm, so you are suggesting that there is a "one size fits all model." Wasn't that what Storm offered?
> 
> Also if proper attention had been made in music class during your school years, you may now be a world famous classical musician.  But, despite the quality of the teaching, it does not seem that the necessary interest was there otherwise you would have explored that subject irrespective of the teaching.
> 
> I'm a cautious about assuming what one family does or can achieve is applicable to all families.  It doesn't allow for individual personalities and traits.




Empowering young people with the knowledge to handle their own investments by saving a percentage of each pay packet, and investing in shares and property, is vastly different to the highly risky, heavily geared, 'all your eggs in one basket' approach that was the hallmark of Storm Financial.

As a point of interest, Judd, what strategies, if any, do you suggest for people who wish to take charge of their own investments?


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## Ironhalo (7 September 2009)

Yes ASIC will identify blame, just like they gave Storm a big tick of approval just months before Manny started hoarding money out of the business and stashing it. 

And as for why Mark Weir wouldn't take my brother's evidence (email copy from Colonial), you tell me mate. Perhaps because it showed Manny was just as much as fault as CBA, as he had instructed his staff not to sell anyone.

And have you read my parliamentary submission? It blames three people, myself, Storm and the banks.

Unlike the SICAG model which blames the evil CBA/Colonial and anyone but the Storm model or Manny/Julie's actions.


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## specialed (7 September 2009)

I'm sure I have, but let me know your submission no and I'll re read..


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## cuttlefish (7 September 2009)

> Storm investors never had the chance to save their houses as the responsibilty to monitor the LVR lay with someone else...And this responsibility was paid for in heavy commissions and heavy fees to the banks....As I stated earlier, even if they wanted to monitor the information was not current.




This post to me highlights the lack of understanding by Storm clients of their own and/or Storm's responsibility in this process.  

Who was responsible for monitoring the investments of Storm clients - was it Storm or was it the client? - because it certainly wasn't the bank.


The margin loan was a debt product used by Storm clients to leverage into investments.  The bank provided the debt product - in providing a debt product it doesn't have any responsibility to the recipient of that product for managing the investments made with that debt product. 

The bank is only responsible to its own shareholders to ensure that they minimised the losses from deteriorating assets (i.e.debt products). The best way for CBA to minimise losses is to make a margin call as early as possible - therefore CBA failed in its duty to itself/its shareholders as far as I can see.

It is whoever was meant to be monitoring the investments that failed the Storm investors.

Investors have a responsibility to themselves for monitoring their investments and their debt servicing obligations ... not banks. 

Investors have a responsibility to themselves to ensure they adopt gearing levels that they are comfortable with and only take on risks that they are comfortable with and only take on debt that they can comfortably service.

Banks have a responsibility to their shareholders to increase their assets (i.e. selling debt products) while also monitoring  asset quality and taking action if asset quality deteriorates.   The bank failed its shareholders by not making early margin calls and thus increasing their losses - the bank didn't fail investors - investors failed themselves.

So if the investors were relying on Storm to advise them and relying on Storm to monitor their investments - then Storm failed the investors - not the banks.

Margin calls are a safety net.  Its not a good investor that relies on a bank making a margin call to decide to sell down a portfolio.  Portfolio management by debt default - never heard of that as a succesful investment strategy.  Was that Storms investment model?  Invest as much as you can and only sell down if forced to by a bank making a margin call?  If so thats a terrible investment strategy.


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## Judd (7 September 2009)

bunyip said:


> Empowering young people with the knowledge to handle their own investments by saving a percentage of each pay packet, and investing in shares and property, is vastly different to the highly risky, heavily geared, 'all your eggs in one basket' approach that was the hallmark of Storm Financial.
> 
> As a point of interest, Judd, what strategies, if any, do you suggest for people who wish to take charge of their own investments?




Read.  Simply browse bookshops and the library.  And then make your own way basically ignoring other "Ya gotta do it this way" people.  I may be curious about money and finances but it is neither a passion nor obsession merely a tool.


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## cuttlefish (7 September 2009)

specialed said:


> Why would anyone in their right mind try to blame someone who might ??? have information that would help them when they try to sue a third party. Even someone of average intelligence can work why you would not want to do that....at this stage. The CBA is the only avenue for the storm investors to recoupe some of the money that this has cost them. Let ASIC identify the blame....




So it doesn't really matter who was at fault - all that matters to SICAG is that it gets as much money from the banks as possible, in any way it can?  

I bet a few CBA shareholders would be pretty p*ss*d off at having to take the burden for this just because 'the bank is the only one with any money left'.

Storm pushed investors into irresponsible investment practices.  Storm was knowingly complicit in pushing investors to misrepresent their asset values and incomes.  Storm created the investment model and Storm failed to adequately manage and monitor this highly risky investment strategy.

Storm is the responsible party.

The banks and bank shareholders aren't responsible for cleaning up the mess that Storm made.


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## GumbyLearner (7 September 2009)

cuttlefish said:


> So it doesn't really matter who was at fault - all that matters to SICAG is that it gets as much money from the banks as possible, in any way it can?
> 
> I bet a few CBA shareholders would be pretty p*ss*d off at having to take the burden for this just because 'the bank is the only one with any money left'.
> 
> ...




Oh I don't think it's that unreasonable on CBA or it's holders. They are just as obliged through themselves or agents acting on their behalf to make adequate inquiries into the capacity of repayment to whom they lend and whether it can be paid back. Lenders are subject to laws too you know.  

Just my

DYOR


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## specialed (7 September 2009)

cuttlefish said:


> This post to me highlights the lack of understanding by Storm clients of their own and/or Storm's responsibility in this process.
> 
> Who was responsible for monitoring the investments of Storm clients - was it Storm or was it the client? - because it certainly wasn't the bank.
> 
> ...





Interesting analysis....and certainly food for thought..However the banks certainly minimised the losses to their shareholders...when the margin calls are finally made not only do they get the houses used to secure the loan...they charged a premium breakfee for breaking the loan agreement. Net result to the banks...a nice christmas cash boost when they needed it and bunch of assets in the form of houses which they then "negotiated" to allow the customers to stay in till they die, and then the banks will take them with the capital growth.. 

As a shareholder I am more concerned at what this investigation continues to turn up with respect to the cba, concerned that they needed to issue a mea culpa, concerned at the irregularities in their submission and finally, concerned that the information contained within commsec may also be only "mostly accurate" most of the time.  How many other products have they sold to investors that are not what they seem ????


----------



## specialed (7 September 2009)

GumbyLearner said:


> Oh I don't think it's that unreasonable on CBA or it's holders. They are just as obliged through themselves or agents acting on their behalf to make adequate inquiries into the capacity of repayment to whom they lend and whether it can be paid back. Lenders are subject to laws too you know.
> 
> Just my
> 
> DYOR




The shareholders should be p...off that their bank has risked its share price with dodgy practices...what else will they do that is risky....


----------



## GumbyLearner (7 September 2009)

specialed said:


> Interesting analysis....and certainly food for thought..However the banks certainly minimised the losses to their shareholders...when the margin calls are finally made not only do they get the houses used to secure the loan...they charged a premium breakfee for breaking the loan agreement. Net result to the banks...a nice christmas cash boost when they needed it and bunch of assets in the form of houses which they then "negotiated" to allow the customers to stay in till they die, and then the banks will take them with the capital growth..
> 
> As a shareholder I am more concerned at what this investigation continues to turn up with respect to the cba, concerned that they needed to issue a mea culpa, concerned at the irregularities in their submission and finally, concerned that the information contained within commsec may also be only "mostly accurate" most of the time.  How many other products have they sold to investors that are not what they seem ????




Read the Bris Connections thread, it's full of commsec anomalies.


----------



## bunyip (7 September 2009)

cuttlefish said:


> This post to me highlights the lack of understanding by Storm clients of their own and/or Storm's responsibility in this process.
> 
> Who was responsible for monitoring the investments of Storm clients - was it Storm or was it the client? - because it certainly wasn't the bank.
> 
> ...




Cuttlefish - a very good post.

One particularly relevant point you make is that investors have a responsibility to themselves for monitoring their investments and their debt servicing obligations.

So many people keep harping the point - _*why didn't anyone let me know*_ _*I*_ _*was in margin call?*_ 
The simple fact is that prudence should dictate that investors take defensive action well before they get anywhere near margin call. 
This point appears to have been missed by most Storm investors.


----------



## cuttlefish (7 September 2009)

GumbyLearner said:


> Oh I don't think it's that unreasonable on CBA or it's holders. They are just as obliged through themselves or agents acting on their behalf to make adequate inquiries into the capacity of repayment to whom they lend and whether it can be paid back. Lenders are subject to laws too you know.




I agree that the bank appears to have failed in some of its duties in relation to responsible lending and possibly bears partial responsibility in some of the situations that occurred.  But they certainly weren't the primary cause of the situation that led to people losing their investments and wealth.

What annoys me is that SICAG doesn't appear care about where the responsibility lies - all they care about is getting as much money out of the bank as possible because the banks have the money.


----------



## Landyman (7 September 2009)

Judd said:


> CBA?  Yeah, need a solid whip and kick to the nuts and must correct errors and failings.
> 
> Manny.  Pity they have done away with the public stocks.
> 
> ...




Gee, nanna must be really sharp and well connected. It is a bloody long way between Mossman And Ingham.

Landy


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## GumbyLearner (7 September 2009)

cuttlefish said:


> I agree that the bank appears to have failed in some of its duties in relation to responsible lending and possibly bears partial responsibility in some of the situations that occurred.  But they certainly weren't the primary cause of the situation that led to people losing their investments and wealth.
> 
> What annoys me is that SICAG doesn't appear care about where the responsibility lies - all they care about is getting as much money out of the bank as possible because the banks have the money.




Fair point cuttle.
Of course it's a matter for the courts and the administration of justice.
Isn't that the nature of litigation? Go where the money is?


----------



## bunyip (7 September 2009)

Judd said:


> Read.  Simply browse bookshops and the library.  And then make your own way basically ignoring other "Ya gotta do it this way" people.  I may be curious about money and finances but it is neither a passion nor obsession merely a tool.




Let's be clear about something. 
I've outlined a simple investment strategy that's worked for me and many other people I know. 
I'm not saying _'Ya gotta do it this way'._ I've simply put forward one way of getting started in investment. No doubt there are other ways too.
Whatever strategy is used, I'd suggest that savings and management of personal finances are the building blocks that can put people in a position where they have money to invest.


----------



## Judd (7 September 2009)

Landyman said:


> Gee, nanna must be really sharp and well connected. It is a bloody long way between Mossman And Ingham.
> 
> Landy




She is.


----------



## darkside (7 September 2009)

Landyman said:


> Gee, nanna must be really sharp and well connected. It is a bloody long way between Mossman And Ingham.
> 
> Landy




Well she doesn't have to be a rocket scientist, no offence to "nanna", my family come from Brisbane , know of people that lost houses at the "Club Cassimatis Casino" and they wonder why they bet the house. 

I think good old "nana" has a good old point. I don't think she is too influenced by geography. " Double or nothing Nanna, let it ride!!!!"


----------



## GumbyLearner (7 September 2009)

Landyman said:


> Gee, nanna must be really sharp and well connected. It is a bloody long way between Mossman And Ingham.
> 
> Landy




My Nan told me exactly the same many years ago.


----------



## Harleyquin (7 September 2009)

specialed said:


> The comments that attack SICAG and its motives or the role it should play astound me. They, like everyone, are interested in finding out the cause of this nightmare, and in time who is responsible and where the blame lies, be it with the banks, Storm, ASIC. Hopefully this will help to ensure it doesn’t happen again. However, SICAG was originally set up by storm clients to support each other. Many of these retired people are fighting to stop their lives sinking further into despair, if that is possible, with many having already been forced by the bank to sell everything they own. Most have been financially destroyed, and so if going after the CBA and CGI , rather than STORM for financial recompense seems suspicious to you,  try existing under the permanent threat of losing your house, with no prospect of gaining employment because of your age.
> 
> The CBA have admitted problems with their loans, discrepancies in their systems (presumably the accuracy of their market monitoring software). Their submission appears to contain statements that are inaccurate in the least and possibly deliberately dishonest or deceitful at worst.  The CBA has already begun a process of limited compensation, and has already admitted “some” fault. All this and there are still (at least) three investigations into this debacle to be completed.  What more has to happen before some of the contributors to this forum eat humble pie, and admit that these people are victims and that SICAG, whatever its committee make up is should be doing nothing but seeking compensation for it members. Personally I don’t care who is on the committee if the end result is a better payout for those who have lost everything. STORM financial is a dead horse, the CBA took care of that and they have ensured that there is no compensation within that area that can help the victims.
> 
> ...



Well said and I second that.  Well done to the committee - they are doing a great job and those of us who have joined SICAG in our fight for true justice, appreciate their considerable efforts.  We look up to all of them.  I really appreciate Ron Jelich's contribution to our cause.  There are a lot of other planners who scuttled off into the night never to be seen again but Ron has come forward to help wherever and whenever he can and good on him.  Ron has put in a great submission and none of us know exactly what went on behind the scenes, he was possibly duped as well by the man in charge.  For those of us devastated by this disaster, combining our efforts to fight is far more important than all the little things that you may disagree with - the big picture is what is important here and that is to fight as a united group.  We have been wronged and those wrongs need to be righted.  I feel for the retirees and those close to retirement.  These poor people have been promised a secure future and have lost everything and still in debt.  Depression and thoughts of self harm are rampant amongst many of them.  It's a human tragedy.  All we want to know is how and why did it happen, and who is responsible for such devastation to so many lives.


----------



## maccka (7 September 2009)

Farencue said:


> Specialed, two points you made:
> 
> SICAG set up by Storm CLIENTS? Er, I do believe there are ex Storm staff involved or am I wrong on that count?




With respect Farencue - your statement is in fact incorrect. 

SICAG was established by 3 ex-clients.  Any ex Storm staff that assist the entire membership of nearly 1600 people (not just the committee) came along later.

Cheers
Maccka


----------



## bunyip (7 September 2009)

GumbyLearner said:


> Fair point cuttle.
> Of course it's a matter for the courts and the administration of justice.
> Isn't that the nature of litigation? Go where the money is?




Sure it is.
But my understanding is that SICAG was formed to seek justice for Storm investors.
If that's the case, then rather than focusing their attention only on the people they think they can get money out of, SICAG should be going after _*all *_parties who are guilty of illegal or unscrupulous dealings that contributed to the predicament that Storm investors now find themselves in.


----------



## Judd (7 September 2009)

bunyip said:


> Let's be clear about something.
> I've outlined a simple investment strategy that's worked for me and many other people I know.
> I'm not saying _'Ya gotta do it this way'._ I've simply put forward one way of getting started in investment. No doubt there are other ways too.
> Whatever strategy is used, I'd suggest that savings and management of personal finances are the building blocks that can put people in a position where they have money to invest.




bunyip, I didn't say that you are a _'Ya gotta do it this way'._ person or that is what you are saying.  I simply said I ignore such people.  And that is what I do.

And yes, if people can balance their bank statement and can put $5.00 aside every week from their pay, they have a chance.


----------



## GumbyLearner (7 September 2009)

bunyip said:


> Sure it is.
> But my understanding is that SICAG was formed to seek justice for Storm investors.
> If that's the case, then rather than focusing their attention only on the people they think they can get money out of, SICAG should be going after _*all *_parties who are guilty of illegal or unscrupulous dealings that contributed to the predicament that Storm investors now find themselves in.




Oh I don't disagree with you at all Bunyip. As a matter of principle you are correct. But in reality the course of much commerical litigation focuses on going after liquid defendants. That's just the way it is. I note that you feel certain parties should not be excluded from facing up to their responsibilities in this debacle. 

Anyway, I hope things work out for the people of NQ.

Just my opinion


----------



## Landyman (7 September 2009)

Harleyquin said:


> Well said and I second that.  Well done to the committee - they are doing a great job and those of us who have joined SICAG in our fight for true justice, appreciate their considerable efforts.  We look up to all of them.  I really appreciate Ron Jelich's contribution to our cause.  There are a lot of other planners who scuttled off into the night never to be seen again but Ron has come forward to help wherever and whenever he can and good on him.  Ron has put in a great submission and none of us know exactly what went on behind the scenes, he was possibly duped as well by the man in charge.  For those of us devastated by this disaster, combining our efforts to fight is far more important than all the little things that you may disagree with - the big picture is what is important here and that is to fight as a united group.  We have been wronged and those wrongs need to be righted.  I feel for the retirees and those close to retirement.  These poor people have been promised a secure future and have lost everything and still in debt.  Depression and thoughts of self harm are rampant amongst many of them.  It's a human tragedy.  All we want to know is how and why did it happen, and who is responsible for such devastation to so many lives.




The only reason Ron Jelich has come forward is in the hope of saving his ring gear from the more predatory guests of the Dept of Corrective Services.

Landy


----------



## Judd (7 September 2009)

darkside said:


> " Double or nothing Nanna, let it ride!!!!"




How did you know that she bred Arabs?  Was a fine horsewoman.  Farm born and bred.  She won about $500 on Viewed last year plus she got a bit light headed on champers.


----------



## bunyip (7 September 2009)

Landyman said:


> The only reason Ron Jelich has come forward is in the hope of saving his ring gear from the more predatory guests of the Dept of Corrective Services.
> 
> Landy




I'm inclined to agree.

While I applaud any efforts Jelich is now making to help Storm victims, I definitely don't applaud his promotion of Storm Financial while he was part of the whole shonky outfit. As Storm's main promotions man, he has a hell of a lot to answer for. No thinking person could possibly believe he didn't know he was promoting a highly risky and dodgy Storm investment model that was fatally flawed and was bound to fall apart once the bull market ran out of steam and a significant correction took hold.


----------



## Julia (7 September 2009)

cuttlefish said:


> So it doesn't really matter who was at fault - all that matters to SICAG is that it gets as much money from the banks as possible, in any way it can?
> 
> I bet a few CBA shareholders would be pretty p*ss*d off at having to take the burden for this just because 'the bank is the only one with any money left'.
> 
> ...




Ah Cuttlefish, thank heaven for your realistic summary amongst all the repetitive accusations implying the banks had a responsibility for the validity or otherwise of Storm clients' investment strategies.




Harleyquin said:


> Well said and I second that.  Well done to the committee - they are doing a great job and those of us who have joined SICAG in our fight for true justice, appreciate their considerable efforts.  We look up to all of them.  I really appreciate Ron Jelich's contribution to our cause.  There are a lot of other planners who scuttled off into the night never to be seen again but Ron has come forward to help wherever and whenever he can and good on him.  Ron has put in a great submission and none of us know exactly what went on behind the scenes, he was possibly duped as well by the man in charge.



For goodness sake, Harleyquin, isn't Mr Jelich supposed to be a financial planner?  He would have been able to see the flaws (and that's an understatement) in the Storm Ponzi Scheme, but seemingly went along with it in order to participate in the undoubtedly rich rewards commission-wise.

It really is time to get realistic about some of these people.




> For those of us devastated by this disaster, combining our efforts to fight is far more important than all the little things that you may disagree with - the big picture is what is important here and that is to fight as a united group.  We have been wronged and those wrongs need to be righted.



We may just have a somewhat different view of what constitutes the big picture and where the responsibilities lie.
You keep focusing on 'being wronged'.  How about the CBA shareholders having been wronged by (a) the bank's apparently poorly supervised lending practices, and (b) any compensation deals that may occur?




> I feel for the retirees and those close to retirement.  These poor people have been promised a secure future and have lost everything and still in debt.  Depression and thoughts of self harm are rampant amongst many of them.  It's a human tragedy.  All we want to know is how and why did it happen, and who is responsible for such devastation to so many lives.



If you're unable to have some idea of what happened even now, then you're at risk of it happening all over again, Harleyquin.   
Google 'ponzi scheme' and see how it applies to Storm's strategy of dragging in ever more investors, and increasing the level of debt amongst those already ensnared.   





Landyman said:


> The only reason Ron Jelich has come forward is in the hope of saving his ring gear from the more predatory guests of the Dept of Corrective Services.
> 
> Landy



Sounds like it.   Amazing how a bloke can suddenly find a conscience, huh!




bunyip said:


> I'm inclined to agree.
> 
> While I applaud any efforts Jelich is now making to help Storm victims, I definitely don't applaud his promotion of Storm Financial while he was part of the whole shonky outfit. As Storm's main promotions man, he has a hell of a lot to answer for. No thinking person could possibly believe he didn't know he was promoting a highly risky and dodgy Storm investment model that was fatally flawed and was bound to fall apart once the bull market ran out of steam and a significant correction took hold.



Exactly.


----------



## Ironhalo (7 September 2009)

Specialed, as I continue to say ad nauseum in this thread, SICAG have done some great work, and I am sure that a great many people have taken comfort in the fact that they have been able to gather as a group and talk everything over.

What I, and a fair few people in here absolutely detest, is the amount of ex-Storm employees that had positions of note with the company, who have attached themselves to the SICAG banner. Ron Jelich, for all intents and purposes, can go to hell. I am sure he is a nice man, and I wish him no ill, but the guy was the national promotions manager (or whatever the position was) for a company who when their client's needed them the most, ignored their phone calls and sold themselves out of trouble before leaping off the sinking ship, not to mention the fact that they knowingly and greedily flung vulnerable clients into more debt right at the end, in order to maximise their own commissions and save Manny's ****. 

I know Ron Jelich has done it tough, but the fact remains, that if the GFC didn't happen, he would still be giving out the same crap advice and waxing lyrical about the dangerous Storm model as he was last year, and skimming the commissions off the top. But as my mother's new financial adviser said to her, 'I am sure he is a great guy, but for his role in what he did to you, I don't feel one ounce of sympathy for him.'

Mr Jelich (and including some of the other ex-Stormers who have tried to build new financial planning careers by re-contacting former clients they destroyed) have tarnished the SICAG cause with their presence. Mr Weir would have done well to have distanced SICAG's good support work from these predators. And yes, my family has already been targeted by some of these ex-advisers (cough Andrew O'Brien) who were still trying to claim their cut of money and business, even after they had financially runied them.

Specialed, I have no doubt that some of the committee members have good intentions (being victims themselves, but I really think some of them truly believe the Storm model wasn't to blame, when it bloody well was). Don't be so naive to think that Manny isn't talking honey in one or two of their ears, nor don't think that some of them are only in it to absolve themselves of guilt, or a family member's guilt. Only when SICAG turns its guns on Storm will I shift my opinion of it. I will be overjoyed to stand corrected if they do.

I would hate to see people get screwed over again mate. And as for Cassimatis, his filthy role in all of this is coming out. I know for a FACT that it was him and JC that stopped Storm branches acting on margin calls thinking he could ride it out and rake in the cash, and despite the banks failures, Storm was 60% to blame for all of this.

The sooner people see this, the better.


----------



## Harleyquin (7 September 2009)

Landyman said:


> The only reason Ron Jelich has come forward is in the hope of saving his ring gear from the more predatory guests of the Dept of Corrective Services.
> 
> Landy



I appreciate Ron's efforts in helping all storm victims and think he is doing a great job in supporting all of us.  Nobody has forced him to help it's something he wants to do.  He has been as devastated as the rest of us by this collapse.  Many of the planners believed in this strategy so much that they advised their friends and families to join up.  Lies have certainly been told by EC who has schooled his salesmen well, they all told us the same oily spiel, it's a shame they believed EC and a shame that we all believed the planners.

A member of our family got us to join up because they were so happy with their investment.  We filled out paperwork with storm asking for a low risk conservative approach to any investments and our planner guaranteed us the type of investment we asked for - that was the first fib.  A lot of investors have been successfully using this strategy for as long as investing has been in existence and if monitored correctly can be very successful but it isn't low risk.  Storm advised us not to monitor our investments but to leave it up to their experts. That sounded good to those of us who were investors for the first time. 

The risk only becomes a huge problem when not monitored correctly and when we are given massive loans, and margin loans should never be given to retirees.  From where I'm standing storm central have taken over total control from the planners and have lied and cheated us out of our life savings and failed to monitor their clients investments successfully and the banks, latched onto storm central like big fat leeches and have made sure they have lent far too much money, maybe even under false pretences, to people who never had a hope of affording to service the debt.  I see nothing wrong with going after storm and the banks, they have both failed us and we feel strongly that we have failed ourselves make no mistake about it.  I have kicked myself for almost twelve months now for being so gullible. 

Blame is something we are all doing to ourselves more than any of you realise.  We blame ourselves for trusting, for not looking into this strategy and understanding it more, for agreeing to let them monitor our investment instead of doing it ourselves, for not demanding to be cashed up when they said not to follow the herd, you name it we blame ourselves for it, but at the end of the day we should be able to trust a licensed financial planner and the banks.

I no longer care whether anyone else agrees or disagrees with me, that's my opinion and I know that we did not agree to this financial plan lightly.  We believed what we were told.  Those of you who were too clever to get caught in this big net good on you, we won't be caught again either, but it's been a huge learning curve let me tell you.

My next mission is to learn how to do this for myself and I've been assured that itls not too hard to do.  To monitor my own investment and with a bit of luck and some good advice from others who know what they are doing and are sharing their knowledge with us, we should be ok.  Whatever happens with this parliamentary inquiry I hope they can close the loopholes which allowed this debacle to occur in the first place, find out exactly who is responsible and to give us some restitution where we have been wronged. For the lawyers involved it must be a massive undertaking.  Can any of you imagine the paperwork these people have to sort through. We all need to move on and it's very hard to do while so much in still unresolved.


----------



## bunyip (8 September 2009)

Harleyquin said:


> I see nothing wrong with going after storm and the banks, they have both failed us .






Well then tell that to SICAG, because clearly their idea of 'justice' does not involve going after Storm, the main culprit in this affair.
On the contrary, their website continues to endorse the outrageous Storm fees model.
Sure they're doing some good work in going after the banks, and also by providing a supportive network for Storm victims - many of us have acknowledged that.
But SICAG will continue to draw criticism as long as they avoid moving against Storm, the main culprits.


----------



## cuttlefish (8 September 2009)

Harleyquin said:


> Blame is something we are all doing to ourselves more than any of you realise.  We blame ourselves for trusting, for not looking into this strategy and understanding it more, for agreeing to let them monitor our investment instead of doing it ourselves, for not demanding to be cashed up when they said not to follow the herd, you name it we blame ourselves for it, but at the end of the day we should be able to trust a licensed financial planner and the banks.




For any Storm victims out there that do blame themselves - please don't forget to _forgive_ yourselves as well - and if you feel others have let you down - try to forgive them as well - especially close friends and loved ones. Accepting responsibility for ones part in an event or circumstance, and forgiving oneself or receiving forgiveness from others can be a very powerful step in moving on emotionally from a traumatic experience.


----------



## Harleyquin (8 September 2009)

cuttlefish said:


> I agree that the bank appears to have failed in some of its duties in relation to responsible lending and possibly bears partial responsibility in some of the situations that occurred.  But they certainly weren't the primary cause of the situation that led to people losing their investments and wealth.




Cuttle I would agree with you that storm and their crap advice are the one of the causes of this tragic situation.  Where I disagree with you is the banks ''have failed in some of their duties in responsible lending'', they have already admitted to flaws in their lending practices and they also need to acknowledge their other faults.  Storm offered the advice but the banks supported that advice financially and if that advice was so terrible, which it was, why did the banks knowingly support it?

Does it then follow that if a financial planner says 'ok that's fine we'll just borrow three million dollars for you' that they can?  They shouldn't be able to but they did just that because the banks agreed to lend many storm clients these amounts of money - it was just crazy.  Surely the banks have to lend responsibly otherwise they know they are putting not only their borrowers at risk but those who are bank shareholders as well.

I feel for those who have shares in the banks involved but the banks  are at fault not just because they are the only ones with any money but because they supported storm and their crap advice.  Storm could offer all the crap advice they wanted - the banks all knew it was crap advice, did they care, you bet they didn't they sat back lent the money and enjoyed the profits.  It's time for the banks to stop blaming it all on storm and the investors.  

We, the investors, can now see where our faults lie, we can see where storms faults lie and now it's the banks turn they need to see and acknowledge where their faults lie as well.  We have already paid the price, storm should pay the price and so should the banks.


----------



## GumbyLearner (8 September 2009)

Julia said:


> Ah Cuttlefish, thank heaven for your realistic summary amongst all the repetitive accusations implying the banks had a responsibility for the validity or otherwise of Storm clients' investment strategies.




Nice one Julia

Ever heard of Pyramid Building Society based in Geelong, Victoria.

Well the circumstances here are a little different to say the least. 

Under the Corps Law of Australia BANKS have a responsibility as to who they 
lend money. Have no idea how it works in EnZed, but hey we are all Commonwealth jurisdictions so that should suffice!


----------



## Solly (8 September 2009)

*"Senator at a loss over blame for Storm"*

"More than 400 written submissions and seven public hearings have failed to answer what caused thousands of clients heavy losses in the collapse of Storm Financial, a member of the federal parliamentary inquiry into the company has conceded."

Read more by Duncan Hughes in The Australian Financial Review of Tuesday, 08 September 2009.


----------



## Solly (8 September 2009)

*"Ex-Storm adviser's theory on downfall"*

..believes "that Storm directors decided that the negative equity issue of their clients was getting too hot to handle and pulled back from acting upon the 'switch to cash' letters that their clients had entrusted them with."

More here from Tony Raggatt in the Townsville Bulletin of 2/9/09;

http://www.townsvillebulletin.com.au/article/2009/09/02/76065_business_desk.html


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## Judd (8 September 2009)

Solly said:


> *"Senator at a loss over blame for Storm"*
> 
> "More than 400 written submissions and seven public hearings have failed to answer what caused thousands of clients heavy losses in the collapse of Storm Financial, a member of the federal parliamentary inquiry into the company has conceded."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Tuesday, 08 September 2009.




  Maybe the fact that the market tanked by over 50% and there was a bucket load of debt hanging out there could have had something to do with stormers being cooked.  :microwave

It will take ages, if at all, to get an answer as to why action was not taken to manage the debt and specifically who should have taken that action and not just sit until it was too late.  I don't see any George Washington's on the horizon ready to say "It was me who dun it sir."  Too many lawyers around ready and waiting for that to happen.

And in a few years time when all is forgotten by those not affected, it will all happen again.  Hehe, to overcome that possibly on the front cover of every every financial product should be a picture of a person sitting in the gutter, head in hands, crying ,with the numbers 1929-1939, 1960-64, 1970-73, 1987, 1994, 2001, 2007 -onwards in the background with the warning "This could happen to you!"


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## specialed (8 September 2009)

If I had the banks chasing me everyday for my house, first and foremost I'd be going where the money is. That would be my priority and should be for SICAG. If three investigations, Senate, ASIC and Liquidators cant get to the bottom of who is at fault with their combined resources, (500 million just for the liquidators wasn't it) and the power to compel witnesses and documents, what chance has a volunteer commitee got.  They (SICAG)  need to put all their focus, and the hundreds of hours a week that they are already spending, on ensuring a financial outcome for their members. Only this will help to save their homes and give them back some dignity and some hope. And like anyone else chasing justice and in particular a monetary outcome, they should seek to use what ever resources are available to them in order to obtain that outcome.  What better resource could their be then access to information from those within the companies (banks and Storm) who are at fault. Blame where ever it lies will be attributed at the closure of this process. In the meantime if whistleblowers (whether ex storm, or ex CBA) continue to help in the SICAG cause then great. And to be quite honest if Manny and co are also trying to save their butts I couldn't care less as long as my parents and those of everyone else get some money back Even if the have to live off the pension, at least they can sleep knowing their home is safe from the banks who in many cases appear and by the own confessions have played a large part in this mess yet continue to try to take them....


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## bunyip (8 September 2009)

specialed said:


> If I had the banks chasing me everyday for my house, first and foremost I'd be going where the money is. That would be my priority and should be for SICAG. If three investigations, Senate, ASIC and Liquidators cant get to the bottom of who is at fault with their combined resources, (500 million just for the liquidators wasn't it) and the power to compel witnesses and documents, what chance has a volunteer commitee got.  They (SICAG)  need to put all their focus, and the hundreds of hours a week that they are already spending, on ensuring a financial outcome for their members. Only this will help to save their homes and give them back some dignity and some hope. And like anyone else chasing justice and in particular a monetary outcome, they should seek to use what ever resources are available to them in order to obtain that outcome.  What better resource could their be then access to information from those within the companies (banks and Storm) who are at fault. Blame where ever it lies will be attributed at the closure of this process. In the meantime if whistleblowers (whether ex storm, or ex CBA) continue to help in the SICAG cause then great. And to be quite honest if Manny and co are also trying to save their butts I couldn't care less as long as my parents and those of everyone else get some money back Even if the have to live off the pension, at least they can sleep knowing their home is safe from the banks who in many cases appear and by the own confessions have played a large part in this mess yet continue to try to take them....




Sure, the banks should be brought to account - they were, after all, 'partners in crime', so to speak.
But the main culprit, the unconscionable prick who hatched this grand scheme of deception and money-grabbing, should be brought to account as well - even if there's little chance of getting any financial compensation out of him.
If SICAG have decided, for whatever reason, that it's a better proposition to sool their lawyers on to the banks rather than target Storm itself, I still think that SICAG should, at the very least, try and give Storm as much negative publicity as possible by highlighting all the rotten things they did. 
And at the very least, SICAG should have the decency to remove their endorsement of the Storm fees model from their website.
Most Stormers now realise that 7% up front fees was highway robbery, particularly in view of the quality (or lack of it) of the advice they were given. 
How utterly offensive do you think it must be for these people to see an endorsement of the Storm fees model plastered across the front page of the SICAG website??
How utterly offensive do you think it will be for Storm victims if Cassamatis walks free and continues to live in his Brisbane mansion??
If SICAG want to avoid that outcome - and they should - then they need to bring as much public opinion as possible against Storm.


----------



## Farencue (8 September 2009)

Thankyou for the correction Maccka.

Harleyquin, again I ask you, where have you seen it written that you should "see a financial planner and take their advice"?


----------



## Anastasia (8 September 2009)

Thought I would post an extraction from one of my Storm Statements of Advice where it explains what margin loans are, what a margin call is, and who is responsible for making the call.

_A Margin Loan is a loan that uses securities as assets which can provide collateral. As these assets are liquid and are readily valued, the loan to valuation ratio can be monitored constantly.

This allows your lender to call in amounts of borrowings when the “loan to valuation ratio” is exceeded. This is called a margin call. Protection measures that are put in place and will allow you to use a margin loan are that it is only
recommended when:
· the economy is in the phase of its cycle that is accompanied by a rising sharemarket so that the value of the assets underlying the securities is rising overall. Of course volatility will still mean that there will be downward movements in the market, however the general momentum is up;

· your loan facility will include a buffer so that a margin call is made only when the fall in the asset valuation exceeds a certain amount. The recommended facility exceeds our minimum requirements for the amount of buffer of 5%. It has a buffer of 10%.

· Where practical and especially for larger amounts additional buffer should be included.

· we recommend you maintain cash reserves to meet contingencies such as higher interest rates, loss of income and margin calls.

A margin call would be advised to you by the institution when your loan to valuation ratio exceeds the limit set. Margin calls can also play an important part in signalling when asset prices have gone down and represent good buying.

We recommend that in the event of a margin call, funds be used to purchase more assets that can be used as collateral to bring the loan to valuation ratio back to within allowable limits rather than paying out some of the loan._​


----------



## cuttlefish (8 September 2009)

Anastasia said:


> Thought I would post an extraction from one of my Storm Statements of Advice where it explains what margin loans are, what a margin call is, and who is responsible for making the call.
> 
> _A Margin Loan is a loan that uses securities as assets which can provide collateral. As these assets are liquid and are readily valued, the loan to valuation ratio can be monitored constantly.
> 
> ...




hahahaha - thats a joke right?  Thats not really what the document said is it?


----------



## Julia (8 September 2009)

Harleyquin said:


> The risk only becomes a huge problem when not monitored correctly and when we are given massive loans, and margin loans should never be given to retirees.



No reason at all why 'retirees' should not use margin loans.  Some retirees are more affluent and financially literate than many working people.









Harleyquin said:


> Cuttle I would agree with you that storm and their crap advice are the one of the causes of this tragic situation.  Where I disagree with you is the banks ''have failed in some of their duties in responsible lending'', they have already admitted to flaws in their lending practices and they also need to acknowledge their other faults.  Storm offered the advice but the banks supported that advice financially and if that advice was so terrible, which it was, why did the banks knowingly support it?



It is not the bank's responsibility to vet the validity of Storm's investment model. 

 Yes, it is the bank's responsibility to check the capacity of the borrower to service the loan, but if - as appears has occurred in many cases - Storm inflated the documentation they submitted to the banks, their responsibility in such instances seems to constitute not checking with the client re this documentation.

So the majority of the blame (outside of that due the clients themselves) would appear to be with Storm, and SICAG should be acknowledging that.

In suggesting that the majority of the blame lies with the banks, simply because that is the only obvious source of money at this stage, seems to have its own level of amorality imo.







> I feel for those who have shares in the banks involved but the banks  are at fault not just because they are the only ones with any money but because they supported storm and their crap advice.  Storm could offer all the crap advice they wanted - the banks all knew it was crap advice, did they care, you bet they didn't they sat back lent the money and enjoyed the profits.  It's time for the banks to stop blaming it all on storm and the investors.



As above, it was the bank's job to check the details provided by Storm but it was NOT the bank's job to investigate and/or validate the strategy  Storm offered its clients. 





GumbyLearner said:


> Nice one Julia
> 
> Ever heard of Pyramid Building Society based in Geelong, Victoria.
> 
> ...




See my comments above, Gumby Learner.
Of course the banks have a level of responsibility which the CBA, at least, has acknowledged.  They are not, however, the sole culprits by any means.


----------



## Ironhalo (8 September 2009)

Specialed, I can understand you wanting to focus on the financial compensation rather then criminal blame. 

But letting Manny/Julie off the hook for their role in this mess is like being hit by a drunk driver, but then only concentrating on getting money from his insurance fund because 'we couldn't be bothered taking him to court for DUI or negligent driving'. You wouldn't let a drunk driver get away with it, so why would you do so in this instance?

And that's what the Cassimatis' were, drunk at the wheel. Drunk on arrogance, drunk on greed. For SICAG to have a disclaimer on the front page of their website defending the Storm money-raking fee structure is unbelievable. I suppose it's no surprise when some of the ex-Storm employees close to SICAG's heart are now trying to re-establish the Storm model amongst vulnerable SICAG clients (again, my family has already been contacted by some of these grubs).

If SICAG were 100% committed to 'seeing justice done for their clients' they would be turning their energies to trying to get criminal charges laid against Manny/JC as well as some of the advisers who were changing margin loan applications to read ridiculous levels of income to fuel their profit machine. The lawyers were onto this very early on in the piece, and are more than equipped to take it from here. SICAG doesn't need to fight for financial compensation from the bank, it's been in the works since this happened...and the Banks knew it all along. SICAG would be better off now trying to bring the perpetrator of this to account.

Someone linked an old archived website of 3 or so Storm staff taking Manny for a V8 hotlap...if I remember correctly, some of those people that were so buddy buddy with Manny are now the same ones who are amongst the most vocal in/assocaited with SICAG calling for the Bank's blood.

The banks have blood on their hands over this, I have no doubt. But Manny is equally, if not more so to blame.....and he does deserve justice. The question is: are SICAG going to see justice done, or are they going to abandon the quest once the bank starts paying up; leaving Cassimatis and Co free to slink back to their mansion(s) and off-shore bank accounts?


----------



## Anastasia (8 September 2009)

cuttlefish said:


> hahahaha - thats a joke right?  Thats not really what the document said is it?



I copied it straight off the SOA....girl guides honour!


----------



## cuttlefish (8 September 2009)

Don't worry I believe you Anastasia - I just find it a remarkable statement!

This is a quote from the statement of advice that Anastasia posted:



> _
> · we recommend you maintain cash reserves to meet contingencies such as higher interest rates, loss of income and margin calls.
> 
> A margin call would be advised to you by the institution when your loan to valuation ratio exceeds the limit set. Margin calls can also play an important part in signalling when asset prices have gone down and represent good buying.
> ...




LOOK AT THE LAST PARAGRAPH!  In the event of a margin call - Storm recommends NOT PAYING the margin call.

QED imo.

To paraphrase:

"We recommend that you have a cash buffer as a safety reserve.  In the event that your investments are going down the toilet we recommend you hang onto them and also take the cash out of your safety reserve and throw it down the toilet along with your other investments."

In the event that this investment strategy fails for some bizarre unexplainable reason ... blame the banks not us.


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## Ironhalo (8 September 2009)

My SOA says exactly the same thing.


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## specialed (8 September 2009)

Ironhalo said:


> Specialed, I can understand you wanting to focus on the financial compensation rather then criminal blame.
> 
> But letting Manny/Julie off the hook for their role in this mess is like being hit by a drunk driver, but then only concentrating on getting money from his insurance fund because 'we couldn't be bothered taking him to court for DUI or negligent driving'. You wouldn't let a drunk driver get away with it, so why would you do so in this instance?
> 
> ...




Surely no one would believe that the banks efforts so far are anything more than harm and payout minimisation. Once this part is done with then sure, continue to go after whoever. Which at the same time the three investigations will also be doing. SICAG is a volunteer committee attempting to support investors while also trying to salvage their own lives. Surely Its not SICAG's role to seek criminal charges at this point. Criminal charges will do nothing to help those investors currently living out of caravans on their children’s back yard. Are you for real ! I'm sure they have enough to do already. If ASIC, the senate etc cant work out whether criminal charges should be laid, what chance have a SICAG got.  This has already been to court once and the judge could only make a limited determination. Of course you wouldn’t let a drunk driver get away with it....but first you need to get yourself out of hospital and recover from the injuries you have suffered. For many investors, their focus needs to be on saving themselves before they worry about the criminality of the perpetrators.


----------



## Sir Osisofliver (8 September 2009)

Anastasia said:


> Thought I would post an extraction from one of my Storm Statements of Advice where it explains what margin loans are, what a margin call is, and who is responsible for making the call.
> 
> _A Margin Loan is a loan that uses securities as assets which can provide collateral. As these assets are liquid and are readily valued, the loan to valuation ratio can be monitored constantly.
> 
> ...



_

Sooo based upon this...why did clients have margin loans in December 08?  Mar 08? Yeah I know why....because if Storm had no money in these products...then they don't get a trail. Sheesh 








			· your loan facility will include a buffer so that a margin call is made only when the fall in the asset valuation exceeds a certain amount. The recommended facility exceeds our minimum requirements for the amount of buffer of 5%. It has a buffer of 10%.

· Where practical and especially for larger amounts additional buffer should be included.

· we recommend you maintain cash reserves to meet contingencies such as higher interest rates, loss of income and margin calls.
		
Click to expand...


 See this is what grates my cheese. You have CASH reserves and a Margin Lending Facility?  WTF? So you'll pay a higher interest burden than necessary on your Margin Lending facility (which Storm gets a cut from), Receive a lower rate of interest from your cash product than you are paying on the ML rate (which a) means you're negatively gearing and b) means there is yet another product generating fees for Storm).  And supposedly is meant to keep you safe from margin calls when the market tanks. Were there no alarm bells ringing from this? 








			A margin call would be advised to you by the institution when your loan to valuation ratio exceeds the limit set. *Margin calls can also play an important part in signalling when asset prices have gone down and represent good buying.*

Click to expand...


 Ok just went from small alarm bells to Fire station bells Awwooogah Awwooogah 








			We recommend that in the event of a margin call, funds be used to purchase more assets that can be used as collateral to bring the loan to valuation ratio back to within allowable limits rather than paying out some of the loan.
		
Click to expand...


_​
"Ch-ch BOOM"                UN - BE - LEE - VA - BULL

Where's the smiley catching the falling sword???

Cheers

Sir O


----------



## DocK (8 September 2009)

In my humble opinion, SICAG originated with the sole aim of gaining compensation for its members.  This compensation was most likely to come from the banks, as presumably Cassimatis will have signed a personal guarantee for Storm's debts (I certainly hope this is the case) and will be cleaned out by the bank in due course.  

In my humble opinion, SICAG could not care less who is to blame, but is focussed purely on who can/will pay compensation for their portion of the blame.  I think most of SICAG's members would agree that the majority of the blame lies with Storm, but as there is no monetary value in pursuing E & J etc they are focussed purely on their case against the banks involved at present.  This is their charter, their goal, so it's understandable that they will not wish to focus on anything that may detract from the level of responsibility that can be attributed to the banks.  I can understand their stance, as it is probably the best course of action for them to take in order to acheive their goal - compensation.

Do I agree with it?  Well, I didn't join SICAG because I just can't stomach not laying the blame where I feel it justly lies -  mostly with me, followed by storm, then bank.  But I may indeed benefit in the long run from SICAG's unswerving determination to bring the banks to account for their part in the whole affair - and I do feel just a little hypocritical in that I'll gladly take whatever scaps the bank may send my way.  

While I can appreciate why SICAG have taken the stance that they have, it is my fervent desire that the Cassimatisii be pursued with equal fervour by them once they are done with the resolution process underway with CBA and whatever other banks they can nail down.  Same goes for advisers if it can be proven they were acting contrary to their advice to clients (in my case my adviser was a Cassimatis offspring - I wonder if he blindly followed his father's directions to clients)

As far as whether the banks involved bore responsibility to customers or shareholders, I think they were so involved and entangled in the whole storm process that they ceased to be a third party acting at arm's length.  
Ordinarily I would agree that it is not the bank's responsibility to care whether you are going to use their loan funds to invest wisely or fly to the moon - but in this case they were so enmeshed in the process, and indeed approvals were all but automatic, that the bank's endorsement of storm's strategy was implicit - if not written into their loan approval docs.  They worked hand-in-glove with storm to ramp up borrowings by providing inflated valuations for that express purpose, set up a distinct BSB no for storm borrowings etc.  To apply the same criteria in this case to an individual applying for a loan off their own bat is misplaced imo.  As the old saying goes "If you lie down with dogs, you'll wake up with fleas"!

I'm still itchy:bonk:


----------



## Judd (8 September 2009)

cuttlefish said:


> LOOK AT THE LAST PARAGRAPH!  In the event of a margin call - Storm recommends NOT PAYING the margin call.
> 
> QED imo.
> 
> ...




I've seen a lot of odd things but this is the first time I have seen an attempt to classify a credit on the debit side of the ledger, ie a liability or debt (credit) as an asset (debit).


----------



## Judd (8 September 2009)

specialed said:


> Surely no one would believe that the banks efforts so far are anything more than harm and payout minimisation.




That is your view and a generalised one with no proof.  There is no surety it is a view held by others, including solicitors, parliamentarians and all the Host of Heaven it seems, involved in this saga.


----------



## Julia (8 September 2009)

DocK said:


> .
> They worked hand-in-glove with storm to ramp up borrowings by providing inflated valuations for that express purpose, set up a distinct BSB no for storm borrowings etc.



Do some Stormers actually have documentation proving that *The Bank* inflated valuations?


----------



## Monario (8 September 2009)

bunyip said:


> Monario
> Let's be fair here.....most of the people in this forum who have attributed any blame to you Storm investors have said you must bear _*your share*_ of the responsibility for taking on unsustainable levels of borrowing etc etc.
> I don't know of anyone whose put 100% of the blame on you. If anyone has, then they're very much in the minority.
> Most of us have the sense to see that Storm, the banks, and the individual investors themselves all played a part in the debacle that resulted from investing through Storm Financial.





True bunyip, but there a a few, Trevor S seems to have this opinion!! I was not trying to say that everyone here feels that way, just a few, bad wording on my behalf... My intention was onlt to reitterate where we feel our position in blame is!!


----------



## Monario (8 September 2009)

specialed said:


> STORM financial is a dead horse, the CBA took care of that and they have ensured that there is no compensation within that area that can help the victims.
> 
> !




Dead right, CBA did... I wonder sometimes if CBA shot themsleves in the foot here, if storm was still around, I think that there would have been ways for both clients and CBA to recoup funds... But been the type they appear to be CBA came in swinging both arms while crying poor me!! not thinking of the consequences in whole!!

Perhaps??


----------



## specialed (8 September 2009)

Judd said:


> That is your view and a generalised one with no proof.  There is no surety it is a view held by others, including solicitors, parliamentarians and all the Host of Heaven it seems, involved in this saga.






Are you serious ????? Surely you must work for the banks or be very naive. The banks focus HAS to be their shareholders first and foremost whether we like it or not. Any attempts to resolve this issue must be seen in that light. That is, the minimisation of loss to the bank both in terms of its actual capital (payouts through litigation, protracted or otherwise), and its share price, dividends etc. Didn't I also hear that the CBA has a bonus clause based on public perception performance or the like.  I agree it is certainly my view and a generalised one. Would be happen to be proven wrong and when companies directors start acting on behalf of anyone but their shareholders interests I will be the first the ask them to resign.......

I’ve heard it all now.... an altruistic bank


----------



## bunyip (8 September 2009)

Monario said:


> True bunyip, but there a a few, Trevor S seems to have this opinion!! I was not trying to say that everyone here feels that way, just a few, bad wording on my behalf... My intention was onlt to reitterate where we feel our position in blame is!!




Fair enough.


----------



## chrisgee (8 September 2009)

whats all this about that the blokes from the enquiry cant work out who is to blame-what the hell is going on here ???? i thought it would be clear about who mucked up- if the smart people cant work it out how would the ordinary bloke have a chance???  
blind freddie can see that the wheels fell off through gross mismanagement of peoples money and lives-hearing things like this make me even more determined to get to the bottom of all of this- people are really hurting through all of this-no more time to muck around-everyboddy has got to work together really hard to fast track a fair and positive result- come of guys get cracking- you pollies are working FOR us-we pay your wages-lets see some results- no dragging the chain-get blooddy moving-the is no time  to muck about people are running out of time-not everybody is 20 yrs old--


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## DocK (8 September 2009)

Julia said:


> Do some Stormers actually have documentation proving that *The Bank* inflated valuations?




A direct quote from the CBA's submission to the Senate Enquiry:
"What we’ve learned from Storm

We have discovered that, when it came to providing loans, mostly secured by property, we
failed at times to follow our own policies and lending practices. Additionally, a property
valuation assessment system known as VAS was misused on occasion by some staff with
the effect that loans against some properties were larger than they would otherwise have
been.
In our submission, we detail for Members how some Storm clients became too highly
leveraged as a result of Storm’s advice and, where this happened with our involvement, how
it could occur with little obvious visibility..."

http://www.aph.gov.au/Senate/committee/corporations_ctte/fps/submissions/sub357.pdf

For some reason I can't copy and paste from Levitt Robinson Solicitors (for Cassimatis) submission, but have provided the link and pertinent info can be found on pages 13,14,15
http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub369.pdf


Duncan Hughes in AFR - How CBA Stepped up to Storm Fiancial" 11/6/2009

"The VAS worked overtime in Townsville where its turbocharged valuations were estimated to have helped generate more than $100,000,000 of loan applications in the 2008 financial year - at a time when real propety prices were falling" 

I know my property was revalued using VAS - without me requesting this be done - and I was approached by my adviser to borrow further from CBA based on their revaluation.  Having spoken to a few agents since I'm sure now that the value was inflated - there is no way I could have sold for the price they revalued it to.

And don't bother telling me I should have done some research to double-check the value they came up with - that horse has already bolted!


----------



## Jifromoz (8 September 2009)

DocK said:


> A direct quote from the CBA's submission to the Senate Enquiry:
> "What we’ve learned from Storm
> 
> We have discovered that, when it came to providing loans, mostly secured by property, we
> ...




Garpal, You asked ages ago who wrote Submission 369. I think the answer is in this post.


----------



## Mindstorm (8 September 2009)

Storm clients who are posting here, did you notice the ASIC Notice, copied below?

It appears beneath the message you are about to post.

ASIC Notice(1) You are solely responsible for the accuracy and authenticity of your posts, including any alterations made to posts. Any misleading or deceptive information may result in action being taken against you by ASIC or those acting on such information.
(2) If you own or have some other interest in a security, or you have any connection with a securities issuer that you might benefit from, you must disclose that fact.
(3) If you include hyper-links to other sites, you may be seen as endorsing the material on such sites. It may be advisable for you to warn people accessing other sites that you do not endorse or take responsibility for material in the hyper-linked sites.
(4) It is not permitted for any member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor.


----------



## Iggy_Pop (8 September 2009)

Solly said:


> *"Senator at a loss over blame for Storm"*
> 
> "More than 400 written submissions and seven public hearings *have failed to answer what caused thousands of clients heavy losses in the collapse of Storm Financial,* a member of the federal parliamentary inquiry into the company has conceded."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Tuesday, 08 September 2009.




The answer is simple - Manny's greed. Having read many of the posts and the submissions, it appears when storm started out LVRs were recommended to be around the 50% mark. It seems over the years, house valuations and LVRs all crept up to improve the commissions. The Banks were a part of the valuation rise but storm was the party managing the LVRs. Storm took over managing the margin calls in 2003. With no exit strategy and fingers crossed to get through the market drop, margin calls were required. Unfortunately the impact of this has seen many victims of poor financial management.


----------



## Grey Ghost (8 September 2009)

Iggy_Pop said:


> The answer is simple - Manny's greed. Having read many of the posts and the submissions, it appears when storm started out LVRs were recommended to be around the 50% mark. It seems over the years, house valuations and LVRs all crept up to improve the commissions. The Banks were a part of the valuation rise but storm was the party managing the LVRs. Storm took over managing the margin calls in 2003. With no exit strategy and fingers crossed to get through the market drop, margin calls were required. Unfortunately the impact of this has seen many victims of poor financial management.




That is a brief but very succinct answer which gets right to the point.  They should put you on the inquiry Iggy and save everyone a lot of time and money.


----------



## Julia (8 September 2009)

DocK said:


> A direct quote from the CBA's submission to the Senate Enquiry:
> "What we’ve learned from Storm..........



Thanks, Dock.  As I imagined.

In particular this passage from the CBA's submission:


----------



## Landyman (8 September 2009)

A lot of posts on this thread express concern that Manny and the Mrs will escape "Justice".

Well Manny's octopus spread  right throughout North Queensland, including, Cairns, Babinda, Innisfail, Tully,  Ingham, the Burdekin, Mackay etc.

Any one notice a common  theme here?

OK, I am from  the area and will reveal.  

The majority of the population in  these areas are of mediterranean descent.

These guys have very close family ties and alternative views as to how "Justice" is determined and administered.

Rumour has it that Manny made loans from Storm cash reserves to favoured clients in the lead up to collapse. Wonder who?

But from what I  have heard no where near what is needed to in some instances to "save the farm".

If the actions against the Banks and others who may be able to pay do  not make up the shortfall I think Manny might be wishing he was in the "embrace" of the guests of the Dept of Corrective Services rather than the alternative.

This is not a "conspiracy theory  rant", after 50 years in the north Aussies are in the minority in the 4 branches of the family.

Landy.


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## ngardiner (8 September 2009)

Julia said:


> Thanks, Dock.  As I imagined.
> 
> In particular this passage from the CBA's submission:




Here's the thing: I understand people blaming the banks for selling down customer positions but people have to empathise on one point - it was the bank's money that was being borrowed to fund this, and they had every right to be concerned about their position. Storm could continue to sit on their hands because it was the customer's portfolio and the bank's money eroding, not Storm's. In fact, due to the fee model, Storm would only stand to win from blind optimism and mismanagement as selling down to cash would be equally as disastrous as letting the banks take over and sell off the whole portfolio when the value dropped below allowed LVR.

So whilst the banks should never have let Storm manage margin calls, it's not that simple. Many businesses work on a wholesale basis and it's equivalent to banks allowing mortgage brokers to process documentation knowing full well that these brokers benefit from obtaining the largest possible loan.

How is this managed? Generally, through legislation and legal obligation. I deal with finance brokers often and they understand that they have a liability to act in a lawful manner. They also understand, I'm sure, that they are liable if a customer's details are misrepresented in an act of fraud - not the banks.

So for those who continue to claim that going after the banks is the best strategy, I beg to differ. I think you'll find that the banks are well protected in most cases and I also think you'll find that the wrangling which has occurred to shift the blame onto the banks has now saved the real culprits of this saga from full responsibility.

And the worst part - they'll be back, and you'll shoulder responsibility for that. Just some food for thought.


----------



## ngardiner (8 September 2009)

Landyman said:


> These guys have very close family ties and alternative views as to how "Justice" is determined and administered.




Excellent... we'll just bypass that pesky criminal justice system and the whole concept of guilt and innocence and leave it up to mob rule.

To be honest I prefer this system. People get off too lightly these days...


----------



## bunyip (9 September 2009)

Landyman said:


> A lot of posts on this thread express concern that Manny and the Mrs will escape "Justice".
> 
> Well Manny's octopus spread  right throughout North Queensland, including, Cairns, Babinda, Innisfail, Tully,  Ingham, the Burdekin, Mackay etc.
> 
> ...




Ah yes.....the Italian origins of the far north. 
Some Godfather-style justice, perhaps?....now that really would be 'the perfect Storm'!!


----------



## Solly (9 September 2009)

*"New cloud over Storm deal"*

"Commonwealth Bank of Australia is facing a new round of legal action from former clients of collapsed planner Storm Financial that threatens to disrupt the resolution process now being finalised."

Read more by Duncan Hughes in The Australian Financial Review Wednesday, 09 September 2009.


----------



## Solly (9 September 2009)

*CBA's Storm deal runs into trouble; report*

"A group of disgruntled investors, represented by human rights lawyer and former judge Ron Merkel, have attacked the bank's deal with law firm Slater & Gordon saying it will not fully cover margin loans, the paper [AFR] said."

The group is led by solicitor Stewart Levitt.

More here in Business Speculator;

http://www.businessspectator.com.au/bs.nsf/Article/CBAs-Storm-deal-runs-into-trouble-report-pd20090909-VPQNC


----------



## Quincy (9 September 2009)

Solly said:


> *"Senator at a loss over blame for Storm"*
> 
> "More than 400 written submissions and seven public hearings have failed to answer what caused thousands of clients heavy losses in the collapse of Storm Financial, a member of the federal parliamentary inquiry into the company has conceded."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Tuesday, 08 September 2009.




Here is the article : - 
	

		
			
		

		
	

View attachment AFR - 080909.pdf


----------



## Solly (9 September 2009)

ngardiner said:


> Excellent... we'll just bypass that pesky criminal justice system and the whole concept of guilt and innocence and leave it up to mob rule.
> 
> To be honest I prefer this system. People get off too lightly these days...




Our Courts and legal system may not be perfect but are far, far superior to the alternative. 

I counsel against 'mobile vulgus'.


----------



## Jifromoz (9 September 2009)

DocK said:


> leveraged as a result of Storm’s advice and, where this happened with our involvement, how
> it could occur with little obvious visibility..."
> 
> For some reason I can't copy and paste from Levitt Robinson Solicitors (for Cassimatis) submission, but have provided the link and pertinent info can be found on pages 13,14,15
> http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub369.pdf






Solly said:


> *CBA's Storm deal runs into trouble; report*
> 
> "A group of disgruntled investors, represented by human rights lawyer and former judge Ron Merkel, have attacked the bank's deal with law firm Slater & Gordon saying it will not fully cover margin loans, the paper [AFR] said."
> 
> ...




Garpal, Solly...anyone... is there a common denominator here


----------



## cuttlefish (9 September 2009)

Solly said:


> Our Courts and legal system may not be perfect but are far, far superior to the alternative.
> 
> I counsel against 'mobile vulgus'.




hear hear


----------



## Farencue (9 September 2009)

Very interesting to read the transcript of the hearing conducted in Cairns on September 1st featuring Mr Dalle Court.

Chrisgee, I can assure you that the truth is coming out at these hearings.
Things arent looking good for the Storm advisors thats for sure.
It appears that blaming the banks is not the best strategy for these so called advisors to use.


----------



## Farencue (9 September 2009)

I see Cassimatis' lawyers are trying to blame the evil banks through the use of their valuation system (in the case of CBA) by saying bank valuations went up while property proces were falling in certain areas.  
In my personal experience when I have bought property with a bank loan, valuations are done on today's cost of the building and land values as determined by the state government.

My house I currently live in has been valued by my bank just recently. 
What it would cost to replace plus the land value is valued way above what anyone would pay for it at the moment, because the real estate market where I live at the moment is as dead as a dodo.

What the real estate industry cooks up as a valuation, or what people are prepared to pay in a certain area at any given time has nothing to do with a bank valuation.

Obfuscation at it's finest from those presumably engaged by the Cassimatis crew.


----------



## Julia (9 September 2009)

ngardiner said:


> Here's the thing: I understand people blaming the banks for selling down customer positions but people have to empathise on one point - it was the bank's money that was being borrowed to fund this, and they had every right to be concerned about their position. Storm could continue to sit on their hands because it was the customer's portfolio and the bank's money eroding, not Storm's. In fact, due to the fee model, Storm would only stand to win from blind optimism and mismanagement as selling down to cash would be equally as disastrous as letting the banks take over and sell off the whole portfolio when the value dropped below allowed LVR.
> 
> So whilst the banks should never have let Storm manage margin calls, it's not that simple. Many businesses work on a wholesale basis and it's equivalent to banks allowing mortgage brokers to process documentation knowing full well that these brokers benefit from obtaining the largest possible loan.
> 
> ...



Top post.  I agree entirely.



Quincy said:


> Here is the article : -
> 
> 
> 
> ...



Thanks for your trouble, Quincy.


----------



## Steve Borden (9 September 2009)

Am hearing that EC and his solicitor hosted a group of former clients last week. 

Legal action pending or simply a catch up?


----------



## Landyman (9 September 2009)

Steve Borden said:


> Am hearing that EC and his solicitor hosted a group of former clients last week.
> 
> Legal action pending or simply a catch up?




Nah, probably a SICAG meeting.

Landy


----------



## Garpal Gumnut (9 September 2009)

Solly said:


> *"New cloud over Storm deal"*
> 
> "Commonwealth Bank of Australia is facing a new round of legal action from former clients of collapsed planner Storm Financial that threatens to disrupt the resolution process now being finalised."
> 
> Read more by Duncan Hughes in The Australian Financial Review Wednesday, 09 September 2009.






Solly said:


> *CBA's Storm deal runs into trouble; report*
> 
> "A group of disgruntled investors, represented by human rights lawyer and former judge Ron Merkel, have attacked the bank's deal with law firm Slater & Gordon saying it will not fully cover margin loans, the paper [AFR] said."
> 
> ...






Jifromoz said:


> Garpal, Solly...anyone... is there a common denominator here






Farencue said:


> Very interesting to read the transcript of the hearing conducted in Cairns on September 1st featuring Mr Dalle Court.
> 
> Chrisgee, I can assure you that the truth is coming out at these hearings.
> Things arent looking good for the Storm advisors thats for sure.
> It appears that blaming the banks is not the best strategy for these so called advisors to use.






Steve Borden said:


> Am hearing that EC and his solicitor hosted a group of former clients last week.
> 
> Legal action pending or simply a catch up?




This is the point at which the interests of the former Storm Principals, Advisers and Agents will become apparently different from the Storm Victims.

It will be interesting to see what happens over the next six months.

I'm unsure of what the rules of association of SICAG are, but I would imagine that in the new year the nominations for committee membership will be sought.

More ordinary Storm victims and less former advisers would be refreshing.

Let us hope the Storm Victims, the true victims, get their houses, health and future back on track.

As for the insiders, some inside time hopefully beckons.

gg


----------



## Solly (9 September 2009)

Garpal Gumnut said:


> This is the point at which the interests of the former Storm Principals, Advisers and Agents will become apparently different from the Storm Victims.
> 
> It will be interesting to see what happens over the next six months.
> 
> ...





gg, I was with this fine Greek Goddess, Themis, outside the courts today.

I trust her judgement.


----------



## Garpal Gumnut (9 September 2009)

Solly said:


> gg, I was with this fine Greek Goddess, Themis, outside the courts today.
> 
> I trust her judgement.




Agree totally Solly.

This time the Parliament, Judiciary and Police will work as they should, despite all the shenanigans by devious lawyers (not Scattini) to let the guilty sneak free of compensation or time inside.

I doubt if the good med migrants of North Queensland will have to resort to digging up the poly pipes and unwrap the oiled rags as some have suggested in posts above.

Justice will out and the thieving bastards who stole the futures of honest hardworking Australians and who now masquerade as their saviours will pay and serve their time.

gg


----------



## Anastasia (9 September 2009)

Solly said:


> gg, I was with this fine Greek Goddess, Themis, outside the courts today.
> 
> I trust her judgement.



Solly,
This looks like a photo for the "YouPhoto - Post your Pic" thread if that is you in the photo (once again being elusive).


----------



## Solly (10 September 2009)

Anastasia said:


> Solly,
> This looks like a photo for the "YouPhoto - Post your Pic" thread if that is you in the photo (once again being elusive).




Yes Anastasia, Ninjas are elusive and very hard to capture on a digital image array.


----------



## Solly (10 September 2009)

*"Storm Financial victims hit again by bank cash grab"*

"DEVASTATED Storm Financial victims have been stung all over again by the bank at the heart of the disaster.

Up to 10,000 investors who lost millions in the collapse of the Townsville-based advisory firm have since been slugged "adviser service fees" by a company acting on behalf of the Commonwealth Bank."

More by AnthonyMarx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26051539-952,00.html


----------



## Solly (10 September 2009)

*"NAB in the eye of the Storm over loan"*

"THE National Australia Bank has been dragged into the events around the collapse of Townsville-based Storm Financial with allegations that a NAB loan to a Townsville man organised through Storm did not contain correct information."

More by Andrew Fraser in The Australian here;


http://www.theaustralian.news.com.au/business/story/0,28124,26050846-643,00.html


----------



## Solly (10 September 2009)

*"FSU slams CBA over Storm"*

"Rogue branch claim a farce.
Finance Sector Union believes CBA had an obligation to lend responsibly to its clients."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7372.htm


----------



## Solly (10 September 2009)

*"Storm founder and investors hold secret meeting"*

"Emmanuel Cassimatis, founder and ex-chief executive of Storm Financial, is believed to be seeking support from former investors in his collapsed company to bring a legal action against the Commonwealth Bank of Australia."

Read more by Duncan Hughes in The Australian Financial Review of Sept 10, 2009.


----------



## Solly (10 September 2009)

*"Storm damage to force law change"*

"BANKS and other credit providers such as mortgage brokers will be forced to scrutinise more closely clients' ability to repay loans under proposals announced by the Australian Securities and Investments Commission."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/09/10/78281_business.html


----------



## Solly (10 September 2009)

DocK said:


> A direct quote from the CBA's submission to the Senate Enquiry:
> "What we’ve learned from Storm
> 
> We have discovered that, when it came to providing loans, mostly secured by property, we
> ...





DocK there is a supp to sub 369 as well by Stewart Levitt, here it is;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub369a.pdf


----------



## Ironhalo (10 September 2009)

Manny had a meeting with ex-clients eh?

I cannot believe that some of them are still so gullible.


----------



## cuttlefish (10 September 2009)

Ironhalo said:
			
		

> Manny had a meeting with ex-clients eh?
> 
> I cannot believe that some of them are still so gullible.



Ironhalo - it actually say's ex-investors not ex-clients (though its quite possible some were both).  Its also possible some were ex-advisors given that quite a few advisors as I understand it were also investors in Storm.


----------



## SJG1974 (10 September 2009)

Solly said:


> *"Storm founder and investors hold secret meeting"*
> 
> "Emmanuel Cassimatis, founder and ex-chief executive of Storm Financial, is believed to be seeking support from former investors in his collapsed company to bring a legal action against the Commonwealth Bank of Australia."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Sept 10, 2009.




So it seems Manny's crusade for justice rolls on, despite the lack of publicity via his now defunct website.

Surely there aren't still former clients out there who think this guy has and has had their best interests at heart?

If anyone needs a reminder, go to his mansion and see what your 7% up front fees and ongoing commissions for investing in an index fund paid for, while his clients struggle to make ends meet.

Sickening.


----------



## Ironhalo (10 September 2009)

Cheers cuttlefish, still, it makes me sick.

Why the secrecy?


----------



## bunyip (10 September 2009)

Solly said:


> *"NAB in the eye of the Storm over loan"*
> 
> "THE National Australia Bank has been dragged into the events around the collapse of Townsville-based Storm Financial with allegations that a NAB loan to a Townsville man organised through Storm did not contain correct information."
> 
> ...




_The Australian has sighted correspondence between the NAB and a Townsville client of Storm who had an existing loan with Westpac. But after discussions with Storm he chose to have this refinanced and in December 2006 Storm chose to put the loan through NAB.

According to the documents, his application to NAB to increase his loan from $150,000 to $300,000 left out the fact he had a margin loan of almost $270,000 with Colonial Geared Investments, a branch of CBA.

The man had three dependants at the time of the application, but no dependants are noted on the application.

Consequently, he was given a loan with repayments of $2200 a month at a time when his gross income was $3828 a month, leaving him about $200 a week to support a wife and four children.

"In summary, the omission of the margin loan and the failure to include our dependants has enabled me to get a loan I could never afford," a letter to the NAB from the man states.

The man said he had never had direct dealings with the NAB and all contact was through Storm, which supposedly had a better knowledge of his financial dealings.

He admitted that although he had signed the loan application, the content was completed by a Storm adviser with no input from himself._

--------------------------------------------------------------------------

Above is an extract from the story in one of the links provided by Solly.

Here we have yet another example of a person foolishly signing a loan application, then allowing someone else to fill in the content.
Then when he's offered a loan that he has no hope of servicing, he takes it anyway!
It almost beggars belief - what *are* people thinking when they do things like this??


----------



## Steve Borden (10 September 2009)

cuttlefish said:


> Ironhalo - it actually say's ex-investors not ex-clients (though its quite possible some were both).  Its also possible some were ex-advisors given that quite a few advisors as I understand it were also investors in Storm.




They were ex-clients of Storm.


----------



## Solly (10 September 2009)

Steve Borden said:


> They were ex-clients of Storm.




Steve, Duncan Hughes reports in the article, 
that the meeting was attended by, EC, his lawyer Stephen Russell and approx 20 "invited former investors". The meeting set out grounds for legal action and was strictly confidential.


----------



## Steve Borden (10 September 2009)

Solly said:


> Steve, Duncan Hughes reports in the article,
> that the meeting was attended by, EC, his lawyer Stephen Russell and approx 20 "invited former investors". The meeting set out grounds for legal action and was strictly confidential.




Solly

Duncan Hughes uses the term investor, as in investor with Storm, interchangeable with client (of Storm).


----------



## Solly (10 September 2009)

Steve Borden said:


> Solly
> 
> Duncan Hughes uses the term investor, as in investor with Storm, interchangeable with client (of Storm).




Steve, the word 'invited' is interesting.


----------



## Steve Borden (10 September 2009)

Solly said:


> Steve, the word 'invited' is interesting.




Solly

Might be the only ones with any money left?


----------



## DocK (10 September 2009)

I daresay the "invited" were the diehard loyal followers who still won't hear a word against the great messiah!  You can be sure they've been hand-picked in order to further Manny & Julie in their quest against the CBA.


----------



## Solly (10 September 2009)

*"Storm saga continues for Peninsula investors"*

"REDCLIFFE: 
MORE damning information has come to light about the collapse of Storm Financial during the parliamentary inquiry, set to be completed on November 23."

More by Katie Duncan in the Redcliffe and Bayside Herald;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/storm-saga-continues-for-peninsula-investors/


----------



## Solly (10 September 2009)

*"Storm receiver under fire over client treatment"*

"The Storm Investors Consumer Action Group says its members are angry about the way they have been treated by Storm Financial's receiver."

More on the ABC here;

http://www.abc.net.au/news/stories/2009/09/10/2681779.htm


----------



## Monario (10 September 2009)

Solly said:


> *"Storm Financial victims hit again by bank cash grab"*
> 
> "DEVASTATED Storm Financial victims have been stung all over again by the bank at the heart of the disaster.
> 
> ...




My goodness, its hard to belive all that has happened and still more comes out, and continues to go on!!

These Banks, and companies, executives, board sitters etc. need to be taught a lesson!! I just wonder who will have the Kahunas to do it..

If every Aussie drew there funds out of Banks for just 1 week, I would like to see how they would scramble to find out why and make any ammends needed. Once a Bastard always a Bastard!!


----------



## Solly (10 September 2009)

Steve Borden said:


> Solly
> 
> Might be the only ones with any money left?




I believe the quote from EC's website earlier this year was;

"My crusade is to find justice for *all* affected Storm Financial clients. I will not rest in this." EC 2009.

Should I be disappointed ? Or maybe we don't have the full story yet.

Maybe Duncan will get further clarification for us.


----------



## Judd (10 September 2009)

Monario said:


> My goodness, its hard to belive all that has happened and still more comes out, and continues to go on!!
> 
> These Banks, and companies, executives, board sitters etc. need to be taught a lesson!! I just wonder who will have the Kahunas to do it..
> 
> If every Aussie drew there funds out of Banks for just 1 week, I would like to see how they would scramble to find out why and make any ammends needed. Once a Bastard always a Bastard!!




Monario, I can understand your anger but please bear this in mind: Storm is minor, a mere nothing to the majority of Australians.  In a business sense, it is really small fry as well.  Outside of Queensland, and even in that State, they probably don't even know about Storm and care even less.  Nor will they in anyway disadvantage themselves just to see you or any other ex-Storm client receive some sort of retributive justice.


----------



## cuttlefish (10 September 2009)

Monario said:


> If every Aussie drew there funds out of Banks for just 1 week, I would like to see how they would scramble to find out why and make any ammends needed. Once a Bastard always a Bastard!!




Thats called a bank run - if every aussie did it to the major banks then they firstly they wouldn't have the available cash to actually pay everyone out (banks don't have much of your cash at hand, the bulk of it is on loans to people).  In order to meet the cash calls and to maintain adequate capital adequacy ratios they'd have to sell down assets (which means calling in loans - i.e. foreclosures and forced home selldowns even if people are not in default).
This would cause a complete freeze in the economy and lead to another great depression scenario.


----------



## Judd (10 September 2009)

cuttlefish said:


> Thats called a bank run - if every aussie did it to the major banks then they firstly they wouldn't have the available cash to actually pay everyone out (banks don't have much of your cash at hand, the bulk of it is on loans to people).  In order to meet the cash calls and to maintain adequate capital adequacy ratios they'd have to sell down assets (which means calling in loans - i.e. foreclosures and forced home selldowns even if people are not in default).
> This would cause a complete freeze in the economy and lead to another great depression scenario.




Alternatively, besides just closing the doors of the banks, simply by using softwear changes, they wind back your ATM/debit card daily limit to $50.00 and reduce your credit card limit to $500 and call in the rest.


----------



## cuttlefish (10 September 2009)

And for what its worth - its not actually in the banks interest to lend money to people that don't have adequate assets and also can't afford to repay the loans either - thats not good banking businees.  So the banks will look into this situation regardless because they ultimately lose money when somebody borrows more than they can afford to repay.

Who's at fault?

* Are all CBA, BOQ and Maquarie clients bankrupt?
* Are less than 1% of CBA, BOQ and Macquarie clients bankrupt?
* Are any ex Storm investors bankrupt?
* Are greater than 10% of ex-Storm investors bankrupt?
* How many completed and signed loan application forms that contained incorrect or misleading information did the banks receive from non-Storm clients?
* How many completed and signed application forms that contained incorrect or misleading information did the banks receve from Storm clients?
* How many clients of other financial advice firms went broke or lost the majority of their wealth?
* How many clients of other financial advice firms applied for finance using completed loan application forms that contained false or misleading information?

Whats the common denominator?


----------



## Landyman (10 September 2009)

Just  had a squizz at the SICAG page.

gg there is still a lone money spider on patrol.

The main commentary appears to be about the munificence of the CBA towards storm "victims".

CBA is reportedly paying the legal fees of "the solicitors" who are representing the "interests"  of storm "victims".

"The Solicitors", despite being paid by CBA are working only in  the interests of the storm "victims".

Yeaah right.

So SICAG now appears to  be infiltrated by both ex Storm and now CBA operatives.

Hey Stormies do ya recognise a pattern here!!! Have you been here before?

Landy


----------



## Julia (10 September 2009)

bunyip said:


> He admitted that although he had signed the loan application, the content was completed by a Storm adviser with no input from himself.[/I]
> 
> --------------------------------------------------------------------------
> 
> ...



Yes, this story has been repeated over and over and it's the bit I simply can't get over.




Solly said:


> *"Storm receiver under fire over client treatment"*
> 
> "The Storm Investors Consumer Action Group says its members are angry about the way they have been treated by Storm Financial's receiver."
> 
> ...



This refers to Korda Mentha receiving ongoing payments from Storm clients' funds.
For those feeling outraged about this, how do you expect Korda Mentha to be paid for their time and expertise?
i.e. who do you think should pay them?




cuttlefish said:


> Thats called a bank run - if every aussie did it to the major banks then they firstly they wouldn't have the available cash to actually pay everyone out (banks don't have much of your cash at hand, the bulk of it is on loans to people).  In order to meet the cash calls and to maintain adequate capital adequacy ratios they'd have to sell down assets (which means calling in loans - i.e. foreclosures and forced home selldowns even if people are not in default).
> This would cause a complete freeze in the economy and lead to another great depression scenario.



Which is why the government stepped in to guarantee deposits when they did.  And no doubt why they will be reluctant to withdraw said guarantees.



cuttlefish said:


> And for what its worth - its not actually in the banks interest to lend money to people that don't have adequate assets and also can't afford to repay the loans either - thats not good banking businees.  So the banks will look into this situation regardless because they ultimately lose money when somebody borrows more than they can afford to repay.
> 
> Who's at fault?
> 
> ...



Puts it all rather into perspective, Cuttlefish.  Well summarised.


----------



## Solly (11 September 2009)

*Proof Committee Hansard
JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL
SERVICES
Reference: Financial products and services in Australia
THURSDAY, 3 SEPTEMBER 2009
BRISBANE*

Here's the transcript 

http://www.aph.gov.au/hansard/joint/commttee/J12136.pdf


*WITNESSES*
ANDERSON, Mr Graham John, Secretary/Treasurer, Storm Investors Consumer Action Group
CASSIMATIS, Mr Emmanuel, Private capacity 
FORSYTH, Mr Jolyon, President, Australian Investors Association 
HANCOCK, Mr Benjamin William, Partner/Senior Adviser, Stonehouse Wealth Management 
JELICH, Mr Radomir (Ron), Private capacity
KING, Ms Sharron, Private capacity.
McARDLE, Mr Sean, Private capacity
McKENZIE, Mr Scott, Vice-President, Australian Investors Association 
O’BRIEN, Mr Noel Terence, Co-Chairman, Storm Investors Consumer Action Group.
WEIR, Mr Mark Robert, Co-Chairman, Storm Investors Consumer Action Group .


----------



## GumbyLearner (11 September 2009)

Solly said:


> *Proof Committee Hansard
> JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL
> SERVICES
> Reference: Financial products and services in Australia
> ...






http://www.holidayhypermarket.co.uk/Majorca


----------



## Solly (11 September 2009)

*"CBA in nationwide probe of valuation system"*

"Commonwealth Bank of Australia's investigation into the possible misuse of its controversial desk-top property valuation system, known as VAS, was much wider than originally revealed, leaked documents show."

Read more by Duncan Hughes in he Australian Financial Review Friday, 11 September 2009.


----------



## Solly (11 September 2009)

*"Storm clients unaware of risks"*

"THE company which has taken over the client base of Storm Financial has found many of the victims did not understand the risks they were taking.

They also found that while Storm claimed to have a client base of 14,500 people, the reality was a core of only 5000 or so people who were geared up with investment strategies."

More from Tony Raggatt in The Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/09/11/78551_business.html


----------



## sginrocky (11 September 2009)

Long time lurker....first time poster!

Thanks for the link to the transcipt from the JPC solly, it is simply amazing just how deluded one man can be.  After reading some of the responses provided by EC it is clear that he is simply not in touch with the reality of the situation.  Amongst other things, he acknowledges that all other planning firms appear to have been able to manage their clients LVR's and respond to Margin Calls in a timely manner, but for some imaginary reason Storm have been singled out and their communication lines frozen.  What crap.

perhaps setting himself up for an insanity plea?

On a positive note, it would appear that those sitting on the JPC would appear to have a reasonable grasp on the topic at hand.  Judging by some of the questions that have been raised, and taking into account some of the information provided,  I would hope to see EC and a few of his ex Storm pals front up again in the JPC soon....although i am sure that most people would prefer they skip this process and just line them up at the gallows instead!


----------



## Farencue (11 September 2009)

Yes, thanks Solly for the link, I have just finished reading the transcript.

Hi sginrocky - I actually laughed when I read some of the responses put forward by Cassimatis et al when asked direct questions.  Slippery bunch of eels I would say.
Mr Ripoll seems to be doing a good job as Chairman, very entertaining.


----------



## Ironhalo (11 September 2009)

I love his continual:
Mr Cassimatis: 'If you'll just let me refer to these documents/evidence....'
CHAIRMAN: 'No.'


----------



## Garpal Gumnut (11 September 2009)

Solly said:


> *"Storm clients unaware of risks"*
> 
> "THE company which has taken over the client base of Storm Financial has found many of the victims did not understand the risks they were taking.
> 
> ...






sginrocky said:


> Long time lurker....first time poster!
> 
> Thanks for the link to the transcipt from the JPC solly, it is simply amazing just how deluded one man can be.  After reading some of the responses provided by EC it is clear that he is simply not in touch with the reality of the situation.  Amongst other things, he acknowledges that all other planning firms appear to have been able to manage their clients LVR's and respond to Margin Calls in a timely manner, but for some imaginary reason Storm have been singled out and their communication lines frozen.  What crap.
> 
> ...




It would appear that from what has gone down in the evidence to the Inquiry that Manny should have kept to flogging MLC products from an old Ford Cortina around the Tablelands.

Surely with the answers he has given he was not in charge of millions of hardworking battlers money over the last 15 or 20 years.

Sadly he was. 

And the moneyspidercentral aka SICAG.INFO still have not a peep out of themselves about Storm's culpability.

I wonder how many of them were invited in to the Cave for the "Secret Meeting".

gg


----------



## Judd (11 September 2009)

Ironhalo said:


> I love his continual:
> Mr Cassimatis: 'If you'll just let me refer to these documents/evidence....'
> CHAIRMAN: 'No.'




Ah yes.  No matter what one thinks of politicians you can be reasonably sure of two things:

(a) they live and breathe bulldust and usually know it when they hear it; and

(b) they also know of, and receive sound advice on, the process applicable to parliamentary committees.

Possibly the witness in question did not fully appreciate those aspects.

Attempting to table documents in order that they have parliamentary privilege and so unable to be used elsewhere, indeed!


----------



## Garpal Gumnut (11 September 2009)

Bernie and his band are unreal. The best committee for many a year.

gg


----------



## cuttlefish (11 September 2009)

Solly said:
			
		

> Proof Committee Hansard
> JOINT COMMITTEE ON CORPORATIONS AND FINANCIAL
> SERVICES
> Reference: Financial products and services in Australia
> ...



Its an interesting read - I think that the committee asked good questions and that Cassimatis actually cooperated pretty well.  It does give some insight into the technicalities and problems that occured late last year as it unravelled.    

One thing they didn't seem to focus on when questioning Cassimatis was why so many people appeared to have misrepresented incomes/assets and thus much larger loans than they were capable of servicing. To me this is a key reason many people have ended up losing the lot - and as a financial advisor, under the 'know your client' rule it is inexcusable for a financial advice firm to not be reviewing the material submitted or putting in incorrect material for submission for loans. This behaviour would seem to go directly against the 'know your client' requirement.

The questioning also highlighted a lot of other significant problems with the way that Storm was being managed, though they are not atypical of the sorts of problems faced by businesses that grow rapidly - Poor procedures, lack of documentation and process (e.g. no documented procedures with the banks etc. in relation to margin calls,  no formal training processes,  no formal advisor competence review, no formal process for assessing the suitability of a client for the Storm model etc. etc.)  and lack of visibility by management of what is occurring on the ground.

In spite of all of those things, I can see how the failure of the margin calls to occur is a significant factor in the resultant loss of assets and bankruptcies - even for people that were appropriately geared and comfortably capable of servicing their debt levels the failure of the margin calls to occcur in a timely manner can easily have put them underwater.

The issue of handling fund redemptions and knowing the value of the fund units - when the market is moving quickly and a large volume of redemptions are also occuring simultaneously is one I hadn't really been aware of or thought through - but I can see how systems could have been inadequate in this regard given that it was an unusual set of circumstances.

The obvious solution of course is to have moved people out of the funds much earlier rather than at the 11th hour, and rather than relying on margin calls they should have been monitoring the investments proactively (all points I've harped on enough about already).

Thanks for posting the link Solly - its certainly given me a bit more insight into it - and in spite of my criticisms of Storm, I can now also understand a lot of the reason that hostility is directed at the bank and why Cassimatis feels hostility towards them.

In the way it is described by him, it certainly sounds like the bank just wanted to wash its hands of it all to clear their books without regard to the humanity that was being affected by their actions. 

If CGI was responsible for managing the funds but didn't have adequate procedures in place to manage bulk redemptions or to properly monitor the value of fund units then that could have had quite an impact on the severity of the outcome and on the failure to make timely margin calls. If this was the situation then for them to have just pulled the pin without regard for the people impacted seems callous.


----------



## Garpal Gumnut (11 September 2009)

cuttlefish said:


> Its an interesting read - I think that the committee asked good questions and that Cassimatis actually cooperated pretty well.  It does give some insight into the technicalities and problems that occured late last year as it unravelled.
> 
> One thing they didn't seem to focus on when questioning Cassimatis was why so many people appeared to have misrepresented incomes/assets and thus much larger loans than they were capable of servicing. To me this is a key reason many people have ended up losing the lot - and as a financial advisor, under the 'know your client' rule it is inexcusable for a financial advice firm to not be reviewing the material submitted or putting in incorrect material for submission for loans. This behaviour would seem to go directly against the 'know your client' requirement.
> 
> ...




You are selling yourself short as being seafood mate.

This is the nexus of the whole Storm debacle.

It was style over substance and greed over fear.

gg


----------



## Steve Borden (11 September 2009)

If you want a good laugh on a Friday afternoon check out the BoQ submission.


----------



## Garpal Gumnut (11 September 2009)

I should point out that this thread is about to overtake Octaviar MFS Premium Income Fund PIF thread, for number of views, another poor mob of investors who were led by pillocks.

Not that it is a matter about which to boast.

Rather it is opportune to reflect on the great job that Bernie Ripoll and other Financial Inquiry committee members are doing on behalf of unsophisticated investors.

Let us have no more Storms or MFS Premiums.

gg


----------



## Solly (12 September 2009)

*"CommBank to help 3000 Storm investors"*

"ABOUT 3000 Storm Financial customers are likely to receive substantial compensation for their market losses after damning evidence about how Commonwealth Bank's processes failed last year.

Compensation for Storm's margin loan investors, which could run into hundreds of millions of dollars, would effectively ''turn back time'' to a point before the worst of last year's sharemarket collapse."

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/commbank-to-help-3000-storm-investors-20090911-fkri.html


----------



## Solly (12 September 2009)

*"Storm Financial found fast track to degrees"*

"FOR many investors with Storm Financial, it was a source of some comfort that the principals of the North Queensland company and its senior staff all had masters degrees in finance.

But what they weren't told about the course, undertaken through the University of Western Sydney, was that normal entry requirements were waived for Storm personnel.

Furthermore, Storm staff did a maximum of four years' part-time study to get a qualification that normally takes at least five years of full-time study."


More by Andrew Fraser in The Australian here; 

http://www.theaustralian.news.com.au/business/story/0,28124,26061644-5017996,00.html


----------



## Solly (12 September 2009)

*"Commonwealth Bank finally owns up to Storm Financial 'mistakes' *

"MONTHS after the Commonwealth Bank admitted it had "done wrong" to customers who invested with Storm Financial, the Bank of Queensland has conceded it made mistakes and could have done more for its clients who borrowed to join the rush for Storm investment products.

In a submission to the federal parliamentary inquiry into Storm Financial, BoQ shifted in its stance against mounting criticism, saying that although its branches had done nothing "dishonest or illegal", an internal review had found deficiencies in the way it did business."

More by Michael McKenna in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26061643-36418,00.html


----------



## Solly (12 September 2009)

*"Bank of Queensland admissions over Storm Financial"*

"THE Bank of Queensland has for the first time admitted it failed to deal directly with customers who invested with now-defunct Storm Financial.

It has also revealed that it approved loans to clients with few assets or little income, based on the expected returns they would get from Storm."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26060127-3122,00.html


----------



## Solly (12 September 2009)

*"BoQ to review its practices"*

"THE BANK OF QUEENSLAND says it will reform some of its practices in light of the Storm Financial collapse, including abandoning ''low-doc'' loans for retirees. But the bank, which has been accused of granting excessive loans to out-of-pocket Storm investors, has denied it took part in any dishonest or illegal activity linked to the failed financial planning company."

More by Ruth Williams and Eric Johnston in the SMH;

http://business.smh.com.au/business/boq-to-review-its-practices-20090911-fkra.html


----------



## Solly (12 September 2009)

*"BoQ denies dishonesty in Storm debacle"*

"Bank of Queensland chief executive David Liddy yesterday declared his bank had done nothing dishonest or illegal in its involvement with collapsed planner Storm Financial but left open the possibility of major changes to its internal procedures."

Read more by Duncan Hughes in The Australian Financial Review of Saturday, 12 September 2009


----------



## Solly (12 September 2009)

*"Some fall a long way after collapse"*

"SYDNEYSIDERS caught up in the collapse of Storm Financial have found themselves alone, vulnerable and nearly penniless in battles with banks that are admitting no wrong.

Ian Jones, 65, a retiree who worked in middle management with Telstra, lives in a two-bedroom unit in Bexley. His unit is now under threat after his disastrous brush with Storm.

''I have just been decimated. I couldn't talk about it for weeks, I would burst into tears,'' Mr Jones said. ''It just sort of paralyses you, your mind just closed off.'' "

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/some-fall-a-long-way-after-collapse-20090911-fkrl.html


----------



## Garpal Gumnut (12 September 2009)

Solly said:


> *"Storm Financial found fast track to degrees"*
> 
> "FOR many investors with Storm Financial, it was a source of some comfort that the principals of the North Queensland company and its senior staff all had masters degrees in finance.
> 
> ...




Now why doesn't that surprise me.

You can put lipstick on a pig, but its still a pig.

At least Storm went **** up before Manny could establish a university to give out dodgy degrees to every Financial Planner and insurance salesman in Australia.

gg


----------



## Solly (12 September 2009)

Garpal Gumnut said:


> It would appear that from what has gone down in the evidence to the Inquiry that Manny should have kept to flogging MLC products from an old Ford Cortina around the Tablelands.
> 
> Surely with the answers he has given he was not in charge of millions of hardworking battlers money over the last 15 or 20 years.
> 
> ...




gg, I had a lunchtime chat with a Stormer friend yesterday, we discussed Duncan's article in the Fin Review about the reported secret meeting.

He was a bit perplexed about the article and why this action was being taken with a select few. This is a Stormer who months earlier told me that there is nothing to worry about as EC will fix everything. This was just before Storm Air was heading past mach 1 with a little too much nose up, hit stall attitude and the mighty clear air GFC tore the wings from the roots.

I must admit he's looking pretty grey and worn down, waiting for any glimer of hope the banks and others can do to extradite him from this quagmire. He recalled the interest he paid the banks and the fees he paid Storm. To me, these were quite substantial amounts and he said they sure made some money out of him. He is now pushing it daily to just feed the family and exist but reckons he's so lucky to be able to just hold on to his house.

He's lost his trust in many people, banking institutions, regulators and politicians. I'd say he's always lived a modest lifestyle, worked hard all his life and put the family first above everything. 

He asked me what he had done wrong to deserve where he is at the moment. What do you say when some one you have known for most of your adult life looks you straight in the eyes and asks that question. 

Do you say, "It was your fault and you should have kept a closer eye on things." or " You should have known it was too good to be true, you should known better".

I couldn't answer that question, I shook my head and said I honestly don't know.

There are two people who the know the real story, I look forward to the day where Sir Ralph and Capt'n Manny lay all cards on the table so the root cause of this whole event is visible for all to see. Maybe they will take up this challenge, just maybe.


----------



## Judd (12 September 2009)

It is possible that any review the CBA is undertaking in response to Storm may have wider implications than a number realise.  Whatever one may think of Ralph Norris he is not stupid and he probably has the CBA board on his back as well (Has anyone noticed that Dr John Schubert has so far been silent in the matter?)

A review of any lending practices in regard to Storm leads to even further questions.  For example, if CBA considered that there was inappropriate use of its VAS in Townsville, it leads to the logical question of what is happening at other CBA branches?  And that is only one issue.  There are probably a myriad of others.  Aside from any compensation for ex-Storm clients, I will be watching with interest for the overall outcomes.


----------



## Steve Borden (12 September 2009)

Judd said:


> It is possible that any review the CBA is undertaking in response to Storm may have wider implications than a number realise.  Whatever one may think of Ralph Norris he is not stupid and he probably has the CBA board on his back as well (Has anyone noticed that Dr John Schubert has so far been silent in the matter?)
> 
> A review of any lending practices in regard to Storm leads to even further questions.  For example, if CBA considered that there was inappropriate use of its VAS in Townsville, it leads to the logical question of what is happening at other CBA branches?  And that is only one issue.  There are probably a myriad of others.  Aside from any compensation for ex-Storm clients, I will be watching with interest for the overall outcomes.




Judd

The CBA also significantly changed their policy with regard to the treatment of investment income yesterday, so much so in one instance I have seen under the old policy the client 'earned' $62k while under the new policy the assessed income is $9k.

Under the new policy none of the self-funded retirees would have received a home loan from the CBA.


----------



## Quincy (12 September 2009)

Solly said:


> *"BoQ denies dishonesty in Storm debacle"*
> 
> "Bank of Queensland chief executive David Liddy yesterday declared his bank had done nothing dishonest or illegal in its involvement with collapsed planner Storm Financial but left open the possibility of major changes to its internal procedures."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Saturday, 12 September 2009





Here is the article : - 
	

		
			
		

		
	

View attachment AFR - 12-13 SEP 2009.pdf


----------



## Julia (12 September 2009)

Solly said:


> He's lost his trust in many people, banking institutions, regulators and politicians. I'd say he's always lived a modest lifestyle, worked hard all his life and put the family first above everything.



To lose trust in all such institutions doesn't seem altogether realistic.



> He asked me what he had done wrong to deserve where he is at the moment. What do you say when some one you have known for most of your adult life looks you straight in the eyes and asks that question.
> 
> Do you say, "It was your fault and you should have kept a closer eye on things." or " You should have known it was too good to be true, you should known better".
> 
> I couldn't answer that question, I shook my head and said I honestly don't know.



Wasn't that rather disingenuous of you, Solly?  Of course you wouldn't have needed to respond to him in such pejorative terms, as you have suggested above,  but wouldn't it have been more helpful for his future to just explain where he did in fact go wrong?

 e.g. the multi layered borrowing on borrowing which few Stormers appear to have understood.

Yes, of course the banks appear to have been guilty of shonky behaviour, but the foundation of all that has happened is an 'investment strategy' that was simply wrong for many of Storm's investors.


----------



## Judd (12 September 2009)

Steve Borden said:


> Judd
> 
> The CBA also significantly changed their policy with regard to the treatment of investment income yesterday, so much so in one instance I have seen under the old policy the client 'earned' $62k while under the new policy the assessed income is $9k.
> 
> Under the new policy none of the self-funded retirees would have received a home loan from the CBA.




My, my.  Upping the lending criteria equals tighter credit.  Some could be in for a very rude shock when they apply for a loan.   Bye, bye the dream home in Brighton, hello the shack at Upper Lurg.  Funny thing when people and regulators have stern looks and words about lenders being slack or unfair with customers.  It can have ramifications they don't even expect.

PS:  Julia, face to face, I couldn't tell someone who has been sent to the doghouse by Storm, CBA or whoever, where it all went wrong for them.  Doubt many could.  Solly's friend has probably had all his beliefs shattered beyond repair.


----------



## Julia (12 September 2009)

Judd said:


> PS:  Julia, face to face, I couldn't tell someone who has been sent to the doghouse by Storm, CBA or whoever, where it all went wrong for them.  Doubt many could.  Solly's friend has probably had all his beliefs shattered beyond repair.



Even if meant that as a result they would be saved from making a similar mistake in the future?

If burned investors genuinely don't know what went wrong, I think you are doing them a genuine service by explaining.

Life is full of manipulative and selfish people.   To allow that fact to colour how we feel about humanity in general is imo a mistake.  Better to become educated so we are in a position to make better judgements.


----------



## Garpal Gumnut (12 September 2009)

Julia said:


> Even if meant that as a result they would be saved from making a similar mistake in the future?
> 
> If burned investors genuinely don't know what went wrong, I think you are doing them a genuine service by explaining.
> 
> Life is full of manipulative and selfish people.   To allow that fact to colour how we feel about humanity in general is imo a mistake.  Better to become educated so we are in a position to make better judgements.




Many of the Storm victims I have met, Julia, have no idea about finance.

They have accumulated wealth through hard work and following simple algorithms, whaich have served them well, e.g. pay off your house, get your super up, get an investment property or a beach house.

I still feel that Storm, Cassimatis and the Financial Planning industry alone are primarily responsible for getting these people in debt.

They were the sheepdogs for the banks.

These Storm victims would be the definition of unsophisticated investors.

Trying to explain to them where they went wrong is well nigh impossible.

gg


----------



## Julia (12 September 2009)

Why is it impossible?   I have the impression that they simply went ahead with Manny & Co in blind trust, and didn't ask how it all was supposed to work.

If you were to explain that they borrowed against their homes to fund the purchase of shares/units in Storm Fund, then on top of that borrowed on those shares to buy more shares, and the resulting debt was unsustainable if the market fell, even the most financially unsophisticated person could understand the risk involved.

We've all made mistakes.  I think that only by understanding how these happened will we avoid being similarly stung in the future.


----------



## Solly (12 September 2009)

Judd said:


> .....Solly's friend has probably had all his beliefs shattered beyond repair.




Spot on mate, after years of investing with EC and with most of his money in CBA and then it all goes tango uniform.....

It took me two hours of suggesting that he keeps what little cash he has in a bank and not to bury it in a poly out the back.

Once you see the fear and desperation in the eyes of these Stormers, the more you understand.

I'm pleased to read that CBA maybe trying to really help. And still after seeing EC's performance at the BNE hearing I cannot at this stage pass a published opinion.


----------



## Garpal Gumnut (12 September 2009)

Julia said:


> Why is it impossible?   I have the impression that they simply went ahead with Manny & Co in blind trust, and didn't ask how it all was supposed to work.
> 
> If you were to explain that they borrowed against their homes to fund the purchase of shares/units in Storm Fund, then on top of that borrowed on those shares to buy more shares, and the resulting debt was unsustainable if the market fell, even the most financially unsophisticated person could understand the risk involved.
> 
> We've all made mistakes.  I think that only by understanding how these happened will we avoid being similarly stung in the future.




Again Julia these people were unsophisticated.

Probably greedy as well like every other human being.

They saw people who had made 4-500% profits with Manny, neighbours, friends, relatives.

They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.

gg


----------



## Solly (12 September 2009)

Garpal Gumnut said:


> ....They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.
> 
> gg





gg, A very wise observation IMHO


----------



## ngardiner (13 September 2009)

Garpal Gumnut said:


> They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.




One gold plated dunny, and one t**d rolled in glitter. It might be toilet humour, but it worked wonders. Manny is a walking, talking example of how to profit from the depths of human behaviour and this is tolerated because investors could never expect to seek recourse from this man.

Seriously, SICAG and Storm investors - tell me, what's to stop me from purporting this same scam to make myself rich? You folk dismiss the civil liability perspective on the low potential of recovery, yet people buy lottery tickets every day on far less favourable odds.

I almost feel duty bound to scam you folks like SICAG do to prove a point. Grow a set, pursue the real source of this issue and ensure that rather than a focus on profit (hey guys, how did you get here in the first place?) you send a strong message to those who purport these scams. "I am mad as hell, and I won't take this anymore"

PLEASE. We have a forum of disaffected but yet concerned and involved protesters begging for Storm victims to take a stand and yet most choose to forgo their rights to an organisation which has repeatedly failed to achieve any worthwhile goal. Read every submission from SICAG and reach your own conclusion.


----------



## Grey Ghost (13 September 2009)

Quincy said:


> Here is the article : -
> 
> 
> 
> ...




I have read this report as well as the BOQ submission to the inquiry.  It could be very illustrative if a stormer who had dealings with this bank could give their side of the story.  (I know there may be a submission by some to the inquiry but I haven't come across one yet - haven't had time to read them all).
A very disturbing thing in the report is the possible threat buy the bank to countersue anyone who seeks legal redress against them.  That is really playing hardball!   I hope Bernie and his mates bring this issue up when the CEO David Liddy gives evidence at the inquiry.


----------



## bunyip (13 September 2009)

Garpal Gumnut said:


> Again Julia these people were unsophisticated.
> 
> Probably greedy as well like every other human being.
> 
> ...




Sure, they went in with their eyes closed - apparently many of them had no idea what they were letting themselves in for.
But I don't see why their mistakes can't be explained to them in a way they can understand, so that hopefully they won't repeat them.

I mean, isn't that what some of us have done in this thread? 
Some Stormers have got their noses out of joint, as you'd expect, and told us we were kicking them when they were down and rubbing salt into their wounds, etc etc.
But most of them have been mature enough to graciously accept constructive criticism from those of us who were prudent enough to stay clear of the Storm Financials of this world.

You don't do any favours to someone who was burnt by a scammer, and appears not to understand how or why he was burnt, if you say nothing or pretend you don't know what went wrong.
Better to be straight with him, tell him where he stuffed up so he can avoid falling into the same trap again.


----------



## Joe Blow (13 September 2009)

This thread has now been permanently moved to the "General Investment and Economics" forum.


----------



## Solly (14 September 2009)

*"KordaMentha denies Storm fee claim"*

"No secret transactions
KordaMentha has dismissed claims it made secret transactions while carrying out its duties as Storm Financial's receiver."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7380.htm


----------



## Solly (14 September 2009)

*"BoQ denies wrongdoings in Storm debacle"*

"Bank has $86m exposure
Bank of Queensland said it did not act against the law in servicing Storm clients."

More by Wouter Klijn in Investor Daily here;

http://www.investordaily.com.au/7386.htm


----------



## Solly (14 September 2009)

*"CBA tightens rules to weather crisis"*

"Commonwealth Bank of Australia is tightening up its lending practices and closing a major loophole for potential abuse by preventing mortgage brokers from using borrowers' proposed investment income for servicing mortgage payments."

Read more by Duncan Hughes in The Australian Financial Review of Monday, 14 September 2009.


----------



## Quincy (15 September 2009)

Solly said:


> *"Storm founder and investors hold secret meeting"*
> 
> "Emmanuel Cassimatis, founder and ex-chief executive of Storm Financial, is believed to be seeking support from former investors in his collapsed company to bring a legal action against the Commonwealth Bank of Australia."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Sept 10, 2009.




Here's the AFR article (albeit a few days ago) : -  
	

		
			
		

		
	

View attachment AFR - 10 SEP 2009.pdf


----------



## Judd (15 September 2009)

To paraphrase Oscar Wilde "Law is the last resort of a rogue."  With apologies to the nicer lawyers and litigants.

Wonder what happened to the implied promise of continuing to fight on behalf of all Storm clients?  Yeah, I forgot, it was one of those non-core promises.


----------



## Solly (16 September 2009)

*"David Liddy, Bank of Queensland, next in teeth of Storm"*

"BANK of Queensland chief executive David Liddy faces his first public grilling today over the bank's lending practices to clients of now-failed Storm Financial and its plans to pay them compensation."

More by Anthony Mark and Emma Chalmers in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26079303-3122,00.html


----------



## Anastasia (16 September 2009)

Just watched JPC Committee and David Liddy of BoQ having a "chat". David Liddy made a comment that 40 odd customers have paid out their home loans this year....so the BoQ home loans were issued on viable grounds and not that unrealistic in affordability based on income. 

Well Mr. Liddy, I know for a fact that some of those loans were paid out by very stressed customers through funds obtained from family and/or sale of assets (homes, other shares, property etc) and smaller loans (for balances still owing) at a cheaper rate than BoQ's rate from other banks. 

I also am aware that many customers have had funds placed in dam accounts set up by Storm and have been able to make home loan repayments for approximately six to 12 months. This was what being self-funded retirees meant...the fund making the repayments. 

So just maybe that is why there were no hardship case in January 09 and only 46 in July. Will be interesting to see the number by the end of the year when many dams have dried up.


----------



## Soft Dough (16 September 2009)

Anastasia said:


> Well Mr. Liddy, I know for a fact that some of those loans were paid out by very stressed customers through funds obtained from family and/or sale of assets (homes, other shares, property etc) and smaller loans (for balances still owing) at a cheaper rate than BoQ's rate from other banks.
> 
> I also am aware that many customers have had funds placed in dam accounts set up by Storm and have been able to make home loan repayments for approximately six to 12 months. This was what being self-funded retirees meant...the fund making the repayments.




WHAT!!!

They used other assets to pay off the loans which they took out with BOQ

Blasphemy.

OF COURSE that is the way it goes.  Why should Storm investors have any leeway if BOQ did everything correctly?

ie If I borrow 1million and have 1.5 million in cash, of course I can pay off the debt, so should stormers.


----------



## Solly (17 September 2009)

*"ASIC considers ban on financial advisers' fees"*

"The Australian Securities & Investments Commission's recommendation came last night as the Bank of Queensland staunchly defended its role in lending money to customers who invested with Storm Financial."


"Mr D'Aloisio defended ASIC's failure to step in and take action to protect investors before Storm's collapse.

"We don't believe we missed the issues," he said."

More by Nicola Berkovic in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26084892-36418,00.html


----------



## Solly (17 September 2009)

*"Tough rules 'will flush out advisers' "*

"Tighter regulation of advisers could lead to a "lot of people" leaving the financial services industry, Australian Securities and Investments Commission chairman Tony D'Aloisio told a parliamentary inquiry yesterday."

Read more by Duncan Hughes in The Australian Financial Review 17th Sept 2009


----------



## Solly (17 September 2009)

*"Storm Financial collapse: watchdog vows to fight for justice"*

"AUSTRALIA's corporate watchdog will continue its probe into the Storm Financial collapse over the next six weeks before deciding whether to pursue legal action.

Australian Securities and Investments Commission chairman Tony D'Aloisio last night told the federal parliamentary inquiry into financial products and services that its probe into the failed Townsville-based company was one of the largest in history."

More by Emma Chalmers and Stefanie Balogh in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,27574,26084160-3102,00.html


----------



## Solly (17 September 2009)

"Bank of Queensland defiant in wake of collapse"

"The Bank of Queensland has broken its silence about its involvement in the Storm Financial collapse standing by its lending practices as 'correct' and above board."

Read more by Emma Chalmers and Stefanie Balogh in The Courier Mail.


----------



## Judd (17 September 2009)

I am still mystified as to how people could borrow against their home and not think that it was not a mortgage or a debt that had to be repaid at some stage but there ya go folks.

http://www.theaustralian.news.com.au/story/0,25197,26082940-28737,00.html




> *Storm damage*
> 
> Andrew Fraser | September 17, 2009
> Article from:  The Australian
> ...




Soft Dough, I think that in any situation such as Storm, you will get people who knew very well what they were doing and why as well as the risks involved but are now using the matter to their advantage in order to avoid their obligations.  Not many for sure but it would not surprise me if there were a few.  Human nature is what it is.


----------



## Ironhalo (17 September 2009)

I was a Storm 'victim', but my partner and I knew EXACTLY how much money we were borrowing from exactly which financial institution. It was all written on page 2 in layman's terms on our SOA. 

The biggest thing that has made me angry, is that we weren't in margin call, and yet our investment was sold at the bottom of the market without any consultation to us by Colonial, and our margin loan paid back at a loss with the proceeds, despite us having extra assets and money in a joined CMA to avoid margin call. We knew what was going on, and we didn't even have a house betting on it....just a block of our savings as a young couple.

For people to claim 'Storm borrowed $1 million for me, and I didn't know about it' is absolute bollocks. You might not have understood the section that read 'we propose you borrow $1 million from bank X to invest into your existing Storm index fund', but for all of their faults, Storm never put a gun to people's head and made them sign for ridiculous loans.

My heart goes out to the majority of fellow Storm investors, but there are a number of people now pulling the Alan Bond 'I have low IQ and don't know what I was doing' card to avoid responsibility for their own apathy.

If millions of dollars of my super and retirement was on the line, I would have been down at the Storm office in person everyday demanding to see what was going on, and same for Colonial Lending. I hate to say it, but it's endemic of society nowadays, no one takes any responsibility for anything, Manny, the banks and Storm customers included.

Not sinking a boot in, but hopefully people learn from this.


----------



## Steve Borden (17 September 2009)

Ironhalo said:


> I was a Storm 'victim', but my partner and I knew EXACTLY how much money we were borrowing from exactly which financial institution. It was all written on page 2 in layman's terms on our SOA.
> 
> The biggest thing that has made me angry, is that we weren't in margin call, and yet our investment was sold at the bottom of the market without any consultation to us by Colonial, and our margin loan paid back at a loss with the proceeds, despite us having extra assets and money in a joined CMA to avoid margin call. We knew what was going on, and we didn't even have a house betting on it....just a block of our savings as a young couple.
> 
> ...




Did you sign a letter back in October 2008 to convert your portfolio to cash?


----------



## Judd (17 September 2009)

I am probably wrong as usual but I think I see a glimmer of why some investors were sold out without consultation even though they could have met any margin call.  It probably would have been sending good money after bad.

Have a read of the evidence from CBA of 4 September and in particular the CBA comments on pages 101 and 102.  The value of the funds due to redemptions and the market went from $700m to $46m in six weeks.  As the CBA said some $11m per fund.  At that level they were not viable apparently and so were closed.

I am hazarding a guess that meeting a margin call would mean that one individuals money would have been spread across all other remaining investors, ie pooled, and not changed the viability of that fund in any way shape or form.

http://www.aph.gov.au/hansard/joint/commttee/J12379.pdf


----------



## Ironhalo (17 September 2009)

I signed a letter, but that authorised Storm to sell us down in case we got close to a margin call. It didn't authorise Colonial to do it when we still had a 30% buffer before we did.


----------



## cuttlefish (17 September 2009)

Ironhalo said:


> I was a Storm 'victim', but my partner and I knew EXACTLY how much money we were borrowing from exactly which financial institution. It was all written on page 2 in layman's terms on our SOA.
> 
> The biggest thing that has made me angry, is that we weren't in margin call, and yet our investment was sold at the bottom of the market without any consultation to us by Colonial, and our margin loan paid back at a loss with the proceeds, despite us having extra assets and money in a joined CMA to avoid margin call. We knew what was going on, and we didn't even have a house betting on it....just a block of our savings as a young couple.
> 
> ...




Good post Ironhalo - I think you're right that there will always be people who overplay the victim card in these situation.   I've also started to see where the banks failed some Storm Investors.  The issues seem to me to stem more on how the bank processed redemptions from the fund, and their decision to wind up the fund. It would be interesting to understand more of what went on here.


----------



## Julia (17 September 2009)

Judd said:


> I am probably wrong as usual but I think I see a glimmer of why some investors were sold out without consultation even though they could have met any margin call.  It probably would have been sending good money after bad.
> 
> Have a read of the evidence from CBA of 4 September and in particular the CBA comments on pages 101 and 102.  The value of the funds due to redemptions and the market went from $700m to $46m in six weeks.  As the CBA said some $11m per fund.  At that level they were not viable apparently and so were closed.
> 
> ...



Thanks for that link, Judd.  I've only skimmed through it but it certainly appears that the Committee are being most diligent.
Some very interesting stuff there, especially the part you've outlined above.


----------



## Solly (18 September 2009)

*"BoQ 'has Storm case to answer' "*

"Bank of Queensland "has a case to answer" over its lending practices to clients of Storm Financial, the chairman of the federal parliamentary committee investigating the adviser's collapse, Bernie Ripoll, said yesterday."

Read more by Duncan Hughes in The Australian Financial Review of Sept 18 2009.


----------



## Solly (18 September 2009)

*"Storm legal options decided by end of October"*

"AUSTRALIA's corporate regulator says it is still considering what, if any, legal action it will take against key players in the Storm Financial disaster.

However, Australian Securities and Investments Commission has revealed it could decide its legal options at the end of October.

The banks are facing potential action under the regulator's public interest powers, while Storm founders Emmanuel and Julie Cassimatis are facing possible actions for breaches in their roles as company directors and financial advisers."


More by Tony Raggatt in The Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/09/18/80071_news.html


----------



## Solly (18 September 2009)

*"Bank of Queensland can't shelter from Storm"*

"YOU have to wonder about the Bank of Queensland's strategy to cope with its toxic exposure to the Storm Financial debacle.

It obviously obtained legal advice that the best course of action is to dig in its heels, admit to little or no wrongdoing and fight any legal bids seeking redress."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26084949-3122,00.html


----------



## Solly (18 September 2009)

Solly said:


> *"Bank of Queensland defiant in wake of collapse"*
> 
> "The Bank of Queensland has broken its silence about its involvement in the Storm Financial collapse standing by its lending practices as 'correct' and above board."
> 
> Read more by Emma Chalmers and Stefanie Balogh in The Courier Mail.




The link is now available here;

http://www.news.com.au/couriermail/story/0,23739,26084160-3122,00.html


----------



## Judd (18 September 2009)

Julia said:


> Thanks for that link, Judd.  I've only skimmed through it but it certainly appears that the Committee are being most diligent.
> Some very interesting stuff there, especially the part you've outlined above. *[Closure of funds due to lack of viability - Judd]*




Know in some small way how people would feel about this.

We had a position in a small unlisted fund.  When a cornerstone investor (51% of fund) pulled out, us muggins were left hanging out in the breeze.  Fund manager advised that without the investor the fund was no longer viable, ceased redemptions and commenced to wind up the fund.  Took about 10 months to get money back at 83c in the $1.00.  Fortunately, the fund was not subject to a margin loan and we had other investments so while we took a bit of a haircut, it was more like a light trim really.

Still, it was annoying that they could do that without consulting remaining investors but I suppose there is something deep in any prospectus to allow the manager and/or trustee, if there is one, to close a fund for a variety of reasons including legal obligations on the managers.


----------



## Solly (21 September 2009)

*"Macbank questions go unanswered in Storm fiasco"*

By Stuart Washington in The Age

"Macquarie Group made margin loans to an estimated 600 Storm Financial clients, some of whom were sold out at disastrous loan-to-value ratios.

Unlike Commonwealth Bank, Macquarie Group has not talked about any form of compensation after its margin loan system appeared to break down badly.


*Did you receive a Macquarie Group loan through Storm? 
E-mail swashington@smh.com.au* "

More here;

http://www.theage.com.au/business/macbank-questions-go-unanswered-in-storm-fiasco-20090921-fxpg.html


----------



## Mindstorm (21 September 2009)

Thanks for the link Solly, interesting reading.

I had wondered why their previously published figures were so low.

Hopefully, they will give us some answers soon.

Mindstorm




Solly said:


> *"Macbank questions go unanswered in Storm fiasco"*
> 
> By Stuart Washington in The Age
> 
> ...


----------



## Solly (22 September 2009)

*"Storm victims insist they were dudded"*

"MACQUARIE Group has no public plans to compensate an estimated 600 Storm Financial clients despite evidence of failed systems in margin loans it made to retirees and pensioners.

Macquarie Group maintains it has ''settled'' with its Storm Financial clients."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/storm-victims-insist-they-were-dudded-20090921-fyns.html


----------



## bunyip (22 September 2009)

_Sharon Lisch, of Deception Bay, Queensland, said she was a retiree with four investment properties when she and her husband Erich first took out margin loans with Macquarie through Storm Financial._

The above extract is from one of the links provided by Solly.
As always, I'm perplexed as to why a relatively wealthy retiree with four investment properties producing a passive income of probably around $1200 per week, and presumably owning their own home, would feel the need to risk it all by using a margin loan to invest in the stock market.


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## Judd (22 September 2009)

Convince people that, no matter how financially comfortable they maybe now, they will never have sufficient to live a comfortable life in the future unless it is through our magnificent plan which has worked for xx number of years, as backed up by wonderful testimonials from clients and possibly friends of the investors, and you will get them to dance on hot coals.

Mississippi madness scheme in 1791, South Sea bubble 1720, Tulipmania 1637.  Nothing much new under the Sun, really.

Heck, people who took out variable interest rate mortgages complain when the raise increases, as do those who take out fixed interest loans and the rates go down below their fixed rate.

The majority of people always want to be on the winning side where money is concerned.

Buggered if I know why they don't think of the downside and why they should need any more if they are happy and contented with their present lot in life but they do.  I cannot figure it out and I have ceased trying to.


----------



## Solly (22 September 2009)

*"Don't prolong Storm legal action: investors"*

"An investment group says a decision should be made quickly on whether to take legal action over the collapse of Townsville-based Storm Financial.

The Australian Investors Association (ASA) says a statement by the Australian Securities and Investment Commission (ASIC) suggests it should be known by Christmas if action will be taken."

More from Penny Timms from the ABC;

http://www.abc.net.au/news/stories/2009/09/22/2692625.htm


----------



## Quincy (22 September 2009)

bunyip said:


> _Sharon Lisch, of Deception Bay, Queensland, said she was a retiree with four investment properties when she and her husband Erich first took out margin loans with Macquarie through Storm Financial._
> 
> The above extract is from one of the links provided by Solly.
> As always, I'm perplexed as to why a relatively wealthy retiree with four investment properties producing a passive income of probably around $1200 per week, and presumably owning their own home, would feel the need to risk it all by using a margin loan to invest in the stock market.




From the quoted article (http://www.theage.com.au/business/st...0921-fyns.html) : - 



> Since then she said Macquarie Group had made no concessions for the situation in which she found herself.
> 
> *''Their way of settling was 'You will pay out our loan'*,'' she said yesterday. *''No compassion or consideration was shown.*''




Interesting that she was looking for compassion from the Lender with regard to the paying out of her loan.


----------



## Quincy (22 September 2009)

Solly said:


> *"BoQ 'has Storm case to answer' "*
> 
> "Bank of Queensland "has a case to answer" over its lending practices to clients of Storm Financial, the chairman of the federal parliamentary committee investigating the adviser's collapse, Bernie Ripoll, said yesterday."
> 
> Read more by Duncan Hughes in The Australian Financial Review of Sept 18 2009.




A few days late but here's the article : -  
	

		
			
		

		
	

View attachment 2009_09_18_AFR.pdf


----------



## Solly (23 September 2009)

*"Inquiry fumes at Storm loans deal"*

"MACQUARIE Group's failure to disclose a special deal it is alleged to have made with Storm Financial has been attacked by the head of a parliamentary inquiry investigating Storm's collapse.

The inquiry has heard evidence from former senior Storm staffer David McCulloch in Townsville that ''Macquarie Bank entered into an agreement with Storm'' on margin loans"

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/inquiry-fumes-at-storm-loans-deal-20090922-g0lk.html


----------



## DocK (23 September 2009)

From the above linked article...

_Part of the agreement Mr McCulloch detailed was to lift the maximum loan-to-value ratio to 85 per cent for Storm clients with margin loans from Macquarie - increasing the maximum that Storm's clients could lose if they were sold out at that level.

BusinessDay believes the usual loan-to-value ratio Macquarie Group offered to almost all other financial planners was a more conservative maximum of 80 per cent.

A Macquarie spokeswoman refused to answer BusinessDay's questions on the issue.

BusinessDay has also seen correspondence from a former Storm Financial adviser that suggests Storm's arrangement with Macquarie's margin lending business included Storm dictating the timing of margin calls to Storm clients.

''Our agreements and ongoing communication (hour to hour) with MML (Macquarie Margin Lending) has ensured that either no margin calls are being actioned or we have significant control over the relationship [so] that MML is taking directions from us,'' a Brisbane Storm staffer, Stephen Halsall, wrote to a client on October 24 last year.

The lack of margin calls proved disastrous to many former Macquarie margin-loan customers. BusinessDay is aware of nearly 40 former customers, almost all of whom say they received no margin call when markets fell last year
_

My margin loan was with Macquarie and I can confirm that my statements confirm a "maximum gearing level" of 80% plus an additional "buffer" of 5%.   I always thought that was way too high, but my adviser used to talk about it as a positive thing as it allowed storm clients to withstand more volatility and the ability to take advantage of "dips" (read crashing sharemarket).

I cannot verify the statement in the article re people not receiving margin calls until they were up to 95% lvr as my loan never got as high as 80%, but would be very interested to hear from any other stormers who were with Macquarie - I was always under the impression that any matters pertaining to the loan were between the lender and I, and had nothing to do with storm once it was set up.  I would have been beating down Challenger's door demanding they sell my investments to repay Macquarie had I reached 80% lvr - never mind whether storm gave the go-ahead or not!  It seems amazing to me that a lender would need the approval of a financial planner if their own client was giving them instructions about their own loan????


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## Judd (23 September 2009)

It is my view that these "third party" arrangements, unless there are special documented reasons on a case-by-case basis for having them, must cease to exist.  It is the instructions of end beneficiary which is important not the financial adviser or lender (apart from them wanting their money back.)

Apparently a similar situation occurs with wrap accounts where only the FP can sell/buy although it is supposed to be on the client's instructions.  The entire industry appears, and I stress appears as it may not be the case, to move towards taking authority away from the client and leaving it in the hands of "experts."

Be almost black humour if the real solution was to eliminate the FP industry, hand all authority back to investors and just say "You're on your own, son.  Your money, your decision, your risk, your responsibility." A bit tongue in cheek there.


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## DocK (23 September 2009)

Judd said:


> Be almost black humour if the real solution was to eliminate the FP industry, hand all authority back to investors and just say "You're on your own, son.  Your money, your decision, your risk, your responsibility." A bit tongue in cheek there.




Humourous perhaps, but in truth I'd bet a lot of people would be a hell of a lot better off if that were the case!


----------



## Judd (23 September 2009)

I have been reading the transcript of 16 September public hearing by the Committee.

http://www.aph.gov.au/hansard/joint/commttee/J12399.pdf

Some very good issues canvassed but I had a good laugh at the exchange (page 41) between Senator Mason and David Liddy over margin loans:



> _*Senator MASON*””The contractual obligations may be adhered to but that does not mean something is ethical, responsible or principled. Can you answer that question? Let me ask you this question: do you support then the new amendments to the Corporations Act regarding margin lending?
> 
> *Mr Liddy*””To be honest, I am not familiar with them.
> 
> ...




I tend to agree with Mr Liddy on this.  No matter how much I was paid, if my organisation was not offering the product and had no intention of doing so, why the hell would I want to stock up my In-Tray with junk information I don't need?  Typical of some of the questions from pollies.

Have only sat in on one session of a parliamentary Inquiry and that was many moons ago.  This one seems reasonably OK, the others are mainly grandstanding by talking heads trying to get their one and only policy idea implemented or their face on the evening news.


----------



## Steve Borden (23 September 2009)

Except they do offer margin loans via a white label distribution model through Leveraged Equities.

This is from the application:

"The Lender is Leveraged Equities Limited ABN 26 051 629 282 (“the Lender”) a subsidiary of Bendigo and Adelaide Bank Limited. The Bank of Queensland Limited ABN 32 009 656 740 (Bank of Queensland) does not guarantee or otherwise support the Lender’s obligations under the Loan and Security Agreement for the Bank of Queensland Margin Loan. Bank of Queensland distributes the Bank of Queensland Margin Loan under and agreement with the Lender. Accordingly reference in this brochure to “Margin Lending”, “we”, “us” and “our” may depend on the context, be reference to the Lender. Further details on the Lender’s role is set out in the Loan and Security Agreement for the Bank of Queensland Margin Loan."

Happy to distribute a product that they have deliberately steered clear of?


----------



## Judd (23 September 2009)

Ah ha, how disingenuous.  Similar to JB Were which sold its margin loan business to Leveraged Equities. Gad, this stuff is fascinating.  Wheels within wheels within wheels.


----------



## Solly (23 September 2009)

*"Dozens to give evidence in Storm probe"*

"About 40 people are expected to be quizzed over failed advisory firm Storm Financial at a public examination starting in the Federal Court in Brisbane tomorrow.

The examination will run from Thursday to September 29, adjourning until October 12 and continuing until October 30.

Storm founders Emmanuel and Julie Cassimatis are expected to give evidence."

More by Paul Osbourne from AAP and The Brisbane Times here;

http://www.brisbanetimes.com.au/queensland/dozens-to-give-evidence-in-storm-probe-20090923-g2dm.html


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## Garpal Gumnut (23 September 2009)

Solly said:


> *"Dozens to give evidence in Storm probe"*
> 
> "About 40 people are expected to be quizzed over failed advisory firm Storm Financial at a public examination starting in the Federal Court in Brisbane tomorrow.
> 
> ...




I notice the the SICAG model has no mention of this important Examination into the Storm model and losses, on their website,  sicag.info.

Not an iota.

I wonder why?

Any ideas anybody?

At least the bloody moneyspiders have gone.

gg


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## Big Max (23 September 2009)

Ironhalo said:


> Max,
> 
> How many times do you want me to say it (in six different languages) that I applaud the work of SICAG? Have you not read my previous posts?
> 
> ...




Still waiting for you and darkside to retract your incorrect claims about SICAG allegedly cleaning out its executive ranks. If you make the claim, you have to take the blame . . .


----------



## Big Max (23 September 2009)

Ironhalo said:


> I'd love to apologise, but I have nothing to apologise about. As long as you keep trying to paint GG, Bunyip and myself as some kind of SICAG-haters who take delight in seeing Stormer's pain, when all we have done is illustrate concerns a lot of people have with some of the members of SICAG and some of the unsavoury Storm employees who have leapt onto the SICAG bandwagon, then you will continue to get forum posts you don't like. Trust me mate, I'm pretty sure I can speak for the others and say that we aren't the enemy, we're on your side.
> 
> And for someone who really is on the periphery of the Storm experience, i.e. not an ex-employee, not a Storm investor, you certainly get apoplectic about anyone being dark over the whole affair and raising even the most basic questions about your 'employer', whom while they have done some excellent work, have sullied themselves to a small degree by allowing the ex-Storm bottomfeeders to board their ship.
> 
> ...




I'll be at the Federal Court hearing tomorrow. My shout for that beer . . .


----------



## Garpal Gumnut (23 September 2009)

Big Max said:


> Still waiting for you and darkside to retract your incorrect claims about SICAG allegedly cleaning out its executive ranks. If you make the claim, you have to take the blame . . .




You're a stirrer Max.

Why no mention of the upcoming examination of Storm. on the website of the SICAG model?

gg


----------



## Big Max (23 September 2009)

Mindstorm said:


> "some"  ?
> 
> 
> So, how many of the (approximate number) 13,500 clients fall into your "some" bracket?
> ...




Emmanuel and Julie had a phrase hard-wired into its computer-based Statement of Advice to the effect that (I am paraphrasing) "you do not have sufficient assets to finance a comfortable retirement . . .", thereby encouraging everyone to liquidate what they termed "lazy" or "dormant" assets and put the cash into Storm. Every other element in the computer-based matrix was alterable (name, address, dependents etc.) except for this phrase. So, regardless of whether you had $20,000 or $20 million in the bank, Storm's SoA said you didn't have enough assets to fund a comfortable retirement. Doesn't that say it all . . .?:22_yikes:


----------



## Big Max (23 September 2009)

cuttlefish said:


> SICAG makes me feel ill.  To use vulnerable people to further the Storm cause is despicable.  If the comments attributed to Mark Weir earlier on i this thread are true then this is exactly whats happening.
> 
> Harlequin you are happy with an organisation who's leader makes the statement:  "there was no point now blaming Storm because it had been totally obliterated by the Commonwealth Bank".




Cuttlefish, I have just caught up with your posting. Mr Weir was misquoted. Below is part of the text of my email exchange with the journo concerned:

Hi Peter.

Attached email trail for your information.

Mark informs me he was caught off guard amid the media flurry. He does not recall making the statement attributed to him but, if so, he did not intend to infer that Storm were above BLAME. He says he intended to convey the message that it was a waste of time chasing Storm for compensation because there’s nothing left in the Greek’s cupboard. 
Cheers,

Max


----------



## Garpal Gumnut (23 September 2009)

Big Max said:


> Cuttlefish, I have just caught up with your posting. Mr Weir was misquoted. Below is part of the text of my email exchange with the journo concerned:
> 
> Hi Peter.
> 
> ...




Maxie, tell Mr.Weir, his son, and Mr.Jelich, that Manny has more than one cupboard, probably up to 20 that I've been told about, and that the SICAG model of supporting the Storm model on its front page is wrong, very very wrong and of much distress to many victims in Townsville.

It may go down well in Redcliffe but not in Townsville.

Now stop stirring and answer the question.

gg


----------



## Big Max (23 September 2009)

Ironhalo said:


> I agree SICAG has been good for the victims Harley, and I am sure people have benefitted from having a focus, and being around other people in the same situation.
> 
> What frustrates most of us in here to no end, and as soon as this whole thing started we suspected it, is that SICAG refuses to place any blame on the Storm model, and has not at any stage stood up to it's members and said officially 'Emmanuel/Julie Cassimatis and the other Storm directors are just as guilty as the banks.' Instead, we have the father of one of the key advisors as a committee member, as well as people like Ron Jelich (who aided and abetted the whole thing....although I did hear he was in a poor way after the whole thing, I'm not entirely heartless) who now use SICAG as their own speaking post.
> 
> ...




You would be a welcome guest at any of SICAG's meetings. I'll even pick you up. You will be aghast to discover a group of dedicated individuals who have put their personal losses (collectively estimated at several million dollars) while they fight for justice, solace and compensation for people like your rellies. No, they won't be sitting around in white sheets plotting Machiavellian strategies while waiting for Manny to ring in with his riding instructions. How disappointing for you and other SICAG sceptics. Seriously, come to a meeting and be amazed at the thousands of selfless man-hours being voluntarily devoted to this important cause. Everything that is happening, about to happen and being commented on in this forum has not occurred by accident or by the words of anonymous posters in the ASF fishbowl. Big Max


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## Solly (23 September 2009)

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Thursday, 24 September 2009

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000

Deputy District Registrar Baldwin Court No. 1, Level 7

9:30 AM Examination

1 QUD75/2009 STORM FINANCIAL LIMITED (IN LIQUIDATION) (RECEIVERS AND MANAGERS APPOINTED)

Google is your friend


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## Garpal Gumnut (23 September 2009)

Solly said:


> FEDERAL COURT OF AUSTRALIA
> Queensland Registry
> Thursday, 24 September 2009
> 
> ...




I'd love to be there but have to fly to Mornington Is. for a short fishing holiday tomorrow, as long as the bloody dust settles before it gets to Garbutt Airport. If the Gulf is out I might pop down to Brisvegas on Friday.

gg

gg


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## Big Max (23 September 2009)

Garpal Gumnut said:


> I will be brief as I am quite tired from travelling coach to and from Brisbane, attending the Inquiry and other brief activities not suitable to expand upon on this forum.
> 
> The Inquiry restored my faith in democracy in Australia.
> 
> ...




GG, clearly you were not at the same inquiry that I was at. Please tell ASF posters (particularly moi) where you sourced your evidence to support these flights of fancy (I quote you herewith) . . . 


The public , media and Storm victims were scathing about the Storm model and the SICAG model. I was greatly surprised that nearly all Stormers had heard of Aussiestockforums and were now getting their information and advice from ASF rather from the SICAG site. Some expressed disgust at the former Storm Logo on the SICAG site, the connection of committee members to Storm and Storm advisers, the advice on the SICAG site to seek out financial advisers who followed Storm principles and the failure of SICAG to in any way attribute blame to Storm or the Cassimatis.

END OF QUOTE


I had a bit of time for your credibility (particularly after noting you were/are a fellow biker) but after this, methinks you may have stopped off at Lennon's a few weeks early instead of attending the inquiry that I attended.

Come on, fellow posters who were at the Brisbane hearings, ask GG to back up his claims.


----------



## Big Max (23 September 2009)

bunyip said:


> Big Max
> 
> In view of the information that's come to light over the last couple of days, both at the Enquiry and through this forum, I think it's time you favoured us with another of your posts.
> In particular, I'd be interested in hearing your reponses to Posts 3251 & 3254 from Ironhalo, Post 3248 from GG, and Post 3266 from Smiley.
> ...




Bunyip, Farencue . . . I'm flattered that you have missed me. Been busy with a pesky little problem called Storm. Meetings with lawyers, meetings with politicians, writing submissions, attending inquiry hearings, answering interminable phone calls from distressed former Storm clients etc. You know how it is . . . I'm still waiting for Ironhalo to correct the historical record. To freshen your memories, Ironhalo said SICAG had purged its ranks of recalcitrants (sort of a night of the long biros, I guess). Sadly not true. Sounds good but not true. If he was a "man of honour", he would say "sorry Big Max, I was wrong." Such is life.


----------



## Big Max (23 September 2009)

specialed said:


> The comments that attack SICAG and its motives or the role it should play astound me. They, like everyone, are interested in finding out the cause of this nightmare, and in time who is responsible and where the blame lies, be it with the banks, Storm, ASIC. Hopefully this will help to ensure it doesn’t happen again. However, SICAG was originally set up by storm clients to support each other. Many of these retired people are fighting to stop their lives sinking further into despair, if that is possible, with many having already been forced by the bank to sell everything they own. Most have been financially destroyed, and so if going after the CBA and CGI , rather than STORM for financial recompense seems suspicious to you,  try existing under the permanent threat of losing your house, with no prospect of gaining employment because of your age.
> 
> The CBA have admitted problems with their loans, discrepancies in their systems (presumably the accuracy of their market monitoring software). Their submission appears to contain statements that are inaccurate in the least and possibly deliberately dishonest or deceitful at worst.  The CBA has already begun a process of limited compensation, and has already admitted “some” fault. All this and there are still (at least) three investigations into this debacle to be completed.  What more has to happen before some of the contributors to this forum eat humble pie, and admit that these people are victims and that SICAG, whatever its committee make up is should be doing nothing but seeking compensation for it members. Personally I don’t care who is on the committee if the end result is a better payout for those who have lost everything. STORM financial is a dead horse, the CBA took care of that and they have ensured that there is no compensation within that area that can help the victims.
> 
> ...




Go specialed. Another erudite poster who has smelt the coffee! Please note: GG, farencue, Ironhalo, Darkside et al. Smile and be thankful for SICAG, albeit with its imperfections.


----------



## Big Max (23 September 2009)

Garpal Gumnut said:


> specialed,
> 
> What is your relationship to
> 
> ...




Aw shucks GG, you left me off the list!:nono:


----------



## Big Max (23 September 2009)

specialed said:


> Why would anyone in their right mind try to blame someone who might ??? have information that would help them when they try to sue a third party. Even someone of average intelligence can work why you would not want to do that....at this stage. The CBA is the only avenue for the storm investors to recoupe some of the money that this has cost them. Let ASIC identify the blame....




You are an inspiration specialed. Where have you been hiding?


----------



## Big Max (23 September 2009)

cuttlefish said:


> I agree that the bank appears to have failed in some of its duties in relation to responsible lending and possibly bears partial responsibility in some of the situations that occurred.  But they certainly weren't the primary cause of the situation that led to people losing their investments and wealth.
> 
> What annoys me is that SICAG doesn't appear care about where the responsibility lies - all they care about is getting as much money out of the bank as possible because the banks have the money.




And your point is . . . .?


----------



## Big Max (23 September 2009)

specialed said:


> Surely no one would believe that the banks efforts so far are anything more than harm and payout minimisation. Once this part is done with then sure, continue to go after whoever. Which at the same time the three investigations will also be doing. SICAG is a volunteer committee attempting to support investors while also trying to salvage their own lives. Surely Its not SICAG's role to seek criminal charges at this point. Criminal charges will do nothing to help those investors currently living out of caravans on their children’s back yard. Are you for real ! I'm sure they have enough to do already. If ASIC, the senate etc cant work out whether criminal charges should be laid, what chance have a SICAG got.  This has already been to court once and the judge could only make a limited determination. Of course you wouldn’t let a drunk driver get away with it....but first you need to get yourself out of hospital and recover from the injuries you have suffered. For many investors, their focus needs to be on saving themselves before they worry about the criminality of the perpetrators.




Hear hear, specialed. Change the record Ironhalo; the proper authorities, using your analogy, charge the drink-driver, not the victims.


----------



## Big Max (23 September 2009)

DocK said:


> In my humble opinion, SICAG originated with the sole aim of gaining compensation for its members.  This compensation was most likely to come from the banks, as presumably Cassimatis will have signed a personal guarantee for Storm's debts (I certainly hope this is the case) and will be cleaned out by the bank in due course.
> 
> In my humble opinion, SICAG could not care less who is to blame, but is focussed purely on who can/will pay compensation for their portion of the blame.  I think most of SICAG's members would agree that the majority of the blame lies with Storm, but as there is no monetary value in pursuing E & J etc they are focussed purely on their case against the banks involved at present.  This is their charter, their goal, so it's understandable that they will not wish to focus on anything that may detract from the level of responsibility that can be attributed to the banks.  I can understand their stance, as it is probably the best course of action for them to take in order to acheive their goal - compensation.
> 
> ...




Well stated DocK. It's a shame GG, Ironhalo, Darkside, Farencue, Bunyip et al are so blinkered and fixated on moneyspidercentral that they can't smell the roses. Woof woof.:couch


----------



## Big Max (23 September 2009)

Garpal Gumnut said:


> It would appear that from what has gone down in the evidence to the Inquiry that Manny should have kept to flogging MLC products from an old Ford Cortina around the Tablelands.
> 
> Surely with the answers he has given he was not in charge of millions of hardworking battlers money over the last 15 or 20 years.
> 
> ...




In answer to your last question: NONE. I would love to have been there though.


----------



## Ironhalo (23 September 2009)

I can guess you're probably drunk/in some state of inebriation Big Max, hence your dynamic forum trolling....errr.....numerous posts containing nothing but one-sided, pithy un-educated responses to people in this forum who actually have the seemingly unforgivable temerity to ask the questions that need to be asked. Something a lot of us as ex-Storm clients should have done. But I digress.

In response to your claims about the SICAG executive, I'm not talking about Messieurs Weir and O'Brien....I'm talking about the Storm hangers-on's/family members that like to call their ex-client base to establish trailing commissions on pre-paid insurance claims and other such scams. If you could get Mr O'Brien to pass onto his son that my family doesn't appreciate him calling up trying to rattle up business/cash flow from his destroyed client base, that would be just fantastic.

I would tell Andrew to stick his offer to leech more money/trailing commissions/new business off my family up the dark side of his anatomy personally, but I believe one of my other ex-Storm client Redcliffe-based family members already did that a few months ago.

Pity.

Oh and it was well-stated of DocK to mention that he didn't join SICAG because he felt uneasy about where the bulk of the blame was being laid by SICAG solely on the banks and not on Manny...I wholeheartedly agree. As the PAID media/'jobs for the boys' consultant to SICAG (and who is paying you to criticise other Storm victims on a public forum Max.....the SICAG members?), will you be updating the website to show the progress on getting justice out of Manny or any potential legal action against him? I'm not seeing any Manny related info about him answering to the Parliamentary committee on the SICAG site, try as I might as I navigate through the numerous 'screw the banks!' articles.

But then again, the name Cassimatis hasn't really been mentioned in any info on the site (except a disclaimer at the bottom) so why break habit, eh?


----------



## Solly (24 September 2009)

*"Homeless Storm client slams bank"*

"A FORMER client of failed Storm Financial says he is having to live in a garage after the Bank of Queensland forced him to sell his home.

Before the collapse of Storm and the failure of his investment portfolio, Mark Schabas, a 63-year-old technician, was living comfortably in retirement at his Elizabeth Bay unit in Sydney."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/09/24/81401_news.html


----------



## Farencue (24 September 2009)

welcome back Big Max, we have missed your one eyed ramblings


----------



## bunyip (24 September 2009)

Big Max said:


> Emmanuel and Julie had a phrase hard-wired into its computer-based Statement of Advice to the effect that (I am paraphrasing) "you do not have sufficient assets to finance a comfortable retirement . . .", thereby encouraging everyone to liquidate what they termed "lazy" or "dormant" assets and put the cash into Storm. Every other element in the computer-based matrix was alterable (name, address, dependents etc.) except for this phrase. So, regardless of whether you had $20,000 or $20 million in the bank, Storm's SoA said you didn't have enough assets to fund a comfortable retirement. Doesn't that say it all . . .?:22_yikes:




OK - So why don't SICAG divulge this sort of information on their website?
What you're implying is dishonesty on the part of Storm - namely, that they misled some people by telling them their assets were insufficient to comfortably fund retirement, regardless of how large their asset base may have been.

This is the sort of information that needs to be brought out in the open so as to give Storm as much negative publicity as possible. The more negative publicity they get through having their dishonesty and unscrupulous dealings revealed, the greater the likelihood of them being brought to justice.
And isn't that what SICAG is all about - justice for Storm clients?


----------



## DocK (24 September 2009)

bunyip said:


> OK - So why don't SICAG divulge this sort of information on their website?
> What you're implying is dishonesty on the part of Storm - namely, that they misled some people by telling them their assets were insufficient to comfortably fund retirement, regardless of how large their asset base may have been.
> 
> This is the sort of information that needs to be brought out in the open so as to give Storm as much negative publicity as possible. The more negative publicity they get through having their dishonesty and unscrupulous dealings revealed, the greater the likelihood of them being brought to justice.
> *And isn't that what SICAG is all about - justice for Storm clients?*




Bunyip, I'm not a member of SICAG so this is purely my own uninformed opinion, but I think you'll find that SICAG is all about *compensation* for ex-storm clients, and are either unconcerned with "justice" as such, or happy to leave that aspect to ASIC, parliamentary enq and/or the legal system.

Just my


----------



## Rainbow (24 September 2009)

DocK said:


> From the above linked article...
> 
> _Part of the agreement Mr McCulloch detailed was to lift the maximum loan-to-value ratio to 85 per cent for Storm clients with margin loans from Macquarie - increasing the maximum that Storm's clients could lose if they were sold out at that level.
> 
> ...




Hi, I was with Macquarie. One of the calls I received from them said I was in Margin Call at something like 137%. I don't recall signing paperwork that allowed them to increase the LVR, but it's obvious Storm arranged it with Macquarie who were happy to accept. My 'Financial advisor' told me not to deal with the Bank, when they rang, but to refer them to him. Macquarie has advised me that is has "decided not to pursue the outstanding amount on my loan", ie the negative equity.... lucky me. Just when I was ready to give them one on my kids in exchange.... I can't win a trick!


----------



## DocK (24 September 2009)

Hi Rainbow,

If you don't mind me asking - did you receive any communication from either Macquarie or your "adviser" prior to the margin call at 137% lvr?  I find it absolutely amazing that the lvr was permitted to deteriorate to such a ridiculous level before any action was taken????  Do you know why you weren't sold out earlier?  I'm assuming you weren't aware of the situation yourself?

Sorry to hear you're now stuck with your kids  (joking) but it's extremely fortunate for you that Macquarie aren't going to pursue you for the outstanding loan amount - is it because they stuffed up perhaps?


----------



## bunyip (24 September 2009)

Big Max said:


> Well stated DocK. It's a shame GG, Ironhalo, Darkside, Farencue, Bunyip et al are so blinkered and fixated on moneyspidercentral that they can't smell the roses. Woof woof.:couch




Maxie

I'm actually pretty good at smelling the roses....I smelled thousands of them last weekend at the Toowoomba Carnival Of Flowers!! 

Seriously Max - most of us who have had any criticism of SICAG have also acknowledged the good work they've done in bringing the banks to the negotiating table and getting them to admit their failings in relation to Storm investors. 
You already know this - so why keep harping on about smelling the roses?
And as for your _'woof woof'_ comments - better to leave them out - they only make you look childish.

Our criticism is simply that SICAG...

*endorse the Storm fees model on their website

*have people on the SICAG committee whose presence constitutes a conflict of interest

*have been noticeably silent in regard to revealing information about the dishonest and unscrupulous dealings of Storm Financial....information that could increase the likelihood of Storm principles and advisors facing criminal charges

Good on SICAG for working towards bringing the banks to account for any wrongs they may have committed. 
But it wasn't just the banks who were at fault - any fool can see that Storm were also at fault. They deserve to be brought to justice just as much as the banks do....irrespective of the fact that there's virtually no chance of getting financial compensation from anyone in the former Storm Financial.
SICAG needs to recognise this fact, and work towards getting charges laid against _*all*_ the appropriate people rather than focusing solely on the banks.


----------



## Julia (24 September 2009)

When is the enquiry due to resume?  I'd been told it was today, through to 29 September, then October 12 - 30, but the Parliamentary website has no reference to it.

Would appreciate any info.  Thanks.


----------



## Judd (24 September 2009)

Julia, I believe you may be referring to dates concerning Federal Court issues rather than the Parliamentary Inquiry.

http://www.theage.com.au/business/storm-founders-summonsed-to-give-evidence-20090924-g3if.html



> Storm founders summonsed to give evidence
> September 24, 2009 - 11:11AM
> 
> The founders of failed advisory firm Storm Financial have been summonsed to appear at a Federal Court public examination next week.
> ...


----------



## Solly (24 September 2009)

* EC & JC have been summonsed to appear in court Monday 28/9/09*

more to come...


----------



## Steve Borden (24 September 2009)

Solly said:


> * EC & JC have been summonsed to appear in court Monday 28/9/09*
> 
> more to come...




I am informed that BoQ were to appear this morning and produce documents but didn't show.


----------



## cuttlefish (24 September 2009)

Big Max said:


> cuttlefish said:
> 
> 
> 
> ...





My point is that the irresponsible behaviour of Storm has not only cost Storm investors a lot of money - it has also cost the banks and (thus bank investors) a lot of money.   A responsible financial advice firm does not encourage or support its clients entering into irresponsible lending arrangements inappropriate for their risk profile and their stage of life.  But more significantly, a responsible financial advice firm would understand its clients financial situation enough to ensure that up to date and accurate information was included on completed loan documentation and would certainly not authorise or encourage the submission of inflated income or asset figures for loan applications.

If Storm staff knowingly encouraged or allowed incorrect information to be included on loan application forms then they were not only showing disregard for their clients, but they were also showing disregard for their business partners - the banks.  If this is the case then that is behaviour that is unethical to both parties, and it appears to be greed driven behaviour.

But based on your comments, SICAG doesn't care about ethics either it would appear - its not about who is to blame, its about who has the money.  Just get the money - thats all that was important to Storm, and thats all thats important to SICAG.  

Greed without responsibility being repeated again.


----------



## Julia (24 September 2009)

Judd said:


> Julia, I believe you may be referring to dates concerning Federal Court issues rather than the Parliamentary Inquiry.
> 
> http://www.theage.com.au/business/storm-founders-summonsed-to-give-evidence-20090924-g3if.html



Ah, that will be it.  Thanks, Judd.
Is the enquiry that was being broadcast via the Parliamentary website over now, or is there more to come?



cuttlefish said:


> My point is that the irresponsible behaviour of Storm has not only cost Storm investors a lot of money - it has also cost the banks and (thus bank investors) a lot of money.   A responsible financial advice firm does not encourage or support its clients entering into irresponsible lending arrangements inappropriate for their risk profile and their stage of life.  But more significantly, a responsible financial advice firm would understand its clients financial situation enough to ensure that up to date and accurate information was included on completed loan documentation and would certainly not authorise or encourage the submission of inflated income or asset figures for loan applications.
> 
> If Storm staff knowingly encouraged or allowed incorrect information to be included on loan application forms then they were not only showing disregard for their clients, but they were also showing disregard for their business partners - the banks.  If this is the case then that is behaviour that is unethical to both parties, and it appears to be greed driven behaviour.
> 
> ...



This is certainly my impression also and is providing its own version of amorality.


----------



## Solly (24 September 2009)

*"Fear could cost investors' justice: Storm group
Nothing to fear or loose"*

"Fear and distrust is preventing ex-Storm Financial clients from signing up to the CBA's resolution scheme."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7470.htm


----------



## Solly (24 September 2009)

*"Storm founders summonsed for evidence"*

"The first day of a public examination in the Federal Court in Brisbane on Thursday heard Storm founders Emmanuel and Julie Cassimatis had been summonsed to appear on Monday."

More from AAP in The Age

http://news.theage.com.au/breaking-news-national/storm-founders-summonsed-for-evidence-20090924-g3jc.html


----------



## Solly (24 September 2009)

*"Storm public inquiry begins in Brisbane"*

A public examination of the failed advisory firm Storm Financial is underway in Brisbane.

The first witness is due to give evidence tomorrow.

More by By Jason Rawlins from The ABC here;

http://www.abc.net.au/news/stories/2009/09/24/2695417.htm


----------



## Quincy (24 September 2009)

Solly said:


> *"Fear could cost investors' justice: Storm group
> Nothing to fear or loose"
> 
> "Fear and distrust is preventing ex-Storm Financial clients from signing up to the CBA's resolution scheme."
> ...



*


Simple carelessness leads some people to write loose when they mean lose. For a journalist to make this error however, well  . . . . .*


----------



## Solly (24 September 2009)

Quincy said:


> Simple carelessness leads some people to write loose when they mean lose. For a journalist to make this error however, well  . . . . .




Hey Quincy,  might have been a mistake by the sub, I'd hate to check may posts made at 11:30 pm on a Friday night especially when trying to compose a smartar*e reply to gg...:


----------



## specialed (24 September 2009)

bunyip said:


> OK - So why don't SICAG divulge this sort of information on their website?
> What you're implying is dishonesty on the part of Storm - namely, that they misled some people by telling them their assets were insufficient to comfortably fund retirement, regardless of how large their asset base may have been.
> 
> This is the sort of information that needs to be brought out in the open so as to give Storm as much negative publicity as possible. The more negative publicity they get through having their dishonesty and unscrupulous dealings revealed, the greater the likelihood of them being brought to justice.
> And isn't that what SICAG is all about - justice for Storm clients?






cuttlefish said:


> My point is that the irresponsible behaviour of Storm has not only cost Storm investors a lot of money - it has also cost the banks and (thus bank investors) a lot of money.   A responsible financial advice firm does not encourage or support its clients entering into irresponsible lending arrangements inappropriate for their risk profile and their stage of life.  But more significantly, a responsible financial advice firm would understand its clients financial situation enough to ensure that up to date and accurate information was included on completed loan documentation and would certainly not authorise or encourage the submission of inflated income or asset figures for loan applications.
> 
> If Storm staff knowingly encouraged or allowed incorrect information to be included on loan application forms then they were not only showing disregard for their clients, but they were also showing disregard for their business partners - the banks.  If this is the case then that is behaviour that is unethical to both parties, and it appears to be greed driven behaviour.
> 
> ...




Bunyip and Cuttlefish, you still make me laugh.. how many blogs is it going to take for you to understand that "blaming storm" or going after them will do nothing to save the homes of the storm investors currently fighting off the banks...As  Dock said, let ASIC, Senate inquiry and the liquidators go after manny and storm, let SICAG concentrate on saving the lives of the investors who now have nothing...What purpose is served by SICAG  "blaming storm" if ASIC have given so much money towards a public inquiry that will find out who is too blame. Let others worry about who is to blame...let SICAG go after a little bit of financial security for its members... Some people really have NO idea..


----------



## specialed (24 September 2009)

bunyip said:


> Maxie
> 
> I'm actually pretty good at smelling the roses....I smelled thousands of them last weekend at the Toowoomba Carnival Of Flowers!!
> 
> ...




Tell me, why does SICAG need to concentrate on getting charges laid..you obviously have no understanding of SICAG or this whole mess. The banks have admitted some fault, and are starting a process of compensation...There are currently three inquiries, Senate, ASIC and Liquidators..The combined resources of which must be in th hundreds of millions. ASIC alone has giving how much ?? to the liquidators to understake a public inquiry, despite runing their own investigation at the same time...SICAG resources... a few volunteers fighting to save their own homes while at the same time serving as advocates and a support network for hundreds (if not thousands) who have lost everything.... If three inquiries cant identify where charges should be laid, what hope has a commitee, chaired by volunteers who are at the same time fighting to save their own homes got.  Please, lets at least keep a sense intelligence about this forum...


----------



## cuttlefish (24 September 2009)

specialed said:


> Bunyip and Cuttlefish, you still make me laugh.. how many blogs is it going to take for you to understand that "blaming storm" or going after them will do nothing to save the homes of the storm investors currently fighting off the banks...As  Dock said, let ASIC, Senate inquiry and the liquidators go after manny and storm, let SICAG concentrate on saving the lives of the investors who now have nothing...What purpose is served by SICAG  "blaming storm" if ASIC have given so much money towards a public inquiry that will find out who is too blame. Let others worry about who is to blame...let SICAG go after a little bit of financial security for its members... Some people really have NO idea..




specialed what will it take you to realise that banks aren't charity organisations but are privately run institutions owned by shareholders and weren't put on this earth to bail out people that acted irresponsibly (under the encouragement of their financial advisor) and took on debt levels that were unmanageable and risky - and it appears in many cases provided false or misleading information about their income and assets in order to obtain these debt levels.

For the component of this that is the banks fault - yes they should pay - but to just go after the banks 'because they have the money' is unethical.

I also doubt that those people that obtained these irresponsible debt levels using misleading information - had they made large profits instead of large losses -  would have turned around and happily paid back the profits to the bank if the error had been brought to light by them. 

Of course I have sympathy for the people that lost their homes and assets in this debacle, but that doesn't mean I support a blatant money grab from the banks. There are plenty of people that are victims of circumstance in life that lose their jobs, houses and assets and the banks aren't expected to bail them out either.

I still think a lot of Storm victims actually believe that the banks are the primary cause of their problems and really don't realise that this issue was primarily the result of Storm financials cr*p advice and complete lack of appropriate risk mitigation strategies, internal monitoring procedures and quality control.


----------



## specialed (24 September 2009)

bunyip said:


> Cuttlefish - a very good post.
> 
> One particularly relevant point you make is that investors have a responsibility to themselves for monitoring their investments and their debt servicing obligations.
> 
> ...




What an idiotic comment...the evidence is now clearly showing (by CBA's admission in Sydney) that the data on the CGI website was inaccurate much of the time. How could Storm investors have monitored their inventments and taken "defensive action" when the data they had available was days out of date at a time when the market was droping by 400 points a day. If CBA and CGI cant "sell" and supply a product that works effectively then they shouldn't be able to sell it, or should be held accountable for its failure...


----------



## cuttlefish (24 September 2009)

specialed said:


> ... Some people really have NO idea..






			
				specialed said:
			
		

> Please, lets at least keep a sense intelligence about this forum...




refrain from the personal insults please.


----------



## specialed (24 September 2009)

Monario said:


> My goodness, its hard to belive all that has happened and still more comes out, and continues to go on!!
> 
> These Banks, and companies, executives, board sitters etc. need to be taught a lesson!! I just wonder who will have the Kahunas to do it..
> 
> If every Aussie drew there funds out of Banks for just 1 week, I would like to see how they would scramble to find out why and make any ammends needed. Once a Bastard always a Bastard!!




Agreed !!!! The only problem is the government would again prop them up...nothing like a false capitalist economy....


----------



## cuttlefish (24 September 2009)

specialed said:


> What an idiotic comment...the evidence is now clearly showing (by CBA's admission in Sydney) that the data on the CGI website was inaccurate much of the time. How could Storm investors have monitored their inventments and taken "defensive action" when the data they had available was days out of date at a time when the market was droping by 400 points a day. If CBA and CGI cant "sell" and supply a product that works effectively then they shouldn't be able to sell it, or should be held accountable for its failure...




How would the strategy have changed if the data was up to date?  The market had been falling heavily for many months already by that stage yet Storm still didn't advise clients to reduce their excessive debt levels in order to protect important assets like the family home. I also suspect that due to the heavy falls that had already occurred many clients were probably already well and truly underwater on paper anyway and so no margin call was likely to help them.  Storm doesn't appear to have had a strategy for properly mitigating client risk here - they were relying on markets to recover by the looks of it and hoping the investors 'cash buffer' would last long enough for that to happen.  There was never any guarantee that would happen.


----------



## Ironhalo (24 September 2009)

Specialed, trust me mate, I was a Storm 'victim', as well as most of my family. I place blame on my own shoulders, the banks for giving me a margin loan and then selling it at rock bottom three and a half weeks later, but mostly to the schmucks at Storm who ignored my phone-calls when I was trying to find out what was going on; and to Emmanuel/Julie Cassimatis for forcing their staff not to sell anyone's positions up, when some of the Storm advisers were doing the very same with their own investments.

As it was said in the parliamentary hearing, thousands of people around Australia were getting margin calls in the thick of the GFC. Why was it that it seemed only Storm clients were the ones who were only getting told by their advisers they were in margin call when they were 20-30% into negative equity? It the banks were solely to blame, then we would be hearing about the other thousands of non-Storm customers who were screwed by the CBA/Colonial/BoQ/Mac Bank. You know why we haven't? Because they all had advisers who did the job they were paid and entrusted with, which was monitoring THEIR client's investments. Sure they may have lost some money when they converted to cash, but I can guarantee a fair majority of them would be back in the market, and not many of them would have had their houses sold from under them.

What really offends me, is that the perpetrators of this neglect are sitting in a palatial mansion barely over the other side of Moreton Bay in Brisbane, and yet no one seems to begrudge this. What is wrong with you people? Of course Manny took your money! He's probably online right now, checking his Swiss/Cayman Island balance and breathing a sigh of relief that he was able to offload it all offshore before it all hit the fan! And yet they both talk of 'seeking justice for their clients'. Here's the calibre of the people who were the architects of your downfall:
- They depleted a company that was managing billions of dollars worth of investments of over $20+ million dollars in the space of a few months. No one knows where this money went to this day, and yet the fact a company so large can go under due to a bank asking for about $20 million to be repaid is truly laughable. But it's the banks fault that Storm were insolvent due to the Cassimatis' addiction to extracting the majority of the company's revenue into their own personal bank accounts, obviously.
- They bullied clients who tried to forcibly sell out and told them to 'stick with their plan'.
- They gave 'private loans' to some customers....who knows, did this money recycle its way back in to their hands a few months later?
- When it all went downhill they fired their 110-120+ staff without pay or entitlements....but not before trying to backdoor another $3+ million into their own coffers by signing a family member to their now depleted board.
- It appears they had inadequate insurance.
- They made no submission to parliament to explain their actions.
- When asked to explain what went wrong in person, they throw sickies. 
- They try and admit evidence to a parliamentary hearing so that they can't be held accountable for the same evidence in a legal setting.

The SICAG website says 'we're angry as hell and we're not going to take it anymore!'. You bloody well should be. No one expects SICAG to do detective work to bring Manny down for his crimes and neglect. But it would be sure as hell nice to see a little bit of responsibility thrown on the Cassimatis shoulders on the website. Why is it that the name Cassimatis has not been used in vain ONCE on that website? I understand going after the banks for compensation, hell take what you can get, power to you. But would it hurt to blame Storm too? Apparently, that's a no go area, and no one can tell us why. Does a child in Ethiopia die if the name 'Cassimatis' appears on the SICAG site in the form of some news update? I am sure there are a lot of SICAG members who are wondering the same thing. Tell me, were these members contacted by Redcliffe ex-Storm personnel like my family were; pompously seeking trail commissions on the pre-paid interest refunds from the failed margin loans these same people marketed so fiercely?

And yet you hardcore SICAG members wonder why some people looking at this objectively and with a small sense of renewed pessimism/caution, may wonder what the underlying SICAG agenda is; or more accurately, why some SICAG affiliates/relatives are swooping over the vulnerable SICAG congregation like carrion birds? But no, don't ask questions, because like the US Patriot Act, 'you're either with us, or against us.' You refer to our comments as 'idiotic', 'un-informed' and goad us to renounce our views using your fanatical, chest-beating zealotry. 

Seriously, some of you need to wake up. It's that same blind faith that got you into this situation.


----------



## specialed (25 September 2009)

Garpal Gumnut said:


> Maxie, tell Mr.Weir, his son, and Mr.Jelich, that Manny has more than one cupboard, probably up to 20 that I've been told about, and that the SICAG model of supporting the Storm model on its front page is wrong, very very wrong and of much distress to many victims in Townsville.
> 
> It may go down well in Redcliffe but not in Townsville.
> 
> ...





Your conspiracy theories about cupboards sits well in this forum as much of what I have read here is based on rumour, uninformed beliefs and ridiculous lies. I must have missed your submission to the senate inquiry detailing the  20 cupboards of Manny's that you refer to. Having obviously not detailed this information in a senate submission, I'm sure you have bought to light the detailed insider knowledge you espouse to have in a letter to either ASIC or to the Worrells inquiry. In which case I thank you because I'm sure your detailed knowledge of this matter  and apparently the finances and motives of everyone involved will help bring those at fault to justice..


----------



## specialed (25 September 2009)

Big Max said:


> You would be a welcome guest at any of SICAG's meetings. I'll even pick you up. You will be aghast to discover a group of dedicated individuals who have put their personal losses (collectively estimated at several million dollars) while they fight for justice, solace and compensation for people like your rellies. No, they won't be sitting around in white sheets plotting Machiavellian strategies while waiting for Manny to ring in with his riding instructions. How disappointing for you and other SICAG sceptics. Seriously, come to a meeting and be amazed at the thousands of selfless man-hours being voluntarily devoted to this important cause. Everything that is happening, about to happen and being commented on in this forum has not occurred by accident or by the words of anonymous posters in the ASF fishbowl. Big Max




Something tells me Ironhalo will not show up. The fear of being shown exactly how ridiculous and uninformed so many of the contributions to this forum have been will be enough to keep those who continue to espouse ridiculous conspiracy theories away...but they do make entertaining reading, I have never been so interested in reading fiction.


----------



## GumbyLearner (25 September 2009)

specialed said:


> Something tells me Ironhalo will not show up. The fear of being shown exactly how ridiculous and uninformed so many of the contributions to this forum have been will be enough to keep those who continue to espouse ridiculous conspiracy theories away...but they do make entertaining reading, I have never been so interested in reading fiction.




It would never beat Stalingrad? Wholesale asset stripping and shaming was done away with when the likes of Alan Bond, Christopher Skase, Stan Howard (John Howard's Brother ) and the HIH crew etc...

As if anything will change now!

Give me a Saatchi & ditto exec to gloss it up anyday!  But that's just me.


----------



## specialed (25 September 2009)

cuttlefish said:


> specialed what will it take you to realise that banks aren't charity organisations but are privately run institutions owned by shareholders and weren't put on this earth to bail out people that acted irresponsibly (under the encouragement of their financial advisor) and took on debt levels that were unmanageable and risky - and it appears in many cases provided false or misleading information about their income and assets in order to obtain these debt levels.
> 
> For the component of this that is the banks fault - yes they should pay - but to just go after the banks 'because they have the money' is unethical.
> 
> ...





Lets see what three inquiry's have to offer....I'm sure wherever blame lies it will be found......In the meantime the "privately run institutions owned by shareholders" ie the CBA, are already admitting some responsibility. If you were or are a shareholder would you want them to admit all their responsibility straight away, or hold back just in case they can escape some of the blame, and minimise the impact on their share price . I agree, there are many people that are victims of circumstance in life that lose their jobs, houses and assets and the banks aren't expected to bail them out either. However the evidence is continuing to show that these people were not victims of circumstance, but rather it seems their losses are a direct result of the practices of the CBA…and storm. To which the CBA has already admitted some fault, albeit an attempt to mitigate their culpability and overall losses…..


----------



## Judd (25 September 2009)

specialed said:


> What an idiotic comment...the evidence is now clearly showing (by CBA's admission in Sydney) that the data on the CGI website was inaccurate much of the time. How could Storm investors have monitored their inventments and taken "defensive action" when the data they had available was days out of date at a time when the market was droping by 400 points a day. If CBA and CGI cant "sell" and supply a product that works effectively then they shouldn't be able to sell it, or should be held accountable for its failure...




The CBA didn't actually say what you claim but putting that aside I would appreciate your view on these aspects:

Was the data only inaccurate when the market was sinking or was it always inaccurate from say 2002?

If the data being supplied to Storm was inaccurate during the market downturn, especially over the period October-November, why was it sufficiently accurate enough for the other 7,000 dealer groups with CGI margin loans to be able to deal effectively with their client's funds?

To put it another way, why couldn't Storm do the same as the other dealer groups in managing their clients funds when they were, presumably, receiving the same inaccurate information as Storm was?


----------



## specialed (25 September 2009)

I would be interested to know, in 12 months time, the exact number of contributors (Storm investors) to this forum who, while continuning to do their utmost to discredit the motives of SICAG, stand to benefit from the thousands of hours of work they have put in. Ask yoursleves, would we even be discussing a senate inquiry, ASIC and worrells if not for their labor....


----------



## GumbyLearner (25 September 2009)

specialed said:


> I would be interested to know, in 12 months time, the exact number of contributors (Storm investors) to this forum who, while continuning to do their utmost to discredit the motives of SICAG, stand to benefit from the thousands of hours of work they have put in. Ask yoursleves, would we even be discussing a senate inquiry, ASIC and worrells if not for their labor....




That's the whole point right!

There are people here who are more the happy to join in the hungi!


----------



## GumbyLearner (25 September 2009)

specialed said:


> Agreed !!!! The only problem is the government would again prop them up...nothing like a false capitalist economy....




Well said


----------



## specialed (25 September 2009)

Judd said:


> The CBA didn't actually say what you claim but putting that aside I would appreciate your view on these aspects:
> 
> Was the data only inaccurate when the market was sinking or was it always inaccurate from say 2002?
> 
> ...




That is an interesting proposition. If they were indeed recieving the same inaccurate data that it appears (or is proposed) that storm clients were able to access, then maybe they should also be asking of their advisors, "Was the data accurate".

 I see Commsec on TV every night, and if the CBA they couldn't ensure that the CGI data was always acurate, how can i be sure about other CBA owned entities. And secondly, were the other dealer groups, all 7000, dealing with a specific "Storm badged or branded" fund that was sold up, after clients were pushed significantly beyond the LVR that they had agreed, or thought they had, with the CBA. Who i might add the CBA had a contractual agreement with.....


----------



## GumbyLearner (25 September 2009)

specialed said:


> That is an interesting proposition. If they were indeed recieving the same inaccurate data that it appears (or is proposed) that storm clients were able to access, then maybe they should also be asking of their advisors, "Was the data accurate".
> 
> I see Commsec on TV every night, and if the CBA they couldn't ensure that the CGI data was always acurate, how can i be sure about other CBA owned entities. And secondly, were the other dealer groups, all 7000, dealing with a specific "Storm badged or branded" fund that was sold up, after clients were pushed significantly beyond the LVR that they had agreed, or thought they had, with the CBA. Who i might add the CBA had a contractual agreement with.....




Look the PM is a Queenslander

The Treasurer is a Queenslander

Where's Bill Ludwig?

The key is people have been ripped off and deserve a better deal.

Hayden got rolled by Bob Hawke nee Renouf.

It's about time to sow the seeds where they count!!


----------



## Ironhalo (25 September 2009)

Specialed, your quickfire number of posts in quick succession only really serve to vindicate the opinion of a number of people here that you are a zealot, like your good pal Maxy. 

You can attempt to discredit and scoff at anything I say all you like. But it doesn't change the fact that one of my family members rang me here in Sydney earlier in the year seething with rage because an ex-Storm employee related to one of the SICAG board members rang them up and asked them to nominate them as 'their financial adviser' for the sake of getting a cut of a failed margin loan pre-paid interest refund. How many vulnerable people has this snake tried to take a further financial gain from their misery?

Here's why I won't go to one of your SICAG meetings, in no particular order:
1. I live in Sydney. My family lives in Redcliffe. 
2. They refuse to publicaly lay any blame on Manny's shoulders.
3. The SICAG website practically endorses Storm's outrageous fee model.
4. Ron Jelich now waves the SICAG flag. He pretty much stood back and watched as my single mother's last 30 years of blood, sweat and tears in raising us in her own home went up in smoke because the company he erroneously sold out to neglected their clients when they needed them most....despite taking millions of dollars in fees.
5. A relative of a SICAG committee member tried to elicit business from my family after the fact, despite having a hand in their financial downfall.
6. I don't feel the need to have someone hold my hand and tell me it will be OK, my family is doing enough of that on their own. 
*
SICAG has done some great work, I don't dispute that (and I have repeatedly said that), and I know there are many people there with hearts of gold who are providing a great shoulder for those who need it.* By the power of Greyskull, how many more times do I have to say this?

I just don't understand why they refuse to say one bad word about Manny's actions, one update on how Manny is trying to justify this to his ex-clients, or publically blame the flawed Storm model and staff which directly led to SICAG members being in the situation they are now in.

Until I/we see a member of SICAG publicaly attribute some portion of blame to the Cassmiatis', the principals and directors, or the staff that were earning trailing bonuses on step-investments as they drove their clients into inescapable and catastrophic debt, we have every right to be suspicious. It doesn't mean I don't look at the good things SICAG does, it means that I am being cautious and objective given the circumstances.

Someone here presents a train of thought, or a view that differs to your own, and you and Maxy start rapidly name calling and chest beating like a pack of 15 year old schoolboys. Seriously?


----------



## GumbyLearner (25 September 2009)

GumbyLearner said:


> Look the PM is a Queenslander
> 
> The Treasurer is a Queenslander
> 
> ...




Problem is that most of you blokes hate the ALP and have been subject to financial rip-offs because of previous torie governments! Allowing financially speculative institutions to market to your weaknesses! I feel for you!


----------



## Solly (25 September 2009)

*"BoQ chief David Liddy defends Storm Financial dealings"*

*"I APPEARED before the Joint Parliamentary Committee on Corporations and Financial Services in Canberra last week to give evidence about the bank's dealings with former customers of Storm Financial."*

*Article by David Liddy Managing Director and Chief Executive Officer of Bank of Queensland, in the Courier Mail is here;*

*http://www.news.com.au/couriermail/story/0,23739,26119591-3122,00.html*


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## Solly (25 September 2009)

*"Bank sits tight on photocopier bills"*

"Bank (of Queensland) representatives failed to appear at the Federal Court hearing on the matter in Brisbane yesterday, due to a squabble over photocopying costs."

More in CBD in The SMH here;

http://www.smh.com.au/business/bank-sits-tight-on-photocopier-bills-20090924-g4q5.html


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## Judd (25 September 2009)

specialed said:


> That is an interesting proposition. If they were indeed recieving the same inaccurate data that it appears (or is proposed) that storm clients were able to access, then maybe they should also be asking of their advisors, "Was the data accurate".
> 
> I see Commsec on TV every night, and if the CBA they couldn't ensure that the CGI data was always acurate, how can i be sure about other CBA owned entities. And secondly, were the other dealer groups, all 7000, dealing with a specific "Storm badged or branded" fund that was sold up, after clients were pushed significantly beyond the LVR that they had agreed, or thought they had, with the CBA. Who i might add the CBA had a contractual agreement with.....




A neat way of avoiding an answer to the actual questions.  As Ironhalo wrote in a post:



> As it was said in the parliamentary hearing, thousands of people around Australia were getting margin calls in the thick of the GFC. Why was it that it seemed only Storm clients were the ones who were only getting told by their advisers they were in margin call when they were 20-30% into negative equity? It the banks were solely to blame, then we would be hearing about the other thousands of non-Storm customers who were screwed by the CBA/Colonial/BoQ/Mac Bank. You know why we haven't? Because they all had advisers who did the job they were paid and entrusted with, which was monitoring THEIR client's investments.




By implication there was no need for client's of other dealer groups to raise the question "Was the data accurate" as they were seemingly being properly managed.

Again, I pose the very simple issue:

Why couldn't Storm do the same as the other dealer groups in managing their clients funds when they were, presumably, receiving the same inaccurate information as Storm was?

Naturally, the question does assume that there was any equity left to manage given that, according to evidence provided to the Parliamentary Inquiry, the four CBA/Storm indexed funds, over a period of some six weeks, went from a value of around $700M to $46M due to redemptions, on instructions from Storm, and the market downturn.  No need to respond if you wish to use that aspect as an "out" in avoiding any criticism of the business model Storm and its advisers sold to you.  It will be taken as a given.


----------



## Judd (25 September 2009)

By the way, in the matter of redemptions, it does raise some thoughts.  It was mentioned by one poster, and I believe Carey Ramm expressed an interest in the matter, that when contacting his/her adviser to sell out, the poster was informed "I've sold out but I've been told not to sell you out" or words to that effect.

When redemptions occur, unless there is new money going in, it tends to reduce the equity in the funds and leave remaining investors with a reduced stake and, in Storm's case, supported by a bucket load of debt.   So there is a little bell starting to ring in the back of my cynical mind.  Who were the fortunate ones to get out?  General clients or certain others with specific knowledge? Were the unactioned requests for redemptions effectively pointless as the value of those requests exceeded the equity left in the funds before they were closed?

Machiavellian?  Nah, would never happen, would it?


----------



## Smiley (25 September 2009)

Ironhalo, I am a stormified person, and totally endorse and was glad to read your summaries on page 182 of this forum.  
I appreciate the work SICAG has done but without critiquing, distancing, and rejecting everything storm, it is a weak vehicle of justice for us. EC and JC and all ex-advisers need to be held to account for their actions. 
History will repeat itself; other scammers, conmen will come along and those like us, though hard working and striving to improve our lot, will trust others with our money and jump into a financial planning scheme.  
I take responsibility for walking in the doors of storm and not walking out quickly enough when alarm bells rang; but I also am furious that I was blocked from getting out.
Would like to see SICAG ask specifically for EC and JC to be brought to justice, for their assets to be tracked and eveything that can be gotten, taken. 
I have spoken to dozens of elderly stormified who are shattered at losing their homes, livelihoods and some of those EC phoned at the last minute end of 2008 to enrich his coffers through new massive loans. Let's see true justice - 
Can hardly believe that none of you redcliffe and brisbanites have not asked EC & JC for a bit of camping space on that massive lawn of their belmont palace.  I know some people up north who were attracted to the Cassimati's idea of a retirement park - here's their chance to do something for some of the stormfied who are struggling and almost to their last breath.


----------



## Ironhalo (25 September 2009)

Thanks for your kind comments Smiley. I hope you and your family are bouncing back.

You are dead right, the only time I will consider this whole debacle done and dusted is when Manny is sitting in shackles contemplating his own greed, and his minions are banned from practising their toxic trade for a long time to come.


----------



## specialed (25 September 2009)

Ironhalo, I feel for you as much as everyone else involved in this mess. I suppose I just see little point in criticising what SICAG does or does not have on its website when it is glaringly obvious what they have already managed to achieve for their members. Which I realise you HAVE acknowledged. 

If at the end of this mess, SICAG  offer their support behind Manny and co, if and when they face charges then some questions will need to be asked. In the meantime, keep your friends close and your enemies closer.  It would be litigation suicide to criticise or go after storm while they still might hold information useful in holding the banks to account. Would you provide information and support  to someone who was at the same time trying to go after you. The banks obviously are the only institution that is able to provide  financial restitution to so many storm investors. No matter how much money Manny is purported to have hidden away, it will not go anywhere close to helping all the storm investors who are currently trying to keep a house over their heads. One fight at a time surely. 

And what purpose is served by issuing statements regarding the deficits of the Storm model on the SICAG website. I’m sure the investors are all well aware, as are contributors to this forum of the result of the storm model as they face financial devastation.  I  don’t see what good will be served by reminding them of it on the SICAG website. There will be plenty of time, and plenty people who will be well informed to do this, following the three current inquires. Remember, SICAG was set up to support its members. If you don’t agree with their modus operandi, then you don’t become a member, its simple. The fruits of their labour will be available to members and non members alike. In the meantime the intellectual capacity of the contributors to this forum may be put to better use in petitioning the banks to explain to its shareholders why the their CEO’s continue to get pay rises in the face of what have been appalling banking practices rather than worrying about what SICAG is doing or not doing. I do think it will be a shame if the only people to face charges at the end of this are EC and co, when it is becoming obvious that a number of the banks have engaged in quite deceptive practices. I draw your attention to the differences in CBA and BOQ submissions compared to the evidence they have been forced to give at the inquiry.


----------



## Ironhalo (25 September 2009)

Totally agree Specialed, but keeping Manny 'close' isn't really a valid game plan mate, the lawyers, ASIC and all involved have enough dirt on him that they won't need his collaboration. Not that Manny has anything of substance to add anyway.

The sad thing is, is that Manny has tried on many occasions to distance himself from his own mess....I found the way he tried to table documents that could obviously incriminate him at the parliamentary hearing was laughable, and I'm glad the committee jumped all over him for it early!

Interesting to see how Monday goes and whether Julie will be 'feeling unwell.'


----------



## Big Max (25 September 2009)

specialed said:


> Ironhalo, I feel for you as much as everyone else involved in this mess. I suppose I just see little point in criticising what SICAG does or does not have on its website when it is glaringly obvious what they have already managed to achieve for their members. Which I realise you HAVE acknowledged.
> 
> If at the end of this mess, SICAG  offer their support behind Manny and co, if and when they face charges then some questions will need to be asked. In the meantime, keep your friends close and your enemies closer.  It would be litigation suicide to criticise or go after storm while they still might hold information useful in holding the banks to account. Would you provide information and support  to someone who was at the same time trying to go after you. The banks obviously are the only institution that is able to provide  financial restitution to so many storm investors. No matter how much money Manny is purported to have hidden away, it will not go anywhere close to helping all the storm investors who are currently trying to keep a house over their heads. One fight at a time surely.
> 
> And what purpose is served by issuing statements regarding the deficits of the Storm model on the SICAG website. I’m sure the investors are all well aware, as are contributors to this forum of the result of the storm model as they face financial devastation.  I  don’t see what good will be served by reminding them of it on the SICAG website. There will be plenty of time, and plenty people who will be well informed to do this, following the three current inquires. Remember, SICAG was set up to support its members. If you don’t agree with their modus operandi, then you don’t become a member, its simple. The fruits of their labour will be available to members and non members alike. In the meantime the intellectual capacity of the contributors to this forum may be put to better use in petitioning the banks to explain to its shareholders why the their CEO’s continue to get pay rises in the face of what have been appalling banking practices rather than worrying about what SICAG is doing or not doing. I do think it will be a shame if the only people to face charges at the end of this are EC and co, when it is becoming obvious that a number of the banks have engaged in quite deceptive practices. I draw your attention to the differences in CBA and BOQ submissions compared to the evidence they have been forced to give at the inquiry.




specialed, where have you been all my (ASF) life? Your posts are a breath of fresh air. Ironhalo, remember the ancient and tested Chinese military strategy: WHEN ATTEMPTING THE IMPOSSIBLE, DO THE UNEXPECTED. I'll shout you a dim sim when all this is over.


----------



## Julia (25 September 2009)

Ironhalo said:


> Specialed, trust me mate, I was a Storm 'victim', as well as most of my family. I place blame on my own shoulders, the banks for giving me a margin loan and then selling it at rock bottom three and a half weeks later, but mostly to the schmucks at Storm who ignored my phone-calls when I was trying to find out what was going on; and to Emmanuel/Julie Cassimatis for forcing their staff not to sell anyone's positions up, when some of the Storm advisers were doing the very same with their own investments.
> 
> As it was said in the parliamentary hearing, thousands of people around Australia were getting margin calls in the thick of the GFC. Why was it that it seemed only Storm clients were the ones who were only getting told by their advisers they were in margin call when they were 20-30% into negative equity? It the banks were solely to blame, then we would be hearing about the other thousands of non-Storm customers who were screwed by the CBA/Colonial/BoQ/Mac Bank. You know why we haven't? Because they all had advisers who did the job they were paid and entrusted with, which was monitoring THEIR client's investments. Sure they may have lost some money when they converted to cash, but I can guarantee a fair majority of them would be back in the market, and not many of them would have had their houses sold from under them.
> 
> ...



Ironhalo, you've made many excellent posts throughout this thread, and this is yet another example of your providing the questions that so need to be asked.




specialed said:


> Something tells me Ironhalo will not show up. The fear of being shown exactly how ridiculous and uninformed so many of the contributions to this forum have been will be enough to keep those who continue to espouse ridiculous conspiracy theories away...but they do make entertaining reading, I have never been so interested in reading fiction.



Specialed, You are of course under no obligation to explain anything to us, but I'm interested to know your own involvement in this?  Are you yourself a Storm investor who has experienced significant losses?

I wonder why you feel it necessary to make personal and sarcastic attacks in your responses, rather than offer a reasoned defence of whatever your stand is?



Judd said:


> The CBA didn't actually say what you claim but putting that aside I would appreciate your view on these aspects:
> 
> Was the data only inaccurate when the market was sinking or was it always inaccurate from say 2002?
> 
> ...



Exactly.




specialed said:


> That is an interesting proposition. If they were indeed recieving the same inaccurate data that it appears (or is proposed) that storm clients were able to access, then maybe they should also be asking of their advisors, "Was the data accurate".
> 
> I see Commsec on TV every night,



Does this mean that this TV broadcast is your sole means of accessing market information?



> and if the CBA they couldn't ensure that the CGI data was always acurate, how can i be sure about other CBA owned entities. And secondly, were the other dealer groups, all 7000, dealing with a specific "Storm badged or branded" fund that was sold up, after clients were pushed significantly beyond the LVR that they had agreed, or thought they had, with the CBA. Who i might add the CBA had a contractual agreement with.....



You seem to rather be missing the point of the question.




specialed said:


> Ironhalo, I feel for you as much as everyone else involved in this mess. I suppose I just see little point in criticising what SICAG does or does not have on its website when it is glaringly obvious what they have already managed to achieve for their members. Which I realise you HAVE acknowledged.
> 
> If at the end of this mess, SICAG  offer their support behind Manny and co, if and when they face charges then some questions will need to be asked. In the meantime, keep your friends close and your enemies closer.  It would be litigation suicide to criticise or go after storm while they still might hold information useful in holding the banks to account. Would you provide information and support  to someone who was at the same time trying to go after you. The banks obviously are the only institution that is able to provide  financial restitution to so many storm investors.



You, and others on this thread, don't seem to perceive the immorality implied in focusing purely on the banks just on the basis they are the ones which obviously have the money.  The banks should be required to provide compensation directly in accordance with what they may have done wrong, no more and no less.   




> No matter how much money Manny is purported to have hidden away, it will not go anywhere close to helping all the storm investors who are currently trying to keep a house over their heads. One fight at a time surely.



That does not remove the need for clarity and fairness in the attribution of blame to be properly stated.





> And what purpose is served by issuing statements regarding the deficits of the Storm model on the SICAG website. I’m sure the investors are all well aware, as are contributors to this forum of the result of the storm model as they face financial devastation.  I  don’t see what good will be served by reminding them of it on the SICAG website.



For the reason offered above.


----------



## Rainbow (25 September 2009)

DocK said:


> Hi Rainbow,
> 
> If you don't mind me asking - did you receive any communication from either Macquarie or your "adviser" prior to the margin call at 137% lvr?  I find it absolutely amazing that the lvr was permitted to deteriorate to such a ridiculous level before any action was taken????  Do you know why you weren't sold out earlier?  I'm assuming you weren't aware of the situation yourself?
> 
> Sorry to hear you're now stuck with your kids  (joking) but it's extremely fortunate for you that Macquarie aren't going to pursue you for the outstanding loan amount - is it because they stuffed up perhaps?




They didn't take action, because they were too busy making a dollar at my expense....

I wasn't particularly worried, would you believe. I totally trusted my advisor... stupidly had ''all my eggs in one basket'' so to speak, because he said there was "no risk".  In the event of a margin call, he told me that Storm would lend me the money, I would repay them at a later date (after the market bounced back presumably) I was annoyed by the calls from Macquarie - I'd never once spoken to anyone before - I just told them what my advisor said to say which was to call them at Storm.  Eventually, the account went into negative equity of $24,000 - after I had lost my $1.4m portfolio. I was reassured not to worry, Storm said they'd pay the negative equity... I signed a form to say I'd pay them back.. and it was all supposed to be sweet.

Just what the wolf told Little Red Riding Hood....

I figure it's probably one of the banks who bought my shares in the end... might even be Macquarie... what a bargain they would have gotten them for,
plus an extra bonus of negative equity on top (provided they could squeeze it out of you)  ... and they make noises about compensating people... you know they just can't - they can only give us their dirty money


----------



## carey ramm (25 September 2009)

Specialed let me provide an informed view on how this will turn out. Where a bank has questionable lending practices in relation to a home equity loan a settlement will be reached - the victim will be unhappy. There may in some cases also be some limited compensation on the portfolio where negative equity and buffers were breached on margin loans (but this is still uncertain). Rest assured that at the end of the day the victims will be better off than they were in January but lets face it they will still be unhappy and wiped out as a result of Manny and the Storm Advisers. These people need to be held accountable.

The reality is Storm and their advisors have done nothing to help their victims and the enquiry transcripts show this. If anything these advisers have helped the banks in terms of the home equity loans by saying no-one did anything wrong. Yes Jelich has said a few things but the others have all been trying to save their wretched skin.

In speaking with many of the victims the one thing they want to see above all else is that Storm and their advisers are bought to justice so other people in the future dont find themselves in the horrible position they are in.

Many of these advisers are now working back in the industry, some are even contacting victims trying to get business from them. Here are just a few of these advisors i looked at recently:

Trevor BENSON- INFOCUS SECURITIES AUSTRALIA PTY LTD.  ASIC Authorised Representatives # 242673

Wally FULLERTON SMITH- INFOCUS SECURITIES AUSTRALIA PTY LTD- ASIC Authorised Representatives 242814

Andrew O'BRIEN INFOCUS SECURITIES AUSTRALIA PTY LTD.  ASIC Authorised Representatives # 237913

Robert JONES- INFOCUS SECURITIES AUSTRALIA PTY LTD- ASIC Authorised Representatives # 284593


Other advisors are with - DOVER FINANCIAL ADVISERS PTY LTD

Stuart DRUMMOND- DRUMMOND FINANCIAL PLANNING PTY LTD  Authorised Representatives # 335440-  DOVER FINANCIAL ADVISERS PTY LTD Licensee # 307248 –

David MCCULLOCH-  MCCULLOCH FINANCIAL PLANNING PTY LTD- Authorised Representatives # 334559- DOVER FINANCIAL ADVISERS PTY LTD Licensee # 307248 –

Terry WEBB- TERRY WEBB FINANCIAL SERVICES PTY LTD- Authorised Representatives # 335439 DOVER FINANCIAL ADVISERS PTY LTD Licensee # 307248

So yes it is very important to stand up and protect new people from falling victims. I think it is very important that everyone, including SICAG, stand up and be counted and make sure that old tricks and flawed models are not being used again.


----------



## Ironhalo (25 September 2009)

Well said Carey.

At the end of the day, confining the carriage of 'justice' onto those who simply have the most money isn't justice, it's litigation. 

It would be akin to taking the rich parents of a 15 year old child rapist to court for damages if their son assaulted your daughter, under the allegation that his parents 'helped create him into who he is.' You and your family might get some money out of it, but at the end of the day justice wouldn't really have been served, and you'll end up regretting it when someone else gets assaulted by the same person further down the track.

Strong analogy, I know.


----------



## Rainbow (25 September 2009)

Ironhalo said:


> Specialed, trust me mate, I was a Storm 'victim', as well as most of my family. I place blame on my own shoulders, the banks for giving me a margin loan and then selling it at rock bottom three and a half weeks later, but mostly to the schmucks at Storm who ignored my phone-calls when I was trying to find out what was going on; and to Emmanuel/Julie Cassimatis for forcing their staff not to sell anyone's positions up, when some of the Storm advisers were doing the very same with their own investments.
> 
> As it was said in the parliamentary hearing, thousands of people around Australia were getting margin calls in the thick of the GFC. Why was it that it seemed only Storm clients were the ones who were only getting told by their advisers they were in margin call when they were 20-30% into negative equity? It the banks were solely to blame, then we would be hearing about the other thousands of non-Storm customers who were screwed by the CBA/Colonial/BoQ/Mac Bank. You know why we haven't? Because they all had advisers who did the job they were paid and entrusted with, which was monitoring THEIR client's investments. Sure they may have lost some money when they converted to cash, but I can guarantee a fair majority of them would be back in the market, and not many of them would have had their houses sold from under them.
> 
> ...




I'm angry... really angry to see that these 'advisors' are still registered. Thanks Stuart if you're out there... it was great advice... I just live living in a brisbane caravan park full-time with barely enough money at the end of the week to feed myself... thank god for cheap cask wine....

"The RBA said the financial system had continued to perform strongly
over the past six months and the banks had reported solid profits
through the turmoil.

"The Australian banking sector has reported solid profits, and has
further strengthened its capital position; the largest banks have
maintained their high credit ratings," it said.

It noted the four major banks - Westpac Corp, Commonwealth Bank of
Australia Ltd, National Australia Bank Ltd, ANZ Banking Group Ltd -
had recorded total headline net profits of around $8.6 billion in the
latest half year. This was based on reporting periods to March for
three of the banks and to June for the fourth."

My partner and I have been tossing around heading out to Manny's place
at Gumdale to camp overnight. We thought we'd have a sausage sizzle/
torch ceremony while we were there. We figure since he left us in the
gutter, he won't mind sharing his overnight. We're just busy
collecting bank flags for the ceremonial side of things.


----------



## Ironhalo (25 September 2009)

You should be bloody angry mate. The fact that some of them have been calling SICAG/ex-Storm members off their old clients lists to drum up new business is an offence to all five senses.


----------



## -Bevo- (25 September 2009)

carey ramm said:


> Specialed let me provide an informed view on how this will turn out. Where a bank has questionable lending practices in relation to a home equity loan a settlement will be reached - the victim will be unhappy. There may in some cases also be some limited compensation on the portfolio where negative equity and buffers were breached on margin loans (but this is still uncertain). Rest assured that at the end of the day the victims will be better off than they were in January but lets face it they will still be unhappy and wiped out as a result of Manny and the Storm Advisers. These people need to be held accountable.
> 
> The reality is Storm and their advisors have done nothing to help their victims and the enquiry transcripts show this. If anything these advisers have helped the banks in terms of the home equity loans by saying no-one did anything wrong. Yes Jelich has said a few things but the others have all been trying to save their wretched skin.
> 
> ...




Someone should contact A Current Affair, Today Tonight have them run another story about the advisers above working again as Financial Planners.


----------



## Solly (25 September 2009)

*"Former Storm CEO testifies at hearing"*

"The former chief executive of former Townsville-based company Storm Financial, Michael Fenech, is being questioned in the Federal Court about the company's $80 million collapse."

More from The ABC here;

http://www.abc.net.au/news/stories/2009/09/25/2696499.htm


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## Solly (25 September 2009)

*"Storm advisers led jet-set life"*

"The second day of a public examination in the Federal Court in Brisbane on Friday heard from Michael Fenech, the former director of the failed financial advisory company's research arm.

He told the examination that one year before Storm's demise, directors had no idea the company was about to collapse, with a June 2008 budget document forecasting a profit for the year ahead."


More here from David Barbeler from AAP on Fairfax's Trading Room.

http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2009/9/268/catf_090925_151100_8860.html


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## Ironhalo (25 September 2009)

I remember hearing during my time with Storm that one of the aviation-keen advisers was using the jet to help get a pilot's licence. Can't remember who told me that, but it was always a rumour that gave me a laugh.


----------



## darkside (25 September 2009)

Max Max Max. ! 

What Tha ,, 

I have been away  for a few weeks , just got back to the site tonight and see i have been included in one of your "rants" , this is after you went out of your way to correct the record and apologise to me on this thread.

I have to take Ironhalo's stance on this , ,"what" ,were you  drunk, on Crystal Meth, free basing , or just licking cane toads when you wrote your vitirolic posts to us ..

Wow media work must be lining up for you !!! SIGAC must be proud, and what happened to the money spiders while i was away , do they hibernate for summer !!!??????


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## Solly (25 September 2009)

Ironhalo said:


> I remember hearing during my time with Storm that one of the aviation-keen advisers was using the jet to help get a pilot's licence. Can't remember who told me that, but it was always a rumour that gave me a laugh.




This would sure beat learning to drive on a Bonanza or a 172 like other civilian mortals.


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## specialed (25 September 2009)

Judd and Julia,

I refer you to comments made in Sydney by Mr Ian Narev for the CBA

"Again, we are unable to verify, given the nature of the information, that every unit price for every customer over the period was  up to date." and further "So we do know that substantially all the information was provided and it was substantially correct, at a minimum. And further still, “We know that our systems were substantially
reliable. Substantially, as you have identified, does not equal completely, because we cannot at this point say they were completely reliable But that does not mean that in isolated cases there may have been problems." Pg 66 and 77 of the Hansard from Sydney..

With regards to Commsec, I simply make the point that it is another vehicle by which investors, online are able to monitor their investments. How can CBA guarantee the accuracy of the information provided through this but not through the CGI software. Would you be comfortable if told that the information in your super, or your portfolio’s is “substantially correct”. Personally I want it wholly correct, and would not want to be one of the “isolated cases” during a stock market crash.

In answer to your question, my family has suffered significant loses in this mess.

Yes, blame does need to be apportioned properly, and time will tell where the blame lies, I think we all know this already. Why ASIC is taking so long I do find perplexing. 

I have never stated implicitly or explicitly that the Storm advisors were not negligent in carrying out their duties with respect to issuing margin loans. I have simply made observations regarding some astounding theories that I have read in this forum regarding the motives and makeup of SICAG. Most of which appear to be based on rumour or hunches rather than fact.

You are right, I have never seen the issue of blame as one of morality . I see it as an issue of survival for many people, and therefore I believe SICAG should fight one battle at a time. I have never advocated not going after Storm, but at the moment, storm has no capacity to save investors homes. I just question the value in a small volunteer group making muddy waters muddier by investing resources in blaming Storm and then the ensuing efforts to justify this blame. Surely this will take their focus away from what should be the main game. Saving their homes, and for many their health and wellbeing.


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## Solly (26 September 2009)

*"Storm associate lands on his feet"*

"MICHAEL FENECH'S close association with Storm Financial's founders does not appear to have harmed his career prospects - Emmanuel and Julie Cassimatis's former board colleague is going to work for ANZ in Singapore.

A career banker, Mr Fenech was the chief executive and director of Ignite Financial Systems and Research....."

More by Cosima Marriner in the SMH here;

http://www.smh.com.au/business/storm-associate-lands-on-his-feet-20090925-g697.html


----------



## Solly (26 September 2009)

*"Rules tighten on margin lending"*

"The new rules are in part a response to the Storm Financial scandal, where investors face financial ruin after being encouraged to take out margin loans without understanding the risks."

More by Geoffrey Newman in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26125768-36418,00.html


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## Solly (26 September 2009)

*"Financial crash scuppered Storm plans to buy Melbourne broker"*

"Mr Fenech - under questioning from Craig Wilkins, representing Storm liquidators Worrells - agreed the plane was not profitable. 

He also said Ignite's ''Phormula'' software, a database of Storm clients which also gave customer profiles, did not report margin calls. The system ''didn't get into the margin call side'', he said."

More by Liam Walsh in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26125055-3122,00.html


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## Ironhalo (26 September 2009)

Specialed, it costs nothing for SICAG to make a post or two, or apportion and lay some blame on Storm and Cassimatis' as well.

I have intimated and re-iterated the stupidity of this many times in this thread, but it appears that Storm/Cassimatis is a revered figure coated in Teflon when it comes to SICAG, and many of the SICAG faithful see any effort to bring him to justice as getting between them and free cash off the bank. And there is no conspiracy regarding some of the people SICAG have waving their flag; Mr O'Brien's son Andrew was on of the key Redcliffe advisors, and Ron Jelich has appeared in the Redcliffe Herald on occasion extolling the work of SICAG. I have no doubt the banks are to blame, but it takes two to tango, and all those ex-Storm advisers and Storm principals are just as much to blame. Instead, they have jumped on SICAG's hard work/bandwagon, and are now crying poor themselves. 

I wish you all the best in your fight against the 'evil banks'; I hope it brings you some satisfaction. Personally, I can't wait to see Cassimatis' assets seized.


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## chrisgee (26 September 2009)

theres been alot to read here again-yep things are happening with the family-lets hope mr norris is true to his word-i wonder what the king and queen of the shire of belmont will come up with next week-thats if they have enough guts to front up-im still fired up about this-you know what its like when you cant sleep-you start thinking about all of this -every fibre of your body is wondering why the hell its got to this stage-we arent dumbarses or half wits maybe just a bit too trusting-you know i just want it to go back to the way it was- a time that you looked forward to a time knowing that your future had some certainity because you put your faith and trust in peoplee that said all will be ok- I WANT ANSWERS- I WANT THE TRUTH OF WHAT HAPPENED - I WANT THOSE LOCKED UP IF THERES BEEN ANY CRIMINAL STUFF DONE - THIS CAN NEVER BE ALLOWED TO HAPPEN AGAIN-NEVER.


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## bunyip (26 September 2009)

specialed said:


> What an idiotic comment...the evidence is now clearly showing (by CBA's admission in Sydney) that the data on the CGI website was inaccurate much of the time. How could Storm investors have monitored their inventments and taken "defensive action" when the data they had available was days out of date at a time when the market was droping by 400 points a day. If CBA and CGI cant "sell" and supply a product that works effectively then they shouldn't be able to sell it, or should be held accountable for its failure...




What an idiotic excuse for failing to manage an investment!
People like you can't see the forest for the trees. 
Pity your mental capacity is too limited to comprehend that focusing solely on your day to day balance is no way to manage your investments. 
Prudence dictates that you keep an eye on the bigger picture, i.e. the overall market and the world economic situation, to guide your investment decisions.
The market had been going downhill for the best part of 12 months before it really went into freefall late last year with the 400 point daily ranges you mentioned.
You'd have to be blind or deaf or living under a rock in the middle of a desert, to be unaware of the economic meltdown and market crash.
It was in every media outlet every day of the week while it was happening, and even before it started. There were warning bells aplenty - you only had to listen to them and react accordingly to protect your investments.
Investors had all the time in the world to get out, and that's exactly what they should have done long before the market hit panic mode and the data systems became overloaded in the last few months of 2008.

_'Ah yes'_, I hear you say - _'but that's what Storm investors were paying Storm Financial for -  to manage their investments.'_

But Storm weren't doing their job - they were sitting on their hands and doing nothing while the value of their clients portfolios was evaporating month after month. 
Investors should have recognised this simple fact, and they should have done something about it.
Business owners who employ managers have a responsibility to keep an eye on those managers to ensure they're doing their job.
If the owner foregoes this responsibility, then they'll lose a lot of money if their manager is incompetent.

The faulty data late last year is in no way responsible for the fact that many Storm clients had already been decimated by sitting on heavily geared portfolios through almost 12 months of a severe bear market. 
Accurate data would not have changed this fact one iota.


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## skyQuake (26 September 2009)

Question for Storm Victims: 

Did you read the Statement of Advice, Financial Services Guide and Product disclosure statement? 

As someone mentioned before, was the Statement of Advice very general or misleading? without consideration of your personal financial situation? 

I would very much go through it and was wondering if anyone can be bothered posting it up? 

Thanks. 

As for my two cents, I see clearly from both sides. I mean, in the end, it is all a matter of priorities. 

Some just want compensation - which Storm cannot give so there is not much point chasing up storm. 

Some want accountability and justice - so they are angry as to why the people who have caused the mess are starting up a support group for the victims and using it as a vehicle to allay liability. 

I think with the amount of embarrassment ASIC has suffered from this fiasco, it will definitely pursue those responsible. Before that happens, I hope those ruined could get some compensation from the banks for their unsavory lending practices. Ultimately EC and all related will get what's coming to them.


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## Julia (26 September 2009)

Skyquake, I'm pretty sure someone did post up their full SOA several weeks ago.

Bunyip, I agree with your comments.  To suggest that the failure of investments was solely due to some possible inaccuracies in data just before it all fell to bits is simply silly.

That was partly why I previously asked Specialed if the daily TV report was his/her only access to market information.  As you say, heaps of warning for months and months that a downturn was happening.  Even if data from CGI was unavailable briefly, there is always the ASX website which is free and available to everyone.


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## Solly (27 September 2009)

Julia said:


> Skyquake, I'm pretty sure someone did post up their full SOA several weeks ago.
> 
> Bunyip, I agree with your comments.  To suggest that the failure of investments was solely due to some possible inaccuracies in data just before it all fell to bits is simply silly.
> 
> That was partly why I previously asked Specialed if the daily TV report was his/her only access to market information.  As you say, heaps of warning for months and months that a downturn was happening.  Even if data from CGI was unavailable briefly, there is always the ASX website which is free and available to everyone.




Julia, I spent some time with a very distressed Stormer during the week. I know I'm probably covering some old ground here, but I asked a similar question, with all the press about the market downturn why didn't they take more direct action with Storm in regard to the preservation of their portfolio and position. The answer I got was that because of the length of time they had been with EC they trusted that Strom had all the right methodologies and mitigation strategies in place to avert disaster. After all EC had a strong track record, owned lots of property etc and appeared to have a successful business that was benefiting many people. This Stormer is not stupid, very successful and well regarded in their own field.

I believe the main reason they were with Storm was because of the trust they had in the whole setup and had been looked after very well for many years. It was the hands off, leave it to EC & Storm theme that was brought up many times during our meeting after all that is why they were paying the fees for the advice. In their current predicament they now are very distrusting of banks, fin advisers, solicitors etc, although I'm sure many of these are genuinely trying to assist, after lining their pocket a bit along the way was well.

It's hard for me to see the toll that this whole episode is taking on them, they are becoming grey, hunched and gaunt before their time. They aren't greedy highflyers, they have worked hard all their life and hoped for a modest, safe comfortable retirement based on the promises of Storm. Looks like they backed the wrong horse but they shouldn't be getting punished to this extent for their decisions. Again they reiterated to me that they felt secure in knowing that CGI & The Comm Bank were involved and this close association with Storm gave them confidence. They weren't investing in some Internet Ponzi scheme run by a Northern European crime syndicate, they believed they were investing in strong reputable local organisations who genuinely had their interests at heart and that is where the real hurt is with them. I can't bag them for that belief. 

I read during the week that Michael Fenech, the ex chief executive and director of Ignite Financial Systems & Research said that, "Ignite's ''Phormula'' software, a database of Storm clients which also gave customer profiles, did not report margin calls. The system ''didn't get into the margin call side'' "

I find this statement amazing after I read this about Phormula in Storm's prospectus for the failed listing attempt.

"Storm is able to actively manage its clients’ portfolios by
using a purpose-built software system called Phormula, which
enables Storm to efficiently assess and monitor each client’s
borrowing and investing capacity.

Phormula identifies clients with Step Investment opportunities
and automatically generates Statements of Additional Advice
(“SoAAs”), which are sent to clients to be authorised. "

I'm am positive that with dutiful foresenic examination of the ordreal more will come to light. 


I don't know how many posters here have ever sat opposite a Stormer and had a long chat about what happened to them but it is very different to having the annominity of a forum such as this. I been told things that I'd never post publicly out of respect to those impacted but it truly amazed me how some of these Stormers have been able to keep it together for so long and as well as they have. The stress and carrying the constant pressure of what has happened has been quite horrendous for many. If I was in their shoes I'd be doing whatever it takes to improve my position, try any avenue of assistance, seek any opinion that may be beneficial and never ever give up until I retrieved whatever I could to get some security and sense of hope for me and my family. Nothing would stop me until I got back to a position that I would accept. I would use every avenue and every glimmer of hope to my advantage.

People have been harmed, damaged and disadvantaged, let the Federal and State courts and the court of public opinion fully hear the evidence from all parties pertaining to this debacle, hand down a determination and administer the appropriate sentencing.

After all with public statements like these I'm sure the "Truth will out".


----------



## Julia (27 September 2009)

Solly, I don't believe any of us commenting on this thread have suggested we don't feel very sorry for people who now find themselves in very distressing situations. 

That is one issue.

The other is the folly of ever demonstrating complete trust in any individual or organisation, no matter what they might promise, to the exclusion of keeping a personal watch over something as important as investments.

On a slightly lighter note, I see in today's paper there is now available a 
"Smash Manny" doll.   The company makes revenge dolls of the most hated man in America, Bernie Madoff.

"We are making a new one covered in Teflon - it is the limited edition 'It was the banks' fault, so don't smash me' Manny Doll", he said.  Just the sort of thing to take with you to the Federal Court to witness Manny and Julie getting grilled on Monday.


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## bunyip (27 September 2009)

Julia said:


> Solly, I don't believe any of us commenting on this thread have suggested we don't feel very sorry for people who now find themselves in very distressing situations.
> 
> That is one issue.
> 
> ...




I wonder if Jules will pull another sickie. Maybe they both will.


----------



## specialed (27 September 2009)

bunyip said:


> What an idiotic excuse for failing to manage an investment!
> People like you can't see the forest for the trees.
> Pity your mental capacity is too limited to comprehend that focusing solely on your day to day balance is no way to manage your investments.
> Prudence dictates that you keep an eye on the bigger picture, i.e. the overall market and the world economic situation, to guide your investment decisions.
> ...




Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers.  It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...


----------



## darkside (27 September 2009)

specialed said:


> Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers.  It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...




Specialed, 

Wow, unfortunately that last post of yours is going to haunt you, had you have been around this site long enough to realise that "Storm" was a giant Ponzi scheme and people were betting their house at the Cassimatis Casino you would know that Bunyip and quite a few others here did actually have a good handle on the  impending GFC and it's rammifications. 

I am not pointing this out as a "i told you so", but more to the point of , before you "badmouth someone" maybe just check your facts.

There are also quite a few others on this site that took money out of the market before it plummeted because of Bunyips insight. 

Same can probably be said for GG, love him or hate him, he does seem to know whats going on, but it's the delivery that hurts those who like to be told what they want to hear, rather than the truth.

Sometimes cold hard reality , although not nice , may save lots of "hard earned" in the long run  .


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## specialed (27 September 2009)

It seems then that I have egg on my face, and will take it as stated the previous advice of bunyip and others. It is great to here that this forum has saved some from the effects of the GFC. As for checking my facts, I am merely continuing the tradition of this great forum. As I have pointed out on numerous occasions this forum is littered with comments that are based little on fact, but instead on rumour, hearsay or innuendo. In particular the attempts to “badmouth” and discredit the work or motives of SICAG.   

Let free speech, filled with its lies, live on


----------



## Anastasia (27 September 2009)

I have had a very hard weekend. It started Friday night and I am still battling the depths of true despair. I have for ten months tried to remain strong and positive for my husband and my survival from this catastrophe. I work full time in a difficult environment. I am carrying the home and keeping my unwell husband going as he has had to go back to work to help me pay the "bills". All the hours of litigation/CBA/ Worrells paperwork I have done on my own into the late hours of the night. I am exhausted and feel like the fight is too hard. And there seems no end in sight.

I sit here and think of all the things we had planned to do very shortly when we both would have retired. Not big things. Just enjoying a few of the fruits of our hard labour-filled lives. We were going to lock up our unit and go visit my sister down south and if we liked it there, sell our unit and re-locate there. And somewhere we would have done a little not-too-strenuous travelling overseas if my husband was up to it. 

But our dreams have all gone. My husbands superannuation has gone. And if we are unsuccessful with a resolution of sorts, our home too will go. It probably will anyway.

Yes we are largely to blame for the position we are now in. We were so stupid to place so much trust in Storm and the banks the way we did. And we should have watched our investment closer despite our demanding jobs and ailing parent commitments. 

But I ask one question. Why do we have to pay for this *one* mistake so dearly..we never hurt anyone, cheated anyone, harmed anyone. We have worked hard our whole lives, been upstanding citizens, children who made our parents proud. We never took big gambles with anything, payed off our home (pre Storm) through many sacrifices and extra hours of overtime at work. 

So why have we to pay for this one error - trusting - with our home, our old age securities, our retirement, our lives more or less. This seems like a huge penalty for our one mistake, a penalty that I am losing the battle in trying to come to terms with.


----------



## Julia (27 September 2009)

specialed said:


> Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers.  It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...



This sort of sarcasm simply demonstrates that you have not read the whole thread where many of us attested to being sufficiently aware of the global situation to exit the market when it was obvious things were going from bad to worse.
Bunyip (and others of us) have many successful years of trading and investing.

For you to say "where you were able to foresee the impending financial disaster that occurred, *no one else worldwide could*"  simply underlines your own financial illiteracy.  There were reports on the news every single day for months about the subprime mess in the US, the ramifications of the credit default swaps and other derivatives, and not least the unprecedented collapse of Lehman's.  Did all this mean nothing to you?
Did you just close your eyes and ears and think it was all not relevant to your investments?  

That's your privilege.  But don't go bagging members of this forum who were possessed of a greater degree of awareness.





specialed said:


> It seems then that I have egg on my face, and will take it as stated the previous advice of bunyip and others. It is great to here that this forum has saved some from the effects of the GFC. As for checking my facts, I am merely continuing the tradition of this great forum. As I have pointed out on numerous occasions this forum is littered with comments that are based little on fact, but instead on rumour, hearsay or innuendo. In particular the attempts to “badmouth” and discredit the work or motives of SICAG.
> 
> Let free speech, filled with its lies, live on



I fail to see what this post contributes in any way.





Anastasia said:


> I have had a very hard weekend. It started Friday night and I am still battling the depths of true despair. I have for ten months tried to remain strong and positive for my husband and my survival from this catastrophe. I work full time in a difficult environment. I am carrying the home and keeping my unwell husband going as he has had to go back to work to help me pay the "bills". All the hours of litigation/CBA/ Worrells paperwork I have done on my own into the late hours of the night. I am exhausted and feel like the fight is too hard. And there seems no end in sight.



Oh, Anastasia, I do really feel for you.  Your exhaustion is almost palpable.
All I can say - and I understand how useless it is - is how much you deserve credit for managing to keep supporting your husband, hold down what sounds like a difficult job, and attend to all the paperwork as well.
No wonder you feel as though there's no end to it.

But there will be an end eventually, hopefully one where Manny and Julie are called to account for their heartless exploitation of people like yourself.

I've sent you a PM, Anastasia.


----------



## Ironhalo (27 September 2009)

Likewise Anastacia. Check your inbox. 

And hang in there, doing the paperwork was tough for a lot of people (one of my rellies included) but it *WILL* be worth it.


----------



## cuttlefish (27 September 2009)

Julia said:


> Oh, Anastasia, I do really feel for you.  Your exhaustion is almost palpable.
> All I can say - and I understand how useless it is - is how much you deserve credit for managing to keep supporting your husband, hold down what sounds like a difficult job, and attend to all the paperwork as well.
> No wonder you feel as though there's no end to it.




Anastasia - Julia has described the same sentiment that I feel.  Fate has dealt you a harsh blow and you are dealing with it so well, and it makes me feel so sad that there is no simple end to your situation. Its an easy thing to say, and difficult to believe if on the other end of it, but time will heal, but in the meantime please know that there are people that hear what you are going through and respect how you are dealing with it.  I wish you all the best.


----------



## Solly (28 September 2009)

*"Time for Macquarie to imbue its explanation on Storm margins with a little compassion"*

"Macquarie Bank's managing director, Richard Sheppard, must have had a lot on his mind when he signed the covering letter to Macquarie Group's submission to the parliamentary inquiry investigating Storm Financial.

It is hard to imagine a conservative, cautious and well-respected banker such as Mr Sheppard putting his name anywhere near the document if he had been given the full information necessary to judge its contents."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/time-for-macquarie-to-imbue-its-explanation-on-storm-margins-with-a-little-compassion-20090927-g7oy.html


----------



## Solly (28 September 2009)

*"Storm clients angry at Macquarie"*

"A SURVEY of former Storm Financial clients who obtained Macquarie Bank margin loans has exposed serious deficiencies in Macquarie's submission to a parliamentary inquiry.

Macquarie's submission, lodged with a cover letter signed by the Macquarie Bank managing director Richard Sheppard, states Macquarie's margin loan business "ensured that all affected clients were made aware of their margin call obligations, and were in a position to take action in a timely manner". "

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/storm-clients-angry-at-macquarie-20090927-g7oh.html


----------



## Solly (28 September 2009)

*"Penalty for faulty advice to soar"*

"The corporate regulator is poised to almost double the maximum amount of compensation the Financial Ombudsman Service can award aggrieved investors for negligent advice from financial planners."

Read more by Leng Yeow in The Australian Financial Review of Monday, 28 September 2009.


----------



## Judd (28 September 2009)

Anastasia said:


> .....We were so stupid to place so much trust in Storm and the banks the way we did.




I don't consider that you were stupid.  Unwise perhaps but not stupid.  After all, Storm appeared to be sound for quite sometime. Friends, family and acquaintances were extolling its virtues.  The organisation appears to have beaten its drum about how good it was and how the banks supported it.  Pretty hard in a community setting for anyone to resist such a siren call, especially if you did not have some knowledge of investing.  No need to be so hard on yourself for past decisions.

One sad aspect is that people believed at the time that banks supported Storm.  At a corporate level they provided funding to the Storm, as they do with any business.  Equally, as they demonstrated, they are just as prepared to pull the plug on if they consider their funds are at risk, as they do with any other business.  In that context, the customers of the business are not the bank's concern.

As for shoddy lending practices to Storm clients, well, I hope the banks rectify that and the CBA is at least doing something constructive in that regard.  Although they exist to lend money and charge interest for that (paying interest does not equate to buying financial advice; Storm was there for that and was paid to do so) not to ensure people could repay and allowing negative equity on investments is really beyond the pale.

It is still totally beyond my comprehension how any financial adviser could push a position that "good" debt should never be repaid but only increased.  It's debt no matter whether "good" or "bad".  To allow their clients to get to this situation is execrable, dumb and plain theft of client's money.  Cowards and completely without honour.


----------



## bunyip (28 September 2009)

specialed said:


> Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers.  It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...





_Nobody else worldwide was able to see the impending financial disaster that occurred??!!_

That has to be one of the most ludicrous and inaccurate claims I have yet seen anyone make in relation to the 2008 economic meltdown and stock market crash.
You're completely out of touch with reality. You don't have a clue. You've swallowed the Cassamatis lies, hook line and sinker.
I'll bet that just like Cassamatis, SICAG's Noel O'Brien and various others, you also claim that the 2008 market crash and financial crisis were unprecedented!

In the months leading up to the market peak in November 2007, every single day there were dire warnings from hundreds of financial journalists and economic analysts worldwide that the economic situation was becoming critical and a market crash was imminent. 
In every newspaper and on every TV and radio station, there it was, warning after warning after warning that world economies and markets were on the verge of a catastrophic meltdown.
US banks were going broke, with many more predicted to follow.
Many fund managers stated publicly that they had taken the precaution of converting their clients to cash. 
Many private investors also converted their portfolios to cash. 
Some of those investors are contributors to this thread - they're the same people you've been targeting with your vehemence and ridicule and bitterness. 
They're the same people whom you've implied are complete blockheads. 
They're the same people who were sufficiently switched on to avoid being lured into the Storm Financial trap.
And you claim that nobody was able to see the impending financial disaster??????!!!!!

You were exposed to the same information as the rest of us in regard to the impending economic meltdown. Either your mind lacked the capacity to absorb that information, or for some reason you blocked it out and ignored it.
But please don't continue to insult your own intelligence by claiming that nobody knew about the coming crisis.

Because of your misguided belief that nobody saw the financial crisis coming, you seem to think it was inevitable that investors got burnt by it.
Let me tell you something which clearly you have not understood......Even if investors were not aware of the impending financial crisis, it didn't matter. They didn't need to have advance warning of it -  all they needed to do was react to it once it arrived in the form of a bear market. 
How? By taking defensive action, off-loading part or all of their portfolios, or giving their brokers instructions to sell specific stocks if they fell to a certain price level. 
Any or all of these actions would have taken investors out of the market before they lost their shirts, even if they'd had no advance warning of the impending meltdown.

Investors were afforded plenty of time for defensive action to preserve the bulk of their capital, due to the relatively sedate nature of the 2008 crash compared to the severity and suddenness of the 1987 wipe-out.

2008 crash - down 56% in 17 months
1987 crash - down 50% in 8 weeks

The 08 bear market wiped 20% off the All Ords in the first 13 weeks. The October 87 crash wiped 25% off the market in just one day!

Again I make the point......due to the relatively mild nature of the 2008 crash in terms of the speed of the decline, there was plenty of time for investors to get out of the market before suffering catastrophic losses, even if they'd been unaware that a crash was coming. 

In one of my early posts I told of a relative of mine who borrowed a six figure sum to sink into the market through an Investment Advisor. 
As the market approached it's November 2007 peak, and the alarm bells were ringing every day through the various media outlets, I advised her to quit half her portfolio and pocket well in excess of 100% gains. She ignored my advice because her advisor told her to _'hang in there - stocks are a long term investment'._
When my chart of the All Ords showed me that the market had peaked and had now turned bearish, I advised her to liquidate her entire portfolio. 
Her gains at that time were still around 100%. Again, she ignored my advice because her advisor told her to hang in there.
Her 100% gains evaporated month by month as the market headed south in 2008. She has since quit her portfolio, not only missing out on the six figure profit that was available earlier, but sustaining a heavy loss.

Perhaps you think I've just made up this story, or that I've related it for the purpose of big-noting myself. You'd be wrong on both counts if that's what you believe.
The story is true enough, and I haven't told it to big-note myself, but rather to illustrate to misinformed people like you that by keeping yourself abreast of world events through news programmes and such like, by learning some very basic chart-reading skills, and by being flexible in your approach, you can avoid getting cleaned out by market meltdowns and incompetent outfits like Storm Financial.

In some of my earlier posts I mentioned a $35 book that details simple, safe and very effective strategies for profitable stock market investment.
I claimed that if Storm investors had been familiar with these strategies and had implemented them, they would have not only got out of the market before the crash wiped them out, but they would have got out with substantial profits in most cases. 
In fact, with this knowledge under their belts they may have felt no need to go near Storm Financial in the first place. 

This one book costing the princely sum of about $35 dollars, really can empower private investors to play the stock market safely and profitably under all  market conditions.
I'm not going to tell you the name of the book or give you the post numbers in which I mentioned it. I suggest you get off your back side and search back through my posts until you find it.
There is simply no excuse for your ignorance about market investment matters. Put in some effort, broaden your outlook, get rid of your tunnel vision, and you just might develop into a capable stock market investor in your own right, without the need to rely on others to tell you what to do.

And don't waste any more of your time by coming back at me with another one of your sarcastic posts. I can play that game as well as you can, but there's little point in wasting our time and emotional energy in that sort of endeavour.
There are people on this thread who know a hell of a lot more than you about market investment. Rather than viewing them as fools and subjecting them to sarcasm and ridicule, you'd be doing yourself a big favour if you made it your business to learn something from them.


----------



## darkside (28 September 2009)

Bunyip,

Do i get a dollar if i guess the author of the books initials are SW.


:


----------



## Steve Borden (28 September 2009)

Seems EC is doing an Alan Bond ... I don't recall, I can't remember.


----------



## Quincy (28 September 2009)

Steve Borden said:


> Seems EC is doing an Alan Bond ... I don't recall, I can't remember.






> During his evidence, Mr Cassimatis was unable to recall a number of particulars relating to Storm, including whether or not he served as managing director.
> 
> He was then shown a business card on which he was named as MD.
> 
> Mr Cassimatis was also unable to recall details of a planned float of the company scheduled for 2007, but which failed to proceed.




See http://www.news.com.au/couriermail/story/0,,26135128-3102,00.html

By Anthony Marx, September 28, 2009 01:31pm


----------



## Julia (28 September 2009)

Have you been at the hearing, Steve?

Do you know if a transcript will become available?

My post crossed with Quincy's.  Thanks for that, Quincy.

Anyone actually at the hearing?


----------



## bunyip (28 September 2009)

darkside said:


> Bunyip,
> 
> Do i get a dollar if i guess the author of the books initials are SW.
> 
> ...




No mate. But I'll happily give $1 to Specialed if he or she tracks down the book and puts some real effort into learning its strategies!


----------



## Solly (28 September 2009)

Steve Borden said:


> Seems EC is doing an Alan Bond ... I don't recall, I can't remember.




Yes it was very interesting that so much wasn't able to be recalled.

It was refreshing that the SICAG boys were allowed back in to look EC squarely in the eyes.


----------



## Ironhalo (28 September 2009)

Any news from the inquiry today? Sounds like there was some comic relief.


----------



## Garpal Gumnut (28 September 2009)

Whats the latest on Storm, Manny, SICAG moneyspiders and the rest of the motley crew?

Been away fishing.

Only been able to access Twitter from a Yankee mate's "cell".

Back in Townsville.

gg


----------



## Solly (28 September 2009)

*"Founder gives evidence about Storm collapse'*

"The founder of Storm Financial has begun giving evidence at a public examination of the planning company's collapse."

"One of the first questions he was asked was whether he was Storm's managing director."

He gave an interesting answer

More from the ABC 

http://www.abc.net.au/news/stories/2009/09/28/2698404.htm


----------



## Garpal Gumnut (28 September 2009)

Solly said:


> *"Founder gives evidence about Storm collapse'*
> 
> "The founder of Storm Financial has begun giving evidence at a public examination of the planning company's collapse."
> 
> ...




Is this a joke, Solly, did he really say that!!

gg


----------



## Solly (28 September 2009)

*"Storm Financial planned margin call alert: Emmanuel Cassimatis"*

"FORMER Storm Financial managing director Emmanuel Cassimatis has told a Brisbane court that the company was developing a way to identify clients going into margin call when the market nosedived late last year."

More from Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26135155-643,00.html


----------



## Solly (28 September 2009)

*"I don't know, I can't remember"*

"The founder of collapsed advisory firm Storm Financial has told a Brisbane court he doesn't know why his attempt to publicly float the company failed."

More from Daniel Hurst from Fairfax's Business Day here;

http://www.brisbanetimes.com.au/business/i-dont-know-i-cant-remember-20090928-g8gv.html


----------



## Garpal Gumnut (28 September 2009)

Solly said:


> *"Storm Financial planned margin call alert: Emmanuel Cassimatis"*
> 
> "FORMER Storm Financial managing director Emmanuel Cassimatis has told a Brisbane court that the company was developing a way to identify clients going into margin call when the market nosedived late last year."
> 
> ...




How many years had he been a financial advisor with clients using margin?

Developing a way = Having a plan.

I've had margin loans, and always had a plan.

Maybe I should look at becoming a financial adviser.

Fail to plan, and plan to fail.

gg


----------



## Garpal Gumnut (28 September 2009)

Solly said:


> *"I don't know, I can't remember"*
> 
> "The founder of collapsed advisory firm Storm Financial has told a Brisbane court he doesn't know why his attempt to publicly float the company failed."
> 
> ...






> Storm's Managing Director Emmanuel Cassimatis has been hauled before a Federal Court hearing today to answer questions about his company which left investors with large losses when it was wound up in March with debts of about $80 million.
> 
> In his evidence today, Mr Cassimatis, dressed in a suit with no tie, told lawyers for liquidator Worrells he did not recall key details about the company's activities. During his testimony, punctuated by long silences and short answers




Manny, as one who has been in court numerous times for unpaid parking fines and not wearing a helmet, there is one golden rule mate, always wear a suit *with a tie* when in court.


gg


----------



## Ironhalo (28 September 2009)

It is very interesting to note that he wasn't wearing a tie.

I know people might scoff at this, but wearing a tie to court/an inquiry hearing is a sign that you take what is being said seriously, you understand the consequences/ramifications, and are willing to conform to someone else's opinion/direction. Hence why every crim worth his salt, no matter how unrepentant, and how 'anti the system' he is, will front to court in a suit and tie.

When I worked in Defence Recruiting, one of the little tricks into guessing the personality of someone was watching what they came dressed to their interviews in. Someone who didn't wear a tie was often cocky, came across arrogant, and believed they were superior to the person that was interviewing them, and hence wanted to reinforce an image of non-conformity, and vicariously, contempt for that person(s).

Why am I not surprised to see Manny adopting this. So his quest for justice for his client's stops when it comes to remembering key things....things like what his actual role was at Storm? Bloody hell. I went from feeling a very tiny ounce of regret for his downfall this morning (and by small I mean insignificant) to the point where I'd happily fling dog faeces at his open, lying mouth. It's evident that any inquiry into him and his staff's neglect is above him. 

Well well well, things are going to get very interesting for Manny in the next few months....I can guarantee it.


----------



## DocK (28 September 2009)

I've often wondered why Manny was most often seen/photographed in jeans and open-necked shirt, almost as if he was verbalising "look at me - I'm just an ordinary bloke, just like you".  Maybe I was wrong, and he's just a slob instead?  Very disrespectful to appear in court under-dressed like that - I'm surprised his high-priced legal-eagles didn't dress him better...

Was Julie at the enquiry?  How like Manny to pass the buck when it came to who was managing director - it's a wonder he didn't claim it was his Mum!


----------



## Steve Borden (28 September 2009)

DocK said:


> Was Julie at the enquiry?  How like Manny to pass the buck when it came to who was managing director - it's a wonder he didn't claim it was his Mum!




Julie was there in the morning, apparently in deep conversation with a former CBA employee who went on to become a salesperson with Storm. Both of them are due to appear tomorrow.

Remembering what they forgot or forgetting what they remembered?


----------



## Solly (28 September 2009)

Garpal Gumnut said:


> Is this a joke, Solly, did he really say that!!
> 
> gg




gg,

With apologies to Peter Gabriel..

"I don't remember, I don't recall
I got no memory of anything at all..."

But in reality the answer to your q is ....YES.


----------



## Garpal Gumnut (28 September 2009)

DocK said:


> I've often wondered why Manny was most often seen/photographed in jeans and open-necked shirt, almost as if he was verbalising "look at me - I'm just an ordinary bloke, just like you".  Maybe I was wrong, and he's just a slob instead?  Very disrespectful to appear in court under-dressed like that - I'm surprised his high-priced legal-eagles didn't dress him better...
> 
> Was Julie at the enquiry?  How like Manny to pass the buck when it came to who was managing director - it's a wonder he didn't claim it was his Mum!




I have always found this website invaluable to peruse the day before a court appearance.

http://www.ehow.com/how_8979_dress-court-appearance.html

Going to court is a bit like doing examinations at school.

Its the preparation weeks before that gets one through, trying to cram the day before is useless.

So I always concentrate on my appearance particularly picking my suit *and tie* to give the appearance of one who takes the whole schamozzle seriously. (You usually find that anyone not wearing a Lowe's suit takes it seriously).

I usually wear one of my Giorgio Armani's.

(Note, Do not ever wear Banana Republic or Canali. I seen a guy do it once and he's still in Lotus Glen, and that was in the year of the Expo.)

Magistrates are always afraid of making mistakes and often deal with the unwashed, but Districk or Federal needs a certain sense of gravity.





> Difficulty: Easy
> Instructions
> Things You'll Need:
> Men's Dress Shirts
> ...






Follow this formula and you have at least a fifty fifty chance of getting through with the minimum sentence, if they can prove on the evidence or plant it on you. 

And you will get off if its a matter of your word against theirs.

gg


----------



## Solly (28 September 2009)

*"Too little too late"*

"Yes, Commonwealth Bank of Australia has formed its resolution scheme, though, by the sounds of things, this is merely a fancy way of forming a list of victims."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/7485.htm


----------



## Solly (28 September 2009)

*"CGI staffer allegedly sacked over Storm"*

"Fallout continues...
A CGI staffer has allegedly been dismissed over his involvement with Storm Financial."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/7472.htm


----------



## Solly (28 September 2009)

Garpal Gumnut said:


> Whats the latest on Storm, Manny, SICAG moneyspiders and the rest of the motley crew?
> 
> Been away fishing.
> 
> ...




gg, I've got a spare 850 Mhz Blackberry Bold with a 3db gain aerial that I must send you. U S WEST analogue has such sporadic coverable out this way. :


----------



## Solly (28 September 2009)

DocK said:


> I've often wondered why Manny was most often seen/photographed in jeans and open-necked shirt, almost as if he was verbalising "look at me - I'm just an ordinary bloke, just like you".  Maybe I was wrong, and he's just a slob instead?  Very disrespectful to appear in court under-dressed like that - I'm surprised his high-priced legal-eagles didn't dress him better...





Blocker & Fatty weren't available for the next Lowes commercial...just speculatin'...


----------



## Solly (29 September 2009)

*"Storm boss Emmanuel Cassimatis has memory problem"*

"EMMANUEL Cassimatis has a reputation for being loquacious, but the head of Storm Financial had trouble recalling even basic details about the failed company at his first court appearance yesterday.

Mr Cassimatis gave long consideration to most questions he was asked in the Federal Court in Brisbane before replying, but invariably those replies were either "I can't remember", "I don't know", "Possibly", "That's likely", "Perhaps", or "That's possible".

About the only new piece of information to emerge yesterday was an admission that Storm did not have the capacity in its computer system to determine when a client was liable for a margin loan call."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,26138893-5006786,00.html


----------



## Solly (29 September 2009)

*"Emmanuel Cassimatis testifies to Federal Court about briefings"*

"EMMANUEL Cassimatis, co-founder of failed investment group Storm Financial, described in court yesterday how he had provided detailed briefings to the Commonwealth Bank about his firm's high-risk investment model."

More by Anthony Marx from The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26138538-3122,00.html


----------



## Solly (29 September 2009)

*"Storm's computers lacked capacity to track margin calls, court told"*

"STORM Financial's computer software did not allow the failed advisory firm to easily monitor which investors faced margin calls, a court has heard."

More by Daniel Hurst in The Age here ;

http://www.theage.com.au/business/storms-computers-lacked-capacity-to-track-margin-calls-court-told-20090928-g96s.html


----------



## Solly (29 September 2009)

*"Storm founder unsure about methods"*

"The co-founder of failed advisory firm Storm Financial, Emmanuel Cassimatis, has detailed how many clients were in negative equity and received margin calls last year as the global financial crisis took its toll on the company."

Read more by Michelle Singer in The Australian Financial Review of Tuesday, 29 September 2009.


----------



## Quincy (29 September 2009)

> *Storm chief's affidavit at odds with prospectus*
> 
> 
> THE chief of the failed Storm Financial told an inquiry it was not the company's role to monitor its clients' loan to value ratios, despite documents stating it would do so.
> ...




By Anthony Marx - September 29, 2009 11:31am

http://www.news.com.au/couriermail/story/0,23739,26140812-3122,00.html


----------



## Solly (29 September 2009)

Garpal Gumnut said:


> I have always found this website invaluable to peruse the day before a court appearance.
> 
> http://www.ehow.com/how_8979_dress-court-appearance.html
> 
> ...




gg, no tie again on EC this morning. I don't think he's heeding your advice.


----------



## Solly (29 September 2009)

*"Storm was given six minutes notice by Commonwealth on fund closure, court told"*

"STORM Financial was given just six minutes notice by Commonwealth Bank that the bank was closing down its fund, joint managing director Julie Cassimatis has told a Brisbane court.'

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26141431-20501,00.html


----------



## Solly (29 September 2009)

*'We were blind': Storm boss*

"Failed advisory firm Storm Financial was "blind" to the true state of its clients' investments late last year because a major bank was providing faulty data, the company's co-founder has claimed.

The court hearing was adjourned early this afternoon after Worrells' lawyer Craig Wilkins lost his voice."

More by Daniel Hurst in Business Day on brisbanetimes.com.au here;


http://www.brisbanetimes.com.au/business/we-were-blind-storm-boss-20090929-gasi.html


----------



## Solly (29 September 2009)

*"Storm boss blames banks for margin calls"*

"Storm Financial's founder has denied the failed advisory firm justified its large upfront fees by promising clients ongoing monitoring of their investments."

More by Daniel Hurst in Business Day on brisbanetimes.com.au here;

http://www.brisbanetimes.com.au/business/storm-boss-blames-banks-for-margin-calls-20090929-ga4h.html


----------



## Solly (30 September 2009)

*"Storm Financial co-founder Emmanuel Cassimatis faces tough questions"*

"A LAWYER heading the public examination of failed Storm Financial turned the screws on co-founder Emmanuel Cassimatis yesterday by exposing inconsistencies over the advisory firm's obligation to monitor client portfolios."

More here by Anthony Marx In The Courier Mail

http://www.news.com.au/couriermail/story/0,23739,26144459-3122,00.html


----------



## Solly (30 September 2009)

*"Storm couple wined, dined CBA staff"*

"COMMONWEALTH Bank staff who had to form a business relationship with Storm Financial were wined and dined at the lavish Townsville home of company founders Emmanuel and Julie Cassimatis.

Julie Cassimatis yesterday told a Federal Court hearing in Brisbane that the bank had close knowledge of Storm's controversial financial model."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,26144511-5006786,00.html


----------



## Solly (30 September 2009)

*"Cassimatises wined and dined bank staff"*

(Mrs Cassimatis) "said that whenever there had been a change in bank management they had briefed the new person on their financial model, and sometimes this was done through formal meetings, but more often it was done socially."

More in the Townsville Bulletion here;

http://www.townsvillebulletin.com.au/article/2009/09/30/83021_news.html


----------



## Solly (30 September 2009)

*"Storm over six-minute loan call"*

"The co-founder and former managing director of failed advisory firm Storm Financial, Julie Cassimatis, has blamed the Commonwealth Bank of Australia for providing incorrect market data in October and November last year, which had meant Storm was flying blind and could not warn its clients about pending margin calls."

Read more by Michelle Singer in The Australian Financial Review of Wednesday, 30 September 2009.


----------



## shibby (30 September 2009)

Well how interesting the gutless ba***rds!!!  I don’t remember, is that a legitimate defence? Does that mean we will neve know the truth? What a pair they are. 
It is well known that like minded people find each other well here is a perfect example, they are both tarred with the same brush, no ethics.
I hope questions are going to be asked also about Macquarie Bank how and why they did not react as well, did they have a dodgy system too.
I also hope the question will be put to them - isn’t it the truth that you thought more about those trailing commissions than the welfare of your clients?
Another question that should be asked - what about the people who were monitoring their portfolios and were not allowed to be sold up?
And the piece de resistance, the photo of the two, arm in arm outside the courthouse, is that a smile or a smirk, it appears that both of them are very pleased with themselves.
For heavens sake – whoever has the power out there, don’t let these dreadful people get away with it.


----------



## Smiley (30 September 2009)

The Cassimati knew that all the clients had lost everything by Oct.  All they needed to do was look at the market level - the all ords as listed in the media or in myriad sites online.  With clients signing those the letters to sell up to 100% of the portfolio the first week of Oct, & being promised action would happen within 24 hours, and nothing being done for weeks, they are very culpable.  Perhaps EC was too busy buying properties and getting still loyal clients to borrow huge amounts of $ - duh let's blame the banks, the software . . . EC and JC knew all was lost months before CWB gave them "6 mins notice" . . . and their attitude was "ah well". . . . still is . . .


----------



## TOBAB (30 September 2009)

Surely they don't believe anyone (at all!) is buying this rubbish. The mkt completely tanked and blind freddy knew those with high LVR margin loans were in strife.


----------



## SJG1974 (30 September 2009)

TOBAB said:


> Surely they don't believe anyone (at all!) is buying this rubbish. The mkt completely tanked and blind freddy knew those with high LVR margin loans were in strife.





Exactly.  The fact that clients were invested in index funds means that a simple look at the paper, the TV or an internet site would have meant that they knew their clients were in strife.  If in fact the data was inaccurate, they surely would have known this (wouldn't they be suspicious with the market falling say 5% in a day yet their client's portfolios didn't?)....why didn't they go back to the CBA and repeatedly ask for the data to be fixed?  

They are financial advisers FFS....they get paid a huge fee to manage and monitor people's portfolios.  Every adviser would have an idea of what the market is doing....why didn't they?

It is a cop out.


----------



## cuttlefish (30 September 2009)

I guess this means the fund was also unhedged against the extremely sharp falls that occurred.  Whats the norm with index funds - are they literally just an index weighted basket of direct shareholdings or is some hedging usually incorporated as well?


----------



## DocK (30 September 2009)

cuttlefish said:


> I guess this means the fund was also unhedged against the extremely sharp falls that occurred.  Whats the norm with index funds - are they literally just an index weighted basket of direct shareholdings or is some hedging usually incorporated as well?




My understanding (from discussions with my storm "adviser") is that the index funds were indeed simply an "index weighted basket of direct shareholdings" and there was never any mention of hedging.  Clients were not invested with or in storm per se, they were invested in managed funds (index funds) in my case with Challenger.

I agree that to say they were unaware or could not work out their clients' lvrs due to innacurate data is an absolute cop out!  My SOA clearly recorded the level of the All Ords at the time the investment was made, it doesn't take a rocket scientist (and clearly I am not one!) to work out that if my funds were invested in an index fund, and that index has fallen by x%, then presumably my investment has fallen by a very similar %.  The storm pitch was always "we're here to look after your money so you don't have to", along with constant reassurances that their clients' portfolios were being constantly monitored.  To now do an about-face and claim that it was never their role to monitor lvrs is an absolute joke!  What the hell do they think they were being paid to do???

I find their "poor memories" and prevaricating to be totally abhorrent.  Surely it must now be clear to even their most die-hard loyal followers that these people are nothing but ruthlessly self-serving charlatans.  Sociopaths of the economic variety.

Gee whiz this ranting is good for the soul


----------



## Ironhalo (30 September 2009)

I was told repeatedly that 'we watch the market for you to stop you from doing anything crazy based on either greed or fear.'

So what were we paying them for exactly? You can throw money in an ASX200 index fund for about $29.99 brokerage fees on Comsec, and arrange a margin loan in about 2 hours with a bank.

Funny how they could monitor the market well enough when they were making profits. I remember one night in Sydney I had a late appointment with my advisor and I could see some of the staff cracking open some drinks and champagne. I asked what the go was and he said 'oh the market went up 4% today'.


----------



## Solly (30 September 2009)

A brave showing from an ex-cane farmer at the hearing today. It must be very hard publicly bearing your financial predicament.

I wish you good luck Mr Milburn.


----------



## clayton4115 (30 September 2009)

unfortunately, history repeats itself and it will happen again, the only way to stop this is to ban commissions only, and i say this as a financial planner myself,

i just could not even THINK to put my clients in such a high risk strategy, i mean they place all the trust in you,

these two should rot in hell!


----------



## Solly (30 September 2009)

*"It's not the end of the world: Storm boss"*

"A former north Queensland cane farmer says Storm Financial founder Emmanuel Cassimatis assured him he had "nothing to worry about" when borrowing hundreds of thousands of dollars to invest in indexed funds.

Mackay maintenance fitter Bruce Milburn, who has been left nearly $300,00 in debt, took the stand in the Federal Court in Brisbane today to outline his dealings with the collapsed advisory firm and its predecessor, Cassimatis Securities.'

More by Daniel Hurst in Business Day on brisbanetimes.com.au here;

http://www.brisbanetimes.com.au/business/its-not-the-end-of-the-world-storm-boss-20090930-gbyx.html


----------



## Solly (30 September 2009)

*'Storm's gain was client's pain"*

"STORM Financial advised a client to move his money from one fund to another, charged him $7000 to do so, and there was no discernible benefit to his portfolio."

More by Anthony Marx in the Courier Mail here;

http://www.news.com.au/couriermail/story/0,20797,26146197-3102,00.html


----------



## Anastasia (30 September 2009)

I had a bit of a "downer" last weekend when everything just seemed too hard...I just felt so exhausted and alone... and I posted how I felt on ASF.

Well.....I have come through the other side thanks to the many ASF posters who sent me PM's and posts on ASF to "hang in there" and offer me wise words of wisdom, encouragement, and just letting me know you cared. So a very big *Thank You*. 

I am indeed lucky to be a part of a forum with such amazing, compassionate friends.

For the record, the script for antidepressants is still in my handbag. But alas the honoured bottle of Shiraz I was saving for the end of this Storm catastrophe has been cracked open to toast you all. Cheers everyone.


----------



## GumbyLearner (30 September 2009)

Anastasia said:


> I had a bit of a "downer" last weekend when everything just seemed too hard...I just felt so exhausted and alone... and I posted how I felt on ASF.
> 
> Well.....I have come through the other side thanks to the many ASF posters who sent me PM's and posts on ASF to "hang in there" and offer me wise words of wisdom, encouragement, and just letting me know you cared. So a very big *Thank You*.
> 
> ...




Good to hear Anastasia.

Just remember this, a good academic friend of mine reminded me of this both timeless and famous quote the other day

We must always be on guard against...

The Guides, the Wardens of our faculties
And Stewards of our labour, watchful men
And skillful in the usury of time,
Sages, who in their prescience would controul
All accidents, and to the very road
Which they have fashion’d would confine us down,
Like engines….

Woodsworth, The Prelude


----------



## Garpal Gumnut (30 September 2009)

I'm glad you are feeling better Anastasia.

It appears many of the banks have come to the party on ensuring people will not lose their homes. 

Manny is smarter than I thought and has survived the Financial Inquiry and the Federal Court investigation by Worrells the liquidators. Guys in as much **** as Manny and Julie cannot put on the smirks and smiles they had yesterday without having some aces up their sleeves.

SICAG with some of their major minds being advisers who got the poor Storm victims into the stumpf they are in, have been very slack in not going for Manny, instead of the banks. They still have a plug for the Storm fee model on their website, last time I looked.

Scattini from Slater and Gordon had done the banks for them anyway (going for the the banks and making them accountable). Speaking to Stormers they feel very let down by SICAG.

So it remains only for the weak as piss ASIC and the small matter of the $2 million taken from Storm in its dying minutes by the Cassimatises to trip Manny up.

My bet is that he will get clean away, as all the other pied pipers of Australian financial disasters have.

And the reason is, that he is smarter than all the agencies lined up against him. Manny is selling snow to Eskimos again.

gg


----------



## GumbyLearner (30 September 2009)

Garpal Gumnut said:


> So it remains only for the weak as piss ASIC and the small matter of the $2 million taken from Storm in its dying minutes by the Cassimatises to trip Manny up.
> 
> My bet is that he will get clean away, as all the other pied pipers of Australian financial disasters have.
> 
> ...




Well said.

This is the problem.

In my honest opinion, they should buy some roids and grow some teeth if they are lacking in them!


----------



## Judd (30 September 2009)

Garpal Gumnut said:


> .....My bet is that he will get clean away, as all the other pied pipers of Australian financial disasters have.




Aww, Ray Williams did 2 1/2 years scrubbing the toilets and Rod of Adler fame did a little bit of time.  Rod's mate Brad had a looksee at the blank walls for a while as well.

As for lapses of memory in court, let's admit that a certain former female Premier of WA and former Federal Labor MP, appears to have been able to outshine them all in the "I don't remember" stakes.  However, it must be said that she was acquitted, by the jury, of lying to a Royal Commission.


----------



## GumbyLearner (30 September 2009)

Judd said:


> Aww, Ray Williams did 2 1/2 years scrubbing the toilets and Rod of Adler fame did a little bit of time.  Rod's mate Brad had a looksee at the blank walls for a while as well.
> 
> As for lapses of memory in court, let's admit that a certain former female Premier of WA and former Federal Labor MP, appears to have been able to outshine them all in the "I don't remember" stakes.  However, it must be said that she was acquitted, by the jury, of lying to a Royal Commission.




ROFLMAO! From the boardrooms of power to the obsequious warm-lettuce face slapping of the Crown.

Well said.

Just never do that again!! Or we will scold your face with a warm piece of out of season lettuce! Totally ridiciulous. But hey, that's the UMPIRE! 

:iamwithst


----------



## GumbyLearner (30 September 2009)

Anyone need a goorkha


----------



## Julia (30 September 2009)

Garpal Gumnut said:


> I'm glad you are feeling better Anastasia.



Me too, Anastasia.  So good to hear and thank you for letting us know.




> It appears many of the banks have come to the party on ensuring people will not lose their homes.
> 
> Manny is smarter than I thought and has survived the Financial Inquiry and the Federal Court investigation by Worrells the liquidators. Guys in as much **** as Manny and Julie cannot put on the smirks and smiles they had yesterday without having some aces up their sleeves.



I don't think they will have fooled anyone, gg.   Let's wait for the eventual comments from Worrells and ASIC.  Then there are the results of the parliamentary enquiry to come.

I'd have thought Manny and Julie would have scored more brownie points with their interrogators if they'd simply been honest and said they misjudged the whole situation.  To expect anyone to believe, e.g. that Manny couldn't remember whether he was managing director or not, or why the share float failed simply makes them look like the liars and thieves they are.



> My bet is that he will get clean away, as all the other pied pipers of Australian financial disasters have.



I very much hope not.  Even the ignominy of a short jail sentence would offer much satisfaction to stormers.



> The changes served no discernable benefit other than to net Storm a fee of about $7000 - and also exposed him to capital gains tax.
> 
> Mr Milburn was a Storm investor since 1999, and at its peak his portfolio was worth $7m.
> 
> But Storm's collapse has wiped him out and he now has a margin loan debt of $300,000.




Why on earth did he need more than $7m?  Why wouldn't he have sold out at that stage?

Many Stormers have said they invested with Storm just so they wouldn't be dependent on the government pension.  I absolutely understand that.
But I do not understand why $7m -  even invested in the most passive way -would not have earned a retired farmer enough to live on.


----------



## GumbyLearner (30 September 2009)

Julia said:


> But I do not understand why $7m -  even invested in the most passive way -would not have earned a retired farmer enough to live on.




Julia

You are a good person.

These people are offended by your evaluation! Seriously offended! 

Let's rock!

Cheers
G.


----------



## Julia (30 September 2009)

GumbyLearner said:


> Julia
> 
> You are a good person.
> 
> ...



Who is offended, Gumby?  Manny and Julie;    or the retired, once was worth $7M, farmer?


----------



## GumbyLearner (30 September 2009)

Julia said:


> once was worth $7M, farmer?




Well maybe someones eyes got TOO BIG for their stomach?


----------



## Steve Borden (30 September 2009)

Julia said:


> once was worth $7M, farmer?




Am guessing but if the portfolio was worth $7m, less say a margin loan at 60% ($4.2m) less some home loans and/or a commercial loan against the farm he probably had about $1m in equity less some CGT. So he might have walked away with maybe $800k and some unencumbered property.

Apparently this would still not have been enough to live on if you talked to a Storm salesperson.


----------



## Julia (30 September 2009)

Steve Borden said:


> Am guessing but if the portfolio was worth $7m, less say a margin loan at 60% ($4.2m) less some home loans and/or a commercial loan against the farm he probably had about $1m in equity less some CGT. So he might have walked away with maybe $800k and some unencumbered property.
> 
> Apparently this would still not have been enough to live on if you talked to a Storm salesperson.



Ah, silly me.  I forgot about the loans.  Thanks, Steve.


----------



## Steve Borden (30 September 2009)

Julia said:


> Ah, silly me.  I forgot about the loans.  Thanks, Steve.




Julia

Easy to forget about them because of course they were 'claytons' loans and not really a debt at all. Simply a mechanism to convert lazy equity into chickens on the journey to capitalism.


----------



## Mindstorm (1 October 2009)

Hi all,

Much has been said about the people who had multi-million portfolios.

But does anyone know how many of the Storm clients had multi-million portfolios?

How many, like myself, are just communal garden plebs who owed $400K?

I've met many Storm clients, and just one of those had a portfolio of over 
$1M. 

On reflection, knowing that 20/20 hindsight is always perfect, I would not have become involved with Storm.

I truly believed that we were paying for good advice.  I truly believe that we paid a lot of money for the 'best' advice.

Was I stupid?  Yes, I truly was.

Was I duped?  Yes, I truly was.

Do I think that there were greedy people who invested with Storm?  Yes, I do.

I've never been rich.  I've no aspirations to becoming rich.  I just wanted for our retirement to be 'comfortable'.  We don't want a boat, a condo, holidays overseas, whatever.

We got into Storm because we were suffering from a lot of cold calls from financial advice people who knew everything about our financial status.

In the end, I asked our accountant for advice.  I thought that if we were getting all these 'cold calls' from people who 'knew' what our financial position was, (and we checked them out, they were shysters!), that maybe we needed to seek financial advice about our future.

Our accountant told us to contact Storm.  We trusted our accountant.  We thought that his advice would be sound.  He recommended Storm.

We contacted Storm, and from the first conversation I had with a Storm adviser, I felt that they knew where we were financially, and that our best interests were their main concern.

Now?  Well obviously I know that they were singing a party song.  I know that I have taken my family into a very terrible place.

Was I stupid?  Yes, I was very stupid.  Was I greedy?  No, I still don't think so.  I will have to live with my stupidity for the rest of my life.  Worst, my family will have to live with my stupidity for the rest of their lives.

To be perfectly honest?  I am sick of fighting the banks.  I am ready to give up now, and to say okay, I worked my whole life, my wife worked her whole life, we have denied ourselves many things that we wanted to make sure that we would not have to survive on a government pension, but hey that's okay, leave us with nothing, but please give me back my sanity, please tell me that I am not responsible for taking my family to this very terrible situation that we find ourselves in.

For every multi-millionaire Storm client, how many are like me, the lowly person who has taken his family to ruin for $400K?


----------



## Solly (1 October 2009)

*"More Storm waves as client tells of empty assurances"*

"A FORMER north-Queensland cane farmer has recalled how the founder of failed advisory firm Storm Financial assured him the company maintained close contact with lenders to protect investors from losses.

Bruce Milburn told a Federal Court hearing in Brisbane yesterday he was left with a $300,000 debt he could not repay because Commonwealth Bank failed to issue a margin call before his loan slipped into negative equity late last year."

More by Daniel Hurst and Eric Johnston from The Age here;

http://www.theage.com.au/business/more-storm-waves-as-client-tells-of-empty-assurances-20090930-gcs9.html


----------



## shibby (1 October 2009)

Mindstorm said:


> To be perfectly honest?  I am sick of fighting the banks.  I am ready to give up now, and to say okay, I worked my whole life, my wife worked her whole life, we have denied ourselves many things that we wanted to make sure that we would not have to survive on a government pension, but hey that's okay, leave us with nothing, but please give me back my sanity, please tell me that I am not responsible for taking my family to this very terrible situation that we find ourselves in.




Please dont give in now it has been such a long fight and just maybe it will all end soon, I think the worse is over you just have to stay sane a little longer. 
Get angry for a while I know I do every now and then I rant and rave particularly when "people can't remember" I vent my spleen to the heavens and then that makes me more determined to keep going. If you give up then "they" win and my God I will keep fighting to the bitter end.
These people are corrupt, how would you have ever known? 
It never would have entered my mind that organisations and banking institutions would behave like this. 
Guess what you don't know, what you don't know. You will know next time to be wary, alarm bells will ring but for the moment just see this through to the end.  
I know you are tired, my soul is tired too, but just say to your self I can do this till the end of the year, maybe just a little longer but dont give in. 
Keep fighting the fight till that bell rings.


----------



## Solly (1 October 2009)

shibby said:


> Please dont give in now it has been such a long fight and just maybe it will all end soon, I think the worse is over you just have to stay sane a little longer.
> Get angry for a while I know I do every now and then I rant and rave particularly when "people can't remember" I vent my spleen to the heavens and then that makes me more determined to keep going. If you give up then "they" win and my God I will keep fighting to the bitter end.
> These people are corrupt, how would you have ever known?
> It never would have entered my mind that organisations and banking institutions would behave like this.
> ...




shibby, well said.


----------



## Smiley (1 October 2009)

Sure Manny has studied the lives of the rich and dishonest and got his line "I don't remember" from Alan Bond, who used it as part of his phoenix like evading of justice when he appearted in court (may have worn the stripes, but didn't his family pay a few million to ease the billions owed.  

 Interesting quote from recent story
by Paul Clitheroe | 29th September 2009

". . . .the ACCC, estimates that around one in 20 of us will fall victim to a scam this year, costing the community over $1 billion. Moreover, the ACCC is warning that tighter economic conditions could create a boom for con artists as the growing number of people facing financial stress become more open to the prospect of making a fast dollar."

Am going to watch EC & JC's path from here on in  . . . if he ever opens another business many of us wil picket it, as not much else to do when on the aged pension . . . .


----------



## Solly (1 October 2009)

Garpal Gumnut said:


> So it remains only for the weak as piss ASIC and the small matter of the $2 million taken from Storm in its dying minutes by the Cassimatises to trip Manny up.
> 
> My bet is that he will get clean away, as all the other pied pipers of Australian financial disasters have.
> 
> ...




gg, although I did notice a little skip in Mr Upton's step as he left the Hearing and headed down George St with his assitant.

Maybe there is a lot more to come...


----------



## Farencue (1 October 2009)

Mindstorm said:


> Hi all,
> 
> 
> On reflection, knowing that 20/20 hindsight is always perfect, I would not have become involved with Storm.
> ...





Mindstorm

I have so much I would like to say to you about accountants getting kickbacks from financial advisors and/or property developers.
You canot trust people just because they are an accountant, I learnt this through personal experience too.

 I once spent $60 on a taxi ride to the boondocks of Brisbane from the airport to check out the property we were nearly suckered into buying by our accountant - who tried to convince us it was the best thing to do financially but was in fact getting kickbacks from the developer.  
(I lived in the NT in a mining town at the time, and was considered a good target by the shonky accountant and the shonky property developer and all the other mongrels that cold called - as were all the other miners).

However, after I saw the illustrious property with my own eyes, and phoned many real estate agents in Brisbane on my return home (who all laughed at the property's outrageously high price considering the whole place was reclaimed land) I told the developer I would not be signing after all.  
The man did not leave me alone for weeks and weeks, it was so hard to resist the pressure, which included using the old trick of trying to instil FEAR and/or GREED into the punter.
I resisted and I told him to get stuffed.  That was over 20 years ago.

You were scammed Mindstorm and I perfectly understand how you feel.  Nobody likes to realise they fell for a conman but need to understand how it happened.  As I said, the oldest trick in the book is to instil FEAR (of missing out) and/or GREED into the punter.
I have been conned twice in my business and lost money and I was really, really angry about it.  I liked to think I was smarter than that - especially as I had successfully avoided the property developer scam years earlier.

I am so sorry you are up against the wall because of these con artists known as STORM FINANCIAL, including all the scummy advisors associated with Storm.  You are most probably working very hard to keep a roof over your head and food on the table, not as comfortable as you were before Storm.  I wish you all the best with what you now have to do.

If you have children though Mindstorm, YOU are now in the best position to teach them a little about scumbags, scam artists and how there is NEVER an easy way to make money and that not everyone is worthy of trust.  That could be a good thing for your children.

I see it mentioned on this thread that a lot of the scumbags that worked for Storm are working for another financial planning mob.  
Months ago, I was researching some names associated with Storm, and came up with the name of this same financial planning mob.  So I paid ASIC a small sum of money to get the details.  
Surprise, surprise - my own scumbag accountant from the NT sold this firm to the current crop of QLD scumbags and now there are ex Storm staff working there.  Looks like they are all old mates.  The accountant concerned screwed a lot of people in North QLD a few years back with another "investment scheme".

*Beware and do your research on ANYONE who wants your money.*  (You can pay a small fee to ASIC to find out company directors' histories and then do other research from there - well worth the small sum of money and your time).


Only last week, I saw a letter in the Cairns Post  from a woman who went to a financial seminar recently, much like Storm conducted.  She noted that the presenters, Mr and Mrs Make You Rich were dripping in gold and that was such a big turnoff that they did not snare her as a customer.
She (correctly I assume) figured that the gold they were wearing was paid for by the punters.

I hope you dumped your accountant Mindstorm, he was most likely getting a kickback from Storm. 
A few months back, I was looking for income protection insurance and so went to my bank.  They told me they do not directly insure anymore and my bank referred me to a "broker" type insurance person.  
However, when I got out the magnifying glass and looked at the banks fine print - the bank would get a 15% kickback for referring me to this broker.  The broker kept hasssling me and hassling me to come in for an "appraisal".  

He stuffed up when he tried to pass himself off as a direct employee of the bank but just happens to have a different business name and office location.
Like hell I was going  in for an "appraisal" of my income protection needs with a  liar and potential thief.

They are everywhere Mindstorm, I am sorry you have been done, I think you will come out the other side sadder but wiser.  Good luck to you and your family and be on guard against other scammers who want to "reload" you.  They will be actively seeking you out.

All the best.


----------



## Soft Dough (1 October 2009)

Mindstorm said:


> Hi all,
> 
> Much has been said about the people who had multi-million portfolios.
> 
> ...




Sorry, it was not your accountants fault, it was not the banks fault.

It was storm's fault. Emmanuel Cassimatis made obscene amounts of money from commissions, and in the end it was these commissions which were driving the advice you recieved.

As many people said, there were many other firms which managed the crisis, Storm needed commissions to fuel the dividends that EC and JC were ripping out of the company, directly and through their associated companies.


----------



## mellifuous (1 October 2009)

I'd be interested to know why no one seems interested in the fact that storm created unfinished software, and that the software was used by storm and two of the lenders.

I would have thought that the two lenders would have been liable for the defect in the software regardless of the software's creator.

Seems to me, that investors who lost money as a consequence of the defective software would have a clear case to recover.

Wouldn't this give rise to recovery from storm and the two lenders? 

I would have thought that Storm (and its directors) should be a target if they're at fault - there might even be insurance.

(I'm not an investor in storm)


----------



## Julia (1 October 2009)

Mindstorm:  beating yourself up over making a wrong decision will change nothing and will simply make your family more unhappy as they watch your guilt and misery.

I'd say two things to you:

1.  I don't know anyone who has not been taken for a ride by some sort of
    con artist at some time in their lives.  And it seems Manny and Julie were
    a couple of the very best.

2.  We all make the very best decisions we can *with the information we 
     have at the time*.   You didn't know what you didn't know, to
     paraphrase Donald Rumsfeld.

Maybe try to focus on what you still have, rather than what you have apparently lost.  It seems there could be some compensation eventually, and in the meantime it seems you still have the love of your family, probably some good friends, and many people would consider these worth far more than any dollar amount.

Best of luck and good wishes to you.
Julia


----------



## Judd (1 October 2009)

Strange thing about borrowing money from banks.  Most people think they are borrowing from a bank itself.  Reality is that, in general, they are borrowing other people's money.  Yep, Mrs Jones, aged pensioner, who has $8k in a term deposit to cover her funeral costs, Joe Smith, warehouse supervisor, whose salary is deposited and used to fund his family's living expenses.

Usual suspects who, unwittingly, think they are just depositing money when they are actually lending the money to the bank (depositors are shown as a liability in the bank's accounts and where a banks statement is received it it normally produced from the bank's viewpoint - a credit is what they owe you and a debit is what you owe them! - hooray for double-entry bookkeeping.)

So when the funds of these "depositors" are at risk (margin loans, house mortgages, business loans, etc) you would hope that banks go in hard to recover the money they owe to other people.  Probably, that is one of the factors which was behind the actions of the banks in regard to this Storm debacle.

But where the banks has stuffed up, to my mind, it is not the depositors who should wear the cost, and nor should they, but the shareholders.  That is why they stump up the capital and wear the risks.  At least, I hope they understand that.

So rectification of any cr&p lending decisions, through compensation, by the banks will flow through to those shareholders, be they Mrs Jones or Mr Smith (who may also be shareholders in order to supplement their income) and every superannuation fund in Australia, who will, quite rightly, wear the cost of any compensation to Storm former clients.

Those devastated through investing via Storm will more than likely not see it this way but that's understandable as well.


----------



## Garpal Gumnut (1 October 2009)

Julia said:


> 1.  I don't know anyone who has not been taken for a ride by some sort of
> con artist at some time in their lives.  And it seems Manny and Julie were
> a couple of the very best.
> 
> ...




I wouldn't necessarily agree with you Julia re being taken for a ride. 

Manny was a superb salesman and had the get up and go to drag many people with less brains and financial know how with him.

He even fooled Ron Jelich and the SICAG committee into doing his bidding by not going for him rather than the banks. And poor old Ronnie lost more than most.

He still has some close investors ready with the readies to get compensation from the banks.

If the SICAG model works, so will the Manny model.

And Manny will be back with a new operation in eighteen months or two years time.

The man is a genius and I think you are being very hard on him.

gg


----------



## Solly (1 October 2009)

*"Not proud of Storm involvement: Norris"*

"CBA chief executive Ralph Norris has acknowledged that the bank's involvement with Storm Financial was not something he was proud of - but hopes the processes put in place to help affected customers would ease some of their burden.

Norris told an audience at yesterday's Trans-Tasman Business Circle lunch in Sydney that he believed the bank had let some of its customers down."

More by Ruth Liew on Financial Standard here;

http://www.financialstandard.com.au/news/view/26946/


----------



## Solly (1 October 2009)

*"Storm CBA claims should be resolved 'early next year' "*

"Lawyers representing former clients of Storm Financial expect to have claims against the Commonwealth Bank (CBA) resolved by early next year."

More on the ABC here;

http://www.abc.net.au/news/stories/2009/10/01/2701814.htm


----------



## Soft Dough (1 October 2009)

Judd said:


> But where the banks has stuffed up, to my mind, it is not the depositors who should wear the cost, and nor should they, but the shareholders.  That is why they stump up the capital and wear the risks.  At least, I hope they understand that.
> 
> So rectification of any cr&p lending decisions, through compensation, by the banks will flow through to those shareholders, be they Mrs Jones or Mr Smith (who may also be shareholders in order to supplement their income) and every superannuation fund in Australia, who will, quite rightly, wear the cost of any compensation to Storm former clients.
> 
> Those devastated through investing via Storm will more than likely not see it this way but that's understandable as well.




True.

As a holder of all major banks, it annoys me that CBA did not make the calls when it should have.   ( and I bet CBA is kicking itself atm that they did not wait it out 6 months and storm would still be going, its clients would be on the road to recovery and CBA's cash cow would one day start flowing again )

However, the banks will rightly so increase margins on homeloans etc to recoup the money they loaned ( you already see irrational lending practices to small business generated by the political pressure generated by idiotic Kevin Rudd, to generate abnormally low homeloan rates )

and hence why I believe they are entitled to the difference between the day when they were meant to recieve a margin call and when they actually did. 

BUT

no doubt some stormers will want more than their fair share as, even now, I would bet that most STILL do not realise what their net asset was, and continue to confuse it with gross asset.


----------



## Julia (1 October 2009)

Garpal Gumnut said:


> I wouldn't necessarily agree with you Julia re being taken for a ride.
> 
> Manny was a superb salesman and had the get up and go to drag many people with less brains and financial know how with him.
> 
> He even fooled Ron Jelich and the SICAG committee into doing his bidding by not going for him rather than the banks. And poor old Ronnie lost more than most.



Alternatively, Mr Jelich understood very well the risks involved, but figured the potential profits were worth it.  And he took clients along on the same ride.
I am not so charitable as you.

Re Manny being a 'superb salesman', yes, and that is the problem.
Storm investors were not looking for a smart sales job, they were looking for and expecting a realistic assessment of their circumstances and a genuine financial plan in accordance with their risk profile.


> He still has some close investors ready with the readies to get compensation from the banks.
> 
> If the SICAG model works, so will the Manny model.
> 
> And Manny will be back with a new operation in eighteen months or two years time.



Agree.


> The man is a genius and I think you are being very hard on him.
> 
> gg



I presume your whole post is pretty much tongue in cheek as most of your posts are.
I'm not sure, however, that the irony will be much appreciated by Stormers.

Given your level of enthusiasm for Manny, I might even suspect you are lining yourself up for a job with the revitalised Storm model.   Need a reference?


Soft Dough said:


> True.
> 
> As a holder of all major banks, it annoys me that CBA did not make the calls when it should have.   ( and I bet CBA is kicking itself atm that they did not wait it out 6 months and storm would still be going, its clients would be on the road to recovery and CBA's cash cow would one day start flowing again )



Soft Dough, I disagree here.  The market was pretty much in free fall and CBA couldn't risk holding further.   They didn't have the 20/20 foresighted crystal ball to know that a recovery such as we have seen would have occurred.


----------



## bunyip (1 October 2009)

Mindstorm said:


> Hi all,
> 
> Much has been said about the people who had multi-million portfolios.
> 
> ...



Mindstorm

If you'd read all 3700 posts on this thread, as I've done, you'd know that only an odd post here and there makes mention of the people with massive portfolios. 

Most of us are well aware that many Storm investors, probably the majority, were just ordinary people of average financial means who were trying to put themselves in a position to have a decent retirement.
We feel sorry for these people. However, we find it much harder to feel sorry for the small minority who were already very well off financially and had no need to go anywhere near Storm, but they went to Storm anyway because being wealthy wasn't enough for them - they wanted even more.
You admit yourself that there were greedy people who invested with Storm. 
It's these people who have copped some criticism in a tiny percentage of the posts in this thread.

You need to stop beating yourself up. Sure, you made some mistakes - haven't we all at different times. Now you need to look forward rather than backwards. 
Be determined to make the most of your future, whatever that may be. If it means living on government welfare, then so be it. A majority of retirees do it, and live reasonably comfortable and happy lives. Many of lifes true pleasures cost nothing.

As for accountants, well, you've learned the hard way not to place your trust in their advice on investment matters.
Taxation, not investment, is the forte of accountants.
As for accountants who hold an investment advisers licence.....when it's all said and done I think you'll find they're basically just commission salesmen.

An accountant once told me to buy Pasminco. The stock was in the best downtrend you'd ever see. He said he owned quite a bit of it himself. Pasminco shares continued to slide and the company ended up going broke. 
That's how much *he* knew about stock market investment!


----------



## Soft Dough (1 October 2009)

Julia said:


> Soft Dough, I disagree here.  The market was pretty much in free fall and CBA couldn't risk holding further.   They didn't have the 20/20 foresighted crystal ball to know that a recovery such as we have seen would have occurred.




Disagree with what?

I said that they should have made the margin calls.

I never said that they should have kept storm in business, simply that if they did, there would be no problem atm.


----------



## Garpal Gumnut (1 October 2009)

Julia said:


> Alternatively, Mr Jelich understood very well the risks involved, but figured the potential profits were worth it.  And he took clients along on the same ride.
> I am not so charitable as you.
> 
> Re Manny being a 'superb salesman', yes, and that is the problem.
> ...




Manny had the foresight that Adler, Bond and Skase had. 

He had Jelich walking up and down the coast schmoozing and cajoling. He had a phalanx of advisers selling the product with 7% to Storm on every transaction.

The name of the game is to get enough muppets on board with a simple product, this he did.

He now goes up against amateurs and muppets, ASIC, other regulators, Senate committees and the banks. 

The trick with being involved with a genius like Manny is to get out before the whole schamozzle goes **** up. 

When he starts off again in Adelaide or Hobart or in some other city with financial problems, I'll be down there with my gumnuts to get in on the ground floor.

I might even approach the Financial Planners Association to get meself a license. 

A Storm rep was on one of their muppet committees up until a short time before the whole show blew up.

For all I know Manny may still be in with them.

He is a bloody genius and much maligned on this forum for his charisma, money management and care of other people's assets. But he is Manny. And they are few.

SICAG still has Manny adherents involved and with their help he will fight another day. Go SICAG, go.

Good on you Manny. And keep the muppets behind you.

As Jonathon Swift said



> "So nat'ralists observe, a flea
> Hath smaller fleas that on him prey,
> And these have smaller fleas that bite 'em,
> And so proceed ad infinitum."
> ...






gg


----------



## Solly (2 October 2009)

*"Macquarie head to give evidence"*

"THE managing director of Macquarie Bank, Richard Sheppard, has been called to give evidence about the bank's performance during the collapse of financial planner Storm Financial, as further details about problems with the bank's margin loans emerge.

Yesterday it was confirmed that Mr Sheppard and the bank's executive director, Peter van der Westhuyzen, would appear before the parliamentary inquiry on October 28.

BusinessDay is aware of at least one other incident in which it is alleged that there have been serious bookkeeping mistakes in the way Macquarie closed out its margin loans."

More in BusinessDay by Stuart Washington in The Age here;

http://www.theage.com.au/business/macquarie-head-to-give-evidence-20091001-get5.html


----------



## Solly (2 October 2009)

*"Storm model cleared by CBA"*

"Less than two years before Storm Financial collapsed a Commomwealth Bank risk analysis concluded the advisory firm's investment model was sound and funds would suffer little volatility"

Read more by Anthony Marx in The Courier Mail of Oct 2nd 2009.


----------



## DocK (2 October 2009)

Judd said:


> Strange thing about borrowing money from banks.  Most people think they are borrowing from a bank itself.  Reality is that, in general, they are borrowing other people's money.  Yep, Mrs Jones, aged pensioner, who has $8k in a term deposit to cover her funeral costs, Joe Smith, warehouse supervisor, whose salary is deposited and used to fund his family's living expenses.
> 
> Usual suspects who, unwittingly, think they are just depositing money when they are actually lending the money to the bank (depositors are shown as a liability in the bank's accounts and where a banks statement is received it it normally produced from the bank's viewpoint - a credit is what they owe you and a debit is what you owe them! - hooray for double-entry bookkeeping.)
> 
> ...




The cost to shareholders of the CBA due to any compensation amounts paid to ex-storm clients has been mentioned a few times on this forum.  Some seem to begrudge the fact that their shares may fall in value due to compensation being paid to the (insert description of choice here: greedy/ignorant/gullible/foolish etc) people who took storm's advice and the bank's money and now are seeking compensation from CBA.

Whilst I totally understand this view, it should be viewed in perspective.  Although the whole storm debacle is a big deal in North Qld, and a lesser deal in Qld generally, it's really very small potatoes when viewed as a % of the CBA's business in total.  Ralph Norris himself has stated that he's not proud of the "storm episode" but has also said that  "This action affected roughly 2,500 of the bank's customers. The bank said in June the financial impact of these issues is not considered material, but acknowledged that the impact to customers is "more than financial". (http://www.financialstandard.com.au/news/view/26946/ )

To my mind, the CBA share price is more likely to be harmed by negative sentiment towards the bank, which directly affects market share.  I'm sure a canny fellow like Mr Norris realises that being seen to be "doing the right thing to put right what/where they've done wrong" will do far more good to the share price in the long run than the relatively small amount of compensation the bank will end up paying out.  To lose the reputation and standing in the community that the CBA has long held in Australia, particularly with the more mature sections of the community, would do it far more harm in the long run.

And yes, I'm hoping for some small compensation eventually, but I'm also still a direct shareholder of CBA.


----------



## Julia (2 October 2009)

That's a most sensible post, Dock.  I agree with you completely.
BOQ, on the other hand, are generating adverse feeling with their different stand.


----------



## Soft Dough (2 October 2009)

Julia said:


> That's a most sensible post, Dock.  I agree with you completely.
> BOQ, on the other hand, are generating adverse feeling with their different stand.




Perhaps they believe they did nothing wrong, and that the loss of storm customers is worth it in the face of legal action, which may have ramifications for similar events in the future.

I am not sure, but think that the townsville branch in question is a franchisee branch, so what message would be sent out to other franchisees if BOQ condemned their franchisee to bankruptcy for an event where they quite probably acted in a proper manner.

( I do assume they did everything by the book of course! )


----------



## Solly (2 October 2009)

*"Calm before the Storm"*

"STORM Financial's investment model was judged to be sound by a Commonwealth Bank risk analysis less than two years before the advisory group's collapse.

The March 2007 report by CommSec -- which also concluded that funds in Storm would suffer little volatility -- came just two months before the bank's subsidiary, Colonial Geared Investments, struck a then-confidential deal with Storm to raise the loan-to-value ratio (LVR) of clients from 70 to 80 per cent."


More by Anthony Marx in the Herald Sun here;

http://www.heraldsun.com.au/business/calm-before-the-storm/story-e6frfh4f-1225781928718


----------



## Solly (2 October 2009)

Garpal Gumnut said:


> Manny had the foresight that Adler, Bond and Skase had.
> 
> He had Jelich walking up and down the coast schmoozing and cajoling. He had a phalanx of advisers selling the product with 7% to Storm on every transaction.
> 
> ...




gg, I've read and reread your post.

After following this saga from when the slippery slide down the slope started to accelerate, observing the Inquiry and the Hearing, I am now tending to agree.

It's not often you get to see a master in action.

I had lunch with my Stormer mate today. Yep, he's pretty much shattered. He's going through a very dark time and the strain is really starting to show. He's really blaming himself for the whole debacle. He's drifting and really doesn't know where this is going to end. I don't think he's going to be in a good state shortly if a resolution is not forthcoming. 

It's great for Mr Norris to say he's "not proud", whatever that really means. It's unfortunate the principals appear to have such poor recall. It's sad that some Stormers are at a low ebb.

But it's refreshing to see that momentum is building, I'm sure that the lessons learned from this event will benefit the future. I truly hope that all Stormers keep that fire burning and do not stop until they reach that resolution they so desperately seek.


----------



## Solly (2 October 2009)

Garpal Gumnut said:


> I might even approach the Financial Planners Association to get meself a license.




gg, was that you that registered www.iStorm2_0.com with ICANN ?


----------



## Solly (3 October 2009)

*"Bank of Queensland says no advice offered on Storm"*

"THE Bank of Queensland has attacked key elements of the first lawsuit filed by a former client who lost her life savings in the Storm Financial collapse.

In a defence filed yesterday in Brisbane Supreme Court, the bank hit back hard against allegations raised last month by Helen Rubin, a former school teacher who borrowed $184,000 in 2005 to invest with Storm."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26157143-3122,00.html


----------



## Garpal Gumnut (3 October 2009)

Solly said:


> gg, was that you that registered www.iStorm2_0.com with ICANN ?




Solly mate, lol, all this exposure to the rich and not gullible like the Cassimatises has toned your humour.

You can have iStorm mate.

Actually I've registered iToast2_0.com.

It will operate out of Manny's old building in Sturt St.

The logo will be.

                     iToast2_0.com Finance.
                      Get Done like Toast
                        FPA Approved
                      Fees only 12% and 
                          More to Pay

gg


----------



## chrisgee (3 October 2009)

you crack me up mr gg-that is way funny i think i could trust you more than some other advisors i know about-where do i send my bag of money in the brown paper bag?? anither week where there is alot to read and catch up with-i wish i was there to see the king and queen of the shire squirm-looks like theres heaps more to come-when i look at whats happened i now know that the most important thing is to never never never give up-i see the impact on the extended family and friends and i know all these people cant be the cause of whats gone wrong-looks like the gurus arent the computer gurus they thought they were-i know nothing about computer programs but even me thinks theres something smelly about what was going on-who wopuld run a business where you cant monitor things properly and you are supposed to be the experts-i cant wait to hear more-hey stormies hang in there i reckon we are going to see more of the you know what hitting the industrial exhaust fan real soon


----------



## Garpal Gumnut (3 October 2009)

chrisgee said:


> you crack me up mr gg-that is way funny i think i could trust you more than some other advisors i know about-where do i send my bag of money in the brown paper bag?? anither week where there is alot to read and catch up with-i wish i was there to see the king and queen of the shire squirm-looks like theres heaps more to come-when i look at whats happened i now know that the most important thing is to never never never give up-i see the impact on the extended family and friends and i know all these people cant be the cause of whats gone wrong-looks like the gurus arent the computer gurus they thought they were-i know nothing about computer programs but even me thinks theres something smelly about what was going on-who wopuld run a business where you cant monitor things properly and you are supposed to be the experts-i cant wait to hear more-hey stormies hang in there i reckon we are going to see more of the you know what hitting the industrial exhaust fan real soon




Hang in there Chris.

When I get me iToast up and going I'll only charge you 10%, not the normal 12%, because you are a good bloke.

Hang in there mate.

gg


----------



## Solly (3 October 2009)

gg, I had this piece of toast pop up out of the Hotpoint this morning. Not sure what it means but it seems fortuitous that it happened on the day you launched iToast. It looked a bit misshapen and I was just going to throw it in to the composter like I usually do with spoiled food. But then I noticed it didn't look like any piece of toast I'd seen before. I took a closer look, at first I thought I could see a vague outline of a Madonna (Madge) but alas I was mistaken, secondly I thought I could see a faint outline of a famous Nazarethian chippie holding a mitre box but again I was mistaken.

Maybe it's a sign from a higher level, I don't know but maybe it could it be considered as a basis for the trademark for your new venture. I've been staring at it on and off all day. From one angle there appears to be a element of super hero about it, maybe a financial super hero. Another angle it looks a bit cat like, you know stealthy and sneaky just what you need to be in the finance game. As the night fell and the soft rays of sunset diffused, it took on the appearance of a previous mother-in-law, frankly that was a little unsettling. I think it was the stubble. 

Anyway here's the pic;


----------



## Mindstorm (3 October 2009)

Solly said:


> gg, I had this piece of toast pop up out of the Hotpoint this morning. Not sure what it means but it seems fortuitous that it happened on the day you launched iToast. It looked a bit misshapen and I was just going to throw it in to the composter like I usually do with spoiled food. But then I noticed it didn't look like any piece of toast I'd seen before. I took a closer look, at first I thought I could see a vague outline of a Madonna (Madge) but alas I was mistaken, secondly I thought I could see a faint outline of a famous Nazarethian chippie holding a mitre box but again I was mistaken.
> 
> Maybe it's a sign from a higher level, I don't know but maybe it could it be considered as a basis for the trademark for your new venture. I've been staring at it on and off all day. From one angle there appears to be a element of super hero about it, maybe a financial super hero. Another angle it looks a bit cat like, you know stealthy and sneaky just what you need to be in the finance game. As the night fell and the soft rays of sunset diffused, it took on the appearance of a previous mother-in-law, frankly that was a little unsettling. I think it was the stubble.
> 
> Anyway here's the pic;




Solly,

Thanks for the toast post.

You are keeping me sane!

(not an easy task at the moment)


----------



## Garpal Gumnut (3 October 2009)

Solly said:


> gg, I had this piece of toast pop up out of the Hotpoint this morning. Not sure what it means but it seems fortuitous that it happened on the day you launched iToast. It looked a bit misshapen and I was just going to throw it in to the composter like I usually do with spoiled food. But then I noticed it didn't look like any piece of toast I'd seen before. I took a closer look, at first I thought I could see a vague outline of a Madonna (Madge) but alas I was mistaken, secondly I thought I could see a faint outline of a famous Nazarethian chippie holding a mitre box but again I was mistaken.
> 
> Maybe it's a sign from a higher level, I don't know but maybe it could it be considered as a basis for the trademark for your new venture. I've been staring at it on and off all day. From one angle there appears to be a element of super hero about it, maybe a financial super hero. Another angle it looks a bit cat like, you know stealthy and sneaky just what you need to be in the finance game. As the night fell and the soft rays of sunset diffused, it took on the appearance of a previous mother-in-law, frankly that was a little unsettling. I think it was the stubble.
> 
> Anyway here's the pic;




I'll pass on the logo for the present thanks Solly. I've had 4 mother in laws and they all merge into that one piece of toast.

The first at the top is of a toaster, where anyone who doesn't toe the line ends up, except me of course. Come Valentines Day I'll post a clearer picture of corporate governance and the dangers of not adhering to it.

It is important in any enterprise to get a Professional Association behind you, which is the FPA, the picture below the toaster on the left.

And of course one needs a board of directors who are open and opaque in their dealings with the public and any millions left in the kitty when it all goes **** up. The Board of Directors is on the bottom.

gg


----------



## Solly (3 October 2009)

Garpal Gumnut said:


> I'll pass on the logo for the present thanks Solly. I've had 4 mother in laws and they all merge into that one piece of toast.
> 
> The first at the top is of a toaster, where anyone who doesn't toe the line ends up, except me of course. Come Valentines Day I'll post a clearer picture of corporate governance and the dangers of not adhering to it.
> 
> ...




gg, your outfit is looking more and more reputable by the minute, I'm giving Whittakers a big miss now, especially since I found out CBA bought St Andrews.

I suppose as you grow you'll need all the trappings. When your are looking for the corporate jet, I suggest you give the Beechcraft a miss, go for something a little bigger and with more punch and range. I believe there's a couple of QF 744s heading for Mojave soon. I'm sure you could do a deal with Big Al, maybe even negotiate a dry lease. I know a couple of old drivers that would be interested. I think their suspensions are almost served and may soon be allowed in oz airspace.


----------



## Garpal Gumnut (4 October 2009)

Solly said:


> gg, your outfit is looking more and more reputable by the minute, I'm giving Whittakers a big miss now, especially since I found out CBA bought St Andrews.
> 
> I suppose as you grow you'll need all the trappings. When your are looking for the corporate jet, I suggest you give the Beechcraft a miss, go for something a little bigger and with more punch and range. I believe there's a couple of QF 744s heading for Mojave soon. I'm sure you could do a deal with Big Al, maybe even negotiate a dry lease. I know a couple of old drivers that would be interested. I think their suspensions are almost served and may soon be allowed in oz airspace.




John Travolta is the outside director, I knew his grandfather when he foist came to the Bwonx.

He will fly me anywhere I need to go.

I'd like to stay grounded though and will use the Arnage still.

iToast go.

gg


----------



## Solly (4 October 2009)

gg, It's amazing how coincidences happen. I was over at a mate's place this morning after my morning run. A Magistrate has deemed he doesn't need his car for a while and he has converted his Titan Goldstar into student accommodation. I've never met a more focused motivated bunch and they tell some great yarns about life on the Subcontinent. I'm not sure if 15 people living in a shed actually complies with local by-laws but I'm sure Councillor Clark would admire his entrepreneurial spirit. My mate does own white shoes and these are still seen to be worn quite often even away from the yacht clubs down this way. 

It's hard to see the shed from the road as the neat row of Porta-loos obstructs a direct view, along with the former Tarago cabs parked out the front. These guys are pretty switched on and are really into computer programming even though they are studying for their Bachelors of Computer Games, I'm sure it wouldn't be a big leap into developing a Financial Services monitoring program package. After all you just need a good looking splash screen, a semi-functional GUI, dashboard reporting with needles and dials that spin, flash and point. I'm sure these guys have a good understanding of managing data in relational database management systems, their copy of SQL:2008 even looks legit. They seem to be sharp with Java as well and I even saw a couple that looked like that they could sort columns in Excel and one could even concatenate cells.  You can even get some flash looking docs from the templates in Publisher, just pinch some logos from the web and populate with some random data from the beta version of the program. Colour laser printouts also give that professional looking edge especially with the dashboard snapshot and bar graphs.

So if you are looking for a Financial Services monitoring program package that you can present to clients I'll get their email address maybe they can help out for a reasonable fee. I know they are anxious for functional air conditioning and would certainly be fair negotiators. They really don't play World of Warcaft all of day but that doesn't explain why they have a 1 Gig interface on their switch, I'd didn't think you could get this speed on a HFC cable drop.

I suppose you'll need to give this program a good catchy name. Got any ideas? Maybe something like Foolyoumore or Suckyoudry. A believable name always adds an air of authenticity.


----------



## HighRyder (4 October 2009)

Solly said:


> gg, I had this piece of toast pop up out of the Hotpoint this morning.
> 
> Anyway here's the pic;




Sensational looking toast there. Unbelievable!


----------



## Harleyquin (5 October 2009)

Solly you've changed your avatar, have you bought a deserted island somewhere?


----------



## Garpal Gumnut (5 October 2009)

Harleyquin said:


> Solly you've changed your avatar, have you bought a deserted island somewhere?




If he has, its got a bloody big Tsunami rolling over it. Maximise it.

gg


----------



## Solly (5 October 2009)

Harleyquin said:


> Solly you've changed your avatar, have you bought a deserted island somewhere?






Garpal Gumnut said:


> If he has, its got a bloody big Tsunami rolling over it. Maximise it.
> 
> gg




Harleyquin, Just getting ready for a little hop away from home base for a few days.

gg, it's not a Tsunami just a gentle wave break over a coral cay were the happiest people on earth live.


----------



## Solly (9 October 2009)

*"CGI executive allegedly sacked over Storm
Aftershocks continue"*

"Storm rumour mill continues to churn amid speculation Colonial Geared Investment's head of investment lending has been sacked.

Colonial Geared Investments (CGI) head of investment lending John Clothier has allegedly been let go from the firm."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7581.htm


----------



## cuttlefish (9 October 2009)

Without the banks going after him its pretty likely that Manny will get off imo and be left a free man walking.  It wasn't a public company and the banks are going to be scared to take him on because of their own duplicity.  So once all the noise of 'inquiries'  has died down(apart from the feelgod factor for the pollies what is the actual power of these inquiries to impact change?) ... that may be that.  Its not like SICAG is going to go after Manny and they represent a good proportion of those that have been burnt by Storm ... so really who's left to go after him - no banks, no shareholders, no clients ...  just ASIC  LOLHAHALOL yes just ASIC.   

No wonder the Cassimatis were smililng for the cameras in their court appearance the other week.


----------



## Solly (9 October 2009)

*"CGI staff at risk in Storm aftermath"*

"Commonwealth Bank of Australia's restructure following the collapse of Storm Financial is believed to be continuing, with another manager being placed on "extended leave"."

Read more by Duncan Hughes The Australian Financial Review of Friday, 09 October 2009.


----------



## Solly (9 October 2009)

cuttlefish said:


> Without the banks going after him its pretty likely that Manny will get off imo and be left a free man walking.  It wasn't a public company and the banks are going to be scared to take him on because of their own duplicity.  So once all the noise of 'inquiries'  has died down(apart from the feelgod factor for the pollies what is the actual power of these inquiries to impact change?) ... that may be that.  Its not like SICAG is going to go after Manny and they represent a good proportion of those that have been burnt by Storm ... so really who's left to go after him - no banks, no shareholders, no clients ...  just ASIC  LOLHAHALOL yes just ASIC.
> 
> No wonder the Cassimatis were smililng for the cameras in their court appearance the other week.




cuttlefish, I believe that there are many more chapters of this saga to come and I wouldn't dismiss ASIC's capabilities just yet........


----------



## Garpal Gumnut (9 October 2009)

Solly said:


> *"CGI staff at risk in Storm aftermath"*
> 
> "Commonwealth Bank of Australia's restructure following the collapse of Storm Financial is believed to be continuing, with another manager being placed on "extended leave"."
> 
> Read more by Duncan Hughes The Australian Financial Review of Friday, 09 October 2009.




One of the more unfortunate collateral victims of this debacle have been the CBA and other bank employees.

A mate's son here in Townsville has taken it very personally as he feels he has let CBA clients of Storm, he helped with the paperwork down.

And the CBA have been dragging employees involved down south for interviews which sound more like **** covering and star chambers rather than trying to find the truth or provide support to staff.

The banks need to support their staff unless it can be proven they were negligent.

gg


----------



## Macquack (10 October 2009)

GG, can you please enlighten me as to why it is the lenders fault, when the borrower fails to repay the loan.

I still dont understand why the onus is on the lender to prove the borrower has the capacity to repay. Any paperwork is generally for the benefit of the lender because the borrower has the cash.


----------



## Garpal Gumnut (10 October 2009)

Macquack said:


> GG, can you please enlighten me as to why it is the lenders fault, when the borrower fails to repay the loan.
> 
> I still dont understand why the onus is on the lender to prove the borrower has the capacity to repay. Any paperwork is generally for the benefit of the lender because the borrower has the cash.




I agree totally Mac. 

The bank are leaning on their *employees* who were the bunnies who gave the muppets the loans.

I think we are in agreement, or am I missing something?

gg


----------



## DocK (10 October 2009)

Garpal Gumnut said:


> I agree totally Mac.
> 
> The bank are leaning on their *employees* who were the bunnies who gave the muppets the loans.
> 
> ...




Perhaps the bank employees who decided to provide an inflated valuation of my home to storm (done without inspection or request) in order for storm to advise me to invest further - to the benefit of both storm and bank - should have made at least a reasonable attempt to ensure they valued this "muppet's" house at an amount somewhere in the neighbourhood of market value.  And perhaps they could have made me aware of the fact that my bankers and financial advisers were in bed with other while they were at it - although ultimately I'm the one who got ####ed.

You are entitled to think what you will, but I'm a little tired of being referred to as a "muppet" and similar by people who don't know me or my circumstances, and are "tarring all ex-storm clients with the same brush".


----------



## bunyip (10 October 2009)

DocK said:


> Perhaps the bank employees who decided to provide an inflated valuation of my home to storm (done without inspection or request) in order for storm to advise me to invest further - to the benefit of both storm and bank - should have made at least a reasonable attempt to ensure they valued this "muppet's" house at an amount somewhere in the neighbourhood of market value.  And perhaps they could have made me aware of the fact that my bankers and financial advisers were in bed with other while they were at it - although ultimately I'm the one who got ####ed.
> 
> You are entitled to think what you will, but I'm a little tired of being referred to as a "muppet" and similar by people who don't know me or my circumstances, and are "tarring all ex-storm clients with the same brush".




I agree.
It's not acceptable to call people unflattering names because they made some wrong choices and fell victim to con artists.
GG, pull your head in son - you should know better than to lower yourself to that standard.


----------



## maccka (10 October 2009)

I sincerely hope that we are not about to embark on the next round of name calling and abuse of Storm clients (and then back again in return) that seems to occur with regular monotony on this forum.  

One thing that some members of the forum might like to keep in mind is that many of the Storm investors were shareholders of banks like the CBA until someone decided to sell them out and/or suspend and then close the funds.  So it would seem that clients like this were done over at least twice - once as investors and clients and secondly as shareholders.  Double the hurt perhaps???

I would also like to ask some questions of CBA shareholders who are unhappy about the damage that has been done to the bank through its alleged actions (that in some cases it is admitting publicly to so therefore not alleged).  
Did you vote for your bank's board members?  
Whether you did or didn't is possibly irrelevant if you have the ability to remove them at the next AGM?  
Who appoints the CEO?  
Is it the Board?  
What powers do shareholders have to call for the CEO to be hauled into line, penalized or even sacked if it is appropriate to do so?  

Whether the CEO did the dirty deeds or not is irrelevant as he is the one with the ultimate responsibility (which he accepted when he took up the position AND its multimillion dollar salary + bonuses) for staff in the organisation.  Who does he report to?  Who is he responsible for?  Who sees copies of his position and role descriptions?  It seems like fairly basic governance issues to me.  

cheers
Maccka


----------



## Julia (10 October 2009)

DocK said:


> Perhaps the bank employees who decided to provide an inflated valuation of my home to storm (done without inspection or request) in order for storm to advise me to invest further



DocK, do you know for sure that this inflation was done by the bank and not Storm?

I agree entirely about the use of derogatory terms when referring to Stormers.
They know they made mistakes.  No need for insults.


----------



## Garpal Gumnut (10 October 2009)

Julia said:


> DocK, do you know for sure that this inflation was done by the bank and not Storm?
> 
> I agree entirely about the use of derogatory terms when referring to Stormers.
> They know they made mistakes.  No need for insults.




I fail to see where I've been derogatory.

Can you enlighten me.

gg


----------



## DocK (10 October 2009)

Julia said:


> DocK, do you know for sure that this inflation was done by the bank and not Storm?
> 
> I agree entirely about the use of derogatory terms when referring to Stormers.
> They know they made mistakes.  No need for insults.




Julia, to the best of my knowledge, no bank would simply accept a valuation from a financial planner at face value - or I should certainly hope not.  Storm were financial planners and had no qualifications as valuers.  If the CBA accepted (and lent against) a valuation put forward by storm that would make them even more remiss in my view.  I believe it may sometimes be common practice for a bank to accept the purchase price of a property as fair market value where the loan is for its purchase, but other than that I think the bank carries out its own valuations on properties offered as security, or pays a registered valuer for a written valuation report.  

The desktop valuation system adopted by CBA clearly does not involve a physical inspection of the property.  I'm not sure what method is used to arrive at a valuation, but history certainly seems to indicate they were rather inaccurate in several cases.


----------



## clayton4115 (10 October 2009)

as a financial planner myself and at that time, we used to talk about how there was this firm up north who used to put clients money into shares and gear them em to the hilt,

we used to say to ourselves, we would never be able to do that as it would breach our licensee's policy about investing clients money,

well as we all know it all unravelled in a terrible way when the stockmarket crashed.


----------



## bunyip (10 October 2009)

clayton4115 said:


> as a financial planner myself and at that time, we used to talk about how there was this firm up north who used to put clients money into shares and gear them em to the hilt,
> 
> we used to say to ourselves, we would never be able to do that as it would breach our licensee's policy about investing clients money,
> 
> well as we all know it all unravelled in a terrible way when the stockmarket crashed.




So where does that leave Cassamatis - do you think he'll be refused a financial planners licence in future? 
Or stripped of his licence if he still holds one?
Do FP's have to reapply for a licence every year or two years or whatever? 
If so, I wonder if the powers that be will have the sense to refuse to renew his licence.
I don't doubt that he'll move to open another financial planning outfit if he's allowed to hold a licence. And it'd be a safe bet that some Storm victims would support such a venture.


----------



## Soft Dough (10 October 2009)

bunyip said:


> So where does that leave Cassamatis - do you think he'll be refused a financial planners licence in future?
> Or stripped of his licence if he still holds one?
> Do FP's have to reapply for a licence every year or two years or whatever?
> If so, I wonder if the powers that be will have the sense to refuse to renew his licence.
> I don't doubt that he'll move to open another financial planning outfit if he's allowed to hold a licence. And it'd be a safe bet that some Storm victims would support such a venture.




Of course he will be granted a new license,

otherwise all he has to do is get someone he trusts, perhaps his ex-director relative, and then get her to get a license, then he can "sell" her services, just like he was doing to Storm.

There are ways and means about it.

My gut feeling is he will get away with it, however I would give a few thousand to be able to read, in detail the documents he wanted to table, there is obviously something there he is scared of, or wants to use as a bargaining tool.


----------



## Mindstorm (10 October 2009)

bunyip said:


> So where does that leave Cassamatis - do you think he'll be refused a financial planners licence in future?
> Or stripped of his licence if he still holds one?
> Do FP's have to reapply for a licence every year or two years or whatever?
> If so, I wonder if the powers that be will have the sense to refuse to renew his licence.
> I don't doubt that he'll move to open another financial planning outfit if he's allowed to hold a licence. And it'd be a safe bet that some Storm victims would support such a venture.





I would hope that the storm debacle will preclude Cassimatis from ever holding an FP licence again.  But, there may be no obstacles put in front of his wife holding one.

I'm sure that Manny will resurface, even from his (hopeful) prison cell.  I just pray that he will never fool as many people as he has done to date.

Yes, I'm sure that there are still some storm clients who follow him blindly.  Maybe they were amongst the lucky few 'greedy' storm clients who lived the high life, who went to Africa, Italy, etc.

Unfortunately, my family are amongst the ones who reinvested all gains, who never took anything out, who thought that we would have plently of time in our 'retirement' in twenty years or more, to take advantage of these wonderful trips, the ones who just funded Manny's lifestyle, and paid big time for that stupid mistake.

MS


----------



## Julia (10 October 2009)

bunyip said:


> I agree.
> It's not acceptable to call people unflattering names because they made some wrong choices and fell victim to con artists.
> GG, pull your head in son - you should know better than to lower yourself to that standard.






Garpal Gumnut said:


> I fail to see where I've been derogatory.
> 
> Can you enlighten me.
> 
> gg



I don't know why you're addressing your question to me, gg.
I was simply agreeing with what Bunyip said earlier, not making a separate observation of my own.  I didn't direct any criticism or otherwise towards you in particular.
There have been various insulting terms used to Stormers throughout this thread by various people.   I simply don't think it helps anyone to throw insults around.


----------



## Garpal Gumnut (11 October 2009)

Julia said:


> I don't know why you're addressing your question to me, gg.
> I was simply agreeing with what Bunyip said earlier, not making a separate observation of my own.  I didn't direct any criticism or otherwise towards you in particular.
> There have been various insulting terms used to Stormers throughout this thread by various people.   I simply don't think it helps anyone to throw insults around.




If I've been derogatory towards anyone I apologise.

Being derogatory is not the way to argue, but we all have thoughts and beliefs and occasionally they slip into pen or type. 

Apologies to Bunyip.

Apologies to you Julia

And to any bunnies or muppets who I've offended by association with my remarks.

Jeez this brings me back 

3 Hail Marys and a Glory....

gg


----------



## Soft Dough (11 October 2009)

Perhaps GG is referring to the staff as the muppets?

"The Cassimatis Show"

It's the Cassimatis Show with our Very Special Guest Star, Ralph Norris... 

It's time to bring out chequebooks 
It's time to sell it right 
It's time to meet the Muppets at Storm finance tonight. 

It's time to ramp up gearing 
It's time to cruise all night 
It's time to raise returns at Storm finance tonight. 

They always come in here and
I guess they'll never know 
Their prized house and their assets 
Are on the line to go 

And now the CEO's departed 
He thinks he should be Martyred 
The enquiries have only started 
On the most sensational gearingational corruptionational Muppetational 
This is what we call Cassimatis Show! 

(Julie blows her trumpet)


----------



## Garpal Gumnut (11 October 2009)

Soft Dough said:


> Perhaps GG is referring to the staff as the muppets?
> 
> "The Cassimatis Show"
> 
> ...




lol 

May I have permission to put it on my blog.

gg

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

http://itoastgg.blogspot.com/


----------



## clayton4115 (11 October 2009)

bunyip said:


> So where does that leave Cassamatis - do you think he'll be refused a financial planners licence in future?
> Or stripped of his licence if he still holds one?
> Do FP's have to reapply for a licence every year or two years or whatever?
> If so, I wonder if the powers that be will have the sense to refuse to renew his licence.
> I don't doubt that he'll move to open another financial planning outfit if he's allowed to hold a licence. And it'd be a safe bet that some Storm victims would support such a venture.





i don't know the details of Storm Financial itself, but it looks like they had their own dealers license to give advice. This means he could do what ever he wanted, its amazing that their compliance guys inhouse would have let these types of investment strategies go by (gearing up clients to the hilt)

gearing is a proven wealth creation strategy, but when greeds come into the equation then the inevitable is that you will lose alot of money,

i don't have any of my clients geared into the market, mainly bc they are young families who's first priority is to pay of their debt. Thats something i will consider for them down the track, the sharemarket will still be here at that time.

my main aim when i meet new / potential clients is to see how i can get them more money in their back pocket, their are various strategies out there which can be utilised its that mr and mrs average don't know about em, thats my job to help em budget and help em create wealth for the future,

wealth creation is a 30 year plan (not 5 yrs like Storm Financial).

Debt is a good servant but a terrible master.


----------



## Harleyquin (11 October 2009)

If you are a financial planner and you knew that Storms strategy was so dangerous before any of this occurred why wasn't it possible for those of you 'in the know' to do something about it before a tragedy like this occurred.  Weren't you concerned about their clients as well or only yours.  How were we to know this prior to this occurring.  I thought we were in safe hands.

Reading this forum it is very obvious that there are those of you out there who are extremely experienced investors who have enough 'know how' and nous never to participate in any sort of financial investment scheme to those of us who are complete amatuers.

I'm a storm 'muppet' who has been stripped of everything and trying to get 'on with it' is impossible.  I have reached for the anti depressants, the sleeping pills etc anything to cope.  Nobody takes advice from a licensed expert to get so decimated.  

Storm Financial was the one and only time we have ever been game enough to trust anyone with our money and what little we have left will no longer be 'banked.'  All our bank accounts have been closed.

I no longer trust finance people or the banks.  Thank you to those of you who have advised me to try educating myself about investing but it's a bit hard when you're full of tablets to numb the brain.

I dearly wish that I had the brains and know how to invest wisely as many of you have, good on you, I doubt that I will ever have the 'guts' or money to invest in anything but will continue to try educating myself.


----------



## clayton4115 (11 October 2009)

hi Harley

i am sorry for your loss, believe me, when i read your post i do feel really sad of what you are saying.

Storm Financial was known in the financial planning circles but we could not just go knocking on their door and tell them how to run their business or tell them to stop what they are doing, that is the job of the ACCC and ASIC to investigate these matters,


Its like i cannot go next door and tell the hubby and wife to stop having their arquement, its their business not mine.

Every year i get a compliance visit from Accompli (A third party compliance team) who come out and audit my files, they pick my client files on random, to make sure i am doing the right thing by the client.

Even a piece of paper not secured in the client file could be a breach, thats how stick they are.

Every time i produce a Statement of Advice for a client, they fall in one risk asset allocation, even if they fall in the "growth" asset allocation it specifically states that 
"as a growth investor you should have your funds invested in the following asset classes...

45% Australian Shares
35% International Equities
10% Fixed Interest

etc etc

so i cannot fathom how the hell they put ALL their clients money in one asset class (Aussie Shares)

major compliance breach just there!


----------



## Julia (11 October 2009)

Harleyquin, I'd like to suggest that you get some counselling from a good psychologist (this is free with Medicare), rather than numb your brain with chemicals.

The medication may make you feel less upset and anxious but it doesn't allow you to learn coping strategies.  A psychologist will help you deal with what has happened, give you techniques for dealing with grief and anxiety, and equip you for the future.

Also, as I've suggested before, to take the view that you now cannot trust any bank or financial professional is a bit unreasonable on the basis that you have been stung by one who was without morality.


----------



## Harleyquin (11 October 2009)

Julia I've been under a doctor, a mental health nurse and a psychologist for months.... nothing helps.  

Unless you have been through something like this you have no idea what we are going through and nobody puts themselves in this position deliberately.  

I keep repeating myself here but we honestly thought we were going to a genuine financial planner and although we don't like borrowing money we were convinced by these people that this was the new way forward for us.  

We never borrowed money to buy a house or a car but they talked us into this saying this is the way it's now done and when we questioned others who were investing with financial planners they too had a debt.

Apparently debt is now widely used as a genuine investment strategy.  Of course we were worried about borrowing money and the interest but we were told we would never have to worry about this debt.  The monitoring of this investment and the protection of our finances were supposedly what we were paying a professional financial advisor for.  I had no idea how to monitor the stock market I could only be guided by the All Ords.  

I have been reading many of the threads on the ASF and picking up quite a lot of useful information but it's a huge learning curve for someone on the verge of retirement who has to start all over again after saving religiously all of our lives and losing the lot and still in debt, we can never ever repay the debt.  

I find the newbie lessons by Sir O very interesting but don't know how to apply the information into actually investing.  Have also been reading about investing from recommended internet sites and books.  Have info overload at the moment.  My biggest concern is 'do we risk playing the stock market with what little knowledge and money we now have'.  

Our home is on the market and very soon we will have nothing except debt, no home, no money nothing and we will be on the old age pension for the rest of our lives unless a miracle happens.


----------



## Garpal Gumnut (11 October 2009)

Harleyquin said:


> Julia I've been under a doctor, a mental health nurse and a psychologist for months.... nothing helps.
> 
> Unless you have been through something like this you have no idea what we are going through and nobody puts themselves in this position deliberately.
> 
> ...




I'd agree with Julia, Harlequin.

You have to be in the right frame of mind to invest as it often involves loss. You should have a plan that your losses you accept as part of a bigger plan, made up for your winnings.

Its called money management with a trading plan but it sounds like you don't have enough shekels to do this.

Your mental state is too fragile to enter this space at present.

Stick with Scatini and the lawyers and try and recoup as much as possible.

By all means see a trickcyclist and stay on medical treatments if they help.

Sometimes staying out of the market is a wise move.

Exercise, meditate and visualise. Its on the net if your GP or trickcyclist doesn't give it to you. Just google those three words.

Stay positive if you can.

Grieve for your losses and try and try to see some poor bastard who is worse off than you. There always is. Start in your local park at 5am when they wake up.

Best of luck mate.

gg


----------



## clayton4115 (11 October 2009)

Garpal Gumnut said:


> Yes mate its a caveat emptor or buyer beware situation.
> 
> Many of the older financial planners are ex insurance salesmen who sold insurance nobody would ever need.
> 
> ...




I totally agree with you GG, the older blokes are just ex insurance salesmen who want to make a quick buck (commissions)

the education standard is woefully low 4 subjects through an external educational institution and you can call yourself a financial planner, sorry but this is just crap,

i did it the right way, went and did my degree in financial planning through griffith uni a few year back, got my CFP and i call myself a financial planner,
not some DIK with 4 subjects in a diploma course!


----------



## Landyman (11 October 2009)

Harleyquin said:


> If you are a financial planner and you knew that Storms strategy was so dangerous before any of this occurred why wasn't it possible for those of you 'in the know' to do something about it before a tragedy like this occurred.  Weren't you concerned about their clients as well or only yours.  How were we to know this prior to this occurring.  I thought we were in safe hands.
> 
> Reading this forum it is very obvious that there are those of you out there who are extremely experienced investors who have enough 'know how' and nous never to participate in any sort of financial investment scheme to those of us who are complete amatuers.
> 
> ...




We did, but the response was "a look to the heavens", "a knowing smile between fellow investors", and being ignored and cut from conversations and being marked as "ignorant" or "negative". After a while we took the attitude "well lets wait and see". 
And what do we see?
None can  or could be told when things were looking up.


----------



## Judd (12 October 2009)

Landyman said:


> We did, but the response was "a look to the heavens", "a knowing smile between fellow investors", and being ignored and cut from conversations and being marked as "ignorant" or "negative". After a while we took the attitude "well lets wait and see".
> And what do we see?
> None can  or could be told when things were looking up.




When I first commenced reading about this Storm stuff, I had the attitude of how [insert derogatory description] of these [insert further derogatory description] who placed money with Storm.

I have read many of the posts in this thread from former Storm clients and also the submissions to, and transcripts of, the Parliamentary Inquiry.

As a result, my view has altered and that Landyman's post is probably the core of the issue.  Storm clients were and are not dumb.  A few, a very few, were greedy and deserve their just deserts in my opinion.  As for the rest you wouldn't wish such a situation on your best enemy or worst friend.

I am not sure of the population of Townsville (around 180,000?) and it doesn't really matter but I tried to place myself in a situation where all I was receiving from a relatively small society of friends, family and acquaintances was positive feedback about investing via Storm and the only negative was "being cut from conversations and called ignorant" if I didn't.  Would it be possible for me to be seduced by such a siren call?

It was stated in one of the transcripts, I think it was from the ASIC or the FPA, that most referrals to financial planners are by word of mouth.  So yeah, unless I deliberately sought out the "negative" views of those who didn't invest with Storm, it is certainly feasible unless you were especially thick skinned or, more fundamentally, hated revealing to anyone anything about the family's financial situation.

So no I don't think those who have been shafted by Storm - I'll leave any culpability of the banks out of it for the purposes of this post - should be totally down on themselves for their decisions.  Responsible for those decisions for sure and need to recognise that (no one was tied to a chair and had a gun held at their head to convince them to invest) but not so hard that they become flagellants.


----------



## Solly (12 October 2009)

*"Storm margin loan claims fast tracked
Offers received"*

"CBA has begun submitting offers to Slater & Gordon over Storm Financial margin loans."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7591.htm


----------



## Solly (12 October 2009)

*"Storm Financial co-founder Julie Cassimatis sought $2m transfer"*

"STORM co-founder Julie Cassimatis asked for $2 million to be paid into the account she shared with husband Emmanuel on the same day the company needed to pay tens of millions of dollars to stave off bankruptcy."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,26197989-601,00.html


----------



## Solly (12 October 2009)

*"Storm 'asked about insolvency' before moving $2m"*

"THE founders of Storm Financial asked their accountants for information about insolvent trading two days before ordering $2m be moved from the company into their bank account."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26197995-3102,00.html


----------



## Solly (12 October 2009)

*"Storm founder 'knew company was in trouble' "*

"This morning Mr Barrett answered questions about the company's practice of lending money to its own clients, saying he understood the premise of helping clients through tough times."

More from the ABC here;

http://www.abc.net.au/news/stories/2009/10/12/2711977.htm


----------



## Garpal Gumnut (12 October 2009)

Solly said:


> *"Storm 'asked about insolvency' before moving $2m"*
> 
> "THE founders of Storm Financial asked their accountants for information about insolvent trading two days before ordering $2m be moved from the company into their bank account."
> 
> ...






> The inquiry also heard that on October 14 PWC had told the Cassimatises their liabilities were greater than their assets and that could put in them breach of their financial services licence




From the article above.

Oh dear Solly, it looks as if 2011 is on.

I had to go down to a meeting in Lennons today and was given a room to freshen up. I must admit I was shocked by the state of the hotel. Much below my standards. 

May we change the venue for the get together to the Marriott on the upper floors. There is an elite area with wifi, free brekkie, newspapers and drinks after a long day, I am told.

I have a mate who runs a limo service and he can get us up to the courts in 5 minutes.

gg


----------



## Solly (12 October 2009)

Garpal Gumnut said:


> From the article above.
> 
> Oh dear Solly, it looks as if 2011 is on.
> 
> ...




gg, sounds like a great idea. I'm very familiar with that end of town, a totally different aspect with magnificent river views. I've been there many times, we'd even be close enough to do a traditional afternoon session with the gang at the Orient just up the road.

I'm very impressed with the wifi and free drinks, if the limo's not always available it might even be worth a quick City Cat trip from Riverside to North Quay to help with the carbon offsets.


----------



## Solly (12 October 2009)

*"$2m in eye of Storm"*

"In a day of damning allegations in Brisbane, lawyer Craig Wilkins, acting for Storm liquidator Worrells, used emails and diary notes of Mr Barrett to show the company had almost certainly traded while insolvent before its collapse on January 12."

More in the Herald Sun here;

http://www.heraldsun.com.au/business/m-in-eye-of-storm/story-e6frfh4f-1225786042660


----------



## darkside (12 October 2009)

Garpal Gumnut said:


> From the article above.
> 
> Oh dear Solly, it looks as if 2011 is on.
> 
> ...




GG,


I am thinking the Stamford, lovely "digs", outstanding view, and just a short stroll via the lovely Brisbane RiverWalk" to the courts , where we can chat with the "silks" on our way !!!


----------



## Judd (13 October 2009)

> *Founders got $2m as Storm Financial struggled*
> 
> IMAGINE Mark Barrett's shock. In December last year, as he worked 18-hour days, and weekends, to try to keep Storm Financial afloat while the company's losses kept piling up, the company's chief financial adviser arrived at Storm's modernist Townsville headquarters after only a few hours sleep to find that his bosses had quietly pulled out $2 million for themselves while deciding who to sack within the company.
> 
> ...




http://www.theaustralian.news.com.au/story/0,25197,26202186-5013479,00.html

Well, well.  Without a doubt, these allegations must come as a total surprise to any supporters of E & JC.


----------



## Solly (13 October 2009)

*"Storm directors feared breach"*

"An outstanding tax bill of $11.2m heralded Storm Financial's "difficult" financial position. · The Federal Court is examining the firm's joint chief financial officers."

Read more by Michelle Singer in The Australian Financial Review of Tuesday, 13 October 2009.


----------



## Solly (13 October 2009)

Judd said:


> http://www.theaustralian.news.com.au/story/0,25197,26202186-5013479,00.html
> 
> Well, well.  Without a doubt, these allegations must come as a total surprise to any supporters of E & JC.




As reported in the link Judd posted above, I find this amazing that when in the opinion of Mallesons Stephen Jaques and PricewaterhouseCoopers these firms  believed that EC & JC had no claim to the $2m payment, yet they didn't respond to return it. I suppose when you are running the show opinion is just opinion.

But I have always found it unusual that a dividend was paid even when the company failed to list.

I believe that there are some very interesting times ahead.....


----------



## Solly (13 October 2009)

*"Storm co-founder allegedly pushed up bank transfer to $2m"*

More on the ABC here;

http://www.abc.net.au/news/stories/2009/10/13/2712737.htm


----------



## Harleyquin (13 October 2009)

Have just been to a seminar with a financial planner and the first two things he said to the audience was      

''As a financial planner

1. You have to understand the clients financial position.

2. You have to justify why you gave that advice.''

Why and how did the storm operatives manage to bypass this concept and still maintain their financial planning license.  

Why did the FPA approve of storms advice and maintain them as members of their association until it was too late, why couldn't they see storms advice for what it was long before this occurred.  

If storm was well known in financial planning circles for it's aggressive advice why wasn't something done about it long before the inevitable occurred.

For those on this forum who think that we are only blaming the banks that is definitely not the case.  As we are becoming more educated in the financial planning process it is obviously clear to everyone just how culpable this so called financial planning company was in the whole debacle.  

I look forward to the day when each and every one of this company's owners and advisors are convicted for the fraudulent activity that they have conducted and the lives that they have destroyed with their lies and greed.

I don't see us as being greedy we only wanted to make our money work for us so that we could retire in comfort without having to rely on the old age pension and needed the help of a financial planner to do that.

Again I would like to ask the question 

'Why and how could they continue to operate as financial planners when to all intents and purposes everyone in the know knew that they weren't?'

'Why did all of the banks involved with them so willing to lend them the obscene amounts of money that they did?'  

We have only needed to borrow money once from a bank and we were well scrutinised and had to prove beyond a shadow of doubt that we could repay principal and interest.

I know that this is a stock forum and that many of you rely on your bank stocks for income but it's a shame that the banks didn't think of you as their shareholders and us as their clients before lending so indiscriminately to a rogue outfit such as storm.


----------



## Harleyquin (13 October 2009)

It will be interesting to see the truth being exposed during this inquiry.  EC and JC did look after themselves first.  I cannot imagine anyone who cared about their clients paying themselves two million in bonuses while everyone else goes down the gurgler.

Even when his website was up and running for five minutes earlier in the year someone asked him the question about how he felt now that his clients were so badly affected and his answer sickened me to the teeth.  'I've lost more money than anyone'...well what this man needs to realise is that he's the big financial planner who chose to take the risks and we were the ones seeking a risk free investment, I think there maybe a little difference there.  There is no way this man or his wife left their money in the market they made sure they were ok first even as the market dropped.  

His advisors may not have all been registered but they were all financially savvy enough to see what was happening to the market and I bet they took their investments out at the right time and left ours in ....that was their income.  They were supposedly under orders from the head honcho to make sure that our investments were not cashed in.

When our investments were cashed in they were at their lowest possible price and our LVR's were allowed to go well beyond the 100% before a margin call, unheard of unless someone wanted it to happen that way.  Who would have been in the know enough to buy millions of shares flooding the market ...perhaps someone who had cashed in their own shares before they dropped and knew what would happen to ours perhaps.....


----------



## clayton4115 (13 October 2009)

you have to also remember that the more the bank lent the more they meet their target

the mortgage brokers make money too on "hidden commissions" i.e if you were to take out a mortgage loan for $300,000 the mortgage broker would receive $1800 for selling this loan to you. (its roughly 0.60%) of the loan amount.

Only difference between a financial planner and a mortgage broker is that we have to disclose all fees and commissions while the mortgage broker doesn't.

So as you can see the more they lent to ppl the more they get in commissions.


----------



## Harleyquin (13 October 2009)

Seems it all comes down to monetary greed doesn't it, for the so called planners, for the banks, for everyone involved in this sorry mess, except the people who wanted genuine financial advice...


----------



## clayton4115 (13 October 2009)

yes thats unfortunately the way you can look at it,

there will always be cowboys in the industry no matter what they do, ASIC now wants to move to fee for service advice,

i charge my clients a fee for service, its a lot more transparent and i can give impartial advice, not flog some investment product cause it gives me more commissions.

i dont work for any bank and so i can offer a range of investments not something only from xyz bank, i work through a small licensee as i am basically a one man band and i prefer to keep it that way, id rather have 50 good quality clients then 8000 clients who wont get any service or "advice".


commissions is a dirty word.


----------



## Harleyquin (13 October 2009)

Good to know there are some genuine people in the industry just wish we'd found a genuine one instead of the storm.  I met a lovely financial planner today who like you said much the same thing.  We double checked with storm to make sure this was a safe risk free investment, I thought people could go to jail for selling a fraudulent product, let's hope I'm right.


----------



## clayton4115 (13 October 2009)

yea i'd love to describe here what i think of EC but i better refrain from it.

these lowlife scum shouldn't share the same air we breathe.


----------



## Garpal Gumnut (13 October 2009)

Harleyquin said:


> Seems it all comes down to monetary greed doesn't it, for the so called planners, for the banks, for everyone involved in this sorry mess, except the people who wanted genuine financial advice...






clayton4115 said:


> yea i'd love to describe here what i think of EC but i better refrain from it.
> 
> these lowlife scum shouldn't share the same air we breathe.




Just hang in there , the end is in sight. Scattini and the lawyers have done a good deal with CBA and I expect BOQ to come to the party.

Don't wait however for the Cassimatises to get their "just deserts" as described above.

Through a number of factors, mostly lack of street smarts and blind allegiance to a failed model,  SICAG have set a scenario for them to get off with very little penalty, possibly a suspended sentence or a few months in a low security facility.

My reasons for saying this are.

1. SICAG is based in Redcliffe or the Sunshine Coast with the fewest investors affected, rather than in Townsville where the most information about the scam is available, and the most victims live.

2. The Committee is tainted by the presence of a former Storm executive and a former Storm Advisers relative. This is a conflict of interest and has governance implications.

3. SICAG consistently state that members have connections with the Cassimatises but that this in no way affects their decisions or web page. Why then have no adverse public appearance by Julie or Manny in inquiries and court not been reported by SICAG. 

4. The SICAG website consistently advises victims to avoid advisers who charge by the hour "unlike Storm". The charge by the hour model is the preferred model of interaction between client and adviser, promoted by all experts in the area.

gg


----------



## Judd (13 October 2009)

Harleyquin said:


> Have just been to a seminar with a financial planner and the first two things he said to the audience was
> 
> ''As a financial planner
> 
> ...




More than likely Storm didn't.  Probably all buried in the 100 pages called the Statement of Advice.  Bet you it ticked every single compliance box invented.  Trouble is there is a world of difference between ticking the compliance boxes and holding certain ethical values.



Harleyquin said:


> Why did the FPA approve of storms advice and maintain them as members of their association until it was too late, why couldn't they see storms advice for what it was long before this occurred.




Probably did not and does not have the legal authority to approve anything associated with any financial planner or their business model.  People seem to think that these industry bodies approve this or that if someone is a member of that body.  Got nothing to do with it I'm afraid.  The FPA and all other industry representative bodies are just a PR front - a bit like unions claiming to represent workers interests.



Harleyquin said:


> If storm was well known in financial planning circles for it's aggressive advice why wasn't something done about it long before the inevitable occurred.




When all was going swimmingly well for Storm clients, if other financial planning firms shouted out that it should be shut down, the screams of protest from Storm clients in Townsville would have been heard in Hobart.  In any case, ever been slapped with a writ for defamation or slander?  What do you think EC & JC would have done if other planning firms came out in public with strident critisism of the Storm ethics on the upfront fee and/or its business model?



Harleyquin said:


> For those on this forum who think that we are only blaming the banks that is definitely not the case.  As we are becoming more educated in the financial planning process it is obviously clear to everyone just how culpable this so called financial planning company was in the whole debacle.




Sadly, sometimes it requires a lot of hurt to be inflicted before the "Ah Ha!" moment occurs.  Equally sadly, it is my feeling that quite a number of families and individuals maybe hurt so badly that they will not recover. 



Harleyquin said:


> I look forward to the day when each and every one of this company's owners and advisors are convicted for the fraudulent activity that they have conducted and the lives that they have destroyed with their lies and greed.




Let the courts decide on this.  Individually we all have our own views on how justice should be served but I prefer the court system as it is all that stands between us and anarchy.



Harleyquin said:


> I don't see us as being greedy we only wanted to make our money work for us so that we could retire in comfort without having to rely on the old age pension and needed the help of a financial planner to do that.




All wishes and attempts to improve one's lot involves some element of greed otherwise you would just stay as you are.  However, apart from a very few, I don't consider the vast majority of Storm clients were or are greedy in the usually accepted meaning of that word.



Harleyquin said:


> Again I would like to ask the question
> 
> 'Why and how could they continue to operate as financial planners when to all intents and purposes everyone in the know knew that they weren't?'




See response above.



Harleyquin said:


> 'Why did all of the banks involved with them so willing to lend them the obscene amounts of money that they did?'
> 
> We have only needed to borrow money once from a bank and we were well scrutinised and had to prove beyond a shadow of doubt that we could repay principal and interest.
> 
> I know that this is a stock forum and that many of you rely on your bank stocks for income but it's a shame that the banks didn't think of you as their shareholders and us as their clients before lending so indiscriminately to a rogue outfit such as storm.




While I understand and appreciate your position it is an emotive one.  The sole purpose of the banks is to assist with the flow of money to those who apply for it and make a profit by charging interest.  They do not exist to to make moral judgments but maybe that will change.  Storm was a business and for quite sometime a profitable one.  As was Babcock & Brown, ABC Learning Centres, Centro and a host of other business big and small which have gone or almost gone belly up.  So why wouldn't banks lend to the corporate or business Storm as they do to any other corporation provided it is legal?


----------



## Solly (13 October 2009)

gg, looks like we'll have to leave it to Harry......


----------



## Garpal Gumnut (13 October 2009)

Solly said:


> gg, looks like we'll have to leave it to Harry......




lol mate.

*Harry Gibbs and the Storm Stoned.*

Might make a good book or movie.

Its heading for the cuffs and no tie, no belt walk.

gg


----------



## Garpal Gumnut (13 October 2009)

darkside said:


> GG,
> 
> 
> I am thinking the Stamford, lovely "digs", outstanding view, and just a short stroll via the lovely Brisbane RiverWalk" to the courts , where we can chat with the "silks" on our way !!!




Speak to Solly about the Stamford. 

I stayed there when it first opened and again about a year ago.

It had gone from a gran tourismo, to tourismo.

The carpets on the grand stairs were frayed and I felt uncomfortable in the presence of Japs, Canucks, and Yanks on the grand tour.

Not that I've got anything against the forenamed. But ****, they do drag a lot of luggage into the lifts.

I will bow to the opinion of all.

Latest update is August 2011 for the Harry's, so we need to book soon to get the best rates for a floor.

I'd still go for the Marriott.

Lennons looks tired and the Indian taxi drivers can't find it unless you say Shuffley.

gg


----------



## Solly (13 October 2009)

Garpal Gumnut said:


> Speak to Solly about the Stamford.
> 
> I stayed there when it first opened and again about a year ago.
> 
> ...




gg, I don't mind the Stamford but the lure of the Port Office across the road may be a bit too much of a temptation and cause a distraction, wouldn't want to miss any of the proceedings. 

I hear the Sofitel is also pretty swish since the refurb, it's just a short stroll down Turbot to Harry's place.

I'm still open to suggestions.


----------



## Julia (13 October 2009)

Harleyquin said:


> I met a lovely financial planner today who like you said much the same thing.  .



"A lovely financial planner"?   What made him 'lovely' Harleyquin?
You are obviously in an (understandably) emotional state.  I'd honestly hope that you would stay away from any financial planners (thought you were broke, actually) until you are in a more stable frame of mind and more able to make an objective evaluation of what anyone is offering.
I would imagine that at the moment, anyone who says the right words, and has a sympathetic attitude would seem pretty much 100% to you.

Sorry if this sounds unsympathetic, even unkind, but I can see the very real possibility of you being taken for a sucker all over again.





Judd said:


> Probably did not and does not have the legal authority to approve anything associated with any financial planner or their business model.  People seem to think that these industry bodies approve this or that if someone is a member of that body.  Got nothing to do with it I'm afraid.  The FPA and all other industry representative bodies are just a PR front - a bit like unions claiming to represent workers interests.



Exactly.   Harleyquin, I think you have quite the wrong idea about the usefulness of this so called professional body.  It is not their role to vet what is being offered to clients.



> When all was going swimmingly well for Storm clients, if other financial planning firms shouted out that it should be shut down, the screams of protest from Storm clients in Townsville would have been heard in Hobart.  In any case, ever been slapped with a writ for defamation or slander?  What do you think EC & JC would have done if other planning firms came out in public with strident critisism of the Storm ethics on the upfront fee and/or its business model?



Spot on, again, Judd.  None of the Storm clients were complaining about the business model while they were making money.



> Let the courts decide on this.  Individually we all have our own views on how justice should be served but I prefer the court system as it is all that stands between us and anarchy.



Yes.  And there are enough separate enquiries going on for the truth to eventually be made clear.  Must be a hellishly difficult waiting time for Stormers, though.



> While I understand and appreciate your position it is an emotive one.  The sole purpose of the banks is to assist with the flow of money to those who apply for it and make a profit by charging interest.  They do not exist to to make moral judgments but maybe that will change.  Storm was a business and for quite sometime a profitable one.  As was Babcock & Brown, ABC Learning Centres, Centro and a host of other business big and small which have gone or almost gone belly up.  So why wouldn't banks lend to the corporate or business Storm as they do to any other corporation provided it is legal?



Again, completely true.

Harleyquin, we understand how upset you are, but business is business and - unless specifically employed for that purpose, e.g. giving advice via their own inhouse financial advisers - banks do not fill the role of financial planners.
That was Storm's responsibility.


----------



## Julia (13 October 2009)

Harleyquin said:


> We double checked with storm to make sure this was a safe risk free investment,



In all logic, if you were borrowing against your home, and then taking a margin loan against that borrowing, how could it possibly be a 'safe risk free investment'!!


----------



## GumbyLearner (13 October 2009)

Julia said:


> In all logic, if you were borrowing against your home, and then taking a margin loan against that borrowing, how could it possibly be a 'safe risk free investment'!!




Too right Julia!
Yeah that sounds nuts. I give you my home, you give me the promise of more! 
But still the predatory forces of deceit do need investigation. The average punter has no idea.


----------



## Solly (14 October 2009)

*"Storm boss asked for extra funds"*

"STORM Financial boss Emmanuel Cassimatis instructed one of his senior managers to increase the size of a proposed dividend payout as the teetering firm contemplated liquidation, a court has heard."

More by Daniel Hurst in The Age;

http://www.theage.com.au/business/storm-boss-asked-for-extra-funds-20091013-gvop.html


----------



## Solly (14 October 2009)

*"Storm boss cash grab despite tax debt"*

"STORM Financial co-founder Emmanuel Cassimatis bumped up by half a million dollars the dividend paid to he and his wife from the beleaguered company's accounts, all the while knowing Storm owed the tax office $11 million."

More by Sarah Elks in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,26206236-2702,00.html


----------



## Solly (14 October 2009)

*"Storm duo's $2m dividend"*

"Directors of the failed advisory firm Storm Financial requested their dividend payment be increased from $1.5 million to $2 million despite dismissing staff and non-executive directors and delaying bill payments to protect the company's cash flow."

Read more by Michelle Singer in The Australian Financial Review of 14 October 2009.


----------



## Solly (14 October 2009)

*"$2M Storm `instruction' "*

"FORMER Storm Financial joint chief financial officer Lauren Davies yesterday used the*`Nuremberg defence'* when asked about a why she arranged for a $2 million dividend transfer she arranged from the insolvent company Storm Financial into the founders' private account.

Ms Davies said she was just following 'instructions'."

More in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/10/14/86421_news.html


----------



## Solly (14 October 2009)

*"Storm boss offered client $50k compensation: court"*

"A former Storm Financial client has recounted how the company's managing director Emmanuel Cassimatis offered to pay her $50,000 to make up for her eroded superannuation savings."

More by Daniel Hurst on brisbanetimes.com.au;

http://www.brisbanetimes.com.au/business/storm-boss-offered-client-50k-compensation-court-20091013-gvna.html


----------



## Solly (14 October 2009)

Garpal Gumnut said:


> lol mate.
> 
> *Harry Gibbs and the Storm Stoned.*
> 
> ...




gg, a movie or mini series would sure be interesting, something to boost the ratings of the free-to-airers and it might even pry the iGeneration away from their pods and torrents. I'm losing interest in reality cooking shows and soap celebrities pirouetting on screen as well. I can't believe how popular Underbelly is. 

I've got a mate who wrote a screenplay once, may be he can help. It was a story about a young wizard and his friends but he set it in _Burp'n gary_, I think that's what sank it. He never heard back from Ivan Reichman.

I wonder which actors or young hopefuls could play the leading protagonists. ?

Any suggestions ?


----------



## Harleyquin (14 October 2009)

The Financial Planning Association may only be a union body for financial planners and obviously don't carry any real weight, however you do expect them to accept financial planners only as members.  They would have been well aware of storms model and whether or not they had the qualifications to be financial planners.

The 'lovely financial planner' who I met yesterday was a guest speaker for an hour duration at a superannuation seminar.  I didn't go looking for his services Julia as you're right I have no money and therefore will not be seeking his services on a professional level.  He also had a lot of negative words re storms model so yes that makes him very 'lovely' in my opinion!!!

We all know the stock market goes up and down and we're all happy when it goes up and obviously not so happy when it comes down.  Storms strategy was to take advantage of these 'ups' and 'downs' to 'grow' their clients investments.  This was the one aspect that they considered their strength.  I don't have a problem with the ups and downs I have a problem with the fact that our LVR was allowed to blow out of all proportion.  Others had margin calls when their LVR's reached an appropriate level.  This was the one aspect that destroyed our investments and we need to find out exactly why and how.

I know that it's the banks 'job' to lend money to businesses such as storm, however, the bank also has an obligation to lend responsibily to individuals seeking a loan.  I know this because we've had a home mortgage from the bank and were put through the third degree and could only borrow x amount of dollars.  When storm applied for a loan on our behalf there were no restrictions to the amount of money borrowed.  What changed?  

Our wages, when we applied for a home loan years ago, were relatively high.  When storm applied for a loan, our wages were extremely low.  Does that add up?  I would have thought that all banks have a 'responsibility' to shareholders and clients alike to lend responsibily, after all it's their money.  I would be interested to hear your thoughts on this...

Where we concerned having a mortgage on own home and a debt?  Of course we were but we were also paying a financial planner and therefore a team of financial 'experts' to look after our investment in the long term.  We didn't go into this in the short term as the experts all tell us that this is a long term strategy and investment.  I was reading a financial report today and this strategy is still being employed by financial planners, however, storm took it to the extreme for their own selfish reasons it would appear.  If this strategy is still 'acceptable' in financial planning circles we need to know what fraudulent activity took place between the partners in crime in this scenario, namely the banks and the financial planning company, as it's no secret they were working together.

Margin loans may be a useful tool if you have the money and know how to use them well.  Storm over geared using margin loans for retirees on the old age pension and the banks involved approved these loans.  I don't call that responsible lending.  Storm should never have done it and the banks should never have worked with them to lend these obscene amounts of debt.


----------



## lasty (14 October 2009)

"Storm over geared using margin loans for retirees on the old age pension and the banks involved approved these loans."

You dont know what has been fed to the banks...
Its highly unlikely that a bank would lend a retiree money who is on an old age pension..They need to show how to service the debt and I dont think a fortnightly pension would cut it..

On top of that the client would need to have completed a risk tolerance test.
Giving that they are pensioners they would probably fail.


----------



## Smiley (14 October 2009)

"It's highly unlikely that a bank would lend a retiree money who is on an old age pension."
Well they did - read the submissions to the parliamentary inquiry - have seen the loan applications myself - these aged pensioners were listed as having incomes of $100,000 and bankers have admitted at inquiry they took that amount as not being their pension but proposed earnings from investments through storm.
It all stinks . . . .


----------



## Harleyquin (14 October 2009)

That's right Lasty I don't know what was fed to the banks.  

I do know and have paperwork to prove what we had written down regarding our income / expenditure and the low level of risk that we were prepared to take, and the comments made by our local storm advisor.  

I know what is on some of the banks paperwork and the two don't relate at all.  

What we need to find out is where the information 'changed.'  It is possible /  highly likely that this was a storm headquarters decision.  Nothing has been proved here that I'm aware of.  I'm not 'blaming' the banks but I want to know what their involvement was as without their complicity none of this could have occurred could it?

There are retirees only on the old age pension who were given hundreds of thousands of dollars in loans.  Their 'earnings' have been over-inflated and the bank may not be responsible for this information, but are they responsible to checking to make sure it's true?  or do they just accept what a financial planner has told them?  I don't know how this has occurred and we're all hoping the inquiry will throw some light on this.

Julia I do have my moments when I am anything but strong emotionally and I also have my moments when I am so angry and feel extremely strong so it's a bit of an emotional roller coaster ride really.  I know I'm still at the crawling stage but have little choice but to go on and succeed or go under and it would be so easy to go under.  I try desperately to cope and to look forward and this is my way of coping is to try and understand what happened here.

We made a huge huge mistake.  We went to a registered financial planner who had an excellent sales pitch and they 'convinced' us that this was the way for us to invest for our future.  Result utter financial destruction.  I know that we were not savvy investors that's why we did it.  Our biggest mistake was trusting them to do the right thing by us.  Do others trust their financial advisors?

What have I learnt from this?  -
Do your own research - educate yourself financially / learn how to invest yourself and don't use a financial planner.  
Don't trust anyone else with your money - nobody cares for it as much as you do.  
Don't borrow money for investment purposes / in the stock market / unless you can afford to lose it and/or pay it back. 
Don't mortgage your property.  Don't put all your eggs in one basket.  I knew this one prior to going to storm but they had an excellent sales pitch and we realised very early in the peace that we should never have allowed ourselves to be conned into this one.
Other financial planners don't and can't 'put all your eggs into one basket'.  Why and how were storm able to recommend this as a wonderful financial strategy and to implement it for all of their clients?

I'd like some genuine answers that's all I want and to date I haven't got them.  Everyone has their opinions but no one knows for sure.  That's why this inquiry is so very important and so far storm and the banks are both smelling more than a bit 'off'.  I'm questioning everyone's 'code of conduct' who are involved in this human tragedy.


----------



## Judd (14 October 2009)

Harleyquin said:


> That's right Lasty I don't know what was fed to the banks.
> 
> I do know and have paperwork to prove what we had written down regarding our income / expenditure and the low level of risk that we were prepared to take, and the comments made by our local storm advisor.
> 
> ...




Harleyquin,

I recognise that you are in a fragile state both emotionally and financially but Gad! from what you have written above, while you may not realise it, you have taken HUGH strides.:star:


----------



## Harleyquin (14 October 2009)

I realise from reading through the posts that I perhaps need to correct myself on one point ,not that's its a major concern but I have said somewhere that we didn't borrow for a home, we did borrow for our first home. 

If the information which came out at yesterday's hearing is anything to go by there will no doubt be more of the same today.  All a bit grubby really isn't it.   So who is surprised?  There is a lot more information to come out and its not going to look good for storm or the banks.


----------



## DocK (14 October 2009)

Harleyquin,

Slightly off topic, but thought I'd share one of my methods of coping with "the fallout".  

I tend to be an "emotional eater" and find I often reach for the chocolate/pizza/pastries/wine etc when feeling depressed, stressed or just plain sorry for myself.  Not surprisingly, my waistline has bloomed as my wealth has dwindled - to the point where I now find it increasingly difficult to squeeze myself into my clothes - but can't afford to buy new ones!  

I've also found a bit more free time in the day now that there isn't quite as much bad news to discover each morning, most of the paperwork to banks/solicitors etc is done etc and have reluctantly come to the conclusion that there is sadly no alternative open to me but to exercise.  Not my favourite thing. 

It makes you feel better.  The experts will tell you about endorphins etc, and it's true.  I find once I make myself make the effort, I really do feel much better.  When you're walking in the early morning with the sun on your face, the birds chirping away madly, some music in your ears etc, it's easier to remember that being broke needn't be the end of the world, and you still have something to be grateful for - even if it's only the fact that you're still upright and breathing.  

My pants are still too tight, but I plan to haul out my son's old punching bag and tape a photo of a certain couple from up north on it - no telling how skinny I'll wind up before I'm sick of belting it!!


----------



## Judd (14 October 2009)

So now I understand.  It has to be right even though it turned out wrong - or something like that.

http://www.news.com.au/couriermail/story/0,23739,26209237-952,00.html




> *Couple lost everything on 'right advice' from Storm Financial*
> Article from: The Courier-Mail
> 
> Anthony Marx
> ...


----------



## DocK (14 October 2009)

At any storm "education seminar" it was always emphasised that investing in property was always a poor choice and many charts were displayed to "prove" the superiority of shares vs property as an investment choice.  Property was viewed as a "lazy asset" that had to be made to work by borrowing against it to invest in - you guessed it - a storm index fund.

I guess it's hard to collect a trailing commission on a property investment.... 

This is another reason I'd welcome a change to the way financial planners are paid - there's no incentive for them to recommend property investment, no matter how appropriate it may be for the client, whilst they are paid via commissions.  If a flat fee were charged it would make no difference to the adviser where the funds were invested, and think this would lead to much less biased "advice".

Just my


----------



## ahonner (14 October 2009)

Solly said:


> Thanks Smiley, this site is "pure gold". Although I do notice that it is badged with a Wilkinson Media link and that there is a notation on the "Forum" - "Ask as a Question" link that states, "Please note: we reserve the right to select the questions that will be published to the website."
> 
> The mission statement on the home page is admirable, about "finding justice for all".
> 
> ...




can anyone actually tell me what the Storm Missions Staement is?


----------



## specialed (14 October 2009)

Garpel you Stated...

_Don't wait however for the Cassimatises to get their "just deserts" as described above.

Through a number of factors, mostly lack of street smarts and blind allegiance to a failed model,  SICAG have set a scenario for them to get off with very little penalty, possibly a suspended sentence or a few months in a low security facility._

Exactly how is SICAG setting up a scenario for "them" to get off lightly ? I understand your problem with SICAG as you have articulated this a lot. But please explain how SICAG is going to influence the findings of a Senate inquiry, an ASIC inquiry and the Worrells Inquiry in such way that any penalties against the Cassimatises are minimised. I failI to see how the points you listed after the above quote can have any influence on penalties when they are handed out. It is absurd to suggest that this group is attempting to reduce any penalty against the Cassimatises. How and Why exactly would they do this ? 

SICAG is "based in Redcliffe or the Sunshine Coast" because this is where the founders live. Whether you live in Redcliffe, Townsville , Sydney or wherever you are still able to participate with the Group.  Hence their visits to Rocky, Cairns, Townsville, Mackay etc.  It is a shame that in your contributions to this forum  Garpel,  which are often very insightful and provide interesting analysis usually also contain a "shot" at SICAG which appears to be included for no other reason than to be a malicious attempt to discredit what they are attempting to do to support those who have chosen to join the group.


----------



## Harleyquin (14 October 2009)

That's right Specialed SICAG was started near Brisbane but those of us who have joined SICAG and live elsewhere can contact all of the Committee at any time by email or phone and they are amazingly patient people despite being in the same position as we all are.  The Committee are to be congratulated for their work and SICAG members are able to support each other emotionally.  We don't need the ASF for emotional support as we have all the support we need elsewhere.


----------



## Soft Dough (14 October 2009)

DocK said:


> At any storm "education seminar" it was always emphasised that investing in property was always a poor choice and many charts were displayed to "prove" the superiority of shares vs property as an investment choice.  Property was viewed as a "lazy asset" that had to be made to work by borrowing against it to invest in - you guessed it - a storm index fund.
> 
> I guess it's hard to collect a trailing commission on a property investment....
> 
> ...




Probably because it is more efficient to invest in the stockmarket than have investment properties.  Their strategy was sound, up to the point where the gearing ratios became too high and therefore too risky.

Red flags should have been ringing in peoples minds when they looked at theories such as "the dam"

I mean why would I willingly have eg

$1000000 loan at 8%
$100000 "dam" at 3.5%

instead of 

$900000 loan.
and hence a lower gearing ratio

and save $$ per year in interest.

?????

Oh that's right, storm got a trailing commission off BOTH your dam AND your margin loan, and hence in the above example are making commissions on 1.1 million instead of 900k...  I told many storm investors about ripoffs such as this, but of course they said that they were making x% and how this was their buffer.

PLUS 

Financial advisors should be able to charge what they like, it is the people who should make the decision to invest.  Storm charged massive upfront fees for pathetically simple "advice" ( you have $x borrow $y and invest in an index fund ) and people were prepared to pay for it.

This is almost the same as people who pay full fee realestate agent ripoff commissions when they could get flat fee service.


----------



## TOBAB (14 October 2009)

Harleyquin said:


> That's right Specialed SICAG was started near Brisbane but those of us who have joined SICAG and live elsewhere can contact all of the Committee at any time by email or phone and they are amazingly patient people despite being in the same position as we all are.  The Committee are to be congratulated for their work and SICAG members are able to support each other emotionally.  We don't need the ASF for emotional support as we have all the support we need elsewhere.




I'm a bystander in all this and find the "Storm Model" incredibly dangerous. Banks are ar***oles. They will screw you at any opportunity. Never trust them, most are fools. 

I just had a quick look at the SICAG website and at a glance it only blames the banks - it does not mention EC and JC at all. Please advise if I am missing something. Banks you have to expect to be ruthless and after your dough (I mean they are just money lenders after all) whereas your PERSONAL financial adviser is meant to LOOK after your money. Protect you from yourself and the vultures.

Good luck getting anything from them but personally I am not surprised by their behaviour. I think anyone who has had dealings with Banks (other than a home loan) knows what I'm talking about.


----------



## darkside (14 October 2009)

TOBAB said:


> I'm a bystander in all this and find the "Storm Model" incredibly dangerous. Banks are ar***oles. They will screw you at any opportunity. Never trust them, most are fools.
> 
> I just had a quick look at the SICAG website and at a glance it only blames the banks - it does not mention EC and JC at all. Please advise if I am missing something. Banks you have to expect to be ruthless and after your dough (I mean they are just money lenders after all) whereas your PERSONAL financial adviser is meant to LOOK after your money. Protect you from yourself and the vultures.
> 
> Good luck getting anything from them but personally I am not surprised by their behaviour. I think anyone who has had dealings with Banks (other than a home loan) knows what I'm talking about.





Tobab

Indeed you are correct, and not only do SICAG not mention EC and JC, they actually endorse the "storm" MO

_Before you commit to anything, ask about fees!
Remember, the Storm Fees model charged nothing for discussions until something was actually done.  Most of the financial planning industry charge fees for each appointment regardless of outcome!"_

To get your head around it ,most of the financial planning industry are not in court over gross neglegence or missapropriation of funds either, so i would be happier with a company that didn't gamble my house and leverage me to the hilt, but charged for _genuine _financial advice.

And before Max and all the SICAG followers berate me and send me evil PMs again, pick one part of my post that isn't factual , then post it ,then you can send me evil PMs. !!!!!


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## Harleyquin (14 October 2009)

Everyone has a different opinion on what is and what isn't good financial advice and the same can certainly be said for all members of SICAG.  There are many who support the Storm model just as there are many who do not, it just depends on your age and circumstances.  What does it matter is some members of SICAG endorse the storm model, I think the point is that it was not suitable for every client and this is what occurred.  We have written evidence where we have asked for a risk free investment and obviously the storm model does not meet our criteria and yet we had no idea that it was so dangerous at the time, we do know now however.  

One of the biggest 'mistakes' that storm financial made was to mortgage the homes of their clients, many of whom had asked for a less risky investment option, thus putting them at risk and at the same time telling them that their homes would be safe.  In fact it now appears that there was no such thing as a low risk investment and yet we had to fill out paperwork so that they knew what level of risk and reward we were prepared to accept.  OK if your an educated punter then you know more about the risks than those who aren't.

The storm model did not endorse high risk / high return investments they endorsed their own index funds which tracked the whole market.  They only promised 'average market returns,' and this is why there are some investors who liked this type of investment.  From a young persons point of view it often worked well as they had no assets at risk and they started small and their risk was not so great.  

As I understand it the whole thing collapsed when the market was not being monitored correctly, in fact, there is growing evidence that the CGI monitoring system was on the blink for a month over the critical period September - October 2008.  This allowed clients LVR's to rise blow out of all proportion and placed many clients in negative equity.  

I have been looking into our paperwork and I'm no expert at reading 'financial or legal speak' but there appears that we should have been notified by the bank when we were in margin call.  Twelve months after the event we are still waiting for that call from the bank they have never notified us that we were in margin call.

Most Aussie banks subscribe to the ABA code of conduct and this states quite clearly where the banks responsibilities lie.  There is also an increasing body of evidence to suggest that many of the banks had adopted lax / poor banking industry standards when dealing with storm financial.

It may not mention EC and JC by name on the SICAG website but I'm sure that it mentions Storm Financial and that they will look at whether poor financial advice was given as well as the banks involvement.  

In the US they have called this type of lending sub prime lending and it's what got the world into this crisis in the first place.


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## Soft Dough (14 October 2009)

Harleyquin said:


> Everyone has a different opinion on what is and what isn't good financial advice and the same can certainly be said for all members of SICAG.  There are many who support the Storm model just as there are many who do not, it just depends on your age and circumstances.  What does it matter is some members of SICAG endorse the storm model, I think the point is that it was not suitable for every client and this is what occurred.  We have written evidence where we have asked for a risk free investment and obviously the storm model does not meet our criteria and yet we had no idea that it was so dangerous at the time, we do know now however.
> 
> One of the biggest 'mistakes' that storm financial made was to mortgage the homes of their clients, many of whom had asked for a less risky investment option, thus putting them at risk and at the same time telling them that their homes would be safe.  In fact it now appears that there was no such thing as a low risk investment and yet we had to fill out paperwork so that they knew what level of risk and reward we were prepared to accept.  OK if your an educated punter then you know more about the risks than those who aren't.
> 
> ...




FWIW I think the storm model was ok, but required less gearing, and to eg limit that gearing for retirees and increase it for young people etc.

Storm DID NOT only aim for market returns, they aimed to outperform, otherwise there would be no gearing required.  They clearly stated this in their "education" seminars.

The banks may not have been giving 100% accurate information, but come on people, anyone who believes that EC et al were stupid enough to not know that these people were margin loan forget 2 things

1. They were index funds - it is easy to have a ballpark assessment

2. EC tried to negotiate with the banks to go easy on his clients - ie he admitted he knew they were doomed ( at that point of time ).

I am no sophisticated investor, yet was querying this with Storm investors around the time of the stockmarket turmoil.  Why was EC not doing the same - because he knew Storm would go broke faster if he sold people out at an appropriate time.


----------



## Julia (14 October 2009)

DocK said:


> Harleyquin,
> 
> It makes you feel better.  The experts will tell you about endorphins etc, and it's true.  I find once I make myself make the effort, I really do feel much better.  When you're walking in the early morning with the sun on your face, the birds chirping away madly, some music in your ears etc, it's easier to remember that being broke needn't be the end of the world, and you still have something to be grateful for - even if it's only the fact that you're still upright and breathing.
> 
> My pants are still too tight, but I plan to haul out my son's old punching bag and tape a photo of a certain couple from up north on it - no telling how skinny I'll wind up before I'm sick of belting it!!



Good for you, DocK.  There have been several studies demonstrating that exercise can be more helpful than medication in counteracting depression.
Here is a link to just one of these trials:
http://www.pponline.co.uk/encyc/0898.htm
There is more evidence out there for anyone who is interested.
I've personally used sustained aerobic exercise as an antidote to anxiety to great effect for many years.
Keep it up and all the best.




DocK said:


> At any storm "education seminar" it was always emphasised that investing in property was always a poor choice



Any such blanket generalisation would immediately alert me to something being amiss.  I'm sure many of us have made considerable money out of property.  



> I guess it's hard to collect a trailing commission on a property investment....



Yep, exactly.





Harleyquin said:


> As I understand it the whole thing collapsed when the market was not being monitored correctly, in fact, there is growing evidence that the CGI monitoring system was on the blink for a month over the critical period September - October 2008.  This allowed clients LVR's to rise blow out of all proportion and placed many clients in negative equity.



Can't just blame CGI.  As has already been pointed out, there were several items on the news every single day about the pending financial crisis.



> I have been looking into our paperwork and I'm no expert at reading 'financial or legal speak' but there appears that we should have been notified by the bank when we were in margin call.  Twelve months after the event we are still waiting for that call from the bank they have never notified us that we were in margin call.



We've been over this many times, and various Stormers have said that they delegated Storm to be their contact point with the bank, or alternatively Storm told the clients they would look after any margin calls.  If that were the case, as we have also repeated many times, then there would have been in place an arrangement between the bank and Storm, not the bank and the client.



> In the US they have called this type of lending sub prime lending and it's what got the world into this crisis in the first place.



I don't think what happened here is the same as the US subprime model at all.  That was more designed to get people who had not previously owned any property into their first homes.  There is no evidence of that happening with Storm.  On the contrary, Stormers all appeared to have fully paid off homes.


----------



## Solly (15 October 2009)

*"Walkouts prove we didn't break law: Storm"*

"A Storm Financial director who resigned as the company contemplated its collapse late last year has denied the failed advisory firm pressured clients to follow investment strategies not tailored to their personal needs."

More by Daniel Hurst on brisbanetimes.com.au here;

http://www.brisbanetimes.com.au/business/walkouts-prove-we-didnt-break-law-storm-20091014-gwo5.html


----------



## Solly (15 October 2009)

*NSW man sues BoQ over Storm Financial*

"A 59-year-old man who lost his home due to the collapse of Storm Financial has filed the first NSW lawsuit against the Bank of Queensland alleging bad lending practices."

More by David Barbeler from AAP on brisbanetimes.com.au;

http://news.brisbanetimes.com.au/breaking-news-national/nsw-man-sues-boq-over-storm-financial-20091014-gwvn.html


----------



## Solly (15 October 2009)

*"In-house advice backed shares"*

"Storm Financial advisers urged clients to invest in the sharemarket rather than property or cash as the company's in-house research showed it was the more reliable market in which to place money."

Read more by Michelle Singer in The Australian Financial Review of October 15 2009


----------



## Solly (15 October 2009)

*"Double trouble brewing for BoQ"*

"Bank of Queensland could be facing a coalition of disgruntled owner-managers and Storm Financial clients seeking compensation for losses because of representations made to employees or products sold to customers."

Read more by Duncan Hughes in The Australian Financial Review of October 15 2009.


----------



## Solly (15 October 2009)

*"Storm adviser didn't care, argues barrister"*

"LAWYERS for the Storm Financial liquidators have accused one of the company's former advisers of not caring if the investment advice he provided to a retiring couple was based on inaccurate information.

The Brisbane adviser, Stuart Drummond, became involved in a heated exchange with the Worrells barrister Craig Wilkins ........"

More by Daniel Hurst in the SMH Business Day here;

http://www.smh.com.au/business/storm-adviser-didnt-care-argues-barrister-20091014-gxhc.html


----------



## Solly (15 October 2009)

*"Fines 'unlikely' to help Storm investors"*

"A corporate law academic believes former Storm Financial investors are unlikely to benefit from any criminal action against the Townsville-based company's founders.

Under the Corporations Act, trading while insolvent can be prosecuted as a criminal matter and attract substantial fines and prison sentences."

More from Murray Cornish on the ABC here;

http://www.abc.net.au/news/stories/2009/10/14/2713494.htm


----------



## Solly (15 October 2009)

*"Storm chief who okayed $2m payment  'didn't know' firm was on the rocks"*

More from Anthony Marx on couriermail.com.au here;

http://www.news.com.au/couriermail /story/0,20797,26213773-3202,00


----------



## Solly (15 October 2009)

*"Storm founders 'honest and ethical' "*

More by Daniel Hurst on brisbanetimes.com.au here;

http://www.brisbanetimes.com.au/business/storm-founders-honest-and-ethical-2


----------



## TOBAB (15 October 2009)

Solly said:


> *"Storm founders 'honest and ethical' "*
> 
> More by Daniel Hurst on brisbanetimes.com.au here;
> 
> http://www.brisbanetimes.com.au/business/storm-founders-honest-and-ethical-2




Ha. More front than Myers!


----------



## Ironhalo (15 October 2009)

So despite a Masters in Finance she doesn't know what the word 'insolvency' means?

This is almost too funny.


----------



## darkside (15 October 2009)

Ironhalo said:


> So despite a Masters in Finance she doesn't know what the word 'insolvency' means?
> 
> This is almost too funny.




Ironhalo!,

Your a hard marker, she may have been away the day they taught insolvencey and it's ramifications at uni.


----------



## Garpal Gumnut (15 October 2009)

TOBAB said:


> Ha. More front than Myers!






Ironhalo said:


> So despite a Masters in Finance she doesn't know what the word 'insolvency' means?
> 
> This is almost too funny.






darkside said:


> Ironhalo!,
> 
> Your a hard marker, she may have been away the day they taught insolvencey and it's ramifications at uni.






> Ms Collette, who holds a Masters degree in Applied Finance




I have not laughed so much since I saw the second Mrs Gumnut's mother, my ex mother-in-law, fingered on Border Security for trying to take a suitcase full of Hungarian salami in to this green and pleasant land.

It proves beyond a doubt that the Financial Planning industry should be abolished and that Financial planning should be taught from Y1 in Primary school, through to Y12 in High School.

Ms.Collette may hold a Masters , but its in something else which I'd prefer not to put in print, it pertains to the male eater of grass of the species bovus and the end product of same.

gg


----------



## cuttlefish (15 October 2009)

darkside said:


> Ironhalo!,
> 
> Your a hard marker, she may have been away the day they taught insolvencey and it's ramifications at uni.




She obviously skipped the day they taught about directors obligations as well.

Appointed as a director and signs off on a $2 million dividend payment on the day she was appointed ... to her sister.  Were these people really so ignorant and amateurish that they could possibly have thought they could get away with this?  Its a joke, they must have been suffering from some kind of delusions or living in a fantasy world (they probably still are).


----------



## Garpal Gumnut (15 October 2009)

What I'd like to know is where the SICAG Model stands now with all this drivelling effluent pouring over the governance at Storm headquarters.

sicag.info has taken down their disclaimer about the Cassimatis clan, but still have their money spider distracting people from information.

And they still advocate a "no fee model such as Storm"

Its time that sicag explained to aussiestocksforum, which is where most Storm victims get independent advice, where they stand on the recent court proceedings.

gg


----------



## specialed (15 October 2009)

Garpal Gumnut said:


> What I'd like to know is where the SICAG Model stands now with all this drivelling effluent pouring over the governance at Storm headquarters.
> 
> sicag.info has taken down their disclaimer about the Cassimatis clan, but still have their money spider distracting people from information.
> 
> ...




Garpel you previously stated...

_Don't wait however for the Cassimatises to get their "just deserts" as described above.

Through a number of factors, mostly lack of street smarts and blind allegiance to a failed model, SICAG have set a scenario for them to get off with very little penalty, possibly a suspended sentence or a few months in a low security facility._

Exactly how is SICAG setting up a scenario for "them" to get off lightly ? I understand your problem with SICAG as you have articulated this well and consistently. But please explain how SICAG is going to influence the findings of a Senate inquiry, an ASIC inquiry and the Worrells Inquiry in such way that any penalties against the Cassimatises are minimised. I fail to see how the four points you listed after the above quote can have any influence on penalties when they are handed out. It is absurd to suggest that this group is attempting to reduce any penalty against the Cassimatises. How and Why exactly would they do this ? 

SICAG is "based in Redcliffe or the Sunshine Coast" because this is where the founders live. Whether you live in Redcliffe, Townsville , Sydney or wherever you are still able to participate with the Group. Hence their visits to Rocky, Cairns, Townsville, Mackay etc. 

It is a shame that in your contributions to this forum Garpel, which are often very insightful and provide interesting analysis usually also contain a "shot" at SICAG which appears to be included for no other reason than to be a malicious attempt to discredit what they are attempting to do to support those who have chosen to join the group.

My understanding is that SICAG answers to its members, many of whom are in daily, if not weekly contact with the committee members. NOT to you or to ASF. I have yet to see you make any such ridiculous "explanation" demands of the banks, or for that matter Manny. Why dont you also demand that Ralph Norris logs on and answers your questions...Please....

As for this being the place where most storm victims get their independent advice, I suspect, but do stand to be corrected, that the number of SICAG members far outways the contibutors to this forum.  Maybe its time you identified exactly why you continue to attack this group, for which no one has made you join nor has anyone else been forced to join. If you dont believe in what SICAG is doing, it simple you dont become a member. If your friends or relatives dont believe in what its doing, simple they dont become members. Unfortunately your continued attacks on SICAG are beginning to appear as nothing more than vindictive. If your not happy with what SICAG are doing, then just dont join them. Its a pity you could not put this much energy into investigating the legalities of the banks and storm rather than chasing a volunteer group, serving to support it members of which I assume you are not one. Man get over it...


----------



## Solly (15 October 2009)

Solly said:


> gg, I don't mind the Stamford but the lure of the Port Office across the road may be a bit too much of a temptation and cause a distraction, wouldn't want to miss any of the proceedings.
> 
> I hear the Sofitel is also pretty swish since the refurb, it's just a short stroll down Turbot to Harry's place.
> 
> I'm still open to suggestions.




gg, the Trollydollies were around BNE yesterday and after getting a bit bored with the examination, they went for a recce and sent me these pics.

The Sofitel does look good, I really don't mind the view over ANZAC Square, it's a potent reminder of the sacrifices that have been made by the brave of the past.

If budget is problem for some, the Palace Backpackers is a fine choice, I hear the Downunder Bar gets a bit wild and you may need a basic understanding of Swedish.

But then again The Y is very handy, The Hotel George Williams is a solid 3.5 star and just around the corner from Harry's. I believe you may even get a couple of cocktails there now.

Just throwing up a few suggestions


----------



## TOBAB (15 October 2009)

specialed said:


> Garpel you previously stated...
> 
> _Don't wait however for the Cassimatises to get their "just deserts" as described above.
> 
> ...




Please advise where you state on your website the awful advice and the laughable responses from the Cassimatises?


----------



## Garpal Gumnut (15 October 2009)

Solly said:


> gg, the Trollydollies were around BNE yesterday and after getting a bit bored with the examination, they went for a recce and sent me these pics.
> 
> The Sofitel does look good, I really don't mind the view over ANZAC Square, it's a potent reminder of the sacrifices that have been made by the brave of the past.
> 
> ...




Mate I've stayed in the Palace, when it was known as the "People Palace" and I'd stay there again if they didn't speak Swedish and banned the mad, the bad and the sad. I do find Swedish girls a bit broad about the ......

It was a great place to stay.

I'd still go for the Marriott, they have a fine "posh area" where you get free breakfast, grog at night and respect", just like the old Peoples Palace but costs a bit more. But scccchhhheeezzze, whats money for but spending.

gg


----------



## specialed (15 October 2009)

TOBAB said:


> Please advise where you state on your website the awful advice and the laughable responses from the Cassimatises?




Not my website mate...am not a SICAG member...or a storm investor...as I have stated previously...Keep up.......


----------



## Garpal Gumnut (15 October 2009)

specialed said:


> Garpel you previously stated...
> 
> _Don't wait however for the Cassimatises to get their "just deserts" as described above.
> 
> ...




Mate you have been "specialed" to confound Storm victims on ASF.

Much of your individual statements make sense, but you are not an asf person.

Read through the posts and you will find that I and many others have posted adverse comments on the Banks.

Your site does little to advance the cause of Storm victims.

And this is because you are focussed on this particular scam that has destroyed the lives of thousands of people.

On ASF we take a broader view.

The past, the present, the future.

The reason we are so hard on your organisation mate, is that you have lost the plot, you may get something from the banks, but by refusing to even mention the dereliction of governance by Storm and the Cassimatises, you are condemning future investors to the same fate.

And that is not fair dinkum.

gg


----------



## darkside (15 October 2009)

specialed said:


> Garpel you previously stated...
> 
> _Don't wait however for the Cassimatises to get their "just deserts" as described above.
> 
> ...




Specialed, 

not standing up for GG, because i am more than sure he can do it on his own,
but i don't believe he attacks SICAG , but more to the point identifies the problems as well as conflict of interest that they have with their higherarcy running the show. You call it vindictive, other more open minded may call it informative.

It may be a volunteer organisation , yet they employ (yes PAY) a media adviser to come to internet forums and berate and abuse the posters, what sort of organisation would employ that tactic, and what does it achieve.

As far as the banks or Storm for that matter go, i dont think GG, or anyone here has had anything really positive to say about them either. If you still feel it's ok to endorse the Storm Model and advertise it on a support website,(SICAG) well thats just like Macdonalds , having their ads placed at the "Fat Farm", Very poor taste and no one is convinced.


----------



## Solly (15 October 2009)

ahonner said:


> can anyone actually tell me what the Storm Missions Staement is?




ahonner , I don't know what the Company's mission statement was but this link to an archive of the old website states to "expect the unexpected"....

http://web.archive.org/web/20080720070059/www.stormfinancial.com.au/ins_abo.php

If you are wondering what EC's personal publicly stated mission statement is, please refer to this post.

https://www.aussiestockforums.com/forums/showpost.php?p=493197&postcount=3667

I do not recall any public retraction or variation to this mission statement. 

I believe that EC is a man of honour and is tirelessly burning the midnight oil seeking a positive resolution for *all* those negatively affected.

I believe that he would expect nothing less of himself.


----------



## specialed (15 October 2009)

Garpal Gumnut said:


> Mate you have been "specialed" to confound Storm victims on ASF.
> 
> Much of your individual statements make sense, but you are not an asf person.
> 
> ...




Am happy to say again its not my organisation, nor my website, am not a SICAG member or Storm Victim as mentioned a long time ago when I answered your questions of me. To suggest that your attacks on SICAG are based solely on your desire to prevent "condemning future investors to the same fate" is ridiculous. You have regularly called the storm investors muppets with little financial knowledge.  You have stated that this is the place where most storm investors come for advice, in which case I am sure they will not go through the same fate again.  I have read your posts regarding the banks and as stated have found them insightful and knowledgeable, but I have yet to see you demand what the CBA put on their website, or that they appear here to answer your questions.  

Darkside, to suggest that SICAG is paying someone to attack posters on this or other forums is ridiculous and reeks of conspiracy theory. If you believe that then obviously this forum must also be littered with CBA employees doing the same… I would assume that CBA employee just a couple more media advisors than SICAG, and its not SICAG who have a clause regarding public perception built into their bonus scheme. This type of statement  is indicative of much, not all, but much of the information that has been posted by Garpel and others r.e SICAG, based more on rumour, misquotes and hearsay than fact.  You say it is not vindictive but informative, but my concern is that some of the information is far from factual and not designed to inform at all.

Amongst many others I am still yet to hear how SICAG is going to impact on possible committal hearing or sentences as suggest earlier in this forum.  

Of course I am focused on this scam, this is the Storm Financial Group thread isn’t it ?


----------



## Garpal Gumnut (15 October 2009)

Solly said:


> ahonner , I don't know what the Company's mission statement was but this link to an archive of the old website states to "expect the unexpected"....
> 
> http://web.archive.org/web/20080720070059/www.stormfinancial.com.au/ins_abo.php
> 
> ...





Thanks Solly.

As usual you hit the button.

Shame on the sicag.info site.

Storm victims, google  " Storm Solly asf" and you'll get the truth about whats happening.

Let us hope that none of the sicag people resurrect themselves as financial advisers, although I hear some may plan to have already.

the sicag model

the storm model

gg


----------



## darkside (15 October 2009)

Solly said:


> ahonner , I don't know what the Company's mission statement was but this link to an archive of the old website states to "expect the unexpected"....
> 
> http://web.archive.org/web/20080720070059/www.stormfinancial.com.au/ins_abo.php
> 
> ...





Solly , nice find , and after reading the Storm blurb, i don't know why people are complaining, your right it specifically tells them to expect the unexpected.

I bet no one expected to be in debt upto their eyeballs, and lose their house, lifestyle and most of their hope. So really , Storm did deliver what they promised.


----------



## specialed (15 October 2009)

Garpal Gumnut said:


> Mate you have been "specialed" to confound Storm victims on ASF.
> 
> Much of your individual statements make sense, but you are not an asf person.
> 
> ...




Am happy to say again its not my organisation, nor my website, am not a SICAG member or Storm Victim as mentioned a long time ago when I answered your questions of me. To suggest that your attacks on SICAG are based solely on your desire to prevent "condemning future investors to the same fate" is ridiculous. You have regularly called the storm investors muppets with little financial knowledge.  You have stated that this is the place where most storm investors come for advice, in which case I am sure they will not go through the same fate again.  I have read your posts regarding the banks and as stated have found them insightful and knowledgeable, but I have yet to see you demand what the CBA put on their website, or that they appear here to answer your questions.  

Darkside, to suggest that SICAG is paying someone to attack posters on this or other forums is ridiculous and reeks of conspiracy theory. If you believe that then obviously this forum must also be littered with CBA employees doing the same… I would assume that CBA employee just a couple more media advisors than SICAG, and its not SICAG who have a clause regarding public perception built into their bonus scheme. This type of statement  is indicative of much, not all, but much of the information that has been posted by Garpel and others r.e SICAG, based more on rumour, misquotes and hearsay than fact.  You say it is not vindictive but informative, but my concern is that some of the information is far from factual and not designed to inform at all.

Amongst many others I am still yet to hear how SICAG is going to impact on possible committal hearing or sentences of Manny as suggest earlier in this forum.  

Of course I am focused on this scam, this is the Storm Financial Group thread isn’t it ?


----------



## Solly (15 October 2009)

Garpal Gumnut said:


> Mate I've stayed in the Palace, when it was known as the "People Palace" and I'd stay there again if they didn't speak Swedish and banned the mad, the bad and the sad. I do find Swedish girls a bit broad about the ......
> 
> It was a great place to stay.
> 
> ...




Yep I'll probably check out the Marriott tomorrow or Sat , I haven't been there since I saw a presentation by one of Jon Giaanopoulos's mates on options trading a few years back. Yeah you are right, it's better to pay a little more and spread the wealth around, after all you can't take it with you. And my Swedish is very limited and it wouldn't be a very professional look stumbling over backpackers at the Palace.


----------



## darkside (15 October 2009)

specialed said:


> Am happy to say again its not my organisation, nor my website, am not a SICAG member or Storm Victim as mentioned a long time ago when I answered your questions of me. To suggest that your attacks on SICAG are based solely on your desire to prevent "condemning future investors to the same fate" is ridiculous. You have regularly called the storm investors muppets with little financial knowledge.  You have stated that this is the place where most storm investors come for advice, in which case I am sure they will not go through the same fate again.  I have read your posts regarding the banks and as stated have found them insightful and knowledgeable, but I have yet to see you demand what the CBA put on their website, or that they appear here to answer your questions.
> 
> Darkside, to suggest that SICAG is paying someone to attack posters on this or other forums is ridiculous and reeks of conspiracy theory. If you believe that then obviously this forum must also be littered with CBA employees doing the same… I would assume that CBA employee just a couple more media advisors than SICAG, and its not SICAG who have a clause regarding public perception built into their bonus scheme. This type of statement  is indicative of much, not all, but much of the information that has been posted by Garpel and others r.e SICAG, based more on rumour, misquotes and hearsay than fact.  You say it is not vindictive but informative, but my concern is that some of the information is far from factual and not designed to inform at all.
> 
> ...





Specialed , once again it's great to see you have put in no research to your post , a bit like no one seeing the GFC coming even though it was on TV every night for months leading up to it.

Now i will write this very slowly for you,  You claim SICAG are a volunteer organisation yet someone who used to come here often and abuse us,claims he was a paid  consultant, ,(So whos Lying) I hope all the SICAG members know where their hard earned is going and to what !!!!!



Big Max said:


> Hey Darkside, when you're proven to be wrong, it's polite to apologise and important that you correct the record. I'll say it again . . . not only am I not a former Storm employee, I am not a former Storm client! I am a paid consultant to SICAG. Do the right thing.:nono::nono::nono:




He actually took up nearly a whole page abusing all and sundry, i think it was drug induced but cant say for sure, although we havent heard from him for a while, so maybe he isn't allowed internet privileges yet ???

So no , i am not into conspiricy theorys, although i did hear a whisper there maybe a melt down in the world economies coming but keep it to yourself, i don't want the media getting hold of it again then no one will know !!!!


----------



## darkside (15 October 2009)

Sorry Specialed. 

I just re read my post and realised that was un called for , you did explain to me a few pages back why you just make up things as you go , as opposed to researching them or even checking some facts and i do apologise for not taking that into consideration in my last post.



specialed said:


> As for checking my facts, I am merely continuing the tradition of this great forum. As I have pointed out on numerous occasions this forum is littered with comments that are based little on fact, but instead on rumour, hearsay or innuendo. In particular the attempts to “badmouth” and discredit the work or motives of SICAG.




Hope all is forgiven .

Darkside. !!


----------



## Solly (15 October 2009)

*"Battered Storm investors torn"*

"The Commonwealth Bank won praise from investors when it announced a compensation scheme for clients of the collapsed firm Storm Financial. 

But the process has barely begun and already it's drawing criticism from those it's meant to be helping.

Storm clients say that rather than compensation the bank is offering merely petty cash and sympathy.

Annie Guest reports."....

Listen to the World Today on the ABC 

http://www.abc.net.au/worldtoday/content/2009/s2715008.htm


----------



## Harleyquin (15 October 2009)

Just paid a visit to the old storm website that you put up Solly.  It says to 'expect the unexpected'  why the hell didn't we all read this first before going to storm ... we  expected a bit more than the unexpected.  

As for a 'storm' meaning 'a new beginning to a parched land', sounds more like it might be 'something that comes along with a lot of wind and hot air and blows us all away.'


----------



## Solly (16 October 2009)

*"Bank of Queensland banking on becoming one of big boys"*

"BoQ is facing legal actions over its role in the collapse of Storm Financial. Its Townsville branch was a major lender to Storm clients.

Mr Liddy said he did not think the furore had damaged the reputation of the bank, pointing to its recent capital raising, which he said was five times oversubscribed. But he expressed concern for those customers caught up in the fiasco."

As reported by James McCullough in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26215478-3122,00.html


----------



## specialed (16 October 2009)

I am familiar with the ramblings of Big Max, and no where did I see him state that his postings to this forum were as part of his paid duties to SICAG as has been suggested.I will of course re-read every post of his to check my facts

 I note with interest that there have been postings by Financial advisors to this forum. Am I to assume that their postings are also part of their paid employment. Would someone like to tell me any of the legal implications this. Actually I'll just refer you to the ASIC Notice below, point 4. To suggest that someone who is employed by an agent is not able to participate in this forum is a little rich.Or to say that when they are contributing to this forum, they are doing it as part of their day job is also a stretch. .....And as for abusing all and sundry, he is certainly not the only participant here abusing people or attempting to defend others. All us "muppets" are guilty of that.....

And yes, any SICAG members who are concerned about the money, Im sure will or have sought clarrification. I suppose thats the point of many of my posts. If your a member of SICAG and have concerns that surely you would raise them. It is clear that much of the misinformation stated hear regarding SICAG is stated for no other purpose then malicious intent, rather then any attempt to enhance debate around the STORM issue, or as stated, to prevent this happening to others again.....


----------



## maccka (16 October 2009)

todarellor said:


> Colonial (CBA) should have raised the alarm bells with so much leverage being allocated but then again greed is above all a dominant human trait. Its a pity that the poor investor continues to be duped by high commission salesman!




Going back through past threads it is interesting to see this quote from 18 Dec...

This goes back pre-SICAG and right at almost the "BIG BANG" day when it really exploded into the consciousness of people who weren't caught up in it.

cheers
Maccka


----------



## Big Max (16 October 2009)

specialed said:


> I am familiar with the ramblings of Big Max, and no where did I see him state that his postings to this forum were as part of his paid duties to SICAG as has been suggested.I will of course re-read every post of his to check my facts
> 
> I note with interest that there have been postings by Financial advisors to this forum. Am I to assume that their postings are also part of their paid employment. Would someone like to tell me any of the legal implications this. Actually I'll just refer you to the ASIC Notice below, point 4. To suggest that someone who is employed by an agent is not able to participate in this forum is a little rich.Or to say that when they are contributing to this forum, they are doing it as part of their day job is also a stretch. .....And as for abusing all and sundry, he is certainly not the only participant here abusing people or attempting to defend others. All us "muppets" are guilty of that.....
> 
> And yes, any SICAG members who are concerned about the money, Im sure will or have sought clarrification. I suppose thats the point of many of my posts. If your a member of SICAG and have concerns that surely you would raise them. It is clear that much of the misinformation stated hear regarding SICAG is stated for no other purpose then malicious intent, rather then any attempt to enhance debate around the STORM issue, or as stated, to prevent this happening to others again.....




Thanks for the support Specialed. I note you got an apology from Darkside - I'm still waiting for mine! You're right, the constant berating of SICAG by GG et al is bemusing and not a little concerning. Methinks they doth protest too much (apols go Shakespeare). Be warned, Specialed, it can be quite tiring visiting ASF and reading the same old chestnuts recycled over and over again. One can understand the frustration of those who have lost everything thanks to the Greeks bearing gifts but some posters are very creative with their version of the facts. It's worth a visit though to read GG's colourful posts - love the one about his second ma-in-law getting zapped by customs!


----------



## maccka (16 October 2009)

*Re: Storm Financial Group Class Action*



sqwark7600 said:


> This type of financial advisory failure appears on a regular basis and is usually successful at attracting people immersed in their career, family and life. Usually they neither have the time, expertise nor in many cases the will to follow the disciplines of investment. They rely in sanguine naivety on the presentation of the cohort of advisory types in the community for guidance and then as a backup believe that the government with their sophisticated financial regulatory infrastructure will come to their aid when the bubble bursts.
> Sadly that is not true; what does occur is immense pressure on the individual’s career and family to the extent that break-up, job loss, chronic depression and even suicide results. The initial reaction is disbelief and turmoil. What to do? It is a sad picture but may I say that in this situation you are not alone.
> Having been through such a firestorm may I offer you the following simple response that worked for our group some years ago resulting in cash investments recovered and directors jailed.
> 
> ...




Another interesting post from late 2008/early 2009.  I wonder if this was the group formed after the foreign loans scandals of the 80's when banks were involved in another attempt to ride roughshod over individual investors and then try to cover up their dirty laundry(letters).  

It only takes a few letters to get loose before someone can follow the stench back to the source.

Glad this time around we have a strong group of people prepared to stand up, tell their stories and constantly niggle/nag at the people responsible (when they have the evidence to do so - evidence can be found in all sorts of places and is constantly coming forward).  There has been a much faster response this time and because the new action group has been able to stand on the shoulders of other brave and resilient groups we have learnt their lessons and used them to get faster results.  

Cheers
Maccka


----------



## maccka (16 October 2009)

Solly said:


> Julia,
> 
> No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.
> 
> ...




Some good advice for life worth repeating from someone everyone on this thread respects.  

Thanks Solly.

Cheers
Maccka


----------



## maccka (16 October 2009)

17th January 2009  Garpel Gumnut responding to Jifromoz 



Garpal Gumnut said:


> ...
> 
> It is a classic remake of many other financial disasters.
> 
> ...




Isn't that what people are doing here?  The "culpable with the* biggest pockets*" (with money in them - not stretched empty saggy ones) who are at this point proven to be so are a certain bank in some cases.  And in my opinion it is likely that they are soon to be followed by other banks.

cheers
Maccka


----------



## Pindibog (16 October 2009)

maccka said:


> Some good advice for life worth repeating from someone everyone on this thread respects.
> 
> Thanks Solly.
> 
> ...




Thanks Macca. I have been reading this site since Dec. 08 and probably read both the posts. It is good to get a refresher!!!


----------



## SJG1974 (16 October 2009)

Solly said:


> ahonner , I don't know what the Company's mission statement was but this link to an archive of the old website states to "expect the unexpected"....
> 
> http://web.archive.org/web/20080720070059/www.stormfinancial.com.au/ins_abo.php
> 
> ...




Thanks for the links Solly.  It is almost eerie looking through the old Storm Website and reading the spiel given what has transpired recently. Statements such as this:

"Analysis of the market by our exceptional research team provides the essential information we require every day to ensure that our service and our commitment to clients is of the highest calibre. 

Our processes are transparent and we are accountable to all clients as we regularly monitor, measure and manage their portfolios." 

http://web.archive.org/web/20080718233926/www.stormfinancial.com.au/ins_main.php

really highlight to me how much passing the buck is going on from those in charge at Storm who claim it is all CGI and the banks' fault.  Anyone who has a television or the interent would have known what was going on with the Australian sharemarket, yet it is "fuzzy data" from CGI which is at fault along with the "black swan event" that was already 12 months old by the time Storm went t1ts up.

Advisers who were too busy worrying about where their next commission was coming from rather than worrying about the wellbeing of their clients.

I hope they rot.


----------



## darkside (16 October 2009)

specialed said:


> I am familiar with the ramblings of Big Max, and no where did I see him state that his postings to this forum were as part of his paid duties to SICAG as has been suggested.I will of course re-read every post of his to check my facts
> 
> I note with interest that there have been postings by Financial advisors to this forum. Am I to assume that their postings are also part of their paid employment. Would someone like to tell me any of the legal implications this. Actually I'll just refer you to the ASIC Notice below, point 4. To suggest that someone who is employed by an agent is not able to participate in this forum is a little rich.Or to say that when they are contributing to this forum, they are doing it as part of their day job is also a stretch. .....And as for abusing all and sundry, he is certainly not the only participant here abusing people or attempting to defend others. All us "muppets" are guilty of that.....
> 
> And yes, any SICAG members who are concerned about the money, Im sure will or have sought clarrification. I suppose thats the point of many of my posts. If your a member of SICAG and have concerns that surely you would raise them. It is clear that much of the misinformation stated hear regarding SICAG is stated for no other purpose then malicious intent, rather then any attempt to enhance debate around the STORM issue, or as stated, to prevent this happening to others again.....




Specialed

Please re read my post , mainly the quoted part from big max,

Originally Posted by Big Max  
Hey Darkside, when you're proven to be wrong, it's polite to apologise and important that you correct the record. I'll say it again . . . not only am I not a former Storm employee, I am not a former Storm client! I am a paid consultant to SICAG. Do the right thing.


----------



## darkside (16 October 2009)

The apology was sarcastic .What happened to sarcasm


----------



## chrisgee (16 October 2009)

ive been away working hard trying to keep everything together-again theres a hell of alot to get my head around-thanks everybody for all the posts esapecially those who are going through some rough times i know what its like- mr gg i know you sound angry sometimes but i really like the way you add the stark reality to whats going on-you really make me think about it all-yes people have been screwed over really big time-i really really hope that some justice is going to be done-i wish i was at the court to see it all in person but i cant if i dont work i dont eat-thanks again to everbody for all your help


----------



## bunyip (16 October 2009)

SJG1974 said:


> Thanks for the links Solly.  It is almost eerie looking through the old Storm Website and reading the spiel given what has transpired recently. Statements such as this:
> 
> "Analysis of the market by our exceptional research team provides the essential information we require every day to ensure that our service and our commitment to clients is of the highest calibre.
> 
> ...




Here's another gem from the Storm website....

_The Storm processes and systems are tried and true. The outstanding results achieved over 30 years demonstrate a proven formula, consistently applied, based on a rock solid foundation_

Hmmm....those rock solid, tried and true Storm processes really did produce 'outstanding results' for clients in the end, didn't they!

I think I'd just about want to murder those bastards if they'd diddled me!


----------



## bunyip (16 October 2009)

And here's another cracker from the Storm website.....

_Storm clients never quite know what we'll get 
up to next, and the truth is, neither do we! _

How accurate did that one turn out to be!


----------



## Harleyquin (16 October 2009)

What proof does Big Max have that he is a paid employee of SICAG.  It's a volunteer group set up to help and support victims.  We've all paid a small fee to cover essential costs however there wouldn't be enough money in the kitty to pay wages to anyone so it's my guess that somebody called BM is having you on.  I don't care what he says on the ASF until I see proof of his ''wages'' I don't believe him.

I cannot understand anyone saying SICAG should 'go after' anyone it was never their role to 'go after' anyone.  That's the role of ASIC and the parliamentary inquiry.  SICAG as a group can work to try and negotiate an outcome for victims which is something that would be very difficult for hundreds of individuals to do and the Committee irrespective if they approve of or disapprove of the storm model, are no doubt committed to working on all victims behalfs to try and talk to / negotiate with legal and other experts involved in this case, and then report back to all members.

So far the SICAG Committee have done an amazing job.  Where else do victims of fraud go in need of help.  Victims of storm haven't just lost money they have lost everything they owned and many still have a debt , they have been left with nothing.  Generations of work and savings gone on the advice of a financial planner and backed by the major banks it appears.


----------



## Big Max (16 October 2009)

darkside said:


> The apology was sarcastic .What happened to sarcasm




I'll accept a sarcastic apology - it's better than nothing.


----------



## darkside (16 October 2009)

Harleyquin said:


> What proof does Big Max have that he is a paid employee of SICAG.  It's a volunteer group set up to help and support victims.  We've all paid a small fee to cover essential costs however there wouldn't be enough money in the kitty to pay wages to anyone so it's my guess that somebody called BM is having you on.  I don't care what he says on the ASF until I see proof of his ''wages'' I don't believe him.
> 
> I cannot understand anyone saying SICAG should 'go after' anyone it was never their role to 'go after' anyone.  That's the role of ASIC and the parliamentary inquiry.  SICAG as a group can work to try and negotiate an outcome for victims which is something that would be very difficult for hundreds of individuals to do and the Committee irrespective if they approve of or disapprove of the storm model, are no doubt committed to working on all victims behalfs to try and talk to / negotiate with legal and other experts involved in this case, and then report back to all members.
> 
> So far the SICAG Committee have done an amazing job.  Where else do victims of fraud go in need of help.  Victims of storm haven't just lost money they have lost everything they owned and many still have a debt , they have been left with nothing.  Generations of work and savings gone on the advice of a financial planner and backed by the major banks it appears.





Harleyquin.

I tend to agree with you, even Specialed has confirmed  _the ramblings of Big Max_ and i do believe that no organisation that touts itself as volunteer and there to help victims would condone or ever tolerate someone masquerading as a paid consultant  come on a Forum and abuse anyone who dares question their motive.

As a rule members question motives and morals as a way of protecting others or confirming authenticity. If GG had started this forum a few months earlier we may have saved a lot more from being "stormified"


----------



## darkside (16 October 2009)

Big Max said:


> I'll accept a sarcastic apology - it's better than nothing.




Max.  

It will come when you apologise to the rest of ASF for your evening of either alcohol or drug induced abuse !!!!!!!!


----------



## darkside (16 October 2009)

bunyip said:


> And here's another cracker from the Storm website.....
> 
> _Storm clients never quite know what we'll get
> up to next, and the truth is, neither do we! _
> ...




HAHA, how true is that, see , at the end of the day , they delivered what they promised. !!!


----------



## Garpal Gumnut (16 October 2009)

gg

Got the bugger.

The one on the sicag site is a stand in.

gg


----------



## darkside (16 October 2009)

GG,

We can only hope that is going to become your new Avatar.

You have to let it loose on "twitter"


----------



## Garpal Gumnut (16 October 2009)

darkside said:


> GG,
> 
> We can only hope that is going to become your new Avatar.
> 
> You have to let it loose on "twitter"




Is it a moneyspider or an ant?

gg


----------



## darkside (16 October 2009)

Garpal Gumnut said:


> Is it a moneyspider or an ant?
> 
> gg




Don't be silly and get us into your sick little games , you know exactly what it is.

Arachnid-Moolah Spondoolies ,commonly known as the money spider


----------



## Mindstorm (16 October 2009)

It's an ant gg, we are all busy little ants!

Many of us have been busy finding the information that will prove that we were 'done over' by Storm, our 'advisers', the banks, whoever!

I have to admit that I have had a good few laughs, considering the awful position that I have put my family in, reading again and again, you call the SICAG site 'money spider central'.

Not too sure of this, but I'm sure that if I am wrong, that you, gg, will be the best person to put me right.  Spiders 'stalk' their prey.  Ants just 'run around madly' looking for anything they can prey on.

I have to say too, that if it were not for the six guys who are the SICAG committee then we storm clients would just have 'disappeared' way back in January of this year.

Think of them what you will, but without those six men, and their dedication to help themselves whilst helping others, we 'clients' would not be in the place that we find ourselves now.

Please note that I have put that they were first helping themselves.  I've done this, not because I think that they put themselves before the rest of us, or me, (because I have personally experienced them putting me before themselves), but more to diffuse any derogatory comment that you might feel that you have to make against these men.

You are obviously a very clever man gg.  I, on the other hand, am and have been a very stupid one.

Stupid or not?  I have never tried to gain 'kudos' or 'points' by deriding another person, their beliefs, or their actions.







Garpal Gumnut said:


> Is it a moneyspider or an ant?
> 
> gg


----------



## Garpal Gumnut (16 October 2009)

darkside said:


> Don't be silly and get us into your sick little games , you know exactly what it is.
> 
> Arachnid-Moolah Spondoolies ,commonly known as the money spider




OK mate, its a moneyspider.

gg


----------



## Harleyquin (16 October 2009)

GG why didn't you start this thread twelve months earlier and saved all our lives.  We can blame you for this can we!!???  

and it looks more like an ant than a spider...and a busy little ant he is too....and doing a great job.


----------



## Garpal Gumnut (16 October 2009)

Harleyquin said:


> GG why didn't you start this thread twelve months earlier and saved all our lives.  We can blame you for this can we!!???
> 
> and it looks more like an ant than a spider...and a busy little ant he is too....and doing a great job.




lol mate.

And I do agree with you, but the great job being done has an elephant in the room, or should I call it a mannyphant in the room.

And more muppets will fall for similar scams in the future, I guarantee. 

Your site is derelict in 

1. Supporting the Storm model
2. In not reporting adverse reporting of the Cassimatises testimony recently.

And because of this you have through your understandable need to extract recompense from big pockets, ignored the children and grandchildren of the muppets, who will follow another Storm and another Manny, like the Pied Piper of Hamelin.  

gg


----------



## specialed (16 October 2009)

Why is it that you two continue to avoid answering my questions, instead choosing the easy option of attacking SICAG. GG, you stated SICAG are influencing the way in which punishments will be handed out to Manny...can you please elaborate.... And what of Financial advisors contributing to this forum...are they doing it in a paid or unpaid capacity i.e  as you feel Big Max was ?  If you are prepared to make these statements please justify


----------



## Julia (16 October 2009)

darkside said:


> The apology was sarcastic .What happened to sarcasm



Perhaps, like much on the anonymous internet, it went the way of honesty.

So easy, isn't it, Darkside, to misrepresent who and what we are, and in so doing, take advantage of genuine people.  

Imo it's a pretty pathetic, attention seeking individual who feels the need to stoop to such a level.

Such a person, however, should understand that many ASF members are now aware of his opportunistic behaviour.


----------



## Solly (16 October 2009)

gg,

The new Kurilpa Bridge was opened by the Premier on Sunday 4th October 2009. It's just outside Harry's place. It might be good to have a bit of a jog or brisk walk before proceedings or during recesses to clear and focus the mind. I reckon there will be a lot to absorb and consider. What do you think ?


----------



## maccka (16 October 2009)

Garpal Gumnut said:


> OK mate, its a moneyspider.
> 
> gg




Even the average four year old knows that spiders have 8 legs while ants have six.  Before you feel the need to say it the two appendages on the ant's head are obviously antennae.

The explanation for the ant and its significance to the MEMBERS of the group has been given many times on this forum.

GG - stop stirring please. 

Cheers
Maccka


----------



## Garpal Gumnut (16 October 2009)

specialed said:


> Why is it that you two continue to avoid answering my questions, instead choosing the easy option of attacking SICAG. GG, you stated SICAG are influencing the way in which punishments will be handed out to Manny...can you please elaborate.... And what of Financial advisors contributing to this forum...are they doing it in a paid or unpaid capacity i.e  as you feel Big Max was ?  If you are prepared to make these statements please justify






Garpal Gumnut said:


> lol mate.
> 
> And I do agree with you, but the great job being done has an elephant in the room, or should I call it a mannyphant in the room.
> 
> ...






Julia said:


> Perhaps, like much on the anonymous internet, it went the way of honesty.
> 
> So easy, isn't it, Darkside, to misrepresent who and what we are, and in so doing, take advantage of genuine people.
> 
> ...




Read the posts mate.

Read the posts.

All 3925 0f them from when I became concerned about Storm , 2 months before it went **** up.

Then post mate.

Where ignorance is bliss tis folly to be wise.

gg


----------



## specialed (16 October 2009)

darkside said:


> Specialed
> 
> Please re read my post , mainly the quoted part from big max,
> 
> ...




….and where in this quote does he say his contributions to this forum are on behalf of, or as an employee of SICAG...All I read is someone attempting to correct yet another one of the inaccuracies placed on this forum for nothing other than malicious intent…I wait for the next chapter in conspiracy 911...the half truths placed hear are priceless. Like all conspiracies, they don’t bear scrutiny, the authors will attack those who question their so-called facts rather then offer proof of their claims….and in time those making the ridiculous claims get seen for what they are, and their true motives are revealed. In the meantime we all get a good laugh out of the conspiracy theory…


----------



## Solly (16 October 2009)

maccka said:


> Even the average four year old knows that spiders have 8 legs while ants have six.  Before you feel the need to say it the two appendages on the ant's head are obviously antennae.
> 
> The explanation for the ant and its significance to the MEMBERS of the group has been given many times on this forum.
> 
> ...




Hey Maccka 

Here's one for gg, but I'm sure he wont use it .....:


----------



## specialed (16 October 2009)

Garpal Gumnut said:


> Just hang in there , the end is in sight. Scattini and the lawyers have done a good deal with CBA and I expect BOQ to come to the party.
> 
> Don't wait however for the Cassimatises to get their "just deserts" as described above.
> 
> ...




I wonder what I will see first....an answer by GG as to how SICAG have set a scenario for the Cassimatises to get off lightly as proclaimed OR Manny in Jail....I think unfortunately I may be waiting a LONG time for either...


----------



## Garpal Gumnut (16 October 2009)

specialed said:


> ….and where in this quote does he say his contributions to this forum are on behalf of, or as an employee of SICAG...All I read is someone attempting to correct yet another one of the inaccuracies placed on this forum for nothing other than malicious intent…I wait for the next chapter in conspiracy 911...the half truths placed hear are priceless. Like all conspiracies, they don’t bear scrutiny, the authors will attack those who question their so-called facts rather then offer proof of their claims….and in time those making the ridiculous claims get seen for what they are, and their true motives are revealed. In the meantime we all get a good laugh out of the conspiracy theory…




specialed , you are stirring darkside and being picky. The name specialed signifies your intent IMO , you have benn specialed to annoy genuine posters who are trying to find a way through this for Storm victims.

If you feel so strongly why don't you post on sicag, and leave genuine posters like darkside alone.

gg


----------



## Soft Dough (16 October 2009)

Mindstorm said:


> Not too sure of this, but I'm sure that if I am wrong, that you, gg, will be the best person to put me right.  Spiders 'stalk' their prey.  Ants just 'run around madly' looking for anything they can prey on.




I think they are ants, and are being used in a context fitting to SICAG's approach :

Ants will also attack my legs if my children jump on the nest next to me, doesn't mean that they are going after the little tyrants who were actually responsible for the damage.



Mindstorm said:


> I have to say too, that if it were not for the six guys who are the SICAG committee then we storm clients would just have 'disappeared' way back in January of this year.




The lawyers smelt the $100 bills from a thousand miles away, they were always going to "come to the rescue"

SICAG, although probably of benefit, have not been necessary to the cause.


----------



## Harleyquin (16 October 2009)

GG why is it necessary for the SICAG site to criticise the storm model or to berate the Cassimatis'.    

The storm model and the Cassimatis' are being dealt with in the courts.

The SICAG site was set up to help storm clients to help each other and once again - it's working brilliantly.


----------



## Mindstorm (16 October 2009)

Soft Dough said:


> The lawyers smelt the $100 bills from a thousand miles away, they were always going to "come to the rescue"




Apologies in advance if I am misreading your statement, but do you mean 'smelt' as in "use a very high temperature to melt down before moulding", or 'smelled' as in the use of the nasal ability to 'smell an odour'?

It's just that I thought that $any bill, be it $5, $10, $20, $50, $100 bill would be printed rather than moulded.



Soft Dough said:


> SICAG, although probably of benefit, have not been necessary to the cause.




I have to ask here, and will probably regret it...... but no matter, in for a penny in for a pound, are you a SICAG member?  If you are, do you think that you have been 'shortchanged' by the SICAG committee in some way?

If you are not a SICAG member, what right do you believe you have to decide whether SICAG has been of any probable benefit, whether it was necessary to the cause or otherwise?

I apologise if I cause any offence, that is not my intention.


----------



## Soft Dough (17 October 2009)

Mindstorm said:


> Apologies in advance if I am misreading your statement, but do you mean 'smelt' as in "use a very high temperature to melt down before moulding", or 'smelled' as in the use of the nasal ability to 'smell an odour'?
> 
> It's just that I thought that $any bill, be it $5, $10, $20, $50, $100 bill would be printed rather than moulded.
> 
> ...




1. No I meant smelt as in olfactory, perhaps if I use it again it may help you : "the retort smelt of disregard of the english language "

2. No I am not a member of SICAG. I am not a member of many instutions, but have formed reasonable opinions of them, just as I guess you have probably done yourself.

Would you prefer me to request a moderator to edit my post to read : SICAG, although probably of no benefit, have not been necessary to the cause?   As you can see my post actually stated that I believe that SICAG has probably assisted clients, however without SICAG they still would have recieved assistance.

I hope you are not trying to suggest that without SICAG there would have been no compensation for storm victims, because that is just insulting to anyone with any understanding of how lawyers work.  

I guess SICAG is directing Slater in Gordon in all its current class actions as well as it has helped S&G in directing all previous class actions?


----------



## bunyip (17 October 2009)

Mindstorm said:


> You are obviously a very clever man gg.  I, on the other hand, am and have been a very stupid one.
> 
> Stupid or not?  I have never tried to gain 'kudos' or 'points' by deriding another person, their beliefs, or their actions.




Really?
I seem to recall that you made a rather forceful and aggressive effort to deride me in Post No. 3200 on Page 160, because I expressed my views about the foolishness of a small minority of Stormers who went to Storm despite having already accumulated substantial wealth that had set them up for life.

Not that I hold any grudge against you for that.....you were emotional and upset and probably would have lashed out at someone else if you hadn't lashed out at me.

While I'm on the subject of derision and lashing out.......I suggest you stop deriding and lashing out at yourself for the mistakes you made. There's nothing to be gained by referring to yourself as a 'pleb' or 'a very stupid man'. Your best shot at getting over this is to accept that you made an error of judgement, just like most people make errors of judgement at different times in their lives. 
Realise that although you mistakes took away your money, they didn't take away your potential.
Milk that potential for all it's worth. Be thankful that you still have twenty or so years of work left in you before retirement. Play your cards right, and you can do very well in that 20 years. You may yet get that comfortable retirement you've dreamed of.

As for GG, I think you need to put his SICAG-related remarks in perspective. 
Sure he's been critical of them for their endorsement of the Storm fees model, for the fact that they avoid laying any blame on Storm, and for the conflict of interest in having a committee with a number of ex Storm advisers, and a relative of an ex Storm adviser. Those are completely fair and reasonable criticisms in my opinion.
To be fair to Garpal, he's also acknowledged the good work that SICAG has done in bringing the CBA to the negotiating table.

Any discussion on GG's attitude towards SICAG should at least be balanced by mentioning that he's spoken for them as well as against them.


----------



## Solly (17 October 2009)

*"NSW link to Storm Financial fiasco"*

"THE Australia and New Zealand banking group disciplined a lender at its Nambour branch about two years ago after an internal investigation found the staff member was not following procedures in dealings with Storm Financial."

More by Tony Raggatt in the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/10/16/86911_news.html


----------



## Solly (17 October 2009)

*"Failed Storm owners 'naive'"*

The co-founders of failed advisory firm Storm Financial, Emmanuel and Julie Cassimatis, were considered a risk by the financial adviser's accountants because they were naive, entrepreneurial and did not listen to advice.


*"Storm owners took $2m 'dividend' as company sank"*

"Employees of the failed financial adviser have been giving damaging testimony in court."

Read more by Michelle Singer in The Australian Financial Review of October 17 2009.


----------



## Garpal Gumnut (17 October 2009)

Solly said:


> gg,
> 
> The new Kurilpa Bridge was opened by the Premier on Sunday 4th October 2009. It's just outside Harry's place. It might be good to have a bit of a jog or brisk walk before proceedings or during recesses to clear and focus the mind. I reckon there will be a lot to absorb and consider. What do you think ?




Great pics mate.
A brisk walk would be fine.
gg


----------



## Garpal Gumnut (17 October 2009)

http://www.smh.com.au/lifestyle/people/home-at-risk-over-18m-20091016-h14b.html

At least she didn't go through Manny and Julie's Storm Financial.

Getting wiped out in the GFC is more common than many folk on this thread think.

gg


----------



## Quincy (17 October 2009)

Solly said:


> *"Failed Storm owners 'naive'"*
> 
> The co-founders of failed advisory firm Storm Financial, Emmanuel and Julie Cassimatis, were considered a risk by the financial adviser's accountants because they were naive, entrepreneurial and did not listen to advice.
> 
> ...




*"Failed Storm owners 'naive'"* - page 3 and *"Storm owners took $2m 'dividend' as company sank"* - pages 26 & 27 

The following file contains these 2 (two) AFR articles (Weekend Edition 17-18 October, 2009).

View attachment AFR - 17-18 OCT 2009.pdf


----------



## specialed (17 October 2009)

bunyip said:


> Really?
> To be fair to Garpal, he's also acknowledged the good work that SICAG has done in bringing the CBA to the negotiating table.
> 
> Any discussion on GG's attitude towards SICAG should at least be balanced by mentioning that he's spoken for them as well as against them.




The fact that he and others have spoken for and against them is not in dispute, and everyone is entitled to have an opinion and to state it. What is in question is the accuracy of some, not all, but some of the so called facts used to justify the criticism. Then when the facts or statements are questioned there appears to be an unwillingness to address these concerns. Instead the questioner is attacked rather than the question....All this does is reduce the credibility of the other contributions by the same authors…and this is a shame as they obviously have a valuable contribution to make..


----------



## Solly (17 October 2009)

Garpal Gumnut said:


> http://www.smh.com.au/lifestyle/people/home-at-risk-over-18m-20091016-h14b.html
> 
> At least she didn't go through Manny and Julie's Storm Financial.
> 
> ...




Yes gg,

Look what happened at Harvard...



> Harvard University last year lost nearly $2 billion in the cash account it uses to pay for daily operations, by investing the money with its endowment fund instead of keeping it in safer, bank-like accounts.




http://www.boston.com/business/ticker/2009/10/harvards_losses.html


----------



## cuttlefish (17 October 2009)

bunyip said:


> Really?
> While I'm on the subject of derision and lashing out.......I suggest you stop deriding and lashing out at yourself for the mistakes you made. There's nothing to be gained by referring to yourself as a 'pleb' or 'a very stupid man'. Your best shot at getting over this is to accept that you made an error of judgement, just like most people make errors of judgement at different times in their lives.
> Realise that although you mistakes took away your money, they didn't take away your potential.




Good commentary bunyip.  Anyone willing to blame themselves and accept responsibility for their mistakes should also be willing to forgive themselves.  Nobody is free of faults - and the smallest slip of judgement can result in the biggest of consequences.


----------



## cuttlefish (17 October 2009)

In spite of all of the criticism, SICAG continues to endorse the Storm fees model on their website and contains ZERO commentary attacking Storm, the company that put ALL of its members in the dire situation they are currently in.  Critism of SICAG is entirely justified imo - the organisation is run by Storm sympathisers - if it is not then I challenge them to put JUST ONE derogatory comment about Storm on their web site, explaining Storms involvement in the shocking situation that their members have ended up in.

To those outside of the situation it is very obvious that something is rotten with SICAG.  The website if full of pithy quotes and evangalistic like commentary - very similar to the cr*p peddled by Storm.


----------



## specialed (18 October 2009)

cuttlefish said:


> In spite of all of the criticism, SICAG continues to endorse the Storm fees model on their website and contains ZERO commentary attacking Storm, the company that put ALL of its members in the dire situation they are currently in.  Critism of SICAG is entirely justified imo - the organisation is run by Storm sympathisers - if it is not then I challenge them to put JUST ONE derogatory comment about Storm on their web site, explaining Storms involvement in the shocking situation that their members have ended up in.
> 
> To those outside of the situation it is very obvious that something is rotten with SICAG.  The website if full of pithy quotes and evangalistic like commentary - very similar to the cr*p peddled by Storm.




I gather those who are outside of the situation , and their opinions matter little as they are not members of SICAG. Those who support what it is doing, that is the members, have a voice and are reguarly in contact with whom ever they wish within the group. I guess those who are on the outside maybe need to worry less about the groups business unless of course they choose to join and have a voice, which of course they are free to do. I'm sure it is very obvious to those within SICAG, that is its members, that there IS something rotten around, and it is those who wish to worry more about what SICAG is doing then what STORM, CGI, CBA and others have done....


----------



## Mindstorm (18 October 2009)

bunyip said:


> Really?
> I seem to recall that you made a rather forceful and aggressive effort to deride me in Post No. 3200 on Page 160, because I expressed my views about the foolishness of a small minority of Stormers who went to Storm despite having already accumulated substantial wealth that had set them up for life.
> 
> Not that I hold any grudge against you for that.....you were emotional and upset and probably would have lashed out at someone else if you hadn't lashed out at me.
> ...




Bunyip,

I apologise, to you, and anyone else who I may have upset on this forum.

I am in a very raw position.  You are right, I am lashing out.  Apologies again to anyone that I may have offended, including yourself.

I just don't see any way that I can take my family out of this mess that I have put us in.  This is not anyone's fault but my own.

MS


----------



## Harleyquin (18 October 2009)

Mindstorm lashing out is something that we all feel like doing and we have a right to feel that way.  We feel guilty that we didnt see this fiasco for what it was, a very clever scam sold by very clever salesmen who were schooled by the master himself, and it was all 'supposedly' done legally with the backing of the powers that be.  

Life isn't fair but it's still good.  Stay strong and focused and good luck.


----------



## Julia (18 October 2009)

Mindstorm said:


> Bunyip,
> 
> I apologise, to you, and anyone else who I may have upset on this forum.
> 
> ...



Mindstorm, Bunyip also pointed out that you have the potential to return to a more comfortable position.   If you can try to work towards that, a little light may appear for you.

I can't begin to understand how horrible all this must be for you, but truly, guilt is probably the most useless of all emotions, and you will only be worrying your family by allowing it to take you over.

And to say it's entirely your fault is probably a bit harsh.  The Cassimatises and their whole slick operation appear to have deluded many otherwise sensible people whose chief fault was to trust too much.

You don't know the outcome of all the enquiries and the S & G legal action, so things may turn out to be less dire than you presently think.

All the best
Julia


----------



## shibby (18 October 2009)

Mindstorm said:


> I just don't see any way that I can take my family out of this mess that I have put us in.  This is not anyone's fault but my own.
> 
> MS





That is going too far the other way, it is not entirely your fault we all made a mistake there are thousands of us who trusted Storm.  To trust isn’t a bad thing, I will just be a little more discerning next time. 
To be honest I assumed people who were in a certain position like a financial advisor were trustworthy and would look after my interests.
We trusted the untrustworthy, was that a mistake? Yes.
Will we do it again? No
But there are lot more players in this scenario than just the financial advisor and you.
Did it occur to you when you started this path that you would be sold out at 97% with your margin lender or in some cases over 100%?

Stand up and take a good look around you and check out what is happening each day. 
There is always a change,  just about every day there is one more little snippet of news, one more bank has come on board, another startling revelation who will ever forget Dawn Collette’s’ They're an ethical couple and they're an honest couple.''
It’s not over yet; wait till the end before you take all the blame. 
Who knows what is still to be revealed.
I am poor as a church mouse at the moment no money and a $462,000 mortgage
But each day I remember its not over YET.  The time factor is a killer as I am with ANZ and Macquarie and the heat is only just starting to be applied to Macquarie.
Please, please come to your senses and see the truth as it really is.
When you are having a really bad day go for that extra walk with the dogs, each day get up and move, plan a chore that must be done that day don’t allow yourself time to think go to bed exhausted each night so you can’t dwell too long.
See the local GP get some tablets, I am not a tablet person as I have all sorts of allergies, on the other hand my youngest son has had a bad time of late trying to run a business, he saw the local GP and has had great success with a tablet. 
The tablets have stopped the anxiety and he is functioning much better and thinking clearer.
There are ways around this, your mind at times can be your worse enemy, how about putting it to good rather than despair you obviously had saved enough before to make Storm interested in you, just get that brain thinking again.
None of our lives will be the same again but who is to say that it won’t be just a different sort of “good life”.
I read your posts and I love your particular sense of humour, please keep posting you have a lot to say.
We are all so different and isn’t that a plus?


----------



## Judd (18 October 2009)

Julia said:


> .......I can't begin to understand how horrible all this must be for you......




Agree with you on this, Julia.  Many of us have lost money or had things go sour but hopefully we're not in the situation where we have lost or are likely to lose every darn thing we ever worked for.  That said, I still cannot get my head around why, after pouring in money to pay off one's home, you would remortgage to place those funds, with even more borrowed money, in the sharemarket.  It is just not within my psyche to do that.  However, as has also been said previously, if those around you are doing the same thing and you're made to look like a dork if you don't go with the collective wisdom, it is a really powerful pressure to concede.



Julia said:


> And to say it's entirely your fault is probably a bit harsh.  The Cassimatises and their whole slick operation appear to have deluded many otherwise sensible people whose chief fault was to trust too much.




From what I have read it was one heck of a slick operation, headed by a man of the people, the Messiah of wealth creation.  It is amazing how personality and persuasiveness and ego can exert influence.  And it worked for 17 years.


----------



## Garpal Gumnut (18 October 2009)

cuttlefish said:


> In spite of all of the criticism, SICAG continues to endorse the Storm fees model on their website and contains ZERO commentary attacking Storm, the company that put ALL of its members in the dire situation they are currently in.  Critism of SICAG is entirely justified imo - the organisation is run by Storm sympathisers - if it is not then I challenge them to put JUST ONE derogatory comment about Storm on their web site, explaining Storms involvement in the shocking situation that their members have ended up in.
> 
> To those outside of the situation it is very obvious that something is rotten with SICAG.  The website if full of pithy quotes and evangalistic like commentary - very similar to the cr*p peddled by Storm.




To all the Storm victims, that is the nuts of why many asf members distrust SICAG.

For better or worse, SICAG's public face is on the internet, for all to see and comment.

If they can't tolerate comment about their SICAG Model and the STORM Model, then they either need to harden up, or form an intranet.

On an intranet, the public do not have to look at their evangelistic ( thanks cuttlefish ) exhortations and denial of the role of Storm and the Cassimatises in this sorry blitzrieg of good people's, hardworking Australian's, savings.

Its all evangelistic bull**** that got the Storm victims into this in the first place, and Manny would leave Jimmy Swaggart for dead in a pulpit.

gg


----------



## cuttlefish (18 October 2009)

specialed said:


> I gather those who are outside of the situation , and their opinions matter little as they are not members of SICAG. Those who support what it is doing, that is the members, have a voice and are reguarly in contact with whom ever they wish within the group. I guess those who are on the outside maybe need to worry less about the groups business unless of course they choose to join and have a voice, which of course they are free to do. I'm sure it is very obvious to those within SICAG, that is its members, that there IS something rotten around, and it is those who wish to worry more about what SICAG is doing then what STORM, CGI, CBA and others have done....




And I'm sure exactly the same type of argument would have been used if anyone was critical of the Storm group prior to its collapse.  How dare anyone question them ... if you're not part of the 'club' just stay out ... anyone can become a Storm client and share in the wealth etc. etc. etc.

The same pattern is happening with SICAG.  Nobody from SICAG has yet been able to explain why they are completely silent on Storms role in the matter and continue to endorse the Storm model.  Why is SICAG scared to be critical of Storm - there is only one logical explanation.

Storm was run like some sort of evangelistic religious group and SICAG seems to have a lot of similarities.  Protecting its members from the 'threat' of outsiders, not explaining or answering valid questions but instead using isolation tactics.

I have no vested interest one way or the other - I've never had anything to do with Storm or SICAG so I'm just providing feedback to those that are involved as to what it looks like to an independant, unbiased observer.  

It sounds like clients of Storm could have benefited from the same independant observations prior to its collapse - maybe some may have seen it for what it was and gotten out before it inevitably unravelled.


----------



## Solly (18 October 2009)

Garpal Gumnut said:


> To all the Storm victims, that is the nuts of why many asf members distrust SICAG.
> 
> For better or worse, SICAG's public face is on the internet, for all to see and comment.
> 
> ...




gg, 

I caught up with a non-SICAG Stormer yesterday, he's at a pretty low ebb at the moment. I believe he's got all his faith in the resolution process that's in place to give him back something so the family will have some meager quality of life in the future. 

He's very worried about where he is going to end up and blaming himself for allowing the family to be in this situation. He did mention to me that he always felt Storm looked after him well and can't really believe he's ended up in this state.

This made me wonder why the saga has ended up where it has now. I believe that the appalling lack of leadership from the Banking and Storm side right at the beginning of this event has been a prime causal factor in ending up where the saga is now.

It's better for those who have erred to step forward, divulge what they know, cop it on the chin and face the consequences now, those Stormers who placed their faith in these people are now living with the consequences of believing the utopia that they were upsold.

May be I'm just expecting just a little too much.


----------



## Macquack (18 October 2009)

SICAG website is using my favorite Thomas Jefferson quote:



> If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered.




SICAG has gone all socialistic.

Privatise the gains and socialise the losses.

I do feel sorry for some of the investors that got caught up in the Storm model, BUT I do not feel sorry for the investors that knowingly went along for the ride and that believe it was all the banks fault.


----------



## mellifuous (18 October 2009)

Macquack said:


> Privatise the gains and socialise the losses




Yes, as practiced by the Board of City Pacific - they split the show up real nicely. However, they described the process as  'consolidation' and 'deconsolidation':-

(1) when times were  good, then City consolidated the FMF in order that the surpluses from the FMF were directed to City's coffers  (City's idea of privitisation) - but, 

(2) when times went bad, then City deconsolidated in order to leave the losses to the investors (City's idea of socialism).

Yes, the entity controlling the switch between 'private' / 'public' will certainly determine who will win and who will lose.

I'd guess that this sort of self-interest is a common thread running though many investments managed by shrewd managers eager to put the blame (and consequences) elsewhere when the enterprises they control go pear-shaped.


----------



## Garpal Gumnut (18 October 2009)

Solly said:


> gg,
> 
> I caught up with a non-SICAG Stormer yesterday, he's at a pretty low ebb at the moment. I believe he's got all his faith in the resolution process that's in place to give him back something so the family will have some meager quality of life in the future.
> 
> ...




I'd agree totally. I have a mate who is a non SICAG follower, in actual fact he's so knackered he has lost all heart in everything. 

Certainly it would be kinder if the guilty stepped forward and bared all.

But they won't. Because they are greedy little bastards with greedy little minds, and have no real contact with ordinary people.

And I totally agree about Storm and the Banks. 

gg


----------



## Solly (18 October 2009)

Don't forget what's coming up.

*Parliamentary Joint Committee on Corporations and
Financial Services*

*Inquiry into financial products and services*
Date Wednesday, 28 October 2009
Start 5.00 pm – 9.30pm
Venue Committee Room 2S3
Address Parliament House, Canberra 2600

5.00 pm – 6.00 pm 
*Macquarie Bank Limited*
Mr Richard Sheppard, Managing
Director and CEO
Mr Peter van der Westhuyzen,
Executive Director

6.00 pm – 6.30 pm Dinner break

6.30 pm – 8.30 pm 
*Commonwealth Bank*
Mr Ralph Norris, Chief Executive Officer
Mr David Cohen, Group General Counsel
Mr Ian Narev, Group Executive,
Business & Private Banking
Mr Matthew Comyn, Executive
General Manager, Equities & Margin Lending
Dr Brendan French, General Manager Customer Relations

8.30 pm – 9.30 pm Witness(es) to be confirmed

9.30 pm Adjournment


----------



## Solly (19 October 2009)

Garpal Gumnut said:


> I'd agree totally. I have a mate who is a non SICAG follower, in actual fact he's so knackered he has lost all heart in everything.
> 
> Certainly it would be kinder if the guilty stepped forward and bared all.
> 
> ...




gg,

If it doesn't look like things are making progress with the inquiry, examinations, etc why don't we invite EC & JC down to Gloria Jeans at Cannon Hill Plaza for a friendly chat, a couple of cappuccinos and some filo pastries.

We could then get the real inside story of what actually happened and we could then post the transcripts on ASF for all to see. I could pick you up from the Airport in my Toyota Crown, pick up EC & JC and head off to the Plaza. I'm sure we could get to the bottom of what happened by the end of the second filo. It shouldn't take long and this could all be done on a day trip and no need for the inconvenience of an overnighter.

If you think this is a good idea I could drop an invite in their letter box in London Rd. 

This could be a real scoop, may be we could ask fellow forum members & Stormers if there are any questions we should pose....


----------



## Garpal Gumnut (19 October 2009)

Solly said:


> gg,
> 
> If it doesn't look like things are making progress with the inquiry, examinations, etc why don't we invite EC & JC down to Gloria Jeans at Cannon Hill Plaza for a friendly chat, a couple of cappuccinos and some filo pastries.
> 
> ...




Sounds good to me. Toyota Crown, one of the best motors the Japs ever made. Just give me some notice, as with the mines starting to ramp up again the business class seats are getting booked out about 5 days ahead.

gg

gg


----------



## Pindibog (19 October 2009)

Solly said:


> Don't forget what's coming up.
> 
> *Parliamentary Joint Committee on Corporations and
> Financial Services*
> ...




Its a joke! The individuals who were in charge and knew what was going on are not even on the list. Where is Edward Tait, John Clothier (head of ML) and Kamal Arnout (soley dedicated to Storm loans)!!!
Oh thats right they have been let go! How convenient so they replace them with people that have no knowledge and can only anwser about the procedures now and not what was happening then.
Reeks of corruption again!!
Very disappointing that it is going to be allowed to happen.


----------



## Pindibog (19 October 2009)

Garpal Gumnut said:


> Sounds good to me. Toyota Crown, one of the best motors the Japs ever made. Just give me some notice, as with the mines starting to ramp up again the business class seats are getting booked out about 5 days ahead.
> 
> gg
> 
> gg




Ah GG once again putting in suttle remarks to nuture that ego!! What was wrong with just seats are booked!!! You should have gone with first class and then everyone would think you are a real legend having that much money to waste on flight which only takes 1 1/2hrs?? Do they even do first class on domestic?? International my bet! Hey just hire out EC's jet then you can have all the room you want!! LOL


----------



## Judd (19 October 2009)

Mr Turner probably does not realise that while he may have turned off the trailing commission, the $200 pa does not go to him but remains with the fund manager.  Ah, those MER's.  How sweet they are!

That, and other reasons, is why I ditched unlisted managed funds quite a few years ago.

http://www.smh.com.au/business/end-of-the-trail-for-macquarie-fee-terminated-20091018-h2v6.html



> *End of the trail for Macquarie: fee terminated*
> STUART WASHINGTON
> October 19, 2009
> 
> ...


----------



## Solly (19 October 2009)

*"The looming post mortem
As third party inquiries and public examination s into the collapse of Storm Financial ramp up, the results from the main event will soon be known."*

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/7650.htm


----------



## Solly (19 October 2009)

*"Banks may mirror Storm resolution scheme 
SICAG remains sceptial"*

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/7643.htm


----------



## Solly (19 October 2009)

*"Storm email not unusual, says PwC"*

"PricewaterhouseCoopers insisted failed advisory firm Storm Financial pre-pay a $50,000 invoice when it discovered the extent of the company's financial troubles."

Read more by Michelle Singer in The Australian Financial Review of October 19 2009.


----------



## Solly (20 October 2009)

*"Norris called to give evidence at Storm inquiry"*

"THE chief executive of the Commonwealth Bank, Ralph Norris, will give evidence to a parliamentary committee investigating Storm Financial, it was confirmed yesterday."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/norris-called-to-give-evidence-at-storm-inquiry-20091019-h51c.html


----------



## Solly (20 October 2009)

*"BoQ approved Storm Financial loans without paperwork"*

"A BANK of Queensland branch approved home loans to Storm Financial clients even before supporting documents had been received, the Federal Court in Brisbane heard yesterday."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26232872-3122,00.html


----------



## Solly (20 October 2009)

*"It's margin lender's duty: Storm witness"*

"The woman who led Storm Financial's compliance unit with co-founder Julie Cassimatis said it was the margin lender's responsibility to inform clients of a margin call, not the financial advisory company."

Read more by Mark Ludlow and Duncan Hughes in The Australian Financial Review of October 20 2009.


----------



## Solly (20 October 2009)

Garpal Gumnut said:


> Sounds good to me. Toyota Crown, one of the best motors the Japs ever made. Just give me some notice, as with the mines starting to ramp up again the business class seats are getting booked out about 5 days ahead.
> 
> gg
> 
> gg





Yes, gg I like to 'fly' under the radar a bit sometimes, although the Arnage is definitely a damn fine motor as well. I should make it to the Hearing today and I hope there's more exciting action and revelations. Although I'll probably will miss the early bird undercover parking at the Holiday Inn and I don't like to leave the Crown parked on the street for too long. Those unpredicted dust storms make a real mess of the vinyl roof. Although there is a loading zone behind Police HQ I can get away parking in for a while, I might take your direction about paying parking fines from your other thread.

Hopefully the Inqury and the Hearing will extract enough detail and information to get to the root cause of this event. Although even just a social chat with the principals would be quite enlightening. Maybe we could skip the filos, I don't think they need the extra carbs. :


----------



## bunyip (20 October 2009)

Mindstorm said:


> Bunyip,
> 
> I apologise, to you, and anyone else who I may have upset on this forum.
> 
> ...




Mindstorm

I admire you for having the character to make a public apology.
Your apology is accepted - no hard feelings at all on my part.

Is your personal situation really as dire as you seem to think? Can you really not see any prospects for your future?
I recall that in an earlier post you spoke of the retirement you'd planned in 20 years or so. That suggests to me that you're in your forties, with a good 20 years or more left in the workforce.
20 years X 50 grand a year means you can earn 1 million dollars before retirement - more if your wife works as well, even part time. More again if you save money along the way and invest it in growth assets like residential real estate and blue chips shares.
You don't know anything about share investment? LEARN.
You don't know anything about real estate investment? LEARN.
There's lots of information available - some of it is in the form of books costing only $30 - $40, much of it is free. It's just a matter of opening your mind and putting in some effort to educate yourself.
For information about share investment, Google Stan Weinstein and Alan Hull. From these two men you can learn how to safely invest in stocks without losing your shirt. 
Unlike Storm Financial, they employ strict risk management, they trade with the trend, they trade in the strongest sectors of the market, and they don't adopt a HAH (hold and hope) attitude when a bear market sets in.
For information about real estate investment, I'm sure you'll find something of value if you Google Margaret Lomas and read some of her books.

You don't earn 50 grand a year? Then start earning it! Go back to 'school' if necessary. With two years of solid study you can become a registered nurse in Queensland. Maybe you don't want to be a nurse, but you get my drift.....if your current job or income are not satisfactory, there are various courses you can do to improve your employment and income prospects. Get your wife to work part time as well, if she's not already doing so, even if it's some ordinary job such as a domestic in a hospital or whatever. Between the two of you there should be no problem in pulling an income of 50 or 60 grand a year or higher.
Have you considered a job in the mining industry? Machine operators can earn 100 grand a year, and the rapidly expanding iron ore industry in WA will need an additional 6000 staff over the next few years. Many people with no machinery experience get trained as machine operators in the mines.
Many interstate people work in WA on a FIFO basis (fly in fly out). I beleive some of them work two weeks on and one week off, and fly home to their home state every few weeks.
I know all this because just a few days ago I spoke to a young woman who works in one of the WA mines - one of my daughters has considered going over there for a few years to set herself up financially.
Here again, maybe a mining job wouldn't suit you, or maybe you already have a good job. All I'm doing is pushing a few ideas your way to get you to see the possibilities. 
Taxation? Your losses from your investment with Storm can be offset against your income, reducing income tax or perhaps even putting you in a tax-free situation for a number of years.

You're drowning under heavy mortgage payments?  If your mortgage payments are considerably more than it would cost you to rent a house, then perhaps you should consider telling the bank to take your house, and you walk away and start again from scratch.
With 20 years of working life in front of you and your wife, you could achieve a lot financially in that time if you play your cards right. That comfortable retirement you dreamed of is still within your reach.

Look - I'm no stock market or real estate or investment guru, I'm just an ordinary bloke whose been up a few dry gullies in his time. I've known adversity, and I've come through it by being positive, by looking ahead at what can be, rather than looking backwards at what was.
I don't know your personal situation. I don't have all the answers for you. I'm just trying to give you hope for the future by showing you your potential.
I feel pretty sure that you'd still have the love and support of your family. What an asset that is.....with them behind you, and some determination and positive thinking on your part, who knows what you can achieve!

Mate, I don't want to hear any more of that destructive self-criticism crap that you've been going on with. Every minute spent in denigrating yourself about how stupid you've been, is one less minute you have for planning your future.
Now get stuck into it 
And any time you're feeling a bit down, remember that the old Bunyip has faith in your ability to get your life back on track.

All the best
Bunyip


----------



## Harleyquin (20 October 2009)

Bunyip you had some great words of encouragement on your last post and I'd like to thank you for those.  There are hundreds of storm clients who are in really dire straights and to lose everything you own, as Mindstorm and others have said, is not easy to recover from as most of us are on the maximum amount of anti depressants etc that is available to us just so that we can somehow come to terms with it.  After twelve months the depression is almost impossible to overcome when you've seen everything you own go down the gurgler.  

The other issue we face is 'can we ever trust anyone again'.  I bet there are a lot of ex stormers who will never go anywhere for investment advice again.  I will never sign a 'statement of advice' again and would advise anyone seeing a financial advisor to get them to sign the statement of advice to guarantee their advice.  If there are genuine financial advisors out there they would be happy to guarantee their advice.  Perhaps we need the whole industry shaken up, cleaned out and completely overhauled.  The payment of trailing commissions should be stopped completely.  At present financial planners do not have to guarantee their advice and they are able to wriggle out of any legal implications by getting clients to sign outdated paperwork.  I know that some of you say that there are genuine people out there but at present it is too hit and miss for the first time investor.

What is your suggestion for ex stormies who are close to retirement or have retired completely, is there any way that they have a financial future or is that it for them?


----------



## Solly (20 October 2009)

Unfortunately I couldn't make it to Harrys today. But I do believe that there was quite a sad story of some massive losses from up Rocky way. Hope the scribes present post some telling detailed articles of the proceedings. 

Once again I believe that it was stated that it was hoped that the association between Storm and the Comm Bank was strong enough to save the Stormers from the pending GFC disaster.

Today's transcript should be quite interesting.


----------



## Solly (21 October 2009)

*"Storm Financial boss Emmanuel Cassimatis told clients they were 'screwed' "*

"STORM Financial boss Emmanuel Cassimatis told clients late last year they were "screwed" after their $8 million portfolio had evaporated, an inquiry into the failed advisory firm was told yesterday."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26238068-952,00.html


----------



## Solly (21 October 2009)

*"Words a debt-laden client didn't want to hear"*

"The co-founder of failed advisory firm Storm Financial told one of his clients they "were screwed" when their investments were sold, leaving them with a $2.3 million mortgage, a court heard yesterday."

Read more by Michelle Singer in The Australian Financial Review of October 21 2009.


----------



## bunyip (21 October 2009)

Harleyquin said:


> Bunyip you had some great words of encouragement on your last post and I'd like to thank you for those.
> 
> What is your suggestion for ex stormies who are close to retirement or have retired completely, is there any way that they have a financial future or is that it for them?




Harleyquin

 I don't have any suggestions that could solve the problems of Stormers who are at or near retirement age.
The best I can do is tell you about some words of wisdom I read many years ago.....

_When you're in a situation that's troubling you, think of the worst case scenario that could arise from your situation. Then ask yourself if you can handle that scenario if it eventuates. For most people, the answer is yes._

This knowledge - that you can handle the worst that your situation deals up to you - can give considerable comfort in times of trouble.

I imagine that the worst case scenario for Stormers of retirement age is the possibility of living the rest of their lives in rented accommodation, and being dependent on the aged pension. This situation, though unpalatable, is something we could all handle if we had to.
In fact I know some people who are doing exactly that....living in a rented unit and living on the aged pension. Obviously they don't have money to burn, but nevertheless they enjoy simple pleasure like social clubs, bowls, fishing and bushwalking, visits to national parks etc. Many of life's true pleasures are free.

We're fortunate to live in a country whose welfare system ensures that nobody has to be a beggar on the streets, as happens in some countries when people have no job and no money and no relatives to look after them.

Unfortunately I don't have the solution to your problems. But the knowledge that you can deal with the worst case scenario, if it eventuates, will hopefully give you some comfort and peace of mind.


----------



## mellifuous (21 October 2009)

bunyip said:


> "... _When you're in a situation that's troubling you, think of the worst case scenario that could arise from your situation. Then ask yourself if you can handle that scenario if it eventuates. For most people, the answer is yes._ ..."
> 
> For the whole of my adult life I have asked myself this question when in need or troubled.   I believe it is the wisest way to approach any problem one is confronted with.
> 
> Well said.


----------



## Solly (21 October 2009)

*Yianni Cassimatis has begun giving evidence at a public examination into the company's collapse.*

More to follow.

From the ABC;
http://www.abc.net.au/news/stories/2009/10/21/2720574.htm


----------



## Harleyquin (21 October 2009)

Bunyip I can't imagine anything worse than living in rented accommodation on the old age pension.  Guess I'd like a better quality of life than that but I do enjoy the simple pleasures of life not necessarily the ones which cost.  Will take your suggestion on board though thanks for your input.


----------



## Solly (21 October 2009)

I believe it was quite an enlightening day at the Hearing and it doesn't pay to upset a Forensic police officer.

A very well constructed email to your Financial Adviser stating your concerns about the Storm strategy never goes astray either......


----------



## Garpal Gumnut (21 October 2009)

Solly said:


> *Yianni Cassimatis has begun giving evidence at a public examination into the company's collapse.*
> 
> More to follow.
> 
> ...






> Yianni Cassimatis has told the Federal Court he was a researcher at Storm Financial prior to 2006, looking at financial products, including index funds.
> 
> Mr Cassimatis has claimed privilege from self-incrimination throughout his evidence.




What does this mean? I'm not a lawyer.

gg


----------



## Sunder (21 October 2009)

Garpal Gumnut said:


> What does this mean? I'm not a lawyer.
> 
> gg




Pretty sure that just means that nothing he says can be taken as a confession. If he indicts himself, they still need to find evidence to prove he is guilty.


----------



## Garpal Gumnut (21 October 2009)

Sunder said:


> Pretty sure that just means that nothing he says can be taken as a confession. If he indicts himself, they still need to find evidence to prove he is guilty.




Wasn't Manny trying to present documents to the inquiry in brisbane that would enable them not to be presented as evidence in later court hearings, and Bernie refused to allow him to do so..

Is this similar?

gg


----------



## Garpal Gumnut (21 October 2009)

Solly said:


> *"Storm Financial boss Emmanuel Cassimatis told clients they were 'screwed' "*
> 
> "STORM Financial boss Emmanuel Cassimatis told clients late last year they were "screwed" after their $8 million portfolio had evaporated, an inquiry into the failed advisory firm was told yesterday."
> 
> ...






> Ms Lock also told the public examination into Storm's collapse that Mr Cassimatis was contemptuous of clients who did not want to borrow against their home equity to invest. She claimed he dismissed "bloody women and their houses" and attacked their "sentimental attachment" to their dwellings.
> 
> Ms Lock said that, after two years of pressure, she gave in and borrowed against her home.




I merely include Mrs Lock's testimony in case anyone from SICAG.info is unaware of the Federal court evidence being reported in the Courier Mail.

It might fill in the large spaces now occupying that site, which all but hide the disclaimer about having the  connection with the Cassimatises at the bottom of a very empty page.

gg


----------



## Mindstorm (21 October 2009)

bunyip said:


> Mindstorm
> 
> I admire you for having the character to make a public apology.
> Your apology is accepted - no hard feelings at all on my part.
> ...






Bunyip,

Thank you for your kind comments, and for accepting my apology.

I apologised in public so that anyone reading the thread could see that I knew that I was wrong to 'speak' to you as I had done.

There is no excuse that I can offer for this other than I was feeling raw.  I am embarrassed that I did it, and am very glad that you accepted my apology.

Mindstorm


----------



## Solly (21 October 2009)

Garpal Gumnut said:


> What does this mean? I'm not a lawyer.
> 
> gg




gg,

This may be interesting reading for you.

http://www.austlii.edu.au/au/legis/cth/num_act/ea199580/s128.html


----------



## Mash (21 October 2009)

Rest assured GG... sicag knows all too well what is going on in the federal court as most of them are there to support those who are brave enough to expose themselves. WE will finish strong !!!! and quite frankly your constant diatribe is of little use or importance to any one.


----------



## Julia (21 October 2009)

Harleyquin said:


> Bunyip I can't imagine anything worse than living in rented accommodation on the old age pension.



Nothing worse? How about being on an unemployment benefit which isn't even enough to pay for that rental accommodation, let alone any other expenses.

In comparison the age pension for a couple is fairly reasonable.  I know plenty of people who have a perfectly reasonable life on this, even play golf and go out for dinner once a week or so.

If you continue to tell yourself your situation is dire and hopeless, then it will be.


----------



## Solly (22 October 2009)

Garpal Gumnut said:


> From the article above.
> 
> Oh dear Solly, it looks as if 2011 is on.
> 
> ...





gg, the Marriott does look very flash, and there's special drink deals in the Lobby Bar as well. It's in a nice quite part of town, quick access along the river walk to the Riverside Centre, I even noticed a strange cell like structure just near Customs House. I wonder if this is an omen ?


----------



## Solly (22 October 2009)

*"Referral fee at core of Storm Financial advice, court hears"*

"A STORM Financial client alleged in Brisbane Federal Court yesterday that his accountant had recommended an investment scheme only after receiving a $10,000 "referral fee" from the advisory firm.

Sean McArdle told an inquiry into Storm's collapse that his accountant initially had concerns about Storm in late 2006 and suggested alternative investments.

But in a subsequent meeting with Storm, the 42-year-old Sunshine Coast police officer alleged his accountant said the firm offered a good and affordable product with no downsides or elevated risk."


More by Anthony Marx in The Couriers Mail here;

http://www.news.com.au/couriermail/story/0,23739,26243366-3122,00.html


----------



## Solly (22 October 2009)

*"CBA denies incomplete Storm information
Storm founder makes claims"*

"CBA has denied it provided incomplete information to a parliamentary committee regarding email correspondence it had with Storm Financial's founders."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7678.htm


----------



## Solly (22 October 2009)

* "Storm paid accountants a referral fee"*

"Failed advisory firm Storm Financial paid referral fees of $10,000 to accountants who recommended the company's investment model to their clients, a court has heard."

Read more by Michelle Singer in The Australian Financial Review of October 22 2009 


*"Storm spin doctors take the wheel - and the money"*

"When it comes to solid self-belief, few public relations firms have anything on crisis management experts FD Third Person, which were engaged by failed advisory firm Storm Financial for a prepaid sum of $74,000 in December prior to the company's collapse."

Read more by Andrew White in The Australian Financial Review of October 22 2009


----------



## Harleyquin (22 October 2009)

I hope you're right Julia as I've no doubt we will find out for sure how easy it is to live on the old age pension.  I'm slowly trying to get my head into a better place than it has been this past few months and I realise that I need to change my way of thinking as you have suggested but I find it is one small step at a time at the present time.  

With everyone's support hopefully all the storm survivors will make it and continue to enjoy their life but I think it's important for others out there to realise that it is far from easy.  Life as we planned it and knew it, is now gone forever and has been replaced by a life which is very different from the one we envisaged.


----------



## bunyip (22 October 2009)

Solly said:


> gg,
> 
> If it doesn't look like things are making progress with the inquiry, examinations, etc why don't we invite EC & JC down to Gloria Jeans at Cannon Hill Plaza for a friendly chat, a couple of cappuccinos and some filo pastries.
> 
> ...




Solly

When or if you come face to face with Cassamatis, you can ask him a couple of questions from me. I already asked him these questions on his website, but in his typically weak and cowardly way he didn't respond.

*If you were managing your clients portfolios, why did you let them evaporate into thin air? Why did you let them sit through more than 12 months of one of the worst bear markets in history, without taking any defensive action that would have saved their portfolios from being decimated?*

Well of course we all know the answer - selling clients out would have dried up his cash flow, firstly by eliminating Storm's ongoing management fees, secondly by effectively preventing new clients from coming on board with Storm. I mean, if word had got out that Storm were evacuating their clients from the stockmarket, then nobody in their right mind would have walked into Storm and asked to be put into the market.

There were many faults with the Storm model......
too much gearing
excessive borrowings relative to clients capacity to service their loans
no diversification
excessive up front fees. 

But the biggest failing of all was Storm's total lack of risk management.
None of the above shortcomings by itself, or even collectively, would have wiped out Storm clients if only there had been prudent risk management in place.

We can blame the banks for selling down the portfolios, we can blame them for excessive lending, we can blame the faulty data late last year, we can blame the stokmarket crash, if we're really gullible we can allow Cassamatis to pull the wool over our eyes with his claim that the economic meltdown and market crash were 'unprecedented', and if we're _*extremely*_ naive we can believe that nobody saw the crash coming.

But the truth is that if Storm Financial had been doing their job they would have hauled their clients out of the market long before they got anywhere near margin call. 
When it's all said and done, it was the gross incompetence of Storm Financial, and in particular their total lack of risk control, that brought Storm clients undone.

So Solly.....if you or anyone else ever come face to face with Cassamatis, ask him that question for me...._*Why didn't you take your clients out of the market before their portfolios were decimated?*_
I'm surprised that nobody has yet asked him that question during the Parliamentary Enquiry.
I challenge SICAG to put my second last paragraph on their website.


----------



## bunyip (22 October 2009)

Harleyquin said:


> I hope you're right Julia as I've no doubt we will find out for sure how easy it is to live on the old age pension.




Harleyquin

Julia didn't claim it was 'easy' to live on the old age pension. She merely pointed out that some people are doing it and are still managing to lead quite enjoyable lives.
Julia and I are trying to put across the message that it's not the end of the world if people have to rely on government welfare during their retirement.
It's a situation that all of us could handle if we had to, while at the same time still being reasonably contented.
I know I know.....you'd prefer to have a higher standard of living than that - we all would. But if that's how it pans out for some of us, it's not the end of the world.


----------



## Solly (22 October 2009)

bunyip said:


> Solly
> 
> When or if you come face to face with Cassamatis, you can ask him a couple of questions from me. I already asked him these questions on his website, but in his typically weak and cowardly way he didn't respond.
> 
> ...




bunyip, these are excellent questions, what do you think gg ?

Anybody else got any questions to pose ?


----------



## Out Too Soon (22 October 2009)

Just noticed this thread waiting for market to open. Just like to say I'm lucky to have been sucked into meeting Emmanual many years & name changes ago at a time when his main interest seemed to be selling Life Insurance & I didn't have 2 brass razoos to rub together.
  At least he wouldn't discuss a financial plan for me until I purchased some Life Insurance & I am very anti Life Ins' so our discussions went no further.
 It has been of passing interest over the years to watch the name changes & eventually the building of the pack of cards that have come crashing down so spectacularly. I hear Majorca is a nice place to live, do they still have their passports? :

PS: This is a light-hearted post but I still feel sorry for all those that lost so much.


----------



## Julia (22 October 2009)

Out too Soon, do you mean Manny has changed his personal name, or that he has had various business names for his various enterprises?

Good to know you didn't provide fodder for him.


----------



## DocK (22 October 2009)

Solly said:


> bunyip, these are excellent questions, what do you think gg ?
> 
> Anybody else got any questions to pose ?




Indeed I do, and quite a few..., however the main one would be:

I read in one of the many recent articles about the ongoing enquiry that Manny has apparently claimed that it was not their job to constantly monitor clients' lvrs, and indeed this was only looked at when reviewing a portfolio - perhaps three or four times a year (read " when looking to see if storm could induce further borrowing/investment by client in order to generate fees for storm").  I also think I recall one of their IT people admitting their "state-of-the-art" computer system wasn't capable of doing this as yet - yet apparently it was worth the oodles of moolah storm paid to ignite (yes, owned by Manny & Julie of course!).  I quite clearly recall their website promising constant monitoring of their client's portfolios, and the claim that clients were not to worry about the performance of the sharemarket or lvrs etc - that's what they were there for - something along the lines of "Let us worry about your money so you don't have to".  (I guess I've got less to worry about now, don't I?)  So, to sum up, my question would be:

If storm didn't think it was their job to monitor their client's positions, and spent very little time or effort doing so, and if everyone received the same simple advice to invest in the same simple products - WHAT THE HELL DO THEY THINK THEY WERE BEING PAID FOR????  

Sorry to shout, but if I were face to face with them then that is what I would do, so I'd appreciate it greatly Solly if you could deliver my question in a loud belligerent tone, and if you could "accidentally" spill your cappuccino all over his "lap" so much the better:


----------



## bunyip (22 October 2009)

DocK said:


> Sorry to shout, but if I were face to face with them then that is what I would do, so I'd appreciate it greatly Solly if you could deliver my question in a loud belligerent tone, _*and if you could "accidentally" spill your cappuccino *__*all over his "lap" so much the better*_:






LOL.....Good to see a  man whose retained his sense of humour in spite of the humourless position that Storm helped to put him in!


----------



## Rainbow (22 October 2009)

Solly said:


> bunyip, these are excellent questions, what do you think gg ?
> 
> Anybody else got any questions to pose ?




Why doesn't the Professional Indemnity Insurance cover our losses like it should - or was the premium squandered on refuelling the private jet?


----------



## Solly (22 October 2009)

I'm sure gg will be pleased to know that Mr Jellich has taken the stand today dressed professionally in a sharp suit and tie. 

Yes you are correct gg, it does portray a much better image and respect for the court.


----------



## chrisgee (22 October 2009)

gee ive been trying to keep up with whats going on but it sure is hard with all the posts-i really really hope that they get to the bottom of things now-sounds like theres been some brave people in the court telling them as it is-good on them-see alot of people only invested to make their familys future safe and secure after many years of bloody hard work-ordinary people sold a dream thats now turned to this nightmare-its a real damn shame and christmas is comming and most dont know what the new year will bring-i want all stormies to remember to stick this out till the end-just think what we all will be saying this time next year-everybody will be talking about how justice was served and how the stormies won-thats my dream and NOBODY WILL TAKE THAT AWAY FROM ME !!!!!!


----------



## Smiley (22 October 2009)

Rainbow said:


> Why doesn't the Professional Indemnity Insurance cover our losses like it should - or was the premium squandered on refuelling the private jet?




Insurance is not paid when the law has been broken . . .wonder if this means if Manny does not go to jail; if the stormfied will get indemnity payouts from the 40 million insurance?  

Still hope he gets tried for trading while insolvent, etc.


----------



## bunyip (22 October 2009)

Rainbow said:


> Why doesn't the Professional Indemnity Insurance cover our losses like it should - or was the premium squandered on refuelling the private jet?




Apparently Storm's Indemnity Insurance was woefully inadequate.
Damian Scattani of Slater & Gordon has said that even if ID was paid, it would be spread very thinly among Storm clients.


----------



## -Bevo- (22 October 2009)

bunyip said:


> Apparently Storm's Indemnity Insurance was woefully inadequate.
> Damian Scattani of Slater & Gordon has said that even if ID was paid, it would be spread very thinly among Storm clients.




Manny Manny years ago when it was Cassimatis Securities I attended a education night.
I can remember EC telling people if they ever invest check with the Financial Planner to make sure they have adequate Insurance in case something goes wrong.


----------



## Garpal Gumnut (22 October 2009)

bunyip said:


> Solly
> 
> When or if you come face to face with Cassamatis, you can ask him a couple of questions from me. I already asked him these questions on his website, but in his typically weak and cowardly way he didn't respond.
> 
> ...





Mates there are only three main groups of questions that I would ask Manny if he agreed to meet Solly and myself for an explanatory breakfast in Brisbane.

1. Manny, before  I ask my second question do you agree to pay for Solly and my breakfasts.

2. Manny , may I ask you to give the waitress your credit card now please, before breakfast is served , so that she can enter it and your pin into the machine lest you have to leave suddenly.

3. Manny, how could you have been a such a muppet, to think that the sharemarket would continue upwards and onwards in a bulll pattern, continue to leverage your clients, and deny to them the opportunity to convert to cash in the event of a bearmarket.

Thats the nuts of the questions really.

If he stuck about I might also ask him if he was a member of SICAG as he lost a lot too remember. 

And I might ask him if he'd sell me his mansion on Cleveland Tce for $754,000 as I want to lighten my RIO holdings by that amount soon..

gg


----------



## Solly (23 October 2009)

I see it is reported in The Courier Mail that Ron almost came to fisticuffs with EC over a few issues. 

I believe that's a strange position for business associates to take.


----------



## Farencue (23 October 2009)

Solly said:


> I see it is reported in The Courier Mail that Ron almost came to fisticuffs with EC over a few issues.
> 
> I believe that's a strange position for business associates to take.





Gosh, I'm surprised Mr Jelich still believes in the Storm business model.
I'm wondering if Mr Jelich could perhaps find himself another position as a financial advisor, maybe with other advisors who also believe in the Storm model.
Which reminds me, the SICAG mob have been a bit quiet lately.
Looks like the banks weren't the only evil ones.


----------



## Judd (23 October 2009)

How long has the person been a financial planner for goodness sake?

Sure, gearing can help but not:

(a) when margin buffers are continually being exceeded; or

(b) when equity has been totally wiped out leaving nothing but debt.

That's been proved over and over again since margin loans were introduced by Bankers Trust in the late 1980's.

Sheesh.


----------



## Soft Dough (23 October 2009)

Garpal Gumnut said:


> Mates there are only three main groups of questions that I would ask Manny if he agreed to meet Solly and myself for an explanatory breakfast in Brisbane.
> 
> 1. Manny, before  I ask my second question do you agree to pay for Solly and my breakfasts.
> 
> ...




wouldn't work,

He would cut and run at the first question.


----------



## Ironhalo (23 October 2009)

*But Mr Jelich acknowledged – under questioning by lawyer Craig Wilkins – he had never read the detailed statements of advice sent out to clients.

Mr Jelich, a Storm representative since 2003, said the statements were generated by the firm's head office in Townsville and he had no reason to believe they contained "anything untoward".

Mr Jelich conceded he rarely had direct dealings with clients.* (from the Courier Mail)

Hang on, is this the same Ron Jelich who wrote in his parlimentary submission that he had a 'very close relationship with his clients?' So to clarify, as the Redcliffe-based financial adviser, he never once reviewed/read his 'close' client's SOA's? Never once considered that the $100k p/month salaries on the loan apps didn't add up?

*Mr Jelich told the court that the prospects of him falling in to bankruptcy were now "very real" as he owed more than $5 million on two properties.

In a submission to the inquiry into Storm's demise, Mr Jelich estimated his personal loss from the economic downturn at between $15 million and $20 million.*

'Waaaaa despite my neglect of my customers, and being party to driving most of them into financial ruin due to my own neglect/apathy/greed/laziness, I now might be in a bit of financial poo myself. Despite being a *financial adviser* in a city of barely ~40,000 people, I pretty quickly amassed a personal fortune of between $15-20 million bucks from trailing commissions and exorbitant fees from my trusting elderly and self-retiree clients.

One of my properties in my $5 million portfolio could be sold....oh the humanity.'

And this clown was waving the flag for SICAG members to 'get the banks, mang! Seek justice!' a few months ago, appearing in the Redcliffe Herald hands aloft triumphant as it was announced Slater and Gordon would be going after the banks. 

If they haven't already, SICAG would do well to cut their ties to this germ. Him, Manny, Julie and the rest of the corrupt hedons should be the next ones up on the block having every last asset taken off them to recompense the betrayal of their clients.


----------



## bunyip (23 October 2009)

bunyip said:


> Apparently Storm's Indemnity Insurance was woefully inadequate.
> Damian Scattani of Slater & Gordon has said that even if ID was paid, it would be spread very thinly among Storm clients.




Correction to the above.....I meant to say 'II', not 'ID'.
Maybe I should have just typed 'Indemnity Insurance' rather than trying to abbreviate.


----------



## Judd (23 October 2009)

Ironhalo said:


> Hang on, is this the same Ron Jelich who wrote in his parlimentary submission that he had a 'very close relationship with his clients?'




Only when he rubbed shoulders with them at a BBQ at Manny's hacienda.



Ironhalo said:


> 'Waaaaa despite my neglect of my customers, and being party to driving most of them into financial ruin due to my own neglect/apathy/greed/laziness, I now might be in a bit of financial poo myself. Despite being a *financial adviser* in a city of barely ~40,000 people, I pretty quickly amassed a personal fortune of between $15-20 million bucks from trailing commissions and exorbitant fees from my trusting elderly and self-retiree clients.
> 
> One of my properties in my $5 million portfolio could be sold....oh the humanity.'




Now be reasonable.  One must keep one's personal matters, especially financial ones, apart from the client's issues in order not to impose or be accused of any issue of bias or conflict of interest.



Ironhalo said:


> And this clown was waving the flag for SICAG members to 'get the banks, mang! Seek justice!' a few months ago, appearing in the Redcliffe Herald hands aloft triumphant as it was announced Slater and Gordon would be going after the banks.
> 
> If they haven't already, SICAG would do well to cut their ties to this germ. Him, Manny, Julie and the rest of the corrupt hedons should be the next ones up on the block having every last asset taken off them to recompense the betrayal of their clients.




Remember that it pays to never give up, regardless of how you may be viewing the competition from your current vantage point.  Steve Bradbury can attest to that.


----------



## The Sponge (23 October 2009)

Hello to everyone on this thread.  Have been reading this for months and I am learning so much from both sides of the fence.   Nearly got sucked into Storm in Mackay, however , thank god, I had been a amateuar investor for a number of years and didn't quite like the sound of 7.5% management fees or equity lending for a branded fund.  Am very sorry to read the plight of many of you. To be in the later years  of your lives with all the hard work seemingly done and then to be told your broke must be a living hell. All that I can hope is that justice prevails and they nail the culprits (Manny & Co).  The trouble is that, as most often happens,  the wolves cry and the lambs die.  Apologies for the corny name but I do love to read and learn everything you all have to say.


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## Harleyquin (23 October 2009)

Bunyip I know that Julia wasn't saying it was easy to live on the old age pension I was being very tongue in cheek and saying 'we will find out how easy it is to live on the old age pension!!!'

I know people including my parents who lived on the old age pension and although it wasn't easy they were very resourceful people and if placed in that position I'm sure we would all be the same.  All I'm saying is I'd prefer not to be in that position given a choice.  We will continue to strive to improve our financial position as best we can.


----------



## Garpal Gumnut (23 October 2009)

From the Courier Mail.

All muppets please be aware, this may all just start off all over again.



> STORM Financial's former national business development manager said yesterday he still believed in the investment model that was used by the failed advisory firm.
> 
> Brisbane-based financial planner Ron Jelich told an inquiry in to Storm's collapse that heavy borrowing to invest in shares had worked for many clients over 20 years.




It all now makes more sense how the SICAG model and site are presented.

http://www.news.com.au/couriermail/story/0,23739,26247374-3122,00.html

gg


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## Harleyquin (23 October 2009)

Hello The Sponge we did get sucked into the storm in Mackay and to lose almost everything in your later years is a living hell.  

Ron Jelich is coming in for his share of criticism after appearing in court and giving evidence.  I  give the man credit to come forward and give his side of the story.  What I want to know is where are all the other advisors?  Why haven't they all been called up to explain their actions? 

When we joined storm we had to fill out a personal profile and choose the level of risk we were prepared to take.  The box that we ticked and signed said *'I am prepared to accept volatility if in the medium to long term the investment growth is higher and the risks over that term are minimal or eliminated.'*  It was our advisor who asked us to sign this paperwork and it was our advisor who gave us his advice which ultimately destroyed our finances.  Why were we asked to choose a level of risk if they were never going to adhere to our wishes.

I want him to stand up in court, explain his actions and give us his side of the story like Ron Jelich has done.  Are there any other ex stormies who want their advisors to do the same?


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## The Sponge (23 October 2009)

Hi Harleyquin!    That is the frustrating part,  all the evidence in plain sight and all these so called educated, caring, pillars of society bumbling and lying through their teeth hoping the circling vultures don't peck their eyes out before they are carrion. What point is there in filling out any paperwork if the system doesn't back it all up, may as well have a handshake agreement like in the movie Jerry Maguire. ( Strong as oak, that is my word).


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## Garpal Gumnut (23 October 2009)

Harleyquin said:


> Hello The Sponge we did get sucked into the storm in Mackay and to lose almost everything in your later years is a living hell.
> 
> Ron Jelich is coming in for his share of criticism after appearing in court and giving evidence.  I  give the man credit to come forward and give his side of the story.  What I want to know is where are all the other advisors?  Why haven't they all been called up to explain their actions?
> 
> ...




Mate , with respect , you are missing the point.

The majority of "advisers" who advised you guys are arch muppets themselves, so getting them to appear in court is as useful as asking a one legged man to line dance.

You were badly advised. Full stop.

gg


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## Harleyquin (23 October 2009)

You're right GG we were badly advised.  My point is - this was supposed to be a legitimate outfit and had all the bits of paper from the powers that be.  Our advisors were also professional financial planners in their own right, some weren't I know but many were, and they should have had the morals and ethics in place to give us the sort of investment we asked for instead of the lies and now we have the lies they still need to get up there and tell us their side of the story.  

If they were muppets too so be it but they were financially educated financial planner muppets and they weren't muppets paying for advice as we were - that's a very important difference don't you agree.  When EC had his site up and running and we were all complaining about our losses his only comeback was 'I've lost money too' big deal, he was the advisor and knew and took the risks, we didn't although in hindsight it would appear that way to those who knew better.  

Did all the other planners ever read the huge volume called the storm Statement of Advice, I think it was called 'Making Money' or something similar.  Making money disappear sounds more like it to me.  We have every right to be angry and to vent our anger we have been the victims of major fraud and in hindsight it's very easy to see what we should or shouldn't have done but it's not going to do any of us any good to continue to go there.


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## Solly (23 October 2009)

I believe it was a fine performance from the BoQ today, looks like they place much faith in the details provided by professional financial planners. The papers will be interesting tomorrow.

On another note, does anybody know how the offers from the CBA are going ?

I had a call from my Stormer mate tonight, I believe from the timber of his voice and his general demeanor of desperation, he has had no offer of settlement.

It makes me wonder how the initiators of this debacle can soundly sleep at night or maybe they can't.:nono:


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## Garpal Gumnut (23 October 2009)

Harleyquin said:


> You're right GG we were badly advised.  My point is - this was supposed to be a legitimate outfit and had all the bits of paper from the powers that be.  Our advisors were also professional financial planners in their own right, some weren't I know but many were, and they should have had the morals and ethics in place to give us the sort of investment we asked for instead of the lies and now we have the lies they still need to get up there and tell us their side of the story.
> 
> If they were muppets too so be it but they were financially educated financial planner muppets and they weren't muppets paying for advice as we were - that's a very important difference don't you agree.  When EC had his site up and running and we were all complaining about our losses his only comeback was 'I've lost money too' big deal, he was the advisor and knew and took the risks, we didn't although in hindsight it would appear that way to those who knew better.
> 
> Did all the other planners ever read the huge volume called the storm Statement of Advice, I think it was called 'Making Money' or something similar.  Making money disappear sounds more like it to me.  We have every right to be angry and to vent our anger we have been the victims of major fraud and in hindsight it's very easy to see what we should or shouldn't have done but it's not going to do any of us any good to continue to go there.




I agree Harleyquin, back in the 80's I was taken in a scam by a financial entity and I have never trusted anyone ever again with my money or investments.

I am so glad you are on asf.

It wasn't around in my hour of need. I went through all the stages of grief, the anger can be exquisite. The guy who ripped me off is living it up still. No consequences. 

Its just the way it is, unless Bernie Ripoll and the liquidators and ASIC can punish Cassimatis, the advisers and the banks, and bring real change to the investment environment. This needs to be without putting excess fees on blokes like me who lose their money effortlessly and make it just as effortlessly without paying some bastard to do it for me.

That is why I'm so dirty on SICAG.

They should be flaying the advisers and the Cassimates as well as the banks, as others will get drawn in to future scams like Storm.

gg


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## Solly (23 October 2009)

*"Million-dollar Storm adviser almost came to blows"*

"Former Storm Financial adviser Ron Jelich received more than $1 million in consultancy fees during his time with the failed advisory firm and almost came to blows with the company's co-founder Emmanuel Cassimatis over market forecasts."

Read more of this enlightening article by Michelle Singer in today's AFR.

Ron appears to be of quite a solid build, it is pleasing that the altercation didn't result in an exchange of blows.


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## Solly (23 October 2009)

Garpal Gumnut said:


> They should be flaying the advisers and the Cassimates as well as the banks, as others will get drawn in to future scams like Storm.
> 
> gg




gg, my Stormer mate I talked with tonight is really feeling down. He's really feeling conned and feels he was treated like a sitting wood duck. He's technically broke, no immediate hope of getting back into the market and is working his ar*se off to keep it all together. He's tired, angry, dirty with the world and feeling like he's been done over by all those he trusted.

He's told me he's going to beat all of this and knowing him I know somehow he will. I really hope he starts posting here and gives us all updates on how he'll come through.


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## Garpal Gumnut (23 October 2009)

Solly said:


> gg, my Stormer mate I talked with tonight is really feeling down. He's really feeling conned and feels he was treated like a sitting wood duck. He's technically broke, no immediate hope of getting back into the market and is working his ar*se off to keep it all together. He's tired, angry, dirty with the world and feeling like he's been done over by all those he trusted.
> 
> He's told me he's going to beat all of this and knowing him I know somehow he will. I really hope he starts posting here and gives us all updates on how he'll come through.




My mate, the subject of the original post on this thread has now got a job in Mackay and trusting in Scattini , just getting back to normal again.

It would be great if Storm victims, could join asf.

It would really empower them, and they are correct in not trusting advisers imho.

gg


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## Cosgrove Fenton (23 October 2009)

Mr Ron Jelich is not a qualified finanical planner, the only reason he is talking is to cover his own ass. Of course he will state that he did not read the SOA's he was not required to - I bet he never signed one! Yet when the commission was being splashed around he'd be the first in the que. Ron will continue to defer blame and fault and be hanging around the storm action group he can't piss off like his mates cause he holds no qualifications - he needs to show he was against EC & co so he doesn't get trampled by the authorities.


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## Harleyquin (23 October 2009)

I know how your Stormer mate is feeling Solly and so do all of the stormers we feel as though we have been conned out of everything we own.  The lies that we were told by the advisors, they promised us that they knew what they were doing, the only thing they did was to do as they wanted we were just cash cows to storm and the banks and they worked in together to blow us all out of the water.  

How can any genuine financial advisor be allowed by law to advise retirees to put their cash, home and superannuation on the line into a 'safe', 'risk free', 'we will look after your money and your house' investment and then lose it all.

I know stormers who were retired and earning a comfortable living on their storm investments.  Now they have no home, no money and lining up at Centrelink for their pension every fortnight.  Others have gone back to work, working two jobs to try and put food on the table and can barely afford that when all their money is being taken up paying interest only for the rest of their lives.  I know others have had their problems in life but this problem is as big as it gets.  When you lose everything, still have a debt and will pay interest only until you die .  They are demoralised and there is no hope for anyone once they have retired and they have nothing.  They know that they can at best now only survive it's not at all fair these people have worked and saved hard and tried to do the right thing and they have been swindled out of everything.  I feel for the retirees.


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## Solly (24 October 2009)

*"HOW a Rocky family lost $8 million"*

"Kevin and Debbie Lock spent their lives building their wealth.

If they hadn't trusted Storm Financial, the Rockhampton family might still have their $8 million portfolio.

They trusted the financial advice company because it was backed by the pillars of Australia's banks.

One year after the company failed, Mr and Mrs Lock were left owing $188,000. They've told an inquiry into the Storm collapse that the banks are as much to blame for their loss."

More by Kieran Campbell in The Morning Bulletin here;

http://www.themorningbulletin.com.au/story/2009/10/24/how-a-rocky-family-lost-8-million/


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## Solly (24 October 2009)

*"Storm Financial client information never queried, court hears"*

"A BANK of Queensland franchisee in Townsville loaned money to Storm Financial clients without checking data provided by Storm, a Federal Court in Brisbane was told yesterday."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26251230-3122,00.html


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## Solly (24 October 2009)

Harleyquin, for the first time in this whole event I have become really concerned for my mate. He's usually a very deliberately calm person and looks at things from a very practical  manner. I know his wife took things very badly in the beginning, I knew things were serious when I was talking to him on the phone earlier in the year and his wife was vomiting in the background.

It wasn't a pleasant thing to hear and I know there have been many tears shed since then and much angst felt. I know the calibre of these people, typical next door folk, they raised fine kids, live in a modest home in a down to earth suburb, drive a typical Aussie car, lend a hand to family and friends and are welcoming people. They knew Storm through its many incarnations and were clients for many years and were hoping for a modest comfortable retirement following the dream that they were sold and now this has happened.

My mate is still in disbelief that after all the reassurances that things would be fine with this strategy he now finds he's struggling to survive. He and his wife worked hard all their life and thought they would be looked after by the players in this saga. He was confident that Cassimatis and the CBA were rock solid in their offerings and the future would be secure. I now know the fees and commissions they paid to Storm and the bank, I'm quite shocked at the amounts and to now know where they have ended up.

I offer them support, kind words of encouragement, their other family members help them in many ways as well. But words wont give them back their house or a secure future. I've seen many cons and scams in my life both on and off shore, I've seen fraudsters, con men, thieves and criminals and have dodged the odd bullet that's come my way from these types. But in this Storm saga the main players aren't from a South East Asian bolier room scam or fronting a ponzi from the Caribbean, the main players are well known and some would say respected members of our community. This is what my mate finds so hard to understand, the main players are licenced and regulated in his own country.

The remedy for these Stormers is in the hands of the main players, it would be easier now for them now to step forward and to fess up to wrong doings. Wouldn't it be good to fast track a reasonable agreeable resolution. Where's the compassion ? Where's the leadership ? I know the Stormers aren't going to go away, I believe since the hearing has ramped up this has also fired them up even more. They may be only a small group of people that have been drastically affected, but this little group have family and friends that see what they are going through, they speak to others, headlines appear on newspapers and the media, forums, newsgroups, people talk and others become aware. The one thing that Aussies demand is a fair go and I believe that we will soon see some real progress. The real story will eventually come out, there are too many involved now to let this saga fade away. 

I wish all the Stormers well, don't forget Stormers that there are many others you've never met or even know exist that are doing little things everyday to assist with a truthful legally endorsed outcome. Don't feel alone.


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## Solly (24 October 2009)

*"Storm strategy pits owners against investors, say staff"*

"A BLOWTORCH awaits Emmanuel and Julie Cassimatis when they step back into the witness stand next week in the continuing inquiry into their failed advisory firm Storm Financial.

Once the courtroom action has come to a close, Mr Wilkins will huddle with Worrells liquidators Raj Khatri and Ivor Worrell to pore over the transcripts and draft a report for ASIC. It is considered highly likely that Worrells will recommend that charges be laid."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,20797,26251400-3122,00.html


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## Solly (24 October 2009)

*"Numbers wrong on Storm loan"*

"Matthew Buchanan says he handled about 400 loans to Storm Financial clients by mid-2008. He agrees the loan documentation in the case was inconsistent."


*"Loan approved based on errors"*

"The co-owner of a Bank of Queensland branch in Townsville admitted on Friday the bank had approved a $320,000 loan for a retired couple, even though the documentation was contradictory and overstated their cash assets."

Read more by Mark Ludlow in The Australian Financial Review of October 24-25, 2009


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## Garpal Gumnut (24 October 2009)

Solly said:


> *"Storm strategy pits owners against investors, say staff"*
> 
> "A BLOWTORCH awaits Emmanuel and Julie Cassimatis when they step back into the witness stand next week in the continuing inquiry into their failed advisory firm Storm Financial.
> 
> ...




Is there any requirement that people facing adverse findings through the Liquidator, Federal Inquiry and ASIC's investigations, stay within the Australian jurisdiction?

Can people facing adverse findings, for example, visit relatives who become suddenly ill in jurisdictions that do not have an extradition treaty with Australia?

Can people facing adverse findings, for example, travel on holidays to jurisdictions that do not have an extradition treaty with Australia?

Can people facing adverse findings, for example, visit places they have previously travelled to overseas to reminisce , jurisdictions that do not have an extradition treaty with Australia?

gg


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## Harleyquin (24 October 2009)

Solly I would be very concerned for your mate and all of the stormers.  The level of stress they have been under this year is more than enough to not only send them over the edge but stress is well known in the medical profession, and therefore the rest of us, to be a major cause of heart problems and all forms of cancer.  The surface of the stormers problems hasn't even been scratched yet.  Wait and see what happens in five years or so ...it won't be pleasant.


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## bunyip (24 October 2009)

Solly said:


> *"HOW a Rocky family lost $8 million"*
> 
> "Kevin and Debbie Lock spent their lives building their wealth.
> 
> ...




I get rather tired of people like Kevin & Debbie Locke blaming everyone but themselves.
It's time that greedy people like them got in touch with reality.
Certainly, Storm Financial played a major part in their downfall. And the banks also contributed.
But what the Lockes don't mention is their own greed and outright stupidity when, after making their fortune through their own efforts in business, setting themselves up for life and never needing to work ever again, they went along to Storm and risked everything with a reckless and completely unnecessary plunge on one of the most dangerous of all investments - the stockmarket.
These people were not your average Storm investors who were 'just trying to build up a decent nest egg for retirement'. They had already accumulated an 8 million dollar fortune before they went to Storm.....they had already provided for their retirement in abundant measure.

I don't criticise people for trying to make their wealth grow - you'd be a fool not to. The value of your money gets eroded by inflation if you put it in the bank, and there's no capital growth. It's far more prudent to invest your capital in growth assets like residential real estate, where at least you can reasonably expect values and rental yields to increase by far more than the inflation rate.
The Lockes had 8 million dollars. 5 million of that invested in real estate with 5% yield would have given them a yearly income of a quarter of a million dollars, or almost one thousand dollars every week day of the year. Not only that, but at 10% average yearly capital growth, their 5 million investment would have increased in value by around half a million dollars a year. Even at half that growth rate, the yearly value increase is still a tidy sum.
And they still would have had another 3 million left over for a dabble in the stockmarket or anything else that took their fancy.
Was that not enough for these greedy people? Apparently it wasn't. So with dollar signs dancing in front of their eyes, they went to Storm and allowed themselves to  become borrowed to the hilt, with gearing on gearing, in the foolish hope that the stock market would remain forever bullish.
They risked everything they owned to make more money they didn't need, by investing all their money, plus lots more that wasn't their's, into one of the most risky and volatile of all investments.
And now that's it's come crashing down, it's all somebody else's fault.
Well sorry Kevin & Debbie Locke, but the fault is not entirely somebody else's. It's time you had a look in the mirror.

I can and do feel quite sorry for the average Storm victim who was just trying to improve their financial position so they'd have a decent retirement.
But it find it more difficult to drum up any feelings of sympathy for wealthy people whose outfight greed caused them to get tied up in the debacle that was Storm Financial.


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## Julia (24 October 2009)

Bunyip, you beat me to it.  You've said all that I would have.


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## Soft Dough (24 October 2009)

Julia said:


> Bunyip, you beat me to it.  You've said all that I would have.





Yeah the post was a good one, and ignorance of one's responsibility to understand what they are investing into is no excuse.

But I hate it when people like bunyip say that the stockmarket is risky, there is risk, but losing everything is about as common as losing everything in housing, if you get good advice or know what to do.

The problem is that stormers 
1. Had no clue what they were doing
2. Got lousy advice from a conman at best ( purchases were made in the interests of commission, no tailoring of plans to suit people's stage in life and inadequate contigency plans ).

I have never come across anybody who, with a non-geared diversified portfolio of directly owned shares, has lost everything.

In fact even though the market is still well down, there would be many like me who are actually back to where they were at the peak, through selling smartly and purchasing smartly, even though it was one of the most devastating sharemarket routs in a generation ( and perfectly managable by anyone with a contigency plan )

It's just in the case of Storm, ridiculously overgeared parcels of shares were sold to naive people who thought they were doing the right thing.

P.S. 

Just like most Storm clients, they also probably did not know what their net worth was, their portfolio was $8 million, but they probably only had $3.5 million or so.

Even $3.5 million in shares at 4% fully franked gives a nice yearly income.  And if managed well ( selling some as the market dipped and purchasing more when it started to look better, they would be very close to $3.5 million again.


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## Harleyquin (24 October 2009)

I would totally disagree that the Rockhampton couple mentioned in previous posts were greedy.  They were obviously very good business people and employed an accountant to look after their business affairs.  As I understand it from reading the media, and please correct me if I'm wrong, it was their accountant who told them to invest in storm financial.  That's what business people do they are so busy running their business that they employ expert finance people to take care of the financial side of the business.  Once they retired they continued with this financial strategy.  I fail to see how they can be called greedy simply because they invested with a financial planner.  This is a free country and whether you have one hundred dollars or one hundred trillion to invest it doesn't matter, what matters is if you go to an accountant or a  financial planner they should be accountable for their actions.

Why do we only have to earn enough money to live on?  If you are able to use your financial resources to earn a significant amount of money per year there are many worthwhile charities in this country and overseas who you could support.  Imagine being able to write out a cheque every year for half a million dollars for the Salvation Army or Cancer research, how good would that make you feel.  There are many people the world over in dire need of life's basics, if you had the finances to support any of these you would feel that you are putting your hard earned to good use.

The bottom line here is all finance people should be accountable and at present they are not and this needs to change.  Storm financial told their clients that they would sell high and buy low and their investments would be constantly monitored by their team of experts, what a good selling point, and that's what they charged for.  They failed to do any of the things they promised.  Whether this investment strategy or the share market is risky or not risky is an individual assessment of the situation depending on your knowledge of the subject and I see where contributors to this forum are also divided on whether this was a risky investment or not.  I have been to other financial planners since storm and some dislike this strategy where others say there is nothing wrong with it.  What apparently is important is that the investments are closely monitored, you sell high, you buy low and you know what you are doing.

There will always be those who know instinctively what to do and what not to do just as there will always be those who have no idea despite trying to learn.  There is greed involved in this case, but it's not the victims who are greedy, it's the perpetrators of this crime and I pray that criminal charges will be laid against those responsible for so much suffering.  They say what doesn't kill you makes you stronger and they are right we will emerge from this debacle much stronger.


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## cuttlefish (24 October 2009)

Harleyquinn said:
			
		

> I would totally disagree that the Rockhampton couple mentioned in previous posts were greedy. They were obviously very good business people and employed an accountant to look after their business affairs. As I understand it from reading the media, and please correct me if I'm wrong, it was their accountant who told them to invest in storm financial. That's what business people do they are so busy running their business that they employ expert finance people to take care of the financial side of the business. Once they retired they continued with this financial strategy. I fail to see how they can be called greedy simply because they invested with a financial planner. This is a free country and whether you have one hundred dollars or one hundred trillion to invest it doesn't matter, what matters is if you go to an accountant or a financial planner they should be accountable for their actions.
> 
> ... etc ...



I agree Harleyquin.  I don't really see that they are more at fault because they had a lot of money invested.  I do think they were naive to put all of their eggs in one basket and to blindly accept the advice given without considering the risks involved but that applies to all Stormers not just the rich ones. It also sounds like Storm was extremely good at fobbing off peoples concerns and making them feel stupid or ignorant for even questioning things.  It would be devestating to go from a position of reasonable wealth to pennyless.  If other Storm clients are victims then these people are victims too imo.


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## Monario (24 October 2009)

In reference to some of the past posts:

I persoanlly dont think any storm investors were greedy, and honestly believe they were trully just trying to better themselves financially, I dont think there is one person here on ASF that is not trying to do that, does anyone object to that statement?

OK so this rockhampton couple had 8mill, some here are labelling them greedy for trying to gain more..Are you all telling me if you had 8Mill in the bank you would sit back stretch your legs, fold your arms behind your head, and say.. Hmmm thats enough.. Yawn, I think I will stop now... What a load of BS

I am sure 99% Of ASF users are on the hunt for more, sure 95% of those are probably doing it entirely on there own,and I commend them for it. But for those that are not that savvy, or just have enough to pay someone to do it for them should not be labelled greedy.. 

Everyone on this planet that pays for a service has a right to recieve professional genuine and to the letter of the law advice.. Weather these people were greedy or not, they paid for a service that was backed by all the governing bodies and in return copped a pineapple up the coiter!! 

This my friends is not right, and I will say again, if these people get away with it, if no repatriation or compensation is paid, well, I will be opening my own finacial advising firm and doing a Manny, cause if they do get away with then all this society we have built is saying to those responsible is, good on you for earning a crap load of money by having no morals.


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## GumbyLearner (24 October 2009)

Monario said:


> In reference to some of the past posts:
> 
> I persoanlly dont think any storm investors were greedy, and honestly believe they were trully just trying to better themselves financially, I dont think there is one person here on ASF that is not trying to do that, does anyone object to that statement?
> 
> ...




Well said.

I would take extreme offence if the PM and Treasurer didn't get involved here. You know both Queenslanders didn't take any steps to investigate this. The Australian financial legislative framework is strong in comparison to other parts of the world. In this country the lenders conduct is restricted by the Corporations Act.


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## Soft Dough (24 October 2009)

Monario said:


> OK so this rockhampton couple had 8mill, some here are labelling them greedy for trying to gain more..Are you all telling me if you had 8Mill in the bank you would sit back stretch your legs, fold your arms behind your head, and say.. Hmmm thats enough.. Yawn, I think I will stop now... What a load of BS .




Ok, 

Did they have $8million or was their gross portfolio $8 million.

I think that it is the latter.



Monario said:


> This my friends is not right, and I will say again, if these people get away with it, if no repatriation or compensation is paid, well, I will be opening my own finacial advising firm and doing a Manny, cause if they do get away with then all this society we have built is saying to those responsible is, good on you for earning a crap load of money by having no morals.




You could always become a real estate agent, most of them are dodgy too.


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## Monario (24 October 2009)

GumbyLearner said:


> Well said.
> 
> I would take extreme offence if the PM and Treasurer didn't get involved here. You know both Queenslanders didn't take any steps to investigate this. The Australian financial legislative framework is strong in comparison to other parts of the world. In this country the lenders conduct is restricted by the Corporations Act.





Unfortunately GL I think it is seriously wishful thinking for the pair of them to look at it to much. Even though I do feel this sort of activity is just what the top dogs need to be watching for, and jumping on straight away.. the capitalist system may well be the best system of gonvernment we have yet developed, but it is not a system based on principles where lies and deceit can be used to manipulate the wealthy, or in this case even the poor out of there hard earned.

And just a note on greed, when a national or multinational company makes money at the ill fortune of it customers and has no remorse in doing so THAT my friends is not only geedy but morally wrong and makes my body shudder.

When an individual is labeled greedy for trying to make there financial future stable through honest means, I think there is some rethinking on behalf of those labelling them needs to be done...

Wanna talk about greedy? what about all the CEO's still taking rediculous salaries and bonuses while the clients portfolios dwindle...

Greed (also called avarice) in psychology is an inordinate desire to acquire or possess more than one needs or deserves, especially with respect to material wealth.

If you work on the above definition of greed, were all greedy. :


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## GumbyLearner (24 October 2009)

If Kevin Rudd and Wayne Swan don't do anything about this, it's akin to what the Cain/Kirner government did in Victoria due to Pyramid. In Victoria, Jeff Kennett came to power and he decided to cut public services. If these Qld leaders of Australia ignore this fraudulent activity, I'm sure the Nats under
Springborg will have no alternative other than to privatise Qld state interests. I know most Storm investors here probably couldn't give a rats about that, but just remember Governments are Governments!


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## Monario (24 October 2009)

GumbyLearner said:


> If these Qld leaders of Australia ignore this fraudulent activity, I'm sure the Nats under
> Springborg will have no alternative other than to privatise Qld state interests. !




Correct me if I am wrong, but are we not doing this already? Brisbane port sold, and all the others recently pensioned off that dont come to mind this minute.


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## GumbyLearner (24 October 2009)

Monario said:


> Correct me if I am wrong, but are we not doing this already? Brisbane port sold, and all the others recently pensioned off that dont come to mind this minute.




No not at all. But why should the public have to pick up the tab?
And why forseeably more in the future if this kind of **** is not sorted out now!

All I can say is **** corruption.


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## Monario (24 October 2009)

GumbyLearner said:


> No not at all. But why should the public have to pick up the tab?
> And why forseeably more in the future if this kind of **** is not sorted out now!
> 
> All I can say is **** corruption.




Hell yes...

On the privatisation thing, I have never understood why any government would think it is good practice to sell of public assets, asstes that generate an income for both the people working for them, and the government! WTF?

Pretty soon the only way the Australian Government will have to earn an income will be soley tax on the people.. Great policy!!!


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## Harleyquin (24 October 2009)

If we don't get any compensation for this fradulent activity we are going to cost the Australian public squillions, so inevitably we are all going to pay one way or the other.  How much is it going to cost them to put Manny and Julie away or will they go to Marjorca...


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## Solly (24 October 2009)

I am of the opinion that it is not relevant how much money people lost, whether they lost $10M or $50k it doesn't matter, the fact is they all lost following this strategy. I believe if the Locks had millions to invest they should have reasonably expected to receive the projected returns in the same manner as a person investing a much lesser amount. We are not privy and neither should we be of what the Locks intended to do with the projected distributions from their Storm structure. I know it's none of my business or concern. If they made millions in business good on them, they most likely paid heaps of taxes, provided employment and provided other benefits in this capitalist system.

I believe we are all greedy to some extent it's probably innate and a product of evolution to ensure survival of us and the continuation of our genes.

It must have been very hard for Mrs Lock to face the questioning at the examination and to relive what has happen over the last 12 months. I believe it hit a raw nerve when she also recalled what has happened to her son, that must also added a new level of pain. Nobody likes to see that.


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## Monario (24 October 2009)

Harleyquin said:


> If we don't get any compensation for this fradulent activity we are going to cost the Australian public squillions, so inevitably we are all going to pay one way or the other.  How much is it going to cost them to put Manny and Julie away or will they go to Marjorca...




Exactly, the amount of taxpayer money already spent on this fiasco would be staggering to most... Lets hope those responsible are brought to justcie and made to pay!!


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## Monario (24 October 2009)

Solly said:


> I believe it hit a raw nerve when she also recalled what has happened to her son, that must also added a new level of pain. Nobody likes to see that.




Can you please ellaborate, or post a link, I have read a few articles, no mention of her son.


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## Harleyquin (24 October 2009)

Our son had the same experience with storm as the Locke's have had with theirs and on top of us losing almost everything so has he.  It's not easy. This hasn't just affected individuals it's affected whole families.  Mum and Dad, all the kids, grandparents, aunts, uncles, cousins and friends.  Whole families have been totally wiped out.  There is much suffering and the stories you haven't heard yet are disgusting.  

Not everyone has put in a parliamentary submission unfortunately.  There are many elderly who have never used a computer, have no idea where to go for support and have been stripped of everything.  Twelve months down the track they are still floundering.  Maybe someone will tell the whole story one day, at present you are only seeing the tip of the iceberg.  There are many elderly who won't say anything because they don't want their families to know or they feel totally lost or both.  This has been reported to be the largest corporate crash in Australian history.  If this is the case I feel no pride in being part of this historical event and I never want to see anyone else suffer as we have suffered this year.  That is why it is so important for this type of activity to stop right here and now, it's criminal and it needs to be treated as such.


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## Solly (24 October 2009)

Monario said:


> Can you please ellaborate, or post a link, I have read a few articles, no mention of her son.




Monario, the reference will be in the transcript.


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## Monario (24 October 2009)

Solly said:


> Monario, the reference will be in the transcript.





I am a bit slow tonight Solly, Traqnscript? Court Transcript? where can I find it?


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## maccka (24 October 2009)

Harleyquin said:


> Our son had the same experience with storm as the Locke's have had with theirs and on top of us losing almost everything so has he.  It's not easy. This hasn't just affected individuals it's affected whole families.  Mum and Dad, all the kids, grandparents, aunts, uncles, cousins and friends.  Whole families have been totally wiped out.  There is much suffering and the stories you haven't heard yet are disgusting.
> 
> Not everyone has put in a parliamentary submission unfortunately.  There are many elderly who have never used a computer, have no idea where to go for support and have been stripped of everything.  Twelve months down the track they are still floundering.  Maybe someone will tell the whole story one day, at present you are only seeing the tip of the iceberg.  There are many elderly who won't say anything because they don't want their families to know or they feel totally lost or both.  This has been reported to be the largest corporate crash in Australian history.  If this is the case I feel no pride in being part of this historical event and I never want to see anyone else suffer as we have suffered this year.  That is why it is so important for this type of activity to stop right here and now, it's criminal and it needs to be treated as such.




Well said Harleyquin.  I was present in the parliamentary inquiry in Cairns when the parliamentary committee started to realise the "network nature" of this event for families and communities.  I know that most of them had not considered it before that day.  I also know (because I spoke to a number of them in Brisbane a couple of days later) that it had brought a new level of understanding to their own minds of the costs of this event.

I really believe that the concept that whole families have been affected is a key factor that has been missed by the general public.  When several generations have been affected there is no reserve (financial or emotional) left within the family to allow them to cope with it.  I could give the examples of at least 4 families I know that have three generations (or more) involved.  I can also think of a couple of rural/regional towns that have large percentages of their populations affected.

Stuart Washington (A journalist who has written for the Age and others) has grasped this concept and he has written articles about it.

As you have said in other posts, the effect on the Australian public is not just financial.  People who previously donated money to charities can no longer afford to.  People who previously volunteered to work for community organisations can no longer afford to as they have to go back to work.  Of course there will also be the additional effects in the future as people who have been extremely stressed over a very prolonged period succumb to illnesses caused by that stress.

The cost of this is huge.  I suspect it will be impossible to truly calculate the cost.

cheers
Maccka


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## Solly (24 October 2009)

Monario said:


> I am a bit slow tonight Solly, Traqnscript? Court Transcript? where can I find it?




Monario, it's not published yet.


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## maccka (24 October 2009)

cuttlefish said:


> I agree Harleyquin.  I don't really see that they are more at fault because they had a lot of money invested.  I do think they were naive to put all of their eggs in one basket and to blindly accept the advice given without considering the risks involved but that applies to all Stormers not just the rich ones. It also sounds like Storm was extremely good at fobbing off peoples concerns and making them feel stupid or ignorant for even questioning things.  It would be devestating to go from a position of reasonable wealth to pennyless.  If other Storm clients are victims then these people are victims too imo.




Cuttlefish, I could be wrong here but I think that many Storm clients believed that they weren't putting all of their eggs into one basket.

The message I got from any of the seminars I went to talked about the fact that by buying into the Storm funds we would be buying into a diversified portfolio that was made up of the whole range of companies that existed in the ASX 200 (or it may have been the 300 - I didn't get into it so I am not sure).  This meant that people were exposed to a range of industrials, mining, financial, property companies etc.  So if mining stocks went down, the fund dealt with it by adjusting the fund composition.

A number of the Storm clients were invested in several managed funds and this would give even more of a feeling of not having eggs all in one basket.

cheers
Maccka


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## Soft Dough (24 October 2009)

maccka said:


> Cuttlefish, I could be wrong here but I think that many Storm clients believed that they weren't putting all of their eggs into one basket.
> 
> The message I got from any of the seminars I went to talked about the fact that by buying into the Storm funds we would be buying into a diversified portfolio that was made up of the whole range of companies that existed in the ASX 200 (or it may have been the 300 - I didn't get into it so I am not sure).  This meant that people were exposed to a range of industrials, mining, financial, property companies etc.  So if mining stocks went down, the fund dealt with it by adjusting the fund composition.
> 
> ...




True,

I also think most reasonably competent investors would not have forseen CBA pulling the plug on Storm branded index investments.

Perhaps people would have been better off with Vanguard, where the people who were not in margin calls would have not been forced to sell down, or were given the oppotunity to top up.   Another area where EC may have sold out preferential investors at the expense of the herd.

I would love to know if the employees of Storm sold out or were able to sell out before the fund was closed.

Once again, indexed funds are great for amateurs ( although a portfolio of shares with percentage allocation to sectors would no doubt outperform ) it was ONLY the GEARING which caused the problems.


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## Julia (24 October 2009)

Harleyquin said:


> I would totally disagree that the Rockhampton couple mentioned in previous posts were greedy.  They were obviously very good business people and employed an accountant to look after their business affairs.  As I understand it from reading the media, and please correct me if I'm wrong, it was their accountant who told them to invest in storm financial.




Most accountants are quite good at saving you tax but know damn all about the share market or investments in general.  There will, of course, be some who have made it their business to be capable of so advising.



> That's what business people do they are so busy running their business that they employ expert finance people to take care of the financial side of the business.  Once they retired they continued with this financial strategy.  I fail to see how they can be called greedy simply because they invested with a financial planner.




You are twisting and misinterpreting what was said.  No one has suggested any Stormer was greedy 'simply because they invested with a financial planner', have they?  What Bunyip suggested was that $8 M could produce a passive income considerably in excess of what a lot of people comfortably live on, and I agreed with him.



> This is a free country and whether you have one hundred dollars or one hundred trillion to invest it doesn't matter, what matters is if you go to an accountant or a  financial planner they should be accountable for their actions.




Yes, indeed they should, but so also should the investors be accountable for considering whether the excessive levels of leverage suggested by Storm were really sensible.



> Why do we only have to earn enough money to live on?  If you are able to use your financial resources to earn a significant amount of money per year there are many worthwhile charities in this country and overseas who you could support.  Imagine being able to write out a cheque every year for half a million dollars for the Salvation Army or Cancer research, how good would that make you feel.  There are many people the world over in dire need of life's basics, if you had the finances to support any of these you would feel that you are putting your hard earned to good use.




Two points here: (1) if you look back at Bunyip's calculations, you would be well able to contribute generously to the charities of your choice.
(2) of course it's good to have a high level of disposable income, and of course it's good to keep your money working for you, but for god's sake, doesn't there come a level of capital where you stop borrowing to make more and more?   Say $5M invested over a good range of blue chip stocks would, without leverage, provide a decent income, derived from growth and yield.

So, sure, borrow more if you want more and more and more, but don't come whining when that excessive borrowing without proper monitoring turns your whole investment sour.

Surely it's a case of benefits versus risks.  And the Storm investors didn't worry about the risks when the market was going up. Only when it all fell in a heap did any of them  cry foul about the strategy.



> The bottom line here is all finance people should be accountable and at present they are not and this needs to change.




Agreed.



> Storm financial told their clients that they would sell high and buy low and their investments would be constantly monitored by their team of experts, what a good selling point, and that's what they charged for.  They failed to do any of the things they promised.



Agreed also that they well and truly need to be held accountable for not fulfilling the promise of monitoring and appropriately dealing with the investments.  It seems they simply did not have a strategy for when the market fell.



> There will always be those who know instinctively what to do and what not to do just as there will always be those who have no idea despite trying to learn.




I've always believed anyone can educate themselves financially, but since following this thread, I'm becoming convinced that is not so, that some people will for ever prefer to hand the responsibility for their own financial outcomes over to someone else.  



cuttlefish said:


> I agree Harleyquin.  I don't really see that they are more at fault because they had a lot of money invested.  I do think they were naive to put all of their eggs in one basket and to blindly accept the advice given without considering the risks involved but that applies to all Stormers not just the rich ones. It also sounds like Storm was extremely good at fobbing off peoples concerns and making them feel stupid or ignorant for even questioning things.  It would be devestating to go from a position of reasonable wealth to pennyless.  If other Storm clients are victims then these people are victims too imo.




So Cuttlefish, would there never be a level of wealth that was 'enough' for you?  Where you realised simple blue chip investing, without any leverage, would provide you with all you needed for a comfortable life?
And when that level was reached, why would there be any need to risk it all with excessive leverage?   

I've known some people who lose objectivity about money, who become so addicted to making more and more, to the point where all perspective is lost.
Not saying this is necessarily the case with Storm clients, but it's just a phenomenon I don't understand, particularly when people are at or close to retirement age.



Monario said:


> OK so this rockhampton couple had 8mill, some here are labelling them greedy for trying to gain more..Are you all telling me if you had 8Mill in the bank you would sit back stretch your legs, fold your arms behind your head, and say.. Hmmm thats enough.. Yawn, I think I will stop now... What a load of BS




Well Monario, I simply disagree with you.  I do think there is a level of wealth where the further chasing of more and more money becomes an obsession rather than a need.  That is not to say you would stick it in the bank and forget about it (though I know some people who happily do just that), but rather a level of wealth where you would simply not consider risking it by engaging in massive leverage.  This is where the Stormers all fell over.

Soft Dough has correctly pointed out that had they just invested their retirement savings in good shares, without leverage, even if they had held these through the downturn, they would be gradually returning to previous levels.

I don't use any leverage at all.  Sold my p/f when the downturn happened, lived off the interest easily, am now about 50% back in the market and am about $200K over the previous high in Nov. 2007.
So no one is suggesting you don't actively have your money working for you, rather just that you - after a certain level of achievement - don't take unnecessary risks with excessive borrowing.



Monario said:


> Unfortunately GL I think it is seriously wishful thinking for the pair of them to look at it to much. Even though I do feel this sort of activity is just what the top dogs need to be watching for, and jumping on straight away.. the capitalist system may well be the best system of gonvernment we have yet developed, but it is not a system based on principles where lies and deceit can be used to manipulate the wealthy, or in this case even the poor out of there hard earned.






> And just a note on greed, when a national or multinational company makes money at the ill fortune of it customers and has no remorse in doing so THAT my friends is not only geedy but morally wrong and makes my body shudder.




A completely separate issue which has nothing to do with this thread.



> When an individual is labeled greedy for trying to make there financial future stable through honest means, I think there is some rethinking on behalf of those labelling them needs to be done...




The above statement is a misrepresentation of what was said.
Of course we all want a 'stable' future.   What Bunyip was referring to was the continuing of unreasonable levels of leverage AFTER the stability had been achieved.



> Greed (also called avarice) in psychology is an inordinate desire to acquire or possess more than one needs or deserves, especially with respect to material wealth.




That's a good definition.



> If you work on the above definition of greed, were all greedy. :



No, we are not.   Some of us don't feel the compulsion to acquire more than we need.


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## cuttlefish (24 October 2009)

Maccka said:
			
		

> Cuttlefish, I could be wrong here but I think that many Storm clients believed that they weren't putting all of their eggs into one basket.
> 
> The message I got from any of the seminars I went to talked about the fact that by buying into the Storm funds we would be buying into a diversified portfolio that was made up of the whole range of companies that existed in the ASX 200 (or it may have been the 300 - I didn't get into it so I am not sure). This meant that people were exposed to a range of industrials, mining, financial, property companies etc. So if mining stocks went down, the fund dealt with it by adjusting the fund composition.
> 
> A number of the Storm clients were invested in several managed funds and this would give even more of a feeling of not having eggs all in one basket.





I do understand that - and it would be a reasonable expectation that good tailored financial advice would involve diversity - but by 'One Basket' I mean Storm financial itself.   It would have been sensible to keep a portion of wealth aside and invested in a separate manner and not tied in any way to the investment funds allocated according to Storm's advice.  

Trusting one party with all of your money is always a huge risk - and if it is to be done then it needs to be monitored extremely closely and you'd try to get as many unbiased, independant professional opinions of what you were doing as you could.  That being said, it also sounds like some peoples accountants weren't offering 'independant' opinions because they were getting kickbacks for recommending Storm (which may have even been technically legal but its still shonky behaviour).  

But the best way to avoid being sucked in by shonky behaviour is simply to not put all eggs into one basket.


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## DocK (24 October 2009)

Soft Dough said:


> True,
> 
> I also think most reasonably competent investors would not have forseen CBA pulling the plug on Storm branded index investments.
> 
> ...




Although most storm clients probably felt they didn't have all their eggs in one basket due to the diversification achieved with an index fund, they did have all their eggs in the sharemarket as according to the storm model investment in property was foolish.  Although to be truthful, storm loved to discuss chickens more than eggs - you had to protect those chickens!  Shame a fox has been at my chickens - or maybe it was a black swan that got 'em???

In retrospect, I don't really think it was the gearing that caused the problems, although that was what did for us in the end.  It was the lack of management.  If our portfolios had been managed properly (and yes, we should have managed them ourselves when storm failed to - had we but known) we would have been cashed out of the index funds well before the point where the gearing killed us, and sitting safely on the sidelines waiting for the inevitable recovery to profit on the way back up.  Storm totally failed to manage portfolios and chose instead to blindly hope the cba would continue to back them if the unthinkable happened and the market fell more than their clients gearing could handle - we all know the outcome.

My adviser was manny's son - and yes, I'd dearly love to know if he sold out while simultaneously advising his clients it was an ideal time to invest more while the market was low.


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## Ironhalo (24 October 2009)

Interesting comments on the generational effect this has had noting Storm's referrals were all mostly word-of-mouth. My family has been decimated by this, and we are a family of mostly competent financially informed people!

I never geared any property into my margin loan, but the biggest beef I have is that Colonial approved a pretty much risk free margin loan (that was a long way form margin call when the market dropped over three weeks) but sold us out and left us with an $18k loss three weeks after granting us the loan. We were well within our means to pay, our assets tripled the amount of the margin loan, and we had a 60% buffer before we got margin called. 

But no, we got sold, with no phone call, nothing. My brother and sister (both in their twenties) lost about 70k between them, which consisted of the majority of the inheritence our late father left us. Both of them also didn't get into margin call, but we re sold at a loss for no valid reason. So much for trying to do the right thing.

My mother on the other hand lost in excess of 250k, and she got off lightly noting she has kept her house (paid for on a single income), but her mortgage is back to square one. Her last 15 years of work may as well not have counted.

We are but one family of uni educated people, and between us we have lost in excess of 350k. We all still have smiles, but my heart goes out to the elderly and close-to-retiring people that have lost the lot. 

On the same topic, CBA are fast-tracking their resolution process and my mother will be done and dusted (in terms of knowing what the settlement will be) by Monday night. Hang in there Stormers, things are moving quicker then you would think! I don't want my market losses back (I fully accept them), but I want the cost of them selling my shares without notificiation at the bottom of the market back instead of holding onto them as they were supposed to.

On another note, a member of the CBA resolution team has been trying to call me and my other half to arrange a 'resolution meeting'. I mentioned to the guy that 'we both work full time and can't meet a meeting appointment during business hours over the phone'. His response was, 'well Sir, we aren't allowed to conduct business after 4pm, our management discourage it.' Pretty much sums up their financial/customer policy right there.

The bloody hide....we're working full time to make back the losses their incompetence has left us with....how dare we not be at their beck and call Mon-Fri!


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## Monario (25 October 2009)

Julia said:


> The above statement is a misrepresentation of what was said.
> Of course we all want a 'stable' future.   What Bunyip was referring to was the continuing of unreasonable levels of leverage AFTER the stability had been achieved.




Yes Julia, but what you miss is, none of us "stormers" entered into this stratergy (started out) with these large borrowings and heavy leverage, we ended up this way through continual bad advice and ignorance on behalf of our advisors..

Yes, if anyone started out in this fashion, I would also say you took the gamble, suffer the consequnces, but this is just not the case of how stormers came to their current positions..


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## Monario (25 October 2009)

Julia said:


> No, we are not.   Some of us don't feel the compulsion to acquire more than we need.




I would love to challenge you on that statement, what you material assests are V's what you really need to get by...


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## Harleyquin (25 October 2009)

What keeps coming up in this thread from those of you who have been investing in the share market for some time is the enormous amount of knowledge about how the share market works and investing in general.  I think it is important for those of you who haven't realised it yet that storm clients were primarily naive and we placed all of our faith in a financial advisor thinking of course that we could do that if they had all the right pieces of paper.  Hindsight is a wonderful thing and what we know now and what we knew way back when are two entirely different things.  I don't remember seeing anywhere prior to joining storm where we had to learn so much about investing prior to going to a financial advisor so that we could understand what we were getting into.

This information is taken direct from ASIC *'The Australian Securities and Investments Commission (ASIC) has urged Australians approaching retirement to seek advice from licensed and professional financial advisers, as part of Financial Planning Week. “The decision about when you stop work and how you plan for retirement is one of the most important financial decisions you can make,”*  When you are financially naive and want some help from a financial planner, as we did, this is the advice that ASIC and other experts tell us to do.  I see nothing in this statement that would suggest for one moment that we should have done more than we did so that we could understand fully what we were getting ourselves into.   We sought advice from a licensed, professional financial planner as ASIC suggested and we took their advice, why, because that's what we are encouraged to do to plan for our retirement.  Where have you ever seen it written that you have to fully understand the investment strategies proposed by financial planners before you take their advice.  The storm financial planner that we saw made this investment strategy seem very plausible and they were going to take care of our financial future... 

How many of you who are financially aware use a financial planner - few as far as I can gather.  So then you uses a financial planner - those who are financially naive that's who!  It isn't until something goes horribly wrong as it has in this case that somebody then says 'oh wait a moment you have to understand exactly what you are getting yourselves into before you do this'...well by then it's too late.  Maybe the public need to be educated a little more about financial planning and financial planners, I know there are bound to be some good finance people among the bad apples but how do you find out who they are before it's too late?  I'll be fine from now on I've learnt the hard way this year what I needed to know before going to a planner.  This industry needs cleaning up before there is another disaster.


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## Monario (25 October 2009)

Julia said:


> A completely separate issue which has nothing to do with this thread.




Julia, I dont think it is a seperate issue, there is proof that some national companies have taken advantage in this situation, and what they have done discusts me.. Can you say otherwise of the actions of some of the companies involved...

Maybe you could comment on the lending practices of some of the banks, that knew theses people were, or were close to reitirement but still leant rediculous sums against heavily mortgaged houses etc.


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## Monario (25 October 2009)

Julia said:


> The above statement is a misrepresentation of what was said.
> Of course we all want a 'stable' future.   What Bunyip was referring to was the continuing of unreasonable levels of leverage AFTER the stability had been achieved.




What exactly do you deem as Stable julia? There are members on here, and recently posted in this thread Boasting of a single 3/4 of a Milliion share trade? Would that person be greedy perhaps? I dont see it like that!!

Can you tell me what you think is enough for me please Julia, as this will greatly help my projections of what I will need in retirement.


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## GumbyLearner (25 October 2009)

Monario said:


> What exactly do you deem as Stable julia? There are members on here, and recently posted in this thread Boasting of a single 3/4 of a Milliion share trade? Would that person be greedy perhaps? I dont see it like that!!
> 
> Can you tell me what you think is enough for me please Julia, as this will greatly help my projections of what I will need in retirement.




Yes Monario I agree with your sentiments.

But what about the next doofus who invests?

Should there be a scheme for self-retirees and limits as to their trust in a Fin Planner?

Or should the system go the whole hog and require such fin planner experts pay more in private indemnities insurance to cover potential unforeseen/junkets losses?

The problem is either way you get f###ed with expenses!


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## Garpal Gumnut (25 October 2009)

There are a number of strands in this argument about happiness, greed, fear and remorse that apply to the topic of the Stormers, which perhaps may be better off in another thread, but as Storm Financial is a prime example of capitalism at it's worst a few points may be worth mentioning.


1.  When the bull market was in full swing, not one Storm investor publically questioned the model, whether they are now SICAG members, former advisers or investors.

2.  Many Storm investors made indecent profits through no skill of their own in the bulll market, but rather through a model which Manny charged 7% or more for , and at the time they felt justified in paying.

3.  Many Storm investors were so taken by their unearned largesse that they went on overseas trips with Manny and Julie, to expensive destinations, and spent much money on vanity and show. They bragged of their "skill" in choosing such a model and tried to convince friends and family to join the circus. Many succeeded.

4.  Blind Freddie could have predicted that the whole show could become undone one day, but greed kept the Stormers loyal to the model. They are not alone in this, many investors on this forum , myself included could have gone to cash much earlier than they did.  

5.  Fear crept in late last year, when Storm, the advisers, principals and Banks lost the plot during an unprecedented, at least in our lifetime, bearmarket.

6.  As many humans do, when greed leads to fear, and wealth and happiness are replaced by penury another emotion sets in. Remorse. The Stormers are angry, at themselves, their advisers, and those who escaped their fate, and anyone who points out the reality of the poor choices they made.

7.  From the Tulip bubble, to the railroad failures in the US, to the Great Depression, to Ponzi, Pyramid, Skase, Bond and Cassimaties, this will be repeated in the future. It is in our nature to be foolish about money and possessions.

8.  It cannot be legislated away without great expense to investors, and it is the muppets who will bear most of the expense as independent investors will continue to do a Bradbury behind the braying mob, without the expense of advisers.

9.  When it comes down to it all, it is only money. And many are too attached to money, equating it with happiness. Penury or poverty, the complete lack of housing, food, safe water, health and safety are much more prevalent in third world countries than they are in Australia.

They are my thoughts on it anyway.

So, it now remains to be seen how much can be clawed back from those with the biggest pockets, Banks, Insurances and the Cassimatises and Advisers.

But believe me, no matter how much legislation, it will happen again.


gg


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## Solly (25 October 2009)

*"CBA state regional manager steps down"*

"THE Commonwealth Bank's state regional general manager John Hoey has resigned after 40 years with the bank.

The bank last night denied the announcement had anything to do with its involvement in the Storm Financial scandal....

...The Storm Investors Consumer Action Group called on Commonwealth Bank CEO Ralph Norris to be frank when he appeared before a parliamentary inquiry in Canberra on Wednesday."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/10/24/88901_news.html


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## cuttlefish (25 October 2009)

Garpal Gumnut said:


> There are a number of strands in this argument about happiness, greed, fear and remorse that apply to the topic of the Stormers, which perhaps may be better off in another thread, but as Storm Financial is a prime example of capitalism at it's worst a few points may be worth mentioning.
> 
> 
> 1.  When the bull market was in full swing, not one  ...
> ...




All very good points GG.


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## cuttlefish (25 October 2009)

Julia said:


> So Cuttlefish, would there never be a level of wealth that was 'enough' for you?  Where you realised simple blue chip investing, without any leverage, would provide you with all you needed for a comfortable life?
> And when that level was reached, why would there be any need to risk it all with excessive leverage?
> 
> I've known some people who lose objectivity about money, who become so addicted to making more and more, to the point where all perspective is lost.
> Not saying this is necessarily the case with Storm clients, but it's just a phenomenon I don't understand, particularly when people are at or close to retirement age.




Julia - its an interesting philosophical question and in trying to put together a response I ended up writing a short novel so I will attempt to keep it a bit more brief. To me people chase wealth for three primary reasons - security, freedom and power - and often the extent of each of these is limited only by the imagination and thus situations will vary from individual to individual. 

For one individual security might be a comfortable home and a self sustaining income that  provides for a comfortable lifestyle. Another person may not feel secure until they have a fortress with back to base security, a 24 hour armed body gaurd, a small plot of land that they can use for self subsistance in the event of a total collapse of the financial system,  alternative safe havens in 5 different countries and a bomb shelter below their home.  

 Some people may consider freedom to be having enough income to take a camping trip up the coast once a year and pay the registration on the fishing tinny.  For others it will be the freedom to travel to any given destination of their choosing at any time, eat whereever they feel like, visit whatever attractions they want to, and stay in whatever accomodation they want. 

I agree that people can become obsessed - wealth can bring about its own challenges for people - both in terms of fear and greed as it can amplify both emotions - but I don't see that people that have accumulated wealth (wealth is such a relative term anyway - I doubt a New York or London resident with $3 million AUD would be considered particularly wealthy in that scenario) should be judged any differently in terms of the mistakes they may or may not have made in relation to Storm.

If a couple became wealthy through hard work building a business, then sold it all up and wanted to take a break to enjoy the fruits of their success but didn't consider themselves financially savvy - then it seems like a reasonable step to approach a licensed financial planner that appeared to have good credentials, a good track record,  was  fully licensed, recommended by other succesful and intelligent people, was supported by the banks, and implying that they have good risk controls in place and provided tailored solutions. 

I can see how they could have fallen into the trap of letting that organisation manage all of their money.   I still think that putting all off their eggs in one basket is naive, and that the excessive gearing should have raised alarm bells in anyone, but it sounds like Storm did a good job of making it all sound very safe and very much the normal practice for 'succesful' investors.  Throw in a year or two of good results and complacency would easily set in as well.

So just as it did for the less wealthy Stormers, I can see how it all could have happened to this couple in pretty much the same way.


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## Harleyquin (25 October 2009)

They are very good points GG and I for one will take them on board.  There are many who joined storm in 2007 and afterwards who never experienced any of the upswings or other perks mentioned, in our case we didn't find out about the extras until we'd joined, we were just told they were very good to deal with.  You are right though even with legislation it will happen again.  Education hopefully will help to prevent it every becoming quite the problem that this one has.  We all like the idea of becoming financially independent.  That independence not only gives us the security that most of us have never had but also gives us the options to enjoy life a little fuller into retirement.  I think you mentioned in a earlier post that financial education should start in school and I would agree wholeheartedly with that point.  

When we went to school we learnt by rote, nowdays students are taught to be independent thinkers, to question, to take risks and to be responsible for their decisions, this type of education they say is perferable in the long term to the old system where they didn't expect you to think just to learn like sheep.  We are already seeing the younger generation question and discuss anything they decide to do far more than many of our generation did and it's one of the pluses.

The margin loan, the level of gearing, the lack of diversification, never 'growing and working' our portfolios as they said they would, never monitoring are all factors which have contributed to this disaster, and add to that pure criminal activity if the evidence coming out in court is an indicator and it's an exposive mix.  If jail for the Cassimatis' makes future Cassimatis' think twice about doing the same thing it may help.


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## DocK (25 October 2009)

Garpal Gumnut said:


> There are a number of strands in this argument about happiness, greed, fear and remorse that apply to the topic of the Stormers, which perhaps may be better off in another thread, but as Storm Financial is a prime example of capitalism at it's worst a few points may be worth mentioning.
> 
> 
> 1.  When the bull market was in full swing, not one Storm investor publically questioned the model, whether they are now SICAG members, former advisers or investors.



If you went ahead with storm because you'd attended their "education seminars" and had been convinced the model was a good strategy - why would you question it when it was doing what you'd been promised.  Many people who sought advice from various other financial planning firms were following essentially the same strategy and achieving similar results.  Why question something that appears to be working just fine?  I believe the major cause of my current pain is in not managing the investment properly - ie. cashing out when the market turned down.  During the full swing of the bull market this was not yet an issue, therefore not to be questioned at that time.



Garpal Gumnut said:


> 2.  Many Storm investors made indecent profits through no skill of their own in the bulll market, but rather through a model which Manny charged 7% or more for , and at the time they felt justified in paying.



I wish I was one of them, but unfortunately I began with storm just a few months prior to the beginning of the downturn.  Many investors, via storm or not, made indecent profits through no skill of their own in the bull market.  People with skill presumably made more - I have absolutely no problem with that, if you acquire the skill you deserve to be rewarded for your efforts imo.  Personally, I felt justified in paying a financial planner to build my wealth for me as I am used to paying for professionals to do a job that I am unable/unwilling to do  myself - I pay my accountant to manage tax affairs, my doctor to advise on health matters, my dentist to clean my teeth etc.  In hindsight I realise I was paying way too much for basically a simple model - my bad for not doing better research at the time.  I am one of the many who knew people who had done very well through storm and followed personal recommendations from intelligent, trusted friends, without doing enough research of my own.  



Garpal Gumnut said:


> 3.  Many Storm investors were so taken by their unearned largesse that they went on overseas trips with Manny and Julie, to expensive destinations, and spent much money on vanity and show. They bragged of their "skill" in choosing such a model and tried to convince friends and family to join the circus. Many succeeded.



You could also say that many storm investors were so thrilled that the funds they'd worked hard most of their lives to earn were getting such a good return that they could take an overseas holiday.  I know many, many people who have taken overseas holidays and see nothing wrong or shameful in this.  You work hard, you save, you invest, you earn - why not reward yourself if you can afford it - and at the time these people thought they could.  I know some who went on these holidays - and I would certainly not say they are the type of people to spend money on vanity and show - they simply love to travel wherever they can, yet are strangely overly frugal in other areas of their lives.  Everyone has different priorities.  I've no doubt some storm clients bragged of their skill, but this would be typical of the population at large, not simply storm clients.  I have friends who loved to brag about how well they'd done also - but they were with a different firm altogether (and incidentally also received a margin call).  It is human nature to want to share with friends and family anything that is seen as positive in your life - my storm friends genuinely believed the advice they were getting was fantastic and wanted to spread the joy! 



Garpal Gumnut said:


> 4.  Blind Freddie could have predicted that the whole show could become undone one day, but greed kept the Stormers loyal to the model. They are not alone in this, many investors on this forum , myself included could have gone to cash much earlier than they did.



It may have been greed in some cases, but in most I think it was more that the vast majority of storm clients were very used to being told what to do, and when, and trusted that the advisers that had looked after them well in the good times would continue to advise them well in the bad.  Possibly more a case of not having the knowledge oneself and relying on those we thought did have the expertise to look after our best interests (and not just their own).  As you acknowledge, many hung on a little longer than they should have in the hopes that the market would change direction - whether this was through greed, fear, uncertainty, sheer ignorance or blind hope will vary from case to case.  In the case of most stormers, Blind Manny & Julie were the ones who had promised constant monitoring and clearly failed to act when they should have (as did we, the clients, in not taking control ourselves).  Whether they did this through greed, fear, ignorance, blind hope or a mistaken belief in the strength of their relationship with their bankers is a question we will hopefully get some answers to.....  I suspect the answer is a combination of all, with a liberal dose of ego thrown in.



Garpal Gumnut said:


> 5.  Fear crept in late last year, when Storm, the advisers, principals and Banks lost the plot during an unprecedented, at least in our lifetime, bearmarket.



Agree - but I would probably say terror rushed in.



Garpal Gumnut said:


> 6.  As many humans do, when greed leads to fear, and wealth and happiness are replaced by penury another emotion sets in. Remorse. The Stormers are angry, at themselves, their advisers, and those who escaped their fate, and anyone who points out the reality of the poor choices they made.



Yes, guilt and anger are widespread.  And not restricted to ex-stormers.  The anger is deserved by some - ourselves, our so-called advisers, our bankers in a lot of cases.  I'm not sure most of us are angry at anyone who escaped our fate, but most of us don't appreciate being labelled as "greedy fools who deserved what they got" and the like.  It's also quite difficult to remain calm in the face of some patronising comments from would-be know-it-alls who think their way is the only way and cannot understand why anyone would take any risks with investments at all.  I say - to each their own.  There are many ways to skin a cat and to gear or not to gear is an individual choice depending upon circumstances and risk appetite.  Certainly it was not a wise strategy for many that it was recommended to, but was an appropriate and valid strategy for others.  If it had been managed properly, the gearing itself would not have been the issue.  

Guilt is also something that is hard to shake.  Guilt that we've deprived our children of the futures we'd planned for them, and the opportunities that they must now miss because we cannot afford them any longer.  Guilt that we were too gullible/trusting/foolish/whatever to do more research ourselves.  Guilt for being taken advantage of by storm/bank.  Shame for being so easily conned.  These feelings are fruitless in the end and will serve no useful purpose.  The anger, if properly directed, might.  It is an uphill battle to shake off the guilt, but is something that most ex-stormers must try to do if they are to move forward with their lives.



Garpal Gumnut said:


> 7.  From the Tulip bubble, to the railroad failures in the US, to the Great Depression, to Ponzi, Pyramid, Skase, Bond and Cassimaties, this will be repeated in the future. It is in our nature to be foolish about money and possessions.



Agree.  Nothing will change until future generations are better educated and far more financially savvy than the average Aussie is today.  I wish I had the answer, but sadly I do not, and am inclined to believe there isn't one.  



Garpal Gumnut said:


> 8.  It cannot be legislated away without great expense to investors, and it is the muppets who will bear most of the expense as independent investors will continue to do a Bradbury behind the braying mob, without the expense of advisers.



Agree, but I dislike the use of "muppet" as I find it quite derogatory and condescending.  Education is the key, but some key changes to the financial planning industry, such as transitioning trailing commission based advice to fee-for-service could only help imo.



Garpal Gumnut said:


> 9.  When it comes down to it all, it is only money. And many are too attached to money, equating it with happiness. Penury or poverty, the complete lack of housing, food, safe water, health and safety are much more prevalent in third world countries than they are in Australia.
> 
> They are my thoughts on it anyway.




Whilst acknowledging that ex-stormers are indeed far better off than most third world citizens, I suspect it is much easier to claim people are too attached to money and possessions when one has them.  Money might not ensure happiness, but I'm willing to be experimented upon to see what effect might have on me 



Garpal Gumnut said:


> So, it now remains to be seen how much can be clawed back from those with the biggest pockets, Banks, Insurances and the Cassimatises and Advisers.
> 
> But believe me, no matter how much legislation, it will happen again.
> 
> ...




Sadly, have to agree.  The more it changes, the more it stays the same.  I'm ever hopefuly that some compensation may one day materialise from somewhere for at least the most affected in this whole debacle - the elderly and retired who don't have the option to work their way out of trouble.


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## mellifuous (25 October 2009)

DocK said:


> Agree.  Nothing will change until future generations are better educated and far more financially savvy than the average Aussie is today.  I wish I had the answer, but sadly I do not, and am inclined to believe there isn't one.




This idea that 'education will protect' is interesting - what education would have helped storm clients? and how would it have helped? (if you don't mind answering the questions).

As I understand it (and please correct me if I'm wrong), the model used by storm was not unique to storm - so, if true, then wasn't it a systemic failure within storm / lenders that led to the losses? - and if this is true, I fail to see where education would have been helpful.

I'm not a storm investor, my losses are elsewhere - ASIC has been pressing 'education' as the 'inoculation' for investors to protect against losses - but, isn't it the truth that education is useless unless ASIC acts proactively against self-interest, breach of law, incompetence, negligence, and criminal behavior?


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## DocK (25 October 2009)

mellifuous said:


> This idea that 'education will protect' is interesting - what education would have helped storm clients? and how would it have helped? (if you don't mind answering the questions).
> 
> As I understand it (and please correct me if I'm wrong), the model used by storm was not unique to storm - so, if true, then wasn't it a systemic failure within storm / lenders that led to the losses? - and if this is true, I fail to see where education would have been helpful.
> 
> I'm not a storm investor, my losses are elsewhere - ASIC has been pressing 'education' as the 'inoculation' for investors to protect against losses - but, isn't it the truth that education is useless unless ASIC acts proactively against self-interest, breach of law, incompetence, negligence, and criminal behavior?




I don't know that education will ever entirely protect everyone from being taken by scams, con-artists, the unethical etc, but my own personal losses would certainly have been less if I had the knowledge then that I have now.  True, the model used by storm wasn't unique at all, but other investors did not suffer losses to the same extent due in many cases to better management by their advisers, and less predatory behaviour by their advisers/lenders combined.

Purely from my own perspective, I think a better financial education would have helped me in the following ways:

1.  I would have been aware that I could very easily do for myself what storm charged me 7% to do, using either managed index funds via vanguard, or and index-based lic such as STW or Argo, Aust Found etc.  Gearing optional, but easily arranged via a plethora of margin lenders.

2.  I would have been aware of the cyclical nature of the sharemarket and been on the lookout for any black swans on the horizon.  I may not have got out of the market as early as I should have, but I would have got out a lot earlier than I did.  Much capital could have been preserved and put back to work in March/April, rather than the little I was left with.

3.  I would have known what a stop-loss was, how they worked and why they can often save your hide!  

4.  I would have seen storm's operation and lack of managemet for what it was.  I would not have been as gullible as I was.

5.  I would have had the confidence to manage my own affairs, and possibly would have spread my capital between the sharemarket and property investment, instead of all in shares.  

6.  I doubt I would have been able to obtain the amount of debt from cba that I did if I were not affiliated with storm.  This is irrelevant to the topic of education in a way, but had I known more before I went to the first storm seminar I would not have gone back for a second, hence less borrowing etc.

I agree that ASIC certainly need to be more proactive, rather than the reactive toothless tiger they appear to be at present.  But I also feel that a better financial education would not only help people be better able to manage their own affairs with expert advice sought where necessary, but would more importantly enable them to see  a lot of the money-grabbing schemes such as storms for what they are.  Possibly more important yet, if more young people realised the importance of getting a good start on investing at an early age, there would be less desperate middle-aged folk worried about surviving on the pension for the vultures to prey on.  If there has been anything positive for me to find in my situation, it is that my kids will be a hell of a lot better prepared than I was.  I'll be doing everything I can to make sure they never make the same mistakes their parents did.


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## Julia (25 October 2009)

Monario said:


> Maybe you could comment on the lending practices of some of the banks, that knew theses people were, or were close to reitirement but still leant rediculous sums against heavily mortgaged houses etc.



No, I couldn't because I don't have first hand information about how any inappropriate lending happened.  Nowhere on this thread has anyone (that I have seen) clearly known whether (a) the banks acted on information provided to them by Storm who in turn had apparently been given authority to act as the clients' agents, or (b) the banks altered information themselves.

I'd have liked to think that banks would ensure a loan was within the capacity of the borrower, but in reality I suppose if they have adequate collateral in the form of property, then they don't care.  This should be role of the financial adviser, and it's fairly clearly one of the areas where Storm failed their clients.




Monario said:


> What exactly do you deem as Stable julia? There are members on here, and recently posted in this thread Boasting of a single 3/4 of a Milliion share trade? Would that person be greedy perhaps? I dont see it like that!!



Not up to me to comment on the above share trade.  If that person has a level of wealth that makes such a trade appropriate, then that is his business.
He is not complaining about anyone or anything, just stating what may or may not be a fact about his own business.




> Can you tell me what you think is enough for me please Julia, as this will greatly help my projections of what I will need in retirement.



No.  That is not my job.  There are plenty of avenues which will offer you this information if you insert the bits of information.  If you sincerely are looking for such projections, I'd suggest you start with the ASIC website.



Garpal Gumnut said:


> The Stormers are angry, at themselves, their advisers, and those who escaped their fate, and anyone who points out the reality of the poor choices they made.



Yes.  


DocK said:


> hindsight I realise I was paying way too much for basically a simple model - my bad for not doing better research at the time.  I am one of the many who knew people who had done very well through storm and followed personal recommendations from intelligent, trusted friends, without doing enough research of my own.



And it would have been difficult to see that the people who had done so well had done so because, as gg has pointed out, they were in a bull market when obviously the gearing worked brilliantly.



> It may have been greed in some cases, but in most I think it was more that the vast majority of storm clients were very used to being told what to do, and when, and trusted that the advisers that had looked after them well in the good times would continue to advise them well in the bad.



This is a really good point and relates also to what I said earlier about some people always depending on someone to advise them, a reluctance to acquire their own financial education, or perhaps just not enough faith in themselves and their capacity to look after their own finances, believing perhaps that it's way more difficult than it really is.



> In the case of most stormers, Blind Manny & Julie were the ones who had promised constant monitoring and clearly failed to act when they should have (as did we, the clients, in not taking control ourselves).  Whether they did this through greed, fear, ignorance, blind hope or a mistaken belief in the strength of their relationship with their bankers is a question we will hopefully get some answers to.....  I suspect the answer is a combination of all, with a liberal dose of ego thrown in.



You're right, I'm sure.  This is absolutely where Manny and Julie need to be absolutely accountable in that they had apparently promised constant monitoring.




> It's also quite difficult to remain calm in the face of some patronising comments from would-be know-it-alls who think their way is the only way and cannot understand why anyone would take any risks with investments at all.  I say - to each their own.  There are many ways to skin a cat and to gear or not to gear is an individual choice depending upon circumstances and risk appetite.



Agree.  No one is saying gearing should or should not be used, rather that if you are going to use high levels of leverage then don't consider that it's a risk free strategy.  And yes, I have questioned why anyone would want to risk all they have built up over their whole lives, when that is already enough by all objective measures, to make more and more and more.
But perhaps I'm just risk averse. 


> Guilt is also something that is hard to shake.  Guilt that we've deprived our children of the futures we'd planned for them, and the opportunities that they must now miss because we cannot afford them any longer.  Guilt that we were too gullible/trusting/foolish/whatever to do more research ourselves.  Guilt for being taken advantage of by storm/bank.  Shame for being so easily conned.  These feelings are fruitless in the end and will serve no useful purpose.  The anger, if properly directed, might.  It is an uphill battle to shake off the guilt, but is something that most ex-stormers must try to do if they are to move forward with their lives.



DoCK, you make a lot of sense, as usual.  Guilt is one of the most useless and unproductive of all human emotions imo, but as you say it's very difficult to shake off.

There seems to be some sense that Stormers are the only people who have ever fallen victim to a con artist.  gg has pointed out some of the better known historical scams, eg the tulip bubble.
I'd say most people have been at some stage given bad advice.
I first started in the share market via a full service broker, in the belief as shown by Stormers, that in exchange for the hefty brokerage, I would receive expert advice about what shares to own.  They made 12 recommendations which I followed.  This was in a bull market.
At the end of a year, ten of these 12 had lost me money, some considerable amounts.  When I had questioned the falling SP, I was offered the reassurance that 'oh, it's just a bit of temporary volatility" etc etc.
So I decided I couldn't do a worse job myself, having during this year picked up a bit from simply being exposed to the market.  
I'd just say that many full service brokers are serving their own ends rather than that of their small clients.

And, as I've also said earlier in this thread, I was conned by a shonky lawyer and lost quite a lot of money there too.  Didn't help my financial situation at the time that he was disbarred and fined.

So, Stormers, you're not the only people who have experienced bad advice.
You all have your own ways of handling what has happened.  I found that yes, I was angry for a while, but recognised the futility of that, and worked on finding a way to get out of the mess and move on.

People are all different, I guess, but I've never known anyone who has benefited from continuing to go over and over either the anger or the guilt/remorse.  What has happened has happened, and seeking strategies for the future is surely going to be more productive.


> Agree.  Nothing will change until future generations are better educated and far more financially savvy than the average Aussie is today.  I wish I had the answer, but sadly I do not, and am inclined to believe there isn't one.



There is a heap of free education out there.  People just have to take advantage of it.
The Youth Mentoring Programme of which I'm part have offered a financial education programme to the local high schools.  No response.  I suppose the curriculum is already overcrowded.  



> Agree, but I dislike the use of "muppet" as I find it quite derogatory and condescending.  Education is the key, but some key changes to the financial planning industry, such as transitioning trailing commission based advice to fee-for-service could only help imo.



Agree about trail commissions.  On education, the ASX website, E-trade website, both have good education about how the share market works.
ASIC and the ATO have various educational facilities.



> Whilst acknowledging that ex-stormers are indeed far better off than most third world citizens, I suspect it is much easier to claim people are too attached to money and possessions when one has them.  Money might not ensure happiness, but I'm willing to be experimented upon to see what effect might have on me



Well, I can't win, can I!  In other threads, I've been jumped on for saying happiness and absolute poverty don't go together, and that a minimum level of income is necessary to prevent anxiety and a sense of insecurity.


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## Garpal Gumnut (25 October 2009)

DocK said:


> I don't know that education will ever entirely protect everyone from being taken by scams, con-artists, the unethical etc, but my own personal losses would certainly have been less if I had the knowledge then that I have now.  True, the model used by storm wasn't unique at all, but other investors did not suffer losses to the same extent due in many cases to better management by their advisers, and less predatory behaviour by their advisers/lenders combined.
> 
> Purely from my own perspective, I think a better financial education would have helped me in the following ways:
> 
> ...




Excellent post mate.

It should be a reference point for every new member of asf.

gg


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## mellifuous (25 October 2009)

DocK said:


> I don't know that education will ever entirely protect everyone from being taken by scams, con-artists, the unethical etc, but my own personal losses would certainly have been less if I had the knowledge then that I have now.  True, the model used by storm wasn't unique at all, but other investors did not suffer losses to the same extent due in many cases to better management by their advisers, and less predatory behaviour by their advisers/lenders combined.
> 
> Purely from my own perspective, I think a better financial education would have helped me in the following ways:
> 
> ...




Thank you very much for taking the time to post such a thoughtful post.

It seems we agree on two issues, (1) that the system was not unique to storm, and (2) loses by those in the other investments using the system did not suffer such losses.

Yes, it seems that there are things to learn in order to avoid some behaviors by managers, but doesn't that come down to regulation?

I guess what I'm trying to say is this - there should be certification process on systems such as the one used by storm -  (1) the lending process (eg. margin loans), (2) the investment process, and (3) the protection process (eg. margin calls).  

If there such a verification by some (suitably insured and registered) independent entity, then wouldn't that avoid the need for a great deal of independent learning? After all, not everyone makes it to the top of the class.

I invested in City Pacific's FMF and I think my investment was decimated because of a systemic failure too.   Simply put, the manager was allowed to enter into transaction that were downright unbelievable.

I think the reality is that ASIC is no more than a 'paper pusher'.  I am aware from a letter received from ASIC, that ASIC regards my losses in the FMF as arising from my (poor) choice of investment, my prudential choice (as they put it).

I wouldn't be surprised if they thought likewise of yours.

I also think the corporations act is way of date and needs to be seriously modernized post-haste in light of events these past two years.

Again, thanks for taking the time to explain - I really appreciate it.


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## cuttlefish (25 October 2009)

DocK said:
			
		

> Guilt is also something that is hard to shake. Guilt that we've deprived our children of the futures we'd planned for them, and the opportunities that they must now miss because we cannot afford them any longer. Guilt that we were too gullible/trusting/foolish/whatever to do more research ourselves. Guilt for being taken advantage of by storm/bank. Shame for being so easily conned. These feelings are fruitless in the end and will serve no useful purpose. The anger, if properly directed, might. It is an uphill battle to shake off the guilt, but is something that most ex-stormers must try to do if they are to move forward with their lives.




I've said this a few times in this thread and I don't direct this to you in particular, but to anyone coping with trauma - a really important aspect, after digesting and accepting your responsibilities in whole or part for the situation that unfolded- is also to forgive yourself.  

Also, in terms of depriving your children of something - I'm not sure what age they are - but although this has taken away the opportunity to provide the financial gifts you may have been hoping to bestow on your children there is another opportunity to give them a gift by showing leadership in how you accept and cope with your own circumstances and related guilt and depression and strive forward nonetheless.  

It will sound like a cliche - but many many children have parents that take little responsibility and provide little in the way of love, care, moral guidance or leadership - so being in a position to still being able to provide these things is incredibly important and in terms of a contribution to their lives will always far outweigh any financial contributions.


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## -Bevo- (25 October 2009)

DocK said:


> 1.  I would have been aware that I could very easily do for myself what storm charged me 7% to do, using either managed index funds via vanguard, or and index-based lic such as STW or Argo, Aust Found etc.  Gearing optional, but easily arranged via a plethora of margin lenders.




Excellent Dock appears people are beginning to get the idea what can be done, even if you Geared with a margin lender Stormers would have certainly been forced out of the market much sooner. 

You could also add Index Futures to the above which will give you the ability to profit from Bear markets.


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## DocK (25 October 2009)

cuttlefish said:


> I've said this a few times in this thread and I don't direct this to you in particular, but to anyone coping with trauma - a really important aspect, after digesting and accepting your responsibilities in whole or part for the situation that unfolded- is also to forgive yourself.
> 
> Also, in terms of depriving your children of something - I'm not sure what age they are - but although this has taken away the opportunity to provide the financial gifts you may have been hoping to bestow on your children there is another opportunity to give them a gift by showing leadership in how you accept and cope with your own circumstances and related guilt and depression and strive forward nonetheless.
> 
> It will sound like a cliche - but many many children have parents that take little responsibility and provide little in the way of love, care, moral guidance or leadership - so being in a position to still being able to provide these things is incredibly important and in terms of a contribution to their lives will always far outweigh any financial contributions.




My kids are just entering those horrid teenage years where they "expect" they should be able to have/do everything their mates have/do.  I regret that they will have to miss some holidays away with the extended family and we are unable to afford for them to take up some educational opportunities, but we're managing to keep them in their nice private school so far.  In a way I know it'll be good for them to do without a bit and might just save them from being spoilt little brats like some of their friends.  It didn't do me any harm to grow up doing without, so they'll live.  I had intended for them to be able to go through uni without hex debts though, and this may now not be an option.  Again, many others cope, so will they.

It took me a little while to get over the guilt, but it solves nothing in the end.  Getting the education through reading everything I can get my hands on has at least given me the knowledge, ability and confidence to get my remaining capital working for me - and this will go much further to getting me out of the #### than any amount of guilt or self-pity. 

I was recently told the wife of an old school friend has just been diagnosed with cancer and faces several months of chemo, having just been through surgery, with little likelihood of a good outcome.  They have two young daughters.  You don't have to think too hard to realise that things could be much, much worse and there is still an awful lot in life to be thankful for.

I'd urge other ex-stormers to try to look forward, rather than backward.  It's all too easy to become stuck in a rut of anger, self-pity and hopelessness.  I know some have no idea how to move forward, and a huge issue for most ex-stormers is not being able to trust advice from anyone, or not knowing where to start.  There have been several good suggestions on this forum.  Some have a huge task ahead of them, but as the old cliche goes "the best way to eat an elephant is one mouthful at a time".  You just have to start.

None of the above means we can't look forward to the various parties we feel have wronged us getting what's coming to them though - I still have a healthy serving of anger simmering away on the back-burner


----------



## Judd (25 October 2009)

DocK said:


> My kids are just entering those horrid teenage years where they "expect" they should be able to have/do everything their mates have/do.




All other aspects aside, probably a wonderful opportunity for them to learn the full impact of the phrase "And what part of NO don't you understand."


----------



## DocK (25 October 2009)

Judd said:


> All other aspects aside, probably a wonderful opportunity for them to learn the full impact of the phrase "And what part of NO don't you understand."




The bit that doesn't go "OK son, you go ahead and do whatever you want", or the bit that goes "sure, just help yourself to my wallet/credit card and go for it!".  The best request I've had so far is for us to sell Mr Thirteen's younger brother so he could have his own bedroom, plus his own "playroom" complete with widescreen plasma, WII, PSP, surround-sound stereo etc, just like his mate (who happens to be an only child).  When it was suggested that his mate might prefer a sibling to muck about with rather than all his techno toys we were met with "yeah, right! Whatever!"  He does love him deep down though, I think....., maybe????? (gulp)

Gotta love 'em.....


----------



## Ironhalo (25 October 2009)

DocK, my mother said to me 'I put you through 12 years of private school, but there is no way I will be paying your HECS'. 

I'm glad she didn't, considering how many kids drop out of first year uni, they are better off paying for it themselves when they are earning good money down the track....at least they have a reason not to fail uni that way!


----------



## DocK (25 October 2009)

Ironhalo said:


> DocK, my mother said to me 'I put you through 12 years of private school, but there is no way I will be paying your HECS'.
> 
> I'm glad she didn't, considering how many kids drop out of first year uni, they are better off paying for it themselves when they are earning good money down the track....at least they have a reason not to fail uni that way!




True, true, but I was kinda hoping that if I paid their way through uni I could forever remind them of my generosity when I'm an even older, crankier and more feeble-minded version of my current self, and guilt them into taking care of me in my old age


----------



## cuttlefish (25 October 2009)

DocK said:


> True, true, but I was kinda hoping that if I paid their way through uni I could forever remind them of my generosity when I'm an even older, crankier and more feeble-minded version of my current self, and guilt them into taking care of me in my old age





Very glad to see that you blokes can still manage a smile amongst all of this  , and good comments in your post 5 back from this one DocK.


----------



## bunyip (25 October 2009)

Garpal Gumnut said:


> There are a number of strands in this argument about happiness, greed, fear and remorse that apply to the topic of the Stormers, which perhaps may be better off in another thread, but as Storm Financial is a prime example of capitalism at it's worst a few points may be worth mentioning.
> 
> 
> 1.  When the bull market was in full swing, not one Storm investor publically questioned the model, whether they are now SICAG members, former advisers or investors.
> ...



*

Garpal

I agree with most of your points above. 
However, I wonder why you claim in Point 5 that the 2008 bear market was unprecedented in our lifetime.
The magnitude of the plunge in the 1987 crash was similar to that which occurred in 2008.....both about 50%
However, the big difference between the two crashes was.....

2008 crash.....took 17 months from top to bottom (November 07 to March 09)
1987 crash....took less than 8 weeks from top to bottom (September 87 to November 87) and fell 25% in one day on 20/10/87

Severe though the 2008 crash was, it was mild compared to 1987 in terms of how fast the market fell.
2008 offered plenty of opportunities to make a timely exit from the market before it fell to portfolio-destroying levels. 1987 did not.

Cassamatis has repeatedly tried to hide behind the excuse that this bear was unprecedented. It's simply not correct.*


----------



## Garpal Gumnut (25 October 2009)

bunyip said:


> Garpal
> 
> I agree with most of your points above.
> However, I wonder why you claim in Point 5 that the 2008 bear market was unprecedented in our lifetime.
> ...




bunyip, mate, they are reasonable comments with which I agree.

gg


----------



## Harleyquin (25 October 2009)

*Cassamatis has repeatedly tried to hide behind the excuse that this bear was unprecedented. It's simply not correct.* Bunyip I firmly agree with this comment on Cassimatis and the entire storm team they had plenty of time to make sure we were protected.  All finance people knew this was coming at the end of 07.  They knew about the sub prime lending even earlier than that and if they had their finger on the pulse would have been able to forecast that this wouldn't do the world share market any favours.  Storm adopted the policy of 'don't follow the herd' however they also adopted the policy of 'sell high buy low' and were borrowing huge sums as the market was dropping.  It makes far more sense to me, an inexperienced investor, to sell off as the market was dropping, wait for the drop to bottom out and then jump back in.  With a little bit of common sense of their part all of this could have been averted.    I enjoyed reading your post too Dok and the six major points that you have raised thank you.


----------



## cuttlefish (25 October 2009)

Harleyquin said:


> *Cassamatis has repeatedly tried to hide behind the excuse that this bear was unprecedented. It's simply not correct.* Bunyip I firmly agree with this comment on Cassimatis and the entire storm team they had plenty of time to make sure we were protected.  All finance people knew this was coming at the end of 07.  They knew about the sub prime lending even earlier than that and if they had their finger on the pulse would have been able to forecast that this wouldn't do the world share market any favours.  Storm adopted the policy of 'don't follow the herd' however they also adopted the policy of 'sell high buy low' and were borrowing huge sums as the market was dropping.  It makes far more sense to me, an inexperienced investor, to sell off as the market was dropping, wait for the drop to bottom out and then jump back in.  With a little bit of common sense of their part all of this could have been averted.    I enjoyed reading your post too Dok and the six major points that you have raised thank you.




Harleyquin - this sort of wisdom is always easy in hindsight - the reality is that the future direction of markets is simply not 100% predictable.  There might be rules that can be applied that make sense - but nobody consistently picks tops or bottoms.  The mistake is not in failing to predict what the market may or may not do - the failing is on two fronts

 - (1: ) (and the biggest failing in my opinion) over leveraging clients that were risk averse and  - 

- (2: ) failing to _react _to what the market was doing. (as opposed to what it might do).

But No. 1 amplifies, in a life changing way, the impact of No. 2.


----------



## bunyip (25 October 2009)

Monario said:


> In reference to some of the past posts:
> 
> OK so this rockhampton couple had 8mill, some here are labelling them greedy for trying to gain more..Are you all telling me if you had 8Mill in the bank you would sit back stretch your legs, fold your arms behind your head, and say.. Hmmm thats enough.. Yawn, I think I will stop now... What a load of BS




No, that's not what I'm telling you, nor did I claim anything of the kind in my post about the Rockhampton couple.

So how about you stop misrepresenting what I said, and read my post again.

What I said was that wealthy people, rather than risking all their wealth by gearing heavily into the stockmarket, would be more prudent to invest at least some of their funds in growth assets like residential real estate.

I gave an example that showed how 5 million dollars of an 8 million dollar fortune could be safely and conservatively invested in growth assets to produce a yearly income of a quarter of a million dollars, and average yearly growth of half a million dollars, giving a total return of 15% a year.

I clearly stated my view that you'd be a fool not to try and make your money grow, rather than leave it in the bank where there's no capital growth and its value is eroded by inflation.


----------



## Julia (25 October 2009)

cuttlefish said:


> Julia - its an interesting philosophical question and in trying to put together a response I ended up writing a short novel so I will attempt to keep it a bit more brief. To me people chase wealth for three primary reasons - security, freedom and power - and often the extent of each of these is limited only by the imagination and thus situations will vary from individual to individual.
> 
> For one individual security might be a comfortable home and a self sustaining income that  provides for a comfortable lifestyle.



Sounds pretty reasonable to me.


> Another person may not feel secure until they have a fortress with back to base security, a 24 hour armed body gaurd, a small plot of land that they can use for self subsistance in the event of a total collapse of the financial system,  alternative safe havens in 5 different countries and a bomb shelter below their home.



Hmm.  Well, I'd suggest such a person needs a psychologist more than they need a financial adviser.


> I agree that people can become obsessed - wealth can bring about its own challenges for people - both in terms of fear and greed as it can amplify both emotions - but I don't see that people that have accumulated wealth (wealth is such a relative term anyway - I doubt a New York or London resident with $3 million AUD would be considered particularly wealthy in that scenario) should be judged any differently in terms of the mistakes they may or may not have made in relation to Storm.



I think you are avoiding the point I was making.  You don't usually indulge in sophistry, Cuttlefish.
Let me try once again:   Let's discard the example to which I was responding (as was Bunyip, and probably gg) of $8 million.  Let's cut it right back to, say, $3 million.

If you were to avoid any risk and stick it in a bank deposit at a mere 5% it would earn $150,000 p.a.  Considering much of our aged population lives on the government pension of around $15,000, isn't that $150,000 enough to provide a reasonable standard of living?  Invest it in quality blue chip shares and it will likely earn double that without any additional risk of leverage.

So, Cuttlefish, let me ask the question another way:  Is there not a level of capital where you feel you have enough *without risking that capital, which you have worked for your entire life*by borrowing against it to create even more?

I have never suggested that we shouldn't always have our money working for us, and leverage can be a really useful tool in the right circumstances.

But when it comes to placing at risk all that you have when you are close to retirement age for the sake of acquiring more than any reasonable person would need, then I think that is simply foolish.


----------



## Julia (25 October 2009)

The following is a quote from the SMH Retirement section recently:



> The latest numbers from the Westpac-ASFA Retirement Standard show that for a couple aiming for a comfortable retirement an annual income of about $50,000 is needed, while a modest retirement requires about $27,000 a year.
> 
> Assuming that two 65-year-olds have a life expectancy of about 85, the couple will need retirement savings of at least $500,000 to fund a comfortable retirement. This assumes they owe nothing on their home.


----------



## maccka (26 October 2009)

This article from Stuart Washington of the Age makes for some very interesting reading.

Fresh suspicion of Storm

It will be very interesting to see where this line of investigation goes in the coming weeks.

cheers
maccka


----------



## bunyip (26 October 2009)

Julia said:


> Sounds pretty reasonable to me.
> 
> Hmm.  Well, I'd suggest such a person needs a psychologist more than they need a financial adviser.
> 
> ...




Julia

You make an enormous amount of sense in this post, as you do in all your posts.

If I could just add one point to your comments about people who are near retirement........
Irrespective of whether people are near retirement or not, once they've made their pile and have more than enough wealth to enable them to live in comfort and security for the rest of their lives, it makes no sense at all to enter or remain in high risk investments such as heavy gearing into the stockmarket.
There are other avenues of investment that can offer security and significant income, and a level of capital growth that easily outstrips inflation. 
It simply makes no sense for them to risk everything by taking wild gambles.


----------



## Monario (26 October 2009)

bunyip said:


> No, that's not what I'm telling you, nor did I claim anything of the kind in my post about the Rockhampton couple.
> 
> So how about you stop misrepresenting what I said, and read my post again.
> 
> ...




I Apologize for taking you the wrong way Bunyip.... I guess I have just read to many posts now that say we were greedy, and if you knew the moajority of stormers situations it would not be a label given...


----------



## Grey Ghost (26 October 2009)

maccka said:


> This article from Stuart Washington of the Age makes for some very interesting reading.
> 
> Fresh suspicion of Storm
> 
> ...




Yes that is a very interesting piece of information maccka.  Congratulations I think you have got one up on Solly.  He is usually the first one onto the latest developments like that.
Anyway if this is correct I don't understand why the banks went ahead and lent people money to put into these funds if they weren't all above board.  
I suppose they may just plead ignorance/not our responsibility etc. as they have done to a lot of things so far but I for one will watch this development with interest.
I hope the parliamentary inquiry follows this up.


----------



## Solly (26 October 2009)

Grey Ghost said:


> Yes that is a very interesting piece of information maccka.  Congratulations I think you have got one up on Solly.  He is usually the first one onto the latest developments like that.
> Anyway if this is correct I don't understand why the banks went ahead and lent people money to put into these funds if they weren't all above board.
> I suppose they may just plead ignorance/not our responsibility etc. as they have done to a lot of things so far but I for one will watch this development with interest.
> I hope the parliamentary inquiry follows this up.




Hey Grey Ghost,

I had the Brisbane Times version 
*Storm scrutiny: rogue from birth*

http://www.brisbanetimes.com.au/business/storm-scrutiny-rogue-from-birth-20091025-heni.html

Thanks Maccka, that's amazing about being investigated for running an unregistered managed investment scheme and the implications of a criminal penalty and gaol time. I just sent the link to my Stormer mate, that will give him some interesting ready at breakfast time in Oz.


----------



## Harleyquin (26 October 2009)

The information in Stuart Washington's story should give all stormers hope and reassure them that they did nothing wrong in taking the advice of a financial planner.  Time to forgive ourselves and move on.  

I look forward to the coming weeks and the results of the inquiry in November.


----------



## DocK (26 October 2009)

bunyip said:


> Julia
> 
> You make an enormous amount of sense in this post, as you do in all your posts.
> 
> ...




Forgive me if I'm buying into other people's argument/discussion, but just wanted to raise the following:

The Locks probably only started with storm in 2005 with much, much less than the 8mill their portfolio was worth at the peak - and that was probably 8mill portfolio with a 6mill margin loan.

The heavy gearing that keeps getting referred to was the end result of mismanagement.  The initial gearing, and indeed the level of gearing for the life of most of the investment, was possibly moderate, and only became ridiculously high due to mismanagement and inaction - if they'd been cashed out after a 20% fall in the market they would have had a substantial amount of their capital preserved.

Whether the investment was high risk or not seems to be an issue of much debate.  Index funds are generally not seen as high risk, but putting all their capital into the one investment type (ie. shares) probably was.

I would bet my house (or the little equity in it I retain) that the Locks, and others like them, thought their investment/financial plan was doing anything but "risking everything by taking wild gambles".  You have to realise that the whole scheme was sold to clients as a low-risk, safe method of building wealth over a long-term timeframe.  Most realised that during bull markets there was more money to be made by active investment, but chose to take what was portrayed as a lower-risk more diversified index pathway.  If anything, the "greedy" type would possibly not be attracted to storm as you'll often make far less in an index fund during the good times as other investments are capable of returning - with higher risk of course.

I know a lot of you are approaching this issue from the viewpoint of "how silly to take such a huge risk in your retirement years - how much would ever have been enough?, they must have been greedy", but I suspect the reality is that these people, and others like them, may have been very good at running chicken franchises or whatever they did to earn their money, but were quite clueless when it came to financial matters and believed what they were doing was anything but high-risk.  I know that is difficult for some of you to understand, but I'll bet they started out with a very low level of debt which was slowly but surely ramped up over the years until it reached the point where a 20%, 30% and probably even a 40% fall in the value of their investment could be handled - just not the level that we were all faced with by being left in the market until the bitter end - or near enough to it.  

I'm sure some of you are genuinely baffled at how retired people could have made the choices they did, and used any leverage at all, but you don't have the ability to look at the situation as if you were a financially "blank canvas" who had no reason not to believe their accountants/friends/bank/slick "education" seminars and trust that your investment and home were as safe as you were told they were - because you would have known better.  Unfortunately for the Locks, and many like them, they simply didn't know better.  Doesn't necessarily make them greedy or even foolish - they just trusted the wrong people and failed to look at other options.


----------



## cuttlefish (26 October 2009)

Julia said:


> Hmm.  Well, I'd suggest such a person needs a psychologist more than they need a financial adviser.



And of course I agree entirely but I'm sure you understand I was just using an extreme example to highlight my point about peoples differences. (Though its also true that plenty of people that achieved amazing things in this world were possibly considered in need of a psychologist by many of those around them - Columbus deliberately setting off to sail off the edge of the world,  Einstein telling us that time could slow down or speed up etc.).




> I think you are avoiding the point I was making.  You don't usually indulge in sophistry, Cuttlefish.



Sorry that wasn't my intention - I genuinely believe it is not possible to reduce this down to a simple answer.  If people have dreams that run beyond living comfortably and decide (for example) that instead they want to make enough to be able to fund mans first expedition to Jupiter, and that for their own reasons they want to risk everything they have for this venture I'm not going to begrudge them it - even if they do it 1 year before retirement.

Should they accept responsibility for their decisions and live with the consequence if it fails - yes.  If it fails because their components supplier deliberately supplied them with substandard and faulty parts do they have a right to feel angry with that components supplier and to expect those around them to show some compassion - yes.  

But of course I also think that chasing wealth just for the sake of it, to satisfy ones own vanity, is a pointless exercise.  




> Let me try once again:   Let's discard the example to which I was responding (as was Bunyip, and probably gg) of $8 million.  Let's cut it right back to, say, $3 million.
> 
> If you were to avoid any risk and stick it in a bank deposit at a mere 5% it would earn $150,000 p.a.  Considering much of our aged population lives on the government pension of around $15,000, isn't that $150,000 enough to provide a reasonable standard of living?  Invest it in quality blue chip shares and it will likely earn double that without any additional risk of leverage.
> 
> So, Cuttlefish, let me ask the question another way:  Is there not a level of capital where you feel you have enough *without risking that capital, which you have worked for your entire life*by borrowing against it to create even more?




The simple answer is for me personally I will always endeavour to invest a healthy portion of my wealth in a way that I consider to be very low risk.

The complexity comes when we start to look at how the risk of different assets changes over time.  I've been very heavily geared into property at one stage yet considered it low risk because all of the properties were positively geared, and I was comfortable with the economic stability of the location they were in. (yet they were 100% borrowed against).

Until the government agreed to guarantee bank deposits last year I was very averse to the idea of having all funds in a bank account and considered that to potentially be high risk - and in my view at the time it was high risk - if the government hadn't come in and guaranteed bank deposits then the possibility of banking failures was real. 

There are periods of time when sectors of the stock market present a very low risk investment opportunity and heavy gearing into the stock market could be done in a way that is relatively low risk. In a financial crisis like occurred last year reduction of debt levels is arguably the most important risk reduction mechanism and Storm did the opposite.

The thing that I think the Storm investors - large or small - are saying is they didn't realise that they were taking risks by having so much debt because they thought there were appropriate protections in place.  

To us it seems obvious that they were taking a huge risk but by the sounds of it many of them didn't have even a basic understanding of financial matters, which is why they chose to use what they thought was a reputable financial advisor. 

The others that did understand their gearing levels were risky were given the impression that Storm - as an expert in financial management - had adequate risk protection measures in place that placed limits around how much they could potentially lose.


----------



## bunyip (26 October 2009)

Monario said:


> I Apologize for taking you the wrong way Bunyip.... I guess I have just read to many posts now that say we were greedy, and if you knew the moajority of stormers situations it would not be a label given...




Thank you for the apology.

May I respectfully suggest that from now on before you comment on somebody's post, you first read the post slowly and carefully to make sure you fully understand what they're saying.
That way, you can avoid making the sort of response that you need to apologise for.

As for the 'greedy' label, it's not one that I apply to the average Stormer of average means who was just trying to become self-sufficient in retirement.
Sure, there are some in here who have thrown the 'greedy' tag around loosely. But I'm not one of them.
However, I don't retreat one inch from my view that greed _*is*_ a factor when people _*who are already wealthy*_ take crazy gambles such as risking their entire wealth by gearing heavily into a reckless plunge on the stockmarket.


----------



## cuttlefish (26 October 2009)

DocK said:
			
		

> Forgive me if I'm buying into other people's argument/discussion, but just wanted to raise the following:
> 
> The Locks probably only started with storm in 2005 with much, much less than the 8mill their portfolio was worth at the peak - and that was probably 8mill portfolio with a 6mill margin loan.
> 
> ...




I think this is a good explanation of how the situation would have unfolded for many Storm clients.


----------



## pilots (26 October 2009)

bunyip said:


> Thank you for the apology.
> 
> May I respectfully suggest that from now on before you comment on somebody's post, you first read the post slowly and carefully to make sure you fully understand what they're saying.
> That way, you can avoid making the sort of response that you need to apologise for.
> ...




Bunyip, you are so right about the wealthy taking great risks when if fact they all ready have more than they need to retire. Now the want to blame every one but them self, then we have the plain old I AM JUST GREEDY.


----------



## mellifuous (26 October 2009)

pilots said:


> Bunyip, you are so right about the wealthy taking great risks when if fact they all ready have more than they need to retire. Now the want to blame every one but them self, then we have the plain old I AM JUST GREEDY.




So, 'wealth' is defined as 'more than they need to retire', how about a nice car they can't afford?, a nicer home? more travel? a better life for their children?

Is that 'greed'?   Is accepting a low risk investment with a better return an act of greed? 

What is 'wealthy'? there are millions of people on the face of this earth who would think someone on the dole in Australia is wealthy.

I would think if it turns out that the losses in storm were attributable to negligence or breach of law by an entity or entities outside the control of investors, then I'd guess the 'greed' argument will just evaporate like water on the burning sands.

So, what's the point of bringing up the 'greed' argument before the fat lady sings?


----------



## pilots (26 October 2009)

mellifuous said:


> So, 'wealth' is defined as 'more than they need to retire', how about a nice car they can't afford?, a nicer home? more travel? a better life for their children?
> 
> Is that 'greed'?   Is accepting a low risk investment with a better return an act of greed?
> 
> ...



No matter what, or when the fat lady sings, GREED is what most of the trouble that has happened with the storm mob, you was all coned by a slick sales man, you wont get any thing back, end of story for you. Now the new story is the lawyers will make a killing on this, they are getting all geared up for the final kill.


----------



## Julia (26 October 2009)

maccka said:


> This article from Stuart Washington of the Age makes for some very interesting reading.
> 
> Fresh suspicion of Storm
> 
> ...



Thanks, Maccka.  I'd just read this in the SMH.  Very damning indeed and the fact that Manny has 'declined to comment' would indicate he has no defence on this.
The possibility that he will go to jail is looking real with this.



cuttlefish said:


> The simple answer is for me personally I will always endeavour to invest a healthy portion of my wealth in a way that I consider to be very low risk.
> 
> The complexity comes when we start to look at how the risk of different assets changes over time.  I've been very heavily geared into property at one stage yet considered it low risk because all of the properties were positively geared, and I was comfortable with the economic stability of the location they were in. (yet they were 100% borrowed against).
> 
> Until the government agreed to guarantee bank deposits last year I was very averse to the idea of having all funds in a bank account and considered that to potentially be high risk - and in my view at the time it was high risk - if the government hadn't come in and guaranteed bank deposits then the possibility of banking failures was real.



Cuttlefish, I entirely agree with your points above.



> There are periods of time when sectors of the stock market present a very low risk investment opportunity and heavy gearing into the stock market could be done in a way that is relatively low risk.



Sure.  But what we were debating was rather why one would need to engage in any risk if already able to meet all one's needs and wants.
Probably something it's difficult to agree about.


----------



## cuttlefish (26 October 2009)

Julia said:


> Sure.  But what we were debating was rather why one would need to engage in any risk if already able to meet all one's needs and wants.
> Probably something it's difficult to agree about.




Overall I think we're pretty much in agreement - I just tend to over analyse things sometimes.


----------



## Monario (26 October 2009)

I would just like to take this opportunity to say that, while I do not agree with statements that Stormers were a greedy bunch, I do agree with what Bunyip, CuttleFish, and Julia etc have had to say...

What gets my Goat is the Generalisation of the Greedy label some have applied, and i would also like to again apologize for the misinterpretation in my readings of some comments...

For those interested, my portfolio along with others in my family had conservative gearing levels to begin with, and was something I held a close eye over and was continually concerned with. My demise came when my FP convinced me to take out a loan and stop my RGP, for the life of me I could not understand this when I was doing it, but I did seek alternate advice, in the end I was convined to do it.

With my RGP no longer running, my gearing levels were 100% dictated by market movements, and well the rest is history.

I can see my mistakes, and now from what I have learnt I feel I could run similar investments, much safer and with total comtrol over my own money. I also understand much better what it means to have a balanced portfolio, something I spoke regularly about with my FP and he assured me this was.

The biggest mistake I made was trusting my FP, to whom I was paying good money to manage my fund, and all along the way I was fed continual lines of "we wont leave you behind" " we will not shirk our responsibilities to you" I even have an email stating that they have a fund for these situations that they can draw on and when things pick up we can pay them back!!! I also know of a few people who recieved such help.

I feel really stupid for what I have done, but i dont feel Greedy, perhaps over optimistic..

In closing, I will never use FP's in this manner again, my investments will be mine, and I will always ensure 100% contraol remains with me....


----------



## Solly (26 October 2009)

*"CBA subsidiary executive testifies at Storm hearing"*

"An executive from a Commonwealth Bank subsidiary has told a public examination of Storm Financial's collapse that it spent up to $90,000 sponsoring Storm events."

More by Jason Rawlings on the ABC;

http://www.abc.net.au/news/stories/2009/10/26/2724233.htm


----------



## Solly (26 October 2009)

I believe that Mr Clothier gave an interesting explanation of the interaction between CFS and CGI regarding the selling down of the Storm badged funds.

This will also be an interesting transcript....


----------



## Solly (26 October 2009)

gg, Mr Clothier wore a suit and tie today, do you still think it's more appropriate for EC to wear a tie when he returns to the stand ?


----------



## Garpal Gumnut (26 October 2009)

Solly said:


> gg, Mr Clothier wore a suit and tie today, do you still think it's more appropriate for EC to wear a tie when he returns to the stand ?




Solly mate, I think Mr.Cassimatis should take every opportunity while he can, to wear a tie and a belt in a judicial setting. 

He may not enjoy that privilege for much longer, given some of the evidence tendered at recent public hearings and in the Federal Court.

gg


----------



## Pindibog (26 October 2009)

Solly said:


> I believe that Mr Clothier gave an interesting explanation of the interaction between CFS and CGI regarding the selling down of the Storm badged funds.
> 
> This will also be an interesting transcript....




Can't you just tell us Solly?!!!


----------



## Julia (26 October 2009)

Monario said:


> I would just like to take this opportunity to say that, while I do not agree with statements that Stormers were a greedy bunch, I do agree with what Bunyip, CuttleFish, and Julia etc have had to say...



That's an objective and generous remark, Monario.  Appreciate it.


> What gets my Goat is the Generalisation of the Greedy label some have applied, and i would also like to again apologize for the misinterpretation in my readings of some comments...



I wonder if there has been some misinterpretation of this along the way?
(not meaning by you, Monario).   I don't think anyone who has made genuinely thoughtful comments about the whole Storm fiasco has labelled people greedy unless the poster was sincerely at a loss to understand why anyone would risk all that they'd worked all their lives for when apparently  there was already plenty to provide a very comfortable existence.



> For those interested, my portfolio along with others in my family had conservative gearing levels to begin with, and was something I held a close eye over and was continually concerned with. My demise came when my FP convinced me to take out a loan and stop my RGP, for the life of me I could not understand this when I was doing it, but I did seek alternate advice, in the end I was convined to do it.



Sorry if I'm being obtuse, but what is RGP?


> I can see my mistakes, and now from what I have learnt I feel I could run similar investments, much safer and with total comtrol over my own money. I also understand much better what it means to have a balanced portfolio, something I spoke regularly about with my FP and he assured me this was.



Well, that's a great step forward, isn't it?  Really good to hear this.


> The biggest mistake I made was trusting my FP, to whom I was paying good money to manage my fund, and all along the way I was fed continual lines of "we wont leave you behind" " we will not shirk our responsibilities to you" I even have an email stating that they have a fund for these situations that they can draw on and when things pick up we can pay them back!!! I also know of a few people who recieved such help.



Well hopefully all this will eventually come out publicly.


> I feel really stupid for what I have done, but i dont feel Greedy, perhaps over optimistic..



I don't think you should confuse naive and too trusting with 'stupid'.
Quite different traits.
Expect there would be few people who have not been taken in by someone at some stage.  Sad that this has been such an expensive and distressing lesson, though.


> In closing, I will never use FP's in this manner again, my investments will be mine, and I will always ensure 100% contraol remains with me....



Sounds like a great decision.  All the best.


----------



## Monario (27 October 2009)

Julia said:


> Sorry if I'm being obtuse, but what is RGP?




Regular Gearing Plan, monthly instalements on my behalf with a draw down of 50% from my margin facility. i.e. or there abouts percenatges are not exact. 

1K Capital
.5K Margin Loan


----------



## Solly (27 October 2009)

*"Storm Financial 'gambled' on rally: Federal Court"*

"STORM Financial head Emmanuel Cassimatis had a "perpetual gambling mentality" and believed the Commonwealth Bank hatched a "conspiracy" to bring down his advisory firm, a Federal Court in Brisbane was told yesterday."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26263874-3102,00.html


----------



## Solly (27 October 2009)

*" 'Gambling mentality' ruled at Storm "*

"Failed advisory firm Storm Financial was warned in early October that more than 700 clients were in margin call territory - or negative equity - with a shortfall of $27 million, according to Commonwealth Bank of Australia."

Read more by Michelle Singer in the The Australian Financial Review of October 27 2009


----------



## Solly (27 October 2009)

Pindibog said:


> Can't you just tell us Solly?!!!




I'll leave this to the pros like Anthony and the gang for first hand reports.


----------



## cuttlefish (27 October 2009)

Solly said:


> *"Storm Financial 'gambled' on rally: Federal Court"*
> 
> "STORM Financial head Emmanuel Cassimatis had a "perpetual gambling mentality" and believed the Commonwealth Bank hatched a "conspiracy" to bring down his advisory firm, a Federal Court in Brisbane was told yesterday."
> 
> ...




Some interesting comments from this article

----------
_John Clothier, distribution head with the bank's Colonial Geared Investments, told an inquiry into Storm's collapse that Mr Cassimatis had agreed to sell down $700 million worth of client funds last October after they fell into margin call. 

But when the market staged a brief rally, Mr Cassimatis sought to stop the second part of the sale because he wanted to gamble that clients might recover, the court heard. _

... etc ...

_Mr Clothier said that Storm was informed with dozens of emails and phone calls that the number of its clients in margin call had blown out from 98 to 710 by October 5.

Mr Clothier said that eventually CGI came to the conclusion that it could not "rely upon and trust resolutions" proposed by Storm, which had many clients who had been in negative equity for six weeks or more._
---------


Thats pretty damaging ... and very much sounds like someone not operating to any kind of plan.  From this it sounds very much like Storm were well aware that many of their clients were already in margin call but were running on a mixture of panic and hope, and flailing about indecisively.  The headless chook approach to crisis management.  (I'm well versed in this approach as I use it myself quite regularly  ... but luckily I'm not managing thousands of peoples financial futures ).  

 In all serious - with the level of gearing and risk that they prescribed, it is quite astounding that there was a complete lack of any kind of plan for what they would do in the event of a serious unravelling to the downside.  It is not as though they hadn't had some forewarning, given the depth and extent of the crisis that had already occurred in the prior 8 months or so.   

If they were going to continue to gamble on a bounce they could at the very least have implemented some kind of derivatives based downside protection - but to ignore the initial margin calls and 'hope' to win it back is like a novice investor/trader ignoring their stops - and its exactly the sort of behaviour that contributes to the final capitulation phase of a down trend.   Sounds very amateurish to me. 

 I'm also suprised, given the level of gearing they were recommending their clients take to invest into the index fund, and that it was a Storm branded fund, that the index fund itself wasn't set up in such a way as to incorporate hedge protections against market volatility (and maybe it did but wasn't enough but it doesn't sound like it).


----------



## DocK (27 October 2009)

cuttlefish said:


> Some interesting comments from this article
> 
> ----------
> _John Clothier, distribution head with the bank's Colonial Geared Investments, told an inquiry into Storm's collapse that Mr Cassimatis had agreed to sell down $700 million worth of client funds last October after they fell into margin call.
> ...




The index funds I was invested in were with Challenger, although storm branded, and managed by Challenger, and did not involve any hedging.  The amateurish flailing about approach based on panic and hope sounds about right, not what one expected from a so-called professional.  My reading of the market commentary periodically put up on storms website before their demise gives me the impression that manny firmly believed our sharemarket would be supported by China and would/should be immune to the sub-prime problems in USA as our banking system was so much stronger than theirs.  He did not believe that the problems in USA should affect us to the extent that they did - therefore in his mind it wouldn't happen - I believe the man's ego prevented him from contemplating what may happen should he be wrong.

I found it very interesting that the article quoted above states that manny had a plan for the cba to save his business and his top 200 clients - presumably the rest of us were to be cast adrift!  I guess those top 200 clients were also the ones that received under-the-table loans to bail them out towards the end.  I guess that's one way to ensure future loyalty from those you see as being worth most to you - and #### the rest.


----------



## Out Too Soon (27 October 2009)

Julia said:


> Out too Soon, do you mean Manny has changed his personal name, or that he has had various business names for his various enterprises?
> 
> Good to know you didn't provide fodder for him.




Sorry i wasn't monitoring this Julia  
 The business seemed to change names with the weather until they finally stuck on the all too appropriate "Storm" 
  I forget the name they used when the "dotcom" bubble burst but that was when the name changing first caught my eye 
  (& it was "Manny" all along) We got quite used to his face on TV ads up here


----------



## Monario (27 October 2009)

Out Too Soon said:


> Sorry i wasn't monitoring this Julia
> The business seemed to change names with the weather until they finally stuck on the all too appropriate "Storm"
> I forget the name they used when the "dotcom" bubble burst but that was when the name changing first caught my eye
> (& it was "Manny" all along) We got quite used to his face on TV ads up here




Ozdaq Securities was one of them, I believe it was around the dotcom period!


----------



## specialed (27 October 2009)

Solly said:


> *" 'Gambling mentality' ruled at Storm "*
> 
> "Failed advisory firm Storm Financial was warned in early October that more than 700 clients were in margin call territory - or negative equity - with a shortfall of $27 million, according to Commonwealth Bank of Australia."
> 
> Read more by Michelle Singer in the The Australian Financial Review of October 27 2009




So the CBA new in early October that some of their clients, who they had a contractual agreement with were entering margin call territory but chose not to contact those clients. Instead preferring to go through a third party, which could only have the effect of drawing out the time it would take to rectify the situation.


----------



## Ironhalo (27 October 2009)

Storm knew at the same time, if not earlier. Manny instructed staff to do nothing while he tried tot alk his way out of it to protect his profits.


----------



## Solly (27 October 2009)

I believe there were some very interesting responses from Mr Arnaout at today's examination. 

It also appears that Register Baldwin is not very tolerant of vagueness in her court.

I am eager to see tomorrow's press I'm confident that it will be a good read.


----------



## Pindibog (27 October 2009)

Solly said:


> I believe there were some very interesting responses from Mr Arnaout at today's examination.
> 
> It also appears that Register Baldwin is not very tolerant of vagueness in her court.
> 
> I am eager to see tomorrow's press I'm confident that it will be a good read.




Aaaaah you're killing me Solly!!! I want to know now!


----------



## Garpal Gumnut (27 October 2009)

The SICAG model site, sicag.info is looking very sparse.

Very little new information, unsurprising as its mostly adverse reporting about The Cassimatises, and the Storm model, in the msm and on asf.

I think the money spider has been stealing all the type.

The disclaimer about the Cassimatises will be last on the moneyspider's menu.

gg


----------



## Solly (27 October 2009)

Pindibog said:


> Aaaaah you're killing me Solly!!! I want to know now!




Be up early tomorrow morning when the paper boy throws the morning rag over the picket fence


----------



## Julia (27 October 2009)

specialed said:


> So the CBA new in early October that some of their clients, who they had a contractual agreement with were entering margin call territory but chose not to contact those clients. Instead preferring to go through a third party, which could only have the effect of drawing out the time it would take to rectify the situation.



There have been varying accounts about this.  If Storm clients specifically signed over to Storm as their agents, then obviously the Bank would contact Storm in the event of a margin call, not the client.  This appears to have been what happened in most cases, the problem then being that Storm failed to take the appropriate action.
Someone will correct me if I've misunderstood this.




Solly said:


> I believe there were some very interesting responses from Mr Arnaout at today's examination.
> 
> It also appears that Register Baldwin is not very tolerant of vagueness in her court.
> 
> I am eager to see tomorrow's press I'm confident that it will be a good read.



Are we to gather that you were there?  If so, couldn't you give a brief rundown of what happened?



Out Too Soon said:


> Sorry i wasn't monitoring this Julia
> The business seemed to change names with the weather until they finally stuck on the all too appropriate "Storm"
> I forget the name they used when the "dotcom" bubble burst but that was when the name changing first caught my eye
> (& it was "Manny" all along) We got quite used to his face on TV ads up here



OK.  Thanks for that, Out Too Soon.


----------



## Garpal Gumnut (27 October 2009)

Out Too Soon said:


> Sorry i wasn't monitoring this Julia
> The business seemed to change names with the weather until they finally stuck on the all too appropriate "Storm"
> I forget the name they used when the "dotcom" bubble burst but that was when the name changing first caught my eye
> (& it was "Manny" all along) We got quite used to his face on TV ads up here




OTS, they called themselves OZDAQ, an attempt to steal the kudos of NASDAQ.

A few expensive lawyers letters made Manny tear up all his letterheads and go back to some other bull**** name like ****forbrains and finally Storm.

gg


----------



## cuttlefish (27 October 2009)

Julia said:


> Are we to gather that you were there?  If so, couldn't you give a brief rundown of what happened?




Maybe we already get a brief rundown by Solly of the previous days events each morning ... or am I reading too much in that wink in his post three above (and in an earlier post.).


----------



## Solly (28 October 2009)

*"Macquarie saw itself as the apple in Storm's eye"*

"A MACQUARIE Bank staffer wrote a friendly personal cheerio to Emmanuel Cassimatis on a deal that was agreed between Macquarie and Storm Financial."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/macquarie-saw-itself-as-the-apple-in-storms-eye-20091027-hj4m.html


----------



## Solly (28 October 2009)

*"Margin bending: how a bank stretched loans for Storm"*

"MACQUARIE BANK allowed Storm Financial's customers to borrow up to $10 million without providing evidence of their ability to repay the loans, in a deal reached with Storm's founder, Emmanuel Cassimatis."

More by Stuart Washington in Business Day here;

http://www.businessday.com.au/business/margin-bending-how-a-bank-stretched-loans-for-storm-20091027-hj05.html


----------



## Solly (28 October 2009)

*"CGI claims inaccurate: Storm founder
Email a red herring"*

"The "constant communication" CGI claims it had with Storm Financial is inaccurate, according to Storm founder."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7724.htm


----------



## Solly (28 October 2009)

*"Emails disprove story of Commonwealth Bank Storm link"*

"STORM Financial's argument that the Commonwealth Bank alone had the responsibility to alert clients with crashing investment portfolios has been disproved."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26269018-3122,00.html


----------



## Solly (28 October 2009)

Julia said:


> Are we to gather that you were there?  If so, couldn't you give a brief rundown of what happened?




Sorry Julia, I'm too far away but I do get little snippets sent to me occasionally.  The transcripts will be very, very interesting.


----------



## Solly (28 October 2009)

*"Revealed: how Macquarie courted Storm"*

"MacBank is being less than forthright about its dealings with the financial planner, writes Stuart Washington."

More by Stuart Washington as reported on brisbanetimes.com.au

http://www.brisbanetimes.com.au/business/revealed-how-macquarie-courted-storm-20091027-hj0j.html


----------



## Solly (28 October 2009)

*"Storm did not act on danger loans, hearing told"*

"Storm Financial failed to warn its clients about possible margin calls as the sharemarket started to plummet in late 2008, despite weeks of communication and calls to action from Commonwealth Bank of Australia's margin loan risk department."

Read more by Michelle Singer in the The Australian Financial Review of October 28 2009.


----------



## clayton4115 (28 October 2009)

A bunch of financial advisers telling clients to borrow money against their home and then using that cash to buy shares - well, show us a financial adviser or planner that doesn't recommend utilizing the 'dead equity' in your home.

In fact the one thing that does surprise us about the Storm Financial fiasco is that everyone seems so surprised at what happened.

It's as though the finance reporters feel cheated that their heroes in the finance sector and business world have betrayed them.

So, whose fault is it? Is it the regulators fault?

ASIC is copping a lot of the blame for allowing Storm Financial and Opes Prime to happen. In reality, we can't blame them entirely. And no, it's not because they are underfunded, it's because it just isn't possible for a regulator to do anything about it.

Regulators can't prevent things from happening when they don't know what's happening. And they also can't prevent things from happening when they don't know what will happen.

But if we ignore Storm and Opes for a second, you only have to look at the regulation of the banks. APRA are labeled as heroes for their tight regulations. If that's the case how is it that Australia's banks came within a whisker of collapsing last year?

As I've written before, if it wasn't for the retail and wholesale funding guarantees and the manipulation of the property market, Australia's banks would be on their knees right now.

Not that they're in any better shape for it. Arguably they and their customers are in worse shape. But we'll leave that for today as we plan on scouring through the NABs results later on today. I'll let you know tomorrow if there's anything worth looking at.

Anyway, so if we can't blame the regulators for the collapse of Storm Financial who can we blame?

Although I said we can't blame ASIC entirely, we can shift a bit of the blame their way.

You see, the existence of ASIC or any regulator creates more problems than it solves. It's similar to the moral hazard argument. You know the one, that's where banks take risks because they know the government will bail them out.

It's the same with regulators. Regulators don't reduce risks for investors, they actually increase the risk to investors.

The most due diligence 99% of Storm Financial clients would have done is to check the firm had an Australian Financial Services Licence (AFSL). Once that box is ticked the investors would have been happy.

After all, if Storm is regulated by ASIC then it must be OK.

But when these collapses happen, the kneejerk reaction is to insist on more regulation. All that does is ensure a bigger blow-up as more investors do even less due diligence based on the fact the regulations are tighter than before.

What could possibly go wrong?

The fact is there are only three things that can reduce the odds of an unsuspecting investor being caught out: free markets, a free press, and freedom of speech.

Now, that doesn't guarantee investors will be saved from crooks. Whether you have regulators or not, there will always be dodgy characters that will rip off money from investors.

That's just a fact of life, and it can't be stopped.

The problem is, cases such as Storm, Opes Prime, Bernie Madoff and Sir Allen Stanford have happened where there are regulations. What they have also shown is that regulations actually get in the way of the crooks being caught.

As far as we can recall, in these four cases at least, it wasn't the regulators that caught them out, it was the market.

In each case it was either investors becoming suspicious and sounding the alarm, or the complicit banks finally deciding they'd made as much money out of it as they can and they didn't want to play anymore.

Only then do the regulators ride in to try and claim the spoils.

But this is where the mainstream media are also coming up short. Rather than fawning over RBA governors, CEOs, analysts and advisers, they should be grappling with them to find out what's really going on.

Take the following stories from The Australian newspaper. In November 2007, journalist Tim Boreham wrote: 

"Unlike its rivals, Queensland-based Storm works on the notion that, like companies, clients should leverage their personal balance sheets and gear up to the extent they sensibly can, and buy up big during market troughs... According to founders, owners and joint CEOs Emmanuel and Julie Cassimatis, Storm enjoyed record inflows in March, when the local market tanked on the back of the Shanghai stock exchange, and then in August when the sub-prime stuff hit."
But then he goes on to write: 
"While we can't really see how Storm or its clients would fare any better than others in a prolonged bear market, Storm has so far managed 100 per cent average annual growth... Criterion urges caution on Storm. Call us old-fashioned, but we're unsettled by any growth-through-gearing mantra and the industry buzz is that Storm's fees are a tad on the high side. We're not contending the offer lacks merit, but perhaps there's not enough value to justify rushing the IPO. We'll avoid and have a another look after the December 13 listing."
Boreham could have had a scoop on his hands. "100 per cent average annual growth" is surely something worth following up on for an investigative journalist. But Boreham seems more worried about their fees being "on the high side."

Of course it's easy to say in hindsight. And you could say, "Well, where were you then smarty pants?"

That's a fair call too. We've being trying to catch bigger fish by calling out the banks as institutionalized fraudsters. But the mainstream press doesn't even have that as an excuse.

So, what is their excuse? We don't know for sure. But our guess is they like the kudos of interviewing CEOs and analysts and experts. They like being invited to lunches and corporate functions.

Anyway, less than two months later The Australian wrote: 
"The Australian reported last month that the corporate regulator was investigating Storm Financial after hundreds of investors were left owing millions of dollars to margin lenders when the stock market tanked... The Australian Securities and Investments Commission claims 300 Storm clients owe their margin lenders a total of $20 million, with many investors liable for more than the value of their portfolios, it was reported."
It's a perfect example of how it's not possible for regulators to prevent incidents like this from happening.

At what point does the financial advisory firm go from providing high risk investment advice to breaking the law? It's impossible for any regulator to be that close to a company that it can pick that precise moment.

In the case of Storm it was only after everything had hit the fan that ASIC came to the rescue.

But another line from Boreham's story reveals more: 
"Storm suffered an odd last-minute hiccup last week when Macquarie Bank withdrew as underwriter."
You have to wonder whether Macquarie withdrew because they were worried about being left with a truckload of unsold stock, or whether they were more worried about being left with a truckload of worthless stock when everything came out into the open.

Look, as I say, it's easy to use Harry Hindsight two years after the event. But the fact remains that if the mainstream press and regulators think the likes of Storm Financial are isolated events then they're kidding themselves.

There's much bigger fish out there waiting to be caught, only they'll only be caught after the event.

Because when you think about it, there's very little difference between what Storm Financial was doing for its clients and what the banks do to their clients - the savers.

I'll have more on that tomorrow!

Cheers.
Kris.

source: Money Morning
http://www.moneymorning.com.au/


----------



## Solly (28 October 2009)

*"Storm's loan practices questioned in 2006, court hears"*

"LOAN practices of a Townsville bank for Storm Financial customers were questioned as early as 2006, two years before it collapsed, a court has heard.

Bruce Auty, Bank of Queensland's group executive for group risk, told the Storm Financial public examination in the Federal Court in Brisbane today."

More by Angela Harper from AAP in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,26271991-12377,00.html


----------



## mellifuous (28 October 2009)

clayton4115 said:


> "... You see, the existence of ASIC or any regulator creates more problems than it solves. It's similar to the moral hazard argument. You know the one, that's where banks take risks because they know the government will bail them out.
> 
> It's the same with regulators.* Regulators don't reduce risks for investors, they actually increase the risk to investors.*
> 
> ...


----------



## Landyman (29 October 2009)

I have  been following  this thread since it started and still find it fascinating.

Being 50+ years of age I have been  through  and experienced a number of market cycles.

I would have to say the most successful of my aquaintances and from what I  have seen of those with "REAL" money are those who admit to "selling too early".

As they say, "I might have missed the last 15%+,  but I  was there for the first 30%+, and not there for the final crunch so by  buying  back  in   at  my exit point did well am now back well in front".

Seems a simple enough strategy doesn't it? And based on well  known observations of market cycles.

It is the old Pareto Principle in action  again. 20% of the players retain 80% of the profits.

Landy


----------



## Solly (29 October 2009)

*"Norris regrets Commonwealth Bank's Storm link"*

"THE head of the Commonwealth Bank says he regrets the relationship his bank had with Storm Financial and takes some responsibility for what has happened to clients of the former financial planner.

About 54 former Storm clients will settle their claims against Commonwealth Bank today, and about 40 claims per week are expected to be settled from now on."

More by Lucy Battersby in The Age here;

http://www.theage.com.au/business/norris-regrets-commonwealth-banks-storm-link-20091028-hl3m.html


----------



## Solly (29 October 2009)

*"CBA chief under fire over Storm debacle"*

"Commonwealth Bank of Australia chief executive Ralph Norris came under attack from a parliamentary committee last night for the bank's "inexplicable" delay in contacting clients of Storm Financial facing margin calls.

Read more by Duncan Hughes in The Australian Financial Review of Octpber 29 2009"

*"Contrite Ralph sets record straight"*

"Flanked by four senior executives, Commonwealth Bank of Australia boss Ralph Norris was determined to get on the front foot when he appeared before a parliamentary inquiry in Canberra last night to explain the lender's involvement in Storm Financial."

Read more by John Kerin in The Australian Financial Review of October 29 2009


----------



## Solly (29 October 2009)

*"Bank of Queensland 'saw Storm Financial problems years ago' "*

"THE Bank of Queensland knew as far back as 2006 that there were numerous problems with lending practices at a Townsville branch that provided the bulk of home loans to Storm Financial clients."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26274137-3122,00.html


----------



## Solly (29 October 2009)

*"Commonwealth Bank CEO Ralph Norris apologises to Storm clients"*

"COMMONWEALTH Bank boss Ralph Norris has made a long-awaited public apology to former Storm Financial investors and revealed the bank has settled compensation claims with 50 of its clients."

More by Emma Chalmers in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26274700-3122,00.html


----------



## Solly (29 October 2009)

*"BoQ alerted to Storm loans in '06"*

"Loan practices of a Townsville bank for Storm Financial customers were questioned as early as 2006, two years before it collapsed, a court has heard."

More by By Angela Harper on ninemsm.com.au;

http://news.ninemsn.com.au/business/921736/boq-alerted-to-storm-loans-in-06-court


----------



## Solly (29 October 2009)

*"Former Storm clients refuse bank apology"*

"Many of the victims of the Storm Financial collapse have refused to accept today's apology from the head of the Commonwealth Bank."

More on the ABC's World Today with Eleanor Hall and reported by Annie Guest;
(with audio)  

http://www.abc.net.au/worldtoday/content/2009/s2727485.htm


----------



## Solly (29 October 2009)

*"Storm victims say banks should pull heads out of sand"*

"Storm Financial victims are calling on banks to pull their heads out of the sand and settle claims for loans that were struck by ``con men''."

More from AAP in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/10/29/90241_news.html


----------



## Solly (29 October 2009)

*"Townsville couple settles loss from Storm"*

"TOWNSVILLE couple..are finally putting their lives back together penny by penny after being devastated in the Storm Financial debacle."

More from Lendl Ryan in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/10/29/90151_news.html


----------



## Garpal Gumnut (29 October 2009)

Solly said:


> *"Storm victims say banks should pull heads out of sand"*
> 
> "Storm Financial victims are calling on banks to pull their heads out of the sand and settle claims for loans that were struck by ``con men''."
> 
> ...




The quote frm that article Solly, thanks for posting , was 



> Mr Scattini today likened the tactics used by Storm to those of con men.
> 
> ``Con men don't force you - they trick you (and) Storm were a pack of con men,'' Mr Scattini said.
> 
> He also called on the Macquarie Bank and Bank of Queensland to look at the example set by the CBA.




gg


----------



## Solly (30 October 2009)

*"Storm Financial 'kept margin calls quiet'"*

"STORM Financial co-founder Julie Cassimatis headed a unit within the advisory firm that failed to pass on margin calls to clients last year, despite warnings from banks, a Brisbane court was told yesterday."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26278890-3102,00.html


----------



## Solly (30 October 2009)

*"Storm clients missed margin calls"*

"ABOUT 1000 margin calls were never received by Macquarie Bank's Storm Financial clients when the market was crashing in October last year."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/storm-clients-missed-margin-calls-20091029-hnta.html


----------



## Solly (30 October 2009)

*"Storm clients - margin calls missed"*

"Macquarie explained that its contract with customers who were under margin loans were not entitled to compensation for failure to contact those margin loan customers directly."

More by Sue Tanner on International Business Times here;

http://ibtimes.com.au/articles/20091030/storm-clients-margin-calls-missed.htm


----------



## Solly (30 October 2009)

*"Storm margin loan claims yet to be resolved
Assessed by independent panel"*

"Storm clients' claims against the CBA are still being tested."

More by Darin Tyson-Chan on Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/7746.htm


----------



## Solly (30 October 2009)

*"CBA proposes an 'early warning system' for financial planners"*

"EVERY financial planning business should submit internal information to the Australian Securities and Investments Commission as an ''early warning system'' to prevent collapses similar to Storm Financial, the Commonwealth Bank has argued."

More by Stuart Washington in The Age here;

http://www.smh.com.au/business/cba-proposes-an-early-warning-system-for-financial-planners-20091029-hno5.html


----------



## bunyip (30 October 2009)

Solly said:


> *"Storm clients missed margin calls"*
> 
> "ABOUT 1000 margin calls were never received by Macquarie Bank's Storm Financial clients when the market was crashing in October last year."
> 
> ...




The argument will continue forever about whose responsibility it was to notify clients regarding margin calls. 
It's clear that lenders notified Storm that some clients were in margin call, and it's also clear that Storm decided not to pass on that information to their clients. 
Regardless of whether they failed their legal responsibilities, Storm certainly failed their moral obligations to their clients. 
Common decency and concern for their clients - something that was clearly lacking at Storm - should have dictated that they do the right thing and let clients know they were in margin call.

Below are some extracts from the Storm website. The comments in bold are mine.

_Our processes are transparent and we are accountable to all clients as we regularly monitor, measure and manage their portfolios. _
*OK - so wouldn't that include notifying clients if Storm knew they were in margin call?*

_At Storm Financial, our core desire is to support you in a genuine and lasting way in your quest for a fulfilling life._
*OK - and wouldn't that 'support' include passing on the information to clients when a bank notified Storm that some clients were in margin call?*

_We take the confusion and complexity out of investing_
*OK - but wouldn't they only be increasing, not taking away, their clients confusion by failing to notify them of margin calls?*

Storm Financial continue to be shown as incompetent, immoral and despicable.


----------



## DocK (30 October 2009)

bunyip said:


> The argument will continue forever about whose responsibility it was to notify clients regarding margin calls.
> It's clear that lenders notified Storm that some clients were in margin call, and it's also clear that Storm decided not to pass on that information to their clients.
> Regardless of whether they failed their legal responsibilities, Storm certainly failed their moral obligations to their clients.
> Common decency and concern for their clients - something that was clearly lacking at Storm - should have dictated that they do the right thing and let clients know they were in margin call.
> ...




Agree completely.  Interestingly, I had a margin loan with Macquarie and I cannot find anywhere in my paperwork where I have given them authority to notify storm, instead of myself, of any matters to do with the margin loan.  As far as I was aware, anything to do with the margin loan was between Macquarie and I, and had nothing to do with storm once it had been set up.  I didn't actually fall into margin call territory, but I certainly would have expected contact from Macquarie if I had.  Never was I told by storm that they would deal with Macquarie on my behalf.  It would appear that Macquarie and storm had an agreement that was either buried in fine print, or appeared in teeny tiny font at the very bottom of a statement somewhere down the line, that storm be notified of margin calls in lieu of the client.  This confusion re who was responsible for margin calls is at the crux of a lot of ex-storm clients' complaints - and the cause of a lot of finger pointing between the major players involved who are now very keen to claim it was the responsibility of the other.  And before I get a flood of replies telling me that clients should have been monitoring their situations themselves, I think that horse has been flogged to death by now - most are aware that yes, that would have been a good idea, but some just did not have the ability or the know-how, and I suspect all thought they'd be contacted (by one or the other) if a margin call eventuated.


----------



## mellifuous (30 October 2009)

DocK said:


> Agree completely.  Interestingly, I had a margin loan with Macquarie and I cannot find anywhere in my paperwork where I have given them authority to notify storm, instead of myself, of any matters to do with the margin loan.  As far as I was aware, anything to do with the margin loan was between Macquarie and I, and had nothing to do with storm once it had been set up.  I didn't actually fall into margin call territory, but I certainly would have expected contact from Macquarie if I had.  Never was I told by storm that they would deal with Macquarie on my behalf.  It would appear that Macquarie and storm had an agreement that was either buried in fine print, or appeared in teeny tiny font at the very bottom of a statement somewhere down the line, that storm be notified of margin calls in lieu of the client.  This confusion re who was responsible for margin calls is at the crux of a lot of ex-storm clients' complaints - and the cause of a lot of finger pointing between the major players involved who are now very keen to claim it was the responsibility of the other.  And before I get a flood of replies telling me that clients should have been monitoring their situations themselves, I think that horse has been flogged to death by now - most are aware that yes, that would have been a good idea, but some just did not have the ability or the know-how, and I suspect all thought they'd be contacted (by one or the other) if a margin call eventuated.




Sorry to ask, but is it possible for members of Storm to set out a list (like in a statement of claim), eg.

The (facility provider) failed to ....
Storm failed to ...

thereby attempting to narrow your collective grievances?

Is this at all possible?


----------



## Ironhalo (30 October 2009)

There is definite neglect and culpability here on account of Storm and the banks. 

I wasn't in margin call, but then again I wouldn't have been able to check...the CGI website and info was screwed for the whole months of Oct-Nov 08. I could put my tin-foil hat on and say it was probably due to people being laid off during the GFC?

What completely spins me out, is that CGI can offer me a margin loan (through Storm) and then 3 weeks later sell my 3 week investment at a 20% loss for NO REASON, and with NO CONSULTATION. I effectively made a 15k loss (and I was buying in at the near bottom of the market with the view to ride it out and enjoy the recovery), by Colonial giving with one hand and then taking with the other 3 weeks later, when I was in no danger of margin call.

Hang in there though Stormers. Someone I know (no names, no court-martials) just received a compensation package from CBA. Let's just say that it was six-figures, and there is a nice % rate reduction on the remainder of their loan repayments on what remains of their mortgage. 

It's all being sorted out, and Slater and Gordon (ulterior motives in making money aside, who can blame them) are doing a good job getting these mediated and settled promptly. Give it a few weeks, some of you guys and girls may be up for a nice Christmas 'win'. 

And now we wait for Manny and Julie to start moving out of Belmont and led away in irons. I almost feel sorry for their kids. At the worst, hopefully what remains of the personal fortune is obliterated.


----------



## Judd (30 October 2009)

Ironhalo said:


> And now we wait for Manny and Julie to start moving out of Belmont and led away in irons. I almost feel sorry for their kids. At the worst, hopefully what remains of the personal fortune is obliterated.




I don't know if many have pick up on the entity where the $2m "dividend" was to be paid but I seem to recall it was made payable to the Cassimatis Family Trust Fund.  Hmmm, it may be that some people's wish may not eventuate.


----------



## Ironhalo (30 October 2009)

Nice pick up Judd. 

I wonder where the 20+ million that was in Storm's 'War' account went in the latter half of last year as well? I remember Ron Jelich made a reference to it in his submisison to parliament; basically something along the lines of 'one month we had money in reserve, the next month we were told that we only had $2-3 million in the business account'. No doubt that all got rabbited away into this trust fund as well. Certainly I know that out of the $28 million they made or so in FY07-08, the Cassimatis paid themselves a dividend of about 75-80% of that money. So much for saving money for your business' rainy day.

And the wheels of rampant greed/capitalism continue to turn.


----------



## Julia (30 October 2009)

> Bruce Auty, the bank's group executive for group risk, defended the bank's unquestioning belief in data provided by Storm about the size of client investments and their assets.
> 
> "Storm was acting as our agent for those loans. We had no reason to doubt that," Mr Auty yesterday told the public examination into Storm's collapse.
> 
> ...




The above quote at least seems to clarify what hasn't been clear to date, i.e. that the fudging of clients' assets and income situations occurred with Storm, rather than - as been suggested by some - the banks having inflated these.
I couldn't see that happening.

And the final paragraph also seems to confirm that the arrangement existed that for margin calls the lender would contact Storm whose responsibility it then was to either contact the client or act on the client's behalf.


----------



## Steve Borden (30 October 2009)

Julia said:


> The above quote at least seems to clarify what hasn't been clear to date, i.e. that the fudging of clients' assets and income situations occurred with Storm, rather than - as been suggested by some - the banks having inflated these.
> I couldn't see that happening.
> 
> And the final paragraph also seems to confirm that the arrangement existed that for margin calls the lender would contact Storm whose responsibility it then was to either contact the client or act on the client's behalf.




Mr Auty may very well say that but it doesn't answer the question why the the information that Storm sent to BoQ is not what is on the BoQ application, ie no margin loans, over estimated cash reserves, etc.

Or why BoQ accepted that a $200k investment was generating an income of $100k pa.

*IF* Mr Auty did say that Storm was an agent of the Bank (my information is that he may have been misquoted) then BoQ is now in a world of hurt.


----------



## Julia (30 October 2009)

Steve Borden said:


> Mr Auty may very well say that but it doesn't answer the question why the the information that Storm sent to BoQ is not what is on the BoQ application, ie no margin loans, over estimated cash reserves, etc.



Sorry if I'm being obtuse here, but can you explain this a bit more?
I was getting the sense from the extract that Storm filled out all the application forms and in so doing did not correctly record clients' asset and income levels, and that the bank accepted what Storm offered.
(I thought that quote was from a CBA person, but you're obviously pointing out that Mr Auty is from BOQ?)


----------



## Steve Borden (30 October 2009)

Julia said:


> Sorry if I'm being obtuse here, but can you explain this a bit more?
> I was getting the sense from the extract that Storm filled out all the application forms and in so doing did not correctly record clients' asset and income levels, and that the bank accepted what Storm offered.
> (I thought that quote was from a CBA person, but you're obviously pointing out that Mr Auty is from BOQ?)




Julia

It's important to go back to the beginning to get a sense of the flow of data between Storm and the lenders.

In the main Storm would send out a letter to say four (4) Banks seeking a 'tender' for a customer. The Storm pack would include the assets and liabilities information, some income details (if the client was employed) and some cashflow projections that formed part of the SoA together with a signed privacy act form for each lender (Storm had a supply of these for each lender and got them signed in blank by the client to send to the lender as required). 

The lender would then come back with an offer based on the information they had received, say a lend of $400k given the estimated value of the property was $500k, with the applicable interest rates, fees, interest only terms, etc.

Storm would then recommend the appropriate lender to the client, usually via the SoA when it was presented to the client, prior to this though Storm would advise the lender to proceed so the finance and the SoA met up and not waste further time.

The lender would then complete an application based on the information extracts they received from Storm, mostly through a proprietary electronic system. That is why the almost all the applications are typed and not hand written (except for some NAB and Westpac deals). The lender appears to then have placed the previously signed privacy act forms together with the computer generated application and we now have a signed loan application that the client has never seen nor been interviewed regarding. 

In a majority of instances I have seen the information the lender has on their file (or what was sent to them).

The issue is that the Storm information extracts held on the lender's files (or what should be on the lender's file) does not marry up with what the lender used in their application. Only someone from the Bank could have decided to include, exclude, vary or accept that information.

Mr Auty is the BoQ Group Executive for Group Risk.


----------



## Garpal Gumnut (30 October 2009)

Its all getting very complicated for a simple fellow like me.

It sounds as if the lawyers will be a feeding for a few years on this.

Perhaps if Manny and his advisers had read Percy Bysshe Shelley's (1792–1822) famous sonnet on the folly of grandiose wealth, and its inevitable decline, this may not have come to pass





> OZYMANDIAS
> 
> I met a traveller from an antique land
> Who said: Two vast and trunkless legs of stone
> ...




gg


----------



## Solly (30 October 2009)

Garpal Gumnut said:


> Its all getting very complicated for a simple fellow like me.
> 
> It sounds as if the lawyers will be a feeding for a few years on this.
> 
> ...




gg, I've got my Stormer mate over tonight with the rest of the gang & got ASF idling in the background. Thanks for the pics he's p*ssing himself laughing over those pics.:


----------



## Ironhalo (30 October 2009)

Solly, mention to your Stormer mate that people have started getting their compo deals looked at by CBA.

Six figure payouts,
% cuts off residual loan amounts, and
waiving of loan fees etc.

Crack open a few bottles and say cheers, hopefully they feel better. 

GG, those photos are pure hilarity, love the one of him dressed up as a British Island Governor! Wonder if he turned a blind eye to piracy? The self-grandiosing photo with Bill Clinton is a classic.


----------



## bunyip (30 October 2009)

I bumped into an old mate at a school reunion earlier this year - turns out that he was caught up in the Storm Financial debacle.
He lost serious money and has been left in debt, but is nevertheless confident of getting his life back on track.

Based on my recollection of what he told me, I thought I'd have a crack at putting his Storm experiences into verse.....


Our money's insufficient for 
Retirement so it seems
We need to give our wealth a boost
To fund our many dreams.
We lack investment knowledge
And so we have agreed
We'll leave it to the pros to tell us
How much wealth we'll need
And how to get it - that's their job
To give us sound advice
So we can live our every dream
Myself and my good wife

But who to turn to?
Who to trust?
We're scared of getting burned
Maybe our accountant
Can tell us where to turn

We speak to our accountant 
He hesitates a while
Then mentions Storm Financial
With ever-knowing smile

And so along to Storm we go
Their Townsville office grand
Prime location - Sturt Street
Short stroll to The Strand
Plush interior
Smiling staff
Greetings most sincere
Or so it seems to us at least
We feel most welcome here.

We meet a Storm adviser
A welcome smiling face
A handshake warm and friendly
We really like this place
We're offered tea or coffee
They even give us cake
We're sure that coming here today
Has not been a mistake

We're told about the marketplace
Stocks are king it seems
Superior to real estate
We'll soon fulfil our dreams
Next we learn of Indexed Funds
Sounds just right for us
This friendly Storm adviser seems
To really know his stuff.

Margin loans - a great idea!
Grow our wealth much faster
Put in one and borrow two
No thought of disaster

Seems that we can use our home
To borrow funds against
Buy into some Indexed Funds
Seems to make good sense
Then, says he, your Indexed Funds
We'll use as more collateral
Borrow even more for stocks
No more slog and battle

Join the bulls and ride the wave
Don't get left behind
Our fees? a paltry 7%
As cheap as you will find!
Debt is good when put to work
That's how pros invest
We sign upon the dotted line
And leave to Storm the rest

Our wealth increases monthly
The market's looking strong
With Storm advising us it seems
We really can't go wrong.
They've put us into further 'steps' 
To grow our wealth still faster
We're ten feet tall and bullet-proof 
We think not of disaster.

But wait, the market's going down
This doesn't look so healthy
If this keeps up we'll never reach
Our dream of being wealthy.
We call our friendly man at Storm
And tell him we want out
But he says "No, your thinking's wrong
It's not a market rout
While price is cheap we'll buy some more 
It's just a brief correction
I'll get you more investment funds
I'll use my bank connections"

Our house is valued up again
Our bank is keen to lend
The extra cash invested through
Our Storm adviser friend
We now possess more Indexed Funds 
The future's looking bright
The market's going up again
The Storm man got it right!
Both our bank and Storm are great
Without them we could never
Build our wealth and reach our goals
We'd struggle on forever

A few months later
Bulls are tired
The market goes no higher
Another urgent call to Storm
To speak to our adviser
He brushes off our grave concerns
Says "Leave it all to me
The market will bounce back again
Just wait a while - you'll see!"

The next 12 months are living hell
The market falls and falls
And Storm just sit upon their hands
No risk control at all
They should have cashed us months ago
To keep our wealth intact
Our LVR has blown out
The future's looking black

At last a phone call from our bank
With news that isn't funny
Our Indexed Funds have all been sold
And still we owe them money
We've been in margin call for weeks
HOW COME WE WEREN'T INFORMED???!!!
"Not our job" they say to us
"You should have talked to Storm"

We judge the banks immoral
For lending so much dough
And yet, they didn't force us
We could have told them 'NO'
No one pulled a gun on us
And said "SIGN HERE, OR ELSE!!!"......
The choice to borrow margin funds
Was taken by ourselves

As for Storm Financial
Incompetent for sure
But inner voices tell us
We should have watched them more
Made sure they were doing
What they were paid to do
Ensure they ran our business
The way we asked them to
Managers runs businesses
But owners always must
Ensure their manager's competence
Or else the show goes bust

Margin loans - a two-edged sword
Hindsight makes us wise
They magnified our profits
But hastened our demise
Made us heaps of money 
While markets kept on soaring
Multiplied our losses
When bears began their roaring
Should have properly checked them out
Found out so much more
Wiser now but much too late
The bank has closed our door 

Must admit it felt so good
To join the bullish rumble
Never really spared a thought
That markets just might tumble
Bears began to come awake
From their hibernation
Caused us many sleepless nights
Lots of consternation

Easy now to dish out blame
Say we weren't informed
True enough but even so
Not all blame is Storm's
Nor the bank's, for well we knew
Investment carries dangers
Part of blame belongs to us
Too much trust in strangers

Should have heeded warnings
GLOBAL MELTDOWN COMING
US BANKS ARE FAILING
BEARS HAVE STARTED RUNNING
Media warned us daily
Wish we'd liquidated
All of our investments
Shame we hesitated

Should have got ourselves at least
Some basic education
Found out how investments work
Controlled our situation

Little knowledge, too much dash
We didn't see it then
Not the way to grow our cash
Disaster in the end

Poorer now but wiser
Debt is quite substantial
Wish we hadn't trusted
Manny's Storm Financial


----------



## another one (30 October 2009)

GG.  Where did you find the photos.  The first one appears to be from the trip to Italy but the second?


----------



## Garpal Gumnut (30 October 2009)

another one said:


> GG.  Where did you find the photos.  The first one appears to be from the trip to Italy but the second?




Go to google.
Click images at the top.
Type in Emmanuel Cassimatis
Go
That was the HMS Pinafore one.

The second was sent me by Bill. He's a mate. I met him in a fumidor in a hotel in Little Rock one night before he became President.

gg



bunyip said:


> I bumped into an old mate at a school reunion earlier this year - turns out that he was caught up in the Storm Financial debacle.
> He lost serious money and has been left in debt, but is nevertheless confident of getting his life back on track.
> 
> Based on my recollection of what he told me, I thought I'd have a crack at putting his Storm experiences into verse.....




Thats a beaut poem bunyip, very relevant.

gg


----------



## another one (30 October 2009)

Sorry should perhaps introduce myself.  I have been following this site since Dec 08 but never posted before. Agree with some but feel some use it to grandstand and brag.  Solly, thankyou for your useful reporting.  GG appreciate your satire but your keyboard skills disappear on any postings after 10pm.  Would that be due to indulgence in liquid sustenance?  Julia appreciate your comments but feel you need to have an original thought. Know that some Stormers were driven by greed but the majority including myself just wanted to have a comfortable retirement. Agree that the SICAG site leaves a lot to be desired.


----------



## Solly (30 October 2009)

Ironhalo said:


> Solly, mention to your Stormer mate that people have started getting their compo deals looked at by CBA.
> 
> Six figure payouts,
> % cuts off residual loan amounts, and
> ...




Thanks mate, I've let him know that things are looking up. He's hasn't had any news yet.

We are sans XX tonight so it could turn ugly. I can't put in writing what he said about the subjects of the pics, otherwise Joe would disable my account and he's not very glowing about Sir Ralph either. At least he'll never go near a financial adviser again. 

I'd better go now I think they are now trying to hot wire Lady Penelope's Corolla. I don't want another night pleading for forgiveness at the Southport Watchhouse again


----------



## Solly (30 October 2009)

Garpal Gumnut said:


> Go to google.
> Click images at the top.
> Type in Emmanuel Cassimatis
> Go
> ...




gg, where are Bill's hands ..?

Just askin'...


----------



## Garpal Gumnut (30 October 2009)

another one said:


> Sorry should perhaps introduce myself.  I have been following this site since Dec 08 but never posted before. Agree with some but feel some use it to grandstand and brag.  Solly, thankyou for your useful reporting.  GG appreciate your satire but your keyboard skills disappear on any postings after 10pm.  Would that be due to indulgence in liquid sustenance?  Julia appreciate your comments but feel you need to have an original thought. Know that some Stormers were driven by greed but the majority including myself just wanted to have a comfortable retirement. Agree that the SICAG site leaves a lot to be desired.




lol.

Hang in there mate, it ain't over until the fat lady sings. you'll survive, you all will. I did after an attempted rootin by a financial adviser. 
Never bend over to a financial adviser.

gg


----------



## another one (30 October 2009)

Garpal Gumnut said:


> Go to google.
> Click images at the top.
> Type in Emmanuel Cassimatis
> Go
> ...




Thanks GG but what were Mr. & Mrs. A Hole doing with Bill? Do you know


----------



## Garpal Gumnut (30 October 2009)

Solly said:


> gg, where are Bill's hands ..?
> 
> Just askin'...




Yes, good question, they all have that "nobody knows what we're doing look about them"

I must admit Bill was a complete gentleman in the fumidor.

Notice that Manny has a flak jacket on and Bill doesn't.

gg


----------



## Julia (30 October 2009)

another one said:


> Julia appreciate your comments but feel you need to have an original thought.



I'm not in a position to have an 'original thought' when I don't know what happened.  The information offered from various sources, including many ex Storm clients posting on this forum, has been contradictory.   I am, therefore, dependent on what I read from other people, including the bank employees.

I'm grateful to you, Steve Bordern, for explaining the process engaged in betwen the client, Storm and the banks.  It's convoluted to say the least.

And, another one, perhaps you haven't bothered to read through the whole thread.  If you did, you would see that I have expressed plenty of 'original thought' re the wisdom or otherwise of anyone who became involved with Storm.

Perhaps you could give us some examples of what you consider would be 'original thought' regarding this thread?
And it would be good if you were to clarify if you have in fact read right through the thread.


----------



## Solly (30 October 2009)

another one said:


> Sorry should perhaps introduce myself.  I have been following this site since Dec 08 but never posted before. Agree with some but feel some use it to grandstand and brag.  Solly, thankyou for your useful reporting.  GG appreciate your satire but your keyboard skills disappear on any postings after 10pm.  Would that be due to indulgence in liquid sustenance?  Julia appreciate your comments but feel you need to have an original thought. Know that some Stormers were driven by greed but the majority including myself just wanted to have a comfortable retirement. Agree that the SICAG site leaves a lot to be desired.




No problem mate but I'm just the paperboy, the real credit is with, Anthony, Stuart, Kate, Duncan and all the other scribes. And a special little mention to Michael West right at the beginning when all this started to ramp up.


----------



## another one (30 October 2009)

Julia said:


> I'm not in a position to have an 'original thought' when I don't know what happened.  The information offered from various sources, including many ex Storm clients posting on this forum, has been contradictory.   I am, therefore, dependent on what I read from other people, including the bank employees.
> 
> I'm grateful to you, Steve Bordern, for explaining the process engaged in betwen the client, Storm and the banks.  It's convoluted to say the least.
> 
> ...




Sorry Julia, your advice is really practical but I would love to see a posting from you that is not just comments on other postings as I think you have a lot of sound advice to offer.  Even though I have been hit hard by Storm I am perhaps a bit blase' as you have often stated "do not put all your eggs in one basket" which I didn't so I will survive.  By the way it is Mate-ess GG & Solly


----------



## Solly (30 October 2009)

Garpal Gumnut said:


> Yes, good question, they all have that "nobody knows what we're doing look about them"
> 
> I must admit Bill was a complete gentleman in the fumidor.
> 
> ...




gg, I'm back on ASF again the boys are on the back deck discussing a old incident regarding a near miss with a DHC-2 Beaver and an outrigger, believe me I know how it ends. The kava bar story about the ex missionary will be next I'm sure. 

Anyway, do you think the pic is real ? Maybe it's been shopped ? I'm sure I've seen a similar pic with the Mandelas.


----------



## Julia (31 October 2009)

another one said:


> Sorry Julia, your advice is really practical but I would love to see a posting from you that is not just comments on other postings as I think you have a lot of sound advice to offer.  Even though I have been hit hard by Storm I am perhaps a bit blase' as you have often stated "do not put all your eggs in one basket" which I didn't so I will survive.  By the way it is Mate-ess GG & Solly



I'm sorry to hear you have been involved with Storm.

You haven't responded to my query as to whether you have read through the entire thread so I'll assume you haven't.
If you had, you would see that I have from time to time expressed my view about Storm's 'advice' and the wisdom or otherwise of anyone who did not check out for themselves how sensible such advice was.

However, there's a point where to further suggest what clients should have done or should do in the future seems like rubbing salt in old wounds,and  would likely be seen as being patronising or even unkind.

So, if you find my comments inadequate, then I expect I will just have to live with that.


----------



## another one (31 October 2009)

Julia, have read every thread since I found this site in Dec 08.  My only excuse for having been taken in by storm is time short to investigate everything fully and trusting an adviser that I had been with for 12 years


----------



## Harleyquin (31 October 2009)

Enjoyed the poetry Bunyip.  Well done.


----------



## Solly (31 October 2009)

*News Awards at the Sydney Opera House*

"Townsville Bulletin's Tony Raggatt was named Business Journalist of the Year for his series on the Storm Financial collapse."

I'm sure gg will be proud to hear a fellow Townsville-ite receiving such recognition ....


http://www.news.com.au/story/0,27574,26284569-421,00.html


----------



## Solly (31 October 2009)

*"Storm clients settle legal action amid revelations margin calls were not passed on"*

More by James Thomson on Smart Money;

http://www.smartcompany.com.au/financial-services-and-insurance/20091030-storm-clients-settle-legal-action-amid-revelations-margin-calls-were-not-passed-on.html


----------



## Solly (31 October 2009)

*"Macquarie Bank managing director Richard Sheppard defended the group's track record."*

More here on Business Spectator;
(Scroll to bottom of article)

http://www.businessspectator.com.au/bs.nsf/Article/Macquarie-optimistic-about-medium-term-outlook-pd20091030-XB55E


----------



## Solly (31 October 2009)

*"Macquarie refuses compensation to planner's clients"*

"Macquarie Group has resisted calls to provide compensation or establish an independent review of disputes for about 1000 margin lending clients caught out by the aggressive tactics of the financial planner Storm Financial."

More by Eric Johnson in the SMH here;

http://www.smh.com.au/business/macquarie-refuses-compensation-to-planners-clients-20091030-hprv.html


----------



## Solly (31 October 2009)

*"CBA's $800 million software switch"*

"The Commonwealth Bank of Australia (CBA) is implementing a new $800 million computer system it hopes will allow it to identify problems such as Storm Financial in its customer base."

More by Lucinda Beaman on Money Management here;

http://www.moneymanagement.com.au/article/CBA-s-800-million-software-switch/503927.aspx


----------



## Solly (31 October 2009)

*"S&G settles claims for CBA Storm clients"*

More on Financial Standard here;

http://www.financialstandard.com.au/news/view/27187/


----------



## Judd (31 October 2009)

Transcript from Parliamentary hearing of 28/10/2009 is now available

http://www.aph.gov.au/hansard/joint/commttee/J12433.pdf


----------



## Solly (31 October 2009)

Judd said:


> Transcript from Parliamentary hearing of 28/10/2009 is now available
> 
> http://www.aph.gov.au/hansard/joint/commttee/J12433.pdf




Thanks Judd, 
I've now sent the link to my Stormer mate.

CFS 24 (Page 30 of the PDF), the opening statement by Mr Norris is an interesting  read. I'd really like to hear EC's response to this.


----------



## mellifuous (31 October 2009)

Solly said:


> *"S&G settles claims for CBA Storm clients"*
> 
> More on Financial Standard here;
> 
> http://www.financialstandard.com.au/news/view/27187/




Good morning Solly,

An excerpt from your referenced media release:-

"... "While the details of individual settlements remain confidential, elements of some of the settled cases include cutting loan obligations, reducing interest rates and repayment obligations and waiving fees. ..."

I'm wondering what S & G's take is?

Does the CBA pay them direct, or does the client?

If the answers are top secret, then I'll understand if you don't answer. 

Normally their take is 30%, and of course, they always need more fuel for the corporate jet.

Thanks for the morning news - I enjoy it.


----------



## Solly (31 October 2009)

mellifuous said:


> Good morning Solly,
> 
> An excerpt from your referenced media release:-
> 
> ...




mellifuous, if you go here, 

http://www.slatergordon.com.au/pages/class_actions_stormfin.aspx

and have a look at the link

"CBA Scheme Legal Costs Frequently Asked Questions"

This should bring up the latest version, maybe I should buy shares in SGH


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## mellifuous (31 October 2009)

Solly said:


> mellifuous, if you go here,
> 
> http://www.slatergordon.com.au/pages/class_actions_stormfin.aspx
> 
> ...




Thanks Solly.. have a good one..


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## Grey Ghost (31 October 2009)

As usual solly is on the ball.


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## Grey Ghost (31 October 2009)

Garpal Gumnut said:


> Anyone know anything about these guys. A few of my mates are clients. They are Townsville based . I don't use advisers.
> 
> gg




Couldn't let this go by without acknowledging it.
It is exactly a year ago to the day (and almost to the minute if I've got my timing right) since Garpul Gumnut started this thread.
He has proved very incisive with a lot of things over the last 12 months but I bet even he didn't have any idea how things were going to unfold since he started this thread.  I won't rabbit on too much more except to say thanks to everyone for all your input especially solly who has done more than anyone else to keep us all up to date with his link postings and insightful comments.
To those adversely affected by all this my best wishes that you get a good outcome and keep fighting you deserve every bit of compensation you can get and more.
I can only hope that everyone is able to put this tragedy behind them before the 2nd anniversary of this thread rolls around.
Good luck and all the best to you all.


----------



## Ferret (31 October 2009)

Grey Ghost said:


> you deserve every bit of compensation you can get and more.




I have sympathy for many stormers (not all), but there is so much wrong with the feeling expressed in this quote.  

We all take risks when we invest.  Generally, the higher the risk, the higher the return.  Most stormers believed that storm would provided a high return.  Many stormers understood that they were taking a higher risk to get this return.  Plenty clearly understood that this higher risk was in the form of double gearing into the share market.

We all should take responsibility for our own actions.  When it goes wrong, we do not automatically deserve the right to be bailed out.  This right only belongs to those who were truly mislead, had their instructions ignored etc.


----------



## Harleyquin (31 October 2009)

Thanks Grey Ghost I have sympathy for all stormers too.  I don't understand everything that has occurred which has caused us all to lose so much but hopefully as the evidence continues to mount we will get to understand a little more each day.  What I do understand though is that we all wanted someone to help us invest our money sensibily and wisely and when the advisors first told us what they proposed I haven't spoken to one person who didn't question this method and yet our advisors assured us that this was safe, when you don't have the understanding to invest yourself or the time to learn you expect a licensed financial planner to be helpful.  Alas we have all been sadly mistaken.

Irrespective of who the 'blame' lies with, I hope the law continues to persue them until there is a decent cleaning up of the present system.  As an ex-client I now refuse to take any 'blame' for this, I will however say that I put my trust in a financial specialist, who has betrayed me trust in the most callous way.


----------



## bunyip (1 November 2009)

Ferret said:


> I have sympathy for many stormers (not all), but there is so much wrong with the feeling expressed in this quote.
> 
> We all take risks when we invest.  Generally, the higher the risk, the higher the return.  Most stormers believed that storm would provided a high return.  Many stormers understood that they were taking a higher risk to get this return.  Plenty clearly understood that this higher risk was in the form of double gearing into the share market.
> 
> We all should take responsibility for our own actions.  When it goes wrong, we do not automatically deserve the right to be bailed out.  This right only belongs to those who were truly mislead, had their instructions ignored etc.




I absolutely agree. 
While I sympathise with people whose lives and dreams have been dramatically changed by the Storm debacle, let's not forget that anyone who is considering an investment has a responsibility to do their own due diligence on that investment before going ahead with it.
In the midst of all the blame being levelled at Storm and the banks, let it not be forgotten that Storm investors did a poor job on due diligence. In fact it appears that many of them did no due diligence at all, preferring instead to leave everything to Storm.
Some of the blame rests with investors who took crazy risks without first putting in sufficient research to find out what they were getting themselves into.
This needs to be taken into account amidst the calls for compensation for Storm clients.


----------



## Harleyquin (1 November 2009)

Bunyip Ferret and anyone else who thinks along these lines, we will have to agree to disagree on this issue.  IMO when you are dealing with financial specialists irrespective of whether they are accountants, planners, advisors or banks they need to be ethically and morally responsible in dealing with their clients.  Their clients are not the financially educated.  Those of you on this forum who are lucky enough or whatever you call it to be financially savvy would never need to use their services, I'm educating myself, a little slowly and a little late perhaps, but if or when I get there I will have no need for their services either.  This idea that investors take responsibility is ludicrous.  What responsibility do these people take when they are charging us an arm and a leg for their so called professional services.  What professional services?

There a many many people out here in the real world who want someone they can trust, that's all they ask.  We have proof that we asked for a risk free investment and this proof will be used when and where needed.  I know that the majority of accountants, planners and banking people are genuine people but there are a lot of crooks amongst them and these need to be weeded out as much as possible.

These financial experts would all be out of a job if they had to rely on the Ferrets and the Bunyips of this world to survive!!!


----------



## mellifuous (1 November 2009)

bunyip said:


> I absolutely agree.
> While I sympathise with people whose lives and dreams have been dramatically changed by the Storm debacle, let's not forget that anyone who is considering an investment has a responsibility to do their own due diligence on that investment before going ahead with it.
> In the midst of all the blame being levelled at Storm and the banks, let it not be forgotten that Storm investors did a poor job on due diligence. In fact it appears that many of them did no due diligence at all, preferring instead to leave everything to Storm.
> Some of the blame rests with investors who took crazy risks without first putting in sufficient research to find out what they were getting themselves into.
> This needs to be taken into account amidst the calls for compensation for Storm clients.




What's so compassionate about being right?

From an outsiders perspective it seems that some storm investors understand things were not as simple as they were led to believe - like many other retail investors lacking skills that you seem to have, storm clients seem to have been trusting investors.

Remember retail investors aren't supposed to know about 'due diligence', they're not 'sophisticated' investors.

All of us have learnt a lot these past years, storm investors are no exception - many a learned investors has been taken down a peg or two since early 2008.

In any event, if any or all of an investor's loss is attributable to an entity or entities, then that their right to recover - no point sitting back and saying 'oh.. I didn't do due diligence, I'll give up'.


----------



## bunyip (1 November 2009)

Harleyquin said:


> We have proof that we asked for a risk free investment and this proof will be used when and where needed.




Harleyquin

You seem to hold the opinion that by going to a so called 'professional' for advice, you no longer had any responsibility to think for yourself.

Did you honestly believe there was such a thing as a 'risk free investment'?? 
I mean, c'mon....I know you had little knowledge of investment, but surely, even with your limited knowledge, just the tiniest bit of thinking would have told you that no investment is risk free - particularly when the investment is associated with the stockmarket.
Even if you'd had zero involvement with the stockmarket prior to getting tangled up with Storm, someone of your age must surely remember the 1987 crash. And you surely would have heard of the 1929 crash that led to the Great Depression of the 1930's.
You surely must have known that markets don't go up forever, that sometimes they go down, quite dramatically in fact. 
How then did you ever allow yourself to be convinced that any investment could be risk free? 

Some of you are bound to get stung again unless you change some of your thinking and attitudes.


----------



## Harleyquin (1 November 2009)

Bunyip I know I'm going over old ground here but I no longer care.  When I go to a professional ''anybody'' for advice, it's not a question of thinking for myself it's a question of listening to what the experts have to say, questioning them, weighing up the pros and cons etc etc etc.  When you are not a finance whiz that's all you can do.  All financial planners have to get us to fill out the paperwork so that they know what level of risk and reward we were prepared to take.  Over  the long term we wanted low risk and have filled out paperwork and signed it to this effect.

When I go to any other profession I would do the same and I discuss my options - that's what we did with storm

I've got a health problem - I go to a doctor.
I've got a problem with my teeth - I go to a dentist
I've got a problem with my car - I go to a mechanic
I've got a problem with my electrical appliances -  I go to an electrician

I had a problem with our finances - so I went to a financial planner...end of story.

All of the other professions guarantee their workmanship.
On storms paperwork they say they will look after our investment and that's what we paid them to do and personally I see nothing wrong with that.

Obviously we've all heard of the stock market crashes and yes I've never invested in shares prior to going to storm so when they suggested this strategy we had many concerns.  Namely 'what happens if there is a crash in the market'  Storms answer 'we employ a team of experts to constantly monitor your investment and we take advantage of the highs and lows in the market thus growing your investment', so we paid them and their team of experts to do what they said they do best.  

Reading this forum it is obvious that those of you who are astute investors do the same.  I know that I don't have the skills at present to do the investing, the monitoring and the growing but I was prepared to pay an expert to do that for me.  I don't want to risk my money with my limited knowledge of investment.  I placed my trust in a licensed professional and I still see nothing wrong with that and that's why I now refuse to 'take the blame' for this.  We paid someone who was supposedly far better at this than we could possibily have been.  Their investment strategy was ok with the financial organisations of this country and there are many who still say there is nothing wrong with this strategy.

The problem I have is with the extremely high level of risk - we asked for a low risk investment.

I have a problem with the lack of monitoring of our investment on their part - they promised us they would do that and we paid them to do it.

I have a problem with the fact that they didn't 'grow' our investment by selling high and buying low.

I have a problem with the fact that they were able to borrow enormous sums of money without us ever seeing or contacting a bank.

I have a problem with the lies that have been told to cover their own incompetence.

We were told by storm not to interfere in the way that they invested into and out of the market because it was better for us to trust them as they knew what they were doing - I was more than happy to let their experts do the job they were 'trained' for - now we are finding out that very few of them were trained in anything

I have a problem with the level of corruption and fraud which was obviously part of this debacle.

I have a problem with many things in relation to this investment need I go on.

If you are an astute investor and you know how to monitor or whatever you do best that's fine I'm very happy for you but we are not all the same.  I need to find someone to help me and I'm having trouble trusting anyone ever again.

If I was a high risk investor who understood all of this I wouldn't be sitting here wondering where it all went wrong, I would have don't something about it long before any of this happened.


----------



## Julia (1 November 2009)

Harleyquin said:


> I've got a health problem - I go to a doctor.
> I've got a problem with my teeth - I go to a dentist
> I've got a problem with my car - I go to a mechanic
> I've got a problem with my electrical appliances -  I go to an electrician
> ...



First I've heard of all other professions guaranteeing their workmanship.

Perhaps I might now go back to all the doctors who have misdiagnosed many health problems, the vet who failed to correctly diagnose my dog, thus allowing her to die, the dentists who have offered shonky work, the mechanics who - despite charging  extraordinary amounts - have failed to adequately do the basic work required, and claim compensation from all of them!

And, hell, we haven't even considered lawyers!

The good news is that I don't think any electrician has ever failed to do what he was paid for on time and as quoted.

Harleyquin, if you seriously imagine consulting any so called professional in any capacity means it absolves you from any responsibility whatsoever for evaluating the common sense aspect of their advice, then I agree with Bunyip that you're doomed to repeat your mistake.


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## bunyip (1 November 2009)

Harleyquin said:


> Bunyip I know I'm going over old ground here but I no longer care.  When I go to a professional ''anybody'' for advice, it's not a question of thinking for myself it's a question of listening to what the experts have to say, questioning them, weighing up the pros and cons etc etc etc.  When you are not a finance whiz that's all you can do.  All financial planners have to get us to fill out the paperwork so that they know what level of risk and reward we were prepared to take.  Over  the long term we wanted low risk and have filled out paperwork and signed it to this effect.
> 
> When I go to any other profession I would do the same and I discuss my options - that's what we did with storm
> 
> ...




You seem to be absolutely 100% convinced that your thinking was sound when you went to Storm. 

By all means continue with your belief that all the blame belongs to someone else.
I won't waste any more of my time trying to convince you otherwise.


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## oztrades (1 November 2009)

Firstly as a professional I carry indemnity insurance to cover myself in regards to risks. Did Storm, as professional investment advisors, have this insurance as I haven't heard any word of this?

Secondly I have a busy professional life so I either have no time or inclination to pursue certain activities in life. However I would always ask myself is this project and its outcomes reasonable. Also as this involves my money I should get a second opinion and give myself time to be comfortable with the project. Do my practitioners make my life easier or harder while the project is going along?

Finally I agree that we should be able to go to professionals and receive impartial, commonsense and advantageous support from them. However in the real world this just doesn't seem to exist, so we must be careful otherwise we should just do it ourselves and save the fees. The failure of professionals must discredit its very own industry and highlights the ever growing demand for more enforcement and regulation.

NB: Even though I am not a lawyer, we all have redress through our own actions or the Law. Your professionalism determines your avenue in those cases.


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## Judd (1 November 2009)

bunyip said:


> You seem to be absolutely 100% convinced that your thinking was sound when you went to Storm.
> 
> By all means continue with your belief that all the blame belongs to someone else.
> I won't waste any more of my time trying to convince you otherwise.




Me thinks that you/we/others are wasting our time, bunyip.  However, next time that people arrange for tax return to be submitted through an accountant, ie a finance professional to whom fees are paid, try telling the ATO that it was the accountant's fault that the income has been understated, etc, etc.

Blah, blah, blah and so on and so on.


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## Harleyquin (1 November 2009)

You're quite right you will never convince me that I am wrong.  I have been fortunate not be have a misdiagnosis with a health professional.  As a dog lover Julia I would be extremely angry with the vet unless it was a difficult diagnosis but I certainly wouldn't blame myself and I'm not blaming myself with storm either.  I'm sure there are professionals who aren't as professional as they should be and we found the ultimate sinner in storm and their partners in crime.  When you pay a professional for his or her advice and they agree to look after you, I expected just that - to be looked after and our wishes taken into consideration.  They weren't and we have been devastated in the most devastating way possible with their so called one size fits all investment strategy which we only became aware of how risky it could be after they crashed, we had no idea.  I was so sure they would gear our investment to suit our needs...they didn't...and I am extremely angry and feel that I have every right to be.


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## Harleyquin (1 November 2009)

Oztrades as I understand it from media reports storm did have about 20 million in indemnity insurance but because of the circumstances surrounding storms collapse we are yet to see what insurance will be paid.  As there is reportedly 3 billion lost by investors we'll be lucky to see a cent in the dollar!!!  It has also been reported that storm took out some form of insurance after they became insolvent but before they crashed which is apparently highly illegal...and which is proving to be one of many illegal 'acts.'


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## oztrades (1 November 2009)

Harleyquin
I respectfully suggest you stop posting and contact the administrators and direct your attentions there.


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## Ferret (2 November 2009)

Harleyquin said:


> we had no idea




Harleyquin,

This theme runs through all your posts.  It is not an excuse for you losing money - it is the reason.  

If you persist in believing you can hand all responsibility for your financial affairs to others, you are certainly going to get hurt again.


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## bunyip (2 November 2009)

oztrades said:


> Harleyquin
> I respectfully suggest you stop posting and contact the administrators and direct your attentions there.




Harleyquin

I too respectfully suggest that you stop posting on this forum. Your constant diatribe about how you're absolutely blameless is starting to wear a bit thin, as is your continual ranting about how all the blame belongs to others.
You were fed a lot of unrealistic nonsense by Storm....nonsense that you swallowed, hook line and sinker. You came in like the tide. You didn't work on the common sense principle that if it sounds too good to be true, then it probably _*is*_ too good to be true.  
Investment knowledge or no investment knowledge, if you'd employed just a small amount of thought and common sense, you would have seen right through the charade that was Storm Financial.
In the world of finance and investment, money flows from gullible and uninformed people to those who are knowledgeable and informed. If you want to join the latter group, then your thinking and attitudes need to change.
The people whose ideas you describe as ludicrous are the ones who were cluey enough to avoid getting reeled in by Storm Financial. They're the ones who got out of the market at the appropriate time with the bulk of their profits intact. Some of them even played the short side and raked in handsome profits from the falling market. (yes, falling markets _*do*_ offer significant profit opportunities for those who know how to play them).
Maybe, just maybe, these people are the ones you should be listening to and learning something from, rather than disagreeing with them.


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## bunyip (2 November 2009)

mellifuous said:


> In any event, if any or all of an investor's loss is attributable to an entity or entities, then that their right to recover - no point sitting back and saying 'oh.. I didn't do due diligence, I'll give up'.




Neither I nor anyone else I'm aware of is suggesting that you sit back and make no effort to recover whatever losses you incurred as a result of illegal activity by any party.
We're simply saying that it's unrealistic to toss all the blame on to someone else, while at the same time accepting no blame yourselves for the various stuff ups you made.
Yes, Storm stuffed up big time, and to some extent the banks stuffed up too. But so did you Stormers. 
All three of you....yourselves, banks and Storm, are responsible for the mess you now find yourselves in.
Put forward whatever arguments you want, but nothing changes those facts.


----------



## mellifuous (2 November 2009)

bunyip said:


> Neither I nor anyone else I'm aware of is suggesting that you sit back and make no effort to recover whatever losses you incurred as a result of illegal activity by any party.
> We're simply saying that it's unrealistic to toss all the blame on to someone else, while at the same time accepting no blame yourselves for the various stuff ups you made.
> Yes, Storm stuffed up big time, and to some extent the banks stuffed up too. But so did you Stormers.
> All three of you....yourselves, banks and Storm, are responsible for the mess you now find yourselves in.
> Put forward whatever arguments you want, but nothing changes those facts.




Oh.. I'm not a 'stormer', I did my dough with City's FMF, and I'm working to get some of back - but, I'm far from poor and I didn't throw in any of my property.  I come here to learn and participate where possible.

I just think you're being hard on people who (1) feel the need to grieve about their substantial losses, and (2) are seeking restitution from those believed at fault.  A lot of 'stormers' were financially decimated by Storm.

If I was a 'stormer' I'd be out to get as much as I could back from whomever I could - that's a natural reaction.  I can see the reality of risking homes, but nevertheless, if the banks and Storm at fault, then they should pay.

Look, I kick my toe on a something I don't see, and I blame the object I kick - what is so humanly wrong in externalizing blame anyway?   

Acceptance of loss takes time - for some it's relatively quick, for others it takes time.

I can see that on this thread there a people whose lives have been shattered, there is no point 'manhandling' them into 'reality'.

My point, is this  - so, what if you're right? so what? It doesn't matter.

Sometimes being right simply doesn't matter.


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## Solly (2 November 2009)

mellifuous said:


> Oh.. I'm not a 'stormer', I did my dough with City's FMF, and I'm working to get some of back - but, I'm far from poor and I didn't throw in any of my property.  I come here to learn and participate where possible.
> 
> I just think you're being hard on people who (1) feel the need to grieve about their substantial losses, and (2) are seeking restitution from those believed at fault.  A lot of 'stormers' were financially decimated by Storm.
> 
> ...




mellifuous, I spent quite a long time with a Stormer on Saturday, some mates shouted him a few drinks and hopefully, provided a distraction from the quagmire that he is in. 

He knows he would do things differently if he had his time over again. He chose Storm as he thought all the safety levers were in place and because there were other reputable companies involved. He's still shell shocked and very worried about the family's future.

I know if I was has in his shoes I'd be grasping at any straw or faint glimmer of hope that could extradite me from this event. I agree there's no benefit in bringing up how this all happened, there's only benefit in determinedly marching forward out of all of this.

I believe that it will be a busy day at Harry's place today.


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## Judd (2 November 2009)

Solly said:


> .......He knows he would do things differently if he had his time over again. He chose Storm as he thought all the safety levers were in place and because there were other reputable companies involved. He's still shell shocked and very worried about the family's future.
> 
> I know if I was has in his shoes I'd be grasping at any straw or faint glimmer of hope that could extradite me from this event. I agree there's no benefit in bringing up how this all happened, there's only benefit in determinedly marching forward out of all of this.




I understand the sentiments expressed and if I were in a similar position, I'd be pursuing compensation as well.  You'd be even more derelict in respect of your family's position if you didn't.

And while there are those who don't, most Storm posters indicate they now accept some portion of blame.  OK, I can see both sides.  I don't necessarily agree with one position but so be it.

And, the more terrible thing is that Stormers, like your mate, have had their trust shattered.  Been with Manny for 5,10, 15 years and everything he said worked before so why wouldn't it work now?  Yep, my brain can accommodate that attitude.

And, I am not being rude about Townsville here, but it is not the "Big Smoke" and so word of mouth would get around how great is this product.  Read in one of your links where, in a small rural town, people were talking down at the pub about Storm and how you'd be stupid if you didn't get it to it.  So it is possible to see how individuals could be seduced.

However, the one thing that my mind can not accommodate is the concept that debt was apparently never to be repaid but always increased.  I'd be packing myself every time I opened a statement wondering how on earth I was going to get rid of the debt. That is the part that sort of stuns me, but then I dislike owing money.


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## Julia (2 November 2009)

mellifuous said:


> Look, I kick my toe on a something I don't see, and I blame the object I kick



Hmm.  I'd have thought you'd blame yourself for not looking where you were going.


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## Solly (2 November 2009)

Judd said:


> I understand the sentiments expressed and if I were in a similar position, I'd be pursuing compensation as well.  You'd be even more derelict in respect of your family's position if you didn't.
> 
> And while there are those who don't, most Storm posters indicate they now accept some portion of blame.  OK, I can see both sides.  I don't necessarily agree with one position but so be it.
> 
> ...




Judd my mate's from the Brisbane area so there were plenty of other financial opinions available to him. He had a previous solid relationship with his adviser before the business became Stormified. I don't believe it was an affinity scam but I do believe he placed a lot of trust in the advice that was given. 

I too found the concept strange about the debt never having to be paid down. He did ask me to attend a Storm info session a couple of years ago, I declined as I wasn't interested as I was happy with my structuring. I now wish I had attended this session, I would have asked many, many  questions about the methodology proposed and would have definitely packed a spare set of underpants 

I've now got to align the azimuth on the sat dish, I feel there will be a lot to send on the uplink today


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## mellifuous (2 November 2009)

Julia said:


> Hmm.  I'd have thought you'd blame yourself for not looking where you were going.




no way, externalization of blame protects the ego... 

I'm infallible, the object is at fault.

&#$% objects, why do they cause me such grief?


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## MB73 (2 November 2009)

I am new to this post, but i am very well across the affairs of Storm.  I must say I think some of you are a bit harsh on Harlequin and are missing one crucial point.  I think Harlequin has probably missed it too or not communicated it too well.  The point is this:

Stormers paid good money to a professional (presumably because they did not have the skills) for a financial plan.  Amongst other things that plan had certain parameters to be maintained.  One of those important parameters was the maximum LVR.  At the end, the financial adviser (ie Storm) did not stick to the plan that was presented to their client.  This is where I believe a stormer could absolve themselves from responsibility.  

An anology - If a doctor told you he was going to remove your tonsils, but then performed a labotomy, i think you would be pretty unhappy (well, if that was possible!!).

I think the Stormers took some risk possibly knowing that they could lose some money, never expecting that they could lose everything because their adviser did not follow their own model.

I know some of you will say that these people should have been following their own investments etc.  Just remember that the typical Stormer is financially uneducated and/or a pensioner.  The dramatic falls in the market led to a situation where these people did not / could not concieve what was happening or did not know how to act and therefore had to rely on the person they paid to look after them.


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## Judd (2 November 2009)

My my, it seems there are also little pixies at the bottom of the garden or at least someone is living in fantasy land.

http://www.news.com.au/couriermail/story/0,23739,26293330-3122,00.html




> *Storm directors 'leased aircraft but client software unimproved'*
> Article from: The Courier-Mail
> 
> Anthony Marx
> ...


----------



## bunyip (2 November 2009)

Julia said:


> Hmm.  I'd have thought you'd blame yourself for not looking where you were going.




LOL......I would have thought so too.
He who kicks toe on object should bloody well watch where he's going! 

But there are always some people who kick their toe again. And again. And again.....
In fact I reckon we have a few of them right here on this forum!


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## mellifuous (2 November 2009)

Julia said:


> Hmm.  I'd have thought you'd blame yourself for not looking where you were going.




Well, actually, it was a metaphor - a simple example of the way that a lot of 'stormers' are reacting - externalizing blame.

I hope ye who scoff are not counted in  those who blame others for their own mistakes, because it is they who blame others that are the ones the metaphor relates to.

oooOOOooo


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## bunyip (2 November 2009)

mellifuous said:


> Oh.. I'm not a 'stormer', I did my dough with City's FMF, and I'm working to get some of back - but, I'm far from poor and I didn't throw in any of my property.  I come here to learn and participate where possible.




Ah yes......City Pacific - saturation advertising in magazines and newspapers, offering interest rates up to 3% above bank term deposits. 
No shortage of unsuspecting victims to reel in - hardly surprising when it all came tumbling down.

Common sense - if it sounds too good to be true.........etc etc.


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## mellifuous (2 November 2009)

bunyip said:


> Ah yes......City Pacific - saturation advertising in magazines and newspapers, offering interest rates up to 3% above bank term deposits.
> No shortage of unsuspecting victims to reel in - hardly surprising when it all came tumbling down.
> 
> Common sense - if it sounds too good to be true.........etc etc.




yep.. done like a dinner... all admitted up front.
I lost heaps, and i was just as stupid as people here that lost
and just as stupid as people in octaviar who lost
and just as stupid as the folks in westpoint
and acr
and centro
and ..
and..


----------



## Solly (2 November 2009)

*"Investors pay price as Storm staff take to skies"*

"Mrs Cassimatis told the court Storm had its own tailored financial data software which it used to keep track of clients' investments.

She said she was unaware whether the company had sought the inclusion of a feature in the software that would have alerted Storm advisors when clients' margin-loan-to-value ratios plunged into margin call territory."

More by Christine Kellett on brisbanetimes.com.au;

http://www.brisbanetimes.com.au/business/investors-pay-price-as-storm-staff-take-to-skies-20091102-hssi.html


----------



## Harleyquin (2 November 2009)

I have no intention of not posting again.  When I pay someone who advertises on TV as storm did to come in and see them and they would look after us financially, I expected just that and paid them darn good money for their so called 'expertise.'  I have days when of course I blame myself and days when I don't and try to forgive myself for getting sucked in by a con artist and company.  I'm well aware that it's possible to make good money on a falling market as our storm advisor told us they would take advantage of a falling market...another lie.... and I would expect that there are many of you who have taken advantage of this.  I've never bought a share in my life and wouldn't know where to start.  Now that storm has collapsed we are floundering as far as a financial plan for the future goes, we have none and little hope of ever having one again.  

I am educating myself financially and now know a lot more than I did a couple of years ago.  I believed that it was possible to go to a financial planner and they would look after our financial needs as that's what we were paying them for.  Nowadays I wouldn't even pay a financial planner a visit.  I will be seeking compensation from all of those who have helped to destroy us as destroy us they have.  We like so many other retirees and near retirees will no longer own a home or be able to travel we will be totally reliant on all of you who are making a mint on a falling market to support us.  Keep making the millions as our government is going to need all the money it can to support the thousands of us left destitute by this collapse.


----------



## Garpal Gumnut (2 November 2009)

Grey Ghost said:


> Couldn't let this go by without acknowledging it.
> It is exactly a year ago to the day (and almost to the minute if I've got my timing right) since Garpul Gumnut started this thread.
> He has proved very incisive with a lot of things over the last 12 months but I bet even he didn't have any idea how things were going to unfold since he started this thread.  I won't rabbit on too much more except to say thanks to everyone for all your input especially solly who has done more than anyone else to keep us all up to date with his link postings and insightful comments.
> To those adversely affected by all this my best wishes that you get a good outcome and keep fighting you deserve every bit of compensation you can get and more.
> ...




Thank you for your kind words Grey Ghost.

Unfortunately for Stormers, I did have a good idea of how things would unfold, as I had been scammed many years ago in a similar show, my first and only contact with a financial planner. I recovered and have never been to one since. 

The word was out in Townsville that Storm was a potential basket case the week I posted. I had no inside knowledge, but in a small rich city like this , word travels fast. 

That was what prompted me to start the thread, to get the fish a moving with some burley, and to find out where they lurked. 

The whole thread escalated from there thanks to all the incisive posters who followed on. 

gg



MB73 said:


> I am new to this post, but i am very well across the affairs of Storm.  I must say I think some of you are a bit harsh on Harlequin and are missing one crucial point.  I think Harlequin has probably missed it too or not communicated it too well.  The point is this:
> 
> Stormers paid good money to a professional (presumably because they did not have the skills) for a financial plan.  Amongst other things that plan had certain parameters to be maintained.  One of those important parameters was the maximum LVR.  At the end, the financial adviser (ie Storm) did not stick to the plan that was presented to their client.  This is where I believe a stormer could absolve themselves from responsibility.
> 
> ...





MB73, all your points are valid and worthwhile reiterating to the opposing camps in the recent posts. I would like to add some of my own views as a Townsville resident familiar with investors in Storm and since last year with the Storm Model.

The investors in the Storm model were to a large degree unsophisticated and led by the spin proferred by Manny and the crew of HMS Pinafore. Pensioners, small business people, workers and retirees, flocked to Storm over the years. They were driven by word of mouth and spin. 

The model was initially very successful but did not plan for a dramatic market fall. The punters believed it would never end and it became like a religion. Family members were enrolled or looked at askance if they declined to invest. It was all too good to be true.

The inevitable fall was what Manny calls a Black Swan event. It was not a black swan event or any other event but a natural fluctuation in the markets which has been occurring for centuries.

The criminal negilgence in the mismanagement of the clients LVR's is what has left the Stormers losing everything, by putting their homes up as collateral and not liquidating the loan in time. Whether this is Storm's fault or the Banks will be played out in the courts.

The average unsophisticated Storm client would have trusted Storm as much as they would their doctor, and that is why so many have been bewildered and unable to move on from this affair. This is in part due to their age, their lack of financial education and in some a blind belief that Manny was correct and done in by the banks. 

By the way, some investors were "sophisticated" and did not suffer as much as others, and also many "unsophisticated" had been with Storm for many years, and had done well. They in turn lost more relatively than others, but made it initially on the back of a crook model.

gg


----------



## Solly (2 November 2009)

gg, I find it interesting that Storm states that they were not responsible
for monitoring margin loans and I believe that Phormula had no ability to do so.

The prospectus states this,

"Storm’s strong relationships with financial services providers
enables it to gain, on behalf of clients, access to competitive
fees, interest rates and facilities from suppliers of debt and
related investment products. These benefits enhance the
return to Storm clients.

Storm recognises the need to preserve its clients’ core assets
and lifestyle and takes an active approach to monitoring its
clients’ financial situation. Consequently, Storm establishes
what it considers to be conservative MLVRs for clients *and
actively manages client debt positions (including maintaining
and managing cash reserves as appropriate) to avoid margin
call events and other risks associated with using leverage.
Storm monitors the MLVR position of its clients on an
ongoing basis, and responds to opportunities associated with
market volatility*..."


----------



## Garpal Gumnut (2 November 2009)

Solly said:


> gg, I find it interesting that Storm states that they were not responsible
> for monitoring margin loans and I believe that Phormula had no ability to do so.
> 
> The prospectus states this,
> ...




Its there in black and blue, mate for all to see.

I doubt if any bank could be held responsible on that one paragraph alone, which was printed when Storm tried to list, detailing their alleged active management of clients LVR's.

Then I'm not a lawyer.

gg


----------



## Julia (2 November 2009)

Harleyquin said:


> I have no intention of not posting again.  When I pay someone who advertises on TV as storm did to come in and see them and they would look after us financially, I expected just that and paid them darn good money for their so called 'expertise.'  I have days when of course I blame myself and days when I don't and try to forgive myself for getting sucked in by a con artist and company.  I'm well aware that it's possible to make good money on a falling market as our storm advisor told us they would take advantage of a falling market...another lie.... and I would expect that there are many of you who have taken advantage of this.  I've never bought a share in my life and wouldn't know where to start.  Now that storm has collapsed we are floundering as far as a financial plan for the future goes, we have none and little hope of ever having one again.
> 
> I am educating myself financially and now know a lot more than I did a couple of years ago.  I believed that it was possible to go to a financial planner and they would look after our financial needs as that's what we were paying them for.  Nowadays I wouldn't even pay a financial planner a visit.  I will be seeking compensation from all of those who have helped to destroy us as destroy us they have.  We like so many other retirees and near retirees will no longer own a home or be able to travel we will be totally reliant on all of you who are making a mint on a falling market to support us.  Keep making the millions as our government is going to need all the money it can to support the thousands of us left destitute by this collapse.



Harleyquin, you have said all the above many, many times before.
I'm curious as to why you are determined to keep posting this on ASF?
It can't be unknown to you that several ASF members are becoming irritated by your repetitive protestations.

It's surely clear to you that ASF is not a support group for disaffected Storm clients.  You have SICAG for your emotional support and you have long extolled the virtues of that organisation.

Human beings repeat behaviour that they find rewarding.
What then do you actually get out of posting on here?


----------



## Solly (3 November 2009)

*"Storm founder points finger at CBA"*

"STORM FINANCIAL's founders Julie and Emmanuel Cassimatis planned to use a slice of the $2 million dividend they paid themselves in the days before the company's collapse to sue the Commonwealth Bank, a court has been told.

Yesterday Mrs Cassimatis used a public inquiry into Storm's spectacular failure to criticise the bank."

More by Christine Kellett in the SMH here;

http://www.smh.com.au/business/storm-founder-points-finger-at-cba-20091102-htf1.html


----------



## Solly (3 November 2009)

*"Hardship denials still an issue: SICAG
CBA resolution process painless"*

"A number of ex-Storm clients are finding the CBA resolution scheme process offers closure, though not all, according to SICAG"

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7767.htm


----------



## Solly (3 November 2009)

*"Storm head Julie Cassimatis denies getting email about $2m transfer"*

"STORM Financial principal Julie Cassimatis claimed yesterday she never received an email sent by the company's chief financial officer which said she and her husband were not entitled to the $2 million they took out of the company as it faced insolvency."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26297116-643,00.html


----------



## Solly (3 November 2009)

Harleyquin said:


> I have no intention of not posting again.  When I pay someone who advertises on TV as storm did to come in and see them and they would look after us financially, I expected just that and paid them darn good money for their so called 'expertise.'  I have days when of course I blame myself and days when I don't and try to forgive myself for getting sucked in by a con artist and company.  I'm well aware that it's possible to make good money on a falling market as our storm advisor told us they would take advantage of a falling market...another lie.... and I would expect that there are many of you who have taken advantage of this.  I've never bought a share in my life and wouldn't know where to start.  Now that storm has collapsed we are floundering as far as a financial plan for the future goes, we have none and little hope of ever having one again.
> 
> I am educating myself financially and now know a lot more than I did a couple of years ago.  I believed that it was possible to go to a financial planner and they would look after our financial needs as that's what we were paying them for.  Nowadays I wouldn't even pay a financial planner a visit.  I will be seeking compensation from all of those who have helped to destroy us as destroy us they have.  We like so many other retirees and near retirees will no longer own a home or be able to travel we will be totally reliant on all of you who are making a mint on a falling market to support us.  Keep making the millions as our government is going to need all the money it can to support the thousands of us left destitute by this collapse.




Harleyquin, I'm interested to know how you were introduced to Storm. Was it a referral, media advertising, previous association to a Fin Adviser... ?


----------



## Julia (3 November 2009)

From one of the articles above:



> "The feedback that we're getting is that they [resolution interview process] are proving to be quite painless, there was some debate initially whether or not our members should demand a face-to-face but as it unrolls we're determined that they are fairly innoxiously," Investors Consumer Action Group (SICAG) joint chairman Mark Weir said.




Can anyone translate Mr Weir's comment?   Innoxiously?


----------



## Solly (3 November 2009)

Julia said:


> From one of the articles above:
> 
> Can anyone translate Mr Weir's comment?   Innoxiously?




Julia, I can only speculate but my (non-SICAG) Stormer mate was initially a bit concerned about a phone interview with the bank regarding his personal position but the interview went ahead well. I believe he has received no further news or progress yet.


----------



## Solly (3 November 2009)

Garpal Gumnut said:


> Its there in black and blue, mate for all to see.
> 
> I doubt if any bank could be held responsible on that one paragraph alone, which was printed when Storm tried to list, detailing their alleged active management of clients LVR's.
> 
> ...




gg, I believe that this is why my Stormer mate placed so much faith in the Storm model. He had confidence that all the back end systems were in place to monitor and take appropriate action to protect his investment. He did send his money off for the IPO but luckily it was returned. 

I wish I had read his copy of the prospectus before he got involved. In hindsight there are a few details in it I would have sort further professional advice on and I also would have given it to some of my non-professional mates for a smell test.

I'm always questioning of so called software systems that monitor the markets.


----------



## Solly (3 November 2009)

*" 'Clients were hysterical, we were hysterical' "*

"Mrs Cassimatis yesterday used a public inquiry into Storm's spectacular failure to tip a bucket on the bank, accusing it of providing "useless" financial data, orchestrating a damaging media campaign and refusing to throw floundering clients a lifeline when it became clear the value of their investments had dived."

More by Christine Kellett on brisbanetimes.com.au;

http://www.brisbanetimes.com.au/business/clients-were-hysterical-we-were-hysterical-20091102-htib.html


----------



## Solly (3 November 2009)

*"Slaters settles Storm claims"*

http://www.thenewlawyer.com.au/article/Slaters-settles-Storm-claims/504091.aspx


----------



## shibby (3 November 2009)

Solly said:


> *"Storm head Julie Cassimatis denies getting email about $2m transfer"*
> 
> "STORM Financial principal Julie Cassimatis claimed yesterday she never received an email sent by the company's chief financial officer which said she and her husband were not entitled to the $2 million they took out of the company as it faced insolvency."




Isn’t Julie a little gem, she would sell any one down the river wouldn’t she,
I will never know why the Storm staff  have been so loyal to this couple when obviously it could never be returned. They will only ever save their own necks, if that means lying, or feigning memory loss, well so be it.

Is there anyone out there who reads this forum that knows anything about the relationship between Storm Financial and Macquarie Bank? Would it be possible to please post it on the web or contact me directly?

For instance why did Mr. Shepherd from Macquarie assume that Macquarie must notify Storm in cases of margin call over notifying their clients directly?

The sweetheart deal that Storm had with Macquarie was governed by the amount of money that Storm had brokered for Macquarie. Does anyone know anything about the finer points of that arrangement?

All we need is just any little bit of information that you are aware of so that it can point us in the right direction no matter how small, that information might just lead to a much larger bit of information.  
There were over 1000 Storm Financial clients with Macquarie who have been decimated over that arrangement of not being contacted directly by Macquarie when the LVR reached 80%. 

Some clients were completely sold out at the bottom of the market, even when their LVR’s were only 60%. Who made that decision was that a Storm decision or a Macquarie decision? As you know Macquarie was selling the margin loan side of the business.

Does anyone have any ideas on what actually took place?

Any information would be gratefully received.


----------



## Solly (3 November 2009)

*"Storm email not received"*

More in The Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/11/03/91141_news.html


----------



## Judd (3 November 2009)

shibby said:


> Does anyone have any ideas on what actually took place?
> 
> Any information would be gratefully received.




I assume you have not followed the link in Post #4196.  Other than that I have no knowledge of the matter.


----------



## Judd (3 November 2009)

The one thing I haven't raised as I thought it was obvious is the issue of what happens to a margin loan, eg provided by Macquarie, when a product provider, eg Challaneger/CGI, decide to wind-up a product, eg, Storm-badged indexed fund.


----------



## Steve Borden (3 November 2009)

Judd said:


> The one thing I haven't raised as I thought it was obvious is the issue of what happens to a margin loan, eg provided by Macquarie, when a product provider, eg Challaneger/CGI, decide to wind-up a product, eg, Storm-badged indexed fund.




Judd

The same as if the client or the margin lender had sold them, the funds are kept as cash cover for the loan until either the loan is repaid or if there was enough cash, the client re-entered the market.


----------



## Judd (3 November 2009)

Thank you.  It is as I thought in that it would be relatively easy in those circumstances to go from say 60% gearing to 100% debt.


----------



## shibby (3 November 2009)

Judd said:


> I assume you have not followed the link in Post #4196.  Other than that I have no knowledge of the matter.




Well you assumed incorrectly.Thank you for that link I did download it at the time and I actually watched the direct telecast for the whole hour on my computer as well. 
I wanted a little bit more background information than what has been diclosed publically. 
To be frank I don't believe Macquarie, I think there is more to the relationship than has been disclosed so far.


----------



## Monario (3 November 2009)

Has anyone heard anymore on the Unregistered MIS front? This is a big one for E&J Cassimatis, I would love to hear anyones info on it. Would be hard to prove but if it is, someone is going to be in a depth of Poo in which I would not like to be placed.


----------



## specialed (3 November 2009)

Julia said:


> From one of the articles above:
> 
> 
> 
> Can anyone translate Mr Weir's comment?   Innoxiously?




I think you'll find the journo cant spell...innocuous (adjective) innocuously (adverb) ........having little or no adverse or harmful effect; harmless


----------



## specialed (3 November 2009)

Julia said:


> Harleyquin, you have said all the above many, many times before.
> I'm curious as to why you are determined to keep posting this on ASF?
> It can't be unknown to you that several ASF members are becoming irritated by your repetitive protestations.
> 
> ...




Tad harsh Juila...I can assure you harleyquin is not the only one repeating themselves on this forum, and as for ASF members becoming irritated by her procrastinations, They can always leave. I can also be sure that many other ASF members, including myself get irritated by the many inaccurate, often malicious comments that are made which appear to be posted for no other reason then to stir people up. Nevertheless we accept peoples right to contribute and voice their opinions regardless of how ridiculous the statement is and ihow silly it makes them appear.........


----------



## Julia (3 November 2009)

specialed said:


> I think you'll find the journo cant spell...innocuous (adjective) innocuously (adverb) ........having little or no adverse or harmful effect; harmless



Ah, thank you, specialed.  Yes that would be it.



specialed said:


> Tad harsh Juila...I can assure you harleyquin is not the only one repeating themselves on this forum, and as for ASF members becoming irritated by her procrastinations, They can always leave. I can also be sure that many other ASF members, including myself get irritated by the many inaccurate, often malicious comments that are made which appear to be posted for no other reason then to stir people up. Nevertheless we accept peoples right to contribute and voice their opinions regardless of how ridiculous the statement is and ihow silly it makes them appear.........



You have missed my point.  This was that ASF is NOT a support group.
It's a forum, i.e. a place where people have a frank exchange of views.

Various Stormers, Harleyquin very much included, have sung the praises of SICAG and suggested that they have had wonderful emotional support from that source.

So I'm genuinely puzzled as to why anyone would want to be apparently masochistic enough to continue posting on a Forum where there is obviously a considerable volume of criticism in response.

I think most of us have at various times expressed sympathy for the predicament in which Stormers find themselves, and some of us have contacted some Stormers privately in an effort to be helpful.

But it's not our role to blindly agree and offer comfort when someone is, in our opinions, simply not making objective sense.


----------



## DocK (4 November 2009)

Julia said:


> Ah, thank you, specialed.  Yes that would be it.
> 
> 
> You have missed my point.  This was that ASF is NOT a support group.
> ...




Seems to me there's a good bit of difference between blindly agreeing with someone and requesting that they stop posting because they irritate you.  I thought a forum was a place where all could voice their views, not just those that you approve of, or who share your viewpoint.  Whatever Harlequin's reasons for posting are is irrelevant in my view (and I seriously doubt it would be looking for a support group!), the simple fact is he/she has every right to express a viewpoint, no matter whether you, or Bunyip, or indeed I, think it makes objective sense or not.  The "considerable volume of criticism" seems to be coming from only a few posters, and there are no doubt others who agree with Harelquin at least to some extent, and yet others who share your views but don't feel the need to express them quite as forcefully.

I know I've found several posters to be quite "irritating" especially those with a warped view of the whole storm model, and ex-stormers in general.  I ignore those posts, instead of seeking to correct them at every opportunity.  If you find Harlequins posts so irritating, perhaps you should do likewise.  

I don't believe long-term membership of ASF gives anyone the right to invite those they disdain to leave.  Very bad manners in my view.  Someone questioned Harlequin's motives for posting - frankly I don't care, but I'm beginning to questions others motives also.  It does nobody any credit to stroke their own ego at the expense of another - particulary one who is obviously suffering emotionally at present.  

Perhaps I've no right to be sticking my oar in here, but the tone of recent posts towards Harlequin offends my views of "fair play".   So post away Harly, I don't care if you make a scrap of sense or not.  Don't be bullied off this forum by anyone!


----------



## DocK (4 November 2009)

Solly said:


> Julia, I can only speculate but my (non-SICAG) Stormer mate was initially a bit concerned about a phone interview with the bank regarding his personal position but the interview went ahead well. I believe he has received no further news or progress yet.




I'd also confirm that the interview process as part of the current resolution scheme was much less stressful than I had anticipated it would be.  There was a very marked difference in the tone and general courtesy shown as compared to initial communications with the original "hardship team" several months ago.  It does appear (at least superficially) that the CBA has changed its attitude markedly over the past year.  I found the gentlemen I spoke with to be most professional.


----------



## Solly (4 November 2009)

*"Storm examination cost passes $100K
Creditors still await millions"*

"Worrells's public examination into the collapse of Storm Financial begins to rack up large price tag."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/7777.htm


----------



## Solly (4 November 2009)

gg, have you been passing fashion tip steers to Fred ? 

He's mentioned the tie, it's all about the freaking tie. 

http://www.theaustralian.news.com.au/business/story/0,28124,26299339-5018055,00.html


----------



## Solly (4 November 2009)

*"Storm boss: regulator was in our way"*

"Australia's securities regulator allegedly forced the co-founders of Storm Financial to stop any contact with clients and not to take on any new business in early December."

Read more by Michelle Singer in The Australian Financial Review of November 3 2009.


----------



## Julia (4 November 2009)

DocK said:


> Seems to me there's a good bit of difference between blindly agreeing with someone and requesting that they stop posting because they irritate you.



Why just have a go at me?  I haven't requested that Harleyquin stop posting.
Others have, so maybe direct your irritation there as well.

If it makes Harleyquin feel better to keep writing that she has no responsibility in the Storm mess, then that's fine with me.  I just don't understand it, but that's OK.


----------



## DocK (4 November 2009)

Julia said:


> Why just have a go at me?  I haven't requested that Harleyquin stop posting.
> Others have, so maybe direct your irritation there as well.
> 
> If it makes Harleyquin feel better to keep writing that she has no responsibility in the Storm mess, then that's fine with me.  I just don't understand it, but that's OK.




Upon re-reading the last few pages of thread, and having had some sleep, it would appear that I have indeed quoted the incorrect post in my reply.  Sorry if you are offended Julia, although to be fair my post wasn't intended to be directed at just yourself, but Bunyip and indeed Oztrades etc, etc. 

So to clarify, my intention was to "have a go" (I dislike this term and feel I was rather suggesting an alternative course of action) at anyone who feels OK about publically telling another poster to effectively "sod off - we're sick of your posting".  Those of us who read this forum and are not privy to any private communications between posters, naturally can only form an impression based on what has been posted on this thread.  My take on what was posted publically was that it was rather rude, and intended as a public "put-down".  I may not necessarily agree with all of Harleyquinn's opinions, but I can certainly imagine what frame of mind and emotional state she may be in.  

If you have had private communications, perhaps the request to stop posting could have been made privately as well - that way posters such as I would see no need to don our "defender-of-the-downtrodden" capes.


----------



## bunyip (4 November 2009)

DocK said:


> I thought a forum was a place where all could voice their views, not just those that you approve of, or who share your viewpoint.  Whatever Harlequin's reasons for posting are is irrelevant in my view (and I seriously doubt it would be looking for a support group!), the simple fact is he/she has every right to express a viewpoint, no matter whether you, or Bunyip, or indeed I, think it makes objective sense or not.




Neither I nor anyone else has questioned the right of Harleyquin to express her views. Nor has anyone on here attempted to take those rights away from her.

None of us has the right to say who can post on here and who can't. And none of us has attempted to do so.

However, when one particular poster keeps up the same pattern post after post with little variation, repeating over and over that they're blameless and all the fault is someone else's, and when that same person appears to get quite upset and stressed out when others disagree with those views, then it's hardly surprising when people ask why that person continues posting, and respectfully suggests that they stop doing so.

It's not an order to stop, nor even a request to stop, nor an attempt to take away their rights - it's just a suggestion that perhaps it would be better all round if they did stop, as there seems to be little point in them continuing to post.

Now, DocK - you've stated your views on the matter, and I've stated mine. I doubt if I'll swing you over to my way of thinking, and you certainly won't swing me over to your's. So rather than have an on-going argument/debate/discussion on the matter, how about we just put it to rest, and leave it at that.


----------



## DocK (4 November 2009)

bunyip said:


> Now, DocK - you've stated your views on the matter, and I've stated mine. I doubt if I'll swing you over to my way of thinking, and you certainly won't swing me over to your's. So rather than have an on-going argument/debate/discussion on the matter, how about we just put it to rest, and leave it at that.




Done.  (just had to have the last word )


----------



## Solly (4 November 2009)

The press reports should be good tomorrow with both EC and JC at today's hearing.


----------



## Ironhalo (4 November 2009)

'Corporate Jet a 'major goal' of Emmanuel Cassimatis.

http://www.news.com.au/business/story/0,27753,26304822-462,00.html

I know for a fact some Storm exec's were getting their pilot's licence on this thing too. 

Also, the line by Julie that 'clients were meant to manage their own margin loans' is pure and utter bollocks. I have an SOA here that says otherwise. This lying trollop has no shame.

Also, despite the fact many people WERE watching their own margin loans, it didn't mean anything in the end when we were all sold out regardless of our LVR.


----------



## Solly (4 November 2009)

*Failed advisory firm Storm Financial had no obligation to monitor the state of its clients' margin loans to ensure they weren't reaching risky levels*

More by Daniel Hurst here;

http://www.brisbanetimes.com.au/business/because-i-wanted-a-jet-20091104-hww2.html


----------



## Solly (4 November 2009)

I'm now starting to see a pattern with what is happening...
I wonder what tomorrow will bring.


----------



## Garpal Gumnut (4 November 2009)

Solly said:


> I'm now starting to see a pattern with what is happening...
> I wonder what tomorrow will bring.




Tomorrow will bring the dawn, and Storm birds.

I am unable to be in Brisbane for the fore or afternoon.

I would advise all former Storm and Bank employees to approach Worrells or the regulators, ASIC and APRA.

It appears the big fish are setting up the little fish for a long time in gaol.

Gaol is not a very nice place, it is full of very nasty and mentally unwell people.

Any employees need to approach the above with all they know, as if they do so now they will get an indemnity.

What usually happens is that the big fish have good lawyers and get off by wearing the system down with delaying tactics and the employees get done over quickly.

gg


----------



## shibby (4 November 2009)

Garpal Gumnut said:


> Tomorrow will bring the dawn, and Storm birds.
> 
> I am unable to be in Brisbane for the fore or afternoon.
> 
> ...




Take the above seriously, very seriously you only need to look at who is left standing with CBA to know for once GG isn't joking. 
There is no tongue in cheek with this post, just good sensible advice. 
(GG I really do love your sense of humour, this is not a criticism, there has been more that enough criticism of late) 
notice out of respect I have even used capitals.


----------



## another one (4 November 2009)

Ironhalo said:


> 'Corporate Jet a 'major goal' of Emmanuel Cassimatis.
> 
> http://www.news.com.au/business/story/0,27753,26304822-462,00.html
> 
> ...




Julie showed her real colours sometime previously when on a trip her stepson announced his engagement.  Her reply to this was to get Manny to purchase a bigger and better ring which she flashed at every opportunity.


----------



## another one (4 November 2009)

GG has often used the terminology "Muppets", I think the real muppets could end up being the so called Financial Planners who sold their Companies to Manny & Co and were corrupted by the same greed non ethics.  They forgot all about looking after their clients to the extent of abusing them when they requested to be converted to cash long before the final bell toll.


----------



## shibby (4 November 2009)

another one said:


> GG has often used the terminology "Muppets",
> I think the real muppets could end up being the so called Financial Planners who sold their Companies to Manny & Co and were corrupted by the same greed non ethics.  They forgot all about looking after their clients to the extent of abusing them when they requested to be converted to cash long before the final bell toll.




My god your singing my song, we should talk, my destructor was in the North Sydney NSW Office
She actually told me that she had managed to convert to cash, she said it eas easy I just picked up the phone mimicking the action, and then turned to me and said "I am not allowed to sell you up".  
Saved herself and yet destroyed me financially

Wouldn't it have been nice to see some of them on the stand? I dont care which one Parliamentary Enquiry or Worrells in Brisbane.


----------



## Ironhalo (4 November 2009)

*cough* Ron 'I never looked at the SOA's but funnily enough Ironhalo's family has my original signature on the front of their SOA's' Jelich. *cough*

Shibby, was it Bernadine Frawley?


----------



## Julia (4 November 2009)

Solly said:


> *Failed advisory firm Storm Financial had no obligation to monitor the state of its clients' margin loans to ensure they weren't reaching risky levels*
> 
> More by Daniel Hurst here;
> 
> http://www.brisbanetimes.com.au/business/because-i-wanted-a-jet-20091104-hww2.html



Every time either Julie or Manny open their mouths, they are digging themselves an even bigger hole in which to be buried.

I wonder how different might have been the judgements on them if they'd taken the mea culpa view that CBA has demonstrated, i.e. said 'we got it wrong, and are very sorry'.
Suppose it's just not within their lying skins to even consider this.


----------



## shibby (4 November 2009)

Ironhalo said:


> *cough* Ron 'I never looked at the SOA's but funnily enough Ironhalo's family has my original signature on the front of their SOA's' Jelich. *cough*
> 
> Shibby, was it Bernadine Frawley?




Anne O'Neill she was originally Precise Solutions.

Bernadine was there too, was she ever a director of Storm?

Last time I looked Bernadine was on the Worrells list as an outstanding creditor I must go in and have another look.


----------



## DocK (4 November 2009)

Was talking to friends the other day, and mentioned that in storm's dying days some clients had been lent funds by manny & julie on a pay-back-when-able basis.  As they were clearly insolvent at the time and it was therefore not their money to give away, I assume Worrells will be looking at reclaiming these funds if they can follow any money trail left behind?  Does anyone have any experience or knowledge in this area?  I assume finding out just who the lucky recipients were may be easier said than done, as I daresay the cassimatis memory-loss would kick in on cue.  Bet the ATO would like some of their tax paid though....  Was it 11mill owing to them?


----------



## Cosgrove Fenton (4 November 2009)

Ironhalo said:


> *cough* Ron 'I never looked at the SOA's but funnily enough Ironhalo's family has my original signature on the front of their SOA's' Jelich. *cough*
> 
> Shibby, was it Bernadine Frawley?




Ironhalo - do you really have a SOA signed by the great man Ron Jelich and in what capacity did he sign????


----------



## Ironhalo (5 November 2009)

My family in QLD do mate, I'll check with them.


----------



## Solly (5 November 2009)

Cosgrove Fenton said:


> Ironhalo - do you really have a SOA signed by the great man Ron Jelich and in what capacity did he sign????




Wasn't RJ the National Development Manager for Storm ? 
Is RJ a qualified Fin Planner ?


----------



## -Bevo- (5 November 2009)

Sorry to go off track here but found this article today

http://www.smh.com.au/business/retirees-investing-way-out-of-their-depth-20091104-hy1f.html

Its not about Storm but the story has alot of similarities to storm fiasco except they were using Options, clients not aware of risks, we are going to sue, did not tailor its investment strategies to their individual needs, its everbody else's fault.


----------



## Ironhalo (5 November 2009)

RJ (from what I gather) co-owned Jelich-Jones in Redcliffe, and had a really good name and relationship with their clients. 

They then sold their soul to Storm and with the sellout went all ethics and cultivated trust as the money spiraled in. I believe RJ was promoted to National Development Manager while concurrently overseeing the Redcliffe branch.


----------



## bunyip (5 November 2009)

-Bevo- said:


> Sorry to go off track here but found this article today
> 
> http://www.smh.com.au/business/retirees-investing-way-out-of-their-depth-20091104-hy1f.html
> 
> Its not about Storm but the story has alot of similarities to storm fiasco except they were using Options, clients not aware of risks, we are going to sue, did not tailor its investment strategies to their individual needs, its everbody else's fault.




_The clients say they did not understand the implications of the more aggressive strategy. Ord Minnett denies these allegations. It says it has yet to receive "a full and proper account of the particulars of the breaches that have been alleged".

"We have undertaken a comprehensive review of the trading undertaken by the plaintiffs and we have confirmed that they at all times personally directed the trading and appeared to be fully cognisant of the implications of the trading strategy they employed," it says._


After reading through that article about Ord Minnett wiping out the accounts of their clients by using high risk options strategies, I think the clients might be battling to get any compensation. 
I'm pretty sure they would have signed an authority for the broker to trade on their behalf. What normally happens is the broker calls them and tells them of the proposed trade, and the client then gives the go ahead for the broker to initiate the trade on the clients behalf. Or the client can say no to the trade if they're not comfortable with it.
At least, that's what happened with four or five people I've known over the years who opened 'managed' options accounts with brokers. 
One of my mates with such an account saw a 50% increase in his account in one month, followed by a 75% drawdown in the next month. He immediately closed the account, realising that such wild performance swings indicated that the broker was flying by the set of his pants by using risky strategies that were almost certain to wipe out his account sooner or later.

I notice that the Ord Minnett broker was using 'naked' options......an absolute death trap for those who don't understand them and the enormous risks involved.

Anyone who's on the verge of being lured by potentially amazing returns into opening a managed account with a broker to trade futures, options or anything else, should ask themselves two questions.....

1. Do the potential returns sound too good to be true? (high profit potential is commensurate with high risk potential)

2. If these characters can make me so much money, why are they working on wages in the nine to five grind five days a week instead of sitting in the comfort of their home offices, making a fortune in their own accounts?

Loved the name of the private client adviser in charge of the options accounts - Ben Leedon! 
If I came across a broker with a name like that, my alarm bells would just about start ringing straight away! lol


----------



## Solly (5 November 2009)

Some updates from afar..

*"Storm Financial founders experience memory loss in court"*

"Storm Financial co-founders Emmanuel and Julie Cassimatis seemed to be suffering from a bout of absent mindedness in the final days of hearings into the company’s collapse. Storm Financial co-founders Emmanuel and Julie Cassimatis seemed to be suffering from a bout of absent mindedness in the final days of hearings into the company’s collapse" 

More by Caroline Munro in Money Management;

http://www.moneymanagement.com.au/article/Storm-Financial-founders-experience-memory-loss-in-court/504543.aspx


*"Storm boss's short memory"*

"Storm Financial founder Emmanuel Cassimatis had few answers for disgruntled investors at the Federal Court in Brisbane yesterday, the final day of scheduled hearings into the company's spectacular collapse."

More by Daniel Hurst in The Age here;

http://www.theage.com.au/business/storm-bosss-short-memory-20091104-hy3o.html


----------



## Cosgrove Fenton (5 November 2009)

Solly said:


> Wasn't RJ the National Development Manager for Storm ?
> Is RJ a qualified Fin Planner ?




Big nooooo on that one, that's why he has hang around and try and save his backside from the bighouse. All his ex footy mates have p**sed off to Infocus to over-gear and fleece the next lot of consumers aka "baby muppets". RJ is only angry cause Manny outplayed him!

Ironhalo you must know a different RJ to me if you think he had any moral prior to Storm..don't believe him fullstop


----------



## Garpal Gumnut (5 November 2009)

Solly said:


> Some updates from afar..
> 
> *"Storm Financial founders experience memory loss in court"*
> 
> ...




There seems to be a tendency on this thread to ignore the enormous burden that Manny and Julie Cassimatis must be bearing at present, so it may be worthwhile as the SICAG model has not, to try and get inside the thinking of this pair of financial wizards both during the bull market and also in the final denouement.

Firstly lets quote from the SICAG model at http://sicag.info, who have not recently been in any way supportive of Manny and Julie and have hidden the friendship that exists between some of their members and the Cassimatis at the end of a long blank page, to the left and under the money spider.




During the ascendancy, ordinary unsophisticated and sophisticated investors were paying Manny 7% on most investments they had with Storm. In a bull market they must have been swimming in money. Mansions would have been a doodle for them, they always increase in value and usually can be flogged at a higher price without capital gains.

*Now why wouldn't Manny want a jet airplane?*

There is a mean spirit going throughout the reports at the Federal court on his wish to own one. 

*He always wanted to!*

Victims and commentators should get over it.

The next cruel comments are about his and Julie's lack of memory. This is very common in cases like this, when the tide turns and assets fall. Skase had it, Bondy had it. Why be surprised that the Cassimatis clan should not suffer from remembering trifles like a Liquidator visiting and what was discussed. 

Liquidators visit businesses every day all over the country. Most folk would not remember one iota of what was discussed.

*Victims and the press need to get over it*

At least SICAG have been consistent in their model.

gg


----------



## Cosgrove Fenton (5 November 2009)

Gg so true, now I know this is a big Question but if Australia became a Republic do you think a poor memory would stop someone becoming President? And would it help if they already had their own jet?


----------



## GumbyLearner (5 November 2009)

Garpal Gumnut said:


> There seems to be a tendency on this thread to ignore the enormous burden that Manny and Julie Cassimatis must be bearing at present, so it may be worthwhile as the SICAG model has not, to try and get inside the thinking of this pair of financial wizards both during the bull market and also in the final denouement.
> 
> Firstly lets quote from the SICAG model at http://sicag.info, who have not recently been in any way supportive of Manny and Julie and have hidden the friendship that exists between some of their members and the Cassimatis at the end of a long blank page, to the left and under the money spider.
> 
> ...




I'm rating that post with an Excellent. Great summary gg. 

This has always been the problem with the peasants and their lack of understanding of the elite's relationship to the Crown. The peasants can never comprehend the requirements of the wealthy and the actual material vicissitudes of life that are necessary to maintain their exquisite art of bull****ing.  

Of course as most enter their declining years they do suffer some memory loss. Others just appear in Penthouse or Playboy. 

Maybe the Australian Film Commission could fund a production through Canberra entitled:

Hey dude where's my plane? ROFL


----------



## Solly (5 November 2009)

Cosgrove Fenton said:


> Big nooooo on that one, that's why he has hang around and try and save his backside from the bighouse. All his ex footy mates have p**sed off to Infocus to over-gear and fleece the next lot of consumers aka "baby muppets". RJ is only angry cause Manny outplayed him!
> 
> Ironhalo you must know a different RJ to me if you think he had any moral prior to Storm..don't believe him fullstop




That's right he did say at the examination that he did not have any tertiary qualifications. For some reason I thought he held the coveted "Masters". 
There has been a lot going on over these last few weeks...


----------



## Cosgrove Fenton (5 November 2009)

Solly said:


> That's right he did say at the examination that he did not have any tertiary qualifications. For some reason I thought he held the coveted "Masters".
> There has been a lot going on over these last few weeks...




Now see Solly, here's the problem he said he'd like to go to the Masters (as in US Golf Masters of course) but people just hear what they want to hear!

Still if you would like an insight into his ego.....

http://www.ronjelich.com/Highlights.html

I note he is wearing stripes in the photo - perhaps a omen?


----------



## Solly (5 November 2009)

Garpal Gumnut said:


> There seems to be a tendency on this thread to ignore the enormous burden that Manny and Julie Cassimatis must be bearing at present, so it may be worthwhile as the SICAG model has not, to try and get inside the thinking of this pair of financial wizards both during the bull market and also in the final denouement.
> 
> Firstly lets quote from the SICAG model at http://sicag.info, who have not recently been in any way supportive of Manny and Julie and have hidden the friendship that exists between some of their members and the Cassimatis at the end of a long blank page, to the left and under the money spider.
> 
> ...




gg, I agree that is an excellent post. I'm with a group tonight that have no knowledge of the Storm event. I have tried to give a brief overview, they are still shaking their heads. GL's idea of funding a production about the saga holds some merits. I'd really like to see the mini series, I wonder if the final episode will end up at The Creek ?


----------



## Solly (6 November 2009)

*"It's a tough call, but someone has to make it"*

"THE margin lender blames the financial planner. The financial planner blames the margin lender. The regulator says if it's allowed by the contract, the margin lender can probably do whatever it likes."

By Stuart Washington and Clancy Yeates in The Age

http://www.smh.com.au/business/its-a-tough-call-but-someone-has-to-make-it-20091105-i0bu.html


----------



## Solly (6 November 2009)

*"Banks, Storm at impasse over margin call responsibility"*

"BANKS, the regulator and Storm Financial's founders are at a roadblock about who should be accountable for the failure of margin calls to reach margin loan borrowers."

By Stuart Washington and Clancy Yeates in The SMH

http://www.smh.com.au/business/banks-storm-at-impasse-over-margin-call-responsibility-20091105-i0ad.html


----------



## Solly (6 November 2009)

*"No joy expected for Storm victims"*

"Clients and creditors of collapsed financial advisory firm Storm Financial claim they are owed more than $100 million but most unsecured creditors were unlikely to see any of that money, the liquidator said yesterday."

Read more by Michelle Singer in the The Australian Financial Review of November 5 2009.


----------



## BabyM (6 November 2009)

i don t post often, and don t intend to. wouldn t know jelick from a bar of soap, but a number of my friends vouch he has poured hundreds of thousands $$$$$$$ into redcliffe community....
from memory........redcliffe hosp...some big walk. cancer ward. pcyc. funding for community bank. bendigo i think.junior sport etc etc....
love reading some of the posts.....


----------



## Ironhalo (6 November 2009)

He may have put money into the Redcliffe community, but that doesn't help when you then take 30x that amount with the other hand through neglect, greed and apathy.

I have a little modicum of respect for him coming forward and giving the full story and admitting fault....but it still doesn't negate the fact that he amassed a fortune (15-20 million...as a FP!) by pulling the wool over his client's trusting eyes.


----------



## Garpal Gumnut (6 November 2009)

Cosgrove Fenton said:


> Gg so true, now I know this is a big Question but if Australia became a Republic do you think a poor memory would stop someone becoming President? And would it help if they already had their own jet?






GumbyLearner said:


> I'm rating that post with an Excellent. Great summary gg.
> 
> This has always been the problem with the peasants and their lack of understanding of the elite's relationship to the Crown. The peasants can never comprehend the requirements of the wealthy and the actual material vicissitudes of life that are necessary to maintain their exquisite art of bull****ing.
> 
> ...






Solly said:


> gg, I agree that is an excellent post. I'm with a group tonight that have no knowledge of the Storm event. I have tried to give a brief overview, they are still shaking their heads. GL's idea of funding a production about the saga holds some merits. I'd really like to see the mini series, I wonder if the final episode will end up at The Creek ?




Thank you for your kind words.

Ordinary muppets do not realise the burden that great wealth and influence bring. The onerous duties that follow on amassing a fortune from advising the financially ignorant and generous are not easy.

One has to give something back. 

Although I earnt my pile through hard work, I bought an Arnage and always travel business class. This was to enable the the ordinary punter to admire a beautiful motor and aspire to be treated civilly and not develop clots in the legs while travelling. 

The above mentioned planners have given an enormous amount back to their communities. 

One I believe walked from Redcliffe to Port Moresby, a truly spiritual journey, a portion of which path has only ever been once matched in history. 

Another bought two mansions and a jet airplane. Again the intent would have been to provide a comfortable place in which to discuss finance with banking institutions and to allow the people of Townsville on occasions to peer skyward and say wtf is that?

There are many more of these fellows and ladies about. It is only right that they should be supported. I believe many have moved to other Financial Planning firms and some are even assisting Storm victims.

This is above and beyond the call of duty. 

I could never walk to Port Moresby. I have enough trouble walking from the bar of the Ross Island Hotel to my bicycle. I don't bring the Arnage into town much, lest it be keyed by the jealous and dangerous who lurk about the CBD, such as bankers and financial planners. 

gg


----------



## Ironhalo (6 November 2009)

Hahahaha love the sarcasm GG.


----------



## Solly (6 November 2009)

Garpal Gumnut said:


> ....I could never walk to Port Moresby. I have enough trouble walking from the bar of the Ross Island Hotel to my bicycle. I don't bring the Arnage into town much, lest it be keyed by the jealous and dangerous who lurk about the CBD, such as bankers and financial planners.
> 
> gg




gg, is this really you on your bicycle outside The Ross.... ?


----------



## Garpal Gumnut (6 November 2009)

Solly said:


> gg, is this really you on your bicycle outside The Ross.... ?




lol , no mate, I don't wear a bicycle helmet.

If you look carefully you can see garpaldog at the front door sipping some water. 

gg


----------



## bunyip (6 November 2009)

Garpal Gumnut said:


> lol , no mate, I don't wear a bicycle helmet.
> 
> *If you look carefully you can see garpaldog at the front door sipping some water. *
> 
> gg




Sipping some _*water*_???

Garpal, I'm disappointed in you son, for showing such poor regard for your dog.....couldn't you at least have set the poor hound up with a dish full of ice cold beer?


----------



## Solly (6 November 2009)

gg, I'm seeing my Stormer mate tomorrow, it's almost the 1st anniversary. He's not travelling too well at the moment. He hasn't had any news yet, I'm sure it's the margin loan issue that's holding things up. I know the dire situation he's in and with Christmas coming up I know it's eating into him a lot. 

I've been thinking a bit about the examination, I've got to keep reminding myself it wasn't a prosecution trial it was an examination. I believe Mr Wilkins is very competent and his methods will produce some very positive outcomes. I'm sure the next steps will be very interesting. I'm sure ASIC are taking a very serious view, look at the money they have spent and even Mr Upton's new buzz cut is an indication to me that they are serious and mean business.

Lady Penelope is still Stateside visiting her friends in the Valley, you know you can take the girl out of the Valley but you can't take the Valley out of the girl

So we'll have a free reign and we'll try and numb my Stormer mate a bit tomorrow night, last week when we sent him home the cabbie looked a bit familiar and I'm sure he only had one eye..


----------



## Cosgrove Fenton (6 November 2009)

BabyM said:


> i don t post often, and don t intend to. wouldn t know jelick from a bar of soap, but a number of my friends vouch he has poured hundreds of thousands $$$$$$$ into redcliffe community....
> from memory........redcliffe hosp...some big walk. cancer ward. pcyc. funding for community bank. bendigo i think.junior sport etc etc....
> love reading some of the posts.....




Life is full of injustice look at the attached link and tell me how Jelly will win this given who the major sponsor is!!! Always next year I guess????

http://www.australianoftheyear.org.au/nominate/

What odds a Manny/Jelich quinella? i've got a feeling their community service hours are only going to grow......


----------



## Solly (7 November 2009)

*"Jetsetters may crash while banks weather Storm"*

"STORM Financial co-founders Emmanuel and Julie Cassimatis had some heavy explaining to do when they made separate appearances in the Federal Court in Brisbane this week.

The subject was the Storm corporate jet, bought in 2007 to give wings to Storm's dream of literally flying high."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.com.au/news/features/jetsetters-may-crash-while-banks-weather-storm/story-e6frg6z6-1225795179464


----------



## Garpal Gumnut (7 November 2009)

bunyip said:


> Sipping some _*water*_???
> 
> Garpal, I'm disappointed in you son, for showing such poor regard for your dog.....couldn't you at least have set the poor hound up with a dish full of ice cold beer?




lol,  actually he has been known to drink Guinness and GnT, but I purposely put the water in so that I wouldn't be dobbed into the RSPCA or Council for having a drunk dog in charge.

gg


----------



## Garpal Gumnut (7 November 2009)

Solly said:


> gg, I'm seeing my Stormer mate tomorrow, it's almost the 1st anniversary. He's not travelling too well at the moment. He hasn't had any news yet, I'm sure it's the margin loan issue that's holding things up. I know the dire situation he's in and with Christmas coming up I know it's eating into him a lot.
> 
> I've been thinking a bit about the examination, I've got to keep reminding myself it wasn't a prosecution trial it was an examination. I believe Mr Wilkins is very competent and his methods will produce some very positive outcomes. I'm sure the next steps will be very interesting. I'm sure ASIC are taking a very serious view, look at the money they have spent and even Mr Upton's new buzz cut is an indication to me that they are serious and mean business.
> 
> ...




Many of the Storm victims are still doing it tough. Once BOQ and MQG come to the party it will get easier.

Also once the criminal trials start there will be a chance for those who have lost to have some "closure", excuse the pun.

Wish him all my best.

gg


----------



## Garpal Gumnut (7 November 2009)

Cosgrove Fenton said:


> Life is full of injustice look at the attached link and tell me how Jelly will win this given who the major sponsor is!!! Always next year I guess????
> 
> http://www.australianoftheyear.org.au/nominate/
> 
> What odds a Manny/Jelich quinella? i've got a feeling their community service hours are only going to grow......




lol , I think we should nominate Solly for all the devilling he has done. I doubt if the Jelly or Manny will make it anytime in to the future.

gg


----------



## Mash (7 November 2009)

*Banks and Storm...both guilty as sin*

I just hope ASIC really grow a set and give the bank johnnies the lashing they also deserve. Without their help EC & JC would never have been able to do what they have done. ANZ have also started negotiations with S&G. The head honchos of the banks should also have been hauled before the federal court but as yet seem to be a protected species. The journos who have sat in on the court proceeding seems to be getting a better idea of just what underhanded and unethical practices have been allowed and encouraged by both Storm and the banks. I can only hope that justice will eventually prevail.
Mash


----------



## bunyip (7 November 2009)

Garpal Gumnut said:


> lol,  actually he has been known to drink Guinness and GnT, but I purposely put the water in so that I wouldn't be dobbed into the RSPCA or Council for having a drunk dog in charge.
> 
> gg





Talking of dogs.....a few weeks ago I saw a man and a woman pull up outside a shop in a small village near where I live. They were in a ute with a huge hairy dog in the back. The man goes into the shop and comes back out with three of those ice creams on sticks - I think they were 'Have-a-Hearts' or something similar. 
The couple eat their ice creams and then he takes the wrapper off the third one and holds it out to the dog who was leaning right out from the back of the ute in his eagerness to get at it. The old dog downs the ice cream in record time while the man holds it for him!

Lucky the couple weren't Manny & Julie.....otherwise the dog might have had to  pay 7% up front fees for ice cream management!


----------



## Solly (7 November 2009)

Garpal Gumnut said:


> lol , I think we should nominate Solly for all the devilling he has done. I doubt if the Jelly or Manny will make it anytime in to the future.
> 
> gg




gg, thanks mate, that's made my motley mates that are here tonight belly laugh out loud 

I told them that I'm sure accruing a couple of penalty units under Division 1 / 10 of the Summary Offences Act doesn't preclude one from nomination. :


----------



## Harleyquin (7 November 2009)

Mash you hit the nail on the head when you say that EC and JC couldn't have achieved anything without the bank jockeys help.  The banks have always been a protected species and the sooner it changes the better.  You'd have to be blind freddie not to see it.  The good old fashioned bank manager who looked after his clients no longer exists today it's all about the money instead of the people.

Bunyip if I was the dog and the couple were you know who I would have turned the icecream around and shoved it up their you know what.


----------



## bunyip (7 November 2009)

Harleyquin said:


> Bunyip if I was the dog and the couple were you know who I would have turned the icecream around and shoved it up their you know what.




LOL.....Harleyquin.....it's good to see you've retained a sense of humour in spite of everything!


----------



## Harleyquin (7 November 2009)

Bunyip even when I'm being serious I always retain a sense of humour.  Life is meant to be enjoyed and I make sure I enjoy mine.


----------



## Quincy (8 November 2009)

*"ASIC nets fewer fish"*

Article in the Financial Review - 06 November, 2009 by Patrick Durkin

View attachment AFR 06 November 2009.pdf




> The Australian Securities and Investments Commission secured fewer convictions and jail sentences last financial year, a time when $771 billion was wiped from the stockmarket and investors lost $23 billion in corporate collapses.
> 
> ASIC got 34 criminal convictions, down from 49 the year before, and 19 jail sentences, down from 23, despite more budget funding.




Storm Financial is just one of many collapses which has resulted in mayhem for investors.

If a charge of insolvent trading is pursued and subsequently proven, will the Cassimatis' be met with the full force of the law or will ASIC just end up rapping them over the knuckles ?



> http://www.asic.gov.au/asic/asic.ns...nsequences+of+insolvent+trading??openDocument
> 
> *Criminal charges*
> 
> ...


----------



## Landyman (8 November 2009)

bunyip said:


> Talking of dogs.....a few weeks ago I saw a man and a woman pull up outside a shop in a small village near where I live. They were in a ute with a huge hairy dog in the back. The man goes into the shop and comes back out with three of those ice creams on sticks - I think they were 'Have-a-Hearts' or something similar.
> The couple eat their ice creams and then he takes the wrapper off the third one and holds it out to the dog who was leaning right out from the back of the ute in his eagerness to get at it. The old dog downs the ice cream in record time while the man holds it for him!
> 
> Lucky the couple weren't Manny & Julie.....otherwise the dog might have had to  pay 7% up front fees for ice cream management!




I like it but don't give up your day job.


----------



## Garpal Gumnut (8 November 2009)

Harleyquin said:


> Bunyip if I was the dog and the couple were you know who I would have turned the icecream around and shoved it up their you know what.




Might have been good exercise for the future.

gg


----------



## Solly (10 November 2009)

*"Banks urged to follow CBA Storm compo lead"*

"The CBA announced yesterday it has put aside a 'reasonably significant' amount of compensation for Storm clients. 

The Storm Investors Consumer Action Group says it hopes other banks will follow the Commonwealth Bank's example of providing compensation to former Storm clients."

More by By Niki Lyons on the ABC.

http://www.abc.net.au/news/stories/2009/11/10/2738128.htm


----------



## Solly (10 November 2009)

*"The hubris of Storm Financial"*

By Nick Samios on Business Spectator;

http://www.businessspectator.com.au/bs.nsf/Article/You-want-my-money-for-what-pd20091109-XLTSZ


----------



## Judd (11 November 2009)

And where are the customers' Yachts?  So asked Fred Schwed JR.  The tome has only been around for some 80 years.  Obviously it was not made readily available to Storm clients by EC & JC.


----------



## bunyip (11 November 2009)

Some of you Stormers would like to have the knowledge and skills to be independent stockmarket investors. 
The stockmarket, however, is risky ground for the uneducated.

Anyone wanting to invest in the market has basically two choices.....

* Rely on someone else to help you make decisions, and in so doing, run the risk of getting fleeced and financially destroyed by the greedy and incompetent such as Storm Financial.

OR

* Get yourself educated so you have the skills and knowledge to invest profitably in the market yourself.

The following video link will go a long way towards pointing you in the right direction and fast-tracking your learning process.
I've already posted this link in a couple of other threads on this forum. Some of you will have seen it but for those who haven't, I'm putting it in this thread - it really does contain some very valuable information about successful stockmarket investment.

*http://www.youtube.com/watch?v=wEypGm5ahCI


----------



## Harleyquin (13 November 2009)

Bunyip you've posted some very sensible advice there.  Found the video link very informative.  I particularly like the way this presenter is able to convey the information.  Many thanks.


----------



## bunyip (13 November 2009)

Harleyquin said:


> Bunyip you've posted some very sensible advice there.  Found the video link very informative.  I particularly like the way this presenter is able to convey the information.  Many thanks.




You're welcome, Harleyquin.

I don't look for praise when I try and help people - I'm sure you don't either. But it's always nice when someone spends a minute or two to say thanks. 
There are lots of helpful people on this forum, but too seldom does anyone bother to thank them for their efforts.


----------



## Solly (13 November 2009)

*"Compensation pain for Storm victims"*

"ANOTHER possible avenue of compensation for the victims of the Storm Financial disaster appears to have been snatched away on revelations the failed wealth advisor renewed its public indemnity insurance in its dying days."

More by Tony Raggatt The Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/11/12/93271_news.html


----------



## Grey Ghost (14 November 2009)

Solly said:


> *"Compensation pain for Storm victims"*
> 
> "ANOTHER possible avenue of compensation for the victims of the Storm Financial disaster appears to have been snatched away on revelations the failed wealth advisor renewed its public indemnity insurance in its dying days."
> 
> ...




Unfortunately I don't think this will come as a surprise to some people.  I've heard plenty of rumors for a while now that storms so called indemnity insurance was fairly dubious at best.  I'm not surprised that the insurer is now running for cover and looking to back away from meeting any liability.
It looks like just another familiar piece that fits into the pattern of this whole mess.

For those who are interested Bernie Ripoll the chair of the parliamentary inquiry into storm is going to be interviewed by Alan Kohler tomorrow on the ABC's Inside Business program at 10:00 AM.  It might be worth a look as I believe he is due to report his findings later this month.


----------



## Garpal Gumnut (14 November 2009)

Grey Ghost said:


> Unfortunately I don't think this will come as a surprise to some people.  I've heard plenty of rumors for a while now that storms so called indemnity insurance was fairly dubious at best.  I'm not surprised that the insurer is now running for cover and looking to back away from meeting any liability.
> It looks like just another familiar piece that fits into the pattern of this whole mess.
> 
> For those who are interested Bernie Ripoll the chair of the parliamentary inquiry into storm is going to be interviewed by Alan Kohler tomorrow on the ABC's Inside Business program at 10:00 AM.  It might be worth a look as I believe he is due to report his findings later this month.




Agree mate. The insurance is useless.

If Manny and his mob of amateurs had approached me I would have offered him indemnity cover, knowing that they were so legally and governance compromised , that I would never have to pay out, no matter what the outcome.

gg


----------



## Julia (14 November 2009)

Grey Ghost said:


> For those who are interested Bernie Ripoll the chair of the parliamentary inquiry into storm is going to be interviewed by Alan Kohler tomorrow on the ABC's Inside Business program at 10:00 AM.  It might be worth a look as I believe he is due to report his findings later this month.



Many thanks, Grey Ghost.  Will watch with interest.


----------



## Solly (15 November 2009)

*"Storm duo, Emmanuel and Julie Cassimatis, sue CBA for $17m"*

"STORM Financial founders Emmanuel and Julie Cassimatis are striking back at the Commonwealth Bank with a $17 million claim for losses on their personal investment portfolio."

More by Mitch Gaynor in The Sunday Mail

http://www.news.com.au/couriermail/story/0,23739,26349673-3122,00.html


----------



## Garpal Gumnut (15 November 2009)

Solly said:


> *"Storm duo, Emmanuel and Julie Cassimatis, sue CBA for $17m"*
> 
> "STORM Financial founders Emmanuel and Julie Cassimatis are striking back at the Commonwealth Bank with a $17 million claim for losses on their personal investment portfolio."
> 
> ...




Thanks Solly.

This much misunderstood pair have been sorely misrepresented and villified on this thread.

At least now they will have the chance to get back from the banks the $30 million which was lost to them because the banks alllegedly didn't send them daily bank staements of their margin loans.

Oscar Wilde would have been proud of them. His action against the Marquis of Queensbury was related to me by my great grandfather Gangesh Gumnut  as a boy.

Good on you Manny and Julie. 

I will keep asf informed of court dates. 

If this keeps up I'll buy a unit in Brisbane.

gg


----------



## Solly (15 November 2009)

Garpal Gumnut said:


> Thanks Solly.
> 
> This much misunderstood pair have been sorely misrepresented and villified on this thread.
> 
> ...




gg, in the article where it states,



> Mr Cassimatis's core argument is that there was an implied obligation on the bank to give its clients information each day about the true state of the accounts, something the bank did not do for any Storm clients after August 1, 2008.




I find this interesting and will be watching this one closely especially regarding  the interpretation of "implied obligation".

BTW there are few good new units down Cordelia St way, it's only a short walk or cycle over the new Kurilpa Bridge to the courts.


----------



## Grey Ghost (15 November 2009)

Solly said:


> *"Storm duo, Emmanuel and Julie Cassimatis, sue CBA for $17m"*
> 
> "STORM Financial founders Emmanuel and Julie Cassimatis are striking back at the Commonwealth Bank with a $17 million claim for losses on their personal investment portfolio."
> 
> ...





If Manny wins his case I wonder how much of any payout he plans to share with all the people who have been Stormified?


----------



## bunyip (15 November 2009)

Grey Ghost said:


> If Manny wins his case I wonder how much of any payout he plans to share with all the people who have been Stormified?




LOL.....I can well imagine!


----------



## Garpal Gumnut (15 November 2009)

Solly said:


> gg, in the article where it states,
> 
> 
> 
> ...




Thanks mate.
"implied obligation" should keep the siks fed for a few months.
Are the coppers tough on not wearing a bicycle helmet down Cordelia st. and over the bridge?

gg


----------



## Solly (15 November 2009)

Garpal Gumnut said:


> Thanks mate.
> "implied obligation" should keep the siks fed for a few months.
> Are the coppers tough on not wearing a bicycle helmet down Cordelia st. and over the bridge?
> 
> gg




If you pedal fast enough you're ok you can lose 'em in the crowd if you jump the footpath. I think they are only really interested in street punks on bikes with spray cans in that part of town.


----------



## Garpal Gumnut (15 November 2009)

I missed Bernie Ripoll on ABC TV this morning. I had to take Dharma to the Church of Bunnings. She is very religious about attending every Sunday.

Does anyone have a transcript of the programme or can fill me in on the content?

gg


----------



## Jifromoz (15 November 2009)

Hi Garpal,

Here is the link.

http://www.abc.net.au/insidebusiness/

Cheers


----------



## Garpal Gumnut (15 November 2009)

Jifromoz said:


> Hi Garpal,
> 
> Here is the link.
> 
> ...




Thanks mate.

gg


----------



## Julia (15 November 2009)

Perhaps my expectations were unrealistic, but I found the fairly brief interview with Bernie Ripoll a bit of a non-event.  He didn't really say much about anything.


----------



## Garpal Gumnut (15 November 2009)

Julia said:


> Perhaps my expectations were unrealistic, but I found the fairly brief interview with Bernie Ripoll a bit of a non-event.  He didn't really say much about anything.




Thanks Julia, I haven't viewed it yet. I may wait for Rupert to report it to me tomorrow on my front lawn.

gg


----------



## Grey Ghost (15 November 2009)

Julia said:


> Perhaps my expectations were unrealistic, but I found the fairly brief interview with Bernie Ripoll a bit of a non-event.  He didn't really say much about anything.




I agree Julia.  He spoke mainly on the financial services industry generally with only a brief reference to storm.  Hopefully he will have a lot more to say on storm in particular when he hands down his report later this month.  



Garpal Gumnut said:


> Thanks Julia, I haven't viewed it yet. I may wait for Rupert to report it to me tomorrow on my front lawn.
> 
> gg




GG as Julia said this was a bit of a non-event.  I don't even know if uncle rupert will bother to report on it. Anyway you won't have missed much.


----------



## DocK (15 November 2009)

Bernie was obviously being as non-committal as possible, not wishing to pre-empt the enquiry's findings - but I did feel a bit let down by the lack of an opinion on most points put to him.  I did notice that he mentioned the importance of "quality advice tailored to individual needs" a few times, so assume the findings will be very scathing of the "one size fits all" approach adopted by storm.   Thank you Grey Ghost for posting the details of the programme - it's not one I had previously watched, but probably will in future.

As far as manny & jules suing CBA for their lost 17mill - I note the write up in the Sunday Mail mentions that they are the first of 60 cases to sue on this basis of inadequate information/data being made available.  There were media reports some weeks ago about secret meetings with solicitors (was it Levitts?) with a select group of ex-storm clients - I daresay this is what was afoot.  No doubt this will be manny's attempt to put things right for all - by attempting to prove that it was all Colonial's problem, and the only reason he failed to pull his clients out of the market was due to delayed data! (as if!!)  I guess he figures if he wins his test case then it will be "open slather" for all other Colonial margin loan clients.  I'm not in that category so am not affected one way or the other, but can't help wondering if the 60 ex-clients who have followed him down this road, and opted out of the Slater & Gordon/CBA Resolution Scheme in order to do so, may rue their misguided loyalty if his court case fails and they have missed the boat with S&G.  I guess they'll possibly receive a lot more compensation if they prevail in court though - just one more gamble I suppose.  It's obviously the best option for manny & jules, but I question the wisdom/gullibility of those that have lent their weight to his cause and burnt their bridges in the process.  

It also occurred to me that if manny & jules can sue the CBA due to them failing to meet an "implied obligation" - could not most ex-storm clients sue manny & jules for the very same thing!  If I were them I wouldn't count on hanging on to any compensation awarded to them for very long....


----------



## Mindstorm (15 November 2009)

DocK said:


> Bernie was obviously being as non-committal as possible, not wishing to pre-empt the enquiry's findings - but I did feel a bit let down by the lack of an opinion on most points put to him.  I did notice that he mentioned the importance of "quality advice tailored to individual needs" a few times, so assume the findings will be very scathing of the "one size fits all" approach adopted by storm.   Thank you Grey Ghost for posting the details of the programme - it's not one I had previously watched, but probably will in future.
> 
> As far as manny & jules suing CBA for their lost 17mill - I note the write up in the Sunday Mail mentions that they are the first of 60 cases to sue on this basis of inadequate information/data being made available.  There were media reports some weeks ago about secret meetings with solicitors (was it Levitts?) with a select group of ex-storm clients - I daresay this is what was afoot.  No doubt this will be manny's attempt to put things right for all - by attempting to prove that it was all Colonial's problem, and the only reason he failed to pull his clients out of the market was due to delayed data! (as if!!)  I guess he figures if he wins his test case then it will be "open slather" for all other Colonial margin loan clients.  I'm not in that category so am not affected one way or the other, but can't help wondering if the 60 ex-clients who have followed him down this road, and opted out of the Slater & Gordon/CBA Resolution Scheme in order to do so, may rue their misguided loyalty if his court case fails and they have missed the boat with S&G.  I guess they'll possibly receive a lot more compensation if they prevail in court though - just one more gamble I suppose.  It's obviously the best option for manny & jules, but I question the wisdom/gullibility of those that have lent their weight to his cause and burnt their bridges in the process.
> 
> It also occurred to me that if manny & jules can sue the CBA due to them failing to meet an "implied obligation" - could not most ex-storm clients sue manny & jules for the very same thing!  If I were them I wouldn't count on hanging on to any compensation awarded to them for very long....





This is only my take on this, and my opinion only, but weren't the Cassimatis barred from the S&G/CBA resolution scheme?  I seem to remember that the scheme would not include 'former directors of Storm'.  I may be wrong.

So, the Cassimatis are not burning their bridges, as per usual, just the bridges of those clients who choose to go down the same Cassimatis' road.

Remember too, that the lawyers' fees for those in the S&G/CBA scheme are being paid by CBA, (in the main), where these 60 clients will have to foot their own lawyers' bill.

I suppose, if like E&J C, you have lost millions, then this may well be a better route, but for the thousands of 'small fry' like me, we can't afford to take on the banks with independent lawyers and then give them a great proportion of our 'win'.

There are many former Storm clients who have just taken their losses onboard and walked away.  In the main they are younger clients who have the time left to make another start.  They are in the minority.

I myself am banking, (excuse the pun), on the S&G/CBA scheme.  We can't afford to take CBA to court on our own, or as part of an independent group.  It just wouldn't be worth our while, the angst, the stress, the waiting, the lawyers' fees.  

We, like many former Storm clients, just want to draw a line under this awful business.  We have tried to fund our own retirement, we have had our fingers burnt, we have learned our lesson.  We have gone from having 80% equity in our home in February 2007 to owing $500K to CBA in October 2008.  All those years that we worked to pay off our mortgage have been wasted.

We have never taken anything back from our 'investment' via Storm.  We have never, like some others, had any priviledge/favour/holiday.  We have never been 'rich' enough to mix with the 'hoy palloy' of Storm clients.  We were just, like the majority of storm clients, cannon fodder.

We would just like the banks to admit that in our case they have done wrong, and to put it right.

This is what Mr Norris said on 17 June 2009.  Well, the CBA did do wrong by my family.  I have proof that they did.  I am hoping that Mr Norris was being totally honest when he made that statement.  

Mindstorm


----------



## Julia (15 November 2009)

DocK said:


> It also occurred to me that if manny & jules can sue the CBA due to them failing to meet an "implied obligation" - could not most ex-storm clients sue manny & jules for the very same thing!  If I were them I wouldn't count on hanging on to any compensation awarded to them for very long....



In the case of Storm clients wanting to sue Manny and Julie, it wouldn't even be "implied" obligation, would it?  Wasn't it clearly stated to clients that their investments would be actively monitored and prevented from going into margin call?

The term "implied obligation" used by the Cassimatis's seems very vague.
However, I suppose their lawyers have used this term advisedly.

I'd suspect Manny and Julie might be pursuing the option of going after the CBA in part to create an image in the public's and investors' minds that they themselves have been severely disadvantaged, and thus cannot be held to blame for similar levels of disadvantage experienced by investors, thus hopefully warding off ideas from investors of sueing Manny and Julie.

Perhaps they have already wrought such a conviction on the part of the "60 investors" who are also reportedly going to sue CBA.




Mindstorm said:


> I myself am banking, (excuse the pun), on the S&G/CBA scheme.  We can't afford to take CBA to court on our own, or as part of an independent group.  It just wouldn't be worth our while, the angst, the stress, the waiting, the lawyers' fees.



Mindstorm, that's a really sensible attitude imo.  Having been through a similar situation with a crooked lawyer where I lost money many years ago, the stress of waiting for decision after decision by ASIC, the courts etc was absolutely not worth the angst.


----------



## DocK (16 November 2009)

Julia said:


> In the case of Storm clients wanting to sue Manny and Julie, it wouldn't even be "implied" obligation, would it?  Wasn't it clearly stated to clients that their investments would be actively monitored and prevented from going into margin call?




I was considering that very point when typing my post.  Although their website and all personal discussions promised that portfolios would be actively monitored, no need for you to worry about a thing, we do all the work for you etc, etc - I seem to recall being unable to pin down the same clear wording last time I read my 140+ page SOA - I feel they may be able to skate by on that one legally, if not ethically or morally.  Depends upon the wording in SOAs vs promises on websites (now defunct) and whether verbal promises count for anything when it comes to legal battles?



Julia said:


> I'd suspect Manny and Julie might be pursuing the option of going after the CBA in part to create an image in the public's and investors' minds that they themselves have been severely disadvantaged, and thus cannot be held to blame for similar levels of disadvantage experienced by investors, thus hopefully warding off ideas from investors of sueing Manny and Julie.
> 
> Perhaps they have already wrought such a conviction on the part of the "60 investors" who are also reportedly going to sue CBA. .




Yes indeed.  Poor, poor manny & jules.  They've lost as much as anyone.  We must all feel their pain.  Why should I be sticking pins in my manny voodoo doll when he doesn't even have a jet to fly around in any more, poor impoverished manny?  Yes, they did try to take a rather large divvie, and prepay legal and PR costs from an insolvent business rather than pay tax, or employees entitlements, or creditors -but hey! What alternative did they have?  They'd lost just as much as anyone, poor loves.  Perfectly understandable....  




Julia said:


> Mindstorm, that's a really sensible attitude imo.  Having been through a similar situation with a crooked lawyer where I lost money many years ago, the stress of waiting for decision after decision by ASIC, the courts etc was absolutely not worth the angst.




I'm with you there as well Mindstorm.  The waiting is a killer.  I also find it very frustrating to have to put so many decisions or plans "on hold" until matters are finalised one way or the other.  I couldn't prepay interest before 30 June as usual, as the "hardship team" were acting like headless chooks at that time and I wasn't allowed to deal with my own bank relationship manager locally.  I was then unable to fix my interest rate 6 months ago as it was temporarily nil as it was related to storm.  Of course it's not nil now, and I just have to cop the standard variable rate sweet.  It will be so good to have the whole issue "sorted" one  way or the other won't it?, so we can all move on.  I just want to know where I stand so I can take back control of my finances.  Living in limbo doesn't suit me at all.


----------



## Solly (16 November 2009)

*"Financial advice a concern: inquiry head"*

"Bernie Ripoll, chair of the financial services inquiry, which was established in response to the collapse of Storm Financial, says the inquiry will be making recommendations on whether commissions for financial advice ought to be banned."

More by David McIntyre in WA Today;

http://www.watoday.com.au/breaking-news-business/financial-advice-a-concern-inquiry-head-20091115-ig69.html


----------



## Solly (16 November 2009)

*"Financial services committee looks to quality standards of financial advice"*

"The Federal Parliament's Joint Committee on Financial Services chair and Labor MP, Bernie Ripoll says a range of changes will be proposed to ensure the future quality of financial advice and planning, when the committee hands down its recommendations later this month."

More here on Business Spectator;

http://www.businessspectator.com.au/bs.nsf/Article/Financial-services-committee-looks-to-quality-stan-pd20091115-XSV6D


----------



## Solly (16 November 2009)

*"Former Storm Financial planners still giving advice"*

"AT least seven former Storm Financial franchisees and planners are still active across Queensland providing investment advice to the public."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26353541-3122,00.html


----------



## Solly (16 November 2009)

*"Ripoll calls for better education, advice"*

"THE chairman of the parliamentary inquiry into the financial services sector says he is more concerned about the quality of advice and educational level of advisers than how they are paid."

More in from AAP in The Age here;

http://www.theage.com.au/business/ripoll-calls-for-better-education-advice-20091115-igfq.html


----------



## Quincy (16 November 2009)

From SMH.com.au - By EVAN SCHWARTEN, November 16, 2009 - 4:34PM 



> http://news.smh.com.au/breaking-new...ts-support-cassimatis-suit-20091116-ihwk.html
> 
> *Storm clients support Cassimatis suit*
> 
> ...


----------



## Garpal Gumnut (16 November 2009)

Let us hope that this is the beginning of Manny's ascendence to running another Financial Services Firm, SICAG will certainly have a big list of potential clients for Manny and Julie Cassimatis.

The Cassimatis were unable to understand a margin loan due to alleged misinformation from their banks.

It seems reasonable that they should sue.

It is not admirable for SICAG to let Manny pursue this alone.

SICAG should endorse the Cassimatis, not just their actions against the banks.

Leaving Manny to pursue this alone when he is a victim like SICAG members seems unfair.

gg


----------



## Solly (16 November 2009)

Garpal Gumnut said:


> Let us hope that this is the beginning of Manny's ascendence to running another Financial Services Firm, SICAG will certainly have a big list of potential clients for Manny and Julie Cassimatis.
> 
> The Cassimatis were unable to understand a margin loan due to alleged misinformation from their banks.
> 
> ...




gg, I sent the link regarding the "Secret 60" to my Stormer mate. I'm sure he's  not one of the chosen. I can't wait to see what he says. I'm sure he didn't get a call and I've asked him to check his messagebank 101 just in case.

I wonder who the chosen are ? I believe my mate is still struggling, although he's holding his head high, I sense the weight he is carrying. I sometimes wish there was more I could do to fix what has happened. But rest assured I will be here until this is all remedied


----------



## DocK (16 November 2009)

Call me cynical, but I'd suggest those clients that were the recipients of interest-free, unsecured loans from the "war chest" would be the "secret 60" who are now being given the opportunity to show their undivided loyalty.....


----------



## Solly (17 November 2009)

*"Victims welcome Cassimatis suit"*

"Clients of the collapsed advisory firm believe the case could establish a legal precedent for their long-held allegation that the bank provided inaccurate data to Storm late last year."

a bank spokesmen says "The Commonwealth Bank looks forward to defending these allegations . . . The bank will defend its position about the reliability and accuracy of data,"

"Damian Scattini....warned yesterday that any funds flowing back to the Cassimatises would be claimed on behalf of victims."

More by Anthony Marx here;

http://www.news.com.au/couriermail/story/0,23739,26359085-3122,00.html


----------



## Solly (17 November 2009)

*"Storm victim backs $17m Cassimatis action"*

"A former Storm Financial client left $300,000 in debt after last year's sharemarket crash has backed the failed advisory firm's founders in their bid to recover $17 million from the Commonwealth Bank.

More by Daniel Hurst on brisbanetimes.com.au;

http://www.brisbanetimes.com.au/business/storm-victim-backs-17m-cassimatis-action-20091116-ii5u.html


----------



## DocK (17 November 2009)

Solly said:


> *"Victims welcome Cassimatis suit"*
> 
> "Damian Scattini....warned yesterday that any funds flowing back to the Cassimatises would be claimed on behalf of victims."
> 
> ...




From the above linked article (thanks Solly)



> Lawyer Damian Scattini, whose firm Slater & Gordon has embarked on a resolution scheme with the bank to settle Storm cases, warned yesterday that any funds flowing back to the Cassimatises would be claimed on behalf of victims.
> 
> "The only reason he's not being sued now is that he's not worth chasing," he said.
> 
> Mr Scattini said that despite any problems with bank data, Storm charged high fees to monitor client portfolios. "His lawsuit shows just how much of a sham Storm Financial was."




Scattini sums it up fairly well I think.


----------



## Farencue (17 November 2009)

Agree with you Doc, and a good scammer always bluffs his way to the end of the line.


----------



## Garpal Gumnut (17 November 2009)

DocK said:


> Call me cynical, but I'd suggest those clients that were the recipients of interest-free, unsecured loans from the "war chest" would be the "secret 60" who are now being given the opportunity to show their undivided loyalty.....




Does anyone know the identity of the 'secret 60'.

It is time for SICAG to disclose who they are.

The SICAG model has played into Manny's hands, so it is only fair that the rest of the victims know who they are.

gg


----------



## specialed (17 November 2009)

Garpal Gumnut said:


> Does anyone know the identity of the 'secret 60'.
> 
> It is time for SICAG to disclose who they are.
> 
> ...




GG, I'm pretty sure it has been reported that the 60 are not alligned with SICAG or participating in the resolution process. Have I missed something ? Why is SICAG responsible for disclosing the names of the 60 if they have nothing to do with them and may not even no who they all are ?


----------



## Grey Ghost (17 November 2009)

QUOTE
"Lawyer Damian Scattini, whose firm Slater & Gordon has embarked on a resolution scheme with the bank to settle Storm cases, warned yesterday that any funds flowing back to the Cassimatises would be claimed on behalf of victims.

"The only reason he's not being sued now is that he's not worth chasing," he said."

This statement comes as something of a surprise to me.  I had assumed no one was going after manny because all his assets were either hidden or off shore.
I don't know why he wouldn't be worth chasing because of:

1.  His substantial digs at belmont would be worth a significant amount.
2.  This lawsuit he has just launched will be very expensive to run and I am assuming he is not getting legal aid and must have significant resources to fund it.
3.  Over the last few years he and jc have pulled millions of dollars out of storm and although he probably did lose plenty in the share market I am sure he would have kept significant cash reserves somewhere.

This is only the obvious that I can see.  I am sure a court ordered forensic examination of his financial affairs would reveal much more.


----------



## Garpal Gumnut (17 November 2009)

specialed said:


> GG, I'm pretty sure it has been reported that the 60 are not alligned with SICAG or participating in the resolution process. Have I missed something ? Why is SICAG responsible for disclosing the names of the 60 if they have nothing to do with them and may not even no who they all are ?




Where was this reported? I haven't seen it.

The following would seem to indicate that SICAG are backing Manny in this.

Who are the Secret 60?






> http://www.news.com.au/couriermail/story/0,23739,26359085-3122,00.html
> 
> DEVASTATED Storm Financial investors have welcomed the legal battle launched by company founders Emmanuel and Julie Cassimatis against the CBA.
> 
> ...




gg


----------



## Solly (18 November 2009)

*"Call for ban on commissions for financial advisers"*

"A joint parliamentary committee, set up after the collapse of Opes Prime and Storm Financial, will tonight complete its final report, to be tabled in Parliament on Monday."

http://www.brisbanetimes.com.au/business/call-for-ban-on-commissions-for-financial-advisers-20091117-ikds.html


----------



## Solly (18 November 2009)

*"Ex-Storm clients mull over litigation options
Storm exec calls for Ripoll's resignation"*

Former Storm clients are considering forming a class action as advice firm founders launch new proceedings

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7877.htm


----------



## Solly (18 November 2009)

Garpal Gumnut said:


> Who are the Secret 60?




gg, that is a good question, my Stormer mate is definitely not one, he's checked his messagebank 101, had a thorough look in his letter box and even double checked the spam folder in his Hotmail account just in case they were trying to contact him. He's heard nothing, zip, zilch.

He's starting to get some real perspective about what's going on now. I wonder how you can join this select group, is it by special invitation only ?
Are there secret handshakes, winks, nods, body twitches and is there a goat involved?

If anybody knows or has any info please let us know, I'll pass the info on so my mate can consider that option.


----------



## Garpal Gumnut (18 November 2009)

Garpal Gumnut said:


> Who are the Secret 60?
> 
> gg








Solly said:


> gg, that is a good question, my Stormer mate is definitely not one, he's checked his messagebank 101, had a thorough look in his letter box and even double checked the spam folder in his Hotmail account just in case they were trying to contact him. He's heard nothing, zip, zilch.
> 
> He's starting to get some real perspective about what's going on now. I wonder how you can join this select group, is it by special invitation only ?
> Are there secret handshakes, winks, nods, body twitches and is there a goat involved?
> ...




The answer may lie in the little disclaimer box at the bottom of the SICAG web site, http://sicag.info


gg


----------



## specialed (18 November 2009)

http://www.brisbanetimes.com.au/queensland/storm-clients-back-negligence-lawsuit-against-bank-20091116-ihxs.html

"Storm Investors Consumer Action Group (SICAG) co-chairman Noel O'Brien said if the couple were successful it would set a precedent for future legal action by affected clients.

"It will set a precedent for the rest of the members," he said.

"If the principals of Storm couldn't understand the information they were being given on a daily basis what chance did the rest of the advisers and clients have?

"We wish them all the luck in the world."

However, he said support for the legal action didn't amount to support for the Cassimatises themselves.


----------



## Garpal Gumnut (18 November 2009)

specialed said:


> http://www.brisbanetimes.com.au/queensland/storm-clients-back-negligence-lawsuit-against-bank-20091116-ihxs.html
> 
> "Storm Investors Consumer Action Group (SICAG) co-chairman Noel O'Brien said if the couple were successful it would set a precedent for future legal action by affected clients.
> 
> ...




specialed mate, you are like one of the earlier Mrs Gumnuts who always turned up at odd times to peddle her grievances.

Now answer this mate, seeing as you are a SICAG Model insider.

Who are the Secret 60?

Name them.

And take that silly disclaimer about the Cassimatises off your website. 

After all the evidence so far in the Inquiry and hearings it is in extremely bad taste. It is not couth.

SICAG's involvement with the Cassimatises is a reasonable concern for many victims.

gg

gg


----------



## Solly (18 November 2009)

Garpal Gumnut said:


> specialed mate, you are like one of the earlier Mrs Gumnuts who always turned up at odd times to peddle her grievances.
> 
> Now answer this mate, seeing as you are a SICAG Model insider.
> 
> ...




gg

I spoke with my mate's misses this morning, another friend had sent her the links to Anthony's article about the Secret 60. I can't repeat in a public forum what she said, they are living rough at the moment but not as rough as some others.

I admire her renewed strength and her courage, my mate is not so good at the moment. Another Christmas time is almost here, it will be another time of uncertainty, they are wondering where they will be living this time next year and what their future holds.

Hang in there Stormers........


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## Mindstorm (18 November 2009)

Garpal Gumnut said:


> specialed mate, you are like one of the earlier Mrs Gumnuts who always turned up at odd times to peddle her grievances.
> 
> Now answer this mate, seeing as you are a SICAG Model insider.
> 
> ...




Mr gumnut...

I am not sure, and I may be being very stupid, I have already been proved to have been stupid many times, but I can't find what it is that you are so concerned about on the SICAG website.

I've been to all of the social meetings in my area, and not heard one good word about E&J C.  I've met five of the six members of the Committee.

I apologise to you, in advance, if I am wrong, which I often am.  But, not one of these men have even mentioned the Cassimatis to me.

They have certainly not asked me to support the Cassimatis.

Please tell me what I should be looking for, so that I can tell these five men that I do not want or need their help to try to find a way for me to try to get my family to get out of this godawful mess that I have put them in.

As for the 'secret' 60.  Would it not be a matter of public knowledge when they 'stake their claim' that their names would be public?

Like we storm clients, you will need to learn to be patient.  You have been very vocal on a number of issues regarding Storm.  I am wondering if you are a Storm victim in denial.

MS


----------



## specialed (18 November 2009)

GG,  I continue to find your almost narcissistic obsession with SICAG quite amusing, but I must also admit a little disturbing.  

After all, much of the evidence presented in the inquiries is only being presented thanks to the hard work of SICAG who chased the politicians, ASIC and Slater and Gordan on behalf of everyone, members of SICAG or not who have been screwed by Manny, inorder to get these inquiries underway.

Who put pressure on the CBA to take responsibility for their role in this mess when they were quite happy to accept none and demand payments in December and January. Of all the strange accusations and tenuous links you have made I find this one the most perplexing. Exactly what has SICAG got to do with the 60 people who have decided to go it alone. If your so keen to know who they are, than surely it is Manny who you should be asking ? I’d be surprised if SICAG would even know who they are, particularly if they are not members of SICAG. Given your vast knowledge about investing and the fact that you did not invest in Storm, why are you so focused on this group which does not affect you in any way ? And presumably, given your opposition to them you would obviously have convinced any storm victims you do know not to become members, so again why so much concern with them and what they do, as when this is over they will have had no impact on your life what so ever……But there work will have and has already had a great impact on so many others.......Maybe you need to just let it go man....


----------



## Solly (19 November 2009)

Mindstorm said:


> Mr gumnut...
> 
> I am not sure, and I may be being very stupid, I have already been proved to have been stupid many times, but I can't find what it is that you are so concerned about on the SICAG website.
> 
> ...






specialed said:


> GG,  I continue to find your almost narcissistic obsession with SICAG quite amusing, but I must also admit a little disturbing.
> 
> After all, much of the evidence presented in the inquiries is only being presented thanks to the hard work of SICAG who chased the politicians, ASIC and Slater and Gordan on behalf of everyone, members of SICAG or not who have been screwed by Manny, inorder to get these inquiries underway.
> 
> Who put pressure on the CBA to take responsibility for their role in this mess when they were quite happy to accept none and demand payments in December and January. Of all the strange accusations and tenuous links you have made I find this one the most perplexing. Exactly what has SICAG got to do with the 60 people who have decided to go it alone. If your so keen to know who they are, than surely it is Manny who you should be asking ? I’d be surprised if SICAG would even know who they are, particularly if they are not members of SICAG. Given your vast knowledge about investing and the fact that you did not invest in Storm, why are you so focused on this group which does not affect you in any way ? And presumably, given your opposition to them you would obviously have convinced any storm victims you do know not to become members, so again why so much concern with them and what they do, as when this is over they will have had no impact on your life what so ever……But there work will have and has already had a great impact on so many others.......Maybe you need to just let it go man....





I've gone back through the threads to try and work why gg has this view of SICAG. He has been completely consistent with his comments. I hold the view that gg finds something of interest concerning the association of some members and the principals. I'm sure SICAG offers great support for those affected by this terrible episode, although my friends aren't members I can fully understand the benefit of a group like this and the positive work it has done. I still need a bit more time to think about this...


----------



## Steve Borden (19 November 2009)

Without the benefit of any inside knowledge of what is driving the so-called secret 60 I think the limitations of the CBA Storm resolution scheme will have a lot to do with it.

We all now that EC & JC were specifically excluded however the scheme is effectively limited to clients to clients with investment home loans and margin loans. This means that many clients with commercial borrowings against a cane farm, a commercial property or a cattle property can only obtain resolution (aside from the margin loan) via external legal action.

So if you think about it clients with these types of borrowings will be the larger ones, have lost more and probably still have a reasonable level of cashflow available to fund the action. If you then think about about where EC started then we will get some idea of where a significant proportion of these people are from.


----------



## Solly (19 November 2009)

Steve Borden said:


> Without the benefit of any inside knowledge of what is driving the so-called secret 60 I think the limitations of the CBA Storm resolution scheme will have a lot to do with it.
> 
> We all now that EC & JC were specifically excluded however the scheme is effectively limited to clients to clients with investment home loans and margin loans. This means that many clients with commercial borrowings against a cane farm, a commercial property or a cattle property can only obtain resolution (aside from the margin loan) via external legal action.
> 
> So if you think about it clients with these types of borrowings will be the larger ones, have lost more and probably still have a reasonable level of cashflow available to fund the action. If you then think about about where EC started then we will get some idea of where a significant proportion of these people are from.




Thank's Steve for that perspective, I've only had close exposure to the Mum & Dad punter in this saga.


----------



## cuttlefish (19 November 2009)

SICAG appears well versed in the tactics used by Storm.

Instead of making assertions against GG, it would be far easier for those that support SICAG to actually offer some sort of reason that SICAG endorses the Storm fees model on its web site if it really is so 'opposed' to Storm and the Cassimatis.  And now SICAG has come out and openly voiced their support for the Cassimatis suit against the CBA.  The simple and logical conclusion from this  is that SICAG endorses the Cassimatis.  That is the logical and rational conclusion that any independant outside observer would make.

But when you are caught up inside an organisation,   the logical and rational can easily get distorted.   That is what happened to people caught up in Storm - the logical viewpoint that it is highly risky to mortgage every asset an individual owns, to take on debt levels beyond the level that can be serviced by that individual, became warped into being the only sensible way for astute investors to fund their retirement.


----------



## specialed (19 November 2009)

cuttlefish said:


> SICAG appears well versed in the tactics used by Storm.
> 
> And now SICAG has come out and openly voiced their support for the Cassimatis suit against the CBA.  The simple and logical conclusion from this  is that SICAG endorses the Cassimatis.  That is the logical and rational conclusion that any independant outside observer would make.




In no way, shape or form can anyone using any type of logic make the connection that by agreeing with EC and the 60 others attemps to go after the CBA also means an endorsement of the Cassimatis's themselves. Obviously any forum that brings all the parties to account will serve the members of SICAG....


----------



## cuttlefish (19 November 2009)

So SICAG don't support Cassimatis they'd just like him to win a court case that grants him his money back.  Excuse my illogical thought processes.


----------



## DocK (19 November 2009)

I'm not a member of SICAG so have no insider info, however for what it's worth my thoughts are:

Cannot understand why they still have support for commission-based fees model with a reference to Storm, as this does give the impression of tacit approval for the storm fee model, and they're really not qualified to comment.  I understand the motives were to try to protect members from being further exploited, but feel it could have been done without any reference to storm and worded as a general warning.

I have had my doubts about the impartiality of the founders of SICAG, and would not be surprised to find out that some do indeed still support manny & jules, however I'm sure this is not the case for the vast majority of members.

Can completely appreciate why SICAG would support manny & jules' court case against CBA.  The enemy of my enemy is my friend - at least until one of them is defeated!  Any successful case against CBA almost assures SICAG members with the same circumstances a much better chance of a good outcome - no matter who the case is brought by.  Why not let manny pay for the "test case" as such - and if he wins - sue him for all his winnings!  Noel O'Brien has stated for the record that he supports the court case, but this should not be taken as support for manny & jules - I don't see how this is open for misinterpretation.  I have nothing but contempt for manny & jules, but wish them every success with the court case as a win for them will mean a win for the numerous ex-clients in the same boat, once a legal precedent has been set.  I would assume that the ATO, CBA and many other creditors would have recourse to any personal gains by the Cassimatii under director's guarantees and the like, and that any funds paid to them would be quickly claimed by creditors, not to mention the many ex-clients ready to sue them personally.  I'm sure Damian Scattini would be happy to lead a class action against them


----------



## Garpal Gumnut (19 November 2009)

specialed said:


> GG,  I continue to find your almost narcissistic obsession with SICAG quite amusing, but I must also admit a little disturbing.
> 
> After all, much of the evidence presented in the inquiries is only being presented thanks to the hard work of SICAG who chased the politicians, ASIC and Slater and Gordan on behalf of everyone, members of SICAG or not who have been screwed by Manny, inorder to get these inquiries underway.
> 
> Who put pressure on the CBA to take responsibility for their role in this mess when they were quite happy to accept none and demand payments in December and January. Of all the strange accusations and tenuous links you have made I find this one the most perplexing. Exactly what has SICAG got to do with the 60 people who have decided to go it alone. If your so keen to know who they are, than surely it is Manny who you should be asking ? I’d be surprised if SICAG would even know who they are, particularly if they are not members of SICAG. Given your vast knowledge about investing and the fact that you did not invest in Storm, why are you so focused on this group which does not affect you in any way ? And presumably, given your opposition to them you would obviously have convinced any storm victims you do know not to become members, so again why so much concern with them and what they do, as when this is over they will have had no impact on your life what so ever……But there work will have and has already had a great impact on so many others.......Maybe you need to just let it go man....




As many others have pointed out on this thread, the SICAG Model is a concern to many who became concerned about Storm, especially those ASF members who were well informed before it officially went belly up. 

This thread was started because of concern about Storm Financial and its dubious practices, not by SICAG, which did not even exist then, but by ASF members who delved into Storm.

The concerns that ASF members have are numerous and are as follows.



The fact that the SICAG Model on their site endorse the Storm Model of fees, I have linked to this before and will  not waste bandwith again. It is on the left hand side of the site across from the moneyspider. It advises that victims not pay for advice, directly in contradiction of current best advice from ASF, Government and even the Financial Planning Industry ( muppets that the last are )

The fact that SICAG is based in the Sunshine Coast and not in Townsville or the North, where the majority of victims live.

The connection of a committee member of SICAG to a family member who was a financial adviser employed by Storm Financial. 

The presence in SICAG central of a former financial adviser who held a high executive office with Storm. 

There is no doubt that SICAG have done some work, but one would hope that members of SICAG will not use their positions on SICAG to start off anew in Finanacial Advisory Practices.

SICAG in no way have been the major contributors to holding the banks to account. ASF, Bernie Ripoll and his committee, the liquidators and mostly Scattini via Slater and Gordon have exposed the banks and their practices repeatedly.

The lack of publication of any adverse appearances by the Cassimatis at hearings and inquiries, leads people to believe that there is some tacit support of the Cassimatis by SICAG, or some of its members, particularly as the website states that is so in any case. So it is understandable that ASF members would ask questions of insiders as to the plans and cohorts of Manny.

Lastly, with the intimate knowledge that SICAG central have from former Storm insiders, it is incredible that they do not know the names of the Secret 60 

These are simple modest intelligible concerns that you, specialed, seem not only unable to grasp, but also unable to answer. 

Your answers further are personalised and not in the spirit of ASF which is to advance the knowledge and expertise of traders and investors, Storm victims included.

gg


----------



## specialed (19 November 2009)

cuttlefish said:


> So SICAG don't support Cassimatis they'd just like him to win a court case that grants him his money back.  Excuse my illogical thought processes.




Let him get all the money back he wants, then he too will be worth going after for more than just the jail time he deserves...



DocK said:


> .
> Can completely appreciate why SICAG would support manny & jules' court case against CBA.  The enemy of my enemy is my friend - at least until one of them is defeated!  Any successful case against CBA almost assures SICAG members with the same circumstances a much better chance of a good outcome - no matter who the case is brought by.  Why not let manny pay for the "test case" as such - and if he wins - sue him for all his winnings!  Noel O'Brien has stated for the record that he supports the court case, but this should not be taken as support for manny & jules - I don't see how this is open for misinterpretation.





Well Said...




Garpal Gumnut said:


> .
> 
> The fact that SICAG is based in the Sunshine Coast and not in Townsville or the North, where the majority of victims live.
> 
> ...




I have lost count of the amount of times the reasons why SICAG is based on the Sunshine Coast and not Townsville has been have been explained on this forum!!

It has been widely reported that many of the storm victims were family and friends of Storm FA's and therefore a connection between some of them is hardly surprising...a victim is a victim regardless of who their relatives worked for.....

I am not aware of any committe members who held High office on storm financial....

It has already been widely published that many if not most Storm FA's are now working for other financial companies which has nothing to do with SICAG, and given the committee members are storm victims, retired, with no prior Financial Planning experience it would seem strange that they would choose to begin a life in Financial planning or advice...but then again what the inquiries have shown is that any man and his dog can claim to be financial advisors...

Surely you do not believe that ASF is holding manny to account...and who do you think it was who chased Bennie and Co in order to get the inquiry, and then to get the terms of reference changed to include the banking industry.

The website clearly states that SICAG is neutral but, in the interests of transparency notes the possibility of relatioships, which all members are aware...as you are not a member....why the interest...

Why does it matter who knows who the 60 is...it will be a matter or public record at some point...the 60 is really none of SICAG's business yet any outcomes form their efforts will be....

and yes I will crawl back under my rock and wait for the next round of ridiculous claims...they are never far away......


----------



## Landyman (19 November 2009)

After seeing the result of the enquiry into OneTel do any of you seriously believe that any of these enquiries will result in any remedy for Storm Investors or punitive action against the Cassimatis'?.

If perchance you do (and the Cassie's have not cleaned you out totally)I have a lazy "Greg Chappell" in my pocket that says they will  "walk".

The same again that the so called regulators will not do what is really needed and legislate a "fiduciary" relationship between advisor and client.

Landy


----------



## Garpal Gumnut (21 November 2009)

Landyman said:


> After seeing the result of the enquiry into OneTel do any of you seriously believe that any of these enquiries will result in any remedy for Storm Investors or punitive action against the Cassimatis'?.
> 
> If perchance you do (and the Cassie's have not cleaned you out totally)I have a lazy "Greg Chappell" in my pocket that says they will  "walk".
> 
> ...




I would agree, Manny will probably get away with it, and the underlings will go to gaol.

The lower orders need to spit out all they know, as their chances for doing so are receding by the day.

I have the names of 11 of the Secret 60 by the way.

gg


----------



## specialed (21 November 2009)

Great to hear GG, so who's on it ?


----------



## condog (22 November 2009)

specialed said:


> Great to hear GG, so who's on it ?




Not Wise - defamation ????


----------



## Solly (22 November 2009)

*"Storm Financial investors to fight Commonwealth Bank"*

"HUNDREDS of former Storm Financial investors are preparing to launch individual action against the Commonwealth Bank to recoup their life savings.

Others are also considering suing law firm Slater and Gordon, which has been facilitating a resolution scheme for clients, if investors do not win back adequate compensation."

More by Mitch Gaynor in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26381241-3102,00.html


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## Garpal Gumnut (22 November 2009)

specialed said:


> Great to hear GG, so who's on it ?




I'd prefer to wait until its public knowledge.



condog said:


> Not Wise - defamation ????





I'm not worried about defamation as naming them would not defame them, I just wouldn't feel comfortable publicising the names.

gg


----------



## condog (22 November 2009)

Garpal Gumnut said:


> I'm not worried about defamation as naming them would not defame them, I just wouldn't feel comfortable publicising the names.
> 
> gg




Yeh , but it will if you have one name wrong or one fact wrong... 

If you have any wealth accumulated its not worth the risk....

And the moderators of this forum would be implicated if they left it up..... So not here not now eyyy

Yep let it go public.


----------



## Garpal Gumnut (22 November 2009)

Solly said:


> *"Storm Financial investors to fight Commonwealth Bank"*
> 
> "HUNDREDS of former Storm Financial investors are preparing to launch individual action against the Commonwealth Bank to recoup their life savings.
> 
> ...




Now this is what I call making good and proper preparation for a lawyers' picnic. 

If this is true, they really need to cast off the moniker of "victim" and assume that of "investor possibly done over by big bank/law frm" and be upfront and go for what they can get.

In this situation in the past the only people who win are the lawyers and the banks rarely suffer. Just look at Opes Prime where some really smart people were done over. Not saying the Stormers aren't smart by the way. 

I wonder if this is part of the SICAG Model?

gg


----------



## Grey Ghost (22 November 2009)

Garpal Gumnut said:


> I'd prefer to wait until its public knowledge.
> 
> gg




GG When and how do you expect it to become public knowledge?


----------



## Garpal Gumnut (22 November 2009)

Grey Ghost said:


> GG When and how do you expect it to become public knowledge?




Soon.

Very soon.

I heard it in the Great Northern Hotel last week from an estate agent, who also mentioned that Manny's mansion has had a fair few interested buyers who on closer inspection decided not to go any further.

Its been bloody hot up here this week so we haven't been talking much just drinking.

gg


----------



## specialed (22 November 2009)

Garpal Gumnut said:


> I'd prefer to wait until its public knowledge.
> 
> 
> 
> ...




So if I understand this right you have been stating all week that SICAG should name the secret 60 but you are not willing to ?  

And now

"HUNDREDS of former Storm Financial investors are preparing to launch individual action against the Commonwealth Bank to recoup their life savings."

_Storm Financial investors to fight Commonwealth Bank _at http://www.news.com.au/couriermail/story/0,23739,26381241-3102,00.html

Does anyone know who the "Secret hundreds are", I'm sure SICAG do and I'm sure they should name all of them straight away.......


----------



## Garpal Gumnut (22 November 2009)

specialed said:


> So if I understand this right you have been stating all week that SICAG should name the secret 60 but you are not willing to ?
> 
> And now
> 
> ...




Yes mate, you've got it in one.

I think SICAG should name them. It will go a long way towards helping the SICAG Model, as most posters on this thread understand that model.

Its the least SICAG can do.

And the victims don't need your flippant attitude.

Let them sue individually, but they don't have as much dosh squirreled out last December or January of this year as some.

gg


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## bunyip (22 November 2009)

Solly said:


> *"Storm Financial investors to fight Commonwealth Bank"*
> 
> "HUNDREDS of former Storm Financial investors are preparing to launch individual action against the Commonwealth Bank to recoup their life savings.
> 
> Others are also considering suing law firm Slater and Gordon, which has been facilitating a resolution scheme for clients, if investors do not win back adequate compensation."




LOL......Maybe they should sue themselves for risking their family homes in such a highly adventurous escapade as heavily gearing into the stockmarket!

I can just imagine the thinking of some of the law firms who have their noses out of joint because Slater  & Gordon won the Storm business. 
These firms now see a second chance to have a bite of the pie by suing S & G on behalf of unhappy Storm clients.
Win lose or draw, there will be big dollars in it for them.

Don't you just love the hungry, greedy, dog eat dog mentality of lawyers!


----------



## Ferret (22 November 2009)

GG,

This smacks of hypocrisy.  

How is it you could be so critical of SICAG for not naming the secret 60, when now you refuse to do so yourself?


----------



## Solly (23 November 2009)

*"Former Storm Financial planners face industry probe"*

"ABOUT a third of the planners who promoted investments in failed Storm Financial face scrutiny from the nation's peak financial planning body.

The Financial Planning Association has launched an investigation of 11 members who comprised part of the 34-strong advisory team that worked for the Townsville-based firm."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26384693-3122,00.html


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## Solly (23 November 2009)

*"Shattered by Storm"*

"Townsville single father Steve Reynolds is one of 14,000 former Storm Financial clients anxiously waiting for a politician in Canberra to start talking tonight.

Shattered dad just wants to keep his house."

Read more by Peter Michael on the front page of today's Courier Mail.


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## Garpal Gumnut (23 November 2009)

Ferret said:


> GG,
> 
> This smacks of hypocrisy.
> 
> How is it you could be so critical of SICAG for not naming the secret 60, when now you refuse to do so yourself?




Thats a fair call I suppose.

One I know of has suffered huge financial losses in other ways and I didn't want to add to his pain.

They have sixty names, I only have 11, that would be my mitigation.

No its a fair call, on reflection. It is hypocritical of me.

gg


----------



## orr (23 November 2009)

bunyip said:


> LOL......Maybe they should sue themselves for risking their family homes in such a highly adventurous escapade as heavily gearing into the stockmarket!
> 
> I can just imagine the thinking of some of the law firms who have their noses out of joint because Slater  & Gordon won the Storm business.
> These firms now see a second chance to have a bite of the pie by suing S & G on behalf of unhappy Storm clients.
> ...





Just to make everyone feel sick I was speaking to a partner from a Firm(not S and G)only yesterday, who's making a presentation this week with regards Storm. Whether this figure applies to this brief I could only speculate, But with regard to their specialty, the firm books them out at $800/hr, this was a pre GFC rate. And life as a partner is all about billable hours.


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## Ironhalo (23 November 2009)

Storm clients wanting to sue S&G for not getting them their life-savings back, or not as much as they thought?

The greedy pricks should be thankful for what they get back, I know my mother sure is.

Sorry, I got done over by Storm as well, but this 'sloped shoulders' (as we like to call it in the military) whereby it's everyone's fault but theirs, really gets on my goat. People need to take SOME responsibility for their own apathy and misplaced faith.


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## Jifromoz (23 November 2009)

Hi Everyone,

The report is out. Go to : 

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/report/report.pdf

One of the points raised
" This points the committee towards the
inescapable conclusion that there was something about Storm”” be it their staffing and
resourcing levels, their computing systems, the degree of leverage in their model, their
understanding of their responsibility in relation to margin calls, or a combination of
these and other factors””which led to an inability to receive, handle and resolve
margin calls during the critical period before their customers went into negative equity
and were sold out of the market. The committee does recognise that the rate at which
market conditions were changing, taken together with the number of client accounts
that would have been going into margin call at the same time, would create a
formidable administrative burden. However, Storm is alone among the advisory
groups in having ended up in a situation characterised by such catastrophic losses for its clients."


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## Grey Ghost (23 November 2009)

Ironhalo said:


> Storm clients wanting to sue S&G for not getting them their life-savings back, or not as much as they thought?
> 
> The greedy pricks should be thankful for what they get back, I know my mother sure is.




Ironhalo how much did your mother actually get back?
If you don't want to put a dollar figure on it a percentage of her losses will do.
And how much did she have to pay S & G as well?


----------



## Julia (23 November 2009)

Bernie Ripoll was briefly interviewed on ABC Radio this evening when the report was tabled.  When asked for the main resolution to come out of the nine month enquiry he proudly announced that henceforth financial planners would be required to make the financial wellbeing of their clients their first consideration, rather than their own profits.

Isn't it just staggering that what should be so utterly ethically obvious seems to have to be an official dictate from a government enquiry!

As so many Stormers have said, they consulted financial planners in the implicit understanding that the planners were being contracted to act in the interests of the clients.

Just a naive dream, folks.


----------



## Mindstorm (24 November 2009)

Julia said:


> Bernie Ripoll was briefly interviewed on ABC Radio this evening when the report was tabled.  When asked for the main resolution to come out of the nine month enquiry he proudly announced that henceforth financial planners would be required to make the financial wellbeing of their clients their first consideration, rather than their own profits.
> 
> Isn't it just staggering that what should be so utterly ethically obvious seems to have to be an official dictate from a government enquiry!
> 
> ...





Thanks so much for this Julia.

Yes, it is quite staggering that Mr Ripoll thinks that 'in future' financial planners should be looking after their clients interests!  

If we go to a doctor, dentist, pharmacist, radiologist, cardiologist, oncologist, etc., etc., we pay good money to them for 'their expertise', and expect that they are looking after our wellbeing.  It would seem that we can pay way over the odds to a 'professional financial planner', way more than any other professional, and expect that they have, until now, been looking after their own financial situation rather than the situation of those who are paying them for their advice.

MS


----------



## Solly (24 November 2009)

*"Rudd Government to investigate compensation scheme after Storm Financial collapse"*

November 23, 2009 11:00pm
A LAST-resort compensation scheme to bail out investors will be examined by the Rudd Government in the wake of the $3 billion collapse of Townsville-based Storm Financial. 

More by Stefanie Balogh and Emma Chalmers in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26392230-3102,00.html


----------



## Solly (24 November 2009)

*"Tough laws to avoid new Storm collapse"*

"INAPPROPRIATE advice by financial planners and lax lending practices by banks have been blamed for the "catastrophic" losses suffered by clients of Storm Financial."

More by Nicola Berkovic in The Australian here;

http://www.theaustralian.com.au/news/nation/tough-laws-to-avoid-new-storm-collapse/story-e6frg6nf-1225802859454


----------



## Solly (24 November 2009)

*The report from the Inquiry into Financial products and services in Australia*

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/report/index.htm


----------



## Solly (24 November 2009)

*"Storm report recommends overhaul"*

"A PARLIAMENTARY inquiry investigating the collapse of Storm Financial has recommended the banning of commissions and the introduction of a fiduciary duty on financial planners to act in the interests of their clients."

More from Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/11/24/95911_news.html


----------



## Solly (24 November 2009)

*"After the Storm, shift on planners"*

"A REVOLUTION in how customers pay financial planners is likely after a long-awaited parliamentary committee tables its recommendations late tonight."

More from Stuart Washington in Business Day here;

http://www.businessday.com.au/business/after-the-storm-shift-on-planners-20091122-istg.html


----------



## Solly (24 November 2009)

*"Planners face crackdown on licences"*

"Financial planners are set to win a reprieve from a ban on commissions but will be forced to adopt tougher professional standards and licensing under a wide-ranging reform plan."

Read more in The Australian Financial Review of November 23, 2009.


----------



## Solly (24 November 2009)

*"The Storm Report"*

For those interested, see today's printed version of The Courier Mail for more details and interesting reading regarding the saga.


----------



## Judd (24 November 2009)

Right, so all necessary ethical behavior will, in future, be resolved.  BS.

All unlisted products as recommended by financial planners, with their inherent conflict of interest, will be banned.  BS.  Mind you such products do have the advantage for some in that it is a form of forced saving and small amounts can be put in on a regular basis.  But for mine the internal cost of them is way, way too high.

If applying for a margin loan, the lenders will be required to know your exact financial details, which enables the potential for cross selling, even though you may not want them to know all things about you.  Already in the pipeline. 

Watch the cost of financial planning increase as a result of this BS which means that those who do need it and are scared of their own shadow when it comes to finances will probably not be able to access it.

Watch for the demise of truly independent financial planners as a consequence and the further consolidation of financial planning, if you wish to call it that, into the hands of the majors.

Friggin nanny state.


----------



## Solly (24 November 2009)

*"Storm serves as warning"*

"A LANDMARK inquiry sparked by the collapse of Storm Financial has stopped short of calling for laws banning commissions in financial planning, instead placing the decision in the hands of the Government."

More by Ruth Williams and Peter Martin in The Age here;

http://www.theage.com.au/business/storm-serves-as-warning-20091124-j9c9.html


----------



## Solly (24 November 2009)

*"Fees find foe, but no giant steps"*

"AFTER nine months and thousands of pages of submissions, a parliamentary committee last night squibbed the chance to rid the financial planning industry of distortionary payments."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/fees-find-foe-but-no-giant-steps-20091124-j9e8.html


----------



## Temjin (24 November 2009)

Banning all forms of commission and legally require all financial advisers to NOT ONLY just recommend "approved listed" products will certainly reduce the conflict of interest out there.

Those two were the only reasons why I decided to not further pursue the financial adviser career. I just cannot accept taking in commission and only recommended a limited list of products make it hard for me to properly put my potential clients interest ahead. 

As if anyone have seen financial advisers actually recommend others to buy precious metals, commodities and ETFs (like gold stocks, oil stocks, BRIC / emerging countries, etc) as an alternative to managed funds.


----------



## doctorj (24 November 2009)

Product providers have little if any direct distribution capacity and rely on intermediaries to sell their product.  If you ban commissions, how are intermediaries remunerated?  It takes a long time to close a sale and distribution costs are high (time, training, insurance, other overheads etc).  Clients would need to pay the fee up front – sale volumes would fall through the floor as the vast majority of savings and protection products are SOLD not bought.  

  Without a sensible alternative, you risk destroying an industry.  Advisers, brokers and agents need to make a living doing what they’re doing, or they will do something else.  Without distribution, products don’t sell.  Let’s not forget savings/protection are a good thing for all parties – when properly sold, the client gets what they need and the economy gets a savings pool which is vital for investment.

  Miss-selling is a huge issue and is the world over.  I don’t see getting rid of commissions (and volume linked incentives) as the answer.  Perhaps a sensible alternative is to impose some kind of commission clawback on the adviser when a client’s scheme fails.  Then at least they have some skin in the game alongside their client.


----------



## cuttlefish (24 November 2009)

> Without a sensible alternative, you risk destroying an industry. Advisers, brokers and agents need to make a living doing what they’re doing, or they will do something else. Without distribution, products don’t sell. Let’s not forget savings/protection are a good thing for all parties – when properly sold, the client gets what they need and the economy gets a savings pool which is vital for investment.





Dr J - there's no reason that the distribution arms can't exist for financial products - just don't let the people that sell them call themselves financial planners/advisors.

I don't go to see a Pharmacist for medical advice why should I go to an insurance/investment product salesman for financial advice.  If my Dr advises me to take a certain medication I'll go and buy it from a pharmacist. Along the same lines - if a Financial Advisor/Planner recommends an insurance product then the client can go an purchase it from the distributor of that product.

Sure there will always be some blurring of the lines but by at least making it  illegal for financial planners/advisors to receive commissions for products it will remove one level of conflict of interest.


----------



## doctorj (24 November 2009)

cuttlefish said:


> Dr J - there's no reason that the distribution arms can't exist for financial products - just don't let the people that sell them call themselves financial planners/advisors.



Fair suggestion. So how do they draw the line between advised and unadvised sales?  Can a non-financial adviser provide a product recommendation?  If not how do they sell?


----------



## -Bevo- (24 November 2009)

Solly said:


> *"Rudd Government to investigate compensation scheme after Storm Financial collapse"*
> 
> November 23, 2009 11:00pm
> A LAST-resort compensation scheme to bail out investors will be examined by the Rudd Government in the wake of the $3 billion collapse of Townsville-based Storm Financial.
> ...




_A LAST-resort compensation scheme to bail out investors will be examined by the Rudd Government in the wake of the $3 billion collapse of Townsville-based Storm Financial_

Another silly Rudd Idea not sure how it would work but the idea that investors should be bailed out for been incompetent or taking unnecessary risk is not the roll of Governments, this may promote risk taking if the government is there to bail out people from failed investments.


----------



## Judd (24 November 2009)

I've read the report.  Probably misunderstood quite a portion of it.

At no stage from the report did I get a clear understanding of what was the actual role of a financial planner, i.e. what is it exactly they are supposed to do.

Nor did I get any clear indication what the committee's views were on the appropriate level of gearing for margin loans.  Is it 10%? 15%? 20%? 60% Because, in my view, this is the crux as to why most Storm clients were trashed.  Sure, they were critical of the one-size-fits-all approach by Storm Financial but that is all.

Nothing really about double gearing (it's triple really as the majority of companies have debt and margin lending is against equity.  Just think about that for a moment.)  But they seemed to OK it since the new requirements for margin loans are to take an holistic approach.   Hmmm, I roll up with $900k in unencumbered shares and ask for a loan of $100k.  Why do they need to know if I have a mortgage?

Waste of time.


----------



## cuttlefish (24 November 2009)

doctorj said:


> Fair suggestion. So how do they draw the line between advised and unadvised sales?  Can a non-financial adviser provide a product recommendation?  If not how do they sell?




Good questions, I guess there's  numerous ways it could be structured, all of which will of course have flaws, but in my view a basic starting point could be something like this:

* Licensed Financial Advisor is a regulated certification
* A Licensed financial advisor is not able to sell financial products or receive commission for the sale of financial products in any manner or form, from any party.
* The industry body for Financial Advisors markets itself appropriately and highlights this aspect of their industry and outlines the benefits
* It is illegal to market/brand oneself as a Financial Advisor if you are not certified and it is illegal to provide a statement of advice if not certified.
* Resellers/distributors of financial products do not need to be licensed financial advisors (and in fact can't be)
* Distributors of products can make product recommendations but any recommendation and any marketing material they use needs to have a disclaimer that they are not a licensed financial advisor and that before purchasing the product the client should consider seeking advice from a licensed financial advisor.
* The signing page of any purchase agreement for an investment product should have a tick box for the client to acknowledge this disclaimer.


----------



## doctorj (24 November 2009)

cuttlefish said:


> G
> * Resellers/distributors of financial products do not need to be licensed financial advisors (and in fact can't be)
> * Distributors of products can make product recommendations but any recommendation and any marketing material they use needs to have a disclaimer that they are not a licensed financial advisor and that before purchasing the product the client should consider seeking advice from a licensed financial advisor.
> * The signing page of any purchase agreement for an investment product should have a tick box for the client to acknowledge this disclaimer.



That would make sense - it won't stop people from whinging and calling for more regulation ex-poste a failure.  I agree that people need to take more responsibility and maybe this is a way to do it.

Financial advisers would then be limited to sophisticated, high net worth individuals who see the value and can justify an up front payment (the size of their portfolio makes it a relatively small %).  The smaller, unsophisticated end of the market would be pushed towards product salespeople.  Many advisers would change into sales to service the mass market.  Sadly it also means those in most need of advice (unsophisticated individuals) are less likely to receive it.  At least it would be more transparent and there would be fewer cases of salesmanship being dressed up as advice.


----------



## TOBAB (24 November 2009)

-Bevo- said:


> _A LAST-resort compensation scheme to bail out investors will be examined by the Rudd Government in the wake of the $3 billion collapse of Townsville-based Storm Financial_
> 
> Another silly Rudd Idea not sure how it would work but the idea that investors should be bailed out for been incompetent or taking unnecessary risk is not the roll of Governments, this may promote risk taking if the government is there to bail out people from failed investments.




Have to agree.

Bad financial advice is 100% THE FAULT OF THE ADVISOR.Failing to asses the clients fin position is 100% fault of the advisor. Not being on top of your client's margin loans is 100% the fault of the advisor.

Sue the banks if you can, but really, their role is as a money lender nothing more. 

Stop the nanny state.


----------



## DocK (24 November 2009)

Judd said:


> ....
> Nor did I get any clear indication what the committee's views were on the appropriate level of gearing for margin loans.  Is it 10%? 15%? 20%? 60% Because, in my view, this is the crux as to why most Storm clients were trashed.  Sure, they were critical of the one-size-fits-all approach by Storm Financial but that is all.
> 
> Nothing really about double gearing (it's triple really as the majority of companies have debt and margin lending is against equity.  Just think about that for a moment.)  But they seemed to OK it since the new requirements for margin loans are to take an holistic approach.   Hmmm, I roll up with $900k in unencumbered shares and ask for a loan of $100k.  Why do they need to know if I have a mortgage?
> ...




Do you really think it is the committee's role to recommend an appropriate level of gearing?  I think this is something that would vary greatly depending upon the circumstances of the individual investor.  A youngster earning a good salary with no committments is an entirely different proposition to a middle-aged couple with mortgage and kids and mid-range income, and different again to a retired pensioner - no one level of gearing is going to "fit" all three of these scenarios.  It comes back to the "one size fits all" approach being entirely inappropriate in the financial advice industry.  Same for double gearing - depends upon the client as to whether it's advisable (pun intended) or not.

I didn't get a great deal out of the report.  Didn't really expect to.  I did read it quite late last night though, and perhaps a second run-through will impress me a bit more.  I would have liked to have seen a recommendation for commission-based advice to be scrapped, or relegated to non-advice salespeople.  I would also like to see a mandatory degree qualification for financial planners (and I mean a proper degree) similar to that required by accountants.  Something to keep the cowboys out of the industry would be nice.....


----------



## cuttlefish (24 November 2009)

-Bevo- said:


> _A LAST-resort compensation scheme to bail out investors will be examined by the Rudd Government in the wake of the $3 billion collapse of Townsville-based Storm Financial_
> 
> Another silly Rudd Idea not sure how it would work but the idea that investors should be bailed out for been incompetent or taking unnecessary risk is not the roll of Governments, this may promote risk taking if the government is there to bail out people from failed investments.




I agree too - stupid idea.  
Labor parties + control of purse strings = (bad)^


----------



## Julia (24 November 2009)

cuttlefish said:


> Good questions, I guess there's  numerous ways it could be structured, all of which will of course have flaws, but in my view a basic starting point could be something like this:
> 
> * Licensed Financial Advisor is a regulated certification
> * A Licensed financial advisor is not able to sell financial products or receive commission for the sale of financial products in any manner or form, from any party.
> ...




Cuttlefish, I see what you're getting at with this, but I don't really see it working well for the people who need it most.

And I think it would take about five minutes for a duly Licensed Financial Planner/Adviser to hook up with a product distributor, and lo, we are back to where we were.

I can see it now.  The naive investor goes to see the Licensed Financial Planner, secure in the knowledge that because the Planner isn't actually going to be selling him/her anything, all the advice offered will be absolutely full of integrity, tailored to the nth degree to his/her personal circumstances.

The interview ends with smiles and joy all round, at which stage the investor says "ah, but I don't know where to buy this managed fund, those bonds, etc that you are so sure will deliver me everlasting financial freedom".

Whereupon the very ethical Licensed Financial Planner will say, "no worries, here is the name of a firm which will provide you with what I have suggested".
The client smiles happily, shakes hands, and goes off to be fleeced by the product distributor who in turn happily accepts his backhander from the very ethical Financial Planner.

Just essentially adding another layer to the whole transaction imo.

Or perhaps I simply lack any decent level of faith in humanity on most levels.


----------



## Garpal Gumnut (24 November 2009)

I haven't got time at present, too much work on and a mate needs a hand agisting and feeding cattle, so I will not comment on recent Ripoll report and folks reaction.

My initial superficial thoughts are.

1.  SICAG Model has been a monumental disaster and will neither assist present victims nor more importantly future ones. It plays into the Manny Model of trying to get the banks to pay back all the pre-margin losses which they won't do. Manny would be grateful for their good work. SICAG are the only organisation in all of this not to say anything adverse about Manny. They are good at organising bbq's to give them fair due.

2.  The Financial Planning Industry have carte blanche to continue ripping off muppets.

3.   The responsible planners formerly working at Storm continue to, and will continue advising muppets and collecting commissions.

In Queensland it used be called "The Joke" in pre-Fitzgerald Inquiry times.  

gg


----------



## cuttlefish (24 November 2009)

Julia said:


> Cuttlefish, I see what you're getting at with this, but I don't really see it working well for the people who need it most.
> 
> And I think it would take about five minutes for a duly Licensed Financial Planner/Adviser to hook up with a product distributor, and lo, we are back to where we were.
> 
> ...




Julia - I agree entirely that is a scenario that could/(will almost inevitably) occur - but it would also be blatantly and patently against the law - immediately liable to criminal prosecution.

The analogy of the medical profession is reasonable imo.  The shift that would occur is that distributors/salesmen for investment products would sell to financial planners instead of directly to retail  - just like pharmaceuticals  tend to market to Dr's rather than retail for specific products (i.e. anything needing a prescription).


Just like occurs for Dr's (has anyone ever had a script written for them on non-drug-company stationary with a non-drug-company pen?) there will be the inevitable gifts and subtleties - but at the end of the day anyone offering/accepting real financial conpensation to licensed financial advisors would be acting illegally and the case would be black and white - i.e. there would be no need to prove professional misconduct or any other such complexities.


----------



## Solly (25 November 2009)

*"Ripoll does little to stop another Storm"*

"In financial advisory circles they have been known to call a DFP (diploma of financial planning) a diploma of finger painting. In this business the barriers to entry are not exactly … exacting.

Bernie Ripoll and his colleagues ought to be commended then, in advocating better education for planners. But that is where the eulogy ends."

More by Michael West in the SMH here;

http://www.smh.com.au/business/ripoll-does-little-to-stop-another-storm-20091124-jhc1.html


----------



## Solly (25 November 2009)

*"Come clean on your mistakes, banks told"*

"BANKS may not have acted ethically, appropriately, morally and prudently in granting loans to former clients of the failed financial planner Storm Financial, which collapsed last year leaving investors $3 billion out of pocket, a parliamentary committee says."

More by Ruth Williams in the SMH here;

http://www.smh.com.au/business/come-clean-on-your-mistakes-banks-told-20091124-jhbl.html


----------



## Solly (25 November 2009)

*"Too soft on banks"*

"STORM Financial victims have slammed the parliamentary inquiry into the disaster for failing to take a harder line with banks.

Noel O'Brien, co-chair of the Storm Investors Consumer Action Group, yesterday criticised the probe headed by Labor MP Bernie Ripoll for not including lender liability laws among 11 proposed reforms to overhaul the financial planning sector."

More by Anthony Marx with Emma Chalmers in the Herald Sun here;

http://www.heraldsun.com.au/business/too-soft-on-banks/story-e6frfh4f-1225803475557


----------



## Solly (25 November 2009)

*"Investors furious at Storm inquiry"*

 "SUNSHINE Coast investors burnt by the $3 billion collapse of Storm Financial are furious that a landmark inquiry into the company’s demise failed to take the banking industry to task

Sean McArdle, said he was ambivalent about the inquiry, because there was never an attempt to determine guilt or wrongdoing on the part of the banks."

More by Mark Bode in the Sunshine Coast Daily here;

http://www.sunshinecoastdaily.com.au/story/2009/11/25/banks-let-off-lightly-furious-investors-say/


----------



## Solly (25 November 2009)

*"Threats to director verging on contempt"*

"THE Financial Planning Association was warned it faced criminal charges or being found in contempt of parliament after it threatened one of its own directors over her submission to the Storm Financial inquiry."

More by Geoffrey Newman, Wealth Editor in The Australian here;

http://www.theaustralian.com.au/news/threats-to-director-verging-on-contempt/story-e6frg6n6-1225803464791


----------



## Judd (25 November 2009)

For what it is worth, and if you wish to do so, have a listen to Nightlife Podcast of 24 November.

http://www.abc.net.au/nightlife/podcast.htm

or

http://mpegmedia.abc.net.au/local/nightlife/nightlife_m1817011.mp3


----------



## Solly (25 November 2009)

*"Come clean on your mistakes, banks told"*

"BANKS may not have acted ethically, appropriately, morally and prudently in granting loans to former clients of the failed financial planner Storm Financial, which collapsed last year leaving investors $3 billion out of pocket, a parliamentary committee says."

More by Ruth Williams on brisbanetimes.com.au

http://www.brisbanetimes.com.au/business/come-clean-on-your-mistakes-banks-told-20091124-jhbl.html


----------



## specialed (25 November 2009)

Garpal Gumnut said:


> I haven't got time at present, too much work on and a mate needs a hand agisting and feeding cattle, so I will not comment on recent Ripoll report and folks reaction.
> 
> My initial superficial thoughts are.
> 
> ...






At least your consistent gg, still managing to throw something in about SICAG even though the chatter is about the report. If you dont understand how SICAG has already assisted so many storm victims you really havent grasped why they formed in the first place and obviously either dont talk to many SICAG members or a VERY selective in those who you listen too......I understand the deserved critisism of the "Storm model" but as I have asked before, what exactly is the "SICAG model"...Would love to hear about the model they operate under. I havent been able to find their description of it anywhere.In the meantime keep up the great work...


----------



## Solly (26 November 2009)

*"PJC points finger at Storm model"*

"The Parliamentary Joint Committee (PJC) has found the lack of information that banks could provide on margin loan accounts "deeply troubling" but also found Storm Financial's investment model significantly contributed to the problem."

More by Michael Hobbs on financialstandard.com.au; 

http://www.financialstandard.com.au/news/view/27388/


----------



## Solly (27 November 2009)

*"From a Ripoll to a Storm: Financial planners under fire"*

"There has always been a fundamental flaw in the way financial planning works in this country."

An interesting article by Ross Greenwood on ninemsn.com.au;

http://money.ninemsn.com.au/blog.aspx?blogentryid=536948&showcomments=true


----------



## Solly (27 November 2009)

*Investigations into Storm firm continue
Liquidators remain*

"Liquidators of Storm subsidiary remain as client book sale prompts further investigations."

More by Kate Kachor on Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8003.htm


----------



## Solly (27 November 2009)

*"Overhaul of advice sector overdue"*

"FIDUCIARY is a cumbersome word, but when it comes to the security of private investors it should be paramount in the minds of all financial advisers."

More in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26404575-13360,00.html


----------



## Solly (27 November 2009)

*"Storm Financial founder's faith blinded him to reality, say victims"*

"RETIRED green grocers Linda and Tony Ahern believe disgraced Storm founder Emmanuel Cassimatis was 'like one of those American evangelists' ".

More by Peter Michael in The Courier-Mail of November 24, 2009 here;

http://www.news.com.au/business/story/0,27753,26392766-462,00.html


----------



## Solly (30 November 2009)

*"Clouds gather over Ripoll findings"*

"Australian financial planners and investors held their breath last week as the report into the country's financial products and services was finally delivered.

Many industry participants welcomed the recommendations, though others were left disillusioned."

The article by Kate Kachor in Investor Daily is here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8009.htm


----------



## Solly (30 November 2009)

Has anybody got any information on the dispute resolution process 
with former High Court judge Ian Callinan regarding the position of CBA 
with the compensation issue for Stormers with margin loans ?

I believe this was discussed yesterday on 29/11.

I asked my Stormer mate he hasn't heard anything.


----------



## DocK (30 November 2009)

I believe that no decisions have yet been made on any of the cases before the panel, and a further meeting has been scheduled for 3rd December.


----------



## Solly (30 November 2009)

DocK said:


> I believe that no decisions have yet been made on any of the cases before the panel, and a further meeting has been scheduled for 3rd December.




Thanks DocK, I'll let him know.


----------



## Solly (1 December 2009)

*"Panel to decide on Storm Financial investor compo"*

"LAW firm Slater & Gordon and the Commonwealth Bank will appear again on Thursday before a legal panel set to decide on compensation for Storm Financial victims."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26422677-3122,00.html


----------



## Solly (1 December 2009)

*"Storm report expected this week"*

"Liquidators pouring over the collapse of failed advisory firm Storm Financial are expected to finalise a report for the corporate regulator this week."

More by Daniel Hurst on brisbanetimes.com.au;

http://www.brisbanetimes.com.au/queensland/storm-report-expected-this-week-20091130-k12u.html


----------



## Solly (3 December 2009)

*"Worrells delivers report on Storm
Findings confidential"*

The liquidator of Storm Financial has delivered the findings of its investigation into the failed advisory firm to ASIC.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/8091.htm


----------



## DocK (3 December 2009)

Solly said:


> *"Worrells delivers report on Storm
> Findings confidential"*
> 
> The liquidator of Storm Financial has delivered the findings of its investigation into the failed advisory firm to ASIC.
> ...




From the linked article:


> Due to the confidential nature of the report, details of the findings could not be disclosed, the spokesperson said.




Curiosity killed the cat, and I'm damn curious.  Solly, as the source of almost all media links re the Storm Situation, I'd be eternally grateful if you could use your superpowers to divine the nature of the report


----------



## specialed (3 December 2009)

Silly question, but can anyone explain to me why / how the findings of a publicly financed inquiry ( to the tune of some $ 500 million ) can remain confidential ?


----------



## Rainbow (3 December 2009)

I hope it's not to protect the banks. There's a lot us us ex-stormers waiting and hoping for some good news so we can have a better Christmas than last year


----------



## DocK (3 December 2009)

Rainbow said:


> I hope it's not to protect the banks. There's a lot us us ex-stormers waiting and hoping for some good news so we can have a better Christmas than last year




I hear that!  I'm sick of waiting for an outcome to the Slater & Gordon/CBA resolution process - seems to be taking forever.  I know these things take time, but impatience is one of my larger flaws.  I suspect that my initial suspicions that the lawyers will benefit much more than I will, will be proven correct.  Hope not, but I'm mentally preparing myself for another shafting for Christmas.


----------



## Solly (3 December 2009)

*"Legal panel to decide on Storm compo*"

"An independent legal panel convenes in Sydney today to decide on compensation for victims of the failed north Queensland investment group Storm Financial."

More on abc.net.au;

http://www.abc.net.au/news/stories/2009/12/03/2760933.htm


----------



## Solly (3 December 2009)

*"Storm clients warned against new action
Seek second opinion"*

"Legal firm, Russell and Company sent letters to members of the Storm Investors Consumer Action Group (SICAG) with concerns over an alleged class action lead by rival firm Slater & Gordon."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8100.htm


----------



## Solly (4 December 2009)

*"All Storm clients want for Christmas is compensation"*

"LAWYERS representing about 2000 clients of failed Storm Financial are hopeful a key ruling on possible compensation from the Commonwealth Bank will be handed down before Christmas."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26437493-3122,00.html


----------



## Solly (5 December 2009)

*"Storm Financial victims eye indemnity policies"*

"MORE than 250 Storm Financial victims have flagged interest in funding legal action to recover what they believe is up to $50 million from insurance policies tied to the failed advisory firm."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26442710-3122,00.html


----------



## Garpal Gumnut (5 December 2009)

Solly said:


> *"Storm Financial victims eye indemnity policies"*
> 
> "MORE than 250 Storm Financial victims have flagged interest in funding legal action to recover what they believe is up to $50 million from insurance policies tied to the failed advisory firm."
> 
> ...






> But lawyer Stephen Russell, who represents the Cassimatises, cautioned SICAG members about joining the legal actions.
> 
> In a letter, Mr Russell said a claim had to demonstrate that "the client received nothing of any value whatsoever for the fee paid". He said this proposition was "difficult to sustain" and he recommended Storm clients seek alternative advice.
> 
> ...




This is a very tangled web.
SICAG need to give Stormers definitive advice.
To go with Slater and Gordon or to stick with the Cassimatis lawyers.
It is not surprising it has come to this.
The Storm model of payment is still endorsed on their website.
A mate says the opinions are all over the shop between lawyers and Stormers themselves.

gg


----------



## Mash (5 December 2009)

You really are confused aren't u GG.... "stick with the Cassimatis Lawyers"...
Have u not cottoned on to the fact that Stephen Russell is the foe..... he represents EC & JC and their puppets and the few poor souls who still think Manny is master .... 
I would think that SICAG will not be giving people advice on exactly what they should do... they are simply getting out what information comes to hand and allowing us to make our own decisions.... you really must grab some mortein and get rid of that bee in your bonnet...... you still mystify me with your SICAG model rubbish... what do you mean !!!!... No silly of me to ask really... I  know you won't answer that... guess you just like playing the role of SICAG basher in this saga... go ahead knock yaself out...those of us who really are affected by this know just what SICAG has done for us and your opinion matters little.
Mash


----------



## Garpal Gumnut (5 December 2009)

Mash said:


> You really are confused aren't u GG.... "stick with the Cassimatis Lawyers"...
> Have u not cottoned on to the fact that Stephen Russell is the foe..... he represents EC & JC and their puppets and the few poor souls who still think Manny is master ....
> I would think that SICAG will not be giving people advice on exactly what they should do... they are simply getting out what information comes to hand and allowing us to make our own decisions.... you really must grab some mortein and get rid of that bee in your bonnet...... you still mystify me with your SICAG model rubbish... what do you mean !!!!... No silly of me to ask really... I  know you won't answer that... guess you just like playing the role of SICAG basher in this saga... go ahead knock yaself out...those of us who really are affected by this know just what SICAG has done for us and your opinion matters little.
> Mash




Mash mate, you are entitled to your opinion.

The whole saga is very murky though and the ordinary Stormer doesn't know who to believe.

Any more info on the Secret 60. I have 17 names now.

Surely SICAG must know.

gg


----------



## Garpal Gumnut (5 December 2009)

Just to let all on the thread know that there is information coming out from left field sometime in the next two weeks that will probably lead to criminal charges.

I am unable to divulge any more information at present.

I heard it on good authority from one of the Secret 60 over a few beers at lunch today at the Marina. There may be less than 60 in the Secret 60 by the way. 59 anyway.

I don't like having food or drink on boats unless I'm fishing on the reef and completely pissed for four or five days, but I made an exception in this case.

gg


----------



## Solly (6 December 2009)

Garpal Gumnut said:


> Just to let all on the thread know that there is information coming out from left field sometime in the next two weeks that will probably lead to criminal charges.
> 
> I am unable to divulge any more information at present.
> 
> ...




gg, thanks for the heads-up on this, I eagerly await more.

I wonder if it has anything to do with Section 184.

I wonder what information Worrells have been able to give to ASIC.

I just hope that what ever direction this saga meanders I really hope that there will be some beneficial outcomes for the poor battered Stormers.


----------



## Solly (6 December 2009)

*"The Storm nightmare continues"*

"December 10, 2008 will be a day forever etched into the minds of thousands of Storm Financial investors and their families"

Mitch Gaynor's article on page 72 of The Sunday Mail today gives an overview of the affects that the collapse has had on some of those involved.


----------



## Garpal Gumnut (6 December 2009)

Solly said:


> *"The Storm nightmare continues"*
> 
> "December 10, 2008 will be a day forever etched into the minds of thousands of Storm Financial investors and their families"
> 
> Mitch Gaynor's article on page 72 of The Sunday Mail today gives an overview of the affects that the collapse has had on some of those involved.




The Stormers have lost millions.

The lawyers and liquidators will make the most out of it all, and the perpetrators will be back giving the same financial advice, if they are not already doing so, in two years time.

gg


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## pilots (6 December 2009)

The punters from Storm should get in to bed with the Firepower people here in Perth,  both have been taken to the cleaners big time.


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## specialed (6 December 2009)

Hey GG, 

Can I suggest you DONT track dont the transcript of Senator Williams speech to the Parliament last week regarding STORM. Given your concerted attempts at SICAG bashing it would probably be enough to have you slit your wrists.


----------



## Pindibog (6 December 2009)

Solly said:


> gg, thanks for the heads-up on this, I eagerly await more.
> 
> I wonder if it has anything to do with Section 184.
> 
> ...




What Statute Solly? My C.C. has 184 repealed. Do you mean 193 or 194?


----------



## Solly (10 December 2009)

*"Storm was on verge of EU.

EU calls in December 2008*"


"An email exchange between ASIC and Storm Financial has revealed the regulator was close to issuing an EU (enforceable undertaking) to the advice group."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8142.htm


----------



## DocK (10 December 2009)

Have any ex-stormers heard anything from the S&G/CBA resolution process?  I was hoping to have some feedback by now.....


----------



## Pindibog (10 December 2009)

DocK said:


> Have any ex-stormers heard anything from the S&G/CBA resolution process?  I was hoping to have some feedback by now.....




No and that was 7 weeks ago since the interview.


----------



## Mindstorm (10 December 2009)

No, and our interview was 8 weeks ago.  

MS


----------



## Grey Ghost (10 December 2009)

Pindibog said:


> No and that was 7 weeks ago since the interview.






Mindstorm said:


> No, and our interview was 8 weeks ago.
> 
> MS




Hang in there people and could you post once you find out anything.  I think there are a lot of people who would be interested.


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## Mindstorm (10 December 2009)

Grey Ghost said:


> Hang in there people and could you post once you find out anything.  I think there are a lot of people who would be interested.




We are all hanging in there, very patiently, but it's been a very long year for all of us.

Sorry, I don't understand what you mean regarding "find out anything".

Find out anything about what?  If we have been 'interviewed' by CBA the next step is supposed to be that they profer an 'offer' to our lawyer.  We are not allowed to discuss this with anyone, let alone post about it on a forum.

What is it that you think people would be interested in?

MS


----------



## Garpal Gumnut (10 December 2009)

My contacts tell me that the wait will be worth it. 

CBA are arguing that their reputational damage needs to be minimised, a few hundred mil here or there will not affect their bottom line.

They are, like Scattini after blood, the blood of the perpetrators of the whole stupid model. 

And the deal will reflect this.

So just hang in there.

There are bigger issues than you Stormers, unfortunately for you,  being played out, which is distressing for the Stormers.

ASIC and the Liquidators are circling as well, and the Regulators need to ensure it will not happen again and that any criminality is punished with long sentences.

The banks reputation with Stormers may be in tatters but you are not a huge number in the big game.

From what I hear you will be "looked after" but won't be able to afford to indulge in harebrained schemes like this ever again, as a result of the settlement.

gg


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## Grey Ghost (12 December 2009)

Mindstorm said:


> We are all hanging in there, very patiently, but it's been a very long year for all of us.
> 
> Sorry, I don't understand what you mean regarding "find out anything".
> 
> ...




I meant about any settlement the bank is prepared to offer.
For some time now the CBA have said they will 'right the wrongs' they have done in relation to their part in this whole saga.  There are more than a few of us who are interested in just exactly what this means in practice.  
I should have guessed though that any offers they make to you will be conditional on the details remaining confidential.  I am certainly not suggesting you do anything which would put this at risk although I know from past experience confidentiality clauses are usually to protect the bank and not the customer.  
Good luck with this and I hope you get a satisfactory outcome.



Garpal Gumnut said:


> CBA are arguing that their reputational damage needs to be minimised, a few hundred mil here or there will not affect their bottom line.
> 
> From what I hear you will be "looked after" but won't be able to afford to indulge in harebrained schemes like this ever again, as a result of the settlement.
> 
> gg




GG as usual you appear to have some inside knowledge on this.
Are you in a position to elaborate?


----------



## Garpal Gumnut (12 December 2009)

Grey Ghost said:


> GG as usual you appear to have some inside knowledge on this.
> Are you in a position to elaborate?




Unfortunately not.

Hang in there it should go your way.

gg


----------



## Harleyquin (14 December 2009)

GG we may only be a small number in some eyes but there were reportedly 14000 people affected by the collapse of storm and although some are not affected as badly as others, they are also aware of the fallout over this.  Everyone of those 14000 former investors has perhaps 12 relatives and 12 friends and acquaintances who they can relate this message to and all of a sudden you've got thousands of people who will never go near the people responsible for this disaster.  They will never go near a 'professional' financial person again. It's very easy to bring up the subject at your local Christmas barbeque and all of a sudden the message gets out there to another twenty.  Don't underestimate the power of these small numbers of people involved.  Even this forum is getting the message out there.

The media have reported heavily on this collapse and the general public are becoming more aware of the shortcomings in the financial industry and all of the players who have contributed to this disaster.  This hasn't been a black swan event as many of you have already pointed out.  The market analyists reported this financial downturn at least twelve months before and yet the financial planners and the banks continued on their merry way totally ignoring what was happening to the market. 

Everyone is edgy when it comes to trusting someone else with their own money,especially in light of this collapse and many others, and it doesn't take much to convince someone else that they are better off educating themselves and deciding how to invest for themselves than to trust someone who couldn't care less and is prepared to charge you a fortune to do nothing.  How many others on this forum won't trust a 'professional' financial person, you can go back through the posts on this forum and find a number of supposedly clever investors who don't want to know about a so called professional financial person. They will prefer to look after their own money in their own way  This disaster has proved to all that there is no such thing as a 'professional' in the financial planning industry.  They can cover themselves legally with their Statements of Advice and they are untouchable.

This has destroyed the financial lives of so many, their health is suffering, their ability to work is suffering, you've only seen the tip of the iceberg.  Whole communities have been devastated financially and emotionally.  Twelve months after the event there are thousands of ex stormies on antidepressants desperately trying to continue to work and live in rented accommodation knowing that at the end of the day it's all for nothing.  They have all been thrown to the financial scrapheap.


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## Judd (15 December 2009)

Not to detract from the valid points made in Harleyquin's post but the financial planning group which "bought" Storm's book advised that the actual number of active clients was around 5,000 not the reported 14,000.  The remainder were former clients who bought life insurance policies and the like but never had any further involvement in Storm's song and dance act.

The impact on those 5,000 would likely be as per Harleyquin's views.  I recall reading an article where in a small rural town the Storm money machine was the talk of the town, in the pub and how "You'd be mad not to get into it."  The devastating impact has apparently almost totaled that community including those who were never involved, eg small business, retailers, due to the now lack of money in the area.  Bad news indeed.


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## specialed (15 December 2009)

Harleyquin,

I agree with your comments on the power of even  a small number. I do wonder how much quicker the CBA, ASIC and both state and federal government as well as the FPA would have sought to support storm victims had all of the 120000 people you talk about ( 5000 victims times 24 friends and relatives) written letters of protests etc to the relevant agencies. I imagine the CBA in particular might have acted a little quicker if 100000 people all turn up tomorrow to close their accounts in protest.  

Unfortunately when it comes to actually doing something, support often turns to apathy. It not that people don’t care, its just that actually doing something takes too much effort for some.  Particularly when your talking about support for  a group of people who were trying to fund their own retirement. We've all read the uninformed views of some, even in this forum who believe storm investors were just greedy risk takers looking for a quick win. Of course this is not true, they were mum and dad, and in many case grandma and grandpa investors who paid for advice in order to secure a comfortable retirement for themselves.  Let tall poppy syndrome rule.

However, it is not all still doom and gloom. The CBA is in damage minimisation mode. Next time you speak to those 24 people, ask them to pop into their local CBA and express their disgust. 

Something tells me in the end this is probably all we can hope for. Call me a sceptic, but given ASIC's recent troubles does anyone believe they are actually going to be willing to go after anyone who is in a position to fight back.


----------



## Judd (15 December 2009)

specialed said:


> ....Of course this is not true, they were mum and dad, and in many case grandma and grandpa investors who paid for advice in order to secure a comfortable retirement for themselves.....




Of course it is not true but what is true is believing that simply paying for advice abrogated their responsibility in all matters.  It didn't and it doesn't.  The funds were not entrusted to Storm in any way, shape or form and there was the opportunity to direct and take the necessary action to ensure success.  Unfortunately, quite a number rolled over when challenged by the cad's who ripped off the 7% up front fee.


----------



## specialed (15 December 2009)

Judd said:


> Of course it is not true but what is true is believing that simply paying for advice abrogated their responsibility in all matters.  It didn't and it doesn't.  The funds were not entrusted to Storm in any way, shape or form and there was the opportunity to direct and take the necessary action to ensure success.  Unfortunately, quite a number rolled over when challenged by the cad's who ripped off the 7% up front fee.




I think one thing that the senate inquiry HAS shown is that the relationship between storm and the cba (perceived or otherwise) severely hindered most investors opportunity "to direct and take the necessary action". 

The failure to be contacted by either party in a timely manner, and the admission that the information (portfolio values) coming from cba was at times inaccurate put investors in a very precarious position. Many believe they HAD taken direct action by previously  organising for a margin call to be made at a designated time and value. I believe for many this was at 80% lvr. I dont know how many had instructed storm or cba to wait and sell up at 137% LVR.....One thing the GFC has shown us is that many institutions were not equiped, and did not have the resources or capacity to monitor or react to the sharp downturn in a timely manner. 

I dont think many feel they had abrogated their responsibility by paying for advice, but infact many feel that during the crucial moments they had little control over what was happening.  It will be interesting to see where ASIC feel responsibility lay or where they are willing to publicly state it lies. Many insitutions will be fighting very hard to maintain their public image....


----------



## adrian1 (15 December 2009)

Should I sell my BOQ shares before the CBA/ S and G deal is announced?


----------



## Judd (15 December 2009)

adrian1 said:


> Should I sell my BOQ shares before the CBA/ S and G deal is announced?




Make you own decision.  Then you will not be in a position of trying to blame everyone else under the sun should your decision be the wrong one or even the correct one.

specialed, read the Hansard transcript of 4 September.  Read it very, very carefully and then:


take note of how many dealer groups, including Storm, actioned margin calls during the period in question;

ask yourself, how could action be taken to settle a margin call if the data supplied by CBA/CGI was inaccurate to any relevant degree;

why did Storm action margin calls by way of redemption to the extent of $575M in October alone if it was based on inaccurate data; and

be thankful that EC's son emailed the CBA on 15 October that Storm's systems were so good, it knew its clients' positions as accurately as any fund manager. (Obviously, it was this accurate data which enabled the necessary action on margin calls - which were never made apparently.)


----------



## specialed (15 December 2009)

I have read all the transcripts, Hansards and submissions....and have also watched many of the inquiries live....Unfortunately I don’t have the time to troll back through all of them to locate precisely where it is, however I believe it was during the Sydney hearing that the CBA acknowledged that they could not guarantee that all of their data was accurate all of the time. 

Obviously margin calls can still be actioned irrespective of the data with which it is based. The investor just takes for granted that the “call “ is accurate and makes a decision on the basis of that information. Just because other dealer groups acted on margin calls does not mean they acted on accurate data. What reason do the other dealer groups have to bother checking the accuracy of information they receive. It has become clear that Storm, like most other FP’s are merely agents for others receiving generous commissions for their “impartial advice”. 

In fact if I was an investor with another dealer group I would now be asking my advisor to go back over all the information to ensure that I was not also the recipient of bogus information. What are the implications for a banking institution if they admit that their systems and the information it produces ,which some 7000 dealer groups acted on is inaccurate and that the product they have sold is in fact not capable of doing what it was sold as being able to do?

I’m sure it was not only Storm investors for whom the CBA is unable to guarantee the accuracy of its information. However, it is only those investors who have challenged it so far….

Regarding the redemptions, It is also clear that any decisions made by storm in terms of redemptions were not aimed at helping clients but rather self preservation. 

And although the only reason the inaccurate data has even come to light albeit after the fact, is because Manny and co are searching for anything to save themselves, this does mitigate others from their responsibility to ensure their data is accurate and communicated in a timely manner.


----------



## Judd (15 December 2009)

The date of the transcript was provided.  Your arguments are threadbare in assuming that if one piece of data from a particular source is inaccurate then all data from that source is inaccurate.  Degree of relevance applies.

Anyway, FYI, it's not my problem as I'm not in the position a number of Storm clients got themselves into, with the assistance of the conniving and cunning white shoe brigade dressed up as financial advisers.

Nevertheless, I can only wish ex-Storm clients all the best and hope the resolution process goes well, the CBA was not totally blameless in this fiasco as it has admitted.


----------



## Julia (15 December 2009)

specialed said:


> I’m sure it was not only Storm investors for whom the CBA is unable to guarantee the accuracy of its information. However, it is only those investors who have challenged it so far….



That's a very disingenuous statement.   How can you be so sure of this?
If it were the case that many other investors via many other dealer groups were similarly affected, why on earth would they not have hung on to the coat tails of the Storm enquiry and said so?   As far as we know, no one has.  The meltdown disaster seems to have been confined to Storm.
Thus, it seems pretty unreasonable to attribute the entire problem to the CBA.


----------



## specialed (16 December 2009)

Julia said:


> That's a very disingenuous statement.   How can you be so sure of this?
> If it were the case that many other investors via many other dealer groups were similarly affected, why on earth would they not have hung on to the coat tails of the Storm enquiry and said so?   As far as we know, no one has.  The meltdown disaster seems to have been confined to Storm.
> Thus, it seems pretty unreasonable to attribute the entire problem to the CBA.




Sorry for the misunderstanding Julia. Certainly don’t want to imply this is all the result of the CBA. It is very clear how much Storm is responsible for this whole mess. What I am asking is.... 

If some of the data issued to Storm by the CBA has been unreliable or inaccurate, and the CBA has confirmed this, Then surely if other dealers were the recipients of information obtained form the same systems then it stands to reason that they too may have received questionable data. However, how many dealer groups are willing, or have the resources to go after the CBA for clarification.  Also given they have "made their dollar" through commissions what incentive is there to question the standard of the product they have sold.

This disaster has shown that many financial planners reliance on commissions has meant that many have little, if any motivation to place their clients interests above theirs or that of the institutions whose products they are selling. Further, if they question an institutions processes or systems they may quickly find themselves locked out of that system, with no access to a product range. This again reduces their ability to source commissions. 

The CBA were only willing to concede they cant ensure the accuracy of data when facing a senate inquiry. Rest assured the CBA are never going to admit any specifics regarding fault any more then they already have. Confidentiality agreements, as part of the resolution process will act to further bury any damaging information. As has been stated by many, confidentiality agreements are not put in place to protect the victim.

Judd, I am simply posing the questions...As you would be aware these systems are based on many complex algorithms. A small glitch or fault with just algorithm can send the system into disarray and the result is endless troubles. It is the same scenario with inaccurate phone bills, electricity bills, interest calculations by banks. All three of which are regularly found to have problems. In particular banks are regularly found to have both over charged and undercharged thousands of dollars on loans. This is usually because of human error in programming the systems. The systems use the same algorithms to send out tens or hundreds of thousands of data streams. Most clints will never know, because we have a belief that they will get it right. Its only when the odd person does a thorough check or when the mistake is very substantial that it becomes apparent. And only then does the extent of the problem show itself as more people begin checking statements etc. Except of course if the mistake is an overpayment by the bank, who are very quick to come chasing the over payment


If the other dealer groups are using information from the same system, then the same algorithms may have sent corrupted data to many more than just storm.


----------



## Judd (16 December 2009)

specialed said:


> Sorry for the misunderstanding Julia. Certainly don’t want to imply this is all the result of the CBA. It is very clear how much Storm is responsible for this whole mess. What I am asking is....
> 
> If some of the data issued to Storm by the CBA has been unreliable or inaccurate, and the CBA has confirmed this, Then surely if other dealers were the recipients of information obtained form the same systems then it stands to reason that they too may have received questionable data. However, how many dealer groups are willing, or have the resources to go after the CBA for clarification.  Also given they have "made their dollar" through commissions what incentive is there to question the standard of the product they have sold.
> 
> ...




Again you continue to place a perverse spin on matters which were not said.  I am no apologist for the CBA. Where it or its staff have stuffed up then that error must be rectified and those affected compensated to the  extent as agreed.  What the CBA did say in its evidence of 4 September 2009 before the Committee was (Page 72 of transcript):

"That is another question that we have looked at.  Again, we are unable to verify, given the nature of the information, that every unit price for every customer over the period was up to date.  [Yep, usual situation with data warehouses. Judd]  We know that substantially all of them were.  As part of the remediation process that we [the CBA] are talking about, one of the critical things her is if, in relation to any given client on any given day, information was wrong and that led or contributed to a client's loss.  That is something that we would expect to come out in the remediation process.  So we do know that substantially all the information was provided and it was substantially correct, at a minimum.  But that does not mean that in isolated cases there may have been problems."

That is not at all conceding that the data was incorrect at any stage as implied by some.  The CBA has admitted nothing in that regard.  It is simply stating that, if proven, the data on any given day for any given client was wrong and that caused a loss, we will correct the wrong.

You allege "If some of the data issued to Storm by the CBA has been unreliable or inaccurate, and the CBA has confirmed this...".   The CBA has confirmed nothing of the sort.

Your deliberate twisting of statements given in evidence to arrive at a erroneous blanket proposition is abhorrent.  None the more and none the less.


----------



## specialed (16 December 2009)

Judd, I accept your analysis and apologise unreservedly  for the "spin" you believe I have placed in my analysis. I guess unless ASIC come up with something then we well never know the extent to which CBA customers were compensated through the remediation process due to incorrect info, and therefore the extent of the incorrect data because of the confidentially clauses  imbedded in the process. Cant say I hold much faith in ASIC however.

 Out of interest does the following statement from your quote worry you ? 

"Again, we are unable to verify, given the nature of the information, that every unit price for every customer over the period was up to date." 

During the market downturn were you watching your portfolio ? Do you have funds under management ? What would your reaction be if while watching your portfolio or managed fund and attempting to make informed decisions during a rapid market decline you were informed that "given the nature of the information we are unable to verify that your unit prices are up to date".  There might be an interesting exercise in contacting Commsec and asking them if the can guarantee (in writing) that at all times their published unit prices are accurate, in particular for managed funds. 

Regardless of the Storm situation do you find this concerning ? For "small " funds lets say sub $500 000  if sold with unit prices slightly incorrect the amount may be negligible, but what about portfolios over $ 5m.


----------



## specialed (16 December 2009)

My understanding is that Manny's suits against the CBA are on the basis of the alleged inaccurate information. What are the implications for these cases....not that I believe they will ever get to court


----------



## Julia (16 December 2009)

specialed said:


> If some of the data issued to Storm by the CBA has been unreliable or inaccurate, and the CBA has confirmed this, Then surely if other dealers were the recipients of information obtained form the same systems then it stands to reason that they too may have received questionable data. However, how many dealer groups are willing, or have the resources to go after the CBA for clarification.  Also given they have "made their dollar" through commissions what incentive is there to question the standard of the product they have sold.



What incentive is there?  Perhaps just basic integrity and care for the welfare of their clients.  

Re dealer groups having the resources "to go after the CBA", I don't quite understand what you're meaning here.  e.g. if they were to have sought clarification wouldn't that have occurred at the time?  But your expression "go after the CBA" implies an 'after the event' claim such as is now under way via Slater and Gordon.
If the latter, then why would they not simply have put in their submission alleging incompetence of the CBA for the enquiry?

Perhaps there are dealer groups whose complaints have not been aired.
The entire focus has been on Storm.  Given the extent of the media reporting, I'd have thought if complaints from other organisations have been made we would have heard something about it.


----------



## specialed (17 December 2009)

Julia said:


> What incentive is there?  Perhaps just basic integrity and care for the welfare of their clients.
> 
> Re dealer groups having the resources "to go after the CBA", I don't quite understand what you're meaning here.  e.g. if they were to have sought clarification wouldn't that have occurred at the time?  But your expression "go after the CBA" implies an 'after the event' claim such as is now under way via Slater and Gordon.
> If the latter, then why would they not simply have put in their submission alleging incompetence of the CBA for the enquiry?
> ...





Will clarify Juia,

1)	My understanding is that the push for a legislative ban on commissions is that there is a belief that some, not all, but some FPs do not act with integrity or with the best issues of their clients. This is because there is a  conflict between selling the better or more ideal product to a client and selling the product whereby the FP receives the higher commission. Surely you do not believe that Storm are the only FP operating without integrity

2)	Storm have only gone after CBA, BOQ etc because they have been decimated, are trying to save themselves etc. Ie. They have little to loose. Are other FP’s in the same position ?. Would they risk losing everything in a court battle for the sake of their clients, who as I have already highlighted, they may have little real care for. Further, would they risk losing access to a range of products that bring in their commissions. What impact would it have on a FP if they could not access to sell funds managed by CBA, Macquarie etc.  I have read many incite full comments from you on this thread and therefore am confident you  are not so naive to believe that all FP operate with integrity or with the best interests of their clients. Do you have the same belief with insulation providers ? There are many reputable ones, but there are a lot that aint !

I am not trying to be a conspiracy theorist here, but am simply stating that if the issues of incorrect data are proven true, but resolved in the resolution process then they are bound by confidentiality. Therefore, clients of other dealer groups will have little reason to question their FP’s about the information used by the other 7000 groups the CBA referred to. I’m sure this would also suit many FP’s who do not wish or do not have the resources to go begin checking through the specifics when decisions were made last year. 

As stated I understand that Manny and the 60 are going after CBA on the basis of this incorrect data. If they were to win, what would be the implication for CBA. Would other clients of other FP then want there data trolled through.

3)	 Slater and Gordan are going after CBA, BOQ etc because the believe , they can earn lots of money, it brings publicity to them, and they believe they can win.


----------



## Judd (18 December 2009)

Julia said:


> What incentive is there?  Perhaps just basic integrity and care for the welfare of their clients.
> 
> Re dealer groups having the resources "to go after the CBA", I don't quite understand what you're meaning here.  e.g. if they were to have sought clarification wouldn't that have occurred at the time?  But your expression "go after the CBA" implies an 'after the event' claim such as is now under way via Slater and Gordon.
> If the latter, then why would they not simply have put in their submission alleging incompetence of the CBA for the enquiry?
> ...




Julia,

I have read and read and read the transcripts of the inquiry.  You know what?  Only EC has said that the data was wrong but provided absolutely no evidence as to which aspect or aspects of the data was incorrect.

From the opening remarks of evidence provided on 4 September 2009:

"We also now know that CBA data feeds to Storm, and hence its website on which the customers and Storm were supposed to be able to check their positions, were deeply and hopelessly flawed *[How do we know this?  What is the basis on which you make this statement?]*  Let me repeat that;  CBA data feeds to Storm, and hence its website on which the customers and Storm were supposed to be able to check their positions, were deeply and hopelessly flawed. *[Always repeat and emphasize a position when you may not be in possession of definite facts as this will give the impression of absolute knowledge.]*  The errors were not simply that they were a few days late because a few funds were suspended for a few days or because the markets were in turmoil:  the data, we now know, was scrambled. *[To what degree, ie 100%>0%, was the data scrambled and what elements of it were incorrect?]*  This is what I have been saying all along – that is, that the problem was not excessive debt or excessive gearing *[Oh yes it bloody was: $10m portfolio supported by $8M of debt, when the market goes down 50%, you are left with no equity and a $3m debt]*; the problem was that the CBA chose to destroy the asset that services that debt. *[You mean that it called in the corporate debt because you had no liquidity or solvency at a corporate level - as happens with a multitude of business, Kleenmaid springs to mind]*  I might add that the disruption of Storm by the CBA has affected other banks, in that their loans also cannot be serviced. *[Only due to the fact that the market tanked, your clients were so geared to buggery the even a 15% movement in market values would have had them up rhubarb creek in a barbed-wire canoe spearing tadpoles with a crowbar.]*

Not one member of the Committee challenged the assertion that the data was corrupt.  They just accepted it as a given.  And now people run with the hares, ie "'It's dirty data, it's dirty data!"

So what aspects were wrong?  The client ID and units held, the loan outstanding, the buy/sell spread, the unit pricing?  Absolutely zilch evidence provided but there are elements which wish to make a hue and cry about it - and use convoluted confabulated obfuscation to establish arguments supported by a total absence of evidence.

Such intellectual dishonesty by the EC apologists makes you want to weep or at least kick the cat if you had one to kick.


----------



## Julia (18 December 2009)

Judd, thank you.  As I thought.
What in the name of hell were the enquiry members doing by not challenging EC's assertion and demanding proof of what he said!

Perhaps it's possible that the ASIC investigation will eventually hold EC to account over this?

I'm still knocked over by the breathtakingly revolutionary suggestion from the enquiry that 'financial advisers should act in the best interests of their clients'!
That this should have to be spelled out and legislated is beyond belief imo.

I don't know what the enquiry by Ripoll & Co cost, but it must have been plenty.  And who has benefited from it?  Are the Storm clients any wiser or do they feel at all vindicated?  I can't see why they would.

Truly, with each day that passes, I just despair more and more of the clowns that are running this country.   And the fact that they do not have a viable opposition is even more depressing.


----------



## DocK (19 December 2009)

Lots of money wasted on an enquiry to hear submissions stating the bleeding obvious, the completely untrue, the truth, and many versions of it.  But the pollies were able to show how concerned they are and what jolly good jobs they're doing - but they've actually failed to recommend much of anything concrete.  I'm sure they're well-intentioned, just as I'm sure ASIC don't set out to be largely ineffective, but I reckon most ex-stormers would have preferred the money spent on all these enquiries and hearings had simply been divvied up between them

Lots of lawyers representing lots of disgruntled investors, so-called planners, CEOs (or was he?, poor Manny couldn't remember himself), bankers etc.  The lawyers seem to currently be attacking each other as well as whichever parties they're gunning for - no surprises there, the lawyers will be the winners in the end no matter who is possibly found to "blame".

Lots of burnt investors, some more than others, some wiser and some not.  Some compensated, and some not (or not yet).  Some will recover and some won't.  Some will make the same mistakes, and some will be empowered.  Most will have trouble with "trusting" anyone again - and perhaps this is as it should be.

A couple of ex-directors who will probably come out of this much better off than they should - but such is the way of the world.  Justice is often hard to come by.  I just hope their memories recover in time......  I like to believe in karma.

The only things I absolutely believe to be true are that it will all happen again in one form or another, and that no amount of legislation will ever prevent it.  
The more things change, the more they stay the same.  

Yours in cynicism,

DocK


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## Gerkin (23 December 2009)

I was expecting that the **** would fall out of this property market especialy in Townsville. From my research it hasnt, can anyone confirm this. From what i understand Cairns property is in alt worse shape than Townsville.


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## Harleyquin (24 December 2009)

:xmaswaveMerry Christmas to everyone on the Storm Financial thread.  Whether we agree, disagree or agree to disagree I wish each and every one of you a wonderful safe Christmas and we'll put our boxing gloves on again in 2010 with more of the same.  Hopefully the new year will bring some welcome relief for ex stormies as this year has been a shocker.  :chimney:wreath


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## sailteam30 (26 December 2009)

Believe it or not - some good has come out of this disaster for me - I worked for many years on wages and "retired" (thanks to storm I resigned from my secure professional occupation) to live on my income from shares and not to be a burden on the taxpayer for the meagre age pension.

The good news is that I was forced to go back to work and open my own business which has boomed during the GFC and post GFC (we are out of it now arent we?), not only that it has brought our family much closer together.

I am hoping for some more good news from the Resolution Process but it looks more like the lawyers and hangers on are feasting at the moment.


----------



## DocK (26 December 2009)

sailteam30 said:


> Believe it or not - some good has come out of this disaster for me - I worked for many years on wages and "retired" (thanks to storm I resigned from my secure professional occupation) to live on my income from shares and not to be a burden on the taxpayer for the meagre age pension.
> 
> The good news is that I was forced to go back to work and open my own business which has boomed during the GFC and post GFC (we are out of it now arent we?), not only that it has brought our family much closer together.
> 
> I am hoping for some more good news from the Resolution Process but it looks more like the lawyers and hangers on are feasting at the moment.




Good to hear some positive fallout, given all the negative.  What type of business Sailteam30?  And yes, the lawyers certainly seem to be doing well out of the resolution process - no surprises there though


----------



## Julia (26 December 2009)

sailteam30 said:


> Believe it or not - some good has come out of this disaster for me - I worked for many years on wages and "retired" (thanks to storm I resigned from my secure professional occupation) to live on my income from shares and not to be a burden on the taxpayer for the meagre age pension.
> 
> The good news is that I was forced to go back to work and open my own business which has boomed during the GFC and post GFC (we are out of it now arent we?), not only that it has brought our family much closer together.
> 
> I am hoping for some more good news from the Resolution Process but it looks more like the lawyers and hangers on are feasting at the moment.



Sailteam, it would be my guess that the success of your business is largely due to your constructive and positive attitude.  Instead of succumbing to depression and despair, you've taken a pro-active approach to getting your life back on track.   It's a huge credit to you and your success is very much deserved.

So glad to know that it has worked out so well for you.  Clearly, you really deserve that it should be so.  All the best for 2010 and beyond.


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## Solly (27 December 2009)

*"Storm Financial: Boulevard of broken dreams"*

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2009/12/26/103455_news.html


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## Harleyquin (27 December 2009)

Sailteam30 I agree with DoK what type of business have you started.  Congratulations on such a positive attitude when so many have gone downhill.  I admire your fortitude and positive attitude.  If you have any ideas on how we can all recover from this disaster I'd be interested in hearing them, not just for ourselves but for the many many people who are really suffering after this disaster.  Good luck and congratulations on your success.


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## Harleyquin (27 December 2009)

Solly welcome back and thank you for Tony Raggatt's story in the Townsville Bulliten, he really has a good 'handle' on what has happened with Storm Financial.  I'm very impressed by his comments.  Hope the New Year is shaping up to be far better than the last one for all.


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## Garpal Gumnut (28 December 2009)

May I wish all Stormers a good 2010 and a secure future.

gg


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## sailteam30 (29 December 2009)

DocK & Julia - thank you for those kind words, however, it was a matter of "sink or swim", I even considered joining my son in Hanoi (Vietnam) as he runs 3 ESL schools there, but I also owe much to the "strength" of my wife who assisted me to set up my business which is in a unique, niche that offers "marine training/education" as this was my professional field for 31 years.

Some observations I have made - 

1. I am not a greedy millionaire, I was seeking a secure long term strategy (other than the age pension) and wished to put my superannuation (which has gone now) to work. I know very little about investing, but I do know when I have a toothache I go to the professional (a registered dentist) and it is fixed - when my kids required an education I go to the professional (a registered teacher) and it is fixed - so when I needed advice on investing I went to a the professional (a registered financial planner - who was qualified and had been recommended by several friends and professional colleagues) which was a disaster as he had a smooth confident manner and knew his facts and figures but told lies.

2. I am disappointed that this "financial planner" is still in business (according to talk on this thread) as I feel if he was in any other profession he would be barred from that professional body.

3. I no longer trust anyone, my view of society has changed - I will plan my financial future myself, it may not be as effiecient as someone who "knows all" about finances but at least I will be in control.


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## DocK (29 December 2009)

sailteam30 said:


> DocK & Julia - thank you for those kind words, however, it was a matter of "sink or swim", I even considered joining my son in Hanoi (Vietnam) as he runs 3 ESL schools there, but I also owe much to the "strength" of my wife who assisted me to set up my business which is in a unique, niche that offers "marine training/education" as this was my professional field for 31 years.
> 
> Some observations I have made -
> 
> ...




Bloody well done and cheers to you Sailteam30!  My husband and I were already running a business, but other than that we could practically be singing from the same choirbook.  Your last point is the most telling, I feel, and I'd say the majority of ex-storm clients feel this way.  I've adopted a "what doesn't kill you makes you stronger" attitude, but do sometimes regret that I've become a cynical, suspicious type who now tends to look for the worst in people.  This makes me much more likely to survive the rat-race I suppose, but I don't think it makes a nicer person.  Still, to put it in marine terms for you - better to be coated in suspicion and afloat, than wide-open and at the bottom of the deep blue sea 

Becoming master of your own finances and investments is a mixed experience, I've found.  I tend to be a control freak by nature, so the control aspect both suits me and scares me.  On the one hand I trust nobody as much as I trust myself, but then again I don't trust that I yet am qualified to make the right decisions, so spend quite a bit of time agonising over every decision I make, and a fair few restless nights.  Self-education is the key, and baby steps...  (And, of course, the thing storm lacked - an exit strategy!)

Best of luck to you and your family,

DocK

ps, There is a lovely broadwater where I live, and a lot of under-trained idiots in their lovely boats making it more and more dangerous every year!  Having got my boat licence in one day in what I would call a ridiculously easy and almost impossible to fail test, I shudder to think how many of them set out with no real idea of what they're doing.  (I was simply the reserve in case my spouse got pulled overboard by that huuuuge fish he dreamt of catching).  I do hope you're "training/educating" in my area - as it's sorely needed.


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## Ironhalo (2 January 2010)

Merry Christmas and a Happy New Year people!

I have been offline for a little while traveling, but have had a good read of what has transpired to date. 

This should raise a smile, my mother went shopping in Redcliffe the other day and who should she bump into at Coles but her old Storm 'advisor', Andrew O'Brien. Despite not being able to look her in the eye, she was actually regaled with his story of woe, 'we nearly lost the house'....'we lost big time', despite the fact that his poor advice, inaction, and inability to answer his calls nearly cost her her own house, not to mention the fact that she will now be working for the next decade to reestablish herself. Luckily, she was one of the test cases with CBA and managed to salvage a rather decent deal. This is the same guy who had the audacity to then ring another relative of mine to try and get trailing commissions on loan interest refunds after it all fell apart. 

She told me that despite forcing back the urge to spit in his face, she wished him a prosperous and Happy 2010. 

She has better self control then I would!


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## Garpal Gumnut (2 January 2010)

Ironhalo said:


> Merry Christmas and a Happy New Year people!
> 
> I have been offline for a little while traveling, but have had a good read of what has transpired to date.
> 
> ...




And moneyspidercentral sicag.info are still advising punters to seek advice from advisers who charge according to the Storm model.

SICAG should be having some elections soon. Lets hope they can get the old guard out and a renewal of their webpage advice and disclaimers.

gg


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## Smiley (13 January 2010)

SICAG has neer had elections and doubt they will start now - it really was a couple people getting together to see what they could do to help the stormified.

This bit from the 12 Jan Business Spectator is relevant - wonder if the SF directors will be next:

"The corporate watchdog has charged three former directors of collapsed broking firm Opes Prime Stockbroking Ltd (OPSL) with breaching their duties.   The Australian Securities and Investments Commission (ASIC) said former directors Julian Smith and Anthony Blumberg had been arrested and granted conditional bail to appear in the Melbourne Magistrates Court on January 29.    A third director, Lirim (Laurie) Emini, has been charged on summons to appear in the Melbourne Magistrates Court on the same day.     
In a statement, ASIC said the directors allegedly signed financial documentation with ANZ Bank to obtain a term loan for OPSL and Opes Prime Group Ltd (OPGL) shortly before the firm collapsed, with its assets pledged as security to meet the obligations of a third company, Leveraged Capital Pty Ltd.    The watchdog has alleged that in doing so, the directors were intentionally dishonest and failed to exercise their powers and discharge their duties in good faith, in the best interests of OPGL and OPSL.    ASIC also alleges that Mr Smith, Mr Blumberg and Mr Emini dishonestly used their positions with the intention of directly or indirectly gaining an advantage for themselves or for someone else.    Each director has been charged with two offences of breaching their duties as directors of OPSL and two offences of breaching duties as directors of Opes Prime Group Limited (OPGL).    The offences each carry a maximum penalty of five years' imprisonment. On March 27 2008, OPSL was placed in administration, with receivers and managers subsequently appointed.    At the time of its collapse, the stockbroking firm had more than 650 active client accounts, with creditors owed about $630 million.    Under their bail conditions, Mr Smith and Mr Blumberg must surrender any passports, are prevented from applying for further passports and must not attend any point of international departure.   The Commonwealth Director of Public Prosecutions is prosecuting the matter."


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## Garpal Gumnut (13 January 2010)

Smiley said:


> SICAG has neer had elections and doubt they will start now - it really was a couple people getting together to see what they could do to help the stormified.




re SICAG

I thought it was an incorporated entity speaking for all Storm victims.

If what you say is true it is quite worrying.

Where will it go to after its remit is achieved, indeed what is its remit?? 

gg


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## Smiley (14 January 2010)

No GG, SICAG was never supposed to speak for me and others and even if they purported to do so - e.g. re statements about fees, etc it was not so.  Many of us just viewed it as a support organisation, though it seemed to grow into something 'more' than that last year.


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## specialed (15 January 2010)

Smiley said:


> SICAG has neer had elections and doubt they will start now - it really was a couple people getting together to see what they could do to help the stormified.
> 
> .






Garpal Gumnut said:


> re SICAG
> 
> I thought it was an incorporated entity speaking for all Storm victims.
> 
> ...






Smiley said:


> No GG, SICAG was never supposed to speak for me and others and even if they purported to do so - e.g. re statements about fees, etc it was not so.  Many of us just viewed it as a support organisation, though it seemed to grow into something 'more' than that last year.




My understanding is that SICAG did have elections last year at one of the meetings in Redcliffe when the current Chairs etc were elected to the current postions. Therefore, they will again need to have elections etc. 

It has never claimed to speak for, or be acting on behalf of  "all" storm victims, only its members as far as I'm aware. This is not to say however that anything it achieves for its members may not also benefit non members. i.e the resolution process that anyone can participate in, SICAG member or not. 

And yes it did start as a support organisation but as it became evident the large number of victims needing support, it grew rapidly last year. As interest in the situation grew, (involvement of Pollies, Lawyers, media etc) so to has the work done by these "elected" volunteers. One thing I can be sure is that this work, by the volunteers has consisted of longer hours each week than many people would work each month....

Once its members feel it has achieved everything for them that it can, and that they no longer need its support then surely it would wind down its operations to some degree.


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## Garpal Gumnut (15 January 2010)

specialed said:


> My understanding is that SICAG did have elections last year at one of the meetings in Redcliffe when the current Chairs etc were elected to the current postions. Therefore, they will again need to have elections etc.
> 
> It has never claimed to speak for, or be acting on behalf of  "all" storm victims, only its members as far as I'm aware. This is not to say however that anything it achieves for its members may not also benefit non members. i.e the resolution process that anyone can participate in, SICAG member or not.
> 
> ...




Thanks specialed.

That is my understanding of SICAG. They may need elections though if they decide to drop the SICAG 2009 Model re Manny et al.

gg


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## Solly (20 January 2010)

*"Storm clients unlikely to share CBA profits
SICAG calls fall on deaf ears"*

"SICAG has called on the CBA to share part of its forecast $2.9 billion half-year profit with ex-Storm Financial clients."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/8336.htm


----------



## Solly (20 January 2010)

*"Banks resist Storm settlement call"*

"ASIC is lobbying banks involved with collapsed financial adviser Storm Financial to fast-track a settlement for victims by supporting a common compensation scheme."

More in the AFR of January 8 2010 by Duncan Hughes.

http://kiosko.net/au/2010-01-08/np/au_financial_review.html


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## Garpal Gumnut (21 January 2010)

Solly said:


> *"Storm clients unlikely to share CBA profits
> SICAG calls fall on deaf ears"*
> 
> "SICAG has called on the CBA to share part of its forecast $2.9 billion half-year profit with ex-Storm Financial clients."
> ...




There is certainly sufficient evidence now that CBA have a moral if not a yet proven legal responsibility to share their largesse with the Storm victims. 

SICAG are to be commended for their continued hounding of the CBA through the media. 

gg


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## Solly (22 January 2010)

Solly said:


> *"Storm Financial: Boulevard of broken dreams"*
> 
> More by Tony Raggatt in the Townsville Bulletin here;
> 
> http://www.townsvillebulletin.com.au/article/2009/12/26/103455_news.html




Read some interesting comments at the end of this news article 
by Sean McArdle and Ruth Fontaine.


----------



## Solly (26 January 2010)

Garpal Gumnut said:


> There is certainly sufficient evidence now that CBA have a moral if not a yet proven legal responsibility to share their largesse with the Storm victims.
> 
> SICAG are to be commended for their continued hounding of the CBA through the media.
> 
> gg




gg, I spent some time with a Stormer yesterday. He is really concerned about the perceived lack progress with the resolution scheme. He still displays a rather negative view of the CBA especially after the published reports of their $2.9 billion six monthly profit. He said to me he feels like he's road kill in the scheme of things. That's understandable. 

He shared with me his net financial state and he is in a truly challenging position for a person of his age and his wife is not in good health. The dream that they were presented and agreed to buy, which has now turned into this saga has very serious human consequences. I wonder what direction things will take this year. 

If ASIC find any breaches and follow through with prosecutions, what will be the benefit to the Stormers ? And this was one of his concerns. 
Will he still be left in a financial wasteland? 

He said to me that he feels like he's "being punished for a crime he didn't commit". This phase sounded a bit familiar, it's only now I remember where I have heard it before. 

If only in reality there was *A* fiscal fiduciary duty enforcement equivalent of this *Team*.

http://www.youtube.com/watch?v=E0ZmUKBgwqg

Maybe a touch of B.A. Baracus would get things moving......"pity da fool".


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## Solly (27 January 2010)

And now on Wikipedia as part of the Queensland Portal;

http://en.wikipedia.org/wiki/Storm_Financial

I'm sure there will be some interesting contributions and subsequent edits.


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## bunyip (27 January 2010)

Solly said:


> And now on Wikipedia as part of the Queensland Portal;
> 
> http://en.wikipedia.org/wiki/Storm_Financial
> 
> I'm sure there will be some interesting contributions and subsequent edits.




_*Inquiry**
An inquiry into the collapse produced a joint parliamentary committee report in late November 2009. The report placed the blame for the collapse on the financial services industry and the regulators. Storm Investors Consumer Action Group, which represent victims of the company's collapse, blamed poor banking practices for the collapse and were disappointed that the inquiry did not bring bankers to task for their mismanagement*._

Above is an extract from the link provided by the intrepid Solly in relation to the collapse of Storm Financial.

It's interesting to note that the parliamentary inquiry blames the collapse on the financial services industry and the regulators, while SICAG blames poor banking practices, and is disappointed that the inquiry 'didn't bring bankers to task for their mismanagement'.

Meanwhile the real culprit, Cassamatis, doesn't get a mention!

Just to refresh the memory of both SICAG and the parliamentary inquiry.....

Cassamatis is the incompetent who advised his clients to gear to dangerously high levels in the always risky stockmarket.
He's the  incompetent who allowed his heavily geared clients to sit through a full 12 months of one of the worst market crashes in history. 
He's the incompetent who failed to give balanced investment advice to his clients to spread their risk across a number of investment areas.
He's the incompetent who had no contingency plan in place, preferring to sit on his hands and do nothing while his clients wealth vaporised.
He's the incompetent who, as the market kept plunging, advised new clients to invest heavily, and existing clients to borrow more.
He's the incompetent who tried to be a bull in a bear market.
He's the incompetent who failed to learn the lessons taught by the 1987 crash - that markets can and do collapse every so often, and you'd better have some plans in place to deal with it if you're going to be a stockmarket investor.
He's the incompetent who now hides behind lies and excuses by claiming that the 2008 crash was unprecedented and nobody saw it coming.

And yet when blame is being dished out for the collapse of Storm and the wipeout of their clients, Cassamatis doesn't get a mention!
Does that make sense to any of you?.....it makes no sense to me!


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## DocK (27 January 2010)

Ah Bunyip, consider the source of the information that you've quoted.  I doubt many would say the Wikipedia is the most accurate source of info on the 'net.  As my kids are taught at school, when using the internet for research it pays to verify any info found from a "reliable" source.  I would suggest that it is not possible to sum up the entire Storm Fiasco in as little words as have been used in the linked Wiki source - the acknowledged source of some of the info used in the article was one Sunshine Coast reporter's views, it would seem.  

Please - edit away.  I gather that most info on Wikipedia is able to be edited - and I've seen "celebrities" state that they've corrected info on themselves on Wiki only to have it edited to something false by someone else.  Who is to say that a certain ex-CEO hasn't been contributing to Wikipedia himself?


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## Harleyquin (27 January 2010)

Yes Bunyip that's right Cassimatis was the 'incompetent' responsible for all of the issues that you've raised.  He didn't become an incompetent overnight he's always been incompetent and many are only finding out after the event just how incompetent he was.

My question to you is 'Obviously the largest bank in Australia with it's top financial people would also have realised that EC and Storm's advice was highly questionable SO why did they lend them so much money for the company and all of their clients when it's quite obvious to them that storm and it's chief director was a complete incompetent?'

I asked this question once before and was told 'that's what banks do they lend money', well obviously they do irrespective of how incompetent the 'asker' is and irrespective of how fraudulent the lending practices are.

The banks backed this incompetent and his incompetent company with as much money as they could give them.  We now know that for a fact.  Read the 'Banking Code of Practice' - there's not too many 'rules' in there that they havent broken.  So why do the banking fraternity bother with a banking code of practice if they intend to do exactly as they like.


----------



## Solly (28 January 2010)

*"Claim of no mistakes in Storm case"*

"ASIC denies it missed the "smoking gun" before the demise of Storm Financial, a Queensland-based financial adviser that collapsed in January last year, with investors losing more than an estimated $3 billion."

Read more in The Australian Financial Review of Jan 27 2010.


----------



## Solly (28 January 2010)

*"Ex-Storm adviser hits back at FPA allegations
Considers court action"*

"Former Storm Financial adviser considers legal action against the FPA over breach allegations."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8388.htm


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## Solly (28 January 2010)

As reported in Business Day on brisbanetimes.com.au.

"Storm Financial's website, stormfinancial.com.au, has been taken over by a ''finance and home loan'' provider based in Malaysia but with a British home web address."

Take a look;

http://www.stormfinancial.com.au/


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## bunyip (28 January 2010)

Harleyquin said:


> Yes Bunyip that's right Cassimatis was the 'incompetent' responsible for all of the issues that you've raised.  He didn't become an incompetent overnight he's always been incompetent and many are only finding out after the event just how incompetent he was.
> 
> My question to you is 'Obviously the largest bank in Australia with it's top financial people would also have realised that EC and Storm's advice was highly questionable SO why did they lend them so much money for the company and all of their clients when it's quite obvious to them that storm and it's chief director was a complete incompetent?'
> 
> ...





Harleyquin

Have you put your questions to the banks who financed Storm? They'd be better qualified than I would to give you an answer.

But knowing banks as I do, I can understand their thinking in lending to Storm Financial clients. (Note that I didn't say I agree with their thinking - only that I understand it).
The bull market from early 2003 to late 2007 saw Cassamatis making money hand over fist for himself, his clients, and for the banks who financed Storm's investments. He was regarded by many people, banks included, as a very smart and capable investment advisor/manager, and he was getting the results that appeared to prove it.
No surprise then that the banks were so keen to do business with someone they saw as a competent man with a rapidly expanding client base.

Banks are in the business of lending money - they're not in the business of performing detailed analysis of the investments they finance. And they're not in the business of checking the competence of the people who are borrowing the money, nor of the people who are acting on behalf of those who are doing the borrowing.
They don't need to be...if the bank has sufficient security, if the borrower or his representative can produce figures to show that the loan commitments can be met, and if the bank can see a relatively safe dollar in it for themselves, they'll lend.
That's how investment funding works and probably always will.


----------



## Harleyquin (29 January 2010)

Hi Bunyip I believe that neither we nor storm could produce the figures to show our loan commitments could be met and yet the banks still lent the money as they've done in most cases and I've seen enough paperwork to prove my point without going into further details.  Very few storm clients could afford the repayments.  Prior to going to storm for advice most storm clients were just looking for financial advice to secure a comfortable retirement, most asking specifically for a safe secure form of investment and not millions but certainly someone to lead them in the right direction as far as investing goes.  

I've spent a considerable amount of time reading all of the comments on this thread and having read all of your comments and those of others like you, you have obviously educated yourselves to the point where 1. you'll never need investment advice 2. you'd probably make a better financial advisor than many who come under this so called professional banner and 3. you seem to have a natural instinct for knowing exactly what to do and when to do it.  To reach this point you obviously have an aptitude for investing in order to gain the skills in this area that you have.  

Like everyone there are a number of things that I'm very good at but understanding investing and investing in the share market in particular and how it all works is something that I am finding extremely challenging, it is certainly not coming easily, and since finding a financial planner is such a hit and miss approach I would very much like to see changes made so that the storm financial scenario can never be repeated to this extent.  Whatever those changes need to be to protect those seeking help with their finances, I leave very much to the experts in this field.


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## Julia (29 January 2010)

Harleyquin said:


> Whatever those changes need to be to protect those seeking help with their finances, I leave very much to the experts in this field.



Experts in this field?  Such as?
Again, you're going to depend on someone else to ensure your safety.
No regulating authority will ever be able to protect you completely.
Learn to manage your own money.

All this has been said before.


----------



## bunyip (29 January 2010)

Harleyquin said:


> Hi Bunyip I believe that neither we nor storm could produce the figures to show our loan commitments could be met and yet the banks still lent the money as they've done in most cases and I've seen enough paperwork to prove my point without going into further details.  Very few storm clients could afford the repayments.  Prior to going to storm for advice most storm clients were just looking for financial advice to secure a comfortable retirement, most asking specifically for a safe secure form of investment and not millions but certainly someone to lead them in the right direction as far as investing goes.
> 
> I've spent a considerable amount of time reading all of the comments on this thread and having read all of your comments and those of others like you, you have obviously educated yourselves to the point where 1. you'll never need investment advice 2. you'd probably make a better financial advisor than many who come under this so called professional banner and 3. you seem to have a natural instinct for knowing exactly what to do and when to do it.  To reach this point you obviously have an aptitude for investing in order to gain the skills in this area that you have.
> 
> Like everyone there are a number of things that I'm very good at but understanding investing and investing in the share market in particular and how it all works is something that I am finding extremely challenging, it is certainly not coming easily, and since finding a financial planner is such a hit and miss approach I would very much like to see changes made so that the storm financial scenario can never be repeated to this extent.  Whatever those changes need to be to protect those seeking help with their finances, I leave very much to the experts in this field.




A few points worth considering......

1.... _*If you couldn't produce figures to show how your loan commitments were going to be met, then you shouldn't have borrowed the money.*_
It's not rocket science. You don't need a degree in finance or years of financial or investment experience. You need only a calculator and a pen and paper. If your income is 100 grand and your commitments will be 125 grand, then obviously you can't afford the loan and you shouldn't take it out - it really is that simple.

2..._*Somebody must have produced figures, false or otherwise, to show how the loans would be serviced, otherwise I doubt if the bank would have loaned the money.*_

3...._*Massive borrowing for stockmarket investment is not 'a safe, secure investment'. *_
OK - you weren't knowledgeable or sophisticated investors but most of you witnessed a major market crash in 1987 - history was bound to be repeated sooner or later.

4..._*You're unlikely to get the legislative changes you're hoping for to protect you against the likes of Storm Financial and the banks. *_
Banks lend money on the basis of the information supplied to them by the prospective borrower or his/her representative. That's not going to change, nor should it.
People like Cassamatis are going to advise clients to invest aggressively during bull markets. That's not going to change either, nor should it. Aggressive investing in bull markets is a good policy. But over-investing to the extent of having no hope of servicing loans is just plain suicidal. Therefore, even if you employ an advisor you can't just blindly follow his advice without doing a bit of thinking for yourself. If he's trying to push you into a bigger loan than you can service, then prudence should dictate that you say no.


Julia is right - relying on others is not the answer. You must learn to manage your own investments.


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## Harleyquin (29 January 2010)

Julia and Bunyip I intend to manage my own affairs from this point onwards and everything you've said in you're replies I am now very much aware of.  Just wish that was the case prior to seeking what we thought was going to be so called professional advice.. and that's right we have been there many times before.

Like you I now realise that we all have no option but to manage our own money, take responsibility for whatever decisions we make in the future and with the help of maybe a trusted accountant to help point us in the right direction.

However I am extremely angry with the whole storm affair and the criminality involved, someone has stripped thousands of us of our life savings simply because we thought these people were trustworthy...and please don't bash me again for saying that...as it's the truth.

Why are some of these people allowed to operate in the financial planning area as professionals when some of them obviously aren't?  Julia I know you're against more legislation but those seeking advice for the first time do need protecting, to find out afterwards that it's such a risk finding a reliable planner is upsetting to say the least...and I unfortunately don't have the answer to this problem, but feel that after this fiasco that there are areas in the industry which will come in for change and hopefully it's going to be for the better.


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## kermit345 (29 January 2010)

I've only just read this page of the thread so sorry if i've repeated anything that others have said. However as i've just been working in the finance industry over the past 12 months (i'm only 23) i've read all about and even helped a client to deal with the storm problem. However the old rule must apply where if you don't understand an investment and its consequences you probably shouldn't be in it.

Yes financial planners must be trustworthy professionals who you can throw your money at and hope that they can provide some growth with it so your better off in the future. However that is in an ideal world where you expect not everyone is out there to make money for themselves and have some self interest. Firstly, storm were charging massive fees for the advice they were giving out, this should of triggered a thought of are you getting what your paying for.

Secondly, they have to produce Statements of Advice, which outline the strategy and investments. If you did not completely read the SoA and understand the products they were putting you into then this is where you need to question the adviser to satisfy your own mind.

Unfortunately the whole finance industry feels the pain of a storm financial incident, as it reduces the faith placed in us as finance professionals. However people should be prepared to ask questions and understand where their money is going and take an active interest, it is of course your future your providing for, not your advisers.

By the way sorry if i've written anything I shouldn't have, only just started posting on here today and still getting a feel for how it all works, hope what i've written offers some form of discussion or interest.


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## bunyip (29 January 2010)

Harleyquin said:


> Julia and Bunyip I intend to manage my own affairs from this point onwards and everything you've said in you're replies I am now very much aware of.  Just wish that was the case prior to seeking what we thought was going to be so called professional advice.. and that's right we have been there many times before.
> 
> Like you I now realise that we all have no option but to manage our own money, take responsibility for whatever decisions we make in the future and with the help of maybe a trusted accountant to help point us in the right direction.




Harleyquin....If I were you I'd be very wary of trusting a 'trusted accountant' to give you investment advice or even point you in the right direction. Many accountants these days are licensed investment advisers as well, but the extent of their 'investment advice' is all too often simply advising you to buy the investment product that pays them the biggest commission.
Many a 'trusted accountant' was a commission salesman for Storm, so naturally they advised their clients to give Storm a call.
Accountants and bankers are finance professionals, but we need to delve a little deeper to see specifically what areas of finance they specialise in. Bankers are professionals in lending. Accountants are professionals in taxation matters. _*Neither are professionals in investment.*_


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## Solly (29 January 2010)

I met with my Stormer mate again this afternoon. He let me know about these podcasts from Slater and Gordon.

He was most concerned about the one about the margin loans.

Looks like the CBA and S&G are taking very different positions.

http://www.slatergordon.com.au/pages/pod_casts.aspx


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## specialed (29 January 2010)

bunyip said:


> Harleyquin
> 
> Have you put your questions to the banks who financed Storm? They'd be better qualified than I would to give you an answer.
> 
> ...




I agree with your analysis Bunyip. But lets not forget that the CBA, through CGI also spent a considerable amount of money "sponsoring" some of the many Manny events. This sponsorship, whether intented or not appeared to many as an endorsment of the Storm product, and added to the perception of a close relationship. Banks do not just put their name to just any product. They do it with careful consideration of the implications and the benefits to their name and image, and you would presume, an analysis of the model. They were quick to join up to the storm ride but even quicker to jump off....


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## Solly (30 January 2010)

Solly said:


> *"Claim of no mistakes in Storm case"*
> 
> "ASIC denies it missed the "smoking gun" before the demise of Storm Financial, a Queensland-based financial adviser that collapsed in January last year, with investors losing more than an estimated $3 billion."
> 
> Read more in The Australian Financial Review of Jan 27 2010.




The below is an interesting quote from this article by ASIC Chairman Mr Tony D'Aloisio. 

"We are very conscious and concerned about the losses that the Storm investors suffered and I can assure you that we are working flat out to complete our investigations on whether or not we are able to launch proceedings to assist them in recovery actions."


----------



## Quincy (30 January 2010)

Solly said:


> *"Claim of no mistakes in Storm case"*
> 
> "ASIC denies it missed the "smoking gun" before the demise of Storm Financial, a Queensland-based financial adviser that collapsed in January last year, with investors losing more than an estimated $3 billion."
> 
> Read more in The Australian Financial Review of Jan 27 2010.




Here's the article  : -   
	

		
			
		

		
	

View attachment AFR - 27 JAN 2010.pdf


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## Kevin07 (30 January 2010)

I have also made investments with advise from a financial advisor and lost out. Lost heaps. Im not happy with the situation. For me it was a considerable hit. I knew the market was risky and that there are no guarantees so I make my bets with that in mind. I invested an amount I could afford to lose. I also diversified my investments - cash, deposits and the market. 

I knew what I was doing and I knew what the financial advisor was advising. I was 35 at the time and I have been dealt enough blows to have a skeptical mind. I could have opted out when I wanted and doubled my money but I didnt. It was still my choice. Honestly I will say a little greed crept in. 

Will anyone bail me out? Nope. So why should Storm victims be any different to me? I was provided bad advise. Good at the beginning and then it went bad. 

I certainly feel for the victims but for those throwing super and houses into the share market - I just cant work out why you would regardless of the advise. What I also cant work out is the average age of the victims. A lot were near retiring or had and so where did all the life experience go? You know the kind of stuff that makes you all the wiser in this dog eat dog world.


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## Garpal Gumnut (30 January 2010)

Quincy said:


> Here's the article  : -
> 
> 
> 
> ...




Thanks Quincy,

I noticed that link was missing, Solly must be lost in a trolley or a dolly, or both.

I don't buy the AFR anymore, its so left wing now.

gg


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## Garpal Gumnut (30 January 2010)

Kevin07 said:


> I have also made investments with advise from a financial advisor and lost out. Lost heaps. Im not happy with the situation. For me it was a considerable hit. I knew the market was risky and that there are no guarantees so I make my bets with that in mind. I invested an amount I could afford to lose. I also diversified my investments - cash, deposits and the market.
> 
> I knew what I was doing and I knew what the financial advisor was advising. I was 35 at the time and I have been dealt enough blows to have a skeptical mind. I could have opted out when I wanted and doubled my money but I didnt. It was still my choice. Honestly I will say a little greed crept in.
> 
> ...




Kev, many would agree with you, and I know many Stormers would acknowledge the fact, the main reason they can keep going for recompense is that the banks were involved and they have big pockets.

Many of the victims were retired and not young, so many of the posts have a despondent tinge to them as they don't have the years available to get back to where they were.

gg


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## Anastasia (30 January 2010)

I am back. I needed time out from everything....time to heal, gather the forces etc. I have picked myself up for now and my life is going on despite no resolution  of "anything" to date. But there is one thing that I wish to get up on my soap box about and that is the many reports stating how many dollars Storm victims lost. That figure since 2008 has never changed.

But surely it must as my husband and I to this day and many beyond are still losing. As much as we are trying to rebuild our lives it just cannot happen. BoQ is still taking $2000 plus off us each month in home loan interest only repayments. If we sell our home, we cannot afford to buy another home so would pay rent...still losing around $1400 to $2000 a month. (At least if we manage to hang on to our home for a couple of years we hopefully may have some capital growth to offset these payments). We have been unable to receive Centrelink assistance or the pension as we are not eligible...my husband is 58 and I am 57 and we are employable (of sorts).

So we are both now working not to rebuild our lives and move on but to simply tread water and keep on losing financially. Yes I accept that we were very foolish and we lost all and payed the price. So how come we are still paying for that mistake and will continue paying indefinitely? We are in no mans land.

To get back to my original soap box whinge...when reporting Storm victim losses how about quoting realistic to date figures or at least taking into account that the figure quoted in 2008 is still increasing and the final figure is still not determined.


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## Julia (30 January 2010)

Kevin07 said:


> I have also made investments with advise from a financial advisor and lost out. Lost heaps. Im not happy with the situation. For me it was a considerable hit. I knew the market was risky and that there are no guarantees so I make my bets with that in mind. I invested an amount I could afford to lose. I also diversified my investments - cash, deposits and the market.
> 
> I knew what I was doing and I knew what the financial advisor was advising. I was 35 at the time and I have been dealt enough blows to have a skeptical mind. I could have opted out when I wanted and doubled my money but I didnt. It was still my choice. Honestly I will say a little greed crept in.
> 
> ...



Perfectly fair comment.  I think any of the millions of people who have had dodgy advice would agree with you.
Likewise, I'm still having some difficulty understanding why investors in Storm who were double geared are expecting to be compensated for their losses.


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## Solly (31 January 2010)

*"Slater & Gordon continues Storm probe
Compliance systems questioned"*

"The litigation firm will continue to pursue Paragem Partners regarding Storm Financial."

More by Victoria Papandrea in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/8420.htm


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## specialed (31 January 2010)

Julia said:


> Perfectly fair comment.  I think any of the millions of people who have had dodgy advice would agree with you.
> Likewise, I'm still having some difficulty understanding why investors in Storm who were double geared are expecting to be compensated for their losses.




I would have thought by now that everyone was clear on why many storm investors are hoping to be compensated. The debate now appears to have shifted to "by how much". Evan Ralph Norris agrees that many Storm investors need to be compensated in some way- hence the resolution process.  There is a difference between not understanding and not accepting or agreeing....


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## jez47 (31 January 2010)

I knew what I was doing and I knew what the financial advisor was advising. I was 35 at the time and I have been dealt enough blows to have a skeptical mind. I could have opted out when I wanted and doubled my money but I didnt. It was still my choice. Honestly I will say a little greed crept in.

Will anyone bail me out? Nope. So why should Storm victims be any different to me? I was provided bad advise. Good at the beginning and then it went bad.(Gumnut)

The main reason Storm clients should be compensated is that the banks (mainly CBA) have lied to clients and the Joint Parliamentary Committee (2009).  In 2003 margin calls were issued direct to clients and "_a copy sent to your financial adviser"_ . At the parliamentary committee CBA stated changes to this were introduced between 2003 and 2008 but no paperwork documenting the change can be found. (see Hansard report of Committee Chapter 3) Are they kidding ?? No notification of these changes were sent to clients either.
   Thus in Nov 2008 the bank sold investors down at 120% LVR with no previous attempt to call or email investors.  Gumnut - do you really think it's right that banks can change contracts with clients with no notification?
  By the way- you mention being 35 years old - many of those devastated by Storm and banks were in 60's when seeking advice.  Many may have worked for 50 years but like many ordinary Australians were completely ignorant of finances and were trying to secure their retirement without imposing on Centrelink.


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## Garpal Gumnut (1 February 2010)

jez47 said:


> I knew what I was doing and I knew what the financial advisor was advising. I was 35 at the time and I have been dealt enough blows to have a skeptical mind. I could have opted out when I wanted and doubled my money but I didnt. It was still my choice. Honestly I will say a little greed crept in.
> 
> Will anyone bail me out? Nope. So why should Storm victims be any different to me? I was provided bad advise. Good at the beginning and then it went bad.(Gumnut)
> 
> ...




Mate I agree with many of your sentiments but the lawyers will make the most out of all this.

Proof mate, is nearly enough.

But not quite good enough.

A contact tells me Manny has a reasonable chance of winning his case and coming out streets ahead of the Stormers.

gg


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## Julia (1 February 2010)

Garpal Gumnut said:


> A contact tells me Manny has a reasonable chance of winning his case and coming out streets ahead of the Stormers.
> 
> gg




Re the SOA provided to Storm clients, did you/they sign off on this?
If so, that would probably be Mann's escape.


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## Solly (2 February 2010)

Julia said:


> Re the SOA provided to Storm clients, did you/they sign off on this?
> If so, that would probably be Mann's escape.




Julia, it will be interesting to see what determinations will be made regarding Storm's allegedly 'one size fits all' SoA.

I believe at the hearing there was some questioning of the content of one of the SoA in relation to details regarding the $A and $US exchange rates. It was questioned whether the exchange rate comparisons where timely and accurate.

I also believe that the SoA advised that there were safeguards in place so that in downward markets movements there were trigger points identified where actions would be taken to protect the investment.

I wonder how these trigger points were identified and what actions were actually attempted to save the investments.


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## bunyip (4 February 2010)

Solly said:


> I also believe that the SoA advised that there were safeguards in place so that in downward markets movements there were trigger points identified where actions would be taken to protect the investment.
> 
> *I wonder how these trigger points were identified and what actions were actually attempted to save the investments*.




It appears there were none - that was the major shortcoming of the Storm model.
Excessive gearing and lack of diversification didn't help either. But it was primarily the total lack of defensive action that brought Storm undone.


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## Solly (5 February 2010)

I was wondering if John Clothier head of Colonial Geared Investments, investment lending and Kamal Arnaout, 
who I believe looked after the Storm account, are still with CGI.

Does anybody know? 

There was a media report last year speculating that they had left.


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## Garpal Gumnut (5 February 2010)

Solly said:


> I was wondering if John Clothier head of Colonial Geared Investments, investment lending and Kamal Arnaout,
> who I believe looked after the Storm account, are still with CGI.
> 
> Does anybody know?
> ...




Tony Raggatt at the Bully would know. A call to him at the Townsville Bulletin may be worthwhile. His email address is raggatta@nqn.newsltd.com.au

gg


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## chrisgee (5 February 2010)

well how are all the stormies going ? i havent been here for a while but i have been reading things-looks like the new year has started and there is very little info coming out about what is going on with things-i know some are not using s&g but are going through others. surely something will sort out soon it cant keep going on like this.-i know some people here think that the stormies should have been wiser-well everybody makes crook calls every now and then-hang in there guys keep the fight going- i have seen what stress and damage all this has caused-Come on ASIC lets see some real grunt in your powers and fully investigaate what really happened-if criminal things are done dont let anyone get away with it-it over to you guys now-
STAY STRONG STORMIES


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## pegasus (6 February 2010)

Solly said:


> I was wondering if John Clothier head of Colonial Geared Investments, investment lending and Kamal Arnaout,
> who I believe looked after the Storm account, are still with CGI.
> 
> Does anybody know?
> ...




The answer is both have left - not by their own volution.  What happened was very interesting...When they had to testify at the public hearing they were both on 'leave'.  So when asked where they worked they could honestly say CGI/CBA.  Everything looked above board and The Bank was standing by their employees.  Clothier and Kamal were visibly agitated.  The CBA Barristers were sitting at the benches like Vultures watching and listening to every word.  Of course if Clothier or Kamal said anything agianst the Bank their entitlements would be at risk - so they toed the corporate line.  Once the examination was over Clothier and Kamal left their employment quietly and the Bank slipped away like the serpents they are.


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## DocK (6 February 2010)

Very interesting - and not unexpected

If there's any silver lining to the whole storm fiasco for me, it is that a very valuable lesson has been learnt.  I'm quite happily watching the all ords take a slide lately as this time I had stops in place which have preserved profits and more importantly, capital. This time my cash is safely sitting in the bank until (hopefully) it's time to get back in for a new uptrend.

It was a bloody expensive and hard lesson, but one that won't need repeating.  I'd encourage any ex-stormer who hasn't taken control of their own finances to do so - it's not as hard as you may think.


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## Solly (6 February 2010)

pegasus said:


> The answer is both have left - not by their own volution.  What happened was very interesting...When they had to testify at the public hearing they were both on 'leave'.  So when asked where they worked they could honestly say CGI/CBA.  Everything looked above board and The Bank was standing by their employees.  Clothier and Kamal were visibly agitated.  The CBA Barristers were sitting at the benches like Vultures watching and listening to every word.  Of course if Clothier or Kamal said anything agianst the Bank their entitlements would be at risk - so they toed the corporate line.  Once the examination was over Clothier and Kamal left their employment quietly and the Bank slipped away like the serpents they are.




Thanks pegasus, I was wondering what happened. 
I am interested in contacting these two former employees of CGI. 
If anybody has their contact details please PM or email me.


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## Solly (6 February 2010)

For all those involved, 
I hope all goes well with the meeting with Mr Scattini tomorrow.


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## Solly (7 February 2010)

*"Is this a case of rewarding bad behaviour?"*

"There seems no better way for an industry and its participants to remain in line than to tighten the rules."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8470.htm


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## Grey Ghost (7 February 2010)

Solly said:


> Thanks pegasus, I was wondering what happened.
> I am interested in contacting these two former employees of CGI.
> If anybody has their contact details please PM or email me.




Solly I can't help you with their contact details but I am very interested in what you want to ask them.


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## Claudius 11 (9 February 2010)

Grey Ghost said:


> Solly I can't help you with their contact details but I am very interested in what you want to ask them.




I can't help with contact details but it would seem that the purge of those within CBA who were umbilically connected to Storm is almost complete. We have seen the demise of Tait, Grimshaw, Clothier and Arnoutt. More recently we saw Matt Comyn a 'heavy hitter' within the Storm saga depart company with the Bank. Comyn was 'part of the solution' with the Resolution Scheme. It became apparent during the Federal Court Inquiry that he was implicated in those crucial meetings between Storm and the CBA back in December 2008 at which time they were attempting, according to an agreement that was in place between them, to work together to find a solution to the problem. This deal was reneged on by the Bank when those involved saw their rear ends on the line and acted to save themselves by selling down the Storm Clients portfolios and shutting down the Storm funds. In this context, Comyn might reasonably be seen as 'part of the problem'. Comyn was GM of Comsec and has now taken a similar position with Morgan Stanley.

It is a matter of conjecture how this 'blood letting' of those CBA employees who were involved with Storm might be interpreted in the wider community, but by any assessment it must convey some message that those at the top are holding them responsible for the sorry chain of events. Does this also not say something about acknowledged culpability?


----------



## shibby (9 February 2010)

Claudius 11 said:


> I can't help with contact details but it would seem that the purge of those within CBA who were umbilically connected to Storm is almost complete. We have seen the demise of Tait, Grimshaw, Clothier and Arnoutt. More recently we saw Matt Comyn a 'heavy hitter' within the Storm saga depart company with the Bank. Comyn was 'part of the solution' with the Resolution Scheme. It became apparent during the Federal Court Inquiry that he was implicated in those crucial meetings between Storm and the CBA back in December 2008 at which time they were attempting, according to an agreement that was in place between them, to work together to find a solution to the problem. This deal was reneged on by the Bank when those involved saw their rear ends on the line and acted to save themselves by selling down the Storm Clients portfolios and shutting down the Storm funds. In this context, Comyn might reasonably be seen as 'part of the problem'. Comyn was GM of Comsec and has now taken a similar position with Morgan Stanley.
> 
> It is a matter of conjecture how this 'blood letting' of those CBA employees who were involved with Storm might be interpreted in the wider community, but by any assessment it must convey some message that those at the top are holding them responsible for the sorry chain of events. Does this also not say something about acknowledged culpability?




I have one word WOW!!!!!!!!

While we are talking about banks does anyone have any information about the ANZ's branch in Nambour.  Any information would be gratefully received.


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## Claudius 11 (9 February 2010)

Julia said:


> Perfectly fair comment.  I think any of the millions of people who have had dodgy advice would agree with you.
> Likewise, I'm still having some difficulty understanding why investors in Storm who were double geared are expecting to be compensated for their losses.




In an attempt to throw some light on a widely held misconception Julia, it mattered not one iota whether Storm clients were double geared, highly geared or had no gearing at all. They all suffered the same consequences. There were those who had neither tapped into the equity of their Real Estate with an investment property loan nor had a Margin loan but who still had their investment in the Storm Index Funds sold out from under them without notice.
It was the same precipitous action resulting from the acrimoniuos breadown in the relationship between the Banks and Storm that did the damage.

Having said that, the point needs to be made that Margin Call LVR's were not in every case set at a level that reflected the double gearing. But despite that even those who might have been more precariously placed would have exercised what option was appropriate to their circumstances had they had the benefit of a margin call according to the prescripts of the Storm investment model. They might have been in a financial wheel chair- like many in the community who relied on an equities based investment such as a allocated pension but they would not have ended up on life support in intensive care, if I may use the analogy! Obviously there are many more complexities to the events that muddy the water - hopefully that swamp might cliarify one day!!


----------



## specialed (9 February 2010)

Claudius 11 said:


> I can't help with contact details but it would seem that the purge of those within CBA who were umbilically connected to Storm is almost complete. We have seen the demise of Tait, Grimshaw, Clothier and Arnoutt. More recently we saw Matt Comyn a 'heavy hitter' within the Storm saga depart company with the Bank. Comyn was 'part of the solution' with the Resolution Scheme. It became apparent during the Federal Court Inquiry that he was implicated in those crucial meetings between Storm and the CBA back in December 2008 at which time they were attempting, according to an agreement that was in place between them, to work together to find a solution to the problem. This deal was reneged on by the Bank when those involved saw their rear ends on the line and acted to save themselves by selling down the Storm Clients portfolios and shutting down the Storm funds. In this context, Comyn might reasonably be seen as 'part of the problem'. Comyn was GM of Comsec and has now taken a similar position with Morgan Stanley.
> 
> 
> 
> It is a matter of conjecture how this 'blood letting' of those CBA employees who were involved with Storm might be interpreted in the wider community, but by any assessment it must convey some message that those at the top are holding them responsible for the sorry chain of events. Does this also not say something about acknowledged culpability?




Well stated Claudius...

It appears the CBA have gone to great lengths to quietly remove those within their organisation who they hold responsible for this fiasco....whilst of course continuing to attempt to deny their own overall culpability.....Maybe a nice investigative piece by Stuart Washington may get to the bottom of this corporate cleansing by the CBA........Would have been interesting to see what paper trail actually laid around the CBA offices in Sydney..I reckon the shredders would have been hard at work for a while their, Something I sure ASIC will discover .....LOL


----------



## Julia (9 February 2010)

specialed said:


> Something I sure ASIC will discover .....LOL




I wouldn't be putting too much faith in ASIC.  Their track record is less than impressive in any sense.

Their level of competence appears to be on a level with that of Victoria Police.


----------



## specialed (10 February 2010)

Julia said:


> I wouldn't be putting too much faith in ASIC.  Their track record is less than impressive in any sense.
> 
> Their level of competence appears to be on a level with that of Victoria Police.




What..... 2 massive losses in court, their own 12 month investigation into Storm with no result and $ 500 million given to Worrels to replicate their own useless investigation of Storm.....That type of incompetence is Very Impresessive...........Wouldnt surprise me if they also thought up Grocery Watch !!


----------



## Solly (11 February 2010)

Julia said:


> I wouldn't be putting too much faith in ASIC.  Their track record is less than impressive in any sense.
> 
> Their level of competence appears to be on a level with that of Victoria Police.





Julia, ASIC may have had a couple of rough episodes lately but I truly hope that this doesn't affect their resolve to give an in-depth treatment of the whole Storm saga.

I saw Mr Upton in The Mall a couple of weeks ago. He certainly does look focused and I'm sure I noticed that little spring in his step I previously observed after those eventful days at Harry's.


----------



## Solly (11 February 2010)

*"Ripoll slams margin loan 'spruikers'"*

"He is now concerned the mistakes made prior to the crisis will simply be repeated, and that the lessons learnt by Storm Financial’s investors will not guide future margin lending practices."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/article/ripoll-slams-margin-loan-spruikers/510984.aspx


----------



## Solly (11 February 2010)

*"CBA: Please excuse our embarrassing profit"*

"But it's been the CBA's generous business customers who've paid most dearly for the bank's big mistakes: ABC Learning, Storm Financial et al."

Comment by Michael Pascoe in The Age here;

http://www.theage.com.au/business/cba-please-excuse-our-embarrassing-profit-20100211-nso0.html


----------



## Solly (11 February 2010)

Julia said:


> I wouldn't be putting too much faith in ASIC.  Their track record is less than impressive in any sense.
> 
> Their level of competence appears to be on a level with that of Victoria Police.




Also Julia, The AFR is reporting ASIC Chief 
"Tony D'Aloisio, is expected to come under fire from a Senate estimates committee tonight, amid claims of pay disputes, staff resignations and budget blow-outs." Let's hope there is a new momentum now and any hindrances to their effectiveness is behind them.


----------



## Quincy (11 February 2010)

Julia said:


> I wouldn't be putting too much faith in ASIC.  Their track record is less than impressive in any sense.
> 
> Their level of competence appears to be on a level with that of Victoria Police.




The Australian Parliament created ASIC in 1998, and it became operational in 1999. Since its inception, it has drawn much criticism for its retroactive approach - and its for its incompetence. In January 2006, The Auditor General criticised it for its inability to implement an AFSL licencing system. It again criticised it in January 2007 for its abysmal prosecution rate per complaint. Perhaps Neal Prior, the current editor of the West Australian, once best described its time of existence as a "reign of error".

A short list of the larger companies in which it has failed to act in time over the years include HIH, One-Tel, Sons of Gwalia, Harris Scarfe, Westpoint, ACR and Fincorp Then there are those of a smaller size. Hey include Business Capital Australia, Gabriel Pennicott, National Investment Institute, Radison Maine, Robert Orehek, Sonntag, Streetwise, Tasmanian Mortgage Scams, Triscott, Qual Corp, Hanna Bros, Viron Hondros, Pagoda Edward Elecom, and Henry Kaye. In more recent times we have seen the collapses of Westpoint, ACR, Fincorp, Bridgecorp, and more recently Storm. In all of those there were clear warning for ASIC to investigate and take immediate action. That list is anything but exhaustive, and does not include small companies. Nor does it include recent stockmarket failures. 

http://www.westpointinvestorsgroup.com/


----------



## Solly (12 February 2010)

*"Storm Financial investors thrown a lifeline"*

"STORM Financial victims are on the brink of a "history-making breakthrough" over a multimillion-dollar payout to salvage them from financial oblivion."

More by Peter Michael in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26710687-3122,00.html


----------



## Solly (12 February 2010)

*"Speculation mounts over CBA resolution scheme
Rumoured ASIC meeting"*

"Representatives of litigation firm Slater & Gordon were rumoured to have met with members of ASIC yesterday in order to seek approval for the Commonwealth Bank of Australia's (CBA) resolution scheme."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8517.htm


----------



## Solly (12 February 2010)

*"Storm investors, CBA may be nearing agreement"*

"Hopes are growing of a breakthrough in the negotiations between former investors in failed adviser Storm Financial and an independent negotiation team set up by Commonwealth Bank of Australia."

Read more on page 4 of The Australian Financial Review, Feb 12, 2010.


----------



## Harleyquin (12 February 2010)

Kevin07 you said on the 30 January that you went to a financial advisor and you knew and understood what he was suggesting.  That's exactly what didn't happen at storm, in most cases quite the reverse in fact.  I see that as a major difference and don't think that your comments are at all fair.  Elderly people of retirement age, one lady was 91 years of age, were given large loans by both banks involved in her case.  

She was on the pension.  Few if any of these people had any idea and many of storms advisors made sure that those who didn't understand, were made none the wiser.  The biggest mistake that many of us made was to say 'we've never been to a financial advisor before and dont' know anything about investing.'  They must have rubbed their hands together in glee.

Most of us thought that, that's why you went to an advisor, to get advice if you were lacking investment knowledge.  Now after the event we find out that you should stay well away from any of them unless you have a considerable high level of understanding in the financial field.  There are a lot of differences between your case and the storm case.  Also your age makes a huge difference, a considerable percentage of storm clients were retired or on the verge of retirement and the storm/banks combination have destroyed the lives of several thousand families with their irresponsible advice and lending.  

Not all ex storm clients were unknowledgeable investmentwise, some, like you understood what they were investing in then and would do it again, they liked this type of investment and could afford it, because of age and earnings, and I defend anyone's right to agree or disagree with this type of investment.  What many of you have to realise is that a large number of clients asked for a safe/secure investment plan and were told by the advisors that what they were advising was safe and secure.  When an advisor with a degree tells you this and you don't know any different it's easy to see why many believed them.  

It's all too easy for those of you, with a fair degree of investment know how, on this forum to say 'you must have known it' wasn't safe...not true.  Oh we know that now alright but we didn't then and we believed the lies, they were told by the experts.  We can only hope that the truth comes out as time goes on and investigations continue.

Kevin07 you have only lost money, most storm clients have lost their ability to live a normal life, they are on antidepressants, they have lost the ability to enjoy their lives, they've lost their homes and property and all their money, everything, it's a heavy price to pay for seeking financial advice...and they are not all 35 years of age.  You've learnt your lesson and can come back stronger in the next 30 years before you retire, they can't.


----------



## Solly (13 February 2010)

*"Trickle keeping Storm hopes ticking"*

"STORM Financial may be on ice, but a trickle of commission fees is still flowing to the collapsed financial planning firm from financial partners including BT Financial and Macquarie."

More from Eric Johnston and Courtney Trenwith here;


http://www.theage.com.au/business/trickle-keeping-storm-hopes-ticking-20100212-nxo5.html


----------



## Solly (13 February 2010)

*"Date set for report on Storm"*

"LONG-sufferers investors of Storm Financial can expect to hear the results of an investigation into the collapse next month."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/02/12/114825_news.html


----------



## Solly (13 February 2010)

*"Stormy weather, but hopes rising"*

"HUNDREDS of victims from the Rockhampton region, who lost millions of dollars when the investment adviser Storm Financial collapsed with huge debts, could know by the end of the month how much they will get back."

More by Adrian Taylor in The Morning Bulletin here;

http://bit.ly/9QPj4E


----------



## Solly (13 February 2010)

And just to refresh the memory...

On Business Day

STORM DAMAGE: How the saga unfolded

http://www.businessday.com.au/national/stormdamage


----------



## Quincy (13 February 2010)

ASIC given a deadline of early March to publicly report on the Storm Financial case.

View attachment AFR - 13-14 February 2010.pdf


----------



## Solly (16 February 2010)

*"Macquarie decision momentous: Storm founder
Consequences for all clients"*

"Former clients of Storm Financial may benefit from the Macquarie Bank and Leverage Equities margin lending case, Storm co-founder claims.

"The case is monumental and it has ramifications, we believe, for every single Storm client," Storm co-founder Emmanuel Cassimatis said."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8538.htm


----------



## Solly (16 February 2010)

"Slater & Gordon, has posted a 12.1 per cent rise in half year earnings."

"a "significant proportion" of the company's commercial litigation resources have been assigned to the Storm action"

More on thenewlawyer.com.au


----------



## Solly (17 February 2010)

*"Buyer Beware: Margin lending is back in vogue"*

"Before the Global Financial Crisis, margin lending had well and truly become the new wealth creation vehicle of choice. It was widely regarded as an infallible tool of leverage using someone else’s money, multiplying the upside of share trading and setting out to get more from investing less.....

During the Storm Financial inquiry I heard sickening stories of disaster and loss......"


Full text here by Bernie Ripoll federal member for Oxley and the chairman of the  Joint Parliamentary Committee on Corporations and Financial Services;

http://www.labor.com.au/buyer-beware-margin-lending-back-vogue


----------



## bunyip (17 February 2010)

Solly said:


> *"Buyer Beware: Margin lending is back in vogue"*
> 
> "Before the Global Financial Crisis, margin lending had well and truly become the new wealth creation vehicle of choice. It was widely regarded as an infallible tool of leverage using someone else’s money, multiplying the upside of share trading and setting out to get more from investing less.....
> 
> ...




Solly - that's an excellent article and it sums up Cassamatis and the entire Storm situation to a tee.

Now we're reading words like 'BEWARE' in relation to margin lending. The fact is that caution was always needed when using margin loans for stockmarket investment. But Cassamatis, the big investment expert, didn't seem to know it. Neither did many Storm clients, apparently.
Many people, including Storm clients, did exceptionally well using margin loans to increase their market exposure during the bull market. 

They kept their profits if they understood that bear markets are a feature of stockmarkets, as are bull markets, and you'd better not stick with a margin loan once the market turns bearish.

They lost their profits if they failed to remember the bear markets of the past, and took no action once the market turned bearish and the margin loans magnified their losses.

There's no disputing that Cassamatis made a lot of money for his clients. 
It's just a shame that he was incompetent when it came to giving advice that would have enabled Storm clients to hold on to most of their profits.

Amongst all the blame being levelled at the banks for lending people too much money and selling their investments out from under them etc, the heat seems to have gone off Cassamatis, which is no doubt what he wanted to happen.

But let's remember that Cassamatis and his salesmen gave the advice to his clients, he made the decisions that were implemented by his sales staff, he organised the margin loans, he failed to take defensive action to protect his clients wealth as he should have done long before they got anywhere near margin call, he sat on his hands and watched for a whole year while one of the worst bear markets in history wiped away his clients wealth.

Let it not be forgotten by Storm clients, SICAG or anyone else who has been affected by the Storm debacle.....Cassamatis was the primary cause of the financial disaster that befell Storm clients.


----------



## Rainbow (18 February 2010)

Was he completely incompetent though? I think he was extremely cunning, over a number of years. He built up a business from scratch using other people's money, traded on reputable Advisors reputations by buying them out to add to the Storm 'family' and hoodwinked even the Banks - up to a point. Even they wouldn't support his floating Storm as a viable entity. When that failed, and the market started to fall, it was never in Cassimatis interest to protect his clients, after all, he would be losing his income. Clients were unable to take their money out of the market, as testified by some of their advisors and former clients... and were often urged to borrow more which placed them in a precarious position regarding their leverage, even before the proverbial hit the fan. Secret deails with the Banks to allow gearing at a higher percentage than normal was the final nail in the coffin, and sure, there probably was some back room back slapping going on and Cassimatis thought they wouldn't let us all go down the tube. 

I think he was outsmarted. In the end, there was just too tempting an opportunity there for someone - a flood on cheap shares just waiting to be scooped up when the Storm people were sold down. And only 3,000 or so people to suffer, mainly retirees and Mums and Dads... what would they know
anyway.

ASIC... c'mon.


----------



## DocK (18 February 2010)

It's often said the sharemarket runs on greed and fear.

Then:
Cassimatis was greedy - for money, certainly, but also ego-driven greed for power/glory/recognition.  

Banks were greedy - lend more, stretch lvr maximums, reduce fees, fund events - whatever it took to get their share of the storm referred business and meet their lending targets.

Clients were greedy - at least in the eyes of the general public - I think some were and some weren't - but aren't all investors by definition wanting to grow their wealth?  How much is enough?   Where's the cut-off between prudence and greed - it's a shifting line in the sand that moves according to circumstances and sentiment I feel.

Now:
Cassimatis _should_ fear - losing his fortune, reputation and maybe even freedom for a while?  Should certainly fear meeting some ex-clients face-to-face.  If there is such a thing as karma (and I like to think there is) he should certainly feel some fear..

Banks fear -  having to acknowledge some responsibility, having to endure more scrutiny perhaps in the future, having to pay compensation.  Several bank employees obviously had cause to fear keeping their jobs, being able to secure new ones, maybe a few even fear looking at themselves in the mirror?

Ex-clients fear - so much.  Fear of keeping the home, fear of facing family, fear of ever climbing out of the hell their lives have become in many cases.  Fear of failure, fear of accepting responsibility, fear of trusting anyone ever again, fear of overcoming huge debt, fear of kissing goodbye forever their dreams of the future.

Greed and Fear.  Sometimes the more things change, the more they stay the same.


----------



## Judd (20 February 2010)

Rainbow said:


> ........
> 
> In the end, there was just too tempting an opportunity there for someone - a flood on cheap shares just waiting to be scooped up when the Storm people were sold down......




I think you're stretching it a bit on that aspect.  When Colonial closed the funds around mid-December 2008 (I could be wrong on that date/year so I stand to be corrected) the Parliamentary Inquiry was informed that following redemptions (over $500M) and market downturn, the Storm badged indexed funds went from $700M to $44M.

I've just had a look at the STW index fund (which tracks the ASX 200) update of 17 December 2008.  The NAV was $33.12 per unitl and BHP alone accounted for 15,054 shares of that particular fund, CBA 6,022 shares and so on.  The value of the fund on that day was about $820M.  The volume, ie turn over, for BHP is around 16M shares per day and that of CBA some 4M shares per day.  If the Storm badged indexed funds reflected a similar composition then then "flood of cheap shares'' would hard pressed to qualify as a drop in the ocean of the trading for that particular day.


----------



## MrEuro (21 February 2010)

pegasus said:


> The answer is both have left - not by their own volution.  What happened was very interesting...When they had to testify at the public hearing they were both on 'leave'.  So when asked where they worked they could honestly say CGI/CBA.  Everything looked above board and The Bank was standing by their employees.  Clothier and Kamal were visibly agitated.  The CBA Barristers were sitting at the benches like Vultures watching and listening to every word.  Of course if Clothier or Kamal said anything agianst the Bank their entitlements would be at risk - so they toed the corporate line.  Once the examination was over Clothier and Kamal left their employment quietly and the Bank slipped away like the serpents they are.




They have certainly left and no longer there. Scapegoats


----------



## Solly (22 February 2010)

MrEuro said:


> They have certainly left and no longer there. Scapegoats




MrEuro, it is interesting that you use the word "Scapegoats". 
If you or anybody else knows the current contact details of Messers Clothier 
and Arnaout I would appreciate if you could email or PM me.

I have a general interest with the views of many of the
 participants in this event.


----------



## maccka (24 February 2010)

Hello all,

Today was a big day for ex-Storm investors who are connected to CBA (and associated subsidaries).  


Compensation for investors (Stuart Washington)  

CBA to pay Storm victims $200m (Stuart Washington - possibly same as previous link)

http://www.businessday.com.au/break...rm-clients-reach-agreement-20100224-p0zv.html (EVAN SCHWARTEN) Slightly premature to say agreement has been reached at this point imho.

CBA's $200m deal to calm the Storm (Anthony Klan, Andrew Fraser) 

CBA boss calms Storm, woos dudded investors (Elizabeth Knight)

BoQ won't follow CBA with compensation scheme over Storm Financial collapse (Sara Rich) 

cheers
maccka


----------



## Solly (24 February 2010)

*"Storm compo deal stirs mixed response"*

"The long-awaited compensation scheme for Commonwealth Bank of Australia investors in collapsed adviser Storm Financial was launched yesterday and came under fire from lawyers planning legal actions."

More by Duncan Hughes in the Australian Financial Review Feb 24 2010.
(over to you Quincy)


----------



## Solly (24 February 2010)

maccka said:


> Hello all,
> 
> Today was a big day for ex-Storm investors who are connected to CBA (and associated subsidaries).
> 
> ...




maccka,

Thanks for the links, I've had a bit of a big night of discussion with my Stormer mate. 

Also in Evan Schwarten's AAP article
"CBA and Storm reach historic agreement"

http://www.news.com.au/business/cba-and-storm-reach-historic-agreement/story-e6frfm1i-1225833666132

This is where I think there will be further discussion and some may not be feel that this is adequate.

"Mr Scattini said customers who took out margin loans to invest with Storm would be remunerated for *90 per cent of the funds they used as security on the loan*, provided the value of their investment slipped below the margin call level in the second half of 2008."

And I see that it's also reported that Sean McArdle isn't too impressed with the offering...


----------



## pegasus (24 February 2010)

Solly said:


> *"Storm compo deal stirs mixed response"*
> 
> "The long-awaited compensation scheme for Commonwealth Bank of Australia investors in collapsed adviser Storm Financial was launched yesterday and came under fire from lawyers planning legal actions."
> 
> ...




This is another decoy by the bank to try and look like the 'good guys'...the public inquiry showed the data coming from CGI was corrupted.  The department was in dissaray during the latter half of 2008 with management running around in circles.  So, whose data are they going to use to take clients back to 90%?  Who will reconcile units sold, when they were sold and prices sold at for each of the 2000 clients!?  What day are they going to use for each person when CGI/CBA didn't know what was going on from minute to minute?

Another interesting point - the CBA used negative equity within Storm (the company) to call in all loans and sink the business - what happens there?  Will they repay negative equity to the liquidaters?


----------



## nessark (24 February 2010)

Hey guys, i searched on Google to find info about Emmanuel and Julie Cassimatis to see what they studied at uni....does anyone know if they even had a financial/business background prior to founding Storm Financial?  I could find no info on this as all the news is on the company failure....


----------



## Julia (24 February 2010)

I'm surprised none of the Stormers have so far made any comment about this outcome.



> Most of the clients – who had an average of $1 million invested in a high-risk margin loan portfolio – will get cash compensation based on equity ahead of the collapse a year ago.




This seems generous to me.  That seems to assume they would have protected that equity when the market fell.  From the comments earlier in this thread, no such protective plan was even discussed, and most of the Stormers didn't seem to have much understanding of capital preservation.


----------



## Defender (24 February 2010)

*Why Storm Failed...my theory*

I’m a first timer here, but have read a quite a few of the Storm comments. As an ex-Storm client, I have an opinion as to why Storm failed to saves its clients. In our mid-50s, my wife & I joined at a time when we believed we should have professionals looking after our investments. Although we had done OK over the years, we had made plenty of wrong decisions along the way as well.
Storm was recommended to us by a business associate, and from what we could determine they had looked after their clients investments safely through the 1987 crash and all those that had followed. Any Storm clients we met were very happy with the way their investments were managed. According to information, nobody had ever received a margin call. Storm indicated that expected returns would merely track the major indices...hardly greedy, it sounded more a conservative approach! We had been running a small margin loan up to this point under our own initiatives, so it was not new to us, and we understood the basics of how it worked. Their advisor was never pushy. They merely told it how it was, explained everything we needed to understand, and left it to us to make a decision. After about 3-4 months, we decided to proceed (March 2006). 
Greed did not come into the equation for us, nor any of the other clients we know personally. For us, it was a view to paying a professional to manage our investments more efficiently than we could on our own. We probably joined Storm at the time when Cassimatis had plans to float the business. I now believe that, that became his No 1 goal. He needed to show impressive company growth, which he did (100%+ pa for several years), to impress potential investors. And as well as acquisitions of smaller advisory firms, increasing client borrowings were part of that as well (not that we had any idea of what was going on in the background,  at that stage). 
Incompetent? Cassimatis is plenty of things, but he is by no means incompetent! I’m sure he could have got investors through the GFC, as he had done during earlier crashes...even at those higher LVRs. However, he had special deals in place (we didn’t know about this at the time) with the margin lenders, which he believed would carry us through. If he felt the only option was to scale everyone back, it would expose a weakness is his case to prospective investors on his next attempt to float the business. If he had the banks on his side, supporting Storm clients through the crash, it could be seen in a more positive light for the public float. So he gambled on this course of action as opposed to scaling back our LVRs, as he did during previous crashes.
In summary, Cassimatis did his very best to optimize his chances of a successful float, with the interests of his clients at some lower level of priority. Why he didn’t start winding back LVRs earlier might reflect the level of faith he had in his agreement with the margin lenders. I don’t think that passing him off as a fool or incompetent explains it.
Cassimatis is a very polished performer & presenter. He knows the human emotions intimately, and how to handle them, what to say and how to say it. This special skill he has refined has stood him well in dealings with his clients as well as major banking players...mark of a good conman!


----------



## DocK (24 February 2010)

Julia said:


> I'm surprised none of the Stormers have so far made any comment about this outcome.
> 
> 
> 
> This seems generous to me.  That seems to assume they would have protected that equity when the market fell.  From the comments earlier in this thread, no such protective plan was even discussed, and most of the Stormers didn't seem to have much understanding of capital preservation.




I suspect the reason there haven't been comments from "the stormers" is because most of us know that *any* compensation will be regarded as generous to quite a few of the regular posters on this thread.  My understanding of the possible compensation for those that held margin loans with CGI is:  (from businessday.com.au link below)



> The average Commonwealth Bank customer had a Storm margin loan of $1 million.
> 
> Under the agreed compensation principles, the investor would have had equity of $110,000 if the margin call had been made at 90 per cent. The compensation would be 90 per cent of this amount, or about $100,000.




This appears, to me at least, to be fair given that CGI failed to make a margin call when it should have (disputed) and most ex-storm clients had funds in "dam accounts" which could have been used to meet such calls.  Choosing to sell investments and get out of the market entirely or choosing to meet margin calls as they are made are two different options.  Many ex-stormers have attested to having avenues available to them to meet margin calls - had they had that option and not been sold out without notice instead.  Disclosure - I did not have a margin loan with CGI and did not receive a margin call.  My take on this outcome is that CBA has accepted that it has a case to answer on the way it handled the margin call/inaccurate data issue.  I'd also question whether the average margin loan was $1 million.  At a guess I'd say there were a few very large loans of a few million, and the majority would be rather less - so someone who had a margin loan of $500,000 may be compensated to the tune of $50,000 - doesn't seem overly generous to me.

As far as the investment loans secured by property are concerned (and this does concern me), the proposal is:



> The principles also include a commitment to review home loans given to often elderly investors, using the standards of a prudent banker.
> 
> If a property was found, for example, to be overvalued when the loan was awarded or that people were given loans they had no ability to repay, the loan would be scaled back to a loan that would have been awarded by a prudent banker.
> 
> Under the principles, the ''imprudent'' portion of the loan and its interest would be written off.




http://www.businessday.com.au/business/compensation-for-investors-20100223-p0oh.html

This seems fair at the very least to me given the very questionable valuation and information sharing practices that were being indulged in by storm and the CBA at the time, but were not disclosed to clients of both.  Under the proposed resolution, if a property was fairly valued and the borrower had the means to service the debt there will be no compensation - again, doesn't seem overly generous to me


----------



## Pindibog (24 February 2010)

DocK said:


> I suspect the reason there haven't been comments from "the stormers" is because most of us know that *any* compensation will be regarded as generous to quite a few of the regular posters on this thread.  My understanding of the possible compensation for those that held margin loans with CGI is:  (from businessday.com.au link below)
> 
> 
> 
> ...




We are just going to reinvent the wheel accusing Stormers of greed and all their fault again.  I agree with you Dock. Joke. CBA enabled Storm to put everyone in this position and pulled everyone out at the lowest time in the market. Deny, Deny...ooh now we apologise and want to make things right. Load of crap. What about all the pain/stress/bullying by banks/suffering which they caused. The break fees they charged us all when we paid the ML out as they would not let us use it other than stay in their CBA accellerator account. I was able to meet all MC which would have followed with the market. Do they take that into account. My lost dividends and growth. 
Why do they now get a second chance to make the decision they should have at the time by informing their clients and expecting they would pull out. All consequences that have occurred following their action on my uninformed behalf is their fault and I should be compensated as such. 
Its only about improving their brand, not about taking responsibility.
Lets hope all cases are compensated on individual facts and not the blanket compensation which is being presented. Corruption is rife. You just need to look at the JPC and the CBA's answers which have never been taken to task. Will they ever????


----------



## Solly (24 February 2010)

*"Other deals on the way for Storm clients"*

"Major banks are working to settle disputes with former clients of Storm Financial following a landmark deal between the Commonwealth Bank and devastated investors."

http://www.smh.com.au/business/other-deals-on-the-way-for-storm-clients-20100224-p365.html


----------



## specialed (24 February 2010)

Does anyone know when ASIC / Worrels will actually report and has anyone heard any whispers as to whether it will actually be worth the wait ?

I no longer get angered by those who continue the line of "the Greedy investor", but do get a little frustrated that the identity of those who are so ignorant of the facts of this whole affair are hidden by the use of nicknames. Anyone who still believes the CBA is simply rewarding bad investment decisions with a payout that will cost them significantly more then $300 million has little understanding of any of this and their contributions add nothing to this debate. 

They do however confirm my fear of where society is heading. It would appear the gene pool of life is becoming more of a muddy pond with the sludge at the bottom getting thicker and thicker..


----------



## Solly (24 February 2010)

specialed said:


> Does anyone know when ASIC / Worrels will actually report and has anyone heard any whispers as to whether it will actually be worth the wait ?
> 
> I no longer get angered by those who continue the line of "the Greedy investor", but do get a little frustrated that the identity of those who are so ignorant of the facts of this whole affair are hidden by the use of nicknames. Anyone who still believes the CBA is simply rewarding bad investment decisions with a payout that will cost them significantly more then $300 million has little understanding of any of this and their contributions add nothing to this debate.
> 
> They do however confirm my fear of where society is heading. It would appear the gene pool of life is becoming more of a muddy pond with the sludge at the bottom getting thicker and thicker..




specialed, I believe that Tony D'Aloisio will make a statement early next month. I'm sure it will be worth the wait. 

Here's a flashback to Bernie Ripoll and his statement about the collapse. 

http://www.abc.net.au/news/video/2009/04/07/2536778.htm


----------



## Julia (24 February 2010)

DocK said:


> This appears, to me at least, to be fair given that CGI failed to make a margin call when it should have (disputed) and most ex-storm clients had funds in "dam accounts" which could have been used to meet such calls.



OK, fair comment.  But wasn't Storm supposed to be monitoring this situation?  Shouldn't it have been Storm who took responsibility for getting the client to come up with the extra cash or selling out at the appropriate time?
My concern is that this mea culpa by the CBA seems to be letting Cassimatis off the hook.  Is that fair, DocK?



> Choosing to sell investments and get out of the market entirely or choosing to meet margin calls as they are made are two different options.



Quite true.  But my earlier point was that the agreement by CBA seems to assume clients would have probably come up with the extra cash and then maintained their positions.  If they had done this, they would have found their net wealth falling as did everyone else who didn't exit the falling market.
My question went to how many Stormers would actually have exited at this stage, preserving their profits to date, rather than just letting their capital fall with the market.   I suspect not many.  That was my point and why I suggested it was fairly generous.



> As far as the investment loans secured by property are concerned (and this does concern me), the proposal is:
> http://www.businessday.com.au/business/compensation-for-investors-20100223-p0oh.html[/EMAIL
> 
> This seems fair at the very least to me given the very questionable valuation and information sharing practices that were being indulged in by storm and the CBA at the time, but were not disclosed to clients of both.  Under the proposed resolution, if a property was fairly valued and the borrower had the means to service the debt there will be no compensation - again, doesn't seem overly generous to me




Agreed.   The account I read of the settlement was in today's "The Australian".  No longer have the paper but was rather surprised at the implication in the way the article was written that it was the CBA who inflated the property values and borrowers' incomes.
Throughout this thread, no one has actually been able to say where this inflating of values occurred, and I guess most of us assumed it would have been by Cassimatis.

If that's wrong, and the bank has indeed exaggerated dollar amounts, then for sure they do need to provide compensation, although I still can't understand how the client didn't - when reading the loan paperwork - see the figures involved in servicing the loan (surely these were provided???) and understand that the amounts involved did not represent either the value of their home or their income.

Maybe I'm quite misunderstanding this situation.

And, considering I will already be being accused of 'blaming the victims', I do have a concern that if Stormers (and Cassimatis) are able to take the view that the whole arrangement was sensible and conservative just because CBA are coming up with some dollars to save their reputation, these Storm clients will not be any wiser for the future and could therefore fall into similar traps all over again.


----------



## capt_thunderbolt (24 February 2010)

I caught the tail end of this interview when I was driving home today - I have not listened to it in full - thought it might be of interest.

http://blogs.abc.net.au/queensland/2010/02/storm-clients-compensation-offer.html?site=brisbane&program=612_drive

Cheers
Captain


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## DocK (25 February 2010)

Julia said:


> OK, fair comment.  But wasn't Storm supposed to be monitoring this situation?  Shouldn't it have been Storm who took responsibility for getting the client to come up with the extra cash or selling out at the appropriate time?
> My concern is that this mea culpa by the CBA seems to be letting Cassimatis off the hook.  Is that fair, DocK?




Of course storm *should* have been monitoring the situation, but that shouldn't let CGI off the hook if they also dropped the ball.  Should we adopt the attitude that if my FP is incompetent/dishonent then it's OK for my bank to be as well?  If I can't get compensation from Cassimatis then I shouldn't be entitled to it from another party also at some degree of fault?  Cassimatis will continue to be investigated by ASIC and no doubt will be pursued by creditors and ex-clients regardless of any payout made by CBA.  Don't lose sight of the fact that ex-stormers were also clients of CGI/CBA and were/are entitled to the same duty of care as any other of their clients, regardless of who referred them.  



> Quite true.  But my earlier point was that the agreement by CBA seems to assume clients would have probably come up with the extra cash and then maintained their positions.  If they had done this, they would have found their net wealth falling as did everyone else who didn't exit the falling market.




I don't see it that way at all.  The agreement by CBA assumes the exact opposite.  It is based on the supposition that clients should have recieved a margin call at 90% LVR and been sold out, in which case they would have been left with 10% of their original investment amount - hence the offer to compensate 90% of what 10% equity would have been at that time.  If the assumption was that clients would have met the call and stayed in, the offer should in fact be for a fair bit more as the market has improved markedly since margin calls would have/should have been made.



> My question went to how many Stormers would actually have exited at this stage, preserving their profits to date, rather than just letting their capital fall with the market.   I suspect not many.  That was my point and why I suggested it was fairly generous.




Irrelevant really, in view of above.  Who can say who would have exited and who would have stayed in?  Either way, they would have been given the choice to be sold out and retain 10% of their capital, or meet the margin call from other resources, and possibly another, and have benefitted from the eventual recovery from March 2009, as did every other sitter-and-holder.   Nobody is disputing that their capital would have declined if they had stayed in, and would still be less now than before the GFC, but most were in it for the very long term and if they opted to stay in would be looking at retaining their dividend income and regaining their capital over the following 5 - 10 years.  Instead they've been denied the option of riding it out and have been hit with CGT and the loss of an income stream from dividends.  The prevailing opinion these days seems to be that the market will eventually recover to the point where it once was or higher - a lot of ex-stormers were prepared to wait several years for that recovery if need be.  In any case, whether they would have met calls, been sold out, stayed for the duration etc is irrelevant to the main issue under dispute between CGI clients and CGI - who should have made margin calls, and at what LVR.  The amount of compensation has been calculated on the assumption that investments would have been liquidated to meet margin calls - and I'm sure many ex-clients will see this as far less than fair given the recovery that has taken place so far.  I guess it's near to impossible to know, given the gift of hindsight, who would have cashed out and who wouldn't have - so we have compensation calculated on an assumption of liquidation at the first margin call that would have been faced.  In reality it's impossible to know who would have been able to continue to meet interest payments from the dividend income they would have retained plus own resources, and who wouldn't have had any choice but to be sold out at 90%, so I guess the outcome is the only one-size-fits-all resolution that is fair.


----------



## DocK (25 February 2010)

> Agreed.   The account I read of the settlement was in today's "The Australian".  No longer have the paper but was rather surprised at the implication in the way the article was written that it was the CBA who inflated the property values and borrowers' incomes.
> Throughout this thread, no one has actually been able to say where this inflating of values occurred, and I guess most of us assumed it would have been by Cassimatis.
> 
> If that's wrong, and the bank has indeed exaggerated dollar amounts, then for sure they do need to provide compensation, although I still can't understand how the client didn't - when reading the loan paperwork - see the figures involved in servicing the loan (surely these were provided???) and understand that the amounts involved did not represent either the value of their home or their income.
> ...




I'm sure I posted about the valuation process at some time several months ago on this thread - can't really be bothered reading back through it to find it.  As to income figures - who would know what was used.  The only income figures I ever provided the CBA were for our original loan taken out a couple of years before the last "step".  I can only assume the bank used them, plus whatever info they accepted from storm itself???  As I wanted my loan approved at the time (naturally I now wish it had been declined) I didn't really care.  My gripe is not over whether I could afford a loan or not, I readily accept it was my decision to take on more debt, but it is over the valuation of my property used to secure extra debt - which I had no reason to suspect was not the CBA's usual conservative approach to valuations.  I was left with debt that almost equaled the value of my property - which would normally not be the case if an inspection had been carried out and a valuer used, rather than a figure plucked from a desktop system based on heaven-knows-what.  If I had been left with no option but to sell my home to repay debts (regardless of whose fault it was that I found myself in such a predicament) I would have been left with no equity in my home either - and this would have been due to my acceptance of the CBA's valuation of my home, which the CBA were happy to lend against.  I guess the question is whether clients had a right to expect valuations to be accurate, and whether the CBA had a duty of care to ensure that they weren't lending against inflated valuations carried out imprudently.  It would appear that an agreement has been reached that implies the valuation process used at the time was less than it should have been.  I'm sure some will say it was up to the borrower to ensure that their home was worth what the bank said it was worth - personally I didn't have the time or expertise to be a property valuer myself and would never have dreamed that a bank valuation would be anything but on the conservative side.  Again, with hindsight, should I have paid a registered valuer to make sure my banker knew its business? 

As to the issue of borrower's incomes, my personal view is if you take on the loan you should know whether you can afford it or not, but again it appears that the legal view is that the bank has a duty to ensure a borrower can afford what they've applied for.

For the record, I've never seen loan documents that include valuation and income details.  Valuations are often confidential to the lender, as they have carried out the valuation for their own purposes to ensure security of their loans at min 80% LVR, and unless arranged and paid for by the client are not the property of the client.  The client does, however, know that the bank will not lend more than 80% of the value of the property offered as security for the loan.  Income details are generally submitted on the loan application, which is held by the bank but is not included in the loan contracts and mortgage documents which the borrower signs.  I'd say it is not uncommon for updates to income to be given verbally once the original loan application has been taken.  Clients that obtained increases to their original loan over the years probably never signed another application, but merely submitted or verbally advised new income details.  This is my experience in any case.   
As these details were generally provided to a storm adviser, rather than directly to the bank, I guess we may never know if any embellishment occurred at either end.  But to answer your question, no - the client wouldn't see the income figures used by the bank when signing the paperwork for a loan.  Given the resolution agreed to by CBA, my own reading of it is that the CBA has acknowledged that usual lending guidelines may not have been applied to some lending to cba/storm clients.  If it is found that valuations are correct and income details support the loans granted, then no compensation will be forthcoming.  



> And, considering I will already be being accused of 'blaming the victims', I do have a concern that if Stormers (and Cassimatis) are able to take the view that the whole arrangement was sensible and conservative just because CBA are coming up with some dollars to save their reputation, these Storm clients will not be any wiser for the future and could therefore fall into similar traps all over again.




I really don't want to play the blame game all over again.  I cannot for the life of me imagine how any ex-stormer could possibly have avoided questioning the strategy (or more to the point the lack of strategy) used by storm over the past year or more.  To think that any of us will "take the view that just because the CBA are coming up with some dollars to save their reputation, therefore the whole arrangement was sensible" - is quite a stretch, and giving very little credit to the ability of people to learn from mistakes and history.  Even those who would do the same again would surely now admit that the level of gearing was far from the conservative level it was sold to them as.  To be concerned that people who have seen their hard-earned life savings decimated, faced losing their homes (or have already lost them), been the subject of numerous media stories, been involved in resolution processes, numerous bank interviews etc, yet would do exactly the same thing over again is probably a waste of your concern Julia.  I'm sure it's well-meant concern, and I don't mean to be condescending, but I'm also sure that most ex-stormers have spent enough sleepless nights worrying about their futures to have had second, third and fourth thoughts about the storm method, Cassimatis and their financial strategies going into the future.  I was no doubt too trusting, gullible and financially naive when I followed the advice I received from my storm adviser, but to have someone wonder whether I'd do it all again in the future is a bit insulting from my perspective.  I suppose I should only speak for myself, but I find it almost impossible to believe that the majority of ex-stormers haven't learnt anything at all from what we've been through.  To see any compensation paid by the CBA in restitution for their shortcomings in the whole sorry saga as an endorsement of the strategy would be clutching at straws imo, and no doubt will be exactly what EC & JC and their few diehard followers will do - and I don't think they warrant anyone's concern!


----------



## Judd (25 February 2010)

Yes, not the best, Dock.  However, a line from WH Auden's poem based on Breughel's "Fall of Icarus" springs to mind.



> and the expensive delicate ship that must have seen
> Something amazing, a boy falling out of the sky,
> had somewhere to get to and sailed calmly on.




And so shall it be.  A big deal to "Stormers" but to the rest of us...............


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## Julia (25 February 2010)

DocK said:


> I'm sure I posted about the valuation process at some time several months ago on this thread - can't really be bothered reading back through it to find it.  As to income figures - who would know what was used.  The only income figures I ever provided the CBA were for our original loan taken out a couple of years before the last "step".  I can only assume the bank used them, plus whatever info they accepted from storm itself???  As I wanted my loan approved at the time (naturally I now wish it had been declined) I didn't really care.  My gripe is not over whether I could afford a loan or not, I readily accept it was my decision to take on more debt, but it is over the valuation of my property used to secure extra debt - which I had no reason to suspect was not the CBA's usual conservative approach to valuations.  I was left with debt that almost equaled the value of my property - which would normally not be the case if an inspection had been carried out and a valuer used, rather than a figure plucked from a desktop system based on heaven-knows-what.  If I had been left with no option but to sell my home to repay debts (regardless of whose fault it was that I found myself in such a predicament) I would have been left with no equity in my home either - and this would have been due to my acceptance of the CBA's valuation of my home, which the CBA were happy to lend against.  I guess the question is whether clients had a right to expect valuations to be accurate, and whether the CBA had a duty of care to ensure that they weren't lending against inflated valuations carried out imprudently.  It would appear that an agreement has been reached that implies the valuation process used at the time was less than it should have been.  I'm sure some will say it was up to the borrower to ensure that their home was worth what the bank said it was worth



Well, obviously I am naive in imagining no borrower would engage in a loan when they had not seen the valuation attributed to the property by the lender or the income attributed to the borrower.




> I really don't want to play the blame game all over again.  I cannot for the life of me imagine how any ex-stormer could possibly have avoided questioning the strategy (or more to the point the lack of strategy) used by storm over the past year or more.  To think that any of us will "take the view that just because the CBA are coming up with some dollars to save their reputation, therefore the whole arrangement was sensible" - is quite a stretch, and giving very little credit to the ability of people to learn from mistakes and history.  Even those who would do the same again would surely now admit that the level of gearing was far from the conservative level it was sold to them as.



Clearly, you yourself would never do anything similar again.  My comment was not directed personally toward you, DocK.  I have, however, read many comments from Stormers who still believe there was nothing wrong with the double gearing strategy, and that their demise is entirely the fault of the banks.  That is what I was referring to and I stand by my comment.   

And let's remember that plenty of people have been done over by shonky advice or operators and have never received any compensation at all.

Some many years ago I had an investment with a solicitor's private mortgage scheme into which I put my then available capital.  ( I would never borrow against my home to invest into anything but this was money in the bank at a low interest rate.)
The mortgage investment interest rate was 2.5% higher than term deposit rates at the time, so not excessively higher and into the 'too good to be true' category.
The solicitor checked out.  He had been running this scheme for several years with no complaints or problems.
Full valuations were submitted to investors from a registered valuer, and the LVR did not exceed 60%.
I had friends who had been happily investing here for three years and had received the monthly interest on time, and the capital refunded at the completion of each project.  
On the basis of all the above, I sent off my money for investment into a specific project, the details of which I'd examined carefully.

All went well for some months, and then the interest payments stopped.
It pains me too much to describe the excuses offered etc from that point.

ASIC became involved and they appointed Worrells to investigate.
Worrells spun their investigation out over many months, selling the various properties at market value in the process.

It turned out that the registered valuations were inflated by more than 50% and much of the detail provided by the solicitor regarding the work being done on the properties was pure fantasy.

Who paid Worrells for their work?  Well, the investors, of course.
At the end, all the investors lost all their capital, and received none of the due interest payments, such were the charges from Worrells.

The solicitor and the valuer were duly prosecuted but that didn't bring any compensation to any investors, none of whom had been irresponsible, or reckless in any way.

So forgive my view that Stormers are being quite fortunate in receiving compensation from anyone.


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## Solly (25 February 2010)

*"Harsh words on Storm Financial compo"*

"A Smart Investing reader has reacted with seemingly harsh words to the Commonwealth Bank’s compensation scheme for Storm Financial clients who had taken large margin loans through the bank."

http://www.coolum-news.com.au/story/2010/02/25/harsh-words-storm-financial-compo/


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## Solly (25 February 2010)

*"Storm victims mull $200m offer"*

"Hundreds of Storm Financial victims are expected to reject a compensation offer worth up to $200 million."

More by Courtney Trenwith with Stuart Washington on;

http://www.brisbanetimes.com.au/business/storm-victims-mull-200m-offer-20100224-p1jw.html


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## Solly (25 February 2010)

*"CBA Storm admission ‘monumental’"*

"Storm Financial founder and former chief executive Emmanuel Cassimatis yesterday said Commonwealth Bank of Australia should be preparing to pay investors $2 billion compensation, 10 times initial estimates of its liability."

Read more by Duncan Hughes in the Australian Financial Review Feb 25 2010.


----------



## Solly (25 February 2010)

*"Payments show CBA to blame, claims Storm founder"*

"STORM Financial founder Emmanuel Cassimatis has declared that the Commonwealth Bank's decision to offer more than $200 million in compensation to his former clients proved the bank was responsible for the investment firm's collapse."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.com.au/news/nation/payments-show-cba-to-blame-claims-storm-founder/story-e6frg6nf-1225834085083


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## Julia (25 February 2010)

Solly said:


> *"Storm victims mull $200m offer"*
> 
> "Hundreds of Storm Financial victims are expected to reject a compensation offer worth up to $200 million."
> 
> ...




In that case, let them reject the offer and take it to the Courts.
Maybe after footing the bill for that, they will take a different view.


----------



## Solly (26 February 2010)

*"Class action over Storm Financial still brewing"*

"THE Commonwealth Bank may yet face a costly class action in the Federal Court by disgruntled Storm investors, despite a resolution scheme tipped to cost up to $300 million."

More by Peter Michael in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26774615-3102,00.html


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## Solly (26 February 2010)

*"Litigation firms circle banks over Storm
Legal cases in works"*

"Legal proceedings against a number of Australia's big banks linked to Storm Financial are in the pipeline."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8624.htm


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## Solly (26 February 2010)

*"Hope for Storm Financial investors"*

"AT the peak of the stock market a few years ago, Mark Peters' Storm Financial portfolio was worth up to $800,000.
Today, the Cairns store manager hopes compensation from the Commonwealth Bank will allow him to salvage something from a shattered dream."

More by David Sexton on cairns.com.au here;

http://www.cairns.com.au/article/2010/02/26/96065_local-news.html


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## Solly (26 February 2010)

*"CBA PAY DAY"*

"Former Storm Financial boss Emmanuel Cassimatis could yet make the BRW Rich 200 list."

From John Stensholt in The BRW.

http://www2.brw.com.au/viewer.aspx?ATL://1266273550253


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## Solly (26 February 2010)

Julia said:


> In that case, let them reject the offer and take it to the Courts.
> Maybe after footing the bill for that, they will take a different view.




Julia, I wonder if a company such as IMF could arrange funding if a class action does actually come to fruition.


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## Solly (26 February 2010)

Does anybody have any feedback, that they are willing to share, from the S&G meeting in Cairns last night?


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## pegasus (26 February 2010)

Julia said:


> In that case, let them reject the offer and take it to the Courts.
> Maybe after footing the bill for that, they will take a different view.




Julia, Perhaps reading the posts a little more clearly would make you realise that investors will not be footing the bill if there is a class action persued - litigation companies will take that up.  Litigation companies donts foot bills unless they believe a good case is at hand.


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## specialed (26 February 2010)

Julia said:


> Well, obviously I am naive in imagining no borrower would engage in a loan when they had not seen the valuation attributed to the property by the lender or the income attributed to the borrower.
> 
> 
> 
> ...




Julie,

This comment appears on face value to indicate that much of what seemed like a general animosity towards the storm clients (victims) by you is based more on the fact that you were unable to get compensation for your failed  investment decisions, rather then a genuine understanding of the role a number of the parties and in particular the role of the CBA played in this affair. 

The basis for the compensation is an admission  of some culpability in this affair. Further, as the compensation is based on 6 “test cases” bought before some highly respected legal experts, The decision to offer compensation is a reflection of the CBA's belief that the legal interpretation in these test cases is correct. This is after the CBA would have also gotten their own legal advice. Surely they therefore believe that if it were to go to court they risk losing substantially more than the current estimate of $ 300 million.  A few cases here and there will ultimately cost them a lot less then a class action involving 2000 odd people, should they lose.

I hope some do “take it to the courts”, and some have indicated they will be. Although there is a risk it may well be locked in  the legal system for some time I believe this needs to be tested in actual court, not just in a hypothetical one....

However, I doubt even this will change your opinion, that unfortunately appears to be quite dogmatic and not always based on an objective analysis...


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## Julia (26 February 2010)

specialed said:


> Julie,



It's Julia.



> This comment appears on face value to indicate that much of what seemed like a general animosity towards the storm clients (victims) by you is based more on the fact that you were unable to get compensation for your failed  investment decisions, rather then a genuine understanding of the role a number of the parties and in particular the role of the CBA played in this affair.



I have no 'animosity' toward any Storm clients.    Just disbelief that so many people would engage in such risky investing at such a late stage in their lives, e.g. double gearing.
Much has been lamented about the possibility of people losing their homes.
Well, why put them at risk in the first place?  Not to mention then borrowing further against that loan to buy more shares!!

If the banks have been less than professional in their lending criteria, then of course they should make amends.

I was simply making the point that there are thousands of other people over decades who, despite not taking the obvious risks that Storm clients took, have been victims of criminal behaviour, and who did not have the benefit of a huge media interest to spur class action and taxpayer funded investigations.

It just seems to me that there is one remedy for those involved in the big failures, and none for those whose loss has been only as part of a much smaller operation.


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## Solly (27 February 2010)

*"The Liquidation of Storm Financial "*

"Salutory lessons for investors.
Tucker & Cowen Solicitors have been recently engaged by the liquidators of Storm Financial Limited, one of the largest financial services companies in Australia. "

http://www.prwire.com.au/pr/16762/the-liquidation-of-storm-financial


----------



## Solly (27 February 2010)

*"CBA to outline Storm Financial compo"*

"The Commonwealth Bank will meet former Storm Financial clients in Townsville in north Queensland on Saturday, to explain the details of its compensation deal."

As reported by Niki Lyons on the ABC;

http://www.abc.net.au/news/stories/2010/02/26/2830750.htm


----------



## Solly (27 February 2010)

*"THE DISTILLERY: Imperfect Storm"*

Commentary By David Llewellyn-Smith on Business Spectator

http://www.businessspectator.com.au/bs.nsf/Article/CBA-Storm-Financial-Warrnambool-Cheese-and-Butter--pd20100224-2XTYC


----------



## Solly (27 February 2010)

*Storm investors offered compensation *

ABC 7pm TV News QLD  Wednesday, February 24, 2010.

http://www.abc.net.au/news/video/2010/02/24/2829463.htm


----------



## Solly (27 February 2010)

*" 'Truth is coming out', Storm founders claim"*

"STORM Financial founders Emmanuel and Julie Cassimatis are still living with the hope they will be absolved of blame in the collapse of the financial planning empire and the ruin of its former clients."

More by Tony Raggatt in the Townsville Bulletin here;

(Also contains clarification of the University of Western Sydney "Master of Applied Finance")

http://www.townsvillebulletin.com.au/article/2010/02/26/118435_news.html


----------



## Solly (27 February 2010)

*"Fiery Storm resolution meeting tipped"*

"LAWYERS delivering the detail of a Commonwealth Bank resolution scheme offer to devastated Storm Financial clients may find they get a cool reception today."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/02/27/118735_news.html


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## specialed (27 February 2010)

Julia said:


> It's Julia.
> 
> Apologies !!
> 
> ...




Alot of this media attention has come about due to the tireless efforts of SICAG hounding polilies and seeking legal advice. Without that I suspect this would be alot more focussed on Manny etc. You are right however that the people power behind larger failures inevitably means they recieve larger coverage.

Further, the major players are less able to dismiss the victims concerns.  Whether you agree with effectiveness of the Ripoll inquiry in highlighting and fixing broader issues, no one can dismiss the role it played in bringing the CBA to account. Infact, if a little more pressure was put on Westpac, ANZ and BOQ to appear and harder questions asked of them, then maybe the lawyers would not be needing to "go after them now".

What this country really needs i a broader inquiry into the banking industry. I suspect that we would find as many anti- competitive behaviours as are hidden in the oil industry...

I do wonder if with our population will ever be large enough to allow for true competition...any thoughts ???


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## pegasus (27 February 2010)

Julia said:


> It's Julia.
> 
> 
> I have no 'animosity' toward any Storm clients.    Just disbelief that so many people would engage in such risky investing at such a late stage in their lives, e.g. double gearing.
> ...




Julia, You make all of your comments based on the benefit of hind sight.  One thing I have learnt over time is hind sight creates a new reality and opinions.  Being in a situation is different to reflecting back and forming an outside opinion.


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## Jifromoz (27 February 2010)

pegasus said:


> Julia, You make all of your comments based on the benefit of hind sight.  One thing I have learnt over time is hind sight creates a new reality and opinions.  Being in a situation is different to reflecting back and forming an outside opinion.




 Pegasus, In my opinion, Julia has generally spoken from her personal experience and has learnt from it. I think MC and his so called "Qualified" staff might have used a lot of hindsight in his plans and ignored any "Bad" history. 

Anyway, whilst the Banks may have done some wrong and they should and will be held accountable, all of the Storm customers who were destroyed by double gearing were in a world of hurt well before the margin calls came. My In-laws were at 100% (including their BOQ loan) in July 2008 when the B@#*ards at Storm financial Rocky (and you know who you are) did another SOAA To increase debt and get a bit more commision). Yes I know.... JULY 2008. They followed the Storm request to Cash out at the end of October 2008 when the were left with $1.157M in and $1.406M in debt. Now to add more hurt to the equation (AND also in my opinion Macquarie has something to answer for) the shares were then put into a Cash Management Account earning 3 or 4%. This is to cover the interest accruing on the loans at 8-9%. Look at the debts, do the maths. The In-laws were going backwards..and no-one cared. The Margin lender wasn't he had $ for $ security and it would take some time to chew through the small surplus available. What about the interest accruing on the BOQ loan... sorry we all forgot about that. Whan I got involved in mid December it took until mid January to get the Cash into the Margin Loan from the SAME Bank. They didn't care there was no rush. Macquarie, I haven't started yet but it will be soon I'm just waiting to see what ASIC are going to do. BOQ have come some way to helping.....but the fact remains that they lent a couple of pensioners a lot of money that they could NEVER afford. Now as any prudent lender would know (I doubt if there were any at their branch in Townsville) a pension of around $400pw is insufficient to meet the repayments on a $200K loan and actually live. In any case they should have been contacted which they were'nt. Once again I'm waiting on ASIC. 

Now if any storm financial supporters can tell me how my in-laws were going to get back into the market when it eventually turned around then let me know. The silence will be deafening I think. 

Anyway, whilst their has been a lot of blame going around I can only hope that the blow torch soon turns onto Mr & Mrs C and their bunch of aiders and abetters.  I know my in-laws are hurting in ways that I can only imagine but they are proud people and I know they will get through it. We help all we can, but damn it, it hurts and I'm not sure what to do now but I will continue to fight the good fight though.

Anyway, sorry for the rant but this forum has been a great help at times. 

Solly, were would we be without your updates.. thanks mate. 

GG, you started this thread *before* it all went to crap. Some people forget that...I don't...Thanks also. 

To everyone else... Keep the debate going, try not to get personal ...

I do think, in the end, that the truth will come out.... I just hope it is in time for my family and all of the others affected by this.
Cheers & good luck
Jifromoz
 ps I liked The Angels in my earlier days so this is apt for me


----------



## Julia (27 February 2010)

specialed said:


> .any thoughts ???



Just that it would be much appreciated if you learned to use the QUOTE Tags properly so that it didn't appear that I was the one offering apologies.
With thanks.



pegasus said:


> Julia, You make all of your comments based on the benefit of hind sight.  One thing I have learnt over time is hind sight creates a new reality and opinions.  Being in a situation is different to reflecting back and forming an outside opinion.



I don't wish to be rude, Pegasus, but that's complete nonsense.

If any of the Stormers had - before engaging in Storm's 'plan' - asked me if it was a good idea to (in or close to retirement) mortgage their homes to buy shares, especially when they didn't intend to check what valuation had been put on these homes, or to check what income had been stated as available to service the loan, I would have without question have suggested they stay away.

Moreover, if they had further suggested they were then going to once again borrow for a margin loan on those shares bought with borrowed money, I'd have been in a state of disbelief.

So hindsight has nothing to do with it.  

The one fortunate fact is that with hindsight most of the Stormers now realise how risky the 'strategy' was and thankfully will not repeat the process.

There will always be the Cassimatises out there, just waiting to take advantage of naivete and blind trust.  To imagine that such 'advisers' are primarily motivated by the welfare of their clients is to attribute to them a decency and humanity foreign to their conniving natures.


----------



## Garpal Gumnut (27 February 2010)

thanks JFO

The truth will out.

Manny will go for litigation and it will all come out then, not as he hopes though imho.

Awaiting ASIC as well, mob of muppets usually, but may come good on this one. They need a win.

gg


----------



## Julia (27 February 2010)

Solly said:


> *"The Liquidation of Storm Financial "*
> 
> "Salutory lessons for investors.
> Tucker & Cowen Solicitors have been recently engaged by the liquidators of Storm Financial Limited, one of the largest financial services companies in Australia. "
> ...



Thanks for that link, Solly.  Most interesting, especially this extract with respect to the need for margin calls:


> Salutory lessons for investors
> 
> Tucker & Cowen Solicitors have been recently engaged by the liquidators of Storm Financial Limited, one of the largest financial services companies in Australia.
> 
> ...






Jifromoz said:


> Now if any storm financial supporters can tell me how my in-laws were going to get back into the market when it eventually turned around then let me know. The silence will be deafening I think.
> 
> Anyway, whilst their has been a lot of blame going around I can only hope that the blow torch soon turns onto Mr & Mrs C and their bunch of aiders and abetters.  I know my in-laws are hurting in ways that I can only imagine but they are proud people and I know they will get through it. We help all we can, but damn it, it hurts and I'm not sure what to do now but I will continue to fight the good fight though.



Jifromoz, that's just a dreadful story.   I'm so glad to see your raising the need for the focus to turn to the Cassimatises.   I'm so far astonished by the few Stormers (or others) who have attributed an appropriate proportion of blame to them.   I'm no apologist for any bank, but it seems that the banks have been the focus of all the anger simply because they have the capacity to pay, where the so called advisers may appear not to.

(I'd be very surprised, however, if said advisers had not long ago planned for their own personal future, regardless of the demise of their clients.)


----------



## bunyip (27 February 2010)

specialed said:


> Julie,
> 
> This comment appears on face value to indicate that much of what seemed like a general animosity towards the storm clients (victims) by you is based more on the fact that you were unable to get compensation for your failed  investment decisions, rather then a genuine understanding of the role a number of the parties and in particular the role of the CBA played in this affair.
> 
> ...



First point - show enough respect for Julia to address her by her correct name.

Second point - Far from showing animosity towards ex Storm clients, Julia has in fact shown considerable empathy and compassion towards them on various occasions, and has offered some very helpful advice. If you'd read through all her posts, you'd know this yourself without me needing to point it out to you.

But it's not your style to get your facts straight before opening your mouth....you have a track record on this thread of speaking out without first activating the thought process.
If anyone has consistently shown animosity towards others on this thread, it's you - one of your posts has already been removed by forum management because of your completely unjustified personal attack on another member.

Julia is well within her rights to express the opinion that a majority of Stormers bear a significant part of the responsibility for the mess they find themselves in. Anyone with the power to think clearly will agree with her. At no time has she suggested that 100% of the blame lies with the clients themselves. She's been fair minded enough to share the blame with the other parties involved - the banks and Storm Financial itself.
She is expressing a balanced and objective viewpoint, which is her right. Her views make a lot more sense than some of the ill-considered views that you've expressed on here at times.
It's absurd of you to accuse her of animosity towards Stormers just because she points out that they employed reckless borrowing practices including dangerous levels of gearing, and consequently should not be entitled to massive compensation payouts. 

Disagree with her all you want, but leave the personal accusations out of it.


----------



## DocK (27 February 2010)

Deja vu anyone?


----------



## specialed (27 February 2010)

Julia said:


> Just that it would be much appreciated if you learned to use the QUOTE Tags properly so that it didn't appear that I was the one offering apologies.
> With thanks.
> 
> 
> ...





WOW, are you serious ?


----------



## Solly (27 February 2010)

Jifromoz, no probs mate hope the links help out. 

I believe the more information that is out there, will hopefully assist to get to the root cause of what really happened in this event. 

There are many inputs to this saga, the challenge is reassembling the true sequence and determining the actual role the participants played.

I believe a satisfactory remedy for all those impacted will take great determination, planning, patience, persistence and fortitude.


----------



## specialed (27 February 2010)

Julia said:


> So forgive my view that Stormers are being quite fortunate in receiving compensation from anyone.






specialed said:


> Julie,
> 
> This comment appears on face value to indicate that much of what seemed like a general animosity towards the storm clients (victims) by you is based more on the fact that you were unable to get compensation for your failed  investment decisions, rather then a genuine understanding of the role a number of the parties and in particular the role of the CBA played in this affair.






bunyip said:


> First point - show enough respect for Julia to address her by her correct name.
> 
> 
> It's absurd of you to accuse her of animosity towards Stormers just because she points out that they employed reckless borrowing practices including dangerous levels of gearing, and consequently should not be entitled to massive compensation payouts.
> ...




Agreed, I should have been more carefull with my typing and spelt her name correctly. Also it appears that I also have alot to learn about multiquote.

Julia did not state that stormers were not entitled to massive compensation payouts. As quoted above, she stated they are fortunate to recieve a payout from anyone. 

The basis for the pay out is not restricted to the levels of grearing the customer had, but Im sure is in part a reflection of the poor banking practices that enabled such a high level of gearing to be taken by some who were in no position to support it, and with little understanding of what they were doing.  As we are aware there a plenty of stormers who were not highly geared at all. Even these with very low levels of gearing will still recieve payouts as the payout is based on a range of factors.

I agree, Julie is welcome to her opinion and so am I. I clearly stated a personal comment where I FEEL she has shown an amimosity towards storm clients seeking compensation, or more specifically a frustration with the fact that they are recieving payouts where she could not. Further, it was Julia who drew the link between her not getting compensated in seemingly small collapse versus those in larger collapses who do seek out and recieve compensation..

Finally, I didnt know I had a comment withdrawn by the moderator. It surprises me that I did not receive an email so at least I know when I crossed a line. Can you tell me what specifically I wrote that was removed ?


----------



## pegasus (27 February 2010)

Julia said:


> Just that it would be much appreciated if you learned to use the QUOTE Tags properly so that it didn't appear that I was the one offering apologies.
> With thanks.
> 
> 
> ...




Your definition of "nonsense" is not the one I hold.  

Human beings are full of thier own judgment on circumstances they know very little about.  They wrap this judgement around the percieved facts and make it thier reality.


----------



## Garpal Gumnut (27 February 2010)

specialed said:


> Agreed, I should have been more carefull with my typing and spelt her name correctly. Also it appears that I also have alot to learn about multiquote.
> 
> Julia did not state that stormers were not entitled to massive compensation payouts. As quoted above, she stated they are fortunate to recieve a payout from anyone.
> 
> ...




specialed,

You are a very annoying person, spelling someone's name persistently wrong.

It shows a certain lack of respect, manners and is a reflection on your upbringing, education or environment.

You do not deserve to be a rich Aussiestock person and your misfortune with Storm is to me not a surprise.

Are you a Financial Adviser?

gg


----------



## specialed (27 February 2010)

Garpal Gumnut said:


> specialed,
> 
> You are a very annoying person, spelling someone's name persistently wrong.
> 
> ...





I pride myself on my ability to annoy...it is equalled only by the annoyance I feel reading the comments of those who presume to understand storm investors, their financial understanding, their ability to meet margin calls, their understanding of double gearing etc etc, based solely, or largely on what has been written in this forum by a very small percentage of Storm investors. Whilst it is obvious the large number of contributers to this forum, the number of storm contributors, as a percentage of the total number os storm investors caught up in this mess is very small.

My upbringing, education and environment, both past and present is of little concern to anyone, however now that you have bought it up; Is one that I am proud of and would be the envy of most. Thankyou for your concern. 

As stated time and time again…I have had no misfortune with storm…quite the opposite, I do however know of the devastation it has caused both financially and emotionally to others. Thankfully it has also shown to me the power of the human spirit and demonstrated tine and time again the noble character of those who have been affected.

An no, whilst annoying, I am definitely no financial planner, or accountant of lawyer for that matter…..


----------



## Julia (27 February 2010)

specialed said:


> Agreed, I should have been more carefull with my typing and spelt her name correctly. Also it appears that I also have alot to learn about multiquote.






> I agree, Julie is welcome to her opinion






specialed said:


> I pride myself on my ability to annoy



Obviously.  Hence your determination to use my name incorrectly again.
Pretty sad, really.
NB.  careful is spelt with one 'l'.  Not two.




specialed said:


> WOW, are you serious ?




This above comment is made in apparent response to your combining two of my earlier completely unrelated comments in the one quote as below.
They were responses to yourself and later to Pegasus on quite different topics.
What is the matter with you that you are so determined to be a troublemaker that you will attempt to combine the two unrelated remarks  into one quote, and then make the utterly irrelevant comment "WOW, are you serious?"

Yes, I have been.  But from now on I have better uses of my time than to indulge your petty behaviour.


----------



## Solly (28 February 2010)

*"Storm Financial compensation scheme rolls out"*

"STORM Financial investors will start receiving compensation offers in the mail this week following a series of meetings over the weekend advising clients on the resolution scheme with the Commonwealth Bank."

More by Mitch Gaynor and Nathan Paull in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26782708-3122,00.html


----------



## Solly (28 February 2010)

*"No joy for old faithful of Colonial"*

"FUND manager Colonial First State is battling to orchestrate an orderly wind-down of its mortgage trust business as it emerges that an estimated 17,000 elderly pensioners are being told to wait four years to have their money returned."

"Class action lawyers Slater & Gordon have been contacted by Colonial clients and are reviewing the situation."

More by James Kirby in The Age.

http://www.theage.com.au/business/no-joy-for-old-faithful-of-colonial-20100227-pa6c.html

Maybe S&G's Storm experience will be of benefit.


----------



## Solly (28 February 2010)

*"Former Storm clients talkin' 'bout a resolution"*

"ABOUT 500 Townsville-based Storm financial victims heard from lawyers at Rydges South Bank yesterday, who outlined a Commonwealth Bank resolution scheme offer designed to save clients drawn-out court battles."

More by Nathan Paull in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/02/27/118785_news.html


----------



## bunyip (28 February 2010)

specialed said:


> Finally, I didnt know I had a comment withdrawn by the moderator. It surprises me that I did not receive an email so at least I know when I crossed a line. Can you tell me what specifically I wrote that was removed ?




That's the problem with your kind - you never have the gumption to realise when you're 'crossing the line'. 
You didn't have a comment removed, you had an entire post removed. Yes, I could tell you what it was, but I won't - do your own detective work if you wish to find out what was removed and why.

Talking of 'crossing the line' - some of your recent posts have also crossed the line. I'd tread very carefully from now on if I were you, otherwise you just might find yourself looking for another forum to join.


----------



## Solly (28 February 2010)

It will be interesting to see the reaction to the S&G meetings at Scarborough today.

I suggest the tone will be similar to those held in Cairns & Townsville.

It would be refreshing if a Stormer could give us a first hand account.


----------



## Steve Borden (28 February 2010)

Solly said:


> It will be interesting to see the reaction to the S&G meetings at Scarborough today.
> 
> I suggest the tone will be similar to those held in Cairns & Townsville.
> 
> It would be refreshing if a Stormer could give us a first hand account.




Solly

For those of us who weren't there, what was the tone like in Cairns and Townsville?


----------



## Solly (28 February 2010)

Steve Borden said:


> Solly
> 
> For those of us who weren't there, what was the tone like in Cairns and Townsville?




Steve, I believe that not everybody expressed satisfaction, I am eager to read the report in tomorrow's Townsville Bulletin.


----------



## Smiley (28 February 2010)

I attended the meeting in Townsville and found the S & G presentation to be balanced and logical.  
It may not be what people want to hear but the settlements appear to address the margin loans and the home loans in a way that is legally reasonable.  No one will be put out of nor lose their home and the legal basis behind the approach was well explained.
Now whether or not people want to accept the individual offers is up to them.
Of course the meeting was sobering but don't know what people expect.
A long drawn out court battle will not yield more I believe, except if ASIC has success some time in future years there may be more compensation forthcoming.
I am happy to move on and enjoy life.


----------



## Julia (28 February 2010)

Smiley, thank you for account of the meeting.

You have a great attitude.  Congratulations.  I don't think anyone underestimates how difficult it has been for any of the Stormers.

Best wishes for a financial recovery.  You're already halfway there with your decision to move on.


----------



## Solly (1 March 2010)

*"Storm meeting – it's not over yet"*

"DESPITE an offer now on the table, many Storm Financial clients are not happy with the deal struck between the Commonwealth Bank (CBA) and law firm Slater and Gordon on behalf of about 2000 victims earlier last week."

More by Nathan Paull in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/03/01/118965_news.html


----------



## Quincy (1 March 2010)

Here's a link to the Storm website when Storm Financial was still operating (I think someone else may have posted this link in the early stages of this thread).

http://web.archive.org/web/20071028114029/http://www.stormfinancial.com.au/


It may hold some information that could be of interest to some people. Others may prefer not to see it again (apologies to those people).


----------



## bunyip (1 March 2010)

Smiley said:


> I attended the meeting in Townsville and found the S & G presentation to be balanced and logical.
> It may not be what people want to hear but the settlements appear to address the margin loans and the home loans in a way that is legally reasonable.  No one will be put out of nor lose their home and the legal basis behind the approach was well explained.
> Now whether or not people want to accept the individual offers is up to them.
> Of course the meeting was sobering but don't know what people expect.
> ...




Smiley

Once again you've shown yourself to be a voice of common sense and reason among the Stormers on this thread. I  admire you for being positive and optimistic about the future, despite your difficulties due to the Storm situation.

You may be interested to know that your 'never say die' attitude inspired me to overcome my own difficulties recently when I was diagnosed with leukaemia a few weeks before Christmas. In my efforts to psych myself up to beat my illness, I thought of the people I know who have overcome their problems by being positive in the face of adversity. You came immediately to mind -  I thought of you and other positive people when I was undergoing treatment, and told myself I had a fighting chance of recovering my health if I stayed positive and optimistic.
I've beaten my illness - my latest tests came back clear. I'm grateful to the oncologist and the medical staff and to the advances in medical science. But I'm also grateful to you and others like you who inspired me to get on top of things. My very sincere thanks to you.

Cheers and all the very best for your future.
Bunyip


----------



## Smiley (1 March 2010)

Bunyip, So glad to hear that you are feeling better and thank you sincerely for your words.
I knew a man who overcame amazing challenges in his life and lived life fully and enjoyed so much, despite major adversities.  He was like a father figure to me and taught me a lot about life and savouring things in my daily experience and being positive made the difference.  He was also a realist and would say things like trust in God but lock your car.
One needs to keep financial loss in perspective and I have worked to educate myself and know a lot more about financial matters than I did in 2008 - this helps.
I used to work in health education and attitude and taking positive steps - e.g. exercise and doing good things for yourself make such a difference.
My wish is that people who have been with Storm take control of their finances and find a way to move forward.


----------



## Solly (1 March 2010)

"Margin lending has taken a battering from the global financial crisis and the collapse of Storm Financial. Kate Kachor and Vishal Teckchandani take a look at how the main players are faring and what new lending regulations mean for the industry."

The reign of the kingpins
IFA Cover Story

http://www.investordaily.com.au/cps/rde/xchg/id/style/8632.htm


----------



## Solly (2 March 2010)

Quincy said:


> Here's a link to the Storm website when Storm Financial was still operating (I think someone else may have posted this link in the early stages of this thread).
> 
> http://web.archive.org/web/20071028114029/http://www.stormfinancial.com.au/
> 
> ...




Thanks Quincy, I clicked on the 'INSIDE STORM', 'our team', 'advisers' path, quite a gallery.

I wonder where these advisers are now and how many are in the same predicament as the ex-clients ?


----------



## Solly (3 March 2010)

*"Storm investors told to be cautious"*

"Lawyers representing about 2000 former investors in collapsed Storm Financial have warned against claims that recent court decisions would favour their claims."

Read more by Duncan Hughes in the Australian Financial Review of Mar 3, 2010.


----------



## Solly (3 March 2010)

*"Cassimatis offers clients new legal option
 Secures Goodridge lawyers"
*
Storm Financial's co-founder has struck a new deal that offers former clients a new legal option to recover lost monies.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8659.htm


----------



## Solly (3 March 2010)

*"CBA’s offer to Storm clients expected soon"*

"Former Storm Financial clients could receive compensation offers as early as this week, after a private group meeting on Sunday gave details of the Commonwealth Bank Resolution Scheme."

More by Alyce Valentine in The Redcliffe and Bayside Herald here;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/cba-s-offer-to-storm-clients-expected-soon/


----------



## Solly (4 March 2010)

*"Deal `short-changes Storm investors'"*

"A LITIGATION specialist is hosting public meetings with former Storm Financial investors this week to urge them not to accept the Commonwealth Bank's current $200 million-plus settlement deal, claiming that they are legally entitled to much more."

More by Sara Rich in the Australian here;

http://www.theaustralian.com.au/news/nation/deal-short-changes-storm-investors/story-e6frg6nf-1225836721225


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## Ironhalo (4 March 2010)

G'day guys, long time no see.

Well, well,well look what just appeared in my inbox from Emmanuel Cassimatis himself! Wow!

3rd March 2010


Dear Mr Ironhalo (hehe evidently not my real name!)

I write to you as a concerned friend (bwahahaha, a friend who stood on his hands and did nothing while my investment which was not in margin call, got sold down at a loss...without even a phonecall), who shares a common problem. We are all painfully aware of the events of the last year.

I have no doubt that the past year has been an awful time for you and I greatly sympathise. The past year has also been an awful time for us as well. (Oh my bleeding heart, hiding in the mansion and checking the overseas bank balances on the INternet must have been heartbreaking) We ask you not to believe everything you have read in the press.

The situation is that you have lost (well more correctly, that your company and advice lost) a great deal of money. We at Storm believed in the advice that we gave you. Our own personal wealth was similarly invested and destroyed. (but not before you withdrew most of it and gave yourself a $2 million kicker right?)

It would be easy to believe the media however, I ask you to understand that the Banks are well resourced opponents who have slick public relations departments.

Some of the press have vilified and demonised us. It is our position that the Commonwealth Bank and its subsidiaries have been the source of much of the false information that has been published. Unfortunately the newspapers are often more interested in a band wagon headline than they are in the truth. (Umm actually the banks have been vilified just as badly in the press, at least one of their executives admitted fault...which is more then can be said for some.)

To date we have been outmanoeuvred in the press by the Commonwealth Bank. (Oh noes!)

For ourselves we have lost faith in the popular press to accurately or carefully report the true position. We do believe that the truth will eventually come out through court proceedings. (yes, yes it will. And you'll be doing time)

With the above in mind, we have spent a great deal of our own personal money on a court case against the Banks for the truth to come out and for proper compensation to be paid both to ourselves and you. (Emphasis on ourselves)

You may be aware that on 12 February 2010 a breakthrough occurred, possibly handing you a silver bullet. (A silver bullet, used in popular mythology to kill monsters and the make believe) Justice Steven Rares of the Federal Court heard and determined the case of Goodridge .v. Macquarie Bank Limited. I enclose for your information a copy of the Financial Review article dated 20 February 2010. Mr Goodridge challenged the forced sale on two bases. Firstly that the bank had no right to make the call and secondly, that the actions of the Banks was unconscionable and a breach of the Australian Securities and Investment Commission Act.

It should be noted that the case did not take 5 years.

Prior to the judgement, Mr Goodridge was being called upon by his Margin Lender to pay to them approximately $80,000. Instead, the Court Judgment required the Banks to replace approximately $3.3 million worth of Mr Goodridge's shares. Quite a turnaround!

I personally have spent a great deal of money in progressing a case. (Whoa I thought you were broke!) Having read Mr Goodridge's case, I approached his legal team and informed them of the facts and circumstances surrounding our position and that of ex clients such as you. (And by you, I mean the Nth Queensland families of note that I gave 'loans' to when the whole thing collapsed that are no doubt gunning for me mainly). 

These meetings have resulted in some very good news.

Mr Goodridge is the only person to have run a Margin Loan case in Australia arising out of the global financial crisis. Mr Goodridge's case took only approximately 7 months from start to finish. Mr Goodridge succeeded completely against both Macquarie Bank and the subsidiary of Bendigo and Adelaide Bank - Leveraged Equities Limited.

It is comforting to know that the only directly relevant case that has been decided has been a winning case for the customer and not the Banks.

After explaining your (lol sure you did, at length no doubt!) predicament and our predicament, we received an offer that I am very pleased to be able to pass on to you.

Mr Goodridge and his legal team are prepared to briefly review your facts and circumstances and advise, initially free of charge (here we go), whether you appear to have a viable claim for damages or restitution or whether you would be better off accepting whatever settlement the Banks may currently be offering.

We further discussed the options that any ex client may have if they have a viable claim for damages or restitution. We are acutely aware that many cannot afford expensive litigation as we have been worn down financially and emotionally. There is no point in being advised that your claim for damages is likely to compensate you far in excess of the currently proposed Commonwealth Bank compensation when you are in no position to pursue that claim.

In appropriate cases, Mr Goodridge's lawyers have indicated that they are prepared to enter into genuine "No Win No Pay" fee agreements with clients. This avoids the necessity of paying the premium demanded by litigation funds.

I am not suggesting that you make any rash decision. Simply, Mr Goodridge and his legal team are prepared to provide you with a second opinion as to your current options.

The email address for Mr Firth is info@Firths.com.au

The contact telephone number for Stephen Firth of Firths, The Compensation Lawyers telephone number is 02 9261 5800 or 1800 631 888.

I believe that the offer made by the Commonwealth Bank is intended to pay you a few cents in the dollar of the damages they will be liable for if sued. I believe the offer from the CBA, negotiated by Slater and Gordon, is much more favourable to the CBA than you. I should say that am not aware of the basis on which the offer was negotiated; but I cannot understand why the offer is so low, when compared to the principles explained by the Judge in the Goodridge case.

For many of you your choices are:-

1. Accept the Commonwealth Bank's offer; or

2. Obtain a second opinion and thereafter accept or reject the Commonwealth Banks offer.

We know that emotionally the last twelve months have been very difficult for all of us. I encourage you to obtain the best advice before making decisions which may affect you forever.

I leave you with these final thoughts. Currently a firm of lawyers may be promoting to you a settlement of a few cents in the dollar. The question is why?

- Is it that they do not believe that they would win a case on your behalf?

- Why is the Commonwealth Bank offering a settlement? Does the Commonwealth Bank know that they will lose?

- Should you not at least obtain a second opinion? Especially from a team of eminent lawyers who have already won on ALL counts a case which appears to be pivotal to any action which you may prosecute against the bank.

(And our fourth question Manny, after a year or more of saying nothing, or even ringing your clients to apologise, do you suddenly give a **** about my position? Could it be you are getting a commission based on how many of your clients you can get to sign on to your buddies at this law firm? Why all of a sudden has your old client list leapt to your attention?)

Whilst acknowledging your profound distress, I sincerely urge you to consider this generous offer extended to you by Mr Goodridge and his Team. I feel your exhaustion and understand any desire you may have to find some closure and move on, but please, given you have endured this long, find the strength to inform yourself before accepting an offer which may be only a small fraction of what you may be entitled to.

Yours faithfully


Emmanuel Cassimatis.

_I want to clarify that the letter is not intended for clients of Russell and Company. The letter is primarily intended for people who will receive an offer from Slater & Gordon, who have negotiated an offer from the CBA, which will be referred to those people (sooner or later).

If you are a client of Russell and Company, you need have no concerns about the recent publicity from Slater & Gordon. Russell and Company have their own test case ready to go - for the full amount of compensation, not the pittance that the CBA have negotiated with Slater & Gordon. Russell and Company remain your solicitors, and they have my full confidence, and the full confidence of everyone on the Client Group Committee._

There you go team.....thoughts? Gave me a laugh, I'm crafting an appropriate response.


----------



## DocK (4 March 2010)

Yes, Ironhalo, I nearly fell off my chair when I read the same email.  I forwarded it to my husband at work so give him a little light reading on his lunchbreak - along with a few pithy comments of my own....

He emailed this "fake response" back to me:

Dear Mr Cassimatis,

Thankyou for your kind offer to help fight the evil banks, rest assured we will give it careful consideration and in the event that we decide to proceed with this action, we will forward to you the appropriate blank forms to be signed by yourself  and returned to us for completion at a later date. We are also pleased to inform you that your house has been revalued and has increased in value by 20%. This means that you can now borrow against the increased equity in your property and return to us the management fees paid to you, for which little or no service was received. I have also taken the liberty of enrolling you in a financial planning course  titled "Investment strategies for a Bear Market" , it contains vital information for sharemarket investors that you were obviously not privy to  prior to 2008.  You may also like to attend  a bird-watching course being held at the same location "how to spot a big, ugly black swan amongst the white ones".

Perhaps the routing of finances to  personal jets and other extravagances may have been better placed in developing more robust reporting software and analytical systems that may have provided warnings of imminent danger to yourselves and your clients.

regards

Mr Not Happy Jan

I'm quite tempted to send it....


----------



## Ironhalo (4 March 2010)

I had this response:

Dear Emmanuel,

Thank you for getting back to me. I must admit, I thought I must have done something to offend you, as it has been so long since we caught up. Well Oct the 8th 2008 to be exact, where I believe our last correspondence involved you extolling to me the virtue of selling down my Storm investments to cover a potential margin call situation. Advice that retrospectively proved useless, as no one at Storm actioned it, causing me to lose tens of thousands of dollars. But what are a few zeros between friends eh? Bear with me here, I don't have the luxury to employ a PR consultant, so some of my language might be a little 'un-PC'.

After reviewing your generous offer, I'm going to have to go on my gut instinct and recommend you eat a bag of phallus's. Your sudden interest in the Storm client list would lead me to believe that your intentions are far from altruistic. Can you honestly tell me that: 
1. You aren't garnering some commission from this law firm to rattle up some business by trawling through your old client list, and/or,
2. You're not (again) doing this to cover your own posterior?

Sorry Emmanuel, but at no stage have you uttered the word sorry to me or my family yet for your company's actions. As our benificent leader Kevin Rudd tells us 'the buck stops with me.' Where did the buck stop for you? Oh I forget, it didn't, and hence that was nine-tenths of the problem. Our family paid you thousands in combined fees, and in return you lost us hundreds of thousands, by trying to protect your own profit margins. Hell you and your staff were even of the belief that we should have tried to increase our margin loans (and risk) even as our wealth was flittering away! To top this injustice off, we then found to our chagrin that you and your wife Julie tried to award yourself (by using a dodgy promotion of a family member to the Storm board) a few million as a kicker, and awarded close associates millions in 'under the table loans'! Is this the act of someone who is looking out for their clients interests? 

As for the CBA/Colonial, while I have no doubt that they are not acting in my best interests, at least they had the temerity to ring me up, apologise, and ask how they could remedy the situation, and fix the errors they incurred. Which is more than can be said for some. My mother was one of the test cases and has been awarded a six-figure settlement. It would be fair to say that this is just. 

Frankly, I find your missive offensive to all five senses. Justice is being done, and legal/karmic justice will be served upon you. In conclusion, I'd rather inject human faeces into my own eyeballs then follow any further advice commended by you. 

Yours sincerely,
Ironhalo

Lol should I send it?


----------



## DocK (4 March 2010)

Ironhalo said:


> I had this response:
> 
> 
> Lol should I send it?




I'd actually love to be able to read some of the responses he's sure to get.  Quite strange that they were unable to supply information from storm's computer records to Worrells, yet have managed to retain their ex-clients contact info - I guess their memories have improved quite a lot since the inquiry when Manny couldn't even remember if he was a CEO or not

I have absolutely no doubt that his sudden "concern" for the people he has let down so badly stems purely from his own self-interest.  The more people he can convince to join his court action, the greater chance he has of an out-of-court settlement to make it go away.  Strength in numbers and all that.  This attempt to "use" ex-clients stinks the same as the "please sign this Deed of Arrangement" email we got about a year ago - which would have allowed them to retain their 2mill divvie and control of storm.  ASIC quashed that - I wonder if there's any way he could be fined or prevented from sending unsolicited emails to people who are no longer his clients in the future?


----------



## Smiley (4 March 2010)

Ironhalo - do send it and be sure and copy in ASIC and SICAG forum
I have been trying to think of appropriate responses to Manny  -note we not have his email address and one for Julie too . . .


----------



## Solly (4 March 2010)

*"Storm Financial/CBA resolution scheme questioned"*

"Law firm Levitt Robinson has raised doubts about the adequacy of the compensation arrangements being negotiated between former Storm Financial clients and the Commonwealth Bank of Australia (CBA) through rival law firm Slater & Gordon."

More by Lucinda Beaman in Money Management

http://www.moneymanagement.com.au/article/Storm-Financial-CBA-resolution-scheme-questioned/512717.aspx


----------



## Solly (4 March 2010)

CQ, CQ, CQ, GG.
I'm interested to hear your views on the current reported developments.


----------



## Solly (4 March 2010)

DocK said:


> I'd actually love to be able to read some of the responses he's sure to get.  Quite strange that they were unable to supply information from storm's computer records to Worrells, yet have managed to retain their ex-clients contact info - I guess their memories have improved quite a lot since the inquiry when Manny couldn't even remember if he was a CEO or not
> 
> I have absolutely no doubt that his sudden "concern" for the people he has let down so badly stems purely from his own self-interest.  The more people he can convince to join his court action, the greater chance he has of an out-of-court settlement to make it go away.  Strength in numbers and all that.  This attempt to "use" ex-clients stinks the same as the "please sign this Deed of Arrangement" email we got about a year ago - which would have allowed them to retain their 2mill divvie and control of storm.  ASIC quashed that - I wonder if there's any way he could be fined or prevented from sending unsolicited emails to people who are no longer his clients in the future?




DocK, I too find it interesting that Storm's client email address list is still in the possession of the former principals. 
Who actually owns this data ?

I checked out http://cassimatis.com.au/ to see if there was a public update. It appears to still be unchanged.


----------



## Garpal Gumnut (4 March 2010)

Solly said:


> CQ, CQ, CQ, GG.
> I'm interested to hear your views on the current reported developments.




Sierra Oscar Lima Lima Yankee, do you copy?

Golf Golf is undercover on this one.

Will report when beginning of end begins. This is the end of the beginning. A new drama unfolds.

Golf Golf.


----------



## Jifromoz (4 March 2010)

Hi everyone,

My father in law has just sent me an email. The same content as Ironhalo's.  He is amazed how he had the gall to send it and wants to know how he got his email address, there are only a few who know it and he will think about it over the weekend. We should be able to work out who gave it out....Watch this space. There is an email address in it for Mr Cassimatis.

ps If anyone would like the email of Mr Cassimatis please PM me.

Cheers

Jifromoz


----------



## Julia (4 March 2010)

Ironhalo:  well worded response.  Can't see any reason why you would not send it.

Good suggestion to forward a copy to ASIC and anyone else who should be kept informed as to Mr Cassimatis's actions, including the reference to his apparent recovery of memory.

My concern would be that there may still be ex Storm clients whose vulnerability and naivete is unchanged from when they were sucked into Storm in the first place, and that these people will similarly be sucked into whatever plan Manny has going at present.

I don't know whether he's allowed to contact ex clients when his company is in liquidation, but think it would be good to ensure the authorities know he is emailing people in this way.


----------



## Garpal Gumnut (4 March 2010)

Julia said:


> Ironhalo:  well worded response.  Can't see any reason why you would not send it.
> 
> Good suggestion to forward a copy to ASIC and anyone else who should be kept informed as to Mr Cassimatis's actions, including the reference to his apparent recovery of memory.
> 
> ...




The only comments I will make at this moment in the debacle that is Storm are as follows.

People in the Finance Industry when undone have no shame. They are as my Auntie Gertie says "common". They value money and goods above decency and respect.

Bunnies and muppets will continue to be shonked by Financial Planners, on the way up, and on the way down. There are at this moment people of limited assets lining up to be again fleeced.

gg


----------



## GumbyLearner (5 March 2010)

Garpal Gumnut said:


> The only comments I will make at this moment in the debacle that is Storm are as follows.
> 
> People in the Finance Industry when undone have no shame. They are as my Auntie Gertie says "common".
> gg





My Nan and your Aunt Gertie would be of the same minds. My grandmother and her siblings have never borrowed on any of their real estate assets. Now they are rich.

WHY??

Zero leverage since the 1950's. Total rental profits in Sydney and Melbourne.


----------



## Solly (5 March 2010)

*"Storm boss blasts bank offer"*

"The architect of Storm Financial, Emmanuel Cassimatis, has written to his former clients ''as a concerned friend'', criticising a settlement with Commonwealth Bank and promoting a class-action lawyer."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/storm-boss-blasts-bank-offer-20100304-plwo.html


----------



## Soft Dough (5 March 2010)

Julia said:


> Ironhalo:  well worded response.  Can't see any reason why you would not send it.




First of all, it sickens me that the sleazy worm has surfaced again, and that as we all know it is for more personal gain, perhaps CEREBRUS could clarify?.   I just hope that the ex-brainwashed have come to their senses and do not follow the pied piper again.

Ironhalo, I wouldn't send it as it would break your anonymity on ASF.  

You never know the effects of something like that in the future.

You didn't have a PR team and lawyers peruse your letter before it was sent. EC did.

If you want to decline, I think there are better ways, with the kind of shonkster EC is, he may be able to use anything in the future.


----------



## Ironhalo (5 March 2010)

Good advice, I might hold off on my hate-filled rant 

Will be interesting to see what unravels out of all this. I think it's amusing thta we haven't heard anything from him, and now finally once it seems his clients are going to be compensated (and he isn't), he feels the need to get us all 'on-side' and rallying to his cause; as he knows full well that once the Storm clients are sated, he won't have any left to assist him.

He can rot.


----------



## stung (5 March 2010)

My husband and I had a two day interview with a barrister from ASIC. I look forward to seeing what comes of it.


----------



## Julia (5 March 2010)

stung said:


> My husband and I had a two day interview with a barrister from ASIC. I look forward to seeing what comes of it.



Are you able to say what sense you got from the two days about where ASIC is likely to go with this?


----------



## Solly (6 March 2010)

Jifromoz said:


> Hi everyone,
> 
> My father in law has just sent me an email. The same content as Ironhalo's.  He is amazed how he had the gall to send it and wants to know how he got his email address, there are only a few who know it and he will think about it over the weekend. We should be able to work out who gave it out....Watch this space. There is an email address in it for Mr Cassimatis.
> 
> ...




Jifromoz, I believe as well as the emails that were sent , physical letters have also been posted out.
I find this interesting and I wonder if an attempt was made to contact all ex-clients. 
I wonder what database is being used.


----------



## Quincy (6 March 2010)

DocK said:


> I wonder if there's any way he could be fined or prevented from sending unsolicited emails to people who are no longer his clients in the future?






Jifromoz said:


> Hi everyone,
> 
> My father in law has just sent me an email. The same content as Ironhalo's.  He is amazed how he had the gall to send it and wants to know how he got his email address, there are only a few who know it and he will think about it over the weekend. We should be able to work out who gave it out....Watch this space.
> 
> Jifromoz





*Privacy Act*

The intended effect of the Privacy Act in its current form is to preclude spammers from harvesting email addresses without the consent of their owners.  There must in general be consent for the sender to use the subject E-mail address.

Definitions of "spam" usually include the aspects that email is unsolicited and sent in bulk.

Even if a person has consented to the use of his/her email address for a particular purpose, that does not in itself provide consent for it to be used for other purposes.


----------



## bunyip (6 March 2010)

It's heartening to see that you Stormers still have a 'concerned friend' in Manny!

I can fully understand you being livid at the oily tone of his letter, and the fact that as usual he's putting all the blame on someone else while admitting none himself.

Once you get over your initial outrage though, I wonder how many of you will follow up on his suggestion and look into getting a different law firm to take on your case.
The outcome in the Goodridge case must surely tempt some of you into at least looking into it?

One nice thought is that if Manny wins a substantial amount of compensation for himself, a Storm client or three will likely sue him with a view to taking most of his compensation money, due to his failure to deliver the promises he made on his website about monitoring and managing his clients' investments.


----------



## Grey Ghost (6 March 2010)

bunyip said:


> Once you get over your initial outrage though, I wonder how many of you will follow up on his suggestion and look into getting a different law firm to take on your case.
> The outcome in the Goodridge case must surely tempt some of you into at least looking into it?




Whilst on the face of it that idea has some merit bunyip if you are suggesting stormers should go to this legal firm manny is recommending what I think would really put peoples noses out of joint is that manny (who has only ever looked after his own interests at the expense of everybody else's) has almost certainly got an arrangement in place where he would get a kickback/spotters fee call it what you like for every person who signed up with this crowd.  Naturally that fee would have to be paid from somwhere ie. any payout the person MAY eventually recieve (naturally it would be well disguised as some sort of legal fee/expense).  Thus he would continue to line his pockets at his victims expense whilst pretending to be helping them.  




bunyip said:


> One nice thought is that if Manny wins a substantial amount of compensation for himself, a Storm client or three will likely sue him with a view to taking most of his compensation money, due to his failure to deliver the promises he made on his website about monitoring and managing his clients' investments.




I think anyone who sued him would be throwing good money after bad.  I am sure any compensation he happened to get would either be sent off shore immediately or put into some trust or similar entity well out of reach of any Storm client or government regulator.  

Naturally everyone will make their own minds up its just my two cents worth. 

G Ghst


----------



## pegasus (6 March 2010)

Solly said:


> Jifromoz, I believe as well as the emails that were sent , physical letters have also been posted out.
> I find this interesting and I wonder if an attempt was made to contact all ex-clients.
> I wonder what database is being used.




The IT Manager at ex-Storm (Allan MacDonald) made a submission to the Senate Enquiry saying EC ordered a complete working copy of the Storm database system called 'phormula'...I assume that would have everyone's financial and contact details in it.

Also, the email EC sent is to do with the legal team Goodridge used and NOT Goodridge himself.  Goodridge is helping the Levitt Robinson group with their case against all the lenders - I have heard from good sources there is a strong case against the Banks (margin lenders in particular) and some precedence set in the Goodridge case.


----------



## Solly (6 March 2010)

pegasus said:


> The IT Manager at ex-Storm (Allan MacDonald) made a submission to the Senate Enquiry saying EC ordered a complete working copy of the Storm database system called 'phormula'...I assume that would have everyone's financial and contact details in it.
> 
> Also, the email EC sent is to do with the legal team Goodridge used and NOT Goodridge himself.  Goodridge is helping the Levitt Robinson group with their case against all the lenders - I have heard from good sources there is a strong case against the Banks (margin lenders in particular) and some precedence set in the Goodridge case.





pegasus, if a strong case against the banks does exist, I question why aren't S&G pursuing this course? Although I believe that the circumstances of Mr Goodridge’s case does not exactly mirror the circumstances of the Stormers, I question why are there now two legal firms appearing to support the possibility of  a better remedy for the Stormers than following the current S&G Proposal Framework.


----------



## pegasus (6 March 2010)

Solly said:


> pegasus, if a strong case against the banks does exist, I question why aren't S&G pursuing this course? Although I believe that the circumstances of Mr Goodridge’s case does not exactly mirror the circumstances of the Stormers, I question why are there now two legal firms appearing to support the possibility of  a better remedy for the Stormers than following the current S&G Proposal Framework.




Because Scattini never looked at litigation against the Bank (CBA is all he is dealing with)...he wanted his name in lights and an easy $10mil to 'negotiate' a deal that is worse than the actual margin contract the Bank and clients agreed to.  He was given mountains of evidence to launch a case but did not use it or decide to go down the letigious route.  I heard testimony from Shaun McArdle about taped evidence he offered Scattini a number of times and he didn't want it.     

Instead he decided to hold secret meetings with the people who were paying him (CBA), take no direction from his clients (ex-Stormers), and let the CBA set the rules on how the whole game would be played!!!  He then let the Bank call his clients without legal representation and find out everything they could about them before coming to an agreement. 

Solly, I am sure you have been around long enough to know who pays the piper calls the tune - S&G are totally compromised, took the easy way out and I believe clients are starting to realise it.  What else could you expect from an Ambulance chaser?

Point is case...in the Goodridge case it was determined that '*may* give a margin call' (written in contract) constitutes '*must* give a margin call'.  The lender (CGI) cannot obligate another to give the call (that is, Storm should have done it).  It was also determined the margin call must be done in writing (phone call will not suffice).  In the Storm case, none of this occurred as it should have as determined in the Goodridge case.  

The argument that "many people didn't have the funds for a margin call anyway" does not hold water because there was no margin call given.  If the investor was given a margin call in writing and the correct time to fix it and _then_ couldn't, the Bank can sell secured assets to remedy the situation...but clients were not give the opportunity and that is where the contract has been breached by the Bank.  "Didn't have the funds anyway" is fallacious...in my slang, 'too bad you're stuffed anyway take what you are given'.  

I don't believe there has been precedent until the Goodridge case (could be wrong)...but this is all very pertinant to the Storm case.


----------



## Solly (6 March 2010)

pegasus said:


> Because Scattini never looked at litigation against the Bank (CBA is all he is dealing with)...he wanted his name in lights and an easy $10mil to 'negotiate' a deal that is worse than the actual margin contract the Bank and clients agreed to.  He was given mountains of evidence to launch a case but did not use it or decide to go down the letigious route.  I heard testimony from Shaun McArdle about taped evidence he offered Scattini a number of times and he didn't want it.
> 
> Instead he decided to hold secret meetings with the people who were paying him (CBA), take no direction from his clients (ex-Stormers), and let the CBA set the rules on how the whole game would be played!!!  He then let the Bank call his clients without legal representation and find out everything they could about them before coming to an agreement.
> 
> ...




pegasus, thanks for your views on this and putting a different angle on the events. This issue of the margin calls or lack thereof has always been a point that I would like more clarity.


----------



## pegasus (6 March 2010)

Solly said:


> pegasus, thanks for your views on this and putting a different angle on the events. This issue of the margin calls or lack thereof has always been a point that I would like more clarity.




Solly, my pleasure...the whole sorry saga is getting very interesting from a legal point of view and I believe that is where you will get clarity on margin call obligations.  Personally I believe the best outcome will be achieved if contract law is upheld and that will only happen in court.  This is far from over.


----------



## Garpal Gumnut (6 March 2010)

*Re: Ignorance*



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!




This is a post from late 2008.

It may be worthwhile for us all to read back through the thread from day 1, as there are many gems therein.

gg


----------



## Julia (6 March 2010)

pegasus said:


> Point is case...in the Goodridge case it was determined that '*may* give a margin call' (written in contract) constitutes '*must* give a margin call'.  The lender (CGI) cannot obligate another to give the call (that is, Storm should have done it).  It was also determined the margin call must be done in writing (phone call will not suffice).  In the Storm case, none of this occurred as it should have as determined in the Goodridge case.



This assertion is in direct contradiction to advice from Tucker and Cowen, Solicitors for the liquidators, as I posted a couple of pages ago following a link supplied by Solly:


> 4. Terms and conditions need to be read carefully. Most of Storm’s clients had margin loans through the Commonwealth Bank of Australia. The Commonwealth Bank’s terms and conditions provide the bank is not actually obliged to make any margin calls at all, and it is up to clients to monitor their own investments. Therefore, as always, be aware of the fine print.


----------



## Solly (6 March 2010)

Julia said:


> This assertion is in direct contradiction to advice from Tucker and Cowen, Solicitors for the liquidators, as I posted a couple of pages ago following a link supplied by Solly:




Julia, from the current T&Cs at 

https://www.colonialgearedinvestments.com.au/adviser/docs/forms/CML_TCs.pdf

Notice of Margin Call
4.3 (a) You agree that we may provide notice of margin call by any
or all of the following ways to you or your Client Adviser:
• In writing (including by fax, email or other electronic
means)
• Orally, including by telephone
• Updating the Colonial Geared Investments website.
(b) It is your obligation to keep your or your Client Adviser’s
contact details up to date.
4.4 You are responsible for:
(a) monitoring your portfolio and determining when your loan is
subject to a margin call; and
(b) being in a position to receive any communications from us
in relation to this clause and to act within the time limits
specified in this clause; and
(c) ensuring that a margin call does not occur.
4.5 If you do not meet a margin call:
(a) we may (but are not obliged to) sell any, or all of the security
supporting your loan and reduce the amount owing.
(b) we may, if we consider it necessary or prudent to do so,
sell more security than the minimum required to satisfy the
margin call.
(c) we may sell security without first contacting you, any margin
call contact, or agent you may have nominated.
(d) we may sell security in the order we choose.


----------



## bunyip (7 March 2010)

Grey Ghost said:


> Whilst on the face of it that idea has some merit bunyip if you are suggesting stormers should go to this legal firm manny is recommending what I think would really put peoples noses out of joint is that manny (who has only ever looked after his own interests at the expense of everybody else's) has almost certainly got an arrangement in place where he would get a kickback/spotters fee call it what you like for every person who signed up with this crowd.  Naturally that fee would have to be paid from somwhere ie. any payout the person MAY eventually recieve (naturally it would be well disguised as some sort of legal fee/expense).  Thus he would continue to line his pockets at his victims expense whilst pretending to be helping them.
> 
> 
> 
> ...




No mate, I'm not suggesting that Stormers should contact the law firm recommended by Cassamatis. I'm just curious to know if any of them will. But I think I already know the answer.

Like you, I strongly suspect that he has some arrangement with that law firm to line his own pockets. He's hardly recommending them from the kindness of his heart or out of concern for his ex clients. He was clearly lacking concern for his clients when he took no defensive action to save their investments during the bear market, so I really can't see him having any concern for them now. His concern is for himself.


----------



## pegasus (7 March 2010)

Julia said:


> This assertion is in direct contradiction to advice from Tucker and Cowen, Solicitors for the liquidators, as I posted a couple of pages ago following a link supplied by Solly:




Firstly, it is not an assertion - it is a determination (ruling) by the Federal Court of Australia which then sets precedence for following cases of a similar nature;

Secondly, T&C can give any advice they like - doesn't mean it is right - and definitely not after being tested in court as per the ruling referred to.  Not withstanding an Appeal and it being overturned of course;  

Thirdly, thanks to Solly posting the Terms for a margin call, shows the Bank writes these things to suit themselves (some would say legally ambiguous) but a determined person with a combative nature and good legal advice holds some hope the little people of the World may get some justice.  The Goodridge case tested and determined most of the points in the Terms as invalid.  That is, CGI can't oblige others (Storm) to make the call or look after it themselves (Stormers) off the website.  The call MUST be in writing giving the appropriate time by the lender (CBA/CGI).  If I was the CBA/CGI I would be worrying.


----------



## Solly (7 March 2010)

*"Bias, lockout claims spark CBA scheme concerns
Lawyer speaks out"*

Litigation firm slams Storm Financial resolution scheme process, as Ripoll weighs in.

More by Kate Kachor at Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8683.htm


----------



## Garpal Gumnut (7 March 2010)

Solly said:


> Julia, from the current T&Cs at
> 
> https://www.colonialgearedinvestments.com.au/adviser/docs/forms/CML_TCs.pdf
> 
> ...




As usual Solly you have identified the nuts. Manny is running with his advice quite strongly and the show ain't over until the fat lady sings.

Are you still on for the pool level units at Lennons, for the criminal trial in 2011? I believe its called Chifleys or some other orbation of a name now.

gg


----------



## Solly (7 March 2010)

Garpal Gumnut said:


> As usual Solly you have identified the nuts. Manny is running with his advice quite strongly and the show ain't over until the fat lady sings.
> 
> Are you still on for the pool level units at Lennons, for the criminal trial in 2011? I believe its called Chifleys or some other orbation of a name now.
> 
> gg




gg, sounds like there are some quite entertaining times ahead, I hope my current program of works allows me some free time in '11.

By concidence I've had an overnighter in BNE and I'm on my netbook having a coffee in mall just down from Lennons atm. I'll check out what their bookings are like for next year before I go back to my room to watch The Insiders.

The hotel looks like this these days...


----------



## Julia (7 March 2010)

From today's "Sunday Mail"



> The husband and wife founders of Storm Financial continue to live in the lap of luxury while former investors face an agonising decision whether to accept a compensation deal or risk everything to get back their portfolios.
> 
> Storm founder Emmanual Cassimatis claimed to have lost everything when the company went into liquidation in January last year.
> 
> ...


----------



## Grey Ghost (7 March 2010)

bunyip said:


> No mate, I'm not suggesting that Stormers should contact the law firm recommended by Cassamatis. I'm just curious to know if any of them will. But I think I already know the answer.




Sorry mate I got the wrong end of the stick on that one.  Hopefully stormers will give it a wide berth though.
I'd be interested to know what SICAG'S take on manny's offer is.



bunyip said:


> Like you, I strongly suspect that he has some arrangement with that law firm to line his own pockets. He's hardly recommending them from the kindness of his heart or out of concern for his ex clients. He was clearly lacking concern for his clients when he took no defensive action to save their investments during the bear market, so I really can't see him having any concern for them now. His concern is for himself.




Couldn't agree more.

G Ghst


----------



## Solly (9 March 2010)

*"Lawyer meets with former Storm Financial clients"*

"MORE than 250 former Storm Financial clients attended a meeting at the Redcliffe RSL on Saturday to hear more about their legal options for the Commonwealth Bank’s Resolution Scheme."

More by Katie Duncan in the Redcliffe and Bayside Herald here;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/lawyer-meet-with-former-storm-financial-clients/


----------



## Solly (10 March 2010)

*"Investors sues Macquarie Bank over Storm"*

"A multimillion dollar claim has been filed against Macquarie Bank by a former Storm Financial client who had his stock portfolio sold out from underneath him."

Read more by Marsha Jacobs in the Australian Financial Review Mar 10, 2010.


----------



## Solly (11 March 2010)

*"Storm loser sues Macquarie for millions"*

"A FORMER Sydney-based investor of Storm Financial has filed a claim for millions of dollars in damages against his one-time margin lender Macquarie Bank in what could become a torrent of similar claims by other former Storm clients."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/03/11/121485_news.html


----------



## bunyip (11 March 2010)

*Re: Ignorance*

_Originally Posted by pennywise  
Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. I, as a client of Storm Financial will be with them all the way.
Here's to a better economic year ahead!_




Garpal Gumnut said:


> This is a post from late 2008.
> 
> 
> It may be worthwhile for us all to read back through the thread from day 1, as there are many gems therein.
> ...




Presumably Pennywise has by now changed his/her opinion about Storm Financial being _'nothing less than fantastic'!_


----------



## Solly (12 March 2010)

*"Αυστραλία: Ομογενείς επενδυτές έχασαν τις αποταμιεύσεις τους λόγω πτώχευσης ομογενειακής εταιρίας"*

"Και ομογενείς επενδυτές συμπεριλαμβάνονται στον κατάλογο αυτών που έχασαν χρήματα λόγω της πτώχευσης της ομογενειακής εταιρείας παροχής οικονομικών υπηρεσιών "Storm Financial Organisation", που άνηκε στον Μανώλη και την Ιουλία Κασσιμάτη."

Here's some international coverage of the Storm saga from;
http://omogeneia.ana-mpa.gr/press.php?id=9210

If you have some spare time run the link through Babel Fish or Google for an entertaining translation.


----------



## Garpal Gumnut (12 March 2010)

Solly said:


> *"Αυστραλία: Ομογενείς επενδυτές έχασαν τις αποταμιεύσεις τους λόγω πτώχευσης ομογενειακής εταιρίας"*
> 
> "Και ομογενείς επενδυτές συμπεριλαμβάνονται στον κατάλογο αυτών που έχασαν χρήματα λόγω της πτώχευσης της ομογενειακής εταιρείας παροχής οικονομικών υπηρεσιών "Storm Financial Organisation", που άνηκε στον Μανώλη και την Ιουλία Κασσιμάτη."
> 
> ...




Η κατοχή είναι εννέα δέκατα του νόμου. 

gg


----------



## shibby (14 March 2010)

pegasus said:


> Solly, my pleasure...the whole sorry saga is getting very interesting from a legal point of view and I believe that is where you will get clarity on margin call obligations.  Personally I believe the best outcome will be achieved if contract law is upheld and that will only happen in court.  This is far from over.




Does anyone know how long Macquarie Bank has to appeal?
Is there are stanard length of time for that appeal to take place?
Basically how many years can Macquarie keep it going in the courts? 
Thank you.


----------



## Solly (15 March 2010)

*"Time for ASIC to stop being an undertaker and step into the world of the living"*

"A group of victims of unscrupulous practitioners is soliciting support to run a multi-million dollar class action against the corporate regulator ASIC."

More by Adele Ferguson in the SMH here;

http://www.smh.com.au/business/time-for-asic-to-stop-being-an-undertaker-and-step-into-the-world-of-the-living-20100314-q650.html


----------



## Solly (16 March 2010)

I saw Mr Upton in Adelaide St yesterday, that reminds me,
I wonder when Mr D'Aloisio will table ASIC's report into the collapse of Storm ?

I'm eagerly awaiting this, it will be an interesting read.


----------



## Solly (16 March 2010)

I'm wondering where this saga will finally end. 

Look at the inputs, Sir Ralph & EC are still players, then throw in a a mix of disaffected ex-clients, ex-staff, both Storm & CBA, decimated penisioners, ex-business people, angry coppers, multiple law firms, opinions & inquiries.... 

This is far from over.

The games have just begun.


----------



## Solly (17 March 2010)

*"Sold short after the storm"*

"No one likes having to litigate to get redress. It's expensive and time-consuming. Mediation is usually preferable, or so I used to think. But with billions of retiree dollars lost in the past few years after exposure to poor practices or worse, the emergence of class-action lawyers in Australia has been a positive development."

More by John Collett In the SMH here;

http://www.smh.com.au/news/business/money/planning/sold-short-after-the-storm/2010/03/16/1268501456343.html


----------



## Solly (18 March 2010)

*"Storm compensation deal accepted"*

"More than 150 former clients of the failed investment firm Storm Financial have accepted a compensation deal from the Commonwealth Bank."

More on the ABC here;

http://www.abc.net.au/news/stories/2010/03/18/2849830.htm?section=business


----------



## Solly (19 March 2010)

*"Storm clients accept CBA offer
Margin loan offers made"*

"A large portion of former Storm Financial _margin loan clients_ have agreed to accept compensation from the CBA."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8782.htm


----------



## Solly (19 March 2010)

*"Storm Financial victims say yes to CBA cash offers"*

"OFFERS of compensation from the Commonwealth Bank to clients of the failed Storm Financial group have been accepted by 150 victims, with only one rejection so far.

About 350 of the 2100 clients who participated in the bank's resolution scheme over the past year have received offers based on their individual cases, with most clients expected to receive an offer by the end of May."

More by Sara Rich in The Australian here;

http://www.theaustralian.com.au/business/storm-financial-victims-say-yes-to-cba-cash-offers/story-e6frg8zx-1225842538067


----------



## Solly (19 March 2010)

*"ASIC favours Storm settlement over litigation"*

The Australian Securities and Investments Commission is in confidential discussions with those involved in the collapse of Queensland-based Storm Financial, to determine whether a settlement can be reached.

More from the ABC by Rebecca Hyam here;

http://www.abc.net.au/news/stories/2010/03/19/2850487.htm


----------



## Solly (19 March 2010)

*"ASIC moves for Storm compensation
Regulator completes first phase of investigation"*

"The corporate regulator has also suggested Storm clients seek an extension of time from the CBA within which to accept any offer to enable them to assess the results of discussions which ASIC is proposing."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/8788.htm


----------



## Solly (19 March 2010)

*10-56AD ASIC moves to next phase of Storm investor compensation*
From 
http://asic.gov.au/ASIC/asic.nsf/byHeadline/10-56AD%20ASIC%20moves%20to%20next%20phase%20of%20Storm%20investor%20compensation?opendocument

Friday 19 March 2010

ASIC today announced that it had completed a major phase of its investigation into the affairs of Storm Financial Limited (Storm).

In relation to recovery of compensation for investors, ASIC will now move into the next phase (until the end of May 2010) of entering into confidential discussions with the individuals and entities which have been the subject of its investigations to see if a commercial resolution can be reached which will be acceptable to ASIC and which ASIC would be prepared to recommend to investors.

ASIC considers a commercial resolution, if it can be achieved, will be preferable to protracted litigation. However, in the event that during this period a commercial resolution is not or cannot be reached with particular individuals or entities ASIC will make decisions on compensation actions it will then launch in relation to those individuals and entities for the benefit of investors.

ASIC will meet with representatives of Storm investors and Slater & Gordon (which represents many Storm investors) to outline what it is doing and will, as far as reasonably possible (within the important confidential constraints of the discussions which ASIC proposes), keep them informed. ASIC will also during this period release a dedicated website for Storm investors both to keep them informed and to collect additional information which ASIC may need in relation to compensation. There will be a paper back-up for those investors who may not have internet access. 

In relation to offers made to Storm investors as part of the Commonwealth Bank of Australia (CBA) Storm Resolution Scheme, ASIC considers that each Storm investor needs to decide for themselves, with the benefit of legal advice, whether or not to accept the offer. ASIC suggests that, amongst other things, a Storm investor obtains legal advice about whether any agreement reached between a Storm investor and CBA will allow the Storm investor to participate in, or have the benefit of, any compensation arrangements (which any ASIC action may secure). As investors will know, CBA agreed to such a ‘carve out’ some time ago to enable its customers to benefit from any subsequent ASIC action.

As an alternative, Storm investors should seek an extension of time from the CBA within which to accept any offer to enable them to assess the results of discussions which ASIC is proposing.

As this matter remains operational, ASIC will not be making further public comment until confidential discussions have been completed. ASIC’s investigations into Storm covers, in addition to compensation, other enforcement actions and its investigations will continue.

Thank you Tony & Chris


----------



## GumbyLearner (19 March 2010)

Solly said:


> *10-56AD ASIC moves to next phase of Storm investor compensation*
> From
> http://asic.gov.au/ASIC/asic.nsf/byHeadline/10-56AD%20ASIC%20moves%20to%20next%20phase%20of%20Storm%20investor%20compensation?opendocument
> 
> ...




Do you consider further litigation as an option Solly? Don't won't to make the claim that if I were in your shoes etc etc...? Is it an option for the ripped-off? :sheep:


----------



## Solly (19 March 2010)

*"ASIC BACK STORM PAYOUT"
*
"Ron Jelich lost more than fifteen million dollars following the collapse of Storm Financial.

"Smack bang in the middle of the eyes and you know, bankruptcy is still a potential, very real possibility."

He was not only the second largest creditor, but a director in the now defunked company."

More on WIN TV here;

http://www.wintv.com.au/far_north_queensland/news/item/25609


----------



## Solly (19 March 2010)

GumbyLearner said:


> Do you consider further litigation as an option Solly? Don't won't to make the claim that if I were in your shoes etc etc...? Is it an option for the ripped-off? :sheep:




GL, I am just a mere ninja in the shadows....but in answer to your question...lt's an option I would seek direction on from a suitably qualified beak..


----------



## Solly (20 March 2010)

*"ASIC tells banks to move fast on reaching agreements with devastated Storm Financial customers"*

"THE corporate watchdog has warned banks to broker deals by May with investors decimated in the Storm Financial debacle or suffer potential legal action."

More by Liam Walsh in The Courier Mail here;

http://www.couriermail.com.au/money/asic-tells-banks-to-move-fast-on-reaching-agreements-with-devastated-storm-financial-customers/story-e6freqpf-1225843017808


----------



## Solly (20 March 2010)

*"ASIC pushes for Storm Financial recompense"*

"THE corporate regulator is seeking compensation for thousands of Storm Financial investors who lost a total of about $100 million when the financial planner collapsed last year and says it will take the matter to court if a commercial resolution is not reached."

More by Sara Rich in The Australian here;

http://www.theaustralian.com.au/business/asic-pushes-for-storm-financial-recompense/story-e6frg8zx-1225842999426


----------



## Solly (20 March 2010)

*"ASIC gets ready to broker Storm deal"*

"ASIC yesterday said it would become the compensation-seeker of last resort for former investors in collapsed financial advisor Storm Financial who cannot reach agreement with an individual or entity."

Read more my Duncan Hall in the AFR of March 20, 2010


----------



## Solly (20 March 2010)

I checked out EC's & SICAG's webpages today.

No change on EC's page but I found an interesting link on http://sicag.info/

On their homepage is a link to a copy of Ross Goodridge’s letter to the SICAG committee regarding his landmark win over Macquarie Bank.

I'm now going to have a close read of this letter while have I have a flat white at the coffee shop at the mariner. The section headed "Breaches" has caught my attention. I'm hoping an old wig mate of mine will be having his morning constitutional around Pier A and he can run his eye over it as well.


----------



## Solly (22 March 2010)

GumbyLearner said:


> Do you consider further litigation as an option Solly? Don't won't to make the claim that if I were in your shoes etc etc...? Is it an option for the ripped-off? :sheep:




GL, what are your thoughts on Ross Goodridge’s letter ?

Where he is of the opinion that there has been a breach regarding the, 
"The tortious obligation to not convert property" is interesting.

It appears to me the actions and process regarding the margins calls and sell-down are pivotal.


----------



## Solly (22 March 2010)

*"Former banker pushes the envelope"*

"The thought of hundreds - possibly thousands - of litigants joining cause to battle the big banks for compensation for their losses from the Storm Financial debacle has put a skip in the step of many learned counsel."

Read more in the AFR Mar 20, 2010.


----------



## Solly (23 March 2010)

*"Widespread division over CBA offer: SICAG
Further calls for extension, external legal advice"*

"There are growing fears ex-Storm Financial clients are accepting CBA compensation offers out of desperation and duress."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/8805.htm


----------



## Monario (24 March 2010)

I chanced upon this letter from EC online. Just posting it as I dont believe I have seen it posted here before..

http://www.theage.com.au/ed_docs/response_to_Michael_West_article.pdf

The part where he talk about client "mass client briefings" as been not true, but rather an investor update in october is a load. I went to a briefing along with about 400-600 other stormers in Brisbane, Ithink the date was th 4th of november, can anyone confirm.

Anyway, this is just a bit of trivia really, posted purely for others that have not seen it.


----------



## shanew (24 March 2010)

HI All,
Just wanted to thank all those that have subscribed to this thread you have answered many questions and I'm now well informed about the situation many of us find ourselves in. I for one have received the offer but will be looking closely at my options.


----------



## Solly (24 March 2010)

Something seems to be up at http://sicag.info/

They are stating that Ross Goodridge has accepted an invitation from Stuart Levitt to attend the rescheduled information meeting in Townsville on Saturday 27th March.

My Stormer friends are not SICAG members. 

Is anybody willing to share and give more info about what this is all about ?


----------



## Solly (24 March 2010)

Monario said:


> I chanced upon this letter from EC online. Just posting it as I dont believe I have seen it posted here before..
> 
> http://www.theage.com.au/ed_docs/response_to_Michael_West_article.pdf
> 
> ...




Monario, maybe this will jog a few memories...


----------



## Mindstorm (24 March 2010)

Thanks for this Monario

MS



Monario said:


> I chanced upon this letter from EC online. Just posting it as I dont believe I have seen it posted here before..
> 
> http://www.theage.com.au/ed_docs/response_to_Michael_West_article.pdf
> 
> ...


----------



## Smiley (25 March 2010)

Solly said:


> Something seems to be up at http://sicag.info/
> 
> They are stating that Ross Goodridge has accepted an invitation from Stuart Levitt to attend the rescheduled information meeting in Townsville on Saturday 27th March.
> 
> ...




Relationships with lawyers are business arragngements but some people are looking for a saviour.

This is all about lawyers seeing $ available  . . . Firths, thus Goodridge tied up with Cassimatises, who by the way offered to fund Sean McArdle's legal actions and to whom he has talked regularly in the last year (he has stated). 

Levitt and Robinson are lawyers for ex-storm advisers - why sign up with them? And isn't there a conflict of interest here? Want $10,000-$15,000 per client to launch a class action against CWB. My info is that this is not their area of expertise.

Some stormified think that they should get back their portfolio, which was mainly margin and home loan/s because of high LVRs.  

The saga continues


----------



## Monario (25 March 2010)

Solly said:


> Monario, maybe this will jog a few memories...




Thanks for that Solly, impeccable data as always. Still not sure about the date though, anyone?


----------



## Solly (25 March 2010)

Smiley said:


> Relationships with lawyers are business arragngements but some people are looking for a saviour.
> 
> This is all about lawyers seeing $ available  . . . Firths, thus Goodridge tied up with Cassimatises, who by the way offered to fund Sean McArdle's legal actions and to whom he has talked regularly in the last year (he has stated).
> 
> ...




Smiley you've said some things that have caught my attention.

I suppose I'm being too hopeful but it would be good to see a post on ASF from Sergeant Sean...

Yes the saga does continue.


----------



## Garpal Gumnut (25 March 2010)

Garpal Gumnut said:


> It may be worth summarising some lessons from this debacle.
> 
> 1. don't trust financial advisers/financial houses/lawyers.
> 2. don't trust banks
> ...




Just a reminder to those who are still to commit funds to lawyers in an attempt to recoup their Storm losses, posted in January 2009.

gg


----------



## Monario (25 March 2010)

Garpal Gumnut said:


> Just a reminder to those who are still to commit funds to lawyers in an attempt to recoup their Storm losses, posted in January 2009.
> 
> gg




Yes GG, and a lesson I have learned(not from personal experience thank goodness) is. Good Money After Bad = Stupid.... There are free alternatives which people should be following...


----------



## Mash (26 March 2010)

Everyone affected by this debacle are welcome to attend. We have options now. Don't jump into the depths of the RS (resolution Scheme) without at least hearing what others have to say.

Please pass this on to anybody who may benefit
.  
Townsville meeting Stuart Levitt

All meetings to this point have resulted in very positive feed back which clearly indicates people have felt some relief as a result of the information passed to them.

Confirming that the time and place for the meeting remains the same for the 27th ie

Saturday 27th March
10am - 1pm
Townsville RSL
139 Charters Towers Road 
Hermit Park QLD 4812 

People must register on (02) 9286 3133 if they wish to attend.

Ross Goodridge will be attending.

IF YOU ARE STRUGGLING WITH THE ENORMITY OF THIS DECISION, WE UNDERSTAND AND WE WANT YOU TO FEEL FREE TO BRING ANY PERSON YOU FEEL CAN ASSIST YOU IN YOUR PERSONAL DECISION.  

THAT INCLUDES FAMILY, FRIENDS, LEGAL COUNCIL AND ACCOUNTING PROFESSIONALS.  IN FACT WHO EVER YOU WANT THERE IS WELCOME.   

WE DO NOT HAVE TO KNOW ANYTHING ABOUT ANYONE ATTENDING AS THIS IS A FULLY TRANSPARENT MEETING, FOR YOUR BENEFIT.   

JUST LET US KNOW NUMBERS SO THAT WE CAN ARRANGE SEATING AS BEST WE CAN.


----------



## Mash (26 March 2010)

Smiley
As has been quoted before. Levitt has been heard to say re Cassimatis and ex storm planners (also those who have been sacked by CBA )  

"keep your friends close and your enemies closer"


----------



## pilots (26 March 2010)

Garpal Gumnut said:


> Just a reminder to those who are still to commit funds to lawyers in an attempt to recoup their Storm losses, posted in January 2009.
> 
> gg




 GG, How true your post is, come back here in two years and we will see the same people crying about how they have been milked again.


----------



## DocK (26 March 2010)

pilots said:


> Your post is so true.
> To all of you who think they will win against the banks, you are in for a shock.






pilots said:


> carey ramm said:
> 
> 
> > GG
> ...






pilots said:


> You are going to bring the banks to justice, Mate, you MUST be on DRUGS.
> You have been screwed by sales people, get over it.
> If for one minute you think you will win against the banks, bend over you are going to get screwed again.






pilots said:


> As long as a lawyer some place can still make out of this it will never be over, the ONLY thing thats over is any hope of the punters getting ANY money back at all.






pilots said:


> Carey, you say that Storm holders will get some thing, I will tell you what they are going to get, they will be conned out of more money, by the way I have a real big bridge for sale in Sydney will make you a lot of money, are you interested??




Just a word of caution to any ex-stormers who may be inclined to take any notice of Pilot's wisdom - he (and several others) obviously believed that none of us would see a single cent in compensation from any bank - that view has since proven to be incorrect, as the outcome of the Slater & Gordon/CBA resolution has shown.  

I'd urge any of you to make up your own minds, assisted by advice from those *qualified* to give it if desired.


----------



## Monario (26 March 2010)

Hi all.

I need a little help with a report that I am writting.

Does anyone(hopefully all will) recall the comments that the online information regarding gearing levels etc. available to clients of Macquarie and CBA as been incorrect. Can anyone supply a little more detail on this, dates this was happening, has it been confirmed etc.

Thanks


----------



## carey ramm (26 March 2010)

Hi Everyone

Been a while and thought i would drop by.

It is good to see ASIC now placing pressure on the other banks to implement resolution schemes which should bring relief to those who have been left in the cold till now.

I have seen quite a few CBA deals and they look pretty fair IMHO. I should point out that they were brokered by a former High Court Judge who is very well respected so in reality the outcome achieved is similar to running a very long and expensive court case that is ultimately decided in the High Court. People seem to have forgotten this - both CBA and Slaters agreed to be bound by the decision. They also need to remember that a very large proportion of their portfolio was debt not equity and that a lot of equity was lost due to falling markets that impacted everyone not just Stormers.

Some of the clients i have seen take settlements are now back in the market which is close to where they were when they sold out (without the margin loans this time!!!) so they stand to gain as the market recovers.

I also hear that 60 Minutes are sniffing round so that should be very interesting. There is plenty more to come out still.

Also congrats to Duncan Hughes of the AFR for winning the walkley award for his storm coverage and Tony Raggatt of the Townsville Bulletin for winning News Ltd business journalist of the year again for his storm coverage. It is investigative journalism by all that have covered this saga that has been responsible for much of the progress acheived to date. Lets hope it continues till everything has been exposed.


----------



## Monario (26 March 2010)

Monario said:


> Hi all.
> 
> I need a little help with a report that I am writting.
> 
> ...




Mr. Ramm, I was actually thinking of you when I wrote this, do you have any details, I was trying to contact you through a close friend of mine in townsville. An old VET that has been rather vocal throught this ordeal.

Do you have any info regarding this?


----------



## pilots (26 March 2010)

DocK said:


> Just a word of caution to any ex-stormers who may be inclined to take any notice of Pilot's wisdom - he (and several others) obviously believed that none of us would see a single cent in compensation from any bank - that view has since proven to be incorrect, as the outcome of the Slater & Gordon/CBA resolution has shown.
> 
> I'd urge any of you to make up your own minds, assisted by advice from those *qualified* to give it if desired.



Wow, so sorry, would you mind telling us of just one person who has got some thing back yet??? many thanks in advance.


----------



## Solly (26 March 2010)

carey ramm said:


> Hi Everyone
> 
> Been a while and thought i would drop by.
> 
> ...




Carey, I can hear the Tick, Tick, Tick from here...

For those who would like a replay of a previous 60 Minutes story of interest...

http://sixtyminutes.ninemsn.com.au/stories/757649/the-perfect-storm

And CBA's response...

http://www.commbank.com.au/about-us/news/on-the-record/2009/02032009-stormfinancial.aspx

I wonder where will we be in another 6 months ?

I believe the landscape will be very, very different.


----------



## Solly (27 March 2010)

And maybe it's time to look at a bit more history...

http://video.ninemsn.com.au/video.aspx?vid=f88b915c-ac1a-4ad4-a049-7fae11de7dea


----------



## DocK (27 March 2010)

pilots said:


> Wow, so sorry, would you mind telling us of just one person who has got some thing back yet??? many thanks in advance.




Apology accepted   I have got something back, and am aware of several others - although it is not for me to publicly provide details discussed in confidence.  I hope Ironhalo doesn't mind me using an old post of his as a further example:



Ironhalo said:


> I had this response:
> 
> snip
> 
> ...




There have also been several media articles attesting to the fact that compensation agreements have been entered into, such as the following:
http://www.smh.com.au/business/asic-talks-with-storm-collapse-victims-20100319-qmbk.html



> CBA has so far made settlement offers to 350 of Slater & Gordon's clients whose claims involved margin loans. More than 150 clients have accepted the offers.




The 350 offers referred to in the article are only the first "batch" - CBA hopes to have all offers made by the end of May apparently.

Whether ex-stormers accept the offers made, decide to wait to see what ASIC comes up with, or pursue an alternative legal remedy is up to each individual.  

When I read this sort of venomous post - 


> (originally posted by Pilots... ) GG, How true your post is, come back here in two years and we will see the same people crying about how they have been milked again.




it reminds me that there have been many posters on this thread who unequivocally stated that nobody would ever see any compensation from a bank, and neither should they.  Many felt that any compensation wasn't "deserved" even though they clearly could not possibly be aware of each person's circumstances.  Some even appeared to be personally affronted that compensation could be granted.  Some seem to find it difficult to swallow that compensation could be granted to ex-stormers, who _clearly_ have only themselves to blame , when they've had to bear the cost of their own past mistakes uncompensated.  

I've often wondered if some people would be capable of entertaining the idea that that banks bear some culpability in "the storm affair" even if Ralph Norris himself personally told them so - as it is contrary to their own opinion of how things ought to unfold.

Pilots, you certainly haven't been alone on this thread in voicing the opinion that ex-stormers had it coming and shouldn't expect to receive any compensation for their own stupidity (although you have been one of the most derogatory).

Personally, I would like to thank those such as Carey Ramm who provided some much needed positive words at times when many of us needed some encouragement to continue to hope for a fair outcome.  There are indeed many of us today who are in a much better position than we were a year ago, despite many assurances that we would (and should) get nothing.


----------



## Julia (27 March 2010)

Smiley said:


> Some stormified think that they should get back their portfolio, which was mainly margin and home loan/s because of high LVRs.






Garpal Gumnut said:


> Just a reminder to those who are still to commit funds to lawyers in an attempt to recoup their Storm losses, posted in January 2009.
> 
> gg






DocK said:


> there have been many posters on this thread who unequivocally stated that nobody would ever see any compensation from a bank, and neither should they.



Did anyone unequivocally state this?  I think many of us, probably on the basis of only ever being ethically treated by banks, felt it was more the responsibility of Cassimatis to make compensation, given it was his advice that was so unprofessional.  There were posts by Stormers which agreed with this but nonetheless thought the banks should be the main targets because clearly they could afford to pay.  Some of us felt that such reasoning was somewhat lacking in morality.  But hey, they're the banks, who cares?

CBA have admitted some fault, and made some reparation which is quite as it should be.  It does not, however, address the role of Cassimatis.



> Many felt that any compensation wasn't "deserved" even though they clearly could not possibly be aware of each person's circumstances.  Some even appeared to be personally affronted that compensation could be granted.  Some seem to find it difficult to swallow that compensation could be granted to ex-stormers, who _clearly_ have only themselves to blame , when they've had to bear the cost of their own past mistakes uncompensated.



A question for you, Dock:  do you really think CBA would have been forthcoming with compensation if Storm hadn't collapsed, if such large numbers had not been involved both in terms of clients and dollars borrowed, and these two factors had not combined to entice Slater and Gordon to become involved?

Obviously it was going to be a public relations nightmare for CBA anyway, and the only way this could be ameliorated even slightly, was for Mr Norris to issue his mea culpa and compensation offered.

Do you really think if a lone Stormer had had exactly the outcome he/she did, without all the publicity and legal assistance, the CBA would have been so "honourable"?

And, on the basis of that question, is it therefore fair that thousands of people in thousands of situations where they have been dudded by criminal behaviour but unable to access the same level of publicity, should not be compensated? 




> Pilots, you certainly haven't been alone on this thread in voicing the opinion that ex-stormers had it coming and shouldn't expect to receive any compensation for their own stupidity (although you have been one of the most derogatory).



Dock, as has been noted before, this is a stock forum, not a support group and members are fully entitled to express their view that the sort of double gearing that some Stormers engaged in was extremely risky.  Usually it follows that if one engages in extremely risky behaviour, one should be prepared for the outcome to be less than happy.   That is quite different from saying that any Stormer as a person is stupid.

You, yourself have clearly stated that you'd never be involved in any similar arrangement again, so obviously you now think it was foolish, or at best naive.   That is all most ASF members who have been critical have been saying.

However, it all seems to have turned out quite well for you, and that's good.
I'm not sure, though, that gloating doesn't rather sour the victory, and neither does it address the lack of attention to the responsibility of Cassimatis in the whole matter.


----------



## DocK (27 March 2010)

> Julia said:
> 
> 
> > Did anyone unequivocally state this?  I think many of us, probably on the basis of only ever being ethically treated by banks, felt it was more the responsibility of Cassimatis to make compensation, given it was his advice that was so unprofessional.  There were posts by Stormers which agreed with this but nonetheless thought the banks should be the main targets because clearly they could afford to pay.  Some of us felt that such reasoning was somewhat lacking in morality.  But hey, they're the banks, who cares?
> ...


----------



## pilots (27 March 2010)

Dock, You have not got back what you have lost:bang head:, sure you got some back,  if it was a good amount the banks would let to talk, you got back dam all. Remember this was MOSTLY your fault NOT THE BANKS. Whats that old saying, if you do poo poo in your nest YOU MUST live with the smell.


----------



## Julia (27 March 2010)

Dock, I'm sorry to hear about your husband.
Of course life is not necessarily fair.

I was simply making the point that you have received compensation on the basis of all the noise surrounding the Storm collapse.  

In so doing I mentioned something that had happened to me many years ago, a situation where I'd borrowed nothing, or taken obvious risks.  This was in contrast to Stormers.  The amount involved I would now consider peanuts but it did matter at the time.  I am sincerely wishing I'd never mentioned it as it has allowed you to (quite wrongly) suggest I am motivated by "sour grapes", rather than simply using it as a comparison with the media fuss surrounding Storm.

There are thousands of people who have been misused by criminal actions of others who have had no chance of redress or compensation.  My own situation was merely an example of this and intended to point up the advantage enjoyed by Stormers in contrast.


You are essentially accusing me of harshness and insensitivity.  Maybe ask a few Stormers with whom I've had considerable PM contact.

Yes, I have drawn attention to the insensitivity of some posters who mocked a new member about his/her disability.
That is imo a completely different situation from being critical of a double gearing financial strategy that had no exit plan.  I have no idea why you think it appropriate to compare the two situations.
I have at no stage mocked or made fun of you.


Yes, I was, am and always will be critical of the double gearing particularly for those in or nearing retirement.  So you won't get any apology from me for that.

I suggest we leave the exchange here.  Further acrimony is not useful.
I wish you all the best for the rest of your life.  I gather from posts elsewhere that you have a happy and healthy family.  That is probably worth more than a bunch of money.


----------



## Solly (28 March 2010)

*"Alarm bells ring over Storm offers"*

"There are growing concerns former Storm Financial clients are being coerced into accepting compensation offers made by Commonwealth Bank of Australia (CBA)."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/8842.htm


----------



## DocK (29 March 2010)

DocK said:


> snip,
> 
> Julia, I'm quite sure any ex-stormer would have been quite aware that this is a stock forum and not a support group within reading the first few pages of this thread.  Saying that does not give a person the right, in my opinion, to be downright rude, disparaging and insensitive.  Those traits have applied to posters on both sides of the situation, and do nobody any credit.  *Some have only questioned strategies that don't fit their own ideas and a lively debate has ensued, which is fair enough,* but others certainly have been nothing but inflamatory and insulting.  If it gives a person pleasure to spew venom on a forum I guess that's their business, but I for one wonder what they gain from it?  Some perverse pleasure from causing distress to a person totally unknown to them?  I have noticed lately on other threads that you feel no hesitation in chastising posters who you feel have shown poor taste or a lack of courtesy - should this thread be a free-for-all?
> 
> Interesting that you should read my post as gloating, as it was certainly not intended that way and I doubt many ex-stormers feel they have much left to gloat over.  *I posted as a reaction to the post Pilots made*, as this sort of drivel makes me angry.  This may be a stock forum, but *posts such as Pilots' *are not a discussion, they don't add any worthwhile content to the thread, they serve only to insult, inflame, deride and belittle.  I cannot understand what motivates such posts, and get sick to death of reading such tripe.  So I posted a response.  When challenged to provide evidence of "just one person who has got something back yet", I did.  Not gloating, just stating the facts.






Julia said:


> Dock, I'm sorry to hear about your husband.
> Of course life is not necessarily fair.
> 
> I was simply making the point that you have received compensation on the basis of all the noise surrounding the Storm collapse.
> ...




Naturally I am not privy to your private contacts via PM with others, I have commented on how *I* perceive your attitude to be, based on those comments that you have made publicly on this thread.  To* me*, their overall tone has been a reluctance to accept that the banks have a case to answer and a certain annoyance with the fact that people who indulged in what you see as risky behaviour should be compensated, regardless of who was actually at fault.  You have mentioned several times, on this thread, the fact that you had lost money in the past and not been compensated, and the tenor of your posts regarding any compensation payable to ex-stormers has given* me *the distinct impression that it irks you to see "people who don't deserve to be compensated" receive some funds where those more deserving (perhaps yourself?) have not.  Others are of course able to form their own views - those are mine and I stand by them.  If I have misread you, so be it.



> Yes, I have drawn attention to the insensitivity of some posters who mocked a new member about his/her disability.
> That is imo a completely different situation from being critical of a double gearing financial strategy that had no exit plan.  I have no idea why you think it appropriate to compare the two situations.
> I have at no stage mocked or made fun of you.




If you re-read my post you will see that I was responding to Pilots.  I am still confused at why you felt the need to respond to it in the first place.  Your choice.   I have stated quite clearly that being critical is fair enough, but being outright rude is not.  Again, I was clear that I was referring to posts such as those made by Pilots.  My reference to your habit of chastising others was made as I have noticed you are often quite quick to chastise insensitive posters, such as in the thread you refer to, but for some reason feel the need to remind me that this is a forum and not a support group when I choose to do likewise!   At no time have I accused you of mocking or making fun of me, simply questioning why you should feel it OK for others to do so, or question my choice to respond to them.  



> Yes, I was, am and always will be critical of the double gearing particularly for those in or nearing retirement.  So you won't get any apology from me for that.




I wouldn't be stupid enough to expect or want one.  I am neither in, or particularly near retirement, and am wondering why you have raised this issue yet again.  You clearly feel that any gearing is a bad thing, and you are entitled to your opinion.  No doubt a conservative approach has served you well.  I feel that a moderate level of gearing can be a useful tool for me - and I gather that my circumstances are quite different from yours.  I have been quite clear on this thread as to my agreement that the levels of double gearing used by some of those in retirement were quite extreme and fraught with danger.  However, to use an analogy - if a racing car driver were to crash during a race due to a flaw with his tyres, should the maker of the tyres be exempt from any responsibility because the driver was indulging in risky behaviour in the first place?  My opinion is that if the tyres were faulty and exacerbated the injury to the driver then yes, they bear some blame.  Your opinion appears to be that the driver shouldn't be asking for compensation as he was indulging in risky behaviour and shouldn't have been in the race in the first place.  I don't think we're  likely to agree on this issue, and am happy to agree to disagree.



> I suggest we leave the exchange here.  Further acrimony is not useful.
> I wish you all the best for the rest of your life.  I gather from posts elsewhere that you have a happy and healthy family.  That is probably worth more than a bunch of money.




Fine with me - again, my exchange was with Pilots and not you in the first place, and my acrimony was directed at him/her.  The response from Pilots (although barely intelligible) speaks for itself

I do indeed have a (mostly) happy and healthy family that I value beyond any amount of money.  Finally, we agree on something


----------



## specialed (29 March 2010)

DocK said:


> Naturally I am not privy to your private contacts via PM with others, I have commented on how *I* perceive your attitude to be, based on those comments that you have made publicly on this thread.  To* me*, their overall tone has been a reluctance to accept that the banks have a case to answer and a certain annoyance with the fact that people who indulged in what you see as risky behaviour should be compensated, regardless of who was actually at fault.  You have mentioned several times, on this thread, the fact that you had lost money in the past and not been compensated, and the tenor of your posts regarding any compensation payable to ex-stormers has given* me *the distinct impression that it irks you to see "people who don't deserve to be compensated" receive some funds where those more deserving (perhaps yourself?) have not.  Others are of course able to form their own views - those are mine and I stand by them.  If I have misread you, so be it.




Tread carefully DocK, last time I went down this path and made a similiar observation I was red flagged...and trust me..dont what ever you do spell anyones name incorrectly !!


----------



## bunyip (29 March 2010)

specialed said:


> Tread carefully DocK, last time I went down this path and made a similiar observation I was red flagged...and trust me..dont what ever you do spell anyones name incorrectly !!




You might get some respect on this thread if you posted something of substance, instead of trying to be half smart and making failed attempts to be funny.


----------



## Joe Blow (29 March 2010)

*An important message to all thread participants:*

Please be careful not to mess up your 







> tags. I have just had to edit three posts with messed up quote tags, all due to one post with an extra
> 
> 
> 
> ...


----------



## Julia (30 March 2010)

Julia said:


> Agreed.   The account I read of the settlement was in today's "The Australian".  No longer have the paper but was rather surprised at the implication in the way the article was written that it was the CBA who inflated the property values and borrowers' incomes.
> Throughout this thread, no one has actually been able to say where this inflating of values occurred, and I guess most of us assumed it would have been by Cassimatis.
> 
> If that's wrong, and the bank has indeed exaggerated dollar amounts, then for sure they do need to provide compensation, although I still can't understand how the client didn't - when reading the loan paperwork - see the figures involved in servicing the loan (surely these were provided???) and understand that the amounts involved did not represent either the value of their home or their income.
> ...






Julia said:


> Well, obviously I am naive in imagining no borrower would engage in a loan when they had not seen the valuation attributed to the property by the lender or the income attributed to the borrower.
> 
> 
> 
> Clearly, you yourself would never do anything similar again.  My comment was not directed personally toward you, DocK.  I have, however, read many comments from Stormers who still believe there was nothing wrong with the double gearing strategy, and that their demise is entirely the fault of the banks.  That is what I was referring to and I stand by my comment.








DocK said:


> I have commented on how *I* perceive your attitude to be, based on those comments that you have made publicly on this thread.  To* me*, their overall tone has been a reluctance to accept that the banks have a case to answer and a certain annoyance with the fact that people who indulged in what you see as risky behaviour should be compensated, regardless of who was actually at fault.



This exchange is becoming farcical but my last part of it will be to correct you here.
Above are the two posts where I expressed my reaction to the question of compensation.
Surprised?  Yes.   I'm very surprised and disappointed that banks have behaved inappropriately. Annoyed?  No.  Makes no difference to me.



> You have mentioned several times, on this thread, the fact that you had lost money in the past and not been compensated,



No.  That is a complete misrepresentation.  I described just once what had happened to me.  I further referred to thousands of other instances which occur every day along the same lines.



> and the tenor of your posts regarding any compensation payable to ex-stormers has given* me *the distinct impression that it irks you to see "people who don't deserve to be compensated" receive some funds where those more deserving (perhaps yourself?) have not.  Others are of course able to form their own views - those are mine and I stand by them.  If I have misread you, so be it.



You have indeed misread me and I find it pretty insulting that you can't see I was describing the wider principle of injustice compared with the media circus that has surrounded Storm with its PR implications for the banks.
The amount I lost I'd make in a week these days, so I'm hardly likely to be nursing 'sour grapes' over something which happened half a lifetime ago!





> If you re-read my post you will see that I was responding to Pilots.  I am still confused at why you felt the need to respond to it in the first place.



Fairly obviously because your remarks were contained in a post to me.  

If your comments were directed toward Pilots, I'd have thought it more logical to make them in a direct post to him, rather than contained in a post to me.


----------



## Solly (30 March 2010)

I've just been re-reading some old posts and am wondering what has happened to Big Max.

Does anybody know if Big Max is still around ?


----------



## Solly (30 March 2010)

*"Storm clients chase better compo deal"*

"MANY of the victims of the Storm Financial disaster are swapping law firms to chase better compensation arrangements from the banks."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/03/30/126385_news.html


----------



## Solly (31 March 2010)

Solly said:


> *"Storm clients chase better compo deal"*
> 
> "MANY of the victims of the Storm Financial disaster are swapping law firms to chase better compensation arrangements from the banks."
> 
> ...




There is an interesting reader comment following this article by a former Storm client.


----------



## Solly (31 March 2010)

*"Law firm's warning over Storm alternative"*

"LAW firm Slater and Gordon has rejected suggestions many of the victims of the Storm Financial disaster are moving to rival law firms to chase better compensation arrangements from the banks."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/03/31/126875_news.html


----------



## Garpal Gumnut (31 March 2010)

Solly said:


> I've just been re-reading some old posts and am wondering what has happened to Big Max.
> 
> Does anybody know if Big Max is still around ?




He got a job training moneyspiders down at the Coast. He's planning to start a circus, with them as star attraction.,

gg


----------



## I am Sparticus (1 April 2010)

Hi All,
I have been a long time watcher and now 1st time poster.  Just thought I would throw in my 2 cents worth.
So let’s get this out in the open:
Yes, I am a financial planner
NO, I have never worked for Storm
Yes, I did work at the CBA for a long period
NO, I had nothing to do with the Storm ‘Cell’ that handled their applications
Yes, I do have a similar strategy in place for some of my current clients 
Yes, I do believe that in the right circumstances, this type of plan can be very effective
Yes, I do know some ex-Storm advisors

This whole saga has been a very sad one.  As already stated many times on this website by other posters, you can’t paint everyone with the same brush.  Greed, naivety, and some stupidity have played a part in this drama from nearly everyone involved.

I am not going to go on with ‘well I do this, and I do that, and my strategy is better!!’ but this strategy can be very effective for the clients IN THE CORRECT CIRCUMSTANCES!!!!!  Gearing pensioners and those who do not have ample cash-flow to support it, is nothing short of simply breath-taking in its audacity!!  And, I have to include this, those of you who paid these absolutely gob-smacking, extravagant fees…..well, enough said

I do believe that the bank has done something good here.  Regardless of how much the compensation is, it is still something.  To be honest, I never thought any compensation from the bank would happen.

However, I do not believe in any way, shape, or form that they are 100% responsible for this mess, not even 20%.  I do believe that this lies squarely at the feet of the Heralded Leader of Storm.  I have a large number of clients and when the GFC hit we were informed constantly of their position and we then acted on the info and made moves to avoid margin calls.  The companies that we deal with are no different to the companies that storm dealt with.  For this reason the vast majority of my clients avoid the dreaded call.

I do hope that with the compensation and cases going through the courts, that the issue of incorrect advice given by Storm to certain clients, and the negligence that they showed in not acting, does not get lost on the public and those involved.

I know there is nothing ground breaking in my little rant, but my last paragraph is really a concern for me.  Even though they won’t get one red nickel from EC, I can only hope that his hand in this is not forgotten or goes unpunished.  
Cheers


----------



## Julia (1 April 2010)

Spartacus, thanks for your comments.   Your combined position of being a FP and having worked with CBA obviously lend weight to your views.


----------



## Solly (1 April 2010)

I am Sparticus said:


> ....I have a large number of clients and when the GFC hit we were informed constantly of their position and we then acted on the info and made moves to avoid margin calls.  The companies that we deal with are no different to the companies that storm dealt with.  For this reason the vast majority of my clients avoid the dreaded call........




This is an interesting point you raise, at the hearing at Harry's there was quite some discussion regarding CBA's interactions with Storm and the information flow between them.


----------



## bunyip (1 April 2010)

I am Sparticus said:


> Hi All,
> I have been a long time watcher and now 1st time poster.  Just thought I would throw in my 2 cents worth.
> So let’s get this out in the open:
> Yes, I am a financial planner
> ...




Sparticus

I really enjoyed reading your views, perhaps because they pretty much mirror the views I've been expressing on here all along.

The Storm boss and his actions, and in particular his non-actions when decisive action was needed, are the primary cause of the wipeout of so many Storm clients.

Among all the blame being levelled at the banks for faulty data and for selling clients investments out from under them, one point is continually overlooked.....Storm clients should have been out of the market long before they came anywhere near margin call. The market was in free fall for almost 12 months before the faulty data allegedly occurred, before any accounts went into margin call, and before the banks started pulling the plug on the managed funds.
Nobody has any excuse for sitting through 12 months of one of the worst bear markets in history when they had big dollars invested in the stockmarket via margin loans.

It's oh so convenient to shovel the blame on to the banks because they're the ones with the resources to pay compensation. Not that the banks are blameless - clearly they're not, and they should make at least some recompense where they screwed up. 
But it's wrong to see the banks copping pretty much all the blame, while Cassamatis and most (not all) of the clients seem largely unwilling to accept that they themselves made a significant contribution to the situation they now find themselves in.

The more heat put on the banks, the less heat that's put on Cassamatis for his pathetically incompetent handling of his clients investments. And that's just the way Cassamatis likes it.


----------



## Solly (3 April 2010)

*"ASIC chairman Tony D'Aloisio takes firm grip of Storm"*

"AUSTRALIAN Securities & Investments Commission chairman Tony D'Aloisio is taking a hands-on role in the critical Storm Financial investigation, as the watchdog wrestles with the fallout from a string of recent high-profile court failures in a federal election year.

One ASIC insider said of Mr D'Aloisio and Storm: "He just doesn't want any more screw-ups." "

Tony D'Aloisio meets with Slater & Gordon & SICAG

More by Richard Gluyas in The Australian here;

http://www.theaustralian.com.au/business/daloisio-takes-firm-grip-of-storm/story-e6frg8zx-1225849062636


----------



## Solly (7 April 2010)

*"Jostling for the money"*

"SOME of the victims of the Storm Financial fiasco are in a dilemma over which way to jump for the best compensation to the losses they suffered at the hands of their so-called wealth advisers and the banks.

Law firms Levitt Robinson and Slater and Gordon are competing for custom or, as one lawyer put it, 'sniffing' money."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/04/07/128325_business_desk.html


----------



## Judd (7 April 2010)

Solly said:


> *"Jostling for the money"*
> 
> "SOME of the victims of the Storm Financial fiasco are in a dilemma over which way to jump for the best compensation to the losses they suffered at the hands of their so-called wealth advisers and the banks.
> 
> Law firms Levitt Robinson and Slater and Gordon are competing for custom or, as one lawyer put it, 'sniffing' money."




It is about now I burst out laughing.  From the same article:



> It seems absurd that financial advisers who were telling clients to sell up to 100 per cent of their portfolios amid the crash, are now joining clients, many of whom agreed to the sell recommendations, to go the banks for selling them out without approval.




And I seem to detect a subtle shift in Mr Raggatt's empathy but that's just me.


----------



## Solly (8 April 2010)

Just wondering how the offers from the Resolution Scheme are going ?

Those confidentiality clauses must be a real challenge.


----------



## Solly (9 April 2010)

*"Litigator settles further Storm claims
ANZ resolution scheme edges closer"*

"Slater & Gordon has settled a number of Storm Financial claims with NAB while resolution scheme talks progress with ANZ."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8895.htm


----------



## Mash (9 April 2010)

RS  - Resolution scheme....... S&G telling clients this is as good as it gets and don't think about a counter offer.... not gunna happen... sign your legal rights away now.... want as many settled before a case is launched in court.... all that under the table stuff will make for a very uncomfortable time for Ralphie and co. when he has to sit in a court room and not be able to bs under parliamentary privelage. Just what i've heard.... Also understand that Brendan French (CBA) believes this is "his" scheme and ASIC will not tell him what to do....ever... his career depends on the "success" of the RS.


----------



## Solly (9 April 2010)

Mash said:


> RS  - Resolution scheme....... S&G telling clients this is as good as it gets and don't think about a counter offer.... not gunna happen... sign your legal rights away now.... want as many settled before a case is launched in court.... all that under the table stuff will make for a very uncomfortable time for Ralphie and co. when he has to sit in a court room and not be able to bs under parliamentary privelage. Just what i've heard.... Also understand that Brendan French (CBA) believes this is "his" scheme and ASIC will not tell him what to do....ever... his career depends on the "success" of the RS.




Mash, I believe that this is the same Dr French that SICAG referred to in their submission to the Parliamentary Joint Committee on Corporations and Financial Services as follows, 

"SICAG acknowledges and lauds the good faith the bank has lately demonstrated in relation to
the Accelerated Resolution Process and strongly supports the initiative. SICAG believes
Brendan French and Matt Comyn, the two CBA executives charged with cleaning up the
Storm mess, are men of high quality and sincerity and look forward to working with them to
effect a just settlement for our distressed members."

I wonder if their faith has been misplaced...


----------



## Mash (10 April 2010)

It appears Frenchie has shown his true colours..... then again his career does depend on keeping CBA as squeeky clean as possible..... very embarrassing and dare I say incriminating evidence is floating around just waiting for a court appearance......CBA may just regret chopping so many heads off...


----------



## Solly (10 April 2010)

Mash said:


> It appears Frenchie has shown his true colours..... then again his career does depend on keeping CBA as squeeky clean as possible..... very embarrassing and dare I say incriminating evidence is floating around just waiting for a court appearance......CBA may just regret chopping so many heads off...




Mash, I trust ASIC are aware of this evidence. I look forward to further developments. Looks like there are further interesting days ahead. Might be time to dust off the U-matic edit suite


----------



## Cascade (10 April 2010)

I have followed and read this thread now since it commenced.   As like Sparticus, I too worked for the CBA for a long time.  I would like to make a few comments without bias regarding some information that I am not sure have been mentioned previously.  

The CEO of the CBA has a significant bonus coming to him if the CBA achieve 1st place by 30 June 2010 in customer satisfaction, could this be the reason why the Bank is trying paint itself in such a good picture in the public eyes?

The Bank admitted to shortcomings in its lending practices even though the Home Loans that were written for Storm were all approved within the Bank’s policy at the time.  In early 2009, the Bank audited a large majority of the loans that were written and were found to be compliant including the calculation of income.  The shortcomings that they found were loopholes in their own policies that have since been changed across Australia.  With the changes made, the Bank would no longer be able to lend money to Storm customers.

The argument that Storm clients should never have been lent the money is an interesting one.  As at December 2008, I don’t think there were any loans that were in arrears or default as a result of Storm clients not being able to repay the loans therefore there would be a suggestion that they could afford the loans.  That’s said though, when the CBA sold their shares they took away the source of income that the Bank relied on in the first place to approve these loans.

I will be interested to see who walks away from this benefiting from the whole ordeal, obviously some Solicitors will but who else, maybe Ralph?


----------



## Mash (10 April 2010)

"The CEO of the CBA has a significant bonus coming to him if the CBA achieve 1st place by 30 June 2010 in customer satisfaction, could this be the reason why the Bank is trying paint itself in such a good picture in the public eyes?" ......interesting info thanks Cascade ....

Should have known Ralph would have his finger in the pie  .... or maybe a more apt description would be ....snout in the trough.....

and to Solly..... ASIC have been speaking to clients and tying up loose ends with gusto over the past few weeks..... the landscape is beginning to change..... we are led to believe certain advisors are in their sights in the next few weeks....

I trust they will then have EC, JC and the likes of Ralphie boy in their sights as well!!!!  They all deserve to rot in hell together !!  The truth is out there it just has to see the light of day!     :chainsaw:


----------



## Solly (10 April 2010)

Cascade said:


> I have followed and read this thread now since it commenced.   As like Sparticus, I too worked for the CBA for a long time.  I would like to make a few comments without bias regarding some information that I am not sure have been mentioned previously.
> 
> The CEO of the CBA has a significant bonus coming to him if the CBA achieve 1st place by 30 June 2010 in customer satisfaction, could this be the reason why the Bank is trying paint itself in such a good picture in the public eyes?
> 
> ...




Thanks Cascade for your insight. I've just spent the afternoon with a Stormer, I hope he reads your post. He's struggling, hasn't received an offer and is starting to look like a hunched disheveled man far beyond his years. He's asking himself what wrong did he really do ?

He invested through a licenced, sanctioned financial advisory business with perceived solid links to the CBA. He's not a high flyer nor a participant in the Pirates of Penance dalliances. He was there for the long haul to hopefully have a modest secure retirement. Now he's in a limbo waiting to see what relief can come his way.

Sir Ralph appears to me to be in a secure position and largely unaffected.
Manny hasn't given an update on his website for many months, I can only speculate on his actual financial position.

I'm starting to miss those days at Harry's......


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## Solly (10 April 2010)

Mash said:


> "The CEO of the CBA has a significant bonus coming to him if the CBA achieve 1st place by 30 June 2010 in customer satisfaction, could this be the reason why the Bank is trying paint itself in such a good picture in the public eyes?" ......interesting info thanks Cascade ....
> 
> Should have known Ralph would have his finger in the pie  .... or maybe a more apt description would be ....snout in the trough.....
> 
> ...




Mash, somebody gave me this card, maybe I should make a follow up call on Monday to see what further details I can find out and share with this forum...


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## Garpal Gumnut (11 April 2010)

Solly said:


> *"Jostling for the money"*
> 
> "SOME of the victims of the Storm Financial fiasco are in a dilemma over which way to jump for the best compensation to the losses they suffered at the hands of their so-called wealth advisers and the banks.
> 
> ...




Unfortunately many of the Storm victims are elderly and unwell, some illness a direct consequence of this debacle.

They are now being offered differing difficult options when they are in no mental state to be making appropriate decisions. 

This has occurred due to the imbalance of power between the Banks/Cassimatises/Lawyers on the one hand and the Storm Clients on the other.

The legal system favours the rich and powerful and leaves the victims of financial scams at a tremendous disadvantage.

Now is the time for ASIC to show that it is fulfilling its mien, otherwise it needs to be dissolved.

gg


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## Solly (11 April 2010)

Garpal Gumnut said:


> Unfortunately many of the Storm victims are elderly and unwell, some illness a direct consequence of this debacle.
> 
> They are now being offered differing difficult options when they are in no mental state to be making appropriate decisions.
> 
> ...




gg, did you see the interview with Tony D'Aloisio by Alan Kohler on Inside Business this morning ? 

I sent out a general tweet when I found out it was on.

I agree with your comment that it is 'time for ASIC to show that it is fulfilling its mien'.

It is an interesting interview especially in reference to Storm.

The Vodcast should be up soon on;

http://www.abc.net.au/insidebusiness/


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## Solly (12 April 2010)

*"Law firms battle over Storm Financial bank compensation"*

"A WAR of words has broken out between law firms as Storm Financial investors come to grips with compensation deals they have been offered by the Commonwealth Bank."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/law-firms-battle-over-storm-financial-bank-compensation-20100411-s0uh.html


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## bunyip (12 April 2010)

Cascade said:


> The argument that Storm clients should never have been lent the money is an interesting one.  As at December 2008, I don’t think there were any loans that were in arrears or default as a result of Storm clients not being able to repay the loans therefore there would be a suggestion that they could afford the loans.




That's interesting, considering the numerous complaints from Stormers about banks advancing them loans that they couldn't afford to service.

Whether or not they could service their loans, it's the responsibility of every borrower - Stormers or otherwise -  to ensure they'll be able to meet their loan commitments before they apply for a loan. Otherwise they shouldn't make the loan application in the first place.
If their loan application is successful, but they find themselves unable to meet the loan commitments, I think it's a bit rich if they then criticise the bank for lending them the money.

That's a bit like me asking a farmer to let me ride his horse. But then I blame the farmer when I fall off the horse and break my arm.


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## Solly (12 April 2010)

bunyip said:


> That's interesting, considering the numerous complaints from Stormers about banks advancing them loans that they couldn't afford to service.
> 
> Whether or not they could service their loans, it's the responsibility of every borrower - Stormers or otherwise -  to ensure they'll be able to meet their loan commitments before they apply for a loan. Otherwise they shouldn't make the loan application in the first place.
> If their loan application is successful, but they find themselves unable to meet the loan commitments, I think it's a bit rich if they then criticise the bank for lending them the money.
> ...




bunyip, I have had quite lengthy discussions with one Stormer about their understanding of the Storm strategy. What became very apparent to me was that they truly believed that they were not in a high risk strategy and that there were safeguards in place to cover any market corrections that happened. They explained to me that they believed that the Storm strategy had worked in previous market corrections.

They had confidence in the advice that the company was giving and the banks involved. They believed that the banks would not lend the money if the strategy was flawed, especially when housing loans, margin loans and Storm badged funds all fell under the umbrella of the one of the most respected banks in Australia.


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## shiftyphil (12 April 2010)

bunyip said:


> That's a bit like me asking a farmer to let me ride his horse. *And lying to the farmer about your horse-riding experience.* But then I blame the farmer when I fall off the horse and break my arm.




I think that's even closer...


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## Solly (12 April 2010)

shiftyphil said:


> I think that's even closer...




shiftyphil, Are you suggesting that Stormers deliberately misrepresented their income on their loan documents?


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## Mash (12 April 2010)

Bunyip ... did u read the post by cascade..... December *2008*.... that really is no surprise..... that's when the proverbial hit the fan..... as has been pointed out adnausium..... those loans could only be serviced by the income from the investments.... once the investments went south then no more income ......    sorry wasting my time trying to explain to your ilk


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## bunyip (12 April 2010)

Solly said:


> bunyip, I have had quite lengthy discussions with one Stormer about their understanding of the Storm strategy. What became very apparent to me was that they truly believed that they were not in a high risk strategy and that there were safeguards in place to cover any market corrections that happened. They explained to me that they believed that the Storm strategy had worked in previous market corrections.
> 
> They had confidence in the advice that the company was giving and the banks involved. They believed that the banks would not lend the money if the strategy was flawed, especially when housing loans, margin loans and Storm badged funds all fell under the umbrella of the one of the most respected banks in Australia.




Solly - I think it's pretty clear that Stormers went into a business they didn't understand, without doing sufficient research first.

If I employed a manager to run my business, I'd still make sure I knew something about the business myself, regardless of how competent I thought my manager was.
Knowing something about my business, it would be clear to me if the manager was doing a shoddy job, and I'd step in to save the situation. Under no circumstances would I sit back and do nothing while an incompetent manager allowed my business to go broke.
Stormers could have and should have done that too - stepped in and taken control from their clearly incompetent manager while their situations were still salvageable. 

They explained to you that they believed the Storm strategy had worked in previous market corrections. Had they done their research properly and looked at the 1987 crash, they would have realised that the strategy would not cope with a similar market slump.
The fact that some of them believed they were not in a high risk strategy is further evidence of their lack of research and understanding of their business.
Large margin loans invested in the stockmarket is definitely a strategy that involves significant risk - particularly when neither they nor their manager took defensive action once the market turned bearish.

The banks lent the money because the strategy was OK while the market kept rising. If the market turned bearish, then the nature of margin loans meant that the banks pretty much had themselves protected.
I believe the bank's assessment was that the strategy wasn't flawed - they had themselves covered from all angles, so it was good lending business from their perspective.


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## shiftyphil (12 April 2010)

Solly said:


> shiftyphil, Are you suggesting that Stormers deliberately misrepresented their income on their loan documents?




Maybe not deliberately, but they allowed Storm to do so on their behalf.

(IMO their's plenty of blame to go around on all sides - the clients should not have swallowed Storm's flashy sales pitch, the banks should have verified what they were told, and Storm should never have tried to pass off "leverage to the max and cross your fingers" as a conservative investment strategy.)


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## bunyip (12 April 2010)

Mash said:


> Bunyip ... did u read the post by cascade..... December *2008*.... that really is no surprise..... that's when the proverbial hit the fan..... as has been pointed out adnausium..... those loans could only be serviced by the income from the investments.... once the investments went south then no more income ......    sorry wasting my time trying to explain to your ilk




Ah Mash - I see you've lost none of your talent for being rude and obnoxious.
And as usual, you imply that those of us who were savvy enough to avoid being snared by Storm are completely stupid, whereas you Stormers were not, but were merely victims of circumstance and of other peoples actions. 
As usual, from your perspective it's all someone else's fault, but never your own.

Perhaps I should remind you that you had a wealth of 12 million dollars through your Storm investments, but were not switched on enough to remove a substantial portion of that wealth to safe investments. 
OK - you made an error of judgement, as we all do sometimes - but please refrain from implying that everyone who is critical of the Storm situation is stupid, but you're not.

The market fell for a further four months after December 2008. Storm clients were in margin calls that weren't being met. How much longer do you think the banks should have carried you?
The market could have fallen for another year, it could have fallen another 50 or 60% - those were unknown factors at the time. How long do you think the banks should have kept those loans going? Their money was at risk. They're public companies that are answerable to shareholders. 
The US market lost about 90% of its value in the 1929 slump, and took 25 years to recover those losses. That's the situation the banks were faced with - the possibility of  the same thing happening again this time, leaving them with massive losses if they took no action to recover their loans.

You have a think about that next time before you before you criticise the banks for taking moves to recover their loans, and before you go taking a shot at 'people of my ilk'.
People 'of your ilk', Mash, need to open your eyes and realise that you yourself bear a significant degree of responsibility for the situation you got yourself into with Storm.
It is _*not*_ all somebody else's fault.


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## Solly (12 April 2010)

bunyip said:


> Solly - I think it's pretty clear that Stormers went into a business they didn't understand, without doing sufficient research first.
> 
> If I employed a manager to run my business, I'd still make sure I knew something about the business myself, regardless of how competent I thought my manager was.
> Knowing something about my business, it would be clear to me if the manager was doing a shoddy job, and I'd step in to save the situation. Under no circumstances would I sit back and do nothing while an incompetent manager allowed my business to go broke.
> ...




bunyip, my experience with the Stormers is that investing was not their core business and their primary skills lay elsewhere. But I believe that there was a lot of trust with what they were being told and especially in relation to that all the safeguards were there. Does this excuse them for where they ended up? Caveat Emptor.

But do they deserve the punishment that is being administered to some? I hope that the legal and regulatory rÃ©gimes successfully resolves this issue.

I look forward to the end of May when Mr Tony D'Aloisio's team will add more clarity.


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## Solly (12 April 2010)

shiftyphil said:


> Maybe not deliberately, but they allowed Storm to do so on their behalf.
> 
> (IMO their's plenty of blame to go around on all sides - the clients should not have swallowed Storm's flashy sales pitch, the banks should have verified what they were told, and Storm should never have tried to pass off "leverage to the max and cross your fingers" as a conservative investment strategy.)




Ok shiftyphil I see what you mean.


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## bunyip (12 April 2010)

Solly said:


> bunyip, my experience with the Stormers is that investing was not their core business and their primary skills lay elsewhere. But I believe that there was a lot of trust with what they were being told and especially in relation to that all the safeguards were there. Does this excuse them for where they ended up? Caveat Emptor.
> 
> But do they deserve the punishment that is being administered to some? I hope that the legal and regulatory rÃ©gimes successfully resolves this issue.
> 
> I look forward to the end of May when Mr Tony D'Aloisio's team will add more clarity.




Solly - I think the trap that people fall into with the stockmarket is that they don't approach it as a business that has to be researched, planned and managed just like any other business.
For some reason they think that normal rules of business don't apply to investing in the stockmarket.
I was the same - the first stocks I ever bought, I had no idea what I was doing. I did no research, preferring to leave it to others. I practised no money management. Sometimes I bought on tips from other people. I had no business plan beyond burying and holding in the hope that what I bought would go up.
I lost money. Fortunately I only made small investments, and sustained only small losses. I tentatively dipped a toe in the water until I learnt what to do and what to avoid doing.
Where Stormers came unstuck was in going in too big, too fast, before they learnt their business.
Many of them were successful in other business before their venture into the stockmarket. The same rules they applied to achieve success in those businesses, should have been implemented in their stockmaret business as well.

'Caveat emptor' indeed.


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## specialed (12 April 2010)

bunyip said:


> That's interesting, considering the numerous complaints from Stormers about banks advancing them loans that they couldn't afford to service.
> 
> Whether or not they could service their loans, it's the responsibility of every borrower - Stormers or otherwise -  to ensure they'll be able to meet their loan commitments before they apply for a loan. Otherwise they shouldn't make the loan application in the first place.
> If their loan application is successful, but they find themselves unable to meet the loan commitments, I think it's a bit rich if they then criticise the bank for lending them the money.
> ...




Bunyip, 

I certainly agree with you on principle, however feel maybe it is also either a little simplistic or not a reflection of the reality of many who take out loans. Although a different circumstance, I do wonder what will happen to the tens of thousands of 1st time buyers in say two years time if (and when) interest rates hit 10 pc plus as predicted. Did the banks have any responsibility to ensure these customers would be able to service a home loan at that rate compared to the less than 5 percent the customers "bought in at". 

No doubt they (the banks), and most of us realised what the inevitable rebound would do to interest rates yet how clearly would this have been articulated to customers who may not be so financially savvy. It is not my intention to be rude or out of line here however your analysis appears to me to inadvertently imply that the banks have no responsibility to loan responsibly. Was the GFC not  a direct result of ill-informed and uneducated customers receiving loans via irresponsible lending practices. 

Having only relatively recently purchased our first home I certainly found it interesting that not one lender I spoke to attempted to demonstrate to me what an interest rate rise would cost, they made no effort to seek to clarify my understanding of financial systems, and most were very circumspect in their discussions about loan repayments. Did they have any obligations here ? The Banking code of practice certainly implies one however it is only “code of practice”.

They did however, some more aggressively then others, try to lend me what blind Freddy could see was a ridiculous amount of money. An amount that would not have been at all serviceable on the stated (and accurate) income I listed, with even the slightest of rate rises. 

Do they have any obligation to check the serviceability of the loan, or should they instead aggressively loan to anyone and everyone secure in the knowledge that they stand to loose nothing when it all goes up the creek.  

Are we in Australia headed for a repeat of the GFC in a couple of years, or will some of us just be lucky enough to find a glut of mortgagee houses hitting the market.


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## specialed (12 April 2010)

bunyip said:


> Solly - I think the trap that people fall into with the stockmarket is that they don't approach it as a business that has to be researched, planned and managed just like any other business.
> 
> Where Stormers came unstuck was in going in too big, too fast, before they learnt their business.
> Many of them were successful in other business before their venture into the stockmarket. The same rules they applied to achieve success in those businesses, should have been implemented in their stockmaret business as well.
> ...





Again I agree Bunyip, however many many were not successful in business at all, with very little if any business knowledge and for some even the capacity to spend a long time researching was not their. And even if the did they may well have come to the conclusion as many did that this strategy was and is still heavily used by many very successful and now rich investors. Rather many existed much of or their whole working life in a PAYE environment.


They saw a financial advisor who they perceived was responsible for knowing the business". Much has been made here and in the media regarding the way the CBA, or more specifically CGI liked to be "seen" at Storm events often providing relatively healthy sponsorship.  They were happy to attach their brand to this model and deliberately or otherwise this gave the impression to many that Storm could be trusted and dare I say, knew what they were doing.

For many, this endorsement in itself was sufficient, naively as it is, to feel secure going with this product.


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## Garpal Gumnut (12 April 2010)

The Ross Goodridge letter available on the SICAG site outlines the rudiments of an alternate plan to that of Slater and Gordon.

http://sicag.info/RIG ltr to SICAG 17 3 10.pdf

I am not a Commercial Lawyer or an expert in Margin Loan Law, however Goodridge's brief explanation of some of the points on which Stormers could challenge the banks, does make a considerable amount of common sense.

Damien Scattini has spent considerable time on Stormers behalf negotiating an agreement whereby they would maintain possession of their homes until death but lose their investment capital. For this he is to be congratulated.

I believe Manny is in favour of the Goodridge approach, under Levitt Robinson Solrs. This may argue against this avenue as Manny Cassimatis' judgement calls in the past have been proven to be "brave" in the extreme, and arguably led to this debacle.

These are difficult decisions for battered, many elderly and unwell, Stormers to make.

gg


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## specialed (12 April 2010)

Very interesting letter indeed.

What baffles me is why no one has actuallly taken this to litagation yet. Surely all this needs is one case to test it in the courts. Is everyone holding out for the ASIC report ? Surely the banks will show their true colours once this actually goes to court, and a few now ex cba employees are required to give evidence ? Throw in a few injuctions regarding the seizure of property etc...


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## Julia (12 April 2010)

specialed said:


> Having only relatively recently purchased our first home I certainly found it interesting that not one lender I spoke to attempted to demonstrate to me what an interest rate rise would cost, they made no effort to seek to clarify my understanding of financial systems, and most were very circumspect in their discussions about loan repayments. Did they have any obligations here ? The Banking code of practice certainly implies one however it is only “code of practice”.
> 
> They did however, some more aggressively then others, try to lend me what blind Freddy could see was a ridiculous amount of money. An amount that would not have been at all serviceable on the stated (and accurate) income I listed, with even the slightest of rate rises.
> 
> ...



That's very disappointing behaviour on the part of the banks.
Did you challenge them on their attempts to lend you more than you obviously were able to service?

Certainly reinforces the need to take responsibility for our own decisions and never to assume anyone else has our interests in mind.


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## Solly (13 April 2010)

*"Storm index fund wind up unlawful
New claims released"*

"The Commonwealth Bank of Australia (CBA) may not have acted lawfully in winding up its Storm Financial (Storm) badged index funds, Sydney barrister Ross Goodridge has claimed."


More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/8972.htm


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## specialed (13 April 2010)

Julia said:


> That's very disappointing behaviour on the part of the banks.
> Did you challenge them on their attempts to lend you more than you obviously were able to service?
> 
> Certainly reinforces the need to take responsibility for our own decisions and never to assume anyone else has our interests in mind.




Certainly agree with you Julia. The problem is that not everyone has the capacity to make informed decisions and we rely on the good faith, expertise and professionalism of others. When I buy a plane ticket I expect to travel safely, I'm able to fly small planes but when I hop on a Jumbo I am paying for someone to provide me a service, and hope the regulatory systems in place will offer added security. I should not have to research every pilot to check they are ok. I rely on the good name of the Airline. Does this mean, that when the plain crashes becauses of poor safety checks I shouldnt sue because I made an informed decision. The key is being able to be informed, and believiing what you have been told. Much of this storm fiasco appears to be about being informed, and acurately informed. Whlie there are many who used storm who were certainly new to investing and didnt research, there are also many who believed they were well informed, had at least a sound understanding on finance, but relied on the information sold to them by CBA and Storm. Any amount of research would have led many to the same conclusion, and they still would have invested. For many of the more informed the key to their security was the Margin call. This is front and centre of this debate. Again it is interesting noting the elements of the letter refererd to above that relate to margin calls



I didn't challange but should have challanged them . Would love to now reflect on their responses. Having said that it was within the last ten years that my bank encouraged me to upgrade from my Gold to a Platinum visa. Limit raise from 9 to 21 thousand. Nothing wrong with that except at the time I was back studying, living off a part time hospitality job, collecting Ausstudy and living with the folks. And they didnt want proof of income. This was one of the Big 4. After this nothing surprises me regarding the predatory nature of banks....


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## bunyip (13 April 2010)

specialed said:


> Bunyip,
> 
> I certainly agree with you on principle, however feel maybe it is also either a little simplistic or not a reflection of the reality of many who take out loans. Although a different circumstance, I do wonder what will happen to the tens of thousands of 1st time buyers in say two years time if (and when) interest rates hit 10 pc plus as predicted. Did the banks have any responsibility to ensure these customers would be able to service a home loan at that rate compared to the less than 5 percent the customers "bought in at".
> 
> ...




Specialed

Ah yes, the banks are notorious for aggressively pushing their products, but so lots of other businesses.
You go to MacDonald's (not that I have in the last eight years or so), order your meal, and then their well trained sales staff invariably ask _'And would you like drinks with that'?_
And of course many people go _'ummmm - yeah, OK'._
It's an aggressive sales pitch to sell you more of their products, and it works more often than not. 

Last time I bought a new pair of shoes, they tried to also sell me some outrageously priced U bute product to rub on them to keep them looking good. I told them no thanks, I have plenty of shoe polish at home. Then they tried to convince me that their product was far superior to regular shoe polish!
Three or four customers who bought shoes while I was trying on mine, all copped the same aggressive sales pitch.

Any woman whose been to hairdresser will be aware of how they push expensive hair care products to keep that new hairstyle looking 'just right'.

Banks are doing the same thing - pushing their product in an attempt to sell as much as possible.

It's an interesting question - how much responsibility do banks have to explain the possible consequences of interest rates rises?
Or for that matter, how much responsibility do they have to explain various other factors that could affect a borrowers ability to service their loan?

For example, when I borrowed half a million dollars to buy a rural property, did the banks have any responsibility to explain what effect a drought would have on my income, and thus my ability to meet my loan commitments?
Or did they have any responsibility to explain the possible consequences of a slump in cattle or wool or grain prices? 

When a young couple apply for a home loan, do the banks have any responsibility to explain that the birth of a couple of kids a bit further down the track could take the woman out of the workforce, stretch their finances, and perhaps result in them struggling to service their loan?

Where does the responsibility of the banks start and end in this regard? I don't have the answer - it's a grey area.
The banks would say, understandably, that it's the responsibility of borrowers to take into account all possible contingencies when applying for a loan.

My view is that when applying for loans, we need to be painstaking in our planning and research, make sure we know the facts and have allowed for all possibilities, don't rely on banks to point things out to us.
If we make a choice to borrow money for whatever purpose, then the onus is on us, first and foremost, to ensure that we can service the loan not only now, but also in the future when circumstances may have changed.

My parents had a saying...

Love all but trust few
Always paddle your own canoe

In the world of loans and finance and investment,  'paddle your own canoe' is a good policy to adopt.
Caveat emptor.


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## bunyip (13 April 2010)

specialed said:


> Again I agree Bunyip, however many many were not successful in business at all, with very little if any business knowledge and for some even the capacity to spend a long time researching was not their. And even if the did they may well have come to the conclusion as many did that this strategy was and is still heavily used by many very successful and now rich investors. Rather many existed much of or their whole working life in a PAYE environment.
> 
> 
> They saw a financial advisor who they perceived was responsible for knowing the business". Much has been made here and in the media regarding the way the CBA, or more specifically CGI liked to be "seen" at Storm events often providing relatively healthy sponsorship.  They were happy to attach their brand to this model and deliberately or otherwise this gave the impression to many that Storm could be trusted and dare I say, knew what they were doing.
> ...




Specialed

Your post sums up the main reasons why Stormers got into trouble - naivety, lack of research, lack of experience.

There are any number of reasons for this. The bottom line, however, is that you'd better know what you're doing if you're going to seriously invest in something as volatile as the stockmarket, or for that matter, any other business.
If you don't know what you're doing, then poke in slowly with tiny investments until you learn the ropes.

The results of going unprepared and inexperienced into any business can be catastrophic, regardless of the reasons for your lack of preparation or experience, and irrespective of whether you run the business yourself or employ the services of a manger.


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## Julia (13 April 2010)

specialed said:


> I didn't challange but should have challanged them . Would love to now reflect on their responses. Having said that it was within the last ten years that my bank encouraged me to upgrade from my Gold to a Platinum visa. Limit raise from 9 to 21 thousand. Nothing wrong with that except at the time I was back studying, living off a part time hospitality job, collecting Ausstudy and living with the folks. And they didnt want proof of income. This was one of the Big 4. After this nothing surprises me regarding the predatory nature of banks....



We all receive invitations to upgrade our credit cards all the time.
We always have the choice of whether to accept such a suggestion, or to be realistic about what we can afford.


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## bunyip (13 April 2010)

Julia said:


> We all receive invitations to upgrade our credit cards all the time.
> *We always have the choice of whether to accept such a suggestion, or to be realistic about what we can afford.*




So true. And so it is with any loan, whether it's for market investment through someone like Storm Financial, or for a home loan or a car loan or whatever - _*we  always have the choice of whether to accept what the lender is offering, or to be realistic about what we can afford.*_

People who are unrealistic about what they can afford, or simply don't know because they haven't done their homework, have to accept the consequences of their decision, not shovel the blame off on to someone else.


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## bunyip (13 April 2010)

*'caveat emptor' - a principle in commerce: without a warranty the buyer takes the risk.*

To the best of my knowledge, the banks gave no warranty regarding the suitability of their loans for Storm Financial clients. 

Again to the best of my knowledge, Storm Financial gave no warranty as to the suitability of their product to their clients.

In the case of both the banks and Storm, it appears to have been a case of 'caveat emptor'. Or in other words, _'Buyer beware, there's no warranty here - do your own research to decide if what we're offering is suitable for your needs.'_


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## specialed (13 April 2010)

bunyip said:


> *'caveat emptor' - a principle in commerce: without a warranty the buyer takes the risk.*
> 
> To the best of my knowledge, the banks gave no warranty regarding the suitability of their loans for Storm Financial clients.
> 
> ...




I suppose my questions is then..... whats all the fuss about ? why the resolution process, why does the CBA seem keen to aviod litagation, why the interest by ASIC, etc etc etc if it is simply a case of buyer beware ?


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## bunyip (13 April 2010)

specialed said:


> I suppose my questions is then..... whats all the fuss about ? why the resolution process, why does the CBA seem keen to aviod litagation, why the interest by ASIC, etc etc etc if it is simply a case of buyer beware ?





You'd have to ask them.

I make no claim that the banks are blameless - my only claim in regard to the banks is that all the blame should not be levelled at them.


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## specialed (13 April 2010)

I think this discussion sometimes moves in circles. I certainly agree that all the blame should not be levelled at the banks. However, Personally I don’t believe all the blame has been directed towards them, merely they are the only ones left standing with the money. This point was recently reiterated in the Goodridge letter. I eagerly await the ASIC report and to see if and where they perceive blame lies. Although don’t actually hold out much hope of either. I suspect if it does go so far then blame will be placed at the same place the original judge placed it  in making his determination in Dec 08. That blame lies either with the banks, with storm, with the clients or in a combination of two or three of the parties.

 It is unfortunate and a little ironic that we may end up in a situation whereby it is decided in the courts in the exact manner that it was indicated it needed to be, back in Dec 08. However, although this case was thwarted by the CBA back then, I suspect they will not have as much luck in thwarting future attempts to get this before the courts. 

Whether people feel the banks have any responsibility for this mess or not the reality is that the resolution process has now increased the resolve of many to see this go to trial.

Further I get the feeling that what little good will they may gained through the resolution process initially has well and truly gone. There appears to be two distinct groups; Firstly, those who have had no choice but to accept the offer, and whilst you cannot  say they have been coerced, they are certainly in no position, either financially or mentally to do anything but to accept. And secondly, those who are now very angry, feel that the compensation offer will do nothing to secure them anything of a future and therefore nothing is to be lost in pursuing this in the courts. 

 There are some who will pursue the CBA through the courts now if for no other reason to ensure the CBA are dragged through the process irrespective of the outcome. Sooner or later Ralph Norris will realise this and again step in.


----------



## Julia (13 April 2010)

specialed said:


> However, Personally I don’t believe all the blame has been directed towards them, merely they are the only ones left standing with the money.



At least you're honest enough to admit this is why Stormers (and the lawyers) are so fervently pursuing the banks, whilst essentially ignoring the role of the author of the whole failed proposition, Cassimatis.  The fairness or otherwise of such a strategy seems to be entirely irrelevant.

Much advantage can be taken of the bank's need to avoid a public relations disaster.  Better to appear to be the good guys concerned for the poor investors who claim to be unable to work out that they couldn't possibly service their borrowings if the market were to turn.



> There appears to be two distinct groups; Firstly, those who have had no choice but to accept the offer, and whilst you cannot  say they have been coerced, they are certainly in no position, either financially or mentally to do anything but to accept.



That's a very realistic assessment.  I can only slightly imagine the mental and psychological exhaustion some Storm investors will be feeling, even to the point that they no longer have the energy to be part of making any decisions.   



> There are some who will pursue the CBA through the courts now if for no other reason to ensure the CBA are dragged through the process irrespective of the outcome. Sooner or later Ralph Norris will realise this and again step in.



Well, I guess if people are so determined to maintain their stress levels through anger and the need for vengeance (and unable to exact revenge from the actual perpetrator in the form of Cassimatis) a wealthy bank will do just fine.
To hell with the shareholders or any actual sense of the real weighting of blame.


----------



## specialed (14 April 2010)

Julia said:


> Well, I guess if people are so determined to maintain their stress levels through anger and the need for vengeance (and unable to exact revenge from the actual perpetrator in the form of Cassimatis) a wealthy bank will do just fine.
> To hell with the shareholders or any actual sense of the real weighting of blame.




I dont know if peoples stress levels and anger is being maintained through a need for vengeance or more the fact that they have lost everything, and many now have no way to fund their future. I'm sure many actually fell a real sense of frustration with not being able to go after manny however lets face it, no Lawyer is going to chase him for them pro bono, with little chance of any gain. This job is left to ASIC to decide whether or not to prosecute. I'm not actually sure what some expect the Stormers to do with respect to Manny other then to publicly shame / blame him etc. Surely this will also "maintain their stress levels through anger and the need for vengeance". As you mention many have little fight left in them let alone trying to fight two battles. I may be wrong but I dont believe civil actions can lead to criminal convictions ?

Can anyone tell me what actually become of the Worrels inquiry. My understanding is that this was funded to the tune of some 500 million by ASIC (public money) and was running alongside the ASIC inquiry. Yet there has been no public report has there or did I miss it ?


----------



## Solly (14 April 2010)

specialed said:


> I dont know if peoples stress levels and anger is being maintained through a need for vengeance or more the fact that they have lost everything, and many now have no way to fund their future. I'm sure many actually fell a real sense of frustration with not being able to go after manny however lets face it, no Lawyer is going to chase him for them pro bono, with little chance of any gain. This job is left to ASIC to decide whether or not to prosecute. I'm not actually sure what some expect the Stormers to do with respect to Manny other then to publicly shame / blame him etc. Surely this will also "maintain their stress levels through anger and the need for vengeance". As you mention many have little fight left in them let alone trying to fight two battles. I may be wrong but I dont believe civil actions can lead to criminal convictions ?
> 
> Can anyone tell me what actually become of the Worrels inquiry. My understanding is that this was funded to the tune of some 500 million by ASIC (public money) and was running alongside the ASIC inquiry. Yet there has been no public report has there or did I miss it ?




specialed, not that much !

http://www.investordaily.com.au/cps/rde/xchg/id/style/8091.htm

Wait for around the end of May for ASIC to make further comment.


----------



## Smiley (14 April 2010)

"Can anyone tell me what actually become of the Worrels inquiry. My understanding is that this was funded to the tune of some 500 million by ASIC (public money) and was running alongside the ASIC inquiry. Yet there has been no public report has there or did I miss it?"

In answer to that query - it has reported to ASIC and that report is not a public report.  My understanding is that there are numerous reasons, such as advice to prosecute and confidential ongoing investigations.


----------



## Solly (16 April 2010)

*"ASIC launches Storm Financial website"*

"The Australian Securities and Investments Commission (ASIC) has launched a website to assist victims of collapsed Queensland-based advisory firm Storm Financial."

More in Business Spectator here;

http://www.businessspectator.com.au/bs.nsf/Article/ASIC-launches-Storm-website-pd20100414-4H8UL?OpenDocument&src=hp7

Here's the link to the ASIC site regarding the announcement;

http://www.asic.gov.au/ASIC/asic.nsf/byHeadline/10-79AD%20ASIC%20launches%20Storm%20investor%20website?opendocument


----------



## Solly (16 April 2010)

*"CBA asked to rethink Storm deal"
*
"Former investors in collapsed Storm Financial have asked Commonwealth Bank of Australia to renegotiate the resolution scheme previously hailed as a landmark settlement."

Read more by Duncan Hughes in the AFR of April 16, 2010.


----------



## Solly (23 April 2010)

As the Resolution Scheme progresses, why do I sense a 'Change in Mood' with some of the Stormers ?​

​


----------



## Mash (25 April 2010)

Solly
What do you mean by change in mood........ It has been a rollercoaster...... now there is much more anger and resolve.... We won't go down without a fight... that has never changed !!!!:nono::nono:


----------



## Solly (25 April 2010)

Mash said:


> Solly
> What do you mean by change in mood........ It has been a rollercoaster...... now there is much more anger and resolve.... We won't go down without a fight... that has never changed !!!!:nono::nono:




Mash, 'much more', that is the change that I have noticed......


----------



## bunyip (25 April 2010)

Mash said:


> Solly
> What do you mean by change in mood........ It has been a rollercoaster...... now there is much more anger and resolve.... We won't go down without a fight... that has never changed !!!!:nono::nono:




Mash

What exactly do you Stormers want?

Justice?
Money - irrespective of justice?
Or something else?

You tell me. 
Think very carefully before you answer - we've seen too many emotional, angry, rude and ill-considered outbursts from you already.
I've asked you fair questions and I've asked them courteously. I expect you to answer in the same manner - otherwise don't bother answering at all.


----------



## Mindstorm (25 April 2010)

bunyip said:


> Mash
> 
> What exactly do you Stormers want?
> 
> ...






Bunyip,

I can only speak for my own family, and we would like to see justice, and only justice.  

I also believe that justice is what many of the former storm clients we've met, who've had dealings with some of the biggest, and who we thought were the most trustworthy, banks in Australia.

We've never expected anyone to pay our way through life.  Like many former storm clients we've met since this all went down the tube, we were all just trying to make sure that we could retire with no monetary worries, and at no burden to the Australian taxpayers of the future.

I am being very careful of what I say here.  I have to be that way because one of the biggest banks in Australia is holding my family to ransom right now, and I have a further fight with another of their ilk in the future.

We have to do exactly what they say, or suffer their full wrath.

They have more money than us, (their shareholders, so they are not gambling with their own money!), they are more powerful than us, what would you advise us to do?

We 'stormers' as you call us, have been taken to the wall, financially, emotionally, physically, (health wise), and not neccessarily in that order.  We live on a rollercoaster, we never know from one day to the next what will be asked or expected of us.

Do you really believe that the majority of us would have put ourselves through of all this anguish if we had not been duped by storm and the banks, and that we felt that we had not been TRULY represented by those who we trusted?

Sure, even I have to admit that there were Storm clients who were already financially secure, and yes, they were greedy to want more than they needed to fund a secure retirement.

But, Bunyip, those clients are a very small minority in the scheme of things.

Please try to look at the bigger picture.

I don't want, and never expected, to find myself in the position where YOU were funding MY retirement.  I thought I had that base covered.

In fighting for my family to get justice from the banks, I am also fighting for YOU so that you don't have to pay for my/our retirement.

MS


----------



## Solly (26 April 2010)

*"Reform of investment advice system not a fair cop"*

"SEAN McArdle, a Sunshine Coast police officer stung by the Storm Financial collapse, has no confidence in the Rudd government's plans to abolish the commissions paid to financial advisers as a cure for unethical or unlawful conduct."

More by Hedley Thomas in The Australain here;

http://www.theaustralian.com.au/politics/reform-of-investment-advice-system-not-a-fair-cop/story-e6frgczf-1225858120131


----------



## Solly (26 April 2010)

*"Financial advisers to lose kickbacks"*

"More than a year since the multibillion-dollar collapse of Storm spotlighted the fast edge of practices in the industry, the Minister for Financial Services, Chris Bowen, will reveal a package of measures today to reduce fees and remove perverse conflicts of interest."

More by Jacob Saulwick in the SMH here;

http://www.smh.com.au/business/financial-advisers-to-lose-kickbacks-20100425-tlo8.html


----------



## Solly (26 April 2010)

*"Storm negative equity recovery futile: liquidator
Report to creditors imminent"*

"The liquidator of Storm Financial (Storm) has labelled attempts to recover $1.8 million worth of negative equity lost in the collapse of the advice firm as a futile exercise."

More by Kate Kachor in In Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9025.htm


----------



## Solly (26 April 2010)

*"Retirees to gain $50,000 in post-Storm collapse reforms"*

"Townsville retiree Helen Rubin said the changes would make a "great difference". Ms Rubin, who cannot discuss her personal Storm losses because of legal action, said the recommendations went further than last year's federal parliamentary inquiry into the collapse."

More by Stefanie Balogh in The Courier Mail here;

http://www.couriermail.com.au/business/retirees-to-gain-50000-in-post-storm-collapse-reforms/story-e6freqmx-1225858099042


----------



## gav (26 April 2010)

Solly said:


> *"Retirees to gain $50,000 in post-Storm collapse reforms"*
> 
> "Townsville retiree Helen Rubin said the changes would make a "great difference". Ms Rubin, who cannot discuss her personal Storm losses because of legal action, said the recommendations went further than last year's federal parliamentary inquiry into the collapse."
> 
> ...




This from the same article:

_"The Rudd Government will also change the law to force financial advisers to always act in the best interests of their clients."_

Ummm.. Does this mean advisors don't have to act in the best interest of their clients at the moment?


----------



## Julia (26 April 2010)

gav said:


> This from the same article:
> 
> _"The Rudd Government will also change the law to force financial advisers to always act in the best interests of their clients."_
> 
> Ummm.. Does this mean advisors don't have to act in the best interest of their clients at the moment?



Amazing, isn't it!   Obviously it's idealistic to suggest that this should go without saying, and certainly not require legislation.


----------



## Julia (26 April 2010)

Solly said:


> *"Retirees to gain $50,000 in post-Storm collapse reforms"*
> 
> "Townsville retiree Helen Rubin said the changes would make a "great difference". Ms Rubin, who cannot discuss her personal Storm losses because of legal action, said the recommendations went further than last year's federal parliamentary inquiry into the collapse."
> 
> More by Stefanie Balogh in The Courier Mail here;



The article doesn't make clear how 'retirees are going to gain $50.000'.

A quote from the article:


> "I welcome expanding the availability of low-cost basic advice, which is so important, especially advice through superannuation funds," she said.




Where is it stated that advice - charged for to replace the trail commissions - will necessarily be low cost?

I suspect a few heralding these changes as being the end of any shonky advice, and certain to see clients better off, might be disappointed.
And they may not be so enthusiastic when faced with a charge of several thousand dollars for a very basic financial plan.

The Opposition's suggestion seems to me to be more sensible:  i.e. that clients may choose to pay upfront, or have the option of investing in commission bearing investments, given these are fully disclosed.
(I've actually been under the impression that FA's have been disclosing this to clients for a few years now, but perhaps I'm wrong?)


----------



## Julia (26 April 2010)

I wonder where this new ruling (if it gets through the Senate which isn't looking likely at present) would leave full service Stockbrokers?  Their high rates of brokerage include commission for advice.


----------



## Solly (26 April 2010)

*"Storm group backs financial advisers shake-up*"

"The Storm Investors Consumer Action Group says new regulations for financial advisers could prevent a repeat of the Storm Financial crisis that saw hundreds of investors lose their savings."

From the ABC here;

http://www.abc.net.au/news/stories/2010/04/26/2882787.htm


----------



## bunyip (27 April 2010)

Mindstorm said:


> Bunyip,
> 
> I can only speak for my own family, and we would like to see justice, and only justice.
> 
> ...








Mindstorm

I'd be wanting justice too if I felt that somebody had done the wrong thing by me and caused me to lose a lot of money.
But justice is only good if it's dealt out to the right people. 

Whenever there's talk of justice for Storm causalities, it invariably seems to be centred around taking action against the banks. 
I'm no apologist for the banks, nor am I naive enough to claim they're blameless. But I cannot see that they're the main reason why Storm clients were wiped out. Therefore I feel they shouldn't be copping all the blame or bearing the brunt of the legal action to get justice for former Storm clients.

Here are a couple of criticisms that I've  seen repeatedly levelled at the banks in relation to their dealings with Storm Financial clients......

1. *The banks shouldn't have lent us so much money.*

Well OK, perhaps they shouldn't have. But like all businesses, banks have a product to sell, and that product is loans. The more product they sell, the more profit they make, just like any other business.
If I approach a furniture shop to buy a new dining room suite, and they end up talking me into a time payment plan that allows me to buy a new lounge suite and a new bedroom suite as well, plus a couple of grands worth of outdoor furniture for my entertainment area, whose fault is that? Can I blame them for selling me more product than I really wanted or could reasonably afford? Or should I blame myself for recklessly purchasing so much furniture that I'll be battling to pay it off?

If Storm clients or their representative applied for a bank loan, and figures were provided to the bank to show how the loan commitments would be met, have the bank really done anything wrong in granting the loan?
If the bank falsified figures such as the clients income or house valuation, then certainly the bank is guilty of immoral and illegal conduct, and should be brought to account.
But I've never seen any Storm client who can provide evidence of a bank falsifying figures on loan applications. Without evidence, how can the bank be seen as guilty?

2. *The banks sold down our investments near the bottom of the market. 
The bank shut down the fund we were invested in.*

OK - I can well imagine the shock and anger you'd feel if your investment was sold out from under you, particularly if you weren't even in margin call and had never defaulted on your loan commitments.
But here again, we need to ask if the bank had good reasons for taking this action, and if they were legally entitled to do so.

In regard to the funds that were closed down - I'd be pretty sure that under the terms and conditions of the funds, the banks were legally entitled to close the funds at their discretion.

With regard to margin calls, many Storm clients have stated that nobody told them they were in margin call. 
The banks claim they told Storm when clients were in margin call, and that Storm failed to pass this information on to their clients.
A few months ago on this thread, someone posted a copy of a bank document on margin loans - as I recall, the document clearly stated that it was the clients responsibility to monitor their investments to ensure that they didn't go into margin call, and if they did go into margin call, to deposit funds into their accounts within a defined time to cover the margin call. Otherwise the bank would exercise its right to sell down the investment.

This appears to be what happened. Accounts went into margin call, margin calls were not met because clients were not told about them, and had not monitored their situations themselves to know when a margin call was imminent. So the banks sold down the investments to protect themselves from further downside risk.
Here again, the question is whether this action was fair and reasonable by the banks, and was it legal? As near as I can tell from the copy of the loan documents I've seen, it appears that the banks were well within their rights to sell down the investments if they were in margin call that hadn't been met.

I can't claim to know the exact details of the dealings and the agreements between Storm clients and banks. I'm happy to concede that some of what I've said above may not be entirely correct. I can only offer an opinion based on the information I've seen so far.

One thing I do know with certainty, however, is that if you invest in any business, as the owner of that business you have significant responsibility to make sure you know something about the business, and to ensure you keep yourself updated with developments in your business. This holds true regardless of whether you manage the business yourself, or employ a manager to run it for you.
Employing a manger does not absolve the business owner from the responsibility of keeping his finger on the pulse, particularly in regard to risk management.

Anyone who knows investment and finance will be aware that poor risk management was the primary reason for the wipe-out of Stormers portfolios.
Risk management was the responsibility of Storm Financial first and foremost - you were paying them to manage your business, after all. 
Secondly, risk management was the responsibility you, the owner of the business. Part of risk management involved, or at least should have involved, keeping a very close eye on your manager to make sure he was doing the job you were paying him for.

I owned and managed a grazing property in western Queensland. One of my neighbours was a fifty thousand acre property that employed a manager. 
The owners of the property flew out from Brisbane once a month to check up on the manager and make sure he was running the property to their satisfaction. Had he let their livestock start dying in a drought, or in some other way mismanaged their business and started losing them money, there's no doubt that they would have over-ruled his management decisions, or probably even fired him.

The problems of Storm clients began when their business manager, Storm Financial, allowed their business to be decimated once the global financial meltdown set in.
Storm could have taken action to protect their clients from catastrophic downside risk. For whatever reason, they failed to do so. Clients themselves also failed to do so.

Practically no risk management during a major stockmarket crash and economic meltdown = wipe-out for Storm clients. 
For that, I don't think the bulk of the blame can be levelled at the banks.
If the pursuit of justice rather than money is really what motivates Storm clients to continue the fight, then I'd say you should have the principals of Storm Financial squarely in your sights, rather than the banks.

If the banks can be proven to have done anything illegal, then they should definitely be pursued for compensation. But the bulk of the blame clearly does not belong to the banks.


----------



## trainspotter (27 April 2010)

Better late then never I spose ! 

*Financial advisers to lose commissions*
By Samantha Hawley

Updated Mon Apr 26, 2010 11:31am AEST 


No more kickbacks: The Government says legislation cracking down on financial planners will make the industry more professional. (ABC News: Gary Rivett)

The Corporations Act will also be amended so financial advisers are required by law to put the interests of their clients first. 

Financial Services Minister Chris Bowen says he is not attacking the financial services industry, he is just making it more professional. 

"Thousands of Australians have their life savings wiped out by inappropriate financial advice," he said.

"They have a right to be angry and we have an obligation to act."

The announcement is the Government's response to a parliamentary inquiry into the financial products and services sector, which began after the collapse of Storm Financial and Opes Prime.

For the full story http://www.abc.net.au/news/stories/2010/04/26/2882479.htm


----------



## specialed (27 April 2010)

bunyip said:


> Mindstorm
> 
> 
> Anyone who knows investment and finance will be aware that poor risk management was the primary reason for the wipe-out of Stormers portfolios.
> ...




Bunyip,

Not withstanding your comments regarding the loans issue which I agree with to some extent, I was of the opinion that clients thought there was a risk management strategy in place. That being, the provision of the margin call, which if activated properly and as the clients understood it would be, would have left them, battered, maybe decimated, but not in negative equity and unable to re-enter the market, let alone losing their homes. The issue of the margin call is at the centre of many victims "blame towards the banks", and in time will become the key issue in law suits against the CBA i'm sure.

I am not suggesting that storm could not have taken more action to protect their clients, however it does not appear (at this stage or to my knowledge) that storm actually acted illegally towards their clients in the final moments. Yes there are concerns with respect to loan documents early in the piece, I accept. However, it is the behaviour of the banks with respect to the margin call that many are concerned about. I draw your attention to the much publicised Sean Mccardle.

There is no doubt that one would expect the storm advisors to be tracking the investments. However one could also expect the CBA to act with similar diligence. Evidence presented has since shown that they had little capacity to deal with events as they unfolded. I would love to see the number of clients as a percentage of all who actually received a margin call at 90 % as instructed, as opposed to the 80 %, 127% and 142 odd % as has been claimed.

There are those who were able to make a margin call, if given the opportunity, yet they were not given the chance. For those the blame clearly, and fairly is directed towards those who made the margin call in the particularly haphazard, and possibly illegal way that it was made. This of course was CGI / CBA.


----------



## specialed (27 April 2010)

bunyip said:


> With regard to margin calls, many Storm clients have stated that nobody told them they were in margin call.
> The banks claim they told Storm when clients were in margin call, and that Storm failed to pass this information on to their clients.
> A few months ago on this thread, someone posted a copy of a bank document on margin loans - as I recall, the document clearly stated that it was the clients responsibility to monitor their investments to ensure that they didn't go into margin call, and if they did go into margin call, to deposit funds into their accounts within a defined time to cover the margin call. Otherwise the bank would exercise its right to sell down the investment.
> 
> This appears to be what happened. Accounts went into margin call, margin calls were not met because clients were not told about them, and had not monitored their situations themselves to know when a margin call was imminent. So the banks sold down the investments to protect themselves from further downside risk.




Bunyip, 

I think this is where we differ in our understanding. As I understood it the agreement stated that the banks could and agreed they would make a margin call in the event the 90% LVR was hit. Once made the clients had five days to respond. There has been much argument as to whether the client or the planner should be contacted. As it stands the agreement stood that the client would be contacted. If I remember correctly the CBA was sure they had changed their policy away from to notification of the advisor but could not identify when this change was made and who was notified of the change. It has certainly not be documented in any agreements. Further, it was to be made at 90 percent, however it has been shown that there is much inconsistency as to what LVR clients were "called in, and in what time frame. This was the source of much interest in the inquiry where some clients where not notified by the banks for some 8 weeks. None (or maybe few)  had the opportunity to meet the margin call. 

There is also alot of debate as to the reliability of the data available to the clients (the website provided by CGI (CBA) )to actually monitor their investments. Again the CBA has alluded to their inability to provide reliable data for all of their clients in a carefully worded statement during the senate inquiry. 

One thing the I do agree with is that "the banks sold down the investments to protect themselves". But this was not for fear of the  potential losses at the hands of storm clients, but a need more generally by the CBA to liquidate and acquire cash very quickly during the GFC and possibly after a number of acquisitions....


----------



## Cascade (27 April 2010)

Bunyip, 
I agree with your comments in regards to people blaming the Banks for lending them the money in part.  I am sure when the markets were going up, if a request for further increase in their loans was declined there would have been people complaining that by not lending them the money, the Bank's were costing them the opportunity to make further money by not giving them money to invest.  This said, the CBA (I am not familiar with the other Bank's policy) continually changed their policy to make it easier to lend money out, not just to Storm clients but to all their clients in a bid to make their clients advocates of the CBA and thus improving the Banks customer service satisfaction.  Whilst the VAS system has been used internally for a number of years, the Bank was able to control what decisions the system generated.  The VAS system was used across all of Australia and it was not until the Bank realised that all staff in Australia were using the system in a way that they did not intend it to be used to generate valuations, that they made up policies that did not previously exist regarding the use of VAS.  It would be interesting to know how many non storm clients there are out there that have Home Loans based on over inflated figures generated by VAS.  So Bunyip, whilst I agree with you in regards to people complaining about the fact that they should not have been lent the money, it is evident that the Bank realises that their policies were too liberal and enabled loans to be approved that should not have been approved in the first place.
In regards to the Margin loans, I would have thought this was clear cut, everyone that I know who has margin loans knows that if a margin call is made and they do not act, the Bank will sell their shares.  The argument that Storm clients should have been watching their portfolio or that Storm should have been is irrelevant, the Bank should have sold the shares automatically after no action was made after the initial call they made and not make some flippant comment about them changing the rules to relinquish their responsibilities.   
There was a rumour that the CEO went on an overseas holiday in Dec 08 after the Bank spoke to EC and said that he wanted the whole thing cleaned up before he returned and made the call then to sell, and we all know what happened next.


----------



## Solly (28 April 2010)

From Firths, The Compensation Lawyers website.

"From what we have learnt by talking to people affected we believe that there are a number of similarities between the Goodridge case and the Storm Financial cases. Indeed the case for Storm clients may even be stronger....."


http://www.firths.com.au/site/storm.html


Can anybody add any further comment or opinion regarding the statements from Firths ?


----------



## Solly (28 April 2010)

*"ASIC's financial overhaul welcomed with caution"*

"Even some apparently loyal Emmanuel Cassimatis sympathisers say it will lead to the kind of fee structures used by Storm which charged an excessive up-front 7 per cent fee and around 1 per cent in on-going annual commissions."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/04/28/133745_business_desk.html


----------



## Solly (30 April 2010)

*"BoQ may be forced to reveal Storm Financial risk review"*

"BANK of Queensland is battling demands to hand over an internal risk review after clients of failed advisory group Storm Financial had investments decimated."

More by Liam Walsh in The Courier Mail here;

http://www.couriermail.com.au/business/boq-may-be-forced-to-reveal-storm-financial-risk-review/story-e6freqmx-1225860392823


----------



## Solly (30 April 2010)

I'm currently out with my Stormer mate. He's looking a bit despondent I don't think he's got much to sing about at the moment.

On another point has anybody heard from Big Max lately?
Has he cleared Cutoms yet?


----------



## A Hidden Agenda (3 May 2010)

I think the SICAG boys are busy organising the defence of all things Storm and Cassimatis in readiness for Slater & Gordon's pending legal action against the advisers. Many of these same advisers continue to provide advice in various businesses around the country.

SICAG have certainly helped all those victims of Storm in the fight against the lenders but not much said by them about Storm and its fellow travelers. 

Apparently it's all about who has the deepest pockets, is it also because we wouldn't want friends, family and the funders of the first Townsville/Cairns roadshow put under any further scrutiny?


----------



## bunyip (3 May 2010)

A Hidden Agenda said:


> I think the SICAG boys are busy organising the defence of all things Storm and Cassimatis in readiness for Slater & Gordon's pending legal action against the advisers. Many of these same advisers continue to provide advice in various businesses around the country.
> 
> SICAG have certainly helped all those victims of Storm in the fight against the lenders but not much said by them about Storm and its fellow travelers.
> 
> Apparently it's all about who has the deepest pockets, is it also because we wouldn't want friends, family and the funders of the first Townsville/Cairns roadshow put under any further scrutiny?




I think you've pretty well summed it up.


----------



## Solly (6 May 2010)

*'Litigator examines joint action against CBA
New Storm case"
*
A Storm Financial litigator involved in a planned action against CBA expects to lodge proceedings this month.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9143.htm


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## Smiley (6 May 2010)

More legal action publicised:
http://www.townsvillebulletin.com.au/article/2010/05/06/136321_news.html

Also, interesting Levitt and Robinson are the lawyers for ex-storm advisers and that they are now representing stormified clients - sounds like a conflict of interest to me.

Levitt also is charging large up front fees - $5,000 -$20,000 

and Manny phoning journalists promoting Levitt - hmmm. . . .


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## Pindibog (6 May 2010)

Smiley said:


> More legal action publicised:
> http://www.townsvillebulletin.com.au/article/2010/05/06/136321_news.html
> 
> Also, interesting Levitt and Robinson are the lawyers for ex-storm advisers and that they are now representing stormified clients - sounds like a conflict of interest to me.
> ...




Its just like chinese whispers. So accurate....NOT


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## Solly (6 May 2010)

Solly said:


> *'Litigator examines joint action against CBA
> New Storm case"
> *
> A Storm Financial litigator involved in a planned action against CBA expects to lodge proceedings this month.
> ...




From this article..
"Levitt would not comment on the number of parties involved in joint venture discussions, nor would he confirm or deny one of the firms is Shine Lawyers (Shine), the firm linked to Erin Brockovich."

If this is proved correct, I wonder if Erin Brockovich will have any public profile in the case or proceedings.

http://www.shine.com.au/erin/


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## A Hidden Agenda (6 May 2010)

Pindibog said:


> Its just like chinese whispers. So accurate....NOT




Given your obvious intimate knowledge of the situation perhaps you could enlighten us as to the non-factual statements, because from where I stand two are factual (or at least been reported as so) and the other could only be known by the parties to the conversation so unless you are EC, a friend of EC, the journalist or spoke to the journalist then you wouldn't know.

Of course you may have spoken to EC and he said that he didn't, given he apparently didn't know he was the Managing Director of his own company you could drawn your own conclusion as to the veracity of that statement.


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## Smiley (7 May 2010)

Pindibog said:


> Its just like chinese whispers. So accurate....NOT




Unfortunately, this is not just Chinese whispers, but from the mouth of Levitt himself - I hear well and don't need to get my ears cleaned.

I went to the Townsville meeting Levitt spoke at and took  notes and he stated that the stormified would be expected to front up at least $5,000-$20,000 for his planned (though after more than a year not initiated) class action. 

However, after criticising the CWB resolution scheme he asked those at the meeting to join up with his firm so that they could get the $5,000 for advising them on it.

When someone asked what class action experience his firm had - he stated none but that he could hire the best barristers to run a class action. I just hate to see the stormified throw away more money . . . .

Also from an April article in the Tville Bully:

"In an interesting development, Levitt Robinson is representing, as well as former clients, some of Storm's former leading players and financial advisers, such as its national business development manager Ron Jelich.

When it was put to Levitt principal Stewart Levitt this was a conflict of interest, he rejected the assertion, saying he would not represent anybody defending a claim.

He represented 'almost all' the former Storm employee representatives and that the logical path was to make peace with them and 'go after the people with the money'. . . .

It seems absurd that financial advisers who were telling clients to sell up to 100 per cent of their portfolios amid the crash, are now joining clients, many of whom agreed to the sell recommendations, to go the banks for selling them out without approval."

Here is a link for the entire story: 

http://www.townsvillebulletin.com.au/article/2010/04/07/128325_business_desk.html


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## Solly (13 May 2010)

*"Ex-Storm clients call for govt compensation
Clients petition PM"*

"Former Storm clients with links to a number of Australian banks have petitioned the government over compensation."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9196.htm


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## Solly (13 May 2010)

*"Angry Storm Financial victims put Prime Minister on notice"*

"Storm Financial victims hope to gather thousands of signatures to pressure the Federal Government into paying compensation for their huge losses"

Read more on page 11 in The Courier Mail of May 13, 2010.


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## bunyip (13 May 2010)

Solly said:


> *"Angry Storm Financial victims put Prime Minister on notice"*
> 
> "Storm Financial victims hope to gather thousands of signatures to pressure the Federal Government into paying compensation for their huge losses"
> 
> Read more on page 11 in The Courier Mail of May 13, 2010.




LOL.....As usual it's all someone else's fault!

First it was the banks, now it's the Federal Government.
Meanwhile, the real culprit rarely gets a mention as he hunkers down in his Brisbane mansion.


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## Solly (13 May 2010)

bunyip said:


> LOL.....As usual it's all someone else's fault!
> 
> First it was the banks, now it's the Federal Government.
> Meanwhile, the real culprit rarely gets a mention as he hunkers down in his Brisbane mansion.





bunyip, I was thinking of going incognito here in a couple of weeks to see if I can pick up any goss on the ground. Was kinda hoping GG was back from Almaty by then and could join in as well. Got a spare lapel mic and could be very interesting


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## Solly (18 May 2010)

Solly said:


> *"Ex-Storm clients call for govt compensation
> Clients petition PM"*
> 
> "Former Storm clients with links to a number of Australian banks have petitioned the government over compensation."
> ...




Last time I checked the petition I think there were only about 387 people who have registered. 
Looks like the Stormers may now need to hope that Tony's Team may give them some sort of lifeline.


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## Solly (19 May 2010)

*"Keeping Storm's victims in mind"*

".. a petition launched by Storm Financial investors addressed to the Prime Minister, Kevin Rudd at www.petitiononline.com/vfahmg/
comes close to expressing the frustration and anger of those who trusted in the Townsville-based financial planner.

The language is raw and some of the emotional hyperbole is easy to dismiss. But it would be a mistake to ignore their case."

More in The Age by Stuart Washington here;

http://www.theage.com.au/business/keeping-storms-victims-in-mind-20100518-vc6e.html


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## Lone Wolf (19 May 2010)

I wasn't going to post in this thread because it's hard to get all the facts together, you only seem to get half the story from every person you talk to. But now there's a petition to make the taxpayers compensate stormers for their losses. So as a taxpayer I guess I should find out the details. I admit to not reading all 4844 posts in this thread, although I have read most. So if I ask a question that's been explained somewhere else, my apologies, just tell me it's in the thread somewhere and I'll go looking for it.   

The petition makes many accusations but offers no evidence. "corrupt banking practices... inflating customers’ assets; ignoring customers’ current liabilities; inflating house valuations so more money could be borrowed;" Where might I find this evidence? In any financial contract I've been a part of, I've had to sign a declaration stating that the information in that document is correct. So when was the incorrect information added? Surely the trail of signed paperwork will lead us to the guilty party? 

Many stormers have commented that the loans were too big and they could never meet the repayments. Did they sign the form to approve the loan? Did the bank debit the loan payments from their savings account? If so, why didn't they notice large sums of money being withdrawn from their account to pay the loan they couldn't afford to pay? There are thousands of ex storm clients claiming to be victims. Obviously some of them must have noticed that the figures didn't add up. But they did nothing about it. These are the ones that deserve what they got, but sadly there's no way to tell who these people are.

How much compensation are we talking about? I'd have thought that they'd still lose as much money as what would've been lost had they been stopped out at the legitimate margin call level. Surely they don't expect to get the initial investment returned? I ask because of the number of people complaining that because of corrupt banks they've lost all their retirement money. Even if there was no bank corruption they still would have lost most of their money. Anyone using high leverage to invest in the markets prior to the crash got stopped out on margin calls, and that wouldn't leave you with much in the retirement fund. Unless you had a stop loss, but that's an issue between the client and Storm, it's not the banks problem.

Of course it's more complicated than this because what would they have done once stopped out? Some would reenter with what they have left, throwing good money after bad. Those people would either lose every cent, or get lucky. Others would have sat on the sidelines too scared to reenter the market and would've missed out on recovery. I'd say that's is quite likely. It's easy to look back and say "Oh I would have reentered at about 3000 and sold again when we got to 5000 and I'd now be in cash." But in reality it's not that easy, especially for people who previously didn't pay any attention to the market. I thought compensation was for people who, due to no margin call being issued, went into negative territory and still owe the banks money. But some make it sound like they expect to be back at pre-crash levels.

There's something not quite right about, in a petition for government compensation, commenting that you don't want to rely on government handouts. It would make sense if the petition was for the government to fully investigate the matter on behalf of storm clients, but it's not. The petition is for full and immediate compensation to be paid. Then, try to get some of that back from the banks. This is all wrong. I would agree to the government paying for the cost of the investigation because the truth should not remain buried simply because you didn't have enough money to dig it up. However, at the end of the day, the people found to be at fault should pay back all costs involved in the investigation. Even if the clients themselves were identified as supplying false information. The petition ends with "We want justice..." But that's not what this is at all. Justice is finding who is at fault and penalizing them for it. Demanding full and immediate government compensation regardless of the the findings of any investigation is simply a grab for cash wherever you can get it.

Also something that concerns me - How does the petition recognise each signature as being unique? Do you provide your address and phone number, or just an email address? Do the names get verified somehow later? I note that the very first person to sign the petition signed it a second time further up the page with a comment "I forgot to mention...". It's not a discussion forum, it's a petition. You can't sign multiple times. It makes me seriously wonder how legitimate the rest of it is. If they thought they might get some money out of it you can bet there are people out there making up fake names on webmail accounts to grow the list. I certainly don't mean to imply that all stormers are like this, but not all stormers are victims either.


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## sailteam30 (21 May 2010)

Lone Wolf - Unfortunately I am one of those people who attempted to secure a modest income for my future retirement by investing ALL my super and savings in Storm (on the advice of several work mates who had been in it for years - my timing was impecable, I got in 12 months before the GFC - but that is another story). 

However,to cut to the chase, I also feel that the petition does not look right when you have people making multiple entries - but my sympathy goes out to the comments of the people who have been ruined by a system dominated by greed.

As an example - I took out a home loan 2 years ago with a bank - lets call it ABC - this bank allowed me to borrow money on my house through Storm on the fact that 

 "a few houses have been sold in your vicinity and we will allow you to borrow XXX,XXX dollars to invest in Storm"

I have now gone through the so called Resolution Scheme with ABC and they now wish to value my house again, but this time they are sending out a professional valuer to take pictures and look at house plans.

Why do they now take a huge interest in "doing it by the book" - that is using business ethics  when 2 years ago I did not sight a person representing ABC?


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## bunyip (21 May 2010)

Lone Wolf said:


> I wasn't going to post in this thread because it's hard to get all the facts together, you only seem to get half the story from every person you talk to. But now there's a petition to make the taxpayers compensate stormers for their losses. So as a taxpayer I guess I should find out the details. I admit to not reading all 4844 posts in this thread, although I have read most. So if I ask a question that's been explained somewhere else, my apologies, just tell me it's in the thread somewhere and I'll go looking for it.
> 
> The petition makes many accusations but offers no evidence. "corrupt banking practices... inflating customers’ assets; ignoring customers’ current liabilities; inflating house valuations so more money could be borrowed;" Where might I find this evidence? In any financial contract I've been a part of, I've had to sign a declaration stating that the information in that document is correct. So when was the incorrect information added? Surely the trail of signed paperwork will lead us to the guilty party?
> 
> ...




I agree with the views of Lone Wolf - I think he's given a pretty fair overview of the situation regarding the petition for Government compensation for Storm victims.

Maybe that's the intended purpose of Rudd's proposed new mining tax - to compensate Stormers!
Seriously, this is yet another attempt at a money grab - a clear demonstration that money is seen as more important than justice.

Interesting to see that Jelich has signed the petition. He was a Storm adviser and as I understand, the main promotions man for Storm. His advice cost a lot of people a lot of money. Now he's blaming the government and demanding that they compensate him for the money he lost. This character and his kind make me sick.

If the government paid up it would be ordinary Australian taxpayers who would really be footing the bill. 
I don't see why I should contribute one single dollar towards compensating Storm clients for their investment mistakes. 
They should never have gone near Storm Financial, and they wouldn't have, if they'd put some effort into financially educating themselves. 
People who put in the effort to acquire basic working knowledge of finance and investment, were savvy enough to steer clear of the Storm Financial debacle. 

Everyone has ample opportunities to get themselves some basic education in finance and investment matters. 
There are no excuses for people to go through life without educating themselves financially. I can understand younger people getting caught out by the allure of sensational profits through Storm, but older people should have known better than to put all their eggs plus massive borrowings into the same basket. 
Did they learn nothing from the lessons of the 1987 stockmarket crash? 
Did they really think it couldn't happen again? 
Did they really think that margin calls were their safety net? 
Did they not realise that losses are already significant by the time a loan goes into margin call? If they didn't, they should have.

And now they want me and other taxpayers to bail them out. No thanks, not interested.


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## shibby (22 May 2010)

bunyip said:


> I agree with the views of Lone Wolf - I think he's given a pretty fair overview of the situation regarding the petition for Government compensation for Storm victims.
> 
> Maybe that's the intended purpose of Rudd's proposed new mining tax - to compensate Stormers!
> Seriously, this is yet another attempt at a money grab - a clear demonstration that money is seen as more important than justice.
> ...




Dear Mr Bunyip
What I don’t understand is why you really believe that we would care what you think of us Stormies, talk about illusions of grandeur all your pontificating about how wonderful you are and how you would never do this and how uneducated, greedy, we all are.

Guess what your life isn’t over yet and by continually reading; and reading; and here we are still reading your comments one gets a pretty clear picture of who and what you are or let me re phrase that, what you think you are. 
It’s amazing really with anonymity you can paint yourself as anything you would like to be, I paint you as a rather conceited buffoon. You would have to be fairly young I would say about 40 a member of the me generation otherwise you wouldn’t be so conceited to think that we would even care what you thought of us. 

Your life isn’t over yet and my imagination just runs wild, with a conceit like yours you will make a misjudgement some where along the way as you still have such a long, long way to go, say another 40 years and life will be full of traps and pot holes even for you.

I can just imagine your response to this, you will blow yourself up like a toad and puff and carry on about this is a forum and how I don’t know you etc well guess what you don’t know us and you haven’t walked in our shoes and you sure as hell don’t know the facts otherwise you wouldn’t say what you say. 
Oh yes , of course you, only you,  you know the real truth, you know what actually went on,  of course someone like you would be privy to it all.  
Ever heard of misinformation well guess what you swallowed it all, so, my question to you - are you really as clever as you think you are?

PS.  Was it you who was a farmer or ran cattle at some time in your life? 
Did you get any handouts from the government during that time?
I am curious I would love to know if my taxation dollars ever went into your pocket.


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## bunyip (22 May 2010)

shibby said:


> Dear Mr Bunyip
> What I don’t understand is why you really believe that we would care what you think of us Stormies, talk about illusions of grandeur all your pontificating about how wonderful you are and how you would never do this and how uneducated, greedy, we all are.
> 
> Guess what your life isn’t over yet and by continually reading; and reading; and here we are still reading your comments one gets a pretty clear picture of who and what you are or let me re phrase that, what you think you are.
> ...




If my posts upset you so much, why do you read them? It would surely make more sense if you were to simply skip over them as soon as you see my name.
If you don't care what I think, then why bother responding?
If you're so upset by hearing views that differ from your's, why then do you frequent a public forum? Perhaps you should find another interest that's more to your liking.

I didn't say you would or should care what I think of you. My opinions of you, or your opinion of me, are irrelevant. 

I didn't say or suggest that I was wonderful. 

Nowhere in my post did I say you were greedy.

You're wrong about my age.

I've never had handouts from the government or anyone else.

I took responsibility for any mistakes that cost me money - I didn't go looking for someone else to blame, nor did I petition the government to bail me out. 

There's no conceit in saying that some basic investment education enables people to avoid many of the pitfalls that trap those who heavily invest in financial markets without first educating themselves.  

One area I will agree with you is that I probably don't know all the facts pertaining to the Storm situation. 
There are, however, some basic facts about Storm investors that I do know.......

* At least some of them took out big loans that they could barely service even in good times, let alone if the market went bad.

* They violated the rules of prudent investment by putting too many of their eggs, plus large quantities of borrowed eggs, into the same basket.

* They didn't put sufficient effort into personal education by reading and researching investment opportunities - had they done so, they would have seen the flaws in the Storm strategy and would have avoided Storm like the plague.

* The investment strategy they followed was guaranteed to fall over when the bullish market ended.

*. Insufficient risk control measures in combination with heavy gearing meant that losses would be huge once the market turned bearish, even with the 'safety net' of margin calls in place.

Now Shibby, you can huff and puff all you like, but I challenge you to show me where my views are incorrect.

Under different circumstances I might take offence at you calling me a conceited buffoon. That sort of personal abuse is in violation of forum rules, and is reason enough to report you to the moderator and request that you be disciplined. 
However, I've become used to emotional and abusive rantings of people like you and Mash, so I'll make allowances for you on the grounds that you're a bitter old woman who took a big gamble and lost. Now you're lashing out at anyone who reminds you of that fact, and you're demanding that other people bail you out.
I see no reason why I or any other member of the general public should come riding to your rescue. We didn't cause your losses. We had no part in the decisions you made.

Good luck in your quest to get the government to hand over taxpayers money to pay for your mistakes - you'll need it.


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## Jifromoz (22 May 2010)

From the Townsville Bulletin

http://www.townsvillebulletin.com.au/article/2010/05/22/140631_news.html 

My In-Laws are disillusioned. Who to believe or trust.... There is a hell of a lot of misinformation out there being pushed by people with hidden agendas. 

They are more than happy with the support they have received from Slater & Gordon.

The next couple of months will be interesting I think.


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## Julia (22 May 2010)

This from link above provided by Jifrimoz:


> The claims emerged as the group's southeast Queensland chapter split over whether the flawed Storm model was to blame for their losses....




Hard to believe that anyone could imagine the Storm model was not the fundamental cause of the mess.


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## bunyip (22 May 2010)

Jifromoz said:


> From the Townsville Bulletin
> 
> http://www.townsvillebulletin.com.au/article/2010/05/22/140631_news.html
> 
> ...




How interesting.
So now there's dissension among SICAG ranks.
At long last the media are starting to highlight the conflict of interest in having former Storm employees, and the father of a former Storm employee, on the SICAG committee. Also, the media are letting it be known that Cassamatis is alleged to be in contact with SICAG.
One of the co-chairmen of the SICAG committee hasn't yet taken off his blinkers, and continues to defend the Storm investment model.
Slater and Gordon are now painted in a bad light by some on the SICAG committee.

Many Storm victims have made it clear that they feel less than kindly disposed towards Cassamatis and his investment scheme. Meanwhile, the SICAG homepage continues to carry favourable comment about the Storm investment model.
Understandably this has created tensions within the ranks - now those tensions are beginning to show out publicly.


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## Lone Wolf (22 May 2010)

sailteam30 said:


> As an example - I took out a home loan 2 years ago with a bank - lets call it ABC - this bank allowed me to borrow money on my house through Storm on the fact that
> 
> "a few houses have been sold in your vicinity and we will allow you to borrow XXX,XXX dollars to invest in Storm"
> 
> ...




Personally, I don't see a problem this. It's not like the bank pretended to do an accurate valuation when it was really just an estimate. They told you the figure was an approximate figure based on recent sales in your area. But for a resolution scheme, approximate figures just won't cut it.

The reason a bank wants to know how much your home is worth is to protect themselves from the risk that you might lose everything in bad investments. They want to know, if you lose all their money, how much can they recover from the sale of your house? It's simply a way for the bank to manage their risk. If they choose to use an estimate rather than a full evaluation, that's a risk they themselves choose to take. They aren't putting you at risk by overvaluing your home, they're putting themselves at risk because the sale of your home won't actually cover the money they loaned you. But for the resolution scheme, don't the banks now have a responsibility to obtain an accurate value for your home?

I've read many times that the problem was caused by banks overvaluing homes. But how did this overestimate put people at greater risk? Just because the bank will let someone borrow more money doesn't mean they should. It's the responsibility of the individual and the financial planner to manage risk. The greater risk came because Storm advised people to borrow more money than they were comfortable with and invested it in a place that history has shown is volatile.

When did people start believing the banks should be looking out for them? The bank is a company looking to make money just like any other company. The more you borrow, the more you pay. Banks want you to borrow more so they can make more. Margin calls are not there to protect the borrower. Margin calls exist to protect the bank from the risk that the borrower will lose all their money.

I don't see the banks being at fault for people choosing to borrow more money than they can afford to borrow. That's a personal choice. If the banks have any blame here I'd be looking more at the margin calls that apparently weren't issued when they should have been. But this doesn't make sense, it's not in the banks interest to delay a margin call. As I said, margin calls are there so the bank can get their money back before the borrower loses everything. But from what I've read I can't make out who was responsible for reporting the margin calls. I've heard the banks informed Storm who did nothing. Storm claims the banks should have informed the individual. What does the evidence say? Where is the signed document saying what happens in the event of a margin call?



sailteam30 said:


> attempted to secure a modest income for my future retirement by investing ALL my super and savings in Storm




It may be true that you were looking for a modest income. But just to be clear to any new investors that might be reading this, there is nothing modest about the income storm was seeking. Maximum leverage is only used by those seeking maximum possible returns during the boom times. Storm is an example of what happens when maximum leverage is used with no risk management. In regards to compensation, if Storm sold the strategy as low risk (and you can prove it) then you are entitled to compensation from Storm because it was obviously always a high risk strategy.

With regards to the petition, I notice very few comments about Storm compared to the many comments about the evil banks. Why? The banks just offered the service. Storm was the one that inappropriately used that service to gamble with your money. Even the margin call problem... By the time you hit margin call you've already lost most of your money. The problem wasn't the margin call levels, the problem was that Storm relied on them as the only risk management tool.

What evidence do the creators of the petition intend to submit to the government to substantiate the claims of wrongdoing? If hard evidence has been found why are people not already being fairly compensated? If there is no hard evidence why should the government pay full and immediate compensation? Without concrete evidence the most the petition should be calling for is a government funded investigation. In my opinion the current petition simply makes stormers look greedy. The trouble with petitions is that there's nowhere to sign to say you disagree with the petition. I'd like to see how many people are against the petition and why.


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## Julia (22 May 2010)

Lone Wolf said:


> When did people start believing the banks should be looking out for them? The bank is a company looking to make money just like any other company. The more you borrow, the more you pay. Banks want you to borrow more so they can make more. Margin calls are not there to protect the borrower. Margin calls exist to protect the bank from the risk that the borrower will lose all their money.



This is what some Stormers don't seem to understand.



> Where is the signed document saying what happens in the event of a margin call?



This is what several of us have asked throughout this marathon thread.
Unless I've missed it, there has been no clear response.


> Without concrete evidence the most the petition should be calling for is a government funded investigation.



Again, unless I'm deluded, there has already been a taxpayer funded enquiry by Ripoll et al and their report submitted.


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## Lone Wolf (22 May 2010)

Julia said:


> This is what several of us have asked throughout this marathon thread. Unless I've missed it, there has been no clear response.




I've seen you asking and no, I haven't seen a response. That's the point. There's little evidence being displayed to back up the accusations made.



Julia said:


> Again, unless I'm deluded, there has already been a taxpayer funded enquiry by Ripoll et al and their report submitted.




Yes, government investigation isn't the right term because we've already had one. I was more thinking of the following section from the petition:

"We believe it is unconscionable to expect us, the victims of a so-called regulated banking industry, to have to seek justice in the Courts when we are the victims. It is particularly onerous when we do not have the financial means to do so. The Government should be doing this on our behalf because they let it happen."

The very most they could hope for is that the government will cover their legal fees. I don't necessarily agree with this, but it makes more sense than a demand for full compensation.


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## A Hidden Agenda (22 May 2010)

Finally the links between SICAG and the originators of this disaster, the Cassimati (is that the plural of Cassimatis?), are becoming apparent.

Given Weir and O'Brien are fond of transparency and fairness perhaps they will open the books of SICAG so we can all see who is funding them. Perhaps we will then understand why their view is that it is all the Bank's fault while the Storm model was just misunderstood.

Who is/was paying Big Max?


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## Ironhalo (23 May 2010)

I think we all know the answer to that. I have been saying it for over 12 months now, yet we have constantly been shot down.

SICAG will only care about victims until the point where O'Brien's son and associates get called out as being perpetrators.


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## bunyip (23 May 2010)

Shibby - this post will upset you - I suggest you don't read any further.

Storm investors lost billions of dollars in the 2008 global financial crisis.
Now some Stormers have organised a petition to demand that our government use taxpayers money to compensate them for their losses.

Stormers represent only a small percentage of the millions of people who lost money in the GFC - I wonder if they think that all those other losing investors should be bailed out by the government as well, or if Stormers should be the only ones given favourable treatment.

I wonder if they seriously think it would be prudent, or even possible, for the government to come up with billions of dollars to rescue people who have made poor investment decisions.

I wonder if they've seriously considered the can of worms that would be opened if the government was to set a precedent by handing over billions of dollars to a group of disgruntled investors.

I wonder if they've seriously considered that such action would open the floodgates for government compensation to every man and his dog whose ever lost money in a bad investment.

I wonder if the Stormers who are pushing this petition have really considered the implications for Australia if the government was foolish enough to bow to their demands.

I and others taxpayers don't mind our taxes being used to provide police, roads, hospitals, schools, defence forces and other essential services. But we'd take strong exception if billions of our money was diverted away from these essential services, and used instead to bail out imprudent investors.

Storm investors who sign that petition are making themselves look foolish. I'd like to see them come up with a rational argument as to why I and other taxpayers like me should share their losses. Do we share their profits as well? If Stormers ever sell something for profit in the future, should taxpayers get their share of those profits? Of course not - the suggestion is ridiculous, but no more ridiculous than asking us to share their losses.

To their credit, some Stormers have accepted the reality of their situation, acknowledged their share of the responsibility for what happened, and have moved on with their lives.
Others just can't seem to accept the reality of the situation at all, and are coming up with money grabbing tactics to extract money from anyone they think might pay up. They only reason they haven't gone after the real culprit is because they see no prospect of getting any money out of him. 

It really is time for some of these Stormers to get in touch with reality.


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## Solly (23 May 2010)

Jifromoz said:


> From the Townsville Bulletin
> 
> http://www.townsvillebulletin.com.au/article/2010/05/22/140631_news.html
> 
> ...




Jifromoz, I'm sure the next couple of months will be interesting, the next week especially will be indeed, be very interesting. 

I spent some time yesterday afternoon with my Stormer mate. He's got some big things to consider at the moment about where he'll be heading in the future. I believe he's coming to the realisation that his original expectations of restoration will not be attained. And he's making the lifestyle adjustments for the future now. I have a full understanding of the the debt and gearing levels he was exposed to in the Storm model including the amount of fees and interest that was paid. I understand his disbelief in losing his capital and virtually his lifetime of effort and savings to now only to be straddled with debit.

He gets upset with being painted as being greedy, I know the modest amount he was hoping to draw down on from his structure to live on. His dream was to live a life without having to rely on government handouts and have a secure retirement.

I asked why he wasn't concerned about the Storm strategy, to me the large debt and the gearing would have flagged a risk. His reply was he trusted, Storm and the banks especially after having a long association with them. His core skills are not in the finance or investing area so he said he engaged professionals in the field. What do you say to that ? It's hard to be hypercritical of that decision, especially when you are sitting opposite each other having a coffee. He's trying to understand why he's being punished so severely for placing his trust in others that has left him in this predicament. Life's very tough, I suppose Stormers who are backed into a corner are willing to fight and try anything to improve their position when things go sour. I'd do the same.

Every Stormer's situation is different and I suppose what ever choices are made depends on the individual's circumstances. If Tony Raggatt's report is accurate about varying opinions within SICAG, I believe that this would be an expected variation within a group. My mate's not in SICAG but I do believe the group has been of huge benefit and support to some who have been through some very dark days. I don't know if EC has any influence in the group or if it would be of any significance with such a wide cross section of members, opinions and backgrounds.

I'm looking forward to pending developments in this ever evolving episode in Aussie financial history.


----------



## bunyip (23 May 2010)

Solly said:


> I spent some time yesterday afternoon with my Stormer mate.
> 
> He gets upset with being painted as being greedy, I know the modest amount he was hoping to draw down on from his structure to live on. His dream was to live a life without having to rely on government handouts and have a secure retirement.




Solly - I get the impression that many Stormers just didn't know they were being greedy.
There's no greed in wanting to be financially independent so as to ensure a comfortable retirement. The greed came in when Storm hatched a highly ambitious and risky plan for their clients to achieve their goals, and the clients saw dollar signs in front of their eyes, accepted the strategy and used it as their blueprint for investment.

Double gearing, risking the family home, all the money sunk into one highly risky investment strategy that was going to make piles of money if things went well, but incur massive losses if things went bad. 
That's a greedy and reckless strategy, pure and simple.

Their objective of achieving a comfortable retirement wasn't greedy, but the attempted method of achieving the objective certainly was. Perhaps Stormers just didn't realise it at the time.


----------



## Solly (23 May 2010)

bunyip said:


> Double gearing, *risking the family home*, all the money sunk into one highly risky investment strategy that was going to make piles of money if things went well, but incur massive losses if things went bad.




bunyip, I believe that many Stormers were of the opinion that safeguards and strategies were in place to ensure that their homes were not at risk and for the model to fail the world would be in total and complete financial meltdown. One Stormer also tried to explain to me what a "Clayton's Debt" was, at the end of the conservation, I was of the opinion that they still had a debt, as evidenced by what actions subsequently followed.


----------



## bunyip (23 May 2010)

Solly said:


> bunyip, I believe that many Stormers were of the opinion that safeguards and strategies were in place to ensure that their homes were not at risk and for the model to fail the world would be in total and complete financial meltdown. One Stormer also tried to explain to me what a "Clayton's Debt" was, at the end of the conservation, I was of the opinion that they still had a debt, as evidenced by what actions subsequently followed.




Yes, I think you're right about them believing there were safeguards in place. Which goes to show that rather than accepting what you're told at face value, you'd better be very thorough in checking the facts for yourself.

Caveat emptor


----------



## Julia (23 May 2010)

bunyip said:


> I wonder if they've seriously considered the can of worms that would be opened if the government was to set a precedent by handing over billions of dollars to a group of disgruntled investors.



Of course for the taxpayers of Australia to compensate Stormers would be quite ridiculous.  Moral hazard at its height!



> Others just can't seem to accept the reality of the situation at all, and are coming up with money grabbing tactics to extract money from anyone they think might pay up. They only reason they haven't gone after the real culprit is because they see no prospect of getting any money out of him.



Well, perhaps they need to reconsider going after Manny for compensation.
There's an article in today's "Sunday Mail" about the forthcoming marriage of Manny's youngest daughter which is alleged to be costing around $100,000 and includes a wedding party of 20 people.
Mr and Mrs Cassimatis will be celebrating a triumphant return to Townsville for the event.

So, not only is Manny insensitive to the losses incurred by his inappropriate advice, he's now going to fling his own personal survival in the face of investors in the most public way.

I'd suggest Stormers direct their anger where it belongs.


----------



## Grey Ghost (23 May 2010)

Julia said:


> Well, perhaps they need to reconsider going after Manny for compensation.
> There's an article in today's "Sunday Mail" about the forthcoming marriage of Manny's youngest daughter which is alleged to be costing around $100,000 and includes a wedding party of 20 people.
> Mr and Mrs Cassimatis will be celebrating a triumphant return to Townsville for the event.
> 
> So, not only is Manny insensitive to the losses incurred by his inappropriate advice, he's now going to fling his own personal survival in the face of investors in the most public way.




I say this development adds plenty of weight to the suspicions of quite a few that Manny has got a considerable amount of money stashed away. 



Julia said:


> I'd suggest Stormers direct their anger where it belongs.




Details of an event like this would be hard to keep secret if its held anywhere in Townsville.  There may be an opportunity for those who want to take up discussions with Manny personally if they want to attend such an event. :bbat:


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## -Bevo- (23 May 2010)

Grey Ghost said:


> I say this development adds plenty of weight to the suspicions of quite a few that Manny has got a considerable amount of money stashed away.




I think that suspicion would probably be right, I just wonder how he sleeps at night.


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## bunyip (23 May 2010)

-Bevo- said:


> I think that suspicion would probably be right, I just wonder how he sleeps at night.




You assume he has a conscience!


----------



## -Bevo- (23 May 2010)

bunyip said:


> You assume he has a conscience!




Oh no Bunyip, I think I mention this before but I had an Uncle who worked in finance here in Townsville manny years ago he was approached by EC for a job, my uncle refused to work for him his words were he's a con man, i was just pointing out the picture if he had a stash of money under the mattress might make uncomfortable sleep


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## Solly (24 May 2010)

*"Litigator dumps SICAG chair from CBA scheme"*

"Slater & Gordon has cast off the SICAG chairman from its Storm resolution scheme.

... a complaint from a member of SICAG against Scattini."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9260.htm


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## bunyip (24 May 2010)

-Bevo- said:


> Oh no Bunyip, I think I mention this before but I had an Uncle who worked in finance here in Townsville manny years ago he was approached by EC for a job, my uncle refused to work for him his words were he's a con man, i was just pointing out the picture if he had a stash of money under the mattress might make uncomfortable sleep




I didn't really think you were assuming he has a conscience - I was simply making the point that he does not.

I'm sure that some of his pals in SICAG would disagree with me though.


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## Judd (24 May 2010)

Solly said:


> I spent some time yesterday afternoon with my Stormer mate. He's got some big things to consider at the moment about where he'll be heading in the future. I believe he's coming to the realisation that his original expectations of restoration will not be attained. And he's making the lifestyle adjustments for the future now. I have a full understanding of the the debt and gearing levels he was exposed to in the Storm model including the amount of fees and interest that was paid. I understand his disbelief in losing his capital and virtually his lifetime of effort and savings to now only to be straddled with debit.
> 
> He gets upset with being painted as being greedy, I know the modest amount he was hoping to draw down on from his structure to live on. His dream was to live a life without having to rely on government handouts and have a secure retirement.
> 
> ...




It is those, such as your mate, who I feel for.  No real idea how to invest, placing trust in those who supposedly are there to protect their money; no understanding of what is risk.

And still it is beyond my comprehension.  Yes, I've lost money as have heaps of others; yet having sweated blood to get out of debt with a bank, I would never put the roof over our head at risk. Never - and I don't give a stuff about what the experts would say about releasing equity; it's my home, my sanctuary, my piece of turf.

And still Storm was able to convince people into doing so.  I just find it so difficult to understand why people believed that such an approach and incurring debt in spades was a valid approach.

Some posters go banging on about 1987 but 1970 to 1973 was just as bad and from then on until 1983 or so.  Go even further back to the mid 60's and look at the credit crunch.  Quite a number of Storm investors are of such an age that these events were not ancient history - they actually lived through them but still they went via Storm as if those documented events never happened.  Oh yes, Manny will take care of it.

I cannot express it in words, Solly, but in my mind's eye, I can see.  Yep, I can get a glimmer of understanding where your friend was coming from.

As for those who aspire to be self-funded retirees, what is it?  A badge of honour?  So much that everytime I see a gray haired couple walking down the street with smile on their face and "Self-Funded Retiree" tattooed on their respective foreheads, I must genuflect and stew rose petals in their path?  There is no such thing as a self-funded retiree.  You, as I, will still use Medciare, you, as I, will still use the subsidy from the Pharmaceutical Scheme (You try paying $2000 per month for Betaferon), you, as I, will use public hospitals instead of paying $1000+ per day for that accommodation. 

As for those suggesting that taxpayers should compensate them for their misfortune - rotate on it son.  Should such compensation happen, I will make my best endeavours to reduce my tax to as close as possible to zero without compromising my life-style but nevertheless to the detriment of others.


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## pilots (24 May 2010)

Judd said:


> It is those, such as your mate, who I feel for.  No real idea how to invest, placing trust in those who supposedly are there to protect their money; no understanding of what is risk.
> 
> And still it is beyond my comprehension.  Yes, I've lost money as have heaps of others; yet having sweated blood to get out of debt with a bank, I would never put the roof over our head at risk. Never - and I don't give a stuff about what the experts would say about releasing equity; it's my home, my sanctuary, my piece of turf.
> 
> ...




 No one at any time was going to protect their money, they was all SALES PEOPLE, the more they sold the more they made, THEY ARE STILL DOING IT TO DAY. Tough but thats life.


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## bunyip (24 May 2010)

Julia said:


> Well, perhaps they need to reconsider going after Manny for compensation.
> There's an article in today's "Sunday Mail" about the forthcoming marriage of Manny's youngest daughter which is alleged to be costing around $100,000 and includes a wedding party of 20 people.
> Mr and Mrs Cassimatis will be celebrating a triumphant return to Townsville for the event.
> 
> ...




Julia - I believe he'd have put an asset protection plan in place years ago. If so, his assets would be untouchable.
Even if he _could_ be sold up and the money was to go to Storm victims, the few million dollars he may be worth would be too thinly spread to make much difference to the plight of Stormers.
Stormers and their lawyers realise this, which is why they haven't pursued him.


----------



## Julia (24 May 2010)

bunyip said:


> Julia - I believe he'd have put an asset protection plan in place years ago. If so, his assets would be untouchable.
> Even if he _could_ be sold up and the money was to go to Storm victims, the few million dollars he may be worth would be too thinly spread to make much difference to the plight of Stormers.
> Stormers and their lawyers realise this, which is why they haven't pursued him.



I wouldn't know about any asset plan.
However, if he has anything at all which is accessible, I don't think it particularly matters that such an amount would not cover the Stormers' losses.  It's the whole twisted principle of simply throwing in the towel and saying 'oh it's no use going after Manny, no matter how much he has saved for himself, because it's easier to go after the banks.'

I find that logic amoral and a perfect encouragement to Manny to do it all again.


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## Mash (24 May 2010)

haven't been here for a while... but had some time to waste so thought I would drop in... yep waste of time.... I'll just go back to preparing to go to court and expose the lies the banks continue to bleet out and the bystanders continue to gobble up....S&G included.... can't wait to see Ralphie and his cohorts on the stand.... be afraid ralphie ...be very afraid..... you can lie to a parliamentary enquiry.... but in a court of law you can't ...well not with out a contempt charge...only hope I get to see you and Manny sharing a cosy little cell. 
BTW.... Bunyip glad to hear I get under your skin...ahhh..mission accomplished...ciao for now ..be back when I am next wanting to waste some time.....


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## Solly (25 May 2010)

Mash said:


> haven't been here for a while... but had some time to waste so thought I would drop in... yep waste of time.... I'll just go back to preparing to go to court and expose the lies the banks continue to bleet out and the bystanders continue to gobble up....S&G included.... can't wait to see Ralphie and his cohorts on the stand.... be afraid ralphie ...be very afraid..... you can lie to a parliamentary enquiry.... but in a court of law you can't ...well not with out a contempt charge...only hope I get to see you and Manny sharing a cosy little cell.
> BTW.... Bunyip glad to hear I get under your skin...ahhh..mission accomplished...ciao for now ..be back when I am next wanting to waste some time.....




Mash, you have made some very direct statements above. I hope you have been able to give ASIC any further details that may be of interest. 

As the end of May approaches, I wonder if ASIC has yet found a commercial resolution which it is prepared to recommend to ex-Storm investors.


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## bunyip (25 May 2010)

Mash said:


> haven't been here for a while... but had some time to waste so thought I would drop in... yep waste of time.... I'll just go back to preparing to go to court and expose the lies the banks continue to bleet out and the bystanders continue to gobble up....S&G included.... can't wait to see Ralphie and his cohorts on the stand.... be afraid ralphie ...be very afraid..... you can lie to a parliamentary enquiry.... but in a court of law you can't ...well not with out a contempt charge...only hope I get to see you and Manny sharing a cosy little cell.
> BTW.... Bunyip glad to hear I get under your skin...ahhh..mission accomplished...ciao for now ..be back when I am next wanting to waste some time.....




Oh, you don't get under my skin at all, Mash. On the contrary, I actually look forward to your posts because they provide good amusement value not only to me but to the others on this forum, as we watch you ranting and raving and making a fool of yourself. As I told Shibby, I've become used to the emotional and abusive rantings of people like you and her. It shows your true character - or lack of it.
It's pretty clear though, that I and other get under _your_ skin, otherwise you wouldn't have resorted to abuse and obnoxious behaviour. Nor would you have sent me that big long personal message several months ago in which you poured out a sob story of how hard your life has been, and all the misfortunes that have come your way.

When it's all said and done, nothing will change the fact that you're the poor little rich girl who wasn't satisfied with 12 millions dollars - the woman who got greedy and wanted more, and ended up losing the lot.
Now you think people should feel sorry for you, and bail out out.

One day you'll grow up....maybe.
In the meantime, please keep posting - I quite enjoy our little stoushes.


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## bunyip (25 May 2010)

Julia said:


> I wouldn't know about any asset plan.
> However, if he has anything at all which is accessible, I don't think it particularly matters that such an amount would not cover the Stormers' losses.  It's the whole twisted principle of simply throwing in the towel and saying 'oh it's no use going after Manny, no matter how much he has saved for himself, because it's easier to go after the banks.'
> 
> I find that logic amoral and a perfect encouragement to Manny to do it all again.




I absolutely agree with you, Julia. 
But money, not justice, appears to be the main objective in this Storm saga. Accordingly, the banks and the government are being targeted because they're seen as having the capacity to pay.


----------



## specialed (25 May 2010)

I am really amused that so many here are of the opinion that the Australian taxpayers should not pay for the stormers mistakes - or is that the CBA's. The irony that I'm sure is clear to all is the Australian taxpayer will be paying for it; 

Thanks to the CBA, (their participation in the resolution scheme is a clear admission of some fault- or are they just compensating out of sheer generosity) and possibly thanks to Storm (I actually haven’t seen anyone from storm or the company as a whole prosecuted yet), the Australian taxpayer will pay for this mess in the form of an extra 3000 or so people who would have been self funded retirees, who would not have required public housing or public hospital beds, and would have otherwise continued to have private health insurance...etc etc.  Has anyone actually bothered to cost all this out. 

The CBA is in this as deep as any of the other participants. Their wholesale clearout of staff involved is futher indication of their desire to clear their books and memories of this......

Each time I see my taxes rise I will thank the CBA and think of the small amount that will now be used to pay for those who are now condemmed to the pension.......


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## specialed (25 May 2010)

I will also think of all those who have added to the debate in this forum whose taxes will also be paying for them............


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## Julia (25 May 2010)

specialed said:


> I am really amused that so many here are of the opinion that the Australian taxpayers should not pay for the stormers mistakes - or is that the CBA's. The irony that I'm sure is clear to all is the Australian taxpayer will be paying for it;
> 
> Thanks to the CBA, (their participation in the resolution scheme is a clear admission of some fault- or are they just compensating out of sheer generosity) and possibly thanks to Storm (I actually haven’t seen anyone from storm or the company as a whole prosecuted yet), the Australian taxpayer will pay for this mess in the form of an extra 3000 or so people who would have been self funded retirees, who would not have required public housing or public hospital beds, and would have otherwise continued to have private health insurance...etc etc.  Has anyone actually bothered to cost all this out.
> 
> ...




If you seriously imagine the few extra Storm investors taking up the government pension and related benefits will of itself cause general taxation to rise, you have an even more woeful understanding of the country's economic situation than I'd imagined.
But hey, if it makes you feel good and allows you to pathetically think you are deriving some revenge against your fellow Australians, then I suppose that's up to you.  Why you should imagine your fellow Australians owe you anything at all is, however, quite beyond my comprehension.


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## ROE (25 May 2010)

Good karma I support my tax going to help these guys out.

Hell they wasted a few billion on dodgy home installation and school building
another 100 millions wouldn't hurt and it would turn so many lives around.

after that go after the storm founders and their crooked army and make them work to pay off 100 million


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## cutz (25 May 2010)

> The irony that I'm sure is clear to all is the Australian taxpayer will be paying for it.........




Swings and roundabouts.


ROE, 

I prefer my taxes going towards the poor and homeless, those that were never given a break, unfortunately that doesn't win votes.


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## Julia (25 May 2010)

cutz said:


> Swings and roundabouts.
> 
> 
> ROE,
> ...



I completely agree with you, cutz.  Always happy to support those who have never had the choices the rest of us enjoy.  That cannot be said of the Storm investors.


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## Lone Wolf (25 May 2010)

Specialed,

The CBA may be at some fault in cases where the margin calls were not triggered at the correct LVR. I believe there possibly is a case for these people. But Storm had margin call levels at an LVR of 90%. That's 90% of your total investment belongs to the bank. Anyone about to enter retirement who got margin called at 90% no longer has enough money to retire. Isn't that simply a result of a bad investment strategy rather than corrupt banks?

People talk as though receiving this compensation will prevent them from relying on the government. But as I said, anyone soon to retire who got a margin call at 90% (as the storm strategy dictated they should) can no longer afford to be a self funded retiree. So what kind of compensation levels are you talking about? To be supporting themselves, most will need to go back to pre crash levels. Are you suggesting the banks/government should put them back in the position they were in before they signed on with storm?



specialed said:


> the Australian taxpayer will pay for this mess in the form of an extra 3000 or so people who would have been self funded retirees, who would not have required public housing or public hospital beds, and would have otherwise continued to have private health insurance...etc etc.  Has anyone actually bothered to cost all this out.




The cost of assistance in the future is obviously less than the cost of compensating them back to a position where they don't need assistance. So the argument still stands, or maybe it should be adjusted - Australian taxpayers shouldn't have to pay any more than is necessary to bail out an individuals failed investment.


----------



## bunyip (26 May 2010)

If Storm investors were compensated there would be no end of claims from other investors whose investments had gone wrong, not only during the GFC but any other time as well.

The Government agency ABARE (Australian Bureau of Agricultural Resource Economics) once put out a forecast that cattle prices would rise 30 - 40% over the next three years. On the basis of that forecast, at considerable cost I swung a sizeable portion of my rural enterprise from cropping over to beef production.
The forecast turned out to be a dud - cattle prices lost about 30% instead of ABARE's forecast of 30 - 40% rise. It cost me a significant amount of money. 
Maybe I should jump on the Storm bandwagon and petition the government to use taxpayers money to compensate me for my losses!! LOL
It is of course a silly suggestion, but no more silly that expecting Australian taxpayers to compensate Stormers for _their_ losses. 

Our government runs a country, not a damned charity organization for investors who get burned primarily through their own errors of judgement.
Anyone with any kind of intelligence and honesty will see that what happened to Storm investors was mostly a result of them being talked into a reckless and greedy investment strategy that was fraught with danger.
They made a mistake - a mistake that should not be paid for by Australian taxpayers who were in no way responsible for the Storm disaster.


----------



## specialed (26 May 2010)

Lone Wolf said:


> Specialed,
> 
> The CBA may be at some fault in cases where the margin calls were not triggered at the correct LVR. I believe there possibly is a case for these people. But Storm had margin call levels at an LVR of 90%. That's 90% of your total investment belongs to the bank. Anyone about to enter retirement who got margin called at 90% no longer has enough money to retire. Isn't that simply a result of a bad investment strategy rather than corrupt banks?
> 
> ...




Firstly, I obviously dont think that the Storm situation will have an effect on anyone taxes. However, Anyone who believes they will not now contribute to support what would have otherwise been self funded retirees doesnt understand the full scope of what the taxation system pays for.  I know this is not the point you have made issue with. 

With respect to the 90% LVR, the point is not what it was set at, 60%, 70 % 90 % whatever. The point is that they were never given the opportunity to meet the margin call because of the way it was handled. Individuals were not assessed in terms of their ability to make them, instead the fund was shut down. 

Hence, maybe compensation should reflect the value of what the portfolio would be worth now, had the investor been given and acted on the first and any other further margin calls. This is one of the mechanisms built in to protect both banks and customers. Not just the banks as has been stated here.  

What would the value of the storm investors portfolio be now, had margin calls been made and met, less of course the value of the loan.  The banks have every right to call the loan, and the customer (thought they had five days to meet it) If the customer defaults then the bank does as it sees fit. If the call is met then the fund continues. As I have argued many times the central issue here is who is at fault in respect to the margin loan call, the cba or storm or both or the customer. This issue will only be resolved in the courts however my sources assure me this will NEVER get to court.......


----------



## specialed (26 May 2010)

Julia said:


> I completely agree with you, cutz.  Always happy to support those who have never had the choices the rest of us enjoy.  That cannot be said of the Storm investors.




Julia, 

If you want to talk about choices I will state again......My argument has only ever been that the CBA (and possibly Storm) never gave the storm investors the choice they believed they were entitled to....to meet a margin call. Before I hear the same argument form others that the investors should have been monitoring their investment...I remind all again of the claim (and partial admission by the CBA) that their were problems with the accuracy of the CGI website data making it impossible for many to monitor. If the CBA are so sure of their legal position in all this why did they simply not just fight it in the courts... Many of the compensation packages presumably are not related at all to only the issue with inflated valuations. There are plenty being compensated who did not have inflated house valuations.

If they were not entitled to receive that call, then fine no compensation..

Finally I am not seeking revenge or anything of the like..simply pointing out the obvious that the Australian taxpayers, including those who contribute to this forum, will be contributing to the storm investors, it will just most likely be towards many of their pensions....... If the CBA pays, then their shareholders pay, then the CBA jacks up their fees, then the shareholders win, then the super funds win....etc etc.....


----------



## Solly (26 May 2010)

specialed said:


> ...however my sources assure me this will NEVER get to court.......




"....without prejudice in full and final settlement....."


----------



## Julia (26 May 2010)

Lone Wolf said:


> Specialed,
> - Australian taxpayers shouldn't have to pay any more than is necessary to bail out an individuals failed investment.



Lone Wolf, previously you have said Australian taxpayers should not have to compensate Stormers for their losses.  Now you are saying "taxpayers shouldn't have to pay any more than is necessary to bail out an individual's failed investment".
Which is it?  Why should they receive any payment from their fellow citizens at all?



specialed said:


> Firstly, I obviously dont think that the Storm situation will have an effect on anyone taxes. However, Anyone who believes they will not now contribute to support what would have otherwise been self funded retirees doesnt understand the full scope of what the taxation system pays for.



You are completely contradicting yourself here.
Our taxes provide pension payments.
Just exactly why do you think your fellow Australians should compensate you for your losses?
If that were to happen (fat chance, I'd say) then why would not everyone who has received poor advice in any form, also be up for receiving compensation from the taxpayer?
Where would it end?
Obviously it's lunacy to even consider it.



> As I have argued many times the central issue here is who is at fault in respect to the margin loan call, the cba or storm or both or the customer. This issue will only be resolved in the courts however my sources assure me this will NEVER get to court.......



Well, specialed, you were the investor here.  Presumably you had all the terms and conditions clearly set out in writing, so you must know who was set down to be responsible for communicating the margin call to the client.
This question has been raised over and over and as far as I am aware, no Storm investor has offered a clear answer.  Perhaps you can be the exception.
I'm sure we would all be very grateful.




specialed said:


> Julia,
> 
> If you want to talk about choices I will state again......My argument has only ever been that the CBA (and possibly Storm) never gave the storm investors the choice they believed they were entitled to....to meet a margin call.
> Finally I am not seeking revenge or anything of the like..simply pointing out the obvious that the Australian taxpayers, including those who contribute to this forum, will be contributing to the storm investors, it will just most likely be towards many of their pensions....... If the CBA pays, then their shareholders pay, then the CBA jacks up their fees, then the shareholders win, then the super funds win....etc etc.....



Oh dear, you so misunderstand the point I was trying to make.  I was thinking of the people who have simply never had enough money, because of illness, disability of other genuine disadvantage, to even consider the idea of having money to invest.
It's symptomatic of your self-absorption that you haven't considered this is what I, following the suggestion from Cutz, was thinking about.
Try getting some sympathy from someone with a mental illness who is homeless as a result of failed government policies.


----------



## specialed (26 May 2010)

Julia said:


> Well, specialed, you were the investor here.  Presumably you had all the terms and conditions clearly set out in writing, so you must know who was set down to be responsible for communicating the margin call to the client.
> This question has been raised over and over and as far as I am aware, no Storm investor has offered a clear answer.  Perhaps you can be the exception.
> I'm sure we would all be very grateful.




No Julia, I haven't had any losses, was not an investor with storm, and I certainly do not need any compensation. 

In answer to your second question I'm pretty sure it was cleared up in the senate inquiry. The CBA was responsible for communicating the margin call to the client. That was until, as the CBA put it...... 

"some time ago we changed our policy but um, er we dont have any record of when this happened, but some time ago we changed our policy and the planner now communicates this, this is industry standard, um but we cant recall letting the client know this, but it did happen, we just dont have any record of when it happened and we cant recall exactly when it happened". 

I cant remember the exact quote, and certainly am not going to bother going through the hansard (I would encourage you to do so however)  but you get the idea...

Julia, Can you please answer for me this simple question. Why is the CBA paying compensation to storm investors through the resolution process ?


----------



## Lone Wolf (26 May 2010)

specialed said:


> Hence, maybe compensation should reflect the value of what the portfolio would be worth now, had the investor been given and acted on the first and any other further margin calls.




The figure you chose to use in your post was 3000 or so people who would have been self funded retirees had storm not collapsed. 3000 people who, if they had the chance to meet their margin calls would have survived the market crash. I understand that you may not have thought too hard about that figure, but I personally feel that only a small fraction of those 3000 people would have actually survived the crash. Most of the comments I've seen from stormers complain that they lost everything, the banks let them borrow too much money, they couldn't afford the repayments, they lost their homes because they couldn't pay the bank what they owed. Of course this is just from the more vocal stormers, but most of the people doing the complaining didn't seem to have large piles of cash handy to meet margin calls. Most it seems, had everything riding on it. These people bet everything on the market continuing to go up and lost it all when it didn't.

If the bank really did sell out people without giving them a chance to meet their margin obligations and without a signed document saying they agreed to sell, or agreed to the bank selling them out without reason, then of course a case could be made against the banks for those people. And if that were true then I'm sure there are some true victims out there who didn't leverage too high, who had access to a large amount of cash which was set aside for margin calls. People who trusted that "someone" would advise them when it was time to make further payments, but instead had their investments sold without their approval. For those people I am truly sympathetic. But I'd say these people are few and far between.

My problem has always been with the people to clearly never would have survived the market crash, yet blame everyone else for allowing them to invest so much borrowed money. Of all the people signing the petition to get their hands on government handouts, I'd like to see how many had the cash set aside to meet margin calls.

Ok, so for those who had no spare cash to meet their margin obligations, no compensation from anyone. For those who you suggest had the cash but didn't get the chance and never agreed to ever be sold, how do you accurately judge in hindsight what action they would have taken at the time? Would they have continued to meet margin calls with extra cash? Or would they have taken the advice to sell up and at least protect what's left?


----------



## Lone Wolf (26 May 2010)

Julia said:


> Lone Wolf, previously you have said Australian taxpayers should not have to compensate Stormers for their losses.  Now you are saying "taxpayers shouldn't have to pay any more than is necessary to bail out an individual's failed investment".
> Which is it?  Why should they receive any payment from their fellow citizens at all?




Unless I see some hard evidence I still say that not a cent of Australian taxpayer money should go towards compensation for failed investments. 

Specialed said that we taxpayers would be indirectly supporting the stormers, like it or not, because they are now resorting to the public health system and pension payments. I agree that it's technically true that some of our tax dollars will now go to supporting the stormers who can no longer support themselves. So I changed the statement to be more correct. I said taxpayers shouldn't have to pay any more than is necessary, necessary being due to them now taking a pension. I never said anything about taxpayers compensating them as little as is necessary. We shouldn't compensate them at all. If the banks are legally at fault then take your hard evidence and go collect your compensation from the banks.


----------



## -Bevo- (27 May 2010)

bunyip said:


> The Government agency ABARE (Australian Bureau of Agricultural Resource Economics) once put out a forecast that cattle prices would rise 30 - 40% over the next three years. On the basis of that forecast, at considerable cost I swung a sizeable portion of my rural enterprise from cropping over to beef production.
> The forecast turned out to be a dud - cattle prices lost about 30% instead of ABARE's forecast of 30 - 40% rise. It cost me a significant amount of money.
> 
> 
> > I remember when crude was at $50 a barrel ABARE forecast prices to fall back around $30 they went to $140 lol, reminds me of some of those storm investors submissons when the inquiry was going one lady said she expressed concern to storm because the market had fallen heavy the advisor said something like not to worry we know exactly whats happening in the market and were it is going.


----------



## Solly (27 May 2010)

*"Liquidators claim transactions continued while Storm Financial was insolvent"*

"LIQUIDATORS of failed Storm Financial have concluded it traded while insolvent and they will try to claw back a loan of almost $450,000 repaid to Westpac in the company's dying days."

More by Anthony Marx in The Courier Mail here;
http://www.couriermail.com.au/business/liquidators-claim-transactions-continued-while-storm-financial-was-insolvent/story-e6freqmx-1225871736867


----------



## Solly (27 May 2010)

*"CBA sell-off didn't bring Storm down, report finds"*

"STORM Financial would most likely not have survived the global financial crisis, even if the Commonwealth Bank did not sell down its investors' margin loans at the end of 2008."

More by Sara Rich in The Australian here;
http://www.theaustralian.com.au/business/cba-sell-off-didnt-bring-storm-down-report-finds/story-e6frg8zx-1225871753987


----------



## Garpal Gumnut (27 May 2010)

G'day Solly, what does one wear to a Greek wedding?

gg


----------



## Solly (27 May 2010)

*"Liquidator says client fee freefall brought perfect Storm"*

"AN overwhelming reduction in upfront fees from clients as the sharemarket tanked was the reason infamous Townsville investment group Storm Financial failed, its liquidator Worrells has reported.

... confidential report to ASIC expected to include recommendations on the types of charges which could be levelled against the company's officers and other parties."

More by Tony Raggatt in the Townsville Bulletin here;
http://www.townsvillebulletin.com.au/article/2010/05/27/141691_news.html


----------



## Garpal Gumnut (27 May 2010)

Solly said:


> *"Liquidator says client fee freefall brought perfect Storm"*
> 
> "AN overwhelming reduction in upfront fees from clients as the sharemarket tanked was the reason infamous Townsville investment group Storm Financial failed, its liquidator Worrells has reported.
> 
> ...




The poolside suite at Lennons is booked for 2011 Solly. I may even get a pair of shoes with pompoms on the toes so as to not look out of place walking up to the public gallery at the courts.

gg


----------



## Solly (27 May 2010)

Garpal Gumnut said:


> G'day Solly, what does one wear to a Greek wedding?
> 
> gg




Got an invite yet gg ? Wonder if they are looking for a Koumbaros ?


----------



## Solly (27 May 2010)

Garpal Gumnut said:


> The poolside suite at Lennons is booked for 2011 Solly. I may even get a pair of shoes with pompoms on the toes so as to not look out of place walking up to the public gallery at the courts.
> 
> gg




Indeed gg, it is quite a good view from the deck around the pool.


----------



## Garpal Gumnut (27 May 2010)

Solly mate,

I did not get an invite, but being the gentleman, I was not upset. 

I have offered the Bentley as a wedding car , gratis, but thus far have received no reply.

From what a newspaper I read last evening in a shabby Qantas Business Class Lounge said, there is no lack of dosh being lavished on the proceedings.

Its called the trickle down effect, so beloved of Ronnie Reagan and Maggie Thatcher.

"everyone is a winner"

gg


----------



## specialed (27 May 2010)

Lone Wolf said:


> The figure you chose to use in your post was 3000 or so people who would have been self funded retirees had storm not collapsed. 3000 people who, if they had the chance to meet their margin calls would have survived the market crash. I understand that you may not have thought too hard about that figure, but I personally feel that only a small fraction of those 3000 people would have actually survived the crash. Most of the comments I've seen from stormers complain that they lost everything, the banks let them borrow too much money, they couldn't afford the repayments, they lost their homes because they couldn't pay the bank what they owed. Of course this is just from the more vocal stormers, but most of the people doing the complaining didn't seem to have large piles of cash handy to meet margin calls. Most it seems, had everything riding on it. These people bet everything on the market continuing to go up and lost it all when it didn't.
> 
> 
> My problem has always been with the people to clearly never would have survived the market crash, yet blame everyone else for allowing them to invest so much borrowed money. Of all the people signing the petition to get their hands on government handouts, I'd like to see how many had the cash set aside to meet margin calls.




I agree that many probably would not have the funds to meet the first of further calls. However, this is part of the reason their is 5 day period to respond, rather than a requirement say, to say have an equivalent amount in cash attached in another account.  The bank is right to assume after that 5 days that the owner is not willing or able to meet the call. Up untill that time however they need to assume the investor can.

A simple analogy is buying ahouse. I and the seller sign a 30 day contract. I have untill that time to get the funds. If at, of after that date then the seller has not received the settlement then he can rightly walk away, keeping my deposit. Up until that date he cant just walk away simply because he "believes" I cant afford the house. Due process must occur. Liquidating the portfolio was not done because of a fear that no one could meet the call, it was done for various other reasons. 

This is why the CBA can not afford for this to go to court. If found in breach then YES they would have to reinstate to value of the portfolios before they sold them down, and pay compensation for the damage caused in doing so. Thus alot of people who could not have met calls and maybe should have lost their investments will actually be rewarded. For me the matter of whether or not it was a risky investment, whether the advice from storm was bad, whether they could meet the call is all irrelevant. That is for the FPA or ASIC to decide. The CBA was required by Law to give the client the opportunity to meet the call and did not, anything after this is speculation and heresay....a matter for opinion and debate...but not the matter that needs to be resolved in the courts.....


----------



## Solly (27 May 2010)

Garpal Gumnut said:


> Solly mate,
> 
> I did not get an invite, but being the gentleman, I was not upset.
> 
> I have offered the Bentley as a wedding car , gratis, but thus far have received no reply...




That's a very kind gesture gg, maybe you could replace the "B" hood ornament with this one, in *noir* would be fitting. 
Would also make it easier to thread the silk ribbon.


----------



## Solly (27 May 2010)

Supreme Court orders BoQ to disclose documents in Storm case.
More to come....


----------



## Julia (27 May 2010)

specialed said:


> No Julia, I haven't had any losses, was not an investor with storm, and I certainly do not need any compensation.



My apologies, then, for assuming you were an investor.  I'm curious as to why you appear to be such a passionate advocate for Storm investors if you have no personal stake in the matter?



> In answer to your second question I'm pretty sure it was cleared up in the senate inquiry. The CBA was responsible for communicating the margin call to the client.



What I was looking for was a direct quote from the paperwork of any Storm investor which would surely have clearly stated who was responsible for communicating any margin call.



> Julia, Can you please answer for me this simple question. Why is the CBA paying compensation to storm investors through the resolution process ?



I'm not in a position to know that, and it's immaterial to me.  I'm not a CBA shareholder.  There was presumably a clear contract (well, one would hope so) between Storm, the investor, and the CBA.

It's a quite different matter, though, to suggest the Australian taxpayer should compensate Stormers for their losses.  Storm investors had no contract with the Australian taxpayer.
You still haven't responded to my question as to why you think this should happen.


----------



## specialed (27 May 2010)

Julia said:


> My apologies, then, for assuming you were an investor.  I'm curious as to why you appear to be such a passionate advocate for Storm investors if you have no personal stake in the matter?
> 
> 
> What I was looking for was a direct quote from the paperwork of any Storm investor which would surely have clearly stated who was responsible for communicating any margin call.
> ...




Julia, 

Sorry for the misunderstanding. I have a personnal stake in this matter. As I have stated previously as I have very close family and friends who have been affected by this.

I have never stated the Australian Taxpayer should compensate, but rather noted the irony that they will be helping to fund the retirement of some of the investors. I do believe the CBA should be compensating storm investors, not the taxpayer, who will be because of the failure of the resolution process...


----------



## Solly (27 May 2010)

Solly said:


> Supreme Court orders BoQ to disclose documents in Storm case.
> More to come....




Here's the AAP report at brisbanetimes.com.au.

http://www.brisbanetimes.com.au/queensland/lawyers-applaud-storm-finanancial-court-ruling-20100527-wfpg.html


----------



## Solly (27 May 2010)

Garpal Gumnut said:


> Solly mate,
> 
> I did not get an invite, but being the gentleman, I was not upset.
> 
> ...




gg, looks like the Arnage wont be required after all. 

"..wedding scaled back after 'toxic' claims"


----------



## Garpal Gumnut (27 May 2010)

Solly said:


> gg, looks like the Arnage wont be required after all.
> 
> "..wedding scaled back after 'toxic' claims"




Yes Solly,

I spoke to some movers n shakers at the Waterfront this afternoon. 

They said that the hue and cry following the publicity surrounding the lavish bash had led to the the possibility of some Ingham and Ayr, Storm victims of southern Mediterranean descent visiting the celebrations with loving intent to congratulate ole Manny in the customary manner.

Manny said today that he is now broke, and has decided to have a low key bash for the wedding.

I do hope he hasn't booked the Ross Island Hotel, as there is a strict ban on biff of any type within its hallowed walls.

So if the ole Manny can go from being rich to being broke in 4 weeks what hope is there for the rest of us. 

I do hope the SICAG committee are given a special pew close to the front, as they have been sterling supporters of the Storm model thus far. 

Then again, they have been broke for longer than Manny, and they are not living in mansions.

The Bentley is still available and I've told Manny's next door neighbour on the Terrace that my offer still stands. 

gg


----------



## Julia (27 May 2010)

specialed said:


> Julia,
> 
> I have never stated the Australian Taxpayer should compensate, but rather noted the irony that they will be helping to fund the retirement of some of the investors. I do believe the CBA should be compensating storm investors, not the taxpayer, who will be because of the failure of the resolution process...



Thanks, specialed.  Obviously we have been at cross purposes.  Glad to have your clarification as above.


----------



## ROE (27 May 2010)

Julia said:


> My apologies, then, for assuming you were an investor.  I'm curious as to why you appear to be such a passionate advocate for Storm investors if you have no personal stake in the matter?




I got nothing to do with storms or their investors but I feel a lot of these investors was deceived..some are greedy who knows but some of the stories that came out of this are pretty heart breaking stuff.

They could be greedy, they could be naive but the price they paid for it is too high and I think they need a bit of support from the government to get them back on their track...

“We can’t help everyone, but everyone can help someone.”

I wonder if people think these people have greed written over their head if that was to happen to their parents or someone they love


----------



## Solly (28 May 2010)

*"Founder may face criminal charges"*

"A long list of suspected breaches of the Corporations Act, including possible criminal charges against Storm Financial's founder, Emmanuel Cassimatis, has been sent to the corporate regulator."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/founder-may-face-criminal-charges-20100527-whtl.html


----------



## Solly (28 May 2010)

*"Storm Financial's bank told to reveal audits"*

"A COURT has ordered the Bank of Queensland to disclose documents that could provide an insight into its relationship with Storm Financial."

More by Sara Rich in The Australian here;

http://www.theaustralian.com.au/news/nation/storm-financials-bank-told-to-reveal-audits/story-e6frg6nf-1225872282978


----------



## Solly (28 May 2010)

*"Collapse of financial planner was 'inevitable' "*

"Storm Financial primarily monitored its investors' loans so they could be increased, bringing in more fees for Storm, rather than to protect investors from market falls, the failed financial planner's liquidators have found."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/collapse-of-financial-planner-was-inevitable-20100527-whtv.html


----------



## Solly (28 May 2010)

gg, I was wondering if you have been able to run your eye over the Worrells report yet?  I haven't sighted it yet but one of my friends is perusing it tonight.

I'm also hoping that my mate 'Murph', the Emeritus Silk, has got a copy, I'd like to get his views on what sections of the Corporations Act may have had the possibility of being breached.

Murph usually has an early morning caffÃ¨ latte with his raisin toast at the coffee shop by the marina and I hope to catch up with him in the AM. Although Thursday night's not a good night for him as two footy shows are aired and he is known to sip cab sauv in front of his plasma, which sometimes results in impaired judgement the following morning.


----------



## Garpal Gumnut (28 May 2010)

Solly said:


> gg, I was wondering if you have been able to run your eye over the Worrells report yet?  I haven't sighted it yet but one of my friends is perusing it tonight.
> 
> I'm also hoping that my mate 'Murph', the Emeritus Silk, has got a copy, I'd like to get his views on what sections of the Corporations Act may have had the possibility of being breached.
> 
> Murph usually has an early morning caffÃ¨ latte with his raisin toast at the coffee shop by the marina and I hope to catch up with him in the AM. Although Thursday night's not a good night for him as two footy shows are aired and he is known to sip cab sauv in front of his plasma, which sometimes results in impaired judgement the following morning.




I am not one for reading legal documents although minimegumnutkid6 is a lawyer and has promised to peruse it for me. 



Solly said:


> *"Founder may face criminal charges"*
> 
> "A long list of suspected breaches of the Corporations Act, including possible criminal charges against Storm Financial's founder, Emmanuel Cassimatis, has been sent to the corporate regulator."
> 
> ...




This post Solly may be the most significant since I first started this thread.

If it is true and the Cassimatises are charged and convicted it will have five consequences.

1. An out for the banks

2. Some closure for the victims of the Storm "model".

3. The end of the amateurish perambulations of SICAG.

4. Justification for Damo Scattini's approach.

5. Some time inside for those convicted.

gg


----------



## Rainbow (28 May 2010)

ROE said:


> I got nothing to do with storms or their investors but I feel a lot of these investors was deceived..some are greedy who knows but some of the stories that came out of this are pretty heart breaking stuff.
> 
> They could be greedy, they could be naive but the price they paid for it is too high and I think they need a bit of support from the government to get them back on their track...
> 
> ...




Thanks for your support. Seems like some people who contribute to this thread are just plain heartless. I suppose they'd blame Victorian Bushfire victims who lost everything, that it was their own fault too - for wanting to live in the country - or Tsunami survivors they should geat real - hey that's what happens if you live near a beach! And duh! all my fault I trusted a registered Financial Planner and ended up broke. It's all very well to sit back and banter about it, but unless you're living it, it's not real.  It's harder than you think, to be a survivor.


----------



## bunyip (28 May 2010)

Rainbow said:


> Thanks for your support. Seems like some people who contribute to this thread are just plain heartless. I suppose they'd blame Victorian Bushfire victims who lost everything, that it was their own fault too - for wanting to live in the country - or Tsunami survivors they should geat real - hey that's what happens if you live near a beach! And duh! all my fault I trusted a registered Financial Planner and ended up broke. It's all very well to sit back and banter about it, but unless you're living it, it's not real.  It's harder than you think, to be a survivor.




Should the role of government be to use taxpayer-provided revenue to responsibly manage the country and provide essential services?
Or should the role of government be to act as some sort of rescue agency for people whose investments have run aground?
Do you think the government should compensate only Stormers? Or should they compensate everyone whose lost money through bad investments?

Victims of tsunamis, bushfires, floods, cyclones, earthquakes etc have little or no control over what happens to them. Their situation is very different to Storm investors who could have saved the bulk of their net worth by converting to cash. 
It's not as if the market collapsed suddenly like it did in 1987 - this time around there was plenty of time to take defensive action before the damage became catastrophic.
If your manager wouldn't take defensive action for you, then it was up to you to take control of your business by doing it yourself.
Your failure to do so when the stockmarket turned bearish is the major contributing factor to you losing your money.

Sorry, not trying to be heartless here, just realistic.


----------



## maccka (28 May 2010)

bunyip said:


> Their situation is very different to Storm investors who could have saved the bulk of their net worth by converting to cash.
> It's not as if the market collapsed suddenly like it did in 1987 - this time around there was plenty of time to take defensive action before the damage became catastrophic.
> If your manager wouldn't take defensive action for you, then it was up to you to take control of your business by doing it yourself.
> Your failure to do so when the stockmarket turned bearish is the major contributing factor to you losing your money.
> ...




Hi Bunyip,

Your statement appears to be based on the assumption that it was actually possible for the clients to convert to cash.  That in turn, appears to be based on the assumption that the banks and agencies/companies involved had enough staff to physically cope with the number of requests to convert to cash.

If that is the case, then perhaps your statement is realistic.

However what if the two assumptions are not correct?

Cheers
Maccka


----------



## bunyip (28 May 2010)

maccka said:


> Hi Bunyip,
> 
> Your statement appears to be based on the assumption that it was actually possible for the clients to convert to cash.  That in turn, appears to be based on the assumption that the banks and agencies/companies involved had enough staff to physically cope with the number of requests to convert to cash.
> 
> ...




Macca

If they'd all tried to convert to cash at the same time when the market was in free fall, then yes, the banks may have struggled to cope with the workload.
But they should have been out long before then. The market took eight months to lose the first 25% of it's value. By comparison, in October 1987 it fell 25% in one day. 
In terms of the speed of the fall, this slump was mild compared to 1987, allowing investors plenty of time to take defensive action.

Amidst all this talk and argument about who was responsible for notifying clients when they were in margin call, one pertinent fact that's rarely mentioned is that investors with margin loans, whether they're Storm investors or anyone else, should be out of the market long before they get anywhere near margin call.
Once your investment has fallen far enough to trigger a margin call, you've already lost most of your money.

I don't think any less of Stormers for the mistakes they made. I've made mistakes myself that have cost me money, probably most of us have.
I won't claim the banks are squeaky clean - I've stated on here more than once that I dislike banks and they should pay compensation if they can be proven to have done anything illegal.
What I take issue with is the people who try to say it was the banks that wiped them out. That's just nonsense in most cases - the banks may have contributed, but the primary reason for Stormers losing their wealth was that they were heavily geared into margin loans at a time when the stockmarket slumped, and they sat through more than 12 months of one of the most severe market slumps in history without taking defensive action to minimise the damage to their wealth. 

They made a huge mistake, and now they want Australian taxpayers to pay them for that mistake. It's just not on. They made the mistake, not us. The loss belongs to them, not to us, the Australian taxpayers.
It's not heartless, it's just being realistic.


----------



## Solly (28 May 2010)

Garpal Gumnut said:


> I am not one for reading legal documents although minimegumnutkid6 is a lawyer and has promised to peruse it for me.
> 
> 
> 
> ...




gg, it will be interesting to see if there is any action with regard to Chapter 7  of the Corporations Act, especially in relation to Sections 945A, 945B, 952D, 952E, 952F, 952G & 1041E.


----------



## specialed (28 May 2010)

bunyip said:


> Macca
> 
> If they'd all tried to convert to cash at the same time when the market was in free fall, then yes, the banks may have struggled to cope with the workload.




Bunyip,

Interesting that you should mention converting to cash.....there is a more to play out with respect to this and the CBA.....stay tuned....


----------



## bunyip (28 May 2010)

ROE said:


> They could be greedy, they could be naive but the price they paid for it is too high and I think they need a bit of support from the government to get them back on their track...




Could you clarify what you mean by 'a bit of support from the government'?


----------



## Julia (28 May 2010)

bunyip said:


> Could you clarify what you mean by 'a bit of support from the government'?



I, too, would like to know what you have in mind here, ROE.
Let's remember the taxpayer has already copped a large bill for the enquiry, payment to Worrells, etc.  Then there is the time still being taken up by ASIC which is hardly likely to be costing $10 per hour.


----------



## specialed (28 May 2010)

bunyip said:


> Macca
> 
> 
> Once your investment has fallen far enough to trigger a margin call, you've already lost most of your money.




Bunyip,

Isnt this only the case if the market NEVER recovers, which of course it does and has...Meeting the margin call and any other subsequent ones actually preserves your interest which then recovers as the market does. There are many storm investors who could have met a margin call, or I believe the three they would have needed to. They would now be sitting on an investment worth more than when the market crashed. Hence the fact that the Margin call is at the centre of this mess for many.

It is simply not true, to state that once a margin call is triggered you have lost your money. Please correct me if my understanding of this is incorrect..


----------



## Ferret (29 May 2010)

Specialed,

Please correct *me *if my understanding is incorrect, but I believe the plug was pulled in November 08 and the market kept falling until March 09.

If any stormer had acted on a margin call they would have lost more money over the next 4 months and been in an even deeper hole in March.  Why are they complaining that they were saved from this?


----------



## Solly (29 May 2010)

I know some Stormers are eager for some better news and a possibility of a bit more hope this afternoon.

I wish you good luck, if possible let us know how it all goes.


----------



## specialed (29 May 2010)

Ferret said:


> Specialed,
> 
> Please correct *me *if my understanding is incorrect, but I believe the plug was pulled in November 08 and the market kept falling until March 09.
> 
> If any stormer had acted on a margin call they would have lost more money over the next 4 months and been in an even deeper hole in March.  Why are they complaining that they were saved from this?




The complaint is that they were not saved from anythng, they were prevented from staying in the Market, and YES meeting subsequent margin calls if required.  

All those who had been given the opportunity, and met the margin calls, would now be sitting on a much larger portfolio. It is only for the bank to decide AFTER the five days if the investor is unable to meet their obligation.

It is only speculation whether or not investors could meet the call. A court in deciding the legality of this should have no interest in whether a client was able to meet the call, just whether the term of the contract was met. Which , in this case , the claim is that this obligation to present the client with, and allow the client to meet the margin call was not made.......


----------



## bunyip (29 May 2010)

specialed said:


> Bunyip,
> 
> Isnt this only the case if the market NEVER recovers, which of course it does and has...Meeting the margin call and any other subsequent ones actually preserves your interest which then recovers as the market does. There are many storm investors who could have met a margin call, or I believe the three they would have needed to. They would now be sitting on an investment worth more than when the market crashed. Hence the fact that the Margin call is at the centre of this mess for many.
> 
> It is simply not true, to state that once a margin call is triggered you have lost your money. Please correct me if my understanding of this is incorrect..




I should have been clearer in my meaning - what I mean is that the value of your investment has already been decimated by the time you reach margin call.
Sure - if you have the financial means to keep meeting margin calls indefinitely until the market recovers, then in theory you could ride the market back up again. 
The problem with meeting margin calls is that it takes a serious bear market to trigger them, and they're triggered at a point that's unlikely to be the bottom of the market.
This is the scenario that unfolded in the 2008 slump - after Stormers accounts went into margin call en masse, the market fell for another five months, and quite a bit further in percentage terms.
Stormers who had the capacity to meet margin calls would be in the minority. Not only that, but chances are that they would have been required to meet further margin calls when the market kept heading south.
If you were an investor in the US market in the 1929 crash, you would have had a lot of margin calls to meet and you would have been waiting 25 years for the market to recover. The same thing could have happened here.

Margin loans are unsuited to longer term 'buy and hold' stockmarket investors - there are other types of loan products more suited to long term strategies.

It should be a simple matter to clear up who was responsible for letting Storm clients know when they reached margin call. Stormers would have received a copy of the loan terms and conditions when they took out their loans.
Would some of the Stormers who have been following this thread, please clarify this matter for us by looking at your loan terms and conditions, and telling us what they say.

specialed, assuming that Storm investors had been able to hang in there, how would they now be sitting on an investment worth more than when the market crashed?
The market hasn't yet recovered its losses, has it?


----------



## Julia (29 May 2010)

bunyip said:


> It should be a simple matter to clear up who was responsible for letting Storm clients know when they reached margin call. Stormers would have received a copy of the loan terms and conditions when they took out their loans.
> Would some of the Stormers who have been following this thread, please clarify this matter for us by looking at your loan terms and conditions, and telling us what they say.



Bunyip, I have repeatedly made this request with no response.
It's difficult not to reach the conclusion, therefore, that Storm investors failed to ensure they had all the terms and conditions in writing.
It would seem pretty simple for someone to quote, e.g. 


> Margin Calls:  The responsibility for the client being advised of a margin call lies with CBA.   Such margin call will be made at 90% LVR.







> specialed, assuming that Storm investors had been able to hang in there, how would they now be sitting on an investment worth more than when the market crashed?
> The market hasn't yet recovered its losses, has it?



Agree.  There are some very optimistic and utopian assumptions being made about the position Stormers would have been in had they repeatedly met the margin calls during several months of falling values.

And we don't know, of course, but I've had the impression that Stormers put all they had into the Storm high leverage model, rather than leaving tens of thousands lying around in cash, ready to meet the margin calls.


----------



## Mash (29 May 2010)

Julia and Bunyip
I am sure you have been told this answer many times ...... Our original margin loan docs signed in 2002  States: 
2.MARGIN CALLS ( I'm not shouting that's how it is typed in the contract)
If the margin loan equals or exceeds a certain percentage of the overall security value (see page 7) you will receive a margin call. You cannot just wait out any downturns in the market. You will have limited time to deal with any margin call, by either repaying to us enough of your facility or giving us more securities on our list. If you fail to act within the time periods specified in the terms and conditions then some of your securities may be sold so as to reduce the amount owing to an amount that does not exceed the base security value..


Note it does not say we will contact your financial planner it says "you" and that is the crux of the whole matter... I was not given a margin call.... they have not met the conditions of their contract... I did not get a margin call...... I don't know how that can be made any clearer to you all. They have failed to uphold their legal responsiblilty to issue a Margin Call to me!!!!!Everything else hinges on that fact.... simple contract law.....
Note: it also says "some of your securities MAY be sold" not WILL be sold without your knowledge!

I also believe the lawfulness of the scheme which was allegedly operated by CBA with Storm is the basis of the lawsuit which is ready to be filed by Levitts.


----------



## Solly (29 May 2010)

*"Class action pending in Storm loans fiasco"*

"SYDNEY law firm Levitt Robinson says it is ready to launch a class action against the Commonwealth Bank on behalf of ''hundreds'' of victims of failed investment company Storm Financial."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/05/29/142401_news.html


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## Solly (29 May 2010)

Mash said:


> I also believe the *lawfulness* of the scheme which was allegedly operated by CBA with Storm is the basis of the lawsuit which is ready to be filed by Levitts.




Mash, I find this statement to be of notable significance.

I will be eagerly following progress of this case.


----------



## Solly (29 May 2010)

Solly said:


> I know some Stormers are eager for some better news and a possibility of a bit more hope this afternoon.
> 
> I wish you good luck, if possible let us know how it all goes.




Anybody able to shed any further light on the Levitt's meeting at Redcliffe today?

I'm sure there are many interested participants eagerly awaiting on any feedback...


----------



## Julia (29 May 2010)

Mash said:


> Julia and Bunyip
> I am sure you have been told this answer many times ...... Our original margin loan docs signed in 2002  States:
> 2.MARGIN CALLS ( I'm not shouting that's how it is typed in the contract)
> If the margin loan equals or exceeds a certain percentage of the overall security value (see page 7) you will receive a margin call. You cannot just wait out any downturns in the market. You will have limited time to deal with any margin call, by either repaying to us enough of your facility or giving us more securities on our list. If you fail to act within the time periods specified in the terms and conditions then some of your securities may be sold so as to reduce the amount owing to an amount that does not exceed the base security value..



Thank you, Mash.  I don't believe you or anyone else has previously posted such a direct quote before.  If I'm wrong, perhaps you could direct me to the appropriate previous post.




> Note it does not say we will contact your financial planner it says "you" and that is the crux of the whole matter... I was not given a margin call.... they have not met the conditions of their contract... I did not get a margin call...... I don't know how that can be made any clearer to you all.



It is indeed clear.  It was that wording Bunyip and I were looking for and which as far as I'm aware has not been posted before.




> They have failed to uphold their legal responsiblilty to issue a Margin Call to me!!!!!Everything else hinges on that fact.... simple contract law.....
> Note: it also says "some of your securities MAY be sold" not WILL be sold without your knowledge!



Why then has there been all this long period of confusion about whether it was the CBA or Storm who were responsible for the margin calls?
Are CBA alleging the responsibility was transferred to Storm at some stage?


----------



## Solly (29 May 2010)

Where it all was told. A very interesting read.


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## Mash (30 May 2010)

Julia
There has only ever been confusion because that is how CBA has orchestrated it!


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## Mash (30 May 2010)

Solly said:


> Anybody able to shed any further light on the Levitt's meeting at Redcliffe today?
> 
> I'm sure there are many interested participants eagerly awaiting on any feedback...





Levitts meeting was about the action to be launched this week.... however Ralphy and his co horts requested a meeting with Levitt to try and head it off.... like I have said before... Ralphy doesn't want to share a cell with Manny.... Suddenly there has been a powershift me thinks !!
No cap in hand resolution scheme this time!!! Enough evidence has been gathered to make Ralphy very uncomfortable....

BTW Solly in answer to a previous question... I have ASIC on speed dial


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## GumbyLearner (30 May 2010)

Mash said:


> Levitts meeting was about the action to be launched this week.... however Ralphy and his co horts requested a meeting with Levitt to try and head it off.... like I have said before... Ralphy doesn't want to share a cell with Manny.... Suddenly there has been a powershift me thinks !!
> No cap in hand resolution scheme this time!!! Enough evidence has been gathered to make Ralphy very uncomfortable....
> 
> BTW Solly in answer to a previous question... I have ASIC on speed dial




*Manny vs The Guillontine*

Poor Many. Innocent soul. Should have never been subject to public decapitation laws in the first place!! It only encourages strict enforcement regimes!


----------



## Solly (30 May 2010)

Mash said:


> Levitts meeting was about the action to be launched this week.... however Ralphy and his co horts requested a meeting with Levitt to try and head it off.... like I have said before... Ralphy doesn't want to share a cell with Manny.... Suddenly there has been a powershift me thinks !!
> No cap in hand resolution scheme this time!!! Enough evidence has been gathered to make Ralphy very uncomfortable....
> 
> BTW Solly in answer to a previous question... I have ASIC on speed dial





Mash this now appears to be gaining a new momentum.


A new legal approach and treatment
New actions in the wind
Evidence given to ASIC which could be detrimental to one the Four Pillars
And a Bank willing to talk

I wonder if GG should check to see if there are any spare beds at "The Creek"?


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## specialed (30 May 2010)

Julia said:


> Thank you, Mash.  I don't believe you or anyone else has previously posted such a direct quote before.  If I'm wrong, perhaps you could direct me to the appropriate previous post.
> 
> It is indeed clear.  It was that wording Bunyip and I were looking for and which as far as I'm aware has not been posted before.
> 
> ...




Hi Julia, 

I too am sure this has been placed on the forum before, however, am not going to waste anyone’s time by trying to locate it through some 240 pages of blogs.

I suppose we have to realise that there are only of handful of storm investors who contribute to this forum and therefore not every request for information by contributors is read, let alone acted upon.  Whether you realise (or agree) or not, this forum has been perceived has having a very NEGATIVE attitude towards the storm clients personally, that borders on malicious sometimes. This observation is not directed at anyone in particular and is just MY belief. I know it is held by storm investors, who do not wish to put themselves up for more critisism by contributors to this forum who claim to fiancial wizards but actully offer very little up as proof of their financial success. This is not however to say that there havent been many valuable contributions to this debate, in this forum. But may also add to the reluctance of those few storm clients to risk the further consternation by some in this forum by bothering to  contribute here. Again, this is just my personal observation.

However, as recently as approx. two pages ago I again made mention of the CBA’s response to the issue of Margin call at the senate inquiry.  Whilst it is my abridged version, it basically sums up the CBA’s response to the inquiry. This failure to deal with the Margin loan issue effectively is at the heart of many storm clients perception of the failure of the resolution scheme, and in particular the feeling that the law firm responsible for it initial design and implementation has left many out in the cold.


That firm is happy to spruik the wonders of it, yet will in a recent article in the Townsville bulletin I believe there was only one person quoted who actually felt it had served them well.  Of those that have settled, how many have been forced to do so as time has simply run out ? I understand there are many who are VERY dissatisfied with the representation made of them by a certain law firm. But they just could not afford, either financially or mentally to continue the fight against the CBA, and certainly not against that particular law firm.  I do however feel very sorry for those involved i nthe floods in western QLD who now appear to be being chased by this mob. I trully hope their experience turns out to be better than may of the storm investors who have dealt with them.

It may turn out that the CBA has nothing to answer with respect to the margin call, however, it appears they are doing all they can to avoid letting it as issue get to court. As far back as December 08, a judge in Brisbane ruled that this needed to be decided upon, however the CBA made sure that a court case involving Storm itself would not get to trial…..

Given what a failure the senate inquiry was for storm investors, I can only sit and dreamed that Norris, and in particular those NOW ex cba employee's who made sush a timely exit will get to sit in the witness box. Obviously ASIC doesnt have the courage to do anything about it, prefering a "commercial resolution"........


----------



## Garpal Gumnut (30 May 2010)

Mash said:


> Julia and Bunyip
> I am sure you have been told this answer many times ...... Our original margin loan docs signed in 2002  States:
> 2.MARGIN CALLS ( I'm not shouting that's how it is typed in the contract)
> If the margin loan equals or exceeds a certain percentage of the overall security value (see page 7) you will receive a margin call. You cannot just wait out any downturns in the market. You will have limited time to deal with any margin call, by either repaying to us enough of your facility or giving us more securities on our list. If you fail to act within the time periods specified in the terms and conditions then some of your securities may be sold so as to reduce the amount owing to an amount that does not exceed the base security value..
> ...




I wish you the best of luck with this angle of attack Mash.
Beware though that if Manny or any of his minions are convicted of criminal conduct in relation to the moiety or timeliness of communication of portfolio valuations to CBA, that the latter may have a rock solid defence. 



Julia said:


> Thank you, Mash.  I don't believe you or anyone else has previously posted such a direct quote before.  If I'm wrong, perhaps you could direct me to the appropriate previous post.
> It is indeed clear.  It was that wording Bunyip and I were looking for and which as far as I'm aware has not been posted before.
> Why then has there been all this long period of confusion about whether it was the CBA or Storm who were responsible for the margin calls?
> Are CBA alleging the responsibility was transferred to Storm at some stage?




It would be interesting to have *all *the margin loan document scanned and posted to this thread, as I cannot imagine any lender leaving the onus of knowledge of being in a margin call to the lender, rather than the holder of the security or their agent, in this case ole Manny. 



Solly said:


> Mash this now appears to be gaining a new momentum.
> 
> 
> A new legal approach and treatment
> ...




Solly as I predicted in the first few pages of this thread, many entities will sup at the table of a diminishing Storm dinner, Levitts & Co. are close to being the penultimate.

My contacts at the Ross Island Hotel, recently out of the "Creek", tell me that accommodation is at a premium, and it is often first in least dressed. Some doubling up occurs and there has been of late an unfortunate mixing of white collar criminals with the dangerous. The latter's complaints about this have fallen on deaf ears and they often have to, in their frustration, resort to their habitual forms of response.  

gg


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## Solly (30 May 2010)

Solly said:


> *"Class action pending in Storm loans fiasco"*
> 
> "SYDNEY law firm Levitt Robinson says it is ready to launch a class action against the Commonwealth Bank on behalf of ''hundreds'' of victims of failed investment company Storm Financial."
> 
> ...





On re-reading Tony Raggatt's article the quote,

''The statement of claim * impeaches the lawfulness of the scheme which was allegedly operated by CBA with Storm *and to which the class members contributed their equity'', 

has caught my interest. 

What 'scheme' is Stewart Levitt referring to in this statement ?


----------



## Julia (30 May 2010)

Specialed, your post above is very reasonable.  Pity all the exchanges throughout this thread could not have been conducted in a similar vein.


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## Solly (31 May 2010)

*"Storm victims face a difficult decision"*

"Two recent events may make the path forward clearer for those Commonwealth Bank customers left practically penniless in the collapse of Storm Financial.

First, a damning report by Storm Financial's liquidators released last week tears up any remaining credibility the founder of Storm, Emmanuel Cassimatis, may have had."

More by Stuart Washington on Business Day from the SMH here;

http://www.businessday.com.au/business/storm-victims-face-a-difficult-decision-20100530-wnfz.html


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## Solly (31 May 2010)

*"Storm Financial consumer action group hit by infighting"*

"THE common purpose which once united Storm Financial victims has fractured.

About 3000 devastated investors in the failed Townsville advisory firm still want justice and compensation for losses estimated at $3 billion when the share- market crashed in late 2008."

More by Anthony Marx in The Courier Mail here;

http://www.couriermail.com.au/business/storm-financial-consumer-action-group-hit-by-infighting/story-e6freqmx-1225873234080


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## Quincy (31 May 2010)

Solly said:


> *"Storm Financial consumer action group hit by infighting"*
> 
> Indeed, many believe that any judge will order mediation before setting a court date for Levitt's case, taking the process back to where it is now with Slater & Gordon.
> 
> ...





I raised this issue on 24th-June-2009.
https://www.aussiestockforums.com/forums/showthread.php?p=451123#post451123


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## Ironhalo (31 May 2010)

Good to see this topic still going strong ladies and gents.

I noted this with much pleasure in the article: 'Disagreements over the direction of the group have seen the recent departure of co-founder Graham Anderson and _publicist Max Tomlinson_.'

Ho ho ho! Turns out our old friend Big Max who used to claim on this forum (after admitting to doing 'work' for them) that SICAG were a paradigm of virtue may have swung to our way of thinking afterall! 

This whole SICAG disgrace was picked up early on in the piece by a lot of people, and it's testament to the posters here that we stuck to our guns in light of being called tin-foil hat wearing conspiracy theorists. So Weir admits that he has been in contact with Cassimatis on many occasions, and also admits to 'dining with the devil', which although he is being metaphorical, is something that we also stated early on in the piece.

SICAG may have been great for letting people get things off their chest and for the odd BBQ, but we all knew they were rotten from the start.


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## Solly (31 May 2010)

Ironhalo said:


> Good to see this topic still going strong ladies and gents.
> 
> I noted this with much pleasure in the article: 'Disagreements over the direction of the group have seen the recent departure of co-founder Graham Anderson and _publicist Max Tomlinson_.'
> 
> ...




Ironhalo, I wonder if Big Max ever drops in from the ether to peruse ASF. I believe it would be very interesting to hear his views and comments on Anthony Marx's report about his departure.

But I suppose he has new interests now....

Are you sure 'rotten' is a good description for SICAG ?
I believe that there would be mixed views held by the SICAG membership regarding the blame and culpability of the participants in this collapse. I only base this on my past experience of similar groups that I have previously observed, as I've never been to a SICAG meeting or event. 

I do agree that the group would be beneficial and supportive for those who have been through some very dark days.


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## Mindstorm (31 May 2010)

Ironhalo said:


> Good to see this topic still going strong ladies and gents.
> 
> I noted this with much pleasure in the article: 'Disagreements over the direction of the group have seen the recent departure of co-founder Graham Anderson and _publicist Max Tomlinson_.'
> 
> ...






Ironhalo,

I'd be interested in who 'we' are in your post.

I'd also be interested to know who you see as SICAG, the men on the committee, or the membership of SICAG?

Maybe I read the article wrong, but I thought that Mark Weir said that he WOULD dine with the devil, not that he had dined with the devil.

MS


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## Ironhalo (31 May 2010)

Mindstorm, back a few months ago (and certainly when SICAG began to pick up momentum) a number of posters here smelled a rat and posted accordingly.

SICAG has always been compromised by ex-Storm advisers, and when a relative of mine approached Weir at the time this all blew up with evidence that Manny was culpable, he got told 'that's not the line we want to take'. 

The SICAG members were a great support unit for each other and the Storm victims, but there were evidently (and continue to be) fingers pulling the puppet strings at the top. The fact that Andrew O'Brien's father was on the committee, with Ron Jelich throwing in his 2c all the time turned many people off....not to mention the fact that Emmanuel (and let's not forget his equally culpable wife, no one ever mentions her) and Julie are both made of Teflon according to SICAG as well.


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## Lone Wolf (31 May 2010)

Specialed, thank you for your informative and well thought out contribution to the discussion.

I honestly feel for anyone who had the capacity to ride out the market crash but was sold up without prior consent or warning. I would like to see these true victims compensated by the ones legally responsible. Unfortunately I feel that there are many people who could never have survived the market crash due to poor investment decisions who are now claiming victim status and demanding compensation along with those who honestly deserve it. I can only hope that in the end everyone will get what they deserve, but life is seldom fair. The recent petition caused me to focus on the leeches looking for money they don't deserve, you however are focused on the main issue of compensation for those who deserve it.


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## Lone Wolf (31 May 2010)

Mash said:


> 2.MARGIN CALLS ( I'm not shouting that's how it is typed in the contract)
> If the margin loan equals or exceeds a certain percentage of the overall security value (see page 7) you will receive a margin call.




That statement is just vague enough to give the banks room to fight it. It says "you will receive a margin call". It doesn't actually specify that they are the ones who will contact you. Of course anyone reading that document would probably assume that they mean the bank will issue the call directly to you. But by missing out the details on how you will receive the call they can now argue that they had arranged for Storm to handle it. I'm not saying this is right, just that I can see why they have room to argue. Thank you for sharing the information Mash.


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## maccka (31 May 2010)

Ironhalo said:


> The SICAG members were a great support unit for each other and the Storm victims, but there were evidently (and continue to be) fingers pulling the puppet strings at the top.




Firstly thank you for recognising the great support that SICAG members offer each other AND other Stormers.

Secondly - Sorry Ironhalo - where is the evidence of the fingers pulling puppet strings at the top?  Not the heresay - the evidence?



Ironhalo said:


> The fact that Andrew O'Brien's father was on the committee, with Ron Jelich throwing in his 2c all the time turned many people off..




Now I suspect I know how you are likely to respond to this, but do you have any idea (I mean real first hand knowledge) of what Andrew O'Brien and Ron Jelich have spent the last year or so doing?  Isn't it just possible that they are working to hard to help people find justice?  Isn't it also possible that these guys are willingly providing _very valuable information_ to various legal bodies (courts, ASIC, inquiries etc) that could be used to unravel the truths behind what actually happened?  

I suspect that if the court cases Levitt promised on Saturday eventuate (and I strongly suspect that they will) people will come to see what Andrew O'Brien and Jelich have been doing over the last little while and might actually see why people have let them speak from time to time.  I believe that both of these men probably have some very important stories to tell.  I also believe that their information is probably backed up with a considerable amount of *evidence*!  

And on another related note - A quick question for you Ironhalo - if you witnessed a terrible wrong and felt you could do something to help people, would you stop yourself from helping just because your child worked for one of the companies involved in that terrible wrong?



Ironhalo said:


> ..not to mention the fact that Emmanuel (and let's not forget his equally culpable wife, no one ever mentions her) and Julie are both made of Teflon according to SICAG as well.




SICAG have *never* claimed that EC or JC are made of Teflon.  

Please don't flame SICAG for my words.  I am proud to be a member of this group but that is all I am - a member.  I do not represent the organisation.  I am writing here representing *my views only*.  If you take issue with what I said - have a crack at me not at them.

Maccka


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## Julia (31 May 2010)

Solly said:


> First, a damning report by Storm Financial's liquidators released last week tears up any remaining credibility the founder of Storm, Emmanuel Cassimatis, may have had."
> 
> More by Stuart Washington on Business Day from the SMH here;



From that very balanced article by Stuart Washington:


> In at least one important respect many Storm victims are not in the same category as Goodridge. In Goodridge's case, the judge was convinced he was willing and able to make good margin calls if they had been made. Most Storm investors did not have the wherewithal to meet the margin calls as the market fell in 2008.



This is perhaps where some Storm investors will be disappointed if they go with the class action.



Lone Wolf said:


> I honestly feel for anyone who had the capacity to ride out the market crash but was sold up without prior consent or warning. I would like to see these true victims compensated by the ones legally responsible. Unfortunately I feel that there are many people who could never have survived the market crash due to poor investment decisions who are now claiming victim status and demanding compensation along with those who honestly deserve it. I can only hope that in the end everyone will get what they deserve, but life is seldom fair.



You're further endorsing the remarks by Stuart Washington.

One has to wonder what on earth ASIC are actually doing amongst all this!


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## Ironhalo (1 June 2010)

maccka said:


> Secondly - Sorry Ironhalo - where is the evidence of the fingers pulling puppet strings at the top?  Not the heresay - the evidence?




I'm from Redcliffe mate (but live in Sydney), and witnessed as Ron Jelich and Andrew O'Brien (two of the Redcliffe Storm employees) sat back and despite pleas and phone calls from 3 members of my family tied up in Storm, did nothing to take action when it all hit the fan, despite being told to do so.

So when SICAG first formed, it raised eyebrows in my family to see O'Brien's father join the committee (it's a little convenient) and Jelich start appearing in the Redcliffe Herald demanding 'justice' for his former clients....and himself of course.

Now while I have some modicum of respect (fleeting at best) for Ron Jelich's apparent guilty conscience in all of this, it still galls me to see him now signing a petition asking the govt to compensate ex-Stormers for their loss. If you want the truth about what happened, ask Ron Jelich. Ask Andrew O'Brien. They know because they were there, and they were the ones racking up bonuses as they advised and took out step installments to margin loans on behalf of people who were going down the drain as they did so.



maccka said:


> And on another related note - A quick question for you Ironhalo - if you witnessed a terrible wrong and felt you could do something to help people, would you stop yourself from helping just because your child worked for one of the companies involved in that terrible wrong?




Nope, but I couldn't claim surprise when a lot of people wanted nothing to do with the organisation I was forming for 'justice' either.

I'll never have a go at the people in SICAG mate, my family are in their same boat. I have no doubt that SICAG have helped people morally and via BBQs/events etc, but from my point of view, and has been repeated in this thread for a while now, you would have to be very naive to think that all of the committee members have purely altruistic reasons for pushing the 'let's not blame EC/JC and let's hit the banks' dogma that they have been running with. 

One of the strengths in being a cynical bastard is that I am rarely disappointed in life!


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## chrisgee (1 June 2010)

i have'nt been posting for a while but i do drop in and read occasionally-i really dont know where this will all end up but i really really hope that the crims in all of this end up in jail-this has been a rough trot for the family-i cant say what the family is doing with the legal stuff but im sure you can tell we aint happy with whats going on- theres more to this than what is being said-come on asic show some guts and get to the bottom of why this was allowed to happen like it did-some of you guys on this thread are a lot smarter than me with money stuff but when you see what this has done to ordinary people who just thhought they were doing the right thing going to reputible people-it makes me sick- I dont understand why the banks behaved the way they did and i dont understand why storm behaved the way it did- but i cant ubderstand why the stormies are the ones carry the can-I can rant and rave all day but it doesnt help-asic cops and guts are the way that the truth about all of this will come out- i may not post for a while again- it really makes me so angry talking about this fiasco!!!!! my break is finished I got to go back to work now unlike some others involved in all of this


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## bunyip (1 June 2010)

bunyip said:


> specialed, assuming that Storm investors had been able to hang in there, how would they now be sitting on an investment worth more than when the market crashed?
> The market hasn't yet recovered its losses, has it?




specialed - Did you miss seeing the question above? Or did I miss seeing your answer?


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## specialed (1 June 2010)

bunyip said:


> specialed - Did you miss seeing the question above? Or did I miss seeing your answer?




Sorry, forgot about that question. No you are right and I was not clear. 

I meant to say that they would now be sitting on an investment worth significantly more than the margin loan trigger point, and also significantly more than any further margin calls if they were made. They would infact be far off margin call territory, which for many was the basis behind the margin call-  That is , a last resort, fail safe...Whilst anyone can rightly argue the use of a margin call to protect what little value you have left may be inadvisable, the reality is that many of the investors understood that if things got this bad, then at least they had this in place. How wrong it would seem they were to believe that the CBA would act in an ethical, and possibly contract bound way, and actually complete their obligation to make a margin call directly to the client. 

By the way, if you would mind going back and answering the number of questions I have asked you that you have declined to answer I would be most appreciative....I think I remember you stating however that you had no interest in responding to my questions, or something of that ilk. I'm could be mistaken however.


----------



## bunyip (1 June 2010)

specialed said:


> Sorry, forgot about that question. No you are right and I was not clear.
> 
> I meant to say that they would now be sitting on an investment worth significantly more than the margin loan trigger point, and also significantly more than any further margin calls if they were made. They would infact be far off margin call territory, which for many was the basis behind the margin call-  That is , a last resort, fail safe...Whilst anyone can rightly argue the use of a margin call to protect what little value you have left may be inadvisable, the reality is that many of the investors understood that if things got this bad, then at least they had this in place. How wrong it would seem they were to believe that the CBA would act in an ethical, and possibly contract bound way, and actually complete their obligation to make a margin call directly to the client.
> 
> By the way, if you would mind going back and answering the number of questions I have asked you that you have declined to answer I would be most appreciative....I think I remember you stating however that you had no interest in responding to my questions, or something of that ilk. I'm could be mistaken however.




What questions would they be?

Given the aggressive tone of some of your early posts on this thread, it would hardly be surprising if I or anyone else treated your questions with disdain and chose to ignore them.
More recently, to your credit, you've moderated your tone and have adopted a more reasonable attitude. Perhaps your warning or two from the moderator, and having one of your posts deleted, may have tempered your approach.

If you can give me a list of the questions, I'll see if I think they're worth answering.


----------



## bunyip (2 June 2010)

Mash said:


> Julia and Bunyip
> I am sure you have been told this answer many times ...... Our original margin loan docs signed in 2002  States:
> 2.MARGIN CALLS ( I'm not shouting that's how it is typed in the contract)
> If the margin loan equals or exceeds a certain percentage of the overall security value (see page 7) you will receive a margin call. You cannot just wait out any downturns in the market. You will have limited time to deal with any margin call, by either repaying to us enough of your facility or giving us more securities on our list. If you fail to act within the time periods specified in the terms and conditions then some of your securities may be sold so as to reduce the amount owing to an amount that does not exceed the base security value..
> ...




No, I don't believe we _'have been told this answer many times'_. If we have, then I've missed it. Thank you Mash, for posting it here. 

I note that the document says 'you will receive a margin call'. It doesn't say '_*we*_ will give you a margin call'. 
At first glance it appears that the banks are putting the responsibility on themselves to contact you to let you know when you're in margin call. Nevertheless, it doesn't actually say that. 
I'm not a legal person, but I'm guessing that this wouldn't hold much weight as evidence against the bank in a law court. A lawyer for the bank would argue that the bank made no claim that _*they*_ would give you a margin call. Which in fact, they did not, if I interpret that document correctly. I suspect that the wording is sufficiently vague and ambiguous to let them off the hook. 
Also, a smart lawyer might argue that the responsibility of the bank was to let your financial planner know of the margin call, since they were acting on your behalf. And that the bank fulfilled that responsibility, even though Storm Financial denies it.
Or the bank may simply say they phoned you and advised that you were in margin call.
I don't know if banks are legally bound to put margin calls in writing, or whether a phone call is enough.
I once got a phone call from my Futures broker to say I was in margin call on some Gold Futures contracts. It turned out that he had the wrong client - I'd never bought any Gold contracts. The point I'm making is that a phone call was their method of contacting me. Banks may or may not  use the same methods of contact as Futures brokers - I don't really know.

I'm sure someone else posted a copy of the margin loan conditions of one of the banks on here many months ago. The document stated clearly, as I recall, that the bank had no responsibility to advise clients when they were in margin call - the responsibility lay with the client to monitor their positions to see when they were in margin call.
I'd welcome anyone else posting the terms and conditions of their margin loan, particularly what the document says about margin calls. It would be interesting to see if there's any difference between the various banks in how they word their documents.

I'm no apologist for the banks - I've repeatedly stated on here that I don't like them, I doubt if they're squeaky clean in the Storm saga, and they should have legal action brought against them if they can be proven to have done anything illegal.
If an investor was sold out of his investments without being given the opportunity of meeting a margin call, and _*if*_ it can be proven that the bank failed in its duty to personally contact the client to advise they were in margin call, and _*if*_ it can be proven that the client had the financial means of meeting the margin call and any subsequent margin calls that would have been made before the market started recovering, then the investor may have a case to sue the bank for compensation. 
And_* if*_ they do have a case, then it's perfectly understandable and reasonable that they would have a crack at the bank concerned. I'd probably do the same in their situation.
However, there's a number of _*'if's'*_ in there, and most of them won't be easily proved.

I suspect that most Storm clients would not have had the financial means to meet a margin call even if they received one, let alone meet a second or third margin call. Being sold out when they did may have saved many of them from even heavier losses if they'd been allowed to stay in the market longer.

It's oh so easy for Stormers to say it's all the banks fault for lending us so much money, and for not letting us know when we were in margin call. What's conveniently forgotten is that the losses to their net worth were already significant, indeed catastrophic for many of them, by the time their accounts went into margin call. What also seems to be forgotten is that these big losses to their net worth were a result of Storm Financial selling them into a highly risky strategy that was an accident waiting to happen as soon as the stockmarket ran out of steam. And further that they, the clients, accepted this strategy without thoroughly assessing the pros and cons of it.

For these reasons, it's completely unrealistic to swallow the Cassamatis line that it's all the banks fault. He, of course, will be delighted with anyone who is gullible enough to believe him.


----------



## specialed (2 June 2010)

bunyip said:


> I'm not a legal person, but I'm guessing that this wouldn't hold much weight as evidence against the bank in a law court. A lawyer for the bank would argue that the bank made no claim that _*they*_ would give you a margin call. Which in fact, they did not, if I interpret that document correctly. I suspect that the wording is sufficiently vague and ambiguous to let them off the hook.
> Also, a smart lawyer might argue that the responsibility of the bank was to let your financial planner know of the margin call, since they were acting on your behalf. And that the bank fulfilled that responsibility, even though Storm Financial denies it.
> Or the bank may simply say they phoned you and advised that you were in margin call.
> I don't know if banks are legally bound to put margin calls in writing, or whether a phone call is enough.




Bunyip, I agree with your analysis of the vagueness of the line in the margin loan document noted earlier.

However, isnt the contract between the bank and the client (storm investor). The financial planner is merely advising the investor and not party to the contract. Regardless of whether this is a "storm badged" fund or not, the client is the investor. Therefore why would the "you" be anyone but the client. Does this mean "you" could also be my local branch manager, my accountant etc.   I am not sure whether anywhere in the rest of the contract it refers to the FP being a party to the contract. However, if it does not, then wouldnt this mean the only parties to the contract are the client and the bank and therefore the "you" can only mean, ( despite what may be "industry standard") the client...Storm is not the client, the investor is.

Any thoughts ?


----------



## specialed (2 June 2010)

bunyip said:


> If an investor was sold out of his investments without being given the opportunity of meeting a margin call, and _*if*_ it can be proven that the bank failed in its duty to personally contact the client to advise they were in margin call, and _*if*_ it can be proven that the client had the financial means of meeting the margin call and any subsequent margin calls that would have been made before the market started recovering, then the investor may have a case to sue the bank for compensation.
> And_* if*_ they do have a case, then it's perfectly understandable and reasonable that they would have a crack at the bank concerned. I'd probably do the same in their situation.
> However, there's a number of _*'if's'*_ in there, and most of them won't be easily proved.
> 
> I suspect that most Storm clients would not have had the financial means to meet a margin call even if they received one, let alone meet a second or third margin call. Being sold out when they did may have saved many of them from even heavier losses if they'd been allowed to stay in the market longer.




Sorry, Also,

why should the client now have to prove they had the funds to meet the call. Isnt this part of the claim regarding the banks illegal behaviour "not acting as a prudent banker" - In granting the margin loan they made the determination that this client could meet their obligations. This is the "risk" that the bank takes, and the client pays for in fees etc . Surely the determination should be based around whether the bank met its obligations, not whether, hyperthetically the client could have. I certainly had the funds to help out some of the people I know if given the opportunity. But how "wide" should the client be allowed to secure the funds, there own money, relatives, family friends etc etc......


----------



## bunyip (2 June 2010)

specialed said:


> Bunyip, I agree with your analysis of the vagueness of the line in the margin loan document noted earlier.
> 
> However, isnt the contract between the bank and the client (storm investor). The financial planner is merely advising the investor and not party to the contract. Regardless of whether this is a "storm badged" fund or not, the client is the investor. Therefore why would the "you" be anyone but the client. Does this mean "you" could also be my local branch manager, my accountant etc.   I am not sure whether anywhere in the rest of the contract it refers to the FP being a party to the contract. However, if it does not, then wouldnt this mean the only parties to the contract are the client and the bank and therefore the "you" can only mean, ( despite what may be "industry standard") the client...Storm is not the client, the investor is.
> 
> Any thoughts ?




specialed - I can see you've given this a lot of thought. I'm not in a position to say whether you're right or wrong. I'm sure there are people far better qualified than me to comment on the correctness or otherwise of what you've said.

I simply repeat what I've stated all along....

* If Storm clients can prove that the banks have cost them money by acting illegally, then they should sue the banks.

* If Storm clients are honest and are looking for justice, rather than simply making a grab for as much cash as they can get from anyone they think they may have a chance of getting it from, then they must let go of this ridiculous Cassamatis-inspired nonsense that the banks are solely to blame. 
They must accept that a significant part of the responsibility lies firstly with Storm Financial, and secondly, with the clients themselves for accepting such a risky investment strategy without adequately identifying and assessing the risks involved.

* If Storm clients have any integrity at all, they won't persist with their ludicrous campaign to get Australian taxpayers to compensate them for their losses.

I don't think any less of Stormers for making mistakes. From time to time I too have made bad investment decisions that have cost me money. There's no question that many of them, probably most of them, are decent people who thought they were doing something positive for their future.
I have great admiration for those who have faced reality by saying _'Yeh, we made mistakes, we're partly responsible for what happened to us, let's move on and make the most of our lives from here on.' _
Smiley is one such person who comes to mind for his positive and realistic attitude in this regard.

What disappoints me is the Stormers who want to put all the blame on others, while accepting none themselves. And worse still, demanding compensation from innocent people (Australian taxpayers) who are not in any way responsible for the disaster that befell Storm Financial clients.


----------



## bunyip (2 June 2010)

specialed said:


> Sorry, Also,
> 
> why should the client now have to prove they had the funds to meet the call. Isnt this part of the claim regarding the banks illegal behaviour "not acting as a prudent banker" - In granting the margin loan they made the determination that this client could meet their obligations. This is the "risk" that the bank takes, and the client pays for in fees etc . Surely the determination should be based around whether the bank met its obligations, not whether, hyperthetically the client could have. I certainly had the funds to help out some of the people I know if given the opportunity. But how "wide" should the client be allowed to secure the funds, there own money, relatives, family friends etc etc......




If anyone was to claim in court that they could have met any margin calls, had they actually received any, thereby enabling them to stay in the market and ride out the slump, then I assume they'd be required to substantiate their claim by presenting solid evidence to support it.
But I'm not a legal eagle - a lawyer would be your best bet to give you an opinion on this.


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## Solly (2 June 2010)

From the ASIC  Website 

https://storm.asic.gov.au/storm/storm.nsf

Update 1 June 2010
On 19 March 2010 ASIC announced that, in relation to recovery of compensation for Storm investors, it would enter into confidential discussions with entities which had been the subject of its investigations to see if a commercial resolution could be reached which would be acceptable to ASIC and which ASIC would be prepared to recommend to investors.
Confidentiality agreements have been put in place with a number of entities and pursuant to those agreements confidential discussions are proceeding. These discussions involve complex commercial and legal issues and are likely to continue during June.
ASIC will provide a further update in respect of the discussions at the end of June.


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## specialed (2 June 2010)

Solly said:


> From the ASIC  Website
> 
> https://storm.asic.gov.au/storm/storm.nsf
> 
> ...




It perplexes me why ASIC, which has consumed so much public money in this affair has decided that confidentiality agreements are acceptable.  Quite obviously Storm Financial is not one of the entities involved in these agreements as it is insolvent. Therefore who are these entities and what have they done that discussions are proceeding only as a result of these agreements.  

Are shareholders, or customers of these entities being misled by the absence of information concerning the behaviours of these entities with respect to the Storm Financial mess.

If the CBA, BOQ, or any other "entities" have been found to have engaged in something that requires a commercial resolution then I feel I need to know about this. As a shareholder I would like to know if I am investing in a company that has engaged in illegal activities, and may again do the same which may affect my dividends etc into the future. If I am a customer of an entity that has done the same, I want to be informed so I can make an informed decision about whether to continue using this comapany, or risk becoming a victim myself..


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## specialed (2 June 2010)

It would appear to me that at this stage ASIC is more concerned with protecting the entities rather than protecting the consumer or investor..

This is troubling....


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## Lone Wolf (2 June 2010)

specialed said:


> However, isnt the contract between the bank and the client (storm investor). The financial planner is merely advising the investor and not party to the contract. Regardless of whether this is a "storm badged" fund or not, the client is the investor. Therefore why would the "you" be anyone but the client. Does this mean "you" could also be my local branch manager, my accountant etc.   I am not sure whether anywhere in the rest of the contract it refers to the FP being a party to the contract. However, if it does not, then wouldnt this mean the only parties to the contract are the client and the bank and therefore the "you" can only mean, ( despite what may be "industry standard") the client...Storm is not the client, the investor is.
> 
> Any thoughts ?




The problem isn't with the definition of "you". Yes, the contract is between the bank and the client. And it is made quite clear that "you" in this case is the client. But the problem is that the contract doesn't actually state who will inform the client. It simply states that the client will be informed. As I said earlier, most people would immediately assume this means the bank will contact them directly. But in hindsight it was never made clear.

I think it would be perfectly reasonable for a bank to communicate directly with the FP rather than the client. If you have informed the bank that you have a FP managing your investments, then I wouldn't be surprised if it was preferred that the FP receives all communications. For various reasons the bank may have trouble contacting a client, they've changed their phone number and the letter from the bank sits unopened on the table for a week because "I'll read that later". Or the client may be so unaware of financial matters that they don't fully comprehend the seriousness of the situation. But the FP should always be there to receive the call from the bank, explain the process and available options to the client and assist with the paperwork. That is their job after all. Ideally both would be informed, and certainly it should all be put in writing.


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## Lone Wolf (2 June 2010)

specialed said:


> why should the client now have to prove they had the funds to meet the call.




This is where people differ in their approach to the subject. You seem to be focused purely on compensation for those affected. I believe you also need to ensure that people only receive compensation if they are entitled to it. I don't mean to answer for Bunyip, but the reason clients should need to prove that they had the capacity to meet the call(s) is because this is part of what determines if they are entitled to compensation. If you could never have met the call then you would have been sold out at an LVR of 90%, leaving you with 10% of your total investment. That's what your chosen investment strategy left you with and that's all you are entitled to. If however you could have met the call but didn't get the chance that you were legally entitled to, then the banks actions have caused you financial loss and you deserve to be compensated by the bank.



specialed said:


> In granting the margin loan they made the determination that this client could meet their obligations. This is the "risk" that the bank takes, and the client pays for in fees etc.




I may be reading this wrong, but it sounds like you're saying the bank wouldn't have given you the loan in the first place if they didn't think you could meet the margin call. In granting the margin loan the bank did not determine that the client can meet the margin call. The margin call is just there ensure the client doesn't end up owing the bank more than they can pay. The bank has no idea, and probably doesn't care if you can meet a margin call if required.



specialed said:


> Surely the determination should be based around whether the bank met its obligations, not whether, hyperthetically the client could have. I certainly had the funds to help out some of the people I know if given the opportunity. But how "wide" should the client be allowed to secure the funds, there own money, relatives, family friends etc etc......




How can you discuss compensation without determining how much damage was actually done to the client? Although it is a bit of a joke. It wouldn't be hard to get a rich friend to testify that they would have given you all the funds you need. Even if in reality they never would have given you anything at the time. In the middle of the GFC, the market is crashing, who knows where the bottom is. How many people would loan you money for a margin call, then another... then another...


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## Julia (2 June 2010)

Lone Wolf said:


> I may be reading this wrong, but it sounds like you're saying the bank wouldn't have given you the loan in the first place if they didn't think you could meet the margin call. In granting the margin loan the bank did not determine that the client can meet the margin call. The margin call is just there ensure the client doesn't end up owing the bank more than they can pay. The bank has no idea, and probably doesn't care if you can meet a margin call if required.



Agree.  There is throughout this thread the naive assumption that the bank has some moral obligation to look out for the total welfare of the client.
All the bank really cares about is its own protection, i.e. that it holds sufficient security against the client loan to ensure it does not lose money.
The rest is up to the client and/or their financial adviser.
No, it's not an ideal situation.  I'm sure we'd all like to think our friendly banker exists to ensure our personal and financial security, but it just ain't so.



> How can you discuss compensation without determining how much damage was actually done to the client? Although it is a bit of a joke. It wouldn't be hard to get a rich friend to testify that they would have given you all the funds you need. Even if in reality they never would have given you anything at the time. In the middle of the GFC, the market is crashing, who knows where the bottom is. How many people would loan you money for a margin call, then another... then another...



Exactly.

Still, I feel for you, specialed, in wanting the best possible outcome for the people close to you who have lost money.
Have they decided whether to accept the CBA offer, or go for the pending class action?  Must be a really difficult choice.


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## Solly (3 June 2010)

*"SICAG chair hits back over scheme sacking
ASIC enters Storm compo discussions"*


The co-chair of SICAG has hit back at public statements made by Slater & Gordon over his removal from the CBA resolution scheme.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9346.htm


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## Solly (3 June 2010)

*"Storm victim in new stoush"*

"ONE of the high-profile victims of the Storm  Financial disaster, action group co-chairman  
Mark Weir, is claiming he is now being victimised by lawyers supposed to be representing him."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/06/03/143371_news.html


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## specialed (3 June 2010)

My comment is in regards to the loans that were given that were not servicable. ie, Pension whose sole income is the pension getting 500,000 loans. In granting the margin loan the bank has determined that the client is able to meet their obligations. The margin call is just one element of this loan.  The bank is right to make the call and cash it in the stock, but only after it has afforded the customer the 5 days. I cant believe, ASIC have been unable to make a determination one way or the other with regards to this.

Surely at some point either thay or the court is able to determine who was responsible fo rthe call, and communicating the call. Once this is determined then if it is the banks then compensate those who could have met the call. If it is storms, then free the bank form any responsibility for this aspect. The resoultion scheme appears muddy, with clients not actually knowing what they are being comensated for. The banks compensating them, but denying any responsibility.   If the bank does not agree that it did anything wrong in terms of the margin call, then surely this is outside the terms of the settlement. Therefore, if it does end up in court and they are found to have acted outside of the law, then despite any confideniality agreements the client should be able to persue the banks......if they have acted outside the law


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## Solly (3 June 2010)

*"Last-ditch action in Storm fight"*

"A Lawyer threatening a class action against the Commonwealth Bank on behalf of more than 300 wiped-out Storm Financial clients has started a last-ditch bid to avoid a court battle."

Read more by Anthony Marx in The Courier Mail of June 2, 2010 on page 49.

Article mentions Stewart Levitt's 2.5 hour meeting with bank officials on June 1.


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## bunyip (3 June 2010)

Solly said:


> *"SICAG chair hits back over scheme sacking
> ASIC enters Storm compo discussions"*
> 
> 
> ...





Interesting comment here from Mark Weir about the Storm case being likely to drag on in the courts for years.

_''We were hopeful the scheme would deliver an outcome that would settle this matter, enabling our members to pick up the pieces of their shattered lives and allow the bank to get on with its business,'' he said.

''Instead it would now seem inevitable that it will drag on in the courts for years.''_

There were a number of us here on this thread who expressed a similar opinion at the outset - that this Storm business would drag on for years, and that the big winners would be the law firms.

I wonder though, if Mark Weir and some other Stormers have unrealistic expectations in regard to compensation.
From what I read, more than half of those who were offered a compensation deal with the bank have accepted the offer, and moved on with their lives.
While they probably received less than they were hoping for, they apparently considered the offer attractive enough to accept.
I don't know what sort of deal Mark Weir is hoping for, but maybe he needs to lower his sights a little, put less blame on the banks, and more blame on Storm Financial who are primarily responsible for the mess. 
Also, Mr Weir may need to start accepting some of the blame himself, if he's not already doing so.
If he's swallowed the unrealistic Cassamatis-generated propaganda that the banks are entirely to blame for what happened to Storm clients, then he's likely to hold a very unrealistic view of what compensation the banks should pay. If this is in fact the case, then I daresay he'll be disappointed with the final outcome.


----------



## Mindstorm (3 June 2010)

bunyip said:


> Interesting comment here from Mark Weir about the Storm case being likely to drag on in the courts for years.
> 
> _''We were hopeful the scheme would deliver an outcome that would settle this matter, enabling our members to pick up the pieces of their shattered lives and allow the bank to get on with its business,'' he said.
> 
> ...




Bunyip,

I've come back again and again to respond to your post,and deleted every response till now.  Why?  Because I am frightened that I will be seen as breaking the 'non-disclosure' clause in our offer from CBA.  

Please don't believe everything you read in the media.  Just because it's in black and white it doesn't mean that it's the truth.

MW has not been 'fully' quoted, so what you've posted is not quite what he said.  As always, the media have artistic license.  

Please note also that the media rely heavily on advertising fees.  Not that I would make any disparaging remarks about media correspondents, but their bread and butter is in advertising, is it not?

How many web pages do you open up that *don't* have an advertisement for one bank or another?

Again, from what you've read, you form an opinion on how many clients are accepting offers.  If over half the clients have accepted offers how can I know of so many who haven't?  I only know one client who has accepted.  They accepted because they could not afford, health-wise, mental well-being wise, or financially, to continue.  They were not happy with their offer.  They just couldn't go on any longer.

For now, only CBA clients are tied by their 'secrecy clause'.  We can't discuss our dealings with the bank with our families let alone anyone else.  Can you please ask yourself why, if the banks are being so magnanimous, so generous, that they are gagging us from disclosing their offers?

Going to court will allow the truth to finally come out.  There are many clients who will be very happy to go to court to do just that.  The truth, the whole truth, under oath.

I would love to be able to be totally truthful with you and the forum right now, but unfortunately I've been gagged, bound to secrecy, by a bank that promised 'transparency' in their resolution scheme.


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## Garpal Gumnut (3 June 2010)

Mindstorm said:


> Bunyip,
> 
> I've come back again and again to respond to your post,and deleted every response till now.  Why?  Because I am frightened that I will be seen as breaking the 'non-disclosure' clause in our offer from CBA.
> 
> ...




Mate, this a full of it post.

As many posters on this thread sussed from the beginning ,SICAG has been close to and involved with and in what is left of "Storm" as a concept and with its former advisers.

Their agenda is in some way to resurrect Storm as a going concern and restore all funds to the poor unfortunate bastards who lost their money through the Storm spin that markets only go up, and that leverage is without risk.

You sound like Mossad, James Bond or perhaps Maxwell Smart, in relation to secrecy. Every man and his dog at the Ross Island Hotel knows the terms of the CBA agreement with the clients who have decided to call it quits and get on with their life. 

It is related daily by victims to their families and friends.

So don't go on with this line of so called secrecy obliterating debate.

gg


----------



## specialed (4 June 2010)

Garpal Gumnut said:


> .
> 
> Their agenda is in some way to resurrect Storm as a going concern and restore all funds to the poor unfortunate bastards who lost their money through the Storm spin that markets only go up, and that leverage is without risk.




Garpal,

Your opinion in regard to SICAG is well known and I suppose the great thing about this forum is you are free to continue bashing it. But the comment above is so ridiculous it beggars belief that anyone could come up with this one and feel comfortable publicly stating it. 

I believe there is another forum on this site for conspiracy theories, this comment may be better there I believe.

Could you please offer some support for this claim. Could you please also elaborate on what evidence you have discovered that indicates anyone within SICAG or any of its members want storm resurrected. Further, how this could be achieved. 

I eagerly await your answers.


----------



## Ironhalo (4 June 2010)

I have 3 family members who have accepted the CBA's offer with relish, and one serving ADF member mate of mine who has also done that same thing. 

My personal argument with the CBA is that they sold my 2-month old investment out at the bottom of the market without ANY confirmation/phonecall, and now claim that they owe me nothing as we weren't in a margin call position when this all went down. My counter claim to that is, if we weren't in margin call, then why were we sold down in the first place? We had plenty of cash to cover any contingency, yet we were sold out at a $16k loss at the bottom of the market, for no reason. A long story short, Colonial decided to repay our margin loan when we weren't in margin call with our investment, without authorisation, and left us the pittance and loss that was left....with not even a statement received in Oct-Nov 08 to show what had happened.

Now what really gets up my goat is that there seems to be a portion of the Storm customer base who aren't satisfied with what they have been offered, and seem to be under the impression that the bank (or the Australian taxpayer) must return them to square one as if the GFC never happened. That's just bollocks. People need to take some responsibility for this themselves. 

Now let's use some common sense, when you start signing documents in triplicate for 1 million dollar margin loans, you must realise that some basic due diligence is in order. But no, the same people that are no moaning about how cut throat the banks are, are the same ones who were sported all over the Storm brochures gushing about their profits in 2007 and the overseas trips Storm was inviting them on. I didn't see any of these people raising questions when they were rolling in profits for FY 2007/08 no?

I'm not one for kicking people while they are down (I've been in the situation) but some people really need a reality check. It's irresponsible of SICAG to keep pushing this 'we must be fully compensated!' line. It's not going to happen.


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## Garpal Gumnut (4 June 2010)

Mindstorm said:


> Bunyip,
> 
> I've come back again and again to respond to your post,and deleted every response till now.  Why?  Because I am frightened that I will be seen as breaking the 'non-disclosure' clause in our offer from CBA.
> 
> ...






Garpal Gumnut said:


> Mate, this a full of it post.
> 
> As many posters on this thread sussed from the beginning ,SICAG has been close to and involved with and in what is left of "Storm" as a concept and with its former advisers.
> 
> ...






specialed said:


> Garpal,
> 
> Your opinion in regard to SICAG is well known and I suppose the great thing about this forum is you are free to continue bashing it. But the comment above is so ridiculous it beggars belief that anyone could come up with this one and feel comfortable publicly stating it.
> 
> ...




Specialed mate this has all been gone over before but for you and you alone, let us step into the cone of silence, just you and me . Now please listen.

The sicag webpage prominently states that it is not associated with the Cassimatis but in the lower left hand corner prominently lauds the fee model of theirs, as compared to present best practice fee charging by Financial Planners. Btw, I think all FP’s are muppets, but you guys don’t , so I guess that is my first piece of evidence.

Nowhere on the sicag site is there even one, not one tiny, tiny, criticism of Manny, the Storm model or the Cassimatis. This in spite of criticism of them and the model by the following
A Parliamentary Inquiry
A Liquidators Report
By the major litigating firm involved with sicag members.
The majority of ex clients I’ve spoken to in Townsville.
Ex staff of Storm
All the major financial commentators from the Murdoch, Fairfax and ABC Financial Press offices

Some of the top sicag identities are either senior ex Storm employees or held quite high positions in Storm. One at least to my knowledge is related to an ex Storm adviser.

In relation to the ressurection of the Storm model, this is for the future, I of course have no proof, it is a surmise made from rational examination of the facts and knowledge of previous scams and the guilty but not punished survivors of those scams. They start selling again.. They do what comes naturally to salesmen.



Now I couldn’t give a monkeys whether you accept this or not, most people I read and speak to do. 

People suffering delusions when they’ve been done over by charismatic salesmen often suffer from Stockholm Syndrome, where they identify with the perpetrator to protect their mind from further injury. 

I’ve never been to Stockholm, but I hear it’s a good place to get a root.

And you’ve been rooted good and proper by Storm, so I guess anything I say from the viewpoint of a reasonable person is not going to change your opinion.


gg


----------



## specialed (4 June 2010)

Garpal Gumnut said:


> Specialed mate this has all been gone over before but for you and you alone, let us step into the cone of silence, just you and me . Now please listen.
> 
> The sicag webpage prominently states that it is not associated with the Cassimatis but in the lower left hand corner prominently lauds the fee model of theirs, as compared to present best practice fee charging by Financial Planners. Btw, I think all FP’s are muppets, but you guys don’t , so I guess that is my first piece of evidence.
> 
> ...




This rambling offers evidence (or sorts) that SICAG is yet to critisise Storm financial via their website. It does not however answer my two questions. AGAIN, can you please offer the evidence you possess as to why SICAG or anyone would want to resurrect STORM, and how this would be acheived. While your at it you can explain how ASIC, FPA, etc etc would enable this to happen, what this would acheive. I actually agree with your opinion of FP's however with regard to the rest, there is very little that is rational about it.....


----------



## specialed (4 June 2010)

Garpal,

I'm sure I have asked this before but don’t recall getting an answer. 

Can you please explain to me why you show such vigour in your pursuit of SICAG. It obviously extends beyond just a cursory interest in the public good, yet to the best of my knowledge (and please correct me if I’m wrong) your efforts to point out its failing, and its hidden agenda remain stuck in this forum. I am wondering what this group actually did in the first place to cause you such distress.

What efforts have you made in the public arena to discredit what you seem to feel so strongly is such a hideous organisation, and have you done this without the shade of anonymity that this forum provides you. You mention the majority of ex clients you speak to. Is this the majority of ex clients, or just the majority of those you speak to. If you only speak with three,  then yes two would form a majority.  I am guessing that the number you speak to falls well short of the current membership of SICAG otherwise, they , along with yourself could have finished off with SICAG some time ago.

You highlight how most people you speak to accept your opinion. Can I suggest with the greatest of respect that you probably are not speaking to many, and certainly not many outside of this forum. Again, the many you refer to appear all but silent in their opposition to SICAG, and even more silent in the attempts to also rid the world of this support group.

I actually have no problem with your opposition to their volunteer organisation, but would like to know what exactly causes the agenda you have, there is obviously something that has happened. Do you care to share ?

By the way, As stated so many times, I have never, will never invest with storm. Have never, will never, as you so nicely put it "been rooted by storm"....I would actually like to have a few minutes alone with MANNY....


----------



## DocK (4 June 2010)

Ironhalo said:


> I have 3 family members who have accepted the CBA's offer with relish, and one serving ADF member mate of mine who has also done that same thing.
> 
> My personal argument with the CBA is that they sold my 2-month old investment out at the bottom of the market without ANY confirmation/phonecall, and now claim that they owe me nothing as we weren't in a margin call position when this all went down. My counter claim to that is, if we weren't in margin call, then why were we sold down in the first place? We had plenty of cash to cover any contingency, yet we were sold out at a $16k loss at the bottom of the market, for no reason. A long story short, Colonial decided to repay our margin loan when we weren't in margin call with our investment, without authorisation, and left us the pittance and loss that was left....with not even a statement received in Oct-Nov 08 to show what had happened.
> 
> ...




Top post Ironhalo - I agree with your sentiments.  I also accepted the offer made by CBA as I considered it to be reasonable, given my set of circumstances.  I had/have some reservations about the way the scheme is structured, but felt that it provided the best outcome I was likely to achieve in the short term, and emotionally I felt the need to have the whole saga resolved.  I can understand that some people feel the need to pursue other options, and one of the complications with any resolution process is that not everyone's situation is identical, however when someone emailed me the link to the petition to the Govt with a plea to add my signature I was tempted to reply that they should "get a grip".


----------



## Solly (4 June 2010)

Just some quotes from the petition at

http://www.petitiononline.com/vfahmg/petition.html




> We only wanted to provide a comfortable living for our retirement. Now, we have to exist on Centrelink Payments
> 
> What we all had in anticipation for retirement has gone, with all of us left with only debts to be paid
> 
> ...


----------



## Julia (4 June 2010)

DocK said:


> .  I had/have some reservations about the way the scheme is structured, but felt that it provided the best outcome I was likely to achieve in the short term, and emotionally I felt the need to have the whole saga resolved.



Dock, now that you've made that choice, can you say if it has allowed you to, if not 'put it behind you', start to move on?   Emotionally and psychologically it sounds so much more sensible than living with the stress of the unknown any longer than necessary.
I suppose it depends somewhat on your nature:  for me the ongoing anxiety and indecision would be worse than accepting what's possibly a lesser settlement.

Ironhalo:  great post.  Much admire your attitude and Dock's.


----------



## Anastasia (4 June 2010)

Hi Everyone,
I have been taking a back seat for the past few months.....well... letting my emotions have a holiday anyway. But I just had to join the land of the living again when I learnt today that Bank of Queensland/ CEO David Liddy/ Two Townsville branches (Kirwan and North Ward) will be taken to task over their relationship/ involvement with Storm Financial this Sunday night on *60 Minutes*. Apparently it is a very revealing, very informative piece of investigative journalism. Uhmmm....

Reckless
Reporter: Ellen Fanning
Producers: Jonathan Harley

It's amazing they got away with it for so long. Bankers bending the rules, ignoring the risks and making a motza in the process.

Here in Australia we like to think we avoided the worst of the Global Financial Crisis.

But we had our share of rogues in this country too and the misery they've inflicted on hundreds of Aussie battlers is as cruel as anything perpetrated by Wall Street.

It all started when the Bank of Queensland got into bed with a reckless outfit called Storm Financial.

It was a time of easy money, dodgy loans and monumental greed. And presiding over it all was a fast-talking CEO who won't admit his bank was wrong.​


----------



## Solly (5 June 2010)

Anastasia said:


> Hi Everyone,
> I have been taking a back seat for the past few months.....well... letting my emotions have a holiday anyway. But I just had to join the land of the living again when I learnt today that Bank of Queensland/ CEO David Liddy/ Two Townsville branches (Kirwan and North Ward) will be taken to task over their relationship/ involvement with Storm Financial this Sunday night on *60 Minutes*. Apparently it is a very revealing, very informative piece of investigative journalism. Uhmmm....
> 
> Reckless
> ...




Anastasia,
It indeed will be interesting to so see this report. I wonder if there will be an appearance by Matthew Buchanan, he did give some quite interesting responses to questions at the Inquiry at Harry's.

Mr Liddy has previously given positive accolades to the North Ward branch.

“North Ward’s two Owner-Managers, Declan Carnes and Matthew Buchanan, represent the Bank’s five core values – passion, achievement, courage, integrity and team work – and this is reflected both in their growing customer base and their branch’s amazing financial performance,” Mr Liddy said.

The above quote is from,
http://www.boq.com.au/aboutus_media_20061027.

I believe Ellen's report will be very informative.


----------



## Garpal Gumnut (5 June 2010)

Garpal Gumnut said:


> Specialed mate this has all been gone over before but for you and you alone, let us step into the cone of silence, just you and me . Now please listen.
> 
> The sicag webpage prominently states that it is not associated with the Cassimatis but in the lower left hand corner prominently lauds the fee model of theirs, as compared to present best practice fee charging by Financial Planners. Btw, I think all FP’s are muppets, but you guys don’t , so I guess that is my first piece of evidence.
> 
> ...






specialed said:


> This rambling offers evidence (or sorts) that SICAG is yet to critisise Storm financial via their website. It does not however answer my two questions. AGAIN, can you please offer the evidence you possess as to why SICAG or anyone would want to resurrect STORM, and how this would be acheived. While your at it you can explain how ASIC, FPA, etc etc would enable this to happen, what this would acheive. I actually agree with your opinion of FP's however with regard to the rest, there is very little that is rational about it.....






specialed said:


> Garpal,
> 
> I'm sure I have asked this before but don’t recall getting an answer.
> 
> ...




specialed, we seem to be two persons on either side of a boat shouting out in to the wind and not hearing each other, let alone listening. On reflection I am as guilty as you.

You feel I am not answering your questions, and I likewise about you.

I am glad you were not stung my Manny and that you see the Storm model for what it was.

Likewise I can assure you that apart from attempting to buy banks when the price is low, and selling when high or taken over, that is my only relation with them. 

I did, many years ago, lose a (then) significant amount of money in a scam and an amateurish mob got up like sicag and generally stuffed about and the head crook did a few months in gaol and to my knowledge lived in luxury thereafter. His family continued to sell other dubious products, thus continuing his lifework. A pittance was returned to investors.

The only other point I would make is that S and G now feel some in sicag are too close to Manny, as I have all along, and I and they feel this is wrong.

http://www.investordaily.com.au/archive/9260.xml


On a lighter note I have had communication from Solly that he was enlightened by my reference to the sexual proclivities of the young ladies of Stockholm, so if you haven't been rooted by Storm, it may be a an idea to visit there anyway.

So I will call a halt to this dialogue of the deaf. Solly is forced to go deaf when away from his Lady Pen, so you may see him trying to cure his problem in Stockholm as well.

gg


----------



## Solly (6 June 2010)

Garpal Gumnut said:


> specialed, we seem to be two persons on either side of a boat shouting out in to the wind and not hearing each other, let alone listening. On reflection I am as guilty as you.
> 
> You feel I am not answering your questions, and I likewise about you.
> 
> ...




gg, I thought those pics of my evening at the Pelikan Beer Hall in SÃ¶dermalm had all been deleted from Facebook, I'll have to poke Zuckerberg again. But an evening of husmanskost and schnapps can sometimes tend to blur one's judgement.


----------



## Solly (6 June 2010)

Anastasia said:


> Hi Everyone,
> I have been taking a back seat for the past few months.....well... letting my emotions have a holiday anyway. But I just had to join the land of the living again when I learnt today that Bank of Queensland/ CEO David Liddy/ Two Townsville branches (Kirwan and North Ward) will be taken to task over their relationship/ involvement with Storm Financial this Sunday night on *60 Minutes*. Apparently it is a very revealing, very informative piece of investigative journalism. Uhmmm....
> 
> Reckless
> ...





*Read the transcript here;
"BOQ docs show problems with Storm loans"*

http://sixtyminutes.ninemsn.com.au/stories/1064746/boq-docs-show-problems-with-storm-loans


----------



## Julia (6 June 2010)

Any comments about the "60 Minutes" programme?


----------



## shibby (7 June 2010)

Julia said:


> Any comments about the "60 Minutes" programme?




What are your comments Julia?


----------



## Smiley (7 June 2010)

I have seen numerous BoQ loan docs re storm and most clients shocked at data included - inaccuracy of it that is and not what they had told storm or BQ - some met with managers - so very suspect tht they did not record what they were told by clients as to income, debts, etc.


----------



## DocK (7 June 2010)

I noticed that Liddy stated that borrowers were being dealt with on an individual basis, and not as a group - can anyone confirm whether any BOQ borrowers have received any offer of compensation?

I do hope that last night's programme adds to the pressure to compensate anyone who has been unfairly dealt with by BOQ.


----------



## bunyip (7 June 2010)

DocK said:


> I noticed that Liddy stated that borrowers were being dealt with on an individual basis, and not as a group - can anyone confirm whether any BOQ borrowers have received any offer of compensation?
> 
> _*I do hope that last night's programme adds to the pressure to compensate anyone who has been unfairly dealt with by BOQ.*_





Me too, but *only* if the compensation is paid by the bank, not by the Australian taxpayers. And only if the people being compensated have enough integrity and reality about them to realise and admit that since they themselves, not just the banks, bear some responsibility for their situation, the compensation cannot and should not be 100% of what they lost.


----------



## zzz (7 June 2010)

Re: BOQ.....Where fraudulent activity is proven and it will be, with physical evidence, loans should be rendered null and void.  The offending bank staff should be removed/ and or prosecuted and David Liddy should be forced to step aside.  It may be deemed to be the customers responsibility, however, when an employee joins the bank in a lending capacity, they are trained to process material within the parameters of the Trade Practices Act, the Banking Code of Practice and the Bank's individual policy and procedure.  They will have been taught the correct and honest way, when to approve and when to reject certain loans based on information provided and are made aware of the penalties in approving incorrect material. Thus, at the end of the day the originator of the contract (being the bank) must take responsibility for rectifying fraudulent loans in order to salvage any scrap of professionalism remaining.


----------



## Smiley (7 June 2010)

BoQ is offering to freeze repayment on loans but interest is still accruing - so after 2 years there will be even a bigger amount to repay.  
In the audit mentioned on TV, 60% of the loans were described as "should not have been granted". 
They have revealed only the tip of the iceberg in regards to this branch and its managers practices - let's just say creative loan applications submitted to central office and not with data clients signed off on - yes changed by managers and not even by storm in some cases. 
Quite a few of the stormified - like the people mentioned on the program, have sold their homes or refinanced.  
The local BQ manager told someone in my family - in Dec 2008 - you will have to pay out that loan immediately if you were with storm.  Very short on compassion that statement and all we have heard from BoQ. . . . 
They were indeed in bed with storm and should be held to account - a
My post is an explanation and a long way of saying - they are not offering compensation at all or to cancel loans . . . 
banghead:


----------



## shibby (7 June 2010)

zzz said:


> Re: BOQ.....Where fraudulent activity is proven and it will be, with physical evidence, loans should be rendered null and void.  The offending bank staff should be removed/ and or prosecuted and David Liddy should be forced to step aside.  It may be deemed to be the customers responsibility, however, when an employee joins the bank in a lending capacity, they are trained to process material within the parameters of the Trade Practices Act, the Banking Code of Practice and the Bank's individual policy and procedure.  They will have been taught the correct and honest way, when to approve and when to reject certain loans based on information provided and are made aware of the penalties in approving incorrect material. Thus, at the end of the day the originator of the contract (being the bank) must take responsibility for rectifying fraudulent loans in order to salvage any scrap of professionalism remaining.




I would like to remind people that there other banks as well not just CBA and BofQ. This is not my terminology but I have been told by two sources that there was a cell operating in the ANZ Bank Nambour who were churning out inappropriate bank loans.


----------



## Julia (7 June 2010)

shibby said:


> What are your comments Julia?



To be honest, I didn't really feel much enlightened by the program which was typical "60 Minutes" stuff, including Ms Fanning chasing Mr Liddy into lifts, around car parks etc in real tabloid journalism style.

Unless I'm being obtuse, there was an implication, rather than proof, that it was BOQ who had misrepresented figures on the loan applications, not Storm.
Maybe it was definitely BOQ, but I was disappointed at how absolutely Cassimatis was left out when it came to doling out responsibility for the clients' failed positions.
Also, there was not a mention of any responsibility to be attributed to the clients in borrowing amounts they could not hope to service.  Imo both these factors make the program unbalanced.

Does the fact that BOQ branches are individually owned make any difference in the Head Office's reluctance to take responsibility for at least some of what went wrong?  What has happened to the Branch Managers concerned?
Are they still in their jobs?  If so, then that's clearly poor judgement on the part of BOQ management.

What would be interesting (but will never happen) would be a panel discussion, chaired by e.g. Kerry O'Brien with Manny and the variously implicated bank personnel.

The lady featured in the program was a great choice - hard working typical Australian who didn't question the financial 'advice' given by Manny.


----------



## zzz (7 June 2010)

Julia said:


> To be honest, I didn't really feel much enlightened by the program which was typical "60 Minutes" stuff, including Ms Fanning chasing Mr Liddy into lifts, around car parks etc in real tabloid journalism style.
> 
> Unless I'm being obtuse, there was an implication, rather than proof, that it was BOQ who had misrepresented figures on the loan applications, not Storm.
> Maybe it was definitely BOQ, but I was disappointed at how absolutely Cassimatis was left out when it came to doling out responsibility for the clients' failed positions.
> ...



The absolute proof is in the Audit Report that the BOQ does not want to reveal and furthermore there is substantiated proof on each individual application form.  I too am disappointed that Ms Fanning did not show to the camera the copy of email from the Head of Group Risk or some other leaked emails.  I have heard Mr Auty is no longer with the bank (wonder why???)  Storm were dodgy, however, a prudent banker had the right the reject the loan application rather than breach the Trade Practices Act.


----------



## specialed (7 June 2010)

I'm pretty sure the footage of the large group on the back veranda was used in the last 60 minutes expose on Storm / CBA which was done some 12 plus months ago. This was typically 60 minutes rubbish...Big statements, fuzzy animations of lines of text but no real substance. Even the slightest amount of investigative journalism could have provided some interesting information and insight into what had happened. I suspect most would not be interested in talking untill after any chance of a settlement had been finalised. Instead we saw Liddy being chased around a carpark and in a coffee shop. 15 minutes of my life I will never get back.........


----------



## Solly (7 June 2010)

*"Bank of Qld hits back at reports"*

"The Bank of Queensland has hit back at a media report questioning its relationship with collapsed financial advice company, Storm Financial."

More from Big Pond News here;

http://bigpondnews.com/articles/Business/2010/06/07/Bank_of_Qld_hits_back_at_reports_470961.html


----------



## Julia (7 June 2010)

specialed said:


> I'm pretty sure the footage of the large group on the back veranda was used in the last 60 minutes expose on Storm / CBA which was done some 12 plus months ago.



Thought maybe I was having a deja vu experience because I was also sure I'd seen that before.


> This was typically 60 minutes rubbish...Big statements, fuzzy animations of lines of text but no real substance.



So essentially what you'd expect from Channel 9 and this particular program.


----------



## Solly (8 June 2010)

For those interested here is the 60 Minutes report by Ellen Fanning.

*"Reckless"*
Ellen Fanning Investigates who was responsible for the millions lost in the Storm Financial collapse.

http://video.au.msn.com/watch/video/reckless/xulejt9


----------



## Solly (8 June 2010)

*"Bank bosses suspected rogue branch"*

"CHANNEL 9 current affairs program 60 Minutes says it uncovered a paper trail inside Bank of Queensland that suggests the bank suspected 18 months ago that it had a rogue branch in its network, writing dodgy loans to clients of Storm Financial."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/06/07/144355_news.html


----------



## Solly (8 June 2010)

*"BoQ hits back at 'untrue' claims in 60 Minutes report"*

"THE Bank of Queensland has hit back at a 60 Minutes report which cited leaked internal documents showing the bank knew one of its Townsville branches had made problematic loans to clients of now-defunct Storm Financial."

More by Anthony Marx in The Courier Mail here;

http://www.couriermail.com.au/business/boq-hits-back-at-untrue-claims-in-60-minutes-report/story-e6freqmx-1225876684875


----------



## Solly (8 June 2010)

Garpal Gumnut said:


> ......My contacts at the Ross Island Hotel, recently out of the "Creek", tell me that accommodation is at a premium, and it is often first in least dressed. Some doubling up occurs and there has been of late an unfortunate mixing of white collar criminals with the dangerous. The latter's complaints about this have fallen on deaf ears and they often have to, in their frustration, resort to their habitual forms of response.
> 
> gg





gg, in the 60 Minutes story looks like Aussie John is of the opinion that if fraud is proven, then incarceration is a possible outcome.

Any single sitters available yet? Or is it still head to tail?


----------



## Solly (8 June 2010)

BOQ's response to the 60 Minutes Report.

A statement from BOQ Chairman, Neil Summerson is here;

http://www.boq.com.au/aboutus_media_20100606.htm


----------



## jez47 (8 June 2010)

Thought this might interest some folks re compensation:
While Rares J. did find that Mr Goodridge had access to borrowings of $400,000.00 from a friend and that the friend was likely to honour a commitment to lend him $400,000.00, His Honour nevertheless ruled that:

“Any damage which results from a breach of contract and was reasonably in the contemplation of the parties when the contract was made, is recoverable, even thought he claimant’s impecuniosity contributed to it:  Burns v MAN Automotive (Aust) Pty Limited (1986) 161 CLR 653 at 658 to 659 per Gibbs, CJ.  The Chief Justice held that a wrongdoer is liable for the consequences flowing from his wrongful act, notwithstanding that the victim was unable, because of lack of funds, to take the steps to mitigate his loss:  Burns 161 CLR at 659, see too at 674 to 675 per:  Brennan J. (para. 228 at page 73 in Goodridge’s case).”


----------



## MrEuro (8 June 2010)

pegasus said:


> The answer is both have left - not by their own volution.  What happened was very interesting...When they had to testify at the public hearing they were both on 'leave'.  So when asked where they worked they could honestly say CGI/CBA.  Everything looked above board and The Bank was standing by their employees.  Clothier and Kamal were visibly agitated.  The CBA Barristers were sitting at the benches like Vultures watching and listening to every word.  Of course if Clothier or Kamal said anything agianst the Bank their entitlements would be at risk - so they toed the corporate line.  Once the examination was over Clothier and Kamal left their employment quietly and the Bank slipped away like the serpents they are.




Why would you want to contact them anyway?


----------



## Julia (8 June 2010)

Solly said:


> BOQ's response to the 60 Minutes Report.
> 
> A statement from BOQ Chairman, Neil Summerson is here;



Extract from the above:


> In fact, BOQ did provide as much information to 60 Minutes as we were able, given the constraints outlined above but they chose not to provide both sides of this story.
> 
> 
> 
> ...




Of course it's not good business sense.

Any further comment from BOQ Storm clients?


----------



## Jifromoz (8 June 2010)

Julia said:


> Extract from the above:
> 
> 
> Of course it's not good business sense.
> ...




Hi Julia,
My in-laws received their loan from BOQ in North Ward. They live '000's of K's from Townsville. Never had contact from that BOQ branch. I have seen their application. Not in their handwriting, riddled with errors. It may take a bit of time but in the end the truth will come out.


----------



## Julia (8 June 2010)

Jifromoz said:


> Hi Julia,
> My in-laws received their loan from BOQ in North Ward. They live '000's of K's from Townsville. Never had contact from that BOQ branch. I have seen their application. Not in their handwriting, riddled with errors. It may take a bit of time but in the end the truth will come out.



Hi Jifromoz, Who do they believe made the errors?  The BOQ or Storm?
When they received the copy of the application and found it to be incorrect, what did they do then?


----------



## Jifromoz (8 June 2010)

Julia said:


> Hi Jifromoz, Who do they believe made the errors?  The BOQ or Storm?
> When they received the copy of the application and found it to be incorrect, what did they do then?




I don't know who filled it out. It is in the hands of their solicitor & ASIC. In my opinion, giving pensioners a large loan with no regular income should have rung some alarm bells with someone in the bank............. but it didn't.

As I said, the truth will come out in the end and those that have done wrong will feel the full weight of the law.


----------



## bunyip (9 June 2010)

Jifromoz said:


> I don't know who filled it out. It is in the hands of their solicitor & ASIC. In my opinion, giving pensioners a large loan with no regular income should have rung some alarm bells with someone in the bank............. but it didn't.
> 
> As I said, the truth will come out in the end and those that have done wrong will feel the full weight of the law.




Fair comment. But shouldn't the alarm bells have also rung for the pensioners concerned?
They must have signed the loan application documents. 
They must have known the loan amount they were applying for. 
They surely would have done some simple calculations to know if they could afford to service the loan.
Once the loan was approved, they would have received further documentation outlining the terms and conditions of the loan.
And before the loan was actually granted and made available to them, they would have signed a document stating that they'd read, understood, and accepted the terms and conditions of the loan. 
The amount of the loan would have been clearly stated in the documents they received before they finally signed off to put the loan in motion.
At least, that's how it's been done whenever I've taken out a loan.

If someone had doctored the figures and inflated the loan amount that they applied for, surely the loan applicants had ample opportunity to discover this before they accepted the loan.
The loan acceptance form would have been signed in duplicate, with the client keeping a copy for their records.

I just don't see how anyone could get away with doctoring the figures without it being picked up by the loan applicants, IF they properly scrutinised the loan documents.

If they failed to scrutinise the loan documents before singing them, then they themselves, not just the bank, were negligent in their responsibilities, and therefore are partly responsible for what happened.
That doesn't excuse any unscrupulous or illegal conduct by the bank. But it does illustrate that everyone involved in a loan transaction has responsibilities, and if any of them neglect those responsibilities, then they must bear part of the blame if things go wrong.


----------



## zzz (9 June 2010)

bunyip said:


> Fair comment. But shouldn't the alarm bells have also rung for the pensioners concerned?
> They must have signed the loan application documents.
> They must have known the loan amount they were applying for.
> They surely would have done some simple calculations to know if they could afford to service the loan.
> ...



Re: BOQ
What if the loan was altered even after being scrutinised, no original signed copy is in the loan file, no terms and conditions were given, no borrowers copy was given and the type of loan was changed after the fact.
What we need to ask is was every page of the loan application initialled?
Was the borrower contacted to verify their information?
Does the bank just have a bunch of photocopies faxed by Storm?
Was the borrower given a terms and conditions, copy of the interest rates, borrowers copy, and or any other documentation relating to the type of account that was opened on their behalf.
When a person gets a job in a bank they are taught that the customer is always correct.  They are also taught to verify all information with the customer directly prior to opening an account, they are also obliged to to provide necessary documentation when opening the account.  They are taught compliance and the penalties for breaching the TPA.  Obviously the risk and commission was worth it for the North Ward branch!

If the bank were to deduct the fraudulent dollar values listed on peoples assets and credit it against the loan there would be no Storm loans left!

Remember the old saying if you can't get a loan in any other bank go to the BOQ (North Ward) and you can have it by the afternoon!


----------



## Julia (9 June 2010)

zzz, if the client was not assured of all the points you raise above, then surely they would have followed it up?
If they didn't ensure they had complete copy of all documentation, which they had read, checked and understood, then - as Bunyip points out - they are at best being careless.

However, perhaps you are suggesting all the clients signed off on correctly prepared documentation, ensured they had a copy, then subsequently either BOQ or Storm completely altered the content of the contract?

Presumably that would bring criminal charges if proved.

But even if that happened, wouldn't the client question the value of shares they had been able to buy, i.e. the value of the loan clearly being greater than they had signed off on?


----------



## bunyip (9 June 2010)

zzz said:


> Re: BOQ
> What if the loan was altered even after being scrutinised, no original signed copy is in the loan file, no terms and conditions were given, no borrowers copy was given and the type of loan was changed after the fact.
> What we need to ask is was every page of the loan application initialled?
> Was the borrower contacted to verify their information?
> ...




The bank should have made the appropriate documentation available. And before going ahead with the loan, the client should have ensured that they had the necessary documentation to rule out fraudulent play. Obviously, this should have included a copy of the documents they signed. 
And before anyone says _"But these were unsophisticated investors - how were they supposed to know all this"?_......In any business dealing, the onus is on you, the person involved in the deal, to have sufficient knowledge to conduct the deal properly and safely. Ignorance is no excuse for making wrong decisions in business or business borrowings. The immutable rule of business and investment is that you should know what you're doing, or get burnt.

Go after the banks and Storm Financial is you believe they've been negligent or have done anything illegal. But don't forget that borrowers have certain responsibilities too.


----------



## specialed (9 June 2010)

bunyip said:


> The bank should have made the appropriate documentation available. And before going ahead with the loan, the client should have ensured that they had the necessary documentation to rule out fraudulent play. Obviously, this should have included a copy of the documents they signed.
> And before anyone says _"But these were unsophisticated investors - how were they supposed to know all this"?_......In any business dealing, the onus is on you, the person involved in the deal, to have sufficient knowledge to conduct the deal properly and safely. Ignorance is no excuse for making wrong decisions in business or business borrowings. The immutable rule of business and investment is that you should know what you're doing, or get burnt.
> 
> Go after the banks and Storm Financial is you believe they've been negligent or have done anything illegal. But don't forget that borrowers have certain responsibilities too.




Bunyip, 

Not withstanding the fact that yes the borrower may need to take some responsibility. Some of these borrowers were not just retired but quite elderly. Had little or no financial knowledge hence seeing the advisor and may not have had any understanding of what to do with the documents, even if they were given to them, and they could understand them. If the lawyers and asic are now having trouble determining responsibility from these same documents what chance did many of those who received them. Particularly if they were then completed by someone else. Laws, codes of conducts, regulations etc are put in place in many enviroments, business and otherwise to protect the vunerable from exactly this type of behaviour. They are also put in place to protect people from themselves. Assuming you have or know someone who is close that is elderly, I would like you to think about at what age they may not be able to understand something they are doing, yet maybe pride will prevent them from seeking assistance. The driving licence age comes to my mind. Laws had to be put in place to protect people from themselves.....and to protect others....


----------



## zzz (9 June 2010)

bunyip said:


> The bank should have made the appropriate documentation available. And before going ahead with the loan, the client should have ensured that they had the necessary documentation to rule out fraudulent play. Obviously, this should have included a copy of the documents they signed.
> And before anyone says _"But these were unsophisticated investors - how were they supposed to know all this"?_......In any business dealing, the onus is on you, the person involved in the deal, to have sufficient knowledge to conduct the deal properly and safely. Ignorance is no excuse for making wrong decisions in business or business borrowings. The immutable rule of business and investment is that you should know what you're doing, or get burnt.
> 
> Go after the banks and Storm Financial is you believe they've been negligent or have done anything illegal. But don't forget that borrowers have certain responsibilities too.



For the record 
I personally have no loans in any capacity, however, I do understand the Financial Services Industry.


----------



## bunyip (9 June 2010)

specialed said:


> Bunyip,
> 
> Not withstanding the fact that yes the borrower may need to take some responsibility. Some of these borrowers were not just retired but quite elderly. Had little or no financial knowledge hence seeing the advisor and may not have had any understanding of what to do with the documents, even if they were given to them, and they could understand them. If the lawyers and asic are now having trouble determining responsibility from these same documents what chance did many of those who received them. Particularly if they were then completed by someone else. Laws, codes of conducts, regulations etc are put in place in many enviroments, business and otherwise to protect the vunerable from exactly this type of behaviour. They are also put in place to protect people from themselves. Assuming you have or know someone who is close that is elderly, I would like you to think about at what age they may not be able to understand something they are doing, yet maybe pride will prevent them from seeking assistance. The driving licence age comes to my mind. Laws had to be put in place to protect people from themselves.....and to protect others....




Specialed - I fly out of Brisbane at 6am tomorrow, headed for Alice Springs. That means getting up at 1.30am to be at the airport by 5am. So rather than answer you tonight, I'm off to bed for some sleep. 
When I return home in a week or so, I'll re-read your post and see if I wish to comment.

While I've expressed forthright views about Stormers and their situation, I feel genuinely sorry for them. Many of them are in their situation simply because they lacked the knowledge to avoid the pitfalls.


----------



## Solly (9 June 2010)

*"Franchisees add to BOQ’s woes"*

"The number of disgruntled Bank of Queensland current and former owner-managers expected to join a legal action for compensation because of alleged misrepresentations made about branch profitability is expected to double."

Read more by Duncan Hughes in The Australian Financial Review, June 9, 2010.


Also From Trading Markets;
http://www.tradingmarkets.com/news/stock-alert/bkqnf_franchisees-add-to-boq-s-woes-972610.html

"Bank of Queensland (BOQ) is likely to face an increasing number of legal cases concerning its operations. Many of the actions will stem from the lending policies".....

"BOQ is also dealing with a January 2009 risk report that specifically warned about Storm Financial's practices. Franchisees in its owner-manager branches model are unhappy as well."


----------



## Julia (9 June 2010)

Solly said:


> *
> Also From Trading Markets;
> http://www.tradingmarkets.com/news/stock-alert/bkqnf_franchisees-add-to-boq-s-woes-972610.html
> *



*
The following is from the above link:



			Franchisees add to BOQ's woes
Jun 08, 2010 (The Australian Financial Review - ABIX via COMTEX) --

Bank
of Queensland (BOQ) is likely to face an increasing number of legal cases concerning its operations. Many of the actions will stem from the lending policies of its subsidiary, Storm Financial. BOQ is also dealing with a January 2009 risk report that specifically warned about Storm Financial's practices.
		
Click to expand...



Storm Financial - BOQ Subsidiary??????   Since when?
What sort of shoddy reporting is this!*


----------



## Garpal Gumnut (10 June 2010)

specialed said:


> Bunyip,
> 
> Not withstanding the fact that yes the borrower may need to take some responsibility. Some of these borrowers were not just retired but quite elderly. Had little or no financial knowledge hence seeing the advisor and may not have had any understanding of what to do with the documents, even if they were given to them, and they could understand them. If the lawyers and asic are now having trouble determining responsibility from these same documents what chance did many of those who received them. Particularly if they were then completed by someone else. Laws, codes of conducts, regulations etc are put in place in many enviroments, business and otherwise to protect the vunerable from exactly this type of behaviour. They are also put in place to protect people from themselves. Assuming you have or know someone who is close that is elderly, I would like you to think about at what age they may not be able to understand something they are doing, yet maybe pride will prevent them from seeking assistance. The driving licence age comes to my mind. Laws had to be put in place to protect people from themselves.....and to protect others....




That is a very fair comment specialed.

As I have said before, Storm, the Cassimatis, their employees, the Banks and their employees should all be ashamed of themselves and brought to account for taking advantage of these investors. Now it seems the poor people are getting contrary advice from their legal advisers and suffering more angst. Again , unfortunately as I predicted. 

The Regulators really need to step in now to protect these very vulnerable people.

gg


----------



## zzz (10 June 2010)

Job for anyone interested!
Head of Audit BOQ
jobs.efinancialcareers.com.au/job-4000000000637191.htm


----------



## Solly (10 June 2010)

*60 Minutes' Response to Statement from BOQ Chairman, Neil Summerson.*


"Firstly we are disappointed that Mr Summerson made no reference to our substantial allegation that a senior executive at the Bank received a draft report in late January 2009, which concluded that the $110 million in Storm related lending might have to be "set aside." "

More by Ellen Fanning here;

http://sixtyminutes.ninemsn.com.au/stories/1067124/response-to-statement-from-boq-chairman-neil-summerson


----------



## Solly (11 June 2010)

*"CBA holds firm to Storm framework"*

"Commomwealth Bank of Australia has taken the unusual step of writing to dozens of law firms advising them that it will not be negotiating any  "variation to the framework" of the resolution scheme..."

Read more by Duncan Hughes in AFR of Friday,  June 11 2010.


----------



## Smiley (11 June 2010)

A friend of mine went to the Levitt (lawyer) meeting in Townsville and was stunned with what occurred and that people would buy into what was 'on offer' (read his notes):

 - Levitt was introduced by former storm adviser jelich
 - "storm was not such a bad model - you just drank too much of it" - Levitt
 - he wants people to pay $5,000-$25,000 up front for a class action against various banks ("It won't be free but it won't be expensive"; pretty vague calculation in that he said, "people who lost least will pay $5,000 and those who lost most will pay $25,000")
 - he has less than 2 dozen lawyers to handle the hoped for 100s of ex-storm clients
 - also, claimed he will get 3X to 5X more than resolution scheme for people in 6-12 months

Friend said he waffled a lot and was had to follow except for the part of $ for his law firm 

Those who still believe in Manny and his model will possibly be sold another fiction by this new saviour


----------



## DocK (11 June 2010)

Smiley said:


> A friend of mine went to the Levitt (lawyer) meeting in Townsville and was stunned with what occurred and that people would buy into what was 'on offer' (read his notes):
> 
> - Levitt was introduced by former storm adviser jelich
> - "storm was not such a bad model - you just drank too much of it" - Levitt
> ...




I can't shake the feeling that Manny & Julie are once again "using" their remaining loyal customer base for their own purposes.  They obviously cannot be part of the Slater & Gordon resolution scheme, and their best chance of any compensation lies with a privately funded class action.  The more people they can get to join in with them - the lower the cost to them personally along with a better chance for a favourable outcome for them, more publicity etc, etc.  Of course, they would trumpet that they're working tirelessly for the good of their clients and their lawyers represent the best chance for decent compensation - but I'm not buying it.   The bitter, twisted and cynical side of me thinks the poor deluded fools who still think Manny & Julie give a toss about anyone but themselves are going to get shafted, again.  I hope I'm wrong - but I'd hate to see the elderly and vulnerable ex-clients turn their back on a resolution scheme that may be flawed, but in place and likely to provide at least some relief, in order to throw more money away chasing a Cassimatis-inspired miracle.   I guess time will tell, and I'll be happy to have egg on my face if Levitt proves to be the saviour he purports to be, but I think his law firm may benefit more than those who dance to M & J's tune once more.


----------



## Solly (11 June 2010)

*"Rival firm prepares Storm class action"*

"VICTIMS of the Storm Financial crisis were likened to bunnies with myxomatosis last night by a Sydney solicitor preparing to act against the Commonwealth Bank on their behalf.

About 100 people affected by the failed investment company's collapse attended a meeting, which was held with solicitor Stewart Levitt from Levitt Robinson."

More by Rachel Toune in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/06/11/145545_news.html


----------



## Solly (12 June 2010)

*"Castle quit ASIC's Storm investigation over lack of resources"*

"THE former head of the Australian Securities & Investments Commission's 18-month investigation into the $3 billion collapse of Storm Financial resigned after complaining that he was given insufficient resources to pursue action through the courts.

ASIC insiders say that the investigation has been racked by indecision and has collected very little evidence that could be used in court. It is understood that Mr Castle wanted to pursue litigation whereas Mr D'Aloisio favoured a negotiated settlement."

More by Paul Cleary in The Australian here;

http://www.theaustralian.com.au/business/castle-quit-asics-storm-investigation-over-lack-of-resources/story-e6frg8zx-1225878642411


----------



## Solly (15 June 2010)

Where are they now? 

Look who still rates a mention in Part III, in Business Day.

http://www.smh.com.au/business/where-are-they-now-part-iii-20100614-yabk.html


----------



## Solly (15 June 2010)

*"Parliament to examine BOQ testimony on Storm Financial"*

"THE Bank of Queensland's testimony into collapsed advisory group Storm Financial is under scrutiny at a parliamentary level.

A parliamentary committee, which last year examined the events surrounding Storm's demise, is examining information about a draft investigation by BoQ that hit headlines last week."

More by Liam Walsh in the The Courier-Mail here;

http://www.couriermail.com.au/business/parliament-to-examine-boq-testimony-on-storm-financial/story-e6freqmx-1225879656311


----------



## Solly (16 June 2010)

*ASIC's response to the report in the Weekend Australian on 12 June 2010.*


"ASIC's investigation into the affairs of Storm has at all times been allocated the resources needed to pursue all appropriate inquiries in a timely and thorough manner and to make any necessary preparation for litigation and enforcement measures.

The change in leadership of the investigation team in March has not affected the progress of ASIC's investigation. The composition of the team working on the investigation is largely unchanged. The investigation team continues to be subject to the direction and oversight of the Commission."

The complete response is on the ASIC website here;

https://storm.asic.gov.au/storm/storm.nsf/byheadline/Report%20in%20Weekend%20Australian%20on%2012%20June%202010?opendocument


----------



## Solly (17 June 2010)

*"ASIC hits back over Storm claims
Regulator forced to explain"*

ASIC has been forced to explain claims relating to its investigations into Storm Financial.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9445.htm


----------



## A Hidden Agenda (17 June 2010)

I note with interest that Andrew O'Brien (former Storm adviser and son of SICAG co-chairman and Cassimatis supporter Noel O'Brien) has had his Authorised Representative status removed by Infocus.

Infocus is of course the mob who took on several ex-Storm advisers after it all fell into a heap. I wonder if they are disclosing to new clients their participation in the whole debacle?

Anyway, I understand Ron Jelich is actively sounding out local advisory businesses in attempt to find young O'Brien a new job, an interesting referee to be sure.


----------



## Solly (19 June 2010)

*"BoQ claim inflammatory comments 'just to get attention of bosses' "*

"BANK of Queensland argues its own senior risk manager wrote "inflammatory" comments alleging widespread disregard for bank policy to gain the attention of top executives.

The manager typed the comments in a draft risk review conducted early in 2009 as BoQ investigated loans to people devastated in the Storm Financial investment calamity."


More by Liam Walsh in The Courier Mail here;

http://www.couriermail.com.au/business/boq-claim-inflammatory-comments-just-to-get-attention-of-bosses/story-e6freqmx-1225881056921


----------



## Solly (21 June 2010)

*"Risk manager warned BoQ chiefs"*

"LENDING tied to collapsed advisory group Storm Financial went under the radar at Bank of Queensland to the extent that a senior risk manager recommended beefing up systems to recognise loan sources."

More by Liam Walsh in The Courier Mail here;

http://www.couriermail.com.au/business/risk-manager-warned-boq-chiefs/story-e6freqmx-1225882009046


----------



## Solly (21 June 2010)

*"Cloud over BOQ evidence in Storm inquiry"*

"THE Bank of Queensland is being called on to explain discrepancies in its evidence to a parliamentary inquiry which investigated failed wealth adviser Storm Financial and information contained in one of its own internal credit reviews."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/06/19/147815_news.html


----------



## Solly (22 June 2010)

*"BoQ risk report on Storm Financial under scrutiny"*

"Bank of Queensland’s involvement with Storm Financial could tomorrow come under renewed scrutiny when the federal parliamentary committee that investigated the advice group’s collapse meets ASIC officials."

More by Duncan Hughes in the Australian Financial Review of June 22, 2010.


----------



## Jifromoz (23 June 2010)

Sonray Capital, collapsed at 11pm yesterday, freezing 3000 client accounts.

Full story is here http://www.businessday.com.au/business/broker-collapse-hits-3000-clients-20100623-yxd3.html 

I hear some ex Storm Planners joined this mob. Birds of a feather???


----------



## Solly (24 June 2010)

"Lawsuit still facing Storm Financial"

"THE Australian Securities and Investments Commission says legal action is still an option over the $3 billion collapse of Storm Financial even as it negotiates compensation for 3000 investors."

More by Ari Sharp in the SMH here;

http://www.smh.com.au/business/lawsuit-still-facing-storm-financial-20100623-yz6g.htmlA


----------



## Solly (24 June 2010)

Jifromoz said:


> Sonray Capital, collapsed at 11pm yesterday, freezing 3000 client accounts.
> 
> Full story is here http://www.businessday.com.au/business/broker-collapse-hits-3000-clients-20100623-yxd3.html
> 
> I hear some ex Storm Planners joined this mob. Birds of a feather???




Jifromoz, here's a quote from the article in the SMH about Sonray's sudden collapse.

"Some of Sonray's staff include former advisers of Storm Financial. Indeed, one of Sonray's products Back to Basics, has a lot of similarities to the Storm Financial model, in terms of high leverage."

http://www.smh.com.au/business/from-buyout-to-busted-in-a-week-20100623-yz6o.html


----------



## Solly (24 June 2010)

*"Rumbles over Storm probe"*

"A federal parliamentary committee has warned ASIC it is losing patience with the 19-month investigation into the collapse of financial adviser Storm Financial."

More by Duncan Hughes in the AFR June 23, 2010.


----------



## Solly (24 June 2010)

*"Parliamentary committee orders ASIC to give details on BoQ"*

"ASIC has been ordered to provide details about the Bank of Queensland's involvement in the collapse of Storm Financial.

The Parliamentary Joint Committee on Corporations and Financial Services last night asked Australian Securities & Investments Commission chairman Tony D'Aloisio to update it on the regulator's investigation into BoQ within the next fortnight."


More by Sara Rich in The Australian here;

http://www.theaustralian.com.au/business/parliamentary-committee-orders-asic-to-give-details-on-boq/story-e6frg8zx-1225883408149


----------



## Solly (24 June 2010)

*"Truth will come out, says Cassimatis"*

"Mr Cassimatis maintained the actions of the Commonwealth Bank were to blame for his company's demise.

"But eventually the truth will come out and I think soon," he said."

More in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/06/23/148551_news.html


----------



## bunyip (26 June 2010)

Solly said:


> *"Truth will come out, says Cassimatis"*
> 
> "Mr Cassimatis maintained the actions of the Commonwealth Bank were to blame for his company's demise.
> 
> ...




Typical Cassamatis - never missing a chance to blame someone else while accepting no blame himself.
I'm disgusted to hear this weak person continually bleating and whimpering about how it's the banks fault that he and his clients were wiped out.

Before he locked on to the idea of diverting attention away from himself by blaming the banks, he ranted about the 'black swan event' and the 'unprecedented market crash' and global financial meltdown, and claimed that nobody saw them coming. 
He conveniently forgot to mention that, far from being unprecedented, the 2008 crash had various precedents in the form of major market crashes in 1929, 1987, and many others.
Likewise, he conveniently forgot to mention that hundreds of media outlets around the world had been warning virtually every day for months that economic indicators were showing ominous clouds building up on the financial horizon.

Many confronting questions were asked of him on the website that he set up after the Storm collapse. For the most part, he either ignored the questions entirely or he gave evasive answers.
Some of the questions that I personally asked him, and got no reply to, were.....

*You claim that this market crash was unprecedented - how about 1929 and 1987?
*Why did you charge clients the astronomical up front fee of 7%?
*Why did you advise them to gear so heavily into the stockmarket, irrespective of their age and personal circumstances?
*Why did you sit on your hands and do nothing for a full 12 months while the stockmarket crash unfolded, instead of managing your clients investments by advising them to convert to cash long before they suffered catastrophic damage to their portfolios?

These were fair and reasonable questions, but they were too confronting for Cassmatis so he chose to ignore them.

I'm not a Storm victim - I was completely unaffected by what happened to Storm Financial clients. But I dislike dishonesty and cowardice, and Cassamatis has repeatedly shown prodigious talent for both.
I get heartily sick of hearing Cassamatis and others putting all the blame on the banks, while accepting none themselves. He shouldn't be allowed to get away with it. That's why I speak out against him and his kind.
If we keep the pressure on him by exposing him for what he is and what he did, maybe he just might be brought to justice. If we say nothing, we increase his chances of getting off with a slap over the wrist.


----------



## asproboy (26 June 2010)

I'm SO with you, Bunyip - and I'm guessing we're not alone. For all the rhetoric of SICAG (and much on-the-ground emotional support), the efforts seem to be diversionary rather than aiding the identification of the true architects of this fiasco. It's been such a long time and I fear EC & JC's ongoing freedoms are still not being met with the rage I feel they are due.

The financial manufacturers minted the bullets, to be sure, but Storm sold the guns (at a premium) with a compelling story of need, rejecting all the risks and failing to disarm the vulnerable when the environment was more fraught with danger.

Worst of all, this flies in the face of how the financial services is set up to operate. Few people on this forum will be sympathetic, I know, but the reputation of many honorable, client-focused professionals has suffered at the hands of one (or a few) scheming w@nkers who perfected a system and wallowed in their ill-gotten wealth like the pigs they are.
<end rant>


----------



## Solly (27 June 2010)

*"Investors run out of patience"*

"An impassioned series of emails from investor Sean McArdle to Labor MP Bernie Ripoll late last week drove home the message that investors have had enough of promises from authorities that justice would be served."


*"For richer or poorer, battlers fight on"*

"The hundreds of people who turned out to the Cassimatis wedding yesterday were a stark reminder to former Storm Financial clients of the nightmare they have led since the collapse of the company"

Read more by Mitch Gaynor on Page 7 of The Sunday Mail, June 27, 2010.


----------



## Garpal Gumnut (27 June 2010)

The flaunting of wealth this weekend by the engineers of this debacle which has affected the savings, health and futures of so many battlers, I find extremely distasteful.

The good people whose money has disappeared must wonder where and when the regulators will make the guilty pay.

gg


----------



## Solly (28 June 2010)

Garpal Gumnut said:


> The flaunting of wealth this weekend by the engineers of this debacle which has affected the savings, health and futures of so many battlers, I find extremely distasteful.
> 
> The good people whose money has disappeared must wonder where and when the regulators will make the guilty pay.
> 
> gg




gg, it's getting towards the end of the month, I wonder if ASIC has anything to announce?


----------



## Ironhalo (28 June 2010)

Solly said:


> gg, it's getting towards the end of the month, I wonder if ASIC has anything to announce?




Fingers crossed lads!


----------



## Solly (2 July 2010)

*"Litigator steps up class action against CBA
Firm to file statement of claim"*

"Levitt Robinson intends to file its statement of claim today as part of its class action against CBA."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9564.htm


----------



## specialed (2 July 2010)

Will be intresting to see what efforts the CBA takes to keep this out off the courts.....


----------



## Solly (2 July 2010)

specialed said:


> Will be intresting to see what efforts the CBA takes to keep this out off the courts.....




specialed I am very interested in the 'unlawful scheme' that is mentioned in the article.


----------



## specialed (2 July 2010)

Solly said:


> specialed I am very interested in the 'unlawful scheme' that is mentioned in the article.




I agree...Surely this would be an avenue that ASIC should have explored also. Can the details or the ASIC or Worrels investigations be subpoenaed for a case of this type ? I understand this may relate to the nature of the Storm product and how it was registered or otherwise....

Anyone giving odds that this will never get to court... What are the CBA afraid of.....


----------



## awg (2 July 2010)

Garpal Gumnut said:


> The flaunting of wealth this weekend by the engineers of this debacle which has affected the savings, health and futures of so many battlers, I find extremely distasteful.
> 
> The good people whose money has disappeared must wonder where and when the regulators will make the guilty pay.
> 
> gg





have had a strange premonition for some time that the perpetrator of this fraud will meet an untimely end. 

I have no Storm connection


----------



## irish joe (2 July 2010)

Hi All, 
I have observed this thread with much interest almost from when it began.

A couple of disclosures. 

1. I am a financial Planner and have been since the early 1990s in an area that has seen much storm damage

2. My practice is fee for service and we focus on strategic and holistic advice. We have done pro bono work for some storm victims and have had some very good outcomes with a few (resolution scheme) and also are close to some others

3. My practice is large and self licenced,with about 60% of clients benig retirees or those nearing retirement. As such we do not have large exposures to margin lending but younger clients whom we do have margin laons for are predominantly with CGI and as such I have an intimate knowledge of the processes.

Observations

I am not going to repeat much of what is already well articulated elsewhere in this thread suffice to say that I agree with the sentiments of GG and Solly in that the genesis of the entire disaster and as such the culpability lies with cassimatis and his team of salesmen who exposed their clients to unacceptable levels of risk through the double gearing strategy and in many cases these clients should have not had borrowings at all. Rather I would like to share ny observations as to the likely outcomes of the variuos legal proceedings occurring at the moment

The banks are not blameless and indeed some of the lending is unconscionable with regards to the equity extended against people's homes but the margin loans were all granted within the rules of the day ( ie no requirement to ask where funds were sourced). The advisers though had a duty of care to explain any and all risk to the borrower. 

With respect to the margin call process, I had clients experience margin calls with CGI. The process which has been in place as long as I can remember is that CGI (AND MAcquarie) contacted the adviser to contact the client to rectify the situation. This is for two very good reasons. The adviser has the primary relationship with the client and is licenced to give the advice as to what options the client has with respect to lodging additional security, cash or selling down. Staff in call centres for any margin lender are generally not licenced to recommend that a client sell stock/managed funds. Frankly I would be incenced if CGI contacted my clients without first contacting me

So I was recieving emails from CGI when my clients went into buffer and or margin call. I am aware through a discussion with a former CGI staff member that these same emails were provided to storm head office. I am also aware through discussions with a former storm adviser that this was the process he experienced until his business was sold to storm, JC was the one who issues the edict that all correspondence come to HO and not to the advisers.

It is true that CGI should have stepped in earlier and not let the margin loans blow out to where they did however it is my understanding that some clients have had their position restored to where they would have been if the margin call had been issued at the correct time. For levitts and SICAG to be arguing for full restitution is reckless and unfounded and frankly misleading to the victims of cassimatis. Essentially what they are seeking is for the bank to also compensate for market risk as well as storm's negligent and reckless advice. If this course had any chance then many others would seek to sup at Ralphs diner.

The chances of CGI being found to have not followed due process are about as good as those of the proverbial snowflake.

On the complicity of others at ANZ,BOQ and CBA, I believe there is ample evidence (some of which i have intimate knowledge of through said pro bono work) that home loans written were done so on less than accurate information supplied to them via storm and also that the internal processes and risk management were compromised by the sheer volume of lending being generated by storm.

On the sell down of the index funds, I don't believe that CGI or colonial first state had much choice. Cassimatis sent a letter to all clients recommending they move to cash well before colonial made their call. If he had of followed through with the letter then the same would have happened anyway. I question though wy he (manny) did not act on his recommendation as all victims I have had contact with actually signed the letter and returned it. I suspect that Manny may have realised after the letter was sent that because of the ridiculous gearing levels he had exposed his clients to, a move to cash would mean few if any of them would have sufficient equity to reenter the market anyway.(There goes the fees old boy)

I am hopeful like many of you that ASIC come out with their findings soon so that stormers can stop chasing Don quixotes rainbows and get on with life.


----------



## Julia (2 July 2010)

Interesting, Irish Joe.  Thank you.


----------



## irish joe (2 July 2010)

Thanks Julia. 

The other interesting thing that I failed to mention is that levitts are basing their argument on the notion that there was an "illegal scheme" being run by Storm and the CBA. This is preposterous.

Storm provided a flawed advice model that was implemented using a lending product provided by in the main CGI or Macquarie. Funds were invested in managed funds that were essentially "badged" for storm by either Colonial first state or challenger. I have read the product disclosure statements and the funds whilst expensive due to Manny's snout in the trough were structurally sound.

If an illegal scheme was in play,then Macquarie and challenger would also need to be party to the litigation.

I have no doubt that many people within all of these institutions knew about the risk associated with the storm process, but we need to remember that all of these institutions effectively produce and market investment and or lending products. They were not the providers of the advice. At the endof the day they probably knew of the risk in the storm model but chose to ignore it due to the massive volumes of business and therefore profit they were enjoying. At the end of the day someone bought their product because they were advised to buy their product by Storm. 

The advice is where the issue is. I am aware of another group who use(or used) a similar strategy using a different home lender and a different margin loan provider. again the advoce is shonky, but the products used to implement that advice are fine


----------



## Garpal Gumnut (2 July 2010)

irish joe said:


> Hi All,
> I have observed this thread with much interest almost from when it began.
> 
> A couple of disclosures.
> ...






irish joe said:


> Thanks Julia.
> 
> The other interesting thing that I failed to mention is that levitts are basing their argument on the notion that there was an "illegal scheme" being run by Storm and the CBA. This is preposterous.
> 
> ...




Your view irish, would be the consensus view on ASF I am pretty certain.

The model was good in a fairy tale bull market and everyone won, however it was over leveraged and badly monitored by the clients' advisers, the latter in my opinion having the greater culpability.

The banks were happy to lend and foreclose as they did, and bear some of the blame.

Manny must have one hell of a personality to have so many clients penniless, sticking with him in the Levitts adventure.

Does anyone know if Levitts are working for a percentage or charging fees?

gg


----------



## irish joe (2 July 2010)

Hello GG,

regardless of whether the ambulance is carrying cash ora clip of the ticket  they are conflicted in that they are also representing former advisers as well.

I should be able to find out in the next week or so as I have some former storm clients who have made all of the enquiries and received documents from Levitts. On my advice they have chosen to continue with the SG/CBAresolution scheme,however they probably have an engagement letter that should disclose fees. That said, levitts may be using a storm disclosure model


----------



## Solly (2 July 2010)

*"CBA in for a storm, lawyers vow"*

"Lawyers promised a David and Goliath fight as they launched a class action against the Commonwealth Bank in Brisbane over the collapse of Storm Financial."

"...asserted that Storm Financial and the Commonwealth Bank of Australia effectively ran a managed investment scheme but it was never registered as such."


More in brisbanetimes.com.au here;

http://www.brisbanetimes.com.au/queensland/cba-in-for-a-storm-lawyers-vow-20100702-ztqg.html/queensland/cba-in-for-a-storm-lawyers-vow-20100702-ztqg.html


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## irish joe (2 July 2010)

The three hundred clients who Levitts allegedly represent have been duped before it ieven gets to court. 

There is no legal basis for the claim that CBA and Storm operated an illegal managed investment. 

Here are the facts


1.Colonial first state provided a badged product ( the index funds) under a registered scheme that had a produst disclosure statement that is required to be provided to clients by the adviser(storm). The product disclosure statement exists, I have one in my possession

2. money was borrowed by storm clients from the cba and others by way of home equity loans and margin loans. The institutions that lent money against property to pensioners and others of limited means have some blood n their togas but at best this amounts to unconsciable conduct which under the law only requires that they cannot profit from loans so judged. The borrowers entered into contracts and are still liable for the principal. This is why the CBA resolution is a generous one in that in many cases borrowers have a life interest and no requirement to repay the principal with no interest accruing. In other cases they have entirely forgiven the loan.

3. The margin loans were secured in the main against the managed funds referred to in point 1. When the margin call lending ratio (LVR) was triggered storm was notified and the responsible action by storm would have been to advise clients to either provide additional security or sell sufficient security to bring the loan back into order. Due to the inflated LVR Manny knew this meant the end. This is why his knee jerk reaction was t have clients sell down to cash which carries a lending ratio of 100%. What he didn't consider was the flaw in his advice meant that due to the inflated LVRS if clients went to cash they still could not find the requisite equity to reenter the market, thus he withheld the requests to go to cash and tried to reach an alternative arrangement that protected his interests and HIS INTERESTS ALONE. CBA had little or no alternative to sell down when some margin calls had blown out to in excess of 100%.

Clients should have been advise BY STORM of the risks associated with borrowing to invest.

That is the storm model in essence. As stated in my previous post, none of this represents an unregistered managed investment schem. In fact the products used or products like them are readilyavailable and when used properly there is nothing wrong with them.

Those stormers who have paid money to levits are throwing good money after bad


----------



## Solly (2 July 2010)

*"CBA says Storm class action premature"*

"THE Commonwealth Bank of Australia says a class action being sought on behalf of Storm Financial victims is premature and potentially denies the claimants a quick and certain outcome."

More from Alison Bell & AAP in the Herald Sun here;

http://www.heraldsun.com.au/news/breaking-news/cba-says-storm-class-action-premature/story-e6frf7ko-1225887307146


----------



## Garpal Gumnut (2 July 2010)

Solly said:


> *"CBA in for a storm, lawyers vow"*
> 
> "Lawyers promised a David and Goliath fight as they launched a class action against the Commonwealth Bank in Brisbane over the collapse of Storm Financial."
> 
> ...





I'm a bit confused here. Are Levitts saying that Storm and CBA are culpable? I was under the impression that Manny was in the Levitt's tent pissing out. 

Are Levitts then going after Manny, Storm and CBA, and MQG down the track?

As the Levitts Lawyers seem to have 







> "...*asserted that Storm Financial and the Commonwealth Bank of Australia effectively ran a managed investment scheme but it was never registered as such.*"




gg


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## irish joe (2 July 2010)

Interesting article Solly. levitts are feasting on a carcass.

Over 40 legals firms particpating in resolution scheme and levitts choose another path. 

300 clients at minimum $5000 each is good chips. Some may be paying more.

Will be interesting to see at what point they fold the action and look to settle which will result in a similar outcome to resolution scheme but levitts will have their funds.

Fact that Ron jelich was the spokesperson for them in their roadshow means stormers should have run a mile.

On the redcliffe legend, Heard he was still getting paid becasue andrew o'brien was "looking after his clients". Now andrew has had licence revoked by infocus securities, he will need another source of income. I hear he is hawking a Multi level scheme


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## Solly (2 July 2010)

*"CBA responsible for losses, Storm clients claim"*

"Commonwealth Bank partnered Storm Financial in an unlawful managed investment scheme and was therefore responsible for its losses, a statement of claim has alleged today.

No amount of damages sought has been specified on behalf of four former Storm Financial investors chosen as representatives, which includes a vigorous Commonwealth Bank critic Sean McArdle."


More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/cba-responsible-for-losses-storm-clients-claim-20100702-zslt.html


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## irish joe (2 July 2010)

GG,
 I am pretty sure that even levitts would not invite Manny into the tent. He has merely crawled out from under his rock( a fairly flash rock from what i am told) to comment on the levitts case because it supports his positionthat it is all the fault of CBA. In his own words, "the truth will come out and soon. 
Anyway I dont think Levitts do criminal law.


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## irish joe (2 July 2010)

GG, 

I see you are still online. insomnia,wimbledon and this forum provide terrible hinderances to sleep. I trust you are enjoying a good red. I am currently talking cricket with "jim Barry"


----------



## specialed (3 July 2010)

irish joe said:


> With respect to the margin call process, I had clients experience margin calls with CGI. The process which has been in place as long as I can remember is that CGI (AND MAcquarie) contacted the adviser to contact the client to rectify the situation. This is for two very good reasons. The adviser has the primary relationship with the client and is licenced to give the advice as to what options the client has with respect to lodging additional security, cash or selling down. Staff in call centres for any margin lender are generally not licenced to recommend that a client sell stock/managed funds. Frankly I would be incenced if CGI contacted my clients without first contacting me
> 
> So I was recieving emails from CGI when my clients went into buffer and or margin call. I am aware through a discussion with a former CGI staff member that these same emails were provided to storm head office. I am also aware through discussions with a former storm adviser that this was the process he experienced until his business was sold to storm, JC was the one who issues the edict that all correspondence come to HO and not to the advisers.
> 
> ...





Irish Joe,

Thanks for adding your perpsective and analysis of this affair. Given your experience as a FP what is your belief on the following.

1.  What is the difference between industry standard practice and legal responsibility with regards to margin calls. Within this, who is the contrat between; the client, the bank and the advisor or just the client and the bank.

2. Why have the CBA been involved in the resolution process given it is not just those who recieved dubious loans who are being compensated.

3. What is your understanding of the recent high profile margin loans court case where the client was awarded full restitution for not receieving a margin call directly.

What love an "insiders " perspective.


----------



## specialed (3 July 2010)

irish joe said:


> The three hundred clients who Levitts allegedly represent have been duped before it ieven gets to court.
> 
> There is no legal basis for the claim that CBA and Storm operated an illegal managed investment.




I was under the impression that once filed the judge will make an initial determination as to whether there may be a basis for class action which will then determine if it is actually alowed to proceed. Does anyone know if this is the case.


----------



## specialed (3 July 2010)

Garpal Gumnut said:


> I'm a bit confused here. Are Levitts saying that Storm and CBA are culpable? I was under the impression that Manny was in the Levitt's tent pissing out.
> 
> Are Levitts then going after Manny, Storm and CBA, and MQG down the track?
> 
> ...




I think they are TRYING to argue that it was the banks responsibility to register the fund as a managed investment given how it was run. I doubt levitts would bother going after Manny and co, they, like all the other vultures know where the money is.

I'm still unclear where ASIC's responsibility is to go after Manny, rather than the former clients.  Civil actions are generally only persued in order to gain financial restitution. If anyone wants to go after manny they would want to do it quickly and on their own as their would not be enough to share between all the clients. Would they even be able to secure any restituion given there was an initial case filed against Cassimatis wasnt there ?


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## Garpal Gumnut (3 July 2010)

irish joe said:


> GG,
> 
> I see you are still online. insomnia,wimbledon and this forum provide terrible hinderances to sleep. I trust you are enjoying a good red. I am currently talking cricket with "jim Barry"




I do hope it is JB vino, not JB wig, discussing cricket with you, I met the latter at the Pack do recently and his knowledge of Wisden is atrocious.

Your contribution is much appreciated.

The Storm saga will be discussed for centuries to come in the same manner as the Tulip bubble mania in Holland still is now.  The markets do get a too deep whiff of oxygen betimes and the silver tongued lizards come out of their holes to lead the poor sods in to penury.

Rather like the Pied Piper of Hamelin with a soporiphic tune.

And as us oprah fans know, the show ain't ova till the fat lady sing.

gg


----------



## specialed (3 July 2010)

Solly said:


> *"CBA says Storm class action premature"*
> 
> "THE Commonwealth Bank of Australia says a class action being sought on behalf of Storm Financial victims is premature and potentially denies the claimants a quick and certain outcome."
> 
> ...




"The class action is premature considering that Levitt Robinson has not pursued all the opportunities available under the Scheme."


Read more: http://www.news.com.au/business/bre...r-1225887307146?from=public_rss#ixzz0sYhIhEIP

As I understood it Levitt has been in touch with the CBA, but the claim is that the scheme  itself allows the bank to bipass justice for the clients. The statements by the CBA appear to chose to ignore the anger felt towards them by the clients. For many, it will only be through  the court system that they can find piece. Whether in their favour or not they will know who is responsible for this mess.  There is no doubt many more would like to join a class action but time has simply ran out for them and they have had to "take the deal"......


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## Solly (3 July 2010)

*"CBA and Storm 'breached' Corporations Act"*

"THE Commonwealth Bank has been accused of entering into an unregistered managed investment scheme with Storm Financial, in a court action demanding that Storm investors be repaid in full for their losses."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/cba-and-storm-breached-corporations-act-20100702-zu2c.html


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## Solly (3 July 2010)

*"Storm clients mount class action on bank"*

"Stephanie Carmichael, also from Levitt Robinson, said the class action involved about 300 disaffected clients."

"It's a potential class action of 1,200."

From AAP in the SMH;

http://news.smh.com.au/breaking-news-business/storm-clients-mount-class-action-on-bank-20100702-zrdx.html


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## Garpal Gumnut (3 July 2010)

Solly said:


> *"Storm clients mount class action on bank"*
> 
> "Stephanie Carmichael, also from Levitt Robinson, said the class action involved about 300 disaffected clients."
> 
> ...




How much is it costing each client do you know Solly?

gg


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## Solly (3 July 2010)

*"Storm probe drags on"*

"THE corporate regulator investigating the collapse of failed wealth adviser Storm Financial is resisting putting a time limit to its long-running probe.

...liquidators.....report is understood to recommend up to 57 charges against parties involved in the company."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/07/03/151071_news.html


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## Garpal Gumnut (3 July 2010)

Solly said:


> *"Storm probe drags on"*
> 
> "THE corporate regulator investigating the collapse of failed wealth adviser Storm Financial is resisting putting a time limit to its long-running probe.
> 
> ...




ASIC are muppets. The perpetrators will get away with it imho. 
They are taking way too long, trying to cover every tiny little issue. 
If they were fishermen the tide would have come in and gone out again and they'd be tossing their malodorous bait on dry sand.

gg


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## specialed (3 July 2010)

Garpal Gumnut said:


> How much is it costing each client do you know Solly?
> 
> gg




I think it ranges depending on each clients losses


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## Solly (3 July 2010)

Garpal Gumnut said:


> ASIC are muppets. The perpetrators will get away with it imho.
> They are taking way too long, trying to cover every tiny little issue.
> If they were fishermen the tide would have come in and gone out again and they'd be tossing their malodorous bait on dry sand.
> 
> gg




gg, to get things moving it might just be time to attach the crevicing tool on the yabbie pump. :


----------



## specialed (3 July 2010)

Garpal Gumnut said:


> ASIC are muppets. The perpetrators will get away with it imho.
> They are taking way too long, trying to cover every tiny little issue.
> If they were fishermen the tide would have come in and gone out again and they'd be tossing their malodorous bait on dry sand.
> 
> gg




Agreed...

"The report is understood to recommend up to 57 charges against parties involved in the company"  

Does anyone know if "parties" extends beyond Storm itself or simply a number of parties working within storm ?


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## Solly (3 July 2010)

*"Storm Financial victims target Commonwealth Bank"*

"STORM Financial victims Les and Julianne Sherwood lost almost all their life savings two years ago and now they are using what remains to help fund a class action against the Commonwealth Bank.

Sunshine Coast police officer Sean McArdle and his wife, Paula, have also joined the class action, vowing to spend whatever it takes to get justice."

More by Anthony Marx in The Courier Mail here;

http://www.couriermail.com.au/business/bank-firmly-in-victims-sights/story-e6freqmx-1225887302994


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## irish joe (3 July 2010)

specialed said:


> Irish Joe,
> 
> Thanks for adding your perpsective and analysis of this affair. Given your experience as a FP what is your belief on the following.
> 
> ...




Hi Specialed,

1.
You are right in that the contract is essentially between the client and the bank and the FP is the intermediary. If the FP does not notify the client of the impending Margin call then the lender contacts the client ( standard practice). In the storm situation,CGI should have contacted the clients when it was clear that Storm were not going to. There is no doubt here. I have been told that through the resiolution scheme, those who had margin loans with CBA are having any indebtedness above the point where the Margin call should have occurred completely forgiven

2. I am not aware of any compensation being given for people through the resoution scheme that does not relate to either a standard bank loan or a margin loan. Certainly the clients I have worked with have all had a loan of some nature with CBA group of companies

3. The case with Macquarie was essentially won on the basis that the client had the means to  provide cash or security had he been contacted. I was of the understanding his relationship was direct with Macquarie and not through a broker or FP. I could be wrong though.


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## specialed (3 July 2010)

irish joe said:


> Hi Specialed,
> 
> 1.
> You are right in that the contract is essentially between the client and the bank and the FP is the intermediary. If the FP does not notify the client of the impending Margin call then the lender contacts the client ( standard practice). In the storm situation,CGI should have contacted the clients when it was clear that Storm were not going to. There is no doubt here. I have been told that through the resiolution scheme, those who had margin loans with CBA are having any indebtedness above the point where the Margin call should have occurred completely forgiven
> ...




I believe your right about the lack of broker, but given the client is in contract with the bank itself I wonder if this is relevant, hence my initial question. The courts might take into account previous practice within the storm organisation in the event of the margin call, however I believe in all previous sitauations involving margin calls for storm investors, they were contacted directly by the banks. This was the focus of some discussion during the senate inquiry where the cba was unable to identify when it changes its practice of notifying the clients directly. This is the first point of contention for many investors. I stand to be corrected but in common law cases regarding the execution of contractual obligations, the case is between the parties to the contract. I am unaware the degree to which storm may be a party in the contract between investor and CGI.

In terms of the loan I mentt that not all clients were being compensated as a result of questionable loans, in particular the use of the VAS valuation system. Sorry about not being clear with that.

When reading the court docs for the Mac case the judge actually pointed out that the clients ability to service the call was not relevant as it was at the point that the call was not made that the law was broken. The direct quote is located in this forum somewhere I just cant find it. Maybe someone else can idenify where it is. 

Having said all that, the Levitts case (or the first one anyway) does not concern the margin call it is dealing with the nature of the fund and how it was registered.

Do you feel the CBA is conceeding some fault be participating in the resolution process ? and if so, what do you think they might be the area of fault that they are compensating clients for ?


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## Smiley (3 July 2010)

Friends went to Levitt's last meeting in Townsville and he is asking for big $ up front.  He said that those who lost the most would be expected to give $25,000 and those who lost least $5,000. Someone evidently asked what if you can't afford such fees and they got no direct answer.  

He did mention getting $350,000 up front from some doctors in Sydney who'd been storm clients and a number of $1,200 "donations", as he termed them . . . .  

My friends lost faith in him as Levitt waffled for a couple hours and then stated a very Manny sounding comment to the effect that debt was their greatest asset. . .


----------



## irish joe (3 July 2010)

Hi specialed,

I think there are two primary areas that the CBA has conceded that they have not done the right thing by their clients.

Fisrtly,  when it was clear to them that Storm were not communicating margin calls to clients they should have started calling clients. They have not said why they didn't act promptly and one can only assume it was becasue Storm accounted for an enormous part of their overall book and by proxy,profit. 

The second is with the lines of credit extended against homes to people that clearly shouldn't have had a loan and associated with that the inflated values used to extend further credit.

In both cases I am aware of them 'setting things right"

I am a little confused about the levitt argument that an illegal managed investment scheme was in place. The funds used were fairly vanilla managed funds that Colonial first state operated and were badged for storm.


----------



## Solly (3 July 2010)

*"The Commonwealth Bank says it will fight a class action lodged against them in the Federal Court
 today by investors who lost their savings in the collapse of Storm Financial."*

As reported on;

http://bigpondnews.com/articles/Business/2010/07/02/Storm_clients_act_against_bank_480128.html


----------



## Solly (3 July 2010)

irish joe said:


> .......
> I am a little confused about the levitt argument that an illegal managed investment scheme was in place. The funds used were fairly vanilla managed funds that Colonial first state operated and were badged for storm.




irish joe, I believe the Levitt approach is based on the Federal Court ruling in the case of Brookfield Multiplex Limited v International Litigation Funding Partners P/L in Oct 09.
Maybe others could add more clarity.


----------



## Solly (4 July 2010)

*"Bank accused of failing its clients"*

"The argument about an unregistered investment scheme mirrors the focus of investigations by ASIC, which were revealed by BusinessDay in October last year."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/bank-accused-of-failing-its-clients-20100702-zu89.html


----------



## Garpal Gumnut (4 July 2010)

Solly said:


> *"Storm Financial victims target Commonwealth Bank"*
> 
> 
> Sunshine Coast police officer Sean McArdle and his wife, Paula, have also joined the class action, vowing *to spend whatever it takes to get justice.*"




While having great respect and sympathy for the McArdles, sometimes the quest for justice does not result in a return of money.

That is the crux of all of these fp, lawyers, banks and others, dealings with the victims of Manny's scheme.

Like Manny, they care not about justice, they are only concerned with keeping the money.

By my estimate, in order of precedence the money now lies with

The Banks
Manny
The Lawyers
Other Financial Planners
The Victims.



The very best outcome I see for the victims, realistically occurring is a redistribution.

The Banks 
The Lawyers
Other Financial Planners
Manny
The Victims.


Not a good outcome really, even if you want justice, and especially if you want the money.


gg


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## specialed (4 July 2010)

Garpal Gumnut said:


> While having great respect and sympathy for the McArdles, sometimes the quest for justice does not result in a return of money.
> 
> That is the crux of all of these fp, lawyers, banks and others, dealings with the victims of Manny's scheme.
> 
> ...




It would appear to me that the lack of justice for clients (victims) is a result of the inaction or apparent inaction of ASIC and the senate inquiry. ASIC and to a lesser extent the senate inquiry has a public interest in bringing to account any parties (banks, storm or otherwise) who have been involved in this and if there is no fault then making this public.  In "seeking a commercial resolution" ASIC have failed to carry out there duty effectively.

From their website...

"The Australian Securities and Investments Commission Act 2001 requires us to: 
maintain, facilitate and improve the performance of the financial system and entities in it 
promote confident and informed participation by investors and consumers in the financial system 
*administer the law effectively and with minimal procedural requirements 
enforce and give effect to the law *receive, process and store, efficiently and quickly, information that is given to us 
make information about companies and other bodies available to the public as soon as practicable.

If their is fault that requires commercial resolution then this MUST be made at the same time as the administration of the LAW, not instead of it. ASIC have done nothing (as yet) to make clients understand who is at fault for their losses. For most this is as important as any financial restitution.......


----------



## specialed (4 July 2010)

Further to my posting above..

If ASIC were clear regarding what this "commercial resolution" is then those participating in the resolution process would be able to make a more informed decision with regard to accepting the CBA offers or otherwise.. Investors are leaving the scheme as it fails to secure them any type of future, something that the commercial resolution ASIC refers to in their public commentary may help to recify....

Is the payout going to be "topped up" by the ASIC findings ?   ASIC are as responsible for anyone in this mess for investors choosing an all or nothing approach through Levitt and co. Its a shame ASIC has become so gun shy as a result of their repeated and very public failures...Maybe after all this some scrutiny on their actions may occur...


----------



## Garpal Gumnut (4 July 2010)

specialed said:


> It would appear to me that the lack of justice for clients (victims) is a result of the inaction or apparent inaction of ASIC and the senate inquiry. ASIC and to a lesser extent the senate inquiry has a public interest in bringing to account any parties (banks, storm or otherwise) who have been involved in this and if there is no fault then making this public.  In "seeking a commercial resolution" ASIC have failed to carry out there duty effectively.
> 
> From their website...
> 
> ...






specialed said:


> Further to my posting above..
> 
> If ASIC were clear regarding what this "commercial resolution" is then those participating in the resolution process would be able to make a more informed decision with regard to accepting the CBA offers or otherwise.. Investors are leaving the scheme as it fails to secure them any type of future, something that the commercial resolution ASIC refers to in their public commentary may help to recify....
> 
> Is the payout going to be "topped up" by the ASIC findings ?   ASIC are as responsible for anyone in this mess for investors choosing an all or nothing approach through Levitt and co. Its a shame ASIC has become so gun shy as a result of their repeated and very public failures...Maybe after all this some scrutiny on their actions may occur...




Excellent points specialed, excellent.

The banks, Manny and the Financial Planners can afford legal advice, the victims needed some guidance well before this from ASIC.

gg


----------



## Solly (4 July 2010)

specialed said:


> Further to my posting above..
> 
> If ASIC were clear regarding what this "commercial resolution" is then those participating in the resolution process would be able to make a more informed decision with regard to accepting the CBA offers or otherwise.. Investors are leaving the scheme as it fails to secure them any type of future, something that the commercial resolution ASIC refers to in their public commentary may help to recify....
> 
> Is the payout going to be "topped up" by the ASIC findings ?   ASIC are as responsible for anyone in this mess for investors choosing an all or nothing approach through Levitt and co. Its a shame ASIC has become so gun shy as a result of their repeated and very public failures...Maybe after all this some scrutiny on their actions may occur...




specialed, I spent some time talking with my Stormer mate again today, he is still standing bewildered by this whole saga, I can tell you he is still mystified by what ASIC can really do for him. 

As time is progressing his look of bewilderment is changing into a state of amazement and trending towards despair. I believe he is blaming himself for not gaining a deeper understanding of the methods of financial investment which may have averted the predicament he is now facing. 

But he again said to me he believed that his money was being looked after by very reputable organisations and overseen by a strong regulatory framework. I'm sure there are many Stormers who are just still as unsettled and anxious as my mate.

I am eagerly awaiting the next Media Release from ASIC.


----------



## irish joe (4 July 2010)

Specialed, I couldn't agree more. One of the most frustrating things for the victims I have been dealing with is the silence by ASIC and as you point out has been a source of confusion as to whether to accept the resolution scheme offerings.

I can only hope that their quest for a commercial resolution is based on the fact that their investigations have found that Whilst the Storm team are the most culpable ( Manny,Julie and all the representatives), there is no hope of any restitution to clients other than the satisfaction of seeing them grace the corridors at the creek and other like establishments.
They have no doubt got evidence that the banks are also not entirely blameless and that the others like the CBA have done ,will acknowledge same and "where we have done wrong we will fix it"

If this is the case ASIC should publicly say so rather than keeping us all in the dark

The problem is that this could drag on for a time yet and Victims continue to have no closure.

I would like to see all of the banks who are involved go through a resloution process like the CBA one AND then a jountly funded compensation scheme, not unlike the ANZ/OPES prime be established to assist those stormers who were genuinely duped. There are examples out there of highly intelligent people who have been seduced by greed and greed alone and these people do not deserve the same level of restitution as the pensioners and less financially literate who are the true "Victims".

GG, On another point, I take your point about the menagerie of other beasts that havegathered at the salt lick, but some seek nutrition of a different kind. There are many FPs and Lawyers I know of that are working with the worst storm cases on a Pro Bono basis. 

Personally, this process has been one of the most professionally satisfying of my career. I have cried,laughed with these people, I have had some wins for them and enjoyed a beverage or two. 

When someone who has been financially destroyed by dishonesty and negligence can still find trust in you there is far more satisfaction then telling a multi millionaire you have saved them a few bob in tax or That we have made few $$


----------



## Garpal Gumnut (4 July 2010)

irish, I agree that not all FP's are dangerous vagabonds, but many are. You sound like a decent bloke or lass having said that.

The FP industry is poorly regulated and frankly not full of the brightest stars in the sky. Many I have met seem more like ex Nat Mut Insurance salesmen as Manny I believe was. 

gg


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## irish joe (4 July 2010)

GG,

Alas I must concur but standards have improved and continue to do so. We are slowly dragging the standard of advice to the level where we can truly claim to be a profession.

When as a young _fellow_ I started in the business it was indeed with Nat Mut and I only lasted about 3 years as at the time as I was disillusioned with the whole process of flogging insurance contracts dressed up as investments. I left the industry for a few years but returned via a stockbroking firm which was really not much better. I have subsequently moved on over the last 15 years and now operate a fee for service business with my own licence.

For the record, MAnny was at MLC when I started and was feted by all as a scion of the business. I questioned at the time not only his approach but also the standard practices across the gamut of insurance companies and was told by my regional manager that I would go broke with that attitude.


----------



## poverty (4 July 2010)

I wish I'd stop reading the word 'victims' in this thread.  They were people looking for profit, took a punt with some of their own money and a hell of a lot of the banks monies, and lost the lot.


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## Garpal Gumnut (4 July 2010)

poverty said:


> I wish I'd stop reading the word 'victims' in this thread.  They were people looking for profit, took a punt with some of their own money and a hell of a lot of the banks monies, and lost the lot.




Many did as you say, many didn't, it caused a fair bit of anguish to the battlers caught out by Storm's spin and scheme to be described as greedy. 

So I myself on my posts elected to not call them mugs, greedy etc., as many were genuinely not ignorant nor greedy, but just caught out by some very smart rich people who knew how to scam people out of their hard earned money.

In Townsville, as well, there was a fair bit of word of mouth referrals and this caused families to split and workmates to fall out depending on when they got dragged into the scam.

They even fed the poor bastards oxygen to keep them perky.

I think they were victims. We are all greedy in one way or another.

gg


----------



## Solly (5 July 2010)

*"Storm clients accuse CBA of legal breaches
Bank to defend claims"
*

"Former clients of Storm Financial have released their statement of claim against CBA, which includes a number of damaging allegations."

....accuse the CBA & CGI of breaching at least five sections of the Corporations Act.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9571.htm


----------



## Solly (5 July 2010)

*"Storm Financial class action against CBA"*

"THE actions of the Commonwealth Bank in the Storm Financial debacle are to be tested in court after Sydney law firm Levitt and Robinson filed a class action yesterday alleging the bank breached corporations laws by operating an unregistered managed investment scheme."


More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/07/03/151271_news.html


----------



## Solly (5 July 2010)

Garpal Gumnut said:


> Many did as you say, many didn't, it caused a fair bit of anguish to the battlers caught out by Storm's spin and scheme to be described as greedy.
> 
> So I myself on my posts elected to not call them mugs, greedy etc., as many were genuinely not ignorant nor greedy, but just caught out by some very smart rich people who knew how to scam people out of their hard earned money.
> 
> ...




gg, after seeing what my mate was wanting to draw down from his structure I wouldn't call him greedy either, I'd call it a very modest existence. 

Also regarding the recent actions regarding the statement of claim against CBA, it makes me wonder what evidence is at hand. I've never spoken to Sgt Sean but I did observe him being questioned at Harry's. He appeared to me to present very well, methodical, deliberate and sure. 

This make me believe that he wouldn't be taking this action if it wasn't backed by substance. Surely his training as a scientific officer would be standing by him. Makes we wonder what other evidence he could have in back of the Hi-Lux.

As I've learned in life it's always better not to upset coppers. It never is beneficial, it's a bit like trying to argue your way out of a speeding ticket on the M1 with Traffic Branch by claiming that the accelerator stuck in the Crown. It's better to just pull over when you seen the flashing lights of the red XR6 Highway Patrol car in the rear-vision mirror and cop it sweet, the watchhouse can be a cold and lonely place..


----------



## Garpal Gumnut (5 July 2010)

irish joe said:


> GG,
> 
> Alas I must concur but standards have improved and continue to do so. We are slowly dragging the standard of advice to the level where we can truly claim to be a profession.
> 
> ...




Sorry MLC , not Nat Mut, but all those creeps in their Kingswoods looked the same calling in at 730pm to flog useless life insurance to young kids starting out.

You sound like an ok bloke irish, look after the lost.

gg


----------



## irish joe (6 July 2010)

Cheers GG,

You sound like a good bloke too. Anyone invited to packy's do must have some cred


----------



## irish joe (6 July 2010)

poverty said:


> I wish I'd stop reading the word 'victims' in this thread.  They were people looking for profit, took a punt with some of their own money and a hell of a lot of the banks monies, and lost the lot.




Take your point poverty, but many of these people were sold the impossible dream and can't be held entirely responsible. Some I have dealt with are *very* simple folk who trusted a very smooth operator with a silver tongue.

I totally agreee that there are also many who frankly should have known better and for them I hold no sympathy.


----------



## Julia (6 July 2010)

Irish Joe, I don't know anyone who is so utterly 'simple' that they wouldn't appreciate that borrowing against their home to buy something that often falls in value is risky.

Then to further take out a margin loan over the shares bought by that borrowed money was imo pure madness for retirees.


----------



## irish joe (6 July 2010)

Julia said:


> Irish Joe, I don't know anyone who is so utterly 'simple' that they wouldn't appreciate that borrowing against their home to buy something that often falls in value is risky.
> 
> Then to further take out a margin loan over the shares bought by that borrowed money was imo pure madness for retirees.




I agree on the madness piece but believe me there are people out there who based their actions purely on trust and trust alone. They were referred to storm by family and friends. I am talking about people who had a combined education of grade 10 and the old scholarship(gr 8) and subsequently a household income sub 30k. For heavens sake some of them can hardly spell!!. They were only contacted because an old endowment policy matured. They literally had no idea what they were entering in to. 

As I stated before there are many who were greedy and deserve no sympathy but equally there are also many who were genuinley duped by slick salesmanship dessed up as advice. These people need help to get the best outcome possible


----------



## Julia (6 July 2010)

irish joe said:


> I agree on the madness piece but believe me there are people out there who based their actions purely on trust and trust alone. They were referred to storm by family and friends. I am talking about people who had a combined education of grade 10 and the old scholarship(gr 8) and subsequently a household income sub 30k. For heavens sake some of them can hardly spell!!.



Given some of the woeful spelling on this very forum, that's no indication of financial acumen.  I know plenty of people with minimal education who nevertheless have an adequate measure of common sense.



> They were only contacted because an old endowment policy matured. They literally had no idea what they were entering in to.



Are you telling me they had no idea they were borrowing money with their family home as surety?


----------



## irish joe (6 July 2010)

Julia said:


> Given some of the woeful spelling on this very forum, that's no indication of financial acumen.  I know plenty of people with minimal education who nevertheless have an adequate measure of common sense.
> 
> 
> Are you telling me they had no idea they were borrowing money with their family home as surety?




They knew they were borrowing against their home, but the real inherent risk was not explained hence my previous comments about the quality of the advice.

Julia I have read every single one of your posts in this forum and am aware of your loss at the hands of a charletain ( forgive spellin) however i have not had the pleasure of meeting you so cannot comment on your financial acumen or indeed your intelligence. On my observance I would speculate that you have an above average intelligence and have educated yourself in the financial spectrum. Unless however you are at the coalface in terms of dealing with people who have been devasated by this whole debacle I think it is dangerous to make assumptions about the financial acumen of the Affected( would have said victims but refrained out of respect for "poverty"

I also rejected a spellcheck


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## Solly (7 July 2010)

*"A Greek rich man lost the money of 14000 investors"*

"Little has been seen of the couple since early last year when Cassimatis promised in a media release he would continue a ”crusade” for justice for his clients ”until my dying breath”."

Posted by Anny Tzotzadini on Greek Reporter here;

http://au.greekreporter.com/2010/07/04/a-greek-rich-man-lost-the-money-of-14000-investors/


----------



## specialed (7 July 2010)

irish joe said:


> They knew they were borrowing against their home, but the real inherent risk was not explained hence my previous comments about the quality of the advice.
> 
> Julia I have read every single one of your posts in this forum and am aware of your loss at the hands of a charletain ( forgive spellin) however i have not had the pleasure of meeting you so cannot comment on your financial acumen or indeed your intelligence. On my observance I would speculate that you have an above average intelligence and have educated yourself in the financial spectrum. Unless however you are at the coalface in terms of dealing with people who have been devasated by this whole debacle I think it is dangerous to make assumptions about the financial acumen of the Affected( would have said victims but refrained out of respect for "poverty"
> 
> I also rejected a spellcheck




It appears that many of those who WERE NOT clients of storm, or suffered a loss in this mess have often taken to describing the clients as one of two distinct groups, those who were "simple" and really did not have a good comprehension of what they were undertaking. For these people Storm in particular needs to be bought to account, as at very simplistic level it would there advice to these clients was as least immoral, probably dishonest and possibly illegal.

The other group seem to typically be described as "greedy" and looking for a quick lottery win. This is despite many being long term investors with storm or with the planners who took up with them. I find this description also very simplistic. These investors analysed the model and made informed decisions. Implicit in this decision making was their understanding of the use of the margin call as a stop loss mechanism. There can be endless debate hear (and rightly so)  as to the use of this as a risk protection measure. The fact is however that it is these clients who appear to feel that the blame is shared between the CBA and Storm (predominately by the CBA).  An example, might be Sean McCardle. He does not strike me as a man driven by greed, nor does he strike me as simple. However, he does strike me a s someone who was anticipating a course of action to be undertaken when the market took a major dive.  He understood, or thought he understood what he could expect contractually, as well as his own contractual obligations. This is the issue of the Margin call, and this appears to lie firmly at the foot of CGI and the CBA. Let the courts decide if the McCardle’s and others beliefs about their contracts is true.

This forum is a great place to discuss the merits of the storm model, but to attempt to describe the personality types and characteristics of the storm investor it is not. This is just presumptuous, and as I have often read hear, offensive. Maybe the personality analyses should be left to the psyc’s....


----------



## DocK (7 July 2010)

specialed said:


> It appears that many of those who WERE NOT clients of storm, or suffered a loss in this mess have often taken to describing the clients as one of two distinct groups, those who were "simple" and really did not have a good comprehension of what they were undertaking. For these people Storm in particular needs to be bought to account, as at very simplistic level it would there advice to these clients was as least immoral, probably dishonest and possibly illegal.
> 
> The other group seem to typically be described as "greedy" and looking for a quick lottery win. This is despite many being long term investors with storm or with the planners who took up with them. I find this description also very simplistic. These investors analysed the model and made informed decisions. Implicit in this decision making was their understanding of the use of the margin call as a stop loss mechanism. There can be endless debate hear (and rightly so)  as to the use of this as a risk protection measure. The fact is however that it is these clients who appear to feel that the blame is shared between the CBA and Storm (predominately by the CBA).  An example, might be Sean McCardle. He does not strike me as a man driven by greed, nor does he strike me as simple. However, he does strike me a s someone who was anticipating a course of action to be undertaken when the market took a major dive.  He understood, or thought he understood what he could expect contractually, as well as his own contractual obligations. This is the issue of the Margin call, and this appears to lie firmly at the foot of CGI and the CBA. Let the courts decide if the McCardle’s and others beliefs about their contracts is true.
> 
> This forum is a great place to discuss the merits of the storm model, but to attempt to describe the personality types and characteristics of the storm investor it is not. This is just presumptuous, and as I have often read hear, offensive. Maybe the personality analyses should be left to the psyc’s....




Well said!  I'm sure I'm not the only one who has mostly stopped posting on this forum recently due to a disinclination to continue beating my head against a solid wall of condescension and accusations of greed and/or immorality for seeking any form of compensation.  

I do sometimes wonder why some posters, who clearly have very rigid views on what methods of wealth accumulation are acceptable and which are foolish and irresponsible (those would be the ones they don't consider prudent), bother to continue to post on this thread.  Some (Julia for instance) have clearly made up their minds as to what ex-storm clients deserve and *nothing*, not even an admission of partial responsibility from one of the banks involved, will convince them that any compensation should be paid to such undeserving foolish/greedy people.  This is despite having any first-hand knowledge of any dealings between client/advisor/banker.  

I'm also continually annoyed by the desire of several posters to lump all ex-storm investors into one generic "type".  As there were several thousand, it would be expected that individual goals, motives, understanding and financial acumen or otherwise would vary greatly.  Some are no doubt quite "simple" and some were no doubt "greedy", - but _I know_ there is a diverse range of ex-storm clients with many differing backgrounds and dealings with storm and their bank.  There is no "one size fits all" and the desire of the media, sections of the community and quite a few posters on this thread to persist in this assumption is bloody frustrating!  

The repetition gets a bit boring after a while as well


----------



## Julia (7 July 2010)

irish joe said:


> They knew they were borrowing against their home, but the real inherent risk was not explained hence my previous comments about the quality of the advice.



Sorry, but I just don't get how anyone can think they can buy something on the basis of a loan against their home and not consider that there is any risk.

I am not at all imagining that every Storm client had similar levels of financial or other education, or similar motives.
I'm simply saying they engaged in a risky strategy.

Dock, you yourself have said this about your own involvement with Storm.
It's just less palatable if someone else says it, apparently.

And no, I have never said that gearing for investments is a bad wealth policy. I have just said that's not one which is appropriate for retirees who apply their entire asset base to such a strategy.  So please don't twist what I have and have not said.

I'm very sorry for all the people who were burned by Storm.  Many of them seem like thoroughly decent folk.   But - like poverty - I'm a bit tired of hearing them described as victims.   
And Dock, I will continue to post in this thread if I want to (unless Joe suggests otherwise).  It's not just a thread for those who feel aggrieved - it's a *discussion forum*which means an alternate point of view may be expressed.



> Julia I have read every single one of your posts in this forum and am aware of your loss at the hands of a charletain ( forgive spellin) however i have not had the pleasure of meeting you so cannot comment on your financial acumen or indeed your intelligence. On my observance I would speculate that you have an above average intelligence and have educated yourself in the financial spectrum. Unless however you are at the coalface in terms of dealing with people who have been devasated by this whole debacle I think it is dangerous to make assumptions about the financial acumen of the Affected( would have said victims but refrained out of respect for "poverty"



Even if I'd not spent the years educating myself financially (and still having a lot to learn), I'd have recognised that taking out a loan against my home to buy shares was to be taking a risk.   *That is all I am saying.*

I have not suggested that  every Storm investor is a bad and greedy person.

And, fyi, Irish Joe, I've spent some 15 years working as a volunteer with people who have minimal education and life skills, so I'd appreciate not being labelled as someone with no experience of those dissimilar to myself.


----------



## Harleyquin (7 July 2010)

DoK I agree wholeheartedly with your comments, well said.

Most contributors to this forum have too many bank shares and worried about their future earnings to be truly bothered about the fact that this storm debacle has caused one major point to become apparent.

Whether the banks are proved culpable or not the fact remains that storm was a registered financial institution.  One would think that you could go to these people for genuine financial advice.

Financial planners are not to be trusted in the same way as other professionals.

Storm Financial has proved this without a shadow of doubt or something would be done about it, nothing is.


----------



## Mofra (7 July 2010)

Julia said:


> Are you telling me they had no idea they were borrowing money with their family home as surety?



They may have believed that there were adequate safeguards in place to protect their home - I've read many an SOA in my time and some of them can be ridiculously long, complex and convoluted which would give a lay person the impression there was strong scientific/calculated approach to the advise that was being given (not just a few percentage figures plugged into an overpriced piece of software)

Given the natural human adherance to people in positions of authority, I'm not willing to deride the people who were caught up in the Storm fiasco with a "serves them right" attitude; should some have known better? Yes absolutely, but treating them all with a lack of compassion isn't particularly helpful.


----------



## specialed (7 July 2010)

Julia said:


> Sorry, but I just don't get how anyone can think they can buy something on the basis of a loan against their home and not consider that there is any risk.




Julia, 

I dont think all of the investors believed the were entering into a risk free scheme. However, they believed the risk associated with the margin loans (coupled with the margin call if used as they believed it would be) was worth the return. 

For many it proved an effective way to enter into retiremtn and was used over was over a considerable period of time. Im sure not all investors thought this but many did, hence the issue with the margin call. Inherent in the choice of any strategy, and albeit the associated risk is the ability to manage and control what is happening. For storm investors (at least those who understood the model and risk) taking away their ability to deal with the margin call lies at the heart of this matter.

As I stated early, this forum is a great place for reflecting on the storm model. But how can it be analysed properly if a key apect of it, the activation of the margin call TO the investor was not carried out. Had it been this would forum would merely be discussing the merits of a model that saw thousands of investors have to make margin calls at a very late stage because of the high LVR rather then being desimated at the hands of the CBA.


----------



## freddy2 (7 July 2010)

Has it been asked why if this strategy was such a great way to earn extra returns why wasn't it used in a widespread manner throughtout the financial planning industry. It's not like it is a hard strategy to replicate and 7% fees sure sounds sweet. I have little to no respect for the investment skills of financial planners and yet most realise strategy like this are guarateed to blow up their clients.


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## specialed (7 July 2010)

Julia, I appoligise for repeating the above message but my computer decided to blow up before I had finished editing.

Julia,

Ammended message below

I dont think all of the investors believed the were entering into a risk free scheme. However, they believed the risk associated with the margin loans (coupled with the margin call if used as they believed it would be) was worth the return. 

For many it proved an effective way to enter into retirement and was used over a considerable period of time. Im sure not all investors now think this however many did, hence the issue with the margin call. Inherent in the choice of any strategy, and albeit the associated risk is the ability to manage and control what is happening. For storm investors (at least those who understood the model and risk) taking away their ability to deal with the margin call lies at the heart of this matter.

As I stated early, this forum is a great place for reflecting on the storm model. But how can it be analysed properly if a key apect of it, the activation of the margin call TO the investor was not carried out. Had it been this would forum would merely be discussing the merits of a model that saw thousands of investors have to make decisions regarding margins at a very late stage because of the high LVR (maybe to high). It may also be discussing the investors who were sold the idea of a margin call but not given advice as to how to maintain a pool of funds to meet it, if it came. The storm investment model would probably be analysed around this high LVR and not much else, and also the ability of investors to meet it. Rather the discussion is now for many, who made the call, when and to whom, What were the contractual obligations of all the parties and were these carried out. 

The issue for the courts is not whether the investor could have met the call if they recieved it. It is in determining if the contract was broken in not issueing the client directly with the call in the first place. Everything after this is speculation and this was supported in the recent Macquarie decision.

This lies at the heart of my personnal frustration with ASIC, if they were doing their job effectiely, and efficiently in terms of their investigation then there  may not be a need for the victims to seek legal advice or seek a legal remedy as ASIC would be doing this for them in a timely manner. There would be nothing fo the vultures to feed on.  Even slater and gordon have stated that they investigated the prospect of a class action but decided on the resoultion process instead as a more timely and efficient matter. I dont think they minded the headlins at the time about a "ground breaking new process". I dont recall them stating publicly that they didnt feel a class action would win, just that the resolution process was more timely.

If there is no fault in what the CBA have done then so be it, let them payout victims as part of a resolution scheme just for the fun it. If there is an issue that ASIC are aware of with regards to anyone then this needs to be bought into the public forum. This way current investors and clients / customers (of the CBA inparticular) are aware of what has gone on, can make their own judgement and then make informed decisions about whether to continue using this company. To me this is beginning to reak of "the banks are to big to fail". For ASIC to seek a "commercial resolution" may ?? help the current investors but does little to expose the practices the required a "commercial resolution". This resolution is surely not about getting anything from storm, they are insolvent, so ask yourself who possibly could this commercial agreement pertain to...... CBA, BOQ, Macquarie.... Either ASIC has something and should be disclosing it or they have nothing in which case this should also be made public. The shroud of secrecy is doing nothing for their credability, nor the banks for that matter.


----------



## DocK (7 July 2010)

Julia said:


> Sorry, but I just don't get how anyone can think they can buy something on the basis of a loan against their home and not consider that there is any risk.
> 
> I am not at all imagining that every Storm client had similar levels of financial or other education, or similar motives.
> I'm simply saying they engaged in a risky strategy.
> ...




Julia,

I didn't suggest you should stop posting on this forum - I'm quite sure there is no power on earth that could prevent you from sharing your opinions in this way - I merely point out that you have said it all before, and the repetition leaves some readers less than entertained.  Your opinions have been stated quite clearly and prolifically - and your opinion of what is an acceptable level of risk and what is too much is just that - only your opinion.  I have no problem acknowledging that my investment strategy carried a level of risk - what irks me is reading over and over again your opinion which seems to be basically risk = wrong.  I'd imagine that most members of ASF have taken risks in an effort to create wealth - isn't that what most members are aiming for?  You just seem to be particulary condemning of anyone whose tolerance for risk is not what you deem to be appropriate - and it comes off as both intolerant and condescending.  You also seem to have a great deal of trouble grasping the idea that just because ex-storm clients engaged in financial dealings that carried various levels of risk (which may or may not have been appropriate for their individual circumstances - your opinion notwithstanding) - does not mean that they should not be entitled to any compensation if lenders did not behave legally/ethically.  You don't seem able to separate the two disparate issues.  

Please feel free to post away - I for one would simply be more energised to read something new...


----------



## Julia (7 July 2010)

specialed said:


> Julia, I appoligise for repeating the above message but my computer decided to blow up before I had finished editing.



Specialed, no problem.  Thank you for your civil and reasonable remarks.



> Julia,
> 
> Ammended message below
> 
> I dont think all of the investors believed the were entering into a risk free scheme. However, they believed the risk associated with the margin loans (coupled with the margin call if used as they believed it would be) was worth the return.



OK. You're acknowledging the risk.  That's all I'm talking about.  There have been Storm investors who have said they believed they were engaging in a risk free scheme.



> For many it proved an effective way to enter into retirement and was used over a considerable period of time.



Sure.  As long as the market was rising, it was a great strategy.



> Im sure not all investors now think this however many did, hence the issue with the margin call. Inherent in the choice of any strategy, and albeit the associated risk is the ability to manage and control what is happening. For storm investors (at least those who understood the model and risk) taking away their ability to deal with the margin call lies at the heart of this matter.



I absolutely understand this, and have previously said that if the providers of the margin loans failed in their obligations they should compensate the clients.
For much of this discussion it seemed unclear whose responsibility it was to advise the clients re the margin call.




> As I stated early, this forum is a great place for reflecting on the storm model. But how can it be analysed properly if a key apect of it, the activation of the margin call TO the investor was not carried out. Had it been this would forum would merely be discussing the merits of a model that saw thousands of investors have to make decisions regarding margins at a very late stage because of the high LVR (maybe to high). It may also be discussing the investors who were sold the idea of a margin call but not given advice as to how to maintain a pool of funds to meet it, if it came. The storm investment model would probably be analysed around this high LVR and not much else, and also the ability of investors to meet it. Rather the discussion is now for many, who made the call, when and to whom, What were the contractual obligations of all the parties and were these carried out.



Again, completely fair and reasonable comment.



> The issue for the courts is not whether the investor could have met the call if they recieved it. It is in determining if the contract was broken in not issueing the client directly with the call in the first place. Everything after this is speculation and this was supported in the recent Macquarie decision.



So this sounds as though it's still not completely clear who was responsible for communicating with the client in event of a margin call?




> This lies at the heart of my personnal frustration with ASIC, if they were doing their job effectiely, and efficiently in terms of their investigation then there  may not be a need for the victims to seek legal advice or seek a legal remedy as ASIC would be doing this for them in a timely manner. There would be nothing fo the vultures to feed on.



Couldn't agree more.   ASIC has been shown to be pretty much useless over a variety of instances.



> Even slater and gordon have stated that they investigated the prospect of a class action but decided on the resoultion process instead as a more timely and efficient matter. I dont think they minded the headlins at the time about a "ground breaking new process". I dont recall them stating publicly that they didnt feel a class action would win, just that the resolution process was more timely.
> 
> If there is no fault in what the CBA have done then so be it, let them payout victims as part of a resolution scheme just for the fun it.



The CBA has already admitted that they were at fault to some degree, haven't they?



> If there is an issue that ASIC are aware of with regards to anyone then this needs to be bought into the public forum. This way current investors and clients / customers (of the CBA inparticular) are aware of what has gone on, can make their own judgement and then make informed decisions about whether to continue using this company. To me this is beginning to reak of "the banks are to big to fail". For ASIC to seek a "commercial resolution" may ?? help the current investors but does little to expose the practices the required a "commercial resolution". This resolution is surely not about getting anything from storm, they are insolvent, so ask yourself who possibly could this commercial agreement pertain to...... CBA, BOQ, Macquarie.... Either ASIC has something and should be disclosing it or they have nothing in which case this should also be made public. The shroud of secrecy is doing nothing for their credability, nor the banks for that matter.



Agree.



DocK said:


> Julia,
> 
> I didn't suggest you should stop posting on this forum - I'm quite sure there is no power on earth that could prevent you from sharing your opinions in this way - I merely point out that you have said it all before, and the repetition leaves some readers less than entertained.



Just as you have expressed your same responses to me repetitively.



> Your opinions have been stated quite clearly and prolifically - and your opinion of what is an acceptable level of risk and what is too much is just that - only your opinion.  I have no problem acknowledging that my investment strategy carried a level of risk - what irks me is reading over and over again your opinion which seems to be basically risk = wrong.



No.  You are once again twisting what I have said.  I do believe that risk/leverage is a very useful strategy in younger age groups, but I do not believe it was appropriate for retirees.   I have said this many times, and you keep misinterpreting or misrepresenting it.



> You also seem to have a great deal of trouble grasping the idea that just because ex-storm clients engaged in financial dealings that carried various levels of risk (which may or may not have been appropriate for their individual circumstances - your opinion notwithstanding) - does not mean that they should not be entitled to any compensation if lenders did not behave legally/ethically.  You don't seem able to separate the two disparate issues.



That is simply incorrect.   I have on more than one occasion agreed that CBA or any other institution which failed to honour its contractual obligations should be obliged to compensate those clients.

That is a completely separate issue from whether or not there is risk for a retiree in borrowing against their home to a high LVR.




> Please feel free to post away - I for one would simply be more energised to read something new...



As I would be to read something new from you, especially if it did away with the misrepresentation of what I have said.


----------



## irish joe (7 July 2010)

Julia said:


> Sorry, but I just don't get how anyone can think they can buy something on the basis of a loan against their home and not consider that there is any risk.
> 
> I am not at all imagining that every Storm client had similar levels of financial or other education, or similar motives.
> I'm simply saying they engaged in a risky strategy.
> ...




point taken Julia. 

If I have caused offence then I apologise. I was not "labelling" you as anything in the above post and if that was the impression then I am truly sorry.


----------



## Julia (7 July 2010)

irish joe said:


> point taken Julia.
> 
> If I have caused offence then I apologise. I was not "labelling" you as anything in the above post and if that was the impression then I am truly sorry.




That's very nice of you, irish joe, and very much appreciated.

I guess I've spent many years trying to support people who have made poor life decisions, learning nothing from previous mistakes, to the point that I had to leave the work to someone still capable of idealism.

I worry, too, that we are increasingly living in the age of the nanny state where there is the expectation that governments will 'fix' everything that human beings get wrong, to the point where personal responsibility becomes an unusual trait.

As a consequence, I'm likely more titchy in my criticisms than I should be.

My refusal to agree that borrowing to invest for retired people is safe should not be seen as a lack of understanding for the misery many Storm investors are suffering.   I sincerely hope an acceptable outcome for everyone may be possible.

Importantly, as specialed has suggested, is that some sort of apportionment of blame should be specified by ASIC.  However, given their woeful performance so far, I wouldn't be holding my breath.

Thank you again for your post.


----------



## irish joe (7 July 2010)

Julia said:


> That's very nice of you, irish joe, and very much appreciated.
> 
> I guess I've spent many years trying to support people who have made poor life decisions, learning nothing from previous mistakes, to the point that I had to leave the work to someone still capable of idealism.
> 
> ...




Thanks Julia. I meant it when I said I had read every one of your posts and a lot of what you say makes very good sense. I also found it hard to believe that storm investors couldn't understand the risks, but my point was having spoken to many of them, they genuinely believed that the risk was mitigated or indeed there was no risk?? and were sold a dream that was totally beyond the comprehension of so many of them.


----------



## Judd (8 July 2010)

irish joe said:


> I also found it hard to believe that storm investors couldn't understand the risks, but my point was having spoken to many of them, they genuinely believed that the risk was mitigated or indeed there was no risk?? and were sold a dream that was totally beyond the comprehension of so many of them.




It is truly sad.  It's very hard to tell people that if a retired couple aged 65 with no dependents, owned their home and have $1M in superannuation and no other income, those people would be in the top 5% of their demographic group.   In other words, 95% ain't gonna make it and it's probable that you're one of those.  That's a difficult sell and so it is no wonder that many storm clients fell for the dream.


----------



## Solly (9 July 2010)

*"Storm client acquisition on track
Educational seminars on offer to clients"*

"Financial Index will make its final payment on the client book of collapsed firm Storm Financial."

Storm client acquisition on track
Educational seminars on offer to clients

More by Julie May in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9617.htm


----------



## Solly (10 July 2010)

*"Rival Storm lawyers clash"*

"Law firm Slater & Gordon has warned Storm Financial victims that they could lose the benefits of a loan payment freeze if they join a class action against the Commonwealth Bank in the Federal Court."

Scattini offers warning on Levitt's approach.

Read more by Anthony Marx on Business page 71 of The Courier Mail Weekend Edition July 10-11, 2010.


----------



## Solly (11 July 2010)

*"CBA hits out at law firm"*

"ABOUT 400 victims of the Storm Financial disaster have been told to get a new lawyer after the Commonwealth Bank this week sought to ban Sydney law firm Levitt Robinson from representing clients in its dispute resolution scheme."

Dr. Brendan French is disappointed.

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/07/10/153291_news.html


----------



## specialed (11 July 2010)

Solly said:


> *"Rival Storm lawyers clash"*
> 
> "Law firm Slater & Gordon has warned Storm Financial victims that they could lose the benefits of a loan payment freeze if they join a class action against the Commonwealth Bank in the Federal Court."
> 
> ...




What a surprise, one lot of lawyers warning former storm clients of the actions of another lot of lawyers.  If Scattini and co were doing a better job in this debarcle then these people may not be seeking the services of other law firms.

It would appear the CBA is doing all they can to draw this whole mess out, ensuring that one by one clients are forced to accept the offers. The sooner this mess goes before a real court the better for all involved....


----------



## Grey Ghost (11 July 2010)

specialed said:


> What a surprise, one lot of lawyers warning former storm clients of the actions of another lot of lawyers.  If Scattini and co were doing a better job in this debarcle then these people may not be seeking the services of other law firms.
> 
> It would appear the CBA is doing all they can to draw this whole mess out, ensuring that one by one clients are forced to accept the offers. The sooner this mess goes before a real court the better for all involved....




This whole saga is getting messier by the day.  (And almost certainly more expensive for those involved).

Apart from all the crossfire between law firms and the Comm. Bank does anyone know what the situation is with the other banks involved ie. BOQ, Macbank, ANZ and whoever else?

Between them I'm sure they would have hundreds of storm investors and I'm wondering what has or is happening with them?  They all appear to be under the radar at the moment.
Anybody know anything about their situation?


----------



## Solly (12 July 2010)

*"FPA hits back at Storm allegations
Kangaroo court approach"*

"The association has defended a number of allegations made by a former Storm Financial adviser."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/9621.htm


----------



## Solly (12 July 2010)

*"ATO helps with Storm Financial fallout"*

"The collapse of Storm Financial Limited has been cited among the reasons the Australian Taxation Office (ATO) has provided specialist assistance to businesses and individuals in the Cairns area."

More by Mike Taylor in Money Management here;

http://www.moneymanagement.com.au/article/ATO-helps-with-Storm-Financial-fallout/520195.aspx


----------



## Solly (13 July 2010)

*"Pressure builds in Storm Financial resolution scheme"*

"The Sydney law firm bringing a class action against the Commonwealth Bank of Australia (CBA) on behalf of Storm Financial clients has asserted the bank is trying to exclude the firm from participating in the resolution scheme being jointly run by the CBA and Slater & Gordon."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/article/Pressure-builds-in-Storm-Financial-resolution-scheme/520264.aspx


----------



## Solly (15 July 2010)

Just wondering when ASIC will have something else to say about their investigations and findings.
It must not be too far away....


----------



## chrisgee (16 July 2010)

i thought i'd drop by again-its amazing that this is still dragging on i really really wonder if the real crims behind all of this will ever be bought to justice-i read where gg said that the only people that will make money out of this will be the lawyers-maybe hey-yeah i wonder as well if asic will be able to do anything to help out either-now we have lawyers fighting-who the hell is right???? hiow the hell do ordinary folk know which way to turn-i wonder how many people that have accepted the s&g cba resolution are really happy or were just too damn broken to fight on-this whole damn thing is takijng a real bad toll on stormies if only those sitting on there shiny bums in the office towers really knew what it is like, sickness, despair, fighting in families-theres been alot of crying even from those you think are strong-i dont know who is wrong but i still ask how the hell did this all happen-


----------



## Solly (19 July 2010)

*"CBA faces new Storm claims
Bank's actions unlawful"*

"The bank is facing claims it moved to terminate an agreement with a litigation firm linked to its Storm resolution scheme."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/9669.htm


----------



## Solly (27 July 2010)

*"Storm adviser found in breach
Evidence linked through complaint"*

"A former Storm Financial adviser has breached a number of FPA conduct codes."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/9710.htm


----------



## Solly (27 July 2010)

*"ASIC turns torch on to legality of Storm Financial mode"*

"FAILED Storm Financial and associated parties may have broken the law by promoting an unregistered managed investment scheme, according to the nation's corporate watchdog.

Company executives and lenders who spruiked the Storm model could also have acted in an "unconscionable" way."

More by Anthony Marx in The Courier Mail here;

http://www.couriermail.com.au/business/asic-turns-torch-on-to-legality-of-storm-financial-model/story-e6freqmx-1225897178924


----------



## Solly (27 July 2010)

*"ASIC investigation update
Storm Update 23 July 2010"*

"....key points ASIC made to Mark Weir and Noel O’Brien (joint chairmen of SICAG) on 21 July 2010 in Brisbane by way of an update of the investor compensation aspects of ASIC's investigation into Storm."

Read the whole ASIC update here;
https://storm.asic.gov.au/storm/storm.nsf/byheadline/ASICInvestigationUpdate?opendocument


----------



## DocK (27 July 2010)

There have been several sections of road being "worked on" near my home for several weeks now - with very little change apparent for some time.  I've been wondering if the roadworks will ever actually be finished.   Indeed, every time I drive past I note the usual situation of several "workers" standing about scratching themselves or yawning and perhaps one in five actually doing something useful.

I have a feeling that ASIC would make the above roadworkers look like very busy bees in comparison


----------



## Solly (28 July 2010)

*"Storm probe drags on after 20 months"*

"THE Australian Securities and Investments Commission says it is still investigating a commercial resolution to the Storm Financial collapse on behalf of 3000 investors who lost $3 billion."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/07/24/157321_news.html


----------



## specialed (28 July 2010)

Solly said:


> *"Storm probe drags on after 20 months"*
> 
> "THE Australian Securities and Investments Commission says it is still investigating a commercial resolution to the Storm Financial collapse on behalf of 3000 investors who lost $3 billion."
> 
> ...




And as ASIC drags it feet, as does the CBA,  slowly through attrition forcing storm investors to take the woefully inadequate offers as they have no other options.....


----------



## Garpal Gumnut (28 July 2010)

Solly said:


> *"ASIC investigation update
> Storm Update 23 July 2010"*
> 
> "....key points ASIC made to Mark Weir and Noel O’Brien (joint chairmen of SICAG) on 21 July 2010 in Brisbane by way of an update of the investor compensation aspects of ASIC's investigation into Storm."
> ...





re SICAG

Does anyone know if Mark Weir and Noel O'Brien are joint-Chairmen for life, or do SICAG have elections from time to time e.g yearly to re-elect office bearers? 

Also, does the committee change its membership at any time and would Manny Cassimatis be eligible for membership or Chairman of the committee as he says he has lost more than anyone else in all this saga?

gg


----------



## specialed (29 July 2010)

Garpal Gumnut said:


> re SICAG
> 
> Does anyone know if Mark Weir and Noel O'Brien are joint-Chairmen for life, or do SICAG have elections from time to time e.g yearly to re-elect office bearers?
> 
> ...




I believe they had elections earlier this year but could be wrong..why do you ask ?


----------



## maccka (29 July 2010)

Garpal Gumnut said:


> re SICAG
> 
> Does anyone know if Mark Weir and Noel O'Brien are joint-Chairmen for life, or do SICAG have elections from time to time e.g yearly to re-elect office bearers?
> 
> ...




Hi GG,

SICAG held its Annual General Meeting on 19 June 2010.  Noel and Mark were re-elected.  Some positions in the committee changed but the newly  elected committee is very similar.

Manny is not a member so he can't be the Chairman.

Cheers
Maccka


----------



## Garpal Gumnut (29 July 2010)

specialed said:


> I believe they had elections earlier this year but could be wrong..why do you ask ?




Plain curiosity. the members must be happy with their performance.

gg



maccka said:


> Hi GG,
> 
> SICAG held its Annual General Meeting on 19 June 2010.  Noel and Mark were re-elected.  Some positions in the committee changed but the newly  elected committee is very similar.
> 
> ...




Thanks mate, how many ex-Storm clients are members, or is everyone bitten, bar Manny, a member? 

gg


----------



## Solly (5 August 2010)

I hear that there are some interesting rumblings happening on the Storm front.
I better tweak the gain on the dish so I don't miss anything.


----------



## zzz (5 August 2010)

What do you mean Solly?


----------



## Garpal Gumnut (5 August 2010)

Solly said:


> I hear that there are some interesting rumblings happening on the Storm front.
> I better tweak the gain on the dish so I don't miss anything.






zzz said:


> What do you mean Solly?




Manny is looking well though, and my mole in Casa Cassimatis says all the troops have the vigour of Thermopylae. I saw him in a State Capital the other day. I'm unable to say anymore.

gg


----------



## Solly (5 August 2010)

Garpal Gumnut said:


> Manny is looking well though, and my mole in Casa Cassimatis says all the troops have the vigour of Thermopylae. I saw him in a State Capital the other day. I'm unable to say anymore.
> 
> gg




gg, I am amazed at the depth of the intelligence you have gathered. Reminds me of the modus operandi of an old associate with clandestine connections to the former JIO. Maybe I have really met you previously.

I was recently invited to a celebratory function in Grassdale Rd and I considered it to be polite to present a gift to the host. I dropped into McGuires Bottle Shop at Cannon Hill Plaza to pick up a fine red. 

From the corner of my eye I'm sure I noticed a familiar portly silhouette hastily loading green shopping bags into the back of a Ford Explorer. 

Maybe it is time to stock the panic room. Am I getting warm ?


----------



## Solly (11 August 2010)

Ralph Norris states that 70% of the outstanding cases regarding the collapse of Storm have been settled.

Read more in Business Spectator here;

http://www.businessspectator.com.au/bs.nsf/Article/Rates-could-rise-says-CBA-chief-pd20100811-8882D?OpenDocument


----------



## Solly (12 August 2010)

*"CBA reaches nogitated settlement with 70% of its customers hit by Storm Financial collapse"*

CBA chief executive Ralph Norris declined to specify yesterday how much money had been paid out so far in the resolution scheme to the investors, believed to number around 1800.

Read more by Anthony Marx in The Courier Mail here;

http://bit.ly/aNbVzN


----------



## Solly (13 August 2010)

*"Storm class lawyers attack CBA boss"*

"A law firm says comments by the Commonwealth Bank of Australia (CBA) that the firm declined to accept test cases put forward to help settle a class action brought by Storm Financial victims are false and pressure clients to settle on the cheap."

More from AAP on NineMSN here;

http://news.ninemsn.com.au/article.aspx?id=7944860


----------



## Solly (17 August 2010)

*"CBA rejects Storm breach claims
Litigator vents in open letter to Norris"*

"CBA has denied confidential details of a resolution agreement with a Storm litigator were revealled in a newspaper interview."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/9890.htm


----------



## chrisgee (17 August 2010)

Solly said:


> *"ASIC investigation update
> Storm Update 23 July 2010"*
> 
> "....key points ASIC made to Mark Weir and Noel O’Brien (joint chairmen of SICAG) on 21 July 2010 in Brisbane by way of an update of the investor compensation aspects of ASIC's investigation into Storm."
> ...




i'm just wondering what asic is up too. just checking things out on their website the silence is deafening. nothing moves fast does it. the stormies i know have had a gut full and thats being polite


----------



## Ironhalo (17 August 2010)

http://www.heraldsun.com.au/busines...to-storm-victims/story-e6frfh4f-1225771264465

Enjoy.


----------



## Solly (19 August 2010)

*" 'No end in sight' for Storm investigation"*

"A TEAM of up to 50 people including some of the country's highest paid silks are beavering away on an investigation into failed Townsville wealth adviser Storm Financial more than 20 months after its collapse."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/08/19/163991_news.html


----------



## Solly (19 August 2010)

*"Storm Financial report has stalled: economist"*

'A north Queensland economist (Cary Ramm) says a report into the failed Storm Financial still has not been released, six months after the Australian Securities and Investments Commission (ASIC) was to complete it.'

More by Penny Timms on the ABC here;

http://www.abc.net.au/news/stories/2010/08/19/2987689.htm


----------



## pegasus (19 August 2010)

Ironhalo said:


> http://www.heraldsun.com.au/busines...to-storm-victims/story-e6frfh4f-1225771264465
> 
> Enjoy.




this article is nearly 12 months old .................... what was the point of listing it?


----------



## Solly (27 August 2010)

*"SICAG members lobby independents
Renewed calls for royal commission"*

"SICAG has moved to lobby the three independent members of parliament over its Storm Financial concerns."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/9971.htm


----------



## Solly (30 August 2010)

*	"Storm investors in dark as bank action ramps up
Dusted off their hands"*

"A raft of new investor actions against banks involved in the Storm Financial collapse are in the wing"

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/9973.htm


----------



## Garpal Gumnut (30 August 2010)

It would be interesting to see the votes on the composition of SICAG's Committee in the recent elections.

Numbers of members who voted.

Those who voted for the various positions on the committee, and the total number of members who voted.

The names of the present committee members, and the number of votes they attracted.

I am quite sure this would be easily posted, as SICAG have a history of nothing to hide.

gg


----------



## Solly (31 August 2010)

Garpal Gumnut said:


> It would be interesting to see the votes on the composition of SICAG's Committee in the recent elections.
> 
> Numbers of members who voted.
> 
> ...




gg, I am wondering how the SICAG members are holding up throughout this saga. I wonder if those who have accepted the Resolution Scheme offers are truely happy or reluctlantly accepted as to add some type of closure. 
I am eagerly awaiting the next public statement from ASIC.


----------



## Garpal Gumnut (31 August 2010)

Solly said:


> gg, I am wondering how the SICAG members are holding up throughout this saga. I wonder if those who have accepted the Resolution Scheme offers are truely happy or reluctlantly accepted as to add some type of closure.
> I am eagerly awaiting the next public statement from ASIC.




from my limited knowledge, the ones who have accepted via Scattini seem to be getting on with their lives, though many are back at work, and miss their retirement, but are stoic about it. 

I do not know anyone who went with Manny and the other Lawyers.

gg


----------



## Solly (1 September 2010)

Garpal Gumnut said:


> from my limited knowledge, the ones who have accepted via Scattini seem to be getting on with their lives, though many are back at work, and miss their retirement, but are stoic about it.
> 
> I do not know anyone who went with Manny and the other Lawyers.
> 
> gg




Yes I agree, stoic is the word I would use to describe the Stormers that I know who have accepted the Scattini/Norris model.
I'm very interested to see the outcomes of the Levitt action.  In the back of my mind I can't help thinking that there must be some solid basis for Sergeant Sean's choice of action.
I wonder what he has up his sleeve or what other evidence he has stowed in the back of his Hi-Lux.  
He appears to me to be very motivated and persistent. 
The last thing the banks or the other parties involved in this debacle need is a focused, determined, angry copper hot on their heels seeking justice.


----------



## sailteam30 (2 September 2010)

I would also like to know progress with the other banks (eg NAB, ANZ, BofQ, Macquarie) - as my loan was with Macquarie and they are off the radar at the moment.

Another question - ASIC do not seem to be making progress, last report on there website was in July.

Looks like I will need to keep my business going and investing in my sons schools in Vietnam - no more "Financial Planners" for me - I will do it myself.


----------



## Solly (3 September 2010)

ASIC chairman Tony D'Aloisio...
"For example, Storm Financial is one of the most complex cases I have come across in my 30-year experience, much of which was as a commercial lawyer,"

Read more by Damon Kitney in The Australian here;

http://www.theaustralian.com.au/business/asic-to-get-tough-on-credit-providers/story-e6frg8zx-1225913508328


----------



## specialed (5 September 2010)

Garpal Gumnut said:


> It would be interesting to see the votes on the composition of SICAG's Committee in the recent elections.
> 
> Numbers of members who voted.
> 
> ...




In my absence from this forum it is good to see you still havent let go of this thorn in your side GG. Why the interest, did you intend to nominate ? 

I wish you had persued some of the other parties with such interest and vigour..


----------



## specialed (5 September 2010)

Solly said:


> Yes I agree, stoic is the word I would use to describe the Stormers that I know who have accepted the Scattini/Norris model.
> I'm very interested to see the outcomes of the Levitt action.  In the back of my mind I can't help thinking that there must be some solid basis for Sergeant Sean's choice of action.
> I wonder what he has up his sleeve or what other evidence he has stowed in the back of his Hi-Lux.
> He appears to me to be very motivated and persistent.
> The last thing the banks or the other parties involved in this debacle need is a focused, determined, angry copper hot on their heels seeking justice.




The basis for the levitt action is the same as that of ASIC, its just the ASIC case can only be described as IN-ACTION...

The banks are dragging their feet in all of this, as you would expect. Hoping that eventually their will be no fight, or capacity to fight left in any of the members.  This is a good ploy, until of course a settlement is made against them. Then the "pain and suffering" element of any compensation, as well as the potential for lost earnings is made in the determination. Then the months or years of stalling comes back to bight them......Think of compensation for the pain and suffering for someone who loses their home, IF it is found they only lost it because of the actions of one bank...which Bank.....


----------



## SJG1974 (6 September 2010)

specialed said:


> The basis for the levitt action is the same as that of ASIC, its just the ASIC case can only be described as IN-ACTION...
> 
> The banks are dragging their feet in all of this, as you would expect. Hoping that eventually their will be no fight, or capacity to fight left in any of the members.  This is a good ploy, until of course a settlement is made against them. Then the "pain and suffering" element of any compensation, as well as the potential for lost earnings is made in the determination. Then the months or years of stalling comes back to bight them......Think of compensation for the pain and suffering for someone who loses their home, *IF* it is found they only lost it because of the actions of one bank...which Bank.....




A mighty big *if* which again seems to overlook the role the promoters of the entire scheme played in this, them being the Cassimatii and their advisers....

Has any legal action been taken against the real perpetrators in this, Manny and his team who geared everyone up to the hilt and didn't monitor the portfolios as closely as they said they would in the prospectus?  7% fees to gear people up over and over again....just what were these fees paying for, other than Manny's real estate portfolio and his private jet?

But yes, it was those nasty banks who were at fault.


----------



## DocK (6 September 2010)

SJG1974 said:


> A mighty big *if* which again seems to overlook the role the promoters of the entire scheme played in this, them being the Cassimatii and their advisers....
> 
> *Has any legal action been taken against the real perpetrators in this, Manny and his team who geared everyone up to the hilt and didn't monitor the portfolios as closely as they said they would in the prospectus?  7% fees to gear people up over and over again....just what were these fees paying for, other than Manny's real estate portfolio and his private jet?*
> But yes, it was those nasty banks who were at fault.




my bolds

This is what I, and I daresay quite a few others, am waiting to discover, via ASIC - if they can ever actually finalise their investigations.  I assume any criminal charges against Manny & Julie would be laid by ASIC - and the lack of any action of note from ASIC is becoming increasingly frustrating.


----------



## Judd (6 September 2010)

A bit off beat but no matter what the outcome, the majority of individuals involved with Storm Financial will still lose.

Reasoning?  It is highly unlikely they will recover from the emotional trauma irrespective of whether or not they get any money back.

Personally, I don't give a toss which way it goes as I am not involved in this farrago, and nor are (based on EC's evidence at the Parliamentary Inquiry - he did say that "only" 25% who attended the Storm forums actually signed up) the 75% who walked away from the all singing, all dancing EC show.  That equates to around 12,000 wise FNQ investors.  So does that mean that the vast majority of FNQ investors not as stupid as wet-backs attempt to make them out to be?


----------



## specialed (6 September 2010)

SJG1974 said:


> A mighty big *if* which again seems to overlook the role the promoters of the entire scheme played in this, them being the Cassimatii and their advisers....
> 
> Has any legal action been taken against the real perpetrators in this, Manny and his team who geared everyone up to the hilt and didn't monitor the portfolios as closely as they said they would in the prospectus?  7% fees to gear people up over and over again....just what were these fees paying for, other than Manny's real estate portfolio and his private jet?
> 
> But yes, it was those nasty banks who were at fault.




I agree it is a very big IF...., which may never have its day in court..In terms of Manny, ASIC appear to be very quiet on the whole Manny part of this...It is ASIC of course who would prosecute any parties if breaches of the law are found and this would include Manny. Surely the "commercial resolution" they refer to does not include Manny and Co...One can only assume that they are as scared to take on him as they are to take on the banks....One bitten and all that......


----------



## Ironhalo (6 September 2010)

Specialed, I really don't see why you continue to denigrate or question anyone who doesn't place 100% of the blame on the banks. Let me make this clear, and as someone mentioned a few posts ago, this is how it all went down (and yes I was a Storm investor....who came to my senses and got out before it all hit the fan at a loss...but a minimal one):

*Storm, namely Manny and Julie promised that for their now retrospective extortionate 7% fees to buy you shares in the ASX200 (something we all could have negotiated to do with Comsec ourselves for free), they would monitor your investment using a program they called 'Ignite'. This of course was bull****. When the GFC hit, they collectively, realising that selling everyone down would cost them ongoing profit, decided to simply ratchet up existing margin loans by recommending to scared and vulnerable uneducated investors to buy more shares that they couldn't afford, using their houses and retirement funds as the wager. *

That's it....simplified and epitomised.

Blaming the banks for all of this is akin to suing the owner of the corner store you bought your cigarettes off for getting lung cancer, while extolling the virtue of the company that made the cigarettes to begin with and stating 'they never meant to hurt their customers'....either that or the corner store owner is easier to get money out of in the interim, regardless of guilt.

The vast majority of Storm investors have made peace with the fact that they made errors of judgement, and have gotten on with their lives without complaint. I should know, my whole family was in it.


----------



## Solly (7 September 2010)

Ironhalo said:


> Specialed, I really don't see why you continue to denigrate or question anyone who doesn't place 100% of the blame on the banks. Let me make this clear, and as someone mentioned a few posts ago, this is how it all went down (and yes I was a Storm investor....who came to my senses and got out before it all hit the fan at a loss...but a minimal one):
> 
> *Storm, namely Manny and Julie promised that for their now retrospective extortionate 7% fees to buy you shares in the ASX200 (something we all could have negotiated to do with Comsec ourselves for free), they would monitor your investment using a program they called 'Ignite'. This of course was bull****. When the GFC hit, they collectively, realising that selling everyone down would cost them ongoing profit, decided to simply ratchet up existing margin loans by recommending to scared and vulnerable uneducated investors to buy more shares that they couldn't afford, using their houses and retirement funds as the wager. *
> 
> ...




What I am eagerly awaiting is to see whether there has been any proven impropriety or criminal behaviour by any parties involved in this debacle.

Another media release from ASIC is welcomed.

The Stormers that I know are attempting to piece their lives together and move on. But the toll that this event has taken on their wellbeing is blatantly visible and disturbing.

I was with them when this advert aired on the box. 

Understandably their reaction was quite extreme.

http://www.youtube.com/watch?v=NdRSimvvzaQ


----------



## specialed (7 September 2010)

Ironhalo said:


> Specialed, I really don't see why you continue to denigrate or question anyone who doesn't place 100% of the blame on the banks. Let me make this clear, and as someone mentioned a few posts ago, this is how it all went down (and yes I was a Storm investor....who came to my senses and got out before it all hit the fan at a loss...but a minimal one):
> 
> *Storm, namely Manny and Julie promised that for their now retrospective extortionate 7% fees to buy you shares in the ASX200 (something we all could have negotiated to do with Comsec ourselves for free), they would monitor your investment using a program they called 'Ignite'. This of course was bull****. When the GFC hit, they collectively, realising that selling everyone down would cost them ongoing profit, decided to simply ratchet up existing margin loans by recommending to scared and vulnerable uneducated investors to buy more shares that they couldn't afford, using their houses and retirement funds as the wager. *
> 
> ...




Ironhalo,

I have NEVER blamed the banks for all this, nor have I denigrated those who also don’t blame the banks.  However, For your information I believe you have the metaphor back to front. The "cornerstore" in this situation is Storm, the company that made the cigarettes is the banks. Much of the investigations and possible litigation now centres on whether these were infact managed funds operated by the banks.  So infact it is the role of ASIC to determine exactly what the relationship was...

If this whole situation is so simple as you put it, why is it taking so long to sort out ? Why are the banks paying compensation ? why is ASIC apparently involved seeking a commercial resolution to this affair ? presumably with the banks.  What I have consistently stated is I believe this needs to go to court to get sorted out. That includes any banks and also Manny and co. There is no doubt both of these parties are doing all they can to avoid this getting to the courts. The banks to avoid potential claims beyond their compensation scheme and Manny to avoid jail time. This is not just about compensation, it is about understanding where responsibility lies for this mess. 

In the only determination on this matter, in Brisbane, Oh so long ago it was noted that blamed may lay with all three parties. Since then no one, banks, Manny or ASIC have been near a court. The CBA in particular have fought this. Their pockets are deep and if they felt they were clean this could have been solved long ago in the courts. Thereis no doubt they are implicated just as deeply as Manny. However, they are impicated in differant matters. Manny for their marketting, advice, fees etc.. The banks for how they executed the sell off...that is margin call, as well as their role in the inflated loans etc. In this respect I suspect theyare all guilty...there are just many and varied things that all the parties are guilty of..


If ASIC trully believe that a commercial resolution to this process is best for storm investors then they have rocks in their heads.  And what about those involved in inappropriate behaviour. They should have those actions aired publicly. As an investor, and customer of many financial institutions I have a right to know if said institutions have acted a) unethically, b)immorally, c) illegally.

So please go back and read my previous posts and find where I have said the banks are solely to blame for this, please also find where I have attacked those who do not blame the banks 100%. What you will find is that I do disagree with those who seem to ignore the banks culpability in this.....and those who appear to repeatedly have issues with the role of SICAG...That I just dont understand...It would appear to me that if the members of SICAG had an issue with how that support group was being run, then they would simply not continue to be members.


----------



## specialed (7 September 2010)

Ironhalo said:


> *Storm, namely Manny and Julie promised that for their now retrospective extortionate 7% fees to buy you shares in the ASX200 (something we all could have negotiated to do with Comsec ourselves for free), they would monitor your investment using a program they called 'Ignite'. This of course was bull****. When the GFC hit, they collectively, realising that selling everyone down would cost them ongoing profit, decided to simply ratchet up existing margin loans by recommending to scared and vulnerable uneducated investors to buy more shares that they couldn't afford, using their houses and retirement funds as the wager. *
> 
> That's it....simplified and epitomised.





Further,

Thanks for your clear and consise, "simple and epitomised"  account of how this all happned. I will be sure to forward this explanation on to the CBA, Bernie Rippol, Slater and Co, ASIC and SICAG and anyone else who needs to know. Everyone will of course be extremely  gratefull that someone has finally described what we all thought was a complex affair, so simply.  

Finally this mess can now be sorted.....


----------



## Solly (7 September 2010)

*"Storm Financial claims settled by year's end: lawyers"*

"The lawyers representing hundreds of investors from the 2008 Storm Financial collapse say all claims brought to them will be finalised before the end of the year."

More on the ABC here;

http://www.abc.net.au/news/stories/2010/09/07/3005206.htm


----------



## Solly (7 September 2010)

*"Storm Financial settlements being finalised"*

"MORE than 900 of the 1120 claims lodged with a legal firm by victims of the 2008 Storm Financial collapse have been finalised."

More from AAP on News.com.au here;

http://www.news.com.au/business/breaking-news/storm-financial-settlements-being-finalised/story-e6frfkur-1225915362825?area=business-sub-one


----------



## Ironhalo (7 September 2010)

Specialed. It's exactly what happened. You (we) were financially raped by a rogue who tag-teamed you with a bank who provided them the fiscal condoms to do so.

Without lubricant.


----------



## Garpal Gumnut (7 September 2010)

> . Specialed
> 
> 
> 
> those who appear to repeatedly have issues with the role of SICAG...That I just dont understand...It would appear to me that if the members of SICAG had an issue with how that support group was being run, then they would simply not continue to be members.





1. They by definition are unsophisticated
2. They supported Manny with the same vigour.
3. Some have, at the top of SICAG, in the past very close relationships with Storm.
4. SICAG at no stage have made any adverse comment about Cassimatis.

I could write 50 reasons son, but you are a blind man in the land of the one eyed.

Gg


----------



## Solly (8 September 2010)

Ironhalo said:


> Specialed. It's exactly what happened. You (we) were financially raped by a rogue who tag-teamed you with a bank who provided them the fiscal condoms to do so.
> 
> Without lubricant.




What is disappointing for me to observe is that some Stormers made critical life decisions based on the advice they received.
Some shut down their businesses/ceased employment and transitioned to a life of retirement or semi-retirement. 
It is this subset of Stormers that I wish do find a way forward to ensure a secure future after the implosion.
I'm sure that many are fearing that their plight is now falling into ancient history and public interest is waning.


----------



## DocK (8 September 2010)

Solly said:


> What is disappointing for me to observe is that some Stormers made critical life decisions based on the advice they received.
> Some shut down their businesses/ceased employment and transitioned to a life of retirement or semi-retirement.
> It is this subset of Stormers that I wish do find a way forward to ensure a secure future after the implosion.
> *I'm sure that many are fearing that their plight is now falling into ancient history and public interest is waning*.




I'm cynically wondering if this factor has any bearing on the constant delays in ASIC updates, and the tardiness of any outcome from their ever-so-slow investigations....


----------



## Solly (11 September 2010)

*"ASIC's powers under threat"*

"After collapses including ABC Learning, Opes Prime, Fincorp, Storm Financial and Sonray, an examination of the Australian Securities and Investments Commission during the inquiry showed it had been too slow to act on complaints."

More by Adele Ferguson in The Age here;

http://www.theage.com.au/national/asics-powers-under-threat-20100910-15510.html


----------



## Solly (12 September 2010)

*"Storm loss claims rejected"*

"The Commonwealth Bank has rejected claims from the founders of Storm Financial that it should pay them back $17 million in alleged losses"

More by Mitch Gaynor on page 9 in The Sunday Mail of Sept 12, 2010.


----------



## Solly (13 September 2010)

*"Storm action group slams litigator
Claims of numbers game"*

"SICAG has hit out against claims made by Slater & Gordon over its involvement in the CBA Storm resolution scheme."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/10084.htm


----------



## Garpal Gumnut (13 September 2010)

Garpal Gumnut said:


> There is a lull in the affairs of Storm Investors.
> 
> Everyone has an opinion .
> 
> ...




This is an entry from the 20th February 2009.

True then.

True now.

gg


----------



## Solly (15 September 2010)

Garpal Gumnut said:


> This is an entry from the 20th February 2009.
> 
> True then.
> 
> ...




Gee mate looks like  your words of wisdow are showing substance in reality. But I hope there is some light ahead for the Stormers.

I see you are residing at Lennons at the moment, it's a pity I'm off shore otherwise I'd drop up and shout you a lunch time refreshment in the newly spruced up Burnett Lane.

Although I am running into a little strife with Lady P anyway, been spending a bit too much time in the local nakamal


----------



## Solly (16 September 2010)

"It seems crass that the so-called action group and rival law firm Levitt Robinson are now 
attacking Slater and Gordon for helping as many people as quickly as possible."

Read more of Tony Raggatt's comment in the Townsville Bulletin here;

http://tiny.cc/kgwik


----------



## Garpal Gumnut (16 September 2010)

Solly said:


> Gee mate looks like  your words of wisdow are showing substance in reality. But I hope there is some light ahead for the Stormers.
> 
> I see you are residing at Lennons at the moment, it's a pity I'm off shore otherwise I'd drop up and shout you a lunch time refreshment in the newly spruced up Burnett Lane.
> 
> Although I am running into a little strife with Lady P anyway, been spending a bit too much time in the local nakamal




She won't get you in a nakamal mate. A bloody good place to hide imho.

I've been looking for a new Motley Crewe Vehicle and have been driving the present Arnage all about the place chasing a GFC bargain.

The present one has a funny rattle above 160kph and its driving me bonkers.

Any more news on Criminal proceedings with Storm?. The occupancy rate in most hotels in Brisvegas was woeful this month 30-35% one bloke told me, so hopefully there will be some bargains for the trials. 

There should be some criminal proceedings against the perpetrators by Sept/Oct 2011, last I heard.

gg


----------



## Solly (16 September 2010)

Garpal Gumnut said:


> She won't get you in a nakamal mate. A bloody good place to hide imho.
> 
> I've been looking for a new Motley Crewe Vehicle and have been driving the present Arnage all about the place chasing a GFC bargain.
> 
> ...




Mate last I heard is that Uncle Tony's mob were due to make another announcement very soon. Maybe it's been been delayed because of Oak'shouts' speech and the current political instability. BTW has he finished talking yet?

I'll be interested in the upcoming delayed announcements from the bureaucracy about recommendations of proceedings, if any.

Not sure what would be another good Motley Crewe Vehicle.
A sloppy front end on an Arnage is unusual. Have you checked to see you haven't got a former Townsville Financial Adviser caught in the grill, that could be throwing the balance and aerodynamics out at that speed.

Got issues with Lady P at the moment, the novated lease on the Crown is almost up and she's pressuring me to get a Hybrid. Now I know she voted Green :0

Got to get the tinnie taxi back over lagoon now and the 2G on the Crackberry is real patchy here, hope I don't miss any action while I'm away.

Yes, wish they have nakamals around the Cove, they are a great escape and  almost as good as Les Hidden's camps around the Normanby.


----------



## Julia (17 September 2010)

ANZ offer Storm resolution scheme:
http://www.businessspectator.com.au...m-Financial-claims-9D6JC?OpenDocument&src=tnb


----------



## Judd (17 September 2010)

We can only hope that it provides some closure to storm clients.

The thing I still cannot get my head around is that why it took so long for the CBA to close the unlisted funds.  I assume they were unlisted white badged funds. From what I recall from the disposition of CBA (and I take its comments at face value OK?) to the Parliamentary Inquiry, the four funds went from $700M to about $44M after around $560M of redemptions (presumably the smarties or those in the know were getting out) associated with the decline in the market at that time.

I just wonder what, if any, trigger is in place to determine when a fund is no longer viable.  Heck, if the underlying assets were some $44M and there was, say, $200M outstanding in loans, there is no way to save a sinking ship.

As for the Furphy going around that some insider trader got cheap shares, just have a look at the number of weighted BHP shares in STW (which covers the ASX 200.)  Not even a single trade in a blink of any eye.

Oh well, that's the way of it I suppose.  Some win, some lose.  Ain't no contract with life to say it must be fair.


----------



## Garpal Gumnut (18 September 2010)

Judd said:


> We can only hope that it provides some closure to storm clients.
> 
> The thing I still cannot get my head around is that why it took so long for the CBA to close the unlisted funds.  I assume they were unlisted white badged funds. From what I recall from the disposition of CBA (and I take its comments at face value OK?) to the Parliamentary Inquiry, the four funds went from $700M to about $44M after around $560M of redemptions (presumably the smarties or those in the know were getting out) associated with the decline in the market at that time.
> 
> ...




I know some of the jokers who run these funds. They are not, believe me all that bright.

Often they are the idiot sons, daughters or bastards of some long dead politician, doctor or grazier. 

I can just see them panicking and swallowing Zanicks as the **** hit the fan.

The only safe investment is a piece of fruit in a supermarket, at least if Woolies goes broke before you get to the checkout chick, you can eat it, and be ahead.

These poor Storm bastards believed the bigger bastards.

That's the nuts of it all.

gg


----------



## Garpal Gumnut (24 September 2010)

My contacts within certain entities indicate that the present euro problems against which some "important" folk have gone long ( as one would ) are now unwinding with extreme capital loss. !!! 

Please watch for further imminent developments and act appropriately.

Could be a game changer within the week.

gg


----------



## Solly (27 September 2010)

*"Let the fights fizzle out
Last week another Australian bank stepped forward to do the right thing."*

"...outside of the banks and those who held the puppet strings within Storm, another fight is brewing.

There have been murmurs within Storm investor camps that litigators involved in putting forward client claims have begun fighting internally."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/10190.htm


----------



## SJG1974 (14 October 2010)

Anyone know what Manny and Julie are up to these days?  Are they trying to get back into the financial planning game and help people plan for their futures?

When is their website going to be up and running again?  I was keen to see an update on how his crusade for justice was tracking along?

I guess, given he felt the effects of the Storm collapse more than anyone else, and what those nasty banks did, that he is locked away in his multi million dollar mansion trying to work out how he will survive?


----------



## sailteam30 (14 October 2010)

More importantly does anyone know what ASIC is doing - they were supposed to have come up with some resolution scheme by the end of August - but which year?


----------



## irish joe (14 October 2010)

The ASIC situation whilst not entirely unexpected is indeed deplorable. When the proverbial hit the fan I forwarded themfiles for several storm clients. complete records for some of a period fo 4-5 yrs. Not one of those clients has been interviewed by ASIC.

Not good enough


----------



## Smiley (15 October 2010)

Have it on impeccable authority that Manny has a new business/property development in Darwin . . . and that he and Julie are now clients of Levitt Robinson - "thick as thieves" the saying goes . . . .
Mansion in Townsville still on the market though realtors there laugh as reserve price offers have been made and not accepted - he would not want to be seen as having millions on hand.
ASIC still interviewing - riding the red eye to Townsville regularly - who knows how they pick the inteviewees. . . .


----------



## Solly (15 October 2010)

*"Storm investors to meet in Townsville"*

"Law firm Levitt Robinson will hold a public meeting in Townsville on Sunday to discuss the aftermath of the collapse of Storm Financial and investors' claims against Commonwealth Bank of Australia (CBA) and Macquarie Bank"

More from AAP in the SMH here;

http://news.smh.com.au/breaking-news-business/storm-investors-to-meet-in-townsville-20101015-16mo1.html


----------



## Solly (15 October 2010)

*
ASIC Investigation update - Investor compensation*

Storm Update 15 October 2010

https://storm.asic.gov.au/storm/storm.nsf/byheadline/ASICInvestigationUpdateOctober2010?opendocument


----------



## Solly (18 October 2010)

*"Actions cloud Storm Financial resolution
Levitt Robinson continues class action against CBA"*

"Levitt Robinson win paves way for new Storm action against CBA."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com/cps/rde/xchg/id/style/10331.htm


----------



## Solly (18 October 2010)

*"Storm probe end in sight"*

"An end is in sight in the long-running probe into failed Townsville-based wealth adviser Storm Financial."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/10/16/177701_news.html


----------



## Solly (19 October 2010)

*"Storm victims sceptical"*

 " "HANG in there." That was the message forensic police officer Sean McArdle gave to about 100 of his fellow Storm Financial victims at a meeting in Townsville yesterday."

More by Nathan Paull in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/10/18/177841_news.html


----------



## noirua (20 October 2010)

It looks as if ASIC and the Federal Government should pay up on this one. Over in the UK the Government is to pay A$3 billion due to the FSA's (equivalent to ASIC) failure to do their job properly over Equitable Life (nothing to do with America's Equitable Life). Took them nearly 8 years to admit their failings and should payout after about 11 years.

Meanwhile ASF is in its own battle over at The Bull. Votes needed indeed at: http://www.thebull.com.au/the_stockies/forums.html


----------



## specialed (28 October 2010)

This whole ASIC investigation is beginning to smell really bad...It appears it may well be all about covering their own backside rather than seeking the truth let alone compensation.


----------



## specialed (28 October 2010)

http://www.lawyersweekly.com.au/blo...awyer-likens-storm-collapse-to-watergate.aspx


----------



## specialed (28 October 2010)

Interesting ??

http://www.townsvillebulletin.com.au/article/2010/10/28/180661_news.html


----------



## Solly (28 October 2010)

specialed said:


> Interesting ??
> 
> http://www.townsvillebulletin.com.au/article/2010/10/28/180661_news.html




As reported in the TSV Bully article



> 'Mr Cassimatis said the evidence pointed "in a certain direction" and that he had "the good oil" on ASIC, but was unwilling to elaborate.
> 
> "I don't think the Bulletin is the forum for it," he said."




So if this is an accurate account of what EC stated, I wonder what would be a suitable forum to give "the good oil".

If EC is reading this, why not give ASF the scoop and make this the suitable forum to give "the good oil".

Or if not, give me a PM and I'm sure I can arrange a couple mates with an XDCAM & a couple of redheads to capture and upload the scoop.


----------



## asproboy (29 October 2010)

Some small sign of progress?

FPA fines Storm founder $20,000
The former founder of Storm Financial has been fined and expelled from the advice association for multiple breaches.

See full article: http://www.investordaily.com.au/cps...430.htm?utm_source=newsflash&utm_medium=email

The money seems insignificant, but the intent is hopefully a clear indication to the many people looking for the true source of this problem.


----------



## Solly (29 October 2010)

asproboy said:


> Some small sign of progress?
> 
> FPA fines Storm founder $20,000
> The former founder of Storm Financial has been fined and expelled from the advice association for multiple breaches.
> ...




From the above article by Kate Kachor.


> Cassimatis was not a certified financial planner or practitioner member of the FPA but was a general member at the time of the complaint, a statement from the FPA said.




From 
http://www.fpa.asn.au/FPA_Content.aspx?Doc_id=1002

I find the general membership conditions interesting.


> General membership is available to any person with a professional interest in the financial services industry, e.g. Business Development.




If the $20k is paid, wouldn't it be a lovely gesture for the FPA to dontate the money to the poor & needy.


----------



## maccka (29 October 2010)

Solly said:


> If the $20k is paid, wouldn't it be a lovely gesture for the FPA to dontate the money to the poor & needy.




Split between everyone affected it might come down to a cheque that's not worth the value of the paper it's printed on.  I know a bank that has sent a few of those out lately! 

Bring it on!!

Cheers
Maccka


----------



## Solly (30 October 2010)

*"Profession slaps $20,000 fine on Storm Financial chief"*

"It found he made misleading representations to them about rates of return from a Storm investment strategy; made oral recommendations to them without collecting relevant information from them; and sent them a general letter recommending they switch their investments to cash without considering their personal circumstances."

More from Stuart Washingtion in The Age here;

http://www.theage.com.au/business/profession-slaps-20000-fine-on-storm-financial-chief-20101029-177ld.html


----------



## Solly (31 October 2010)

*"BOQ manager sued by Storm Financial victim"*

"A TOWNSVILLE bank manager has become the first individual to be pursued through the courts over the $3 billion collapse of Storm Financial."

More by Mitch Gaynor in The Sunday Mail here;

http://www.couriermail.com.au/news/sunday-mail/bank-manager-sued-by-storm-financial-victim/story-e6frep2f-1225945564676


----------



## Solly (31 October 2010)

*"Just the eye of the Storm"*

"TWO years after Storm Financial collapsed, taking with it $38 billion in investor funds, Frank Ainslie wonders if he will still be alive when the sorry saga finally concludes."

More by Mitch Gaynor in The Sunday Mail here;

http://www.couriermail.com.au/news/sunday-mail/just-the-eye-of-the-storm/story-e6frep2o-1225945522770


----------



## Solly (31 October 2010)

*"Cassimatis fined $20,000 for misconduct"*

Tony Raggatt's article in the Townsville Bulletin is here;

http://www.townsvillebulletin.com.au/article/2010/10/30/181121_news.html


----------



## Garpal Gumnut (31 October 2010)

Solly said:


> *"Just the eye of the Storm"*
> 
> "TWO years after Storm Financial collapsed, taking with it $38 billion in investor funds, Frank Ainslie wonders if he will still be alive when the sorry saga finally concludes."
> 
> ...




This is probably the best summary of Storm matters to date, unfortunately due to the libel laws Mitch was unable to publish or flesh out the stupidity and culpability of some, mentioned and unmentioned in the article.

gg


----------



## Solly (1 November 2010)

Garpal Gumnut said:


> This is probably the best summary of Storm matters to date, unfortunately due to the libel laws Mitch was unable to publish or flesh out the stupidity and culpability of some, mentioned and unmentioned in the article.
> 
> gg




GG,

What is your confidence level of any of the participants in this saga actually ending up doing porridge in the 'Creek' ?

S


----------



## Garpal Gumnut (1 November 2010)

Solly said:


> GG,
> 
> What is your confidence level of any of the participants in this saga actually ending up doing porridge in the 'Creek' ?
> 
> S




My confidence level is quite low.

It has all along hinged on ASIC's performance and it is just one big Muppet Show at present. 

I doubt if anyone will do any time. 

gg


----------



## Solly (1 November 2010)

Garpal Gumnut said:


> My confidence level is quite low.
> 
> It has all along hinged on ASIC's performance and it is just one big Muppet Show at present.
> 
> ...




Yes, I am starting to wonder myself if ASIC will ever recommend any criminal charges against any parties.

I was looking forward to spending a few weeks at Lennons in the New Year to follow any possible proceedings.


----------



## specialed (1 November 2010)

Solly said:


> Yes, I am starting to wonder myself if ASIC will ever recommend any criminal charges against any parties.
> 
> I was looking forward to spending a few weeks at Lennons in the New Year to follow any possible proceedings.




Agreed, even the FPA has been able to make a determination......ASIC's inaction Im sure represents a desire to safeguard themselves rather than identify the blame. I doubt anyone will ever be privy to what they have consistently referred to as "confidential negotiations" even if they end up going nowhere.


----------



## Smiley (11 November 2010)

The competition and consumer watchdog has been asked to investigate collusion between Storm Financial and the banks in the lead-up to the company's $3 billion collapse. According to Sydney lawyer Stewart Levitt, it is the ACCC, not ASIC, that should investigate why Storm clients were automatically approved for margin loans up to 90 per cent against their investment equity values, during the height of the global financial crisis. The risky loan-to-value ratios led to disastrous outcomes for clients, with hundreds owing more than their investments were worth when banks sold down the Storm-badged funds in late 2008. Mr Levitt said this might have occurred because "Storm, through its founder, Emmanuel Cassimatis, had demonstrated that it could direct billions of dollars of business to the banks, both for retail and margin lending".


----------



## Solly (12 November 2010)

Smiley said:


> The competition and consumer watchdog has been asked to investigate collusion between Storm Financial and the banks in the lead-up to the company's $3 billion collapse. According to Sydney lawyer Stewart Levitt, it is the ACCC, not ASIC, that should investigate why Storm clients were automatically approved for margin loans up to 90 per cent against their investment equity values, during the height of the global financial crisis. The risky loan-to-value ratios led to disastrous outcomes for clients, with hundreds owing more than their investments were worth when banks sold down the Storm-badged funds in late 2008. Mr Levitt said this might have occurred because "Storm, through its founder, Emmanuel Cassimatis, had demonstrated that it could direct billions of dollars of business to the banks, both for retail and margin lending".




Smiley this is a new direction, thanks for letting us know.

I wonder if there has been any demonstrated breach of Section 51AC of the TRADE PRACTICES ACT 1974, 
regarding unconscionable conduct in business transactions ?


----------



## specialed (12 November 2010)

Smiley said:


> The competition and consumer watchdog has been asked to investigate collusion between Storm Financial and the banks in the lead-up to the company's $3 billion collapse. According to Sydney lawyer Stewart Levitt, it is the ACCC, not ASIC, that should investigate why Storm clients were automatically approved for margin loans up to 90 per cent against their investment equity values, during the height of the global financial crisis. The risky loan-to-value ratios led to disastrous outcomes for clients, with hundreds owing more than their investments were worth when banks sold down the Storm-badged funds in late 2008. Mr Levitt said this might have occurred because "Storm, through its founder, Emmanuel Cassimatis, had demonstrated that it could direct billions of dollars of business to the banks, both for retail and margin lending".




Great, I can see it now. ASIC takes two years to determine that in fact the ACCC should have been investigating this whole affair. The ACCC, not content with ASIC investigations decide to hold their own. This then takes another two years....Meanwhile storm victims continue to go bottom up waiting for this to end. The only winner is the banks who through attrition simply outlast everyone else. Ralph Norris must be laughing all the way to the bank............He is untouchable......


----------



## Garpal Gumnut (12 November 2010)

specialed said:


> Great, I can see it now. ASIC takes two years to determine that in fact the ACCC should have been investigating this whole affair. The ACCC, not content with ASIC investigations decide to hold their own. This then takes another two years....Meanwhile storm victims continue to go bottom up waiting for this to end. The only winner is the banks who through attrition simply outlast everyone else. Ralph Norris must be laughing all the way to the bank............He is untouchable......




I did warn you guys five or six pages into this thread, that it would end up like this. 

When you have a collection of Masons, Micks and Mediterraneans
such as Storm, SICAG, the Banks, Slater n Gordon, Levitts, Asic and the Accc, what the bloody else can you expect.

It is a Muppet Show writ large.

Poor bastards who invested or got advice or trusted the guvment are who I feel for.

gg


----------



## Attitude (13 November 2010)

I'm a poor Storm bastard and I will see this all the way and if that means court, then so be it. I maybe down but not out.


----------



## Solly (15 November 2010)

*"ASIC chair grilled over Storm
Litigators continue to squabble"*

Nationals senator John Williams has grilled Tony D'Aloisio over the status of the corporate regulator's Storm Financial investigation, prompting the ASIC chairman to admit the investigation has been completed.

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/10522.htm


----------



## Solly (22 November 2010)

*"Trail of emails charts decline of Stormy romance"*

"Macquarie Bank and Storm Financial were very cosy before it collapsed, 
writes Stuart Washington."

More in the SMH here;

http://www.smh.com.au/business/trail-of-emails-charts-decline-of-stormy-romance-20101121-182lc.html


----------



## Solly (23 November 2010)

*"More signs of bank-Storm tie"*

"A MACQUARIE Bank executive who defended the bank's arm's length relationship with Storm Financial last year was among five senior staff "provided" by the bank to develop a secret alliance with it."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/more-signs-of-bankstorm-tie-20101122-1849j.html


----------



## Solly (23 November 2010)

*"Macquarie staff told to build ties with Storm, secret document reveals"*

"Bernie Ripoll, the chairman of the joint committee on corporations and financial services that conducted the Storm inquiry, said he would raise with the committee whether it should seek further information from Macquarie about the document."

More by Stuart Washington here;

http://www.smh.com.au/business/macquarie-staff-told-to-build-ties-with-storm-secret-document-reveals-20101122-1847n.html


----------



## Landyman (23 November 2010)

Garpal Gumnut said:


> My confidence level is quite low.
> 
> It has all along hinged on ASIC's performance and it is just one big Muppet Show at present.
> 
> ...




Mr gg,

have not visited this site for a while. Rather surprised at your change of location, Etna Creek CC (Correctional Centre?).

Sincerely hope on the outside looking in!

Why would you forsake the ambience of the Ross Isl. pub.

Landyman


----------



## Solly (24 November 2010)

*"Macquarie's secret alliance with Storm"*

"The documents contrast with the bank's evidence to a parliamentary inquiry last year that business terms with Storm were negotiated at arm's length and raise fresh questions about the level of the bank's responsibility in the disaster."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/11/23/186671_news.html


----------



## Solly (24 November 2010)

*"ASIC DECISION ON STORM LITIGATION TODAY"*

"The Australian Securities and Investments Commission (ASIC) will meet with a number of financial institutions subject to its investigations into failed financial planning firm Storm Financial today, where it will decide whether to pursue litigation against parties associated with the group."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/news/asic-decision-on-storm-litigation-today


----------



## Solly (25 November 2010)

*"ASIC to reveal Storm Action"*

"The corporate watchdog will deliver its judgement on the Storm Financial collapse tomorrow and reveal if any court action will be taken against the failed company"

More by Emma Chalmers on page 11 of The Courier Mail Thur Nov 25, 2010.


----------



## Solly (25 November 2010)

*"Storm victims to learn of legal action"*

"Thousands of Storm Financial victims will learn tomorrow whether the federal government will pursue legal action against up to six banks."

More by Courtney Trenwith on brisbanetimes.com.au

http://www.brisbanetimes.com.au/queensland/storm-victims-to-learn-of-legal-action-20101125-188i6.html


----------



## Garpal Gumnut (25 November 2010)

Solly said:


> *"Storm victims to learn of legal action"*
> 
> "Thousands of Storm Financial victims will learn tomorrow whether the federal government will pursue legal action against up to six banks."
> 
> ...




Interesting times. As the Chinese would say ole mate.

gg


----------



## Solly (25 November 2010)

Garpal Gumnut said:


> Interesting times. As the Chinese would say ole mate.
> 
> gg




Yes, very interesting times. Maybe we'll need to book that floor of Executive Suites for the proceedings.

S


----------



## Garpal Gumnut (25 November 2010)

Solly said:


> Yes, very interesting times. Maybe we'll need to book that floor of Executive Suites for the proceedings.
> 
> S




Was thinking of you recently, managed to hitch a ride on an AN-225. Close to a pisserphone thank god, but didn't get in to the cockpit.

I cannot see the ole sheila going after the banks. Labor always fall over when it comes to bottle with the banks.

gg


----------



## GumbyLearner (25 November 2010)

Not that I'm from Townsville. But hopefully this guy won't do a Skase or a Mokbel on you guys.


----------



## Solly (26 November 2010)

*"Banks face Storm action"*

"THE corporate regulator is *expected to take legal action* against some of Australia's largest banks over the collapse of Storm Financial, after a breakdown in compensation talks."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/banks-face-storm-action-20101125-1897z.html


----------



## Solly (26 November 2010)

Garpal Gumnut said:


> Was thinking of you recently, managed to hitch a ride on an AN-225. Close to a pisserphone thank god, but didn't get in to the cockpit.
> 
> I cannot see the ole sheila going after the banks. Labor always fall over when it comes to bottle with the banks.
> 
> gg




That Cossack has some serious lift abilities, I reckon EADS should have pinched that design pack for the A380 & you wont find a Trent slung under it's wing. I've only seen those monsters from the tarmac, their take off roll looks never ending.

If Stuart's sources are accurate about ASIC taking action, my concern is that this could go on for years and your predictions become fact.

I believe that the Banks would fiercely defend their position and previous actions. I wonder if the principals will rate a mention today as well. This afternoon will be very interesting. 
I'll be hanging around the Telex room, keeping an eye out, that's for sure.


----------



## Solly (26 November 2010)

*"MORE STORM ACTION BREWING"*

"A law firm representing former clients of Storm Financial has foreshadowed legal proceedings against Macquarie Bank and Bank of Queensland, irrespective of any announcement released by the Australian Securities and Investments Commission (ASIC) with respect to agreements reached on behalf of Storm investors."

More by Mike Taylor in Money Managemeny here;

http://www.moneymanagement.com.au/news/more-storm-action-brewing


----------



## Solly (26 November 2010)

*"ASIC announces intention to commence legal action"*


The Australian Securities and Investments Commission (ASIC) today announced that it will bring civil penalty proceedings against Emmanuel and Julie Cassimatis as directors of Storm Financial Limited (In Liquidation) (Receivers and Managers Appointed) (Storm) in relation to alleged contraventions of section 180 of the Corporations Act. 

ASIC also announced that it will commence legal proceedings against parties, including Commonwealth Bank of Australia Limited (CBA), Bank of Queensland Limited (BoQ) and Macquarie Bank Limited (MBL) seeking compensation for investors arising out of the collapse of Storm. The compensation proceedings will not be filed immediately, in order to allow a short further period (no more than three weeks) for the commercial resolution discussions to continue.


More here ;

http://www.asic.gov.au/asic/asic.nsf/byHeadline/10-250MR%20ASIC%20announces%20intention%20to%20commence%20legal%20action?opendocument


----------



## Solly (26 November 2010)

Garpal Gumnut said:


> Was thinking of you recently, managed to hitch a ride on an AN-225. Close to a pisserphone thank god, but didn't get in to the cockpit.
> 
> I cannot see the ole sheila going after the banks. Labor always fall over when it comes to bottle with the banks.
> 
> gg




GG, I'm heading downstairs to the lobby bar for a drink it has been a tense morning, waiting for the ASIC announcement. I hope there are vacancies when the action starts. Do you find the Executive 1 Bedroom Suite with separate lounge room and bedroom up to your expected standard ? Lady P's a bit particular but I'm sure she'll warm to the old world charm. The Plunge pool & Spa will win her over.


----------



## Solly (26 November 2010)

*"ASIC takes banks, Storm to court"*

By ABC online business reporter Michael Janda

http://www.abc.net.au/news/stories/2010/11/26/3077427.htm


----------



## Garpal Gumnut (26 November 2010)

GumbyLearner said:


> Not that I'm from Townsville. But hopefully this guy won't do a Skase or a Mokbel on you guys.




If a person in a position such as a person mentioned on this thread, were to, where would he hide?

Such a person could hide from ASIC and the ole shills guvmint but there are a few big losers from about the Burdekin and Ingham awaiting judgement day.

And there ain't no place on godz earth one can hide from those.

Were one a person in this situation, that is.

gg


----------



## Garpal Gumnut (26 November 2010)

Solly said:


> GG, I'm heading downstairs to the lobby bar for a drink it has been a tense morning, waiting for the ASIC announcement. I hope there are vacancies when the action starts. Do you find the Executive 1 Bedroom Suite with separate lounge room and bedroom up to your expected standard ? Lady P's a bit particular but I'm sure she'll warm to the old world charm. The Plunge pool & Spa will win her over.




Should you wish to win Lady P over in it's original sense I would steer her clear  of the spa room. The third or second Mrs Gumnut became indelicate after a short spa. I cannot remember which.

I'm in one of those nice poolside rooms and am just heading down to the bar for a snifter.

The action is as expected. Civil not criminal proceedings against Le Manny et Julie et les Banques.

Poor Storm bastards. They'll not even get the satisfaction of seeing anyone do time, not even in a bloody fungal spa.

gg

gg


----------



## Garpal Gumnut (26 November 2010)

From Moneymanagement. Today's missive from ASIC

http://www.moneymanagement.com.au/news/asic-prosecutes-cassimatis-and-banks




> The Australian Securities and Investments Commission (ASIC) has announced its intention to bring civil penalty proceedings against the principals of Storm Financial, Emmanuel and Julie Cassimatis.
> 
> The regulator also announced it will begin legal proceedings against parties including the Commonwealth Bank of Australia, Bank of Queensland and Macquarie Bank Limited, seeking compensation for investors arising out of the collapse of Storm.
> 
> ...


----------



## Solly (26 November 2010)

Garpal Gumnut said:


> Should you wish to win Lady P over in it's original sense I would steer her clear  of the spa room. The third or second Mrs Gumnut became indelicate after a short spa. I cannot remember which.
> 
> I'm in one of those nice poolside rooms and am just heading down to the bar for a snifter.
> 
> ...




It's a pity I missed you, I'm on the M1 heading back to exit 57. 

Hopefully the actions by ASIC will lighten the poor Stormers load.

Can do me a favour and says thanks to the young lass in the lobby bar for putting up with our out of tune singing.

Thanks for the heads up about the spa.


----------



## Solly (26 November 2010)

*"ASIC angles for 'better deal' with Storm legal threat"*

"Professor Ian Ramsay from Melbourne University says ASIC will be keen to avoid a lengthy and costly legal action that could go all the way to the High Court."

More from the ABC here;

http://www.abc.net.au/news/stories/2010/11/26/3077921.htm


----------



## Julia (26 November 2010)

Solly said:


> [
> 
> "Professor Ian Ramsay from Melbourne University says ASIC will be keen to avoid a lengthy and costly legal action that could go all the way to the High Court."



With apologies for a slight diversion, I so enjoy hearing Prof Ramsay.
He's always so clear, so enthusiastic about his subject.  Must be a fantastic teacher.  I'd always put a high value on his opinions.


----------



## GumbyLearner (27 November 2010)

Has anyone ever thought why there have been as many views on this thread as say the Gold - Where is it Heading thread ?

Maybe because there are a large proportion of ASF members from up North that used to be involved in the Storm scheme????

Neck and neck at the moment when you look at the thread view counter. Good luck to former Storm Holders. I hope you haven't in anyway been crippled by these events. 

Buy some physical gold if you still have cash to spare. IMHO 

You are welcome to join the discussion over on the Gold - Where is it heading? thread at any time. GOLD has almost quadrupled in value since the beginning of the thread. Good investment at present IMHO!

Anyway, good luck all.


----------



## Solly (27 November 2010)

*"Regulator comes out punching, but needs to score a knockout blow"*

"After two years of pretty much constant complaint about its handling of Storm Financial, the Australian Securities and Investments Commission came out swinging yesterday."

Analysis by Stuart Washington in the SMH here;

http://www.smh.com.au/business/regulator-comes-out-punching-but-needs-to-score-a-knockout-blow-20101126-18akl.html


----------



## Solly (27 November 2010)

Garpal Gumnut said:


> From Moneymanagement. Today's missive from ASIC
> 
> http://www.moneymanagement.com.au/news/asic-prosecutes-cassimatis-and-banks




GG, In today's Australian

http://www.theaustralian.com.au/news/nation/investors-applaud-asics-threat-to-sue-banks-storm-founders/story-e6frg6nf-1225961719303

It is reported that JC states that they will be defending the ASIC action.
If I remember correctly under Section 180 I believe it states that directors must exercise a *reasonable* degree of care and diligence regarding certain matters in a company's business. I'll be having a strong brew with an old beak mate of mine this morning at the coffee shop at the marina and I will be very interested with his take on the ASIC action. 

With possible penalties of up to $200,000 for each breach I believe there will definitely be absorbing times ahead. I look forward to this stoush it will be very interesting to witness.


----------



## pedroelpedro (27 November 2010)

stormedup said:


> Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)




I've avoided making comment in this public forum so far as to avoid staying out of any news articles, but hey, you only live once.

Just to set the record straight on a few things:

* Phormula was not useless.  It worked and it did exactly what it was designed to do.  It correctly reported client positions, if the data put into it was correct and maintained.  It was also designed to do many other things, some modules of which were used by Storm and some which were not.
* Phormula was not written in C++, it was written in VB.NET
* Emmanuel and Julie Cassimatis have always owned Phormula and still do.

That's all I plan to say for now, I would appreciate any personal criticisms of myself or my family to be kept to a minimum.  This forum has always taken a negative tone and all of us, both employees and clients (of which I was included in both categories), have been unfairly treated.

Regards,
Paul Rubin

P.S. I welcome the ASIC release on Friday, though like many am discouraged that legal proceedings continue to be dragged out over such a long period of time.


----------



## Solly (27 November 2010)

pedroelpedro said:


> I've avoided making comment in this public forum so far as to avoid staying out of any news articles, but hey, you only live once.
> 
> Just to set the record straight on a few things:
> 
> ...




Paul, I find your statement 

"It correctly reported client positions, *if the data put into it was correct and maintained.*" 

most interesting. 

Are you willing to elaborate any more?


----------



## Attitude (28 November 2010)

You have to be joking! If all the information was maintained as you suggest then why am I in this position. The Storm Advisers, banks and everyone associated  are all grubby and milked us and hung us out to dry. ASIC has sat on this for 2 years then given the banks 3 more weeks which leads into Christmas then the Courts are closed till February. ASIC know they are in the gun along with the CBA. All I'll say is look out all involved as the evidence against you is powerful and will be revealed. I hope that you all end up in jail where you should be for what you have done to my life and many others! What happened to Ralph stating "put the wrongs right"what a disgrace. Cannot wait to see justice!


----------



## Solly (28 November 2010)

Three articles of interest from the Townsville Bulletin

*"ASIC targets Storm, banks"*
"THE directors of collapsed Townsville financial services company Storm Financial and the banks that worked with them are to face court action."

http://www.townsvillebulletin.com.au/article/2010/11/27/187991_news.html


*"Watchdog's findings give widow comfort"*
"A TOWNSVILLE widow who invested a $600,000 payout she received from the death of her husband..."

http://www.townsvillebulletin.com.au/article/2010/11/27/187981_news.html


*"Finally, a ray of light"*
"THE Storm Investors' Compensation Action Group says the Australian Securities and Investments Commission's decision to bring charges...."

http://www.townsvillebulletin.com.au/article/2010/11/27/188011_news.html


----------



## Solly (28 November 2010)

pedroelpedro said:


> I've avoided making comment in this public forum so far as to avoid staying out of any news articles, but hey, you only live once.
> 
> Just to set the record straight on a few things:
> 
> ...




Paul, I don't know if you have revisited this forum but I believe that you have made a comment of considerable significance.

If your statement is in fact correct that Phormula was scoped to actually provide correctly reported client positions, this to me appears to be at odds with what was stated at the Hearing before Deputy Registrar  Baldwin.

Have you given the details of this information to ASIC ?


----------



## Solly (29 November 2010)

*"Regulator bashes the banks over their involvement in Storm Financial"*

"ASIC seldom produces any crackdown surprises ahead of time.
But Friday's opening "whack 'em all" salvo at the main players involved in Storm Financial served to provide one important reminder: failure isn't an orphan at all."

More by Andrew Main in The Australian here;

http://www.theaustralian.com.au/business/opinion/regulator-bashes-the-banks-over-their-involvement-in-storm-financial/story-e6frg9if-1225962337208


----------



## Solly (29 November 2010)

*"More Storm Financial targets: ASIC, et al"*

"The Australian Securities and Investments Commission has pulled up short in threatening to sue three banks and the founders of Storm Financial – ASIC itself should be in the dock."

Michael Pascoe's interesting comment in the SMH;

http://www.smh.com.au/business/more-storm-financial-targets-asic-et-al-20101129-18cny.html


----------



## Solly (30 November 2010)

*"Payout over Storm Financial losses might grow"*

"MORE than 1500 Storm Financial clients who have struck compensation deals with the Commonwealth Bank could recover even more if the corporate regulator prevails in pending court action."

More by Anthony Marx in The Courier Mail here;

http://www.couriermail.com.au/business/payout-over-storm-financial-losses-might-grow/story-e6freqmx-1225962918636


----------



## Solly (30 November 2010)

*"MP endorses action against Storm"*

"Lawyers also support decision
The regulator's latest action in the Storm Financial collapse has been well received."

More by Darin Tyson-Chan in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/10619.htm


----------



## Solly (1 December 2010)

*"Storms approach ASIC's bank deal"*

"Should the corporate regulator's main aim be to seek compensation for investors? Or is it there to prosecute wrongdoing to the full extent of the law?"

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/storms-approach-asics-bank-deal-20101128-18cdu.html


----------



## Solly (1 December 2010)

*"ASIC MUST FOLLOW THROUGH ON STORM LITIGATION"*

"The chair of last year’s parliamentary inquiry into the financial services industry, Labor MP Bernie Ripoll (pictured), has reinforced the need for the Australian Securities and Investments Commission (ASIC) to follow through “with the full force of the law” when it comes to those found guilty of wrongdoing where Storm Financial clients are concerned – regardless of the agreed compensation deals."

More by Lucinda Beaman in Money Management here;

http://www.moneymanagement.com.au/news/asic-must-follow-through-on-storm-litigation


----------



## Ironhalo (1 December 2010)

Thanks for the links Solly. Much appreciated!


----------



## Solly (1 December 2010)

Ironhalo said:


> Thanks for the links Solly. Much appreciated!




No problem mate, after seeing first hand the incredible wreckage that this event has caused, I hope that one day the real root cause will be revealed...


----------



## Solly (2 December 2010)

*"WHY WE DID NOT ACT ON STORM - ASIC CHAIRMAN"*

"Australian Securities and Investments Commission (ASIC) chairman Tony D’Aloisio (pictured) has sought to defend the regulator from criticism directed at it by retail investors amid the fallout from the global financial crisis (GFC)."

More by Mike Taylor in Money Management here;

http://www.moneymanagement.com.au/news/why-we-did-not-act-on-storm---asic-chairman


----------



## Garpal Gumnut (2 December 2010)

Solly said:


> *"WHY WE DID NOT ACT ON STORM - ASIC CHAIRMAN"*
> 
> "Australian Securities and Investments Commission (ASIC) chairman Tony D’Aloisio (pictured) has sought to defend the regulator from criticism directed at it by retail investors amid the fallout from the global financial crisis (GFC)."
> 
> ...




So he is basically saying that Storm investors were greedy.

However he fails to take in to account the lack of financial sophistication of the folk that Manny persuaded in to his scheme.



> Australian Securities and Investments Commission (ASIC) chairman Tony D’Aloisio (pictured) has sought to defend the regulator from criticism directed at it by retail investors amid the fallout from the global financial crisis (GFC).
> 
> Addressing a meeting in Sydney, D’Aloisio claimed the ultimate risk for the success or failure of an investment was a matter for the market, with shareholders and underwriters and other investors carrying that risk as they managed it through such strategies as asset diversification and assessing risk-reward premiums.
> 
> ...




gg


----------



## Attitude (2 December 2010)

Asic is trying to settle approximately 30-40c  in the dollar with the banks. They are kidding themselves! What a easy out for them and the banks.  If they the banks are offering anything it is because they are GUILTY! No one has mentioned  

PWC for their hand in assisting with the prospectus when Storm was proposing to float????? Please read their market forecasts. Interesting where they thought the market was going in 2008.

Asic sat through the education process and gave Storm the "thumbs up" for which people trusted. 

Storm people must stay strong no matter how hard it gets.


----------



## Garpal Gumnut (2 December 2010)

Attitude said:


> Asic is trying to settle approximately 30-40c  in the dollar with the banks. They are kidding themselves! What a easy out for them and the banks.  If they the banks are offering anything it is because they are GUILTY! No one has mentioned
> 
> PWC for their hand in assisting with the prospectus when Storm was proposing to float????? Please read their market forecasts. Interesting where they thought the market was going in 2008.
> 
> ...




Attitude, mate, are SICAG still sniffing Manny's line of bull****, do you know?

gg


----------



## Solly (2 December 2010)

*"Nine-solicitor firm takes on Macquarie"*

"Levitt Robinson has issued a letter to the Macquarie Bank CEO that foreshadows its intention to include the bank in its ongoing Storm Financial class action."

More in Lawyers Weekly here;

http://www.lawyersweekly.com.au/blogs/top_stories/archive/2010/11/30/nine-solicitor-firm-takes-on-macquarie.aspx


----------



## Monario (2 December 2010)

Solly said:


> *"Nine-solicitor firm takes on Macquarie"*
> 
> "Levitt Robinson has issued a letter to the Macquarie Bank CEO that foreshadows its intention to include the bank in its ongoing Storm Financial class action."
> 
> ...




Let me guess, Macquarie declined to reply..... I cannot wait to hear the dribble that spills forth when someone from Mac Bank is put on the stand. I have heard plenty of it already, I just wonder if they will be willing to spin the same BS in court!!

Eventually these banks will be made to pay, IMHO the sooner they deal with this and move on, the cheaper it will be for them.


----------



## Solly (3 December 2010)

*"Failed Storm Financial boss Emmanuel Cassimatis to fight ban"*

"THE boss of failed Storm Financial is fighting his expulsion from one of Australia's peak professional bodies."

More by Anthony Marx in The Courier Mail here;

http://www.couriermail.com.au/business/failed-storm-financial-boss-emmanuel-cassimatis-to-fight-ban/story-e6freqmx-1225964754452


----------



## Solly (3 December 2010)

*"Storm noose tightens"*

"THE peak body for financial planners, the Financial Planning Association, has found Storm Financial founder Emmanuel Cassimatis engaged in misleading and deceptive conduct by telling clients sharemarket returns averaged 13 per cent when he knew they were"

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/12/03/189411_news.html


----------



## Attitude (3 December 2010)

Garpal Gumnut said:


> Attitude, mate, are SICAG still sniffing Manny's line of bull****, do you know?
> 
> gg




Nothing to do with SICAG or Cassamatis - never want to either. I'm only after my money back. This is starting to gain momentum! I hope this ends up on the front page of every newspaper as it will expose all involved for there grubby behaviour.


----------



## Quincy (3 December 2010)

Solly said:


> *"Storm noose tightens"*
> 
> "THE peak body for financial planners, the Financial Planning Association, has found Storm Financial founder Emmanuel Cassimatis engaged in misleading and deceptive conduct by telling clients sharemarket returns averaged 13 per cent when he knew they were"
> 
> ...




Also as stated in this article : - 



> _*The association's expert panel also found the investment strategy devised by Mr Cassimatis was unsustainable and that it was Storm's advice and not the actions of the banks that caused investors' huge losses.*_
> 
> The findings, contained in a report by the association into Storm, is damning for Mr Cassimatis who has long claimed, along with some of his loyal investors, that it was the banks and not Storm who were to blame for investor losses of $3 billion.




These "findings" don't bode well for the prospects of any ASIC action that may be taken against the Banks.


----------



## Quincy (3 December 2010)

Quincy said:


> Also as stated in this article : -
> 
> 
> These "findings" don't bode well for the prospects of any ASIC action that may be taken against the Banks.




See 
	

		
			
		

		
	

View attachment CRC%2001_2010.pdf

	

		
			
		

		
	
 - for the the Financial Planning Association "findings" regarding Emmanuel Cassimatis


----------



## Ironhalo (4 December 2010)

Attitude said:


> Nothing to do with SICAG or Cassamatis - never want to either. I'm only after my money back.




Not being harsh, but don't hold your breath mate.


----------



## Attitude (6 December 2010)

I don't know how you are involved in Storm or where you are from, however once the evidence is tabled in the Courts then and only then will the associated parties be seen in the true light.


----------



## Defender (7 December 2010)

Solly said:


> Paul, I don't know if you have revisited this forum but I believe that you have made a comment of considerable significance.
> 
> If your statement is in fact correct that Phormula was scoped to actually provide correctly reported client positions, this to me appears to be at odds with what was stated at the Hearing before Deputy Registrar  Baldwin.
> 
> Have you given the details of this information to ASIC ?




When the Golden Greek said at the hearing that their system was not accurate, he was probably right...but only to the degree that the market was moving by the second (as it does). Any system will have some degree of lag, and that what he was referring to, I believe. It could have (would have) been out by a fly poo or two, and that's what he based his comments on. He was correct in what he said, but deceiving...and successfully so!

Make no mistake, the system gave them a very good understanding of where everyone was. It was a useful working tool & did not let them down in any way. Unfortunately, the learned panel, to my frustration, did not pursue questioning as to the degree of accuracy of the system...rather black & white...is it 100% accurate or not. So 99.99% accuracy would have given a determination of "not accurate"! All my opinions as an ex-client (not employee).


----------



## Solly (8 December 2010)

*"Storm Financial client's bank manager hits back at claims he was responsible for her losses"*

"THE former bank manager of Storm Financial client Helen Rubin has hit back at claims he was responsible for the loss of her life savings when the firm collapsed in late 2008."

More by Mitch Gaynor in The Courier-Mail here;

http://www.couriermail.com.au/business/storm-financial-clients-bank-manager-hits-back-at-claims-he-was-responsible-for-her-losses/story-e6freqmx-1225967204066


----------



## Solly (8 December 2010)

*"Ruling with a soft fist"*

"Almost two years after ASIC began investigating the collapse of Storm Financial, the corporate regulator has finally ruled with its fist."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/10693.htm


----------



## SJG1974 (8 December 2010)

Quincy said:


> See
> 
> 
> 
> ...




I had a read through this.  The one thing that stood out to me was that these people paid Storm Financial an upfront fee of $198,000 to effectively have Storm sell down their assets, get them into debt and invest in index funds.  

$198,000!!!  That is unbelievable.

These people had sufficient assets to live the lifestyle they wanted without taking big risks, yet they paid Storm $198,000 to undertake this high risk strategy.

God Manny must have been a good salesman. Alarm bells should have been ringing for these folk as soon as that figure was mentioned.


----------



## Solly (8 December 2010)

*"Power to act"*

"The chairman of the Australian Securities and Investments Commission (ASIC), Tony D'Aloisio, has come out in defence of the regulator for failing to move earlier against those who it believes have engaged in wrongdoing."

More by John Collett in the SMH;

http://www.smh.com.au/money/super-and-funds/power-to-act-20101207-18ngn.html


----------



## Quincy (9 December 2010)

Solly said:


> *"Power to act"*
> 
> "The chairman of the Australian Securities and Investments Commission (ASIC), Tony D'Aloisio, has come out in defence of the regulator for failing to move earlier against those who it believes have engaged in wrongdoing."
> 
> ...





As stated by D'Aloisio in the above-referenced article : - 



> D'Aloisio says that Storm investors would not have reacted well to ASIC trying to close down Storm at a time when they were making such good money. *He also argues that ASIC did not have the power to close down Storm.*




. . . .   but hang on  . . . .



> 9.56 Mr Cassimatis defended the Storm investment model by claiming that the model was not unique to Storm, that many financial planning firms used gearing strategies as a common strategy in financial planning, that the FPA had known about the model for over a decade, *had conducted audits and had made various visits to Storm, as had the Regulator*, *but nobody had advised that it was an unsuitable or inappropriate strategy for clients up to the point of the Storm collapse.*
> 
> http://203.210.122.153/fpa//media/FPA/Website files/Pub_/CRC 01_2010.pdf




and . . . 



> *10-250MR ASIC announces intention to commence legal action*
> 
> _Friday 26 November 2010_
> 
> ...




So Tony is saying that : -

1. He didn't have the power to close down Storm
2. He did have the power to close down Storm

Which one is it Tony ?


----------



## Solly (10 December 2010)

*"ASIC BLOWS HOT AND COLD ON STORM"*

"The global financial crisis may have thrown up considerable challenges for the Australian Securities and Investments Commission (ASIC) but it also threw up considerable benefits in the form of increased powers and increased funding"

More by Mike Taylor from Money Management here;

http://www.moneymanagement.com.au/news/asic-blows-hot-and-cold-on-storm


----------



## pedroelpedro (11 December 2010)

Defender said:


> When the Golden Greek said at the hearing that their system was not accurate, he was probably right...but only to the degree that the market was moving by the second (as it does). Any system will have some degree of lag, and that what he was referring to, I believe. It could have (would have) been out by a fly poo or two, and that's what he based his comments on. He was correct in what he said, but deceiving...and successfully so!
> 
> Make no mistake, the system gave them a very good understanding of where everyone was. It was a useful working tool & did not let them down in any way. Unfortunately, the learned panel, to my frustration, did not pursue questioning as to the degree of accuracy of the system...rather black & white...is it 100% accurate or not. So 99.99% accuracy would have given a determination of "not accurate"! All my opinions as an ex-client (not employee).




The statement "the system was not accurate" is exactly right, especially in the last quarter of 2008.  The accuracy in fact was nowhere near even 50%.  For a significant period during that time, any clients with a Colonial Margin Loan did not have correctly LVRs, either in Storm's software or in CBA's software.  It was in fact impossible to determine a client's actual position.  Colonial Margin Loans are just one (significant) reason why client positions could not be quantified.  There were many, MANY other issues around the data that was loaded into Phormula.

The Phormula software was shown to all clients, everyone saw what it was capable of, therefore this should not be a significant revelation to anyone.  Phormula was specifically designed to monitor and track client positions daily, but as previously stated, only if the data going into it was correct and was well maintained.

Regards,
Paul


----------



## Quincy (11 December 2010)

Solly said:


> *"ASIC BLOWS HOT AND COLD ON STORM"*
> 
> http://www.moneymanagement.com.au/news/asic-blows-hot-and-cold-on-storm




As stated in the above-referenced article : - 



> Notwithstanding the increased funding and the increased powers, ASIC’s chairman, *Tony D’Aloisio, has made clear that, confronted by another Storm Financial, the regulator would not do things any differently. It would not close the company down and it would not seek to warn the investors.*  . . .
> 
> Not only is D’Aloisio comfortable with admitting that ASIC could not and would not act on Storm. He appears entirely comfortable with ensuring nothing happens to alter that situation.





However as per my previous post : - 



> *10-250MR ASIC announces intention to commence legal action*
> 
> _Friday 26 November 2010_
> 
> ...





In conjunction with a statement made previously by ASIC’s Executive Director of Enforcement at the time : -  



> "Managed investment schemes must be registered with ASIC, and those operating such schemes should hold a licence. *ASIC will take action to close down schemes that are run in breach of the Corporations Act so as to protect the interests of investors"*, ASIC’s Executive Director of Enforcement, Ms Jan Redfern said.
> 
> http://www.asic.gov.au/asic/asic.ns...nvestment+schemes+to+be+wound+up?openDocument




As stated in Solly's posted article : - 



> "It is common knowledge that a number of senior figures within the financial planning industry urged ASIC officers to examine the activities of Storm Financial *before it collapsed*, and recent documentation released by a law firm suggest *ASIC was well aware of the strategies pursued by Storm and the risks those strategies entailed*.





If ASIC's claim is in fact a valid one (that the Storm Model amounted to the operation of a managed investment scheme), then with reference to all of the above, to suggest that ASIC did not have the power to close down Storm, is (IMO) simply not true.


----------



## SJG1974 (15 December 2010)

I still go and have a look at the Storm financial website every now and then just to remind myself of the big statements and claims they made on there.

I like this one:

"Why Storm:
Our desire is for people to embrace the analogy of the storm. Storms are the harbingers of growth. They return life to parched land and create new and fresh beginnings.

We also think the name signifies the dynamic process we go through with our clients. Initially our clients can feel disturbed by stormy waters, and we are alongside them to navigate them through that. The storm's replenishing rains bring the promise of renewal and growth.

In keeping with the storm analogy, Storm Financial is refreshing and invigorating for clients…they know to 'expect the unexpected!"

If only the clients had known to expect the unexpected they would not be in the current mess.

http://web.archive.org/web/20080720070059/www.stormfinancial.com.au/ins_abo.php


----------



## mattryanshares (15 December 2010)

My parents lost virtually everything with storm, and i very nearly invested with them as well.

I'll never forget what the adviser said to me when trying to get me to take out a 700k loan on shares. 

I said but i cant afford to loose that, i can afford to loose and recover from a 100k loan but 700k would sink me. 

He said it will never happen. its impossible for you too loose everything, if that happened your house, the australian dollar every major instituition would be worth nothing. The world would be kaos!!!!

he said the same thing to my parents!!!

Storm and all there partners should be hung drawn and quartered!


----------



## Attitude (15 December 2010)

Yes my adviser said the exact same thing. Funny so did my bank. One thing I know for sure is that I know the Comm Bank are trying to tempt me with small offers, but it won't cut it. I am rebuilding and have already spent a significant amount of money collating evidence which will demonstrate the disgraceful behavior from all connected with this scam.


----------



## Judd (15 December 2010)

Attitude said:


> Yes my adviser said the exact same thing. Funny so did my bank. One thing I know for sure is that I know the Comm Bank are trying to tempt me with small offers, but it won't cut it. I am rebuilding and have already spent a significant amount of money collating evidence which will demonstrate the disgraceful behavior from all connected with this scam.




This "Funny so did my bank" is something I have never been really able to understand.  Was it the Commonwealth Bank proper which said those sort of things or was it individuals of a particular CBA branch, who were probably also caught up with the Storm euphoria, who gave this information?

Obviously, it is only curiosity on my part since I did not sign up for the Storm song and dance act as you did.  Equally, I don't give a rats if you do or do not get your money back although it would be nice for you if that happened and, if so, all good fortune to you.

Slight correction:  "you' was used in the Royal sense and not in the personal one.


----------



## Attitude (15 December 2010)

It is very complicated but two banks are involved which I've settled with one. Only one to go so i'm being forced to roll the dice! The banks are just stalling and just trying to wear people down so they give in. Big banks with big pockets V the little man! Will be interesting start to 2011!


----------



## Solly (18 December 2010)

*"Commonwealth Bank owed an extra $7 million after Storm Financial's collapse"*

"AS a deadline expires for three banks to cut a compensation deal over Storm Financial, new court documents reveal the Commonwealth Bank copped a separate $7 million sting in the collapse of the financial advisory business."

More by Liam Walsh in The Courier-Mail here;

http://www.couriermail.com.au/business/commonwealth-bank-owed-an-extra-7-million-after-storm-financials-collapse/story-e6freqmx-1225972956621


----------



## Garpal Gumnut (19 December 2010)

mattryanshares said:


> My parents lost virtually everything with storm, and i very nearly invested with them as well.
> 
> I'll never forget what the adviser said to me when trying to get me to take out a 700k loan on shares.
> 
> ...




Mate, you need to let ASIC know of these conversations.

A diary note from the day would be useful.

You do need to let ASIC know.

gg


----------



## Garpal Gumnut (19 December 2010)

Solly said:


> *"Commonwealth Bank owed an extra $7 million after Storm Financial's collapse"*
> 
> "AS a deadline expires for three banks to cut a compensation deal over Storm Financial, new court documents reveal the Commonwealth Bank copped a separate $7 million sting in the collapse of the financial advisory business."
> 
> ...




Solly mate,

I sailed my aging Cat from Maggie to the Watermark for a meeting with an SC over a a misunderstanding with the ATO on Friday.

After the meat he mentioned Storm Financial, and indicated that the Ripoll inquiry would in law vindicate Manny and Storm.

I'm no lawyer so don't understand it, but it sounds to me that the Financial Planners and the Government are ganging up on the little guys, to gloss this over, and leave the poor Storm bastards penniless.

gg


----------



## Solly (19 December 2010)

Garpal Gumnut said:


> Solly mate,
> 
> I sailed my aging Cat from Maggie to the Watermark for a meeting with an SC over a a misunderstanding with the ATO on Friday.
> 
> ...




GG,

The opinion that you have received may well be correct.

I too will be closely following the proceedings and will be very interested to see if any parties to this saga are found in breach of any statute.

I look forward to observing ASIC's approach to these matters.


----------



## Solly (20 December 2010)

*"ASIC to pursue banks over Storm"*

"The Australian Securities and Investments Commission is set to launch legal proceedings against the Commonwealth Bank of Australia, Macquarie Bank and the Bank of Queensland after they missed Friday’s deadline to settle $300 million in outstanding claims by former investors in Storm Financial."

More in the Australian Financial Review of 18 Dec 2010.


----------



## Garpal Gumnut (21 December 2010)

Solly said:


> GG,
> 
> The opinion that you have received may well be correct.
> 
> ...




I have been today in Adelaide of all places, defending some entities from the ATO, and I chanced upon an old Labor mate from the Federal Parliament , close to the inquiry. 

Manny is in the clear, no criminal matters mooted and a new and successful life ahead of him, he said.

Life ain't fair.

gg


----------



## Solly (21 December 2010)

Garpal Gumnut said:


> I have been today in Adelaide of all places, defending some entities from the ATO, and I chanced upon an old Labor mate from the Federal Parliament , close to the inquiry.
> 
> Manny is in the clear, no criminal matters mooted and a new and successful life ahead of him, he said.
> 
> ...




GG
I've been speaking with a couple of Stormers and they are really hopeful that Tony's mob can score some runs for them.
I might hang around the telex room over the next few days just in case something breaks.


----------



## Solly (22 December 2010)

*"Bank's inaction raised Storm loss"*

"VICTIMS of Storm Financial with margin loans through Macquarie Bank were forced into deeper losses as a result of a procedural failure by the bank, which was later covered up."

More by Stuart Washington in The Age here;

http://www.theage.com.au/business/banks-inaction-raised-storm-loss-20101221-194gw.html


----------



## Solly (22 December 2010)

*"ASIC on attack over Storm, Hardie"*

"ASIC is set to launch legal proceedings against CBA, Macquarie Group and Bank of Queensland after the breakdown of talks on a deal over the $3 billion collapse of Storm Financial."

More by Patrick Durkin in The Australian Financial Review of Dec 22, 2010.


----------



## Solly (22 December 2010)

Garpal Gumnut said:


> I have been today in Adelaide of all places, defending some entities from the ATO, and I chanced upon an old Labor mate from the Federal Parliament , close to the inquiry.
> 
> Manny is in the clear, no criminal matters mooted and a new and successful life ahead of him, he said.
> 
> ...




GG

My Stormer mate must have read your post and he has commented to me this morning about where does the responsibility really lie? He's getting a bit restless, especially as another Xmas has come around, things aren't really resolved and he's still a bit down in the dumps.

He states to me that he was assured that there were strategies in place to protect his investment. Looks like we are now heading to the courts for a determination.

Hope all is well with the stoush with the ATO. I've always found that Part IVA is a little ambiguous, especially when trying to define the difference between avoidance & minimisation, it can really be a fine line.


----------



## Smiley (22 December 2010)

While EC and JC may not be criminally prosecuted, the Ripoll Inquiry did not clear them and the Worrell's findings were most critical . . . Hope ASIC's civil convictions sting - and with $200,000 for each breach - they are bound to  . . .though Cassimatis claiming he does not have $20,000 to pay FPA fine.  So they are no way exonerated . Also moves are afoot to ban them . . .


----------



## Solly (22 December 2010)

* ASIC has commenced Storm legal proceedings

*ASIC today confirmed it has lodged with relevant courts legal proceedings that it announced on 26 November 2010 (refer MR10-250).  These proceedings arise out of its investigation into the collapse of  Storm Financial Limited (In Liquidation) (Receivers and Managers  Appointed) (Storm)......


More on the ASIC website;

http://asic.gov.au/asic/asic.nsf/by...ommenced Storm legal proceedings?opendocument


----------



## Defender (22 December 2010)

pedroelpedro said:


> The statement "the system was not accurate" is exactly right, especially in the last quarter of 2008.  The accuracy in fact was nowhere near even 50%.  For a significant period during that time, any clients with a Colonial Margin Loan did not have correctly LVRs, either in Storm's software or in CBA's software.  It was in fact impossible to determine a client's actual position.  Colonial Margin Loans are just one (significant) reason why client positions could not be quantified.  There were many, MANY other issues around the data that was loaded into Phormula.
> 
> The Phormula software was shown to all clients, everyone saw what it was capable of, therefore this should not be a significant revelation to anyone.  Phormula was specifically designed to monitor and track client positions daily, but as previously stated, only if the data going into it was correct and was well maintained.
> 
> ...




Yes Paul...but remember these investments merely tracked the Industrial, Resources & Technology Indices, the mix of which, I believe, reflected  the overall Australian share market. 

Storm only had to know the ASX200 value at any point to marry that up with everyone's position & LVR...with reasonable accuracy. During meetings, right from the start, we were often told the ASX200 value, that the market would have to fall to, in order to trigger a margin call. It's not rocket science & it mightn't have been 100%, absolutely accurate, but 100% accuracy wasn't any better in such a volatile market anyway! It sure would have been good enough to act on though...and they had that much knowledge!


----------



## Solly (22 December 2010)

Links to the websites of some of the major players after today's ASIC announcement.

http://www.commbank.com.au/about-us/news/media-releases/2010/221210-commonwealth-bank-statement-storm-financial.aspx

http://www.macquarie.com.au/mgl/au/about-macquarie-group/news/2010/20101222a

http://www.boq.com.au/aboutus_media_20101222.htm

http://cassimatis.com.au/


----------



## Solly (22 December 2010)

*"Banks vow to defend Storm legal action"*

"The banks involved in the Storm Financial collapse say they will fight the legal action launched against them by the corporate regulator."

More by Sue Lannin from the ABC here;

http://www.abc.net.au/news/stories/2010/12/22/3099680.htm


----------



## Garpal Gumnut (22 December 2010)

Solly said:


> *"Banks vow to defend Storm legal action"*
> 
> "The banks involved in the Storm Financial collapse say they will fight the legal action launched against them by the corporate regulator."
> 
> ...




As I said very early in this thread the only people who will profit from all this are the lawyers, Slater and G, Levitts and the banks Lawyers.

Going up against the banks in a legal stoush is very very expensive.

S and G and Levitts may have to farm out the risk to contingency investors who will take their bite out of the cake if there is a win.

gg


----------



## Solly (23 December 2010)

Some news articles of interest;

*Bank hits out at ASIC's Storm Financial action*

http://www.theaustralian.com.au/business/bank-hits-out-at-asics-storm-financial-action/story-e6frg8zx-1225975186573

*Banks targeted in hunt for Storm cash*

http://www.heraldsun.com.au/business/banks-targeted-in-hunt-for-storm-cash/story-e6frfh4f-1225975167340

*Banks to defend against ASIC's Storm action*

http://www.brisbanetimes.com.au/bus...gainst-asics-storm-action-20101222-194xa.html

*Storm drama starts to bite*

http://www.townsvillebulletin.com.au/article/2010/12/23/194661_news.html

*Banks 'should pay' for Storm damage*

http://www.smh.com.au/business/banks-should-pay-for-storm-damage-20101222-195mf.html


----------



## Solly (23 December 2010)

*Transcript and Video link of "Storm showdown" aired on the 7:30 Report 22 Dec 10*

http://www.abc.net.au/7.30/content/2010/s3099770.htm


----------



## Garpal Gumnut (23 December 2010)

Solly said:


> *Transcript and Video link of "Storm showdown" aired on the 7:30 Report 22 Dec 10*
> 
> http://www.abc.net.au/7.30/content/2010/s3099770.htm




We await bad weather here on Magnetic Is, but it is a glorious night, oops its started raining. 

I am here in the Picnic Bay Hotel with 5 Brisbane Sc's and some beautiful young ladies whose noses have been piqued by the attached from the Melbourne Age. They are discussing whether it may have repercussions for Manny.

Alas their noses are piqued by other things, I've never seen so many visits to the toilets with credit cards soiled about an edge by powder. 

What is the world coming to.

http://www.theage.com.au/business/opes-prime-client-wins-compensation-20101209-18rit.html?skin=text-only

gg


----------



## Solly (24 December 2010)

Garpal Gumnut said:


> We await bad weather here on Magnetic Is, but it is a glorious night, oops its started raining.
> 
> I am here in the Picnic Bay Hotel with 5 Brisbane Sc's and some beautiful young ladies whose noses have been piqued by the attached from the Melbourne Age. They are discussing whether it may have repercussions for Manny.
> 
> ...





GG,

That is a very interesting decision by Chief Justice de Jersey, I too wonder what the impacts of this will mean. I'll be having a Yuletide apÃ©ritif with an old silk mate at the marina later today and I'll get his take on this as well.

I must admit the behaviour of some around this way is also unbecoming and worries me when I observe similar things. I think you have shed some light on why a late night visitor to a large Riviera on Pier C, often has trouble swiping her credit card in the off-licence at the Village when buying her cranberry & guava alocpops. I've always found it rather sad that for an elegant young lady, she only has one nostril.


----------



## SPARNEY (24 December 2010)

Hi all, I am a first time poster, just checking on how to post.

SP.:santa:


----------



## Solly (24 December 2010)

Solly said:


> GG,
> 
> That is a very interesting decision by Chief Justice de Jersey, I too wonder what the impacts of this will mean. I'll be having a Yuletide apÃ©ritif with an old silk mate at the marina later today and I'll get his take on this as well.
> 
> < >




GG

I have just returned from a few festive activities with my old mate. I was very interested in gaining an understanding of how the Levitt/ASIC actions running in tandem/concurrently will work.

I was of the belief that the ASIC action would override/extinguish other actions. Apparently this is not the case. These will definitely be very intriguing cases and I hope that I will be able to schedule time in AU to observe them. 

I see that there is a bit of grubby wx on its way up TSV way, hope it doesn't to get too bad. If it does get a bit rough on Maggie, I suppose you can always bunk down in the R&R Bar until the sky settles down.


----------



## Solly (25 December 2010)

Here are two more articles of interest from Fairfax.

*Hefty Storm Financial debts that left couple high and dry*

http://www.brisbanetimes.com.au/business/hefty-storm-financial-debts-that-left-couple-high-and-dry-20101223-196jw.html


*Banks under scrutiny in Storm suits*

http://www.brisbanetimes.com.au/business/banks-under-scrutiny-in-storm-suits-20101223-196k6.html


----------



## Judd (19 January 2011)

And now this aspect has probably been thrown into the mix.  All very complex.

http://www.theage.com.au/business/a...o-banks-over-margin-loans-20110118-19v92.html

*Appeal win gives hope to banks over margin loans *



> A SYDNEY barrister's victory in a margin-loan case has been overturned on appeal, after three Federal Court judges ruled that banks which lend for stockmarket investment have wide rights when prices fall.
> 
> The appeal bench held unanimously that Macquarie Bank's standard margin loan agreement gave it discretion to reduce the time for its clients to meet margin calls from three days to one


----------



## Solly (20 January 2011)

Judd said:


> And now this aspect has probably been thrown into the mix.  All very complex.
> 
> http://www.theage.com.au/business/a...o-banks-over-margin-loans-20110118-19v92.html
> 
> *Appeal win gives hope to banks over margin loans *




Agreed Judd, it is all very complex, although,



> This provision, which reflects part of the Trade Practices Act which applies to businesses generally, has been a feature of other lawsuits prompted by the global financial crisis. It was used unsuccessfully by aggrieved clients of the failed Lift Capital Partners in a recent case cited as a precedent by the three appeal judges this week.
> 
> It also forms part of the claim filed last month by the ASIC on behalf of clients of Storm Financial,* although this case also relies on a related provision, not considered in Mr Goodridge's appeal,* which prohibits a lender exploiting a borrower's ''special disadvantage''.




More here in The Age.

http://www.theage.com.au/business/investors-must-heed-margin-lenders-call-20110119-19wmo.html


----------



## Judd (20 January 2011)

Solly said:


> Agreed Judd, it is all very complex......




it's very, very messy.

And I seem to recall that there was a court decision in WA where clients took on Macquarie over mortgages to invest in the market.  If I remember correctly, the case failed and the court determined in favour of the bank because the relevant consumer protection provisions did not apply where the loan was to be used for business or investment purposes and they were taken out before those provisions were altered.

As is always the situation, most of the law is not about people but about property.  You never know what the judges will finally decide.  If possible, avoid litigation whenever you can.


----------



## Garpal Gumnut (26 January 2011)

Does anyone have any inkling of any *Criminal Charges* pending against any of the major players in this saga.

I do know that the DPP have an interest but are waiting for more to pan out. 

There has to be some criminality for so many people to lose everything in a scam of this magnitude.

gg


----------



## Solly (27 January 2011)

> *Corporate regulator to defend 'just terms'*
> ASIC's right to sue on behalf of investors will be tested in the High Court next week




Appears not to impact on the current ASIC action in relation to Storm

More by Elisabeth Sexton @ brisbanetimes.com.au

http://www.brisbanetimes.com.au/business/corporate-regulator-to-defend-just-terms-20110126-1a5c5.html


----------



## Solly (27 January 2011)

Garpal Gumnut said:


> Does anyone have any inkling of any *Criminal Charges* pending against any of the major players in this saga.
> 
> I do know that the DPP have an interest but are waiting for more to pan out.
> 
> ...




GG,
I have wondered about this as well. I remember there were some reports suggesting that criminal charges may be laid after the Worrells Inquiry.
Maybe there is more to come. I wonder what has been uncovered during discovery for the Civil case.
I believe there are interesting times ahead.


----------



## Garpal Gumnut (28 January 2011)

Solly said:


> GG,
> I have wondered about this as well. I remember there were some reports suggesting that criminal charges may be laid after the Worrells Inquiry.
> Maybe there is more to come. I wonder what has been uncovered during discovery for the Civil case.
> I believe there are interesting times ahead.




Perhaps Storm will follow the path of ABC Learning. From today's Australian.

http://www.theaustralian.com.au/new...earning-collapse/story-e6frg6nf-1225995778312





> FAILED childcare tycoon Eddy Groves is due to face court today on a criminal charge relating to the collapse of ABC Learning.
> 
> Mr Groves, who founded Australia's biggest childcare chain and managed it as the global chief executive, and former director Martin Vincent Kemp, who ran the Australian operations, are both listed to appear in Brisbane Magistrates Court this morning. They are expected to be charged with commonwealth criminal offences, arising from an Australian Securities & Investments Commission investigation.
> 
> ...




We are certainly in for interesting times.

gg


----------



## Solly (28 January 2011)

*For Sale *

7 Bedrooms, 5 Bathrooms, 4 Ensuites, Swimming Pool and Helipad

http://www.realestate.com.au/107076744


----------



## Garpal Gumnut (28 January 2011)

Solly said:


> *For Sale *
> 
> 7 Bedrooms, 5 Bathrooms, 4 Ensuites, Swimming Pool and Helipad
> 
> http://www.realestate.com.au/107076744




CBA, BOQ or MQG for a loan mate? Looks nice. Lady P would enjoy the balcony.

It's good to move every now and then. Everyone should do it. 

gg


----------



## Solly (28 January 2011)

Garpal Gumnut said:


> CBA, BOQ or MQG for a loan mate? Looks nice. Lady P would enjoy the balcony.
> 
> It's good to move every now and then. Everyone should do it.
> 
> gg





Yes GG,

Lady P is a bit partial to the balcony but then again 
"I Am the Very Model of a Modern Major-General" :


----------



## Solly (3 February 2011)

> *In the Eye of the Storm
> THE COLLAPSE OF STORM FINANCIAL*




An Essay by Paul Barry in The Monthly
http://www.themonthly.com.au/collapse-storm-financial-eye-storm-paul-barry-2980


----------



## Julia (3 February 2011)

Solly, it might be good to explain before we click on the link that to actually read the story we will have to subscribe to "The Monthly".


----------



## Solly (4 February 2011)

Julia said:


> Solly, it might be good to explain before we click on the link that to actually read the story we will have to subscribe to "The Monthly".




Good point Julia, I am probably a little too close to things and assumed that people would know that it's a sub site. I'll flag it next time.

Also with Rupert's new digital news model rolling out, access to other free news may be about to change.

But then again Scribes & even Hacks need to buy food & be able to have a few rounds with mates @ the Ross River occasionally


----------



## Solly (5 February 2011)

> *Storm lawsuits may be heard together*
> A Federal Court judge will consider whether it is desirable to hear all legal actions against banks over managed investment schemes run by Storm Financial in the same court.




More @ ninemsn.com.au
http://finance.ninemsn.com.au/newsbusiness/aap/8206663/storm-lawsuits-may-be-heard-together


----------



## Solly (5 February 2011)

> *ASIC on path of least resistance as it chases up cash for investors*
> 
> TONY D'ALOISIO would be well pleased with his handiwork this week




More by Ian Verrender @ brisbanetimes.com.au 
http://www.brisbanetimes.com.au/business/asic-on-path-of-least-resistance-as-it-chases-up-cash-for-investors-20110204-1agsc.html


----------



## Solly (5 February 2011)

> *Storm chaser becomes more confident*
> 
> A LAWYER representing dozens of Storm Financial investors has rejected suggestions that a failed court case touted as a saviour for investors has any bearing on ongoing legal action.




More by Mitch Gaynor @ couriermail.com.au 
http://www.couriermail.com.au/ipad/levitt-becomes-the-storm-chaser/story-fn6ck2gb-1226000424872


----------



## Solly (9 February 2011)

> *Storm couple downsize to $1m home*
> STORM Financial founders Emmanuel and Julie Cassimatis are downgrading, but not as most know it after buying for nearly $1 million a house close to the mansion they have recently listed for sale.




Read more by Mitch Gaynor @ couriermail.com.au
http://www.couriermail.com.au/ipad/storm-couple-downsize-to-1m-home/story-fn6ck2gb-1226002379244


----------



## Garpal Gumnut (9 February 2011)

Solly said:


> Read more by Mitch Gaynor @ couriermail.com.au
> http://www.couriermail.com.au/ipad/storm-couple-downsize-to-1m-home/story-fn6ck2gb-1226002379244




Schadenfreude, Und mehr zum zu kommen.

gg


----------



## Solly (9 February 2011)

Garpal Gumnut said:


> Schadenfreude, Und mehr zum zu kommen.
> 
> gg




GG,

Did you get an invite to the housewarming ?

Just wondering what a suitable welcome to the neighbourhood gift would be..

S


----------



## Garpal Gumnut (9 February 2011)

Solly said:


> GG,
> 
> Did you get an invite to the housewarming ?
> 
> ...




I saw Manny in Queen St. BNE, yesterday, wearing a baseball cap and he did not look a happy camper. Lowes is not a good outfitter. Lennons is still on.

gg


----------



## Solly (9 February 2011)

Garpal Gumnut said:


> ....... Lennons is still on...




Yes GG, I agree....in spades, in spades.

S


----------



## Garpal Gumnut (9 February 2011)

Solly said:


> Yes GG, I agree....in spades, in spades.
> 
> S




It is due for the Spring Sittings I have been told. I am booked in to one of those poseur rooms by the pool, not that I'm a poseur, I just like to have a swim early in the morning.

gg


----------



## Solly (10 February 2011)

> *Cassimatis to appeal FPA charges
> Judge in Storm case steps down*
> 
> An ex-Storm director is to appeal FPA charges, while the judge in the ASIC case has stepped down over a bias call




Read more by Kate Kachor @ investordaily.com.au
http://www.investordaily.com.au/cps/rde/xchg/id/style/10992.htm


----------



## Solly (12 February 2011)

> *Macquarie takes on ASIC over Storm litigation*
> 
> MACQUARIE Bank has accused the corporate regulator of vexatious litigation in pursuing damages from the collapse of Storm Financial.




Read more by Stuart Washington @ 
http://www.theage.com.au/business/macquarie-takes-on-asic-over-storm-litigation-20110211-1aqp5.html


----------



## Solly (12 February 2011)

> *ASIC in second Storm claim*
> 
> The Australian Securities and Investments Commission has launched another claim against Bank of Queensland and Macquarie Bank, on behalf of two aggrieved investors involved in the Storm Financial disaster.




Read more by Hannah Low in the Australian Financial Review 12 FEB 2011.


----------



## Quincy (12 February 2011)

Solly said:


> Read more by Hannah Low in the Australian Financial Review 12 FEB 2011.




See  :   
	

		
			
		

		
	

View attachment AFR - 12-13 FEB 2011.pdf


----------



## Garpal Gumnut (12 February 2011)

Quincy said:


> See  :
> 
> 
> 
> ...




Oh I do pine, when MQG ( Macquarie Bank, for the lurkers on this site) have their balls in a vice.

What a pack of tossers. 

Good on ASIC.

gg


----------



## Solly (24 February 2011)

> "Set on 2.5 acres (10,000sqm) of land with manicured lawns and formal gardens, this property is best described as an elegant private retreat. Beautifully designed with a distinct feeling of balance and harmony this two storey home offers comfortable living in well proportioned and tastefully decorated spaces."




If this is your style, then maybe this auction on Saturday 19th of March @ 4:00PM could be of interest to you.

More info here.

http://www.thehomepage.com.au/property/residential/99-london-belmont


----------



## Garpal Gumnut (24 February 2011)

Solly said:


> If this is your style, then maybe this auction on Saturday 19th of March @ 4:00PM could be of interest to you.
> 
> More info here.
> 
> http://www.thehomepage.com.au/property/residential/99-london-belmont




I may put a bid in prior to auction that could make the latter unnecessary.

gg


----------



## Solly (24 February 2011)

Garpal Gumnut said:


> I may put a bid in prior to auction that could make the latter unnecessary.
> 
> gg




GG
Do you think a pre-inspection would be worth it before making a final offer?
I'd like to know if there is really a Panic Room there.
S


----------



## Garpal Gumnut (24 February 2011)

Solly said:


> GG
> Do you think a pre-inspection would be worth it before making a final offer?
> I'd like to know if there is really a Panic Room there.
> S




It's not a bad house, one of the guys from the Creek I know was employed as a minder during all the hee ho 2 years ago, and he took some pickies on his box brownie. 

He's back inside now.

It's not a bad house, but in this market will go for my pre auction bid , I reckon.

gg


----------



## Solly (24 February 2011)

Garpal Gumnut said:


> It's not a bad house, one of the guys from the Creek I know was employed as a minder during all the hee ho 2 years ago, and he took some pickies on his box brownie.
> 
> He's back inside now.
> 
> ...




GG,

Sometimes it is beneficial to take a brief trip back in time.



> "“We’re one of the good guys and we’re trying to help our clients have a better life.”




An interesting report, 
Will the Cassimatis sell up? .whereilive.com.au/news


----------



## Solly (24 February 2011)

> *"STORM REP BANNED FOR FOUR YEARS*
> 
> A former Storm Financial representative has been banned from providing financial services for four years for making false and misleading statements and providing inappropriate advice to clients, following an investigation by the Australian Securities and Investments Commission (ASIC)."




More @www.moneymanagement.com.au by Ashleigh McIntyre. 
http://www.moneymanagement.com.au/news/storm-rep-banned-for-four-years


----------



## Garpal Gumnut (24 February 2011)

Solly said:


> GG,
> 
> Sometimes it is beneficial to take a brief trip back in time.
> 
> ...




The thing is Solly, I have an old mate who has lived in Railway Estate all his life. He is a keen gardener and fisherman. He worked for the Railway all his life, and is respected in his community, was in Lions etc. 

Now he knows every inch of his house and garden, and loves where he lives. He is the oldest on his street and respected by his family, friends and neighbours. 

Would he want to live in Manny's pile. Will Manny miss his pile. Does he know what grows in his garden?

Only he can answer I suppose. Rich men never get to smell the flowers or mulch. he can have his pile. 

Or give it to me for a song to onsell to another rich man who never smells his mulch.

gg


----------



## Solly (24 February 2011)

Garpal Gumnut said:


> The thing is Solly, I have an old mate who has lived in Railway Estate all his life. He is a keen gardener and fisherman. He worked for the Railway all his life, and is respected in his community, was in Lions etc.
> 
> Now he knows every inch of his house and garden, and loves where he lives. He is the oldest on his street and respected by his family, friends and neighbours.
> 
> ...




TouchÃ© GG, TouchÃ©.


----------



## Solly (25 February 2011)

> "*Manager banned over Storm advice*
> 
> Stuart Drummond, the former manager of Storm's Brisbane office, was banned by the Australian Securities and Investments Commission yesterday for four years from providing financial services after an investigation found he made false and misleading statements and provided inappropriate advice to clients."




More by Mitch Gaynor @
http://www.couriermail.com.au/ipad/adviser-banned-over-storm-advice/story-fn6ck2gb-1226011617566


----------



## Solly (25 February 2011)

> *"Storm adviser struck off, Cassimatises probed*
> 
> BRISBANE financial adviser, Stuart Craig Drummond, is the first of the former Storm Financial advisers to be censured, after being banned from providing financial services for four years.
> However, one of his victims, ruined retiree Frank Ainslie, said yesterday it was all "too little too late" and said Mr Drummond should have been barred for life."




More by Tony Raggatt @
http://www.townsvillebulletin.com.au/article/2011/02/25/210331_news.html


----------



## Garpal Gumnut (25 February 2011)

Solly said:


> More by Mitch Gaynor @
> http://www.couriermail.com.au/ipad/adviser-banned-over-storm-advice/story-fn6ck2gb-1226011617566






> "Manager banned over Storm advice
> 
> Stuart Drummond, the former manager of Storm's Brisbane office, was banned by the Australian Securities and Investments Commission yesterday for four years from providing financial services after an investigation found he made false and misleading statements and provided inappropriate advice to clients."




This is a further example of victims of financial scams being punished by ASIC.

This financially illiterate muppet should have been barred for life. 

He can change his name by deed poll, and in less than 4 years will be advising another generation of gullible investors.

gg


----------



## Solly (25 February 2011)

> *"Former Storm Financial representative banned*
> 
> Carey Ramm says... "This sends a pretty clear signal to the banks now that ASIC have been gathering very strong evidence, they've found evidence of wrong-doing and they're basically sending a very clear message to the banks that they need to come to the party, if they haven't already done so,"




More by Kim Lyell and Penny Timms @
http://www.abc.net.au/news/stories/2011/02/25/3148715.htm


----------



## Solly (25 February 2011)

Garpal Gumnut said:


> It's not a bad house, one of the guys from the Creek I know was employed as a minder during all the hee ho 2 years ago, and he took some pickies on his box brownie.
> 
> He's back inside now.
> 
> ...




GG,

I note that there are some open house times listed here.
http://city-news.whereilive.com.au/property/story/cassimatis-mansion-goes-to-auction/
I wonder if it isn't worth a quick call to Mike to arrange a quick wander through.
I'm might just check my calendar too.

S


----------



## Solly (26 February 2011)

> *"Storm founder Cassimatis sells up*
> 
> ...According to sources, disgruntled former clients have been harassing the Cassimatises, putting rubbish in their letter box and throwing rubbish over the wall of the Belmont home."




More by Tony Raggatt @
http://www.townsvillebulletin.com.au/article/2011/02/26/210801_news.html


----------



## Garpal Gumnut (26 February 2011)

Solly said:


> GG,
> 
> I note that there are some open house times listed here.
> http://city-news.whereilive.com.au/property/story/cassimatis-mansion-goes-to-auction/
> ...




I doubt if there is any point in going to the auction as it will be sold pre-auction.



> "Storm founder Cassimatis sells up
> 
> ...According to sources, disgruntled former clients have been harassing the Cassimatises, putting rubbish in their letter box and throwing rubbish over the wall of the Belmont home."




I know an unfortunate man with a mental illness who lives in a housing commission house, in Townsville, and this happens to him frequently, and he has never harmed a soul in his life. I know for whom I feel more empathy. 

I do hope they clean the rubbish away before my tenants occupy the Belmont property, should my pre-auction bid be successful.



Solly said:


> More by Tony Raggatt @
> http://www.townsvillebulletin.com.au/article/2011/02/26/210801_news.html




gg


----------



## Solly (26 February 2011)

Garpal Gumnut said:


> I doubt if there is any point in going to the auction as it will be sold pre-auction.
> 
> 
> 
> ...




GG 

Got a mate "No Neck Nick" who reckons it would make a great 'student conversion', make up to 180 self contained rooms, with bidets. PM me if you are interested. Nick may get his BSA licence back, on appeal, long story.

S


----------



## Garpal Gumnut (26 February 2011)

Solly said:


> GG
> 
> Got a mate "No Neck Nick" who reckons it would make a great 'student conversion', make up to 180 self contained rooms, with bidets. PM me if you are interested. Nick may get his BSA licence back, on appeal, long story.
> 
> S




And what would the NIMBY's say to that.!!

Belmont has a higher class of tosser than students.

I do believe you are correct about Nick.


gg


----------



## Solly (27 February 2011)

> *"STATE of Origin legend Wally Fullerton Smith is in a legal fight to save his million-dollar Gold Coast home*
> ...was a financial planner with the collapsed Storm Financial Group."




More by Paul Weston @
http://www.couriermail.com.au/ipad/tough-tussle-for-hardman-of-origin/story-fn6ck51p-1226012619431


----------



## Solly (27 February 2011)

Garpal Gumnut said:


> I doubt if there is any point in going to the auction as it will be sold pre-auction.
> 
> 
> 
> ...





GG 
I've been speaking with my Stormer mate about Tony Raggatt's article. 
My mate is amazed about the reported property holdings.
I don't believe that he is "in the same boat" as EC and my mate definitely has a different definition of the word "destroyed".
S


----------



## Solly (3 March 2011)

> *"Storm founders open doors to lavish mansion*
> 
> The founders of fallen Queensland investment firm Storm Financial have opened the doors of their palatial Brisbane property to the public ahead of its auction later this month."




More by Marissa Calligeros @
http://www.brisbanetimes.com.au/queensland/storm-founders-open-doors-to-lavish-mansion-20110303-1bg14.html


----------



## Garpal Gumnut (3 March 2011)

Solly said:


> More by Marissa Calligeros @
> http://www.brisbanetimes.com.au/queensland/storm-founders-open-doors-to-lavish-mansion-20110303-1bg14.html







gg


----------



## Solly (5 March 2011)

Garpal Gumnut said:


> gg





GG 

I spent some time yesterday afternoon with my Stormer mate before I left Brislantis and returned to the Cove. It's been a while since we've had a face to face meeting and I'm quite amazed how gaunt he is looking. I reckon he's still struggling deep inside but trying to put on a brave face to weather the storm, his missus is still doing it hard.

We spoke about the recent tragedies of the floods, cyclone & quakes and how devastating it is for those affected. He brought up how the public perception of those events is so different to those wiped out by the Storm collapse. He tries to keep it quite that he was an investor as he feels he gets painted as greedy and foolish. I know this is not the case, he's no high flyer and has always lead a very quite, risk adverse and conservative life. Probably the exact opposite of me.

That's what surprises me so much that he would have been involved in this type of risky leveraged scheme. Somebody is really, really good at selling the dream. I believe he is typical of so many touched by this collapse. He's seems to still be in shock about the way his life has changed and is really hoping ASIC can do something else to ease his burden but is really not that confident.

I know he can't believe how the banks just walked away, pulled the rug from under him but made good commissions etc, he grunts and shakes his head when I mention EC and his advisers. I mentioned the property sales and reported recent purchase of the new home, he was silent and couldn't talk.

It's a bit of a wet soggy day here in the S/E, just hope my Blundstones don't tramp to much mud on the carpets during the open house.

S


----------



## Garpal Gumnut (5 March 2011)

Solly said:


> GG
> 
> I spent some time yesterday afternoon with my Stormer mate before I left Brislantis and returned to the Cove. It's been a while since we've had a face to face meeting and I'm quite amazed how gaunt he is looking. I reckon he's still struggling deep inside but trying to put on a brave face to weather the storm, his missus is still doing it hard.
> 
> ...




I feel for your mate, many here in Townsville are similarly affected and see the Storm spruikers and the Banks getting on with their lives.

It is very disheartening for them. 

gg


----------



## Garpal Gumnut (14 March 2011)

I just thought I'd bump this thread up.

Lest we forget.

The greatest attrition of wealth in North Queensland in a century.

And the perpetrators would appear to be getting off scott free.

Where is ASIC?

Where are Slater and Gordon?

It is a disgrace.

gg


----------



## Solly (15 March 2011)

Garpal Gumnut said:


> I just thought I'd bump this thread up.
> 
> Lest we forget.
> 
> ...





GG,

As reported in the AFR on the 7th March '11



> *"Inquiry turns to Storm executives"*
> 
> The investment advice and business practices of several senior former executives of Storm Financial are under review by the regulator.




Looks like something big is brewing in ASIC-land.
I believe there are some really interesting times ahead.


----------



## Garpal Gumnut (16 March 2011)

Solly said:


> GG,
> 
> As reported in the AFR on the 7th March '11
> 
> ...




Solly mate, I honestly do not think that ASIC have the balls or the budget to chase the perpetrators.

All apparent involved parties have been going to cash, to run a litigation/criminal defence against a legal pursuit.

gg


----------



## GumbyLearner (16 March 2011)

Garpal Gumnut said:


> I just thought I'd bump this thread up.
> 
> Lest we forget.
> 
> ...




Yes. Scumbags!


----------



## Solly (16 March 2011)

> *"FPA expels former Storm adviser*
> Conduct committee upholds findings
> 
> The FPA has expelled former Storm Financial adviser Gus Dalle Court."




More by Kate Kachor @
http://www.investordaily.com.au/cps/rde/xchg/id/style/11233.htm


----------



## Solly (18 March 2011)

Garpal Gumnut said:


> Solly mate, I honestly do not think that ASIC have the balls or the budget to chase the perpetrators.
> 
> All apparent involved parties have been going to cash, to run a litigation/criminal defence against a legal pursuit.
> 
> gg




GG,

Before I left Brislantis for the Cove today, I met with my Stormer mate @ Jimmy's for a brew or two. He mirrors your position regarding ASIC's abilities to bring the perpetrators to account. He's confused and unsure and doesn't know where the real blame lies. He's just not looking good. He said he thought he had planned well, made the right call but still can't really believe where he's ended up.

I'm worried about him, I'm worried about his missus too. He's putting on a brave face but he's not walking tall as he did before. I've heard some sad and tragic stories linked to this event. I hope he's not travelling down the same path. I'm sure he's not for deep inside there's a fire that burns that fuels him to fight on to the end.

The challenge is truly with the regulator to dig deep and discover the root cause of this debacle. Maybe there is some hope of restitution, punishment and incarceration if it is proven that participants in this folly have acted in breach.

Let's see those with the power step up to the plate.

S


----------



## Garpal Gumnut (18 March 2011)

Solly said:


> GG,
> 
> Before I left Brislantis for the Cove today, I met with my Stormer mate @ Jimmy's for a brew or two. He mirrors your position regarding ASIC's abilities to bring the perpetrators to account. He's confused and unsure and doesn't know where the real blame lies. He's just not looking good. He said he thought he had planned well, made the right call but still can't really believe where he's ended up.
> 
> ...




All precedents would suggest that the perpetrators will get off scot free. Not a nice outcome for the victims.

gg


----------



## capt_thunderbolt (19 March 2011)

Solly said:


> More by Marissa Calligeros @
> http://www.brisbanetimes.com.au/queensland/storm-founders-open-doors-to-lavish-mansion-20110303-1bg14.html




http://www.couriermail.com.au/busin...e-is-kept-secret/story-e6freqmx-1226024693626

Looks like it sold a couple of weeks ago before the auction......


----------



## Garpal Gumnut (19 March 2011)

capt_thunderbolt said:


> http://www.couriermail.com.au/busin...e-is-kept-secret/story-e6freqmx-1226024693626
> 
> Looks like it sold a couple of weeks ago before the auction......




It went for $2.75m, I have been informed, give or take a few hundred grand.

Manny and Julie Cassimatis  have downsized to a $950,000 pile.

Such is life.

There has been little comment on the emotional cost to Manny and Julie, they are victims as well, they say, in the same lifeboat, as their clients.

Here in Townsville , the Burdekin and Ingham , these arguments have little weight, and surprisingly are countered by violent disputations as to the character, ethics and morality of Manny and Julie Cassimatis.

Whether these counter arguments to Manny and Julie's protestations are valid, is not for me to decide. 

It would be a form of closure for Manny and Julie Cassimatis to front their investors in Townsville, in a public forum, to update them on the litigation proceeding, and to share the sense of loss, failure and shame that has bedevilled Storm investors.

gg


----------



## Solly (20 March 2011)

...


----------



## Solly (20 March 2011)

Garpal Gumnut said:


> It went for $2.75m, I have been informed, give or take a few hundred grand.
> 
> Manny and Julie Cassimatis  have downsized to a $950,000 pile.
> 
> ...




GG

From Daryl Passmore's article quoted above



> ASIC is seeking a $1.6 million fine and a ban on the couple running a company.
> 
> ASIC has also launched legal action against the Commonwealth Bank, Bank of Queensland and Macquarie Bank, seeking compensation for investors arising out of the Storm collapse.
> 
> The couple are suing the Commonwealth Bank for $17 million, claiming misleading and deceptive conduct.




Really sums it all up about where things are at the moment. Time is of the essence now.
And in the mean time I'm watching a mate turning into a shell of the person he was before. I'm sure he's not alone.

S


----------



## Smiley (21 March 2011)

Solly, I am in touch with a number of the former Storm clients and many have aged more than 3 years, since the collapse of their portfolios.  What I have learned more and more is that Storm went after retirees, with ample savings, super and homes without mortgages.  The so called advisers knew nothing about super, centrelink, taxation - only borrow up to the hilt and pay big fees. 
It is not only the loss of $, but the self criticism and embarrassment and loss of faith in those they trusted, the banks and their own judgment. Do they care about the mental or physical health of the Cassimatises - no way. . . many have not only lost homes and savings, but are struggling to pay for basic essentials.  Sorry no sympathy GG for Emmanuel and Julie.  In the crisis they told people to do it themselves (manage their portoflios, margin loans, etc) and claimed outrageously that people knew they could lose their homes.  Still hoping ASIC does go after all the ex-Storm advisers and they all are banned.


----------



## Solly (30 March 2011)

> *Tony D'Aloisio retires*.."admitted he wanted to move earlier against the founders of collapsed financial services group Storm Financial and said ASIC could have done more early in his tenure to address a perceived "expectation gap" about its ability to deliver outcomes to aggrieved investors"




More by Damon Kitney @ 
[video]http://www.theaustralian.com.au/business/go-easy-on-directors-says-retiring-corporate-regulator/story-e6frg8zx-1226030325253[/video]


----------



## Garpal Gumnut (30 March 2011)

Solly said:


> More by Damon Kitney @
> [video]http://www.theaustralian.com.au/business/go-easy-on-directors-says-retiring-corporate-regulator/story-e6frg8zx-1226030325253[/video]






> Tony D'Aloisio retires.."admitted he wanted to move earlier against the founders of collapsed financial services group Storm Financial and said ASIC could have done more early in his tenure to address a perceived "expectation gap" about its ability to deliver outcomes to aggrieved investors"




Thanks for the alert Solly. I was awoken by my Storm **** meter, and decided to go on to ASF before reading my newspapers, and was unsurprised to see your post.

I wonder how Manny reads this. Is he off the hook? or is he deeper in my meter?

gg


----------



## Quincy (30 March 2011)

.
Macquarie Bank claims that ASIC's Section 50 action is invalid.




> *Storm court action too broad: Macquarie*
> 
> Stuart Washington - March 24, 2011
> 
> ...




http://www.smh.com.au/business/storm-court-action-too-broad-macquarie-20110324-1c7s6.html


----------



## Quincy (31 March 2011)

.
Maybe the below article offers some explanation as to why Tony was so slow in attending to the Storm Financial matter (both before and after its demise).  




> *Secrets among the splendour*
> 
> Scott Rochfort, Michael West - March 31, 2011
> 
> ...




Don't worry, there are no loopholes in ASIC's regulatory system for anyone to take advantage of.


----------



## Solly (4 April 2011)

*From https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument*


*When matters are next in Court*

Below are the dates and venues when proceedings ASIC have commenced in relation to the collapse of Storm are next in Court.

*Proceedings are being held in public so anyone interested may attend.*

21 April 2011	ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

14 & 15 June 2011	ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

To be advised by Court	ASIC and Doyle proceedings 
Federal Court, Sydney
Justice Foster
Court Room 18B
Queens Square
Level 18, Law Courts Building
Queens Square
Sydney NSW 2000

I suppose I'm off to Harry's again and donning the dark glasses, fake moustache, wig, green pollyester body shirt & brown flares again. These indeed will be very interesting times...
Better make sure @bundylennie has a full charge in the pack for his XDCAM.


----------



## Solly (18 April 2011)

Garpal Gumnut said:


> Thanks for the alert Solly. I was awoken by my Storm **** meter, and decided to go on to ASF before reading my newspapers, and was unsurprised to see your post.
> 
> I wonder how Manny reads this. Is he off the hook? or is he deeper in my meter?
> 
> gg




GG

As the 21st approaches I wonder how many Stormers are going to roll up at Harry's?

It must be very hard for some of them. I am very interested in this action by ASIC.

I just have a feeling that this will be a lengthy process.

S


----------



## kingcarmleo (18 April 2011)

Need the book thrown at em.


----------



## Mash (18 April 2011)

The ant army will be on the march...... stormies are rallying to make the banks accountable for their equal part in the decimation of our lives.....


----------



## Solly (18 April 2011)

Mash said:


> The ant army will be on the march...... stormies are rallying to make the banks accountable for their equal part in the decimation of our lives.....




Mash

The "ant army" sounds interesting to me. I'm now starting to wonder what the Stormers have planned for Harry's. Is there some sort of protest action being planned and an "ant" platoon being mobilised ?

Should the camera ops make sure that they have a full charge in their packs and a spare SxS card ?
I'm sure they won't want to miss a thing.

My sources are telling me that there is still a high level of anger still simmering with those impacted by this event. I know my mate is looking drawn and worn and is only moderately hopeful that Tony's mob can achieve a positive result.

Is SICAG still active ? Their website appears to be static.

I'm sure much will be revealed in the proceedings over the next few weeks.

I just wonder what else will be uncovered and if further actions will follow.


----------



## Solly (20 April 2011)

Makes it real now, doesn't it.

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Thursday, 21 April 2011

Harry Gibbs Commonwealth Law Courts Building
Justice Reeves Court No. 5, Level 7

10:15 AM Directions

4 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED

5 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

See you there


----------



## Garpal Gumnut (20 April 2011)

Solly said:


> Makes it real now, doesn't it.
> 
> FEDERAL COURT OF AUSTRALIA
> Queensland Registry
> ...




As it happens, I'm on the redeye, strikes not occuring, I shall see you there mate.

gg


----------



## Solly (20 April 2011)

Garpal Gumnut said:


> As it happens, I'm on the redeye, strikes not occuring, I shall see you there mate.
> 
> gg




Ok GG,

I'll be hanging out the front near the garden by the Goodwill Bridge at around 9:30, I want to make sure I get a good seat. My sources tell me the Stormers are planning a bit of a statement. I don't want to miss that, I hope the camera ops cover it from all angles, should make some good grabs for 6PM.

S


----------



## Solly (21 April 2011)

Well standing room only today at Harry's . A really good turn out from the Stormers. Those "Ant" Badges were a nice touch. Although the yellow and black colour of those badges looked very familiar. Which bank?  
And GG how did you get away with wearing your fedora inside ? 
The legal positions look complex.


----------



## Mindstorm (21 April 2011)

Solly said:


> Well standing room only today at Harry's . A really good turn out from the Stormers. Those "Ant" Badges were a nice touch. Although the yellow and black colour of those badges looked very familiar. Which bank?
> And GG how did you get away with wearing your fedora inside ?
> The legal positions look complex.





Solly, I think more than you were surprised to see so many of us there.

Apparently, they are going to try and get a bigger court next time.   

Thanks for your comments on our badges, and thanks too for realising that they were ants and not 'money spiders'.


----------



## Solly (21 April 2011)

*Anger soars as class action commences against collapsed investor Storm Financial.*

6:30PM with George Negus

[video]http://ten.com.au/video-player.htm?movideo_m=103473[/video]


----------



## zzz (22 April 2011)

I'm glad this is back in the media eye again.  All we need now is 60 minutes to do a followup story soon and it may just push the banks over the edge!


----------



## Garpal Gumnut (22 April 2011)

It was an impressive show of force by the wronged.

Well done ants. 

Spiders, beware of the force of many small investors against institutions and Lear jet lovers.

gg


----------



## Solly (24 April 2011)

Garpal Gumnut said:


> It was an impressive show of force by the wronged.
> 
> Well done ants.
> 
> ...




GG

I've been thinking about what I observed at Harry's the other day. This is the biggest group of Stormers that I've seen in one place for a while, probably since the Hearings or when Manny turned up to the Inquiry. There were a few familiar faces, it was obvious to me that stress has taken its toll on some. I think the Stormers' public display of unity was very beneficial and added to their resolve to seek justice and to find the real answers and the root cause of this debacle.

I do believe it was quite a surprise to the court bureaucracy when so many turned up to the courtroom. My sources gave me a hint that something was up and I was very surprised with the numbers and the subtle statement with the ant badges. I think some of the legal brigade and aides were quite taken back about being allocated to standing room only areas. Nobody owns the turf in the public arena. I suppose there will now definitely be more public and Stormers attending future sittings and proceedings. A larger court will definitely be a necessity.

Did you see Sergeant Sean in the Negus link above? I believe he's the real driving asset for the Stormers and I'm sure his training and background will innately kick in. I have a feeling no stone will be left unturned and I am eager to see what evidence is presented. To me he appears determined, focused and unflappable. If there is a 'smoking gun' in all of this I would not be surprised if he's the one to find it. The last thing you want in a case like this is an aggrieved copper who isn't on your side.

I am eagerly awaiting the next phases in this action and I will be following closely ASIC's case against the Directors. 

S


----------



## Solly (4 May 2011)

> *"Deputy PM in hot water with Storm clients
> Storm litigator writes open letter*
> The Deputy Prime Minister has angered members of a Storm Financial class action over his choice of t-shirt."




From Kate Kachor @ http://www.investordaily.com/cps/rde/xchg/id/style/11551.htm


And here is the picture of Wayne Swan that has caused the comment..
http://www.couriermail.com.au/ipad/the-treasurer-walks-a-fine-line/story-fn6ck4a4-1226043477632


----------



## Solly (5 May 2011)

> *"WAYNE Swan has come under fire for insulting hundreds of Storm Financial victims by sporting a jersey brandishing a large Commonwealth Bank logo.*
> Wayne Swan's Commonwealth Bank jersey 'insults' Storm Financial victims."




More by Anna Caldwell @ http://www.couriermail.com.au/business/wayne-swans-commonwealth-bank-jersey-insults-storm-financial-victims/story-e6freqmx-1226050042641


----------



## Solly (7 May 2011)

*An interesting site created by an ex-Storm Client created for former Storm Financial investors:*

*"Storming on Banks"*

https://sites.google.com/site/stormingonbanks/

A very interesting read and a huge depth of material.


----------



## Solly (8 May 2011)

> "*Storm boss Emmanuel Cassimatis in legal battle with nephew over cane farm*
> THE founder of failed Storm Financial is taking legal action against his nephew in a bid to get him to hand over his shares in a north Queensland cane farm partnership and move off the property."




More by Kay Dibben @ www.couriermail.com.au/business/


----------



## Solly (8 May 2011)

Solly said:


> *An interesting site created by an ex-Storm Client created for former Storm Financial investors:*
> 
> *"Storming on Banks"*
> 
> ...




I've had a bit of spare time to read and digest some of the comment on the above site.

On the link "Purpose of this site"
https://sites.google.com/site/stormingonbanks/our-company

There is quite a lengthy pdf titled "Plausible Deniability- How the Banks and Storm Financial condemned thousands of Australians into financial oblivion".

I found this to be an interesting written first hand account and opinion by someone directly affected by this saga.


----------



## Glen48 (8 May 2011)

The whole thing would have failed  regardless of what was put in place, AS house prices started to tank as they are now doing  Strom etc would have asked formore equity and this equity would not have been available to the _investors/ victims_ so a lot would have folded anyway

  I was the Australia version of a Made Off ponzi scheme.
 The only winner's will be the people on reverse mortgages who die and leave their worthless house to the bank and for the taxpayer to foot the bill for the banks.


----------



## Solly (9 May 2011)

> *"Storm's victims do investors a favour*
> Storm Financial's embattled investors should be remembered for the service they have done Australia's investors generally."




More by Stuart Washington @ www.brisbanetimes.com.au


----------



## Solly (19 May 2011)

The Stormers have been a little quiet of late.

I'm just wondering what activities they have planned.

Something makes me believe, that may be just something could be brewing.


----------



## Solly (22 May 2011)

It is stated on https://stormingonbanks/yesterday-s-news/forthcoming-events-1,

that Levitt Robinson will conduct a Public Meeting in Townsville on Wednesday, 1 June 2011.

I am very interested to know what the outcomes of this meeting will be.


----------



## Garpal Gumnut (22 May 2011)

Solly said:


> It is stated on https://stormingonbanks/yesterday-s-news/forthcoming-events-1,
> 
> that Levitt Robinson will conduct a Public Meeting in Townsville on Wednesday, 1 June 2011.
> 
> I am very interested to know what the outcomes of this meeting will be.




I have previously posted on the timelines of debacles such as Storm, and the latest meeting from Lawyers Levitts lies just where it should in the historical tumble dry of this sordid affair.

I enclose a post from sqwark from near the beginning of this crime.

gg



sqwark7600 said:


> Storm clients will be proven in the courts to be victims of a well planned, very smooth and aggressive scam.
> Like most past scams:
> There will be a cadre of activists in the group to take the lead and fight for their rights.
> Creditors will wait in line for a small percentage of their money.
> ...


----------



## Glen48 (22 May 2011)

I remember on 4 corners were a group hired a yatch and imported a ton of drugs and were cashed up so they had Harley's Fancy cars etc and were renting a unit which make some one suspicious sas to not owning a house with that much loot ,so the cops got them  as they had a lot of loot they hired a top lawyer to fight the case until the loot ran out and then told the dealsers  to plead guilty and do the time.
 Crooks in jail Lawyer has the profits of crime.


----------



## Solly (22 May 2011)

Garpal Gumnut said:


> I have previously posted on the timelines of debacles such as Storm, and the latest meeting from Lawyers Levitts lies just where it should in the historical tumble dry of this sordid affair.
> 
> I enclose a post from sqwark from near the beginning of this crime.
> 
> gg





GG,

It's amazing, after following this saga, 
how many milestones in the above list I have ticked off.

I'm wonder if the next phase that is being entered is,

*"get your act together and then go for the jugular".*

I believe that there are many more surprises ahead.

S


----------



## Solly (26 May 2011)

Solly said:


> "WAYNE Swan has come under fire for insulting hundreds of Storm Financial victims by sporting a jersey brandishing a large Commonwealth Bank logo.
> Wayne Swan's Commonwealth Bank jersey 'insults' Storm Financial victims."
> More by Anna Caldwell @ http://www.couriermail.com.au/business/wayne-swans-commonwealth-bank-jersey-insults-storm-financial-victims/story-e6freqmx-1226050042641




I believe Mr Swan's office has now clarified the reason why he was wearing the shirt pictured in the above article.

Apparently he was just showing his support for the Australian cricket team by wearing their jersey.


----------



## Solly (2 June 2011)

*ASIC civil penalty proceedings proceedings against the Cassimatises*

14 & 15 June 2011	
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

Let's hope they have booked one of the larger court rooms on Level 7.
I believe that there will be quite a turn out by those impacted and interested.

Standing room only? 

I wonder what statement the Stormers will make this time ?

Should be quite a media scrum on steps on North Quay.


----------



## Solly (4 June 2011)

GG,

I got a tweet from a mate to remind me that the next court dates regarding the

*ASIC unregistered managed investment scheme proceedings* are,

8 & 9 June 2011	
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000.

More details at ASIC here;
https://storm.asic.gov.au/storm/storm.nsf/byheadline/UMIS%20proceedings?opendocument

I believe that these will be pivotal proceedings.

Will you be able to make it down for this?


----------



## Garpal Gumnut (4 June 2011)

Solly said:


> GG,
> 
> I got a tweet from a mate to remind me that the next court dates regarding the
> 
> ...




I had planned to be down the following week, but if you feel this may be more insightful, I may go earlier.

gg


----------



## Solly (4 June 2011)

Garpal Gumnut said:


> I had planned to be down the following week, but if you feel this may be more insightful, I may go earlier.
> 
> gg




GG

I believe there will be the usual posturing next week. I suppose it's the following week that will have the real added valued, considering who the participants are.

My sources are telling me that the surviving Stormers are not a very happy bunch at the moment and are somewhat restless. 

I wouldn't be surprised if they didn't make some sort of statement when things get under way at Harry's.

I hope my old mate Lennie has his packs fully charged on his trusty XDCAM, there could be quite a spectacle. 

Wouldn't want to miss a thing.

S


----------



## Solly (7 June 2011)

Solly said:


> GG,
> 
> I got a tweet from a mate to remind me that the next court dates regarding the
> 
> ...




It's on in Court number 1 at 2:15 PM

I suppose I will see all the regulars there.


----------



## Solly (8 June 2011)

Solly said:


> It's on in Court number 1 at 2:15 PM
> 
> I suppose I will see all the regulars there.




A huge turn out today in the fish bowl of Court no. 1

Nice touch from the Stormers with the name badges.

Some good legal posturing.

Off to Court no. 2 tomorrow at 10:15.

I'm very interesred to see where this will lead....


----------



## Garpal Gumnut (8 June 2011)

Solly said:


> A huge turn out today in the fish bowl of Court no. 1
> 
> Nice touch from the Stormers with the name badges.
> 
> ...




If there is a good turnout this week, it will be huge next, I'll get the chef at Lennons to pack some some bacon sarnies in my picnic basket.

From the ASIC website some background to proceedings this week and next.

https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument



> 24 February 2011
> The Cassimatis Civil penalty proceeding returned to Court today for directions before the Honourable Justice Reeves.
> 
> At this hearing various orders were made by the Court including:
> ...






> Civil penalty proceedings against the Cassimatises
> Summary
> On 21 December 2010 ASIC (as Applicant) began legal action in the Federal Court of Australia (Brisbane) against the executive directors of Storm Financial Limited (Receiver and Manager Appointed)(In Liquidation)(“Storm”), Emmanuel and Julie Cassimatis (as Respondents).
> 
> ...




gg


----------



## Solly (8 June 2011)

Garpal Gumnut said:


> If there is a good turnout this week, it will be huge next, I'll get the chef at Lennons to pack some some bacon sarnies in my picnic basket.
> 
> From the ASIC website some background to proceedings this week and next.
> 
> ...




GG 

Yep, I reckon you are right on the money. Gee, the Stormers do look like a focused bunch. I overheard some general chatter in the foyer, I did once think that their resolve may wane with time. I do now firmly believe that they are getting their second wind. They are definitely out to see a fairer outcome and for justice to be well and truly served.

They are still maintaining their rage and really seem to be a cohesive bunch. I've heard some really sad stories, since this saga commenced. I hope Themis does her work.

S


----------



## Solly (10 June 2011)

Garpal Gumnut said:


> If there is a good turnout this week, it will be huge next, I'll get the chef at Lennons to pack some some bacon sarnies in my picnic basket.
> 
> From the ASIC website some background to proceedings this week and next.
> 
> ...





*FEDERAL COURT OF AUSTRALIA
Queensland Registry
Tuesday, 14 June 2011*

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000
Justice Reeves Court No. 5, Level 7

10:15 AM Hearing and Notice of Motion

ASIC v EMMANUEL GEORGE CASSIMATIS & ANOR

BTW GG, I sent a telex, the bacon sarnies are locked in


----------



## Solly (11 June 2011)

*"Big banks try to quash ASIC Storm case"*

ABC's Annie Guest meets with two former investors, Frank Ainslie & Helen Gillies.

http://www.abc.net.au/am/content/2011/s3241568.htm


----------



## Garpal Gumnut (13 June 2011)

Solly said:


> *FEDERAL COURT OF AUSTRALIA
> Queensland Registry
> Tuesday, 14 June 2011*
> 
> ...




The telex brings back fond memories of my time with WUTC and other spooks.

It is so cold in Brisbane, I had to transit there on my way back from quoting on a fit out for some accommodation in Nauru. I am unable unfortunately to be in Bne this week, as I am moving out of my eyrie for the V8's, and have elected to go to the Creek to make up for unpaid fines, for a month or so. It will give me a chance to catch up on my PhD.

While there I shall educate the populace of Stuart Creek on a possible influx of new inmates, from the financial class of 2008/9. According to my calculations they will hit intake in September 2012.

The wheels of justice move slowly. The loot gets taken from the guilty via barristers, fines and court fees. Then they go for criminal charges. Slowly they sell down their assets.

It is so unfair that the victims are not afforded the luxury of that time space.



Solly said:


> *"Big banks try to quash ASIC Storm case"*
> 
> ABC's Annie Guest meets with two former investors, Frank Ainslie & Helen Gillies.
> 
> http://www.abc.net.au/am/content/2011/s3241568.htm




Frank and Helen are good people and deserve better in a more timely manner from ASIC.

gg


----------



## Solly (13 June 2011)

Garpal Gumnut said:


> The telex brings back fond memories of my time with WUTC and other spooks.
> 
> It is so cold in Brisbane, I had to transit there on my way back from quoting on a fit out for some accommodation in Nauru. I am unable unfortunately to be in Bne this week, as I am moving out of my eyrie for the V8's, and have elected to go to the Creek to make up for unpaid fines, for a month or so. It will give me a chance to catch up on my PhD.
> 
> ...




GG,

I hope your field work for your thesis submission is productive. I am a little apprehensive to ask what is your professional area of expertise but I have a hunch. The Creek, I hear can provide good structured solitude while affording time to brush up on horticultural skills. 

Are they still "top and tailing" in high security or has Mr Fraser made provisions in the previous budget for extra bunks ? 

Your prediction about the future of the masters of the financial fantasy alumni may well be proven to be true.

I look forward to tomorrow, I am very eager to see the case that ASIC presents. I also look forward to the arguments of rebuttal. 

I have trust in Themis to deliver the unbiased outcome. 

S


----------



## Judd (14 June 2011)

Sometimes you win and then, darn it, you lose.  Isn't this the fella who has had some input to action by former Storm clients against the CBA and other banks?

With legal action the outcome is never certain no matter how much you think you are in the right.



> *Barrister loses case over margin call*
> Elisabeth Sexton
> June 11, 2011
> 
> ...



Read more: http://www.smh.com.au/business/barr...margin-call-20110610-1fww2.html#ixzz1PBqAXrg1


----------



## Mash (14 June 2011)

Goodridge was a shot in the arm when we needed it..... huge difference is he got a margin call (timing was the issue) and he had a direct relationship with the Margin lender.... the Storm victim's case is based on the unregistered investment scheme... the banks and storm were partners... the investors the fodder..as admitted by Ralph Norris... CBA lost sight of who the client was..Storm was their client and the investors were of little significance ... the banks are doing what they can to stave off the inevitable... we have so much evidence against them and they know it... they will not allow all of that evidence to come out..it will hurt them too much.... they will capitulate!! It will just take time.... The ant army are a patient bunch...still very angry ... but patient!


----------



## Solly (24 June 2011)

Solly said:


> In the Eye of the Storm
> THE COLLAPSE OF STORM FINANCIAL
> 
> An Essay by Paul Barry in The Monthly
> http://www.themonthly.com.au/collapse-storm-financial-eye-storm-paul-barry-2980




The above link now takes you to the complete essay.


----------



## Julia (24 June 2011)

Solly said:


> The above link now takes you to the complete essay.




Perhaps this should also appear in the Financial Advisers thread, Solly?

If there was ever a tale of misery which should act as a brake to anyone thinking of totally trusting any financial adviser, Storm is it.


----------



## Garpal Gumnut (24 June 2011)

Julia said:


> Perhaps this should also appear in the Financial Advisers thread, Solly?
> 
> If there was ever a tale of misery which should act as a brake to anyone thinking of totally trusting any financial adviser, Storm is it.




Hear hear , Julia.

gg


----------



## Solly (7 July 2011)

> "*Margin loan claims 'should be struck out'*
> 
> TWO Sydney doctors should not be allowed to sue the Commonwealth Bank for lack of good faith or unconscionable conduct over margin loans they took out while clients of Storm Financial, the bank told the Federal Court yesterday."




More by Elisabeth Sexton @ http://www.theage.com.au/business


----------



## Solly (7 July 2011)

> *"ASIC ordered to amend Storm claim*
> Case against founders continues
> 
> ASIC has until next week to file notice of changes to its statement of claim in its legal action against the founders of Storm Financial."




More by Kate Kachor @ http://www.investordaily.com.au


----------



## Solly (13 July 2011)

Now that Greg Medcraft has taken over the reins as the head of ASIC, I wonder how his approach to the Storm matter will differ from his predecessor, Tony D'Aloisio ?

GG, do you have any intel ,background about Mr Medcraft that you are willing to share ?


----------



## Solly (16 July 2011)

> "*Unconscionable conduct still a grey area*
> Buyer beware ... the declarations margin loan customers sign can work in a bank's favour in court."




More by Elisabeth Sexton @ http://www.theage.com.au/business


----------



## Solly (17 July 2011)

> "*Storm Financial victims to be in a documentary that began filming last week*
> 
> "It's an opportunity for the people who were victims of the Storm affair to tell their own stories in a way they would not have the opportunity to do in a class action," Mr Levitt said."




More by Daryl Passmore @ http://www.couriermail.com.au


----------



## DocK (17 July 2011)

Solly said:


> "Storm Financial victims to be in a documentary that began filming last week
> 
> "It's an opportunity for the people who were victims of the Storm affair to tell their own stories in a way they would not have the opportunity to do in a class action," Mr Levitt said."
> 
> More by Daryl Passmore @ http://www.couriermail.com.au




Although I'm sure it would be an eye-opening doco for some, I'm wondering (perhaps too cynically) if the real reason for Mr Levitt's press release re proposed doco is to give the banks a nudge towards maybe settling out of court and avoiding the extra negatuve exposure.  I wonder if plans for the doco might be shelved if the banks came to the party????  Could be $250 well paid for the stormers who've funded it if it results in a speedier resolution to their claims.


----------



## Garpal Gumnut (17 July 2011)

Solly said:


> Now that Greg Medcraft has taken over the reins as the head of ASIC, I wonder how his approach to the Storm matter will differ from his predecessor, Tony D'Aloisio ?
> 
> GG, do you have any intel ,background about Mr Medcraft that you are willing to share ?




Not much to share, I've heard nothing adverse.

He will pursue those guilty in the Storm debacle. Not a bad turn of events, although it may not change much all that quickly.

gg


----------



## Solly (18 July 2011)

DocK said:


> Although I'm sure it would be an eye-opening doco for some, I'm wondering (perhaps too cynically) if the real reason for Mr Levitt's press release re proposed doco is to give the banks a nudge towards maybe settling out of court and avoiding the extra negatuve exposure.  I wonder if plans for the doco might be shelved if the banks came to the party????  Could be $250 well paid for the stormers who've funded it if it results in a speedier resolution to their claims.




DocK, I'm sure that there will be some very interesting angles captured. The media game is changing, sure it is fine to produce a tight well cut doco and maybe it will find some prime time airtime as well. I've seen a lot of change while I've been around this game.

But the wired world is changing quickly, especially now in the social media space. The one thing that is very different now is that everybody with a smart phone is their own ENG unit, with an instant uplink to the world. You don't need a 3 man crew and an hour in post to send a message to the world any more. 

I don't know what Stewart has storyboarded or who the talking heads will be but maybe these days that is not so important. Reputation and customer perception is what is driving many in the corporate world today, especially where offerings are so similar and hard to differentiate. 

Maybe a few well edited grabs on some key matters in this saga which expose the corporate wrongs, that may very well go viral is all that is needed to put a lasting dent in the corporate pride and integrity.

You may very well be right, this may be the best $250 the Stormers have ever spent.


----------



## Garpal Gumnut (18 July 2011)

Solly said:


> More by Daryl Passmore @ http://www.couriermail.com.au




re Levitt's movie.

Will you be starring, Solly?

Someone from ASF should go, I will be doing a commercial with Cate and the bloke from the Castle for a new cigar about to hit our blessed carbon shores, otherwise I'd put on me pumps and hose.

We were leading men when the others were taking elocution lessons from the Athen's School of Drama and Investment on the Terrace.

gg


----------



## Solly (19 July 2011)

Garpal Gumnut said:


> re Levitt's movie.
> 
> Will you be starring, Solly?
> 
> ...




GG

I haven't received an invite but I will keep an eye on my inbox. Although I probably wouldn't get clearance unless I appeared in silhouette and used a Stephen Hawking-esque vox filter. You know what corporate are like these days.

It will be very interesting to see the final cut or even some leaked rushes of the Levitt movie. I suppose you just never know what ends up on YouTube these days. 

Good luck with your shoot, I believe you do have a bit of a rep of nailing your lines in one take. 

S


----------



## Garpal Gumnut (25 July 2011)

Solly said:


> GG
> 
> I haven't received an invite but I will keep an eye on my inbox. Although I probably wouldn't get clearance unless I appeared in silhouette and used a Stephen Hawking-esque vox filter. You know what corporate are like these days.
> 
> ...




Any news on the movie, mate?

gg


----------



## Solly (26 July 2011)

Garpal Gumnut said:


> Any news on the movie, mate?
> 
> gg





No GG, I haven't seen any wilds or dailies. I believe Stewart is keeping a very tight rein on this one. Maybe there's some quite controversial material hitting the edit suite.

Maybe the crew can also get a quick comment about the saga from Sir Ralph before he moves on, puts on the smoking jacket, puts his feet up in his drawing room and moves off into his gilded sunset.


----------



## Mash (26 July 2011)

The troops are being mobilised for harry's August 1 & 2.... lights camera action!!!!


----------



## Solly (26 July 2011)

> *"FPA to rule on Cassimatis appeal
> Banning order, fine remain in place*
> 
> The former founder of Storm Financial will soon learn the outcome of his FPA appeal"




More by Kate Kachor @ http://www.investordaily.com


----------



## Solly (26 July 2011)

Mash said:


> The troops are being mobilised for harry's August 1 & 2.... lights camera action!!!!




Mash, my sources have advised me to expect another surprise around Harry's. I'm wondering what this will be but I have a few hunches. I'm sure we won't be disappointed.

I believe that the Stormers are still a very angry bunch and the fire is still burning very strongly for a fair hearing and an equitable resolution of their grievances.

Your "lights camera action" comment makes we wonder whether Stewart has engaged a 2nd Unit. The forecast is for a fine, clear day and good lux. A Camera Ops and Field Producer's dream.


----------



## Solly (28 July 2011)

Next court dates from https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument

Proceedings are being held in public so anyone interested may attend.

*1 August 2011	ASIC civil penalty proceedings *(against the Cassimatises)
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000


*2 August 2011	ASIC unregistered managed investment scheme proceedings*
(against Commonwealth Bank of Australia Limited, Bank of Queensland Limited and Macquarie Bank Limited)
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000


----------



## Solly (28 July 2011)

GG,

Will you be down for the next round at Harry's?

Sources have advised me that the Stormers are really fired up again, more than the last proceedings. But this time I have a feeling that there's going to be some worthy spectacular footage to capture. 

I'll get to Harry's early just to see who gets mic'd up. Some of the Stormers I've seen can get quite vocal. I'm sort of hoping that Stewart goes for a 3 camera shoot. There's plenty of real estate around the Tank St entrance to get some good wides and long camera shots.

If you are in town, join me for a tall mocha at Bilby's, around 9:15. 

S


----------



## Garpal Gumnut (29 July 2011)

Solly said:


> GG,
> 
> Will you be down for the next round at Harry's?
> 
> ...




Unfortunately I will be slumming it in the Whitsundays on those dates, but the footage will be spectacular.

Do stay safe, we don't want you suffering any injuries from a "Deng moment". 

gg


----------



## Solly (29 July 2011)

> *"Slater & Gordon has settled the last of its clients’ claims against the National Australia Bank"*




More by Ashleigh McIntyre @ www.moneymanagement.com.au


----------



## Garpal Gumnut (29 July 2011)

Solly said:


> More by Ashleigh McIntyre @ www.moneymanagement.com.au




A win for Storm Clients with NAB, and a win for NAB by the commentary.

gg


----------



## Solly (29 July 2011)

Garpal Gumnut said:


> Unfortunately I will be slumming it in the Whitsundays on those dates, but the footage will be spectacular.
> 
> Do stay safe, we don't want you suffering any injuries from a "Deng moment".
> 
> gg




Thanks GG, I'm not expecting any trouble but it's always good to have the work experience kid on the boom, just in case a friendly prod with the gerbil in self-defence is required.

The Whitsundays sounds good. Brings back some good memories from my days on the old Hayman. Had many memorable times with a starry eyed staff member in Hernando's Hideaway on the point. Better not say any more, Lady P sometimes reads my posts.

It's a pity you can't be there next week. My sources have given me a heads up about next week around Harry's. Looks like it's going to be quite enlightening. Heard something about 'ants' and 'angry'. I don't want to steal the Stormers thunder but I hope Stewart's crew have their packs fully charged. :


----------



## Garpal Gumnut (29 July 2011)

Solly said:


> Thanks GG, I'm not expecting any trouble but it's always good to have the work experience kid on the boom, just in case a friendly prod with the gerbil in self-defence is required.
> 
> The Whitsundays sounds good. Brings back some good memories from my days on the old Hayman. Had many memorable times with a starry eyed staff member in Hernandos Hideaway on the point. Better not say any more, Lady P sometimes reads my posts.
> 
> It's a pity you can't be there next week. My sources have given me a heads up about next week around Harry's. Looks like it's going to be quite enlightening. Heard something about 'ants' and 'angry'. I don't want to steal the Stormers thunder but I hope Stewart's crew have their packs fully charged. :




I will actually be overnighting in Hayman on the day. I will give your kind regards to the first lass in tiedye and on zimmer frame I see. They do come back to bite you.

And talking about being bitten from the past, do take care, if Wendy can be launched in a mere Commons inquiry, who knows what lasses may, as we speak, be unbridling for a launch at Louis Quinze et al at Harry's.

gg


----------



## Solly (30 July 2011)

> *"NAB leads Storm payout*
> 
> NATIONAL Australia Bank has been praised after suggestions it has written off home mortgages and paid out millions of dollars to victims of the Storm Financial collapse."




More by Tony Raggatt @ www.townsvillebulletin.com.au


----------



## Solly (30 July 2011)

And for those interested.

Monday, 1 August 2011

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000

Justice Reeves Court No. 1, Level 7

9:30 AM Notice of Motion and Mention

1 QUD574/2010 ASIC v EMMANUEL GEORGE CASSIMATIS & ANOR

10:15 AM Directions and Notice of Motion

2 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED


----------



## Solly (31 July 2011)

> "*Why the CBA's $16 million man is not worth that much*
> He has to take blame for the bank's involvement in the Storm Financial scandal"




More by Michael Pascoe @ www.smh.com.au


----------



## Frank Ainslie (31 July 2011)

Garpal Gumnut said:


> Any news on the movie, mate?
> 
> gg




Hi All,

It's still being shot. More interviews next week. I know because I'm one of them!

My name is Frank Ainslie and I, like many others, am a victim of Storm and the banks allied with that firm.

"Never let the truth get in the way of a good story!" I'm here now to tell you as it is! Not as you suppose it to be or from what you have been told. 

I haven't posted here before I've been somewhat busy elsewhere. I have my own discussion group and I have a web site called "Storming on Banks". Solly has already mentioned my site in one of his past postings. 

I am a published writer in the States and I have now written a book about Storm and the Banks entitled "Plausible Deniability" which is mainly designed as an information tool for Storm and the Banks' victims. 

There has been much conjecture on this site since the collapse of Storm Financial. Some opinions have been informed, some uninformed, some fair and some derisive. I have spent the last 30 odd months researching, investigating, and corresponding with all the parties concerned. Many battles have been won. Many are still to be fought! 

It is easy to be judgemental particularly when it doesn't affect you personally.Think on this though! If carpetbaggers came along and took your parents for everything they had, how would you feel? More than 75% of these investors were elderly retirees who relied entirely on their savings that they entrusted in good faith to Storm and these banks. Sadly, some of these folk haven't survived the journey and some still may not.

This country is controlled by the banks. They control the purse strings. We, you and I, are simply pawns. We may protest now and again but we are basically powerless to effect change. 

If anyone has any questions about Storm, please feel free to ask. You will get an honest answer based on first hand experience! Not based on what you read in the newspapers!


----------



## Garpal Gumnut (31 July 2011)

Frank Ainslie said:


> Hi All,
> 
> It's still being shot. More interviews next week. I know because I'm one of them!
> 
> ...




Frank,

I'm quite sure I speak for all on the Storm thread in wishing you and all the investors stung by Storm, Financial Advisers and the Banks all the best this upcoming week.

I do hope your book has something to say about the financial advice industry.

There will be folk in Australia walking in to plush Financial Advisers offices as your case starts, who will similarly be victims in 3 or 5 years time.

DO YOUR OWN RESEARCH would be a good title for the book, and trust nobody would be another.

gg


----------



## Solly (1 August 2011)

> *"Lawyers settle NAB's Storm claims
> ASIC and Cassimatis discuss costs*
> 
> Slater and Gordon has settled the last remaining NAB Storm Financial claims, while ASIC's legal battle with Storm founders continues."




More by Kate Kachor @ www.investordaily.com


----------



## Solly (1 August 2011)

> *Justice gets closer in Storm case*
> 
> STORM investor Mark Weir used to be embarrassed about his precarious financial situation but having to go on social welfare and facing foreclosure on his Coast home just made him fight harder for “justice”.




More by Rae Wilson @  www.sunshinecoastdaily.com.au


----------



## Solly (1 August 2011)

A pleasing turnout at Harry's today.

I'm expecting a rather packed gallery tomorrow as well.

See you there.....

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Tuesday, 2 August 2011

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000

Justice Reeves Court No. 1, Level 7

9:30 AM Directions and Judgment by Videoconference

2 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED

Directions and Judgment

3 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

10:15 AM Directions and Notice of Motion

4 NSD811/2010 LESLIE JAMES SHERWOOD & ORS v COMMONWEALTH BANK OF AUSTRALIA & ANOR

Looks like a great day weather-wise for Stewart's crew...

In 5....


----------



## Solly (2 August 2011)

> "*Ball is now in Storm bosses' court*
> 
> THE heads of failed advisory group Storm Financial have three months to file a defence in court against allegations of wrongdoing brought by the corporate watchdog.
> 
> Federal Court Justice John Reeves yesterday ordered that Emmanuel and Julie Cassimatis must respond by November 4."




More by Anthony Marx @ www.heraldsun.com.au


----------



## Solly (2 August 2011)

A really huge turnout at Harry's today. Many Stormers wearing "Angry Ant" badges and they really do look angry.

I was a bit surprised that they allowed the larger pinned on protest signs like "Pigs in the trough" into the court room.

Stewart's crew were really busy. Let's hope we get a few teasers uploaded on YouTube.

A suited Sergeant Sean was looking very dapper, I'm interested to hear an update on the saga from his perspective.


----------



## simplewealthguy (2 August 2011)

They need to make an example of them.  their actions were unconscionable.  they may have started out with good intentions but greed is a powerful motivator and many people lost their retirement savings because of Storms actions.


----------



## Solly (3 August 2011)

> *"Lenders lose Storm Financial court bid"*
> 
> BANK of Queensland and two other lenders have lost a bid to dismiss a lawsuit that claims they knew Storm Financial was violating regulations before the fund manager and adviser collapsed in 2009.
> 
> Federal Court of Australia judge John Reeves ruled yesterday that the lawsuit could proceed"




More @ http://www.theaustralian.com.au


----------



## Solly (3 August 2011)

*Australian Securities and Investments Commission v  Storm Financial  Limited (Receivers and Managers Appointed) (In Liq) (No 2) [2011] FCA 858 (2 August 2011)*

*Read the reason for judgement by Justice John Reeves here.*

http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2011/858.html


----------



## Solly (3 August 2011)

Frank Ainslie said:


> Hi All,
> 
> It's still being shot. More interviews next week. I know because I'm one of them!
> 
> ...




Hi Frank

After seeing the Stormers at Harry's, for the first time I certainly had a sense that there is real hope on the horizon. Their mood was definitely upbeat and positive. 

Do you have any observations about the proceedings that you feel are appropriate to share at this time?


----------



## Pindibog (3 August 2011)

Solly said:


> A really huge turnout at Harry's today. Many Stormers wearing "Angry Ant" badges and they really do look angry.
> 
> I was a bit surprised that they allowed the larger pinned on protest signs like "Pigs in the trough" into the court room.
> 
> ...




Solly,
You should have said hello! I was surprised too but happy!


----------



## Solly (3 August 2011)

Pindibog said:


> Solly,
> You should have said hello! I was surprised too but happy!




One day Pindibog, I might just do that...


----------



## Frank Ainslie (9 August 2011)

Solly said:


> Hi Frank
> 
> After seeing the Stormers at Harry's, for the first time I certainly had a sense that there is real hope on the horizon. Their mood was definitely upbeat and positive.
> 
> Do you have any observations about the proceedings that you feel are appropriate to share at this time?




Hi Solly,

Frankly, last week's hearings could not have gone better for us. 

Stormies are understandably elated at the result. They are also happy that something is happening at long last. The waiting has been Interminable! Now, the door has finally been opened and we will have "our day" in court. At long last we are on the front foot. 

Mark my words! I believe this will not run its full course because the Banks have much to hide. The CBA didn't implement a resolution scheme out of the kindness of its heart. It did it to minimize its costs and hide its wrongdoings. The other banks have been sitting on the sidelines waiting to see what would happen. You can bet your life, they will not be happy with the events of last week.

If they had any sense they would realize that they are in a "no-win" situation. The secret agreements alone between Storm and these banks will provide enough evidence to hang them. It will also establish "pooling" (unregistered management schemes). As if this is not enough, there are enough contractual breaches to fill a law book.

Solly! This is a long-winded way of saying, _"We are very happy indeed! Bring it on!"_


----------



## Solly (6 September 2011)

> "*Widow kicks up a storm*
> EILEEN Miller is in danger of losing the only substantial thing she has left, her house, after investing in products offered by ill-fated finance group Storm Financial.
> After her husband died in 2005, she inherited the house, two-thirds of a boat and $300,000 in cash"




More by Ben Butler @ www.theage.com.au


----------



## Solly (6 September 2011)

> *"CBA links to finance group under scrutiny*
> 
> THE corporate watchdog has been keenly pursuing Storm Financial's principals and backers on behalf of the finance group's thousands of victims"




More by Ben Butler @ www.smh.com.au


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au



Storm and the Banks. (Part 1)

People went to Storm Financial for financial advice because it was a reputable financial advisory firm with a track record, and it was endorsed by some of the major banks in this country. 

For some years people had prospered with Storm so there were no indicators that Storm was about to go "off the rails”. Some have called us gullible. Calling us, the investors that went to Storm for financial advice, ‘gullible’ in such circumstances, is doing a disservice to all those financial advisers out there that are providing a genuine and above-board financial service. Why? Because it implies that anyone that seeks financial advice from someone in the financial sector is gullible! None of them can be trusted, so to speak!

Hindsight is a wonderful thing but few, I'm afraid, are blessed with the ability to foresee the future. To claim that 3,000 or so investors were gullible and should have known better is easy enough to do, but such an opinion is uninformed! People in reproving Storm’s clients in this way tend to forget a number of important facts:

(1)	ASIC as late as 12 months before Storm collapsed examined the Storm stratagem in depth and found nothing wrong! This was part of an ongoing compliance audit that had been taking place for years.

(2)	Banks such as the CBA, the Macquarie Bank and the Bank of Queensland endorsed Storm’s financial model and lent substantial sums of money based on Storm's concepts. The Macquarie Bank also supported Storm’s bid to go public nine months before Storm’s demise.

(3)	Storm’s own financial advisors and those advisory firms that Storm had purchased along the way, believed in and vigorously promoted Storm’s financial model. Some of these former disciples of Storm are now participants in the class actions that are being launched against the banks


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au




Storm and the Banks.  (Part 2)

If we are considered 'gullible', how gullible then are all those various bodies and individuals mentioned in ‘Part 1’ in the scheme of things? They have no excuses whatsoever because they are supposed to be financial experts

If this were just a “get rich” scheme as many have suggested, why was it allowed to go on for so long and why were the aforementioned parties so readily involved? 

The truth of the matter is that whatever was going on beneath the surface, there was nothing outwardly that could possibly alert unwary investors, or savvy ones for that matter, in advance of the dangers inherent in the system. 

People ask, “How could you consider mortgaging your house to further invest when such a policy is fraught with danger?” This question deserves an answer because it is one that is often raised. We paid Storm Financial $145,000 to obtain what we thought was the best financial advice available. Why pay this sort of money to a financial adviser, and then ignore the very advice you have paid good money to hear? 

It’s easy to say now that borrowing on one’s house is a recipe for disaster, but people should remember that ASIC and the banks at that time condoned such a policy. In fact, the banks enthusiastically promoted this strategy along with Storm. How then could we simple investors be expected to identify that such an approach was unsound when our financial advisers and the banks were urging us to invest in this way? I was under the impression that these people were supposed to be looking after our interests?


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au




Storm and the Banks.  (Part 3)

At times we have been referred to as "unsophisticated investors" which has some derogatory undertones. That's exactly what we were though! If we had the expertise to invest ourselves in the share markets, why would we need to have sought financial advice in the first place? 

We realized our limitations and we did the prudent thing by seeking professional financial advice! Crooks do not hang up shingles saying, "Crooks!" Instead, they can call themselves professional financial advisers these days.

If it were considered to be the sensible thing to do then, why are we now being condemned by some for doing so? Our only mistake was putting our trust in the wrong people.

People tend to forget that some of those that invested in Storm were sophisticates in their own field, be it in ‘management’ as in my case, ‘business ownership’, 'careers' and so on. What Storm offered us in the beginning seemed sound enough to even the most discerning among us. 

(1) How were we to know then that Storm's financial model and its assurances were merely “window dressing” and Storm had no intention of doing what it said it would? 

(2) How were we to know that Storm had no real systems in place to protect our financial portfolios? 

(3) How were we to know that Storm had secret deals with certain banks that would ultimately lead to our losses when the global financial crisis hit in late 2008?

We had no way of knowing any of these things and it is therefore unreasonable to assume that we should have known!


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au




Storm and the Banks.  (Part 4)

Some members of the PJ-C at one stage during the Committee's investigations suggested that would-be investors should take a course in financial investing prior to their investing their money. _"Then this sort of thing wouldn’t occur!" _

This is just another loopy suggestion that has no practicality in a modern world. Does one have to learn how a piston engine works in order to drive a car? Does one have to learn about the law in order to employ a lawyer? Doesn’t this defeat the whole purpose of the exercise when professionals are available for the sole purpose of giving you advice in these various areas?

Perhaps instead investors in the future should take a course in criminology so they can spot criminal types in the financial system before they think about entrusting their life savings to financial advisors and banks?

No! The people who invested using the services of Storm and the banks were not gullible. They were simply victims of inveterate liars and greedy organizations that came in the guise of Storm Financial and its partners in deception; namely the banks that assisted them in fleecing their Storm clients. 

These Storm investors were people who placed their trust in a financial system and the people that operate within only to find that the financial sector and some of the people that inhabit it are flawed from go to woe! 

The Storm investors fell through the cracks when the global financial crisis occurred at the end of 2008 because no one, be it Storm Financial, the banks associated with them, ASIC or this Government, bothered to check for any structural failure


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au




Storm and the Banks (Part 5)

Not one former Storm Financial investor out there should blame himself or herself for anything these financial criminals have done to them. We are victims! No more, no less! We placed our trust in people, financial institutions, and a financial system that was deplorable. We paid a fortune to obtain the best financial advice possible and we got monkeys instead! We deserved better! We deserved more!

We are not ashamed of what has occurred because it was not our fault in any way. We were sold a financial plan that we had no way of knowing was flawed. No one else involved, such as Storm’s own financial advisers, the banks, ASIC and this government picked up on its defects so why should we now take the rap for their obvious failings. We do not accept such a proposition! Nor should we! We are not to blame! Rather, they are!

In business, one should be able to trust those to whom one entrusts money, particularly if they are financial institution such as banks.

"DAVID SAY, 71, is no fool. The now-retired, former managing director of James Hardie and former chairman of HSBC Bank Australia is a smart, well-travelled and successful businessman but even he had trouble choosing the right financial adviser. He eventually settled on David Gibson and Larry Fingleson of Priority Planners in Sydney in 2005 but not before losing "heaps of money" at the hands of a private bank adviser."[ INVESTORS BEWARE" "'A little knowledge is a dangerous thing'].

Was Mr. Say gullible? I wouldn't think so! Were we therefore gullible who had far less knowledge in financial investing than he? No, we were not! Were we trusting? Too bloody right!


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au




Storm and the Banks. (Part 6)

All the parties involved in the Storm Financial debacle, other than the Storm investors, were found to be wanting in every way! They should now be made to pay both in compensation and 'under the law' for what they have done. Only then will they learn that crime doesn't pay!"

For anyone that still has their doubts, ask yourself: 

(1) Why has a raft of fresh financial regulations now been introduced by this Government following the Storm Financial fiasco? 

(2) Why have the banks now been forced to reconsider their margin loan conditions? 

(3) Why is ASIC charging the Banks with wrongdoings? 

(4) Why has the Court now thrown out the Banks' strike-out motions? 

The people that lost money in Storm didn't lose everything because there was a global financial crisis in 2008. They lost money because Storm and the Banks did not act in sufficient time to protect their customers’ assets! The banks did so where their other margin loan customers were concerned, but because they had secret agreements (unbeknown to their Storm customers) with Storm, they delayed acting until it was all too late.

Margin calls by banks are normally made within 5 days. The CBA took between 10 and 11 weeks to make margin calls. The Macquarie bank took between 3 to 4 weeks to make margin calls. In volatile markets where even hours can sometimes be critical, the result of the banks’ actions was catastrophic for their Storm customers.

These banks, the CBA, Macquarie and the BoQ, violated their own banking codes of conduct, various statutory Acts, trampled on their Storm customers’ rights, illegally assigned their contractual obligations to Storm, and altered their contracts with their Storm customers by entering into covert agreements with Storm. 

Anyone that still believes you can trust banks is delusional. The facts speak for themselves


----------



## Frank Ainslie (6 September 2011)

Solly said:


> More by Anthony Marx @ www.heraldsun.com.au




Storm and the Banks (Part 7)

The Media only gives one side of the story because all the facts have not come out yet. If the banks have their way, they never will. 

So, for people that like to throw the first stone, I suggest that you have a rethink. 

(1) The people that invested in Storm Financial did so in good faith. 

(2) For the most part they were elderly people (Aussie battlers) that had worked hard all their lives to be self-funded in their old age. 

(3) They are proud people who were not content to live off the welfare system, but instead went out and did a job of work. 

(4) Many worked their hearts out to put away a nest egg for their old age. Today, in a world where "hard work" appears to be a crime, their striving to do better all their lives is looked down on! It's no wonder then that they are upset. 

(5) Not, only have they now lost everything, but they also find themselves condemned rather than the thieves that took all their money, when their only failing is that they put their trust in financial institutions that were found to be completely lacking in integrity or principles. 

One thing though! If it takes the rest of our lives (it has taken the lives of some already) we will bring these miscreants to account. You can put money on that! It’s a surer bet than putting it in any bank! We know because we've been there! Done that!

Frank Ainslie - 6th September 2011


----------



## Julia (6 September 2011)

Frank Ainslie said:


> People ask, “How could you consider mortgaging your house to further invest when such a policy is fraught with danger?” This question deserves an answer because it is one that is often raised. We paid Storm Financial $145,000 to obtain what we thought was the best financial advice available. Why pay this sort of money to a financial adviser, and then ignore the very advice you have paid good money to hear?



I've not seen anyone suggest that moderate leverage on one's house is stupid, though personally I don't like the idea for people who are no longer working and who have just the one property.
But what we have been told many Storm investors did was to mortgage their homes to up to 90%, use those funds to buy shares, and then *further take out a margin loan against those shares!*

I just can't see how anyone could do that and not understand how much risk they were taking.


----------



## Freshwater (16 September 2011)

I agree Julia but the advisor I dealt with was such a good salesman and I was made to feel an idiot when I did not want to follow his advice. I did not follow his advice but can see how easy it was for many to do so because they were so convinced that these experts knew the answer. In being fair the advisors also invested and lost most of their assets as well so they did also believe in their own product.


----------



## Solly (21 September 2011)

Sources are telling me that the Stormers are getting very, very restless.  More to come...


----------



## Solly (21 September 2011)

> *"Woman suing bank over Storm Financial fails to get trial by jury*
> 
> A WOMAN who is suing her bank for failing to warn her about the dangers of investing with the failed Storm Financial Services has been denied an application to have her case heard by a jury."




More by Mark Oberhardt @ www.couriermail.com.au


----------



## Solly (21 September 2011)

*It's hotting up at Harry's. Cue the Levitt's crew, charge the packs. 

Mobilise the Stormers.

I believe it's going to be another huge turn out.

Date: 23 September 2011	

What: ASIC unregistered managed investment scheme proceedings

Where:
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000
*

Court room TBA


----------



## Solly (22 September 2011)

Solly said:


> *It's hotting up at Harry's. Cue the Levitt's crew, charge the packs.
> 
> Mobilise the Stormers.
> 
> ...





*Justice Reeves Court No. 1, Level 7*

10:15 AM Directions

2 NSD811/2010 LESLIE JAMES SHERWOOD & ORS v COMMONWEALTH BANK OF AUSTRALIA & ANOR

3 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

4 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED


----------



## Solly (23 September 2011)

A great turn out at Harry's today.

Frank, what's your view on today's progress ?





> *"Storm investors told their case will not come before court until September 2012*
> DISGRUNTLED former Storm Financial investors still seeking compensation after the financial adviser's multi-million dollar collapse will have to wait until late next year to get their day in court.




More by Anthony Grant-Taylor @ www.couriermail.com.au


----------



## Garpal Gumnut (23 September 2011)

Solly said:


> A great turn out at Harry's today.
> 
> Frank, what's your view on today's progress ?
> 
> ...




Solly,

Are there any criminal charges pending over Storm?

gg


----------



## Grey Ghost (24 September 2011)

Solly said:


> A great turn out at Harry's today.
> 
> Frank, what's your view on today's progress ?
> 
> ...






If this article is right it would seem that scenario (no court hearing for another year) will play into the banks hands as they obviously have much deeper pockets than the poor stormies.  

I would be interested to hear their reaction to this latest development.


----------



## Harleyquin (24 September 2011)

Obviously the banks have deeper pockets than the stormies, no matter how long it takes, it doesn't make the banks any less guilty than we know they've been.


----------



## Grey Ghost (24 September 2011)

Harleyquin said:


> Obviously the banks have deeper pockets than the stormies, no matter how long it takes, it doesn't make the banks any less guilty than we know they've been.




I agree Harlequin but what concerns me is that it could cost a considerable amount of money to prove it through the legal system.
I am concerned that the banks will deliberately drag this process out so as to increase the costs involved for the stormies to such an extent that they find it difficult to continue funding their legals costs.
The banks have form for this sort of thing, one notable example being the foreign currency loans debacle back in the 80's.
I just hope the stormies can afford to see this thing through.


----------



## Harleyquin (24 September 2011)

We're well aware of the "dragging out" issue, however, even in the overseas loan debacle they got the banks who were guilty in the end.  There is one thing we all know for sure and that is storm were guilty of rotten advice and the banks were guilty of funding it, knowing full well what and who they were funding.  I'm happy for it to all to come out in court.

We didn't go to storm to become wealthy and if we have to spend whatever we have left to fund a legal team against those who destroyed us then so be it.  Being financially independent was once a hope, now it's no longer possible or important.  We're broke, in debt and have nothing left to lose.  When you're backed into a corner you only have one option and that's to fight and to fight to win.  Bring on the ant army.


----------



## Solly (24 September 2011)

Garpal Gumnut said:


> Solly,
> 
> Are there any criminal charges pending over Storm?
> 
> gg




GG

None that I am aware of at the moment. I wonder what evidence ASIC still has or is still gathering.

On another note in my opinion there was definitely a crime committed against fashion with that noteworthy Pirates of Penzance garb.

Cue the Pirate King...

"Oh, better far to live and die
Under the brave black flag I fly,
Than play a sanctimonious part,
With a pirate head and a pirate heart.
Away to the cheating world go you,
Where pirates all are well-to-do;
But I’ll be true to the song I sing,
And live and die a Pirate King.

For I am a Pirate King!
And it is, it is a glorious thing
To be a Pirate King!"


----------



## Judd (25 September 2011)

Harleyquin said:


> We're well aware of the "dragging out" issue, however, even in the overseas loan debacle they got the banks who were guilty in the end.  There is one thing we all know for sure and that is storm were guilty of rotten advice and the banks were guilty of funding it, knowing full well what and who they were funding.  I'm happy for it to all to come out in court.
> 
> We didn't go to storm to become wealthy and if we have to spend whatever we have left to fund a legal team against those who destroyed us then so be it.  Being financially independent was once a hope, now it's no longer possible or important.  We're broke, in debt and have nothing left to lose.  When you're backed into a corner you only have one option and that's to fight and to fight to win.  Bring on the ant army.




This is a matter I don't quite understand.  If someone takes litigation against an organisation, why wouldn't that organisation defend it?  It is the right of that organisation as much as it is that of those who initiate the litigation.  It's not about morals or ethics or "we is right", it's a question of law and now the legal system comes into play.  When that happens, do not expect justice as the layman may view it, simply expect that the judgement will apply the law and that no matter what the initial outcome there are avenues of appeal against that decision.  I do not expect it to end after a mere four years.

Watching with interest.


----------



## Solly (26 September 2011)

> *"ASIC, banks ordered to provide Storm documents*
> Trial, mediation date set
> 
> ASIC and three banks have been ordered to provide a law firm with Storm related documents."




More by Vishal Teckchandani @ www.investordaily.com


----------



## Harleyquin (26 September 2011)

I'm well aware of what you're saying Judd.  As you say 'we'll all watch with interest'


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## Solly (27 September 2011)

> "*Storm researcher ordered to pay costs
> Judge finds in ASIC's favour*
> 
> A judge has found in favour of ASIC in another Storm Financial-linked proceeding."




More by Kate Kachor @ www.investordaily.com.au


----------



## Gonzo1975 (29 September 2011)

Hi there,

I was wondering if anyone could explain why this issue will not now go to court for another 12 months ? Is this just the normal timeframe that it is possible to actually use the courts, or would some of the parties to the matter (banks or others) have requested this length of time.

I can't find anything written to explain the timeframe .


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## maccka (29 September 2011)

Gonzo1975 said:


> Hi there,
> 
> I was wondering if anyone could explain why this issue will not now go to court for another 12 months ? Is this just the normal timeframe that it is possible to actually use the courts, or would some of the parties to the matter (banks or others) have requested this length of time.
> 
> I can't find anything written to explain the timeframe .




Hi Gonzo,

My understanding is that the timeframe is needed to allow for discovery of the millions of pages of documents that need to be read as part of the discovery process. 

Don't forget that His Honour also ordered that mediation occur before the end of Feb 2012.  So maybe it won't even get to court.

Personally I feel torn by all of this - on the one hand the time is critical to pick up the evidence that is needed to support the case against the banks in the clearest manner possible - on the other I worry about whether the Stormers can keep on keeping on for another year.  The toll on Stormers is far too high already and I desperately hope and pray that no more succumb to stress related illness or suicide.

cheers
Maccka


----------



## Anastasia (30 September 2011)

Although I am sure we wont see this stock broker on Australia Has Talent, it is quite amusing and cuts to the chase.
http://www.youtube.com/watch?v=aRmmZHaKE2I


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## Judd (1 October 2011)

> ...on the one hand the time is critical to pick up the evidence that is needed to support the case against the banks in the clearest manner possible - on the other I worry about whether the Stormers can keep on keeping on for another year.  The toll on Stormers is far too high already and I desperately hope and pray that no more succumb to stress related illness or suicide.




This something that has been at the back of my mind for sometime.  Even if decisions go the way of former Storm clients, in a way they still lose due to the stress and strain involved.  Some may never get over it.


----------



## Harleyquin (1 October 2011)

Thanks Anastasia and you're right I can't imagine seeing in on Australias got talent. .  

When Bill Shorten announced recently that more people need to seek financial advice and contact the Financial Planning Association for a referral to a licensed financial planner.  This bothers me no end.  Storm Financial were licensed by ASIC and the company and some of the advisors members of the FPA.

It doesn't matter what new rules they put in place, 'bad' financial advisors will still be bad, and 'good' advisors with integrity will still be good.   But unfortunately, because of the onorous new compliance rules put in place, a lot of the good advisors will leave and all that will be left will be the 'big' advisor firms and the banks who cover themselves to be able to operate exactly as they did before.  

I believe that if anything the financial planning industry is now more 'dodgy' than it was prior to the Storm collapse.  Some contributors to this thread have suggested that the storm financial scenario can and will happen again and I couldn't agree more.


----------



## Frank Ainslie (5 October 2011)

Solly said:


> Sources are telling me that the Stormers are getting very, very restless.  More to come...




Hi Solly,

We've been restless since the end of 2008! 

Here's the goss on the BOQ in North Ward:

https://sites.google.com/site/boqnorthward/

I'll be launching more websites outlining the crimes of the CBA and the Macquarie Bank in due course. It may take me some time though because there are a lot of charge sheets to wade through. 

ASIC has millions of documents on its data base in relation to Storm and its dealings with these Banks. It probably has one man on the job to go through them all. That's probably the reason it's taken them forever to get these proceedings under way.

Thank God a date has now been set at the latter part of next year for this all to unfold in Court. I think a few eyes will be opened then, and a few "_knockers_" will have egg on their face.

If some people within Storm and these Banks that have done the wrong thing don't go to prison after all this, then the Law will well and truly be an ass! 

Regards

Frank


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## Harleyquin (6 October 2011)

Well done Frank you've done a superb job on the BoQ site.  Wish we had your keen eye for detail.

The clients of the financial plainning group have done absolutely nothing wrong except to seek financial advice and to place their trust in a legitimate planning group.

I don't buy the idea that the 'we are only going after the  banks because they have the money', you can't go after someone just because they have the money, they have to be guilty of something, and in the case of the banks, they funded this scam.  Without that funding storm financial and it's advisors were only spouting rotten advice, the banks knowingly funded that rotten advice to the tune of billions of course they knew exactly what they were doing.  

I also don't buy into the idea that we shouldn't go after storm and those advisers who have lied and cheated either just because they claim they are 'broke'. 

This unwholely partnership between bank and advisory firm has destroyed thousands of lives, our health is declining at a great rate of knots, and you the public are now picking up the tab for our pension each week.  Which means that this debacle is seriously affecting more than just the stormies. 

A criminal is a criminal and should be convicted.


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## Solly (7 October 2011)

Frank Ainslie said:


> Hi Solly,
> 
> We've been restless since the end of 2008!
> 
> ...





Hi Frank

I see that you are now a participant in the Class Action against BOQ. I will be watching with much interest. Your new website really has some powerful comment.

Today I spent the afternoon with my Stormer mate. He's still looking a bit drawn but this is the most determined I've seen him since this whole saga commenced.

He seems to have a second wind, a fire in his belly to ensure that the momentum is sustained to bring the perpetrators of this injustice to account. 

The hierarchy of the banks, the previous principals of the entities involved and those who work in the mechanisms of public administration that oversee the laws, I believe are now recognising the unfailing commitment of all those aggrieved by this event to seek an equitable outcome.

I now believe more than ever that the Stormers are very organised and determined collective that will never ever give up until their total demands are fully compensated for the harm that has been inflicted.

S


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## Harleyquin (8 October 2011)

Solly we have nothing to lose.

We are VERY determined to fight this thing until the very end.  

Everyone has let us down and the corporate crime involved is complex but very real.

If the banks get away with this the financial planning industry is as ruined as we are.


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## bunyip (10 October 2011)

The people who sold Storm Financials investment strategy, from the advisers right through to the CEO who couldn’t remember whether he was the CEO, must be delighted to see how the heat is being directed away from them and towards the banks instead.
I won’t be at all surprised if those Storm gurus get off with just a slap over the wrist or maybe even scot free, despite being the primary architects of the financial tragedy that befell so many Storm clients.
Rather than easing up on the Storm henchmen, what’s needed is a concerted and ongoing effort to keep the heat on them if they’re ever to face justice for leading investors into a reckless and highly risky investment strategy. 
Yet almost three years after the collapse of Storm and the financial wipeout of their clients, rather than seeing Storm under sustained pressure and criticism, there are articles and comments in circulation that support Storm’s strategy instead of exposing its shortcomings.

One example of comments supportive of Storms strategy appears on the SICAG  website in an article about Margin Lending written by Luke Vogel. 
Vogel takes a swipe at the media for claiming that Storm investors were greedy because they were choosing high risk/high return investments. He points out that the Storm model promised ‘average market returns’ – nothing more, nothing less. 
He appears to imply that Storm had a conservative investment strategy by virtue of the fact that it recommended investment in Index Funds that track the performance of the overall stockmarket, rather than trying to outperform the market. 

While this does appear on the surface to be a relatively conservative investment strategy, what needs to be understood is that it was coupled with other aspects of the Storm model that were far from conservative.

Listed below are some of these non-conservative aspects of the Storm model.....Luke Vogel conveniently doesn’t mention them in his article.

* Double gearing, where assets such as real estate are used as collateral for a loan to invest in the stockmarket, then these stockmarket assets (all bought with borrowed money) are used as collateral for further loans for further market investment. Borrowings supported by borrowings.
Not by any measure can such a strategy to be considered as conservative or low risk. It was an accident waiting to happen.

* 100% of investment funds sunk into the stockmarket, which in itself can be a volatile and risky investment vehicle even when using index funds.
We’ve all heard the old adage _‘Don’t put all your eggs in the same basket’_. Storms investment model ignored this age old wisdom by heavily investing its clients into the stockmarket, without proper regard to their age or their financial situation or their capacity to service their loans.

* Recommending that clients sink their super and retirement savings into the stockmarket.
Hardly a safe or conservative investment strategy.


* Margin Loans....great for magnifying your gains when the market is rising, but equally good at magnifying losses when the market falls. And markets always fall much faster than they rise. Not well suited to financing ‘buy and hold’ investments in something as volatile as the stockmarket.   Again, hardly a safe or conservative strategy.

Luke Vogel was an adviser with Storm Financial and was later on the committee of SICAG. He would be fully conversant with all the points I’ve mentioned above, but given his background as a Storm employee, I guess it’s understandable why he doesn’t mention these aspects of the Storm model.
His comments can hardly be considered impartial....they paint Storm in a far better light than they deserve to be painted. It’s these sort of comments that take the heat off Storm, and may well help to produce an end result whereby Storm Financial and its cohorts escape being brought to justice for destroying so many clients through dodgy, high risk strategies and incompetent management of their clients investments.


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## bunyip (10 October 2011)

Every so often I hear comments from Storm casualties who still seem to have little understanding of how or why they were so badly burnt.
Below is a link to an excellent article that helps to throw some light on the subject.

http://www.moneymanagement.com.au/news/double-gearing-what-happens-when-markets-fail


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## Solly (10 October 2011)

*It's been a while, let's check for the latest update on:*

*cassimatis.com.au*


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## Frank Ainslie (11 October 2011)

bunyip said:


> The people who sold Storm Financials investment strategy, from the advisers right through to the CEO who couldn’t remember whether he was the CEO, must be delighted to see how the heat is being directed away from them and towards the banks instead.
> I won’t be at all surprised if those Storm gurus get off with just a slap over the wrist or maybe even scot free, despite being the primary architects of the financial tragedy that befell so many Storm clients.
> Rather than easing up on the Storm henchmen, what’s needed is a concerted and ongoing effort to keep the heat on them if they’re ever to face justice for leading investors into a reckless and highly risky investment strategy.
> Yet almost three years after the collapse of Storm and the financial wipeout of their clients, rather than seeing Storm under sustained pressure and criticism, there are articles and comments in circulation that support Storm’s strategy instead of exposing its shortcomings.
> ...




The people who sold Storm Financials investment strategy, from the advisers right through to the CEO who couldn’t remember whether he was the CEO, must be delighted to see how the heat is being directed away from them and towards the banks instead.
I won’t be at all surprised if those Storm gurus get off with just a slap over the wrist or maybe even scot free, despite being the primary architects of the financial tragedy that befell so many Storm clients.
Rather than easing up on the Storm henchmen, what’s needed is a concerted and ongoing effort to keep the heat on them if they’re ever to face justice for leading investors into a reckless and highly risky investment strategy. 
Yet almost three years after the collapse of Storm and the financial wipeout of their clients, rather than seeing Storm under sustained pressure and criticism, there are articles and comments in circulation that support Storm’s strategy instead of exposing its shortcomings."

Hi! It is somewhat pointless for the former clients of Storm to focus on a defunct company no matter how bad it was or what it did. That’s ASIC’s job and they are in the process of doing just that.

As for articles and comments in circulation supporting Storm, I can only say that Cassimatis must have written them. No one else to my knowledge has done so of late. Storm’s financial model has now been condemned by everyone; the financial adviser Worrells called in to testify, the FPA, the PJC in its report and so on and so on.  Which idiot are you referring to when you claim this?

I concede that Storm still has a few supporters out there, but they are clearly delusional if they still believe that Storm’s financial model was sound. 

A couple of years ago on the SICAG forum I challenged Manny and his wife to a debate on their Storm financial model which I had found on close examination to be hopelessly flawed, Luke Vogel then told me that these two super financial savvy people would _"chew me up for breakfast"._ It was disturbing to hear this from him because it suggested to me that he still admired these two miscreants. I was expelled from SICAG shortly thereafter for upsetting people. I tend to do that apparently!

That’s when I formulated my own Group called SOB (Storming on Banks) or as one wag put it, “sick of bull****ters!” This is an independent Group which is only open to the victims of Storm and the Banks. Anyone that worked for Storm is not permitted to join because it could create a situation where a member is confronted with a Storm employee or adviser that has done the wrong thing by that person. Objectivity and the freedom to say exactly what one thinks without fear or favour is paramount in SOB.

I have now been called back into the SICAG fold but I still post mostly on SOB. 

Incidentally, you don’t have to sell me your notion that Storm’s financial model was crap! As I have already said, I completely agree with your assessment. More to the point, so does anyone with a modicum of commonsense now accept that it was crap. 

The funny thing though is this! Everyone including the Banks, Storm and its team, ASIC and the people operating in the financial sector before Storm collapsed thought the Storm financial model was the _“new coming!” _Now, nearly 3 years later it’s all ‘shock and horror’. How quickly people forget! But then the holocaust probably sounded like a good idea to the Germans at the time. 

What I am trying to say is that it’s easy to try and be wise in hindsight. We can all do that! We went to Storm for financial advice as many did. We were entitled to get sensible financial advice because we paid good money for it. If you want to blame anyone, don’t blame the people that were duped. Rather, blame the banks who conspired with Storm, and blame a Regulator who didn’t ensure that Storm abided by its compliance obligations. Add the Government to your list for constructing poorly worded legislation that allowed these clowns to take advantage of elderly people who placed their trust in institutions that were completely dishonest, totally unethical and downright deceitful. 

If people today cannot trust in so-called professional financial advisers, who should they trust in? God perhaps because at the end of the day, he’s probably the only one left that you can trust to do the right thing! 

It was total bull**** from beginning to end. To try and make any sense of it without knowing the full facts is just that as well.


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## Frank Ainslie (11 October 2011)

Solly said:


> Hi Frank
> 
> I see that you are now a participant in the Class Action against BOQ. I will be watching with much interest. Your new website really has some powerful comment.
> 
> ...




Hi Soll

I sense a kindred spirit! 

In Queensland of late we’ve had to contend with a few disasters. Storm Financial wasn’t the only storm that went through here devastating people in the process.  The problem is that after a while people become inured to other people’s suffering because one reads about it every day. Only when it’s in your face and personal does it mean anything. 

We, Helen and I, are better off than some and worse off than others where Storm is concerned. We’re still alive so that’s a bonus. The one thing that most ‘Stormies’ have in common though is that we are determined to see those that stole our dreams pay for what they have done. It’s not just a question of money! It’s as much a question of principle. When people steal money from you by false pretenses you naturally want your money back and you want the perpetrators punished.  

I am seventy in December and I may not make the journey. However, if just one of us is left standing when justice is done, it will have been worth it. 

I’ll leave you with my favourite quote:

“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood, who strives valiantly; who errs and comes short again and again; because there is not effort without error and shortcomings; but who does actually strive to do the deed; who knows the great enthusiasm, the great devotion, who spends himself in a worthy cause, who at the best knows in the end the triumph of high achievement and who at the worst, if he fails, at least he fails while daring greatly. So that his place shall never be with those cold and timid souls who know neiter victory nor defeat.”


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## Harleyquin (11 October 2011)

Bunyip most of us who were burnt by storm agree with your view that the storm people were responsible for formulating this so called financial strategy.  The fact that it was so badly flawed was the problem and that's why the banks need to explain why they financed such a ponzi scheme.

The bankers don't finance anything that they don't understand, consequently it stands to reason that they knew exactly what storm were doing to their clients.  Without their financial backing the storm model was just a bad idea.  The Australian Banking industry made it a reality.

We have been called greedy, the truth is that we were lied to by these advisors, and the banks need to verify all information given to them by storm when applying for loans.  Most of us have paperwork which clearly says in our risk profile 'LOW RISK' and that's what the advisors promised us.   And all of our SOA were all exactly the same or almost exactly the same ie extremely high risk.  Don't you think someone in the Banking industry picked up on this straight away.  You bet they did.

When you have an ASIC and Financial Planning approved financial planner tell you that you that they are recommending a low risk investment for you and then you find out too late that it is far from low risk. 

Those of you who understand these things can say 'you should have known better' etc, well we didn't know better.  We made the mistake of believing that we could place our trust in a licensed financial planner.  What these advisors did was clearly criminal no question.  We were conned big time.  Hindsight is a wonderful thing.  

I see the advertisements on TV at present asking you to contact Financial Planning Australia for a financial planner.  Our storm planner was a member of the FPA.  I see the banks advertising their financial planners, are they going to come under the same rules as the non banking planners or will they do whatever they want to. 

What the storm/banking partnership did was highly criminal and it has destroyed thousands of lives.  I want to see all of those responsible held accountable.


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## Judd (11 October 2011)

bunyip, an informative post but there is one small point that you may have overlooked which has been raised by others; that is the question of hindsight.  It would have been interesting if ASIC or others had stepped in in 2006 or so when things were going swimmingly well and said, this investment model is way too dangerous for you punters so we are closing it down or warning you against it.  Would Storm clients have then rushed for the exit?  Don't know and we never will.


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## Frank Ainslie (11 October 2011)

Solly said:


> More by Kate Kachor @ www.investordaily.com.au




‘Was ‘Ignite’ the ignition Storm needed? (Part 1)

_“Ignite Financial Systems and Research Pty Ltd (Ignite) was a company controlled by Emmanuel and Julie Cassimatis. Prior to 23 March 2007 (that is about the time Storm was preparing for the IPO) Ignite was renamed Storm Financial Research Pty Ltd.  

Ignite was paid significant fees in relation to certain trademarks and in relation to the development and operation of a computer program or platform called "Phormula" In addition Ignite owned and operated an aircraft which Storm used on a commercial basis._ And so begins Page 28 of the Worrells Report to Creditors dated 25th May 2010 which I shall be quoting from: 

_“Storm and Ignite have a strategic partnership. Ignite is a software research and development business owned by the Founders. Storm and Ignite are separate entities which operate separate businesses and perform different roles. Ignite currently receives fees from Colonial and Challenger and will in the future receive fees from Storm.” (Storm’s prospectus)

The liquidators (Worrells) stated that “they were not aware of any commercial reason why the role of Ignite could not have been carried out by Storm itself, or through a Storm subsidiary.” _

_“The agreements entered into between Ignite and Emmanuel and Julie Cassimatis, and subsequently between Ignite and Storm, are somewhat unusual. In October 2004 an agreement was executed between Ignite, Mr and Mrs Cassimatis and Colonial First State Investment Limited (Colonial Investment), which company is a subsidiary of the CBA. Colonial Investment is in the business of managing investment Funds including a number of the Funds which Storm recommended that clients invest in. 

The agreement of October 2004 states that Mr and Mrs Cassimatis had applied for (and had presumably obtained or subsequently obtained) certain trademarks. The trademarks which are the subject of the agreement appear to have principally been trademarks which would normally have been expected to be owned by Storm. Indeed they were subsequently transferred to Storm (see below). Pursuant to the agreement Mr and Mrs Cassimatis assigned their interest in the trademarks to Ignite and Ignite made the trademarks available to Colonial Investments, in exchange for a monthly royalty fee the amount of which was calculated in relation to the funds invested by Storm's clients. Colonial Investments used the trademarks to "badge" the funds managed by them on behalf of Storm's clients as "Storm Funds". _

Here’s what the then CEO, Mr. Ralth Norris had to say in 2009 about the CBA’s relationship with Storm“

_“Mr Norris””I think the issue here is that certainly the Commonwealth Bank was not identifying customers of the Commonwealth Bank to be customers of Storm. My understanding very clearly is that Storm initiated relationships on the back of financial advice that they gave to their customers. Some of those customers were directed or took out loans with the Commonwealth Bank on the housing side, and some of them took out loans with other banks. Likewise with regard to margin lending: margin lending was taken out with other providers as well. My view is that this was not a tight relationship. From the organisation’s perspective””from my perspective, from the board of the bank’s perspective... “ [PJ-C Hearings 28.102009]_

It is evident to even ‘Blind Freddy’ that Storm set this arrangement up with the CBA to churn money out of its customers and the CBA went along with it because it encouraged Storm to send investors its way! Ignite was used for this purpose because it disguised the nature of the arrangement and was also a means of reducing Storm’s own tax liabilities. 

_“Why the trademarks were owned by Mr and Mrs Cassimatis rather than Storm and why they were assigned to Ignite, so that Ignite would receive the royalty income, is not clear to the liquidators. It does seem clear that Ignite entered into a similar agreement with Challenger Financial Services Group Limited (Challenger) as the Profit and Loss Statement of Ignite for the year ended 30 June 2007 disclosed royalty income from Colonial Investment of almost $1.775 million and royalty income of $1.348 million from Challenger.”_

It’s amazing to me how ‘Challenger’ has not been embroiled so far in all this! The Packer influence perhaps! 

_In Storm’s SOA to us (Page 52) it states:

“…For example Storm Financial is Commonwealth Bank's single largest margin lending client (please note: we do not deal exclusively with the Commonwealth Bank but rather we recommend the margin loan which best suits your needs). As a result we receive a substantially better loan with higher buffers, larger LVR's, longer lead times to margin call and at vastly superior interest rates. For small loans we achieve for our clients a 0.65% per annum interest rate deduction and on larger loans this discount increases up to 1.85% per annum. Similarly, we are able to achieve discounted bank loans for our customers. Additionally, Storm Financial does not receive ongoing (trailing) commissions on loan products (such as margin loans), instead we pass on to you any such commission in the form of lower interest rates.” _

In Storm’s SOA to us (Page 53 it states:

_“While our fees may be higher than average upfront, over time our fee structure is very competitive with the industry average and you are not continually paying for "add-ons." and there are no hidden kick-back arrangements.”_

In Storm’s SOA to us (Page 81) it states: 

_“Ongoing commission is paid by some product providers and generally continues until the client redeems the investment. The amounts vary over time according to the total value of your funds under management. The ongoing commission noted in the table above amounts to a percentage on the balance of your fund. For example, if you invest $100,000 then the fund manager pays an ongoing commission to us of between $300 per annum and $500 per annum depending on the fund chosen. As the balance of the fund increases or decreases, the value of the ongoing commission paid is also changed. This ongoing commission allows us to service your ongoing needs without having to charge you yearly monitoring fees. This remuneration is included in the Total Management Fees set out above and is not an additional fee to you. 

As a Representative of Storm Financial Pty Ltd, Stuart Drummond is entitled to an amount of 10% of the upfront fees paid to the Licencee. This equates to an amount of $13,020.10 (excl GST). This remuneration is included in the fees set out above and is not an additional fee to you._ 

_Disclosure of Interest in the Challenger Managed Investments Limited Storm Australian Indexed Trusts 

• Ignite Financial Systems and Research Pty Ltd is a research company owned in shareholding by Emmanuel and Julie Cassimatis. 

• Ignite Financial Systems and Research Pty Ltd is entitled to receive an ongoing royalty of 0.165% pa including GST based on the value of your holding in the Fund. The ongoing royalty is paid by the fund manager and is contained in the management fees. This is not an additional cost to you. _

_• For the life of the Prospectus, Storm Financial Pty Limited customers will not pay a buy/sell spread in the Storm Australian Indexed Trusts. The brokerage associated with withdrawals and investments will be reimbursed to the Storm Australian Indexed Trusts by Storm Financial Pty Ltd.”_

You can see by reading this that Storm mentioned payments to Ignite in passing so they could always say at the end of the day, _“We did tell you all about this!”_ They knew, however, that unless some one trained in financial accounting and financial advice was reading this, no one would pick up that this was a double-gearing scheme with many add-ons. That’s why Storm deliberately made the SOA 107 pages long and made it incomprehensible to the man in the street. 
I was trained in corporate financial matters and I didn’t pick up on it. Nor for that matter did other professional people that invested using Storm’s financial advisory service. How then could anyone expect ordinary Australians to have any idea how this all worked if we who had worked in business didn’t?

_“In the lead up to the IPO (see section 8 of this report) a new series of agreements were executed. These agreements cancelled the original agreements and had the effect of transferring the ownership of the trademarks to Storm, but oddly also allowed Ignite to continue to retain the royalty income without any payment to Storm. As stated above the liquidators are unaware of why the income from trademarks which, it appears, could at all time have been the property of Storm should have been received and retained by Ignite. That being said it is also true that at all material times each of Storm and Ignite were solvent, were beneficially owned by Mr. and Mrs. Cassimatis, and as such, subject to the requirements of the Corporations Act they were entitled to arrange the affairs of the respective companies as they wished.”_

What Worrells are basically saying in this report is that Storm was effectively operating inside the law. However, the reasons for operating in this way appear somewhat confusing to them.  We, the poor bloody investors, know why they had such arrangements in place – for Storm’s financial benefit and not ours!


----------



## Frank Ainslie (11 October 2011)

"Was Ignite' the ignition Storm needed? (Part 2)

_“Apart from holding and or getting the income from the "Storm" trademarks, Ignite also developed and retained ownership of a computer program called "Phormula", which was used by Storm in connection with its business. Although Ignite was tasked with the development of "Phormula" it seems that Ignite did not initially have the financial resources to pay the development costs. An analysis of the financial records of Storm shows that Storm progressively advanced the required funds to Ignite by way of an unsecured and interest free loan. As at 30 June 2007 Ignite owed Storm $3.44 million. “_

Wait for it! Now we have the biggest joke of all:

_“The agreements entered into between Storm and Ignite during 2007 included two service agreements. 

Pursuant to what was described as the "Research Service Agreement" Ignite undertook to provide Storm with "research related services" on an ongoing basis. No fee was payable by Storm during the first two years of the agreement but thereafter it was agreed that a commercial rate was to be negotiated between the parties. The agreements entered into by Storm and Ignite during 2007 also included an agreement whereby Ignite agreed to provide certain services to Colonial First State Investment in return for certain fees calculated in accordance with the amount of Storm badged funds which Colonial First State Investment had under management. 

As noted above Storm advanced $3.44 million to Ignite principally to fund the development of "Phormula". In the period from 1 July 2007 until the close of business in January 2008 Storm collected royalties on behalf of Ignite such that the balance was progressively reduced, and eventually converted to a liability of in excess of $1.2 million.”_

In the above it states, _“…it seems that Ignite did not initially have the financial resources to pay the development costs.” _Yet Ignite owned and operated an aircraft which Storm used on a commercial basis? Give me a break!

The reason Storm did not develop the “Phormula” software fully is now apparent. Storm didn’t want any of its clients to be able to identify the “high risk” nature of it financial model in terms of the ‘liabilities’ its clients took on when adopting such. Effective software has a way of doing this! 

Storm knew that the ratios it quoted in its SOA were false because the housing loans and margin loans were not correctly factored in, but it didn’t matter to Storm. Storm’s clients were happy and they would not ask too many questions when they were asked to inject more capital so what the heck! Storm was also happy because its ‘financial colander’ was never questioned until the markets collapsed in late 2008.

Storm, of course, always had the clients ‘dam accounts’ to fall back on. If no revenue was forthcoming on clients’ share portfolios, the clients merely funded themselves out of the cash reserves set aside. For most of 2008 this is what occurred. Ponzi would have been proud of the way Storm went about this!

_“In summary, it may be observed that Storm's trademarks provided a substantial income stream for Ignite, a company which appears to the liquidators to have no obvious reason to own the trademark or to receive the income stream. Also, Storm specified what it required from "Phormula" and advanced the funds to pay for the development of that program. The repayment of the funds advanced came from the income stream generated by the trademarks and Ignite retained ownership of "Phormula". As stated above each company was solvent when these arrangements were entered into and were each beneficially owned by the same parties who were, subject to the Corporations Act entitled to arrange the affairs of the companies as they saw fit.” _

In the Worrells case, Manny was asked the following:

_“Liquidator's Barrister: Do you now accept that Ignite, instead of losing money by having the jet, would have been better to use its money to develop capabilities in the Phormula software which would have enabled advisers easily to identify clients who were in, or getting close to, margin call territory?-- 

E Cassimatis: Privilege. No.”_

Unfortunately, Manny, it was not a privilege knowing you!

Frank Ainslie – 11th October 2011


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## bunyip (11 October 2011)

Judd said:


> bunyip, an informative post but there is one small point that you may have overlooked which has been raised by others; that is the question of hindsight.  It would have been interesting if ASIC or others had stepped in in 2006 or so when things were going swimmingly well and said, this investment model is way too dangerous for you punters so we are closing it down or warning you against it.  Would Storm clients have then rushed for the exit?  Don't know and we never will.




Judd, it's an interesting question - would they or wouldn't they have jumped ship if ASIC or anyone else had told them what they were doing was fraught with danger? Perhaps some would and some wouldn’t. As you say, we’ll never really know.
My experience with human nature is that prudent people sometimes tend to become imprudent when exposed to the lure of big money.
A friend of mine bought a ten thousand dollar software package that was going to make him his fortune in the stockmarket. I told him not to buy it and why, but he bought it anyway, and of course lost heaps of money.
A relative of mine borrowed a six figure sum to invest in the stockmarket. She was sitting on a 100% gain when the bull market showed clear signs of running out of steam just prior to the 2008 crash. The warnings were loud and clear in every newspaper and every news program for months before the crash. I told her to sell out but she didn’t. Years later she’s still holding her shares and still paying interest on the loan. Her shares are worth much less than she paid for them.
She’s normally a prudent person, but the lure of money clearly affected her judgment.

Many people knew the dangers inherent in heavily gearing into the stockmarket - they well remember the lessons of 1987. They didn't get caught by the likes of Storm.
Others did get caught. Most of them were around in 1987. 
Others will get caught in the future by dodgy investment schemes.
That's how it's always been and always will be. 
No corporate watchdog and no amount of legislation will ever change that.


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## Judd (11 October 2011)

bunyip said:


> ......I told him not to buy it and why, but he bought it anyway, and of course lost heaps of money.............
> 
> Many people knew the dangers inherent in heavily gearing into the stockmarket - they well remember the lessons of 1987. They didn't get caught by the likes of Storm.
> Others did get caught. Most of them were around in 1987.
> ...




You're a braver person than I, bunyip.  I learnt my lesson on the provision of advice many years ago when I was asked for my opinion on a business venture by a neighbour.  I simply asked whether he was certain he had the appropriate management and financial skills.  I copped a mouthful.  Sadly he went bankrupt and lost his home.  So now, I attempt to hold my tongue (not always successful in that)  and just watch the trainwrecks of which there are, unfortunately, a few.

And you are right.  Others will be caught by dodgy - and not so dodgy - investment schemes.  Simply because margin loans are now a regulated product following the Ripolli report doesn't mean that you can't blow one up.  And they are not non-recourse, so you can still loose your home.  You just have to misuse the product.

If there is anything to be grateful for in this whole sorry saga it is that of the 100% who attended a Storm seminar, according to the great man himself, 75% walked away from the product so the damage has been limited to only 3,000 or so.


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## doobsy (11 October 2011)

I have sat back and kept up to date with this forum for my own personal reasons without posting. 

I am part of the hated industry that supposedly has done so much wrong and yet I did not lose a single client over the past 4 years. I am however still picking up the pieces for Storm clients who we stepped in to assist.

My question to those who were suckered (and that is the greatest pity of all) is this:

My example client couple walks in to my office aged 65 with a house worth $500,000 paid off and $400,000 in super. My advice (and that of most advisers) would be to start an allocated pension/s, draw a sustainable amount of 5% tax free money and apply for the aged pension. They could have expected somewhere in the order of $40,000 - $50,000 per annum from that strategy. A comfortable retirement.

Storm clients were told to borrow against the home to 80% ($400,000) and pull out the super. Invest that $800,000 into nothing but Aussie shares and then gear against it with a margin loan of another $800,000. With $1.6M now invested and *assumed*(always dangerous) returns of 10% per annum they were drawing incomes of around $100,000 per annum. Interest was capitalised so was never part of the costs. Massive interest costs meant tax deductions to offset income earnt.

Should the bank be found liable for their part and clients receive some sort of compensation, will Storm clients be paying back the extra money they happily received and spent on OS holidays etc????

There is no question wrong has been done but someone who was part of the strategy for 5+ years probably received and spent more than $250,000 above what the average retiree would have lived on. This was part of the strategy Storm used to sucker clients but that doesn't make it acceptable for storm clients to forget they lived a pretty high life while the going was good.


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## Frank Ainslie (11 October 2011)

bunyip said:


> Judd, it's an interesting question - would they or wouldn't they have jumped ship if ASIC or anyone else had told them what they were doing was fraught with danger? Perhaps some would and some wouldn’t. As you say, we’ll never really know.
> My experience with human nature is that prudent people sometimes tend to become imprudent when exposed to the lure of big money.
> A friend of mine bought a ten thousand dollar software package that was going to make him his fortune in the stockmarket. I told him not to buy it and why, but he bought it anyway, and of course lost heaps of money.
> A relative of mine borrowed a six figure sum to invest in the stockmarket. She was sitting on a 100% gain when the bull market showed clear signs of running out of steam just prior to the 2008 crash. The warnings were loud and clear in every newspaper and every news program for months before the crash. I told her to sell out but she didn’t. Years later she’s still holding her shares and still paying interest on the loan. Her shares are worth much less than she paid for them.
> ...




Bunyip, old chap! You are still not getting it.

_“My experience with human nature is that prudent people sometimes tend to become imprudent when exposed to the lure of big money.”_

People did not invest in Storm because of the lure of big money! 75% of those that invested in Storm were self-funded retirees that had worked hard all their lives to insure that they would be financial self-sustaining when they grew old. They didn’t go to the Casino every night to gamble their hard earned money away as many do. We are talking now about conservative Australians that certainly didn’t have a gambling mentality. 

The Storm financial model was sold to us as a ‘low risk scheme’ with a capital growth over 7 to 10 years with little risk attached because investments were made in shares on a broad market front.

We, Helen and I, were millionaires when we invested in Storm, having 1.7 million in unencumbered assets including $1 million that we received for our shopping centre. We went to Storm who had 13,500 clients because we were seeking professional financial advice from a large and reputable company. Storm was an FPA ASIC approved organization that came highly recommended. You make it sound as though the people in Storm were all greedy individuals that were prone to taking chances. Quite the reverse in fact!  It is unfortunate that many share your point of view because it makes our cause that much harder.  

The financial sector has changed as a result of the Storm collapse. New regulations have been put into place to control margin loans and housing loans for investment purposes. Financial advisers have now been put on notice that the industry will no longer tolerate shonky operators. This didn’t come about because we, the people that used Storm, were at fault, but rather because the financial sector was at fault, and the people that operated therein.  

We are now fighting the Banks not only for our future but yours as well. The banks have had it their own way for far too long, riding rough shod over peoples’ lives. When we beat these banks in court, we will be protecting the future of those that come after us. The financial sector will be a safer place for investors in the future because we are standing up now for our rights. If someone steals your money you have a right to prosecute that individual. That's exactly what we are doing!

Rather than call us greedy, embrace what we are trying to do. One day it may be you that has been shafted by someone, be it a bank or someone else. For that matter, it may be your parents that are deceived by people that promote themselves as professionals but act in a most unprofessional way. _“And don’t tell me it couldn’t happen to you because it can happen to anyone!” _

All anyone in Storm is asking for is a fair go! It’s the Australian way. It’s who we are as a nation! We are ordinary Australians that have been deceived by the likes of the CBA, the BOQ and the Macquarie Bank because they conspired with Storm to churn money out of us for their own ends. 

We, Helen and I, lost 1.7 million dollars in 15 months and ended up with a $340,000 debt – a turn-around of $2 million dollars. That wasn’t caused by the global financial crisis or the fact that we had a gambling problem. Far from it! It was cause by the wrongdoings of those we dealt with, namely Storm and the banks involved with it.

_“Others will get caught in the future by dodgy investment schemes.”_ 13,500 clients bought it! What makes you think you are any different?

Come back in 2013 when this is all finished with and let me know what you think then – when criminal charges have been laid and some of those responsible for this grand deception are languishing in prison. 

Fraud is fraud no matter how many ways you want to look at it! This is not a normal situation where people invested and lost their money when the markets went belly-up. I suggest therefore that you don’t treat it as such or make judgements on people when you are not abreast of all the facts.


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## Julia (11 October 2011)

doobsy said:


> My example client couple walks in to my office aged 65 with a house worth $500,000 paid off and $400,000 in super. My advice (and that of most advisers) would be to start an allocated pension/s, draw a sustainable amount of 5% tax free money and apply for the aged pension. They could have expected somewhere in the order of $40,000 - $50,000 per annum from that strategy. A comfortable retirement.
> 
> Storm clients were told to borrow against the home to 80% ($400,000) and pull out the super. Invest that $800,000 into nothing but Aussie shares and then gear against it with a margin loan of another $800,000. With $1.6M now invested and *assumed*(always dangerous) returns of 10% per annum they were drawing incomes of around $100,000 per annum. Interest was capitalised so was never part of the costs. Massive interest costs meant tax deductions to offset income earnt.
> 
> ...






Frank Ainslie said:


> People did not invest in Storm because of the lure of big money! 75% of those that invested in Storm were self-funded retirees that had worked hard all their lives to insure that they would be financial self-sustaining when they grew old.



If they were self funded retirees, why would a simple and safe strategy such as outlined above by Doobsy not be more acceptable than double gearing?



> The Storm financial model was sold to us as a ‘low risk scheme’ with a capital growth over 7 to 10 years with little risk attached because investments were made in shares on a broad market front.



You didn't think that borrowing up to 80% on your freehold property to buy shares and then taking out a margin loan on those shares bought with borrowed funds was risky????


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## Frank Ainslie (11 October 2011)

bunyip said:


> Judd, it's an interesting question - would they or wouldn't they have jumped ship if ASIC or anyone else had told them what they were doing was fraught with danger? Perhaps some would and some wouldn’t. As you say, we’ll never really know.
> My experience with human nature is that prudent people sometimes tend to become imprudent when exposed to the lure of big money.
> A friend of mine bought a ten thousand dollar software package that was going to make him his fortune in the stockmarket. I told him not to buy it and why, but he bought it anyway, and of course lost heaps of money.
> A relative of mine borrowed a six figure sum to invest in the stockmarket. She was sitting on a 100% gain when the bull market showed clear signs of running out of steam just prior to the 2008 crash. The warnings were loud and clear in every newspaper and every news program for months before the crash. I told her to sell out but she didn’t. Years later she’s still holding her shares and still paying interest on the loan. Her shares are worth much less than she paid for them.
> ...




Bunyip, old chap! You are still not getting it I’m afraid!. But then you are not alone judging by some of the other remarks on this forum.

_“My experience with human nature is that prudent people sometimes tend to become imprudent when exposed to the lure of big money.”_

People did not invest in Storm because of the lure of big money! 75% of those that invested in Storm were self-funded retirees that had worked hard all their lives to insure that they would be financially self-sustaining when they grew old. They didn’t go to the Casino every night to gamble their hard earned money away as many do. We are talking now about conservative Australians that certainly didn’t have a gambling mentality. 

The Storm financial model was sold to us as a ‘low risk scheme’ with a capital growth over 7 to 10 years with little risk attached because investments were made in shares on a broad market front.

We, Helen and I, were millionaires when we invested in Storm, having 1.7 million in unencumbered assets including $1 million that we received for our shopping centre. We went to Storm who had 13,500 clients because we were seeking professional financial advice from a large and reputable company. Storm was an FPA ASIC approved organization that came highly recommended. You make it sound as though the people in Storm were all greedy individuals that were prone to taking chances. Quite the reverse in fact!  It is unfortunate that many share your point of view because it makes our cause that much harder.  

The financial sector has changed as a result of the Storm collapse. New regulations have been put into place to control margin loans and housing loans for investment purposes. Financial advisers have now been put on notice that the industry will no longer tolerate shonky operators. This didn’t come about because we, the people that used Storm, were at fault, but rather because the financial sector was at fault, and the people that operated therein.  

We are now fighting the Banks not only for our future but yours as well. The banks have had it their own way for far too long, riding rough shod over peoples’ lives. When we beat these banks in court, we will be protecting the future of those that come after us. The financial sector will be a safer place for investors in the future because we are standing up now for our rights. If someone steals your money you have a right to prosecute that individual. That's exactly what we are doing!

Rather than call us greedy, embrace what we are trying to do. One day it may be you that has been shafted by someone, be it a bank or someone else. For that matter, it may be your parents that are deceived by people that promote themselves as professionals but act in a most unprofessional way. _“And don’t tell me it couldn’t happen to you because it can happen to anyone!” _

All anyone in Storm is asking for is a fair go! It’s the Australian way. It’s who we are as a nation! We are ordinary Australians that have been deceived by the likes of the CBA, the BOQ and the Macquarie Bank because they conspired with Storm to churn money out of us for their own ends. 

We, Helen and I, lost 1.7 million dollars in 15 months and ended up with a $340,000 debt – a turn-around of $2 million dollars. That wasn’t caused by the global financial crisis or the fact that we had a gambling problem. Far from it! It was cause by the wrongdoings of those we dealt with, namely Storm and the banks involved with it.

_“Others will get caught in the future by dodgy investment schemes.”_ 13,500 clients bought it! What makes you think you are any different?

Come back in 2013 when this is all finished with and let me know what you think then – when criminal charges have been laid and some of those responsible for this grand deception are languishing in prison. 

Fraud is fraud no matter how many ways you want to look at it! This is not a normal situation where people invested and lost their money when the markets went belly-up, no matter what the would-be-experts on this forum say. For them I will ask only this, _"why do you think ASIC is litigating against the 3 banks involved?" _Because it has nothing better to do perhaps? Or could it be that the people in Storm have been wronged and the Regulator is seeking to put it right? 

If ASIC is now pursuing these banks on our behalf because it has now decided that these banks have a case to answer  who are you or others on this forum, who are not abreast of all the facts, to say otherwise? They have the evidence! You don't! I therefore suggest that you suspend judgement until this plays out in Court. After you have viewed the evidence, that is! Only then can anyone be truly objective which seems somewhat lacking on this forum at the moment.


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## Judd (11 October 2011)

Julia said:


> If they were self funded retirees, why would a simple and safe strategy such as outlined above by Doobsy not be more acceptable than double gearing?
> 
> You didn't think that borrowing up to 80% on your freehold property to buy shares and then taking out a margin loan on those shares bought with borrowed funds was risky????




Obvious questions, Julia, but let us not forget that those former Storm clients are hurting and hurting badly.  However, it is a bit odd that Mr Ainslie is dumping on bunyip when bunyip was actually replying to me.

And the "reforms" have done nothing to lessen the potential danger associated with margin loans or any other form of debt.  You can be completely debt free, apply for a margin loan and go down the toilet due to misuse (I have personally proved that as I have said way, way back on this thread.)  All that has happened is that the product provider has been given a free kick to gather additional data on the applicant that wasn't available before.

Strange, I was at a dinner held by an accountancy firm - long story but knew a friend and I scored a free dinner out of it - and I got talking to one of the number crunchers.  She had only recently joined the firm and the conversation moved to Storm.  She sort of grimaced at one point saying that she had told some of her then clients to get another accountant if they wished to go to Storm as it was obvious that it would eventually all blow up in their faces.  She was a nice lass (well, I thought she was) but, heck, was she unsympathetic to the plight of her former clients.  I suppose if it doesn't impact directly on yourself you tend to be a tad callous.


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## Garpal Gumnut (11 October 2011)

Frank and bunyip.

At the risk of getting hammered by both of you I will just add a few words.

You are both correct in part, but will never fully agree with each other.

Storm investors had an extraordinary perception of safety in their investments fed by an unusually high faith in their financial advice, in their banks and in their own financial plans. Hindsight is wonderful. Storm and the banks were very persuasive, even going to the loo was a gold plated experience.

Criminality and persuasion led to the destruction of their capital.

Some of them were warned by family, friends and other advisers that the advice they were given was less than robust. That if it sounds too good to be true, it probably is. Many could not see through the criminality, while others looking on could see the writing on the wall. 

On the other hand the banks colluded with the criminality in their lending practices.

Greed is the only common thread through all of this, and I say that as a great believer in the concept that we are all greedy if we are truthful with ourselves. 

(And Frank when I say greed, I do not mean it as a personal insult, it is common parlance in investing, as in "fear and greed", the great twin emotions driving markets.) 

They will salvage some money from the banks, but the criminals will probably escape any real punishment.

As we speak the Financial Advice industry, aided and abetted by the government and industry funds, is gearing up through clever TV advertising to fleece another generation of retirees.

gg


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## Frank Ainslie (11 October 2011)

Garpal Gumnut said:


> Frank and bunyip.
> 
> At the risk of getting hammered by both of you I will just add a few words.
> 
> ...




Hi 99,

There's a "Smart" comment there somewhere!

No hammer this time! 

If the truth be known, we in Storm took our eye off the ball  because we, as you quite rightly pointed out, _"had an extraordinary perception of safety in our investments fed by an unusually high faith in our financial advice, in the banks and in our own financial plans._

We made the mistake of leaving it entirely to Storm because that is what we were paying them to do - look after and protect our interests. They, Storm,  told us they had the necessary safe-guards in place to protect our assets and we believed them. Indeed, we had no reason to believe otherwise. They lied about that as they did everything else.

Having said that, what Storm and the banks did to us has nothing to do with sound financial advice or prudent lending - completely the opposite in fact! Banks are governed by codes of banking practice that they cannot ignore. Until now they, the banks, have laid down the conditions, and we have been expected to follow on their terms. They have remained virtually untouchable because the cost of litigating against them is too much for your average Joe Blow in the street. However, we now have the numbers, so reducing our litigation costs (class actions) and our cases remain strong. 

If unregistered managed investment schemes are proven we will recover much of what we have lost. On the other hand, if we can only get the the Banks for breach of contract, linked creditor, or breach of the TPA (unconscionable conduct and imprudent lending will figure somewhere in this as well) then any compensation will be somewhat reduced. 

One thing I should add. The damage the Storm debacle has done to the financial sector as a whole and financial advisers in particular cannot be measured at this stage. You can bet your life though that the children of these Storm victims and their grandchildren will be told in no uncertain terms that _"financial advisers cannot be trusted!"_ I, myself, am lecturing tonight on the subject of Storm Financial at the Lions Club here in  Brisbane to a group of elderly people. I will be relaying the same message! 

Certainly there are some genuine financial advisers out there, but the trouble is that you can't tell the _'shonks'_ from the genuine article any more. How can you when the _'shonks' _don't wear a label on their hat saying, "SHONK!" 

What's that old saying, "When you sow the wind you sometimes reap the whirlwind! I'll never use a financial adviser again, and if I have my way, no one else I know will either.


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## The Falcon (11 October 2011)

Frank Ainslie said:


> I'll never use a financial adviser again, and if I have my way, no one else I know will either.




I really feel for you stormers and sorry that you had to learn this lesson so late in the piece.

I had the good fortune of being fleeced by PIS/Timbercorp as a young fella, 24 years old and looking to sort out my financial future I took the advice that i paid for and did 80k or so....i thought i was doing the right thing. 

I look on it now as a lesson, nobody will look after you but YOU......I'll never shoot the lights out, but i'll sleep at night managing my own portfolio of boring investments. 

I wish you all the best.


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## Julia (11 October 2011)

Judd said:


> Obvious questions, Julia, but let us not forget that those former Storm clients are hurting and hurting badly.
> 
> I suppose if it doesn't impact directly on yourself you tend to be a tad callous.



What is callous about asking why people who were already self funded retirees were not prepared to accept a conservative plan as outlined by Doobsy, instead of risking what was apparently a pretty reasonable level of financial independence by double gearing?

Surely to have become self funded retirees, people would have had to demonstrate some reasonable understanding of managing finances?  So for me it beggars belief that such people would suddenly relinquish all interest in protecting their assets by telling any financial adviser "just invest this for me but don't actually explain to me what the strategy is and how I will be protected if markets turn down".

I simply do not get it.





The Falcon said:


> nobody will look after you but YOU......I'll never shoot the lights out, but i'll sleep at night managing my own portfolio of boring investments.



 Exactly.
If in the Storm case, the banks have done the wrong thing, then hopefully they will be obliged to offer appropriate compensation.  In the meantime, I agree with Bunyip that to remove the focus from Storm Financial itself is not what any aggrieved investor should be doing.  Hard to believe they didn't well and truly protect themselves whilst allowing their clients' investments to be demolished.


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## bunyip (12 October 2011)

Frank Ainslie said:


> If ASIC is now pursuing these banks on our behalf because it has now decided that these banks have a case to answer  who are you or others on this forum, who are not abreast of all the facts, to say otherwise? They have the evidence! You don't! I therefore suggest that you suspend judgement until this plays out in Court. After you have viewed the evidence, that is! Only then can anyone be truly objective which seems somewhat lacking on this forum at the moment.




Frank – I’ve offered no opinion as to whether or not the banks are guilty of anything illegal.
On the contrary, I’ve said that if the banks can be proven guilty of anything illegal, then they should be brought to justice.

As for your comment “_“And don’t tell me it couldn’t happen to you because it can happen to anyone!” _

Well no actually Frank, it couldn’t happen to anyone, it can only happen to those who are not astute enough to do their research by thoroughly checking out the advice they’re given by a financial planner.
It can only happen to those who are gullible enough to be sucked in by a highly aggressive and risky strategy that’s presented to them as safe and conservative.
It can only happen to those who don’t heed the lessons taught by market crashes such as 1987.
It can only happen to those who are gullible enough to believe everything that salesmen tell them.
It can only happen to those who are naÃ¯ve enough to think that a salesman is going to put your interests in front of his own.
It can only happen to those who don’t step in to over-ride their financial planner when he clearly demonstrates that he’s out of his depth by allowing the value of their investments to evaporate, as Storm did when they sat on their hands through 12 months of one of the worst markets crashes in history, and took absolutely no action to prevent their clients from being wiped out.

I and lots of others don’t use financial planners, Frank. We’ve put time and effort into getting ourselves reasonably knowledgeable in financial and investment matters so that we can handle our own investments.
Incidentally, the knowledge and education we gained is not at all complex and is freely available to anyone willing to learn it. Much of it is just good old common sense - a commodity that seems to have been in short supply in the case of the Storm debacle.


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## bunyip (12 October 2011)

Frank Ainslie said:


> Bunyip, old chap! You are still not getting it.
> 
> People did not invest in Storm because of the lure of big money! 75% of those that invested in Storm were self-funded retirees that had worked hard all their lives to insure that they would be financial self-sustaining when they grew old. They didn’t go to the Casino every night to gamble their hard earned money away as many do. We are talking now about conservative Australians that certainly didn’t have a gambling mentality.



Frank

Here’s a hypothetical situation for you to consider....

A couple retire with 500 grand in super and an unencumbered house worth 625 grand. 
They sink their 500 grand of super money into a term deposit earning 5%, giving them a annual return of 25 grand. It’s not enough to comfortably live on, so they decide to rev things up a bit by withdrawing the money from the term deposit and investing it instead in the stock market where they hear that 10% returns are achievable.
Assuming they achieve their desired 10% return, they’ve now effectively doubled their yearly return to 50 grand simply by swapping their money over from a relatively safe investment to a more risky one.

Then someone recommends they have a yarn to the friendly sales team at Storm.
Storm says_ “Why have just 500 grand in the stock market – borrow 80% of the value of your house and sink that additional half a million into the market as well, then you can have a million in the market instead of just 500 grand. Double the investment – double the return.”_

Then more advice from Storm...._ “Use your million dollar share portfolio to raise a further loan of a million dollars (double gearing), then you’ll have twice as much money in the market for twice the return you’re currently getting.'
_
So let’s see what’s happened here.........our hypothetical couple started with a relatively safe investment generating a modest and relatively safe yearly return of 25 grand. Then by changing to a higher risk/higher return investment coupled with aggressive gearing, they managed to change their original 25 thousand dollar annual return into many times that figure. 
But only while the stock market remained bullish. Once the bear market took hold, the same aggressive strategy that dramatically magnified their gains would now dramatically magnify their losses.
In fact the losses would mount up far more rapidly than the profits ever grew, simply because market crashes are always more dramatic than market rises.
This couple didn't realise that their strategy was aggressively chasing big returns – they had only wanted to provide themselves with a comfortable retirement. 

Seems to me that the above scenario a pretty fair representation of what you Stormers did.


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## doobsy (12 October 2011)

Julia said:


> What is callous about asking why people who were already self funded retirees were not prepared to accept a conservative plan as outlined by Doobsy, instead of risking what was apparently a pretty reasonable level of financial independence by double gearing?
> 
> Surely to have become self funded retirees, people would have had to demonstrate some reasonable understanding of managing finances?  So for me it beggars belief that such people would suddenly relinquish all interest in protecting their assets by telling any financial adviser "just invest this for me but don't actually explain to me what the strategy is and how I will be protected if markets turn down".
> 
> ...






Julia, we lost business and we missed out on business because we couldn't "promise" the returns or lifestyles that Storm promised. In retirement this is a pretty strong driver. We manage ex Storm clients that still to this day want to be super aggressive and have to work really hard to ensure they understand there are no free rides in life.

Frank is correct in the statement about trust in the adviser but there were plenty that were in the process becuase they saw it as a 'get rich quicker than everyone else' scheme. Those personalities will always lose money.

3 points to note. There were not 13,500 "stormified" investors. It was more like 3-4000. The rest were lucky, smaller, less important, less gullible clients that when their adviser either changed dealer to storm or sold the business to storm did not get all the way through the process yet. If one upside can be found it is that the crisis hit before Storm got that chance.

2nd point - The changes in the industry will provide overall benefits. Financial Planners need to get away from returns. We don't provide returns. We provide advice. We haven't lost clients and have continued to grow by ensuring people understand that the technical and strategic advice we give provides long term benefits. We cannot control markets but we can control exposure to markets. 

3rd point - as a followon from point 2. Fees. In the example I gave that client would expect to pay between $3000-4000pa depending on the services provided. The storm client with $1.6M invested were asked for 7% or $112,000 upfront (Frank I shudder to think of what you handed over). It would take me at least 28 years to get the same revenue out of my client. This should have set off alarm bells. If Storm were all about the client then charging them on an annual basis should have meant that they had a vested interest in that client not just on bringing in a new client and therefore new fees. This structure meant that to generate more revenue you either needed new clients or needed to load up existing clients even higher. This was a major fault in the system that people seem to have ignored. This was NOTHING to do with the banks. The internal storm business model ground to a halt if new monies stopped. This is why CBA called in their loan. They could see the business revenue stream disappearing. 

My client generates the same fee no matter what the level of investment as the fee is linked to the service I provide. I charge it via their funds as it is simpler than sending out an invoice however it is not market based.

People need advice. No different to needing accounting or legal advice but Fin Planners don't just deal with transactional advice and therefore can't charge accordingly. It is all about adding value and when I look at the Storm model even way back in the good times of 2005-6 I still don't believe that they added real long term value. They provided above market returns using gearing but even if we had avoided the drops we saw in 2008 and just went through the same muddle through low return environment we are in, the model would not have added any real value. 


Maybe Frank can provide more insight into the very slick and professional sales "spin" that they used to make people feel the strategy was a safe one. We have all heard clients say they believed it was safe so I am interested in what was said that made them think that after being told their investment amount could become 4x as large.


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## bunyip (12 October 2011)

Frank Ainslie said:


> If the truth be known, we in Storm took our eye off the ball  because we, as you quite rightly pointed out, _"had an extraordinary perception of safety in our investments fed by an unusually high faith in our financial advice, in the banks and in our own financial plans._
> 
> We made the mistake of leaving it entirely to Storm because that is what we were paying them to do - look after and protect our interests. They, Storm,  told us they had the necessary safe-guards in place to protect our assets and we believed them. Indeed, we had no reason to believe otherwise. They lied about that as they did everything else.
> .





Frank

Frank, I’m pretty sure I recall you saying somewhere that Storm investors were astute. Also that they weren't gullible.

You took your eye off the ball, you placed blind trust in salespeople you barely knew, you failed to thoroughly check out the advice you were given, you got suckered into believing that an aggressive and highly risky strategy was safe and conservative, you paid exorbitant upfront fees.

No offence intended here Frank, but let's be realistic – your actions were not the actions of astute people - they sound more like the actions of gullible people who couldn’t be bothered to do a bit of simple research and use a bit of common sense.

Somewhere else I think you claimed that even savvy people couldn’t have seen what was coming.
Wrong, Frank – dead wrong. 
Savvy people would have, and did, spot the pitfalls in Storm’s plan a mile away. 
Savvy people learnt and remembered the lessons from 1987, and treated margin loans with the caution and respect that they deserve. That’s not to suggest that savvy people don’t use margin lending, just that they use it sensibly. 
Believe me Frank, savvy people would never have been duped by Storm in the way that you were.


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## McLovin (12 October 2011)

I shudder at the thought of retirees borrowing to invest in equities.


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## sailteam30 (12 October 2011)

Can you spot the odd one in the sequence - 

When you have your house built you go to a registered builder
When your child needs education assistance you go to a registered teacher
When you need medical assistance you go to a registered doctor
When you need financial assistance you go to a registered financial planner


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## Garpal Gumnut (12 October 2011)

I guess it all comes down to trust, but the ads the financial houses are running now have those "feelgood boomer asshole actors", looking as if they'll get a leg over just from seeing a financial planner.

It will happen again, in three to five years time.

If the Gumnut Trust planned a listing called Cyclone Yasi Investments Inc., I bet you we would get a tsunami of suckers in for the plucking.

gg


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## Gonzo1975 (12 October 2011)

bunyip said:


> Frank
> 
> but let's be realistic – your actions were not the actions of astute people - they sound more like the actions of gullible people who couldn’t be bothered to do a bit of simple research and use a bit of common sense.
> .




From reading through your posts Bunyip, am I right to say that you will be less then impressed should the courts find in favor of ASIC and the lawyers representing these "gullible" people and the receive compensation.

I also wonder if, should this happen that down the line some of the victims might  decide to seek compensation for the pain, suffering and for the loss of life they have suffered at the hands of the banks....


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## Harleyquin (13 October 2011)

I've just read all of your recent posts with interest.  Trust in the financial planners and financial planning industry was what we were quilty of.  The advisors, fully trained in financial planning, told us, those not trained in financial planning that this was a safe investment strategy for a number of reasons which I'm not going to go into here, except to say that they gave a very polished plausible explanation of why it was safe and we swallowed it hook line and sinker.

The point is, I think that we should have been able to trust.  I feel sorry for those in the financial planning industry who fall into the 'good' advisor category but the 'baddies' will always make this a risky industry and like Frank I've decided that I'll never trust a financial planner again.  I've taken your advice Julia.

I do believe now that we have to do our own research when it comes to investing, however, if the financial industry worked properly and all the advisors were trustworthy then we should be able to trust their investment skills.

Someone with investment qualifications is always going to be able 'to put it over' those of us who have no idea about investment strategies.

The three out of four potential clients of storm who walked away were perhaps lucky enough to realise that storm were not trustworthy, went for a second or third opinion or as many of you say, did their own research.

We would all prefer to be financially comfortable in retirement, and this isn't being greedy it's being practical, and the public is still being urged to seek financial advice but there are no real safe guards in place, despite what they may think of these new laws.  Laws are only as good as the law enforcers, and in storms case they proved to be as useless as.

I'm with you gg it'll happen again and my bet is also in a couple of years time.


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## bunyip (13 October 2011)

Gonzo1975 said:


> From reading through your posts Bunyip, am I right to say that you will be less then impressed should the courts find in favor of ASIC and the lawyers representing these "gullible" people and the receive compensation.
> 
> I also wonder if, should this happen that down the line some of the victims might  decide to seek compensation for the pain, suffering and for the loss of life they have suffered at the hands of the banks....




Gonzo mate

If the banks can be proven to have done anything illegal, then I'll be delighted to see them punished, including having to pay compensation.
I’d be even more delighted if Cassamatis and his henchmen were found guilty and thrown in the slammer for several years.

I am not, and never have been, an apologist for the banks. Frankly I don't like them - over the years I've paid them many thousands of dollars that I believe they had no right to.
To this day the bastards are still taking every opportunity they can to rip additional dollars out of me, such as hitting me with stiff charges if I inadvertently let my credit card go over the limit for a day or two.
I do think, however, that it's a bit rich for anyone to complain that 'The banks shouldn't have lent us so much money'.
Gees - if someone applies for a loan and they or their financial planner present figures to show how the loan will be serviced, and if the loan meets the banks security criteria, then of course they're going to lend the money.
Why the heck wouldn't they - lending is their business.


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## Harleyquin (13 October 2011)

There were storm clients who may have made big money during the best years however there were many of us who didn't.  Its interesting that ex storm clients are now going to other advisors asking for a high risk option.  When we went to storm we were given a high risk option, in fact we were given four options to choose from and I've copied that information below.

The question I ask is 'why were we given these options and then they ignored them as not all of us asked for a risky option.'

*PERSONAL PROFILE

As a further aid in providing a recommendation we would like to know your thoughts about investments.  Please tick and initial the box below that best represents your views on investments.

1.  I am prepared to entertain speculative ventures of a risky nature and am prepared to lose my asset totally if necessary in an attempt to make high profits.

2.  I am prepared to accept short to medium term volality and am also prepared to accept a level of real risk where some of my asset may be irrecoveraby lost.

3.  I am prepared to accept volatility if in the medium to long term the investment growth is higher and teh risks over that term are minimal or eliminated.

4.  I am not prepared to accept any level of volatility and realise that this selection will result in low growth and substantail exposure to inflation risk.*

As you can see from our storm profiles we were able to choose our level of risk which I think is fair enough.  There were certainly those who chose a high risk option but alternatively there were those who chose no risk at all.  

This was where the trust issue came in.  We trusted that we were being given our risk preference.  It wasn't until storm crashed that we found out that everyone was given the same investment strategy despite filling in this risk option.


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## zzz (13 October 2011)

sailteam30 said:


> Can you spot the odd one in the sequence -
> 
> When you have your house built you go to a registered builder
> When your child needs education assistance you go to a registered teacher
> ...




Agreed...this has even more weight as Storm Financial was endorsed by the FPA.


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## zzz (13 October 2011)

bunyip said:


> Gonzo mate
> 
> If the banks can be proven to have done anything illegal, then I'll be delighted to see them punished, including having to pay compensation.
> I’d be even more delighted if Cassamatis and his henchmen were found guilty and thrown in the slammer for several years.
> ...




Agreed....but fraud is illegal and a prudent banker should commit fraud.  The truth will evolve and where the banks have done wrong they will be made accountable I am sure.


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## Garpal Gumnut (13 October 2011)

Harleyquin said:


> *PERSONAL PROFILE
> 
> As a further aid in providing a recommendation we would like to know your thoughts about investments.  Please tick and initial the box below that best represents your views on investments.
> 
> ...




Hq,

Was that copied and pasted directly from a Storm document?

gg


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## doobsy (13 October 2011)

Harleyquin said:


> There were storm clients who may have made big money during the best years however there were many of us who didn't.  Its interesting that ex storm clients are now going to other advisors asking for a high risk option.  When we went to storm we were given a high risk option, in fact we were given four options to choose from and I've copied that information below.
> 
> The question I ask is 'why were we given these options and then they ignored them as not all of us asked for a risky option.'
> 
> ...




HQ

My understanding of things is that some people are not willing to be patient and will always believe anyone who tells them there is a shortcut to wealth. They will be suckered by sharemarket programs, property spruikers, whoever is the flavour of the month.

Your risk tolerance questionnaire is considered a guide. Storm used the answers to gauge how much "education" you needed before you would swallow the BS. I don't doubt there are those who missed out but Storm clients were not the only ones that took losses in the crisis. Anyone who had income sources (investments or wages) to service the loans provided should not be bailed out. They took a punt, the lending was legit and they lost. Those without the income (retirees etc) should have their home debts extinguished but again they took too much risk with their savings and lost. There will be people who were DIY investors who picked the Babcock and Browns, Allco's, etc of the world who lost money, there are plenty who lost it all in tech stocks in 2002. None of them will get a bailout.


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## doobsy (13 October 2011)

Harleyquin said:


> There were storm clients who may have made big money during the best years however there were many of us who didn't.  Its interesting that ex storm clients are now going to other advisors asking for a high risk option.  When we went to storm we were given a high risk option, in fact we were given four options to choose from and I've copied that information below.
> 
> The question I ask is 'why were we given these options and then they ignored them as not all of us asked for a risky option.'
> 
> ...




Oh, and if you picked the conservative or near conservative option, what the heck were you thinking and why didn't you pull them up when they presented a plan that involved 200-400% (of initial capital outside the home) exposure to a single asset class.


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## bunyip (13 October 2011)

sailteam30 said:


> Can you spot the odd one in the sequence -
> 
> When you have your house built you go to a registered builder
> When your child needs education assistance you go to a registered teacher
> ...




Nobody is suggesting there was anything wrong with consulting a registered financial planner.

The problem was that the strategy offered by Storm wasn’t properly investigated and researched by the clients.
Research should have involved much more than simply talking to existing Storm clients and finding out they were doing well in the midst of a raging bull market. Naturally they were going to tell you how great Storm’s strategy was!
Any mug can make money in a bull market.


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## sailteam30 (13 October 2011)

My point is you did spot the odd one out - and the other "dodgy registered builders/teachers/doctors" are serving time.

Also Manny would be occupying a lonely corner store somewhere in the burbs if he did not have the backing of some large banks who were in for their "slice of the action".


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## bunyip (13 October 2011)

Harleyquin said:


> There were storm clients who may have made big money during the best years however there were many of us who didn't.  Its interesting that ex storm clients are now going to other advisors asking for a high risk option.  When we went to storm we were given a high risk option, in fact we were given four options to choose from and I've copied that information below.
> 
> The question I ask is 'why were we given these options and then they ignored them as not all of us asked for a risky option.'
> 
> ...




No risk at all?

None of those four options offers ‘no risk’ – not even No. 4

I’d be extremely surprised to find any financial planning firm using the words ‘no risk’....not even a bunch of sharks like Storm.

Whatever made you think there is such a thing as a risk-free investment? I can assure you there is not.
And whatever made you think that the strategy proposed by Storm, i.e. borrowing heavily for stock market investment, was ‘no risk’, or even low risk? How could you possibly think such a thing?


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## Solly (13 October 2011)

Frank Ainslie said:


> "Was Ignite' the ignition Storm needed? (Part 2)
> 
> _“Apart from holding and or getting the income from the "Storm" trademarks, Ignite also developed and retained ownership of a computer program called "Phormula", which was used by Storm in connection with its business. Although Ignite was tasked with the development of "Phormula" it seems that Ignite did not initially have the financial resources to pay the development costs. An analysis of the financial records of Storm shows that Storm progressively advanced the required funds to Ignite by way of an unsecured and interest free loan. As at 30 June 2007 Ignite owed Storm $3.44 million. “_
> 
> ...




Hi Frank

I note that "IGNITE FINANCIAL SYSTEMS & RESEARCH PTY LTD" is still a registered company.  

http://www2.search.asic.gov.au/cgi-bin/gns030c?acn=091_752_920&juris=9&hdtext=ACN&srchsrc=1

I wonder what its purpose is ?


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## bunyip (13 October 2011)

Frank Ainslie said:


> People did not invest in Storm because of the lure of big money! 75% of those that invested in Storm were self-funded retirees that had worked hard all their lives to insure that they would be financial self-sustaining when they grew old.






Frank

I have a question that I hope you'll find time to answer.
Last time I asked this question I was abused by one of our members who, to his credit, has since apologized for his outburst.

The 75% of Stormers you mention who were self-funded retirees and were already 'financially self-sustaining'......I'm wondering why they weren't happy to just continue living the good life, letting their passive income fund the reasonably comfortable lifestyle that's the privilege of self-funded retirees?
Why would they risk that by getting involved in heavy borrowings to fund stock market investment?
And in particular, why would those who were actually quite wealthy feel any need to chase any further income, particularly if it meant mortgaging their previously unencumbered home?

I realise you can't speak for everyone, Frank, but maybe you can tell us why you personally took this step, given that you already had significant wealth from the sale of your shopping center?

And another thing I'm wondering is why you, who were obviously an astute operator in your private business life, suddenly became anything but astute when Storm ran their highly risky and aggressive strategy past you.

You were an adult at the time of the spectacular market crash in October 1987 – do you have no recollection of that event? Do you not recall seeing it on TV or in the papers, do you not remember the stories of  New York stockbrokers committing suicide when both they and their clients were wiped out overnight by margin calls?

Did it not occur to you that it could all happen again – that our market could slump 25% in a single day and 50% in a few weeks, as it did in 1987? 
How could you and so many others fail to consider these things when Storm was advising you to sink huge amounts of borrowed money into the stock market?
How could you possibly think it was a safe or conservative or low risk strategy?

Frank, I’m not trying to upset you – you seem like a decent and genuine bloke to me – but crikey, I’m still trying to get my head around why you Stormers did what you did, particularly those of you who were self-funded retirees who had no need to get involved in further investments and further risk. 
I’m still shaking my head in amazement that you didn't hear the alarm bells ringing loud and clear.


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## bunyip (14 October 2011)

Harleyquin said:


> The point is, I think that we should have been able to trust.  I feel sorry for those in the financial planning industry who fall into the 'good' advisor category but the 'baddies' will always make this a risky industry and like Frank I've decided that I'll never trust a financial planner again.  I've taken your advice Julia.
> 
> I do believe now that we have to do our own research when it comes to investing, however, if the financial industry worked properly and all the advisors were trustworthy then we should be able to trust their investment skills.
> 
> ...





Harleyquin, I agree that you should have been able to trust. 
But gee whiz - shonks have been common throughout the history of the human race. In todays commercial world the shonks are more plentiful than ever before. Every industry has its shonky operators - to trust any sort of advice involving money is risky in the extreme.....unless you thoroughly research the advice you're being given.
But anyway, I guess I'm only telling you what you've already learnt from your unfortunate experience with Storm.

I agree with you that preference for a comfortable retirement is practical rather than greedy.
However, the greed factor comes in when extremely aggressive borrowing and investment strategies are used to massively boost retirement income.
Unfortunately there have been many decent people burnt because they didn't realise that the strategies they implemented on Storm’s advice were greedy and reckless and extremely risky.


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## SJG1974 (14 October 2011)

This really is, in my opinion, a very worthwhile debate and has been quite insightful to read through it all.

Doobsy, it is good to have someone from "the darkside" posting.  I have used a financial adviser for quite a while and cannot speak highly enough of him.  I don't rely on him to generate me investment returns...I feel I am able to do this myself.  What I value is the strategic work that he does to help manage my tax position, structure my assets so they are protected in the best possible way and ensure that I am taking advantage of opportunties that changes in legislation and the like offer.

He is not an investment adviser, but rather a financial planner who is helping me plan for my future. I think investment adviser/salespeople and financial planners get grouped together, and they do not perform the same role...far from it.

I think the financial planning industry has copped a bad rap not only on these boards but in general due to the actions of a few. There are a lot of good advisers out there who make a real difference to people's lives...IN A GOOD WAY.

In looking at Storm, putting my client hat on, alarm bells would have rung loud if:

- I was told that borrowing against my home and then borrowing more was not a high risk strategy
- that because I am investing in index funds they are low risk
- that I could expect returns of 10% per annum
- that I would be charged 7% fees to simply put in place an investment strategy, and be charged that fee on the geared up amount of investment, and be charged the fee everytime I ramped up my borrowings
- that I was told to take all my money out of the tax haven that is superannuation and invest it all in shares outside of super
- that my investment portfolio was not diversified between different asset classes rather than 100% in shares
- that I could get a loan for hundreds of thousands of dollars from the bank without having a regular income other than investment dividends

etc.

I am firmly in the Bunyip camp...with so many alarm bells ringing, I cannot for the life of me understand how so many people fell for this, particularly people who were already well off and living comfortably?


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## Harleyquin (15 October 2011)

I haven't scanned the storm profile gg but I have copied it word for word from our documentation.  I could scan it but it's going to say exactly the same, the only thing is, the original has our signature on it so I prefer not to.  

I know that this documentation doesn't say 'no risk' and I agree I don't think any planner would ever offer no risk but it doesn't say 'we only offer high risk' either does it.  Between the information we gave in our paperwork and the talks we had with our planner they were made very aware of what we were looking for and gave us the assurances that we asked for.  To turn around and ignore what we said we were looking for and to tell us that it was a safe strategy is nothing short of lying in my book.

There are those of you on this forum who say 'how can you mortgage your home didn't you realise how dangerous this was'  Of course we thought it was dangerous but we had a trained financial planner, again ASIC and FPA backed, saying it wasn't and telling us why it wasn't.  I'm not going to go into details here but the smooth speil sounded very logical and we trusted that they knew what they were doing.

As far as all the arguments go, if you can't trust an ASIC and FPA backed planner to do the right thing by their clients then there is something seriously flawed.  Storm will no doubt be proved to be as shonky as we all know they've been.  My point with the banks is 'being at the top of the financial food chain they knew exactly what storm were up to ' and therefore are as quilty as storm, in fact, I'm happy to say that they are more quilty than storm.  Just because a planner is prepared to step outside the law doesn't excuse the banking sector in any way form offering financial support and making it a reality.  

I know that banks lend money but they have rules and those rules have been broken.  You only have to read the banking code of conduct to realise just how many of their own rules have not been adhered to.  

With all the monitoring and audits which are supposed to occur in the financial industry why wasn't this scam picked up long before it blew up as it did.  Obviously from reading earlier posts on this forum, other planners and accountants were aware of storms dangerous strategy.  One said on this forum that, basically, you can't report one of your own.  If they aren't doing the industry and their clients any favours, why can't they report them to the right authorities.

Also if other planners and accountants knew that storms policy was dodgy this proves my point, even more so, and that is, that the banks all knew very well what storm were doing and financed it.  Again I make my point, the banks financial backing brought storms high risk ideas to reality and therefore are directly responsible for this debacle.  

I expect the financial sector, and that includes the banking sector, in this country to be more accountable than they have proved to be in this whole sorry saga.  OK we've been burnt, we'll learn to live with that, but the perpetrators of this crime are not above the law.  As I said in a previous post, 'a criminal is a criminal and needs to be convicted for his crimes'   In the storm case it's 'criminals' and many of them.


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## Harleyquin (15 October 2011)

'_ I was told that borrowing against my home and then borrowing more was not a high risk strategy'_

We were told that we could only borrow up to 60 percent of our homes value and it would be quite safe.  We were not told that we would be borrowing more than that.  In fact our advisor told us it wasn't safe to borrow more than 60 percent.  I don't know what other storm advisors told their clients.  

_- that because I am investing in index funds they are low risk_

I did look into index funds and the information I was given was they are safer than ordinary shares.

- _that I could expect returns of 10% per annum[/I

We weren't told this, in fact, we were told not to expect a return for the first 5 - 7 years.

- that I would be charged 7% fees to simply put in place an investment strategy, and be charged that fee on the geared up amount of investment, and be charged the fee everytime I ramped up my borrowings

We weren't told this either, we were given a set figure and told that this was all we would ever have to pay, unless we chose to put in more money, and the advisor went to great pains to point out that 'as there were no annual fees etc that over the lifetime of the investment that it actually worked out cheaper and he quoted figures to support this'


- that I was told to take all my money out of the tax haven that is superannuation and invest it all in shares outside of super

We weren't told this and still have our super.  I know there are others who did put in their super but we were not told to put our super in, in fact we were told to leave it in superannuation.

- that my investment portfolio was not diversified between different asset classes rather than 100% in shares

On the contrary we were told that this strategy was very  diversified, over three different areas of investment, which basically was - banks, mining and technology, and in the top 200 companies.


- that I could get a loan for hundreds of thousands of dollars from the bank without having a regular income other than investment dividends

We were never told this either.  We were told that they would apply to the bank for a loan , they took all our income particulars etc, and we would have to wait and see if it was approved.  This took several weeks.

etc.

I don't know where you and others like you get this information.  Also every advisor may have offered something slightly different, I can only tell you our experience.

I'm not saying for one moment that lies weren't told but the information that you've given in your post is not correct in our case._


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## Judd (15 October 2011)

Harleyquin,

Thank you for providing your experience in this matter.  From my aspect, as I am not and was not involved with Storm, it is difficult, if not impossible, to comprehend the situation.

Maybe some of us are simply fortunate to have a mind set that causes warning bells to ring loudly.  For example, the one and only time I met with a financial planner, he suggested that we get a line of credit against our fully paid off home to invest.  He was told in no uncertain terms that after sweating blood to pay of the mortgage we be damned if we would put it back in the clutches of a bank just to make a few dollars.  Others would see no problem with doing what he suggested.

The whole Storm saga beggars belief.  Other financial planning firms would have corporate loans from financial institutions and I assume a number of the clients would have or had margin loans, yet they did not collapse, so why Storm?  I recall reading in the testimony to the Parliamentary Inquiry, one FP firm advised that during that period, it was receiving data from the CBA and progressively managing its clients margin loans.  I assume other FP firms would have done the same for their clients. Yet apparently overall Storm did Sweet FA.  Why?  I cannot get my head around it.  It doesn't make sense to me.

I can understand why people are now asking if the Storm investment model was so dodgy why didn't the regulators or FP industry do something about it.  However, at the time, and even now, it was not unlawful.  As one person said to me, "We are busy enough with our own clients.  If people wish to go with a high risk strategy like Storm, they were free to choose."  I honestly don't think that attitude will change.

Anyway, thank you again for posting of your experience.

All the best.


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## Garpal Gumnut (15 October 2011)

Harleyquin said:


> I haven't scanned the storm profile gg but I have copied it word for word from our documentation.  I could scan it but it's going to say exactly the same, the only thing is, the original has our signature on it so I prefer not to.
> 
> I know that this documentation doesn't say 'no risk' and I agree I don't think any planner would ever offer no risk but it doesn't say 'we only offer high risk' either does it.  Between the information we gave in our paperwork and the talks we had with our planner they were made very aware of what we were looking for and gave us the assurances that we asked for.  To turn around and ignore what we said we were looking for and to tell us that it was a safe strategy is nothing short of lying in my book.




Thanks Hq,

The reason I asked was that there were misspellings in the quoted " Personal Profile" , and if this were in the original document, and there were others, it may provide you with some legal arguments in your quest for justice. 

Storm had bunnies working as advisors, so they may have had bunnies in the English and spelling proof reading department for documentation as well.

It may have been your transcription. Best of luck for the future.

gg


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## AubreyThompson (15 October 2011)

I have heard few things about storm financial group and what I learned from them is that they are going down, and many families have lost their savings from them.


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## Harleyquin (15 October 2011)

I also think that this discussion is worthwhile.  If we had taken the initial advice it would have been risky enough but the margin loan is the thing that brought storm and their clients undone, at least this is my belief as I try to understand this scenario, and I'm hoping that through this type of discussion that I will learn if I'm right or wrong.

Another FP said 'didn't they explain to you what a margin loan was', no they didn't.   Why didn't we ask them to explain a margin loan.  How do you ask them to explain something that you know nothing about!!!

The 'next steps' for the margin loan was sent out in the mail, there was no discussion about it.  Storm rang up and said 'you have to sign your paperwork and send it in'.  We did as they recommended after a phone discussion, which I'm not going to relay here.  What was our mistake, and we did make them, it was not reading and understanding that paperwork thoroughly.  Our fault.  In hindsight there are things that we could have and should have done to prevent this.  However this is where we made the mistake of trusting these people.  We put our absolute trust and faith in them that they had our financial good will at heart.  How wrong were we.

Also in hindsight, I think that storm should have explained a margin loan thoroughly and also explained the risks.  They didn't.  I don't know if it's illegal not to explain what a margin loan is but ethically and morally I think that it's very important for a client to understand exactly what is it.

I am happy for people who want to mortgage their homes and have huge margin loans if that's what they want and can afford it.  I don't think that they should make it illegal.  What I do think though is 'we the uneducated should not be taken advantage of by planners/ need protecting / or need educating /whatever the answer is' and 'if they are approved by ASIC and FPA then there should be some sort of monitoring or auditing procedure in place to ensure that the planners are doing the right thing by their clients.

I wonder about 'doing our own research', some of these planners are highly educated in their field, we would have no hope against them if they choose to step outside the law.  If they choose to use their education against us they can succeed and that's why I think that the storm scenario will and can occur again.  It seems to be human nature.  Alternatively, if you are lucky enough to get a good one they hopefully will set you on the right path for life.  It's a bit like Russian roulette really.

Someone told us that 'we were just unlucky enough to walk through the wrong door'.  It's about time they closed these wrong doors, surely it's not that hard to do, or is it?

A quick look at the storm operation by an auditor should have been enough to tell him or her that there was a major problem.  I can't understand how the investigators from ASIC missed this when they looked into storm prior to the collapse.  Just a few thoughts on this stormy subject.

I think that it's very important for all of this to go to trial and have the storm and banking people explain to a court of law why they participated in what I am happy to call a ponzi scam.


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## Julia (15 October 2011)

Harleyquin said:


> - _that I could expect returns of 10% per annum[/I
> 
> We weren't told this, in fact, we were told not to expect a return for the first 5 - 7 years._



_
What???  No return for 5 - 7 years, despite paying 7% upfront?  You thought that was acceptable?_


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## Harleyquin (15 October 2011)

We were happy not to get a return while we were working Julia.  We don't and have never lived an elaborate lifestyle and had no need for extra income while we worked.  Is there a problem with this.  I looked at it as 'planning for retirement'.

We knew that we had the fees to cover before any return was forthcoming, and wanted to be comfortable, not super rich, in retirement which was 5 to 7 years away, so yes we were happy with this.  This was a long term plan and our preference on our personal profile stipulated this.

gg I've checked my documentation and can't find any mistakes in what I've written from the PP.  Where do you think the problem is, just in case I've missed it.


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## Garpal Gumnut (15 October 2011)

Harleyquin said:


> gg I've checked my documentation and can't find any mistakes in what I've written from the PP.  Where do you think the problem is, just in case I've missed it.






Harleyquin said:


> There were storm clients who may have made big money during the best years however there were many of us who didn't.  Its interesting that ex storm clients are now going to other advisors asking for a high risk option.  When we went to storm we were given a high risk option, in fact we were given four options to choose from and I've copied that information below.
> 
> The question I ask is 'why were we given these options and then they ignored them as not all of us asked for a risky option.'
> 
> ...





 Hq,

I have put in bold the words which were misspelled. No such words exist in the English language. If these were in fact misspelled in the original document, it could be argued that the document lacked clarity and you were not adequately advised of risk. This would be particularly applicable to para 2 and para 4.

gg


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## Solly (15 October 2011)

Harleyquin said:


> .... I think that it's very important for all of this to go to trial and have the storm and banking people explain to a court of law why they participated in what I am happy to call a ponzi scam.




Harleyquin

This is exactly the opinion of my Stormer mate. I dropped in to see him during the week, do a 'health check' to make sure he was surviving. He too really hopes that this does go to full trial so that there is complete exposure of all the contributory events in this saga. 

He was not a high flyer or had or wanted the trappings and lifestyle of the rich and famous. He told me he just wanted to have a financially secure future, guided by a reputable financial organisation with links to reputable banking partners. I believe that this was also the desire of many of the Stormers who I have observed at the Inquiry and the various hearings.


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## Judd (15 October 2011)

Harleyquin said:


> ...  How do you ask them to explain something that you know nothing about!!!...




By continually asking questions until you do understand.

Issue is that some people don't like to do this as they think it makes them look foolish and uneducated.  Others don't give a rats about what others think and just keep on asking the awkward questions.


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## bunyip (15 October 2011)

Judd said:


> By continually asking questions until you do understand.
> 
> Issue is that some people don't like to do this as they think it makes them look foolish and uneducated.  Others don't give a rats about what others think and just keep on asking the awkward questions.





Harleyquin

Judd is right - if you don't understand something then it's vitally important that you keep asking questions until you do understand.
And equally important that you do your own research to check the veracity of the information you're being given. Particularly when you're in a situation where someone is trying to sell you something - some of these dodgy operators will tell you what they think you want to hear, just to get you to sign on with them.
Doing your own research in regard to margin loans is not as hard as you might imagine....there's a wealth of information freely available on the internet, or simply by talking to stockbrokers, bankers, accountants etc.
You’ll see what I mean if you go to Google and type in ‘margin loans’...... or ‘risks of margin loans’

As for paying 7% upfront fees for a strategy that expected no returns for 5 - 7 years - like Julia, I too am gob smacked by this.
They must have been strongly hinting that you'd get astronomical returns after the first five to seven years to compensate for having your money tied up for so long without earning a dime.

Simple research into the stock market would have showed you that the market had been strongly bullish since the end of the Gulf war in 2003. Stock market charts are freely available on the internet.

A bit of simple delving into market trends would have given you a pretty fair idea of how long bull markets tend to last before the next bear market sets in. 
Assuming that you signed on with Storm when the bull market had been in progress for two or three years or more, their strategy would have assumed that the bull market would run for a total of more than 10 years, otherwise you’d have no hope of making money, not even after the initial 5 – 7 years of zero returns.
To assume that a bull market would last more than 10 years is outlandishly optimistic. It’s possible, but highly unlikely.
A bit of simple research into market trends would have provided you with this information.

No matter how convincing and knowledgeable your financial adviser sounds, you absolutely *MUST* do your own research to check the veracity of the information they’re giving you - otherwise  you’re probably safer sticking to conservative investments such as term deposits.


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## Julia (15 October 2011)

Judd said:


> By continually asking questions until you do understand.
> 
> Issue is that some people don't like to do this as they think it makes them look foolish and uneducated.  Others don't give a rats about what others think and just keep on asking the awkward questions.



 There are many excellent posts on this thread, but for containing the absolute essence of what matters, this is the best.

As Donald Rumsfeld so famously said:  "We don't know what we don't know".
So you need to keep asking until you are sure you know every detail of what is being suggested to you.

Harleyquin, even if you were still working, it just blows me away that you would be happy to have a very considerable amount of money earning nothing at all for five to seven years!  Just sticking it in a bank account would have been an improvement, would have been safe and would not have cost you a 7% entry fee.


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## Harleyquin (15 October 2011)

Thanks gg I didn't pick up on those.   Judd and Bunyip I agree with you re the questioning and we did ask lots of questions, I'm far from perfect as you can see by missing those spelling errors and missed the margin loan issue altogether and to this day we don't know how or why we missed it, though I have my suspicions.  

I had no problem with not receiving any income from our storm investment for a couple of years until retirement, none at all.  The idea was that the investment was supposed to grow with the help of the storm people who knew what they were doing,,,,supposedly.   Then when the time came to retire we would have an investment which we could then live off.  Perfect wasn't it....not!!!

Having read every post on this thread, and some more than once, I've gleaned a lot of information that I didn't know before, and also I was an extremely trusting person.  Not so these days, today I question everything.  I come from a generation that were trustworthy and trusting, that has now been destroyed.  So if this debacle has taught most of us anything it's DON'T TRUST ANYONE and I don't.  I think that you'll find almost without exception that this now applies to all those affected by this mess.

Anyway what's done is done, we've learnt a very expensive lesson, and our trust in anything financial has been blown well and truly out of the water.  Burnt and learnt!!!


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## Solly (16 October 2011)

> *"Storm mansion up for auction*
> 
> THE ostentatious mansion of Storm Financial founders Emmanuel and Julie Cassimatis will go under the hammer next month."




More by Jessica Johnston @ www.townsvillebulletin.com.au


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## Judd (16 October 2011)

In my opinion, there is only one word for it - Gauche


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## DocK (16 October 2011)

Nice timber floors and decent kitchen & pool(s)  - stripped of the garish & OTT window treatments and most of the furniture, and with a repaint over the "feature walls", it would suffice as a weekender I suppose :  Of course, I'd need the jet as well to fly me there and back at my whim........


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## Harleyquin (16 October 2011)

Unbelievable what this couple got up to behind closed doors.  They want to sell the new Brisbane one as well.  Where do the proceeds of the sale go to I wonder.  Gauche  yep I'll agree with you on that one Judd


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## DocK (16 October 2011)

Harleyquin said:


> Unbelievable what this couple got up to behind closed doors.  They want to sell the new Brisbane one as well.  Where do the proceeds of the sale go to I wonder.  Gauche  yep I'll agree with you on that one Judd




They owe the CBA and various other creditors so much that I daresay all proceeds _should_ be directed towards repaying their debts - unless they've escaped giving any personal guarantees (as directors) for any of Storm's many debts.  Hard to believe they should be able to pocket any of the proceeds - but I wouldn't be at all surprised with that pair if that should prove to be the case.


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## bunyip (16 October 2011)

Judd said:


> In my opinion, there is only one word for it - Gauche




And hideously ugly on the outside - but then so many mansions are.


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## Garpal Gumnut (16 October 2011)

Solly said:


> "Storm mansion up for auction
> 
> THE ostentatious mansion of Storm Financial founders Emmanuel and Julie Cassimatis will go under the hammer next month."
> 
> More by Jessica Johnston @ www.townsvillebulletin.com.au




I reckon they will be lucky to get more than $1.4m for it, the market for high end property is woeful atm in Townsville, and it is, how shall I say it, a bit too Mediterranean for many people's taste.

I would be willing to tip in $140 dollars if I could find 9999 other punters, to bid on it.

We could set up a trust, and use it as a headquarters to warn investors about scams, ponzis, margin loans, muppet advisors, and schemes.

We could call it Storm Warning.

gg


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## Solly (16 October 2011)

Garpal Gumnut said:


> I reckon they will be lucky to get more than $1.4m for it, the market for high end property is woeful atm in Townsville, and it is, how shall I say it, a bit too Mediterranean for many people's taste.
> 
> I would be willing to tip in $140 dollars if I could find 9999 other punters, to bid on it.
> 
> ...




GG

I didn't realise the high end market was so depressed up there. Looks like it may be a bargain, if the vendors accept the current market valuation.

There's a few high flyers down here that have been burnt along the foreshores at Mermaid and Nobbys. There's been a few tears around The Cove as well. 

I'm still chuckling over your above post, "bit too Mediterranean" was what cracked me up.

Mate, I hope all is going well in your neck of the woods.

S


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## bunyip (17 October 2011)

Harleyquin

A couple of questions......

First question...As a point of interest, when did you sign on with Storm?


Second question...How did you come up with the name Harleyquin? 
It’s an unusual name for a woman, even for a cyber nickname -  quite a few of us thought you were a bloke when you first came on here!

No pressure to answer - I'm just curious.


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## Smiley (17 October 2011)

Harleyquin said:


> Unbelievable what this couple got up to behind closed doors.  They want to sell the new Brisbane one as well.  Where do the proceeds of the sale go to I wonder.  Gauche  yep I'll agree with you on that one Judd




Brisbane mansion in Belmont already sold for about $3 million - source has it that it was in the mother-in-law's name.   
Claims they can't even pay $20 thou FPA fine so how will they go with 5 breaches of the Corporation Act each - at $200 thou a breach, if/when ASIC wins. . . . 
I think money is not really a problem however, and am sure ASIC is chasing the paper trail of their financial investements.  
2008 article put Cassimatis as amongst Qld's richest at $450 million - before Parliamentary Inquiry he claimed he had lost 90% of wealth - that still leaves quite a bit of money to pay fines and live the 'good life'.


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## Frank Ainslie (17 October 2011)

bunyip said:


> No risk at all?
> 
> None of those four options offers ‘no risk’ – not even No. 4
> 
> ...




Hi Harleyquin and others!

Like most people caught up in Storm I'm tired so I do not want to expend what energy I have left endlessly justifying our position to people that haven’t been there themselves and therefore haven’t shared our experience.

 I say to all those that were caught up in the Storm debacle, _“Let others believe what they want if it makes them feel any better!”_. It’s too easy to take the wrong things to heart, especially from those that have misplaced their own. As Rhett Butler said in GWTW, _"Frankly my Dear, I don't give a damn."_ And nor should you! 

If you, my friends want to escape for a while from your troubles, I invite you to join me on a journey where good and evil are clearly defined – unlike that which has befallen us these last 3 years: https://sites.google.com/site/thethirdsecret/

For those that have judged us, I have only this to say and it will be my final word on this subject:

_Matthew 7:1 Judge not, that ye be not judged. For with what judgment ye judge, ye shall be judged: and with what measure ye mete, it shall be measured to you again. And why beholdest thou the mote that is in thy brother's eye, but considerest not the beam that is in thine own eye? Or how wilt thou say to thy brother, Let me pull out the mote out of thine eye; and, behold, a beam is in thine own eye?
Thou hypocrite, first cast out the beam out of thine own eye; and then shalt thou see clearly to cast out the mote out of thy brother's eye._


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## Harleyquin (17 October 2011)

Hi Bunyip  I'm happy to answer your questions.  We signed with storm in 2007.  As for the name Harleyquin we have a friend with a Harley motorbike and I like the name, so when I was looking for an avatar Harley it was and I didn't even think too hard about it Harleyquin just came to mind.  The mask behind the person if you will.  Sorry to confuse you but I'm very feminine...a real girl as my son would say....I come from a family of males and used to arguing with them so this forum brings out the argumentive side of me.  Quite frankly I enjoy it.  Cheers


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## bunyip (17 October 2011)

Harleyquin said:


> Hi Bunyip  I'm happy to answer your questions.  We signed with storm in 2007.  As for the name Harleyquin we have a friend with a Harley motorbike and I like the name, so when I was looking for an avatar Harley it was and I didn't even think too hard about it Harleyquin just came to mind.  The mask behind the person if you will.  Sorry to confuse you but I'm very feminine...a real girl as my son would say....I come from a family of males and used to arguing with them so this forum brings out the argumentive side of me.  Quite frankly I enjoy it.  Cheers




Hi Harleyquin

Thanks for your answers – it can be quite interesting to learn how or why forum members chose their nicknames.
I chose ‘Bunyip’ because of my interest in aboriginal mythology and stories of the dreamtime. Bunyips feature in some of these stories as the man-eating creatures that lived at the bottom of waterholes and devoured anyone foolish enough to swim after dark.
Ion Idriess wrote some fascinating stories about his experiences travelling by horseback among the wild and remote aboriginal tribes of northern Australia during the early 1900’s.
One night he and his travelling companion were camped with a group of aborigines about half a mile from a waterhole. No way would the aborigines camp beside the waterhole because of their fear of the bunyip that lived there.
During the night there was a weird moaning, grating sound coming from the direction of the waterhole. The aborigines huddled together in terror, rolled their eyes and whispered ‘bunyip’ over and over again.
Next day the two white men and the aborigines were at the waterhole hunting and gathering bush tucker. The branches of two trees near the waters edge were rubbing together as the trees swayed in the wind, creating the moaning, grating sound of the previous night.
The aborigines took no notice. By day it was just two branches rubbing together that made the noise. By night it was the dreaded bunyip.
The women and kids were swimming in the waterhole, gathering water lily bulbs and catching fish and turtles. Idriess asked them why they weren’t scared of the bunyip. They explained that the bunyip slept all day at the bottom of the waterhole, and only woke up after dark to eat anyone who made the mistake of venturing into the water.

So what has this story got to do with Storm Financial? Well nothing, and I admit to being completely off topic. It’s just that we do tend to get a little intense in here at times, so I thought I’d toss this story in to lighten the mood a little.

OK - back on topic to Storm Financial. My question about when you singed up with Storm was because I’m still rather intrigued that their strategy projected zero return for the first 5 to 7 years. I accept your explanation of why that was acceptable to you. 
But I would have thougt that they'd be projecting positive returns from your investment practically right from the outset, given that there was a bull market in progress at the time.


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## bunyip (18 October 2011)

Frank Ainslie said:


> Hi Harleyquin and others!
> 
> Like most people caught up in Storm I'm tired so I do not want to expend what energy I have left endlessly justifying our position to people that haven’t been there themselves and therefore haven’t shared our experience.




Frank – I understand  that all this Storm business has been emotionally exhausting for you, and that you wish to conserve your energy for the battle ahead rather than expend it on endless discussion on this forum. 
In your situation I’d feel the same way.

I haven’t agreed with all your opinons but I respect your right to voice them.  I hope you equally  respect my right to disagree with some of them.

Below in bold print are three opinions that you expressed in some of your earlier posts. Under each one is my response in italics.

*1. Some have called us ‘gullible’ for going to Storm for financial advice.*
_The reason we think you’re gullible is not because you sought advice from a Financial Planner, but rather, because you accepted that advice at face value without thoroughly checking into it to look for any pitfalls.
_
2.* We are not ashamed of what has occurred because it was not our fault in any way. *
_You accepted Storm’s advice at face value, you failed to adequately research that advice, consequently you believed their claim that it was a safe and conservative strategy, when in fact it was aggressive and highly risky. 
You should accept your share of the fault in getting duped by Storm._

*3. We were sold a financial plan that we had no way of knowing was flawed.*
_Of course you had a way of knowing it was flawed - it’s called ‘research’.
When you bought or developed your shopping center you would have conducted meticulous research to uncover anything and everything that could affect the success of your enterprise. 
You could have used  those same research skills to thoroughly check out Storm’s plan. Had you done so, I believe you’d have uncovered serious flaws that would have warned you to steer clear._

Frank, I’m not looking for any response to this post, unless you want to give it. Save your energy for your coming battle with the banks. If you can prove any illegality on their part that contributed to your losses, then I hope they’re ordered to make an appropriate level of restitution.

I wish you all the best.


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## Solly (18 October 2011)

Bunyip

I too have asked why my Stormer mate agreed to the strategy that was presented. After the collapse, when eventually the Storm methodology of borrowing and gearing was fully shown to me, I was horrified. I remember thinking why would anybody agree to such a high risk approach, riding up a Bull market. 

I possesses a rather forceful, no nonsense, very direct disposition and I remember saying to my mate how in the world could he have agreed to such a deadly high risk strategy. It wasn't probably the most comforting thing to say to a life long friend who had no job, an ill missus and appeared to soon be living on the street out of a VN Commodore. His answer was quite simple. He told me that his adviser had told him that Storm had all the mechanisms in place to monitor his investments and the market and that there would need to be a complete world financial collapse for him to lose his home. If this did happen then everybody would be in the same boat. 

He comes from a background where trust and a person's handshake and word means everything. I believe he trusted Storm implicitly to do the right thing by him with his life's savings. He was just looking for a better life for himself and his family and the dream that Storm sold him he truly believed in. I now know the complete financials of what he invested and what he was hoping to live on in retirement and what I would call a meager drawdown from the strategy. 

I have been around many of the Stormers since this collapse happened, especially at Inquiry and the various hearings and one thing I have observed is that they are from a very varied background. Ranging levels of age, life experience and education. I still don't know what the common denominator is in why they all chose Storm but I now fully understand that the methods used to sell the strategy were very persuasive. I suppose all of us on this forum are looking for a manner and method to secure us financially, I believe the Storm concept was that nirvāna for many. 

S


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## Frank Ainslie (18 October 2011)

bunyip said:


> Frank – I understand  that all this Storm business has been emotionally exhausting for you, and that you wish to conserve your energy for the battle ahead rather than expend it on endless discussion on this forum.
> In your situation I’d feel the same way.
> 
> I haven’t agreed with all your opinons but I respect your right to voice them.  I hope you equally  respect my right to disagree with some of them.
> ...




Hi Bunyip,

_The reason we think you’re gullible is not because you sought advice from a Financial Planner, but rather, because you accepted that advice at face value without thoroughly checking into it to look for any pitfalls.
_

Storm didn't tell us at the time that their software systems could not monitor our portfolios and warn us if the "trigger-points" had been reached. Storm didn't tell us that they had secret agreements with the Banks that increased our margin loan ratios, Storm didn't tell us that they and the banks had an agreement that margin calls would not be made on us, Storm didn't tell us that our our money was invested in shares that took at least 10 days to sell-down. It didn't matter anyway because the Banks never made margin calls to us full-stop. Even with Storm's over-leveraging policy, we could still have saved some of our money if we had BEEN TOLD IN TIME!

How then could we find the pitfalls if they were hidden from us?

_You accepted Storm’s advice at face value, you failed to adequately research that advice, consequently you believed their claim that it was a safe and conservative strategy, when in fact it was aggressive and highly risky. 
You should accept your share of the fault in getting duped by Storm._

When people steal from you, should one blame the victim or the thief. If the victim is defenceless (75% elderly) does that mitigate the crime? If the victim walks down a certain unsavoury street in town totally unaware of the dangers of doing so, does that excuse  the person that seizes on that opportunity to rob him or her? Yet, it seems that everyone want to blame the victims in this case rather than the thieves. Perhaps it's just a sad commentary on the world we live in today or has its perhaps always been this way?

Should we accept out share of the blame because Storm hit us over the head and took our money? No! We accept no blame whatsoever! The perpetrators are Storm and the Banks that dealt with that company. Our state of mind at the time has nothing to do with it!

_Of course you had a way of knowing it was flawed - it’s called ‘research’.
When you bought or developed your shopping center you would have conducted meticulous research to uncover anything and everything that could affect the success of your enterprise. 
You could have used  those same research skills to thoroughly check out Storm’s plan. Had you done so, I believe you’d have uncovered serious flaws that would have warned you to steer clear._

Why should we have any reason to suspect that Storm's financial plan  was anything but what it claimed to be? ASIC, the FPA, the Financial Sector, the Banks involved (some of the biggest in the country), Storm's insurers, and Uncle Tom Cobbly found nothing wrong with it! How do you expect unsophisticated investors to do so! Storm had 13,500 clients. It was also one of the biggest financial advisory companies in Australia. Therefore, we, the people that invested in Storm had no reason to suspect them of anything. No one else did at the time although they are all now crying, _"I told you so"._ 

The Storm plan sold to us at the time was not the plan Storm adopted! That's the whole crux of our argument today! Before you condemn the people that invested in Storm as gulllible and greedy, examine the roles of ASIC, this Government,  and the Banks involved. How greedy and gullible were they? 

We, ordinary Australians, shouldn't have to live in a society where people can run off with one's money and get away with it. That's Nazi Germany before the Second World War. As I've said, we don't expect everyone to understand. We come from a different generation where people could be trusted a lot more. Today, it's dog eat dog! Well, we've had enough! We are going to do some biting now! If we lose, so be it but it's time people stood up against these rogues. That's exactly what we intend to do.


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## doobsy (18 October 2011)

Hey Frank. To be honest that is your best post. I will jump in an comment hopefully to further extend some of the understanding.

In the defense of the planners of Far North Queensland, the first reports to the FPA and ASIC that we felt there were massive issues with the Storm strategies were lodged in 2005. As Storm was ultra compliant (getting clients to sign every page of SOAs etc) and through the good times when markets were on the way up no Storm client was complaining it was very hard to get anywhere on this. We all saw Storm plans from time to time for second opinion work etc but as mentioned previously it was very hard to counteract as we couldn't promise the same "returns" and the sales process was sooooooo slick. It used to make me laugh that it took almost 100 pages to get anywhere near the acual advice and another 50 pages to find the fees. So much for "clear and concise" advice documents.

I for one am all for Storm clients receiving some level of compensation. I feel that the blame is 95% Storm and 5% banks and that has been skewed over the last 3 years. This was completely and only the brainchild of Cassimatis, no one else. This was obvious through the way he was the only one allowed to take credit for it during the good times and the obsession that all advice be written up at the head office. The other offices were merely data collection and sales centres.

My exception to the compensation comment above are the following:

1. Clients who had the asset base or income to service the loans. In this case there has been no rogue lending occur and the margin calls were the advisers responsibility.

2. Clients who were retired and had been on the syatem for 3+ years. They lived beyond their means on borrowed money (Greece anyone? Is that ironic or WHAT?) and any compensation should be offset by the fact most were drawing incomes twice what they should have for their asset base and claiming tax deductions etc etc.

As for the warnings, they were out there but they were few and far between. My ex boss was writing in the local press telling everyone with a margin loan to review it and ensure it could handle significant drops in 2006/07. He was virtually ostracised from the industry for daring to fill the minds of clients and potential clients with any doubts about markets. He was also amongst the first to talk locally about the potential issues subprime presented.

There are those of us who have always felt that margin loans add no long term value to a client but do increase the volatility of a portfolio. This unfortunately is not very sexy when it comes to comparing to those who use "past" returns to project the future.

As I mentioned and I would encourage any reader of this forum to consider, your planner should be adding value through strategy and technical expertise. They should be about ensuing your asset base is protected at all times. If the only thing they bring to the table is "promised" returns then I think the next 10 year will see some very disappointed clients and I would be already seeking out a second opinion.


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## Solly (18 October 2011)

How is this for a scenario.... ?

All this happened under Sir Ralph's & Big Dave's reign. The Kings are now gone. 

There now are new regimes taking over, putting a new caring vision in place.

Let's talk compromise before the indiscretions of the past erupt in full view in the public arena. 

Just a thought.


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## sailteam30 (19 October 2011)

"95% Storm, 5% Banks"

If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because

 "several houses have been sold recently in your area so we can lend you $140K"

this happened without me stepping into a bank to produce/sign any paperwork and the bank had not laid eyes on my house (it may have been a tin shed for all they knew) - I would tend to reconsider those percentages


----------



## Judd (19 October 2011)

sailteam30 said:


> "95% Storm, 5% Banks"
> 
> If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because
> 
> ...




And this is what I cannot understand no matter how hard I try.  Why not simply reject the loan offer?  Just because a bank says that will lend that amount of money you're not forced at gunpoint to take it up.  You surely agreed to take it up even though you didn't have to.

This is what my mindset is unable to comprehend.


----------



## doobsy (19 October 2011)

sailteam30 said:


> "95% Storm, 5% Banks"
> 
> If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because
> 
> ...




I don't see a need to re-consider anything. If you read other posts you will see that I have clearly outlined the case for retirees with no income sources to have the debts forgiven.

The banks didn't knock on the Storm doors saying "have we got a product for you". Cassimatis dreamt up a way he could tip every client upside down, shake them as hard as he could for every last cent of available cash and equity and then via "creative disclosure" borrow against that sum. He then dreamt up a way to convince people they were better off paying him upfront for the priviledge.

I am not arguing that the banks had no knowledge (we ALL know they did) but this was a strategy put together by storm using lending products that were legal and available on the market. If you honestly had "nil" income then whoever completed the loan docs disclosing otherwise is who you should be after not the bank for processing them. The fact of the matter is that using equity in the home OR using a margin loan are both legal strategies, using them together is a strategy that Cassimatis knew would provide the largest fee base from each client.

Goodness knows how many tens of thousands of people around Australia have margin loans. None of them needed to provide details of where the equity came from either, that was the way they were structured and why they have always been risky. It is not the job of the bank to tell you this, although they do in their disclosures. Those loans only care about the equity protecting the loan. If the equity came from tapping into the family home then the margin lender isn't to know, the people who know are the guys recommending it. 

Storm 95%

By the way, if a house is worth $400K and I go to a bank and ask for $140K and show that I WILL have income (supposedly through investment dividends etc), then why is that illegal? Plenty of people draw back down on their home loans, some to go on holidays which wastes money - do they get to have their debt forgiven?, some to do renovations which might not add any value - do they get to have their debt forgiven?, some to go to the Casino because Tony Windsor wasn't quick enough - do they get to have their debts forgiven? Some people drew down money assuming the stock market would never drop more than 30% (where the protection levels promised started to unwind) - yet they expect everyone to give the money back. If markets had only had a 15% hiccup and went on to new highs would the same people be saying "No no, we don't deserve all this upside because you probably should never have lent to me in the first place" I doubt it, they would be telling their best friends to get in their too.

NOBODY at the bank recommended this. Storm recommended this!!!!! People need to remember where the advice came from.


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## banco (19 October 2011)

It seems to me that (particuarly with an aging population) we need to have either  a robust "buyer beware" policy in relation to investment products or heavily restrict the kinds of investments that retail investors can enter into.


----------



## McLovin (19 October 2011)

bunyip said:


> _You accepted Storm’s advice at face value, you failed to adequately research that advice, consequently you believed their claim that it was a safe and conservative strategy, when in fact it was aggressive and highly risky.
> You should accept your share of the fault in getting duped by Storm._




I agree. There's too much buck passing. It's your money, not the banks' and not your financial planner's.


----------



## Julia (19 October 2011)

Judd said:


> And this is what I cannot understand no matter how hard I try.  Why not simply reject the loan offer?  Just because a bank says that will lend that amount of money you're not forced at gunpoint to take it up.  You surely agreed to take it up even though you didn't have to.
> 
> This is what my mindset is unable to comprehend.



+1.


----------



## basilio (19 October 2011)

> And this is what I cannot understand no matter how hard I try. Why not simply reject the loan offer? Just because a bank says that will lend that amount of money you're not forced at gunpoint to take it up. You surely agreed to take it up even though you didn't have to.
> 
> This is what my mindset is unable to comprehend.




I think that *obviously* people should have their wits about them when financial advisors are trying to get them to take up their offers. They should be checking the figures that are presented, reading the contacts documents carefully, perhaps investigating the integrity of the companies behind the deal..

That's what every sensible person does don't they ?  

Not really. A financial planner is a salesman selling a product that will make him and his boss a lot of money. From my experience and I suspect most others the pitch is always very confident, the documents are deliberately indecipherable and there is almost no way to actually check the credentials of the companies.

*And we were in long boom with no apparent end in sight.* In those circumstances I could see many people being vulnerable to a story that promised to produce a truly magnificent retirement package. And after all the bank was supporting the deal ? And the share market and property market was going gang busters ?

In my view it was calculated con job. I suggest the industry itself could bear some blame for not having the strength to call the practices  to account. But then I suspect most planners were guilty of the behavior in some form and at some level.

I really feel for all the people who have been devastated by this scam and the collapse of many other investment schemes.


----------



## bunyip (19 October 2011)

Frank Ainslie said:


> Hi Bunyip,
> 
> 
> Should we accept out share of the blame because Storm hit us over the head and took our money? No! We accept no blame whatsoever! The perpetrators are Storm and the Banks that dealt with that company. Our state of mind at the time has nothing to do with it!




Frank

I can see that no matter what anyone says to you, you’ll persist with your attitude that ‘Stormers bear no responsibility for what happened – it’s all the fault of someone else’.
OK then, if that’s what you choose to believe, no problem – it’s makes no difference to me.

Incidentally, I wonder who you’re referring to when you say_ ‘we’_ accept no blame whatsoever’. 
If you’re referring to your wife and yourself, then OK. But if you’re referring to Stormers generally, then I think you may be out of touch. There have been a number of Stormers who have openly admitted on this thread that they were gullible and naÃ¯ve and they should have checked things out more thoroughly before signing with Storm.
Last year at a school reunion I was talking to a Storm victim. One of the things he said to me was _“Looking back on the Storm debacle, I can see that I should have looked into it much more closely. I still don’t know how I could have been so downright f*****g stupid.”_

When my wife and I were raising our kids we drummed into them over and over again the importance of doing their own thinking rather than letting others think for them. We hoped this advice would help them to resist peer group pressure in their teen years, and help them to make the right decisions in adult life.
Now that they’re responsible young adults in their early twenties, we still stress the importance of doing their own thinking.

And so Frank, in relation to the Storm debacle I’ll leave you with this thought ........
*You wouldn’t be in your current predicament if you’d put sufficient effort into thinking for yourself instead of relying on others to do your thinking for you.*


----------



## Solly (19 October 2011)

I'm very interested to hear from the Stormers about what preceptions they held about the monitoring systems and software that was tracking their portfolios.

Did they feel confident that this was being done or was it not a concern?


----------



## DocK (19 October 2011)

Solly said:


> I'm very interested to hear from the Stormers about what preceptions they held about the monitoring systems and software that was tracking their portfolios.
> 
> Did they feel confident that this was being done or was it not a concern?




Hi Solly,

Speaking only for myself, my adviser always assured us that our investments were being closely monitored and all necessary safeguards were in place to ensure that we would never be in any danger of losing our home.  He was quite keen to brag about their state-of-the-art software (what a joke that turned out to be) and all the levels of protection that were in place.  When things started to go pear-shaped and I was unable to get in contact with anyone from Storm, I dealt with Challenger and Macquarie directly to have our managed funds withdrawn and margin loan cleared, with our remaining capital (decimated though it was) paid to me directly.  As I am probably younger (late 40's) than the average Storm client, and had access to the various websites etc required, I was able to do this.  I'm guessing quite a few older/less computer literate clients either did not know how to go about this or didn't have a clue they even could deal directly with Challenger/Colonial.  I really feel for those clients who wound up in negative equity on their margin loans because they either were not able to monitor their situations themselves or trusted their advisers to be doing it for them.  I'm aware that quite a few thought they had "gone to cash" several weeks before receiving a margin call, as they had signed instructions to that end.


----------



## Solly (19 October 2011)

DocK said:


> Hi Solly,
> 
> Speaking only for myself, my adviser always assured us that our investments were being closely monitored and all necessary safeguards were in place to ensure that we would never be in any danger of losing our home.  He was quite keen to brag about their state-of-the-art software (what a joke that turned out to be) and all the levels of protection that were in place.  When things started to go pear-shaped and I was unable to get in contact with anyone from Storm, I dealt with Challenger and Macquarie directly to have our managed funds withdrawn and margin loan cleared, with our remaining capital (decimated though it was) paid to me directly.  As I am probably younger (late 40's) than the average Storm client, and had access to the various websites etc required, I was able to do this.  I'm guessing quite a few older/less computer literate clients either did not know how to go about this or didn't have a clue they even could deal directly with Challenger/Colonial.  I really feel for those clients who wound up in negative equity on their margin loans because they either were not able to monitor their situations themselves or trusted their advisers to be doing it for them.  I'm aware that quite a few thought they had "gone to cash" several weeks before receiving a margin call, as they had signed instructions to that end.




Thanks DocK, 

That monitoring scenario is very similar to what has been relayed to me by my Stormer mate. 

It makes me wonder whether there has been any breach of Section 178BA of the Crimes Act, the Federal Law regarding obtaining benefit by deception.

S


----------



## bunyip (19 October 2011)

Some Stormers have stated that one of the reasons they accepted Storms financial plan was that Storm was ASIC approved.

Frankly I doubt if ASIC could spot an elephant in a pumpkin patch – they’re well known to have a poor track record over many years when it comes to spotting dodgy investment schemes and shutting them down.
The incompetence of ASIC was widely reported in the media long before Storm Financial started making the headlines.

Learning that ASIC approved a financial advisory company would not have been reason enough to have any faith that company, in my opinion.


----------



## doobsy (19 October 2011)

More comments from the darkside

If someone approached the banks with a business plan to draw equity from their home to provide capital for say a coffee shop and were lent the money then the coffee shop fell on tough times and the business went under, should the person have to pay back that debt or was it the obligation of the bank to know that he wasn't very good at managing his money and had assumed the business would grow? Was it the banks fault the customers didn't come as expected? Or should he harden up, and start paying off the debt again?

Also on the "selling" by fin planners. If you step on a car lot expect to be sold a car. Providing advice is how planners make money. You wouldn't take everything a car salesman said at face value without a bit of research on the model, the financing etc.


----------



## Frank Ainslie (19 October 2011)

bunyip said:


> Frank
> 
> I can see that no matter what anyone says to you, you’ll persist with your attitude that ‘Stormers bear no responsibility for what happened – it’s all the fault of someone else’.
> OK then, if that’s what you choose to believe, no problem – it’s makes no difference to me.
> ...




Hi Bunnyip (Part 1)

Last year I served on a jury in the Supreme Court. At that time, I was amazed at the prejudices other jurors brought with them. “The accused’ relatives look sus to me! He is Croatian and we know they can’t be trusted!” and other such nonsense. Someone even said they had to go to a function on a certain day and wanted us to finish a day or two early for that reason. And so on and so on! They didn’t consider the evidence but rather let their prejudices get in the way of the evidence. They also let their prejudices get in the way of the truth!

This forum is a little like that! No one so far has tried to establish the facts, but rather they have focussed on the unimportant things. For instance, our reasons for being in Storm, our motivation for doing so, our gullibility, our naivety and so forth. Why we went to Storm is our business! What happened to us as a result and the reasons why we lost our money when Storm collapsed should really be the  focus of attention in this debate. Instead you all want to adopt a superior attitude. You cannot explain away what happened by being glib, ignoring the facts or remaining ignorant of the issues. So far, many of you have chosen to do just that.

At times, some of the postings I have read here have me wondering if we have a few bankers among us who are trying to disseminate misinformation. 

Some of the comments are so way off the mark that they defy belief. 

It is not about us, the victims, but rather about the Banks involved with Storm and their wrongdoings. Until you can comprehend this fact and stop trying to analyse our motivations for being in Storm, you will never grasp the fundamentals or the issues that are paramount.

Some of you have rendered your verdict based on preconceived notions. You have assumed that the Banks have acted within the law and these loans were extended on purely commercial grounds, and in accordance with normal banking practice and principles contained in Banking Codes. In assuming such a position you are choosing to ignore what really happened. Your remarks are therefore uninformed.

Let commonsense prevail if nothing else. Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time? 

When people accept that the Banks have a case to answer, a sensible debate can then ensue. Bear in mind that ASIC started litigation proceedings against these Banks after conducting one of the most exacting investigations in its history which has cost millions. ASIC has gathered literally millions of documents on its central data-base to draw on. If there isn’t a case to answer, why does ASIC believe otherwise?? ASIC has spent millions to bring these Banks to account? Do you know something that ASIC doesn’t?

If ASIC believes it has a case, it should be good enough for you? What evidence have you really considered when you think about it? What facts have you acquainted yourself with? What insider knowledge do you possess that makes your opinions more valid than ASIC’s or our lawyers for that matter.  (See Part 2)


----------



## Julia (19 October 2011)

Frank Ainslie said:


> Let commonsense prevail if nothing else. Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time?
> 
> When people accept that the Banks have a case to answer, a sensible debate can then ensue. Bear in mind that ASIC started litigation proceedings against these Banks after conducting one of the most exacting investigations in its history which has cost millions. ASIC has gathered literally millions of documents on its central data-base to draw on. If there isn’t a case to answer, why does ASIC believe otherwise?? ASIC has spent millions to bring these Banks to account? Do you know something that ASIC doesn’t?
> 
> If ASIC believes it has a case, it should be good enough for you? What evidence have you really considered when you think about it? What facts have you acquainted yourself with? What insider knowledge do you possess that makes your opinions more valid than ASIC’s or our lawyers for that matter.  (See Part 2)



Maybe consider the number of cases into which ASIC has poured resources and taken to court, and lost.
If I were you, I wouldn't be betting my soul on the competence or judgment of ASIC.


----------



## Solly (19 October 2011)

doobsy said:


> More comments from the darkside
> 
> If someone approached the banks with a business plan to draw equity from their home to provide capital for say a coffee shop and were lent the money then the coffee shop fell on tough times and the business went under, should the person have to pay back that debt or was it the obligation of the bank to know that he wasn't very good at managing his money and had assumed the business would grow? Was it the banks fault the customers didn't come as expected? Or should he harden up, and start paying off the debt again?
> 
> Also on the "selling" by fin planners. If you step on a car lot expect to be sold a car. Providing advice is how planners make money. You wouldn't take everything a car salesman said at face value without a bit of research on the model, the financing etc.




Re point 1, I believe that it may depend on whose _advice_ the decision to buy was based.

Re point 2, you may not take all that was said on face value but it is reasonable to expect that there is implied statutory protection in place. Maybe it is comforting that there are consumer protection provisions in Part V and VC of the Trade Practices Act and that there are remedies available for breaches.


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## bunyip (19 October 2011)

Frank Ainslie said:


> Hi Bunnyip
> 
> 
> Let commonsense prevail if nothing else. Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time?
> ...




Frank

I say to you – again - that I’m not in the camp that automatically assumes the banks are without guilt. Frankly I don’t know whether they're guilty of anything illegal -  I’ll let the courts decide on that. What I do know for sure though is that the banks alone are not _*entirely*_ responsible for what happened. The fault lies with a number of parties including Storm clients, and particularly with Storm Financial itself.

My comments have been primarily about the fact that the guilt or innocence of the banks would not be an issue to you if you’d properly done your homework by thoroughly investigating the strategy that Storm offered you. If you’d done that, then you would have avoided Storm like the plague, and you’d now be watching all this from the sidelines like I and many others are doing, instead of being embroiled in it yourself.


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## Harleyquin (19 October 2011)

Solly your 'stormer mate' who you refer to in post 5576 took the words right out of my mouth.

As for all the other arguments regarding the 'why did you or why didn't you'  I can certainly understand now.  Prior to this I trusted because I didn't understand.  I also thought we could trust what they were saying, when a planner told me this or that was going to happen I believed.  Our biggest mistake to date has been to place our trust in those whom we thought that we could trust.  It's a huge huge shock to discover otherwise.  Now when I read your posts I understand that many of you have been 'taken for a ride' at some point and you no longer trust.  Now there's a few thousand others , called ex stormies , who are now part of your 'group of disbelievers for want of a better word.

Doobsy I've been told by a legal person that what you're saying is in fact incorrect.  Whoever filled out the banks documents have to legally supply paperwork to back up all claims and the banks have to legally ask for that documentation.  If anyone else knows if this is right or wrong let me know.  I would assume that storm filled out the paperwork.

As for why we went to storm, we went because we didn't trust anyone with our money and a family member said they'd been with them for some time and recommended them.  We asked around too and everyone who was with them said how good they were.  They certainly seemed professional enough to us.  Not one person mentioned that they only had a high risk strategy and the advisors certainly didn't mention it.  Is that our fault.  Some of you will say so and that's fine that's your call.

Sail...30 do I totally agree or what.  Storm Financial was indeed the corner store and the banks elevated them to Myer status so obviously it was in the banks best financial interest to do so.  The shareholders no doubt would be happy,  the banks have been just a huge money making machine for themselves and their shareholders and I don't see that changing anytime soon.

Bunyip loved your off topic subject I'm very interested in aboriginal mythology.  I love Ion Idriess and reckon he should be on top of everyone's to read list.  I have an old drover friend who lends me his considerable collection of Ion Idriess books and have been slowly making my way through them all.  Recommended reading to anyone interested in the early years of Australia.  Have you read the one based on his experiences during World War 1 and his time at Gallipoli in the trenches and his experiences in Egypt as he was a light horseman.  Highly recommend it to anyone interested in how these men survived, can't remember the title of it, but you wonder 'how did these men bath, eat, sleep etc,..he explains it all so well you feel like you're in the trench with him, just amazing.  I'm interested as my grandfather was one of the original ANZACS.

As for getting off topic sometimes that 's not such a bad thing as life is good and we should all enjoy every moment of it and stuff all the other stuff that gets in the way.  When you think about what the men went through in the wars that this country has been involved in perhaps our little problems are just that little, at least we're still alive to fight on.


----------



## Garpal Gumnut (19 October 2011)

Harleyquin said:


> As for why we went to storm, we went because we didn't trust anyone with our money and a family member said they'd been with them for some time and recommended them.  We asked around too and everyone who was with them said how good they were.  They certainly seemed professional enough to us.  Not one person mentioned that they only had a high risk strategy and the advisors certainly didn't mention it.  Is that our fault.  Some of you will say so and that's fine that's your call.




Hq, 

Early on in this thread there were many Storm investors who believed that the Cassimatis were blameless in all of this.

Are there any who still believe this?

gg


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## bunyip (20 October 2011)

sailteam30 said:


> "95% Storm, 5% Banks"
> 
> If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because
> 
> ...




Why apply for a 140k loan in the first place if if you had no income and therefore no capacity to service the loan? And why accept the loan when it was approved?

Someone must have supplied the bank with figures (false or otherwise) to show how the loan would be serviced. That someone should have been _*you*_ – after all, it was your loan, not someone else's. 
If you entrusted someone else to apply for a loan on your behalf, attend to the documentation, supply the figures etc - did you not see that as an unnecessary and foolish risk?
If you borrowed money without signing any paperwork, or if you signed but didn't get a copy of what you signed, then again did you not see this as unnecessary and risky?

Using a bit of prudence and common sense is not illegal.


----------



## Solly (20 October 2011)

Garpal Gumnut said:


> Hq,
> 
> Early on in this thread there were many Storm investors who believed that the Cassimatis were blameless in all of this.
> 
> ...




GG 

Do you think Manny ever trawls this forum ? 

Maybe he's responding but I suppose a data rate of 1200 baud probably takes quite a while to authenticate.

S


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## bunyip (20 October 2011)

Harleyquin said:


> Bunyip loved your off topic subject I'm very interested in aboriginal mythology.  I love Ion Idriess and reckon he should be on top of everyone's to read list.  I have an old drover friend who lends me his considerable collection of Ion Idriess books and have been slowly making my way through them all.  Recommended reading to anyone interested in the early years of Australia.  Have you read the one based on his experiences during World War 1 and his time at Gallipoli in the trenches and his experiences in Egypt as he was a light horseman.  Highly recommend it to anyone interested in how these men survived, can't remember the title of it, but you wonder 'how did these men bath, eat, sleep etc,..he explains it all so well you feel like you're in the trench with him, just amazing.  I'm interested as my grandfather was one of the original ANZACS.
> 
> As for getting off topic sometimes that 's not such a bad thing as life is good and we should all enjoy every moment of it and stuff all the other stuff that gets in the way.  When you think about what the men went through in the wars that this country has been involved in perhaps our little problems are just that little, at least we're still alive to fight on.




No HQ, I haven't read the one about his war experiences. Now that you've made me aware of it I must call into the local library and see if they've got it.

I'll bet your old drover friend could tell a few tales! When I was 18 I was fortunate enough to do two droving trips with one of the last of the drovers, a 65 year old bloke called Merv from Chinchilla in Queensland. I still have a Condamine bell he gave me as a memento of our droving trips together. We'd hobble out our horses each evening, tie a Condamine bell around their necks, and let them loose in the bush. They wouldn't stray far from camp and we'd easily find them next morning by the tinkling of their bells as they moved around.
Merv's wife used to complain that it was a waste of time taking him to any function at night because he'd just fall asleep.
If she took him to a dance he'd go to sleep sitting against the wall. If she took him to a restaurant he'd fall asleep at the table.
After a lifetime of droving when he'd go to sleep at dark and wake at dawn, his body clock was so deeply programmed that he just couldn't stay awake after darkness fell.

Apologies to the forum for getting off topic yet again – Harleyquin and I will do our best to stay on topic from now on!


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## Knobby22 (20 October 2011)

Great story Bunyip.


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## bunyip (21 October 2011)

*Re: Ignorance*



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!




Solly, in answer to the question "_Does Manny ever trawl this site"_?, I'd say it's a pretty safe bet that he sneaks in here for a look every so often. 
I wonder if the post above was written by him?


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## bunyip (21 October 2011)

Frank Ainslie said:


> Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time?
> 
> When people accept that the Banks have a case to answer, a sensible debate can then ensue. Bear in mind that ASIC started litigation proceedings against these Banks after conducting one of the most exacting investigations in its history which has cost millions. ASIC has gathered literally millions of documents on its central data-base to draw on. If there isn’t a case to answer, why does ASIC believe otherwise?? ASIC has spent millions to bring these Banks to account?




Frank

In the unlikely event of your class action resulting in the banks being ordered to pay 100% of your losses, will you accept the money?


----------



## Solly (21 October 2011)

*Re: Ignorance*



bunyip said:


> Solly, in answer to the question "_Does Manny ever trawl this site"_?, I'd say it's a pretty safe bet that he sneaks in here for a look every so often.
> I wonder if the post above was written by him?




bunyip, I'm getting the guys in the lab to compare the grammar and syntax of the above post to the responses in the transcripts from the Inquiry in an attempt to get a definitive answer. Early results indicate, probably "Pennywise... but pound Foolish"  :


----------



## Garpal Gumnut (21 October 2011)

*Re: Ignorance*



Solly said:


> bunyip, I'm getting the guys in the lab to compare the grammar and syntax of the above post to the responses in the transcripts from the Inquiry in an attempt to get a definitive answer. Early results indicate, probably "Pennywise... but pound Foolish"  :




I had a comparo earlier. There is a certain similarity. Spelling mistakes fit as well.

gg


----------



## Solly (21 October 2011)

*Re: Ignorance*



Garpal Gumnut said:


> I had a comparo earlier. There is a certain similarity. Spelling mistakes fit as well.
> 
> gg




GG,

I always suspected you had a Cray crunching away in your digs.

I'm sure it would have been a simple task to run the spell checker over those "cookie cutter" templates. It appears this was also a task that was a bridge too far as well.   

S


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## Garpal Gumnut (21 October 2011)

*Re: Ignorance*



Solly said:


> GG,
> 
> I always suspected you had a Cray crunching away in your digs.
> 
> ...




I haven't updated, very fond of my XE6, thus the delay.

gg


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## bunyip (21 October 2011)

Solly and GG

You fellers are in the wrong game....you should have been detectives.


----------



## Solly (21 October 2011)

bunyip said:


> Solly and GG
> 
> You fellers are in the wrong game....you should have been detectives.




bunyip...maybe we are, just a couple of concerned ol' gumshoes


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## Harleyquin (22 October 2011)

Solly I haven't looked at this thread for a couple of days but want to say that Doks comments pretty much sum up what our advisor told us.  They told us that our investments were being closely monitored by their experts.  We fell for it hook line and sinker.  There was definite deception unless there's something that I don't know.

Sorry to get off topic for another wee while but just love my stories of the early days and read anything I can get my hands on.  Bunyip I've just finished reading 'Pieces of Blue' by Kerry McGinnis, a true story, recommended and given to me by a friend on a local station as he's mentioned in it.  Loved it, what lessons the young city folk could learn from reading these stories.  Don't get me started again Bunyip as it's my sort of topic.

Back on topic again.  All of these posts that tell us we should have done this and that rahh rahh rahh...all miss the one point and that is 'these are financial planners who we pay for their brand of expertise'  I've also seen amongst my official paperwork information that distinctly disproves what you've said in two of your recent posts Doobsy.  You guys can make all the excuses in the world why we should have done things differently.

Many of you on this thread ,don't believe in financial planners, you only believe in manageing your own investments, and you've repeated this many times.  You also say 'do your research' but I don't see any specific advice for doing your own research other than reading books on the subject.

Now we've got the FPA and banks all offering their financial planning services again via recent television advertisements.  If you are a forum member who believes so strongly in not believing and taking financial advice from those who are supposedly licensed.  These people are still out there peddling their wares, in fact, so many of the storm advisors are still advising with other companies. 

What do you believe needs to be done to prevent these people doing something that most of you don't believe in.

How do you warn potential victims in the future against enlisting the services of people who most of you believe we should never trust. 

If Manny and co are peeking on the forum well let them who cares, at least they'll know exactly what we're thinking.

Come on let's be proactive and come up with some positive strategies to prevent the storm financial tragedy reoccurring.


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## Solly (22 October 2011)

Harleyquin

In the 2007 Prospectus this graphic is embedded in section 4. I've always wondered what the Dashboard represents. Does anybody know the meaning of this ?

The position of the indicators on the dials has been of interest to me for a while.


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## bunyip (22 October 2011)

Solly said:


> bunyip...maybe we are, just a couple of concerned ol' gumshoes




Solly - Who are those two cats in the photo - surely not you and GG - didn't realise you two were such good looking hombres!!


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## Garpal Gumnut (22 October 2011)

bunyip said:


> Solly - Who are those two cats in the photo - surely not you and GG - didn't realise you two were such good looking hombres!!




Taken some years ago.

gg


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## Harleyquin (22 October 2011)

Solly I have no idea what that Phormula image means.

Careful gg and Solly may be detectives!!!

Doesn't hurt any of us to have a few detective skills under our belt.

I'd bet one of my last dollars on the recent post being from ec or someone closeby.


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## Garpal Gumnut (22 October 2011)

Harleyquin said:


> Solly I have no idea what that Phormula image means.
> 
> Careful gg and Solly may be detectives!!!
> 
> ...




Hq,

May I ask you again, does Manny have any fans/believers left amongst the Storm investors, any who totally blame the GFC and Banks, and not the Cassimatis.

gg


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## Julia (22 October 2011)

Harleyquin said:


> Solly I haven't looked at this thread for a couple of days but want to say that Doks comments pretty much sum up what our advisor told us.  They told us that our investments were being closely monitored by their experts.  We fell for it hook line and sinker.  There was definite deception unless there's something that I don't know.



I don't doubt that they made such promises to you.  And you've explained that you just trusted whatever was said by Storm.  I guess we all approach our decisions in different ways but if someone had suggested to me that I borrow and then borrow on those borrowed funds, assuring me that they "had strategies in place to ensure the family home would never be affected", I'd be asking them to explain in detail just what those strategies were.

Why?  Because it just doesn't sound credible that you could borrow to such a level and not place the primary collateral at risk.



> Many of you on this thread ,don't believe in financial planners, you only believe in manageing your own investments, and you've repeated this many times.  You also say 'do your research' but I don't see any specific advice for doing your own research other than reading books on the subject.



That's rather disingenuous of you, Harleyquin.  I clearly remember via a series of PM's exchanged with you making many suggestions, including the ultra simple first steps of working through the education modules available on the ASX website and those of many of the brokers.

My memory of your response  was that you found it difficult to feel able to work through even such basic information.




> Now we've got the FPA and banks all offering their financial planning services again via recent television advertisements.  If you are a forum member who believes so strongly in not believing and taking financial advice from those who are supposedly licensed.  These people are still out there peddling their wares, in fact, so many of the storm advisors are still advising with other companies.



Fair enough for you to feel bitter toward Storm, but it's less fair to denigrate all financial planners, many of whom do a perfectly OK job for many people.
Going to any financial planner, however, does not remove from the client the basic common sense test or the obligation to keep asking questions until totally sure the suggested strategy is understood.

My understanding of the role of a financial planner is that of collecting information about your entire life and financial situation, and devising strategies, especially with regard to tax, which will work for your unique circumstances, rather than necessarily pushing everyone into an aggressive, risky strategy.

Doobsy earlier outlined a conservative strategy for retirees or those approaching retirement.   I'd guess that his approach would likely be that of many financial planners.

I don't see that you should stigmatise the whole industry because you chose to go with a bunch of cowboys.

And no, I don't use a financial planner, because I'm quite clear about my own situation, but if this were to change and I were unsure about e.g. tax implications, I would certainly consult someone.



> What do you believe needs to be done to prevent these people doing something that most of you don't believe in.



As above.  This comment is rather a twisting of what some of us have said.



> How do you warn potential victims in the future against enlisting the services of people who most of you believe we should never trust.



In the same way you would make a judgment about any other individual whom you consult about anything to do with your life, i.e. use some common sense and ask questions.

If you had an ulcerated foot, would you accept the opinion of an orthopaedic specialist who told you the only solution would be to amputate the foot, before more conservative measures like antibiotics had been tried?  No, of course you wouldn't, because it doesn't make sense.

If your house is too dark and cold because a large tree is shading it, would you believe the person who told you to put in a sky light at great expense, or the one who suggested you chop down the tree?


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## Solly (22 October 2011)

> *"Storm Financial documentary brewing*
> 
> When it comes to influencing the outcome of a case, the lawyer acting for investors in the Storm Financial class action isn't afraid to push the limits."




More from Stephanie Quine @ www.lawyersweekly.com.au


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## McLovin (22 October 2011)

Julia said:


> I don't doubt that they made such promises to you.  And you've explained that you just trusted whatever was said by Storm.  I guess we all approach our decisions in different ways but if someone had suggested to me that I borrow and then borrow on those borrowed funds, assuring me that they "had strategies in place to ensure the family home would never be affected", I'd be asking them to explain in detail just what those strategies were.




Exactly.

If you don't understand what is being sold to you, would you really risk your biggest asset on the say so of someone who is compensated based on getting you to sign. Would you ask a used car dealer if you're getting a good deal on the used car you're about to buy off him?


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## bunyip (24 October 2011)

bunyip said:


> Frank
> 
> In the unlikely event of your class action resulting in the banks being ordered to pay 100% of your losses, will you accept the money?




Frank

Did you miss my question above? 
Or have you decided it might be safer not to answer it?

Not that I think you're answerable to me - you definitly are not - but it's a reasonable question and I'd be most interested in your answer if you have time to give me one.


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## Harleyquin (24 October 2011)

gg you've asked the question _'May I ask you again, does Manny have any fans/believers left amongst the Storm investors, any who totally blame the GFC and Banks, and not the Cassimatis'_.  I'm not in a position to say what others think.  I would imagine, from the interest that you've taken in this case. that you would know as much as we all do about the answer to your question.

Personally I closely follow the evidence which has and is still coming to light.  I'm really only interested in the facts, and I think I.ve made my personal thoughts very clear, and that is the storm people have a lot of explaining to do, as do the banks who financed their dubious scheme. The illegal alliance between the banks and storm will be tested in court.  

As Julia has said, in PMs passed between us she has given me the ASX educational site.  Two years ago when she gave me this information, I was not in a good place, and learning about the stock market was not high on my agenda.  She has been very generous with her advice regarding investments and recovering from such a shock and the depression that threatens to come with it and I'm very happy to thank her for that support.

Today I'm a different person, I've been very lucky to be a reader and to have had contact with a number of professionals who have helped enormously.  I've also been lucky to have other PMs from members of this thread who have offered personal support and advice. I didn't come on this forum for emotional help as I know exactly who to go to for that.

Many of you have been taken for a ride previously and have been lucky enough to recover and move on, educating yourselves along the way.  Thousands of stormies haven't been just ripped off they've been stripped of everything and still left in debt on the verge of retirement, or in retirement, by a allied team of licenced financial planners and bankers.  Our crime has been to believe that we could place our trust in a licenced planner and the Australian banking system.

Then to add insult to injury they've been called greedy.  On another ASF thread Julia has said something similar to this 'people are not stupid they are only educated or uneducated'.  In the storm financial scenario the educated have destroyed the uneducated.  Unless you've been destroyed to the level that we have you have no concept of the level of sheer hopelessness and devastation that we have felt.  

This level of stress is now causing major health problems, such as cancer, heart attack and stroke, amongst stormies.  I say this because we have personally been affected like this healthwise and left to flounder on a pension.  Our trust in people and all financial institutions in particular,has been destroyed by this.

When we joined storm we had a computer but no internet connection, so searching for information on the net is something we've learnt since joining storm.  It's been a great research tool and the information that I've gleaned from sites such as ASF among others have been invaluable.

I know that ASF is primarily a site for stock market information, however, the non investment threads are also of interest.  I see the Storm thread as one where we can discuss all aspects of this case, not just investing side, there are many threads on this site where we can all go to, to further our education.

My concern today is that this never destroys so many again and until the storm directors, bankers, ASIC and the Australian government all acknowledge where the true guilt lies, this fiasco will occur again.


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## SJG1974 (24 October 2011)

Every industry has been represented by some rotten apples. From doctors, to solicitors, to politicians, to accountants to financial advisers etc.  Greedy people who look after their own interests in the name of making a quick buck rather than those of their clients.

This is not to say the industries are rotten, but unfortunately some practitioners in them are. As I have said, I use an adviser and really value the advice he has given me- he has saved me thousands in tax, helped protect family members when things have gone wrong and given me a plan to work with that I could never have done on my own. And he has not invested 1c of my money....thats my responsibility.

So I must admit, I find it to be a complete overreaction that some people think because Storm was crooked that the whole industry is.  

There are people everywhere who prey on the vulnerable and gullible.  And, without wanting to offend anyone, Storm clients were gullible.   

Having read through the hundreds of submissions to the PJC, I remain staggered that warning bells didn't go off earlier for clients...particularly when it comes to the astronomical fees they paid up front for the most basic of investment advice (borrow and plonk it all into shares) and the risk they took in double gearing into the sharemarket which was at all time highs.  If nothing else, I guess Storm clients have learned a very very harsh lesson out of all of this....if it seems too good to be true it probably is.

I wouldn't wish what has happened to Storm clients on my worst enemy, and I hope that Manny and his crew pay big time for the "advice" they have given...


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## Harleyquin (24 October 2011)

SJG1974, I don't  know what your occupation is but I suspect that you're in the financial industry to be so 'knowledgeable'  The storm / banking industry alliance was far far more than 'greedy people making a quick buck'

It was an alliance that has destroyed the lives of thousands of hard working Aussies who believed in the need to seek a financial plan from a legitimate financial planner.  I consider that far more than a quick buck, it was in fact billions of dollars provided to storm by the banks to finance their scheme.

'Corporate Greed' by the banking industry is behind the fall of storm financial and other financial planning groups.  We are now seeing riots against this greed starting in Wall St and escalating around the world.  Without this greed SF was just a little shop in the back blocks selling rotten advice.  The banks turned it into the major disaster that it was to become.

I would disagree most strongly that this is an over reaction from storm clients.  Storm most certainly will be proved to have committed it's share of this crime, and so will their partners in crime if we all have anything to do with it.

'There are people everywhere who prey on the vulnerable and gullible and without wanting to offend anyone', were people seeking a financial plan from an ASIC / FPA backed financial planning group.  I fail to see why we should be lumped together as gullible for seeking financial freedom in our retirement.  It's a cop out by the finance industry to say that 'storm clients were gullible', our members included those who were very financially educated to those who were totally uneducated.

You 'assume' that you know what storm advisors told their clients and yet your post clearly indicates that you have no idea what they were told.  Also we were never told 'this is too good to be true' quite the opposite in fact.  The units which were part of the storm portpolios were not 'just shares' as you again assume they were.

I'm pleased that your advisor is one of the good guys, however, the average person seeking financial advice really does take a risk unless they know exactly what they are doing.

Like you, I also hope that Manny and co, get what's coming to them for the advice given.  You know that their advice was very high risk and so did their partners in crime.  What bank knowingly finances such rotten advice to the tune of billions of dollars?


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## bunyip (25 October 2011)

Harleyquin said:


> Many of you on this thread ,don't believe in financial planners, you only believe in manageing your own investments, and you've repeated this many times.  You also say 'do your research' but I don't see any specific advice for doing your own research other than reading books on the subject.
> 
> Now we've got the FPA and banks all offering their financial planning services again via recent television advertisements.  If you are a forum member who believes so strongly in not believing and taking financial advice from those who are supposedly licensed.  These people are still out there peddling their wares, in fact, so many of the storm advisors are still advising with other companies.
> 
> ...




Harleyquin

I’d love to be able to respond to your call by coming up with some concrete strategies to prevent people being duped by rogues like Storm Financial.
Unfortunately though I feel that no matter what changes are made to legislation, no matter what attempts are made to educate the general public in finance and investments matters, no matter what penalties are imposed on rogue operators, human nature will ensure that there will always be rogues and there will always be people who will get duped by them.
Listed below are my reasons for these views.

_*No amount of legislation can ever make people use prudence and common sense in investment matters or in any other area of their lives.*_
Some people swim in waters that are known habitats of crocodiles and Box Jellyfish. Some people take crazy risks by driving while affected by booze or drugs. Others borrow crazy amounts of money and sink it all into risky investments like the stockmarket. The common factor among all these people is that they fail to exhibit a reasonable level of prudence and common sense.

_*No amount of legislation will ever force people to utilise the opportunities that are freely available to learn some basic investment knowledge and skills.*_
Personal computers and the internet have been readily available to the general public for at least the last 20 years or so. Anyone interested in knowledge and personal development should have embraced this technology many years ago, unless age prevented them from doing so. 
Anyone considering margin loans can easily jump on the internet and type ‘margin loans’ into Google. Anyone considering stockmarket investment can easily type ‘Stockmarket crashes’ into Google. Anyone can call a stockbroker for information on Index funds or about the stockmarket generally. Anyone can go to the ASX website and find out what free courses and information they offer. Anyone can find many useful books in the finance and investment sections of bookshops, or in their local library.
And yet there are many people who don’t avail themselves of these excellent sources of useful information.

_*No amount of legislation can ever change the attitudes of people who go through life learning little or nothing from historic events such as the 1987 stockmarket crash.*_ 
The crash of 1987 – and there have been many other crashes as well – provide us with some of history’s most valuable economic lessons. The great majority of Stormers were adults in 1987 and should have some recollection of that event. They should not have even considered taking out margin loans and sinking those funds into the stockmarket unless they had first taken the trouble of researching the ‘87 crash to learn how far and how fast the market fell. They should also have researched margin loans so that they could make an assessment of what effect a crash like 1987 would have on anyone with big margin borrowings invested in the market.
Had Stormers done so before signing with Storm, they would have uncovered information that revealed the extreme danger in Storm’s strategy.

*No amount of legislation can ever make people read the papers and watch the TV news.*
As I read some of the posts on this forum I find myself wondering if the writers live a life that’s completely isolated from the outside world, where they have no access to news programs and newspapers. For example, trusting Storm because they were ASIC approved. ASIC would struggle to track an elephant with diarrhea – they have a well- documented record of incompetence in tracking down shonky operators and fraudulent investment schemes. For years I’ve been reading of various dodgy schemes that have slipped through undetected by ASIC. Given the amount of adverse publicity that ASIC were copping for years before Storm burst into the headlines, I find it most perplexing that anyone would have confidence in ASIC’s opinion of Storm or anyone else.

_*No amount of legislation can ever make people absorb what they’re reading or hearing, or retain information over the longer term even if they do absorb it initially.*_
Useful information stops being useful if you let it go in one ear and out the other. We should all do our utmost to retain information, particularly if it could be relevant to our physical or financial health.

_*No amount of legislation can ever change people who are inclined to take the easy way out by relying on others to do their thinking for them, instead of thinking for themselves.*_
Accepting at face value an investment strategy proposed by an investment advisory firm – that’s allowing others to do your thinking for you. You start thinking for yourself when you put some real effort into researching the strategy that’s proposed to you.
The internet is an invaluable resource for conducting such research.

_*No amount of legislation will ever change people who ignore such age-old wisdom as ‘Don’t put all your eggs in the same basket’, and ‘If it sounds too good to be true then it probably is’.*_
We’ve all heard these two wise old adages hundreds of times. We ignore them at our peril. Some people have to learn this the hard way.
*
No amount of legislation will ever stop banks from making large loans to people who apply for them, providing that the application shows how the loan will be serviced, and providing that the banks security requirements are met.*
Forget about the banks ensuring the viability of the enterprise that you propose to fund with their money – that’s your job as the loan applicant. They have neither the time nor the resources nor an obligation to do your due diligence for you.

_*No amount of legislation will ever eliminate dodgy operators like Storm Financial.*_ 
ASIC probably give it their best shot, and to be fair to them they do have an exceptionally tough job. But no matter what degree of diligence they apply to the task, shonky operators are always going to sneak through the net. In the USA the SEC (Securities and Exchange Commission) have been equally ineffective in filtering out dodgy investment schemes and illegal stockmarket dealings. No matter how many convictions they get in the US courts, shonks and their crooked schemes continue to plague the unwary.

In conclusion..........the only way to avoid getting stung by the likes of Storm Financial is to get yourself some basic finance and investment knowledge (no sophisticated knowledge or skills required) and to use prudence and common sense at all times.


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## Solly (25 October 2011)

GG

Have you had any intel on what Manny has been up to lately?

I haven't seen any media reports for a while.

I wonder if he is involved in any new business start ups lately?


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## SJG1974 (25 October 2011)

Harleyquin,

In answer to a few of your questions....

Yes I am in the financial industry, but not directly involved in this area.

I stand by my claim that people saying the industry is rotten is an overreaction.  There are a lot of good folk who work very hard for their clients, but also a lot of rogues.  It can be difficult to sort the wheat from the chaff, but I maintain that obtaining second opinions and doing some research on the strategies recommended is a good starting point.

Again, the fees are something I just cannot comprehend.

A couple of questions- how did Storm justify to you their 7% upfront fees?  
Did they charge you 7% everytime they ramped up your loan like they evidently did with others (this from PJC submissions)?
What was it that they sold to you to justify this fee. Surely you saw some sort of value in paying this- what was the value they sold you? You wouldn't go out and pay thousands of dollars (or hundreds of thousands in the case of some clients) if you didn't see a way of recouping this investment and more?

I would dispute that people who allowed Storm to gear against their home, and then gear further into margin loans, putting all of it into shares were financially literate if they did not fully comprehend the risks of doing so.  This is financial illiteracy on a grand scale IMO.

Correct me if I am wrong, but the units in the Storm Portfolios were in index funds were they not?  They are invested in shares. As Allan Jeans said about sausages, you can boil them, fry them, put them in a casserole, but at the end of the day they are still sausages.  The same as shares.  You can package them up any way you like, but at the end of the day they are still shares and when the market tumbles, be ready for the fallout.

You stated previously that your portfolio was well diversified.  No it wasn't.  It was invested in Australian shares- just because it is in mining companies, small caps, industrials etc doesn't make it well diversified.  And it doesn't make it safer than ordinary shares....they are ordinary shares!

I feel for you and others caught up in this.  I don't know what exactly happened because I wasn't involved thankfully.  But, having read almost every submission by battered clients to the PJC, it is easy to get a picture of what happened and how Storm operated.

Storm sold advice in a one size fits all approach which involved a risky double gearing strategy, with investments invested in a single asset class that was riding the greatest bull market of our lifetimes.  And this strategy was sold to people who could least afford the inevitible fallout when markets predictably fell (as they always do). 

I am sorry, but for people to have believed that was an appropriate low risk strategy and to have paid huge fees for it, they must have been gullible, or at the very least naive in the extreme.


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## doobsy (25 October 2011)

Have to agree here - nothing beats a second opinion when it comes to money. But people as a rule love a good story and storm had the best story of all. All this talk of licenced planners is a sideline - Storm planners were qualified and they followed the rules of the industry. The same as a teacher who has done the uni course - that doesn't automatically make them the best person to put in front of our kids.

HQ, I am not picking on you but you are about our only regular forum contributor that was a client so we reference you a lot.

Nothing that storm did was anything an average punter could not do themselves. Anyone with or without a planner could arrange a line of credit on their home. Everyone had access to margin loans. These were the topics of BBQ talk for most of 2006/07. It wasn’t where you went on holidays, it was how much you had borrowed and how much of a killing you were making on the market. 

As a society our greatest fear is not being part of the crowd. We therefore will do pretty much what is needed to fit in. If all our friends have a margin loan, maybe we should get a margin loan etc etc.

You were sold the story. You were sold how markets ALWAYS go up over the long term. You were sold how your strategy could handle significant market falls and still be ok. You were sold how the trigger points and cash dam would allow you to keep your house safe. You were sold how diversifying within the Aussie share sectors would provide “diversification”. You were sold how should you not adopt the strategy you would be stupid and be missing out. The whole thing was geared around pushing all the right buttons to make people feel like they were either IN or OUT. As most people were referred by friends, Manny even knew how to use that – people don’t want to look ungrateful for the referral (works for Tupperware) and will look for reasons to buy the story.

The extra LVR arranged with the banks was sold as yet another failsafe, clients could retain their exposure for longer, therefore the market could fall further and they would not be sold out and therefore would be fully invested for when it recovered.

My point in all this is that I for one can see how you did accept you were doing something you should do. People go to advisers whether they be in finance, stocks, accounting, legal, medical looking for guidance. What you unfortunately found was the group that had a strategy that sounded perfect, had all the right features and would look after you. Who designed this strategy, one E Cassimatis. The banks didn’t push this process on you, they didn’t run the smooth sales pitch outlined above, Storm did. I will continue to harp on this as someone needs to. This was a storm model, it was a storm strategy, he even went as far as to badge his own index funds to make it look even more exclusive and special. Manny was the one that designed a model that could withstand a 40% drop in markets and still have clients fully invested throughout. What happened????? MARKETS DROPPED 50%. He stuffed up. He failed to factor in that big a fall, he failed to adjust his strategy through 2008 because his arrogance was such that he figured he knew more and that it would never happen (read their old newsletters). He thought he could paper over things by expecting the banks to give him even more leeway than before. He couldn’t deal with 3000 clients all getting margin calls at the same time.


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## doobsy (25 October 2011)

SGC1974 – On the fees, my understanding is they had a nice simple way of showing that if you paid 1% ongoing fees (industry average at the time) and  surprise surprise factored in some nice growth assumptions over time, then you would pay more than paying a supposed one off upfront fee. What they failed to show was that most planners were not double gearing and therefore the asset base the fee was being taken on was about 50% lower. That and the glossing over the ongoing upfronts evertime they suggested you jump into some more exposure.


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## doobsy (25 October 2011)

Well I just got the perfect example, I post a few thoughts on a thread and next thing I am getting an emails from ASF offering my an exclusive chance to get access to a subscription for foreign exchange education.

AND I QUOTE FROM THE EMAIL

Quite simply, it’s a way to introduce you to us and what we do. 
LTG ******** is primarily a Forex Education company. We focus on giving the very best education and support structure (including a 24 hour a day Live Trading Room and world class trading mentors, ex bankers and institutional traders), to support, mentor and help traders at all levels perform at their peak. 

I am a fully qualified planner and Forex scares me, what chance does the average punter have????????????????????


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## Harleyquin (25 October 2011)

Thank you to all forum posters for your feedback appreciate it.  I think that any questions that you have to ask ex stormies have been answered in previous posts.

To say that I'm bitterly disappointed in the whole financial industry would be an understatement.  Once again appreciate the contributions by those of you who are well educated in this field.


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## Julia (25 October 2011)

Harleyquin said:


> 'Corporate Greed' by the banking industry is behind the fall of storm financial and other financial planning groups.



I suppose if Storm clients have decided the only recompense available would come from the deep pockets of the bank, then this has to be rationalised by attributing most of the blame to the banks. 

It was Storm's reckless lack of good strategy that caused the problem, but since no one believes any money can be extracted from Manny, it wouldn't do to attribute the deserved amount of blame to him.



> were people seeking a financial plan from an ASIC / FPA backed financial planning group.



You keep repeating this.  You seem to have some idea that Manny sat down with ASIC and said "hey fellas, I'm planning to offer retirees the idea that they source a loan secured over their freehold home up to 90% of its value, buy a bunch of shares with those funds, and then get a whacking great margin loan over the value of those shares.  Terrific idea, huh?  "
Whereupon, ASIC would say "Gee whiz, Manny, what a supa dupa strategy", and away Manny & Co would go, having received "ASIC approval" for a totally irresponsible suggestion.



> I fail to see why we should be lumped together as gullible for seeking financial freedom in our retirement.



Oh dear, HQ, no one has said you were gullible for seeking financial freedom, just that you were gullible and totally unrealistic in not applying the basic common sense test to what was suggested to you.



> It's a cop out by the finance industry to say that 'storm clients were gullible', our members included those who were very financially educated



Hard to believe this.



> Also we were never told 'this is too good to be true' quite the opposite in fact.



Did you actually read what you've said here?   Did you really expect Manny or whomever to outline this get rich scheme and then say to you, "but hey, client, you have to know this is just too good to be true"????


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## DocK (25 October 2011)

Harleyquin said:


> Thank you to all forum posters for your feedback appreciate it.  I think that any questions that you have to ask ex stormies have been answered in previous posts.
> 
> To say that I'm bitterly disappointed in the whole financial industry would be an understatement.  Once again appreciate the contributions by those of you who are well educated in this field.




Harleyquin, I think you have shown grace and dignity in your posts.  You appear to have been able to retain a sense of humour throughout your ordeal.  I hope you have gained whatever you were seeking from posting on this forum.


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## Harleyquin (25 October 2011)

Thanks DoK life is still good no matter what happens and we should all enjoy it.  This has proved something which we knew all along anyway and that is that our families are far more important than any wealth and if wealth is measured by family and their support, I'll always be 'wealthy'.

Julia you and I think very differently in some areas however we'll just have to agree to disagree on some of these issues.  I admire your investment skills however and wish I had them.  Maybe some day I'll revisit the site you suggested a while back.

Bunyip the book I was talking about in a previous post is 'The Desert Column' by Ion Idriess, hope you enjoy it.


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## Julia (25 October 2011)

DocK said:


> Harleyquin, I think you have shown grace and dignity in your posts.  You appear to have been able to retain a sense of humour throughout your ordeal.  I hope you have gained whatever you were seeking from posting on this forum.



Agreed absolutely.  I did send you a PM to this effect a few weeks ago, Harleyquin.
I'm still concerned that, because you still don't seem to entirely 'get it' regarding responsibility of various parties, you could be vulnerable to being taken in again.

Dock, hope things have improved for you overall too.


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## Junior (26 October 2011)

Julia said:


> You keep repeating this.  You seem to have some idea that Manny sat down with ASIC and said "hey fellas, I'm planning to offer retirees the idea that they source a loan secured over their freehold home up to 90% of its value, buy a bunch of shares with those funds, and then get a whacking great margin loan over the value of those shares.  Terrific idea, huh?  "
> Whereupon, ASIC would say "Gee whiz, Manny, what a supa dupa strategy", and away Manny & Co would go, having received "ASIC approval" for a totally irresponsible suggestion.




This may not be that far from the truth.  A large fin. planning group like Storm would have been subjected to ASIC audits, whereby they scour a number of client files, read the SOAs, loan apps etc. to judge whether or not they are compliant.  This includes whether or not there is a reasonable basis for advice given.  Whether or not the advice is appropriate for the client given their goals and objectives, risk profile etc.

It's likely that they effectively 'OK'd' Storm's strategies at some stage.

This just further highlights how ASIC cannot be relied upon to provide safeguards to individual investors.  They don't have the knowledge or resources.


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## bunyip (26 October 2011)

Junior said:


> This just further highlights how ASIC cannot be relied upon to provide safeguards to individual investors.  They don't have the knowledge or resources.





Agreed. ASIC have little ability to prevent us from being conned.
We have to look out for ourselves in this world, not expect others to look out for us.

I wonder who ASIC is staffed by? Are they people with some business and life experience, or are they mostly youngsters not long out of uni who have little experience in life or business or finance or anything else?
Does anyone know?

Most important of all, are they people who can think for themselves and use a bit of common sense? They don’t appear to be. 
Then again, maybe I just don’t understand the difficulty and enormity of their job.


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## Julia (26 October 2011)

Junior said:


> This may not be that far from the truth.  A large fin. planning group like Storm would have been subjected to ASIC audits, whereby they scour a number of client files, read the SOAs, loan apps etc. to judge whether or not they are compliant.  This includes whether or not there is a reasonable basis for advice given.  Whether or not the advice is appropriate for the client given their goals and objectives, risk profile etc.
> 
> It's likely that they effectively 'OK'd' Storm's strategies at some stage.
> 
> .



Really?  You're actually saying ASIC would have approved double gearing such as I described for retirees???

If that's the case, I'm going to have to include myself amongst those who have been quite deluded about the capabilities of ASIC.

If Junior is right, Harleyquin, I apologise for suggesting you were incorrectly perceiving ASIC's overseeing role.  Still find it almost impossible to believe that they'd OK any such thing, though.


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## McLovin (26 October 2011)

Julia said:


> Really?  You're actually saying ASIC would have approved double gearing such as I described for retirees???




I'm with you, I highly doubt it. However, ASIC is so woefully underfunded that I would also doubt any follow up audits were done to see who was actually being marketed to. I can't find the figures but since ASIC took over regulating brokers from the ASX last year the number of brokers being fined has fallen by more than 90%. As I understand the main action being taken by ASIC is that Storm's directors allowed it to sell financial products to people without being aware of their personal financial situation. 

My own opinion is that geared equity investments have no place being marketed to retail investors.


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## Helen Gillies (26 October 2011)

Doobsy,

I’ve read what you have to say with some interest. There are some things however that I feel I must correct you on.

You state that, _"The banks didn’t push this process on you, they didn’t run the smooth sales pitch outlined above, Storm did."_  I agree with Frank Ainslie that you do appear very one-eyed  when it comes to discussing the Banks’ roles in all this. 

You have said that you only equate 5% of the blame to the Banks. The evidence does not support this. Why, if the Banks are only 5% responsible, did Ralph Norris, the former CEO of the CBA admit partial liability, and that Bank settle under its ‘resolution scheme’ for many millions of dollars?  Banks are not noted for their magnanimity. 

You also said in a previous posting, _“…the margin calls were the advisers responsibility.”_ This is an assumption on your part rather than a fact and has no foundation in law. Margin loans are contracts between Banks and their customers. Under such contracts both the lender and the borrower have certain contractual obligations to one another that cannot be denied. It should be added that “obligations” cannot be assigned to any third party unless novation occurs. It did not!

The ‘Goodridge v Macquarie Bank Appeal’ clarified certain points in relation to assignment transactions, especially securitisations. However, the Appeal judges did not reject the primary judge’s remarks regarding the making of margin calls and the form in which they should be made. In fact there was little in the ‘Goodridge’ case that is detrimental to our case against the Banks. Rather, it reinforces the notion that the banks have an obligation to effect margin calls. The “reasonableness” element of contract dictates that such margin calls should be made in a timely manner. The law of “custom” that exists in the market place (margin calls in 5 days) also has a marked bearing on our rights as margin loan customers to be so advised within that time-frame. 

Here’s what Mr. Paul Johnston ( Head of Colonial Margin Lending from its inception in early 1996 until his departure from the company in 2003) had to say about this issue in 2009: 

_“An agreement entered into between CGI and Emmanuel Cassimatis in May 2007 provided for an upward movement in loan-valuation ratios exclusively for Storm clients. The agreement allowed for an increase in the buffer from 70% to 80% and from 80% to 90% for a margin call. There appears to be no evidence of any formal advice to advisers or clients of this variance. _

_The agreement was in fact not adhered to, as it talks about moving the buffer from 70% to 80% and the margin call from 80% to 90% for certain Storm funds, whereas in fact the real ratios sat somewhere in the low 80's for buffer and low to mid 90's for margin call. 

From a risk management viewpoint, it seems an unnecessary risk to take, given the volume of business generated ... also if this was something I would do it would have happened back in 1996 so as to give me a superior competitive edge in the market. _

_*The Loan agreement is and always has been between the client and the borrower, not the agent - in this case, Storm.*_ 

_After consultation with a former IT colleague at the bank, I believe a margin loan facility could not go past 100%. If it did, it would be the bank's problem, not the borrower's.” _

*(Some went past 130%)*

_“The Lending parameters were set at 66%, giving the bank, the adviser and the client a level of comfort from a risk management stand point. To take the buffer to the low 80s and margin call to low to mid 90s is very risky. _

*At all times during my tenure as head of margin lending, margin call notices were sent automatically to clients, in writing, with advisers copied in for reference.*_ If a margin call was not rectified within five days I felt it was my right and duty to sell the client up (unless evidence was supplied that positive action was being taken to meet the margin call to protect the client and the bank's position. I believe I (on behalf of the bank) was liable for any shortfall if action wasn't taken at the end of five days or 24 hours if direct shares were involved. The five-day window was a generous tlme-frame compared to other margin lenders at the time. “_

*(Macquarie took 3 to 4 weeks and the CBA 10 to 11 weeks and even then, many margin calls were never made – customers’ share portfolios were simply sold out from under them!)*

_“The margin call was always automatically generated by a computer system used by the bank called original MLS, now known as 'EMPIRE'. A margin call notice could only be stopped through manual intervention. _

_I was instrumental in the writing of clause 4.2 of the terms and conditions which talks about 'you' receiving a margin call. My knowledge and practical application of that clause is that the bank contact the client in writing, then the client (in consultation with the adviser) rectifies the position. Again, I should stress that if the margin call wasn't fixed in the five-day period, I immediately sold the client down to protect BOTH parties (unless evidence was supplied that positive action was being taken to get the call fixed).” [End]”_

It should also be added that documents have come to light during the discovery process that will show that margin calls were issued by CGI to other dealer groups in line with standard practice. Therefore, its practice in the case of Storm whereby it allowed Storm to set the parameters was outside the norm and not standard practice at all. This will apply equally to Macquarie Bank!

Based on this evidence alone, it makes your 5% claim look a tad weak, don’t you think? 

At the moment it seems a one-sided debate. I would be interested to hear what Frank can tell us about the Banks' and their involvement with Storm. I've been to his websites and he does seem to know what he's talking about. He was also directly involved whereas most on this forum were not, and are therefore offering opinions based on second-hand information.


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## Judd (26 October 2011)

Throughout this thread there have been claims that Storm was large a player in the financial planning world.

Was it?  Can anyone verify that allegation?  I've only been dabbling in the financial world since the mid-1990's but I never heard of this mob until it, and its clients, was on its knees.

It has been claimed that it had about 14,000 clients.  Yet the firm which bought the fund book, on investigation, discovered that the claimed number of clients was largely a legacy one who had bought an insurance policy or such from the time EC was with MLC and had nothing to do with Storm since then.  They finally whittled the active client base numbers down to 4,000 or so.  That doesn't sound like a real big heavy hitter group to me.  I could be wrong obviously.

It is simply that I am aware of other financial planning organisations, one with 14 planners across Perth, Adelaide, Melbourne, Sydney and Canberra, but Storm Financial never appeared anywhere in my travels.

I don't wish to appear to be rude but was it a firm with a client base concentrated mainly in the Townsville area and with a smattering of clients in other locations?  If it was, then I can understand how those affected could make a claim along the lines of “It is (was) really big, you know.”  I've encountered that concept before in large centres, such as Albury/Wodonga or Dubbo, whereas outside that community, an essentially local firm barely rates a mention, if one at all.

I suppose it doesn't matter really.  Once litigation/mediation has been concluded and people are or aren't compensated, the whole issue will be consigned to the dustbin of history along with Cambridge Credit, Estate Mortgage, the 1973 oil shock and a variety of other financial traumas which come along from time to time.


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## Frank Ainslie (26 October 2011)

Hi Harleyquin!

Still fighting for truth and justice, I see! 

Doesn’t it seem odd to you that no one on this forum has actually asked us to explain what the Banks have done that is so wrong? Wouldn’t this be one of the first questions people would ask if they were really seeking out the truth? Doesn’t it seem strange to you that we Stormies and Storm Financial are being held largely to blame and the Banks (Doobsy suggested 5% based on no evidence whatsoever) are just the victims of their own generosity? 

So what are these forum members trying to prove to us Stormies? That they have more gray matter than us perhaps. And who are _"They"_ when you think about it? Everyone prefers to stay anonymous so it could well be Ralph Norris (CBA), David Liddy (BOQ) or some of their cronies for all we know! 

Then again it could be that some may simply be trying to get the angst out of their system because Storm had been a thorn in their side for years. Such people are bound to have a jaundiced view. Throw some banking personnel into the mix on this forum and you have a cocktail for extreme prejudice. The mantra _“The Banks are not too blame!”_ being spouted by many is proof of this.

We must also factor in a third element, namely the TPS (tall poppy syndrome) crowd that one finds everywhere. These are people that just hate to see their neighbours do well, or anyone for that matter. For one it makes their own efforts seem small by comparison. Therefore, when their neighbour’s house burns down or some other disaster befalls him/her, these TPS merchants are delighted – they dance around the flames while the victims that have lost everything weep.  The reasons why the fire started are of no concern to them. The victims plight is of no consequence. All they can think of is, _“They had it coming!”_ 

Another thing that is prevalent on this group is the gift of hindsight. Julia has called Storm Financial a bunch of cowboys! Yet Storm had been around for some years, were members of the FPA, were routinely audited by ASIC, and were supported by major Banks? When I searched the Internet in 2006 prior to our going with Storm I must have missed their articles warning us about Storm.  In fact I didn’t find one derogatory comment about Storm anywhere! If it were common knowledge that Storm were a bunch of cowboys, why didn’t anyone speak up at the time? _“Good men are not good men because they do no wrong! Good men are those that see wrong being done and do something about it!”_

I would suggest to those people that they were as much in the dark at the time as we were and are only now being wise after the event. 

There are some forum members that cannot accept the fact that most people in Storm were successful people in their own right. They had acquired considerable assets over many years, and were, as a consequence, self-funded retirees. They certainly weren’t stupid as many are claiming. Many investors didn’t become rich by investing through Storm because they were rich beforehand. Storm and the Banks targeted them for this very reason.

We did the right thing at the time - we sought professional financial advice from a reputable financial advisory firm with a track record. We had no reason to doubt that advice because we paid them top dollar for it. Do people get second opinions every time they visit the doctor, obtain legal advice from a lawyer, or appoint an accountant? Why then should our obtaining financial advice from Storm be any different? Of course, now that I have been investigating the financial sector for nearly three years, I have come to realize that many people that call themselves financial advisers are nothing more than charlatans. However, at the time, none of us were aware of this. 

Rather than examine our motives, why don’t forum members that work in the financial sector start asking themselves some hard questions instead. The blame for this financial debacle lies squarely with the financial advisory sector and the Banks that conspire with them. 

It may be unpalatable to some forum members who insist otherwise, but the truth of it is that we Storm investors didn’t cause this mess. A reputable financial advisory Company in conjunction with certain major banks did! We, the victims, have had to pick up the pieces of our lives after Storm and these Banks fleeced us. 

What then makes it all the more galling is that people are forever telling us that we are somehow to blame because we trusted in the system and those that operate within. Yet, on the other hand, those same people are also telling us that we shouldn’t tar all financial advisers and Banks with the same brush. Why not? If one of the biggest financial advisory firms in the country and some of the major Banks had a part in all this, why should we then place our trust in anyone anymore unless they take a lie detector test beforehand or we consult Cassandra.


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## doobsy (26 October 2011)

Judd said:


> Throughout this thread there have been claims that Storm was large a player in the financial planning world.
> 
> Was it?  Can anyone verify that allegation?  I've only been dabbling in the financial world since the mid-1990's but I never heard of this mob until it, and its clients, was on its knees.
> 
> ...




Helen

I think maybe I should clarify my position further. I am not saying the banks are not to blame. My other posts are clear on this. Their system failures to act correctly and swiftly through times where markets were swinging in excess of 5% on a daily basis is not questioned. My view is the banks should wear any losses above the 90% margin call mark for not acting as they should have.

My position is based as a practicing adviser. Storm sold a risky and dud strategy then failed to look out for the clients they were quick to rip tens and hundreds of thousands of dollars of fees out of. The only thing that makes me smile in this whole process was their share float (which was also pushed onto clients) did not get off the ground causing even more damage while the senior people pocketed millions. 

When clients we took over got margin calls, they expected us to be the link between them and the provider. That is what they were paying us for. If a client had capacity to sort the margin call through the deposit of extra funds, providing extra security or any other means, we as the adviser would speak with the margin loan provider and advise them that it was being addressed. The provider then would put off any forced sale to give us a chance to deal with it. This was in the clients best interest because as was seen in the Goodridge case, the worst possible thing that can happen is for someone to be sold out when they could have fixed the margin call problem.

My educated guess is that Storm were on the phone telling the providers it would be actively working and they would be able to deal with it. As mentioned above, with markets in freefall through that period, 3 days meant another 10-15% drop in markets which in a geared sense means it is all over.

I know for a fact that advisers from Storm were looking to use personal funds and Storm approached CBA with a proposal to borrow money which they were looking to use to drop into clients accounts to stop the margin calls. They were thinking when markets recovered they would ask for these “loans” to be paid back to Storm. Manny was scrambling looking for any reason not to sell as his whole strategy was NEVER SELL. If he had pulled that stunt off god forbid because he would still be out there telling new clients how they never sold out through the crisis.This has also all come out in the discovery process. With all this moving and shaking from Storm, the providers sat on their hands waiting to see if it would pan out. By the time they acted the clients were past destroyed.

My argument is not a legal based one, it is based on my belief about my responsibilities to my clients and therefore Storm’s responsibilities to their clients.

The recommendation to borrow against the home – Storm. Any lending that can be proven should never have occurred to clients who did not have capacity should be forgiven. I have been clear on this. The banks can see this and it is cheaper to have a resolution scheme than play in court.


Had some clients not been able to borrow against their homes, Storm would still have utilised a margin loan. A fully legal strategy and one that the banks really don’t have anything to answer for. Therefore at best clients would have lost everything except the home. 

The recommendation to stay in the market (in fact buy more) throughout the crisis in 2008 – Storm. Not once did they discuss taking some off the table, cashing in a little bit just to give themselves more room to move and reduce the chance of a margin call even further. NOT ONCE. As I said last time, this was based on the arrogance of Cassimatis. He was too busy telling clients about “averages” and how normally markets only fall 35% and how quickly they recover on the other side.

All of this could have been avoided had Storm provided prudent advice. Even as late as the Lehmann collapse -  Give the advice, sell part to guarantee no margin calls and then get back in when markets were showing some signs of stability. 

Clients expected Storm to act in their best interests, they did not. Clients expected Storm to do whatever was needed to make sure they didn’t lost their house, they did not. Had they done so, the bank and margin call issues are a non event.

I do not have any allegiance or alliance except to my own firm. Again as mentioned I loathe margin loans and agree with McLovin that they should never have been marketed to retail investors. Mind you, the same can be said about forex trading, CFD trading and property investing. The same problem occurs, a couple of bad apples, telling the story everyone wants to hear. How many people lost money in tech stocks? How many people lost money buying a unit (or 10) on the Gold Coast? 

It is one of the great Australian examples of stupidity that people have been led to believe there is such a thing as “good debt”. No debt is good. It can be an essential in some cases (buying a home) but there is no “good debt”. 

It makes me cringe when I hear ads on TV or radio by mortgage groups telling people to pull equity out because now is a great time to buy another property. There is every chance that should we see inflation take off and interest rates on variable loans sneak up over 8% that we will see the next great investor capital tear up. We can then all discuss how irresponsible it was of the banks to lend to them as well.


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## doobsy (26 October 2011)

Judd said:


> Throughout this thread there have been claims that Storm was large a player in the financial planning world.
> 
> Was it?  Can anyone verify that allegation?  I've only been dabbling in the financial world since the mid-1990's but I never heard of this mob until it, and its clients, was on its knees.
> 
> ...




Judd

You are correct in part. It was heavy Nth Qld. He was on a serious recruiting drive looking to either licence or purchase practices across Australia. He was promising cash once the "float" happened. So principals have lost everything as well by selling to him. 

The figures you quote are also pretty accurate. As the process took them up to 6 months to go from 1st appt to getting people to sign off and get invested only about 4000 had been "stormified".


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## Frank Ainslie (26 October 2011)

Hi Doobsy,

I would ask you to try and get away from your fixation with Storm for the moment and focus on the Banks. I know it's hard but do your best.

You state that, _"The banks didn’t push this process on you, they didn’t run the smooth sales pitch outlined above, Storm did."_

Your take on much of what occurred with Storm is correct to some extent but you left out the fact that Storm had partners, namely the Banks that dealt with it who, in your opinion, _"were only some 5% to blame"_. I'll tell you just a little about your precious banks and I will then let you be the judge. Margin calls are a key issue so I'll comment on these.

In a previous posting you stated _“…the margin calls were the advisers responsibility.”_ Who told you this, the Banks? This is an assumption some banks make rather than a fact and has no foundation in law. Margin loans are contracts between Banks and their customers. Under such contracts both the lender and the borrower have certain contractual obligations to one another that cannot be denied. It should be added that “obligations” cannot be assigned to any third party unless novation occurs. It didn’t!

The ‘Goodridge v Macquarie Bank Appeal’ clarified certain points in relation to assignment transactions, especially securitisations. However, the Appeal judges did not reject the primary judge’s remarks regarding the making of margin calls and the form in which they should be made. In fact there was little in the ‘Goodridge’ case that is detrimental to our case against the Banks. Rather, it reinforces the notion that the banks have an obligation to effect margin calls. The “reasonableness” element of contract dictates that such margin calls should be made in a timely manner. The law of “custom” that exists in the market place (margin calls in 5 days) also has a marked bearing on our rights as margin loan customers to be so advised within that time-frame. 

But don’t take my word for it. I will now quote someone who should know; namely Mr. Paul Johnston who was head of Colonial Margin Lending from its inception in early 1996 until his departure from the company in 2003. Mr Johnston, who is known as the father of margin lending in Australia, advised SICAG in 2009 that he was responsible for growing the margin lending book from less than $1 million at the date of his appointment to $1.9 billion of loans. He was also responsible for the management of $918 million of lending through CBA subsidiary, Commsec. 

Mr Johnston was responsible for producing, developing and implementing the rules, procedures and protocols for the margin-lending product, in addition to sales and distribution control.  Who better then to know how it all should really work?

Mr Johnston makes the following points: 

_“An agreement entered into between CGI and Emmanuel Cassimatis in May 2007 provided for an upward movement in loan-valuation ratios exclusively for Storm clients. The agreement allowed for an increase in the buffer from 70% to 80% and from 80% to 90% for a margin call. There appears to be no evidence of any formal advice to advisers or clients of this variance. _

_The agreement was in fact not adhered to, as it talks about moving the buffer from 70% to 80% and the margin call from 80% to 90% for certain Storm funds, whereas in fact the real ratios sat somewhere in the low 80's for buffer and low to mid 90's for margin call. 

From a risk management viewpoint, it seems an unnecessary risk to take, given the volume of business generated ... also if this was something I would do it would have happened back in 1996 so as to give me a superior competitive edge in the market. _

_*The Loan agreement is and always has been between the client and the borrower, not the agent - in this case, Storm.*_ 

_After consultation with a former IT colleague at the bank, I believe a margin loan facility could not go past 100%. If it did, it would be the bank's problem, not the borrower's.” _

*(Some went past 130%)*

_“The Lending parameters were set at 66%, giving the bank, the adviser and the client a level of comfort from a risk management stand point. To take the buffer to the low 80s and margin call to low to mid 90s is very risky. _

*At all times during my tenure as head of margin lending, margin call notices were sent automatically to clients, in writing, with advisers copied in for reference.*_ If a margin call was not rectified within five days I felt it was my right and duty to sell the client up (unless evidence was supplied that positive action was being taken to meet the margin call to protect the client and the bank's position. I believe I (on behalf of the bank) was liable for any shortfall if action wasn't taken at the end of five days or 24 hours if direct shares were involved. The five-day window was a generous tlme-frame compared to other margin lenders at the time. “_

*(Macquarie took 3 to 4 weeks and the CBA 10 to 11 weeks and even then, many margin calls were never made – customers’ share portfolios were simply sold out from under them!)*

_“The margin call was always automatically generated by a computer system used by the bank called original MLS, now known as 'EMPIRE'. A margin call notice could only be stopped through manual intervention. _

_I was instrumental in the writing of clause 4.2 of the terms and conditions which talks about 'you' receiving a margin call. My knowledge and practical application of that clause is that the bank contact the client in writing, then the client (in consultation with the adviser) rectifies the position. Again, I should stress that if the margin call wasn't fixed in the five-day period, I immediately sold the client down to protect BOTH parties (unless evidence was supplied that positive action was being taken to get the call fixed).” [End]”_

It should also be added that documents have come to light during the discovery process that will show that margin calls were issued by CGI to other dealer groups in line with standard practice. Therefore, its practice in the case of Storm whereby it allowed Storm to set the parameters was outside the norm and not standard practice at all. This will equally apply to Macquarie Bank who was also in bed with Storm.

The Banks and some on this forum seem to be confused at times when it comes to regulatory obligations and contractual obligations. They are not one and the same! You have regulatory obligations under various Acts that the Banks need to fulfil in relation to Statute or Corporate Law. The Banks also have contractual obligations to their customers that they need to fulfil under Commercial Law. The Banks have failed on both counts! 

I can tell you now that many of the misconceptions about the way Banks do business, and the assumptions they make in so doing will be challenged when this matter is finally heard in the Courts. Precedents will then be set that the Banks will not be able to wriggle out of. That is one reason the Banks do not want this to go all the way!

You have said that you only equate 5% of the blame to the Banks. Why, if the Banks are only 5% responsible, did Ralph Norris, the former CEO of the CBA admit partial liability, and that Bank subsequently pay out millions of dollars under its ‘resolution scheme’? Do you seriously believe that if the CBA had a leg to stand on (being as you claim only 5% to blame) that Bank would have settled? But then, I forgot, Banks are noted for their magnanimity. 

If you or anyone else still wants to defend these banks after considering what I have just stated here, feel free. I should remind you all though that *both the Banks and Storm set these parameters* and omitted to inform their customers about them. This is known as deception in my book by all parties concerned. But then again maybe you are not reading the same book? It’s entitled, “Ethical Banking Practice”. What’s the name of yours? 

Doobsy! You seem to be obsessed with Storm's role in all this and you also seem to have a blind spot where the banks are concerned.  I have only discussed margin calls which sent us all into free fall because none were made. If you still aren't convinced, I'll also elaborate on the housing loans aspect for you! 

Has the penny dropped yet! Storm and the Banks entered into secret agreements with one another. Why do you think ASIC is now charging them with UMIS? The Banks were with Storm all the way up and all the way down. “Bonking” rather than Banking is a more fitting description for what occurred between them.

Do you still believe now that the Banks were only 5% at fault? If you do, you are either a very hard man to please or related to a banker!


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## Judd (26 October 2011)

Frank Ainslie said:


> But don’t take my word for it. I will now quote someone who should know; namely Mr. Paul Johnston who was head of Colonial Margin Lending from its inception in early 1996 until his departure from the company in 2003. Mr Johnston, who is known as the father of margin lending in Australia, ......




A slight historical correction, Frank.

Margin lending was actually introduced to Australia by Chris Corrigan (he of the waterfront dispute fame) when he was with Bankers Trust Australia in the 1970's.  So Mr Corrigan is the father of margin lending in Australia and Mr Johnston is therefore....don't know, maybe the son?


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## Frank Ainslie (26 October 2011)

Hi Doobsy,

I got Helen (Janus) to send you the same posting to prove a point. When someone represents themselves as being one thing and they turn out to be something entirely different, even the best among us can be fooled. If you had done your homework before replying you would have linked us together. Enough articles have been written about us and enough information exists on the Internet to make the connection. I gave you a further clue with the name Janus but you also failed to pick up on this. You made an assumption which just turned out to be the wrong one! That’s just how easy it is to deceive. It hurts when you been misled, doesn’t it? How do you think we feel?

In much the same way, Storm represented a financial plan to us and then adopted one that was nothing like the one we agreed to! That still hurts! However, that’s firm’s duplicity is now beyond dispute. Your attempts to reinforce that fact are unnecessary.

Your response to Helen is a cogent one but again you have made some assumptions.

_“My view is the banks should wear any losses above the 90% margin call mark for not acting as they should have.”_

We didn’t agree to a 90% margin call. The Banks and Storm decided this between them and didn’t notify us. How could we agree to something that was not disclosed to us?

_”When clients we took over got margin calls, they expected us to be the link between them and the provider. That is what they were paying us for.”_

The link, yes, but that does not relieve the banks from making margin calls directly to their margin loan customers. This may be a common practice among financial advisers now but it leaves them liable if litigation arises. Mr. Johnston’s comments outline the Bank’s position fully in this regard. 

_”… with markets in freefall through that period, 3 days meant another 10-15% drop in markets which in a geared sense means it is all over.”_

Banks cannot assign their responsibilities to financial advisers. In a volatile market they should be keeping their margin loan customers fully informed. Advising the financial advisers involved should be a secondary consideration. The Banks did it for everyone else, so they have no excuse where Storm customers are concerned.

_“With all this moving and shaking from Storm, the providers sat on their hands waiting to see if it would pan out. By the time they acted the clients were past destroyed.”_

That’s no excuse whatsoever and the Courts will also see it this way. We are not talking about a week or two here, we are talking about months. Banks cannot offset their responsibilities by saying, _“We were waiting for Storm to give us the word!” _They had contractual obligations to their customers, not to Storm who were not a party to the margin loan contracts.

What the Banks and Storm were concocting up between them at the time has nothing to do with anything. The Banks failed to make margin calls within a reasonable time and in most cases, never did.

_“Clients expected Storm to act in their best interests, they did not.” _No! Clients expected *Storm and the Banks* to act in their best interest, they did not!

The reason why neither the Banks or Storm acted in the clients’ best interests was because the Banks and Storm had secret agreements that benefited them and not the customers. The conditions of those agreements breached our agreements with the Banks because it altered them. This will all come out in Court in due course. 

If this were a normal set of circumstances where the Banks had done everything aboveboard, we wouldn’t be taking action against them and neither would ASIC.


----------



## Judd (26 October 2011)

Frank Ainslie said:


> I got Helen (Janus) to send you the same posting to prove a point. When someone represents themselves as being one thing and they turn out to be something entirely different, even the best among us can be fooled. If you had done your homework before replying you would have linked us together. Enough articles have been written about us and enough information exists on the Internet to make the connection. I gave you a further clue with the name Janus but you also failed to pick up on this. You made an assumption which just turned out to be the wrong one! That’s just how easy it is to deceive. It hurts when you been misled, doesn’t it? How do you think we feel?.....




Hmm, fascinating.  On one hand, an individual who feels grieved about being misled and yet delights in doing the same.


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## SJG1974 (26 October 2011)

Frank,

Can I ask what you thought you were going to get for your 7% up front fees?

Noone has been able to answer this yet.

I can't for the life of me understand how or why someone would pay so much for something so basic?

How did they sell it to you?  Surely it was more than being able to piss in their 5 star toilet, or enjoy one of their world famour cappuccinos.  Was it the lure of working with a financial guru in emmanuel Cassimatis that tipped the scales.

I have read PJC submission where clients paid in excess of $100,000 up front.  What did they sell you????


----------



## doobsy (26 October 2011)

OK, my last post since I feel like a beer.

Assuming a client could cope with the home and margin loan (still working, plenty of assets, whatever) and using my example:

Super - $400,000 - told to withdraw
Home worth $500,000 - withdraw $400,000 in equity.

Invest that $800,000 and then apply for a margin loan of $800,000. 

Result $1,600,000 at a 50% LVR.

2008 happens. Investment falls to $1,000,000 (37.5% fall) and the bank does the right thing, triggers the margin call like they should.

RESULT: $1,000,000 cash, margin loan paid out for $800,000 = NET $200,000. 

You still owe $400,000 on the property.

You are still screwed. Storm screwed you. Because the banks didn't trigger the margin call correctly you are just more screwed. Finding the banks liable of doing something wrong the best you can hope for is to be treated the same as a normal margin loan customer. Still Screwed.


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## Judd (26 October 2011)

SJG1974 said:


> .........7% up front fees..........




doobsy

One additional factor in the equation which you may have overlooked.

As soon as I first learnt of the Storm model on this forum, that is the aspect which struck me with the Wow! factor.

What a jaw dropper!  Borrow $100k against the house, borrow another $100k on margin, take a commission of $14k, leave the client with $186k invested but with loans of $200k on which interest is payable.  I was, and still am, stunned by it all.

Enjoy the beer.


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## Frank Ainslie (26 October 2011)

AGREEMENT BETWEEN COLONIAL GEARED INVESTMENTS &  STORM FINANCIAL P/L

*(Not relayed to the Bank's margin loan customers even though the margin loan contracts were between that Bank and its Storm customers, and not Storm)*

_18 May 2007

Mr Emmanuel Cassimatis 
Storm financial Pty Ltd 
Storm Financial Building 
382-432 Sturt Street
Townsville QLD 4810

Attention; Mr Emmanuel Cassimatis

Dear Emmanuel

Re: Margin Lending for clients of Storm Financial

Following your discussions with Colonial Geared Investments we are pleased to provide the following terms for Margin Lending facilities for your clients.

Subject to the expectations set out below, we will allocate a global LVR of 80% for those of your clients who invest in the following funds:

Chgr Australian Broadmarket Indexed Trust	HOW0021 AU
Chgr Australian Industrials Indexed Trust	HOW0022AU
Chgr Australian Resources Indexed Trust	HOW0023AU
Chgr Australian Technology Indexed Trust	HOW0024AU
CFS SFA Sharemarket Index Fund	FSF0160AU
CFS SFA Industrials Index Fund	FSF0161AU
CFS SFA Resources Index Fund	FSFO I 62AU
CFS SFA Technology Index Fund	CMIOII12AU
WC-Vanguard Australian Share, Index Fund	MLC0014AU
Barclays Australian Equity Index Fund	BGL0034AU

The expectations are:

Storm Financial continues to use the Funds listed to develop diversified investments that are expected to mimic the returns obtained through investment in the overall ASX 300 accumulation index. Funds invested an behalf of clients are apportioned amongst the funds in an attempt to produce an overall return that both outperforms and exhibits lower earnings volatility when compared with the reference index.

In that connection, a client's weighting in the Resources sector is not to exceed the greater of 130% of the weighting of Resources, as defined by Storm's Australian Broadmarket Index, or the current overall Storm portfolio technology weighting.

For example, if the appropriate market weighting is 22%, then the maximum client portfolio weighting is to be set at 28.6%

Also, a client's weighting in the Technology sector is not to exceed the greater of 300"/o of the weighting of Technology, as defined by Storm's Australian Broadmarket Index, or the current overall Storm portfolio technology weighting . For example if the appropriate market weighting is 2%, then the maximum client portfolio weighting is to be set at 6%.

As each fund may attract a different LVR on a stand alone basis from Colonial Geared Investments, Storm Financial must convey these individual LVR's to the client and advise the client that a departure from Storm's advised strategy will lead to a rebalancing of their facilities with Colonial Geared Investments (proper legal name)

·	Additionally, other Storm recommended investment funds from time to time may be given the same maximum LVR and buffer for client, subject to prior approval by Colonial Geared Investments.

·	We would also require that Storm Financial and Colonial Geared Investments meet monthly to ensure that the agreed approach, including observance of expectations is being maintained, and to facilitate any agreed changes which may be required in response to changing conditions. Naturally an extraordinary meeting can be called at any time by either party. Details of these meetings will be settled by both parties. We would further require that Storm Financial provide to Colonial Geared Investments before these meetings, acceptable reporting that confirms observance of these expectations. We will include a periodic update on trends in market volatility compared with our methodology.

·	Colonial Geared Investments will maintain the 80% LVR and 10% buffer for existing business retained or newly written in respect of specific clients provided these expectations are met and Colonial assessment of the appropriateness of these loan conditions persist.

·	Despite our allocation of a global LVR of 80% to your clients on the basis of our expectations being met, as set out above, nothing in this letter modifies or varies the obligation of any client borrower under clause 3.2 of the margin loan to pay us the amount owing under the margin loan if that client borrower is either in default or we send that client borrower a 5 day notice requiring payment of the amount owing.

·	Storm Financial will not gear a client above 65%. Should a client find themselves at LVR of 65% or above, then any additional gearing will only occur if the client's buffer increases.

·	In the unlikely event of a margin call, Colonial Geared Investments and Storm Financial will work in partnership to clear the margin call. Note however that Colonial Geared Investments reserves its rights under its Margin Lending Terms and Conditions.
·	Acceptable cash securities to have an LVR of 100%

Yours faithfully,  

Craig Keary - General Manager - Geared Investments_

What this agreement did in effect was to create confusion among both parties as to their respective responsibilities rather than clarify them. At the end of 2008 both parties sat on their hands whilst we burned. One waited for the other to act, and we now all know what happened next! 

I expect this document to figure prominently in ASIC's assertion that Storm and the CBA were effectively operating an unregistered managed investment scheme.


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## SJG1974 (26 October 2011)

Judd said:


> doobsy
> 
> One additional factor in the equation which you may have overlooked.
> 
> ...




Judd thats the bit I can't get over.  And still no Storm client is prepared to explain just what it was they were getting to justify these ridiculous fees.

And then there was their "system" whereby they were to ride the property bubble up, suggest to clients that nows the time to borrow more against the increased value of the house and then...you guessed it...another 7% fee in the pocket for Storm for this "complex financial advice".

It stinks.


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## SJG1974 (26 October 2011)

doobsy said:


> OK, my last post since I feel like a beer.
> 
> Assuming a client could cope with the home and margin loan (still working, plenty of assets, whatever) and using my example:
> 
> ...




Exactly. Storm screwed them well before the margin call fiasco occurred.


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## Julia (26 October 2011)

> You are still screwed. Storm screwed you. Because the banks didn't trigger the margin call correctly you are just more screwed. Finding the banks liable of doing something wrong the best you can hope for is to be treated the same as a normal margin loan customer. Still Screwed.






SJG1974 said:


> Exactly. Storm screwed them well before the margin call fiasco occurred.




+1.  Well described.


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## bunyip (26 October 2011)

Frank Ainslie said:


> What this agreement did in effect was to create confusion among both parties as to their respective responsibilities rather than clarify them._* At the end of 2008 both parties sat on their hands whilst we burned.*_
> 
> .




 Frank

You  forget to mention that another party, namely YOU, also sat on your hands while you burned. 
It seems to me that you, as the owner of the business, should have stepped in and given specific instructions to your manager to take immediate defensive action once it was clear that your business was hemorrhaging badly. This should have been done well before your investment dropped to margin call level, because by the time your account went into margin call (even if you’d received the margin call in a timely manner) your losses at that stage would have been huge due to the magnifying effect of your high level of gearing.
Isn’t that what a prudent and astute business owner would do? After all, an astute business owner doesn’t just sit on his hands and do nothing while his business goes down the gurgler – does he Frank?? 
And you _have_, on a number of occasions as I recall, stated that you were astute.


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## doobsy (27 October 2011)

Frank

Personally I think the increase in borrowing limit will be hard to get over the line in court. The reasons for this are:

1. Margin Lenders change the borrowing limits on individual stocks and managed funds all the time. Some stocks might start with a 50% borrowing limit and then as they grow / mature the margin lender might feel comfortable increasing this to 60% or 70%. That doesn't mean you have to take up to that limit, it is simply a maximum. Index funds have traditionally been 80%, in the case of the sub indexes storm flogged apparently 90% was ok.

2. I have a feeling it would have been advised through your margin loan statement. You wanted them to deal directly with you, the statement was a way of doing this. Most ML statements I have seen have the client's current LVR, the base LVR, the margin call LVR and also the borrowing limits per investment.

If on your statement it showed the borrowing limit (which it would have) and also showed you on a regular (monthly, quarterly) basis what your base, current and margin call LVR was I am not sure any judge will say that you were uninformed.

Even if you argue again that you should have not been getting special treatment, the best I can see is the judge looks at it and says "Yup, should have been an 80% LVR not a 90% LVR" This won't fix anything because we saw losses in the market that would have still triggered a margin call. Just means clients would have been less screwed.


I think you are barking up the wrong tree on that one sorry.


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## bunyip (27 October 2011)

Harleyquin said:


> Thanks DoK life is still good no matter what happens and we should all enjoy it.  This has proved something which we knew all along anyway and that is that our families are far more important than any wealth and if wealth is measured by family and their support, I'll always be 'wealthy'.
> 
> Julia you and I think very differently in some areas however we'll just have to agree to disagree on some of these issues.  I admire your investment skills however and wish I had them.  Maybe some day I'll revisit the site you suggested a while back.
> 
> Bunyip the book I was talking about in a previous post is 'The Desert Column' by Ion Idriess, hope you enjoy it.




Thanks HQ, hopefully my local library will have the book, or perhaps be able to source it from another library for me, which they’ve kindly done for me a few times in the past.

And may I endorse what others have said about the grace and dignity you’ve shown on this forum. To still have a positive outlook on life after what you’ve been through should be an inspiration to all of us.


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## Harleyquin (27 October 2011)

Frank I think it's important that we don't let whoever created this storm to 'get away with it'.  I enjoyed reading all of your posts and agree with you one hundred percent.  The word 'assumptions' keeps coming to mind and understandable that other forum members have to assume what they know as they didn't walk in our shoes.

I'm trying to think how to explain storms fees and I'm struggling so here goes, hope I succeed.  A storm advisors spiel would make far more sense of this than I possibly can.  Let me say firstly, that in hindsight, I agree with you, storms fees were outrageous.

At the time the advisor explained their fee structure in such a way that it made sense to us.  I asked a couple who we know with a financial plan and they said that they paid ten thousand dollars a year, another fellow we know said that he paid somewhere between two and three thousand a year.  I have no idea if this is 'normal' or not.  

With storm their spiel was that this was a one off cost for the life of the plan, and they quickly rattled off lots of figures to support this.  At the time it certainly made good sense to us.  There was a lot that they didn't tell us and granted we didn't ask, our fault, we accepted their word for this.  

We're since finding  out about extra fees, trailing commissions etc which were obviously and for 'good reason' as far as they were concerned, never mentioned.  An expensive lesson learned and I'm sorry but I really don't know how to explain it any better than this.  No doubt it was part of the 'con', lets hope that all of this comes out in the courts.

Documents will prove that storm and the major banks were allies in an unregistered scheme.  I'm not prepared to comment further on this at this stage however.


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## Frank Ainslie (27 October 2011)

*The CBA’s intimate relationship with Storm*

An extract from a submission made to the Parliamentary Joint Committee in 2009  by a former Storm employee:

_• We currently have a CBA Better Business Loan provided to us by the CBA 
prior to the proposed Storm Financial float. 

• It was offered to some Storm employees after a CBA bank representative in 
Townsville saw an opportunity for Storm employees to raise personal capital 
for the then pending float of the company. 

• They didn't want the money back when the float didn't fly - we were told we 
could use it however we pleased. 

• This is a $ lOOK unsecured Business Loan with a 3 year interest only period. 

• The loan structure was not made available to the open public. 

• It was also offered to Storm employees by the CBA as a sweetener to Storm 
Financial in an attempt to win over their total corporate lending facility from 
another banking competitor. 

• Storm's corporate banking business was always with Westpac previously. 

• I am aware that other Storm employees were offered and accepted the same 
loan structure. 

• Remember, these were business loans that the CBA provided, not home / 
personal loans. You would expect the bank would want unsecured money 
back pretty quickly under normal circumstances. It didn't seem to concern 
them greatly - the relationship with Storm was solid. 

• I have confirmed that special approval from CBA Brisbane / Sydney would be 
required for an unsecured business loan for the lesser amount of $20K. 

• Approval of these loans would also have required special approval/policy 
from the bank's credit department. 

• $1OOK unsecured business loans to wage earners just don't occur out there in 
the corporate world. 

• I was brushed by a Townsville CBA representative to another in Sydney. To 
her, I had murdered someone. I expected as much. Being a former Storm 
employee hasn't done me any favours. 

• These loans would have only been offered because of the CBA's close and 
vested interest in Storm Financial. 

• *They knew about the float, were very acquainted with Storm's business model 
and Storm's profitability*. 

• They would have approved these loans as a 'special matter'. 

• Put simply, it was a VAS loan in disguise. 

As a wage earner or self-employed, try going into a bank and requesting a $IOOK 
unsecured personal loan with a 3 year interest only period attached. You will still 
here them laughing on your way out, as the electronic doors close behind you. _

This person also states:

_"This issue of negative equity on some Storm client portfolios is confusing at the very least. If all margin lending products around the country failed their investors at the height of market volatility in late 2008, then all advisory firms who recommended the gearing product predominantly in their client portfolios and who practiced the same strategy would now be in, or close to administration also. I know of no other clients external to Storm Financial who have even mentioned the words "negative equity"*and this is for one simple reason - if their buffers were being breached, then regardless of the market turmoil of the day, "their" margin lending provider acted appropriately on client portfolios and "their" margin lending product served the purpose for which it was intended. It's astounding that only Storm Financial clients had issues with negative equity and no other."_

This same person sold his existing share in a Cairns financial planning firm to Storm in May 2007 (the same month as the CBA/Storm agreement oddly enough) and joined Storm as a financial advisor. Indeed, many such as Ron Jehlich did the same. People are now calling us gullible. Yet, there were many financial advisors working for Storm that also had money invested using the Storm model! If they, supposedly trained financial advisors couldn't see the dangers inherent in the system, how the heck could anyone expect us to?


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## SJG1974 (27 October 2011)

Frank Ainslie said:


> "It's astounding that only Storm Financial clients had issues with negative equity and no other."




It is astounding.  And the fact that this was the case would suggest the problem was with Storm and not the bank would it not??? 

With CBAs systems and processes seemingly functioning properly with all of the other advisers who used them, why was the data that Storm got "scrambled" as Manny would say, yet this wasn't a problem elsewhere? Why were clients of other advice firms receiving margin calls, yet Storm clients werent? Why were other people I know told by their adviser to lighten their share load prior to receiving a margin call, to give them some added breathing space, but not clients of Storm?

Was it to do with the special relationship they had, or was it because Manny and his salesmen decided to get clients to hang on for as long as possible and hope like hell a quick market recovery would save their bacon and cover up the shoddy advice and service they had provided their clients? 

Storm advisers must have been blind not to have known that their clients would be approaching margin call territory when the market hit the skids in late 2011, scrambled data or not.  They would have known how devastating a margin call would be to its clients, particularly given the increased LVRs on their badged funds.  What stopped them from acting sooner to prevent this devastation? They didn't have to wait until a margin call to tell clients to cash up.  

Oh thats right, they don't receive management fees if your money is in cash, and they couldn't afford that with new business and their 7% up front fees drying up.

Could it be that Manny and his crew of con men are trying to defelct blame away from themselves and onto the bank?

No, that couldn't be it.  Manny is an honest man, he wouldn't do that to save his own neck. Remember, he is on a crusade to uncover the truth, although he seems to have been very quiet lately.


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## bunyip (27 October 2011)

Doobsy

If a prospective client came to you and said he had two million dollars that he wanted to invest in index funds....I’m guessing that in the first instance you’d advise him against sinking the entire amount into the same investment. But if he was insistent that he only wanted index funds, could you organize that business on his behalf?
If so, what would your approximate charges be?


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## doobsy (27 October 2011)

bunyip said:


> Doobsy
> 
> If a prospective client came to you and said he had two million dollars that he wanted to invest in index funds....I’m guessing that in the first instance you’d advise him against sinking the entire amount into the same investment. But if he was insistent that he only wanted index funds, could you organize that business on his behalf?
> If so, what would your approximate charges be?




Bunyip

Yes, organising index funds would be simple. Any number or providers, using either direct or probably cheaper to use a platform and access wholesale funds.

Our fee would depend on the service. 

To prepare and implement the advice - somewhere around $1500 + GST which covers our time completing the fact finding, writing the Statement of Advice etc.

If the client was wanting us to provide our full service then the annual fee would be somewhere between $7-9,000. If the client wanted less than the full service then the fee drops to somewhere around $5,000. The level of service depends on life stage, level of technical and strategic advice we expect to give over time etc. For instance a retiree, fully set up and just wants us to invest and monitor things doesn't need to pay high fees. Index funds don't require research on our part, there is no manager risk etc so it is pretty simple. 

Even at $9,000, that is only 0.45%pa. It would take us a long time to get to $140,000 (7% upfront) especially if you take into account the fact they get it immediately (we would take 15 years).


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## Judd (27 October 2011)

Or the client could simply use Exchange Traded Funds, such as STW, IOO, IEM and the like, just pay the relevant brokerage and be done with it.


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## doobsy (27 October 2011)

Judd said:


> Or the client could simply use Exchange Traded Funds, such as STW, IOO, IEM and the like, just pay the relevant brokerage and be done with it.




Yep

But they don't get me. Like I said, depends what they want. Cost is the same. ETF's have an internal cost inline with the MER of the managed fund version.


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## bunyip (27 October 2011)

doobsy said:


> Bunyip
> 
> Yes, organising index funds would be simple. Any number or providers, using either direct or probably cheaper to use a platform and access wholesale funds.
> 
> ...




Fair enough. 
Why I asked is that I’m pretty sure Frank said he paid Storm 145 grand in fees. So I’m guessing that he would have invested a little over $2 million, minus the 145 grand that Storm whacked him.
Sounds downright criminal doesn’t it, to charge someone so much money compared to what opposition firms would have charged him for a similar service!
No wonder Cassamatis made Queensland's top 100 rich list with an estimated worth of more than 400 million dollars, before it all came crashing down around him.
You wonder why someone with that kind of wealth didn’t simply take his chips off the table and walk away, instead of constantly expanding and borrowing to the hilt in an effort to rake in even more loot. Greed and ego are irresistible forces for some people.


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## doobsy (27 October 2011)

bunyip said:


> Fair enough.
> Why I asked is that I’m pretty sure Frank said he paid Storm 145 grand in fees. So I’m guessing that he would have invested a little over $2 million, minus the 145 grand that Storm whacked him.
> Sounds downright criminal doesn’t it, to charge someone so much money compared to what opposition firms would have charged him for a similar service!
> No wonder Cassamatis made Queensland's top 100 rich list with an estimated worth of more than 400 million dollars, before it all came crashing down around him.
> You wonder why someone with that kind of wealth didn’t simply take his chips off the table and walk away, instead of constantly expanding and borrowing to the hilt in an effort to rake in even more loot. Greed and ego are irresistible forces for some people.




Yep

Mind you the valuation on him was based on the share float getting away at similar prices and PE ratios to other listed planning firms like Count. 

Dig up that list, there were a number in that year that were sitting on houses of cards with way too much debt involved and no longer exist. Cassimatis - gone, Hedley - gone, Jattke - gone.


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## Igetit (27 October 2011)

Hi Doobsy, 

I have a question regarding the example you gave of how one borrows money against an asset, then takes out a margin loan using this borrowing as "equity" and how then everything goes south in the event of a margin loan. 

Just say, that a person had done all of the above in June of 2008 and prepaid the interest on their Margin Loan. Could not, in the event of a margin call, the person simply convert their portfolio to cash and place it in the CASH FUND that all Margin Lenders have associated with their product? Then sit it out until the market begins to recover and repatriate the money progressively back into the market - maintaining appropriate buffers as they go.

Its just, the example you give where the margin loan is paid out, has the effect of crytstallizing all the losses that have occurred during a market downturn. In which case, I agree, you would be screwed. But with the interest prepaid on your margin loan it is your money to do with as you like until June the following year. Why would you recommend fully paying down the margin loan. Especially given that a margin call at 90% would leave you in a cash positive position and the money could be placed in a Cash Fund (making 4% I think in 2008) - improving your buffers by the day.


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## Igetit (27 October 2011)

Hi SJG - 1974,

Read your thoughts on the likely scenario with the failure of the Banks to make margin calls to Storm Clients when every other client of every other financial planning institution did receive a margin call. 

Good summary. Spot on. But, how would that have worked? Clearly the Banks systems were working because all the other clients of all the other planning firms got their calls as per the Margin Loan Agreement Terms and Conditions. 

Surely Manny, all powerful though he was, didn't have the authority to instruct the Banks not to make margin calls to his clients. I mean the Margin Loan Agreements were between the client and the BANK, the BANK, the BANK - did I mention the Bank. The name Storm Financial is not mentioned in any of the Margin Loan Agreements related to this matter that I have seen. 

So that got me thinking. Manny must have had to ask the Bank for a bit of slack so he could keep his clients in "the game" and ensure the continued flow of the all important fees - as you correctly point out. So the Bank would have had to say : "Ummm, Oh OK Manny old mate. After all you have been great for us over the years. Sending us all your business. Generating all those loans for us and all the wonderful interest on them that we've been feasting on. Sure we will "let it ride" for a while with the Margin Calls - no worries mate!"

However, if as a result of this agreed "way forward" the clients of the BANK, the BANK, the BANK - did I mention the BANK - were NOT advised by the BANK, the BANK, the BANK of this wonderful new arrangement and as a result of this failure to advise (BY THE BANK etc, etc - you're getting the idea) their Margin Loans not only breached Margin Call but went into this exciting new land of NEGATIVE EQUITY - and as a result of this the client suffered losses and DAMAGES - I am not sure how easily a defensible position this will be for the BANK. Indeed, the Court may even say - "dear Bank, your agreement was with the client NOT Storm; if you fundamentally changed the manner in which you were going to deal with a client's Margin Loan and not advise them of this fact and give them an opportunity to decline to be party to your intended change - and that action resulted in DAMAGE to the client - well, you might be guilty of - what's that word now.....

Just another slant on the same issue. Any thoughts? I may be on to something you know. Indeed, there may be all manner of documentation floating around out there that strongly points to this being the case.


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## bunyip (27 October 2011)

doobsy said:


> Yep
> 
> Mind you the valuation on him was based on the share float getting away at similar prices and PE ratios to other listed planning firms like Count.
> 
> Dig up that list, there were a number in that year that were sitting on houses of cards with way too much debt involved and no longer exist. Cassimatis - gone, Hedley - gone, Jattke - gone.



I do sometimes wonder at the accuracy of those figures I see published in the rich 100 list about who's worth how much money. I don't see how the publishers of the figures could know how much money is owed by whom. And in the absence of such information, surely it's difficult to make an accurate assessment of someone's true net worth.


----------



## doobsy (27 October 2011)

Igetit said:


> Hi Doobsy,
> 
> I have a question regarding the example you gave of how one borrows money against an asset, then takes out a margin loan using this borrowing as "equity" and how then everything goes south in the event of a margin loan.
> 
> ...




Igetit

Hmm do I smell an ex storm employee?

Your suggestion is pretty much word for word what clients were being told would happen when they were all cashed out. So lets look into that strategy.

Lets be generous and take the money to cash at the 80% mark (70% borrowing limit = 80% to trigger a margin call) via the margin call but leave the accounts open. Lets be generous and say it happened on 2 July, just after prepaying the interest so we have a full 12 months.

To invest back into the market after a margin call you need to take the LVR back below the base LVR, in this case 70%.

You are correct the $1,000,000 would earn 4%. In the following 12 months that = $40,000

So now the maths are: Loan ($800,000) / Value (1,040,000) = 76.92%. Sorry we can’t invest.

Lets be extra generous and say they find some way to get back to 70%($1,142,857). Can we invest then? Not really. The margin loan will lend against cash to 100%. It will only lend against the index fund at 80%.

So lets drop $100K into the market. The margin lender will only value that at $80,000 which means we are at $800,000 /($1042,857 + $80,000) = 71.24% and are back in the buffer. 

The more you try to get back in the worse it gets and the smaller a fall you need before you are back at a margin call.

Even if you are lucky enough to pick the market bottom as your day to get back in, we are up about 35%. And lets say you were brave enough to drop in $500,000 in on that day (taking the LVR back to 76.7%). That is now $675,000. Add that to your cash of $642,857 and you get $1,317,857 an LVR or 67.6%. Great, back in the game. Except we still owe $400,000 on the house. So we have turned the $400,000 drawn from super into $117,857.

To get back to even we need our $1,142,857 to turn back into $1,600,000. This is a run of 40%, on $500,000 invested a run of 80%. An 80% run is 5760 points on the market. Pretty sure that didn’t happen in your 12 month window before the next lot of interest is charged. Add the $100K fee and the Prepaid interest on $1.2M of $140,000 to our breakeven and it gets worse.

This is why the product should never have been sold to retail investors.....if the planners selling it don’t get it how the hell is the client going to work it out.

Still screwed.


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## Julia (27 October 2011)

doobsy said:


> Yep
> 
> But they don't get me.


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## Judd (27 October 2011)

doobsy said:


> ..Your suggestion is pretty much word for word what clients were being told would happen when they were all cashed out. So lets look into that strategy.
> 
> Still screwed.




If my memory has not been totally destroyed by three glasses of red, the difficulty of the hypothetical scenario proposed by Igetit is that, much earlier in this thread, Storm clients stated that when requesting to be cashed out, were informed by Storm staff that although the staff had been cashed out they were told not to cash out the client.

Pretty hard to implement the "Igetit arrangement" when the adviser refuses to follow the clients instructions.

And, Yep, they may not be for everybody but on the upside at least I have an additional $4 to $9k pa for investment purposes.  Divvies rule, KO?


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## Igetit (28 October 2011)

Hi Doobsy, 

Thanks for that reply. 

But, just say for example, the client had $647,000 cash reserves; a second home worth 1 million dollars (not borrowed against) and had an income of 2.4million AUD gross in the financial year 2008-09.

Could that person have remained in the market? Or would he still be screwed also?

Not all Storm clients were retirees who had dipped into their Superannuation. I know you know that. Some were quite well heeled; however, failed to receive a margin call.


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## bunyip (28 October 2011)

Igetit said:


> Hi Doobsy,
> 
> Thanks for that reply.
> 
> ...




If some Storm clients were in fact as well-heeled as the one you describe above, then why the hell would they get involved in a high risky strategy such as Storm proposed? Surely greed comes into play in that situation.

If they were smart and capable enough to get themselves into that sort of financial position then why would they leave all their brains and ability behind when they went to visit the Storm office?
I just don’t get it....wealthy people don’t become wealthy by being gullible or imprudent or naÃ¯ve or careless, or by accepting everything they’re told at face value.  Most of them don’t become wealthy by taking crazy risks either. They’re usually very astute and switched on – they could never have become wealthy if they weren’t.
So how come they stopped being astute and switched on once Storm got hold of them?


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## doobsy (28 October 2011)

Igetit said:


> Hi Doobsy,
> 
> Thanks for that reply.
> 
> ...




OK, on the new hypothetical, then yes they could stay in the market and be trying to recover their losses. Long way to go because of costs along the way but completely plausible. When the storm fiasco hit and the margin lenders sold everyone out after it was decided the borrowing ratio on the badged index funds would be taken from 80% to 0%, there was nothing stopping clients investing straight back into another non storm index fund the next day. I have seen cases where this happened.

My point throughout this was the fact that the Storm advice was seriously flawed, did not take into account the chance markets would/could drop by the amounts they did and therefore put clients in this position. If they had borrowed against the house and taken out the margin loan but only geared the margin loan to 25% we wouldn't have the forum because everyone would still be fully invested. Their modelling was crap and based on assumptions from a 25 year bull market. Surely if you are recommending a model that involves double gearing you put your safety net in place based on the worst corrections ever, not the "average correction over the past 25 years" (best 25 years ever).

That aside we first hit this level on the market in late 2005. That is 7 years of no growth for anyone that invested around then. Anyone who borrowed then has the interest costs - tax savings to add to their cost base. That doesn't sound like much of a strategy for making money to me. Assumptions on average growth in markets are dangerous things. The poor buggers that got in October 2007 and are lucky enough to still be in the market might be looking at 10+ years before they see any growth.

The other point I would like to note is that Storm kept topping people up. This can only be seen as a fee grab. If you start someone at the 50% gearing ratio and the market runs 25%, why not let the LVR drop? Why take that as an automatic to borrow more? Possibly plenty of clients who invested with them prior to probably 2006 would not have received a margin call if they got in when markets were only 5000 points, ran it up but didn't "step up" and instead let their LVR dop to 40% or lower. They would not have had the problem when it ran back down. Again, this was a storm strategy and a fee grab.


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## Judd (28 October 2011)

Harleyquin said:


> Frank I think it's important that we don't let whoever created this storm to 'get away with it'.  I enjoyed reading all of your posts and agree with you one hundred percent.  The word 'assumptions' keeps coming to mind and understandable that other forum members have to assume what they know as they didn't walk in our shoes.
> 
> I'm trying to think how to explain storms fees and I'm struggling so here goes, hope I succeed.  A storm advisors spiel would make far more sense of this than I possibly can.  Let me say firstly, that in hindsight, I agree with you, storms fees were outrageous.
> 
> ...




Harleyquin,

Thank you for trying to explain this issue from your point of view.  The sales pitch by Storm must have been very, very slick to gloss over the position that quite a number of its clients were entering the sharemarket with fewer funds than the amount in loans supporting that equity yet the adviser was pocketing a nice not-so-little sum at zero risk.  I still have trouble understanding how that was sold to clients.

While none of this impacts on me either emotionally or financially, I would not wish the situation on my best enemy or my worst friend.

All the best.


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## Igetit (28 October 2011)

Hi Doobsy, 

Igetit!!

Agree with your observations. You see with keen eyes both deep and far. Except for the bit about me "smelling like a storm adviser."

I don't smell at all actually. A little distressed about the Bank not providing margin calls to their Storm clients because of some "special arrangement" they had with Storm. It appears now that if such a special arrangement was put in place the Margin Lender had a duty of care to advise their client of this and give them an opportunity to decline to be party to "the arrangement" if it did not suit them. This of course did not happen because the relationship (dare I say PARTNERSHIP) between the BANK and STORM, became so cozy in the end that STORM appears to have morphed into the BANK'S margin loan client. That was a mistake it seems. Which may be why the Bank finds itself sitting in court - soon to answer some prickly questions. Wonder what they will say. Something along the lines of: "It was all Storm's fault. We done nofin', we done nofin'." A bit like what Storm says. Somebody is not telling the truth I think. Or perhaps, both parties are trying to equally deflect blame to the other. Makes sense. I was a little boy with a brother and always blamed him when something went wrong in the house. Did not want to get into trouble - you know how it goes. Not sure we change that much as we get older.


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## Frank Ainslie (28 October 2011)

*The CBA and ASIC *

From the start there has been something odd about the way ASIC has played along with the CBA. In December 2008 when Storm’s clients had a need to contact their Storm advisors, ASIC slapped a ban on Storm and would not let anyone from that firm converse with customers who were anxious for news. ASIC denied this at the time but it was confirmed by one of it’s officers some weeks later. ASIC’s excuse for acting in this way was, it claims, because Storm was advising its clients not to pay their negative equity debt to Colonial and it was ASIC's considered opinion that this could be of further detriment to some Storm clients'  circumstances through having interest accrue on the debt. Was this a valid reason or did the CBA have some ulterior purpose for wanting this because that Bank was certainly behind it.

On *8th of January* as a direct result of the action taken by the CBA, Storm was forced into voluntary liquidation. This forced Storm to abort all present and future court matters. It just so happened that at that time there was a hearing going on in the Federal Court of Australia between Storm and the CBA. Judge J Greenwood in his summation  (dated 24th of December 2008) was critical of the CBA for publicly stating that Storm was solely responsible for the management of the margin loan accounts.

Page 14 Point 43  _"For present purposes, I am satisfied by the weight of the applicant's material that had the financial adviser assumed a management responsibility for the margin loan transaction in each case and more particularly a "sole" responsibility for the management of the margin loan account through the period, the documents between the Bank and Storm and in particular the letter (agreement) of 18 May 2007 would have said so in clear and transparent terms. _

_Secondly, the documents between the financial advisor and the client would have reflected that position. _

_I am satisfied that solely for interlocutory purpose, Storm has demonstrated a sufficient likelihood of success in terms of 'Australian Broadcasting Corporation v O'Neill' demonstrating that a statement as to the sole management of the margin loan accounts and instructions allegedly given in the meeting on 4th December 2008 are capable of being misleading or deceptive or likely to mislead or deceive". _

Page 15 Point 44 of the summary, His Honour says: 

_"The Bank's position on the application for interlocutory relief is that this has nothing to do with the Bank. It is entirely a matter for Storm. That seems unlikely as the letter (agreement) of 18th of May 2007 talked about the working partnership to clear margin calls and the Bank’s letter of 17th December 2008 seems to acknowledge that the position is that Storm had primary responsibility for the loan. It seems unlikely as a matter of prudential bank management that the Commonwealth Bank of Australia would have displaced all responsibility for its loan portfolio with these borrowers and investors entirely to a third party, Storm. _

Page 18 Point 52 His Honour proposed to list the matter for directions on *9th of January 2009* for review. 

On the *8th of January* as a direct result of the action taken by the Commonwealth Bank of Australia[/U], Storm was forced into voluntary liquidation and as a direct consequence forced to abort all present and future court matters. Coincidence perhaps or a way of shutting this hearing down? After all, the CBA was one of the main players, and it had much to lose if Justice Greenwood’s findings were upheld. ASIC permitted this to happen without questioning the CBA’s motivation behind it. 

The chairman of the parliamentary inquiry into the financial services industry in 2009, Labor MP Bernie Ripoll, stated that, _"ASIC needed to follow through when it came to finding those guilty of wrongdoing where Storm Financial clients are concerned - regardless of the agreed compensation deals.”_ He was, of course, referring at the time to the CBA. He said that, _"ASIC must play its part as the Regulator, rather than as a middle man. ASIC must follow through with litigation and penalties where it is required. It has always been my view that the full force of the law should be applied to resolve all of the matters in the Storm Financial collapse, " Ripoll said. _

The PJ-C Committee stated in its report that, _"there were deeply troubling' claims that the banks were unable to provide accurate information about the status of margin loan accounts during the period of extreme market volatility, and that there had been an inappropriate and ultimately devastating delay or failure, particularly by the CBA, to make direct contact with margin loan clients when it became apparent that Storm was not successfully acting as an intermediary to clear margin calls. The Committee expressed the 'clear view' that  "Storm's aggressive leveraged strategy, in combination with the failure of multiple parties (Banks) to appropriately monitor and manage margin calls at the height of the market volatility, were of disastrous effect for Storm's investment clients". _

The CBA, with its fingers in dodgy housing loans and dubious margin loan practices, was the worst of these offenders and yet ASIC is only charging the CBA for operating an 'unregistered managed investment scheme'?  The other two banks, BOQ and the Macquarie Bank, are additionally being charged with: (1) breach of contract (breach of Banking Codes of Practice); (2) contravention of the statutory prohibitions against unconscionable conduct; (3) liability as linked credit providers of Storm - section 73 of the TPA Act1974. Why is the CBA any different?

Mr. Ralph Norris, the then CEO and its Board decided in 2009 that the "game was up" and put forward a resolution scheme on the pretext that it wanted to be fair to its Storm customers. _“I think we did end up with a situation where some of our people lost sight of who the customer was!”_ Mr. Norris said at the time. The CBA/Storm connection generated $198 million for the CBA in the fiscal year 2007-2008 alone. It pays to be myopic sometimes and its pays to have connections in Government.

The CBA resolution scheme, controlled by the CBA from the start, was based on the premise that Storm had the right to act as agents for its Storm clients where margin loan contracts were concerned. This is a highly contentious issue and has not been tested in Law. Certainly, Storm had its clients’ permission to liase with Banks but it had no implied authority to act in any other capacity. Storm was not a party to the margin loan contracts and did not provide "consideration" for being so involved.

Needless to say, many agreed to the terms offered under the resolution scheme because they had no choice. You cannot have a fair and equitable agreement where one party is putting a gun to the head of the other party. _“Sign here or keep paying what you owe!”_

The resolution scheme concept was sold to people on the understanding (carve out clause) that participants could obtain additional compensation if ASIC was able to prove its case under Section 50 of the Corporations Act. Guess what! ASIC is not pursuing the CBA under Section 50! This effectively locks out people that settled under the R/S from additional compensation. ASIC has effectively closed off that avenue for anyone in the R/S. 

This year alone I’ve written five letters to ASIC on this subject. Finally, after 6 months, I received a reply informing me that “ASIC cannot comment because litigation has started.” I have put many hard questions to ASIC since the Storm collapse and it has failed to respond satisfactorily to any of them.

If we are being honest, ASIC should be in the dock with the rest for failing in its role as the Regulator. As late as January 2008 ASIC carried out a compliance audit of Storm and found nothing wrong. It has done everything since to cover up its part in this mess. ASIC took until December 2010 (2 years after the event) before it decided to prosecute even though the evidence of wrongdoing is overwhelming. Even then, it is not treating all three Banks the same way. 

Fortunately, we have our own solicitors because if we had to rely on ASIC alone, its more than likely that the wrongs of these Banks will be glossed over. A full investigation of ASIC's role in all this should have been conducted at the time because ASIC is the public watchdog and it failed in its duty of care to the Australian public.


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## Igetit (28 October 2011)

bunyip said:


> If some Storm clients were in fact as well-heeled as the one you describe above, then why the hell would they get involved in a high risky strategy such as Storm proposed? Surely greed comes into play in that situation.
> 
> If they were smart and capable enough to get themselves into that sort of financial position then why would they leave all their brains and ability behind when they went to visit the Storm office?
> I just don’t get it....wealthy people don’t become wealthy by being gullible or imprudent or naÃ¯ve or careless, or by accepting everything they’re told at face value.  Most of them don’t become wealthy by taking crazy risks either. They’re usually very astute and switched on – they could never have become wealthy if they weren’t.
> So how come they stopped being astute and switched on once Storm got hold of them?




Hi Bunyip, 

I don't know why common sense ceased to prevail. I think others have given you their various takes on why. I guess another question might be in the faces of myriad responses you've received: "why do you keep asking the same question?" Just can't help yourself. Build a bridge. Take up a hobby. Or just wander around in a constant state of consternation. Up to you. 

Incidentally, some former Storm clients lost *some* of their assets with Storm, but - indeed - were "astute, wise, clever, greedy" enough to have limited their exposure to Storm from the outset. However, a loss is a loss, and if it occurred for reasons other than bad advice (and it seems on the material I've seen, there were a variety of reasons that can be traced back to the BANKS) - well, those folk are looking to have that put right. Might be why the BANKS are sitting in Court these days. They haven't ended up there by accident.

However, the point of my question to Doobsy was well answered by him. I hope you find some peace.


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## Harleyquin (28 October 2011)

Thanks Judd I didn't feel confident trying to explain the fee structure, and you're right the whole storm process was just that , very slick.  In hindsight I can see things far more clearly and wonder how we were conned by this.    The word greed keeps being thrown at us and I don't remember this ever being a factor.  Obviously we wanted to be financially secure and wanted someone to help us achieve that so a financial plan that helped us stay abreast of inflation was paramount in my mind.

Hindsight would be a really great thing to have before the event!!!  I think, and wonder if this applies to other stormies, if the fear of being unfinancial in retirement , really did have an impact on why we believed storms spiel and allowed our normal common sense approach to fly  out the window during this time.  Guess I'll never really know.  I have never been conned by anything before but approaching retirement was a scary time and I think storm knew this and they came at us from this angle. 

At the end of the day some of you could probably call me a lazy investor, from my point of view I was busy working and had no interest or time in learning about financial planning, I just wanted to go in and pay someone who knew what they were doing to do it all for us, I had no experience and had read how 'stupid our age group was, they only know how to put their money in the bank and in ten years time their money will not keep pace with the rate of inflation and they'll struggle in old age'  I think others would have read this spiel and storm compounded this line of thought.

I thought that it was possible to just go into a financial planners office, ask them to look after you and they would.  I didn't realise that we couldn't do that.

Today we have no financial plan, have no idea what the future holds financially and will never approach another financial planner for help.  I can see a time in the not too distant future when we'll have nothing left and I feel very disappointed in the whole financial industry.

I have one huge problem with this whole disaster and that is, all of the educated investors on this forum and everywhere else all knew exactly what storm were doing and how super risky it was.  Yet the whole Australian Banking system maintain that they had no idea what storm were doing.  It just doesn't ring true to me.

Was interested to read this item yesterday

The Association of Financial Advisers (AFA) will step up its push for a delayed start date to the federal government's financial advice reforms to ensure consumers are not lost amid the changes.

Concerns have been growing over the piecemeal release of Financial Services and Superannuation Minister Bill Shorten's Future of Financial Advice (FOFA) reforms, with advisers increasingly worried about meeting the requirements of deep legislative changes that have not yet been finalised.

According to draft laws before Parliament, the financial advice industry must comply with FOFA requirements from 1 July 2012.

AFA chief executive Richard Klipin said the association would push for a FOFA start date of one year from the date the final legislation was unveiled. 

Klipin said a delayed start date would prevent poor implementation of the reforms and disadvantage to consumers. 

"The last thing anyone would want is to have an unsuccessful implementation of FOFA; a really clunky implementation of FOFA that disadvantages consumers," he told InvestorDaily.

"The danger is if it's not handled effectively and well, people will be operating almost in a vacuum as systems come into play, new documents come into play, new client processes come into play.

"It's more about the government understanding that this is not just a tick-and-flick piece of legislation; it is fundamental reform and change of the industry and they need to give people across the industry time to get set and time to get it right."

He said the member body would involve all players in the political process, but would focus on specific quarters.

"Certainly, it's the conversation directly with the government, in particular with the Minister and the Minister's office, and Treasury, and it's very definitely ASIC. They are the key touchpoints," he said.

"Clearly, the opposition and the independents need to understand the size of the change and the impact that it will have, so all involved in the political process are key.

"It will come down to Treasury and then ASIC to implement across the industry, so that's the tiering that we have to go through in terms of getting the understanding and making people aware of what's really involved." 

Meanwhile, the FOFA legislation looks set to be delayed. 

Shorten's office has said it was aiming to have final legislation through Parliament early next year, however, the first tranche of the FOFA legislation has been referred to the Parliamentary Joint Committee for review. 

The PJC has no deadline for completion of its assessment, but the government is hoping to have the review finished by the end of the year. 

This would put the first part of FOFA on track to be finalised by February or March 2012. 

The second tranche of FOFA has yet to be introduced in Parliament, making it unlikely a debate would be held over its contents before the end of the year. 

"The policy debate and the political campaign we've been running - it's game on," Klipin said.

"Arguably, it needs to step up and has stepped up. We've now just seen the first tranche of legislation, and there are enough major concerns about it that advisers now have a message to take to their local MPs because we've now got the black and white proposals on the table."


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## Harleyquin (28 October 2011)

Here's a possible interesting film due for release today

FILM:
'Margin Call': Calm Before the Storm of 2008 Financial Crisis 

Posted by Jeffrey Brown and Saskia de Melker , October 21, 2011 
The 2008 financial collapse is a complex phenomenon to fathom. It's an even harder phenomenon to recreate in a cinematic narrative. 'Margin Call,' a film that opens in theaters Friday, takes on that challenge and offers a fictional account of the first 24 hours inside a Wall Street financial firm as it discovers that it's over-run with toxic, essentially worthless assets.

The director of the film, J.C. Chandor, drew on his own experiences to build the story's narrative and characters: His father worked on Wall Street for Merill Lynch for more than 35 years, which gave him a unique insight into the world of traders. 

"I knew why these people made the decisions that they do, why they get hired, why they get fired, why they get promoted," he said. Chandor himself had taken out a loan to invest in renovating a building in Manhattan several years back. Halfway through that project, he was advised to sell early. "I started to think back on what it must have been like to be an insider and actually really feel like the world was going to come apart but still seeing leaders of investment banks hitting the accelerator instead of the brake pedal," Chandor said.

"Margin Call" is full of intensity, but it's a quiet drama. Don't expect any explosive face-offs between villains and heroes. Rather, most of the action unfolds through the dialogue of traders talking calmly on the phone at their desks and conversations between executives in suits in austere conference rooms. Chandor admits that he's surprised that audiences are kept on the edge of their seats since the film is "essentially about information coming across fairly static forms like computer screens and pieces of paper," he said.

The film is Chandor's directorial debut. Despite the low budget, short shooting schedule (just over two weeks) and limited location (a single floor of a skyscraper in lower Manhattan), he managed to line up an all-star cast. He credits the film's force to the performances of Kevin Spacey, Jeremy Irons, Paul Bettany, Stanley Tucci and Demi Moore.


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## SJG1974 (28 October 2011)

I for one appreciate your honesty Harleyquin.  I can only imagine what you and the other Stormers have gone through.

And also your attempts to explain your mindset when the fees were presented to you.  I hope you don't feel as though I have been badgering you, because that isn't the intention at all.

With regards the fees, did they make any outrageous claims that you could expect this and that?  Did you think that perhaps because it was borrowed money that was paying the fees that somehow it was cheaper than if you had have dipped into your own pocket?

It certainly seems from some of your previous posts that the risks inherent in your strategy were effectively glossed over, or made to sound nowhere near as risky as what they really were. Perhaps it was the thought that "gee we can get all this for minimum risk, we would be crazy not to do it" that swayed you and others?

I wish you luck, I really do.  As I have said previously, I think as your adviser Storm bear the brunt of the blame for putting you and others into a high risk strategy that most clients didn't fully comprehend the risk of, and they failed in their duty to look after you as the markets tumbled.  They screwed you prior to the GFC, even though it may not have been reflected in the value of your portfolio.

Certainly, if the banks are proven to have done wrong by you and other clients then I hope you are compensated accordingly.


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## SJG1974 (28 October 2011)

Igetit, 

As I have said before, if it can be proved that the banks have broken any laws and agreements or whatever in all of this, then they should pay accordingly.  No issue with that.

I guess we will wait and see what this documentation you refer to reveals.

You in all your posts have focussed specifically on the banks, and in particular the margin call fiasco which sealed Storm and its clients' fate.  Storm and its advisers seem to have been overlooked in your criticisms.

What are your thoughts on the strategy itself? 

*The strategy of double gearing investors who, evidently by comments on this forum and in the PJC submissions, did not understand the huge risk they were taking, and for many didn't need to take this level of risk to live comfortably?

*The strategy to pass off investing in different index funds as diversification?

*The strategy of taking 7% up front to monitor the market for them? 

*The strategy to get clients to increase their gearing when the market rose and their LVRs dropped, or when their sophisticated software suggested that their house could be revalued? 

*The strategy of keeping clients invested as the market was tumbling from its highs, waiting until investments were forcibly sold via the margin calls (regardless of who did or was supposed to issue them), rather than safeguarding them earlier?

Yes the banks provided the funding for this (yet I haven't seen any evidence that the banks broke any laws by approving loans or margin lending products- there have been suggestions that Storm reps "misrepresented the truth" on applications), but it was Storm who sold the strategy to clients on a one size fits all approach which goes against the very basic know your client rule that financial advisers need to abide by.

Storm screwed the clients well before the GFC came along.  The banks may have just inflated the level to which they were screwed.


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## Igetit (28 October 2011)

SJG 1974,

Hello there, 

Not that I don't want to address all of the issues you would like my opinion on. It's just that I think by doing that I end up like looking like an apologist for Storm. I can assure you I am not. Far from it. 

I guess my opinion is, if people accepted the advice passed on to them by Storm, they must have felt comfortable with that. Not really sure what else to say. Weather it was good, bad or indifferent doesn't really matter at this stage. Personally, in my life, I've received both good and bad advice on a whole range of different issues. That's how it goes. Don't suppose it would be any different with financial advice. 

My issue with the BANKS, however, comes to trying to get to the bottom of the true nature of the relationship they had with STORM. Was it really, as you suggest, this simple arms length impersonal association between the Margin Lending division of a Bank and just any other Financial Planning firm - or something more?

For example, as you know, the CBA gave STORM its own BSB (Branch Number - BRANCH NUMBER FOR GOODNESS SAKE!!!!!!) so prodigious was the volume of work flowing to them from Storm. I am not aware of any such association existing between any other financial planner and a Bank. Anywhere. Purely arms length or a little more to it. I have a sense that in the end Storm morphed into the Margin Loan client of the  Bank and the real clients (the ones we are all meant to be concerned for as the victims in all of this) - became something else. Cannon fodder springs to mind. 

I just get the sense that the Bank dropped the ball by getting too palsy with Storm - they did love writing those loans. Which allowed Storm to become progressively more emboldened and push the limits further and further for their clients. Some of those LVR'S I have seen from NOV, DEC 2008 are catastrophic. STORM DID NOT SET THE LVR. Their - dare I say it, partner - did. You do understand that there would have been some high end discussions between both interested parties before some of the things the BANK did with regard to its margin loan parameters were signed off on. 

If the BANK (that's THE BANK - not Storm) allows the LVR to run higher, then capacity is increased for Storm to promote more borrowing to its clients. Banks from 2005, so I am told, really, really liked to lend money. Apparently that's how they make theirs. 

So much synergy. So much complimentary endeavor. They must have been so, so happy together in the better days. Things that make you go hmmm....

Just to finish: I have a sense - OK I've seen one or two things that you may not have - that it was a result of abuse in tandem that saw so many people harmed. I am not an apologist for Storm, can you say the same for yourself about the Banks?

I quite like this by the way. You mentioned "all my comments to date" I think this is about number 6 - a few less than you I'm guessing (and I'm not even warmed up - gloves well and truly still on). Lets continue to have fun.


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## SJG1974 (28 October 2011)

No i am certainly not an apologist for the banks...far from it.  As I have said, if they are proved to have done wrong, then they should be made to pay.

Having taken an interest in this from around the time this thread started and read through the thousands of posts over that time, it strikes me that overall the banks are seen as the bad guys moreso than Storm. 

Perhaps that is a result of Manny and his public blame game and refusal to admit any wrongdoing on his part, and the banks silence on the issue, I don't know.  

Perhaps it is because the banks have deeper pockets and are more likely to provide compensation to the victims?

Perhaps clients can't see any wrong in Manny and his crew, but can with a big, faceless, cold hearted, money hungry multi billion company like the bank?

I don't know what it is, but IMO clients got screwed by Storm well before they got screwed by the banks.  In fact, the clients got screwed as soon as they signed on the dotted line to accept their shoddy advice for their ridiculously high fees....that was the beginning of the end for them unfortunately.

And this LVR stuff...while Storm may not have set it, they did accept and negotiate this great deal on behalf of their clients, and by doing so allowed their clients investments to fall to the brink, when any good financial adviser would have taken a much more conservative approach.

I doubt very much that anyone from the CBA was holding a gun to Manny's head and telling him to gear up clients more and more, and wait until a margin call before selling down investments.  I would have thought a good adviser, with clients' interests at heart and not his own, would have made a move before the final margin call fiasco, with his years of industry experience telling him that his clients were well and truly up the creek.

Look the Banks and Storm may have been in bed together, I don't know.  You seem to know all the specifics. I wonder how???

It takes two to tango, but unfortunately it appears more people are prepared to accept that it was all the bank's fault, when it was Storm that took them by the hand and led them into the gas chamber all the while telling them they were going to have a nice hot shower.


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## Igetit (28 October 2011)

SJG 1974

Well I am certainly glad we've got that cleared up. 

Now, lets accept the advise was shoddy and expensive. Bit like a second hand car we've all bought at one point or other in our lives. Indeed, don't know about you, but I usually have the feeling that no matter what it is I've just bought, I paid too much for it. And it's invariably got something wrong with it. 

Anyway, I am relatively new to this, and I have seen lots of threads that are quite long winded. So I will endeavour to be brief. 

The issue is not the MARGIN CALL. The issue is NOT receiving the MARGIN CALL. Over the years I know many investors who have received margin calls on their loans and dealt with them. You would be aware of the mechanisms by which they could be dealt with. 

Some people don't panic when this occurs; indeed, if funds are at hand - buying in a falling market is not such a frightening proposition. You've read, just like me, about buying low and selling high; when the streets are red with blood that's the time to get in etc, etc. Not for everyone; but nothing wrong with waiting for a margin call and meeting it. That is why the product offered by the BANK provides for such a scenario. If not, then they would say we don't like you stretching yourself to the point of MARGIN CALL so where going to do away with that and introduce BUFFER CALL. Much nicer on everyone. But that is not the case. 

I was not there and don't know who could or could not manage a margin call. But you do not take out a margin loan not expecting you won't receive one. You can. And, in the case of Storm Clients, they should have. All the other clients of financial firms going around were receiving them during those hectic times. Which begs the question, lots and lots of other financial firms clients were in MARGIN CALL territory; NOT only STORM'S. Something you seem not to have acknowledged. Not every financial planner quarantined his clients from Margin Call. Hell, I know some folks who said they didn't want to hear anything from their Margin Lender until they were actually in Margin Call. "Great buying opportunity". These were dealt with according to the options available to the client. As I say, not for everyone, but that is why the product is designed the way it is - to allow people the opportunity to run things to the wire if they wish. 

Why did Storm's Clients not get the CALL? What agreement was struck. Which party had an obligation to advise THEIR MARGIN CALL CLIENT of any changes to the way they would be managing that individual's margin loan. The LOAN AGREEMENT was always between the BANK and the CLIENT. THE BANK, THE BANK, THE BANK. The Bank has let the people down. BAD ADVICE, HIGH FEES, etc, etc. No doubt. But not having an opportunity to respond to a margin call was the non recoverable blow.

"THEY MAY HAVE BEEN IN BED TOGETHER; I DON'T KNOW?"

Well, I do. It ain't a pretty story. Gut churning deceipt and corruption. I'm still having fun by the way. But not nearly as much as when the BANKERS have to put their hand on the bible and start telling the old....


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## SJG1974 (28 October 2011)

Igetit , you agenda is clear.  It is the banks' fault, and given your apparent intimate knowledge of their wrongdoing, I am guessing you were very close to the action.

Yet again, your comments overlook some common aspects of Storm's "advice", which is how they got into this mess in the first place....they sold the strategy which is flawed in the extreme and entirely inappropriate, not the banks.

"Some people don't panic when this occurs; indeed, if funds are at hand - buying in a falling market is not such a frightening proposition."

True, but then again most people havent mortgaged their house and then taken out a margin loan.  I would say anyone in this position would panic. 

"But you do not take out a margin loan not expecting you won't receive one. You can. And, in the case of Storm Clients, they should have."

Again, true in most cases, except when reading how clients were sold this shoddy plan, Storm made it seem like the world would have to be about to collapse for them to get a margin call.  And they were told that there were protection mechanisms in place to help protect them.  Isn't that what Ignite or Phormula or whatever their crummy software was supposed to be for?  Clients were told they wouldn't lose their houses.  Manny told clients as their world was ending that everything would be OK.

So was the extent of Storm's management of their portfolios to let them get to a margin call, and let the bank deal with it?  Gee thats great management and protection isn't it?

So I doubt very much that many of the clients expected Storm to let it get to the margin call stage.  And of course, we have the inflated LVR which means clients had even less chance to make their money back by the time the margin call came (whether it actually did come or not).

Yet you continually overlook these simple facts which were the cause of the problems in the first place.

"Not every financial planner quarantined his clients from Margin Call."

True, and then again there would be very few planners who motgaged their clients to the hilt and had their whole financial existence wrapped up in a margin loan.  Are you starting to get the picture yet??? 


"These were dealt with according to the options available to the client. As I say, not for everyone, but that is why the product is designed the way it is - to allow people the opportunity to run things to the wire if they wish."

At the risk of repeating myself, most other clients would have options available to them, given they wouldn't have everything tied up in a margin loan.  Storm cleints however, what options did they have...devastation was around every corner because Storm had let them fall to the precipice.   

I don't know what agreement Storm had with the bank about the margin calls.  To me, the clients were already stuffed by the time the margin calls came (or should have come when the LVR hit the inflated limits).  the damage was done due to double gearing promoted by STORM, not the BANKS. Strategy screwed them, not the banks.

The entire margin call debate wouldn't have been such an issue if clients werent geared up to the gills by salesmen who were rewarded by how much they could get the clients to invest. And even if the margin calls came when they should have, just what chance did clients have to respond?  Had no equity to pump in the reduce the LVR (unless they borrowed more against the house), had to therefore sell and given the level of debt they had no hope of recovering even a fraction of their losses.  As Doobsy said and his analysis showed...screwed....by STORM. There are lots of could haves and what ifs but they are no good to clients now because their advisers sat on their hands and didn't protect them like they said they would.  And please don't use Manny's scrambled data line as a defence, because anyone with half a brain could see the market was falling by the day.  Perhaps that was Manny's problem?

Just how do you know so much detail, and how close are you to Manny and his henchmen, because you seem to be peddling the same lines that he has in his crusade for justice...its all the nasty banks fault????

You know my views, I have already repeated them ad nauseum, and I certainly know yours and they won't change despite what I or anyone else says. I just hope your mate Manny pays for what he did to those clients, becuase while he was sitting in one of his palatial mansions counting the proceeds of his 7% up front fees, his clients were being taken to the poorhouse by STORM.


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## maccka (28 October 2011)

At the risk of being flamed...

One of the things that particularly frustrates me about this forum is that so many people who post here seem to believe that the world is black or white.  

This travesty is one of the more complex financial disasters that has been seen in Australian history.  It is not as simple as it being (a) the client's fault, (b) the Bank's fault (c) ASIC's fault, (d) Storm Financial's fault or (e) any combination or other possibility.  To find the truth requires millions of pages of documents, interviews and more than a dash of perseverance, millions of dollars and sheer bloody mindedness and probably gallons of Veritaserum poured down people's throats.

If someone disagrees with your belief that it is the Bank's fault, it doesn't put them in the pockets of the bank.  To imply so is rude.

If someone disagrees with your belief that it is Storm Financial's fault, it doesn't make them Manny's best mate.  To imply so is to deliberately set out to insult them.

If someone disagrees with your belief that financial planners are wicked, greedy con men it doesn't make them wicked, greedy con men out to separate a fool from their money.  To imply such a thing is disrespectful to all parties.

If someone disagrees with your belief that ASIC didn't do enough to prevent it, it doesn't make them pro-establishment apologists. By now I am sure you get my point....

Insulting someone in the manners outlined above (whether it is strong and obvious or subtle) shows a lack of finesse and an obvious inability on your part to put a point across using truth and fact.  Using an insult weakens your message by distracting from the point you are trying to make.

This matter isn't simple and it won't be solved by opinion.  In this case opinion gets us nowhere but backwards.  Opinion is a waste of energy and time! What we need is cold hard proof.  I look forward to seeing that proof in the future as cases go to court and people learning what actually happened.  I then look forward to having it explained in lay terms so that real people can avoid it happening again.

cheers
maccka


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## maccka (28 October 2011)

BTW - has anyone noticed this site?

http://www.commonwealthbankdeception.com/action.htm

cheers
maccka


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## Igetit (28 October 2011)

Hi there SJG 1974,

Well yes and no. My agenda, in some respects, is a bit like yours. Only the opposite.

I haven't been overly critical of yours; yet you seem very resentful of mine. But that's OK. 

I am pretty sure I've acknowledged the advice from Storm to its clients was overpriced and poor. 

So I will leave it at that for the moment whilst you check that that is in fact what I said. Once that is sorted I'll get back to you. 

So - did you check my last thread? OK - lets proceed.

Just briefly though, Manny was only able to ratchet people's Margin Loans up to certain levels, because those levels were set by THE BANK. You need to ask why that was. Why? Who was to benefit from that? Long and detailed discussions were held regarding this issue. You seem like you have your head around a lot of the detail. Just pause and think a little further. You are right - Manny took everyone to the precipice. Well not everyone - but lots. But how was this made possible and why?

The pebbles are still in my hand grasshopper. The Margin Loan agreement was the BANKS DOCUMENT. There were terms and conditions attached to it. They talk, for example, of what they will do if you enter MARGIN CALL. At no point do they discuss what they will do if you enter NEGATIVE EQUITY. Indeed, the term NEGATIVE EQUITY is never mentioned in any Margin Loan document I have reviewed and yet, by providing clients with a product with an LVR of 93, 94....99% - meant an overnight drop of 10% would put THEIR MARGIN LOAN CLIENTS into this strange world of NEGATIVE EQUITY. They had created an enviroment that did NOT allow them to provide their clients with the MARGIN CALL that they said they would. This was their product. Not Storm's. Sorry - but Storm did not develop that product; they used it. But it wasn't there's. Can you acknowledge where the responsibility lies? The MARGIN LOAN product offered by the BANK was not actually fit to take to the market. It was flawed. But they - in conjunction with Manny and his gang - took it to the masses. Why was that I wonder? Oh I think IGETIT. You will too. But don't get sour. We are meant to be having fun. 

There's lots more....Incidentally, not that I'm easily offended - but I am certainly "no mate of Manny's". I have far more altruistic motives. So take a deep breath and let me hear from you.


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## Julia (28 October 2011)

Harleyquin said:


> Hindsight would be a really great thing to have before the event!!!  I think, and wonder if this applies to other stormies, if the fear of being unfinancial in retirement , really did have an impact on why we believed storms spiel and allowed our normal common sense approach to fly  out the window during this time.  Guess I'll never really know.  I have never been conned by anything before but approaching retirement was a scary time and I think storm knew this and they came at us from this angle.



I completely get this.  We all know that living just on a government pension is a pretty miserable proposition.   So the principle of wanting to be self sufficient in retirement is what we should all aspire to.




> At the end of the day some of you could probably call me a lazy investor, from my point of view I was busy working and had no interest or time in learning about financial planning, I just wanted to go in and pay someone who knew what they were doing to do it all for us, I had no experience and had read how 'stupid our age group was, they only know how to put their money in the bank and in ten years time their money will not keep pace with the rate of inflation and they'll struggle in old age'  I think others would have read this spiel and storm compounded this line of thought.



I have several friends who are very well educated, very successful in their chosen careers but when I try to get them to take an interest in their finances, their eyes just glaze over.
I just don't understand why any intelligent person would devote their energies to learning about other aspects of life but decline to take even the most basic interest in becoming financially literate, when it's not difficult at all.  None of us were born with financial nous embedded into our DNA.

HQ, this is not 'getting at you', just a general comment about a considerable proportion of the population.

I understand that many of us don't have any natural affiliation toward financial matters.  I feel the same about technology.  If my computer fails, I have no interest in understanding why it has failed, I just want to pay someone to come and fix it smartly.
But that just involves a small amount of money, not all my assets.



> Today we have no financial plan, have no idea what the future holds financially and will never approach another financial planner for help.  I can see a time in the not too distant future when we'll have nothing left and I feel very disappointed in the whole financial industry.



You've said that you have come a long way in two years.  Hopefully, with the passage of a bit more time, you'll feel able to revise the above attitude with its pessimism and actually start to educate yourself.  As I've said so often, it's not nearly as difficult as you seem to imagine.  My original offer of walking beside you in this process stands.



> I have one huge problem with this whole disaster and that is, all of the educated investors on this forum and everywhere else all knew exactly what storm were doing and how super risky it was.



Hold up there, HQ.  I, for one, had never heard of Storm until the **** hit the fan.
If you'd come on to this forum and explained the "strategy" that Storm had suggested to you, i.e. the double gearing, I don't doubt there would have been multiple instant responses of "that's crazy, don't even consider it".

Despite your assertion that Storm was a 'widely known and respected financial planner" I've not come across anyone outside of North Qld who had ever heard of them prior to it all coming unstuck.




> Yet the whole Australian Banking system maintain that they had no idea what storm were doing.  It just doesn't ring true to me.



Not sure why any bank who was not directly involved with Storm would be expected to have any interest in what some Townsville FP firm was doing.  They are probably all pretty busy just looking after their own clients.
And, for that matter, if they did hear about it, what do you think they should have done about it?  It was none of their business, was it?

Was interested to read this item yesterday



> The Association of Financial Advisers (AFA) will step up its push for a delayed start date to the federal government's financial advice reforms to ensure consumers are not lost amid the changes..............



I hope you're not placing all your confidence in these changes being much more than window dressing HQ.   Shonky operators will still find a way to con people.



SJG1974 said:


> I don't know what it is, but IMO clients got screwed by Storm well before they got screwed by the banks.  In fact, the clients got screwed as soon as they signed on the dotted line to accept their shoddy advice for their ridiculously high fees....that was the beginning of the end for them unfortunately.



+1.



SJG1974 said:


> I don't know what agreement Storm had with the bank about the margin calls.  To me, the clients were already stuffed by the time the margin calls came (or should have come when the LVR hit the inflated limits).  the damage was done due to double gearing promoted by STORM, not the BANKS. Strategy screwed them, not the banks.
> 
> The entire margin call debate wouldn't have been such an issue if clients werent geared up to the gills by salesmen who were rewarded by how much they could get the clients to invest.


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## Ferret (29 October 2011)

Julia said:


> My original offer of walking beside you in this process stands.




HQ,
Hope Julia doesn't mind my saying this, but from what I have observed on this forum, she has great financial acumen.  This is a terrific offer.  You should jump at it, even if you never plan to look after your own financial affairs.


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## Harleyquin (29 October 2011)

Enjoyed reading your comments Julia and apologise I certainly didn't mean that anyone on this forum knew what storm were about pre-collapse, I meant that as soon as you all realised what their strategy was,  you understood.

This is why I can't understand why the FPA, ASIC and the banks didn't get it pre  collapse.

I agree with Ferret, Julia, I think that you know that I admire your investment skills, unfortunately I'm a bit like friends of yours, my eyes do indeed glaze over sometimes.  However I do appreciate the offer, and wish that I was game to try.  We are both interested in learning about shares and the site that you've given me really is brilliant, however after storm, I'm just too wary and untrusting.

I have other personal reasons for not caring too much about investing at the present time.  I'm not going to bore anyone with the details, but a member of my immediate family has major health issues and that is taking up a large proportion of my time.  I've come a very long way in two years and in time I hope that I can change my mindset, for the present though it's going to have to go on the backburner.

You did make a comment about yesterdays news item, I don't place any faith in what they are saying, in fact I'm of the opinion that neither political party has any real idea how to approach the problems in the financial industry.  Everyone has an opinion but no one has any concrete answers.  I'm getting more answers on this forum, and not just this thread, than from government policies on the subject.

Thank you for your PM Julia and appreciate your comments, I tried to reply however have obviously made a mistake in doing so.  I'm happy to lay my comments open on the forum.


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## Harleyquin (29 October 2011)

SJG1974, I've just re read some of your comments and I can't comment for all storm clients but most of us would certainly agree with you that the double gearing strategy, which we now understand, was indeed the problem.  The margin loans were the problem.  The level of borrowing against the family home was risky enough but to compound this with another loan was disasterous.

SF advised us to borrow up to sixty percent of our assets telling us that they had a system in place to ensure that this type of investment would be quite safe.  I'm told by someone else who worked with a financial planner that that company also borrowed against the family home and other assets but always said that anything over twenty percent would be too risky.

In our case we've figured. with help, that without a margin loan, we would have been ok.  Down but not out and capable of rebuilding.  It was the margin loan that killed us.  I believe that it's time that we asked the banks some hard questions and were given some decent answers.  This is something that they've all been short on.  

All banks employ financial planners, accountants, auditors and other experts in the financial field who would have seen through the shortcomings of storms strategy.  Clients paperwork, which I understand SF had to provide to the bank, and the bank have to legally ask for, does not 'match up', SOA were basically all the same.  

Anyone with any financial qualifications could see at a glance what SF were doing and yet the banks 'fell over backwards to align themselves with SF'  In the words of one storm employee 'they were throwing money at us'  Why?  Do they have any Duty of Care/ do they have to have any Duty of Care or is it just a free for all out there in the land of the banker?

I don't have enough financial or legal know how to know what is right or how we stand financially or legally, but morally and ethically, it isnt' right.  Not that this always stands for a great deal in todays world.

I agree with the QANTAS employees, why should the CEO's earn millions  of dollars per annum while so many are out there working hard and doing it tough.  The average working man needs a break too.  I disagree with the banks paying their CEO's outrageous millions in wages, why, because CEO's in other countries are paid this sort of wage.  Most of these CEOs come from countries outside of Australia.  Surely we have decent Aussie workers who are well qualified or capable of being trained to do a decent job of CEO.  If the banks offered half a million dollars pa that would be a decent wage in anyones estimation.

We hear time and time again that they can demand that sort of wage in other countries and so they have to pay them accordingly in Australia, if they want the best person for the job.  That's rubbish.  Why should we follow what other countries do like a herd of sheep traipsing down the same old disgusting garden path.  

It's 'corporate greed' and greed is certainly what caused the Storm Financial collapse.  Many banks overseas are proof that in todays economic climate that the CEO with the millions isn't always doing such a wonderful job.

IMO If storm has taught us something it's this:
*'You don't get the best person for the job just because they charge the most.'*


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## SJG1974 (29 October 2011)

Igetit,

Didn't mean to offend or sound obnoxious or whatever.  And macca, point taken.

Anyway, we are going around in circles.  I have said ad nauseum that if the banks can be proven to have been at fault, then they should pay. But again, they weren't there putting on seminars about this low risk strategy which was anything but- Storm were.  If it wasn't for Storm, this wouldn't have happened. 

Negative equity, whilst it shouldn't have got to that, wouldn't have happened if:

* cleints were more conservatively geared from the get go.
* had equity outside of their margin loan facilty as a buffer to be able to reduce the LVR as they approached the margin call limit (investing all of your assets in shares is ludicrous.  Gearing up these assets to the hilt and then investing them in the market is criminal IMO.
* their advisers had have done what they said they would, and what their clients paid them for, which was to monitor their investments and protect them. If they had have done this, they wouldn't have waited until clients were in margin loan territory.

These clients should never have been allowed to have their portfolios get to margin loan territory in the first place, let alone negative equity, because they had no way to recover. And their robust systems which clients paid for were supposed to prevent it from getting that bad. Perhaps rather than buying his jet Manny should have put more funds into his software. 

Allowing them to get to that level is Storms fault, beyond that, well that seems to be the bank's fault.

I don't know if the bank is required to check on the source of funds that are put into a margin loan.  If so, then they were obviously reckless in allowing people to double gear into margin loans and should be held accountable.  However, from my understanding, they aren't required to do this. Perhaps you can clarify???  

And there seem to be suggestions that Storm meddled with the documentation from the get go.  Again, perhaps the bank was required to forensically check every home loand applications as well.  I don't know.

Based on this, it is therefore Storm's fault that they were as highly geared as they were.  this was the case both before and after the GFC....it was a house of cards.

Sure, the margin call limits were set high, but again my understanding is that the initial limit, when they invest, wasn't.  Wasn't it about 60% or something like that as the maximum LVR when you start off (my margin loan knowledge is limited, just like most clients of Storm evidently)?

Again, many advisers would be more conservative from the get go, particularly given the market was in the midst of a 20 year bull market. It is the adviser's recommendation to the client as to how much they gear from the start, not the margin loan provider's.  The provider provides the limits, the adviser and the client work within them. These limits seem to be your major issue, and the fact that even these weren't adhered to which saw clients go into negative equity.  Again, the truth will come out about exactly who is to blame for margin calls not being made.  And whoever is at fault should be penalised.

But even if they were adhered to, the clients were screwed.  Just say the process was rigid, and margin calls were made when they should have been, what were clients' options at that time?  Sell out, which would have made it impossible to get back in given the mountains of debt they had, or contribute more equity, which again was near impossible as many had no equity and would have had to borrow?  As I and others have said, they were screwed even if the margin calls were made at the right time.  The timing of the calls just made them more screwed.

Clients were screwed well before the issue of margin calls (or lack thereof) occurred.  And it was Storm who screwed them up to then.

You have your views of who is to blame and I have mine.  To this stage, I know what Storm did, via the hundreds of client submissions to the PJC.  That much I know.  The whole reponsibility of margin calls is the issue at hand which we seem to be debating. The trusth will come out.

Lets agree to disagree on whose MORE to blame, because this is getting repetitive and I am sure the other posters are getting sick of it. I am happy to leave it at that.  we can let the courts decide who is right, or "more right" than wrong.  But I have a feeling we will be a little more grey and long in the tooth before the truth all comes out.  Still, I will continue to watch with keen interest until then.

Cheers.


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## bunyip (29 October 2011)

Harleyquin said:


> IMO If storm has taught us something it's this:
> *'You don't get the best person for the job just because they charge the most.'*




Quite so. In fact the outfits whose fees are significantly higher than their competition are just the ones that should be viewed with the most skepticism.
Likewise for firms who appear to offer substantially better client performance than their competition.

Storm Financial proved both these points in no uncertain manner.


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## Julia (29 October 2011)

Harleyquin said:


> In our case we've figured. with help, that without a margin loan, we would have been ok.  Down but not out and capable of rebuilding.  It was the margin loan that killed us.  I believe that it's time that we asked the banks some hard questions and were given some decent answers.  This is something that they've all been short on.



Did the same bank which provided the loan on your home also provide the margin loan?
As I understand the provision of a margin loan, it's based on the value of the shares you hold.  Try to remember, HQ, that it's not the bank's responsibility to oversee your whole financial situation, that's Storm's responsibility.  If the value of your shares was XXX, then a margin loan would have been provided on that basis, as far as I know.



> All banks employ financial planners, accountants, auditors and other experts in the financial field who would have seen through the shortcomings of storms strategy.



Again, you're not properly understanding the role of such people.  If you had wanted one of the bank's financial planners to look at your proposed strategy, they would have been happy to arrange this, I'm sure.  I've seen such people, free of charge of course, from time to time when I wanted to bounce off an idea I had to make sure I wasn't missing something.

But banks do not employ these people as a sort of quasi ASIC, charged with overseeing the wisdom or otherwise of clients financial strategies *unless they are specifically asked to do so.*



> Clients paperwork, which I understand SF had to provide to the bank, and the bank have to legally ask for, does not 'match up', SOA were basically all the same.



Yes, much mystery seems to surround the question of who entered what onto the paperwork.  Obviously this is crucial to the whole blame apportionment.



> I don't have enough financial or legal know how to know what is right or how we stand financially or legally, but morally and ethically, it isnt' right.  Not that this always stands for a great deal in todays world.



Correct.  We are unlikely to change this.  So we simply have to be aware of it and ask questions accordingly.
There are still some decent, honest people out there.




> I agree with the QANTAS employees, why should the CEO's earn millions  of dollars per annum while so many are out there working hard and doing it tough.  The average working man needs a break too.



Agree that at the very least, the timing of such a massive increase in Mr Joyce's salary is unwise.

However, there seems to be quite some misinformation being peddled by the unions about some of the Qantas situation.  Apparently, with the newer aircraft, they simply require much less servicing than the older ones, hence some redundancies are going to occur.  Qantas is not a charity.  It's a for-profit business.
I expect there is right on both sides, but I doubt that it's as simple as the poor working bloke being screwed.  Qantas staff in many capacities are paid quite a lot more than their counterparts in other airlines.

Re bank CEO's being paid high salaries:  if the shareholders are happy to accept this, what's the problem?  Again, the banks are not charities.   One of the reasons Australia as a country is in such a decent situation is because our banks have been well capitalised and well run.  If paying the CEO a decent salary so as to attract the most competent people ensures this continues, then I'm all for it.

Remember, HQ, Qantas and the banks are public companies, not taxpayer funded organisations.  If you compare their management with the woeful waste exhibited by governments, I know where I'd be the most outraged.


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## SJG1974 (29 October 2011)

Julia said:


> Did the same bank which provided the loan on your home also provide the margin loan?
> As I understand the provision of a margin loan, it's based on the value of the shares you hold.  Try to remember, HQ, that it's not the bank's responsibility to oversee your whole financial situation, that's Storm's responsibility.  If the value of your shares was XXX, then a margin loan would have been provided on that basis, as far as I know.




Exactly Julia.  I think the roles and responsibilities of the bank are misunderstood to a large degree by some.

A client goes to a margin loan provider with say $100,000 in shares and wants to use that as security for a margin loan.  The bank doesn't need to find where that equity has come from, they just need to have evidence it exists.

The gearing issue which is unclear is the basis for which clients were able to borrow against their homes in the first place, when many didn't have the income to service it.  As you point out, mystery surrounds how clients with no income suddenly had a salary of say $100,000 put on to their application documents. I remember Manny on one of the current affairs shows unable to explain how this occurred.  Fraud I think it is called...if it was the banks who did it then they should pay, but again it seems uncertain just who is to balme.  Either way, Storm as the adviser allowed it to go through and being the gatherer of information on the clients, would have known whether they had the ability to service their debts or not.

And another thing, I realise I replaced "margin call" with "margin loan" a couple of times in a previous post.  A problem of the brain working more quickly than the fingers unfortunately...but the premise of my post remains the same


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## DocK (29 October 2011)

I've resisted contributing to this "debate" as I really don't have the energy to get sucked into an internet argument (again), however:

One aspect that I haven't seen addressed by posters recently is the actual relationship between the banks and storm.   I agree that normally a bank providing a margin loan would neither know nor care, (or be required to) where the funds/shares had originated from - they simply advance a set lvr against security held and issue a margin call (let's not worry who to in this instance) if the lvr is exceeded.  Likewise a bank lending against a home held as security will usually lend up to 80% lvr provided servicing can be proven (again, let's not worry about whether it was or not) and is not obliged to know or care what the funds are to be used for.

However - in most situations my banker is not operating from an office within my financial planner's building, and is not providing my financial planner with details as to my "untapped equity" so that I can be prompted to borrow more - to the advantage of both.  In most situations my banker has not been made so familiar with the strategy employed by my financial planner, and indeed have advanced them huge loans of their own, not to mention badging funds with their name etc.  Nor do they revalue my home in a manner they have now admitted was wrong in order to squeeze a bit more equity out of it - in theory. 

Storm always (to me, at least) made a big deal of the fact that they had such a close relationship with the banks they dealt with (especially CBA).  There was no doubt that CBA were aware of the strategy used by Storm.  There was no doubt that when my loan was approved the CBA did know what the funds were for.  While it _may_ not have any legal bearing, it is not unreasonable, I think, for Storm clients to see the closeness of the relationship between Storm and the banks and to assume that the banks endorsed the model employed by Storm.  This is where I feel let down by my bank.  Yes, the model was designed by Storm and most ex-clients would now agree was flawed, but not only did the banks fund it - I think they "tacitly" endorsed it.  Would ex-clients have proceeded with Storm's recommendations if we had needed to arrange our own finance/loan/margin loan etc with bankers who were not "hand-in-glove" with Storm, but completely unrelated?? - that's a question only those concerned can ponder and wonder about.  For myself - I think at the very least it would have made me stop and think a little harder.  I used to trust my bank (more than I ever trusted Storm) and had faith that they wouldn't tarnish their reputation with anything dodgy.  I know the strategy sucked, but without funding it's just a poorly thought out scheme - not the complete disaster that transpired.  To borrow someone else's analogy - who is more to blame - the person running the gas chamber or the one who led you to it?

And no, I'm not absolving myself of my share of responsibility for my circumstances. nor am I letting Cassimatis & crew off the hook (far from it!).  I just feel there is more to the banking relationship in this case than is usual - more than just who should issue margin calls to whom, and when, and whether loans should have been advanced in the first case.

Someone (Bunyip probably) asked Frank if he'd accept having his loan repaid in the unlikely event the bank were ordered to extinguish it - something along those lines at least.  I assume he meant to imply it would be somehow wrong or immoral to do so.  I don't know about Frank - but I sure as hell would accept it.  If such an unlikely order were to be made by a court it would hardly be made without reason.  Regardless of who else should or could be "blamed" for my situation - I don't have the luxury of wrapping myself in selfrighteousness and claiming the high moral ground.  Pride won't keep the roof over my head and able to provide for myself in retirement.  Saying "mea culpa" won't help my family one little bit.  I'd grab it with both hands.  If it came from the Cassimatii instead/as well, then so much the better.


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## Frank Ainslie (29 October 2011)

*Margin loans issues*

Up to now the Banks have been a law unto themselves when it comes to margin loans. They set out the conditions and you followed them or else! The Banks have perpetuated their “you can’t touch us” myth when it comes to margin loans and few have dared to challenged them. Indeed, few had the money to do so. You see, margin loans have flown under the radar and are not governed by statute law. Up to now, that is, because the new regulations, following the Storm Financial disaster have rectified this situation. 

Because the margin loans did not fall under any statutory regulations does this help the banks to defend their position in relation to Storm investors who were their customers? In my opinion it does not because any margin loan is a legal contract. Therefore, the issues must therefore fall back on common law and equity. 

Doobsy is of the opinion that the banks cannot be held liable where margin loans are concerned. This is a common view widely held by the financial sector. Indeed, even ASIC and members of Parliament have echoed these sentiments at various times. This is about to be challenged in Law. 

Also people for the most part in the financial sector are under the impression that Banks do not have to effect margin calls because the conditions of the margin loans contain clauses that state the banks can act at their discretion when so doing. 

Let’s look at a Macquarie Bank matter that will be discussed in Court when our cases are heard next year (bearing in mind Judge Greenwood's comments in a previous posting).

A document exists which reveals that Macquarie had an omission in its internal procedures that led to greater losses for its Storm customers as sharemarkets crashed in late 2008. This operational failure has never been made public by the bank despite its executives giving evidence before a parliamentary joint committee inquiry.

The document states that Macquarie failed to _"accelerate" _calls on its margin loans, contrary to a secret alliance the bank had forged with Storm. The document also states Storm customers were exposed to greater potential losses because of the omission in procedures.

This bank has stated that its margin call processes generally worked as they should have. Its concessions have been limited to _"administrative errors"_ not associated with margin calls.

The omission in procedures occurred when Macquarie failed to _"accelerate" _the margin call satisfaction process from 10 days to 24 hours when customers' loan-to*value ratio went past 90 per cent. 

The document states that because the acceleration did not occur it potentially increased customers' losses. The problem was fixed by mid- November 2008. 

Jose Isnard, from Townsville, said: _"We could have been $60,000 better Off had they sold us off at the 90 per cent on the margin call but we got sold at 97 per cent like many others." _

The Macquarie spokeswoman said their margin loan conditions did not bind the bank to accelerating the margin call process. _"There was a mechanism whereby if the loan-to-value ratio exceeded 90 per cent then we could reduce the satisfaction period to 24 hours from that point ... 

This was not an obligation of Macquarie under the terms of the lending documents but was action that Macquarie could take at its discretion."_

 Although the ‘Goodridge v Macquarie’ case was overturned on appeal, there were some aspects of Justice Rares findings that were not challenged. I shall now relate some of these to the last statement by Macquarie, namely that _"This was not an obligation of Macquarie under the terms of the lending documents but was action that Macquarie could take at its discretion."_ I shall also include the issue of the banks’ assumptions that the responsibility for such could be assigned to Storm: 

*(a)	NON·ENFORCEABILITY OF MARGIN CALL NOT MADE IN TIMELY MANNER* 

The Bank claims that because a clause in their margin loan contract states _"MAY” _it is within their discretion whether to effect margin calls or not. Of course this clause is designed to give them an out!

Judge Rares in his ruling in the _'Goodridge v Macquarie' _case said,

_"The various contractual rights given to the Borrower to satisfy a margin call elsewhere in Clause 5 would be negated if the Bank could act independently of anything the Borrower had done to comply with the time fixed by Clause 5.2 (to comply with the margin call). The parties were aware that the market could move favourably or unfavourably to the borrower during that period." _

Notably, and of particular relevance to CBA customers, His Honour referred to the NSW Court of Appeal decision in Morgan v BNP Paribas Equities (Aust) Limited [20061. NSW, CA 197, in construing the Clause in margin loan documents, namely that: 

_"BNP may notify you of the margin call and of details of the actions which can be taken to satisfy the margin call," by finding that in that context: "may" in effect means "shall", when it comes to making a margin call in terms of the loan agreement." _

A similar clause occurred in the later version of the Colonial Margin Call Agreement. 

_"Otherwise the client would simply not know what were the actions which should be taken to satisfy the margin call. Nor would the client know, in the absence of knowing a margin call existed, that actions were required to be taken in the first place." (per: Santow JA, with whom Gyles and McCole JJA, agreed)_. 

*(b)	OBLIGATION TO MAKE CALL NOT ASSIGNABLE *

Rares J. found that because _"obligations" as opposed to "rights"_ are not assignable, the obligation to make a margin call could not be assigned either.

As to whether Banks could assign to Storm the obligation to make a margin call, His Honour's finding with regard to the non-assignability of obligation is important. 

Notably, too, at para. 149, His Honour found that a notice on a webpage was insufficient notice - para. 149:  

_"Therefore, I am of the opinion that the webpages could not be notice to him of any assignment of his loan at law, by statute or in equity. It mostly invited speculation."_ 

Justice Rares quoted from Griffith CJ with approval in Anning v Anning [1907J 4 CLR 1049 at 1060: 

_“…written notice means a document addressed to, and intended to be retained by the debtor." _

So, you see, the issue here are not clearcut  and the assumptions by some forum members that the Banks involved with Storm acted legitimately are not based on the evidence to hand. That is why I am now presenting part of our case against the banks so that they, forum members, can then give consider the facts and give fair and impartial opinions. I believe that we can only have an open and robust debate when the facts are fully known. 

One last point to consider. I am not in the legal loop. Therefore, I can only work on the evidence that has presented itself. Our legal eagles have millions of documents to sift through and their evidence will be far more telling than mine. Whatever, I wouldn't be putting my money on the banks at this stage!


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## Frank Ainslie (29 October 2011)

_"If some Storm clients were in fact as well-heeled as the one you describe above, then why the hell would they get involved in a high risky strategy such as Storm proposed? Surely greed comes into play in that situation.” Bunyip_

*A submission sent to the PJ-C by a greedy Storm investor!*

_"On the 5/12/06 Storm Financial signed me up and took out a loan with the Commonwealth Bank for $460,150.00 For this the bank used the equity in my home and a block of land that I owned. 

It took Storm eight month to sign me up and then I only signed up with the guarantee that I would not lose what I already had. I had asked to be put in “low risk” and to leave enough money in the fund to pay out my loan. I was told that I would never lose as long as I did what storm asked me to do. And was told that they had insurance to cover me if any advice they gave me went wrong and I would then get back what I lost. 

Both Storm and the Commonwealth bank knew that I was only earning around $500.00 dollars a week, and that there was no overtime to be had to increase my wages. They had copies of my payslips. Storm also knew that I was injured and could not do heavy work like I used to do. Storm also asked me how my health was and reassured me that it should not take too long before I could retire. I told them I was no good at a desk job. I had also told them that I would never be able to pay this loan off as the interest on the loan was higher that the money I earned in a month, and the wages I was earning was barely enough to live on as it was. 

I was told that all I would only have to do is pay $500.00 a month to help out for the first Year or two and the fund would take care of the rest. Well it has been more than two years and now there is no fund left and the banks are after their money. Well I kept up with my part of the loan agreement paying $500.00 a month for over two years, and believe storm and the Commonwealth Bank should pay the rest as they said the fund will take care of it and knew my position as far as health and work and finance goes. 

I believe that I have been used, lied to and cheated. The Howard Government was asking people to invest and take the pressure off the economy by becoming self funded retires as there was not going to be a pension later in life. Or was the Howard Government part of this plan as well to gain the trust of hard working loyal people who have paid their taxes all their lives and are now being stripped of their life savings and being punished for trusting the people we were told to trust in the first place. If we cannot trust the Government the banks and other people we turn to for advice or help. I guess we should stop calling this Country the lucky Country and call it the Country of Louses, Liars, and Rip-off merchants. 

My health has suffered and I cannot see any reason for me to carry on. And to think 
my Dad helped to save this way of life by enlisting during World War 2. 

I first became aware of this when I rang home to check my answering machine on the 10/1/09 and their was a message from Andrew Leece from Macquarie Margin Loan telling me that if I do not pay out my loan within the next 4 or 5 days I would have to pay around $5000.00 dollars a month in interest. 

I cut my holiday short and came back home to see if I could fix up this mess. I rang Storm a number of times during December and the first week of January as there were a lot of stories in the paper about Storm. I was told not to believe everything I hear or read, and that I was in a good position to ride this out and not to worry as they had everything under control. Storm was a little disappointed that I did not trust them to the fullest and told me to enjoy my holiday and not to worry. 

I hope that you can restore what little faith I have left in this country and put this right sooner rather than later."_

Wait a minute! Didn't he rely on other people's integrity? Didn't he know that he couldn't trust the people that told him to do this despite the fact that they were  financial advisers? What a fool to rely also on the banking institutions that profess to have banking codes of conduct. Didn't he know that he couldn't count on ASIC or the statutory regulations to protect him either? If you ask me, he didn't know too much full stop!

Move over fool! I need to count my money! Next!


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## Frank Ainslie (29 October 2011)

*Issues with Housing loans for investment purpose.*

*Bank of Queensland (Colonial Home CBA were just as bad!)*

On 25 June, 2009, the BOQ made a statement to the Australian Stock Exchange saying, _"Based on the Bank's knowledge and enquiries to date: There is no evidence of improper or dishonest practices or conduct by the Bank in connection with Storm clients." _In evidence to a Joint Federal Parliamentary Committee in  September 2009, Mr Liddy stated, _"If there was wrongdoing in the [North Ward] branch and we had identified wrongdoing, we would take action."_[/I]

Evidence: (BOQ internal reviews)

_"Basically none of the info provided and input on the applicant is accurate... I would suggest that things may unravel at a rate of knots from this point on..." [Lindsay Johnson  BOQ Risk Assessment]

"North Ward branch had, in many instances, not included Storm client's margin loans as a liability when calculating whether they could afford more debt...

"On many referred loans a standard comment ‘no other debts held other than for example credit card etc' despite knowledge of an existing margin loan...

"Income confirmation is based upon a printout of Colonial Geared Investments" which indicated that they had a margin loan of $1.453 million. We should have investigated amounts borrowed and included in servicing....

"A print out of Macquarie Margin loan showed a debt of $724,000 however there was "no allowance in servicing for this debt...

"When applying for an earlier loan, in August 2006, the bank had on file a rate notice dated August 2004 which indicated a pension discount for Mr Reynolds, so the $100K income claimed in the application is obviously not true...

"Over and over again Storm had sent the North Ward an initial letter detailing margin loans but that these amounts were "not disclosed" in the Bank's computer system or the loan applications...

"In one case, the report noted that an initial letter from Storm had indicated a margin loan balance of $1,318,402 but that North Ward's co-owner manager Mr Matthew Buchanan had stated in comments recommending approval ‘No other debts held other than credit card facility...'

"Had such margin loan amounts been included in the Bank's serviceability calculations, it's highly unlikely the loans would have been granted...

"Noted that North Ward branch had accepted photocopies of disbursement authorities from clients on Storm letterhead. Best banking practice is that photocopies are not accepted because they are too hard to authenticate...

"Example of one couple who took a $1.168 million dollar Bank of Queensland mortgage. Their disbursement authority authorised the payment of $280,919 directly to Storm in what appeared to be a commission payment. This represents 24% of the loan amount...

"It is noted from review of some of the loan files that it could be construed that income and ongoing commitments may have been manipulated to achieve approval. Should this prove to be the case, then these loans could be set aside..."   [Jeff O'Sullivan, BOQ Senior Manager - Credit Risk Review]

"In the months following the initial 2006 credit risk review, action should have been taken by the BOQ's area manager and state manager to ensure the problem areas were fixed. But  there was a recurrence of the same sort of problems identified in the 2008 credit risk review...

"I have conducted a number of credit risk reviews of North Ward's business over the years and have previously questioned the integrity of the data on the files... These credit risk reviews had been conducted in late 2006/early 2007 and another in February 2008. In addition to these two formal reviews of the North Ward branch, there were two or three informal reviews initiated to "clarify some rumours that were going round the bank."  [Mr Alan Butler, BOQ Head of Portfolio Management and Financial Crimes]

"Prepare a report in relation to the processes that saw Reynolds (a Vietnam Vet also now mentioned by the ‘Sydney Morning Herald’) receive a loan, whether our processes were followed ... and any remedial action we may need to undertake in relation to customers... The purpose of the review was "firstly potentially being able to selectively use outcomes for external (press) purposes and secondly, whether our process has been followed... Sooner or later we will receive some hard questions about Storm, our relationship and affected customers. While, from what we have seen to date our position is defensible, there remain some gaps..." [Mr Bruce Auty, BOQ Group Excecutive]_

*Lying by omission*

One lies by omission when omitting an important fact, deliberately leaving another person with a misconception. Lying by omission includes failures to correct pre-existing misconceptions. Also known as a continuing misrepresentation. 

All three CEO's of the CBA, BOQ and Macquarie Bank have lied before the Parliamentary Joint Commission with regard to their Bank's part in all this. If you and I had done the same, the full weight of the law would come down on us. Banks are immune! But then I forgot! They always tell the truth anyway so it doesn't apply.


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## Gerkin (29 October 2011)

asset protection!!!!

storm advisers never took it into account, for ther clients, nor themselves.

my asset protection strategy.

have a home fully paid off,never give personal guarentees ever, if you do dont own anything.

have heaps in superannuation, creditors cant get it, unless you deliberatley hid it in there.

now i understand that alot of these storm advisers ended up underwater too. these guys should of gone about point 1 and 2 above, if so theyed be okay, now too me as they didnt it gives me the impression that they werent professionals.....any professional financial planner has appropiate asset protection themselves and it is paramount for there client, maybe they were truly just  NORTH QUEENSLAND COWBOYS


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## Julia (29 October 2011)

From the quoted portion contained within Frank Ainslie's post:


> I was told that all I would only have to do is pay $500.00 a month to help out for the first Year or two and the fund would take care of the rest.



So you just accepted that at face value?  Didn't ask how this would work?  Insist on seeing the figures which allowed them to make this nebulous claim?
Didn't your antenna go up at just the phrase "for the first year or two"?  How vague is that?



> Well it has been more than two years and now there is no fund left and the banks are after their money. Well I kept up with my part of the loan agreement paying $500.00 a month for over two years, and believe storm and the Commonwealth Bank should pay the rest as they said the fund will take care of it and knew my position as far as health and work and finance goes.







> I believe that I have been used, lied to and cheated. The Howard Government was asking people to invest and take the pressure off the economy by becoming self funded retires as there was not going to be a pension later in life. Or was the Howard Government part of this plan as well to gain the trust of hard working loyal people who have paid their taxes all their lives and are now being stripped of their life savings and being punished for trusting the people we were told to trust in the first place.



So now we are even including the Howard government in the blame game!  Simply because they perfectly reasonably suggested people should aspire to be self funded in retirement.  For heaven's sake!

Every day we have to make decisions about what to buy or what avenues of life to pursue.  The above suggests we should be able to simply accept whatever anyone tells us and believe that it's unbiased, disinterested advice.

If you want to buy a car and you go to a car dealer who tells you that for X dollars you can buy a car which will never go wrong, will not need servicing/ monitoring, and will actually make you money when the market for cars is falling, then frankly, if you believe this, you need to start all over again.

Once again, we have the sad story of someone who placed a completely unreasonable level of trust in a strategy which - if they'd just analysed it for five minutes - was quite obviously totally flawed.

I'm genuinely sorry that people have been hurt, but as long as you continue to believe you had no responsibility in accepting the suggested strategies, you're choosing to remain in victim mentality.

The much healthier option is to accept that **** happens to all of us, whether of a financial, emotional or physiological/psychological origin.  The best we can do is then to recognise what happened and to take the appropriate steps to ensure it doesn't happen again.



> If we cannot trust the Government



Trust the government?  What planet are you living on?



> the banks and other people we turn to for advice or help. I guess we should stop calling this Country the lucky Country and call it the Country of Louses, Liars, and Rip-off merchants.



Funny how in about 30 odd years of dealing with banks, I've never had a problem and indeed have found them entirely helpful and reasonable. 

  That's not to say they haven't engaged in some inappropriate behaviour in this case, but if you'd asked some questions instead of blindly following what should have obviously been ridiculous 'advice' the situation wouldn't have arisen.

Is Australia the Lucky Country?  I don't know.  Certainly, as with any other country, corruption exists.  As individuals we can't change this.  So if we want to survive, we need to protect ourselves and obviously avoid blind trust in a bunch of people who have self interest as the prime motivation.


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## Frank Ainslie (29 October 2011)

SJG1974 said:


> Frank,
> 
> Can I ask what you thought you were going to get for your 7% up front fees?
> 
> ...




Financial advice!


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## SJG1974 (29 October 2011)

Frank Ainslie said:


> Financial advice!




So there was no carrot to get you to fork out 7% on a geared up amount? You just thought this was the going rate for advice?

Did you go anywhere else and compare service offerings and costs? Again a short meeting with another planner or a browse of a few websites probably would have told you how inflated that fee was. I have heard the Storm line that it was cheaper in the long run than paying an ongoing fee, but again that is bulldust. Did you do your sums before handing your life across to them?

No disrespect intended, but for the life of me I can't comprehend how on earth a rational person could pay such a price for such simple advice unless there was some kind of carrot dangled in front of you...a guarantee of sorts that you would earn this much or that.

I mean you don't go to a shop and pay for goods without some idea of what their market price is do you, unless the bells and whistles that go with it are supposedly worth the extra money?


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## Harleyquin (30 October 2011)

Julia you're one of the lucky ones if you've never had any problems with the banks in this country.  Once you start asking people of their experiences with our banks you realise that there are in fact major problems.  As one businessman recently said something similar to this, 'I only go to bank x because it's the best of the worst'

That's how the majority of us think and there is a class action, the largest in Australian history I believe, were thousands of people have joined forces to fight the greed of these huge money making institutions.  If you're a customer you're just a cash cow.

They pay their CEO's millions pa, they make annual profits in the billions pa, they pay their tellers and minor staff little more than a basic wage, there are huge pressures put on bank employees to sell the banks products, many ex bank employees are now the most anti bank people in this country and they offer nothing to the customer.

I make a point of questioning ex bank employees when I find out that they've worked for a bank and the stories that they have to relay support what I've said above.  I have spoken to three who left with major stress problems caused by the banks attitude to its employees.  Their remarks concerning the storm financial scenario are also very very interesting.

I've had a lot to do with a range of professionals in recent years and the subject of storm financial is never far from the surface and has been the subject of many an interesting conversation.  The number of people who say to me 'the banks have a lot to answer for this' is quite amazing.  I often wonder if any of the banks realise just how much damage this case is doing to their reputation, it is certainly not doing them any favours.

Their only objective in life to to make as much money in the shortest possible time and by any means.  Once upon a time before deregulation you got service from the banks, this is no longer the case.

As you've said they are huge public companies and the only people who have any level of respect for the banks today are the shareholders, and that trust is equivalent to the amount of shares that they own,  The banks shareholders don't care what the banks do as long as they make a profit on their shares and they are the first ones to scream if they don't 

I can't believe that any shareholder would vote to pay their CEO millions per year.  This is a monstrous amount of money and nobody needs that level of money to live comfortably, it's sheer greed.  This line of thinking is perpetuated by Wall Street and there is no need for us to follow their lead when you look at what the banks have done in the US.  Once again the level of their wage is no guarantee that you're getting the best man or woman for the job.

I would like to see a return to the good old days where the local bank manager was a person who you could trust and he had our respect.  I wouldn't trust any of them and certainly have no respect for them.  Personally I think they are the major perpetuators of greed and corruption in this country.


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## bunyip (30 October 2011)

Frank Ainslie said:


> _"If some Storm clients were in fact as well-heeled as the one you describe above, then why the hell would they get involved in a high risky strategy such as Storm proposed? Surely greed comes into play in that situation.” Bunyip_
> 
> *A submission sent to the PJ-C by a greedy Storm investor!*




Frank

You really should read things more closely.
Here is what I asked...._."If some Storm clients were in fact as well-heeled as the one you describe above, then why the hell would they get involved in a highly risky strategy such as Storm proposed? Surely greed comes into play in that situation.”_

You just don’t get it do you Frank? My question, and the comment about greed that followed the question, was in relation to people who were already well-heeled when they went to Storm. I was not referring to someone who’s trying to scrape by on $500 a week like the man who sent in that submission to the PJ-C.

I believe my question was a fair one, and the reason that I and others have asked it a number of times is because nobody has yet come up with a plausible answer. In fact I put this question to you about a week ago, but you chose to ignore it, which of course is your right – I have no problem with that.
Just to jog your memory, below in bold print is what I asked you.

*Frank.....The 75% of Stormers you mention who were self-funded retirees and were already 'financially self-sustaining'......I'm wondering why they weren't happy to just continue living the good life, letting their passive income fund the reasonably comfortable lifestyle that's the privilege of self-funded retirees?
Why would they risk that by getting involved in heavy borrowings to fund stock market investment?
And in particular, why would those who were actually quite wealthy feel any need to chase any further income, particularly if it meant mortgaging their previously unencumbered home?
I realise you can't speak for everyone, but maybe you can tell us why you personally took this step, given that you already had significant wealth from the sale of your* *shopping center?*

And Frank, don’t bother telling me that self-funded retirees are not necessarily wealthy – I’m well aware of that. But some Stormers, albeit a small minority, were seriously wealthy before they approached Storm. So the question arises, ‘why did these seriously wealthy people do it when they had no need to’?
The answer?....well I guess that depends on your perspective, but it appears that the desire for even greater wealth overcame their good judgment.
Or to put it more bluntly, they just got greedy.

So argue all you want, Frank. But if you’re already loaded and you just keep wanting more and more wealth, then tough luck if you finally run aground because your greed clouds your judgment.


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## Harleyquin (30 October 2011)

Bunyip what has the fact that stormies may or may not have been wealthy pre storm got to do with seeking financial advice?  Why is it considered by some to be a sign of greed to seek help with your finances irrespective of your financial circumstances?

Has anyone on this forum seen any evidence that if you are well heeled that you shouldn't be seeking financial advice from financial planners or banks.  Even large companies with billions at their disposal employ people to advise them on financial matters.

I would think that the more money you have the more help you would need to make sure that it is preserved.  Is this so wrong.

Whereas for those of us who are on ordinary wages, we are seeking financial help so that we have enough to retire on.

Then there are those who inheret a great deal of property and or cash and suddenly they find themselves in unfamiliar territory,  they are now considered wealthy, but in need of some serious financial advice.

Financial planners, ASIC and banking people all know that they are dealing with clients who have a range of financial skills but generally are not as financially astute as they are and that's why they are in business in the first place, to help those who need help with their financial plans.

Surely the real answer to this is to have genuine people in charge of financial advice firms and other financial institutions.  I recently had a year 12 student, who is studying accounting, that one of the first statements in her text book is 'accountants need to be accountable.'  Maybe someone else can verify this.  

If this is the case then they, ie the financial people offering their 'services' to clients also need to be accountable.


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## Frank Ainslie (30 October 2011)

maccka said:


> At the risk of being flamed...
> 
> One of the things that particularly frustrates me about this forum is that so many people who post here seem to believe that the world is black or white.
> 
> ...




Hi Maccka,

Spot on!

_"Opinion is a waste of energy and time! What we need is cold hard proof." _

 I do not have the time to waste on people that are here to massage their own egos. I will supply as many of the facts as possible, then let you and they be the judges!

The blame game has been going on since this first started. There were various parties involved and the blame must therefore be shared around! No one party is the cause of all this. Storm may have had the gun but it needed to get ammunition from somewhere. The gun (financial) laws in place were inadequate and the sheriff was asleep on the job.  Result! One big **** up! 

People on this forum that are trying to blame just one party are uninformed. They have to be to ignore the evidence that has already been uncovered. This is one of the most complex cases in Australian financial history, and it will probably set some new legal precedents. Trying to tie it all up in a neat package as many are trying to do is just not possible, questioning the victims as to their motives in using Storm is non-productive, and blindly supporting the banks or Storm is ignoring the available evidence that binds all parties together.

Good post!


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## Frank Ainslie (30 October 2011)

The Storm Financial model (Just for the record)

There have been people even within SICAG that have been prepared to defend the Storm financial model. A report was prepared by Mr. Brett Walker on the instructions of the liquidators. He is an expert so I think he should have the final say:

_In relation to whether clients of Storm should have ever been advised to mortgage their home for the purpose of investing the loan proceeds in index funds (as was Storm's advice to many clients) Mr Walker states: 

I believe the risk capacity of the clients would have excluded their primary residence from any investment-related strategy unless there was clear evidence before the advice provider that the clients were people with a risk tolerance significantly higher than the average retail investor. 

It is my opinion that the level of risk tolerance required of a person being asked to embark on a gearing strategy using their primary residence as collateral whilst also borrowing funds and securing that loan against the assets being invested into (in this case unlisted index funds) is such *that fewer than 1 % of the population would be considered a suitable "fit"*. 

And 

It is my observation that the majority of financial advisers specifically exclude each client's primary residence from their assessment of "available" investment assets for the very simple reason that, to recommend someone use their home as collateral to invest in potentially volatile investment markets would not be in the interests of the majority of clients. 

And 

I am of the view that gearing to meet one's financial objectives is an option that should only be proposed to people who (in the advice provider's sincere and objective view) have the appetite for the risks associated. 

In my opinion there are very few people (especially those who would be characterised as "retail clients'? who would be a good fit for this type of investment strategy 

In my opinion the inclusion of the family home in any investment strategy is an indication that the investment strategy is unsound unless there is clear evidence of the attendant risks (e.g. losing the home due to falling markets) being within the risk appetite of the client. 

In order to reach that conclusion a professional advice provider would need to establish through some objective means that they had tested and assessed the client's attitudes and psychology in relation to such a risk-taking scenario (i.e. pledging their primary residence in pursuit of speculative gain) and that testing and assessment would need to have displayed a clear preference for the assumption of that risk. 

In my opinion the suggestion that a client include and thus employ their primary residence in their investment portfolio can rarely be in the interest of the client. 

In my opinion suggesting to the clients that their residence created an exposure of any kind to the investment property sector was fallacious in the context I have seen it used in the Statement of Advice 

In my experience the primary residence is most often considered by professional financial advisers to be an "excluded asset" when it comes to designing investment portfolios. The reason for this approach is that for most advisers the risk of a client losing their primary residence in pursuit of an investment objective the adviser has recommended is a risk too great for them (the adviser and the Client) to contemplate. 
_

What did he say, *"...fewer than 1 % of the population would be considered a suitable "fit"*. I think we can leave it there!


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## Frank Ainslie (30 October 2011)

The Storm Financial model  (Part 2)

Mr. Brett Walker also stated:

As stated in the prospectus issued by Storm, new and existing clients were subject to _"an extensive education process"_ relating to the proposed investment. Further the formal advice which clients received was long and detailed. The accuracy and relevance of the material included in the education process and the formal investment advice was closely examined during the public examination process. 

In section 6 of this Report we summarised the relevant statues governing the contents of Statements of Advice (SOA) and in the annexure to this report we reproduced the relevant legislation. In short the statues make it an offence to provide a SOA which is defective or misleading in a material particular. 

The SOA that Storm normally provided to clients included propositions with which Mr Walker, the liquidator's expert, disagreed. Among the propositions which Mr Walker disagreed with were the following. 

* The proposition that it is necessary for a client to gear to meet his or her financial objective.

* The proposition that a clients family home should generally be treated as an investment asset, as opposed to treating it as sacrosanct 

* The use of the term "claytons debt" by Storm when referring to funds borrowed by clients in pursuance of the advice given by Storm. In that connection Mr Walkers observes: 

Given the likely public awareness of the term _"clayton's"_ as a term that implies the opposite of _"real"_ or _"actual"_ it seems likely to me that the use of the phrase _"Clayton's debt"_ would have suggested to Storm clients that the use of debt to finance the acquisition of income-generating capital was preferable to the use of debt to do anything else within the context of their investment goals. In my view the use of such a term would suggest to a reasonable person that anything labelled "Clayton's debt" was not really a form of debt at all. In my view that is an inappropriate use of the term. 

• The inclusion of a chart which compares growth and dividends on shares to just growth (without rent) on property. In that connection Mr Walkers observes: 

To the extent that the graph does this I am of the view that it is a flawed comparison. In my opinion you cannot competently compare asset classes (especially assets within the growth sector) unless you compare growth and income components of each. It is clear to me that the table creates the distinct impression that Shares are an asset class far more likely to provide capital growth over the long term than Property (even Sydney*based residential property). I am unaware of the precise impact including rental income would have on the numbers in the table but am of the view that such information would tend to show Property in a more favourable light than is implied in the table as it appears in the SOA. 

• The prediction that it is likely "property prices will remain flat or decline over the next 5 to 15 years in real terms". In that connection Mr Walkers observes: 

In my opinion this is a sweeping statement that appears (whether deliberately or inadvertently) to include cyclical property sectors like commercial and industrial as well as residential sectors. 

I say this even though the content of page 15 appears to be focused exclusively on residential property. The term "property prices" is unqualified and might therefore suggest to a retail client that property as an asset class was unlikely to be as effective an investment option as the managed funds Storm was recommending to them. 

In my opinion the statement seems aimed at eliminating property as an option for consideration under the "Journey to Capitalism" concept being promoted by Storm. When considered in the context of page 9 of the SOA and the advice provider's presumed expertise in investment decision making it seems highly likely to have put paid to any consideration by the client that property was a viable alternative for investment gearing or other purposes. Given the sheer breadth of the property market (by State, region, sector  (commercial, industrial, residential}, structure [listed, unlisted, individually held, pooled] etc.) and the very real likelihood that different sectors within it will experience different demand and supply impacts over time I find the blanket prediction at page 15 to be an unreasonable prediction, particularly given the apparent context of its use. 

Mr Walker also states in his report: 

Since 1992 I have reviewed hundreds of both Statements of Advice (since 2002) and 
Financial Plans (prior to that). ln that time I can recall only one other instance of a piece of written advice that the advice provider required the client to sign an acknowledgement at each page that they had read and understood it. In the context of a 110 page document such as the Storm SOA I find it extremely difficult to believe that a client (even one who has been drilled in the process through a course of meetings over 183 days) could make sense of the majority of the content within the SOA. 

I am not aware of the context in which each page was signed but would be surprised to be told that the advice provider read and explained the import of every word of every page to every client as they signed each page in acknowledgement of their understanding. 

One of the cornerstone rules in relation to SOA content is contained in sections 9478(6) and 947C(6) which requires that 'the statements and information included in the Statement of Advice must be worded and presented in a clear, concise and effective manner. "In my view the SOA is unclear, verbose and ineffective.

I mean "_unclear"_ in that the SOA fails to establish in my mind what the relevant personal circumstances of the client are, hence rendering its advisory content invalid. I mean "verbose" in the sense that the 110 pages (plus appendices) does not appear to do anything more than deliver the message I summarised above: That is: 

* Re-finance your home loan to enable those borrowed funds (net of any existing mortgage debt repayment) to be applied to the acquisition of unlisted managed investments - presumably outside of the superannuation environment. 

* Make sure the new loan is "interest only" in order to minimise the repayment amount. 

* Take out a margin loan that will be secured against the value of investments into unlisted managed investments. 

* Invest any income generated (net of repayment of interest on each of the above loans) by the above investments back into the same unlisted managed investments. 

I mean _"ineffective"_ in the sense that the SOA appears to avoid or ignore any need to assess what the clients actually want to achieve and to then assess that in terms of what they can afford to risk and what they can bear to risk in pursuit of that objective.


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## Frank Ainslie (30 October 2011)

*A question of greed! *(Part 1) For Bunnyip and the other doubters

There have been a number of assertions by some uninformed people since the ‘Storm Financial’ collapse that clients of Storm Financial were simply greedy and, as a result, they took unnecessary risks that culminated in their losing everything when the global financial crisis occurred in late 2008. In other words, _"we were well aware of the risks we were running and went ahead and participated in the Storm scheme anyway!"_
Nothing, in fact, could be further from the truth! You don't put aside a nest egg for retirement by being stupid! Nor do you gamble in the hope that you might get lucky! On the contrary, we were circumspect and sought investments that were _"low risk"_: employing an investing strategy on a broad front. Or so we thought!

That is what Storm Financial sold us anyway, but they forgot to tell us that they and the banks had their own agendas. They had plans in place to use our money for their own ends Let’s now look at the financial plan Storm and the banks that supported that advisory firm promoted:

Storm’s SOA - Page 60 of 107 - Mr VF Ainslie & Ms HM Gillies 15th May 2007

_“Real & Manageable Risk

There are two types of risk: real risk and manageable risk. Each of the following types of real risk involves the loss of your capital, or the loss of income. This is true whether the capital and income lost is that you have already earned, or is the capital and income you had the potential to earn, but did not earn because of the choices made. Real risk is the possibility of irrecoverably losing some or all of your capital.

We have identified 3 distinct types of real risk:

* Default Risk is the potential to lose your capital because the company you have invested in has become insolvent or bankrupt.

* Asset Selection Risk is that risk associated with choosing the correct asset classes in which to invest; and:

* Share Selection Risk is due to the uncertainty that you will choose correctly ahead of time the companies that will perform well in the future.

Another kind of risk associated with investing is that the returns you earn will be higher in some years than in other years, and in still other years the returns may be negative. This variability of returns, or volatility, is what financial markets refer to as 'risk'. This understanding of the term 'risk' lets us see the truth in the old saying “the higher the risk, the higher the return”. It is true to the extent that assets with high returns have higher volatility than assets with lower average returns. In order to attain the relatively high returns delivered by Share-based assets, we need to accept the inevitable volatility associated with that asset class. We term volatility or variability of returns as 'manageable risk' - the returns will be variable, but over a longer time frame there is certainty that the asset value will rise.

An Indexed Share Investment captures these average market returns, *allowing us to eliminate Default risk, Asset Selection Risk and Share Selection risk*. We manage the volatility of your Investment by ensuring that you have adequate Cash Reserves to use for your Plan when the income and capital growth from Shares is low. When the returns from your Share Investment rise, we will replenish the Cash Reserves; in this way they act as a 'dam' to ensure that the variability of returns becomes insignificant to the operation of your Plan. It is very important that these Cash Reserves be maintained for the purpose described above - they are not provided to finance private spending, and should not be used for any purpose without prior consultation with us.”_

Sounds great in theory but we, the investors, had no way of knowing then that Storm would not follow these parameters. For one, these so-called _“Cash Reserves”_ were drained by Storm in order to shore up their financial model in a falling market.

In retrospect, it has now become evident that Storm’s model was never designed to allow for a rapid market decline or significant drops over any sustained period of time because cash reserves would be depleted to the point where nothing was left. Neither the banks or ASIC realized that this basic flaw existed in Storm’s financial strategy until it was all too late! We, the investors, certainly didn’t because we were led to believe that safeguards were in place that would alert us when agreed ratios had been reached.

Storm’s SOA - Page 61 of 107 - Mr VF Ainslie & Ms HM Gillies 15th May 2007

_“Risks Associated with Borrowing to Invest

Borrowing to invest introduces a new element of risk to any Financial Plan. As well as magnifying gains and losses as described above, using shares as security to borrow investment funds can put the investor in the position of margin call. This occurs if the listed price of shares falls below a level that would cover the lender's loan to you, and then the lender will ask you to contribute the difference. This ensures that the lender's exposure for the shares remains the same.

For most investors, particularly if you have an average income, it is wise to only borrow a limited percentage of the price of 'the shares or units if you want to gear into the market. Although this means the number of shares or units you can buy will be less, so the value of the potential profits and tax breaks will be less, it also means there is less chance you will suffer a margin call. ASIC (1988J Pages 138·139.

This quote highlights a very important facet of our Recommendations. We have advised that you use borrowings to facilitate the purchase of business assets. In so doing, we have used strict guidelines on the amount of those borrowings, and have related them to the size of your asset base. As has been explained within this document, should you implement these ‘Recommendations’ in full your overall debt ratio would be 48%, which is made up of liabilities of 80% of the value of your home and other Property assets, and 49.17% of the value of your Sharebased assets.

*These debt levels are well within our guidelines as being prudent*. Adequate arrangements have been made to handle market volatility and the associated potential for margin call - these have been fully described and explained in the section of this document entitled Your Post-Plan Position.”_

One can see now by the evidence at hand that what Storm preached is not what it practised! The overall debt ratio was never adhered to and Storm had no software in place to capture the total debt anyway (margin loans for instance) so the 48% was a figment of Storm’s imagination, or to be more precise, a blatant lie promulgated by Storm to deceive people. Storm in its SOA’s expounded on the dangers of borrowing and reassured investors that its approach was a cautious one, when all the while, Storm real intent was hidden, and its approach to its clients’ assets was reckless and unmindful of the risks involved.

If Storm’s scheme was, as many claim, a get-rich scheme no one told the investors who had been assured that the risks were minimal and the concentration was on long term growth rather than a quick return.

Storm’s SOA - Page 79 of 107 - Mr VF Ainslie & Ms HM Gillies 15th May 2007

_“Your Investment Timeframe

During our discussions, you have indicated that you initially wish to consider wealth creation to cover your immediate living needs and continue the growth of your assets to produce an income for now and over the next ten-year period. We have discussed this time frame and have explained that our recommendations need a minimum of a five-year time horizon due to the nature of the investments required to meet your goals. An Investment may be profitable within shorter or longer time horizons depending on which part of the economic cycle prevails at the start of your Investment. However, it is our advice to you that the longer time horizon will allow you to ride out whatever volatility the market presents and still allows for a profit to be generated.

The building of wealth is a journey - it is not a single event. We anticipate that implementation of these Recommendations is the beginning of a process that will endure for the rest of your lifetime. However, it is reasonable to expect to begin to enjoy the proceeds of the Investment well before your lifetime is over! Before proceeding with implementing this Plan, it is important that you understand that a minimum of 5 to 7 years is required before you can expect to be spending from the profits of the Investment.”_

This doesn’t sound like a get-rich-scheme to me or one that would entice risk takers to come on board. In fact it had just the opposite affect on us because it reassured us that Storm Financial had our long term goals in mind and would not be taking any undue risks with our money. As it turned out, Storm used this sort of wording to allay their customers' fears of any risks involved. 

The first question that elderly people ask (75% of Storm’s clientele were past retirement age) before they entrust their money to anyone is, _“Are there any risks involved?” _Storm used this type of _"risk free"_ psychology to win people over. They knew full well that the last thing elderly people want to do is put their life savings at risk. Only a fool would think otherwise.


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## Frank Ainslie (30 October 2011)

A question of greed! (Part 2)

Last, but not least, is the matter of margin loans. We have been castigated by many for taking out margin loans that only added further to our debt. 

Quite frankly, most of us had never heard of margin loans until we went to Storm Financial for advice. Indeed, Helen and I didn't need to take out margin loans because we already had 1.7 million dollars unencumbered in assets. Storm, however, saw it differently. Don’t forget that Storm professed to be professional financial advisors who are supposed to be knowledgeable in their field. In fact, they were quick to point out that they were the experts and we were not! Storm told us that the firm had been operating successfully for years; were backed by some of the major banks in this country; and it handled countless investment portfolios! Storm therefore, it claimed, had the necessary credentials to advise us and manage our money. Who were we to argue or doubt them? As I've said before, Cassandra wasn't around to consult!

So when we were advised to take out margin loans and do all the other things they told us to do, we thought we were acting on solid financial advice. Again, we had no reason to suspect otherwise. 

Storm’s SOA - Page 64 of 107 - Mr VF Ainslie & Ms HM Gillies 15th May 2007

_"The main difference between a margin loan and a conventional bank loan that uses property as security is that shares change in value each day. This means you can check the daily market value of your investments, and the lender will also monitor your portfolio value daily. If the value falls below an agreed minimum, the lender will require you to make a margin call._

Before we signed with Storm I asked them whether they would be monitoring our portfolios. They assured us that they had systems in place _"trigger-points" _so there was no risk to our investments. In fact, I have evidence on hand that they told us this and I may yet be using this in a Court of law if Cassimatis gets any money back! That's another story! 

I've had our own financial adviser taken off the streets by ASIC. If he has any assets left, he should start worrying as well. Anyway, back to the subject in hand.

_"A margin call will be made if your equity - the value of the assets that you contributed to the investment - falls below the agreed lending ratio. If this happens, the lender will ask you to provide additional funds to restore at least the minimum equity position. To help protect against small market fluctuations, there is usually a 'buffer' (typically 5% of the total portfolio value) within which a margin call will not be made.

A margin call requires prompt action to repair, so it is important to plan what you would do if you were faced with one. There are a number of ways you can satisfy a margin call. You can:

*Provide cash to reduce your loan balance
*Provide additional shares as security
*Sell shares from your portfolio and use the proceeds to reduce the loan_

_*If you do not initiate one of these actions, the lender will act on your behalf, usually selling shares to reduce the loan. The best way to avoid margin calls is to be conservative in the amount you borrow."*_

Let’s look at what happened in reality:

The banks didn't notify us, the Storm investors, when margin calls were made but rather Storm Financial under covert agreements they had with that company. Because they were covert, Storm’s investors knew nothing about them.

Margin calls should be made by prudent banks to their customers within _‘5 days’_. It took the Macquarie Bank 3 to 4 weeks to notify their Storm clients directly and some 10 to 11 weeks for the CBA bank to do the same. Incidentally, many margin calls were never made directly to their customers although the exact numbers are still unknown. In a volatile market where days and even hours are critical at times, can you imagine the impact these delays had on customers portfolios.

In these covert agreements between Storm and the CBA/Macquarie Banks, ratios and conditions were agreed to that were not part of the original agreements between the banks and Storm’s clients. It's called breach of contract! Storm Financial were not a party to these contracts and therefore the banks and Storm had no right to alter the conditions of these contracts.

In summary:

It doesn't take a genius to work out that greed was certainly involved in the Storm financial debacle. The greed, however, was not on the part of the Storm investors involved who were innocent parties in all this. Rather, it was on the part of Storm Financial and the rogue banks who conspired together to churn money out of their Storm customers for their own ends. Certainly, nothing that they did benefited the investors concerned in any way. The result was that it left the clients of Storm who were also the customers of these banks destitute, and in some cases, deep in debt.  So much for responsible and prudent financial advice and prudent lending as outlined in so-called banking codes of conduct.

Before anyone judges us in the future, we ask them to do one thing! _"Please ascertain the real facts before throwing that first stone!"_ What happened to Lindy Chamberlain should be an object lesson to us all here in Australia not to assume anything simply on what they read in the media or on the word of some smart Alec that is professing to know something he or she doesn't!


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## Harleyquin (30 October 2011)

On the question of 'dangling the carrot', might I suggest that a bunch of golden carrots were dangled under one EC's nose, and the owner of that nose grabbed the said carrots with all paws and claws.   This was the ammunition that the empty gun needed.

No need for any survivor of this crime to feel stupid we were duped by the whole industry and we're still getting duped by those who don't want to acknowledge the truth.  

No survivor is going to put any hard evidence on a public forum, there will be a time and place for that to happen, and if the powers that be are doing their job properly, there should be an interesting day or two in court.


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## Julia (30 October 2011)

Frank Ainslie said:


> A question of greed! (Part 2)
> 
> Last, but not least, is the matter of margin loans. We have been castigated by many for taking out margin loans that only added further to our debt.
> 
> Quite frankly, most of us had never heard of margin loans until we went to Storm Financial for advice. Indeed, Helen and I didn't need to take out margin loans because we already had 1.7 million dollars unencumbered in assets.



This is the point so many of us find so astonishing.  Even invested in the most conservative fashion, this amount of capital (which is presumably in addition to the value of your home), should have clearly been enough to fund a perfectly comfortable retirement.

Bunyip has a  very good point when he suggests if you were prepared to risk this amount to make even more, you can rightly be suggested to be greedy.




> In retrospect, it has now become evident that Storm’s model was never designed to allow for a rapid market decline or significant drops over any sustained period of time because cash reserves would be depleted to the point where nothing was left. Neither the banks or ASIC realized that this basic flaw existed in Storm’s financial strategy until it was all too late! We, the investors, certainly didn’t because we were led to believe that safeguards were in place that would alert us when agreed ratios had been reached.



But surely you would have insisted on receiving a detailed explanation of what these 'safeguards' were?????



> Storm, however, saw it differently. Don’t forget that Storm professed to be professional financial advisors who are supposed to be knowledgeable in their field. In fact, they were quick to point out that they were the experts and we were not! Storm told us that the firm had been operating successfully for years; were backed by some of the major banks in this country; and it handled countless investment portfolios! Storm therefore, it claimed, had the necessary credentials to advise us and manage our money. Who were we to argue or doubt them? As I've said before, Cassandra wasn't around to consult!
> 
> So when we were advised to take out margin loans and do all the other things they told us to do, we thought we were acting on solid financial advice. Again, we had no reason to suspect otherwise.



Except that you simply failed to ask yourselves "does this stand up to the common sense test"?    and, in detail:   "what exactly are the protections that are in place to safeguard our investment?"

Frank, I'm not sure why you're continuing to post screeds of stuff that has no relevance to the above absolutely simple criteria which is the crux of your whole problem.



Harleyquin said:


> No need for any survivor of this crime to feel stupid we were duped by the whole industry



Oh, for goodness sake, HQ.  You were not duped 'by the whole industry' at all.
You were taken in by a rogue firm, you didn't ask the most basic questions, so allowed the bad guys to get away with their duplicity.

It's absolutely unreasonable and unfair of you to stigmatise the whole industry.


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## Judd (31 October 2011)

Julia said:


> ......Oh, for goodness sake, HQ.  You were not duped 'by the whole industry' at all.
> You were taken in by a rogue firm, you didn't ask the most basic questions, so allowed the bad guys to get away with their duplicity.
> 
> It's absolutely unreasonable and unfair of you to stigmatise the whole industry.




A valid point Julia.  However, if I had been smashed to the extent that former Storm clients have been, I'd probably feel really bitter about it.

I don't believe that Harleyquin, and possibly others, should be beating themselves up to the extent that they seem to be.

In my view, very few couples or individuals actually plan, and I mean plan, for their retirement.  Not many would actually clear the dining room table on a wet Saturday, sit down a decide the level of funds they will need to retire.  Home owned, need to cover rates, water, electricity, gas, insurance, car rego and insurance, telephone/internet, repairs and maintenance.  And then build onto that the wants (holidays, entertainment.)  After which by all means go to a planner if they wish to see if they are on track or need adjustment according to circumstances.  And it should be done many years out from retirement not just four or five years because there is simply not sufficient time.

As well, I can understand how a number are affected by the white noise - also known as financial pr0n -coming from various quarters.  You should do this, you're unable to do that without assistance (at a price of course.)  So Ma and Pa read a survey conducted by an institution stating they need $60k pa or $1m to live comfortably in retirement and off they go trying to get that.  What they are not told is that according to statistics (admittedly compiled before GFC Mk I) only 5% of couples aged 65 will retire with $1m so they are likely to be in the 95% and need to adjust their expectations accordingly.

Ah well.

As for various organisations such as the FPA not looking after their interests, it, like other organisations, is merely a lobby group/union.  A simple scan of their website shows that planners come first and clients (vaguely) third.

Having said that, there are planners who do work very hard on behalf of their clients.  Some may have been aware of the Storm model and its outrageous fees but they were not being paid to look after the interests of Storm clients only their own.  As an anecdote, I had lunch with a mate who is a financial planner (despite that, he is a nice guy) and he told me of one couple who, against his advice, have decided to "build" a share portfolio using CFDs.  What is he to do, except document his advice, send them a copy, terminate the relationship and leave them to it.  Their money, their choice.  Same with Storm sadly.

Some things will never change.

I notice that the former Howard Government has, indirectly, been brought into the Storm blame game.  What next I wonder?  Will it be Choice, the consumers champion, for not exposing Storm before it knew about it?  Oh hang it, everybody else has been, so why not?


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## Frank Ainslie (31 October 2011)

Harleyquin said:


> Bunyip what has the fact that stormies may or may not have been wealthy pre storm got to do with seeking financial advice?  Why is it considered by some to be a sign of greed to seek help with your finances irrespective of your financial circumstances?
> 
> Has anyone on this forum seen any evidence that if you are well heeled that you shouldn't be seeking financial advice from financial planners or banks.  Even large companies with billions at their disposal employ people to advise them on financial matters.
> 
> ...



Hi Harleyquin,

_“Speak you truth quietly and clearly…Avoid loud and aggressive persons. They are vexations to the spirit!”_

You have covered all the bases very well in this posting. I can’t really see how people could argue with what you have said but they will! 

I too have also taken the time on this forum to explain our position, quoting details from our Storm SOAs to refute suggestions by some on this forum that we Stormies were all greedy and just wanted more. Again, I’m afraid, it won’t make one iota of difference to some how much irrefutable evidence we have because they just don’t want to listen. They see everything in terms of _"black and white"_ because they are blinkered by their own jaundiced views of the world.  Shades of that “jury’ I sat on last year spring to mind.

It’s really a waste of time engaging such people in any form of discussion because they are just going to keep spouting the same line without a single shred of evidence to substantiate their mantra, “You were all greedy!”

Not one of these all-knowing individuals has once commentated on the Banks’ roles in all this despite what I have written in this regard. This alone tells us something about their thinking. They are simply not interested in getting at the truth. They would rather hold on to the notion that the victims are really to blame together with the Greek that came bearing gifts, one E. Cassimatis. It seems to give them some comfort some how!

Their attitudes are really strange when you would think about it because they are not indignant at the thought that banking institutions in this country are capable of miscreant behaviour? Only at us for having invested through Storm. I can't believed that rational human beings would choose to completely ignore the facts and must therefore conclude that such people have a vested interest for adopting such an attitude. 

Personally, if I were you, I wouldn't be  wasting any more time answering their posts because they will only expend your time and energy for nothing. I’m sure there are others on this forum that do want to hear what happened so they can weigh up the facts. I'd focus on them if I were you and ignore the detractors. They aren't worth the effort!

As for me, I’ll keep on supplying my “screeds of stuff ”as someone put it in the hope that we still have some forum members left with an open mind. 

That’s all we Stormies are really asking for really. People that will judge us on the facts and not on hearsay or people’s own personal prejudices. If they don't want to listen, so be it!


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## Julia (31 October 2011)

Judd said:


> A valid point Julia.  However, if I had been smashed to the extent that former Storm clients have been, I'd probably feel really bitter about it.



Oh dear, no one is denying former clients their bitterness rights.
I am simply pointing out that it is absolutely unreasonable for any of them to claim that they were "duped by the entire industry".

And, on bitterness, We have a choice about whether or not to hold onto bitter, aggrieved feelings.  Most of us will have experienced injustice and the ramifications of the bad behaviour of others at some point in our lives.  After a period of anger and grief, it's usually more healing to let it go.  At least, so I have found.





> In my view, very few couples or individuals actually plan, and I mean plan, for their retirement.  Not many would actually clear the dining room table on a wet Saturday, sit down a decide the level of funds they will need to retire.  Home owned, need to cover rates, water, electricity, gas, insurance, car rego and insurance, telephone/internet, repairs and maintenance.  And then build onto that the wants (holidays, entertainment.)



Well, Judd, I don't know anyone who hasn't so planned.  It's a pretty basic thing to do.  And if people haven't, then they have only themselves to blame.  Surely you'd think about this just as you'd budget for every other phase of your life.



> As well, I can understand how a number are affected by the white noise - also known as financial pr0n -coming from various quarters.  You should do this, you're unable to do that without assistance (at a price of course.)  So Ma and Pa read a survey conducted by an institution stating they need $60k pa or $1m to live comfortably in retirement and off they go trying to get that.



What's the basis for suggesting the average Australian is too stupid to think for themselves?  It takes about 15 minutes to add up various non-discretionary spending e.g. rates etc, then think about what other funds you'd need to fund the sort of lifestyle you want.  Hardly difficult.



> What they are not told is that according to statistics (admittedly compiled before GFC Mk I) only 5% of couples aged 65 will retire with $1m so they are likely to be in the 95% and need to adjust their expectations accordingly.



As above.  Why wouldn't you just do your own calculations, rather than blindly accept what some newspaper article says?



> Having said that, there are planners who do work very hard on behalf of their clients.



Exactly.  Which is why I object to HQ claiming she was 'duped by the whole industry'.




> I notice that the former Howard Government has, indirectly, been brought into the Storm blame game.  What next I wonder?  Will it be Choice, the consumers champion, for not exposing Storm before it knew about it?  Oh hang it, everybody else has been, so why not?



Yes, indeed.  I made the same observation earlier.  John Howard is apparently to blame because he suggested it was desirable for retirees to be self funded.
This is just one example of the way some of Storm clients are twisting perfectly sensible statements in their bitterness.


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## Harleyquin (31 October 2011)

Julia I can't believe that you would recommend "investing in the most conservative fashion", by which,I assume you mean "in the bank", the very thing we are being told not to do in some of the literature that I've read written by some of the financial experts.  Banks pay roughly 3-4% interest, give or take a little each way.  You pay half this in tax (I say this from personal experience so know it to be true, but this will obviously depend on individual circumstances).  Consequently, you are earning 1-5% on your capital and you have to live on it while keeping up with inflation. So effectively you are going backwards at a great rate of knots.  Is this your idea of financial advice?

The answer - you most definitely need financial advice.  No stormie was prepared "to risk this amount to make even more" as you suggest.  We, and I can only assume many others,asked our financial planner (who has a university degree in the relevant subjects) about the risks involved.  My first question was "isn't this risky" his answer " no we have our experts in this field who will be monitoring your investments at all times". That sounded good to me, who wouldn't have a clue, if I pay for this advice I've experts looking after us.  You will have an income and keep pace with inflation.  Is this greedy, not to me it isn't it's being practical.  Greedy is a CEO of the bank earning sixteen million dollars pa.

Julia we were duped by the whole industry, not just 'a rogue firm', this rogue bank had the financial backing of the CBA and all the major banks.  We trusted the banks and up until that point had no problems with them, so by going to a planning firm backed by the CBA, we felt that we were in good financial hands.  As for asking questions, we made an extremely detailed list of questions before going to see storm, we asked ALL the questions and the advisor answered them all.  He seemed to know exactly what he was talking about, and he never baulked once in answering all our hard questions.

As far as the storm model never being designed for rapid market decline, hindsight has proved this to be true, and yet this was an aspect that I questioned closely, and we were told that they had their experts who monitored our investments at all times, bought low, sold high and told us that it was designed to cope with a crash as their were safeguards in place which he explained to us.  We understood enough of the explanations to know that he knew what he was talking about and we would be in safe hands.  If you need to argue and/or expand on these explanations you'll have to talk to our financial planner as I can't recall all the explanations given in detail.

When a cardiac specialist tells you all the details of your forthcoming triple bypass do you understand and remember all those details.  Do you trust that he knows what he's talking about just because he's been to university and studied for x number of years or do you say 'sorry but I don't understand everything you're telling me so I'm not having the operation'.  I know what course of action I'd take, sometimes we just have to trust that the experts know what they are talking about.  Our financial planner had all the necessary qualifications, and that was one of my questions.  It's called trust Julia and Bunyip, not greed.  I used to have that elusive thing called TRUST, even in the experts, these days that trust is a little dented.


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## doobsy (31 October 2011)

Wow

Big couple of days on the forum.

Frank, appreciate all the extra information you are posting, but as I read the submission from Brett Walker and also based on all your examples from the SOA all roads lead to Storm Townsville.

Can I mention a couple of points. I have a client that received an inheritance, she paid out her home and has a lump sum that generates an income of roughly $60,000 per annum. If she were to approach the bank and ask for equity, she could quite reasonably expect the bank to offer her terms based on the income she earns even if it is from investments. Now if she were to invest the borrowed money it might generate more income which in a couple of years she could prove via tax returns and potentially approach the bank and take her equity withdrawal all the way up to 80%. Is this illegal? I would think that the bank would consider it ok as it would meet their lending criteria. If she chose not to invest the money but instead heads to the casino, is that the banks fault? My logic says Storm managed to convince certain bank managers on the logic above and therefore also convinced them to speed up the process and let them go straight to 80%. Legitimate lending for those with an income like my client, bad lending for those who did not have any income except the income from the “supposed” new investment.

We also all need to remember that banks are in the business of lending. Without it as we saw in 2008 the whole shebang stops rather suddenly. Not excusing bad lending, just saying we need them to lend.

Where I see massive issues are the lending to those with little to no “legitimate” income sources and also in the desktop valuations that allowed more equity to be drawn from the home as well as topping up the margin loan. This was a fee grab by storm as discussed but if it can be proven the valuations were not legitimate then damn right there should be forgiveness of that debt and any attached margin loan exposure that resulted.

So potentially some of the lending was legitimate. Storm draws out a couples super holdings, pretends like they have been invested for ages and assigns an income to them. They use that income figure to them draw on the home. 

Now we have an asset base and an income stream. We have the assets and we have income that is either a mix of wages and investment income or maybe just pure investment income. So they approach the margin lenders. As already discussed, nothing illegal on that front as it is a product that just needs to have equity to back it and we have plenty of assets now. 

Frank, I was surprised to see you quote that the banks are a law unto themselves and they set the conditions and you follow them or else. Of course they do. And rightly so. They are lending other peoples savings and have a responsibility to those depositors. You should never have expected them to cover anyone else except themselves.

On the margin calls – my latest understanding is that Townsville HQ stopped individual advisers at the local levels from addressing the margin calls directly with clients until after they had tried to renegotiate the terms with CBA. EC must have still been under the assumption the banks were his friend. But yet again a case of Storm HQ needing to have everything centralised so EC could make all the decisions. 

HQ – It is a pity you are scarred so. 99% of planners got their clients through the crisis, some with papercuts, others with flesh wounds but they are still fighting. As I mentioned earlier, the real value is added through strategy and technical knowledge, if you struggle with markets then the rules Govt’s put in place are even harder.

You also mention the promise to monitor things. This is where Storm dropped the ball. They knew what the investments were worth, they knew what the loans were. They could have easily on the bank of an envelope done LVR calcs. They chose to stay in the market and convince all clients to do so. I am yet to meet someone who asked to be sold out and wasn’t convinced to do otherwise by the advisers. What happened to the cash “dam”? Wasn’t this supposed to be a last resort “save our souls” allocation of cash? When was it used?

Can either you or Frank comment on whether they used a idea of “exponential” growth as an argument. That technology etc meant “this time it is different”? I heard that used a couple of years before it blew up. It was a way of explaining the bull run rather than say it was well over the average and would probably correct.

I do look forward to some of this getting to court. I think both the lenders and I certainly hope the Storm strategists get pulled up on what are some glaring holes.


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## Judd (31 October 2011)

Julia said:


> Oh dear, no one is denying former clients their bitterness rights.
> I am simply pointing out that it is absolutely unreasonable for any of them to claim that they were "duped by the entire industry".




I agree and I was simply pointing out that it was reasonable response for them to feel bitter.



Julia said:


> And, on bitterness, We have a choice about whether or not to hold onto bitter, aggrieved feelings.  Most of us will have experienced injustice and the ramifications of the bad behaviour of others at some point in our lives.  After a period of anger and grief, it's usually more healing to let it go.  At least, so I have found.




As have I, in circumstances a tad more stressful than the loss of mere money.  But others are not you or I so they have to work that aspect out in their timeframe and in their manner.



Julia said:


> Well, Judd, I don't know anyone who hasn't so planned.  It's a pretty basic thing to do.  And if people haven't, then they have only themselves to blame.  Surely you'd think about this just as you'd budget for every other phase of your life.




Does that include well educated friends whose eyes glaze over when you mention financial matters to them or those youths who you attempted to tutor on such issues?  I am not going to bother to get into a flame war about it as it is simply not worth it.  You have your view and I have mine.



Julia said:


> What's the basis for suggesting the average Australian is too stupid to think for themselves?  It takes about 15 minutes to add up various non-discretionary spending e.g. rates etc, then think about what other funds you'd need to fund the sort of lifestyle you want.  Hardly difficult.




As above.  It may be almost second nature to some but it isn't to others.  Otherwise there would probably be little need for people to consult financial planners and that is not the case.



Julia said:


> As above.  Why wouldn't you just do your own calculations, rather than blindly accept what some newspaper article says?




My point was about the power of advertising.  It works.  Read and digest what Harelyquin said about the (mis)information she and others were being fed from various quarters and that includes Storm.



Julia said:


> Exactly.  Which is why I object to HQ claiming she was 'duped by the whole industry'.




I concur.

I feel sorry for former Storm clients.  I do believe that to some extent they were the authors of their own problems but Storm Financial was the main culprit, especially when things were going down the toilet and not actively reducing their clients exposure irrespective of the impact on their fees.  The banks will probably be shown to wear a portion of the blame as well.  So be it. Had to laugh.  One silk said of ASIC argument about unlicensed managed investment scheme "A novel approach."  Apparently that is lawyer speak for "I'll be interested to see how they push this one up hill with a pointed stick."  Litigation.  Awful stuff.  48% win, 48% lose and 2% draw.  Wonder which side of the coin this one will land; if it does.

Anyway off to do more important things for me than worry about somebody elses problems.


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## SJG1974 (31 October 2011)

Frank Ainslie said:


> "I too have also taken the time on this forum to explain our position, quoting details from our Storm SOAs to refute suggestions by some on this forum that we Stormies were all greedy and just wanted more. "




Frank you haven't uncovered anything new here I am afraid.  Your story is like so many I and others have read from the PJC submissions.  Not sure what you were trying to prove here, but doesn't change my thinking one iota.



Frank Ainslie said:


> It’s really a waste of time engaging such people in any form of discussion because they are just going to keep spouting the same line without a single shred of evidence to substantiate their mantra, “You were all greedy!”




Same can be said for engaging people who blame everyone else for their situation but have not taken responsibility for the DECISIONS THEY MADE to blindly hand their lives over to a financial planner, without getting a second opinion on a strategy they clearly didn't understand form the get go, or even comparing the ludicrous fees.  Thats a reflection of society today I guess...its always someone else's fault.



Frank Ainslie said:


> Not one of these all-knowing individuals has once commentated on the Banks’ roles in all this despite what I have written in this regard. This alone tells us something about their thinking. They are simply not interested in getting at the truth.




Not true, many have commented on the banks.  And I doub't there are many here who are pro-banks.  Just because someone says a strategy is endorsed by the bank, doesn't mean you just blindly follow.

But the fact remains, Storm sold you the dream, not the banks.  Storm wrote the SoA, not the banks.  Storm took their 7% fee and told you you wouldn't lose your house, not the banks.  Storm told you they would monitor the market and protect you, not the banks.  Storm recommended you increase your debt as the market rose, not the banks.  Storm told you you would be fine when they knew you were going down the gurglur, not the bank.  

You were screwed by Storm before the banks finished you off by not making the margin calls.  A question, did the bank manager tell you NOT to do some thinking and investigating for yourself before placing your life in a strategy you didn't understand put forward by an adviser who was remunerated based on the amount of money you invested????  NO, THAT WAS YOUR DECISION Frank, noone else's.



Frank Ainslie said:


> Their attitudes are really strange when you would think about it because they are not indignant at the thought that banking institutions in this country are capable of miscreant behaviour? Only at us for having invested through Storm. I can't believed that rational human beings would choose to completely ignore the facts and must therefore conclude that such people have a vested interest for adopting such an attitude.




You know what's strange?  That not one Storm client has been able to explain just what they thought they were paying 7% upfront fees for.  You said financial advice.  Well, that Frank, is as irrational as it gets.

Again, a reflection on today's society that we all look to blame someone else for the bad decisions WE MAKE.  You have a vested interest Frank, and that is in getting compensation from the only party to this who has deep enough pockets to be able to pay it- the banks.  



Frank Ainslie said:


> As for me, I’ll keep on supplying my “screeds of stuff ”as someone put it in the hope that we still have some forum members left with an open mind.
> 
> That’s all we Stormies are really asking for really. People that will judge us on the facts and not on hearsay or people’s own personal prejudices. If they don't want to listen, so be it!




The facts are you paid a ridiculous fee to a financial advice firm who you took on face value were experts in the field, to provide you with a strategy you did not understand, and fell for it hook, line and sinker.  They are the facts you should be focussing on, becuase if you had have addressed them differently, you wouldn't be in the mess you are in.

And you still can't explain to me just what you expected to get for 7% Frank.  

It becomes increasingly difficult to feel sympathy for people when they refuse to take responsibility for their own bad decisions.


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## Harleyquin (31 October 2011)

I don't remember the word 'exponential' ever being used Doobsy,  I have never heard the word before so even if it was mentioned I don't know if I'd remember or picked up on it.  Can't be anymore help than that I'm afraid.

When I read your post it makes me realise how little I know about financial strategies and terminology so it's no wonder that we were caught out.  We were just big fish heads getting caught in their net.

I do realise that banks are in the business of lending money but just feel very strongly that the banks knew more about the way storm were operating than they are admitting to.  We've borrowed money from banks before and we had to provide endless details to them so that they could decide how much we could borrow and how much we could afford to repay.

This hasn't happened with their dealings with storm.  A few forum members have said to us 'didn't you realise you were dealing with a rogue outfit, didn't you realise this and that'  No I didn't realise they were this criminal but surely a bank working so closely with storm had to realise exactly how storm were operating.  They deal and lend to other financial planners, they employ their own financial planners, common sense tells me that they were in bed with storm bigtime.

Like you I can't wait to see this played out in court.  No one can go through what we've been through and come out the other end unscarred to some extent.  I find that I feel nauseous just walking past the local cba branch and couldn't walk in if you paid me to.  It's the same when we see 'financial planner' I get a knot in my stomach, groan and run in the opposite direction.  I know there are good ones out there and I spent sometime in the early days going to financial planners for help but just couldn't go back and felt they were just trying to trap me with their financial knowledge rather than trying to help.  One of them said to me 'you were just unlucky to walk through the wrong door', so I figure I won't bother going through any of their doors from now on, that's the best way to stay safe IMO.

Today I have no interest in going to a financial planner, I have sworn that I'll never walk into another bank as long as I live and have no bank accounts and that's the way I like it.  I may never have a decent financial future but I'll never place my trust in another person when it comes to my finances.  If our circumstances change I'll look into buying a few blue chip shares and dip my toes in the stock market a little at a time.  Julia says its easy but I have had others tell me that it isn't so easy.  I find that there's a lot of information on this forum that helps and I enjoy learning so I'll feel my own way no matter what happens.


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## Julia (31 October 2011)

Harleyquin said:


> Julia I can't believe that you would recommend "investing in the most conservative fashion", by which,I assume you mean "in the bank",



Again, you're making an assumption which is not correct.  There are plenty of strategies which are much safer than that which you accepted, but don't resort to just putting money in the bank.



> Banks pay roughly 3-4% interest, give or take a little each way.



It pays to do some research from time to time.  I have some term deposits at 8%.
At call cash at 6.51%.

If you were retired and drawing an allocated pension from your super, that income is tax free.

It's not up to me to suggest strategies.  I'm not a financial planner.


> You pay half this in tax (I say this from personal experience so know it to be true, but this will obviously depend on individual circumstances).  Consequently, you are earning 1-5% on your capital and you have to live on it while keeping up with inflation. So effectively you are going backwards at a great rate of knots.  Is this your idea of financial advice?



Of course not.  But you are basing this assertion on wrong assumptions.

HQ, much of my earlier offer to help you acquire a basic financial literacy was to help you understand this sort of thing.  Fine that you chose not to pursue this, but as a result you are persisting with some quite wrong conclusions.

As others have observed, this thread is now going round in circles.  You are seemingly unprepared to alter any of the views you've formed, even when it's explained to you that they are sometimes contrary to reality.

Perhaps by repeating the same things over and over, HQ, it helps you to feel better.
That's fair enough.  I wish you all the best.


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## Frank Ainslie (31 October 2011)

I thank everyone for taking the trouble to post on the subjects I have raised. However, until you start addressing the issues I have mentioned in relation to the Banks that dealt with Storm, I see no point in responding because you are all still focussed on Storm investors  and what we did. It makes it seem as though you all are pushing an agenda of some sort. 

In the hope that somebody actually addresses what the Banks have done (the BOQ would make a good start) I will keep on supplying the evidence. If you want to have any meaningful discussion with me, I suggest that you look at the issues I have raised in relation to these Banks and give me your objective opinions. 

We, the people that invested in Storm, are not interested in your views about us. We are, however, interested in your views about the banks involved. Need I remind you that the Banks will be in the dock next year, not Storm's clients.  It therefore seems logical to me that these Banks have committed wrongdoing, and there is evidence to support such charges. Why therefore is everyone fixated with what we did? Let's focus on what the Banks have done instead rather than continue to waste your time and ours by going over the same issues. It's getting us nowhere!

Thanks anyway!


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## doobsy (31 October 2011)

Frank Ainslie said:


> I thank everyone for taking the trouble to post on the subjects I have raised. However, until you start addressing the issues I have mentioned in relation to the Banks that dealt with Storm, I see no point in responding because you are all still focussed on Storm investors  and what we did. It makes it seem as though you all are pushing an agenda of some sort.
> 
> In the hope that somebody actually addresses what the Banks have done (the BOQ would make a good start) I will keep on supplying the evidence. If you want to have any meaningful discussion with me, I suggest that you look at the issues I have raised in relation to these Banks and give me your objective opinions.
> 
> ...




Maybe you could see it differently Frank, as an education for those who read this forum and are thinking of getting some advice, whether private planner or bank planner so they won't fall for the same thing you fell for.

I for one feel this forum should be just as much about making sure people are not sold a dud strategy as making sure they are careful about who from and how much they borrow.


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## Mindstorm (1 November 2011)

Frank Ainslie said:


> I thank everyone for taking the trouble to post on the subjects I have raised.
> 
> We, the people that invested in Storm, are not interested in your views about us. We are, however, interested in your views about the banks involved. Need I remind you that the Banks will be in the dock next year, not Storm's clients.  It therefore seems logical to me that these Banks have committed wrongdoing, and there is evidence to support such charges. Why therefore is everyone fixated with what we did? Let's focus on what the Banks have done instead rather than continue to waste your time and ours by going over the same issues. It's getting us nowhere!
> 
> Thanks anyway!




Hi Frank,

No wish to offend, but do you have the permission of "the people that invested in Storm" that you refer to in this post to make this statement?

I ask because I invested via Storm Financial, am a member of SICAG, and I do not recall you, or anyone else for that matter, asking me if I was interested in anyone's "view" of me.

Can I be 'cheeky' here and ask:

How many Storm investors do you actually represent?  

How many Storm clients are involved in the current court case? 

How many members are there in SICAG, and what propotion of them are represented by you?

How many of those members that you say you represent support your views, and have given you 'cart blanche' to speak on their behalf?

Would you be able to give us the numbers of members of your website forums and an approximate number of SICAG members so that we can see the proportion of SICAG members that you are actually "voicing the opinion of"?

I'd also say to you that not every person or entity that finds themselves in the 'dock' could or should be automatically presumed guilty.  Do we not practice "innocence until proven guilty" here in Australia?

I am not an advocate of the banks, but I am an advocate of 'absolute truth', and 'truth will out'.

You do many people a disservice when you say that you speak for all of them Frank.

I do not need you, or anyone else, to fight my battle with the banks for me.

You do not speak for me, nor do I need you to.  Fight your own battle Frank, and let the rest of us fight our own.

MS


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## Frank Ainslie (1 November 2011)

Mindstorm said:


> Hi Frank,
> 
> No wish to offend, but do you have the permission of "the people that invested in Storm" that you refer to in this post to make this statement?
> 
> ...




Tell me who you are and then I'll discuss this with you! I am not hiding behind an avartar! Why are you? If you are who you claim you are, why haven't you spoken up before? People on this forum have labelled Storm investors greedy! You have a strange way of fighting if the only time we hear from you is when someone is actually defending  Storm investors against this type of attack. Frankly, your attitude makes no sense at all.

I suggest you either declare yourself or go away and have a good think about whose side you are on!

Incidentally, I have been fighting for Storm investors since this all began. I have written a book, have two websites, and have written millions of words to various parties including ASIC and the three principal banks involved. I also have my own discussion group called SOB which is made up of people who are also in SICAG. What have you done so far? 

If you give me your name, I will gladly take you off my Christmas list. You do not sound like someone I would want to fight for anyway!


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## Frank Ainslie (1 November 2011)

doobsy said:


> Maybe you could see it differently Frank, as an education for those who read this forum and are thinking of getting some advice, whether private planner or bank planner so they won't fall for the same thing you fell for.
> 
> I for one feel this forum should be just as much about making sure people are not sold a dud strategy as making sure they are careful about who from and how much they borrow.




Hi Doobsy,

In order to educate people, and warn them of the pitfalls that exist, using the Storm collapse as an example, you need to present the full story, not selected chapters. To do this, people in the financial sector  need to understand fully what caused the Storm collapse. You cannot have a full understanding and complete the book until you come to grips with the part the Banks played in all this. Concentrating on the Storm model which we all know now was a flawed concept is only one part of the equation. You will only be giving any future investors half the picture if you continue to do this. 

A  "dud strategy" it certainly turned out to be BUT it was a strategy that was embraced by certain Banks who knew full well how Storm operated. I am now attempting to give the full picture. Whether you accept it and take it on board when advising any would be clients in the future is your choice. At least let us who were there tell the story! That surely is not too much to ask!


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## SJG1974 (1 November 2011)

The best way to warn and educate people Frank is to tell them to do the very things you are conveniently ignoring...

* if you see an advisor, always get a second opinion;
* understand exactly what it is your fees are paying for and compare this to others;
* understand what it is you are investing in- don't just accept the words of your adviser, but do your own research;
* don't blindly follow "experts" because you think they know better than you; and
* understand the risks involved in your strategy. There is no such thing as a risk free investment.

People will get conned again, focussing on the banks is ignoring the real issue and won't help anyone avoid what you have been through, because more rogues will come along and take advantage of the gullible and greedy in the future. That much is certain.


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## DocK (1 November 2011)

Mindstorm said:


> Hi Frank,
> 
> No wish to offend, but do you have the permission of "the people that invested in Storm" that you refer to in this post to make this statement?
> 
> ...




+1

Frank,

I'm sure you have your agenda in mind when you post what you post, but I also resent your presumption to speak for everyone who invested in Storm.  Not all of us share all of your views, and have not given you permission to assume we do.  Not all of us feel the need to publicly "fight the good fight" and indeed there are many who would tell you that your posts on this particular forum are pointless.  I'd be amazed if there were any contributors or readers of this thread who have not already formed a firm view of the "Storm Saga" one way or the other - we all view things and form opinions based on our own experiences, mindsets and personal biases - your tirades are unlikely to alter the opinion of those who are already  predisposed to view "the people who invested in Storm" in a negative light, and will probably result in the opposite.  

I certainly don't dispute your right to your own opinions, nor your right to post your own personal "truth".  I do dispute your right to speak for those you do not know.


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## Judd (1 November 2011)

SJG1974 said:


> The best way to warn and educate people Frank is to tell them to do the very things you are conveniently ignoring...
> 
> * if you see an advisor, always get a second opinion;
> * understand exactly what it is your fees are paying for and compare this to others;
> ...




It goes a little deeper than that for me, SJG.

I read most of the submissions to the Parliamentary Inquiry.  One which really raised my hackles was that from a couple in their 70's, on Centerlink, home paid off and who wished to become "Self-Funded Retirees" (whatever that phrase means.)

Yep, they became double geared (actually triple geared in a way since companies, even those in an index fund, usually have debt and margin lenders lend against the equity not debt). How on earth could an planner advise this couple or similar couple, to embark on such a strategy?  

Yes, they are entitled to seek advice to see how they could improve their financial situation but a competent person would gently appraise them of the fact that they have lost the most valuable asset of all to build income producing assets - time.  

Naturally, politeness would prevent one from asking the obvious question of what did you do with the funds once you paid off your house, spend it or invest it? 

To advise such couple to borrow, especially such large sums, is odious, despicable and contemptible in my view.  And yet that advice was given before the specter of the big, nasty bank hove into view.  You don't or shouldn't treat naive elderly people in that way.


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## SJG1974 (1 November 2011)

Judd said:


> It goes a little deeper than that for me, SJG.
> 
> I read most of the submissions to the Parliamentary Inquiry.  One which really raised my hackles was that from a couple in their 70's, on Centerlink, home paid off and who wished to become "Self-Funded Retirees" (whatever that phrase means.)
> 
> ...




No doubt Judd, agree 100%.

There are so many things people should be aware of and have an understanding of when dealing with their finances.  Frank focussing on the big bad banks ignores 95% of them.


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## Frank Ainslie (1 November 2011)

Hi Doobsey,

Some further observations:

_“We also all need to remember that banks are in the business of lending. Without it as we saw in 2008 the whole shebang stops rather suddenly. Not excusing bad lending, just saying we need them to lend.”_

The reason the GFC occurred is directly related to imprudent lending by banks that were not backed up by assets. Certainly, banks need to lend but they are obligated to lend wisely. Their shareholders demand nothing less.

_“Now we have an asset base and an income stream. We have the assets and we have income that is either a mix of wages and investment income or maybe just pure investment income. So they approach the margin lenders. As already discussed, nothing illegal on that front as it is a product that just needs to have equity to back it and we have plenty of assets now.”_

Again, the issue here is imprudent lending. There are numerous cases within Storm where the banks ignored the borrowings (house loans and income of those concerned -the CBA and the BOQ are guilty of this) and simply went ahead and lent money anyway. Motivation will play a big part in this. Of course, the banks’ thinking has always been that if the borrower defaults, they always have the asset (house) that can sit on their balance sheets as an asset for them. This policy fails when the price of houses falls and they suddenly have depreciated assets on hand. The sub-prime fiasco which started in the  USA demonstrates that this is a flawed principle in a deflated market.  

_“Frank, I was surprised to see you quote that the banks are a law unto themselves and they set the conditions and you follow them or else. Of course they do. And rightly so. They are lending other peoples savings and have a responsibility to those depositors. You should never have expected them to cover anyone else except themselves.”_

Any contract has to contain a degree of equity in it. In other words, the conditions cannot be all one-sided. Certainly, one can set conditions, but in any litigation those conditions will be examined to establish whether one party has an unfair advantage over another. 

I have already explained that the banks have an obligation to make margin loans on their customers (not Storm financial in this particular case) because the margin loan contracts were between the banks’ customers and the banks. That obligation is not capable of assignment without the authority of the customers concerned. Further, any margin calls must be made in a reasonable time frame. On both counts, the banks have failed to fulfil their obligations.

The practice that has crept into this procedure during the last few years whereby the banks used the financial advisers concerned as a go between rather than contacting the margin loan borrowers directly will, I believe, not be factored into the equation.

A further thing to remember is that the number of margin loan borrowers in Storm were such that it was unreasonable for the bank to expect (using Storm as a go-between) that these margin calls would be made expeditiously.  

The May 2007 agreement between Storm and the banks clouded the CBA’s thinking in this regard because they were just as keen as Storm to “wait and see” whilst its customers were teetering on the edge. The CBA is  going to find it very hard to justify their position because they failed in their duty of care to their margin loan customers.

You also have banking codes of conduct that these banks have adopted to consider. Imprudent lending will be high on the list. Banks cannot ignore their contractual obligations merely because they are banks and have set the conditions. Conditions, I might add, in the case of the CBA, that were altered by its May 2007 agreement with Storm without the Storm margin loan borrowers authority. They did not notify their margin loan customers that they had done this? They also cannot use the excuse that they relied on Storm to do so because the responsibility was theirs alone. Storm was never a party to any margin loan contracts. Are you when arranging these on behalf of clients? I didn't think so!

_“On the margin calls – my latest understanding is that Townsville HQ stopped individual advisers at the local levels from addressing the margin calls directly with clients until after they had tried to renegotiate the terms with CBA. EC must have still been under the assumption the banks were his friend. But yet again a case of Storm HQ needing to have everything centralised so EC could make all the decisions.”_

Again, the May 2007 agreement and the presumption by the banks that it was Storm’s duty to make margin calls cannot offset the CBA’s obligations to make margin calls directly on its margin loan customers. I have already outlined the reasons for this in previous postings. It was not Storm’s responsibility to make margin calls. That lay with the CBA alone. The fact that the CBA left it to Storm to do so is a further indictment of their culpability in this regard. See judgements/findings already made in this regard that are mentioned in my previous postings.

_“You also mention the promise to monitor things. This is where Storm dropped the ball. They knew what the investments were worth, they knew what the loans were. They could have easily on the bank of an envelope done LVR calcs.”_

When the CBA and Storm formulated the May 2007 agreement (which I believe will be considered a breach of contract by the CBA where its margin loan borrowers are concerned) both parties were then duty bound to ensure that they were both working off the same margin loan ratios. This would have been a critical factor in such an agreement. They were not working off the same page which made a nonsense of any systems both parties put in place to deal with margin calls. Again, any such agreement cannot offset the CBA’s obligations to make margin calls directly on its margin loan customers. I think I need to keep repeating this because it will be central to our cases. 

You also have _“unconscionability”_ that needs to be introduced into the mix but I won’t go there for the moment.

I reiterate my claim that the Banks have been a law unto themselves because no one has been willing to challenge the way they operate. Because we are part of a class action, we have the necessary numbers to meet the legal costs involved. If we lose, it will ruin us even more but we are prepared to take that chance. The Banks have not acted responsibly and we intend to prove it. We could , of course, fade away without a fuss.  Our generation are made of sterner stuff. If it is the end of us, so be it. At least we'll go knowing we gave it everything.

Our biggest gripe is that ASIC are not going after the CBA in this respect. Fortunately, we now have solicitors that are prepared to risk all with us. They too have received criticism from all sides, but they believe in us and in the strength of our cases. In so doing, they have restored some of our faith in human kind.

A win for us will be a win for everyone that deals with banks in the future.


----------



## Frank Ainslie (1 November 2011)

DocK said:


> +1
> 
> Frank,
> 
> ...




I have though long and hard about your posting since I first received it. It struck me as odd at the time that any former Storm investor would find what I am posting in any way objectionable because I have stated nothing that has not been documented already.  Further, I am trying to state our case so the public can better appreciate the facts. I have been doing this for three years now and I’ve received nothing but thanks from many former Storm investors. If you go to Storming on Banks (my website) their gratitude is expressed there. Further, if you read back through my postings, you will see that where possible I have tried to avoid giving a personal opinion, sticking with the documented facts  where possible. 

As for my taking it on myself to speak for other Storm investors, I am aware that many for one reason or another cannot speak for themselves. I know from speaking with many of them that they therefore appreciate my speaking on their behalf. We have a shared experience because they too have lost their life savings by investing through Storm. If I can be their voice, so be it.

You also need to remember that I run a Group consisting of former Storm investors and have dealt with many of them on a one-to-one basis as well. Without exception, they all share my views so who are you actually speaking for? And why do you want to shut me up?

Maybe your first posting offers a clue! You state in it, _“I'd also say to you that not every person or entity that finds themselves in the 'dock' could or should be automatically presumed guilty. Do we not practice "innocence until proven guilty" here in Australia?”_ 

No former Storm investors I have encountered to date, and believe me I have met many, would ever dream of making such a statement about the Banks because, like me, they hold the banks accountable for many of their woes. I therefore suspect that you must be referring to people in Storm; namely E and J Cassimatis and some of their cohorts. This makes more sense to me. Quite frankly, I can recognize the tone from my former days posting on SICAG.

I am well aware that Manny still has his devoted followers although for the life of me, I cannot imagine why! I’m pretty certain though that these devotees didn’t lose what we did. In fact, in the end days, Manny was known to have funded some of his favourites. Unfortunately, we were not among them. Maybe you were?

You needn’t worry though! I've done with Storm. The Law can deal with that mob now. 

You also state, _"...your tirades are unlikely to alter the opinion of those who are already  predisposed to view "the people who invested in Storm" in a negative light, and will probably result in the opposite." _ Why do people always use emotive words like "tirade" when they should use a more appropriate word like "discussion"? If you think my previous postings have been tirades, you have lived a sheltered life. 

Aren't you now being presumptuous when you say this?  Why are you now speaking for everyone whilst telling me that I can't? What makes you so different in this regard! 

This is a public forum where people debate. In a democracy, this is our right. If you don't like what is being said, you have the right to leave. If you have a point to make, then state it. For instance, your statement: I]“I'd also say to you that not every person or entity that finds themselves in the 'dock' could or should be automatically presumed guilty. Do we not practice "innocence until proven guilty" here in Australia?”[/I] To whom do you refer? If you believe in something defend it by all means, but first explain what you mean! I hope it's not Storm though because these guys are Storm chasers from way back. You could find yourself in a real blow out!


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## Harleyquin (1 November 2011)

Julia I really do appreciate the offer  of  help that you are extending but one I don't trust myself and two I prefer not to trust an internet contact no matter how genuine they appear, probably just me being over cautious,  but today we have to be.  Thanks for your best wishes though and I certainly hope that all stormies come through this ok.

Others may have observed that this thread is going around in a circular motion, quite frankly I don't care how many circles we make on this thread, I enjoy reading all of your contributions and if these 'circles' are read by potential clients seeking financial advice and they pick up on the pitfalls and the advice given by all and it prevents another tragedy the likes of storm then it's well worth it.

If you go back through this thread Julia you'll see that many of us are repeating ourselves so obviously there must be a good reason for it, whatever that it is, maybe some of it makes me feel better but it's not the only reason I can assure you.  Julia I wish you all the best too, continue to educate us in your own way on the other threads, I do read them.  I think I can speak for other stormies when I say that we are still on the road back but we can see the end of the road these days even if it's still a way off.

Talking about fees, when we paid I think it was about fifty thousand up front I thought that was ok when you considered that you wouldn't have to pay fees again, so like Frank we thought that we were paying just for financial advice.  No carrots.  I just thought 'in ten years time this will most certainly pay for itself as everything is getting dearer and by then we'll be retired and maybe can't afford to pay a financial planner.'  I wonder how many others thought along similar lines.  Quite frankly at the time I thought it was a good idea, thanks in part to our very slick planner!!!

Talking of storm planners I like to see them come on this forum and explain their concepts to those of you who weren't with storm, now wouldn't that set the cat amongst the pigeons.  Don't feel shy Mr, Mrs or Ms ex storm financial planner, explain yourself to the forum and give us a break as sometimes we struggle...

I see this thread as very worthwhile to discuss the whys and wherefors and hope that it continues to educate.  By now most of us have worked out what the problems were and I enjoy having a public thread/forum to visit which deals specifically with storm financial and the ongoing saga of it all. We, that is us stormies, are all well aware of what this forum has to offer apart from this thread.  Perhaps some of you can recommend the threads that we can best visit to move forward.  All suggestions welcome from this little black duck


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## doobsy (1 November 2011)

Frank, sorry but I have issues with alot of this.

Firstly the GFC revolved around loans that were not even available in Australia. Tick one for APRA and the Federal Governments at the time for this and not allowing our banks to act or gear in the same way as US banks could. Counter party risk and the unknown of who was holding "old maid" was what stopped the lending between parties.

As a small business owner and a home owner with a mortgage, I need banks to lend to people like me.

In my example I cannot for the life of me see how the margin loan was imprudent lending. Again the margin loan contracts were very specific and very clear. They were loans that required that you put up assets as protection. You had an investment portfolio generating an income. You meet the criteria to lend to!!!!!!!!! Different lending requires different disclosures. Home loans as a rule do not require assets as protection as the home is the asset. In the case of a margin loan the portfolio of investments is the asset. If you choose to put up assets with debt already attached to them then that is your choice and know that the margin loan ranks first. Simple stuff. They have always had the ability to either pay or capitalise interest, investors choice. None of this was anything special that Storm negotiated or that the banks did not offer to EVERYONE. The difference was that not everyone (but plenty non storm people as well) geared to 50% which resulted in margin calls and the sale of assets when markets fell.

For the 99856734th time. The special deal done to allow a borrowing limit of 90% isn't illegal either. It was disclosed on every margin loan statement (at least quarterly) that you recevied. Margin lenders move these lending limits quite regularly and throughout the crisis were making changes on a weekly basis. ABC learning stock was an 80% LVR stock one day, got moved to 50% LVR which meant that clients with that stock needed to find more equity to keep their overall LVR at the same levels and then got removed completely from the margin lending list which meant it could no longer be used as capital. AGAIN, this was all disclosed.

On the margin calls - read my post, I am not saying CBA should not have contacted clients. What I am saying is that the advisers knew of the margin calls and requested the calls to clients were not made. CBA honoured this and it will cost them. I was making a point about the lack of reasonable and decent action by Storm HQ.

My comments on working out LVR is not all that difficult either. LVR = Loan to Value Ratio = Loan balance divided by Lending Value of the underlying assets.

You got a assets of $100 and they will lend to 80% then they are worth $80 for the margin loan purposes. You got a loan worth $60 then your LVR is $60 / $60 = 75%

WHO NEEDS SOFTWARE?????

Nothing Storm did was tricky, it was super aggressive but not complicated or never thought of or something special only their advisers knew how to do. It wasn't that hard to run the strategy and certainly was not hard to monitor. You have one loan that is important and could cause trouble (the margin loan) to monitor and one portfolio of assets held against that loan. The could / should have been actively manouvering to ensure margin calls could not occur. Staged sell downs, whatever. They chose not to and it cost the clients everything.

HQ makes mention of buying low and selling high. What a joke, Storm never sold, NEVER. If markets were rising that meant your LVR was dropping and you were could "Step Up", If markets were falling then you needed to use your cash to buy in to keep the LVR under control and  "Step Up" buying more units for the next rally. Does anyone else see the theme? I have never seen an example of Storm saying "Well we have gone on a 150% bull run in the last 7 years, I think we might take some profits".

Good luck with the banks, I just have a feeling that because they will very easily show that it was common knowledge how these products worked but your adviser glossed over them that you are pushing $hit uphill.


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## DocK (1 November 2011)

Frank Ainslie said:


> I have though long and hard about your posting since I first received it. It struck me as odd at the time that any former Storm investor would find what I am posting in any way objectionable because I have stated nothing that has not been documented already.  Further, I am trying to state our case so the public can better appreciate the facts. I have been doing this for three years now and I’ve received nothing but thanks from many former Storm investors. If you go to Storming on Banks (my website) their gratitude is expressed there. Further, if you read back through my postings, you will see that where possible I have tried to avoid giving a personal opinion, sticking with the documented facts  where possible.
> 
> As for my taking it on myself to speak for other Storm investors, I am aware that many for one reason or another cannot speak for themselves. I know from speaking with many of them that they therefore appreciate my speaking on their behalf. We have a shared experience because they too have lost their life savings by investing through Storm. If I can be their voice, so be it.
> 
> You also need to remember that I run a Group consisting of former Storm investors and have dealt with many of them on a one-to-one basis as well. Without exception, they all share my views so who are you actually speaking for? And why do you want to shut me up?




I don't necessarily want you to shut up Frank - just don't presume to speak for me.  You may have many followers, and perhaps all those who have joined your group have done so because they share your views?  They would hardly have joined if they didn't.  I don't doubt that there are some who are happy to have you speak for them - but I'm not.  I'll speak for myself. 




> Maybe your first posting offers a clue! You state in it, _“I'd also say to you that not every person or entity that finds themselves in the 'dock' could or should be automatically presumed guilty. Do we not practice "innocence until proven guilty" here in Australia?”_




I did not say this - it was in the post before mine.



> No former Storm investors I have encountered to date, and believe me I have met many, would ever dream of making such a statement about the Banks because, like me, they hold the banks accountable for many of their woes. I therefore suspect that you must be referring to people in Storm; namely E and J Cassimatis and some of their cohorts. This makes more sense to me. Quite frankly, I can recognize the tone from my former days posting on SICAG.
> 
> I am well aware that Manny still has his devoted followers although for the life of me, I cannot imagine why! I’m pretty certain though that these devotees didn’t lose what we did. In fact, in the end days, Manny was known to have funded some of his favourites. Unfortunately, we were not among them. Maybe you were?
> 
> You needn’t worry though! I've done with Storm. The Law can deal with that mob now.




OK, this is what has me really steaming.  I am deeply offended by your insinuation that I am a devoted follower of Manny.  Nothing could be further from the truth.  Perhaps if you had taken just a little time to read some of my posts going back a couple of years, you would have a clearer understanding of my opinion of Manny and his favoured few.  

I do indeed think the banks have a case to answer, and look forward to seeing the legal drama unfold.  I don't, however, think that all blame lies with the banks involved.  I think there is more than enough blame to go around, and am willing to shoulder my share of responsibility for my own situation.  I was an ex-storm investor and have also been devastated financially.  I have never been a member of SICAG.  I am tired of all ex-stormies being regarded as being identical, with identical motives, attitudes, situations and grievances.  You are entitled to believe what you want, and blame the banks entirely if that is what gets you through.  Just don't presume to speak for me while you do so.



> You also state, _"...your tirades are unlikely to alter the opinion of those who are already  predisposed to view "the people who invested in Storm" in a negative light, and will probably result in the opposite." _ Why do people always use emotive words like "tirade" when they should use a more appropriate word like "discussion"? If you think my previous postings have been tirades, you have lived a sheltered life.
> 
> Aren't you now being presumptuous when you say this?  Why are you now speaking for everyone whilst telling me that I can't? What makes you so different in this regard!




I'd never presume to speak for everyone, merely stating my opinion that your posts are *unlikely* to alter opinions that are *probably* firmly fixed by now.  Again, if you bother to look you will see that I have been around this thread for some time.  I have not said you can't speak - just pointed out that you do not speak for all.  You don't speak for me.



> This is a public forum where people debate. In a democracy, this is our right. If you don't like what is being said, you have the right to leave. If you have a point to make, then state it. For instance, your statement: I]“I'd also say to you that not every person or entity that finds themselves in the 'dock' could or should be automatically presumed guilty. Do we not practice "innocence until proven guilty" here in Australia?”[/I] To whom do you refer? If you believe in something defend it by all means, but first explain what you mean! I hope it's not Storm though because these guys are Storm chasers from way back. You could find yourself in a real blow out!




My point is that If I have something to say, I'll damn well say it for myself.  You may speak for some, you may speak for many, but you do not speak for all ex-storm clients.  Just as our situations are not the same, neither are our opinions.

I wish you well with your quest.  I will follow with interest the eventual court case.  Nothing would please me more than to see Manny & Julie answer for their actions in court also.


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## Frank Ainslie (1 November 2011)

DocK said:


> I don't necessarily want you to shut up Frank - just don't presume to speak for me.  You may have many followers, and perhaps all those who have joined your group have done so because they share your views?  They would hardly have joined if they didn't.  I don't doubt that there are some who are happy to have you speak for them - but I'm not.  I'll speak for myself.
> 
> 
> 
> ...




Okay DocK! Point taken. 

Listen everyone! I am not speaking for DocK! If anyone else needs to be excluded let me know!

Seriously though, I too believe that Storm must share a large part of the blame. I wouldn't have posted Walker's comments on the Storm Financial model if I was trying to deflect the blame. I apologize for getting it wrong where you are concerned! 

The truth of the matter is that I am a little suspicious of anyone that springs to the defence of Storm which I thought you were trying to do. I've had too many run-ins with this type in the past in places you wouldn't believe.

Having said that about Storm, I must add that the banks are deeply involved in all this. This is not a normal case of banks lending money prudently, far from it. In certain cases criminality has taken place. 

You are right about certain people on this forum - they will never change but no matter! I will present what I have found over the last three years and leave it for them to decide. I am constructing a CBA website for those Storm clients that borrowed through that bank anyway, so much of what I write here will not be wasted, merely transferred. 

I will also opt out when I have posted the relevant information. To linger too long would be to invite meaningless debate.

I enjoy writing! It takes my mind off things! Whether anyone gleams anything from what I write here or has a change of heart is irrelevant in the end. The Courts will decide our fate! 

As Doobsy said, this should be an education process. If the pupils don't want to learn, because they believe they have the answers already, that's their prerogative.

Have a good day!


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## SJG1974 (1 November 2011)

Frank the pupils want to learn but you aren't teaching the right lessons.

It is quite staggering that you continually overlook the role you played in this whole mess, and overlook it by absolving yourself of any responsibility at all. In fact, you completely ignore it as if it isn't there. 

Look at what happened to you before the banks got involved. That's where people will learn what NOT to do, because the lesson you are teaching won't stop people from getting conned in the future. 

I guess denying any responsibility is good for your case against the banks....admitting you made mistakes weakens your case that the banks led to your demise.


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## Solly (1 November 2011)

From the 2007 Prospectus.

Highlights of Section 4.3.2

Any comments ?

I'm very interested about the reference to Phormula in point 3.


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## Julia (1 November 2011)

Judd said:


> I
> .  One which really raised my hackles was that from a couple in their 70's, on Centerlink, home paid off and who wished to become "Self-Funded Retirees" (whatever that phrase means.)



Nothing mysterious about it, Judd.  It means exactly what it says:  i.e. able to fund your own retirement without needing to access a taxpayer funded pension.


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## Julia (1 November 2011)

Harleyquin said:


> Julia I really do appreciate the offer  of  help that you are extending



The offer was extended about two years ago.  It was not ongoing.
You have since made clear that you have absolutely fixed views, many of which are imo quite unjustifiable, so I doubt that anyone wanting to offer you an objective view of how to acquire financial literacy would have a snowball's chance in hell.



> I prefer not to trust an internet contact no matter how genuine they appear, probably just me being over cautious,  but today we have to be.



Um, I was never trying to sell you something, HQ!  What I was offering, and I stress "was", was nothing more than a sympathetic hand of objective assistance.  I had no product to offer, no commission to be obtained, just an intention of pointing you toward a few sites where you could, if you just stopped the blame game and took a forward looking view for a bit, acquire some education.


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## Mindstorm (2 November 2011)

Frank Ainslie said:


> Tell me who you are and then I'll discuss this with you! I am not hiding behind an avartar! Why are you? If you are who you claim you are, why haven't you spoken up before? People on this forum have labelled Storm investors greedy! You have a strange way of fighting if the only time we hear from you is when someone is actually defending  Storm investors against this type of attack. Frankly, your attitude makes no sense at all.
> 
> I suggest you either declare yourself or go away and have a good think about whose side you are on!
> 
> ...




Frank,

An "avartar" or more correctly, an avatar, is a 'picture' that forum members choose to use or not. I think mine may be more 'classy' than yours, but frankly, (excuse the pun), I don't give a damn.

A forum membership name is a pseudonym, one that the majority of forum members on whatever site choose to use to protect their anonimity.

I'm under no obligation to you, or anyone else, to disclose my real identity.

I am however under an obligation to myself to tell you, and the ASF members who read or post on this thread, that you do not have my permission to speak on MY behalf just because we both took up Storm Financial's advice for a self-funded retirment 'plan'.

Please believe me Frank, I am more than capable of speaking for myself.  I do not need you, or anyone, to speak for me.

As to who's side I'm on?  What side would that be? Personally, I don't understand most of your posts.  They all appear to be self (Frank) serving.

Grow a set Frank!  Speak for yourself, and feel confident about doing so.

Stop hiding beneath your mother's skirt petticoat, and just talk for yourself.  

I'd still be interested to know just how many former Storm clients you represent.

I'd like to know, and I'm sure many others on ASF would, but am sure that you will not share how many members you have on your SOB site/forum.

So, Frank....

A challenge....

to the obviously 'english' knight you use for your avartar?

How many people have signed up for your 'forum', how many people have you actually 'interfaced' with personally?

Most importantly, how many people have given you their permission to speak on their behalf?

I speak only for myself, I would not speak for anyone else unless I had a written, legal, contract.

I do not want to detract from the content on this thread Frank, and am happy to continue our 'discussion' via PM.

I do need to reiterate however that you, Frank, do not need to speak out on my behalf on any forum or any other media.

MS


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## Judd (2 November 2011)

stormedup said:


> Helen Rubin's son Paul was Storm/Ignite's golden boy.  Been there since finishing studies, worked on asx/research and their useless, inadequate Phormula client information package.  (It was so advanced, they needed to create and monitor client cash flows on an old excel spreadsheet!!)






darkside said:


> Ahh, that is so true, the Phormula Software pack was written on C++ with Excel 2003 used to tally up the portfolios but was never intended to cope with monitoring or even handling lots of data , nor would it have been capable of identifying individual client portfolios.
> Yet this was touted and purchased off themselves (ignite software) EC's own company for a shade over a million dollars, nice work if you can get it.






Solly said:


> From the 2007 Prospectus.
> 
> Highlights of Section 4.3.2
> 
> ...




Some posts circa 2009.  Whether the allegations are true or not I obviously don't know.  If true the PDS could have been stretching the truth a touch.


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## SJG1974 (2 November 2011)

Solly said:


> From the 2007 Prospectus.
> 
> Highlights of Section 4.3.2
> 
> ...




Solly do you have a copy of the Prospectus?  If so, how may one go about obtaining a copy?  I would really like to have a read of it just for my own personal interest.

Cheers


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## Igetit (2 November 2011)

Solly said:


> From the 2007 Prospectus.
> 
> Highlights of Section 4.3.2
> 
> ...




Sure Solly, 

I am not sure that the software referred to achieved that much. Probably a nice bit of marketing for the planned float. Adds a touch of prudence and finesse to the whole scheme. 

Importantly though, it does NOT say that use of the Phormula software will provide data that will TRIGGER A MARGIN CALL for STORM clients. The failure to provide MARGIN CALLS remains, I am afraid to say, the BANK'S problem. Yes the software could probably do all sorts of things. BUT.....it did not in any way absolve the BANK of its responsibility to ITS client under the MARGIN LOAN TERMS AND CONDITIONS. 

Any thoughts from you? Or does this observation not suit?


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## doobsy (2 November 2011)

Igetit said:


> Sure Solly,
> 
> I am not sure that the software referred to achieved that much. Probably a nice bit of marketing for the planned float. Adds a touch of prudence and finesse to the whole scheme.
> 
> ...




Don't you just love the BS in the whole attached image though.

I think we can all agree that the banks will be found to have failed in their obligations to issue the margin calls. They will be asked to bring clients back to a situation where they should have been if the margin call had correctly been made. This doesn't mean clients will get all their money back it will simply solve the negative equity issues. As I have mentioned the 90% level of the margin call means clients will at best be left with 10% equity and a home loan to repay. Got to love advice that puts you back 15+ years and tells you to start all over again paying down a debt you have already paid once. Worst part of that is for alot of clients the original mortgage might have been $100K but because the house went up in value to say $500K, Storm drew out $400K. So now not only do they have to pay their mortgage twice, the second time is most likely for multiple times what they first paid.


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## Igetit (2 November 2011)

doobsy said:


> Don't you just love the BS in the whole attached image though.
> 
> I think we can all agree that the banks will be found to have failed in their obligations to issue the margin calls. They will be asked to bring clients back to a situation where they should have been if the margin call had correctly been made. This doesn't mean clients will get all their money back it will simply solve the negative equity issues. As I have mentioned the 90% level of the margin call means clients will at best be left with 10% equity and a home loan to repay. Got to love advice that puts you back 15+ years and tells you to start all over again paying down a debt you have already paid once. Worst part of that is for alot of clients the original mortgage might have been $100K but because the house went up in value to say $500K, Storm drew out $400K. So now not only do they have to pay their mortgage twice, the second time is most likely for multiple times what they first paid.




Hi Doobsy, 

Not to disagree, you in fact are probably right, but the scenario you paint of what the BANK will be required to do i.e "reverse the negative equity position and put clients back to where they would have been had they received a MARGIN CALL at 90% LVR" - my understanding is that is what the Bank offered under its *Resolution Scheme*.

The reason this was not universally signed off on is because it did not address what clients would have done had they received a margin call from the BANK. Some may have needed to crystallize the losses and pay down their Margin Loan - no doubt. Although I have now seen 7 different processes by which this scenario could be averted. I know you answered a thread of mine regarding this question late last week. No problem with your calculations, but nor do I with the other proposals I have seen. Including offerings from reputable multinational accounting firms - you will know the names. 

But, importantly, on receiving a margin call one option that you seem to dismiss is that of - wait for it - MEETING THE MARGIN CALL (number one option probably for some). So, I propose that the BANK may not be simply able to turn the clock back to 90% LVR and then caution all their clients to be careful and not "let the door hit you in the **** on the way out". They may have to look at each individual's position and ask the question: "What would you have done if we gave you a margin call". Then, with supportive evidence from the client, consider the answer. 

What about that for yet another way to consider how things could be handled? Remember the BANK failed in its duty of care. You have conceded that. So why not legitimately correct the client's position - rather than the cheapest cut and run solution they can come up with? Sounds like maximum damage for the client with minimum damage to the shareholder. A nice way to look at things if you're the BANK. Any thoughts? Keep it civil now!


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## Frank Ainslie (2 November 2011)

Mindstorm said:


> Frank,
> 
> An "avartar" or more correctly, an avatar, is a 'picture' that forum members choose to use or not. I think mine may be more 'classy' than yours, but frankly, (excuse the pun), I don't give a damn.
> 
> ...




I apologised to you before but you want to carry this on! What's more you are becoming personal. Therefore, it seems that you have an axe to grind? Whatever, I'm not interested. One thing is for sure though. You are somehow connected with Storm. You wouldn't be this aggressive unless you were. Goodbye And I do mean "Goodbye!"


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## Frank Ainslie (2 November 2011)

These last few weeks you’ve all had a bit of fun mostly at the Storm investors’ expense. That’s fair enough! However, I would now like to change direction and put the Australian financial advisory services industry in the dock. After all, Storm was a financial advisory firm and it did not operate in a vacuum, contrary to what most would have us believe.

When all this is finished, probably in 2013 or so, I intend to write a book. I’ll probably entitle it, “The Pitfalls of Investing in Australia by Someone that lost 1.7 Million in 15 Months” That should be an attention getter don’t you think! It certainly won't be doing your industry any favours!

Yes! I do have the credentials. (1) I’m a published writer,  (2) I have been investing all aspects of financial advising these last three years, (3) we lost a fortune by placing our trust in a financial advisory firm, (4) I have studied contract law both in the UK and in Australia, (5) I was an advisory consultant for Government, and (6) I was in corporate management for 35 years. It’s probably a track record that few of you could match. You'll find proof of this on my _'Storming on Banks'_ website.

I have, as most have surmised by now, a very jaundiced view of the financial advisory sector and those that operate within. I have, I feel, a good reason for this! Nothing I have heard so far on this forum has changed that view up to now. However, I’m willing to listen if someone has something positive to say that may force me to re-evaluate my assessment. After all, if I find a publisher, my _“tirades”_ will be listened to by a few and it means less business will be coming through the doors of financial advisers. In order to be fair though, I’m going to give the financial sector a chance to redeem itself on this forum. In other words, lets turn the spotlight on you!

I’m going to ask a series of questions in the hope that someone has the capacity to give me some sensible answers. You certainly don’t have to participate but your silence will indicate to me that any opinion you have about we Storm investors on this forum in future is just hot air. It should also indicate  to any would-be investors that use this forum that they should be seeking other avenues to grow their money.

What did Doobsy say? "There is a need to educate investors" I couldn't agree more.

Here’s the first question and try not to fail at the first hurdle!

_“Should investors when using a financial adviser ask to see details of that adviser’s ‘Professional Indemnity Insurance Policy’ and what should that person be looking for in it to reassure him/her that the adviser has adequate cover?”_

When answering this, I would like you to state why Storm’s cover failed in this regard!

Have fun!


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## Julia (2 November 2011)

Frank Ainslie said:


> Yes! I do have the credentials. (1) I’m a published writer,



May I ask if you self published?



> I have been investing all aspects of financial advising these last three years



I don't understand this sentence.  Do you mean you have been investing in all aspects of the last three years?  The sentence as it stands doesn't make sense.



> I have, as most have surmised by now, a very jaundiced view of the financial advisory sector and those that operate within. I have, I feel, a good reason for this! Nothing I have heard so far on this forum has changed that view up to now. However, I’m willing to listen if someone has something positive to say that may force me to re-evaluate my assessment. After all, if I find a publisher, my _“tirades”_ will be listened to by a few and it means less business will be coming through the doors of financial advisers. In order to be fair though, I’m going to give the financial sector a chance to redeem itself on this forum. In other words, lets turn the spotlight on you!



As far as I'm aware, most of us who have commented on this thread, other than Storm clients, are simply interested observers.  

A couple of people who have made clear they are financial planners/advisers have made various posts which make clear their ethics and attitudes.

So I'm not quite sure what you're on about, to be honest.



> I’m going to ask a series of questions in the hope that someone has the capacity to give me some sensible answers. You certainly don’t have to participate but your silence will indicate to me that any opinion you have about we Storm investors on this forum in future is just hot air.



Oh, don't be silly.  None of us are in any way obliged to give you answers to anything.   Just as no one has to identify themselves as you earlier demanded one poster should do.


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## Judd (2 November 2011)

Julia said:


> ....I don't understand this sentence.  Do you mean you have been investing in all aspects of the last three years?  The sentence as it stands doesn't make sense.




Possibly Frank means investigating as opposed to investing.  The sentence then makes sense.  I could be wrong of course since he claims to be a published author and, therefore, would presumably be aware of the need for proofreeding [sic] before publishing.


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## SJG1974 (2 November 2011)

More tripe I am afraid Frank.

You want forum participants to play your little game, yet continually refuse to answer simple questions put forward by others!

You were conned by a Greek in a sportsjacket Frank.  Not every financial planning client has been through what you have, thankfully, so your generalisations about the industry are, like your refusal to take responsibility for YOUR DECISIONS, way off the mark.

You should title your book "How ignorance and gullability cost me $1.7 million in 15 months- a lesson in what not to do when managing your money".  This would sell well.


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## Frank Ainslie (2 November 2011)

*Some home truths!*

(Ross Greenwood 24/11/2009

"_There has always been a fundamental flaw in the way financial planning works in this country.

It's been there for the past 25 years that I have reported on it. And that flaw remains at the very heart of a conflict that exists between most (more than 80 per cent) of so-called financial planners and their clients.

Now, after billions of dollars of investors money has been lost, wasted or, worse, stolen the Government finally has a set of recommendations that could make a change for the better.

Bernie Ripoll's parliamentary inquiry was created nine months ago to investigate the financial services industry in the wake of the collapse of Storm Financial, Opes Prime and the Gold Coast property firm MFS. But it might as well have been the collapse of Timbercorp, Great Southern, Fincorp, Westpoint, Australian Capital Reserve or, going back, Estate Mortgage Managers or Australia-Wide Property Trust.

In every case, bar none, the losses that wracked investors were created by high-risk (often debt-laden) underlying investments that were sold to an unsuspecting public by advisers who were paid well above average commissions by promoters. It's as simple as that.

The Ripoll committee's conclusion is that Government should take urgent action to negotiate with major fund providers (read the banks and the big insurance companies) to cease the commission structures in the industry. That will be a start. But there's another recommendation from Ripoll's committee that is even more fundamental.
To many reading this, you would imagine this should have been a given before the financial advice industry started 30 years ago. But no. It's this. Financial planners and investment floggers are under no obligation to put your interests first.

In other words, even though they recognise there might be a financial product that is more appropriate to your needs, they are not obliged to sell it to you. In fact, if it is in their interest to sell you a product that pays a higher commission, they are at liberty to do so (provided the commission is disclosed).

So now think how many customers of Storm Financial "planners" were inappropriately plunged into a scheme that saw them borrow money against their own homes to in turn use that as a deposit to borrow more money to invest in the stockmarket.
The fact that some of these "victims" were retired and with limited income only highlights the inappropriateness of the advice.

That fact that Storm paid well above average commissions to these salespeople (who double-dipped on the fees because of the double-gearing effect of the strategy) again highlights the conflict that rests within the entire industry.

And a chart that accompanied the report shows that if you head to your trustworthy bank or financial institution's advisory firm, you run an 80 percent chance that you will be recommended to put your money with that same organisation.

Again there could be better products for your needs elsewhere, but that's not where you will end up.

But don't think it's just the big banks. Recently I attended a conference of a group of highly reputable and independent financial planners. As they started the conference they were asked all the key issues that surrounded their business.

They talked about regulation; marketing; fee structures ... a whole range of things. As I got up to speak (angry I must admit) I noted that even though they are considered among the best, of a dozen points they came up with, the one they all forgot was the client. The client must come first, first, first.

So Ripoll's recommendation that the law be changed to put the clients' interest first and foremost in the financial planning process is exactly how it should be. Sadly, though, I know that too many in the investment industry still only think about themselves, and today will be kicking the rubbish-bin, thinking Ripoll is wrong and that the world is against them."_


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## Mindstorm (2 November 2011)

Frank Ainslie said:


> I apologised to you before but you want to carry this on! What's more you are becoming personal. Therefore, it seems that you have an axe to grind? Whatever, I'm not interested. One thing is for sure though. You are somehow connected with Storm. You wouldn't be this aggressive unless you were. Goodbye And I do mean "Goodbye!"




Frank,

Did you not make this personal when you told this forum that you spoke on the behalf of Storm Investors?

You put me in the position where I had to tell you and the ASF forum members who are reading this thread that you do not speak for me.

I do not have an axe to grind with you Frank.  I just need you, and others who are following this thread, to realise that you do not speak for me.  I don't think you speak for very many Storm Investors, but you've ignored the question I asked you about the numbers you 'represent'.

So, is it 10? 100? 500? 1,000?

How many people do you speak for?  How many Storm Investors have you personally interacted with?  How many members does your forum have?

Frank, I apologise for this, but I can't help myself. I'm "re-quoting" you here:

"One thing is for sure though. You are somehow connected with Storm. You wouldn't be this aggressive unless you were."

Are you being deliberately obtuse Frank?

Yes,  I am "somehow" connected with Storm!  I'm a former Storm Financial Client, victim or survivor, feel free to choose the label I should wear.

My "connection" with Storm has cost my family dearly, as it has many other families.

This is my only "connection" with Storm.

I will give it to you on one point, you're very adroit at blustering rather than answering direct questions.

Good Luck to you Frank, I wish you success in all you do.

MS


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## doobsy (3 November 2011)

Igetit said:


> Hi Doobsy,
> 
> Not to disagree, you in fact are probably right, but the scenario you paint of what the BANK will be required to do i.e "reverse the negative equity position and put clients back to where they would have been had they received a MARGIN CALL at 90% LVR" - my understanding is that is what the Bank offered under its *Resolution Scheme*.
> 
> ...




Igetit

No arguments from me here. Some neat modelling of the index should cover this as the funds the clients would have remained in were index funds. No issues with managers picking specific stocks or anything like that to worry about. If a client can prove they had the means to meet the call in the correct time period then they should be given the opportunity to be bought back to a position to reflect that and the subsequent movements since.

As an aside, there should be no argument around additional investing at the bottom of the market or anything silly like that as if people had the funds available they still could have done that anyway.

My assumptions are based on the fact the bulk (I won't generalise further if I can avoid it) of storm clients spent the first few months of the process getting turned upside down, shaken and harried into providing details of every last spot storm might be able to get equity from, bullied into setting an annual budget with no scope for additional or one off expenses and then told how lucky they were because based on all that they could actually borrow more than first expected.

For those who did hold back some monies and could have met the calls, I am all for them being bought back to the correct position. I don't see the banks fighting too hard on this point either.

Frank, think you might want to start a new forum if you go down the track of bashing the whole industry.


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## doobsy (3 November 2011)

Some market decisions you can't fob off to your adviser
Marcus Padley
August 20, 2011

Kick tyres, not advisers.

MOST financial professionals accept that implicit in their fee is compensation for taking the responsibility for the poor performance of a client's investments without taking the credit for good performance.

It's a bit of a joke of course - how can a financial planner in Bendigo possibly be responsible for the performance of global markets, but still they take the blame and they do so to protect a client from taking the blame themselves, while generously bequeathing them the credit when it goes right.

It is an extremely important service which is highly valued by the client. It is like an insurance policy, a free option on looking clever, or at least not stupid, whenever you have to explain your investment performance to your spouse, dependents or dinner party guests.

Far better that your fund manager is a muppet, your stockbroker an idiot or your financial planner a crook, than you take responsibility for anything. The client is always right after all.

But, games aside, the truth is that there are certain decisions in finance for which the client is responsible. So, rather than hide behind your adviser, it would be far better if you took those decisions up front. They include:

THE DECISION TO INVEST IN THE FIRST PLACE It's a bit like this. If you wander on to a car lot looking at cars, the assumption is that you want to buy a car.

So, when you turn up in the offices of a financial professional there is an assumption that you want to buy something and, as most financial professionals only get paid when you do buy something, their job is to arrange for you to buy something. They are both salesman and agent. But it is your responsibility. If you wander into the yard and then get sold a car, what did you expect?

LEVERAGE Leverage to us is a product. We get a trail on it and, even if we don't, the more money you have the better it is for our fees and commissions.

It is in our interests to sell it to you and we would be foolish not to, not to present it as ''normal'' even when it's not. But it's not normal and it's not necessarily good for you. It is just an accelerant. If you lose you will lose more. If you win you will win more. And the undeniable reality is that it is only suitable in reliable bull markets. And, by the way, if you own shares outside of super and have a mortgage, you're leveraged. Being leveraged or not, it is your responsibility.

SELLING One of the hardest lessons from the global financial crisis was that nobody ever tells you to sell, because our job is to get you in, not let you out. The decision to sell is yours and, even when you decide to do it, you will have to be assertive because the likelihood is that we will resist you and we have a well developed bag of tricks to stop you. If you want to get out of the market you have to decide to do so. The decision to sell is your responsibility.

HAPPINESS Happiness is expectations met and the route to unhappiness is to have unrealistic expectations about what your investments are likely to achieve.

The main problem there comes from not understanding your benchmarks. In managed funds, it's the average return on all the invested asset classes less fees; and because of fees you have to expect to underperform. Because there are so many unrealistic expectations in this industry, often led on admittedly by unrealistic sales pitches, the number of people that get pleasantly surprised is tiny and the number of people disappointed is big. Your happiness is a function of realistic expectations. It is your responsibility to be happy.

The bottom line is the unfortunate fact of life that you cannot avoid responsibility for your own financial affairs. You have to be involved because, as any financial professional will tell you, ''if you don't care, no one will''.

Marcus Padley is a stockbroker with Patersons Securities and the author of stockmarket newsletter Marcus Today. For a free trial, go to marcustoday.com.au

His views do not necessarily reflect the views of Patersons.


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## Gerkin (3 November 2011)

GO BACK AND READ THE FIRST PAGE OF THIS THREAD AGAIN........VERY GOOD ADVICE FROM GG AND DUCKMAN......I ACTUALLY GOOGLED STORM BACK IN 08 AND FOUND THIS THREAD AND DUCKMANS POST


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## doobsy (4 November 2011)

Snippits from Storm Financial

Since this was the tripe being spat out of their research department, is it any surprise no one was sold out before they lost everything?

Research Department
Storm Financial Pty Ltd.

Updated: 5:00pm, Tuesday 21st August 2007

Storm has always maintained that the further we get into this bullish cycle, the higher the volatility will become. This recent blip is therefore unlikely to be a fundamental change in economic / sharemarket trend. What this blip is likely to mean, for those with foresight, is an opportunity to have invested relatively low and finally gotten the chance to employ Storm’s approach to wealth creation, which is to accept the market average but attempt to outperform it when pockets of value present themselves, i.e. buying low to outperform the averages. With relatively linear sharemarket growth over the last 5 years, it has been difficult to find these little pockets of value but as volatility begin to increase, falls such as these may continue to land in our lap.
Consider this, the normally conservative Reserve Bank of Australia (RBA) still finds our economy a little too hot for their liking, thus the recent 25 basis point hike in interest rates, They’d most certainly not want to be hiking rates in an economy that had fundamentally changed for the worse, especially leading into an election. So this brings us full circle, back to the US sub-prime development, which realistically is not materially relevant for Australia and even less so for the Storm style of investing. Australia is not exposed to the extraordinary levels the US was and Storm’s preferred investment process even less so than that of Australia.
Remember, there is a difference between investing and speculating. Storm try to do the latter, believing in economic investments and the material elimination of asset default risk and the elimination of the subjectivity of selection risk. We attempt to focus on maximizing the right investment principals, which is why Storm is focusing as much as possible on advising clients to invest now, whilst the industry itself is reeling from a mere 8% (12% at it’s worst point) aggregate sharemarket fall and getting record numbers of margin calls.

Commentary for first quarter 2008

The continued tightening of monetary policy over the past two quarters, flailing consumer sentiment, softening economic growth, further global credit scares and a second consecutive negative quarter in domestic and global sharemarkets may have all now conspired to potentially indicate an end to this current sharemarket turmoil in Australia. It may be time for the bulls to sneak back into the market place… 
This quarter’s sharemarket value wash out may now be close to the end but leaving the explanation for the above arguments aside, which will be discussed further down, simple statistical evidence indicates that a potential bottom for this current bearish sharemarket cycle is statistically probable. While depending solely on statistical evidence is a very dangerous game, and right interpretation of data is paramount, one can use this evidence as a piece to a very complex puzzle in trying to understand core trends of most financial markets. 
over a very long time, our market as a whole survives and continues to grow at solid and reasonably consistent rates. As of the dates in the above graph, our sharemarket shows an 11.26% compound p.a. return. However as time goes by and our country / economy / market matures, this rate gets higher and more profitable. For example, this leading index over the past 50 years from 1957 to present has a 12.79% compound p.a. return and for the past 30 years from 1977 to present has a 15.38% compound p.a. return. So while the 110-year average is 11.26%, the return seems to be increasing as time goes on, but that is a very complex story for another time.
The take out for us today is the above performance graph indicates that this current climate is likely to be temporary (but of course not the last impact our market will see) and is unlikely to be the final killer blow to our broader market, as some are erroneously anticipating. This is consistent with Storm’s approach of total market indexation coupled with no market timing, where we accept the overall natural, un-timed and neutral sharemarket returns and do not speculate on sectors, sub-sectors, industry groups or direct companies, which are all subject to potential default risks. Fundamentally the sharemarket is an efficient financial mechanism and with the long term in mind, we can harness this ongoing wealth in a safe way.
there have only ever been 14 periods in almost three decades where the sharemarket has finished negatively for three or more consecutive months. Of those 14 periods, only four times has the sharemarket finished negatively for five consecutive months. Since 1980, our sharemarket has never closed lower for more than five consecutive months and we have just closed March 2008 as the fifth month having posted negative capital growth in this current bearish cycle.
Essentially that means that while it is entirely possible for us to close for another month in negative territory for April, that statistically it would be an anomaly and a new record would be set for the sixth consecutive negative month in a period. On top of this, the month coincides with April, which is historically is the most profitable month of our calendar.
This can give some view that despite all that has happened in almost three decades, a five month wash off of value has been all that was required to break the back of whatever was causing the initial financial mess. This is not to say that the following recoveries are consecutive month on month growth, but retrospectively you find a break point or low for a poor period, similar to the period of March 2003 being the fundamental shift of our market back to bullish ways after the 9/11 – Iraqi war turmoil.
So what are the chances for further turmoil? What are the chances of another month down? Well no one can really know the answer for either question. So what do the statistics imply? What are the statistical chances that we are close to, or at the bottom of this current trough? Well statistically speaking, the probabilities are very high actually. This statistical evidence then implies that the value in our market place may be the best it has been since 2003 or even as early as the month following the crash of 87…
business confidence is still high and companies are still reporting solid earnings. This strong economic contradiction may indicate that our reactions to the sub-prime / global credit mess is more emotional for Australia. On top of this, Australia is in no real way exposed to this sort of poorly managed financial mechanism and certainly not at the level the US and other major country’s are, reinforcing the fact that our dramatic falls are emotionally based, not based on fundamentals (as in the US). It also may indicate that an equally speedy recovery is ever more likely due to this fact.
Incidentally, as the title indicates the bulls may already be back sooner than some expected with leading sharemarket indices having risen for all five trading days for the first week in April. These indices have recovered approximately 5% this week alone, leaving leading broad market indices very near the 5700pts barrier…
Overall not a great quarter but we can take some comfort in the information available with statistical data as well as economic fundamentals, not to mention the longer term performance of our sharemarket which we touched on at the start of this commentary, painting a positive picture for the future. There will be up and down periods in our sharemarket. But these periods to date have never brought the sharemarket to its knees, which historically have always reverted back to its longer-term averages. On top of all that, this week has shown some resilience coming back into our market place, despite what global markets have done with five consecutive days on the rise. Let's hope the bulls hang round for a while and make April yet another great month for our sharemarket. Remember, it is far more dangerous to be out of a rising market than in a falling market. This investment adage may be more pertinent at times like these as we await an impending recovery.
Watch out next week for a full wrap of leading global sharemarkets and the global economy as a whole for Q1-2008. We will discuss what issues will be facing the US over the next few years and how much of a role Asia may play. We will of course also touch base on the progression of our sharemarket recovery that may have already begun this week…
Storm Financial Ltd.


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## doobsy (4 November 2011)

Updated: 5:00pm Friday 6th June 2008

As the title indicates, our sharemarket and all its underlying sectors trended negatively for the third consecutive week, continuing to wipe away much of the mid March/April/early May recovery. However, leading market indicators and anecdotal statistical evidence seems to be pointing toward a potential end to this current bearish trend – which despite only having manifested in broader market indices since November – has been present in the market place for well over a year now. In English, the pressure may now be considerable for an impending upside for the sharemarket, much more than some may realize. Bulls may be just around the corner…

Bear and Bull market averages
So what do we know about our sharemarket statistically? 
•	We know that Australia’s leading broader market indices reflect a historical rate of return of between 12% – 14% over most medium & long term time frames. For example, since 31.12.1979 to 05.06.2008, almost 30 years, the S&P/ASX All Ordinaries Accumulation index reflects a compound p.a. rate of return of 13.44%.
•	We know that our broader market indices also reflect sharemarket fluctuations, which can be considerable. At Storm, we expect volatility and prepare for it. In fact, we benefit from it, but that is another story for another time. We have statistical evidence to show the biggest and average bull and bear market periods in terms of time and overall % movement over the past half century. 
•	We know that over approximately half a century, the average well defined “Bull market” runs for about 4.4 years and inflates broader market indices by almost 200%. The biggest accepted bull market however was of course the lead up to the 1987 crash where the broader market continued to grow relatively unabated for 62 months (over 5 years) and inflated the All Ordinaries index by almost 500% in that time. In hindsight, a crash of the magnitude of October 1987 was necessary to bring the market back to fundamental averages.
•	We know that the average “Bear market” over the same half century averages approximately 1.5 years washing away sharemarket value. During this time, the bearish sentiment drags broader market indices lower by -25% on average. However, once again this is merely the average with the worst Bear market being the Crash of 1987, which lasted about 5 months from October 1987 to February 1988 before markets started to rise once again. The catch here is that during this fall, the sharemarket lost a huge 41% of its value! This is not an exceptionally long time frame, but a huge value-wash off when compared to the average bear market wash off. 
Our sharemarket as a whole has not been in a bearish climate for merely 7.5 months, as the broader market indices indicate, which of course suggests that at least another 10 months is required to hit bear market averages before we’d reasonably expect markets to rise significantly once again. It is my opinion that we do not realistically have another 10 months to wait before we hit average bear market time frames. 
The below graph shows that our Resources sector has been buffering poor sentiment in our industrials sector since as far back as December 2006! In normal circumstances, with a normal resources performance and weighting, our sharemarket broader market indices would not only NOT be showing a mere 7.5 month wash off from November 2007 to present, but they would likely have a record high set way back in May 2007. Or even earlier as far back as December 2006. Worth noting is that the SFA Industrials index record high was actually set in May 2007. 
It is entirely possible that without the unprecedented growth in resources, which we discussed in the last commentary, our sharemarket would be not be reflecting a break even for the past 19 months as it has done to date. It actually would be at, or below, what our industrials sector is doing and would normally have been down for well over the average bear market period. Whilst most feel that we have just entered a bear market based on broad market index readings, it is my view that we could be on the way out of a bear market that began in early 2007 or late 2006 as we are now well over the averages of how long most bear markets run. 
The upward pressures are far higher than many may realize and as the title suggests, we may be closer to the end of this bearish trend due to resources having finally woken up and begun to offset the negative sentiment that has been around far longer than merely the past 7.5 months since November 2007. 
What must be stated here is that this is statistical evidence and can only provide a small piece to a very complex puzzle. This data can help one gauge a different perspective on sharemarket trends, but is not intended to encourage speculative investment behavior. Remember, we here at Storm are investors, not speculators. We can benefit from sharemarket volatility. We don’t participate in the emotional aspects of fear in bear markets and greed in bull markets. However it provides some comfort to realize that we might be further in the bearish phase statistically speaking than merely 7.5 months and the “end”, whenever that is, theoretically could be closer than anticipated.


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## doobsy (4 November 2011)

Some of the ways we guide you...
Financial Education

Education is the key, and that's were we begin with you. The financial education we offer is not available anywhere else in Australia. We recommend you attend our workshops - no pressure or obligation - before any decision is made about becoming a client.
Focusing on potential wealth

Investing successfully is all about fulfilling your full financial potential, not about being constrained by the limits of your present position, no matter how big those limits may be!
Creating investment capital

A big challenge with investing is getting the capital to get started. We help you identify the assets you have built up so far - even those which you may not know you have - and unlock their value.
Managing through the markets

By ignoring speculative and short-term investing we turn market volatility to your advantage. We manage and monitor your portfolio through the markets' movements, and by doing so, allow the long-term and exponential growth to emerge.
Accelerating your progress

We've proved to be quite a catalyst in that our clients have achieved more than they thought possible and in a shorter timeframe.

Think of it as 'life renovation' - we help you see much more of your potential, expand your awareness to new possibilities and then show you how to achieve it.


Guiding the way...

STOP!

Some people want us to provide recommendations or advice after their first visit to us. That is not what we do. There is a lot of ground that needs to be covered first.

We suggest you avoid running a red light!
What would be the point anyway? If you rush ahead without being clear about which is the right direction, it's a pointless exercise.


PREPARE

Take the time to learn what it's all about. Go through the steps of our education process. Spend time with us preparing your plan.

It is only when you understand all the information at hand that you are in a position to decide whether you would like to proceed.

It is only when we've had time to get to know you that we can decide whether we'd like to proceed.


GO!

Once all the preparation is complete, you can go forward with confidence, knowing the direction you are heading is the right one.

We are there right beside you to help with navigation. We ensure clients maintain a level of knowledge vital for their wealth, growth and peace of mind. Our processes are transparent and we are accountable to you as we regularly monitor, measure and manage your portfolio. Advisers and staff are available and on hand for both your financial and personal benefit.
storm

If you don't put the work in now, you'll end up working a lot harder and longer for a lower quality of life, putting in far more effort and not getting anywhere near the rewards.


You create your own circumstances

There is a storm on your horizon. If you choose to stand in its path, you can prepare, rise to the challenge, reap the harvest, then enjoy the fruits of your labour.

That is what we have done. Collectively we've demonstrated that the grass is greener on the other side. We'd like to share our good fortune with you. Come over and join us.

As a Storm client, your good fortune is both in your hands and ours.

It's hard work to start with - though it is more a mental hurdle than anything. You will be pleasantly surprised when you realise it was easier than you thought it would be.


Where to now?

Maybe this has inspired you and you'd like to include us in your journey to personal and financial success…

If so, congratulations, you're on the road to financial freedom!

Maybe you're feeling unsure or you have decided our approach is not for you…

Then we suggest you attend our workshop - you have nothing to lose as there is no pressure and no obligation; what you discover will benefit you in the future regardless of whether you continue with us.

If you still feel our services are not for you, we strongly encourage you to explore other options. The most important thing is that you get to and just do it, even if it is somewhere else. We sincerely urge you to give high priority to seeking financial guidance and all the rewards such guidance brings.

"The future is not a place to which we are going. It is a place we are creating. The paths to it are not found but made, and the activity of making them changes both the maker and the destination."

- John Schaar



Good fortune is something you can create. It's a team effort. Growth and fulfilment of dreams is made possible by our know-how and your willingness to do what it takes - it's not as difficult as you may think.


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## SJG1974 (4 November 2011)

Statistical gobbledegook. No wonder half their clients had no idea what was going on.

Like their SoAs...lots of words with little substance.

A complete reliance on history repeating itself without any analysis whatsoever of what was actually happening at the time.


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## Julia (4 November 2011)

doobsy said:


> From Storm's "Research Notes":
> 
> "Remember, there is a difference between investing and speculating. Storm try to do the latter, believing in economic investments and the material elimination of asset default risk and the elimination of the subjectivity of selection risk".



Storm "try to do the latter"??? the latter being speculating.  At least they got that right.  Obviously this is a total error on their part and they meant to suggest they abhor speculation and focus on the joys of pure investment.  They clearly didn't even proof read their copy before printing.!

As for the rest, what a load of total garbage.

I did read through the first one, but lacked the fortitude to do the same with the second.

I have absolutely no idea how anyone could actually read this junk and not realise what a total sales pitch it is, with no logical basis in reality, especially when they suggest the subprime mess would have essentially no effect in Australia.

Any investigation into this whole miserable affair should only have to read these 'research notes' (what a joke) to understand the total crap that Storm comprised.


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## Solly (5 November 2011)

As you probably are aware I have had the opportunity to chat with a few ex-Storm clients and their family members. One common theme is that they believed that they were dealing with a company that had processes and quality systems in place to competently manage and monitor their investments.

One ex-Storm client mentioned to me that they believed that with the principals being highly qualified in finance, Storm was a sound stable company. Below is the manner the Cassimatis' were presented on the website. To hold a Master of Applied Finance would most likely lead to the belief that they held more than basic understanding of the industry. Although I am interested to know what previous qualifications they held before attaining their Masters degree.


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## Igetit (5 November 2011)

Solly said:


> As you probably are aware I have had the opportunity to chat with a few ex-Storm clients and their family members. One common theme is that they believed that they were dealing with a company that had processes and quality systems in place to competently manage and monitor their investments.
> 
> One ex-Storm client mentioned to me that they believed that with the principals being highly qualified in finance, Storm was a sound stable company. Below is the manner the Cassimatis' were presented on the website. To hold a Master of Applied Finance would most likely lead to the belief that they held more than basic understanding of the industry. Although I am interested to know what previous qualifications they held before attaining their Masters degree.




Hi Solly, 

Yes the qualification of Master of Applied Finance does suggest more than just a cursory understanding of their profession. As does the moniker of: "full member of the Australian Financial Planning Association"; "certified practising accountant"; "specialist plastic surgeon."

We all attend "professional" people believing they they have their area of endeavour "under wraps" as it were. Not sure where you heading with your enquiry? Not overly deceptive or misleading - I wouldn't think - to note on your cv if you have obtained a particular qualification. People will draw their own conclusions from what they read. 

The BANK wrote in its TERMS AND CONDITIONS that they would provide their clients with a MARGIN CALL. You would reasonably expect them to do that - but they didn't. You would thing a BANK would have a pretty good handle on its processes and would be confident they would do what they say. Right??

For the record, I have heard that Manny had obtained a Science degree and I understand Julie was studying Law.

Hope that helps.


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## chrisgee (5 November 2011)

I havent posted here for a while but it doesnt mean I havent been reading. Things have really hotted up with the posts lately. I still get a sick feeling in my guts aboiut this mess. its 3 years now and nobody is in jail yet.What a frigging surprise.The biggest collapse we have ever seen and it appears its still nobody's fault. Does anybody know what Manny is up to? Is he stacking shelves at Safeway? I don't think so. Is he broke like some of the stormies? I'm still very very angry about all of this. Is anybody going to end up in the slammer???? Who is to blame ? Banks? Storm? WHEN WILL THE TRUTH COME OUT??? WHEN?? THAT IS ALL I ASK...End of rant


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## Gerkin (5 November 2011)

chrisgee said:


> I havent posted here for a while but it doesnt mean I havent been reading. Things have really hotted up with the posts lately. I still get a sick feeling in my guts aboiut this mess. its 3 years now and nobody is in jail yet.What a frigging surprise.The biggest collapse we have ever seen and it appears its still nobody's fault. Does anybody know what Manny is up to? Is he stacking shelves at Safeway? I don't think so. Is he broke like some of the stormies? I'm still very very angry about all of this. Is anybody going to end up in the slammer???? Who is to blame ? Banks? Storm? WHEN WILL THE TRUTH COME OUT??? WHEN?? THAT IS ALL I ASK...End of rant




ever thought of taking some responsibility yourself???? good whilst the market is returning 15% p.a......we are turning into americans the way we sue nowadays,


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## Frank Ainslie (6 November 2011)

Just had a quick look to see if anything has changed! In general, sentiment still seems about the same.

I’m afraid no one on this site that may be working in the financial sector as a financial adviser or in some other capacity quite realizes the impact the collapse of Storm Financial has had, and will continue to have on his or her industry. One of the issues that financial advisers now have to deal with is _“trust” _or rather, lack of it.

All we hear about on this forum are the foibles of Storm and the foolishness of the people that used that firm to invest. Whilst this may instil in some the feeling that they cannot be blamed for what a rogue financial advisory firm did, I’m afraid that is what ordinary Australians will think. It’s called being guilty by association. 

So, I believe, it will be the financial advisers and those within the investment markets that will be feeling the pinch in the foreseeable future, not us. After all, our fate will be decided in a court of law, not on this site so we are not really concerned by what you say or think. You, however, should be concerned though by what we think because that word-of-mouth business that once existed will dry up if it hasn’t already done so. We are many mouths and our generation has children and grand-children that will preach our mantra, _“They cannot be trusted!”_

You may level abuse on us for now but it’s going to come back to bite you. The Storm collapse will leave a smell for years and rightfully so. No matter how you dress it up, qualified financial advisers that were FPA approved gave Storm investors bad financial advice full-stop! The professional indemnity insurance was a chimera, the compliance regulations were inadequate, systems were non-existent, and our trust was met with lies and subterfuge. Yet, you have endeavoured to shift some of the blame to the Storm investors. No doubt, you think that by so doing people will think this was a one off aberration, and the public will not condemn the financial sector in general for what occurred with Storm. 

Good luck if you believe that because many would-be investors will be now looking elsewhere rather than using financial advisers.  Once people out there (some of them could be potential investors) have assessed the evidence, for themselves they are just going to be too wary of being burnt like us. After all, they are going to ask themselves, _“What guarantees are there that this won’t happen again?”_ 

I believe that anyone on this forum that is connected with the financial sector would be far better off concentrating on how they are going to win back some _“minds and hearts”_, rather than mocking us at every opportunity. This type of ploy will just alienate us further! Remember that we, the victims of Storm and the Banks, number in the thousands, and that’s a very wide sphere of influence 

The Storm affair has already generated a lot of bad publicity to date about financial advisers in general, not just Storm, and there will certainly be a lot more before all this has finished. Every single piece of bad publicity will be just another nail in your coffin so it’s time you started seeing the bigger picture.

One of the many things that Storm investors were led to believe was that Storm had adequate 'professional indemnity insurance'. If people on this forum want to have a constructive debate with a view to winning back some of that lost trust, I am quite willing to start with what I consider to be one of the key features that might, if the industry now gets it right, enable financial advisers to reassure their would-be investors that their investments are safe- not from market downturns but rather from shonky financial advisers. If you cannot convince them that you have this under control, and you have safeguards in place to protect their assets from crooks, you won’t have a business because you won’t have any clients left. You’ll then be the ones looking for work, not us. We’re all too old anyway. Your call!

And Julia and others,

If you were unfortunate enough to be raped the last thing you would want is to be continually questioned about your motives. Yet, we know that this is exactly what happens to women when they find themselves in such circumstances. We have been raped by financial advisers who acted in conjunction with banks. We don’t need anyone to keep on reminding us that we should not have walked down a particular road. 

75% of the people that lost everything when Storm collapsed were elderly people that put their trust in the financial advisory sector. If your parents had been duped as many were in Storm, I doubt whether your attitude would be quite so recalcitrant.

I know! They are far too clever for that!

And Doobsy,

_“Since this was the tripe being spat out of their research department, is it any surprise no one was sold out before they lost everything?”_

You seem to forget that this tripe as you call it was spouted out by someone in your industry! Why should any would-be investors in the future believe anything you or others may say if Storm, who were financial advisers, lied to us from the start. Why should your firm be any different? As I said before, you are guilty by association whether you like it or not. Get off the Storm bandwagon and start looking at ways of improving the financial sector. It’s your only salvation.


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## Gerkin (6 November 2011)

Frank Ainslie said:


> If you were unfortunate enough to be raped the last thing you would want is to be continually questioned about your motives. Yet, we know that this is exactly what happens to women when they find themselves in such circumstances. We have been raped by financial advisers who acted in conjunction with banks. We don’t need anyone to keep on reminding us that we should not have walked down a particular road.
> 
> .




pretty low comparing this to actual rape dont you think


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## Solly (6 November 2011)

Gerkin said:


> pretty low comparing this to actual rape dont you think




Gerkin, I agree that Frank's comments are of a very strong nature. But I have a first hand understanding of the extremely high level of frustration and ongoing stress the victims of this saga are enduring. 

One Stormer said to me about the Storm experience was that he felt like he was lured down a dark alley with the promise of it being a shortcut to the highway, then having the crap beaten out of him, stripped, robbed and then the cops saying it was his fault.

Emotions are still running at an extremely intense level within some of the ranks of the affected. There have been tragic outcomes as a result of the way some have reacted to this event. 

Impacts have been far reaching for families, associates and friends. I hope that I never ever get another message sent to me that informs me of another family loss as a result of this debacle.


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## Julia (6 November 2011)

Frank Ainslie said:


> And Julia and others,
> 
> If you were unfortunate enough to be raped the last thing you would want is to be continually questioned about your motives. Yet, we know that this is exactly what happens to women when they find themselves in such circumstances.



This tasteless comment does not deserve a reply, but I am utterly incensed that you would make such a personal remark to me.

For your information, I have indeed been raped.  Repeatedly.  As a child by my grandfather.  From the age of six until I was ten.    I had no redress whatsoever.

How dare you compare such an experience with some people who failed to apply common sense to shonky financial strategies suggested to them by rogue advisers.

I have never, ever felt like leaving ASF, despite some robust exchanges, but I will not be so personally insulted.


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## Frank Ainslie (6 November 2011)

Julia said:


> This tasteless comment does not deserve a reply, but I am utterly incensed that you would make such a personal remark to me.
> 
> For your information, I have indeed been raped.  Repeatedly.  As a child by my grandfather.  From the age of six until I was ten.    I had no redress whatsoever.
> 
> ...




Now you know how we feel!


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## SJG1974 (6 November 2011)

Frank, Frank, Frank.  Your victim mentality is quite astounding.  You are not prepared to take even the slightest bit of responsibility for what happened are you? For the decisions YOU made, and the lack of research YOU conducted into what the Greek bearing gifts told YOU he could achieve for YOU. and of course, for paying a ridiculously high fee for whatever it was you thought you were getting (oh thats right, you only thought you were getting financial advice...7% is the going rate for this apparently...).

And you have the nerve to compare your experience to that of a rape victim! Dear lord.

I would be interested in Doobsy's take on this, but you know what, I think this has been good for the financial advice industry, because it will sort out financial advisers from investment advisers and salesmen.  Advisers who base their business on investments and the success or otherwise of the markets will struggle, and rightly so.  commissions have been in the spotlight and rightly so.  I guess we can thank Storm for that Frank.

The advisers that go ahead and prosper will be those who can demonstrate value via strategic planning- they are the true financial advisers.  Ones who can structure your assets in a tax effective manner, those who can implement strategies to help reduce debt, build cashflow and build assets without relying on investment markets and returns.  Those who base their model on the things they and their clients can control, not those they can't (like the markets).  And these advisers will charge fee for service, not 7% upfront commissions like you did Frank.  So I would say the complete opposite is true frank....Storm has been good for the industry, but not for the cowboys. 

In speaking to my adviser, he doesn't want clients who are focussed on investment returns...he sees this as a no win situation.  So he focusses on the things he and his clients can control, like advice.  How is that a bad thing???

However, the problem of people being seduced by the slick sales spiel, the promise of "safe" returns from the sharemarket, and placing their financial future 100% in someone else's hands will never change.  There are plenty of people out there who will be seduced by the next Storm/ponzi shceme/nigerian email scam etc., becuase the promise of instant wealth is too much for some to resist. I think you can relate to this Frank...


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## doobsy (6 November 2011)

SJG you have done my job for me.

Frank, we have grown in a key "Storm" town throughout the ongoing crisis. Just as you are employing professionals in the legal area to help you because you don't have the experience or expertise to do it yourself, so we will continue to gain new clients and retain existing clients who know they need assistance. My advice revolves around adding value and then charging accordingly. Whether it be a 80yr old pensioner who is happy to spend $400 to have us help with Centrelink to a DIY SMSF with $6M who I charge $3,000 for purely strategy and technical advice and he does his own investing, to the 55 year old employee who might pay $5,000 but has serious ongoing strategic work happening prior to retirement and where we are ACTIVELY managing a portfolio for them and have provided advice that has saved them many multiples of my fee per annum.

I don't fear the scrutiny, I revel in it. I can explain what I do and what value I add. I don't have to rely on averages, promises, markets to perform. We don't advertise at all. We look after our clients and their accountants or solicitors that initially referred them see this and then refer others that need help. I actually do my job past getting the client signed on and therefore know I provide value.

Frank I have no doubt it must eat you up that you were one of the poster children for Storm. An example that Storm HQ used to show other regional offices how to woo and bed the big client.

The FP industry will continue to grow because people like you need people like me to stop them from making DUMB decisions with their money. Some clients that is the best value I add, stopping them from themselves. 

Like has been mentioned, society has had snake oil salesman since the dawn of time. Some fall for the story, others are more careful. Count the stories in the paper in the next 12 months, watch today tonight and a current affair, there is always someone with flashy qualifications and a membership that is out to rip the guts out of the unwary. Builders, lawyers, accountants, financial planners, car salesman, insurance mobs, encyclopaedia salesman. It is across the board.


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## Gerkin (6 November 2011)

Frank Ainslie said:


> Now you know how we feel!




disgusting that remark,


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## bunyip (6 November 2011)

Harleyquin said:


> Bunyip what has the fact that stormies may or may not have been wealthy pre storm got to do with seeking financial advice?  Why is it considered by some to be a sign of greed to seek help with your finances irrespective of your financial circumstances?
> 
> Has anyone on this forum seen any evidence that if you are well heeled that you shouldn't be seeking financial advice from financial planners or banks.  Even large companies with billions at their disposal employ people to advise them on financial matters.
> 
> ...




Hi HQ

Guess you thought I was going to ignore the above questions, given that I haven’t responded in the week since you asked them.
Truth is that I was never going to ignore you, but I’ve been tied up over the last week in buying a new car and entertaining overseas guests, among other things, and I just haven’t logged into the forum in that time.

So anyway, here is my answer to you.

A person’s financial situation should have no bearing on whether or not they choose to consult a financial planner. However, individual financial circumstances should definitely have a bearing on the kind of advice they seek from the planner.
If someone is at or near retirement and is trying to scrape by on minimal income and minimal assets, then obviously that person going to be seeking advice on strategies to boost their income and hence their chances of having a decent living standard in retirement.
Such advice may take the form of investment advice, rather than financial planning advice. (Incidentally, there are significant differences between the two.)

In a very different situation to the person above is someone who is at or near retirement and has already achieved sufficient wealth to retire in comfort and live off the proceeds of their investments. This person would be little more than a greedy fool to seek the sort of investment advice that’s designed to dramatically increase their already adequate retirement income. What such a person should be seeking instead is professional advice on such matters as estate planning, superannuation, taxation minimization, asset protection, and a range of other advice and services that professional financial planners can provide, and at fees well below 7% upfront.


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## bunyip (6 November 2011)

Frank Ainslie said:


> A question of greed! (Part 2)
> 
> 
> 
> Before we signed with Storm I asked them whether they would be monitoring our portfolios. They assured us that they had systems in place _"trigger-points" _so there was no risk to our investments. In fact, I have evidence on hand that they told us this and I may yet be using this in a Court of law if Cassimatis gets any money back! That's another story!




No risk to your investments eh Frank?
And you believed Storm when they told you this bull****?????!!!!!!

Tell me Frank, have you ever in your life found an investment that was risk-free? Particularly one that offered the high rewards that Storm’s strategy offered?

Please tell me about any high reward/risk-free investments that you know of Frank, so I can invest in them immediately.

_*And you wonder why Julia and I and others tell you that you failed to apply a basic common sense test to what you were told by Storm!!!*_


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## Judd (6 November 2011)

Frank Ainslie said:


> Now you know how we feel!




That is a vile remark.  Totally vile.  To equate the abuse of a child or any female to losing money is disgusting.  You have real attitude problems, Frank


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## McLovin (6 November 2011)

Frank Ainslie said:


> Now you know how we feel!




And with that you have lost any credibility you might have had.

Absoloutley disgusting.


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## bunyip (6 November 2011)

Frank Ainslie said:


> I apologised to you before but you want to carry this on! What's more you are becoming personal. Therefore, it seems that you have an axe to grind? Whatever, I'm not interested. One thing is for sure though. _*You are somehow connected with Storm. You wouldn't be this *_*aggressive unless you were*. Goodbye And I do mean "Goodbye!"





 Frank 
A childish outburst such as the one above makes you appear more like a churlish 15 year old schoolboy than a grown man of 70 years.

Who are you to emphatically state to Mindstorm that_ 'You are somehow connected with Storm'._
I strongly suggest that you learn to activate your brain before you put your mouth into gear.

I have no idea who Mindstorm is, but I first became 'acquainted' with him about two years ago when he sent in a rather spirited post in response to me asking why Stormers who were already wealthy and retired would choose to adopt Storm's aggressive and risky strategy in an effort to even further boost their wealth.

To his immense credit, Mindstorm later apologized for his outburst.
This led to me swapping a few PM's with him, in which he gave me a general outline of how and why he chose to become a Storm client.
Without giving too much away in regard to his personal details, he did make it very clear that he held an extremely poor opinion of Storm Financial for their shonky advice and shabby treatment of their clients.

So for you to tell Mindstorm that he is _'somehow connected with Storm_', is quite frankly so far off the mark that it makes you look foolish in the extreme.

I say again to you Frank, put your mouth into gear before you put your brain into gear and your fingers to the keyboard. That way you'll avoid making a fool of yourself with silly, ill-considered comments.

Mindstorm  
I hope you don't mind me speaking up in your defense - I know you're well and truly capable of speaking for yourself without any help from me.
It’s just that Frank is inclined to say some pretty damned silly things at times, and well, I just couldn't let him get away with that one.

Hope you and your family are keeping well.
Cheers and all the best
Bunyip


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## DocK (6 November 2011)

Apologies if I'm butting in, but I think Frank is confusing my post and Mindstorm's as being one and the same - we both, separately and independently,  requested he not take it upon himself to speak for "all ex-storm investors".    I did send Frank a pm to that effect when I saw his outburst directed at Mindstorm, but it would appear he has either not read it or has chosen to ignore it.

Given Frank's recent comments I would like to emphasise that he does not speak for everyone who invested via Storm - I also find his latest comments to be repugnant.


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## Frank Ainslie (6 November 2011)

What a load of absolute hypocrisy! People on this forum have consistently chosen to misrepresent or pervert what we, the victims of Storm and the banks, are trying to convey. Now, we have the sympathy ploy. Julia states that she has been the victim of sexual abuse and somehow I am the bad guy! 

I actually said, _“If you were unfortunate enough to be raped the last thing you would want is to be continually questioned about your motives.” _This is a hypothetical for God’s sake. If Julia wants to air what happened to her in public that’s her choice. I didn’t ask her to do so! 

No one has been interested so far in what has happened to people in Storm. People that have killed themselves, people that have had their lives destroyed, people that have nothing left. No, you are only interested in focussing on one person’s claim that she has been abused. Do you really believe that she is the only one that has suffered? 

I’ve had a woman that said her husband was looking to kill himself and make it look like an accident so she could claim his insurance and help his family to survive. Then there’s the story of a boy that had an accident and had an insurance pay out that would support him for life because his injuries were so bad that he needed full time care. Yet, his family were duped into investing in Storm and they lost everything. Now they have to support him despite the fact that they have nothing left. 

I have a thousand stories but you are not interested, are you, because it doesn’t suit you to be so. 

What was that line, _“You can’t handle the truth!”_ and nowhere is it more apparent than on this forum. So be it!

You can talk all you want but in the end it will get you nowhere because you have closed your minds. Whatever, I have better things to do than listen to people who only want to hear one side of the story. 

To all those that were in Storm, this forum offers nothing because it gives nothing. The self-righteous will go on being just that. If this is a reflection of the financial sector in general, then any would be investors tuning in are in serious trouble. I suggest that you look elsewhere because those within the investment sector are a lost cause.

Goodbye and good luck.


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## bunyip (6 November 2011)

Frank Ainslie said:


> What a load of absolute hypocrisy! People on this forum have consistently chosen to misrepresent or pervert what we, the victims of Storm and the banks, are trying to convey. Now, we have the sympathy ploy. Julia states that she has been the victim of sexual abuse and somehow I am the bad guy!
> 
> I actually said, _“If you were unfortunate enough to be raped the last thing you would want is to be continually questioned about your motives.” _This is a hypothetical for God’s sake. If Julia wants to air what happened to her in public that’s her choice. I didn’t ask her to do so!
> 
> ...




You really are a sad, bitter, twisted individual, aren’t you Frank!
And a blatant hypocrite as well.

It’s comically pathetic to see you accusing others of not being able to handle the truth.....you’d have to be just about the perfect example of someone who is unable to handle the truth.....YOU who keeps denying that you are in any way responsible for the decisions you took and the mistakes you made, and the consequences of those decisions and mistakes.
YOU....who keeps accusing others of having closed minds, when your own mind is so clearly closed to anything that doesn’t fit in with what you’ve chosen to believe.

As for your constant attacks on this forum for not being interested in what happened to Storm victims.......this is just another example of the disingenuous comments that you spew forth because you don’t bother to think clearly before your start pounding the keyboard.
At least we try to put forward balanced views by suggesting that the blame lies with a number of different parties, banks included. This is in stark contrast to the unbalanced garbage you keep spouting by trying to pin the blame mainly on the banks, while accepting no responsibility yourself for the decisions you made.

So you’re saying goodbye to us forever, are you Frank? You’re clamping your tail firmly between your legs and you’re slinking away to some other outlet where you can spout your personal agenda until someone challenges you with confronting questions that you lack the backbone to answer, just like some of the questions that you’ve side-stepped on this forum.
I just wish that the Wallaby back line players were as adept at side-stepping as you are Frank – we’d have won the Rugby world cup for sure if that was the case, instead of those pesky Kiwis winning it instead. 
I have another wish as well....namely that you really will leave this forum and never return. I doubt if there are many people who’ll  be sad to see you go.
I can sincerely wish most Stormers all the best. Regrettably Frank, I am unable to extend that same wish to the likes of you.


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## Solly (6 November 2011)

Igetit said:


> Hi Solly,
> 
> Yes the qualification of Master of Applied Finance does suggest more than just a cursory understanding of their profession. As does the moniker of: "full member of the Australian Financial Planning Association"; "certified practising accountant"; "specialist plastic surgeon."
> 
> ...




Thanks Igetit for the info.
My Stormer mate placed a lot of faith in Manny's ability to pull him out of the quagmire in Dec 08 and always spoke highly of Storm's strategy. I suppose to be simplistic, everybody wins on a rising market.


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## bunyip (7 November 2011)

Frank Ainslie said:


> Hi Harleyquin,
> 
> 
> 
> ...




Here’s another nice example of ‘Firebrand Frank’ putting his mouth into gear before activating his brain.

I’m not aware of anyone claiming that all Stormers were greedy.
We’re not tarring all of them with the same brush by asserting that they were all greedy. 
We've told Frank several times that..... _*The suggestion of greed was made specifically in relation to those Stormers who were already wealthy and were self sufficient in retirement,*_ yet they approached Storm and accepted  a strategy to significantly boost their already substantial wealth and to greatly magnify their already significant and completely adequate income.

No, we don’t have any hard and fast evidence that greed was a factor in this situation – we’re simply making an assessment based on good old common sense. If someone already has plenty of money and enough income for a comfortable self funded retirement, then what reason, other than greed, could he or she possibly have for seeking substantially more wealth and income, particular if he/she is up around retirement age.

Take Frank, for example........1.7 million dollars in unencumbered assets when he was well into his sixties. That sort of money would produce annual income of around 85 grand at 5% return, if invested in residential property in growth areas. In addition, capital appreciation of 8 – 10% annually should be achievable if careful attention is paid to selecting the right properties in the right areas, giving his overall net worth an average annual boost of approximately 130 – 170 grand.

If Franks home formed part of his 1.7 million in assets, and we assume a value of half a million dollars for the home, then he’s still left with 1.2 million to invest for income and growth, giving him a conservative 60 grand annual income plus average yearly growth of roughly 95 – 120 grand.
Not bad, certainly enough to make life very comfortable in retirement.

Hence our suggestion that any well heeled person not satisfied with an already safe and comfortable retirement was greedy to want substantially more.
Despite Frank’s vehement dismissal of this suggestion, he failed to come up with a rational explanation of what his motives were in investing with Storm, if something other than greed was involved.


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## Igetit (7 November 2011)

Solly said:


> Thanks Igetit for the info.
> My Stormer mate placed a lot of faith in Manny's ability to pull him out of the quagmire in Dec 08 and always spoke highly of Storm's strategy. I suppose to be simplistic, everybody wins on a rising market.




Hi Solly, 

No problem. Hope that is of some assistance. 

All too true - everyone does well in a rising market. 

Perhaps your friend's faith was not completely misplaced. There have been several strategies presented to me for review - at last count seven - adddressing means by which portfolios in MARGIN CALL could have been addressed. I know that Manny had one such strategy in place to implement. I don't want this to deteriorate into ... "Oh yeah, right!! Who'd trust him etc, etc" rant. However, I have seen some modeling regarding what could have been done. 

However, without a Margin Call to trigger the implementation of some strategy (any strategy) there was not a lot any Storm client was able to do. Once there portfolios were allowed to spin down the drain into the strange new world of NEGATIVE EQUITY (a term I should mention which does not get a guernsey in the GLOSSARY OF TERMS appended to the BANK'S MARGIN LOAN AGREEMENT) - they were you know where and not a paddle in sight. 

Manny, no doubt, made many, many errors in relation to the management of his clients accounts. Equally, however, there was an opportunity to bring a halt to the mismanagement with the issuing of a Margin Call. 

As I read it there is little redress available to aggrieved clients should Manny be found to have done wrong. The only redress clients have will be against the Bank - for it appears beyond question that they too dropped the ball. People certainly expected better from Manny; they also expected better from a mature financial institution that boasts (and advertises) a status of one of the top 10 Banks in the world. The two parties knew precisely what each other was up to. There was a real synergy. Lovely during the rising market you mention. A little testy during the tough times. Make no mistake though, they were in it together. Keep hunting - the information is out there.


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## bunyip (7 November 2011)

Frank Ainslie said:


> A question of greed! (Part 2)
> 
> Last, but not least, is the matter of margin loans. We have been castigated by many for taking out margin loans that only added further to our debt.
> 
> Quite frankly, most of us had never heard of margin loans until we went to Storm Financial for advice. Indeed, Helen and I didn't need to take out margin loans because we already had 1.7 million dollars unencumbered in assets.




So you had substantial wealth and therefore no need to take out margin loans...but you took them out anyway! Well in that case Frank, more fool you!

Now why, I wonder, would you do that? Let me guess...because Storm told you that was the thing to do. And that it was safe. And you took them  at face value and believed everything they said, because you were too lazy or indifferent or incompetent to do a small amount of research to check the veracity of what they told you. Or perhaps it was simply a case of being greedy or stupid. Or maybe a combination of both. In the absence of you explaining why you adopted Storm’s strategy (you’ve been invited to do so a number of times) the aforementioned conclusions are I believe quite reasonable.

Yes yes Frank, I know.....you had no reason to doubt them, they belonged to the Financial Planners Association, they were ASIC approved, etc etc etc. 
Well OK, but how about the fact that they were salesmen who got paid a commission if they talked you into buying their product – that wouldn’t give you a reason to doubt them, or at least to compare them to a number of different FP firms to see who was offering what?

I bought a new car last week, Frank. The first dealership I went to assured me they were offering me ‘top dollar’ for my trade.  The firm had been in business for more than thirty years and had branches in a number of towns and cities in my area. And they were a  member of the MTAQ (Motor Traders Association of Queensland). 
For your interest, here is an extract from the MTAQ website.........._*The Association works to a strict Code of Ethics whose theme is to act honestly and fairly in all dealings with the public and conduct business with professional courtesy and integrity.*_
Sounds pretty good eh Frank?.....a long-established and respected local firm, endorsed by a reputable motoring body whose members are obligated to conduct business according to a strict code of ethics. 
Surely I had no reason to doubt them when they told me I was being offered ‘top dollar’ for my trade?
Well yes actually, I had not one but two very good reasons to doubt them.....
1. They were salesmen.
2. Common sense.

I’m sure I don’t need to elaborate on either of these reasons.

Is all this starting to sound somewhat familiar to you Frank? A respected firm that had been in business for decades, backed by a reputable governing body with strict ethical standards. Sounds a wee bit like Storm Financial, doesn’t it?
The two reasons I doubted what they told me are the very same two reasons why you should have doubted what Storm told you. You didn’t have to disbelieve them, but neither should you have believed them until you’d done some basic research to verify what they were telling you.
And that’s exactly what I did in relation to the car firm.....I called a number of used car dealers to get some idea of the value of my car, and I checked out a couple of websites for the same purpose. 
And I visited four rival car dealerships to see what sort of deal they’d offer me. Then I went back to the first dealership and told them they’d have to raise their offer by at least fifteen hundred dollars if they wished to avoid losing my business to the opposition.
Surprise surprise – the ‘top dollar’ trade in price they’d offered me magically rose another $1500.

So what does that make me, Frank? An exceptionally smart bloke with an abnormally high IQ? Not really, it simply suggests that I think for myself and use a bit of common sense, particularly when dealing with salesmen.
Anyone can do it Frank – it’s not that hard. You could have done it with Storm. You didn’t, and it’s ended up costly you dearly. Sure, not all the blame is yours, but some of it certainly is. 

And Frank, even though you got all hot under the collar and left the forum (supposedly) in rather a huff yesterday, I know you still lurk on here and read this thread. I logged into the forum today and immediately checked out who else was logged in, and lo and behold whose name did I see but yours. 
You should keep reading this thread, Frank, even if you no longer contribute to it. I know we don’t beat the ‘blame the banks’ drum like you do, but neither do we deny that the banks may have a case to answer. All that aside, there are some smart people who contribute some very useful information on this thread. Perhaps one day you’ll stop your _‘blame the banks’_ campaign long enough to absorb the some of the information and knowledge that’s being contributed by people who are far more switched on than you are.


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## SJG1974 (7 November 2011)

Igetit said:


> Perhaps your friend's faith was not completely misplaced. There have been several strategies presented to me for review - at last count seven - adddressing means by which portfolios in MARGIN CALL could have been addressed. I know that Manny had one such strategy in place to implement. I don't want this to deteriorate into ... "Oh yeah, right!! Who'd trust him etc, etc" rant. However, I have seen some modeling regarding what could have been done.




Igetit,

Would you care to share the strategy Manny had in place?  This is no pisstake, but I really can't understand how these clients could have survived even if the margin call was made.

Lets say that clients received the margin call...90% LVR I understand thanks to the sweet deal Manny did with the banks.

So, clients get a margin call at 90% LVR, and despite the market moving fairly quickly they were able to address the situation at 90%.  What do they do to address this, given the likelihood that these clients had little or no reserves to pump into the margin loan to redress the situation?  

And remember, its not as if the market staged its recovery in late 2008....it hit its low in March 2009 and then rallied, so clients, if they had have addressed the margin call and stayed in, would have lost more before the recovery started....potentially triggering a second margin call.

So, the margin calls are made on time by the bank and addressed by Storm and the clients in late 2008.  How are they sitting now???

This is a serious question, I want to know how these clients could have recovered from this by now, bearing in mind they need to draw on their capital to pay the annual income storm promised to them, the trail commissions Storm take, and of course the interest to the margin loan provider.  How on earth could they have recovered???????

Idontgetit.....


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## SJG1974 (7 November 2011)

Following my question to Igetit, I prepared what seems like a plausible scenario within the Storm scam.  If anyone can see something I have missed, let me know (note I am no financial planner, and my knowledge of margin loans is limited, but this does seem simple enough)...

_*Scenario*_
A client steps into Storm Central with a $500,000 home (unencumbered) and $500,000 in super.

Their friendly Storm advisor has recommended they borrow 50% of the value of their home.  They combine this $250,000 debt with their super (which Storm have advised be taken out of the tax haven) and use this as equity to enter into a margin loan, with a starting LVR of 50%.

So, the lucky client has the following margin loan:

Margin loan equity $750,000 (of which $250,000 is a home mortgage)
Margin loan debt $750,000. 
Total Margin Loan Portfolio $1,500,000 (bear in mind the client has a total debt of $1,000,000).

Now, thanks to the sweet deal Manny struck with the bank, and the lack of management of the lucky client’s portfolio as its value fell off the edge of a cliff (not true, as their research commentaries show, the end of the bear market was always just around the corner....it was written in the stars or the tea leaves apparently), the LVR hits 90% and the client receives the margin call they should have received.

The scenario at that point would be:

Margin loan equity $83,333 (of which $250,000 is the home mortgage)
Margin loan debt $750,000 

So the client has a total debt of $1,000,000 (same as they started with) and equity of $83,333 (not including their house).  And I haven’t even factored in  the 7% upfront fee of $105,000 (on the original margin loan of $1,500,000), the interest which has been compounding all along (say 7% on their total debt of $70,000 p.a.), and the drawings from their portfolio to provide for the annual income Storm promised.

In a situation like this, assuming the client has no “dam” of money to fall back on, how on earth can this client get back on track?  Is it even possible?

Again, can anyone explain how the client would get themselves out of this mess???  doobsy, I am looking at you to give me an answer!


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## Igetit (7 November 2011)

SJG1974 said:


> Following my question to Igetit, I prepared what seems like a plausible scenario within the Storm scam.  If anyone can see something I have missed, let me know (note I am no financial planner, and my knowledge of margin loans is limited, but this does seem simple enough)...
> 
> _*Scenario*_
> A client steps into Storm Central with a $500,000 home (unencumbered) and $500,000 in super.
> ...




Hi SJG 1974,

The pictures painted regarding how one gets a particular individual back into the market and maintains them there during the recovery that followed in April-May 2009, of course vary circumstance to circumstance. 

Doobsy does a good job of running through why this could not happen (clearly he knows his stuff); however, in any modeling - including Doobsy's and your own - certain assumptions need to be made. However, if you take this situation to a planner with the question:

"How do we save this?" There is a path forward. There is - more often than not - a solution to every problem. Almost always. (Except my wife's cooking of course). It involves selling down portions of the remaining portfolio along the way, in addition to making investments at certain trigger points. The LVR will be progressively lowered over a period of time during the market recovery - allowing further reparticipation of funds. And, it is a matter of history that the market did (and continues to - although perhaps a little haltingly at the moment for some) recover. 

The alternatives proposed are the subject of stress testing by actuaries at the present. They are real and they appear to work. Nothing far fetched, no options trading, CFD's etc. I am not in any position to present them in a public forum. However, they will ultimately see the light of day - 2012. I would try and resist the urge to simply dismiss these alternatives as bunkum. They are not. Experienced people have advanced them - from reputable firms. 

Having said that, the scenarios outlined all have Storm clients LOSING MONEY. But the damage is not irreversible and importantly, they remain in the market with an intact, though diminished, portfolio. With the prospect of continued growth over the years ahead. 

At the end of the day, however, how a particular individual may have reparticipated in the market may end up being irrelevant. And much of the discussion regarding this issue may be of purely academic interest. The bigger issue for the BANK, as I understand, will be how the Court characterizes their relationship with STORM. Were they simply a provider of finance to enable Storm to implement its grand vision? Or was there a little more "hands on" involvement in Storms modeling. A little of the old - I scratch your back; you scratch mine.

We will soon see. I don't know the answer; but I do know if the guys who've been working on this issue are proved correct - the BANK will have an astronomic debt to repay. The Margin Call fuss, will be a blip on their financial radar compared to the implications of being found to have participated in an UMIS. Interesting days ahead.


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## SJG1974 (7 November 2011)

Thanks Igetit. Still seems far fetched to me, so I will be interested to see the solutions if they see the light of day.

Seems to me that the hypothetical scenario would need every decision made by the client to be the right one (or trigger points to get in and out- remember Manny had trigger points and they didn't work so well). Easy to go back with the benefit if hindsight and pick trigger points compared to doing it in real time. I can time a market that's already happened, not so easy doing so in real time.

Then there is the interest on the debt that needs servicing, the income clients need to draw on to live, the assumption the market will continue to recover etc.

And of course the market is still 35% below it's pre gfc high, so clients are still miles behind.  With so little equity against so much debt that is always incurring interest, I can't see how clients could be saved.

Again I hope the figures see the light of day one day


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## Julia (7 November 2011)

Igetit said:


> Manny, no doubt, made many, many errors in relation to the management of his clients accounts. Equally, however, there was an opportunity to bring a halt to the mismanagement with the issuing of a Margin Call.
> 
> As I read it there is little redress available to aggrieved clients should Manny be found to have done wrong.



Can you explain how you know this so absolutely?  Do you not think a salesman of Manny's consummate skill would have first of all secured his own future and have substantial funds squirreled away?
Everyone seems oh so willing to write off the possibility that the Storm principals should be held to account for their self serving incompetence.


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## Solly (8 November 2011)

Just a reminder, when matters are next in Court.

Proceedings are being held in public so anyone interested may attend.

25 November 2011
Civil penalty proceedings against the Cassimatises 
ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument


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## Igetit (8 November 2011)

Julia said:


> Can you explain how you know this so absolutely?  Do you not think a salesman of Manny's consummate skill would have first of all secured his own future and have substantial funds squirreled away?
> Everyone seems oh so willing to write off the possibility that the Storm principals should be held to account for their self serving incompetence.




Hi Julia, 

By all means, in the event they have been found by a Court to have done wrong, they should certainly be held to account. This will involve Court directed punishment, however, the prospect of 3000 victims being adequately compensated by funds "squirreled away" by the Cassimatis family - well....Never say never, but I don't think there is much joy to be had on that front. Time will tell of course. My view is both the involved protagonists will ultimately be held to account by the Courts i.e Storm *and* the BANK. And that decision will form the basis for equitable compensation for the victims of their liaison.


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## DocK (8 November 2011)

Julia said:


> Can you explain how you know this so absolutely?  Do you not think a salesman of Manny's consummate skill would have first of all secured his own future and have substantial funds squirreled away?
> *Everyone seems oh so willing to write off the possibility that the Storm principals should be held to account for their self serving incompetence*.




Can _you_ explain how you know _this_ so absolutely?  It would appear to be another generalisation, lacking any verifiable source to prove the accuracy that _everyone_ seems oh so willing to write off the possibility that the Storm principals should be held to account ......

Julia, you're fond of asking posters to verify/explain/back-up their posts with statistics, studies, news articles or other references - I am rather surprised to see you make a statement that so clearly lacks any basis in fact.

I assure all on this thread that there are indeed many who are far from willing to see Manny & Julie Cassimatis escape prosecution, and would be very pleased to see them suffer the full extent of the law for the acts of negligence and fraud they have committed.  Those who are more intimately involved in this saga will know that statements have been submitted to ASIC and others by some to enable this possibility.  Journalists have been made aware of ex-clients' grievances and have reported same.  If any funds have been "squirreled away" I'm sure ASIC, the ATO, their many secured and unsecured creditors (CBA first and foremost) and the advisors who sold their businesses to them who have not yet received payment will be doing their utmost to find and relieve them of those funds.  I'm quite sure there'd be more than a few northern Qlders willing to check their pockets if they got the chance....


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## Solly (8 November 2011)

Igetit said:


> Hi Julia,
> 
> By all means, in the event they have been found by a Court to have done wrong, they should certainly be held to account. This will involve Court directed punishment, however, the prospect of 3000 victims being adequately compensated by funds "squirreled away" by the Cassimatis family - well....Never say never, but I don't think there is much joy to be had on that front. Time will tell of course. My view is both the involved protagonists will ultimately be held to account by the Courts i.e Storm *and* the BANK. And that decision will form the basis for equitable compensation for the victims of their liaison.





Igetit 

As you believe that Storm and the BANK will eventually be found accountable, what is your view on the timeline for this resolution and the eventual court-ordered payment being distributed.

I'm sure those affected would like some good news in this area. 

S


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## Julia (8 November 2011)

DocK said:


> Julia, you're fond of asking posters to verify/explain/back-up their posts with statistics, studies, news articles or other references - I am rather surprised to see you make a statement that so clearly lacks any basis in fact.



Fair enough. I should not have said "Everyone".  You may be one of the few who  perhaps consider that Storm's 'strategy' was at the base of the problem.

My view was formed by the continuous focus on this thread on THE BANKS being responsible for clients' losses, with Storm apparently receiving a very secondary share of the blame.


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## Igetit (8 November 2011)

Solly said:


> Igetit
> 
> As you believe that Storm and the BANK will eventually be found accountable, what is your view on the timeline for this resolution and the eventual court-ordered payment being distributed.
> 
> ...




Hi Solly, 

I probably know little more than anyone else about the time line for this to resolve. As you know, the BANKS have been ordered by the Court to mediate the matter before the end of February 2012. The Court has ordered both the BANKS and ASIC  hand over several thousand documents to the legal firm LEVITT-ROBINSON (who act for a number of Storm victims - I am reliably informed 300-400 - in a Class Action on the grounds that the Bank was party to the running of an UMIS) to review in preparation for the mediation.

Documents available to date support the view that an UMIS was in existence. Indeed, the Bank may have already drawn the same conclusion. So the question then is....

Do they risk running such a case and losing. Bearing in mind the material that will be set out before the Court during the three month period set aside for the hearing (SEPT. - NOV.) - is going to be more damaging to one of the parties than the other. If you see what I am saying. And so the pressure now begins to build. One party having lost all, has little left to lose. The other party - well......

So - when will some meaningful compensation be forthcoming. Perhaps sooner than we all anticipate. Worst case scenario. The case is lost and there is no compensation for the victims of the BANK-STORM "relationship". Not that daunting a prospect for people who now have nothing left anyway. Worst case scenario for the BANK. Well.....Not as inconsequential. They are pondering this I suspect. The damage to their reputation will be profound and successful litigation against them will, as I understand, open the door to ongoing litigation; potentially against specific individuals within the organization. This thought fills people who have been set upon and beaten up, with much hope. Hope is a wonderful thing. What's that old saying about every dog?

I know a large number of Storm victims; they have grown accustomed to waiting for an outcome. They are resilient and - although some will succumb along the way - their spirit will remain with those who continue to carry the fight. I often invoke the spirit of Thermopylae when I speak with them. I am left wondering why the Bank seems so unwilling to acknowledge its involvement in this. How hollow does Mr Norris's mea culpa now appear to all involved. It was a nice piece of PR work at the time but appears to lack substance don't you think?


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## SJG1974 (8 November 2011)

This may or may not be of interest....but the attached was a submission by Paul Resnik and Peter Worchester to the PJC which invludes some research they conducted into returns from margin loans etc over a lengthy period of time. They work at Finametrica, which provides a widely used risk tolerance tool for many financial advisers.

http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub293.pdf

Their research shows the risk involved in margin lending on its own...without the double gearing that Storm investors were subjected to. Also provides a case study using a "black swan" event and it effect on a double gearing strategy.

It highlights how simplistic Storm advisers' approach to this whole thing was, and the lack of real research and stress testing that was undertaken before promoting this high risk strategy to these poor people who were unlucky enough to have graced their marble floored foyer.

I really hope Manny, Julie and their cohorts pay for this, because promoting this strategy to anyone without revealing the true risks, let alone retirees is criminal.


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## Igetit (8 November 2011)

SJG1974 said:


> This may or may not be of interest....but the attached was a submission by Paul Resnik and Peter Worchester to the PJC which invludes some research they conducted into returns from margin loans etc over a lengthy period of time. They work at Finametrica, which provides a widely used risk tolerance tool for many financial advisers.
> 
> http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub293.pdf
> 
> ...




SJG 1974

Agreed. 

Now, just say I could show you documentation that proved that the BANK had complete knowledge of the STORM model. That they reviewed the investment protocol over a period of weeks, looking at actual financial histories of client portfolios etc, etc. And after this period of - what some might interpret as a loose form of due diligence - they offered special arrangements to STORM to enhance their ability to continue to advance the scheme to their clients. Having - you see - decided, after their review, that there was a financial gain for themselves - the BANK and their shareholders - to be involved with the scheme. Namely, loan generation, interest and fees (their stock 'n trade as it were) - via an investment model that they provided their tick of approval to.

How do we then look at the BANK? How do we characterize that relationship between them and STORM? Were they just money lenders - or, had a relationship for mutual benefit, been formed? It has been argued by a former Federal Court judge that the nature of this relationship needed to be declared to the clients of the "scheme" and, indeed, the scheme was required by law to be registered.

And herein lies the problem for the BANK. Not saying Storm is blameless. Not at all. But Storm last time I checked - doesn't exist. Storm needed someone to provide the funding for their clients "financial journey of discovery". The BANK put its hand up and the rest is history.


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## Solly (8 November 2011)

Igetit said:


> Hi Solly,
> 
> I probably know little more than anyone else about the time line for this to resolve. As you know, the BANKS have been ordered by the Court to mediate the matter before the end of February 2012. The Court has ordered both the BANKS and ASIC  hand over several thousand documents to the legal firm LEVITT-ROBINSON (who act for a number of Storm victims - I am reliably informed 300-400 - in a Class Action on the grounds that the Bank was party to the running of an UMIS) to review in preparation for the mediation.
> 
> ...




Hi Igetit 

Thanks for such a detailed response. If I were the BANK I would be seriously reviewing my options. I see that this case has the potential to inflict some real corporate damage in the public arena. I remember the real uneasiness exhibited by some of the BANK representatives while being questioned at the Worrells Inquiry. I suggest that it would be prudent to do whatever is possible to avoid a repeat of that experience.

I agree with your assessment of the resilience of victims of this event. I know they have been through some very dark days, I'm starting to see a light on the horizon for them, one that I am confident will soon shine much brighter.

S


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## SJG1974 (8 November 2011)

Igetit said:


> SJG 1974
> 
> Agreed.
> 
> ...




No doubt Igetit, if it were proven that the banks' relationship with Storm went further than simply providing the finance to the clients, and that they supported and even encouraged a strategy which is so obviously flawed, then they should pay.


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## Mash (8 November 2011)

SJG1974
"No doubt Igetit, if it were proven that the banks' relationship with Storm went further than simply providing the finance to the clients, and that they supported and even encouraged a strategy which is so obviously flawed, then they should pay. "



that is what has been said all along..... now *you* get it !!!!!!!!


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## SJG1974 (8 November 2011)

Mash said:


> SJG1974
> "No doubt Igetit, if it were proven that the banks' relationship with Storm went further than simply providing the finance to the clients, and that they supported and even encouraged a strategy which is so obviously flawed, then they should pay. "
> 
> 
> ...




No need for that Mash.  

You seem to overlook the IF in my response. It is yet to be proven just how involved the banks were in all this.  Lets wait until the facts come out shall we before getting on our high horse. The courts will help decide this for us.

I never said the banks were blameless in all of this.  Not once.  However, I find it quite astounding that some place the blame solely with the banks.  That, I don't get (actually I think I do...$$$$$$$).

And the culpability of the banks or otherwise does not change two simple truths that many seem to ignore...

1. Storm were the sellers of the advice.  As "experienced" advisers they sold the dream and with it the entirely inappropriate strategy that has seen clients decimated. They charged a high fee to manage clients portfolios and did nothing of the sort.  They sold a high risk strategy as "conservative". etc. etc. As far as I know, no representative from the bank ever ran a seminar, wrote an SoA, got the client to sign each page of the SoA, charged 7% up front, and said they would use their you beaut software to monitor clients portfolios. The bank didn't pay Manny and Julie a $24m dividend out of a company profit of $26m in 2008 as the market was declining. Do I need to go on????

2. Clients were either greedy, gullible, naive or a bit of each to have fallen for the slick sales pitch and the promise of riches and should take at least part responsibility for entering into a scheme they obviously did not understand. Still have not had one Stormer provide a proper answer as to what it was they expected for their 7% upfront.  Can you enlighten us???

But of course, its easier to place blame 100% at the feet of others rather than clients admit any responsibility for the bad decisions they made.


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## Mash (8 November 2011)

Fees : we compared 3 financial planners, one being a major bank, an independant fee for service planner and storm. The initial plan which was the cash sum from the sale of our business was very similar from all 3 - use cash to invest in shares and gear up. The 7% fee we considered as being comparable to a one off franchise fee. We were looking long long term, after 5 years we would have been ahead (fee wise) when compared to the ongoing fees from the other 2.  
As they say Hindsight is 20 20 vision .... in hindsight how we wished we had gone with either of the other planners... it took Storm and the BANK just 3 years to wipe us out ....


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## Solly (8 November 2011)

Mash said:


> Fees : we compared 3 financial planners, one being a major bank, an independant fee for service planner and storm. The initial plan which was the cash sum from the sale of our business was very similar from all 3 - use cash to invest in shares and gear up. The 7% fee we considered as being comparable to a one off franchise fee. We were looking long long term, after 5 years we would have been ahead (fee wise) when compared to the ongoing fees from the other 2.
> As they say Hindsight is 20 20 vision .... in hindsight how we wished we had gone with either of the other planners... it took Storm and the BANK just 3 years to wipe us out ....




Mash

From a risk perspective, what level of risk did you believe that the Storm strategy was that was presented to you ?


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## doobsy (8 November 2011)

Is it just me or is anyone else not surprised about the banks. 

Going back to "a pound of flesh" in Shakespeare, money lenders are not your friend. 

Why is it in the past 20 years has society decided that banks are friendly helpful places? Because they were a bit easier to deal with and required you to jump through less hoops than before?

Banks are in the business of lending and making profits. In some cases there are no alternatives to using them. In other cases there is an alternative. Don't borrow. Save and then buy.

I understand that this is simplistic but google "bank rip off" and look at the 114000 results that come up for Australia alone.

Borrowing in any way, shape or form comes with risks attached because the person lending the money always makes sure they are in charge. Whether it be with a slick contract or a 300lb dude with a baseball bat. ASIC and Choice and whoever else don't need to jump up and down more, people need to change their attitude and be more careful.


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## Igetit (8 November 2011)

SJG1974 said:


> No need for that Mash.
> 
> You seem to overlook the IF in my response. It is yet to be proven just how involved the banks were in all this.  Lets wait until the facts come out shall we before getting on our high horse. The courts will help decide this for us.
> 
> ...




Hi SJG 1974, 

Your comments are not without merit. I dare say some folks involved with Storm were motivated by greed. Some also were likely ill-informed and naive. But these issues you raise have no bearing on the question now before the Courts. Equally, whether or not clients understood what their 7% fees were actually for, again is not relevant. 

The battleground that this issue is now being fought on, has nothing (and I do mean nothing at all) to do with the Storm victims. It is all about characterizing the relationship that existed between the BANK and STORM. If it is established that an UMIS was in place when the clients lost everything, then there is a remedy at law for the client. They will get no more, and indeed, no less than that remedy provides for. The comment about "going after the BANK because of $$$$$$$$" is frivolous insofar as the plaintiff is going after the BANK because it is the BANK that stands accused in the proceedings. If Storm Financial was still a registered entity it too would be joined to the proceedings. But it is not. There is in fact only one party involved in the purported UMIS still standing. There is no one else to join to the action. 

Getit? It's easy really. Importantly, the issues of *"greed and responsibility"* in the context of this matter, now only come into play when the reasoning and motives behind the establishment of the relationship between the BANK and Storm are considered. 

You can rage against the machine all you like. But the dogs have well and truly barked and the caravans have moved on. As you say nothing has been proven - yet. But I can tell you - there is proof aplenty. The BANK continues to do a good job deferring the inevitable.


----------



## DocK (8 November 2011)

Igetit said:


> SJG 1974
> 
> Agreed.
> 
> ...




That's pretty much how I feel, I just haven't been able to put it into words that well.  My main grievance with the bank is the undisclosed nature of their relationship with storm.  The fact that they allocated storm's business with their own branch number and had at least one bank lender working from storm's office speaks volumes imo.  Also the methods used to offer up mutual clients with available untapped equity via highly questionable in office revaluations of property for further "steps".



SJG1974 said:


> No need for that Mash.
> 
> You seem to overlook the IF in my response. It is yet to be proven just how involved the banks were in all this.  Lets wait until the facts come out shall we before getting on our high horse. The courts will help decide this for us.
> 
> ...




I'm actually inclined to agree with you.  I do find however, that if some ex-stormers are reluctant to admit any responsibility for their decisions, so too are some who were not involved too ready to disbelieve the banks are at any fault either.  I think there's more than enough blame to go around, if blame must be laid, and it's probably about fair to divide it equally between the three parties involves - ie storm, bank and client.  Just speaking for myself here



Mash said:


> Fees : we compared 3 financial planners, one being a major bank, an independant fee for service planner and storm. The initial plan which was the cash sum from the sale of our business was very similar from all 3 - use cash to invest in shares and gear up. The 7% fee we considered as being comparable to a one off franchise fee. We were looking long long term, after 5 years we would have been ahead (fee wise) when compared to the ongoing fees from the other 2.
> As they say Hindsight is 20 20 vision .... in hindsight how we wished we had gone with either of the other planners... it took Storm and the BANK just 3 years to wipe us out ....




My experience is probably similar.  We had sought financial advice several times before, each time at a cost, only to be pointed towards the limited range of products or investments that the planner concerned earnt commissions from.  This applied both to bank and non-bank FPs.  It did not seem possible to obtain an unbiased plan, and we were unaware of any FPs who were not affiliated with a select group of sponsors or the like.  Storm's strategy of investing in the ASX 200 as a whole seemed to make a lot more sense than simply picking a managed fund.  As to the fees, yes we baulked at 7% upfront, but there were then no ongoing management fees as such, and every prior FP we had seen wanted 4% annually for doing very little ongoing work.  We did our sums and worked out that in the long term it was actually cheaper to pay a big chunk up front than 4% year upon year.  Naturally this only works if the investment is the long-term nature it was intended to be, and hindsight shows we made the wrong decision entirely.  Of course if I had known then that I could invest in the ASX200 directly via STW and the like without paying anyone for the privilege I'd be much better off today than I am.  But you don't know what you don't know etc.  And some of us were far too busy living/working/bringing up families etc to know we couldn't trust anyone and needed to educate ourselves about everything.  Bit of bitterness creeping in there, sorry.


----------



## bunyip (8 November 2011)

Mash said:


> SJG1974
> "No doubt Igetit, if it were proven that the banks' relationship with Storm went further than simply providing the finance to the clients, and that they supported and even encouraged a strategy which is so obviously flawed, then they should pay. "
> 
> 
> ...




And what many of us on this thread have said over and over again is that the banks should be brought to account if they can be proven in a court of law to have done anything illegal.
What we’ve also said is that no one party is to blame entirely for the whole mess - not the banks, not Storm, and not the Storm clients themselves. All of them bear some responsibility. Perhaps there are some others who also bear some of the responsibility – e.g. ASIC and the FPA for endorsing a dodgy outfit like Storm Financial.

The people who irk me are those who keep lumping all the blame on to others while refusing to take any responsibility at all for their own actions......three who spring to mind are Frank Ainslie, Harleyquin, and Cassamatis.
Perhaps it can be argued that the banks are another party that’s not taking any responsibility for their actions. I believe this argument would not be entirely correct however, given that some of the banks have made financial settlements to some Storm clients.
Maybe they’ll be made to take even more responsibility – we’ll know sooner or later. I continue to watch with interest.


----------



## Garpal Gumnut (8 November 2011)

DocK said:


> I'm actually inclined to agree with you.  I do find however, that if some ex-stormers are reluctant to admit any responsibility for their decisions, so too are some who were not involved too ready to disbelieve the banks are at any fault either.  I think there's more than enough blame to go around, if blame must be laid, and it's probably about fair to divide it equally between the three parties involves - ie storm, bank and client.  Just speaking for myself here




This is the most sense I've seen on this thread since I last posted.

gg


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## Solly (8 November 2011)

Garpal Gumnut said:


> This is the most sense I've seen on this thread since I last posted.
> 
> gg




GG

Are you going to be at Melton on the 19th ?

S


----------



## bunyip (8 November 2011)

DocK said:


> I do find however, that if some ex-stormers are reluctant to admit any responsibility for their decisions, so too are some who were not involved too ready to disbelieve the banks are at any fault either.  I think there's more than enough blame to go around, if blame must be laid, and it's probably about fair to divide it equally between the three parties involves - ie storm, bank and client.  Just speaking for myself here
> 
> 
> 
> Of course if I had known then that I could invest in the ASX200 directly via STW and the like without paying anyone for the privilege I'd be much better off today than I am.




DokK

What I’ve always admired in your posts is your complete honesty in taking responsibility for your actions. Also you stoic attitude in getting on with your life instead of crying over spilt milk. 
Smiley is another one who has shown similar qualities.
There are a few Stormers on here who could learn some worthwhile lessons from you two.

A question for you – when you were seeking financial advice, did you consider consulting a stockbroker to ask what options were available to you for investing directly in the market?


----------



## Garpal Gumnut (8 November 2011)

Solly said:


> GG
> 
> Are you going to be at Melton on the 19th ?
> 
> S




I am unsure, I initially thought of a low ball bid, but after some recent pleasurable nights with a doctor's wife, feel I may be outbid.

gg


----------



## Solly (8 November 2011)

Garpal Gumnut said:


> I am unsure, I initially thought of a low ball bid, but after some recent pleasurable nights with a doctor's wife, feel I may be outbid.
> 
> gg




GG

I'm hesitant to ask more but sounds intriguing. I bet Byrnsie will be jumping with joy when the commission cheque clears.

I've got a strong indication that there's some real action pending, I look forward to the New Year for some more surprises.

S


----------



## SJG1974 (8 November 2011)

DocK said:


> I'm actually inclined to agree with you.  I do find however, that if some ex-stormers are reluctant to admit any responsibility for their decisions, so too are some who were not involved too ready to disbelieve the banks are at any fault either.  *I think there's more than enough blame to go around, if blame must be laid, and it's probably about fair to divide it equally between the three parties involves - ie storm, bank and client.*  Just speaking for myself here




Thats how I see it DocK.

Appreciate your honesty.  

I don't think anyone is absolving the banks of any blame.  the unfortunate situation is that their true involvement is thus far only really known by a few, and probably won't come out until they have their day in court. Again, I hope they feel the full force of the law if/when their they are proven to have done wrong here.

By virtue of the PJC submissions and the countless articles on the whole disaster, we know much more about Storm, their strategy and the clients they conned.


----------



## SJG1974 (8 November 2011)

bunyip said:


> And what many of us on this thread have said over and over again is that the banks should be brought to account if they can be proven in a court of law to have done anything illegal.
> What we’ve also said is that no one party is to blame entirely for the whole mess - not the banks, not Storm, and not the Storm clients themselves. All of them bear some responsibility. Perhaps there are some others who also bear some of the responsibility – e.g. ASIC and the FPA for endorsing a dodgy outfit like Storm Financial.
> 
> The people who irk me are those who keep lumping all the blame on to others while refusing to take any responsibility at all for their own actions......three who spring to mind are Frank Ainslie, Harleyquin, and Cassamatis.
> ...




Agreed


----------



## DocK (8 November 2011)

bunyip said:


> DokK
> 
> A question for you – when you were seeking financial advice, did you consider consulting a stockbroker to ask what options were available to you for investing directly in the market?




No, we didn't, because - now I hope you don't have weak bladder control - we thought direct investment in the sharemarket might be too risky!  Bloody hilarious isn't it!  I did not know that stockbrokers also advised on strategies or investments, but thought they simply acted upon their client's instructions.  As I knew I lacked the experience and knowledge to pick individual shares at that time, I did not consider a stockbroker to be an option for us.  Back then we thought our best road to financial independence was to access some of the equity we had built up in our home and utilize the tax advantages available through negative gearing into a managed fund or similar.   We were in our mid-forties then, had almost totally paid off our home and had been self-employed for about 7 years at that time.  We had sunk most of our savings into our business, and had rolled our supers into a smsf and used it to purchase the factory that we run our business out of.  The best, maybe the only, good decision we made was to refuse storm's suggestion of selling the factory in order to have more funds to put into the sharemarket.  I still don't think we necessarily lacked all common sense, we knew many people following much the same system as us with other FP firms, we simply didn't know what we didn't know.  I do think some on this forum lose sight of the fact that this is a stock market forum and its members are not necessarily representative of the population at large.  What appears obvious to some re gearing, bubbles, impending crashes etc is not so obvious to the vast majority of the financially ignorant.  I agree that it does not necessarily take a lot of time to learn the basics, having now done that myself to an extent, but it is a daunting prospect to many.  And yes, we were gullible enough to believe that professionals could be counted on to do what they promised, and that endorsement by FPA and their bankers actually meant something.  I used not to be the bitter, twisted and cynical soul that I now am



Although we have been financially devastated by our involvement with storm, at least we are quite a bit younger than most of their clients and have quite a few years of work ahead of us to hopefully make back some of our retirement nest egg.  Our business remains profitable, although carbon tax certainly won't help us, and we remain optomistic that the economy will one day start steaming ahead and much moolah will be made.   Although I've spent plenty of time kicking myself for being sucked in by Cassimatis, I'm also thankful that at least we saw the writing on the wall in time to pull our investments ourselves before they got anywhere near margin call.  Our level of gearing was probably a fair bit lower that the average to start with, before the market fell off the cliff.  Hopefully the market will one day trend upwards (consistently) once more and I can put our decimated remaining capital to work.


----------



## Garpal Gumnut (8 November 2011)

Solly said:


> GG
> 
> I'm hesitant to ask more but sounds intriguing. I bet Byrnsie will be jumping with joy when the commission cheque clears.
> 
> ...




Intriguing does not adequately describe it, mate.

Byrnsie has been very quiet about it and may know more than you or I. 

http://www.realestate.com.au/property-house-qld-townsville-106401181




gg


----------



## Solly (8 November 2011)

Garpal Gumnut said:


> Intriguing does not adequately describe it, mate.
> 
> Byrnsie has been very quiet about it and may know more than you or I.
> 
> ...




GG 

I bet he does, if my memory serves me correctly, I think the last time I caught up with Byrnsie was many, many years in Brisneyland, he was quite athletic and drove a Karmann Ghia (VW).... I wonder if he still has it ? You'd really have to make sure you correctly engage first gear to negotiate Melton successfully.

S


----------



## Mindstorm (9 November 2011)

Julia said:


> This tasteless comment does not deserve a reply, but I am utterly incensed that you would make such a personal remark to me.
> 
> For your information, I have indeed been raped.  Repeatedly.  As a child by my grandfather.  From the age of six until I was ten.    I had no redress whatsoever.
> 
> ...




Julia,

I've read your post over and over, and I have to admit to you that I'm astonished that you've been so upset by Frank's posting that you felt that you had to reveal this very personal, horrifying, childhood experience on ASF.

I don't post on ASF often, but read spasmodically.

I felt forced to respond to Frank's recent postings because I know (for a fact) that he has the attention of very few Sicagers, and none of their permission to speak on their behalf.  

Apart from this open message to you via the forum, I've responded via the PM option to other members.  I do not want to encourage negative postings from Frank.

I feel very guilty in that I may have 'encouraged' Frank to 'push the envelope' and hence his post where he relates what has happened to Storm clients as akin to rape.

From the outset, I myself, and I believe the majority of Storm clients have felt that we were betrayed by Storm, our own advisors, and the banks that Storm told us that we should ally ourselves to.

I'm going to commit myself to the same 'faux pau' that Frank always does, 

but Julia... and all other ASF readers/posters, please excuse me....

I do believe that 'I' can actually speak on behalf of many former Storm clients, (with or without) their agreement/consent, because I think that I may be able to truly represent the views of the members of SICAG, who I've met in the past three years, and also the members of the SICAG forum, when I say to you that there are none amongst the Sicagers who would relate our financial circumstances now to any form of abuse, let alone abuse of a child.

On behalf of all of the storm clients I've met so far, and those I'll meet in the future, (and I'm sure that I DO/WILL HAVE their permission to speak for them), thank you Julia for taking the stance where you would evaluate what we're saying/trying to share on ASF.

And, Julia, and all other ASF members who are following this thread.... please keep Frank in your prayers.

There are none so blind as those who cannot/do not want to see........

MS


----------



## Solly (9 November 2011)

> *"CBA faces funding pressure*
> 
> Shareholders praised Mr Norris for his efforts to restructure the company and improve customer service, although there was scant reference to the Storm Financial disaster, which saw the bank admit to flawed lending practices two years ago."




More by Anthony Marx and Brittany Vonow @ www.couriermail.com.au


----------



## Solly (9 November 2011)

> *"Ex-Storm clients leak bank documents*
> 
> Clients form commission against CBA
> Former Storm Financial clients have taken matters into their own hands in an attempt to expose banking groups."




More by Kate Kachor @ www.investordaily.com.au


----------



## Solly (9 November 2011)

Solly said:


> More by Kate Kachor @ www.investordaily.com.au




Just to add clarity, the "The Plain Truth" website referred to in the Investor Daily article is located at this URL: http://www.commonwealthbankdeception.com


----------



## DocK (9 November 2011)

Solly said:


> Just to add clarity, the "The Plain Truth" website referred to in the Investor Daily article is located at this URL: http://www.commonwealthbankdeception.com




Is this site one of Frank's?


----------



## noirua (9 November 2011)

Sorry to break into your gigantic struggle for justice and fair play.

Another struggle, you will understand, is the vote again this year for 'best stock forum' at 'The Bull'.  You can vote at http://www.thebull.com.au/the_stockies/forums.html

Now two immense struggles at ASF - thanks for your time.


----------



## Solly (9 November 2011)

DocK said:


> Is this site one of Frank's?




DocK, I don't believe Frank has ever stated that he was involved with this site.  

(I don't know who is behind this site, for me it's better that way  )

S


----------



## Solly (9 November 2011)

noirua said:


> Sorry to break into your gigantic struggle for justice and fair play.
> 
> Another struggle, you will understand, is the vote again this year for 'best stock forum' at 'The Bull'.  You can vote at http://www.thebull.com.au/the_stockies/forums.html
> 
> Now two immense struggles at ASF - thanks for your time.





Thanks noirua, I've complied & voted !


----------



## bunyip (9 November 2011)

Mindstorm said:


> I felt forced to respond to Frank's recent postings because I know (for a fact) that he has the attention of very few Sicagers, and none of their permission to speak on their behalf.
> 
> Apart from this open message to you via the forum, I've responded via the PM option to other members.  I do not want to encourage negative postings from Frank.
> 
> ...




Mindstorm

You shouldn’t feel guilty about responding to Frank as you did. Frank has had it coming for a long time – he comes on to this forum with the objective of shoving his personal agenda down everyone’s throat, and in spite of receiving a gentle rebuke from me for assuming to speak for others, he continued to assume that he speaks for everyone with his one sided and narrow minded views. 
Then when he gets a more stern rebuke from you and DocK, he becomes aggressive, throws a tantrum, and behaves like a spoilt three year old brat. 

You were not at fault, Frank was.
Prayers are not going to do him any good – the only thing that will do Frank any good is if he opens his mind, starts taking responsibility for his own actions and behaviors, and learns to conduct himself like a grown man instead of like a churlish teenager.


----------



## Frank Ainslie (9 November 2011)

*“A right of reply” (Part 1)*

Bunnyip has taken a number of cheap shots at me since I left which, I believe, demand a reply.

He concedes now (that’s nice of him) that many in Storm were victims but I and a number of others were just plain greedy. He has no evidence for stating this but that doesn’t matter to ‘Bunnyip’  because that’s his view and it must be right? 

*Worrells Report – Pages 40 to 41*

During the Worrells enquiry Peter Huntley, a director of Storm with relevant investment industry experience was asked a series of questions in Court, during which our particular case was mentioned. 

_“Liquidator's Barrister: Well, can I - well, let me give you a picture and tell me whether you think that this commoditised product would have been suitable for the hypothetical client in the picture? 

It's a man and his wife. The man is 65 years old; the wife is 61 years old. They have between them a little bit of super, about $150,000. They have a house which they live in and want to continue to live in, which is worth about $400,000. But they also have another asset, which is a little shopping centre, and it's worth about $1 million. And they live modestly; they live on about $45,000 a year between them, and he plans - she doesn't work. He plans to retire and retire basically straight away, having reached 65. And what he has in mind to do or what they have in mind to do is to sell the shopping centre, get the $1 million subject to any CGT liability they may have. Would that be a couple that you would think this sort of commoditised advice would be suitable to?--- 

P Hutley: Look, I don't really feel in a position to - to give you a - a yes or no answer to that, because it depends also - if you go back to section 945 it depends on the investor's objectives, and you haven't told me what the objectives of the couple were. 

Liquidator's Barrister: Well, let's have a look at that. The objectives are to have in retirement about the same sort of income they've been living on, about $45,000 a year; buy a new car worth $30,000, and have a trip overseas which they estimate will cost about $15,000, and they're their objectives. And so having told you that, can you now answer the question? 

P Hutley: Look, I don't really feel in a position to - to give you a - a yes or no answer to that, because it depends also - if you go back to section 945 it depends on the investor's objectives, and you haven't told me what the objectives of the couple were. 

Liquidator's Barrister: Well, let's have a look at that. The objectives are to have in retirement about the same sort of income they've been living on, about $45,000 a year; buy a new car worth $30,000, and have a trip overseas which they estimate will cost about $15,000, and they're their objectives. And so having told you that, can you now answer the question? 

P Hutley: I think I'd like to claim privilege at this point, but there was nothing in the documentation that I saw about the way Storm approached its clients, and there was nothing in the information that I received about Storm's clients that suggested that a couple of that sort would be inappropriate to take on as investors. And in fact, at one point in Townsville I met some Storm investors. I believe there was a local pharmacist who told me that their investment with Storm had actually brought them assets that they didn't believe that they would have been able to achieve on their own. I - I don't think it's possible to say a client with a certain amount of income, or a client with a certain age is suitable or unsuitable to the Storm model. It all depended on the individual circumstance at the time, the discussion that was had between the advisor and the client. I can't sit here in this room and say, "Yes, it's wrong. No, it's not wrong"._

Moving on:

*“Storm adviser didn't care, argues barrister!” * Daniel Hurst October 14, 2009 

_LAWYERS for the Storm Financial liquidators have accused one of the company's former advisers of not caring if the investment advice he provided to a retiring couple was based on inaccurate information.
The Brisbane adviser, Stuart Drummond, became involved in a heated exchange with the Worrells barrister Craig Wilkins when the Federal Court continued a public hearing in Brisbane yesterday….
He defended the advice he gave in May 2007 to a Brisbane couple, aged 65 and 61, (us again!) who were looking to sell a $1 million shopping centre and laundromat they owned to set themselves up for retirement.
They were told to borrow against their home and take out margin loans to invest in indexed funds. But they were hit by heavy losses and left contemplating the potential sale of their house.
Mr Wilkins challenged the suggestion the couple should borrow against their home, risking it for potential gains on the stock market.
''If you went to the casino, would you put everything you own on the table?'' he asked.
Mr Drummond said: ''Depends how much I had.''
The adviser said most people's investments were ''hugely overweight'' with property, and if potential clients did not like the advice they received they could walk away.
''It's called financial advice. We're there to tell people what we think they should do with their money,'' he said.
Mr Wilkins queried the written statement of advice Mr Drummond provided to the retiring couple, which contained graphs comparing investment options and referred to research showing ''recent slowing'' on the property market.
He accused Mr Drummond of handing over the advice ''not caring whether it was true or false''.
''It was never a case of not caring,'' the former adviser fired back”_

*“ASIC Release - 24 February 2011*

_“A former authorised representative of Storm Financial Ltd has been banned from providing financial services for four years after an ASIC investigation found he made false and misleading statements and provided inappropriate advice to a number of his clients. 

Mr Stuart Craig Drummond, of Clayfield in Brisbane, Queensland, was employed as an authorised representative of Storm Financial Ltd and its predecessor, Ozdaq Securities Pty Ltd, between 31 May 2004 and 18 June 2009. 

ASIC’s investigation found that Mr Drummond failed to comply with financial services laws in relation to advice he provided to a number of his clients between October 2004 and July 2008.” _

Much of the evidence that ASIC relied on stemmed from our particular case! 
_"But why did you trust the man?"_ Why not? After all he was a qualified financial adviser? 

Here’s an extract from a submission to the PJ-C that was not written by us but it could equally apply: _ “We had meetings with Stuart on a regular basis (approx once every 5 to 6weeks) and even more often towards the end of 2008. We relied totally upon the experience and credentials of our financial adviser who after all has a Master of Applied Finance Degree from the University of West Sydney.”_

Any of you got one of those or are they printed in Singapore these days, and sent to you when you become a financial adviser? 

Now, bearing in mind what I’ve just said, let me get this right! you want me, '_Bunnyip_', to admit that I was partly to blame because our Storm financial adviser:

*	made false and misleading statements in breach of s1041E of the Corporations Act 2001,
*	engaged in misleading and deceptive conduct under s1041H of the Corporations Act 2001,
*	promoted the Storm strategy without considering the suitability of the strategy for individual clients,
*	provided Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, and 
*      didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy. 

ASIC's words, not mine! 

Now, have I got that right? And how did you arrive at that conclusion again, _Bunnyip_? Were you on the Joh Bjelke jury by any chance?

Someone asked earlier why we Stormies didn’t sue Storm. We ourselves have an _‘open and shut’ _case against Storm but they are gone and dusted. This is a familiar story where financial advisers are concerned. They destroy peoples’ lives and then go to ground! Besides, we can barely scrape together money for a class action against the banks. Certainly, If we get any money back, we’ll be looking to sue some financial advisers later on. To use Joh’s words, _“Don’t you worry about that!”_

Now, if any former Storm investors on this forum want to accept partial blame for the behaviour of their Storm financial advisers, that is their prerogative. Perhaps they didn’t have the same experience that we did? If they did though, I would ask them to stop apologizing to others on this forum who mostly work in the financial sector anyway. Being who they are, these financial people are part of the problem – not the solution. Shifting the blame is something they are very good at doing if you let them.

We did the right thing in the beginning by seeking professional financial advice, Don’t let this lot tell you any differently. Our only mistake, if we did make one, was to put our trust in financial advisers who all tell you they will give you the best advice possible but rarely do. Just read your newspapers for proof of that!

As for our being “greedy” as Bunnyip puts it, it really takes a closed mind to think this one up or someone that hasn’t taken the time to inform himself of all the facts.


----------



## Julia (9 November 2011)

Mindstorm said:


> Julia,
> 
> I've read your post over and over, and I have to admit to you that I'm astonished that you've been so upset by Frank's posting that you felt that you had to reveal this very personal, horrifying, childhood experience on ASF........



Mindstorm, I'm immensely touched by your post and thank you sincerely.

It was out of character for me to divulge anything so personal in a public forum and I've since very much regretted acting so impulsively out of intense anger.


----------



## Frank Ainslie (9 November 2011)

*Right of reply (Part 2)*

A number of so-called members of SICAG have deemed fit to comment stating that they do not share my points of view. Again that is their prerogative. Let’s put this SICAG issue to bed once and for all though.

Helen and I are members of SICAG and have paid our dues. 

Someone has asked me to state just how many members are in my Group which by the way is called SOB. It’s an anagram or ‘Storming on Banks’’ but one of our members suggested it should stand for “Sick of Bull*******s” I couldn’t agree more.

I formed SOB which currently has 54 members because I was finding it difficult to post anything on SICAG about Storm without being attacked. For instance, I wanted to go after the rogue financial advisers such as Stuart Drummond but was told that we shouldn't be vindictive and I should mind what I say about people like him When one considers that SICAG also consists of people that were also former Storm financial advicers, this reaction is somewhat understandable. 

Storm Macardle, the policeman, who has been an inspiration for all Stormies left SICAG because his integrity was questioned. Anyone knowing Sean would know that he has this in spades. 

There is no membership fee to join SOB. Any time and money as in the case of my websites is down to me. 

No former Storm advisers are allowed to be members of SOB. Ron Jelich who has given me invaluable information and is now genuinely fighting on behalf of us all wasn't even allowed aboard. This makes SOB a completely independent Group where people can discuss things freely without fear or favour. 

SICAG is and will remain a wonderful support group for people, and I have every respect for Mark Weir who has had a difficult job balancing so many conflicting points of view. The fact that he has done it under trying circumstances is all the more laudable. So this post is not meant to be a smear on SICAG but rather a reality check. In other words, many in SICAG are coming from different directions!

There were between 13,000 and 13,500 investors in Storm. Only 1200 or so were completely wiped out by over-leveraging. SICAG has 234 members in its discussion group and a 1000 plus members in all. I would suggest that most members of SOB were in the 1200 that lost everything.

I never formulated SOB as a competitor to SICAG. Yet, I have met resistance at every turn from people claiming to be true SICAGGERS.

I organised a petition that was never pushed.

I supported Mark Weir when he was attacked by Slater & Gordon.

I have created two websites for former Storm investors that were never pushed.

I was also instrumental in getting our lawyers to instigate a BOQ class action off my own back. I have fought for CBA clients, Macquarie clients and BOQ clients for three years now Go to my sites if you want proof of this. 

There is now a strategy in place to try and demonise me for reasons  beyond my understanding. It’s a ploy that people have used throughout history to garner support. For those misguided individuals out there that want to do this, I would remind them that we are all in this together. 

I’ll leave you alone if you leave me alone. I think we have enough worries without this type of behaviour.

These are some of the people I have personally helped. Ask yourselves before attacking me what you have done and who you have helped?

_“Hi Frank,
What fantastic advice you gave
I can’t imagine how to thank you for helping me to get mad and get active. We have been apathetic too long and had you not come along Frank, we would still be hiding under a rock! When it’s all over we have to have a big party and all get loudly sozzled together. You are a tower and I really appreciate your support. I hope you and Helen have a super Christmas and we all have the best 2011 we can!
Warm regards,
Megan and John”

“Frank
What can I say - I have read everyone of your 'countless words' felt everyone of your fears- and as for doubts.... I must tell you that when I read your nightly 'mantra' I slept a little easier.....not one word was wasted on us and you gave us the belief so that we didn't need to doubt. 
You are our Trojan Horse....we were merely the foot soldiers....at the ready! Thanks so much for taking out battle right to the doors or our opponents. We are elated with what is now unfolding in the media and surprised with the realisation that ASIC is indeed on our side. 
Keep it coming please Frank - it is not over yet.
Many thanks
Deb and Barry”

“Dear Frank
I have always believed in you and trusted your opinions. I really do appreciated everything you have done, you are amazing. 
Thank you once again,
Looking forward to meeting you one day, when we are celebrating
Janelle”

“Hi Frank,
I'm sure all will agree that you have played a very large part in putting us where we are today. Your constant attack on the Banks and anyone for that matter, who you thought might have a case to answer. I have a very good friend up here in Cairns, who I correspond with frequently, and we have named you "TSUNAMI" Frank. You are just like a tidal wave that just keeps pounding away and has given the Banks, ASIC and S&G, no peace at all, since this Debacle occurred. THE SICAG Committee, Sean McArdle, Stewart Levitt and his team for their integrity and anyone who has contributed to the SICAG Group's postings has played a part in getting us all through this awful crisis. Frank, your "well written and well researched" articles, however, were always coming at regular intervals, just when we needed a boost to keep ourselves going, you'd be there with something new. We salute you "TSUNAMI"
Frank. 
Kind regards, Frank G.” 

“Hi Frank ,
Thank you once again for your tireless effort.I am so sorry I didn't get to meet Helen yesterday. You were both speaking with people and I didn't like to interupt .I missed our TV interview as well ..maybe it is on the cutting room floor ?
May you be blessed for the hope you have given us in attacking ASIC and the banks.
God bless you ,Cheers Jan”

“Dear Frank,
Congratulations for the time, effort ,courage, and determination that you as a human being worked for all storm victims. Both costas and I also add our ongoing gratitude and thanks to you and Helen. When this is all over and have our lives back to normal,storm investors should organize a huge party to celebrate victory over the banks. 
To end ,we wish you both the best of luck,strength, and good health for the test case.
Once again we thank you. Keep strong!.GOD BLESS YOU BOTH FOR CLIMBING
THIS HUGE MOUNTAIN FOR ALL OF US.
Regards jean kilili”.

“Hi Frank,
Thanks Frank I enjoyed reading your post. It's making me feel more positive and it's buoyed my hubby up no end I can tell you, this news has been good for his soul. Ruth”

“Frank. Thanks foronderful job, We would be lost without you
Eva Yelavich.””_


----------



## doobsy (9 November 2011)

To get some context then here Frank, in the Statement of Advice provided by Storm, having told them that your ongoing living expenses could be covered with an income of $45,000, what level of income did they say you could draw on an annual basis? 

This isn't a dig at you, I am wondering just how much more they 'promised' that their strategy was supposed to provide.


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## ngombi (9 November 2011)

Frank

Upon reading an earlier of your posts I thought you may have had a momentary brain drain.
Subsequent posts however show it was not momentary; you continuously make comments without thinking clearly. You just keep "shooting yourself in the foot."

Your most recent:-


Frank Ainslie said:


> Our only mistake, if we did make one, was to put our trust in financial advisers who all tell you they will give you the best advice possible but rarely do. Just read your newspapers for proof of that!




Were you illiterate before the Storm debacle or did you not read the newspapers before that time. If not, why put your trust in a financial adviser.
*You just stated that by reading the newspaper one would have proof that financial advisers rarely give the best advice.* BANG,BANG.



Frank Ainslie said:


> And Julia and others,
> 
> If you were unfortunate enough to be raped the last thing you would want is to be continually questioned about your motives. Yet, we know that this is exactly what happens to women when they find themselves in such circumstances. We have been raped by financial advisers who acted in conjunction with banks. We don’t need anyone to keep on reminding us that we should not have walked down a particular road.




Two barrels here perhaps:-

1st
I went to the races on Saturday, placed a bet, lost some money which means I was raped. Don't really know whether it was the bookie or the horse or maybe the jockey that raped me.
Similarly I bought an item for $20 at the store and later found the same item elsewhere for $15. Me or my wallet was raped again.
*What the hell has losing $$$$ got to do with rape* Frank???????????? BANG,BANG.

2nd
You specifically direct this at Julia (and others) who by name is presumably female.
    Do you actually think about what you pen?????? BANG,BANG.



Frank Ainslie said:


> Now you know how we feel!




Unbelievable Frank; you have no brain and you have no shame. Others here have expressed their disgust but I am lost for suitable/postable words.
Be glad that this is on a bulletin board and not at a live gathering/meeting of members.After making that statement at a live gathering you would probably wish to launch legal proceedings against me (and perhaps others) for assault to your person.

I could go on with other examples but cannot be bothered.

About myself:-

I have no connection with Storm whatsoever and don't personally know any Storm clients or employees.
I am not a financial advisor, nor am I involved in any financial industry other than personally looking after my own investments and finances. 
I reside in the city of Townsville, and as Storm was based here have taken an interest in this debacle. 
Storm's collapse of course featured in the local newspaper which mentioned matters similar to some posted by yourself, one of which I quote:-



Frank Ainslie said:


> "When applying for an earlier loan, in August 2006, the bank had on file a rate notice dated August 2004 which indicated a pension discount for Mr Reynolds, so the $100K income claimed in the application is obviously not true...




Since reading similar in the newspaper I have always had a question which I have thought of asking on this thread, but have not bothered. As I am currently posting here I take the opportunity to pose the following to you or anyone else wishing to clarify the issue.

I would assume that an applicant for a loan would have to submit a signed declaration/statement outlining assets held, earnings,etc to show capability for repayment. Did the applicant fill out and sign such a statement????. Did the applicant sign a blank statement and let others fill in the blanks. In the above quote 'pension/$100k income obviously not true', if not true the application would be fraudulent. 
Did the applicants sign a truthfull application?
Did the applicants sign a fraudulent application?
Did the applicants sign a blank application???
Who presented the applications to the lender, the client or Storm? This might also impact on who is advised of a margin call.

Answer these and I might then re-assess the apportioning of wrong doings which currently are greatly against Storm.


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## SJG1974 (9 November 2011)

Frank,

Why do you keep carrying on with the same tripe....all the while shooting yourself in the foot?

Let me get this straight....You had over a million dollars in investable assets, and wanted just $45,000 per annum to live on?

Now I know you don't like banks, and you have proven that common sense isn't your strongest asset, but did you realise that you could stick your money in the bank and earn 6% p.a., which would give you your $45,000 p.a. plus some cream on top?  And potentially tax free if super is used?  Surely a worldly business man like you would have known this Frank?

Instead of taking this simple and conservative strategy, you had a financial adviser convince (con) you into borrowing against your home and leveraging even further to provide you with an income that I am sure they promised would be well above the $45,000 you wanted.  

The risk Frank, did you not consider the risk, or did you just blindly follow what was told to you?  This was your life Frank, and you risked it all by following a strategy that you clearly did not understand; a strategy that you had no need to go anywhere near to achieve your modest goals.  Yes your adviser sold you up the river, but you didn't have to jump in the boat Frank. Did he hold a gun to your head?

At the risk of repeating myself, WHY Frank?  Why did you do this?  Why did you pay an astronimical fee, gear yourself to the gills, plonk it all on the sharemarket and basically follow a strategy you clearly did not understand, when all you wanted to live on was $45,000 p.a.  

WHY???????????????????


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## Solly (9 November 2011)

GG

You really know how to start a killer thread. 
Almost 650,000 views and also I'm here still posting links as well, almost 3 years on. 
What's your prediction in the short term, for this saga?

S


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## Garpal Gumnut (9 November 2011)

Solly said:


> GG
> 
> You really know how to start a killer thread.
> Almost 650,000 views and also I'm here still posting links as well, almost 3 years on.
> ...




Thanks Solly, and for all your input as well, as we enter the fourth year of this sorry saga.

The simple answer in the short term I do not know. I just do not know. I am watching and listening and will let you know via the usual channels.

Should there be no movement by the February sittings, I may need to do a recon patrol, after the wet, in a near intact Spitfire Vb sitting in a shed on high ground near Daly River. 

Until then I'm relying on intelligence from the natives, back here on the coast.

And that as you would realise has its drawbacks in term of reliability.

The only other rumour I have heard, is that there is talk of a major defection from one of the camps. It is just a rumour though. There are some unhappy people in low places.

My mate has moved on and never talks about investing, and is happy enough. 

Many ex Storm investors are still devastated, distraught and broken, angry with the banks and Storm and their respective muppet advisers, and tiring of the delays and length of litigation. 

gg


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## Julia (9 November 2011)

DocK said:


> My experience is probably similar.  We had sought financial advice several times before, each time at a cost, only to be pointed towards the limited range of products or investments that the planner concerned earnt commissions from.  This applied both to bank and non-bank FPs.  It did not seem possible to obtain an unbiased plan, and we were unaware of any FPs who were not affiliated with a select group of sponsors or the like.



Your impression was correct.  The nature of much of the industry at the time ensured that pretty much whomever you consulted would be making a recommendation to you based on those products which were going to bring the best commission to the salesperson, viz the financial adviser.   Whether it was going to be best for you seemed often to be a secondary consideration.

I was blown away when the recent recommendations from the enquiry into financial planning dictated that the "Adviser should act in the best interests of the client"!
I'd have thought this did not need spelling out, but the very fact that it apparently does, speaks volumes.



> Storm's strategy of investing in the ASX 200 as a whole seemed to make a lot more sense than simply picking a managed fund.  As to the fees, yes we baulked at 7% upfront, but there were then no ongoing management fees as such, and every prior FP we had seen wanted 4% annually for doing very little ongoing work.  We did our sums and worked out that in the long term it was actually cheaper to pay a big chunk up front than 4% year upon year.



Nothing wrong with that reasoning in principle.



DocK said:


> No, we didn't, because - now I hope you don't have weak bladder control - we thought direct investment in the sharemarket might be too risky!  Bloody hilarious isn't it!  I did not know that stockbrokers also advised on strategies or investments, but thought they simply acted upon their client's instructions.



That impression is pretty much true, certainly as far as online brokers are concerned.
Full service stockbrokers (i.e. the ones you go to see in their office) do recommend what shares you should buy, but not all of them are qualified to offer *financial planning* advice, i.e.an overall consideration and assessment of your entire financial situation, tax position, years to retirement etc.  This is what Storm, being as I understand it, financial planners, were supposed to do, and to then recommend a personal strategy specifically for your situation.

When I first started out I had the impression that stockbrokers were really smart people who knew all about how the market worked, who had access to lots of supa dupa research, and who would therefore be far more capable than I at choosing what companies to invest in.

It was only after a year (in an aggressively bull market) of my p/f of their recommendations mostly going down that I realised they are simply salespeople, doing what they're told by their head offices.   e.g. if they have a major large client who wants to sell a big chunk of XYZ obviously the firm is going to want to look after that client, so they will put out a suitably worded research recommendation that suggests retail investors should buy this magnificent company at its current bargain price.

So the naive investor, still thinking the almighty stockbroker knows best, will accept this recommendation, and, um, get done, while the big client says, 'hey, thanks for that' .




> As I knew I lacked the experience and knowledge to pick individual shares at that time, I did not consider a stockbroker to be an option for us.  Back then we thought our best road to financial independence was to access some of the equity we had built up in our home and utilize the tax advantages available through negative gearing into a managed fund or similar.   We were in our mid-forties then, had almost totally paid off our home and had been self-employed for about 7 years at that time.  We had sunk most of our savings into our business, and had rolled our supers into a smsf and used it to purchase the factory that we run our business out of.  The best, maybe the only, good decision we made was to refuse storm's suggestion of selling the factory in order to have more funds to put into the sharemarket.  I still don't think we necessarily lacked all common sense, we knew many people following much the same system as us with other FP firms, we simply didn't know what we didn't know.



And I expect you made the decision in a bull market which would have seemed to validate it.

Your comment about not knowing what you didn't know is fundamental to this whole debacle.   You had in your favour, obviously, that you were younger than many, and that you did not succumb to the extraordinary suggestion of selling your factory.

No obligation to answer, of course, but when the proposition of using the equity in your home was discussed with Storm, did they at that stage explain the next step in their strategy of the shares bought with that loan subsequently being used as collateral for a margin loan?

Others on this thread have said they had never heard of such a thing as a margin loan.
They have said they did not ask to have it explained.
This is where so many appear to have become unstuck.
What I'm interested in is whether the entire strategy, including the margin loan, was clearly outlined in the beginning, and if so, how it was justified.




> I do think some on this forum lose sight of the fact that this is a stock market forum and its members are not necessarily representative of the population at large.



That's quite true.  


> What appears obvious to some re gearing, bubbles, impending crashes etc is not so obvious to the vast majority of the financially ignorant.



What you needed to know about around this time was the sub prime debacle unfolding in the USA.  This was discussed almost every day on much of the media, certainly ABC.  It made pretty clear that, despite assurances by the 'dream on' , out of touch economists, the world was in for a shock.
This didn't require any financial understanding, just a willingness to listen to/watch the news and understand the global situation.

This is not a criticism.  Many who should have known better were absolutely familiar with what was unfolding but still failed to predict the coming storm.  I'm just attempting to correct your impression that some specific financial understanding was required to know that the clouds were gathering with exponential intensity.



> I agree that it does not necessarily take a lot of time to learn the basics, having now done that myself to an extent, but it is a daunting prospect to many.  And yes, we were gullible enough to believe that professionals could be counted on to do what they promised, and that endorsement by FPA and their bankers actually meant something.  I used not to be the bitter, twisted and cynical soul that I now am



A reasonable measure of cynicism is very protective.  Consider it a plus.


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## Judd (9 November 2011)

SJG1974 said:


> ...did you not consider the risk, or did you just blindly follow what was told to you?.....




Odd how those old saws generally turn out to be true: If think, or you're told, there is no risk then you do not understand the risk you are taking.

For any one who is scanning this thread, if you are able get your hands on a book titled "Where are the customers' yachts?"  It was written about 80 years ago (no, I am not that old) and some of the things in that book are as true today as they were then.


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## Mindstorm (10 November 2011)

Julia said:


> Mindstorm, I'm immensely touched by your post and thank you sincerely.
> 
> It was out of character for me to divulge anything so personal in a public forum and I've since very much regretted acting so impulsively out of intense anger.




Julia,

Please don't regret your posting.  Whilst I agree that it's out of character for you, it's indicative of the response that Frank 'forces' by his 'shock tactic' diatribe(s) on this and other forums.

I'm sure, but am happy to be corrected on this point, that Frank has finally shared with ASF members in another post, the number of former storm clients he 'represents'.  From memory, did Frank say that his 'forum' had 53 members?  So, 53 members out of thousands of former storm clients who subscribe to SICAG?

I'm also saddened that the 'posts from his forum' are all by Sicagers I recognise.  I wonder if he had their permission to do that, or if Frank is so blinded by his own needs that he's posted their comments, (from when I have to ask), to serve Frank's own 'purpose' on this forum now.

Backtracking on myself now, when I say that I cannot possibly speak for all former Storm clients or all current SICAG members, but it's own my belief that Frank is looking out for himself and trying to bring as many people as he can 'bluster into supporting him' to save his own 'skin/bacon'.

Frank's views are not the view of the majority of SICAG members that I've met to date.

MS


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## Mindstorm (10 November 2011)

bunyip said:


> Mindstorm
> 
> You shouldn’t feel guilty about responding to Frank as you did. Frank has had it coming for a long time – he comes on to this forum with the objective of shoving his personal agenda down everyone’s throat, and in spite of receiving a gentle rebuke from me for assuming to speak for others, he continued to assume that he speaks for everyone with his one sided and narrow minded views.
> Then when he gets a more stern rebuke from you and DocK, he becomes aggressive, throws a tantrum, and behaves like a spoilt three year old brat.
> ...




Bunyip,

Wth all due respect, Frank purports to be a Sicager, and has said that he speaks for 'all' Sicagers.   I felt that I had to respond to that by saying that he couldn't possibly because I know that he does not speak for me, (or for many others that I know of).

I do know that I would be speaking on behalf of the Sicagers I've met, and those I've yet to meet, when I posted to say that we would never, ever, compare our monetary plight/loss to anyone who had suffered any form of abuse as a child.

I believe that I've already responded to Julia and said that I think that I read earlier today that Frank's 'website' has 53 followers.  This is a very small number of former storm clients as against the thousands I believe are members of SICAG.

Speaking 'tittle tattle' now, or PURE rumour, but 'rumour' has it that Frank has never been denied membership of SICAG as he's posted on this forum, he just likes to perpetuate this 'fact'.  

The 'popular' rumour is that he was finally forced to pay a SICAG subscription late in 2010, and that he paid one subscription ($50) for himself, his partner and their relatives who were also involved in the storm debacle.  

So, while the other poor storm bastards were paying $50 per person per year to SICAG from January 2009 onwards to fight the good fight, Frank and his merry band/family got in by paying a measly $50.  Buy one get ten free?

Why didn't Frank apply this particular business 'acumen' in his former dealings with his Storm advisor?

MS


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## Frank Ainslie (10 November 2011)

Mindstorm said:


> Bunyip,
> 
> Wth all due respect, Frank purports to be a Sicager, and has said that he speaks for 'all' Sicagers.   I felt that I had to respond to that by saying that he couldn't possibly because I know that he does not speak for me, (or for many others that I know of).
> 
> ...




Mindstorm

Another one, I see, that is determined to spread untruths!

_”Purports to be a Sicager…” _The last time I looked, I was still a member of SICAG!

_"…and has said that he speaks for 'all' Sicagers."_ When have I ever claimed that I speak for all Sicaggers? For that matter, when have I said that I speak for all those that lost money in Storm? 

_“The 'popular' rumour is that he was finally forced to pay a SICAG subscription late in 2010, and that he paid one subscription ($50) for himself, his partner and their relatives who were also involved in the storm debacle.”_

Helen and I have always paid our membership fees whenever we have been asked. We are fully paid up members. Check with the SICAG Committee if you don’t believe me! That the problem with rumours – they are just that, rumours! If you wish to make remarks about other people, I suggest that you check your facts first or are you just trying to be malicious?

_“Why didn't Frank apply this particular business 'acumen' in his former dealings with his Storm advisor?”_

We dealt with a qualified Storm adviser that has now been barred by ASIC because to us and others he: 

* made false and misleading statements in breach of s1041E of the Corporations Act 2001,
* engaged in misleading and deceptive conduct under s1041H of the Corporations Act 2001,
* promoted the Storm strategy without considering the suitability of the strategy for individual clients,
* provided Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, and
* didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.

People in Storm (like us that lost everything) were lied to from the very beginning. Why do you think ASIC have stated this about our financial adviser and barred him if this is not true? All the business acumen in the world can be sabotaged if someone that is a qualified financial adviser tells you one thing, presenting reasons and a strategy for doing so, and then proceeds to do something else. 

What part of, _‘false’,_ _‘misleading’ _and _‘deceptive’ _are you and others on this forum having difficulty understanding?

How many people were deceived by Madoff in the States because he told them one thing and then did something else entirely? 

I would ask you to get your facts right before spreading lies about us. As a person that has suffered like the rest of those that were deceived by Storm, I don’t think that is too much to ask! Do you? I certainly don't think the SICAG Committee would be too happy with one member trying to defame another!


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## Solly (10 November 2011)

Hi Frank

Did your Storm Adviser hold a "Master of Applied Finance" ?

S


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## Solly (10 November 2011)

Garpal Gumnut said:


> Intriguing does not adequately describe it, mate.
> 
> Byrnsie has been very quiet about it and may know more than you or I.
> 
> ...





GG 

There's a nice little slideshow on this link.

http://www.propertyobserver.com.au/auctions/cassimatis-property-for-auction-three-years-after-storm-collapse/2011110952290

S


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## SJG1974 (10 November 2011)

Frank,

Given your refusal to answer the most basic questions I have put to you, there can be no other explanation than you were GREEDY.

You had more than enough assets to support your desired income in a conservative manner, and you risked it all by placing your life in the hands of an adviser who promised you riches beyond what you imagined were possible.  

If you had have taken the time to do a bit of your own research on the strategy you were presented with, a strategy you clearly did not understand, you would have realised that the risk you were taking was both incredibly high and most importantly, not needed to meet your objectives.

That failure to understand what you were doing, Frank, IS YOUR FAULT, noone elses.

All the other stuff you are wasting your time with on this forum is just fluff.  Take some responsibility for goodness sake.


----------



## DocK (10 November 2011)

Julia said:


> Your comment about not knowing what you didn't know is fundamental to this whole debacle.   You had in your favour, obviously, that you were younger than many, and that you did not succumb to the extraordinary suggestion of selling your factory.
> 
> No obligation to answer, of course, but when the proposition of using the equity in your home was discussed with Storm, did they at that stage explain the next step in their strategy of the shares bought with that loan subsequently being used as collateral for a margin loan?
> 
> ...





With us the entire strategy was clear in the beginning.  I cannot speak for the experience of others, but in our case it would have been clear to our adviser that we knew what a margin loan was, how they worked, when a margin call would occur etc, so there would have been no point in him trying to slip something by us.  There was an attempt to "just sign where shown and I'll fill it all in later" which I refused - I took all paperwork home with me and completed it myself - I'm a bit of a control freak.  We were already fairly familiar with the storm general strategy before going ahead with them as we knew people who had been with them for several years and had done very well.  We started with only the funds borrowed against our equity, and later took out a margin loan.  Our LVR was initially 20% and reached a peak of about 55% prior to the dramatic downturn in the market.  I suspect that we may not have been pushed to be as aggressive with margin lending as some as our adviser knew he’d encounter resistance from us.  

As to justification of the strategy - I know there are several on this thread who cannot consider borrowing against their home to invest under any circumstances.  That's fair enough, but everyone has their own risk tolerance, and I don't think it's such an outrageous thing to do in certain circumstances.  Having said that, I was astounded when I found out that storm had been pushing this strategy with *all* their clients, including those at or near retirement.  We were in our early to mid-40's, and knew several people doing exactly the same thing.  Some had achieved great results over several years - although in a bull market I agree that just about any fool could.  I'm aware of several financial planning firms that used a very similar strategy (and some still do) with the difference that most pulled their clients partly or wholly out of the market in time to avoid total devastation.  One major difference with storm was the plan to never pay down debt, but to build up both the investment and the debt continually.  This was an aspect that we didn't intend to adhere to - our intention was to use margin lending to accelerate wealth building until the investment has grown to a point where debt could be progressively paid down and the remaining capital left to do its thing.  What's that saying about "the best laid plans of mice and men often go astray"?...   Needless to say, I've formed another opinion entirely since getting my fingers so badly burnt and will be more prudent in the future.  I wouldn't rule out the use of any and all margin lending in the future however, but I'd certainly be much more prudent with the type of market I used it in and far more nimble to exit.  I still find I have to dig a bit to find much sympathy for those who made excellent returns over a number of years but spent it all on holidays, boats and cars, home improvements or whatever, with no thought of reducing debt.  But that’s my own personal bias showing through – to each their own, right? 

Dollar cost averaging is a method that is still regarded my many as being perfectly valid.  The old mantra that "it's not timing the market, but time in the market" is trumpeted by so very many FPs that it has become so very well-known by the general population that it is regarded as fact by many.  Whenever our adviser recommended another "step" due to a market fall, it was portrayed as an excellent opportunity to take advantage of a lower entry into a market that would inevitably recover.  Many charts, graphs and real-life examples were used to prove that many small bites on the way down would result in breaking even far sooner than just sitting on the original investment, once that inevitable recovery came to pass.....  I don't subscribe to this way of thinking now - but it did seem valid to me back then.




> What you needed to know about around this time was the sub prime debacle unfolding in the USA.  This was discussed almost every day on much of the media, certainly ABC.  It made pretty clear that, despite assurances by the 'dream on' , out of touch economists, the world was in for a shock.
> This didn't require any financial understanding, just a willingness to listen to/watch the news and understand the global situation.
> 
> This is not a criticism.  Many who should have known better were absolutely familiar with what was unfolding but still failed to predict the coming storm.  I'm just attempting to correct your impression that some specific financial understanding was required to know that the clouds were gathering with exponential intensity.



Fair enough – but it’s not always that clear-cut.  Again, I can’t speak for anyone but myself, but although I was certainly aware of the sub-prime debacle playing out in USA, there were also more than one so-called “experts” at the time of the opinion that what was happening in America wouldn’t/shouldn’t have a dramatic effect on Australia as our banking system was so much stronger, safer etc, and our companies were profitable and strong.  Added to that were the weekly missives from storm HQ (which I now think of as Manny’s Propaganda Machine) that trumpeted about China, China, China, resources, resources etc.   What long-lasting effect could the sub-prime mess over there possibly have in the long run so long as we had minerals we could dig up and sell to China!  That’s probably an over-simplification, but as I remember it there were alternative points of view about the global economy and to what extent  Australia would suffer from the mess that was USA.  Unfortunately, Manny’s huge ego (and no doubt the fact that he & Jules needed clients to stay invested) refused to see the writing on the wall for far too long, and he completely failed to anticipate the extent of the decline to come, and his clients either believed him or were too ignorant themselves of global economics to know better.   Or just didn’t watch enough ABC.  I’ll freely admit that I had no idea how small a player Australia actually is on the world stage and to what extent we are at the mercy of the prevailing headwinds from overseas.  I’ve since learnt better.  I’ll also freely admit that I was too busy at the time raising a young family, helping to establish our own business, living life and placing my trust in the firm I believed to be professional and more knowledgeable than I, to spend as much time as perhaps I should have acquainting myself with all the pertinent facts.  Again, a hard lesson learned – I won’t make that mistake again.
My only saving grace was that I eventually began to question storm’s viewpoint and sidestepped our adviser and pulled our investments and repaid our margin loan directly with Challenger and Macquarie myself – salvaging at least some of our original (borrowed) capital.   I knew how to do this – many of storm’s clients perhaps did not have the first clue how to go about taking action for themselves, and were apparently stonewalled by their advisers at every turn or just unable to make contact with them at all.  





> A reasonable measure of cynicism is very protective.  Consider it a plus.




Maybe so, but I think I used to be a nicer person than I am now, and dislike knowing that to survive in this world one must foster an element of distrust of others.  I intensely dislike the tendency of some in the community to generalize about ex-stormers as if we were all alike.  I daresay although there would be similarities, we’d be as diverse a group in our goals, dreams, greed, intelligence, outlooks etc as any other group.  I try, in life generally, not to build myself up by tearing others down and I greatly dislike to see ex-stormers who are often already suffering mentally and emotionally subjected to harsh treatment.  Whether we/they deserve it or not.   Except, maybe, for Frank.... 

I’ve posted this in an attempt to give an honest account of one ex-stormers experience, but don’t intend to endlessly justify myself or my motives again – I need to move on.  I hope that maybe some questions have been answered – but again, my experience is not necessarily typical of everyone’s.


----------



## Frank Ainslie (10 November 2011)

Solly said:


> Hi Frank
> 
> Did your Storm Adviser hold a "Master of Applied Finance" ?
> 
> S




Hi Solly, Nice to hear from you. 

His credential, listed on the web link below are shown as follows: 

Education:  Masters of Applied Finance - University of Western Sydney
Master of Applied Finance Degree

http://www.zoominfo.com/people/Drummond_Stuart_576348547.aspx

What is perplexing for us (I speak for Helen and me now) is that  Storm Financial advisers were allowed to continue working as advisers when the rogue ones had not been clearly identified. 

_“Former Storm Financial planners still giving advice” by:Anthony Marx  From: The Courier-Mail  - November 15, 2009 _

Extracts:

_“AT least seven former Storm Financial franchisees and planners are still active across Queensland providing investment advice to the public.
And there is no legal requirement for them to disclose to new clients any details of their past association with the failed firm…
Storm investor Bruce Milburn, who was once worth nearly $7 million on paper and is now shackled with almost $300,000 in debt, said the advisers' ongoing work in the sector made him "very angry"…
The Mackay-based former sugarcane farmer denounced Storm for "leaving a trail of destruction behind it". Milburn's former Storm adviser, Stuart Drummond, is now an authorised representative in Brisbane for Dover Financial Advisers.”_

Were all Storm Financial advisers bad people? Of course not but they cannot escape their share of the blame! _“I only followed orders!”_ is no defence. 

People say that we were ignorant investors and make it appear as though it were a crime. Storm’ former financial advisers cannot use this type of excuse. They had a _“duty of care”_ to their clients and they failed to fulfil it. They were certainly brainwashed like us by the Casimatises but is that a mitigating factor? You tell me!

I was determined to pursue Stuart Drummond because I didn’t want him to be allowed to deceive others as he deceived us. It wasn’t a case of being vindictive. It was a case rather of getting him off the streets where he could do no more harm. 

For me (and I know from feedback that others share my opinion) it is particularly galling that SICAG has former Storm advisers in its membership. This immediately creates a conflict of interests. How would a genuine victim of Storm (and the banks) know whether whatever he or she said was being treated impartially by the SICAG membership? Further, SICAG could be representing someone (Stuart Drummond for instance) that had created their circumstances to start with? Hence, there’s a dilemma right away! That is why I have my own group. Not for any other reason although I'm sure we will still have further postings claiming otherwise.

We’ve just had a posting from mindset in which he talks about my SICAG payments. How would he acquire such information anyway? _“There is a rumour”_ doesn’t quite hold water somehow. Then he goes on to decry the number of people in my group as though it’s a matter of some importance. Why is he so persistent in this regard?

He also goes on to say, _“I'm also saddened that the 'posts from his forum' are all by Sicagers I recognise. I wonder if he had their permission to do that, or if Frank is so blinded by his own needs that he's posted their comments, (from when I have to ask), to serve Frank's own 'purpose' on this forum now."_

Why would he be saddened because people express appreciation for what I’ve done? He should be happy if anything that someone was able to do something for them?

Mindstorm might indeed be a victim like me but his attitude is somewhat bewildering to say the least! Is he or she saying that no one other than SICAG is allowed to help people and anyone that does so should be treated with suspicion? This seems to be a very narrow minded view to me. It's not a very generous one either!

The problem with this forum is that everyone is anonymous. People post things and we have to take what they say at face value. If the truth be known, they could be anyone! I, on the other hand, have never sought to hide my name because I do not feel the need to do so. Everything I have stated can be verified!

Solly! What has occurred has engendered in us (and I am generalising for those that cannot distinguish the difference) a deep mistrust where other people are concerned. Further, when  people start attacking you for your opinions, you have to wonder at their motives for doing so! There’s that “suspicion” thing again. I could be totally wrong about 'Mindstorm' and a few others,  but when one has been attacked since this sorry affair started (Storm) it makes you wonder what their agenda is for doing so.


----------



## SJG1974 (10 November 2011)

DocK,

Can i ask whether you received pressure form your Storm adviser when you decided to pull out of the market as the market was falling.

I ask this because I am sure I have read somewhere that some people who were nervous in the middle to second half of 2008 spoke to their Storm adviser who persuaded them (to their detriment) to stick with the strategy that ultimately devastated them.


----------



## DocK (10 November 2011)

SJG1974 said:


> DocK,
> 
> Can i ask whether you received pressure form your Storm adviser when you decided to pull out of the market as the market was falling.
> 
> I ask this because I am sure I have read somewhere that some people who were nervous in the middle to second half of 2008 spoke to their Storm adviser who persuaded them (to their detriment) to stick with the strategy that ultimately devastated them.






> My only saving grace was that I eventually began to question storm’s viewpoint and sidestepped our adviser and pulled our investments and repaid our margin loan directly with Challenger and Macquarie myself..




I cannot recall whether I tried to contact our advisor first, or whether I assumed I'd meet resistance and didn't bother speaking to him at all.  I do know that he was unaware of my actions, and I had no further contact from him - but he no doubt was busy saving his own bacon at the time.  I am in Gold Coast and he was based in Brisvegas, and always took a couple of days to return a call at the best of times. By the time I decided enough was enough, I had reached the point where I didn't wish to have to argue my case or be fobbed off, and the market was moving so quickly that I wanted out as quickly as possible.  One of the things that frustrates me the most about managed funds is the time it takes to get any action on an exit order.  The last thing I needed was to be delayed further by storm when the market began to freefall, so I took the fastest option of dealing directly with Challenger.


----------



## Solly (10 November 2011)

Frank Ainslie said:


> Hi Solly, Nice to hear from you.
> 
> His credential, listed on the web link below are shown as follows:
> 
> ...




Thanks Frank

So once again we had somebody with higher qualifications and experience in the industry which would suggest that when a person seeking advice and direction in financial matters, could reasonably expect to receive advice of a sound nature. I am pleased that eventually due process gave the required outcome.

I totally agree that the “I only followed orders!” is no defence for negligent and harmful advice. I've been looking over my notes, files and media about this saga and I believe that it is beneficial to revisit the financial climate of the time before the correction. 

Most people I knew were doing very, very well with investments and speculations. Some had made millions in property and equities, there was a definite momentum for high returns on investments. I can fully understand why the Storm strategy looked attractive, especially to those who were sold the dream of a secure and hassle free retirement. 

And then there were these words from the time by the "master"..

"Our focus has always been at the cutting edge of finance and technology but this is driven by our priority to serve clients. We planned our dress code, offices and attitude to feel homely and welcoming and we began with the philosophy of giving. Then and always whether on a financial or personal level if we can see a way to support of our clients we're there."

Also here's an article from the archives that may be of interest to you, in regard to the Masters course. http://www.theaustralian.com.au/news/storm-financial-found-fast-track-to-degrees/story-e6frg6oo-1225772096172


----------



## Julia (10 November 2011)

DocK said:


> As to justification of the strategy - I know there are several on this thread who cannot consider borrowing against their home to invest under any circumstances.  That's fair enough, but everyone has their own risk tolerance, and I don't think it's such an outrageous thing to do in certain circumstances.  Having said that, I was astounded when I found out that storm had been pushing this strategy with *all* their clients, including those at or near retirement.



Yes, your risk tolerance would obviously be greater at your age.  It's the use of this strategy for people already retired or close to retirement that's so inappropriate, exacerbated by the fact that many of those accepting such a strategy did not understand it or apparently have any appreciation of the high risk.



> Dollar cost averaging is a method that is still regarded my many as being perfectly valid.  The old mantra that "it's not timing the market, but time in the market" is trumpeted by so very many FPs that it has become so very well-known by the general population that it is regarded as fact by many.



True.  It's recommended by some on this forum.   Makes no sense to me.



> Fair enough – but it’s not always that clear-cut.  Again, I can’t speak for anyone but myself, but although I was certainly aware of the sub-prime debacle playing out in USA, there were also more than one so-called “experts” at the time of the opinion that what was happening in America wouldn’t/shouldn’t have a dramatic effect on Australia as our banking system was so much stronger, safer etc, and our companies were profitable and strong.



It was in fact the mantra from most economists.  The fact that they ended up with egg all over their collective faces is of little comfort to those who believed them.



> My only saving grace was that I eventually began to question storm’s viewpoint and sidestepped our adviser and pulled our investments and repaid our margin loan directly with Challenger and Macquarie myself – salvaging at least some of our original (borrowed) capital.   I knew how to do this – many of storm’s clients perhaps did not have the first clue how to go about taking action for themselves, and were apparently stonewalled by their advisers at every turn or just unable to make contact with them at all.






> Maybe so, but I think I used to be a nicer person than I am now, and dislike knowing that to survive in this world one must foster an element of distrust of others.



Agree.  But we have to live in the real world.



> I intensely dislike the tendency of some in the community to generalize about ex-stormers as if we were all alike.



Fair enough.  However, I think most of us who have been critical have intended that criticism toward Storm for so immorally promoting an inappropriate strategy to people for whom it was totally wrong, and toward those who accepted a strategy that they didn't understand and about which they failed to ask questions.
That does not mean ASF members have lumped everyone together.  You obviously knew what you were doing.  Others obviously didn't.



> I’ve posted this in an attempt to give an honest account of one ex-stormers experience, but don’t intend to endlessly justify myself or my motives again – I need to move on.  I hope that maybe some questions have been answered – but again, my experience is not necessarily typical of everyone’s.




I thank you, DocK, for explaining your situation.  The question was not asked in any way as a suggestion that you should 'justify yourself' to anyone.  I was simply interested to know how much explanation was offered to potential clients.


----------



## bunyip (10 November 2011)

Frank Ainslie said:


> *“A right of reply” (Part 1)*
> 
> Bunnyip has taken a number of cheap shots at me since I left which, I believe, demand a reply.
> 
> He concedes now (that’s nice of him) that many in Storm were victims but I and a number of others were just plain greedy. He has no evidence for stating this but that doesn’t matter to ‘Bunnyip’  because that’s his view and it must be right?





No Frank, it’s not ‘now’ that I concede that some in Storm were victims – I’ve been saying it all along since this thread started years ago. And I don’t say that just ‘some’ are victims either –  each and every one of you Storm clients are victims, not just some of you.
You’re victims of a shonky outfit called Storm Financial, you are perhaps victims of illegal activites by the banks (and I stress ‘perhaps’ simply because we’re still awaiting the outcome of a future court case to prove or disprove illegal bank dealings), you’re victims of ASIC and the FPA because both of them let you down by endorsing Storm.
And last but not least, you’re victims of yourselves. This is the one that you just can’t seem to accept – that you were a victim of yourself. 
You were a victim of your own laziness because you just couldn’t be bothered to put a small amount of effort into simple research that would have warned you of the pitfalls of mortgaging your house and sinking all your saving and lots of borrowed money as well into the always risky stockmarket. 
You were a victim of your own mental laziness because you let someone else do your thinking for you instead of thinking for yourself.
You were a victim of your own gullibility because you took Storm at face vale and believed everything they told you. 
You were a victim of your own imprudence and follishness because you failed to apply a basic common sense test to the strategy that was proposed to you.
You were a victim of greed, particulary on the part of Storm who clearly had the objective of lining their pockets at your expence without giving you anything in return that you couuldn’t have got elsewhere at a fraction of the cost.

And I suspect that you were a victim of your own greed as well. I’ve asked you a number of times why you adopted Storms strategy when you had no need to. After all, you stated yourself that you were worth  1.7 million dollars and didn't need margin loans. 
You've ignored me every time I queried why you felt the need to get involved with Storm.
Now you state that you only wanted 45 grand a year income to fund your retirement, implying that this modest sum doesn’t make you greedy. On that point at least, I’d agree with you. But it still doesn’t explain why you went to Storm and adopted a strategy that was obviously designed to produce a much higher income figure than a mere 45 grand.
The maths are pretty simple....1.7 million dollars in unencumbered assets, take out your 400 thousand dollar home, you’re left with 1.3 million dollars of investment money. Put the 1.3 mill into a term deposit earning 6% - you get a yearly income of 78 grand which is more than 1.7 times the 45 grand you were looking for.
Or put the money into something else, maybe a combination of high yielding blue chip shares and residential real estate. Whatever – there you had your desired 45 grand a year plus a lot more besides.
Now what did Storm say to you I wonder.....how about_ “Hell, don’t put your dough on term deposit or into real estate or directly into shares - we can get you a lot better return than that.”_
So you swallowed it – they dangled a nice juicy carrot under your nose and dressed it up to sound so financially appealing that you grabbed it without giving it sufficient scrutiny to spot the obvious pitfalls.
And you wonder why I suggest that greed my have influenced you!
No, I don’t have any evidence to verify my view, neither have you presented any evidence to disprove it. This is not a criminal trial where hard evidence must be produced – it’s a forum for discussing our views and debating them if we wish with those who disagree with them.
The strategy in a debate is to put forward your views and back them with solid logic and sound reasoning. Then to refute the opposing views and again to produce logic and reason to back your argument.

You have failed to produce logical argument and solid reasoning to back many of the claims you’ve been making on this forum. You frequently put little clear thought into what you write.
All we keep getting from you, Frank, is the same old tripe about how you were duped into it, how it was everyone’s fault but yours, how you weren’t gullible, how you were astute and circumspect. You forget to mention that nobody held a gun on you and forced you to sign on the dotted line. Stuart Drummond has a point when he says ‘We gave advice, but clients could walk away if they didn’t like it.’

Finally Frank,  I was an A student in English and I know very well the meaning of ‘circumspect’. But since you apparently don’t know the meaning of the word, I have, as a special favor to you, looked up the meaning on Google and have copied and pasted it into this post just for you. Here it is._* Definition of CIRCUMSPECT. : careful to consider all circumstances and possible consequences : prudent ...*_

Now I ask you, Frank, do you really think you were circumspect in your dealings with Storm? Do you honestly believe you were ‘careful to consider all circumstances and possible consequences’? Do you really think you were prudent and astute?
Or are you just talking through your hat again, saying things without first thinking clearly about them, as usual?


----------



## Solly (10 November 2011)

bunyip have you spoken directly to any ex-clients of Storm?

The reason why I ask is that one recurring element that was mentioned to me early on was the, "Clayton's Debt". 

I don't understand how a debt can be presented as debt that is not real. 
I haven't seen it written in any official documentation. It appears to have been verbally regurgitated only. 

The ethics of presenting investment debt or any debt as not real, to me defies belief
and there must have been some very persuasive sales techniques employed.

S


----------



## bunyip (10 November 2011)

Solly said:


> bunyip have you spoken directly to any ex-clients of Storm?
> 
> The reason why I ask is that one recurring element that was mentioned to me early on was the, "Clayton's Debt".
> 
> ...




Yes Solly, I spoke to an ex-Storm client at a school reunion. He's one of the 'lucky' ones in that he has some years left before retirement and he has a mining job in Central QLD that pays him well over a hundred grand a year.  He's wounded but certainly not down and out.

Also I've swapped PM's with a couple of Stormers on this thread.

Clayton's debt....the debt you have when you don't have a debt! It was just another gem dreamed up by that sneaky conniving bastard Cassamatis to pull the wool over his clients eyes.
One of the Stormers I spoke with mentioned something about it but I'm a little hazy now on how it was explained. Something about it not being real debt because it was investment debt that was earning its keep, as opposed to say a car loan that was just dead money that was earning nothing and was in fact deteriorating in value.
Not entirely sure I have that right but I think it was something along those lines.


----------



## Solly (10 November 2011)

bunyip said:


> Yes Solly, I spoke to an ex-Storm client at a school reunion. He's one of the 'lucky' ones in that he has some years left before retirement and he has a mining job in Central QLD that pays him well over a hundred grand a year.  He's wounded but certainly not down and out.
> 
> Also I've swapped PM's with a couple of Stormers on this thread.
> 
> ...




Thanks bunyip

yes that's how it was relayed back to me. There is no legal definition of  "Clayton's Debt" so I suppose it doesn't exist under the FSR Act !

My Stormer mate isn't really travelling the best at the moment, the anniversary of the demise is imminent and with Christmas looming it's bringing back some unpleasant memories. He really doesn't have time on his side to effect a long term recovery without some type of remedy being applied. He's been going through a period of dark days but he's now more determined  than ever to make that best of whatever is dished out. 

I know he's been very hard on himself for what happened but has lately taken positive steps to change his thinking and reactions to this event. I'm sure he'll come good again soon. He's not a Sicager but trying to sort this with the help of friends, family and dogged determination.

I just hope when he reads this forum it gives him a bit of a boost to keep the fire burning and survive this debacle and get normality back in his life.

S


----------



## DocK (10 November 2011)

Solly said:


> Thanks bunyip
> 
> yes that's how it was relayed back to me. There is no legal definition of  "Clayton's Debt" so I suppose it doesn't exist under the FSR Act !
> 
> ...




Solly, please let your friend know that there are people out there who can relate to the way he feels, and tell him to keep his chin up. 

Just remind him there are more important things in life than money.

And if Solly's mate happens to read this - all the best to you!  Keep hanging in there.


----------



## Garpal Gumnut (10 November 2011)

Solly said:


> GG
> 
> There's a nice little slideshow on this link.
> 
> ...




It is quite a windy property. Do you have a link with surround-sound mate?

gg


----------



## Solly (10 November 2011)

Garpal Gumnut said:


> It is quite a windy property. Do you have a link with surround-sound mate?
> 
> gg




Mate, is the wind still coming from the inside or is it from the outside ?


----------



## Frank Ainslie (11 November 2011)

Solly said:


> Thanks Frank
> 
> So once again we had somebody with higher qualifications and experience in the industry which would suggest that when a person seeking advice and direction in financial matters, could reasonably expect to receive advice of a sound nature. I am pleased that eventually due process gave the required outcome.
> 
> ...




Hi Solly,

Very interesting! I missed this one but will certainly post it on my web site. 

Personally, I am not willing to dismiss many of Storm Financial’s advisers as being unqualified. I do believe that experience in any one field is sometimes just as adequate as bits of paper. One of the most brilliant people I have met in my own particular field of expertise, freight forwarding, was one such individual. And I say that having professional qualifications myself.

At the same time, if there are financial advisers out there that do not have the background or the training, they should not be allowed to present themselves as professionals. The fact that many fall flat on both counts is more an inditement of the industry rather than people that operate within it. There’s also an integrity factor that comes into the equation. Some people have it and some people don’t!

_“I believe that it is beneficial to revisit the financial climate of the time before the correction.”_ Absolutely! Many were speculating; no question about that! However, the vast majority of individuals that joined Storm signed up for the long haul at, what they thought, was "low risk". Speculation was the last thing on their minds. 

Two points of interest in this article:

_“During the week, the events surrounding Storm widened to include the National Australia Bank, where a Townsville man complained that he had been given a loan with the bank through Storm Financial, which he said he was unable to service because incorrect information had been recorded on his loan application form.”_

That climate you mention created a feeding frenzy where banks were circling in the water for business. Many advisory firms were throwing them the meat off their investors' bones so both they and the sharks could be fed. The Banks and some of the advisory firms' standards and procedures suffered as a consequence. The financial advisers  tended to forget that they had a contractual obligation to give sound advice, and the Banks conveniently overlooked the fact that they had signed off on various banking codes which have contractual implications once they agree to them. In Court, the BC's will be a central issue (if it gets that far?).

_"The Commonwealth Bank has admitted some of its lending practices in relation to Storm clients were improper, and has set up a resolution process to help clients get back some of the money they lost when Storm collapsed earlier this year."_

There’s a new site now at http://www.commonwealthbankdeception.com/about.htm

which may be of interest. It focuses on the wrongs of the CBA. It’s somewhat Spartan at the moment but I’m hoping it gains some momentum. I have fully covered the CBA on my website Storming on Banks https://sites.google.com/site/stormingonbanks/ for anyone that is interested. I did intend to create a separate website for the CBA's wrongdoings, but why reinvent the wheel?

Helen and I were not CBA clients but it really gets to me how the CBA , Slater & Gordon (who were supposed to be representing the CBA Storm customers) and ASIC have effectively locked the CBA resolution scheme  participants out of any additional compensation. HOW? Because the _“carve out”_ clause for additional compensation under Section 50 is not being pursued by ASIC! Once again, big business has had the last word. 

I have written numerous letters to ASIC about this, but they claim they can’t discuss matters because they are now involved in litigation with the CBA?

In Slater & Gordon’s booklet entitled, _“Proposal Framework & Advice Booklet”_ it states :

_“65. What action could ASIC take against the CBA and how could this affect me?

65.1 If ASIC found that the CBA engaged in unlawful activity, then it could seek to impose sanctions including fines on the CBA through enforcement proceedings. Such proceedings would have no effect on you.

65.2 However there is one possible avenue that could affect you, which is if ASIC were to commence proceedings on your behalf under Section 50 of the ASIC Act. This mechanism has rarely been used by ASIC and there is no certainty that such powers would be invoked even if ASIC found that the Bank engaged in unlawful conduct. If Section 50 proceedings were brought against the CBA then it is possible that such proceedings could culminate in the Court making a determination that the CBA should pay you an award of damages.

65.3 If such an award was made for a monetary amount exceeding the value of the proposal made to you by the Bank through the Scheme, then the Bank would be required to increase the amount of its offer to you to ensure that you were no worse off._

ASIC is not pursuing the CBA under Section 50. 

I wonder how many read the small print and whether this was fully explained to people.

The CBA is the worst offender of all where Storm were concerned. They have broken every rule in the book but ASIC are only charging that bank with UMIS? 

Anyone here believe in conspiracy theories. I am now a convert!


----------



## Solly (11 November 2011)

Frank Ainslie said:


> Hi Solly,
> 
> Very interesting! I missed this one but will certainly post it on my web site.
> 
> ...




Hi Frank, I had a look at this link from the site.

http://www.commonwealthbankdeception.com/action.htm

Which states;


> "- An ASIC source – The Plain Truth has obtained documents including emails from a source within ASIC. While this source had been more than forthcoming this person is no longer with ASIC. The indications to date are that the ASIC investigation has been deliberately misdirected and The Plain Truth has received credible but unconfirmed allegations that there has been collusion between the ASIC and the CBA to the detriment of Storm clients. At this point The Plain Truth believes these allegations but requires confirmation from someone within ASIC with integrity and courage."




If the above is indeed true and correct, I suggest that any information that this group has be given to the proper investigative authorities. If there is one grain of substance regarding these most serious allegations they should refer them to the Australian Federal Police. 

As you can probably tell I'm not a firm believer in mass systemic institutional corruption or implied conspiracy theories. In my experience, it's better to deal with the facts and let those with the skill and resources, examine and investigate claims further. But what I do believe is that institutions and individuals forcefully seek to eliminate or mitigate harmful situations and those with the deepest pockets tend to dictate the direction, for a while anyway.

The following months will be very interesting and I look forward to further developments.

S


----------



## Igetit (11 November 2011)

Solly said:


> Hi Frank, I had a look at this link from the site.
> 
> http://www.commonwealthbankdeception.com/action.htm
> 
> ...




Hi Solly, 

Very brieflyI have been made aware of the above allegations from a third party. Remains unsubstantiated. The relevant parties are pursuing the matter. Some to suppress, the others to uncover. 

I am not sure if the CBA fully understands where they are likely heading should all be revealed. This is dangerous stuff. Some interesting days ahead.


----------



## Solly (11 November 2011)

Igetit said:


> Hi Solly,
> 
> Very brieflyI have been made aware of the above allegations from a third party. Remains unsubstantiated. The relevant parties are pursuing the matter. Some to suppress, the others to uncover.
> 
> I am not sure if the CBA fully understands where they are likely heading should all be revealed. This is dangerous stuff. Some interesting days ahead.




Hi Igetit 

Dangerous more than aptly describes this situation, if true. I do not understand if such damning evidence is held by any party why an official complaint has not been made to the highest authority.

These allegations are of the most serious nature that I have been made aware of in this whole event. If I held such information I would be making Commissioner Tony Negus aware, he is also Chair of the Australian Crime Commission.

I believe that these allegations need to be fully investigated as a matter of urgency.

S


----------



## Garpal Gumnut (12 November 2011)

Solly said:


> Mate, is the wind still coming from the inside or is it from the outside ?




I would prefer not to answer on a public forum

I do however have a software program called Wind-Ignite.

I would be happy to answer your question but there is a price, 7% on the gross outlay of every investment you make on acting upon this advice. Wind-Ignite is a cutting edge Excel sheet ponced up to appear legit, and a proprietary asset of the Gumnut Family Trust.

I will forward you a prospectus suitably adorned with misspellings and disclaimers.

gg


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## Solly (13 November 2011)

Garpal Gumnut said:


> I would prefer not to answer on a public forum
> 
> I do however have a software program called Wind-Ignite.
> 
> ...




GG

I look forward to receiving that said prospectus, for the usual security and privacy reasons please send all corro to my encrypted Hushmail account.

I trust that the document will be of the usual polished standard featuring pictures of trusted members of the Gumnut Clan inner circle to add authenticity. Does everybody, including the women really wear fedoras?

I supposed the IPO will be launched, managed and underwritten by duly authorised representatives of a reputable newly incorporated Caribbean Building Society. 

I have a canoe full of non consecutive Vatu fiat waiting in the boat shed in payment for a large guaranteed allocation. I'm just waiting for a suitably sized catamaran to become available to be able to sail the down payment into the assigned berth at Breakwater.

S


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## Garpal Gumnut (14 November 2011)

From Stuart Washington, earlier this year in Business Day.


http://m.theage.com.au/business/storm-investors-accidental-legacy-20110508-1ee73.html?page=1




> Storm investors' accidental legacy
> STUART WASHINGTON May 09, 2011
> 
> STORM Financial's investors should be remembered for the service they have done for Australian investors. It's of little consolation to them, but Storm investors have left the Australian investing public an enduring legacy.
> ...




It is too too late for Storm investors, however their children and descendants may profit from tighter regulation on the adviser class in the future.

gg


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## Solly (15 November 2011)

> *"Storm founders put home under hammer*
> 
> Residents of Townsville will finally be given the chance to cut their ties with two former townsfolk who probably don't pop around much any more."




More by Colin Kruger @ www.theage.com.au


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## Frank Ainslie (15 November 2011)

_''’Must the greedy or the stupid always be indemnified by the taxpayer or the shareholder,'one letter writer to the Townsville Bulletin asked last month in an often-repeated sentiment.

This, of course, is a massive over-simplification.

There are laws in place to protect consumers from the unscrupulous and it would appear the banks have breached their banking code and contractual obligations and that financial advisers have not abided by laws dictating that advice is appropriate to the circumstances of their clients.” Storm Financial: Boulevard of broken dreams – TOWNSVILLE BULLETIN -TONY RAGGATT 26th December 2009_

Hello, Bunnyip, old chap! That remark quoted above sounds like one of your? 

We, Helen and I, really appreciate your concern but you are going to have a seizure if you keep this up. Let me put your mind at rest once and for all. 

Everything you say is absolutely true! Why didn’t Helen and I see it before? _“There are none so blind…”_ and all that! Where were you when we needed you most? 

We were just plain greedy! No question about it! What gave us away? Was it my whistling _“Money, money, money!”_ every time I contemplated the filthy lucre (shameful profit) we were making or was it the sumptuous lifestyle we were living at the time?

Go on, admit it! You had a peek at our Storm SOA, didn’t you? Which part gave you the clue?

_Page 13 of 107 entitled, “Your Present Position -  Personal Profile and Goals ... 

“From the information you have supplied to us, we know that Frank you are 65 years of age, and Helen you are 60 years of age. Together you run your company PHAF Holdings Pty Ltd that operates the shopping centre "Smith Road Village". Helen, you also have your own company, Gillies Management 
Pty Ltd, which operates a Laundromat located in Smith Road Village. You are currently both planning to sell your businesses and embrace retirement in the coming months. _

_You have asked our advice on the best ways to continue your wealth building over the next 5 to 7 years. Important financial goals for the future include building a solid capital base that will aid your wealth creation with a view of purchasing of a new vehicle, traveling, and maintaining a comfortable lifestyle as you prepare for your retirement in the short term. It is therefore a major aim to produce a portfolio of assets that will result in an income stream independent of your personal exertion work…._

_Page 79 of 107 Your Investment Timeframe 

During our discussions, you have indicated that you initially wish to consider wealth creation to cover your immediate living needs and continue the growth of your assets to produce an income for now and over the next ten-year period. We have discussed this time frame and have explained that our recommendations need a minimum of a five-year time horizon due to the nature of the investments required to meet your goals. An Investment may be profitable within shorter or longer time horizons depending on which part of the economic cycle prevails at the start of your Investment. 

However, it is our advice to you that the longer time horizon will allow you to ride out whatever volatility the market presents and still allows for a profit to be generated. 

The building of wealth is a journey - it is not a single event. We anticipate that 
implementation of these Recommendations is the beginning of a process that will endure for the rest of your lifetime. However, it is reasonable to expect to begin to enjoy the proceeds of the Investment well before your lifetime is over! Before proceeding with implementing this Plan, it is important that you understand that a minimum of 5 to 7 years is required before you can expect to be spending from the profits of the Investment. “_

You picked it, Bunnyip! We only agreed with Storm’s 5 to 7 years plan to hide our true intentions. We were really looking for a result within 15 months! Storm certainly delivered on that one! We knew that if someone like you came snooping around though with your nose for the truth, the game would be up! My fault!  I shouldn't have left the incriminating evidence lying around.

Yes, we must admit that when we walked into Storm’s Brisbane Office and were asked what we wanted, I couldn’t help myself._ “The sky’s the limit baby!”  “Let’s go for broke, Helen!”, “Let’s live on the edge!”, “You can’t take it with you!”, “I want the money NOW!  NOW!  NOW!” _ I even wanted to take a pile of money to bed with me at one stage but Helen thought that was going too far!

Sorry! I’m getting a little carried away here! Money does that to people. Greed is a terrible thing!

You, of course, would have spotted at once that Storm had a gambling problem. We admit that we knew this when we agreed to sign up with Storm. After all, we were imbued with the same curse._ “Let it ride baby!”_  Besides, we’re too young to care! What’s a million or two to us, I could always sell my body on the streets if the right numbers didn’t come up! Ahh, It only seems yesterday that I walked along that boulevard wondering what the poor people were doing. Now I’m wandering along that same boulevard wondering what the rich people are doing. 

_“Now I know Centrelink is around here somewhere!”_

Now that Helen and I have confessed, does this finally make you happy! If so, get on with your life my friend. It’s just not worth it!  You have certainly earned a break after such a concerted effort. Go out with SJG1974 (good year, that!) and have a drink together. You’re in good company. You never know! You might like one another! You seem to have a lot in common. You can mull over whom next to expose on this forum. There are plenty of suspicious characters if you ask me

We, Helen and I, in the meantime will place ourselves in the _“unworthy basket” _for all to see, and you can point out to everyone that you were right and we were wrong. Will this do? 

One thing though! We’re hoping to hide ourselves among the real victims. Therefore, please do me a favour and don’t mention this to Stuart Levitt, our lawyer. He doesn’t have your mental sagacity for spotting the obvious. The poor fool thinks we too have a very strong case, and I don’t want to disillusion the man. 

_“Now I ask you, Frank, do you really think you were circumspect in your dealings with Storm?”_

I’m off now to look up ‘CIRCUMSPECT’ in the dictionary I thought it was the same as ‘CIRCUMCISED’ but never mind! 

_“…do you really think you were circumcised in your dealings with Storm?” It doesn’t sound quite right somehow, does it, but it more aptly describes the experience!_

_“…prudent and astute?" _Nah! It’s that greed factor again. We were blinded by the money! _“Money, money, money…it’s now a poor man’s world!”_ We had this childish belief that our money was in safe hands. We would be (1) protected under the Corporations Act, (2) Storm had professional indemnity insurance, (3) Storm’s financial strategy was sound, (4) our Storm financial adviser had considered our individual circumstances and tailored our financial plan accordingly, and (5) our former Storm financial adviser was telling us the truth. I could go on but these are just flimsy excuses at best. Unlike you, we are not “A’ students in English so we didn’t know where to go to look up Storm’s past crimes! 

One last thing! I was as poor as a church mouse when I met Helen. https://sites.google.com/site/stormingonbanks/home/our-staff/nothing-is-written-until-you-write-it

The money and assets all belonged to her. She wanted to leave a legacy for her children and grandchildren that would last well after we’ve gone. I’ve been in business a long time and I’ve never been an advocate of _“putting all your eggs in on basket”_. Besides, I knew nothing about investing and was always a great believer that one should always be on top of whatever one gets involved with.  However, having said that, I, myself, felt reasonably comfortable with the Storm plan because we already had a lot of money, were debt free, and we were assured that safeguards were in place to protect what we had. 

It may seem very foolish to everyone now but it’s easy to be wise after the event.  At the time the principle of investing on a broad front sounded feasible enough. People tend to forget that *IF* Storm and the Banks had acted responsibly, we would have lost a lot of money but we would have survived. The issues now are about *WHY THEY* didn’t act responsibly. *OUR WHY* should therefore not be an issue although you still seem determined to make it one?

Every investor that employs a financial adviser deserves the same treatment, whether that investor be rich or of average means. The fact that 75% of the people that lost all their money in Storm were approaching or past retirement age should tell you that they were _“low risk”_ candidates that were looking for secure investments. They could have had a collective brain meltdown, no question, but I think that’s highly unlikely. Don’t you? 

As I said before, _“There are none so blind…”_

Now remember, Bunnyip and SJG1974 for that matter, we have confessed to our sins so you can get on with your life and not worry about us any more. We don’t wish to stress you any further! Breath deeply and think about your days when you were an ‘A’ student in English. How can I or anyone else compete with that?

Have a good day and try not to worry so much!


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## SJG1974 (15 November 2011)

You just can't stay away can you Frank?

Yes your adviser screwed you with inappropriate advice, yes Storm didn't do what they said they would, yes the banks were involved, yes laws may have been broken....blah blah blah. Noone is arguing with any of that Frank. But the other party to this mess who seems to have escaped any criticism from you is the most important one of all....YOU!! 

If YOU had have been more diligent with YOUR life savings Frank, the life savings YOU and Helen had worked YOUR buts off to build, then YOU would just be another interested onlooker in this whole disaster, and not caught in the middle of it.

The question that has been asked of YOU all along remains unanswered:

Why, when YOU had well over $1,000,000 of investable assets and only wanted $45,000 per annum to enjoy a comfortable retirement (thats only 4.5% of $1,000,000, considerably less if you had over $1,000,000 by my calculations), did YOU see the need to risk it all by undertaking an incredibly high risk strategy that YOU clearly did not understand? It was YOUR money Frank, and YOU just blindly handed it over because a guy with qualifications told you to?

WHY??????????????????????????????????


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## Frank Ainslie (15 November 2011)

SJG1974 said:


> You just can't stay away can you Frank?
> 
> Yes your adviser screwed you with inappropriate advice, yes Storm didn't do what they said they would, yes the banks were involved, yes laws may have been broken....blah blah blah. Noone is arguing with any of that Frank. But the other party to this mess who seems to have escaped any criticism from you is the most important one of all....YOU!!
> 
> ...




Hello SIG1974!

I thought you would be popping up sooner or later.

I’m glad you agree that _“your adviser screwed you with inappropriate advice, yes Storm didn't do what they said they would, yes the banks were involved, yes laws may have been broken....blah blah blah. No one is arguing with any of that Frank.”_

We have some common ground at last. As for the rest, I think I’ve given you our reasons already. There are some people that will never change their opinion of us on this forum! You and Bunnyip are just two such people.

Quite frankly, Helen and I don’t really care what you, Bunnyip or anyone else feels about us. It’s unimportant in the scheme of things. It’s not going to alter our lives dramatically one way or the other!

You have both expressed your feelings here on this forum. You’ve left no one in any doubt so why keep on repeating the same old thing over and over? Why should it be any concern of yours anyway? Whatever decisions we have made, we have to live with – you don’t!

Incidentally, there were many people that invested in Storm that had more than we did in assets. I guess they can be thrown away too?

_“Ah, well! Such is life” _Ned Kelly said just before they hanged him. Now that you want to hang us, I don’t think I can improve too much on his last words.


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## doobsy (15 November 2011)

I would have thought that part of helping others would be explaining how Storm managed to convince you to invest Frank. Explain that to others so they can learn from your experience and avoid the next version of Storm which will inevitably show up during the next bull market.

People are bombarded with offers and deals and told they have to make their money work harder every day. Tell people how to avoid the traps that you unfortunately fell into. You have done an excellent job of telling people about the pitfalls that can and do occur when you borrow and the banks change the rules but the forum is interested in why you invested with Storm so that maybe the next time we are all at a BBQ and someone starts talking about some foolproof strategy that a maverick is convincing them can't fail we can all see the signs and maybe steer them away from being ripped off also.

I am interested from a professional point of view. I notice that there is talk of "continuing to grow the assets". Was that the difference? You could get your income conservatively but not "grow your assets" for the next generation? A noble cause but one that resulted in the loss of your capital so help others out and please do explain why YOU felt Storm was the right investment strategy for you. I can accept others on this forum saying they didn't understand, I can accept some saying they took a punt and it didn't work out so they are back re-building as I type. Was that the case for you Frank or was it a combination.

I think everyone agrees and the conversation is over that the banks have a level of blame whether it be inappropriate lending or failure to trigger margin calls or high LVR's or whatever, the next step as I see it is getting forum readers to understand how Storm managed to create the cult in the first place and that can only come from Storm investors telling us why they not only chose the company but also why when it came to the push that they accepted the advice. We weren't there so we can't understand without an explanation.

Maybe it was the soft cheeses at head office, maybe it was the gold plated urinals, maybe it was the big "group hug" culture of the place, maybe they made clients feel dumb or bad if they didn't proceed after 6 months of "education", maybe Manny was a better salesman that we know.The forum is interested.


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## Julia (15 November 2011)

Frank Ainslie said:


> The building of wealth is a journey - it is not a single event. We anticipate that
> implementation of these Recommendations is the beginning of a process that will endure for the rest of your lifetime. However, it is reasonable to expect to begin to enjoy the proceeds of the Investment well before your lifetime is over! Before proceeding with implementing this Plan, it is important that you understand that a minimum of 5 to 7 years is required before you can expect to be spending from the profits of the Investment. “




From the above Storm blurb:; " *However, it is reasonable to expect to begin to enjoy the proceeds of the Investment well before your lifetime is over!*"

That's such a comfort, huh.  This to people in their mid 60"s????

To accept a 'plan' that tells you not to expect any earnings for five to seven years, when such a period might be all you have left, is what I can't comprehend.


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## Frank Ainslie (15 November 2011)

*Our reasons why!*

Doobsy (and others) have asked me to explain why we signed up with Storm Financial in the first place. 

In late 2006 when our shopping center was on the market, we started to look around for suitable investments that would ensure that any capital we had would not erode away over time. Our two prime objects at that time were (1) to ensure that our assets would be secure and (2) that they would appreciate over time.  

We looked at a number of options. Allocated pension plans were considered. So was putting our money in the Bank and just living off the interest. However, with inflation and lack of growth, we thought that these were not viable options in the long term. 

We then started looking around for investment advice.That’s when Storm Financial was recommended to us by some friends of ours. They had been with Storm for some years and their investments had shown considerable growth during that time.

Now, before we joined Storm, I did a ‘Google’ search which failed to produce any adverse comments about Storm. It should be bourne in mind that the Storm Financial of today was not the Storm Financial that we signed up with in 2007. What we know about Storm today, we did not know then or we and many others would have had nothing to do with that firm. 

Storm at that time had a track record, were leaders in their field, had a considerable data base of clients, employed qualified financial advisers, were backed by some of the major banks in this country, and had an impressive infra-structure. There was nothing to suggest to us at the time that there was something untoward about the way they operated.

Storm certainly projected an image of success and efficiency. When one walked into Storm’s Brisbane office, the number of people sitting at their computer consuls instilled in one’s mind that they had everything under control and our investments were in safe hands. 

The financial plan they sold to us did seem to make sense – liquefy our assets and invest the capital from such in the market place. Even their idea of taking out housing loans and margin loans for investment purposes seemed to have some merit. 

_“Page 39 of 107 stormfinancial 
Discipline 

Borrowing to Invest 

Recall that the primary purpose of investing is to derive an income from a source that does not involve your personal exertion. This is made possible by having your capital base working for you. Different people will have different levels of income they desire. They will also have different amounts of time available for the investment process, and different capacities to access capital. Each investor is in different circumstances, and must have an investment plan custom- made to reflect their own wishes and limitations. 

However, we can generalize to a certain extent about the role of borrowings within an investment plan. If people are to be freed from the need for income from their personal exertion, then their income must come from capital. The amount of income desired or required will be determined by their lifestyle and choices. The amount of income that is possible to earn from the capital base is determined in large part by the size of the capital base. Many clients find that the income and growth that is possible to achieve with the capital base they possess is inadequate to fulfill their wishes. In that case, the capital base can be increased in order to raise the potential for income and growth..."_

Helen and I always thought that we could repay any loans in this regard because we already had enough capital to cover all contingencies, or so we thought. Further, the Storm approach was not unique as some other financial advisory firms were also giving out the same advice.

One should also remember that we sought advice from Storm because we had no investment knowledge ourselves. Therefore, we relied solely on Storm to give us the best advice available. We paid them a considerable amount in fees for doing so. Further, we had Storm’s assurances that it had built-in protections, had sufficient and effective professional indemnity insurance, was governed by regulatory laws, and was ASIC compliant. This impression was reinforced by the support of some major banks and the asset base of the Cassimatises which was reputed to be some $450 million 

One must also remember that in 2007 when we joined, Storm was on an acquisition binge. It had bought a planning group in Melbourne, then expanded across Queensland into Brisbane, the Gold Coast and Sydney. It snapped up 10 companies in March alone. These acquisitions amounted to $32.9 million. We had no reason therefore to suspect that Storm was anything but what they professed to be. It didn’t sound to us like a company in trouble. Rather, this instilled in us confidence that Storm Financial was solid. 

We were told by Storm that we could draw off $100,000 per year in “living expenses” from what our share portfolio would produce for us. This was better than the 7% we were offered by the Banks at that time on one million dollars which we received for our shopping centre. But more importantly, our capital would grow over time rather than reduce as it would in a bank. In other words, Storm told us that we would make more than enough to cover all the debt we had signed up for and still have enough ($8000 per month) for our immediate needs. Our capital would be safe and our investments would increase over the course of time. The figure mentioned in the Court of $45,000 was an amount we were living on prior to our selling the shopping centre and joining Storm.

We were shown numerous projections on Storm's software system that seemed to bear out these claims. We were told that these were conservative estimates based on all outlays for housing and margin loan interest payments and Storm’s fees. Our asset base would grow rather than decrease and they would monitor our investment portfolios every step of the way. 

At the time our financial adviser knew he would have to give us a far better return than any Bank could do ($70,000 at that time), and he set out to make us believe that the figures presented were logical and genuine. Unbeknown to us, he turned our _“low risk”_ request into a _“high-risk”_ strategy for his own ends, and he is now paying the price like us.

Before we signed up I asked him to state in writing that the trigger-points were in place as claimed to protect our investments. I have written proof that he lied to us in this regard as well. 

Doobsy:

_*1 How did Storm manage to convince us to invest?*_
Because it appeared that they were offering a safe harbour for our money and sustained growth over 7 to 10 years. These were our two prime reasons for signing with Storm. 

_*2. How can people avoid the traps that we fell into.* _
With great difficulty because people with little or no experience of a particular field such as investing rely on professionals for advice. Some have said that people need to educate themselves before considering going to professionals. Whilst there is some truth in this, I also believe that investors need more protection. New regulations have been introduced since the Storm collapse but they do not go far enough.  Unless the financial advisory sector is willing to lean the lessons of Storm and do something to eradicate the _“bad eggs”_ they’ll always be another Storm waiting around the corner.

_*3. "...someone starts talking about some foolproof strategy that a maverick is convincing them can't fail we can all see the signs and maybe steer them away from being ripped off also."*_

The new Financial Planners Association (FPA) television adverts clearly state that if you are looking for a Financial Adviser then you should make sure that they are a FPA member. That's when you can be assured you are receiving the best professional advice at the highest standards.

Storm Financial services was a member of the FPA. The FPA took no compliance reviews of Storm while they were a member and only acted after the collapse of the business. The full extent of their action was to then fine Storm $20,000. The fine was never paid. 

A professional body should not only hold their members to a higher level, but they should also audit their members. Therefore, the advert is totally misleading!

If you don't want people to listen to cowboys, get rid of the cowboys. In order to do this, your industry needs an overseeing body. The FPA cannot do the job because it is a toothless tiger just like ASIC. You need a body that conducts audits and monitors its members on a regular basis. Clearly the FPA is not designed or geared to do this and its role is therefore merely window dressing.

*4. "I notice that there is talk of "continuing to grow the assets". Was that the difference?"*
Yes, most certainly. I have already elaborated on this in my previous remarks.

_*5. How did Storm managed to create the cult in the first place?*_ 
By being successful although it seems strange saying this now. In a market that was going up over a sustained period of time, Storm’s strategy took on some legitimacy. The Banks were early converts in this regard. The in-built problem with Storm’s approach though was that it was only designed to work in the good times and Storm didn’t build in any exit plan. 

We, of course, invested in Storm, blissfully unaware that their were forces in play that would ultimately come together to cause a gigantic meltdown. People in the financial sector may have looked on enviously at what Storm was achieving and they may have had some misgivings. However, they didn’t come out and condemn Storm publicly. If someone had, a few might have been warned in time.


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## Solly (15 November 2011)

For those interested;

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Wednesday, 16 November 2011

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000

Justice Reeves Court No. 1, Level 7

10:15 AM Directions

1 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

Directions & Interlocutory Hearing

2 NSD811/2010 LESLIE JAMES SHERWOOD & ORS v COMMONWEALTH BANK OF AUSTRALIA & ANOR

3 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED


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## Solly (15 November 2011)

Garpal Gumnut said:


> I would prefer not to answer on a public forum
> 
> I do however have a software program called Wind-Ignite.
> 
> ...




GG

Looks like the Melton auction is now, Sat 19-Nov-11 11:00AM.

Will you be taking Byrnsie to the Ross Island for a drink afterwards ?

S


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## doobsy (15 November 2011)

Thanks Frank

I think that background actually will give many on here a bit more "understanding".

Comments from the darkside. Most people do not understand investments and superannuation. Decent research for the average joe to gain an understanding of this is difficult and time consuming, a luxury few people have.

I appreciate the toothless tiger comments but I will again say that unfortunately in any industry, those who are looking to rip off clients will fly under the radar and find loopholes. Planners around NQ being on the front line and seeing Storm from the early days did send in reports to all parties (ASIC, FPA) questioning certain practices but in a bull market the strategy worked. Hard to prosecute someone for making clients money. It was never known or understood that they could never cope when the markets turned and they got thousands of margin calls all at once. Apparently neither could the bank.

The point I was trying to prove asking my questions and the point you confirmed is that the sales pitch was slick, the logic tested and the answers to questions by clients provided to advisers to make sure the sale went through. They were dogged, if a client baulked, it just meant they needed more time, more evidence. 

The worst part of the whole thing is that the fee grab meant that you ended up 200% exposed to Australian Shares. Contributions to super, an allocated pension with 25-40% share exposure would probably have modelled exactly the same and provided a sustainable $100K pa. You would be down $200K and would not have sold a single share.

I think others on the forum need to understand that clients will believe what planners say. The only advice I can give is to meet with at least 2-3 planners and try to get a feel for what strategies they feel are appropriate. This might be hard depending on whether the planners charge for their time.

Frank, again I think that has added considerable value.


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## Julia (15 November 2011)

Frank Ainslie said:


> We then started looking around for investment advice.That’s when Storm Financial was recommended to us by some friends of ours. They had been with Storm for some years and their investments had shown considerable growth during that time.



Considering there was a strong bull market at the time, it's difficult to understand why you would give credit to Storm for this growth.
Surely you were aware of how the market had been growing when you consulted Storm???



> Helen and I always thought that we could repay any loans in this regard because we already had enough capital to cover all contingencies, or so we thought.



Either you could or you couldn't.  Not too hard to do the basic sums.


> Further, we had Storm’s assurances that it had built-in protections, had sufficient and effective professional indemnity insurance,



So did you quantify that indemnity insurance?  i.e. find out the total number of clients, know what the total capital invested was of all these clients, and then determine that the indemnity insurance would absolutely cover you in the face of the firm failing?  ???



> One must also remember that in 2007 when we joined, Storm was on an acquisition binge. It had bought a planning group in Melbourne, then expanded across Queensland into Brisbane, the Gold Coast and Sydney. It snapped up 10 companies in March alone. These acquisitions amounted to $32.9 million.



So what?  Before it failed so spectacularly, ABC Learning also went on a massive acquisition binge.  What makes you think this is an indicator of a well managed company?



> We had no reason therefore to suspect that Storm was anything but what they professed to be. It didn’t sound to us like a company in trouble. Rather, this instilled in us confidence that Storm Financial was solid.



Really?




> We were told by Storm that we could draw off $100,000 per year in “living expenses” from what our share portfolio would produce for us



Hold on a moment:  earlier you told us that they'd informed you not to expect any profits or capacity to draw an income for five to seven years.  
You are directly contradicting yourself here.

Further, did you have them explain how exactly this $100K p.a. would be derived, i.e. X amount will come from growth of your capital, X amount will come from dividends, and X amount will come from franking credits?

If so, (and I rather doubt that you would have) how could you have felt assured of the growth factor?  Or the dividend yield for that matter?




> This was better than the 7% we were offered by the Banks at that time on one million dollars which we received for our shopping centre. But more importantly, our capital would grow over time rather than reduce as it would in a bank. In other words, Storm told us that we would make more than enough to cover all the debt we had signed up for and still have enough ($8000 per month) for our immediate needs.



$8000 per month?  I thought you said you only had an expectation of $45,000 p.a.?
Can't help wondering what you'd feel obliged to spend $8000 per month on in retirement.   Yet another contradiction.



> New regulations have been introduced since the Storm collapse but they do not go far enough.



Disagree entirely.  If the nanny state continues to increase at the same exponential rate, we will all soon be told when we may take a breath.


> Unless the financial advisory sector is willing to lean the lessons of Storm and do something to eradicate the _“bad eggs”_ they’ll always be another Storm waiting around the corner.



It doesn't matter how much regulation you have, there will always be scammers able to find a way round it.  We should not over-regulate the thinking population in an attempt to safeguard those who want to have their hands held every minute.



> The new Financial Planners Association (FPA) television adverts clearly state that if you are looking for a Financial Adviser then you should make sure that they are a FPA member. That's when you can be assured you are receiving the best professional advice at the highest standards.
> 
> Storm Financial services was a member of the FPA. The FPA took no compliance reviews of Storm while they were a member and only acted after the collapse of the business. The full extent of their action was to then fine Storm $20,000. The fine was never paid.



This is an entirely justified complaint imo.  But it was ever thus.  Belonging to an industry's overseeing body is absolutely no guarantee of that firm's ethics.  Most of it is window dressing.  Never depend on a professional body offering any guarantee of ethical behaviour.


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## Julia (15 November 2011)

doobsy said:


> Comments from the darkside. Most people do not understand investments and superannuation. Decent research for the average joe to gain an understanding of this is difficult and time consuming, a luxury few people have.



With respect doobsy, I disagree entirely.  There is everything an investor needs to know available in this technological age.  It's simply a matter of spending a bit of time acquiring financial literacy.

It does, of course, make sense for you - as a financial adviser - to promote the idea that people need 'expert help'.  Nothing wrong with that.  You're in business to make a living, and I'm sure you provide genuine assistance to many clients.

But I hold that it's simply wrong to suggest that it's beyond your average Australian to understand superannuation or to acquire financial literacy plus an understanding of how the market works.


----------



## Garpal Gumnut (16 November 2011)

Solly said:


> GG
> 
> Looks like the Melton auction is now, Sat 19-Nov-11 11:00AM.
> 
> ...




There are unfortunately too many pubs and clubs, of both low and high repute between Melton and the Ross Island, and I am unsure where Byrnsie and I will find land. 

With the best of intentions, having found a mug or buyer or both or none for such an indecent pile, as Casa Cassimatis, Byrnsie may be in need of something to calm him down.

I may take a shortcut through the Cathedral and say a prayer for the Storm victims, before having the first cold one in the North Queensland Club, I have that august hole as a member of my clubs of first resort after matins of a Sunday.

gg


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## SJG1974 (16 November 2011)

Frank Ainslie said:


> *Our reasons why!*
> 
> Doobsy (and others) have asked me to explain why we signed up with Storm Financial in the first place.
> 
> ...




Glad you finally answered Frank. Perhaps I should have posted as Doobsy to get you to answer my questions...

I think it is fair to conclude that, based on the above, the reasons you went with Storm were a combination of greed, naivety and gullibility....areas which you have seemed determined to deny any responsibility for in your posts.

*Greed*- chasing returns that would give you more than the bank or an allocated pension, particularly given that you could have met your income needs by simply putting your money in the bank.

*Naivety*- having an objective of ensuring your assets were secure, and then double gearing them into the sharemarket.

*Gullibility*- believing what Storm told you without doing any independent research yourself, and accepting what they told you on face value, even though you obviously did not have any idea of the risks you were taking, or understand the strategy.

I am sure you aren't the only Storm investor who the above applied to. A harsh lesson learned Im afraid.

However, unlike you, there seem to be many other Storm investors taking responsibility for the role they played in their own demise, rather than taking no responsibility at all and placing 100% of the blame with third parties.


----------



## Julia (16 November 2011)

SJG1974 said:


> However, unlike you, there seem to be many other Storm investors taking responsibility for the role they played in their own demise, rather than taking no responsibility at all and placing 100% of the blame with third parties.



Yes, and some of these people have further taken responsibility to become financially literate.  They're the people who will recover well and move on.   To be determined to remain a victim is just counterproductive.


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## bunyip (16 November 2011)

SJG1974 said:


> Glad you finally answered Frank. Perhaps I should have posted as Doobsy to get you to answer my questions...
> 
> I think it is fair to conclude that, based on the above, the reasons you went with Storm were a combination of greed, naivety and gullibility....areas which you have seemed determined to deny any responsibility for in your posts.
> 
> ...




Frank

I’m sure it galls you to hear it, but SJG is right in what he says above. 

A few days ago I told you that Storm dangled a nice juicy carrot in front of you, dressed it up as sound financial advice, and made it look so financially attractive that you grabbed it with both hands without even bothering to subject their strategy to proper scrutiny.
Your posts of the last couple of days have confirmed that this is in fact what happened.

You were only looking for a modest 45 grand a year in retirement ($3750 a month), but Storm told you they could get you 96 grand a year ($8000 a month) if you mortgaged your home, took out a margin loan, then double geared on top of that, and sank the whole lot into one basket called the stock market. 

You hide behind the excuse that you knew nothing about investment. Yet you had a substantial investment in your shopping center, and I’ll hazard a guess that you would have parked some funds in term deposits at times, also that you would have bought a house or two over the years. These are all investments, are they not?

You could have easily achieved a substantially higher income than your desired 45 grand a year, simply by splitting your capital three ways between cash deposits, residential real estate, and high yielding blue chip shares. 
Such a strategy may not have achieved the 8 grand a month that Storm dangled under your nose, but it would have easily outdone the 45 grand a year that you wanted, it would given you diversification, and it would have produced capital growth to protect your investment from the ravages of inflation.
And all this without borrowing a single dollar, without putting all your eggs in one risky basket, and without paying an outlandish upfront fee of 7% to some bushranger sitting in a plush Townsville office.

But wait – you’ve told us you didn’t have sophisticated investment knowledge. So how could you possibly have come up with the simple conservative strategy that I’ve outlined above?
Tell me, how much sophisticated investment knowledge do you need to buy a few houses in a growth area, or to talk to a bank about term deposits, or to consult a stockbroker to find some well-regarded blue chip companies with a track record of paying decent dividends and producing capital growth? 
You and Harleyquin greatly over-estimate the degree of sophistication and knowledge you need to implement a simple self-managed investment portfolio.

And other point – if you’ve spent 50 or 60 years living in our commercial world but in that time have failed to learn the basics about investment and finance, then I wonder whose fault that is??!! It’s not as if you didn’t have plenty of opportunities to learn some basic skills and knowledge in this area.

You took a wild, reckless gamble - you lost. 
Admit your mistake, take responsiility for your errors of judgement, stop trying to convince everyone you were astute and circumspect, and move on.


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## bunyip (16 November 2011)

Julia said:


> With respect doobsy, I disagree entirely.  There is everything an investor needs to know available in this technological age.  It's simply a matter of spending a bit of time acquiring financial literacy.
> 
> It does, of course, make sense for you - as a financial adviser - to promote the idea that people need 'expert help'.  Nothing wrong with that.  You're in business to make a living, and I'm sure you provide genuine assistance to many clients.
> 
> But I hold that it's simply wrong to suggest that it's beyond your average Australian to understand superannuation or to acquire financial literacy plus an understanding of how the market works.




I absolutely agree. There’s a wealth of information freely available to anyone who wants to lean the basics of investment and finance.
All we have to do is get off our backsides and take advantage of it.

In this day and age in a country like Australia, there are no excuses for anyone to live for half a century or more and yet have virtually zero finance and investment knowledge.


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## Frank Ainslie (16 November 2011)

Julia said:


> Considering there was a strong bull market at the time, it's difficult to understand why you would give credit to Storm for this growth.
> Surely you were aware of how the market had been growing when you consulted Storm???
> 
> 
> ...




Julia,

_“Considering there was a strong bull market at the time, it's difficult to understand why you would give credit to Storm for this growth.

Surely you were aware of how the market had been growing when you consulted Storm?”_

You obviously pride yourself on being rather more astute than the average investor. I have no doubt that you are just that. However, it is unwise to judge everyone by the standards you set for yourself. Investors come in many guises and from different backgrounds. A study conducted by England's Financial Services Authority (FSA) in 2004 called "Consumer Understanding Of Financial Risk" has shed some light on how well people understand their investments. This can be found at: http://www.investopedia.com/articles/07/UnderstandRisk.asp#axzz1doQVDhVt

Based on this study you would probably fall into the category of a “Controller”. _“Controllers are often experienced investors who rely on their own understanding and make their own decisions.” Controllers are sophisticated investors (or at least think they are!) and prefer to take charge of the investing process. They are very interested in the financial sector and have a good understanding of both products and markets. They are aware of and understand the array of products that are available and they know what they want. They also spend a considerable amount of time researching products and markets, and they actively send off for financial statements, buy the latest books, and even attend investment seminars and conferences. This does not necessarily make them risk friendly, but they understand risk and know how to construct an optimal portfolio. Such investors often purchase on execution only, which means that they don't seek an advisor's advice.

With respect to controllers who think they are sophisticated, there are certainly those who ought to delegate more of their investing tasks to a professional. Investors who seriously overestimate their knowledge or abilities can get into trouble.”_

Based on this, I guess we would call you a _"sophisticated investor"_. Yet, you too could get into trouble if you assume that you know everything and therefore don’t bother to look beneath the surface. Take for instance your remarks about professional indemnity insurance. You simplify this by stating, _“So did you quantify that indemnity insurance? i.e. find out the total number of clients, know what the total capital invested was of all these clients, and then determine that the indemnity insurance would absolutely cover you in the face of the firm failing? _

Certainly, Storm didn’t have enough insurance cover in dollar terms, but this was NOT the reason that Storm’s professional indemnity insurance offered no protection to Storm’s clients. In other words, there are gaps even in your knowledge. Therefore, no amount of investigating on your part of a financial adviser’s professional indemnity insurance cover would have enabled you to spot the fatal flaw unless you knew what you were looking for! In this particular aspect, you could therefore be termed an “unsophisticated investor”. You will therefore appreciate that no particular person can know everything! The point is that with regard to professional indemnity insurance, I would not expect you to know what many in the industry do not! You can see now why assuming  is a dangerous thing!

As for most of your other remarks, you are commenting after the event when it is easy to be wise. The collapse of the ABC learning centers for instance was still on the horizon when we joined Storm!

In the article I have previously mentioned, it also states that _‘Education’_ and _‘Financial Sophistication’_ Are Not the Same Thing

_“It is important to note that general or even business education doesn't necessarily translate into specific knowledge about the world of investment. A business graduate is certainly likely to know something about investments, but this knowledge may be very theoretical and, therefore, less applicable to the graduate's own experiences. Conversely, a doctor who happens to be very interested in getting the most "bang for his buck" on his investments may turn out to have a relatively sophisticated understanding of investing. Likewise, retired people with no formal financial education or qualifications may spend hours pouring over the financial pages of the newspaper every day. In this case, they may know more than their advisors about day-to-day developments.”_

I, myself, had to be knowledgeable in financial accounting in order to manage companies where interpreting _‘balance sheets’_ and _‘profit and loss statements’_ was essential. I am also a trained book-keeper (I had to be to do the books for our various businesses), but this demands a different form of expertise. Many in Storm were business sophisticates in their own right having operated small businesses and the like all their lives. Therefore, to write all ‘_Stormies’ _off as simpletons is not realistic or accurate.

You stated that I misled you when I mentioned a figure of $45,000 earlier. The figure of $45,000 emanated from a Court document and a Media article. We are not responsible for what others write about us. 

Think about it! We were retirees, not retards. Why would we invest through Storm unless we could get a good return (or so we thought) for our money. One uses a tax agent so one can reduce one’s tax to the minimum. The principle is no different!

Doobsy works in the market place and therefore has an understanding of the differing nature of investors. I would tend to give him the benefit of the doubt in this instance!


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## doobsy (16 November 2011)

Insights from the darkside. I would say for over 50% of the ppl i see one of the first things i need to do is explain super is a tax structure where you have the same investment choices as investing outside in personal names. This misunderstanding may be apathy it may be age based whatever. Time is an issue. I have wanted to learn Spanish for 12 months but running a business, having a six month old i adore, trying to stay in shape and have some sort of social interactions means i havent found the time. I think for many ppl investing is like this. It gets put back behind other things because life gets in the way. 

The other point is unless you are retired or unemployed you do not have the time to stay up to date with markets, strategies, technical points and govts changing laws. Ppl need an expert. Even if sometimes it is simply to tell them nothing has changed and to keep doing what they are doing.


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## Julia (16 November 2011)

Frank Ainslie said:


> Julia,
> 
> _“Considering there was a strong bull market at the time, it's difficult to understand why you would give credit to Storm for this growth.
> 
> ...



On the contrary:  I have no special skills, neither did I receive any education in financial matters.  But since being left without a home, a job or any money after leaving a marriage in my mid 30's I  realised I needed to understand how to make some money with relative safety.




> Investors come in many guises and from different backgrounds. A study conducted by England's Financial Services Authority (FSA) in 2004 called "Consumer Understanding Of Financial Risk" has shed some light on how well people understand their investments. This can be found at: http://www.investopedia.com/articles/07/UnderstandRisk.asp#axzz1doQVDhVt



Oh, please.  If you are going to relegate people to their place amongst the quite uneducated and across the full sphere of intelligence levels, probably all of the posters on this forum would be considered  of exceptional capacity in terms of understanding investment, yourself included.




> Based on this study you would probably fall into the category of a “Controller”. _“Controllers are often experienced investors who rely on their own understanding and make their own decisions.”_



_
For god's sake, spare me the trite and banal labels.
Like many others here, I'm just someone who has attempted to acquire a basic level of financial literacy, enough to protect myself against shonky operators and understand risk management.




			The collapse of the ABC learning centers for instance was still on the horizon when we joined Storm!
		
Click to expand...


If you'd taken a five second look, you'd have quickly seen that they were drowning under a mountain of debt.  Did you ask Storm about their balance sheet/debt levels?
If so, what evidence did you insist on?




			In the article I have previously mentioned, it also states that ‘Education’ and ‘Financial Sophistication’ Are Not the Same Thing
		
Click to expand...


I haven't bothered to read your article.  It's not relevant to this discussion.

In common parlance, a definition of a 'sophisticated investor' is usually one with a defined net worth:  from Investopaedia fyi:




			For certain purposes, net worth and income restrictions must be met before a person can be classified a sophisticated investor. The distinction makes an investor eligible to buy into certain investment opportunities, such as pre-IPO securities, that are considered "non-disclosure" or "non-prospectus" issues. Typically, a sophisticated investor must have either a net worth of $2.5 million or have earned more than $250,000 in the past two years to qualify.
		
Click to expand...



I'm not going to comment on my net worth, it's none of your business.  




			I, myself, had to be knowledgeable in financial accounting in order to manage companies where interpreting ‘balance sheets’ and ‘profit and loss statements’ was essential. I am also a trained book-keeper (I had to be to do the books for our various businesses), but this demands a different form of expertise. Many in Storm were business sophisticates in their own right having operated small businesses and the like all their lives. Therefore, to write all ‘Stormies’ off as simpletons is not realistic or accurate.
		
Click to expand...


Yet you still fell for the greed pitch.




			You stated that I misled you when I mentioned a figure of $45,000 earlier. The figure of $45,000 emanated from a Court document and a Media article. We are not responsible for what others write about us.
		
Click to expand...


I can't be bothered trawling through back pages, but you have, I'm quite sure, previously stated that you only wanted a modest income in retirement.
If you consider $8000 per month modest, then clearly you're living on a different planet from that on which most of us exist.




			Think about it! We were retirees, not retards. Why would we invest through Storm unless we could get a good return (or so we thought) for our money. One uses a tax agent so one can reduce one’s tax to the minimum. The principle is no different!
		
Click to expand...


Yet, as Bunyip has pointed out many times, you discarded any notion of reality, common sense and risk management




			Doobsy works in the market place and therefore has an understanding of the differing nature of investors. I would tend to give him the benefit of the doubt in this instance!
		
Click to expand...


On the one hand you describe yourself as smart, experienced and capable, and indeed to have acquired a reasonable net worth, one would imagine this to be the case.
Yet, on the other hand, you seek to paint yourself as a poor innocent victim, uneducated in financial matters, and an unwilling victim to the slaughter.

You can't have it both ways._


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## Julia (16 November 2011)

doobsy said:


> Insights from the darkside. I would say for over 50% of the ppl i see one of the first things i need to do is explain super is a tax structure where you have the same investment choices as investing outside in personal names. This misunderstanding may be apathy it may be age based whatever. Time is an issue. I have wanted to learn Spanish for 12 months but running a business, having a six month old i adore, trying to stay in shape and have some sort of social interactions means i havent found the time. I think for many ppl investing is like this. It gets put back behind other things because life gets in the way.
> 
> The other point is unless you are retired or unemployed you do not have the time to stay up to date with markets, strategies, technical points and govts changing laws. Ppl need an expert. Even if sometimes it is simply to tell them nothing has changed and to keep doing what they are doing.



We can always find time for what we consider a priority.  Personally, I'd say that taking care of your financial well being is every bit as important as keeping in shape in order to take care of your physical health.

It does not require massive inputs of time.  It just requires about half an hour a day of keeping abreast of the news, global and local, and subscribing to a couple of objective sources of financial news analysis.  Then a one-off self education course via the ASX website or that of an online broker, then an equally one-off reading of a couple of basic books, and you're on your way.

I don't buy this "no time to do it" stuff.  I have friends who are highly intelligent and well educated, successful in their chosen careers but who keep saying they have no time to educate themselves in basic financial literacy.  They say this as they sit for three hours over lunch, or describe a Sunday afternoon just 'going for a drive'.

In short, they prefer to whine about how "super is a con", failing even to grasp the basic fact that Super is simply a tax advantaged vehicle for holding assets, and acknowledge that they will enter retirement almost entirely dependent on the government age pension.

We all make our choices.  And we are where we are as a result of the choices we make.


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## Solly (17 November 2011)

Just a quick comment about apportioning blame. 

I can understand why some participants in this event are taking the position that complete blame lies elsewhere and not with them.

We shouldn't lose sight that there are current actions in progress to seek a remedy and that there may be subsequent related actions.

I believe that it could be detrimental to make any admission of fault that could be harmful to your position, especially in a public forum. 

S


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## Frank Ainslie (17 November 2011)

To Bunnyip, SIG1974 and Julia,

My reason for joining this forum has never been to justify why we and others invested using Storm as our financial advisers. I have merely explained our rationale because I have been asked to by people like Doobsy who seem to be genuinely interested. To others like yourselves, whatever I or other “Stormies” say will never be enough anyway and I realize this. Therefore my postings are not aimed at you but rather those that now operate within the financial sector and want to improve the way they do business. 

There is much to learn from the Storm debacle if people are willing to listen to those that were caught up in the Storm collapse and understand first hand what occurred. 

I believe this forum can be enlivened by constructive debate about some of the issues involved and the weaknesses that have been inherent in the financial advisory sector to date. By exploring some of these issues, we can also inform any would-be investors of the things to look out for that were not apparent to us at the time.

It would be easy to stay within the confines of my own group or within SICAG because it offers some safety from our detractors. However, I believe that by so doing, it achieves little because these are closed forums and those within are all, for the most part, people that will never invest again. Their minds are now forever closed because they have been deceived by those they thought they could trust. We need to get our message out to the public at large and this forum may be one way of doing this. 

Having said this, it is not my intention on this forum to belittle the financial advisory sector. I must admit that at times I do have the occasional _"dummy spit" _when I think about what has happened to us. However, I also know it would be foolish on my part to condemn all financial advisers for the wrongs of a few. Good financial advisers have a place in the scheme of things and they are beneficial to society. However, having stated this, it is apparent that their house needs to be put in order. 

Julia has said that she doesn’t think there is a need for more regulations. Obviously, she is at odds with this Government who has at long last recognized that there have been loopholes that have allowed _“cowboys”_ to flourish.  The Banks have dangled carrots to these advisers that have been detrimental to the investors involved - investors’ interests in such cases being secondary considerations. The principle of _“caveat emptor”_ (buyer beware) is a concept that Julia endorses, but it has no place in an industry where _“full disclosure” _is a must for unsuspecting investors. Indeed, Government regulations are based on this concept. 

Having said all this, financial advisers need to be able to operate in a workable environment where they are not bogged down by unnecessary paperwork and restrictions. They also need to make a decent living or there is no incentive for them to ply their trade. Hopefully, a balance can be struck whereby everyone is happy!

For my part, I do not have the time or inclination to go over old ground. Therefore I will not be answering any further posts that do not have something constructive to say. 

There is a window of opportunity here to delve into the reasons behind the Storm collapse and formulate a blueprint for anyone that is seeking to invest. Whether people on this forum wish to do this is entirely their prerogative. I am willing to invest my time with them in doing this, but I am not willing to waste any more of my time on people that only want to listen to themselves speak and have closed their minds to the views of others. It may give them some satisfaction but it’s leading nowhere fast.


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## Solly (17 November 2011)

Frank Ainslie said:


> To Bunnyip, SIG1974 and Julia,
> 
> My reason for joining this forum has never been to justify why we and others invested using Storm as our financial advisers. I have merely explained our rationale because I have been asked to by people like Doobsy who seem to be genuinely interested. To others like yourselves, whatever I or other “Stormies” say will never be enough anyway and I realize this. Therefore my postings are not aimed at you but rather those that now operate within the financial sector and want to improve the way they do business.
> 
> ...




Hi Frank

I appreciate that you are posting here under your own name and putting forward your opinions for discussion and sometimes ridicule and dissection.

I am pleased that I read your 'bio' from your site, I now have a very good understanding of your history and pathway to Storm.

When you decided to go with Storm, did they at any time show you any of their back of house monitoring systems and methodology that they claimed to use to track client's portfolios ?

S


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## SJG1974 (17 November 2011)

Julia said:


> We can always find time for what we consider a priority.  Personally, I'd say that taking care of your financial well being is every bit as important as keeping in shape in order to take care of your physical health.
> 
> It does not require massive inputs of time.  It just requires about half an hour a day of keeping abreast of the news, global and local, and subscribing to a couple of objective sources of financial news analysis.  Then a one-off self education course via the ASX website or that of an online broker, then an equally one-off reading of a couple of basic books, and you're on your way.
> 
> ...




Agreed Julia.  

If I use my circumstances as an example.  I consider myself financially literate.  However, I see my adviser because I expect him to be aware of strategies that can help my position, strategies that I would not know even existed. Thats his job.

Now if he recommends something to me, the first thing I do is jump on the internet and google it.  While I trust what he tells me (his track record has been great in this regard), I want to make sure for my own peace of mind that what he is advising is legitimate and that I completely understand what he is recommending.  He is fine with me double checking things.  And there have been times where I have come back to him with questions etc. and he is happy to go over them with me.

I would NEVER, ever invest in something I do not understand.  I would NEVER, ever  structure my assets in a way that I do not understand.  There is that much information available on the internet now that you can do your own research. Surely your finances are just far too important to trust entirely to someone else? In my opionion, this is a no brainer.

And yet it seems that so many Stormers were prepared to hand it all over, not understanding what it was they were getting into, placing blind trust in a strategy they so blatantly obviously did not understand.

Frank may be on his crusade to clean up the industry, and good luck to him.

But no matter what new rules and regulations come into play, there will always be a rogue firm or two out there trying to make money off other people's misfortune. It has been going on for ever and will continue to.

Unfortunately, no matter what changes the industry undertakes in the future, it still won't protect people from themselves, because that is at the heart of all of this...


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## bunyip (17 November 2011)

Solly said:


> Just a quick comment about apportioning blame.
> 
> I can understand why some participants in this event are taking the position that complete blame lies elsewhere and not with them.
> 
> ...




In other words, Solly, people like Frank are going to push their own agenda while denying all personal responsibility for their actions. Why?...because they feel that this course of action is the most likely to result in them getting a payout.

It's not particularly honest....but that's what money does to some people.


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## bunyip (17 November 2011)

Frank Ainslie said:


> I believe this forum can be enlivened by constructive debate about some of the issues involved and the weaknesses that have been inherent in the financial advisory sector to date. By exploring some of these issues, we can also inform any would-be investors of the things to look out for that were not apparent to us at the time.
> 
> Having said this, it is not my intention on this forum to belittle the financial advisory sector. I must admit that at times I do have the occasional _"dummy spit" _when I think about what has happened to us. However, I also know it would be foolish on my part to condemn all financial advisers for the wrongs of a few. Good financial advisers have a place in the scheme of things and they are beneficial to society.




Frank

Correct me if I’m wrong, but didn’t you tell this forum just a couple of weeks ago that you were scheduled to address a public meeting, and you’d be advising them to steer clear of all financial planners?

Had a change of heart, have you?
If so, then I trust you’ll be honest enough to tell another public meeting that you may have been a little hasty in warning them off all financial planners, and now you feel that there are in fact some honest planners out there who are worth consulting.


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## Solly (17 November 2011)

bunyip said:


> In other words, Solly, people like Frank are going to push their own agenda while denying all personal responsibility for their actions. Why?...because they feel that this course of action is the most likely to result in them getting a payout.
> 
> It's not particularly honest....but that's what money does to some people.




bunyip, I believe Frank has the right to push any agenda he feels fit in this forum, just as anybody else has the right to counter or agree. I am pleased that there is one ex-client who is willing to be publicly identified and engage. 

I hope Frank will respond one day as to why he is taking the above tack.

Maybe the courts will decide if this is an honest approach.

In debacles like this I'm always reminded of Herbert Spencer's quote from "The Principles of Biology" in 1864;

"This survival of the fittest... is that which Mr. Darwin has called 'natural selection, or the preservation of favoured races in the struggle for life'."


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## Frank Ainslie (17 November 2011)

Solly said:


> bunyip, I believe Frank has the right to push any agenda he feels fit in this forum, just as anybody else has the right to counter or agree. I am pleased that there is one ex-client who is willing to be publicly identified and engage.
> 
> I hope Frank will respond one day as to why he is taking the above tack.
> 
> ...




Hi Solly, 

These postings are becoming more asinine by the minute. 

What agenda? What possible reason could I have for stating what I have? I have won few friends on this forum and doubt that I ever will. No matter! Winning a popularity contest should not be what this is all about. People here have been given the opportunity to hear it as it was from someone that was there! Not as they and others have garnered from what they have read in the Media. 

Unfortunately, instead of embracing, some detract, instead of trying to understand, some decry, instead of seeking after truth, some distort. Every time I have answered questions thrown at me on this forum I have tried to answer in an honest way and yet some people are still not satisfied. They never will be!

Dealing with many of Storm’s victims directly these last thee years I have learned more about human nature than in all my preceding years. I have seen the suffering of many and I have witnessed the triumph of the human spirit. Many that were in Storm may be old but they are far from beaten. Some of the young of today could take a leaf out of their book.

This is one side of the coin. The other side of human nature, that of people that have no concept of what many elderly people in Storm have had to endure, has also been evident in some of the abuse that Stormies have had to put up with by the uninformed in our society. This unsavoury element does not seek after truth but merely wants to aggrandize its own narrow-minded views of the world. They want to enhance their own importance. 

_“They got themselves into this mess! They only have themselves to blame!” _

The reasons why this occurred are of no importance to them because they feel themselves superior somehow. They could never find themselves in such a situation because they are far too clever! Yet many of them have never run a business or done anything constructive in their lives to help others. Now we are going to hear their protests to the contrary because they want to justify themselves in people's eyes. 

The picture they paint is not a pretty one but it’s an unfortunate reality of life that such people exist and I must accept that. After all, I have broad shoulders and I can handle the flack. Why they continue to aim shells at us though is completely beyond me. What do they hope to gain from such? They have already exposed themselves for what they are! I do not feel that I have to expound any further on their natures. It’s there for all to see. Personally, I am not interested in the opinion of such people because they have nothing to offer.

If people on this forum of the more enlightened kind want to hear what I have to say about the financial industry from my three years of research and my findings when so doing, I am willing to exchange ideas. Hopefully, in this way, we can warn investors about some of the things they should be looking out for! Now, what possible agenda could I have for making this offer other than stopping investors from making the same mistakes we did? 

_“Your Honour! I’ve been a good boy! I’ve tried to help others. Does this count?”_ 

If there is any one left out there with a degree of objectivity that wants to debate these matters with me, feel free. I am always here. The others among you that are completely one-eyed should give the other eye a chance. Life is a funny thing! Some day they may lose their sight in that one eye and have nothing to fall back on!


----------



## bunyip (17 November 2011)

Solly said:


> bunyip, I believe Frank has the right to push any agenda he feels fit in this forum, just as anybody else has the right to counter or agree. I am pleased that there is one ex-client who is willing to be publicly identified and engage.
> 
> I hope Frank will respond one day as to why he is taking the above tack.
> 
> ...





Solly

I agree - Frank can push any agenda he wants....I'm not trying to deny him that right.

Frank

The agenda I believe you've been pushing on here is to shovel as much blame as possible on to the banks, while denying that you're responsible for your own actions.
Shoring up support and sympathy for your views is not going to be detrimental to your objective of getting money from the banks.
But admitting any fault yourself certainly could be.

Those are my views Frank - I respect your right to hold a different viewpoint.


----------



## basilio (17 November 2011)

The Storm debacle was always a disaster in the making. The excessive gearing and the very high costs associated with the investment meant that the company would take its profits very quickly while the investors would have to hope and pray the market would still be going vertical.

From what I understand there was some very dubious practices undertaken by the Storm advisors as well as the banks who loaned money for extra gearing. In particular I remember that a number of peoples financial situations were misrepresented in order to get the bank loans.

Storm was not the only failure . There are many more investors who lost their shirts in investment companies that were either badly managed or manged with the main eye on the promotors rather than the investors. We are hearing a lot about Storm because its very big, it was very  ugly and Frank and others have decided to keep the discussion going with the intention of public education and perhaps some moral support.

I think its a bit presumptuous to say Storm investors were all greedy or stupid and that if they had their wits about them they wouldn't have invested and lost their money. In my view many of the financial investments offered in the marketplace are dubious. Think about the housing investment packages, pine plantation deals, emu farms, and so on. In my view when an organization decides to establish and promote a dubious deal they take very good care to make smell good. Storm was probably just a bit stinkier than most.


----------



## bunyip (17 November 2011)

Frank Ainslie said:


> To Bunnyip, SIG1974 and Julia,
> 
> 
> There is much to learn from the Storm debacle if people are willing to listen to those that were caught up in the Storm collapse and understand first hand what occurred.
> ...




Frank

Indeed there is much to learn from those who were caught up in the Storm debacle.
And whether you realize it or not, there is also much to learn from some who were _*not*_ caught up in Storm. You can keep believing that _‘we’re wise after __the event’_, but the fact is that some of us on here have been managing our own investments for many years, and in that time we’ve seen many shonky schemes come and go. We haven’t done everything right, we’ve made mistakes ourselves at times, but we’ve mostly managed to steer a path that’s allowed us to make reasonable returns in relative safety.

You could learn a lot from us, Frank, but instead you’ve been more inclined to write us off and dismiss our views and experience as irrelevant nonsense from people who just don’t understand.

Here are a few bits of advice that you may want to consider, or pass on to others. Or discard if you think they’re worthless.
*
* Don’t put all your eggs in the one basket.* 
Split your money up between different asset classes, rather than relying on the fortunes of just one.

** If it sounds too good to be true, then it probably is. *
Salesmen can be very accomplished at dressing things up to look much better than they are.

** Think for yourself. *
Letting others do your thinking for you is not a safe option. That doesn’t mean you shouldn’t consult professionals, just that you must put some thought and effort into scrutinizing the strategies they suggest.
* 
* Use common sense.* 
A number of Stormers have told me their biggest regret is not using a modicum of common sense that would have enabled them to see the dangers inherent in the Storm strategy.
* 
* Don’t be lazy. *
Laziness is when you believe everything salesmen tell you because you couldn’t be bothered to conduct a small amount of research to check the veracity of their information.
Laziness is when you couldn't be bothered to avail yourself of the many opportunites that are freely available to aquire some basic knowledge and skills in investment and finance.
Laziness is when you sit on your hands and do nothing while your manager lets your business bleed to death. (Can you imagine the owner of a cattle property doing nothing while his manager lets the breeding cows die in a drought? Can you imagine a factory owner sitting on his hands and taking no remedial action while his manager allows costs to spiral out of control, or in some other way let’s the business go down the tube?)

It’s all very well for you, Frank, to accuse Storm and the banks of sitting on their hands and doing nothing while Storm clients burned (as you stated in one of your posts). But you did exactly the same thing yourself.
DocK stepped in and over-ruled Storm by selling her investments before they got down to margin call level. Other Stormers could have done the same. And yes, I know Storm talked some out of it when they tried, but they owned their business, not Storm, and the final decision was theirs.

** Don’t be a gambler. *
The Storm strategy was a giant gamble that was guaranteed to fail. Why?...because its continued success relied on an impossibility – a constantly rising stock market. Bear markets follow bull markets like night follows day. One of the strongest bull markets in history had been in place for some years when you signed on with Storm. Bull markets create a feeding frenzy where every man and his dog is piling into the market to get a slice of the action. Such irrational exuberance can push stock prices to levels that are out of all proportion to company earnings. Clearly this is not sustainable indefinitely. Nobody knew how long the bull market would continue, the only thing certain was that it would end sooner or later, and the success of Storm’s strategy would end with it.
Therefore the Storm strategy was always doomed to failure sooner or later. On that basis alone, quite apart from all the other aspects of the Storm case, investors should have shunned Storm's strategy.
You may not have been wiped out if your margins calls kicked in in time and you had sufficient cash reserves to weather the downturn, but at the very least your losses would have been substantial – the combination of a plunging market and an aggressive gearing strategy would have seen to that. And many people without decent cash reserves would have been wiped out, even if margin calls were delivered in a timely manner.
Storm’s strategy was an accident waiting to happen.

Frank – you can lobby the government and the financial planning industry all you want. And you may or may not be successful in bringing about some changes.
But regardless of what new or modified regulations are introduced, no matter what penalties are imposed on shonky operators, no matter what restrictions are placed on banks, investors will still get burnt if they wade into investment in a careless manner without adhering to the general guidelines I’ve outlined above.
The long and short of it is that no amount of rules and regulation can protect gullible and complacent people from themselves.


----------



## SJG1974 (17 November 2011)

Spare us the high moral ground Frank.  You do nothing but contradict yourself with your long-winded ramblings.



Frank Ainslie said:


> The reasons why this occurred are of no importance to them because they feel themselves superior somehow. They could never find themselves in such a situation because they are far too clever!




This is funny coming from a man who all along has ignored the real reason why this occurred- that being you handed your life over to a third party who promoted a strategy you did not even nearly understand. 

And I would have thought that researching something you don't understand before committing your life savings to it is not being far too clever, but using some basic common sense. Its not rocket surgery Frank.



Frank Ainslie said:


> Now, what possible agenda could I have for making this offer other than stopping investors from making the same mistakes we did?




How can you stop people from making the same mistakes you did if you can't even acknowledge the mistakes you made????



Frank Ainslie said:


> The others among you that are completely one-eyed should give the other eye a chance. Life is a funny thing! Some day they may lose their sight in that one eye and have nothing to fall back on!




I like this one...one eyed.  Thats a good one Frank.

If anyone on this forum has been one-eyed, it is you, by placing the blame for your demise with everyone or thing associated with Storm except the one person who could have prevented it more than any other- yourself.

Most around here accept that there were many parties involved in Storm and its clients' demise.  

Perhaps it is you who should open the other eye and take some responsibility for the decision YOU made to invest YOUR money in a high risk strategy that YOU obviously did not understand. And just blindly followed the advice because he had qualification, sat in a nice office and (supposedly) had PI insurance to back him up.

Goodness me.


----------



## bunyip (17 November 2011)

Solly said:


> bunyip, I believe Frank has the right to push any agenda he feels fit in this forum, just as anybody else has the right to counter or agree. I am pleased that there is one ex-client who is willing to be publicly identified and engage.
> 
> I hope Frank will respond one day as to why he is taking the above tack.
> 
> Maybe the courts will decide if this is an honest approach.




Solly

One further point....I’m not questioning Frank’s honesty in telling us his version of how he was done over by Storm and the banks. But I certainly question his honesty in claiming that he bears no responsibility for his actions.

Fair enough that Frank wants others to be held accountable for their actions. But Frank also needs to be accountable for his own actions.


----------



## Solly (17 November 2011)

bunyip said:


> Solly
> 
> One further point....I’m not questioning Frank’s honesty in telling us his version of how he was done over by Storm and the banks. But I certainly question his honesty in claiming that he bears no responsibility for his actions.
> 
> Fair enough that Frank wants others to be held accountable for their actions. But Frank also needs to be accountable for his own actions.





Ok bunyip, I now understand your stance, thanks for the clarification. 

Things really can become rather intense on this forum at times. 

Sometimes I overlook that this forum holds no enforceable authority, nobody is bound to reply or engage in any manner whatsoever. 

But it's good people do and I now possess a much deeper understanding of the many complex inputs to this Storm saga.

And a big thanks to Joe for maintaining a platform for us all to be heard. 

S


----------



## bunyip (17 November 2011)

Frank Ainslie said:


> Yet many of them have never run a business or done anything constructive in their lives to help others.





And how the bloody hell would you know if we’ve ever run businesses or done anything to help other people???!!!

Unlike you, Frank, we feel no need to big note ourselves about our careers, our lives, or our personal achievements. You clearly have an ego the size of Ayre’s Rock, so vocal have you been about your business achievements and the positions you’ve held and the qualifications you hold.

Tell me Frank – did you spend days in the sultry conditions last January, walking up to 15 km daily through knee-deep mud to search for bodies after the flash flooding in southern QLD? 
I did.
Did you risk you life to pull people off a rooftop that was surrounded by water? 
I did.
Did you spend days feeding hundreds of people and counseling them at a flood refuge center? 
I did.
Did you spend days in baking heat helping the bloke down the road dig his machinery out of the mud left by the creek that came over his property? 
I did. 

So don’t you come on here with your holier than thou bull**** about how we’ve never done anything constructive in our lives to help others!

As for never having run a business.....more unsubstantiated bull**** from the master himself!

Wake up to yourself Frank – the longer you spend on this forum, the more foolish you make yourself look!


----------



## Julia (17 November 2011)

Frank Ainslie said:


> it is not my intention on this forum to belittle the financial advisory sector. I must admit that at times I do have the occasional _"dummy spit" _when I think about what has happened to us. However, I also know it would be foolish on my part to condemn all financial advisers for the wrongs of a few. Good financial advisers have a place in the scheme of things and they are beneficial to society.



Not your intention to belittle the financial advisory sector?   That's what you have done in post after post.  

I hold no great brief for the financial services sector but take exception to your making wild accusations that generalise the entire industry.  When, in the interests of fairness, I pointed this out, you refused to concede that you were being unreasonable, so I'm glad to see that you've now above reluctantly acknowledged this.




> Julia has said that she doesn’t think there is a need for more regulations. Obviously, she is at odds with this Government



Good Lord, that's not saying much!  This pathetic government is intent on creating a nanny state which will soon remove any sense of personal responsibility, thus eventually breeding a nation of compliant idiots who depend on rules and regulations for every decision.



> For my part, I do not have the time or inclination to go over old ground.



Phew!  That's a relief.  



> Therefore I will not be answering any further posts that do not have something constructive to say.



Translation:  "When all the discrepancies in my statements are pointed out to me, I simply have no answer."



SJG1974 said:


> But no matter what new rules and regulations come into play, there will always be a rogue firm or two out there trying to make money off other people's misfortune. It has been going on for ever and will continue to.
> 
> Unfortunately, no matter what changes the industry undertakes in the future, it still won't protect people from themselves, because that is at the heart of all of this...



Exactly.  Just as an example, the various Nigerian scams are now widely known.  Police repeatedly come on TV and warn the population about this.  Yet, millions of dollars still get sent in response to these *unsolicited emails telling people they have become eligible for a payout of millions*.




SJG1974 said:


> Spare us the high moral ground Frank.  You do nothing but contradict yourself with your long-winded ramblings.



+1.  



bunyip said:


> And how the bloody hell would you know if we’ve ever run businesses or done anything to help other people???!!!



+1.  Another rude and arrogant assumption.

Frank, I don't believe anyone here has any interest in pulling you to pieces.  But when you continually make conflicting statements, you have to expect that someone will point this out.

You rightly suggest this forum is a place of learning.  I agree.  I, for one, have learned a great deal from many of the people here.
But, in the interests of new members, people perhaps new to investing, we'd be doing them a disservice by allowing your more unreasonable statements to go unchallenged.

A while ago DocK made the point that she didn't intend to repeat her account of her experience with Storm *because she needed to move on.*   That's a sign of someone who has understood what went wrong for her, fixed what she could, and got on with the rest of her life.  Perhaps consider, Frank, that your own health and wellbeing might be advantaged in following her example.

I wish you well.


----------



## bunyip (17 November 2011)

Frank Ainslie said:


> Hi Solly,
> 
> 
> 
> Every time I have answered questions thrown at me on this forum I have tried to answer in an honest way and yet some people are still not satisfied. They never will




I distinctly recall a number of times when you ignored a question because, presumably, you found it too confronting. 

Here's one that comes to mind...
_'Frank, in the unlikely event of a court ruling that the banks must pay 100% of your losses, will you accept the payment?'_

You ignored that question when I asked it weeks ago, so I'm asking it again now. Not that I really expect any answer - my guess is that you'll ignore it this time as well.


----------



## Garpal Gumnut (17 November 2011)

Solly said:


> GG
> 
> Looks like the Melton auction is now, Sat 19-Nov-11 11:00AM.
> 
> ...





The Gumnut clan will be parking Audis, selling and rescuing handbags from overheated cars and otherwise contributing to the display of wealth unbridled, at the sale of Manny's pile on Melton Tce. this Saturday.

The Cassimatis Mansion is the result of taste, taste done ultimate, on the back of a bull market, subscribed to by the unsophisticated victims of Storm. 

Byrnsie is upbeat, as he would be.

It will have to be seen to be believed.

Come one, come all, mansion going cheap.

gg


----------



## bunyip (17 November 2011)

Garpal Gumnut said:


> The Gumnut clan will be parking Audis, selling and rescuing handbags from overheated cars and otherwise contributing to the display of wealth unbridled, at the sale of Manny's pile on Melton Tce. this Saturday.
> 
> The Cassimatis Mansion is the result of taste, taste done ultimate, on the back of a bull market, subscribed to by the unsophisticated victims of Storm.
> 
> ...




Where will Manny live next, I wonder. 

Could there be any truth in the rumour that he's been talking to Pixie Scase to get the rundown on Majorca?


----------



## Garpal Gumnut (17 November 2011)

Garpal Gumnut said:


> The Gumnut clan will be parking Audis, selling and rescuing handbags from overheated cars and otherwise contributing to the display of wealth unbridled, at the sale of Manny's pile on Melton Tce. this Saturday.
> 
> The Cassimatis Mansion is the result of taste, taste done ultimate, on the back of a bull market, subscribed to by the unsophisticated victims of Storm.
> 
> ...






bunyip said:


> Where will Manny live next, I wonder.
> 
> Could there be any truth in the rumour that he's been talking to Pixie Scase to get the rundown on Majorca?




Darwin has been mentioned.

The Gumnut Makeover and Poise Clinic Inc. has not been approached, but should Manny care to contact, it and it's entities would be happy to assist.

gg


----------



## Solly (18 November 2011)

> *Storm Financial directors' mansion up for auction*
> 
> Real estate agent Garry Byrnes says the home is worth millions of dollars.
> 
> ...




More by Josh Bavas @ abc.net.au


----------



## Solly (18 November 2011)

Garpal Gumnut said:


> The Gumnut clan will be parking Audis, selling and rescuing handbags from overheated cars and otherwise contributing to the display of wealth unbridled, at the sale of Manny's pile on Melton Tce. this Saturday.
> 
> The Cassimatis Mansion is the result of taste, taste done ultimate, on the back of a bull market, subscribed to by the unsophisticated victims of Storm.
> 
> ...




GG

Why do I have a sneaking suspicion that you will really be there?

I hope you snap some pics with your g-Phone from the scene and upload them for us all to peruse.

S


----------



## Garpal Gumnut (18 November 2011)

Solly said:


> GG
> 
> Why do I have a sneaking suspicion that you will really be there?
> 
> ...




Unfortunately a mate has started a Church on the Gold Coast and I need to steer the Bentley from here to there by hallelujah hour on Sunday. He has asked me to look at the books.

He is having major problems with a rat in the ranks, money disappearing, sex, a pregnancy, very ungodly behaviour, and there is also a very important rich wedding in which the Bentley stars in the afternoon.  

So I will be saying goodbye to Townsville at Cluden at about midnight tonight, stopping only for sustenance at a servo, and in no time at all will be whispering matins on the coast. I plan to cross Pine River at about 8pm and the Nerang shortly after.  

Word about is that there were two interested buyers for Casa Cassimatis, but now there is only one, something to do with Kuwait buggered the other one. The local bookie says $1.4m. It seems such a steal. 

gg


----------



## Glen48 (18 November 2011)

God bless you my son for your good work for such a noble crusade, a trip like that will take 12 hrs or more my God be with you and good luck with your forensic accountancy work, maybe you could have a quick chat to Mammy just to see if there are any loop holes he may know but you are not aware of and have look over his book cooking instruments  .
My mate Peter is there as well after a stint in some government funded  housing scheme  all us 99% can only look back in awe and wonder why were are not among they chose few but then like any good battle plan it all comes apart once the first bullet is fired, so best of luck.
 By the way the blonde in Cavel Ave near _Believe it of get F&^K_  attraction   is actually more well endowed than any man so be warned.


----------



## Garpal Gumnut (18 November 2011)

Glen48 said:


> God bless you my son for your good work for such a noble crusade, a trip like that will take 12 hrs or more my God be with you and good luck with your forensic accountancy work, maybe you could have a quick chat to Mammy just to see if there are any loop holes he may know but you are not aware of and have look over his book cooking instruments  .
> My mate Peter is there as well after a stint in some government funded  housing scheme  all us 99% can only look back in awe and wonder why were are not among they chose few but then like any good battle plan it all comes apart once the first bullet is fired, so best of luck.
> By the way the blonde in Cavel Ave near _Believe it of get F&^K_  attraction   is actually more well endowed than any man so be warned.




Thanks g48

Your piece be with you in the city tonight.

gg


----------



## Solly (18 November 2011)

Garpal Gumnut said:


> Unfortunately a mate has started a Church on the Gold Coast and I need to steer the Bentley from here to there by hallelujah hour on Sunday. He has asked me to look at the books.
> 
> He is having major problems with a rat in the ranks, money disappearing, sex, a pregnancy, very ungodly behaviour, and there is also a very important rich wedding in which the Bentley stars in the afternoon.
> 
> ...




GG 

It sounds like you have got a lot on your plate at the moment. Had a mate who had similar probs trying to sort out an issue with a Mystic Believers Centre down this way. It was back in the days when polaroids played a big part in the proof of indiscretions. It did end in tears, a related visit to causality and a liberal topical application of Betadine to the affected part.

$1.4m, that does seem like a steal. I'm sending a tweet to Jenman to make sure a bid so low is ethical.

Have a safe trip, keep an eye out for Traffic Branch around Coomera, those Highway Patrol Commodore SSs have a bit of a habit of appearing out of the ether when least expected.

S


----------



## Solly (19 November 2011)

> *"Auctioneers expect a crowded Storm sale*
> 
> Camera crews from the Seven and Nine networks will capture the event on television and real estate agents believe it could attract as many as 200 people - they briefly toyed with the idea of hiring security guards."




More by Bridget Carter @ www.theaustralian.com.au


----------



## Solly (19 November 2011)

> *"Storm Financial founders Emmanuael and Julie Cassimatis's mansion passed in at auction*
> 
> THE former Townsville home of Storm Financial founders Emmanuel and Julie Cassimatis has been passed in at auction at $1.35 million."




More from Samantha Healy @ www.couriermail.com.au


----------



## Harleyquin (19 November 2011)

I haven't had computer access since my last post and have only had a short read of some of the posts since however Frank I back up your claims that this most definitely feels very much as though we've been raped and anyone who takes offence at this remark certainly has no idea how we feel or they wouldn't feel so defensive.

I have never been physically raped but I have worked with someone who has and helped her work through it, and I can tell you something for nothing my emotions over this storm case are very much on a par with the way she is feeling even to this day let me tell you.

Any claims by a rape victim that this situation has no similarity is very very much mistaken.  You have no idea and never will know just how destruction this experience has been.  I take offense most strongly that we, the victims are to blame and need to take responsibility and I know that my reasoning is sound on this issue and don't need to repeat myself.

If this is how a person seeking financial advice is treated, if this is how financial planners are 'allowed' to operate and get away with it, if this is how the Australian banking system is allowed to mistreat their clients then all I can say is the whole industry needs dismantleing, it's disgusting.

Irrespective of what 'percentage' of blame one can level at the banking industry, the fact remains that they have a case to answer.  The criminal put up the idea and his partner gave him the means to allow the crime to occur, I believe it's sometimes called 'aiding and abeting'

To all storm clients out there don't believe that you are in the wrong for seeking and accepting financial advice from these experts, you have been well and truly raped by the financial advisor and his financial backers and anyone who thinks otherwise is an outsider in this fight that we have on our hands for justice.  They are the ones who have no idea and their continued onslaught of storms victims is the most disgusting thing that I've ever had the misfortune to read in my life.


----------



## bunyip (19 November 2011)

Harleyquin said:


> I haven't had computer access since my last post and have only had a short read of some of the posts since however Frank I back up your claims that this most definitely feels very much as though we've been raped and anyone who takes offence at this remark certainly has no idea how we feel or they wouldn't feel so defensive.
> 
> I have never been physically raped but I have worked with someone who has and helped her work through it, and I can tell you something for nothing my emotions over this storm case are very much on a par with the way she is feeling even to this day let me tell you.
> 
> ...




Come on HQ – you know very well we haven’t said you’re to blame 100%. We’ve said that a number of parties bear some responsibility for the mess that Stormers now find themselves in, and that each of them should be accountable for their actions. That includes _*you*_, the ex-clients.
We’re all responsible for the choices we make in life – no matter whether we’re kids at school, housewives, career women/men, drunks, criminals, farmers, sportsmen, politicians, investors or whatever.

_*You*_ could have got yourself some free education in basic investment knowledge and skills over the years, but you didn’t – that’s why you went to Storm, because you thought they’d have the investment knowledge that you could have achieved yourself, but chose not to.
You could now be well on your way towards being reasonably investment-savvy if you’d accepted Julia’s generous offer to be your mentor, but _*you*_ chose to turn down her offer.

It was _*your*_ choice not to properly scrutinize Storms strategy before accepting it.
It was _*your*_ choice to mortgage your home – not someone else’s.
It was _*your*_ choice to believe Storm when they told you their strategy was safe – not someone else’s.
It was _*your*_ choice to accept and implement a strategy that you clearly did not understand.
It was _*your*_ choice to ignore the grim news about the coming global financial meltdown – (it was on every media outlet every day for at least six months beforehand.)
It was _*your*_ choice to do nothing towards managing your business once the financial crisis hit and the market started heading south. As the owner of your investment business you could have over-ridden Storm who were clearly not doing a competent job of managing your investment. But _*you *_chose not to.
It was _*you*_r choice to ignore that age-old wisdom of ‘_Don’t put all your eggs in one basket_’,  by putting all your money plus lots of borrowed money into the stock market.
It was _*your*_ choice not to heed that other piece of age-old wisdom - _‘If it sounds too good to be true, then it probably is._
Need I go on?

I advise you to take responsibility for the choices _*you*_ made. Lots of Storm clients have already done so – you should too if you ever want closure on this. If you follow Frank’s example of expecting everyone but himself to be accountable, then this is going to eat away at you for the rest of your life, and probably affect your health even more than it’s done so far.

As for your claim of_ 'You have no idea and never will know just how destructive this experience has been'._
Let me correct you on this point. I was in the thick of the flash flooding that hit southern QLD back in January. My own home, property, and family were unaffected due to our foresight in buying a property on high ground.
But I saw people's lives being torn apart by a small creek that had turned into a raging torrent 3km wide. I saw homes and sheds disintegrate in front of my eyes. I saw mangled buildings and household goods floating in the water, knowing that people had died in those buildings.
I saw a family sitting on the roof of their vehicle as it floated down the creek, I saw them fall off into the water, I saw one of them flounder and then disappear - his body has never been found.
I helped to get a family off the roof of their house as it was surrounded by rapidly rising water. I was there when the woman collapsed with chest pains.
I spoke with hundreds of people as I helped out in the flood refuge center set up in our village - one family in particular I remember had lost their home and their trucking business when the whole lot went completely under water. And their daughter was missing -she was later found dead a few kilometers down the creek.
I've followed through on this family - their insurance policy did not cover their losses.

Now, how do you think the plight of you Stormers compares to the plight of the family I've described above?
I'd say their situation is a lot worse and a lot more traumatic than yours....wouldn't you??
And there are dozens of other flood-affected families just like them in my area alone, not to mention all the other areas that were flooded last summer.

In no way do I make light of the devastating circumstances you find yourself in as a result of the Storm debacle. I feel genuinely sorry for you.
But don't tell me I have no idea of the impact this has had on your life. After what I saw in the January floods, I believe I have a very good idea.


----------



## SJG1974 (19 November 2011)

Harleyquin said:


> I haven't had computer access since my last post and have only had a short read of some of the posts since however Frank I back up your claims that this most definitely feels very much as though we've been raped and anyone who takes offence at this remark certainly has no idea how we feel or they wouldn't feel so defensive.
> 
> I have never been physically raped but I have worked with someone who has and helped her work through it, and I can tell you something for nothing my emotions over this storm case are very much on a par with the way she is feeling even to this day let me tell you.
> 
> ...




Come off it HQ.  You must be reading a different forum to me.  The continued onslaught of Storm victims?  Please. 

Unless you had a gun held to your head, it was your choice to go with Storm, noone elses.  Not the Bank's, not the FPAs, not ASIC's, not Storms. I don't think anyone has denied the role these parties played in the whole disaster, and the courts will ensure that their guilt or otherwise is put on public record.

And it was your choice to follow their strategy.  It was your choice not to understand the risks involved in what you were doing.  It was your choice to hand your life over to them.  It was your choice not to research the strtegy independently. Noone made that choice for you. 

You made those choices, so take some responsibility for them for goodness sake.


----------



## gardie (19 November 2011)

I cannot believe the attacks made here on people that have been decimated by Storm and the banks.

I have had an experience involving helping to try and pick up the pieces for people who were decimated by taking the advice of their financial planner. The end result on the back of the bad advice was financial decimation.

These people placed the same level of trust in their advisor as they did their doctor, accountant, lawyer etc only to be destroyed.

For many of these people they will never recover from what has occurred. Many people do not have the level of sophistication financially and hence sought the advice of someone they believed was qualified to manage their nest egg.

The arrogance of some people here to say oh you should have researched this. If you go to your accountant do you take his tax advice and then go and do your own research. A certain percentage with financial skills could but for most they take the advice of a trusted advisor.

Walk in someone shoes for a while before you start throwing mud.


----------



## SJG1974 (19 November 2011)

gardie said:


> The arrogance of some people here to say oh you should have researched this. If you go to your accountant do you take his tax advice and then go and do your own research. A certain percentage with financial skills could but for most they take the advice of a trusted advisor.
> 
> Walk in someone shoes for a while before you start throwing mud.




Arrogance?  

I would think its common sense to ensure that you have a full understanding of how your life savings are being managed and the risks involved, whether its your trusted adviser investing your money, or any other professional.

And it wasn't a complex strategy they needed to understand...just a ridiculously high risk one.


----------



## Julia (19 November 2011)

Harleyquin said:


> I haven't had computer access since my last post and have only had a short read of some of the posts since however Frank I back up your claims that this most definitely feels very much as though we've been raped and anyone who takes offence at this remark certainly has no idea how we feel or they wouldn't feel so defensive.
> 
> I have never been physically raped but I have worked with someone who has and helped her work through it, and I can tell you something for nothing my emotions over this storm case are very much on a par with the way she is feeling even to this day let me tell you.
> 
> ...




What a load of self indulgent garbage.  There goes any vestige of sympathy I've had for you HQ.   Get yourself back into the real world.


----------



## Harleyquin (19 November 2011)

In answer to those who have said 'take responsibility for your actions', I do, I take responsibility for accepting the advice of a qualified financial planner, and I seem to recall saying that more than once on this forum.

I'm also sure that I've said that I just wanted to walk into a financial planners office and pay him/her to give me their expert advice.  I have never pretended for one moment that I was interested in financial issues, it's not my forte, never has been and never will be.

Julia has given me a good starting point and I appreciate that but I will never take any form of financial guidance from anyone ever again, all decisions will be mine alone.  I no longer trust anyone no matter how genuine they may or may not be.  There are loads of threads on this forum for newbies for educate themselves, don't they say 'start at the bottom'  well I'm still on the bottom and learning a little each time I visit.

Financial planners spend something in the vicinity of four years at university studying for their degree, more for their PhD, and you're virtually saying 'don't believe them they don't know what they're talking about but I should know exactly what they are talking about even though I've never had a financial lesson in my life', well that sounds like good sound advice!!!

It's all very well to say after the event 'you should have educated yourself first' in which case I wouldn't have bothered seeking financial advice, I would have just muddled through as I've done all along and as I intend to do in the future.  

They put warning labels on cigarette packets, why don't they do the same thing to financial planners, it really is almost the same thing, life threatening, just ask those who's family members have suicided over this disaster.

As for those affected by the dreadful flooding in SE Qld earlier in the year, many of us know people directly affected by that disaster in the Lockyer Valley, myself included, and I see them still traumatised.  You'll get no argument from me on that score.

What many of you who are sitting back doing the criticising don't realise the exact scale of the storm disaster on thousands of lives.  Like the floods, storm and co have stripped the homes off thousands and they've been left floundering without any idea of how or why, and then to boot, they've been called greedy.

One minute you think you're doing the right thing seeking and accepying financial advice and the next you're a greedy mongrel who should have educated yourself and realised that what you were doing was wrong, what a load of hogwash.

It's all very well for you arm chair experts out there in forumland to sit up there on your soapboxes and criticise us.  The fact remains that there are a lot of traumatised, untrusting people out there who have had their homes and lives totally destroyed by this disaster and many of them are whole families, great grandparents, grandparents, parents and the kids, whole generations destroyed.

Don't tell me to educate myself, I'm over it; tell the financial planners, banks and government to get their act together and do their jobs properly instead of ripping off the ordinary man in the name of 'financial planning.'


----------



## Garpal Gumnut (19 November 2011)

> "Auctioneers expect a crowded Storm sale
> 
> Camera crews from the Seven and Nine networks will capture the event on television and real estate agents believe it could attract as many as 200 people - they briefly toyed with the idea of hiring security guards."







Solly said:


> GG
> 
> Why do I have a sneaking suspicion that you will really be there?
> 
> ...






Garpal Gumnut said:


> Unfortunately a mate has started a Church on the Gold Coast and I need to steer the Bentley from here to there by hallelujah hour on Sunday. He has asked me to look at the books.
> 
> He is having major problems with a rat in the ranks, money disappearing, sex, a pregnancy, very ungodly behaviour, and there is also a very important rich wedding in which the Bentley stars in the afternoon.
> 
> ...






Glen48 said:


> God bless you my son for your good work for such a noble crusade, a trip like that will take 12 hrs or more my God be with you and good luck with your forensic accountancy work, maybe you could have a quick chat to Mammy just to see if there are any loop holes he may know but you are not aware of and have look over his book cooking instruments  .
> My mate Peter is there as well after a stint in some government funded  housing scheme  all us 99% can only look back in awe and wonder why were are not among they chose few but then like any good battle plan it all comes apart once the first bullet is fired, so best of luck.
> By the way the blonde in Cavel Ave near _Believe it of get F&^K_  attraction   is actually more well endowed than any man so be warned.






Solly said:


> More by Bridget Carter @ www.theaustralian.com.au




Solly, mate,

I have arrived at the mate's "Church" on the Gold Coast having been met this afternoon by a frantic mob of believers at the Wild Scotsman in Gin Gin who travelled north in a Toyota Tarago to plead their beliefs and financial statements. The books are in an interesting state but with this earthly financial year yet to end for in excess of seven months I have persuaded the congregation to consider Casa Cassimatis as the base for a new church, The Church of the Coral Sea.

The Cassimatis mansion in Townsville was passed in this afternoon at $1.35m, a smidgeon under the SP Bookie's estimate at the Ross Island Hotel not 24 hours ago, as I faithfully recorded on this thread. 

She ( The bookie ) reckons that an offer of $1.6 will garner the pile for the service of the just and the pure, and The Church of the Coral Sea.

Unfortunately due to some unfortunate entanglement with MF Global, the Church is cash flow challenged, and from my view of the books has only $1.6m to spend on this worthy cause.

As my fees are $400,000, this will leave them with only $1.2m.

I wondered if you or Lady Penelope could rustle up a lazy 4, to become 25% partners in a Church on Melton Tce., Townsville, which will be dedicated to the expungement of the taint of money, greed, capitalism and financial cataclysm from that gentle slope. 

It will be an icon for believers and a warning for those who believe in ASIC, financial planners and banks.

Please let me know as soon as you can and I will contact Byrnsie. I am off to visit a member of the flock presently located adjacent to the Stockport Watchhouse who has a guaranteed cure for obesity which he hopes to market in North Queensland. 

gg


----------



## Boggo (19 November 2011)

Harleyquin said:


> Financial planners spend something in the vicinity of four years at university studying for their degree, more for their PhD,




You're have to be kidding if you believe that !
There may be some who have taken it to that level but I know a few very successful ones who never did, one of them used to sell insurance door to door !


----------



## Harleyquin (19 November 2011)

'What a load of self indulgent garbage. There goes any vestige of sympathy I've had for you HQ. Get yourself back into the real world.' _by Julia_

I live very much in the real world Julia and I don't recall asking for or expecting sympathy from you or anyone else.  As you yourself have often said 'this is a stock forum' and I'd like to remind you that this thread say's 'Storm Financial Group'.  That is, one would expect, a thread on which one can discuss all aspects of the storm disaster, nothing more, nothing less.

As for a load of self indulgent garbage, that's only your opinion Julia, and I know that there are many, myself included, who disagree with your opinions.  It's obvious from your postings on other threads that you've become a very financially astute person and I admire you for that, yet you continue to contribute nothing to this thread except a monologue of abuse to all the storm victims.  You continue to nitpick on all postings offering nothing in return.  I often wonder why you bother visiting this thread and what your agenda really is.


----------



## Harleyquin (19 November 2011)

Boggo our storm financial planner had a university degree.  I did my research on that score.  It has been shown however that some of the storm 'planners' had a five minute lesson with some university for their degree, that's disgusting.

If financial planners are operating without formal qualifications and still approved by ASIC and the FPA, then I want to know how and why.  I expect a so called professional to at least have professional qualifications, that's the least one would expect.   

You'll have to excuse me if I fail to believe that there was anyone 'successful' in financial planning who sold insurance, I may have believed it once but not today.  That's a furfy.

Time they got rid of the non professionals out of the profession and tightened up on their 'professionalism'.  No unqualified person should be legally allowed to call themselves a financial planner.  Just my two bobs worth.


----------



## Boggo (20 November 2011)

Harleyquin said:


> You'll have to excuse me if I fail to believe that there was anyone 'successful' in financial planning who sold insurance, I may have believed it once but not today.  That's a furfy.
> Time they got rid of the non professionals out of the profession and tightened up on their 'professionalism'.  No unqualified person should be legally allowed to call themselves a financial planner.  Just my two bobs worth.




You are excused and I never said that they weren't qualified, they meet every requirement plus a few but never spent four years in uni listening to someone who has never actually practised.

They are a damn sight more professional than any one else I have encountered in that industry. 
Maybe the lesson is to avoid the uni bludgers and seek out the ones that started from scratch and learned the hard way and you might avoid another storm !


----------



## Frank Ainslie (20 November 2011)

Harleyquin said:


> I haven't had computer access since my last post and have only had a short read of some of the posts since however Frank I back up your claims that this most definitely feels very much as though we've been raped and anyone who takes offence at this remark certainly has no idea how we feel or they wouldn't feel so defensive.
> 
> I have never been physically raped but I have worked with someone who has and helped her work through it, and I can tell you something for nothing my emotions over this storm case are very much on a par with the way she is feeling even to this day let me tell you.
> 
> ...




Hi Harlequin,

Nice to have you back! The bigots are still out in force, I'm afraid!

Do what I’ve now done and only reply to people with something constructive rather than destructive to say! Idiots will only succeed in vexing you if you encourage them. 

It's much better if you relegate the _'Dumb and Dumbers' _on this forum to the back-bench where they belong. They just want you to confess to something you didn’t do to feed their own egos. You’ll never be able to explain to such people what happened because they have all the answers. 

Trust me, it’s not worth your time or effort. Better to wait for intelligent posters to come along rather than squander your energy for nothing.


----------



## bunyip (20 November 2011)

Frank Ainslie said:


> Hi Harlequin,
> 
> Nice to have you back! The bigots are still out in force, I'm afraid!
> 
> ...




‘Intelligent’ posters like you eh Frank?....people who repeatedly contradict themselves, make silly statements they can’t substantiate, make claims they can’t back up, big-note themselves about their careers and business achievements in the mistaken belief that this is relevant to this discussion, publicly condemn all financial planners but then change their mind a week or two later, refuse to take responsibility for their own actions but expect everyone else to be accountable for theirs, etc etc etc etc etc.
Yep, that’s pretty ‘intelligent’ all right Frank!
Strange though that such an intelligent man couldn’t see the glaringly obvious pitfalls in the Storm strategy. Ahh well – I guess I just don’t understand ‘intelligent’ people.
Maybe the only way for me to become 'intelligent' is to agree with everything you say.


----------



## Harleyquin (20 November 2011)

Thanks Frank I'll take your comments on board.

We have committed a 'crime' apparently.  I, and many others, have already admitted that our 'crime' was to believe a financial planner, who had the financial backing of the CBA, and believe what they had to say.  I had dealt with that bank before and trusted them implicately.

The point is not, 'you should have done your research etc' , the point is 'we should have been able to trust the very people who let us down'.  End of story.

We have, and continue to pay the price for our trust; and the price is far far higher than anyone else not involved has any idea.

My advice these days to anyone seeking financial advice is DON'T TRUST ANYONE WITH YOUR FINANCES, no matter how genuinely they present themselves to you, there is just too much corruption in this country, from the top down.

I find the internet extremely helpful, unfortunately those of us who live in remote areas are not always able to access it one hundred percent of the time, and our computers are almost ready for the computer graveyard.  Contrary to what our city counterparts think , there are still many out here who've no access to a computer or the internet as the costs involved are too great, among other things.

There are some genuine posters on this thread and they've given us some sensible advice and I for one appreciate their input.  The storm disaster has taken an incredibly huge toll on so many, they continue to pay a heavy price and the uneducated ramblings of some posters are only rubbing salt into their open wounds.


----------



## tech/a (20 November 2011)

> * DON'T TRUST ANYONE WITH YOUR FINANCES, *




Ive never read this thread.
But this is the wisest thing you can possibly do.

I have a rule which I never break.

*"If I cant control it then I dont do it."*

Business
Property
Trading 
Investing
Super.

You'll never find yourself on a thread like this!


----------



## Harleyquin (20 November 2011)

Boggo you didn't say they weren't qualified however you didn't say they were either.

As for the second part of your comment, I agree with you.

I would just like to see the industry cleaned up and the participants suitable qualified and made accountable.  That isn't the case at present.

An accountant must be suitably qualified, and accountable, to call themselves an accountant.  

I would just like to see the same applied to our financial planners.

I'd also like to see the same applied to our banking sector.  

Obviously a strong banking industry is extremely important to our country's continued growth and financial success but when they or their employees commit a crime, they need to own up and acknowledge that there has been a problem and they are willing to address it.


----------



## bunyip (20 November 2011)

Harleyquin said:


> Thanks Frank I'll take your comments on board.
> 
> We have committed a 'crime' apparently.  I, and many others, have already admitted that our 'crime' was to believe a financial planner, who had the financial backing of the CBA, and believe what they had to say.  I had dealt with that bank before and trusted them implicately.
> 
> The point is not, 'you should have done your research etc' , the point is 'we should have been able to trust the very people who let us down'.  End of story.




End of story eh? I don’t think so. That’s precisely the naÃ¯ve attitude that’s partly responsible for the situation you find yourself in. 
If only it was that easy – that we could take everything salesmen say as gospel truth.
The real end of the story though is that if you accept at face value everything salesmen tell you, without looking into it properly, you’re ‘cruisin’ for a bruisin’.
No matter if they’re selling real estate, cars, investment strategies, swimming pools or whatever – if you blindly believe the sales pitch then you’re setting yourself up for a fall.
People who can’t get this simple fact through their heads can end up paying a heavy price for their naivety and their trusting nature.

That’s not the way it should be, but it’s the way it is.

Incidentally, HQ, nobody has said or even hinted that you committed a crime or did anything immoral or illegal.


----------



## Julia (20 November 2011)

Harleyquin said:


> Boggo our storm financial planner had a university degree.



In what?


----------



## Frank Ainslie (20 November 2011)

*Why Storm's Professional Indemnity Insurance failed *

_*Extract from my letter to ASIC 16th November 2011*_

Subject: Re: Reg Guide 210 –“Compensation and Insurance arrangements for credit licensees.”

_"...There are two areas in particular with regard to "Professional Indemnity Insurance” that the Storm Financial saga has highlighted as major weaknesses in the system:

The first is the amount of cover in monetary terms that was taken out by Storm Financial. The total sum of Storm’s insurance - $25-45 million or so dollars - in a business with a turnover of hundreds of millions of dollars was simply ludicrous. Why someone in your Office never picked up on this is beyond me. Unfortunately, this National Credit Act has not fully addressed this issue either because it has totally missed the point in the first place? 

The point is that even if Storm Financial had professional indemnity insurance in place for $500 million or more, we, the investors, would not have been able to claim against such an insurance cover because Storm had no provision for such contained in the policy. 

'Claims made' policie - such as professional indemnity and directors' and officers' (D&O) insurance - only provide cover for claims made against the insured during the policy period. They invariably include a deeming provision, under which the insurance is extended to claims made outside of the policy period, provided they arise from circumstances notified to insurers within it. Without the deeming provision, the insured would be left without cover for such claims. 

The sentence, “They invariably include a deeming provision, under which the insurance is extended to claims made outside of the policy period, provided they arise from circumstances notified to insurers within it” is of particular relevance. You may recall that Storm’s professional indemnity insurance came up for renewal in December of 2008. Any claims that we had on Storm’s professional indemnity insurance were extinguished at that time which really makes the National Consumer Credit Protection Act 2009 (National Credit Act) a bit of a joke unless the Insurance Contracts Act is amended to accommodate circumstances such as these.

Let me quote you part of an article by ‘FindLaw Australia’s Michael Gill entitled, ‘Section 54 Review of the Insurance Contracts Act:

“Particular problems have emerged in relation to the operation of section 54 of the Insurance Contracts Act upon claims made and claims made and notified policies. The benefits extended to insureds by section 54 have been gradually extended by the courts. In particular, in the 2001 case of FAI General Insurance Company Ltd v Australian Hospital Care Pty Ltd, the High Court applied section 54 to a deeming clause in a professional indemnity policy. A deeming clause can extend an insured's cover even if no claim is made against the insured during the period of insurance. It extends cover provided that the insured gives written notice during the period of insurance if it becomes aware of any occurrence which might subsequently give rise to a claim against it. An insurer has been obliged to indemnify an insured who failed to notify circumstances discovered during the currency of a policy unless prejudice could be proved.

Since Australian Hospital Care, insurers writing claims made and claims made and notified policies have tended to omit deeming clauses from their policies. This leaves the insured to rely on the statutory right given by section 40(3) of the Act. It has been held by the New South Wales Court of Appeal in Gosford Council v GIO General Limited that section 54 does not apply in relation to the statutory right provided by section 40(3) but, as the Report rightly points out, 'there is still some uncertainty because the High Court may well reverse the effect of the decision in Gosford Council v GIO General Limited'.

The Report indicates that there was strong evidence that the judicial interpretation of section 54 was a factor having material impact on the professional indemnity insurance market in Australia. Some insurers, particularly London insurers, had withdrawn from the market, or had altered their policies in an effort to reduce the impact of the decisions. Others made it clear that they would withdraw if those alterations were found by subsequent judicial decisions to be ineffective. The reviewers also report that even where cover remained, the cost was increasing alarmingly and the comprehensiveness of the cover was declining.

The Report concludes that legislative reform is necessary in relation to the operation of section 54 on claims made and claims made and notified insurance. It recommends that section 54 be amended so as not to apply to a failure to notify circumstances that might give rise to a claim. This would amount to a statutory reversal of the High Court decision in Australian Hospital Care Pty Ltd.

Section 40(3) only gives a statutory protection to an insured where notice of facts that might give rise to a claim is made as soon as was reasonably practical but in any event before the insurance cover provided by the contract expired. The Panel has recognised that this could give rise to unfair results and has recommended an extended reporting period of 45 days after expiry of the insurance policy. There is also a recommendation that insurers provide a pre-expiry notice to insured of their need to notify circumstances, unless there is, to the insurer's knowledge, a broker involved.”

Investors in this country need an insurance cover that will protect them from the many rogues that roam the investment sector. It is appreciated that people cannot insure themselves against losses that arise in the investment market, but they should be able to effectively insure themselves against fraudulent or negligent behaviour by the financial advisory firms/individuals that ply their trade. They should also be able to claim after the event because many of them are not made aware of all the facts until it is all too late! An insurance industry that cannot devise a policy to cater for such eventualities lacks both imagination and commercial enterprise. It is also failing to meet the interests of its clients.

There were some Storm investors that took out an insurance cover with Storm believing that they were covered for loss should Storm fail. They were, of course, duped like the rest of us. The very fact that they could have the wool pulled over their eyes in this way is a sad indictment of the poor way this industry was regulated and does your organization no credit whatsoever. It’s time now, I feel, for concerted action on your part to atone for past deficiencies.

What needs to be done is simple enough. It should be incumbent on all credit licensees to take out a professional indemnity insurance cover for an adequate sum of money (sliding scale depending on the value of the individuals' investment assets) that contains a deeming clause extendable (for claim purposes) for a year beyond the expiration of the policy. The Storm fiasco should have taught your organization and this Government that nothing less is workable. This professional indemnity insurance cover should be mandatory! 

If it costs a little more so what! It's better than it costing investors everything later on! Investors would rather pay a little more now and have some form of security instead of being left out on a limb as they clearly have been!

For that matter the Government itself might consider offering a special form of insurance of its own to investors, effectively by-passing the insurance industry altogether. It would be: (1) a revenue earner, (2) it would restore confidence in the market place, and (3) it would ensure that the likes of another Storm Financial episode would be minimised.

Whatever, strong steps need to be taken now! Sometimes, it seems to us, the victims of Government ineptitude, that these conditions continue to persist in the financial sector because it suits certain vested interests, be they in the insurance sector, in the banking sector or wherever. Quite frankly, we, the people that pay the ultimate price, are sick and tired of it all. "_


----------



## Julia (20 November 2011)

tech/a said:


> Ive never read this thread.
> But this is the wisest thing you can possibly do.
> 
> I have a rule which I never break.
> ...




I totally agree.  However, I don't think such a philosophy should preclude people from seeking advice in an area where they have minimal experience.  I expect you get e.g. good tax advice from your accountant, and legal clarification where you need it.

But you're not going to go accepting crazy suggestions just because someone has set themselves up in an advisory capacity, are you?  

I've had an accountant who behaved completely unethically.  That doesn't mean I'm never going to use any accountant ever again.  Neither would I consider it reasonable to demonise an entire profession on the basis of that bad experience.


----------



## bunyip (20 November 2011)

Harleyquin said:


> Like the floods, storm and co have stripped the homes off thousands and _*they've *__*been left floundering without any idea of how or why*_, and then to boot, they've been called greedy.
> 
> One minute you think you're doing the right thing seeking and accepying financial advice and the next you're a _*greedy mongrel*_ who should have educated yourself and realised that what you were doing was wrong, what a load of hogwash.




That’s right – some Stormers still don’t seem to have a clear understanding of how or why this all happened. And their lack of understanding will continue unless they're enlightened by someone with knowledge in these areas. 
That's one of the main reasons why those of us who knew how to avoid the Storm Financials of this world bother to post on here.

We share our knowledge and experience, we point out the pitfalls in the Storm strategy, we point out the risk in margin loans, we point out the mistakes Stormers made, so that those mistakes and pitfalls can be avoided in the future.
Some Stormers are wise enough to glean something worthwhile from what we say. Others berate us for ‘attacking’ them, for being wise after the event, for being 'arm chair experts', for not ‘understanding’ their plight.
Such is life – help comes in many different forms, but you don’t always get thanked for trying to help people.

And HQ, another thing.......nobody has called you _‘greedy mongrels’_. In fact nobody is even making a blanket statement that you were all greedy. What we’ve said is that _*some*_ Stormers were greedy for chasing more wealth and income when they were already financially well of and nicely set up for a comfortable retirement.
So please get a grip on yourself, stop ranting on with silly nonsense, and try to speak truthfully. A week or two back you received favorable comment from a number of us for the dignity you’ve shown on this forum in spite of the difficult time you’ve been through. It’s a shame to see you starting to abandon that dignity.


----------



## Glen48 (20 November 2011)

My mother called in a FA or knew FA (take that any way you like ) adviser from her bank who told her to invest in a arm of that bank  as  it now turns out the company concerned is in financial trouble and frozen her funds and have agreed to  re- pay 25% of the principle over the next few years however it look like she can claim hardship and get some back sooner  how much is not  know and will take some week for an answer.
 So if some one can go to a bank for advise  on money and still end up getting fleeced what hope is there for any one.


----------



## Glen48 (20 November 2011)

GG during a phone hacking experiment I some how over heard a conversation from North Ward  about Pres. Obama when he was staying in a Bungalow at the Ross Island  abode.

 The topic was he Keynesian or not and the other person managed to established he was in fact born in Hawaii not Kenya then the person gave him a gift of KY gel to pass on to Herman Cain. 
 I realise your could have been on your  sojourn to the land of Satan so may not be able to confirm this also a story about a statesman like person  quelling riots run by the OHA ( Occupy Hedges Avenue ) group.

I relaise there could be an effort to besmirch your good name here.

Can you confirm these stories ?


----------



## Solly (20 November 2011)

Garpal Gumnut said:


> Solly, mate,
> 
> I have arrived at the mate's "Church" on the Gold Coast having been met this afternoon by a frantic mob of believers at the Wild Scotsman in Gin Gin who travelled north in a Toyota Tarago to plead their beliefs and financial statements. The books are in an interesting state but with this earthly financial year yet to end for in excess of seven months I have persuaded the congregation to consider Casa Cassimatis as the base for a new church, The Church of the Coral Sea.
> 
> ...




GG 

I hope it wasn't a rented Tarago from the GC. I suggest a thorough vacuuming before returning to the depot. All kinds of residues can be found lurking which can have quite a strange effect on the K9 Squad, causing them to howl at the moon for days.

I have reviewed your offer and this is a sound proposal, needs no prospectus or further scrutiny or other opinion. It is a noble use for such already hallowed grounds. 
It would only need some minor works to install a bell tower. I'm sure the bell ringers could thread the pull ropes through the featured chandelier and sound off a set of method ringing every time a soul has been saved from the financial dark side.

Lady P and I will have a spare lazy 4 soon, as soon as it's cleaned in the High Rollers Room at the Big J. Let me know where to send the fiat. I've got a couple of mates who can assist with delivery, they have large panniers on their Fat Boys and is only a short trip from the Hinterland.

I've been reviewing the vision from the auction. Saw this still of Byrnsie. To me it sure does look like he's preaching to the converted. I wonder if he'd be interested in scheduling a few services to the faithful between his open house inspections ?

http://resources3.news.com.au/images/2011/11/19/1226199/934839-cassimatis-mansion-auction-nov-19.jpg

S


----------



## Solly (21 November 2011)

> *"Collapses won't stop under ASIC: Ripoll*
> 
> Panel tackles opt-in and intra-fund advice
> An industry panel has responded to questions about ASIC's powers and impact of the FOFA reforms."




More by Philippa Yelland @ www.investordaily.com


----------



## Frank Ainslie (21 November 2011)

gardie said:


> I cannot believe the attacks made here on people that have been decimated by Storm and the banks.
> 
> I have had an experience involving helping to try and pick up the pieces for people who were decimated by taking the advice of their financial planner. The end result on the back of the bad advice was financial decimation.
> 
> ...




Hi Gardie,

I see that we have someone that truly understands. 

When someone is standing on a ledge waiting to jump off, some people will try and save him or her and others want to see that person fall. Anyone that wants to blame the Storm victims for what happened rather than go after the real culprits, to my mind, falls into the second category. Yet, these same _"Jump!" _merchants will be the first ones shouting and bawling if they go into hospital to have a leg amputated and wake up in the morning to find that the surgeons took off the good leg by mistake.

_"But I thought he was a proper surgeon? I thought he was qualified?_

_"You mean Doctor Patel? We did too but no one bothered to check on his credentials! No one did the research!"_

Individuals that blithely go through life imbued with hubris and arrogance often find that life has a few curved balls in the back cupboard that it has been saving up for them. When it happens, it will be interesting to see how they cope!

Regards

FA


----------



## SJG1974 (21 November 2011)

Frank Ainslie said:


> Hi Gardie,
> 
> I see that we have someone that truly understands.
> 
> ...




Thats it isn't it Frank...someone agrees with you and they understand?

Someone doesn't and they are short sighted, one eyed, arrogant, ill-informed, and whatever else you call people who don't agree with you. 

Noone is blaming the Storm victims Frank.  Noone is dancing around rubbing your noses in it. I know you love emphasising wherever possible that you are a victim, and you are a victim.  Many parties played a role in your financial demise, but the fact that you won't acknowledge or admit the role YOU played is staggering.

You and others ask the question about what sort of a world we live in where the banks and financial planners can get away with this.  Well I will counter with a question:

*What sort of a world do we live in where people cannot take responsibility for their own actions? *

Thats you Frank.

YOU entrusted your life savings in a strategy YOU DID NOT UNDERSTAND.  You just blindly followed what your adviser said and didn't bother to verify his claims.  Surely your life savings demanded more attention than that?
If you didn't understand it, why did you do it??????

These were your life savings Frank.  Did you not value them enough to ensure you understood what was being done with them?

Sure we would like to live in some kind of utopia where everyone can be trusted to do the right thing and nothing can go wrong, but the world doesn't work like that. Surely as a worldly businessman you knew that didn't you?

It is simple common sense to ensure you understand where your life savings were being committed. It was a simple, yet flawed strategy Frank, which you decided to commit to without taking the time to get a second opinion or do some checking of your own.

Hence, you are a victim of your own lack of common sense, amongst other things.


----------



## maccka (21 November 2011)

One of the common training/education/professional development theories is the *Conscious Competence Learning Model*.  It explains 4 stages of learning that are particularly relevant to adults in all walks of life when learning a new concept or skill.
*
Stage 1 Unconscious Incompetence* - People have no idea that they don't know something.  It can occur when people don't know that something exists so therefore they don't know about it or it can occur when people think they understand something but in reality don't.  

*Stage 2 Conscious Incompetence* - People know they don't know something.  For example - I know that I understand the theory of how to fly a plane however I also know I don't have the skills required to do so yet.  People in this area will often seek assistance from others who they consider skilled or qualified in order to do particular tasks.  For example, I would seek a qualified pilot to do the flying in the event that I need to fly somewhere.

*Stage 3 Conscious Competence* - People are aware of what they can do.  They utilise and apply their learning and skills and have to think constantly about what they are doing and why.

*Stage 4 Unconscious Competence* - People are so highly skilled or practiced that they can perform tasks without thinking about what they are doing and why.  These people often describe themselves as following their gut.

I think that if you were to look at many of the clients of Storm (or any financial planning product) you would find a small number that fit into Stage 3, tiny number that fit into Stage 4 and that many/most of them fit into Stage 1 and 2.  And in fact I would go so far as to suggest that some fit into both 1 & 2.  

Stage 1 - People in this stage often don't ask the right questions as they aren't aware (1) that they need to or (2) what questions they should be asking.  People thought that they had learned large amounts about how financial planning worked through the considerable hours of training and learning that they had to do as part of the Storm client seminars but were unaware of the things that they really didn't understand until it was too late.

Stage 2 - They sought professional help (that they paid big money for believing the fees were reasonable and justified) from people who were founding members of a seemingly well respected professional body called FPA and many of whom held tertiary level qualifications in financial planning.  

These people knew enough about themselves to know that they didn't know enough about the industry so they asked lots of questions.  Many people asked for references about the company from other people they knew and trusted (friends and family); they spoke to their bank managers (who supported the move - we know why now don't we?); they checked with the professional associations and many of the people I know did check out the company and its methods with other financial planners.

This is not a simple black and white situation guys.  It would be nice if people stopped beating themselves and others up over it.  There are complex legal/financial/emotional and psychological matters here.

The only black and white part of this is that Stormers are under a huge amount of stress (still) and many of them are doing their level best to get themselves out of it.  Some are trying to make sure that any institution that was complicit is brought to task.  For those of you desperate to apportion blame you should feel quite confident that when the time comes for blame to be apportioned and restitution to be paid (if at all) the courts will recognize the part that all parties played and take that into consideration.

As for the pages and pages of he said/she said, your fault/their fault nonsense that we have witnessed in recent weeks - *enough is enough*.  You are constantly covering the same ground and trampling it into a compacted mass of nonsense with very little basis in fact or even opinion worth reading such a repeated number of times.  It's hard enough to see the truth in the muddy water without the continual stirring of the mud and muck to make it worse.

Perhaps you'd all be best to go away and cool your heels for a while.  Perhaps even you might like to choose to utilize some selective ignoring of parties that you know you don't (and never will) agree with.  

As it comes dangerously close to the first anniversary of the suicide of one of the Storm Financial clients extremely close to me I would dearly love to see a degree of decorum and understanding between members of this forum. 

cheers
Maccka


----------



## Julia (21 November 2011)

Maccka, that's a balanced and sensible post.  I like the diagram and its analysis.
(People laughed at Donald Rumsfeld's "Known Knowns and Known Unknowns" speech, but what he said was spot on and can - as you point out here - be related to many of life's situations.)

Agree that this thread has been going round in circles for some time.

I determine to stop commenting as I've nothing new to add.  But then a couple of people post something so outrageous that I won't let it go unchallenged.

The main example of this is the branding of the entire financial services industry as unethical and incompetent.  That is simply not correct and it is totally unfair.


----------



## DocK (21 November 2011)

maccka said:


> This is not a simple black and white situation guys.  It would be nice if people stopped beating themselves and others up over it.  There are complex legal/financial/emotional and psychological matters here.
> 
> The only black and white part of this is that Stormers are under a huge amount of stress (still) and many of them are doing their level best to get themselves out of it.  Some are trying to make sure that any institution that was complicit is brought to task.  For those of you desperate to apportion blame you should feel quite confident that when the time comes for blame to be apportioned and restitution to be paid (if at all) the courts will recognize the part that all parties played and take that into consideration.
> 
> ...




Very well said Maccka.  I don't see the probability as high, but it would indeed be nice to see a degree of decorum and understanding.  The personal attacks and sniping have become monotonous on both sides lately, and manners appear to be a thing of the past.  I know there are some hanging on by a thread at this time of year, it sometimes doesn't take a lot to let depression gain the upper hand.  Arguing with strangers who will never understand the way you feel is unlikely to be productive - best to put the thread to bed imo


----------



## Mindstorm (21 November 2011)

maccka said:


> Hi GG,
> 
> SICAG held its Annual General Meeting on 19 June 2010.  Noel and Mark were re-elected.  Some positions in the committee changed but the newly  elected committee is very similar.
> 
> ...




Quoting an old post of your's Maccka, and to change the current subject of the thread for a moment:

I've been looking through previous posts on this thread, (obviously too much time on my hands), and there seems to be have been much made of the continued presence of Noel O'Brien and Mark Weir on the SICAG Committee in some posts.

I was at the meeting at the Ox in Margate when these two were voted onto the SICAG Committee, (amongst those others who were nomitated and voted in on that occasion).  At that time I didn't know anyone else who was involved with Storm Financial, and I didn't take part in that vote.

They've resigned and been re-nomitated twice now to my knowledge, at SICAG AGMs.  (Please anyone feel welcome to correct me if I'm wrong here.)

I believe that another SICAG AGM is due in the coming weeks, and yet again they will have to resign their positions, (as will all of the committee).

It'll be interesting to see if anyone steps forward to take their place.

Personally, I'll be voting them both in again, because I don't think anyone else could take over from them now.  I do wonder though, if they would have put their hands up in 2009 if they'd realised that they'd be 'stuck' on the committee for the duration.

In the (nearly) three years now since the formation of SICAG, I don't think that there could be anyone amongst the SICAG members that I've met personally who would be willing to take on the job that they have.

Whether you believe it or not, that committee, more especially Mark Weir and Noel O'brien, have put themselves on the line for many people.  You can tell me they did this to forward their own best interests, but I think the personal price they've paid in speaking for others, when they are so obviously able to fight the banks on a one to one basis to solve their own situations, (and not involve themselves in other storm clients problems), speaks for itself.  

Maccka, I'm very sorry for your loss.  I know lots of sicag members now, but none who have found themselves in such a desparate situation where they thought it best to take their own life.  Sincere condolences.

MS


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## gardie (21 November 2011)

Gee SJG1974 you must feel good ripping into Frank again.

Do you not think that he would everyday ask himself why he didnt do the things you  are suggesting he did.

Were you the kid at  school with the magnify glass burning ants or just the school bully ?

A lot of people have been decimated because in hindsight they were too trusting. Now people here seem to take pleasure in kicking the c--p out of them because they have superior financial knowledge.

If you cannot see that the banks in engaging in these extreme lending practices have a case to answer then you cannot see the woods for the tree's.


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## Mindstorm (21 November 2011)

Maccka,

Sorry, I meant to ask you this in my previous post.

How do you know that Manny is not part of SICAG?

Are you in a position where you know who is a member of sicag?

MS


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## Harleyquin (21 November 2011)

Thank you so much Maccka for such a sensible post and a good reference point for all of us when we get a little hot under the collar.  

It' s not always easy being a storm survivor.


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## SJG1974 (21 November 2011)

gardie said:


> Gee SJG1974 you must feel good ripping into Frank again.
> 
> Do you not think that he would everyday ask himself why he didnt do the things you  are suggesting he did.
> 
> ...




No doubt the banks have a case to answer.  Never said they don't. Perhaps rather than take the high moral ground, you should go back and read my posts before making accusations. 

If he is going to come on a public forum and deal out some of the over the top rubbish he has, he has to expect people to question his motives in going with Storm in the first place. He is yet to provide an answer for this that makes any sense whatseover. Here is a man who had in excess of $1m unencumbered, wanted $45,000 p.a. to live on, and saw merit in a strategy to borrow against his home, and borrow again via a margin loan, and put it all on the sharemarket.  And it all goes horribly wrong, and everyone else is to blame?  Come on, give me a break.

I don't delight in his misfortune, far from it.  But investing in shares is a risky business.  As is gearing.  As is double gearing. As is committing your life savings to a strategy which involved all three of these things and not having an understanding of the risks involved. As is handing you entire financial future to a third party and not taking the time to understand what he is doing with your money.

And frank was prepared to take on all of these risks, so he should be prepared to accept some of the responsibility for the loss that occurred.

You can disagree with me, I don't really care. Everyone knows how I feel about this whole episode.  Time to move on now, as others have suggested.  I think I will leave it at that and go back to burning ants with my magnifying glass.


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## bunyip (21 November 2011)

gardie said:


> Gee SJG1974 you must feel good ripping into Frank again.
> 
> Do you not think that he would everyday ask himself why he didnt do the things you  are suggesting he did.
> 
> ...




Gardie

If we’ve said it once, we said it a hundred times – we’re not claiming that the banks have no case to answer. We’ve said over and over that the banks should be accountable for their actions – if those actions can be proven in a court of law to have been illegal, then the banks should be dealt with accordingly.
It's looking like you’re rather slow on the uptake – will we have to tell you a hundred more times that we’re not defending the banks or denying that they’ve done something wrong?

As for SJG ‘ripping into Frank again’ – you are of course entitled to your opinion on that score. My view is somewhat different – I say that SJG is simply pointing out to Frank in a forthright and completely truthful manner a number of things that Frank is in self-denial about.
SJG has not used abusive language to get his point across, he hasn’t even come close to duplicating the scornful terminology that Frank uses to describe those who disagree with him.
Are we supposed to desist from being forthright and honest because it might upset someone? If you can’t handle someone speaking the truth, then why are you on this forum? Maybe it would suit you better if SJG was a habitual liar instead of being honest and forthright.


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## Harleyquin (22 November 2011)

Julia you've said earlier that this statement irks you. _''The main example of this is the branding of the entire financial services industry as unethical and incompetent. That is simply not correct and it is totally unfair._''  I can understand why this would upset many as you're right, it is unfair.  

The problem for anyone looking for financial help for the first time is that the numbers of those in the financial industry who are unethical and incompetent are far too high.  Some posters have said 'there have always been shonks in the industry' etc. and the  impression that I'm getting from some is, ''this is human nature, get over it.''

Until the industry is able to clean out the shonks and sharks, by way of regular monitoring, auditing or whatever works.  I feel sorry for the those in the financial industry who are genuine.

Finding out that just because an advisor is approved by ASIC and the FPA means nothing has been a shock.  The incompetence shown by the government body/ASIC who are unable or unwilling to rectify the problems in the industry remains a huge problem.  The FPA told me that there is nothing they could do to help even though our advisor was a member of the FPA.  Now we're seeing ads promoting FPA recommended planners.  No wonder so many of us are sceptical. 

Knowing who to trust is still the hardest thing for the average first time seeker of financial help.


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## Solly (22 November 2011)

Harleyquin said:


> Julia you've said earlier that this statement irks you. _''The main example of this is the branding of the entire financial services industry as unethical and incompetent. That is simply not correct and it is totally unfair._''  I can understand why this would upset many as you're right, it is unfair.
> 
> The problem for anyone looking for financial help for the first time is that the numbers of those in the financial industry who are unethical and incompetent are far too high.  Some posters have said 'there have always been shonks in the industry' etc. and the  impression that I'm getting from some is, ''this is human nature, get over it.''
> 
> ...




Harleyquin,
This article may be of interest to you. It appears that Bernie Ripoll has some concerns about the Future of Financial Advice (FOFA) package and also he still has concerns about people's understanding of risk.

From, www.investordaily.com

And here's another article where Bernie Ripoll discusses more about FOFA from,

www.financialstandard.com.au


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## doobsy (22 November 2011)

Harleyquin said:


> Julia you've said earlier that this statement irks you. _''The main example of this is the branding of the entire financial services industry as unethical and incompetent. That is simply not correct and it is totally unfair._''  I can understand why this would upset many as you're right, it is unfair.
> 
> The problem for anyone looking for financial help for the first time is that the numbers of those in the financial industry who are unethical and incompetent are far too high.  Some posters have said 'there have always been shonks in the industry' etc. and the  impression that I'm getting from some is, ''this is human nature, get over it.''
> 
> ...




HQ

Can you please give me a single example of an Australian industry that doesn't have shonks/ rogue operators / those who stretch the boundaries.


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## Igetit (22 November 2011)

doobsy said:


> HQ
> 
> Can you please give me a single example of an Australian industry that doesn't have shonks/ rogue operators / those who stretch the boundaries.




St Vincent de Paul, Salvation Army, Red Cross, Sisters of Mercy, The BANK (OOPSY, that last one was a mistake!)


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## bunyip (22 November 2011)

doobsy said:


> HQ
> 
> Can you please give me a single example of an Australian industry that doesn't have shonks/ rogue operators / those who stretch the boundaries.




Doobsy makes a good point here, HQ.

Another question to consider is_ ‘how many shonky operators are there in the financial services industry’?  _
I’d suggest the number is very small in percentage terms. If you’d consulted twenty or thirty or even fifty different financial planning firms when you consulted Storm, I’ll hazard a guess that Storm would have been the only one recommending a strategy so risky and flawed that it was guaranteed to fail once the stock market changed from bullish to bearish.
I daresay all the other firms would have recommended much safer and more conservative strategies something along the lines of what Doosby outlined in some of his earlier posts.

To totally weed out every crooked operator in the financial planning industry is as impossible as weeding out every corrupt cop or politician.
Are outfits like ASIC and the FPA doing a satisfactory job of weeding out the shonks? Perhaps not, but if those watchdog organizations weren’t there then it’d be open slather for any crook to set up shop as a financial planner. Then we'd see a much larger percentage of rogue operators in the industry.


----------



## Julia (22 November 2011)

Harleyquin said:


> The problem for anyone looking for financial help for the first time is that the numbers of those in the financial industry who are unethical and incompetent are far too high.



How have you established this?   I doubt you have any realistic basis for such a statement.  You have certainly experienced one totally unethical such person but I don't see how you can extrapolate from that the conclusion that this is widespread throughout the industry.



> Some posters have said 'there have always been shonks in the industry' etc. and the  impression that I'm getting from some is, ''this is human nature, get over it.''



Well, HQ, whoever said that was simply being pragmatic, and until you acknowledge this and as a result learn to be discerning, you'll go on and on about how unfair it all is.  And you will not move on.

Just accept that human nature consists of the very best and the very worst and everything in between.

As Doobsy has suggested, it's difficult to come up with any field of endeavour which is free of unethical behaviour.

Consider the gynaecologist who - simply because he disliked women - performed unnecessary hysterectomies.

Or the GP, addicted to morphine, who took for himself the much needed prescriptions for his terminally ill patients, depriving them of pain relief.

Or the dentist who quotes for an expensive procedure, then does a crap patch up job.
The patient doesn't know until it fails shortly after.

Or the accountant who siphons off his clients' funds with some creative accounting, the client never even knowing it has happened.

And these are "the professions".  I could go on about various other occupations, e.g. the shoddily built house when the customer is paying for top quality. 

Etc Etc.

Voltaire, in his satire "Candide", created a character called Dr. Pangloss.  Dr Pangloss believed that "everything is for the best in this best of all possible worlds", i.e. he was the ultimate optimist.  He was also utterly unrealistic.  

There's no point in adopting a panglossian approach to the world.  It is what it is.
To expect that because someone belongs to some so called 'professional body' and has acquired a licence to give financial advice, they are therefore utterly and absolutely trustworthy is simply to deny reality.

This is not a criticism of you.  Just a suggestion that you need to accept that the only people who absolutely have your best interests at heart are those who love you.
Human beings are by nature selfish in that they want what is best for themselves.
Some are disposed to take this to the extent of disregarding any notion of ethical behaviour.  You cannot change that.  You can, however, change your view of the world.


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## SJG1974 (22 November 2011)

bunyip said:


> To totally weed out every crooked operator in the financial planning industry is as impossible as weeding out every corrupt cop or politician.




Yep.  Like it or not, thats the world we live in.  If people want to take advantage of others, they will find a way to do so. No matter what industry they work in, or what professional body they belong to.  And more often than not, by the time they are caught, the damage has been done.



Julia said:


> There's no point in adopting a panglossian approach to the world.  It is what it is.
> To expect that because someone belongs to some so called 'professional body' and has acquired a licence to give financial advice, they are therefore utterly and absolutely trustworthy is simply to deny reality.
> 
> This is not a criticism of you.  Just a suggestion that you need to accept that the only people who absolutely have your best interests at heart are those who love you.
> ...





Well said.


----------



## Harleyquin (23 November 2011)

Thanks for the links Solly, I'll read them shortly, and hope that other stormies also read the information.  

No Doobsy I can't give you one example because I know that unfortunately you're right, but that doesn't necessarily make it right, or mean that any of us shouldn't consider any proposal which may improve the situation.  I know we're all human and we have a rotten side, some of the rotten sides though have little on the other side.

Bunyip we all know now that you're right re storm.  We're all much wiser after the event, doesn't make it any easier to accept that it's right though, and I''m bloodyminded enough to continue to push for change, if that's possible, and I'd like to see everyone seeking advice to read a thread like this so that prospective finance seekers have a more balanced view and more information on making that all important decision, and how bad it can be if you get it wrong.

What hasn't escaped me though is the number of investors who don't use advisors, there's a good reason for that I suspect.  I know there are good advisors out there, I'm prepared though to take the advice of others and 'do it for myself'.  I don't speak for other stormies or group/s, however the few that I do have regular contact with, feel as I do, don't trust again.

Agree totally with your second paragraph Bunyip, however once again it doesn't necessarily make it right either.  As I see it we have two main options, accept the situation or push for hopefully a more positive change.

Yes agree Julia well said, I do realise what some of my problems are so will make a note of what you've said and try and take them on board.  This may also be true for some other stormies, as I said yesterday, it's not easy being a storm survivor and it's taken quite a toll and taking a long time to get back to any form of a normal existence.  

We've all suffered dreadfully, and I don't like 'comparing our anguish' with other disasters in life, it just feels too hard at present, that's not to say that I, and other stormies I presume, don't think about the awful things that happen to others and feel for them.  As another stormie said to me in a recent PM 'we have to remember that we've only lost money'.  Initially that was true however after three years of stress many of us have lost far far more than 'just money'.

It's not all bad though, three years ago we were all in absolute shock and in a black hole/tunnel, today we can see a light at the end of the tunnel and most of us are determined to enjoy the simple things in life.  The stormies that I've meet are the nicest people you could ever hope to meet and we all support each other as best we can.  Personally I now have more good days than bad because I can 'talk' about it and am determined to 'get over it as best as I can'


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## Solly (23 November 2011)

Good news for some Stormers now that Justice John Reeves has approved amendments to original class action claim and is expanded to now include a new breach of contract claim, misleading & deceptive conduct & unconscionable conduct.

I am sure there is much more to come...


----------



## Mash (23 November 2011)

CBA counsel Robert Hollo SC has described the new claims against CBA as "tectonic"..... earth-shattering. 

ASIC won't do it so we will.


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## Igetit (23 November 2011)

Solly said:


> Good news for some Stormers now that Justice John Reeves has approved amendments to original class action claim and is expanded to now include a new breach of contract claim, misleading & deceptive conduct & unconscionable conduct.
> 
> I am sure there is much more to come...




Hi Solly, 

Yes indeed. The net seems to be being cast wider and wider for the poor old Banks. Was advised of Reeves J's directions late yesterday afternoon. Seems to be a bit of a trend emerging in these proceedings. 

Interestingly, to this point, not a single mention of any Storm victim being: gullible, lazy, stupid or greedy. These descriptors (inaccurate as they are), of course, are not crimes. The Banks find themselves in this ever more precarious position because - prima facie at least - they appear to have broken a number of laws; for which the Court now requests they offer up their defences. To the sideline observer, it seems that it is only the Banks behaviour that is being brought into focus as the matter now gains momentum. Why is that we have to wonder?

I think the strategy of the Banks going forward has been well anticipated. To date things don't seem to being running their way; I suspect any preconceptions they have about how things are going to play out going forward might end up being unfounded. Seeking to delay the inevitable march to judgement, rather than frustrating a band of people who have demonstrated vast reserves of resilience in the face of overwhelming hardship, I feel will only succeed in making an angry mob angrier. Might not end up being a good idea going there. Just a thought.


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## doobsy (23 November 2011)

The bloke who ran the original enquiry gets it.

http://www.wealthprofessional.com.au/article/blame-poor-advice-not-product-failure-120230.aspx


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## SJG1974 (23 November 2011)

Does anyone know what compensation will be sought from the banks?

Will clients be trying to recover all their losses?

Will clients be trying to recover losses sustained after the margin calls were supposed to be made?

Will they be claiming losses on the hypothetical model that would have seen them supposedly recover some of the losses if the Storm Index Funds weren't closed down and the clients (along with their trusted Storm adviser) could manage their way out of it (so that they remain screwed today, but not completely wiped out)?

Does anyone know???

If Storm and ther bank are guilty of running an unlicenced MIS, can clients claim all of their losses back (even though this "scheme" was a simple index fund)? Will Storm clients be forced to pay back their earnings when the market was going gangbusters?  

The level of compensation that is granted to victims could open up a whole can of worms.


----------



## Solly (23 November 2011)

Igetit said:


> Hi Solly,
> 
> Yes indeed. The net seems to be being cast wider and wider for the poor old Banks. Was advised of Reeves J's directions late yesterday afternoon. Seems to be a bit of a trend emerging in these proceedings.
> 
> ...




Hi Igetit

Yes I agree, the Stormers are a resilient collective and when I have been amongst them at Harry's I have definitely sensed the underlying anger and restlessness.

I am wondering if the Levitt video is out of post yet ?

I am looking forward to seeing this and hope it portrays an unbiased factual representation of the saga to date.

S


----------



## Igetit (23 November 2011)

SJG1974 said:


> Does anyone know what compensation will be sought from the banks?
> 
> Will clients be trying to recover all their losses?
> 
> ...




Hi SJG 1974,

It seems that should the UMIS claim get up all contributions made by individuals to the scheme - including prepayment of interest - and all earnings generated as a result of investing in the scheme (dividends, distributions and capital growth), will be refundable to the individual investor. That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would *not*, therefore, be required to *refund* any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present. 

You are correct, SJG, the worm can is beginning to shake. The payout to the investor, will of course be fair, as it will reflect their position had they been invested in a legal scheme. No more, no less.


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## SJG1974 (23 November 2011)

Igetit said:


> To the sideline observer, it seems that it is only the Banks behaviour that is being brought into focus as the matter now gains momentum. Why is that we have to wonder?




You have answered this previously, because the banks are the only party still in operation and therefore the only ones that can be brought to account. Storm is dead.  Manny and Julie still have their day of reckoning to come.

They are the only party left who APPEAR to have broken any laws and have the capacity to pay for it.  As you say, whatever people may say about the victims (and you know my views, which obviously differ from yours, so no need to go there), they haven't broken any laws.


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## SJG1974 (23 November 2011)

Igetit said:


> Hi SJG 1974,
> 
> It seems that should the UMIS claim get up all contributions made by individuals to the scheme - including prepayment of interest - and all earnings generated as a result of investing in the scheme (dividends, distributions and capital growth), will be refundable to the individual investor. That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would *not*, therefore, be required to *refund* any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present.
> 
> You are correct, SJG, the worm can is beginning to shake. The payout to the investor, will of course be fair, as it will reflect their position had they been invested in a legal scheme. No more, no less.




Thanks Igetit,

So am I right in assuming that, given the scheme was a simple index fund, subject to a margin loan which, despite some special provision increasing the LVR, was just a typical margin loan, the kind of which is available from many different providers, and was operated as such, that they would not have suffered any loss from being in an UMIS compared to a RMIS from the time they invested up to late 2008? Therefore compensation for this period would be minimal?


----------



## Igetit (23 November 2011)

SJG1974 said:


> Thanks Igetit,
> 
> So am I right in assuming that, given the scheme was a simple index fund, subject to a margin loan which, despite some special provision increasing the LVR, was just a typical margin loan, the kind of which is available from many different providers, and was operated as such, that they would not have suffered any loss from being in an UMIS compared to a RMIS from the time they invested up to late 2008? Therefore compensation for this period would be minimal?




Hi SJG 1974,

The answer is the answer I previously gave. Very simply put, whatever the individual contributed to the scheme over their period of involvement is refundable to them. This includes all personal monies contributed, interest paid on any attached margin loan and dividend/distribution/capital growth. 

How "minimal" or otherwise their *loss* may have been is not relevant to the calculation. The compensation amount is based on *contributions* and returns on investment over the life of the scheme. Whether or not an UMIS gains or loses money over the course of its operation is not the key to the assessment of damage. 

Your tone, if you don't mind me saying, suggests a preference on your part that the compensation payment be minimal. Is that correct or am I reading too much into things? Doesn't really matter, just curious.


----------



## SJG1974 (23 November 2011)

Igetit said:


> Your tone, if you don't mind me saying, suggests a preference on your part that the compensation payment be minimal. Is that correct or am I reading too much into things? Doesn't really matter, just curious.




Igetit,

As you know, I think the victims need to accept some responsibility for taking on a high risk strategy.  You take a risk, you have to accept some of the consequences if it doesn;t work out.  I won't argue about this any more.

Technically, you have one investor who undertook the same strategy, say using a Vangaurd Index Fund, who has to accept his losses, while Storm victims, because their index fund was unregistered, get to get their original capital back? Am I reading that correctly?

So they take a hige risk, get wiped out, but due to a technicality (I know it is more than that), they get to start again.

Do you think this is fair?

Based on that, and it may seem callous, I hope it can be proven that it wasn't an unregistered fund. Because in the end, the fund itself behaved like an index fund, because it was an index fund, just as all the other index funds did.  The clients werent burned by being in an unregistered fund in my opinion, so they shouldn't be compensated for investing in one.  Sure compensation should come for the non issuing of margin calls and things that happened after that, but as far as I can tell, from the times the unregistered index fund started to when it stopped, it was a simple index fund and behaved as such.


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## Igetit (23 November 2011)

SJG1974 said:


> Igetit,
> 
> As you know, I think the victims need to accept some responsibility for taking on a high risk strategy.  You take a risk, you have to accept some of the consequences if it doesn;t work out.  I won't argue about this any more.
> 
> ...




Hi SJG 1974,

What I think is fair or not fair is probably not that important. I think that the law will be interpreted correctly and a decision will be made. The compensation available to unwitting investors who have participated in an UMIS is not of my making. Whether the payment be too much or too little is not really worth us wasting our time on. It is, as they say, what it is.

Another question SJG perhaps worth pondering is this:

What if the Storm investors were pulled aside at the beginning of their "investment journey of discovery" and told - look guys, this thing you are embarking on with these guys (Bank and Storm) is pretty dodgy. Double gearing, borrowing against your home and borrowing some more, and then getting your mortgaged home revalued to borrow more and then being compelled to remain in a falling market by reckless manipulation of your margin account LVR - not so smart. But, and here's the kicker, they've got a system set up that churns this process along no holds barred. You might find it pretty tough to get off this merry go round the way these folks have organized things for you. Importantly, your lender is taking no risk in any of this and is fully supportive of the doctrine being espoused by your adviser. The reason - they've decided that it is a great model for them to make a profit; so the two have joined forces as it were. The relationship they have needs to be fully explained to you - the pros and cons of it all. Because it is dangerous. If they haven't, they are probably involved in the running of an UMIS.

Had this been explained - nobody would have participated in this scheme. Nobody. Therefore, they do need to have everything returned to them. Because the money invested would have been invested in another vehicle with different guidance - maybe they would have sustained losses elsewhere. Maybe not. But now we are playing a guessing game. All we can really legitimately calculate is what was invested in the UMIS. That is the loss. Get it!

You seem like a nice enough bloke. What we (you and I) think about what the quantum of compensation should be - doesn't matter.


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## Solly (23 November 2011)

Follow-up on the auction;



> *Storm mansion attracts few bids*
> THE mansion of Storm Financial founders Emmanuel and Julie Cassimatis is expected to be sold today after being passed in at auction for $1.35 million at the weekend.




More @ http://www.townsvillebulletin.com.au/article/2011/11/21/285051_news.html

GG
Have a look at the third comment posted. Looks like Byrnsie has at least one big fan 
S


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## Julia (23 November 2011)

Igetit said:


> What if the Storm investors were pulled aside at the beginning of their "investment journey of discovery" and told - look guys, this thing you are embarking on with these guys (Bank and Storm) is pretty dodgy. Double gearing, borrowing against your home and borrowing some more, and then getting your mortgaged home revalued to borrow more....



This is where you come to the fundamental argument on this thread, viz. why would anyone need to explain to anyone that the above is massively risky for people at or near retirement, even if less of a problem for younger people?


----------



## Igetit (23 November 2011)

Julia said:


> This is where you come to the fundamental argument on this thread, viz. why would anyone need to explain to anyone that the above is massively risky for people at or near retirement, even if less of a problem for younger people?





Hi Julia, 

Because the elderly and defenseless sometimes need to have things explained to them. Not only the true extent of the risk of the proposal, but the true nature of the relationship between the two parties pulling the puppet strings. This latter issue, I dare say in light of what is now transpiring in the Federal Court, is in fact the "fundamental argument" of this matter. Indeed, it grows ever more apparent that it is the *only* issue of interest to the Court. 

That is where most people's attention is now directed incidentally. Feel free to make another comment though.


----------



## Solly (23 November 2011)

Julia said:


> This is where you come to the fundamental argument on this thread, viz. why would anyone need to explain to anyone that the above is massively risky for people at or near retirement, even if less of a problem for younger people?




Julia,
This was a question I posed directly to my friend. His response to me was that with all the checking he did he believed that the strategy was sound and as presented it had all the safeguards in place for a worst case scenario. 

It was his basic belief that allowed him to proceed. I accepted this but the strategy would never have passed my "smell test" but then again I have a wider and more varied background than my friend and have also met many dubious spruikers and dream-makers both on and offshore. 

I suppose we are all different in the manner we assess risk and have varied life experiences to draw on when making major decisions. As the action has now taken a different direction in the courts, the focus will now be on those matters and I am looking forward to the next episodes in this saga.

S


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## SJG1974 (23 November 2011)

Igetit said:


> That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would *not*, therefore, be required to *refund* any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present.




So the client gets to keep their profits from when the UMIS made them money (because they would have earned that money had they been in a RMIS), but they don't suffer the losses because it is a UMIS?  They also then get to claim for a lost opportunity for not being in the market since November 2008?  So they get the best of both worlds....ride the tails of the bull market, get to keep their profits, enjoy the types of holidays and the like that most only dream of, and then recover their losses because they were in a UMIS?  And whats more, they can make a claim because the market went up and they weren't in it?

How do I invest in one of these UMIS?  Money for jam if you ask me....high returns, no risk.



Igetit said:


> Therefore, they do need to have everything returned to them. Because the money invested would have been invested in another vehicle with different guidance - maybe they would have sustained losses elsewhere. Maybe not. But now we are playing a guessing game. All we can really legitimately calculate is what was invested in the UMIS. That is the loss. Get it!




Are you not playing a guessing game with the previous quote above?

*"they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). "*

Isn't that a guess? Perhaps a registered scheme would have lost money over the period, or certainly not made as much if gearing wasn't used.  Lucky bastards....get the good part of the gearing strategy with the profits, and miss out on the bad stuff.

*"with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present." *

Isn't that a guess- so what opportunity did they miss- how would their money have been invested, would they have stayed invested? what if they did this? What if they did that? Pure guesswork. If they are compensated for the losses leading up to late 2008, they get a second bit because they weren't in the market after that?  Nice work. 

So how can they have it both ways?  How can the clients benefit from the UMIS in the good times by getting to retain their profits, and yet they get to claim back everything they lost when the UMIS goes bad?

Again, where can I invest in one of these things?


----------



## Mash (23 November 2011)

The forensic accountants have been engaged......


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## maccka (23 November 2011)

doobsy said:


> The bloke who ran the original enquiry gets it.
> 
> http://www.wealthprofessional.com.au/article/blame-poor-advice-not-product-failure-120230.aspx




Sorry Doobsy,

I am not sure Ripoll did actually 'get it'.  I'd like to think that if he did 'get it' he would have worked harder to expose the lies told by bank executives.  Since the PJC enquiry a large number of documents have been turned up that clearly show a number of bank execs lied.  All of these documents existed at the time of the inquiry.

I witnessed at least one (possibly two) occasions when Ripoll refused to accept documentary evidence that might have assisted the inquiry get to the bottom of it.

Cheers
Maccka


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## Igetit (23 November 2011)

SJG1974 said:


> So the client gets to keep their profits from when the UMIS made them money (because they would have earned that money had they been in a RMIS), but they don't suffer the losses because it is a UMIS?  They also then get to claim for a lost opportunity for not being in the market since November 2008?  So they get the best of both worlds....ride the tails of the bull market, get to keep their profits, enjoy the types of holidays and the like that most only dream of, and then recover their losses because they were in a UMIS?  And whats more, they can make a claim because the market went up and they weren't in it?
> 
> How do I invest in one of these UMIS?  Money for jam if you ask me....high returns, no risk.
> 
> ...




Hi SJG 1974,

Now, that's certainly a lot of commentary and questions. I can understand your consternation. However, to deal with the latter half of your thread first. You do have to acknowledge that as a result of their unwitting participation in a scheme that ultimately resulted in the loss of their entire asset base, Storm victims were left unable to reparticipate in the market during its recovery (commencing April 2009). You do have to understand and accept that this constitutes a "loss of opportunity". There are means by which these losses are calculated that are acceptable to the Court. The figures determined will not be "guesses" - just trust me. Too long to explain.

In my view, YES I DO THINK IT IS FAIR, that this constitutes part of the assessment of damage. But, even more importantly, so does the Court.

With respect to your other burning gripe:*"How can the clients of the UMIS benefit during the good times by getting to keep their profits, and yet they get to claim back everything they lost when the UMIS goes bad?"*

The short answer is, because that is what the law allows for. To expand just a little. They, understandably, would be allowed to retain any profits they made - because those profits (dividends and distributions) were reinvested through the purchase of additional units within the UMIS umbrella. This is likely to be the same approach that would have been adopted by these investors within a RMIS. 

With respect to the losses. These would be reflected through a drop in the unit price of the particular index (s) held within the portfolio. In the majority of situations within a RMIS, these would be paper losses, as it is unlikely clients in a RMIS would have had a margin loan account with an allowable LVR greater than 90%.

This begins to get quite technical now and I am not sure how much benefit any explanation I offer at this stage is going to soothe your angst. The Court will now begin to deal with these questions. The formulae for the calculations exist and will be applied. 

Rest assured a fair outcome will be achieved. The compensation may be more than it appears you would be happy with. However, had you been in the UMIS - as you seem to think would have been a good thing - ask yourself what you consider would be fair compensation for you and your family. Having sunk everything you had worked for into what turns out to be an illegitimate scheme. I know, I know....You would never have done that. But that is not the question I put to you.

Finally - and I know you mean no harm; but this is not a trivial matter. A man has taken his own life, so overwhelmed was he by what has taken place. Many others, and I know them, have considered this path. This is a tragedy. 

You would not wish to be a party to a UMIS. This or any other. You would not wish to be living the lives that many of these elderly Australians are currently living. This is NOT a great lark. There is nothing amusing about what has happened here. 

Anything these people receive back in compensation for what has been done to them, will never be enough.


----------



## maccka (23 November 2011)

Dear SJG,

I am going to try to keep emotion out of this (however I strongly suspect I may fail).



SJG1974 said:


> Lucky bastards....get the good part of the gearing strategy with the profits, and miss out on the bad stuff.




Even if the UMIS case is found in favour of Storm clients and there is some/any remuneration ...
My parents have lost their retirement.
One family member is losing his vision as a result of stress.
Friends of ours have lost their homes and farms and marriages have been destroyed.
Other friends have had strokes, heart attacks.

My family have lost a precious family member.  He'll never be around again.  He won't see his children graduate and marry; won't see grandchildren.  He won't celebrate anything ever again with our loving family and he died before his mother who was in her late 80s.  Stopping now as I am getting emotional and I need to keep this on topic.

I don't think Stormers are lucky bastards and I absolutely don't think they've missed out on the bad stuff.  

Maccka


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## Igetit (23 November 2011)

maccka said:


> Dear SJG,
> 
> I am going to try to keep emotion out of this (however I strongly suspect I may fail).
> 
> ...




The meek shall inherit the earth. It will never be OK Maccka; but it will get a lot better.


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## Julia (23 November 2011)

SJG1974 said:


> So the client gets to keep their profits from when the UMIS made them money (because they would have earned that money had they been in a RMIS), but they don't suffer the losses because it is a UMIS?  They also then get to claim for a lost opportunity for not being in the market since November 2008?  So they get the best of both worlds....ride the tails of the bull market, get to keep their profits, enjoy the types of holidays and the like that most only dream of, and then recover their losses because they were in a UMIS?  And whats more, they can make a claim because the market went up and they weren't in it?
> 
> How do I invest in one of these UMIS?  Money for jam if you ask me....high returns, no risk.



+1.  
It's pretty much like the much larger game being played on world markets where the investment banks, the authors of many of the shonky CDOs and CDSs, got to privatise the profits and nationalise the losses.
Moral hazard at its best.



> So how can they have it both ways?  How can the clients benefit from the UMIS in the good times by getting to retain their profits, and yet they get to claim back everything they lost when the UMIS goes bad?



As above.  The global example has already been set.  Never mind that as a result many European nations are bankrupt as essentially is the US.  It's all good so long as someone will pick up the tab. 
But eventually, as we are currently seeing, the squawking chickens have nowhere to go but home to roost.



Igetit said:


> Hi SJG 1974,
> 
> Now, that's certainly a lot of commentary and questions. I can understand your consternation. However, to deal with the latter half of your thread first. You do have to acknowledge that as a result of their unwitting participation in a scheme that ultimately resulted in the loss of their entire asset base,



Um, "unwitting participation"???  How does anyone unwittingly participate in anything, especially if it concerns the provision of their life savings and/or their own home as collateral?   You simply cannot unwittingly participate if you agree to provide your home as collateral.


> Storm victims were left unable to reparticipate in the market during its recovery (commencing April 2009). You do have to understand and accept that this constitutes a "loss of opportunity".



OK.  But why doesn't the same principle apply to anyone invested in e.g. Vanguard if they also remained in the market and did not withdraw their funds as the GFC became impossible to ignore?   Do you think these investors should also be compensated?



> You would not wish to be living the lives that many of these elderly Australians are currently living. This is NOT a great lark. There is nothing amusing about what has happened here.



You've overall been very polite and reasonable in the way you have presented your argument.  Until the above paragraph.  Absolutely nowhere that I have seen has SJG suggested there is anything remotely amusing about anyone's life being turned upside down by the loss of a significant amount of money, regardless of that person's responsibility or otherwise in such a loss.


----------



## SJG1974 (23 November 2011)

maccka said:


> Dear SJG,
> 
> I am going to try to keep emotion out of this (however I strongly suspect I may fail).
> 
> ...




Apologies Maccka and to others- that was a flippant remark not meant to offend. Should not have gone there and was obviously ignoring the personal side of things and focusing on the financial with my remark. Poor form on my part.

Again apologies.


And Igetit, 

I am not against compensation. And I am not treating this as a lark, and I certainly don't think there is anything funny about this. No matter how much my views or opinions may differ from your and others', including those here who are victims of Storm, I feel sorry for them, becuase they have been sold up the river. I wouldn't wish that upon anyone. And I am frankly disappointed that after all of our dialogue you would think that I would be treating this as a laugh.

I have no agendas, I am not on anyone's side.  I am just an outsider looking in on this whole mess.  I have my opinions like everyone does. I feel sorry for the clients, but I also feel that having taken a risk, a big risk by doing what they have done, that they need to accept some of the consequences of the choice they made.  

You may say they were poor defenceless retirees, but that doesn't wash with me.  They had a choice to go with Storm or not- and plenty didn't...if they chose to believe what a salesman told them without getting a second opinion or properly understanding the risks involved, then quite frankly they weren't giving their life savings the respect they deserved in my opinion.  Others did and walked away.

As a result, I believe getting compensated *fully* because the scheme was unregistered is just wrong.  The law may say otherwise, but thats my view, and I know its different to yours, and probably everyone else's around here.  But I am sticking with it. It would be pretty boring around here if we all agreed on everything!


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## maccka (23 November 2011)

SJG1974 said:


> Apologies Maccka and to others- that was a flippant remark not meant to offend. Should not have gone there and was obviously ignoring the personal side of things and focusing on the financial with my remark. Poor form on my part.
> 
> Again apologies.




Thank you SJG.  I appreciate your apologies.  There are so many concepts tied up in this sorry mess that it is easy to focus on one concept or idea and not on others.  You recognized that quickly and were big enough to say so in a public forum.

Thank you for your apology SJG.


----------



## Igetit (23 November 2011)

Julia said:


> +1.
> It's pretty much like the much larger game being played on world markets where the investment banks, the authors of many of the shonky CDOs and CDSs, got to privatise the profits and nationalise the losses.
> Moral hazard at its best.
> 
> ...




Hi Julia, 

"WHERE DO I SIGN UP; .....MONEY FOR JAM". 

Review and have another moment of reflection. What exactly was he implying then? 
Lots and lots of people would like to know. 

With respect to Vanguard investors - they should review their own situation and see what recourse they have. Was VANGUARD involved in an UMIS with a third party? I am not sure where you are going with this. 

You do appreciate that the two situations are somewhat different? Right? Earth to Julia - come in! The comparison you seem to be making will leave many here scratching their heads. You perhaps don't getit just yet. You will. Vanguard - and its allies - are not in the dock. The relevant BANKS, however, are preparing their defences. Really and truly, you need to take a breath and have a look at what is going on (some call it a reality check). The dogs have barked and the caravans have moved on. So should you. Please no more: "you should have known, you should have understood" - stuff. Variations on the one theme that we are all so weary of. The focus may not be what you want. But it is what it is. 

"You should have known Dr Patel was not a good surgeon and your husband would have died under his care. It's all your fault." Come on, Julia, really.....Give up. 

After 10,000 odd posts - this is clearly a passion of yours. We wait with baited breath for each new entry. I wonder what comes next....Rhetorical - we all know! Is there anybody else out there. You know, like a substitute. ANYBODY. PLEASE!!!!! I think many of us would like Julia to *"go home to roost."* That's not fair. Your commentary is greatly appreciated by many. Though not all. And I suspect the "many" are in the minority. 

I am waiting.....I have noticed that you have the capacity to be a little nasty in your dialogue at times and I am sure you will be offended by this response. As people who like to give it but not take it generally are.

I am looking out for the interests of many right now. You, however, well....no one will ever know what you are really on about. Sad really.


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## Julia (24 November 2011)

Igetit said:


> Hi Julia,
> 
> "WHERE DO I SIGN UP; .....MONEY FOR JAM".



OK.  Agreed.  I didn't particularly notice that and was more focused on his point about the comparison of index funds.



> Review and have another moment of reflection. What exactly was he implying then?
> Lots and lots of people would like to know.



As above.  Don't take me to task for the comments of another poster.  I thought he made an objectively realistic point.  You are welcome to disagree.



> With respect to Vanguard investors - they should review their own situation and see what recourse they have. Was VANGUARD involved in an UMIS with a third party? I am not sure where you are going with this.



I'm not going anywhere with it.  I'm simply acknowledging that SJG made a reasonable point in his comment about other index funds.



> You do appreciate that the two situations are somewhat different? Right? Earth to Julia - come in! The comparison you seem to be making will leave many here scratching their heads. You perhaps don't getit just yet.



Not sure what you believe the sarcasm is achieving.
Again, I'm not originating any 'comparisons'.   Simply acknowledging point made by SJG.  

The only additional comment I've made is your suggestion that people *unwittingly* put up their homes and/or savings as collateral.  My comment in that regard stands.



> . So should you. Please no more: "you should have known, you should have understood" - stuff. Variations on the one theme that we are all so weary of. The focus may not be what you want. But it is what it is.



If you don't want anyone to challenge what you write, then perhaps best not to use descriptors such as "unwittingly".



> "You should have known Dr Patel was not a good surgeon and your husband would have died under his care. It's all your fault." Come on, Julia, really.....Give up.



That's a totally ridiculous analogy and you know it.  To suggest a patient is in a position to judge the skill of a surgeon they may have met for the first time and to compare this with agreeing to participate in a financial scheme you don't understand is just silly.



> After 10,000 odd posts - this is clearly a passion of yours. We wait with baited breath for each new entry.



I don't keep count of my or anyone else's posts.  If there are 10,000 over about six or seven years, they're across a wide variety of topics.  Not just Storm, for heaven's sake.  The forum has an "Ignore" facility.  By all means apply it to my posts.
Or if you're really upset with me, make a complaint to Joe.  You have various remedies available.



> I wonder what comes next....Rhetorical - we all know! Is there anybody else out there. You know, like a substitute. ANYBODY. PLEASE!!!!! I think many of us would like Julia to *"go home to roost."* That's not fair. Your commentary is greatly appreciated by many. Though not all. And I suspect the "many" are in the minority.



Feel quite free to dislike me as much as you wish. 
 I don't return the sentiment, but rather accept that you're motivated genuinely by concern for people who have been so damaged by their relationship with Storm.  As such I completely appreciate that you're saying whatever you say for the best possible reasons.


I also feel for all of them, particularly those who got sucked into "just sign here and we'll fill in all the details" when presented with a complex document and a reassuring adviser.   Only to later discover their details had been horribly misrepresented. 



> I am waiting.....I have noticed that you have the capacity to be a little nasty in your dialogue at times and I am sure you will be offended by this response. As people who like to give it but not take it generally are.



No, not at all offended.  You are absolutely entitled to express your dislike of me.

I wish you well.


----------



## Solly (24 November 2011)

Civil penalty proceedings against the Cassimatises

Proceedings are being held in public so anyone interested may attend.

25 November 2011	
ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

From https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument


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## doobsy (24 November 2011)

Questions from the darkside for the believers

I have a small issue with fully compensation as well. I hope the court will treat the situation as follows:

WHAT IF: The client went to adviser #2 and they outlined the risks with the Storm strategy and how a margin call could destroy them. They however point out that if they really want to borrow against their homes, there are legal simple geared share funds available.

So the client could still rip out the equity from the home and put it in say the Colonial Geared Aust Share fund which has internal gearing of around 50% but which they manage internally.

The client would never have gone through the margin call fiasco but at the same time would be down around 60% (markets down 40% + 50% gearing on this) on their original capital invested.

To me the storm clients should be put back at a maximum to a situation like this. 

I look forward to being shot down in flames for daring to say people did deserve to lose some of their money the same as everyone that stepped out of cash / fixed interest leading up to the crisis did. Again with the analogy "they took the punt".

I know there was more to it than most understood but not a SINGLE storm client did not know they were invested in Australian shares. NOT ONE!!!! Therefore they should at least wear the same loss as every other Aussie share investor.


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## SJG1974 (24 November 2011)

Igetit said:


> "You should have known Dr Patel was not a good surgeon and your husband would have died under his care. It's all your fault." Come on, Julia, really.....Give up.




That is ridiculous Igetit, it really is.  And surely you know it is.  

Storm quoted something like 8 out of every 10 people that attended their seminars and meetings walked away.  Were they just lucky? Or did they give thier life savings the respect they deserved and actually look into the grandiose claims that the Storm salesmen made and decide the risk was too much to bear? People had a choice- they knew they were borrowing against their house, they knew they were margin lending, they knew they were investing in shares.  They SHOULD have known the risks....some people did and walked away...the Others????  I guess ignorance can be used as a defence in yours and others' eyes.

I guess thats society now isn't it- people don't take responsibility for their own decisions and its always 100% someone else's fault. 

With each post you become more and more condescending. This is a public forum where people get to speak freely and voice their opinions.  No need to belittle others based on their views.  Poor form.

People don't have to agree with everything you say.  You speak from a position of authority, yet no-one knows who you are or what your involvement in all of this is.  We certainly know you have an agenda against the banks. That much is certain.  You seem to know all the facts.  You seem to have all the inside knowledge, and good for you. You seem to know the laws the banks have broken and the compensation that will be claimed.  You are obviously very close to this, and you have the blinkers on. If it was all so straight forward, then the banks would have conceeded by now and the Storm victims would have received their money back.

I am sure if we had someone from the bank here arguing their defence, he would come up with good arguements why it isn't an unregistered MIS.  So who is right? 

Perhaps we should let the courts decide? And the last time I looked, this forum wasn't a courtroom.

But give up on belittling others who don't share your opinion on things.  Its petty.


----------



## Igetit (24 November 2011)

Julia said:


> OK.  Agreed.  I didn't particularly notice that and was more focused on his point about the comparison of index funds.
> 
> 
> As above.  Don't take me to task for the comments of another poster.  I thought he made an objectively realistic point.  You are welcome to disagree.
> ...




Thankyou Julia, 

You remain one of most loved Beatle's songs. Happy to leave it there. Have a great day.


----------



## Igetit (24 November 2011)

SJG1974 said:


> Apologies Maccka and to others- that was a flippant remark not meant to offend. Should not have gone there and was obviously ignoring the personal side of things and focusing on the financial with my remark. Poor form on my part.
> 
> Again apologies.
> 
> ...




Hi SJG 1974,

It's not so much that your views are "different to everyone else's around here" - it's that they are different to what the law allows for. That's all. I think, for example, a person might have the right to take another persons life as an act of revenge (think Daniel Morcombe's parents) - but the law doesn't allow for that. 

If people are entitled to compensation in this matter - whether they did or did not understand what they were getting themselves into - they should be entitled to *all* that the law allows for. As we speak, there are another group of people now being asked to take responsibility for what they were doing. They are the Banks and the Court will have some challenging questions for them. We should be all very pleased that this stage has been reached. Things within the corporate world will improve. The world will still be a dangerous place for the unsuspecting and trusting - but new safeguards are now in the pipeline to help improve things. Safeguards introduced in recognition of the fact that people have been taken advantage of. Not because they were: greedy, gullible, naiive, stupid or lazy - but because they were guilty of trusting. This will eventually sink in I am sure.


----------



## Igetit (24 November 2011)

SJG1974 said:


> That is ridiculous Igetit, it really is.  And surely you know it is.
> 
> Storm quoted something like 8 out of every 10 people that attended their seminars and meetings walked away.  Were they just lucky? Or did they give thier life savings the respect they deserved and actually look into the grandiose claims that the Storm salesmen made and decide the risk was too much to bear? People had a choice- they knew they were borrowing against their house, they knew they were margin lending, they knew they were investing in shares.  They SHOULD have known the risks....some people did and walked away...the Others????  I guess ignorance can be used as a defence in yours and others' eyes.
> 
> ...




Hi SJG 1974,

Not to labour the issue. But this last series of exchanges stemmed from commentary by you regarding the *"money for jam"* position you felt that the Storm victims now find themselves in and your wish to *"sign me up"* - as if this was some great situation these people find themselves in. I note that you have apologized for that. I note also that this is not the first time you have felt moved to apologize to someone for something you've said. A lesson there perhaps.

In highlighting the lack of sensitivity associated with those observations I have obviously upset you. You will get over that though. Or not. Keep the faith.

Incidentally, the only point being made about the legal proceedings is that they are afoot and the Bank has some difficult questions to answer in regard to the UMIS matter. There is overwhelming evidence available to support the view that such a scheme was, indeed, in place. The matter is certainly not resolved yet though. No one has implied it is. Things are, however, beginning to move forward - everyone associated with this matter is happy about that. Well, nearly everyone.


----------



## Solly (24 November 2011)

Hi SJG1974,

I understand your position regarding the Stormers taking some responsibly for their losses. I too have been involved in some quite spectacular speculative losses in the past. Yes, I took the risk, evaluated the position and sometimes things did not turn out as I envisaged. I too looked from blame, conducted something I call a post incident analysis, looking to identify and correct weaknesses in my approach and looking for root causes for the strategy failure. 

I asked how I could apportion blame, transfer, mitigate or just accept responsibility for the failure. So when I firstly become aware of the Storm collapse and how it directly impacted on a friend and associate, I initially thought, well that's the way things happen, you take a punt and if it doesn't work, you pick up your kit and try again. Basically the methodology I use. Why should the Stormers be treated any differently ? 

As I became aware of the scope and multitude of inputs contributing to this collapse and impacts on the investors, I took a closer examination of the event. To me this collapse is very complex, involving many participants with various agendas, even some self-serving and others with dubious motives.

Let me put this proposition to you. If you were faced with complete financial devastation, with no chance of recovery using your own available resources, what would do ? Would you just accept this or would you respond and fight in any manner possible to find a way to improve your position ?

I'm sure I would know your response. Would you admit any contributory fault even if it didn't initially appear to weaken your chance of an acceptable remedy ?

If I was in the position of the Stormers, I too would be seeking any avenues for recovery using the legal and judicial framework that was available to me.

The world is a very tough place and sometimes very tough and decisive actions are required just to survive. This is the life that some Stormers I know are currently living.

S


----------



## Judd (24 November 2011)

Igetit said:


> ....Things are, however, beginning to move forward - everyone associated with this matter is happy about that. Well, nearly everyone.




I for one would be happy with it.  The situation must be resolved one way or the other.  If it is through the judicial process, so be it.
I do believe though that former Storm clients, such as Solly's mate, still lose in a way.


----------



## SJG1974 (24 November 2011)

Igetit said:


> Hi SJG 1974,
> 
> Not to labour the issue.




But you will anyway....



Igetit said:


> But this last series of exchanges stemmed from commentary by you regarding the *"money for jam"* position you felt that the Storm victims now find themselves in and your wish to *"sign me up"* - as if this was some great situation these people find themselves in. I note that you have apologized for that. I note also that this is not the first time you have felt moved to apologize to someone for something you've said. A lesson there perhaps.




You know full well that was a flippant remark. But my underlying opinion still stands. And that wasn't what I apologised for.  I apologised for using a certain term which I know offended Maccka and possibly others and that wasn't the intention.  I am man enough to say sorry if I think I need to, I have no shame in that.  No lessons there, but thanks anyway. 



Igetit said:


> In highlighting the lack of sensitivity associated with those observations I have obviously upset you. You will get over that though. Or not. Keep the faith.




Not at all.  It takes more to upset me than a remark from an anonymous poster on an internet forum.  I have a thicker hide than that.

If you feel the need to belittle people over their opinions, throw in little snide remarks throughout posts and take a holier than thou attitude, then frankly, thats your issue.

I was just passing comment, and the fact you ignored it and turned it back on me suggests you don't see a problem there.  I think that says a lot.



Igetit said:


> Incidentally, the only point being made about the legal proceedings is that they are afoot and the Bank has some difficult questions to answer in regard to the UMIS matter. There is overwhelming evidence available to support the view that such a scheme was, indeed, in place. The matter is certainly not resolved yet though. No one has implied it is. Things are, however, beginning to move forward - everyone associated with this matter is happy about that. Well, nearly everyone.




And as if to further highlight my point, you sign off like that!

Good luck with your work Igetit, whatever that is.

I hope the guilty parties are found to be, and I hope the victims are compensated in a way that is fair and reasonable.  But in my opinion, the compensation you have highlighted is not fair and reasonable.  Far from it. I guess the courts will decide.


----------



## Frank Ainslie (24 November 2011)

*The question of compensation!*

I think it would be more beneficial if we all put this matter into context. Some have stated that in their opinion it would be unfair if the people that invested using Storm were to get everything back. This won’t happen!

*Statistics for investment compensation are as follows:*

Full compensation			          0%
Part compensation		         17%
Still waiting for result			 21%
Chose not to apply			  7%
Not able to apply			         17%
Did not know they could apply	 31%
Applied but refused			  7%

*Significant financial services collapses*

*Action		Reported number of investors affected  	Reported investor losses *
Basis Capital		 800					        $320 million
Opes Prime		        1400						$100 million
Fincorp		        8102						$100 million
Sonray			4500						$46 million
*Storm Financial	3000					        $3 billion*
Westpoint		        2000						$310 million

*No legal action	59% 
Individual legal action	  7%
Joined a class action	34%*

So for those that think it unfair that people in Storm may receive full compensation – relax! It’s not going to happen even on a good day. What the majority of us are seeking is enough compensation to pick up the shattered pieces of our lives and be able to live out the remainder without starting all over - something that time for many of us does not permit.

If the truth be known, no amount of compensation could make up for the losses in mental and physical terms that many that invested using Storm have suffered since the Storm collapse. People that were not involved on this forum simply have no idea.

Many have the attitude that if you make your bed, you should lie in it! They miss one essential truth. We left it to Storm and the Banks to make the bed and they didn't do so - pure and simple. 

This country has laws in place to protect its citizens. Unfortunately those laws did not then and still today do not protect ordinary Australians. We, the people that were in Storm only have a case today because there are so many of us. 

Consider this for a moment. How can people litigate if the culprits have taken all their money? This is the premise under which many including the Banks operate. Fortunately, because we are many, we can join class actions that reduce our costs significantly. At the end of the day though, we will still have to pay substantial legal costs if we lose. 

*We are prepared to take this chance because the parties involved have violated our rights under the contracts we took out with them and assigned their contractual obligations to others that were not parties to our contracts with the Banks. *

The _“poor banks”_ (an oxymoron if ever I saw one) as someone called them have breached commercial law tenets that are written into the laws of this country to protect people or organizations that contract with one another. Therefore, we should take the emotional issues out of the debate and consider what has occurred in those terms. 

In other words, this is not about the people that invested using Storm but rather about the wrongs that have been perpetrated against them. The Courts when deciding this issue will not be putting these investors on trial (thank God) but rather the wrongdoers that have deceived them. 

Your personal opinion therefore of the people that invested in Storm is not going to count for a hill of beans in the final analysis. The only thing that will count in the long run is, _*“Who has done the wrong thing by the people that invested using Storm?”*_

I would remind everyone therefore that we are not in the dock - the banks are! You can then better understand our annoyance if people on this forum want to place us in the dock alongside the Banks. We are not the guilty party! The banks are although this fact seems to have escaped quite a few. Whether we were gullible, simpletons, weak minded, stupid or anything else (in your opinion) is not the issue. The guilt or otherwise of the Banks is and I feel it would be far more worthwhile to explore those issues than keep regurgitating things that are of no importance in the long run. It will make for a more constructive forum and a more objective one as well.


----------



## Julia (24 November 2011)

Igetit said:


> Not to labour the issue.



No? 


> I note that you have apologized for that. I note also that this is not the first time you have felt moved to apologize to someone for something you've said. A lesson there perhaps.



SJG has conceded his remark was inappropriate.  He has apologised.  
He at least has shown the good grace to recognise when something he said was poorly expressed and to make amends.
You don't even do that, so maybe consider your own behaviour


----------



## SJG1974 (24 November 2011)

Solly said:


> Hi SJG1974,
> 
> I understand your position regarding the Stormers taking some responsibly for their losses. I too have been involved in some quite spectacular speculative losses in the past. Yes, I took the risk, evaluated the position and sometimes things did not turn out as I envisaged. I too looked from blame, conducted something I call a post incident analysis, looking to identify and correct weaknesses in my approach and looking for root causes for the strategy failure.
> 
> ...




Hi Solly,

Let me clarify by saying that I do not begrudge Stormers for taking legal avenues to recover whatever they can.  I would be doing the same.  While I haven't seen evidence, it seems the banks have a case to answer, and if they were at fault, then they should pay.  Unfortunately Storm, being no longer, won't pay the hefty price it should for having sold clients a dream that was infact a ticking timebomb. In my eyes, they are the main party in all of this.

My view is more from a fairness point of view (in my eyes).  Investors have lost money throughout the world during the GFC.  People who took any sort of risk have been hit, and the recovery is still a long, long way away.

When people take a risk, they have to be prepared for the downside of that risk.  And if they didn't fully understand the risk, then they have not given their life savings the respect they deserved (again in my opinion).  These people had a choice. As I mentioned in a previous post, I believe Storm quoted that 8 out of every 10 people who came through their door did not proceed with the strategy.  

So it appears that a high percentage of people were prepared to look beyond what the Storm salesmen and women told them and decide for themselves that the strategy was too risky. Why the people who became clients couldn't see this is probably due to a combination of reasons, but again, the decision to go with Storm was theirs and theirs alone, as was the decision by the 8 out of 10 not to.

Now the motives for those clients going with Storm I am sure are varied. And I know that people, in the position they are in now, will be reluctant to disclose any motives beyond the simple seeking of financial advice and security. But when certain posters come on here and say that everyone from the industry to the government is corrupt and are to blame for their demise, without taking at least some responsibility for the choices they made, well I feel that demands some response.

As for the level of compensation, my view on it is this:

My opinion is that the clients should not be compensated for going into the scheme.  The scheme was clearly explained to them (even if the relationship between the parties, which seems to be the issue) was not. They knew they were borrowing against their home, they knew they were buying shares, and they knew it was being geared into a margin loan.  They took a big risk.  And some were able to enjoy a very good lifestyle as a result when the market went up. But when it went down, they suffered, like everyone did.  And in my opinion, they have to wear that, becuase that was the risk inherent in the whole scheme, and they should have been aware of that. And if they weren't aware, well Im sorry, but they have themselves to blame for that side of it.

I get a scond opinion on everything that is going to cost a decent amount of money.  If I buy a tv, I will shop around.  If I see a book I like, I will go on the net and compare prices.  If I pay for a service like financial advice, I will compare with others to see whether what I am getting and paying for it is reasonable.  I know people can be too trusting, but the world is a dangerous place.  That trusting attitude belongs in a bygone era unfortunately. And you just can't afford to trust something as significant as your life savings to someone else without understanding what they will do with it. The victims know that now.

However, if it is proven that the banks erred in not issuing margin calls when they should have, then I think clients should be compensated for this, because they should have expected that the margin call was their stop loss so to speak (even though they were effectively decimated at that point). If it can be proven that a strategy could have been implemented at the time that would see clients able to trade their way out of it, then that should also be considered (however I am a bit dubious on this, relying on hindsight to provide a workable strategy).

If it can be proven that the sudden winding up of the index funds and the forced selling of the units caused loss, then they should be compensated.

I know people have suffered.  I know the devastation that has occurred.  I have read so much about this, and despite how some of my posts may have been interpreted, I feel for these people.  I wouldn't wish this upon anyone.

But the fact remains they chose to take on the risk- does it mean they deserved to be completely wiped out and lose their homes?  No, they didn't deserve it, but they should have known that it was a possibility. 

Still what I think doesn't really mean much.  It is what the court thinks that is what is most important.

Very long winded, and not to the point, but I hope the answer to your question lies somewhere in there!!


----------



## Solly (24 November 2011)

SJG1974 said:


> Hi Solly,
> 
> Let me clarify by saying that I do not begrudge Stormers for taking legal avenues to recover whatever they can.  I would be doing the same.  While I haven't seen evidence, it seems the banks have a case to answer, and if they were at fault, then they should pay.  Unfortunately Storm, being no longer, won't pay the hefty price it should for having sold clients a dream that was infact a ticking timebomb. In my eyes, they are the main party in all of this.
> 
> ...





Thanks SJG1974 for your detailed reply. I now have a fuller understanding of your position. I too agree on seeking multiple opinions before proceeding with major decisions. As they say, measure twice and cut once. Although with all the best pre-planning and research things can sometimes still go awry but at least you've given things your best effort.

Yes I agree that some good people can be too trusting and the (fiscal) world can a dangerous place.

This is why one of my tenets is reflected in one of Roosevelt's sayings, 

"Speak softly and carry a *big* stick; you will go far". 

S


----------



## bunyip (24 November 2011)

Frank Ainslie said:


> Consider this for a moment. How can people litigate if the culprits have taken all their money?





Culprits did not _‘take all your money’._
Many people lost money when the market plunged in 2008, but most of them were not borrowed to the hilt through a ludicrous double gearing strategy, nor were they invested solely in the stockmarket. Therefore they were not financially destroyed.
These people are in stark contrast to you, Frank, who ‘went for broke’, so to speak, by mortgaging your previously unencumbered home, and using it as the cornerstone of an aggressive borrowing campaign that saw you heavily geared, then double geared on top of that, with 100% of these funds sunk into just one very risky basket called the stock market.
It was a strategy designed to massively magnify your income and wealth, but it ensured that your losses would be immense once the market inevitably turned bearish.
*THAT is the primary reason you were wiped out – not because ‘culprits took all your money’.*
Sure, the gravity of your situation was exacerbated by the incompetence and greed of other parties – no argument from me on that score. And I don’t blame you for seeking reasonable recompense – I’d do the same.
In fact I even hope you'll receive _some_ compensation.
But it was your choice to accept and implement the strategy, your choice not to look into it thoroughly, your choice to trust implicitly the word of salesmen. 
Remember that you had absolutely no need to do any of this – your money could have easily provided the retirement income and lifestyle you were looking for if it was invested sensibly and conservatively without any borrowing whatsoever.

I agree that the banks are unlikely to be ordered to pay 100% of your losses. Nor should they be. Indeed, it would be a travesty of justice if they were, since they didn’t cause 100% of your losses. A number of parties contributed to the situation you now find yourself in, *one of which was YOU.*


----------



## Frank Ainslie (24 November 2011)

Igetit said:


> Hi SJG 1974,
> 
> It seems that should the UMIS claim get up all contributions made by individuals to the scheme - including prepayment of interest - and all earnings generated as a result of investing in the scheme (dividends, distributions and capital growth), will be refundable to the individual investor. That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would *not*, therefore, be required to *refund* any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present.
> 
> You are correct, SJG, the worm can is beginning to shake. The payout to the investor, will of course be fair, as it will reflect their position had they been invested in a legal scheme. No more, no less.




Hi Igetit!

We agree on most things but your take on this one is, I believe, incorrect.

*The first thing to bear in mind is that unregistered managed investment schemes are illegal*. Therefore, if such are found to have existed between Storm and the Banks ‘Stormies’ will be compensated for their losses, not any gains made when being involved in such schemes. The date when investors joined Storm or the date when UMIS affected any long-term 'Stormies' arrangements will determine such compensation.

It should be borne in mind that Storm and the Banks are not charged with operating UMIS from Storm's early days. Rather, the charge of UMIS in relation to all three Banks came later and is based on secret agreements between Storm and the Banks which led to pooling in a common enterprise.

Some have been scornful about UMIS being applied to Banks in their dealings with Storm. Further, they have expressed an opinion that UMIS has little chance of success.  Indeed, in the early days David Porter, a partner with law firm Deacons, was doubtful of ASIC's argument about Storm Financial. _''I struggle to see that there is a common enterprise among the members or there is a pooling of the members' interests ' _Such comments stem from people (despite their standing in the community), that are not aware of all the facts. David Porter certainly isn't! 

*Nothing where Storm and the Banks are concerned should be taken at face value.*

Nothing is therefore clear cut about UMIS.

Some argue that:

*	_in order to constitute a "common enterprise" there must be a joint participation in all the elements and activities that constitute the enterprise. _

Others argue that:  

*	_an enterprise may be described as common if it consists of two or more closely connected operations on the footing that one part is to be carried out by A and the other by B, each deriving a separate profit from what he does, even though there is no pooling or sharing of receipts of profits. It will be enough that the two operations constituting the enterprise contribute to the overall purpose that unites them. There is then an enterprise common to both participants and, accordingly, a common enterprise."_

These issues are, to say the least, complex. That’s why we have courts and judges (not forums) to decide these issues in law.

I believe that the agreement between CBA/Storm dated 18th May 2007 will be the starting point for any UMIS existing between the two. The Macquarie Bank’s arrangements are somewhat more cloudy but I have it on good authority that they had a similar agreement with Storm that predates the CBA/Storm agreement. The BOQ had no secret agreements with Storm to my knowledge but the evidence is overwhelming that the BOQ North Ward in particular participated in a common enterprise with Storm from 2006 onwards.

So, I believe, those that signed up with Storm and were involved with the CBA, the Macquarie Bank or the BOQ after the unregistered managed investment schemes came into existence, will be put back in the position financially that they were in before these schemes came into being. 

Therefore, your assertion _“That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal.”_ is incorrect. Naturally, if you can state some precedents to back this up, I will be more than happy to concede that I am wrong.

This is not the first time this suggestion has surfaced but I do not believe it is sustainable.  The law will not allow something that is deemed illegal to be considered in any capacity. Therefore, any increase in portfolio values after the UMIS came into effect is irrelevant. Losses will be based on portfolio values at the time of UMIS and any refund of monies they contributed after the scheme came into being. There may be some adjustment decided by the Court to arrive at a fair and equitable position for both the investors and the Banks but I have no idea what that will be. 

The maxim is a simple one. People cannot make money on something that is deemed illegal under the law. This then begs the question. Can Banks enforce any agreements that were entered into when these schemes existed such as loans for investment purposes or margin loans? Further, can the CBA enforce the agreements it reached with various participants under the CBA resolution scheme if such agreements are based on earlier agreements in respect of investment loans and margin loans that may be deemed void because UMIS is upheld?

A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Courts will not enforce an illegal contract. Money paid or property transferred under an illegal contract cannot normally be recovered. There are exceptions however. For example, where a contract is made illegal by a statute passed for the protection of a class of people, a member of that class can get back money paid or property transferred by her or him under the contract. 

*An illegal agreement, under the common law of contract, is one that the courts will not enforce because the purpose of the agreement is to achieve an illegal end.*


----------



## Frank Ainslie (24 November 2011)

bunyip said:


> Culprits did not _‘take all your money’._
> Many people lost money when the market plunged in 2008, but most of them were not borrowed to the hilt through a ludicrous double gearing strategy, nor were they invested solely in the stockmarket. Therefore they were not financially destroyed.
> These people are in stark contrast to you, Frank, who ‘went for broke’, so to speak, by mortgaging your previously unencumbered home, and using it as the cornerstone of an aggressive borrowing campaign that saw you heavily geared, then double geared on top of that, with 100% of these funds sunk into just one very risky basket called the stock market.
> It was a strategy designed to massively magnify your income and wealth, but it ensured that your losses would be immense once the market inevitably turned bearish.
> ...




You've got a problem fellow! I think you are in worse shape than we are! Get some anger management. They tell me it helps in times like these!


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## Solly (25 November 2011)

Solly said:


> Civil penalty proceedings against the Cassimatises
> 
> Proceedings are being held in public so anyone interested may attend.
> 
> ...




Now scheduled to;
*30 November 2011*


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## Igetit (25 November 2011)

Frank Ainslie said:


> You've got a problem fellow! I think you are in worse shape than we are! Get some anger management. They tell me it helps in times like these!




Yes, he and a few others. 

The "logic" that continues to be applied to some of these "streams of consciousness" in the face of evidence readily available in the public domain, is extraordinary. Idon'tgetit. Will these folks ever move on? Will that penny ever hit the ground?

It was the BANK, it was STORM, it was YOU, it was Mother Theresa. Everybody tune in - "IT DOESN'T MATTER WHO IT WAS"; all that matters is that there is an accusation that whatever this thing being sold to the public was, it was illegal. Once proven, money then needs to find its way back to the damaged parties. That's it. Kinda simple. Really - I mean it.


----------



## Solly (25 November 2011)

Hi Igetit,

In your learned opinion, do you believe that there will be any criminal charges eventually laid, as a result of investigations into the collapse ?

S


----------



## Igetit (25 November 2011)

Solly said:


> Hi Igetit,
> 
> In your learned opinion, do you believe that there will be any criminal charges eventually laid, as a result of investigations into the collapse ?
> 
> S




Yes! A tricky road to travel. But it has been the subject of many a late night discussion for several months now. 

One thing at a time. Have a win with the UMIS first and then we should be able to start isolating relevant individuals.


----------



## Solly (25 November 2011)

Igetit said:


> Yes! A tricky road to travel. But it has been the subject of many a late night discussion for several months now.
> 
> One thing at a time. Have a win with the UMIS first and then we should be able to start isolating relevant individuals.





Thanks Igetit,

Looks like that there will be some very, very interesting times ahead. I've have to crank up the bandwidth at this end, to keep up with all the action.

S


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## SJG1974 (25 November 2011)

bunyip said:


> Culprits did not _‘take all your money’._
> Many people lost money when the market plunged in 2008, but most of them were not borrowed to the hilt through a ludicrous double gearing strategy, nor were they invested solely in the stockmarket. Therefore they were not financially destroyed.
> These people are in stark contrast to you, Frank, who ‘went for broke’, so to speak, by mortgaging your previously unencumbered home, and using it as the cornerstone of an aggressive borrowing campaign that saw you heavily geared, then double geared on top of that, with 100% of these funds sunk into just one very risky basket called the stock market.
> It was a strategy designed to massively magnify your income and wealth, but it ensured that your losses would be immense once the market inevitably turned bearish.
> ...




You won't get through to Frank and some others Bunyip.  You just won't.  They are focussed on one thing and one thing only- compensation.   

We know that the cosy relationship between Storm and the Banks isn't the ONLY thing that wiped Frank and others out.  The strategy itself did that.  And the strategy was clearly spelled out to them, even if the risks weren't.  Some people judged the risks to be too severe...in fact it seems 80% of clients who walked through the door did.  Perhaps this 80% didn't just believe everything their Storm salesman told them? Perhaps the $$ in Frank's eyes clouded his judgment?

Whether it was a registered or unregistered MIS isn't the reason they lost their life savings, and they know this.  Same strategy (a very simple, if extremely risky strategy)- just one is legal and the other not.

Would having the relationship between the banks and Storm clarified to people like Frank have made a difference?  Unlikely- we know he just took his adviser's advice without questioning it thoroughly enough, otherwise he wouldn't be in this position.

But thats the law, and this fact that it may have been unregistered and therefore illegal gives them the opening to pursue damages. And thats their focus and I guess thats fair enough. And admitting any fault on their part probably won't help their cause. 

They can carry on with silly name calling, and comparing their plight to that of a rape victim, or comparing choosing to invest in a high risk strategy with being operated on by a dodgy doctor, but that says much more about the types of people they are than it does anyone else.

However, I am concerned that if they fail their legal fight, and therefore they can't blame the bank anymore, then where do they direct their anger?? Who is to blame then???


----------



## bunyip (25 November 2011)

Frank Ainslie said:


> You've got a problem fellow! I think you are in worse shape than we are! Get some anger management. They tell me it helps in times like these!




It’s clearly _*you*_ who’s  angry, Frank – it shows in post after post as you rant about how hard done by you are and all the people who (according to you) conspired to bring you down. 
Me – I’m just an interested and sometimes quite amused observer who has the same right to express his opinions as you have.

Not that I blame you for being angry – I’d be angry too if some Greek bushranger took advantage of me by charging 7% to lead me down the path to ruin, and I was gullible and naÃ¯ve enough to allow myself to be led.
So rant all you want – to some extent you’re justified in doing so, but someone will challenge and correct you every time your rantings are punctuated by yet another outrageous statement.


----------



## Solly (25 November 2011)

bunyip

What's your opinion of the (double) leverage strategy that Storm was pushing ? 
Do you have a position on whether it is an acceptable method to use ?

S


----------



## Frank Ainslie (25 November 2011)

bunyip said:


> Culprits did not _‘take all your money’._
> Many people lost money when the market plunged in 2008, but most of them were not borrowed to the hilt through a ludicrous double gearing strategy, nor were they invested solely in the stockmarket. Therefore they were not financially destroyed.
> These people are in stark contrast to you, Frank, who ‘went for broke’, so to speak, by mortgaging your previously unencumbered home, and using it as the cornerstone of an aggressive borrowing campaign that saw you heavily geared, then double geared on top of that, with 100% of these funds sunk into just one very risky basket called the stock market.
> It was a strategy designed to massively magnify your income and wealth, but it ensured that your losses would be immense once the market inevitably turned bearish.
> ...




Bunnyip,

I am not really sure what you are trying to prove by continuing with your personal attacks on me. For one, you know nothing about me personally and yet you are making outlandish assumptions. 

Let me take you through this slowly addressing the various points you have made.

_“Culprits did not ‘take all your money’.”_

A culprit is defined as 1. In Law a person awaiting trial, esp one who has pleaded not guilty. 2. the person responsible for a particular offence, misdeed, etc.[/I]

What part of _“offence, misdeed etc.,”_ don’t you understand?

Our financial adviser has already been found guilty by ASIC of giving us among others the wrong financial advice using misleading and deceptive conduct. In our particular case, he was also condemned in a Court of law (Worrells enquiry).

The Banks now stand accused of aiding and abetting Storm, yet you still want to label us (Helen and me) as culprits? 

_”Many people lost money when the market plunged in 2008, but most of them were not borrowed to the hilt through a ludicrous double gearing strategy, nor were they invested solely in the stockmarket. Therefore they were not financially destroyed.”_

Again you have chosen to miss the point. Many people did lose money when the market plunged in 2008 but they were pulled out of the market in time by responsible people that were paid to act in their interests. The Banks and Storm *DID NOT* act in a responsible way by pulling Storm’s investors out of the market in time which is what this is really all about. Why did they fail to do so? Because they had manufactured deals between them that led all parties concerned to gamble with our investments by failing to take the appropriate action. We are not talking days here but weeks and months! That’s the reason we were financially destroyed. Is it now sinking in? 

_”These people are in stark contrast to you, Frank, who ‘went for broke’, so to speak, by mortgaging your previously unencumbered home, and using it as the cornerstone of an aggressive borrowing campaign that saw you heavily geared, then double geared on top of that, with 100% of these funds sunk into just one very risky basket called the stock market.It was a strategy designed to massively magnify your income and wealth, but it ensured that your losses would be immense once the market inevitably turned bearish.”_

These are outrageous remarks that are not based on the facts. I have already given you details of part of our Storm SOA. Nowhere does it indicate a strategy for magnifying our wealth or our adopting a “high risk” strategy. Yet, you have again chosen to ignore this!

_”…it was your choice to accept and implement the strategy, your choice not to look into it thoroughly, your choice to trust implicitly the word of salesmen.”_

 Again, you are using words to suit your purpose. We didn’t trust the word of a saleman! We trusted the word of a qualified financial adviser that worked for a reputable financial advisory firm.

_“ A number of parties contributed to the situation you now find yourself in, one of which was YOU."_

Your arrogance is beyond belief. We went to a financial advisory firm for FINANCIAL ADVICE and paid that advisory firm a considerable sum of money for that advice. Today, that advisory firm and the Banks involved stand accused of doing the wrong thing by Storm’s investors. 

The charges against the parties involved: Misleading and deceptive financial advice, breaches of banking codes, breaches of contracts, imprudent lending, unconscionability, breaches of the Corporations Act, breaches of the Trade Practices Act, possible charges of criminality under the Crimes Act, and, operating unregistered managed investment schemes.  

Yet you now want us to admit that we were one of the culprits? What planet are you on? For that matter, what is your problem?

The Storm Financial collapse resulted in the biggest loss to investors in the financial history of Australia – 3 billion dollars and counting. Thousands of investors are involved and it has resulted in major changes to the financial sector. These changes have come about because of the loopholes in the regulations and the financial incentives then existing in the market place that made many financial advisers lose sight of their clients' interests by focussing instead on their bottom line. 

We’ve had a ‘Worrells enquiry, a Parliamentary Joint-Committee enquiry and a massive investigation launched by ASIC and yet you have the audacity to inform the people that invested in Storm that investors wouldn’t have lost money if they weren’t so greedy! For goodness sake, get real!

People were greedy alright but they weren’t the Storm investors. Rather, they were Storm’s financial advisers selling us down the river with the blessings of the Banks that aided and abetted them. Storm supplied the gun and the Banks supplied the ammunition.

It is obvious to me that you have never taken the trouble to investigate the facts for yourself but rather have chosen to promote your personal opinions that are blatantly at odds with what occurred. I suggest that before you voice any more unsubstantiated opinions you review what has been said about Storm and the Banks. There are enough articles out there and a few websites (mine included) that will fill you in what really happened. Not what happened according to Bunnyip!

Whatever, I think I speak for many when I say that your continuing to beat the same tune has become more than a little monotonous. Give it a rest before you drive us all insane.


----------



## Harleyquin (25 November 2011)

The effects of the GFC on everyone has been well documented but what so many of you arm chair experts won't accept, no matter how hard any of the stormies tell you, is  that we all had a registered (we thought), educated (we thought), honest and ethical (we also thought) financial planner!!! tell us just the opposite to what you and others forum members are saying.  Our 'crime' was that we believed them.

Bet most of us now accept that we should have done all the things that you're now telling us that we should have done,  we just didn't know that we couldn't trust a financial planner who was financially backed by the largest bank in Australia...'crime number two' for the stormies.

Pre-hindsight, we were just going to go in tell them what we wanted, what our risk tolerence was, and they were going to be nice, honest little financial planners who were going to give us a suitable plan!!!  

Post-hindsight we know differently.

Why do so many of you think that compensation, if any, is so important?  These people have used their considerable financial talents to lie and cheat their way in creating this disaster. and destroying so many lives.  Compensation is 'only money', I want all who knowingly contributed to this scheme, to pay for their crime, and not just in any compensation.  I'm not interested in 'only going after the banks because storm is broke or non existent OR not going after storm for the same reasons'.  I want justice, for those who are destroyed and those who are no longer with us because of this debacle.

Many of you, the ACE's, _aka Arm Chair Experts_, just accept that a certain percentage of people are rotten and we should 'get over it and get on with it'.  Well we can and we will but it still doesn't mean that's it's right or we have to entirely accept it without a fight.

I want to see a more transparent financial system, and believe that the present system can be improved for Mr and Mrs Average prospective financial plan seeker; even if Mr and Mrs ACE doesn't believe it.

There was an interesting talk on TV earlier in the week by a UK author, Mr Alexander McCall Smith who is out here for the 'Festival of Dangerous Minds' in Sydney.  His 'talk' was entitled 'Society is Broken', and very basically he believes among other things that we've become desensitised to many of the problems in our society.  Personally I believe him.

Some interesting stats from people who were surveyed were-

1. - 37% lied about their driving history

2. - 74% of students admitted to regularly cheating  and 

3. - 58% believed it was OK to break the stems off broccoli before weighing and paying.

In light of the above 'broccoli crime' it never ceases to amaze me that an anagram of 'TEACH' is 'CHEAT',  is it really 'just human nature' and should we just accept it as 'normal'???


----------



## Solly (25 November 2011)

Harleyquin & Frank,

Does this look familiar ?

It appears that there are quite a few claims being made here.


----------



## Julia (25 November 2011)

Harleyquin said:


> The effects of the GFC on everyone has been well documented but what so many of you arm chair experts won't accept, no matter how hard any of the stormies tell you, is  that we all had a registered (we thought), educated (we thought), honest and ethical (we also thought) financial planner!!! tell us just the opposite to what you and others forum members are saying.  Our 'crime' was that we believed them.



And round and round we go.  Not just you HQ.




> I want to see a more transparent financial system,



What exactly do you mean by a "more transparent financial system?
That's a very vague phrase.  Perhaps you could be specific about what you believe you want.

"Transparent" is a currently fashionable word.  I've yet to see anyone actually define what it means.



> There was an interesting talk on TV earlier in the week by a UK author, Mr Alexander McCall Smith who is out here for the 'Festival of Dangerous Minds' in Sydney.  His 'talk' was entitled 'Society is Broken', and very basically he believes among other things that we've become desensitised to many of the problems in our society.  Personally I believe him.



OK, so why do you believe Mr McCall Smith, HQ???  On what basis do you believe he knows what he's talking about?
Are you aware that what he's essentially known for is his very boring (imo of course) fiction series "The No. 1 Ladies Detective Agency".  If you've not had the misfortune to read any of this stuff, it's about a woman from Botswana who decides to set up a detective agency.  Your local library will, sadly, have wasted some taxpayer dollars on buying these books.
I think he also has training in law.

Why on earth would you give credence to someone with no financial expertise and decide to believe what he says?  It's this sort of naivete that will get you into even more trouble all over again.
(The above is meant not as a criticism but simply to point out that you have apparently still not come to terms with understanding what is credible and what is not.)Mr MCall Smith may have imparted some amazing insights, but if so, it's not going to be on the basis of long experience and expertise in the financial sector.



> Some interesting stats from people who were surveyed were-



Hang on, there, HQ.  "stats from people who were surveyed"????

What was the research?
Who conducted it?
What were the protocols?
What was the sample size?
From what sectors was the sample derived?
Who reviewed the results of the survey and where was it published?




> 1. - 37% lied about their driving history
> 
> 2. - 74% of students admitted to regularly cheating  and
> 
> 3. - 58% believed it was OK to break the stems off broccoli before weighing and paying.



What a peculiar set of conclusions!



> In light of the above 'broccoli crime' it never ceases to amaze me that an anagram of 'TEACH' is 'CHEAT',  is it really 'just human nature' and should we just accept it as 'normal'???



Oh dear, HQ, when you get down to looking for hidden meanings in words, it might be time to consider a different approach.

That said, I'm laughing because I was buying mushrooms at Woolworths today and became aware of a woman sort of hunched over beside me who seemed to be taking an extraordinary amount of time putting each mushroom into the bag.  I realised she was surreptitiously removing the stems off the mushrooms.  I said mildly "don't you like the stems" and she said "no, and I'm not going to pay for them.  Woolworths make enough profit.  Times are hard and I only care about myself".

I think she's in a minority, but the mindset is perhaps not so unusual.


----------



## SJG1974 (25 November 2011)

Frank,

Ignoring the UMIS stuff, ignoring what the bank did and didn't do and all that.  i know you and others think they are the only things that matter, and I guess to you they are- they are your avenue to make the culprits pay.  Fair enough. 

But indulge us, like we have indulged you your rants and reams of repetitive information.

Again, some of your explanations are sugar coated and do not make any rational sense.  Two such examples from your latest rant include...



Frank Ainslie said:


> Many people did lose money when the market plunged in 2008 but they were pulled out of the market in time by responsible people that were paid to act in their interests.




I know for a fact that many people weren't pulled out of the market when it plunged.  I know that many people remained invested throughout. I know that many people have portfolios that are worth a fraction of their former value as a result. So your comment above, while it may be true for some, would not be true for the majority.  A generalisation Frank, designed to suit your agenda.

The reason why these people weren't decimated by the same market conditions you experienced is that they did not take the risk you did.  Think about it- people who didn't  borrow to invest didn't end up losing everything.  The market fell 50%- not 150%.



Frank Ainslie said:


> These are outrageous remarks that are not based on the facts. I have already given you details of part of our Storm SOA. Nowhere does it indicate a strategy for magnifying our wealth or our adopting a “high risk” strategy. Yet, you have again chosen to ignore this!




So you expect us to believe, that a worldly businessman such as you, a man who has reeled off his credentials to support his level of sophistication, did not understand that borrowing against his house, investing the borrowed money into shares, and then gearing it up again, was risky?

So because the SoA didn't say it was risky, that means it wasn't? As you have told us, you have worked in a variety of businesses over time.  You didn't realise that borrowing is a risky business? Come on Frank, don't insult us.



Frank Ainslie said:


> We went to a financial advisory firm for FINANCIAL ADVICE and paid that advisory firm a considerable sum of money for that advice. Today, that advisory firm and the Banks involved stand accused of doing the wrong thing by Storm’s investors.




I can't argue with that.  But, many people who walked through Storm's doors decided against proceeding with them.  Why I wonder?  If the strategy was so foolproof, if it was going to give you better returns than the bank or an allocated pension, why did so many CHOOSE to go elsewhere, whilst you CHOSE to go with them? What did you do, or more specifically, not do, that made you different to these people who walked away from this high risk strategy?



Frank Ainslie said:


> Yet you now want us to admit that we were one of the culprits? What planet are you on? For that matter, what is your problem?




We arent trying to put you on the stand Frank.  Thats ridiculous.  Yes you have been wronged, yes you were screwed, yes yes yes.  Noone is saying otherwise. Noone is dancing on your grave telling you to suck eggs Frank.  You know that. Despite what some may think, I for one want to see justice served.

But some people take responsibility for the CHOICES they make. Thats all.  If you aren't one of those people, and you can't see some of the errors you made in all of this, then you are ripe for the picking again I am afraid.


----------



## Judd (26 November 2011)

Solly said:


> Harleyquin & Frank,
> 
> Does this look familiar ?
> 
> ...



Interesting read Solly.  Not sure what an exceptional research team does if all the investment is via in index funds.  All they would probably have to do would be google "Index Funds" and go from there.  Exceptional.

Love the bit about the 75% of business coming from client referrals.  Phew, "Their in it therefore so must I."  That is probably one of the factors why many of Storm's clients were confident they were doing the right thing.

By the way, does anybody want to buy some tulips?


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## Solly (26 November 2011)

Judd said:


> Interesting read Solly.  Not sure what an exceptional research team does if all the investment is via in index funds.  All they would probably have to do would be google "Index Funds" and go from there.  Exceptional.
> 
> Love the bit about the 75% of business coming from client referrals.  Phew, "Their in it therefore so must I."  That is probably one of the factors why many of Storm's clients were confident they were doing the right thing.
> 
> By the way, does anybody want to buy some tulips?




Tulips, ah yes, I always tiptoe lightly through them. Also reminds me of Charlie the postal worker. Want to buy some postal reply coupons ?

I suppose the referral factor was a type of collective intelligence, there appears to be an innate tendency to share good news and experiences. If experiences have been positive there seems to be a biological predisposition to want to assist others in your immediate circle. Which to me is a noble trait.


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## Garpal Gumnut (26 November 2011)

Solly said:


> Tulips, ah yes, I always tiptoe lightly through them. Also reminds me of Charlie the postal worker. Want to buy some postal reply coupons ?
> 
> I suppose the referral factor was a type of collective intelligence, there appears to be an innate tendency to share good news and experiences. If experiences have been positive there seems to be a biological predisposition to want to assist others in your immediate circle. Which to me is a noble trait.




Thanks Solly, as ever a bastion of sensibility.

The Church of the Coral Sea ( Inc ) has as it happens the Tulip and the Ukelele as two of it's treasured icons.

It has a 95% referral rate during life and a 100% in the hereafter. 

We are looking to franchise in to the Gold Coast, we do a rather fine Japanese Wedding, and you don't have to be Japanese to buy it. In the meantime I await Byrnsie's reply on Casa Cassimatis, and will tabernacle you by the usual means. 

gg


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## Frank Ainslie (26 November 2011)

Solly said:


> Harleyquin & Frank,
> 
> Does this look familiar ?
> 
> ...




Hi Solly,

_“I want to see a more transparent financial system, and believe that the present system can be improved for Mr and Mrs Average prospective financial plan seeker; even if Mr and Mrs ACE doesn't believe it.” HQ_

HQ makes a lot of sense. All of her postings are of interest and she always seeks to be constructive. Unfortunately, there is a negative element on this forum that want to misconstrue everything she says without giving weight to her comments. Others like ‘Igetit’ have listened and commented without judging or condemning. It doesn’t mean that he or fair-minded people on this forum condone everything we have done or have agreed with everything we Stormies have said, but they have given us the benefit of the doubt. We can ask for no more than that!

The Storm set-up was impressive – no question about that! Storm had the credentials, the infra-structure, the backing of major banks, a track record and the systems (or so we thought) to safeguard our assets. This was very re-assuring for investors that wanted to safeguard their assets and have them grow in the long-term.   

There was no reason at the time to doubt that Storm could deliver on its promises despite the _‘Holy Trinity’_ pontificating otherwise.


----------



## Julia (26 November 2011)

Solly said:


> Now scheduled to;
> *30 November 2011*





> Civil penalty proceedings against the Cassimatises
> 
> Proceedings are being held in public so anyone interested may attend.
> 
> ...



Solly, do you know what the essence of this is?
Are the Cassimatises required to be there?  To have anything to say?

When I tried to access your link, it failed.


----------



## Frank Ainslie (26 November 2011)

Igetit said:


> Hi Julia,
> 
> "WHERE DO I SIGN UP; .....MONEY FOR JAM".
> 
> ...




Hi Igetit,

‘You get it’ but they will ‘never get it’ I’m afraid!

In response to the Doctor Patel analogy, Julia has responded, _“That's a totally ridiculous analogy and you know it. To suggest a patient is in a position to judge the skill of a surgeon they may have met for the first time and to compare this with agreeing to participate in a financial scheme you don't understand is just silly.” _

In fact it’s the perfect analogy but Julia has decided to discard the comment because it doesn’t suit her to consider it.  

People literally placed their financial lives in the hands of Storm who was reputed to be a skilled financial advisory firm. People that went under Doctor Patel’s knife knew nothing about surgery and no one expected them to! The people that put their trust in Storm knew little if anything about investing in the share market. That’s why they went to Storm in the first place.

Doctor Patel had a duty of care as a surgeon to perform to the standards expected of a qualified surgeon. Storm had a duty of care to perform to the standards required of a qualified financial advisory firm. 

Doctor Patel failed in that duty of care and has now been imprisoned for so doing. Storm and the Banks that concocted these schemes together failed in their duty of care to Storm's clients and we now want the culprits to pay for their wrongdoings. 

Can anyone see the difference so far?

The victims that suffered under Doctor Patel’s knife could hardly be classified as culprits although Bunnyip may have differing views on this? Why therefore are Stormies being labelled any differently. Did any Stormies lose their life as a consequence? Yes, they did (more, I would suggest than those that had the misfortune to trust in Doctor Patel) so for Julia to flippantly suggest _“That's a totally ridiculous analogy…”_ shows you the level of her thinking. Hundreds, if not thousands of people’s lives have been completely wiped out in the Storm collapse. Yet Julia cannot see any similarity or, for that matter, feel any compassion for those people.  

You have said to Julia, _“I have noticed that you have the capacity to be a little nasty in your dialogue at times and I am sure you will be offended by this response, as people who like to give it but not take it generally are.”_ You’ve got that in one!

She is without doubt one of the most opinionated people I’ve have ever encountered. No matter what you or anyone else says she knows best! Whatever facts you produce, she refutes on the basis that she has a superior intellect! Sometimes she doesn’t even bother to look at what you present to her because it is not worth (in her opinion) considering. She takes the moral high ground on every issue and there is no room for compromise. She’s an expert in everything so she can’t be told! When she’s confronted with evidence to the contrary, she gives puerile responses.

Little does she realize that by refusing to listen to the views of others and at least give them due consideration, she is merely demonstrating her lack of objectivity and her obvious self-obsession with her own ideas. She seems to find some solace in her view of the world ‘ACCORDING TO JULIA’ and you will never shake her from that position. 

What was that you said! _“Sad really.”_ We, the people that have had to live with this situation for three years now, have not only lost everything, but we’ve had to listen to people like her, Bunnyip and SIG1974 (uninformed at best) prattle on about things that they haven’t bothered to research. Now, there’s a word ‘reseach’ that we often hear on this forum from these three. Perhaps it’s time they did some research so they can better acquaint yourselves with the facts. Perhaps then we can give some credence to what they are saying.

Yes, you can classify this as a rant! The bilge coming from them of late is enough to make anyone rant. Fortunately, there are good people in our society from all walks of life that have extended a helping hand to the people that have been caught up in the Storm holocaust. They compensate in full measure for those that want to take the knife to us because we refuse to accept that we are the wrongdoers in this sorry saga. 

The Worrells Court case, the PJ-C hearings and findings, the pending court action against the Banks, the Media or anyone else for that matter has never described the Storm investors as the wrongdoers. Yet, these three keep playing the same old tune. What does that tell everyone about their level of mentality? Personally, I believe it speaks volumes!


----------



## Solly (26 November 2011)

Julia said:


> Solly, do you know what the essence of this is?
> Are the Cassimatises required to be there?  To have anything to say?
> 
> When I tried to access your link, it failed.




Hi Julia

It's a further Directions Hearing re matters from 1 August 2011 hearing.

Here's the link again. (It appears that links truncate in replies.)
https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument


----------



## Julia (26 November 2011)

Solly said:


> Hi Julia
> 
> It's a further Directions Hearing re matters from 1 August 2011 hearing.
> 
> ...



 Thank you, Solly.  That link was fine.
To go back to my earlier question, do you know if the Cassimatises are required to appear?  To answer questions?  i.e. I have little idea about what form such a hearing takes.


----------



## SJG1974 (27 November 2011)

Frank Ainslie said:


> Hi Igetit,
> 
> ‘You get it’ but they will ‘never get it’ I’m afraid!
> 
> ...




Frank,

How does one follow on from that rant?

First you compare what you have been through to rape.  Then you compare Storm to the holocaust.  Then you compare your plight to that of a patient of a negligent doctor.  What could possibly come next???  I can’t wait to find out.

But you are right…I don’t get it.  Amongst the things I don’t get are…

-	I don’t get why you decided to take such a big risk with your life savings
-	I don’t get how you could think borrowing against your home was not risky
-	I don’t get how you could think investing 100% into shares was not risky
-	I don’t get how you could think then gearing it all again into a margin loan was not risky
-	I don’t get why, with in excess of $1m and only wanting $45K p.a., you decided on taking this risk over and above the other options you said you considered
-	I don’t get how you could think paying 7% fees  on your geared up asset base could represent anything near value for money
-	I don’t get how you could blindly follow this high risk strategy without giving due consideration to the risks involved
-	I don’t get how, with all the evidence you now have, you still deny this was a risky strategy
-	I don’t get how you can seemingly think that you had no choice in the matter
-	I don’t get how a man of your experience could come to the above conclusions.

You have said you want to educate people so they don’t get the same result as you did.  Well focussing on the banks won’t help the next person who walks into the offices of a financial planning company determine whether to invest or not,  I am afraid.  It might be the focus of your legal fight, but the man on the street doesn’t have the ability to unwind the complex relationships that a financial planner, or an accountant, or a solicitor may have with third parties. You said yourself it has taken you 3 years. That’s an issue for the courts, not Joe Public.

No, the way you can help people Frank is to help them avoid making the choices you made. Because the power we as individuals have is in the choices we make, and how we make them. Financial planners are like all other service providers, they want our business.  They make money off of their clients.  Nothing wrong with that in general.  But is it wise to just simply believe everything they say and throw common sense out the window? I am sure you know the answer to this.

As I have said, a Storm adviser claimed that 80% of people who walked through their doors considered the pros and cons and CHOSE to walk away.  You CHOSE not to. Regardless of what the banks did or didn’t do, you knew the strategy and you agreed to implement it; if you didn’t then you should have.  No one else made the CHOICE for you. You would not be here if you didn’t make that choice.  That Frank, is the role you played in this.  And it is not a crime to make bad decisions, but as you well know and are living every day, decisions we make have consequences. 

You and your mate Igetit should remember that we aren’t in court.  No one is on trial here. This is an internet forum, nothing more.  You and Igetit and other victims have a vested interest in this whole saga…me, I am just an interested onlooker. I am not interested in debating what the bank did and didn’t do- I will wait for the court to tell me the legalities of it.

You have made some rather ridiculous claims if I may say so.  And you have made them over and over and over again.  Every time someone questions them, you are unable to provide an answer.  In fact, you avoid them like the plague.  And you then attack the man and not the ball. THAT, Frank, is what speaks volumes about you.

Good luck with your fight Frank.  I mean that, regardless of what you may think of me; of that I could not care less.  However, I think your time would be better off concentrating on your legal stoush with the banks rather than your long winded posts on this forum that really do nothing for your cause.


----------



## Judd (27 November 2011)

Solly said:


> bunyip
> 
> What's your opinion of the (double) leverage strategy that Storm was pushing ?
> Do you have a position on whether it is an acceptable method to use ?
> ...




I don't know what bunyip thinks about the strategy but I reckon that if you wish to hang 'em over the fence and risk them being chopped off, go for it.



SJG1974 said:


> ....me, I am just an interested onlooker...




That is where I am as well since there is no direct impact on me.  Possibly/Maybe/Could be downstream if the Storm clients are successful with a hit to the bank but the banks will get over it.

Very strange position though to claim that one dodgy financial planner means all FPs are dodgy.  When I had lunch with a mate, who is an FP, Storm came up.  Shook his head an recounted how an accountant, on behalf of a farmer, sent him the Storm guff.  Simply looked at how much the farm income was, the upfront fees Storm charged, rang two mates and asked how much they would charge for arranging a margin loan of that size - over $1m (his mates would have charged about $5k) and got back to the accountant saying if the farmer was prepared to pay Storm an upfront fee of four times the farm's annual income, he would arrange the deal for about a quarter of the farm income.  The farmer took the hint and binned Storm's proposal.  That advice cost the farmer not one cent.

So reversing the proposition that one dodgy FP means that all FPs are dodgy, then my example confirms that if one FP is an honest broker, then all FPs are honest brokers.  Have to be balanced in these matters, you know.


----------



## Julia (27 November 2011)

SJG:  This forum has a very useful "Ignore" function.

https://www.aussiestockforums.com/account/ignored

Allows you to simply avoid trolls.


----------



## SJG1974 (27 November 2011)

Julia said:


> SJG:  This forum has a very useful "Ignore" function.
> 
> https://www.aussiestockforums.com/account/ignored
> 
> Allows you to simply avoid trolls.




Thanks Julia, I may give this a go.

When reading a certain poster's non-sensical drivel I can actually feel my IQ falling. Perhaps the ignore function will help solve that issue? 

Cheers!


----------



## Harleyquin (28 November 2011)

Thanks for the info that you posted on post no, 6015 Solly, it made very interesting reading in hindsight.  I haven't seen it before but have seen some similar sentiments expressed in the storm paperwork.  

Found it interesting that a large percentage of clients came from client referrals.  I wonder how this compares with client referrals for other financial planning groups.  When it comes to finding people to help us with financial matters we all tend to ask others if they are happy with their advisor, do you think they are trustworthy, do they have the right qualifications etc, as some advisors get a good repution amongst their clients as we often see written here on this forum.

Referral 'by word of mouth' is, I would have thought, a normal occurrence.

I know that there's been some criticism, particularly earlier on, on this forum that potential clients found out that storm clients were happy with their advisors and therefore recommended storm, and this inevitably made them 'suitable' for the 'greedy' tag.  Were storm clients ever called 'greedy' before storm collapsed or is this just something that's been reserved for them since 9th January 2009?

I don't know how stupid this is going to sound, but if clients of a financial planner said something like this 'oh don't go near that lot they're hopeless' , would anyone then be considered stupid for not going near that particular planner.  I see this as a reverse situation to the criticism levelled at stormies.  Just a thought.

Something else that you might find interesting is the invitation to the castle in Italy, where Tom Cruise and his wife were married, and storm clients who went on the Meditterean cruise in 2007 were entertained.  I don't have a copy as we didn't go on any of the storm 'excursions'.

If anyone out there in stormyland has a copy and could scan it, could you post it on this forum?  I'd be interested in seeing some of the comments.


----------



## doobsy (28 November 2011)

In the interests of keeping things upbeat and interesting we seem to have established 2 clear sides. Looking forward to the comments from both to continue.

Side 1: Storm Clients + FP haters: Believe that the whole thing was illegal, there was a UMIS and the banks were the puppet masters. Because the banks may have been more involved than was known at the time they feel there should be compensation potentially all the way back to dollar 1. All FP's are only out to steal money.

Side 2: FP's + Owner investors: Can't work out why people invested into the strategy. Feel that part of the losses should be incurred. Feel that Storm going under means plenty of the bad eggs were removed from the industry. Would hate to see a Storm client in a better position than Average Joe who stayed invested throughout and is still down up to 40% himself and has had to cut back on living expenses also over the past 3 years to ensure their capital is protected as best as possible.

That is the crux. The non storm client group feel that no matter what the circumstances that Storm was the major player not the bank and the clients went with Storm under their own free will. They therefore should be no better off than other clients who were less agressive but due to markets are still down up to 40% on their capital pre crisis. Because in my mind if you are willing to put the house, the super on the line and gear it all up, no matter who you used, you would have been invested heavily throughout the past 3 years because no one would have convinced you otherwise.

Darkside comments:

I say that with some level of experience. I saw Storm clients both pre and post going with Storm (some did look for 2nd opinions). They all took one look at our proposal and chose to stick it out because ours would not have provided the same "modelled" returns. 

QUESTION FOR THE STORMIES: Did any of you get a 2nd opinion or go even further and get a 2nd plan? If so, how different were the recommendations?

As to the backing of the banks that keeps getting mentioned. My understanding was they only used CBA or BOQ if the client did not have an existing bank / loan that they preferred to use and/or didn't want the hassle of arranging it themselves. Since we are hating on banks I would think pretty much every bank should be included as all arranged loans in some way for clients, just not all on the same scale.

HQ: What sort of information are you looking for on the Castle outing, we can see what can be dug up.


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## SJG1974 (28 November 2011)

If anyone wishes to dredge up the past, check out this link which goes to the former Storm Financial website, probably not long before the whole thing went bellyup.

http://web.archive.org/web/20080720061656/http://www.stormfinancial.com.au/index.php

It makes for interesting reading to say the least.

The good and bad thing about the web is that once its on there, its pretty much on there for ever.


----------



## Harleyquin (28 November 2011)

Hi Doobsy enjoyed most of your last post and like you would like to see any future discussions directed into into the upbeat slot.  I'm gathering that you're either a FA or similar.  As a member of Side One, I find myself at this point in time unable to trust an advisor based on what I now know.  Don't take it personally and despite what some have said on this forum we are not all FA haters, I've meet some 'nice' ones, just don't trust myself to trust them that's all.  Blame it on a certain experience over recent years.  

Also I stress that I only speak for myself, that way any mistake/s I make on this forum can be directed solely at me, and I'm happy to take responsibility for any mistakes that I make.  I've seen a copy of the castle invite quite some time back and I'm interested in what those who believe that the banks weren't closely 'associated' with storm, make of the wording on that invite.  

When I came back 'online' a week or so back I only read a couple of posts, read Julias post on the r*** story, and fired back, as it certainly seemed out of character for her to say such a thing on a public forum, and the only reason I could see for such an admission, *was to trivialise the trauma that stormies are feeling*.  Financial r*** is certainly real imo.  Have just read Julias post #5833 and understand.  My sincere apologies and I hope that you have taken advantage of the help available to those in your position to try and lessen in some way the effects of this crime.   

Rape is an horrific crime, and one I'm not qualified to comment on, unfortunately we need to accept that the r word is used poetically to describe 'the loss of something important'.  I thought that Franks explanation in post #5784 when he says 'this is a hypothetical ...' explains this adequately.

Bunyip you say in post #5785 that _'you are not aware of all stormies were greedy'_, maybe you and others don't claim that ALL stormies were greedy, yet I find the word GREED used profusely in regard to stormies throughout this thread, including your post # 5789 "_or perhaps it was just a case of being GREEDY or stupid_" and SJG #5847 "Given your ....you were GREEDY'.

As a stormie I feel that we are constantly accussed of being greedy, perhaps the small sample of posts that I've highlighted above will explain while I feel this way.  Go back a way on this thread and there are loads more.


----------



## Harleyquin (28 November 2011)

Thanks for the following information from your link SJG

Helping you create your good fortune
At Storm Financial, our core desire 
is to support you in a genuine and lasting 
way in your quest for a fulfilling life.

While planning for your future is important, you also need to be able to enjoy life in the meantime. . . LIVE! now. Our prime objective is to assist you to make money - to achieve wealth so you are free to spend on the things you want.

Storm is one of Australia's largest and fastest growing Financial Services firms. Our strength comes from providing quality services and advice, based on sound research, which integrate smoothly with your life goals and ambitions.

Investing successfully is about fulfilling your full financial potential; not about being constrained by the limits of your present position.
  Part of our vision is putting within reach of the average Australian the wealth creation instruments that are traditionally the domain of the rich.

We take the confusion and complexity out of investing and provide free investor education so you can make informed choices to create the quality of life you desire.

When our clients do well, we do well - and the results speak for themselves.

storm milestones
As a rapidly expanding corporate sucess story Storm has achieved significant milestones in 2007

More....

free education
If you want money to work for you rather than you work for money, if you want the freedom to do what you want to do, click through to more information and course registration on our free no-obligation workshops.

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opportunities
Acquisitions and Authorised Representative expansion

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in praise of storm
Long-time client of Storm, former Australian Cricket Coach John Buchanan shares his view of Storm's success.

More...
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Australian Financial Services Licence No. 228905


----------



## DocK (28 November 2011)

doobsy said:


> In the interests of keeping things upbeat and interesting we seem to have established 2 clear sides. Looking forward to the comments from both to continue.




I'd suggest there is a third side, as outlined below - maybe the "debate" is triangular?



> Side 1: Storm Clients + FP haters: Believe that the whole thing was illegal, there was a UMIS and the banks were the puppet masters. Because the banks may have been more involved than was known at the time they feel there should be compensation potentially all the way back to dollar 1. All FP's are only out to steal money.
> 
> Side 2: FP's + Owner investors: Can't work out why people invested into the strategy. Feel that part of the losses should be incurred. Feel that Storm going under means plenty of the bad eggs were removed from the industry. *Would hate to see a Storm client in a better position than Average Joe who stayed invested throughout and is still down up to 40% himself *and has had to cut back on living expenses also over the past 3 years to ensure their capital is protected as best as possible.
> 
> That is the crux. The non storm client group feel that no matter what the circumstances that Storm was the major player not the bank and the clients went with Storm under their own free will. They therefore should be no better off than other clients who were less agressive but due to markets are still down up to 40% on their capital pre crisis. Because in my mind if you are willing to put the house, the super on the line and gear it all up, no matter who you used, you would have been invested heavily throughout the past 3 years because no one would have convinced you otherwise.




Side 3:  Those who feel this "debate" is going nowhere as there appears to be no interest shown on either side of reaching a middle ground, or actually giving consideration to "the other side's" point of view.   The section I've bolded above is, imo, often at the crux of it for the non-storm bunch - can't understand why somebody would get so hot under the collar by the thought of someone receiving "more than they deserve" otherwise?  I sit at my screen and alternatively swear, laugh or simply shake my head in bewilderment at the lack of manners, courtesy, sensitivity or consideration shown on this thread.  The bile spewed by some and pomposity sprouted by others is certainly eye-opening, if not always entertaining.  I don't think the blinkers are being worn only by one of the sides.  In the end it will come down to the court's decision based upon the law and nothing else - matters of "blame" and whether claimants "deserve" to be compensated or not are immaterial, and the endless exhortations to admit blame or otherwise are pointless imo.  



> Darkside comments:
> 
> I say that with some level of experience. I saw Storm clients both pre and post going with Storm (some did look for 2nd opinions). They all took one look at our proposal and chose to stick it out because ours would not have provided the same "modelled" returns.
> 
> ...



.

As to the backing of the banks - I think your understanding may be incorrect in most cases.  I had a good relationship with my bank - which happened to be CBA Southport - and told my adviser that I'd arrange my own finance and didn't need him to obtain quotes etc for me.  This was met with strong opposition and it was explained at great length that discounts in fees, interest rates etc could be obtained by using their "connections" in Townsville.  They found it easier to facilitate fundings into the index funds etc when dealing with one of their banking contacts who was very familiar with the storm procedures.  Silly to waste my time when they were happy to look after everything for me and could get a better int rate etc etc.  This may not have been typical across the board, but my experience would indicate that the storm method was to direct the banking business to their close bed-fellows, rather than risk their customers dealing with their own bankers. 

Harleyquinn - I didn't consider going on any of their overseas jaunts either, but I do know a couple who did.  As far as I am aware they paid their own way, and reports of storm or the banks funding these holidays are false.  I think a group discount may have been obtained for cruises etc due to the size of the booking, but this would be standard practice I assume.  I was told by the couple concerned that an event (I think it might have been Tina Arena singing at the Castle) was put on by one of the banks, or maybe Challenger or Colonial - can't remember which one, sorry, and I believe a ball or dinner may have been provided by either storm or Manny & Jules.


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## doobsy (28 November 2011)

HQ - openly a member of the FP industry. Happy to be so. I take nothing personal when on this forum and would like to think I have done my bit to assist a few ex stormies over the past couple of years to get back on track.

Dock - Challenger put on the castle show according to my sources. Tina did sing and the fireworks overlooking the lake were impressive from reports.

I would think your bank example shows that CBA across the board were not all on the same page RE storm. I think part of the investigations will be that certain branches are found wanting when it comes to their compliance and also certain managers up the line will come under fire. I don't think CBA as a whole were in bed and I worry that will cost the investors when it comes to the UMIS argument. CBA will be looking to show they declined loans in different branches that were Storm clients and therefore were not completely in bed with Storm.

I understand there is alot more in there than that but they will be looking to create distance anyway they can. My understanding of BOQ is that they are taking the argument that their loans were done in the same vein as no-doc or lo-doc arrangements and that allows them to not ask all those pesky questions about income etc. They will fall back on signed disclosure pages for their defense.

Regarding the average Joe, I would think the bulk of people want to see a level of fairness. If Storm clients have been wronged (and they have, mostly by their adviser) and there are means to address this then the PI cover or whoever should cough up. But I keep coming back to any other investor over the past 3 years, anyone else who pulled money out to start a small business that failed, anyone else who bought the wrong unit in the wrong town at the top of the market, anyone else who thought they could trade foreign exchange after a 1 week course. They have all lost capital and are working to get it back but there are no bailouts. Stormies should get something back, they should not get it all back.

Fire away.


----------



## doobsy (28 November 2011)

Oh, the Storm paid for ball (nice of them to give back some of the 7%) was the Venetian Ball that they love using the photo from with E & J all dressed up.


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## DocK (28 November 2011)

doobsy said:


> HQ - openly a member of the FP industry. Happy to be so. I take nothing personal when on this forum and would like to think I have done my bit to assist a few ex stormies over the past couple of years to get back on track.
> 
> Dock - Challenger put on the castle show according to my sources. Tina did sing and the fireworks overlooking the lake were impressive from reports.
> 
> ...




No fire coming from this direction - as I said, it'll be a matter for the courts - I was merely expressing my opinion on what's probably the root cause of the horror and angst shown by some at the mere suggestion that ex-stormers might get back "more than they should".   Personally, I don't think there's much chance of total compensation of all funds contributed - but I'm no legal eagle and my opinion counts for nothing.  But nor does anyone else's really - unless they want to declare themselves as being at the heart of the legal proceedings underway.  What will be, will be - endless haranguing or defending on this forum will make no difference in the end.  The opinions expressed, and more particularly the language and vitriol used to express them (by some, not all by any means), are what confound me.  

As to whether other branches of CBA declined loans for investment in the storm strategy or not, and whether only a few branches were rogue or not - I'm not sure this would be a get-out-of-jail free card for the CBA.  Their T'ville branch (North Ward I think?) had been writing record levels of lending and had been audited at least once during the period that the bulk of the lending was taking place.   The question probably should be if CBA executive can possibly claim to be ignorant of the lending and relationships that were in place in the branches concerned, and if not, why not?  I seem to recall reading that several branch managers were quite annoyed that the T'ville branch kept taking out "lender of the year" or some such award several times, due mainly to the business generated with/from storm.  Branches of the CBA are not independantly owned and to the best of my knowledge the same lending standards should apply across the board.  Anything falling outside approved lending criteria would need to be submitted up the chain surely?  I understand that some CBA scapegoats have already lost their jobs - haven't read as much about BOQ or NAB.  I believe BOQ branches are more of a franchise deal - perhaps it's more a case of stand on your own in that situation.  On a lighter note - a local BOQ manager has recently recommenced his job after being found not guilty of stealing money from his own branch safe.  The funniest part is that he doesn't deny taking the money - apparently he was carjacked by Irish terrorists who injected him with an unknown substance and demanded the contents of the safe or they wouldn't provide him with the antidote!  The jurors apparently decided that his story was just too outlandish to be anything but true!  So, to get back to the topic, who can tell what our legal system may rule?  Personally, although it's unlikely to apply to my own situation, I hope most ex-stormies get back as much as possible - it will still be small potatoes to the banks, and whether they're fully compensated, partly compensated or not compensated at all won't make a scrap of difference to all those average Joes out there who have lost capital one way or the other - they'll be in the same situation either way.  Why begrudge a much needed helping hand to someone else, just because it's not extended to yourself?  I know, don't tell me - it's just human nature.


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## Junior (28 November 2011)

DocK said:


> As to the backing of the banks - I think your understanding may be incorrect in most cases.  I had a good relationship with my bank - which happened to be CBA Southport - and told my adviser that I'd arrange my own finance and didn't need him to obtain quotes etc for me.  *This was met with strong opposition and it was explained at great length that discounts in fees, interest rates etc could be obtained by using their "connections" in Townsville.*  They found it easier to facilitate fundings into the index funds etc when dealing with one of their banking contacts who was very familiar with the storm procedures.  Silly to waste my time when they were happy to look after everything for me and could get a better int rate etc etc.  This may not have been typical across the board, but my experience would indicate that the storm method was to direct the banking business to their close bed-fellows, rather than risk their customers dealing with their own bankers.




I've been reading this thread for sometime, and am also in FP.  I agree with most of what Dock and Doobsy are posting here.

With regards to the above, my guess would be they were receiving a trail commission from the bank..maybe even volume bonuses as well.  In addition they would be more likely to have larger loans approved if you used their contacts at the bank.


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## SJG1974 (28 November 2011)

Doobsy and/or Junior,

As Financial Planners, have you ever had a client approach you wanting to undertake a double gearing strategy in the manner that Storm promoted, or would you ever see a circumstance where this could be appropriate for anyone?

I posted a link a while back to an article by Paul Resnik which looked at margin lending on its own and also the double gearing strategy.  It would appear from that, that if Storm has have taken even 5 minutes to stress test the entire strategy they would have seen just how ludicrous it was.

http://www.aph.gov.au/SENATE/committee/corporations_ctte/fps/submissions/sub293.pdf

Their research even suggests that a margin lending scenario without the double gearing doesn't bring much to the table either...


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## Junior (28 November 2011)

SJG1974 said:


> Doobsy and/or Junior,
> 
> As Financial Planners, have you ever had a client approach you wanting to undertake a double gearing strategy in the manner that Storm promoted, or would you ever see a circumstance where this could be appropriate for anyone?
> 
> ...




The majority of my experience to date is as a Paraplanner.  

I write SOAs, work with advisers to put together strategies, do some modelling, insurance quotes etc.

I previously worked for FPs who recommended margin lending to some clients.  My experience was, pre 2008, the sentiment in FP circles was effectively that the bull market would run for a long time, and there was rarely talk of it ending.  'Commodity Supercycle', 'we have a strong financial system', 'PEs indicate stocks are at fair value' etc.

A common myth being perpetuated was that blue chips stocks were unlikely to ever fall more than 20%, and by gearing to a 50% lending ratio, you are mitigating the risk of a margin call as your conservative blue chip portfolio (bhp, banks etc.) would need to fall more than 30% to trigger a call....unlikely to ever occur, and if it did, you can sell some stock or add funds to your account.

The other major basis used for recommending a ML was tax based.  Interest is deductible, benefits of franking credits etc. 

As far as clients requesting margin loans, it happened a lot.  Because most clients are via referrals, they would hear from the friends, relatives etc. how great margin lending is, and how much money they were making, tax they were saving and so on.

Having experienced all of this, my opinion is that margin lending should rarely/never be recommended by FPs.  The risks outweigh the potential benefits, and for a buy/hold strategy they only work in a bull market...one black swan event and the game is over!


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## doobsy (28 November 2011)

SJG

My experience is a little different. My ex boss was very anti gearing. Out of a book of 500+ clients we had maybe 10-15 margin loans and most of those would have been inherited clients from other advisers. 

We used them to average clients into markets but always started with VERY low LVR's (20%) with a 50/50 monthly contribution. We never saw the tax advantages as significant enough and agree completely with the work done by the boys in your article. ( We used to use their risk tolerance questionairre)

At no stage would we ever double gear. We work in a town that was a major Storm hub so saw the plans all the time. There were a couple of other planners pushing slightly less aggressive strategies (no initial home equity or if equity then no margin loan). I did not see anyone else who double geared (or effectively triple geared+ on capital outside the home/farm)

We warned clients to reduce exposure to shares if borrowing or at least bring LVR's down because we were lucky to be early into sourcing quality information about the subprime problem. We have newspaper columns to back that up. To give that argument balance we also went too early and for more conservative clients (esp retirees) we reduced share exposure to 10% in late 2006. That made us miss 12 months of upside. We lost clients because of that. Those that left probably got back in at virutally the top unfortunately. Those who stuck it out experienced drops of 10-15% at the bottom (listed property did us no favours either).

Our thoughts have always been about capital preservation. It is SO much easier to make money if you still have most of it still around working for you after a downturn. 

To make this point:

Investor 1 - 100% shares
Investor 2 - 30% shares, $70,000 defensive bringing in just 3% steadily

$100,000 invested

If unfortunate enough to time it and run into some bad years early:

Year 1 - 8% growth return
Year 2 - -14% return
Year 3 - -4% return
Year 4 - 2% return
Year 5 - 25% return.

Investor 1

Year 1 - $108,000
Year 2 - $92,880
Year 3 - $89,164.80
Year 4 - $90,948.10
Year 5 - $113,685.12

Investor 2

Year 1 - shares - $32,400  defensive - $72,100  total - $104,500
Year 2 - shares - $27,864  defensive - $74,263  total - $102,127
Year 3 - shares - $26,749.44  defensive - $76,490.89  total - $103,240.33
Year 4 - shares - $27,284.43  defensive - $78,785.62  total - $106,070.04
Year 5 - shares - $34,105.54  defensive - $81,149.19  total - $115,254.72

In a bull run that looks completely different obviously but is anyone backing in a bull run with no more volatility? I know which journey most of my retiree clients want to go on and it isn't the rollercoaster.

Oh and change the -14% and -4% to -20%+ and look at the effects, you need a long run of very good markets to come back. Of course other advisers will feed the usual line of time in the market but trust me timing is important especially when starting.


----------



## SJG1974 (28 November 2011)

Thanks Doobsy and Junior for those comments....good to get some perspective from the darkside as it were!


----------



## Julia (28 November 2011)

doobsy said:


> In the interests of keeping things upbeat and interesting we seem to have established 2 clear sides. Looking forward to the comments from both to continue.



That's a clear summary.



Harleyquin said:


> When I came back 'online' a week or so back I only read a couple of posts, read Julias post on the r*** story, and fired back, as it certainly seemed out of character for her to say such a thing on a public forum, and the only reason I could see for such an admission, *was to trivialise the trauma that stormies are feeling*.  Financial r*** is certainly real imo.  Have just read Julias post #5833 and understand.  My sincere apologies



Glad to have your explanation, HQ, thank you.  Understood.  I was at the time surprised at your post because you are clearly not a callous person and the vehemence of your remarks was out of character.  



> Rape is an horrific crime, and one I'm not qualified to comment on, unfortunately we need to accept that the r word is used poetically to describe 'the loss of something important'.  I thought that Franks explanation in post #5784 when he says 'this is a hypothetical ...' explains this adequately.



Disagree entirely.  Nothing adequate or appropriate from FA in response to my post.



> Bunyip you say in post #5785 that _'you are not aware of all stormies were greedy'_, maybe you and others don't claim that ALL stormies were greedy, yet I find the word GREED used profusely in regard to stormies throughout this thread, including your post # 5789 "_or perhaps it was just a case of being GREEDY or stupid_" and SJG #5847 "Given your ....you were GREEDY'.



I haven't dissected who said exactly what but have had the impression that 'greed' was referred to only when applied to people who already had an asset base that would have supported a very comfortable retirement if invested very conservatively.

In that circumstances, it seems like a pretty reasonable descriptor to me.

Others have been described as "naive" for thinking double gearing is safe.
I, and others, have said this, and I stand by it.

One of the difficulties in a discussion like this is that we have people who are hurt and very personally involved, and then people who are interested onlookers.

When we're feeling hurt, a comment which is just an objective comment from someone with no emotional involvement often comes across as personal criticism.
e.g. the term "naive" above:
  actual meaning "having lack of sophistication, understanding, experience". 
 It's simply a fact that this applied to many of the affected people.  It is not a criticism.  



> As a stormie I feel that we are constantly accussed of being greedy, perhaps the small sample of posts that I've highlighted above will explain while I feel this way.  Go back a way on this thread and there are loads more.



HQ, if there's one thing common throughout this thread, it's unfair and unreasonable accusations all over the place.  The only examples I've seen where greed is the prime motivator is in the example offered above.



Harleyquin said:


> Thanks for the following information from your link SJG
> 
> Helping you create your good fortune
> At Storm Financial, our core desire
> ...



Etc  Etc.
It makes pretty nauseating reading.
Such extravagant claims.
The sort of thing that would ring alarm bells for me in the first few paragraphs.

However, if you'd asked around and received enthusiastic referrals from friends, didn't happen to notice that we were in the throes of a roaring bull market, then I can see that it would just seem like a dream come true.



DocK said:


> Side 3:  Those who feel this "debate" is going nowhere as there appears to be no interest shown on either side of reaching a middle ground, or actually giving consideration to "the other side's" point of view.   The section I've bolded above is, imo, often at the crux of it for the non-storm bunch - can't understand why somebody would get so hot under the collar by the thought of someone receiving "more than they deserve" otherwise?



OK, I'll have a go at this.
Consider as a rough analogy the current asylum seeker situation.
Most reasonable human beings want to extend assistance to people who are genuinely fleeing persecution.  
The current impasse is allowing anyone who rocks up to Australia in a boat from anywhere, entirely without documentation, being admitted to our community, given accommodation and some income, health care etc.
These people have been able to afford to pay people smugglers.

Meantime, those without funds to pay people smugglers continue to wait patiently in squalid refugee camps in places like Malaysia where they are subjected to mistreatment, have no rights, no medical care, nothing.  They have applied to come to Australia via the conventional means, i.e. via the UNHCR application process and have taken their turn to be vetted accordingly.

Australian  bureaucracy and accommodation facilities are entirely consumed with coping with those who have paid the people smugglers, so for every one of those people, someone in Malaysia is being pushed further back.

The reason we do not like this is simply because most Australians believe in a fair go for everyone, that it's just wrong for some to receive special treatment.   

Sorry for such a lengthy attempt at an analogy, but hope it helps to make the point.

Others have pointed to the considerable losses experienced by many investors during the GFC, losses which I'd say will be a long time being made good. Indeed, many of these investors have confirmed their losses, being so shocked and in fear of further falls, and sold out.  No chance of making good the losses.

 It would simply seem unfair and unreasonable that Storm investors should be compensated for the equivalent of that same market drop.



> I sit at my screen and alternatively swear, laugh or simply shake my head in bewilderment at the lack of manners, courtesy, sensitivity or consideration shown on this thread.



True enough at times.  I know I've reacted less than politely in the face of some of the gratuitous insults, and this is how this sort of unpleasantness escalates.



> In the end it will come down to the court's decision based upon the law and nothing else - matters of "blame" and whether claimants "deserve" to be compensated or not are immaterial, and the endless exhortations to admit blame or otherwise are pointless imo.



Agree.  But given you have some who find perhaps some emotional outlet in continuing to go over the same ground, this is unlikely to change any time soon.



> , and I believe a ball or dinner may have been provided by either storm or Manny & Jules.



Nothing so unusual or suspect about this.  Lots of firms do it for their clients.
I recall, with some cynical amusement, the brief period I used a full service broker:  at the end of the year clients received a 'class' of invitation depending on the dollar value of their investment!
Those with minimal transactions of not high value just got to go to a drink and sandwich stand up affair at the local office with the local personnel.
Those with greater wealth were invited to a swanky dinner somewhere with the head office people.


----------



## DocK (28 November 2011)

Julia said:


> OK, I'll have a go at this.
> Consider as a rough analogy the current asylum seeker situation.
> Most reasonable human beings want to extend assistance to people who are genuinely fleeing persecution.
> The current impasse is allowing anyone who rocks up to Australia in a boat from anywhere, entirely without documentation, being admitted to our community, given accommodation and some income, health care etc.
> ...




I can see where you're coming from, but to use your analogy I'd counter that in the case of the illegal asylum seekers, let's call them "boat people" , there is a detrimental effect for each one that arrives in that a refugee in the legitimate queue has to wait longer.  So a positive for one equates to a negative for another, so to speak.  I agree that most of society would say this is not fair, regardless of their opinion on whether we should process or deny access to the "boat people" themselves,  but that's a whole other topic......

In the case of ex-stormers being compensated, there doesn't appear to be the same negative for a prospective positive.  If the banks are found to have broken the law and ordered to pay full compensation from a certain date the only negative I can think of would be to the bank's bottom line, and potentially to shareholders in the form of a lower div.  Doubt that even a full payout would put much of a dent in profits, certainly not enough to affect divs, so to my mind the massive positive for the ex-stormers in desperate straits (through partly their own fault or not ) equates to a much lesser negative for the banks, and none at all for society at large that I can see - apart from the "it's not fair" factor.    I certainly understand that the vast majority of society would baulk very strongly if ex-storm clients were to be compensated in full, if only because, as you say, many have lost capital due to GFC and will find it hard or impossible to replace it.  I can imagine the resulting media sh#tstorm and if only for that reason I can't imagine full compensation could become reality.  

It has often been pointed out to me though, that life's not fair.  Sometimes it just seems to me that if you're going to get done over or take a hit, better to do it with a large group.  For every group of workers who lose their jobs and entitlements and are bailed out like the Ansett employees there are many unheard of men and women who are ripped off by unscrupulous or unlucky employers that receive nothing.  For every group of flood or fire victims that receive a hand from a generous public, there are those who've lost everything in a flood or fire that received no media coverage and have to rely on friends and family, or a supportive community.  I'm sure there are any number of people who've taken a hit and just had to wear it, but begrudging the "good fortune" of others (if being involved in a class action can be called good fortune) really won't help them in any way.  I'm sure quite a few of the ex-stormers who might be compensated have probably taken a hit or two in other aspects of their lives also.


----------



## Garpal Gumnut (28 November 2011)

There is a very dangerous element of reason creeping in to this thread.

gg


----------



## Julia (28 November 2011)

DocK said:


> Iform of a lower div.  Doubt that even a full payout would put much of a dent in profits, certainly not enough to affect divs, so to my mind the massive positive for the ex-stormers in desperate straits (through partly their own fault or not ) equates to a much lesser negative for the banks, and none at all for society at large that I can see - apart from the "it's not fair" factor.



Agreed.  However, I think perhaps you're under estimating the importance of the "it's not fair" factor.
I don't believe this factor stands alone.  It is imo part of a broader concern regarding the growing sense of entitlement, accompanied by this government's promotion of the nanny state.  I really worry that what I think is the essential characteristic of personally taking responsibility is being undermined by so many rules and restrictions, limiting this personal responsibility.  If you remove the decision making capacity from people in such a fashion, they will gradually lose this, becoming instead dependent on the state.
This, imo, is exactly what some governments have in mind.  A compliant, obedient electorate is easily managed.

Examples are the proposed pokies legislation and the cigarette plain packaging.
Both these suppose individuals are incapable of making their own choices and exhibiting wisdom.  They reduce everyone down to the worst characteristics of the most incapable in our society.

Consider also the successful claims against tobacco companies from people who have smoked themselves silly over decades and pretty inevitably developed serious diseases as a result.  They have claimed that they have no responsibility and it is all the fault of the big tobacco companies.
I hold no brief for manufacturers of tobacco products, but I'm damned if I can excuse anyone who has puffed poisonous substances into their bodies over many years from responsibility for the end result.
No doubt the compensation paid by big tobacco will not materially affect their bottom line, but it does offer the message that, once again, you can be irresponsible and still be compensated.  I simply think this is wrong and not the way our society should be going.  Just my opinion, as always.

Perhaps this all seems far removed from the Storm situation.
To me it's not.

The more we paint people as victims, the more they will assume that role.



> It has often been pointed out to me though, that life's not fair.  Sometimes it just seems to me that if you're going to get done over or take a hit, better to do it with a large group.  For every group of workers who lose their jobs and entitlements and are bailed out like the Ansett employees there are many unheard of men and women who are ripped off by unscrupulous or unlucky employers that receive nothing.  For every group of flood or fire victims that receive a hand from a generous public, there are those who've lost everything in a flood or fire that received no media coverage and have to rely on friends and family, or a supportive community.  I'm sure there are any number of people who've taken a hit and just had to wear it,



A totally realistic and relevant point of view.  I agree.  There have been many people affected severely by floods in FNQ in past years who have never been compensated at all.  But oh how different when Brisbane was devastated last summer!

You, perhaps inadvertently, raise another point.   One Storm client with whom I earlier had some PM communication made the point that the experience with Storm was the more shocking because they'd previously sailed through life pretty much without any problems until now at almost retirement age.  So, of course, the realisation that you've made a huge mistake/been taken for a ride by shysters, totally devastates your existing world view.

Others have seemed to be knocked around by life for most of their existence and as a result have accepted the "life is not fair" philosophy, have their battle scars hardened, and are therefore more able to move on.


----------



## Solly (29 November 2011)

> *"ASIC considers civil recovery remedy*
> Shorten questioned over regulator's actions
> 
> Assistant Treasurer Bill Shorten has been questioned over ASIC's actions following the collapse of Westpoint, Storm and Trio."





More by Kate Kachor @ www.investordaily.com


----------



## DocK (29 November 2011)

Julia said:


> Agreed.  However, I think perhaps you're under estimating the importance of the "it's not fair" factor.
> I don't believe this factor stands alone.  It is imo part of a broader concern regarding the growing sense of entitlement, accompanied by this government's promotion of the nanny state.  I really worry that what I think is the essential characteristic of personally taking responsibility is being undermined by so many rules and restrictions, limiting this personal responsibility.  If you remove the decision making capacity from people in such a fashion, they will gradually lose this, becoming instead dependent on the state.
> This, imo, is exactly what some governments have in mind.  A compliant, obedient electorate is easily managed.
> 
> ...




The first thing that occurs to me in your examples above are that they relate to compensation or protection from irresponsible behaviour with _legal_ products or services.  Gambling, tobacco, poker machines etc are all legal.  I see the potential compensation of ex-storm clients by the banks as being unrelated, as it will only take place if our legal system finds that something _illegal_ has taken place.  IMO a government setting out to "nanny" society's use of legal products is quite different to our legal system applying penalties and remedies where the law has been broken.


----------



## Julia (29 November 2011)

Good point, DocK.  You are realistically focusing on the purely legal aspect.
I was looking more at the wider social implications.


----------



## Harleyquin (29 November 2011)

Thanks for the link to the info below Solly.  So many of us would like to know exactly where ASIC were when, as the regulator, they should have had their finger well and truly on the pulse.  

Attempts have been made to try and 'explain' why ASIC can't monitor every investment, however that's not the case, a decent auditor for example wouldn't need to monitor every investment.  An audit is / or should be done every year on all businesses involved in the financial world,  and this should have been more than enough to throw up any problems a long time before these collapses ever reached a critical stage.

What monitoring do ASIC have in place to ensure that these people are doing the right thing?    In the twenty first century with the technology they have to monitor these things it should be easy. Or is this too simplistic / too much for the ordinary man in the Aussie street to expect.

I expect accountability from ASIC and to date I'm not impressed with their past performance.  To date we're still waiting for a creditable explanation.

Either ASIC can do the job or they can't it's as simple as that.  

If they can't then give us somebody who can.  




*ASIC considers civil recovery remedy 
Shorten questioned over regulator's actions 

By Kate Kachor
Tue 29 Nov 2011 
Assistant Treasurer Bill Shorten has been questioned over ASIC's actions following the collapse of Westpoint, Storm and Trio.


ASIC intends to publish a document by the end of the year that sets out factors that may be relevant in choosing enforcement remedies to recover compensation on behalf of aggrieved investors, Assistant Treasuer Bill Shorten has said. 

Shorten made the remarks late last week in response to questions in the House of Representatives regarding the actions of the corporate regulator in investigating the collapses of Westpoint, Storm Financial and Trio Capital.

In May, Shorten was called on to answer questions regarding ASIC's response to the collapses, including what total amount of investor money was lost in the collapses; what compensation actions did ASIC take against the parties; what criteria did ASIC use in choosing its actions; and what were the outcomes of the actions.

"One such remedy is to take action to recover damages or property on a person's behalf, including as part of other court actions we take," Shorten said.

"However, ASIC must form the view that it is in the public interest to commence such litigation."

He said ASIC would take a number of factors into consideration when deciding whether it was in the public interest to take civil recovery action on behalf of an investor.

Among the factors under consideration are whether such action is considered viable; whether there is enough evidence to prove the civil recovery; and the extent of the impact or amount lost arising from the misconduct. 

Other factors for ASIC to consider are the costs of commencing the civil action; the prospects of the action being successfully litigated by ASIC; and the availability of alternative forms of dispute resolution.

In response to questions about the actions ASIC had taken with Trio Capital, Shorten said the corporate regulator had focused on the conduct of directors and officers of Trio, the investment managers of the Astarra Strategic Fund (ASF) and ARP Growth Fund (ARP), and a number of other stakeholders.

"ASIC is also looking at the conduct of a number of financial advisers who advised their clients to invest in ASF. These investigations are continuing," he said.

When Trio was placed into administration, the reported value of the AFS was around $125 million, he said.

"ASIC has not commenced any actions against any third parties for loss recovery purposes. As ASIC's former chairman indicated to the Joint Standing Committee for Corporations and Financial Services on 24 November 2010, ASIC is unlikely to commence such an action in relation to ARP," he said.

In regards to Storm, he said the corporate regulator's investigations were ongoing.

In terms of Westpoint, the failed company had total capital invested at the time of its collapse in 2006 of about $388 million.

As a result of ASIC's Westpoint actions, investors were expected to see a return of about $160 million to $170 million of the $388 million, Shorten said.

*


----------



## doobsy (29 November 2011)

HQ

I think you will find the problem lies in the following:

How do you prosecute someone who has got the client to sign every single page of the SOA, and the strategy is making them bucket loads of money. 

In the good times, Storm were the top of the tables. Good returns, no complaints, clients loved them. 

By the time it all hit the fan it was too late to say the strategy may not have been appropriate for all clients invested.

This is normally ASIC's dilemma - no one complains when it is all going well. And generally the riskiest strategies make the most money when times are good, right up to the point when it all goes bad. Mostly it goes bad so fast no one can pull it up from a compliance point of view.

From a FP point of view, they disclosed fees, they completed thorough fact finds, they did modelling, all the things any good planner does. The problem was the same advice for every client and the glossing over the risk. But if you are an auditor and you come in and look at say 10 files, and see the clients signed everything, full records of how you came up with the strategy, then you will probably be inclined to sign off. No talk of super, no talk of centrelink etc where it could be avoided so they never tripped up. Investments were index funds so no dramas having advisers pick the wrong funds that underperform.

Trust me, EC had it worked out in his head how to tick all the boxes. He just never backed in a 50%+ fall in markets.


----------



## Garpal Gumnut (29 November 2011)

doobsy said:


> HQ
> 
> I think you will find the problem lies in the following:
> 
> ...




Excellent post doobs.

A bit remiss of Manny though not looking at retracements. Then again he was an FP? Everyones stake goes up!

gg


----------



## Harleyquin (29 November 2011)

Thanks Doobsy and as gg has just said 'excellent post'

There's just a couple of questions come to mind

1.  I'm under the impression that storm were reported to ASIC and ASIC investigated storm and allowed them to continue as before.  I''m not sure what was reported or by whom but obviously there was a problem, why didn't ASIC find the problem back then, when there obviously was one imo

2.  When personal profiles were all different, ie different age groups, risk levels etc and yet the advice all the same risk, shouldn't this have caused them to question further?  Or don't they look at all the paperwork.

3.  Why do some financial planners suggest a SOA first and yet others give it to you after the event.  Do the FPA or whoever is in 'charge' of this have some sort of ruling on when a SOA should be given to the client.  I think that a SOA should be given to the client before they make any decision and not afterwards.

4.  Why is the SOA considered so important in the case of storm eg when they are all same?  I'd like to see the planners give their clients a signed SOA that the planner has signed, he understands what he's proposing and he should have to sign to say that he guarantees the client that he's giving them the type of plan that the client is asking for.  {obviously if the client understands it's different but how many understand?}  Do all clients know they are supposed to get a SOA and when. }


----------



## Solly (30 November 2011)

> "*Storm Financial mansion sold*
> 
> The Melton Terrace home, belonging to Storm Financial founders Julie and Emmanuel Cassimatis, sold for an undisclosed amount yesterday."




From abc.net.au


----------



## Solly (30 November 2011)

> "FORMER Storm Financial customers are set to be updated on court actions against the Commonwealth Bank, Macquarie Bank and Bank of Queensland when Sydney lawyer Stewart Levitt addresses meetings in Townsville and Cairns this week.
> 
> According to the Storm Investors Consumer Action Group, actions being brought by the Australian Securities Investment Commission and Levitt Robinson have been set for trial in the Federal Court in Brisbane on September 10 next year."




From Tony Raggatt @ townsvillebulletin.com.au


----------



## Junior (30 November 2011)

Harleyquin said:


> Thanks Doobsy and as gg has just said 'excellent post'
> 
> There's just a couple of questions come to mind
> 
> ...




Doobsy would be better qualified to answer these queries.  But here's my take:

1. Because they are under-resourced and don't possess the relevant knowledge and experience to recognise that a strategy such as Storms is inappropriate.  As has been previously acknowledged, if the vast majority of clients are happy and making money, then ASIC would probably consider investigating a waste of time.  Pre 2008 there were untold high risk strategies and products being spruiked everywhere....Storm probably didn't really stand out.

2. See 1.

3. SOA should be issued and signed by client and adviser before the advice is implemented.  There is however, a 5 day rule which allows you to issue an SOA after implementation as long as it's within 5 business days.

4. That is what's supposed to happen...the reality is that some FPs use the SOA as a marketing tool and central to their business and others see it as a compliance burden. 

Some FPs charge $1000s for the SOA and spend a lot of time on projections, modelling etc whereas others only include what is required by legislation and hope the client won't read it word for word.


----------



## doobsy (30 November 2011)

Thanks Doobsy and as gg has just said 'excellent post'

There's just a couple of questions come to mind

1.  I'm under the impression that storm were reported to ASIC and ASIC investigated storm and allowed them to continue as before.  I''m not sure what was reported or by whom but obviously there was a problem, why didn't ASIC find the problem back then, when there obviously was one imo

Other planners felt the advice was too aggressive and that they were not being "clear and concise" which is part of what any Fin Plan should be. ASIC (as with most govt depts) obviously felt since client were having each individual page discussed and signed off that clients were getting a full explanation.

2.  When personal profiles were all different, ie different age groups, risk levels etc and yet the advice all the same risk, shouldn't this have caused them to question further?  Or don't they look at all the paperwork.

The rules for giving advice are based around "knowing your client" which storm certainly did (they hounded people for information so that they could get the most out of them) and providing "appropriate" advice based on needs, objectives and risk tolerance. 

Appropriate is a pretty broad brush but it is there to stop investors complaining if fund A outperforms fund B in a certain year. As long as the adviser can justify the reasoning then it is still appropriate. Where I felt they were in danger was more the recommendations to pull money from super for retirees over 60. Take money from a tax free environment and bring it back into a taxable environment then you need gearing for a deduction to offset the tax you have again.

Needs and Objectives  - I think the "education process" clients undertook (I like to think of it as indoctrination) slowly wore clients down until they were nodding their head when advisers (salesman) were suggesting what the needs and objectives were. That mixed in with some generalisations - "You are looking for your asset base to work for you in the best way possible". BS.

Risk Tolerance - again a difficult one. I have seen that clients can change within a 6 month period. The cyclone 12 months ago triggered some to become more conservative, others more aggressive. Storm felt EVERYONE could handle the risk of shares as long as they had a better understanding. Again BS in my opinion. My little old lady posse have never stepped more than 25% into shares and can only sleep at night knowing the bulk of their monies are in defensive income producing assets. The 8 out of 10 that walked away from storm would have made up a high percentage of these sorts of clients. They weren't worth chasing and would have been too much work.

So Storm, through it's seminars, followups etc did a filter on clients before they even started down the proper FP process. By targeting only the clients who made the right noises, nodded their heads at the right time and ticked the right boxes on the feedback forms it made it easier to justify the fact that everyone got a small variation on the same advice.


3.  Why do some financial planners suggest a SOA first and yet others give it to you after the event.  Do the FPA or whoever is in 'charge' of this have some sort of ruling on when a SOA should be given to the client.  I think that a SOA should be given to the client before they make any decision and not afterwards.

Rule is that SOA should come first unless there is a bloody good reason not to. AND THEN it must be given ASAP no more than a few days later. This allows us to get a phone call from a frantic client who has had a family issue, needs us to sell something immediately to get them cash quickly and not mess about getting an SOA ready, sending it to them, them sending back the authority to proceed and then getting things started. It should be the exception, not the norm.

4.  Why is the SOA considered so important in the case of storm eg when they are all same?  I'd like to see the planners give their clients a signed SOA that the planner has signed, he understands what he's proposing and he should have to sign to say that he guarantees the client that he's giving them the type of plan that the client is asking for.  {obviously if the client understands it's different but how many understand?}  Do all clients know they are supposed to get a SOA and when. 

The SOA should be personalised advice. If it is all the same the argument can be made that Storm were not giving personalised advice, not following the "know your client" rule. Where this will struggle will be that some were still working, others retired, some had investment property as the source of the original income, others it was withdrawing super, others the family home. I think there are enough differences that they won't get caught on this point.

The appropriateness is another matter. As mentioned, pulling people out of super is fraught with danger in my eyes as it remains the most tax effective, centrelink effective place for retirement savings. For those who had monies outside, the argument is harder and comes down to needs, objectives and risk.

Planning is not all cut and dry, each planner will use strategies they like, feel comfortable with and have seen work. Because there is investment, tax, estate, centrelink implications with every change we make, more often than not 3 planners will come up with 3 different plans. That doesn't mean 2 are inappropriate. Hope that makes sense.

We have a range of products out there, cash, term deposits, shares, property, all of those in superannuation, should we move super to a transitional pension, a full pension, is there insurance linked, what about an annuity, a funeral plan, will centrelink be affected or lost, what about the tax, the estate, who is getting the money if something happens, is a SMSF appropriate, a family trust to minimise tax etc etc etc. So many variables means that each plan should have clear differentiations. Not sure storms did.

A plan should be a fluid thing as well. No client should get a plan that is set and forget.

Hope that didn't bore too many but I felt it was a good question that deserved a thorough answer from the darkside.


----------



## Solly (30 November 2011)

> *More Storm Financial probes ahead*
> A fuller exploration into the collapse of Storm Financial and the liability of Macquarie Bank and the Commonwealth Bank of Australia will now go forward.
> 
> "There could be negotiations on the way, there's copious discovery that has to occur," said Levitt, adding that his firm, Levitt Robinson Solicitors, had to install $300,000 worth of software in order to handle the discovery from ASIC and the banks."





From www.lawyersweekly.com.au


----------



## Solly (30 November 2011)

> *Curtain falls on Norris's reign at CBA*




More @ abc.net.au


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## Garpal Gumnut (30 November 2011)

Solly said:


> More @ abc.net.au




Thanks Solly.

Perhaps this and your recent posts the most significant on this whole thread. 

Let us hope the roosters from each side read and consider.

gg


----------



## Solly (1 December 2011)

> *"ASIC clear to pursue banks over Storm*
> 
> THE corporate regulator's damages case against Macquarie Bank and the Bank of Queensland on behalf of victims of Storm Financial will continue, after the Federal Court yesterday rejected the banks' bid to have the case thrown out."



More by Leonie Lamont @ theage.com.au


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## Solly (1 December 2011)

Garpal Gumnut said:


> Thanks Solly.
> 
> Perhaps this and your recent posts the most significant on this whole thread.
> 
> ...




Yes GG, it would be good to see that happen.

From the Aunty linked article.


*"Ralph Norris says he leaves the job with no regrets 
except for the Storm Financial controversy."
*(Hot linked to article)


----------



## Solly (1 December 2011)

> *"Inaction by Storm pair risks contempt*
> 
> A FEDERAL Court judge yesterday lambasted the principals of failed Storm Financial for ignoring orders to file a defence earlier this month in their legal battle with the corporate watchdog.
> 
> Justice John Reeves warned that Emmanuel and Julie Cassimatis could be guilty of contempt if they continued to breach court orders."




More by Anthony Marx @ couriermail.com.au


----------



## Solly (1 December 2011)

> *"Storm Financial founders get more time*
> 
> The founders of Storm Financial Limited, Emmanuel and Julie Cassimatis, were given more time yesterday to prepare their defence against charges they broke the Corporations Law."




More by Jason Rawlins @ abc.net.au


----------



## Solly (1 December 2011)

> *"Storm founders' mansion goes 'cheap'*
> 
> THE luxurious mansion of Storm financial founders Emmanuel and Julie Cassimatis has sold at around half the price the former owners initially wanted for the property.
> 
> The five-storey house, at 5 Melton Terrace, this week sold for under $2 million - the reserve the former owners had placed on their property ahead of the November 19 auction."




From: townsvillebulletin.com.au


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## Julia (1 December 2011)

Solly said:


> Yes GG, it would be good to see that happen.
> 
> From the Aunty linked article.
> 
> ...



 I heard that interview last evening.  Mr Norris also said he was angry/upset (can't remember actual word now) when he discovered what had been happening.

Many here, of course, will claim he 'must have known' what was happening.


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## Solly (1 December 2011)

Julia said:


> I heard that interview last evening.  Mr Norris also said he was angry/upset (can't remember actual word now) when he discovered what had been happening.
> 
> Many here, of course, will claim he 'must have known' what was happening.




Here's the audio and transcript of the interview with Peter Ryan on PM.

http://www.abc.net.au/pm/content/2011/s3380477.htm?


----------



## maccka (1 December 2011)

Solly said:


> Here's the audio and transcript of the interview with Peter Ryan on PM.
> 
> http://www.abc.net.au/pm/content/2011/s3380477.htm?




Quoting Ralph Norris from the interview linked above...
"RALPH NORRIS: Well I mean that is a regret because certainly it was something, a relationship that I had no knowledge of, and when I did find out I was not happy at the level of interrogation of that. I think from that perspective I'm proud of the fact that as an organisation we stood up and admitted we'd got it wrong. "

Interesting choice of words there - "and when I did find out I was not happy at the level of interrogation of that."  

Hmmm - perhaps the level of interrogation made him unhappy as it forced the bank to admit that they had done something wrong and that they would have to "put it right"....

cheers
Maccka


----------



## Frank Ainslie (1 December 2011)

*The Banks and Storm*

PJ-C Hearings 3rd September 2009 (Public record)

*CHAIRMAN*””Can I start by saying thank you very much for your submission. There are some extraordinary things in the submission and some things that are similar to what other investors experienced and outlined in their submissions. An interesting point that seems to come out, and you just mentioned it, is that you never got out of the system””you got in, but you never got out””and you reinvested all of your funds or earnings. Obviously it happened to you, but does that appear to be the case right across all Storm investors? In a general sense, did they all stay and reinvest? They never realized their gains?
*Ms King*””I cannot speak for other Storm investors, but I also got my family into it and some work colleagues, which I obviously totally regret now. For me it has always been about the long-term investment””long-term goals. Through history it has been shown that when the market falls it eventually recovers above where it fell from as long as you are prepared to wait it out. To me it was like a savings account you put away and forgot about.
*Senator MASON*”–Ms King, I am Senator Brett Mason, the deputy chair of the committee. I will ask you a couple of questions on matters that have been touched on by the chairman. 
When your relationship commenced with Storm Financial, you negotiated a relevant LVR. Is that right?
*Ms King*””My initial involvement was with Nancy Seymour. She was independent at Holland Park. I think when I initially went with her she was with MLC and then the name changed. She went to Ozdaq and hence Storm. My financial plan was with Nancy. She was an authorized representative of Ozdaq. That was negotiated at between 40 and 60 per cent. It was stated throughout my plan that it was manageable.
*Senator MASON*””That was at between 40 and 60 because that was the way you were managing your risk. Is that right?
*Ms King*””Yes.
*Senator MASON*””I understand.
*Ms King*””That is the way I thought my advisers were managing my risk. It was a ‘save, putaway, don’t think about it’ sort of portfolio for me.
*Senator MASON*””I understand. So every time your LVR was changed you were informed. Is that right?
*Ms King*””No.
*Senator MASON*””So you weren’t.
*Ms King*””On your statement it would have the LVR and that would change all the time. I just assumed that had something to do with a bank. It was still my personal one for me, which was 40 to 60 and not go above 60.
*Senator MASON*””So you did not sign anything or you did not agree to any change in your LVR outside the 40 to 60 per cent. Is that right?
*Ms King*””I did not.
*Senator MASON*””That is correct, isn’t it?
*Ms King*””Yes, that is correct. 
*Senator MASON*””You mentioned in your oral evidence before and also in your written submission that you never received a margin call and that your shares were redeemed without your permission. Is that correct?
*Ms King*””Yes.
*Ms King*””My last knowledge of my LVR was around 67 per cent, so when the market started to fall I knew that I would come close to or get a margin call. We were on the phone to our adviser from early October. I produced extra equity. I had my husband’s business to cover the margin. There were all these precautions in place to show that we could service that debt and not sell anything out, because I did not want to realise my losses. Then on 14 November I got a letter in the PO box, saying that around 450,000 of my shares were sold. Prior to that, whenever shares were sold a letter was presented to me that I had to sign for the redemption. I never got anything like that. I contacted Storm, and my adviser was dumbfounded. He said I was not margin called. I demanded to be put back in the market. The next thing I found out was when everything was sold out, which was by 22 December and was only because I was on holidays with my mother and she received a phone call from Macquarie in relation to her matter. I could not talk to Storm advisers then and everything was sold.
*Senator MASON*””Coming to the crux of it, on page 4 of your written submission, Ms King, down the bottom , in your second-last paragraph, you say:
_I sent a complaint to John Clothier, Head of investment lending, Colonial on 9th February 2009 outlining my concerns and querying the lack of any contact regarding my margin loans and the subsequent selling down of the security. I received a reply in which he states; “It was only December 2008, when CGI became aware that Storm had not been notifying its clients of the position of their margin loans accounts and there had been a prolonged period of inadequate responses to margin calls by Storm, that CGI took the extraordinary step of contacting borrowers directly” …_
That is a direct quote from Mr Clothier, is it?
*Ms King*””Yes, that is from the letter that he sent me.
*Senator MASON*””All the evidence we have heard is that the relationship is between the bank and the client””that is, between, say, CGI and you. So why is he talking about an ‘extraordinary step of contacting borrowers directly’?
*Ms King*””You are asking me what? I am a bit confused.
*Senator MASON*””The point is that many other banks lent margin loans to Storm clients and they contacted the clients directly. CGI did not until very””
*Ms King*””I went to 107 per cent and I still did not get contacted and they withdrew money out of my Macquarie account without my authorisation. So tell me how that works? They have not got active enduring power of attorney over my account.
*Senator MASON*””We do not know, Ms King.
*Senator WILLIAMS*””Just following on from Senator Mason’s point on your letter from Mr Clothier, you say on the front page of your submission:_Information in the financial plan and from Colonial original loan approval documents was that in the event of my portfolioreaching buffer and margin trigger points I would be contacted by the lender and given notice to correct the LVR. This is documented and available._
*Ms King*””In my financial plan it is documented the lender will also monitor your portfolio daily, the lender will require you to make a margin call and the lender will ask you to provide additional funds to restore at least the minimum equity position. I have the original document from Colonial for my loan. In the back it talks about how it will notify you. Obviously this will be up to a court of law, but it depends on how they define ‘you’. My advisers did not take the application out. It is in my name. They are not acting as an agent. It does not say _‘as an agent’_ in there. So my understanding is that I am their client and they are to advise me. That is what it is in my financial plan and the associated letter that came from Colonial at the time of taking the loan out.
*Senator McLUCAS*””and you have been hurt very badly, as have many others. Do you have any advice to our committee about what we should be recommending to government as to what would have assisted you in your relationship with your adviser or your relationship with the bank so that this event could have been prevented? Is there anything that we as a government can do to help ensure that this does not happen again?
*Ms King*””What you can do to ensure this does not happen again is to bring the principal offenders, the culprits to justice and put them in jail as a warning example to others. If those who created this are not brought to justice then history will just repeat itself.


----------



## Solly (1 December 2011)

Frank, the above is a very interesting transcript.
I wonder whatever happened to Mr Clothier ?
(Just some history from the archives.. http://www.investordaily.com.au/archive/7581.xml)


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## Frank Ainslie (2 December 2011)

*Should financial advisers have a fiduciary responsibility?*

Someone stated in an earlier posting, _“…we acted on the word of a salesman.”_ In fact, he is right in a way *BUT* we didn’t know that at the time. Therefore, we had no way of telling without the benefit of hindsight that he was not acting in our best interests. As in the case of Doctor Patel, we assumed that he would appreciate that he had a _“duty of care” _and would act accordingly.

Unlike the ‘Doctor Patel’ scenario, however, our financial adviser was fully qualified to give financial advice. He was therefore in a position through his experience in the industry to devise a financial strategy for us tailored around our financial circumstances and our future welfare. We now know that he did nothing of the kind but rather applied a financial philosophy that emanated from head office. In fact, he and his fellow financial advisers could do little else if they wanted to continue to work for Storm.

*Mr Jolyon FORSYTH*, who is the President of the Australian Investors Association, spoke before the 'Parliamentary Joint-Committee on Corporations and Financial Services' on 3rd September 2009. Here is some of what he had to say:

_“We appreciate the opportunity to speak before this inquiry on behalf of thousands of independent investors, many of whom are our members, and on behalf of investors who, although not members, have told us their tales of woe or we read their stories in the press. We have thought for years that the financial services industry has many disgraceful aspects. We regret that it took some multi-million-dollar losses of mum and dad investors for these disgraceful aspects to become obvious to everyone.

… We believe that the fundamental matter to be resolved is that advice must be objective, appropriate and free of conflict of interest. I think we are all well aware of the fact that if I were to go to a financial planner with, say, an inheritance of half a million dollars, the most likely advice I would get would be to put it into managed funds or possibly Australian shares, with little or any consideration being given as to whether a better use of the funds might be to pay off the mortgage, contribute to an industry super fund, pay off other debts, and so on. The advice I would receive would be to do something that led to a commission payment to the adviser””not all advisers but a huge percentage of them. The AIA sees such an industry as being about selling rather than advising. 

Our submission asks that you: (a) remove inherent conflicts of interest at present in the industry; (b) separate the sales and advice functions; (c) raise the low educational level that was required of advisers; (d) address the illusion of independence of advisory firms connected with banks and insurance companies; (e) provide simple investment risk signals for consumers; (f) require payment for services to be initiated by the client, not the investment product provider; (g) require clients to have more control over the investment advisory process; (h) promote investment education among consumers; and (i) provide for better regulation and enforcement within financial services.

I remind the committee of the case of the pensioner widow reported in the Australian on Monday morning who signed a blank margin loan application form that someone else filled in for a $208,000 additional loan. This was added to her existing $625,000 margin loan. The form stated that she earned $104,000 per month, even though she was in fact a pensioner. She now faces the loss of her home. So we present ourselves here today to reflect the point of view of investors, many of whom have lost confidence in the financial planning and advisory industry."_

His colleague, *Mr. Scott MCKENSIE* – (Vice President) also commented: 

_“We have had four or five years to try to get it right and that has not worked. I can tell you that the layers of fees that exist between the investor and the product manufacturer via the licensee are so many that, even if you disclosed them, all the client would be is shocked; he would not understand it. I am talking about shelf fees and all manner of fees that you would come across. I do not think disclosure is the answer. I think fiduciary responsibility is the answer."_

*MR. ROBERT* - _"We took advice in the MIS inquiry about providers of MIS who had done a nine-day course and were then qualified to provide advice into MIS. Do you believe that is too short?"_

*Mr McKenzie*””_"If the person who has done the nine-day course is just selling and explaining the features of one particular product, I have no problem. But, if they are dealing with somebody who walks in off the street and says, ‘I’ve got a quarter of a million dollars here and I don’t know what to do with it,’ that is obviously a problem. We are talking about the last 20 to 30 years of someone’s life. For that sort of money to go into the hands of someone who is flogging products is criminal. I know it really is hard, but this is such a serious matter that we should begin at the beginning and say, ‘Let’s set aside a class of people who, by virtue of education, experience, personal characteristics””"_

*Senator MASON*””_"And legal duty."_

*Mr McKenzie*””_"...and fiduciary responsibility hanging over them, are the people we are going to trust to give advice about how people use their money."_


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## Frank Ainslie (2 December 2011)

Solly said:


> Here's the audio and transcript of the interview with Peter Ryan on PM.
> 
> http://www.abc.net.au/pm/content/2011/s3380477.htm?




Hi Solly, 

Here's an extract from my book _“PLAUSIBLE DENIABILITY”_ which explains the concept!

_“'Plausible deniability' for those that are not familiar with this strategy is one where the upper rungs of management in an organisation pass the blame to those on the lower rungs, and the people on the lower rungs are often inaccessible (sacked in the case of the CBA). It, then becomes difficult to establish exactly who is to blame. 

It’s a ploy often used by those that gave the orders in the first place to distance themselves from any responsibility.  In the case that illegal or otherwise disreputable and unpopular activities become public, high-ranking executives will employ this ruse to deny any awareness of such acts by those below them in the chain of command.

*The former CEO, Mr. Ralph Norris, of the CBA seems to fit the bill perfectly. *

The term 'plausible deniability' can also apply to any act that leaves little or no evidence of wrongdoing or abuse. On this score, Storm Financial and the Banks involved fall down badly. There’s enough evidence lying around to condemn them all, if only we can get them into a court room. 

Unfortunately, parties such as the Parliamentary Joint-Committee and ASIC who have been investigating this matter seem at times to have trouble focussing on the body of evidence relating to the crimes of the Banks. One has to presume that Storm Financial is easier quarry to hunt down. 

'Plausible deniability' is also a legal concept by the way. It refers to lack of evidence (or so the Banks think) proving an allegation. Standards of proof vary in civil and criminal cases. In civil cases, the standard of proof is 'more likely so than not' whereas in a criminal matter, the standard is 'beyond a reasonable doubt'. 
If your opponent lacks incontrovertible proof (evidence) of their allegation, you can 'plausibly deny' the allegation even though it may be true. _

 Devious? ABSOLUTELY but anything goes in the case of Storm and the Banks because the stakes are so high! The CBA denies many of the alleged charges against it but it agreed to a resolution scheme early on. WHY? Because they are as guilty as hell and this was one way of covering up from an unsuspecting public many of their wrongdoings in relation to their Storm customers. 

Yet, ASIC is only charging this Bank with UMIS? Can you believe it! The CBA is the worst offender and they will walk away if UMIS isn't proven. Fortunately, Levitt Robinson are in our corner and will be taking the CBA to task. This is not the point though! ASIC should be the one pursuing those that have breached the Corporation Act' but in the case of the CBA, apparently there is a _"hands off" _edict. It makes you wonder sometimes who is actually in our corner?


----------



## Solly (2 December 2011)

Frank Ainslie said:


> Hi Solly,
> 
> Here's an extract from my book _“PLAUSIBLE DENIABILITY”_ which explains the concept!
> 
> ...



_

Hi Frank

I have always found using the Latin phrase "Mea Culpa" to describe their involvement rather interesting. It's been a while since I studied Latin but doesn't this phrase translate as "my fault" or "my mistake" ?

I'm rather impressed with the phrase "I was not happy at the level of interrogation of that". I'm currently working on a response document regarding a matter in my real world and I'm trying to use that phrase in response to an element of a proposal I am not in agreement with. 

I also see that Sir Ralph will have a few things to occupy him in retirement, I believe he will join the Origin Energy board as a non-executive director early next year. 

S_


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## Solly (2 December 2011)

Solly said:


> Storm founders' mansion goes 'cheap'
> 
> From: townsvillebulletin.com.au




Full article now available online @ http://www.townsvillebulletin.com.au/article/2011/12/01/287551_news.html

GG, 
Had that drink with Byrnsie yet?

S


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## Garpal Gumnut (2 December 2011)

Solly said:


> Full article now available online @ http://www.townsvillebulletin.com.au/article/2011/12/01/287551_news.html
> 
> GG,
> Had that drink with Byrnsie yet?
> ...




Apologies for not getting back. I caught up with Byrnsie in the Great Northern this week, and our low ball bid for Casa Cassimatis did not impress. 

In a way I am happy to let another punter take Manny's pile, as even a mob of half cut believers would find it difficult to clean the chandelier. I prefer my Waterford Glass on a bar rather than hung from a ceiling. 

Our chance to be in at the beginning of a new Edifice of the Lord, has gone, mate.

On a more worldly note, It never ceases to astound me that the proceeds of these sales of Cassimatis wealth do not go in to a fund to pay back the victims of this financial obscenity. Manny is so far ahead of the regulators, I reckon he can afford to drop $2m on the Melton Tce. pile.

He should really start a church.

gg


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## Harleyquin (2 December 2011)

Thanks Junior and Doobsy.  I was surprised when I went to another planner and they offered to give us a SOA first up so that we could decide as storm didn't do this.  Interesting what is supposed to happen and what actually happened are two different things when it came to storm.  The SOA Is a thorn in my side now that I know what should have happened.

Basically they read out the paperwork for the SOA and said 'just sign here as I have to show you this and if you could just sign and date it to show that you've seen it'.  Three months later when all the loans had been approved by the banks, we were given the SOA, told to go home and read it and sign every page, but no need to date every page.  Very interesting is probably an understatment.  I wonder how many other stormies had the same experience.

If the SOA aren't signed on every page, how can the bank doing the lending, take the SOA as being fully signed and understood by the client?

Seems its very easy for a financial planner, who isn't on the level, to give this 'booklet' out when it suits them rather than when they should give it to the client.  Had we known we were supposed to get one first up it would have been different.  There's no way of making sure that the SOA is done uniformly obviously.  

Another area that needs looking at, but I don't know how this can be monitored.  Maybe the Financial Planning people, have some ideas, or need to produce a basic 'kit' for all clients to fill out BEFORE seeking any form of financial advice, and a standardised, if possible, SOA filled out.  

I can see that this is were the 'research' comes in, two years plus ago when I started posting I and others were hauled over the coals for not doing our research.  I went away thinking 'that I should have done our research' as was suggested by other forum members.  I could see that 'doing one's research' would protect the future client.

However today I've changed my mind, the insistance on 'doing your own research' is also a copout from those in the financial industry who aren't doing their job properly.  Those of you who are doing your job properly obviously have the financial wellbeing of their clients as your main focus, which is commendable.

If this 'discussion' /'debate' /'argument' /'whatever you like to call it', achieves one thing and that is to nut out the major problems and problem planners who are contaminating the whole industry then it's worth it in my humble opinion.

See there's a lot of news, in the news over this past couple of days.   Did gg and co buy the mansion for their new 'church', or did he leave it for someone who appreciates the gaudiness?


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## Judd (3 December 2011)

Harleyquin said:


> ........If the SOA aren't signed on every page, how can the bank doing the lending, take the SOA as being fully signed and understood by the client?....




HQ, the SOA is between the client and the adviser.  A financial institution lending the funds has no interest in it - and before anyone starts saying they should, consider the Privacy Act implications plus the sheer volume of gumph passing back and forth and the additional cost [which would, in some form, be passed on to the client] of such a process.


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## DocK (3 December 2011)

Garpal Gumnut said:


> Apologies for not getting back. I caught up with Byrnsie in the Great Northern this week, and our low ball bid for Casa Cassimatis did not impress.
> 
> In a way I am happy to let another punter take Manny's pile, as even a mob of half cut believers would find it difficult to clean the chandelier. I prefer my Waterford Glass on a bar rather than hung from a ceiling.
> 
> ...




Hope the new owners hang an "under new ownership" sign on the front lawn - just in case some storm-battered locals forget and egg the place   On a serious note - I thought that storm had considerable business loans with the CBA and presumed that they'd have tied Manny & Jules up with directors' guarantees - it sure goes against the grain that their ex-clients are left struggling with left-over home loans, yet they get to pocket the proceeds themselves.  I guess I just assumed the CBA would have a mortgage over the place and apply the proceeds to whatever storm/Cassimatis still owe them.


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## Judd (3 December 2011)

DocK said:


> Hope the new owners hang an "under new ownership" sign on the front lawn - just in case some storm-battered locals forget and egg the place   On a serious note - I thought that storm had considerable business loans with the CBA and presumed that they'd have tied Manny & Jules up with directors' guarantees - it sure goes against the grain that their ex-clients are left struggling with left-over home loans, yet they get to pocket the proceeds themselves.  I guess I just assumed the CBA would have a mortgage over the place and apply the proceeds to whatever storm/Cassimatis still owe them.




DocK, I have been informed that it is amazing what one can do if there is a family trust involved.  Remember when EC had that $2m "dividend" shortly before the whole thing turned into a pile of mud?  I'll let you guess to what entity was on the name of the cheque.  You guessed correctly.


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## SJG1974 (3 December 2011)

Judd said:


> DocK, I have been informed that it is amazing what one can do if there is a family trust involved.  Remember when EC had that $2m "dividend" shortly before the whole thing turned into a pile of mud?  I'll let you guess to what entity was on the name of the cheque.  You guessed correctly.




I also understand they paid themselves $24m out of a FY2008 profit of $26m. I am sure that money is safely hidden away somewhere.


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## Garpal Gumnut (3 December 2011)

Solly said:


> Full article now available online @ http://www.townsvillebulletin.com.au/article/2011/12/01/287551_news.html
> 
> GG,
> Had that drink with Byrnsie yet?
> ...






Garpal Gumnut said:


> On a more worldly note, It never ceases to astound me that the proceeds of these sales of Cassimatis wealth do not go in to a fund to pay back the victims of this financial obscenity. Manny is so far ahead of the regulators, I reckon he can afford to drop $2m on the Melton Tce. pile.
> 
> He should really start a church.
> 
> gg






Harleyquin said:


> Thanks Junior and Doobsy.
> See there's a lot of news, in the news over this past couple of days.   Did gg and co buy the mansion for their new 'church', or did he leave it for someone who appreciates the gaudiness?






DocK said:


> Hope the new owners hang an "under new ownership" sign on the front lawn - just in case some storm-battered locals forget and egg the place   On a serious note - I thought that storm had considerable business loans with the CBA and presumed that they'd have tied Manny & Jules up with directors' guarantees - it sure goes against the grain that their ex-clients are left struggling with left-over home loans, yet they get to pocket the proceeds themselves.  I guess I just assumed the CBA would have a mortgage over the place and apply the proceeds to whatever storm/Cassimatis still owe them.






Judd said:


> DocK, I have been informed that it is amazing what one can do if there is a family trust involved.  Remember when EC had that $2m "dividend" shortly before the whole thing turned into a pile of mud?  I'll let you guess to what entity was on the name of the cheque.  You guessed correctly.





It would be interesting to know where the money from the sales of Manny Cassimatis house at Melton Tce., the pad in Brisbane, and the antiques and furniture went.

Quite possibly the banks have their hands on it, but Manny may have worked out a way of keeping it. 

Perhaps he may even start another financial advice company, once he has the irritation of all the court cases and investigations out of the way.

gg


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## Solly (4 December 2011)

> *"Regret in Storm swan song*
> 
> Cassimatis himself could never (and presumably still can't) see that Storm was at fault. His argument was that they just needed a little more time to stick it out and the bank screwed him (and everyone else).
> 
> Now three years on, his claim that he had lost everything and would undertake a sell-down of assets has come to fruition with his Townsville mansion finally sold."




Comment from Mitch Gaynor @ couriermail.com.au


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## Frank Ainslie (4 December 2011)

Solly said:


> Hi Frank
> 
> I have always found using the Latin phrase "Mea Culpa" to describe their involvement rather interesting. It's been a while since I studied Latin but doesn't this phrase translate as "my fault" or "my mistake" ?
> 
> ...




Hi Solly,

If, as a CEO, any area of your business is doing particularly well, you will try and establish 'WHY' because you may be able to apply the principles being used in that area to other less successful areas of your business. Conversely, if a branch is performing below the norm, you will endeavour to establish the ‘WHY’ as well because it may be either market forces at play or poor management. Either way, you need to know! This is basic management!

Therefore Ralph Norris, and David Liddy of the BOQ for that matter, are lying through their teeth when claiming that that ‘THEY DIDN’T KNOW’ what was going on where their Banks’ were concerned in their dealings with Storm. Apparently, lying before the PJ-C is no big deal for them and ‘Mea Culpa’ simply means for them personally, _“I’m sorry we were aught!”_


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## Garpal Gumnut (4 December 2011)

Solly said:


> Comment from Mitch Gaynor @ couriermail.com.au
> Cassimatis himself could never (and presumably still can't) see that Storm was at fault. His argument was that they just needed a little more time to stick it out and the bank screwed him (and everyone else).
> 
> Now three years on, his claim that he had lost everything and would undertake a sell-down of assets has come to fruition with his Townsville mansion finally sold."




Manny would be entitled to join in the class actions against the banks. Does anyone know if he or any entities associated with him, Storm or associated companies are involved in any of the legal actions pending against the banks.

If he is a victim, he should be compensated. Many Storm victims still believe in Manny, fewer than before but there are some out there.

gg


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## Solly (4 December 2011)

Garpal Gumnut said:


> Manny would be entitled to join in the class actions against the banks. Does anyone know if he or any entities associated with him, Storm or associated companies are involved in any of the legal actions pending against the banks.
> 
> If he is a victim, he should be compensated. Many Storm victims still believe in Manny, fewer than before but there are some out there.
> 
> gg




GG

I remember around Nov '09 it was reported that EC & JC were suing the CBA for $17 million, a claim for losses on their personal investment portfolio. I wonder how far this action has progressed.

S


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## Garpal Gumnut (4 December 2011)

Solly said:


> GG
> 
> I remember around Nov '09 it was reported that EC & JC were suing the CBA for $17 million, a claim for losses on their personal investment portfolio. I wonder how far this action has progressed.
> 
> S




With lost interest and investment opportunity, that would be about $20m.

Manny is no slouch, it will be interesting to see how the cases progress. It may be cheaper for EC and JC to work through the class process in train at present though, with the other victims of Storm, against the Banks.  

The GFC affected Manny and Julie as well, a point some forget.

I guess what MC is saying is that the Cassimatis family are victims too. They have lost their ability to land a helicopter in their backyard, their personal jet, their some would consider beautiful Mediterranean deco-red homes and the ability to spread financial advice and well-being amongst a willing populace. 

This is not to mention the intangible self esteem that flows from a job well done.

gg


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## bunyip (4 December 2011)

Solly said:


> bunyip
> 
> What's your opinion of the (double) leverage strategy that Storm was pushing ?
> Do you have a position on whether it is an acceptable method to use ?
> ...




Solly

I’ve been away for the last week – hence the delay in getting back to you.

Double gearing  – a risky strategy that’s very effective at multiplying profits in a bull market, and losses in a bear market.
Stocks go _‘up by the stairs and down by the elevator’_ – therefore double gearing multiplies losses much faster than it multiplies profits.


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## bunyip (4 December 2011)

Frank

This post is in response to Post 6013 on page 301.......for some reason the quote tags won’t work so I’m unable to quote that post.

The definition of ‘culprit’ is irrelevant to this debate.
And I’ve never suggested nor implied that you or your partner are culprits – I’ve simply said that you should take responsibility for your decisions and actions, as should everyone else who was involved in this debacle.

Nobody, culprit or otherwise, ‘took all your money’.
Your money disappeared due to a combination of decisions, events, and people, and also to a lack of decisions when decisive action was required.
It was your decision to invest heavily in the stock market. The market crash in 2008 caused you substantial losses – losses that were compounded by aggressive gearing, compounded by the failure of your lender and your adviser to deliver timely margin calls, compounded by your incompetent business manager sitting on his hands and doing nothing to help you, and compounded by the owner of the business (you) ‘taking your eye off the ball’ (to use your own words), and failing to step in and take control of your business by implementing defensive action to limit the damage.
Every one of these people should be accountable for their actions and also for their lack of action when decisive action was needed.

By all means go after the banks if you believe they did anything illegal – I’m not disagreeing with you on that point, I’d be doing the same in your situation. Go after Storm too – they were the primary architects of the whole dodgy scheme which included them extracting 145 grand of your hard earned money. You have little chance of ever getting any money out of them, but you’ve said that justice is your motivation, not money. So wouldn’t it be nice to know you helped put these unscrupulous people in jail for several years! 

I’m amused by your continued insistence that the Storm strategy wasn’t a greedy push for big money, that nowhere did Storms SOA mention anything about the strategy being risky or designed to greatly magnify profits.
So what??? What other objective would you think heavy borrowing had, other than to greatly magnify profits?
How could that not be risky, given that all these borrowings plus your personal wealth were to be sunk into the stock market? 
What Storm’s SOA said or didn't say does not in any way remove the fact that the strategy you chose to implement was aggressive and high risk, and it’s purpose was to magnify profits both for you, and for Storm via their outrageous upfront fee of 7%. You are clearly naÃ¯ve in the extreme if you didn’t see this and still cannot see it.
Consider a man on 100 grand a year who asks his boss to triple or quadruple his salary by jacking him up to 300 or 400 grand a year. I’m sure the boss would consider that was a greedy push for big money.
Well that’s what the Storm strategy did – invest in stock index funds to harness the power of a bull market, then multiply that power by a factor of three or four through the use of gearing and then double gearing on top of that.
It was a simple and effective strategy to greatly magnify returns from the market – it magnified profits while the market remained bullish, but it magnified losses when the market turned bearish. 

You need to settle down a bit Frank - you could stress yourself into an early grave if you continue your angry outbursts against people whose views don’t exactly agree with your own.


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## doobsy (5 December 2011)

Maybe a level of amusement is needed.

HQ and co who want to know about the FP process and why it failed. My opinion is that it didn't, it was bad advice but the process undertaken was pretty much as it should have been.

The amusement as promised. If you wanted to buy some shoes and that industry had to go through the same process as a FP.

Here you go:

COMPARISONS TO THE FINANCIAL ADVISING INDUSTRY AT ITS BEST

Every industry I know is being plagued by the growing burden of compliance.  The problem is it creates masses of paperwork for the good operators but at the same time is ignored by the shonks.  What follows is a tongue and cheek article that tries to show what would happen in the shoe business if it was regulated in the same way as the securities industry. It’s a classic.

Following the Financial Services Reform Bill, the Australian Shoe Industry Commission (ASIC) has also introduced new guidelines. 

 Putting Things In Perspective? Shoe Shop Compliance 

 "I'd like to buy a pair of black leather shoes, please?" 
 "Sir, if it were only that simple. Here's my card and here's your  Buyer's Guide." 

 What's this for? 
 It tells you that I can only talk to you about shoes and allied products  sold by this shop. I can't talk to you about shoes sold by any other  shoe shop, nor can I give any advice on, say, sausages, for example.

 Er? 
 Probably the best way to proceed is to show you where we fit into the  footwear industry. We buy in most of our products from the Far East at a  fairly modest price and sell them on to the public at a considerably  higher price; but of course, out of the mark-up we have to pay for  transportation,  import duties, rent and rates, display, staff, sales staff, cleaners and  administration, etc, and our shareholders have to be paid a dividend out  of the remaining profits. Not many people think about this when they buy  their shoes, but we think it's important. With this in mind, I'd like to ask  you a few questions to make sure you get the shoes, or even boots, which are  exactly right for you. It may be that when we have all the facts, I  recommend that you do not buy my footwear at all. May I proceed???

 What do you want to know? 

Well, how many arms and legs have you for a start? 

 What have arms got to do with shoes? 

 Well sir, if, for example, you only had one arm and I sold you a pair of  shoes with laces, that could be construed as bad advice by LAUSTRO.

 What is LAUSTRO? 
 The Laced and Unlaced Shoe Trade Regulatory Organisation. 
 What do they do? 
 Put the boot in. A friend of mine had to leave the industry.  What did he do wrong?  Sold a pair of carpet slippers. 


 What's wrong with that? 
 Turned out the guy didn't have carpet. So you see, I need to build a  full picture for you. For example, do you need shoes for business or  pleasure, or business and pleasure? How many shoes do you have already? How many  brogues, casuals, suedes, plimsoll's, slippers, sandals, Wellingtons,  etc?  How many suits ? what colour are they? Do you have athlete's foot? Can  you touch your toes? Any corns or bunions, or does your family have a  history of dropped arches? What kind of socks do you wear? How often do you cut  your toenails? How much do you earn and what is your overall clothes  budget? ?

 Well, thank you for that information. I'll give it some  serious thought and get back to you.





 Two weeks later


 Ah, good morning sir. I've given serious thought and what you need is a  pair of black leather shoes. 


 Isn't that what I asked for in the first place? 
 With respect sir, you have now had the benefit of my professional  advice, based on all the relevant facts as given, and you now know with some  certainty that what you need is a pair of black leather shoes. All the  guesswork's been taken out of it. Here's your Reasons Why letter. I  recommend that you buy these black leather shoes because they'll keep  your feet dry, match your suits, look smart and you can afford them.


 Well, I'm glad that's settled. 
 You want the shoes, then? 


 Yes, please. 
 Right, if you'd like to complete this application form, here's your  illustration, which I'd like you to sign. It shows a complete breakdown  of costs and profits and includes my commission. Your Product Particulars  describe in great detail how the shoes are made and the Key Features are  a summary of the product's particulars, highlighting the risk factors.

 Risk factors? 
 Yes. For example, if you live too long, the shoes may need repairing. On  the other hand, if you die before you've had your wear out of them, I'm  afraid there'll be no refund, even if they don't fit any other member of  the family.


 I see. 
 So, just to recap. You've got my card; your Buyer's Guide; Product  Particulars; Key Features; Illustration; Reasons Why letter. You will  get a letter from my Head Office telling you that I do, in fact, work for this  company and also a Cooling Off notice. You can return the shoes within  14 days and have a full refund if you don't like them for any reason. How  would you like to pay sir?

 Cash. 
 Ah, well, would you mind nipping home for a copy of the gas bill or  something to prove your identity, as you are not known to me. One last  thing sir. Do any of your friends require shoes?


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## Frank Ainslie (5 December 2011)

To Doobsy (and others involved in the financial advisory sector)

*Confidence restorer!*

_“HQ and co who want to know about the FP process and why it failed. My opinion is that it didn't, it was bad advice but the process undertaken was pretty much as it should have been.”_

I’m not sure I agree with you on this. Certainly, the advice was bad but the process was not as it should have been. If “bad advice” was the only issue the Banks would not find themselves in the dock as well. 

Be that as it may, the Storm collapse and the many other financial crises that have occurred in the past have emanated in part from financial advisers that do the wrong things by their clients, not just in terms of “bad advice” but rather criminal wrongdoings for which, many investors that suffered as a consequence have little recourse. People are being inundated by media stories of financial advisers that shaft their clients and they start to worry that the same could happen to them if they employ a financial adviser. This eroding of trust must be worrying for those in the financial advisory sector because it will, if it hasn't already, impact on their livelyhood.

How does one restore that confidence? I believe that this can only be done by introducing safeguards that will provide investors with the degree of protection that will restore their faith in the processes and encourage them to fully place their trust once again in financial advisers.

Okay! New regulations have been introduced but do they go far enough and may be a burden rather than a help? Some have been introduced in part by people outside the financial advisory industry that may not be fully aware of the ramifications on the financial industry at large. Government bodies for instance. I found in my time in management that many radical systems would be suggested (mostly software) that were not in step with the needs of those involved in my industry (international logistics) because no one bothered to ask the people at the coalface who would be responsible for operating them. Computer geeks are notorious in this regard!

I have mentioned professional indemnity insurance in the past for a reason. *Investors cannot be insured against market losses because this is impractical.* However, they should be able to take out a cover against wrongdoing by their financial advisers that impact on their investments. I believe the Government had a window of opportunity to give certainty to investors by providing a comprehensive professional indemnity insurance cover that is mandatory for all investors and financial advisers. So far, it has failed to do this in its new regulations.

How would this work? 

Here’s part of what I said on this subject to ASIC:

_“It should be incumbent on all credit licensees to take out a professional indemnity insurance cover for an adequate sum of money (sliding scale depending on the value of the individuals' investment assets) that contains a deeming clause extendable (for claim purposes) for a year beyond the expiration of the policy. The Storm fiasco should have taught your organization and this Government that nothing less is workable. This professional indemnity insurance cover should be mandatory! 

If it costs a little more so what! It's better than it costing investors everything later on! Investors would rather pay a little more now and have some form of security instead of being left out on a limb as they clearly have been!

*For that matter the Government itself might consider offering a special form of insurance of its own to investors, effectively by-passing the insurance industry altogether. It would be: (1) a revenue earner, (2) it would restore confidence in the market place, and (3) it would ensure that the likes of another Storm Financial episode would be minimised.”*_

To my mind, introducing such an insurance cover, particularly if it is Government controlled,would give future investors the confidence they need to use financial advisers with a degree of certainty. Any claims could be fast-tracked and the onus would be on the Government to get its act together and ensure that compliance was being carried out. 

Having said this, I am not at the coalface. Indeed, I am not even in the mine so I am commenting merely as an outsider. However, it does seem to me that such a move would be a confidence restorer for the industry at a time when it badly needs one.

Your views on this will be of interest.


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## doobsy (5 December 2011)

Frank

Again I say that the process worked. To give good advice you need to get to know the clients situation, their needs, their objectives, their timeframe, their risk tolerance.

If the adviser then ignores all that then the process isn't broken, the adviser is.

I still think that from what I saw Storm were probably even more thorough than the norm in their fact finding. I see this as their way to ensure they 'maximised' each client for their own means rather than any love of the process.

I laugh every time someone brings up process with financial planners. Why not anytime we look to have a transaction over $1,000. Why shouldn't Harvey Norman go through a financial fact find to see if the client can really afford the $10,000 of electrical equipment they are about to purchase. Why shouldn't doctors be bound by a "client best interest" clause when recommending a prescription. Surely if they were we would all be sent to get the generic brand rather than the name brand that costs 50% more and provides all sorts of undisclosed kickbacks to doctors and pharmacy operators.

How about schools? Do teachers sign off stating they will act in the best interests of each student? I would say that education is one of the few things that ranks ahead of finance in terms of long term damage or loss of opportunity.

Frank, when you owned the shopping centre. Should every shopper have been provided with a breakdown of the item purchased? What went to the shop, what was actually kept after costs? Should they have had to disclose their markups on the product? Should they have had to disclose if the supplier had promised them a freebie if they sold a certain amount that quarter? 

I think we are the only industry that is even close to transparant. How about asking the banks to disclose the "before return" fees taken on a savings account. 

Frank, who judges all of the things you outline. Just because something loses money doesn't mean the advice was bad and there was wrongdoing. ASIC have been shown to be inept even where we can all see open and shut cases that are current.

I understand we play with people's money and that is a sensative area. I just feel that in alot of ways more compliance won't fix things. What will fix things is an ability to clearly differentiate between salesman and advisers. No different to tax agents and accountants. There is a massive difference in the quality of the experience and therefore the advice.

Would that have stopped storm? No, but maybe the industry needs to keep setting the bar higher (already happening) to call yourself a financial adviser.

Independent audit by industry experts? That works for me. Quality long term well respected advisers paid by ASIC to review plans (blind, no names) of other firms. They report back to ASIC if they see any flags. That way it is not a pencil pusher ticking boxes, it is someone who gives advice on a daily basis looking over a plan.

Nothing would have stopped Storm, why, because you change the rules and EC just works out a new way to get around them. You put in place the insurance and you increase the cost for everyone in Australia using a planner to save the 3000 people who picked the wrong planner. Harsh but realistic.


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## doobsy (5 December 2011)

Actually, I was thinking with my nice guy hat on, not my businessman hat.

Bring in the insurance but allow each client the chance to take it up or not.

I might as well sell it and make some money on the transaction.

HA!


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## SJG1974 (5 December 2011)

doobsy said:


> Frank
> 
> Again I say that the process worked. To give good advice you need to get to know the clients situation, their needs, their objectives, their timeframe, their risk tolerance.
> 
> ...




And the client should be able to judge for themselves after all of that whether the risks they take are worth the potential rewards (or pitfalls).  I mean this isn't like a Madoff ponzi scheme or a dodgy investment that has gone under.  This wasn't some black hole.  This was a simple strategy that was easy to follow but which was BLOODY RISKY.

8 out of 10 who visited Storm walked away.  I wonder why?

I mean if people don't understand that borrowing against their house and then gearing up again via a margin loan into shares isn't highly risky, then all of the rules and regulations in the world won't protect them.  Even after all thats happend, some people still can't see it was risky!  Difficult to protect people from themselves.

I have said it before and I will say it until I am blue in the face, the clients made the decision to follow the advice.  Manny didn't make it for them.  Either did Stuart Drummond or any other adviser.  If the client didn't understand the advice or the risks involved, then it was their responsibility to ensure they did.  How much responsibility do people want to pass onto others? 

I continue to find it amazing that people will shop around when they are looking to buy a $1,000 tv to ensure this large sum of money isn't wasted.  And yet people will hand over their life savings to an adviser, believe every word he says (even when he says that double gearing isn't risky), and not even do a simple check to ensure they are investing wisely!


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## Judd (5 December 2011)

SJG1974 said:


> ....
> I continue to find it amazing that people will shop around when they are looking to buy a $1,000 tv to ensure this large sum of money isn't wasted.  And yet people will hand over their life savings to an adviser, believe every word he says (even when he says that double gearing isn't risky), and not even do a simple check to ensure they are investing wisely!




Possibly because they can actually see, feel and look at the tv but with finance?  A tad nebulous and uncertain so more reliant on someone who actually "knows" about such stuff.  While both the salesperson in the store and the financial adviser are actually selling something is a matter which probably goes over their heads. 

That and the fact a salesperson in a store isn't required to have formal qualifications, and so can be ignored as someone just trying to flog a product to get a commission.  Whereas a financial planner?  Whew, that's something different.

And I am not trying to denigrate FPs, just trying to put myself in the place of the punter.

Sadly, there are rogues in every industry - law, medicine, finance and even in families where members have been ripped off by one of their own.  Where money or assets are involved you are going to either encounter it or read about it.


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## bunyip (5 December 2011)

SJG1974 said:


> I continue to find it amazing that people will shop around when they are looking to buy a $1,000 tv to ensure this large sum of money isn't wasted.  And yet people will hand over their life savings to an adviser, believe every word he says (even when he says that double gearing isn't risky), and not even do a simple check to ensure they are investing wisely!





Same here – I too am amazed at the casual and trusting attitudes that some people adopt when dealing in high finance, whereas their attitudes are entirely different to matters of lesser financial importance.
Equally amazing is their belief that membership of a reputable organisation like the FPA is some sort of automatic guarantee that every person in that organisation will behave with the highest ethics and the utmost integrity.

Life gives us so many examples of disreputable people belonging to reputable organisations.
For example......
* car salesmen belonging to the Motor Traders Association of Queensland or some other reputable motoring organisation
* real estate salesmen belonging to the Real Estate Institute of Queensland or some other reputable real estate organisation

The ethical people in the real estate and motor industries are probably in the majority, yet all of us know of the propensity of some people in those industries to be less than honest. It’s absurd to expect that the situation would be any different in the financial services industry.
People selling a product are salesmen/women, regardless of what qualifications they hold or what organisations they belong to. It’s unrealistic and naÃ¯ve to assume that every single salesman is honest.


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## bunyip (5 December 2011)

Frank Ainslie said:


> There was no reason at the time to doubt that Storm could deliver on its promises despite the _‘Holy Trinity’_ pontificating otherwise.




With all due respect, Frank.......If you'd looked into the Storm strategy thoroughly instead of trusting them implicitly and believing everything they said,  you would have found a number of reasons to doubt that Storm could deliver on its promises.
Every single one of these reasons has been outlined to you on this forum over the last several weeks.

80% of those who approached Storm walked away after reviewing the strategy - clearly _they_ found some pretty solid reasons to doubt that Storm could deliver on its promises.


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## Frank Ainslie (6 December 2011)

Doobsy

_“Frank, when you owned the shopping center should every shopper have been provided with a breakdown of the item purchased? What went to the shop, what was actually kept after costs? Should they have had to disclose their markups on the product? Should they have had to disclose if the supplier had promised them a freebie if they sold a certain amount that quarter?”_

Your using a shop sale to illustrate your point is, I feel, a poor example because the circumstances are somewhat different. The “shoes” story was not applicable either although it was somewhat amusing. If financial advisers want to stick by the maxim, _“Let the buyer beware” _as you seem to be advocating in your postings then perhaps financial advisers should be inserting a clause on any written advice they give, _“This advice could be toxic”_ much as one does when selling cigarettes or other products that could be harmful (in financial parlance) to one’s financial well-being)? Why? Because only when a purchaser has been warned, can he or she rightfully ASSUME THE RISK that the product might be either defective or unsuitable to his or her needs. That’s Law by the way!

Such warnings when shown on packages are not designed to shield sellers who engage in fraud or bad faith dealing by making false or misleading representations about the quality or condition of a particular product. They are there to inform the buyers that they have accepted the risks that have been outlined at face value.

*The modern trend in laws protecting consumers has put the onus back on the seller. *Although the buyer is still required to make a reasonable inspection of goods upon purchase, increased responsibilities have been placed upon the seller, and the doctrine of _caveat venditor_ "let the seller beware") has become more prevalent. Generally, there is a legal presumption that a seller makes certain warranties unless the buyer and the seller agree otherwise. One such warranty is the implied warranty of merchantability. To be _"merchantable"_, the goods must reasonably conform to an ordinary buyer's expectations.

A seller who is in the business of regularly selling a particular type of goods or services for that matter has still greater responsibilities in dealing with an average customer. *A person receiving financial advice for instance is justified in his or her reliance on the expertise of that adviser.*

If both the buyer and the seller were negotiating from equal bargaining positions, the doctrine of _“caveat emptor”_ would apply. I put it to you that financial advisers and their clients are not negotiating from equal bargaining positions and your examples are therefore spurious. Financial advice should be about _“full disclosure”_ rather than _“let the investor beware”_. If the advice financial advisers hand out is not honest and aboveboard, then they are not fit to be financial advisers, pure and simple!

_“I think we are the only industry that is even close to transparent.” _

After everything that has been written these last three years about Storm and the Banks and the financial advisory sector in general, your claim of transparency is at odds with the facts. For example:

Mr. Scott MCKENSIE – (Vice President of the Australian Investors Association) stated before the PJ-C in 2009: 

*“We have had four or five years to try to get it right and that has not worked. I can tell you that the layers of fees that exist between the investor and the product manufacturer via the licensee are so many that, even if you disclosed them, all the client would be is shocked; he would not understand it. I am talking about shelf fees and all manner of fees that you would come across. I do not think disclosure is the answer. I think fiduciary responsibility is the answer."*

This doesn’t sound like transparency to me? 

_“ASIC have been shown to be inept even where we can all see open and shut cases that are current.”_

No question in my mind that ASIC is a paper tiger. That’s why the financial advisory sector is a mess and so many investors have been shafted. Let’s hope the new regulations brings this sector back in line and people that wish to invest can get a fair go at long last. 

_“I understand we play with people's money and that is a sensitive area. I just feel that in a lot of ways more compliance won't fix things.”_

No, I agree!  More compliance is not the answer, but rather effective compliance backed up by regular monitoring, which should identify some of the malefactors.  Industry standards and systems of behaviour reinforced by statutory regulations designed to make financial advisers tow the line are a must. _“Regulations are for the guidance of wise men and the obedience of knaves!”_ You must have checks and balances in place or miscreants will continue to take advantage of loose systems. The financial sector has been too loose for far too long, and it needs to be tightened up. The number of lawsuits against financial advisers in the last few years is testament to this.

_“Independent audit by industry experts? That works for me. Quality long term well-respected advisers paid by ASIC to review plans (blind, no names) of other firms. They report back to ASIC if they see any flags. That way it is not a pencil pusher ticking boxes, it is someone who gives advice on a daily basis looking over a plan.”_

We agree on this too! I have done some work for Government and I can therefore appreciate that industry trained people rather than government automatons are best suited to carry out this work. I also believe that a standard SOA including those aspects that need to be included by all financial advisers should be mandatory. Naturally, the plan itself can differ, but the fundamental principles of sound financial management should be included in order to protect the investor.

_“Nothing would have stopped Storm, why, because you change the rules and EC just works out a new way to get around them.”_

This suggests that a _“Storm”_ was inevitable and unstoppable. The air of resignation in your tone is somewhat apparent! _“We couldn’t do anything because Cassimatis would always find a way of beating the system!”_ What kind of message does that send out? Not a hopeful one I’m afraid.

To stop any abuse happening within any organization or industry for that matter, you need to look at what is taking place, and then put systems (regulations) in place to fix the “loopholes”. The ‘*YOU’* being the people that work within your industry and Government. If you want conformity and discipline in your industry you need to be doing something constructive now to fix the problems rather than complain about the fact that it is all becoming far too hard as some of your postings suggest. After all, you brought these new regulations down on your own heads by not getting it right in the first place! And please, don’t tell me now that all is well with the financial advisory sector. There are thousands of hardship stories out there that tell us differently.

_“You put in place the insurance and you increase the cost for everyone in Australia using a planner to save the 3000 people who picked the wrong planner. Harsh but realistic.”_

Does _“harsh but realistic”_ apply to the 3000 people that picked the wrong planner by using Storm and those that follow who may do the same thing. By writing _“…to save the 3000 people who picked the wrong planner”_ you make it sound like the financial advisory business is being run like a lottery. _“Sorry chaps! Your number didn’t come up today! Please pass ‘GO’ and go straight to the workhouse.”_ Mind you, 3000 of us would concur with you that finding a decent financial planner is akin to a lottery so I must say on reflection, I agree with you once again.  

As for _“increasing the cost for everyone in Australia using a planner”_ if they took out an insurance cover, is this really a problem? Don’t you think that if people are prepared to engage a financial adviser and pay that person fees, they will also be prepared to pay a little extra for an insurance cover to indemnify them against loss if their financial adviser does the wrong thing? We are talking 3000 Storm victims today but what about tomorrow? Can you or anyone else guarantee that another Storm won’t happen all over again? Of course you can’t! From the attitudes expressed by some on this forum, I would say it’s an absolute certainty.

Financial advisers can _‘huff and puff’_ all they want, but unless they themselves can up with some answers to reassure would-be investors, they will find it hard going forward to engender investor confidence in an industry that has been rife with shysters.  It’s of no importance to the 3000 of us (incidentally I think Storm had some 12,500 investors on its books but we won’t quibble) because we won’t be investing again anyway, but I would have thought that you and others would have had it high on your priorities to get it right. Judging from the remarks by you and others on this forum, you still seem to be blaming the Storm investors rather than the industry. Unless you can change this line of thinking, you don’t have a hope in Hell of getting it right.

It seems to me, and I am echoing HQ again here, that people within the financial sector would have been quite happy to leave everything in place and ignore the Storm’s of this world, treating the victims of such as collateral damage that could not be avoided. Fortunately, those in high places have seen the light even if those in the industry can’t! Bleating will get you nowhere because it’s happening ayway and the 3000 of us say, “Not before blxxdy time!” To leave the financial sector as it was would be to invite further ‘Storms’ on those that decide to place their trust in what has now been proven to be a flawed industry.


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## DocK (6 December 2011)

OMG!  I find myself nodding and agreeing with a good deal of what Frank has just posted 

For myself, I'd like to see the entire industry move to a "fee for service" basis, and get rid of the commission system entirely.  Same for real estate actually.  It has always seemed unfair to me that if investor A has 20K and investor B has 500K, and they wind up with basically the same plan and investments, that investor B ends up paying so much more if both cop the same yearly management fee when in reality the amount of work done on each plan wouldn't differ by much.  Same with selling properties - there may be more advertising etc on the more upmarket properties, but not enough to warrant the difference in commission most times.  I'd love to see a move to a negotiated fee for the service to be offered.  IMO it would lead to a much more honest industry as it would remove a lot of the impetus for directing funds to the products that pay a higher commission, or the continual ramping up that storm carried out, and would see planners paid for the service they provide, rather than the product, much the same as accountants.  If my tax work takes 10 hours that's what I pay for - not the amount of the refund obtained, or a % of my turnover for the year.  You get the point....  To me it denotes the difference between a salesman and a professional.  Many years ago I worked for a little while for an insurance salesman, and I was gobsmacked by the trail commission he continued to earn on policies written years before, although he hadn't spoken to the client for years and had no intention of doing so as they were "tapped out".  Seems dishonest to me to earn income year after year for a one-off service.  Charging a fee for the time spent doing a review of the plan and investments, at mutually agreed upon intervals, seems much fairer imo - much like the mid-year tax planning you pay your accountant for.


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## doobsy (6 December 2011)

Frank

I will answer the lengthy post mainly because I still think you are misleading the forum in a way. I will explain as we go. I will probably also have to do this in a couple of parts.

Why are the circumstances different in the shop example? All through our daily lives we purchase products (in FP the product is advice – pls remember that). Yet in very few industries are their rules that require a breakdown and disclosure of who is getting paid and how they are getting paid. I would like to see any other industry sit back and accept the government telling them how they can charge for their services or at what level is considered acceptable. Would you have accepted the Govt sticking their nose in telling you what level of rent is to be charged on your shopping centre? – or do you feel that free market means that rents will find a level that tenants are willing to pay by comparing to other centres. I worked in retail for many years and know the kind of kickbacks bigger players get from the likes of Coke, Cadbury etc, I can only assume it is the same in clothing. Where is the disclosure that the $70 nike shorts I buy costs the retailer $15 since he bought up extra when the distributor was trying to run the stock out and after costs of running the store he is making bucketloads of money on each transaction.

We already have a stupid amount of disclosures about markets and returns. I know having seen Storm plans they were all there. We sell advice. We don’t control markets or returns. Should the Storm advice had massive flashing red lights on top saying “danger – very high risk”? Absolutely. Since no one else was running this strategy and no one else wiped out their clients I think it can be seen that the bulk of advisers don’t and didn’t consider that strategy low risk.

No advice can be ironclad when markets are involved at any level. I can go and purchase advice from an accountant or a solicitor should I want to buy a business and they can look at the numbers, previous years figures, debt needed to buy it, long term historical interest rates, etc etc and give me advice. Does that guarantee the business will make money? Should they not have “This advice could be toxic” on the front?

RE the warranty paragraph. Again I come back to advice. We sell advice. You were sold bad advice. I don’t know how you get a warranty for bad advice. I have seen shocking advice provided by professionals. Accountants recommending SMSF for clients that don’t understand them and don’t have adequate super balances, business structures that don’t protect the clients and their families, bad estate advice from solicitors, horrible advice from Centrelink professionals. Again I ask why not blanket everyone?

You use the term “full disclosure” , I don’t get what you mean. Do you mean storm should have told you that they looked into the crystal ball saw markets were going to fall and still went ahead with the advice? Markets and economics in general are almost impossible to predict. We say that recently with the treasury (who have the best data available) getting it wrong enough to create a $20 billion hole in the budget estimates in under 12 months. You want a laugh, google market forecasts for any year and see how many “experts” get anywhere near it.

I will split into a new one to save those who don’t care.


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## SJG1974 (6 December 2011)

DocK said:


> OMG!  I find myself nodding and agreeing with a good deal of what Frank has just posted
> 
> For myself, I'd like to see the entire industry move to a "fee for service" basis, and get rid of the commission system entirely.  Same for real estate actually.  It has always seemed unfair to me that if investor A has 20K and investor B has 500K, and they wind up with basically the same plan and investments, that investor B ends up paying so much more if both cop the same yearly management fee when in reality the amount of work done on each plan wouldn't differ by much.  Same with selling properties - there may be more advertising etc on the more upmarket properties, but not enough to warrant the difference in commission most times.  I'd love to see a move to a negotiated fee for the service to be offered.  IMO it would lead to a much more honest industry as it would remove a lot of the impetus for directing funds to the products that pay a higher commission, or the continual ramping up that storm carried out, and would see planners paid for the service they provide, rather than the product, much the same as accountants.  If my tax work takes 10 hours that's what I pay for - not the amount of the refund obtained, or a % of my turnover for the year.  You get the point....  To me it denotes the difference between a salesman and a professional.  Many years ago I worked for a little while for an insurance salesman, and I was gobsmacked by the trail commission he continued to earn on policies written years before, although he hadn't spoken to the client for years and had no intention of doing so as they were "tapped out".  Seems dishonest to me to earn income year after year for a one-off service.  Charging a fee for the time spent doing a review of the plan and investments, at mutually agreed upon intervals, seems much fairer imo - much like the mid-year tax planning you pay your accountant for.




DocK I think you will find that the industry is moving this way towards fee for service.  There are also moves afoot to have clients sign off on their yearly fees so they can see what they are paying.

The issue of commissions has more been with those inactive clients of an adviser.  Say someone who saw an adviser 5 years ago with $100,000 and the adviser put that money into a managed fund.  While the client may never see the adviser again, the adviser still picks up his %% trail commission for doing SFA. I know they are trying to eliminate this.

I reckon firms who have based their business on commissions will find the going very tough over the next few years.  Commissions already have a bad name out there, and it won't be getting any better.  I wouldn't want to be a planner relying on commissions for my supper.

However, I don't think this was an issue for Storm and its clients per se.  The clients knew that their 7% up front equated to so many dollars and they signed off on that.  They were aware they were paying astronomical fees, but for whatever reason they felt it was value for money.


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## doobsy (6 December 2011)

The disclosure requirements on our industry are better than any other industry. Please provide a single example of where the seller discloses what he is getting paid, how it is getting paid, the costs of the underlying recommended product etc etc.

All the layers are there so that everyone can make some money – no argument there. Lets look at a car salesman – sells the car – gets paid his wage and probably a commission on the car, maybe a higher commission depending on the sales for the month. Car dealer takes their slice. Government takes their bit. Importer takes their bit and then manufacturer gets the cost of the car + their markup

Unless you watch a farmer pull a vegetable out of the ground in front of you then sell it directly to you, there are layers upon layers of fees in everything we buy. We disclose how much we are getting paid – WHAT MORE DO YOU WANT? You are not dealing with the layers above so who cares what sort of deal they have negotiated?

If I buy a TV from Harvey Norman I deal with whichever store I walk into. If I can negotiate a better deal, the store misses out on the extra profit, maybe the salesman doesn’t make as much commission on that sale. I don’t deal with the franchisee which is Harvey Norman. I don’t care what deal he did with Sony in China and how much he is making on the TV before he sells it to the individual store.

Onto the SOA – there is a standard SOA structure. Again, mine is about 30-40 pages and you can find the advice and fees in the first 15 pages. Storm’s were filled with crap and BS cashflows and projections that looked impressive but really just meant it was hard to track anything. They sold this as extra compliance. I saw it as confusing. You want to go ASIC on anything when they audited Storm pre crisis – go them on the fact they push for “clear and concise” advice. Storm’s SOAs were nothing like that.

I don’t see fixing the problems as too hard. I see governments fiddling with things that aren’t broken and making it worse for consumers. Oh and look through the new regs and apart from no commissions on borrowings and better regs around margin lending, nothing in there would have made any difference to a single storm investor.

As others have mentioned, getting good advice is a bit of a lottery. That isn’t just financial advice. That is ALL advice. Don’t make me provide examples of medical, accounting, business, advertising, etc etc. Work it out.

If you can get an insurer to provide the insurance cover I am all for it. As I see it my clients don’t need it.

“Rife with shysters”?? HAHAHAHA. One firm, what about 50 advisers in an entire industry. I think you find that most other examples of clients losing money is not FP, it is people that bypass us and go direct. On the numbers, we all know that only 3000 had been “Stormified” the rest are probably happily still sitting in their MLC super funds. I don’t blame investors but I certainly don’t think those who have done nothing wrong need to feel some sort of blame because we as an industry didn’t stop it. We tried. This point seems to be missed over and over again. WE TRIED. ASIC was contacted numerous times.

I will finish saying that nothing in the proposed changes will affect anything I do in business and will not change or improve my clients lot in life. It will add extra BS I need to go through and possibly lead to clients missing out on advice. Do you know how I expect my business to continue to grow? By continuing to do the right thing and knowing that it will lead to more business. Good service, good advice no matter what markets do will lead to more business. Those who don’t provide it, great, those clients will end up coming to me.


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## DocK (6 December 2011)

SJG1974 said:


> DocK I think you will find that the industry is moving this way towards fee for service.  There are also moves afoot to have clients sign off on their yearly fees so they can see what they are paying.




Signing off on yearly fees is one thing, knowing how much your investment return has been affected by other hidden commissions and kick-backs is quite another.  Still, it's a damn good step in the right direction.



> The issue of commissions has more been with those inactive clients of an adviser.  Say someone who saw an adviser 5 years ago with $100,000 and the adviser put that money into a managed fund.  While the client may never see the adviser again, the adviser still picks up his %% trail commission for doing SFA. I know they are trying to eliminate this.
> 
> I reckon firms who have based their business on commissions will find the going very tough over the next few years.  Commissions already have a bad name out there, and it won't be getting any better.  I wouldn't want to be a planner relying on commissions for my supper.




Yes, this is an example of what I feel is simply dishonest and unethical, if not actually illegal.  It has long been the accepted way in the FP and insurance industry - and is likely the reason for a lot of people taking control of their own investments and investing directly to avoid the ongoing "management" fee, paid, as you say, for sfa.



> However, I don't think this was an issue for Storm and its clients per se.  The clients knew that their 7% up front equated to so many dollars and they signed off on that.  They were aware they were paying astronomical fees, but for whatever reason they felt it was value for money.




I didn't say this was an issue for the storm clients - we mostly knew that the 7% upfront was instead of the usual annual management fees and it would have wound up in my favour over the long term - however the long term was not realised and it wound up being very expensive in hindsight.  A lot of people on this thread love to go on about the astronomical fees, but perhaps don't realise that the ongoing annual fees were very much less than the usual managed funds sold by most FP's.   My comments were about the FP industry in general, and the direction in which I would like to see it move, and could equally apply to the insurance and real estate industries.


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## SJG1974 (6 December 2011)

doobsy said:


> RE the warranty paragraph. Again I come back to advice. We sell advice. You were sold bad advice. I don’t know how you get a warranty for bad advice. I have seen shocking advice provided by professionals. Accountants recommending SMSF for clients that don’t understand them and don’t have adequate super balances, business structures that don’t protect the clients and their families, bad estate advice from solicitors, horrible advice from Centrelink professionals. Again I ask why not blanket everyone?




Doobsy,

I appreciate your work on here.  It is good to have some perspective from someone in the industry particularly considering so many are prepared to **** can the whole industry due to one rogue outfit.

I would be interested in your take on this from an FP perspective....  

From what I can gather, from the time clients signed with Storm to the time margin calls weren't made in late 2008, the main thing that Storm could be accused of is providing inappropriate advice to clients. 

I would think that proving advice is inappropriate would be very difficult.  Storm can say that clients sat through seminar after seminar, they had a huge SoA presented to them and had clients sign every page to indicate they understood what was being recommended, and the clients signed the forms to borrow, reborrow and invest in the index funds.  The strategy was presented to the clients, and the clients accepted it and went ahead with it.

Now common sense screams out that the advice was inappropriate- the majority of Storm prospects knew this and walked away.  But then again many clients threw common sense out the window when they saw the potential results this strategy could provide and therefore downplayed the risks they were taking.

Common sense suggests that a retiree with in excess of $1m in financial assets doesn't need to double gear into the share market to generate his desired $45,000 per annum income. But does that make the advice inappropariate?  

If the clients want to do it, then does it become appropriate for them?

It strikes me that proving this would be very difficult, and therefore, it will be almost impossible to have rules and regulations in place that can protect people from this in the future?

Cheers


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## doobsy (6 December 2011)

Dock and SG

Yes there is a push for fee for service but it is difficult.

Ongoing commissions for inactive clients is a rip off and should be stopped. No argument.

How we charge an ongoing active client should be up to us. We are different to accountants because we are not "transactional" advice most times. We provide ongoing advice on a daily, weekly, monthly situation. Unless we time each instance we think about a client we can't charge that way. 

Example - markets fall in a heap, logically you want our adviser to be thinking about you - new monies to take advantage of low markets, a rebalance to ensure adequate cash, a centrelink update since investment values are down. Do we invoice? What each month? each quarter?

What about the client accumulating super that I am giving advice on? All external cashflow is going into their mortgage as it should be. How do I charge? They don't want another cost to come out of their cashflow.

It also leads to people not calling. They don't call to update us because they think that will cost them money. In reality it may cost them more by not updating us. We want clients to call.

Lawyers and Accountants provide singular transactional advice and charge on an hourly basis. BUT even accountants who have HNW more complicated clients who they need to be high touch with will set an annual retainer rather than an hourly system.


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## doobsy (6 December 2011)

SJG1974 said:


> Doobsy,
> 
> I appreciate your work on here.  It is good to have some perspective from someone in the industry particularly considering so many are prepared to **** can the whole industry due to one rogue outfit.
> 
> ...




Proving it will come back to "know you client" needs, objectives, risk tolerance etc.

What storm did and will fall back on is they "ongoing education" or 6mth indoctrination process so that by the end clients were signing off that post "education" their needs and objectives were different to reflect their new understanding and that their risk tolerance had changed because they now understood all about markets.

Don't know how most will go. Some will be easy. Older retirees should be easy.


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## DocK (6 December 2011)

doobsy said:


> Dock and SG
> 
> Yes there is a push for fee for service but it is difficult.
> 
> ...




OK, you raise some valid points re the fluid nature of the service you provide.  I'd still argue that charging a % of the funds managed is unfair.  Perhaps an annual retainer on top of the initial fee for service for the original plan would be fairer.  An amount commensurate with the service to be provided,  rather than based on a % of the client's wealth.


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## SJG1974 (6 December 2011)

doobsy said:


> Dock and SG
> 
> Yes there is a push for fee for service but it is difficult.
> 
> ...




I agree doobsy.  Financial planning is very different to seeing a lawyer or accountant.  

I don't have a problem with commissions per se, as long as the client understands and agrees to them and know what they are paying.  As you pointed out, for many people, they may prefer to pay this way becuase it doesn't immediately impact their hip pocket, their daily cashflows and the like.

But they do have a bad name out there.  Industry Funds have rammed this down people's throats for years and it appears from what I have read that it could be a struggle for those planners who rely on them in the future.


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## Julia (6 December 2011)

SJG1974 said:


> I don't have a problem with commissions per se, as long as the client understands and agrees to them and know what they are paying.  As you pointed out, for many people, they may prefer to pay this way becuase it doesn't immediately impact their hip pocket, their daily cashflows and the like.
> .



I agree.   Some people will find a fee for service too expensive and will not seek financial advice.   They don't mind, however, a commission between the 'product' and the planner as long as it's clearly disclosed.
Just so we know what we're actually talking about here, Doobsy could you perhaps give an indication of a fee for a new client to do all that you'd have to do, i.e. risk assessment, consideration of all their circumstances, projected plan for the next X number of years etc?

Btw, on the issue of ongoing trail commissions where the adviser has not had any contact for god knows how long, the client can stop this.  I have a small lifetime annuity, taken out several years ago.  I have never seen the person who sold me this since but realised a couple of years ago that he was probably still getting commission on this.  Contacted issuer of the annuity, Challenger, and was told "don't worry about it, it's not coming out of your pocket".   "Once it's in place there's nothing we can do about it".

I didn't find that acceptable so wrote to the CEO, making the point that cumulatively all these commissions they were paying when no service was being provided, must lead to less profit for Challenger so effectively they were being unfair to their shareholders.

The trail commission was stopped.


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## Judd (6 December 2011)

Julia said:


> ....Btw, on the issue of ongoing trail commissions where the adviser has not had any contact for god knows how long, the client can stop this.  I have a small lifetime annuity, taken out several years ago.  I have never seen the person who sold me this since but realised a couple of years ago that he was probably still getting commission on this.  Contacted issuer of the annuity, Challenger, and was told "don't worry about it, it's not coming out of your pocket".   "Once it's in place there's nothing we can do about it".
> 
> I didn't find that acceptable so wrote to the CEO, making the point that cumulatively all these commissions they were paying when no service was being provided, must lead to less profit for Challenger so effectively they were being unfair to their shareholders.
> 
> The trail commission was stopped.




Good but was the commission returned to you in some form or retained by the provider, which is usually the case?


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## doobsy (6 December 2011)

Dock

Most of the newer generation will be moving to a fee based on the service provided. Quite often this may be shown as a percentage of funds managed but is worked out based on the level of service taken up.

Julia

Each client is individual, if it is a simple process and a client is going to become an ongoing client we try to minimise upfront costs where possible. If it is more transactional - age care assessment, assisting in getting a SMSF set up etc - then we will charge a fee to offset time spent. We charge a initial consult fee for 2 reasons, one to get rid of tyre kickers - why should we work for free - and two so that people take us seriously and we are re-imbursed for the time spent on that initial fact finding. That includes 2-3 meetings and all the background work getting authorities in place with super and investments, reviewing insurances etc. We then see if we can offer any help and discuss fees for SOA, ongoing service etc if applicable.


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## doobsy (6 December 2011)

Judd said:


> Good but was the commission returned to you in some form or retained by the provider, which is usually the case?




Judd- will have been retained by Challenger.

This is the argument of many advisers. Most product providers charge the same whether you go direct of via an adviser. Only difference is if you use an adviser then they will pay the commission to them. So client is no worse off. This may change but if it doesn't then using an adviser at least gives you someone to contact.

No different to a general insurance broker. Price is the same but in the event of a claim you can at least deal with someone local rather than direct to the multinational company.

Again with the 2 sets of rules but I don't get a breakdown of what the teller, the branch manager and the bank receive for writing my home and contents cover and yet I pay more for that than I do my income protection.


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## Julia (6 December 2011)

Judd said:


> Good but was the commission returned to you in some form or retained by the provider, which is usually the case?



Retained by Challenger of course.  As evidenced by my assertion that they're disadvantaging their shareholders if they continue to pay a fee that is not being earned.

No reason why it should be reimbursed to me.  It's a deal between the provider and the adviser.  I'm getting exactly what I paid for.


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## Julia (6 December 2011)

doobsy said:


> Bring in the insurance but allow each client the chance to take it up or not.






doobsy said:


> If you can get an insurer to provide the insurance cover I am all for it. As I see it my clients don’t need it.



I can't see insurance companies falling over themselves to provide this.  How could you insure against bad advice?
Just think about all the so called experts who - at the start of the GFC - widely advised investors to just hold on, it will all be just fine, when they should have been focusing on preservation of capital in people close to or in retirement especially.

If these people had held insurance (against what exactly?) would they have expected the insurance companies to cover all their losses?
Just seems totally unrealistic to me.



DocK said:


> I didn't say this was an issue for the storm clients - we mostly knew that the 7% upfront was instead of the usual annual management fees and it would have wound up in my favour over the long term - however the long term was not realised and it wound up being very expensive in hindsight.



This method of charging was pretty smart on Storm's part, in that it subtly locked people in for the longer term.
As DocK points out, if you stayed with Storm for ten years the p.a. fee was not unreasonable.


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## doobsy (6 December 2011)

Julia said:


> I can't see insurance companies falling over themselves to provide this.  How could you insure against bad advice?
> Just think about all the so called experts who - at the start of the GFC - widely advised investors to just hold on, it will all be just fine, when they should have been focusing on preservation of capital in people close to or in retirement especially.
> 
> If these people had held insurance (against what exactly?) would they have expected the insurance companies to cover all their losses?
> ...




Problem with this sort of fee is it was bringing forward future fees rather than a single transactional type fee. By bringing forward future fees why then would the adviser need to look after and service the client? They already have 10 years worth of fees, sit back and who cares if that client leaves in year 4. Focus on new clients which will bring in even more fees.

I have discussed this previously but I see it as a major problem in their model and the cashflow for the overall business. When the new clients stopped, so did all revenue into the business. Storm would have folded as an advisory group no matter what CBA did, the revenue had stopped as existing clients were fully tapped out and no new monies were coming in. How would they have paid the bills? And the bills were large due to the wages and fancy cheese and all the rest that Storm clients grew accustomed to.

Again no offense to storm victims but WTF were they thinking? Who pays for 10 years in advance on anything?


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## SJG1974 (6 December 2011)

The other issue with the Storm fees was they charged the 7% on the geared up amount and again and again every time they geared the client further.

A client with $400,000 of assets who suddenly has $2,000,000 invested via gearing is paying his 7% up front fee on $2,000,000 ($140,000).  Then he pays it again and again every time his friendly Storm adviser gears him up further!

If that client went to probably 90% of other advisers, he would have had a strategy for the investment of his $400,000 Allocated Pension, without gearing, and say he paid 2% p.a. to his adviser on the $400K, is then paying $8,000 p.a.

That client would need to invest for 18 years before he is in front!

The problem with the comparison that Storm sold is that the majority of advisers would not have provided the same advice, so fee comparisons would have been meaningless!


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## DocK (6 December 2011)

doobsy said:


> Dock
> 
> Most of the newer generation will be moving to a fee based on the service provided. Quite often this may be shown as a percentage of funds managed but is worked out based on the level of service taken up.
> 
> ...




Doobsy, I'm interested to know how much the initial consult fee you charge is, if you're willing to divulge.  No obligation, of course.  The reason I ask is this is partly why I wound up with storm in the first place.  I'd previously sought advice from FP's, and each time had to pay an initial consult fee, only to find they were pushing a narrow range of products/managed funds which upon further investigation were performing just at or below market, after management fees.  Naturally the "consult fee" was non-refundable as their time had been "spent" - even though I was unimpressed with the plan they offered and didn't wish to proceed with it.  Unless you hit upon a FP you're happy with it can prove to be a costly exercise by the time you find one you're comfortable entrusting your money with, and whose plan seems more in your favour than their own.  As someone said - red warning lights weren't flashing above storm's offices, neither are there green flashing lights above yours I'd guess?  You said yourself that getting good advice can be a bit of a lottery - if one has to pay for several initial consults before even getting a plan in place it's no wonder more and more people are opting to bypass the FP altogether.

In my business we often spend considerable time putting quotes and tenders together, without charging for the time spent, in the knowledge that if we get the job it will be well worth the trouble.  I'm quite sure we'd miss out on a fair amount of business if we were to start charging all first-time clients for quotes.  I get that you don't want to work for free - but it doesn't give a prospective client confidence that you'll be sure to come up with a plan that'll work for them if you want to be paid just to sit down with them.  Again, I know it's standard practice in your industry, and It's not my intention to have a go at you personally, but it's another facet of your industry I feel is due for a change.


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## Julia (6 December 2011)

doobsy said:


> Problem with this sort of fee is it was bringing forward future fees rather than a single transactional type fee. By bringing forward future fees why then would the adviser need to look after and service the client? They already have 10 years worth of fees, sit back and who cares if that client leaves in year 4.



Good point.  But if the sales pitch from Storm had already persuaded clients to take up the proposed ultra risky strategy, and have them accept that they're in it for an extended time,  it's hardly a stretch to persuade them that it's cheaper to pay one fee up front rather than ongoing annual fees.

Your subsequent revelation that the fee was charged on the geared up amount and again when that gearing was increased blows me away.  I'd imagined it was charged just the once on the initial amount the client brought in


> Again no offense to storm victims but WTF were they thinking? Who pays for 10 years in advance on anything?



I wouldn't either, for anything.  But, as above, if clients had been inspired to place so much trust in Storm that they accepted the strategy, I can see that such trust could extend to paying fees in advance (well, if it were just on the initial amount anyway).




DocK said:


> Doobsy, I'm interested to know how much the initial consult fee you charge is, if you're willing to divulge.  No obligation, of course.



I've already asked this and Doobsy hasn't divulged same.   That's fair enough.
I expect it varies considerably according to individual circumstances.
I'd still be interested in a ball park figure, though, Doobsy.


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## Solly (7 December 2011)

> "*Storm class action moves to mediation*
> Settlement not assured
> 
> Mediation talks will begin next year between Storm class action participants and a number of Australian banks."




More by Kate Kachor @www.investordaily.com


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## Solly (7 December 2011)

> "*Local gets keys to Storm duo's pad*
> 
> Going, going, gone. Townsville residents will no doubt be delighted their monument to corporate indulgence, the former home of Storm Financial founders Emmanuel and Julie Cassimatis, will remain in local hands."



As reported here; http://www.brisbanetimes.com.au/business/local-gets-keys-to-storm-duos-pad-20111206-1oh3y.html

I'm seeking urgent confirmation from sources on the ground, if reports can be verified that a stately gentleman smoking a stogie ,clad in a pin-striped suit and fedora was recently seen alighting from an Arnage in the vicinity of Melton.....


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## SJG1974 (7 December 2011)

Julia said:


> Your subsequent revelation that the fee was charged on the geared up amount and again when that gearing was increased blows me away.  I'd imagined it was charged just the once on the initial amount the client brought in




Thats the bit that gets me too Julia.

From what I read in the PJC submissions, every time Storm went to the client to increase the gearing, whether that be due to the LVR on the margin loan getting "too low" when the market was rising, to revaluing the house and taking more debt against it, they charged their 7% on the new gearing.  Increase the house loan by $100,000, charge the client $7,000.

If that isn't an inducement for the Storm advisers to gear clients up as far as they possibly can, I don't know what is!

And the reality with the fees is that the clients invested in perhaps 3 products- all index funds.  There was nothing really to manage, other than when to get in and out of the market.  And as we have seen via the "research" commentary, they painted this bright picture of the world based on statistical gobbledegook to support their decision to keep investors in the market right till the very end.

There was no management of the clients' asset allocation, no ongoing strategic advice (other than recommending to gear up more).  They even admitted they didn't look at clients' portfolios and their LVRs outside of the client reviews.  

These people weren't financial advisers, they were ticket clippers, just looking at any way they could go the client for more fees.

Thats why the fees were ludicrous- they were charged on a geared up amount, they locked the client into the strategy over the long term, and basically the advisers did next to nothing to manage the clients portfolios.

Its like anything, its not the money itself, its what you get for it.  And the strategy was very simple in reality.  Storm may have compared their fees to others and said over time they are cheaper, but others wouldn't have kept clipping the tickets all the way through, others wouldn't have geared clients up to the hilt, thereby increasing fees, and others would have actually provided some financial advice for the fees they paid.  Any way you look at it, it was a massive fee grab.


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## doobsy (7 December 2011)

Julia said:


> Good point.  But if the sales pitch from Storm had already persuaded clients to take up the proposed ultra risky strategy, and have them accept that they're in it for an extended time,  it's hardly a stretch to persuade them that it's cheaper to pay one fee up front rather than ongoing annual fees.
> 
> Your subsequent revelation that the fee was charged on the geared up amount and again when that gearing was increased blows me away.  I'd imagined it was charged just the once on the initial amount the client brought in
> 
> ...




Happy to divulge. $275. That covers us for the 2-3 hours of face to face time and the 4-5 hours behind the scenes research. We also feel that any advice is done for the right reasons. I understand that this might mean it is an expensive process to see a few planners but if we can't help someone beyond that initial point then we have been re-imbursed.

As a follow on - when might that be? When someone is paying off their home, wanted to check they are doing the right thing and they are - no advice needed. When someone comes in with debts and there is no need to add extra fees to their situation is another scenario. They just need to be told they are on the right track.

On the free quote - we tried it and found people were doing 2 things - 1 trolling advisers hoping to get enough information that they could then do it themselves and 2, people looking to waste your time by not being serious about providing good information so we could actually assess them properly. It is amazing how much more information and how much earlier we get that back before the appointment when there is a fee involved. People take it more seriously. As a result we aren't wasting time and that time can be spent on clients who are paying us.


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## Mash (7 December 2011)

"Your subsequent revelation that the fee was charged on the geared up amount and again when that gearing was increased blows me away. I'd imagined it was charged just the once on the initial amount the client brought in"

 This is where the UMIS comes into it...... the banks knew they had easy access to the punters to continually gear up ..... that is why the banks were falling over themselves to do whatever it took join in the venture with Storm...great for their bottom line.... Do you get it yet !!!! 
This was not just a crappy advisor: this was the banks rubbing their hands together and jumping into bed with the crappy advisor and backing the crap advice all the way.


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## Igetit (7 December 2011)

Mash said:


> "Your subsequent revelation that the fee was charged on the geared up amount and again when that gearing was increased blows me away. I'd imagined it was charged just the once on the initial amount the client brought in"
> 
> This is where the UMIS comes into it...... the banks knew they had easy access to the punters to continually gear up ..... that is why the banks were falling over themselves to do whatever it took join in the venture with Storm...great for their bottom line.... Do you get it yet !!!!
> This was not just a crappy advisor: this was the banks rubbing their hands together and jumping into bed with the crappy advisor and backing the crap advice all the way.




You are on to something there Mash. There are a variety of other connections between the two relevant parties; they require a little research to discover. They will be though. Slowly the penny falls. Rest assured, it will hit the ground. Sooner than you may think.


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## SJG1974 (7 December 2011)

Mash said:


> "Your subsequent revelation that the fee was charged on the geared up amount and again when that gearing was increased blows me away. I'd imagined it was charged just the once on the initial amount the client brought in"
> 
> This is where the UMIS comes into it...... the banks knew they had easy access to the punters to continually gear up ..... that is why the banks were falling over themselves to do whatever it took join in the venture with Storm...great for their bottom line.... Do you get it yet !!!!
> This was not just a crappy advisor: this was the banks rubbing their hands together and jumping into bed with the crappy advisor and backing the crap advice all the way.





And a crappy adviser being backed by the banks requires clients who will go along for the ride to make it all work.  No clients = no crappy advice.

Forget the legal stuff for a moment- that will sort itself out in court. Some around here, such as me, are interested in more than just the legalities.

You have been asked this question by Solly but didn't respond, so I would like to ask again in a different way- when presented with this strategy which you were prepared to pay through the nose for, how risky did you think it was?

And secondly, when Storm kept coming back and asking you to gear up further, did you ever question it, or consider the risk, or did you just do whatever it was that they told you and believe everything they said?

This isn't a witch hunt, or a criticism.  I am just interested in people's mindsets when they agreed to take on this strategy.  

Because at the end of the day, none of this would have happened if there weren't willing participants (i.e. people like you) to follow the advice.  I am interested in how they sold this to you, and how anyone could think that double gearing, and doing it over and over and over and over again is not highly risky?


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## Mash (7 December 2011)

NO . I have no intentions of being subjected to your interrogations. I have answered these questions in Federal Court and am not prepared to be grilled on this forum again. I am not under investigation. You may be happy to forget the legal stuff but I am not. Not a witch hunt. BS


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## SJG1974 (7 December 2011)

Mash said:


> NO . I have no intentions of being subjected to your interrogations. I have answered these questions in Federal Court and am not prepared to be grilled on this forum again. I am not under investigation. You may be happy to forget the legal stuff but I am not. Not a witch hunt. BS




Interrogations?  Simple questions they were.   Still, no skin off my nose if you can't bring yourself to answer them.

Not the first time you have overreacted to a post on the forum, and I am sure it won't be the last.


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## Mash (7 December 2011)

Can't handle a knock back hey SJG.. suck it up sunshine  !


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## Frank Ainslie (8 December 2011)

*Bad financial advice and misleading and deceptive conduct are not one and the same thing! *

There are some posters on this forum that still cannot differentiate between _“bad advice”_ and _“misleading and deceptive conduct”_ and, as a consequence, they are failing to understand what lies at the heart of our case against Storm and the Banks. 

From time to time it is understandable that some financial advisers will give advice that turns out to be bad advice in hindsight. After all, the share market is prone to be unpredictable and financial advisers cannot be expected to be fortune tellers. If the investors concerned knowingly accepted the risks and the financial advisers acted in good faith, then there can be no argument. 

However, the way some of the Storm financial advisers acted at the behest of the Cassimatises could in no way be described as acting in good faith or aboveboard. That’s why Cassimatis has been fined and thrown out of the FPA and ASIC (and our lawyers) are now pursuing him through the Courts. 

Certainly, the advice that Storm gave its clients was legitimate advice in the sense that it was permitted under the regulations. Where it changed from straight-out financial advice to dishonest advice was when it became misleading and deceptive, and was contrary to the wishes of Storm’s clients. Storm is now in the dock because the advice it gave to many investors was dishonest and harmful to those clients. The Banks are in the dock because they operated a co-operative in conjunction with Storm that gave support to Storm’s underhanded strategy of using investors’ assets to further its own ends. Such a policy suited the Banks because it promoted their bottom lines as well. 

This is therefore not about “bad advice” but rather about “deception” which is just another name for fraud.

*What is misleading & deceptive advice or conduct if you like?*

_“There is a very broad provision in the Australian Consumer Law that prohibits conduct by a corporation that is misleading or deceptive, or would be likely to mislead or deceive you. 

It makes no difference whether the business intended to mislead or deceive you””it is how the conduct of the business affected your thoughts and beliefs that matter.

If the overall impression left by an advertisement, promotion, quotation, statement or other representation made by a business creates a misleading impression in your mind””such as to the price, value or the quality of any goods and services””then the conduct is likely to breach the law.

Whether or not conduct is considered misleading or deceptive will depend on the particular circumstances of each case. 

The Australian Securities and Investment Commission (ASIC) is the consumer protection regulator for financial products and services. ASIC has powers to protect consumers against misleading or deceptive and unconscionable conduct affecting all financial products and services.”_

If the actions now brought by ASIC against Storm and the Banks, the ‘Worrells’ enquiry outcome, the PJ-C hearings, the FPA findings and the revelations in the Media is not proof of their complicity and wrongdoing, what will it take to convince some people that many of Storm’s investors were well and truly shafted? 

Our Storm financial adviser, Stuart Drummond, has already been charged with misleading and deceptive conduct as well as other charges under the Corporations Act. The Cassimatises have been charged with the same thing. Therefore, it should be obvious even to the most obtuse members of this forum that “bad advice” is not the issue here – misrepresentation by Storm that deceived it clientele into believing their assets were safe and had been invested as they requested at “low risk” with safe-guards in place is what this is really all about. Storm lied to us and therefore any advice it gave to many of its clients was tainted and deceptive.

The members on this forum that harp on about the ‘Stormies’ accepting bad advice in the beginning and, by so doing, contributing to their own downfall later are missing the essential truth. Remember what I said in my previous posting, _*“A person receiving financial advice is justified in his or her reliance on the expertise of that adviser.” *_The onus is not on the person who receives the advice and relies on such, but rather the person giving it. 

The proposition (labored on this forum infinitum) that people not schooled in investing should still be able to discern good advice from bad is not the issue here and never has been. The Storm investors were quite entitled to place reliance on the advice their Storm financial advisers gave them. Their state of mind when so doing is immaterial. They placed their trust in people that professed to be financial advisers, and Storm’s clients therefore had no reason to doubt that the advice they were given was sound financial advice. After all, that’s what they were paying for! *However, more importantly, that advice needed to be honest and it wasn't! * In other words, *"Storm put their own interests first!"*That is enough to satisfy any Court so it should also be good enough for anyone else! If it isn’t, that’s your problem. We don’t intend to make it ours! 

So, I say, let some common-sense prevail  and get off the topic of _“bad advice”_ because it really is a non-issue where Storm and the Banks are concerned. This case is about conduct unbecoming both by Storm and the Banks involved with that advisory firm who formed an alliance to churn money out of Storm’s clients (who just so happened to be the Banks’ customers as well). 

As I have stated previously, there is nothing clear-cut about this case. It has moved beyond the simple concept of poor advice and the impact of the global financial crisis into the realm of double-dealing (rather than double-gearing), and the sucking of money out of Storm’s clients for the benefit of Storm and the Banks. 

Why the Banks, some have asked when Storm misled us in the first place?  There are two reasons for this: 

(1) Because the Banks became partners with Storm (ASIC has accused them of being linked creditors among other things) and they dangled the carrots, they must now suffer the consequences. The Banks’ relationships with Storm were no “arm’s length” affairs but rather full-blown love affairs where their mutual attraction was one of greed. This will be borne out when all the facts are known. When one partner in a business relationship goes out of business, the other partner becomes liable. That’s the way the Law works! When it works, that is!

(2) People tend to forget that we had separate contracts with Banks that were significantly affected by the arrangements between Storm and the Banks. This led to breaches of contract that are now the subject of our lawsuits. Storm was not a party to any contracts we had with Banks so it had no right to interfere in those contractual arrangements. The Banks will, of course, argue otherwise – we expect that!

So this whole issue is not about “bad avice” but rather about fraud. If people understand this, then they will be able to see the big picture rather than be confined to watching the trailers.


----------



## doobsy (8 December 2011)

Frank

You make many valid points in there but I still do not agree that you should be allowed possibly the biggest handball of responsibility I have ever seen.

Storm SOA's fully disclosed the advice they were giving and the products.

CML margin loan statements fully disclosed current and allowable LVR's on at least a quarterly basis.

It was all there but it was sold differently, glossed over, whatever. If everyone took that approach to life that you can just claim "i didn't know", "I wasn't told", "I didn't understand", "I thought that meant something else" then where would we be?

If I buy a car that can go 200km/h and the saleman tells me it is safe to go that fast in that car, he might truly believe that based on testing provided by the manufacturer. Does that mean I should drive that fast? If I do drive that fast and crash, who's fault is that?

I see the deception as how Storm downplayed the risk involved. I wonder whether if markets had experienced a 10% correction before heading on to 7500 points, would you be on here telling everyone what a wonderful caring firm they are and how well the strategy has done? How the extra LVR meant you were even better protected than the average margin loan customer. I guess context is everything.


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## Solly (8 December 2011)

*Doco looks at collapse of Storm Financial*

Audio and transcript from ABC AM with Tony Eastley.

http://www.abc.net.au/am/content/2011/s3386283.htm
(Audio begins at minus 08:11)


*Doco details Storm Financial collapse*

http://www.abc.net.au/news/2011-12-08/doco-details-storm-financial-collapse/3719568?section=qld


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## Tyler Durden (8 December 2011)

Anyone know where we can watch this?


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## Frank Ainslie (9 December 2011)

doobsy said:


> Frank
> 
> You make many valid points in there but I still do not agree that you should be allowed possibly the biggest handball of responsibility I have ever seen.
> 
> ...




Doobsy,

What part of the following statement do you still not understand?

_“A former authorised representative of Storm Financial Ltd has been banned from providing financial services for four years after an ASIC investigation found he made false and misleading statements and provided inappropriate advice to a number of his clients. _

_ASIC’s investigation found that: 

* Mr Drummond failed to comply with financial services laws in relation to advice he provided to a number of his clients between October 2004 and July 2008. 
* Mr Drummond: made false and misleading statements in breach of s1041E of the Corporations Act 2001, 
* engaged in misleading and deceptive conduct under s1041H of the Corporations Act 2001, 
*promoted the Storm strategy without considering the suitability of the strategy for individual clients, 
* provided Statements of Advice and Statements of Additional Advice *containing misleading and deceptive information* in order to induce them to invest using the Storm strategy, 
* and didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.”_

Yet, you now state that, _“I see the deception as how Storm downplayed the risk involved.” _ Are you kidding me or what? Are you trying to tell me that this type of behaviour is the norm for a financial adviser? If so, God help anyone that decides to employ a financial adviser in the future because no one else will!

You ended by saying, _"I guess context is everything!"_ No, context is not everything – truth is! You are now trying to defend the indefensible when the facts are undeniable. 

Drummond was just one of a number of Storm advisers that promoted the Cassimatis philosophy for all it was worth. In so doing, they crossed the line between advice and deception and they will be paying the price. Drummond already has! 

As I have already spelled out, the law is very clear on this issue and I suggest you read up on it. 

You have consistently adopted a stance on these issues based on normal conduct. What Storm did was malpractice in anyone’s book. To now try and justify it as you are doing is incomprehensible. I suggest you have another think about this because your line of thinking at the moment has no bearing on what actually occurred.


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## Solly (9 December 2011)

Hi Frank

Are you aware of any actions against any other former Storm advisers ?

I wonder if there are any others who it could be proven also provided Statements of Advice and Statements of Additional Advice containing misleading and deceptive information ?

S


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## SJG1974 (9 December 2011)

I still can't get my head around just how people went into this without thinking it was risky.  It blows me away quite frankly.  I can sort of understand the elderly and frail being sucked in, but we have had people post on this forum who have been very very successful (and have taken delight in letting us know this) and obviously still have their wits about them who should have known better.

Successful business people who I am sure had used debt previously suddenly for whatever reason thought that loading up on debt and plunging it on the stockmarket was safe?  Safer than an allocated pension?  How could this be? 

The strategy was so ridiculously simple.  It was easy to follow, particularly for these successful people.  And people were happy to follow it until the **** inevitably hit the fan.  Like continually loading up on red on the roulette wheel, black was going to come up eventually and the good times would end.

So because Storm said it was safe, that made it so? Misrepresentation, fraud or not, where the hell was common sense in all of this...did Stuart Drummond strip these people of that too?  

If I say it is safe to jump out of a plane without a parachute, do people do it, or will they only do it if I am backed by the PJA (Plane Jumpers Association)?

If there is anything positive to come out of this then perhaps it is that more people weren't sucked in, given 8 out of every 10 people who went to Storm did have common sense and used it to walk away. Thank god these people didn't hand that over to Storm as well as their life savings.


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## DocK (9 December 2011)

SJG1974 said:


> I still can't get my head around .......




We get it already!  You don't get it, you can't believe it, you can't comprehend it, etc etc etc.

You've been posting more or less the same comments for a couple of years now - I think we all know your views, although I do wonder about your agenda?  Whenever some decorum starts to appear in this thread,  or some genuine discussion, along comes one of your repetitive, inflammatory posts.  Seems you joined ASF only to post the same comments endlessly on one thread.  Personally, I'm getting bored by your posts - by all means continue to beat the same drum, but in the interests of entertainment - could you try some variety? Please???  Otherwise, maybe save yourself some time and just copy and paste your prior posts


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## SJG1974 (9 December 2011)

DocK said:


> We get it already!  You don't get it, you can't believe it, you can't comprehend it, etc etc etc.
> 
> You've been posting more or less the same comments for a couple of years now - I think we all know your views, although I do wonder about your agenda?  Whenever some decorum starts to appear in this thread,  or some genuine discussion, along comes one of your repetitive, inflammatory posts.  Seems you joined ASF only to post the same comments endlessly on one thread.  Personally, I'm getting bored by your posts - by all means continue to beat the same drum, but in the interests of entertainment - could you try some variety? Please???  Otherwise, maybe save yourself some time and just copy and paste your prior posts




Fair enough.

I have no agenda, that I can guarantee you.  Interested onlooker, nothing more.  No ties to anyone even remotely involved in this. I am an investor, and interested in the psychology of investing, amongst other things.

This topic for some reason is fascinating to me. The whole sorry saga. And it clearly has divided people.  It provides a good look into the human psyche...how people can be taken in by the words and representations of another even though logic would suggest that the risks were too high. And of course the legalities of it all. And greed by different parties. And passing the buck by different parties. And then the way people do and don't take responsibility for their choices.  And people from all sides of the fence throwing their two bob's worth in.  

It has it all.


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## doobsy (9 December 2011)

Frank, I am not trying to justify anything Storm or it's advisers did. Myself and others have been vocal in our criticism at a local level well before they got their grubby hands on your money.

What I am not willing to accept is that any client can wipe their hands of all responsibility. 

Stuart Drummond provided inappropriate advice - we all agree. Lets put that to bed. So logically he should pay a price. And he has - he is no longer able to work in the industry. I am not sure on the situation with PI cover but I would expect that they should pay something to cover this fact.

I can't for the life of me see how you have managed to get from my OPINION on the deception to "Are you trying to tell me that this type of behaviour is the norm for a financial adviser? If so, God help anyone that decides to employ a financial adviser in the future because no one else will!"

WTF? I read and I read again and I don't see where you have found the connection.

My point was from a person walking into a financial planning firm, Storm undertook a good fact finding process so therefore that wasn't the problem. The problem was the blatent - what is it - false and misleading statements and inapporpriate advice.

Now I am on record on my opinion on the inappropriateness of the strategy so I don't need to justify myself there, the false and misleading statements I am guessing was about how safe the investment strategy was - is that NOT WHAT I SAID? They downplayed risk!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

My other point was that maybe they truly believed. Line up 10 economists and you get 10 different opinions. CommSec had a target for the all ord at the start of the year of 5400 points. They look like missing that by almost 25%. People would have read that newsletter and made decisions based on that becuase they are supposed "experts" Should they all be in jail?

Maybe Stuart Drummond looked at the world economy, looked at China, looked at India, looked at the mining boom, looked at low unemployment and made a decision that markets wouldn't tank, that they might correct but not tank. Truly believing that he made decisions for his clients and offered advice that he thought would provide the best possible outcome over a reasonable time period. I personally know ex Storm planners, one or two I think did believe they were doing the right thing. They just believed too much in the information from Storm HQ - along with everyone else. You mention Jellich a while back, he is a good example of someone who is gutted that his decisions have cost his clients and himself so much.

Then again, maybe he took one look, saw a chance to make over $100K in feesd for Storm which would result in a nice monthly bonus of over $10K for him and screwed you Frank.

I am just adding a bit of devil's advocate to the forum with opinions from the darkside. We can't all just listen to the ranting of someone who has had their future happiness taken away.


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## Frank Ainslie (9 December 2011)

Solly said:


> Hi Frank
> 
> Are you aware of any actions against any other former Storm advisers ?
> 
> ...




Hi Solly,

I believe the FPA has ousted a few but I haven’t heard about ASIC acting against anyone else at this stage! 

I made it a personal thing to go after Drummond because he lied to us at the outset. I believe that it was my endeavours together with others that submitted evidence against him that led to ASIC taking the action it did. I also believe that ASIC will only act against other Storm advisers if it has received enough complaints about any one Storm adviser from the Stormies themselves. I do not believe ASIC has either the resources or the will to look at each individual Storm adviser unless a_ 'prima facie' _case has been presented to ASIC. 

Actually your question is an interesting one in terms of the _'Statements of Advice' and 'Statements of Additional Advice' containing misleading and deceptive information. _*Who ultimately should be responsible for this deception because most Storm financial advisers were working off a Storm template?* If you look at the charges against Drummond, you could equally apply them to most of Storm's financial advisers. If Drummond has now been drummed out (there’s a pun there somewhere) why should the rest escape the net? Then, is it fair to condemn them all for the sins of some? I guess it will probably come down to the degree of culpability in the end and the weight of evidence against any one individual. 

Drummond acted at times in an unconscionable way which may not be the case with many of the other Storm financial advisers. One that springs to mind is Ron Jelich whom, I believe, genuinely thought he was acting in the best interests of his clients when he joined Storm. His actions ever since to obtain restitution for the people that he brought to Storm has been commendable. Therefore, I think a line needs to be drawn between those that openly deceived their Storm clients and those that thought they were doing the right thing. How one differentiates, however, is beyond me.


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## Solly (9 December 2011)

> *"Storm clients have last laugh*
> 
> YOU may have seen the Smash Me Manny doll. Now the destitute former investors of Emmanuel Cassimatis's Storm Financial have produced the "Piggy Banks" Christmas card and a soon to be released Piggy Banks television documentary."




More from Tony Raggatt @ townsvillebulletin.com.au


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## Garpal Gumnut (9 December 2011)

Solly said:


> More from Tony Raggatt @ townsvillebulletin.com.au




Thanks Solly,

A comment posted on that link.



> I don't know "Storm clients have last laugh" is a relevant title, given that Emmanuel and his missus are still flying around in their private jet!




I doubt if that is true, Manny passed me as I relaxed in to a Business Class seat on a departing Cairns flight last year and he was very much in coach. With your aviation links I would expect that you can confirm that he does now not own a jet.

Not that he should.

gg


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## Solly (9 December 2011)

Garpal Gumnut said:


> Thanks Solly,
> 
> A comment posted on that link.
> 
> ...




That's correct GG, the FJ44-2As have spooled up and departed 01/19 under a different command...

S


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## Garpal Gumnut (9 December 2011)

Solly said:


> That's correct GG, the FJ44-2As have spooled up and departed 01/19 under a different command...
> 
> S




How much did the FJ go for, or is that a secret only known to aviation insiders.

I myself am a Qantas Platinum and when with appropriate ALP or LP, ACTU or AICD contacts sup in the Chairmans Lounge.

So your secret is safe with me.

gg


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## Solly (10 December 2011)

Garpal Gumnut said:


> How much did the FJ go for, or is that a secret only known to aviation insiders.
> 
> I myself am a Qantas Platinum and when with appropriate ALP or LP, ACTU or AICD contacts sup in the Chairmans Lounge.
> 
> ...




GG

Good question, I'll see if the guys in research can shed some light. I guess the Red Book would have had $2-3 Mill on it. I wonder how the ownership was structured.

The 1A is a nice tidy airframe not a bad little taxi, it is wider and has more cabin space than the Citation CJ2+. I suppose that's handy for larger people or for carrying around money sacks. Although I'm not personally fussed with the Collins avionics, I'm more of a Garmin guy myself.

S


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## bunyip (10 December 2011)

DocK said:


> We get it already!  You don't get it, you can't believe it, you can't comprehend it, etc etc etc.
> 
> You've been posting more or less the same comments for a couple of years now - I think we all know your views, although I do wonder about your agenda?  Whenever some decorum starts to appear in this thread,  or some genuine discussion, along comes one of your repetitive, inflammatory posts.  Seems you joined ASF only to post the same comments endlessly on one thread.  Personally, I'm getting bored by your posts - by all means continue to beat the same drum, but in the interests of entertainment - could you try some variety? Please???  Otherwise, maybe save yourself some time and just copy and paste your prior posts




Nobody forces you to read SJG's posts if you find them so off-putting. I believe this forum has an ‘ignore’ function that you can activate to block any poster who upsets you. Or simply skip over his posts without reading them.

Personally I think SJG has done a great job in bringing some perspective to this discussion. At least he shows some balance in his views rather than putting all the blame on any one party. At no time have I ever seen him attempt to excuse the actions of anyone who was involved in the Storm debacle.  I find his posts make far more interesting reading than the interminable ranting of one or two others with their repetitive blaming of everyone else while refusing to accept any responsibility for their own decisions and actions.
Those of you who blundered into Storm’s trap could learn a lot from SJG’s knowledge and insights into the world of finance and investment. 

Keep up the good work, SJG!


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## Frank Ainslie (10 December 2011)

Doobsy,

_“What I am not willing to accept is that any client can wipe their hands of all responsibility.”_

By making such a statement you obviously believe that some of the responsibility should be shared by Storm’s clients for agreeing to sign up with Storm in the first place. Okay, let’s look at what these clients agreed to and what they actually got:

(1) They were told that Storm had software systems in place that could monitor their portfolios at all times. Clients had every right to assume that this system was a comprehensive one that gave a complete picture of clients’ loans including housing and margin loans. We now know that Storm’s software did nothing of the sort.

(2)  They were told by Storm that their system had built in “trigger-points” that would alert them when certain agreed ratios had been exceeded so measures could be taken to  stabilize clients’ portfolios. We now know that Storm’s systems could not produce meaningful “trigger-points” because its software was incomplete. 

(3) They were told that there was little or no risk because their investments would be made on a broad front with safeguards in place to insure that their assets would be safe. Storm then put them in a high-risk plan when it was not necessary to do so simply because Storm wanted to make more money out of them.

(4) Storm never told its clients that it had entered into agreements with certain Banks that would affect its clients separate contractual arrangements with those Banks.

(5) Storm gave them a “one fit all plan” tailored to dovetail into the Storm system rather than cater to their individual needs. 

(6) Storm’s standard SOA or template contained information that was years out of date and was included to persuade people that investing in shares was preferably and more profitable than putting their capital into real estate. Much of the data was untrue.

I could go on but I think you will catch my drift. These factors played an important part in persuading people to sign up with Storm. 

*You will note that I haven’t yet mentioned anything about any INAPPROPRIATE ADVICE Storm gave. * *Why? Because once Storm had misled its clients with regard to these critical issues, the case for misrepresentation had already been made. * In fact, the "advice factor" becomes totally irrelevant because Storm had already misrepresented the services it professed to offer. In so doing, i*t was in breach of the provisions in the Australian Consumer Law that prohibits conduct by a corporation that is misleading or deceptive, or would be likely to mislead or deceive. *

Remember what I said earlier. "_*If the overall impression left by a statement or other representation made by a business creates a misleading impression in one’s mind, such as to the price, value or the quality of any goods and services, then the conduct will breach the law." *_

The protections provided by the regulatory framework include misleading and deceptive conduct and you can throw in unconscionable behaviour into the mix as well because the regulatory framework also includes such.

It should also be mentioned that because we entered into an agreement with Storm, it had contractual implications. Therefore contractual breaches come into play as well. [/I] *A misrepresentation in contract Law occurs in circumstances where statements made in the course of negotiations leading up to a contract turn out to be false.*

In such circumstances, how can you expect any Storm client to accept any degree of responsibility when they were deceived into signing with Storm based on misleading information. You can’t because they are not at fault. For anyone to maintain otherwise is just plain foolish.

What you or anyone else personally thinks about Stormies mindset when agreeing to any advice Storm gave has no bearing on this case whatsoever. Think about it for a moment! By stating _“What I am not willing to accept is that any client can wipe their hands of all responsibility.”_ you are basically stating that the Storm clients involved should have known they were being deceived in the first place. How, may I ask? ASIC doesn’t agree with you and neither does the Law. Therefore, such a contention has no substance. Storm’s clients relied on information they were given at the outset and they signed up with Storm because they had no reason to doubt that what they were told was true. 

There are _"wind up merchants"_ on this forum that want to cloud the issues because they have nothing better to offer. Fortunately, we also have discerning members that can see that all these WUMs are trying to do is be controversial. They are blinded by their own personal prejudices and they refuse to accept evidence that is irrefutable. Their postings are based on their own personal opinions that cannot be supported by the circumstances or what actually occurred. Neither can such opinions be supported by consumer laws. Therefore, nothing they say can be taken seriously because their arguments are specious. Their postings strive to make others with different opinions appear foolish by introducing inflammatory words such as "ranting". In so doing, they only succeed in making themselves appear foolish.


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## SJG1974 (10 December 2011)

bunyip said:


> Nobody forces you to read SJG's posts if you find them so off-putting. I believe this forum has an ‘ignore’ function that you can activate to block any poster who upsets you. Or simply skip over his posts without reading them.
> 
> Personally I think SJG has done a great job in bringing some perspective to this discussion. At least he shows some balance in his views rather than putting all the blame on any one party. At no time have I ever seen him attempt to excuse the actions of anyone who was involved in the Storm debacle.  I find his posts make far more interesting reading than the interminable ranting of one or two others with their repetitive blaming of everyone else while refusing to accept any responsibility for their own decisions and actions.
> Those of you who blundered into Storm’s trap could learn a lot from SJG’s knowledge and insights into the world of finance and investment.
> ...




Cheers Bunyip.  Like you, when I make decisions I take responsibility for them.  We, seem to be a rare breed around these parts!


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## SJG1974 (10 December 2011)

Frank Ainslie said:


> Okay, let’s look at what these clients agreed to and what they actually got:




You conveniently forgot the most obvious one frank...

You agreed to borrow against your home, invest it all in the sharemarket, and then gear it up more when you didn't have to.  That seems to be exactly what Storm did for you. 

Yes you were misled.  But so was everyone who sat through a seminar, who met with an adviser, who had an SoA written up for them.  Why did 8 out of every 10 of these people not get sucked in like you did and walked away?

If their con job was so irresistable as you seem to imply it was, then how did so many potential victims slip through their net, while you eagerly signed your life away?  

Quite frankly Frank, more fool you if you didn't think that the strategy was risky.


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## DocK (10 December 2011)

bunyip said:


> Nobody forces you to read SJG's posts if you find them so off-putting. I believe this forum has an ‘ignore’ function that you can activate to block any poster who upsets you. Or simply skip over his posts without reading them.
> 
> Personally I think SJG has done a great job in bringing some perspective to this discussion. At least he shows some balance in his views rather than putting all the blame on any one party. At no time have I ever seen him attempt to excuse the actions of anyone who was involved in the Storm debacle.  I find his posts make far more interesting reading than the interminable ranting of one or two others with their repetitive blaming of everyone else while refusing to accept any responsibility for their own decisions and actions.
> Those of you who blundered into Storm’s trap could learn a lot from SJG’s knowledge and insights into the world of finance and investment.
> ...






SJG1974 said:


> Cheers Bunyip.  Like you, when I make decisions I take responsibility for them.  We, seem to be a rare breed around these parts!




Dear Bunyip & SJG,

Ok gents, if you read my posts you'll find I'm quite happy to accept responsibility for _my_ actions.  I'm also well aware of the ignore function.  I'm not upset by SJG's posts, merely frutrated at the lack of new content.   Not sure why you felt the need to respond on his behalf Bunyip, as he'd already done so himself?  I'm sure SJG is more than capable of giving me a serve himself if he wants, no need to trouble yourself to intervene   I'm not quite sure what insights into the world of finance have been offered - must have escaped my notice - but I'd certainly appreciate reading some more of these gems rather than the usual "how could they, I can't believe it, you were responsible" etc, etc.  This point has been made over and over, and then made again.   I'm sure there isn't a single ex-storm client that reads this thread who could possibly be unaware of the posters who remain adamant in their views re the apportionment of responsibility.  You're certainly entitled to your views, and you're entitled to air them.   And you have, at great length and frequency.  I would simply request that unless you derive some sort of pleasure from playing the blame game endlessly, please move on.   Pretty please??   I'm actually finding the discussion of legal points quite interesting, and GG adds some light amusement as usual.   I enjoy reading differing views, but find it much more interesting to read new content, rather than a rehash of prior posts.   It would be nice to be able to have a grown-up discussion without the nasty/aggressive overtones that some posts contain, don't you think?  Maybe not. 

Up to you, of course.  I do have the option of the ignore button, or skipping your posts, as you've said.


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## Frank Ainslie (10 December 2011)

SJG1974 said:


> You conveniently forgot the most obvious one frank...
> 
> You agreed to borrow against your home, invest it all in the sharemarket, and then gear it up more when you didn't have to.  That seems to be exactly what Storm did for you.
> 
> ...




Thank you for agreeing with me when you state, _"Yes you were misled. But so was everyone who sat through a seminar, who met with an adviser, who had an SoA written up for them."_ Case closed!


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## Igetit (10 December 2011)

bunyip said:


> Nobody forces you to read SJG's posts if you find them so off-putting. I believe this forum has an ‘ignore’ function that you can activate to block any poster who upsets you. Or simply skip over his posts without reading them.
> 
> Personally I think SJG has done a great job in bringing some perspective to this discussion. At least he shows some balance in his views rather than putting all the blame on any one party. At no time have I ever seen him attempt to excuse the actions of anyone who was involved in the Storm debacle.  I find his posts make far more interesting reading than the interminable ranting of one or two others with their repetitive blaming of everyone else while refusing to accept any responsibility for their own decisions and actions.
> Those of you who blundered into Storm’s trap could learn a lot from SJG’s knowledge and insights into the world of finance and investment.
> ...




Hi Bunyip, 

At the risk of being a little presumptious, I feel I speak for many - not all mind you -
when I say my favourite part of SJG's *"good work"*, almost always relates to the 
apology that follows in many of his subsequent threads as he seeks to "clarify his position". Yes - that's my favourite part.

We all love an apologist. Three cheers. Equally, please feel free to either "not read" or "opt to ignore" this post. Either will be fine.


----------



## bunyip (10 December 2011)

DocK said:


> Dear Bunyip & SJG,
> 
> Ok gents, if you read my posts you'll find I'm quite happy to accept responsibility for _my_ actions.  I'm also well aware of the ignore function.  I'm not upset by SJG's posts, merely frutrated at the lack of new content.   Not sure why you felt the need to respond on his behalf Bunyip, as he'd already done so himself?  I'm sure SJG is more than capable of giving me a serve himself if he wants, no need to trouble yourself to intervene   I'm not quite sure what insights into the world of finance have been offered - must have escaped my notice - but I'd certainly appreciate reading some more of these gems rather than the usual "how could they, I can't believe it, you were responsible" etc, etc.  This point has been made over and over, and then made again.   I'm sure there isn't a single ex-storm client that reads this thread who could possibly be unaware of the posters who remain adamant in their views re the apportionment of responsibility.  You're certainly entitled to your views, and you're entitled to air them.   And you have, at great length and frequency.  I would simply request that unless you derive some sort of pleasure from playing the blame game endlessly, please move on.   Pretty please??   I'm actually finding the discussion of legal points quite interesting, and GG adds some light amusement as usual.   I enjoy reading differing views, but find it much more interesting to read new content, rather than a rehash of prior posts.   It would be nice to be able to have a grown-up discussion without the nasty/aggressive overtones that some posts contain, don't you think?  Maybe not.
> 
> Up to you, of course.  I do have the option of the ignore button, or skipping your posts, as you've said.




If ‘_playing the blame game endlessly_’ is what gets up your nose, then there are a few others on here who show considerable talent in that department – you might want to give them a serve as well.
If you don’t find any insights in some of SJG’s posts, I’d suggest you read more closely, focus less on the posts where you think he’s being repetitive, and more on those that deal with the ins and outs of finance and investment. Apart from Doobsy, SJG appears to have more knowledge and experience in these areas than perhaps any other poster.
Sure, SJG is more than capable of speaking for himself. However, if I believe that you or anyone else is making unfair comment about him or any member of this forum, then I’ll be letting you know about it. Feel free to put me on your ‘ignore’ list as well if I’m ‘getting to you’ too much.

As for you taking responsibility for your actions – yes, I’m well aware of that, you may recall that a number of people, myself included, have commended you for doing so on a number of occasions. I’ve also commended you for taking control of your business by bailing out of the market rather than follow Storm's example by sitting on your hands and doing nothing while your investments went down the tube.
If these other Stormers had done the same thing then their situation would be much better than it currently is.


----------



## bunyip (10 December 2011)

Igetit said:


> Hi Bunyip,
> 
> At the risk of being a little presumptious, I feel I speak for many - not all mind you -
> when I say my favourite part of SJG's *"good work"*, almost always relates to the
> ...




Well then, I’m pleased you’ve found something to enjoy in his posts. Although I’d have to say that the vast majority of his posts contain no apology of any kind, and those that did contain an apology for an off the cuff remark, I feel that he really had no need to apologize for anyway.


----------



## Frank Ainslie (10 December 2011)

SJG1974 said:


> You conveniently forgot the most obvious one frank...
> 
> You agreed to borrow against your home, invest it all in the sharemarket, and then gear it up more when you didn't have to.  That seems to be exactly what Storm did for you.
> 
> ...




I’ll spell it out for you and Bunnyip because you both seem a little slow on the uptake. An agreement in law is just that. There needs to be a _“meeting of the minds” _and all relevant matters must be declared in such an agreement or it can become subject to litigation. In contracts there are *prime conditions* that either parties relies on and subsidiary conditions that may not necessarily incur “breach”. People cannot mislead (as you both seem to think) in a contract and expect that there will be no legal repercussions. Once such a contract is in breach, anything that follows from that point is immaterial. 

The UMIS issue is a case in point. If UMIS is proven people will be put back in a position before the UMIS took place. So everything you are saying is irrelevant to the case at hand. What advice Stormies were given was already tainted by the deception used to get them to agree to sign with Storm. The conditions of contract that were breached were *‘prime conditions’* that ultimately led to Stormies losing their money because Stormiers relied on these conditions to protect them against market forces- no real safeguards, a high-risk plan that was contrary to their wishes and so on. 

Statutory regulations also exist to protect investors and financial advisers need to be mindful of and follow the guidelines set down in this respect. ASIC is suing Storm and the Banks because these guidelines were not followed. 

You cannot see this because you don’t want to do so! You get your jollies off lambasting the Stormies because it amuses you. Personally, I feel that you have little else to offer so you cannot contribute anything meaningful to these discussions other than _“your to blame and you should accept the consequences of your action"._ In taking such a position, you are at odds with ASIC , the Worells Report” and the PJ-C hearings and findings. It doesn’t seem to matter to you two though because you have chosen to ignore everything that refutes your point of view. _"You are right and the rest of the world must therefore be wrong!"  _

I echo ‘Dock’s sentiments. If you can’t contribute something constructive to this debate or find some new material, you are going to remain empty vessels who will be listening to the sound of your own voices echoing around the vacuum in which you currently reside. Step back for a moment and try to find a little objectivity. Without it, you will find anything meaningful to say somewhat difficult.

Have a good day!


----------



## Solly (10 December 2011)

I wonder what is up ?

An unexpected hearing next Wednesday.

14 December 2011
ASIC unregistered managed investment scheme proceedings 
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

From: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument


----------



## SJG1974 (10 December 2011)

No need to explain Frank, I think I get it now. 

You were forced into this whole thing against your will.  You were not acting of your own free will when you signed on with Storm, when you signed the loan documents, the margin loan documents, the additional borrowing documents.  When you signed every page of the SoA.  This was all done under duress. 

I can now see why you compared the whole saga to the holocaust.  Eerie similarities of people being marched to their demise against their own free will, guns held to their heads. Of looting of Jewish riches.  Who would have thought that could happen in this day and age?  

This Stuart Drummond fellow would give Lex Luthor a run for his money…not much point sending him to jail…that won’t hold someone as devious as that. Amazing that 8 out of 10 people who saw him were able to get away from his evil clutches.  You?  Just unlucky I guess.  Terribly so.

I now understand that before Storm took your life savings, they took away your ability to think independently, your common sense and your logic.  Like Nazi Germany, they took away your freedom to make your own decisions. This crime is far greater than a simple UMIS…for the UMIS would never have gotten off the ground if you weren’t forced to participate in it. 

As someone who has always been fortunate enough to be able to act of my own free will when making investment decisions, I can only imagine what this must have been like for you.

You just wanted a conservative strategy and to protect your hard earned wealth.  And these criminals then forced you to do the complete opposite.  You didn’t have $$ in your eyes as you imagined a more prosperous life than you ever thought possible, you just wanted to protect your money through gearing over and over and over and over again into the stockmarket. Yep that makes a whole lot of sense.  I get it now…I really do.

It has taken a while, but I finally see the light. Hallelujah!!

And to remain consistent, and for idontgetit’s benefit (seeing as he takes great delight in reading my posts), I will make my standard apology, like I have in the majority of my previous posts…Frank, I am truly sorry I didn’t see this earlier.  

And while I am making yet another apology (gee I do this a lot) I should probably apologise to DocK too for going over the same old ground.  From now on I will try to present a more balanced argument and bring new things to the table, and not get drawn into childish name calling and repeating the same sort of stuff over and over. And playing the blame game is out.  I will take a leaf out of Frank’s book and follow his lead from now on when posting around here.


----------



## DocK (10 December 2011)

SJG1974 said:


> No need to explain Frank, I think I get it now.
> (snip)
> And while I am making yet another apology (gee I do this a lot) I should probably apologise to DocK too for going over the same old ground.  From now on I will try to present a more balanced argument and bring new things to the table, and not get drawn into childish name calling and repeating the same sort of stuff over and over. And playing the blame game is out.  I will take a leaf out of Frank’s book and follow his lead from now on when posting around here.




Oh no need to apolgise to me SJG, I actually got a bit of a giggle out of that one.  It may have lacked new content, but I did appreciate the tongue-in-cheek tone.  At least I assume you were typing in a humorous fashion?  I read it that way.   I don't think I actually suggested mimicking Frank, did I???   If so, please ignore that bit, brevity is to be admired, even if I generally lack it myself


----------



## Solly (11 December 2011)

> *"Bank of Queensland Storm Financial threat builds*
> 
> A LAWYER for hundreds of investors caught up in the Storm Financial collapse plans to launch court action against the Bank of Queensland before Christmas.
> 
> ...




More by Daryl Passmore @ The Sunday Mail


----------



## Frank Ainslie (11 December 2011)

*This really is the last time I will discuss the issue of responsibility!*

I have dealt with the issue of “responsibility” as far as the law is concerned. I would now like to finish by dealing with the human side of all this. In order to do so, I will draw another analogy.

Let’s say we have an airline called 'Storm Airways' and they are the envy of the industry because they can offer package holidays along with air travel that few can match. This, of course,  builds up a certain amount of resentment in their competitors who see 'Storm Airways' getting a lion’s share of the business. 

There are people in the airline industry that have had reservations over the years about the maintenance of 'Storm Airline's aircraft and have complained on and off to the Civil Aviation Board who has chosen to ignore these claims.

Eventually, one of S/A’s planes crashes and it is found that this crash was due to poor maintenance because S/A was cutting corners. 

At the Board of Enquiry the Chairman of S/A stands up and states, “_The passengers should have known we could only have given them these type of deals if we cut costs. Therefore, they knew that stepping aboard any of our aircraft was highly risky!”_

He is then asked, _“So you don’t think full compensation is in order because your company jeopardised the safety of the passengers?”_

_“Certainly not! They knew what they were getting into!”_

The Board of Enquiry subsequently found that S/A and the firm it sub-let its maintenance to were culpable because they were bound under the Civil Board of Aviation rulings to ensure that passengers’ safety was paramount. 

S/A, of course, went out of business but the maintenance firm ‘Fixed On The Cheap’ fought this finding and it took the survivors of the crash and the parents of those that perished many years before they obtained justice.

We Stormies are very much in the same boat. Some did not survive the Storm crash
And those that did will be scarred for life. If we therefore get a little angry at times at people that say, _“They knew what they were getting into!”_ you will understand. We cannot treat this lightly or as some sort of game. Our lives are on the line and we are going to fight with everything we have to obtain justice. 

If people still think we should be held partly responsible for stepping on board, so be it! Your viewpoint is at odds with what occurred but we do live in a democracy and you are entitled to it. Just don’t keep shoving your views down our necks. We have explained our position and that should be an end to it. You have yours! We know what it is by now so you don't have to keep repeating it.


----------



## Garpal Gumnut (11 December 2011)

Frank Ainslie said:


> *This really is the last time I will discuss the issue of responsibility!*
> 
> 
> 
> Let’s say we have an airline called 'Storm Airways' and they are the envy of the industry because they can offer package holidays along with air travel that few can match. This, of course,  builds up a certain amount of resentment in their competitors who see 'Storm Airways' getting a lion’s share of the business.




Sorry Frank for butting in to this stimulating conversation of the deaf.

"Storm Airways" was characterised by having 90% of the passengers who turned up at the airport, **** scared to fly with them, and taking a bus.

gg


----------



## Julia (11 December 2011)

Garpal Gumnut said:


> Sorry Frank for butting in to this stimulating conversation of the deaf.
> 
> "Storm Airways" was characterised by having 90% of the passengers who turned up at the airport, **** scared to fly with them, and taking a bus.
> 
> gg


----------



## bunyip (11 December 2011)

Frank Ainslie said:


> I’ll spell it out for you and Bunnyip because you both seem a little slow on the uptake.




LOL!!
Yes Frank, that’s me – a little slow on the uptake alright! As is SJG, as are the 80% of prospective Storm clients who walked away after reviewing the strategy, as are all the other people like me who didn’t go near Storm in the first place because we have the knowledge and ability to look after our own investments.

Yep, it’s a real drawback being a bit slow on the uptake. I’d give my right arm to be quick on the uptake like you are. Think of all the fun I missed out on by not being mentally switched on like you. I mean, if I was somewhat quicker-witted like you obviously are, then I could have waded into the Storm strategy like just you did, secure in the knowledge that I was investing safely by mortgaging my home, borrowing a large amount of money to combine with my life savings, and sinking the whole lot into the stock market.
Then doubling my portfolio by using an aggressive double gearing strategy, again safe in the knowledge that this was all low-risk, conservative stuff because Storm said so.

What a shame I don’t live beside you, Frank. I mean, I could come over to your place a couple of times a weeks and share a beer with you, learn how to be smart and switched on like you are. 
Who knows, if I got on really friendly terms with you then you might even teach me how to be astute and circumspect!

Merry Christmas to you Frank. And please keep up the entertaining posts....the world needs more switched-on people like you!


----------



## Frank Ainslie (11 December 2011)

Garpal Gumnut said:


> Sorry Frank for butting in to this stimulating conversation of the deaf.
> 
> "Storm Airways" was characterised by having 90% of the passengers who turned up at the airport, **** scared to fly with them, and taking a bus.
> 
> gg




Hi GG,

Sounds good but passengers can only be scared to fly with any airline if they have been warned in advance. In this case there were no media articles or insiders spilling the beans to the general public. Thousands signed up with Storm in good faith in much the same way that thousands flew with S/A accepting that their aircraft were safe because the industry and more importantly the Civil Aviation Board had given S/A's aircraft an airworthiness certificate or blank endorsement. Incidentally, by ignoring the prior warnings, weren't the Civil Aviation Board just as liable in this story? Aren't ASIC just as liable in the case of Storm?

Remember what I said earlier about the law and the purchaser of a service not being liable for a risk unless that risk is pointed out before he or she accept the service, *and he or she is prepared to take that risk! * Further, Storm did not have the safe guards in place to deal with risks despite the fact that it claimed otherwise, and it ignored its clients' wishes that they wanted  "low risk" plans with a steady growth. Stormies' rights were immediately violated when Storm misrepresented its services on both counts.

If you climb aboard any aircraft after being warned it could crash, then you have no case. If you have no reason to doubt the safety of the aircraft you have been asked to fly in, then you do have a case. It's as simple as that! In relation to Cassimatis, I think the Courts will see it this way and he will go down. The unfortunate thing for all Stormies is that Storm Financial is not still in existence because you would then have seen a plethora of lawsuits against that firm. Mine would have been among the first. 

Here's a challenge for all those that think we Stormies should share part of the blame. 

Rather than we Stormies always making a case, I think it's about time those that are in the other corner state their case relating it to those in the Dock; namely Storm and the Banks. How would you defend them? When so doing,  you must address the issue of "deceptive conduct" and base your defence on the consumer laws that existed at the time and common law principles. You see, if you cannot defend them or mitigate their parts in all this, you cannot apportion any blame to us!

For once let us be the judges! *Let's see you make a case that can stand up in consumer law or common law.* If you can make a reasonable case, we will listen. If not, please move on because we Stormies have no case to answer. Who among you has the guts to do so? Don't worry! We 'Stormies' will tell you whether you can now pass our test!

It's always a little different when the shoe is on the other foot, isn't it?


----------



## SJG1974 (11 December 2011)

Frank Ainslie said:


> Hi GG,
> 
> Sounds good but passengers can only be scared to fly with any airline if they have been warned in advance.




I like the idea of Storm Airlines Frank.  You have a vivid imagination, which has been shown throughout your posts.  No wonder you are a published author! Fantasy books I am guessing?

Let me present another scenario involving Storm Airlines to you.  I reckon this one probably gets to the issue you are trying to address. 

Lets just say Frank that passengers travelling on Storm Airlines go to the airport and see that the Storm Airlines jet has a wing missing and looks in disrepair, amongst other obvious problems.  You don't have to be a rocket surgeon to see that tavelling on that plane is highly risky.  Highly risky.

The Storm Airlines representative at the terminal tells the passengers "Look don't worry about what you see out there, there are no risks in travelling on this plane at all.  It may seem risky, but trust me, I am a Certified Flight Planner (CFP), I am a member of the Federal Pilots Association (FPA) and we are regulated by the Australian Security and Intelligence Commision (ASIC). Our pilot can overcome all of the potential risks and navigate you to your destination safely. He has this amazing Ignite navigation system on board, which has never let us down yet. "

He then goes on to tell you "Not only that, but by flying with us we will take you to places you have never dreamt of, you will be the envy of all your friends.  You will enjoy a life that you never imagined was possible.

This plane is completely safe; ignore what your eyes are telling you about our plane. Trust me, I am a CFP."

Now most people Frank, would consider the obvious risks, walk away and travel with a competitor who whilst it may not offer the same destinations as Storm Airlines, would at least get them to where they need to go with much less risk.  Most people would do this.  If I had to guess, at least 8 out of every 10 people would.

I am guessing Frank you would be in the 20% of travellers who would be sucked in by the slick sales pitch by the Storm Airlines representative, and with the dreams of exotic locations swirling around in your head, would decide that the obvious, no glaringly obvious risks of travelling with them are worth it to get the huge rewards on offer.

And then when the plane crashes, you will climb out of the wreckage and say to whoever is around to listen "but they didn't tell me it was risky, so I didn't think it was".


----------



## Solly (11 December 2011)

With all this discussion about the 80/20 split of people people walking away and an implied reference to the Pareto principal, I was flipping through my Spiraxs in an attempt to source the reference as to what was actually stated. I remember EC discussing the above at the Parliamentary Joint Committee, so I checked Hansard for clarification of what was stated.

This is what EC actually stated on 3/9/09 in his response to questioning from the Chairman in relation to advice.

"However, we were quite a unique model, and the way we approached it was rather than be everything to all people, we went the other way and we said,
‘This is what we do. We are specialists in leveraging,’ and if 100 people walked through the door, statistically. 25 or one in four would proceed with our plans and three out of four would not. So we did specialise; we did not do everything for everybody."

And later this was stated:

"What I said was we went the other way and we presented our offerings and educated clients and three out of four did not participate and one in four did. It was about attracting those people who wanted to go that way as opposed to saying, ‘We have a shelf full of everything that you may want.’ "

I just felt clarity on the issue would be beneficial as to what was actually stated and from where it was sourced. I wonder what statical and measuring methods were used by Storm to record and arrive at the stated 25:75 acceptance ratio of their strategy.


----------



## maccka (11 December 2011)

Solly said:


> I wonder what statical and measuring methods were used by Storm to record and arrive at the stated 25:75 acceptance ratio of their strategy.




Hi Solly,

Every time I went to a Storm educational session I had to sign in.  Obviously individual visits were recorded in their appointment books.  From there they were probably able to develop a very clear understanding of what their clients did.

cheers
Maccka


----------



## Julia (11 December 2011)

maccka said:


> Hi Solly,
> 
> Every time I went to a Storm educational session I had to sign in.  Obviously individual visits were recorded in their appointment books.  From there they were probably able to develop a very clear understanding of what their clients did.



A clear understanding of "what their clients did"?  I have no idea what you mean here.

Would you be kind enough to clarify?


----------



## Solly (11 December 2011)

maccka said:


> Hi Solly,
> 
> Every time I went to a Storm educational session I had to sign in.  Obviously individual visits were recorded in their appointment books.  From there they were probably able to develop a very clear understanding of what their clients did.
> 
> ...




Thanks Maccka,
I was wondering if that used any propriety Customer Relationship Management software to track and record 'sales' and opportunities.


----------



## maccka (11 December 2011)

Julia said:


> A clear understanding of "what their clients did"?  I have no idea what you mean here.
> 
> Would you be kind enough to clarify?




They - Storm.  
Clients - people who went to them for advice.
Did - whether clients went beyond just asking for advice or not.

It's pretty simple Julia, people came in the doors either for individual appointments or for education seminars.  It's a fairly simple thing to count the number of people who walked through the doors and then count the percentage of those that took up their advice.  

cheers
Maccka


----------



## SJG1974 (11 December 2011)

Solly said:


> With all this discussion about the 80/20 split of people people walking away and an implied reference to the Pareto principal, I was flipping through my Spiraxs in an attempt to source the reference as to what was actually stated. I remember EC discussing the above at the Parliamentary Joint Committee, so I checked Hansard for clarification of what was stated.
> 
> This is what EC actually stated on 3/9/09 in his response to questioning from the Chairman in relation to advice.
> 
> ...




Solly,

I seem to recall another Storm Adviser using the 2 out of 10 acceptance ratio.  Perhaps David McCulloch or Gus Dalle Cort or Stuart Drummond. Do you have any of their statements in your Spiraxs? It is a figure that stuck with me for some reason.

Still either way whether its 2 out of 10 or 2.5 out of 10 is still very much in favor of those who didn't like what they saw and walked away.


----------



## maccka (11 December 2011)

Solly said:


> Thanks Maccka,
> I was wondering if that used any propriety Customer Relationship Management software to track and record sales and opportunities.




I believe they did Solly but I don't know that definitively.  Even if they didn't have specific commercial software, it isn't hard to customise a spreadsheet or database to track the numbers.

cheers
Maccka


----------



## maccka (11 December 2011)

Some transcript details from the Cairns hearing where Gus Dalle Court was interviewed.

From Hansard - http://www.aph.gov.au/hansard/joint/commttee/J12222.pdf 
Page CFS 2

"CHAIRMAN””That is fine. Would you describe your role as a managing director of Storm and tell us how involved you were with the day-to-day operations of Storm?

Mr Dalle Cort””We had a dozen staff in Cairns, including me. We met existing clients and new clients, and we had a process. We tracked everything at Storm, and the process for a client to do business with Storm Financial took, on average, 180 days. There are not too many financial institutions out there that take 180 days to do business with a client.

Senator WILLIAMS””What do you mean by ‘doing business’? 

Mr Dalle Cort””It took 180 days from the time the client came in to say hello to completing the business or entering the market.

Senator WILLIAMS””That was the average?

Mr Dalle Cort””Yes. Some took less time and some took more. That process entitled the client to a number of sessions. There would be half-a-dozen sessions with a client before they would even attempt to do business with us. This involved finding out not only their personal position but also their financial position and right through to having a number of banks quote on the business, whether it was margin lending or equity lending. The appropriate bank would be chosen, based on that bank’s product."

from page CFS 14

"Mr Dalle Cort””We had educational sessions in our office on a fortnightly basis. We held bigger educational sessions at the Hilton and at Cazalys on a number of occasions, but they were mainly in our office.

Senator McLUCAS””I know the chairman asked this question, but can you give me an understanding of what happened at those events?

Mr Dalle Cort””We would show the clients the difference between shares, cash and property. We would show them volatility and educate them on how different markets react and give them a broad based information session””only an information session. No advice was given on these evenings, just pure information. Should clients decide to come back and have a chat to us, they did that on an individual basis and we would explore their individual circumstances after that.

Senator McLUCAS””So, mostly, the educational event would be the first point of contact?

Mr Dalle Cort””Correct.

Senator McLUCAS””Then you go to a process of doing an assessment of the person’s circumstances. How long did that take?

Mr Dalle Cort””On average, 180 days.

Senator McLUCAS””Sitting down with the client?

Mr Dalle Cort””It depends. When a client wanted to come back and have a chat we would have a profile and would certainly obtain all their financial data.

Senator McLUCAS””I am not talking about the average length of time. How many hours would you sit with a client to do an assessment of their financial situation?

Mr Dalle Cort””From start to finish, a client would spend a minimum of 10 hours with us. 

Senator McLUCAS””To do their financial assessment? To do that first”” 

Mr Dalle Cort””That little step there? 

Senator McLUCAS””Ten hours?"

...

from page CFS 15
"Mr Dalle Cort””No, not 10 hours for that individual component. It would be a minimum of an hour, and a lot of the time the client would have to go away and come back with lots of data, and we would expand on that.

Senator McLUCAS””So on average you would spend an hour to assess””

Mr Dalle Cort””A minimum of an hour.

Senator McLUCAS””And then how long would it take to develop the statement of advice that you are required to provide?

Mr Dalle Cort””If you are trying to break up each individual component, there are in excess of 20 hours””20 hours would be an absolute minimum that we would spend on any individual client, both in front of or behind the scenes.

Senator McLUCAS””You also say that you were selling products that were products you were buying off the shelf””

Mr Dalle Cort””Correct. 

Senator McLUCAS””and they required, I think in all cases, either equity lending or margin lending. Were there any types of products that you recommended to””

Mr Dalle Cort””Superannuation products right across the board. They did not all require equity lending or margin lending. A number of our clients just had cash invested into the index trust without gearing attached to it.

Senator McLUCAS””Can you give me an understanding of the proportion of your clients who did not require margin lending in order to participate?

Mr Dalle Cort””Only about 30 per cent of our clients were actually investment clients. So 25 per cent or 28 per cent of clients."

cheers
Maccka


----------



## Garpal Gumnut (11 December 2011)

Maccka from the foregoing evidence it would appear that the poor Storm clients fell amongst muppets.

The Financial Planners dealing with them were more like day one check out chicks than financially adept professionals, inspecting the trolley of what the clients purchased and then executing and billing for their purchases.

gg


----------



## Solly (12 December 2011)

SJG1974 said:


> Solly,
> 
> I seem to recall another Storm Adviser using the 2 out of 10 acceptance ratio.  Perhaps David McCulloch or Gus Dalle Cort or Stuart Drummond. Do you have any of their statements in your Spiraxs? It is a figure that stuck with me for some reason.
> 
> Still either way whether its 2 out of 10 or 2.5 out of 10 is still very much in favor of those who didn't like what they saw and walked away.




SJG1974,
I am wondering how the raw data was soured to substantiate these figures. I suppose it is because I come from a background where it is crucial to verify, check, recheck and in some cases peer review facts, statements and observations. I have often seen 'anecdotal facts' far removed from actuals. I don't have any other records regarding the 80/20 claim but I will quiz my associates to see if any further reference can be sourced.


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## SJG1974 (12 December 2011)

David McCulloch's take on things:

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/report/c03.htm

3.13      Mr David McCulloch, long-time group accountant for Storm Financial, summarised the business model as follows:

... using debt, mortgaging the home, using margin lending and using only share market investments.[6]

3.14      All Storm advisers operated under direction from Storm's headquarters in Townsville. As Mr Gus Dalle Cort, director of Storm Financial (Nine) in Cairns, explained to the committee:

Everything was directed back to the one system at Storm, from the way we developed our statements of advice to the process of quoting to banks. Everything was sent back to Storm central and farmed out from there. Our planning was done back-office, but our input from talking to a client and certainly a lot of our file notes were all sent to the one point.[7]

3.15      This description was corroborated by Mr McCulloch:

No advisers were permitted to undertake their own financial planning modelling. *Rather, their role was to explain the Storm financial planning model to clients who were interested and to ensure that clients who were not comfortable with this did not become a client.* All modelling of plans were undertaken by Storm's compliance or cash flow modelling cell, headed up by Julie Cassimatis.

This highlighted bit obviously seems at odds with those who are saying they didn't understand the risks they were taking when they signed on. I guess the truth lies somewhere between McCulloch's version and the version of "I had no idea of the risks involved"....


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## Frank Ainslie (12 December 2011)

Solly said:


> With all this discussion about the 80/20 split of people people walking away and an implied reference to the Pareto principal, I was flipping through my Spiraxs in an attempt to source the reference as to what was actually stated. I remember EC discussing the above at the Parliamentary Joint Committee, so I checked Hansard for clarification of what was stated.
> 
> This is what EC actually stated on 3/9/09 in his response to questioning from the Chairman in relation to advice.
> 
> ...




Hi Solly,

The question really isn't about how many accepted Storm's advice and how many didn't but rather what's the norm? How many people walk away after being given financial advice and how many accept such? What's the industry standard? Did more people walk away from Storm than is normally the case or is this just another issue that has been distorted?


----------



## Garpal Gumnut (12 December 2011)

Frank Ainslie said:


> Hi Solly,
> 
> The question really isn't about how many accepted Storm's advice and how many didn't but rather what's the norm? How many people walk away after being given financial advice and how many accept such? What's the industry standard? Did more people walk away from Storm than is normally the case or is this just another issue that has been distorted?




That is a very good point Frank.

gg


----------



## bunyip (12 December 2011)

Frank Ainslie said:


> Hi GG,
> 
> Sounds good but passengers can only be scared to fly with any airline if they have been warned in advance.




80% of prospective Storm passengers were scared to fly with Storm Airways._* Nobody warned them in advance*_ – their warning bells sounded after they looked into the strategy and had the common sense to recognize the extreme danger in mortgaging their homes and borrowing vast sums of money via margin loans to combine with their life savings, and then sinking the whole lot into the stock market.

If someone was considering handing over 145 grand for his Storm Airways ticket like you did, Frank, he or she would hopefully be prudent enough to have a close look at the Storm aircraft to make sure there were no cracks in the windscreen or loose rivets on the wings or tyres that were worn down to the fabric.
And if the captain and co-pilot of the aircraft were sloppy looking characters in need of a shave and wearing faded denim jeans, as was the captain of Storm Financial, then that would be further reason for concern.


----------



## doobsy (12 December 2011)

Is it just me or should it not be Storm Travel Agents - not airlines.

Pay the highest airfares around but get the discount airline when you get to the airport. With no food or movie.

If you book your holiday through Storm Travel and they choose to put you on "NoMaintenance Air" and you get to the airport and still get on the plane and it crashes, are you blaming the travel agent? the airline (bit hard to sue the market)? Or the poor bastard to built and sold the plane which works in normal circumstances?

I will throw out a few questions that no stormies will answer I would say.

Gus Dallecort says average 6mths to "educate" people so they were comfortable with the process and "fit" the singular advice being offered.

Question 1: Anyone willing to say how long from start to finish before they first invested

Question 2: At what point in the process for those "conservative" investors did they start to feel comfortable with the idea of investing into shares

Question 3: When did they then feel comfortable taking on the extra share exposure using the loans

Question 4: What if any discussions were had about risk in share investing

Question 5: What was it you think you said / wrote down on a feedback form that led Storm to believe that you were a client that "fit". If they were doing the filtering before even calling clients back in, why did you get a call?

I think those questions might bring some more QUALITY information to the forum rather than just the ranting about breach of contract or what ASIC believe.


----------



## Frank Ainslie (12 December 2011)

*Putting the ‘Stormies’ legal position thing in perspective! *

I often wonder how many Stormies are actually members of this forum? I also wonder if at times they, like me, scratch their heads at some of the postings? This extract for instance:

_“Lets just say Frank that passengers travelling on Storm Airlines go to the airport and see that the Storm Airlines jet has a wing missing and looks in disrepair, amongst other obvious problems. You don't have to be a rocket surgeon to see that travelling on that plane is highly risky. Highly risky.”_

As I have stated a number of times, in order for anyone to accept risk they must be pre-warned that a risk exists and accept such. That’s part of consumer law but he and others consistently chooses to ignore this. We can only hope that the Banks’ lawyers have the same mindset because it will be a _“no contest”_ in our favour. 

Some also have their noses out of joint because I refuse to admit that Helen and I were responsible in any way for what happened to us in signing up with Storm. They ignore the fact that our Storm adviser has been charged by ASIC with:

* making false and misleading statements in breach of s1041E of the Corporations Act 2001,
* engaging in misleading and deceptive conduct under s1041H of the Corporations Act 2001,
* promoting the Storm strategy without considering the suitability of the strategy for individual clients,
* providing Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, and
* didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.

Note how many times the words, *‘misleading’* and *‘deceptive’ *appear above.  

Yet, they want us now to conveniently forget these transgressions because it doesn’t suit them to consider such. They also want us to forget that Sections 1041E and 1041H of the Corporations Act 2001 were breached.

I’ve no doubt that ASIC will include these allegations in its assertions that _“the Cassimatises breached their duty as directors by causing and permitting Storm to be exposed to legal liability arising from the implementation of a financial services business model (Storm Model) which involved providing commoditised financial advice to investors that failed to take into account the personal circumstances of individual investors.”_

The most worrying thing for any would be investors looking in must be these detractors' apparent lack of knowledge in relation to consumer laws clearly demonstrated by their obdurate attitudes when confronted with the facts - and they claim to work in the financial advisory industry??? Would you trust such individuals with your futures if they have no knowledge of the sections of the Corporations Act that relate to financial advice. This is evident by their refusal to consider the evidence to hand and their single-minded fixation with the mindset of the people that invested using the services of Storm financial. 

In the postings I have made on this forum in the last week or so I have outlined the breaches in consumer laws that are at the heart of this matter. Yet, no one has responded refuting my contentions. Instead, they continue to side-step these legal arguments and attempt to cloud the issues by returning to the old mantra, _“You knew what you were getting into!”_

What does that tell you? It tells me that they simply want to ignore the facts either because they do not know the law or they choose to ignore such. Either way, they are a worry!

I will repeat my challenge to them – one they have so far chosen to ignore! 

Based on consumer and commercial law principles, not your own subjective views, on what basis do you maintain that the ‘Stormies’ are partly responsible? In your response, you will need to back this up with legal argument. You will also need to mitigate the case we and ASIC have against Storm and the Banks because only by so doing can you place us alongside them. *You will also have to deal with misleading and deceptive conduct which is central to our case.*

I think we Stormies can take it as read that if those in the other camp cannot make a case for themselves, then we should treat anything else they have to say on Storm and the Banks as meaningless humbug. 

*HERE”S YOUR CHANCE TO PROVE ME WRONG! *

Remember that we Stormies are not in the dock and you have to state your reasons why we should be based on the Law, not on supposition or your own personal opinions but rather on the facts. In other words, prove to me that you know what you are talking about!

This challenge also goes out to any member on this forum that feels that he can defend Storm or the Banks’ position. The financial advisory sector is on trial here as well as Storm and the Banks, so any financial advisory firm or individual is welcome to try and place us Stormies alongside Storm and the Banks in terms of culpability.

However, *YOU MUST STICK WITH THE FACTS And RESPOND WITH LEGAL PRINCIPLES*. I have done so in stating our case and I expect nothing less from any of you.

If no one is prepared to accept my challenge, I (and I hope, other Stormies) will assume that you and your supporters cannot make a case! Everything you have stated so far has no bearing on the legalities of our case. Establish a case or get out of the kitchen!


----------



## Solly (12 December 2011)

Frank Ainslie said:


> Hi Solly,
> 
> The question really isn't about how many accepted Storm's advice and how many didn't but rather what's the norm? How many people walk away after being given financial advice and how many accept such? What's the industry standard? Did more people walk away from Storm than is normally the case or is this just another issue that has been distorted?




Yes Frank that was also on my mind. 
What is the average conversion rate of "inquiries" to "sales"?
In the past I have attended info sessions conducted by financial advisers and the like. I wonder what the win rate is. 

It would be interesting to know what the strike rate is on walk-ins, tyre kickers, targeted marketing campaigns, prompted seminars and the like. I wonder if there are any advisers or industry professionals willing to share these stats on this forum.


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## SJG1974 (12 December 2011)

Solly said:


> Yes Frank that was also on my mind.
> What is the average conversion rate of "inquiries" to "sales"?
> In the past I have attended info sessions conducted by financial advisers and the like. I wonder what the win rate is.
> 
> It would be interesting to know what the strike rate is on walk-ins, tyre kickers, targeted marketing campaigns, prompted seminars and the like. I wonder if there are any advisers or industry professionals willing to share these stats on this forum.




I think the problem Solly is that you would be comparing apples with oranges....different advice practices offer different services to different people, and would market them differently.  Storm benefited from a big presence in Townsville, they benefited from having clients who rode the bull market referring their friends, a large network of advisers and some high profile clients who made comments on what was a professionally presented website. Other than bank advisers, I dare say there would be few firms who could have benefited from the above. 

Storm in their last few years probably operated in ideal advice conditions.  But since then, the landscape has changed significantly.

Its fair to assume that the public would be much more wary about paying for advice now (given the publicity of Storm and other financial disasters) than they were back in the days of the bull market. I have spoken to a number of advisers and they are struggling to attract new clients now, where it was much easier for them to sell the value in their advice when the market was roaring and financial disasters weren't taking centre stage in the financial press. Much harder to get clients to pay for advice when times are tough I would imagine.

During the latter part of the bull market, there was almost an expectation amongst people who weren't financially savvy that shares were a sure fire winner and almost a guaranteed path to riches...that is basically what Storm based their advice on. We know that people don't think that way now and I would say the advice industry would be suffering a result.

And I would dare say that Storm's education process, which we have heard could take up to 180 days, would be much more thorough than 90% of advisers out there. Storm could probably afford to take so much time, in the knowledge that those they signed up in the end would pay such huge fees.

Again, I find it difficult to believe that after a 180 day education process, the Frank Ainslie's of this world did not understand what they were getting themselves into, when so many apparently did and chose to walk away.


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## Garpal Gumnut (12 December 2011)

SJG1974 said:


> I think the problem Solly is that you would be comparing apples with oranges....different advice practices offer different services to different people, and would market them differently.  Storm benefited from a big presence in Townsville, they benefited from having clients who rode the bull market referring their friends, a large network of advisers and some high profile clients who made comments on what was a professionally presented website. Other than bank advisers, I dare say there would be few firms who could have benefited from the above.
> 
> Storm in their last few years probably operated in ideal advice conditions.  But since then, the landscape has changed significantly.
> 
> ...




To be fair to Frank, you are looking at it with hindsight.

Many Storm investors were so taken with the "message" that they tried to beam their good fortune to friends and families. It had all the characteristics of a cult, really.

I know families who were divided, even before it all went **** up.

Who knows where we would be if the market had not crashed.

gg


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## Julia (12 December 2011)

Frank Ainslie said:


> Based on consumer and commercial law principles, not your own subjective views, on what basis do you maintain that the ‘Stormies’ are partly responsible? In your response, you will need to back this up with legal argument. You will also need to mitigate the case we and ASIC have against Storm and the Banks because only by so doing can you place us alongside them. *You will also have to deal with misleading and deceptive conduct which is central to our case.*
> 
> I think we Stormies can take it as read that if those in the other camp cannot make a case for themselves, then we should treat anything else they have to say on Storm and the Banks as meaningless humbug.
> 
> ...



So you have now assumed the role of deciding who may say what on this forum.
What on earth gave you the idea that you are in any position to dictate the terms of how other members post?
Don't be so ridiculous.


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## Garpal Gumnut (12 December 2011)

Garpal Gumnut said:


> How much did the FJ go for, or is that a secret only known to aviation insiders.
> 
> I myself am a Qantas Platinum and when with appropriate ALP or LP, ACTU or AICD contacts sup in the Chairmans Lounge.
> 
> ...






Solly said:


> GG
> 
> Good question, I'll see if the guys in research can shed some light. I guess the Red Book would have had $2-3 Mill on it. I wonder how the ownership was structured.
> 
> ...




I realise Solly that you must be very busy with the imminent arrival of the Dreamliner to Eagle Farm, but I need a ball park figure on Manny's loss on his jet.

My contacts in low finance tell me it was leased, but he would have still had to pay out the residual.

I have only ten fingers and am counting the assets that may be available to ASIC and am unsure whether to use a pinkie or a forefinger for the 1A.

I also have toes but prefer to use those with boots.

gg


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## Harleyquin (12 December 2011)

It's 'interesting' to read the discussion on education seminars and percentages of clients being sucked in or walking away.  What about the majority who went to storm asking for low risk individual advice and were told that's what they were getting.  Get some figures on the ones who were cheated and lied to and we might see some different scenarios.


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## doobsy (12 December 2011)

Gg

Does my memory serve me right that the jet was part of ignite and storm then paid that IT shell company when they wanted to use it. 

Frank, did you see the inside of it?


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## Solly (12 December 2011)

doobsy said:


> Gg
> 
> Does my memory serve me right that the jet was part of ignite and storm then paid that IT shell company when they wanted to use it.
> 
> Frank, did you see the inside of it?




doobsy... you have a good memory !

http://www.townsvillebulletin.com.au/article/2009/11/05/91781_print.html


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## doobsy (12 December 2011)

Frank, i don't have the energy or legal knowledge to argue so i will assume you are correct. Saying that i would like you to acknowledge this point for me

Are you saying we should become like America where McDonalds puts "Hot coffee -do not apply to lap as it may burn" after being sued or should society expect a reasonable amount of implied knowledge?

By this i mean everyone over 21 will remember or have heard about the 87 crash or more recently the tech boom and bust. So is there an implied knowledge that shares can be volatile. 6 months of Storm education surely touched on it, it was definitely a risk in their Soa disclosures. 

Anyone who has borrowed any money knows to be careful because you are spending what is not yours and must be paid back? Implied knowledge? 

Add these together and is there not a certain level of risk people should have been expected to know they were taking on?


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## Solly (12 December 2011)

Garpal Gumnut said:


> I realise Solly that you must be very busy with the imminent arrival of the Dreamliner to Eagle Farm, but I need a ball park figure on Manny's loss on his jet.
> 
> My contacts in low finance tell me it was leased, but he would have still had to pay out the residual.
> 
> ...




GG

I'm still waiting for a response from my mate Frankie, he's been a bit distracted lately since the new work experience girl, Natashenka, started in research. 
Speaking about fingers, I'm believe that there's a hazy pic floating around somewhere, showing someone flipping an extended middle finger from a port window on one of the final taxis to the piano keys.

S


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## Garpal Gumnut (13 December 2011)

doobsy said:


> Gg
> 
> Does my memory serve me right that the jet was part of ignite and storm then paid that IT shell company when they wanted to use it.
> 
> Frank, did you see the inside of it?






Solly said:


> doobsy... you have a good memory !
> 
> http://www.townsvillebulletin.com.au/article/2009/11/05/91781_print.html




Thanks doobsy,

The yardie at an hotel where I spend matins confirms your hunch.

It makes me wonder who the titles on Belmont and Melton Tce were assigned to.

I did hear some scuttlebutt that Julie Cassimatis was a buyer at auction of some of the Storm bling from the headquarters of Storm at the Storm Central Headquarters at the Sturt St. Taj Mahal in Townsville. 

Perhaps there may be accounts that will enable Julie and Manny Cassimatis to set up another cutting edge Financial Advice Service without the inconvenience of bankruptcy.

It is so inconvenient to be broke.

So I think we would agree that the jet should be considered to be worth zilch.

It would be interesting to know the title names on other assets.

Where are investigative reporters when you need them? 

I shall instruct the yardie to pursue this conundrum.

gg


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## SJG1974 (13 December 2011)

Harleyquin said:


> It's 'interesting' to read the discussion on education seminars and percentages of clients being sucked in or walking away.  What about the majority who went to storm asking for low risk individual advice and were told that's what they were getting.  Get some figures on the ones who were cheated and lied to and we might see some different scenarios.




It would be fair to assume that everyone who walked through their doors was fed the same line, whether that line was truthful or lies.  So if you are saying you were lied to, then you could probably assume that 100% of attendees at Storm's education sessions were as well.  

However, as we have seen, not all of those people believed the lies, or they at least had enough doubt in their mind (and common sense) to realise that borrowing over and over again and investing the whole lot in shares was not a low risk strategy, despite what they may have heard form Storm. Perhaps they could see the forest for the trees?


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## Frank Ainslie (13 December 2011)

Julia said:


> So you have now assumed the role of deciding who may say what on this forum.
> What on earth gave you the idea that you are in any position to dictate the terms of how other members post?
> Don't be so ridiculous.




Do I sense an air of defensiveness in your response?

People have every right to say what they want on this forum but such views needs to be based on the facts or they have no substance. You and others have consistently insisted that we are partly to blame. I have now presented you and those others with an opportunity to provide your reasons for doing so that are based on the legalities involved. If you cannot back up your views with legal argument, your views are somewhat pointless, don't you think?


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## Ijustnewit (13 December 2011)

Julia said:


> So you have now assumed the role of deciding who may say what on this forum.
> What on earth gave you the idea that you are in any position to dictate the terms of how other members post?
> Don't be so ridiculous.




???????


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## doobsy (13 December 2011)

Frank - to further the knowledge on the forum - you outline in your previous post

* making false and misleading statements in breach of s1041E of the Corporations Act 2001,

Can you elaborate on what Drummond told you that ASIC found to be false and misleading.

* engaging in misleading and deceptive conduct under s1041H of the Corporations Act 2001,

Happy to hear more about what was found here.

* promoting the Storm strategy without considering the suitability of the strategy for individual clients,

Think everyone on the forum agrees that the strategy was suitable for about 1% of the client base.

* providing Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, 

Was this the old data about property returns etc? 

and
* didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.

Think that just makes him a dud adviser doesn't it?


If you can expand on what ASIC found for the forum that would assist others in their understanding.


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## DocK (13 December 2011)

SJG1974 said:


> It would be fair to assume that everyone who walked through their doors was fed the same line, whether that line was truthful or lies.  So if you are saying you were lied to, then you could probably assume that 100% of attendees at Storm's education sessions were as well.
> 
> However, as we have seen, not all of those people believed the lies, or they at least had enough doubt in their mind (and common sense) to realise that borrowing over and over again and investing the whole lot in shares was not a low risk strategy, despite what they may have heard form Storm. Perhaps they could see the forest for the trees?




My experience with storm is possibly not a typical one, but the "education" process for me was certainly not 6 months.  Good friends of ours had been investing with storm for many years and had done very well (yes, yes, I now know it was a raging bull market and most people in the market were doing very well, but they seemed to be getting better returns than other friends of ours with a different FP.  Incidentally, the other couple with the more conservative planner were also left in the  market and had to meet a margin call - they just didn't have the extreme level of debt.)

Another friend and I went to a seminar they held at the Gold Coast - I'd say there were a couple of hundred people there.  This session consisted entirely of numerous graphs, charts etc all based around the perils of inflation eroding your $'s spending power if it's not put to work, the real cost of goods given differing tax rates and the poor performance of property vs shares using historical data.  Some discussion was also held on the benefits of investing in the market as a whole, rather than individual shares, with some emphasis on how this was a very low risk approach to investing in shares.  I do not recall any discussion re borrowing to invest.  For me, this was not covered until our subsequent private consultation.

Then we all trooped out to the balcony for lunch, where the storm salesmen did their thing.  I'd assume this would be standard industry practice - no point going to the expense of putting on a seminar if you're not going to use it to 'suss out the most likely targets.  And no, GG, I'm pretty sure I was only breathing the Marriott's air, undiluted with additional oxygen   I have no idea what % of the audience went further with storm - but I do know that as is common with any seminar on the Gold Coast there were the usual seniors there for the free lunch and aircon and nothing more.

My friend and I had already grilled our mutual friends who had been with storm for years, and this was the only seminar or group "education session" we ever went to.  We both arranged private appointments with the local storm planner, and went from there.  For me, the entire timeframe from seminar to being in the market was about 1 month - but I do have to repeat that I was probably not typical of the "average storm investor" as I had a pretty good grasp on how the process worked and was already predisposed to going ahead with them based on the information obtained from my friends.  Actually, maybe I'm quite typical as a lot of their business was via referral??

Luckily for the friend who went to the seminar with me, she and her husband had other business plans they were considering so only invested a very small amount via storm without any margin loan.  Maybe if I'd been less impulsive and impatient to get into the market and had actually sat through 6 months of "education" I would have had second thoughs myself - impossible to answer honestly in hindsight and an exercise probably best avoided for my own peace of mind's sake


----------



## Frank Ainslie (13 December 2011)

Garpal Gumnut said:


> To be fair to Frank, you are looking at it with hindsight.
> 
> Many Storm investors were so taken with the "message" that they tried to beam their good fortune to friends and families. It had all the characteristics of a cult, really.
> 
> ...




Hi gg!

Yes, hindsight is a wonderful thing but aren’t the detractors also looking at everything in hindsight? 

It's true that if the market hadn’t crashed none of us would have been aware of what was going on. There’s no denying that! Indeed, many of us were not aware of what was happening behind the scenes in late 2008. How could we? 

Does that however make Storm or the Banks less culpable in their behaviour? Consumer laws and common law principles have evolved over the course of time to protect consumers from this type of behaviour. Stormies' _"rights" _under these laws have been violated by both Storm and the Banks involved. Therefore, it’s immaterial whether the global financial crisis occurred or not. The fact is that it did and by so doing, it exposed the malpractices that were taking place. If such malpractices did not occur, Storm and the Banks wouldn't now have a case to answer today!

This issue is not about what may have been but rather about what actually took place that contributed greatly to Stormies’ losses. 

*Misleading and deceptive conduct cannot be excused under any circumstances, nor can the Corporations Act breaches that relate to this matter.*

Again I will repeat that the _“mindset”_ of those that invested using the services of Storm Financial is not an issue here – malpractice is the overriding consideration. ASIC, the ‘Worrells’ enquiry, the PJ-C findings and the new regulations that have been put in place bear testimony to this. 

The law is very clear! Any one party cannot contract with another by using deception because the other party is not then *freely agreeing to the terms of the contract*. Further if that agreement is a financial one, it is subject to any consumer laws that are in place. In law  “misrepresentation” arises when deception is used and anyone so deceived has a legal recourse. They also have recourse through the Regulator where breach of consumer laws are concerned. That’s exactly where we Stormies now find ourselves. It is senseless therefore for people to maintain that we freely entered into agreements with Storm. Their failure to see this highlights their lack of knowledge where the law is concerned.


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## doobsy (13 December 2011)

Dock - great post filling in some of the mindset at the time. Tough to stay away from the herd when it is stampeading.

Frank - again with the agenda - you have a go at others about saying the same thing ad nauseaum but for me I am reading the same thing from you written in a different way over and over again.

A question for you - including the first monies put into the market - how many times did you then invest further? I would have to expect in 2008 they would have been tapping your 'cash dam' to keep the balooning LVR under some sort of control. Each time would have involved an advice doc saying "we are putting more into the market" would it not?

Could you not have said "NO MORE" I will sell investments now to lower my LVR rather than risk more of my dwindling cash?


----------



## SJG1974 (13 December 2011)

Thanks for the insight DocK.


----------



## SJG1974 (13 December 2011)

Frank Ainslie said:


> Hi gg!
> 
> Yes, hindsight is a wonderful thing but aren’t the detractors also looking at everything in hindsight?
> 
> It's true that if the market hadn’t crashed none of us would have been aware of what was going on. There’s no denying that! Indeed, many of us were not aware of what was happening behind the scenes in late 2008. How could we?




Unless you didn't have access to a television, radio or newspapers during 2008, then you would have realised that we were suffering from a major financial event that was affecting the sharemarket terribly.

The All Ords fell from 6,853 on 1 November 2007 to 5,052 on 31 July 2008, a fall of 26%. This wasn't some secret that only the financial professionals knew, it was everywhere.  The news every night quotes the All Ords.  It is in the papers.  It was on the front page, and yet you weren't aware????? Were you living in a cave during all of this?

  Now I assume at that time, with your portfolio having fallen in value by much more than 26% due to the level of gearing, you still didn't see any risk?  This conservative strategy you agreed to was still conservative?

The market then dropped like a stone between then and when you were sold out, falling by a further 26% or so.  The Black Swan even that Manny called it.

So Frank, When did you realise that this "low risk" strategy was anything but?

- When you first borrowed against your home?
- When you borrowed further as part of a margin loan?
- When all of your borrowed money and investment capital was invested 100% into shares?
- During the bull market when your investments were growing faster than everyone else's?
- When you saw that the market was falling and the value of your geared portfolio was falling faster?
- When the media coverage of the GFC and the financial meltdown reached its peak?
- When Storm came to you and told you to pump more borrowed money into your portfolio when the value was so greatly depressed?
- when the final margin call was made which saw you in negative equity?

It seems to me the warning signs were coming thick and fast that this "conservative" strategy wasn't anything of the sort.  We know Storm ignored the warning signs.  But it was your money they were playing with Frank, you could have stepped in and said "enough".  But for whatever reason you chose not to, and now you claim ignorance and blame the contractual arrangements between the banks and Storm 100% for your loss!  

With this mentality, I am truly amazed you walked into Storm with over $1,000,000 in assets in the first place.


----------



## Frank Ainslie (13 December 2011)

doobsy said:


> Frank - to further the knowledge on the forum - you outline in your previous post
> 
> * making false and misleading statements in breach of s1041E of the Corporations Act 2001,
> 
> ...




Hi Doobsy,

Most of your questions have been covered by me in previous postings. Our particular case has not only been mentioned in the media but it was also referred to in the ‘Worrells enquiry’ as an example of inappropriate advice that was at odds with what our circumstances demanded and was directly opposed to our expressed wishes.

I do not want to dwell on inappropriate advice, however, because this is only one of the issues involved. Financial advisers have a responsibility to give appropriate advice but I will not discuss this particular aspect because I know it will only attract the sharks!

As I have stated previously, deception is the key here and I will tell you one thing that we were misled on from the start – the safeguards that Storm claimed to have in place that persuaded us in large measure to sign up with them.  

On the 27th July 2007 in the letter I wrote to Stuart Drummond I stated among other things, _“Would you clearly state in in writing that the statement contained in your financial plan on page 62; namely, ‘If the market index moves through your trigger point, simply call us and we will review your position in light of the new market conditions" is incorrect.’ During our recent meeting you assured us that you, not we, would be monitoring this. Bear in mind that we decided to use your services once you had clarified this for us. We need something in writing from you before we proceed any further that you accept responsible for so doing”_

_Bear in mind, Stuart, that we will be entrusting Storm Financial with a great deal of money. We therefore expect to be fully informed at all times. _

Despite our repeated requests he never did acknowledge this in writing although he verbally reconfirmed this every time we met. We signed up on the understanding that this written confirmation would be forthcoming. 

So it’s our word against his you might think! The subsequent events that took place will prove that this conversation as claimed by us did take place.

In December 2007 Drummond sent me a draft of Storm's new Statement of Advice because, being a writer myself and a former corporate man as well, he wanted my opinion of such. In my reply to him dated 13th December 2007 among other things I once again queried the SOA because it contained certain statements that were contrary to what we had originally agreed to prior to our signing with Storm.

I quote, 

_“Page 48 – ‘You will be informed of your triggerpoints… If the market moves through your triggerpoint, simply call us…’ You may recall that this was my bone of contention in a previous letter in which I stated "It states clearly in writing in your Statement of Advice - page 62 (current SOA) that if the market index moves through your trigger point, simply call us and we will review your position in light of the new market conditions.'  In your subsequent discussions with both Helen and me, you said this statement in the SOA was wrong and the trigger points are activated by Storm's systems automatically and you (Storm) then notify us.”_

Again, Drummond did not confirm this! Remember that _“silence”_ in matters such as these is no defence legally. However, there’s more!

On 30th April 2008 I received a faxed letter from Jodie Geissman in Storm’s compliance section in Townsville which said, _“I would like to take this opportunity to thank you for your input into our new ‘Statement of Advice’. Your input was invaluable and since receiving it, we have been busily making improvements to the document.” _

Anyone reading this should bear in mind that I proof-read this document and altered in part the structure and presentation of certain data but not its content. How could I because I am not a financial adviser!

In essence her response confirms the fact that my suggestions contained in my letter dated 13th December which also queried _“triggerpoints” _had been sent to her via Drummond. Therefore, he must have read it! He cannot therefore say that such a conversation never took place because he had an opportunity to deny it at that time. That’s enough in any court, I believe, to provide proof that Drummond did actually say this. ASIC certainly believed us! 

My previous statement, _“Bear in mind that we decided to use your services once you had clarified this for us!”_ also emphasizes how much reliance we placed on this statement being true, and the importance we also placed on monitoring for safety purposes. We now know that Storm’s software was defective when we contracted with Storm and this should have been apparent to them at that time. Common-sense tells us that Storm's directors and advisers knew full-well the capability of the software they were using and chose to ignore it flaws. How could Stormies know this? In fact, they were informed otherwise.

Frankly, in retrospect, I believe tStorm's SOA’s were deliberately written in such a way that they wanted to shift any responsibility to their clients if the s**t hit the fan. As I said at the time to Helen, _“It seems strange that a firm that has been in the business of giving financial advice for so long cannot get a simple SOA right?” _

As for Drummond, if you now consider him just a dud adviser you had better inform ASIC and the people that were his clients. They have another word for him and it's not pleasant!


----------



## Garpal Gumnut (13 December 2011)

A BREATH OF FRESH AIR... STORM'S WORD OF MOUTH REFERRAL RATE IS 75%... STORM FINANCIAL - YOUR GOOD FORTUNE... FREE EDUCATION... STORM'S CLIENT RETENTION RATE IS 99%... SHARES VS. FUNDS - PHONE STORM FOR NO OBLIGATION CONSULTATION...

From the website.

http://207.210.106.29/index.php

gg


----------



## doobsy (13 December 2011)

OK Frank

Understand you don't want to be repeating yourself but I was trying to get out into the forum more specific information around mostly the top two points on the Corps act breaches.

This along with the UMIS will be where Storm clients either have a big win or a big loss so felt it was important to be specific rather than generalise simply based on your singular experience and successful ASIC prosecution of Drummond.

As the UMIS will be a fight against both Storm and the banks, this one will be dragged out over MANY years whereas proving the advisers were negligent brings in the PI Cover. I know this cover was inadequate but it might mean clients get at least a partial payment to keep them going.

I am not looking to open the UMIS argument up again, I think that both sides will have quite valid arguments for and against and it will be a much higher court than the forum that will make the eventual decision.


----------



## SJG1974 (13 December 2011)

Frank Ainslie said:


> On the 27th July 2007 in the letter I wrote to Stuart Drummond I stated among other things, _“Would you clearly state in in writing that the statement contained in your financial plan on page 62; namely, ‘If the market index moves through your trigger point, simply call us and we will review your position in light of the new market conditions" is incorrect.’ During our recent meeting you assured us that you, not we, would be monitoring this. Bear in mind that we decided to use your services once you had clarified this for us. We need something in writing from you before we proceed any further that you accept responsible for so doing”_
> 
> _Bear in mind, Stuart, that we will be entrusting Storm Financial with a great deal of money. We therefore expect to be fully informed at all times. _
> 
> Despite our repeated requests he never did acknowledge this in writing although he verbally reconfirmed this every time we met. We signed up on the understanding that this written confirmation would be forthcoming.




Why Frank, when you told Drummond you wouldn't proceed any further until you got something in writing, did you then do so? WHY????????

Wouldn't this whole thing have been triggering alarm bells in your head?  Why would you proceed with them if they couldn't satisfy this basic request? Why didn't you tell him where to stick his conservate strategy? You were under no obligation at that point were you?

Again, I find it amazing that you keep throwing up these instances where you have been wronged, yet take absolutely no responsibility for the choices you made!   You were reckless in the way you treated your own money Frank....can't you see that????

Add the above to the list of warning signs I made in my previous post....I am sure there are plenty more.


----------



## DocK (13 December 2011)

Frank Ainslie said:


> My previous statement, _“Bear in mind that we decided to use your services once you had clarified this for us!”_ also emphasizes how much reliance we placed on this statement being true, and the importance we also placed on monitoring for safety purposes. We now know that Storm’s software was defective when we contracted with Storm and this should have been apparent to them at that time. Common-sense tells us that Storm's directors and advisers knew full-well the capability of the software they were using and chose to ignore it flaws. How could Stormies know this? In fact, they were informed otherwise.




I was also assured, verbally, by my adviser, that state of the art systems were in place to monitor clients' portfolios and assured that storm HQ would ensure my adviser would be made aware if any trigger points were reached.  During discussions it was pointed out that the trigger points were in the SOA so that those clients who wished could keep track themselves, but the implication was certainly that it was not necessary - there was always that emphasis that "we're looking after everything, safeguards are in place, we have the technology!!!"  It certainly seemed to work perfectly when a further investment was recommended!


----------



## Frank Ainslie (13 December 2011)

SJG1974 said:


> Unless you didn't have access to a television, radio or newspapers during 2008, then you would have realised that we were suffering from a major financial event that was affecting the sharemarket terribly.
> 
> The All Ords fell from 6,853 on 1 November 2007 to 5,052 on 31 July 2008, a fall of 26%. This wasn't some secret that only the financial professionals knew, it was everywhere.  The news every night quotes the All Ords.  It is in the papers.  It was on the front page, and yet you weren't aware????? Were you living in a cave during all of this?
> 
> ...





Stop avoiding the question I posed. You are not fooling anyone! Respond with a viewpoint based on the legal issues and stop digressing. You are a master at it but no one is being taken in! You don't have an answer do you? I think we have now got your number my friend. No one is listening any longer to your material. As was suggested earlier by another poster, I think it would be a good idea to change channels. 

_“Who is more foolish, the child afraid of the dark or the man afraid of the light?”_


----------



## SJG1974 (13 December 2011)

Frank Ainslie said:


> Stop avoiding the question I posed. You are not fooling anyone! Respond with a viewpoint based on the legal issues and stop digressing. You are a master at it but no one is being taken in! You don't have an answer do you? I think we have now got your number my friend. No one is listening any longer to your material. As was suggested earlier by another poster, I think it would be a good idea to change channels.
> 
> _“Who is more foolish, the child afraid of the dark or the man afraid of the light?”_




Thanks for the advice Frank, but given your experiences with Storm, I would be a fool to take advice from you don't you think?

Save your legal stoush for the courtroom Frank.  I am not interested in that...you have bombarded the forum with your legal views ad nauseum. And I certainly won't have you dictate to me what I can and can't post in here, thats for sure.

You have failed to answer the most basic of questions time and time again Frank...and now you want me to play your little game?  You are a card Frank.

The warning signs were there, right from the start, but you chose to ignore them. What's that saying...A fool and his money are soon parted?

Please do me and others a favour and stop trying to cover up your own contributory negligence by blaming everyone else for the actions you took and the choices you made.

You are 70 years old Frank...perhaps its time to take some responsibility don't you think?


----------



## DocK (13 December 2011)

http://www.youtube.com/watch?v=jYa1eI1hpDE&ob=av3e

Here's a catchy little tune for everyone's enjoyment.


----------



## SJG1974 (13 December 2011)

DocK said:


> http://www.youtube.com/watch?v=jYa1eI1hpDE&ob=av3e
> 
> Here's a catchy little tune for everyone's enjoyment.




Thanks DocK, that is a catchy tune. Taylor Swift doesn't usually do it for me (her music that is), but that seemed to strike a chord for some reason.

In Frank's defence, while he has been mean to me, I haven't taken it to heart.


----------



## Frank Ainslie (13 December 2011)

SJG1974 said:


> Thanks for the advice Frank, but given your experiences with Storm, I would be a fool to take advice from you don't you think?
> 
> Save your legal stoush for the courtroom Frank.  I am not interested in that...you have bombarded the forum with your legal views ad nauseum. And I certainly won't have you dictate to me what I can and can't post in here, thats for sure.
> 
> ...




_"Save your legal stoush for the courtroom Frank. I am not interested in that...you have bombarded the forum with your legal views ad nauseum."_

Legal stoush is what this is all about. Without having laws in place there would be total anarchy which would probably suit you. You have been pontificating your views 
on this forum for long enough. No one has brought you to account before. Now's the time to present your viewpoint based on the facts of this case rather than banal commentary.

In fact, it is you that has continually bombarded this forum ad nauseum with your uninformed opinions. I don't know how old you are but stop acting like a petulant child because suddenly you are asked to provide a case for your constant assertions that we are somehow partly to blame. You remind me of the school bully that is suddenly confronted with someone that is prepared to fight back and you have been caught off guard. If you can't take it, don't try to dish it out! 

Answer the question I have asked. Explain your position from a legal perspective. After all, Stormies' legal position is the only one that will really count in the end - not your distorted view of things according to SJG 1974. We are waiting!

It's no longer a game, is it? Suddenly, someone has put you on the spot! Defend your position or forever hold your peace. What's it to be?


----------



## Julia (13 December 2011)

DocK said:


> I was also assured, verbally, by my adviser, that state of the art systems were in place to monitor clients' portfolios and assured that storm HQ would ensure my adviser would be made aware if any trigger points were reached.  During discussions it was pointed out that the trigger points were in the SOA so that those clients who wished could keep track themselves, but the implication was certainly that it was not necessary - there was always that emphasis that "we're looking after everything, safeguards are in place, we have the technology!!!"  It certainly seemed to work perfectly when a further investment was recommended!



 So they created perfect reassurance for you but took care to ensure it was only verbally offered and - going by their lack of responsiveness to Frank's repeated requests - absolutely not in writing.   They certainly had a plan - for themselves.


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## Julia (13 December 2011)

Frank Ainslie said:


> Do I sense an air of defensiveness in your response?



  Oh, the irony.   You fill page after page with denial and defensiveness and then attempt to project this on to me.


This is a stock market and investment forum.
Not a legal forum.
It's for discussion, the sharing of knowledge, and exchange of views.

We are under no obligation to offer legal views.  As non-lawyers it would be foolish to attempt to do so.

We are, however, entitled to offer our observations about risk management and simple common sense.


----------



## Ijustnewit (13 December 2011)

Well Frank no one seems to want to take your challenge based on the fact the are not legal people and admit they know little about the law.
So we must assume that when needed those same people seek out a lawyer or someone that is familiar with the law when they need help.
Should they not be self educated in Law and know what they are signing, the same way the Investors should have been self educated in Financial Planning and knew what they where signing? Interesting .


----------



## Frank Ainslie (13 December 2011)

Ijustnewit said:


> Well Frank no one seems to want to take your challenge based on the fact the are not legal people and admit they know little about the law.
> So we must assume that when needed those same people seek out a lawyer or someone that is familiar with the law when they need help.
> Should they not be self educated in Law and know what they are signing, the same way the Investors should have been self educated in Financial Planning and knew what they where signing? Interesting .




Hi Ijustnewit,

Welcome to the debate!

What with ‘Igetit’ and ‘Ijustnewit’, I wish I had now called myself ‘Ijustlostit’ because it seems more apt somehow.

What an inciteful question. I think you have just aced them!, I only wished I had thought of that! Any more of those pearls and you will face banishment. 

It really is a good point though and it poses the question, _"Is it okay to rely on the advice of a lawyer but not on the advice of a financial adviser?"_ Perhaps Doobsy would like to answer this?

Keep the juices flowing! We need you.


----------



## Frank Ainslie (13 December 2011)

Julia said:


> Oh, the irony.   You fill page after page with denial and defensiveness and then attempt to project this on to me.
> 
> 
> This is a stock market and investment forum.
> ...




_"This is a stock market and investment forum. Not a legal forum. It's for discussion, the sharing of knowledge, and exchange of views."_

Need I remind you that this forum is about Storm Financial and by association, the Banks that were connected with it. Who best then to comment on such? You who were never involved or people that were and know first hand what transpired? 

_"We are under no obligation to offer legal views. As non-lawyers it would be foolish to attempt to do so."_

Yet, you are continuously offering financial advice to HQ and others and you are not a financial adviser? Have I missed something here?

If you take the legalities out of this debate, you nullify any discussion about Storm and the Banks. It just then becomes a backslapping forum for those that want to inform all and sundry that they are far too clever to be caught up in all this. What does that achieve other than making these people feel good.

There are lessons to be learnt from the Storm debacle but they can only be learned from looking at what really occurred and the causes behind such. Not as you and some others would have everyone believe by focussing on the advice Storm gave but rather on the wrongdoings that took place by Storm and the Banks. 

Arguing that the Storm investors were partially responsible is a personal view that has so far not been backed up by any evidence. Whilst you are entitled to your views, if you are to be taken seriously, you must supply some hard proof. To date neither you or anyone else has done so. You constantly harp on about the advice Storm gave and the Stormies' mindset in choosing to accept such.  Yet, you conveniently ignored the various transgressions that have taken place which have infringed on the rights of those Storm investors. 

ASIC and our lawyers are not taking those involved to court because they have nothing better to do with their time, or we have nothing better to do with the little money we have left. Further, to my knowledge, no one is taking us to court as well for being part of all this so why should we therefore admit to or share in any blame?. Litigation has been brought about to compensate those Storm investors who were caught up in the schemes between Storm and the Banks. There are numerous legal issues involved so it is not a straight-forward case by any means.

It should also be understood that compensation through our legal system is only permissible  when people have suffered a loss that could have been avoidable and resulted directly from another party or parties’ actions. 

"We are, however, entitled to offer our observations about risk management and simple common sense."

Yes, you are entitled to offer observations about risk management and commonsense but we on the other side of the fence are also entitled to defend ourselves if you persist in putting us in the dock with those that have been charged. We are not the guilty ones but you and others want to label us as being partially so?

I believe that this forum can best serve those that tune in because they want to know what really happened between Storm and the Banks. They don’t want to be bombarded with the views of people that want only to gloss over the facts and ignore anything relevant that doesn’t agree with their view of things. You can’t have a worthwhile debate until people understand all the facts and are able to look at things objectively. I am aware that some on this forum will never reach that point because they are simply incapable. Therefore, I am not posting for those forum members but rather for those that want to genuinely understand the issues and the real story behind the Storm debacle. 

Whatever, Julia, unless you are willing to come to grips with the legal issues, you can never come to terms with the story of Storm and the Banks. The story will always remain incomplete! It’s as simple as that!


----------



## doobsy (13 December 2011)

Frank Ainslie said:


> Hi Ijustnewit,
> 
> Welcome to the debate!
> 
> ...




Not sure Frank - if the lawyer tells me it is ok to do something that is a bit dodgey because that means he can charge me extra if I do it then I guess I should get a 2nd opinion.

And if I get arrested the I will blame him and not a 3rd party that talked to him once. Sorry, that was just a little tongue in cheek


----------



## doobsy (13 December 2011)

Frank

Again to be devils advocate and keep the entertainment high but:


So far no UMIS has been proven
Just because ASIC and some ambulance chasers have started an action does not make it so

So until that time, cannot others on the forum be allowed to take differing positions and offer comment based on what is at hand (not what has yet to be proven).

This being the case, we are down to the advice and relationship between adviser and client.

If/When we have an answer on the decision about the relationship between the banks and storm, then we can offer opinions based on that new information. 

You want us to take the position based on an assumption the banks are guilty as charged - this is not yet the case.


----------



## SJG1974 (13 December 2011)

Frank Ainslie said:


> _"Save your legal stoush for the courtroom Frank. I am not interested in that...you have bombarded the forum with your legal views ad nauseum."_
> 
> Legal stoush is what this is all about. Without having laws in place there would be total anarchy which would probably suit you. You have been pontificating your views
> on this forum for long enough. No one has brought you to account before. Now's the time to present your viewpoint based on the facts of this case rather than banal commentary.
> ...




I am not sure what you are trying to achieve here Frank? Why do you want me to pretend I am in court and defend my position? This does seem like a game.  Who are you…Perry Mason?  Can I be Matlock?

I don’t need to defend myself…I am not even sure what I am supposed to be defending?  Using common sense? Do I have to defend that?  Of that I am guilty your honour!

Despite your misguided view, no one is saying you are guilty in the eyes of the law.  What you are guilty of is a lack of common sense, and despite my knowledge of the law not being as thorough as yours, I am pretty sure that is not illegal.  So no, I won’t play your silly little game…this is not a court, this is an investment forum.  If you want to play Court 101, get idontgetit around and you can play to your heart’s content. You can wear your wigs and have a jolly old time.  Whatever floats your boat Frank. 

All I have done throughout my posts is point out to you the various decision points that you arrived at during your time with Storm.  At each of these points, you and Helen had a choice to make.  The choices weren’t made by Stuart Drummond or Manny or the bank manager, they were made by you. I am not sure how you can even dispute this, yet you seem determined to at every opportunity.  Perhaps it is easier for you to cope with the bad decisions and choices you made by remaining in complete denial.  I understand stress can cause irrational behavior, and I am guessing with what you have been through you would be highly stressed. That’s to be expected when you have been financially devastated.  

All of the decision points that I have pointed out throughout the forum, from being recommended to borrow against your home, to investing 100% in shares, to borrowing over and over and over again, to just hanging on while the market slowly wiped you out, dollar by dollar, day by day, came before you were ultimately wiped out. At each point, you had a choice to do something else that could have potentially saved you money, but you chose a different course.  Others chose a different path and are now like me, sitting on the outside looking in.  The arrangement between the bank and Storm had no bearing on your ability to make your own choices Frank, regardless of how legal or otherwise it was.

You chose to follow what Storm told you, even though all of the evidence suggested that there were massive risks involved.  That Frank, is how you contributed to your own undoing. And it is as obvious as the nose on your face. 

I mean, you expect us to believe that in all of your years in business, you didn’t realise that borrowing money from the bank was risky?  That investing in the sharemarket is risky?  I knew that by the time I left primary school Frank.  Don’t insult me and others by claiming you didn’t understand what you were doing.

You are either terribly naÃ¯ve or a liar Frank, and I doubt you could have found yourself in the position you were in pre-Storm by being that naÃ¯ve. 

Its not easy admitting that you were greedy is it?  I have been there before…thankfully it didn’t wipe me out.  Lesson learned the hard way. It seems you don’t even know what the lesson is, let alone learn from it.  That’s a worry Frank.

You made the choices Frank that led to your demise. No one else made them for you. Yes other parties contributed as well, but if it wasn’t for the choices YOU made, you wouldn’t be here.  You would be sitting on the outside looking in with me, rather than trying to get me to play your silly courtroom games.

But again, don’t insult me and other posters by claiming you had no choice in the matter Frank and didn’t know there were risks involved…you don’t get to 70 and have a successful business career without having some idea do you?


----------



## Frank Ainslie (13 December 2011)

SJG1974 said:


> Why Frank, when you told Drummond you wouldn't proceed any further until you got something in writing, did you then do so? WHY????????
> 
> Wouldn't this whole thing have been triggering alarm bells in your head?  Why would you proceed with them if they couldn't satisfy this basic request? Why didn't you tell him where to stick his conservate strategy? You were under no obligation at that point were you?
> 
> ...




Keep rattling your cage! With a bit of luck, before long we'll hear the death rattle!

Give us some answers! State your case! I know! You have to go and do some more _"cut and paste!"_ Let me guess! _"I find it quite incredible..."_ You have used that word _"amazing"_ long enough! I quite agree! Now go off and study some law books and confound me with your brilliance!


----------



## Garpal Gumnut (13 December 2011)

Frank Ainslie said:


> Keep rattling your cage! With a bit of luck, before long we'll hear the death rattle!
> 
> Give us some answers! State your case! I know! You have to go and do some more _"cut and paste!"_ Let me guess! _"I find it quite incredible..."_ You have used that word _"amazing"_ long enough! I quite agree! Now go off and study some law books and confound me with your brilliance!




Frank mate,

I feel you need to go off and have a shower mate.

You are making little sense.

The posters are a tad unfair to you but you are losing the argument.

As Julia has pointed out this is a share/investment site where we share our hopes, successes and failures.

I am sure you can justify your actions in investing in Storm, but basically nobody gives a rats, once it has been posted.

Many of your points are good, but so are those of the posters who disagree with you.

Please continue to post but listen and look at the comments of your fellow posters. I find gems every day in the posts on ASF, even though I may disagree with where the posters are coming from.

gg


----------



## Frank Ainslie (13 December 2011)

doobsy said:


> Frank
> 
> Again to be devils advocate and keep the entertainment high but:
> 
> ...




Doobsy,

Again to be devils advocate and keep the entertainment high but:

_1. "So far no UMIS has been proven"_

True but it doesn’t mean that we can’t talk about it!

_"2. Just because ASIC and some ambulance chasers have started an action does not make it so"_

No! But it’s a good start though. I don’t think the ‘Worrells’ enquiry, the PJ-C findings, the millions of documents that ASIC is currently processing incriminating Storm and the Banks and the fact that the Regulator has moved against Storm and the Banks can be regarded as a whim, do you?  You are certainly a hard man to please and no mistake!

As for your describing the lawyers involved as _"ambulance chasers”_ can you tell me any lawyers that aren’t? . 

Whist we are keeping the entertainment light, _“What do you call a financial adviser riddled with bullets?  A good start!” _You see! I can be humorous too when the mood takes me!

_“So until that time, cannot others on the forum be allowed to take differing positions and offer comment based on what is at hand (not what has yet to be proven).”_

If you want to keep this discussion just to Storm and leave the Banks out of this, or leave the legal issues out of it for that matter, then any forum debate will become meaningless. They are all inter-connected and the big picture can only be seen if all aspects are discussed. Isolating any one aspect will merely lead to a disjointed discussion that benefits no one.

I agree, _"nothing has yet been proven" _other than the fact that Drummond shafted us!

_“This being the case, we are down to the advice and relationship between adviser and client.”_

That's been done to death. If you haven't got a handle on it by now, you never will!

_"If/When we have an answer on the decision about the relationship between the banks and storm, then we can offer opinions based on that new information."_

We don’t have to wait for any decision about Storm and the banks. We already know enough to discuss this relationship fully. What do you want to know? What will the Banks’ defence be for instance? 

_"You want us to take the position based on an assumption the banks are guilty as charged - this is not yet the case."_

Does it matter? The Cassimatises have not yet been found guilty as charged either but you have been discussing Storm since the collapse. What’s the difference?

Unless this discussion can move forward to the Banks’ part in all this, the debate will remain in dry-dock. Your choice!


----------



## Frank Ainslie (13 December 2011)

Garpal Gumnut said:


> Frank mate,
> 
> I feel you need to go off and have a shower mate.
> 
> ...




Okay GG! You can pass this on to SJG 1974 for me! I think he may have blocked me because he's feeling the pain! 

It might be worth bearing in mind though that SJG 1974 has been dishing it out for some time and I have never seen any reprimand yet of his behaviour.  Perhaps if he can contain himself, we can do likewise? 

Hi SJG 1974!  Good year that!

_"You made the choices Frank that led to your demise. No one else made them for you." 
_
Let me spell it out for you once more! Unless we made that choice *"freely"* we cannot be held to blame! Don't you get it still? 

No matter, you have now conceded that we are not guilty in the eyes of the law so that’s fair enough.

Besides GG has asked me to be kind to you! I will endeavour to do so!

_"Despite your misguided view, no one is saying you are guilty in the eyes of the law.  What you are guilty of is a lack of common sense!"_ 

Our not being guilty in the eyes of the law is all that matters to us in the end! No disrespect intended but we don't give a stuff what you personally think. (Thanks GG!) I'm sure a number of forum members share your opinion of us. It's of no importance to us because it's not going to make one iota of difference to us in the end. 

What therefore are we arguing about? Whether we had any common-sense or not is irrelevant. Why therefore do you insist in repeating your opinion of us over and over. We've got the message *LOUD AND CLEAR*. Why you feel that you need to keep repeating it is beyond me.

Incidentally, if we are not guilty in the eyes of the law, we cannot be held to blame in any way That’s probably the reason we haven’t been charged to date. I can’t say I’ve ever heard of a case where the victims have also been charged with assisting in an assault on themselves but the law is a funny thing! You just never know!


----------



## Julia (13 December 2011)

> Yet, you are continuously offering financial advice to HQ and others and you are not a financial adviser? Have I missed something here?



Yes, obviously you have missed much.
At no stage have I offered financial advice to anyone, HQ very much included.
Show me where I have or just cease making unsubstantiated allegations.



> Arguing that the Storm investors were partially responsible is a personal view that has so far not been backed up by any evidence.



What???  You have conceded that you risked everything by double gearing into the sharemarket, and you actually claim that this is not evidence of partial responsibility?
Give me a break!
(and DocK, before you accuse me of being 'mean', perhaps consider that I'm simply responding to yet another repetitive piece of "challenge" by FA.)

I understand that the stress of being in the position you are must be overwhelming at times, but you seem to be losing any shred of objectivity here.

Whatever, it's your life, and your battle.  As previously stated, I'm just one of several interested onlookers.



> Whilst you are entitled to your views, if you are to be taken seriously, you must supply some hard proof. To date neither you or anyone else has done so.



Oh goodness, it gets worse.  Now you are asking us to 'provide proof' of your lack of risk management when you have clearly provided this yourself.
Take gg's advice, Frank, and have a break, maybe a cold shower and a lie down.



> You constantly harp on about the advice Storm gave



I harp on about Storm's advice?  I don't even really know what it was.  I have not 'harped on' about it.  I have commented today on your advice that they verbally assured you that they had systems in place to protect you.  Further, that you repeatedly asked for this assurance in writing, but they failed to provide this.
You still went ahead, however, apparently not hearing any alarm bells ringing when they failed to provide the assurance in writing.
That is what you have told us.  I simply remarked that Storm certainly had a plan - for themselves.

If that is 'harping on about Storm's advice' I would question your powers of interpretation and comprehension.



> Yet, you conveniently ignored the various transgressions that have taken place which have infringed on the rights of those Storm investors.



No, I do not.  Not being fully aware of what these transgressions might be, I have not commented on them.  I am not in a position to understand what the banks or anyone else may have done wrong.  You have made various assertions.  These, as far as I'm concerned, are not proven.  I await the eventual official outcome and hope justice will prevail for all concerned.



> There are numerous legal issues involved so it is not a straight-forward case by any means.



This is a clearly correct statement and why those of us who are purely onlookers have only commented on what we see as basic risk management and common sense, despite your challenges to present a 'legal argument'.



> I believe that this forum can best serve those that tune in because they want to know what really happened between Storm and the Banks.



I suspect that most people really couldn't care less what happened.  They are much too absorbed with running their own lives.  There is just this small core of us who have been interested from the start and/or personally affected.

I might be wrong, but I think many people reading this thread who have no involvement might do so in order to be aware of how necessary it is to always look out for someone who will use you in order to profit themselves.
You are by no means unique in this situation, as others have been in Westpoint and various other failures.



> Whatever, Julia, unless you are willing to come to grips with the legal issues, you can never come to terms with the story of Storm and the Banks. The story will always remain incomplete! It’s as simple as that!



 I couldn't agree more.  At present I am not in a position to understand what legal transgressions may or may not have occurred.  At this stage we only have your allegations.

Look, Frank, I get that you have been badly damaged, financially, materially and psychologically.  I'm genuinely sorry for you and anyone else so affected.  It's a totally miserable place to be in.  And I also get that by repetitively assuring yourself via this forum that you had zero responsibility in the matter, the misery feels a bit less acute.  I expect we have all gone through a similar psychological process in some situation or another in our lives.

I wish you well in moving on and eventually dealing with the reality.  You clearly have talents in various directions.


----------



## tigerboi (14 December 2011)

*dock check out the how to embed a youtube video*



DocK said:


> http://www.youtube.com/watch?v=jYa1eI1hpDE&ob=av3e
> 
> Here's a catchy little tune for everyone's enjoyment.




dock put the yt brackets around the last 11 characters with the last yt bracket put a / before the start of youtube.(i think there is a thread on how to embed a yt video?
kewl...TB


----------



## Solly (14 December 2011)

> *"Betrayed investors tell their story*
> 
> VICTIMS of the collapsed Storm Financial have taken investor activism to a novel level, funding a documentary to tell their own story of trust betrayed and alleged improper relationships between Storm and the banks that contributed to an estimated $3 billion in losses."




More by Leonie Lamont @ brisbanetimes.com.au ,
including some grabs from the documentary, _Piggy Banks_.


----------



## Garpal Gumnut (14 December 2011)

Solly said:


> More by Leonie Lamont @ brisbanetimes.com.au ,
> including some grabs from the documentary, _Piggy Banks_.






> As for Storm founder Emmanuel Cassimatis, the investors recall he was always on hand - turning up to help them take partners to hospital, or even sending his mechanic to fix a car. Mr Cassimatis declined to appear on the video.
> 
> Read more: http://www.brisbanetimes.com.au/bus...their-story-20111213-1ot45.html#ixzz1gRseNkC3




If I'd known that I might have become a Storm investor as the Arnage is expensive to maintain.

What a decent human being, ole Manny.

gg


----------



## SJG1974 (14 December 2011)

Frank Ainslie said:


> Okay GG! You can pass this on to SJG 1974 for me! I think he may have blocked me because he's feeling the pain!
> 
> It might be worth bearing in mind though that SJG 1974 has been dishing it out for some time and I have never seen any reprimand yet of his behaviour.  Perhaps if he can contain himself, we can do likewise?
> 
> ...




No worries Frank.  The bit that gets me is that after all of your experience in business, and your years on this earth that you can still claim you did not know that borrowing against your house, borrowing again and again and plonking it all on the sharemarket was risky...that you thought this was a conservative strategy, just because Stuart Drummond told you so.  Thats what gets me. It just doesn't make any sense.

Anyways, I have said my piece (over and over and over ).  I wish you and other Stormies no ill will.  I wouldn't wish what you and others have gone through on my worst enemy.

You have a much bigger and more important fight on your hands than dealing with the likes of me on this forum..good luck with it all.


----------



## Frank Ainslie (14 December 2011)

*Here's some more information that strikes at the heart of Storm's motivation*

These are the comments of someone that worked in Storm and is now a friendly witness. 

_"I was disturbed when I read comments attributed to you _ (I will not give the name of the person he is writing to in order to protect that person's privacy) _regarding fees and commissions paid to financial advisors. It has been worrying me ever since, hence this letter.  It gave me the impression that you believed that it wouldn't have helped Storm Financial clients had these proposed new laws been in place before the Storm collapse." _

_I would like you to know that it was precisely this issue of ‘commissions’ which caused the demise of Storm Financial and thus their clients. 

The Cassimatis's great con was that Storm charged low trailing commissions and a large up-front fees. 

The "commission rate" may have been a little lower than some other advisor charges, however they were proud to point out that Storm got people to invest more than twice as much as other advisors (by convincing people to mortgage their homes, plunder their superannuation etc, and put all that into the 'market' and then leveraging with Margin loans) 

In effect Storm was making more than twice what other advisor groups were and receiving much more from commissions even with the supposedly lower rates. 

Storm's attempt to float the company was the source of their biggest sales push. The idea was to get clients to borrow more and margin up (thus increasing LVR's) to increase their commissions so that this increase in income would show that business strategies were sound and profitable. 

I believe the directors obsession of becoming billionaires so increased their greed that they took unnecessary risks with their clients security. 

The next driver for business was commission based incentives for advisors and staff to enjoy Storm Holidays. 

With the Global Financial Crisis marching on, the prudent thing would have been to manage their clients LVR's and convert to cash or other securities to protect them. 

Storm's commission income was already being reduced by the falling value of their clients investments. The directors did not want this income to reduce further, and so kept clients in the market with dangerously high LVRs. 

The further fall in the market caused hundreds of their most valuable clients to lose their entire investments. I need not mention the heartache, suffering and despair this has caused their clients. 

Had the proposed laws been in place regarding trailing commissions, the Storm model would never have been so viable, and Storm would have had to change it's business models to knowing and looking after their clients. 

There were Storm advisors, who's personal lifestyles depended on their ongoing commission cheques. This drove them to adhere strongly to Storm policy and recommend increases in borrowings and investments, even during the final days. 

I can't imagine what it would have been like as an advisor to have to tell their clients that they had lost their entire investment portfolios and in many cases, their homes. 

Storm should have been pro-active in ensuring client investments were safe and protected from 1 in 15 year market fluctuations. Storm's greed for commisions overode the practice of giving the best advice for their clients. 

I sincerely believe that the practice of commission based advice is seriously flawed for the consumer. The Financial Planning industry can still ensure a regular income from their clients by charging for service. Example: by providing up to date on-line information and recommendation in the form of platform fees etc. 

Storm's fatal policies loaded their clients with excessive debt and CBA etc just pulled the trigger. This entire mess will be costly for CBA etc, but let us not lose sight of who's greed put us in this position in the first place."
_


----------



## doobsy (14 December 2011)

I agree with a hell of a lot of that Frank and the best way is to put some numbers to it:

If storm had $5 billion in investor funds and were receiving a trail commission of 0.2% (forgive me on that figure but that is what I remember seeing - it could be wrong) then they had recurring income of $10 million as long as the monies were sitting in the funds.

To make the same amount again in upfronts meant they would need to write about $142M in new business (7% fee). To break that up - there were about 10-11 branches so each branch had to write $12-14M per annum or $1M per month. That is one poor sucker every month with $500K to invest and a house worth about the same that is unencumbered. Hold a seminar every month and get 50 people to it (200 on the gold coast we have been told) and you are looking to convert 2%.

I believe the advisers were getting 10% of upfronts so a branch with 2 advisers writing $12M were seeing an additional $120K or $60K each on top of their base wage. That is a potential bonus of somewhere between 50-80% based on average FP wages.

The issue and this is the case for much of our industry and is the BIG area that needs to be fixed is that the fee is not linked to the advice. We can argue for months about fee for service, how to charge, asset based fees etc, but you get rid of commissions and you get rid of advisers thinking they need to have people invested to make money. 

Maybe I am lucky but my background included the fact that cash is a legitimate asset class and clients should accept the fact that I will continue to charge fees when sitting clients in cash as the advice hasn't stopped just becuase I have them in cash.

It is advisers that feel they need to be "investing" clients money to justify getting a fee that causes them to make decisions not based on what is best for the client but a mix of what is ok for the client and what is needed to justify their existance.

Ban built in commissions. Make advisers set a fee and justify what the fee involves. Getting clients to agree every 12 months is silly - 3 years is more realistic.


----------



## Frank Ainslie (14 December 2011)

SJG1974 said:


> No worries Frank.  The bit that gets me is that after all of your experience in business, and your years on this earth that you can still claim you did not know that borrowing against your house, borrowing again and again and plonking it all on the sharemarket was risky...that you thought this was a conservative strategy, just because Stuart Drummond told you so.  Thats what gets me. It just doesn't make any sense.
> 
> Anyways, I have said my piece (over and over and over ).  I wish you and other Stormies no ill will.  I wouldn't wish what you and others have gone through on my worst enemy.
> 
> You have a much bigger and more important fight on your hands than dealing with the likes of me on this forum..good luck with it all.




Hi SJG,

No sweat! Let's call a truce.

Look! In all honesty we Stormies all feel like blxxdy fools now that the truth about Storm and the Banks has been revealed. People have asked why we mortgaged our houses and kept pumping money back into Storm when a financial crisis was looming. I will attempt to answers these questions and explain our thinking when so doing in the next few days.

It must be apparent to all by now that I am not a gullible person and I have a background in corporate management which includes training in financial accounting. How therefore did someone like me get sucked into all this? It's a valid question and I will attempt to answer it (warts and all) in the next few days. People, I feel, need to understand that if a person with my background can be duped, anyone can.

I indulged myself yesterday because Helen was at work. However, I'm off to the dentist (free dental treatment) this morning and I can contemplate my response whilst the dentist is busy drilling into me.


----------



## DocK (14 December 2011)

SJG1974 said:


> No worries Frank.  (snip)
> Anyways, I have said my piece (over and over and over ).  I wish you and other Stormies no ill will.  I wouldn't wish what you and others have gone through on my worst enemy.
> 
> You have a much bigger and more important fight on your hands than dealing with the likes of me on this forum..good luck with it all.






Frank Ainslie said:


> Hi SJG,
> 
> No sweat! Let's call a truce.
> 
> ...






doobsy said:


> I agree with a hell of a lot of that Frank and the best way is to put some numbers to it:
> 
> (snip)
> The issue and this is the case for much of our industry and is the BIG area that needs to be fixed is that the fee is not linked to the advice. We can argue for months about fee for service, how to charge, asset based fees etc, but you get rid of commissions and you get rid of advisers thinking they need to have people invested to make money.
> ...




Doobsy,

I agree with the above - if you remove the trail commissions you remove the incentive for FPs to have clients invested when they shouldn't be, or invested into vehicles that offer the highest commission for the adviser, rather than the most appropriate product for the client.  Whoever Frank's friendly witness is, is quite correct when he states that this issue is no doubt at the core of the the Cassimatis' intention to keep their clients in the market.  

Frank & SJG,

I'm delighted to see the power of music has led to a more civil tone from both of you - well done!  I'd take full credit, but would probably cop an earful from both of you, so will simply say the more moderate tones of both of your last posts are very welcome, and make for much more pleasant reading.  Please keep it up! 

Frank, I'll be interested to read your explanation for your reasons for investing with storm.  As you say, most of us ex-clients feel like bloody idiots now and I know I've spent many a sleepless night wondering how I could have failed to see the inherent flaws in the strategy.  Although I don't claim to be a mental giant, I do consider myself to be of at least average intelligence and while I wasn't financially savvy by any means, neither was I a total financial ignoramus.  When asked "why did you" or "how could you" I often find it difficult to put into words my thinking at the time.  Maybe GG is right and there was an element of cultish brainwashing at play


----------



## SJG1974 (14 December 2011)

Frank Ainslie said:


> Hi SJG,
> 
> No sweat! Let's call a truce.
> 
> ...




I think it will make everyone's life easier if we do call a truce Frank!

I know I don't speak for everyone, but as an outsider, I reckon focusing on how you got sucked in, warts and all, is far more beneficial and to be frank, interesting than the legalities.  Thats how you can educate people how to avoid the position you are now in. Let the courts decide the other stuff!

I for one am looking forward to your warts and all account.

And DocK, 

I am not sure if it was Taylor Swift or a combination of things, but it suddenly clicked (yes I am a bit slow on the uptake) that everyone around here knows my views, opinions etc., and in the spirit of the festive season, my gift to you all is that I get onto something different.  That, and this whole thing was giving me a headache!


----------



## Frank Ainslie (14 December 2011)

SJG1974 said:


> I think it will make everyone's life easier if we do call a truce Frank!
> 
> I know I don't speak for everyone, but as an outsider, I reckon focusing on how you got sucked in, warts and all, is far more beneficial and to be frank, interesting than the legalities.  Thats how you can educate people how to avoid the position you are now in. Let the courts decide the other stuff!
> 
> ...




Hi SJG

I'm all for the easy life!

Here's the  human face on this. See video (small extract) at http://www.smh.com.au/business/betrayed-investors-tell-their-story-20111213-1ot45.html


----------



## bunyip (14 December 2011)

Frank Ainslie said:


> Hi SJG,
> 
> 
> 
> ...




Frank

I don’t want to prolong the argument either, however, I simply cannot agree with two of your statements above. 
You may have a background that should have stopped you from being gullible, but it didn’t. Backgrounds, experience, qualifications and the like don’t count for much unless they’re combined with a healthy measure of common sense.
Storm apparently advised you to mortgage your home to raise a substantial loan, combine those borrowed funds with you super and other personal funds that you might have had, and sink the lot into the stock market. Then use double gearing to raise another big loan, and plough that into the market as well. They told you this was a safe and conservative strategy. You believed them. Sorry Frank, no intention to offend, but that is a prime example of being gullible.

I also disagree with your claim that if it can happen to someone of your background, it can happen to anyone. You can call me an armchair expert if you want, you can tell me I’m being wise after the event. But I can tell you with absolute certainty that if any investment adviser had presented me with that strategy and told me it was safe, there is no way in the wide world that I would have fallen for it.
I’m a fair bit younger than you, but I very well remember the 1987 crash that wiped 25% off the market in one day, and 50% in just a few weeks. I’m also aware of the 1929 crash that created similar havoc in the investment world. The ‘29 crash wasn’t quite as severe as ‘87 in terms of percentage fall in one day or in the next few weeks, however it was far more severe than ‘87 over the longer term, with the US market losing 90% of its value in the three years between 1929 and 1932.
It was 25 years before the market recovered its losses by climbing back up to the 1929 peak.
It all could have happened again, which is why it was so very very risky to borrow a huge amount of money to invest in the market.

Anyway, Merry Christmas to you, Frank, and I look forward to hearing your take on how/why you got caught up in the Storm debacle.


----------



## ROE (14 December 2011)

I Second that, there is no way in the world anyone can convince me to mortgage my house load up debt, promise double digit return.... I tell them they either lying or don't understand compounding...

Storm is a scam no doubt but people has to take some of the blame.

I can understand people who has absolutely no knowledge in finance can fall for it because they may not know that generating a double digit return is NOT easy.... I can tell you I know a few people who told me house price double every 7-10 years and no matter what I told them, they say it cant go down...

I don't know if it goes down or not and I told them I wouldn't know either when and how but what I know is it can not goes on due to law of compounding...there will be period of negative growth and zero growth and that is a fact
I can prove it with mathematics 

Super with defined benefits is another scam pretty close to Ponzi scheme again due to law of compounding.
sooner or later the law catch up and your out going is greater than your intake...

Anyone promise return above 7-8% you need to start question pretty hard how they can keep doing it? because after a while they run into trouble with the law of compounding ...this law is like physics law of motion ....moving objects goes up against friction sooner or later it has to stop unless more force is pumped into it...


----------



## Solly (15 December 2011)

> *"Film highlights human cost of Storm*
> 
> A FILM documenting the $3 billion Storm Financial collapse shows clients are still suffering more than three years after being wiped out.
> 
> The $30,000 production, Piggy Banks, which aired in Brisbane for the first time yesterday, was funded by clients who paid about $250 each - with producers now looking for a distributor."




More by Mitch Gaynor @ couriermail.com.au
(With a pic of a very serious Sergeant Sean)


----------



## Garpal Gumnut (15 December 2011)

This would describe Frank Ainslie and many other hardworking folk caught up in this debacle, although I have no idea whether he still idolises or is an apologist for Manny Cassimatis.

The whole Storm rort has all the characteristics of a cult, with many victims still believers in the model.

http://www.couriermail.com.au/ipad/film-highlights-human-cost-of-storm/story-fn6ck2gb-1226222282116



> "A lot of us have shut our mouths until now because of sheer embarrassment," she said.
> 
> "We're educated people. We've been conservative.
> 
> ...




gg


----------



## Solly (15 December 2011)

GG

Sergeant Sean sure does look focused and a tad bit angry. As I said previously it never pays to piss off a copper. After-all coppers have heaps of mates. It's a bit like when you get pinched by a Hi-Vis Traffic Branch Highway Patrol Ford F6 Typhoon or a Coomera motorcycle cop when doing 145 kms in an M5 on the M1 around Dreamworld. 

In the long run it's just a whole lot better to pull over, lose the points, cop the fine and the tongue lashing. (Not that I'd know anything about this type of irresponsible behaviour). With the law getting smarter with the In-Vehicle computing Platform, In-Car Camera and Mobile Automatic Number Plate Recognition your'e buggered now, no point in doing a runner.

Some strange parallels with the Storm saga, isn't there?


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## Solly (15 December 2011)

GG

Interesting comments about a  cult

S


----------



## Garpal Gumnut (15 December 2011)

Solly said:


> GG
> 
> Interest comments about a  cult
> 
> S




This is from the Wikipedia page on Cults.



> Mind control
> Main article: Mind control
> Studies performed by those who believe that some religious groups do practice mind control have identified a number of key steps in coercive persuasion:[30][31]
> People are put in physical or emotionally distressing situations;
> ...




gg


----------



## Frank Ainslie (15 December 2011)

doobsy said:


> OK Frank
> 
> Understand you don't want to be repeating yourself but I was trying to get out into the forum more specific information around mostly the top two points on the Corps act breaches.
> 
> ...




Hi Doobsy,

_"As the UMIS will be a fight against both Storm and the banks, this one will be dragged out over MANY years whereas proving the advisers were negligent brings in the PI Cover. I know this cover was inadequate but it might mean clients get at least a partial payment to keep them going._

I think you and many others still do not understand the problems that exist with the PI insurance. I have fully outlined these to ASIC in my letter dated 21st December 2010. I will post this in full when time permits because I think you will find this of interest. However, a new wrinkle has arisen!

Earlier today I wrote to ASIC with regard to the PI insurance Storm had in place. I think you will also find this of interest!

_Mr Greg Metcraft – Chairman 
ASIC – Australian Securities & Investment Commission
GPO Box 9827
Melbourne VIC 3001
									15th December 2011						                       
Dear Sir,

Re: ASIC’s failure under the Corporations Act 2001 – SEC 912B to to ensure that Storm Financial had adequate and continuing indemnity insurance.

On the 21st December 2010 (1 year ago) I wrote to you with regard to the deficiencies that still exist in the Reg Guide 210 –“Compensation and Insurance arrangements for credit licensees.” To date I have had no reply!

In my letter I stated,  “It peeves me no end that Helen and I have an airtight case against Mr Stewart Drummond, our former Storm advisor, and still we are powerless to act. He told us out and out lies (misrepresented) in order to get our names on the Storm SOA and we have written evidence of his mendacity. Yet, we can't touch him because the indemnity insurance that Storm had in place is not worth the paper it is written on.”

You have now charged Mr. Stewart Drummond with misleading and deceptive conduct, which reinforces our case. Can you therefore now tell me why we should not hold ASIC accountable because your Office failed to carry out its duties under Section 912B of the Corporations Act 2001?

When we signed up with Storm Financial we had to sign off on page 96 of the Statement of Advice relating to the aforementioned section:

*“CORPORATIONS ACT 2001 - SECT 912B 

Compensation arrangements if financial services provided to persons as retail clients *

*(1) If a financial services licensee provides a financial service to persons as retail clients, the licensee must have arrangements for compensating those persons for loss or damage suffered because of breaches of the relevant obligations under this Chapter by the licensee or its representatives. The arrangements must meet the requirements of subsection 2. *

(2) The arrangements must: 

[a) if the regulations specify requirements that are applicable to all arrangements, or to arrangements of that kind-satisfy those requirements; or 

[b) be approved in writing by ASIC. 

(*3) Before approving arrangements under paragraph (2)[b), ASIC must have regard to:

[a) the financial services covered by the licence; and 

[b) whether the arrangements will continue to cover persons after the licensee ceases carrying on the business of providing financial services, and the length of time for which that cover will continue; and 

[c) any other matters that are prescribed by regulations made for the purposes of this paragraph. *

(4) Regulations made for the purposes of paragraph (3)[c) may, in particular, prescribe additional details in relation to the matters to which ASIC must have regard under paragraphs (3)[a) and [b).

For the reasons stated in my letter dated 21st December 2010 (copy attached) not only was Storm’s professional indemnity insurance woefully inadequate in dollar terms, but it also lacked the capability to extend beyond the life of the cover because it had no “deeming clause”. This meant that any claims would need to be made within the cover period. In the case of Storm, this was impracticable because no one knew until well after the event that wrongdoing had taken place. Further, it was impossible to obtain the name of Storm’s insurers for more than a year because Worrells would not release the name of the insurer to us.

The way I interpret the CORPORATION ACT – SECTION 912B it is ASIC’s responsibility to ensure that adequate and extended insurance cover is in place so that compensation is readily available to retail clients if the “licensee ceases carrying on the business of providing financial services, and the length of time for which that cover will continue.

When we signed up with Storm Financial, we did so on the basis that we were protected by the Corporations Act for wrongdoing, and we could rely on this particular Section of the Act among others.

We now charge ASIC with failing to act in our best interests where Storm Financial is concerned by not ensuring that its responsibilities under this Section of the Act were met. Therefore, please explain why we should not hold ASIC liable for our losses which we would have claimed under Storm’s professional indemnity insurance if the insurance cover taken out by Storm had been one that is required under the Act.

Yours sincerely,


VICTOR F. AINSLIE_

There is no question in my mind that ASIC's culpability in the Storm debacle has been covered up. As the public watchdog it was asleep on the job. We should therefore get a new watchdog!

I wonder if ASIC will reply to this letter?


----------



## doobsy (15 December 2011)

Ta Frank

Did not realise they had it structured that way. I know in our case we needed to have run off cover for advice given under our ex-boss before we set up own own shop, in case they stopped holding an AFSL.

I would think the PI should cover advice given when the PI was in force but I would not be surprised to find out that this is not the case.


----------



## Frank Ainslie (15 December 2011)

doobsy said:


> Ta Frank
> 
> Did not realise they had it structured that way. I know in our case we needed to have run off cover for advice given under our ex-boss before we set up own own shop, in case they stopped holding an AFSL.
> 
> I would think the PI should cover advice given when the PI was in force but I would not be surprised to find out that this is not the case.




Here's an extract from my letter to ASIC last year (21st December 2010) that will further clarify the situation for you:

"_There are two areas in particular with regard to "Professional Indemnity Insurance” that the Storm Financial saga has highlighted as major weaknesses in the system:

The first is the amount of cover in monetary terms that was taken out by Storm Financial. The total sum of Storm’s insurance - $25-45 million or so dollars - in a business with a turnover of hundreds of millions of dollars was simply ludicrous. Why someone in your Office never picked up on this is beyond me. Unfortunately, this National Credit Act has not fully addressed this issue either because it has totally missed the point in the first place? 

The point is that even if Storm Financial had professional indemnity insurance in place for M$500 or more, we, the investors, would not have been able to claim against such an insurance cover because Storm had no provision for such contained in the policy. 

“Claims made' policies - such as professional indemnity and directors' and officers' (D&O) insurance - only provide cover for claims made against the insured during the policy period. They invariably include a deeming provision, under which the insurance is extended to claims made outside of the policy period, provided they arise from circumstances notified to insurers within it. Without the deeming provision, the insured would be left without cover for such claims. They will not attach to the policy for the year in which the claim is made, since the relevant circumstances will have been disclosed to the new insurer, who will have excluded the claim from cover.”

The sentence, “They invariably include a deeming provision, under which the insurance is extended to claims made outside of the policy period, provided they arise from circumstances notified to insurers within it” is of particular relevance. You may recall that Storm’s professional indemnity insurance came up for renewal in December of 2008. Any claims that we had on Storm’s professional indemnity insurance were extinguished at that time which really makes the National Consumer Credit Protection Act 2009 (National Credit Act) a bit of a joke unless the Insurance Contracts Act is amended to accommodate circumstances such as these.

Let me quote you part of an article by ‘FindLaw Australia’s Michael Gill entitled, ‘Section 54 Review of the Insurance Contracts Act:

“Particular problems have emerged in relation to the operation of section 54 of the Insurance Contracts Act upon claims made and claims made and notified policies. The benefits extended to insureds by section 54 have been gradually extended by the courts. In particular, in the 2001 case of FAI General Insurance Company Ltd v Australian Hospital Care Pty Ltd, the High Court applied section 54 to a deeming clause in a professional indemnity policy. A deeming clause can extend an insured's cover even if no claim is made against the insured during the period of insurance. It extends cover provided that the insured gives written notice during the period of insurance if it becomes aware of any occurrence which might subsequently give rise to a claim against it. An insurer has been obliged to indemnify an insured who failed to notify circumstances discovered during the currency of a policy unless prejudice could be proved.

Since Australian Hospital Care, insurers writing claims made and claims made and notified policies have tended to omit deeming clauses from their policies. This leaves the insured to rely on the statutory right given by section 40(3) of the Act. It has been held by the New South Wales Court of Appeal in Gosford Council v GIO General Limited that section 54 does not apply in relation to the statutory right provided by section 40(3) but, as the Report rightly points out, 'there is still some uncertainty because the High Court may well reverse the effect of the decision in Gosford Council v GIO General Limited'.

The Report indicates that there was strong evidence that the judicial interpretation of section 54 was a factor having material impact on the professional indemnity insurance market in Australia. Some insurers, particularly London insurers, had withdrawn from the market, or had altered their policies in an effort to reduce the impact of the decisions. Others made it clear that they would withdraw if those alterations were found by subsequent judicial decisions to be ineffective. The reviewers also report that even where cover remained, the cost was increasing alarmingly and the comprehensiveness of the cover was declining.

The Report concludes that legislative reform is necessary in relation to the operation of section 54 on claims made and claims made and notified insurance. It recommends that section 54 be amended so as not to apply to a failure to notify circumstances that might give rise to a claim. This would amount to a statutory reversal of the High Court decision in Australian Hospital Care Pty Ltd.

Section 40(3) only gives a statutory protection to an insured where notice of facts that might give rise to a claim is made as soon as was reasonably practical but in any event before the insurance cover provided by the contract expired. The Panel has recognised that this could give rise to unfair results and has recommended an extended reporting period of 45 days after expiry of the insurance policy. There is also a recommendation that insurers provide a pre-expiry notice to insured of their need to notify circumstances, unless there is, to the insurer's knowledge, a broker inolved.”_


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## Frank Ainslie (15 December 2011)

*Storm Financial – The reasons why we and others entrusted that firm with our money-  (Part 1)*

This forum has been full of innuendo about Storm Financial, its financial model (a one-fit all plan) that it promoted and the mindset of the investors that used the services of that company.

We’ve had all sorts of extreme views from the Stormies having a cult mentality through a whole range of other things including _‘greed'_, _‘lacking in commonsense’_, _'high rollers prepared to gamble everything’_, _‘gullible fools that would believe anything'_ and so on! You name it and we Stormies have been accused of it. It’s a little like the Lindy Chamberlain case where she was found guilty based on evidence that was later found to be a load of rubbish! None of it was true and nor is it in our case!

I will now endeavour to explain why we and thousands of others placed their trust in Storm. However, in order to do so I need to be somewhat long-winded. Unfortunately, there is no other way because we relied heavily on what we were told at the time and what appeared in the SOA. These aspects need to be considered to put this all in context. Therefore, I will be posting this explanation in 3 parts.

Out the outset, let me say that nothing I or other Stormies can say will satisfy those that have decided our guilt in advance because they are in their own space. No matter! Here’s the unadulterated truth. Take it or leave it for what it is! Just don’t ask me to explain any further!

Our story begins in late 2006. The world was a different one then from what it is today. As I remember it was full steam ahead where the share markets were concerned. Not that that meant anything to us at the time because we had other things on our minds. For one we were looking to sell our shopping centre and retire

We began to look around for something we could sink our money into that would provide a return at little risk and offer growth over the long term. We considered allocated pensions and we also looked at other investment alternatives. One was a financial plan that a Westpac financial planner proposed that cost us $850 to have completed..

One of Helen’s sisters then mentioned Storm Financial. She and her partner were also looking for somewhere to invest their money.  Storm had been suggested to her by friends who had been with that firm for some years and their investments had shown continuous growth in that time. Consequently we attended some Storm seminars together in late 2006 and early 2007.

What struck us at once about Storm was the number of clients it had, its track-record in the industry, and its infra-structure which instilled confidence in us that our investments would be safe. 

_“From 1993 to 2008 40,000 people placed their trust in Storm Financial and several banks." _ [Piggy Banks” DVD]

Storm was certainly no fly-by-night company operating out of a back-room somewhere on the gold coast but rather a substantial financial advisory firm with an impressive data-base of clients including some celebrities. Further, many of its clientele were made up of people that had been in business all their lives and were certainly not simple minded as some have suggested on this forum.

We also were impressed by the software systems it professed to have in place that would ensure that our assets were in safe hands. When one walked into Storm's Brisbane Office, there were a number of staff sitting at consuls which lent to this impression. Further, our financial adviser could quite readily bring up graphs on a screen detailing our assets. It was quite impressive the way he was able to manipulate the figures. What we didn’t know at the time was that Storm’s systems did not track all the borrowings such as house loans and margin loans. In other words, it was only half a system and was therefore incapable of reflecting true ratios.

As for the ‘Statement of Advice’ our adviser presented us with, it rang no alarm bells at that time because it seemed to suggest a financial strategy that was basically sound. Of course, if someone like Doobsy had read through it, he would have viewed it with an experienced eye and would have been able to see at once that it was a plan that entailed a high risk factor because it was based on double-gearing. It should be remembered, however, that we were inexperienced investors which is why we sought out Storm in the first place. Consequently, we relied entirely on the expertise of our Storm financial adviser to give us what we asked for – a financial plan ‘suitable to our needs’ based on _‘low risk’ _and _‘long term growth’_. Indeed, the SOA seemed to reflect this in part.

_SOA - Page 9 “…we believe our recommendations should be based on your needs.”_

The basic strategy of the SOA was to convert any assets such as our house to cash and invest in the market on a broad front. 

_"SOA – Page 10 “Our approach is to increase the SIZE and QUALITY of your asset base so that it provides you with income to fund your investment business and lifestyle activities."_

Our asset base at that time was:

_"SOA – page 17” The asset base you have accumulated to date is: Property - $400,000, Shares $33,890, and cash $1,210,392 (including an estimate for our shopping centre because it had not yet been sold)"_

The dangers of doing this were not immediately apparent to us because we thought that with the pending sale from our shopping centre (we eventually received $1million for this in August 2007) together with our other assets, this would have been more than sufficient to cover any borrowings. Further, if a market down-turn was experienced, we could easily pay back any loans we had taken out and get out of the market place. 

_"SOA – Page 18 “You will see that you are slightly overexposed to Property - an Asset that is unlikely to bring you substantial income or capital growth. 24% of your assets is held in Property, compared to our guidelines of 14-20%. Shares are under-represented within your existing asset base - this is the Asset that will bring substantial income and capital growth, reducing your reliance on income from your work. You currently have 2% of your asset base in Shares, while we suggest that 48% is effective for building wealth. Holding Cash assets will not make you wealthy, but sufficient Cash holdings are required to maintain flexibility and liquidity within your portfolio - you will see that your 74% relative to our suggested 38%, makes your current portfolio overweight in Cash."_

What we failed to realize then was that the cash we ended up with from borrowing together with the cash we already had would be eroded away by Storm’s fees, margin loan interest, housing loan repayments and our “living expenses” of $8,000 per month which Storm assured us was covered by our investments. However, the projected return on our investments calculated by Storm (that would cover all these overheads and grow our portfolios) never materialised so we virtually ended up funding ourselves in the end.

_"SOA – Page 22  “Capacity to Invest - Normally the capacity to which a person should consider investing should also be a function of the market at the time of investment. In a period of substantial profits or growth in the markets preceding entering new investments, one should be much more careful of the level of exposure to higher debt and reliance early on profits. If the markets have performed particularly well for a few years prior to entry, it is likely to take longer for good growth to be seen again. Lower exposure to the market at this time along with larger buffers within your plan, allows you also to take advantage of the potential to consider recovery portfolios should the market fall after entry. 

If a period of flat or low growth for several years preceding the investment time has been experienced, one can consider taking debt levels higher in the knowledge that the average of the market will be experienced by rising returns in the coming years. It is usually unlikely to see flat or low returns for more than two or three years if we look historically. Whilst you cannot always rely on historical data to predict the future, it gives us a general view when working within the viability testing that we do, and the safety margin needed to keep you comfortable and protected.

Similarly, if the market has had substantial falls preceding the investment, this compounds positively the reasoning to consider higher exposure. The need for large buffers within your plan is not as great given the upside potential of the market. 

Our recommendation notes a middle ground between the above two paragraphs. Whilst the markets have been flat, low and decreasing in the different sectors, we have suggested taking a reasonably cautious approach to enable you to take advantage of the lower market initially as well as leave capacity within your buffers for recovery steps should the markets drift lower after entry. This approach also keeps you more away from any potential margin call risk. 

SOA – Page 22 Investment Growth - The viability test assumes NO GROWTH in the share investment for the remainder of this financial year, and for the next 2 years. This shows that even without sharemarket growth, the Cashflow remains viable and does not depend on growth in the share Investment. Following this period of time, modest growth of 6.55% per annum in the Sharemarket is required to keep your Cash Reserves growing. 

_


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## Frank Ainslie (15 December 2011)

*Storm Financial – The reasons why we and others entrusted that firm with our money-  (Part 2)*

_"Please refer to the below graph, which shows that from 1st January, 1980 to recent, the All Ordinaries has returned 9.69% Growth and further 4.63% dividends per annum making a total combined return of 14.32% pa. Please note these returns do not include any additional value our Build/Recovery steps would enhance on the return."_

There is nothing in any of this to suggest that this plan was risky. In fact, Storm’s SOA was reassuring because it seemed to indicate that Storm was taking a conservative approach and one very much in keeping with our wishes.

_"SOA Page 62 - Using Market Volatility 

Our rejection of the strategies employed by active fund managers does not mean that we advocate the passive management of investors' funds - merely that the activity should not rely on forecasting future returns in particular companies or sectors of the market. The term 'passive management' has come to be synonymous with Indexing, meaning that the fund manager is empowered only to ensure the investment exposure tracks that of the market; they do not make decisions about which shares to buy, nor about the timing of the trading activity. 

We suggest that while investors' funds are best invested in a passively managed Index Fund, the portfolio can be actively managed by using any opportunities to build the asset base, that arise from events that have already occurred. 

By observing the effect that market occurrences have on portfolios, and invoking at pre-set trigger points a pre-determined set of actions, we believe that active management of the portfolio can enhance the market returns delivered by an index fund. This type of active management does not hand the decision-making on to fund managers, especially considering that they have actually been shown to subtract value in the majority of cases. It involves only a process of planning (before the event) the required activities for each possible outcome in the market, and invoking the appropriate action for the events that unfold in the market. The strength of our system is that it relies solely on the observation of events that have already occurred, and invoking predefined actions at pre-determined trigger points. We do not attempt to guess where the market is headed next, nor do we attempt to 'time' the activities based on forecasts of future market movements. This can be contrasted with the approach generally taken by active fund managers, where effort and expertise is used in an attempt to predict where the market or individual stock prices will move next. 

Investment Distribution - We have assumed that you will receive dividends on your Share Investment at the rate of 3.95% per year. Generally, distributions are paid at about 4-6% per year, so the use of only 3.95% will underestimate the revenue contributed to the plan from this source. Distributions are usually reinvested; however they do form part of your overall pool of Reserves, and can be redeemed at anytime.
Borrowing Parameters 

Margin Call Test 

SOA – Page 26 “You will see from the Margin Call Lending to Valuation Ratio (LVR) that the value of your Margin Loan relative to the value of your Share assets should not exceed 79.84%. If this occurred, you would be in Margin Call and the lender would require you either to repay some of the loan, or offer more security for the loan. 

Your post-plan Margin Lending Ratio is at 49.17%, which is well within our recommended guidelines as being prudent." 

Again, this statement suggests a cautious approach!

The 3 layers of protection before a Margin Call could occur are: 

1. A 49.97% buffer before a margin call would occur if you offered your cash Reserves as additional security to the Margin Lender. This equates to being able to withstand a fall in the market of about 3714 points from its current level. 

2. If you were to purchase additional shares during a market fall and offer these as additional security, you have a 41.82% buffer before a Margin Call occurred. This is the preferred option in the event of a market fall, as it means that you are purchasing successively cheaper assets as the market declines. This equates to being able to withstand a fall in the market of about 3109 points from its current level. 

3. If you offered no additional security to the margin lender at all, then there would be a 35.67% buffer to Margin Call. This equates to being able to withstand a fall in the market of about 2652 points from its current level."_

The safety levels stated were again reassuring!

_"SOA Page 29 – “…additional Investment steps may be funded from Cash Reserves that have been set aside for this purpose. Also, capacity to purchase additional securities may have been left in approved but indrawn borrowings with your margin lender. This is evident from the difference between your actual margin lending ratio of 
49.17% being less than the recommended maximum allowable LVR of 59.53%.

SOA Page 30 - Estimated costs associated with bank borrowings are listed here. Again, these have been inflated to build in additional security to the plan. 

Investment fees are payment for the financial advice you have received and the implementation of these Recommendations. It also pays for the purchase of the Brokerage on your Share Investments and their growth, so you incur no costs in switching funds, or redeeming and reinvesting those same funds. The right to the Brokerage is a valuable asset as it is valid on the Investment and its growth for an unlimited number of trades, and for an indefinite period of time (while you remain a client of Storm Financial Pty Ltd ONLY). 

Your Contribution - There are no regular contributions required for this plan. We have allowed drawings of $100,000 per annum to help meet the cost of living expenses. The plan will also meet your loan repayments. 

Cash Reserve Levels - The estimated level of your Cash Reserves is documented for each of the 17 financial years detailed in the Cash flow. Recall that your Cash Reserves Dam is the amount that remains after all of the revenue for the Plan is received and all of the expenses associated with the portfolio have been paid. If the level of Cash Reserves rise over time, this indicates that the Plan is bringing in more revenue (including "Your Contribution') than it is costing to run, or that it is making a 'profit'.

SOA Page 37 - Default Risk is the chance that a company you invest in will default, and as a result the shares in that company become worthless. In most cases of default, investors have been unable to foretell that the company was experiencing difficulties - otherwise they would presumably have sold their shares! Because of the unreliability of selecting which companies will not default, we suggest that this risk can best be managed by diversification rather than by trust in your (or an adviser or manager's) forecasting ability. By ensuring that your funds are spread across many companies, your portfolio is at once exposed to the low-risk, medium-risk, and high-risk companies that will do very well, and to the low-risk, medium-risk, and high-risk companies that will do poorly, and some will inevitably collapse. By diversifying across all of the companies in the market, your exposure to each of these companies is indexed to ensure that default risk represents a negligible danger for your portfolio. 

SOA Page 61 - Risks Associated with Borrowing to Invest 

Borrowing to invest introduces a new element of risk to any Financial Plan. As well as magnifying gains and losses as described above, using shares as security to borrow investment funds can put the investor in the position of margin call. This occurs if the listed price of shares falls below a level that would cover the lender's loan to you, and then the lender will ask you to contribute the difference. This ensures that the lender's exposure for the shares remains the same. 

In his book Scams & Swindlers: Investment disasters and how to avoid them, True stories from ASIC, Bruce Brown gives us some very useful advice. 

For most investors, particularly if you have an average income, it is wise to only borrow a limited percentage of the price of 'the shares or units if you want to gear into the market. Although this means the number of shares or units you can buy will be less, so the value of the potential profits and tax breaks will be less, it also means there is less chance you will suffer a margin call. ASIC (1988J Pages 138·139. 

This quote highlights a very important facet of our Recommendations. We have advised that you use borrowings to facilitate the purchase of business assets. In so doing, we have used strict guidelines on the amount of those borrowings, and have related them to the size of your asset base. As has been explained within this document, should you implement these Recommendations in full your overall debt ratio would be 48%, which is made up of liabilities of 80% of the value of your home and other Property assets, and 49.17% of the value of your Share*based assets. 

These debt levels are well within our guidelines as being prudent. Adequate arrangements have been made to handle market volatility and the associated potential for margin call - these have been fully described and explained in the section of this document entitled Your Post-Plan Position."_


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## Frank Ainslie (15 December 2011)

*Storm Financial – The reasons why we and others entrusted that firm with our money-  (Part 3)*

_"You will be informed of your trigger points on implementation of the plan, and at each step in your Journey to Capitalism. If the market index moves through your trigger point, simply call us (you may remembered that I queried this at the time) and we will review your position in light of the new market conditions. If there is no activity on the portfolio for any significant length of time, we will arrange to review your position to ensure that the plan is still optimal for your financial and personal circumstances. Of course, you can request a review of the portfolio at any time, or you are always welcome to discuss any issues impacting on your finances with us. 

This activity can be expected to enhance the returns of the portfolio beyond the market average that is delivered by the indexed Investment. It should be noted however, that any build or recovery portfolios that may be constructed merely add to the attractiveness of the core Investment.

SOA Page 85 - Cash reserves of around $285,000 will be your primary form of protection from the effects of varying returns from your Share Investment. The plan also builds in capacity to take advantage of buying opportunities and handle this inevitable market volatility. This capacity is incorporated within the unused capacity for borrowing using the Shares as security for the loans (these are termed Margin Loans). 

As explained, these Cash Reserves are a part of your Investment, and under no circumstances should they be viewed as finance for consumption spending. They should be maintained within business-use accounts, with close monitoring of the spending that is financed from these funds. These Reserves should only be spent following consultation with us; failure to discuss the use of these funds prior to spending decisions being made may jeopardise your Plan. Of course, any additional savings into these accounts will facilitate extra building steps in your investment, and so shorten the time taken for you to be able to live off the income from your capital.

SOA Page 87 - When the market goes down losses are also magnified. For this reason, your gearing level must be prudent, and your Cash reserves sufficient to allow you to persevere during periods of negative returns. We have addressed both of these issues in detail in this document. Our Viability Testing evaluates your ability to handle the variability of returns associated with a Share Investment. The Cash flow attached as Appendix B shows that we have made provision for adequate Cash Reserves to act as a buffer between the changing value of your investment and the requirement to consistently meet your commitments. 

Should you implement these Recommendations, your position regarding debt and equity would be as illustrated in the pie chart below. The optimum range for debt ratios is that which will allow wealth creation to be maximised, yet take account of the constraints imposed by managing debt. Generally, you should owe no less than 40% and no more than 60% of your total assets; as always, it is important to emphasise that the debt must be incurred to purchase good quality assets. These should be considered as a guide - your actual liability ratios will fluctuate within this range according to age and the stage in the Investment process.

SOA Page 91 - If your trigger points are not breached within a six months period, we will contact you to review your investments and overall plan with you."_

Reading back through this today without the benefits of hindsight, it still seems reasonable to me!

*What people fail to realize however is that what we were told in the SOA was at odds with what Storm Financial then did!*

* The revenue that the investments earned did not cover the interest paid out on the borrowings, the Storm fees, and living expenses so the cash reserves were being whittled away. 
* There were no effective software systems in place to monitor our investments. The house and margin loans were not included so the ratios were pure bull****! Why do you think Storm was using spreadsheets in the end using data from the CBA?
* Storm’s covert arrangements with the Banks made a nonsense of the agreed trigger-point ratios.
* And so on.

People have asked us why we then continued to pump money into Storm in 2008 when all the signs were there that the markets were going bad. One could just as easily ask, *“Why did the Banks keep lending money to Storm’s clients in 2008 when the storm clouds were gathering?”* The Banks are financial institutions and are therefore expected to be prudent. We were investors relying completely on our financial adviser's advice. We were committed to supporting the plan Storm gave us because we had agreed to abide by their strategy and had already paid Storm considerable fees up front. Further, we were being reassured in the latter part of 2008 that there was no need to worry. _“Storm had everything in hand!”_ 

Just to give you an idea of just how devious our particular Storm adviser was, in August 2008 after we returned from Europe, the sister-in-law who first mentioned Storm to us contacted Drummond because she was getting a little concerned about the share markets world-wide and particularly the happenings in the USA. She was about to retire from her job as a public servant and asked Stuart whether she should. _“No worries!”_ he said._ “Everything is good! There’s more chance of me throwing myself out a window than there is Storm going bad!” He then persuaded her to retire (which she did that month) and sink her retirement super in Storm – some $200,000 plus dollars. She is now back working at the place she retired from! 

Some will say how foolish was she but they little realize the effect of Storm’s confidently asserting that we had nothing to worry about. Remember that the banks didn’t make margin calls on most of their clients until everyone was well and truly fried. By the time most of us were cashed down, we were in the centre of a financial vortex. The index fund managers had suspended sell-downs because they were inundated and they all fiddled around whilst our assets burned. Many landed up in negative equity well over 100%.

Looking back, we, the investors that signed up with Storm took our eyes off the ball to a certain extent. Whilst there was nothing alarming in the SOA, we should have had some one else, or maybe more than one financial adviser run his eye over Storm's plan first.  But then what would he or she have found. There was nothing outwardly deceptive in the plan. Certainly, people could have been advised of the dangers of double-gearing and decided whether they wanted to run the risk. But what other flaws are immediately apparent? Perhaps Bunnyip can enlighten us with his wisdom.

In our particular case, deception was used to get us to sign up because we were told lies to start with. Further, the advice was inappropriate to our circumstances.  A case, I believe, can now be made for Storm simply using our assets for its own end.  The data to date suggests that Storm adopted this strategy somewhere between 2006 and 2007, selecting people with considerable assets that would suit their purposes. The Court will decide whether there is any substance to this. 

I’ll end on this note. Many that were caught up in Storm had reached the end of their working lives and were looking forward to retirement. They had finally achieved their financial goals after years of hard work. They sought financial advice because they believed they were doing the right and proper thing – the sensible thing. They assumed that Storm and the Banks that they borrowed from were ethical and above-board. They also assumed that there were regulations in place that would protect their interests. They found that they were wrong. 

Their biggest mistake though was they placed their TRUST in financial institutions that betrayed that trust for personal gain. These people could have been your parents, your friends or your neighbours - anyone in fact. 

Should we tolerate this type of behaviour or do something to change it! I think we all know the answer to that one!

*“Beware of false prophets, who come to you in sheep’s clothing but inwarly are ravenous wolves.”  - Mathew 7:15*_


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## Garpal Gumnut (15 December 2011)

Thanks Frank.

It certainly appears that Storm had a plan to target a group of hardworking high asset individuals.

The more I read your account the more it sounds like a cult.

Read my entry on cults on the previous page or look it up on wikipedia.

gg


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## bunyip (15 December 2011)

Frank Ainslie said:


> Looking back, we, the investors that signed up with Storm took our eyes off the ball to a certain extent. Whilst there was nothing alarming in the SOA, we should have had some one else, or maybe more than one financial adviser run his eye over Storm's plan first.  But then what would he or she have found. There was nothing outwardly deceptive in the plan. Certainly, people could have been advised of the dangers of double-gearing and decided whether they wanted to run the risk. But what other flaws are immediately apparent?* Perhaps Bunnyip can enlighten us with his wisdom.
> *





Sure Frank, I'm more than happy to 'enlighten you with my wisdom'. 

First of all, I couldn’t care less what was in Storms SOA.

Rather than assessing Storms strategy based on what they said in their SOA, I believe a far more effective assessment process would have been to......... 
* Jump on Google and do some simple research into stockmarket crashes and margin loans.
* Call half a dozen rival Financial Planning firms and see what they thought of the strategy, and what they were offering themselves.
* Call some stockbroking firms and get their views.
* Run a good old common sense test over the strategy – consider that if you triple or quadruple your market stake through mortgaging your home and gearing aggressively, you’re buying yourself a double-edged sword that would magnify your losses once the market inevitably turned bearish. 
* Realise that even if margin calls had kicked in on time, and even if the investment scheme was all above board without any illegality or collusion or skullduggery,  your level of gearing would still ensure that your losses were substantial, even if you could have held on.
* Realise from your market research what could have happened to your ability to hang on if there was a repeat of the 1929 crash where the market took a quarter of a century to regain its losses.
* Think for yourself rather than placing so much trust in a bunch of salesmen because they had qualifications and belonged to a well-regarded professional body.

I personally would never have invested heavily in something that I knew nothing about, particularly when a lot of borrowed money was involved. 
And in your personal case, given that you were 65 years old and had more than enough money without any borrowing to produce sufficient passive income to fund a very comfortable retirement, I can’t understand why you felt any need to go near Storm and take on such an ambitious strategy.
Perhaps you can throw some light on this particular aspect – why did sign on with Storm? I’m not asking you about how or why you thought they had a you-bute strategy that was worth mortgaging your home and going into debt for.
I’m simply asking you why you didn’t just buy some houses and a basket of high yielding blue chips shares with a good record of paying paying decent dividends, as well as sink a portion of your funds into cash deposits. 
I’m sure all of these investment avenues must have been known to you - these three are the most common and basic investment and asset classes.
You could have been safe and secure with no debt and no stress.
Did you consider doing things this way, Frank, rather than going down the Storm route? If not, what were your reasons?


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## Solly (15 December 2011)

Garpal Gumnut said:


> Thanks Frank.
> 
> It certainly appears that Storm had a plan to target a group of hardworking high asset individuals.
> 
> ...




GG

Why do I feel that some people are going to end up in "The Creek" after all of this washes out ?

S


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## Julia (15 December 2011)

I've just read most of the three part post by Frank.  I did skip some of the repetitive parts, I admit.

My impression (and that's all it is, but it's endorsed by the excerpt from the short doco apparently made by ex Storm investors) is that it was a cleverly designed piece of propaganda, designed to sweep off their feet those with minimal investment experience and an unhealthy level of trust.

There are several trigger phrases amongst it all designed to reassure that 'we are looking after you'.

I'm a reasonably experienced investor but getting a clear picture of "the plan" from that verbose document was beyond me.  If I'd been considering investing with Storm, I'd have had to toss it aside and ask them to express it in much more straightforward terms, with flow charts and pictorial representations of what the funds would be doing.

I absolutely do not believe that any first time/inexperienced investors would have had a clue what that stuff really said, so convoluted was it with terms they would not have clearly understood.

A prudent person, in such a circumstance, would have either walked away or demanded detail that they could truly understand.

Human beings, however, are peculiar creatures in that we are reluctant to display our ignorance, so rather than ask questions in order to properly understand what is being proposed, we prefer to accept that warm and fuzzy reassurance that

 "these are the professionals, of course they have our best interests at heart, and it doesn't matter that I haven't a clue what they are actually planning to do with my money, I don't want to look foolish by saying I don't understand how it's all going to work."

I could go through all the three posts you have put up, Frank, and insert comments where warning bells would have gone off for me, or where I'd have just walked away, but

(a) that will only engender your further resentment and provide no actual insight for you, given your confirmed stance in the matter, and 

(b) like SJG, I've just run out of energy to continue trying to ensure that those who have been so caught up this time are not affected similarly in the future.

You will all pursue the course you have decided upon, making no allowance for the possibility that others may in fact be capable of offering objective evaluations.
So be it.


----------



## maccka (16 December 2011)

Julia said:


> I'm a reasonably experienced investor but getting a clear picture of "the plan" from that verbose document was beyond me.  If I'd been considering investing with Storm, I'd have had to toss it aside and ask them to express it in much more straightforward terms, with flow charts and pictorial representations of what the funds would be doing.
> 
> I absolutely do not believe that any first time/inexperienced investors would have had a clue what that stuff really said, so convoluted was it with terms they would not have clearly understood.
> 
> ...




Hi Julia,

I believe that many people didn't realise that they didn't understand their 'investment' until it was far too late.  They had been to so many hours of education seminars, had read so many pages of SOAs (and in many cases multiple SOAs), asked many questions, demanded detail that they thought they understood, seen hundreds of graphs and 'learnt' so many new financial jargon words that they didn't know that they didn't know.  They were unconsciously unconscious of their lack of understanding.

Unfortunately that often the way of many of life's hard lessons.  You don't realise the problem until after you've tried unsuccessfully to apply something you've learnt, it goes bad and it is too late.  The only way to get value out of the lesson is to recognise the problem, deal with it and move on with the aim to have learnt from the experience and not repeat it.

cheers
Maccka


----------



## Solly (16 December 2011)

> *"Reprieve for CBA in margin loan case*
> 
> THE Commonwealth Bank has persuaded a Federal Court judge to strike out significant portions of two damages suits brought by customers who took out margin loans to invest in share funds managed by Storm Financial.
> 
> However, Justice Nye Perram will allow the pair to amend some parts of their statements of claim, including allegations of lack of good faith and unconscionable conduct."




More by Elisabeth Sexton @ smh.com.au


----------



## Solly (16 December 2011)

As as result of the hearing on 14 December 2011, 
a further hearing is to be held on:

21 December 2011	
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

From : https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


----------



## Garpal Gumnut (16 December 2011)

Solly said:


> GG
> 
> Why do I feel that some people are going to end up in "The Creek" after all of this washes out ?
> 
> S




Unfortunately Solly, I doubt it.

Most penalties will be civil, $20,000 here, $250,000 there. Those responsible are collecting cash in that event.

Unless some criminal activity is alleged, nobody will go to gaol.

It is the nature of these scams, unless something criminal was done in panic, e.g. in the last days of Storm's existence.

gg


----------



## bunyip (16 December 2011)

maccka said:


> Hi Julia,
> 
> Unfortunately that often the way of many of life's hard lessons.  You don't realise the problem until after you've tried unsuccessfully to apply something you've learnt, it goes bad and it is too late.
> *The only way to get value out of the lesson is to recognise the problem, deal with it and move on with the aim to have learnt from the experience and not repeat it.*
> ...




I absolutely agree with you on that point, Maccka.

And I have no doubt that some Stormers have done exactly that – recognised where they went wrong, learnt from the experience, and moved on with their lives. That was precisely the attitude of the only Storm victim I’ve spoken to face to face – an old school mate who I caught up with at a school reunion. 

Unfortunately though, we’ve seen from this forum that there’s still a hard core of Stormers who apparently have little concept of how and why they got burnt. Those of us who are experienced and reasonably successful in investment matters have spent considerable time and effort in trying to enlighten these people so they can avoid making similar mistakes. I realise that some of them don’t have enough time left to ever be in a positions to invest again, however, if they receive a compensation package then they might have a few hundred grand to do something with. And from what I’ve gleaned from some of the attitudes expressed on here, it wouldn’t surprise me if some of them got burnt all over again. I don’t say that in a sarcastic sort of way, but rather because I genuinely believe it based based on what I’ve seen.

Also, the future generation might learn something valuable from this thread. People who are perhaps only teenagers now might read this forum in ten years time and get some insights into the importance of thinking for themselves and doing some simple research before committing vast sums of borrowed money to risky investments.

I’ve got a pretty thick skin, yet at times it disappoints me that we’ve been ostracized for trying to help people. We’ve been called unintelligent, slow on the uptake, inflammatory, heartless, and many other derogatory terms. The irony is that those saying we’re unintelligent and slow on the uptake are the ones who blundered into the snare of a conman, whereas we were switched on enough to avoid doing so.
Such is life – throughout history there are many stories of people who were criticized, disliked and reviled, sometimes even executed, because they were forthright and honest.


----------



## DocK (16 December 2011)

maccka said:


> Hi Julia,
> 
> I believe that many people didn't realise that they didn't understand their 'investment' until it was far too late.  They had been to so many hours of education seminars, had read so many pages of SOAs (and in many cases multiple SOAs), asked many questions, demanded detail that they thought they understood, seen hundreds of graphs and 'learnt' so many new financial jargon words that they didn't know that they didn't know.  They were unconsciously unconscious of their lack of understanding.
> 
> ...




Good post Maccka - "unconsciously unconscious of their lack of understanding" would have been a perfect fit on a lot of ex-clients I'd say.  

Julia, I'd also add that another human trait is to believe and trust our family and friends more than perhaps we should (when it's not their area of expertise), hence the power of word-of-mouth referrals.  Storm relied heavily on referred business from existing clients.


----------



## SJG1974 (16 December 2011)

Having read Frank's snippets from his SoA, I must admit that as someone who would consider myself to have some investment smarts, I struggled to understand what the strategy actually was by reading these snippets. 

I seem to recall that for many clients the SoA was well over 100 pages, and yet the strategy was so simple that it could have been explained by some straight forward tables and charts in probably 3 or 4 pages. As Julia said, I don't know how any unsophisticated investor could have possibly understood what was going on there.

I agree with Julia and DocK that some of the failings of human nature probably came into play for people with all this...

* The desire to run with the herd (if all these people are benefiting from what Storm are doing, then I don't want to miss out);
* The absolute trust in "authority figures" (if these people with all of their experience and credentials are saying this is the way to go, then it must be);
* A reluctance to show "ignorance" (Better to remain silent and be thought a fool than to speak out and remove all doubt); and probably a few others.

I guess whan you look at those and other things combined, I can see how people were sucked into believe this was something that it wasn't. Again, a hard lesson learned.

Perhaps Storm's way of trying to justify their high fee was to prepare such a big and verbose SoA? What it does do is camouflage the risks involved so that by the end of the document, you are so confused that you simply put all of your trust in your adviser to do the right thing.  I am sure clients would be much more discerning if they had their time over again.

Given gg's definition of a cult, it did have all of the makings of one.


----------



## doobsy (16 December 2011)

Got some clients coming in but looking forward to adding some comments this afternoon.


----------



## doobsy (16 December 2011)

Where to start – first of all – amazing the difference some background gives Frank – see how many people now better understand and therefore are not as critical.

On the size of the SOA – I have no doubt it was there to confuse clients. If you have signed 50 pages before you get to the advice and 80 pages before you get to the fees, what chance do you have.

Also when the same story over and over had been rammed down the throats of clients in the “education process” and the advisers had ready made answers and graphs for all the common questions, then eventually a client will believe all else they thought must be wrong.

I have always been in the camp that I could never blame the investors for getting sucked in, it was the slickest sales pitch out there, but that did not change my opinion that they should not be put in a better position than average joe who did it himself or went to a normal planner and is still down on their investments just because of Storms complete failure and the banks inadequate actions.

Bunyip – I gotta disagree with your post. Google might have helped but we were neck deep in a bull market and the bulls to bears ratio was probably 5:1. The rival firms may have helped but I know we aren’t in the business of ripping apart another plan unless we are going to get the business which adds the extra time and costs to the client. The rest is wonderful but again you look to place a level of trust in the guy telling you 1929 was a long time ago and a 50% fall was seriously unlikely.

Frank – I will go through your stuff and point out what would have set me off – consider it an education process for the forum:

Property – an asset unlikely to bring substantial income or growth – This will bring them down. If there is nothing else this will do it. Property is a legitimate asset class and as you should have known from experience produces income and growth over time. The word that jumps out at me is “substantial”. Listed and unlisted property has struggled badly over the past few years and in some cases done much worse so it wasn’t the answer but excluding it when you are asking for an income driven investment portfolio is plain dumb.

The whole capacity to invest spiel is utter BS. The first para has merit but they then contradict that in the 2nd saying they ignore that and have their own viability testing. Markets had a period of flatness but on the end of a 7 year bull run as part of a longer 25 year bull run.

Modest growth of 6.55% per annum? Modest? Maybe if we are at the start of a bull run.

Lets all pick the time period to show growth well above this – 1980 to recent – perfect. All ords year end figures 1980 = 624, 2007 = 6229. But what about before that – 1969 = 401.88, 1979 = 417.82 Growth was 0.35% per annum

Using “passive” instead of “index” to describe managers was straight up to make clients more comfortable. What are you invested in? Oh a passive manager so it is all ok.

The dividend reinvestment I have always felt was an error by Manny. If he had been taking the cash to the cash dam to fund living expenses etc rather than assuming he could time the sale of units to top up the cash dam I think clients may have even survived. Their shares ratio kept increasing and the cash ratio kept decreasing.

Margin call testing – Whoop de do if you don’t take any action and don’t believe it could happen. They were guilty of both.

Default risk again was a nicey way of making client feel they were getting diversification when in fact they were getting only one asset class. Unless picking individual stocks, any fund would have exposed clients to 40-60 stocks which would have encompassed about 80% of the ASX 200 if you go on volume rather than number of stocks.

Nice of them to decide what was “prudent”. Another good word – note to self – must start using it more.

No mention in the margin call scenarios that should a margin call not be met and clients have their positions extinguished, then they would be left with a house debt. I would see this as something that should have been point #1 in the “Risks and disadvantages” section that was so hard to find.

Adequate arrangements have been made to handle market volatility and associated potential for margin call – LIARS!!!!!!!!!!!!!!!!

The viability testing wasn’t worth a pinch of S#%t. No adviser that uses projections is going to show a client what happens with long term negative returns are they because they end up with no client. Hate projections, always have. Hate the fact it assumes a nice orderly straight line growth scenario. I have asked our software guys to allow me to override in certain years and put in random negative returns to give more realistic idea of what would happen.

Frank, with or without the banks atrocious handling I again say it was storm that screwed you, the banks just held you down and laughed.


----------



## Julia (16 December 2011)

maccka said:


> Hi Julia,
> 
> I believe that many people didn't realise that they didn't understand their 'investment' until it was far too late.



Either you understand something or you don't.   If you don't understand absolutely clearly the process on which you intend to embark, especially with so much at risk, why wouldn't you ask questions until you did?  If such clarification wasn't forthcoming after all this 'education' I just don't get why you would go ahead.  



DocK said:


> Julia, I'd also add that another human trait is to believe and trust our family and friends more than perhaps we should (when it's not their area of expertise), hence the power of word-of-mouth referrals.  Storm relied heavily on referred business from existing clients.



Sure they did.  It was a very healthy bull market.  Everyone and his dog were making money.

You, DocK, at least did understand what you were doing, had assessed the risk and concluded - given your age - the risk was worth taking.  Then you had enough knowledge to get out when you saw it all going bad.  That's so different from blindly following the herd without understanding *why they were making the money they were.*

I might have misunderstood, but I've had the impression that some investors went ahead *despite their confusion about the so called education process*, instead of because of it, just because they were so impressed by the accumulating wealth of family and friends.

We'll never know, of course, but I wonder if these folk had come onto a forum like ASF (and there are plenty of others) and asked that forum "what do you think about this strategy?" and received the inevitable "Don't touch it"    "Very, very risky, especially if you're close to retirement"  etc etc responses, whether they would have been deterred, or if their desire to be part of the action being so enjoyed by people they knew would have allowed them to ignore such caution.




SJG1974 said:


> Perhaps Storm's way of trying to justify their high fee was to prepare such a big and verbose SoA? What it does do is camouflage the risks involved so that by the end of the document, you are so confused that you simply put all of your trust in your adviser to do the right thing.



Yep.  The document seems designed to emphasise the potential client's lack of expertise and encourage the "just trust us" approach.



> Given gg's definition of a cult, it did have all of the makings of one.



I don't know what gg's definition of a cult is but here's a formal definition:


> cult/kəlt/
> Noun:
> 
> 1. A system of religious veneration and devotion directed toward a particular figure or object.
> ...




Hardly applies here imo.



doobsy said:


> Bunyip – I gotta disagree with your post.



What, specifically, do you disagree with in what Bunyip said?


----------



## SJG1974 (16 December 2011)

doobsy said:


> The dividend reinvestment I have always felt was an error by Manny. If he had been taking the cash to the cash dam to fund living expenses etc rather than assuming he could time the sale of units to top up the cash dam I think clients may have even survived. Their shares ratio kept increasing and the cash ratio kept decreasing.




To hazard a guess, fees would have been a motivator for him here...reinvest in more units = greater ongoing fees. 



doobsy said:


> No mention in the margin call scenarios that should a margin call not be met and clients have their positions extinguished, then they would be left with a house debt. I would see this as something that should have been point #1 in the “Risks and disadvantages” section that was so hard to find.




The above seems like an obvious attempt to mislead.

I haven't read the full SoA, but based on Frank's snippets, it seems all they focussed on was the LVR with the margin loan, not their entire LVR.

doobsy, perhaps you can correct me if this is wrong (but it seems right to me)...

We have a scenario where:

Client borrows $400K against house
Combined with $600K of own investments, to make $1m
Then gears this up again to have a margin loan portfolio worth $2m....

So total debt is $1,400,000
Total equity is $2,000,000
Margin Loan LVR is 50% (as they would count the borrowings against the house as equity)
Total LVR is 70%

In this scenario, it would take a fall of 30% in the investment, for the client's total LVR to be 100%:

Total debt still at $1,400,000
Total equity is $1,400,000 (having fallen by 30%)
Margin loan LVR is 71.4% ($1,400,000 of equity divided by margin loan of $1,000,000)
Total LVR 100% (i.e. no equity left)

At this point, the fall in the investment hasn't even triggered a margin call...by the time the margin call comes, the clients will be well and truly in negative equity (assuming my figures are right)! 

My thoughts as I have repeated ad nauseum are that if you are borrowing money, you would want to understand the potential ramifications completely before you sign on the dotted line, particularly when using the borrowings to invest in a volatile asset such as shares.  It would seem that the SoA left no way in which the clients could realistically understand the potential ramifications...and as I mentioned before , the SoA seems like it was so confusing that it should have attracted some suspicion.


----------



## doobsy (16 December 2011)

Julia

Rather than assessing Storms strategy based on what they said in their SOA, I believe a far more effective assessment process would have been to.........


* Jump on Google and do some simple research into stockmarket crashes and margin loans.

I touched on this - I cannot think of how much investment info I read on a daily / weekly basis and yet only 1 source was talking about sub prime prior to 2008. In the middle of the crisis everyone knew but I am sure Frank will back me up and confirm that the advice was stay in, now is the worst possible time to sell, don't crystallise losses etc etc.

* Call half a dozen rival Financial Planning firms and see what they thought of the strategy, and what they were offering themselves.

Again - touched on this. Very expensive and time consuming. Most planners will tell you to go away or will need to go through their whole fact finding process. What happens if the advice is legitimate, by law we can't say the advice is ok without completing the fact find etc and why do that just to tell the client the first adviser is doing the right thing.

Maybe one second opinion without letting them know what the first plan is. If there are MASSIVE differences then you start to question don't you.

* Call some stockbroking firms and get their views.

OK, but a broker only makes money by trading so just as big a conflict here. Don't know any brokers who were telling clients to sell.

<http://www.theage.com.au/news/business/us-to-lead-new-plunge-of-rollercoaster/2007/09/08/1188783556754.html>

Here are 2 supposed well respected economists telling people to get in or stay in. They are employed by banks or brokers, it is their job to be bullish.

* Run a good old common sense test over the strategy – consider that if you triple or quadruple your market stake through mortgaging your home and gearing aggressively, you’re buying yourself a double-edged sword that would magnify your losses once the market inevitably turned bearish.

Absolutely agree but every risk, every question was downplayed. EC was and still is the master of spin. He learnt in the heady MLC insurance days and most of those guys could sell ice to eskimos. By the time Frank hit the seminar he had 10 years of this sort of model under his belt and had heard it all and had the answers ready.

* Realise that even if margin calls had kicked in on time, and even if the investment scheme was all above board without any illegality or collusion or skullduggery, your level of gearing would still ensure that your losses were substantial, even if you could have held on.

No argument.

* Realise from your market research what could have happened to your ability to hang on if there was a repeat of the 1929 crash where the market took a quarter of a century to regain its losses.

No argument but Storm had answers for this. They talked of growth being "exponential" and how technology was now accellerating growth. The old ways were gone and the new ways were taking over. It takes either losses like we have seen since 07 or EXTENSIVE reading to know otherwise.

Margin Loans in 2000 = $7 billion, 2007 = $38 billion. It was becoming normal unfortunately.

* Think for yourself rather than placing so much trust in a bunch of salesmen because they had qualifications and belonged to a well-regarded professional body.

Yes and No - Yes always look and look again when there is money involved. No in the fact that normal advisers are there to help and make life easier, just not Storm advisers.

I personally would never have invested heavily in something that I knew nothing about, particularly when a lot of borrowed money was involved.
And in your personal case, given that you were 65 years old and had more than enough money without any borrowing to produce sufficient passive income to fund a very comfortable retirement, I can’t understand why you felt any need to go near Storm and take on such an ambitious strategy.

Storm were telling him property and cash wouldn't do the job.

Perhaps you can throw some light on this particular aspect – why did sign on with Storm? I’m not asking you about how or why you thought they had a you-bute strategy that was worth mortgaging your home and going into debt for.
I’m simply asking you why you didn’t just buy some houses and a basket of high yielding blue chips shares with a good record of paying paying decent dividends, as well as sink a portion of your funds into cash deposits.
I’m sure all of these investment avenues must have been known to you - these three are the most common and basic investment and asset classes.

I'll let him answer this but maybe he didn't want the hassle. I got plenty of clients that don't want to worry about it so they outsource it to me.
You could have been safe and secure with no debt and no stress.
Did you consider doing things this way, Frank, rather than going down the Storm route? If not, what were your reasons?


----------



## doobsy (16 December 2011)

SJG1974 said:


> To hazard a guess, fees would have been a motivator for him here...reinvest in more units = greater ongoing fees.
> 
> 
> 
> ...




All correct

Many people use home equity to avoid the chance of a margin loan but yes Storm were big on focussing on margin loan LVR not overall gearing levels. Guess they felt with the extra from the house, the extra LVR and the cash dam they would never get sold out. This was the biggest flaw, if nothing else there should have been arrangements to protect the home. But that would have meant selling into a dropping market and their golden rule was don't crystallise losses - markets will always come back and hit new highs.

Their modelling also assumed growth. We have seen no growth for 4 years now, most Stormies would be struggling becuase there has been no growth to help fund the interest costs. LVR's would have been going north in a hurry because of capitalised interest.

Frank - did they suggest capitalising interest in June 2008 to you? Without that tax deduction clients would have paid some tax but it might have given them more scope to handle the market drops if interest was accruing or being paid on a monthly basis.


----------



## Julia (16 December 2011)

Doobsy, thank you for responding to my query about what exactly you objected to in Bunyip's post.  Because you don't use the Quote Tags to indicate which post you are referring to I'd assumed it was Bunyip's latest post.  Apparently it wasn't because in your answer you are apparently referring to a previous post by B.

It's also a bit difficult to understand from your post which are Bunyip's comments and which are yours.  If you have a look at this thread
https://www.aussiestockforums.com/forums/showthread.php?t=2737&highlight=tags

you'll be able to make everything more clear for all of us to read.


----------



## bunyip (16 December 2011)

Doobsy

If I walked into your office and told you I had a million dollars to invest, and asked you to put together a suitable investment plan for me, approximately how much would you charge me?

I think you may have already answered this in an earlier post, but I can’t be bothered trolling back through scores of posts to find it.


----------



## doobsy (16 December 2011)

Bunyip. Each case is individual obviously but to give an example of one that i am in the middle of: 

Simple $1m net after a prop settlement. Charged usual $275 for initial process. As 58yrs and 56 yrs old and not interested in smsf it is to be split 600k / 400k into retail super. We will look to set annual flat fee of around $7,000 as plenty to do in next few years prior to retirement. 

If $$to invest was smaller then might charge an SOA fee depending on how complicated the advice was and how much implementation is involved. Ie rolling multiple supers in, running ttr strategy, setting up sal packaging etc


----------



## Frank Ainslie (16 December 2011)

Solly said:


> More by Elisabeth Sexton @ smh.com.au




Hi Solly,

When I read this article this morning I was most concerned because the implications for we Stormies are significant.

Fortunately, I am now able to report that Sexton has completely misread the judgment which was most favourable to Irving and Oliver . I think she must have received a skewed Press release from a CBA Client.

In fact it's all systems go in relation to the margin loan issues with many sticking points being ruled in favour of Irving and Oliver (and by default, we Stormies).

It goes go to show you that you cannot believe everything you read in the newspapers!


----------



## bunyip (16 December 2011)

doobsy said:


> Bunyip. Each case is individual obviously but to give an example of one that i am in the middle of:
> 
> Simple $1m net after a prop settlement. Charged usual $275 for initial process. As 58yrs and 56 yrs old and not interested in smsf it is to be split 600k / 400k into retail super. We will look to set annual flat fee of around $7,000 as plenty to do in next few years prior to retirement.
> 
> If $$to invest was smaller then might charge an SOA fee depending on how complicated the advice was and how much implementation is involved. Ie rolling multiple supers in, running ttr strategy, setting up sal packaging etc




OK thanks - so an initial consultation fee of $275 to find out the basics of what you’d recommend?

At that rate, assuming that most FP firms would charge similar, I think I’d be checking out a few firms after consulting Storm, particularly if I was staring down the barrel of well over a hundred grand in upfront fees to implement Storms plan, as Frank was.


----------



## Garpal Gumnut (16 December 2011)

bunyip said:


> OK thanks - so an initial consultation fee of $275 to find out the basics of what you’d recommend?
> 
> At that rate, assuming that most FP firms would charge similar, I think I’d be checking out a few firms after consulting Storm, particularly if I was staring down the barrel of well over a hundred grand in upfront fees to implement Storms plan, as Frank was.




I'm sure Frank had his reasons, but he hasn't really explained them.

I still reckon Storm was a cult and the unwitting went in like the children at Hamelin, at a time when we were in a bull market.

gg


----------



## Solly (16 December 2011)

Garpal Gumnut said:


> I'm sure Frank had his reasons, but he hasn't really explained them.
> 
> I still reckon Storm was a cult and the unwitting went in like the children at Hamelin, at a time when we were in a bull market.
> 
> gg




GG 

I had lunch with my Stormer mate today, a sort of monthly catch-up to do a health check on things, so to speak and to celebrate the Christmas cheer.

I mentioned your reference to Storm being a cult. He was quite taken back by that observation. He couldn't agree but he never participated in the bonding trips away or the Gilbert and Sullivanesque events.

Although he couldn't agree with the cult association, he did concede that there were some very passionate advocates of the Storm strategy.

It's a fine line.

S


----------



## Garpal Gumnut (16 December 2011)

Solly said:


> GG
> 
> I had lunch with my Stormer mate today, a sort of monthly catch-up to do a health check on things, so to speak and to celebrate the Christmas cheer.
> 
> ...




Solly mate,

This is from the Oxford English Dictionary.



> cult
> 
> Pronunciation: /kʌlt/
> noun
> ...




So if you take the religion out of it, and the devil etc., the whole Storm show had a charismatic leader, who delivered sermons that nobody understood and which provided them with great wealth before the GFC.

I believe that people taken in, were in thrall at Manny and his minions and the spiel they gave.

And this is not to say they were greedy by the way, but money was the piper's song they followed.

gg


----------



## Julia (16 December 2011)

Garpal Gumnut said:


> Solly mate,
> 
> This is from the Oxford English Dictionary.
> 
> ...




Well, that's a very different definition from that given in my copy of the OED.

I'm a bit disturbed about anyone encouraging the thought that Storm investors had had their minds invaded by some sort of esoteric force.

I'd have thought they were already feeling disempowered enough by having been taken in by Storm, and do not need to be considered as mind controlled.  Seems insulting to me.


----------



## Garpal Gumnut (17 December 2011)

Julia said:


> Well, that's a very different definition from that given in my copy of the OED.
> 
> I'm a bit disturbed about anyone encouraging the thought that Storm investors had had their minds invaded by some sort of esoteric force.
> 
> I'd have thought they were already feeling disempowered enough by having been taken in by Storm, and do not need to be considered as mind controlled.  Seems insulting to me.




So how do you explain the many Storm clients who still feel that Manny was blameless in their misfortune, and that it was all the banks and the GFC.

It is just a view, and I do not expect a cult following because of it.

gg


----------



## Solly (17 December 2011)

Garpal Gumnut said:


> Solly mate,
> 
> This is from the Oxford English Dictionary.
> 
> ...




GG

It's now 3 years ago when Pennie and I were with my Stormer mate and his wife at a Christmas function and it was very obvious to me that Storm had the death wobbles. I remember bringing up the issue that the prognosis was critical and it was probably terminal. This statement was met with disbelieve, I remember that I was very quickly brought to account with statements along the lines, "Don't worry, EC is very experienced in the field, he has huge property holdings and a lot of money, he is well connected, he knows what he is doing, there's nothing to worry about, everything will be alright". 

I don't know about things being a cult but I definitely saw evidence of a charismatic authority beholding my friends. Their belief that EC would get them through this crisis at that time was unshakable. A few weeks later it was my friends who were shaking, shivering and dry retching in a corner of their lounge room after they realised they lost a whole lifetime of effort and savings. That image has stayed with me to this day and probably is the prime motivating force that keeps me on this case. 

S


----------



## Frank Ainslie (17 December 2011)

Garpal Gumnut said:


> I'm sure Frank had his reasons, but he hasn't really explained them.
> 
> I still reckon Storm was a cult and the unwitting went in like the children at Hamelin, at a time when we were in a bull market.
> 
> gg




Hi GG,

I think everyone's getting a little carried away here.  You all make it sound like Storm was a one off. It wasn't!

http://www.themonthly.com.au/monthly-essays-paul-barry-cult-green-2701

The Storm's of this world occur because the Government, ASIC, and those other reponsible for controlling the financial sector can't get it right. We've had so many financial scandals over the years (the Bonds, Skases, and so on) and so many company collapses where investors and creditors have lost everything. It's time the powers that be got their act together and fixed it instead of trimming around the edges.

Whilst these ineffectual systems exist, there will always be victims.


----------



## DocK (17 December 2011)

I'd really like to know if there are actually very many ex-clients who still have favourable feelings towards Manny & Julie.  

I've never been a member of sicag or had much contact with other ex-stormers, so don't have a feel for the way E & C are viewed by the majority.  Given all that's been exposed I find it hard to imagine there could be any supporters remaining, but would be genuinely interested to know how they're now regarded, particularly up north where their base was strongest.  I noticed that the "high profile" supporters that once appeared on their website were very quick to either distance themselves or remain totally silent on their involvement, undoubtedly under advice from their managers in order to avoid the taint of guilt by association?

Would any sicag member care to post what the general consensus of opinion is within that group?


----------



## Frank Ainslie (17 December 2011)

*Parliamentary Joint Committee on Corporations and Financial Services
Committee conclusions on Storm Financial*

_"3.123         All share market investors were exposed to the dramatic market fall of late 2008, and many realised losses on their portfolios. However, few now find themselves in such dire circumstances as Storm Financial's former investment clients.
3.124         As the events of 2008 demonstrated, Storm's model was not capable of withstanding a severe market downturn. Its success was predicated on the market continuing to rise indefinitely. The buffer and LVR settings proved to be such that, when the market fell rapidly, there was insufficient time and capacity to put accounts back into order before they fell into negative equity. The responsibility for this failure to resolve margin calls may well be shared between several parties, but that does not change the fact that the strategy failed.
3.125         The committee is of a clear view that Storm's aggressive leveraged strategy, in combination with the failure of multiple parties to appropriately monitor and manage margin calls at the height of the market volatility, were of disastrous effect for Storm's investment clients. The effects are greatest on those for whom this strategy simply cannot be considered appropriate advice””that is, those who were at or near the end of their working lives, with limited capacity to rebuild from scratch in the event that all their assets were lost and they found themselves in negative equity. This is not to detract from the losses of other investors; they have also suffered markedly from the combination of circumstances that occurred.
3.126         It is not the role of the committee to make findings of blame. It notes, however, a recent statement by Mr Ralph Norris, CEO of the CBA:
In truth, a degree of responsibility rests on the shoulders of banks, individuals and the regulator to a greater or lesser degree, and primarily on Storm Financial, who provided the financial advice as a licensed adviser. 
3.127         The committee also records its serious concerns with regard to the following matters:
·	the apparent provision of one-size-fits-all advice to Storm's investment clients, without the appropriate regard for their personal circumstances (including their life stage and asset base) that section 945A obligations require of advisers;
·	the unacceptable confusion or disagreement between Storm and its lenders about how margin calls would be managed and who was responsible for which parts of this process; and
·	the inappropriate and ultimately devastating delay or failure, particularly by the CBA, to make direct contact with margin loan clients when it became apparent that Storm was not successfully acting as an intermediary to clear margin calls.
3.128         Claims that the banks were unable to provide accurate information about the status of margin loan accounts during the period of extreme market volatility are also deeply troubling. However, the committee notes evidence from the banks that they used the same approach to margin call management with all the advisory groups they dealt with (numbering in the thousands), yet Storm Financial clients were the only group who en masse failed to be appropriately notified by their advisers of the true status of their margin loan accounts. This points the committee towards the inescapable conclusion that there was something about Storm”” be it their staffing and resourcing levels, their computing systems, the degree of leverage in their model, their understanding of their responsibility in relation to margin calls, or a combination of these and other factors””which led to an inability to receive, handle and resolve margin calls during the critical period before their customers went into negative equity and were sold out of the market."_
_The committee does recognise that the rate at which market conditions were changing, taken together with the number of client accounts that would have been going into margin call at the same time, would create a formidable administrative burden. However, Storm is alone among the advisory groups in having ended up in a situation characterised by such catastrophic losses for its clients.
3.129         Finally, the committee acknowledges that it is not necessarily appropriate to recommend reform in response to a particular collapse or event. Isolated corporate failures, no matter how painful their impact for those caught up in them, are not necessarily indicative of, or caused by, regulatory failure. The mass of evidence the committee has received in relation to the collapse of Storm Financial has, however, contributed to the committee's broader understanding of the current operation of Australia's financial products and services sector and of the provision of financial advice. In Chapter 5 of this report the committee considers problematic issues in the sector in a broader context, and in Chapter 6 the committee makes a series of recommendations for reform, which are in part informed by the committee's extensive deliberations on the collapse of Storm."
_


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## Garpal Gumnut (17 December 2011)

A few of the characteristics of cults would apply to Storm Financial.


A charismatic leader.

  An offer of great wealth.

  A feeling of exclusivity.

  Possessing knowledge not available to others.

  A need to enrol friends and family in Storm.

  A continuing faith in the model in spite of setbacks

  Ignoring the opinions of non-believers.

  A feeling of belonging to a group with knowledge not possessed by others.

  Separation from friends not agreeable to the model.
gg


----------



## ROE (17 December 2011)

I read some of the SOA and man that was some crazy long document ... If I have to read something like that I just probably wouldn't be bothered ...too complicated I like to keep thing simple... and I'm complete lost on this section and I been in the market for a while...

"SOA Page 62 - Using Market Volatility"

When I get confused I usually walk away, there are a few companies report I read and the one I got confused I leave it at that.. I read a Macquarie banks book once, I got confused so I leave it alone.


----------



## Julia (17 December 2011)

Garpal Gumnut said:


> So how do you explain the many Storm clients who still feel that Manny was blameless in their misfortune, and that it was all the banks and the GFC.



Given that it's quite beyond me to explain the minds of anyone who decided to invest in a strategy that put their home at risk, let alone double gearing into the market, I'm not sure why you think I should be able to explain whatever they may presently think about Manny.

Are there are really 'many Storm clients' who feel Manny was blameless?  I don't know, but I don't recall many on this thread making that claim.

What we are seeing of course is the focus on blaming the banks because obviously they have more capacity to pay any compensation.

And it's not unreasonable to say the GFC is another cause of their downfall.  Had we still been in that roaring bull market that was happening when they became involved, they'd have all been congratulating themselves about what a great choice they had made in their selection of a financial adviser.



Frank Ainslie said:


> Hi GG,
> 
> I think everyone's getting a little carried away here.



Agree.  



> Whilst these ineffectual systems exist, there will always be victims.



 Exactly what do you want to see put in place and how will whatever that is protect people from believing what they want to?

Extract from Frank's link to the SMH article:


> Dr Irving and Dr Oliver borrowed $13.8 million and $11.1 million respectively to invest in funds based on stockmarket indices marketed by Storm, which collapsed in 2009.
> 
> In December 2008, the bank closed Dr Oliver's account with a balance of $193 and charged him a penalty of $277,000.
> 
> ...



So hard to believe people were using sums like this in such a highly geared strategy.


----------



## Frank Ainslie (19 December 2011)

DocK said:


> I'd really like to know if there are actually very many ex-clients who still have favourable feelings towards Manny & Julie.
> 
> I've never been a member of sicag or had much contact with other ex-stormers, so don't have a feel for the way E & C are viewed by the majority.  Given all that's been exposed I find it hard to imagine there could be any supporters remaining, but would be genuinely interested to know how they're now regarded, particularly up north where their base was strongest.  I noticed that the "high profile" supporters that once appeared on their website were very quick to either distance themselves or remain totally silent on their involvement, undoubtedly under advice from their managers in order to avoid the taint of guilt by association?
> 
> Would any sicag member care to post what the general consensus of opinion is within that group?




Hi Dock,

I am a member of SICAG! It is a Group that is diversified so I expect that some do still feel some loyalty towards Manny. Indeed, many posts I made on that forum in the early days were met with a degree of antipathy by some members whenever I got stuck into Storm. A _"tread softly"_ where Storm was concerned seemed to exist. I think that attitude no longer predominates because many have now come to realize that Storm did the wrong thing.

 It should be remembered that Storm did not burn everyone, just a selected part of its clientele. Further, Storm did have some clients for many years and the directors knew many personally. 

The Manny I saw answering questions in the Worrells’ enquiry was a different person from the one that I saw on two occasions addressing people before Storm collapsed. Then, he was full of confidence and seemed to believe that he had all the answers. I never met the man myself but he certainly had the talk. It’s a pity he couldn’t walk the walk!  

I think Storm and the people that ran it started off with the best of intentions. Somewhere along the way, however, they lost the plot and let their personal interests get in the way of their clients’ interests. Storm’s private deals with the banks had a lot to do with this. Making money became Storm’s prime concern and they lost sight of their responsibilities in so doing. 

Frankly, I cannot believe that a firm the size of Storm, who had been around for some years and kept pumping millions into Ignite, couldn’t come up with a comprehensive software system that was capable of tracking everything. I must therefore conclude that doing so was not in their best interests because clients would have more easily seen how risky it was when the numbers were crunched properly. After all, when you think about it, they had the expertise in Ignite and the resources available to put in a complete customised system. 

Even Storm's SOA's were written in such a way that the statements within contradicted themselves at times when it came to whose responsibility it was to monitor – theirs or their clients. Again, this seems to me like a deliberate ploy to shirk their responsibility if the s**t ever hit the fan.

It all smacks of duplicity to me and I believe the Courts will see it this way as far as the Casimatises  are concerned. Personally, I cannot feel any sympathy for them because they ruined so many people, the majority of whom were past retirement age.


----------



## Julia (20 December 2011)

Let's not get too assured about proposed changes to the financial planning industry actually representing any improvement for clients.

I was a bit shocked to read that so many reputable firms have been swallowed up by the banks, notably in the instance of this report, CBA.



> S THE first generation of financial planners retire and sell their businesses, after a long career of upfront fees and trailing commissions, the big banks are there to buy them out.
> 
> And soon their clients will be switched into financial products that have been manufactured by, or are associated with, their new institutional masters. The banks may pay lip service to independence, but one need look no further than the recent spate of industry deals to see the threat to arm's-length advice.
> Commonwealth Bank, for instance, has cleaned out the entire board of Commonwealth Financial Planning (CFP) in recent months, that is, the licensee that controls the approved product list, and the vehicle into which the bank is wrapping all its acquisitions: CBA Financial Planning and the wholly owned planning practices, Financial Wisdom, Whittaker Macnaught, Bankwest financial planning and lately, Count Financial.
> ...




I'd have regarded especially Whittaker Macnaught as entirely independent.  Presumably these businesses, although now owned by CBA, will continue to trade under their original names, and prospective clients will be unaware of almost certain skewing of advice to CBA products.


----------



## Garpal Gumnut (21 December 2011)

Frank Ainslie said:


> Hi Dock,
> 
> I am a member of SICAG! It is a Group that is diversified so I expect that some do still feel some loyalty towards Manny. Indeed, many posts I made on that forum in the early days were met with a degree of antipathy by some members whenever I got stuck into Storm. A _"tread softly"_ where Storm was concerned seemed to exist. I think that attitude no longer predominates because many have now come to realize that Storm did the wrong thing.
> 
> .




I doubt it Frank.

Most sicag members still support Manny from what I hear, and the evidence is the utter lack of any comments detrimental to Manny or Storm on the pages of ASF.

gg


----------



## Frank Ainslie (21 December 2011)

Garpal Gumnut said:


> I doubt it Frank.
> 
> Most sicag members still support Manny from what I hear, and the evidence is the utter lack of any comments detrimental to Manny or Storm on the pages of ASF.
> 
> gg




You are probably right GG! I must admit that I haven't felt the love at times from one or two posters on this forum whom I suspect are in Manny's camp. However, the facts are undeniable! If they want to bury their heads in the sand, so be it. 

As I understand it, Manny did bail out one or two in the latter part of 2008 and that would command a certain degree of loyalty. Further, many Storm financial advisers are also caught up in all this. By admitting Storm was part of the problem, they probably feel that they weaken their own position.

I have always made my position very clear! _"Don't sleep with the enemy!"_ It is counter-productive


----------



## Solly (21 December 2011)

Garpal Gumnut said:


> I doubt it Frank.
> 
> Most sicag members still support Manny from what I hear, and the evidence is the utter lack of any comments detrimental to Manny or Storm on the pages of ASF.
> 
> gg




GG

I asked my non SICAG Stormer mate about your proposition. What still angers him is why he was given assurances that Storm had processes in place to monitor his investment, to ensure that he would never lose his family home. 

He seems to think that if this monitoring was in place he still would have some of his nest egg and still would have been able to re-enter the market. 

It appears to me that the leading participants in this event benefit from the diffusion of blame in the murkiness of the finger pointing.

I have found that it is hard for some to dismiss the reality, especially where there was such a deep basic belief installed in their psych that they were on the road to Nirvana.

I hope someone responds to challenge my view.

S


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## Mash (21 December 2011)

I wouldn't spit on them (EC & JC ) if they were on fire... in fact I would probably add a can of fuel or 2....and add Ralph to the bonfire as well.. They all disgust me. 
In the beginning of course they courted us and led us to believe they were the salt of the earth caring sharing types...lots of warm and fuzzies about being part of the family.....:cussing::cussing: I think once the float was proposed it all went to hell in a basket .. in our case that seems to be when the hard sell really began.... 

GG
Your cult comment .... IMHO... I think it was more of belonging to a club. Exclusive benefits and deals for it's members..... little did we know it was based on a deal with the Devil!!!!:angry:


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## DocK (21 December 2011)

Frank Ainslie said:


> Hi Dock,
> 
> I am a member of SICAG! It is a Group that is diversified so I expect that some do still feel some loyalty towards Manny. Indeed, many posts I made on that forum in the early days were met with a degree of antipathy by some members whenever I got stuck into Storm. A _"tread softly"_ where Storm was concerned seemed to exist. I think that attitude no longer predominates because many have now come to realize that Storm did the wrong thing.
> (snip)
> It all smacks of duplicity to me and I believe the Courts will see it this way as far as the Casimatises  are concerned. Personally, I cannot feel any sympathy for them because they ruined so many people, the majority of whom were past retirement age.



 Thanks Frank.  One phone conversation with a SICAG organiser was enough to assure me that I wouldn't "fit in" with that group - a couple of negative comments I made about the lack of management by storm hq were immediately met with a tirade about "it's all the bank's fault" etc, etc.  Seems a lot of people in SICAG are happy to absolve the Cassimatii and blame the evil banks entirely 


Julia said:


> Let's not get too assured about proposed changes to the financial planning industry actually representing any improvement for clients.
> 
> I was a bit shocked to read that so many reputable firms have been swallowed up by the banks, notably in the instance of this report, CBA.
> 
> I'd have regarded especially Whittaker Macnaught as entirely independent.  Presumably these businesses, although now owned by CBA, will continue to trade under their original names, and prospective clients will be unaware of almost certain skewing of advice to CBA products.



 More evidence of the difficulty of actually being able to find an honest, unbiased FP.  Seems even when one might think they're getting independent advice, they're often not!  


Garpal Gumnut said:


> I doubt it Frank.
> 
> Most sicag members still support Manny from what I hear, and the evidence is the utter lack of any comments detrimental to Manny or Storm on the pages of ASF.
> 
> gg



 You may be correct about SICAG members GG (or not - I have no knowledge of that group), but if you read this thread from the beginning you'll find plenty of comments very detrimental to Manny & Julie C from ex-storm clients.  Please don't make the mistake of thinking that those you may know personally are representative of the entire group.  As I've often said ex-storm clients come in many shapes and sizes and are not "one size fits all" despite having been treated that way.


Frank Ainslie said:


> You are probably right GG! I must admit that I haven't felt the love at times from one or two posters on this forum whom I suspect are in Manny's camp. However, the facts are undeniable! If they want to bury their heads in the sand, so be it.
> 
> As I understand it, Manny did bail out one or two in the latter part of 2008 and that would command a certain degree of loyalty. Further, many Storm financial advisers are also caught up in all this. By admitting Storm was part of the problem, they probably feel that they weaken their own position.
> 
> I have always made my position very clear! _"Don't sleep with the enemy!"_ It is counter-productive




Frank, I've lost a friendship with the couple who originally enthused about their great good fortune with storm which led to me attending their seminar.  I don't at all blame them for my involvement with storm as that was of my own free will and my decision.  I am aware though that when the #### hit the fan they were "lent" funds from storm's hidden treasure chest to bail them out to the point where they could keep a roof over their heads - how they are ever to pay this money back I don't know.  I don't even begrudge them their good fortune at being the recipients of what is basically stolen money (I don't believe it was the Cassimatis's to give away, unless it came from their own pockets), but the few times I met with them after storm's demise and all the resulting negative media brought the full picture to light they remained staunchly loyal to Manny & Julie and still regard them as personal friends of theirs!  Everything is either the fault of Colonial or CBA in their eyes, and the system/strategy, the millions in divs ripped out by Cassimatis (even the last failed grab), the lack of action to move to cash when they said they would and their inability to monitor margins despite their promoted world-class systems - these are all brushed aside!  I just found it impossible to maintain a friendship with people whose views were so very far apart from my own in that regard, as it was always the elephant in the room that had to be carefully stepped around in order to maintain the peace.  Just became easier to part ways - and I guess that could be the way a lot of marriages are now going between ex-storm clients.  Some just find it easier to pretend to themselves that their "good friends" Manny & Julie didn't knife them in the back, but are actually the caring friends they always knew they were - it's all the bank's fault!  It can be hard to turn your back on a loved one - easier to blame a common enemy.  I think the Cassimatii have been very "clever" in uniting a lot of their ex-clients with themselves in a fight against the banks - in a "the enemy of my enemy is my friend" type of deal.

Post crossed with Mash - evidence that there are some who, like me, certainly aren't fans of the cassimatii.  Agree also that the hard sell began about the time of the proposed float - maybe this is when their own interests became more important to them than ethics etc.


----------



## SJG1974 (21 December 2011)

This may be my memory playing tricks on me, but I seem to recall that it was written somewhere that Manny and Julie and perhaps some other advisers who adopted the Storm strategy did in fact start selling down their own personal shares whilst they were at the same time telling clients to hang on.

Not sure if anyone can verify this or not?


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## Mash (21 December 2011)

SJG1974 said:


> This may be my memory playing tricks on me, but I seem to recall that it was written somewhere that Manny and Julie and perhaps some other advisers who adopted the Storm strategy did in fact start selling down their own personal shares whilst they were at the same time telling clients to hang on.
> 
> Not sure if anyone can verify this or not?




To my knowledge most of the advisers held the line... but there was one in adviser in Sydney ...Anne somebody ....who told her clients she had gotten her funds out but couldn't do the same for them as only Head Office could do it !!!!


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## DocK (21 December 2011)

Mash said:


> To my knowledge most of the advisers held the line... but there was one in adviser in Sydney ...Anne somebody ....who told her clients she had gotten her funds out but couldn't do the same for them as only Head Office could do it !!!!




How can this sort of behaviour go unpunished???  It is absolutely false that only head office could redeem funds and I cannot believe she could get away with telling her clients such nonsense.  When the writing was on the wall I didn't even bother trying to contact my adviser but dealt directly with Challenger and Macquarie to salvage what remained - to tell clients that they had to sit on their hands because head office was unwilling or unable to act on their instructions is monstrously unethical, negligent and downright criminal behaviour imo!  If she were my adviser I'd be doing all in my power to have her lose her FP license - if she still has one.  Beyond belief what some of these people did to clients whose interests they were supposed to be protecting!


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## Julia (21 December 2011)

Solly said:


> I have found that it is hard for some to dismiss the reality, especially where there was such a deep basic belief installed in their psych that they were on the road to Nirvana.



"hard for some to *dismiss* the reality"?  I'd have thought "hard for some to *accept* the reality was more like it?



DocK said:


> You may be correct about SICAG members GG (or not - I have no knowledge of that group), but if you read this thread from the beginning you'll find plenty of comments very detrimental to Manny & Julie C from ex-storm clients.



My impression also.  I can't recall anyone on this thread actually defending the Cassimati.  (I could, of course, have missed this.)


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## Garpal Gumnut (21 December 2011)

Julia said:


> My impression also.  I can't recall anyone on this thread actually defending the Cassimati.  (I could, of course, have missed this.)




Dear Julia,

You know I hate to be pedantic but the plural of Cassimatis is Cassimatis, not Cassimati.

Heaven knows what the title of that wonderful fantasy adventure novel by Yann Martel called the Life of Pi would have been called if you had been it's publisher.

Then again the Cassimati literally pied the savings of thousands of hardworking Australians down the gold plated loos in the Sturt St. Storm headquarters.

gg


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## DocK (21 December 2011)

Steve Borden said:


> Solly
> 
> I am not an expert biologist but my understanding is that the species you attempted to photograph (the _Emmanueli Cassimati_) is notoriously hard to capture on film after certain events.
> 
> ...




There you go GG - I think I've located the original definition for you.  Not strictly grammatically correct, however for the purposes of this thread it has been adopted by some as being the appropriate sobriquet.



Julia said:


> "hard for some to *dismiss* the reality"?  I'd have thought "hard for some to *accept* the reality was more like it?
> 
> 
> My impression also.  I can't recall anyone on this thread actually defending the Cassimati.  (I could, of course, have missed this.)




There were a couple of posters early in the thread who purported to be happy storm clients, but they didn't stay long.....  Also recall a poster who was widely believed to be Manny himself (Cerebus?) - hasn't posted for some time now.


----------



## SJG1974 (21 December 2011)

DocK said:


> There were a couple of posters early in the thread who purported to be happy storm clients, but they didn't stay long.....  Also recall a poster who was widely believed to be Manny himself (Cerebus?) - hasn't posted for some time now.




Yes I recall Cereberus...a couple of posts telling us to stay tuned as the truth will be revealed, only to disappear.

There was also a Dark Leopard who constantly implored victims to make submissions to the PJC but he too disappeared.

They both appeared at about the time the cassimatis.com.au website went temporarily offline due to some maintenance issues which don't seem to have been resolved.


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## Judd (21 December 2011)

SJG1974 said:


> This may be my memory playing tricks on me, but I seem to recall that it was written somewhere that Manny and Julie and perhaps some other advisers who adopted the Storm strategy did in fact start selling down their own personal shares whilst they were at the same time telling clients to hang on.
> 
> Not sure if anyone can verify this or not?




See shibby's post on page 162 of this thread - Anne O'Neill was the person's name.


----------



## SJG1974 (21 December 2011)

Judd said:


> See shibby's post on page 162 of this thread - Anne O'Neill was the person's name.




Thanks Judd...it also appears that Carey Ramm had also heard of others doing the same.


----------



## Julia (21 December 2011)

Garpal Gumnut said:


> Dear Julia,
> 
> You know I hate to be pedantic but the plural of Cassimatis is Cassimatis, not Cassimati.



I'm always happy for anyone to be pedantic about language, so I thank you.
I noticed DocK using the expression, liked it, and decided to adopt it.

To pursue the pedantry, wouldn't the plural of Cassimatis be Cassimatises?


> Plural forms
> The plural form of a noun indicates simply that there are more than one of the person or thing in question. For most nouns, the plural form includes the letter "s" at the end of the word:
> 
> Dogs
> ...




(With apologies to those who are irritated by discussions of grammar and punctuation.)


----------



## bunyip (21 December 2011)

To everyone on this thread, I want to say ‘MERRY CHRISTMAS’. And that includes those who I’ve locked horns with from time to time.

To those of you who are suffering financial hardship, have health issues, or are worried about the future, I hope you can put all that aside over the next week as you join with family or friends to celebrate the joy of the festive season.


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## Harleyquin (21 December 2011)

Certainly agree with you Mash re EC and co, and the co includes their mates in the banking industry.  I'm also in SICAG and don't know anyone who has a good word to say about the c's whatever way you spell it.

GG if there is anyone in SICAG still supporting c and co you can bet the percentage is extremely small.  I know some Sicagers personally who won't post on this forum but have told me in no uncertain terms what they think of storms ex CEO and their comments are the same as Mash's.


----------



## Frank Ainslie (21 December 2011)

bunyip said:


> To everyone on this thread, I want to say ‘MERRY CHRISTMAS’. And that includes those who I’ve locked horns with from time to time.
> 
> To those of you who are suffering financial hardship, have health issues, or are worried about the future, I hope you can put all that aside over the next week as you join with family or friends to celebrate the joy of the festive season.




Yes everyone! Have a very happy Christmas and may the new year be a good one for all of us. I have been digging a ditch with a conspiracy theorist for two days. He makes this forum seem tame by comparison.


----------



## Garpal Gumnut (21 December 2011)

Harleyquin said:


> Certainly agree with you Mash re EC and co, and the co includes their mates in the banking industry.  I'm also in SICAG and don't know anyone who has a good word to say about the c's whatever way you spell it.
> 
> GG if there is anyone in SICAG still supporting c and co you can bet the percentage is extremely small.  I know some Sicagers personally who won't post on this forum but have told me in no uncertain terms what they think of storms ex CEO and their comments are the same as Mash's.




Thanks for clarifying that Harleyquin.

There has been a perception on ASF, which I have shared, that a majority of SICAG, or the Committee of SICAG supported Manny, and this may have lost the Storm litigants some support in their actions against the banks, by some posters, not necessarily me.

It is good that at last this has been made clear.

gg


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## Harleyquin (21 December 2011)

Thanks Bunyip.  Merry Christmas to you and all on the other side of the fence to us Stormies.  Personally we're doing exactly as you've said we should, with family and lots of them.

To all the Stormies out there Merry Christmas and hope 2012 brings some closure to this ordeal.

To our legal team thank you, have a Merry Christmas and a successful outcome in court in 2012 .


----------



## Solly (21 December 2011)

I also wish all those on this thread a very Merry Christmas and a great New Year ! 

I suppose I will be around for a little longer to see the resolution of this saga. I really didn't think I'd be around this long and I thought I'd stay for a few posts and covertly lurk in the background but it has truly been a very interesting and enlightening journey. I reckon I'll be around just a bit longer before retiring this identity.

Those who follow me on twitter know I've been a frequent visitor along the length and breadth of George St over the last few years. I do get to see some very diverse displays of human behaviour, nothing really seems to surprise me any more.

Today as I was waiting in the courtyard for my trusty 1st Assistant Camera to pick me up for the long haul out of the city, I looked up and over my left shoulder I caught a glimpse of a trusty lady I frequently pass. It made me pause and think that she truly has a lot of work ahead of her next year. I then took the below snap of this quite majestic lady that I wish to share, I do hear she puts her sword to good use in cutting fact from fiction.

​


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## SJG1974 (22 December 2011)

bunyip said:


> To everyone on this thread, I want to say ‘MERRY CHRISTMAS’. And that includes those who I’ve locked horns with from time to time.
> 
> To those of you who are suffering financial hardship, have health issues, or are worried about the future, I hope you can put all that aside over the next week as you join with family or friends to celebrate the joy of the festive season.




Well put bunyip. I echo these sentiments.

A new year brings with it new hope, so here's hoping for a prosperous 2012 for all.


----------



## Garpal Gumnut (22 December 2011)

Merry Christmas to all on the Aussiestockforums Storm Financial Group Thread.

It is to the credit of all ASF members that they have put so much time and effort in to assisting Storm investors such as my mate by diligent enquiry and advice.

And it is good to have so many ex Storm investors share their experiences and knowledge with each other and those of us fortunate enough not to have been involved.

We learn from each other and that is what a good thread on a good forum should be all about, in spite of the occasional tiff. 

Let us head in to 2012 with good fortune and more advice, spirited or otherwise, to each other.

I would hope that once all the litigation is sorted that the many good Storm investors who post will stay as posters on ASF.

gg


----------



## DocK (22 December 2011)

Merry Christmas everyone - time might not heal all wounds, but it does sometimes bring perspective.  Treasure your family and friends as they are worth more in the end than any monetary investment.  To all of those who are still struggling I do hope your situations improve soon.


----------



## Mindstorm (22 December 2011)

Merry Christmas, and here's hoping that 2012 is a better year for all of us.

Thank you to those who've offered advice and support.

MS


----------



## Harleyquin (22 December 2011)

I've just read a couple of pages at the start of this thread and PENNYWISE is the first to support storm.  Wonder if PW is still so supportive three years down the track?

As Frank said SICAG is a diverse group of individuals.  Primarily it's a support group, and in the beginning it was our only support, and from my point of view an exceptionally good one.

The majority of us out here in Sicagland have no time for those in whom we placed our trust.  EC had the audacity to send out an email telling us that there was nothing wrong with his advice?!?  Personally that was the first time that we were told by Townsville Head Office that he had anything to do with our financial plan?!  I was furious.

We were never introduced to him or told that he, a complete stranger, was giving us financial advice.  We saw, spoke to and filled out paperwork with our own storm financial adviser, and personally I expected my financial information to stay with our advisor.  We never gave him permission to share something so important with anyone else.

The banks initially said something like this "it's all storms fault, it was their advice, we had nothing to do with it".  Yet it was the banks who allowed storm to mortgage the homes of thousands of retirees, who provided billions in margin loans, accepted inflated figures from storm, obviously checked none of these figures ( a requirement we're now told) and knew that there was no way these people on a pension could service these loans.

The whole storm scenario smacks of major corruption on the part of all those involved in storm and their partners in crime, the Australian banking industry.  I have yet to hear an adequate  explanation from any of the banks involved or the stormy ones.

Personally I still get so angry that we their clients have been held responsible for this mess, for so long, when they the instigators and financial backers of this scam, had the financial know how to make sure that it never happened in the first place.  The banks and storms only defense to date for causing this human disaster is to blame their clients...disgusting is too 'soft' a word IMHO.


----------



## Mindstorm (22 December 2011)

Garpal Gumnut said:


> Thanks for clarifying that Harleyquin.
> 
> There has been a perception on ASF, which I have shared, that a majority of SICAG, or the Committee of SICAG supported Manny, and this may have lost the Storm litigants some support in their actions against the banks, by some posters, not necessarily me.
> 
> ...





Hi GG,

I don't think I've missed one meeting, or court hearing, since all of this began.

I've met and spoken to numerous people in the last three years.  I've never spoken to anyone who supported EC/JC, but I have spoken to those who are very disappointed that they - EC/JC - just disappeared into the woodwork and have never contacted them even though they had been clients from the very early days.

There are many popular misconceptions about Stormies, and just as many about SICAG.

I personally am a great supporter of SICAG, and the committee - and I make no apology for this.  

I don't think anyone would have paid any attention to what happened to the Stormies if SICAG hadn't come into being.

(Even Frank will have to admit that the members of his forum are largely people he first had contact with via the SICAG forum.)

I'm hopeful that everyone will agree - surely - that without SICAG the majority of the Stormies would have been lost.  Having SICAG, and the SICAG forum, has allowed many people to meet and share their experiences.

Personally, I just want to see justice done.  I want this to go to court, and I'm sure that it will because I don't think the banks will settle without a fight.  

I want the documents I have, and the documents others have shown me, to become public knowledge.

I don't care who completed those documents, I want the public and the bank(s) shareholders to see just how easy it was for the banks to lend money to those they shouldn't have.

Obviously, like everyone else involved I want to win in court.  But, even if we lose we'll hopefully have shown some of the population, and some of the bank(s) shareholders and clients, the contempt that the banks had for them too - in lending what was in effect their clients and shareholders money, not the banks'.

The question on a lot of Stormies lips is "Who bought all the Stormies units in Challenger and Colonial First State when we were all sold down?"

I'm hoping that will come into play at some point.

This will be the third Christmas since we were all sold down the river.  There have been many casualties, very many sad stories.  

The Piggy Bank documentary is heartbreaking in some parts.  

The documentary is just the tip of the iceberg, and doesn't fully cover the physical, emotional or psychological damage that has been done to many people, a great number of them elderly.  

People who had worked all their lives, who've never expected anything other than that they'd continue to be financially independent in retirement as they were their whole lives until late 2008.

Much has been mentioned about the 'Storm Holidays'.  I've met less than ten people, so less than five couples, who went on these holidays.  Not everyone took their 'benefits' out of their investments.  The majority that I've met opted to put it back in to ensure a comfortable retirement.  

I guess the question I'd like most to ask of those on ASF who are following this thread is:

How would you feel if you had found out three years ago, or since, that your elderly parents had invested in Storm - without your knowledge - in an effort to make sure that they were not a burden to you - their children - in their retirement?

If I've offended anyone with this post, I apologise unreservedly.  Works Christmas Party - it's a long time since I had one of those to go to!

I hope you all have a wonderful Christmas, and make the most of the time you have with your families.  

If you get the chance - ask your parents - and elderly relatives - what financial arrangements they may have made for their retirement without asking your advice first.

There are a lot of smart people on this site, and I wish that I had found it before Storm found me.

MS


----------



## Mindstorm (22 December 2011)

Harleyquin said:


> I've just read a couple of pages at the start of this thread and PENNYWISE is the first to support storm.  Wonder if PW is still so supportive three years down the track?
> 
> As Frank said SICAG is a diverse group of individuals.  Primarily it's a support group, and in the beginning it was our only support, and from my point of view an exceptionally good one.
> 
> ...




+1

MS


----------



## Julia (22 December 2011)

Mindstorm said:


> I don't care who completed those documents,



Don't you really?  Surely it's a very fundamental point in terms of where the blame falls?



> If you get the chance - ask your parents - and elderly relatives - what financial arrangements they may have made for their retirement without asking your advice first.



Two provisos here:

1.  In some families such a question could be seen to be intrusive and purely an enquiry as to whether you as the potential inheritor have been well provided for.

2.  I'm not sure that too many family members are sufficiently well equipped to offer advice regarding financial matters.

I do understand, however, what has prompted your suggestion.  Just think it's a tricky area.

I'm glad to know you were able to enjoy the work Christmas party, Mindstorm.
Getting on with life is probably difficult for some, but the only way to emotional resolution imo.

I wish you and other ex Storm clients the best for 2012, and thank you sincerely for sharing some of your experiences and feelings with us.


----------



## Mindstorm (23 December 2011)

Julia said:


> Don't you really?  Surely it's a very fundamental point in terms of where the blame falls?
> 
> 
> Two provisos here:
> ...




Julia,

apologies, I spent a long time typing up a response to you, and lost it in cyberspace.

I'll make every effort to respond over the next few days.

Meanwhile, I wish you and your family the best Christmas.

MS


----------



## maccka (23 December 2011)

Harleyquin said:


> As Frank said SICAG is a diverse group of individuals.  Primarily it's a support group, and in the beginning it was our only support, and from my point of view an exceptionally good one.
> 
> The majority of us out here in Sicagland have no time for those in whom we placed our trust.
> 
> ...




+1

HQ's synopsis of where SICAGgers sit with EC/JC is a fair one.  The group is a very large group of people.  There are members who are part of the SICAG forum, members who get emails, others that only have contact through telephone and despite ALL of the different methods members and the committee use to keep in contact with and support one another the focus is on getting through everyday, supporting our new 'family' through the ups and downs and staying united to 'fight the good fight'.

There will be some who still believe EC/JC did nothing wrong and are victims.   There will be some who think they are the devil incarnate.  Most will sit somewhere between the two extremes - probably mostly towards the devil end.  

My personal belief (that I have to hold onto or it will all swallow me up at times) is that those that did wrong will get theirs in the end!  I want a front row seat to watch the carnage (and hopefully check writing) and then I want to have a huge party to get on with my life and get my family back into the groove of theirs again.  

The golden lining from all of this disgusting mess is becoming such good friends with SICAGgers and some from this forum.  I may never have met them otherwise.  It's an honour to have worked alongside SICAGgers and to come to know them personally and as great friends.  

:xmaswave Merry Christmas to all :xmastree and to all a good night!  :wreath

cheers
Maccka


----------



## Mindstorm (23 December 2011)

Julia said:


> Don't you really?  Surely it's a very fundamental point in terms of where the blame falls?
> 
> 
> Two provisos here:
> ...




Yet again Julia,

I've typed up a long responsence to you which has been lost in hyperspace.

I'll try again tomorrow...

MS


----------



## Solly (23 December 2011)

> *"Storm staff face job loss, penalties*
> 
> A FORMER financial adviser for North Queensland-based Storm Financial has been banned from the industry for two years.
> 
> ...




More by Andrew Fraser @ theaustralian.com.au

(Frank, I'm sure you will highlight the error in this report)


----------



## Solly (23 December 2011)

And remember this from Ellen Fanning's 60 Minutes report...

ELLEN FANNING: Emmanuel Cassimatis might admit his failures now but six months or so back, he wouldn't hear a word of it when one of his top sales people, Carey Fraser, tried to warn him that clients were in too deep.

CAREY FRASER: And I just learnt not to question things too much.

ELLEN FANNING: Sounds like you learnt the hard way?

CAREY FRASER: Yep.

ELLEN FANNING: You're really uncomfortable talking about Emmanuel Cassimatis, aren't you?

CAREY FRASER: Yeah, I'd rather not comment.

ELLEN fANNING: Do you feel guilty about it?

CAREY FRASER: Yeah, I feel guilty. I feel ashamed and I just, I just... Honestly, I just don't have the words any more. I want things to be so much different.

Source: http://sixtyminutes.ninemsn.com.au/stories/757649/the-perfect-storm


----------



## Harleyquin (23 December 2011)

Agree wholeheartedly with MS and Maccka's excellent posts.

The untold stories of this disaster, and there are many still to be told, aren't pleasant, so many special lives have been destroyed forever.  I pray for you all.

I still 'fire up' on angry days but fortunately, and I certainly hope this is true for other Stormies, those days are becoming less frequent, due largely to the support of our SICAG family and ASF family.  We also have a wonderful supportive family who are very very special people and I love them all so much.

As MS said this is an excellent forum with some very clever people and I also wish I'd found it prior to Storm finding us and blowing us away with their cyclonic rubbish.


----------



## Frank Ainslie (23 December 2011)

Solly said:


> More by Andrew Fraser @ theaustralian.com.au
> 
> (Frank, I'm sure you will highlight the error in this report)




Hi Solly,

This is all a bit of a joke! These people sell you down the river and then have the opportunity to work back in the industry again once their time is up. We can't sue them because we don't have the money! The PI insurance is useless anyway so what's the point? Bedlam beckons!

The only thing missing here is Mickey Mouse because he's away on a 3 week course to become a financial adviser for Wind Financial; a financial advisory firm specialising in the financial welfare of the baby boomers. Their motto is _"Gone with the wind"_

I'm getting a bad feeling about Mr. C in all of this. He could end up as the PM.


----------



## doobsy (23 December 2011)

> The question on a lot of Stormies lips is "Who bought all the Stormies units in Challenger and Colonial First State when we were all sold down?"




This is an easy one to answer. When CFS and Challenger were told to sell everyone down by EC and crew to "go to cash temporarily" they would have sold to the market.

To explain further - an index fund is simply a fund that invests into the underlying stocks that make up the index in the same weightings. So if you are investing into a mining index fund and BHP makes up 10% of that index, the fund will buy and hold 10% of BHP.

When the instructions came through to sell, the index funds simply sell their individual holdings into the market. 

So who bought them? Everybody and anybody that was buying when those who were panicking were selling. Remember for every seller there is a buyer on the other end. 



> Much has been mentioned about the 'Storm Holidays'.  I've met less than ten people, so less than five couples, who went on these holidays.  Not everyone took their 'benefits' out of their investments.  The majority that I've met opted to put it back in to ensure a comfortable retirement.




400 people average on the Med trip (roughly 10% of the client base) and 2 times that to South Africa (20%) so there were a few that joined in. I don't think many begrudge this as it was fully funded from their cashflow, but on the other side of the coin there is still the issue of Stormies in retirement (sorry Frank got to use you again) that probably would have been living on 60-70K pa that were given living allowances by storm of $90-100K. Those who had been with storm for longer than Frank had done quite well living on 20-30% more than another more conservative investor with the same "personal" not borrowed asset base.

I too hope everyone has a safe and happy break.

Signing off from the darkside


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## Solly (23 December 2011)

GG 

I hear Big Max's daughter is moving into some well known digs on Melton.
Will you be able to swing by in the Arnage to confirm?

S


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## Frank Ainslie (23 December 2011)

doobsy said:


> This is an easy one to answer. When CFS and Challenger were told to sell everyone down by EC and crew to "go to cash temporarily" they would have sold to the market.
> 
> To explain further - an index fund is simply a fund that invests into the underlying stocks that make up the index in the same weightings. So if you are investing into a mining index fund and BHP makes up 10% of that index, the fund will buy and hold 10% of BHP.
> 
> ...




Hi Doobsy,

I must say that your postings of late have been very informative. I particularly appreciated your views on the Storm SOA. It's a pity we didn't get some advice from you before we joined Storm. Believe me, we would have taken notice of what you had to say. The problem is that there's no sign hanging on a financial adviser's shingle saying, "We're the good guys!"

If we do get some money back and are looking to invest again, I'll be seeking out your advice. Don't hold your breath though! I'll be probably burying it in the garden if I have my way.

Incidentally, we may have got a "living allowance" of $8000 per month but we certainly didn't spend that money foolishly but put most of it away. How do you think we are managing to survive today? Further, it came out of our money, not anything Storm generated for us. 

I often wonder just how many Storm clients really knew the true value of their portfolios once the debt had been extracted? Not many I suspect. We heard a lot about people making money in Storm but I have reservations about the true worth of their portfolios. We came in just as the Storm gathered so we didn't see any benefits whatsoever. I doubt that many did from the middle of 2007 onwards.

Don't stay too long on the dark side. It can be detrimental to your financial health. 

Wishing you and yours a happy Christmas.


----------



## Frank Ainslie (23 December 2011)

*I've sent a Christmas present to ASIC via David Bradbury*

"_The Hon David Bradbury MP - Parliamentary Secretary to the Treasurer.
Parliament House 
PO Box 6022
House of Representatives
Parliament House
Canberra ACT 2600

23rd December 2011

Dear Sir,

re:	We accuse ASIC (1) of failing to protect Storm Financial  investors and (2) failing to charge the CBA in like manner to the BOQ and the Macquarie Bank.

As I understand it, ASIC is Australia’s corporate, markets and financial services regulator. It is an independent Commonwealth Government body set up under and administer the Australian Securities and Investments Commission Act (ASIC Act), and, as such, it carries out most of its work under the Corporations Act.

The Australian Securities and Investments Commission Act 2001 requires ASIC to among other things, enforce and give effect to the law. It is also responsible for ensuring that it provides investors with suitable protection by ensuring that consumer laws are abided by. I put it to you that in the case of Storm’s investors, ASIC has failed in its duty of care.

*1.	Failure to protect Storm’s investors*

When we signed up with Storm Financial we had to sign off on page 96 of the Statement of Advice relating to the aforementioned section:

“CORPORATIONS ACT 2001 - SECT 912B 

Compensation arrangements if financial services provided to persons as retail clients 

(1) If a financial services licensee provides a financial service to persons as retail clients, the licensee must have arrangements for compensating those persons for loss or damage suffered because of breaches of the relevant obligations under this Chapter by the licensee or its representatives. The arrangements must meet the requirements of subsection 2. 

(2) The arrangements must: 

[a) if the regulations specify requirements that are applicable to all arrangements, or to arrangements of that kind-satisfy those requirements; or 

[b) be approved in writing by ASIC. 

(3) Before approving arrangements under paragraph (2)[b), ASIC must have regard to:

[a) the financial services covered by the licence; and 

[b) whether the arrangements will continue to cover persons after the licensee ceases carrying on the business of providing financial services, and the length of time for which that cover will continue; and 

[c) any other matters that are prescribed by regulations made for the purposes of this paragraph. 

(4) Regulations made for the purposes of paragraph (3)[c) may, in particular, prescribe additional details in relation to the matters to which ASIC must have regard under paragraphs (3)[a) and [b).

The CORPORATION ACT – SECTION 912B states that it is ASIC’s responsibility to ensure that adequate and extended insurance cover is in place so that compensation is readily available to retail clients if the “licensee ceases carrying on the business of providing financial services, and the length of time for which that cover will continue.”

When we signed up with Storm Financial, (indeed, we signed off on this) we did so on the basis that we were protected by the Corporations Act for wrongdoing, and we could rely on this particular Section of the Act among others.

Since the Storm collapse our former Storm financial adviser, Mr. Stuart Drummond, has been investigated by ASIC who found that he did not  comply with financial services laws in relation to advice he provided to a number of his clients between October 2004 and July 2008. In particular, ASIC found Mr Drummond:

*	made false and misleading statements in breach of s1041E of the Corporations Act 2001,
*	engaged in misleading and deceptive conduct under s1041H of the Corporations Act 2001,
*	promoted the Storm strategy without considering the suitability of the strategy for individual clients,
*	provided Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, and
*	didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.

Yet, we find that we still cannot claim under Storm’s professional indemnity insurance because it was woefully inadequate.

The Storm client losses have been estimated at $3 billion dollars and yet Storm only had a PI insurance cover of between $25m million and $45 million? Further, it was inadequate because it did not extend the life of the cover beyond the 07/08 policy.

The insurer for Storm was AIG/Chartis who provided professional indemnity insurance to Storm for the period 21 November 2007 to 10 December 2008. This was a 'Claims made' policy which only provides cover for claims made against the insured during the policy period. Such policies invariably include a deeming provision, under which the insurance is extended to claims made outside of the policy period, provided they arise from circumstances notified to insurers within it. 

Storm’s PI had no such “deeming clause” so Storm’s PI was not only inadequate in terms of the dollar coverage amount, but even if we had lodged a claim after the event, it would have made no difference anyway. Certainly, we had no chance of notifying the insurer within the period covered even if a “deeming clause” had been written into the policy because we were not aware of any wrongdoing until well after the misbehavior had occurred. Indeed, we couldn’t even find out who Storm’s insurer was until a year or so later. This makes a mockery of Storm’s PI insurance which was not worth the paper it was written on. 

So where was ASIC in all this? You tell me! Certainly, it was not protecting Storm’s clients’ interests by allowing Storm to be grossly under-insured and by allowing it to take out an ineffective insurance policy. By so neglecting its duty, ASIC closed off an important avenue of compensation for Storm’s clients. Why, therefore, should we not be looking to compensation from this Government for our losses?

*2) 	Failing to charge the CBA in like manner to the BOQ and Macquarie Bank.*

I have written five times to ASIC on this subject and I have still not received a reply. I only hope your Department is not dead to the world as well? 

Can you please explain to me why ASIC is not also pursuing the Commonwealth Bank of Australia at this time on the same grounds as the BOQ and the Macquarie Bank; namely,

*	breach of contract (breach of Banking Codes of Practice);
*	contravention of the statutory prohibitions against unconscionable conduct; 
*	liability as linked credit providers of Storm - section 73 of the TPA Act 1974.

Exactly the same circumstances and outcomes were present in CBA’s dealings with Storm Financial. Why has ASIC left the CBA out of the equation?’ In fact the CBA is the worst offender and it is therefore insulting to all those that lost money in Storm to have them excluded. Many former CBA/Storm clients did not accept the CBA resolution scheme proposals. Surely, it is therefore mandatory under our system of law that the CBA be also charged by ASIC for the transgressions mentioned above as well as operating an unregistered managed investment scheme? Why therefore have these charges not been laid?

I hope you will give this complaint the consideration it deserves because these are serious matters and demand a full and comprehensive response from this Government and those that are responsible in ASIC for protecting investors in this country._


----------



## bunyip (23 December 2011)

Harleyquin said:


> Personally I still get so angry that we their clients have been held responsible for this mess




HQ

Who are these people who hold ex-Storm clients responsible for the Storm debacle?

If these people exist, then I’d suggest they’re very much in the minority.


----------



## Julia (23 December 2011)

doobsy said:


> I don't think many begrudge this as it was fully funded from their cashflow, but on the other side of the coin there is still the issue of Stormies in retirement (sorry Frank got to use you again) that probably would have been living on 60-70K pa that were given living allowances by storm of $90-100K. Those who had been with storm for longer than Frank had done quite well living on 20-30% more than another more conservative investor with the same "personal" not borrowed asset base.



Sorry if I'm being obtuse here, Doobsy, but I don't get the above.  What does "were given living allowances by Storm of $90 - $100K" mean, for example?
Given by whom?


----------



## Solly (23 December 2011)

> *"Storm victims' poignant tales*
> 
> VICTIMS of the Storm Financial collapse believe a new documentary will quash a "widespread belief that we were nothing more than a group of greedy punters who rolled the dice and lost".





More by Kieran Campbell @ sunshinecoastdaily.com.au


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## Solly (23 December 2011)

Frank Ainslie said:


> *I've sent a Christmas present to ASIC via David Bradbury*
> 
> "_The Hon David Bradbury MP - Parliamentary Secretary to the Treasurer.
> Parliament House
> ...




Frank, I look forward to you posting the response.
S


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## Judd (23 December 2011)

Mindstorm said:


> ....The question on a lot of Stormies lips is "Who bought all the Stormies units in Challenger and Colonial First State when we were all sold down?"






doobsy said:


> This is an easy one to answer. When CFS and Challenger were told to sell everyone down by EC and crew to "go to cash temporarily" they would have sold to the market.
> 
> To explain further - an index fund is simply a fund that invests into the underlying stocks that make up the index in the same weightings. So if you are investing into a mining index fund and BHP makes up 10% of that index, the fund will buy and hold 10% of BHP.
> 
> ...




And overall, each share trade in respect of Storms index funds would be a mere blip in the market.  When you look at the basket of shares held in STW (ASX 200 index fund)as at 21/12/11, ANZ accounts for 10,290 shares, BHP 12,589.  In the scheme of things, nothing more than small change.  And that is for an index fund with a total value of $1,979,000,000.  The relativities when Storm funds were closed versus STW would have been around the same.

I'd be more interested in who were the dastard(s) who redeemed over $500M from an initial $700m in funds across the various Storm indexed funds as they were sinking into the mire.  Assuming, of course, that the information provided to the Parliamentary Inquiry is correct.  Most odd if advisers were, indeed, told not to sell clients out.

That aside, I do wish all members of this forum the best for the Season.  In particular, whatever the season, I offer my best wishes to those Storm clients affected by a complete breakdown in the application of ethics and moral standards which we all believe should apply.


----------



## Solly (23 December 2011)

> *Storm Financial Advisor Penalties Welcomed*
> 
> Victims of the collapsed North Queensland company, Storm Financial, have welcomed penalties against three former financial advisors. One has been suspended by the corporate watchdog for two years and the others must take courses and have their work scrutinised.





From ABC PM http://www.abc.net.au/pm/content/2011/s3397471.htm


----------



## Harleyquin (23 December 2011)

Bunyip when storm first collapsed, one of the first things I read in the media, somewhere, was that we were all a mob of greedy investors.  I saw another financial advisor who told me that we had a good legal case, so I rang a legal group and the fellow on the other end of the phone said "you people crow in the good times and cry when you get burnt".

At that time I had no idea what he was talking about as I thought we were simply people seeking financial advice who had asked for a conservative financial plan.  We told our advisor "low to no risk" and our paperwork supports this.

Obviously we made several mistakes, number one believing and trusting financial advisors and banks.  I haven't seen the documentary "Piggy Banks" as we haven't been close enough to any screenings.  I think that we are now seeing more understanding from those not involved than we ever saw three years ago.  Hopefully that will continue as I would like to see something positive done to make it more difficult for a storm scenario to reoccur.

The government, financial and legal industry need to acknowledge where the true problems lie and not just brush it under the carpet so that it can happen again.  We, the Stormies, have been far too badly burnt by this and we have two main options.  

1.  To lie down and die or
2.  To fight for justice

I think you will find that most of us would rather die fighting for justice, after all we have nothing of any real monetary value left.  We've all been backed into a corner and we will continue to fight.  We need an honest and trustworthy financial system in this country and until we get one the general population needs to be aware that under our present system they can be fleeced by the very people we need to seek advice from.

As Frank has said, financial people don't have a sign on their doors saying "we're the good guys".  We've even been told 'get over it and move on".  My response to this is "why should we sit back and accept such criminal behavior".  The other thing is, storm is not the first, or the last to do this to their clients.

I feel for the good guys in the financial world, they too will suffer the fallout from this.


----------



## Solly (24 December 2011)

> *"ASIC punishment of Storm advisers 'weak'*
> 
> A FORMER investor with Storm Financial has expressed disgust at "weak" responses from the corporate watchdog to disciplining rogue advisers with the financial planning company."




More by Tony Raggatt @ townsvillebulletin.com.au


----------



## Frank Ainslie (24 December 2011)

Solly said:


> More by Tony Raggatt @ townsvillebulletin.com.au




Hi Solly,

This is disgraceful! There were a considerable number of Storm financial advisers that stepped over the line. I know this from reading countless submissions made to the PJC and other stories I have read on the Internet. Yet, only a few Storm advisers have been taken to task, and they have been suspended rather than kicked out of the industry altogether.

You cannot join the police force if you have a criminal record. Why therefore should advisers that have destroyed people's lives now find employment as financial advisers again once they have served their time? 

To my mind, this is just one more example of just how weak ASIC really is in punishing the wrongdoers. It makes one wonder now just how hard ASIC will come down on the directors of Storm? 

It's a good day for those Storm financial advisers that have escaped the net but it's a black day for their clients who placed their trust in them only to be deceived.

It's Christmas so it's a good time to get drunk. When I recover, I'll be expressing my disgust to ASIC in no uncertain terms. Watch this space!


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## Solly (24 December 2011)

Frank Ainslie said:


> Hi Solly,
> 
> This is disgraceful! There were a considerable number of Storm financial advisers that stepped over the line. I know this from reading countless submissions made to the PJC and other stories I have read on the Internet. Yet, only a few Storm advisers have been taken to task, and they have been suspended rather than kicked out of the industry altogether.
> 
> ...




Hi Frank

Oh dear, I just had a strange image of you propped up on a bar stool in the Public Bar at the Ross Island, with GG buying you your sixth schooner of NQ Lager, in an hour... 

I'm sure your response to ASIC will be excellently penned as usual.

Have a great Christmas and I hope you can put those Storm woes to the background for a few days !

S


----------



## Frank Ainslie (24 December 2011)

Hi Doobsy,

Hi Doobsy,

No doubt you are away enjoying Christmas and I am about to do the same so answer this when you can!

I have an important question for you. From the extracts I have given you so far of the SOA, _"How long would it take a half-way decent financial adviser to ascertain that this was a high-risk plan suitable to about 1% of investors?"_ One needs to bear in mind when answering this that the SOA was some 107 pages long. One hour, two hours, or how long to assess the risk nature of this proposal?

I will be writing again to ASIC after Christmas and I need your professional input (no names mentioned). If anyone else in the industry would care to comment, please feel free to do so. Many thanks!


----------



## Garpal Gumnut (24 December 2011)

Frank Ainslie said:


> Hi Solly,
> 
> This is disgraceful! There were a considerable number of Storm financial advisers that stepped over the line. I know this from reading countless submissions made to the PJC and other stories I have read on the Internet. Yet, only a few Storm advisers have been taken to task, and they have been suspended rather than kicked out of the industry altogether.
> 
> ...




Totally agree Frank, totally agree.

Get in the ear of your local member as well, the new arrangements by Minister Shorten will guarantee a repeat of this down the track.



Solly said:


> Hi Frank
> 
> Oh dear, I just had a strange image of you propped up on a bar stool in the Public Bar at the Ross Island, with GG buying you your sixth schooner of NQ Lager, in an hour...
> 
> ...




That is a great idea Solly, we can come to some arrangement to book the place out on a weekend and I am sure the Townsville mob would arrange billets for the out of towners.

Once the civil litigation is done, and a few, and it will only be a few unfortunately, have gone to the Creek to serve time, we can arrange something.

A few Stormers are so impoverished that they would barely afford a good night out, and like my mate, proud self sufficient people and may need a bit of encouragement to come.

The Ross Island Crew have quite disimilar characteristics to Storm Financial and the Banks, however they get punished more severely by visits to the Creek for minor transgressions, but the main difference is that they ARE HONEST, GOOD PEOPLE,  and would host the Stormers royally. 

Perhaps ASIC might be persuaded to shout the bar, it would be the only useful thing they will have done in this whole muppet saga.

gg


----------



## Frank Ainslie (24 December 2011)

Julia said:


> Sorry if I'm being obtuse here, Doobsy, but I don't get the above.  What does "were given living allowances by Storm of $90 - $100K" mean, for example?
> Given by whom?




Julia,

It should be remembered when considering ‘Living Expenses’ that any expenses we would incur were included in Storm’s viability assessment that would still leave room for Storm’s plan to be effective. We know now that this wasn't so!

_“Living Expenses"_ were the amounts paid to us (supposedly from the earnings on our shares) to cover everyday expenses (our utilities and everyday living expenses including an income). We also paid our housing loans from these living expenses.

During the 15 months we were in Storm, we received $136,000 for “Living Expenses’. We paid out $51,645 in house repayments leaving a balance of $84355 or $5,624 per month. When I say, _"we received"_ it's a bit of a misnomer. We were actually paying ourself (under the arrangement set up) from our CMT account.

The problem was that these expenses were being paid directly from our ‘Macquarie Cash Management Account’ (cash reserve) which was not being replenished sufficiently by any dividends from our shares. Consequently, these cash reserves were eroded away over the course of time.

_“SOA Page 50 - Recommendations - Residual Reserves of approximately $160,000 plus any funds not  earmarked for your immediate use in the Macquarie Investment 
Management Limited Cash Management Trust." _

This amount was boosted by additional payments we subsequently made into the CMT account.

_“SOA Page 85 - Cash reserves of around $285,000 will be your primary form of protection from the effects of varying returns from your Share Investment. The plan also builds in capacity to take advantage of buying opportunities and handle this inevitable market volatility. This capacity is incorporated within the unused capacity for borrowing using the Shares as security for the loans (these are termed Margin Loans). 

As explained, these Cash Reserves are a part of your Investment, and under no circumstances should they be viewed as finance for consumption spending. They should be maintained within business-use accounts, with close monitoring of the spending that is financed from these funds. These Reserves should only be spent following consultation with us; failure to discuss the use of these funds prior to spending decisions being made may jeopardize your Plan. Of course, any additional savings into these accounts will facilitate extra building steps in your investment, and so shorten the time taken for you to be able to live off the income from your capital.”_
This last statement seems to be a contradiction because we were under the impression that we would be able to live off the income from our capital from the get-go! Wasn't that what Storm's viability process was all about?


----------



## Frank Ainslie (24 December 2011)

Garpal Gumnut said:


> Totally agree Frank, totally agree.
> 
> Get in the ear of your local member as well, the new arrangements by Minister Shorten will guarantee a repeat of this down the track.
> 
> ...




Hi GG,

Off now to enjoy Christmas. 

I'll be in this if they take IOU's?


----------



## SJG1974 (24 December 2011)

Frank Ainslie said:


> Hi Solly,
> 
> This is disgraceful!




Agree 100% Frank. I know of a guy who was caught defrauding investors in a failed movie, who became a financial adviser and was then caught misleading clients who then started up his own advice business and has now been banned for being an adviser for 5 years. He will find some other way to make a quick buck at the expense of others. No jail time, minimal financial penalties...absolutely no deterrent from offending again. There would be hundreds of people who have done similar.

ASIC have no teeth at all.


----------



## ROE (24 December 2011)

Harleyquin said:


> Bunyip when storm first collapsed, one of the first things I read in the media, somewhere, was that we were all a mob of greedy investors.  I saw another financial advisor who told me that we had a good legal case, so I rang a legal group and the fellow on the other end of the phone said "you people crow in the good times and cry when you get burnt".
> 
> At that time I had no idea what he was talking about as I thought we were simply people seeking financial advice who had asked for a conservative financial plan.  We told our advisor "low to no risk" and our paperwork supports this.
> 
> ...




I dont think this will ever happen, that the capitalism model you get the good and the bad that goes with it, no reform or law will stop the scam or shonky shops..

people just have to be more vigilant when it comes to their money and taking on advices.


----------



## Solly (24 December 2011)

> *"Family ready to settle in to former Cassimatis mansion*
> 
> AN extended Townsville family with young children is set to enjoy the luxury that was once the domain of infamous Storm Financial founders Emmanuel and Julie Cassimatis.
> 
> And in a twist, it is believed the buyer of the mansion on Townsville's Melton Hill is Amy Tomlinson."




More by Tony Raggatt @ townsvillebulletin.com.au


----------



## Harleyquin (25 December 2011)

There is every chance ROE that you're right and 'this may never happen'. However, what is very obvious is that the present system is grossly ineffective or the storm debacle would never have occurred.

Do we sit back and allow this level of criminality to continue to reoccur or do we look for a more effective solution - whatever that maybe.

I don't believe that the legal changes proposed by the powers that be are going to have any positive effect in stopping future collapses either, however you can't tell me that we can't all put our heads together to come up with something more positive.

I know the much used slogan 'it's human nature', doesn't mean that those of a criminal nature need to be tolerated or accepted by the rest of us.

Agree wholeheartedly that we all need to be more vigilant when it comes to our own money.

However I also believe that our ASIC and FPA approved financial planners; selling their suitably qualified financial advice to those who feel they need it and are prepared to pay for it; and the Australian Banking system who back these financial planners also need to be vigilant with their clients money.  If they don't - they are simply common criminals and need to be treated as such.

What the Commonwealth Bank did to their Storm clients was criminal.  Somebody, in fact several employees, of that bank, knew exactly what they were doing and their actions are highly questionable, to put it very lightly!

Criminals need to be punished not accepted irrespective of what perceived position they hold in our society.  Let's not go backwards in this country, after all, we're supposed to be living in a democracy.  Let's get seriously democratic and stand up for what is right.  It's time for us all to say 'enough is enough'.


----------



## Julia (25 December 2011)

Harleyquin said:


> There is every chance ROE that you're right and 'this may never happen'. However, what is very obvious is that the present system is grossly ineffective or the storm debacle would never have occurred.



Perhaps remember that the 'system' did not fail everyone.  It is quite wrong to extrapolate from the shonky behaviour of the Storm principals that the whole financial system is dysfunctional.


----------



## medicowallet (26 December 2011)

SJG1974 said:


> Agree 100% Frank. I know of a guy who was caught defrauding investors in a failed movie, who became a financial adviser and was then caught misleading clients who then started up his own advice business and has now been banned for being an adviser for 5 years. He will find some other way to make a quick buck at the expense of others. No jail time, minimal financial penalties...absolutely no deterrent from offending again. There would be hundreds of people who have done similar.
> 
> ASIC have no teeth at all.




As long as he paid his taxes to the ATO, he will be fine!!

Agree with Julia,  just because storm and the banks screwed over the clients (they should definitely be reimbursed to the LVR, ie 5-10% of their value - and if there ppor mortgage takes them into negative equity, then that is not the bank's fault), it does not mean that the rest of the industry or even SMSF are shonky.


----------



## Garpal Gumnut (26 December 2011)

From the first page of this thread in Oct-Nov 2005





Garpal Gumnut said:


> Thanks all
> 
> I've heard all of the above.
> 
> ...






Duckman#72 said:


> I don't believe that they are for everyone as their methodology is very aggressive. I personally don't agree with it. Below are some bits of information I've taken from Storm seminars held.
> 
> Their actual investments are quite solid. Nothing o/seas, just Aussie shares/managed funds of which a fair portion are index tracking investments. But the main difference is the level of gearing. It is just debt on debt. The moment portfolios are re-valued upward they increase the debt accordingly.
> 
> ...




Wisdom is always easy in hindsight.

gg


----------



## Julia (26 December 2011)

Garpal Gumnut said:


> From the first page of this thread in Oct-Nov 2005



It was actually 2008.



> Wisdom is always easy in hindsight.
> gg



Not so much hindsight at that early stage, gg.  The quotes from both yourself and Duckman at that stage make clear the dangers of the Storm model.


----------



## bunyip (26 December 2011)

Julia said:


> Perhaps remember that the 'system' did not fail everyone.  It is quite wrong to extrapolate from the shonky behaviour of the Storm principals that the whole financial system is dysfunctional.




So true.
This so-called ‘system’ which some on here consider to be seriously flawed and dysfunctional has, in fact, burnt only a small minority of investors overall. Hundreds of thousands of investors, possibly millions even, have had no problem with it.
And of the small minority burnt, it’s fair to say that it’s not the system alone that’s burnt them, but how they used the system.
Give two people the same kind of car – one will drive safely, the other will drive like crazy and end up getting hurt. All cars have the potential to harm us, yet we can still use them safely if we use them sensibly.
Same story with capitalism - the present ‘system’ in respect of investments, banks, wealth creation etc can be used to produce great profit, or much heartache, depending on how we use it.

There’s been much discussion on here about how we need changes to legislation so as to protect investors from being fleeced. Unfortunately though........
It’s not possible to stop unscrupulous people from operating on the edges of the law, or outside the law. 
It’s not possible to remove all risk from investment. 
It’s not possible to make people think for themselves and adopt a prudent and  cautious approach to investing.

We don’t yet know what the eventual outcome of this Storm debacle will be. 
But one thing certain is that irrespective of legislation, burnt investors will be as much a part of the future as they are a part of the past. As will successful investors.


----------



## Harleyquin (26 December 2011)

Agree the system didn't fail everyone but then I never said that it did.


----------



## Frank Ainslie (26 December 2011)

bunyip said:


> So true.
> This so-called ‘system’ which some on here consider to be seriously flawed and dysfunctional has, in fact, burnt only a small minority of investors overall. Hundreds of thousands of investors, possibly millions even, have had no problem with it.
> And of the small minority burnt, it’s fair to say that it’s not the system alone that’s burnt them, but how they used the system.
> Give two people the same kind of car – one will drive safely, the other will drive like crazy and end up getting hurt. All cars have the potential to harm us, yet we can still use them safely if we use them sensibly.
> ...




Bunyip,

_"And of the small minority burnt, it’s fair to say that it’s not the system alone that’s burnt them, but how they used the system."_

If you think that a 3 billion dollar loss by a small minority (if 12,000 or so investors can be considered such) isn't something to be concerned about, they must have put too much Sherry in your Christmas pudding! The system that was in place led to these losses. Therefore, it needs changing!  It should also be remembered that it wasn't how the Storm investors used the system, (they were just the victims of it) but rather how Storm and the Banks used the system to further their own ends. If the lessons that history teach us are ignored, these financial disasters will continue to happen.

_"It’s not possible to stop unscrupulous people from operating on the edges of the law, or outside the law." _
Under the current laws, you are probably right! That's why we need laws that work for the investors, not those shonky financial advisers or banks in the financial sector that seek to exploit the loopholes!

We also need effective penalties for those that transgress. If someone robs a bank of twenty thousand or so, they get more time than a financial adviser or a bank that diddles people out of millions. Punitive measures are needed to act as a deterrent. Not just fines but some real jail time. Until this Government gets some backbone, this inequity will continue to exist in the financial sector. 

_"It’s not possible to remove all risk from investment."  _
Yes, investing will always contain some risk but investors should not be expected to also shoulder the risk of being duped out of their money by financial advisers and banks that do the wrong thing. It's up to this Government to put safeguards in place that will protect the public from the type of abuse (Storm for example) that seems to arise on a regular basis. It can be done but this Government and preceding Governments seem to lack both the will and the know how to do so! To say that nothing can be done because it is all too hard is a sad inditement of the people at the top's capacity to introduce measures that will protect investors interests.

_"It’s not possible to make people think for themselves and adopt a prudent and cautious approach to investing."_
We paid financial advisers to do the thinking. In so doing, we relied on the regulations then in place and such things as PI insurance to ensure that we had an avenue of recourse if the people we were dealing with did the wrong thing. That was our first mistake! Now we are paying for this government's ineptitude. 

It is not the investors that need to adopt a prudent and cautious approach, but rather those that we place our trust in to do what we ask of them rather than play Russian roulette with our money. 

Until this government is willing to fix the holes in our financial sector, another Storm and many more are just around the corner. Whilst we as a nation are prepared to accept that nothing can be done, nothing will be done.


----------



## Mindstorm (26 December 2011)

Hi Julia and all,

Trying once more to answer your post Julia, and hoping I can this time around.

Will try to do it in two posts this time.....

It's taken me a long time to come to terms with who filled in what forms, and who should/could/may be to blame.

I take full responsibility for signing some of the forms, and for being trusting/stupid enough to allow them to be completed after I had signed.

But surely the person who was going to lend me money should carry the greatest responsibility for accepting the content of the forms no matter who completed the form?

Should the banks not have had someone who had to verify what information those forms contained, to check that the information provided was correct, and to decide whether or not they were willing to accept the information provided in the forms?


MS



Julia said:


> Don't you really?  Surely it's a very fundamental point in terms of where the blame falls?
> 
> 
> Two provisos here:
> ...


----------



## Julia (26 December 2011)

Harleyquin said:


> Agree the system didn't fail everyone but then I never said that it did.



On the contrary, HQ, see your remarks below:



Harleyquin said:


> We need an honest and trustworthy financial system in this country and until we get one the general population needs to be aware that under our present system they can be fleeced by the very people we need to seek advice from.



The 'general population" has not been fleeced by anyone.



Harleyquin said:


> There is every chance ROE that you're right and 'this may never happen'. However, what is very obvious is that the present system is grossly ineffective or the storm debacle would never have occurred.



Please stop blaming "the system" which has served the great majority of investors perfectly well.



> Agree wholeheartedly that we all need to be more vigilant when it comes to our own money.



You have similarly agreed many times before but still you keep blaming "the system" as being the cause of your downfall.



Frank Ainslie said:


> Bunyip,
> If you think that a 3 billion dollar loss by a small minority (if 12,000 or so investors can be considered such) isn't something to be concerned about, they must have put too much Sherry in your Christmas pudding!



12,000 investors is not even a blip on the overall market.



> The system that was in place led to these losses. Therefore, it needs changing!



Yeah, right.  See my above comments to HQ.



> It should also be remembered that it wasn't how the Storm investors used the system, (they were just the victims of it)



Oh dear, if Storm investors were simply victims of The System, how is it that other users of The System have not been fleeced?



> It is not the investors that need to adopt a prudent and cautious approach,



If you actually believe this then you're in a perfect position to be taken advantage all over again.


----------



## Julia (26 December 2011)

Mindstorm said:


> Hi Julia and all,
> 
> Trying once more to answer your post Julia, and hoping I can this time around.
> 
> ...



Hello Mindstorm,
Simple answer to your final paragraph:  Yes.  I'd have thought so.
But my point was that throughout this thread there have been many assertions that the figures in the application forms were not those supplied by the clients.  This is what I think absolutely needs clarification.

Given the obfuscating nature of the SOA put up here by Frank earlier, I'd not be surprised to learn that the application forms were similarly complex and the trusting investor could fairly easily be persuaded to "just sign here".  
You'll never do it again, of course, but you will not have been the first to be so assured and you won't be the last.
Hope the coming year is better for you.


----------



## Mindstorm (26 December 2011)

Hi Julia,

Well, my response to the first part of this quote from you has successfully appeared on the forum.  So, here goes for the second part...

I was always aware of my parents wishes as to what they wanted to do in their retirement and their deaths, and to whom they bequethed what, (or not).  No family squabbles.

My own children were/are aware of my wishes for my retirement and death, and unfortunately, (now that they are adults), I'm aware of their wishes too.

There is no embarrassment in my own family of what we 'wish/expect for/would not accept' in old age, retirement, or death.

If someone in my family asked me questions about my wealth/lack of wealth, I'd be very open with them.  Why wouldn't I be?

I have to say that I wouldn't discuss my financial wellbeing, (something I had pre Storm), with anyone outside my close friends or family.

As it is, post storm, my children are now going to have to look after me rather than me looking after their children, my grandchildren.

They've always told me to spend what I have enjoying myself while I'm here.  They realise that I spent much of my earnings earlier in my/our life making sure that they were well educated enough to look after themselves in life and retirement.

I think my (family's) attitude is very healthy.

I can't begin to think what family you have who would think that you trying to help them financially could be put down to you being intrusive.

As to financial advice from family?  I would have welcomed that.  However, we are the oldest in our family, and we thought that we'd been given 'good advice' by Storm.

Our family had no reason to think otherwise.  I'm sure that if they had, that they'd have told us, and we'd have maybe looked at it again.

20/20 hindsight.

Luckily, the Australian Public will pick up the tab for our imminent retirement.

MS











Julia said:


> Don't you really?  Surely it's a very fundamental point in terms of where the blame falls?
> 
> 
> Two provisos here:
> ...


----------



## Mindstorm (26 December 2011)

Julia said:


> Hello Mindstorm,
> Simple answer to your final paragraph:  Yes.  I'd have thought so.
> But my point was that throughout this thread there have been many assertions that the figures in the application forms were not those supplied by the clients.  This is what I think absolutely needs clarification.
> 
> ...




Hello Julia,

Firstly I have to say that I am so pleased that ASF has finally allowed me to reply to your post.  I am very old fashioned and would hate to think that anyone here (yourself included) thought that I had ignored a question.

Given that I completed the initial Storm forms so honestly, and so much to our particular detriment, I trusted that we were signing up for the 'same' deal as HQ or Frank.

Apologies for the pun Frank, but we were totally frank in our completion of the initial Storm forms.

I would imagine, (more than imagine, given the Stormies I've met so far), that we were totally honest because that was in our nature.

I didn't set out to try to convince anyone that we were any better off than we actually were.  I didn't tell anyone that we spent or didn't spend any money on any trivial thing.

I should try to find that initial form given to me by our 'advisor' to show ASF readers how many trivial questions we had to answer so that storm could see how every last cent we had was spent.

For your information, Julia and all here, the figures in our initial application to the bank (s) for loans were true as far as I can ascertain.

Unfortunately, they were not enough for the bank (s).

Even more unfortunately, for who?  Us?  The bank (s)?

The bank (s) in question still gave me/us the loans that we did not fulfil the bank (s) 
requirements for.....

I look forward to the banks being asked questions in court next year.

I think that it will be an eye opener for many of us/you, especially those who are bank shareholders.

Who knows what will happen in court next year?  But, we Stormies will fight to the last to try to save anyone else going through the terrible time that we have had to.

Take care Julia, and I wish that we were all half as smart as you appear to be....

MS


----------



## Solly (26 December 2011)

Mindstorm said:


> Hi Julia and all,
> 
> Trying once more to answer your post Julia, and hoping I can this time around.
> 
> ...




MS

You have touched on a point that is of interest to me and my colleagues.

I wonder what compliance and governance practices and procedures were in place within these publicly listed institutions to verify the data that was presented in the documentation.

Who were these authorised officers within these organisations who had the delegated authority to verify and approve these submitted documents ?

I wonder what influence this will have with matters that are before the bench.

S


----------



## Julia (26 December 2011)

Mindstorm said:


> Given that I completed the initial Storm forms so honestly



I don't think any of us have ever doubted that Storm investors quite properly answered the questions on the application forms.  But there have been assertions along the line that some either had their answers altered amongst the application process or who allowed either Storm or the banks to complete the forms.
I can't now remember exactly what was said but that was the general thrust and is what so took my attention.




> I should try to find that initial form given to me by our 'advisor' to show ASF readers how many trivial questions we had to answer so that storm could see how every last cent we had was spent.



No need, MS.  Your integrity is not in question.



> The bank (s) in question still gave me/us the loans that we did not fulfil the bank (s)
> requirements for.....



This is where I become puzzled.  When you received the documentation for a loan which was considerably more than you'd applied for (and for which you fulfilled the lending criteria presumably), did you just accept it, not question how you came to be given such an unexpected amount?
There may be something I'm not understanding about the whole process here.



> I wish that we were all half as smart as you appear to be....
> MS



 There is nothing 'smart' about me.   I'm no more astute than the average person who has attempted to become financially literate.


----------



## kincella (27 December 2011)

here is an interesting example, of a very distant member of my extended family...
an, in- law...

they were immigrants from Russia in the 1960's. .they both worked hard in labouring jobs all their lives, built a beautiful  2 storey mansion...their pride and joy, they had one son, they doted on....life was good...they had paid off the mortgage many years ago...and were living comfortably....both were in good health...in their 60's....they finally started looked at retirement, and their plans for same...

the found a financial planner....they had been recommended to seek out same....to reduce their assets, and all the games, in order to acquire a higher age pension....

the wife had only ever had casual or part time work, although consistent and regular....she did not realise there was almost no compulsory super attached to this work...
his main job from the 1960's until 2000 provided little compulsory super...since it was only introduced about 1986
so there was little real savings, apart from the family home....to show for all their hard work
these people are non professionals, they were labourers, there was no university or higher education in their life.....
apart from going to work on time, looking after their only son, and watching soccer on tv....there was not much else that took their interest....they were more than happy with their lot in life....

until they started to add up, what funds they would need in retirement....and the current age pension would not provide it

so when a street smart financial planner, said he would make them rich beyond their wildest dreams.....that they were already rich and did not know it....that they were already millionaires....but were not acting like  millionaires...

they jumped at the offer.....they did not have the nous, or experience, or ability to know they were being conned......
they believed this 'professional advisor'...and signed up to make millions...

they scoffed over, dismissed the fine detail,  the legal advice, and warnings...
all their trust was in this one person.....they were not in a postiion to evaluate the proposition before them.....they were like most people...in their position...trying to save money, and most of all, believing in the person...who supposedly held, a superior position of power,,,

***the saying...if it sounds too good to be true...then run for your life....is most obvious...but never heeded...

fast forward just 3 years.....he does not know exactly how, but apparently he signed over his home, the mortgage became a margin loan, and he was the owner of some very dreadful, penny dreadful mining shares.....
the bank evicted him from his home, he rented a house, to remain in the same suburb...to avoid embarrassment from family, friends and neighbours.....it was costing $450 pw rent....he was receiving $450 a fortnight in unempoyment benefits.....the wife went back to full time work....it was all going downhill...

the only child, a son, who had been led to believe he would inherit the family home...is devastated....his marriage is holding together , but only just...

the father's health deteriorated, from the stress, he had a stroke, and other complications...he has been in intensive care now for 3 months....it is unlikely he will ever recover
the son and his new family, with 3 young children, have tried their hardest, to please the parents....they have moved out of their very affordable rental unit....and are now renting a 2 storey mansion...similar to what the parents original house was like....
the young mother is now working a late night shift, just to pay the rent....so the elderly parents-in -law, can pretend they are still wealthy....

ordinary working familes...up against...street smart operators....scammers....
but who is to blame....???
the son seems to be accepting his dilema...he will do anything for his parents...
he is devoted to them.....he will not allow any blame on his parents, for their decisions
his wife is not so sure...the  stress, of not being able, to provide for her children...when alll available funds are directed to the parents...is showing....
I doubt the son and his family will survive the dissapointment..
the financial planner will probably survive.....
because you cannot protect people...from themselves...


----------



## SJG1974 (27 December 2011)

bunyip said:


> So true.
> This so-called ‘system’ which some on here consider to be seriously flawed and dysfunctional has, in fact, burnt only a small minority of investors overall. Hundreds of thousands of investors, possibly millions even, have had no problem with it.
> And of the small minority burnt, it’s fair to say that it’s not the system alone that’s burnt them, but how they used the system.
> Give two people the same kind of car – one will drive safely, the other will drive like crazy and end up getting hurt. All cars have the potential to harm us, yet we can still use them safely if we use them sensibly.
> ...




I agree with this bunyip. well put.


----------



## SJG1974 (27 December 2011)

Julia said:


> This is where I become puzzled.  When you received the documentation for a loan which was considerably more than you'd applied for (and for which you fulfilled the lending criteria presumably), did you just accept it, not question how you came to be given such an unexpected amount?
> There may be something I'm not understanding about the whole process here.




Agreed...along with a number of other aspects of the entire model, alarm bells were sounding all over the place and yet investors seemingly ignored them and went ahead anyway.


----------



## Frank Ainslie (27 December 2011)

(Quoted from my BOQ website)

_Mr. David Liddy, the former Managing Director and CEO of the Bank of Queensland, has proudly proclaimed, "We're the bank with OWNER-Managers. That's what sets us apart!"

"Praise from Caesar is praise indeed!"

If the performance of the Bank of Queensland's North Ward branch, Townsville in its past dealings with the failed financial advisory company, Storm Financial, is anything to go by, Mr. Liddy's words are certainly prophetic. That branch of the BOQ certainly did set itself apart!

Here are just some of the testimonials from within the BOQ itself about it's North Ward owner managers' past conduct:

"Basically none of the info provided and input on the applicant is accurate... I would suggest that things may unravel at a rate of knots from this point on..." [Lindsay Johnson  BOQ Risk Assessment]

"North Ward branch had, in many instances, not included Storm client's margin loans as a liability when calculating whether they could afford more debt...
"On many referred loans a standard comment ‘no other debts held other than for example credit card etc' despite knowledge of an existing margin loan...

"Income confirmation is based upon a printout of Colonial Geared Investments" which indicated that they had a margin loan of $1.453 million. We should have investigated amounts borrowed and included in servicing....

"A print out of Macquarie Margin loan showed a debt of $724,000 however there was "no allowance in servicing for this debt...

"When applying for an earlier loan, in August 2006, the bank had on file a rate notice dated August 2004 which indicated a pension discount for Mr Reynolds, so the $100K income claimed in the application is obviously not true...

"Over and over again Storm had sent the North Ward an initial letter detailing margin loans but that these amounts were "not disclosed" in the Bank's computer system or the loan applications...

"In one case, the report noted that an initial letter from Storm had indicated a margin loan balance of $1,318,402 but that North Ward's co-owner manager "Mr Matthew Buchanan had stated in comments recommending approval ‘No other debts held other than credit card facility...

"Had such margin loan amounts been included in the Bank's serviceability calculations, it's highly unlikely the loans would have been granted...
"Noted that North Ward branch had accepted photocopies of disbursement authorities from clients on Storm letterhead. Best banking practice is that photocopies are not accepted because they are too hard to authenticate...

"Example of one couple who took a $1.168 million dollar Bank of Queensland mortgage. Their disbursement authority authorised the payment of $280,919 directly to Storm in what appeared to be a commission payment. This represents 24% of the loan amount...

"It is noted from review of some of the loan files that it could be construed that income and ongoing commitments may have been manipulated to achieve approval. Should this prove to be the case, then these loans could be set aside..."   [Jeff O'Sullivan, BOQ Senior Manager - Credit Risk Review]

"In the months following the initial 2006 credit risk review, action should have been taken by the BOQ's area manager and state manager to ensure the problem areas were fixed. But  there was a recurrence of the same sort of problems identified in the 2008 credit risk review...

"I have conducted a number of credit risk reviews of North Ward's business over the years and have previously questioned the integrity of the data on the files... These credit risk reviews had been conducted in late 2006/early 2007 and another in February 2008. In addition to these two formal reviews of the North Ward branch, there were two or three informal reviews initiated to "clarify some rumours that were going round the bank."  [Mr Alan Butler, BOQ Head of Portfolio Management and Financial Crimes]
"Prepare a report in relation to the processes that saw Reynolds (a Vietnam Vet also now mentioned by the ‘Sydney Morning Herald’) receive a loan, whether our processes were followed ... and any remedial action we may need to undertake in relation to customers... The purpose of the review was "firstly potentially being able to selectively use outcomes for external (press) purposes and secondly, whether our process has been followed... Sooner or later we will receive some hard questions about Storm, our relationship and affected customers. While, from what we have seen to date our position is defensible, there remain some gaps..." [Mr Bruce Auty, BOQ Group Excecutive]

On 25 June, 2009, the Bank made a statement to the Australian Stock Exchange saying, "Based on the Bank's knowledge and enquiries to date: There is no evidence of improper or dishonest practices or conduct by the Bank in connection with Storm clients." 

In evidence to a Joint Federal Parliamentary Committee in September 2010, Mr Liddy stated, "If there was wrongdoing in the North Ward branch and we had identified wrongdoing, we would take action." 

It defies credibility that Mr. Liddy, the CEO of the Bank of Queensland at that time, was not kept informed about the goings-on in the North Ward branch. He was either one of the most inept CEO's in the history of banking or he has deliberately misled a Parliamentary Joint-Committee.

What is the penalty for deceiving a Parliamentary Joint-Committee these days or are banks executives immune from prosecution because they regularly suffer from amnesia? _


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## Solly (27 December 2011)

Frank Ainslie said:


> (Quoted from my BOQ website)
> 
> _Mr. David Liddy, the former Managing Director and CEO of the Bank of Queensland, has proudly proclaimed, "We're the bank with OWNER-Managers. That's what sets us apart!"
> 
> ...



_

Hi Frank

A little off topic but I have always found this BOQ approach to saving rather strange.

*Bank of Queensland to use lottery tickets to attract customers*
http://www.dailytelegraph.com.au/bu...ttract-customers/story-e6frez7r-1225939007554

It gives me the impression that banking is a bit of a gamble, not sure if that was their Marketing Dept's intention. But it's good to see they still offer a good solid 1% on the deposits on that account type.

It's a pity but gone are the days when I used to see Big Dave in his silver Porsche exiting skillfully into Elizabeth St, when I was en route to the Cathedral to light some candles for the Stormers and to pray for continuing beer supplies to the Ross Island 

S_


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## Garpal Gumnut (27 December 2011)

I have decided to go through the thread from 2008 to now, and pick out some pertinent posts

This is from Pages 1/2

Oct-Dec 2008



gg



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!






awg said:


> very easy to see how this has happened.
> 
> if you had high gearing (50-70%) from 2003 to 07, on the ASX200, you what have though your Investment advisors were the best in the world!
> 
> ...






shaunQ said:


> I doubt it will be back, for people interested at looking at the site, you can go to:
> 
> http://web.archive.org/web/20071028114029/http://www.stormfinancial.com.au/
> 
> ...






Garpal Gumnut said:


> ASIC have a long record of underperformance when it comes to protecting investors.
> 
> A number of questions I might ask of ASIC's involvement.
> 
> ...




It is interesting how it has all panned out.

gg


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## Judd (28 December 2011)

Frank Ainslie said:


> Bunyip,
> 
> _"And of the small minority burnt, it’s fair to say that it’s not the system alone that’s burnt them, but how they used the system."_
> 
> If you think that a 3 billion dollar loss by a small minority (if 12,000 or so investors can be considered such) isn't something to be concerned about, they must have put too much Sherry in your Christmas pudding!




I find numbers fascinating.  It certainly is a very big deal for those affected by the Storm debacle but Bunyip is possibly correct in saying that the numbers are a minority; a mere blip.

According to the firm which bought Storms fund book, the original client numbers of around 14,000 included those who had purchased an insurance product when EC was with MLC and had absolutely nothing to do with Storm since then.  The number of active clients was subsequently revised to about 3,000 to 4,000.

When you compare this with the number of margin loans (RBA Bulletin December 2009) being 217,000 as at September 2009 (and it would have been higher at the time Storm collapsed) the 3,000 would have accounted for less than 1.5% of the total of margin loans.

As for the $4 billion of "Storm" funds which went whoosh over 2008, the amount of outstanding margin loan *debt* halved during that year and at September 2009 the *debt* stood at $18 billion.  The number of margin calls over 2008 averaged 5 per 1,000 clients.

For June 2007, the average daily turnover on the ASX was $7,441 million and as at June 2008, it was $6,917 million. (www.rba.gov.au/statistics/tables)

So, Bunyip's proposition that Storm was comparatively small beer has some legs.

Again, however, for those involved that is certainly not the perception and understandably so.


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## bunyip (28 December 2011)

Frank Ainslie said:


> Bunyip,
> 
> If you think that a 3 billion dollar loss by a small minority (if 12,000 or so investors can be considered such) isn't something to be concerned about, they must have put too much Sherry in your Christmas pudding!
> 
> It is not the investors that need to adopt a prudent and cautious approach, but rather those that we place our trust in to do what we ask of them rather than play Russian roulette with our money.




Frank

I agree with some of your post, I disagree with other parts. But I can’t be bothered giving you a detailed synopsis on which parts I agree or disagree with, and why.

As for the Christmas pudding,  I must admit that I did indulge in a couple of helpings of Trifle laced with sherry on Christmas day. And one of my presents was a bottle of fine matured port -  we launched a fierce assault on that as well.
However, my post that you disagree with was written the day after Christmas when I’d drunk nothing but tea, and the effects of Christmas day had departed. Whatever, I’ll stick with my opinion that the number of Stormers burnt represents only a tiny minority of the overall investing public. And that the same system that is accused of letting them down is the very same system that millions upon millions of investors have used successfully for decades in capitalist societies around the world.

For the record, I didn’t say the thousands of Storm investors were nothing to be concerned about. It’s just that I think your proposed changes to legislation, if they occur, will fail to produce the result you’re hoping for. Imprudent investors will continue to get stung by uncrupulous people who figure out ways to take advantage of them.

Incidentally Frank, considering your attitude that investors don’t need to be prudent and cautious, I have a strong suspicion that _*your*_ Christmas pudding must have been laced with enough sherry to kill an Afghan camel herder with one sniff from three hundred paces!
With that sort of attitude, my friend, you’ll end up getting yourself fleeced again if you have some money to invest as a result of a payout from the Storm debacle.


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## bunyip (28 December 2011)

SJG1974 said:


> Agreed...along with a number of other aspects of the entire model, alarm bells were sounding all over the place and yet investors seemingly ignored them and went ahead anyway.





It's intriguing just how adept some people are at tuning out when the alarm bells start sounding.

Several years ago a local bloke asked me if I knew of such and such a company. I said I’d never heard of it, and in answer to my questions about the company, he said he’d never heard of it either. So I asked him why he was enquiring about this company, and he told me it was because he’d just bought five thousand dollars worth of shares in it.
Our following conversation went something like this...

*Me*....’So why did invest five grand in a company you’ve never heard of”?
*Him*...’I got a phone call at 3am from someone with a foreign accent, and he told me this was a great company and it’s share price was set to quadruple’.
*Me*...’So on the basis of a phone call at 3am from some foreigner you’d never heard of, you sunk five grand into a company you’ve never heard of’!?
*Him*...’Um – yeah.....sounds pretty silly doesn't it’?
*Me*...’Just a little!! Is the company listed on the ASX, is is it an overseas company’?
*Him*....’Not sure – I didn’t think to ask that’!

Three months later.

*Me*.....’So how did you go with the five grand you sunk into that company – has your investment quadrupled in value yet’?
*Him*...’I can’t seem to find that company – it doesn’t seem to be listed on the ASX or in the US market either. Do you think it could be listed on some other stock exchange’?
*Me*....’Wave goodbye to your five grand – you’ve been conned’.

This is a true story. The bloke I speak of doesn’t come across as being a mug (until he told me this story) – he runs a successful small earth moving business and owns a small cattle property.
But it just shows you how gullible people can be when a juicy looking financial carrot is dangled in front of their noses. 
Alarm bells should have been sounding loud and clear for this bloke, but if they were, then the lure of big money caused him to tune them out.
The one thing that Storm were good at was dangling a nice juicy carrot in front of people’s noses and dressing it up as safe and conservative investment advice.


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## Harleyquin (29 December 2011)

G'day Mindstorm have just read your post No. 6351 and your story is almost to a word the same as ours.  I wonder how many other stormies have a similar story.

The sad part is the Storm / Bank scam will end up costing the Australian people and government far more than they realize.  They are now supporting us.


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## Judd (29 December 2011)

Harleyquin said:


> G'day Mindstorm have just read your post No. 6351 and your story is almost to a word the same as ours.  I wonder how many other stormies have a similar story.
> 
> The sad part is the Storm / Bank scam will end up costing the Australian people and government far more than they realize.  They are now supporting us.




HQ,

If the 3,000 former Storm clients were actually couples, and received the "aged" pension, the cost pa would be $75million.  In the context of the Australian economy, that is almost, but not quite, a rounding error.

Please stop making it out to be a bigger deal than it actually is.  To those affected by this matter, it is huge and rightly so but the vast majority of the Australian population barely know anything about the matter and couldn't care less.


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## bunyip (29 December 2011)

Judd said:


> HQ,
> 
> If the 3,000 former Storm clients were actually couples, and received the "aged" pension, the cost pa would be $75million.  In the context of the Australian economy, that is almost, but not quite, a rounding error.
> 
> Please stop making it out to be a bigger deal than it actually is.  To those affected by this matter, it is huge and rightly so but the vast majority of the Australian population barely know anything about the matter and couldn't care less.




A '_*Storm*_ in a tea cup', perhaps, eh Judd? (pardon the pun)


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## Judd (29 December 2011)

bunyip said:


> A '_*Storm*_ in a tea cup', perhaps, eh Judd? (pardon the pun)




I'll allow the pun, bunyip, although others may not.

It is simply that when people go on about how big an issue this or that is, I am reminded of the poem Musee des Beaux Art by WH Auden.  He used the fall of Icarus as background and the last lines are "the expensive delicate ship that must have seen something amazing, a boy falling out of the sky, had somewhere to get to and sailed calmly on."

As it was, so it will be.


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## bunyip (29 December 2011)

Judd said:


> I'll allow the pun, bunyip, although others may not.
> 
> It is simply that when people go on about how big an issue this or that is, I am reminded of the poem Musee des Beaux Art by WH Auden.  He used the fall of Icarus as background and the last lines are "the expensive delicate ship that must have seen something amazing, a boy falling out of the sky, had somewhere to get to and sailed calmly on."
> 
> As it was, so it will be.




Yes indeed Judd......’as it was, so it will be’.

I don’t doubt that most Stormers will be wiser for their experience and will avoid repeating their mistakes. 
Yet still we see a hard core on here who exhibit pretty much the same attitudes that brought them undone in the first place. It’s probable that some of them will get burnt again if they get their hands on some investment dollars through a compensation payout.
They think that changes to legislation will fix everything by getting rid of the shonks and making it safe for everyone to invest. So strong is their faith in this idea, that we’re even seeing comments along the lines of* ‘investors don’t need to adopt a prudent and cautious approach’.*
Well OK – they’re welcome to that sort of view. But I’ve been an investor for a number of decades and in that time I’ve got to know many investors personally. And all the successful ones I know share a number of common traits – they’re prudent and cautious, meticulous in their research, accept nothing at face value (particularly from salesmen) always think for themselves, never get too greedy or take silly risks, etc etc etc.
Any investor who thinks he can ignore these simple common sense rules is more than a little naÃ¯ve.

But anyway, good luck to anyone who thinks he or she can invest with safety and peace of mind as long as the correct legislation and penalties are in place. One wake up call hasn’t been enough for some  – chances are they’ll be getting a second one.

As it was, so it will be.


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## Frank Ainslie (30 December 2011)

bunyip said:


> Yes indeed Judd......’as it was, so it will be’.
> 
> I don’t doubt that most Stormers will be wiser for their experience and will avoid repeating their mistakes.
> Yet still we see a hard core on here who exhibit pretty much the same attitudes that brought them undone in the first place. It’s probable that some of them will get burnt again if they get their hands on some investment dollars through a compensation payout.
> ...




Bunyip! Still at it I see?

Despite the evidence to the contrary you still insist that Storm's investors were partly to blame despite the fact that they went to qualified financial advisers, asked for a "low risk" plan with long-term growth. Further, you and some others seem to want to downgrade the biggest financial disaster to investors in Australian history. 

In so doing you are reinforcing the message to people out there that are considering using financial advisers that these would-be investors need to accept that by doing so they must be prepared to accept the risk of ending up with a bodgie one. How comforting is that? 

Instead of accepting the _status quo_ as you seem to suggest, don't you think that finding ways to instil some confidence back in investors is the way to go. Your negativity is not encouraging or helpful. When things go wrong in this life there are many such as you that are quite willing to sit on the side-lines being critical but ask them for some solutions and they are bereft of ideas! And don't throw "cautious" and "prudent" out again because it addresses nothing. Investors deserve to be protected and the system has failed them time and time again. 

In the next few years, people in the financial sector are going to find it harder and harder to earn a living. If they can't steal a march on their opposition, then they will be going to the wall just like we did. 

Despite what you and others say, investors in this country are tired of reading about financial disasters that could have been avoided. They will respond by investing their capital elsewhere. This will be reinforced by the flack that the financial industry and banks will be receiving if the Banks do not capitulate now in our cases against them. 

Don't underestimate people out there. These are scary times and they don't want to be entrusting their money to people that can't be trusted. Frankly, I wouldn't like to be a financial adviser in the years ahead because it promises to be a very lean time indeed.  Therefore, if the financial sector wants to win hearts and minds, fix the problems now or suffer the consequences.

Bunyip, old mate! You are part of the problem, not the solution because you offer no viable alternatives. Whether we are partly to blame or not is no longer the issue. I suggest therefore that you move on with the program.


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## Garpal Gumnut (30 December 2011)

The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf. 

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.

If posters can contain their entrenched opinions re investor responsibility, *could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle,* or were they just hit by as they say a "black swan event".

gg


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## Solly (30 December 2011)

Garpal Gumnut said:


> The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.
> 
> The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.
> 
> ...




GG

I'm pleased you have highlighted this issue of responsibility, as it has been a recent topic of discussion in my professional circle.

Even if it was a "black swan event" wouldn't it be reasonable to expect, that a highly qualified model of a modern "Master"-General would have risk mitigation strategies in place, to implement and execute a back out plan in a worst case scenario?

I believe that a common theme with the double/triple geared Stormers was that they were lead to believe that there were fail safe fiscal mechanisms in place to protect their nest eggs.

My present main interest is whether it will be proven if there has been any unlawful actions by any of the prime participants and whether there will be any punitive consequences.

S


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## bunyip (30 December 2011)

Oh come now Frank....don’t tell me you’re still trying to convince us that you bear no responsibility for your actions and that your predicament is all someone else’s fault! 
Al Capone said exactly the same thing at his trial – he blamed other people entirely for the mess he found himself in, while flatly refusing to take any responsibility for his actions.

Your claim that you are in no way responsible for your predicament simply does not hold water.

You had the option of properly scrutinizing the advice that Storm gave you.  For various reasons which you’ve outlined already, you failed to do so. More fool you.
You claim to have been circumspect and astute. But a circumspect and astute man would have left no stone unturned in his efforts to consider all circumstances and possible consequences instead of just accepting everything he was told as being gospel truth.

 You implicitly trusted the word of salesmen. The fact that they had qualifications in financial planning appears to have blinded you to the fact that they were still salesmen, and like all salesmen they had a vested interest in making their product sound wonderful and selling you as much of it as possible. 

 You went to Storm for financial planning advice, but received nothing of the kind. The sort of strategies and products and advice that you’d expect from a financial planner were not even remotely similar to the aggressive investment strategy that Storm put to you. They dressed up their strategy as safe and conservative, and you foolishly believed them. That was your fault, nobody else’s. 


You mortgaged your home to raise a large loan to sink into the market alongside your personal funds. Then used double gearing to raise another big loan for more market investment. You had absolutely no need to do any of this – your financial position was more than sufficient to provide you with a very comfortable self-funded retirement. You were just plain greedy.

While Storm and the banks sat on their hands and did nothing while you burned, you too sat on your hands and did nothing. As the owner of your business, it was your right and indeed your responsibility to take defensive action to save your business from complete disaster when your manager was clearly letting you down. 

Need I go on? 
Most of the Storm victims I’ve corresponded with take responsibility for their actions and the choices they made. That big ego of yours prevents you from doing the same.
Nobody, Storm victim or otherwise, says Stormers are 100% responsible for getting burnt. Nor should they - clearly there are other parties as well who bear some responsibility for the Storm debacle.
I try to bring some balance to this discussion.....there’s no balance in saying it’s all Storm’s fault or all the banks fault or all the fault of ASIC or the FPA or of the Storm investors themselves.
The only balanced way to see this situation is that a number of parties were involved, and all of them bear some responsibility for their decisions and actions. Storm investors very much included. 

Neither I nor anyone else I know of is downgrading the Storm situation – we’re merely putting it in perspective. In no way do we make light of the obvious distress the Storm debacle has caused to its victims. But as Judd pointed out, in the overall context of things it’s barely even a blip on the screen. The average Australian knows little or nothing about it and couldn’t care less even if they did.

No Frank, I’m not reinforcing the message that would-be investors must be prepared to accept the risk of ending up with a bodgie financial planner. What I’m saying to all investors as loudly and clearly as I possibly can is this...... 
*‘Don’t copy Frank Ainslie and Co by blindly trusting a financial planner in the hope that you’ll be lucky enough to get one who’s legitimate. 
Don’t place blind trust in someone just because he has a piece of paper saying he’s qualified to give investment advice. 
Don’t accept at face value what anyone tells you, no matter what qualifications he has. Be meticulous in your research just the same as you would be before committing a lot of money to any other business. Don’t think that the normal rules of business don’t apply to share investment – they most certainly do. *
*Don’t think you can rely on laws and regulations to keep you out of harms way – if you take silly risks then you’ll end up paying a heavy price for your imprudence.

Better still, avail yourself of the many free opportunities to get yourself some basic knowledge and investment skills so that you can handle your own investment affairs instead of needing someone else to handle them for you.’*

Do I think that instilling confidence back into investors is the way to go? Yes I do, but the way you’re proposing is not going to produce the glowing results you’re hoping for. I’m not saying don’t try to make improvements, but I’ll telling you that you will never solve the problem entirely by changing legislation and introducing harsher penalties. Investors who are imprudent and reckless are still going to get burnt.
For example, what’s to stop someone from bypassing all financial planners and taking exactly the same silly risks you took through Storm? They could mortgage their home to get a loan, combine it with their personal finances, and plonk the whole lot in the stock market. Then double gear on top of that, and hope like hell the market keeps going up. Just like you did. 
No need to involve a crowd like Storm, no need to get advice from anyone, just do it all themselves. 
Let’s assume that such a person doesn’t run up against any collusion or skullduggery that you allege took place between Storm and the banks. Let’s assume that everything is legal and above board.
Along comes a 2008 style market crash. Our investor gets his margin call when he should get it. He’s still going to get hammered, with nobody to blame but himself for being so imprudent and reckless. If the market keeps going down, he may be required to meet more than one margin call. If the market stays down for years, he’ll be under water and struggling at best, with every likelihood of being be wiped out.
So what sort of legislation can possibly protect such a person who, completely of his own volition, adopts such an aggressive and risky strategy? Answer – nothing, unless double gearing is outlawed. Even then, there would be ways around it for anyone who is intent on borrowing suicidal amounts of money for suicidal purposes such heavy investment in shares, and hoping like hell for a continuously rising stock market to make the strategy work.

You say that investors are tired of reading about financial disasters that could have been avoided. Perhaps you’re right, but I wonder what the numbers are in percentage terms. As has been pointed out to you, many millions of investors have prospered from  the same system that you seem to think is the scourge of the investment world.
As for these ‘_financial disasters that could have been avoided’_......I’d rate the Storm debacle as one of those. People like you could have easily avoided being caught up in the Storm fiasco if you’d put in some effort by looking into their strategy thoroughly instead of just believing everything they told you. By your own admission, you took your eye off the ball. In other words, you got careless and complacent and didn’t think enough for yourself. And you were greedy as well, otherwise you would never have gone chasing the larger than average returns of the Storm strategy when you had absolutely no need to. You’re a scaled down version of those two greedy doctors who had the income and asset base to set themselves up for life, but risked it all by borrowing 11 million and 13 million dollars.

You may be right about lean times ahead for investment advisers. But that won’t bother me, and it needn’t  bother you either if you take some responsibility and learn the basics of handing your own investments.
If, as you say, people don’t want to be entrusting their money to people who can’t be trusted, maybe that’s not such a bad thing. Maybe then they’ll have an incentive to take some responsibility for their own lives and their own investment education, so that they can join the millions of investors who prosper from the current system that your small minority claims is so badly broken.

You think I’m part of the problem, not the solution because I offer no viable alternatives. 
OK then, how about this for a viable alternative?........adopt the very same vigilance towards share investment as you’d adopt towards any other kind of investment. You failed to do that, Frank.......your attitudes and actions in the Storm situation were very different to the attitudes and actions you adopted towards your shopping center business. 

Until you take a leaf out of the book of many other Storm investors by facing up to the fact that you were a large part of the problem by being pretty damned stupid in what you did with Storm, you’ll continue to delude yourself with the belief that legislation can ensure safety for all investors, even those as imprudent and reckless as you were. 
You’re going to be sorely disappointed when you find out that regardless of any changes to legislation that you and like-minded people may bring about, future investors are still going to get mauled when they didn’t need to if they follow your example of failing to exercise a modicum of prudence and common sense in investment matters.


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## Garpal Gumnut (30 December 2011)

Garpal Gumnut said:


> The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.
> 
> The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.
> 
> ...






Solly said:


> GG
> 
> I'm pleased you have highlighted this issue of responsibility, as it has been a recent topic of discussion in my professional circle.
> 
> ...




Thanks Solly,

Good points.

Let us examine one.

Did Manny and Julie Cassimatis have risk mitigation strategies in place, to implement and execute a back out plan in a worst case scenario?

If they had was any attempt made to execute them?

Perhaps Frank and Harlequin and others may be able to comment on this one facet of Storm Financial.

gg


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## Julia (30 December 2011)

I'm not sure why you're asking the above question, gg.

Much of this thread has been devoted to Storm investors saying they were assured that risk mitigation was absolutely in place, and much also to their saying these strategies failed to ever appear.


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## Solly (30 December 2011)

Garpal Gumnut said:


> The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.
> 
> The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.
> 
> ...




GG 

Just one more observation regarding the "conversation of the deaf", I have at times felt a bit sorry for the bollocking poor Frank cops. I think that he is only one of the three posters on this thread who actually uses their real name and is publicly identifiable. 

A bit of a brave move when you can open yourself up to anonymous vitriol. Anyway sometimes I need to remind myself that this is just a public discussion forum and thankfully supported by Joe and an inviting safe place to air our views.

I suppose it doesn't really matter if those with opposing views never agree or capitulate in this arena, as the only place with real authority and judgement in these matters resides on the 7th Level of Harry's Place. 

S


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## Solly (30 December 2011)

Garpal Gumnut said:


> Thanks Solly,
> 
> Good points.
> 
> ...






Julia said:


> I'm not sure why you're asking the above question, gg.
> 
> Much of this thread has been devoted to Storm investors saying they were assured that risk mitigation was absolutely in place, and much also to their saying these strategies failed to ever appear.




GG & Julia

I am interested to know if there was any written certified methodology for such scenarios.

S


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## Garpal Gumnut (30 December 2011)

Julia said:


> I'm not sure why you're asking the above question, gg.
> 
> Much of this thread has been devoted to Storm investors saying they were assured that risk mitigation was absolutely in place, and much also to their saying these strategies failed to ever appear.




Thanks Julia,

Assurances are heresay. I would like to delve in to the facts.

gg



Solly said:


> GG
> 
> Just one more observation regarding the "conversation of the deaf", I have at times felt a bit sorry for the bollocking poor Frank cops. I think that he is only one of the three posters on this thread who actually uses their real name and is publicly identifiable.
> 
> ...




I would agree totally with the above comment Solly, totally, however it tends to compartmentalise the thread, and it would be good to get some movement and new information that may help the Storm investors at Harry's Place.



Solly said:


> GG & Julia
> 
> I am interested to know if there was any written certified methodology for such scenarios.
> 
> S




And so am I.

gg


----------



## Julia (30 December 2011)

Solly said:


> GG
> 
> Just one more observation regarding the "conversation of the deaf", I have at times felt a bit sorry for the bollocking poor Frank cops. I think that he is only one of the three posters on this thread who actually uses their real name and is publicly identifiable.
> 
> A bit of a brave move when you can open yourself up to anonymous vitriol.



Sorry for poor Frank?   As someone who has been in receipt of some of his particularly distasteful vitriol, I do not share your compassion.  He has made some extraordinarily nasty remarks to various people.


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## Garpal Gumnut (30 December 2011)

Julia said:


> Sorry for poor Frank?   As someone who has been in receipt of some of his particularly distasteful vitriol, I do not share your compassion.  He has made some extraordinarily nasty remarks to various people.




Thanks Julia,

With a New Year upon us soon, let us draw a line under the differences between us and rather share some solid facts about Storm, so that we and others will not lose our hard earned in future Financial Adviser disasters.

It is to everyone's credit that knowledge has been held and shared, and some feel more strongly than others about their position, and others' strategies, wins or mistakes.

I for one have on the odd occasion been guilty of cutting remarks about others, often due to misinformation, so my intent on this change in direction was to look at uncontestable facts and not opinions.

I do read all your posts and value your opinions and wish you and puppy a Happy and Prosperous wave 3 in 2012.

gg


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## Frank Ainslie (31 December 2011)

Garpal Gumnut said:


> The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.
> 
> The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.
> 
> ...




Hi GG,

I couldn't agree more! We Stormies don't mind opening up but we have no intention of listening to the same old stuff over and over again! It's just too boring! We are members of this forum because we choose to be, not because we have to be! 

We have been there so we know what happened - not what some on this forum tell us happened! We have been patient with the knockers and have explained at length why we invested with Storm. This doesn't seem to be enough however. Therefore, let me make this loud and clear once and for all. *I am not going to change my position and nor are you that believe otherwise, so let's move on! As GG says, "It really is getting us nowhere!"*

He also said:

_"If posters can contain their entrenched opinions re investor responsibility, *could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle,* or were they just hit by as they say a "black swan event"_

To my mind, they are ultimately responsible because it was Storm's advice that landed us in this mess to start with. Further, it needs to be remembered that Storm's financial model was not designed to cope with a GFC. Storm's directors should have been aware of this. Personally, I believe that the C's were fully aware of this but were looking to the Banks to bail them out because of the agreements in place. However, this does not lessen the responsibilities of the Banks that co-operated fully with them, struck up these agreements, and gave Storm the means to further their own ends by issuing imprudent loans to Storm's clients. 

I do not accept the notion that they were hit by _"a black swan"_ event because this is a feeble excuse for not having the foresight or will to protect investors' assets when Storm should have done. If one looks at the chain of events, this didn't happen overnight. I firmly believe that Storm and the Banks used a _"wait and see" _policy when all around them was crumbling. The _"trigger-points"_ had long passed and so had the _"point of no return"_ before anyone acted.  

By allowing this to happen , both Storm and the Banks were gambling with our money and we subsequently lost everything as a consequence! No other explanation fits in with what happened unless you believe that the Banks and Storm were a bunch of idiots. Certainly, they acted like idiots but there was some method in their madness. They were banking on the markets turning so that they could salvage something for themselves. They had found a wonderful gold mine and didn't want to give it up easily even though the waters were rising in the shaft. 

The directors of Storm should have realized though that when you sup with the Devil (or devils in this particular instance) you have a good chance of going straight to Hell. Unfortunately, in the process, they dragged us there with him!

Consider this! The CBA and other banks were making margin calls to some of their customers (other than Storm) in September before the _"Black Swan"_ event occurred, and Storm were still accepting clients' monies right up to the end. What does that tell you about Storm and the Banks' failures to act in a responsibility manner when it came to their mutual clients?

To my mind, both Storm and the Banks' behaviour are inexcusable. This Government and former goverments aided and abetted them by failing to protect investors by having the necessary legislation in place to ensure this type of behaviour couldn't occur!

That's my spin on all this.


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## bunyip (31 December 2011)

I recently had an interesting conversation with a Storm victim who felt a little sorry for the Storm advisers. The view expressed was that the advisors genuinely believed in the strategy, as evidenced by the fact that they implemented it themselves and recommended it to their families and close friends.


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## bunyip (31 December 2011)

Cassamatis probably believed in his strategy, but he failed to do his homework.
My understanding is that he factored a 45% market slump into his model, in the belief that this was the maximum the market could be expected to fall. He should have known that numerous past markets slumps have wiped more than 45% off the market.
Or maybe he was aware of this, but thought history wouldn’t repeat. I do a lot of reading, and in the bull market prior to 2008 I saw numerous well-respected analysts saying that this time it was different – the market would just keep going up.
Cassamatis possibly believed this as well, but when the opposite happened he was caught off guard and didn’t know how to handle it. Should he haul his clients out of the market, thereby losing all his business? Or should he advise them to hang in there, hoping the market would recover?
I can only imagine his dilemma as he pondered these questions.

Whatever, he has no excuses.
If I was a Storm victim I know what my feelings would be towards the bastard!


----------



## Frank Ainslie (31 December 2011)

Garpal Gumnut said:


> Thanks Solly,
> 
> Good points.
> 
> ...




Hi GG,

If Storm had a contingency plan, it is not self-evident to me based on what we now know. Such a contingency plan may well have existed at one time (some two to three years before the Storm collapse) but I believe they got in so deep with the Banks during the years 2006 to 2008 over extending their clients beyond any reasonable degree of safety, that Storm had nowhere to go when the markets starting going bad. 

Of course, Storm was cashing down some clients in October 2008 but this came too late. Further, he did not follow through for various reasons and many clients found themselves high and dry. Many also found themselves in negative equity well over 100% and sometimes up to 130% or more. That is unacceptable!

Think about it for a moment! If Storm had pulled the plug and cashed in their clients when this crisis loomed, Storm would have probably pulled the plug on itself also because its cash flow would have dried up.  

I think that the directors of Storm backed themselves into a corner and therefore thought that there was no option but to hang on and hope!  Storm’s whole philosophy was based on market recoveries. Everyone in Storm (the employees, that is) was so brainwashed into believing this that plan B went out the window. Certainly, everything they stated in their SOA’s with regard to safe-guards were completely ignored. Indeed, their agreements with the Banks circumvented these safeguards by extending the risks rather than reducing them. 

I think Manny’s hubris eventually got in the way of his commonsense, and he actually believed that he could turn it all around if he only had more time. Unfortunately, he forgot that thousands of investors had placed their trust in him to protect their assets. It reminds me a little of Nero fiddling while Rome burned.


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## Garpal Gumnut (31 December 2011)

Frank Ainslie said:


> Hi GG,
> 
> If Storm had a contingency plan, it is not self-evident to me based on what we now know. Such a contingency plan may well have existed at one time (some two to three years before the Storm collapse) but I believe they got in so deep with the Banks during the years 2006 to 2008 over extending their clients beyond any reasonable degree of safety, that Storm had nowhere to go when the markets starting going bad.
> 
> ...




That is very interesting Frank.

A few posters have mentioned that some Storm clients "got out early", during the GFC but before Storm ran in to liquidation.

Were these clients just fortunate, or did they have large accounts or were they otherwise advantaged in closing out their accounts.

The three to six months before Storm went in to receivership may hold some answers for many Storm Investors, some of whom it has been said in this forum were still being advised to invest in Storm products in the dying days of the enterprise.

And the involvement of the banks and ASIC in those months before liquidation needs to be discussed.

Actual Storm client or Storm adviser comment on a factual basis would be preferable to theories in this regard.

gg


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## Harleyquin (31 December 2011)

Frank I have just read your recent posts and agree with your comments.  You've been able to explain far better than I can.  I have limited computer access at present.

Have been in touch with a stormie over the past couple of weeks who is really doing it tough.  Suicides and potential suicides caused by this disaster are becoming all too common, as are family breakups, and feelings of worthlessness.  I think that we all find it hard at Christmastime when everyone else is able to celebrate.

I'm not a counsellor but so many are really hurting.  Wish I could put some of the stormies recent stories on this forum however I'm not in a position to do that.  Let me just say, nobody expects to be so badly burnt when seeking financial advice.

To all stormies out there hold on tight and keep supporting each other through this nightmare and let's pray that 2012 brings some closure to those of you who are feeling desperate.


----------



## Solly (1 January 2012)

Harleyquin said:


> Frank I have just read your recent posts and agree with your comments.  You've been able to explain far better than I can.  I have limited computer access at present.
> 
> Have been in touch with a stormie over the past couple of weeks who is really doing it tough.  Suicides and potential suicides caused by this disaster are becoming all too common, as are family breakups, and feelings of worthlessness.  I think that we all find it hard at Christmastime when everyone else is able to celebrate.
> 
> ...




Harleyquin

This time of year does tend to exacerbate losses, difficult times, etc. I do know exactly what you have highlighted and what some victims of this debacle are facing. Those feelings of helplessness, inactivity, inertia and frustration are so real to those experiencing them. I do hope those still experiencing these do actively seek out strategies for dealing with these dark clouds that hover over them. I have seen beneficial coping techniques employed, which are evidence based through the facets of cognitive behavioral therapy (CBT) to be helpful to those undergoing these extreme stresses in their lives.

From a practical perspective, what I have done when I have been involved in major aspects of my life that have not gone to plan is to gain the perspective and single mindfulness of purpose to believe that nothing is going to stand in my way to recover from the dilemma.

I will keep myself active and focused on the issue and continually seek avenues to extract myself from the position that is detrimental to me. I have no excuses for not acting and staying focused. Age, health issues, the rehashing of the circumstances that lead to the issue, past events that should have been changed, all are of absolutely no consequence. The only things that matter are that the current actions and that the continuing momentum are maintained to extricate me from a negative situation. Nothing will stand in my way, what others may think and what the naysayers believe, all become irrelevant. The strategies in life can really be likened to the moves in a great game of chess. My goal is always, checkmate.

This forum has an excellent example of somebody who is not sitting back, restrained by inertia, gives up their stated position, who deflects detractors and who absolutely and completely is determined to do whatever it takes to improve their position. Little did I realise that the person who was sitting obediently in the front row of the gallery at the Worrells Inquiry would turn out to be the powerhouse in this fight who we all know as, Frank !

I always believe that it's all up to you. If you feel beaten and downtrodden or whether you get up, fight and kick a few heads, the CHOICE and the POWER remains with YOU.

I can't wait to see what resolutions 2012 will bring in this Storm saga.

S


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## Frank Ainslie (1 January 2012)

Harleyquin said:


> Frank I have just read your recent posts and agree with your comments.  You've been able to explain far better than I can.  I have limited computer access at present.
> 
> Have been in touch with a stormie over the past couple of weeks who is really doing it tough.  Suicides and potential suicides caused by this disaster are becoming all too common, as are family breakups, and feelings of worthlessness.  I think that we all find it hard at Christmastime when everyone else is able to celebrate.
> 
> ...




Hi HQ,

A happy New Year to you and all on this forum! 

Like you I am fully aware of the pain out there! None of us is immune to the suffering that the Storm disaster has wrought on those that placed their trust in Storm. I feel particularly sorry for those that have sought to keep their losses hidden from their family and friends because they mistakenly believe that they were partly to blame in this fiasco. I know one or two that have gone down this road. 

The truth is that we all need support in times like these. My mother always said, _“You only know your true friends when something like this happens!”_ In the last three years, her words have been prophetic. Fortunately, Helen and I have a wonderful support group so this has been a great help. 

It is difficult to convey the human misery that an event like this produces. To many we are just a bunch of numbers. Another blip along the way and our passing raises little comment except on forums such as this. Yet we, the ones that are experiencing this first hand , know all too well the havoc it has produced in Stormies’ lives. Not only has it wrecked our lives financially, but it has also destroyed our trust in people, particularly those in Government that should have protected us from all this. 

However, as Solly says quite rightly, we cannot afford to give in. Life is full of travails and we must deal with them in a positive manner. As surely as one door closes, another one will open if we keep focussed. None of us in this life, no matter how smug we may presently feel with our lot, is immune to tragedy. We can either be crushed by such or rise above current circumstances and fight back. The former offers no hope, the latter everything.

To all those out there that believe they have lost everything, you haven't! The most precious thing we have is our life and the love of those around us. All the money in the world cannot buy that! So focus on what you have rather than what you lost. Take every day as it comes and enjoy it. And remember, we will come through this and be the better for it.


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## Harleyquin (1 January 2012)

Thanks Solly and Frank, I can relate to everything you've both said.  I've sought help with some wonderful professionals and found CBT to be extremely worthwhile in order to cope.  Personally I feel strong, determined and focussed so have no problems and have learnt to face each day in a positive way rather than over planning, as was the case pre-Storm.

I feel tremendous compassion for those still wallowing in hopelessness and those who are still feeling, because of their age, that they have nothing worthwhile to live for anymore, and will die before any resolution is ever reached.  

If you're in this position please reach out to anyone who can help.

Read Solly's reply and gain strenghth from it.

We need you all there to celebrate coming through this ordeal.


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## Garpal Gumnut (1 January 2012)

Garpal Gumnut said:


> That is very interesting Frank.
> 
> A few posters have mentioned that some Storm clients "got out early", during the GFC but before Storm ran in to liquidation.
> 
> ...




I find a peculiar reticence on the part of Storm investors to discuss the aspects mentioned above.

Perhaps their legal advisers have advised them not speculate on what happened in the three to six months before Storm Financial went down the tube.

ASF is a Stock and Investment forum and posters need to flesh out these issues so that some poor bastard in the future is not taken to the cleaners by a Financial Adviser and/or a Bank as the Storm clients were.

gg


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## Solly (2 January 2012)

Here is an article of interest that has not been previously linked in the forum.

It is from, The Edmund Rice Business Ethics Initiative Newsletter of Sunday, February 8th, 2009.

Please scroll down to, 

*"Prudence in fair weather will prepare you for the stormy"*

It contains a view of the ethics of the Storm situation.

http://www.erc.org.au/goodbusiness/page.php?pg=0902inscope0#3


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## Frank Ainslie (3 January 2012)

_"I will keep myself active and focused on the issue and continually seek avenues to extract myself from the position that is detrimental to me. I have no excuses for not acting and staying focused. Age, health issues, the rehashing of the circumstances that lead to the issue, past events that should have been changed, all are of absolutely no consequence. The only things that matter are that the current actions and that the continuing momentum are maintained to extricate me from a negative situation. Nothing will stand in my way, what others may think and what the naysayers believe, all become irrelevant. The strategies in life can really be likened to the moves in a great game of chess. My goal is always, checkmate."_

Hi Solly,

I couldn’t agree with you more! Well said! _“The only difference between stumbling blocks and stepping stones is how we use them.”_

However, I also appreciate that we Stormies are all coming from a different place. In some ways I am more fortunate than many because Helen and I have not been left completely destitute and my background and training has enabled me to respond positively. Many, however, are living in the most dire of circumstances and every day presents new challenges for them. They are the real heroes in all this.

Speaking for myself, I appreciate your kind words and understanding. It’s easy to be judgemental in life, and we have all been guilty of that along the way. It is therefore refreshing to hear the views of those that seek after truth and feel empathy for those that have suffered in life. In the end, in any fair society, truth should out and justice should be done.

When we had money, someone once said to me, _“What’s it like to be a millionaire?” _Strange as it may seem, it’s not everything that it is cracked up to be. I have never been materialistic (despite what some have assumed on this forum) so having money has never been a driving force in my life. Therefore, when people accuse me of being greedy, they couldn’t be further off the mark. 

Don’t get me wrong! It was wonderful not to have the worry of wondering where the next buck was coming from but it wasn’t my be-all in life and it never will be. I found myself thinking constantly whilst I was wealthy that there must be something else in life besides money. Surely there must be one more chapter to write because my story seemed to lack a meaningful ending? As it turned out, there is a final chapter to be written. 

In life nothing is written until we write it! *The CHOICE and the POWER certainly does remain with each of us.*

You have mentioned chess. I use to be a chess player myself, having studied the game for some years. Nowadays, I play competition poker instead – for fun, that is, because I haven’t got the money to do otherwise. I find that it is the ultimate distraction from the problems that have beset us. Helen and her mother also do the same so it’s a family thing. Bunyip will be pleased to hear this because he can now say, _“I told you they were gambling orientated!”_ I prefer to say that we are challenge driven!

In terms of chess, our battle with the Banks is entering the _‘endgame’ _phase. Unlike poker, there is no element of luck in chess but rather it all boils down to individual skill. Poker requires courage, skill and luck whilst chess requires a superior knowledge of tactics and what moves to make. It will be interesting to see how the players in this drama eventually perform, and who finally declares _“checkmate!”_ if and when this hits the Courts.

I have placed your encouraging words on my desktop alongside those of others who have written meaningful things to me. When I feel any dark thoughts creeping in, I refer to these writings to get me back on course. 

Many of us Stormies have offered wondered who you are. No matter! I sense a good man that has our welfare at heart. We cannot ask for more than that! You cannot ask any more of yourself.


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## Frank Ainslie (3 January 2012)

Solly said:


> Here is an article of interest that has not been previously linked in the forum.
> 
> It is from, The Edmund Rice Business Ethics Initiative Newsletter of Sunday, February 8th, 2009.
> 
> ...




Hi Solly,

There have been many excellent articles written about Storm and the Banks since Storm’s collapse. This is just one of them. However, it was written early on and we know a lot more now than we did then about what really happened. 

_“They took this risk to chase after a carrot of fabulous proportions that was dangled in front of them. This is a serious reason to doubt whether they were fully cognisant of the risks they were taking.”_

The writer is suggesting here that Stormies were well aware of the risks involved! Quite frankly, this is an illogical assumption. People that have worked hard all their lives to put away money for their retirement do not suddenly have a sea change and decide to gamble with their futures as this writer seems to suggest. The fact that Stormies became involved with people that had a gambling habit, namely Storm and the Banks involved with that advisory firm, is unfortunate to say the least. It certainly wasn’t by any design on our part.

_“However, news of the mortgage crisis in the US had arrived many months before the final collapse of Storm. Were the clients informed by their financial advisor of the types of market conditions that would indicate the realisation of their risks?”_

The answer to that is, _"No! We were not!"_ In fact we were constantly being reassurred that all was well and Storm had everything in hand!

The writer’s words, _“many months” _is somewhat misleading in this respect. The rot started in the USA (that would have a flow-on affect) in 2007.

"_The credit market's problems really started when housing prices started to fall in 2007.  This led to the lenders being owed more than the homes were worth.  Mortgage defaults started to rise, the national economy started to falter, and fear crept into the credit markets.  Despite the efforts of the Federal Reserve, the destabilization of the credit market quickly spread to the national financial system.  Lenders began to fear borrowers could no longer repay their loans.

Bear Stearns in the States was the first investment bank to fall victim to this fear.  Investors, as well as other financial institutions, began to worry that money borrowed by Bear Stearns would not be repaid and began pulling money back.

On March 13, 2008, Bear Stearns advised the Federal Reserve that its liquidity position had deteriorated and that it would file for bankruptcy unless alternative sources of funds were made available.  Two days later, Bear Stearns agreed to merge with JP Morgan Chase in a deal that wiped out 90% of Bear Stearns' market value.

By the year 2008, the Federal National Mortgage Association (FNMA or Fannie Mae) and the Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac) either owned or guaranteed nearly $6 trillion in mortgage loans.  With a mortgage crisis brewing in the United States, these two corporations quickly began showing signs of financial distress.

On September 7, 2008, the governing authority over these two agencies - the Federal Housing Finance Agency, or FHFA, placed both Fannie Mae and Freddie Mac under their wing.  In addition, the U.S. Treasury department began supplying funds to help stabilize these companies, raising the national debt ceiling by $800 billion in the process. Financial instability in the USA economy was beginning to grow.

On September 14, 2008, the Bank of America agreed to acquire Merrill Lynch for $50 billion as a second wave of volatility began in the financial community.  And on September 15, 2008, concerns over the ability of financial institutions to cover their exposure in both the sub-prime loan market as well as credit default swaps led to further market instability.  That same day, Lehman Brothers filed for bankruptcy.

On September 16, 2008, American International Group fell victim to a liquidity crisis as AIG's shares lost 95% of their value and the company reported a $13.2 billion loss in just the first six months of the year.  By September 22, 2008, AIG was removed from the DJIA.

Although the share market arguably started to crash on October 1, 2008, the Black Week began on October 6th and lasted five trading sessions.  During that week, the Dow Jones Industrial Average would fall 1,874 points or 18.1%.  In that same week, the S&P 500 would fall more than 20%."_

Bearing this in mind, the question must be asked, _“Why did the Banks involved with Storm continue to support the Storm strategy in 2008 by continuing to lend money to Storm’s clients through housing loans and margin loans when the market indicators all pointed to a market collapse?_” Can anyone on this forum answer this question for me bearing in mind that there was a credit squeeze in place by other banks at the time?


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## Jifromoz (3 January 2012)

Judd said:


> The number of margin calls over 2008 averaged 5 per 1,000 clients.




I would be interested to know what the Storm average number of margin calls for their customers was. It would be substantially higher than this IMHO.


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## doobsy (3 January 2012)

New Year Darkside thoughts

Hey all. Hope the break was fun.

To catch up a little - Frank - any decent adviser would take probably 1 hour to read the SOA as it was full of appendices and cashflow projections but the first 40-50 pages were generally full of generic information.

They would probably re-read the advice section a couple of times but within a couple of hours would easily be able to identify the strategy and the fact what was behind it. As such they could easily identify how risky it was.

Julia - most retirement planning is based around cashflow. I will use a dummy example.

Client (couple) walks in with say $300K in super, house, some basic other non financial assets and bank accounts. Both Age Pension age for our example. Total assets of say $350K

Pretty quickly we can assess they would receive about $1,000 per fortnight ($26K pa) from Age Pension. If we are happy to draw down a little on the super we might take as high as 7-8% from it per annum (21-24K) and they have a happy income level of $47-50K pa without putting too much pressure on the investments. No tax payable after offsets etc as allocated pension income is tax free.

That same client walks into Storm.

Say the house is worth $500K also. Draw down $400K from it. Withdraw super. Gear everything at 50%.

$1.4 M invested.
$1.1 M debt. 6.5% on home loan, 9% on margin loan. Total interest is $89,000

But the kicker is lets borrow the first and second year interest as well so we can pre-pay. How does that work? Lets say 2011/12 financial year. We can pay the interest for that year and in June pre-pay for the 12/13 year. All is a deduction in the 11/12 year. So interest costs are $89K, lets borrow an additional $180K to prepay.

Total debt $1.28M. Total deductions - $180K

All loans are interest only. All interest is a tax deduction as it is "claytons" or for investment purposes. (Love that term)

Storm projections "assumed" 10% return (income + "growth").

$1.4M @ 10% generates $140,000 in investment earnings. These would be taxable. BUT we have a deduction of $180K in year 1. So no tax. In fact we get a tax return of $40K. Total "return" generated = $140K + $40K = $180K. Give the clients $70K and keep $110K aside to fund next pre-payment of interest.

Year 2 - pre pay again using $110K - $20K left over

$1.4M generates $140,000, $90K deductions - $50K assessable income. Split between the couple and no tax once we count offsets etc.

Give the client $70K and we have $90K ($70K + $20K) left over for next year.

Now we are 3 years in. The "assumption" was that either the shares or the property have gone up in value so this game can carry on. But can you see how they could "inflate" what "living allowance" people were told they could take.

Same client - $20,000 more per year to live on. Of course people wanted to believe.

To the rest of the forum - there has been much talk on how could people have believed, trusted etc. From my experience most of my clients barely skim the advice I provide and I would say less than 5% actually stop and check forms I put in front of them.

I make a point if it is making investment changes to walk through the form and the advice but have seen how if I say the form is something basic like to update something or get say a nomination of beneficiary put on their super account, they sign without looking what they are signing. Put a sign here sticker on something and people don't look. 

I ask how many on the forum own a mobile phone on a plan and actually read the contract before siging it.


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## doobsy (3 January 2012)

Oh, as a PS, Storm worked a little differently.

They would have had the cash dam, been re-investing all dividends/distributions with the thoughts to sell down to top up the cash levels. Which added more risk than taking the distributions to the cash account.

On top of this they also regularly did not pay for the prepayments from the investment cashflow but instead "capitalised" the interest adding to the debt levels under the assumption that clients were better off having the distributions re-invested.

We all know how keen they were to have as much invested as possible for their fee calculations.

There was mention in earlier posts of EC and his hubris. I can say with certainty that storm head office and majority of their advisers were firm in their belief that markets would stop falling well before they did stop. Frank was right, they basically gambled with clients money after markets fell below their set "get out" points as to sell some or all down would have meant EC would have to admit he was wrong and the empire would have crumbled. He was all about protecting the business but as a result the clients lost plenty more than they should have.

I would think some of the monies sold down in the early part of the process would include those who had broken the rules and spent their cash dam and could not add the monies needed to keep LVR's under control so were triggering early margin calls and those who had capitalised interest and therefore had high starting lvrs compared to others. Both still wiped out, just earlier. But maybe they got to keep their homes with a small amount of equity pulled out.

I would say less than 2% were those strong enough to override headoffice and the advisers and DEMAND to be sold out. I also know for a fact that if clients went in wishy washy about it they were quickly convinced that even after only a 15% correction it was the WORST possible time to be selling. I bet there are a few who wish they stuck to their guns.


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## doobsy (3 January 2012)

And for those looking at my numbers and still confused how a client could look at it and have $1.4M invested but debts of $1.28M after borrowing the prepayments and not get worried, then (and I am happy to be corrected here) I am pretty sure the home loan debt was swept into the background and the only discussion became around the invested amount of $1.4M and the margin loan amount of $880K (63% LVR)


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## Frank Ainslie (3 January 2012)

doobsy said:


> And for those looking at my numbers and still confused how a client could look at it and have $1.4M invested but debts of $1.28M after borrowing the prepayments and not get worried, then (and I am happy to be corrected here) I am pretty sure the home loan debt was swept into the background and the only discussion became around the invested amount of $1.4M and the margin loan amount of $880K (63% LVR)




Hi Doobsy,

You are spot on with your comments. 

In my article _“Witness for the Prosecution”_ posted on the SICAG forum in October 2009 I made mention of the “Loan to Value Ratio” deception. Here is an extract from an excellent submission made to the PJ-C in 2009 that explains this fully:

*6 .The Loan to Value Ratio - The LVR Deception*
_“The main indicator of our debt/asset position was the gearing level or LVR which was available via Macquarie Margin Lending Summary- (MML)

During any advice session this was always a reference point. Whenever our advisor reviewed our position, the Macquarie Margin Lending LVR was always referred to and used as a key and current indicator of our true position and whether further investment should be undertaken. Sadly it is only now and in hindsight that we have come to understand more exactly the degree of obfuscation that clouded our understanding and judgement in relation the all important LVR (Loan to Value Ratio) which was used when planning our next steps - i.e. additional investments. The LVR was so critical in determining whether the step was judicious.

When advising us, our level of debt was always represented only by the LVR as per Macquarie Margin Lending’s Summary. There was no account taken of the $380,000.00 loan from the Bank of Queensland which was derived from the debt against the house. This was not visible as part of the debt/loan balance/LVR of our Margin Loan and was never referred to in discussions about our LVR.

Perhaps this was not Macquarie Bank’s responsibility to separately flag the $380,000 debt from the Bank of Queensland which was drawn against equity in our house. But perhaps it should have been. However we now realize that it certainly should have been STORM and our advisor’s duty to take account of this additional borrowing by incorporating this into the account alongside Macquarie Margin Loan LVR so that we had a true and accurate picture of our total debt level when considering the next investment step. This was never done.

This omission and failure to consider the WHOLE debt position obviously gave a false and misleading reading of our actual investment situation. So we are now of the view that every investment step we took was actually based on a false statement of our real debt position as only the Macquarie Margin Loan LVR was used as the debt indicator.

Consequently we were being put further and further into debt that we were not actually being made aware of, a debt that could not possibly be safely supported by the investments.

It now seems to us that from very outset we were advised to invest more and more based on the visible LVR alone, when in fact our real debt level ( i.e. the LVR as per our Macquarie Margin Lending Summaries + the $380,000.00 derived from home loan) should have signalled otherwise.

*7. A real example of the misleading LVR*
In the period from October to December 2007 our “Current Gearing Level was showing as 61.54% (Current Loan Balance $1,686,153.00: Market value $2,739,735.00) which, according to STORM and our advisor, would represent a very acceptable situation - a safe gearing level, a no worry situation and an ideal time to further invest.

In fact we took another step and invested a further $66,000.00 in December 2007.
BUT it seems to us that what really should have been not only visible, but also added to the loan balance to see the REAL LVR and true level of debt, was the additional $380,000.00 debt of borrowings against the house. This was after all borrowed along with the Macquarie Margin Loan with the sole purpose for investment into the Indexed Trusts.

Thus in the period from October to December 2007 the real LVR was in actual fact
75.06% i.e. Current Loan Balance: $1,686,153.00 + Home Loan of $380,000.00 =
$2,066,153.00 versus Market Value $2,739,735.00. It was not the touted acceptable 61.54% - Current Loan of $1,686,153.00 versus Market Value $2,739,735.00.

Why then were we advised to invest when the gearing level, taking into account the real level of debt, was in fact at a very dangerous and unacceptable level of 75.06% So, even when matters were under control and markets were still behaving in early 2007 and our visible yet deceptive LVR was showing on our MML Summary at a mere and supposedly safe and conservative 46.02%. the real and actual, but invisible and not taken account of LVR i.e. the one taking into account the home loan debt (invested into the market) should have read as 64.4% i.e. Loan value of $950,818.00 + Home Loan of $380,000.00 = 1,330,818.00 versus Market value $2,066,077.00 and not as 46.02% i.e.Loan Balance of $950,818.00 versus Market Value of $2,066,077.00

NOTE: - *Home Loan Borrowings of $480,000.00 were used as follows:
1. $380,000.00 was used to invest and the balance was then used as:
2. $60,406.00 to STORM as upfront fees
3. $36,224.00 to our cash dam

*8 The Double Jeopardy Mortgage*
The loan against the house was not ever described to us in terms of a double mortgage. Our advisor recommended we use the equity in our house and borrow $480,000.00 (60% of the Bank of Queensland’s valuation) for further investment into the Challenger Funds. The rationale for this was to boost our investment and its potential earnings and so have the ongoing capacity to generate our income of $85,000.00 p.a.

Perhaps we missed something in our Financial Plan in relation to the risk of liquidating 60 % of our property’s equity via the bank borrowing from the Bank of Queensland but the only reference to this risk in this strategy is on p 44: ( Annexure D )
“Many gearing arrangements rely on you continuing to earn income to pay interest on theborrowed funds. If your income is not completely secure protect yourself by....making contingency plans such as holding sufficient reserves against such as event. Apply the same caution if you are thinking of using your home as security – borrow conservatively as default on the loan could mean loss of security for the loan. If you have used your home as security, this means you could lose your house”

But, according to STORM and our Advisor our income was going to be completely secure because STORM’s product and strategy was proven – or was it? We had no other source of reliable income apart from what our investments would generate.
We were advised that the house borrowings were a significant part of the total borrowings and this would help expand our capital base and assure our income stream at the level of $85K p.a. So if borrowing against our house was a risk why put this strategy on offer and encourage/ persuade us that this was a good and safe course of action and that in fact we would not have really enough to live on if we did not do this. Furthermore the assurances of our own advisor were totally contrary to the risk outlined.

We had reservations using the house equity and expressed to our advisor our fear of the risk of losing our house and home. If the house was at risk we did not want to use the equity to boost our investment. It is clear now that the real risks inherent in this particular strategy were not clearly and transparently explained to us.

In answer to our concerns about using the equity of our house, we were repeatedly and unequivocally assured by our advisor that we were not being put at risk of losing our house. This would NEVER happen because if required the sale of the trust units would cover this debt, not the sale of the house.

We now know this was clearly totally incorrect and misleading. We can only assume that either our advisor had failed to read our Financial Plan and/or had failed to understand the risks inherent in the STORM Product and our Financial Plan - that the borrowings against the house for investment purposes meant that in fact the house was double mortgaged or did understand this risk. but did not make this risk clear and unambiguous to us when discussing this option. But then this would have meant contradicting The Financial Plan being recommended!"_

As I have stated previously, I cannot believe that a company such as Storm who had been in the business for some years would operate in such an inept manner unless there was an ulterior reason? Surely, we are talking here about basics, not rocket science! Was this merely a financial advisory firm acting in an irresponsible manner or was there something more sinister afoot? Were they villains or imbeciles? What's your view on this?


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## Julia (3 January 2012)

doobsy said:


> Julia - most retirement planning is based around cashflow. I will use a dummy example.



Thank you for going to the trouble of setting out the example.
To be honest, I'm incredulous that retirees could even consider participating in such a complex arrangement.  It seems that few of them actually understood what they were engaging in and I'm not at all surprised.



> But the kicker is lets borrow the first and second year interest as well so we can pre-pay. How does that work? Lets say 2011/12 financial year. We can pay the interest for that year and in June pre-pay for the 12/13 year. All is a deduction in the 11/12 year. So interest costs are $89K, lets borrow an additional $180K to prepay.



Sorry if I'm being obtuse about this, but what actually drove this prepaying, i.e. what was the purpose of it?  Wasn't the arrangement already more than complicated enough?


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## Julia (3 January 2012)

Frank Ainslie said:


> When advising us, our level of debt was always represented only by the LVR as per Macquarie Margin Lending’s Summary. There was no account taken of the $380,000.00 loan from the Bank of Queensland which was derived from the debt against the house. This was not visible as part of the debt/loan balance/LVR of our Margin Loan and was never referred to in discussions about our LVR.



So what did you think had happened to the debt incurred via the lending against the house?


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## doobsy (4 January 2012)

> Sorry if I'm being obtuse about this, but what actually drove this prepaying, i.e. what was the purpose of it?  Wasn't the arrangement already more than complicated enough?




All about doubling the tax deduction in the first year to prop things up. This allowed them to have extra "free" cash courtesy of the tax dept to get things started.

We took over clients who were still invested (got in very late so no margin call) and without that ability to capitalise that interest in the year following when it all went to mud, the earnings (income only in this case as no gains obviously - so around 4%) became taxable income that had no offset.

Everything and I mean Everything in the strategy was designed to make it hard to exit. EC had this sown up so that all roads led to head office. Getting in was easy - getting out was a nightmare. Once again we seem to touch on a trait of a cult.


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## Frank Ainslie (4 January 2012)

Julia said:


> So what did you think had happened to the debt incurred via the lending against the house?




Because we relied entirely on Storm to crunch the numbers we assumed that this house loan had been factored into the LVR equation. The fact that Storm chose not to do so was, in my opinion, a deliberate policy to deceive investors into believing that their portfolios were in better shape than they were. Further, I believe that in many cases borrowing against people’s houses was totally unnecessary and was merely a device to inflate Storm's bottom line. 

In our particular case, our borrowing against the house with the assets we already had in cash was totally unnecessary and of no benefit to us whatsoever even if the markets had not been subject to a GFC. Every time we borrowed, Storm lined its pockets. Everything it did therefore was to achieve this end.

People tend to forget that financial advisers have a duty of care and should aim to: 
* achieve your goals (not theirs) 
* better organise one's finances and retirement planning, and 
* work with you to find the right solution for you to make the most from your money.

Storm used us, its clients, to achieve its goals, used our assets to maximize its profits and find the right solution so that they could make the most from our money. As far as its duty of care was concerned, it had little care!


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## Frank Ainslie (4 January 2012)

doobsy said:


> All about doubling the tax deduction in the first year to prop things up. This allowed them to have extra "free" cash courtesy of the tax dept to get things started.
> 
> We took over clients who were still invested (got in very late so no margin call) and without that ability to capitalise that interest in the year following when it all went to mud, the earnings (income only in this case as no gains obviously - so around 4%) became taxable income that had no offset.
> 
> Everything and I mean Everything in the strategy was designed to make it hard to exit. EC had this sown up so that all roads led to head office. Getting in was easy - getting out was a nightmare. Once again we seem to touch on a trait of a cult.




Doobsy,

Once again you are on the money! _Getting in was easy, getting out was a nightmare!_

I do not believe the word _'cult'_ though aptly describes what Storm was all about. I have spent the last 3 years examining the know facts about Storm and the Banks involved with it. No doubt there are still a number of facts that will only come to light if and when this goes to Court. However, based on what I have uncovered, Storm operated a  scam rather than a cult.

The definition of a ‘scam’ is_ “a fraudulent or deceptive act or operation”_. The way Storm operated meets all the criteria.


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## robz7777 (4 January 2012)

Frank Ainslie said:


> Because we relied entirely on Storm to crunch the numbers we assumed that this house loan had been factored into the LVR equation. The fact that Storm chose not to do so was, in my opinion, a deliberate policy to deceive investors into believing that their portfolios were in better shape than they were. Further, I believe that in many cases borrowing against people’s houses was totally unnecessary and was merely a device to inflate Storm's bottom line.




No doubt, more Funds Under Management for them and the banks.. Taking out the 0.5% or 1% in management fees.. 



Frank Ainslie said:


> In our particular case, our borrowing against the house with the assets we already had in cash was totally unnecessary and of no benefit to us whatsoever even if the markets had not been subject to a GFC. Every time we borrowed, Storm lined its pockets. Everything it did therefore was to achieve this end.




You would have seen good returns had the ongoing borrowing to invest been made in a period similar to 2004-07, in theory the strategy could have been successful.. Only Storm failed to consider what returns you required to fund your retirement and the potential risk they were placing you in.. 



Frank Ainslie said:


> People tend to forget that financial advisers have a duty of care and should aim to:
> * achieve your goals (not theirs)
> * better organise one's finances and retirement planning, and
> * work with you to find the right solution for you to make the most from your money.
> ...




I find it incredible that the advisers or owners of Storm did not see the potential outcomes of their plans, did they expect to get off scott free when markets eventually went down, if the levels of gearing were high enough it wouldn't have mattered if the market correction was only 20%.. We can only hope that the events of 2008-09 caused significant stress and panic to the owners and advisers of Storm as they realised that they were in serious sh*% for their greed..


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## bunyip (4 January 2012)

Frank Ainslie said:


> You have mentioned chess. I use to be a chess player myself, having studied the game for some years. Nowadays, I play competition poker instead – for fun, that is, because I haven’t got the money to do otherwise. I find that it is the ultimate distraction from the problems that have beset us. Helen and her mother also do the same so it’s a family thing. Bunyip will be pleased to hear this because he can now say, _“I told you they were gambling orientated!”_ I prefer to say that we are challenge driven!
> .




I’ve never played poker, so personally I know nothing about the game.
However, one keen player of my acquaintance claims that for a skilled player the game of poker is not true gambling, but rather is a game of skill and strategy, with a better than even chance of winning if the player is sufficiently skilled. 

By comparison, the Storm investment model did not offer a_ ‘better than even chance of winning’._
 Someone with say 400k of their own money in the stockmarket could use the strategy to triple or quadruple their market stake by mortgaging their home and borrowing like crazy to fund further market investment. Hold for the long term, and keep adding more fuel to the fire by sinking more borrowed funds into the market through utilising the increasing value of the home and the portfolio to raise further loans.

Such a strategy was a pure gamble because its success was dependent on the impossibility of a continuously bullish stockmarket. The failure of the gamble was guaranteed when the inevitable bear market set in.
The tragedy of the Storm debacle was that investors didn’t seem to understand this gamble they were taking – they didn’t scrutinize the strategy sufficiently to find this out for themselves, and Storm sure as hell wasn’t going to tell them (what salesman ever points out the worst features of the product he’s selling?)
The only way anyone could win from this gamble was to modify the_ ‘buy and hold’ _rules to_ ‘hold only until you have a decent profit, then bank the profit by cashing out some or all of the portfolio’._
I wonder if any Storm investors were actually astute enough to do this?

How about you, Frank? You claim to be astute – did you ever take any profit off the table and stash it away somewhere safe?


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## bunyip (4 January 2012)

Frank Ainslie said:


> Further, I believe that in many cases borrowing against people’s houses was totally unnecessary and was merely a device to inflate Storm's bottom line.
> 
> In our particular case, our borrowing against the house with the assets we already had in cash was totally unnecessary and of no benefit to us whatsoever even if the markets had not been subject to a GFC. Every time we borrowed, Storm lined its pockets. Everything it did therefore was to achieve this end.
> 
> Storm used us, its clients, to achieve its goals, used our assets to maximize its profits and find the right solution so that they could make the most from our money.




Gee Frank – it took you long enough to figure out this simple information didn’t it?

Wasn’t it _*you*_ who accused _*me*_ of being ‘slow on the uptake’?


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## bunyip (4 January 2012)

Frank Ainslie said:


> People tend to forget that financial advisers have a duty of care and should aim to:
> * achieve your goals (not theirs)
> * better organise one's finances and retirement planning, and
> * work with you to find the right solution for you to make the most from your money.
> ...




I don’t think anyone on this forum is forgetting that financial planners have a duty of care to their clients. 
Nobody except Cassamatis denies that Storm neglected that duty of care. 
We all know that Storm were just using their clients as cash cows, without any real concern for the best interests of the clients.

But what _*you*_ seem to forget is that the duty of care was not only on Storm, it was on you as well.
_*You*_ had a duty of care to treat your life savings with respect.
_*You*_ had a duty of care to leave no stone unturned in an effort to find out every scrap of relevant information that could affect the outcome of your venture.

*You* neglected that duty of care by handing all the responsibility over to Storm and saying_ ‘OK lads, I believe everything you say – here’s 140 grand for you, I’ll leave everything up to you and I’ll just do whatever you tell me’._

Yes Frank, I know you were paying a licensed financial planning firm for a professional service and a supposedly sound strategy.
 And yes, I know you should have been able to expect them to provide exactly that. 
But that does not remove your responsibility to thoroughly look into what they were offering before committing millions of dollars to it.

Your complaints about Storm are fully justified - I'd be complaining about them too if I'd been on the receiving end of their shappy treatment of their clients.
They didn’t do the right thing by you. 
But you didn’t do the right thing by yourself either.


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## Julia (4 January 2012)

Frank Ainslie said:


> Further, I believe that in many cases borrowing against people’s houses was totally unnecessary and was merely a device to inflate Storm's bottom line.



Frank, this is the exact point some of us have been attempting to make throughout this thread.  You say you wanted the modest income of around $45,000 p.a. and you could easily have generated this from your asset base without borrowing anything at all.  You were not wealthy by any means, but you had enough to provide you with the income you felt necessary with next to no risk.

I'm genuinely not attempting to point up foolishness or anything else.  Hopefully the thread has moved past that.  I'm just no more able to understand why you engaged in this whole very complex arrangement when you didn't need to than I was many pages ago.

Re your comment about Storm being a scam rather than a cult, I agree.  Usually I think of a scam as being those emails that purport to come from the FBI or some Nigerian advising that we are in line for a wonderful payment from someone we've never heard of.  However, I guess the definition can be extended to Storm's apparent capacity to persuade people to engage in such risky stuff.

On "duty of care", I couldn't believe it when the people involved in the enquiry into the financial services industry came out with the apparently remarkable suggestion that in future all advisers must prioritise a duty of care toward their clients.  It was as though such a priority was some sort of revelation!


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## Solly (5 January 2012)

I acknowledge the duty of care statements but to me primary issues are the risk assessment and evaluation undertaken by the Stormers regarding the Storm gearing strategy. I'm sure not many would have sat down and completed a thorough Risk Impact Grid or Probability Chart to assess the probability of occurrence and impacts of risks. Maybe many, like Frank, have key competencies in other areas and not in the "dark arts" of Financial Planning and wealth accumulation and creation, after all that is why the Stormers were seeking professional guidance in this area.

I believe many could not identify and evaluate the risks that were involved especially if they lacked an in depth understanding of how the model worked as presented. I'm not sure how Stormers could properly  determine likelihood, determine consequence, estimate the level of risk and prioritise risks when not all the data presented to them was accurate, especially as it would appear around the in-house portfolio software monitoring system safeguards. I'm sure there were very limited ways and opportunities for Stormers to identify and evaluate treatment options and implement treatment plans when things went awry. I'm sure these responsibilities were innately transferred to Storm as a risk mitigation strategy when they accepted the advice. 

Just another comment about the 80/20 Pareto principals previously mention in this thread, I have asked one Stormer about why they still pursued the Storm strategy after as it appeared many walked away after seeing the investment overview. Their response was that they thought that they were on a sound footing as it was not mainstream and that they were part of the select few who were following a new way to wealth creation. I wonder what deliberate techniques were used to reinforce the sales pitch.


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## bunyip (5 January 2012)

Julia said:


> Frank, this is the exact point some of us have been attempting to make throughout this thread.  You say you wanted the modest income of around $45,000 p.a. and you could easily have generated this from your asset base without borrowing anything at all.  You were not wealthy by any means, but you had enough to provide you with the income you felt necessary with next to no risk.
> 
> I'm genuinely not attempting to point up foolishness or anything else.  Hopefully the thread has moved past that.  I'm just no more able to understand why you engaged in this whole very complex arrangement when you didn't need to than I was many pages ago.




Julia makes a good point here, Frank.
You must have been asked at least a dozen or more times....._’Why did you mortgage your home and borrow a pile of money to sink into the stock market when, without any borrowing at all, you could have easily generated sufficient passive income to fund a very comfortable retirement’?_
You’re offended whenever someone suggests that greed influenced you. Yet you’re unable to explain any other motive for your actions.

I can understand the thinking of someone at or approaching retirement age whose financial position was insufficient to fund the sort of retirement they wanted. I can see how Storm appeared to offer a solution to their problem.
Different story though with someone like you who was in the fortunate position of being able to enjoy a comfortable self-funded retirement. I still shake my head in disbelief at your actions.

When you first appeared on this forum you claimed you were here _‘to tell it how it was’._
OK then– tell it how it was. What influenced your decision to mortgage your home and commit millions of dollars (much of it borrowed money) to the stock market when you had absolutely no need to do so?

Of course I respect your right to keep this information to yourself if you wish. But you did claim you were here to ‘tell it how it was’.


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## DocK (5 January 2012)

Solly said:


> I acknowledge the duty of care statements but to me primary issues are the risk assessment and evaluation undertaken by the Stormers regarding the Storm gearing strategy. I'm sure not many would have sat down and completed a thorough Risk Impact Grid or Probability Chart to assess the probability of occurrence and impacts of risks. Maybe many, like Frank, have key competencies in other areas and not in the "dark arts" of Financial Planning and wealth accumulation and creation, after all that is why the Stormers were seeking professional guidance in this area.
> 
> I believe many could not identify and evaluate the risks that were involved especially if they lacked an in depth understanding of how the model worked as presented. I'm not sure how Stormers could properly  determine likelihood, determine consequence, estimate the level of risk and prioritise risks when not all the data presented to them was accurate, especially as it would appear around the in-house portfolio software monitoring system safeguards. I'm sure there were very limited ways and opportunities for Stormers to identify and evaluate treatment options and implement treatment plans when things went awry. I'm sure these responsibilities were innately transferred to Storm as a risk mitigation strategy when they accepted the advice.
> 
> Just another comment about the 80/20 Pareto principals previously mention in this thread, I have asked one Stormer about why they still pursued the Storm strategy after as it appeared many walked away after seeing the investment overview. Their response was that they thought that they were on a sound footing as it was not mainstream and that they were part of the select few who were following a new way to wealth creation. I wonder what deliberate techniques were used to reinforce the sales pitch.




One aspect that I was reminded of recently was the constantly reinforced message that the sharemarket would always recover from any "dips" and was far superior over a long-term timeframe to any other asset class.  Many charts showing the very longterm upwards trend were displayed as proof that despite tech bubbles, 9/11 attacks etc - the very longterm trend of the market was forever upwards.  Indeed, if you look at a chart from 1990 to 2007 it looks just lovely, doesn't it?  A fall of the magnitude that then happened was clearly not envisaged nor tested for!  The fact that the Storm method involved investment in the broad market rather than in individual shares was promoted as being an extra degree of safety as one wasn't exposed to any individual company.  Naturally the seminars etc neglected to mention that it was possible to do this via AFIC, STW, Argo etc -- that would not have been in their interests.  (And yes, more fool us for not finding out this information for ourselves).

Likewise, several charts and examples were provided showing the opposite for property.  Or if not exactly opposite, "proving" that investment in property was inefficient when compared to investment in shares.  The fact that their target market almost all owned their own homes was used to demonstrate that most of us were already "overweight" in property and needed to rebalance our investments by accessing the equity that was locked away in our family homes (and therefore was very lazy and needed to be put to work) in order to spread our investments over more than just the one inefficient asset class.  The SOAs reinforced this message with many graphs and pie charts demonstrating the % of wealth held in property before taking their advice, vs the much more balanced graph that would result.  I'd appreciate Doobsy's input here, but I somehow suspect that most FPs wouldn't include the family home when looking at a distribution of _investments_ between asset classes?

Doobsy is quite correct in that the home loan was never included when discussing or looking at LVRs - only the margin loan was used for this purpose.  The SOA would demonstrate that a very prudent LVR of 55% was in place - but this didn't include the home loan.  Unless one was very aware of what one owed, it would be very easy indeed for some, particularly those who had been with Storm for many years, to lose track of exactly how exposed they were to any market falls - as history has shown all too clearly.

It was indeed a very slick sales pitch designed at instilling fear that we'd done the wrong thing by paying off homes rather than investing in the sharemarket, and that inflation etc would see us unable to fund our retirements unless we "rebalanced" our assets.  Cassimatis, may he rot in hell, did an excellent job of anticipating any stumbling blocks and presenting "proof" that his method was revolutionary and vastly superior to the run-of-the-mill strategies that were mostly employed by other FPs.


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## doobsy (5 January 2012)

Dock

Each planner will look at the family home in different ways. My approach has always been to consider it depending on the circumstances.

People need somewhere to live. An average person I will ignore the exposure but certainly consider any debt. We have also found that those who say they will downsize are lying. If they sell a $1M house, they will buy a $1M unit. Downsize in space, not value is the norm.

So the average person I will always include listed and if appropriate unlisted property in their strategy.

Someone sitting on above average value property (whether by design or luck) as the family home I would probably underweight in their investments but still have some.

Those who have multiple rental properties and are most comfortable with this sort of property I might not give them any more exposure although I find this causes trouble as they then compare "their" rentals with "our" investment portfolio. As they don't value the rental every day like their share/mgd funds are, this can cause friction at times. This also applies to clients where we manage super and they run their own investment shares directly.

Is money sitting in a family home lazy - absolutely but it provides a return by default. By this I mean should you borrow back against it that is a cost. Currently with interest rates where they are the cost is 6.5% - therefore that is the implied return. If you don't re-draw then you don't have that cost. If you can invest the money and get a better return than that then you pick up the "DIFFERENCE". This is important - if you did put it in shares and did get 10%, that is not what you earnt. You earnt 3.5% (ignoring tax deductions etc). SO the argument comes down to is it worth taking the additional risk for the return. Me personally - I would want more than 3-5%.


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## Julia (5 January 2012)

DocK said:


> One aspect that I was reminded of recently was the constantly reinforced message that the sharemarket would always recover from any "dips" and was far superior over a long-term timeframe to any other asset class.



And probably that's actually true over the very long term.

Asset classes are cyclical.  I wouldn't be buying property now as an investment but did very well from it in the period of high inflation in the 80's.  Certainly interest rates were high but so were rents, and capital values doubled in as little as a year in parts of NZ.



> I'd appreciate Doobsy's input here, but I somehow suspect that most FPs wouldn't include the family home when looking at a distribution of _investments_ between asset classes?



Doobsy has explained his approach.  I would include the family home when looking at an asset base.   There are many people who are only 'comfortable' investing in property and have several IPs plus the home they live in.  Imo by declining to take advantage of the stock market when it's doing well, they're missing an opportunity, but I get their sense of comfort from bricks and mortar.




> Doobsy is quite correct in that the home loan was never included when discussing or looking at LVRs - only the margin loan was used for this purpose.



To me that just makes no sense.  The debt of the home loan didn't just evaporate.

I'm assuming any statements of LVR came from Storm?  i.e. if the margin loan was with, say, Macquarie, I'd expect the LVR statements would be on Macquarie's letterhead, thus making it clear that LVR only referred to the margin loan and therefore the home loan was an additional debt.



> The SOA would demonstrate that a very prudent LVR of 55% was in place - but this didn't include the home loan.  Unless one was very aware of what one owed,



I'm not trying to be either critical or confrontational, but I simply don't understand how anyone, when dealing in debts of hundreds of thousands, could be unaware of what they owed.


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## doobsy (5 January 2012)

There has been much talk of whether EC and co could see the "black swan" coming. 

With the help of the web archive I have managed to dig out some of the newsletters that my ex boss put out around that time. This was published in the local paper. All easily and readily available for Joe Public to read. He copped quite alot of criticism from in and out of the industry pre crisis.

26 March 2007
Last week I mentioned the demise of lenders in the sub prime loan area of the US. As at the time of writing there are now 42 lenders who are now defunct and a further 12 that are ailing.
Why should the lending problems in the US be of concern to us in Australia? Whether we like it or not our financial markets are inextricably linked.
The plankton theory of financial markets is that you need small investors to ultimately feed the big investor. If the first home buyer (the plankton) disappears due to tighter lending practices, then you do not have a buyer that allows the existing home owner to experience an escalation in price. Until recently the US consumer has been using the increased value in their home as an ATM. The home equity withdrawals have help drive the US economy and ultimately corporate profits (share prices).
The other problem that occurs when an economy has a prolonged period of prosperity is that people tend to become over-confident. Prudent spending and investment habits are forgotten in the belief that the good times will last indefinitely.

When the upward cycle is broken there is a rush to unwind the investments that were once considered a good thing (remember the tech boom and subsequent bust). Unfortunately what happens is that the speculative investments can’t be sold as the market for them has evaporated (people lose their appetite for risk), so to cover the loan liabilities the quality investments are cashed in.

Will this happen this time? The sharemarket volatility of the past few weeks is an indicator that investors are jittery but are not yet convinced the good times are over. It is a delicate balancing act. If the US Federal reserve can stop the rot in the sub prime loan market then there will still be enough “plankton” in the system, but if it tips too far then confidence will be lost and this will flow through to a significant correction in sharemarkets.
In my opinion it is best to adopt a diversified approach to investing. If you have made good profits in recent years consider realising some of those profits and paying off debt or re-balancing your portfolio. In the long run the prudent investor will enjoy a reasonable level of return with lower volatility.

14 May 2007
Jeremy Grantham has recently completed a 6 week global tour (which included Australia). His observations from this tour were the topic for discussion in his latest letter to clients.
The shortened version of his letter is “Everything is in bubble territory,” he says. “Everything. The bursting of this bubble will be across all countries and all assets.”
So for those investors who like to err on the side of caution, the advice is simple: If you have done well out of the market consider taking some profits and re-distributing these funds into fixed interest and property. For those with borrowings, look to reduce your level of debt with the realised profits.

18 June 2007
Regular readers will know that I have been cautious on the direction of the share market for exactly the same reason. Investors chose to ignore or are ignorant to the fact that share markets do not rise at a rate of 20% plus per annum. At some point financial gravity will kick in and markets will come back to earth with a thud. Unfortunately the higher markets go, the more exuberant the investor becomes and the more foolish the investment activity. When this current market cycle unwinds we will hear the horror stories of investors who over-borrowed to invest in what they thought were a sure thing.

29 October 2007
A friend recently said “I see you are still writing your doom and gloom articles on the share market.” My response was “It is more words of caution.”

20 years of financial planning have taught me that markets deserve great respect. The Financial Review recently reported that margin lending firms recorded their biggest ever quarter, for the period ended 30 June 2007.
The article stated the average margin loan interest rate is 9.5% per annum. The 50 year average return from the Australian share market (growth and dividends) is around 11 - 12%. The past 4 years has seen returns of 20+% per annum, but no reasonable market participant believes this will continue indefinitely. So even if markets return to the average, you will be lucky to make a net 2% return. But we all know that averages are achieved after a several periods of rise and fall.
Statistically the odds of a fall are getting greater and yet the rush to borrow money to invest in a mature market has reached record levels. The herd mentality is alive and well.

For those who have borrowed excessively to invest in the sharemarket it is timely to heed the words of caution by people who have been there and done that. The party will not last forever.


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## doobsy (5 January 2012)

Thought I would also mention that Nassim Taleb wrote a book called "The Black Swan", a hard read but in it is a wonderful analogy of how markets work.

Taleb points out that, for the unsuspecting Thanksgiving turkey, life seems good. They're well-fed and kept for days on end. They're living the life. Each day of feeding boosts their confidence in being fed tomorrow.   The problem, of course, is that all that fattening and making the turkey happy are a means to an end – the end being THE END for the turkey. Not only is he not getting fed that day, he will actually be the one being fed to others.


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## Frank Ainslie (5 January 2012)

Solly said:


> I acknowledge the duty of care statements but to me primary issues are the risk assessment and evaluation undertaken by the Stormers regarding the Storm gearing strategy. I'm sure not many would have sat down and completed a thorough Risk Impact Grid or Probability Chart to assess the probability of occurrence and impacts of risks. Maybe many, like Frank, have key competencies in other areas and not in the "dark arts" of Financial Planning and wealth accumulation and creation, after all that is why the Stormers were seeking professional guidance in this area.
> 
> I believe many could not identify and evaluate the risks that were involved especially if they lacked an in depth understanding of how the model worked as presented. I'm not sure how Stormers could properly  determine likelihood, determine consequence, estimate the level of risk and prioritise risks when not all the data presented to them was accurate, especially as it would appear around the in-house portfolio software monitoring system safeguards. I'm sure there were very limited ways and opportunities for Stormers to identify and evaluate treatment options and implement treatment plans when things went awry. I'm sure these responsibilities were innately transferred to Storm as a risk mitigation strategy when they accepted the advice.
> 
> Just another comment about the 80/20 Pareto principals previously mention in this thread, I have asked one Stormer about why they still pursued the Storm strategy after as it appeared many walked away after seeing the investment overview. Their response was that they thought that they were on a sound footing as it was not mainstream and that they were part of the select few who were following a new way to wealth creation. I wonder what deliberate techniques were used to reinforce the sales pitch.




Hi Solly,

I think at times we are seeking to make the Storm fiasco more complicated than needs be.

Some on this forum are still failing to (or do not want to) grasp an important fact. We paid a lot of money to Storm so we had every right to expect expert sound financial advice. Further, we had no reason not to trust such advice. 

IJUSTKNEWIT posted the following question recently:

_“Well Frank no one seems to want to take your challenge based on the fact the are not legal people and admit they know little about the law. So we must assume that when needed those same people seek out a lawyer or someone that is familiar with the law when they need help. Should they not be self educated in Law and know what they are signing, the same way the Investors should have been self educated in Financial Planning and knew what they where signing?" _

This, to my mind, is one of the most pertinent questions asked on this forum! When one employs a professional in any given field, one is relying entirely on that person’s advice because that professional is selling his or her expertise. Therefore, to claim, as some have, that we were foolish to trust such individuals is a nonsense. We relied on financial advice from qualified people in much the same way one would rely on any other professional, be they a lawyer or otherwise. 

If a lawyer represents you case poorly in a court of law there is little you can do about it. You are entirely in his hands and you certainly do not any time try to tell him about the law. Indeed, how could you because he, not you, is the expert. That's what you pay him for!

There is no difference where a financial adviser is concerned. You rely entirely on his or her knowledge of the market place and if that financial adviser's advice is poor then you must wear the consequences. *However, the Storm saga is not about poor advice*. If it were, the directors of Storm and the Banks involved with Storm wouldn’t be in the dock.

As professional financial advisers, Storm’s job was to evaluate risks and be mindful of our needs, not theirs! Storm and the Banks as financial advisers and institutions had a duty of care that is undeniable. There is no way a person that had no investment nous (most of us) would deduce that the Storm strategy was _'high risk'_. In fact Storm did everything to convince its clients otherwise. Storm had to because their clients wouldn't have entrusted their money with Storm if it hadn't!

Many professional people put their trust in Storm. I was one of them. In our own fields we are considered experts (I have the qualifications and cv to prove it), but it doesn’t follow because we are experts in one area, it necessarily follows that we have the necessary acumen in another. 

My field is international logistics. If someone were to entrust their freight forwarding needs to me, informing me that the cargo in question was considered _"dangerous cargo"_, and I omitted to tell the shipping company, whose fault would that be? Further, if as a result a fire broke out on board a ship caused by such cargo, should I be blamed or my client. To therefore imply that the client must also share part of the blame in such circumstances (as some uninformed people on this forum claim)  is a ludicrous notion. The fault would remain entirely mine for doing the wrong thing. How could my client possible know that I wouldn't do the right thing by that client?

*That’s why I cannot go along with some Stormies who somehow or other hold themselves to blame in all this. "How could you possibly that the people you were dealing with were fraudsters?" They lied to us, deceived us, and used our assets for their own personal gain. They are entirely to blame, not us, not you!*

For those that still insist despite the evidence that we should share some of the blame, please explain why you (who have already admitted that you know little about the law) would place your trust entirely in the hands of a lawyer, but would treat another professional such as a financial adviser differently? If you can give me a satisfactory answer, I might take the comments by people such as Bunyip seriously! He hid from view when this question was first asked. Maybe he would now care to enlighten us with his wisdom???


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## DocK (5 January 2012)

Julia said:


> To me that just makes no sense.  The debt of the home loan didn't just evaporate.
> 
> I'm assuming any statements of LVR came from Storm?  i.e. if the margin loan was with, say, Macquarie, I'd expect the LVR statements would be on Macquarie's letterhead, thus making it clear that LVR only referred to the margin loan and therefore the home loan was an additional debt.



Statements from the margin lender would naturally only deal with the lvr of shares held as security against the margin loan only - that is quite normal and to be expected.  Discussions, reviews and SOAs from Storm however could reasonably, and I feel certainly _should_ have included the home loan debt when portraying a client's overall exposure to the market.  In effect, I guess I'm saying that both the individual lvr of the margin loan and the overall lvr of the client's total debt/investment should have been made clear in both the SOA and at any review.  



> I'm not trying to be either critical or confrontational, but I simply don't understand how anyone, when dealing in debts of hundreds of thousands, could be unaware of what they owed.




I'm sure I'm not the only ex-storm client who was aware (all too painfully at times) of their total debt - but clearly there were also many older, less computer literate clients who were either confused about what the stated lvr on their soa covered, or didn't understand the jargon sufficiently to work it out.  I agree with your sentiment, however can also understand how some may have become unaware of the full extent of their predicament until it was too late to recover.


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## Solly (5 January 2012)

> *"Storm Financial founders sue indemnity insurers for $750k*
> 
> THE former principals of failed Storm Financial have sued their insurance company to recover nearly $750,000 they maintain should have been paid to cover legal bills.
> 
> Emmanuel and Julie Cassimatis allege in a claim filed in the Queensland Supreme Court that Axis Specialty Europe has not honoured their policy aimed at protecting company directors and officers"




More by Anthony Marx @ couriermail.com.au


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## Judd (5 January 2012)

More and more the posts confirm my uneducated opinion that individuals have a different approach to advice and/or risk.

Frank has indicated that because he, and others, consulted a (qualified) financial adviser, who said it was a good strategy to draw on the family home to invest, it was OK.  And that is a valid position.

Others, like me, who has only once consulted an FP, told them to shove it when the same was suggested.  Having sweated blood and good money to get the title deeds out of the bank's clutches there was no way on earth I was going to use the roof over my head as a piggy bank.  And that is also a valid position.

doobsy, indicates that it depends......  Again, a valid position.

I just get the horrible feeling that the efforts by various parties to "standardise" financial advice in the future is doomed to failure.  I hope not but it is my gut feeling.  

Way too many individual variables, much regulation and the on-cost will make it very hard for those who want financial advice (and notice I typed want as opposed to the inference from the FP bodies/lobbies that the 70% of the population who don't seek advice, need it - maybe a number of people are happy as they are and don't want their life being complicated) to be able to afford it.


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## bunyip (5 January 2012)

Frank Ainslie said:


> For those that still insist despite the evidence that we should share some of the blame, please explain why you (who have already admitted that you know little about the law) would place your trust entirely in the hands of a lawyer, but would treat another professional such as a financial adviser differently? If you can give me a satisfactory answer, I might take the comments by people such as Bunyip seriously! He hid from view when this question was first asked. Maybe he would now care to enlighten us with his wisdom???





Hid from view? I don’t think so, Frank old man, I simply ignored the question because I thought it was stupid and irrelevant and it showed that the person asking it lacked the capacity to comprehend the significant differences between engaging a lawyer to represent you in a legal matter, and committing vast sums of money, much of it borrowed, to a business investment.
With the business investment you have plenty of opportunity to thoroughly scrutinize the proposal before committing millions to it. This holds true regardless of whether you do it all yourself or you go through an investment adviser. Pretty much all the information you need is available free on the internet.
You can do cash flow projections, risk assessment, anything relevant to your proposed business can be investigated thoroughly if you commit a bit of effort to it.

This is a very different situation to being represented by a lawyer – you can’t just jump on the net and have access to the same amount of law-related information as what’s available about share markets, margin loans, and general investment matters. 

There are very good reasons to thoroughly look into any investment before proceeding, the most obvious being that if you don't then you greatly increase the likelihood of getting burnt.
If you fail to look into it, then more fool you. Maybe you’ll be more careful next time.

Nine out of ten people walked away after looking at the Storm proposal. If they could see the pitfalls, then you would have been able to too....._*IF*_ you’d put a bit of effort into looking instead of being so gullible as to blindly believe everything Storm told you.
If you’d handled your stock market investment project with similar thoroughness to which you handled your shopping center project, then you would have been among the 90% who rejected Storms outrageously reckless gamble. You could have been sitting on the sidelines with the rest of us interested observers.

By the way, Frank, we’re still waiting for you to explain why you mortgaged your home and borrowed a million or so dollars, when you could have easily funded a very comfortable retirement without borrowing a cent.


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## Julia (5 January 2012)

DocK said:


> Statements from the margin lender would naturally only deal with the lvr of shares held as security against the margin loan only - that is quite normal and to be expected.  Discussions, reviews and SOAs from Storm however could reasonably, and I feel certainly _should_ have included the home loan debt when portraying a client's overall exposure to the market.  In effect, I guess I'm saying that both the individual lvr of the margin loan and the overall lvr of the client's total debt/investment should have been made clear in both the SOA and at any review.



I totally agree.  Should I deduce from your saying  "the overall LVR *should* have been made clear in the SOA and any subsequent review" that it wasn't so stated?
Please don't answer if the questions seem intrusive, but I'd be interested to know if you received regular statements, including LVR from the margin lending provider?
Nothing at all from Storm stating your overall position?

If not, did you ask for these?


Frank:  







> Some on this forum are still failing to (or do not want to) grasp an important fact. We paid a lot of money to Storm so we had every right to expect expert sound financial advice. Further, we had no reason not to trust such advice.



This is just yet another copy and paste of what you have already said dozens of times.
I think we are all aware that you have no intention of acknowledging the need for personal evaluation of risk and the application of basic common sense.

So perhaps, if you have nothing new to add, accept that your continued repetition of the same statement is a bit pointless.

The comments from others, on the other hand, about the LVR relating to just the margin loan rather than the overall client position, is interesting and I thank the people who have discussed this.


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## Frank Ainslie (5 January 2012)

bunyip said:


> Hid from view? I don’t think so, Frank old man, I simply ignored the question because I thought it was stupid and irrelevant and it showed that the person asking it lacked the capacity to comprehend the significant differences between engaging a lawyer to represent you in a legal matter, and committing vast sums of money, much of it borrowed, to a business investment.
> With the business investment you have plenty of opportunity to thoroughly scrutinize the proposal before committing millions to it. This holds true regardless of whether you do it all yourself or you go through an investment adviser. Pretty much all the information you need is available free on the internet.
> You can do cash flow projections, risk assessment, anything relevant to your proposed business can be investigated thoroughly if you commit a bit of effort to it.
> 
> ...




Bunyip,

Stop using misleading figures that you have plucked out of the air. How do you know that 90% walked away? Where's your proof?

Because you ignored a fundamental question on the pretext that you thought it was _"stupid and irrelevant"_ is more an excuse by you not to answer the question posed rather than an answer. Once again, you have chosen to ignore a direct question, deciding instead to give us more of the same. 

_This is a very different situation to being represented by a lawyer_ No it isn't! Both lawyers and financial advisers are professionals. Why should people trust lawyers and not financial advisers? How many lawyers in their time have burnt their clients by giving them bad advice? Yet, you would still rely on your lawyer entirely.

Remember that the Internet is also readily available to people that want to learn about aspects of the law as well as financial matters. Why don't people jump on the Internet when they employ a lawyer if such is the case? There is no difference, is there, except in your peculiar way of looking at things? When people employ lawyers, they don't feel the added need to search the Internet to see whether the lawyer is giving them good advice because they trust that lawyer completely to do his job. We trusted Storm's advisers to do their job! It's the same thing!

Please explain to us all therefore why you consider there is a difference? Your answer so far is not addressing the question. Frankly, I don't believe you can justify your position. Prove me wrong! Do it with logical argument rather than your opinions that are not supported by any facts. Until you do, why should I take anything you say seriously or lend any weight to your comments?

To use words such as _"outrageously reckless gamble"_ is an attempt by you to be evocative. Your posts are always full of such expressions which is a sure indicator that you are not a serious poster but rather one that just likes to stir things up. No matter what anyone says, you are intractable in your thinking. No matter what information is presented, you look for arguments rather than making any attempt to come to grips with what really happened. Can you wonder that I give no serious credence to anything you say? Say something worthwhile that has a real bearing on what happened and I may just listen!


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## Monario (6 January 2012)

I have stayed away from this thread for sometime due to what I feel is ignorance on some peoples behalf in relation to professional advice and management. I see Frank Ainslie continually getting an ear bashing for his belief that if you go to an accredited and endorsed professional for these services, and the service you receive is sub standard and ends up causing you a loss of any kind you are entitled to compensation.

Yes, many of you on here a well versed in finances, and I applaud you for it, but we cannot all be experts in everything in our lives, which is why people go to professionals for a service.

If I could self serve myself in every facet of life I needed I would be a rich man, I would love to be well versed in medicine, an automotive genius, a builder and electrician, lets throw in a hair dresser, dentist and engineer, perhaps a plumber as well.

Hmmm, seems a little impractical does it not?

Now, I am Damn sure if anyone of the nay sayers on here went to any of the above and received bad service and workmanship resulting in loss and damages you would be seeking compensation, why should it be any different in the situation of Storm.

A professional service that was accredited and endorsed was sought out, and used, mistakes were made, clearly. So in my and many others opinion compensation should follow. Mistakes were made on many fronts, and the Banks had a hand in creating a lot of the trouble, not all of it, no, but they were riding the Storm wave as well, and making handsome profits.

So, if you have ever asked for a refund for dodgey work, as far as I am concerned anything that comes from your mouth to the contrary is null and void.

On the other hand, if you have always blamed yourself, for following a professionals advice when things go wrong and have never sought compensation, speak up I would love to understand your thought process….


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## Solly (6 January 2012)

I was at a social event last night where there was also a Stormer. I try in these contexts not to bring up the Storm saga. But last night, maybe after reading some of the recent posts here, I decided to ask about what tests he applied to the Storm model to evaluate the risks before agreeing to the strategy. 

His response was quick and direct, he advised me that he totally relied on the professional advice from Storm and like Frank, he believed he was paying good money for this professional advice. He is very successful in his field of expertise but has limited knowledge of the Financial Planning and wealth creation areas and chose Storm as he believed that their strategy and professional advice was sound.

I asked if he would have picked another planning company if he was to start over again and his response was a resounding "No", because at the time he believed that there was nothing wrong with the Storm strategy as presented.

When I pressed him further about the collapse and did he feel that he should have acted to exit the strategy when the markets declined, his response was a definite "No". He then asked what had he really done wrong to be in the financial situation he is in now. And he closed the conservation by saying, "Look mate, I'm not the one before the courts defending why I invested in Storm and it's not me who will have the manacles slapped on."

I then steered the conservation towards the cricket.


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## bunyip (6 January 2012)

Frank Ainslie said:


> Bunyip,
> 
> When people employ lawyers, they don't feel the added need to search the Internet to see whether the lawyer is giving them good advice because they trust that lawyer completely to do his job. We trusted Storm's advisers to do their job! It's the same thing!




Frank

My way of doing things is clearly quite different to yours. 

I say it’s just common sense to check into things to the best of your ability before proceeding. That’s what I did before undergoing chemotherapy treatment for cancer – I looked as thoroughly as I could into the treatment, got a couple of opinions from different doctors, found out what drugs were to be used in the treatment and what their side effects were, looked into alternative treatments.

Anyone with a bit of common sense thoroughly looks into a financial proposition before committing millions of dollars to it. It’s quite easy to do so, as all the information you need is very basic and is readily available to the general public.
By failing to properly look into Storm’s strategy, you failed in your duty of care to yourself, as you well know. More fool you. You got burnt. You’ll get burnt again if you can’t admit your mistakes and learn from them.

You spend considerable time on this forum trying to justify your actions in relation to Storm. Rave on about lawyers all you want, but you cannot justify the stupidity, gullibility and incompetence you displayed in your dealings with Storm.


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## bunyip (6 January 2012)

Monario said:


> I see Frank Ainslie continually getting an ear bashing for his belief that if you go to an accredited and endorsed professional for these services, and the service you receive is sub standard and ends up causing you a loss of any kind you are entitled to compensation.




 On the contrary, we've clearly stated that both Storm and the banks should be held accountable for their actions, including have to pay compensation if any illegality can be proven by a court of law.


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## DocK (6 January 2012)

Julia said:


> I totally agree.  Should I deduce from your saying  "the overall LVR *should* have been made clear in the SOA and any subsequent review" that it wasn't so stated?
> Please don't answer if the questions seem intrusive, but I'd be interested to know if you received regular statements, including LVR from the margin lending provider?
> Nothing at all from Storm stating your overall position?
> 
> If not, did you ask for these?




Naturally regular statements were received from margin lender - quarterly I think, but I often checked my position via their website.

My point is indeed that the SOAs from Storm also only included the margin loan in their stated lvrs for pre and post advice positions.  Likewise, at regular reviews any mention of lvrs was of the margin loan lvr only.  No inclusion of the home loan debt was made by Storm in either the SOA or in discussions/reviews, to the best of my recollection and perusal of past SOAs at any rate.  I have made mention of the fact that I'm a bit of a control freak so I'm certainly not claiming that I was unaware of my overall position - but the point I'm trying to make is that I can certainly understand how some of Storm's ex-clients may have lost touch with the extent of their _total_ debt as any discussions of debt to asset ratios conveniently ignored the original home loan for the most part.  Whether this was a deliberate ploy by Storm or not will probably forever remain a point of speculation - unless an ex-staffer wishes to spill the beans????


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## Judd (6 January 2012)

DocK said:


> Naturally regular statements were received from margin lender - quarterly I think, but I often checked my position via their website.
> 
> My point is indeed that the SOAs from Storm also only included the margin loan in their stated lvrs for pre and post advice positions.  Likewise, at regular reviews any mention of lvrs was of the margin loan lvr only.  No inclusion of the home loan debt was made by Storm in either the SOA or in discussions/reviews, to the best of my recollection and perusal of past SOAs at any rate.  I have made mention of the fact that I'm a bit of a control freak so I'm certainly not claiming that I was unaware of my overall position - but the point I'm trying to make is that I can certainly understand how some of Storm's ex-clients may have lost touch with the extent of their _total_ debt as any discussions of debt to asset ratios conveniently ignored the original home loan for the most part.  Whether this was a deliberate ploy by Storm or not will probably forever remain a point of speculation - unless an ex-staffer wishes to spill the beans????




It was damned cunning, wasn't it DocK?  If you simply had a mortgage and that debt wasn't used for investment purposes, you wouldn't include it in any discussion about gearing into the sharemarket.  Overall debt levels maybe but not gearing.  So, from an EC viewpoint, why would I include it in the overall LVR?  A mortgage debt is for all intents and purposes irrelevant.

Bloody smart.  Have to give them credit for that way of [skewed] thinking in order to bamboozle the punters.


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## DocK (6 January 2012)

Judd said:


> It was damned cunning, wasn't it DocK?  If you simply had a mortgage and that debt wasn't used for investment purposes, you wouldn't include it in any discussion about gearing into the sharemarket.  Overall debt levels maybe but not gearing.  So, from an EC viewpoint, why would I include it in the overall LVR?  A mortgage debt is for all intents and purposes irrelevant.
> 
> Bloody smart.  Have to give them credit for that way of [skewed] thinking in order to bamboozle the punters.




Indeed....  There are many epithets placed in front of the name Cassimatis by my husband and I, but stoopid aint one of them.  I read early in the thread that his origins in the FP business were as a top salesman for a life ins outfit - a very good salesman he certainly was!


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## doobsy (6 January 2012)

DocK said:


> Indeed....  There are many epithets placed in front of the name Cassimatis by my husband and I, but stoopid aint one of them.  I read early in the thread that his origins in the FP business were as a top salesman for a life ins outfit - a very good salesman he certainly was!




Go back further Dock and I've been told by clients in Townsville the brothers Cassimatis as kids were known to steal nails out of the roofs of businesses around the place so they could melt down the lead.


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## Julia (6 January 2012)

Frank Ainslie said:


> Both lawyers and financial advisers are professionals. Why should people trust lawyers and not financial advisers? How many lawyers in their time have burnt their clients by giving them bad advice?



I've never had bad advice from a lawyer, but don't doubt that it happens.

Shall we have a look at this notion that if we consult any professional, we should absolutely be confident of accepting their advice without qualification or consideration.
A few hypotheticals:

*The Dentist*
You're 65, have looked after your teeth conscientiously all your life and feel pretty proud of the result.  You chomp down on a piece of pork cracking and chip a bit off a tooth.  You should know better, of course:  you've done this before and your then dentist repaired the damage for around $300.
This time, you decide to go to the dentist everyone is talking about, saying what a great dentist he is.  He examines the tooth.  Says that at your age just repairing it isn't nearly as useful as putting crowns on all your teeth.  You'll be thrilled with the result and it will be a great investment.
Now, you know that if you just get the tooth repaired and stay away from the crackling in future, you'll be quite fine, but hell, he's persuasive.  So you agree to multiple appointments and a bill for many thousands of dollars.

Your option:  to go back to the original dentist who did what you needed for $300.


*The Physiotherapist*
You have a low grade intermittent back ache.  It doesn't stop you doing anything, but when it was irritating you a few years back you had a couple of sessions with a physio who did some deep tissue massage and gave you regular exercises to follow.
You've been slack about the exercises so the ache has returned.

Off you go to the physio everyone is praising, saying he's got the most amazing equipment and can do all sorts of helpful things.

He examines you and tells you the problem is more serious than you could possibly have contemplated and it's vital you have four sessions a week for the next year at least with his XYZ machine.  This will cost you $300 per session, but at the end of a year, with a cost of a bit over $62,000, you'll be well set up for a few years at least* if you do some simple exercises on an ongoing basis.*

You choose the most sensible option.


*The Lawyer*
You have a problem with a neighbour's tree dumping branches, leaves, bark into your property.  The neighbour is unresponsive to your pleas to have the tree pruned.
You consult the lawyer.  He says the only option you have is to have him give instructions to a barrister who will take the case to Court in your capital city.
You live in a regional town and would have to travel to the capital city.
There would be the lawyer's fees and of course those of the barrister, plus your travel and accommodation costs.  No change out of around $10,000.

You ask if there is not some less expensive option.  No, he says.  This is what you have to do.

Option:  a little research would quickly show that there is a Tribunal which adjudicates in such matters.  The application form is easily downloaded and the fee $275.


I could go on, e.g. the doctor who advises that you need to have an amputation of your hand because you have a skin cancer on it, "just in case it turns nasty".

In all these above hypothetical situations, you have consulted properly qualified professionals.  None of them, however, have given you advice that served you as much as it serves themselves.  It's up to you to discern what is sensible and appropriate for your circumstances in almost all instances of consulting the so called professionals.  Just because god knows how many years ago they passed some exams does not confer upon them the perpetual moral compass you might like to imagine.


----------



## DocK (6 January 2012)

doobsy said:


> Go back further Dock and I've been told by clients in Townsville the brothers Cassimatis as kids were known to steal nails out of the roofs of businesses around the place so they could melt down the lead.




  Why am I not surprised???  Lining his own pocket at the expense of anyone who's dumb or unlucky enough to become fodder for his villianous schemes is clearly a well-honed skill, not to mention an ingrained personality trait perhaps?  How lucky for him to find his soul-mate in Jules...


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## Frank Ainslie (6 January 2012)

Bunyip and Julia,

I believe that many people on this forum are genuinely interested in finding out what really happened between Storm and the Banks, and why thousands (75% of whom were past retirement age) were left destitute. Thanks to some sensible posts lately, we are now some way towards achieving this end. 

You two cannot tell the Storm story because you were not involved and you are therefore only guessing at what happened most of the time. Both of you weren’t there so you have no idea what really went on. We were and we know what occurred based on our experiences when this all was happening. 

How clever you two are is not the issue at hand. The fact of the matter is that this isn’t about you and what YOU would do! This is about what WE did! Whether we acted foolishly or not is a matter of opinion. You both have expressed your views _ad nauseum_ so we are well aware where you stand. Indeed, some may agree with. Quite frankly, I couldn’t give a rat’s, and I doubt that anyone else does either. Your personal opinion about the people that invested using Storm is irrelevant to the topic in hand. Therefore, your continual efforts to promote your _“I would never fall for such a scheme”_ line is somewhat meaningless now to this discussion. 

The rest of us have moved on! I think it's time you two caught up.


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## Garpal Gumnut (6 January 2012)

Frank Ainslie said:


> Bunyip and Julia,
> The fact of the matter is that this isn’t about you and what YOU would do! This is about what WE did! Whether we acted foolishly or not is a matter of opinion. You both have expressed your views .




Frank,

I cannot speak for other ASF members, or for ASF, but the posts above are not about Storm exclusively.

Your site and sicag are about Storm. This is an ASF forum thread about Storm, no more, no less, and Julia and Bunyip are entitled to their opinions.

gg


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## Julia (7 January 2012)

Frank Ainslie said:


> You two cannot tell the Storm story because you were not involved and you are therefore only guessing at what happened most of the time. Both of you weren’t there so you have no idea what really went on



I agree absolutely.  Hence I have never attempted to 'tell the Storm story'.  I have asked some questions out of interest and been grateful to those, e.g. DocK, Mindstorm et al, who were good enough to answer.

What I have done in my earlier post is to address your *general assertion* that anyone consulting any *professional* can reasonably, and without qualification, accept any such advice as that person may give, without the need to consider if that advice constitutes:

1.  an appropriate solution to the problem

2.  a cost-effective solution


----------



## Frank Ainslie (7 January 2012)

Garpal Gumnut said:


> Frank,
> 
> I cannot speak for other ASF members, or for ASF, but the posts above are not about Storm exclusively.
> 
> ...




Hi GG,

I thought I was echoing your sentiments?

_“The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf. 

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.”_

I agree that Bunyip and Julia are entitled to have their points of view, but do we all have to hear the same thing over and over? And is it acceptable for one person, namely Bunyip, to call others on this forum such things as _‘stupid’, ‘gullible’ and ‘incompetent’ _when their own level of mentality is in serious doubt? Julia described it well when she called it vitriol.

There are some such as 'Monario' that don’t post here because they know that whatever they say will be met with derision by a small minority. Bunyip is the worst offender! I’m all for free speech, but if the standard for any debate is lowered to suit the few polemistists on this forum, you will keep those that would like to participate from doing just that. I don’t mind abiding by the forum rules as long as others do so as well. Calling others names or abusing them because they don't agree with you is not acceptable in anyone's language. Bunyip has been using this type of language for some time now. I can certainly respond in kind because I too can think of a few choice words. However, I am more interested in debating the issues rather than deflecting remarks that are designed to be offensive.

One thing is for sure! I don’t want to listen to the same old hackneyed comments and over again about the same thing. I don't think anyone does! It doesn’t bother me whether the few agree with me or not. It seems to bother them though because they consistently persist in _"pushing their barrow!"_. Can someone smash the record because it’s stuck in a groove at the moment! It doesn't bother them because they are deaf. On the other hand, we getting weary of the din.

I agree wholeheartedly that having a debate with some people is akin to a conversation with the deaf.  My mother was deaf but at least she could lip read. 

A bit of decorum on this forum might help! It would certainly go along way towards sensible discussion rather than our being consistently bombarded with invective.


----------



## Julia (7 January 2012)

Frank Ainslie said:


> Julia described it well when she called it vitriol.



When I used that description it was with reference to your own comments, especially in the context of rape.



> However, I am more interested in debating the issues rather than deflecting remarks that are designed to be offensive.



Are you?  What I see is the repetitive mantra, uttered over and over, that anyone consulting any professional should be able to accept advice offered without questioning the validity of that advice.

This is a forum, Frank.  A place where ideas about investment are shared and discussed.  You have chosen to post in this environment so you need to understand that by so doing people who disagree with some of your remarks are going to express that disagreement.

I don't think you're stupid at all.  I don't know why you got sucked in with Storm.  As I've said already, despite pages and pages of 'explanation' from you, I'm no closer to understanding how or why you became engaged in something so unnecessarily complex and risky.  However, I don't need to understand.  You do, though, and my genuine fear is that unless you can work out why you were persuaded to go with Storm, you're at risk of something similar happening again.


----------



## Harleyquin (7 January 2012)

Have just read post #6642 Monario and agree with everything you've said.

The problem is if you get dodgy service from anyone offering their services you're entitled to complain ... Unless it's a financial advisory 'service' ... Then it's your fault!  If you complain about dodgy financial service you're the worst in the world.  According to some of our regulars on this thread.

I'm still waiting for any of those regular posters to give me some concrete evidence to convince me that it was our fault.  Up until now they are only throwing lots of accusations in our direction, they mean nothing, until you can give us a genuine explanation for those accusations.

Some of you are hounding Frank and yet I find all of his posts to be some of the only ones with any real substance.  Well done Frank.


----------



## Harleyquin (7 January 2012)

Hi Julia you've just accused Frank of "repetitive mantra" and yet you are also guilty of repeating yourself on more than one occasion on this thread.  I'm also guilty in this department.

You say that "this is a forum where ideas about investment are shared and discussed".  True it is, however there are numerous threads on ASF, devoted entirely to investment advice, strategy etc.  This thread, is I presume, dealing with all aspects of Storm Financial, not just the investment aspects.  

As you've said on several occasions, you hadn't even heard of Storm Financial before it collapsed.  Therefore you can only approach this discussion post Storm and from a financially astute perspective.

Stormies only knew Storm before it collapsed and generally speaking from a non financial background.  This gives you the advantage of hindsight which is something we don't have the privilege of.  You also understand how storm operated, we didn't, we've only found this out since storm's collapse.

Your background gives you the privilege of knowing what questions to ask and also understanding the answers given.  Generally this doesn't apply to Stormies.

Julia think of something that doesn't interest you or your no good at...that's how I feel when it comes to financial matters.  I'm one of those people whose eyes glaze over.  My husband on the other hand is interested in shares and has taken an interest in the ASX site as well as the investment discussions on ASF.

In hindsight, I wish I had found ASF pre Storm and we wouldn't be in our present state.  I've learnt an awful lot post storm.


----------



## Ijustnewit (7 January 2012)

Frank, You are to be admired for coming to a public forum and putting your heart and sole online as such. You use your real name for all to see and tell your experiences for all to read . I think that perhaps that a few on here have more of an issue with your former wealth rather than your losses with Storm. Tall poppy syndrome ? Perhaps those posters are really Neville Nobodys ? that are jealous of your former riches , things they could only dream of achieving. It's easy to sit back and be smart in the cyber world but much harder to make a go of it in the real world. All the best ,as I put on my flak jacket and await the incoming shrapnel.


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## jez47 (7 January 2012)

_There are some such as 'Monario' that don’t post here because they know that whatever they say will be met with derision by a small minority.
_
How true Mr Ainslie !!
Jez47


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## Harleyquin (7 January 2012)

Good post IJUSTKNEWIT.  Frank has the courage of his convictions and a talent for writing that the rest of us can only dream off.

As a Stormie, I read Frank's posts and he is able to say exactly what most of us are thinking, I certainly can't speak for all Stormies, as has been mentioned before "we're a diverse lot".  

One thing we possibly all have in common is the inability to trust our banking system in this country and for good reason.  Piggy Banks is certainly a good description.  

It's taught some of us something else too, live for today and let tomorrow take care of itself.  Financial or forward Planning...forget it.  It's no longer worth the risk.


----------



## Julia (7 January 2012)

DocK said:


> Why am I not surprised???  Lining his own pocket at the expense of anyone who's dumb or unlucky enough to become fodder for his villianous schemes is clearly a well-honed skill, not to mention an ingrained personality trait perhaps?  How lucky for him to find his soul-mate in Jules...



DocK, if by great good luck he goes to jail, it will take him about a minute and a half to get a scam going in there.  People of his perceived 'class' enjoy a much elevated status in jail and he will have the common burglars et al eating out of his hand.



Harleyquin said:


> The problem is if you get dodgy service from anyone offering their services you're entitled to complain ... Unless it's a financial advisory 'service' .



Don't be silly, HQ.  You have complained loud and long and your complaints have brought about the enquiry into Storm and into the industry in general.



> Some of you are hounding Frank and yet I find all of his posts to be some of the only ones with any real substance.



 Of course you do.  They say what you want to hear.  Look up confirmation bias some time.



Harleyquin said:


> Hi Julia you've just accused Frank of "repetitive mantra" and yet you are also guilty of repeating yourself on more than one occasion on this thread.  I'm also guilty in this department.



And so on we will go.  As long as Frank continues his copy and past of "we should have been able to trust the advice of professionals", and fails to acknowledge any need for assessing that advice in terms of risk and cost effectiveness, he will continue to provoke the same negative response.

Other Storm investors have been good enough to offer a clear, objective account of how they became involved with Storm and the reasons for how they assessed the risk.  These posters have received appreciation for their candour and good wishes for the outcome.




> You say that "this is a forum where ideas about investment are shared and discussed".  True it is, however there are numerous threads on ASF, devoted entirely to investment advice, strategy etc.  This thread, is I presume, dealing with all aspects of Storm Financial, not just the investment aspects.



Um, HQ, if you are not talking about the 'investment aspects' of Storm, there's really nothing to say, is there?   Wasn't the whole point investing?



> As you've said on several occasions, you hadn't even heard of Storm Financial before it collapsed.  Therefore you can only approach this discussion post Storm and from a financially astute perspective.



Here you go again about my being 'financially astute'.  I am no more financially astute than the average person who has taken the time to do a bit of reading and ask a few questions.   I have no training in financial matters.
So please stop suggesting I have some sort of special talents when it comes to risk assessment and capital preservation.
There is absolutely nothing stopping you achieving the same level of understanding, unexceptional as it is, except your own mindset.



> Stormies only knew Storm before it collapsed and generally speaking from a non financial background.  This gives you the advantage of hindsight which is something we don't have the privilege of.  You also understand how storm operated, we didn't, we've only found this out since storm's collapse.



Nonsense.  I've only this last week learned about how the LVR was presented, i.e. omitting the home loan.  I have never ever come across anything like the Storm strategy with all its intricate manoeuvres designed to make the Storm principals wealthy.  So ignorant of such strategies am I, that initially I just couldn't believe anyone would be suggesting that retirees should mortgage their home and then further gear into the market.

And if you didn't understand how the whole plan worked, why didn't you ask until you did understand?



> Julia think of something that doesn't interest you or your no good at...that's how I feel when it comes to financial matters.  I'm one of those people whose eyes glaze over.



I have no natural interest in financial stuff at all.  I have to force myself to do the reading I do.  It gives me no pleasure.  But I have a strong interest in protecting the asset base I've worked so hard to achieve, so I do what I have to.

I might not like exercising in all weathers either, but because I want to look after my health, I make myself do it.  Same thing.




Harleyquin said:


> It's taught some of us something else too, live for today and let tomorrow take care of itself.  Financial or forward Planning...forget it.  It's no longer worth the risk.



HQ, I'm sure you're a nice and decent person so I won't point out all that's wrong with the above.   Just consider that most people who plan carefully and take advice from people who offer sensible guidance do not share your sentiments, and achieve the results they need to.


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## Solly (8 January 2012)

jez47 said:


> _There are some such as 'Monario' that don’t post here because they know that whatever they say will be met with derision by a small minority.
> _
> How true Mr Ainslie !!
> Jez47




Jez47, 

Going by the number of daily views of this tread I believe that there are many other ex-clients and other notable 'high value' participants of this saga, who read these posts. 

It would be of great benefit if others would post their views and experiences to add some diversity to this thread.

I personally know of one ex-client who is an avid reader of this forum but is not confident in posting anything about their involvement in the Storm event, as they fear that they don't possess the appropriate written skills and are concerned about ridicule.

I hope that they do change their minds about posting, after all, thanks to Joe, this is just a public forum where we have been given the opportunity to express our views. It shouldn't be a place were there is perceived bullying or feeling of being threatened. As long as there are no defamatory statements or libelous behaviours which injure the reputation of the individual, hopefully there can be some new fruitful debates and discussions on this Storm topic.

So, if there are any readers out there who have been considering posting and adding opinion please do, I am positive your views will be most welcome.

S


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## jez47 (8 January 2012)

_


bunyip said:



			you cannot justify the stupidity, gullibility and incompetence you displayed in your dealings with Storm.
		
Click to expand...


_

Solly,
Like every Stormie my story is unique to my life experiences.  I do not believe that all Stormies can be lumped together when it comes to why we were conned by Storm. It would take too long, require baring of soul and other 'secrets' and risk derision.
I will go back to being observer only.
Thanks
Jez47


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## DocK (8 January 2012)

jez47 said:


> _
> _
> 
> Solly,
> ...




I hear you jez47 - sadly, I too suspect that there are many potential posters who could add interest, perspective and worthwhile content to the thread who observe only, due to a disinclination to have to fend off comments such as the one you quoted.  If we could move past the whole "justification debate", and all mind our manners, the thread might make for more interesting reading imo.


----------



## Judd (8 January 2012)

Harleyquin said:


> .... One thing we possibly all have in common is the inability to trust our banking system in this country and for good reason.  Piggy Banks is certainly a good description.




Hmm, Piggy Bank.  Interesting term but as the major banks' after tax return on assets to June 2011 was 0.9% (yep, that is no typo) then the term Piggy Bank doesn't quite fit.  It could (just) if you looked at the return on equity (14%), ie the amount of funds the banks' shareholders (such as _moi_ and a few others) have at risk.

http://www.apra.gov.au/adi/Publications/Pages/adi-quarterly-performance-statistics.aspx

The very strange thing is that none of this utter shambles would have worked without you, Harlyquin, and Frank, and Monario and all the others.  You were essential.  Why it worked is very difficult for me to understand.  The great man himself said that 75% of those who attended a seminar walked away; sadly the rest did not.  And given that the blurb (if true) on the web-site indicated that 70% to 80% of clients were by word-of-mouth referrals....

Hopefully, the parties involved will come to a solution via the mediation process as suggested by the Court (I think that is what was suggested but I stand to be corrected.)  It has gone on way too long for former Storm clients and I would hazard a guess that some are very close to complete collapse.  That is not good.


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## Julia (8 January 2012)

DocK said:


> I hear you jez47 - sadly, I too suspect that there are many potential posters who could add interest, perspective and worthwhile content to the thread who observe only, due to a disinclination to have to fend off comments such as the one you quoted.



Probably right.  But I think you might agree, DocK, that no derision has been directed toward you or others who have been good enough to share their situation honestly, including the regret for ever having become involved.  You've also acknowledged the risk you took and the reason why.

Those of us who are onlookers are frequently accused of not understanding how it all happened.  True enough.  But we cannot understand until people explain the details.
e.g. until Doobsy described how the whole 'strategy' was supposed to work about a week ago, including the borrowing to pay interest in advance etc, and then you explained about how the LVR was never referred to with the inclusion of the home loan debt, I had no idea of both these aspects.

The more information any of you provide, the more it's possible for the rest of us to perceive the massive snow job Storm did with incredibly intricate manoeuvres that probably appeared to the naive investor to be clever rather than necessarily risky.


----------



## DocK (8 January 2012)

Julia said:


> Probably right.  But I think you might agree, DocK, that no derision has been directed toward you or others who have been good enough to share their situation honestly, including the regret for ever having become involved.  You've also acknowledged the risk you took and the reason why.
> 
> Those of us who are onlookers are frequently accused of not understanding how it all happened.  True enough.  But we cannot understand until people explain the details.
> e.g. until Doobsy described how the whole 'strategy' was supposed to work about a week ago, including the borrowing to pay interest in advance etc, and then you explained about how the LVR was never referred to with the inclusion of the home loan debt, I had no idea of both these aspects.
> ...




I'm struggling to reply in a way that won't offend the majority of posters on this thread, but fear I will do so anyway.  Here goes.

My point is that I suspect many have not posted because they do not wish to have to respond to the inevitable questions  of "why did you/what were your motives/did you not think you had enough already/were you just greedy/why would you risk your home/what did you think would happen to your loan?" etc, etc.  I'm not saying posters do not have the right to ask those questions, and I can understand why some find it difficult or impossible to understand what motivated ex-storm clients - I'm just saying that from an ex-storm client's perspective the spectre of running the gauntlet of such posts would be enough to deter a lot from posting in the first place.  I don't think any ex-storm client should have to explain themself or show regret  in order to avoid derision.  It's simply unnecessary; surely it's obvious to most by now that the majority of ex-storm clients feel beaten down enough already without having to withstand an inquisition if they stick their head up on an internet forum? 

I'm going to make myself unpopular with just about everyone by declaring myself an absolute fence-sitter on this thread.  It often appears to be a thread consisting of _ex-stormies_ and _others_ - and although I'm an ex-stormie I can see merit in the posts from both sides most often.  I think when I invested with Storm I was definitely less financially astute than most of the _others_, but maybe a bit more financially aware than some of the _ex-stormies_.  I can see why some of the _others_ find themselves unable to understand mortgaging one's home, but can also undertand why the _ex-stormies _did just that.  I can certainly understand why the _ex-stormies_ feel the banks have a case to answer, but can also understand why some _others_ just can't understand the reasoning behind our bitterness towards our bankers.  

Although I personally am happy to acknowledge that I was a bit of a twit, I can also understand why some ex-stormies are sticking to their guns and still endorse the model.  No doubt we both think the other is mad, but I'm happy to respect anyone's right to their opinion no matter how dumb I might think it is.  That doesn't mean a good healthy debate can't be had on this thread - and that's what I'd love to see happen, if it could take place without the aggro.   I know for a fact that there is plenty I could learn from a lot of the posters on ASF, but I'm unlikely to do so if the discussion can't move past the "motivation issue" that keeps being regurgitated.  I suspect this is why some haven't posted - especially if they anticipate that any disagreement is likely to be met with a scathing rebuke or a personal attack or a request to justify their motivation in joining Storm in the first place.

I do find some posts from both "sides" to be extreme at times, and often find myself bemused by posts from both ex-stormies and not, but maybe I'm able to understand the mindset and sympathise with even the ex-stormies I often disagree with because of our shared experience.  

I guess what I'm trying to say in a longwinded way is "could we try to keep it nice, people?" Reading this thread is a bit like having a ringside seat at a prizefight when Frank and Bunyip go at each other, and while it is no doubt entertaining for some and distressing for others, it seems destined to continue for round after round with neither willing to concede.


----------



## Judd (8 January 2012)

DocK.

Nice.  :1luvu:


----------



## Frank Ainslie (8 January 2012)

Ijustnewit said:


> Frank, You are to be admired for coming to a public forum and putting your heart and sole online as such. You use your real name for all to see and tell your experiences for all to read . I think that perhaps that a few on here have more of an issue with your former wealth rather than your losses with Storm. Tall poppy syndrome ? Perhaps those posters are really Neville Nobodys ? that are jealous of your former riches , things they could only dream of achieving. It's easy to sit back and be smart in the cyber world but much harder to make a go of it in the real world. All the best ,as I put on my flak jacket and await the incoming shrapnel.




Thanks IJUSTKNEWIT,

I have never had any qualms about giving my real name because I have nothing to hide. Anything I say about myself on this forum can be verified by going to my web sites. My story is there for all to see. This places me at somewhat of a disadvantage because I have to take what others tell me at face value because few use their real names on this forum. That's their choice and I have no beef with that! It does mean though that some people can say almost anything and there is no way to check that what they say is true. It also means that they can change their story or spice it up to support their argument. “Never!” Some might say.

Let’s take the following for instance. Julia in her posting 2483 on 20th July 2009 stated, _"Quite understand how you feel. Some years ago I was "done" by a crooked solicitor. Lost quite a lot of money."_

Yet in her recent posting 6430 she states _"I've never had bad advice from a lawyer, but don't doubt that it happens."_ I'm 70 so I have an excuse for having the occasional memory lapse! I presume that she is somewhat younger. Furthermore, it’s hardly something one would forget easily? I’m not calling her a liar at this stage but it’s somewhat odd, don’t you think? 

She and others have been at pains to point out our faults. Perhaps it’s time they admitted they are not perfect either. We do not live in a world where everything is black and white. The grey in between is a point where most of us operate. I think if they take a good long look at themselves, they will find that they also occupy the same space in the same place.

As for the shrapnel, I’ve just tossed a hand grenade. Let’s see just where it lands!

The expression _"How dare you!"_ is my bet!


----------



## Julia (8 January 2012)

Frank Ainslie said:


> Let’s take the following for instance. Julia in her posting 2483 on 20th July 2009 stated, _"Quite understand how you feel. Some years ago I was "done" by a crooked solicitor. Lost quite a lot of money."_
> 
> Yet in her recent posting 6430 she states _"I've never had bad advice from a lawyer, but don't doubt that it happens."_ I'm 70 so I have an excuse for having the occasional memory lapse! I presume that she is somewhat younger. Furthermore, it’s hardly something one would forget easily? I’m not calling her a liar at this stage but it’s somewhat odd, don’t you think?



Unlike you, I feel no need to be defensive.  I'm somewhat amazed that you would go trawling through my posts in search of an anomaly, apparently all the way back to July 2009 (!)  but if you can be bothered, then it's fine with me.

I did not seek legal advice from the lawyer referred to in my post where I said I was "done".  He, in conjunction with a registered valuer, was running a private mortgage scheme.  It had nothing to do with his legal practice.

They produced all the documentation supporting each project, including registered valuation of the properties concerned.  The LVR was low.

As it eventually turned out, the valuation was grossly inflated.

Worrels were appointed receivers, and their fees ensured that any residual value from the properties was absorbed, virtually nothing being paid out to investors.

It eventually turned out that they'd been operating somewhat of a ponzi scheme which inevitably fell in a heap.   The lawyer and the valuer were eventually prosecuted and deregistered plus some other penalty which I cannot now remember, given it's nearly 20 years ago.

The money I put into it was spare cash, absolutely not putting at risk my home or other investments.  Yes, I was still annoyed about it because I don't like losing money.  I did not, as a result, decide all lawyers and all valuers were shonks.

I was quite happy to share this experience and still am, so I thank you, Frank, for reinforcing my point that there are amoral people everywhere.

On the legal advice aspect, I've had little occasion to consult lawyers for their opinions but when I have, I've met with courtesy and competence.  I'd like to think this is typical of the profession, but I don't know.



> She and others have been at pains to point out our faults. Perhaps it’s time they admitted they are not perfect either.



Oh for heaven's sake, where have I ever suggested I'm anything approaching perfect???  I have repeatedly negated Harleyquin's insistence that I'm some sort of magically asute financial wizard.

You keep criticising people for offending you, but you make personal attacks on people such as you just have on me.  For what reason?  A while ago you insisted I was offering financial advice to Harleyquin, something I have absolutely never done, nor to anyone else.

I have never called you stupid or greedy.  I do find your postings somewhat disingenuous in that you say one thing but your behaviour indicates something totally different.

That, however, is your right.   I suggest your credibility would be enhanced if you cease making personal attacks.




> As for the shrapnel, I’ve just tossed a hand grenade. Let’s see just where it lands!
> 
> The expression _"How dare you!"_ is my bet!



Sorry to disappoint you.  I've been polite enough to respond to your post.
If you're unhappy with this response, by all means feel free to express this if you feel the forum will tolerate it.

DocK:  you certainly haven't offended me with your quite lengthy post.  It shows an enviable level of objectivity.

Given Frank's clear determination to continue with the personal attacks, however, I'm not optimistic for your scenario of everyone keeping it 'nice', much as I'm in favour of the idea.


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## Julia (8 January 2012)

Just a thought, and I won't be surprised if no one responds:

I wonder how many Storm investors, religiously posting in this thread, or for that matter those reading it and not posting, have spent any time perusing the rest of the forum with its huge amount of investment wisdom?

Might be a more productive use of time than trying to find continued fodder to have a go at someone.


----------



## Frank Ainslie (9 January 2012)

Julia said:


> Just a thought, and I won't be surprised if no one responds:
> 
> I wonder how many Storm investors, religiously posting in this thread, or for that matter those reading it and not posting, have spent any time perusing the rest of the forum with its huge amount of investment wisdom?
> 
> Might be a more productive use of time than trying to find continued fodder to have a go at someone.




Julia,

The only decent investment advice offered on this forum in my time has been given by Doobsy! I lend store by what he says because he obviously knows what he is talking about and has demonstrated such. He has also come to grips with the issues relating to Storm because he has experience of the industry and understands how it works. The rest of you may have some financial nous but you are no experts. 

As for trawling through past posts to find some dirt on you, actually I did not! This particular item was brought to my attention off forum by a member of this forum! Something about _“people in glass houses”_ I believe! That person thought you were being hypocritical. No matter!

The question still remains, _"Did you write this or not?"_ If so, why shouldn't we ask for an explanation? After all, how many times have you and Bunyip asked us to explain ourselves?  It therefore seems reasonable to me that you would be willing to explain an apparent contradiction in your thinking back in 2009 as opposed to now! I don't quite understand the explanation you have offered. What's that you are always saying? That's right! _"Your explanation makes no sense at all!"_ You either said it or you didn't!

Julia, Believe me, I understand fully how you feel when people take you out of context, deliberately misunderstanding your intentions, misquoting you and questioning your motives! Shame! But then, you see, I have been subjected to this for some time now. Let's be quite honest! You and others have been preaching to us from the start. You are obviously on another level whereas we are just mere mortals.

I’ve been thinking seriously lately of asking the members of my SOB forum to become members of this forum also with the sole intention of calling  you 'a liar' and Bunyip 'greedy' every time you both post anything to give you a taste of how we feel every time we are called 'greedy' or 'foolish' by the both of you. It wouldn't get us anywhere, of course, but we could at least get the same satisfaction out of the exercise that you and Bunyip seem to enjoy.  

It’s time you understood that you are not the only one that has feelings on this forum although you seem to think you have a monopoly on such. Many of the elderly that invested in Storm have lost everything, even hope. Therefore, the last thing they want is someone pontificating to them or belittling them because they had the misfortune to place their trust in crooks.  That’s probably why many don’t post on this forum. That has to change!

To those Stormies out there that have been reluctant to post on this forum for fear of ridicule, I say to you, _“Get stuck into these bullies!”_ Rather than turn the other cheek, bend over and give them the full monty! Don’t let their perverted outlooks deter you from saying what you have to say. We outnumber them anyway! It’s time we made our numbers count! 

Hiding in the shadows is for people that have done something wrong! You have not! Others have! If some on this forum want to belittle you, answer them in kind. You won't be alone. We'll give them a blast as well. It's the only language they seem to understand!


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## Solly (9 January 2012)

*Opt Out notices*

Re: Sherwood & Mcardle Storm class action and
Tracey Richards (Levitt Robinson) – MBL class action

On 14 December 2011 the Federal Court approved Opt Out Notices ("the Notices") being issued in the Sherwood proceeding and the Richards proceeding.

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Opt out notices?opendocument


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## Julia (9 January 2012)

Frank Ainslie said:


> The only decent investment advice offered on this forum in my time has been given by Doobsy!



Not to diminish Doobsy's contribution, the forum consists of hundreds, probably now thousands of threads on investment and trading, and contains contributions from people who have true expertise.  

A couple of interesting examples right now are a discussion of why the All Ords went nowhere for 7 years, and the value or otherwise of short selling.



> The question still remains, _"Did you write this or not?"_ If so, why shouldn't we ask for an explanation?



Did I write what?
If you are referring to my remarks about the falsified investment scheme 20 some years ago, yes of course I made that post.  Have I said I didn't?  I have even been polite enough to describe again what happened so that those who want to know (probably very few) do not have to trawl back to the original post.

I have further commented on my minimal experience of consulting lawyers when I've needed legal advice, this having been perfectly fine.

Fire away with all the insults you like.  It doesn't upset me.  If it makes you feel good about yourself, go for it.
Just don't expect me to continue to be tolerant enough to respond to manufactured accusations.  

And for anyone who is also under the mistaken impression that this forum is just about Storm, I hope you'll take the time to read some of the other very interesting threads available.  One of our members, Sir Osisfliver,  a financial planner as it happens, has prepared an excellent thread for people with minimal understanding of investing and markets in the "Beginners' Lounge".  Tech/A has a similarly excellent thread introducing technical analysis.  Plus many threads on the global financial worries, something we all need to be very aware of right now.


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## doobsy (10 January 2012)

Maybe I approach this thread differently but I see it as:


A discussion point about how the storm model worked
An education process so that other "spruikers" don't rip off the next generation
A chance to get feedback from ex clients explaining what value they saw and why they felt it was a good idea.

Now that last one causes the most trouble. For the forum to understand Storm we need feedback from clients. We need to know more about what they went through from the first seminar to the final sign off of the SOA to the phone calls as markets crashed.

This feedback should not then automatically be ridiculed as people being silly. I keep saying Storm had the slickest sales pitch out there and I want others to know more so they can avoid the next version of Storm. No matter how the hearings proceed and what blame is laid, to me Storm and EC still account for 90% of the damage done.

I encourage the ex clients to be honest with the forum - what, why, how. What personal / emotional buttons were pushed to make it ok to accept the advice. Was it the thought of missing out? The peer pressure? These are the things the forum needs to know to better understand.

I am over the who's fault is it. I think all parties must accept some responsibility, Storm and the Banks clearly the bulk of it. I hope our system reimburses those who deserve it and explains to those who don't why they don't deserve it. I personally don't want to see a situation where risk is no longer respected because the Govt just steps in and reimburses those who make enough noise. I am sure that if I spill coffee on myself I can probably find a lawyer that can find 'some' legal precedent that will allow me to sue myself if I want to.

I enjoy this forum and all of it's participants and hope that we continue to flesh out the saga as it continues.


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## bunyip (10 January 2012)

Today, January 10th, is the first anniversary of the flash flooding that devastated parts of southern Queensland this time last year.
As a resident of an area that was right in the thick of it, I was an eye witness to the horrors that unfolded as homes and business were destroyed and lives were lost.

Three teenagers lost both their parents as the flood tore apart their home. The surviving son, big brother to his two younger sisters, was burnt to death in a house fire last year. Many families lost one or two members, their homes and all their possessions, and then had their insurance companies refuse to pay up due to some stupid technicality about what constitutes a flood and what doesn’t. 
I could give you many heart-rending stories of what I saw – suffice to say that it was traumatic for those affected, and many people remain traumatized a year later.

You Stormers have had a tough time, no question about it. You’re more than justified in feeling that life has dealt you a rough hand.
But on this day I ask you to spare a thought for the flood victims who’ve lost even more than you. Not only have they lost money like you have, but many lost their entire businesses and livelihoods, their homes and possessions, their pets, their cars, and worst of all, friends and family. 
Some families have not even been able to give their loved ones a decent burial - the bodies have never been found.

Sometimes we need to take a step back from our troubles and realize that there are people worse off than ourselves.


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## DocK (10 January 2012)

bunyip said:


> Today, January 10th, is the first anniversary of the flash flooding that devastated parts of southern Queensland this time last year.
> As a resident of an area that was right in the thick of it, I was an eye witness to the horrors that unfolded as homes and business were destroyed and lives were lost.
> 
> Three teenagers lost both their parents as the flood tore apart their home. The surviving son, big brother to his two younger sisters, was burnt to death in a house fire last year. Many families lost one or two members, their homes and all their possessions, and then had their insurance companies refuse to pay up due to some stupid technicality about what constitutes a flood and what doesn’t.
> ...




Agree absolutely.  I was watching a tv show on channel 9 a couple of nights ago with the family and commented to my husband that we still had so much to be grateful for, and that we should count our blessings that we're so much luckier/better off than some.  There's certainly more to life than money.


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## Julia (10 January 2012)

bunyip said:


> Today, January 10th, is the first anniversary of the flash flooding that devastated parts of southern Queensland this time last year.
> As a resident of an area that was right in the thick of it, I was an eye witness to the horrors that unfolded as homes and business were destroyed and lives were lost.
> 
> Three teenagers lost both their parents as the flood tore apart their home. The surviving son, big brother to his two younger sisters, was burnt to death in a house fire last year. Many families lost one or two members, their homes and all their possessions, and then had their insurance companies refuse to pay up due to some stupid technicality about what constitutes a flood and what doesn’t.
> ...




+1.   And their situation is not being helped by the fact that the government is apparently still sitting on some millions  of the donated relief funds.
http://news.theage.com.au/breaking-...ctims-desperate-for-funds-20110505-1e8w8.html


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## SJG1974 (10 January 2012)

Happy new year to all...have just returned from a break and ready to get stuck into the New Year.

In looking back, I noted that Frank mentioned that borrowing against his home was high risk, and totally unnecessary.  I am pretty sure this is the type of thing that people like me have been angling at all along!!!



Frank Ainslie said:


> Further, I believe that in many cases borrowing against people’s houses was totally unnecessary and was merely a device to inflate Storm's bottom line.
> In our particular case, our borrowing against the house with the assets we already had in cash was totally unnecessary and of no benefit to us whatsoever even if the markets had not been subject to a GFC. Every time we borrowed, Storm lined its pockets. Everything it did therefore was to achieve this end.




Personally, this is the type of thing that I have been challenging Frank on from the beginning….why would he do something that was completely unnecessary, just because a licenced adviser said it was a good strategy?  If Frank thought that taking such a risk was unnecessary and of no benefit, then why do it???

I understand that Storm may have glossed over the entire LVR in the SoA, by ignoring the debt against the home, but again, clients would have known they had the loan, they signed the paperwork! Its your money Ralph, as the old saying goes….

As I pointed out in an earlier post, the double gearing brought forward the negative equity situation for clients…the absence of a margin call only enhanced the problem…



SJG1974 said:


> We have a scenario where:
> 
> Client borrows $400K against house
> Combined with $600K of own investments, to make $1m
> ...




So to use Frank’s words, not only was borrowing against his home totally unnecessary and of no benefit, what it did in fact do was escalate the problem to a high degree, and I am guessing that clients didn’t even realise they were in negative equity that early in the piece; only thinking they were when the margin calls failed to materialise and their margin loan portfolios slipped further and further.  They were screwed well and truly before that happened.

I agree with doobsy on the value I personally get out of this forum…



doobsy said:


> Maybe I approach this thread differently but I see it as:
> 
> 
> A discussion point about how the storm model worked
> ...




I would add that for me, the psychology of investing is quite fascinating…why do people take risks with things they don’t understand, why don’t people take the time to understand the risks they take, why do people take risks when they don’t need to, and how do they react when things ultimately go wrong?  And on top of these, how do the spruikers, the conmen if you like, sell the dream to these investors and justify the fees they charge?  All of these questions and their answers are things that I like to read about and have found this forum helpful in providing an insight.  However, there are still many answers to come I hope.



bunyip said:


> Today, January 10th, is the first anniversary of the flash flooding that devastated parts of southern Queensland this time last year.
> As a resident of an area that was right in the thick of it, I was an eye witness to the horrors that unfolded as homes and business were destroyed and lives were lost.
> 
> Three teenagers lost both their parents as the flood tore apart their home. The surviving son, big brother to his two younger sisters, was burnt to death in a house fire last year. Many families lost one or two members, their homes and all their possessions, and then had their insurance companies refuse to pay up due to some stupid technicality about what constitutes a flood and what doesn’t.
> ...




Good call again bunyip.


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## Harleyquin (12 January 2012)

Judd nobody need worry about their bank shares not performing well.  Our banking system is strong and I'm sure it will stay that way.  Billions in profit pa from several banks in this country speaks for itself.

As a stormy all I'm basically saying is "why did they provide storm will the funds if storms advice was so outrageous?"

We've heard all the childish remarks such as "Duh because they can. OR Duh cause that's what they do". No one on this forum has been able to explain why and that's because the banks involved have serious questions to answer.
:car::bananasmi

We all make mistakes, it's human nature, and the banks are run by human beings, hopefully, even if they were run by computer, these break down from time to time!
They made a serious mistake here and caused untold grief in the process.

All they need to do is acknowledge their past mistakes. Pay the price and move on, instead of this on-going saga.


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## doobsy (12 January 2012)

Harleyquin said:


> As a stormy all I'm basically saying is "why did they provide storm will the funds if storms advice was so outrageous?"
> 
> We've heard all the childish remarks such as "Duh because they can. OR Duh cause that's what they do". No one on this forum has been able to explain why and that's because the banks involved have serious questions to answer.
> 
> All they need to do is acknowledge their past mistakes. Pay the price and move on, instead of this on-going saga.




HQ - got to jump in here. Storm's advice was bad, it was high risk, but it was not illegal. It is not the bank's job to tell clients not to take the advice offered by Storm. 

Any illegal lending for whatever reason whether it be incorrect assessment, inflated house price, fudged up income will need to be addressed. Retirees, low income earners etc should expect to get something back.

But I still stand by my argument that (for example) a miner on $150K pa who could afford the loan repayments on what was borrowed and still can should not receive anything back. There was no illegal or immoral lending in that case. In that situation, the client borrowed money the same as any other non storm person, the banks have not broken any rules on their lending criteria, and the clients lost money due to strategy not improper lending practices. Let that client pay back the loan like they should, not be bailed out just because it was Storm.

In all seriousness - banks provide 2 services - they take and hold deposits and offer a return on that money and they lend. Lending is how they make their money. If someone meets their criteria to lend to they have done nothing wrong. 

I would love to know the figures on how many of the 3-4000 stormified clients were still employed, earning incomes that could support the base loans taken out. These clients took on risk by borrowing against their homes.

Without opening the whole "i didn't get my margin call" thing again, if the margin loan process had worked then NO client in my opinion should have been denied a margin loan considering that there has NEVER been a requirement to service the interest on margin loans. ALL margin loans have the option to capitalise interest if that is the clients preference. There should have been no need for the banks to consider a margin loan interest cost as a living expense as clients potentially never had that cost.

Result - Those working, with incomes to support their base loans should not be bailed out. 

Those who did not borrow against homes and had a simple margin loan structure supported by a non borrowed asset base should not be bailed out - they should however be bought back to a situation that reflects being sold out at 80% LVR - the point a non storm client would have been sold out in the same situation.

Those not working - the banks need to fix. 

I bet this brings the numbers down from 4000 to less than half that.


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## Harleyquin (12 January 2012)

Good post D and I understand what you're saying.


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## bunyip (12 January 2012)

Harleyquin said:


> Judd nobody need worry about their bank shares not performing well.  Our banking system is strong and I'm sure it will stay that way.  Billions in profit pa from several banks in this country speaks for itself.




Strong profit performance from a company doesn’t necessarily equate to a strong share price.
The share prices of the major banks are down by about 50% despite their record profits.


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## Julia (12 January 2012)

Another point is the very misleading and very frequent quoting of the banks' profits in dollar terms, i.e. in the billions.  Sounds impressive, but is much less meaningful than the ROE (return on equity).  The average ROE in the last financial year for our major banks was around 16%, so hardly qualifies them for the endless bank bashing accusation of 'greedy piggy banks' etc.

BHP's ROE, e.g. was a fraction under 50%.  Why, then, do those who love to bash the banks not do the same (or realistically a lot more) with respect to BHP?


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## Harleyquin (12 January 2012)

As I understand it talking to those with bank shares they are doing very well indeed.  Who am I to believe?

Julia when I first joined ASF I spent some time in the Newbie sector.  Have to say Sir O has some excellent advice for those starting out and easy enough to understand.
:newbie::newbie:


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## Julia (12 January 2012)

HQ, there are two separate issues here.  What I attempted to draw attention to is the rather silly frequent referencing to the banks' profitability which is quoted in the billions of dollars.  That figure is less relevant than the return on equity invested.

e.g. you might say that you are very profitable because your profit last year was $100.
What does that actually tell you?  Nothing.  Because you have not said what amount you invested to earn that $100.

If it was $1000, then you have a profit of 10% which is quite reasonable.
However, if it was $10,000, your profit was only 1% which is rather less than exciting, I'm sure you'd agree.
Hence my objection to the quoting of banks' profitability in dollar terms.


Instead of wondering whom to believe in terms of the value of holding bank shares and whether or not they are doing well, go to www.asx.com.au and have a look at prices for yourself.  It is not hard to do this.

Type the address in and the ASX headings will come up.  Click on "Prices".
You will get a box into which you type the codes for the banks you want to look at as follows:

CBA  -  CBA
NAB  -  NAB
ANZ  -  ANZ
Westpac  -  WBC
Suncorp -  SUN
Bendigo and Adelaide Bank  -  BEN

Click on the box that says "Chart"

Click on " Five Years" for the time period you want to view.
You will see a chart with a line showing the price action over the last five years.
The prices are on the right hand side.

You can also look up Dividend yields by a similar process.  Just find the heading "Dividends" and use the codes as above.  It will tell you the actual dividend yield plus whether the share carries a franking credit.  (I think all the banks have 100% franking).  If you don't know what this is, google it.  If you are still unable to find it let us know and someone will explain it to you.

If you discover how much your capital investment, should you have had one, in a bank, say five years ago is worth now, you can then work out whether the annual grossed up yield (dividend and franking credit) will have compensated you for any capital lost via a falling share price.

If any of the above is unclear, say so.  No one minds explaining.


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## bunyip (13 January 2012)

Harleyquin said:


> As I understand it talking to those with bank shares they are doing very well indeed.  Who am I to believe?




Don't believe anyone - do a bit of simple research and you'll soon find out for yourself how bank shares are performing.

The major banks are giving investors pretty good returns in terms of dividend yields, particularly when you consider the 100% franking. 
Different story though in share price performance.


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## Judd (13 January 2012)

I am surprised that my post of 8 January was so obtuse it required explaining, particularly so as I made no mention or inference of any concerns about the banks being profitable.



Judd said:


> Hmm, Piggy Bank.  Interesting term but as the major banks' after tax return on assets to June 2011 was 0.9% (yep, that is no typo) then the term Piggy Bank doesn't quite fit.  It could (just) if you looked at the return on equity (14%), ie the amount of funds the banks' shareholders (such as _moi_ and a few others) have at risk.
> 
> http://www.apra.gov.au/adi/Publications/Pages/adi-quarterly-performance-statistics.aspx




I suppose that one of the factors causing the masses to whine about the profitability of banks and not be bothered to look behind the raw numbers is that (a) they are lazy, and (b) not many people borrow [*somebody else's*] money from BHP and are, horror of horrors, expected to pay it back together with interest to compensate those who lent funds in the first place, including, for banks, those with term deposits, etc.  Shareholders wear the costs when the bank stuffs up and quite rightly to: that's their job.


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## Julia (13 January 2012)

Judd said:


> I am surprised that my post of 8 January was so obtuse it required explaining, particularly so as I made no mention or inference of any concerns about the banks being profitable.



It wasn't, Judd, and it shouldn't have required explaining.  But apparently the content was not comprehended.  



> I suppose that one of the factors causing the masses to whine about the profitability of banks and not be bothered to look behind the raw numbers is that (a) they are lazy, and (b) not many people borrow [*somebody else's*] money from BHP and are, horror of horrors, expected to pay it back together with interest to compensate those who lent funds in the first place, including, for banks, those with term deposits, etc.



Agree entirely and am a bit fed up with the continued rabbiting on about 'the massive profitability of banks'.


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## bunyip (13 January 2012)

Harleyquin said:


> As a stormy all I'm basically saying is "why did they provide storm will the funds if storms advice was so outrageous?"
> _* No one on this forum has been able to explain why *_




Nonsense – this question has been raised, and answered, a number of times since the Storm collapse.

The banks lent money to Stormers because just like any business, banks are supplying a product, and Stormers approached the banks for the purpose of purchasing some of this product.

Dan Murphy's supplies a product called liquor – they have no obligation to ensure you’ll buy a responsible amount of their product, or that you’ll use it responsibly. If you down a bottle of rum and then go out and do something crazy like getting behind the wheel of your car, that’s your responsibility, not theirs.

Motor dealers supply a product called cars – they have no obligation to ensure that you’ll drive your new car safely. If you cause an accident by driving at some crazy speed, that’s your responsibility, not theirs.

Likewise, banks have no obligation to ensure you’ll responsibly use the money you borrow from them. If you do something crazy like sinking it all into the stock market along with your life savings and your super, causing you to get badly scorched when the market crashes, that’s your responsibility.
As long as the banks can recover their money if your investment goes bad, they’ll usually lend you the money.
As the person applying for the investment loan, the responsibility is on YOU, not the banks, to perform proper risk assessment by thoroughly evaluating the proposed business. Banks simply don’t have the time, the resources, or the expertise to thoroughly evaluate the thousands of different business they finance. They’re lenders, not business consultants.


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## Julia (13 January 2012)

> HQ - got to jump in here. Storm's advice was bad, it was high risk, but it was not illegal. It is not the bank's job to tell clients not to take the advice offered by Storm.




The above from Doobsy a couple of days ago.
HQ, do you actually read the thread?  Or do you just persist with your ill conceived ideas about the banks' responsibility without considering that you might be quite wrong?

Bunyip has now also explained absolutely clearly the role of banks.

Do you get the reality yet?

How did you go with working out for yourself whether owning bank shares over the last five years was worthwhile or not?


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## Judd (14 January 2012)

Aww, how nice.  It's good to see someone, down and out, come back fighting.  Do you think the author of the article has a few doubts?  I certainly would. 



> *Making money after the Storm*
> January 14, 2012
> 
> An insider at Storm Financial is back in business, writes Stuart Washington.
> ...


----------



## DocK (14 January 2012)

Judd said:


> Aww, how nice.  It's good to see someone, down and out, come back fighting.  Do you think the author of the article has a few doubts?  I certainly would.




From the same article:



> The rough edges of her upbringing also poke through, and that's not a bad thing in this media-managed age. _A former colleague is "slimy"; _the word "fricking" is very occasionally used as an adjective.




Gee, I wonder who she could be referring to??



> Confusingly, many former staff within Storm Financial have identified themselves as victims of the fallout, partly based on their own investments in the unstable scheme and partly by blaming banks which loaned the money.
> 
> There's a familiar flavour of the staffer-as-victim in Nolan's explanations. She and her husband Peter followed the Storm model. Storm's founder, Emmanuel Cassimatis, was her financial planner.
> 
> ...




I find this interesting.  I have often wondered whether the staff actually believed in what they were selling and had their own money where their mouths were - it would appear that at least some of them did.  It would also appear they didn't get a discount on the 7% upfront fee 

What is also interesting is that obviously several people with financial planning backgrounds (the advisors) believed/fell for/were brainwashed/insert own verb of choice the strategy enough to put considerable funds of their own into it.  I've often said I'm sick of the whole justification "issue", and I really don't intend to bring it up again - but maybe some ex-clients can take some comfort in the fact if those who had the training (supposedly) to analyse financial stategies believed in it, perhaps we who had no such training can stop beating ourselves up for falling for it too.  This woman had reached the top of her field in financial planning for ANZ and while I doubt she had the experience of a lot of independant FPs - she would have had more than most of the clients she advised.  She's clearly a gifted saleswoman, who also believed in the product she was selling at the time - I can see how this combination would have been effective.



> Like a good saleswoman, she inspires trust and confidence. And, indeed, that's what she was with Storm: _"It was a sales role. They would train us on the adversities you would come up against for paying up-front fees."_
> As for her responsibility, she gets closest to it towards the end of lunch when she says: ""No excuses. I was involved. I was there. I put my family in it because I believed in it so much."




This statement also confirms my suspicions as to the work practices employed by Storm.  Cleary pre-prepared responses from Head Office were being sprouted by the individual advisors to all and any objections raised - everything appears to have been orchestrated by Manny & Julie right down to a script for the advisors to recite from - this certainly seems to reinforce a "one-size-fits-all" approach rather than the personal advice most of us thought we were getting.

Read more: http://www.smh.com.au/business/making-money-after-the-storm-20120113-Read more: http://www.smh.com.au/business/making-money-after-the-storm-20120113-1pz2c.html#ixzz1jNEKt6Qw


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## Solly (14 January 2012)

DocK said:


> From the same article:
> 
> 
> 
> ...




DocK

To me these are the most interesting grabs in Stuart's article.



>





My understanding is that Jodie McIver held a Dip FP and worked for Storm Financial (Five) Pty Ltd.
I cannot find a reference that she attained the hallowed 'masters'.


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## Frank Ainslie (14 January 2012)

Julia said:


> The above from Doobsy a couple of days ago.
> HQ, do you actually read the thread?  Or do you just persist with your ill conceived ideas about the banks' responsibility without considering that you might be quite wrong?
> 
> Bunyip has now also explained absolutely clearly the role of banks.
> ...




Julia, 

You seem to be fond of jumping on HQ just for the sake of it. I'm not sure why because she knows far more than you do about the subject in hand. 

Before you ask her a question again like, _“Do you actually read the thread?”_ or try to assert that her ideas are ill conceived, I would suggest that you better inform yourself of what really occurred between the Banks and their Storm customers.  

For instance do you actually read the newspapers or listen to the news? I think they are more informed than anybody on this thread, don’t you? For that matter, have you been to the ASIC website lately? ASIC by the way is the Regulator in this country. Apart from anything else, ASIC charges people and corporations for wrongdoing. I believe the BOQ the CBA and the Macquarie Bank have been charged by ASIC so far for their dealings with their Storm customers? Forgive me if I'm wrong, but I always thought that charges were laid against persons or parties for doing something wrong, or has the law changed? Hello! Are you reading me?

If the Banks have done nothing wrong, why are they being charged by ASIC and why are they now being sued by us as well? Or do you think we are doing this for fun?

Instead of telling HQ to get a reality check, I suggest that you do so yourself! Some research into what really happened may be a good start! Feel free to use my websites for educational purposes! Then it might just filter through to you that you just might be wrong about a few things. It’s called being human!

Until then, I'm afraid, your ideas, not HQ's are ill-conceived, based on uninformed opinion and nothing else. 

One other thing! Bunyip has admitted among other things that he knows nothing about legal matters. From his remarks to date I tend to believe him. Therefore, I suggest that you don't use him as a reference point where the banks are concerned because the issues involved are based among other things on contractual breaches, not normal run-of-the-mill banking matters. Therefore trying to apply the same principles is somewhat meaningless!


----------



## Frank Ainslie (14 January 2012)

_"HQ - got to jump in here. Storm's advice was bad, it was high risk, but it was not illegal. It is not the bank's job to tell clients not to take the advice offered by Storm. 

Any illegal lending for whatever reason whether it be incorrect assessment, inflated house price, fudged up income will need to be addressed. Retirees, low income earners etc should expect to get something back.

But I still stand by my argument that (for example) a miner on $150K pa who could afford the loan repayments on what was borrowed and still can should not receive anything back. There was no illegal or immoral lending in that case. In that situation, the client borrowed money the same as any other non storm person, the banks have not broken any rules on their lending criteria, and the clients lost money due to strategy not improper lending practices. Let that client pay back the loan like they should, not be bailed out just because it was Storm.

In all seriousness - banks provide 2 services - they take and hold deposits and offer a return on that money and they lend. Lending is how they make their money. If someone meets their criteria to lend to they have done nothing wrong. 

I would love to know the figures on how many of the 3-4000 stormified clients were still employed, earning incomes that could support the base loans taken out. These clients took on risk by borrowing against their homes.

Without opening the whole "i didn't get my margin call" thing again, if the margin loan process had worked then NO client in my opinion should have been denied a margin loan considering that there has NEVER been a requirement to service the interest on margin loans. ALL margin loans have the option to capitalise interest if that is the clients preference. There should have been no need for the banks to consider a margin loan interest cost as a living expense as clients potentially never had that cost.

Result - Those working, with incomes to support their base loans should not be bailed out. 

Those who did not borrow against homes and had a simple margin loan structure supported by a non borrowed asset base should not be bailed out - they should however be bought back to a situation that reflects being sold out at 80% LVR - the point a non storm client would have been sold out in the same situation.

Those not working - the banks need to fix. 

I bet this brings the numbers down from 4000 to less than half that._

Hi Doobsy,

Until you can think outside the square, you just won’t get it where Storm and the banks are concerned! This is not about the normal practice of banks but rather about malpractice. 

This is not about what the banks have done right but rather about what the Banks have done wrong! Stop treating Banks where their Storm customers are concerned as though they acted in strict accordance  with normal banking practice. They did not and you (and they) will find this out when this hits the Courts.

So far this forum has tended to shy away from the issues relating to the Banks focussing instead on Storm and its clients. I presume that is why most remain in the dark where the banks are concerned. The looming court battle will be about the relationship between Storm and the Banks and how it affected the Banks’ customers rights. I suggest that you familiarize yourselves with the issues because the comments you are making so far about the banks are erroneous.

It is completely wrong to assert that Banks can lend money at will (be imprudent). For one they have all signed off on banking codes that place restrictions on the manner and way they can lend money. Once accepted, banking codes are binding and form part of any contracts. Don’t let the Banks tell you otherwise. For another Banks are bound in the same way as we are by the contracts that we entered into with such. Contractual rights and obligations lie with both parties, not just with one! People also tend to forget that the agreements between the Banks and Storm violated the contractual rights of the Banks’ customers. 

The Doctors’ case in Sydney (December proceedings) addresses this issue:

_“Although His Honour found that the agreement between Storm and the CBA was not a contract to which the Storm Investors/Borrowers were privy, Perram J, accepted that an arrangement to that effect between the Bank and Storm could potentially be relevant to whether the Bank acted in good faith towards Dr, Oliver". His Honour considered that the existence of such an agreement could apply to a good faith/unconscionability claim - such as has been made in the Class Action against CBA. 

His Honour further found that the unilateral application by CBA of the redemption of proceeds from Dr. Oliver's Storm units, to reduce his margin loan, could constitute a breach of Clause 25.3 of the CGI Margin loan Agreement but not of other terms of the Agreement 

His Honour also sustained Dr. Oliver's right to bring a claim if he had received a margin call at the appropriate time, that he could have retained a much greater sum than as things panned-out, without his having received a margin call: in his case, a difference of almost $3.5 million. 

In considering whether the conduct of the CBA in agreeing to implement the Storm Business Model, was conduct which would be unconscionable, the CBA alleged that the CBA's knowing of and agreeing with, or facilitating the implementation of the Storm Business Model, could not amount to 'conduct".unconscionable or otherwise. However, His Honour found: "In any event, it is impossible to see how the Bank's alleged affirmative agreement to the Storm Business Model, is not a form of conduct.”_

Until you forget what normally occurs between Banks and their customers, you can never comprehend what happened between the Banks and their Storm customers. It’s called _“breaking the law” _and it has consequences! 

Oh, and did I mention the little matter of UMIS (unregisted managed investment scheme) where pooling was done by certain banks? We also have other matters like 'unconscionability', 'breaches of the TPA', 'being linked creditors' and so on. Quite a charge list for the banks to contend with, don't you think? 

Doobsy! Don't you get it yet? We were scammed by Storm and the banks! They were all as bad as one another! There are no good guys here! They were all crooks!


----------



## Jifromoz (14 January 2012)

Solly said:


> DocK
> 
> To me these are the most interesting grabs in Stuart's article.
> 
> ...




Hi everyone, I hope you all had a good christmas break. I just googled Julie McIver. Here is a quote from one of her pages

 "Formally a respected Financial Adviser in Australia for 13 years and now a business owner and mother of two, Jodie is no stranger to the ‘sometimes confusing world of finance’.  Jodie addresses the basic fundamentals of finance including where to start if you don’t already have millions!  Topics also include *good debt verses bad debt*, the revoluntary spending plan, what to look for when finding a good financial mentor and the 3 steps to financial freedom.   Jodie’s refreshing approach to understanding money and navigating the finance lingo inspires even the most financially savvy individual.  Designed to inspire and educate, Jodie’s passion for empowering people to succeed sets the tone for real financial strategies and solutions.

I have highlighted a part that reeks of Cassimatis and his "Claytons debt". My question is - would you "trust" this person to give you sound financial advice? I also wonder how much of her new found wealth will go back to her old customers.

Here is the link to her website for those who are interested http://www.jodienolan.com/

Cheers


----------



## Glen48 (14 January 2012)

I see she has a debt of 1.3m on her house one has to ask where did the money come from if she is only in her 30's for the house and  no mention about her husband and what he does.

Was he working for  Storm ( good name they have cooked up one ).
The whole business sounds like the female version of Peter Foster.


----------



## Julia (14 January 2012)

Judd said:


> Aww, how nice.  It's good to see someone, down and out, come back fighting.  Do you think the author of the article has a few doubts?  I certainly would.



It's a well written article.  The author, politely, makes his incredulity quite clear.

From the article:


> followed a career in which she reached the position as "number one financial adviser" for ANZ.



I wonder if ANZ would support that claim or whether such status exists only in Ms Nolan's imagination.



> (Observers of financial planning may pause to wonder about an industry in which a 20-something person with - at that stage - no university education can reach such dizzy heights, all the time advising people about their life savings.)



I've come across a few ANZ financial advisers/planners over the years and in general conversation they appeared surprisingly ill informed about global financial conditions and markets.
I suspect they get their qualification and then ANZ (or any bank) then tells them what products they are to promote.  I don't want to do them a disservice, but I'd be surprised if they had great expertise in e.g. estate planning, taxation, asset management etc.



DocK said:


> I find this interesting.  I have often wondered whether the staff actually believed in what they were selling and had their own money where their mouths were - it would appear that at least some of them did.



I find the concept of 'believing' in a financial strategy a bit odd.  
Some definitions of 'belief':

1.
something believed;  an opinion or conviction: a belief that the earth is flat.
2.
confidence in the truth or existence of something not immediately susceptible to rigorous proof: a statement unworthy of belief.
3.
confidence; faith; trust: a child's belief in his parents.
4.
a religious tenet or tenets; religious creed or faith: the Christian belief. 

I'd have thought a financial strategy should be a clear plan, tested rigorously to work, before being sold to anyone.  We now know that Storm had not done this and had promoted their model on the extraordinary suggestion that the market would keep going up!



> What is also interesting is that obviously several people with financial planning backgrounds (the advisors) believed/fell for/were brainwashed/insert own verb of choice the strategy enough to put considerable funds of their own into it.



Yes.  This supports the contention that many of these 'advisers' had managed to acquire the relevant qualification but possibly had minimal experience of markets, and even were perhaps ignorant of previous market falls, e.g. 1987.

I can't seem to find it at present, but in the past we've had threads discussing the FP qualification and how easy or otherwise it is to acquire.

Doobsy, perhaps you'd be good enough to tell us what education is required in order to describe oneself as a Financial Adviser or Financial Planner? Is there a difference between the two terms?

It's possible that when Ms Nolan started with ANZ, formal qualifications were not mandatory.  You'd have to hope they are now, for what they're worth.


----------



## Garpal Gumnut (14 January 2012)

Garpal Gumnut said:


> The Stormers have lost millions.
> 
> The lawyers and liquidators will make the most out of it all, and the perpetrators will be back giving the same financial advice, if they are not already doing so, in two years time.
> 
> gg




The above is from a post of mine in this thread just over 2 years ago.

gg


----------



## bunyip (14 January 2012)

Julia said:


> I've come across a few ANZ financial advisers/planners over the years and in general conversation they appeared surprisingly ill informed about global financial conditions and markets.
> I suspect they get their qualification and then ANZ (or any bank) then tells them what products they are to promote.  I don't want to do them a disservice, but I'd be surprised if they had great expertise in e.g. estate planning, taxation, asset management etc.
> 
> I can't seem to find it at present, but in the past we've had threads discussing the FP qualification and how easy or otherwise it is to acquire.
> ...




About 15 years ago a bloke I know became a financial planner/investment adviser with Westpac. He’d had no previous experience in that field – Westpac put him through a course lasting about four weeks, at the end of which time he was supposedly qualified to advise people on how to invest their money. Although Westpac called him a financial planner, he was barely involved in most of the usual services provided by financial planners – basically he was just a commission salesman for Westpac’s financial products. In that respect I guess he wasn’t much different to Storm’s advisers who masqueraded as financial planners, but were in fact just selling a product and, presumably, getting a cut of the 7% upfront fee.


----------



## Solly (15 January 2012)

Jifromoz said:


> Hi everyone, I hope you all had a good christmas break. I just googled Julie McIver. Here is a quote from one of her pages
> 
> "Formally a respected Financial Adviser in Australia for 13 years and now a business owner and mother of two, Jodie is no stranger to the ‘sometimes confusing world of finance’.  Jodie addresses the basic fundamentals of finance including where to start if you don’t already have millions!  Topics also include *good debt verses bad debt*, the revoluntary spending plan, what to look for when finding a good financial mentor and the 3 steps to financial freedom.   Jodie’s refreshing approach to understanding money and navigating the finance lingo inspires even the most financially savvy individual.  Designed to inspire and educate, Jodie’s passion for empowering people to succeed sets the tone for real financial strategies and solutions.
> 
> ...




Thanks Jifromoz for posting the the link. When I visited the site, at first I thought I had landed on Dymphna Boholt's site but I was mistaken.

I'm attempting to gain an understanding of what Jodie Nolan/McIvor is actually offering. What does the EQUIS Group do ? I note on their website it states that they are "a highly professional, affordable and unique *education facility* for people who are keen to learn more about money but unsure of who to *trust*, where to start or where to go to *source credible, reliable information*"

I'd be interested to know more about this group. Currently it appears that the public faces are Jodie Nolan and Leonie Duck, who I believe was has a  Bachelor of Economics from  University of Newcastle and who has also previously held the position of a Business Analyst for Optus.

On Jodie Nolan's website it states she is an author, speaker and educator and is 
"_a mother of two, author and financial advisor with over 15 years of experience lost her millions in Australia's largest financial collapse. She has learnt to rebuild her wealth and is empowering others with knowledge about money management with her book 'Surviving the Storm'.
Surviving the Storm provides the building blocks to help Australian families, women, singles and retirees re-build their wealth or start from scratch. It offers advice and tips from an expert who has experienced both sides of the fence - great wealth and financial loss. This easy to read book provides a very real account of money management in today's world_"

I wonder if Jodie Nolan currently holds an AFS Licence or is an AFS Authorised Representative ?  Now that Jodie Nolan has recently been studying for a Masters of Applied Finance from QUT in Brisbane, I wonder if she will *freely* share her knowledge with the other Storm victims?

Wouldn't it be a noble gesture to assist all the Stormers to get back on their feet and after experiencing the disaster first hand, I wonder if she will *freely* help the Stormers to "re-build their wealth or start from scratch"

I'm deeply involved in another programme of works at the moment so I'm a little time poor. But I would definitely like a bit more background on this group, I might just ask for the assistance from one of my colleagues. I do get somewhat amazed that some of the most notable wealth creation operations I have seen, after Townsville, seem to reside on the Sunshine Coast of Queensland.

S


----------



## SJG1974 (15 January 2012)

Jodie McIver/Nolan must have only changed her name recently. I recall looking at her website not too long before Christmas and it was McIver then. I made appoint of going back over the old Storm website and seeing what the "advisers" are now doing.

Me, I would think any advice from someone who thought double gearing was an appropriate strategy for mum and dad investors should be taken with a grain of salt.


----------



## doobsy (16 January 2012)

Tough day at the office Frank?

I was almost too frustrated to even bother with this but here goes:



> It is completely wrong to assert that Banks can lend money at will (be imprudent).




I am pretty bloody sure that my entire post talks about imprudent lending being punished. Lets Check shall we - 

"Any illegal lending for whatever reason whether it be incorrect assessment, inflated house price, fudged up income will need to be addressed. Retirees, low income earners etc should expect to get something back."

"Those not working - the banks need to fix."

I am also VERY sure that your obsession with your own situation clouds your ability to look at Storm from a distance. Almost every bank in Australia had exposure to Storm in some fashion. Although the push was to use CBA Townsville and BOQ North Ward where possible (and I am not arguing these two "branches" have much to answer for) to speed up the approval process, MANY clients chose to keep their existing bank relationships with ANZ, Westpac, whoever.

So get off your high horse about the fact that there is UMIS and Storm in bed with banks and everything else. The courts will decide whether CBA and BOQ have a case to answer on the home loan side. Just because ASIC lays charges doesn't show squat. ASIC laying charges is basically a massive "please explain" notice. It shows they have looked at it and they don't like it but if the banks can show nothing untoward occurred or that Storm clients were not treated differently then it will be dropped. I hope it isn't but for goodness sakes don't assume just becuase it is going to court there is an automatic assumption of guilt.

I suggest you start taking your own advice and be specific. If you think CBA has done wrong, say that. Generalising the "Banks" is BS.

Next - 







> It is completely wrong to assert that Banks can lend money at will (be imprudent). For one they have all signed off on banking codes that place restrictions on the manner and way they can lend money. Once accepted, banking codes are binding and form part of any contracts. Don’t let the Banks tell you otherwise. For another Banks are bound in the same way as we are by the contracts that we entered into with such. Contractual rights and obligations lie with both parties, not just with one! People also tend to forget that the agreements between the Banks and Storm violated the contractual rights of the Banks’ customers.




Now lets go back to my post and look AGAIN at my example.

"I would love to know the figures on how many of the 3-4000 stormified clients were still employed, earning incomes that could support the base loans taken out. These clients took on risk by borrowing against their homes.

Result - Those working, with incomes to support their base loans should not be bailed out.

Those who did not borrow against homes and had a simple margin loan structure supported by a non borrowed asset base should not be bailed out - they should however be bought back to a situation that reflects being sold out at 80% LVR - the point a non storm client would have been sold out in the same situation."

FRANK - Please answer these questions

A client with no home loan and $50K of savings goes to Storm. Storm arrange everything and that money is geared at 50% with a margin loan. The clients goes on the ride, gets the margin call later than they should have but is sold out and receives about $4K back at the end after the loan is repaid.

What was done by the banks that was illegal? Should that client get all their money back and if you say YES, justify that.

Client 2 - works in the mines - earns about $150K pa or about $9K per month after tax. Is 47 years old. Has a unit and a house but neither and real nice because up until a couple of years ago it was all about lifestyle and holidays. The properties were just for a tax deduction. They are paid off and worth about $600K between them. Goes to Storm and borrows $480,000 from his usual bank against the properties. Takes out a margin loan as well and gets into the market. Goes on the ride and loses the lot. 

He can easily afford the loan repayments.

Is this imprudent lending? Was his bank who didn't have a close relationship with Storm to know what he planned to do with the money or was it ok to lend to him based on his ability to repay? 

I hope I have made my point. NOT ALL LENDING WAS IMPRUDENT. 

Now we know that some of the borrowing against the home was not imprudent and we already know that NONE of the margin loans were imprudent because ALL of the margin loans had capital to back them we can get a better idea about how many Storm clients were screwed by the banks.

Was there imprudent lending - ABSOLUTELY. Were some of the bank branches in bed with Storm - YES, but for the sake of everyone stop the tirade against "BANKS"

Trust me, from someone who is working with ex Stormies who can still re-build and who were put back 10-15 years because of the risks in the strategy but certainly met EVERY lending criteria in the book your generalisations about every loan offered to Storm clients to be illegal is wrong.

Your doctors case is an example of margin lending LVRs going awry. I don't think ANYONE on the forum disagrees with the fact that ALL clients should be bought back to a position in which the margin loan should have been triggered at the right time.

Any client who argues they could have dropped more money in and stayed invested I have this to say - "What was stopping them taking the cash and re-investing in another index fund the next day?

Result - Those working, with incomes to support their base loans should not be bailed out. 

Those who did not borrow against homes and had a simple margin loan structure supported by a non borrowed asset base should not be bailed out - they should however be bought back to a situation that reflects being sold out at 80% LVR - the point a non storm client would have been sold out in the same situation.


----------



## McLovin (16 January 2012)

Solly said:


> My understanding is that Jodie McIver held a Dip FP and worked for Storm Financial (Five) Pty Ltd.
> I cannot find a reference that she attained the hallowed 'masters'.




Apparently she is in her final year of her Masters, according to her LinkedIn profile. Maybe the student should wait until she's done with Uni before she starts doling out folksy homespun financial advice. I wonder what she got her undergrad degree in. The admission requirements are reassuring:



> The Applied Finance discipline is designed *for people with no or limited academic background in finance*. Holders of an undergraduate degree in Finance interested in the Applied Finance discipline are invited to contact the Brisbane Graduate School of Business to determine if an individualised advanced finance program plan can be developed.




http://www.qut.edu.au/study/courses/master-of-business/master-of-business-applied-finance

Looking at the course subjects it seems like B Comm light (first and second year subjects).


----------



## doobsy (16 January 2012)

Education standards

I will try to keep this simple.

In the bad old days not unlike most industries there was bugger all. The whole weeties pack analogy is pretty close. It was mostly ex insurance guys looking to expand their books + a smattering of bank advisers.

Now is a little different. There are a couple of ways to go:

1. Dimploma - broken into 2 parts - Diploma of Financial Services - 4 (yes 4) subjects. This believe it or not allows a licencee to put you in front of clients if they want.

Subjects are: Foundations of FP, Risk Management, Investment Planning 1, Super and Retirement.

Some pretty massive holes there. You get a few of the banks who are looking to "churn and burn" who will put people with only this in front of clients as they are kept on a tight leash and as discussed are basically form completers and sales people at heart.

You can then take a crack at Advanced Diploma of FS

3 additional subjects - Tax and Estate, Complex FP, The professional adviser. You also need to cover some more in an "elective"

OPTION 2

Get a degree (commerce, business) with a major in Fin Planning.

From there you need higher ed (post grad) to get into the CFP (certified fin planner) program. This used to be just more subjects but now I think you need the Masters which is where the applied finance comes in.

There is currently no difference between the terms adviser and planner. There is talk of this changing so "adviser" is seen as someone who actually gives full advice rather than the sales team at a bank.

My opinion - the system is getting better but is still poor. I know how little I knew initially from the study side and it was only years of researching and writing plans for other advisers well before getting anywhere near a client that meant I knew what I was talking about.

Mind you I still cringe whenever I look at how easy it is to become a teacher considering the importance of that "profession" as well.

To me, time in industry should be an automatic, a bit like a lawyer doing their time or a doctor on prac. Minimum 2 years.

We also have ongoing education the same as most industries. Not exactly stressful though.


----------



## robz7777 (16 January 2012)

doobsy said:


> Education standards
> 
> From there you need higher ed (post grad) to get into the CFP (certified fin planner) program. This used to be just more subjects but now I think you need the Masters
> We also have ongoing education the same as most industries. Not exactly stressful though.




What is your opinion of CFPs who were gifted the status simply by being long term planners? Surely this needs to be reviewed to reflect the time and effort that recent CFP attainees have put in..


----------



## doobsy (16 January 2012)

robz7777 said:


> What is your opinion of CFPs who were gifted the status simply by being long term planners? Surely this needs to be reviewed to reflect the time and effort that recent CFP attainees have put in..




It probably does need to be reviewed but at least the planners in that situation have been in the game 15+ years since certainly for the past 10+ years the CFP has involved at least the 5 extra subjects and more recently the post grad.

Industry experience does count for a bit - study isn't the be all always.

Those who were gifted the title are most likely the ones who will be exiting the industry in the next 5-10 years so by default they will disappear.


----------



## Julia (16 January 2012)

doobsy said:


> 1. Dimploma - broken into 2 parts - Diploma of Financial Services - 4 (yes 4) subjects. This believe it or not allows a licencee to put you in front of clients if they want.
> 
> Subjects are: Foundations of FP, Risk Management, Investment Planning 1, Super and Retirement.
> 
> Some pretty massive holes there. You get a few of the banks who are looking to "churn and burn" who will put people with only this in front of clients as they are kept on a tight leash and as discussed are basically form completers and sales people at heart.



Thanks for the explanation, doobsy.  About how many hours of study would the Diploma of Fin. Services take?  I have a vague recollection of a previous discussion on the topic suggesting the qualifying exam was in the form of multiple choice answers.
Do you know if that's right?



> You can then take a crack at Advanced Diploma of FS
> 
> 3 additional subjects - Tax and Estate, Complex FP, The professional adviser. You also need to cover some more in an "elective"



Again, approx how many hours of study to complete this Advanced bit?


----------



## doobsy (16 January 2012)

Julia said:


> Thanks for the explanation, doobsy.  About how many hours of study would the Diploma of Fin. Services take?  I have a vague recollection of a previous discussion on the topic suggesting the qualifying exam was in the form of multiple choice answers.
> Do you know if that's right?
> 
> 
> Again, approx how many hours of study to complete this Advanced bit?




No idea Julia - Full time no distractions the first 4 could be probably knocked over easily in 6 months. Fair bit of reading plus an assignment for each. Last time I checked it was multi choice.

Advanced takes a bit more but 3 subjects might take 2-6 months each depending. There is an 8th subject which is putting together a full plan and presenting it on video and most people fail this I think since you are expected to be SO compliant that alot of people miss things. I think that should be an indicator they are not ready but I think you can re-submit within 2 months.

Overall - Full Time study might be 18 months, part time - 3 years.


----------



## Garpal Gumnut (16 January 2012)

Julia said:


> Thanks for the explanation, doobsy.  About how many hours of study would the Diploma of Fin. Services take?  I have a vague recollection of a previous discussion on the topic suggesting the qualifying exam was in the form of multiple choice answers.
> Do you know if that's right?
> 
> 
> Again, approx how many hours of study to complete this Advanced bit?






doobsy said:


> No idea Julia - Full time no distractions the first 4 could be probably knocked over easily in 6 months. Fair bit of reading plus an assignment for each. Last time I checked it was multi choice.
> 
> Advanced takes a bit more but 3 subjects might take 2-6 months each depending. There is an 8th subject which is putting together a full plan and presenting it on video and most people fail this I think since you are expected to be SO compliant that alot of people miss things. I think that should be an indicator they are not ready but I think you can re-submit within 2 months.
> 
> Overall - Full Time study might be 18 months, part time - 3 years.




Thanks Julia and doobsy.

So what I'm hearing is that it takes longer to become a Financial Planner than it takes to  train as a dog groomer, but not as long as it takes to become a Barber.

Would that be correct?

No wonder the Storm investors are getting upset with the advice they got from their advisers. 

gg


----------



## Solly (16 January 2012)

> *"Court may hold key to Storm compensation*
> Parties return to court in February
> 
> The wait for compensation may be nearing an end three years after Storm shut its doors."




More by Kate Kachor @ investordaily.com.au


----------



## Julia (17 January 2012)

Re Jodie Nolan:  I was curious enough to have a look at her website.  In particular I wanted to see what the "Equis Group" offered.

Multiple attempts to access various links to this part of Ms Nolan's business have elicited "Page Not Found".

I have sent her an email, expressing interest in knowing more about the content of her workshops, and their cost.  So far she has not replied.

Anyone been able to access the Equis link?


----------



## doobsy (17 January 2012)

Julia said:


> Re Jodie Nolan:  I was curious enough to have a look at her website.  In particular I wanted to see what the "Equis Group" offered.
> 
> Multiple attempts to access various links to this part of Ms Nolan's business have elicited "Page Not Found".
> 
> ...




Got in the other day

Since the apple never falls far - she is charging $83 per person per seminar. From what I can see ALL of the information is information easily accessible. As she is no longer interested in giving personal advice (that involves getting a licence) she is keeping it generic and I have copied below the text about the seminars.

Would be cheaper to go out and buy a Noel Whittikar or Paul Clitheroe book.

Mind you if she is running 1 per fortnight and can get 50 bodies through the door then she is making $107,900 out of the seminar series. Flog them the book while there and it probably is pretty easy money considering there is no personalised advice, no tricky technical or strategic discussions.

Workshops

Living Smart - Things you ‘need to know’ about money
A smart place to start on your quest for credible financial information, Living Smart - The things you need to know about money - is an essential 2 hour workshop for anyone who has ever wanted to understand the fundamentals of finance and how to easily apply them to your life.  You can expect to learn the key principles, facts and skills behind cash-flow and debt management, understanding investments like shares and property, superannuation strategies and tax minimisation, just to name a few.  This knowledge is non-biased, accurate and designed to give you the edge in developing an excellent financial outlook.  A must for anyone from the ‘young achievers’ to the ‘young at heart’, this workshop is the cornerstone of all financial workshops and most of our attendees agree ‘ this stuff should be taught in schools’.  After only 2 hours you will be armed with the practical information to make significant changes to improve your money situation.

Retiring Smart - The things you ‘need to know’ about retirement
Providing income for retirement regardless of your age or situation is a daunting process for most people however in this 2 hour workshop you will discover how straightforward it is to understand the financial facts to retirement.  From self-funded situations to navigating the Centrelink and Tax issues, you will have a better understanding of the right questions to ask in order to save for, plan and implement your own retirement income streams.

Start Smart - Things young achievers ‘need to know’ about money
A smart place to start for the future leaders of our country!  Start Smart - The things ‘Young Achievers’ need to know about money is an essential 2 hour workshop for ages 16-25.   Ideal for those Gen Y go-getters who are keen to get the head start in their financial future the workshops are designed to provide easy, practical information on issues that affect Gen Y right now.  We often hear:” Why isn’t this stuff taught in school?”  So with this in mind, you will learn the fundamentals of money (that those older than you, wish they knew earlier!) and how to apply them to your life without sacrificing your current lifestyle.  

Smart Business - Financial things you ‘need to know’ about small business
A priority workshop for small to medium business owners who are keen to better understand their financial situation, improve ongoing cashflow and source potential financial opportunities within their existing business.  Often business owners spend more time ‘in’ their business and not enough time ‘on’ their business so the opportunity to spend 2 hours understanding financial statements, breakeven and profit projections, cash-flow and marketing is much needed to enhance their productivity, and ultimately maximise their bottom line.


----------



## doobsy (17 January 2012)

sorry $87 per person


----------



## Julia (17 January 2012)

That's not expensive and I can see a real market for what she's offering.
Agree that it's very basic stuff that you'd assume most people would learn for themselves, but this thread is a clear indication that they don't.

Thanks for copying it for us, doobsy.


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## bunyip (18 January 2012)

Julia said:


> That's not expensive and I can see a real market for what she's offering.
> Agree that it's very basic stuff that you'd assume most people would learn for themselves, but this thread is a clear indication that they don't.





 One thing this Jodie Nolan woman has discovered from her Storm experience is that there are plenty of people who will pay money to be told what they want to hear.
This was the cornerstone of the Cassamatis success - tell people what they want to hear, train up a team of advisers to do the same, charge big money for the service, and package it up as safe and conservative financial planning advice.

You can be sure this woman will crank up her prices once she builds up a decent amount of custom. She'll soon have a devoted following from people who prefer to let others think for them rather than thinking for themselves.
She'll do well.


----------



## Julia (18 January 2012)

If she's going to do well, she'll need to start answering emails, particularly those asking why they cannot access information about her actual product.


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## Solly (18 January 2012)

bunyip said:


> One thing this Jodie Nolan woman has discovered from her Storm experience is that there are plenty of people who will pay money to be told what they want to hear.
> This was the cornerstone of the Cassamatis success - tell people what they want to hear, train up a team of advisers to do the same, charge big money for the service, and package it up as safe and conservative financial planning advice.
> 
> You can be sure this woman will crank up her prices once she builds up a decent amount of custom. She'll soon have a devoted following from people who prefer to let others think for them rather than thinking for themselves.
> She'll do well.




bunyip

To me, this flags the issue of that fine line between, "education", general advice and specific advice. Might be worth dropping a line to Greg Medcraft for some clarity. 

S


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## bunyip (19 January 2012)

Solly said:


> bunyip
> 
> To me, this flags the issue of that fine line between, "education", general advice and specific advice. Might be worth dropping a line to Greg Medcraft for some clarity.
> 
> S




Maybe we could assign Frank to this case – he seems to have a particular fondness for writing to ASIC!


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## Ijustnewit (19 January 2012)

bunyip said:


> Maybe we could assign Frank to this case – he seems to have a particular fondness for writing to ASIC!




At least Frank is trying to prevent another car crash , rather than pouring more oil on the road. Credit where credit is due.


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## bunyip (19 January 2012)

Ijustnewit said:


> At least Frank is trying to prevent another car crash , rather than pouring more oil on the road. Credit where credit is due.





I’ve already commended Frank and wished him well in his efforts to prevent further ‘car crashes’. I do so again now.

I’ve driven more than two million kilometers myself and have never been involved in a single road accident.
My policy is to *drive cautiously and don’t take stupid and unnecessary risks.*
The same policy has kept me safe in investment matters as well.


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## Harleyquin (19 January 2012)

Julia I do read this thread thoroughly when I have the time.  I suggest you read Franks latest posts as he explains my thoughts at present far better than I can as I'm presently time poor.  I have no interest in checking how bank shares have fared over the last five years or in fact how they'll fare in the next five, to me they are a non event and the fact remains that our banks in this country are making record profits according to news reports over the past three days.  However the site you've suggested is one that I 'm very familiar with and if anyone else is interested I'm sure it will help them.


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## Julia (19 January 2012)

Well, HQ, silly me for thinking you'd appreciate the info as to how to check something out for yourself, rather than just parroting off what someone else says.


----------



## Judd (20 January 2012)

Julia said:


> Well, HQ, silly me for thinking you'd appreciate the info as to how to check something out for yourself, rather than just parroting off what someone else says.




Oh well, Julia, as that old saw goes, you can lead a horse to water but you cannot make them think.

:sheep::sheep:


----------



## shibby (20 January 2012)

I vowed I would never write on this forum again but after the last 3 posts regarding Harlequin I just can not help myself.
What a nasty piece of works you three are.
Harlequin does not pretend to be any thing other than what she is and that is someone who is trying to understand just what happened and in a very nice way trying her best to warn other people that all is not necessarily what is appears on the surface.

There were requests earlier requesting more people to be honest and come forth and talk about their own experiences but why Julie, Bunyip and Judd are on the forum no one would dare bare their soul.

Julia I am the person who supplied Frank with the details of your earlier slip up about Solicitors I know you have an alarmingly high rate of illusions of grandeur but I didn’t trowel through 100 ‘s of pages trying to catch you out I had remembered the comment well because of my family association with the legal profession and with what I had saved its took a matter of seconds.
You would have to be one of the nastiest people ever on this forum every now and then there is the pretence of kindness a lull in the assassination and then you attack a bit like a black widow spider maybe its time to change your avatar that way future contributors will be pre warned.

As for Bunyip or better known as Sir Perfectio we mere mortals should have a competition over the choice of your avatar.  From memory a financial wizard extraordinaire and of course the latest he is now even a superior driver who has driven millions of miles and never had an accident and folks don’t forget those wonderful parenting skills we hear it all ad nauseum you too are a legend in your own mind we have a bit of theme happening here between these two I wonder if there could be some sort of a relationship? 

No wonder there is no patience with us mere mortals who got involved with Storm I think this has been a wonderful experience for Julia and Bunyip they can revel in their superiority 

Judd your latest comment is something that I would have expected from Julia the forum of late has definitely gone down a notch or two.


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## Julia (20 January 2012)

Shibby, I don't actually remember any of your previous posts (clearly don't have your memory) but will assume you're another unhappy and damaged ex Storm client.

I'm sorry about your situation and if having a go at me makes you feel better about it, then please feel free.   Happy to be your target if directing your anger in my direction helps you.

I will, however, correct you regarding your assertion of a 'slip up'.
I have patiently explained before, but will do so again, there was no 'slip up' much as you might wish there to be.  In one instance I described an experience with an investment scheme, no legal advice or indeed advice of any kind involved from lawyer or anyone else, and in the second instance I referred to my thus far entirely positive , if limited, experiences of consulting a lawyer for legal advice.

If you cannot understand that there is no connection between the two, then there's nothing I can do to further help you.


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## Harleyquin (21 January 2012)

Julia at long last we agree on something.  Very silly of you indeed and highly insensitive to boot.  I'm more than capable of speaking for myself, I just happen to think that Frank has expressed himself very well as usual.  As for agreeing with someone else on this forum I've seen where once again you've agreed with bunyips load of rubbish re the banking industry selling their "commodities".  Do you really think our financial industry compares with our petroleum industry?  Obviously you do.  Well done!!!


----------



## Harleyquin (21 January 2012)

Judd you obviously follow the sheep in front of you...and NO we didn't do that with storm.  There are far too many assumptions coming from the anti stormy side of the fence.  It's time you did some research and found out exactly what transpired pre-collapse.  Especially between the financial planner and the banker.  Or can I lead you the horse to water and you also refuse to drink?  There's obviously a few thirsty old nags on this forum.


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## Tysonboss1 (21 January 2012)

Harleyquin said:


> Judd nobody need worry about their bank shares not performing well.  Our banking system is strong and I'm sure it will stay that way.  Billions in profit pa from several banks in this country speaks for itself.
> 
> As a stormy all I'm basically saying is "why did they provide storm will the funds if storms advice was so outrageous?"
> 
> All they need to do is acknowledge their past mistakes. Pay the price and move on, instead of this on-going saga.




Because if you bring in rules to stop the 1% do dumb things, then you'll probably also stop the rest from doing smart things.

If things had turned out differently and the markets went your way, no doubt you would be living the high life saying how smart you were, but things went bad and now your looking for others to blame. 

It's not up to the bank to mother you, your an adult, take some resposibility for the things you let happen.


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## Frank Ainslie (21 January 2012)

shibby said:


> I vowed I would never write on this forum again but after the last 3 posts regarding Harlequin I just can not help myself.
> What a nasty piece of works you three are.
> Harlequin does not pretend to be any thing other than what she is and that is someone who is trying to understand just what happened and in a very nice way trying her best to warn other people that all is not necessarily what is appears on the surface.
> 
> ...




Hi Shibby,

_“There were requests earlier requesting more people to be honest and come forth and talk about their own experiences but why Julie, Bunyip and Judd are on the forum no one would dare bare their soul.”_

I tend to agree with your comments regarding those particular individuals on this forum that are downright unpleasant at times. However, if people use these 'nasties'’ spitefulness as an excuse not to participate, then I have little sympathy for them. Wars are not won by people hiding in ditches but rather by those that overcome their fears and give it back in good measure to their tormentors. After all, who are these people anyway that dare to preach to us? There is nothing in any way superior about them when you think about it. For instance, whatever Julia now says must be taken with a pinch of salt and Bunyip ran out of new material a long time ago. Hardly people that anyone should take seriously!

Let’s be honest! This particular forum is unimportant in the scheme of things and therefore what certain individuals on it think of us Stormies is also unimportant. They may think it is but it isn’t! Their individual opinions of us are quite irrelevant. There’s not much point therefore in getting upset over such people because they are just not worth worrying about. 

If people want to know the truth about Storm and the Banks we will tell our story. If not, so be it! After all, it’s no skin off our noses one way or the other. If we Stormies keep this in mind, we should be able to quite happily ignore these bigots and answer questions only from those that seem genuinely interested. 

_”Judd your latest comment is something that I would have expected from Julia the forum of late has definitely gone down a notch or two.”_

Whilst people remain reluctant to speak, it will remain so. You have spoken your mind. If others feel so inclined, so should they. Remember this: 

_“Start doing the things you think should be done, and start being what you think society should become. Do you believe in free speech? Then speak freely. Do you love the truth? Then tell it. Do you believe in an open society? Then act in the open. Do you believe in a decent and humane society? Then behave decently and humanely. /I]-Adam Michnik.”_


----------



## Harleyquin (21 January 2012)

Rubbish TB.  The financial advice we were given came from a licensed professional advisor.  Pre collapse  I was under the impression that these people were professionals.  Now we find out 'no they're not professionals, no you can't trust them, no it doesn't matter what they say you have to do x amount of research, the list goes on'. And then to top it all off we find out after the collapse that storm in conjunction with their 'partners' who just happen to be some of our major banks are running an unregistered investment scheme.

What you're conveniently forgetting is that we were seeking financial advice, we never pretended to be experts in the field.  We made sure these people carried the right pieces of paper, nobody wants to risk their money.  When someone is 'qualified' I assumed, wrongly, that they would know what they were talking about.  They conned us and it is so convenient that all the cockroaches are now crawling out of the woodwork to blame the victims of this crime.

If you understood what the storm/bank people were doing to their clients, why didn't you do something about it instead of waiting until after the event to throw mud.  You have no idea what you're talking about.  Do some research it might just help.


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## Frank Ainslie (21 January 2012)

Tysonboss1 said:


> Because if you bring in rules to stop the 1% do dumb things, then you'll probably also stop the rest from doing smart things.
> 
> If things had turned out differently and the markets went your way, no doubt you would be living the high life saying how smart you were, but things went bad and now your looking for others to blame.
> 
> It's not up to the bank to mother you, your an adult, take some resposibility for the things you let happen.




You are either a banker or an idiot! Either way, you need to do some research before you mouth off any further. It's people like you, who are totally ignorant of the facts, that quite frankly give us the ****s!


----------



## Harleyquin (21 January 2012)

Thanks Shibby appreciate your comments and agree with them 100%.  I do remember your earlier posts.

It doesn't seem to matter how often any of the Stormies tell it like it was and is the cockroaches are ever present.

Once again Frank has posted a thought provoking and truthful post.  Might I suggest that those of you who persist in criticizing these posts actually read them.

To BJJac ie Bunyip Julia and Judd and co, go away and do some real research instead of coming back with your usual uninformed garbage.


----------



## Tysonboss1 (21 January 2012)

Yes they gave "advice". 

You chose to take the bad advice.

Just take the lessons you can get out of it and move on, it's you fault.

Yes you had some things done to you that were a bit off, but your the one who set things up so that those things could happen.

You can't claim ignorance, every individual is their own chief risk officer.

It is up to you to examine the facts and know what your doing, 

Saying it is not your fault because you were just a blind follower is plan wrong.


----------



## Solly (21 January 2012)

Why am I sensing that a Circular Argument Syndrome is starting to besiege this thread ?

_In that direction," the Cat said, " lives a Hatter and in that direction lives a March Hare. . . . . . . _

Are there any other ex-clients, advisers or associated parties who are willing to enter this Den and share experiences and opinions of their first hand involvement in this debacle ?

S


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## bunyip (21 January 2012)

Harleyquin said:


> To BJJac ie Bunyip Julia and Judd and co, go away and* do some real research instead of* *coming back with your usual uninformed garbage.*




Harleyquin old friend, I respectfully suggest you take you own advice.
If *YOU* had done some simple research instead of believing everything you were told, you wouldn’t be in your current predicament.


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## bunyip (21 January 2012)

shibby said:


> I vowed I would never write on this forum again but after the last 3 posts regarding Harlequin I just can not help myself.
> What a nasty piece of works you three are.
> Harlequin does not pretend to be any thing other than what she is and that is someone who is trying to understand just what happened and in a very nice way trying her best to warn other people that all is not necessarily what is appears on the surface.
> 
> ...




Hello again Shibby lass - Happy New Year to you.

It’s been quite a while since we last had the privilege of being treated to one of the nasty and abusive rants that are your specialty.
You should have taken the advice I gave you about two years ago...._*don't read my posts if I upset you so much.*_

But anyway, rather than getting upset over your latest outburst, we'll make allowances for you on the basis that you’re still sore because you got sucked in by a ponzi scheme and we didn’t.

Peace and happiness to you for 2012...hope it’s a good year for you.


----------



## shibby (21 January 2012)

Tysonboss1 said:


> Yes they gave "advice".
> 
> You chose to take the bad advice.
> 
> ...




Tysonboss1 (goodness me are there 2 of you)

My questions to you are have you read any of the submissions to the Ripoll Parliamentary Inquiry?

Are you just a wizz kid trader who sits on the computer and knows nothing about life and what really happened?

Educate your self about this disaster and then make a comment - you are saying nothing new you are just making the same statement that we have heard time and time and time again and it is so boring. 

I bet you haven't even read the earlier posts on this forum you have simply jumped in to bash us becuase you think we are down and out.

Nothing could be futher than the truth I have never been so determined in my life that I will get through this. 

Sorry to disappoint you Julie I am not unhappy, I am not damaged, I am wiser and I am determined to see this through to the end - it has been a long 3 years but guess what we are still here still fighting because we are in the right. 
We might have been gullible even naive but we are  generations of fighters and will not give in till the end. 

Win or lose we will see it through because that's who we are.

Why dont you and Julia and Bunyip and Judd talk about who you really are?

By your posts you look like just bullies who get off on other peoples misfortune because you feel like c**p.


----------



## Judd (21 January 2012)

Harleyquin said:


> .....Judd and co, go away and do some real research instead of coming back with your usual uninformed garbage.




I did do some real research and I have you to thank for that Harleyquin.  Much appreciated.  Your use of the term Piggy Bank got me curious and led me to the APRA site.  Lot's of fascinating stuff there.  Thanks again and all the best.


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## Julia (21 January 2012)

Harleyquin said:


> Julia at long last we agree on something.



Do we?  What's that?




shibby said:


> Sorry to disappoint you Julie I am not unhappy, I am not damaged, I am wiser



I'm glad to hear it.



> Why dont you and Julia and Bunyip and Judd talk about who you really are?



Then we would probably be accused of being egocentric.

It genuinely puzzles me why you, HQ et al are even members of this forum.
Forums are where people come to exchange information, usually with the aim of learning from those who have greater expertise in a particular area.  If you looked at some of the other threads you would see that people are very quick to disagree and criticise strategies or comments from others with which they disagree.  That's what makes forums so useful, i.e. they provide alternative ways of thinking about a topic or problem.

You don't appear to have any interest in learning anything and are seemingly just looking for support, i.e. responses which agree with the contention that you had no reason to not blindly accept advice offered without considering how much risk that placed on your home and/or other assets.

Doesn't SICAG exist as a support group?   Wouldn't you be more comfortable there where I imagine your co-members have as their priority comfort and kindness, rather than objective comments?


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## Tysonboss1 (21 January 2012)

shibby said:


> 1, My questions to you are have you read any of the submissions to the Ripoll Parliamentary Inquiry?
> 
> 2, Are you just a wizz kid trader who sits on the computer and knows nothing about life and what really happened?
> 
> ...




1, No, I don't really see the need for a Parliamentary Inquiry, Seems like a waste of time and money.

2, No, Not a whizz kid or a trader. I know a bit about things, I run a successful business and operate a successful investment operation.

3, I have done a bit of reading on the storm subject over the past few years.

4, Well if you keep hearing maybe there is some truth in it, Maybe listen to it.

5, I read read alot of this thread over the years, it is a giant thread, so I can't so I heave read everything though,

6, Good for you thats the spirit.

7, What exactly do you want to see happen, Do you believe your financel position should be completely restored, I personally believe you should be made to pay back every you lost in the gamble.

8, ummm,... OK. Sounds to me like you would do better to put your passionate effort to better use.

9, I am quite open with what I do on various thread,

10, No, I just take personal responibilty very seriously and I hate "Poor me syndrome". And when people fly in the face of all the established investment principles and it blows up on them I have very little sympathy.

I believe in letting people fail if they make bad decisions, I have lost money in the past, But I never blamed anyone else, It is always 100% my fault. I take resposiblity for all of my failures and successes.


.


----------



## shibby (21 January 2012)

_Then we would probably be accused of being egocentric. 
_
What! your not?

_It genuinely puzzles me why you, HQ et al are even members of this forum.

_Why are you?

_Forums are where people come to exchange information, usually with the aim of learning from those who have greater expertise in a particular area._ 

What a hoot – you really believe that you have some thing to contribute apart from the theme of “we are to admit that we were stupid in not seeing the enormous risks involved”.  

_If you looked at some of the other threads you would see that people are very quick to disagree and criticise strategies or comments from others with which they disagree. That's what makes forums so useful, i.e. they provide alternative ways of thinking about a topic or problem.
_
I would love this to be a forum where ideas are exchanged I tried that years ago and I am so thankful to people like Solly and Carey Ramm who gave such good common sense advice when I needed it so badly there was a sense then of a joint effort for us to survive. Then it changed into a quest of what actually happened and again the Aussie Stock Forum site was invaluable. if I was to lose my house and all my money I needed to know why and I was determined to find out.  Over the years there was such a great input of ideas and information and little by little it came together of course having a parliamentary inquiry and then the Worrells Inquiry also helped.   

_You don't appear to have any interest in learning anything and are seemingly just looking for support, i.e. responses which agree with the contention that you had no reason to not blindly accept advice offered without considering how much risk that placed on your home and/or other assets._

Personally I don’t want any support from you I cant speak for others of course  I don’t think for a moment you would be capable of giving support in any form because you don’t listen (if this was a conversation) which of course it is not,  you simply read with your brain shut off as everything is set around your own agenda and it’s the same ol same ol here we go again  “to not blindly accept advice offered without considering how much risk that placed on your home and/or other assets.”

_Doesn't SICAG exist as a support group? Wouldn't you be more comfortable there where I imagine your co-members have as their priority comfort and kindness, rather than objective comments?
_
I don’t belong to SICAG.


----------



## shibby (21 January 2012)

Tysonboss1 said:


> 1, No, I don't really see the need for a Parliamentary Inquiry, Seems like a waste of time and money.
> 
> 2, No, Not a whizz kid or a trader. I know a bit about things, I run a successful business and operate a successful investment operation.
> 
> ...





You lost any credibility on point 1. and when down hill rapidly from then on


----------



## Harleyquin (21 January 2012)

B, J & TB you have all demonstrated by your posts that you have no interest in how Storm Financial operated, how the banking fraternity worked in conjunction with them, why clients accepted this advice or how it's affected them.

TB again you've posted several extremely uneducated posts.  Tell me, what is the roll of a financial advisor?  You obviously have no idea.

I used to think financial advisors  were highly educated people who were 'trained' to offer legitimate financial advice.  So I made a huge mistake in believing that and them.  Today I know different and it's people like you and your attitude that reinforce this belief.

Are you happy with these people masquerading as financial advisors, do you think what they are doing is criminal or don't you care either way.

I believe it is important that all financial planners know their stuff and clients know they can trust their advice.  Your comments are a copout.

Solly youre right CAS has definitely pervaded this thread.  I made a belated new years resolution that if that's what it takes bring it on.

J It continues to puzzle me why you bother with the SF thread as you've shown no interest in the problems that created this mess.  You are only interested in discussing financial issues that are quite unrelated to this thread as your recent post regarding bank shares over the past five years, during which time we experienced the GFC.

ASF has numerous threads which may suit you far better than this one.  Personally I feel very comfortable on this thread discussing anything related directly to storm.  I wouldn't discuss storm on another thread in any detail.

I see nothing wrong with offering emotional support to others and I see nothing wrong with asking for support wherever and whenever I need it.  That however is not why I'm here.  Recently when  FA mentioned the r*** word in a hypothetical you were the first person to take him the wrong way and to seek emotional support.  Again I'm happy to offer you what emotional support I can but don't criticize others for doing the same.


----------



## Julia (21 January 2012)

Harleyquin said:


> You are only interested in discussing financial issues that are quite unrelated to this thread as your recent post regarding bank shares over the past five years, during which time we experienced the GFC.



Let's get this clear:  you made the comment that people were telling you that their bank shares were doing terrifically well.  You said you didn't know what to believe.
As a consequence, I took the time to tell you how you could ascertain for yourself whether bank shares were in fact doing well.
I did at the time receive some messages telling me I was wasting my time in trying to help you because you clearly had no interest in being other than a victim.

It's up to you whether you take advantage of someone trying to be helpful.
I'm still glad I gave you the option.




> ASF has numerous threads which may suit you far better than this one.  Personally I feel very comfortable on this thread discussing anything related directly to storm.  I wouldn't discuss storm on another thread in any detail.



???   I don't suppose you would.   The participants in a thread that had nothing to do with Storm wouldn't have a clue about what you were talking about.




> Recently when  FA mentioned the r*** word in a hypothetical you were the first person to take him the wrong way and to seek emotional support.



What absolute rubbish.   I objected strongly to his analogy and said why.  That is not "seeking emotional support".   I've since regretted being so disgusted that I gave any personal history which has no place on this thread.


> Again I'm happy to offer you what emotional support I can but don't criticize others for doing the same.



HQ, I don't need emotional support from anyone, thanks.  If I did, I wouldn't be looking for it on a stock forum.


----------



## Solly (21 January 2012)

> *"No light at end of Storm tunnel*
> 
> Money remains very tight and Mark Weir has little joy in his life.
> 
> "There's great despair out there. People are just hanging on with their last threads of hope" he says."




Full article by Anthony Marx on page 66 of the print edition of today's Courier Mail.


----------



## SJG1974 (21 January 2012)

Harleyquin said:


> B, J & TB you have all demonstrated by your posts that you have no interest in how Storm Financial operated, how the banking fraternity worked in conjunction with them, why clients accepted this advice or how it's affected them.




Have to disagree here HQ.  

Each of these posters and others have shown a great interest in how Storm operated, in fact, I believe that through the submissions to the PJC, posts on this forum and other media, most people not involved have a good indication of how Storm operated.  And I think it is fair to say that no one here would think that they acted in a way you would hope professional financial advisers would act. 

As for the banking fraternity and how they worked with Storm, at this stage, all we have are accusations which will be defended vigorously by the banks in court.  I know you and people like Frank and idontgetit have already tried and prosecuted the banks, but most others would probably prefer to let the courts do their job, before we hang them out to dry.  If they have broken the law, then they will rightly pay the price. I doubt anyone would disagree with that.

We also have a fair idea of how the whole saga has affected Storm clients through stories by posters and the media.  However, unless someone has lived through the mess, they can’t fully understand what people have gone through....a bit like rape, you can imagine what it may be like, but how would you truly know unless you have been through it yourself? Frank apparently does. 

And I think it is fair to say that posters have asked repeatedly why people took on the advice, but unfortunately, the victim mentality of many Storm victims on this forum has prevented us from getting to the real reasons for most.

If I may, I would like to quote Frank, who as you have mentioned several times, tends to articulate things so well.  At the end of the day, these bolded words are at the heart of why you and others were ripped off by these people….



Frank Ainslie said:


> _In life nothing is written until we write it! *The CHOICE and the POWER certainly does remain with each of us.*
> _



_

Life is all about choices, we make them every day…small ones or life changing ones.  We can go one way or the other.  Many people, when they are faced with a life changing choice, such as investing their life savings with a third party, will give that choice the consideration its significance warrants; they will ensure they understand the strategy inside out and evaluate the risks versus the potential returns.  And only then, would these people make a CHOICE.  Unfortunately, it is obvious that so many Storm investors did not give this CHOICE such consideration. 

When you sat in front of the Storm adviser for the first time, and every time after that, YOU had the CHOICE and the POWER:

•	The choice whether to blindly follow their advice or bone up on the strategy to which you were committing your life savings to
•	The choice whether to borrow against your house
•	The choice whether to gear up via a margin loan
•	The choice whether to keep gearing up when storm asked you to
•	The choice to just leave everything in their hands, or to actually understand what you invested in
•	The choice to remain invested as the market tumbled, or again to blindly accept Storm’s recommendations
•	The choice to take responsibility for the choices you made above, amongst others, or to blame everyone else for your woes other than yourself.
Yep, you had choices alright….many of them.  And YOU made them of your own free will, no one else._


----------



## maccka (21 January 2012)

SJG1974 said:


> Have to disagree here HQ.
> And I think it is fair to say that posters have asked repeatedly why people took on the advice, but unfortunately, the victim mentality of many Storm victims on this forum has prevented us from getting to the real reasons for most.




What are the characteristics of victim mentality?  How have they prevented you getting to the real reasons?



SJG1974 said:


> Yep, you had choices alright….many of them.  And YOU made them of your own free will, no one else.




The problem with this statement is that it makes a HUGE (and constantly proven to be false in multiple fora) assumption. It assumes that Storm clients:
1a) were given all of the information they needed to make an informed choice/decision AND 
1b) that it was possible for them to receive all of the information they needed in a timely manner.

There is also an argument to suggest that it also assumes that the banks and Storm were acting as per the legal contracts they offered and signed.

Cheers
Maccka


----------



## SJG1974 (21 January 2012)

maccka said:


> What are the characteristics of victim mentality?  How have they prevented you getting to the real reasons?




I am not sure if there is a specific definition of victim mentality Maccka, and I don't know whether you really want to know or are just stiring the pot...anyway I got this definition of victim mentality from another website...I think it explains the attitudes some Storm victims have shown on this forum:

_"Victims do not look inward to determine if they bear any responsibility for what happens to them in life. They are so rivited on looking for someone to blame for their problems and misfortune that they fail to understand that everyone has problems at one time or another in life and each of us must accept personal responsibility for dealing with life’s challenges"_


I think the denial of responsibility shown by several posters reflects a victim mentality.  As a result, my opinion is that some posters have been less than truthful in detailing their real reasons behind going with Storm, perhaps because admitting you were greedy, for example, is too difficult to face up to.




maccka said:


> The problem with this statement is that it makes a HUGE (and constantly proven to be false in multiple fora) assumption. It assumes that Storm clients:
> 1a) were given all of the information they needed to make an informed choice/decision AND
> 1b) that it was possible for them to receive all of the information they needed in a timely manner.
> 
> ...




It doesn't make any assumptions at all.

Actually, if anything, the statement assumes is that every client who walked into Storm's doors made the choice to either go with them or walk away freely- noone forced them into doing something they didn't want to do. 75% walked away, 25% stayed and were financially ruined.  100% had the choice and made the decision themselves.  

Whether they were fully informed or not is irrelevant in this context- noone else made the decision for these people, and therefore, as I and others have said ad nauseum, people should take responsibility for that.


----------



## Harleyquin (21 January 2012)

SJ you too have decided you know exactly what happened between the storm client and advisor, when in fact your post makes it very very clear that you have no idea what you are talking about.  Making uneducated assumptions is not the same as facts.

J true I had one person tell me how well their bank shares were doing and I mentioned it in a post, it doesnt mean for one moment that I'm interested in taking it further.  Lers put it simply 1 if you're happy with your shares hang onto them or 2 if you're not get rid of them.  You and others are right I'm not interested.

Like you J I've also had quite a number of stormies contact me regarding Bunyips and your comments.  Your post regarding looking at bank shares over five years upset many.  Personally I wish many of those I've spoken to would post then perhaps you, B and co would realize just how out of touch you are when it comes to understanding those affected by disaster.

As for having a victim mentality, I've been there and I'm over it, when this collapse occurred we were all mostly devastated and stunned, we have had to progress through all the steps of the grieving process, and the victim stage has been well and truly replaced by something much stronger.  I'm well aware of what happened now we just have to wait and see what happens in court.

There are few forums for storm survivors to put their case forward, or to read for information/news and if you disagree with us that's your prerogative, it doesn't mean though that you understand or you're right.  If you only want to discuss investment chose a more appropriate thread and stop the inappropriate stormy bashing.  

Every stormy is in a different 'place' and many have been so badly burnt they will never get over it and remain very fragile.  Most are elderly, have been conned and don't understand.  Others are young and have moved on.  The rest are somewhere in between.  

All the news items are posted on this thread thanks to Solly.  SICAG is a group for stormies but there are many family members not in storm who have seen their loved ones destroyed by this, and this forum is the one place they can come to for information.  A public forum such as this is a great idea.  It's just a shame that it is constantly peppered with childish and uninformed innuendo.


----------



## SJG1974 (21 January 2012)

Harleyquin said:


> SJ you too have decided you know exactly what happened between the storm client and advisor, when in fact your post makes it very very clear that you have no idea what you are talking about.  Making uneducated assumptions is not the same as facts.




Can you enlighten me HQ on some of my uneducated assumptons? The only way I will learn is if you point out my mistakes and tell me the facts.

Am I wrong in assuming that you made the choice to go with Storm and all of its advice?  If I am wrong, then would you care to let me know who made those decisions on your behalf?  If they coerced you, how did they do so?

If you were forced to do something against your will, then I would think charges could be laid.


----------



## Harleyquin (21 January 2012)

SJ those figures 75% walked and 25% didn't are just a bit too convenient to quote.  We were one of the ones to walk away after their information seminars.  We went to storm quite sometime afterwards asking for a suitable financial plan for our needs.  The information given at the seminars weren't even discussed by us or storm.  Quite frankly it was so long after the information evenings that I can't even remember what was discussed at them. How do we 'fit into' these wonderful figures of yours.

I am sick of protagonists assuming that we all went along to some wonderful info session and was told 'do this this and this and we'll make you rich' and with that we all marched into their office and grabbed this highly risky 'plan' with both hands.  How do you know what choices we were given?  You haven't a clue that much is obvious by your post.  There's a lot you don't know or understand.  Just as there's a lot that we don't understand.


----------



## SJG1974 (21 January 2012)

Harleyquin said:


> SJ those figures 75% walked and 25% didn't are just a bit too convenient to quote.  We were one of the ones to walk away after their information seminars.  We went to storm quite sometime afterwards asking for a suitable financial plan for our needs.  The information given at the seminars weren't even discussed by us or storm.  Quite frankly it was so long after the information evenings that I can't even remember what was discussed at them. How do we 'fit into' these wonderful figures of yours.
> 
> I am sick of protagonists assuming that we all went along to some wonderful info session and was told 'do this this and this and we'll make you rich' and with that we all marched into their office and grabbed this highly risky 'plan' with both hands.  How do you know what choices we were given?  You haven't a clue that much is obvious by your post.  There's a lot you don't know or understand.  Just as there's a lot that we don't understand.




The figures were quoted by a Storm representative in court from memory.  granted, you wouldn't necesarily believe everything they say. However, it supports the point that not everyone was taken in by what Storm sold, in fact, more said no than yes.  Why I wonder???

As for choices, you are right, I don't know of all the choices you had.  But, like all people who saw Storm, you did have one choice...do I take their advice or don't I?  As the figures I have used suggest, many more said no than yes.

And at every stage along the line, I assume you could have said either yes or no to any recommendations made by Storm.  If you didn't have the choice, and were forced to do things you didn't want to, then I would think, as suggested previously, such action by Storm would be against the law and should be taken higher.


----------



## Harleyquin (21 January 2012)

SJ  exactly what we were told and exactly what questions we asked is something that I would only feel comfortable discussing if I had a taped record of our meeting with our storm advisor.  There is a lot I've forgotten however we made sure we asked what we thought were the right questions and we were obviously given the 'right' answers.

I thought they were genuine and had no idea that we had to do all this research and all these other things we are now being told by other posters on this forum, that we should have done.  GG said two plus years ago in a post to me "they fed you crap and you swallowed it", I felt sick and angry when he said that.  Today I know it's true, that's exactly what happened.

I have never "only" blamed the banks involved with storm.

If c**p is what storm were spruiking, then the financial experts at the banks didn't swallow it they supported it to the tune of billions of $$$ - the question I feel justified in asking is "WHY".


----------



## Tysonboss1 (22 January 2012)

Harleyquin said:


> TB again you've posted several extremely uneducated posts.  Tell me, what is the roll of a financial advisor?  You obviously have no idea.
> 
> I used to think financial advisors  were highly educated people who were 'trained' to offer legitimate financial advice.  So I made a huge mistake in believing that and them.  Today I know different and it's people like you and your attitude that reinforce this belief.
> 
> Are you happy with these people masquerading as financial advisors, do you think what they are doing is criminal or don't you care either way.




I just want to say one thing from the out set, I don't use financial advisors, I have never met with a financel advisor and I don't plan on ever using a financel advisor.

But, I would suggest to people that when selecting a financel advisor if at any stage they feel like they are being sold or the advisor acts more like a sales man they should get up and leave.

An advisor should have the heart of a teacher, and you should feel like you are being taught. You should not feel like you are receiving a sales pitch. You should leave any meeting with the feeling that you have a better understanding of your operation and have leeds for you to go investigate further, possibly with other parties such as your acccountant, solicitor or trusted friend or council.

As a business man I can say that there have been occassions where I have gone to others for advice ( accounting, legal, technical, logistical etc etc), But I have never gone to somebody and asked them how to make money, or asked them to make money for me.  

The below video is a a reading from benjiman graham, who died in 1972 he wrote the work many years prior in 1949, Please watch at least the first 3 mins, I think you will learn somthing, Perhaps if you read this book prior to your storm meetings you would be better off now.


----------



## Tysonboss1 (22 January 2012)

Harleyquin said:


> .
> 
> If c**p is what storm were spruiking, then the financial experts at the banks didn't swallow it they supported it to the tune of billions of $$$ - the question I feel justified in asking is "WHY".




Banks are in the business of lending money, They are not sooth sayers, They can't tell the future directions of markets, If you go to a bank and dazzel the guys that hold the purse with charts and data and reasoning as to how you can make money they will lend you money for a fee.

Offcourse they are going to try and set it up so that their losses are minimised should your plans fail, But it is not up to them to decide which industries get funded and which don't, they simply dole out the credit as best they can, and earn a margin on it, 

If the bank were and expert in the industry they were lending to then they wouldn't need you as an intermediary, they would just make direct investments in it and keep the whole profit rather than just an interest margin.

If you want to put your house up as collateral to borrow $100K to go and blow on alcohol and strippers, as long as the bank feels they can't lose because they can take your house they will lend the dollars, They wouldn't see a difference between that and gambling on the market, or the ponys for that matter,


----------



## Harleyquin (22 January 2012)

Some actions have already been taken against some of storms advisors.  If most of us have our way they will all have some action taken against them unless they can prove that they've done nothing wrong.

In hindsight I can now see what you are saying, back then I didn't know they weren't on the level.  If I'd known all this back then I would have done exactly as you say and continued to walk.  Unfortunately for us I wanted them to help us formulate a suitable plan for us, back then I thought that was the responsible thing to do.  As it turns out, if we had been irresponsible and not sought financial advice we would be a whole lot better off and not sitting here having to defend ourselves three years down the track, for trying to do the right thing.

Consequently I'm now happy to be irresponsible when it comes to investments and just enjoy life one day at a time.  To me it's just not worth the hassle.

If anyone is reading this and considering seeking financial advice, be warned, this could be you in a couple of years time...


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## Harleyquin (22 January 2012)

TB the banks involved dealt directly with Storm.  Storm clients had nothing to do with any of the banks, we didn't see anyone or talk to anyone from the bank.  Whatever happened, happened between them.

Most of what you've said would possibly apply had we dealt with them directly, though I'm not too sure there.  Banks do have lending criteria...normally...but not in the case of storm and their clients apparently.  No doubt the courts will sort this out.


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## Tysonboss1 (22 January 2012)

Harleyquin said:


> Your post regarding looking at bank shares over five years upset many.  Personally I wish many of those I've spoken to would post then perhaps you, B and co would realize just how out of touch you are .




How the Hell could julias rational break down of the facts about bank returns upset anybody?


----------



## Tysonboss1 (22 January 2012)

Harleyquin said:


> If most of us have our way they will all have some action taken against them *unless they can prove that they've done nothing wrong*.




Gee,... I didn't realise your lynch mop were above the law,

Are they not innocent until proven guilty, Not guilty unless proven innocent.


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## shibby (22 January 2012)

Harleyquin said:


> SJ  exactly what we were told and exactly what questions we asked is something that I would only feel comfortable discussing if I had a taped record of our meeting with our storm advisor.  There is a lot I've forgotten however we made sure we asked what we thought were the right questions and we were obviously given the 'right' answers.
> 
> I thought they were genuine and had no idea that we had to do all this research and all these other things we are now being told by other posters on this forum, that we should have done.  GG said two plus years ago in a post to me "they fed you crap and you swallowed it", I felt sick and angry when he said that.  Today I know it's true, that's exactly what happened.
> 
> I have never "only" blamed the banks involved with storm.






If most people did check out Storm through the FPA (which one would)


The following was posted by sqwark7600Skeptok on the
20th-February-2009, 08:00 AM 	  #1168 
________________________________________
Quote:
Originally Posted by Gerkin  


From the FPA site:
“*The FPA is the peak professional body for financial planning in Australia, representing approximately 12,000 individuals and businesses. Over 9,000 of its 12,000 members are practising financial planners. The FPA and its members strive to improve the financial wellbeing of all Australians.
The FPA provides the leadership and professional framework that enable members to deliver quality financial advice to their clients. FPA members include financial planners from a variety of backgrounds and disciplines, including over 5,500 CERTIFIED FINANCIAL PLANNER™ professionals – the global symbol of excellence in financial planning. All FPA practitioner members are bound by a code of ethics, high professional standards and must meet continuing professional education requirements.”
*
I think most reasonable people would accept that this is a reasonable straw for a potential Storm Client to clutch at don’t you think? (My bold highlight).
20th-February-2009, 11:53 AM 	  #1170


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## Judd (22 January 2012)

Tysonboss1 said:


> How the Hell could julias rational break down of the facts about bank returns upset anybody?




Emotional triggers emanating from emotionally charged situations.  Fight or flight reaction to psychological stress or physical threat.

It's an individual thing.


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## shibby (22 January 2012)

Harleyquin said:


> SJ
> 
> I have never "only" blamed the banks involved with storm.
> 
> If c**p is what storm were spruiking, then the financial experts at the banks didn't swallow it they supported it to the tune of billions of $$$ - the question I feel justified in asking is "WHY".




Now lets talk about the banks to Quote Steve Borden

25th-February-2009, 09:39 PM 	  #1240 

Steve Borden 

Join Date: Feb 2009
Posts: 18 	 Re: Storm Financial Group 
________________________________________


Quote:
Originally Posted by Julia  
Do you have proof that the bank 'made up the information'?


From the instances I have seen over many years it is difficult to draw any other conclusion. Income figures are clearly made up when they have no basis in fact, and no they were not low doc loans. 

For example when the figures provided by the client to storm and then to the Bank are not the same as those that appear on the application but a self-funded retiree nevertheless meets the required commitment level. 

Or when the income amounts are based on a lender using projected income from an investment portfolio but neglecting to factor in the margin loan expense.

Or even using a projected income that includes income and growth to service the loans but not factoring in either redemption of the investment or an increasing margin loan.

As to evidence, the lack of substantiation of the figures used will be sufficient. 
The onus will be on the Bank to prove their figures were correct.

What's in it for the Bank, market share and profit, 
what's in it for the Banker, bonuses and promotion. 
In the latter instance hopefully by the time it hits the fan you have moved on and it's a problem for the guy that replaced you.

Of course there was no thought to it going wrong to the extent it did so as long as the Bank got its money back that's all that ever really matters.

The Banks never really had a relationship with the client, it was simply transactional from their perspective, the relationship was run by storm and the Bank's were not 'allowed' to cross-sell to these clients. There was also a lingering view that when the next increase was being sought the deal would be churned to the Bank with the best offer. So to keep up your numbers you needed to do every deal you could to keep storm happy.



16th-February-2009, 11:38 AM 	  #1092


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## shibby (22 January 2012)

I pulled this one out of my archives
notice we have been hearing the same ol same ol since 2008

read what Cosgrove Fenton has to say 


posted by
sqwark7600 
Skeptok



Join Date: Aug 2008
Posts: 78 	 Re: Storm Financial Group 
________________________________________


Quote:
Originally Posted by Cosgrove Fenton  
As stated by others all industries will have "bad apples". Victims of a car crash - caused by someone driving recklessly/speeding, don't look to sue the police for not stopping the negligent driver, or the fuel company who provided the petrol. "S*&% happens" Storm clients have to blame Storm (the driver) and no one else. Plenty of people (outside of the Storm vehicle) have margin loans and only a small percentage of them have suffered the damage we are seeing when compared to Storm passengers.


I am aware of that. You miss my point and it is:
that FPA endorsement of Storm and the presence of CFPs in their organistaion would lead clients to the conclusion that Storm would be following the FPA code. 
This is a valid legal argument as to why they should not shoulder the full responsibility for the tragedy (and isn't that their task at present). 
How were they to know Storm was a bunch of rotten apples? 
Let's face it, if EC had a basic exit strategy and reasonable risk management for his clients let alone himself, today he would be a hero and the global financial guru of the year.

That was 2008
In 2009 I saw my Solicitor and he told me then to be patient and wait because I would be very surprised because time has a way of revealing information.
My conclusion - Storm Financial was an iceberg you only see a small part of an iceberg on the surface the bulk is hidden from view and what is there beggars belief.


----------



## bunyip (22 January 2012)

Harleyquin said:


> As for agreeing with someone else on this forum I've seen where once again you've agreed with bunyips load of rubbish re the banking industry selling their "commodities".  Do you really think our financial industry compares with our petroleum industry?  Obviously you do.  Well done!!!




'Commodities'? I said no such thing. Get your facts straight Harleyquin, and stop getting all melodramatic and emotional and irrational....._*again.*_


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## shibby (22 January 2012)

bunyip said:


> 'Commodities'? I said no such thing. Get your facts straight Harleyquin, and stop getting all melodramatic and emotional and irrational....._*again.*_




*In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. 
*

To quote Bunyip from the 14th January #6482
About 15 years ago a bloke I know became a financial planner/investment adviser with Westpac. He’d had no previous experience in that field – Westpac put him through a course lasting about four weeks, at the end of which time he was supposedly qualified to advise people on how to invest their money. 
Although Westpac called him a financial planner, he was barely involved in most of the usual services provided by financial planners – *basically he was just a commission salesman for Westpac’s financial products. 
*In that respect I guess he wasn’t much different to Storm’s advisers who masqueraded as financial planners, but were in fact just selling a product and, presumably, getting a cut of the 7% upfront fee. 

I know I have a mere BEc but to me is sure as hell looks like Westpacs Financial Product is a commodity if you look at the defenition above

My Goodness gracious me, Bunyip "Laddy", your not infallible maybe you can't walk on water after all?


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## Solly (22 January 2012)

shibby said:


> _Then we would probably be accused of being egocentric.
> _
> What! your not?
> 
> ...




shibby

It's great to see you back, I hope that other ex-clients follow and start posting. I too hope that this forum is of benefit to those directly impacted by the Storm collapse. I also hope that the white noise and static of apportioning  blame and demands of public utterances of fault acceptance skips off the ionosphere and heads into the ether.

In the present environment with the current matters that are being examined and those that are before the bench I believe it is very prudent that no party makes any admissions of fault. In our society the apportioning of blame and application of penalties and sentencing lie with others to apply. The court of ASF holds no authority but the written comments and postings can be called upon if others feel that their reputation has been injured by exposing them to contempt or ridicule. 

My interests in the Storm collapse are around the mechanisms and environment that existed that allowed this collapse to eventuate. I hope that there are others who are reading this thread who will make the decision to contribute and be part of the online history of this saga. 

A few new posters and the return of some old would greatly invigorate the discussion. I have the feeling that this thread may even be a point of current interest for some legal/media study students and their academics ...

S


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## Julia (22 January 2012)

> Tysonboss1



How the Hell could julias rational break down of the facts about bank returns upset anybody?


Judd said:


> Emotional triggers emanating from emotionally charged situations.  Fight or flight reaction to psychological stress or physical threat.
> 
> It's an individual thing.



Judd, could you explain the 'psychological stress', or even more the 'physical threat'
incurred in reading an explanation of how to access the share price of a company?

Such information being offered in response to someone expressing confusion because they did not know whether to believe a claim that bank shares had done very well.


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## bunyip (22 January 2012)

shibby said:


> *In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs.
> *
> 
> I know I have a mere BEc but to me is sure as hell looks like Westpacs Financial Product is a commodity if you look at the defenition above
> ...




If a 'commodity' is what you want to call the products that banks sell, no problem.


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## shibby (22 January 2012)

Solly said:


> shibby
> 
> 
> My interests in the Storm collapse are around the mechanisms and environment that existed that allowed this collapse to eventuate. I hope that there are others who are reading this thread who will make the decision to contribute and be part of the online history of this saga.
> ...



I agree wholeheartedly Solly let us all contribute once again and have meaningful discussions and talk about our current problems and the questions that we would like answered there could be someone on this forum that has the knowledge to help we were such a divergent group from all walks of life.

I have a discussion point that I would love to begin with but would be so happy to discuss any thing except how stupid we supposedly are –
that is not an invitation to start that one over again where someone will say I never said that blah; blah; blah.

There is a common thread throughout the knockers of the Stormies that we were greedy.

I am requesting that you leave out the scenario of the “Stormies that had millions and millions of dollars and therefore could have lived off their money if they deposited into a bank account” group that we have heard of time and time again. 

I believe statistically the proportion of that group was at a minimum.

Where is your proof that we were promised an extremely high interest rate to move over to Storm Financial. I have been searching and reading any thing I could possibly read for years and I have no paperwork or memory of anyone saying that they were promised an exorbitant rate of return and that was the reason that they went with Storm.

I would like to eliminate the urban myths that grew around Storm and maybe other people can join in and have a gripe about what particularly gets under their nose as well.


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## Tysonboss1 (22 January 2012)

What is a commodity-

A physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts. 

The price of the commodity is subject to supply and demand.


No I don't think the term can be applied to banking products that can not be bought or sold, and are not identical to other products traded in the markets.


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## Harleyquin (22 January 2012)

I agree with Solly, welcome back Shibby.  I've enjoyed reading your posts it gives some balance to this discussion.

Actually Bunyip I'm sorry to disappoint you, I feel very rational and in control.  Can't remember the last time I genuinely lost my cool.

I did check.  Our storm advisor was a member of FPA.  I/ we are not laws unto ourselves as you would suggest but then neither are you my friend.

I've a question for you and anyone else on here "What is the role of a financial planner/advisor and what are their responsibilities?"


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## bunyip (22 January 2012)

Harleyquin said:


> I did check.  Our storm advisor was a member of FPA.  I/ we are not laws unto ourselves as you would suggest but then neither are you my friend.




I have no idea what you're talking about. But don't bother explaining - I'm not interested.


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## Julia (22 January 2012)

Solly:  if you are going to quote remarks I have made, please do so accurately, attributing what I have said under my name, not - as occurs in your post 6549 - incorporating my comments with those of another poster.

Here is Joe's thread on how to use the Quote Tags.
https://www.aussiestockforums.com/forums/showthread.php?t=2737&highlight=tags


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## shibby (22 January 2012)

Tysonboss1 said:


> What is a commodity-
> 
> A physical substance, such as food, grains, and metals, which is interchangeable with another product of the same type, and which investors buy or sell, usually through futures contracts.
> 
> ...





Sorry your wrong again

Bunyip said
*basically he was just a commission salesman for Westpac’s financialProducts.*

So again another definition of Commodity - An article of trade or commerce especially a product as distinguished from a service

Then go to Westpac on the web and have a look sitting there is a tab that is headed Westpac Products and Services low and behold the heaven opens up with choices


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## Tysonboss1 (22 January 2012)

shibby said:


> I have no paperwork or memory of anyone saying that they were promised an exorbitant rate of return and that was the reason that they went with Storm.
> 
> .




What sort of returns were they suggesting?
What do you consider exorbitant?
What do you consider an acceptable return?


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## shibby (22 January 2012)

Tyson Boss 1

Normally I would have let your last comment pass but I was determined I wouldn't
This is really kindergarten stuff dont you think 
Once again  cant you contribute any thing of importance anything unique


Solly said earlier

"In that direction," the Cat said, waving its right paw round, "lives a Hatter: and in that direction," waving the other paw, "lives a March Hare. Visit either you like: they're both mad."
"But I don't want to go among mad people," Alice remarked.
"Oh, you ca'n't help that," said the Cat: "we're all mad here. I'm mad. You're mad."
"How do you know I'm mad?" said Alice.
"You must be, said the Cat, "or you wouldn't have come here."

We have a chance to improve this forum 
Once again Julia has to snipe at the correct way for quotations on the forum how many times over the last 3 years have you pointed that out? 
It was probably my earlier quote that your referring to anyway

No wonder people dont post you make it impossible for sane people to stay and contribute  - nothing ever changes.


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## shibby (22 January 2012)

Tysonboss1 said:


> What sort of returns were they suggesting?
> What do you consider exorbitant?
> What do you consider an acceptable return?




I will eventually answer your questions but I would like to see first someone who had called us greedy answer my questions.
I would like to ask the questions for a change on why we are greedy. 
You are free to answer your own 3 questions if you would like too.

I commenced with Storm in September 2006 what do you think would be a conservative interest rate return on an investment for that period?


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## Tysonboss1 (22 January 2012)

shibby said:


> Tyson Boss 1
> 
> 1, Normally I would have let your last comment pass but I was determined I wouldn't
> 
> ...




1, I asked three questions, 1 just because I was interested in what storm were promising and 2 questions so I could understand where you were coming from, and what lead you and others to do what you did. there's nothing wrong with me asking a question is there.

2, No, But quoting alice in wonderland is I guess. 

3, All she is saying is, If you quote her just press the quote button and actually get the proper quote, Just don't write her name and write somthing from memory that your putting into your own words. I think you will find that she gives you that courtesy, so why not return it.




shibby said:


> A) I will eventually answer your questions but I would like to see first someone who had called us greedy answer my questions.
> 
> B) I would like to ask the questions for a change on why we are greedy.
> 
> ...




A) Great, I look forward to it.

B) Did I say you were greedy, I don't think I did. 

C) I will, and any others you wish to put my way

D) Well that depends on what sort of investor you are and your skills and knowledge. A defensive investor should really expect a return of more than market average Intrest and dividends, and perhaps the stock component to grow in capital value over time by an amount roughly equal to inflation,

Saying that though, the defensive investor should not be using debt, and should be drip feeding funds into the operation ove time ( dollar cost averaging ). The defensive investor won't have the skill to time the markets.


----------



## Tysonboss1 (22 January 2012)

Tysonboss1 said:


> 1, What sort of returns were they suggesting?
> 
> 2, What do you consider exorbitant?
> 
> 3, What do you consider an acceptable return?




1, N/A ( direct question to storm members )

2, For the defensive investor any return higher than market average capital gains, and cashflow greater than market average interest and dividends.

3, For the defensive investor, Market average capital gains, dividends and interest.


----------



## Solly (22 January 2012)

Julia said:


> Solly:  if you are going to quote remarks I have made, please do so accurately, attributing what I have said under my name, not - as occurs in your post 6549 - incorporating my comments with those of another poster.
> 
> Here is Joe's thread on how to use the Quote Tags.
> https://www.aussiestockforums.com/forums/showthread.php?t=2737&highlight=tags




Julia

I was not quoting you. I've been on this forum since Dec 2008 and made thousands of posts. I fully understand Joe's requirements and accepted conventions relating to the use of quote tags.

I find the tone and your remarks to me about the use of quote tags offensive.

S


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## shibby (22 January 2012)

Dear Tyson Boss1
I guess your last post is your idea of being clever so I feel very sorry for you.

You have criticized us so therefore I thought you would have some knowledge of the process. 
I never said that you said we were greedy and the post was not aimed at you I just simply wanted someone who is the past has called us greedy to give the reasons why they made such a comment.
You really have not made any attempt at any sort of investigation as to what actually happened outside of this forum you have probably scanned a few posts and thought I will get in here and stir a few feathers. I will be able to bluff my way through this because I am a real smart a**e.

This thread has become a competition of who can strip away any sense of what the Stormies do actually say, you nit pick it, turn it into mush and spit it out. 
You take it in turns to decimate people all in the guise of being smart and clever. 
You all seem to feel somehow that you have the upper hand and it makes me laugh

I quoted Alice in Wonderland because this forum is insane there is no commonsense to it no rational thread your like a pack of rabid dogs any morsel that is thrown your way you all dissect it till it makes no sense at all. 

There is a little group who continually trivialise this disaster and the collapse of Storm Financial is a disaster, good ol’ Bunyip will start up once again about the Brisbane Floods and “that is what you call a disaster”.  
Like there is a competition on disasters my disaster is bigger than your disaster. 
Our disaster should not be trivialised if you want to comment educate yourself on what did actually happen.


----------



## Tysonboss1 (22 January 2012)

shibby said:


> Dear Tyson Boss1
> I guess your last post is your idea of being clever so I feel very sorry for you.
> 
> .






Tysonboss1 said:


> 1, N/A ( direct question to storm members )
> 
> 2, For the defensive investor any return higher than market average capital gains, and cashflow greater than market average interest and dividends.
> 
> 3, For the defensive investor, Market average capital gains, dividends and interest.




I simply asked 3 questions, you refused to answer them, But said you wanted me to answer them, So I gave my honest answer. I wasn't trying to be clever or be a smart a**e as you latter said.

Any way, Can you or some other stormy answer question 1 atleast, What return did storm financel say you were looking at making?

This is not a personal question, and please don't take it as a personal attack.

It is simply a straight forward question, 

When sitting down with the advisor, What were the returns they were saying you could make?


----------



## DocK (22 January 2012)

Tysonboss1 said:


> I simply asked 3 questions, you refused to answer them, But said you wanted me to answer them, So I gave my honest answer. I wasn't trying to be clever or be a smart a**e as you latter said.
> 
> Any way, Can you or some other stormy answer question 1 atleast, What return did storm financel say you were looking at making?
> 
> ...




This has been covered many times on this thread already.  Anyone with even a cursory knowledge of Storm would know that there were three or four index funds which simply tracked the performance of the market - therefore there were no promises of exceptional returns.


----------



## bunyip (22 January 2012)

shibby said:


> I know I have a mere BEc but to me is sure as hell looks like Westpacs Financial Product is a commodity if you look at the defenition above




BEc meaning Batchelor of Economics, presumably - is that correct?


----------



## bunyip (22 January 2012)

Harleyquin said:


> I've a question for you and anyone else on here "What is the role of a financial planner/advisor and what are their responsibilities?"




This question has been answered and discussed at length many times on this forum.
I don't think there's anyone on here who doesn't know the answer.
I don't think anyone on here believes that Storm fulfilled their responsibilites as financial planners.

A more pertinent question for you to consider is* 'What is the role and responsibility of a person who consults a financial planner'?*

The people who knew the correct answer to this question are the ones who walked away after looking at the Storm strategy.
The people who didn't know the correct answer are the ones who got sucked in by Storm.


----------



## SJG1974 (22 January 2012)

DocK said:


> This has been covered many times on this thread already.  Anyone with even a cursory knowledge of Storm would know that there were three or four index funds which simply tracked the performance of the market - therefore there were no promises of exceptional returns.




That would be true if gearing were not involved. However as we all know, gearing multiplies the gains and magnifies the losses. You wouldn't gear if you didn't expect to get greater than average returns, otherwise why would you take such a big risk?

I can see why some people would see gearing as the only way they can build a sufficient asset base to provide for a decent lifestyle. However, we know that many Storm investors were independently wealthy before they set foot in Storm HQ. these people had absolutely no need to borrow to build their asset base, yet they not only borrowed, but double geared, building an asset base that was so much more than what they needed. Why on earth would anyone in their right mind take on such a huge risk when they had no need to unless there was some sort of carrot dangled in front of them?

Shibby asked about greed...well isn't wanting more than you need the definition of greed? We have read of multi millionaires risking it all in an attempt to make even more.  Well if that isn't greed then I don't know what it is, other than perhaps the height of stupidity.


----------



## Solly (22 January 2012)

bunyip said:


> This question has been answered and discussed at length many times on this forum.
> I don't think there's anyone on here who doesn't know the answer.
> I don't think anyone on here believes that Storm fulfilled their responsibilites as financial planners.
> 
> ...




bunyip

According to ASIC, these are the responsibilities;

https://www.moneysmart.gov.au/investing/financial-advice/choosing-an-adviser

S


----------



## Julia (22 January 2012)

Solly said:


> Julia
> 
> I was not quoting you. I've been on this forum since Dec 2008 and made thousands of posts. I fully understand Joe's requirements and accepted conventions relating to the use of quote tags.



Why, then, have you so misused them in the post to which I referred where my remarks are included, without attribution, amongst those made by another poster?



> I find the tone and your remarks to me about the use of quote tags offensive.
> 
> S



That's unfortunate.  It doesn't, however, alter my objection to your incorrectly including my remarks in the post from someone else.


----------



## DocK (22 January 2012)

bunyip said:


> This question has been answered and discussed at length many times on this forum.
> I don't think there's anyone on here who doesn't know the answer.
> I don't think anyone on here believes that Storm fulfilled their responsibilites as financial planners.
> 
> ...




That's quite a sweeping generalisation there Bunyip.  Unless you are familiar with all those who both did and did not walk away after looking at the Storm strategy I think you are projecting or making assumptions based on your own beliefs.  Do you have any research to back up your claim that "the ones who got sucked in by Storm" didn't know their role or responsibilities?  Perhaps it might be more accurate to say that just as some FPs are on the level and some aren't, so are some clients more inclined to research the advice given and some less so?   Actually, what are the roles and responsibilities of a person who consults a FP, other than to provide honest and accurate answers to a fact find in order to allow them to formulate an individualised plan of course?  Does the FPA or ASIC have any guidelines on a website that outline what responsibilities the client takes on?  I'm not being snide here, I'm genuinely interested to know if such a guideline exists and maybe should have been provided to prospective clients of Storm?


----------



## Solly (22 January 2012)

Julia said:


> Why, then, have you so misused them in the post to which I referred where my remarks are included, without attribution, amongst those made by another poster?
> 
> 
> That's unfortunate.  It doesn't, however, alter my objection to your incorrectly including my remarks in the post from someone else.




Julia

I have no further comment other than my remarks in my post #6563.

S


----------



## DocK (22 January 2012)

SJG1974 said:


> That would be true if gearing were not involved. However as we all know, gearing multiplies the gains and magnifies the losses. You wouldn't gear if you didn't expect to get greater than average returns, otherwise why would you take such a big risk?
> 
> I can see why some people would see gearing as the only way they can build a sufficient asset base to provide for a decent lifestyle. However, we know that many Storm investors were independently wealthy before they set foot in Storm HQ. these people had absolutely no need to borrow to build their asset base, yet they not only borrowed, but double geared, building an asset base that was so much more than what they needed. [I_*]Why on earth would anyone in their right mind take on such a huge risk when they had no need to unless there was some sort of carrot dangled in front of them?
> *_[/I]
> Shibby asked about greed...well isn't wanting more than you need the definition of greed? We have read of multi millionaires risking it all in an attempt to make even more.  Well if that isn't greed then I don't know what it is, other than perhaps the height of stupidity.




The bolded section has been asked and answered several times, yet clearly you believe there was a carrot dangled no matter how often actual clients tell you otherwise.  That's your right of course, but it is wearying to read it again. 

What is your definition of wanting more than you need?  I don't _need_ to own my home, I could be content to rent - is striving for home ownership being greedy?  I don't _need_ to feed my family nutritious food, we could subsist on McDonalds for less than my average weekly grocery bill - am I being greedy in wanting a good diet?  My kids don't _need_ to go to a good school, but I want to give them the best chance in life that I can - am I being greedy here?  I've never been outside Australia, but would love to broaden my horizons and gain an insight into how other nationalities live - am I being greedy to aspire to overseas travel one day?   I don't _need_ to put myself in a position to help my kids fund their first homes, or leave them a little nestegg, but I'd like to - is this being greedy?  Who are you to tell me I can't have aspirations and dreams anyway?  If wanting more than you need is the definition of greed, I guess you need to clarify exactly what constitutes a _need_ vs a _want_.  A necessity for you might be a luxury for me, or vice versa.  Personally I think a world where nobody aspired to have more than the bare essentials in life would lead to a backward society with no incentives to work hard, no innovations or marvellous inventions etc.


----------



## DocK (22 January 2012)

Julia said:


> Why, then, have you so misused them in the post to which I referred where my remarks are included, without attribution, amongst those made by another poster?
> 
> 
> That's unfortunate.  It doesn't, however, alter my objection to your incorrectly including my remarks in the post from someone else.




I read Solly's post as quoting Shibby's post no. 6524 from a page or two earlier.


----------



## Tysonboss1 (22 January 2012)

DocK said:


> there were three or four index funds which simply tracked the performance of the market - therefore there were no promises of exceptional returns.




The index funds may have been the underlying asset, But they were obviously chasing higher returns or they would not have used leverage.

For example - A person wanting to track an index's performance simply takes their $100K and buys the index, if the index returns 10% they make $10K if it drops 10% the lose $10K 

However an person seeking higher returns takes their $100K adds $900K of debt so their total exposure is $1M, if the market returns 10% the make $100K minus $63,000 interest So their total return on their $100K is $37K = 37% gain.

As the Stormies have learned though, When using debt to seek higher returns means when you lose 30% on that leveraged $1M of exposure it will completely wipe out the $100K capital base and leave you still owing another $200K plus interest.

There is a saying about debt, "If your smart you don't need it and if your dumb you have no business using it


----------



## Julia (22 January 2012)

DocK said:


> I read Solly's post as quoting Shibby's post no. 6524 from a page or two earlier.



 Yes it does.  But about every second line is a comment that I made in an earlier post.
The way the post comes up, it all reads as a post made by Shibby, does it not?

In fact it wasn't at all.  

When you click on the "Reply to Post" and the post in question includes responses to quoted remarks from another poster, it all comes out in the same italics, as is the case in the post from Solly in question.

viz. here is some of the post in question:

Quote Originally Posted by shibby View Post
Then we would probably be accused of being egocentric.
*The above sentence is a response I made earlier.*

What! your not?
*This is from Shibby*

It genuinely puzzles me why you, HQ et al are even members of this forum.
*Again, my remark from an earlier post*

Why are you?
*From Shibby*

Forums are where people come to exchange information, usually with the aim of learning from those who have greater expertise in a particular area.
*Again, my comment from an earlier post*

I'm sure you get the gist.  So it went throughout the whole post.

I am simply asking that if I am going to be quoted, such quotes should be correctly attributed to me.  Is that reasonable, do you think?


----------



## Tysonboss1 (22 January 2012)

DocK said:


> The bolded section has been asked and answered several times, yet clearly you believe there was a carrot dangled no matter how often actual clients tell you otherwise.  That's your right of course, but it is wearying to read it again.
> 
> What is your definition of wanting more than you need?  I don't _need_ to own my home, I could be content to rent - is striving for home ownership being greedy?  I don't _need_ to feed my family nutritious food, we could subsist on McDonalds for less than my average weekly grocery bill - am I being greedy in wanting a good diet?  My kids don't _need_ to go to a good school, but I want to give them the best chance in life that I can - am I being greedy here?  I've never been outside Australia, but would love to broaden my horizons and gain an insight into how other nationalities live - am I being greedy to aspire to overseas travel one day?   I don't _need_ to put myself in a position to help my kids fund their first homes, or leave them a little nestegg, but I'd like to - is this being greedy?  Who are you to tell me I can't have aspirations and dreams anyway?  If wanting more than you need is the definition of greed, I guess you need to clarify exactly what constitutes a _need_ vs a _want_.  A necessity for you might be a luxury for me, or vice versa.  Personally I think a world where nobody aspired to have more than the bare essentials in life would lead to a backward society with no incentives to work hard, no innovations or marvellous inventions etc.




Here is Buffett explaining a topic you hit on here. he is talking about LTCM who basically did what storm did x1000 in the late 90's

I think the test whether it is greed or not is when you are risking things you need eg, your home for something you don't need, A holiday or a deposit on a kids home. There is nothing wrong with aspiring to get those things, but taking large risks and laying things you rely on down to gamble to get them is silly


----------



## Solly (23 January 2012)

DocK said:


> That's quite a sweeping generalisation there Bunyip.  Unless you are familiar with all those who both did and did not walk away after looking at the Storm strategy I think you are projecting or making assumptions based on your own beliefs.  Do you have any research to back up your claim that "the ones who got sucked in by Storm" didn't know their role or responsibilities?  Perhaps it might be more accurate to say that just as some FPs are on the level and some aren't, so are some clients more inclined to research the advice given and some less so?   Actually, what are the roles and responsibilities of a person who consults a FP, other than to provide honest and accurate answers to a fact find in order to allow them to formulate an individualised plan of course?  Does the FPA or ASIC have any guidelines on a website that outline what responsibilities the client takes on?  I'm not being snide here, I'm genuinely interested to know if such a guideline exists and maybe should have been provided to prospective clients of Storm?




DocK

I got a tweet this morning from my Stormer mate with this link to ASIC's *Getting Advice *booklet;

https://www.moneysmart.gov.au/media/276435/getting-advice.pdf

He is quite amused by this on page 5.

An advisory business that gives personal advice must:

 give personal advice that suits you
 take legal responsibility for its staff and representatives
 act efficiently, honestly and fairly
 meet standards designed to protect you against 
something going wrong

I've posted this here hoping this will be a catalyst for him to join this forum so he can add further comment and opinion to this thread. If he doesn't join and comment, what do others think about the above from ASIC?


----------



## Joe Blow (23 January 2012)

It appears that this thread is getting derailed by too much angst and unnecessary provocation and bickering. I'm not going to go pointing fingers, I just want it to stop now and for the discussion in this thread to return to the topic at hand: Storm Financial.

This thread is a very useful resource for those following how the whole Storm Financial debacle is unfolding and I would hate to see its usefulness (and the quality of the discussion) diminish due to unfortunate personality clashes.

I will be monitoring this thread a little closer in the coming days and I sincerely hope that there will be no need for me to intervene further.

Back on topic please ladies and gentlemen, and lets keep it civil. 

Thank you all for your co-operation.


----------



## Solly (23 January 2012)

Joe Blow said:


> It appears that this thread is getting derailed by too much angst and unnecessary provocation and bickering. I'm not going to go pointing fingers, I just want it to stop now and for the discussion in this thread to return to the topic at hand: Storm Financial.
> 
> This thread is a very useful resource for those following how the whole Storm Financial debacle is unfolding and I would hate to see its usefulness (and the quality of the discussion) diminish due to unfortunate personality clashes.
> 
> ...




Thanks Joe, 
There are some imminent major milestones in this saga approaching and this forum will be an invaluable platform for open public discussion and dissection of the impacts of the events.

S


----------



## SJG1974 (23 January 2012)

DocK said:


> The bolded section has been asked and answered several times, yet clearly you believe there was a carrot dangled no matter how often actual clients tell you otherwise.  That's your right of course, but it is wearying to read it again.
> 
> What is your definition of wanting more than you need?  I don't _need_ to own my home, I could be content to rent - is striving for home ownership being greedy?  I don't _need_ to feed my family nutritious food, we could subsist on McDonalds for less than my average weekly grocery bill - am I being greedy in wanting a good diet?  My kids don't _need_ to go to a good school, but I want to give them the best chance in life that I can - am I being greedy here?  I've never been outside Australia, but would love to broaden my horizons and gain an insight into how other nationalities live - am I being greedy to aspire to overseas travel one day?   I don't _need_ to put myself in a position to help my kids fund their first homes, or leave them a little nestegg, but I'd like to - is this being greedy?  Who are you to tell me I can't have aspirations and dreams anyway?  If wanting more than you need is the definition of greed, I guess you need to clarify exactly what constitutes a _need_ vs a _want_.  A necessity for you might be a luxury for me, or vice versa.  Personally I think a world where nobody aspired to have more than the bare essentials in life would lead to a backward society with no incentives to work hard, no innovations or marvellous inventions etc.




In one way or another Dock, I am sure everyone had some sort of carrot dangled in front of them.  Whether it be a self funded retirement, building a massive asset base, tax savings, whatever, it would still be a carrot....otherwise why would you go and pay 7% for Storm to manage your money if you weren't going to get something out of it???

Didn't they dangle some outcome in front of you to get you to pay their fees?

Tax effectiveness?
Asset protection?
Estate Planning?
Wealth creation?

As for greed, the comment you pulled out was based on a definition I found in an online dictionary.  http://www.thefreedictionary.com/greed

I haven't said that everyone who walked into Storm was greedy.  And nowhere have I considered that having aspirations is greedy.

But, as my post said, the reference to greed followed the comment about the independently wealthy and multi millionaires who had no need to gear yet did so.  People like the doctors Frank had alluded to earlier, who had more than enough to live on, to live the kinds of lives that many of us could only dream of, but wanted more.  

If you have $10 million in assets and decide to risk it all by gearing to the gills, why would someone do that, when they could plonk it in the bank, and get $500,000 per year at 5%?  If you don't think thats greedy, then fine.  But I sure as hell do.

Greed motivates a lot of people, we see it every day.  For some people, what they have is never enough.  It is arguable it motivated the Casimatises, and I have no doubt at all that it would have motivated many Storm victims.  But, in reality, who, when they have lost it all, is going to admit they were greedy, when they can blame someone else?


----------



## Julia (23 January 2012)

Joe Blow said:


> I will be monitoring this thread a little closer in the coming days and I sincerely hope that there will be no need for me to intervene further.



Appreciated, Joe.  Thank you.


----------



## maccka (23 January 2012)

Joe Blow said:


> I will be monitoring this thread a little closer in the coming days and I sincerely hope that there will be no need for me to intervene further.
> 
> Back on topic please ladies and gentlemen, and lets keep it civil.
> 
> Thank you all for your co-operation.




:jump: Thank you Joe.  :jump: 

Let calm, sane heads prevail.

cheers
Maccka


----------



## Harleyquin (23 January 2012)

Bunyip once again you've avoided giving me a specific answer to my question.  All I asked for was an answer from you.  

Thank you Solly to your Stormer mate he and/or she have answered my question specifically.

These people Bunyip do have responsibilities and your non specific 
/ railroading reply means absolutely nothing to anyone wanting a specific answer.

It's very important that we and future clients of financial planners know exactly where we stand on this issue.

Julia you mentioned Sir O's educational thread regarding learning about investing.  I agree he does a great job and would recommend visiting this thread.

Just a suggestion, perhaps you and others with investment experience might suggest suitable threads for stormies and others to visit on the ASF forum.

This is a great forum for stormies and those interested and I don't know of another public forum that offers us this service.


----------



## DocK (23 January 2012)

SJG1974 said:


> In one way or another Dock, I am sure everyone had some sort of carrot dangled in front of them.  Whether it be a self funded retirement, building a massive asset base, tax savings, whatever, it would still be a carrot....otherwise why would you go and pay 7% for Storm to manage your money if you weren't going to get something out of it???
> 
> Didn't they dangle some outcome in front of you to get you to pay their fees?
> 
> ...




OK, let's get the discussion of vegetables over first:  if dangling any outcome in front of a client in order to get them to pay fees for service/advice, be it wealth creation, estate planning, tax minimisation etc constitutes your definition of "taking on risk because a carrot was dangled in front of you", then by extension this could apply to just about any client of any financial planner, not just those that were clients of Storm.  If I were to go to Doobsy and pay his fee for advice in order to have him draw up a financial plan for me - does this not consitute him "dangling a carrot" in return for a fee?  I find the whole endless discussion of ex-Storm clients paying exhorbitant fees or taking on huge risk in the pursuit of some elusive "carrot" to be a bit pointless and silly.  Isn't everyone who takes any steps towards their financial future chasing some outcome?  

Likewise with greed.  I doubt there are any ex-storm clients who are not sick to the back teeth of this endless and repetitive theme re greed.  Most sensible people on this thread would agree that the average ex-Storm client was not what would normally be considered wealthy prior to investing with Storm, although some undoubtedly were.  I say "so what?".  If I wanted to risk my home with the sole goal of dressing myself in Gucci or Armani, globetrotting 1st class while dining on caviar, so what?  Does that mean that I wouldn't deserve to be compensated if someone had acted illegaly in their dealings with me because I was "greedy" and therefore "bad"?  If I were a retired pensioner who only wanted enough to put cat food on the table for the rest of my days am I then more deserving because I'm clearly not "greedy" and therefore "good", even if the same entity acted towards me in exactly the same way as those bad & greedy people who already had enough to live comfortably??

I'd argue that anyone who makes an investment, be it purchasing an investment property, investing in shares, searching out the best term deposit rates - whether using leverage or not - is doing so in order to put themselves in a better financial position than their current one, or to preserve what they have.  If that person doesn't need to do so in order to live, what is their motivation?  How can you draw a line and say one is greedy but another not?  Is the line dependant on whether they were already better off than you?  Or is it based on your own view of what constitutes a comfortable standard of living and what is excessive?  Is it evil or wrong for a millionaire to want to increase their wealth, but OK for someone of more modest means?  In the case of Storm - _if_ a bank is found by our legal system to have broken a law - should only those who are not judged as having been _greedy_ be compensated as directed by the court?  This whole line of thought about greed irritates the hell out of me - it's as if a certain segment of society have decided to claim the moral high ground, based on their own beliefs and values, and judge as _greedy_ and therefore unworthy those who they deem already had more than enough to begin with.  As if somehow the designation of _greed_ should absolve illegal action because they somehow deserved it!  Smacks of Tall Poppy Syndrome to me, and I find the concept to be totally irrelevant to discussions of the legal proceedings re Storm as a client's motivations have no bearing on the legal issues so far as I know.

Those who have read some of my past posts will know that I personally certainly wasn't what most would consider anywhere near wealthy prior to investing with Storm - but my point is it shouldn't matter.  I'd advise any ex-client to value only the opinions/judgements of yourself and those who matter to you.


----------



## bunyip (23 January 2012)

DocK said:


> The bolded section has been asked and answered several times, yet clearly you believe there was a carrot dangled no matter how often actual clients tell you otherwise.  That's your right of course, but it is wearying to read it again.
> 
> What is your definition of wanting more than you need?  I don't _need_ to own my home, I could be content to rent - is striving for home ownership being greedy?  I don't _need_ to feed my family nutritious food, we could subsist on McDonalds for less than my average weekly grocery bill - am I being greedy in wanting a good diet?  My kids don't _need_ to go to a good school, but I want to give them the best chance in life that I can - am I being greedy here?  I've never been outside Australia, but would love to broaden my horizons and gain an insight into how other nationalities live - am I being greedy to aspire to overseas travel one day?   I don't _need_ to put myself in a position to help my kids fund their first homes, or leave them a little nestegg, but I'd like to - is this being greedy?  Who are you to tell me I can't have aspirations and dreams anyway?  If wanting more than you need is the definition of greed, I guess you need to clarify exactly what constitutes a _need_ vs a _want_.  A necessity for you might be a luxury for me, or vice versa.  Personally I think a world where nobody aspired to have more than the bare essentials in life would lead to a backward society with no incentives to work hard, no innovations or marvellous inventions etc.




I don’t think we need to get too detailed in our definition of greed.

 Frank tells us that 75% of Storm investors were self-funded retirees. I doubt his figures, but it doesn’t really matter what the figure is.
 A comfortable and debt-free self-funded retirement is what many people aspire to. But some retirees weren’t satisfied with having achieved this position, so they attempted to substantially boost their already adequate financial position by adopting Storm’s strategy of mortgaging their homes and gearing heavily into the stockmarket.
Now why would any self-funded retiree do this? Pride? Prestige? GREED??
Frank and others strongly reject any suggestion of greed, yet have been unable to put forward any other explanation. Frank admits that it was unnecessary to mortgage his house. Why do it then??
Until he or someone else can explain why they risked everything by investing through Storm when they had absolutely no need to, greed will continue to be suggested as the prime motivation.

I do of course realise that some Stormers were not self-funded retirees and were not motivated by greed.


----------



## Harleyquin (23 January 2012)

Look at the prime motivator for seeking financial advice.  Like so many we werent wealthy either.  The biggest motivator for seeking a financial plan at our age was this - we didn't have enough money to retire on.  Approaching retirement is a scary thing for most of us, we don't know what we need.  

We've been concentrating on working, bringing up our families etc and all of a sudden the next thing on the horizon is retirement.

There are many articles in the print media on what to do to solve this problem and one of the main ones are 'to seek financial advice from a qualified financial planner'

Inflation, is also a problem, over a period of twenty years is our little nest egg going to last the distance?

If the figures we read are correct than less than 1% of the Aussie population will retire comfortably.


----------



## SJG1974 (23 January 2012)

DocK said:


> Isn't everyone who takes any steps towards their financial future chasing some outcome?




No doubt.  Whenever anyone hands money over for anything they expect an outcome I would think. And that outcome would be relative to what they pay to get it.



DocK said:


> I find the whole endless discussion of ex-Storm clients paying exhorbitant fees or taking on huge risk in the pursuit of some elusive "carrot" to be a bit pointless and silly.




But isn’t that pretty much at the heart of why people signed up and why they are where they are?  I mean, every person who went in there, everyone, would have had an expectation that they would get something for their fees.  Everyone.  Doesn’t matter if it was $2,000 or $200,000, everyone would want some kind of a return on their investment.

Typically, the higher the fee, the more you expect in return (and by more I don’t necessarily mean investment return).

Back to the original question which was posed by another poster….just what exactly was it that Storm told clients they would get for their fees? How did someone handing over say $100,000 in up front fees reconcile that with the value they were getting?  How could Storm sell that without dangling a carrot of some description?

If I went to doobsy and he charged me $5,000 for advice which, with some strategic planning, could save me $5,000 per annum in tax, then as long as I knew it was legit, I would pay it in a heartbeat.  However, if he charged me $5,000 to save me $200 a year in tax, then I would probably walk away.

You said previously Storm didn’t dangle any carrot….



DocK said:


> The bolded section has been asked and answered several times, yet clearly you believe there was a carrot dangled no matter how often actual clients tell you otherwise.  That's your right of course, but it is wearying to read it again.




Well, if that is the case, then people were, pardon my French, bloody stupid to pay such fees with no expectation of a return on their investment (fee).


As for greed, I am not interested in debating who is greedy and who isn’t, or what circumstances constitute greed and what don’t.  Irrelevant I would have thought. I think this has been dragged beyond my initial comment on greed, which was:



SJG1974 said:


> Shibby asked about greed...well isn't wanting more than you need the definition of greed? We have read of multi millionaires risking it all in an attempt to make even more.  Well if that isn't greed then I don't know what it is, other than perhaps the height of stupidity.




I have clarified where I got the definition from (I didn’t make it up), and as quoted above, when people who have more than enough are prepared to risk it all to have even more, then that is greed in my book. You take the risk, you accept the consequences.  That’s life.

Like the whole line about greed irritates the hell out of you, the whole line of “I didn’t know borrowing against my house and then gearing again was risky” irritates the hell out of me.

You have drawn the link between greed being bad and not being greedy being good, and that the bad should be absolved of legal action, not me. Not sure how you draw that conclusion.

The courts will determine whether laws were broken, not this forum, and the compensation to be made, whether these people were greedy or not.


----------



## DocK (23 January 2012)

bunyip said:


> I don’t think we need to get too detailed in our definition of greed.
> 
> Frank tells us that 75% of Storm investors were self-funded retirees. I doubt his figures, but it doesn’t really matter what the figure is.
> A comfortable and debt-free self-funded retirement is what many people aspire to. But some retirees weren’t satisfied with having achieved this position, so they attempted to substantially boost their already adequate financial position by adopting Storm’s strategy of mortgaging their homes and gearing heavily into the stockmarket.
> Now why would any self-funded retiree do this? Pride? Prestige? GREED??



Why does it seem to matter so much?  What relevance does it have to the issue of whether any banks acted wrongly?  If I am full of pride or greed does that mean a bank has the right to act illegally or unethically toward me?  


> Frank and others strongly reject any suggestion of greed, yet have been unable to put forward any other explanation. Frank admits that it was unnecessary to mortgage his house. Why do it then??
> Until he or someone else can explain why they risked everything by investing through Storm when they had absolutely no need to, greed will continue to be suggested as the prime motivation.
> 
> I do of course realise that some Stormers were not self-funded retirees and were not motivated by greed.



Why should any of us need to explain our motives to anyone but those we feel a duty towards? If I'm as greedy as hell or live like a monk, what business is it of anyone else's?  The law shouldn't care either way.  I just don't "get" this insistence for ex-storm clients to have to offer up their personal motivations or attitudes re guilt/blame - I don't believe this thread should be about the "worthy" judging those that invested through Storm.  I think we can all agree that the Cassimatii were strongly motivated by greed, but it wasn't their greed as such that led to such a disaster in my mind - more it was their lack of ethics, dishonesty, massive ego and lack of judgement.  It is possible to be both greedy and ethical, just as some people who would no doubt be labelled as "greedy" also donate considerable sums to charity and contribute positively to the economy.  

If the discussion could move towards the legalities of the Storm collapse, rather than an insistence on ex-clients accepting some arbitrary % of blame upon themselves, the thread could perhaps move in a much more interesting and informative direction for most.  I couldn't care less what motivated Frank, HQ, Shibby, Mindstorm or any of the other ex-Storm clients that come to mind, as I don't consider it to be relevant to the question of whether the banks have acted illegally or not.  Whether they were rich beyond belief or struggling pensioners makes no difference to me, and I consider it to be none of my business.  As to whether they accept some blame for their situations or not, I don't see why that should be a matter for anyone but themselves and certainly don't feel they need to be answerable to strangers on an internet forum.  

You can, and possibly will, continue to insist on the "mea culpas" you seem insistent on for some reason, but I can't understand for the life of me why it seems so important to you?  Can you perhaps explain why the matter of greed and blame matters so much?  Maybe it would help others on this thread to understand your posts, because I must admit when it comes to motivations I'm struggling to understand yours.  Not that they're any of my business, of course


----------



## doobsy (23 January 2012)

Time to jump in from the darkside again.

Until we know a definitive court answer about the banks irresponsible lending then I think we can't assume.

To back this up can I make this point - If client wants to use ANZ (a bank not supposedly right in bed with storm) for the home loan portion of the process. Storm arrange the paperwork and this is processed. Now ANZ have lent against the home as their was equity to lend. If the client has disclosed a level of income and signed the docs I can't see how that is improper lending. If Storm "fudged" the income by including assumed income from the investments how is ANZ to know this? 

Wait - I read earlier about the fact they didn't consider the margin loan. Well I am pretty sure it didn't exist. It only existed after the client got their hands on the equity and got it invested. Then the margin loan was created. Again, I am pretty sure EC did this in an order not to alarm the banks.

If there was further lending against the home which required more disclosure and the banks became aware of the ML then I can see that there can be argument the additional lend might be improper. Without that knowledge I can't see how they can get in trouble.

As for third party - we didn't deal with anyone at the bank etc etc - neither do most people these days as they use mortgage brokers or the internet. Banks often don't speak with the end client at all. They do take a signed application as proof the client has seen the application and checked it.

I have already outlined how margin loans work and how interest was not a considered cost as it can be capitalised. I won't rehash old posts.

Moving away from Greed - my bigger problem is risk. So far we haven't really seen Storm clients accept they took huge risks with their money. There is a massive difference between having all of your money invested in a share portfolio and having the same portfolio but the money is geared. 

I have always been more interested in hearing from ex clients about how this risk was downplayed so that it was seen as acceptable and encourage them to keep explaining this point to the forum.

For some, greed will be a factor - more more more is a commonly seen driver in my game. For others it was getting to a target and as quickly as possible. Not sure this constitutes greed but we again come down to risk.

Last point - Financial ADVICE. I can laugh at all the FP bashing on here as I know how much value I add. Facts about strategy, legislation etc are facts. How to use them is good advice. Facts about returns are guesses and I don't care how many "years" of historical data is used. Like lightposts, they should be used for illumination and not support. Anyone, anywhere that is telling you what you will earn is a salesman. The only thing I project for clients is income based on current earnings rates. This at least is a guide.

Keep this up though, has been a chuckle a post lately.


----------



## doobsy (23 January 2012)

Sorry

Regarding motivation - ex stormies - it is important.

If I choose to take $300 out of my account and go and try to triple it playing roulette because I want a new $900 flatscreen I just saw rather than waiting another 2 months, saving my money, and buying it from my savings there is a huge difference in the risk I am taking due to motivation. 

I can be motivated to be high risk because I don't want to wait and take the safer option or I can be motivated to be low risk and know I can guarantee I will have the $900 in another 2 months.

Hope that analogy makes some sense. It isn't saying Storm clients were greedy, it is saying that the motivation is an important factor.


----------



## maccka (23 January 2012)

doobsy said:


> Time to jump in from the darkside again.
> If client wants to use ANZ (a bank not supposedly right in bed with storm) for the home loan portion of the process.




ANZ is also involved.  They've just managed to keep outcry to minimum.  OR it's been drowned out by the noise around CBA, BOQ, Macquarie etc.  I think you'll find that there are very few banks that didn't have their noses in the Storm Financial trough.

cheers
Maccka


----------



## doobsy (23 January 2012)

maccka said:


> ANZ is also involved.  They've just managed to keep outcry to minimum.  OR it's been drowned out by the noise around CBA, BOQ, Macquarie etc.  I think you'll find that there are very few banks that didn't have their noses in the Storm Financial trough.
> 
> cheers
> Maccka




Maccka

So if a bank lent to a Storm client that automatically makes it improper lending? Even if they did know the details of the strategy (all of which was legal at the time) how does that make it improper lending?

To my knowledge ANZ offered no kickbacks, no ANZ desktop software was used to revalue homes, lending was done on it's merits. Now if that isn't the case then as I have always said any improper lending needs to be addressed but there is a serious misconception on this forum by some that just because a bank used the opportunity to use Storm clients as a source of new lending that it was done improperly or illegally.

On this note my understanding for BOQ is that they considered Storm clients as a low doc loan, bit like a self employed who doesn't necessarily have proof of income. If they have all the signed disclosures we might see some disappointed clients when the court case finishes up.


----------



## maccka (23 January 2012)

doobsy said:


> Maccka
> 
> So if a bank lent to a Storm client that automatically makes it improper lending? Even if they did know the details of the strategy (all of which was legal at the time) how does that make it improper lending?




Doobsy,

Improper lending is a matter for the courts and various tribunals etc.  I have not passed a judgement on such legal matters other than to say...



maccka said:


> ANZ is also involved.  They've just managed to keep outcry to minimum.  OR it's been drowned out by the noise around CBA, BOQ, Macquarie etc.  I think you'll find that there are very few banks that didn't have their noses in the Storm Financial trough.




I can control what I say but not the way you choose to read it.

cheers
Maccka


----------



## shibby (23 January 2012)

doobsy said:


> Time to jump in from the darkside again.
> 
> Until we know a definitive court answer about the banks irresponsible lending then I think we can't assume.
> 
> ...



*18th August 2009 ANZ’s written Submission #379 to the Parliamentary Inquiry and it is (Page 29)*
Review Methodology 
Our review team analysed the lending files of the identified customers to assess the
quality of the credit decisions and whether they accorded with ANZ’s credit policies at
the time. We are keeping ASIC apprised of the review process and its findings.
Key Findings
(i) Customers
The review found that the lending was predominantly by way of home loans secured
against property. There were also a small number of personal loans and business loans, which we are reviewing to determine whether they were used for Storm investments. ANZ did not provide margin loans to these customers. Of these loans we have determined that, in some cases, the lending decisions did not comply with ANZ’s credit policies.
Following the review of the 160 customer files, we have determined that the lending
decisions for a small number of customers did not comply with ANZ’s credit policies
and we are undertaking further review to assess whether others could also be in that
group.
(ii) ANZ’s relationship with Storm
The review also identified that these were isolated cases and not part of a formal
relationship with Storm Financial. At no time did ANZ have a formal relationship with
Storm.
ANZ was approached by Storm in November 2007 seeking a formal referral arrangement. ANZ declined on the basis that the Storm ‘business model’ was not
compatible with ANZ’s approach to lending. For example, Storm’s preferred approach
was that Storm representatives would:
 explain the bank’s lending documentation to customers;

 provide the bank with instructions regarding a customer’s account maintenance (.e. renewals);

 would arrange for the customer’s 100 point identification check to be completed;

and;

 expect the bank to provide a quote for a customer’s lending requirements prior to a full application having been submitted.
On the basis that these requirements were unacceptable to ANZ, it was agreed that ANZ could not work with Storm.

What I would like to point out now is 
Storm’s preferred approach was exactly how it was working in 2006 at the time my loan was approved.

*This transcript is from the cross examination of ANZ’s representative Mr. Graham Hodges, Deputy Chief Executive Officer, ANZ Banking Group when the Enquiry sat in Melbourne.
[/B]CHAIR- Can you clarify for us that all of the applications that came through ANZ in terms of Storm were done directly by investors/clients themselves, or were some of those
representations or applications, if you like, made on behalf of clients by a Storm representative or a Storm officer?

Mr. Hodges- We have a small number of customers who effectively were Storm customers and Storm sent the loan applications to the bank. Those loans were processed and we do know of a number of loans that were approved that way. We had one loan officer who operated in one of our branches in Queensland who had an informal relationship with Storm as a referral arrangement. We found out about that. When I say ‘we’ did, the loan officer’s supervisor found out about that. 
That approach was not in keeping with ANZ’s normal operating procedure. 
That loan officer was investigated for her lack of compliance and ultimately was disciplined.  
We had our internal investigations people go through the files there and we found that a number of those files were processed in a way that was not consistent with ANZ’s normal operating procedures.
That individual, as I said, was disciplined and ultimately resigned from the bank.

Wait - I read earlier about the fact they didn't consider the margin loan. Well I am pretty sure it didn't exist. It only existed after the client got their hands on the equity and got it invested. Then the margin loan was created. Again, I am pretty sure EC did this in an order not to alarm the banks.
 
What about if the finance from the intended margin loan had been included as an assett for example sitting in a non existent bank account?
But the monthly expense of that margin loan was ignored.

As for third party - we didn't deal with anyone at the bank etc etc - neither do most people these days as they use mortgage brokers or the internet. Banks often don't speak with the end client at all. They do take a signed application as proof the client has seen the application and checked it.
 
But what if the client has never seen the assett & liabilities form.

This is all strictly hypothetical of course.*


----------



## Tysonboss1 (23 January 2012)

DocK said:


> 1, If I wanted to risk my home with the sole goal of dressing myself in Gucci or Armani, globetrotting 1st class while dining on caviar, so what?  Does that mean that I wouldn't deserve to be compensated if someone had acted illegaly in their dealings with me because I was "greedy" and therefore "bad"?
> 
> 2, If I were a retired pensioner who only wanted enough to put cat food on the table for the rest of my days am I then more deserving because I'm clearly not "greedy" and therefore "good", even if the same entity acted towards me in exactly the same way as those bad & greedy people who already had enough to live comfortably??
> 
> 3, I'd argue that anyone who makes an investment, be it purchasing an investment property, investing in shares, searching out the best term deposit rates - whether using leverage or not - is doing so in order to put themselves in a better financial position than their current one, or to preserve what they have.




1, Firstly there is nothing wrong with gambling, If thats what you want to do. But if you choose to gamble, you have to be prepared to face the outcomes. And kicking and screaming when to ball lands on red is a bit off, even if you can catch someone out on a technical detail somewhere does not mean they should be hung, It's like a drink driver blaming a crash on the council because the stop sign was a little to far to the left.

2, The problem with the greed side of things is not the moral issue. The problem is that it lured people into chasing returns higher than they could have expected from a simple interest and dividend returns. when they were attracted to the scheme by the offer of a few extra % points of possible gain, that was greed working, had they been happy with a lower return, A much more risk averse stratergy could have been used.

3, Yes, But there is a big difference between deploying money into an investment following sound investment principles vs Trying to play catch up and making big heavily leveraged bets that the market will go one way or the other.

Anyone who decides to take on debt and buys a House, a business or a share in a business where they can only make money if the price goes up within a given time frame, and will loss their intial capital if the price goes down is gambling. 

Here is a lesson, All most all debt based stratergies are based on outright speculation and are a gamble where you can lose a large majority of you initial capital over a very short time frame.


----------



## doobsy (23 January 2012)

Hi shibby

Thanks for posting that. 

Your first questions was:

What about if the finance from the intended margin loan had been included as an assett for example sitting in a non existent bank account?
But the monthly expense of that margin loan was ignored.

Answer: Could not be done as I see it. A margin loan requires assets to back it and as the banks protection. For instance I can't go and get a $100,000 margin loan without putting up some money first. The only way I could see this happening is if say a clients super was drawn, the margin loan set up and an amount borrowed against the original equity (the super). If the home loan was then applied for then you could say there was an asset but would also have to disclose the liability.

By getting the home loan first it meant Storm clients didn't run into any troubles with this disclosure. Where it all went haywire was the "assumed" return on the investments. The "assumed" return at best should have included dividends/distributions but instead seemed to include an amount of "income + growth" based on historical bull market returns.

If the client never saw the income figure or the assets and liabilities forms then they should never have signed. I know this happened and I don't know what else to say. My question back is how did the bank know the client had not seen it? Every chance that Storm was not telling the client everything but also was leaving out certain information when it came to talking to the bank also.

The bank argument about improper lending comes down to 2 points:

1. Could the client service the loan if treated as a normal non storm client. As i see it if the answer is yes then no matter what "relationship" the bank had with Storm this will not be seen as improper lending.

2. For those who could not service the loan without the fudging - How much did the bank branch processing the loan application know. If it can be shown they knew the figures were fanciful then clients will get paid. Obviously certain CBA branches and BOQ North Ward are the clear leaders in this area.


----------



## Tysonboss1 (23 January 2012)

Harleyquin said:


> we didn't have enough money to retire on.  Approaching retirement is a scary thing for most of us.
> 
> .




Hey HQ,

Unforntunatly, trying to play catch up is what gets so many people into trouble, It's not funny.

It does lead even the smartest of people to do silly things, It's not just storm. I have seen people risking huges amounts on crazy things like olive groves, ostrich farms, stored barrels of whisky.

Even highly leveraged property speculation, and for some the ball bounces intheir favour others it doesn't.

The above statement from HQ, should be a warning for all the younger people that they need to start a retirement plan early, So as not to be scared into playing catch up.


----------



## Tysonboss1 (23 January 2012)

Tysonboss1 said:


> Hey HQ,
> 
> Unforntunatly, trying to play catch up is what gets so many people into trouble, It's not funny.
> 
> ...




Hi HQ,

Watch this video from the 4min 30sec mark for a few comments on people trying to catch up.


----------



## Julia (23 January 2012)

Harleyquin said:


> Julia you mentioned Sir O's educational thread regarding learning about investing.  I agree he does a great job and would recommend visiting this thread.
> 
> Just a suggestion, perhaps you and others with investment experience might suggest suitable threads for stormies and others to visit on the ASF forum.



After your response to my last attempt to be helpful, I hardly think so.
viz:



Harleyquin said:


> Julia   I have no interest in checking how bank shares have fared over the last five years or in fact how they'll fare in the next five, to me they are a non event






Harleyquin said:


> Julia   Very silly of you indeed and highly insensitive to boot.






Harleyquin said:


> To BJJac ie Bunyip Julia and Judd and co, go away and do some real research instead of coming back with your usual uninformed garbage.








SJG1974 said:


> Like the whole line about greed irritates the hell out of you, the whole line of “I didn’t know borrowing against my house and then gearing again was risky” irritates the hell out of me.



+1 x 1000.


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## Tysonboss1 (23 January 2012)

Julia said:


> After your response to my last attempt to be helpful, I hardly think so.
> .




Snap. :


----------



## shibby (24 January 2012)

Hi Doobsy

To answer your question

*What about if the finance from the intended margin loan had been included as an assett for example sitting in a non existent bank account?
But the monthly expense of that margin loan was ignored. I agree there could be a chance of that happening. 
*
I should have stated somewhere that the assets & liabilities form was completed pre margin loan the normal Storm way and I am trying to work out where the figures have been pulled from. 

We all now know that the home loan was the lynch pin or the first step in the building block and it was imperative that the bank loans were approved.

Hypothetically if you have an assets and liabilities form and it has a figure sitting in an imaginary bank account      unbelievably similar to the amount to be borrowed as a margin loan could one assume that it already being classed as an asset but then there is no monthly liability.

Then also included on the Hypothetical asset & liability you have the usual $100,000.00 per annum salary (very common for us Stormies) again the truth highly inflated

*If the client never saw the income figure or the assets and liabilities forms then they should never have signed. I know this happened and I don't know what else to say.* 

Just maybe the client had never seen it and never signed it

*My question back is how did the bank know the client had not seen it? *

Well that is the quandary – just say the assets and liabilities form has been typed or obviously spat out of a computer printer and when the bank was asked who typed those figures and the answer was the bank yet the client has never seen or signed the paper and the assets have very little relevance to their financial position.

*Every chance that Storm was not telling the client everything but also was leaving out certain information when it came to talking to the bank also.*

I agree there could be a chance of that happening 

I know the bank and the client were never to meet or speak that seems to be the golden rule and who would profit from that arrangement? If I was to hazard a guess - both of them


----------



## Judd (24 January 2012)

Solly said:


> DocK
> 
> I got a tweet this morning from my Stormer mate with this link to ASIC's *Getting Advice *booklet;
> 
> ...




'Tis a marvelous and beautiful thing, Solly.  Only one small problem that I can see.  How is ASIC the "requirements" going to keep con men, cheaters, scam artists, crooks, hustlers, swindlers and mountebanks away from the advisory business? :kiffer:

After all, those standards have not worked in relation to our elected representatives, State or Federal, so why should they work in the real world?


----------



## doobsy (24 January 2012)

shibby said:


> Hi Doobsy
> 
> To answer your question
> 
> ...




Shibby - so if I can use an example for a retiree

On the application to the bank - for the home loan borrowings:

Assets - House = $500,000
            Cash = $50,000
            Imaginary Investment = $1,500,000
            Superannuation = $300,000

Liabilities - Nil (assuming house paid off)

Income - $150,000 ($1,500,000 x 10% assumed return)

Expenses - Living + $28,000 (mortgage interest)

Now to the crux:
1. The imaginary investment is the investment that Storm figures will occur when we get $400,000 from the house (80%), withdraw the super, use the cash and gear it at 50%????
2. The income figure assumed a rate of return and ignored all costs (these could be capitalised) when in fact the truth is it should be distributions minus interest costs.
3. We know this is so wrong on Storms behalf as they were providing the figures but JUST HOW MUCH DID THE BANKS KNOW?

and lastly because this is important too

4. Did clients question the fact that with no income per se, $350,000 in income producing assets prior to any lending, the bank was willing to lend $1.15M ($750K ML + $400K mortgage) to them?

I think my position on this is as firm as ever. There will be clear cases of improper lending. Those banks who had much less association with Storm might continue to argue they did not know but CBA and BOQ are done. 

HOWEVER - Those client who do not fit into the retiree / low income bracket and have always had income that could support at least the home loan are going to find the argument much harder as it is not as clear a case of improper lending.

For example - I have taken over clients who had only a little equity in their home. One of the clients worked for NAB. She organised the loan to draw the equity herself and Storm grabbed it and geared it. They lost 90% of what they put up when they got their margin call triggered and that loan was paid out. This has cost them 6 years as that was how long it took them to build the equity up last time. 

They are late 30's and both working. The loss is less than $70,000 in their case. There is no improper lending, there was just bad advice. There is no justification for compensation I can see. I think there will be quite a few like this where the lending was legit, the figures checked by clients and the lending proper. It will result in plenty of retirement plans being put on hold and that is a pity but that is the problem with high risk strategies.


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## shibby (24 January 2012)

*SJG1974;*
*But, as my post said, the reference to greed followed the comment about the independently wealthy and multi millionaires who had no need to gear yet did so.  People like the doctors Frank had alluded to earlier, who had more than enough to live on, to live the kinds of lives that many of us could only dream of, but wanted more.  

If you have $10 million in assets and decide to risk it all by gearing to the gills, why would someone do that, when they could plonk it in the bank, and get $500,000 per year at 5%?  If you don't think thats greedy, then fine.  But I sure as hell do.
*
Lets talk about tax effectiveness being greedy?
$500,000 per annum interest added to what I would imagine is already a rather large annual salary makes for a hefty tax bill therefore not many would choose to simply leave it in the bank. 

There is a whole industry out there that specialises in tax avoidance I am not saying tax evasion but tax avoidance.

I/We can only talk about what we know through life experiences and I have been on the fringe of the legal profession most of my adult life and a barrister can usually make quite a large annual salary. I have seen barristers and doctors do the craziest things to avoid paying tax – legal of course but sometimes extreme because there is this ethos or concept or idea that you minimise your tax bill if you have the means to. 

When I was younger and a rather vocal socialist I believed that one paid their fair share of tax but of course this is where the problems develop as to what actually constitutes a fair share hence the tax avoidance industry.  Who out there including you does not want to minimise their tax bill? it is a socially acceptable way of life.

I am not saying that this is why the doctors that Frank is talking about went with Storm but it is an alternative to the concept of greed and to be perfectly honest I don’t think that the doctors that Frank mentioned, if they are the doctors that are involved with Levitt & Robinson can be tarred with that brush because the Stormies owe them an enormous debt of gratitude for their help and I can assure you there is no signs of greed.

The population who are in the high income, high responsibility category are usually time poor and lets face it Storm offered to take that responsibility off your hands as well.

The word greed offends me enormously and is not based on any evidence that has come forth and I simply wanted to know why it started. 

I agree the Cassimatises do appear to be obscenely greedy – that sought of greed has destroyed many lives and even taken lives and that is unforgiveable. 

Your comment that greed motivated many Storm lives – no I will never believe that for a second confused about the following and wanting to take responsible steps

After retiring and therefore a large amount of money in Super; 
Downsizing to a smaller home and having probably more money than they had had in a lifetime; 
The sudden shock of the responsibility of that money;  
Preparing for retirement;
Getting older and having a sick child to look after
As HQ said running out of time to accumulate wealth for retirement

- that’s why the majority would have gone to Storm.

Leave out what we know now - Storm purported to be a bastion of respectability, successful, reliable, highly recommended by one’s piers etc etc. Most people would not know that a large proportion of those that walked through the doors never came back, 
that statistic would not have been on show any where.  

I can not talk about the Storm experience I am in NSW and came to Storm through the back door but I am sure that they went to Storm for the same reason I went to Precise Solutions in North Sydney to get advice about money and how I was going to live comfortably - please now don’t pull the word comfortable to pieces I just simply mean comfortable - for the next 30 years.
What younger people don’t realise is that when you are older your wants and needs have changed and they are at a minimum. I am not saying that we don’t want any more it’s just a different want.
I could go on about the post storm and left with no money wants of just survival but that is another story.

*But, in reality, who, when they have lost it all, is going to admit they were greedy, when they can blame someone else.
*But I in all honesty can blame someone else, and I can say that without even blinking or stammering or blushing. And I have a list of people I can blame.


----------



## SJG1974 (24 January 2012)

shibby said:


> *SJG1974;*
> Lets talk about tax effectiveness being greedy?
> $500,000 per annum interest added to what I would imagine is already a rather large annual salary makes for a hefty tax bill therefore not many would choose to simply leave it in the bank.




That may be true, but on the other side not many would choose to gear their portfolio to the gills in order to enhance its tax effectiveness.  Risk their fortune to pay less tax?

If tax was the consideration, and you said to someone you have 2 choices:

1.	Pay tax on $500,000 (say $200,000); or
2.	Lose the whole lot and pay tax of Nil on Nil

Then I am pretty sure which option people would take.  I know that is simplistic, but if anyone went into this with tax minimisation as their sole objective, then they had rocks in their head….you don’t gear for tax purposes, you gear for growth. 



shibby said:


> Your comment that greed motivated many Storm lives – no I will never believe that for a second.




Well we differ here.  People are prepared to label the Cassimatis’ greedy, yet no Storm victims were greedy?



shibby said:


> But I in all honesty can blame someone else, and I can say that without even blinking or stammering or blushing. And I have a list of people I can blame.




Are you on that list?

I guess we will find out over time whether the people on your list broke the law or not or whether they just sold a legal, yet flawed strategy which was gobbled up by you and other Storm victims for reasons only you can explain.


----------



## Tysonboss1 (24 January 2012)

Can I please have one of the stormies answer the question I asked before.

When you sat down with your planner and asked him the question, "How much are we likely to earn from this operation" What was his answer, Or what were the returnes they elluded to?


----------



## shibby (24 January 2012)

SJG1974 said:


> That may be true, but on the other side not many would choose to gear their portfolio to the gills in order to enhance its tax effectiveness.  Risk their fortune to pay less tax?
> 
> If tax was the consideration, and you said to someone you have 2 choices:
> 
> ...




I must tell you that when I read your reply above I actually laughed because I knew exactly what you would say to me it was not a sarcastic laugh but a happy laugh because I knew you would not know what else to say to me, because I must fit into your hypothesis.

I am going to answer the last question first
Am I on the list 
- the only way I can honestly answer that is to say if I knew then what I know now I most definetly would be on that list.
I thought that when I asked questions I was given honest answers. 
I also believed that they knew what they were doing and when my spreadsheets were saying one thing and they were saying another it was me. 
I think any confidence that I had in my ability was eroded. 
The only other thing to say was that I had a long term relationship with Precise Solutions and therefore I had put my trust in them that they were not going to do anything stupid and it must have been me that really didnt understand.
Look I could go on and on but you really dont want the nitty gritty as you have made up your mind already I have done 3 years of research and I dont think you have even taken a week of research (maybe that is youth I am assuming that you were born in 1974) Your tone is quite abrupt and very condecending and you have already made up your mind about us you are probably a black or white person but guess what in life there is a lot of grey.
I was hoping that you would actually really think about what I was saying and not fit every thing around the word greed.
Guess what people make mistakes we make a decision on the evidence before us and we go ahead and do it. Would I have made a decision after knowing the iceberg was there never in a million years but I didnt know the truth. 
There were a million things I didnt know

Cassimatis Greed - Well if any one knew what was going he did and right up until the last minute he was still taking clients.

Do you think the doctors thought for one second that they would Lose the whole lot and pay tax of Nil on Nil.


----------



## SJG1974 (24 January 2012)

shibby said:


> I must tell you that when I read your reply above I actually laughed because I knew exactly what you would say to me it was not a sarcastic laugh but a happy laugh because I knew you would not know what else to say to me, because I must fit into your hypothesis.
> 
> I am going to answer the last question first
> Am I on the list
> ...




I dont know whether you are greedy or not, and I don't believe I have ever called you greedy.  As I have said previously, I don't think that every Tom, Dick and Shibby who walked through their doors was greedy. But I reckon that greed would have played a part for many clients. Anyway, thats by the by, I only raised it because you asked the question about greed in the first place!!

The reason I asked if you are on your list was basically because many people on this forum who were clients of Storm have blamed others, be it the banks, Cassimatis, ASIC, the government, whoever, but seem to have ignored the simple fact that they signed on to this strategy, no matter how flawed it is.  I have not gone back through your posts to see whether you fit in that category or not....it was actually a genuine question.

Whether people signed on because they were naive, greedy, stupid, whatever doesn't really matter, but in the end they made the decision to do so.  Every decision has consequences.

As I have said previously (and this is a generalisation, not directed at you personally), it annoys the hell out of me when people take big risks, lose, and then play dumb and say "I didn't know what I was doing, they conned me". Whose fault is it that people didn't know what they were doing?  Storm's, the bank's or the clients who went along with the whole deal? Storm is selling you something- like all salesmen part of their job is to make you feel like you need what they are selling.  So in that case, do you believe all of the answers he gives, or do you perhaps verify them yourself?

We live in a litigous society where as soon as anyone loses, they look for someone to blame, when a bit of self analysis would probably be more beneficial and help them avoid making the same mistakes in the future. 

If laws were broken then the guilty parties will rightly pay and the courts will decide the guilt and the punishment. But, is the fact that the banks may have behaved dishonestly the *only* reason why people have lost money in all of this?  They can't act dishonestly unless someone hands them the money (or allows them to take out a debt) for them to mismanage....and the people who handed them the money were the clients.

And remember, this wasn't some black box or a ponzi scheme..it was actually a very simple and straight forward strategy, using products that are readily available and transparent.  But it was bloody highly risky, and as soon as someone tells you to borrow money against your house, then alarm bells should start ringing telling you "this is not low risk".  We have heard people say they didn't realise it was risky...please, give me a break. Anyone who has ever had a home loan knows debt is risky.

Heaven help some people if the courts decide that no laws were broken and no compensation is payable...who would they blame then? Perhaps the legal system would be the next target.

On the doctors, the Nil Nil was a throwaway line, but was used to serve the point that taking a huge risk with the purpose being to save tax is the height of stupidity, because now these doctors would probably prefer to have their tax problem rather then the problem of having lost all of their money as the result of taking huge and unnecessary risks.


----------



## bunyip (24 January 2012)

Harleyquin said:


> Bunyip once again you've avoided giving me a specific answer to my question.




OK Harleyquin

I can see you’re determined to get an answer out of me with regard to_ ‘What is the role and responsibility of financial planners’._
So I’ll give you your answer.
The reason I’ve ignored this question to date is simply because it’s already been discussed in detail many times on this thread, and you should already know the answer.

Without going into too much detail, I’ll summarize by saying' * ‘The role and responsibilities of a financial planner are to act ethically and give good advice that’s in the best interests of the client’. *

And don’t waste your time or mine by telling me that Storm weren’t ethical and honest and they didn’t fulfill their responsibilities of giving you good advice and looking after your best interests. I already know that. This whole forum knows that. 

Now that I’ve addressed your question, I’ll address the question I asked you to consider. Note that I didn’t ask you for an answer, only that you consider my question, which was ‘What are the responsibilities and role of a person who consults a financial planner’.
DocK has stated that the responsibilities of such a person are  ‘to provide honest and accurate answers to a fact find in order to allow them to formulate an individualised plan’.
I agree with her, but she’s missed the most important responsibility of all. 
_*Your most important responsibility when you consult a financial planner is to thoroughly research and evaluate the advice they give you. *_
This is particularly important if their advice is to mortgage your home and borrow vast sums of money for investment.

Many thousands of people approached Storm Financial. The vast majority of them understood the importance of thoroughly researching the advice they were given. After doing so, they walked away.
A minority didn’t understand that it was imperative to thoroughly research the advice they were given. These people trusted Storm and believed what they said. They got burnt.
GG summed it up very well by saying ‘Storm fed you a load of crap and you swallowed it’. 
Well, maybe you would have avoided swallowing it if only you’d bothered to look into it properly.

You’ve ridiculed me whenever I’ve suggested that Stormers should have thoroughly researched Storm’s strategy before committing millions of dollars to it. Your exact words were ‘What a load of hogwash’.
I could easily show you how you could have spotted the pitfalls of the Storm strategy by spending about half an hour on the internet and about five minutes working out some simple figures on a pocket calculator. Nothing complex or difficult to understand, nothing sophisticated – just some simple basic research that would have enabled you to see that Storm were liars in telling you their strategy was conservative and low risk.
But why would I bother trying to help you. You’ve ridiculed me just about every time I’ve tried to tell you anything that I thought might be of benefit. You’ve adopted the same attitude towards Julia, SJG, and pretty much everyone else whose tried to help you. 
You hang on every word of people like Frank, Shibby and others who got wiped out in the GFC , to you they’re the only people worth listening to.
Yet when any successful investor gives you the benefit of their knowledge and experience, you write them off as fools. Maybe it’s time you started taking notice of the winners, the people who came through the GFC intact and in some cases actually prospered from it.


----------



## Judd (24 January 2012)

Seems to get a bit difficult sometimes doesn't it, bunyip?

When Solly posted the ASIC "What a good FP am I" criteria, there was a thought running through my mind and I could not quite grasp it.  I now recall the statement.  It was in a book on investing which I read about six years ago - yes, before the GFC and the Storm downfall.  I just cannot find the book or remember who wrote it but the statement went along the lines of:

"goverments always make the same reassuring sounds after investors lose money but after a decade or so another batch will lose their money, only it will be in a slightly different way."

Wish that was emblazoned on every PDS printed, over every bank's door and web-site, and on the doors of every FP in the land.  All in HUGE CAPITAL LETTERS of course.

Cheers


----------



## shibby (24 January 2012)

*SJG1974;68165  *
_I dont know whether you are greedy or not, and I don't believe I have ever called you greedy. As I have said previously, I don't think that every Tom, Dick and Shibby who walked through their doors was greedy. But I reckon that greed would have played a part for many clients. Anyway, thats by the by, I only raised it because you asked the question about greed in the first place!!
_*I disagree with you that greed would have played a part for many clients – being responsible would have played an enormous part.
*
_The reason I asked if you are on your list was basically because many people on this forum who were clients of Storm have blamed others, be it the banks, Cassimatis, ASIC, the government, whoever, but seem to have ignored the simple fact that they signed on to this strategy, no matter how flawed it is. I have not gone back through your posts to see whether you fit in that category or not....it was actually a genuine question.
_*No answer*

1. _Whether people signed on because they were naive, greedy, stupid, whatever doesn't really matter, but in the end they made the decision to do so. Every decision has consequences.
_*I agree and said earlier that we make decision on the evidence that was before us but if all the evidence is not in front of us and there is an iceberg sitting there of what was not revealed I will not blame myself. 
It has been a very interesting exercise you start to scratch the surface and it’s all there, tons and tons of corruption. I was not privy to all of that knowledge at the time of signing.
The funny side to all of this is  in their greed they didn’t even bother to cover their tracks. 
*
2. _As I have said previously (and this is a generalisation, not directed at you personally), it annoys the hell out of me when people take big risks, lose, and then play dumb and say "I didn't know what I was doing, they conned me". Whose fault is it that people didn't know what they were doing? Storm's, the bank's or the clients who went along with the whole deal? Storm is selling you something- like all salesmen part of their job is to make you feel like you need what they are selling. So in that case, do you believe all of the answers he gives, or do you perhaps verify them yourself?_
*I can honestly say that I didn’t take it at face value, I researched to the best of my ability with the tools that I had developed  over my life time. *

3. _We live in a litigous society where as soon as anyone loses, they look for someone to blame, when a bit of self analysis would probably be more beneficial and help them avoid making the same mistakes in the future. _
*That again is a real knee jerk response and once again with out much thought to it and I bet you the Researcher Extraordinaire didn’t research those statistics.*

4. _If laws were broken then the guilty parties will rightly pay and the courts will decide the guilt and the punishment. But, is the fact that the banks may have behaved dishonestly the only reason why people have lost money in all of this? 
_*This one makes sense - the only way I can answer that one is to say that in my honest opinion Storm was aided and abetted to an enormous degree by the banks and would never have been able to pull it off without their assistance.
*
_They can't act dishonestly unless someone hands them the money (or allows them to take out a debt) for them to mismanage....and the people who handed them the money were the clients.
_*This one I really don’t understand. Maybe you could rephrase that one
*
5. _And remember, this wasn't some black box or a ponzi scheme..it was actually a very simple and straight forward strategy, using products that are readily available and transparent. But it was bloody highly risky, and as soon as someone tells you to borrow money against your house, then alarm bells should start ringing telling you "this is not low risk". We have heard people say they didn't realise it was risky...please, give me a break. Anyone who has ever had a home loan knows debt is risky.
_*This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures. 
Again I will use the word ethos it’s a good old Aussie ethos, it’s our culture to be home owners and have a mortgage I am being a bit flippant here but that is not a hard thing to get your mind around.  It does not mean for one second that I was not greatly concerned but I was given such assurances that I would not lose my house ever and I believed. 
Because my house was on the line from day one I kept very good spreadsheets and every movement of every account was entered into MYOB. But you don’t want to talk about after the signing on the dotted line do you? You are only interested in our motives of why we did it and that has to be greed.
*
6. _Heaven help some people if the courts decide that no laws were broken and no compensation is payable...who would they blame then? Perhaps the legal system would be the next target.
_*You personally will be so disappointed if we win I just know it, but, if you could see my face as I write this I have the biggest smile ever because I know we will win. 
My hubby would say “The law is sometimes an Ass” -  but I say Yahoo!!! not this time.

*
_On the doctors, the Nil Nil was a throwaway line, but was used to serve the point that taking a huge risk with the purpose being to save tax is the height of stupidity, because now these doctors would probably prefer to have their tax problem rather then the problem of having lost all of their money as the result of taking huge and unnecessary risks.
_. *No answer warranted
*


----------



## Judd (24 January 2012)

shibby said:


> This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.




I acknowledge that it is a minor point but are you sure that it is 70% of Australians have a mortgage?  If so that is very surprising to me.  I can only find census data as at 2006 (and of course when I attempt to access the bloody data it says temporarily unavailable) and yet according to the ABS data (as at 14 July 2011) http://www.abs.gov.au/ausstats/abs@...2010~Chapter~Levels of home ownership (5.4.3)



> Home ownership rates have been fairly stable at around 70% for many decades. As measured in the ABS Census of Population and Housing, in 1971 the home ownership rate was 69% and in 2006 it was 70%, with small fluctuations around 70% in the intervening Censuses.




Doesn't really matter anyway.  I assume that most who do have a mortgage would be aware of how much is outstanding on it.

PS: Finally got the 2006 census data for Australia

Fully owned: 32.6%
Being Purchased: 32.2%
Rented: 27.2%
Other: the rest


----------



## Solly (24 January 2012)

Judd said:


> 'Tis a marvelous and beautiful thing, Solly.  Only one small problem that I can see.  How is ASIC the "requirements" going to keep con men, cheaters, scam artists, crooks, hustlers, swindlers and mountebanks away from the advisory business? :kiffer:
> 
> After all, those standards have not worked in relation to our elected representatives, State or Federal, so why should they work in the real world?




Yes Judd I agree with your sentiments. I suppose laws are really a refection of what our society requires as a minimum acceptable behavioral requirement. When these requirements are not adhered to it is up to enforcement authorities to detect variance and then be referred so that punitive measures can be applied where appropriate.

But maybe occasionally, stern examples just need to be made of some where they have strayed just a little too far off course and breached acceptable standards. Where the imposition of an ineffective measure of penalty units is not a deterrent maybe spending 3 to 5, sharing a cell with a big hairy boyfriend, at The Creek would send a message too loud to ignore.:


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## shibby (24 January 2012)

Dear Judd

What I said
*This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.* 

At the time of writing  I thought I  was saying as 70% of Australian are home owners according to census figures  I could assume that a very large proportion of that population would have a mortgage

I proof read it and then 
I fiddled around with the brackets so much I think I misconstrued the message
I Apologise

I have had a long day I have been doing my sons GST all day, well last 2 days and I am tired plus a dog with an upset tummy has been added to the mix.


----------



## SJG1974 (24 January 2012)

shibby said:


> I disagree with you that greed would have played a part for many clients – being responsible would have played an enormous part.




Thanks for putting the best bit first!

Gearing to the gills and not having an understanding of the risks involved is responsible?  Good lord, are you serious????



shibby said:


> I agree and said earlier that we make decision on the evidence that was before us but if all the evidence is not in front of us and there is an iceberg sitting there of what was not revealed I will not blame myself.
> 
> It has been a very interesting exercise you start to scratch the surface and it’s all there, tons and tons of corruption. I was not privy to all of that knowledge at the time of signing.
> The funny side to all of this is  in their greed they didn’t even bother to cover their tracks.




The Storm salesman’s job was to sell you their product…you expect them to respond to your doubts by saying “you know what, you are right.  This whole thing is a ticking timebomb…I wouldn’t touch it with a bargepole”? Of course they will alleviate your doubts and give evidence that the strategy works….thats how they make their money.

Did you think of getting independent evidence?   I mean, you weren’t out buying a pair of shoes, you were committing your life savings to a high risk strategy. Some independent analysis of such an important, life changing decision would have uncovered the iceberg. We have heard others ask why should they get independent opinions on the strategy.  I would have thought because it is common sense is a good enough answer.




shibby said:


> That again is a real knee jerk response and once again with out much thought to it and I bet you the Researcher Extraordinaire didn’t research those statistics.




Not sure what statistics you refer to.  But you are proof that many people who make bad decisions look for others to blame.



shibby said:


> This one I really don’t understand. Maybe you could rephrase that one.




A scam takes at least two people…the scammer and the scammee. You played a role in your own downfall, however hard that may be to admit to.

If you had have been more discerning with your initial inquiries, if you had have trusted your doubts rather than have the salesman (who has a vested interest in selling you the product) alleviate those doubts, then perhaps you would have figured out, like 75% of people who walked through Storm’s doors, that the strategy was highly risky. And if you hadn’t have signed on the dotted line, you wouldn’t have been conned by the banks, ASIC, the FPA, Storm, the Government, the Pope, the Nazis and whoever else was involved in the high level corruption that caused your loss.

Were the people who walked into Storm, and walked away without signing up just lucky?



shibby said:


> Because my house was on the line from day one I kept very good spreadsheets and every movement of every account was entered into MYOB. But you don’t want to talk about after the signing on the dotted line do you?




I actually do in fact, so far whenever I have asked a question to anyone about this, I have usually run into a brick wall for some unknown reason.

A simple question…if you had such good spreadsheets, then why didn’t they tell you long before the portfolio was sold down that you were in trouble and to bail out?  Or, if they did tell you that, why didn’t you?

As you know, the market suffered gradual, steady falls during 2008 until September when the crap really hit the fan.  However, for many, they were actually in negative equity long before September, due to this responsible investment strategy known as double gearing. Why didn’t you bail out earlier?  Or did you get out??




shibby said:


> You personally will be so disappointed if we win I just know it, but, if you could see my face as I write this I have the biggest smile ever because I know we will win.




Not as big a smile as I had when you claimed that double gearing was reponsible!

I don’t wish anyone harm.  I am probably just old fashioned in thinking that people should take responsibility for the actions they take and the decisions they make.  Apparently that type of thinking is outdated in this day and age.

And if you win or lose, personally I couldn’t care less.  I don’t know any storm victims, so it will not have any impact on me.  In fact, it could, I could make money out of it, as some very gullible people could again be financial.

Want to buy a woodlot, or better still, some tulips?


----------



## Judd (24 January 2012)

shibby said:


> Dear Judd
> 
> What I said
> *This point is interesting as 70% of Australians (and one could assume that a very large proportion of the 70% home owners) do have a mortgage according to census figures.*
> ...




Chill.  No need to apologise.  It is only an internet forum.  Have done the same in the past but fortunately got a colleague to check the numbers else it was a $120m hole in the budget.

Hope you recover quickly.  And unless he is paying you, get your son to do his own GST!  As if.


----------



## Julia (24 January 2012)

shibby said:


> and I am tired plus a dog with an upset tummy has been added to the mix.



I expect you will scorn my advice but a doggie upset tummy can be hugely helped with probiotics such as "Inner Health Plus" available from your pharmacy's refrigerator.
No food, just water, until it settles down.


----------



## bunyip (24 January 2012)

*DocK

This is in response to your post No. 6590 on page 330.
I’m unable to quote that post because the quote tags won’t work for me.*


It was you who raised a number of questions about greed.
I simply responded to your post.

Time and again we’re rebuked for suggesting that greed motivated people who invested with Storm despite being well set up financially and having no need of Storm’s services. Naturally we respond with _ ‘OK then, what motivated you if it wasn’t greed’?_
We don’t think they’re obliged to answer. We respect their right to keep that information to themselves if they so choose. They and you should respect _*our*_ right to ask these questions if we wish. 

This thread is for discussing all aspects of the Storm fiasco, not just the aspects that you consider important, such as the role the banks played. 
I don’t care if you’re sick of hearing about the greed aspect. Don’t read my posts if that’s how you feel. I get a bit tired of hearing about the banks too, but I don’t whine and complain every time someone mentions them.

You’re not the owner of this forum, it’s not up to you to decide which aspects of the Storm debacle we’re allowed to discuss and which ones we must avoid.
I'll discuss any aspect of the Storm situation I choose to discuss....with or without your approval.


----------



## shibby (24 January 2012)

SJG1974 said:


> A simple question…if you had such good spreadsheets, then why didn’t they tell you long before the portfolio was sold down that you were in trouble and to bail out?  Or, if they did tell you that, why didn’t you?
> 
> As you know, the market suffered gradual, steady falls during 2008 until September when the crap really hit the fan.  However, for many, they were actually in negative equity long before September, due to this responsible investment strategy known as double gearing. Why didn’t you bail out earlier?  Or did you get out??




I am not going around and around in circles any more going over the same thing time and time again. I will never say I am to blame and you will keep saying I am. 
This is the last question I will answer for you.

Of course I asked to be sold up and they kept lying to me and saying that I didn't know what I was talking about, July came and then I was convinced I was right and they didn't know what they were talking about. 
They reverted approx 1/3 to cash in July from then on it was a nightmare where they refused to cash me up, I would say I am in buffer, no your not, I am in margin call no your not, a good excuse was there is a lag with Macquaries compter data they just stalled and stalled.
There is a lot more to that which is a bit of a waste of time really even talking about as the terror and hysteria I felt comes racing back never want to feel like that ever, ever again. I think my story is a pretty common one there were a lot who tried to get out I am not Robinson Crusoe. In fact I have a good data base of all those who mentioned that they also tried. Trowel the site its full of information
Good night I am tired I am not even sure if I have made sense will probably read it in the morning and gasp.
I cant say that I have enjoyed the experience of conversing with you as we really dont converse you have your agenda and I have mine and never the twain shall meet.
Its such a shame that your obviously so angry about the blame issue are you worried about my soul if I dont admit to being wrong?


----------



## SJG1974 (24 January 2012)

shibby said:


> I am not going around and around in circles any more going over the same thing time and time again. I will never say I am to blame and you will keep saying I am.
> This is the last question I will answer for you.
> 
> Of course I asked to be sold up and they kept lying to me and saying that I didn't know what I was talking about, July came and then I was convinced I was right and they didn't know what they were talking about.
> ...




I appreciate the answer.  Certainly in a situation as you have described, I can understand the frustration and the bad memories. I would guess that in the situation you describe, your Storm adviser would have a case to answer if he prevented you from doing what you wanted.

As for the blame issue, it is a common theme throughout the forum.

Almost every Storm victim on this forum has played the blame game..blaming the banks, Cassimatis, their adviser, ASIC, the FPA, the government, whoever. It is a common theme throughout...lets point out how the banks screwed us.  It has been a completely one sided argument from these people....it is all someone else's fault.

We have had posters try to turn the whole focus of the forum onto the banks and the leglities, because it suits them.  Well, this is a forum, and the issues concerning this disaster are much broader than what the banks did or didn't do. Posters can talk about whatever they like as far as I am concerned. And I will say my bit, and if you don't agree, thats fine.  I am not here to win a popularity contest.

But remember, at the end of the day, if Storm didn't have clients who were sucked into taking and paying for their advice, this forum wouldn't even exist.

And if, as some posters have claimed, they want to use their experience as a lesson or warning for others, focusing on what the banks did won't help the next wide eyed investor who falls for a slick sales pitch by a Greek in a sportsjacket. Because the client is the one in control, just as you were when you walked into the Storm Office the first time. What you and others did and didn't do is a far more valuable lesson to learn on how to avoid another Storm in my opinion, because you had the power to say yes or no.

Anyway, good night, I hope your dog feels better by the morning.


----------



## Solly (25 January 2012)

> *"Sting operation reveals poor quality of planning*
> 
> A SWEEP by the corporate regulator has uncovered ''disappointingly high'' levels of poor quality advice provided by financial planners."




More by Ruth Williams @  http://www.brisbanetimes.com.au/bus...of-planning-20120124-1qfnp.html#ixzz1kPXrhus0


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## doobsy (25 January 2012)

Notes from the darkside:

Thought I would bring in some insight. My firm is lucky enough to have a solid but managable client base, most of which have been with us for many years. We are low risk.

Fin Planning is a profession where you really can't win. We are dealing with people's money. That is a huge responsibility. But there are a number of factors that we fight with on a daily basis:

1. The massive undereducation of most people when it comes to money. For example most people think super is shares. They don't understand it is simply a tax structure where you invest in whatever asset class you prefer.

2. A followon from this apathy is a low level of willingness to actually provide truthful answers about risk tolerance, experience, other assets etc. Part of this may be the skeptic in people, part of it may also be not wanting to look silly. All of it makes it harder to give good advice.

3. Laziness. People don't want to think about it. I ask 2 simple questions like - when would you like to retire and how much a week would you like to retire on? I can't get an answer. How do I formulate a plan without that? Too busy with life and the biggest loser to sit down and think about things before coming in to an adviser.

4. If I tell people they can retire at 65 on $40,000 per annum and they really wanted to know they could retire at 60 on $60,000 then they are going to leave and go find someone that tells them that is achievable. My figures are realistic but there is automatically a conflict isn't there. Do I tell the client what they want to hear and get a client or do I tell them the truth and end up with no client. How do I reconcile my business interests with my client interests.

5. Greed - human nature is to get as much as possible as quickly as possible. Call it whatever you want but our nature is we want to survive and prosper. There is much talk on this topic on the forum. Again if I tell a client they can live on $40K pa and still have all their money to give to their kids or spend $60K pa but have no capital left by the time they reach 90 (if they do) and another adviser tells them they can have the $60K pa and still have the money at the end - which strategy will they take? Will they consider risk at all or because it ticks all the boxes will they just adopt it?

6. Borrowing - Australians still believe that banks are their friends and that debt is not a problem. Right or wrong we love bricks and mortar and believe it is safe. As the US, Spain etc are finding out, property is just another asset class that can have it's ups and downs. If a bank can see property prices heading south and I walk in wanting to borrow money to buy a property - is it their responsibility to tell me to come back in 6 months becuase prices will be cheaper and I won't have to borrow as much? Their first responsibility is to their shareholders to make money. #1. To not do so could get them sent to jail. Consumer protection is not their responsibility. The Govt has set rules on this and if they play by the rules then I don't see the drama. If they break the rules then watchout.

A second part of this is borrowing for other purposes. How many people borrowed to invest in Gold Coast units or worse listened to a spruiker and pulled their super out to buy 2 units, or to start up a small restaurant business in Brisbane only to see GC units fall in value by 25% or Brisbane get flooded and have lost their capital. Where is their bailout?

Oh and if you want a laugh then google sharemarket projections for 2007, 2008, 2009 etc etc and see how badly most of the "experts" and certainly the bank "economists" have got it over the years. If they are the ones advising the banks then of course they will lend money willy nilly - it is always a bull market!!!!!!!

7. Intangibles. We sell promises. Whether it be a retirement goal or an insurance package or a saving plan you hand over fees and get........nothing. Nothing you can take away and touch. No planner controls markets and so the dumb ones try to use historical returns to tell clients what they can expect. My words - you can expect what you put in + or - the growth along the way. I don't know how long they will leave it in for, where markets will be that particular month. I do know that clients who say they will leave monies in for 10 years really mean 3-5. Then they want / need it for something so important that they couldn't have budgeted for it or told me about it when we did the plan.

Anyway - that is some feedback from the darkside.

Shibby - thanks for offering info about what occurred in 2008. Again it re-inforces Storm screwing people to protect their interests. God I hope thereare a few clients who will go EC just as hard as they seem to be willing to go the banks.


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## SJG1974 (25 January 2012)

Good stuff doobsy, a good read.

Whats the old saying....when people's investments go up in value they pat themselves on the back. When they go down, they blame their adviser.

A tough job no doubt, not helped by the publicity of large failures like Storm which, as this forum has shown, tar the whole industry with the same brush.


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## bunyip (25 January 2012)

SJG1974 said:


> Good stuff doobsy, a good read.
> 
> Whats the old saying....when people's investments go up in value they pat themselves on the back.
> _*When they go down, they blame their adviser.*_




And the banks and the government and ASIC and the FPA and anyone else they can think of.


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## shibby (25 January 2012)

doobsy said:


> Notes from the darkside:
> 
> 
> Shibby - thanks for offering info about what occurred in 2008. Again it re-inforces Storm screwing people to protect their interests. God I hope thereare a few clients who will go EC just as hard as they seem to be willing to go the banks.




Doobsy Part1- I though your post was really interesting and I have a million questions to ask so I need to get my brain into gear as I want to set the questions in the context of the Brisbane Times article.

I thank you Solly for that link.

Doobsy Part 2 - Well litigation takes money and we don’t have any. We therefore have two choices 
We wait till we get out money from the banks, then we will have money for legal expenses, also the Storm advisors will have money (I am assuming if we win then they win) and then they are really worth suing wouldn’t you say?

But I have a slight problem with that idea and that is if we get our money back what exactly are we suing the advisors for?

We are obviously pre the new legislated fiduciary duty. Pain and suffering? Would that get up? I don’t think so - though we could of course be trail blazers and set some sort of precedent related to financial disasters. I don’t think the words pain & suffering do the experience of the last 3 years justice.
Or we wait for ASIC – Maybe the CBA could fund ASIC to get really serious about hanging the advisors, no more of this you can’t practice for 3 years c**p? 
Has the CBA funding ASIC been suggested before? Or did I just think of it? 

I suppose you are choking by now SJC1974?  You are obviously a financial advisor.


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## shibby (25 January 2012)

I have taken this from the Brisbane Times Article

*A SWEEP by the corporate regulator has uncovered ''disappointingly high'' levels of poor quality advice provided by financial planners.
As a war of words continued yesterday over the federal government's planned reforms to financial advice, the Australian Securities and Investments Commission released the first results of a ''shadow shop surveillance'' of advisers undertaken last year.
ASIC, which used real consumers seeking retirement advice to carry out the sweep, revealed that of the 64 advice plans provided, more than a third were rated as poor, 61 per cent as adequate and just 3 per cent - two of the 64 plans - were classed as good.
The ASIC commissioner, Peter Kell, said there was a ''consistent failure'' by advisers to talk to clients about what their retirement savings could realistically fund, with many plans containing ''woefully inadequate projections'' and ''poor or unrealistic'' technical assumptions. 
There was too much generic advice, Mr Kell said, and conflicts of interest remained a problem.
ASIC announced the results at a parliamentary committee hearing reviewing the government's proposed Future of Financial Advice laws.
The laws, sparked by investment collapses such as Storm Financial and Westpoint, will require financial advisers to act in their clients' best interests, ban conflicted payments such as commissions, and strengthen the regulator's power to refuse or cancel financial services licences.
*

Doobsy this isnt the post that I specifically want you to answer from your last post this is just a general post.

I would really like the *Financial Advisors *out there to comment on this article if possible. 

Firstly do you think this article is a true reflection on the industry? As one cant believe every thing one reads in the press.

Do you think that some of the inappropriate advice could be related to greed?

What would you personally like done to clean up the industry?

Do you think the number "64 financial plans" is a large enough statistical data base to get a true picture of the industry? 
That question goes both ways of course


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## Solly (25 January 2012)

> "*ASIC Criticises Poor Quality of Advice Given by Australian Financial Planners*
> 
> The Australian Securities & Investments Commission (ASIC) has criticised the poor quality of advice that Australian financial planners have given to clients."




More from Vittorio Hernandez @  International Business Times


----------



## Solly (25 January 2012)

> "*Lawyers lash out on ASIC in Storm saga*
> 
> THE Australian Securities and Investments Commission is again under fire over its handling of the Storm Financial collapse, with lawyers claiming it is in bed with the Commonwealth Bank."




More by Tony Raggatt @ townsvillebulletin.com.au


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## Julia (25 January 2012)

Julia said:


> Judd, could you explain the 'psychological stress', or even more the 'physical threat'
> incurred in reading an explanation of how to access the share price of a company?
> 
> Such information being offered in response to someone expressing confusion because they did not know whether to believe a claim that bank shares had done very well.



Judd, I'm still hoping for a response from you on the above.  Please?



DocK said:


> What is your definition of wanting more than you need?  I don't _need_ to own my home, I could be content to rent - is striving for home ownership being greedy?  I don't _need_ to feed my family nutritious food, we could subsist on McDonalds for less than my average weekly grocery bill - am I being greedy in wanting a good diet?  My kids don't _need_ to go to a good school, but I want to give them the best chance in life that I can - am I being greedy here?  I've never been outside Australia, but would love to broaden my horizons and gain an insight into how other nationalities live - am I being greedy to aspire to overseas travel one day?   I don't _need_ to put myself in a position to help my kids fund their first homes, or leave them a little nestegg, but I'd like to - is this being greedy?  Who are you to tell me I can't have aspirations and dreams anyway?  If wanting more than you need is the definition of greed, I guess you need to clarify exactly what constitutes a _need_ vs a _want_.  A necessity for you might be a luxury for me, or vice versa.



What you want out of life is a matter for no one but yourself.  The question is far more "what level of risk are you going to engage in to achieve these aspirations"?

Some people will prefer to live in a two bedroom apartment in a mediocre suburb on which they owe no one a cent.  Others will so aspire to the supa dupa home in a salubrious neighbourhood that they will risk their existing level of assets in the pursuit of such targets.

I don't care if someone aspires to be the richest person in the world.  It will never make any difference to the preference of others to eschew such risk in favour of ensuring the security of what they currently own.


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## shibby (25 January 2012)

shibby said:


> from my Brisbane Times Article
> 
> *
> Do you think the number "64 financial plans" is a large enough statistical data base to get a true picture of the industry?
> That question goes both ways of course*



*

That line should have read is a large enough statistal sample not data base
sorry
I dont know how to edit*


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## SJG1974 (25 January 2012)

shibby said:


> I suppose you are choking by now SJC1974?  You are obviously a financial advisor.




Good to hear from you again shibby, the dog is obviously better?  You didn't stay away for long did you??

You are right, I am choking...I reread your post about Storm victims being sensible by double gearing into a strategy they don't understand!  But choking over this?  Why would that affect me?  Don't flatter yourself.

And no I am not a financial adviser.  I have worked with several advisers over the journey, a couple who were so so, and the current one who I believe has been very good and has become a friend. So I know a bit about what they can provide, and some of the obstacles they can overcome.  I also have a keen interest in investor psychology, of which this forum has been a fascinating study, I can tell you.

Mainly, my advisers have concentrated on tax planning, asset structuring and helped me secure good insurance cover.  And I have been happy to pay their fees for the service. My idea of financial advice is this sort of stuff, not handing my money over to them and expecting them to make me rich- thats not financial advice in my book.  

I do my own investing, never borrowed to invest other than in my home.  Too risky for my liking, but hey, thats just me.  I lost quite a bit of money in the GFC and made some bad investment decisions, but learned from my mistakes and picked myself up and went again. And I am sure I will make investment mistakes again in the future....and like I have before, I will accept responsibility for the decisions I make.  As I said previously, apparently an old fashioned concept in this day and age of blame.

And no, I wasn't recommended to gear to the gills to save some tax, nor did I go with strategies I didn't understand.  That would be crazy wouldn't it...who on earth would be silly enough to do that?

So no, I am not an adviser. But I appreciate you thinking of me.


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## bunyip (25 January 2012)

DocK said:


> This has been covered many times on this thread already.  Anyone with even a cursory knowledge of Storm would know that there were three or four index funds which simply tracked the performance of the market - therefore there were no promises of exceptional returns.




Storm duped their clients by passing their strategy off as low risk and conservative because it invested in Index funds that aimed only to duplicate the performance of the overall market.
But you didn’t have to scratch far below the surface to see how this masked the true picture.

Sink 100 grand of your own money into an index fund. No borrowed money involved. A 10% rise in the market equates to a 10% return on your 100 grand, while a 10% fall equates to a 10% loss on your 100 grand.
How about if you use Storm’s strategy by mortgaging your home and borrowing aggressively to crank your 100 grand investment up to 400 grand. Now a 10% rise in the market equates to a 40% return on your 100 grand. A 10% fall on the market equates to a 40% loss on your 100 grand.
A 25% market rise equates to a 100% gain on your base capital of 100 grand, whereas a 25% market fall means a 100% loss of your 100 grand of base capital.
And the nature of markets is that 25% falls happen much quicker than 25% rises. How about if you cop a 50% fall in the market – you do the sums. And there’s been a number of market falls of 50% over the years, so it’d be naÃ¯ve to think ‘it can’t happen again’.

How’s that ‘conservative and low risk’ Storm strategy looking now?
They used leverage to massively increase gains, but the downside was that it massively increased losses when the market turned bearish. Nothing safe or conservative about that.

The myth of the ‘conservative’ Storm strategy is promoted on the SICAG website in an article on margin lending written by former Storm adviser Luke Vogel.
Here’s an extract from that article.....
_
*Essentially, the Storm model promised ‘average market returns’...nothing more, nothing less. Some media reports claimed that Storm clients were greedy because they were choosing high-risk high-return investment and that they got what they deserved. Clearly, an index fund cannot outperform the market*!_

While Vogel doesn’t say anything dishonest here, he masks the true picture by neglecting to mention that Storm’s model was based on heavy leverage, thereby converting a conservative strategy into a high risk strategy.


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## Igetit (25 January 2012)

SJG1974 said:


> Good to hear from you again shibby, the dog is obviously better?  You didn't stay away for long did you??
> 
> You are right, I am choking...I reread your post about Storm victims being sensible by double gearing into a strategy they don't understand!  But choking over this?  Why would that affect me?  Don't flatter yourself.
> 
> ...




Home from a little skiing in Austria, 

Thought I'd check in and see what you guys are getting up to.

Now SJG 1974 - I appreciate your common sense approach to investing: *"not gearing up to the gills or investing in strategies you didn't understand." *Wise, very wise. 

So with the: *"bad investment decisions I made"*, were they a result of:

a. your greed - chasing big returns, thinking you understood what you were doing but didn't really 
b. stupidity - for in spite of *"not investing in strategies you didn't understand"*, turns out in hindsight - you did exactly that. Apparently, really stupid, as you appear confident that: *"I will make bad investment decisions again".* 

Note to self: *disregard anything SJG 1974 has to say. Appears to have a learning deficit.*

c. laziness
d. naivety
e. you tell us what it was....Maybe just bad luck. 

But they were your *"bad decisions"* - right - and you lost out. You, Mr Conservative and Careful. Enlighten us. Why? What happened? If you have that funny feeling of being painted into a corner - well, dear friend - now's your chance to wriggle on out. How could someone so cautious, careful and thorough make a bad decision? I can't believe it! What mistake(s) did you make. The pensioners involved in the Storm debacle would like to learn from your experiences. I am sure you can see lots and lots of parallels between what they were exposed to and your own experiences with investment. One in the same right, SJG 1974?

Nice that you take responsibility for your errors though. Noble. 

Can't wait for this.


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## shibby (26 January 2012)

bunyip said:


> Storm duped their clients by passing their strategy off as low risk and conservative because it invested in Index funds that aimed only to duplicate the performance of the overall market.
> But you didn’t have to scratch far below the surface to see how this masked the true picture.
> 
> Sink 100 grand of your own money into an index fund. No borrowed money involved. A 10% rise in the market equates to a 10% return on your 100 grand, while a 10% fall equates to a 10% loss on your 100 grand.
> ...




Have you had a lobotomy Bunyip for the first time ever there are just facts.

Just for this exercise we leave out the "arrangements with the banks over funding".

Lets also leave out the "arrangements over LVR %"

So now that has been settled what would the responsibility of the Financial Advisor be under these circumstances?

To revert you to cash when your LVR has reached 98.7% or in some cases 126% 145%.


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## SJG1974 (26 January 2012)

Igetit said:


> Home from a little skiing in Austria, .




Good to see the fees the Storm victims are paying you to try and recover something from this mess enables you to get away for a while.  Good for you idontgetit.  Good for you.



Igetit said:


> So with the: *"bad investment decisions I made"*, were they a result of:
> a. your greed - chasing big returns, thinking you understood what you were doing but didn't really
> b. stupidity - for in spite of *"not investing in strategies you didn't understand"*, turns out in hindsight - you did exactly that. Apparently, really stupid, as you appear confident that: *"I will make bad investment decisions again”.* .




I guess with a GFC happening idontgetit, (you do know there was one don’t you….it wasn’t just storm victims duded by the banks that suffered through this) I was bound to lose some money by investing in  shares, unless I had a crystal ball or kept all my money in the bank.  Markets do go up and down you know?

My mistake was holding onto some investments for too long while the market kept slipping.  I probably should have got out earlier. Actually in hindsight I should have got out in December 2007.  But I didn’t.  Thankfully I liquidated most holdings in July 2008, so I only suffered probably half the loss that the sharemarket did.   My fault, no one elses.  I understood what I was doing, and I understood the risks in share investing.  And I chose to accept the risks. I took the risk, I copped the consequences when it went wrong. 

Perhaps I was greedy, probably was- I held on hoping to regain some of my value. I have been greedy before.  I have never said greed is a crime, I just think you should accept the consequences if your greed produces undesired results.  Again, old fashioned thinking I guess.

But I made the decision, no one else made it for me.  Rather than looking for someone to blame, I reflected on what I did and what I would have done differently.  Hopefully, next time I will make a better decision…I guess we will see.  But I am not for a minute thinking that I won’t make the odd bad investment decision in the future.  It would be stupid to think otherwise. Even Warren Buffet has bought the odd dud in his life.

I guess if you consider people who lose money stupid, then I was, and I will continue to be because as long as I have share investments, I can be sure that from time to time I will lose. But I am not stupid enough to risk everything in an extremely high risk strategy, Not take the time to understand what it is my life savings are being invested in, pay a small fortune for the privilege, and have a third party manage the whole lot for me.  That, dear friend, is stupidity.



Igetit said:


> Note to self: *disregard anything SJG 1974 has to say. Appears to have a learning deficit.* .




And good to see you disregarding your own advice in disregarding what I say idontgetit…you have obviously gone back through my posts to pose the questions you have.  Note to self…don’t take any advice from Idontgetit, because he doesn’t even take his own advice. Is not taking your own advice considered a learning deficit?  Perhaps that is a better definition of stupidity?



Igetit said:


> If you have that funny feeling of being painted into a corner - well, dear friend - now's your chance to wriggle on out. .




I do have a funny feeling, but that’s probably due to the curry I had for dinner last night rather than being painted into a corner.  I am happy to share what I did. (See what I did there?  I said what I did, not what they did to me!  A subtle but important difference I reckon.  I am sure you will disagree though old friend.).  But no need the wriggle, I have no issue admitting to mistakes I have made.  



Igetit said:


> The pensioners involved in the Storm debacle would like to learn from your experiences. I am sure you can see lots and lots of parallels between what they were exposed to and your own experiences with investment. One in the same right, SJG 1974? .




Given what some Storm victims have shown on this forum, they have no interest in learning anything.  All they are interested is in finding someone to blame for the decisions they made.

As for parallels, sure there are some parallels idontgetit…like Storm investors, I had investments in the sharemarket.  That’s probably where the similarities end actually.  The basic differences I can see are:

-	I diversified my portfolio between asset classes, not just between different shares
-	I understood the risks involved in what I was doing before I did it, not after I had suffered losses.  I took the time to bone up on what I was doing (crazy hey?)
-	I didn’t gear at all (let alone twice), therefore I couldn’t lose more than I invested.  And given the sharemarket only lost 50% of its value, I was never going to lose the whole lot.
-	I didn’t place ALL of my life savings in someone elses hands…I invested it myself
-	When I lost, I took responsibility for the decisions I made
-	I haven’t blamed anyone else for my woes.  Well, that’s not true, I reckon the CIA and the Queen of England have got off lightly on this one.  They were involved in the high level corruption up to their eyeballs.

So there you go.  Like every investor in the history of investing, I have made some bad decisions. No shame in that. I knew the risks, decided the risk was worth the potential rewards, and on this occasion lost. That’s life…that’s investing.  I am not blaming anyone and everyone else for my losses…because the decisions I made were mine and mine alone.  Thankfully due to a relatively cautious approach, the investment losses didn’t wipe me out…far from it, and I live to fight another day.

No such thing as a risk free investment, despite what a Greek in a sportsjacket might tell you.



Igetit said:


> Can't wait for this.




I hope it was worth the wait, but given you noted to yourself you will disregard everything I say, you probably won’t bother reading it anyway! Either that, or you will ignore your own advice or gut feel.  Which will it be???


----------



## Solly (26 January 2012)

Igetit said:


> Home from a little skiing in Austria,
> 
> Thought I'd check in and see what you guys are getting up to.
> 
> ...





Igetit, good to see that you have returned unscathed from the Alps to this forum. That reminds I must again try my luck again at MÃ¼hlbach am HochkÃ¶nig, although last time while en route I must say I did end up a litte worse for wear after a stay at the Hotel StieglbrÃ¤u. But that is another story and probably one that GG or John Birmingham would fully understand.

I was quite amazed that  SJG 1974 has admitted to making past bad investment decisions and is likely to make them again in the future. No doubt SJG 1974 will take full responsibility for those decisions and will never attempt to seek a remedy or compensation from any other parties that had input or influence in that flawed strategy. Each to their own, as they say. I'm making a guess that SJG is around 38, I wonder what SJG's attitude would be like if he/she was around 60 or 70 when investment 'mistakes' were made.

I totally agree with SJG's statement of not handing money over to FAs and expecting them to make you rich. I don't know of anybody who is 'rich' due solely to the advice of an adviser. I suppose some have worked out what industry I am in and certain people in this game take home multimillion dollar pay packets, others struggle to survive. The real wealth and high value lifestyle I see being made is through the spoils of the corporate world, not through the efforts of your local financial adviser who, drives a Mazda3, works 6 days/nights a week and who is themselves servicing a 30 year mortgage. I suppose my view on the financial advisory arena is that it is more like a savings bank but with slightly higher returns but those who choose to use the services of this industry should be afforded the basic protections, safeguards and harm minimisation that our society offers. 

One final thing about the spoils and riches of the corporate world, I have an associate who has a favourite saying which I'll share now.

"When it comes to making bucket loads, not everybody can have the financial acumen, marketing momentum, business wisdom and stage presence of a 'Kochie'."


S


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## SJG1974 (26 January 2012)

Solly said:


> I was quite amazed that  SJG 1974 has admitted to making past bad investment decisions and is likely to make them again in the future. No doubt SJG 1974 will take full responsibility for those decisions and will never attempt to seek a remedy or compensation from any other parties that had input or influence in that flawed strategy. Each to their own, as they say. I'm making a guess that SJG is around 38, I wonder what SJG's attitude would be like if he/she was around 60 or 70 when investment 'mistakes' were made.




I am not sure why you would be amazed Solly.  I have never professed to be some sort of investment guru....far from it.  As I said, I am sure everyone has made bad investment decisons at one time or another, from Peter Lynch, to Warren Buffet, to SJG1974, to even Solly (perhaps not, judging by your amazement).  What I have done though is taken an active interest in how my money is invested and developed an understanding of the risks involved.  My philosophy is if you can't be bothered giving your own investments the attention they deserve, then don't expect someone else to do it for you, no matter what promises they may make to you.

There are 'mistakes' and there are 'mistakes'.  Plonking $5,000 that you can afford to lose on a specualtive stock that goes down the tubes I would consider a mistake....but it won't wipe me out.  Riding a stock up past my exit point is a mistake, but it won't wipe me out.  I have been guilty of these things amongst others.  Borrowing against my home, gearing again, putting it all in shares and not having even a basic understanding of the risks involved I would also consider a mistake, but of a much higher magnitude.  Certainly, I have never made a mistake like this. Some would consider me lucky that I haven't made such a mistake.  I would call it being prudent.

I just choose to take responsibility for the investment choices I make.  Perhaps that is amazing in this day and age....it sure seems to be.  You mention full responsibility for decisions...well most Storm victims we have seen around these parts haven't even taken partial responsibility. And as i have mentioned time and time again, if laws were broken then I would hope and expect that the wrongdoers will pay.  I have no issue with that, despite some people for whatever reason thinking otherwise.

But, was it all the bank's and Storm's fault that some people lost the roofs over their heads, while other people who visited Storm walked away unscathed (by Storm, that is)? 

Like you, I am all for consumer protection where it is necessary...but it is impossible to protect people from themselves, and from making bad decisions.  I can guarantee there will continue to be scams around for as long as I am alive, and people will still be lured by the promise of a quick buck and get burned. 

Hopefully I will have enough common sense to say no in the future when someone tells me to borrow against my home, gear up again and plonk it all in shares.  Hopefully I will have the common sense to do some independent thinking and research rather than believe the words of the salesman who is selling me the dream.  Hopefully I will understand the risks, and if I don't, choose not to proceed.  Hopefully I will continue to diversify.

Even by doing this, I am sure I will make mistakes. Thats life.  Hopefully, though, if I follow the above, those mistakes won't completely wipe me out and result. 

There are no guarantees in life though are there...I guess time will tell.


----------



## Solly (26 January 2012)

SJG1974 said:


> I am not sure why you would be amazed Solly.  I have never professed to be some sort of investment guru....far from it.  As I said, I am sure everyone has made bad investment decisons at one time or another, from Peter Lynch, to Warren Buffet, to SJG1974, to even Solly (perhaps not, judging by your amazement).  What I have done though is taken an active interest in how my money is invested and developed an understanding of the risks involved.  My philosophy is if you can't be bothered giving your own investments the attention they deserve, then don't expect someone else to do it for you, no matter what promises they may make to you.
> 
> There are 'mistakes' and there are 'mistakes'.  Plonking $5,000 that you can afford to lose on a specualtive stock that goes down the tubes I would consider a mistake....but it won't wipe me out.  Riding a stock up past my exit point is a mistake, but it won't wipe me out.  I have been guilty of these things amongst others.  Borrowing against my home, gearing again, putting it all in shares and not having even a basic understanding of the risks involved I would also consider a mistake, but of a much higher magnitude.  Certainly, I have never made a mistake like this. Some would consider me lucky that I haven't made such a mistake.  I would call it being prudent.
> 
> ...




SJG1974,

I applaud you on your balanced and sensible approach, it is refreshing to see this stated and I hope others are influenced by your views.

Just more about my comments about investment derailments which occur in later life. My observations of the Stormers is that some come from a generation who are very trusting. Where a handshake sealed a deal, a person's word was a binding contract and intent to defraud was a far away concept. Unfortunately it appears in this over regulated and compliance focused world some innate basic values get buried in the layers. 

I acknowledge your view of blame and responsibility regarding the Stormers. I will be very interested to see where the regulatory authorities and the judiciary determine where the fault lies in this collapse.

S


----------



## SJG1974 (26 January 2012)

Solly said:


> SJG1974,
> 
> I applaud you on your balanced and sensible approach, it is refreshing to see this stated and I hope others are influenced by your views.
> 
> ...




Cheers Solly.

Like you, I will be interested in what comes of it all.  I am sure it will continue to be drawn out.  Again, I know there were many parties involved in all of this, and if people or companies are proven to have failed in their duties along the line, then I would hope they pay for their actions.


----------



## Igetit (26 January 2012)

Solly said:


> Igetit, good to see that you have returned unscathed from the Alps to this forum. That reminds I must again try my luck again at MÃ¼hlbach am HochkÃ¶nig, although last time while en route I must say I did end up a litte worse for wear after a stay at the Hotel StieglbrÃ¤u. But that is another story and probably one that GG or John Birmingham would fully understand.
> 
> I was quite amazed that  SJG 1974 has admitted to making past bad investment decisions and is likely to make them again in the future. No doubt SJG 1974 will take full responsibility for those decisions and will never attempt to seek a remedy or compensation from any other parties that had input or influence in that flawed strategy. Each to their own, as they say. I'm making a guess that SJG is around 38, I wonder what SJG's attitude would be like if he/she was around 60 or 70 when investment 'mistakes' were made.
> 
> ...




Hi Solly, 

Yes a lovely time was had by all. Tried some ice karting with the boys. Go karting of an ice rink. Everyone should try it. Once. 

Now, I have a funny feeling SJG 1974 doesn't wish to hear back from me directly - I have been told that one can block a posters response if they so choose. So I thought I would get back to him indirectly. 

Firstly, may I be perfectly clear that I am not a financial planner, nor lawyer, butcher, baker, candle.....More an advocate. Indeed, not only have I never received money from anyone connected with Storm, history will soon reveal that quite the converse is true. A little cryptic I know - I like it like that. 

Careful reading of my post will confirm that I never accused SJG 1974 of being *"stupid"*(although I am beginning to form a conclusion), I simply asked him to characterize the reason for his investment failures. He eventually decided upon *"greed"*. He then engaged in the traditional self praise about the nobility associated with his acknowledgement of his failure and the magnificent way in which he takes full responsibility for his decisions. A real man among men. He then drew a comparison of himself with Warren Buffet, there was some talk about curry and Greeks in sports coats etc, etc. 

The difficulty, however, with disparate situations is that comparisons are difficult to make - unless you dontgetit (again - I have resisted the urge to accuse him of stupidity - thankyou). Getting out of the market when he did was fine. His decision to make. Getting out of the market for a Storm Victim not so. They were reliant upon information fed down a chain from the BANK to STORM. As we know this data feed was fatally flawed and they were operating in darkness. And when I say they, I mean the BANK, STORM and the STORM VICTIMS.

Now, just to very clear, I am not interested in claims for compensation. I am interested in ensuring the blame for the position Storm victims now find themselves in, is laid squarely at the feet of the responsible party. That is not, never was and never will be the Storm client. Getit. For the decisions of the client could only be made based on information provided to them by the Margin Lender. No point saying they should not have geared. Irrelevant. They did and the Bank then had a duty of care to ensure the accuracy of their systems and the timeliness with which data was provided to *"their"* customer.

Now, compensation will flow deep and far once this is acknowledged. That time is fast approaching. That is good.

As for SJG 1974 - can I ask, given your cheeky inference that I am an *EX-STORM ADVISER *(I really am resisting the urge to accuse you of stupidity) seeking to cleanse my soul - do you get a bonus from the BANK each time you post from your desk at the office? Have you been asked to keep posting to try and break the resolve of the Stormies by belittling them and berating them and accusing them of greed, stupidity and laziness for not taking responsibility for their decisions? You see they did take responsibility for their decisions when they signed an agreement with the Bank to enter a Margin Loan Agreement. The BANK is now required *to take responsibility* for their management of *their* agreement, *their* Margin Lending Division, *their* ill-conceived manipulation of *their* clients LVR's, *their* failure to advise of the implications of this and the failure of *their* systems to trigger margin calls in a timely manner. GETIT. 

P.S The "IDON'TGETIT" thing - hysterical. Tears in my eyes. You must have taken forever to come up with that. Stupid? I don't think so.


----------



## shibby (26 January 2012)

SJG1974 said:


> Good to hear from you again shibby, the dog is obviously better?  You didn't stay away for long did you??




I didnt say I was going away I just said that it was silly to converse with you as we would never agree. 
Thank you the dog is better but it all is a matter of time as she is 14 years old, blind and deaf and she is getting old. I prepare myself for the worst and then she bounces back to her old self, with a slight deterioration in general health.


----------



## SJG1974 (26 January 2012)

Igetit said:


> Now, I have a funny feeling SJG 1974 doesn't wish to hear back from me directly - I have been told that one can block a posters response if they so choose. So I thought I would get back to him indirectly.  .




I am happy to hear back from you directly idontgetit.  Really I am.  I would think by now you would understand that given all the flak I have copped from the Stormers for daring to suggest that they are responsible for their decisions,  it takes a lot to offend or insult me. I hope you don’t think so highly of your witty remarks that they offend me?  Because trust me, they don’t.  I liken them to being slapped with a wet paper towel. So, no, I don’t ignore your posts, and for good reason.  Keep them coming.  Sometimes, they throw up a bit of gold.

I will try to be brief, because it appears the more words that are used, the more confused you become.  Firstly, your post goes over old ground, so no need to respond to the specifics.  And you choose to disregard what is written in front of you and go of on a tangent. I have also answered the questions you have posed previously, if you forgot the answers, try the search function.  Saves me from repeating myself. Not that it would matter.



Igetit said:


> P.S The "IDON'TGETIT" thing - hysterical. Tears in my eyes. You must have taken forever to come up with that..




Well whether you find the name funny or not doesn’t really matter to me…but the name has obviously got to you otherwise you would not comment on it.  I was looking for a reaction, and I got one.  Don’t you love it when the fish actually jump up onto the hook and take the bait? Don’t you idontgetit?

Secondly, the fact you took the time to respond to my post (and in a detailed way, and even via Solly so you could ensure I read it) is more noteworthy than the post itself, considering the following remark….



Igetit said:


> Note to self: disregard anything SJG 1974 has to say.




This brings us to the question of stupidity.

Some (including me) have questioned whether Storm victims were stupid for accepting Storm’s advice.  Some think yes, some think no. The debate will rage.
However, I think the answer is pretty clear cut when you think about individuals who don’t even follow their own advice…what do you reckon idontgetit? 


Igetit said:


> Stupid? I don’t think so.



  Well, the evidence is starting to mount against you I am afraid old friend……


----------



## SJG1974 (26 January 2012)

shibby said:


> I didnt say I was going away I just said that it was silly to converse with you as we would never agree.
> Thank you the dog is better but it all is a matter of time as she is 14 years old, blind and deaf and she is getting old. I prepare myself for the worst and then she bounces back to her old self, with a slight deterioration in general health.




Well shibby, I hope her remaining days, however many of them there are, are spent in as much comfort as possible and you can enjoy the time you get to spend with her.


----------



## Igetit (26 January 2012)

SJG1974 said:


> I am happy to hear back from you directly idontgetit.  Really I am.  I would think by now you would understand that given all the flak I have copped from the Stormers for daring to suggest that they are responsible for their decisions,  it takes a lot to offend or insult me. I hope you don’t think so highly of your witty remarks that they offend me?  Because trust me, they don’t.  I liken them to being slapped with a wet paper towel. So, no, I don’t ignore your posts, and for good reason.  Keep them coming.  Sometimes, they throw up a bit of gold.
> 
> I will try to be brief, because it appears the more words that are used, the more confused you become.  Firstly, your post goes over old ground, so no need to respond to the specifics.  And you choose to disregard what is written in front of you and go of on a tangent. I have also answered the questions you have posed previously, if you forgot the answers, try the search function.  Saves me from repeating myself. Not that it would matter.
> 
> ...




Hi SJG 1974, 

I am not sure what this post was for. However, speaking of mounting evidence, many of us think we've figured out what the "S" in SJG 1974 stands for. 

Now, just to put your posts in perspective. By your very recent admission you are an investor motivated by *"greed"* - the reason you gave for staying in the market for longer than you should have.

You subsequently decided to pull the pin when your strategy of "holding and waiting"  was not working. Some would say you "panicked" and sold - nothing particularly sophisticated or insightful about that. Now, I'm no stock market pundit - and clearly neither are you - but my readings tell me that "fear and greed" are the hallmarks of the mug stock punter. 

So as you sit back and compose your commentaries, bear in mind what you are and ask yourself what it is you bring to the table. Invective and derision and little else. Nothing more. You lack insight and are certainly not a person to be offering advice or putting yourself on some sort of higher intellectual ground or seeking explanations from others as if you are an investment guru to set them on the right track. GETIT. I thought your comparison of yourself with Warren Buffet was kinda cute by the way. Do you know what a Nero complex is?

You are an active investor. You certainly should take a great deal of interest in what you are investing in, but the Storm model was a passive one. I am not sure you even appreciate that difference my "*greedy*, panic-driven" friend. There, I feel confident that I have not gone off on a tangent. Pretty direct really.


----------



## Mindstorm (26 January 2012)

Hi all,

Bunyip, I've part quoted you here.

I'm not responding to your post in its entirety but I would like to point out that Luke Vogel was never, to my continued knowledge, a storm advisor.

It's my belief that he was employed by storm at one point, but his employment was not in any way related to advising clients.

I've seen this 'Luke Vogel was a storm advisor' in more than one post on this thread, and think that there are others who are obviously misinformed on this issue, but I think the whole objective of ASF is to publish information that is as true as it can be.

Obviously Mr Vogel doesn't read this forum or he would have told you this himself, or maybe he does and just thinks it's not relevant in the bigger 'picture'.

I'm happy to be corrected if anyone can supply us with concrete evidence that Luke Vogel was a storm advisor.

If he wasn't?  Are those here who said he was liable for possible accusations of slander or libel?

No offence intended, and apologies if I've offended anyone.

MS



bunyip said:


> The myth of the ‘conservative’ Storm strategy is promoted on the SICAG website in an article on margin lending written by former Storm adviser Luke Vogel.
> Here’s an extract from that article.....
> _
> *Essentially, the Storm model promised ‘average market returns’...nothing more, nothing less. Some media reports claimed that Storm clients were greedy because they were choosing high-risk high-return investment and that they got what they deserved. Clearly, an index fund cannot outperform the market*!_
> ...


----------



## SJG1974 (26 January 2012)

Igetit said:


> Hi SJG 1974,
> 
> I am not sure what this post was for. However, speaking of mounting evidence, many of us think we've figured out what the "S" in SJG 1974 stands for.
> 
> ...




 I have gotten to you haven't I?


----------



## Solly (26 January 2012)

Mindstorm said:


> Hi all,
> 
> Bunyip, I've part quoted you here.
> 
> ...




MS

I believe Luke Vogel was a staff member and not an adviser.

There was this article that did state that he was an adviser.

http://redcliffe-and-bayside-herald...nvestors-counting-the-cost-of-storm-collapse/

S


----------



## Igetit (26 January 2012)

SJG1974 said:


> I have gotten to you haven't I?




That is extraordinary. I was just thinking the same thing about you. 

Now for all those out there who were wondering about the nature and intent of your posts. Let there be no mistake. You are here as an irritant. Trying to *"get to people"*. What a fascinating life you lead. 

Best wait for Julia to get back to help you with your responses. I notice your grammar and clarity drops off when she's away. Now back to the tennis.


----------



## SJG1974 (26 January 2012)

Igetit said:


> Trying to *"get to people"*.




Replace "people" with "idontgetit" and you would be on the money.

Like shooting fish in a barrel.  Ahh, its good to have you back idontgetit, it really is!


----------



## SJG1974 (27 January 2012)

What a night hey idontgetit?  Tennis was great wasn't it?

I guess in all the commotion, and through all of your personal pot shots last night I happened to overlook something you said which is probably quite relevant (and you really should settle down, getting so worked up over anonymous internet posters isn't healthy).

Now let me state from the outset that I don't care what you think of me and the way I invest my money.  That much is certain.  If you think I am greedy, panic driven, stupid, whatever, I don't really care.  If you interpret the honest answers I gave to a question you asked in a certain, twisted way, then that is you prerogative. Again to me you are just another no name on the internet….I know nothing about you and don’t want to. 



Igetit said:


> You are an active investor. You certainly should take a great deal of interest in what you are investing in, but the Storm model was a passive one. I am not sure you even appreciate that difference my "*greedy*, panic-driven" friend. There, I feel confident that I have not gone off on a tangent. Pretty direct really.




This is an ill informed comment and really flies in the face of the whole margin lending strategy on its own.  And you seem to be mistaking passive investments for passive strategy.  I may be a mug punter in your eyes, but of this I do know the difference. You apparently do not.

I would think a passive strategy (remember, we are talking strategy, or “model’, not investment- there is a difference you know) would be something that you put in place and leave there.
Just because the investments in index funds may have been passive, does not mean they can’t be actively managed.  

Two points to note with your ill informed comments:

1.	We have heard from Storm clients that they were told Storm would manage their portfolio and had trigger points to get out if things got bad.  Passive investment, active strategy. In fact, this seems to have been the misguided premise for a lot of these people to have taken such a high risk in the first place, that Storm would protect them by actively managing.  The fact they didn’t doesn’t change this premise one bit. Add to this that Storm and through them investors added to their “passive” investment over time, at different trigger points initiated by storm.  So this strategy is so far from passive it is not funny.

2.	A margin loan, by definition, is active.  It has built in trigger points which trigger a decision on what to do when the investment reaches a certain level, as you well know.  Passive?  I hardly think so.

Now I know full well that the trigger points did not happen until much later than they should have, and that seems to be the basis of your case against the banks.  And fair enough.  As I have said all along (and you have conveniently ignored time after time), someone needs to pay for not enacting the margin calls on time.  I guess we will find out just whose responsibility that was when the courts decide for us.

And you know full well that not getting a margin call at 80% LVR is not what screwed these people- double gearing was.  The margin call situation just took them from screwed to more screwed. It may not suit your argument but that is the fact.

In fact, having done some rough numbers with my adviser (who “inherited” a Storm client from Paul Florence in Melbourne), we figured that a sample client who took a $400K loan against his house, added this to his $500K super fund, and geared it up 50% in November 2007 by using this high risk strategy would have been in negative equity when the market was down just 28%. That is sometime in the middle of 2008, certainly well before September and the fall of Lehmann Brothers, and well before the **** hit the fan at Storm Central. Well before the scrambled data started conveniently getting through to Storm and prevented the adviser from “actively” managing the portfolios.

At that point, the LVR on the margin loan was an acceptable 69%. In fact, by the time the margin call should have come, the market would have fallen around 37.5%, by which time that client is well and truly in negative equity (again due to the effect of double gearing). 



Igetit said:


> No point saying they should not have geared. Irrelevant. They did and the Bank then had a duty of care to ensure the accuracy of their systems and the timeliness with which data was provided to "their" customer.




So you see, it did matter that these clients double geared.  It mattered a lot. It may not matter to you in the context of going after the banks for what they did or didn’t do at margin call time, but it sure as hell mattered to these clients, who were screwed well before the banks’ inactivity on margin calls, or the scrambled data came through to Storm HQ.  Because they were shot by then, not by the banks, but by the Strategy, or model.

So for these clients, what events took place that led to their loss, and who is responsible?
-	Was it the fact they signed on for the strategy in the first place?
-	Was it that Storm didn’t actively manage their portfolio like they said they would?
-	Was it the banks and Storm increasing the LVR without telling the clients?
-	Was it Storm central not letting clients get out (as shabby has shown) when they tried to?
-	Was it the scrambled data that got through to Storm in late 2008?
-	Was it the inaction on portfolios when the LVR went beyond margin call territory?
-	Was it clients being forcefully sold out at the end, with no chance of recovery?
I would think that at every point above (and I am sure many others) the action or inaction of the parties involved contributed to clients’ loss.  And at every point, where wrong was done, the wrongdoers should pay.

But, as I have said from day one, of all the points above, none would have even been an issue to these people, if event number 1 above did not occur.  And that is where Storm clients’ responsibility in all of this lies; in their decision to sign up to a high risk strategy in the first place. No they shouldn’t blame themselves for their mess, but they should at least take some responsibility for making the decision they did in the first place, no matter why they made the decision and no matter how much they understood the strategy.  It appears many, including your mate Frank, can't even do that.  What sort of a society do we live in where people cant take responsibility for the decisions and choice they make?

That’s my opinion, and the thing with opinions is they are neither right nor wrong, despite what people like you may think.

Time to go and enjoy the rest of the Australia Day weekend.


----------



## doobsy (27 January 2012)

Knowledge from the darkside:

I will try to get back to some other points throughout the day if I get a chance but I want to clear something up immediately.

SCRAMBLED DATA = BS

It was an INDEX FUND!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Unit price was available on a daily basis directly from Colonial or Challenger depending on which fund the client got.

Unit price x units = value.

The margin lender had correct data on the debt levels, that we know.

I could spend 20 minutes on Excel and design up a spreadsheet to give me up to date LVR positions, how far from buffer, how much more the market would need to drop etc etc.

Keeping it up to date - wow that would be hard, there were only about 4 mini index funds (technology, industrials, etc) that storm used. That would take all of 30sec to put in the new unit price of a morning. We know the debt levels were static unless a step was taken or interest was capitalised. In the crisis there were no steps so.........

Lets all accept that the margin loan fiasco is the first step in fixing things by the banks. No client should have ended up with negative equity and I think Macquarie will end up accepting this.

However as was just pointed out, bring them back to getting a margin call at 90%, or go even further and disallow the "arrangement" and make the margin call at 80%. They have still lost ALL of their original capital.

Speaking of the arrangement - much BS on this not being disclosed. It was disclosed on the margin loan statements. It was disclosed in the SOA's. It was clear that the Storm Index funds had a gearing level of 80% which means margin call at 90%. Even those clients who had been with Storm pre the "arrangement" being made would have had a "step" SOA which would have disclosed that information.

If clients were unaware then that falls on the Storm advisers not disclosing it. Again it is not up to the bank (in this case Macquarie) to get clients to acknowledge it.


----------



## bunyip (27 January 2012)

shibby said:


> Just for this exercise we leave out the "arrangements with the banks over funding".
> 
> Lets also leave out the "arrangements over LVR %"
> 
> ...




Your questions are of no interest to me. Perhaps someone else may care to help you with those enquiries.

What _does_ interest me though is that you went ahead and signed on with Storm even though your own figures gave you cause to have serious reservations about their strategy.

I wondered why you'd be so imprudent, but then I remembered you admitting that you were gullible and naive.
I think we could add that you showed a lack of common sense as well.

Ah well - live and learn. Guess you'll do things differently next time.


----------



## shibby (27 January 2012)

shibby said:


> I have taken this from the Brisbane Times Article
> 
> *I would really like the Financial Advisors out there to comment on this article if possible.
> 
> ...



*

Bunyip
Note I said I really would like Financial Advisors to reply.
So now your a Financial Advisor? Presumably with a Bank!


Bunyip Quote#6654
Your questions are of no interest to me. Perhaps someone else may care to help you with those enquiries.

What does interest me though is that you went ahead and signed on with Storm even though your own figures gave you cause to have serious reservations about their strategy.

I wondered why you'd be so imprudent, but then I remembered you admitting that you were gullible and naive.
 I think we could add that you showed a lack of common sense as well.

Ah well - live and learn. Guess you'll do things differently next time. 

In response to the blah! blah! blah! above - here we go again rabitting on as usual the same ol same ol. A step backwards yet again.*


----------



## maccka (27 January 2012)

doobsy said:


> SCRAMBLED DATA = BS
> 
> It was an INDEX FUND!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
> 
> ...




Doobsy,  there were a number of days (at critical times) when the index funds were frozen/suspended.  There was no trading and therefore no unit price was available.  

Null x units = null information available.  

As I keep saying...the situation is NOT black and white.  



doobsy said:


> The margin lender had correct data on the debt levels, that we know.
> 
> I could spend 20 minutes on Excel and design up a spreadsheet to give me up to date LVR positions, how far from buffer, how much more the market would need to drop etc etc.




You make an assumption here. In a world where you trust systems it would be a reasonable one to make... 


doobsy said:


> The margin lender had correct data on the debt levels, that we know.




Unfortunately that assumption is a fatally flawed one and there is mountains of evidence that proves otherwise.  Interesting to note that if you were to go down the path of trusting systems you would find yourself in similar situations as many others that trusted... (and wouldn't that be ironic?) I wonder if that would make you "gullible and naive"?

The data coming out of the systems was dangerously inconsistent and on an unacceptable number of occasions (i.e. more than zero times) wrong.  Therefore any excel spreadsheet you design will give you incorrect figures if you rely on the data as being correct.  It doesn't matter how good you are at designing databases and spreadsheets as the effort will be a gigantic waste of time.  In the IT industry it is a RIRO error. 

Rubbish In Rubbish Out.  

(Could be equated to a lot of the stuff I've read lately really! )

Cheers
Maccka


----------



## Harleyquin (27 January 2012)

Reports that FoFA will mean that fewer people will seek financial advice may well prove to be true.

Just seeing what happened with Storm Financial and other financial planners that went down the tube should be more than enough to be extremely wary.


----------



## maccka (27 January 2012)

For Doobsy et al claiming to want the truth....

You may find some of the answers to your questions here:

http://www.commonwealthbankdeception.com/index.php

I have to warn you though that for those in serious denial it will prove to be full of inconvenient truths.

Cheers
Maccka


PS Doobsy you might find this page particularly relevant to your claims on how terribly simple it would have been to keep track of the portfolio values (read right to the end).
http://www.commonwealthbankdeception.com/art016.htm


----------



## Solly (27 January 2012)

maccka said:


> For Doobsy et al claiming to want the truth....
> 
> You may find some of the answers to your questions here:
> 
> ...




Thanks Maccka,

I found the posting

*Ian Narev thinks 'yes' means 'no' by "Tommy Tucker"* 
http://www.commonwealthbankdeception.com/art016.htm

a very interesting read.


S


----------



## maccka (27 January 2012)

Solly said:


> Thanks Maccka,
> 
> I found the posting
> 
> ...




Hi Solly,

There is a wealth of interesting information on that site.  The supporting documentation is quite interesting also.

Cheers
Maccka


----------



## SJG1974 (27 January 2012)

H







maccka said:


> Hi Solly,
> 
> There is a wealth of interesting information on that site.  The supporting documentation is quite interesting also.
> 
> ...




Do you know who runs the site Maccka? Having read a couple of articles, I am guessing that some ex Storm employees are involved, given the apparent absence of criticism of Storm itself (mind you I only read a few articles).


----------



## maccka (27 January 2012)

SJG1974 said:


> H
> 
> Do you know who runs the site Maccka? Having read a couple of articles, I am guessing that some ex Storm employees are involved, given the apparent absence of criticism of Storm itself (mind you I only read a few articles).




Hi SJG1974,

I am not totally sure. I don't believe I know them personally.  I do believe the site is run by some ex Storm clients volunteering their time and skills to uncover the truth.  I think I read that somewhere however I have no recollection where.  They have been working extremely hard uncovering documentary evidence from an extremely wide range of sources.  Their documentation seems to come from most of the major entities tied into this. 

I have to say that there are a number of ex Storm staff who have been very instrumental in helping people understand more fully what happened.  The shame is that all the ex Storm staff (whether they were advisors or not) get tarred with the same very uncomplimentary brush.

I'd highly recommend you read the entire site.  They have documents (available on the site) to support almost every (if not every) major allegation they make.  

Cheers
Maccka


----------



## Igetit (27 January 2012)

doobsy said:


> Knowledge from the darkside:
> 
> I will try to get back to some other points throughout the day if I get a chance but I want to clear something up immediately.
> 
> ...




Hi Doobsy,

You have been very kind with your time with me on a couple of occasionas - and I have been very greatful. So I write this to you now with good intent.

The Margin Lender did NOT have correct data on DEBT LEVELS. in fact there are 5 day periods during OCT 08 where LVR'S on client files did not alter. There were other periods when Funds were frozen completely. 

Further, altering something on a Margin Loan Statement as significant as the LVR - and not thoroughly explaining the implications of this to their client - may constitute negligence in the event the client sustains damage. It was NOT Storm's responsibility to explain the implications of this to the client. It was the BANK'S. It was their decision to change the LVR. It was their product. It was their responsibility. 

I have had occasion to give evidence in Court on medico-legal matters and in the event a patient did NOT understand the informed consent he/she signed prior to their operation, the treating physician is deemed liable for any injury sustained by the patient. That is to say: although the patient may have signed a consent for surgery, if they did NOT fully understand the risks associated with the operation, the Doctor is left to explain himself/herself. The Court tends to frown on the Doctor. 

I hear tell, something similar may be confronting the BANK.

Would like to hear from you. All a bit gray I know. But, I think this may be a sticking point for the BANK going forward.


----------



## bunyip (28 January 2012)

shibby said:


> Bunyip
> Note I said I really would like Financial Advisors to reply.
> So now your a Financial Advisor? Presumably with a Bank!
> 
> ...




I replied to your post No. 6636 on page 332 which you made in response to an earlier post of mine.
In your post 6636 (which is quoted in its entirety in bold print below) you'll see that you *did not* ask financial advisers to reply.
*
Have you had a lobotomy Bunyip for the first time ever there are just facts.

Just for this exercise we leave out the "arrangements with the banks over funding".

Lets also leave out the "arrangements over LVR %"

So now that has been settled what would the responsibility of the Financial Advisor be under these circumstances?

To revert you to cash when your LVR has reached 98.7% or in some cases 126% 145%. *


As for _'the same 'ol, a step backward'_ etc etc, I note that you spend considerable time yourself going over old ground and rehashing what has already been said.

This thread can serve a useful purpose if we analyse all aspects of the Storm situation. Only by doing so can we....... 
* Formulate ways to avoid past mistakes. 
* Uncover any illegality that may have occurred. 
* Help those people who still can't seem to understand what went wrong or how they got caught.
* Help people who may read this thread in five years time when they're considering investing for the first time.
* Help people avoid falling into the same traps again that brought them undone last time.

I'm happy to stand back from the discussion on banks - I'll leave that aspect of the situation to those with a more in-depth knowledge in that area than myself. In the end the courts will decide what the banks have or haven't done, and how much compensation, if any, they must pay. 

My area of interest in all this is the human aspect. Specifically, what mistakes did the Stormers make, how could they have avoided the errors of judgment that resulted in them signing up with Storm.
Since it was errors of judgment and bad decisions that started the ball rolling, I think this area warrants discussion if those same mistakes are to be avoided from here on.
That’s why I persist in commenting on the actions and mistakes of people like you.

I don't and never have worked in the banking or financial advisory industries, I don't have a BEc like you, I've had no formal education in finance or economics. 
Yet if anyone had asked me to give my opinion on the proposal put to them by Storm Financial, it would have taken me no more than two minutes with a pocket calculator to demonstrate to them just how deadly risky the Storm strategy was.

In a future post I intend to do exactly that.
In the meantime, although it will undoubtedly upset you, I'll continue to comment on the mistakes and actions of people like you, and how they could have avoided their mistakes.


----------



## Frank Ainslie (28 January 2012)

*An Easter Bunny story in advance.*

Last night I had a very strange dream. In it Helen and I were rich again. She wanted to invest in shares but I said, _“No! I want to buy the most expensive car possible  so I can impress all our friends!"_ I'm shallow like that! I had my way which is most unusual where Helen is concerned, but then there’s a first time for everything!

In a dealer’s yard, a second-hand Mercedes stood out from the rest. I say second-hand because Helen still wanted a bit left over to put in shares and I thought I had better humour her. The dealer assured us that it had only done a few ks, had built in safety features (roll bars etc) and had been fully maintained. It was so expensive that I immediately assumed that it was the best that money could buy. Further, it came with a warranty although I admit I didn't read through the small print. Who does where warranties are concerned?

For a few months, all went well until we were driving along the freeway one day and a front wheel came off! This caused the car to veer into another lane and Helen and I were killed in the ensuing pile up. **** happens! 

Our children decided to sue the dealer that sold us the car because it was found that the car did not have the safety features that we were assured it had (that would probably have saved our lives) and the wheel had come off because the front axle had rusted through due to lack of maintenance. There were a number of other faults as well that we hadn't been told about but they hadn't led to our demise.

Our lawyers were ecstatic pre-trial because almost everything the dealer had told us turned out to be false. They kept muttering something about “full disclosure” to our children.

The trial ended and the jury found that the dealer was _“Not guilty!”_ Our children were distraught and so were we even though we were floating through the ether at this time and could only look in from afar.

_“What happened?”_ One of our lawyer’s exclaimed. _"This was an open and shut case of fraud."_

The other replied, _"There were three people on the jury that persuaded the rest that these old farts (1) must have been plain greedy to buy such an expensive car, (2) should have put it up on a hoist so they could have examined it mechanically and (3) should have ensured that the safety features were as advertised rather than taking the dealer’s word for it."_

_“But they lied! We trusted them!"_ we shouted but no one could hear us because we had already passed on. 

The lawyers kept shaking their heads in disbelief. _“Some people!”_ one muttered. 

That’s when Julia, SJG1974 and Bunyip filed past them having just left the jury room. Bunyip said as they disappeared down the hall, _“Anyone that can afford a car like that is just plain greedy and deserves everything they get!”_ 

Julia replied, _"People must be thick if they can't see what is obvious to anyone with a bit of common-sense!"_ 

SJG1974 not wishing to be left out added, _"Can someone explain to me why people with all that money bought a car like that? It would be far more suitable for a person like me that richly deserves it!"_ 

Bunyip muttered, _"Absolutely!"_ as they walked out the door.

_“I’m sorry!”_ one of the lawyers said turning to our children. “_The law is sometimes an ass and so are some members of the jury. It’s a funny old world and no mistake! _

The fab three decided to ride home together in Bunyip’s car. Guess what! He crashed and they were all left in wheelchairs. _“You bloody fool!”_ Julia screamed at him once she was able to open her mouth again. _“Why didn’t you run over that rabbit rather than swerving into a tree! “_

_"I don’t understand it! Buniyip replied. I’ve never had an accident before!_

_“No matter!”_ SJG1974 exclaimed. _“I’m going to sue the **** off you anyway!” _ 

Bunnyip had nothing to fear as it turned out! The jury were rabbit lovers and Bunyip was subsequently acquitted whilst the other two were charged with being cruel to rabbits. 

The moral of this story! Don’t mix with rabbits or you may end up like them!


----------



## shibby (28 January 2012)

bunyip said:


> I replied to your post No. 6636 on page 332 which you made in response to an earlier post of mine.
> In your post 6636 (which is quoted in its entirety in bold print below) you'll see that you *did not* ask financial advisers to reply.
> *
> *



*

You are right Bunyip - I thought you were responding to #6628.
I never thought I would ever say you were right about anything in fact this is the second time I have attempted to post this. 
The first attempt disappeared into the heavens never to be seen again (some one is trying to warn me off me thinks) but good manners prevail, you are right but let me clarify, only in reference to asking financial advisors to reply.*


----------



## Harleyquin (28 January 2012)

Love the Easter Bunny story Frank.  Made my day and I'm still laughing.

Is that just the first chapter...or the whole book???


----------



## SJG1974 (29 January 2012)

Frank Ainslie said:


> *An Easter Bunny story in advance.*




Wow!  
 

Frank, what on earth was that? Judging by that nonsensical drivel, I am guessing your book didn’t sell too well?

And I thought that idontgetit had lost it with his claim that the Storm strategy of actively managing a margin lending portfolio was passive and that it wasn't double gearing that caused clients to go into negative equity, but rather the margin call fiasco.  I mean that was utter nonsense and now we have this!

What on earth is going on around here?  I didn’t realise Storm also conducted lobotomies as well as fleecing clients of their lifesavings!

:cuckoo:


----------



## bunyip (29 January 2012)

SJG1974 said:


> Wow!
> 
> 
> Frank, what on earth was that? Judging by that nonsensical drivel, I am guessing your book didn’t sell too well?
> ...




I don’t know about Storm conducting lobotomies, but I do notice that they seem to have caused amnesia in some people who were associated with them.

First there was Cassamatis claiming that the market crash of 2007/08 was unprecedented – clearly he was unable to recall the 1987 crash 20 years earlier.

Then when he was questioned at the inquiry, this same esteemed ‘gentleman’ couldn’t remember whether he was the CEO of Storm Financial.

Now we have Frank who can't remember why he decided to hand over 140 grand to Storm, mortgage his home and shove his own money plus a power of borrowed money into the stock market when he was 65 years old, debt-free, and already well set up for a very comfortable retirement!


----------



## Smiley (29 January 2012)

The website with quotes re commonwealth bank deception, reads like a Manny outburst. . . blame the banks - well cwb has at least admitted its errors, even though I can understand some dissatisfaction re the res scheme.

Manny never will admit responsibiliy - at this point I think he is deluded - that he cannot believe the world would do this to him . . . have a gfc  . . . it was his plans, his business, his dealings, that let down his clients. Sure blame the banks (I have seen plenty of dodgy paperwork re all the banks involved inthis fiascot),  but do not let the Cassimatises off the hook.

RE the website - to say his old enemies in Townsville - those he maligned - eg Cary Ramm and others are responsible for Manny's problems is delusional.  I am not a friend of the latter nor of Tony Raggatt, the newspaper reporter who is also maligned on the website, but again it smacks of Manny who used to sue or threaten any people he did not like.

Documents are there but not quoted in full.  While Manny was asked by ASIC to undertake to not have his advisers give advice in Dec - he never signed it, never agreed to it but told advisers not to give advice.  The poor coffee girls who answered the phone (know one of them presonally) were instructed to tell everyone everything was fine. . . .

Lessons from Storm  . .
1) educate yourself in all matters financial
2) never get a loan against something you do not want to risk
3) do not invest in what you do not understand
4) if you are a senior make use of the free financial information service officers at Centrelink
5) most importanly, if it is financially too good to be true . . . it is not good at all


----------



## doobsy (29 January 2012)

Igetit said:


> Hi Doobsy,
> 
> You have been very kind with your time with me on a couple of occasionas - and I have been very greatful. So I write this to you now with good intent.
> 
> ...




Igetit and Macca

To this very day the terms and conditions of any margin loan contract include a clause about LVR. First one I found was suncorps:

"the Loan-to-Value Ratio is the percentage of value of each of the securities in your portfolio that you can borrow. We determine what the LVR is, and can change it at any time, including reducing it to zero."

Don't like the rules - don't play the game. Wasn't like no one knew the rules just that good times meant that parties had chosen to ignore the rules involved risks.

All information was readily available to advisers and clients.

On the scrambled data - The margin lenders knew the levels of debt. Of course they did, it was them lending the money. When has a bank ever not known how much they lent you.

Did they know the correct value of the funds? Maybe not for a few days in October. But my point is that storm would have had access to both lots of data. They had the data from the margin lender and they had the units and unit price (even if it was only the latest) for the funds.

Pushing further - October 08 and it was all over, markets were already 40% down. The funds froze up because you can't try to dump $4B into a falling market and expect it to all go through. The funds also needed a certain amount invested to make it viable to even run them. When EC started the panic selling to protect LVR's the funds pretty quickly emptied and both CFS and Challenger figured that there was no point keeping the funds open with no to little investments left.

My spreadsheet would work just fine.

Lets look at some questions:

1. Could storm find out the current margin loan levels? YES - easily - off the website. As they pushed most people to capitalise and prepay interest in advance, for the remainder of the year there were no other transactions other than steps. So for most clients they wouldn't have been taking on additional lending in 2008 so the debt figure should have been static I would have thought.

2. Did Storm know how many units in the investments that clients had? YES - easily - regular reporting, I would assume some sort of website access, datafeeds. They seemed to be on top of these figures in the good times. Again unless more investments occurred then the figure doesn't change. Not exactly rocket science so far.

3. Did Storm know the unit price? PROBABLY - CFS and Challenger are both big operators who managed to keep all their other funds with daily unit pricing where possible (where the assets could be valued). Storm funds were index funds so they simply reflect the underlying stocks right? So if we are talking about the industrials then get the top 200 industrials stocks and their price and we get the fund price? To my knowledge that is how it works. OK I am ignoring some small levels of tilts etc but simply by looking at what the underlying sub index (industrials, technology) had done on a certain day (info available from EVERYWHERE) you could confidently say the INDEX FUND had performed accordingly.

So I think Storm should have easily known what position their clients were in at all times.

Frank  - Great story but unfortunately your anaology again would reflect in the dealer being storm and being to blame. Or do you want to change it to say the manufacturer (Mercedes) are to blame? Maybe you can include a known risk to that model that involved a recall that was advertised and could easily be controlled that the previous owner and caryard failed to disclose. Then it should still be Mercedes fault? Or maybe because Mercedes rewarded that Car Yard dealer with a special deal because he pushed so many second hand mercedes they must be in a Unregistered Managed Car Dealing scheme?

Too nice a day for this, I'm going to play golf.


----------



## Frank Ainslie (29 January 2012)

Harleyquin said:


> Love the Easter Bunny story Frank.  Made my day and I'm still laughing.
> 
> Is that just the first chapter...or the whole book???




Hi HQ!

Only the one chapter I'm afraid. I found the characters in it too unsavoury and somewhat lacking in credibility. 

Seriously though, the Fab Three have provided us with many good belly laughs in the last few months by spouting vacuous truths so we should be grateful for that. I thought it only fair to return the favour. 

It's been somewhat quite on the Storm front lately so I'm writing again. I'll still look in on ASF though in the hope that someone in the other camp eventually has something to say that is relevant.  They never seem to get sick of rehashing the same old hackneyed themes, _'Greed', 'Stupidity'_, and _'Mia Culpa'_. Boring! Boring! Boring! They have been told on a number of occasions to move things along but it doesn't suit them because this will give them nothing else to talk about. Now wouldn't that be a shame!

One has to ask one's self, _"Are they worth bothering with anyway?_ To my mind, they are not so why do we expend our energy needlessly in this regard? Doing so only serves to encourage them further. Starve them of attention and they will eventually resort to talking among themselves. Then, at least,  they can bore each other to death rather than the rest of us.


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## SJG1974 (29 January 2012)

Frank Ainslie said:


> Only the one chapter I'm afraid. I found the characters in it too unsavoury and somewhat lacking in credibility.




That was my initial impression also Frank.  

Perhaps next time, to add credibility, don't base the story on yourself.


----------



## Garpal Gumnut (29 January 2012)

maccka said:


> For Doobsy et al claiming to want the truth....
> 
> You may find some of the answers to your questions here:
> 
> ...






Solly said:


> Thanks Maccka,
> 
> I found the posting
> 
> ...






SJG1974 said:


> H
> 
> Do you know who runs the site Maccka? Having read a couple of articles, I am guessing that some ex Storm employees are involved, given the apparent absence of criticism of Storm itself (mind you I only read a few articles).






maccka said:


> Hi SJG1974,
> 
> I am not totally sure. I don't believe I know them personally.  I do believe the site is run by some ex Storm clients volunteering their time and skills to uncover the truth.  I think I read that somewhere however I have no recollection where.  They have been working extremely hard uncovering documentary evidence from an extremely wide range of sources.  Their documentation seems to come from most of the major entities tied into this.
> 
> ...




Thanks Maccka,

I have been through all the documents on this site, and I would agree with you that it does give a different view to the Storm fiasco than is current in the main stream media, the Inquiry and by ASIC. It is also at variance with many posters perceptions on ASF. Then again they are just perceptions and you and your fellow Storm investors are closer to the coalface than the posters.

It does seem to have a very broad brush, with many statements, not necessarily backed up by facts or evidence.

There is some spleen against former and current competitors and critics of Emmanuel Cassimatis, so much so, that it detracts from the possible veracity of some of the documents. 

The author(s) seem to hold Emmanuel in very, very, high regard. So much so that a Narcissus might be forgiven for demanding a fee for carrying them on his back as he bent over the pool. Then Echo is always about.

Thank you for alerting me to the site as it gives a singularly different view of the saga.

Let us hope that future investors do not get entangled in a similar web.

gg


----------



## bunyip (29 January 2012)

Frank

This forum is fortunate indeed to have a story teller of your caliber to lighten the mood with your amusing yarns.
In fact there have been so many amusing stories in your posts that I think I should honor you by putting together a summarised portfolio of your wondrous


----------



## Judd (30 January 2012)

Smiley said:


> ....
> RE the website - to say his old enemies in Townsville - those he maligned - eg Cary Ramm and others are responsible for Manny's problems is delusional.  I am not a friend of the latter nor of Tony Raggatt, the newspaper reporter who is also maligned on the website, but again it smacks of Manny who used to sue or threaten any people he did not like.




Michael West must be thanking his lucky stars that he doesn't live in Townsville.

Darn odd web-site too.  Sure they are not smoking some Colombian Gold or other strong Mary J?


----------



## maccka (30 January 2012)

Garpal Gumnut said:


> Thanks Maccka,
> 
> I have been through all the documents on this site, and I would agree with you that it does give a different view to the Storm fiasco than is current in the main stream media, the Inquiry and by ASIC. It is also at variance with many posters perceptions on ASF. Then again they are just perceptions and you and your fellow Storm investors are closer to the coalface than the posters.
> 
> ...




Thank you GG.  There are obviously a range of authors (some of whom bring very interesting biases with them) contributing to this site.  Consequently there are some articles that I see as having more value than others.  Certainly the articles that back up their claims with documentary evidence are the ones that most capture my attention and trust.  

I know that there are millions of documents out there that hold important keys to what happened.  I am grateful that there are people in various institutions (including banks and SF) who are willing to share what they know.  All the pieces fit somehow.  It's just a matter of finding the key pieces that will help us unravel it.

While answers are important for the Stormers (and their families) trying to deal with what happened they are also important to trying to ensure that the chances of it happening again are reduced.

I think we will see a lot more come out of this site in the future.  The coalition behind it seem to be on a mission.  They have a wealth of information at their fingertips and generally they are divulging it in a very strategic manner.  Little by little.  Building up a case that is turning heads and getting attention.  I'd love to see some of the traffic stats on that site.  I'd love to know who was reading it and what offices they sit in and see their reactions when key documents and facts come to light. 

cheers
Maccka


----------



## Frank Ainslie (30 January 2012)

*Real-life stories are sometimes stranger than fiction and certainly more relevant!*

The one thing that has become evident to me whilst I have been a member of this forum is that whilst many have an understanding of financial matters, few if any have a real understanding of what really took place between Storm and the Banks, and very few also have a real understanding of the law. Yet, in to order to objectively discuss the issues relating to Storm and the Banks, these two factors are a pre-requisite because they lie at the heart of the matter. 

Some like Doobsy have been very informative in their postings but they for the most part concentrate on what should have taken place. Don’t get me wrong! I think many, myself included, appreciate his explanations on many issues relating to the financial aspects involved, but his explanations are always along the same lines; namely known banking practices and financial systems that are the norm. What happened in the case of Storm and the banks involved with it has no bearing whatsoever on what is construed as normal practice – rather malpractice. Therefore, to have a true understanding of the issues involved, you need to come to grips with what really happened and also be made aware of the many transgressions that occurred that will now have legal implications for Storm and the Banks. 

Until people on this forum fully understand what occurred, they will never be able to grasp why we and ASIC are pursuing the Banks involved with Storm through the Courts. Therefore, any opinions expressed so far are based on nothing more than member’s personal opinions (and prejudices) based on media releases and other suspect sources. The facts are everything or any debate becomes meaningless.

The equation is a simple one! *“The actions by Storm and certain banks resulted in our losses!”* One doesn’t go without the other! One doesn’t need to go beyond this point! 

In order to understand the affects the Storm debacle had on our investments and the resulting losses, one needs to understand the cause. In the next few weeks (between chapters of my new book) I’ll endeavour to break down the various aspects of our case and explain in detail why we feel that our grievances are warranted, and I'll also outline the legal issues involved. When I say 'OUR', I mean we 'Stormies' as a whole rather than us personally. I’ll use the CBA’s relationship with Storm as a yardstick because this Bank was the worst offender.

I will not be answering any posts in that time because my aim will solely be to supply information that can be used to promote some sensible debate. It may also be educational for some 'Stormies' out there that do not have legal representation and may be still wondering where they stand.


----------



## bunyip (30 January 2012)

bunyip said:


> Frank
> 
> This forum is fortunate indeed to have a story teller of your caliber to lighten the mood with your amusing yarns.
> In fact there have been so many amusing stories in your posts that I think I should honor you by putting together a summarised portfolio of your wondrous




_*The post above seems to have got messed up somehow. Below is the complete version.*_



Frank

This forum is fortunate indeed to have a story teller of your caliber to lighten the mood with your amusing yarns.
In fact there have been so many amusing stories and attitudes and viewpoints in your posts that I think I should honor you by putting together a summarised portfolio of your wondrous tales.  
I mean, what better way to delude ourselves than to think like you and adopt your attitudes?
What better way to set ourselves up for a wipeout out in the next market crash or investment scam?

Let’s see now.......

* No need to research or analyze an investment proposition before committing millions of dollars to it.

* You’re not responsible for decisions and actions that you make of your own free will.

* Always blame someone else for your mistakes, particularly if they have deep pockets.

* Never be satisfied with what you’ve got. Don’t stop just because you’re comfortable and debt-free in self funded retirement – have a crack at tripling your wealth by mortgaging your home and borrowing like crazy to invest in the market.

* Never admit that you were gullible or naÃ¯ve or that you made a complete stuff-up in investment matters...try to save face by claiming that you were astute and circumspect.

* Steer clear of all financial planners – one bad apple like Storm is proof that all FP’s are shonks.

* Blame the government for not having laws in place to protect you from your own foolishness and imprudence.

* No need to think for yourself – it’s someone else’s responsibility to do your thinking for you in investment matters.

* Even savvy investors couldn’t have avoided getting caught by Storm.

* Don’t trouble yourself with research and analysis, it’s too hard and it’s a waste of your time.

* There’s nothing wrong with believing everything that salesmen tell you.

* Disregard everything that successful investors tell you – the only people worth listening to are those who were wiped out in the GFC.

* Be prepared to pay decent fees for decent advice. 7% upfront? No problem. 

* Investors don’t need to be cautious and prudent.


They’re all good aren’t they Frank, but that last gem of yours is my favorite. That one should be essential reading for every investor who wants to end up broke like you. In fact it’s so good that I think it’s worth repeating!
*Investors don’t need to be cautious and prudent! *

Thanks for sharing your delusions and your amusing stories, Frank. Keep them coming – a bit of light-hearted entertainment never harmed anyone.


----------



## SJG1974 (30 January 2012)

Frank Ainslie said:


> The equation is a simple one! *“The actions by Storm and certain banks resulted in our losses!”* One doesn’t go without the other! One doesn’t need to go beyond this point!




Hi Frank,

Let me get this straight....

What you are suggesting is that your agreement to mortgage your home (which the last time I looked is legal), despite admitting to all of us that you had no need to and it provided no benefits, did not cause you loss?  Is that what this statement is suggesting to us Frank?

Or, do I understand it that the above action you undertook, which you have admitted provided no benefit to you whatsoever (yet of course you did it anyway), was the fault of the banks and Storm, and you had no say in borrowing against your home whatsoever?

It is amazing that people like you and idontgetit, after all you have seen and been through, still don't understand the damage that double gearing caused you. *DOUBLE GEARING SIGNIFICANTLY MULTIPLIED YOUR LOSSES....IT DRAGGED YOU INTO NEGATIVE EQUITY WELL BEFORE THE MARGIN CALL FIASCO. *

Take the blinkers off Frank.


----------



## Solly (30 January 2012)

SJG1974 said:


> It is amazing that people like you and idontgetit, after all you have seen and been through, still don't understand the damage that double gearing caused you. *DOUBLE GEARING SIGNIFICANTLY MULTIPLIED YOUR LOSSES....IT DRAGGED YOU INTO NEGATIVE EQUITY WELL BEFORE THE MARGIN CALL FIASCO. *




If Frank was allegedly in negative equity well before the margin call issue, I wonder what Storm's data/Ignite systems where actually reporting during this period and where this output or reporting analysis was being sent ?

Does anybody know?


----------



## doobsy (31 January 2012)

Solly said:


> If Frank was allegedly in negative equity well before the margin call issue, I wonder what Storm's data/Ignite systems where actually reporting during this period and where this output or reporting analysis was being sent ?
> 
> Does anybody know?




Solly - my discussions with ex clients who had been devotees for a long time is that through the tech wreck of 2000-03 investors got close to the same situation. Margin calls were made, clients forced to sell some investments but not all, or came up with more cash. As that crisis was a slower moving situation and there were less clients at the time it was dealt with and clients were moved back into markets when it started to rally and their exposure that was left in the market increased to give them equity again. ( My understanding is that more important clients were "propped" up with EC monies so they wouldn't have the embaressment of telling them they were in Margin Call and would need to sell anything and that money was paid back at a later date. I believe he tried to use Storm monies to do this again in 2008 )

In this case the "overall" debt was never seen as a problem and because clients got to participate in the next rally from 3500 points to 6800 points it was soon forgotten.

I think the brainwashing of clients and advisers (most of whom came on board after this and only knew of good times and 20%pa returns) resulted in the home loan debt being ignored by all except the most cautious of Storms clients. There was always the assumption that even with a margin call there would be left over equity to build off.

What was and never is discussed is the cost of being out of the market. I am as far from a traditional "time in the market not timing the market" style of adviser and believe it is one of the great untruths spruiked by my profession but there are clear studies that show the affects of missing the first days / weeks of a rally on your overall long term return by trying to time the bottom. Any margin call would have resulted in clients having significant portions of monies in cash with an inability to quickly move back into the market unless it was on a serious bull rally. This holding in cash would result in a much reduced long term return that probably negates the "supposed" extra return provided by the gearing.


----------



## doobsy (31 January 2012)

Looking for feedback from those more passionate about this than me.

After looking through the propoganda on the commonwealth bank deception site. Sorry don't see much value there, it did prompt me to point out 2 things:

1. There is a supposed breakdown of age of clients in one article. That being the case most were 55 and under and I think we will find the bank lending will provde to be prudent enough for these clients that they will struggle to get any money back on this area. I do wait to see the result for those over 55 however.

2. The whole thing went to hell in a handbasket when CBA requested repayment of the $10M loan that Storm had. This was a company with $5B (5000 million) under advice in it's prime. Even on 0.1% trail that is $5M. Trail was more like 0.2 - 0.3% so even excluding all upfronts I wouldn't have thought $10M would have caused too much trouble to either pay off or re-finance.

Where was the money being spent?? There was the $1M wage bill for EC and JC and gold taps in the toilets don't come cheap but why did what I would have thought was a junior loan for a company that was ready to list on the ASX less than 12 months before hand cause such trouble?


----------



## Harleyquin (31 January 2012)

Doobsy how do you come to this conclusion when you consider the real possibility of the unregistered investment scheme?

I think your point 2 in your latest post is the tip of the iceberg, there's a lot going on under the surface, and this combined with the above, creates more questions than answers.

I have read the new thread that Julia has started relating to Risk and it's proving quite a talking point.  I understand all that is being said re risk.  How does this apply to the Storm Financial case when clients have asked for different risks, banks employ financial advisors and know that every client will have a different attitude to risk and yet both SF and all the banks involved with SF have accepted 'as the norm' that all SF clients are all high risk?

To me there can be only one answer and that is - there is a lot of criminality here.

Many people have been duped into believing that all of these organizations have at least some level of decency.

Our crime remains unchanged - we believed them all - and we are paying a huge price for our crime.

It's very easy after the event for people like Bunyip, and those he represents, to say 'you are totally responsible for this ... Your responsibility was to fully investigate this yourself'. Or one of his latest ...you can' t play catchup.  You asked to play catchup Bunyip?


----------



## Harleyquin (31 January 2012)

That should have been 'WHO asked to play catchup?'. 

We didn't unless you know something that I don't regarding this issue.


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## Garpal Gumnut (31 January 2012)

Solly said:


> If Frank was allegedly in negative equity well before the margin call issue, I wonder what Storm's data/Ignite systems where actually reporting during this period and where this output or reporting analysis was being sent ?
> 
> Does anybody know?






doobsy said:


> Looking for feedback from those more passionate about this than me.
> 
> After looking through the propoganda on the commonwealth bank deception site.
> 
> ...




I have asked these questions in not as many words repeatedly but not as yet received a reply on this thread.

gg


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## bunyip (1 February 2012)

Harleyquin said:


> Doobsy how do you come to this conclusion when you consider the real possibility of the unregistered investment scheme?
> 
> I think your point 2 in your latest post is the tip of the iceberg, there's a lot going on under the surface, and this combined with the above, creates more questions than answers.
> 
> ...




I didn't say you are totally responsible for this.
I didn't say 'you can't play catchup'.

I suggest you take the time to establish who said what, rather than attributing certain comments to people who never made them.


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## shibby (1 February 2012)

doobsy said:


> Looking for feedback from those more passionate about this than me.
> 
> 
> 2. The whole thing went to hell in a handbasket when CBA requested repayment of the $10M loan that Storm had. This was a company with $5B (5000 million) under advice in it's prime. Even on 0.1% trail that is $5M. Trail was more like 0.2 - 0.3% so even excluding all upfronts I wouldn't have thought $10M would have caused too much trouble to either pay off or re-finance.
> ...




I thought I would mention here the principals of the financial advisory firms that Storm bought; remember they were predominantly down the east coast of Australia. 
I believe I know, well lets say I am 99.9% accurate that my financial advisor and her partner received about $3,000,000.00 for our scalps in June 2008.
There are lot more out there that could have taken the cash and ran rather than wait for another attempt of a float.


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## doobsy (1 February 2012)

Harleyquin said:


> Doobsy how do you come to this conclusion when you consider the real possibility of the unregistered investment scheme?
> 
> I think your point 2 in your latest post is the tip of the iceberg, there's a lot going on under the surface, and this combined with the above, creates more questions than answers.
> 
> ...




Working in the industry HQ makes me think that of all the arguments the UMIS is the hardest to prove. Not only that, it is very easy to argue that MAYBE CBA were very tight with Storm but that does and should not automatically imply that the other banks were as well.

The argument behind the UMIS is that Storm and CBA were effectively selling a single bundled product. As previously discussed, there were clients who used their own banks, clients who used mortgage brokers to arrange the home loan monies, clients who did not use home monies at all but pulled out super for the initial capital etc etc. All of these clients can't argue UMIS as they had no involvement with CBA.

Point 2 is a clear one, Storm as a business also did not respect debt. That goes to the board of directors. I cannot for the life of me considering the levels of income generated 2004-2007 see why they even needed a small commercial loan for $10M apart for convenience. This is not just an EC and JC thing, this is the board overall that should have been looking to remove that risk from the business.

Haven't read Julia's new posts so can't comment but I will use my example. My business lending is with Westpac. Westpac look at my business the same as they look at any business, cashflow, costs, growth etc etc. They don't ask questions about what I recommend to clients. Why would CBA ask those questions? Should a CBA mortgage broker be asking what each client is going to do with the monies and if they say "invest it in the market" then be expected to (a) know anything at all about the market or (b) ensure the advice the client has received is legit.

Small dig here - I don't think the CBA planners know much past their own product suite so I wouldn't expect them to give a great analysis of another plan even if they did get their hands on a copy.

What are we left with? CBA had every right to call their commercial loan. I know for a fact and hope that Frank might back me up here that banks in times of crisis quite often want to call or review business loans. They are different to a 30 year mortgage.

I won't go back into the blame game but Storm were not singled out here. I am not sure of where you are based but in North Queensland the banks went from being the best friends of many business people (especially those who were exposed to property) to requesting loans be paid out or at least reduced. It sent a number of big names to the wall. Storm were not robinson crusoe in this instance.


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## doobsy (1 February 2012)

shibby said:


> I thought I would mention here the principals of the financial advisory firms that Storm bought; remember they were predominantly down the east coast of Australia.
> I believe I know, well lets say I am 99.9% accurate that my financial advisor and her partner received about $3,000,000.00 for our scalps in June 2008.
> There are lot more out there that could have taken the cash and ran rather than wait for another attempt of a float.




Shibby

Most were paid a small nominal amount of cash and then received "shares" that would have their value realised when Storm listed (which of course never happened).

There may have been some that took more cash and less shares but most I think had a fair bit locked up with the promise of "you will get your money when we become a listed company".


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## shibby (1 February 2012)

doobsy said:


> Shibby
> 
> Most were paid a small nominal amount of cash and then received "shares" that would have their value realised when Storm listed (which of course never happened).
> 
> There may have been some that took more cash and less shares but most I think had a fair bit locked up with the promise of "you will get your money when we become a listed company".




Doobsy
I think you will find that it was $3,000,000 cash now or $7,000,000 shares. If there were a lot of principals who had not recieved their money or shares wouldn't they have been on the outstanding creditors list?


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## shibby (1 February 2012)

Doobsy
I would also like to point out that there was possibly a large amount of money owed to Macquarie as well. 
I am not sure if this could be connected.
From the Rippoll Inquiry - Mr van der Westhuyzen for Macquarie Bank talking about October 2008 "we had three representatives in the Storm office. They were there for two days"
The world is crashing and Macquarie have 3 people for 2 days in Townsville. Maybe a bit far out there but?


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## Frank Ainslie (1 February 2012)

*Storm and the CBA – Part 1*

The wrongdoings of the CBA in its dealings with Storm are not in question here. That Bank has already stated on the public record that the CBA had been involved in wrongdoings in its dealings with Storm. The CEO of that bank at the time, Mr. Ralph Norris, has already admitted such. 

_"I wished that I'd known about it a lot earlier. If I'd known about it I would have hit it on the head. I'm not proud of the relationship that we had with Storm." _

Mr Norris said _"the CBA had sacked staff, improved its lending practices and had audited its business to ensure another "Storm-type situation" did not happen again." _He has also stated that _"he had never met Mr Cassimatis and his wife Julie and was not aware of the bank's relationship with Storm until December 2008."_ Yet the CBA went to great lengths to accommodate Storm including restructuring CBA’s  organization in Townsville that could only have been approved by the CEO?

Mr. Norris has also claimed that the Storm-CBA connection was purely a commercial one that was _"nothing special."_ In other words, it was an _“arms-length” _relationship! No more and no less!

The description of an _“arms-length”_ relationship in a commercial sense is one where an agreement is made by two parties freely and independently of each other, and without some special relationship existing that would influence that relationship and place it outside the commercial norm.

During the parliamentary enquiry Mr. Norris recommended that the Australian Securities and Investments Commission analyse proposed financial investment models to determine how risky they were and said, _"...it is now clear Storm's own model was "not appropriate" for some customers." _

By stating this he was basically saying that the CBA had no inkling that the Storm model was a double gearing one with a high risk factor. 

Mr. Norris has also admitted that _"the CBA was making numerous margin calls on other investors during the period of the share market collapse, but clients with other institutions did not suffer the same devastating complications as those who had invested with Storm._

It is now up to the Courts to establish the CBA's degree  of guilt for what occurred, and this can only be done by establishing to what extent its actions contributed to the losses that the Storm investors suffered at the end of 2008.

For those ‘Stormies’ that took out loans out with the CBA I will attempt to pre-empt the courts findings  basing my case on the known facts. It will be interesting at the end of the day to find out how far off the mark I am!  

I will cover all the issues including UMIS, contractual breach, and so on. I will start with UMIS Doobsy has recently made the following remarks in this regard:

"_Working in the industry HQ makes me think that of all the arguments the UMIS is the hardest to prove. Not only that, it is very easy to argue that MAYBE CBA were very tight with Storm but that does and should not automatically imply that the other banks were as well.

The argument behind the UMIS is that Storm and CBA were effectively selling a single bundled product. As previously discussed, there were clients who used their own banks, clients who used mortgage brokers to arrange the home loan monies, clients who did not use home monies at all but pulled out super for the initial capital etc etc. All of these clients can't argue UMIS as they had no involvement with CBA."_

He's right about not every Stormie being able to claim on the basis of UMIS because this only applies at the moment to Storm clients who were with the CBA, the Macquarie Bank or BOQ. Perhaps the claim will be made against other banks later but the focus is on these three banks at the moment. Where UMIS is concerned, the issue in law is a simple one. _"Were the banks and Storm effectively operating what constitutes a managed investment scheme?"_ This can only be defined by examining what a managed investment scheme is and whether the arrangements Storm and the Banks had in place amount to one. In order to ascertain this, the conditions relating to managed investment schemes need to be understood. If these conditions do exist, then UMIS will have been proven to exist because the schemes were unregistered! I will explore the subject of UMIS and the CBA  in my next post.

In my future postings I will also give my views on the lines of defence that I expect the CBA to use if this matter sees the light of day in a courtroom.


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## doobsy (1 February 2012)

shibby said:


> Doobsy
> I think you will find that it was $3,000,000 cash now or $7,000,000 shares. If there were a lot of principals who had not recieved their money or shares wouldn't they have been on the outstanding creditors list?




I think alot were, probably marked as family company names though.


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## doobsy (1 February 2012)

Frank

In order to be fair can we please start differentiating the different CBA parts.

CBA Banking did the lending against the homes. These people possibly have zero knowledge of any financial investment products. They know about home loans.

Colonial (a wholly owned subsiduary) provided the margin lending. They operated in their own little bubble which was all about margin lending. They do know a bit about home loans because they push a product called CALIA which links home and investment loans all as one. Funny that EC never used this product isn't it.

Macquarie - happy to be corrected but only provided margin loans to my knowledge.

BOQ - again happy to be corrected but only provided home loans. Now we know BOQ North Ward helped spruik the Storm strategy but what expertise does a bank manager have in share market investments? To my knowledge neither principal has the qualifications to be an financial planner.

Anyway, bundling CBA and jumping willy nilly between what was said about bad lending practices on home loans and some how linking that to an assumption that that means all lending including the margin lending was imprudent and they have admitted it is drawing a bit of a long bow.


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## Harleyquin (1 February 2012)

Bunyip I would suggest that you take the time to read back over your previous posts and not only will you find you've said something that means the same but you've said it more than once.  You've also contradicted yourself on more than one occasion.


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## Frank Ainslie (2 February 2012)

*Storm and the CBA – Part 2* 

Subject: Unregistered Managed Investment Scheme

_“On 1 July 1998 the Managed Investments Act (Cth) (Act) introduced the concept of a managed investment scheme. A managed investment scheme is a scheme (often in the form of a unit trust) in which people contribute money (or money's worth) to acquire interest to benefits produced by the scheme. These contributions are pooled or used in a common enterprise and members of the scheme do not have day-to-day control over the operation of the scheme.”_

I must admit that when unregistered managed investment schemes were first mentioned where Storm and the Banks were concerned, they were not something I had encountered before. I therefore made a point of acquainting myself with the various aspects of such because the suggestion that unregistered managed investment schemes may have existed will play an important part in our cases against the Banks; in particular, the CBA, Macquarie Bank and the BOQ.

When addressing the various components that make up a managed investment scheme in my following comments, I have not included any reference to the CBA’s wrongdoings because the Court will, I believe, be considering this particular aspect purely on the arrangements that existed between Storm and the CBA together with the relationship that developed between those parties, and the methods that were employed to pool investors’ funds for a common purpose. The various wrongdoings (and there are many) that resulted from Storm’s arrangements with the CBA will be outlined by me in future postings in this series when addressing other matters such as _“contractual breach”_,  _“imprudent lending”_, and _“unconscionability”_.

Basically, for our purposes, a managed investment scheme is one that has the following features:

*	It is a scheme, that is, a program or plan of action coupled with the taking of steps to give effect to its purpose
*	Under the scheme, people contribute money or assets in exchange for rights (called interests) to obtain benefits produced by the scheme (whether the rights are actual, prospective, contingent and whether they are legally enforceable or not)
*	Any of the contributions are to be pooled or used in a common enterprise, to produce financial benefits, or benefits consisting of property rights or interests, for people who hold interests in the scheme (known as members)
*	The members do not have day-to-day control over the operation of the scheme (whether or not they have the right to be consulted or give directions)

*1. It is a scheme, that is, a program or plan of action coupled with the taking of steps to give effect to its purpose.*

The 18th May 2007 agreement between Storm and the CBA indicates a clear intention by them to work together for their mutual interests. Their motivation for doing so will be addressed by me in subsequent postings. This agreement and their subsequent actions demonstrate a commitment by both parties to work in partnership with a view to promoting the CBA’s services for what is now perceived as a shared gain. 

There is no question in my mind that the 18th May 2007 agreement between Storm and the CBA was the chief culprit for the losses that ensued when the GFC occurred in 2008. Why? Because it blurred the lines of responsibility by both parties and provided an incentive for them to delay taking remedial actions when the circumstances demanded such. This agreement therefore remains central to the reasons why Storm and the CBA failed to act appropriately when the economic climate began to change dramatically in that year. 

This agreement between Storm and the CBA will also, I believe, serve to identify when an unregistered managed investment scheme (if proven) first began between the CBA and Storm. 

Following the 18th May 2007 agreement, a specific strategy was adopted by both parties to promote the CBA’s products with a view to increasing both their bottom lines.

A dedicated section was established in the CBA’s Atkenvale branch to deal with increased work, with specialist lending Staff being seconded from other CBA branches. This section used a computer-based valuation program known as VAS for the purpose of identifying customers who would be ripe for further loans. 

The CBA has described the VAS as an _"automated decisioning tool"_ which was used throughout its retail operations to determine if a loan applicant needed an Independent valuation. It is not yet clear whether VAS was used primarily where CBA’s Storm clients were concerned or was a tool used for other CBA customers as well.  No doubt, this question will be asked at some stage. The loans that arose from this exercise were used to invest further in Storm-badged products. 

This section of the CBA’s Atkenvale branch was in daily contact with members of Storm’s Townsville Office who had a number of former CBA employees working there. These included David McCullough, a CBA Townsville business banking manager who worked at a very high level in Storm, Camella Richards. who ran back-office systems and processes, and Kirsty Devney who did day-to-day liaison between the CBA and Storm. 

*2. Under the scheme, people contribute money or assets in exchange for rights (called interests) to obtain benefits produced by the scheme (whether the rights are actual, prospective, contingent and whether they are legally enforceable or not)*

No problems there as I see it!

*3. Any of the contributions are to be pooled or used in a common enterprise, to produce financial benefits, or benefits consisting of property rights or interests, for people who hold interests in the scheme (known as members).*

During 2007 and 2008, CBA’s VAS system was used by the CBA’s Atkenvale branch to sift through the accounts of Storm’s customers for the express purpose of re-assessing house valuations with a view to offering customers increased borrowings on the supposed additional equity that was available. The CBA would then supply this information to Storm who would duly contact the customers concerned advising them to take out additional loans based on the increased equity of their properties. These additional loan amounts would then be ploughed into Storm index-linked products once Storm had extracted its 7.5% fee. 

The desktop system generated valuations by keying in a property's postcode or addresses. Details about the address and size of the land and property. such as the number of bedrooms and bathrooms, were keyed in for a valuation that was provided within minutes. Many of the valuations would later be found to have been inflated when compared to market values that existed at that time.

The point being that the CBA and Storm by entering into a separate agreement between themselves and then taking the actions they did to channel their customers monies through the CBA, were effectively pooling the CBA’s Storm customers in a common enterprise.

‘Australian Softwood Forests Pty Ltd v A-G (NSW)’ dealt with the meaning of "common enterprise". In that case the argument was put forth that _“in order to constitute a "common enterprise" there must be a joint participation in all the elements and activities that constitute the enterprise. Justice Mason disagreed. An enterprise may be described as common if it consists of two or more closely connected operations on the footing that one part is to be carried out by A and the other by B, each deriving a separate profit from what he does, even though there is no pooling or sharing of receipts of profits. It will be enough that the two operations constituting the enterprise contribute to the overall purpose that unites them. There is then an enterprise common to both participants and, accordingly, a common enterprise."_

_There is a similarity of the definition of "managed investment scheme" to the general definition of "making a financial investment" in s763B. The only substantive difference between the two is the requirement in paragraph (a)(ii) of the definition of "managed investment scheme" for there to be a pooling of contributions or a common enterprise. In fact, the similarities are such that any financial product that meets the general definition of "making a financial investment", that involves any pooling of investments or common enterprise and that does not fall within the specific list of exclusions to the definition of managed investment scheme mentioned in CA s9, will constitute an interest in a managed investment scheme and be regulated as such."_ 

*4. The members do not have day-to-day control over the operation of the scheme (whether or not they have the right to be consulted or give directions)*

We seem to fit the bill here as well.

*Remedy:* “Under the Corporations Act, a court may make compensation orders against a person who operated a managed investment scheme in contravention of the Act or against a person who was involved in the contravention.”

It is clear from the evidence at hand that the CBA and Storm had forged a special relationship that could hardly be described as “arm’s length”. The CBA cemented this relationship with Storm by extending personal and corporate loans at low interest to the directors of Storm and also gave personal loans to some of Storm’s employees The CBA also financed in part certain Storm events and promoted Storm’s services, be it indirectly. 

It is unclear how the CBA will refute the charge of operating an unregistered  managed investment scheme other than by finding something in the Corporations Act that its lawyers can seize on. The 18th May 2007 agreement between the CBA and Storm binds those parties together and this agreement will, I believe, play a central role in many of the additional charges that have been levied against the CBA by our lawyers as well as the one at hand; namely operating an "unregistered managed investment scheme".


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## doobsy (2 February 2012)

Frank - Good info for all on the forum.

Can I play devils advocate to keep the analysis going and maybe to be thought provoking.

There is mention of the arrangement in May 07. Can it be argued that the Storm Strategy was exactly the same prior to this arrangement and had been for 5+ years therefore the arrangement did not materially change the advice given to the Storm clients?

Also and I don't have a clue on the legalities here but does that mean ONLY the additional investments done after May 07 fall under the UMIS? Any existing investments before that date do not?

Can CBA argue that the valuation software was used by Storm for all clients (not just CBA borrowers) to trigger Storm to recommend to all clients that they speak with their relevant bank and increase the valuation and therefore access additional equity? Or was it just CBA/Storm clients who had re-vals done? If it was everyone, does that show that the arrangement wasn't exclusive between CBA and Storm?

You discuss the arrangement affecting responsibilities. I point to my last post on this matter. Was the arrangement between CBA home lending even known about by Colonial Geared Investments who ran the margin loans? It was the miscommunication and misunderstanding about who was in charge of margin loans (Storm was by the way - we certainly expected to be allowed to contact any of our clients if it had eventuated, not have Colonial speak with them as they needed to talk to us to get the correct advice of what to do) that led to the increased losses, not the CBA home lending dept.

Look forward to part 3


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## bunyip (2 February 2012)

Tysonboss1 said:


> Hey HQ,
> 
> Unforntunatly, trying to play catch up is what gets so many people into trouble, It's not funny.
> 
> ...




Here you go Harleyquin – as you can see from the above, it was Tysonboss who made the ‘catchup’ comments, not me.

As for the other comments you wrongly attribute to me.....
I’ve never said _‘you are totally responsible for this’_. I’ve said all along that a number of parties played a part in the Storm debacle – the clients, the banks, and Storm itself, and that each of these parties is responsible for the decisions they made and the actions they took. Nowhere have I suggested that any of these parties individually is totally responsible for what happened.

I’ve also said.....
_*Your most important responsibility when you consult a financial planner is to thoroughly research and evaluate the advice they give you. 
This is particularly important if their advice is to mortgage your home and borrow vast sums of money for investment.*_

If you can't see the truth and common sense in this last statement after all that's happened to you,  then you're a  prime candidate to blow your money all over again if you get your hands on some investment dollars courtesy of a compensation ruling against the banks.


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## Frank Ainslie (2 February 2012)

doobsy said:


> Frank - Good info for all on the forum.
> 
> Can I play devils advocate to keep the analysis going and maybe to be thought provoking.
> 
> ...




_"There is mention of the arrangement in May 07. Can it be argued that the Storm Strategy was exactly the same prior to this arrangement and had been for 5+ years therefore the arrangement did not materially change the advice given to the Storm clients?"_

I have mentioned the CBA-Storm 18th May 2007 where the issue of the unregistered managed investment scheme is concerned because it highlights that the CBA and Storm had entered into an agreement that became the catalyst for pooling. This agreement was a separate agreement between Storm and the CBA that was not formally approved by any of Storm’s CBA customers because they were never notified of such and were therefore not allowed the opportunity to agree or disagree to any of its proposals. This is particular pertinent to the conditions of contract that existed where the margin loans were concerned between the CBA and its Storm customers. I will be commenting on this fully in due course. 

_"Also and I don't have a clue on the legalities here but does that mean ONLY the additional investments done after May 07 fall under the UMIS? Any existing investments before that date do not?"_

I believe that any arrangements entered into by the CBA's Storm customers with that Bank after 18th May 2007 will be invalidated and that Bank will not be able to enforce such, if, that is, the Court finds that an unregistered management scheme did exist. Any Storm clients that had dealings with the CBA preceding this date will, I believe, be partially compensated if they took out further loans with the CBA on Storm’s advice after this agreement came into existence. I would imagine that any contractual arrangements entered into with the CBA by Storm's clients before that date would remain unaffected if this agreement didn't impact on them at all. Having said that, they will, I feel, still have a case for contractual breach which I will explain when I deal with the contractual issues relating to our cases. 

In other words, compensation will, I believe, be based on partial recompense or full restitution, but it will also seek to be fair to the CBA. Whatever the Court decides, compensation if it is forthcoming will be based on a fair and equitable settlement. 

This is my reading of the situation anyway. Greater minds than mine will be applying themselves to these questions and they will be getting well paid for doing so. 

There is another point to consider. It may well be that the Court will rule that the scheme extended back even further depending on what is discovered during the trial. I have taken the 18th May 2007 date because it appears to be the most likely point when UMIS began but it shouldn't be taken as Gospel. This has yet to be ascertained! 

_"Can CBA argue that the valuation software was used by Storm for all clients (not just CBA borrowers) to trigger Storm to recommend to all clients that they speak with their relevant bank and increase the valuation and therefore access additional equity? Or was it just CBA/Storm clients who had re-vals done? If it was everyone, does that show that the arrangement wasn't exclusive between CBA and Storm?"
_
Again, there are issues here that I will be addressing in my various posts. For the purposes of establishing whether an unregistered managed investment scheme existed, only the actions of the CBA and Storm will, I believe, be considered by the Court. The primary question will be, _"Did their combined actions constitute pooling in a common enterprise?"_ The Macquarie Bank and the BOQ will be facing similar charges because the former supplied margin loans and the latter supplied many of the housing loans that bolstered those margin loans. The CBA is more clear cut because different outlets of the CBA supplied both the housing and the margin loans.

_"You discuss the arrangement affecting responsibilities. I point to my last post on this matter. Was the arrangement between CBA home lending even known about by Colonial Geared Investments who ran the margin loans? It was the miscommunication and misunderstanding about who was in charge of margin loans (Storm was by the way - we certainly expected to be allowed to contact any of our clients if it had eventuated, not have Colonial speak with them as they needed to talk to us to get the correct advice of what to do) that led to the increased losses, not the CBA home lending dept."_

Again, this will boil down to the responsibility of bankers when lending money. I’ll be covering this aspect as well in a later posting.


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## doobsy (3 February 2012)

OK Frank, thanks for the reply.

Devils advocate #2

My firm have certain preferred products that we use. We like them for their competitiveness in the fee area whilst maintaining a high level of usability and ease of reporting etc.

Extending your logic does this constitute pooling? We have never been a big enough group to receive volume discounts etc but I know they are available in the industry. If a dealer group promotes certain platforms/products to their adviser base because they will then receive a volume discount and therefore make more from the product helping cover costs, can that be argued to be a UMIS in disguise?

There is much talk about these behind the scenes discounts as "ripping off the client" and that any discount should be passed on. My understanding is that if it was passed on then some other fee would need to be increased as the licencee must remain profitable to retain the licence. 

Plus is it all that different from an industry fund who automatically gets access to the full pool of monies from members and can negotiate a special price with a fund manager to manage the monies? One gets a discount if they hit certain hurdles, the other walks in with an amount already over the hurdles and negotiates the discount up front.

I guess the other question is exactly what is it in the agreement that you feel triggers a pooling situation? Is it the use of the valuation software? Is it the extra LVR? Storm had so many varied client situations as explained, how many fell under the CBA Home Loan / Colonial Margin Loan combination?

I ask this because if the extra LVR is the supposed trigger I could argue that any agreement made no difference to the advice. Storm always geared clients up to 50% or there abouts unless the client specifically requested a lower LVR. The change in the Margin Call LVR did not result in Storm recommending more borrowing in their advice, it was simply sold as additional "protection" they had arranged.

If I go to our providers and negotiate a better deal in some form for our clients (extra protection, lower fees etc) does that automatically mean I have entered into a UMIS?


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## Frank Ainslie (3 February 2012)

doobsy said:


> OK Frank, thanks for the reply.
> 
> Devils advocate #2
> 
> ...




Hi Doobsy!

Look! At this stage I am endeavouring to isolate the issues that will, I feel, be considered when our cases are considered in Court. I cannot state that "pooling" definitely occurred or what I have stated will be construed as "pooling" because this is a question for the Court to decide. What's more, it is a complex issue that a number of "suits" will be considering at length.

As for the 18th May 2008 agreement, my further postings will help to clarify its importance in my eyes - its influence for one on what occurred at the end of 2008!


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## SJG1974 (3 February 2012)

Frank Ainslie said:


> Hi Doobsy!
> 
> Look! At this stage I am endeavouring to isolate the issues that will, I feel, be considered when our cases are considered in Court. I cannot state that "pooling" definitely occurred or what I have stated will be construed as "pooling" because this is a question for the Court to decide. What's more, it is a complex issue that a number of "suits" will be considering at length.
> 
> As for the 18th May 2008 agreement, my further postings will help to clarify its importance in my eyes - its influence for one on what occurred at the end of 2008!




Hi Frank,

Will your further posts explain why you borrowed against your house, given you admitted it was unnecessary and provided no benefit?  Will they do that?

Given your repeated claims that you had absolutely no say or responsibility for anything that happened when you were involved with Storm, I am guessing that you have a case against the banks for MAKING you borrow against your home?


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## Frank Ainslie (3 February 2012)

doobsy said:


> OK Frank, thanks for the reply.
> 
> Devils advocate #2
> 
> ...




Doobsy!

One further point on this. The Court will not be testing the legality of the scheme in terms of how it operated. Rather, the Court will merely need to establish whether it has all the ingredients of a managed investment scheme. If is is found to be so, then its illegality will stem from the fact that it wasn't registered. Any pooling that took place constitutes just one of the ingredients that make up a managed investment scheme. If all the boxes are ticked, then our case is proven.


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## Garpal Gumnut (3 February 2012)

Wizard_73 said:


> Hmmm, found this site/forum this morning.....read with a lot of interest.  Ok, I also was a storm client, as was my friends, family, work mates.  Word of mouth, the best advertising.  Friends of ours were with storm for some 10 - 12 yrs, they had tried and tried to get us to join them many a time, my biggest fear was that if they ever went under, they would close up shop and disappear.........well guess what happened.  What annoys me the most is my in laws (75, 70) owe the banks 35k.  Retirees, after losing my father-in-law last year my mother - in - law has been left with debt.  How does she pay this back short of selling her house????  I am lucky, I guess, that I am still young enough to recover and hopefully get back on my feet.  Anyway, Storm wanted me to do another step in December....After ringing my FP, yep all is good, even though I was in a margin call...apparently...but hey not to worry.  Thank god I did not go through with it....After all the previous posts I have taken the time to read this morning, this is what I feel.  I don't care that it may or may not have been my fault, when I pay someone for a service I expect service.  Be it a sparky,plumber whatever.  Storm took substantial fees from me and what have they left me with in return???  People will read this and say "Why didn't you do something?" They are supposed to be the advisors, that's why we went with them in the first place...Anyway I intend to go to lawyers find out where I stand, because Emmanuel, if you are reading this, I am sorely disappointed in you, your company and everything you did.  Wish I could take back the last 12 months.  Oh, how frustrating is it when you are trying to ring your FP and told they are not allowed to talk to you.....what a frigging joke.




This is a post of 3 years ago, exactly to the day, from a former client of Storm.

I can understand how Wizard_73 felt. It would be interesting to know whether he or she is any further on in certainty that their money will be recovered.

gg


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## doobsy (3 February 2012)

Frank Ainslie said:


> Doobsy!
> 
> One further point on this. The Court will not be testing the legality of the scheme in terms of how it operated. Rather, the Court will merely need to establish whether it has all the ingredients of a managed investment scheme. If is is found to be so, then its illegality will stem from the fact that it wasn't registered. Any pooling that took place constitutes just one of the ingredients that make up a managed investment scheme. If all the boxes are ticked, then our case is proven.




Frank, i guess what i am looking at is even if umis is proven what do storm clients expect from it? Compensation from that point on? From day 1? ????


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## Solly (4 February 2012)

Garpal Gumnut said:


> This is a post of 3 years ago, exactly to the day, from a former client of Storm.
> 
> I can understand how Wizard_73 felt. It would be interesting to know whether he or she is any further on in certainty that their money will be recovered.
> 
> gg




GG

It would be great to have input from other Stormers who could  contribute to this thread. I know my mate reads this thread but doesn't post as he feels it will only open him up to a tirade of criticism for his actions. I hope there are other Stormers out there who will run the gauntlet and add some new life and perspective by posting about their journey and experiences in this Storm saga.

And remember Stormers, you never have to respond to anybody or defend your position unless you choose to. That is a very powerful position.

S


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## DocK (4 February 2012)

Solly said:


> GG
> 
> It would be great to have input from other Stormers who could  contribute to this thread. I know my mate reads this thread but doesn't post as he feels it will only open him up to a tirade of criticism for his actions. I hope there are other Stormers out there who will run the gauntlet and add some new life and perspective by posting about their journey and experiences in this Storm saga.
> 
> ...




Unfortunately Solly, I daresay there are many who, like myself more recently, have decided that putting up with immature and/or nasty posts is simply not worth the effort.  Why open oneself up to attack merely to provide amusement or some form of self-gratification for total strangers who often seem thoroughly unlikeable people?   Most of us are still hurting in one way or another, and quite frankly don't need any extra stress or irritations.  Reliving the past can be cathartic - but most responses on this thread seem to seek only to rub salt into the wounds. 

I'm not bothered by posts directed at me personally, but I'm quite disgusted by some of the venom and condescension shown towards some posters who are obviously still hurting quite badly.  

I do know that members of ASF have the right to post what and where they feel - but you can't then wonder why you're left mainly talking to each other when those who fail to genuflect to you are met with derision and venom.  Why would any ex-storm client reading this thread feel that their story or opinions would be met with an understanding or sympathetic attitude?  I realise that some, like yourself, have been empathetic and helpful - but one has to wade through a good bit of muck to get to the posts of value.  You only need to scroll up a little to find an interesting discussion between Frank and Doobsy, that is of actual value to the thread, interrupted by yet another rude and immature post from SJG1974.

I suspect your mate is not the only ex-stormer to decide not to engage with people he'd probably go to great lengths to avoid in the real world.


----------



## DocK (4 February 2012)

doobsy said:


> Frank, i guess what i am looking at is even if umis is proven what do storm clients expect from it? Compensation from that point on? From day 1? ????




I'd also be interested in knowing what those who are involved in the Levitt action feel the outcome might be, should their action be successful.  

I'd also value any opinions on why some have 'opted out' of the Levitt action - is it because they feel they won't be able to claim compensation from an ASIC win?  Or do I have this backwards?


----------



## bunyip (4 February 2012)

SJG1974 said:


> Hi Frank,
> 
> Will your further posts explain why you borrowed against your house, given you admitted it was unnecessary and provided no benefit?  Will they do that?
> 
> Given your repeated claims that you had absolutely no say or responsibility for anything that happened when you were involved with Storm, I am guessing that you have a case against the banks for MAKING you borrow against your home?





And Frank - will your further posts divulge whether you'll accept a court ruling, unlikely though it is, that the banks must refund 100% refund of your losses?
Why I've asked this question before and am asking it again now is to check if you're genuine in your claim that for you, this is about justice, not money. 

You see Frank, some people suspect that you're just on a money-grabbing campaign, that the pursuit of justice is not your main motivation at all. I mean, you’re constantly slinging mud at the banks, no doubt in the hope that some of it will stick, yet the real culprits, Storm Financial, rarely get a mention in your posts. At the same time you refuse to admit any responsibility for your own actions even though they were made of your own free will.

Now, anyone with the power to think clearly understands that the banks are not solely responsible for your losses, therefore it would clearly be a travesty of justice if a court ruling ordered them to compensate you for 100% of those losses.
And since you claim that you want justice to prevail, then can I reasonably assume that as a man of complete honesty and integrity, you'd refuse to accept a clearly unjust situation whereby the banks are judged 100% responsible for the Storm debacle, and are ordered to compensate you accordingly?

If you can tell this forum, in all honesty, that you’d take the moral and ethical course of action by refusing 100% compensation from the banks, then we can have some faith that you’re a man of decent principles whose pursuit of justice is genuine.
On the other hand, if you admit that you’d grab the money with both hands without any concern over the fairness of the ruling, then it will prove correct the suspicions that money-grabbing, not justice, is what motivates you.

Is this question too confronting for you, Frank – will you run and hide from it?


----------



## DocK (4 February 2012)

doobsy said:


> Frank - Good info for all on the forum.
> 
> Can I play devils advocate to keep the analysis going and maybe to be thought provoking.
> 
> ...




Doobsy, hope you don't mind me butting in here, but my reading of the bit I've bolded leads me to wonder if you think the desktop VAS software was owned and run by Storm, rather than by the bank?  My understanding is that this was software developed, owned and used soley by the CBA for its own purposes.  My understanding is that they used this method to revalue properties held by them as security for loans to Storm clients in order to expedite further lending to those clients.  I believe the CBA even went so far as to provide Storm head office with a list of those mutual clients of both CBA and Storm who had equity available  for further borrowings, following a revaluation using their VAS system, so that they could be directly "targeted" for a further "step".  I would like to see this aspect investigated further through the legal system as I feel it was crucial in adding to the losses suffered by those Storm clients who also had home loans with CBA.

To the best of my knowledge, and I certainly could be wrong, the VAS system was used only by CBA on their own clients, and would not have been available for use by Storm on their clients who had loans at other banks - other banks presumably carried out valuations using their own methods, probably an actual inspection by a valuer.


----------



## Solly (4 February 2012)

DocK said:


> Unfortunately Solly, I daresay there are many who, like myself more recently, have decided that putting up with immature and/or nasty posts is simply not worth the effort.  Why open oneself up to attack merely to provide amusement or some form of self-gratification for total strangers who often seem thoroughly unlikeable people?   Most of us are still hurting in one way or another, and quite frankly don't need any extra stress or irritations.  Reliving the past can be cathartic - but most responses on this thread seem to seek only to rub salt into the wounds.
> 
> I'm not bothered by posts directed at me personally, but I'm quite disgusted by some of the venom and condescension shown towards some posters who are obviously still hurting quite badly.
> 
> ...




Yes DocK,

I understand, I have heard a lot of positive feedback about this forum and am grateful to Joe for maintaining a place for our views to be aired. The mainstream media, broadcast environment and social media contexts are evolving so quickly in this digitally interconnected world. It's a far cry from just a few years ago when the only people with a voice needed to be part of a media conglomerate and with access to a newsroom and a broadcast licence. Even with my background I couldn't be directly involved in a targeted repository of all things about Storm until this thread appeared on ASF.

I too look forward to more valued added interesting discussion and dissection of the mechanisms behind this event. I also look forward to observing a few more sittings at Harry's over the next few weeks.

Very interesting times ahead.

S


----------



## Garpal Gumnut (4 February 2012)

Solly said:


> GG
> 
> It would be great to have input from other Stormers who could  contribute to this thread. I know my mate reads this thread but doesn't post as he feels it will only open him up to a tirade of criticism for his actions. I hope there are other Stormers out there who will run the gauntlet and add some new life and perspective by posting about their journey and experiences in this Storm saga.
> 
> ...




I would agree totally Solly,

It is difficult for people to post on forums even if they have no monetary interest in the topics discussed, and to deal with the criticism and sometimes trolling that accompanies posts. 

As you say "silence is golden " , it is a very powerful tactic against persistent insults.

I would encourage posters such as Wizard_73 to post again so that information can be shared which will hopefully lead to gaol for the culprits and recompense for losses incurred.

There is a wider interest here as well, that Storm Investor posters are not aware of, from my reading of the posts. 

That is to educate investors of the present and future, to ensure that they are better educated and do not make the mistakes that investors in Storm did.

This results in a conflict in the content of different subtexts of the posts which is unhelpful and which will probably continue without closer moderation. The position of Moderator is difficult and I'm glad I am not one, and to be fair it is a reasonably well ordered thread given the high emotional content of some posts.



DocK said:


> I'd also be interested in knowing what those who are involved in the Levitt action feel the outcome might be, should their action be successful.
> 
> I'd also value any opinions on why some have 'opted out' of the Levitt action - is it because they feel they won't be able to claim compensation from an ASIC win?  Or do I have this backwards?




Opinions from those who have opted out of the Levitt action would be useful. In Townsville opinions on the Principal and agents of Levitt is mixed. 

The opinions of Stormers would be very useful, more for they themselves than non-interested parties.

gg


----------



## doobsy (6 February 2012)

DocK said:


> Doobsy, hope you don't mind me butting in here, but my reading of the bit I've bolded leads me to wonder if you think the desktop VAS software was owned and run by Storm, rather than by the bank?  My understanding is that this was software developed, owned and used soley by the CBA for its own purposes.  My understanding is that they used this method to revalue properties held by them as security for loans to Storm clients in order to expedite further lending to those clients.  I believe the CBA even went so far as to provide Storm head office with a list of those mutual clients of both CBA and Storm who had equity available  for further borrowings, following a revaluation using their VAS system, so that they could be directly "targeted" for a further "step".  I would like to see this aspect investigated further through the legal system as I feel it was crucial in adding to the losses suffered by those Storm clients who also had home loans with CBA.
> 
> To the best of my knowledge, and I certainly could be wrong, the VAS system was used only by CBA on their own clients, and would not have been available for use by Storm on their clients who had loans at other banks - other banks presumably carried out valuations using their own methods, probably an actual inspection by a valuer.




Dock

Not at all. Maybe my devils advocate position leads the forum to believe that I am here to defend the banks. That is not it at all. I would expect and hope that BOQ North Ward and whichever was the main CBA TVL branch that they dealt with to have people strung up. I just don't think that CBA overall knew as much as people here automatically think they did.

My understanding of the valuation software was that due to the VERY close relationship between the townsville branch of CBA and Storm, they either had access at all times (even for non CBA clients) or maybe even a copy of the software loaded on computers at Storm HQ. If the second is true I will bet that CBA QLD and Australia did not know about that.

So I was inferring that if Storm did in fact have full easy access to the CBA software they could use it for all clients in their book and use it as a justification for "steps" even if it wasn't a CBA or Colonial Margin Lending client.


----------



## doobsy (6 February 2012)

Just a side note on CBA

From what I can find, they held only about 1/3 of the home loans associated with Storm. Considering the size of CBA in the Australian market, this isn't all that high I would say.

It has almost 500 local branches around Australia. 1 (0.20%) of those branches had a relationship with Storm that was too close for comfort.


----------



## DocK (6 February 2012)

doobsy said:


> Dock
> 
> Not at all. Maybe my devils advocate position leads the forum to believe that I am here to defend the banks. That is not it at all. I would expect and hope that BOQ North Ward and whichever was the main CBA TVL branch that they dealt with to have people strung up. I just don't think that CBA overall knew as much as people here automatically think they did.
> 
> ...






doobsy said:


> Just a side note on CBA
> 
> From what I can find, they held only about 1/3 of the home loans associated with Storm. Considering the size of CBA in the Australian market, this isn't all that high I would say.
> 
> It has almost 500 local branches around Australia. 1 (0.20%) of those branches had a relationship with Storm that was too close for comfort.




Well!  That's very interesting indeed.  That is the first I've heard of the possibility that even the VAS software may have been shared, and if true (and I've no reason to doubt you on this) gives further weight to the argument that the CBA and Storm were almost acting as one - albeit maybe only one branch of the CBA.  I certainly don't dispute that the vast majority of individual CBA branches had either nothing or very little to do with Storm or its clients.  I think it is beyond doubt though, that at least one branch in Townsville had an extremely close relationship, maybe much more so over the years immediately preceding Storm's demise.  I'd be interested to know how much of Storm-related business was written by CBA vs other banks from 2007 or so onwards - if this info is known?

I guess another question for the courts will be along the lines of "Even if only one branch of the CBA was rogue, and the CBA top executive were ignorant of its actions, does this excuse the organisation or not?  Where does the buck stop?  Who is responsible?  The branch manager is simply an employee of a very large organistion and reported to a regional manager, who reported to a state manager who reported up the line and so on.  We do know that one branch in FNQ was writing record lending business and being rewarded for it at various CBA functions, so I guess a pertinent question might be "If one branch was performing well above any expectations, wouldn't/shouldn't someone at an executive level within the CBA have been interested to see how?"  What about their audit system?  Just my personal opinion, but all the claims of ignorance made by various execs are a bit on the nose.  Not saying the CEO was intimately familiar with the dealings of each and every branch of course, but at least the state execs should have been imo.  I'm not as familiar with the BOQ system, as their branches are more like franchises I think?, but presumably a branch manager/owner still has set guidelines they're allowed to operate within?

I'm self-employed.  If I had one employee who was bringing in a multitude of business, over and above normal expectations, I'd be delighted.  I'd probably give him a bonus.  I'm sure a lot of business owners would do likewise.   But I'd also be very interested in his methods as ultimately as the business owner, I'm responsible if he's using unethical or illegal methods to generate that business.  Should this not also be the case for CBA, BOQ or any other bank IF they are found to have a case to answer?


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## Mash (6 February 2012)

doobsy said:


> Just a side note on CBA
> 
> From what I can find, they held only about 1/3 of the home loans associated with Storm. Considering the size of CBA in the Australian market, this isn't all that high I would say.
> 
> It has almost 500 local branches around Australia. 1 (0.20%) of those branches had a relationship with Storm that was too close for comfort.




Hey Doobsy.... what you say here is exactly what the CBA has been paying their spin doctors to have the majority of you believe (they have obviously done their job well).... it was not just 1 ROGUE branch of CBA..... these arangements/deals were signed sealed and delivered from the very top.... Yes Ralph & co did know exactly what was going on...... hence the claim of UMIS... funny I thought that had been made abundantly clear.......Perhaps that is just an inconvenient truth !!!! And yes I know this is yet to be proven however we may not yet get to court..... with any luck the banks will fold at the "mediation" on Feb 23 & 24.


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## DocK (6 February 2012)

Mash said:


> Hey Doobsy.... what you say here is exactly what the CBA has been paying their spin doctors to have the majority of you believe (they have obviously done their job well).... it was not just 1 ROGUE branch of CBA..... these arangements/deals were signed sealed and delivered from the very top.... Yes Ralph & co did know exactly what was going on...... hence the claim of UMIS... funny I thought that had been made abundantly clear.......Perhaps that is just an inconvenient truth !!!! And yes I know this is yet to be proven however we may not yet get to court..... with any luck the banks will fold at the "mediation" on Feb 23 & 24.




Hi Mash,

It was actually my post that used the words "one rogue branch of CBA" although I was posing the question that "even if" it was only one, does that let the entire bank off the hook?

I'm an ex-storm client, and very interested in the details regarding the nature of the relationship between the banks and Storm, and I must admit I was unaware that it has been made abundantly clear that Ralph and Co did know exactly what was going on.  It certainly wouldn't be an inconvenient truth for me, and I would appreciate it if you could post further details in this regard.  Are there any transcripts from court or enquiry sessions, or media articles etc that point to Ralph Norris being aware of the closeness of the relationship between any of his branches and Storm?  If so, I'd be very grateful if you could provide a link please.  I must admit to thinking this aspect was still a matter of dispute.

I would love to see the mediation meeting be the end of proceedings, but fear your hopes that the banks will "fold" may be a bit optomistic.  I'm more of a pessimist - the banks have very deep pockets and are well able to fund ongoing legal action for several years if it suits them to drag the matter out.  It may come down to a matter of publicity - their bottom line is likely to be the most important factor to a bank's board, and if profits may be threatened due to poor PR, that's more likely to spur them towards a mediation imvho.  In the absence of negative media attention, I see no reason for the banks to make life any easier for those taking action against them - rather the opposite in fact.


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## doobsy (6 February 2012)

DocK said:


> Hi Mash,
> 
> It was actually my post that used the words "one rogue branch of CBA" although I was posing the question that "even if" it was only one, does that let the entire bank off the hook?
> 
> ...




Dock - don't quote me on the VAS use but that was the understanding I got from my sources. They were not based at HQ however.

Maybe it is the cynic in me but I don't think Storm really were that important to CBA overall. Don't get me wrong, it was a big book and important to the branch and like mentioned should have been important to regional and state managers but as an overall I don't think so. Ralph Norris was running a multi billion $ bank that has exposure in Australia, Asia, NZ. It runs banking, insurance, funds management.

It has a home loan book of over $300 billion. Now assuming Storm had $5B under management, at least $2B would have been margin loans, and probably another $1B or more would have been just straight equity rather than the home borrowings. That leaves $1-2B at most in a book of $300B (0.33-0.66%). I doubt Ralph Norris could have given a flying F about SF until it all hit the fan.

I think EC thought he was important but in the grand scheme of things with the serious players like the property and business operators (Stockland, Westfield) and the private operators that don't flaunt their money, CBA would have considered EC a handy pickup but not a make or break account to retain.


----------



## doobsy (6 February 2012)

Oh, of the $2B remaining, only a third was CBA apparently so more like 0.11 - 0.22% of their total mortgage book was Storm exposure.


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## Mash (6 February 2012)

Dock,
I was still composing my reply when you posted yours, so did not see your post until after I sent mine. I chose the word "rogue" as that is what had been used in the media adnausium. As I stated that response was to Doobsy and nothing to do with your post.

Requested links etc are not at my fingertips and I really can't be bothered..... just what I have read, heard and been told by those that should know. Ralph has already been subpoenaed and there is no way he will allow his sorry **** to be hauled before the court....IMHO.

Yes it is hopeful that the mediation will be the end ...... but what's wrong with having hope?


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## DocK (6 February 2012)

Mash said:


> Dock,
> I was still composing my reply when you posted yours, so did not see your post until after I sent mine. I chose the word "rogue" as that is what had been used in the media adnausium. As I stated that response was to Doobsy and nothing to do with your post.




OK, I made a wrong assumption there - it was the wording that misled me, I guess.



> Requested links etc are not at my fingertips and I really can't be bothered..... just what I have read, heard and been told by those that should know. Ralph has already been subpoenaed and there is no way he will allow his sorry **** to be hauled before the court....IMHO.




Fair enough, but if you do ever have the motivation I'd appreciate any links.  My understanding must remain that whether or not the CEO and board of the CBA were aware of the actions of their Tvle branch as yet remains unanswered.  Heresay evidence doesn't count for much in the legal system, so in the absence of proof I'm left wondering who to believe.  I'd prefer to believe Norris is lying through his teeth, (and this is my inclination) but being able to prove this is another matter entirely, and I'm willing to give him the benefit of the doubt in the meantime.



> Yes it is hopeful that the mediation will be the end ...... but what's wrong with having hope?




Absolutely nothing! Hope for the future is what's keeping a lot of us going on a daily basis.  I guess I'm more of a pessimist/realist by nature and prefer to expect the worst and experience the pleasure of being wrong, as opposed to those like my husband who prefer to always expect something better must be just around the corner and sometimes be disappointed when it's not.  

I do wish you luck in the coming legal proceedings.


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## Smiley (6 February 2012)

I do find it strange that Mark Weir, self appointed founder of SICAG, has the same lawyers (Russells Lawyers of Brisbane ) representing him as do Emmanuel and Julie Cassimatis - just out in latest notification from Levitt. . . .who is in whose pockets?


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## DocK (6 February 2012)

Smiley said:


> I do find it strange that Mark Weir, self appointed founder of SICAG, has the same lawyers (Russells Lawyers of Brisbane ) representing him as do Emmanuel and Julie Cassimatis - just out in latest notification from Levitt. . . .who is in whose pockets?




Was he originally in the Levitt action?  I must admit I'm not clear on the details of who is involved in which action - I thought there were only two: Levitt's and ASIC's.  What is the difference between Levitt's and Russell's, apart from the litigants of course.  Is the basis of each claim similar?  I'm not a member os SICAG.


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## Mindstorm (6 February 2012)

Smiley said:


> I do find it strange that Mark Weir, self appointed founder of SICAG, has the same lawyers (Russells Lawyers of Brisbane ) representing him as do Emmanuel and Julie Cassimatis - just out in latest notification from Levitt. . . .who is in whose pockets?




Apologies in advance Smiley....

"Mark Weir, self appointed founder of SICAG" ???

Can you substantiate this quote?

To my own personal memory, when I attended the meeting at the Ox in Margate, when the original SICAG committee were put forward and seconded, Mark Weir did not appoint himself as the founder of SICAG.

Maybe you were at a different meeting?

MS


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## Smiley (7 February 2012)

Hi Mindstorm, you missed the point - you used quotes " " I did not.  Who founded SICAG? Mark and Neil and possibly Cassimatis in the background? . . . Weir seemed to always support the Storm approach; but then he did state publicly that he did not read relevant criticisms of Storm - e.g. parliamentary submissions.  My point is about who is close to whom and why?


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## maccka (7 February 2012)

Smiley said:


> I do find it strange that Mark Weir, self appointed founder of SICAG, has the same lawyers (Russells Lawyers of Brisbane ) representing him as do Emmanuel and Julie Cassimatis - just out in latest notification from Levitt. . . .who is in whose pockets?




Smiley!  

Firstly, Mark Weir is a properly elected co-chairman of SICAG.  He is HIGHLY respected within our organisation and continually lives and relives and relives this revolting mess for every waking minute.   He is constantly supporting people in their extremely personal struggles and it is a job that I can't do so he has my complete support and respect.

Secondly, who he is or is not using for legal advice is absolutely NONE of anyone's business except him, his wife and his legal team.

Thirdly, just because he is using the same legal team (which I have absolutely no idea about) it doesn't mean he is using the same case.  Even if he is then again it is nobody else's business.

I can't speak for Mark and I can't speak for others but I can speak for myself.  I do not appreciate you using a public forum to cast aspersions/rumour/gossip on another person.  

Maccka


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## SJG1974 (7 February 2012)

DocK said:


> I'm not bothered by posts directed at me personally, but I'm quite disgusted by some of the venom and condescension shown towards some posters who are obviously still hurting quite badly.




I would have thought it has gone both ways on this forum DocK to be honest. I guess people see what they want to see. 



DocK said:


> Why would any ex-storm client reading this thread feel that their story or opinions would be met with an understanding or sympathetic attitude?




That probably depends on what their story is in a way.  If it is the same story we have heard ad nauseum around here, the likes of “I didn’t know borrowing against my house was risky”….”I didn’t know double gearing was risky”….”I only wanted to protect my money”….”I thought it was a conservative strategy”….”the banks screwed me”….”I paid massive fees just expecting to get financial advice”…”borrowing against my home served no benefit but I did it anyway”…blah blah blah then if they aren’t able or prepared to answer questions about these claims, then that sympathy starts to erode, particularly if they react in the way many posters have around here when questioned on those very points.

Unfortunately, we have seen many who not only can’t explain, or don’t want to, but then to borrow your words show “venom and condescension” towards those asking for answers.  Perhaps go back and see who has been subjected to the most venom around here….I think you will find that those people aren’t Storm victims. Again, people see what they want to see.




Garpal Gumnut said:


> There is a wider interest here as well, that Storm Investor posters are not aware of, from my reading of the posts.
> 
> That is to educate investors of the present and future, to ensure that they are better educated and do not make the mistakes that investors in Storm did.




Unfortunately the people in the position to teach the lessons (the victims themselves) aren’t prepared to be open about the mistakes they made which should be avoided by others in the future. I am not sure how the unravelling of the banks’ relationship with Storm, which seems to have completely taken over this thread, will help educate the next 60 year old who walks into a financial planner’s office seeking advice.

The only thing I am learning from this site is that the banks are crooks and not to trust them, financial advisers, the FPA or the government.

I guess the lesson is don’t trust anyone and put your money under the bed.


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## Harleyquin (7 February 2012)

Smiley you are like too many anti stormies who make uneducated assumptions.  Mark Weir never was the self appointed chairman of SICAG.  

Mark and his family, are, like the rest of us devastated by the collapse of storm, and he was appointed to that position by the SICAG members.  

He has done, and is continuing to do, a wonderful job and I personally admire his commitment to SICAG and Sicaggers.  His legal team is nobody else's business.

SICAG was formed primarily as a support group when we all needed support and lots of it.  There are a lot of so called 'facts' put on this forum by people like you.

Take your own, and those of your supporters, and do your research.


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## Judd (7 February 2012)

Harleyquin said:


> Smiley you are like too many anti stormies who make uneducated assumptions.  Mark Weir never was the self appointed chairman of SICAG.
> 
> Mark and his family, are, like the rest of us devastated by the collapse of storm, and he was appointed to that position by the SICAG members.
> 
> ...




HQ, Smiley *IS* a stormie.  S/he has provided a few interesting viewpoints including those from early on in this saga.


----------



## Frank Ainslie (7 February 2012)

The CBA and Storm - Part 3

*Contractual considerations!*

Setting the question of UMIS aside because Corporation Law and interpretation will decide the issues there, the CBA (and the other Banks for that matter) will rely heavily on its conditions of contract with its Storm customers. _“Our customers knew what they were doing when they signed the margin loan contracts and signed off on the housing loans! Further, they were notified of our trading terms and conditions at the time!” _

This is fair comment because contract law is based on offer and acceptance for a consideration. Our lawyers will therefore have to prove (among other things) that the CBA-Storm customers’ rights under these contracts have been violated, and that the CBA has failed to meet its obligations under these contracts. 

I have covered the contractual issues in depth on my website _“Storming on Banks”_ so I will not be repeating the exercise here because space for one is somewhat limited. I will merely cover the matters that will play a part in the forthcoming trials.  

Frankly, it seems strange to me that the Court has decided to run the case for UMIS and some test cases based on contractual breach concurrently because I would have thought that if UMIS is proven, contractual breach would become irrelevant for those that fell under this scheme. _“How can one decide on breach if the original contracts are declared invalid?”_ It’s a bit like putting the cart before the horse to my mind. They, the legal experts, would probably retort, _“We know best!” _We ‘Stormies’ certainly hope so!

I will deal with the housing loans that were extended by the banks for investment purposes when I deal with the matter of _“imprudent lending”_ in a later posting. Today, I will concentrate on margin loans and margin calls including contractual rights and obligations. 

Even though contracts such as margin loan agreements are based on the conditions set down by the Banks, it doesn’t necessarily follow that all those conditions will stand up in a court of law. Conditions in a contract must be fair and equitable to both parties, and protect both parties' rights Further, it also doesn’t follow either that these conditions are always framed efficiently. For instance in _“Goodrich v Macquarie Bank (Leverage Equities)”_, on appeal it was found that the Macquarie Bank’s conditions were in part poorly drafted and led to some ambiguity even for the Appeal Judges.

The _'Goodrich v Macquarie Bank (Leverage Equities)' _case was an interesting one because the Appeal Document overturning a number of the primary judge's decisions gives clarity to such matters as _“novation” _and _“assignment”_.

_“A basic principle of contract law is that a ‘novation’ of obligations under a loan contract without the consent of the borrower will be ineffective – irrespective of whether the terms of the underlying loan agreement purport to permit such a dealing. Novation’ is the act of either replacing an obligation to perform with a new obligation, or replacing a party to an agreement with a new party”_

The burning question then becomes _“Who was responsible for making margin calls to the CBA’s Storm customers – the CBA or Storm?”_ I personally have no doubt that the Court will find that the CBA was responsible for any margin calls to its customers, not Storm. For one, Storm was never a party to any of the margin loan contracts between the CBA and its Storm customers. Therefore, was the CBA entitled to assign its responsibilities over to Storm in this regard? 

The _'Goodridge v Macquarie Bank (Leverage Equities)'_ Appeal Document goes some way to answering this question even though it was found that the Macquarie Bank was entitled in this instance to assign such obligations without prior approval. However, this is the exception rather than the rule and it was only permitted because Leverage Equities was a manager of a securitisation programme.

*“323. The question which arises in the present case is whether the terms of the relevant clauses contain a consent by the borrower to the introduction of a new lender to assume the rights and obligations of Macquarie as well as to the release of Macquarie from its rights and obligations under the LSA. “*

The Appeal Judges Jacobson, Finkelstein and Stone found that _“Without limiting the previous provisions of Clause 21, Macquarie Bank is entitled to assign its rights and novate its obligations to any trustee or manager of any securitisation programme.”_

_“The role of the Trustee is to act on behalf of investors while also facilitating the complex nature of securitisation funding and financial transaction flows has given it a position that can be seen to act as providing a fiduciary duty while being commercially successful at the same time. The Trustee needs to balance its fiduciary obligations, to meet the commercial demands that will exist.”_

*“325. I also consider that cl 21.2 and cl 21.4 make it sufficiently clear that the borrower gave prospective consent to the novation of the LSA to any third party who was prepared to assume the obligations of the lender."*

Bearing the aforementioned in mind, could Storm by any stretch of the imagination be considered a trustee or manager of a securitisation programme?   

For one there are certain conditions and formalities that need to be met first in order to be a trustee or manager of such a programme. For another financial advisers for the most part do not have a fiduciary duty. When the Ripoll enquiry findings were released, a key recommendation was the introduction of a statutory fiduciary duty for financial planners to act in the best interests of clients. This means an obligation to place a client’s interests ahead of their own. 

Certainly, Storm was never in a position to *“assume the obligations of the lender”* in the same way Leverage Equities were. Therefore, I believe that the CBA or any other Bank for that matter will find it difficult to prove that they had the right to assign their obligations under these margin loan contracts.

If this should prove to be the case, then the Banks’ responsibility for making margin calls directly on their customers lies solely with those Banks no matter what arrangements they make with any third party such as Storm.

The _'Goodridge v Macquarie Bank (Leverage Equities) /I]case is also interesting for another reason. The primary Judge (J Rares) made the following observations that were not challenged on appeal. He found that the word "MAY" used by Macquarie Bank in its margin loan conditions in effect means "SHALL", when it comes to making a margin call in terms of the loan agreement. 

"Otherwise the client would simply not know what were the actions which should be taken to satisfy the margin call. Nor would the client know, in the absence of knowing a margin call existed, that actions were required to be taken in the first place." (per: Santow JA, with whom Gyles and McCole JJA, agreed). 

A similar clause occurred in the later version of the CGI Margin Call Agreement. 

In view of this, can the timeframes be deemed as "reasonable" in the circumstances? The time that elapsed of some 10 to 11 weeks in the case of the CBA and some 3 to 4 weeks in the case of Macquarie Bank before they proceeded to effect margin calls directly on their customers cannot be justified by any banking institution! Therefore, I cannot see how they are going to defend themselves if they cannot prove that they were entitled to assign their responsibilities to Storm. The blame must fall back on them. Personally, I don’t believe the Banks can justify their actions, and I suspect that was one of the reasons why the CBA early on came up with a “resolution scheme” to cut its losses. By introducing this Scheme, the CBA hoped that it was able to give authority to a 90 per cent margin loan ratio and bury its own misdeeds along the way.

There is, of course, another path that the Banks may go down and that is the one of ‘Agency’. The CBA resolution scheme put forth by the CBA is based on the premise that "Storm was our agent" and therefore had an implied authority to act on our behalf when dealing with banks in such matters as margin loans. This is the thrust of the legal arguments outlined in Slater & Gordon's booklet pertaining to this scheme where 'agency' was clearly assumed to have existed. The fact that the CBA made this assumption and 'The Panel' and Slater & Gordon went along with the notion speaks volumes for this Scheme's validity.

This 'Agency' claim is a two-edged sword for the Banks because it can also be argued by our side that the banks were closely allied with Storm and allowed that firm to carry out duties that were rightfully the Bank's to perform. In so doing, the CBA was itself employing Storm in a de-facto agency role. 

This will be for the courts to decide. I have no doubt that the banks will throw this "Agency" issue into the ring sooner rather than later because it believes by so doing that this will mitigate its esponsibility to a large extent where contractual breaches are concerned.

I will deal with this question of “Agency” in my next posting._


----------



## Solly (8 February 2012)

> *"Storm directors return fire at ASIC*
> 
> THE founders of Storm Financial, Emmanuel and Julie Cassimatis, have hit back at the corporate regulator, saying it repeatedly reviewed the financial planning business before it collapsed spectacularly in 2009."




More by Elisabeth Sexton @ smh.com.au


----------



## doobsy (8 February 2012)

Solly said:


> More by Elisabeth Sexton @ smh.com.au





As outlined in the exerts from the newspaper articles my ex boss was writing, MANY people saw this coming.


----------



## Harleyquin (8 February 2012)

Sorry Smiley I didn't realize that you were a stormie.  My apologies.


----------



## Frank Ainslie (8 February 2012)

The CBA and Storm (Part 4)

*Agency considerations.*

I have already stated that the _‘CBA Resolution Scheme’ _was based for the most part on the assumption that Storm was acting as an agent for the CBA’s Storm customers, and those customers gave Storm the authority to do so.

It needs to be understood that because the CBA’s Storm margin loan customers authorised Storm to act for them on any margin loans, this does not automatically give Storm the right to act for them in an agency capacity and all that implies. Nor does it give the CBA the right to make this assumption.

Legally, an agent is someone who has authority to create legal relations between a person known as a 'principal' and others. Put simply, this means letting someone act for you. 

_“Agency is a consensual relationship created by contract or by law where one party, the principal, grants authority for another party, the agent, to act on behalf of and under the control of the principal to deal with a third party. An agency relationship is fiduciary in nature, and the actions and words of an agent exchanged with a third party bind the principal. An agreement creating an agency relationship may be express or implied, and both the agent and principal may be either an individual or an entity, such as a corporation or partnership.”_

In Slater & Gordon’s Booklet entitled, _“PROPOSAL FRAMEWORK & ADVICE BOOKLET” _hereafter referred to as S & G’s Booklet, it outlined the legal arguments involved, basing many of its assumptions on the fact that Storm acted as an agent for its CBA-Storm clients. I will now concentrate on some of those aspects of the S & G Booklet that relate to _‘Agency’_. 

*“10.2 The other document that forms part of the margin loan contract is an agreement reached between Storm and the Bank in May 2007, which provided that the Bank would effectively increase the margin call loan-to-security ratios (MCLSR) for Storm clients' margin loans that were secured by Storm-badged index funds up to 90% (see below at paragraph 13 for further details). The effect of this agreement was to vary the terms of the existing margin loan contracts to allow for, among other things, the increased margin call loan-to-security ratios. It's common for parties to a contract to vary its terms by agreement in this way. Although you weren't involved in the May 2007 agreement personally, it's likely that a court would find that Storm was acting as your agent in entering into this agreement with the Bank, so it could agree to the variation on behalf of its clients (see below at paragraph 12). From May 2007 onwards, therefore, this agreement would form a part of the margin loan contract.” *

In the wording above it states, _“Although you weren't involved in the May 2007 agreement personally, it's likely that a court would find that Storm was acting as your agent in entering into this agreement with the Bank.”_ I doubt it!  The May 2007 agreement was not an extension of any CBA Storm customers’ margin loan contracts with the banks as this Scheme would have you believe because any amendments or alterations to the margin loan contracts needed the approval of CBA’s Storm margin loan customers. I believe it is therefore wrong of anyone to make this assumption.

In contract there is something called the doctrine of privity. The doctrine of privity means that a contract cannot, as a general rule, confer rights or impose obligations arising under it on any person except the parties to it." (GH Treitel, The Law of Contract)

_"In Common Law it is reasoned that:

1. Only a promisee may enforce the promise meaning that if the third party is not a promisee he is not privy to the contract. 
2. There is also the principle that consideration must move from the promisee. 

The two principles of privity and consideration have become entwined but are still distinct. If the doctrine of privity was inflexibly applied it would cause considerable injustice and inconvenience. Many exceptions to it have therefore been developed. One is in relation to “Agency.”

The concept of agency is an exception to the doctrine of privity in that an agent may contract on behalf of his principal with a third party and form a binding contract between the principal and third party.

Generally an agency may be created by written or oral agreement, or may be implied by the conduct of the parties – both the agent and the principal. For an implied agency, the law will look at the actions of the parties to determine objectively if an agency exists – that is, have you acted in a way that reasonably implies your intention to have someone act as your agent."

Did an agency agreement exist between us and Storm, expressed or implied? The fact of the matter is that we paid Storm Financial for financial advice. That was Storm’s role. We then followed that advice as outlined in Storm’s SOA. Part of this advice for many of us was to take out a housing loan for investment purposes and a margin loan. Storm was never a party to either our house loan or our margin loan with the CBA or anyone else for that matter. The May 2007 was a separate agreement between Storm and the CBA to which the CBA-Storm’s margin loan customers were not a party. How could they be when their approval was not sought beforehand? 

There was no mention in the Storm SOA that Storm would operate in an agent capacity as far as we and banks were concerned. A "go-between", yes, but no more! Certainly, we did not give Storm any authority to re-negotiate any contracts we had with those Banks on our behalf. Storm’s prime duty was to give us sound advice and then liase with any third-party providers, putting any arrangements in place that were required. 

*12. Was Storm a party to the margin loan contract? What was its role in the contract?* 

*12.1 Although it was Storm that had most or all of the dealings with Colonial relating to your margin loan, Storm was not a party to the margin loan contract. The contract was an agreement specifically between you and Colonial. In the "small print" of your margin loan application, you authorised Storm to act on your behalf in relation to your financial dealings, and the margin loan contract provided that your authorised financial representatives could deal with Colonial on your behalf. Technically, Storm was acting as your agent when it communicated with Colonial on your behalf, and specifically when it negotiated the May 2007 variation to the contract that permitted the higher margin call LSR - that is, it acted on your behalf, and with your consent to enter into certain legal or financial arrangements for you. *

In the wording above it states “Storm was not a party to the margin loan contract” and then it goes on to state, “In the small print of your margin loan application, you authorised Storm to act on your behalf in relation to your financial dealings" This is a far cry from giving Storm the authority to act as our agent with all the powers such entails.

It also states, “…specifically when it negotiated the May 2007 variation to the contract…” At no time did CBA’s Storm customers give consent for Storm to enter into any legal arrangements on their behalf. Therefore, the May 2007 agreement should not be held up by Slater & Gordon as a yardstick because this was a separate agreement between Storm and the CBA that has no legal implications for any CBA-Storm customers. How could the May 2007 have when those CBA-Storm customers were not a party to this agreement? For that matter, how could they be a party when most CBA-Storm’s margin loan customers were never notified of its existence to start with? It could have legal implications for the CBA though where contractual breach is concerned because it created a situation where the CBA relied on Storm to act. In so doing, the CBA assigned its responsibilities and obligations under its margin loan agreements with its Storm margin loan customers to Storm.

*15. Should Colonial have allowed me to have an LSR as high as 90%7 

15.1 Parties to a contract are entitled to vary the contract terms, if each of the parties agrees. The agreement between Storm and Colonial to effectively increase the MCLSR up to or beyond 90% is an example of such a change - Storm sought and agreed to this variation on your behalf, and Colonial was entitled to agree to the change. *

The CBA, I believe, based on the principle of contract law was not entitled to agree to any changes relating to the margin loan agreements it had with its CBA-Storm margin loan customers without their prior approval! It matters little that the CBA’s lawyers will argue that it was for the benefit of Storm’s CBA clients (or should I say, it was perceived to be) because it needed the CBA’s Storm customers’ approval for it to be validated. If that approval had been obtained, THEN, it certainly would have been an extension of the original margin loan contracts!

The S & G Booklet is replete with assumptions and was designed, I believe, to give credence to the CBA’s position rather than defending the position of the CBA’s Storm customers who engaged S &G to act on their behalf in the first place. I told S & G as much in March of 2010. They responded by sacking Helen and me as clients! I lodged a complaint and we got the bullet! No explanation or response to the various legal points I had raised - just "Goodbye!" We are now with Levitt-Robinson and are very glad to be so. 

If ‘agency’ cannot be proven by the CBA, it must surely bring into question ‘CBA’s Resolution Scheme’ because it has been constructed on a false premise and cannot therefore be truly equitable._


----------



## Quincy (8 February 2012)

Solly said:


> "Storm directors return fire at ASIC
> 
> THE founders of Storm Financial, Emmanuel and Julie Cassimatis, have hit back at the corporate regulator, saying it repeatedly reviewed the financial planning business before it collapsed spectacularly in 2009."
> More by Elisabeth Sexton @ smh.com.au






> The defence said the pair did not breach their duties as directors ''as they conducted the affairs of a solvent company in good faith and in accordance with the informed wishes of its shareholders - themselves''.



>>>>>>    <<<<<<


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## doobsy (8 February 2012)

Frank

I am sorry but I still do not agree.

It was from the very start in all margin loan contracts that they had the ability to adjust the level they are willing to lend on any individual stock or fund as they see fit. This is up and down.

Throughout the crisis every margin lender was reviewing it's approved list and making adjustments where it saw need. If a stock like ABC learning was in trouble they reduced the amount clients could borrow using that stock as equity. In some cases they reduced it to 0. Clients were then required to either reduce the loan balance to keep the LVR the same or add another stock as collaterol.

Quite often a stock will be added to a ML list of approved holdings with a lending ratio of 30-50%. As it matures / grows then they are more comfortable lending against it and the lending ratio might be increased. No notification is required.

Banks used to lend 80% on residential housing. Over time they became more and more comfortable with this lending and you can now access up to 100% on a residential property under the right conditions. Should all existing mortgage holders have been advised the bank was now lending more against homes?

If Storm pushed for a higher LVR and got it then good for them, but the action of changing the lending ration on an index fund was and still is not outside the normal scope of operations for any margin lender.

If a certain margin lender has better knowledge of a sector they might feel more comfortable lending in that area. 

I honestly don't think the increased LVR argument will hold up in any way shape or form when arguing that reflects them working together. The bank will simply show 50 examples of increases and decreases that were made around the same time.

As agreed upon previously, the mishandling of the margin call will and should be addressed but I believe the LVR issue will not assist clients in any way.

To quote Morgan Stanley Smith Barney - Securities noted on the approved list are subject to change without notice.

Inclusion, removal or changes to securities on the approved list is not a recommendation to buy, sell or trade in those securities.

The banks have always had this ability to make changes without notice. They will simply say you should have read your statements.


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## doobsy (8 February 2012)

Loving the wayback machine - great website

http://web.archive.org/web/20070905...gin-loans/recently-updated-lending-ratios.asp

Frank - your LVR increase argument will not hold up.


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## doobsy (8 February 2012)

Found this in the Colonial Margin Lending Terms and Conditions booklet from 2006.

Notice of Margin Call
4.3 (a) You agree that we may provide notice of margin call by any
or all of the following ways to you or your Client Adviser:
• In writing (including by fax, email or other electronic
means)
• Orally, including by telephone
• Updating the Colonial Geared Investments website.
Page 4 Need help? Contact us on 1800 252 351
(b) It is your obligation to keep your or your Client Adviser’s
contact details up to date.
4.4 You are responsible for:
(a) monitoring your portfolio and determining when your loan is
subject to a margin call; and
(b) being in a position to receive any communications from us
in relation to this clause and to act within the time limits
specified in this clause; and
(c) ensuring that a margin call does not occur.

Declarations
5.6 You and the Guarantor declare that:
(a) you and the Guarantor solely own the secured property held
by you, or by another for you; and
(b) you and the Guarantor have told us about all rights affecting
the secured property (such as other mortgages or the rights
of a beneficiary under a trust); and
(c) all the information you and the Guarantor have given us is
correct and not misleading; and
(d) you and the Guarantor have not withheld any information
which might have caused us not to enter into this
agreement;


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## Frank Ainslie (8 February 2012)

doobsy said:


> Frank
> 
> I am sorry but I still do not agree.
> 
> ...




Hi Doobsy,

I'm not sure what you are disagreeing with in the context of what I have written? Please quote the remarks you disagree with in relation to the margin loan ratio! Thks.


----------



## Frank Ainslie (8 February 2012)

Frank Ainslie said:


> Hi Doobsy,
> 
> I'm not sure what you are disagreeing with in the context of what I have written? Please quote the remarks you disagree with in relation to the margin loan ratio! Thks.




Okay Doobsy!

I can now see where you are coming from! Distracted by the cricket, I'm afraid! 

I have written here on the issue of agency and therefore things should be read in that context. My contention with regard to the May 2007 agreement is that it is not an extension of the original margin loan agreements for the reasons stated. Therefore, the issue here is not with regard to the margin loan ratio which I contend the banks are allowed to alter if circumstances demand, but rather with its affect upon the margin loan agreements between the CBA's Storm customers and the CBA and its affects on the way the CBA and Storm acted in the latter stages of 2008. I will elaborate on this particular aspect in a future posting.

At the same time I will be commenting on the exceedingly high levels the CBA's margin loan ratios were set at when commenting on prudent banking.


----------



## Frank Ainslie (9 February 2012)

Solly said:


> More by Elisabeth Sexton @ smh.com.au




Hi Solly,

Here's an article from 1998 which demonstrates just how incompetent Government can be and the fact that despite what has happened in the past, very few lessons are learnt!

_By Simon Longstaff – June 1998

"One of the products of the 1980s was a joke that went something like this:
Question: What have you got with eight Australian entrepreneurs up to their necks in sand? Answer: Not enough sand!

I mention this because the fact that this joke was popular in places as far away as the New York Stock Exchange tells us something about the way in which a considerable amount of business was done, in Australia, during the last decade.

Alas, the Alan Bonds and Christopher Skases of the world (Bond is in gaol in Western Australia, Skase is still hiding, from the Australian authorities, in Spain) could not have indulged their own particular craving for excess unless they had enjoyed the steady patronage of a number of financial institutions. *Indeed, a number of Australia's leading banks were severely embarrassed by the losses incurred through imprudent lending*. However, they have, for the most part, restored their dignity and balance sheets (if not their popularity). Yet, as some of you may recall, not all of the financial institutions survived their own brand of folly during this period. 

Let me outline just one powerful example:

The State Bank of Victoria – a government owned bank – owned a subsidiary merchant bank called Tricontinental. When Tricontinental suffered an AUD2.5 billion dollar collapse, the State Government of Victoria ordered a Royal Commission to investigate the circumstances of the bank's failure. Tricontinental was not the only catastrophe to emerge from the 1980s – but it was one of the worst. As Joe Nagy argues, in his book 'In Over Our Heads: lessons from the excesses of the '80s':
It serves as a textbook case: for directors, who should have been aware that Trico was not being managed the way a financial institution should be managed; for auditors, who should have been aware of administrative and control deficiencies; and for governments, who should have avoided getting involved in a high risk business which they knew little about. For a time, it was the nation's largest and fastest-growing merchant bank, a feat remarkably accomplished with the skimpiest internal controls. Incredibly, its parent, the State Bank of Victoria did not conduct any internal audits.

The Managing Director of the State Bank of Victoria was Bill Moyle. He also served as a Director on the Board of Tricontinental. Whatever he may have thought in private, all of his public comments were supportive of Tricontinental and its CEO, Ian Johns. Yet in May 1989, the bank 'self destructed". Again as Joe Nagy argues:

'That this happened should not have come as a surprise to anyone who understood the lending business. What was astonishing was that an experienced banker like Moyle and a reputable accounting firm like Peat Marwick failed to detect the warning signs and take appropriate action.' Later, there would be no shortage of admonition...It subsequently came to light that loans were quickly approved on rubber-stamp credit analysis procedures, even though the borrower was, in some cases, in default. 

Corporate governance was another weakness. Confusion existed whether Ian Johns, Tricontinental's Managing Director, was reporting to his board chairman or to Moyle.
The Woodward Royal Commission appointed to investigate the collapse, came to a similar conclusion. In relation to the board it found that:

'The board deliberately accepted high risk in the pursuit of high reward'. The theory was that the high risk would be confined within acceptable limits by skilled managers and staff, and by appropriate supervision by the board. In the event, the performance by both management and board was less than adequate for the strategy which the board had endorsed.

Indeed, the report finds that the Managing Director of Trico treated the board as a group of men to be “placated and manipulated”.

It is worth quoting one other of the Royal Commission's findings before moving on. Unlike the case of Nick Lesson, at Barings, most of the losses suffered by Tricontinental were not the product of deliberately dishonest behaviour by the leading figure, Ian Johns. The Royal Commission found that:

All those decisions of Mr Johns which directly brought about the huge losses suffered by Tricon were made by Mr Johns in the belief that they were in the best interests of the group. He backed his judgement without consulting others; he made reckless decisions on inadequate information; he put his faith in many apparently successful businessmen who proved unworthy of his confidence; and when they seemed to be failing him he was unwilling to admit the possibility of losses. These were the faults of an over-confident gambler, not a criminal.

This is an extremely important point. Major ethical failures are not usually caused by greedy or dishonest people. Instead, the vast majority of these failures are produced by the actions of inadequate or incompetent managers and directors."
_

This all sounds too familiar. In my years spent in management, I found that the number one factor when a company failed was always _'mismanagement'_. The end result was always the same: the companies lost money and the employees were the first casualties. 

For those that say we were simple-minded to place our trust in financial institutions, it appears that we are not alone! Many have done so before us and many will follow What's more, many of those have been (and will be continue to be) professional business men and women with far more financial acumen than anyone on this forum. My point is that this can happen to anyone! To believe otherwise is to deny the facts.


----------



## SJG1974 (9 February 2012)

Frank Ainslie said:


> My point is that this can happen to anyone! To believe otherwise is to deny the facts.




No, what happened to you couldn't just happen to anyone Frank.  We have gone over this ad nauseum.  The only one denying the facts is you I am afraid.  There is so much more to this that what the banks did and didn't do, and you know it.  It may not suit your push for justice and more importantly compensation, but that is the unfortunate fact.

At the risk of repeating myself, a high percentage of people who saw Storm saw enough in their strategy to know to steer clear.  You have admitted that you waited for written assurances from Stuart Drummond which never came, yet you proceeded anyway.  You admitted that you saw no value or benefit in borrowing against your home, yet you did it anyway.  YOU DOUBLE GEARED!  And as a result, a falling market magnified your losses. And you chose to do all of these things.

The strategy screwed you before the banks did Frank.  A SIMPLE, EASY TO UNDERSTAND STRATEGY, which you accepted as being conservative and low risk because thats what Stuart Drummond told you, even though a bit of independent thought and research would have told you the complete opposite. This wasnt some black box, it was a ridiculously simple, yet highly risky strategy.  While the relationship between the banks and Storm may not be transparent, a double gearing strategy, using index funds, certainly is.

If only you had have been half as thorough in looking at the strategy before you ploughed your money into it as you are now that you have lost it all.

To borrow your words, "to believe otherwise is to deny the facts".


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## Judd (9 February 2012)

Actually, SJG1974, if the past to be any guide to the dangers of the recent past and present - which seems to be the thrust of the post by Mr Ainslie - it was laid out in an article by Robert A Ferguson in 1994 on the Dangers of Leverage and volatility.

Just a small snippet from the article:

"Leverage [read Debt] increases positive expected returns but it also magnifies volatility.  Downside exposure and the chance of disaster are increased."

I suppose in one way it is saying "Respect debt else you will be smashed big time."

A pity that the then advisers to these former Storm clients didn't have that respect.


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## SJG1974 (9 February 2012)

Judd said:


> Actually, SJG1974, if the past to be any guide to the dangers of the recent past and present - which seems to be the thrust of the post by Mr Ainslie - it was laid out in an article by Robert A Ferguson in 1994 on the Dangers of Leverage and volatility.
> 
> Just a small snippet from the article:
> 
> ...




There are (and always have been) plenty of studies/research papers etc. available that show the dangers of leverage if people are/were prepared to look hard enough.


----------



## Garpal Gumnut (9 February 2012)

hart2hart said:


> I started reading this thread some weeks ago in the hope of picking up some useful advice. I am not sure what.
> 
> We already know that we were stupid and naive and that "something that seems to be too good to be true usually is". We also know that what was always a pretty meagre nest egg at best is now a non-existent one. It is pointless wasting any energy getting upset or angry.
> 
> ...




The above is a post from exactly 3 years ago.

It would be good if hart2hart could post again to give us an update. 

Storm put them into a leveraged margin with Macquarie from the looks of it, and with the meltdown of Storm in the last 3 months of it's existence, these poor folks nest egg went down the gurgler.

It would appear that Storm let them down and Macquarie finished their nest egg off.

What a bloody shambles for these poor folk.

They seem to realise their mistakes, and their poor investing skills, but surely ASIC and the Federal Government owe them some help in recouping any losses from criminal behaviour by either their adviser or the lender.

gg


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## Harleyquin (9 February 2012)

Agree GG I'd be interested in hearing from hart2hart again.

I know there are many others in exactly this position.  To be left with nothing in retirement is just heart breaking.  The majority of us now know what mistakes we made.  Our first mistake was trusting those we thought we could trust.  Our other mistakes have been pointed out to us many times on this forum.​
We have learnt to live with this as best we can, however, a good friend said to me recently "you've changed since this happened, you no longer smile and it's although a light has gone out " and I know that's true.  It's soul destroying to be ripped off by those you thought you could trust and then told by so many that's it's all our fault because we're greedy mongrels.


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## Garpal Gumnut (9 February 2012)

Harleyquin said:


> Agree GG I'd be interested in hearing from hart2hart again.
> 
> I know there are many others in exactly this position.  To be left with nothing in retirement is just heart breaking.  The majority of us now know what mistakes we made.  Our first mistake was trusting those we thought we could trust.  Our other mistakes have been pointed out to us many times on this forum.​
> We have learnt to live with this as best we can, however, a good friend said to me recently "you've changed since this happened, you no longer smile and it's although a light has gone out " and I know that's true.  It's soul destroying to be ripped off by those you thought you could trust and then told by so many that's it's all our fault because we're greedy mongrels.




I would agree with you Harleyquin.

I was ripped off by a Financial Adviser when I was young and starting out, and was devastated.

Luckily I was young and able to recover.

Since then I don't trust anyone giving me advice on my finances, any banks, brokers, suits, governments or agents.

I'm sorry to hear it has affected you so. 

Try and regain your spirit.

gg


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## Harleyquin (10 February 2012)

Thanks GG.  I wish we'd been young when it happened.  It's impossible to recover financially and look forward to doing all the things in retirement that we'd planned.  Now it's just basic survival.  I no longer have all down days though.

Judd I wish the storm advisors had done their research, after all, thats basically what we were paying them for.  

SJ if I'd known that we couldn't rely on a financial advisor, I would have done my own research and just relied on my own knowledge.  We found this out too late.


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## Judd (10 February 2012)

Harleyquin said:


> Thanks GG.  I wish we'd been young when it happened.  It's impossible to recover financially and look forward to doing all the things in retirement that we'd planned.  Now it's just basic survival.  I no longer have all down days though.
> 
> Judd I wish the storm advisors had done their research, after all, thats basically what we were paying them for.
> 
> SJ if I'd known that we couldn't rely on a financial advisor, I would have done my own research and just relied on my own knowledge.  We found this out too late.




Heartless as this comment may seem, it's no use wishing things were different because that will not change anything.  Due to recent personal experience you can trust me on that one.

As for the advisers, I would hazard a guess that most would have been aware of the "potential" danger of debt but dismissed it as irrelevant because the culture of Storm appears to have filtered down from the head of the organisation.  And that person probably was aware of the research, but then maybe they held a view that they were so much smarter than anyone else in matters of finance, why take heed of those lesser mortals.

Just as an aside, and addressed to no one in particular, conmen do not get you to trust them.  They get you to trust in your own judgement. Always be on the alert.


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## bunyip (10 February 2012)

Harleyquin said:


> It's soul destroying to be ripped off by those you thought you could trust and then told by so many that's it's all our fault because we're greedy mongrels.​





I can't recall even one post that accused you or any other Stormer of being a 'greedy mongrel'. 
Nor can I recall any poster saying _'it's all your fault'. _​


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## Harleyquin (10 February 2012)

I wasn't referring to a post on ASF Bunyip.  If you read all media reports, and public comments, from the time this happened you'll soon see that what I'm saying is true.


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## bunyip (10 February 2012)

doobsy said:


> Found this in the Colonial Margin Lending Terms and Conditions booklet from 2006.
> 
> Notice of Margin Call
> 4.3 (a) You agree that we may provide notice of margin call by any
> ...




From the above it looks very much like it's the responsibility of clients to monitor their margin call situation.
And that any client who signed the aggreement was giving a committtment to do exactly that.

Whatever the situation in that regard, the fact is that Storm clients had already suffered catastrophic losses well before their accounts reached margin call.
These massive losses were caused by a combination of heavy gearing and plunging market.


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## bunyip (10 February 2012)

Harleyquin said:


> I wasn't referring to a post on ASF Bunyip.  If you read all media reports, and public comments, from the time this happened you'll soon see that what I'm saying is true.




Fair enough.

Now that I think of it, I do recall one poster on here by the name of 'pilots' who was very vocal in blaming you Stormers 100% for what happened.
Fortunately he hasn't posted on here for a couple of years.


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## SJG1974 (10 February 2012)

Harleyquin said:


> SJ if I'd known that we couldn't rely on a financial advisor, I would have done my own research and just relied on my own knowledge.  We found this out too late.




The whole global economy is based on someone selling you something, whether that be physical goods or services.  And the job of the seller is really to make the consumer believe they need what it is they are selling.  If the consumer doesn't feel they need it, they won't buy it. I guess needs and wants can become blurred sometimes as well.

So really in any form of business, the seller has a vested interest in you buying their product or service.  And because of that, there remains a risk that their representations will be tailored around getting the sale, rather than what is best for you.  Yes this is conflict, but it unfortunately exists (even though in financial planning it is supposedly being stamped out).  

So I don't think it is right to say you can't rely on a financial adviser, but i believe it is fair to say that given the wealth of information at our fingertips these days, you should not soly rely on the representations of any salesman selling you a relatively expensive product or service, without doing a bit of digging yourself.  There are many good advisers out there who unfortunately have been tarred with the Storm brush.  I think you will find that firms like Storm are the exception rather than the rule.

Certainly not trying to rub your nose in it HQ, and I feel for you given what you and others have been through, I really do, but given the forum has become a bit of a bank bashing exercise of late, just trying to add some perspective.


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## Julia (10 February 2012)

For those who think their situation re Storm is unique here are just a couple of extracts from current threads on this forum today:




> Default Re: Daniel Kertcher/Platinum Pursuits - Serious or Scam?
> 
> My wife and I lost over alot in this - over $150,000, almost our entire investment, in this after the fund was promoted by Daniel on stage in Perth in 2007. I have heard from other who lost much more, some $100's of k's.
> 
> ...







> Re: Citadel Markets Gold Coast?
> 
> Complete scammers....... I rang and spoke to Tim ( the one with the kiwi accent ) and asked him to provide me with some evidence of real trading accounts which verified their ridiculous claims ...... Tim told me to " Get F#$ked" and that he didn't want me as a client.. Nice! They don't like it if you ask any questions about what they're selling because its complete rubbish..... its not a trading system.... its nothing more than martingale betting strategy.... i.e... if you lose a trade then you double your bet on the next one.
> 
> ...


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## bunyip (11 February 2012)

Julia said:


> For those who think their situation re Storm is unique here are just a couple of extracts from current threads on this forum today:





These stories only verify my opinion that changes to legislation are not going stamp out dodgy investment schemes that separate the unwary from their money.

For example, how do you shut down licensed fund managers who don't have a clue how to make money, but still run managed funds anyway, all perfectly legally?
They're a dime a dozen, you read about managed funds disasters all the time, not only here but in other countries as well.
The only way to shut them down is for gullible people to stop investing in them. And that's just not going to happen - human nature being what it is, there will always be people willing to pay someone else to do all the thinking for them, while they the clients simply sit back and watch the money roll in. Except that so often it doesn't roll in - it evaporates into thin air instead
But that doesn't stop the next lot of punters from stepping up to lay their money on the table.

There are very few people who don't find some appeal in the concept of making money without having to think or work for it.
There will always be investment products to cater for these people, and many of these products will be legal. The incompetence of some of the people running these investments will continue to ensure that some investors will lose money.
But legislation will never make incompetence illegal.


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## explosiveanthony (11 February 2012)

I agree with bunyip's comments about not being able to legislate against incompetence.

However, Having said that, you have to weigh that up with the social cost that storm and other failed schemes have caused. The only way to prevent this from happening in the future for a large number of people is for investors to become more educated...


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## bunyip (12 February 2012)

explosiveanthony said:


> I agree with bunyip's comments about not being able to legislate against incompetence.
> 
> However, Having said that, you have to weigh that up with the social cost that storm and other failed schemes have caused. The only way to prevent this from happening in the future for a large number of people is for investors to become more educated...




Yes, education is one way to equip people with the knowledge and skills to handle their own investments so they don’t get roped in by the rogues and incompetents.
But education itself poses problems too, not the least of them being ‘which education’?

There are plenty of spruikers who charge many thousands of dollars for educational courses about stocks, futures, currencies, options, and real estate investment. 
These characters, just like Cassamatis, know that people will pay you big dollars if you convince them that you can make big money for them, or teach them how to make big money for themselves.
I’ve done a few of these courses and I found them to be almost useless. Fortunately I only spent $2500 on the dearest one. I know quite a few people who spent 25 grand on courses, and still couldn't make money from what they learnt.

The only finance and investment education I’ve found to be useful is my own reading and research, combined with trial and error by investing small amounts of money that I could afford to lose. Then increasing my investments as my competence level increased.
But for many people it will all seem too hard, and they’ll pay someone else big money to do it all for them. That’s great if it works out well, but so often it doesn’t – Storm Financial being a good example.


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## bunyip (12 February 2012)

Frank Ainslie said:


> For those that say we were simple-minded to place our trust in financial institutions, it appears that we are not alone! Many have done so before us and many will follow What's more, many of those have been (and will be continue to be) professional business men and women with far more financial acumen than anyone on this forum.
> * My point is that this can happen to anyone! To believe otherwise is to deny the facts.*







You’re wrong again Frank....it couldn’t happen to ‘anyone’, but it could and did happen to people like you who took a reckless gamble by committing hundreds of thousands or in your case millions of dollars to Storm’s strategy without even bothering to properly look into it.
What your ego just can’t accept, Frank, is that the vast majority of people who approached Storm were far smarter and more switched on than you were, and they walked away after reviewing the strategy and assessing the risks.

I’ve always maintained that research and common sense were the keys to uncovering the deadly risks in the Storm model. This research could have been much simpler than you think.

Let’s consider an investor who is reviewing the Storm strategy before signing up.
He’s debt free with a net worth of 1.1 million dollars....500k house, 100k cash deposits, 500k shares. 
Storm suggests that he mortgage his home and borrow 400k to expand his market stake to 900k. Then use double gearing to borrow a further 900k against his portfolio.
If he goes ahead he’ll have a 1.8 million dollar market portfolio, with debts of 1.3 million.

His most important consideration should be “How much money could I lose’?  Not ‘how much can I make’? HOW MUCH CAN I LOSE’?
As US billionaire Donald Trump says ‘Look after the downside – the upside will look after itself’.

If the market crashed 25% in one day as it did in October 1987, his 1.8 million dollar portfolio would be down by a staggering $450,000 in a single day!
He’d lose 90% of his 500k of base capital.
He’d lose 49% of his original net worth of 1.1 million (when he includes the 91 grand he’d pay Storm in upfront fees.) 
Storm’s ‘safety net’ of margin calls would have been useless in preventing these losses – at this stage he wouldn’t be in margin call.

Should he proceed with Storm if his figures revealed the potentail to lose almost half a million dollars in one day? Should he sign on with Cassamatis if it was possible that just one decent market plunge could wipe out nearly all his base capital and almost half his net worth in a single day’?
These figures show the Storm model was a disaster waiting to happen. Less than a minute doing some figures on a pocket calculator would have exposed Storm as liars in claiming they had a low risk and conservative strategy. 

How about if the market had crashed 50% in just over a month (as it did in 1987). In just a few weeks his losses, including Storm’s 7% fees, would be 991 thousand dollars (almost twice his initial capital base of 500 grand). His original net worth would  be down by 90%. And that’s without accounting for the fact that he’d be in margin call some time ago. 
If he somehow managed to meet any margin calls, the money outlaid to do so would have increased the losses. If he sold some of his portfolio to meet margin calls, he’d take a huge loss on the portion sold. 
If the margin call wasn’t met, his lender would sell down some of the portfolio at a big loss. 
If he was in margin call but didn’t receive one, sooner or later part or all of his portfolio would be sold down for substantial losses.

Whichever way it went, even if margin calls had been made on time, he’d suffer huge losses due to the combination of heavy gearing and a collapsing market. Lack of timely margin calls may have added to the carnage, but the real damage would be done by heavy gearing in a bear market.

How about your own situation, Frank. The 140 grand you paid Storm in fees suggests that you had some 2 million dollars in the market. How long would it take you to work out that a 1987 style slump would lose you half a million dollars in in a single day?
2 million dollars divided by four would give you this information. How long to work out that simple calculation Frank...... ten seconds to work it out on a pocket calculator? 2 or 3 seconds to do the sum in your head?

Almost unbeleivable, isn’t it Frank, that just ten seconds of research, yes, 10 seconds, could have uncovered the deadly risk you’d be taking if you implemented the Storm strategy!

How about if the market went down 50% in a few weeks as in the ‘87 crash – your loss would have been 1 million dollars, plus margin calls and fees paid to Storm.
How’s that ‘low risk and conservative’ Storm strategy looking now?
Do you still claim you had now way of knowing the risks?
Do you still claim that even savvy investors couldn’t have avoided being caught by Storm?

You didn’t know that the ‘87 crash wiped 25% off the market in one day and 50% in just over a month? Well you should have known Frank, you were in your mid forties in 1987 and you witnessed the event through the extensive media coverage at the time, just like I did.
But if your memory failed you, then a quick search on Google would have given you the 1987 figures.
Prior to committing millions of dollars to Storm’s strategy, it would have been prudent, don’t you agree, to put a small amount of time and effort into finding out just what the market was capable of dishing out to you? 
*By failing to do so you took a big gamble that you could have easily avoided.*

As it turned out, the 2007/08 crash was much slower than 1987, but even more severe in total with a fall of 56%.
But the time frame is irrelevant – a 25% fall is a 25% fall, and a 50% fall is a 50% fall no matter how long it takes.

Frank, the bottom line is that not just ‘anyone’ could have been caught out by Storm, but gamblers like you certainly could be, and were.
Ten seconds of research, or half an hour if you include Google time, could have warned you to avoid Storm like the plague.


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## Harleyquin (12 February 2012)

I'm aware, as I'm sure most are, that storm was not the only company to cause it's clients grief.  I fail to see what this has to do with the what happened to either SF or other financial companies clients.

The problem is not that clients should have done their own research or any other cop-out excuse.  The basic problem is that these companies were registered by the government to operate as a financial advisory company.  Storm were approved by ASIC so I'm assuming for the sake of this debate that the other companies were too.

All registered advisors and/or financial organizations selling their expertise have certain laws/ rules they have to abide by.  They broke their own rules.  Why should anyone of us 'just accept that some crooks exist in this industry to prey on their clients' and that's OK.  The point is this is not OK and never should be OK.

Some of you on this forum are basically saying 'get over it and move on'. Rubbish.  If you are prepared to sit back, do nothing and just accept this lousy state of affairs then that's your problem.  I'm not. 

The people who caused their clients so much grief are criminals.  The clients DID NOTHING WRONG.


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## Harleyquin (12 February 2012)

Bunyip, Frank was NOT the gambler.  He did nothing wrong.


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## Harleyquin (12 February 2012)

Bunyip you may have been able to google something pre storm.

  A lot of us didn't own a computer back then.  A lot of people still don't own a computer.  A lot of people have no idea how to google anything.

Don't assume that because you were lucky enough to afford a computer that this was the case for everyone.  They were three thousand dollars back then.  Just to buy a laptop you are up for a thousand dollars.  That's a lot of money when you don't have it to part with!!!

Not everyone lives close to the facilities needed to do research or where to start researching.  too many people have no idea where to start this so called research that you are so familiar with

You are all going to throw your hat into the ring and disagree with me.  Why?  Because those of you who will do that have the benefit of hindsight, some of you hadn't even heard of storm until it collapsed...and now you are all experts on storm, storm clients and why it happened etc etc etc.

The first person I would have gone to, to seek advice, as part of my 'research' would have been a financial planner!!!


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## DocK (13 February 2012)

I read a quote in my sons' school newsletter that I thought particularly apt for those ex-storm clients currently involved in legal actions:



> Being defeated is often a temporary condition. Giving up is what makes it permanent.



Marilyn vos Savant.


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## bunyip (13 February 2012)

Harleyquin said:


> Bunyip, Frank was NOT the gambler.  He did nothing wrong.




Committing hundreds of thousands or millions of dollars to an investment without first doing some research – that’s gambling.

Trusting the word of salesmen and accepting what they say at face value – that’s gambling.

Putting all you eggs in one basket, particularly the always risky stock market basket – that’s gambling.

Investing in a strategy that can succeed only if the market keeps going up – that’s gambling.

Mortgaging your home to borrow substantial funds for stock market investment when you’re at or near retirement age – that’s gambling.

It’s clear that some Stormers didn’t realise the gamble they were taking. But that doesn’t alter the fact that Storm's strategy was little more than a huge gamble that was doomed to failure once the market turned bearish.
The responsibility of every investor is to do his or her homework before committing funds to any investment. This holds true even if you get professional investment advice.
The great majority of people who approached Storm did their homework, saw the risks in the Storm model, and walked away.
Those who didn't do their homework got caught. Sad but true.


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## Frank Ainslie (13 February 2012)

*Storm Financial and the Banks -  The truth, the whole truth, and nothing but the truth!*

I created the SOB Group because I wanted to give people who had suffered at the hands of Storm and the Banks involved with that firm the opportunity to voice their opinions without fear or favour. However, any closed Group has its limitations because those in it tend to be somewhat insular. Hence, my reasoning for joining the ASF. 

I thought that by becoming a member of this forum it would give me an opportunity to educate the public as to what really occurred rather than what they can garner from the media. However, it appears that this forum is inhabited by certain individuals whose sole object is to denigrate the victims rather than focus on the wrongdoers; namely Storm and the Banks. Whilst it makes for interesting reading at times, it does little to further the truth, and, more importantly, it does nothing in the way of encouraging people that were burnt by this financial disaster to have their say. Therefore, I have decided to create another Group of my own which I will call, _“Storm Financial and the Banks” -  ‘The truth, the whole truth, and nothing but the truth!’ _

Whilst *it will be a public site*, I will control the content so that everyone will be able to express themselves without fear of being ridiculed by other people that have their own agendas. Having spent three years in limbo, the last thing any of us _'Stormies'_ want is to be continually told that we were gambling with our money. They, Storm and the Banks, certainly did! WE DIDN’T!

I’ll post this Group address when I have it up and running! Anyone on this forum that is genuinely interested in what occurred or any 'Stormies' that would like to air their views in a friendly environment are welcome to post their comments there!


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## maccka (13 February 2012)

DocK said:


> I read a quote in my sons' school newsletter that I thought particularly apt for those ex-storm clients currently involved in legal actions:
> 
> Marilyn vos Savant.




There is also...

"The tough times don't last; the tough people do."
"Never, never, never, never give up!"
“Failure is not falling down but refusing to get up.”
“If you get up one more time than you fall you will make it through.”

cheers
Maccka


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## bunyip (13 February 2012)

Harleyquin said:


> I'm aware, as I'm sure most are, that storm was not the only company to cause it's clients grief.  I fail to see what this has to do with the what happened to either SF or other financial companies clients.
> 
> The problem is not that clients should have done their own research or any other cop-out excuse.  The basic problem is that these companies were registered by the government to operate as a financial advisory company.  Storm were approved by ASIC so I'm assuming for the sake of this debate that the other companies were too.
> 
> ...




I'm not saying that Storm clients did anything wrong as in illegal or immoral or unethical.
I'm saying they made some mistakes that could have been avoided if they'd done a small amount of research and independent thinking.
This in no 'cop-out excuse', Harleyquin, it's just a simple fact.
If they were unwilling or unable to do some research for whatever reason, then they should have stayed away from investment.
If you invest money without looking into the investment first, you leave yourself wide open to cop a big kick in the belly.
That's just the cold hard reality of the investment world, unfortunately. 

Nor am I saying 'get over it and move on'. On the contrary, I've said all along that you should take legal action against anyone who you think was involved in illegal behaviour that contributed to your losses.


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## SJG1974 (13 February 2012)

Frank Ainslie said:


> *Having spent three years in limbo, the last thing any of us 'Stormies' want is to be continually told that we were gambling with our money. They, Storm and the Banks, certainly did! WE DIDN’T!*



*

Come off it Frank.

Do you seriously believe that borrowing against your home even though you ADMITTED it served no benefit was not a gamble?  

Do you seriously believe that going ahead with the strategy even in the absence of the written statements by Stuart Drummond which you repeatedly asked for was not a gamble?

You repeatedly went against your own better judgment and proceeded with the Storm strategy.  Do you believe that going against your own better judgment is not gambling?

Do you think that throwing all of your hard earned life savings into such a high risk strategy, despite all of these red flags popping up which you were acutely aware of, is not gambling?

You double geared when you had absolutely no need to Frank.  You spent years in business, you knew the risks of debt, yet you paid those risks not one ounce of respect, and it burnt you.

It appears many Storm clients had absolutely no idea what they were getting into.  You, on the other hand, actually had some sense of the risks and you went ahead anyway, despite  your doubts. The lure of whatever it was they sold you was just too much to ignore, even though that voice in your head warned you of the risks.  

You gambled and you lost Frank.  If you hadn't taken those gambles, you wouldn't be devoting your life to making someone pay for your losses.  That is the unfortunate truth.  

But no, you would have everyone believe that it was ALL the banks' and Storm's fault that you lost your life savings.  Of course it was Frank, of course it was.

And I and others who don't swallow your "Its all the bank's fault" line of reasoning hook line and sinker are the ones with an agenda?*


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## bunyip (13 February 2012)

Frank Ainslie said:


> Whilst *it will be a public site*, I will control the content so that everyone will be able to express themselves without fear of being ridiculed by other people that have their own agendas.




You wouldn't be a Greens voter by any chance, would you Frank?
Would Bob Brown be one of your heros perhaps?

Bob wants to pass laws to control the press so they can’t direct criticism towards him or his pathetic policies.


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## bunyip (13 February 2012)

Harleyquin said:


> The first person I would have gone to, to seek advice, as part of my 'research' would have been a financial planner!!!






Sounds reasonable to me.

And the first person you'd go to if you wanted to buy a house would be a licensed real estate agent. 

And the first person you'd go to to buy a car would be a licensed motor dealer.

But would you believe the real estate salesman if he told you the house was priced well below market value, was in top condition and was in an area that could expect rapid price appreciation, and there were no new highways planned to come right past the door?

Or would you do some research by employing a solicitor to check for any easements or highway plans or anything else that could affect the property?
Would you pay a builder a couple of hundred dollars to inspect the building and give you a report on its condition?
Would you talk to the local council in an effort to uncover anything that could have a negative impact of the property?
Would you consult a firm of valuers, as well as several other real estate agents, in an effort to find out if the property was fairly priced?
I would - I'd dig and dig and dig in an effort to uncover every piece of information relevant to the property.

How about the motor dealer? Would you accept his offer for your trade because he assured you he was offering top dollar?
Would you buy his car because he assured you that his make and model was head and shoulders about every other car on the market?
Or would you do some research by looking into the value of your trade, and perhaps consulting one of the motoring bodies for a report on various makes of cars?
Maybe talking to a few mechanics would be a good move as well, to get some idea of which makes of cars they do most repairs on.

To cut a long story short, you'd conduct thorough research before committing a few hundred thousand dollars to a house investment, or thirty or forty grand to a car purchase.

So before committing much larger sums of money to a stock market investment, don’t you think it would be prudent to do a bit of research rather than just believing the investment adviser who tells you what a great investment strategy he has for you?


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## bunyip (13 February 2012)

maccka said:


> There is also...
> 
> "The tough times don't last; the tough people do."
> "Never, never, never, never give up!"
> ...





Wise and inspirational words, Macca.
And they apply to successful investors as much as they apply to Storm casualties.
I'll hazard a guess that every successful investor has his/her share of the ups and downs of investing. Not everything that's touched turns to gold, not even for successful inventors.
Many of us on here, myself included, have known hard times. Many of us have made decisions that sometimes didn't turn out too well.
You get over it, you learn from your mistakes, you move on and try to do things better next time.
Learning from your mistakes is the most important one. You learn nothing by adopting the attitude that it's all someone else's fault.
Sometimes part of it _*is*_ someone else's fault. But always some of the fault is your own when your investment decision turns out badly.

Facing up to this reality is important for Stormers if they ever want closure on this.
They have little if any chance of recovering their entire losses. 
If they keep blaming everyone else, they'll be bitter and sour for the rest of their lives over what they lost.
They'll be much happier people if they can accept their share of the responsibility for the decisions they made and the actions they took.
I speak from personal experience here.


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## Solly (13 February 2012)

bunyip said:


> <snip>......................
> 
> Facing up to this reality is important for Stormers if they ever want closure on this.
> They have little if any chance of recovering their entire losses.
> ...




bunyip, 

Are you able to share with us what this 'personal experience' was ? Have you suffered that same magnitude of personal loss and circumstance as the Stormers and have you since recovered ?

S


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## pegasus (13 February 2012)

bunyip said:


> Sounds reasonable to me.
> 
> And the first person you'd go to if you wanted to buy a house would be a licensed real estate agent.
> 
> ...




get over yourself mate!


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## explosiveanthony (13 February 2012)

I like to sit on the fence and consider both sides of the argument before passing judgement. I hear there is a documentary coming out on the whole storm financial.

The director/cameraman/(someone doing the docco) of the documentary made an interesting comment that he thought storm victim's were idiots until he started filming... Then he saw how normal everyday people got caught up in all the hype.

So I suppose, put yourself in the victim's shoes and consider how bad it would be to lose everything. Having said that - Everyone who took part in the process from the banks, to the product floggers right down to the storm investors all played their part.

Remember the age old principles "5 Laws of Gold"

1.	Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earning to create an estate for his future and that of his family
2.	Gold laboreth diligently and contentedly for the wise owner who finds for it profitable employment, multiply even as the flocks of the field
3.	Gold clingeth to the protection of the cautious owner who invests it under the advice of men wise in its handling
4.	Gold slippeth away from the man who invest it in businesses or purposes with which he is not familiar or which are not approved by those skilled in its keep
5.	Gold flees the man who would force it to impossible earning or who followeth the alluring advice of tricksters and schemers or who trusts it to his own inexperience and romantic desires in investment

That's my 2c worth


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## Harleyquin (13 February 2012)

I disagree with you Bunyip and I repeat Frank or any storm client were never gamblers.  

A licensed financial advisor told us that this type of investment strategy was perfectly safe and gave a perfectly reasonable explanation why.  We trusted and believed.  

If you care to read your local newspaper there are often articles in their telling you how important it is to seek advice from a licensed financial planner.

Show me anywhere where it says 'don't trust those mongrels with your money they'll only rip you off' or 'go to them but don't trust what they say...do your own research'


----------



## Harleyquin (14 February 2012)

SJG you need to direct those questions to the financial planner who Frank went to.  Frank was the client, and he like so many others, were told that this was a safe genuine investment strategy...by people who have already done the big R word ie RESEARCH. ASIC thought this advice was OK.  The FPA thought this advice was OK.  The entire Aussie banking industry thought this advice was OK.  What's your problem!!!!  She asked..very tongue-in-cheek???!!!???

DoK and Maccka love all of those quotes.  

Oh and DoK don't take my use of the term 'wish' tii literally...I don't.


----------



## bunyip (14 February 2012)

Harleyquin said:


> I disagree with you Bunyip and I repeat Frank or any storm client were never gamblers.
> 
> A licensed financial advisor told us that this type of investment strategy was perfectly safe and gave a perfectly reasonable explanation why.  We trusted and believed.
> 
> ...




Harleyquin

A licensed investment advisor told you that it was a ‘perfectly safe’ investment strategy to mortgage your home and borrow big money to sink into a highly speculative and risky investment such as the stock market.
And you believed him.
That’s like believing a licensed real estate agent who tells you it’s perfectly safe to buy a house on a flood plain beside a creek that’s prone to flash flooding. 
It’s like believing a licensed motor dealer who tells you the car he’s trying to sell you is so good that it’s perfectly safe to be driven at 200 kph.

Sometimes in life we have to think for ourselves and use a bit of common sense. If you’d done that with Storm then you wouldn’t have been burnt.
Sorry to be blunt, but that’s the reality.

Of course you’re not going to see any ads that tell you not to trust salesmen, they might rip you off, do your own research. You don’t see it in car ads or house ads or any other kind of ads – it’s not surprising that you don’t see it in ads about investment advice either.

You seem absolutely determined to try and justify your actions in relation to Storm. You’re absolutely determined not to accept the reality that it was a big gamble to mortgage your home and commit huge borrowings to a highly risky and speculative investment without researching the strategy first.

No problem – I’m quite happy for you to persist with those beliefs if that’s what you choose to do. It’s all the same to me.


----------



## doobsy (14 February 2012)

Harleyquin said:


> SJG you need to direct those questions to the financial planner who Frank went to.  Frank was the client, and he like so many others, were told that this was a safe genuine investment strategy...by people who have already done the big R word ie RESEARCH. ASIC thought this advice was OK.  The FPA thought this advice was OK.  The entire Aussie banking industry thought this advice was OK.  What's your problem!!!!  She asked..very tongue-in-cheek???!!!???
> 
> DoK and Maccka love all of those quotes.
> 
> Oh and DoK don't take my use of the term 'wish' tii literally...I don't.




HQ - Is it just me or does 90% of what everyone says end up returning to BAD ADVICE. Is that the Stormies fault, no, could they have looked into things further, yes with a but, the but being should they need to.

I do however want to clarify a couple of points. The Storm strategy was legal. It was a legitimate investment strategy. SO no ASIC did not have a problem with it, no FPA did not have a problem with it, no the banks did not have a problem with it (even though I am still lost about how Stormies some how make a link that their 25 year old mortgage person at a bank should be able to tell them to or not to proceed with advice given by a firm with 20 years of industry experience)

Where does that leave us? It leaves us with a high risk strategy sold as low risk. It leaves us with "commoditised" advice that was given to everyone. It leaves us with advisers who did know the risks downplaying them then not acting to protect their clients when S hit fan. It leaves us with clients thinking their advisers were acting in their best interests.

Lets get back to some level of reality. The thread is Storm and it is Storm that is still very much the bulk of the reason clients are wiped out.


----------



## bunyip (14 February 2012)

explosiveanthony said:


> I like to sit on the fence and consider both sides of the argument before passing judgement. I hear there is a documentary coming out on the whole storm financial.
> 
> The director/cameraman/(someone doing the docco) of the documentary made an interesting comment that he thought storm victim's were idiots until he started filming... Then he saw how normal everyday people got caught up in all the hype.
> 
> ...




I see you've been reading 'The Richest Man In Babylon'

An excellent little book - I got each of my kids to read it when they were teenagers.
That book and others like it would be invaluable additions to the school curriculum - they'd be far more beneficial than Shakespeare and some of the other boring rubbish I had to study at school.

I recommend that book to everyone on this forum.


----------



## SJG1974 (14 February 2012)

Harleyquin said:


> SJG you need to direct those questions to the financial planner who Frank went to.  Frank was the client, and he like so many others, were told that this was a safe genuine investment strategy...by people who have already done the big R word ie RESEARCH. ASIC thought this advice was OK.  The FPA thought this advice was OK.  The entire Aussie banking industry thought this advice was OK.  What's your problem!!!!  She asked..very tongue-in-cheek???!!!???
> 
> DoK and Maccka love all of those quotes.
> 
> Oh and DoK don't take my use of the term 'wish' tii literally...I don't.




Sorry HQ, I know what you are selling but I am not buying it. 

Frank knew the risks that debt brings.  Frank knew the risks in the investment strategy, hence his request for written statements by Stuart Drummond about how the risks would be managed.  Frank knew that borrowing against his home served no benefit to him and was not necessary.  Frank was a business man who had worked with debt before (anyone who had a home mortgage had worked with debt before).  Frank lived through the 1987 stock market crash and saw the affect it had on the global economy.  Frank lived through the high interest rates of the early 1990s which saw companies go out of business and homeowners struggle to pay their mortgages.

And Frank expects us to believe that despite all of the above, he thought that he was committing to a conservative strategy?  Why…because Stuart Drummond told him so?

Step back and think about that for a minute and tell me whether you think Frank knew he was taking a risk when he proceeded with the strategy of DOUBLE GEARING INTO THE SHAREMARKET in light of the above?  

I think of all of the posts on this forum, his claim that he thought this was a conservative strategy takes the cake.  I mean please, give me a break.  

In answer to your question, *the only problem I have is the claim by almost every Stormer on this site that their financial ruin is 100% the fault of the banks and/or Storm. * Yes the actions of the banks and Storm led you to where you are now and yes if laws have been broken they will rightly pay a price for that.  But are their actions the only reasons why you are in your current situation??  No.  Your actions also contributed to it- those being your choice to believe everything you were told and commit to the strategy and not even do a small amount of digging before committing your life savings.

HQ, do you not find it ironic that now people have lost their money they are prepared to dig hard and find out just what the banks and Storm did to bring upon this financial ruin, yet people like you claim that you had absolutely no reason to do any digging before you committed your life savings to a strategy you obviously did not understand?


----------



## bunyip (14 February 2012)

Harleyquin said:


> A licensed financial advisor told us that this type of investment strategy was perfectly safe and gave a perfectly reasonable explanation why.




HQ

Can you elaborate on this _'perfectly reasonable explanation_' that Storm used to convince you their strategy was 'perfectly safe'?

What exactly did they say in their '*perfectly reasonable explanation'?*


----------



## maccka (14 February 2012)

doobsy said:


> I do however want to clarify a couple of points. The Storm strategy was legal. It was a legitimate investment strategy.




Hi Doobsy,

You can try to clarify those points but you may wish to wait until the courts make that decision.  It would seem to me that the legality of the scheme offered by Storm Financial and the related banks is very much in doubt.  Hence the UMIS court action.

Also, I often wonder whether ASIC would have had a problem with Storm Financial and the banks if it had the volume of evidence about the scheme that it now has when it was making its original decisions?

cheers
Maccka


----------



## doobsy (14 February 2012)

maccka said:


> Hi Doobsy,
> 
> You can try to clarify those points but you may wish to wait until the courts make that decision.  It would seem to me that the legality of the scheme offered by Storm Financial and the related banks is very much in doubt.  Hence the UMIS court action.
> 
> ...




This should take about 10 seconds.

I could have run the same strategy for my clients. No relationship with a particular bank, no special LVR deals. But let me be clear the strategy was to turn a client upside down, shake them until every drop of equity fell out and then take that equity and gear it at 50% into the share market. 

Some clients had existing equity. Some clients had equity in their homes which meant double gearing. Some had super they could access. Some had a conbination of all of the above.

Again. The strategy in it's most simple form was to access every last cent of equity if possible and then gear that at 50% or thereabouts.

Nothing illegal, nothing untoward, nothing to set off flags with ASIC or the FPA. 

The strategy was legitimate. What was not was the way it was sold and the people it was sold to.

UMIS, the relationship with BOQ and CBA mortgage lending, the relationship with Colonial and Macquarie Margin Lending are all external influences that had impacts but they are not the strategy.

There are still plenty of advisers pushing this strategy right now, most probably being a bit more careful on LVR levels. Are they operating illegally? No. As long as it is for the right clients and they are disclosing the real risks involved.

Happy Macca?


----------



## bunyip (14 February 2012)

SJG1974 said:


> Sorry HQ, I know what you are selling but I am not buying it.
> 
> Frank knew the risks that debt brings.  Frank knew the risks in the investment strategy, hence his request for written statements by Stuart Drummond about how the risks would be managed.  Frank knew that borrowing against his home served no benefit to him and was not necessary.  Frank was a business man who had worked with debt before (anyone who had a home mortgage had worked with debt before).  Frank lived through the 1987 stock market crash and saw the affect it had on the global economy.  Frank lived through the high interest rates of the early 1990s which saw companies go out of business and homeowners struggle to pay their mortgages.
> 
> ...




What do you reckon Frank? 
Is there any truth in what SJG is saying here?
Or is the lad talking through his hat?


----------



## bunyip (14 February 2012)

Solly said:


> bunyip,
> 
> Are you able to share with us what this 'personal experience' was ? Have you suffered that same magnitude of personal loss and circumstance as the Stormers and have you since recovered ?
> 
> S





Suffice to say it was an investment that didn't work out. I've been investing since I was in my twenties and I've done well enough overall, but that was one that didn't perform to expectations. I did my research and assessed the risks to the best of my ability, but I still went down a few hundred grand - a considerable amount of money more than 20 years ago when I was a youngster.
The loss was largely due to circumstances beyond my control, but not entirely. 
It would have been pointless to become sour and bitter and blame everyone but myself.
I accepted responsibility for my decisions and actions, learnt from my mistakes and moved on to the next challenge.
I'm pretty happy with where I am at present.


----------



## Harleyquin (14 February 2012)

The lads talking through his hat.

I know what you're selling too SG and I'm not buying it.

No Bunyip I can't elaborate, because I simply can't remember everything we were told.  How I wish we had a recording of our conversation.

You almost convinced me for five minutes that I bear an enormous responsibility for believing our financial planners advice.  I will never ever accept this level of criminality as being OK,  these financial people, and that include the banking fraternity,  are the ones who need to do all that research that you conveniently and consistently bring up.

Doobsy you may believe it was all storms fault.  Personally after much research on the subject, I feel quite confident in saying you are wrong, very wrong.

Good move to open a new site Frank I approve.  Some of us still need to vent.


----------



## Judd (14 February 2012)

When I first read this thread way, way back I was of the view that ex-Storm clients were greedy, stupid, naive and all that stuff.

After reading the majority of submissions to the Parliamentary Inquiry and the comments of some posters to this thread my view has moderated to a degree.  Not a complete 180 mind you as I still have certain views and biases as to an individual accepting at least a level of responsibility for their actions.

Having said that, as a person who is not directly affected by this financial disaster, and a disaster it surely is, I am not entirely sure that it is proper to infer that former Storm clients were or are irrational as that could be projecting my biases and beliefs on to them.  So only those who made the decision to follow Storm's advice know if they were acting rationally or not.

All the best to those former clients of Storm.  I wish you well.


----------



## SJG1974 (14 February 2012)

Harleyquin said:


> The lads talking through his hat.
> 
> I know what you're selling too SG and I'm not buying it.




Well there’s a surprise!  

Frank has time and again through his posts shown that he knew there were risks in the strategy.  He was so concerned about the risks, that he made repeated requests for Stuart Drummond to tell him in writing how those risks would be managed.  He has gone to great lengths to prove to us just how worldly and clever he is. He has admitted that he had no need to borrow against his house, yet he did so anyway. 

And yet he has also claimed that he thought borrowing against his house, borrowing again and sinking the whole lot into the sharemarket was a conservative strategy...that his desired outcome from double gearing was not to build capital, but to preserve it!  He claimed that he knew shares can go up and down, yet he invested the whole lot in shares (actually more than the whole lot due to double gearing) and he expects us to believe that the purpose of this was to preserve his already more than adequate investment capital.  :bs:

And none of these contradictions seem at all odd to you HQ?  Good lord.  

Frank is a man who with one post makes a claim then contradicts it a few posts later.  Now I am not calling Frank a fibber, but....


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## SJG1974 (14 February 2012)

Now I am not sure if this has been provided previously, but I have stumbled across the Storm prospectus for their proposed listing.  This will be good reading.

http://207.210.106.29/pdf/STORM%20Prospectus%20131107%20_%2010.00pm_Web.pdf


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## Cascade (15 February 2012)

There seems to be again some misunderstanding of the VAS system that CBA used and other comments in regards to the relationship between Storm and CBA in NQ.

I would like to clarify again the VAS system that was used by the CBA.  In my last post #4826 (long time between drinks) I explained the VAS system and how it worked.

- It was used by all staff in the CBA nationwide
- It was designed to save the Bank money given they no longer needed to pay an external valuer for a valuation
- Storm did not have access to it in any way

In regards to a 'rogue branch' again referring to my original post #4769 a large majority of loans were audited and passed (over 700 loan files) so this rogue branch is far from being true.  

This is purely something the Spin Doctors at CBA have made up to keep the heat of them.  

There is no doubt that the CEO knew about the relationship on Storm and CBA, you can not aware that Area the top performing Area nationwide for a number of years and not understand why they are doing so well.  Incidentally though, the Storm connection was only one contributing factor to the Areas success, and was not the only reason why it achieved what it did.


----------



## Solly (15 February 2012)

bunyip said:


> Suffice to say it was an investment that didn't work out. I've been investing since I was in my twenties and I've done well enough overall, but that was one that didn't perform to expectations. I did my research and assessed the risks to the best of my ability, but I still went down a few hundred grand - a considerable amount of money more than 20 years ago when I was a youngster.
> The loss was largely due to circumstances beyond my control, but not entirely.
> It would have been pointless to become sour and bitter and blame everyone but myself.
> I accepted responsibility for my decisions and actions, learnt from my mistakes and moved on to the next challenge.
> I'm pretty happy with where I am at present.




Thanks bunyip,
It was good that you had time on your side to recover. I have never had any large financial disasters and have always invested plenty time to fully research my ventures. Plus I have always had good solid mentors. But in retrospect there has also been just a "smidgen" of good luck that assisted me as well, against some unforeseen less than desirable factors.


----------



## bunyip (15 February 2012)

SJG1974 said:


> Now I am not sure if this has been provided previously, but I have stumbled across the Storm prospectus for their proposed listing.  This will be good reading.
> 
> http://207.210.106.29/pdf/STORM%20Prospectus%20131107%20_%2010.00pm_Web.pdf




Good work SJ. 

I wonder what the butterfly on the front page was all about?
Maybe Cassamatis borrowed Mohammed Ali's motto - 'Float like a butterfly, sting like a bee'!
EC certainly stung pretty hard with his 7% upfront fees!


----------



## SJG1974 (15 February 2012)

bunyip said:


> Good work SJ.
> 
> I wonder what the butterfly on the front page was all about?
> Maybe Cassamatis borrowed Mohammed Ali's motto - 'Float like a butterfly, sting like a bee'!
> EC certainly stung pretty hard with his 7% upfront fees!




Yep having scanned over it last night it is an interesting read....and certainly there seem to be some contradictions to what clients actually say they experienced when they saw Storm.  For example:

Storm talk about the long lead time and education process to ensure clients understand Storm's differentiated model and the associated risks and benefits.  Based on what Stormers have said around here, they still had no understanding of what they were doing by the time education finished and they signed up to the strategy.

They also make it clear that gearing is the staple service of the business and that their goal is to maximise return on equity, not return on investment.  Yet we have had Storm clients tell us they weren't trying to maximise their wealth, just protect it (with gearing).

As a further point, one look at their website and two paragraphs on their home page spell out what Storm is about...

"Our prime objective is to assist you to make money to achieve wealth so you are free to spend on the things you want"

"Part of our vision is putting within reach of the average Australian the wealth creation instruments that are traditionally the domain of the rich"  Now these statements don't suggest to me that Storm's aim is to preserve capital....it tells me that they expect to make me wealthy.

There is no reference to it being a conservative strategy, the only time the words conservative are used are in relation to the margin loan LVRs, yet Storm clients have claimed that the strategy sold to them was conservative.

It certainly shows that there is a huge difference between what Storm publicly said they do and what clients have said they actually did.....and that is even before we get to the role the banks played in the whole mess and the failure of the high risk strategy itself.


----------



## Solly (15 February 2012)

SJG1974 said:


> Yep having scanned over it last night it is an interesting read....and certainly there seem to be some contradictions to what clients actually say they experienced when they saw Storm.  For example:
> 
> Storm talk about the long lead time and education process to ensure clients understand Storm's differentiated model and the associated risks and benefits.  Based on what Stormers have said around here, they still had no understanding of what they were doing by the time education finished and they signed up to the strategy.
> 
> ...





SJG1974
I have previously posted extracts from this prospectus where page 37 is an area of interest to me.

Section 4
4.3 Storm’s differentiated and 
innovative business model
4.3.2 Optimising the client’s personal 
balance sheet;....

Et cetera.

Where it mentions MLVRs set to a conservative level.

I still do not have clarity of what the Ignite supplied Phormula actually did, 
how it interfaced, what routines it performed and its output methods.

S


----------



## SJG1974 (15 February 2012)

Solly said:


> SJG1974
> I have previously posted extracts from this prospectus where page 37 is an area of interest to me.
> 
> Section 4
> ...




Solly,

It would appear from the page in the Prospectus you refer to that Phormula's "role" was to actively manage the client's debt position, and reduce the risks associated with leverage, including avoiding margin call events.  Obviously, it failed big time in this area.

And secondly it seems to have been used to identify times where the LVRs decline, thus providing the opportunity for clients to make Step investments.  The prospectus was pretty clear that the fees for step investments were an important source of revenue for the business.  It would seem that on this score, the Phormula software worked, as evidenced by the 2,000 or so SoAAs sent to clients in July and August 2007 which resulted in an additional $93 million invested.  

On page 36 of the prospectus it states the avergae fee on a step investment was 6.4%...so on the $93million invested in Septmber 2007, they earned almost $6 million.  Not bad money that for a months work.

So it was able to detect when LVRs were too low, and quickly get SoAA out to clients getting them to ramp up their borrowings, and generate more fees for Storm, yet was unable to detect when the LVRs got too high and clients approached margin call, when they should have been pulled out of the market which would have cost Storm money.

And of course, the home loan debt seems to have been completely ignored.

Like journalist Michael West said early in the piece, their strategy was like betting against winter.


----------



## Solly (15 February 2012)

SJG1974 said:


> Solly,
> 
> It would appear from the page in the Prospectus you refer to that Phormula's "role" was to actively manage the client's debt position, and reduce the risks associated with leverage, including avoiding margin call events.  Obviously, it failed big time in this area.
> 
> ...




Yes thanks SJG1974,
I understand the intent of the system, I am looking for clarity on the platform or environment it was running in and the software architecture of the system.
This has always been somewhat of a mystery to me.
S


----------



## Solly (15 February 2012)

Ping: Frank are you still an active contributor to this forum ?

I have noticed you have been rather subdued since I noticed a recent post of yours disappeared.

My colleagues and I are eager to know if your new forum is active.

S


----------



## SJG1974 (15 February 2012)

Solly said:


> Yes thanks SJG1974,
> I understand the intent of the system, I am looking for clarity on the platform or environment it was running in and the software architecture of the system.
> This has always been somewhat of a mystery to me.
> S




A black box it seems. It would be good to know what those speedometers were supposed to show.


----------



## maccka (16 February 2012)

Myth : Borrowers could work out their own security values





cheers
Maccka


----------



## SJG1974 (16 February 2012)

maccka said:


> Myth : Borrowers could work out their own security values
> 
> 
> 
> ...




The more articles on that site I read, the more I come to the conclusion that Cassimatis is behind it.  A lot of the info just wouldn't be available to anyone other than a Storm insider in my opinion.

Thats not to say what is reported in wrong, but it certainly is very one sided insofar as the banks are to blame and Storm escapes all criticism.  This is the line of attack/defence that Cassimatis used in his old website and in his public utterances.


----------



## maccka (16 February 2012)

SJG1974 said:


> The more articles on that site I read, the more I come to the conclusion that Cassimatis is behind it.  A lot of the info just wouldn't be available to anyone other than a Storm insider in my opinion.
> 
> Thats not to say what is reported in wrong, but it certainly is very one sided insofar as the banks are to blame and Storm escapes all criticism.  This is the line of attack/defence that Cassimatis used in his old website and in his public utterances.




SJG,  from where I sit as long as the information is obtained legally and is truthful I don't care whether the information came from a Storm insider or a bank insider (as is suggested in the article) or from ASIC or from anyone else.  Even Cassimatis family members (and there are more of them involved than just EC and JC) have information that is valuable.

Every piece of the puzzle fits somewhere into the overall picture of what happened.  If you focus on one single piece you will only see it's part.  What counts is how the overall picture looks when all the little pieces are fit together.

cheers
Maccka


----------



## Judd (16 February 2012)

SJG1974 said:


> The more articles on that site I read, the more I come to the conclusion that Cassimatis is behind it.  A lot of the info just wouldn't be available to anyone other than a Storm insider in my opinion.
> 
> Thats not to say what is reported in wrong, but it certainly is very one sided insofar as the banks are to blame and Storm escapes all criticism.  This is the line of attack/defence that Cassimatis used in his old website and in his public utterances.




I wouldn't have a clue who contributes to that site and I don't really care.  I don't even know if the information is or is not accurate.  I simply cannot be bothered to read it.  I tried to but as the style of writing reminds me of an 8-year old throwing a massive tanty because Dad would not buy them a new iPod so they can keep up with their friends it is simply a turn off for me.

Sorry, ex-Storm clients.  I did try so that I could attempt to see where a number of issues were but unless you are really, really into it, no thanks it just doesn't do it for me.


----------



## Judd (16 February 2012)

Sorry about this but I'd probably run out of "Edit time" if I amended my previous post.

I have a very uncomplicated approach to finance and I must be missing a few nuances with the Storm situation.

When I had a mortgage, I got a monthly statement from the lender as to how much I owed and paid that month.  When I had a margin loan, I also had a monthly statement from the lender on how much I owed and how much I paid each month.  So, being very basic in my approach, I would just add up the amounts I owed and so knew where I stood overall.  No high finance, no need to know about Return on Equity or anything else.  Just and simply how much I owed and how much I had.

I know from a number of the previous posts that the poor blighters who got caught up in this fiasco, while apparently receiving an advice on the LVR in respect of the margin loan, had the mortgage debt glossed over (if that is the appropriate term) as something as of not being of very much importance.

It is clever how that was done but I simply don't understand.  How do you get a number of people who owe, say $200,000, against their home, and convince them to dismiss that debt and concentrate only on the LVR?  Despite that debt having a relevant impact on their overall equity.  Wish I could bottle that talent.  I'd make a fortune.


----------



## bunyip (17 February 2012)

Judd said:


> Sorry about this but I'd probably run out of "Edit time" if I amended my previous post.
> 
> I have a very uncomplicated approach to finance and I must be missing a few nuances with the Storm situation.
> 
> ...




Judd

What I've noticed about Cassamatis and every other spruiker is that they've worked out that if you tell people what they want to hear, they'll follow you and pay big money for the 'privilege'.
Cassamatis told people what they wanted to hear - that he could make them a lot of money without them having to think or work for it. 
Once they swallowed that line, it wasn't too hard to get them to swallow his other rubbish such as dismissing their debt on their home.


----------



## maccka (17 February 2012)

bunyip said:


> Judd
> What I've noticed about Cassamatis and every other spruiker is that they've worked out that if you tell people what they want to hear, they'll follow you and pay big money for the 'privilege'.
> Cassamatis told people what they wanted to hear - that he could make them a lot of money without them having to think or work for it.




Bunyip, did you ever have a conversation with Cassimatis where he/she told you that he could make you a lot of money without you having to think or work for it?  Did you personally hear him/her tell anyone that. If you didn't wouldn't you say your statement is fairly sweeping and a pretty huge assumption? 

I never once heard Cassimatis or any of the advisors tell me that he/they/Storm could make me a lot money without me having to think or work for it.  As an extra declaration, I never had any conversation with Cassimatis (he or she) and to my knowledge was never ever in the same building as them.  I can say that over a number of years I had conversations/consultations with at least 4 Storm advisors.

I'm not actually trying to defend Cassimatis/the advisors or Storm (although I have no doubt I'll be accused of it).  I am trying to keep some truth in this conversation.  

Cheers 
Maccka


----------



## doobsy (17 February 2012)

maccka said:


> Bunyip, did you ever have a conversation with Cassimatis where he/she told you that he could make you a lot of money without you having to think or work for it?  Did you personally hear him/her tell anyone that. If you didn't wouldn't you say your statement is fairly sweeping and a pretty huge assumption?
> 
> I never once heard Cassimatis or any of the advisors tell me that he/they/Storm could make me a lot money without me having to think or work for it.  As an extra declaration, I never had any conversation with Cassimatis (he or she) and to my knowledge was never ever in the same building as them.  I can say that over a number of years I had conversations/consultations with at least 4 Storm advisors.
> 
> ...




A true believer - still. WOW


----------



## Garpal Gumnut (17 February 2012)

maccka said:


> Bunyip, did you ever have a conversation with Cassimatis where he/she told you that he could make you a lot of money without you having to think or work for it?  Did you personally hear him/her tell anyone that. If you didn't wouldn't you say your statement is fairly sweeping and a pretty huge assumption?
> 
> I never once heard Cassimatis or any of the advisors tell me that he/they/Storm could make me a lot money without me having to think or work for it.  As an extra declaration, I never had any conversation with Cassimatis (he or she) and to my knowledge was never ever in the same building as them.  I can say that over a number of years I had conversations/consultations with at least 4 Storm advisors.
> 
> ...




Thanks maccka,

From the above reply it would appear then, that you would not be able to condemn Storm, Manny or any of the Storm advisers for the advice received by investors.

May I ask then *are you neutral* in relation to that advice, or *would you support* the advice given to investors, taking in to account prevailing market conditions and lending practices at the time.

gg


----------



## bunyip (17 February 2012)

maccka said:


> Bunyip, did you ever have a conversation with Cassimatis where he/she told you that he could make you a lot of money without you having to think or work for it?  Did you personally hear him/her tell anyone that. If you didn't wouldn't you say your statement is fairly sweeping and a pretty huge assumption?
> 
> I never once heard Cassimatis or any of the advisors tell me that he/they/Storm could make me a lot money without me having to think or work for it.  As an extra declaration, I never had any conversation with Cassimatis (he or she) and to my knowledge was never ever in the same building as them.  I can say that over a number of years I had conversations/consultations with at least 4 Storm advisors.
> 
> ...




Frankly Macca, I couldn't care less if Cassamatis did or did not say the words 'I can make you a lot of money'.
There's more than one way to tell people something. 
Take a look at the Storm website and tell me if it does or does not talk about how Storm is there to help clients create wealth.
Step back for a minute and think about Storms strategy of using heavy gearing to dramatically increase the amount that clients could invest in the market. 
Someone with half a million of his own money in the market could triple or quadruple that amount by using Storm's strategy. 
Apart from generating big fees for Storm, what reason other than making big money would you think they had for quadrupling a clients stake in the market?
Everything that Storm said was designed to convince clients they could make big money by following Storm's investment model.
That was the message loud and clear.....sign on with Storm and we'll help you to become wealthy.

Look at the homepage of some of these wealth creation gurus, or look at the brochures they put out. You’ll usually see photos of yachts or Ferraris or speed boats.....what they’re telling you loud and clear is ‘We can make you so much money that you’ll be able to afford all these expensive toys yourself.’
They don’t have to actually utter any words to tell you what they want you to believe.

You seem like a smart enough bloke most times Macca - you work it out for yourself.


----------



## maccka (17 February 2012)

maccka said:


> I'm not actually trying to defend Cassimatis/the advisors or Storm (although I have no doubt I'll be accused of it).  I am trying to keep some truth in this conversation.
> 
> Cheers
> Maccka






doobsy said:


> A true believer - still. WOW




And there it is! There is the evidence of accusation that I was expecting and predicted.  Thank you Doobsy for participating so readily.



Garpal Gumnut said:


> Thanks maccka,
> 
> From the above reply it would appear then, that you would not be able to condemn Storm, Manny or any of the Storm advisers for the advice received by investors.
> 
> ...




Hi GG,

To be perfectly honest, I am trying to wait until all the information is in before I make a decision one way or the other.  Some days I can condemn them 'til the cows come home.  Other days I can't if I look at all the information I have.  As I've said before it depends on the bits of information you have at your disposal.  As a scientist I also constantly feel the need to remove unsupported hypotheses from the table which is why I have very little interest in leaving statements like the one Bunyip wrote unchallenged.  I've been very consistent in wanting people to stick to the truth (supported by evidence).

I like http://www.commonwealthbankdeception.com/ because it often gives evidence to support it's statements.  I like the fact that there are cases before the court as I know that *everyone* involved will need to give evidence to support their statements.  

I intensely dislike it when people are willing to publicly write information and accusations that are unsupported and quite frankly could well be open to libel legislation.

I've seen enough evidence personally to know where my opinion on various banking type institutions is likely to finish up.  I am prepared to say that until all the information is in my opinion could swing in a different direction.

As yet I don't have a clear feeling about the Storm advice.  I haven't seen enough evidence personally yet.

We went to financial planners (SF, and 2 banks) because we aren't experts and we didn't feel qualified enough to build wealth.  I still don't feel qualified to know whether the advice was sound.  I feel doubly unqualified if you factor in the prevailing market conditions and lending practices of the time.  The advice from Storm and the 2 banks was nearly identical and none of it felt right for us.  That's why we didn't go all the way down that track with our own finances.  Enough of my family did though for us to be very personally affected by it.  



bunyip said:


> Frankly Macca, I couldn't care less if Cassamatis did or did not say the words 'I can make you a lot of money'.
> There's more than one way to tell people something.
> Take a look at the Storm website and tell me if it does or does not talk about how Storm is there to help clients create wealth.
> Step back for a minute and think about Storms strategy of using heavy gearing to dramatically increase the amount that clients could invest in the market.
> ...




Now Bunyip - that is a much better way to put your point across.  It comes out more like a logically written statement/arguments with less of the direct statement that is written to appear as if it was what you factually know happened.



			
				bunyip said:
			
		

> Cassamatis told people what they wanted to hear - that he could make them a lot of money without them having to think or work for it.




cheers
Maccka


----------



## Garpal Gumnut (17 February 2012)

Thanks for that honest answer Maccka, and I trust your family are successful in getting their money back.

It has helped me understand many of the posts on the thread of late, and your point about evidence is a moot one.

I did not find the www.commonwealthbankdeception.com site as useful as you did.

gg


----------



## maccka (17 February 2012)

Garpal Gumnut said:


> Thanks for that honest answer Maccka, and I trust your family are successful in getting their money back.
> 
> It has helped me understand many of the posts on the thread of late, and your point about evidence is a moot one.
> 
> ...




GG, 

I can see how you could think my point about evidence is moot.  I would argue though that the debate only comes in if people are choosing to look at each piece of evidence in isolation of all the other pieces.  

The Commonwealth Bank Deception site holds low value if you only look at that evidence.  However if you combine it with evidence from other sources eg the Parliamentary Inquiry, legal documents etc then it has some value.  There are documents shown on that site (in their entirety) that many people would not be able to see otherwise.

It is also extremely important that people read all of the evidence/submissions etc with a critical eye and with constant thinking around what are the biases of the writer/s.  Critical literacy is definitely required, especially given the highly emotive nature (and potential criminal and financial liability) of this topic.

I hope you have a great weekend.

cheers
Maccka


----------



## Harleyquin (18 February 2012)

SJ and Bunyip, I don't care what was/is in the storm prospectus.  Why?  Because we didn't have a copy of the prospectus when we went to storm for advice and we didn't have the Internet on at that time either.

It's very easy in hindsight to throw stones at people in glass houses.

Frank, like the rest of us, was never prepared to risk his house and money.  This was a financial strategy with safeguards in place...supposedly!  I don't understand exactly what they were.  I just accepted that this was the case as I don't have any experience in this sort of thing.


----------



## Solly (18 February 2012)

Maccka, 

To me you make valid points in your recent posts. No entity has been found guilty of any wrongdoings in the court room. At this stage there have only been allegations.  When I read back over some of the posts in this thread it appears to me that there is sometimes a fine line between robust discussion and slander. Regardless of what identity is chosen, nobody is truly anonymous here on this forum and we all are completely responsible for every utterance. 

I have my own not fully supported view on the reason for this collapse that I would never publicly state as I don't possess or have sighted all the evidence. I may well be proved incorrect. It would be beneficial to hope that all relevant details will one day make it to a court room for scrutiny. 

With so many here taking a keen interest in this event, I note that nobody has made any comment about the Directions hearing that was held last Thursday. 


S


----------



## bunyip (18 February 2012)

maccka said:


> Now Bunyip - that is a much better way to put your point across.  It comes out more like a logically written statement/arguments with less of the direct statement that is written to appear as if it was what you factually know happened.
> 
> cheers
> Maccka




Macca

From my private discussions with ex Storm clients and from what I’ve seen on the Storm website, I believe I have a pretty good idea of the tactics used by  Cassamatis to convey the message of_ ‘Storm Financial is the way to personal wealth creation’._
I didn’t say that Cassamatis told clients in person that he could make them wealthy – that was simply the way you chose to take it. 
I’m saying that he told them through his website, through sporting identities like Aussie cricket coach John Buchanan, through testimonials from Storm clients, through Storm’s educational sessions, and through Storm’s branches and client advisers.

Perhaps as a scientist you sometimes have a tendency to over-analyse and look for things that aren't actually there. I trust that you need no further clarification on this.


----------



## maccka (18 February 2012)

bunyip said:


> I didn’t say that Cassamatis told clients in person that he could make them wealthy – that was simply the way you chose to take it.




No you didn't say that he told people in person.  You said...



bunyip said:


> Judd
> Cassamatis told people what they wanted to hear - that he could make them a lot of money without them having to think or work for it.




I chose to challenge the way it was written.  You wrote as if it was a statement of fact. Whether you like it or not your message implies you are for all intents and purposes quoting him.   Words can be a dangerous thing when used by people who are unaware of their impact OR by people who use them to deliberately (or even unknowingly) manipulate them to create a truth that does not exist (commonly considered to be rumours or lies).

That is why I congratulated you for your second rewording of your argument.  It is clearer and makes your point without giving the impression that it was definitively factual and something directly said by a specific person.



			
				maccka said:
			
		

> Now Bunyip - that is a much better way to put your point across. It comes out more like a logically written statement/arguments with less of the direct statement that is written to appear as if it was what you factually know happened.




Even your extra arguments in your last post further support your point of view.  I congratulate you on that also.



bunyip said:


> I’m saying that he told them through his website, through sporting identities like Aussie cricket coach John Buchanan, through testimonials from Storm clients, through Storm’s educational sessions, and through Storm’s branches and client advisers.




Through a process of self analysis of your own text you have clarified what you really intended to say in your original post.  You added detail and arguments in an attempt to support your original statements.  (What you actually did was rationally argue for a slightly different point of view (semantically) to your original one.)  Your later discussion added value to the conversation whereas your original point added little.

As a scientist, I am well able to recognise if I am or am not overanalysing as evidence and further testing allows me to identify it when it is happening.

As an educator, I work to help people develop their potential - to capacity build people. I want people to be able to communicate clearly.  As a scientific educator I want people to communicate *truth* clearly without *rumour*, *unsupported statements* and *innuendo*.

I trust that you need no further clarification on this.  

Have a great weekend.

Cheers
Maccka


----------



## SJG1974 (18 February 2012)

Harleyquin said:


> SJ and Bunyip, I don't care what was/is in the storm prospectus.  Why?  Because we didn't have a copy of the prospectus when we went to storm for advice and we didn't have the Internet on at that time either.
> 
> It's very easy in hindsight to throw stones at people in glass houses.
> 
> Frank, like the rest of us, was never prepared to risk his house and money.  This was a financial strategy with safeguards in place...supposedly!  I don't understand exactly what they were.  I just accepted that this was the case as I don't have any experience in this sort of thing.





So Frank given he knew what debt was and had at least a basic understanding of shares, wasn't prepared to risk his money? And yet he double geared (admitting he didn't need to) and plonked it all in shares?

Come on HQ...really this is getting ridiculous.


----------



## bunyip (18 February 2012)

maccka said:


> No you didn't say that he told people in person.  You said...
> 
> 
> 
> ...




Macca

Your in-depth analysis doesn’t interest me. Accordingly, I neither agree nor disagree with what you’ve said.

Perhaps your penchant for analysis could have been put to better use by making a thorough assessment of the risks in the Storm strategy. Had you done a better job in that regard, your family might have fared much better.


----------



## Julia (18 February 2012)

maccka said:


> Bunyip, did you ever have a conversation with Cassimatis where he/she told you that he could make you a lot of money without you having to think or work for it?
> 
> I never once heard Cassimatis or any of the advisors tell me that he/they/Storm could make me a lot money without me having to think or work for it.






> We went to financial planners (SF, and 2 banks) because we aren't experts and we didn't feel qualified enough to build wealth.




So could you perhaps explain what clients were paying 7% commission for if it was not to hand over their funds in order to have Storm make money for them?




> I am trying to keep some truth in this conversation.



I support such an aspiration but will not be holding my breath.


----------



## Solly (19 February 2012)

> *"Hope for Storm stricken
> *
> 
> SYDNEY lawyer Stewart Levitt has raised hopes that hundreds of millions of dollars lost via failed wealth adviser Storm Financial can be recouped by investors in class actions against the banks."




More by Tony Raggatt @ townsvillebulletin.com.au


----------



## Garpal Gumnut (19 February 2012)

The Cassimatis' are headed to court on May 15th as they attempt to have charges laid by ASIC thrown out.

From the Townsville Bulletin.

http://www.townsvillebulletin.com.au/article/2012/02/17/306591_news.html



> Cassimatises' bid to avoid court battle






> THE husband and wife team who once ran Townsville's now-defunct Storm Financial are tentatively set to face trial on April 29 next year over charges of corporate wrongdoing.
> 
> But Emmanuel and Julie Cassimatis have been granted one last chance to water down or even scuttle the proceedings.






> The Cassimatises maintain that ASIC had frequently reviewed Storm's financial planning model and never raised an objection to it since the business started in 1993. They say factors beyond the company' control had a severe impact, including the global financial crisis and the sell down of Storm investment portfolios by banks, which allegedly failed to issue margin calls.




It will be interesting to see how it goes for them in court, a judgement in their favour will increase the pressure on the banks. Should it go against them they will face court again in 2013.

The Storm investors will not get a say for some time yet in the Levitt's action against the Banks, Macquarie, CBA, and BOQ as mediation continues.

From the Townsville Bulletin

http://www.townsvillebulletin.com.au/article/2012/02/18/307011_news.html



> Hope for Storm stricken






> Mr Levitt said lawyers had evidence to suggest margin lender Macquarie Bank struck deals with Storm Financial from February 15, 2005, and that the Commonwealth Bank's margin lender Colonial Geared Investments struck an agreement from May 18, 2007.






> Levitt Robinson has mounted class actions against Macquarie, the Commonwealth Bank and Colonial First State Investments and is preparing to launch another against Bank of Queensland.
> 
> Mr Levitt said ASIC was working with Levitt Robinson modelling potential damages claims ahead of court-ordered mediations due to occur with the Commonwealth and Macquarie banks in Sydney next week.




gg


----------



## Solly (19 February 2012)

Garpal Gumnut said:


> The Cassimatis' are headed to court on May 15th as they attempt to have charges laid by ASIC thrown out.
> 
> From the Townsville Bulletin.
> 
> ...




GG

The seeking of a summary judgment or a strike out will be interesting to follow. 
I agree with your view regarding judgement.

S


----------



## DocK (19 February 2012)

Solly said:


> GG
> 
> The seeking of a summary judgment or a strike out will be interesting to follow.
> I agree with your view regarding judgement.
> ...




In the (unlikely imo) event that they are successful it won't do much for ASIC's already shaky credibility.


----------



## Frank Ainslie (20 February 2012)

Solly said:


> Ping: Frank are you still an active contributor to this forum ?
> 
> I have noticed you have been rather subdued since I noticed a recent post of yours disappeared.
> 
> ...




Hi Solly,

Pong! I am still looking in on the ASF from time to time but I am somewhat ties up at the moment with other matters (ASIC on the subject of professional indemnity insurance for one)- hence no postings. This has also delayed the formulation of my new forum but I'll let you have details of such in due course.

Just a quick observation regarding Manny Cassimatis' allegations where ASIC is concerned. There is no doubt that ASIC has much to answer for in all this because it failed to see the dangers inherent in Storm's financial model, particularly in a falling market. ASIC will argue that it wasn't its job to do so at the time. Whatever, ASIC in my opinion has shown itself to be a "toothless tiger" that is far from being independent. For one, I believe that it is influenced by political considerations and has a tendency to go soft on banks, particularly the CBA.  Further, it is run by short-sighted bureaucrats that are reactive rather than proactive. Therefore, nothing will change until ASIC itself is investigated - and pigs will fly!


----------



## Frank Ainslie (20 February 2012)

Solly said:


> Ping: Frank are you still an active contributor to this forum ?
> 
> I have noticed you have been rather subdued since I noticed a recent post of yours disappeared.
> 
> ...




Hi Solly,

Pong! I am still looking in on the ASF from time to time but I am somewhat ties up at the moment with other matters (ASIC on the subject of professional indemnity insurance for one)- hence no postings. This has also delayed the formulation of my new forum but I'll let you have details of such in due course.

Just a quick observation regarding Manny Cassimatis' allegations where ASIC is concerned. There is no doubt that ASIC has much to answer for in all this because it failed to see the dangers inherent in Storm's financial model, particularly in a falling market. ASIC will argue that it wasn't its job to do so at the time. Whatever, ASIC in my opinion has shown itself to be a "toothless tiger" that is far from being independent. For one, I believe that it is influenced by political considerations and has a tendency to go soft on banks, particularly the CBA.  Further, it is run by short-sighted bureaucrats that are reactive rather than proactive. Therefore, nothing will change until ASIC itself is restructured and  its employs people that have the capacity to understand the needs of the financial sector and implement changes that also protect investors fully. You can include my remarks where this Government is concerned as well.


----------



## Frank Ainslie (20 February 2012)

doobsy said:


> HQ - Is it just me or does 90% of what everyone says end up returning to BAD ADVICE. Is that the Stormies fault, no, could they have looked into things further, yes with a but, the but being should they need to.
> 
> I do however want to clarify a couple of points. The Storm strategy was legal. It was a legitimate investment strategy. SO no ASIC did not have a problem with it, no FPA did not have a problem with it, no the banks did not have a problem with it (even though I am still lost about how Stormies some how make a link that their 25 year old mortgage person at a bank should be able to tell them to or not to proceed with advice given by a firm with 20 years of industry experience)
> 
> ...




Excellent summation Doobsy! 

However, without the banks as willing partners, Storm would not have been able to implement their grand design. It will be up to our lawyers now to prove that Storm's arrangements with the principal banks, the CBA Macquarie Bank and the BOQ were not aboveboard. Does anyone here for instance really believe that the CBA would have come up with a resolution scheme costing some $300 million if that Bank didn't have a case to answer? As you say, Doobsy, "Let's get back to some level of reality!"

Have a good day!


----------



## Tysonboss1 (20 February 2012)

Frank Ainslie said:


> Excellent summation Doobsy!
> 
> However, without the banks as willing partners, Storm would not have been able to implement their grand design. !




Without the willing participents with dollar signs and luxuary retirement dreams rolling round there eye balls they likewise would not have been able to implement there plan.

Storm and the storm investors together set off on a mission to make mega leveraged returns, and unfortunatly for them it back fired.

The Banks simply set off to make a small interest margin on the loans provided,

They say when the tide go's out you see who was swimming naked, I think you will find the stormies and the storm founders were all swimming naked, But with all their own safe guards the banks were wearing wet suits.


----------



## SJG1974 (20 February 2012)

Tysonboss1 said:


> Without the willing participents with dollar signs and luxuary retirement dreams rolling round there eye balls they likewise would not have been able to implement there plan.
> 
> Storm and the storm investors together set off on a mission to make mega leveraged returns, and unfortunatly for them it back fired.
> 
> ...




Tyson, haven't you been reading the posts from Storm victims like Frank??....Frank has told us he didn't have dollar signs rolling around in his head.  Far from it in fact.

His main goal was to protect and preserve his capital.  Not to make millions, but just protect what he had built up over hius years in business.

Frank paid his huge fees for simple financial planning advice!  He only needed to live on $45K p.a., and with well over $1m to invest (before gearing) he assessed that the risk and potential returns from bank deposits and Allocated Pensions were not attractive enough.

So despite having an understanding of debt and shares, and the risks inherent in each, he decided the best way to protect his money was to double gear into shares via the Storm strategy.


----------



## SJG1974 (20 February 2012)

Frank Ainslie said:


> As you say, Doobsy, "Let's get back to some level of reality!"




If only you would heed your own advice Frank.  If only.


----------



## jjtebj12 (20 February 2012)

Cannot wait until the evidence is tabled and in the public domain for all to see. Then and only then will the real story be told! Not assumptions that appear on this forum! The finish line in near.


----------



## Solly (20 February 2012)

Frank Ainslie said:


> Hi Solly,
> 
> Pong! I am still looking in on the ASF from time to time but I am somewhat ties up at the moment with other matters (ASIC on the subject of professional indemnity insurance for one)- hence no postings. This has also delayed the formulation of my new forum but I'll let you have details of such in due course.
> 
> Just a quick observation regarding Manny Cassimatis' allegations where ASIC is concerned. There is no doubt that ASIC has much to answer for in all this because it failed to see the dangers inherent in Storm's financial model, particularly in a falling market. ASIC will argue that it wasn't its job to do so at the time. Whatever, ASIC in my opinion has shown itself to be a "toothless tiger" that is far from being independent. For one, I believe that it is influenced by political considerations and has a tendency to go soft on banks, particularly the CBA.  Further, it is run by short-sighted bureaucrats that are reactive rather than proactive. Therefore, nothing will change until ASIC itself is restructured and  its employs people that have the capacity to understand the needs of the financial sector and implement changes that also protect investors fully. You can include my remarks where this Government is concerned as well.




Thanks Frank,
I look forward to further details of access to your site. 
S


----------



## Harleyquin (22 February 2012)

Jjte well said and I agree.  

Interesting headlines today re Pirate party.  Love some of the headlines eg Bunch of Plankers.


----------



## jjtebj12 (22 February 2012)

In some weird way I hope this doesn't settle at Mediation as I want to see the CBA's Ralph Norris and Co cross examined under oath so the real truth can be revealed. When this occurs, then and only then will the public know the truth. September isn't that far away to wait for justice. The Banks thought we would go away and accept their pittance of a settlement offer. Fortunately for us "it's not about the size of the dog in the fight - it's the fight in the dog"!!! Good luck to all involved in Mediation tomorrow.


----------



## bunyip (22 February 2012)

jjtebj12 said:


> Cannot wait until the evidence is tabled and in the public domain for all to see. Then and only then will the real story be told!
> Not assumptions that appear on this forum!






Assumptions?  

Doobsy has expressed his opinions as a financial planner. 
Right or wrong, his opinions are carefully considered before he makes them.

Most of the other opinion on this forum in regard to the banks is simply that they're not solely responsible for the losses of Storm clients, but they may be partly responsible, and they should pay a price if a court of law finds them guilty of any illegality.

I don't see any assumptions there - just fair and balanced viewpoints.

There seems to be a belief among you Stormers that we who weren't affected by the Storm debacle are trying to give the banks a clean bill of health. 
Well we're not - they're not above the law, and they should be penalised if they’ve broken the law.


----------



## Frank Ainslie (22 February 2012)

Part 1 of my letter to Chris Bowen regarding PI insurance and ASIC's responsibilities under Section 912B of the Corporations Act for administering such.

The Hon. CHRIS BOWEN
Minister for Financial Services, Superannuation and Corporate Law
PO Box 6022
Parliament House
Canberra ACT 2600

22nd February 2012

Dear Sir,

Re:	Professional Indemnity Insurance – “Lessons still to be learnt!”

Past events where Storm Financial and the Banks are concerned have demonstrated to me that this Government and ASIC will behave wisely only when they have exhausted all other alternatives. 

I together with thousands of others lost our lifesavings when Storm Financial collapsed in early 2009. I have spent the time since then delving into what brought about the failure of this major financial advisory firm and the reasons why so many lost everything. Based on the evidence at hand, the blame does not lie fully with Storm Financial and the Banks closely allied with that firm. Rather, it must be shared in equal part by our Government and ASIC - the consumer credit regulator. 

At the time that we and countless others, acting on Storm’s advice, invested in the market place, we were under the impression that we were protected by statutory regulations and compliance systems that would effectively protect us from malpractice. Sadly, we were mistaken. The simple truth is that this and past Governments have failed in their duty of care to the Australian people because despite numerous instances of past malfeasance in the financial sector occurring at regular intervals, Governments have let this situation continue to fester unabated. Now, with the collapse of Storm and other financial institutions, the Government has at last seen fit to introduce reforms that are designed to restore investor confidence and reassure one and all that another “Storm” cannot occur again! 

Believe me, another “Storm” is just over the horizon if this Government and ASIC continue with their “liasse-faire” economic doctrine of non-interference in commerce beyond the minimum necessary for a free-enterprise system to operate according to its own economic laws. Nowhere is this more evident than with regard to  “professional indemnity insurance”. 

I have written to ASIC on a number of occasions regarding our experiences when attempting to claim against Storm’s insurers, and the deficiencies that still exist today with regard to “professional indemnity insurance” despite the new regulations that now exist. 

Attached, you will find copies of ASIC’s letters I have received in response to mine on this subject. These letters, dated 17th March 2011 and 13th February 2012, explain the requirements under the regulations as far as taking out PI insurance cover by financial advisers is concerned.   Unfortunately, in its correspondence ASIC not only fails to answer my queries satisfactorily, but also clearly displays an approach that is ineffectual when it comes to, what I consider to be, one of the most important issues in the financial sector today; namely adequate professional indemnity insurance. This type of insurance cover for financial advisers, that should effectively protect investors, has been ineffectual in the past and will continue to be inadequate if nothing is done to rectify the situation. Quite frankly, the recent changes in the regulations in this regard simply do not go far enough! 

With respect, this “head in the sand” approach to professional indemnity insurance by this Government as well as ASIC just begs for “more of the same” because it fails to address the real issue – namely professional indemnity insurance cover that fully protects investors’ rights. You can only have an effective PI insurance cover if it contains a “run-off” clause.

The argument that PI insurance is a protection afforded to the party taking it out rather than to a third party doesn’t wash! Investors need to know that sufficient assets/funds are available if any financial adviser they employ transgresses. Effective and adequate PI insurance offers them that assurance.

Following the collapse of Storm Financial, we, the Storm investors, had to wait more than a year before we could ascertain the name of Storm’s insurers, who were AIG, because ‘Worrells’ (the appointed liquidator) would not release such to us. Then, I found that when I lodged a claim with AIG for our losses due to “misleading and deceptive conduct” by Storm, our claim was repudiated because Storm did not have a “run-off” insurance cover thus restricting the lodging of claims to the period covered by the insurance policy. 

Professional indemnity policies such as that taken out by Storm are triggered by claims made against the insured (in this case Storm) during the policy period. In other words, coverage is triggered by a claim being made during the policy period, rather than the conduct giving rise to the claim occurring during the policy period. Herein lies the problem!

AIG did provide”claims made" professional indemnity insurance to Storm for the period 21 November 2007 to 10 December 2008. For any claim made by us to be acceptable, two things would need to have occurred during the period of the 07/08 policy to trigger indemnity under that policy: 

(1)	We would have had to make a claim for damages against Storm during the 07/08 policy (We were not in a position to do so until late 2009) or 
(2)	Storm would have had to have notified facts or circumstances (that might give rise to our claim) to AIG during the 07/08 policy period.

Because the 07/08 policy did not contain a “deeming clause” it effectively restricted us from pursuing our claim under this policy. We have been told that even if Storm had been aware of our claim (which it wasn’t) during the 07/08 policy, it would not have been enough because our claim needed to be lodged within the life of that particular cover. 

Storm’s PI insurance was an industry standard rather than an exception. I wonder how many people truly understand their position in relation to financial advisers’ professional indemnity insurance when seeking financial advice. None, I would think! If they did, I doubt that many would entrust their financial well-being to professionals that do not have adequate PI insurance? What’s the use of having PI insurance if claims cannot be made against it through being time barred? To allow such a situation to continue unabated is tantamount to lunacy. But then there’s been quite a bit of that lately where politics is concerned.

There is no question in my mind that the PI insurance taken out by Storm Financial and many other financial advisory individuals/firms for that matter, does not comply with Section 912B of the Corporations Act because such policies by their very nature do not have the capacity to compensate retail clients because of time restrictions. I therefore put it to you that this Government and ASIC failed in their duties and responsibilities to Storm’s investors (and continues to fail others as well) with regard to PI insurance because Section 912B of the Corporations Act could not, and still cannot be fulfilled in the majority of cases.

In ASIC’s letter 13/2/2012, it quotes part of the ACT: 

“Section 912B(1) states that a financial services licensee that provides a financial service to retail clients must have arrangements for compensating those persons for loss or damage suffered because of breaches of their obligations under the Act by the licensee or its representatives. The arrangements must meet the requirements under subsection 2. 

Subsection 2 states that the arrangements must: 

(a) if the regulations specify requirements that are applicable to all arrangements, or to arrangements of that kind - satisfy those requirements; OR 

(b) be approved by ASIC.” 

ASIC then go on to say, “So, in essence section 912B allows a licensee a choice about which arrangements to implement.”

Yes! I agree that Section 912B allows a licensee a choice about which arrangements to implement but it doesn’t mitigate this Government or ASIC’s obligation under the Act; namely to ensure “that a financial services licensee that provides a financial service to retail clients must have arrangements for compensating those persons for loss or damage…”

The wording in this Section is specific and unequivocal. How, therefore, can this obligation be met if the insurance cover is both inadequate and ineffective as was the case with Storm Financial’s indemnity insurance? How can ASIC now turn around now and state, “So, in essence section 912B allows a licensee a choice about which arrangements to implement.” What does that have to do with anything? For that matter, what good are having arrangements in place if those arrangements DO NOT “compensate persons for loss or damage” because the policy does not contain a “deemng clause”?

Is the Corporation Act an instrument that ASIC and this Government can interpret as they see fit or does it have some substance in Law? 

[Continued in Part 2]


----------



## Frank Ainslie (22 February 2012)

Part 2 of my letter to Chris Bowen regarding PI insurance and ASIC's responsibilities under Section 912B of the Corporations Act for administering such.

(Continued...)

On ASIC’s website it states: 

“We deliver a wide range of compliance programs aimed at ensuring companies, schemes and various individuals and entities meet their obligations under the Corporations Act 2001 (Cth) (Corporations Act).” 

If Storm Financial did not have the means to compensate persons for loss or damage as stated in Section 912B, whose fault was that? Wasn’t it ASIC’s duty under the ACT to ensure that such means were in place? I think so! After all, what are compliance audits for if not to ensure that Storm was meeting its obligations under the Corporations Act? Storm’s directors thought that they were meeting their obligations in relation to professional indemnity insurance because ASIC didn’t tell them otherwise. ASIC assumed that Storm was meeting its commitments in this regard because no one thought to ask whether the professional indemnity insurance policy Storm had taken out would serve to compensate Storm’s clients for loss or damage in any circumstances if the need arose. 

Emmanuel and Julie Cassimatis, the founders of Storm Financial, have stated that ASIC officials ''visited Storm's premises and conducted reviews and audits on numerous occasions from 1993 to 2008'' without raising concerns. This indicates that compliance audits were taking place at regular intervals. What excuses do ASIC therefore have for not ensuring that investors’ interests were being protected not only with respect to PI insurance but overall?

In ASIC’s letter 13/2/2012 it states, “The arrangements that have been set in place by regulations are that licensees that provide financial services to retail clients must hold professional indemnity (PI) insurance cover that is adequate. Adequacy is measured with regard to factors such as the size of the licensee's business (reg 7.6.02AAA).” 

How can ASIC possibly argue that Storm’s PI insurance cover was adequate? Storm had an insurance cover for some $25 to $45 million dollars (the true figure has yet to be ascertained) and yet Storm Financial was handling portfolios worth hundred of millions of dollars. How does ASIC explain that away under reg 7.6.02AAA? With great difficulty, I would imagine!

Whilst on this subject, when was the last time ASIC measured Storm’s business or for that matter, was it ever measured? Quite frankly, to me, and I am sure, many like me, this is a completely unacceptable answer from a Government Body that has been created to safeguard consumers’ interests.

I put it to you that ASIC DOES HAVE a responsibility under Section 912B(1) “to ensure that financial services licensees that provide a financial service to retail clients do have arrangements in place for compensating those persons for loss or damage suffered because of breaches of their obligations under the Act by the licensee or its representatives.” 

The wording is precise in this regard. Certainly there have been breaches by Storm of their obligations under the Act so this condition is met!  

I also put it to you that subsection 2 does not (as ASIC claim) in any way diminish ASIC’s responsibility under Section 912B because it deals with the “arrangements” rather than the “obligation”. The choice regarding any arrangements should have no affect on the obligation, which is that “licensees that provide financial services to retail clients must hold professional indemnity (PI) insurance cover that is adequate.”  

For this Section to be interpreted in any other way would make investors’ positions with regard to their rights to compensation untenable and the wording of the Act misleading.

We, Helen and I, have a clear case for ”misrepresentation” against Storm because our signatures on the SOA agreement were obtained by deceit. Yet, we cannot sue Storm because it is now defunct and we cannot claim against Storm’s PI insurance because the policy time bars us from doing so. Whilst we now have claims against the Banks that we contracted with whilst with Storm, this is our only recourse other than lodging a claim against ASIC for failing in its duty of care towards us. Bearing in mind the circumstances, can you explain why ASIC and this Government should not be considered liable for our losses because the “buck” must ultimately stop somewhere? ASIC’s compliance procedures were grossly inadequate and this Government and past Governments’ regulatory laws were likewise. How else can you and your colleagues explain away this financial fiasco? 

It seems incredible to me that despite what has occurred, this Government still cannot get it right even today. Let’s take PI insurance as a prime example:

The first thing to consider, and it should be an object lesson for all, is that when a scenario such as Storm Financial occurs, it is impossible for claimants to lodge claims until wrong doings are identified which makes a nonsense of PI insurance such as that held by Storm. Not making it compulsory still for financial advisers to hold “run-off” insurance leaves a glaring hole through which more investors will continue to fall like those before them.  Further, it brings into question the value of PI insurance in its current form as an effective security device for anyone that is seeking to invest using financial advisers when so doing. This loophole has not been addressed under the new regulations, which means that lessons still have not been learnt. 

ASIC’s letter 17/3/2011 states, “Regulatory Guide 210 (RG 210 Compensation and insurance arrangements for credit licensees) and Regulatory Guide 126 (RG 126 Compensation and insurance arrangements for Australian Financial Services licensees) address how ASIC proposes to administer the law in relation to adequate insurance cover for both types of licensees. In setting our policy on PI insurance, we need to take into account the coverage available in the insurance market.”

Why does ASIC need to take into account the coverage available in the market place? By so doing ASIC and this Government are allowing outside forces to dictate policy rather than the other way around. To my mind, there are two clear choices:

(1)	make it mandatory for all professional indemnity insurance covers taken out by financial advisers to have a “run-off” clause with an extended claim period, and if this isn’t feasible; 
(2)	provide Federal or State Government insurance as an alternative. 

If insurance companies are not prepared to issue sufficient or effective PI insurance to fully cover those in the financial advisory industry, and by so doing also provide safe guards for those investors using financial advisers, then its up to this Government to offer investors a viable alternative as I have suggested above. By so doing you will:

(a)	restore investor confidence;
(b)	provide the means whereby claims can be settled quickly;
(c)	create additional revenue for the Government coffers.
(d)	avoid financial debacles such as ‘Storm’ where the investors lost everything;
(e)	reduce the need for litigation with its subsequent costs;
(f)	give investors certainty when using financial advisers;
(g)	weed out those financial advisers who do not have sound infrastructures. 

Some will argue that this will just be a further impost on an industry already weighed down with enough restrictions and regulations. I disagree because I believe the benefits of so doing, which I have stated above, far outweigh any downside.  

Whatever, only by taking the necessary steps to change the current situation with regard to professional indemnity insurance will this Government restore investor confidence and encourage future growth in the investment market. What’s more, it will reassure investors that this Government finally means business!

I will end on this note. We that lost money by investing on the advice of Storm Financial are sick and tired of the excuses that have been trundled out since then by the Banks involved, ASIC and this Government. The financial sector has been operating for hundred of years in this country, and yet those in high places still can’t get it right. We (75% of Storm victims are elderly) have had to sit around for three years waiting for compensation whilst many of the wrongdoers blithely carry on operating their trade. What’s more some of us are now having to pay private solicitors to get the job done because ASIC has been dragging its heels since this all began. At times it seems to me that it not so much that the problems in the financial sector cannot be rectified, but rather that it suits those that hold the balance of power to keep the ‘status quo’ intact because it works to the advantage of powerful financial institutions. 

For goodness sake, for the benefit of those that follow in our footsteps, I am asking your Office now to fix these problems even if it’s only with regard to “professional indemnity insurance” before thousands of others go down the same path as us. 

And while you are at it, I suggest that you arrange for a Corporations Law expert to interpret Section 912B of the Corporations Act so that some clarity can be given to its meaning, and a clear definition of ASIC’s responsibilities when administering such be so established.

Yours respectfully,


VICTOR (Frank) AINSLIE


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## Garpal Gumnut (22 February 2012)

There appears to be independent support for Storm Financial in following procedures existing at the time of the Storm debacle.

This, from 

https://theconversation.edu.au/financial-advice-reform-have-we-learned-enough-from-storm-5299

A blog associated with Melbourne University



> When financial planning firm Storm Financial collapsed with $3 billion in investment losses, many of its investors were left destitute. A parliamentary joint committee inquiry into the company’s demise was conducted in response and, in 2010, then Financial Services Minister Chris Bowen announced a series of sweeping reforms aimed at giving greater protection to retail investors.
> 
> The Future of Financial Advice (FOFA) reforms are due to come into force on July 1, 2012. The proposals are intended to minimise conflicts of interest and restore confidence in the financial advisory sector. The proposals include: a ban on commissions and rebates on a prospective basis; a requirement for clients to opt in for advice every two years; a duty for financial advisers to act in their client’s best interests; a ban on percentage-based fees on geared products and portfolios; allowing superannuation funds to provide simple intra-fund advice at minimal or no cost to members; and further powers for the Australian Securities and Investments Commission (ASIC) to act against unscrupulous advisers.
> 
> The fundamental purpose of the proposals is to prevent consumers from suffering investment loss arising from inappropriate advice. The most devastating example is attributed to Storm, where about 4000 clients suffered losses estimated to be $3 billion. The advice was based around “double gearing” – by borrowing against the client’s house and then using margin lending to invest heavily in the sharemarket. The undoing of this strategy was the global financial crisis when share values fell heavily and the lenders called in loans – both against the shares and against the client’s house. Yet Storm had complied with procedural requirements of the law at the time. The model used by Storm could exist in the future for some clients, except for a modification to the remuneration method.




This assessment seems to state that Storm and the Storm principals complied with procedural requirements at the time, and that the investors were badly served by legal statute at the time.

New rules however may not prevent future investors from suffering similar loss, in similar circumstances, the article states.

gg


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## jjtebj12 (23 February 2012)

Assumptions:

You assume I was greedy for investing in Storm.
You assume I didn't do any investigations.
You assume I wanted a quick get rich scheme.
You assume the banks did no wrong.

I had two Bank Managers and my Accountant meet with Storm representatives and go through the same process that I went through.  Then the Bank did there due diligence and said it was a good investment. That Bank has since settled my case. Why because they gave advice based on my assets.


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## Frank Ainslie (23 February 2012)

jjtebj12 said:


> Assumptions:
> 
> You assume I was greedy for investing in Storm.
> You assume I didn't do any investigations.
> ...




Hi jjtebj12!

Some of the self-appointed experts on this forum have labelled those that invested in Storm stupid and gullible. Yet, it seems,  Bank Managers, Accountants, and ASIC among others gave Storm’s model a tick of approval? Shouldn’t they too have had more sense? In fact, with their backgrounds in finance, if Storm’s scheme was that obvious, they would have been the first ones to spot it, one would think! 

The truth of the matter is that if these professionals couldn’t see through it, how could ordinary investors be expected to do so? People on this forum that claim otherwise should wake up to themselves! Storm was one of the biggest financial advisory firms in the country. It's not what Storm offered that is in question. It's what Storm actually did with our money and its motivation for doing so that is central to everything.


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## SJG1974 (23 February 2012)

jjtebj12 said:


> Assumptions:
> 
> You assume I was greedy for investing in Storm.
> You assume I didn't do any investigations.
> You assume I wanted a quick get rich scheme.




Assumptions:

YOU assume that people assume the above about you.

Noone has assumed any of these things about YOU. And I am pretty sure that noone has assumed the banks did no wrong.

However, given some of the posts from certain Storm victims on this forum, it is hard to come to any other assumption about some Stormers then those above.  Which leads me to good old Frank…



Frank Ainslie said:


> The truth of the matter is that if these professionals couldn’t see through it, how could ordinary investors be expected to do so? People on this forum that claim otherwise should wake up to themselves!




And yet of every 4 people who went to Storm and learnt about this you beaut strategy of gearing to the gills and plonking it in shares, 3 walked away and took their life savings with them.

If it was so darn difficult to see through the strategy that Storm sold you, then how come you were in the minority when it came to people who went with them?  Perhaps it is time you woke up to yourself Frank and understand the role you played in your own demise.


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## Frank Ainslie (23 February 2012)

SJG1974 said:


> Assumptions:
> 
> YOU assume that people assume the above about you.
> 
> ...




You really are incredible! What a foolish statement to make, _"...how come you were in the minority when it came to people who went with them?"  _ I think you are the one that needs to wake up to himself.

Here we have one of the biggest, if not the biggest investors losses in Australian history and  you now claim that I and others were in the minority! Thousands of investors used the services of Storm and you are now trying to tell us that we were still a _"minority"_ even though $3 billion dollars and counting is the estimated cost and countless people have lost everything. 

A minority indeed! Goodness me! Where are you coming from? Any credibility you may have had as a poster on this forum has long gone because you are now starting to insult people's intelligence. 

If you want to snipe, at least stick with the facts instead of perverting them as you are prone to do at every opportunity. And try and give some thought to what you are saying because you are starting to sound damn silly!


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## SJG1974 (23 February 2012)

Frank Ainslie said:


> You really are incredible! What a foolish statement to make, _"...how come you were in the minority when it came to people who went with them?"  _ I think you are the one that needs to wake up to himself.
> 
> Here we have one of the biggest, if not the biggest investors losses in Australian history and  you now claim that I and others were in the minority! Thousands of investors used the services of Storm and you are now trying to tell us that we were still a _"minority"_ even though $3 billion dollars and counting is the estimated cost and countless people have lost everything.
> 
> ...




Nice one Frank.

I must admit I thought you would understand what the word minority means.  My bad.  Just to clarify from an online dictionary “*mi.nor.i.ty: The smaller in number of two groups forming a whole*”.

The last time I looked, if you had a group of people where 75% did one thing, and 25% did the opposite, then the 25% were in the minority.  And you, being amongst the 25% of people who went with Storm, compared to the 75% who didn’t are, Frank old chap, in the minority.  But that isn’t really the point is it….yet again you have glossed over the real issue and attempted one of your diversion tactics. And the issue is that you claim no one could have seen through the Storm strategy and uncovered the risks involved, that this whole mess could have happened to anyone.  Well, no it couldn’t and no it didn’t Frank.  The 75% who make up the majority (hopefully I don’t need to define what that means Frank) are living proof of that.

Its funny, but you have made so many outlandish statements on this forum, and yet whenever anyone has pulled you up and questioned you about any of this, you can’t back them up and completely ignore them, or divert which you have attempted to do here. 

And as for insulting people’s intelligence, you have done enough of that for all of us Frank. Repeatedly. 

I mean really, do you expect us to believe that a man:

•	With your self professed experience in business;
•	With your self professed level of intellect;
•	With well over $1m in unencumbered assets;
•	Who wanted just $45,000 per annum to live on (i.e. less than 5% per annum);
•	Who had experience with debt;
•	Who knew the risks with shares; and
•	Who saw the Storm website and the claims that they will put you in touch with the strategies that have been the domain of the rich, as well as their intention to provide you with the money to do the types of things you have dreamt of

paid hundreds of thousands of dollars to Storm, DOUBLE GEARED INTO THE SHAREMARKET and thought that this was a conservative strategy, with the sole expected outcome to preserve the capital he already had?

How outlandish is that?  Sit back and look at that for a minute and tell me how anyone in the right mind would believe that?  It reads more like a plot for one of your fantasy books.  And I am the one insulting people’s intelligence Frank?

Dear lord man….wake up to yourself!


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## Solly (23 February 2012)

SJG1974
What exactly has Frank done that is wrongful?'
My understanding is that he has not been served.
S


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## jjtebj12 (23 February 2012)

Why are some people on this forum so concerned if the Banks are at fault. The banks are wrong, thats why they are trying to settle. Banks never settle or admit their wrong doings. The banks thought this had gone away with Slater & Gordan deal. Never did they think it would come to this.


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## Judd (23 February 2012)

Good point, Solly, although I get the gist of SJG1974's remarks.

If I were Frank I'd be pretty annoyed as well.  Just look what happened to this unfortunate couple who went with Storm.

http://www.couriermail.com.au/busin...ried-court-hears/story-e6freqmx-1225790630201



> A BANK of Queensland franchisee in Townsville loaned money to Storm Financial clients without checking data provided by Storm, a Federal Court in Brisbane was told yesterday.
> 
> The bank's failure to verify "client profiles" meant that a retired Brisbane couple was able to borrow $344,000 against their home in July 2007 to invest even though they had less than $15,000 available cash at the time.
> 
> ...


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## SJG1974 (23 February 2012)

Solly said:


> SJG1974
> What exactly has Frank done that is wrongful?'
> My understanding is that he has not been served.
> S




Nothing illegal as far as I can tell Solly, hence no need to be served.  I am sure this has been covered previously.  But wrong?  Depends on what you consider wrong I guess.

Is comparing his plight to that of a rape victim wrong?
Is calling a poster a redneck wrong?
Is making grand claims that cant be supported by evidence wrong?
Is being less than truthful wrong?

Frank has a habit of making grandiose claims and statements and then when challenged about them, either ignores them or deflects.  He has contradicted himself time and again.  He has publicly questioned the motives of the banks, Storm, ASIC etc. etc. but when questioned about his motives, he shies away from answering. He shies away from responsibility.

He claimed early on that he would like to educate people so they don't fall into the trap he did, yet he refuses to admit to the mistakes he made, the mistakes he can help others avoid.  Digging into what the banks did behind the scenes won't help the next naive retiree who walks into a financial planning office.

He has claimed to not have understood the risks, yet in other posts has shown that he knew there were risks, but for want of a better word, he took the gamble.  And he is unable or not prepared to tell us why.

I have no doubt that there were Storm victims who had no idea what they were geting into.  Frank has shown that he does not fit into this category, despite trying to make us believe he does.

What Frank's postings tell me is that he had an understanding of some of the risks involved, rolled the dice, lost, and is now claiming that everyone else is to blame for the risks he took....and playing dumb claiming he thought it was conservative and he had no idea what he was doing.  Bollocks.

And of course, Frank has denied any responsibility for the actions he took himself, as if he had no choice other than to double gear into shares. Frank took a risk, he knew there were risks, he lost, and he is passing 100% of the blame to third parties.  Is that wrong?  I think you know my opinion on that quite clearly by now Solly.


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## Solly (23 February 2012)

SJG1974 said:


> Nothing illegal as far as I can tell Solly, hence no need to be served.  I am sure this has been covered previously.  But wrong?  Depends on what you consider wrong I guess.
> 
> Is comparing his plight to that of a rape victim wrong?
> Is calling a poster a redneck wrong?
> ...




Thanks SJG1974 for your reply and stating your belief that Frank has not done anything wrongful. I have had some difficulty understanding your position on this matter from the content of your posts.

As you may or may not be aware my colleagues and I keep a close eye on the court lists and we have never noticed Frank being mentioned. 

S


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## Garpal Gumnut (23 February 2012)

jjtebj12 said:


> Why are some people on this forum so concerned if the Banks are at fault. The banks are wrong, thats why they are trying to settle. Banks never settle or admit their wrong doings. The banks thought this had gone away with Slater & Gordan deal. Never did they think it would come to this.




jjtebj12, I think there are two reasons some people on ASF are concerned re the banks being involved in wrongdoing.

1.  They may genuinely believe that it was all Storm Financial and/or the investors fault.

and/or

2.  They may have shares in the banks involved, and may be concerned that the price will fall if a payout is needed.

As with all arguments on ASF it comes down to pure motives and/or greed.

gg


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## maccka (23 February 2012)

Garpal Gumnut said:


> jjtebj12, I think there are two reasons some people on ASF are concerned re the banks being involved in wrongdoing.
> 
> 1.  They may genuinely believe that it was all Storm Financial and/or the investors fault.
> 
> ...




Hi GG,

You raise a very interesting point here.  How much effect could a payout have on share prices?  How would it be measured?  Obviously there may be an immediate drop in price but what could long term costs be to the company?  Also, what does a drop (or vice versa a rise) in a share price actually mean in real terms (not just paper money) to the cash flow or liquidity of a company? Does it mean anything or is it just virtual with no real effect?

Cheers Maccka


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## Harleyquin (23 February 2012)

Bunyip there are lots of assumptions on ASF.  You're assuming that Doobsy thought carefully about his opinions and other posters haven't.  The truth is you, I and anyone else on this forum,  have no way of knowing this for sure.

Sig you assume many things 1 that 3 out of 4 walked away from storm.  You don't know that for sure and you don't know why they walked away.  Those figures have been bandied around but where is the hard proof?  Do you think everyone who walked away understood it was a risky investment?  Do you know the figures for those who walk away from all financial planners.

Too many assume that ALL stormies had dollar signs in their eyes. We all want financial security and some of us want help achieving financial security.  The government encourages us all to take responsibility for our finances.

There are a lot of people out there who spend all they earn on their own enjoyment knowing that in old age that the government will look after them.  They are not getting accused of being greedy and yet Stormies who asked for financial investment advice from the experts so that they would never become a burden on the government are the greedy ones.

ASIC, accountants and many others thought this investment strategy was ok so how could the ordinary man in the street know any different.  The old 'do your own research' is a copout.  We all have our strengths and weaknesses.

As Albert Einstein is credited with saying "Everybody is a genius, but if you judge a fish by it's ability to climb a tree, it will live it's whole life believing that it is stupid".


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## maccka (23 February 2012)

SJG1974 said:


> Nice one Frank.
> 
> I must admit I thought you would understand what the word minority means.  My bad.  Just to clarify from an online dictionary “*mi.nor.i.ty: The smaller in number of two groups forming a whole*”.
> 
> The last time I looked, if you had a group of people where 75% did one thing, and 25% did the opposite, then the 25% were in the minority.  And you, being amongst the 25% of people who went with Storm, compared to the 75% who didn’t are, Frank old chap, in the minority.




Solly,  

next time you are in Brisvegas or lunching with ppl with legal connections could you find out how far the minority vilification laws extend please?  

I'd appreciate that.  Thanks ol' chap! 

Cheers
Maccka


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## Harleyquin (23 February 2012)

GG have just read your post.  Well done.  You've hit the nail well and truly on the head.  

I know stormies who still have bank shares.  In fact I mentioned someone not so long back who said that their bank shares were doing well and she was a stormie.


----------



## Garpal Gumnut (23 February 2012)

maccka said:


> Hi GG,
> 
> You raise a very interesting point here.  How much effect could a payout have on share prices?  How would it be measured?  Obviously there may be an immediate drop in price but what could long term costs be to the company?  Also, what does a drop (or vice versa a rise) in a share price actually mean in real terms (not just paper money) to the cash flow or liquidity of a company? Does it mean anything or is it just virtual with no real effect?
> 
> Cheers Maccka






Harleyquin said:


> GG have just read your post.  Well done.  You've hit the nail well and truly on the head.
> 
> I know stormies who still have bank shares.  In fact I mentioned someone not so long back who said that their bank shares were doing well and she was a stormie.




Thanks maccka and HQ,

I just follow the charts and am not a fundamental follower of stocks. I would imagine that any "hit" has been factored in to the share price by the institutions, unless there is a sudden event, e.g. a massive win for Storm investors.

Your points are interesting and valid, but I cannot answer your queries, and would be interested to hear from other posters on the effect on the stock price of CBA, MQG or BOQ of adverse findings.

I am in and out of CBA as a chartist, and must admit have shied away from BOQ because of a possible hit on it's price.

CBA would be able to weather it I feel better than the other two, depending on their exposure. Then this is not my field of expertise.

gg


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## maccka (23 February 2012)

Harleyquin said:


> Bunyip there are lots of assumptions on ASF.  You're assuming that Doobsy thought carefully about his opinions and other posters haven't.  The truth is you, I and anyone else on this forum,  have no way of knowing this for sure.
> 
> Sig you assume many things 1 that 3 out of 4 walked away from storm.  You don't know that for sure and you don't know why they walked away.  Those figures have been bandied around but where is the hard proof?  Do you think everyone who walked away understood it was a risky investment?  Do you know the figures for those who walk away from all financial planners.
> 
> ...




I LOVE that quote Harlyquin!  :1luvu: It seems so apt here.  I can even think of the perfect picture to go with it!  I will go to sleep tonight happy in the thought that Albert Einstein's (alleged) wisdom has made it into the ASF forum. 

As for the rest of your post I agree.  My understanding talking to a local SF advisor was that the 75% figure also included other people who were on the books for insurance or simpler financial advice as well as people who came, listened and walked away.  Without having the hard evidence and primary source information in front of us the figure means nothing.

Cheers
Maccka


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## Solly (23 February 2012)

maccka said:


> Hi GG,
> 
> You raise a very interesting point here.  How much effect could a payout have on share prices?  How would it be measured?  Obviously there may be an immediate drop in price but what could long term costs be to the company?  Also, what does a drop (or vice versa a rise) in a share price actually mean in real terms (not just paper money) to the cash flow or liquidity of a company? Does it mean anything or is it just virtual with no real effect?
> 
> Cheers Maccka




Maccka 

Let's just say I believe it would be a bee sting. Here's some APRA banking stats as of Dec 11.


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## Julia (23 February 2012)

maccka said:


> I never once heard Cassimatis or any of the advisors tell me that he/they/Storm could make me a lot money without me having to think or work for it.






Julia said:


> So could you perhaps explain what clients were paying 7% commission for if it was not to hand over their funds in order to have Storm make money for them?



Maccka, perhaps you missed my question to you several days ago as above?
I'd very much appreciate a response.




Harleyquin said:


> I know stormies who still have bank shares.  In fact I mentioned someone not so long back who said that their bank shares were doing well and she was a stormie.



You also said at the time that you had no idea whether or not you could believe her.
The fact that someone holds shares in any company is not necessarily a testimony to the success of that company or its share price.


----------



## maccka (23 February 2012)

Julia said:


> Maccka, perhaps you missed my question to you several days ago as above?
> I'd very much appreciate a response.




Hi Julia,

I certainly didn't miss your question.  I just chose not to answer it.  I had hoped that you might be careful enough to go back and read what I ACTUALLY wrote rather than what you read in your mind. I knew that you probably wouldn't appreciate a post that pointed out (again) that you didn't read my post carefully enough to read the whole meaning as it was written.  Couldn't see any point in stirring up trouble on such a volatile forum.



Julia said:


> You also said at the time that you had no idea whether or not you could believe her.
> The fact that someone holds shares in any company is not necessarily a testimony to the success of that company or its share price.




I have enormous respect for HQ so I absolutely do believe what she says.  However I am not sure that is what you are trying to communicate with me.  Is it possible that you've made a mistake in your quoting or perhaps left some important words out of your message to me?  Or were you trying to also write a message to HQ in the same post?

Cheers
Maccka


----------



## Solly (23 February 2012)

maccka said:


> Solly,
> 
> next time you are in Brisvegas or lunching with ppl with legal connections could you find out how far the minority vilification laws extend please?
> 
> ...




Maccka

On my next excursion to George St, I might just do that. In my experience, I have found it to be fraught with danger to quote before the bench definitions from on-line dictionaries. Also I have a strange feeling you may now know who my associates are by observing my twitter time line. 

S


----------



## Julia (23 February 2012)

maccka said:


> Hi Julia,
> 
> I certainly didn't miss your question.  I just chose not to answer it.



OK.  That's your right.  Pity, though.  One would hope there would be a substantial reason for paying 7% commission.





> I have enormous respect for HQ so I absolutely do believe what she says.  However I am not sure that is what you are trying to communicate with me.  Is it possible that you've made a mistake in your quoting or perhaps left some important words out of your message to me?  Or were you trying to also write a message to HQ in the same post?



If you look again at the post you will see above my response to HQ the format makes clear that the remarks to which I am replying were from HQ.  For our convenience, ASF has the neat facility of the "multiquote" button which allows us to respond to various posters at one time.  Hope this helps.


----------



## SJG1974 (24 February 2012)

Solly said:


> Thanks SJG1974 for your reply and stating your belief that Frank has not done anything wrongful. I have had some difficulty understanding your position on this matter from the content of your posts.
> 
> As you may or may not be aware my colleagues and I keep a close eye on the court lists and we have never noticed Frank being mentioned.
> 
> S




Not a problem Solly.  Always happy to clarify my position.

And I have stated several times that I am not putting Frank or any Storm victim "on the stand" as it were.

And I am not bracketing all storm clients as greedy, money hungry morons.  I am sure that some of the 4,000 clients probably were, but again, how would we know?  And I am certainly not saying that the banks are an innocent party in all this....far from it. But it would be nice to have some balance around here.

Simply put, there is more to this whole saga than what the banks did and didn't do. Much more.  There are more factors behind why people lost so much money in this mess than simply what the banks did and didn't do.  However, it seems that those posters who were with Storm have chosen to focus purely on this aspect.  

Some are happy to accuse the banks of wrongdoing, of the banks and storm for telling fibs, to did and dig to find the "truth".  Yet when other aspects are raised, such as the why they invested in the first place, or when they are challenged to back up and explain statements they have made, they clam up.

They are happy to discredit statements made by say Ralph Norris that he didn't undrstand what was going on, or a statement by Manny Cassimatis that they ensured Stormers were fully educated before they took them on as clients, or the statement that 3 in 4 people walked away, yet we are all expected to blindly believe them when they themselves say they did not have any idea of the risks involved.  Again, when people like Frank claim one thing and then contradict themselves a few posts later, it makes me question whether they know more than they are letting on....particularly when they are unwilling to answer questions about their motives.

I guess because Storm and the banks are the bad guys, we are free to discredit them and what they say, yet because the victims are innocent, we are expected to believe everything they say, despite there being no way to verify it, other than to ask them to explain further, which in most cases they don't do.

Questions have been asked and Stormers have not been able or prepared to answer them.  I cant imagine the hurt of what they are going through, and I genuinely feel sorry for them.  This whole mess should not have happened.  But it did, like so many other messes before and in the future.  But again, this forum is not a Storm support group, it is a place where we can look at all the issues...and at the moment the focus is mainly on one thing and one thing only....the banks. Focussing on the banks wont help prevent the next gullible 65 year old when he walks into a financial planners office, focussing on what that 65 year old should and shouldn't do will provide a better lesson.

Anyway, i trust that has clarified things.  

On a separate issue, Solly with your legal knowledge, perhaps you can answer this:

If the UMIS case gets up, who pays the compensation?  I am guessing that Storm and the CBA would be jointly to blame, yet Storm no longer exists, so is unable to pay damages.  So would the CBA have to stump up Storm's half, or only their own, which would mean that clients would only receive half of what they are entitled to?


----------



## Solly (24 February 2012)

SJG1974 said:


> Not a problem Solly.  Always happy to clarify my position.
> 
> And I have stated several times that I am not putting Frank or any Storm victim "on the stand" as it were.
> 
> ...




Thanks SJG1974,

You have clarified your position to me. I don't hold a view on the apportioning of blame if guilt is determined, that is a matter for the courts.

S


----------



## bunyip (24 February 2012)

jjtebj12 said:


> Assumptions:
> 
> You assume I was greedy for investing in Storm.
> You assume I didn't do any investigations.
> ...





Wrong.....I made none of those assumptions about you or the banks.


----------



## bunyip (24 February 2012)

Frank Ainslie said:


> Hi jjtebj12!
> 
> Some of the self-appointed experts on this forum have labelled those that invested in Storm stupid and gullible. Yet, it seems,  Bank Managers, Accountants, and ASIC among others gave Storm’s model a tick of approval? Shouldn’t they too have had more sense? In fact, with their backgrounds in finance, if Storm’s scheme was that obvious, they would have been the first ones to spot it, one would think!
> 
> The truth of the matter is that if these professionals couldn’t see through it, how could ordinary investors be expected to do so? People on this forum that claim otherwise should wake up to themselves!




Frank

Is that the best you can do – claim that if ASIC and bankers and accountants couldn’t see through it, then nobody could?

You rarely if ever manage to back your profound statements with any sort of solid logic or sound reasoning or common sense. 

After all the years of ASIC’s well publicised incompetence long before Storm came to prominence, I would have thought that a worldly and experienced businessman/investor like yourself would have treated ASIC's views with extreme caution.
As for the opinions of bank managers and accountants - they are primarily lenders and taxation advisors respectively, not investment experts.
Many private investors, like you for example with your shopping center, would have more investment and business acumen by far than the average banker or accountant. 

Of the many thousands of people who approached Storm and looked at their strategy, some signed on, some walked away after judging it too risky. There’s no point in arguing if it was 75% who walked away, or 60% or whatever. The fact is that many thousands of people rejected the Storm strategy as too risky.
Clearly, this fact makes a mockery of your continued assertions that_ ‘this could have happened to anyone,  nobody could have seen through the Storm strategy, even savvy investors couldn’t have avoided being caught, etc. etc.._

If you’re going to continue making such claims, let’s see you back your viewpoint with some solid argument. Tell us exactly why, in your opinion, nobody could have seen the pitfalls and terrible risks in the Storm model. And don't hide behind irrelevant excuses like bankers and accountants and ASIC. Let's see you come up with a reason why you personally couldn't have conducted your own common sense evaluation of Storm's proposal, just as the thousands who rejected Storm clearly did.

In an earlier post I demonstrated to you how just ten seconds of research could have revealed the risks in Storm’s strategy. I backed that statement with historical figures, logic and sound reasoning. 
Let’s see you do the same with your views, Frank – it shouldn’t be too hard if your beliefs are formed from a solid basis of fact.


----------



## Tysonboss1 (24 February 2012)

Frank Ainslie said:


> 1, Some of the self-appointed experts on this forum have labelled those that invested in Storm stupid and gullible. Yet, it seems,  Bank Managers, Accountants, and ASIC among others gave Storm’s model a tick of approval? Shouldn’t they too have had more sense? In fact, with their backgrounds in finance, if Storm’s scheme was that obvious, they would have been the first ones to spot it, one would think!
> 
> 2, The truth of the matter is that if these professionals couldn’t see through it, how could ordinary investors be expected to do so?
> 
> ...




1 ,There is nothing wrong or immoral with gambling, speculating or taking a punt, and it is not the Bank managers, accountants or asic's job to stop you gambling, speculating or taking a punt. any one looking at storms scheme prior to the crash would have known that you had a chance of making some very good returns but also some big losses, Hence why they asked to hold assets as security eg, your house, cash and stock.

If you really want to gamble, then it's the banks job to facilitate that by making sure your holding enough equity to cover themselves and the counter party, it is not thier job to worry about your side. they are assuming you have thought things through and are set up to take the risk.

2, easily, a short bit of reasearch on margin loans and a brief understanding of how stock markets have flucuated over the passed 100 years should have given it away.

3, well it was what they were offering, they were offering a product that would work like a charm for 24 years out of ever 25year period, but wipe out 1 year out of 25. unfortunatly you were invested in that 1 unlucky year.

4, they put it on the roullette table just as you asked them to,


----------



## bunyip (24 February 2012)

Here’s an interesting snippet from the Storm website........

*Despite investors having access to a plethora of live economic and market data, historical records, research tools and market commentaries, we warn that nobody should rely solely on this information for financial decisions. Storm Financial and affiliated companies accept no responsibility for any loss or damages to a person based on decisions they've made as a result of information on our website.*

The way I read this, Storm was dropping a subtle hint that investors should do their own research rather than relying solely on the information that Storm gave them.


----------



## bunyip (24 February 2012)

Tysonboss1 said:


> 1 ,There is nothing wrong or immoral with gambling, speculating or taking a punt, and it is not the Bank managers, accountants or asic's job to stop you gambling, speculating or taking a punt. any one looking at storms scheme prior to the crash would have known that you had a chance of making some very good returns but also some big losses, Hence why they asked to hold assets as security eg, your house, cash and stock.
> 
> If you really want to gamble, then it's the banks job to facilitate that by making sure your holding enough equity to cover themselves and the counter party, it is not thier job to worry about your side. they are assuming you have thought things through and are set up to take the risk.
> 
> ...




Good post Tyson, although it might be a stretch to say the Storm strategy would have worked well in 24 out of 25 years.

But your point is well made – the strategy worked well when the market performed well, but was guaranteed to fail spectacularly once the inevitable bear market set in. In other words it was a gamble that couldn’t work over the longer term.


----------



## bunyip (24 February 2012)

jjtebj12 said:


> Why are some people on this forum so concerned if the Banks are at fault.




Why indeed? And why are these people usually you Stormers? 

Could it be because, although none of you truly believes that the banks are solely responsible for your losses, their deep pockets present the only possible means of you getting some of your money back?!

Most of the non-Stormers who post on here have little interest in the banks. We simply offer the completely reasonable and balanced viewpoint of _'If a court of law finds the banks guilty of any illegality, then they should be penalised.'_


----------



## robz7777 (24 February 2012)

bunyip said:


> Good post Tyson, although it might be a stretch to say the Storm strategy would have worked well in 24 out of 25 years.
> 
> But your point is well made – the strategy worked well when the market performed well, but was guaranteed to fail spectacularly once the inevitable bear market set in. In other words it was a gamble that couldn’t work over the longer term.




I believe I read that when additional equity became available (growth through 2003-07 for example) additional funds were borrowed and put into the market.. It was always going to end badly..


----------



## Harleyquin (24 February 2012)

Julia I am fully aware of what I've posted.  I find your comments somewhat confusing.

As for the 7% upfront, it was just that upfront, unlike other planners who charge on an annual fee.  We, like many others, thought that over time that those up front fees would pay for themselves.  If we were wrong then we were wrong end of story Jula. What is your point in continually rehashing this point?

If you're worried about the future performance of your bank shares Julia then you, like everyone else have a choice.  

I hope the Aussie banking sector stays strong.  I just want more transparency for all financial institutions.


----------



## Harleyquin (24 February 2012)

Thanks Maccka agree with you re Albert Einstein's quote.

Let's hope that some of the more left wing posters on this forum 'get it'!!!


----------



## bunyip (24 February 2012)

robz7777 said:


> I believe I read that when additional equity became available (growth through 2003-07 for example) additional funds were borrowed and put into the market.. It was always going to end badly..





Which is much the same situation as someone having a win on the horses and then putting those winnings on the next race. And if he has a second win he once again puts his winnings on the next race. 
Sooner or later he loses everything.


----------



## bunyip (24 February 2012)

jjtebj12 said:


> I had two Bank Managers and my Accountant meet with Storm representatives and go through the same process that I went through.  Then the Bank did there due diligence and said it was a good investment. That Bank has since settled my case. Why because they gave advice based on my assets.





This bank that told you it was a 'good investment' - I presume this same bank provided your finance?

If so, did it not occur to you that they might have a vested interest in telling you how good the investment was?
Did it not occur to you that such advice could hardly be considered impartial?

Did it not occur to you that asking other people for their opinions was a poor substitute for you doing your own research, such as finding out what the stock market and margin loans were capable of throwing at you?

And did it not occur to you that bankers are lending specialists, and accounts are taxation specialists, but neither of them are investment specialists.

Yes, I know - you went to Storm because you thought they were investment specialists. That was a completely reasonable thing to do in my opinion.
The tragedy is that so many of you Storm clients apparently didn't see the need to conduct independent research before mortgaging homes and committing huge sums of borrowed money to the market.
Or if you did see the need, you appear to have had little idea of how to go about it.


----------



## Harleyquin (24 February 2012)

Bunyip stop being a proverbial pain.  Sounds like you've got a fistful of bank shares you're just a little concerned about too???


----------



## Mindstorm (24 February 2012)

bunyip said:


> Yes, I know - you went to Storm because you thought they were investment specialists. That was a completely reasonable thing to do in my opinion.
> The tragedy is that so many of you Storm clients apparently didn't see the need to conduct independent research before mortgaging homes and committing huge sums of borrowed money to the market.
> Or if you did see the need, you appear to have had little idea of how to go about it.





Bunyip,

This is exactly what I did.

Completely daft in retrospect! Isn't 20/20 hindsight wonderful?

This is not a 'dig' at you Bunyip, you know me better than that 

I do have to agree with some other stormies in that we thought we were dealing with 'people of integrity'.

Not sure how old the posters on this thread are, but in my childhood and early adulthood we saw doctors, bank managers, headmasters/mistresses, and the like as people we could rely on in our communities who we could turn to for 'solid' advice.

I personally believe that this was the downfall of many stormies.

MS


----------



## Solly (24 February 2012)

bunyip said:


> Here’s an interesting snippet from the Storm website........
> 
> *Despite investors having access to a plethora of live economic and market data, historical records, research tools and market commentaries, we warn that nobody should rely solely on this information for financial decisions. Storm Financial and affiliated companies accept no responsibility for any loss or damages to a person based on decisions they've made as a result of information on our website.*
> 
> The way I read this, Storm was dropping a subtle hint that investors should do their own research rather than relying solely on the information that Storm gave them.




bunyip

To me your extrapolation is without merit. The statement is valid. The disclaimer is  specific in relation to the information contained on the website. Happy to discuss further.

S


----------



## Julia (24 February 2012)

Harleyquin said:


> As for the 7% upfront, it was just that upfront, unlike other planners who charge on an annual fee.  We, like many others, thought that over time that those up front fees would pay for themselves.



Fair enough.  I'd never pay for such advice in advance, but can understand why you would have done so.



> If we were wrong then we were wrong end of story Jula. What is your point in continually rehashing this point?



I have no wish to rehash anything.  It has all been done to death imo.  I was simply responding to a post from Maccka.



> If you're worried about the future performance of your bank shares Julia then you, like everyone else have a choice.



Why do you assume I have bank shares?  Or any shares for that matter?
For the record I do not hold any bank shares.  Neither have I held any for more than four years.


----------



## bunyip (24 February 2012)

Mindstorm said:


> Bunyip,
> 
> This is exactly what I did.
> 
> ...




Mindstorm

I’m not trying to rub it into you Stormers, but this forum gives us a golden opportunity to discover the how’s and why’s of the Storm debacle. By discussing these issues we just might be able to steer some future investors away from the mistakes that helped to bring you undone.
We’ve all made mistakes at times, me included. It’s important to recognise these mistakes, learn from them and accept responsibility for them, as I know you do. But there are some on here who flatly refuse to do so.


----------



## bunyip (24 February 2012)

Harleyquin said:


> Bunyip stop being a proverbial pain.  Sounds like you've got a fistful of bank shares you're just a little concerned about too???




Actually yes, I do have a bank share or three. But I’m not at all worried about them. Here’s why...

Any payout from the banks (if there is in fact a payout) will be a drop in the ocean to them in real terms.
The market will over-react, as markets always do, to any perceived bad news regarding the banks. This may cause a dip in the price of some bank shares. But these over-reaction dips are usually short lived, and the price bounces back in short time.
A nimble footed investor sees these dips as an opportunity to buy merchandise at discounted prices.
Maybe I’ll use the situation to my advantage by buying some long dated call options once banks shares have dipped a little, or maybe some CFD’s......... if in fact there *is* a payout ruling against the banks. And there’s no certainty about that at this stage.
I’ll play it by ear, but I reckon there’ll be an opportunity in there somewhere for those who know how to take advantage of it.

Honestly HQ - I think you'll find this will be pretty much small beer for the banks if the ruling goes against them.


----------



## Garpal Gumnut (24 February 2012)

bunyip said:


> Mindstorm
> 
> I’m not trying to rub it into you Stormers, but this forum gives us a golden opportunity to discover the how’s and why’s of the Storm debacle. By discussing these issues we just might be able to steer some future investors away from the mistakes that helped to bring you undone.
> We’ve all made mistakes at times, me included. It’s important to recognise these mistakes, learn from them and accept responsibility for them, as I know you do. But there are some on here who flatly refuse to do so.




I would agree bunyip, it is a valuable opportunity to self examine on forums such as this.

I for one have learnt from a dispassionate self examination of my investing failures on ASF.

Perhaps for the Storm investors it is too recent, or they will never have the capacity to develop any insight, or that as they say they were jejunes in the hands of Storm, the Banks and ASIC.

gg


----------



## Ijustnewit (24 February 2012)

bunyip said:


> Actually yes, I do have a bank share or three. But I’m not at all worried about them. Here’s why...
> 
> Any payout from the banks (if there is in fact a payout) will be a drop in the ocean to them in real terms.
> The market will over-react, as markets always do, to any perceived bad news regarding the banks. This may cause a dip in the price of some bank shares. But these over-reaction dips are usually short lived, and the price bounces back in short time.
> ...




Either that or the amount of shares you own are not worth talking about. Mostly in life you will find the people beating their chest the loudest are the smallest in the jungle.


----------



## Mindstorm (24 February 2012)

bunyip said:


> Mindstorm
> 
> I’m not trying to rub it into you Stormers, but this forum gives us a golden opportunity to discover the how’s and why’s of the Storm debacle. By discussing these issues we just might be able to steer some future investors away from the mistakes that helped to bring you undone.
> We’ve all made mistakes at times, me included. It’s important to recognise these mistakes, learn from them and accept responsibility for them, as I know you do. But there are some on here who flatly refuse to do so.




Bunyip,

I've never felt that you were 'rubbing it in' to me, or to other stormies.  I've confided in you by PM and you have never said anything to me that I didn't need to hear.

I do honestly think that you have tried to understand why we stormies ended up in the place we ended up in.

I have been very grateful for your opinions on my own situation, and I recognise the fact that you're trying to help others to avoid the situations that we stormies have found ourselves in.

MS


----------



## Mindstorm (25 February 2012)

Garpal Gumnut said:


> I would agree bunyip, it is a valuable opportunity to self examine on forums such as this.
> 
> I for one have learnt from a dispassionate self examination of my investing failures on ASF.
> 
> ...




With all due respect GG, I have taken all that Bunyip has said to me, or to others, and also all posts by others, onboard.

I am learning, albeit slowly, just how foolish I was. As I said before... wherever... 20/20 hindsight is a wonderful thing.

Not being sarcastic at all now, but if I had the chance to do it all over again I would be much better educated to do so.

MS


----------



## Harleyquin (25 February 2012)

Bunyip I actually agree with you and I'm sure there will be those out there who will know how to benefit.  I am not knowledgeable enough to know just what went on behind closed doors between storm and the banks, but I do know this much.  This should never have happened.  We should be able to trust these people and not excuse the criminal choices that they made.

When I read Mindstorms post, I thought, that was us exactly.  The other thing that struck me only recently was 'there were two of us with that financial advisor and when I didn't understand something I 'assumed' that my husband did.  I said this to him not so long back and he said the same thing.  So it didn't bother either of us unduly as we thought that between the two of us we understood.  Big mistake...never ASSUME anything.


----------



## bunyip (25 February 2012)

Ijustnewit said:


> Either that or the amount of shares you own are not worth talking about. Mostly in life you will find the people beating their chest the loudest are the smallest in the jungle.




She asked me if I had some shares that I was concerned about. I answered her. No chest beating there that I can see.

Are you ever going to send in a worthwhile post that says something that might actually help investors steer clear of trouble from here on?
Let's hear your version of how Storm victims could have done things differently to avoid getting burnt.
Surely this would be more productive than degrading yourself with one moronic post after another.


----------



## jjtebj12 (25 February 2012)

Well the banks have rolled the dice!! Not even interested in negotiations.  They are already appealing to the High Court. Asic about time you stood up.


----------



## Ijustnewit (25 February 2012)

bunyip said:


> She asked me if I had some shares that I was concerned about. I answered her. No chest beating there that I can see.
> 
> Are you ever going to send in a worthwhile post that says something that might actually help investors steer clear of trouble from here on?
> Let's hear your version of how Storm victims could have done things differently to avoid getting burnt.
> Surely this would be more productive than degrading yourself with one moronic post after another.




Nothing degrading and moronic about my post. You shouldn't call the kettle black. 
Come on lets hear more about your great feats of investment strategies.
Tell us more about how as a twenty something you lost a couple of hundred grand wasn't it ? Allot of money some twenty years ago ,or did you add a couple of zeros to grandoise the story. I promise I won't call you greedy , stupid or you should have used Google and did your own research. Or how you have driven thousands of miles without incident. I think allot of your anger is actually towards yourself and you use this forum to deflect it on to others. A bit like a school yard bully. I feel you love the attention and it helps your ego. 
As far as trying to tell my version of the Storm story it's the same as the others.It's a shame really, as you'll see that very few Stormies will post because of the flak they receive from posters like you. I wouldn't waste my time as you would just come back with some nasty belittling comment and give you more ammo for your little ego.
I would sooner spend my time turning my attention to you and giving the doctor some of his own medicine. It is well known that allot of that anger you seem to be carrying can cause disease and cancer. I hope you eventually find some happiness in your life.


----------



## maccka (25 February 2012)

jjtebj12 said:


> Well the banks have rolled the dice!! Not even interested in negotiations.  They are already appealing to the High Court. Asic about time you stood up.




Hi jjtebj12,

Are you talking about this week's mediations?  Hmmm if it's going to court things are about to get very interesting!

Cheers
Maccka


----------



## Garpal Gumnut (25 February 2012)

Mindstorm said:


> With all due respect GG, I have taken all that Bunyip has said to me, or to others, and also all posts by others, onboard.
> 
> I am learning, albeit slowly, just how foolish I was. As I said before... wherever... 20/20 hindsight is a wonderful thing.
> 
> ...




Thanks Mindstorm,

I have equally learnt much from the posts by Storm investors caught up in this loss of wealth and for many a peaceful retirement.

The dignity displayed in adversity shows the courage of men and women left with often just that dignity, after losing their lifetime savings. Their opinions and experiences are valuable, especially to younger posters.

I would hope that other Storm investors are not dissuaded from giving their opinions in spite of the sometimes robust opinions expressed on ASF.

gg


----------



## Solly (25 February 2012)

maccka said:


> Hi jjtebj12,
> 
> Are you talking about this week's mediations?  Hmmm if it's going to court things are about to get very interesting!
> 
> ...




Maccka
Game on..


----------



## bunyip (25 February 2012)

Ijustnewit said:


> Nothing degrading and moronic about my post. You shouldn't call the kettle black.
> Come on lets hear more about your great feats of investment strategies.
> Tell us more about how as a twenty something you lost a couple of hundred grand wasn't it ? Allot of money some twenty years ago ,or did you add a couple of zeros to grandoise the story. I promise I won't call you greedy , stupid or you should have used Google and did your own research. Or how you have driven thousands of miles without incident. I think allot of your anger is actually towards yourself and you use this forum to deflect it on to others. A bit like a school yard bully. I feel you love the attention and it helps your ego.
> As far as trying to tell my version of the Storm story it's the same as the others.It's a shame really, as you'll see that very few Stormies will post because of the flak they receive from posters like you. I wouldn't waste my time as you would just come back with some nasty belittling comment and give you more ammo for your little ego.
> I would sooner spend my time turning my attention to you and giving the doctor some of his own medicine. It is well known that allot of that anger you seem to be carrying can cause disease and cancer. I hope you eventually find some happiness in your life.




I didn’t say I lost a couple of hundred grand when I was in my twenties. And I didn’t add any zeros either.

It’s unfortunate that your Storm experience has made you angry and bitter against someone whose had some success in his life while you got wiped out by a reckless gamble you could have easily avoided.


----------



## bunyip (25 February 2012)

Mindstorm said:


> Bunyip,
> 
> I've never felt that you were 'rubbing it in' to me, or to other stormies.  I've confided in you by PM and you have never said anything to me that I didn't need to hear.
> 
> ...




Thanks Mindstorm

You’ve shown great character in the way you’ve dealt with adversity. 

All the best – I hope things work out OK for you and your family.


----------



## Frank Ainslie (25 February 2012)

Hi All,

I have learnt more about human nature in the last few years than I ever could have imagined. Reading through the jaundiced views of some on this forum, I am reminded of the words in that song, _‘Good, Bad and Beautiful’_:

_…”I’ve seen a man lift a man when he’s down and put him back on his feet 
I’ve seen a man kick a man when he’s down in a lonely Street…”_

In the first line one could well place Solly for trying to lift his mate up when he’s down and quite a few others who have sought to be objective and understanding  rather than judgemental. In the second line, well it’s not hard to see who the _“kick in the guts” _merchants are on this forum because they are easily identified. 

The world is in a mess today because there are millions of people that hold certain beliefs and want others to believe likewise. They seek to bend other people to their will by getting them to agree with them no matter what.  The truth is sacrificed to their wants.  Accordingly, they will pervert truth, spread half-truths, distort the facts, and distort the evidence. If this doesn’t work, they will seek to denigrate your opinions  because they cannot stand the thought that someone else may have views that conflict with their’s. 

Let’s take _‘Bunyip’_ with the steel cap boots for instance who seems to think that the only rich people that invested in Storm were Helen and I – just the two of us! Everyone else was an unfortunate victim but we had x-ray vision and should have therefore known better. Sure, we were rich in assets but is that a crime?

_“Is that the best you can do – claim that if ASIC and bankers and accountants couldn’t see through it, then nobody could?”_
My furry friend! Are you trying to sink to new levels of puerility? Don’t you yet understand that if professional financial people couldn’t see through Storm’s financial scheme, ordinary people had no chance!  Do I have to spell it out for you again?

_“You rarely if ever manage to back your profound statements with any sort of solid logic or sound reasoning or common sense.” _
I thought I had used solid logic and sound reasoning when presenting our case? I think your problem may lie in your inability to recognise such? 

_“After all the years of ASIC’s well publicised incompetence long before Storm came to prominence, I would have thought that a worldly and experienced businessman/ investor like yourself would have treated ASIC's views with extreme caution."_
I’m not sure what you mean by this? I was under the impression that ASIC was formed to protect consumers although it’s easy to forget this from time to time the way ASIC performs. However, why anyone would treat ASIC with extreme caution is beyond me. ASIC exists! It may not be the most efficient or effective  body around but its all we here in Australia have at the moment. If we can’t trust ASIC who the Hell can we trust?

Now I get it! What you and a few others are basically telling us is that we shouldn’t trust anyone be they ASIC, financial advisers, doctors, accountants, bank managers, insurance companies, or anyone else for that matter that offer professional services based on their *presumed level of expertise* because they might be giving people the wrong advice? Instead, when people are ill, have been wronged in law, want to insure anything, want to put money in a bank, need to have their financials done or whatever, they should instead surf the Internet to reassure themselves  that they are doing the right thing beforehand. In other words, don’t trust anyone that calls himself/herself a professional because one needs to check them out first. And just who do you think on the Internet will be supplying you with this information if not the same people that you are telling us not to trust in the first place? Yes, that's right - professionals in their own field!  Get a grip, my good man, because I think you are starting to lose touch with reality! 

_“Of the many thousands of people who approached Storm and looked at their strategy, some signed on, some walked away after judging it too risky. There’s no point in arguing if it was 75% who walked away, or 60% or whatever. The fact is that many thousands of people rejected the Storm strategy as too risky."_
Just another piece of nonsense by you! I think Doobsy in a past posting somewhere has put this in perspective very well by stating that it is not unusual for many people to  seek advice and then decide not to take up what is on offer. It doesn't mean by doing so that they, as you suggest, spot the obvious flaws in such when so doing and walk away. You know that already but you have chosen to ignore this minor detail because it doesn’t fit your argument. Their reasons as you very well know for rejecting advice can be numerous. You, however, want to tell everyone that what 'Stormies' did by committing to Storm was outside the norm and anyone with any common sense would have walked away. The fact is that many thousands didn't and that should suggest (bearing in mind that even financial professionals couldn't see through it) even to those with half a brain, that  the Storm scheme on the surface seemed viable. We know NOW that it wasn't but where were the experts on this forum or any other for that matter with their sage advice when Storm was operating? Anyone can be wise after the event!

As I have stated before, thousands invested using Storm, not just Helen and I as you would have everyone believe. Your attempts to divorce those people from us by insisting that we are different is ludicrous. You have never met us, have no idea of what we are really all about, or have any notion of what we have been through. Yet, you and a few others profess to know our motivation for investing with Storm. What really gets up your nose though is the thought that we don’t agree with your view of us because it doesn't fit your own. 

Some people do have the ability to lift a man up when he's down. Your kind can only put in the boot because it makes you feel good. It's a pathetic way to be and I feel sorry for you. We may have lost our money, but we will never lose our dignity or compromise ourselves by bowing to liars, cheats, charlatans, or carpet-baggers. Nor will we bend to people like you that want to throw the first stone because it gives you a sense of importance and self-righteousness.  

_"If you’re going to continue making such claims, let’s see you back your viewpoint with some solid argument."_
 Do you actually absorb anything posted on this forum or are you just ready with your highlighter to pick out segments that you can respond to in your own inimitable asinine way. I have taken the trouble to explain why Helen and I invested using Storm but this has clearly not been good enough for you. As Solly has said recently, I have said and many others have also said, we are not in the dock along with those accused. Yet, you constantly seek to put us there!  Your failure to understand this simple fact indicates to me that you are off with the fairies which remains your problem, not mine! 

_“For instance, “In an earlier post I demonstrated to you how just ten seconds of research could have revealed the risks in Storm’s strategy. I backed that statement with historical figures, logic and sound reasoning.”_  Ten seconds is rather a long time for one with your omniscience? Poor old ‘Doobsy’ took a few hours to do the same exercise and he works in the profession! But then again, he unfortunately doesn’t have your business acumen or your contacts on the Internet. 

_“Logic and sound reasoning!”_ Somehow, that doesn’t quite equate with your previous postings. You seem more intent on giving us all a good belly laugh! Thanks for that! We all need cheering up at this particular time.  

_“Let’s see you do the same with your views, Frank – it shouldn’t be too hard if your beliefs are formed from a solid basis of fact.”_
I have already presented the “facts” in past postings and you have merely responded with “suppositions”. Therefore, I suggest that you go back to school and learn the difference between the two. In order to do this you will have to clear your mind of the obvious prejudices that exist there and the belief that everyone but you is wrong. Too much moon gazing could be the cause! 

Your constant verbal harangues are a mild irritant to those involved with Storm that also are members of this forum, but it will not distract us from our purpose. 

For anyone on this forum that is reluctant to post because of the vitriol they might receive back from Mr. Rabbit  and others, I say to you, _“Don’t let rabbits scare you away? They are rather cute animals that are rather timid by nature and make good eating. They don’t have much sense so they are easily caught."_ 

But then again, isn’t that what they accuse us of being - _"not having much sense and easily caught?" I guess we were when you think about it because we thought we could trust those that operate in the financial sector with our money. We also thought that we could trust this Government to protect us with statutory regulations that were adequate. Furthermore we made the mistake of  assuming that ASIC had effective systems and resources in place to police the market. 

But then I forgot that according to “rabbt law” we shouldn’t trust anyone because they just can’t be trusted. I wish we had known that some years ago because it would have saved us a lot of money and time which we could have spent more productively - hunting rabbits for instance._


----------



## jjtebj12 (27 February 2012)

Wonder about the silence of John Gibbs, John Buchanan and Andrew Symons who reportedly lost millions?


----------



## bunyip (27 February 2012)

Frank Ainslie said:


> *(1) *Are you trying to sink to new levels of puerility? Don’t you yet understand that if professional financial people couldn’t see through Storm’s financial scheme, ordinary people had no chance!  Do I have to spell it out for you again?
> 
> *(2)* I was under the impression that ASIC was formed to protect consumers although it’s easy to forget this from time to time the way ASIC performs. However, why anyone would treat ASIC with extreme caution is beyond me.
> 
> ...




(1) So you expect us to believe that not one of the thousands of people who consulted Storm could have seen through Storm’s investment scheme! To quote you, they had ‘no chance’.
Gee Frank – guess it must have been just pure luck then that made most of them walk away. Yeah right!
Ol’ mate, you just can’t accept that many of those people were a lot smarter and more perceptive than you were.
You didn’t get burnt because it was impossible to see the risks in the Storm strategy. You got burnt because you put very little effort into finding those risks.

(2)  Long before the Storm saga, ASIC was on public record for their poor performance....hardly the sort of organisation I’d want to place faith in, although you seemed to think it was OK to do so.

(3) What I and others are telling you is that you need to thoroughly look into an investment proposal before committing millions of dollars to it.

(4) Many schemes seem viable on the surface, Frank. It's when you scatch below the surface that the real story is revealed.
Sure, anyone can be wise after the event. But what you can't seem to accept is that in the case of Storm, many people were wise _*before*_ the event.

(5) So tell us then Frank - what exactly was your motivation for investing with Storm ....given that you were 65 years old with plenty of money for a debt-free self-funded retirement?
You've admitted that you had no need to mortgage your home. You reject the suggestion that you were motivated by greed. 
So what *did* motivate you?

(6) Doobsy said it would take him about an hour to read Storm’s SOA - a couple of hours all up to re-read sections to get to the heart of the strategy.
Given that the SOA was 107 pages, much of it useless waffling without getting to the point, I’m surprised that it wouldn’t have taken him much longer.
Here’s an extract from Doobsy’s post.........

_*To catch up a little - Frank - any decent adviser would take probably 1 hour to read the SOA as it was full of appendices and cashflow projections but the first 40-50 pages were generally full of generic information.
They would probably re-read the advice section a couple of times but within a couple of hours would easily be able to identify the strategy and the fact what was behind it. As such they could easily identify how risky it was.*_

I wonder what Doobsy would have told you if you’d gone to him and said....._ ‘I’m 65 years old – what I propose to do is mortgage my home to raise a large margin loan to combine with my own money, and sink the whole lot into the stock market. Then I’ll raise another big margin loan through double gearing, and I’ll sink that into the market as well’._
I’m pretty sure that Doobsy and any other reputable financial adviser would have been able to tell you on the spot that the proposal was extremely risky - I doubt if they’d even need to look at the figures.

I’ve told you that you could have uncovered the risk in the Storm model in just ten seconds. All you had to do was take your proposed market investment – lets use 2 million dollars as an example – and divide that figure by four to tell you how much money you could lose in just one day if there was a repeat of the 1987 market crash that wiped 25% off the market in a single day, and 50% in just over a month.
Divide 2 million dollars by two (another 10 second calculation) to find out what your losses could be in just a few weeks if the ‘87 crash was repeated.
Actually I’m wrong – I’ve just hauled out my calculator and done the figures – it took 5 seconds, not 10. And about 2 seconds to do it my head.
Feel free to show me where my claim is incorrect.


----------



## maccka (27 February 2012)

Although I am not Forum admin, I'd like to take the time to remind posters of the forum rules we ALL agreed to when we signed up to ASF and we confirm everytime we login.

Source :  
https://www.aussiestockforums.com/help/terms

"By agreeing to these rules, you warrant that you will not post any messages that are obscene, vulgar, defamatory, sexually-orientated, hateful, threatening, or otherwise violative of any laws.

CODE OF CONDUCT
1. Aussie Stock Forums was established and is built around the concepts of mutual respect and the free exchange of information and knowledge for the benefit of all.

2. All members must treat other members with respect at all times. This means insults, name calling and personal attacks on other members are strictly forbidden. Forum trolling - the intentional provoking of other forum members - is also forbidden. Please treat other members as you yourself would wish to be treated. Repeated violations of this rule will result in the suspension of your Aussie Stock Forums account.

3. Obscene language and the use of language that is sexist, racist, harassing or threatening is strictly forbidden and will not be tolerated.      ....."

The fact that there are so many posts asking for Stormies to post to the thread regardless of the trolling, flaming, harassment and bullying of the same few identities speaks volumes to the culture that has developed on this thread.

How about some people take a long hard look at themselves and start behaving like rational adults rather than cyber-bullies?

Cheers 
Maccka


----------



## Bonk (27 February 2012)

I am about to visit Queensland as a tourist next month, is there anything one should be warned off on ..... I hear the place has scams ,corruption et al.,. This may be on the wrong thread , but people here would be much wiser to ask? Thank you !


----------



## Joe Blow (27 February 2012)

Just a reminder that this thread should be about discussing the issues, not each other. I understand that a number of those participating in this thread were caught up in the whole Storm Financal collapse and that it is inevitable that there will be discussion about the decisions of those who invested with Storm. Fair enough. That's to be expected given the topic of the thread. However, it is possible for that discussion to occur without so much angst and provocation. All it takes is a little bit of effort to keep things both civil and respectful.

I think that there needs to be a little more understanding shown, from those on both sides of this debate. So I would ask everyone to not attack other thread participants, treat others with respect at all times and avoid being deliberately provocative.

Thank you all in advance for your co-operation.


----------



## sval62 (27 February 2012)

Bonk said:


> I am about to visit Queensland as a tourist next month, is there anything one should be warned off on ..... I hear the place has scams ,corruption et al.,. This may be on the wrong thread , but people here would be much wiser to ask? Thank you !




Just watch out for shady looking blokes riding bikes without helmets,drinking copious amounts of cask wine and most likely have a bunch of women hanging off each arm.
I think one looks like this


----------



## Frank Ainslie (27 February 2012)

maccka said:


> Although I am not Forum admin, I'd like to take the time to remind posters of the forum rules we ALL agreed to when we signed up to ASF and we confirm everytime we login.
> 
> Source :
> https://www.aussiestockforums.com/help/terms
> ...




No problem with that, Maccka, as far as I am concerned! The sooner we get back to some sensible debate, the better in my view!

I'll stick by the rules as long as others do the same. One thing is for sure! Neither I or others want to be continually going over old ground because it's getting is nowhere. Nor do we want to be endlessly defending ourselves from attacks by certain individuals that cannot accept what we have to say. If they don't agree with us, that is their prerogative. Certainly many won't but some people seem to be hell-bent on turning this into a personal vendetta. Why, is beyond me because I can see nothing being gained by doing so. 

The people that suffered at the hands of Storm have been through enough and they therefore do not need to be inundated with further abuse. Rather, they need to be encouraged to post so that their views can be aired which will only add to and further promote healthy debate. I think most of us want this to happen but the current climate on this forum makes anyone involved with Storm very wary of doing so! I can give as good as I get, but it's an unproductive exercise because it stifles rather than fosters healthy debate.

I hope now that we can go forward and I for my part will certainly co-operate in this regard.


----------



## maccka (27 February 2012)

Frank Ainslie said:


> No problem with that, Maccka, as far as I am concerned! The sooner we get back to some sensible debate, the better in my view!
> 
> I hope now that we can go forward and I for my part will certainly co-operate in this regard.




Thank you Frank.

Cheers
Maccka


----------



## Solly (27 February 2012)

When matters are next in Court.

Proceedings are being held in public so anyone interested may attend.	

1 March 2012
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


----------



## Solly (29 February 2012)

Solly said:


> When matters are next in Court.
> 
> Proceedings are being held in public so anyone interested may attend.
> 
> ...




Justice Reeves Court No. 7, Level 6

10:15 AM Directions

1 NSD811/2010 LESLIE JAMES SHERWOOD & ORS v COMMONWEALTH BANK OF AUSTRALIA & ANOR

2 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED

Directions and Interlocutory Hearing

3 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS


----------



## Mindstorm (29 February 2012)

Solly said:


> Justice Reeves Court No. 7, Level 6
> 
> 10:15 AM Directions
> 
> ...




I'm really looking forward to seeing, and finally meeting, all of the posters on this ASF thread at court tomorrow.

We stormies need all the support we can encourage...

Mindstorm


----------



## Garpal Gumnut (1 March 2012)

Mindstorm said:


> I'm really looking forward to seeing, and finally meeting, all of the posters on this ASF thread at court tomorrow.
> 
> We stormies need all the support we can encourage...
> 
> Mindstorm




Sorry mate,

I had a split-load to take to Bollon, via Prossie, Agnes and Caboolture, but the rain made me stay at home. I had planned to get my driver to park the doubleB in George St, and slip in to meet everyone.

Please fill me in on the day.

And

Is Solly balding?

gg


----------



## Mindstorm (2 March 2012)

Garpal Gumnut said:


> Sorry mate,
> 
> I had a split-load to take to Bollon, via Prossie, Agnes and Caboolture, but the rain made me stay at home. I had planned to get my driver to park the doubleB in George St, and slip in to meet everyone.
> 
> ...




Sorry GG, no updates for those who stand in judgement who can't be @rsed to turn up and find out for themselves what's going on.

I will say that we turned up to find that our 'usual' court room is being renovated! So, a very small court allocated, and +/- sixty stormies turned up.

Many had to sit in the hallway.  I was lucky enough to get there early enough to put my tag on a seat.

Those bank solicitors just love seeing all us stormies turn out for every hearing 

Solly did not make himself known to us 

MS


----------



## Garpal Gumnut (3 March 2012)

Mindstorm said:


> Sorry GG, no updates for those who stand in judgement who can't be @rsed to turn up and find out for themselves what's going on.
> 
> I will say that we turned up to find that our 'usual' court room is being renovated! So, a very small court allocated, and +/- sixty stormies turned up.
> 
> ...




Thanks Mindstorm,

Keep up the rage,it sounds as if you are on the front foot.

My best wishes for you, it is tiring, I did it myself as a young guy when similarly duped by my "betters".

Truth will out.

gg


----------



## Solly (3 March 2012)

Garpal Gumnut said:


> Thanks Mindstorm,
> 
> Keep up the rage,it sounds as if you are on the front foot.
> 
> ...






Mindstorm said:


> Sorry GG, no updates for those who stand in judgement who can't be @rsed to turn up and find out for themselves what's going on.
> 
> I will say that we turned up to find that our 'usual' court room is being renovated! So, a very small court allocated, and +/- sixty stormies turned up.
> 
> ...




GG, Mindstorm, 

I couldn't attend. I had a standing commitment around Darlinghurst way. Had a colleague cover. The Stormers showed up in force again, straining the capacity of the venue. 
Balding? No GG, but it has been suggested that I do  make a convincing George Clooney DoppelgÃ¤nger. 

S


----------



## Solly (4 March 2012)

> *"FPA expels ex-Storm adviser*
> Five code of conduct breaches
> 
> The advice association has expelled yet another financial planner of failed advisory group, Storm Financial."




More by Kate Kachor @ www.investordaily.com


----------



## Solly (6 March 2012)

> "*Banks push back at ASIC over Storm*
> Legal case progresses
> 
> Australian banks engaged with ASIC over Storm Financial legal action have failed in their push to have their case dismissed."




More by Kate Kachor @ investordaily.com.au


----------



## Solly (6 March 2012)

*Block out your Calendars* 

When matters are next in Court

Below are the dates and venues when proceedings ASIC have commenced in relation to the collapse of Storm are next in Court.

Proceedings are being held in public so anyone interested may attend.


*5 April 2012*
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000


*27 April 2012* 
ASIC and Doyle proceedings 
Federal Court, Sydney
Justice Foster
Court Room 18B
Queens Square
Level 18, Law Courts Building
Queens Square
Sydney NSW 2000

*15 May 2012* 
ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

*Source: *https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


----------



## maccka (6 March 2012)

Solly said:


> *Block out your Calendars*
> 
> When matters are next in Court




I'd love to be a fly on the wall in some of the mediation and other assorted meetings going on behind closed doors.  I'd especially love to know what is being said in various meetings with one side only.  

I wonder if I'd witness some of the 'magic oh #%$^'  and 'party' :bananasmi moments that various legal teams experience.  

I wonder if the legal teams of both sides are being/have been told everything in one hit at the beginning or if they are discovering information as the other side's legal team brings it to their attention. #whydidn'tyoutellmethatBEFOREwewentin!

cheers
Maccka


----------



## Solly (6 March 2012)

maccka said:


> I'd love to be a fly on the wall in some of the mediation and other assorted meetings going on behind closed doors.  I'd especially love to know what is being said in various meetings with one side only.
> 
> I wonder if I'd witness some of the 'magic oh #%$^'  and 'party' :bananasmi moments that various legal teams experience.
> 
> ...




Maccka
Suddenly this saga has become very very real and very very serious. I believe there will be more  career casualties. Interesting times ahead.
S


----------



## jjtebj12 (6 March 2012)

In many opinions the banks know they are gone on so many fronts. Norris and Narev being cross examined UNDER OATH will be interesting and give a great insight into the bank's & Storm's disgusting behaviour (criminal??). Acting like bullies just emphasizes that are extremely concerned.


----------



## Mindstorm (6 March 2012)

Solly said:


> Maccka
> Suddenly this saga has become very very real and very very serious. I believe there will be more  career casualties. Interesting times ahead.
> S





Solly, with all due respect,

This saga has been very very real and very very serious for thousands of stormies for over three years now.

Personally I don't give a rat's a$$ about any career casualties there may be at the banks.  I'm more concerned for the stormies who have had to cope while the banks hang back from taking *some* responsibility for what they did.

In my opinion, mediation, which has not failed.... it's just ongoing apparently, was never going to work.

In my opinion, the banks will try anything to delay settling with stormies.

I'd love to know what their legal bill is right now.  I'm willing to bet that their final legal bill will be more than what they might have paid just offer the stormies a decent amount to enable the majority to have an easier retirement.  That would have been less embarrassing for them.

I think that they're amazed that the court cases have come so far so maybe it's the banks who are in denial now.  Maybe they thought that it would never come to a trial.

The trial date is set, and I don't think the banks can wriggle out of it.  They can delay all they like in the lead up.  But the date is set, and I think that there are going to be a lot of surprising facts that will be 'aired' once the trial begins.

I just hope the stormies last the time that it takes to see justice, whatever the outcome.

MS


----------



## Solly (6 March 2012)

Mindstorm said:


> Solly, with all due respect,
> 
> This saga has been very very real and very very serious for thousands of stormies for over three years now.
> 
> ...




MS

How many actions of this nature ever go to trial ? 
It would be interesting to seek Stewart's view on this aspect.
And yes, it is now *totally* game on.

S


----------



## Garpal Gumnut (6 March 2012)

Gaol is the only suitable punishment for people who rip off the public for so many billions of dollars, as happened with Storm.

gg


----------



## Solly (6 March 2012)

Garpal Gumnut said:


> Gaol is the only suitable punishment for people who rip off the public for so many billions of dollars, as happened with Storm.
> 
> gg




GG

Maybe there is some discovery that is happening that we are unaware of being done. I quite often have a relaxing brew @ Merlo's on George. I will keep an eye out for any activity that is out of the norm.

S


----------



## Mindstorm (7 March 2012)

Solly said:


> MS
> 
> How many actions of this nature ever go to trial ?
> It would be interesting to seek Stewart's view on this aspect.
> ...





Solly,

I have no idea how many actions of this nature there have been, so can't comment on how many might have gone to trial.

MS


----------



## Mindstorm (7 March 2012)

Garpal Gumnut said:


> Gaol is the only suitable punishment for people who rip off the public for so many billions of dollars, as happened with Storm.
> 
> gg




GG, not sure I agree with you here.

I've never felt comfortable with the fact that people who steal money, bank robbers, embezzlers, etc, get more punitive gaol sentences than those who rob old people, (no reference intended to stormies here), rapists, murderers, the list of offenders is endless..... 

For myself, I'm happy that my financial advisor was shamed in the community where he'd lived in his whole life.  To me, there could be no worse punishment than that.

MS


----------



## Garpal Gumnut (7 March 2012)

Garpal Gumnut said:


> Gaol is the only suitable punishment for people who rip off the public for so many billions of dollars, as happened with Storm.
> 
> gg






Mindstorm said:


> GG, not sure I agree with you here.
> 
> I've never felt comfortable with the fact that people who steal money, bank robbers, embezzlers, etc, get more punitive gaol sentences than those who rob old people, (no reference intended to stormies here), rapists, murderers, the list of offenders is endless.....
> 
> ...




I can understand your viewpoint re the shaming of your adviser.

In law though a sentence following judgement takes in to account both the harm done and the prevention of similar acts in the future, the protection in this case of future investors. The public good needs protection, as well as the punishment of criminal acts.

I still feel gaol is appropriate for many involved in this harm to defenceless investors.

gg


----------



## Mindstorm (7 March 2012)

Garpal Gumnut said:


> I can understand your viewpoint re the shaming of your adviser.
> 
> In law though a sentence following judgement takes in to account both the harm done and the prevention of similar acts in the future, the protection in this case of future investors. The public good needs protection, as well as the punishment of criminal acts.
> 
> ...




GG,

I take what you're saying onboard, but on this I think we'll have to agree to disagree.

I'm not saying that anyone who's found to have done something illegal in all of this shouldn't be punished.  More that I don't know what a fitting punishment might be.

MS


----------



## DocK (7 March 2012)

Mindstorm said:


> GG,
> 
> I take what you're saying onboard, but on this I think we'll have to agree to disagree.
> 
> ...




Community service might be appropriate.


----------



## Solly (8 March 2012)

Garpal Gumnut said:


> Gaol is the only suitable punishment for people who rip off the public for so many billions of dollars, as happened with Storm.
> 
> gg




GG

I'm interested to know if there will be any proven criminality in this saga; fraud, theft, obtaining benefit by deception. If there is let the courts administer the full and appropriate penalties.

S


----------



## Garpal Gumnut (8 March 2012)

Mindstorm said:


> GG,
> 
> I take what you're saying onboard, but on this I think we'll have to agree to disagree.
> 
> ...






DocK said:


> Community service might be appropriate.






Solly said:


> GG
> 
> I'm interested to know if there will be any proven criminality in this saga; fraud, theft, obtaining benefit by deception. If there is let the courts administer the full and appropriate penalties.
> 
> S




Long sentences in some of the less well monitored wings of our prisons would prevent a recurrence of this generational fraud on an unsuspecting investing public, many of whom were the least educated and the hardest working of their generation.

It is the only deterrence.

I am told that Larry Adler's lad, Rodney, for all his bravado, is afraid to even jay walk lest he end up in the slammer again. And he did soft time for his criminality in the HIH affair.

Those of the banking and advice industry should bear in mind young Adler's fate. I quote from Justice Durnford's remarks on his sentencing in 2005, via wikipedia.



> * two counts of disseminating information on 19 and 20 June 2000 respectively, knowing it was false in a material particular and which was likely to induce the purchase by other persons of shares in HIH contrary to Corporations Act 2001 (Cth) .html s 999 ;
> * one count of obtaining money by false or misleading statements, contrary to Crimes Act 1900 (NSW) .html s 178BB ; and
> * one count of being intentionally dishonest and failing to discharge his duties as a director of HIH in good faith and in the best interests of that company contrary to Corporations Act 2001 (Cth) s 184(1)(b).
> 
> ...




I would be practising my shower etiquette if I had been involved.

gg


----------



## Solly (8 March 2012)

Garpal Gumnut said:


> Long sentences in some of the less well monitored wings of our prisons would prevent a recurrence of this generational fraud on an unsuspecting investing public, many of whom were the least educated and the hardest working of their generation.
> 
> It is the only deterrence.
> 
> ...




GG

Never drop the soap ...

S


----------



## Garpal Gumnut (8 March 2012)

Solly said:


> GG
> 
> Never drop the soap ...
> 
> S




No mate, in the Creek, you never bend to pick it up.

That is what I meant by etiquette. I run courses for the guilty pre-sentence at $10,000 a pop.

gg


----------



## Solly (8 March 2012)

Garpal Gumnut said:


> No mate, in the Creek, you never bend to pick it up.
> 
> That is what I meant by etiquette. I run courses for the guilty pre-sentence at $10,000 a pop.
> 
> gg




GG

Sounds like a good little money spinner. Discount for CASH?

S

S


----------



## jjtebj12 (8 March 2012)

jjtebj12 said:


> Wonder about the silence of John Gibbs, John Buchanan and Andrew Symons who reportedly lost millions?








???????


----------



## Mindstorm (8 March 2012)

jjtebj12 said:


> ???????




Sorry, what exactly does this post "???????" mean?

If you're referring to your own previous post, doesn't the fact that no one's answered that post tell you that anyone who's reading this thread can't, won't or don't want to answer your initial question?

I for one have no idea who the people you mentioned in that earlier post are.  Sorry 

MS


----------



## Solly (8 March 2012)

Mindstorm said:


> Sorry, what exactly does this post "???????" mean?
> 
> If you're referring to your own previous post, doesn't the fact that no one's answered that post tell you that anyone who's reading this thread can't, won't or don't want to answer your initial question?
> 
> ...




MS

Some light reading that may add clarity to jjtebj12's post. 

S 

http://www.couriermail.com.au/news/...eye-of-the-storm/story-e6frep2o-1225945522770


----------



## Mindstorm (8 March 2012)

Solly said:


> MS
> 
> Some light reading that may add clarity to jjtebj12's post.
> 
> ...




Thank you Solly,

I missed this news article.  I'll do some further research 

Sorry JJwhatever  

MS


----------



## jjtebj12 (9 March 2012)

What I mean is these high profile people haven't walked away quietly for no reason. Secret deals! Or am I presuming again? I also wonder why certain media are very quiet.


----------



## Garpal Gumnut (9 March 2012)

Solly said:


> MS
> 
> Some light reading that may add clarity to jjtebj12's post.
> 
> ...




So would it be fair to say that there are three groups of litigants on the Investor side.

1. Manny and the sixty investors.

2. Slater and Gordon investors

3. Levitts investors

If so, are they separate from each other in their aims?

Do they crossover in any way?

gg


----------



## maccka (9 March 2012)

Garpal Gumnut said:


> So would it be fair to say that there are three groups of litigants on the Investor side.
> 
> 1. Manny and the sixty investors.
> 
> ...




Hi GG,

I believe there are some individual actions and of course there is also ASIC.  My understanding is that ASIC and Levitts are working closely but looking at different aspects of the cases due to the nature of what ASIC is actually allowed to do.  

As for the rest of it I don't really know.

Cheers
Maccka


----------



## Frank Ainslie (9 March 2012)

Solly said:


> MS
> 
> Some light reading that may add clarity to jjtebj12's post.
> 
> ...




Hi Solly,

I remember the article in question! Here's a snippet of _'Plausible Deniability' _for those that are interested:

_FOREWORD

*“Beware of false prophets, who come to you in sheep's clothing, but inwardly are ravenous wolves.” Matthew 7:15*

They say that in order to appreciate anything fully you need to be there and experience it for yourself. Well, Helen and I are certainly there all right! Up to our eyeballs in the dung heap that Storm Financial and certain banks have created that left their customers broke; in some cases homeless, deep in debt, and many bereft of even the basics to live any type of meaningful existence. Many of these are elderly self-funded retirees that have been left wondering, “What the bloody hell happened?”
My name is VICTOR (Frank) AINSLIE and I will attempt in this book to tell you exactly what happened, what your legal position is, and what you can do about it.
My name tends to confuse people at times because everyone calls me Frank although my name is really, Victor. My father went by the same name and it all became too confusing for everyone, so I quickly became ‘Francis’ which is my second name. Growing up in the east-end of London in the fifties, ‘Francis’ was an unfortunate name to have because of its somewhat sissy undertones so I told everyone my name was ‘Frank It seemed a safer bet at the time because the back streets of London are no place to be either a sissy or precious about one’s name. The name’s stuck ever since.
It’s funny when you think about it, my first name being ‘Victor’ and all because it’s almost spelt the same way as ‘VICTIM’ which is what I and thousands of others have become. 
It seems ironic really to think that we, Helen and I, were taken to the cleaners by tricksters because I have always tended to be cautious by nature where money is concerned. I guess this comes from growing up poor and knowing the value of a quid.
To find myself poor once again, after a lifetime struggling to be anything but, feels odd to say the very least. However, I have found that no matter who we are, life always seems to throw us a curved ball from time to time. When it happens, we can either duck or try and knock the cover off it. I prefer to try and do the latter because it’s in my nature. 
Turning the other cheek to my way of thinking is bending over and giving someone the ‘Full Monty’ and that’s what I intend to do in this book because the rogues mentioned in it deserve nothing less. 
It’s an unfortunate fact that some people that inhabit this world of ours are forever on the prowl for others that can further their needs, be it for power, greed or whatever. The road to their success is always littered with the bodies of their victims. 
The word “Victim” among other things means“ one that is tricked or duped!” In this book, I will show you how I and the other people that invested using the services of Storm Financial were tricked and duped by that financial advisory firm and the Banks that acted in partnership with it. I say partnership because Siamese twins would have had problems being closer. Yet, those same banks now claim that they hardly knew Storm Financial even though they had been sleeping together for years.
Helen and I are not alone. We are but two of 14,000 investors that travelled down the same path, or should I say, fell in the same black hole that has now been labelled, “the worst financial disaster in the history of Australia.” 
How does one best describe what happened and encapsulate it all in the title of a book? I must admit that I seriously considered calling this book, “FUBAR” which is an acronym that became popular in World War 2 when someone wanted to express their dissatisfaction in strong terms. 
It stands for: F*cked up beyond all reason, F*cked up beyond all recognition, and  F*cked up beyond all repair. Take your pick! They all seem apt somehow!
Actually, the origins of FUBAR are not known with any certainty but it may well have derived from the German word  ‘furchtbar’ which means awful and terrible.
If my words are making you feel faint at this point, try sitting here in this dung heap that these corporate criminals have created for us. It just reeks of corruption!
When Storm’s clients lost $3 billion in savings and assets, it was indeed ‘Fuchtbar’ (AWFUL and TERRIBLE) because so many who lost everything, leaving them completely destitute, were elderly Australians. Make no mistake about the effect it has had on their lives. It has simply destroyed them. 
The fact that the majority of them shaped this country and instilled in it a set of values doesn’t mean an iota to this Government or the financial institutions that milked them for profit and abandoned them when everything went pear shaped. 
Whilst the world of those Storm investors is now well and truly FUBAR and this would indeed have been a suitable title for this book, it just didn’t quite suit somehow! 
I then toyed with the idea of calling it “AUSTRALIAN CONSPIRACY” because this title does describes what happened then and what is still happening now. The alliances certain Banks and Storm formed with one another and the covert agreements they had in place were the prime cause of so many losing so much. These Banks and Storm certainly did plot together to use their clients’ assets for personal gain, and by so doing, they went beyond the bounds of responsible financial advice and prudent banking practice. 
In the end though I decided to call it “PLAUSIBLE DENIABILITY” because this seems to best describe the situation that currently exists where the Banks are concerned. 
Now, you are probably scratching your heads and wondering what the heck “plausible deniability” means. 
“Plausible deniability” for those that are not familiar with this strategy is one where the upper rungs of management in an organisation pass the blame to those on the lower rungs, and the people on the lower rungs are often inaccessible (sacked in the case of the CBA). It, then becomes difficult to establish exactly who is to blame. It’s a ploy often used by those that gave the orders in the first place to distance themselves from any responsibility.  In the case that illegal or otherwise disreputable and unpopular activities become public, high-ranking executives will employ this ruse to deny any awareness of such acts by those below them in the chain of command.
The CEO’s of the CBA, the Macquarie Bank and the Bank of Queensland seem to fit the bill perfectly. 
The term "plausible deniability" can also apply to any act that leaves little or no evidence of wrongdoing or abuse. On this score, Storm Financial and the Banks involved fall down badly. There’s enough evidence lying around to condemn them all, if only we can get them into a court room. 
Unfortunately, parties such as the Parliamentary Joint-Committee and ASIC who have been investigating this matter seem to have trouble focussing on the body of evidence relating to the crimes of the Banks. One has to presume that Storm Financial is easier quarry to hunt down. 
Plausible deniability is also a legal concept by the way. It refers to lack of evidence (or so the Banks think) proving an allegation. Standards of proof vary in civil and criminal cases. In civil cases, the standard of proof is "more likely so than not" whereas in a criminal matter, the standard is "beyond a reasonable doubt" 
If your opponent lacks incontrovertible proof (evidence) of their allegation, you can "plausibly deny" the allegation even though it may be true. 
Well, Bro! Do we have news for you!
Storm Financial and the Banks involved with that company are, of course, the chief perpetrators! However, these financial bodies could only have operated in this way when a culture of “free market” policies was allowed to flourish. Those in authority who failed to identify the wrongdoings of Storm and the Banks until it was all too late are, by default, themselves tacit accomplices.  Their inertia now, their lack of foresight then, their dereliction of duty to Australian investors in general, and the elderly in particular who were led to believe that investing was safe, should be roundly condemned by all. By failing to bring the Banks involved to task, they are adding insult to injury. 
The facts of the matter are plain enough.  Certain major banks in this country formed an unholy alliance with Storm Financial – FACT! Those banks were instrumental in promoting Storm Financial’s shady practices and high risk schemes - FACT! These banks are now endeavouring to COVER-UP their dealings with that advisory firm – FACT! 
Why then, we must ask, is this Government and ASIC going soft on these corporate criminals? Can’t they see that these banks are simply shrugging their shoulders and thumbing their nose at this Government and ASIC. 
When questioned the banks offer lame excuses, “Not us Mister! We did nothing wrong!” Well, this time, they have been caught with their hands in their customers’ pockets, and they should be made to return what they have stolen. What’s more, they should be punished because that is what one does to those that have broken the law.
This book seeks to exposeStorm Financial and the Banks for what they really were, “false prophets and ravenous wolves” that bled their customers dry for financial gain without any regard for the consequences._

(Continued)


----------



## Frank Ainslie (9 March 2012)

"Plausible Deniability - Foreword (Continued)

_Since the collapse of Storm Financial, I have been an active poster on the ‘SICAG’ Group and ‘SOB’ (my own discussion Group). SOB by the way is an acronym for “Storming on Banks.” However, as one member of SOB was quick to point out, it could equally stand for “Sick of Bull-****ters!  I hope he wasn’t referring to me?
This book is a compilation of my many postings on these Groups, and some of my past correspondence with ASIC, the CBA, the Macquarie Banks, the Bank of Queensland, the Parliamentary Joint Committee, the Government and others expressing points of law, outlining flawed procedures, highlighting criminal acts, pointing out blatant misrepresentation etc. I have also quoted various media articles, and I have echoed comments made by others that emphasise a particular point. 
In parts of this book, because of the subject matter, it doesn’t make for avid reading. Points of law for instance for some can be BLOODY BORING! However, it is not meant to be a thriller. If anything, it’s more a horror story! Therefore, I have tried to lighten the mood at times by introducing some humor to the narrative. The subject matter, however, is far from humorous.
I have written this book primarily for the benefit of those that have suffered at the hands of Storm and the banks in order that they can fully understand what has occurred and come to grips with the issues involved. This book is basically designed to inform people about the circumstances that led up to these losses, and to help them readily identify the cause and the wrongdoers. 
Many of those that lost money in Storm do not have access to any Group and they must therefore rely on information provided by the media, their solicitors if any, or other information outlets. I hope this book will be helpful for those people. If others find it of interest, so be it.
I have learnt among other things in my life that knowledge is power! Only by knowing what really happened can anyone make an informed judgement about anything. Only by knowing will you be able to fully comprehend what these banks and Storm did and why the banks must now pay.
This book is basically about four villains: Storm Financial, the Commonwealth Bank of Australia, the Macquarie Bank, and the Bank of Queensland. This book focuses on these “Four Riders of this Australian Financial Apocalypse.” (Not a bad book title that! - A sequel perhaps!)
However, it should be noted that there were other Banks caught up in the Storm labyrinth, and they must also share some of the blame. They were all like pigs at a trough devouring their customers’ monies greedily.
In this book I have tried not to pervert the facts as many have but rather say it as it is without fear or favour. If, in so doing, I upset a few people, so be it! If I upset a few bankers, great! If I upset anyone that was once part of the Storm Financial hierarchy, I would ask them to put themselves in our place. They’ll never be as upset as we are; the people Storm and the Banks took for a financial ride.
This book will also serve, I hope, to remind those in Government and ASIC of their duty to prosecute the wrongdoers to the full extent of the law. This matter is too important to thousands of elderly Australians to ignore any longer. It has to taken out of the “too hard basket” and something has to be done NOW! 
The focus of this book is not on Storm Financial despite its leading role in all this because it is no more. Having said that, the directors of Storm Financial were the architects of this Australian tragedy and I have sought to explain their part in all this as fully as I can. 
Someone like Ron Jelich (the former Development Manager for Storm) will be able to tell us what really went on in the Cassimatis Bunker. I’m hoping that he will eventually add his segment to this book, so we can get an idea of the inner workings of the Storm menagerie.
The arch villains that do remain are, of course, the Banks. They always survive because they are protected by the Government of the day, and they are therefore, to all intents and purposes, above the law. They are sacrosanct, so to speak! 
Because this state of affairs is allowed to continue infinitum, the Banks ride roughshod over their customers interests, violate their own banking codes of conduct, treat ASIC as fools, have the money to “offset any Storm” and churn money out of all and sundry at every available opportunity. They are completely without scruples of any kind, and they have no shame. Then they have the barefaced effrontery to continually advertise that they are the best because THEY CARE! The only thing they care about is money. Theirs! Not ours!
The truth of the matter is that the individuals in these Banks conspired with Storm Financial to milk their customers for gain, and they did so unlawfully. They should therefore be prosecuted accordingly under the laws laid down to protect consumers. Nothing less is warranted. 
As for the head honchos in those Banks, they should resign because they are either inept or corrupt, or both. “We are not responsible! Don’t blame us! We didn’t know what was going on!” Like Hell they didn’t!
President Harry S. Truman had a sign with the inscription “The Buck Stops Here!” sitting on his desk. This was meant to indicate that he didn't “pass the buck” to anyone else, but accepted personal responsibility for the way the country was governed. Maybe some of these Banks’ CEO’s should take a leaf out of his book. Then again they could be telling a few “pork pies” about not knowing, that is! What do you think?
Nah! The Banks would never do that!
I can tell you this! The one thing that these banks fear the most is being prosecuted because the law, at least, provides a level playing field where the influence of vested interests can no longer be exerted. The principles of commercial, statute, and criminal law that apply in a court room will bring these banks down. They know it! The question is, “Are you willing, and for that matter able, to sue these bandits?” If you are, you will need to join the class actions that are currently underway. Numbers are the key!
As for this Government and the regulatory policeman, ASIC, they need the intestinal fortitude to get off their backsides and act. Until then the question must always linger, “Who is actually governing this country?” At the moment it seems that big business in the guise of the Banks and other large commercial interests are, and the Government is merely a puppet that waits for its strings to be pulled.
ASIC has a duty to ascertain who is to blame and prosecute those individuals that have perverted the laws of this country.  We, the people that have suffered as a consequence of their actions expect nothing less. Indeed, to do nothing less makes these Governing bodies complicit in their own right.  
There is a self-evident truth! 
“When good men do nothing, they are no longer good. Many have the mistaken notion that good is merely the absence of doing that, which is wrong. Not so! One is good not merely because he does no evil, but because he is actively working for what is good.”
At the momen, to the people that are still waiting for something to be done, it seems that everything is “FUBAR!” _


----------



## Frank Ainslie (9 March 2012)

Garpal Gumnut said:


> So would it be fair to say that there are three groups of litigants on the Investor side.
> 
> 1. Manny and the sixty investors.
> 
> ...




Hi GG,

I would be interested to know who these 60 investors are and whether some of them are wearing two hats? Anyone in Manny's camp cannot be in ours as well! One cannot sleep with the enemy and return to our camp when it suits them!


----------



## Garpal Gumnut (9 March 2012)

Frank Ainslie said:


> Hi GG,
> 
> I would be interested to know who these 60 investors are and whether some of them are wearing two hats? Anyone in Manny's camp cannot be in ours as well! One cannot sleep with the enemy and return to our camp when it suits them!




It is all truly very complicated Frank.

I trust that you will recover your investment and go on to enjoy life again.

How does one buy your book?

gg


----------



## Frank Ainslie (10 March 2012)

Garpal Gumnut said:


> It is all truly very complicated Frank.
> 
> I trust that you will recover your investment and go on to enjoy life again.
> 
> ...




Hi GG,

As you say, "_It's all very complicated!"_ Even the lawyers will have problems getting their heads around this one because there are so many aspects to consider. Furthermore, certain evidence will only come to light when these matters are considered in Court. My comments must therefore be prefaced based on what we know now - not on what will be presented in due course.

As for _"Plausible Deniability"_ I wrote it for the people that suffered at the hands of Storm and the Banks, and anyone else that is interested in what occurred. It's in PDF format and can be downloaded free of charge at: https://sites.google.com/site/stormingonbanks/home/our-company

What many fail to understand is that _'TIME'_ more than anything else works against us because the majority of us are elderly and the years that have been lost can never be regained. The Banks know this and will therefore drag it out for all that it is worth! In so doing they will aim to break our resolve. Indeed, many have already found the journey just too damn hard. 

Personally, I'd rather blow the bastards up but Helen reckons that's a bit over the top!   I might write a fiction novel when this is all finished about someone caught up in a saga like this that decides to take the law into his own hands. A vicarious experience is better than no experience at all! 

Let's hope someone doesn't get any ideas from what I have said because I'll then be the number one suspect! Free board and lodgings for the next ten years. Now there's a thought!


----------



## Clovie (17 March 2012)

As an interested Townsville local I have been watching this thread from GG’s initial post in ‘08 after Bulletin articles about Storm’s demise. I recently had a chat to a relative who I knew had visited Storm Financial in the early days before they moved to their salubrious cluster of buildings in the cutting, interested in why she was one of the (70%?) who walked away. Storm was recommended by a number of her friends and work associates, and she knows many personally who were with Storm. The planner she and her husband met with spent the majority of the meeting getting her to list all of her properties, how much was owed on each and what rental returns she was getting. He asked her to also list all of her (adult) children and other close relatives and their addresses. When he had a page listing her property assets which were quite substantial, having owned a successful small business and having invested in property over the last 40 years, he drew a line through the list and said that (in her words) ‘The first thing we will do is get rid of all of this and start making you some real money.’ She was quite astounded at his arrogance and didn’t read the very extensive documentation he sent them away with. Luckily she didn’t have to pay for the advice as apparently at the time initial financial planning meetings were free for the first 2 hours. 
She also had some interesting insights into the cult like following Manny aroused in some Storm investors. When she tried to advise a friend (the lady across the road!) to warn her to get her money out when the stock market was falling rapidly she got a very angry and negative response, the woman demanded to know who was saying Storm investments were not safe and that she would ring Manny! Manny stated at a meeting that he called when even ‘loyal investors’ were getting worried (about 400 went), that ‘The shops would be empty and the banks would crumble before Storm Financial went down’, and she, along with some others, believed him. Very Messiah like. 
Incidentally, the woman she warned had refused to sell or re-mortgage her home, so she still has it, though she did lose 90 thousand dollars.


----------



## Judd (17 March 2012)

Thanks Clovie,

Another reinforcement for me of one thing that has always been at the back of my mind and this thread has confirmed in a way in that why one person takes a particular path and another doesn't is apparently an individualistic thing.

Though it still perplexes me why, when doubts by some individuals were increasing markedly, they still followed the advisers suggesting to increase debt instead of just saying No.  Even read of one case in the submissions to the Parliamentary Inquiry where one couple hid from their adviser the fact that they had spare cash but seemingly could not face the adviser to instruct him/her to get them out of the market.  Amazing stuff.


----------



## DocK (17 March 2012)

Judd said:


> Thanks Clovie,
> 
> Another reinforcement for me of one thing that has always been at the back of my mind and this thread has confirmed in a way in that why one person takes a particular path and another doesn't is apparently an individualistic thing.
> 
> Though it still perplexes me why, when doubts by some individuals were increasing markedly, they still followed the advisers suggesting to increase debt instead of just saying No.  Even read of one case in the submissions to the Parliamentary Inquiry where one couple hid from their adviser the fact that they had spare cash but seemingly could not face the adviser to instruct him/her to get them out of the market.  Amazing stuff.




I've never studied psychology, but I do think sometimes it comes back to our training from childhood to "do what you're told by those in authority" be they parents, then teachers, then employers and doctors and dentists and financial advisers etc.  If our doctor tells us we must cut cholesterol or alcohol intake etc - we'd generally believe that they know best and we'd be well-advised to follow their advice for our own benefit.  Likewise when our accountant tells us what we can and can't claim as tax deductions we know we risk serious penalties if we ignore their advice.  I think this played into the whole Storm saga - most of their clients were not financially savvy (or they'd probably not have sought their advice in the first place) and therefore the relationship between client and adviser was one where the adviser was the authority figure.  Seems rather dumb when you consider that the "employer" was actually the client - but the person with the expertise was supposedly the adviser.  I think quite a lot of us got that niggly feeling in our gut that all was not quite right before it all went to hell - it then became an internal tussle to either overcome ingrained habits of "doing what you're told" or facing/admitting that those we trusted were not who we thought they were.  Some took control back into their own hands, some went half-way by keeping some details hidden as in the example above, and others either couldn't or didn't want to admit that their trusted authority figure was doing them a disservice.  Some still seem to believe in Manny, just as some people will never hear criticism of family or friends no matter what evidence is put before them.  When you've spent your whole life (60+ years for a lot of clients) trusting those who are in positions of authority in society, it can be a very hard habit to break, and one we're often preconditioned against.


----------



## SJG1974 (17 March 2012)

Gut feel and common sense are two important factors people should trust whenever they make any decision, whether it be buying a tv or handing over your life savings to a "financial adviser". As this thread has shown, for reasons that are still a mystery to me, so many people ignored their gut feeling, and showed limited common sense at best when dealing with Storm. 

And now they are destitute, it is all someone else's fault. I am sure there will be conmen in Townsville running their hands together in anticipation of Storm investors being awarded compensation over this whole mess...


----------



## jez47 (18 March 2012)

SJG1974 said:


> And now they are destitute, it is all someone else's fault..





If it was the investor's fault why did CBA offer their Resolution Scheme via Slater and Gordon?  Surely not from the kindness of their heart ?


----------



## shibby (18 March 2012)

SJG1974 said:


> And now they are destitute, it is all someone else's fault. I am sure there will be conmen in Townsville running their hands together in anticipation of Storm investors being awarded compensation over this whole mess...





Well I slept on your comment and here it is 4.00pm and I still feel the same so here goes - what a pathetic little man you must be that you found it necessary to write that last sentence.

The irony is that the banks will win because 99% of us will probably put our so called “compensation!!!!!” in a bank or spread it over a variety of banks in an account with a pittance of interest (inverse relationship between risk and interest rate) fearful to ever trust ourselves or anyone again.
Just think of all the money the bank will make lending it out at exorbitant rates of interest, so don’t you fret SJG1974 your precious banks will live to rip off yet another  generation or two.

I have found it of great interest in reference to the Storm Financial saga that all these corrupt people found each other, doesn’t anyone else? 
What are the odds on that (always loved statistics).  
Is there a baddies radar out there? Do they just instinctively know or simply recognise each other? 

One financial advisory firm and most Australian banks are involved in this financial mess and the banks are up to their armpits in corruption, yet to be proven in a court of law of course, so bring on September 2012 I say.  

So for the sake of preventing yet another argument, for this exercise we will ignore all the hundreds and hundreds and hundreds of loans that have been completely wiped, of course very quietly. Or all the very special deals that have been done on interest rates, all done under the table with signed lengthy legal documentation never to be revealed under the threat of a fate worse than death. 

Seriously our generation,  the baby boomers plus a decade or two, wouldn’t have expected this behaviour from a bank as Dock pointed out “the trusted authority figure” yet scratch the surface and all the documentation is there, the banks didn’t even bother to hide the evidence that’s how secure they felt in their position, because they are a bank and beyond reproach, most people  trust their banks we fundamentally just do or should I say did its just one more sacred cow that has befallen our expectations.


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## jjtebj12 (18 March 2012)

Yes Shibby its amazing all the deals that have been done. Maybe thats why all the high profile people are silent. Another back door deal???? Regardless of the signed confidentiality agreements the truth will come out, trust me on that!!! SJG your attitude is typical of the Banks you support!! The Banks wouldn't offer anything, they are just going to fight because they have to as the claim against the Banks exceeds 2 billion dollars. 10% compensation isn't good enough.


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## SJG1974 (18 March 2012)

I am still not sure why some around here think I am a bank sympathiser.

Is it because I believe people had a choice to go with Storm and therefore should take some responsibility for that? That believe the bank on its own didn't cause the loss these people suffered? That a combination of a high risk strategy, a share market collapse and a lack of due diligence on investors behalf also played a role?

Its got me beat. As I have said ad nauseum, if the courts find the banks liable for wrongdoing, then I will have no issue with that at all. But if people expect me to believe that there was no carrot dangled in front of them, that they thought gearing was low risk and that they only geared to the gills to preserve capital, despite the fact that the Storm website was all about creating wealth, and a simple google search will tell people the risks of gearing, then they have another thing coming I am afraid.

Still, good luck to those fighting the banks..I hope they pay if they have done wrong. Wouldn't have thought I could be much clearer than that (although I have thought that previously).


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## jjtebj12 (18 March 2012)

I did have the ability to pay out my margin call, however I never got one. If only the banks gave me one phone call  things would be so different. Wonder why the media is so quiet, maybe they are helping their own with secret deals!!! The whole thing is abhorrent. The heads of the banks know their wrong doings and think they can hide. It won't happen. They are gone and so many will be found out!!!!


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## bunyip (18 March 2012)

jjtebj12 said:


> I did have the ability to pay out my margin call, however I never got one. If only the banks gave me one phone call  things would be so different. Wonder why the media is so quiet, maybe they are helping their own with secret deals!!! The whole thing is abhorrent. The heads of the banks know their wrong doings and think they can hide. It won't happen. They are gone and so many will be found out!!!!




I'd be interested to know what aggreement you had with your lender in regard to margin calls. For example, did your aggreement state that it was the lender's responsibility to advise you when you were in margin call? Or did it state that it was your responsibility to know when you were in margin call?

Why I'm asking these questions is because of the followng post from Doobsy that appeared on page 337 of this thread. 



_ Found this in the Colonial Margin Lending Terms and Conditions booklet from 2006.

    Notice of Margin Call
    4.3 (a) You agree that we may provide notice of margin call by any
    or all of the following ways to you or your Client Adviser:
    • In writing (including by fax, email or other electronic
    means)
    • Orally, including by telephone
    • Updating the Colonial Geared Investments website.
    Page 4 Need help? Contact us on 1800 252 351
    (b) It is your obligation to keep your or your Client Adviser’s
    contact details up to date.
   4.4 You are responsible for:
    (a) monitoring your portfolio and determining when your loan is
    subject to a margin call; and
    (b) being in a position to receive any communications from us
    in relation to this clause and to act within the time limits
    specified in this clause; and
  (c) ensuring that a margin call does not occur.

    Declarations
    5.6 You and the Guarantor declare that:
    (a) you and the Guarantor solely own the secured property held
    by you, or by another for you; and
    (b) you and the Guarantor have told us about all rights affecting
    the secured property (such as other mortgages or the rights
    of a beneficiary under a trust); and
    (c) all the information you and the Guarantor have given us is
    correct and not misleading; and
    (d) you and the Guarantor have not withheld any information
    which might have caused us not to enter into this
    agreement; 
_

From the sections I've highlighted in red, it appears, at least in this particular aggreement, that the onus is on the borrower to monitor his portfolio and determine when the loan is subject to a margin call.
And also to ensure that a margin call does not occur.

Pleast note that I'm not a bank sympathiser, I don't know who your lender was, and I'm not making any assumptions or passing any judgement here.
I'm simply asking you what your aggreement stated in regard to whose responsibility it was to monitor the margin call situation.


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## Julia (18 March 2012)

jjtebj12 said:


> Wonder why the media is so quiet, maybe they are helping their own with secret deals!!!



Perhaps simply consider that until something further happens with Storm, there's really nothing for the media to be interested in, given they have a hugely broader spectrum of interest than just one financial services debacle.


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## Frank Ainslie (22 March 2012)

For Bunyip and interested parties

_ Found this in the Colonial Margin Lending Terms and Conditions booklet from 2006.

    Notice of Margin Call
    4.3 (a) You agree that we may provide notice of margin call by any
    or all of the following ways to you or your Client Adviser:
    • In writing (including by fax, email or other electronic
    means)
    • Orally, including by telephone
    • Updating the Colonial Geared Investments website.
       (b) It is your obligation to keep your or your Client Adviser’s
    contact details up to date.
4.4 You are responsible for:
    (a) monitoring your portfolio and determining when your loan is
    subject to a margin call; and[/COLOR]
    (b) being in a position to receive any communications from us
    in relation to this clause and to act within the time limits
    specified in this clause; and
  (c) ensuring that a margin call does not occur.[/COLOR]

From the sections I've highlighted in red, it appears, at least in this particular aggreement, that the onus is on the borrower to monitor his portfolio and determine when the loan is subject to a margin call.
And also to ensure that a margin call does not occur._

Bunyip,

You have quoted conditions from a typical CBA margin loan and state that because these conditions are clearly outlined, _“the onus is on the borrower to monitor his portfolio and determine when the loan is subject to a margin call”_. 

So why do you think ASIC and we are litigating against these Banks if it’s all that simple? The fact of the matter is that it isn’t and it’s therefore quite wrong in the case of Storm and the Banks for anyone to look at everything in insolation. The issues involved are far more complex than that! If everything were that straightforward and aboveboard, then the Banks wouldn’t be facing the charges that have currently been brought against them. 

It should also be remembered that we are suing the Banks for breach of contract (among a number of other things) which are linked with their banking codes where issues such as imprudent lending come into the equation. The conditions of contract you mention are, of course, relevant and will form a substantial part of the Banks’ counter arguments when they are defending themselves. However, the question of whether the Banks’ conditions of contracts will stand up in law is another thing. 

In the _‘Goodridge v Macquarie Bank/Leverage Equities Case’_ a particular clause was contentious:

_"BNP may notify you of the margin call and of details of the actions which can be taken to satisfy the margin call"_

His Honour referred to the NSW Court of Appeal decision in Morgan v BNP Paribas Equities (Aust) Limited [20061. NSW, CA 197, in construing the Clause in margin loan documents, namely that by finding that in that context: _"may"_ in effect means _"shall"_, when it comes to making a margin call in terms of the loan agreement. 

_"Otherwise the client would simply not know what were the actions which should be taken to satisfy the margin call. Nor would the client know, in the absence of knowing a margin call existed, that actions were required to be taken in the first place." (per: Santow JA, with whom Gyles and McCole JJA, agreed).”_ 

*A similar clause occurred in the later version of the Colonial Margin Call Agreement.* 

In the conditions you have quoted it states:

_“Notice of Margin Call
4.3 (a) You agree that we may provide notice of margin call by any or all of the following ways to you or your Client Adviser:
• In writing (including by fax, email or other electronic means)
• Orally, including by telephone
• Updating the Colonial Geared Investments website.”_

As to whether or not the CBA or other Banks could assign to Storm the obligation to make a margin call, His Honour's finding with regard to the non-assignability of obligation is important. Clearly, he was of the opinion that the Banks’ could not assign their obligation in this regard.

Because the margin loans contracts were between the Banks and their Storm clients they cannot in his opinion assign the obligations they have to their customers to make margin calls to a third-party - in this case, Storm. Whether they made margin calls to their customers’ client adviser, Storm or not is completely irrelevant. Their primary _“obligation”_ in this regard is to their customers, not Storm. Some will say that this procedure of notifying the financial adviser rather than the customer is standard practice and has therefore become the accepted norm. That is also an erroneous argument because the _“obligation”_ for the Banks to also notify their customers remains, and is not, as Justice Rares has explained, assignable as Banks would have everyone believe. 

In saying this, ‘the _‘Goodridge’_ decision was overturned on appeal BUT the Court of Appeal in so doing did not dispute Justice Rares’ remarks in this respect. Whether another Court has different ideas is anyone’s guess. As I have said before, the only certain thing about the Law is its uncertainty. That’s why we have a chain of different Courts so that decisions in Law can be clarified and determined.

The interesting thing about all this is that the CBA’s resolution scheme was based for the most part on the assumption that Storm could act as our agent in matters such as these and accordingly, the Banks could by-pass its margin loan customers and take their instructions from Storm. This is an assumption rather than a fact in law and it is therefore strange that both _‘The Panel’_ and Slater & Gordon who negotiated this scheme accepted this notion as the basis for the resolution scheme.

Incidentally, Justice Rares also found that a notice on a website was insufficient notice.

_"Therefore, I am of the opinion that the web pages could not be notice to him of any assignment of his loan at law, by statute or in equity. It mostly invited speculation."_ 

Rares J. quoted from Griffith CJ with approval in Anning v Anning [1907J 4 CLR 1049 at 1060: 

_"Written notice means a document addressed to, and intended to be retained by, the debtor."_ 

So you see, what are sometimes contained in the conditions of contract can be misleading or suspect. This means that even though one party can put what they like in their contractual conditions, and such can be agreed to by the second party, these conditions must stand up to legal scrutiny.

For years now the Banks have had it all their own way when it comes to margin loans because they have sought to dictate the terms and you could either _“take it or leave it!”_ Their stance has never been really challenged in law (with the possible exception of the ‘Goodridge’ case) until now. Statutory regulations have now been brought in where margin loans are concerned because it has been recognised that margin loans in their past form have been somewhat inequitable when it comes to the rights of those taking out the loans as opposed to those that lend them; namely the Banks. 

Note that I said _“statutory regulations”_ (such did not fully cover them before), but this does not mean that margin loans were not covered in the past under the tenets of commercial law contracts. All commercial agreements (unless statutory law has been introduced superseding such) are subject to common law principles. Therefore, margin loans have not fallen through any legal net whatever applied in the past. Contracts existed in law as far as these margin loans were concerned and _“obligations”_ and _“rights”_ will therefore play a prime role when deciding breach.

The Courts always view commercial contracts in terms of the obligations imposed on both parties and the rights that both parties should have. In terms of equity, they will also assess whether there is a superior position held by one that impinges on the other’ right’s. 

_“Schroeder Music Publishing Co Ltd v Macaulay [1974] 1 WLR 1308, 1316, per Lord Diplock: ‘To be in a position to adopt this [‘take it or leave it’] attitude toward a party desirous of entering into a contract to obtain goods or services provides a classic instance of superior bargaining power.”’_ 

*To answer your original question, "Can it be argued that the customers were ultimately responsible for monitoring their own margin calls?  that will, of course,  will be for the Law to decide, not the Banks. Certainly, the time-factors involved (CBA -10 to 12 weeks) and (Macquarie Bank 3 to 4 weeks) should blow this argument out of the water! What were the Banks doing during this time? Whistling "Dixie!" perhaps? Were they not in a position to know that margin calls should have been made? For that matter, were they not concerned  about their own positions? *_

As I recently stated to GG, nothing about our cases is straightforward. There are a plethora of different issues and they are many facetted. Therefore, no one has the answers at this stage. Certainly, not me or anyone else on this website. I therefore hasten to add that what I state here is based on my own knowledge of the Law and should not be considered Gospel because I am not, after all, a lawyer. A fellow victim was quick to point this out in a recent email he sent to me in which he quoted a Jewish proverb:

"He who glorifies himself in his knowledge of the law is like a dead beast at the side of the road. Sure it attracts the attention of those passing by - but they all hold their hand to their nose for it stinks!" I gather from this that he didn't agree with my assessment of all this?  

Certainly something stinks about this whole business and the smell is not wholly emanating from my carcass at the side of the road. 

If nothing else, the forthcoming trial promises to be fascinating when the lawyers strut their stuff._


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## doobsy (22 March 2012)

Frank, as part of the CML info came from a post I made I thought I would comment.

1. Under the terms and conditions the client (victim) also had a responsibility to CML and themselves to keep an eye on things.

2. As previously discussed I personally think the imprudent lending claim will cover around 10% of storm clients. In most cases due to the fact that the banks, certainly the margin lenders, were working within legal framework at them time, will be found that the lending was in fact quite prudent and reasonable on information provided on the application forms.

3. Goodridge had the ability to cover his margin loan. 90% of storm clients were completely tapped out.

4. Not that I have any direct exposure to any banking stocks but as a depositor I would hope that the bank put in place adequate protection before onlending my money to others. Whether this be for a home, investment, vehicle, whatever. As such I am glad they were able to recover monies from parties they had lent to. I think borrowers in most cases think the bank should be grateful for the business, it is the other way around, being lent money (other peoples savings) is a priviledge that should be taken much more seriously than currently occurs in Australian society.


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## DocK (22 March 2012)

Frank Ainslie said:


> (snip)
> As I recently stated to GG, nothing about our cases is straightforward. There are a plethora of different issues and they are many facetted. Therefore, no one has the answers at this stage. Certainly, not me or anyone else on this website. I therefore hasten to add that what I state here is based on my own knowledge of the Law and should not be considered Gospel because I am not, after all, a lawyer. A fellow victim was quick to point this out in a recent email he sent to me in which he quoted a Jewish proverb:
> 
> _"He who glorifies himself in his knowledge of the law is like a dead beast at the side of the road. Sure it attracts the attention of those passing by - but they all hold their hand to their nose for it stinks!"_ I gather from this that he didn't agree with my assessment of all this?
> ...




It will indeed be most interesting to have a legal decision on the issue of both the timing and method of margin calls, or lack thereof as the case may be.  Fascinating times ahead indeed - I just hope there won't be delays and stalling actions to prolong the process.


----------



## bunyip (22 March 2012)

Frank Ainslie said:


> Bunyip,
> 
> You have quoted conditions from a typical CBA margin loan and state that because these conditions are clearly outlined, _“the onus is on the borrower to monitor his portfolio and determine when the loan is subject to a margin call”_.
> 
> So why do you think ASIC and we are litigating against these Banks if it’s all that simple? The fact of the matter is that it isn’t and it’s therefore quite wrong in the case of Storm and the Banks for anyone to look at everything in insolation. The issues involved are far more complex than that! If everything were that straightforward and aboveboard, then the Banks wouldn’t be facing the charges that have currently been brought against them.




Frank

You should quote me properly if you’re going to quote me at all. 

I didn’t say_ “the onus is on the borrower to monitor his portfolio and determine when the loan is subject to a margin call”. _
You conveniently left out the first part of my sentence.
What I said was..... 
_‘From the sections I've highlighted in red,* it appears,* at least in this particular agreement, that the onus is on the borrower to monitor his portfolio and determine when the loan is subject to a margin call.
And also to ensure that a margin call does not occur.’_
The words _‘it appears’_ make it plain that I’m not drawing any definite conclusion here. I’m happy to acknowledge that I don’t know (and I don’t care either to be quite honest) what interpretations can or will be put on the wording of margin call documents in a court of law. 

I’m not so foolish as to believe that the Storm case is so cut and dried and simple that it can or will be solved simply by referring to margin call documents. Clearly there must be other bigger issues at hand, or at least allegations of such, to warrant the considerable time, effort and expense of instigating class action.

As for the rest of your post – I didn’t read it. Some people may like to read your interminably long posts, but I’m not one of them.

One thing I can assure you of though Frank, is that if the banks are proven in a court of law to be guilty of illegality, then I certainly have no problem with them receiving appropriate punishment.


----------



## Frank Ainslie (22 March 2012)

doobsy said:


> Frank, as part of the CML info came from a post I made I thought I would comment.
> 
> 1. Under the terms and conditions the client (victim) also had a responsibility to CML and themselves to keep an eye on things.
> 
> ...




Doobsy,

_“1. Under the terms and conditions the client (victim) also had a responsibility to CML and themselves to keep an eye on things.”_

As I have already stated, it will be for the Court to decide on the degree of responsibility customers had for keeping their eye on things! I am happy to accept the decision the Court finally hands down in this regard although I am confident that they will find in our favour.

_“2. As previously discussed I personally think the imprudent lending claim will cover around 10% of storm clients. In most cases due to the fact that the banks, certainly the margin lenders, were working within legal framework at them time, will be found that the lending was in fact quite prudent and reasonable on information provided on the application forms.”_

Imprudent lending is about one tenth of our case so that sounds just about right.I suppose the Courts will ignore the dodgy paperwork and obvious churning of customers' assets. At least this will please the owner managers of the BOQ in North Ward who have been busy planning a "free-board-and-lodgings" vacation.

_“3. Goodridge had the ability to cover his margin loan. 90% of storm clients were completely tapped out.”_

In order to cover margin loans one has to know about them to start with? It’s a bit difficult if few were made. Judge Rares tends to agree.

_"Otherwise the client would simply not know what were the actions which should be taken to satisfy the margin call. Nor would the client know, in the absence of knowing a margin call existed, that actions were required to be taken in the first place." (per: Santow JA, with whom Gyles and McCole JJA, agreed).” _

_"4. Not that I have any direct exposure to any banking stocks but as a depositor I would hope that the bank put in place adequate protection before on-lending my money to others. Whether this be for a home, investment, vehicle, whatever. As such I am glad they were able to recover monies from parties they had lent to.”_ 

Adequate protection and prudent lending go hand in hand. Unfortunately, the Banks’ track record on _"imprudent lending"_ is appalling. The world today is a financial basket case because Banks around the world have lent money unwisely. Sub Prime is a classic example of this.

_“I think borrowers in most cases think the bank should be grateful for the business, it is the other way around, being lent money (other peoples savings) is a privilege that should be taken much more seriously than currently occurs in Australian society.”_

Doobsy, I now suspect you are having a lend of me! Without people borrowing money from banks, where would the banks be? They are not providing this service out of the kindness of there hearts but rather because that’s how they make their money. 

Here’s an article written about banks that may be of interest to you:

_“How Banks Work
The original idea of banking is you would give your money to the bank for safekeeping. They would lend some of it out, and give you a cut of the interest they received. In return the bank took the risk of the loan defaulting, and handling all the details of making the loans and collecting the payments. The bank attempts to lend money mainly to people who don’t need it since they have the best chance of paying it back, hence the invention of the credit card and minimum monthly payment.
The banks today don’t quite create money out of thin air to lend, but close.
Consider this simplified version. Imagine an isolated town with only one bank. Somebody comes into the bank and deposits $1000.
The bank then lends out $900 of that money to other people in the town. The borrowers of course keep the money in the same bank. Even if they spend it, say at the town lumberyard, the lumberyard will deposit that money back in the bank. So the bank still has $1000 on deposit, even though it also has $900 of it out on loan, generating interest for them.
So they lend $900 of the $1000 on the books out again. The government used to insist they keep some 8% of it on hand in case someone made a withdrawal. Since Brian Mulroney, the bank is not required to maintain any reserves at all, though common sense insists they have to keep some reserves to handle daily withdrawals.
The bank can lend the same money out over and over and over. This is equivalent to creating money.
This all falls apart if for some reason people start withdrawing money, since the bank doesn’t have the money. It is mostly out on loan. The bank has insurance to rescue them should they get an unexpected run of withdrawals.
The bank lends the borrowers money the bank does not really have, but the borrowers pay back with real money plus interest, quite a sweet deal for the banks.
The same process works even if there is a bank with two branches in the same isolated town, two independent banks, two independent banks in two towns, or 5 banks with hundreds of branches in an entire country. They work as a coordinated whole. Who gets the profits from which branches is irrelevant to this process of re-lending the same money over and over. I don’t mean re-lending the same money after a loan completes, I mean lending the same money over and over at the same time to different people.
If the banks could do the same thing with paintings, you could leave your fine art with them for safekeeping and they could rent that same original painting out to dozens of people at once. It would be considered a form of temporary counterfeiting.
The whole game depends on the fact that when people borrow money, they usually keep it in a bank, not necessarily the same bank, even though they are not strictly required to, so that it becomes subject to re-lending.
The right of the banks to lend out the same money over and over is equivalent to the right the print temporary money. Just like printing real money, this ability causes inflation. The more money there is, the less each dollar is worth. Many people, myself included, think there is no reason banks should be granted what effectively amounts to a get-out-of-jail-free-for-counterfeiting card. The ability to be the goose that lays the golden eggs should be reserved for the government. Otherwise it forfeits much of its control over the money supply and inflation."_ 

Even if only part of this is true, it doesn’t encourage me to share your sympathy for banks. We, their customers, are the ones that require sympathy if you ask me!


----------



## Julia (22 March 2012)

Frank Ainslie said:


> If the banks could do the same thing with paintings, you could leave your fine art with them for safekeeping and they could rent that same original painting out to dozens of people at once.



There is only one original painting.  How can it be rented out to dozens of people at once?


----------



## Judd (23 March 2012)

Julia said:


> There is only one original painting.  How can it be rented out to dozens of people at once?




Not only that Julia, it is my understanding that it was not banks involved but art dealers.  What happened in a number of cases is that a client bought a painting from a dealer (and a number of clients were SMSFs) and it was held in storage by the dealer.  It was then sold again to another client without the knowledge of the previous client and again still held in but held in storage and so on.  Quite a clever scheme.

Blowed why I know why the banks are supposedly to blame since they are not art dealers but note that the poster who made the claim has not cited any author or actual source for the allegations.  Also note that I rarely read the ravings of the poster but quickly skim over the mainly unsubstantiated claims.


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## Solly (23 March 2012)

Frank Ainslie said:


> <snip>
> 
> _“How Banks Work
> The original idea of banking is you would give your money to the bank for safekeeping. They would lend some of it out, and give you a cut of the interest they received. In return the bank took the risk of the loan defaulting, and handling all the details of making the loans and collecting the payments. The bank attempts to lend money mainly to people who don’t need it since they have the best chance of paying it back, hence the invention of the credit card and minimum monthly payment.
> ...





Hi Frank

I believe I understand where you are going with your above example. To me you appear to be commenting on that 'slippery slope' of the fractionalisation of money, the decree of fiat and the consequent impacts of M1, M2, M3, Money Supply.  I suppose it all works as long as there is trust and everybody sings from the same hymn book. Did someone mention "tulips"? 

S


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## doobsy (23 March 2012)

Rather than explain and argue on this I recommend that everyone try to find a TV series called the ascent of money done by Niall Ferguson.

Frank - When the bank lent you money for your first home, your first business loan, did you feel responsible to keep an eye on things? I suspect the answer is yes as you would have wanted to keep the house and business running and to establish a good credit rating. Why did so many ignore this responsibility just because it was for investment / speculation on the stockmarket? Because Storm said "she'll be right, we got this"? Pity

Again, Goodridge had money to meet the margin call if he had received it. He has a grievance. If Storm clients had got their margin call they had no money to meet the call in the majority of cases. All that would have happened would have been an earlier sell out. I have already put my position forward many times saying clients that were sold out should be considered to have been sold out at the correct time, not 3-8 weeks late.

If the bulk of clients can't claim imprudent lending, then why are we going through this process? It seems to be what the case is based on.

You confuse my banks lending paragraph. It is not the bank's money. It is MY money they are lending. As such I want to ensure MY money is protected from morons who want to borrow it to gamble on things they don't understand.


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## DocK (23 March 2012)

doobsy said:


> Rather than explain and argue on this I recommend that everyone try to find a TV series called the ascent of money done by Niall Ferguson.
> 
> Frank - When the bank lent you money for your first home, your first business loan, did you feel responsible to keep an eye on things? I suspect the answer is yes as you would have wanted to keep the house and business running and to establish a good credit rating. Why did so many ignore this responsibility just because it was for investment / speculation on the stockmarket? Because Storm said "she'll be right, we got this"? Pity
> 
> ...




Very nice!


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## bunyip (23 March 2012)

Julia said:


> There is only one original painting.  How can it be rented out to dozens of people at once?




 I don't like your chances of getting Frank to explain that one, Julia!


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## Julia (23 March 2012)

bunyip said:


> I don't like your chances of getting Frank to explain that one, Julia!



Ah, you have so little faith.


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## Frank Ainslie (23 March 2012)

doobsy said:


> Rather than explain and argue on this I recommend that everyone try to find a TV series called the ascent of money done by Niall Ferguson.
> 
> Frank - When the bank lent you money for your first home, your first business loan, did you feel responsible to keep an eye on things? I suspect the answer is yes as you would have wanted to keep the house and business running and to establish a good credit rating. Why did so many ignore this responsibility just because it was for investment / speculation on the stockmarket? Because Storm said "she'll be right, we got this"? Pity
> 
> ...




Doobsy 

_“Rather than explain and argue on this I recommend that everyone try to find a TV series called the ascent of money done by Niall Ferguson.”_

Okay! You have seen the program. Could you please explain where Banks get the money to lend and tell us what part of the article I quoted is wrong. I, and many others, I am sure, would be interested to know. If the writer of this article is off the planet, then this is your chance to defend the banks. In so doing, you are welcome to tear this article to pieces. Anyone else out there that can enliven us in this regard?

_“Frank - When the bank lent you money for your first home, your first business loan, did you feel responsible to keep an eye on things? I suspect the answer is yes as you would have wanted to keep the house and business running and to establish a good credit rating. Why did so many ignore this responsibility just because it was for investment / speculation on the stockmarket? Because Storm said "she'll be right, we got this"? Pity”_

Your postings seem at times ambivalent. On the one hand you claim some understanding of the position Storm investors found themselves in, and on the other you claim that they should have been more vigilant. The words _"morons"_ and _"gamblers"_ are creeping back into the picture. You might as well say, they should have never trusted a financial adviser to start with. I’m sure many ‘Stormies’ would agree with you on that one. 

I think you and many others tend to forget that we paid good money to have others keep their eyes on our investments. What do you think we were paying them for anyway? That’s what they were there to do, not us. Yet you and others constantly want to throw the blame back on us. So be it but if this is an indication of what people can expect when they invest using financial advisers, namely pay them to do something and then have to do it all yourself, what’s the point of employing them in the first place?

_“Again, Goodridge had money to meet the margin call if he had received it. He has a grievance. If Storm clients had got their margin call they had no money to meet the call in the majority of cases. All that would have happened would have been an earlier sell out. I have already put my position forward many times saying clients that were sold out should be considered to have been sold out at the correct time, not 3-8 weeks late.”_

Correcting this wrong as you suggest does not excuse the banks’ behavior in any way nor make it an acceptable solution. Neither does it address many of the other issues involved. Our lawyers will outline those issues for you in due course. Until then, I’m afraid you will have to wait for an answer.

_“If the bulk of clients can't claim imprudent lending, then why are we going through this process? It seems to be what the case is based on.”_

Really? Apart from imprudent lending and Banks issuing margin loans far too late or not at all, I though UMIS was in there somewhere; Banks churning money out of their customers in conjunction with Storm for mutual gain; Banks falsifying documentation such as the BOQ; Banks promoting Storm’s financial plan despite the risks; Banks assigning their contractual obligations that they have to their customers to Storm etc etc etc! I could go on but I've spent enough time on this already, and I have no intention of going over old ground. As I have previously stated, there are many aspects to this so trying to simplify everything is just not possible although you seem to be trying to do just that.

_“You confuse my banks lending paragraph. It is not the bank's money. It is MY money they are lending. As such I want to ensure MY money is protected from morons who want to borrow it to gamble on things they don't understand.”_

Deary me, Doobsy! It seems that you have retreated to the dark side once more. Are you now saying that all Stormies are morons who have a gambling habit? Is that what you are suggesting? It seems that the record wasn’t broken after all. Quite frankly I expected more of you because you work in the industry and have sought in the past to explain the _‘Stormies’_ possible mindset. But then, I forgot, you are one of them too!

Correct me if I'm wrong but we are talking about an industry that produced Storm and a number of other rogues that have put their clients’ interests last and their own first. An industry where people have taken their clients’ monies and squandered it. An  industry that has been ineffectively regulated and has been replete with financial kickbacks from Banks that have made anything they have said to clients in the past highly suspect because these financial advisers have their own vested interests. 

Quite frankly, we have never sought to label our financial advisers morons because they were too clever for that! However, they and the Banks associated with them did have a gambling problem and they had no qualms about using our money to satisfy it. 

To therefore now call us morons with a gambling problem is a bit rich. Rather, you should be calling Storm and these Banks for what they are - unconscionable villains. Shafting thousands of elderly people and by so doing, destroying their lives is what I term “unconscionable” in anyone's language. In your industry you probably use a euphemism for this such as _“unfortunate”_ or _“these things happen!”_ Where I come from, it’s called _“ripping people off”_ for all they are worth! 

As for _"the Banks protecting your money"_ comment you have made , that’s a joke. Banks have been extending dodgy loans all around the world for years now. How do you explain sub-prime or the financial woes that beset the world today because of it?  Guess who the culprits were then and guess who they are now? The Banks, who else! 

Anybody out there that can explain why the Banks shouldn’t be blamed for getting the world into a financial mess is welcome to join the conversation. Defend the Banks if you can but try to do it sensibly and state some verifiable facts. If the article I postedfor instance on the working of banks is a load of rubbish, prove it or forever “rest in peace!”


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## doobsy (23 March 2012)

Post didn't like my quotes so I took them out.

I never said that what you said was wrong. Read my post. What I said is that the program explains the process very well. I don't need to defend the banks, I do need to point out to the forum that should they simply follow your posts you must assume all banking activities are evil and all banks are out to simply rip off the unsuspecting.

Answer the question. Did you respect debt as a younger man and did you lost respect for debt? I know if I borrow money from any source that I respect that is not mine and it needs to be repaid. My references to gambling and morons are not storm specific, turn on ACA any evening and watch the multiple stories of people who choose to get themselves involved in things they don't understand and using other peoples money. Then they want to whinge when it doesn't make them all millionaires.

Do I understand the storm victims, damn straight, I am helping a number re-build their savings. Do I think they are blameless? No. 

As for your reference to my jumping between positions, take a look at your posts. One minute it is all the banks, next minute no adviser can be trusted. Is it one, the other or a combination? I can't work out who you think screwed you.

I want the blame apportioned appropriately. My wife had an investment with storm funded through a completely appropriate margin loan she could afford to service. Who screwed her? Storm did. Nothing the bank or in this case margin lender did was wrong.
She lost what was a small amount in the grand scheme but a reasonable amount in relation to her net worth at the time.

I have clients that no matter how you look at it the borrowing against the home was fine. Good jobs, other assets, etc etc. Nothing imprudent. You seem to want the forum to join your crusade under the assumption every storm client was screwed by the banks, I am here to ensure there is balance based on what I know and have seen.

Correcting this wrong as you suggest does not excuse the banks’ behavior in any way nor make it an acceptable solution. Neither does it address many of the other issues involved. Our lawyers will outline those issues for you in due course. Until then, I’m afraid you will have to wait for an answer.

Acceptable solution. I would think it is exactly what is acceptable if it is found that there was no other issues. If the lending is legit and the only thing that went wrong in the process was the margin call timing then fix that. 

Before you jump up and down please do note I am talking about the numerous clients that will fall into the "no imprudent lending" section.

Really? Apart from imprudent lending and Banks issuing margin loans far too late or not at all, I though UMIS was in there somewhere; Banks churning money out of their customers in conjunction with Storm for mutual gain; Banks falsifying documentation such as the BOQ; Banks promoting Storm’s financial plan despite the risks; Banks assigning their contractual obligations that they have to their customers to Storm etc etc etc! I could go on but I've spent enough time on this already, and I have no intention of going over old ground. As I have previously stated, there are many aspects to this so trying to simplify everything is just not possible although you seem to be trying to do just that.

Wow, UMIS we have talked to death. Falsification of docs by the banks? Have not seen proof of this yet but happy to be corrected. Falsification by storm HQ? That I agree but they aren't the bank.

Frank, yet again how is it you can type all that and somehow come away smelling of roses. I again refer to the top of the post where my opinion is that society has no respect for debt. Look at people spending on absolute crap on credit cards. They are spending other people's money. It needs to be paid back. They want a return for the right to use their money. They want the bank to protect their capital anyway possible and to provide them with that return. Morons? The world is full of them. People who sit at bbqs and get told about the latest stock tip by some bloke they met 20 minutes ago and yet are willing to blindly trust and put next weeks rent money on it. Been in the game long enough to see plenty Frank. 

No disagreement there Frank however the "world" runs under very different regulations to the Australian system and last I checked that was where you did your borrowing. APRA regulation of our banks is the reason we didn't have our own mini subprime here is Oz. 

There you have it another post where taking your life savings, borrowing the same amount of someone elses money to then invest it into an asset class that is highly risky and that you didn't really understand is not only all the banks fault but Storm aren't really the ones mostly to blame let alone getting onto what is personally prudent. 

Back to the start we go huh


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## Frank Ainslie (23 March 2012)

Solly said:


> Hi Frank
> 
> I believe I understand where you are going with your above example. To me you appear to be commenting on that 'slippery slope' of the fractionalisation of money, the decree of fiat and the consequent impacts of M1, M2, M3, Money Supply.  I suppose it all works as long as there is trust and everybody sings from the same hymn book. Did someone mention "tulips"?
> 
> S




Hi Solly,

The Banks have been getting away with things for years because the general public for the most part is content to live in ignorance until it affects them personally.

Some on this website don't seem to understand that Banks have too much power and control. Nor do they seem to comprehend that our class actions against these Banks are necessary not only to see that justice is done for us, but also to ensure that the Banks' powers are legally defined and restricted where necessary in the future. Further, the Storm collapse should be a watershed for the financial advisory industry! At least our experience at the hands of Storm will not be wasted because it led to new regulations that should, we hope, make it more difficult for financial advisers and banks  to act against the interests of their customers.

"Fractionalisation of money" as you quite rightly mention is a concept that many are oblivious too and the part it plays in modern banking. Here's part of an article on this and other practices that the banks employ. The full article can be found at http://www.basicincome.com/basic_banks.htm 

A book entitled _“Hand Over Our Loot!”_ by Len Clampett also makes for interesting reading. In fact that are many such writings on this subject because it's nothing new.

_"A Privatised Money Supply
Modern Banking and the Fractional Reserve System
[Figures and illustrations were current when written in 2002.]
Do you know where the bank gets the $160,000 for your mortgage?  It’s very simple.  Someone walks over to a computer and types 160,000 beside your name.  With only $27.93 of cash reserves for every $10,000 of assets (in Canada as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air.  When, after 25 years of hard work, you pay off your mortgage, the $159,553 vanishes back into thin air.  Not so the interest however.  It vanishes into the banker’s pocket.  Chartered (i.e. privately owned) banks, such as The Bank of Montreal, The Royal Bank, The CIBC, etc. have created about 95 percent of our total money supply ($589.1 billion as of Sept 1999) in exactly this way.  But the cash reserves in their vaults amount to only a paltry $3.893 billion.  (About $32 billion of cash circulates in public hands.)  This is called fractional reserve banking, and it’s the greatest scam of all time because it creates debt for no reason other than to enrich the banking class.  Its long term effect””as becomes clearer every day””is to steadily suck wealth out of the community and into the hands of a few people, a fact that bankers and most politicians stubbornly refuse to admit.  Charging interest on money created out of nothing is, in the main, unjust and immoral, and Plato, Aristotle, Cicero, the Bible (Deuteronomy 23:19), the Koran (2:275-278), the Catholic Church at various times, many codes of law and most writers on morals have condemned it for more than two thousand years. The historical name for this evil is usury.  Nevertheless bankers enjoy peace of mind because they know that the public thinks they merely lend out the savings of their depositors.  In fact, banks create more than 95 percent of all deposits, for when a bank creates a loan it simultaneously creates a deposit.  What banks do to justify the accusation of systematic economic exploitation is to lend out interest-bearing money of their own creation using a very thin sliver of legal tender (cash) to back it up."_


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## Julia (23 March 2012)

This is an aside from the current above, um, discussion.

I'd thought Storm investors were unique in being prepared to pay that massive 7%  for their advice/management.  However, I came across a bloke recently who had just extricated himself from the services of a local financial adviser to whom he was paying 7% p.a.  He was, via that adviser, only invested in managed funds and he had been losing money on these, so it can probably be assumed the adviser was also receiving commission from those investments.


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## doobsy (23 March 2012)

Julia said:


> This is an aside from the current above, um, discussion.
> 
> I'd thought Storm investors were unique in being prepared to pay that massive 7%  for their advice/management.  However, I came across a bloke recently who had just extricated himself from the services of a local financial adviser to whom he was paying 7% p.a.  He was, via that adviser, only invested in managed funds and he had been losing money on these, so it can probably be assumed the adviser was also receiving commission from those investments.




7% pa??

Wow, I better re-jig my fee schedule. I am clearly ripping myself off.


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## Julia (23 March 2012)

doobsy said:


> 7% pa??
> 
> Wow, I better re-jig my fee schedule. I am clearly ripping myself off.



Before you do that rejigging, doobsy, I should mention that the bloke was a real estate agent.  Make of that what you will.


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## Garpal Gumnut (23 March 2012)

Julia said:


> This is an aside from the current above, um, discussion.
> 
> I'd thought Storm investors were unique in being prepared to pay that massive 7%  for their advice/management.  However, I came across a bloke recently who had just extricated himself from the services of a local financial adviser to whom he was paying 7% p.a.  He was, via that adviser, only invested in managed funds and he had been losing money on these, so it can probably be assumed the adviser was also receiving commission from those investments.




Thanks Julia,

This is another good reason why financial planning should be taught in schools from Grade 5 onwards. A better educated population would be better able to resist these ripoff merchants.

gg


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## Judd (23 March 2012)

Garpal Gumnut said:


> Thanks Julia,
> 
> This is another good reason why financial planning should be taught in schools from Grade 5 onwards. A better educated population would be better able to resist these ripoff merchants.
> 
> gg




I was going to suggest a simpler solution which was hand each child a copy of Nick Renton's Understanding the Stock Exchange but there are two problems with this:

(a) I think it is out of print and a used copy goes for $164 on Amazon (my copy cost $40 in 2005); and

(b) most of the current crop of school students are unable to read much beyond Harry Potter.

Only joking obviously but, as has been said before, the curriculum is already pretty full (you can argue till your blue in the face about the merits or otherwise of the current structure) so the issue is:

(1) What do you drop in order to include financial matters; and

(2) What would the teaching profession know about financial matters, ie where are you going to get suitably qualified educators?  That aspect can take time and lots of it.


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## bunyip (23 March 2012)

doobsy said:


> My wife had an investment with storm funded through a completely appropriate margin loan she could afford to service. Who screwed her? Storm did. Nothing the bank or in this case margin lender did was wrong.
> She lost what was a small amount in the grand scheme but a reasonable amount in relation to her net worth at the time.




Doobsy

Would I be correct in assuming that your wife made her Storm investment before she met you?


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## Frank Ainslie (25 March 2012)

*The blame game!*

It seems to me that a recent event can best sum up the Storm Financial debacle and put to bed once and for all where the blame should truly lie as far as Storm and its clients were concerned.

I am, of course, referring to the Costa Concordia cruise liner which foundered off the coast of Italy with more than 4,000 people on board. When the passengers booked to go on this voyage, they naturally assumed that the Captain of this vessel was competent and would steer a safe course. How could they know any differently? They also assumed that the Captain would not place their lives at risk by show boating. 

_“When the Costa Concordia hit submerged rocks those passengers were told to sit tight for a good 45 minutes, crew told passengers there was a "technical problem" which caused the lights to go off. Seasoned cruisers, however, were concerned, and went to get their life jackets from their cabins.

Passengers complained they were not given sufficient instructions on how to evacuate, and, once the emergency became clear, lifeboats were not lowered until the listing was too heavy for many to be released. After the ship started listing badly, lifeboat evacuation was no longer feasible.

The procurators' office in Grosseto said that the Concordia hit submerged rocks at 9.45pm on Friday, and the last of the ship's complement were not evacuated until 3am yesterday, but that Captain Francesco Schettino allegedly left at 11.30pm
Survivors gave harrowing accounts yesterday of panic and confusion after the luxury cruise ship hit rocks off the island of Giglio, eight miles from the Italian mainland. They said that, with the ship listing so badly that a number of lifeboats could not be launched, some passengers and crew jumped into the sea, a few even swimming 300 metres to a nearby island. Others told of edging in the dark along corridors so tilted that they were crawling on walls rather than floors.

Observers are still mystified that the Concordia, with its modern technology, could founder so swiftly. It is not yet known if the accident was caused by human error, or by a power failure that disabled the ship's navigation systems. Captain Schettino reportedly blamed faulty charts for the accident. "We were navigating off the coast, along a tourist route, when the ship on a flank hit a rock not marked on the nautical chart," he told Tgcom 24 television. "In theory, that rock shouldn't have been there." Gianni Onorato, an executive with Costa, the ship's operator, said that Captain Schettino had the liner on its regular, weekly route when it struck a reef. "The ship was doing what it does 52 times a year, going along the route between Civitavecchia and Savona," he said.

One crew member told TMnews: "We were too close to the coast. It was definitely a terrible human error. We took the usual route, but when you go along the coast you use manual steering, not the automatic steering. So it is up to the captain to choose how close you get 

Questions are also being asked about the procedures on board. Passengers complained they were not given sufficient instructions on how to evacuate, and, once the emergency became clear, lifeboats were not lowered until the listing was too heavy for many to be released.

" Several passengers said that, for a good 45 minutes, crew told passengers there was a "technical problem" which caused the lights to go off. Seasoned cruisers, however, were concerned, and went to get their life jackets from their cabins.
"We had to scream at the controllers to release the boats from the side," said Mike van Dijk, 54, from Pretoria, South Africa. "We were standing in the corridors and they weren't allowing us to get on to the boats. It was a scramble, an absolute scramble."
Emily Lau, another passenger, said: "When we got to the deck, people were just utterly hysterical, mostly not because something was scary, but because there was no control. People were falling because the ship was actually sinking quite fast.
"The next thing we heard was 'abandon ship'. We had to embark on to our lifeboats, and people were rushing on to the lifeboats and there was no order of any sort. No one told us what to do."

After the ship started listing badly, lifeboat evacuation was no longer feasible. Five helicopters, from the coastguard, navy and air force, took turns airlifting survivors still aboard.

Whatever an investigation finally finds, the Costa Concordia tragedy has highlighted concerns about coping with emergencies on the new generation of mega-ships carrying thousands of passengers.

Mark Dickinson, general secretary of Nautilus International, which represents 23,000 ship masters, officers, ratings and other staff, said his organisation is concerned about the "rapid recent increases in the size of passenger ships" - with the average tonnage doubling over the past decade. Mr Dickinson said: "Many ships are effectively small towns at sea, and the sheer number of people on board raises serious questions about evacuation."

He added: "Insurers and salvors have also spoken about the way in which the sheer size and scale of such ships presents massive challenges for emergency services, evacuation, rescue, and salvage - and we should not have to wait for a major disaster until these concerns are addressed."

Simon Calder, The Independent's travel specialist, said last night: "Carnival's [Costa's parent company] immediate task, of course, is to care for passengers, crew and bereaved families. The International Maritime Organization will assess whether the safety regime on such floating fun palaces needs to be strengthened. But its owners must also address some difficult [business] questions. How will images of the stricken ship affect customer confidence? And can the 100 per cent occupancy, on which the cruise business relies, be sustained?"_

Questions:

1.	Were the passengers justified in booking this cruise?
2.	Were the passengers justified in placing their trust in the Captain of this ship?
3.	Were the passengers justified in waiting for an official order to abandon ship?
4.	Are the passengers now justified in claiming compensation?
5.	Were the passengers in a position to tell the Captain how to chart a course?
6.	Were the passengers in a position to know that the Captain had himself already abandoned ship?
7.	Were the passengers in a position to fully understand the extent of damage?
8.	Were the passengers liable in any way for what occurred?
9.     Were the passengers morons who had a gambling habit?

The passengers certainly can’t get compensation from the Captain who is now in prison. They can, however, get compensation from the owners of the vessel so is it immoral for them to do so if the Captain was entirely at fault?

Interesting! The parallels between this disaster and the Storm Financial disaster are unmistakeable. Yet, I am sure some on this forum will think otherwise. Therefore, I will be interested in seeing how you think our circumstances and those of the passengers on the Costa Concordia differ. Incidentally, lives have also been lost on our side too which makes the similarity even more pertinent.


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## doobsy (25 March 2012)

bunyip said:


> Doobsy
> 
> Would I be correct in assuming that your wife made her Storm investment before she met you?




Yes bunyip. As it was not my money no matter what my beliefs were it was her money to lose.


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## doobsy (25 March 2012)

Frank Ainslie said:


> Questions:
> 
> 1.	Were the passengers justified in booking this cruise?
> 2.	Were the passengers justified in placing their trust in the Captain of this ship?
> ...




Frank your analogy is:

1. EC & JC are the captain
2. Storm is the vessel owner

The question should be, if a third party, say a travel agent, recommended the cruise, said the product was reliable, the boat and captain had years of experience and that their belief was that it was definitely the pick out of all the ships in the area, ARE THEY TO BLAME FOR THE ACTIONS OF THE CAPTAIN? If they had an "Interest Free" pay after the cruise offer, should the passengers still have to pay the travel agent for selling a legitimate product or should they not pay because the captain Fk'd up?


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## maccka (26 March 2012)

doobsy said:


> Frank your analogy is:
> 
> 1. EC & JC are the captain
> 2. Storm is the vessel owner
> ...




Doobsy,

If this analogy was continued then to be more accurate the situation would be that the cruise was paid for up front by the passengers.  Parties and extra goodies were paid for by the travel company to sweeten the deal at little or no up-front cost to the passengers.  The disaster happened and the passengers were reimbursed their travel costs and then extra for distress and discomfort - legitimate product or not.

Cheers
Maccka


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## Garpal Gumnut (26 March 2012)

maccka said:


> Doobsy,
> 
> If this analogy was continued then to be more accurate the situation would be that the cruise was paid for up front by the passengers.  Parties and extra goodies were paid for by the travel company to sweeten the deal at little or no up-front cost to the passengers.  The disaster happened and the passengers were reimbursed their travel costs and then extra for distress and discomfort - legitimate product or not.
> 
> ...




And I, Garpal Gumnut, was in a tinnie, with the fourth Mrs Gumnut, a line in the water, listening to a Tom Waits CD, smoking a cohiba and keeping an eye out for crocs.

Seriously though, I take Frank's analogy, it is not a bad metaphor for how he sees what happened to him.

gg


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## doobsy (26 March 2012)

Garpal Gumnut said:


> And I, Garpal Gumnut, was in a tinnie, with the fourth Mrs Gumnut, a line in the water, listening to a Tom Waits CD, smoking a cohiba and keeping an eye out for crocs.
> 
> Seriously though, I take Frank's analogy, it is not a bad metaphor for how he sees what happened to him.
> 
> gg




GG I agree the analogy isn't bad, my thoughts are that yet again it comes back to who really should take the bulk of the blame. EC & JC have done a wonderful job of distracting everyone with smoke and mirrors from the fact that it was them making the decisions. They arranged the strategy. They arranged the extra LVR, they arranged that everything go via them lest a client tell someone at the bank their real situation, they chose not to order the sell down at any stage in the 50% market fall until it was forced onto them, they are the ones that were supposed to be able to monitor the "overall" situation with their $million software.

If I achieve nothing else on this forum I will achieve the fact that Storm HQ were the ones in charge of this schemozzle.


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## SJG1974 (26 March 2012)

I personally think the analogy is ridiculous.  The only thing you can compare is that both incidents left a trail of devastation.  How the devastation occurred is at polar opposites.

How can you compare the risk of going on a cruise with gearing to the gills and placing your life savings in the sharemarket?  There is no comparison.

Costa Concordia sank due to the actions of the captain who was drunk at the wheel.  It happened in a split second.  One minute there is no crash, the next there is.  There was no warning for the passengers that there was a high risk of this happening at any stage (yes there is a risk, but was it high?). And once there is a crash, you have a matter of hours to get everyone off the boat.  It is life and death for those few hours.

Compare to Storm.  Clients took a risk from day 1.  A big risk.  That’s what gearing into shares is.  On an investment risk scale of 1 to 10 its probably a 9.  And some simple research would have exposed the risks.  This risk is not comparable to jumping on a boat with a good safety history and going on a cruise. It is comparable to jumping on the old rusty boat at the harbour, with patches all over it, and a captain with his **** hanging out his pants, swigging beer from a bottle in a paper bag and him telling you “don’t worry, you will be safe with me”. And paying through the nose for it.  

Unless they were living in a cave, Storm clients could see that the sharemarket was going down…it went down for over 12 months.  Clients could see their life savings falling in value by the day.  This was not a complex strategy or some black box, not a ponzi scheme were returns were fudged….this was index funds.  If they chose not to look at it closely, that’s no one’s fault but their own.  If they chose to ignore their homeloan when assessing their portfolio, then that’s their fault, no one else’s.  You don’t just forget you have a $500,000 loan against your home do you?  Their financial devastation didn’t happen overnight, or in a matter of hours like the lives lost on the boat.  Stormers could and should have seen it coming. We hear about scrambled data at margin call time…well apparently it wasn’t scrambled until then, so the gradual loss of capital should have been obvious to anyone who bothered to take any notice. People didn’t go from “conservative” gearing ratios to negative equity overnight.

As this was a slow process, the Storm clients had the option to bail out and save what they had left….we have heard people who did just that.  Instead many increased the risk by gearing again and again when Storm told them to.  They could have said no at any time.  No one forced them to do anything….not the bank, not Storm.  Just because the bank offers you money, do you take it?  Just because an adviser tells you to do something, do you do it?  Stormers had choices.  How can anyone compare these choices, which clients had time to digest, research and make a decision on to those of passengers on a boat that is sinking and they have literally hours between life and death?

Again, how this can be compared to the captain of a ship crashing the boat is beyond me. Polar opposites in my book.


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## bunyip (26 March 2012)

Embarking on a luxury boat cruise is statistically a very safe activity.......hundreds, maybe thousands of boat cruises every year for the best part of a century, and the number that have come to grief is miniscule in percentage terms.
People booking a passage on the Costa Concordia or any other ship had no reason to believe they’d have anything but a safe and pleasant voyage.
Different story though if the plan was to sail the ship into a Category 5 cyclone....suddenly the safe activity becomes highly risky, a wild reckless gamble that’s inviting disaster. Nobody with any common sense would board the ship in that situation.

Stock market investment falls into the higher risk category, yet it can be done with relative safety if people employ some common sense by using modest levels of borrowing, investing in index funds, and managing their investment in accordance with market conditions. 
Different story though if the plan is to use a Storm – style strategy of mortgaging your home and borrowing to the eyeballs via margin loans and double gearing to triple or quadruple your stake in the market. 
Suddenly the relatively safe investment becomes highly risky – a wild reckless gamble that’s’ guaranteed to hit the rocks and end in disaster as soon as the inevitable bear market comes along.

The Costa Concordia had a very good chance of completing its cruise and arriving back at port safely. Nobody knew that the captain would indulge in highly risky and incompetent behavior that would produce such a disastrous outcome. Maybe the captain himself wasn’t even planning to behave in that way.

By comparison, the captain of the good ship ‘Storm Financial’ knew exactly what his behaviour was going to be before his passengers booked their cruise.....arrange for his clients to mortgage their homes and borrow like crazy, combine the borrowings with their personal savings, even cash out assets to add to the money pool, plonk the whole lot into the stock market, then hope like hell the market didn’t collapse. 
The strategy was outlined to clients before they signed on. 
Every prospective Storm client had the opportunity of evaluating and researching the strategy as much or as little as they chose. 
Some allowed themselves to believe it was safe and conservative. Others who looked into it properly saw that it was akin to sailing a ship into a Category 5 cyclone. 
The good ship ‘Storm Financial’ was always going to flounder on the rocks sooner or later.


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## Frank Ainslie (29 March 2012)

Some good news at long last!

We ‘_Stormies’_ may now have a reason to smile! A recent decision was handed down in the High Court of Australia that will impact on our cases if unregistered managed investment schemes can be proven. Our lawyers by the way are confident that such can be substantiated. 

Here's the case in question:

_“8 March 2012 - Today the High Court, by majority, dismissed five appeals from the Court of Appeal of the Supreme Court of Victoria, which had held that Ian Alexander Haxton, Robert Samuel Bassat and Cunningham's Warehouse Sales Pty Ltd ("the respondents") were not liable to repay funds advanced under loans held by Equuscorp Pty Ltd ("Equuscorp"). Equuscorp was not a party to the original loan agreements with the respondents, but was assigned the loan agreements as an arms length financier.

The respondents had invested in tax driven blueberry farming schemes promoted by Anthony and Francis Johnson ("the schemes"), by which members of the public could claim tax deductions for amounts invested in farming enterprises. The farming activities were conducted in north-east New South Wales. Under the schemes, each of the respondents executed a management agreement, by which Johnson Farm Management Pty Ltd, a company controlled by the Johnsons, agreed to perform the respondents' farm maintenance and harvesting obligations for an annual fee. Fees could be prepaid in whole or in part, and it was expected that these fees were tax deductible. Each of the respondents also entered into a loan agreement with Rural Finance Pty Ltd ("Rural"), a company also controlled by the Johnsons, to finance their prepayment of the management fees. Contrary to s 170(1) of the Companies Code ("the Code") of each respondent's home State, no valid prospectus in respect of the schemes had been registered when the respondents were offered what was a "prescribed interest" within the meaning of that section.

Rural executed a deed assigning to Equuscorp its interests under the loan agreements and the amounts of the debts owing ("the Deed"). The Deed was expressed to include an "absolute assignment" of the legal right to debts and interests under the loan agreements and "all legal and other remedies. 

Between November 1997 and March 1998, Equuscorp commenced proceedings against investors, including the respondents, under the loan agreements. Due to the breach of s 170(1) of the Code, the primary judge held that the loan agreements were unenforceable, on account of the illegality of the investment schemes. As an alternative to claiming under the loan agreements, Equuscorp sought restitution of the funds advanced as money had and received. In relation to that claim, the primary judge held that the respondents were liable to make restitution to Rural, and that the Deed assigned to Equuscorp the benefit of the respondents' liability to make restitution. On appeal, the Court of Appeal held that the right to claim for restitution had not been available to Rural and was therefore unavailable to Equuscorp, and, in any event, the Deed did not effectively assign such relief. Equuscorp appealed, by special leave, to the High Court of Australia. The scope of the appeals was limited to the availability of restitution; it was not disputed that the loan agreements were unenforceable for illegality.

The High Court, by majority, dismissed the appeals, with the result that the respondents are not liable to repay Equuscorp the funds advanced under the loan agreements. Equuscorp characterised its claim as arising from a "failure of consideration", contending that Rural had advanced funds under the loans on the basis that the agreements were enforceable. As that state of affairs did not exist, it was contended that the respondents would be “unjustly enriched” if they did not make restitution. By majority, the High Court rejected this submission, holding that an entitlement to restitution from the respondents would stultify the policy and objects of the Code, being the protection of investors in the position of the respondents. There was therefore no cause of action available for Rural to assign to Equuscorp. The High Court held further that, if Rural had a right to restitution, such a right was capable of being assigned to Equuscorp.”_

The term _“unjustly enriched”_ is a legal term denoting a particular type of causative event in which one party is unjustly enriched at the expense of another, and an obligation to make restitution arises, regardless of liability for wrongdoing. In the normal course of events, this would be a path that the Banks could go down if UMIS was proven in order to obtain restitution for the loans they extended. However, that avenue now appears to be closed to them by this decision. 

Our lawyers will be explaining fully the implications of this at a meeting being held in Redcliffe next Wednesday. However, it appears to me at this time (subject to what they have to say) that any loans ‘_Stormies’_ took out with the Banks could not be enforced if UMIS is proven.

The basis for this is grounded in the principles of the law of contract which are superior to the concept of _“unjustly enriched”_that the English Courts support but is not held in the same regard by Courts in Australia. 

Whatever, this Decision by the High Court is a substantive win for us, and a setback for the Banks.


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## Harleyquin (29 March 2012)

A lack of ethics by financial planners and their financial backers caused the problems with storm.  The bank spokespeople on this forum can come up with whatever excuses they like.  The fact is that these people had no ethics and still don't.


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## Frank Ainslie (29 March 2012)

*The good ship “Storm”*

I see that there have been some responses to my article about that cruise ship that hit rocks recently somewhere off the coast of Italy. For what it's worth, here are my answers to the questions posed. Bunyip and son are excused because they have not been able to see any similarities. Why doesn't that surprise me?

The operative word that springs to mind where this cruise ship is concerned and those in Storm is "confusion" because it reigned supreme in both cases. Chaos then ensued which resulted in the disaster scenario. 

With regard to the questions posed, I will now endeavor to answer such.

*1. Were the passengers justified in booking this cruise?*
The answer to that is, _“Of course they were because they had no idea, nor could they have, that the Captain would run the ship onto rocks.”_ People that invested in Storm were not gifted (as many on this forum claim to be) with hindsight. Nor did they have any reason to suspect that the advice they received was “high risk” and further, that safety measures were not in place to ensure their financial safety.

*2. Were the passengers justified in placing their trust in the Captain of this ship? *
Of course they were because one assumes that the captain of any ship is a responsible individual that would always act in the interests of his passengers. The fact is that the behavior of the captain of this cruise vessel could not be foreseen by anyone with the exception of God and Bunyip.  Likewise, the future behavior of Manny Cassimatis could not be foreseen by those that invested in Storm because he gave no indications that he was anything other than what he represented. He was after all a qualified financial adviser as were many of his colleagues; his company had a track record of success; Storm’s infra-structure was substantial ( or so we thought); they were one of the biggest financial advisory firms in Queensland, and they had the backing of major banks. Why would we not therefore put our trust in Storm Financial and it’s captain?

*3. Were the passengers justified in waiting for an official order to abandon ship?*
Of course they were! They had been told that the situation with regard to the ship wasn’t a serious one and there was no cause for concern. The passengers, who relied on the captain and crew of this vessel to supply them with truthful information, then quite rightfully assumed that everything was in hand and did nothing until the ship began to sink beneath their feet. We, _‘Stormies’_ relied on Manny and his crew to keep us up to date and abreast of what was happening. After all, that what we were paying them for and that is what we were entitled to receive. After all, we had placed our trust in that company to manage our financial affairs and had signed an agreement to that effect which imposes duties and obligations on both parties.  Storm did not fulfill its end of the bargain.
*
4. Are the passengers now justified in claiming compensation?*
Of course they are because the people that they placed their trust in and paid good money to sail aboard this ship did not carry out their responsibilities to ensure their safety. Instead they put the passengers in harm’s way. The same can be said of Storm and its clients. The people within Storm did not do what they said they would and so endangered and in some cases completely destroyed their clients’ financial well beings. Deaths in both disasters have occurred as a consequence.
*
5. Were the passengers in a position to tell the Captain how to chart a course*?
Everyone on board that ship would had some idea of where they were going because they would be fools to get on any ship if they didn’t know where it was bound. Further, they would have agreed to those ports of call beforehand before boarding. However, they all would have placed their trust in the captain to steer a safe course. The fact that he didn’t cannot therefore reflect in any way on any of the passengers because it was his job, not theirs to bring them safe home. 
The same can be said of Storm. We signed on with that company on the provisos that they we investing in a “low risk” venture  for a long voyage and adequate safety measures were built into the system that would protect our assets at all times from the likelihood of _"ending up on the rocks"_.  

*6. Were the passengers in a position to know that the Captain had himself already abandoned ship?*
Not unless they were in the same lifeboat as him! It would be unfair to say that Manny Cassimatis abandoned us but he did nothing to save us either. He will claim that it was the banks that were at fault for not honoring their agreements with Storm. However, they were his agreements with the banks, not ours! When he and the banks failed to act precipitously to save what assets we had left, they basically abandoned us to our fate.

*7. Were the passengers in a position to fully understand the extent of damage?*
How could they when they were being told lies by the captain and his crew for the sole purpose of reassuring people, keeping the real facts from them until it was all too late. The same thing occurred where the clients of Storm were concerned. _“Don’t worry! We have everything under control!. You leave it to us to do the worrying!” _and so forth. 
*8. Were the passengers liable in any way for what occurred?*
Of course not because they had no control over what actually occurred or the actions of the captain and crew that followed the ship's running up on rocks. Were we the clients of Storm to blame for any of this? Apart from a few on this forum that claim divine prescience, I doubt that any fair minded individual would hold us in any way accountable for the actions of those parties with vested interests that put their own  welfare first and ours last. 

*9. Were the passengers morons who had a gambling habit? *
If the passengers on this ship were subsequently categorized in such a way, think of the outcry there would be, and rightfully so. Yet some here have sought to label us as just that for investing our money using an investment advisory firm that had all the credentials, a record of safe investment,(they had been around for some years, not a few minutes as some on this forum would have everyone believe), a strong data base of clients (many of them prominent) and strong affiliations with such banks as the CBA.   

The only real difference between this example and us is that the Banks were heavily involved with Storm. Indeed, Storm would have been impotent without the assistance of banks who were willing to churn money out of Storm’s clients for mutual gain. Manny may have been the captain but the Banks employed him to serve their purposes. They gave him the money to build a fleet of ships so Storm and the banks could reap their mutual rewards. In any partnership, when one goes under, the other partner has to shoulder the blame. That’s the way the law works! It’s called justice I believe, or more correctly in this case, poetic justice!

Remember a passage from this article? _“Whatever an investigation finally finds, the Costa Concordia tragedy has highlighted concerns about coping with emergencies on the new generation of mega-ships carrying thousands of passengers.” _ The same can be said about double-gearing financial models such as Storm’s. They just cannot cope with major disasters.


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## Harleyquin (30 March 2012)

We have a more than reasonable idea how those passengers are feeling.  Which is more than I can say about some posters on here.  They will come up with every available excuse to try and take the spotlight off the real culprits.

Unless you were on that ship "storm" when it floundered against the rocks, you have no real idea what it's like.


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## SJG1974 (30 March 2012)

Why does there have to be a comparison?  Storm's situation is unique, even in financial disasters...we have seen the Madeoff affair, Allen Stanford, Westpoint, the collpase of Lehmanns and many more in the past few years.  All were different, but the similarity is all left a trail of devastation, just like Storm did.

We have seen Stormers compared to holocaust victims, rape victims and victims of the Costa Concordia crash.  What's next....the Japanese tsunami, September 11?  I can't wait to find out. Comparing apples with oranges.  Whats the point? Its ridiculous.

The analogy with the Costa Concordia is just as ludicrous as the claims that Stormers' CHOICE to invest EVERYTHING in a high risk strategy, and their CHOICE not to do independent research, and their CHOICE not to monitor their investments closely, and their CHOICE to believe everything Storm told them even though some had a gut feel all was not right, their CHOICE to accept the debt the bank threw at them, and their CHOICE to throw common sense out the window had nothing to do with their ultimate loss.


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## Harleyquin (31 March 2012)

SJG you've obviously made a CHOICE to try and divert the spotlight away from the perpetrators of this crime.  One wonders why???


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## SJG1974 (31 March 2012)

Harleyquin said:


> SJG you've obviously made a CHOICE to try and divert the spotlight away from the perpetrators of this crime.  One wonders why???




Wonder away HQ...I have been pretty clear from day dot about my view that people need to take responsibility for the choices they make...its a view that not too many seem to share around here, which is a sad reflection on society.  

I have also been clear in stating I have no vested interest in anything to do with this saga. But if you want to add my name to those of Storm, the banks, the FPA, ASIC, the government and anyone else who had conspired against you in causing your financial ruin, then be my guest....whatever floats your boat.


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## Solly (1 April 2012)

> *"ASIC action list lifts curtain on hits and misses*
> 
> Three financial advisers who invested hundreds of thousands of dollars of clients' funds in the Storm Financial investment scheme, which collapsed in 2009 owing $4.8 billion, also avoided any substantial legal action"




More by Anthony Klan @ theaustralian.com.au


Here are the enforceable undertakings referred to in the article: 

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136481.pdf/$file/025136481.pdf

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136480.pdf/$file/025136480.pdf

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136479.pdf/$file/025136479.pdf

Source: http://www.asic.gov.au/asic/asic.nsf/byheadline/Enforceable+undertaking+register:+list?openDocument


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## Solly (1 April 2012)

*When matters are next in Court*

Below are the dates and venues when proceedings ASIC have commenced in relation to the collapse of Storm are next in Court.

Proceedings are being held in public so anyone interested may attend.

5 April 2012
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


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## Frank Ainslie (1 April 2012)

Solly said:


> More by Anthony Klan @ theaustralian.com.au
> 
> 
> Here are the enforceable undertakings referred to in the article:
> ...




Thanks, Solly!

What's the sentence these days for robbing a bank? Yet, these guys rob their clients by misleading and deceptive practices and get a tap on the wrist? 

Question: _"Looking at the charge sheet, surely all the Storm Financial advisers could be accused, to a lesser or greater degree, of doing the same thing!" _After all, they all sold the _"Storm line"_ to their clients too. I wonder how ASIC differentiates one from the other when selecting certain individuals such as these? No doubt, Doobsy can enlighten us in this regard?

Could it be perhaps that complaints were only lodged by former Storm clients in relation to these individuals? Seems doubtful to me! 

Where ASIC is concerned, nothing surprises me any more.


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## Frank Ainslie (1 April 2012)

SJG1974 said:


> Why does there have to be a comparison?  Storm's situation is unique, even in financial disasters...we have seen the Madeoff affair, Allen Stanford, Westpoint, the collpase of Lehmanns and many more in the past few years.  All were different, but the similarity is all left a trail of devastation, just like Storm did.
> 
> We have seen Stormers compared to holocaust victims, rape victims and victims of the Costa Concordia crash.  What's next....the Japanese tsunami, September 11?  I can't wait to find out. Comparing apples with oranges.  Whats the point? Its ridiculous.
> 
> The analogy with the Costa Concordia is just as ludicrous as the claims that Stormers' CHOICE to invest EVERYTHING in a high risk strategy, and their CHOICE not to do independent research, and their CHOICE not to monitor their investments closely, and their CHOICE to believe everything Storm told them even though some had a gut feel all was not right, their CHOICE to accept the debt the bank threw at them, and their CHOICE to throw common sense out the window had nothing to do with their ultimate loss.




Hi SJG 1974

You are vexing to the spirit and no mistake!

_"Why does there have to be a comparison? Storm's situation is unique, even in financial disasters...we have seen the Madeoff affair, Allen Stanford, Westpoint, the collpase of Lehmanns and many more in the past few years. All were different, but the similarity is all left a trail of devastation, just like Storm did."_

Do you consider the individuals that were victims of these particular events _“greedy”_ or _“gullible"_ too or were they just unfortunate? That was a rhetorical question by the way because I already know your answer to this. Your mantra is unforgettable!

_We have seen Stormers compared to holocaust victims, rape victims and victims of the Costa Concordia crash. What's next....the Japanese tsunami, September 11? I can't wait to find out. Comparing apples with oranges. Whats the point? Its ridiculous._

Any argument that people present to you on this forum from our side would in your eyes be ridiculous because you have closed your mind long ago. This is evident because you concede nothing in your statements and insist that your position is the correct one and nothing else is worthy of consideration! I think it’s called being an _“unmoveable object!”_ Woe betide anyone if you ever get a jury ticket because you would have already made your mind up before the trial began and nothing would ever shift you. 

_The analogy with the Costa Concordia is just as ludicrous as the claims that Stormers' CHOICE to invest EVERYTHING in a high risk strategy, and their CHOICE not to do independent research, and their CHOICE not to monitor their investments closely, and their CHOICE to believe everything Storm told them even though some had a gut feel all was not right, their CHOICE to accept the debt the bank threw at them, and their CHOICE to throw common sense out the window had nothing to do with their ultimate loss._

What really are you and some others on this forum trying to prove by persisting with this line? Whatever the reason for any investor to invest in the share market, he or she has a right to be protected under the law. They also have a right to expect that all parties handling their monies will ensure that they do everything possible to safe-guard their assets. 

Your continuing attack on ‘Stormies’ when the real villains have been identified suggest to me that you resent anyone with more money than you and can’t wait to see them fall. Now you going to tell me how rich you are, no doubt!

Everyone is entitled to have their views and I respect that. However, your views are so jaundiced as far as ‘Stormies’ are concerned that they defy logic. What you seem to forget is that 75% of people that lost everything when Storm collapsed were past retirement age. They had been working all their lives to live their dream and leave something to their grand kids. To do this they had to make sacrifices along the way and much of this was in time spent to achieve their financial goals. They were certainly not as you and others have portrayed on this forum, _“money grubbing” _individuals that wanted to gamble with their futures. Helen and I are two of them! 

Incidentally, it could easily have been your parents that now find themselves in this mess! For that matter, it could easily have been anyone's. I wonder what your attitude would have been then? _"On no! My parents are different!"_

Therefore, I suggest that you get off your bandwagon and start directing the blame where it truly belongs. Unless you do, you will continue to support a corrupt society where Banks and rogues in the guise of financial advisers roam freely with the sole intent of pooling the wool over the eyes of the general public and shafting them for everything they have. 

The older generation didn't win their freedom and yours by fighting through wars and depressions to now have this society fleece them. That's why we are fighting now! It's called _"having a set of principles and values"_. Something that some of the younger generation of today could well do with!


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## Harleyquin (3 April 2012)

SJ you may be able to dismiss the lack of ethics by the financial planner and banks so easily by simply blaming their clients.  Personally I think it's about time that you and others like you accepted that they had a responsibility to their clients.


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## SJG1974 (3 April 2012)

OK let me be blunt.

1.	I do not for a second believe anyone who says they signed on to the strategy thinking it was low risk.  I don’t buy it.  To be frank, if anyone on this forum thought that double gearing into shares is low risk, then they are incredibly naive or liars.  And I don’t think people are that naÃ¯ve. 

And on that, just when did clients realise that their supposed low risk strategy was in fact high risk?  When their portfolio was down 10%, 20%, 30%, 40%, 50%, 60%?  When $1 million of investments had been turned into $100,000?  When did the penny finally drop? And what did they do about it?  Oh yeah that’s right, just stuck it out until the bitter end.  Yep, that makes sense.

2.	I also don’t believe people who say there was no carrot dangled in front of them.  People don’t pay hundreds of thousands of dollars in fees to simply receive financial advice.  You don’t pay hundreds of thousands of dollars in fees to have a third party protect the money you already have.  Go back through the website…it talks about putting you in touch with strategies that are the domain of the rich.  Again, I don’t buy it.

3.	Yes the strategy was flawed, but I also don’t entirely buy the line that Storm was out to fleece its clients.  We have heard that many Storm advisers invested in exactly the same strategy as the clients did. Why, if they KNEW the strategy was flawed would they invest in it themselves?  Why would they risk their own livelihood in undertaking the same strategy you did? I truly believe that they thought it was a legitimate strategy.  This makes them bad financial advisers…it doesn’t mean they were out to solely screw clients.

So where does that leave me? It leaves me believing that clients knew they were taking a risk with what they were doing.  They took the risk because the rewards on offer were so attractive. It doesn’t mean they were greedy, it just means they were prepared to take a risk to chase a better life.  A big risk. Risk vs reward…a concept as old as investing itself.

And now that they have lost everything, they “play dumb”…I didn’t know it was risky, I only wanted a conservative strategy, I didn’t want to make money, I only wanted to protect what I had.  Again, I don’t buy it.  Not for one minute. And you don’t keep believing it as your wealth gets eroded by the day over a 12 month period….as the debts mount and the investments fall.  Again, people aren’t that naÃ¯ve. 

Its kind of funny that throughout this forum Stormers have been passionate in questioning the motives of the banks and Storm in all of this, of the key players and how their reason for being is to screw people over.  They have questioned the truthfulness of the things key players have said.  Yet we are expected to believe everything Stormers have said about their motivations and involvement with Storm because they are the victims.  Again, to be blunt, just because people are “victims” doesn’t mean I believe everything they say, particularly when it flies in the face of common sense.

To repeat myself for the umpteenth time, IF the banks and/or Storm are proven in court to have broken the law, then I have no issue, NO ISSUE AT ALL with them paying the price for this.  NONE WHATSOEVER.  No matter what the industry, no matter what the company, consumers should expect that the laws will be followed.

I have no issue with people pursuing justice and compensation.  None whatsoever. I would do the same if I were in your shoes.

The thing for me is that the banks and Storm didn’t CAUSE 100% of  Stormers losses...clients agreeing to go ahead with a risky strategy and a small matter of a GFC played a very big role, yet people are prepared to blame them 100% for the losses they suffered. And I don’t think that’s right.

Stormers made the choice to take up the strategy.  They took the risk.  They stuck with a “conservative” strategy as their losses kept on building up over time when they could have jumped out.  They should be prepared to accept at least some responsibility for what happened…not full, but at least some, because everything they did, from taking on the strategy, to borrowing from the bank, to investing in shares, to sticking it out as their investments fell over time, it was their choice to do….no one else’s.


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## Frank Ainslie (3 April 2012)

To SJG 1974

_"OK let me be blunt.

1.	I do not for a second believe anyone who says they signed on to the strategy thinking it was low risk.  I don’t buy it.  To be frank, if anyone on this forum thought that double gearing into shares is low risk, then they are incredibly naive or liars.  And I don’t think people are that naÃ¯ve. 

And on that, just when did clients realise that their supposed low risk strategy was in fact high risk?  When their portfolio was down 10%, 20%, 30%, 40%, 50%, 60%?  When $1 million of investments had been turned into $100,000?  When did the penny finally drop? And what did they do about it?  Oh yeah that’s right, just stuck it out until the bitter end.  Yep, that makes sense.

2.	I also don’t believe people who say there was no carrot dangled in front of them.  People don’t pay hundreds of thousands of dollars in fees to simply receive financial advice.  You don’t pay hundreds of thousands of dollars in fees to have a third party protect the money you already have.  Go back through the website…it talks about putting you in touch with strategies that are the domain of the rich.  Again, I don’t buy it.

3.	Yes the strategy was flawed, but I also don’t entirely buy the line that Storm was out to fleece its clients.  We have heard that many Storm advisers invested in exactly the same strategy as the clients did. Why, if they KNEW the strategy was flawed would they invest in it themselves?  Why would they risk their own livelihood in undertaking the same strategy you did? I truly believe that they thought it was a legitimate strategy.  This makes them bad financial advisers…it doesn’t mean they were out to solely screw clients.

So where does that leave me? It leaves me believing that clients knew they were taking a risk with what they were doing.  They took the risk because the rewards on offer were so attractive. It doesn’t mean they were greedy, it just means they were prepared to take a risk to chase a better life.  A big risk. Risk vs reward…a concept as old as investing itself.

And now that they have lost everything, they “play dumb”…I didn’t know it was risky, I only wanted a conservative strategy, I didn’t want to make money, I only wanted to protect what I had.  Again, I don’t buy it.  Not for one minute. And you don’t keep believing it as your wealth gets eroded by the day over a 12 month period….as the debts mount and the investments fall.  Again, people aren’t that naÃ¯ve. 

Its kind of funny that throughout this forum Stormers have been passionate in questioning the motives of the banks and Storm in all of this, of the key players and how their reason for being is to screw people over.  They have questioned the truthfulness of the things key players have said.  Yet we are expected to believe everything Stormers have said about their motivations and involvement with Storm because they are the victims.  Again, to be blunt, just because people are “victims” doesn’t mean I believe everything they say, particularly when it flies in the face of common sense.

To repeat myself for the umpteenth time, IF the banks and/or Storm are proven in court to have broken the law, then I have no issue, NO ISSUE AT ALL with them paying the price for this.  NONE WHATSOEVER.  No matter what the industry, no matter what the company, consumers should expect that the laws will be followed.

I have no issue with people pursuing justice and compensation.  None whatsoever. I would do the same if I were in your shoes.

The thing for me is that the banks and Storm didn’t CAUSE 100% of  Stormers losses...clients agreeing to go ahead with a risky strategy and a small matter of a GFC played a very big role, yet people are prepared to blame them 100% for the losses they suffered. And I don’t think that’s right.

Stormers made the choice to take up the strategy.  They took the risk.  They stuck with a “conservative” strategy as their losses kept on building up over time when they could have jumped out.  They should be prepared to accept at least some responsibility for what happened…not full, but at least some, because everything they did, from taking on the strategy, to borrowing from the bank, to investing in shares, to sticking it out as their investments fell over time, it was their choice to do….no one else’s._

Okay! You have left no one in any doubt how you feel. You are entitled to your opinion and I think we must all respect that, daft as it appears to us in the present circumstances. Why do you therefore feel that you have to repeat this mantra ad nauseam? After all, you claim that its starting to tire you out! If you want to think this way, so be it! Frankly, who cares what you “buy” anyway? We certainly don’t! Give yourself a rest by all means because you thoroughly deserve one.

We, of course, are entitled to our opinion too and, needless to say, it doesn't agree with yours. 

Where Storm is concerned, my argument has always been that we _‘Stormies’ _had no reason to suppose that we could not TRUST Storm to do the right thing by us. We had no reason not to TRUST the advice that firm gave us. We had no way of KNOWING that Storm’s “triggerpoints” would not be acted on. We had no way of KNOWING that Storm would go against our wishes and place our assets at ‘_high risk’_. (This was not what we agreed to when we signed up with Storm - our agreement was for _"low risk"_ with "_growth over the long term_"). We had no way of KNOWING that Storm had formulated separate agreements with the Macquarie Bank and the CBA that would dictate how they all reacted in a crisis. We had no way of KNOWING that Storm’s emergency plans were non-existant. We had no way of KNOWING that Storm’s PI insurance wasn't worth the paper it was written on. We had no way of KNOWING that ASIC’s compliance audits were inadequate. We had no way of KNOWING that the Government’s regulations at that time in relation to the financial sector did not fully protect investors against the likes of Storm. Therefore, there’s no bloody way I’m going to concede that I or any other "Stormies' were in any way to blame for what these rogues and their accomplices, the Banks, did to us. They are all now in the dock, not us, and no one should forget this. If there’s any recriminations involved, it should lie squarely with them for using our assets for their own selfish ends.

I therefore suggest that you stop twisting the facts to suit your argument or deem to tell us what our motivations were when we signed up with Storm. Nor try to tell us what we did and didn't do at that time. How can you when you weren't there?

The enlightened ones on this forum that consider themselves far too intelligent to be taken in by Storm tend to forget that when we invested in Storm, that financial advisory firm had a track record; were sanctioned by ASIC; had affiliations with major banks; had a considerable data-base of clients; had sizeable assets; and were touted by all as a progressive financial advisory firm. We were assured that Storm had the latest software and systems that would keep them and us abreast of our financial position at all times. We now know that we were lied to from _"go to woe!"_. 

Today, the enlightened ones on this forum call us financial speculators that were blinded by greed. Why? Because they have the benefit of hindsight which, we all know, is a wonderful thing! It’s a pity that no one in the financial industry or ASIC voiced their concerns during the years before the Storm collapse so that we could have been warned well in advance?

You are now trying to paint a picture that is completely at odds with the facts. I therefore suggest that you take the time to read through the Worrells report, the PJC findings, the transcripts taken when the Banks' executives appeared before the PJC, the ASIC reports and so on. Nowhere in any of this documentation does it describe Storm's investors as _"high fliers" _and _"risk takers"_ and seek to lay some of the blame at their door! I prefer to rely on this body of evidence rather than consider anything you have to say seriously particularly when such comment is ill-informed.

Having one's head in the sand does not allow anyone to see what is going on around them. Then again, perhaps they prefer the sand to the truth anyway?

In the end the court will decide whether the Banks and Storm’s directors for that matter have a case to answer. Not you or anyone else on this forum! Therefore you can keep repeating yourself to you are blue in the face. It will have no impression on us because your opinion doesn’t matter one iota in the end. It's just your opinion and carries no weight at all. 

The only thing that matters to ‘Stormies’ now is our forthcoming court case. We will place our faith in the Law because at the end of the day it is there to protect people like us; not those that have done the wrong thing by us. We are content to let those that are better equipped to judge and decide who is right and who is wrong, laying the blame accordingly. I seriously doubt though that no matter what the outcome, any court will rule that we Storm investors were a bunch of _"risk takers"_ that deserved everything we got! Justice may be blind at times, but she will never be as blind as those that refuse to see on this forum, no matter what is said or the body of evidence that is presented to them.


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## doobsy (3 April 2012)

Opinion from the darkside

Having read the last 2 posts I think I can offer something.

Firstly

_Where Storm is concerned, my argument has always been that we ‘Stormies’ had no reason to suppose that we could not TRUST Storm to do the right thing by us. We had no reason not to TRUST the advice that firm gave us. _

No problem there, as a planner I can see the reasons people did trust Storm. It was all very slick and they had made sure the sales process ensured the ducks all lined up nicely.

_We had no way of KNOWING that Storm’s “triggerpoints” would not be acted on. _

No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.

_We had no way of KNOWING that Storm would go against our wishes and place our assets at ‘high risk’. (This was not what we agreed to when we signed up with Storm - our agreement was for "low risk" with "growth over the long term")._

There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily. 

_ We had no way of KNOWING that Storm had formulated separate agreements with the Macquarie Bank and the CBA that would dictate how they all reacted in a crisis. We had no way of KNOWING that Storm’s emergency plans were non-existant. We had no way of KNOWING that Storm’s PI insurance wasn't worth the paper it was written on. We had no way of KNOWING that ASIC’s compliance audits were inadequate. We had no way of KNOWING that the Government’s regulations at that time in relation to the financial sector did not fully protect investors against the likes of Storm. _

I agree

_Therefore, there’s no bloody way I’m going to concede that I or any other "Stormies' were in any way to blame for what these rogues and their accomplices, the Banks, did to us. They are all now in the dock, not us, and no one should forget this. If there’s any recriminations involved, it should lie squarely with them for using our assets for their own selfish ends._

That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses. Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum.

No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.

2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem.


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## doobsy (3 April 2012)

Just to stress a point to the rest of the forum about borrowing to invest

On some really simple calculations using Excel - based on end of financial year numbers for the stock market, home loan interest rates and margin loan interest rates, IF a client invested $1M on 1 July 2006 and borrowed $1M either through a home loan or a margin loan to add to that investment and the client simply rode out the markets (no margin calls, no buying or selling at any stage) then:

Growth/Loss in the investment + income from dividends - interest costs shows the client would be down $552,000 on their $1M if they used a home loan and about $650K if they used a higher cost margin loan.

To even get back to square 1 - Markets would need to rise to around 6100 points should they continue to pay the same dividend and interest rates remain at similar levels to now.

On 8% growth and 4.5% dividend this would take another 4 years. 

Result for the client - 10 years to break even in a market that has risen 20%.

It is amazing what happens when your first few years are non performing or worse go backwards when using borrowed money.


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## SJG1974 (3 April 2012)

Fair enough Frank. Fair enough.

We are at odds and that won't change.  No one has tried to put you in the dock. All I am trying to do is show that you made choices and most people take responsibility for the choices they make. If you don't think you should then fair enough. We have been through this so many times my head is spinning.  So lets leave that there.

You have a vested interest in this, I actually don't.  So I think the biases in all this are really coming from your side of the fence, not mine, given you have so much riding on it.

One final point I would like to raise, and question I would like to ask.  You and others have said ad nauseum that you thought gearing into shares was low risk.  As I have said, I don't know how anyone with your years of worldly experiences could possibly think that, despite what Storm or anyone told you.  Anyhow that’s by the by.

So you borrowed against your home, borrowed again through the margin loan, and plonked it all into shares....thereby investing your life savings in a "low risk" strategy (just read that again and see how ridiculous that all sounds- yet that is what you will have us believe).

As has been pointed out, the stock market didn't just fall off the edge of a cliff overnight, it fell over a period of 12 months. From the highs of late 2007, the market was down by 20% by the start of March 2008 (and given the powers of gearing, your portfolio would have been down by significantly more by then). 

I am guessing that you wouldn't expect to lose more than 20% in a matter of months by taking on a low risk strategy.  So you should have known full well by this time (and much earlier in reality) that this wasn’t a low risk strategy at all.  

*So my first question is, when did you start to realise that this low risk, conservative gearing to the gills into shares strategy was nothing of the sort? 

And secondly, upon realising it was not low risk (and given you have been very firm in saying you did not want a high risk strategy and didn’t think you were getting one) why did you elect to stay invested and to even increase risk by taking on more debt along the way? 

Why didn’t you bail out at the first sign that things weren’t what you had been led to believe they were?*


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## Harleyquin (3 April 2012)

It's all very well to quote all these wonderful figures in hindsight.  Storm did the same.  Those of you who seem to know or think you know what you're talking about all do the same thing.  You'll have to argue those points with the storm financial planners.

It certainly wasn't as simplistic as you choose to put it.  What proof have we got that you know what you're talking about.  Your long winded so called explanations mean nothing to me.


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## Garpal Gumnut (3 April 2012)

Confucius said.



> By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.




gg


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## Frank Ainslie (3 April 2012)

_doobsy;694705]Opinion from the darkside

Having read the last 2 posts I think I can offer something.

Firstly

Where Storm is concerned, my argument has always been that we ‘Stormies’ had no reason to suppose that we could not TRUST Storm to do the right thing by us. We had no reason not to TRUST the advice that firm gave us. 

No problem there, as a planner I can see the reasons people did trust Storm. It was all very slick and they had made sure the sales process ensured the ducks all lined up nicely.

We had no way of KNOWING that Storm’s “triggerpoints” would not be acted on. 

No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.

We had no way of KNOWING that Storm would go against our wishes and place our assets at ‘high risk’. (This was not what we agreed to when we signed up with Storm - our agreement was for "low risk" with "growth over the long term").

There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily. 

 We had no way of KNOWING that Storm had formulated separate agreements with the Macquarie Bank and the CBA that would dictate how they all reacted in a crisis. We had no way of KNOWING that Storm’s emergency plans were non-existant. We had no way of KNOWING that Storm’s PI insurance wasn't worth the paper it was written on. We had no way of KNOWING that ASIC’s compliance audits were inadequate. We had no way of KNOWING that the Government’s regulations at that time in relation to the financial sector did not fully protect investors against the likes of Storm. 

I agree

Therefore, there’s no bloody way I’m going to concede that I or any other "Stormies' were in any way to blame for what these rogues and their accomplices, the Banks, did to us. They are all now in the dock, not us, and no one should forget this. If there’s any recriminations involved, it should lie squarely with them for using our assets for their own selfish ends.

That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses. Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum.

No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.

2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem._

Hi Doobsy,

Need a light over there? On the dark side, that is!

_“No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.”_
Don't financial advisers have any responsibilities whatsoever? Why would we pay a fortune to Storm and then be expected to do Storm’s job for them? It was Storm’s business to manage our investments and advise us of the situation, not the other way around. If they had done so at the start, we could then have been in a position to take any remedial action Storm deemed necessary. Instead, Storm left it all too late and the rest as they say is history.

Is that what you do with your clients by the way? Take their money and then leave them to fend for themselves? Would you seriously expect your clients to act independently of you? People were certainly concerned at the time, but it would be fair to say that very few had any idea of what was going on at the end. Storm didn’t tell us until we were well under water.

_"That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses." _
Com’on! What would the average man in the street be expected to know about whether an asset class had a history of gains and losses? You can’t approach these issues based on your own personal knowledge of the financial sector. Rather, you must approach them based on what common folk are expected to know! You must be mindful of why people went to Storm in the first place.  They simply were not investment savvy (and that includes me) and relied entirely on Storm for guidance and advice. That’s why people employ financial advisers to start with because they lack the necessary knowledge to invest themselves. That's the wise thing to do although we are all lambasted now because we did just that. That’s what professionals are there for after all, and that is why they get paid.

Let’s turn this question around for the moment. Do you not think that Storm’s clients had the  right themselves to expect that Storm and the Banks had sufficient awareness of _“a certain asset class that has a history of gains followed by losses”_ and would expect them to use some prudence when recommending such? After all, Storm was giving the advice and the Banks were lending the money. By the way,  I see no mention by you of the fact that the Banks had no compunction about lending the money to Storm’s investors in the first place. Furthermore,  I don’t see anyone on this forum calling the Banks gullible for running such risks? 

Our lawyers, of course have an expression for this type of lending. It’s called “imprudent lending” which is in contravention of their banking codes. Just another misdeed among many that the Banks have been guilty of but whose counting?

_“There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily."_

Why? You and the rest in your industry bought it! I didn’t hear any cries of protest then! You and other people in the industry were quite happy to go with the flow when the markets were up. 

SJG1974’s claim that we were all seeking to make a quick buck in Storm makes no sense at all. You only have to look at the age of most of Storm’s clients to understand that they were elderly people that had no intention of gambling with their hard earned money that it had taken them a life time to earn. Rather, they were looking for a safe haven where there investments could grow over time. 

Helen and I were already rich. Why would we therefore risk our money in a _"high risk"_ scheme knowingly? Such a notion is completely ludicrous and defies logic. 

_"Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum."_ 

No one can deny that the GFC was ruinous for many people that had invested. However, if our case was based on this fact alone, the Banks and Storm’s directors wouldn’t be facing charges today. Therefore your choosing to use the words _“because you picked a bad time”_ is totally misleading and you know it.  

As for _"getting bailed out 100%" _you make it sound like a crime? Surely wrongdoers, be they the Banks, Storm or anyone else cannot expect that if they put everything right, it is then ‘okay’, and they can simply walk away without any form of punishment or obligation to pay compensation. We will have spent four years of our lives waiting around before these matters go to trial. What sort of compensation do you feel is warranted for placing us in this position to start with and then dragging this all out? Any compensation we get now over and above what we would have received at the time is not unjust in the circumstances. Wrongdoers need to be punished and their victims need to be compensated. That's the law. It's called Justice in some quarters.

If a motorist through his own fault runs over a pedestrian and breaks the legs of that person in so doing, should the person that has been injured only be compensated for his broken legs or should he also get compensated for time lost in his work, and pain and anguish?

_"No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.

2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem."_

“Any Stormie who is brave?” Okay! I’ll try and find the courage from somewhere!

With respect, the two questions you have posed are purely hypothetical and speculative. Therefore, they have no place in any discussion relating to our case.  We are not dealing in _"What ifs" _but rather in _“What actually occurred”_. We are not dealing in _“What we should have done”_ but rather “_What others did!_” This is all about what the parties responsible for handling our investments did at that time or more to the point, what they didn’t do. Trying to include scenarios that didn’t occur or draw conclusions based on our supposed behaviour is an exercise in futility and has no relevance to our legal position whatsoever. I suggest that we therefore stick to what actually occurred as opposed to dealing in suppositions.


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## Harleyquin (4 April 2012)

GG I've heard that Confucious quote before and love it.  We've all had time to reflect on what it has meant to be caught in this storm...and it's a well known fact that reflecting / writing reflective journals are a great way to cope with what life throws at you. 

One of my reflections is " if storm and the banks working along side them had the experience they were supposed to have then this shouldn't have happened"

Or perhaps another reflection might be " these people all had the experience they needed  to rip everyone of their clients off..". I could go on but I'll stop there!!!


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## Solly (4 April 2012)

I find it to be rather fruitless to be continually raising the issue of risk levels. To me qualitative subjective interpretations of risk assessment are meaningless. All positions contain risk and all have the potential for failure or success. It is an impossibility to retrospectively conduct a quantitative risk assessment model of this strategy where no baseline has ever been established, no results published or peer reviewed. 

The facts as presented to me by my Stormer mates about that the risks with this strategy were that they were; assessed, mitigated, transferred or avoided by the methodology and mechanisms that Storm had in place to monitor and preserve their investment. They held the belief that Storm possessed the required abilities to protect and grow their nest egg. That was their belief in the manner that the strategy was presented to them. These people are not financial experts, hold no formal qualifications in financial planning, economics or investing and sought the advice of qualified certified professionals. They held a more than reasonable expectation that their financial interests were being adequately managed. 

I have been wondering lately if it ever could be proven that some parties obtained a benefit through deliberate or reckless deception at the expense of the Stormers, it would interesting to see whether this could ever be tested. Although I have not as yet seen mention of any criminal charges being laid.

I also look forward to the further proceedings in the Brisbane Federal Court tomorrow regarding the UMIS.

S


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## Solly (4 April 2012)

> *"Commonwealth Bank drives investors into a Storm*
> 
> Associate Professor Evan Jones continues his exposÃ© on the Commonwealth Bank and its shady subsidiaries and partners, including an analysis of the Storm Financial debacle."





From: http://www.independentaustralia.net...monwealth-bank-drives-investors-into-a-storm/


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## SJG1974 (4 April 2012)

Frank,

I know you haven’t answered the questions I posed, and to be honest, I don’t expect you will.  But I would like to ask you a few things about your comments to doobsy…



Frank Ainslie said:


> _“No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.”_
> …………. It was Storm’s business to manage our investments and advise us of the situation, not the other way around. If they had done so at the start, we could then have been in a position to take any remedial action Storm deemed necessary. Instead, Storm left it all too late and the rest as they say is history.




So are you trying to tell us that you DID NOT KNOW that your portfolio was losing value by the day until the whole margin call fiasco at the bitter end?  You never received a statement from Colonial or Storm during 2008 that showed your portfolio value?  That you never logged onto the internet to check out how your investment was going?  That despite the almost daily front page talk of the GFC and the plunging stockmarket, you never once wondered what was happening to your money?

THAT YOU DIDN’T KNOW THIS LOW RISK STRATEGY WAS NOTHING OF THE SORT UNTIL YOUR SHARES WERE SOLD DOWN FROM UNDER YOU IN LATE 2008, WHEN YOU HAVE GONE FROM A MILLIONAIRE TO THE POOR HOUSE OVER A 12 MONTH PERIOD?  To borrow one of your phrases “Com’ on’.





Frank Ainslie said:


> _"That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses." _
> Com’on! What would the average man in the street be expected to know about whether an asset class had a history of gains and losses?




You have admitted previously that you understand how shares go up and down, so you are now claiming that you did not know that shares are volatile?  That you had never lived through sharemarket crashes before, that you had never ever been affected by sharemarket volatility? And again, that almost from the day you invested, despite the continued talk and media mania of a plunging sharemarket which you were invested in, you couldn’t put two and two together and realise that shares, the shares you were invested in, can actually fall in value? And furthermore, you never even bothered to check?

You see, even if I indulge your claim that you had no way of knowing that the strategy was risky from the start, because Storm sold it so well, then you should have known pretty quickly once your geared up portfolio started dropping in value from late 2007 that this was not a low risk strategy at all, that this strategy which was losing you money wasn't actually protecting your capital but eroding it.  And I am the one who has stuck my head in the sand?  

What were you doing during 2008 when you woke up every morning to news that the Dow Jones was down another 2% over night, and you watched the news every night to hear about how many billions of dollars were lost in the sharemarket that day.  Didn't you just once wonder what was happening to your portfolio during this time...just log onto the internet and check how it was going?

And yet you stuck it out to the bitter end. You stuck with something that you did not want to do until the bitter end. Why???   And you claim that you had no responsibility to check up on your own investments, that your losses were 100% the fault of Storm and the banks, when you could have pulled the trigger at any time and bailed out of the strategy which with each passing day was proving to be anything but low risk?

Heavens above.

Why???????


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## doobsy (4 April 2012)

Frank Ainslie said:


> Hi Doobsy,
> 
> Need a light over there? On the dark side, that is!
> 
> ...




No Frank I do not expect you to do Storm's job but I do expect you to take an interest in where your $1M was put. I expect my clients to know where their money that I invest for them is. If I get hit by a bus they need to know.

When in business Frank did you use a bookkeeper or accountant? Did you take their expertise and their word as gospel or did you read their reports and do some checking to make sure things looked ok? Never ceases to amaze me how diligent people will be checking some things and yet hand over $1M and never ask another question.

As mentioned this was not a fall off a cliff moment, it was a slow moving train wreck. HQ - PLENTY of people were talking about the fact markets were running too hot so I will not have it said that there was only one message out there and that was "shares are great"

My clients see me at least twice a year. My understanding is that Storm also ran regular seminars and client one on one review meetings. These were opportunities to ask hard questions. Was this the herd mentality again that stopped Storm clients asking these questions in a group environment in case they were made to look silly in front of the crowd?



> _"That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses." _
> Com’on! What would the average man in the street be expected to know about whether an asset class had a history of gains and losses? You can’t approach these issues based on your own personal knowledge of the financial sector. Rather, you must approach them based on what common folk are expected to know! You must be mindful of why people went to Storm in the first place.  They simply were not investment savvy (and that includes me) and relied entirely on Storm for guidance and advice. That’s why people employ financial advisers to start with because they lack the necessary knowledge to invest themselves. That's the wise thing to do although we are all lambasted now because we did just that. That’s what professionals are there for after all, and that is why they get paid.




I agree with why you went and used a planner. What I don't agree with is why you felt comfortable borrowing to invest into an area that from your quote above you and the other average man knew nothing about. Invest your own money and fine you can outsource all you want, but borrow and you have stepped into a whole new realm of responsibility in knowing what was going on.



> Let’s turn this question around for the moment. Do you not think that Storm’s clients had the  right themselves to expect that Storm and the Banks had sufficient awareness of _“a certain asset class that has a history of gains followed by losses”_ and would expect them to use some prudence when recommending such? After all, Storm was giving the advice and the Banks were lending the money.




That is like saying a used car salesman that knows a certain model of a certain make has a history of being a dud shouldn't try to sell it to you. It might be fine but it might be a lemon. The responsibility to be prudent was on Storm - the advice should have been prudent. They should all take a fall for that. The banks provided the funding, it is not their job to advise you to be prudent with the money, that is your and your advisers responsibility. If I tell a client to borrow money to buy some speccy mining stock and it goes to mud is that the banks responsibility? Again you base all argument on the UMIS that is yet to be proven. If the banks and Storm are shown to be far enough apart then the bulk of the responsibility will fall solely on Storm.



> By the way,  I see no mention by you of the fact that the Banks had no compunction about lending the money to Storm’s investors in the first place. Furthermore,  I don’t see anyone on this forum calling the Banks gullible for running such risks?




I see banks lending money to teenagers to buy cars, I see banks providing $10,000 credit cards to people with part time jobs, I see banks lending money for people to set up restaurants in tourist towns that will probably fail in 2 years time. I don't have a problem with the banks lending money to people that can afford it. Plenty of Storm clients could afford it. Not all. As for them being gullible.....not so sure, I'm pretty sure that to date they have got most of their money back.



> _“There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily."_
> 
> Why? You and the rest in your industry bought it! I didn’t hear any cries of protest then! You and other people in the industry were quite happy to go with the flow when the markets were up.




Really? Wow, nothing like using one of those sweeping generalisations that you seem to hate so much. I didn't gear any clients into the markets. I didn't have my retirees over exposed to growth assets let alone geared into them. I still have all my clients and they still have their money invested, producing income and the growth assets slowly coming back to more normal levels. Pretty sure out of the 50 odd planners I know in my area only one firm lost all of their clients money and went broke. I am sure some other planners were agressive as well and their clients will be down in value but they are still kicking. Gearing for the financial planning industry was a bit like the "would you like fries with that" for Maccas. An upsell to create more funds under management to charge fees on. It was widespread but there were plenty of ethical planners out there who did not promote the system and waltzed through the crisis pretty easily, me included. No sleepless nights here worrying about 50 clients with margin calls.



> _"Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum."_
> 
> No one can deny that the GFC was ruinous for many people that had invested. However, if our case was based on this fact alone, the Banks and Storm’s directors wouldn’t be facing charges today. Therefore your choosing to use the words _“because you picked a bad time”_ is totally misleading and you know it.




No I disagree, you put your money at risk. More risk than you wanted but you still wanted risk. If you didn't want risk you would have left it in the bank in term deposits. I think you deserve to take a loss, the same as EVERYONE ELSE. How big a loss the courts will decide I hope.



> As for _"getting bailed out 100%" _you make it sound like a crime? Surely wrongdoers, be they the Banks, Storm or anyone else cannot expect that if they put everything right, it is then ‘okay’, and they can simply walk away without any form of punishment or obligation to pay compensation. We will have spent four years of our lives waiting around before these matters go to trial. What sort of compensation do you feel is warranted for placing us in this position to start with and then dragging this all out? Any compensation we get now over and above what we would have received at the time is not unjust in the circumstances. Wrongdoers need to be punished and their victims need to be compensated. That's the law. It's called Justice in some quarters.




Great, see above. Not arguing alot of Stormies deserve some of their money back. I will however argue till blue in the face that they do NOT deserve to get 100% back let alone manage to get in front. My conservative clients had 10% share exposure. Markets are still down 30%, so they are down 3%, please enlighten me how you deserve to be in a better position that someone who was willing to miss out on "potential" upside to properly protect their capital.




> 1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.
> 
> 2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem."[/I]
> 
> ...




Gee that was brave, try answering a question asked of you.


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## Lone Wolf (5 April 2012)

Forget about who is right and wrong for a moment. The basic concept is that people thought it was ok to blindly trust a professional to invest their life savings for them and they lost everything. There are two ways to avoid this in future. One is to have tighter control over the actions of people who give out investment advice and investment loans. The second way is to educate potential investors on the importance of fully understanding the risks involved before handing over their money in the first place. 

Of the two above solutions, which is better? No matter how strict the regulations or how harsh the penalties, there will always be crooks trying to pull the wool over your eyes and take your money. So the best solution is to educate the people. However, why not have both solutions in place? 

SJG1974, bunyip, doobsy, Julia and others have tried to point out how people could avoid getting mixed up in these situations to begin with. But any attempt to do so is met with accusations of being a bank sympathizer or such similar things. From what I've read, none of these people are saying that Storm and the banks are innocent. It's abundantly clear that Storm was guilty and the banks will be judged in court soon enough. So the only thing left to discuss is investor education. Franks message to the world is that it's perfectly acceptable to blindly trust others with your money and that if you get conned into losing everything then you should be entitled to get it all back. The message we should be sending is, don't ever allow yourself to get into a position where you need to take legal action to get your money back.

A few posts ago Frank claimed that the Storm scenario is a very complicated matter that can't be fully understood by the general public. But then he goes and compares the Storm scenario to a holiday on a cruise ship. Then when he was asked two very important questions for an investor to consider, his response was "the two questions you have posed are purely hypothetical and speculative. Therefore, they have no place in any discussion relating to our case." Clearly Frank has his own agenda here and he will always steer the conversation his way and will never stray from his predetermined course. Part of the problem is that Frank has used his real name. There is absolutely no way on earth Frank is ever going to say anything that could be used against him. So asking him to admit that it was unwise to trust others with your life savings is futile. Even if he now believed it he wouldn't say it.

I don't mean to pick on Frank, it's just that most of the discussions here are based on trying to make Frank understand what he seems to be misunderstanding. But the fact is that you'll never change his attitude, he simply won't allow it to happen. He can't allow it to happen.

The other problem with trying to pin Frank down is that there are some stormies that have shown great strength of character in admitting that they made a mistake. Any further effort to point out these mistakes is just rubbing salt into the wound. After all that has been said, if anyone still believes that blindly trusting someone else with your life savings is an acceptable approach then they are beyond our help and will no doubt be parted from more money in the future. 

I said I'd forever stay out of this, but my reason for posting this is to make a suggestion. Maybe everyone can take a step back and consider what they hope to achieve here. It's easy to get very involved in these discussions, and I'm sure many people have poured many hours into considering the issue and responding to others. But don't forget your own life, if this discussion has gone as far as it can, maybe you have other things in life you could devote that energy towards. I stopped reading this thread and feel much better for it.

I don't want to discourage discussion, and if you are enjoying this then full steam ahead. Your input is appreciated by many I'm sure, but don't get swallowed up by a discussion that goes in circles and frustrates you.


----------



## Julia (5 April 2012)

Lone Wolf, that is probably the most logical and insightful post on this thread.


----------



## Frank Ainslie (5 April 2012)

Solly said:


> I find it to be rather fruitless to be continually raising the issue of risk levels. To me qualitative subjective interpretations of risk assessment are meaningless. All positions contain risk and all have the potential for failure or success. It is an impossibility to retrospectively conduct a quantitative risk assessment model of this strategy where no baseline has ever been established, no results published or peer reviewed.
> 
> The facts as presented to me by my Stormer mates about that the risks with this strategy were that they were; assessed, mitigated, transferred or avoided by the methodology and mechanisms that Storm had in place to monitor and preserve their investment. They held the belief that Storm possessed the required abilities to protect and grow their nest egg. That was their belief in the manner that the strategy was presented to them. These people are not financial experts, hold no formal qualifications in financial planning, economics or investing and sought the advice of qualified certified professionals. They held a more than reasonable expectation that their financial interests were being adequately managed.
> 
> ...




Having stood for five or so hours in Court today I am somewhat exhausted probably due to the fact that I am seventy and have a gammy hip that is severely aggravated by standing on it for too long. However, what can one do when one acquires a seat early on but elderly women haven’t? 

I couldn’t agree with you more! Going over the same ground is wearisome to say the least. However, there are some on this forum that will never be satisfied with any explanation we present to them because they view what occurred in simple terms and see the issues as _“black and white”_. Therefore, I do not intend to field any more questions from posters that want to focus on why we invested in Storm. I have explained our reasons for doing so and if this doesn’t satisfy them, too bad!

I’ll just say this and this will definitely be my last words as to our reasons why!

Some have said that because we ran a business and I have a background and training in corporate management, I should have been investment savvy and therefore not have invested in Storm in the first place. Further, they have stated that we should also have done Storm’s job for them by monitoring our investments rather than rely on Storm alone. Their argument is that we had run businesses for years and if we hadn’t kept our eye on things then, we would have been courting disaster.

In presenting such an argument they miss one essential truth! We _“managed”_ our businesses “_hands-on” _and reaped the profits. However, in the case of Storm, we were paying someone else to manage our affairs and expected, quite justifiably, I feel, that Storm would also adopted a hands-on-approach because that is what we were paying them for! Indeed, Storm’s SOA and the prospectus it published when it sought to become public confirmed its commitment in this regard.

Some have also argued that I should have been more astute than most where our investments were concerned particularly in view of my background. Again, because I was a professional in my field and have training in many areas including financial accountancy, I should have been doubly aware of the dangers inherent in Storm’s scheme._ “How come I was then fooled into believing that Storm’s financial model was sound.” _That’s exactly the point. If someone like me can be fooled, what hope did thousands of people have that had no background at all in such matters. 

The fact of the matter is that Storm’s financial model was sold to us basically as a fail-safe financial model because we were investing on a broad front in the share market and _“state of the art”_ monitoring systems were in place that would alert us when our shares prices fell to any large degree. This would then enable us to take any appropriate action that Storm deemed necessary. We were also told by Storm that any assets we had should be put to work. 

It is easy now for people to say now that Storm were a bunch of shonks and we should have known better. They tend to forget that Storm at that time was a financial advisory firm  of substance and there were no warnings in the market place stating otherwise. _"Why did we take Storm’s advice?"_ Because we were paying them a princely sum of money for, what we thought, was the best financial advice possible. How could we know then that we were getting _"monkeys" _because we certainly were not paying _"peanuts"._

Others on this forum have suggested that we were free to leave Storm at any time so why didn’t we? Again, they are seeing everything in simple terms. For one we had paid Storm’s fees in advance and they were considerable. For another, extracting oneself from Storm at the end of 2008 would have been no easy task. When we all found out the true state of affairs, by then it was all too late. The damage had already been done and we found ourselves having to meet margin loan payouts that had become swollen to the point where they were maxed out any beyond because no margin calls had been made by the Banks when they should have been. In the end days, Storm investors’ positions were sacrificed for the greater good! Namely, the good of Storm and the Banks who sought to protect what they had, which was _“a bloody good thing on their hands”_, by gambling that the markets would come good. The investors were left in the dark because of this, being assured constantly that everything was under control. It wasn’t!

Let’s not also forget that Storm always boasted of their considerable resources so we had no reason whatsoever to believe that that firm could possibly collapse. As I have said many times, Hindsight is a wonderful thing!

Then there are some that say that educating would-be investors is the answer. No, it isn’t! Making sure that investors are protected by adequate and effective regulations and ensuring that financial advisers have the necessary training and qualifications to provide investors with appropriate advice is the only way that one can safeguard investors’ interest. Further, these financial advisers need to be policed properly to ensure that they are complying with the regulations that are place.

Frankly, it is ridiculous to suggest that any would-be investors need to be educated because that is a role that should be in part carried out by their advisers. How can they possibly understand any advice they receive if they are not informed by their advisers why such advice is being given and for what reasons. Further, if people want to educate investors in terms of the market, where does it stop? Should the medical profession be educating patients? Lawyers be educating their clients? Bankers be educating their customers and so on? That’s what you employ professional for, so you don’t have to sit down yourself and learn what they already know.  In other words, let’s get real!

The issues in our case are simple enough. We, the victims of Storm and the Banks, maintain that we were wronged and ASIC, Worrells and the PJC support this notion. Therefore, the Banks and Storm have a _"prima facie"_ case to answer. 

The facts are straight forward enough:

We paid a financial advisory firm for financial advice and management of our investments. This firm had a duty of care to its clients which it did not fulfil. We are now suing the Banks because they combined with Storm to churn money out of us for their own ends, with total disregard to our financial well-being. Further, that when the GFC occurred, all parties involved did not take the appropriate action to protect our investment balances but rather sought to protect their own interests. As a consequence, we lost everything. That is the crux of the matter. Anything else is therefore totally irrelevant. If people on this forum want to think otherwise, that’s theirbchoice. For my part, I have better things to do with my time than continually try to justify my actions. Nor do I intend to.

Like you, Solly, I will drop in to this forum from time to time and answer any questions or comment on matters to do with our case that are relevant. However, I will not be responding to posters that have nothing new to say. There are those within our own ranks that require my support now and my focus will be upon them.

Solly! If your ‘Stormie’ mates need any support in the months ahead and have no where to go, put them in touch with me and I’ll include them in my Group. However, I’ll need to know that they have been recommended by you beforehand. Chou! Frank


----------



## Harleyquin (5 April 2012)

Solly I appreciate what you've posted in post number 7001.

It sums up accurately how the storm financial plan was presented to us.

It's nice to read the truth for a change instead of another inaccurate assumption.


----------



## Harleyquin (5 April 2012)

Lone Wolf any suggestion that the public should be financially educated with always have merit.  What doesn't have any merit at all is any form of acceptance that registered financial planners and banks can somehow be excused for not having the financial interest of their customers at heart.  When I pay for professional financial advice then that's what I expect and anything less than that is not acceptable.


----------



## Garpal Gumnut (5 April 2012)

Solly said:


> I find it to be rather fruitless to be continually raising the issue of risk levels. To me qualitative subjective interpretations of risk assessment are meaningless. All positions contain risk and all have the potential for failure or success. It is an impossibility to retrospectively conduct a quantitative risk assessment model of this strategy where no baseline has ever been established, no results published or peer reviewed.
> 
> The facts as presented to me by my Stormer mates about that the risks with this strategy were that they were; assessed, mitigated, transferred or avoided by the methodology and mechanisms that Storm had in place to monitor and preserve their investment. They held the belief that Storm possessed the required abilities to protect and grow their nest egg. That was their belief in the manner that the strategy was presented to them. These people are not financial experts, hold no formal qualifications in financial planning, economics or investing and sought the advice of qualified certified professionals. They held a more than reasonable expectation that their financial interests were being adequately managed.
> 
> ...




Thanks Solly,

I would agree with Harleyquin, that this is a good summation of the decision making precepts that drove many Storm investors.

It is a dangerous place, investing one's hardearned.

gg


----------



## Julia (5 April 2012)

Frank Ainslie said:


> Therefore, I do not intend to field any more questions from posters that want to focus on why we invested in Storm.



I've lost count of the number of times you've said this, and then lo, off you go again with another copy and paste of all the same stuff.  What's the point?  Who do you think you're convincing?  Other than yourself, I suspect no one.



> I’ll just say this and this will definitely be my last words as to our reasons why!



Again, you've said this many times before.
I can't fathom why you keep regurgitating the same stuff.



> It is easy now for people to say now that Storm were a bunch of shonks and we should have known better. They tend to forget that Storm at that time was a financial advisory firm  of substance and there were no warnings in the market place stating otherwise. _"Why did we take Storm’s advice?"_ Because we were paying them a princely sum of money for, what we thought, was the best financial advice possible. How could we know then that we were getting _"monkeys" _because we certainly were not paying _"peanuts"._



That's a completely irrational 'reason' to accept financial advice.
Why would you conclude that what is the most expensive is ipso facto the best?



> Others on this forum have suggested that we were free to leave Storm at any time so why didn’t we? Again, they are seeing everything in simple terms. For one we had paid Storm’s fees in advance and they were considerable.



So can you see now why they pushed you into paying that massive amount in advance?
It worked, didn't it?   If you'd only paid an annual fee, you'd have felt more able to use your own judgment I'd have hoped.



> Then there are some that say that educating would-be investors is the answer. No, it isn’t!



If you'd taken the time to acquire some basic financial literacy you would have been in a position to see all the holes in the Storm strategy, so to suggest education of investors is not worthwhile is just silly.

However, there has been a wealth of free information available for years and years.
It has not overcome the apathy and inertia of people who can't be bothered spending a little time absorbing it, even if just to be in a position of knowing whether they are being ripped off or not.



> Making sure that investors are protected by adequate and effective regulations and ensuring that financial advisers have the necessary training and qualifications to provide investors with appropriate advice is the only way that one can safeguard investors’ interest. Further, these financial advisers need to be policed properly to ensure that they are complying with the regulations that are place.



Certainly.  But however much you regulate an industry and police it for that matter, you will never eliminate shonks.  It will always be up to the individual to avoid such people.  Hence the above described need for personal financial literacy.



> Frankly, it is ridiculous to suggest that any would-be investors need to be educated because that is a role that should be in part carried out by their advisers. How can they possibly understand any advice they receive if they are not informed by their advisers why such advice is being given and for what reasons.



Why do you keep saying the same thing over and over?   Your argument makes no sense.  Instead, you should be saying  

"How can they possibly understand any advice they receive if they do not have the basic financial literacy required to properly assess this advice?"


----------



## Garpal Gumnut (5 April 2012)

I'd agree Julia, the Stormies were led in to this by a very slick show.

Being not financially educated they were grist for the mill.

gg


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## SJG1974 (5 April 2012)

Nice post Lone Wolf.  I think you have nailed it, and Frank's post following this has underlined your points perfectly.

You can't force the blind to see, we have seen that.  If people think that they can hand vast amounts of money over to a third party and take no notice or no real interest in what they are doing with it, then that's their problem I guess. Its odd how people don't believe they need to understand how their life savings are being invested, and yet these same people once its gone, spend so much time trying to understand how it was lost...its all a bit mixed up if you ask me. 

Yes advisers need to act in the best interests of their clients, but at the same time investors need to act in their own best interests by understanding what is being done with their money.  Common sense I would have thought, although this forum shows that sense isn't all that common.  

Anyway, as you pointed out we just keep on going around and around debating the same points. The sad thing is that despite what some would have us believe, this whole mess could have been avoided for so many people if they had have shown the fruits of their years and years of hard work more respect, both by taking the time to research and understand just how their money was being invested in the beginning, and taking an interest in how their investment was performing as it gradually fell in value over the 12 months of 2008.

My head is pounding from banging it against a brick wall for so long, so I take your point about concentrating on other, more healthy pursuits than arguing with the deaf.


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## Harleyquin (5 April 2012)

Sj storms clients did value their hard earned and also valued their retirement years by seeking professional financial advice to ensure that our savings were invested in the most cost effective way.  That's what I expected from a financial planner.  Nothing more nothing less.


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## Garpal Gumnut (5 April 2012)

Garpal Gumnut said:


> The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.
> 
> The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.
> 
> ...






SJG1974 said:


> Nice post Lone Wolf.  I think you have nailed it, and Frank's post following this has underlined your points perfectly.
> 
> You can't force the blind to see, we have seen that.  If people think that they can hand vast amounts of money over to a third party and take no notice or no real interest in what they are doing with it, then that's their problem I guess. Its odd how people don't believe they need to understand how their life savings are being invested, and yet these same people once its gone, spend so much time trying to understand how it was lost...its all a bit mixed up if you ask me.
> 
> ...






Harleyquin said:


> Sj storms clients did value their hard earned and also valued their retirement years by seeking professional financial advice to ensure that our savings were invested in the most cost effective way.  That's what I expected from a financial planner.  Nothing more nothing less.




I enclose a post above about a conversation of the deaf.

gg


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## Solly (6 April 2012)

> *"Storm row sparks calls for ASIC bank probe
> *
> A lawyer representing former clients of failed Queensland-based company Storm Financial says he has asked the corporate watchdog to investigate allegations against the Commonwealth Bank (CBA).
> 
> Lawyer Stewart Levitt has asked the Australian Securities and Investments Commission (ASIC) to look into claims surrounding key witness David McCulloch, who was a former Commonwealth bank and Storm Financial executive."




More from: abc.net.au


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## Solly (6 April 2012)

Frank Ainslie said:


> Solly! If your ‘Stormie’ mates need any support in the months ahead and have no where to go, put them in touch with me and I’ll include them in my Group. However, I’ll need to know that they have been recommended by you beforehand. Chou! Frank




Thanks Frank, I appreciate that, I will pass on your offer. Also I hear it was a rather packed day at the court. Unfortunately I couldn't attend due to my involvement in other matters. The reporting that CBA terminated David McCulloch's authority to sell some CBA products is an interesting event. I wonder what direction the proceedings will now take.

S


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## bunyip (6 April 2012)

Julia said:


> Why do you keep saying the same thing over and over?  * Your argument makes no sense. *
> Instead, you should be saying
> 
> "How can they possibly understand any advice they receive if they do not have the basic financial literacy required to properly assess this advice?"




Julia

It's pretty had to get any sense out of a bloke who's completely out of his tree. 

I burst out laughing when I read the latest gem about how the average man in the street couldn't be expected to know that an asset class like the share market has a history of ups and downs! 

Then again, possibly it’s _me_ who doesn’t have a clue when it comes to finance and investment – perhaps I can learn something from the sage advice and opinions expressed by certain parties on this thread. 
Maybe as soon as Easter is over I’ll start making moves to  'respect my money' by shoving all of it plus a huge pile of borrowed money into the stock market, then hope like hell the market keeps going up. My debt-free home - I'll mortgage it to raise even more investment funds.
As for those investment books and websites that I like to read, why waste my time on such a fruitless endeavor.  I’ve learnt on this thread that you don’t need any investment knowledge or education – that sort of stuff is the responsibility of the salesmen who sell investment schemes – they’re my most reliable source of knowledge if I ever want any information about investment.
But how about if they’re crooks – won’t I get conned? Hell no – I'll be able to rely on government legislation as my iron-clad guarantee that nobody can ever pull the wool over my eyes in investment matters.

Yep, I think I’ll get the show on the road by contacting the investment loans manager of my bank as soon as Easter is over. And with a bit of luck I can track down a firm of investment gurus, preferably one that charges many times the normal fees, just so I know that I’m getting quality service and advice.
I’ve done OK out of investment so far, but my past results will soon pale into insignificance compared to what I’ll achieve from here on by implementing a safe and conservative strategy of borrowing to the eyeballs to invest in the stock market.


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## Frank Ainslie (6 April 2012)

Solly said:


> More from: abc.net.au




Hi Solly,

The reason, I believe, why Stewart Levitt went public on this was because ASIC was not going to take any action on this matter. This is just one more example of ASIC favoring the CBA above the other Banks involved. This follows ASIC's refusal to hold the CBA responsible for anything other than UMIS despite the fact that the CBA was the worst offender with regard to the additional charges that have been leveled against the Macquarie Bank and the BOQ.

The whole thing stinks!


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## Ijustnewit (6 April 2012)

bunyip said:


> Julia
> 
> It's pretty had to get any sense out of a bloke who's completely out of his tree.
> 
> ...




Good Old Bunyip again . Thought you might go fishing over Easter? ( on this forum ).LOL


----------



## Klogg (6 April 2012)

bunyip said:


> Julia
> 
> It's pretty had to get any sense out of a bloke who's completely out of his tree.
> 
> ...




Hahahahahaha, this made me laugh so hard.

Nice work, bunyip!


----------



## bunyip (6 April 2012)

Ijustnewit said:


> Good Old Bunyip again . Thought you might go fishing over Easter? ( on this forum ).LOL




Looks like I've got a bite from a Flathead.


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## Harleyquin (6 April 2012)

I may not agree with some posters on this forum regarding the why's, how's etc of why we accepted storms advice pre collapse but I can tell you something for nothing and that is " I've learnt a hell of a lot about what not to do pro collapse".

If there are others out there in ASF forumland who are learning the same thing then that has to be a tremendous plus.

I think you will find very few stormies who have received anything back and are doing it REALLY tough.  The destruction to people's lives is hard to witness.


----------



## Garpal Gumnut (6 April 2012)

Harleyquin said:


> I may not agree with some posters on this forum regarding the why's, how's etc of why we accepted storms advice pre collapse but I can tell you something for nothing and that is " I've learnt a hell of a lot about what not to do pro collapse".
> 
> If there are others out there in ASF forumland who are learning the same thing then that has to be a tremendous plus.
> 
> I think you will find very few stormies who have received anything back and are doing it REALLY tough.  The destruction to people's lives is hard to witness.




I would second that Harleyquin.

Further when one is involved in litigation as the Storm investors are against the banks, it is unwise to even consider admitting that anyone except the banks are to blame.

I can understand why Storm investors are holding this line on the thread.

Go for the deepest pocket is a saying I believe in litigation.

And the Stormies are going for the banks, and my contacts in Martin Place, tell me that the CBA for one is hurting, and afraid of this litigation.

gg


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## Harleyquin (6 April 2012)

Thanks GG.  There may very well be some in the stormie ranks who believe that storm did nothing wrong.  I would think the majority of us know differently. As someone earlier in this thread said, storm was just another corner store operation until the big boys moved in with their cheque books.


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## maccka (6 April 2012)

SJG1974 said:


> My head is pounding from banging it against a brick wall for so long, so I take your point about concentrating on other, more healthy pursuits than arguing with the deaf.




     

SJG,

This point about pounding heads on brick walls seems to hold true for many of the posters on this forum.  Unfortunately it seems that the ears (commonly used for listening to others) seem to suffer first.

This is a poster that I have next to my desk at work.   I often find dark-ish humour one of the best ways to cope with things.




Image source: http://stuarth.com/2011/08/29/i-feel-like-banging-my-head-against-a-wall/

Happy Easter.

cheers
Maccka


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## Harleyquin (6 April 2012)

Love it Maccka you have a delightfully wicked sense of humour.


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## Julia (6 April 2012)

Harleyquin said:


> I may not agree with some posters on this forum regarding the why's, how's etc of why we accepted storms advice pre collapse but I can tell you something for nothing and that is " I've learnt a hell of a lot about what not to do pro collapse".



I don't understand what you mean above "pro collapse".  Perhaps you could clarify.

It's good to know that you have 'learned a hell of a lot".   Could you perhaps tell us what exactly you have learned?


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## Ijustnewit (6 April 2012)

bunyip said:


> Looks like I've got a bite from a Flathead.




I've got to admit that's comedy gold


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## Harleyquin (7 April 2012)

I think pro collapse is self explanatory and no I'm not prepared to talk about what I've learned.


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## Solly (7 April 2012)

> *"Storm witness pressure claims*
> 
> THE legal team in a class action against two of the three banks caught up in the Storm Financial debacle has asked the corporate watchdog to investigate allegations of intimidation against a star witness."




More by Rae Wilson @ sunshinecoastdaily.com.au


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## Julia (7 April 2012)

Harleyquin said:


> I think pro collapse is self explanatory and no I'm not prepared to talk about what I've learned.




Self explanatory?  If it were, I wouldn't have asked.

"Collapse" is perhaps self explanatory if we assume it means the collapse of Storm Financial.  But it's the 'pro' that has me puzzled, given its usual meaning is to be 'in favour of'.



> pro
> adverb
> 1.
> in favor of a proposition, opinion, etc




We'd hardly believe you were in favour of the collapse of Storm Financial.  Hence the question.


----------



## Garpal Gumnut (7 April 2012)

Solly said:


> More by Rae Wilson @ sunshinecoastdaily.com.au




Thanks Solly,

This may turn out to be more important than it seems from the few words expressed in the Sunshine Coast article.

I might book a spa or townhouse pool room at Lennons after all.

gg


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## Solly (7 April 2012)

Garpal Gumnut said:


> Thanks Solly,
> 
> This may turn out to be more important than it seems from the few words expressed in the Sunshine Coast article.
> 
> ...




Yes GG , 

It sure is looking more likely now. BTW there's easier access for your Arnage in Burnett Lane now. They've now stopped the lane closures for yuppies sipping caffÃ¨ lattes and playing lunchtime street chess.

S


----------



## Garpal Gumnut (7 April 2012)

Solly said:


> Yes GG ,
> 
> It sure is looking more likely now. BTW there's easier access for your Arnage in Burnett Lane now. They've now stopped the lane closures for yuppies sipping caffÃ¨ lattes and playing lunchtime street chess.
> 
> S




Thanks Solly, 

Probably one of the few good things to come from the GFC, less yuppies.

The porters at Lennons are such gents and ladies, I had to get them to move some BCC signs and bins last time so that I could swing in to the entrance to the underground car park. I did run over a yuppy foot, but as he was in a hopeless end game, i believe I did him a favour, as he was botching a winnable triangulation.

gg


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## Glen48 (7 April 2012)

Good God you ran over his foot????? no damage to the carriage I hope


----------



## Garpal Gumnut (7 April 2012)

Glen48 said:


> Good God you ran over his foot????? no damage to the carriage I hope




Thankfully none. I was a bit concerned about a court case as he wore a  "Reduce Greed" shirt, but he was so taken by the Arnage we settled on a free ride in the back with a Cohiba and some bubbly the next day. He is quite a good chess player and a nice fellow. Even though he is a Green, I may have converted him to capitalism. He tells me he still limps.

gg


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## Glen48 (7 April 2012)

Sounds like Al Gore may have been in the big smoke as he has just paid 9 extra large for a house on in Sunny Cal. supporting the RE business, he was smart enough to get an ocean view but well vertical above seas level.

 If the poor mans limp gets any worse suggest he can go as a toffee apple to the next fancy dress ball by sicking his gammy leg up his...... 

A set of these could be advisable:
http://www.ebay.com/itm/EMS-free-sh...arts_Accessories&hash=item416486d646&vxp=mtr#


----------



## Frank Ainslie (8 April 2012)

I see the “dogs of war” have been busy clamouring for a place in the “I am so clever and insightful” final. I’ll declare the winner next week.

It’s a real pity that ASIC (another dog that is all bark and no bite) did not have some of these enlightened ones working for it in November 2007. Perhaps they would have seen what ASIC couldn’t then? Oh, didn’t I mention this?

ASIC’s Belisa Jong sent the following email to Storm on 12th November 2007: 

_"I refer to our telephone conversation this morning and confirm that the following ASIC staff would like to meet with representatives of Storm Financial Group Limited ("Storm") at its North Sydney office tomorrow morning at 9.30 am: 

* Deborah Koromilas - Assist Director, Financial Services, Compliance 
* Elizabeth Korpi - Lawyer, Capital Markets, Compliance 

* Belisa Jong - Manager, Capital Markets, Compliance 

"Again during our visit, it would be helpful if a representative of Storm could take us through Storm's advice model (including the 'Client education process' and documentation provided to the clients) and explain how the Phormula Software System interacts with the services it provides to clients. 

In respect of the latter, we would also appreciate a demonstration of the Phormula System. At this stage, we envisage that the visit may take approximately 2 hours (or 3 hours at most)." _

It’s rather strange, don't you think, that no one from ASIC saw anything wrong with Storm’s scheme or systems at that time, before that time or after that time. After the Storm collapse ASIC became the white knight charging to our rescue, or was it more to cover their backside. You take your pick!

That's right! I forgot! Even blind Freddie could see through Storm's scheme! Perhaps we should send ASIC some white sticks with the name "Freddie" engraved on them.Then again, if someone had EDUCATED the people that carried out their compliance audits, then maybe we 'Stormies' would be still classified as "Normies".

Perhaps someone from the daft side would care to enlighten us by explaining why they expected us to see what ASIC couldn't? They will of course have an irrational explanation for this and expect us to swallow it as usual. Still, this one should be a doosey (I almost said Doobsy! I just can't wait!


----------



## Harleyquin (8 April 2012)

Maybe ASIC need some of the financial 'pros' on this forum as they can all see through storms model ...wonder if they could see through it pre collapse as well as they seem to be able to since the collapse occurred.

It never ceases to amaze me that all the experts have only come to the fore since storm went down the tube.

Seems we were the 'pros' pre collapse ie 'in favor of a proposition'

Now we have lots of 'pros' ie adverb for opinion... And lots of them.

Stay positive Frank and believe that everything happens for a reason.  Maybe good things fall apart so that better things can be put back together.


----------



## Garpal Gumnut (8 April 2012)

Harleyquin said:


> Maybe ASIC need some of the financial 'pros' on this forum as they can all see through storms model ...wonder if they could see through it pre collapse as well as they seem to be able to since the collapse occurred.
> 
> It never ceases to amaze me that all the experts have only come to the fore since storm went down the tube.
> 
> ...




My contacts in Levitt's tell me that this Storm Financial Group thread is a de rigeur first read before their morning staff meeting.

I am unaware of ASIC's modus operandi, and have no contacts there as I generally avoid muppets.

gg


----------



## Harleyquin (8 April 2012)

I'm also unaware of ASICs modus operandi.  Considering ASICs questionable past performances there are many who are left wondering if they are aware of their own modus operandi!

Maybe some of the more " knowledgeable / I could see right through that storm model from the very start" types who inhabit this thread would be best suited for a job with ASIC or any of the Aussie banks???


----------



## Julia (8 April 2012)

Harleyquin said:


> It never ceases to amaze me that all the experts have only come to the fore since storm went down the tube.



Why do you keep on repeating this?
I can't imagine why you think anyone who had nothing to do with Storm Financial personally would ever even have heard of the organisation:  a financial advisory service in a regional town in Queensland.
It was quite obviously only when the house of cards collapsed that the media picked it up and we learned what had happened.

Do you think we sit around wondering what to do with our time and think:  "I know:  I'll Google"



> *"Financial advisers promoting highly risky double gearing strategies for retirees*"



 and expect Storm's name to come up?

Further, what if - on having the 'strategy' presented to you, you had come onto this forum and outlined it, asking for views of members?
What do you think the responses would have been to the question:

"*I'm retired or about to retire and am considering engaging in a strategy where I will take out an equity loan for most of the value of my home, buy shares with these funds, and then additionally gear into the market by taking out a margin loan on those shares.  Is this a safe, risk free strategy?*"

There would have been some people here who would have shrugged and moved on to the next thread, basically in disbelief that anyone could consider such a plan.

But there would absolutely have been several people who would have taken the time to explain the huge danger in such a strategy and attempted to deter you from such massive risk.

The question is, HQ:  Would you have listened?
I doubt it.


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## Harleyquin (8 April 2012)

We're all very good at repeating ourselves on this thread Julia and you're one of the worst culprits.

You don't know me Julia so don't make hypothetical assumptions.  You have no idea what I would or would not have done.  Also if you'd been reading previous posts on this thread, you would know by now that the storm financial plan was not presented to us as you've stated.

I'm well aware that there are many of you who for whatever reason had never heard of storm until it collapsed.  I wonder why you now choose to take such an active interest in this thread and why you take every opportunity to try to belittle us for accepting financial advice with storm.  Who do you work for and what is your agenda Julia???


----------



## Julia (8 April 2012)

Harleyquin said:


> We're all very good at repeating ourselves on this thread Julia and you're one of the worst culprits.



Just responding to your comments.



> Also if you'd been reading previous posts on this thread, you would know by now that the storm financial plan was not presented to us as you've stated.



I fully appreciate that it was not presented to you as outlined above.  They clearly had a terrific line in spin.
That's why it would have been good for you to have put up the spin version on a forum such as this and someone would have interpreted for you what you were unable to discern yourself.
That is not a criticism.  It's just a simple fact.




> I'm well aware that there are many of you who for whatever reason had never heard of storm until it collapsed.  I wonder why you now choose to take such an active interest in this thread



Because it is a sad but interesting situation with many participants all attempting to prevail.  You may as well ask why the media continues to write about it.  
There is nothing sinister or peculiar in members of a stock forum being interested in a financial collapse where many people have been so affected.  



> .  Who do you work for and what is your agenda Julia???



Oh dear.  I don't work for anyone and have no 'agenda' other than as described above, i.e. a general interest in the outcome and whether that outcome dictates any changes in the industry in the future.

If you are due compensation, then I'll be happy to see you receive it.


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## Harleyquin (8 April 2012)

I was not aware that ASF existed until after storm collapsed.  I would have appreciated some advice back then.  I've admitted several times that my biggest mistake was believing and trusting.  You see a credited financial planner backed by Australia's largest banks and you feel that you're on safe ground.  Well today we all know differently or this thread would not exist.

Any compensation will be a plus obviously but more than that I want to know exactly what these banks were up to with storm financial.  If the problems were as blatantly obvious as you would have us believe Julia then all I can say is.  The banks have a lot to answer for.  This is no longer 'just about compensation" or " going after the banks because they have deep pockets".  This is about wanting the truth and personally I want to see them in court.  We haven't heard the truth yet.  

And don't forget whole families have been destroyed by this and suicides are still continuing.  You bet there are some in the banking fraternity that have a lot to answer for.


----------



## DocK (9 April 2012)

Tonight's episode of Four Corners, titled "Happy Banking", sounds like it could be quite interesting.  Do any of our "connected" thread participants know whether Storm Financial will be getting a mention?


----------



## Frank Ainslie (9 April 2012)

Harleyquin said:


> Maybe ASIC need some of the financial 'pros' on this forum as they can all see through storms model ...wonder if they could see through it pre collapse as well as they seem to be able to since the collapse occurred.
> 
> It never ceases to amaze me that all the experts have only come to the fore since storm went down the tube.
> 
> ...




Hi HQ,

ASIC is a shambles as it is without foisting the enlightened ones on it!

You’ll never convince some on this forum so it’s pointless trying. My father-in-law use to have a _“swipe list”_ which contained the names of those people whom he had cut out of his life. There are some on this forum (the _‘Queen of Hearts’_, the _‘Mad Hatter’_, the _‘Easter Bunny’_ and so on) who will give you a lot of grief if you let them! They will never change our opinions and we will never change theirs so why try? Best therefore to stick them on a swipe list and pretend they aren't there! They will soon tire of them own company!

Fortunately, there are others among us that may not agree with everything we say, but are willing to consider the issues on merit, weigh the facts, and present considered comment. Focus on those people and ignore the ones that just want to _"big note"_ themselves.


----------



## maccka (9 April 2012)

Harleyquin said:


> And don't forget whole families have been destroyed by this and suicides are still continuing.




The very human not so happy face of this and other financial disasters.


Maccka


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## Julia (9 April 2012)

Harleyquin said:


> I was not aware that ASF existed until after storm collapsed.  I would have appreciated some advice back then.  I've admitted several times that my biggest mistake was believing and trusting.  You see a credited financial planner backed by Australia's largest banks and you feel that you're on safe ground.  Well today we all know differently or this thread would not exist.



Totally accepted, HQ.  You don't know what you don't know, as Mr Rumsfeld so correctly observed.

The reason I asked you a few posts back if you'd be a bit more specific about what you say you've learned through all this was the hope that it would be to check out all information from any source.  You may choose not to believe this, but most of us so adamantly opposed to Storm's ultra risky strategy can still understand how some of you were sucked in by their apparently very clever spin.

Just please don't keep saying that any of us so criticising Storm should have spoken out before it all fell apart.  Most of us here were completely unaware of Storm and its manoeuvres.   Believe me, if you'd put up on here what they were suggesting, you'd have received outspoken warnings about proceeding.



> If the problems were as blatantly obvious as you would have us believe Julia then all I can say is.  The banks have a lot to answer for.



HQ, could you please try not to twist what I or others have said.  We have only said that the* strategy of double gearing into the stock market* is fraught with danger, especially for retirees.

I don't know what the banks did or did not do.  No one has ever made clear e.g. who provided the misinformation on the loan documentation.I don't want to rake all that up again and am just trying to stop the "you should have told us how risky it all was before it went bad" theme.  We couldn't because we knew nothing about it.


----------



## Harleyquin (9 April 2012)

When I say " if the problem were as blatantly obvious..." I wasn't referring specifically to you or in fact anyone in particular.  Who I'm referring to are those within the banking industry who were very much aware of the high risk strategy and not only funded it but in one instance provided storm with their own BSB number. What were these people thinking when they financed such a heavily criticized operation?  They knew they were putting people's financial lives at risk.  If you know that then so did they.  Of that you can be 100% sure.

The second issue you raise re who provided the misinformation.  None of us know for sure, we can only guess at this stage.  Either way it had to be storm or the bank or both.  If it was storm then, storm had to provide the bank with documentation to substantiate any information they provided and the banking code of practice is for banks to double check all claims.  Let's hope the truth about this comes out in court.


----------



## Harleyquin (9 April 2012)

I have found out first hand just how dangerous double gearing is Julia.  I don't think we need to be reminded of that fact.  Also there were a lot of other factors which have also been discussed.  What we were told would happen in a stock market crash didn't happen. We were told what safeguards were in place for one. We had no contact with any of the banks when storm applied for loans on our behalf and no correspondence warning us of risk.  These were all sent to storm.  At least this is how I see it.  If I'm wrong then we'll see what happens when evidence is presented.


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## Harleyquin (9 April 2012)

Hi Frank guess I'm saying 'could the enlightened ones have done a worse job..'

Thanks for info on the Swipe List love it and I apply this in some ways.  May just have to formalize it and apply it in every case.  I'll see how I go.  

Youve got some great Wonderland characters there Frank ...Alice will be pleased.  Happy Easter to you and Helen xxx


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## Julia (9 April 2012)

maccka said:


> The very human not so happy face of this and other financial disasters.
> 
> Maccka



Well, there will be a lot more 'human disasters' if people don't start taking some responsibility toward acquiring financial literacy.

Hopefully that would at least allow them to understand risk and not engage in schemes they don't understand.

I'd have thought such constructive pursuit of education would be a bit more productive than year after year of the sort of accusations and recriminations that have now been repeated dozens of times on this thread.


----------



## Julia (9 April 2012)

Harleyquin said:


> You bet there are some in the banking fraternity that have a lot to answer for.



Again, you (and others) seem to place your entire focus on the banks, rather than Storm.   It was Storm who sold you on the massively risky scheme.


----------



## Garpal Gumnut (9 April 2012)

Julia said:


> Well, there will be a lot more 'human disasters' if people don't start taking some responsibility toward acquiring financial literacy.
> 
> Hopefully that would at least allow them to understand risk and not engage in schemes they don't understand.
> 
> I'd have thought such constructive pursuit of education would be a bit more productive than year after year of the sort of accusations and recriminations that have now been repeated dozens of times on this thread.




As I've said before, Julia, financial literacy needs to be taught from the age of 10 in schools. Giving each child a Savings Account with incentives for savers, and educating them on the options for later in life would be a start.

It won't help the Storm victims, but their grandchildren and great grandchildren may benefit.

Believe me, another Storm will occur.

gg


----------



## Julia (9 April 2012)

Garpal Gumnut said:


> As I've said before, Julia, financial literacy needs to be taught from the age of 10 in schools. Giving each child a Savings Account with incentives for savers, and educating them on the options for later in life would be a start.
> 
> It won't help the Storm victims, but their grandchildren and great grandchildren may benefit.
> 
> ...



In an ideal world, yes such teaching would occur in schools.  However, as long as it doesn't, and as long as so many teachers are amongst the most financially illiterate adults I've ever met, it's up to individuals to learn what they need to.

People go and do courses on basket weaving, public speaking, writing their life histories and heaven knows what else, but they apparently don't find it necessary to get some understanding of something that's absolutely fundamental to a secure existence.

Just beats me.


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## SJG1974 (9 April 2012)

Julia said:


> People go and do courses on basket weaving, public speaking, writing their life histories and heaven knows what else, but they apparently don't find it necessary to get some understanding of something that's absolutely fundamental to a secure existence.
> 
> Just beats me.




Great call Julia. And further, you have people who claim they don't have the time to worry about their finances. I have met people who have said this very thing, yet they spend 2 hours every night after work in front of the tv. You make time for something as important as your own finances...so many people seem to have their priorities completely screwed up.

There really is no excuse now for people to not even have a basic understanding of shares...almost every working Australian has exposure to them via super, the markets are quoted in the press every single day, and with the wealth of information freely available, people need to know and understand where their future is invested. Ignore or disrespect your finances at your own peril.


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## bunyip (9 April 2012)

Quite apart from availing ourselves of the abundance of  finance and investment education that’s freely available, I’ve found that just simply listening, watching and observing, and above all remembering, has been invaluable education.

For example, the 1987 market crash was an excellent lesson in what the stock market is capable of dishing out to us. It was on every news broadcast as it happened, including the stories of investors jumping out of windows of high rise office or apartment blocks when they found out they’d been wiped out overnight by margin calls. Yet so many people, when presented with the Storm strategy, failed to properly consider what effect another 1987-style crash would have on a 1 million or 2 million dollar market portfolio that was largely funded by margin loans.

Every single day, whether we want to or not, we read or hear news of the stock market – headlines such as ‘20 BILLION DOLLARS WIPED OFF AUSTRALIAN MARKET AS INVESTORS ARE SPOOKED BY EUROPEAN DEBT CRISIS’. This sort of headline is telling us loud and clear that the market is subject to sudden plunges. Yet we still we have people making stupid comments suggesting that ordinary people can’t be expected to know that the stock market has a history of downs as well as ups.

Another example was the Asian financial crisis in 1997, which of course affected Australia – another excellent lesson in finance and investment, but only for those who observed and remembered and took an interest. 

ASIC is another example - many Stormers felt confident in the Storm strategy because it was ASIC-endorsed. Yet ASIC had been in the news for years beforehand for their dismal performance in spotting and closing down dodgy investment schemes. Given their well-documented history of poor performance, ASIC was hardly an orgainsation to inspire confidence in investors. Simply reading or listening to the news and absorbing and retaining the information, would have made people aware of ASIC’s shortcomings.

In short, we can learn a heck of a lot about investment just by watching and listening and keeping abreast of world events, daily market reports, and such like.
Whether we’re interested in doing so or not, we should make ourselves do it for our own benefit. 
I’m not much interested in computers, and I didn’t learn them at school, but for my own benefit I did a short computer course so I’d know how to use them.
Women might not be much interested in martial arts, yet many have done self defense courses so they can handle themselves if necessary in a dangerous situation. 
I’m not much interested in motor mechanics, but I did a short course so I’d at least have sufficient knowledge to do basic repairs and maintenance on my vehicles. 
My kids are not interested in becoming racing car drivers, yet they all did defensive driving courses so they know how to handle dangerous driving situations, or avoid getting into dangerous situations in the first place.

If Storm investors had taken more of an interest in getting themselves investment-literate by using the many free resources available, and by observing and learning from world events, they may well have avoided getting sucked into a highly risky investment scheme that was passed off as safe and conservative. 

In this day and age, there's just no reasonable excuse for getting near retirement age without having learnt the basics of finance and personal investment.


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## Harleyquin (9 April 2012)

Julia you've taken so much of what I and others have said and twisted it around to your own advantage.  I have never said that my focus is solely on the banks.  Again I ask who do you work for and what is your agenda as it's become very obvious that you have one.

You and your like minded on this forum are prepared to ignore the shortcomings of the financial planner and bank with your ludicrous claims that we have to take responsibility for this.  That's ridiculous.  We paid for their financial expertise.

I'm actually watching 'Four Corners' and there's a very interesting story on Bank West and CBA and the criticisms of the banks is on a par with our experiences.  It's called 'unhappy Banking".  To quote something from this program "we can't have a David and Goliath situation where the boys from the big end of town ride roughshod over the little bloke". That's exactly what they've done and are continuing to do.

Interesting too that the CBA bought Bank West at exactly the same time they closed storm down.  These bankers have no interest in the little bloke he is purely a cash cow to them.  They have a lack of ethics and morals and that needs investigating thoroughly.  Why are you willing to excuse the banks for their obvious shortcomings Julia???  Do you work for one of them???


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## Harleyquin (9 April 2012)

Bunyip and SJ you are as bad as Julia.  You are prepared to excuse the shortcomings of those who work in the financial industry and blame those who paid for their financial expertise.  Not good enough.


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## Garpal Gumnut (9 April 2012)

Harleyquin said:


> Julia you've taken so much of what I and others have said and twisted it around to your own advantage.  I have never said that my focus is solely on the banks.  Again I ask who do you work for and what is your agenda as it's become very obvious that you have one.
> 
> You and your like minded on this forum are prepared to ignore the shortcomings of the financial planner and bank with your ludicrous claims that we have to take responsibility for this.  That's ridiculous.  We paid for their financial expertise.
> 
> ...




HQ I have just watched 4 Corners, some serious questions to be answered by CBA and BW.

gg


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## Julia (9 April 2012)

Harleyquin said:


> Julia you've taken so much of what I and others have said and twisted it around to your own advantage.



To my own advantage?  What, exactly, advantages me in this situation?  It doesn't affect me.  I have no advantage or disadvantage to gain or lose.
You are now being pretty ridiculous HQ.  I have tried to be patient and polite with you.  I've even acknowledged that Storm's line of spin was so good that I can see how you were taken in by it.  Despite the fact that many were not because they had some level of investigative capacity.

I've not responded to your silly, childish prattle about Easter stories etc because it's just too silly, but you are now being simply foolish and rather hysterical.




> I have never said that my focus is solely on the banks.  Again I ask who do you work for and what is your agenda as it's become very obvious that you have one.



Oh for god's sake, I'm a self funded retiree.  I took retirement in my 40's because I could afford to.  I don't have to work for anyone.  Get it?  Don't work at all.
So get over your stupid obsession and unfounded accusations.



> You and your like minded on this forum are prepared to ignore the shortcomings of the financial planner



What???   Here is what I said earlier:


> It was Storm who sold you on the massively risky scheme.




And you now tell me I am ignoring the shortcomings of the financial planner.
For god's sake, think about what you're saying.

As a separate issue I only saw a small amount of the Four Corners program where a couple bought a motel.  Prior to finalising the purchase they *did not actually inspect the premises*.
Why on earth would anyone take out a loan for millions of dollars and not know exactly what they were buying!!!

Isn't there a theme here?


----------



## Julia (9 April 2012)

Harleyquin said:


> Bunyip and SJ you are as bad as Julia.  You are prepared to excuse the shortcomings of those who work in the financial industry and blame those who paid for their financial expertise.  Not good enough.



Just put up the posts where Bunyip, SJG or I have ever advocated on behalf of or excused the personnel of the financial industry.  On the contrary.  We have all at various times pointed out the self interest of the financial industry.

So get over yourself and stick to reality instead of making up silly accusations which have no foundation in fact.


----------



## SJG1974 (9 April 2012)

Harleyquin said:


> Bunyip and SJ you are as bad as Julia.  You are prepared to excuse the shortcomings of those who work in the financial industry and blame those who paid for their financial expertise.  Not good enough.




Unfortunately HQ, those who work in the financial sector aren't/weren't the only ones with shortcomings. If they were, YOU wouldn't have double geared into investments you didn't understand.


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## bunyip (9 April 2012)

Harleyquin said:


> Bunyip and SJ you are as bad as Julia.  You are prepared to excuse the shortcomings of those who work in the financial industry and blame those who paid for their financial expertise.  Not good enough.




Really???
Show me one post, just one, where I've excused the actions of Storm. 
Show me one post where I've said the banks are blameless.
Show me one post, just one, where I've attempted to lay the blame entirely on Storm investors.

If you can't do that, which you most definitely cannot, then stop making a fool of yourself by talking like a twit.

Your problem is that you don’t have the strength of character to admit that quite apart from the shortcomings of the banks and Storm, you too displayed serious shortcomings. And whether you realise it or not, your shortcomings went much deeper than simply being too trusting.


----------



## bunyip (9 April 2012)

And HQ – just in case you’re dumb enough to suggest that _*I*_ work for a bank – I’ve been retired since the age of 42, although I don't really consider myself retired, due to the fact that I spend 15 minutes a day at my computer  ‘working ’  in my own investment business. Although to me it's more like recreation than work.
I assure you, I don’t work for anyone except myself.


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## Frank Ainslie (10 April 2012)

What a cowardly bunch we have on this forum. They will gang up on people like 'Harlequin' and bombard them with cant, and yet they duck and weave when they are asked questions themselves. They always put such in the _"too hard basket"_ and hope the rest of us don't notice. Unfortunately, you are not getting away with it that easily this time!

Answer the question you were asked! 

*EXPLAIN WHY YOU EXPECTED US TO SEE THROUGH STORM'S SCHEME WHEN ASIC COULD NOT?* 

Now what part of the question don't you understand? Should I repeat it again?

Until you do answer this fundamental question, stop talking a load of rubbish! Stop trying to convince us that you know better than anyone else. Stop with all this nonsense! You may be fooling yourselves, but you are certainly *NOT FOOLING US.*

Your failure to give us a meaningful answer to this question blows any argument you have that we were foolish to invest using the services of Storm _"out of the water" _ 

There was no reason why ordinary investors would be any more aware than ASIC were about Storm (After all, ASIC is the Regulator for God's sake!) You know this to be true  and we know it to be true because it would defy belief to think otherwise.  Indeed, anyone with a modicum of commonsense will know this.The fact that there are some on this forum that can't see this speaks volumes for their level of mentality!

When all is said and done, Storm was one of the largest financial advisory firms in Australia and it was legit. So I would ask the enlightened ones to stop trying to convince people that Storm was running some backyard operation staffed by _"fly-by'night" _operators that had only been around for a short time. Your spiel is becoming more asinine by the minute.

IF you can come up with a reason why ASIC could not and we should have, we would dearly like to hear it. If you can't then please stop talking through the top of your heads. Please stop presenting arguments that have no basis in fact. Please stop telling us that we were stupid. Instead, spend your time writing to ASIC. It will be more productive than wasting our time reading through specious comment that is designed to pervert the truth.

So, what is it? Are you going to answer the question I have asked or are you going to slink away to your burrows and appear again when the coast is clear?

I say, _"answer the question you have been asked or get out of the kitchen"_, and stay out until your powers of reasoning are up to the job.


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## maccka (10 April 2012)

Garpal Gumnut said:


> HQ I have just watched 4 Corners, some serious questions to be answered by CBA and BW.
> 
> gg




http://www.abc.net.au/4corners/stories/2012/04/05/3471045.htm

Here is the link to the 4 Corners show.

Cheers
Maccka


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## DocK (10 April 2012)

Garpal Gumnut said:


> HQ I have just watched 4 Corners, some serious questions to be answered by CBA and BW.
> 
> gg






Julia said:


> As a separate issue I only saw a small amount of the Four Corners program where a couple bought a motel.  Prior to finalising the purchase they *did not actually inspect the premises*.
> Why on earth would anyone take out a loan for millions of dollars and not know exactly what they were buying!!!
> 
> Isn't there a theme here?




I too watched Four Corners last night - found it quite enlightening.  Perhaps, Julia, you shouldn't comment on a show that you haven't watched in its entirety.  The couple you mention above, while undoubtedly were gullible in purchasing a motel without making a thorough inspection themselves, relied upon the specialist broker who "found" the deal and the valuation undertaken by Bankwest that valued the motel at the purchase price.  Bankwest just happened to be fallling over themselves to get into the East coast market and lo and behold their valuation of a commercial enterprise failed to uncover what the purchasers also failed to uncover.  If this valuation had been done correctly the loan would never had been made.  But the story doesn't end there - this couple sold every other asset they could and built the motel occupancy rates up from nothing to almost match the fake figures used to support the purchase price and bank's val'n, didn't miss an interest payment along the way, only to have Bankwest under the new ownership of CBA revalue the motel at a vastly lower figure and demand an immediate lump sum payment as they were then in breach of their LVR.  They effectively did the same thing to the other people featured on the show.  It would be akin to the bank lending you $400K to purchase a $500K house, revaluing it at the height of the GFC at $400K and demanding an immediate payment of $80K or selling you up for being in breach of your LVR even if you hadn't missed a payment!

No doubt the show has its own agenda, but the message that came across loud and clear to me is that at the height of the GFC, the Ralph Norris led CBA was focussed on clearing its books of any areas of lending that were deemed risky, despite the human fallout.  It appears the areas that Bankwest had been actively pursuing, and the clients they had wooed, were seen as nothing more than human collateral by their new owners who simply made a boardroom decision to exit the market in higher-risk lending areas and were prepared to use any means to extract themselves - with no regard for ethics, prior agreements or the human cost.  All this while enjoying the protection of a tax-payer funded Govt guarantee.  

I have no doubt that there are many who cry foul at the banks who have no case.  I also have no doubt that there are many who certainly do, but to date have had no chance in a David vs Goliath battle.  It's time for Australia's banks to be made more accountable for their actions imo.  Saying it's simply a commercial decision and we're looking after our shareholders is simply not good enough when you're making the profits they're making, enjoying "too big to fail/endangered species" Govt protection - while also holding a position of such power over the population.  The big four need to be more accountable to the people of Australia in return imo.


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## Julia (10 April 2012)

DocK said:


> Perhaps, Julia, you shouldn't comment on a show that you haven't watched in its entirety.  The couple you mention above, while undoubtedly were gullible in purchasing a motel without making a thorough inspection themselves,



And that is the only point on which I remarked.  It is not for you to tell me what I may or may not comment on, especially when you apparently agree on the single point I was making, i.e. their failure to physically inspect the property they were buying.


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## SJG1974 (10 April 2012)

Are you serious Frank? 

This has to be one of the more bizarre posts you have written…and believe me, you have written some absolute doozies that still have me scratching my head in bewilderment.

Let me get this straight.  You want people to answer a question you pose? Aren't you the same guy who I and others have asked countless questions over the journey, in fact countless questions over the past week or so, and you have refused to answer them?  

Aren’t you the guy who, to borrow your words, ducks and weaves when you are asked questions yourself?  Aren’t you the guy who puts them in the too hard basket and hopes the rest of us don’t notice?  

Are you that same guy Frank? Because if you are, then I find it odd...actually much more than odd...for you to say things like "Answer the question you were asked" when you can't do the same yourself. 

Amazing.  Simply amazing.


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## DocK (10 April 2012)

Julia said:


> And that is the only point on which I remarked.  It is not for you to tell me what I may or may not comment on, especially when you apparently agree on the single point I was making, i.e. their failure to physically inspect the property they were buying.




Ah, somehow I just knew that Julia would get the ruler out to rap me over the knuckles once more???? 

The point I was making is that even though a person may not have made the best decision, or done thorough research, does this then give a bank carte blanche to act as unethically, immorally or illegally as they wish?  The couple in question may have made a mistake - but they were doing everything in their power to make a go of it, and had not defaulted until the bank made their situation impossible for its own purposes.


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## bunyip (10 April 2012)

DocK said:


> Ah, somehow I just knew that Julia would get the ruler out to rap me over the knuckles once more????




Oh I don't know - the way I read it, you attempted to rap Julia over the knuckles in the first instance, and she simply responded.


----------



## bunyip (10 April 2012)

Frank Ainslie said:


> What a cowardly bunch we have on this forum. They will gang up on people like 'Harlequin' and bombard them with cant, and yet they duck and weave when they are asked questions themselves. They always put such in the _"too hard basket"_ and hope the rest of us don't notice. Unfortunately, you are not getting away with it that easily this time!
> 
> Answer the question you were asked!
> 
> ...







LOL! Gee Frank, I thought you said you were going to ignore us in future. I thought you said you weren't going to talk to us. I thought you said you wouldn’t be posting on here any more. And yet here you are, coming back time after time!

I have no idea why ASIC couldn’t see through the Storm scheme. Or maybe they could, but didn’t shut it down because in their view it wasn’t illegal. I’m not much interested in ASIC or their reasons for what they did or didn’t do. But I do know that they have a  track record of incompetence, and for that reason alone, their opinions could hardly be considered trustworthy.

Now I’ll tell you how you could have and should have seen through the Storm scheme, regardless of whether ASIC or anyone else saw through it. You’ve already been told about a hundred times, but I’ll tell you again.
The 1987 market crash occurred less than twenty years before you invested with Storm. You were in your mid forties in 1987, so your memory of that historic event should have still been fresh in your mind less than 20 years later. 
To evaluate the risk in the Storm strategy, all you needed to do was consider what effect a 25% slump in one day, as occurred in ‘87, would have on your proposed 2 million dollar investment. A three second calculation tells me you would have been brutalized to the tune of half a million dollars in just one day. 
And if the market had slumped 50% as it did in ‘87 in just a few weeks, another three second calculation tells me you would have taken a 1 million dollar hit on your 2 million dollar portfolio.
Was that level of risk acceptable to you? Somehow I doubt it. If it wasn’t, then you should have walked away without even bothering to look further into the Storm strategy. 
You should have had the intelligence to realize that if you borrow heavily to to get yourself a bigger market stake, and hence potentially larger returns, you also expose yourself to bigger losses if the market caves in. It’s not rocket science Frank, it’s not like you need sophisticated investment knowledge or expertise to work it out. All you need is a bit of common sense – something that seems to be in short supply in your case.

I could name you a dozen other reasons why and how you should have seen through the Storm strategy, but I won’t bother. The example above should have given you sufficient reason to reject the Storm strategy, just as it was rejected by three out of four people who looked at it.

You accuse others of dodging questions, but there’s nobody on this forum who’s dodged more questions than you have. Time and time again you’ve clamped your tail between your legs and slunk away like a whipped dog when you’ve been asked confronting but perfectly reasonable questions. Like the two completely relevant and reasonable questions that Doobsy asked you just a few days ago, for example.

Here are some questions I’ve asked you over the last few months, but you’ve ignored......

1. You witnessed the 1987 market crash. Before signing on with Storm, did you not consider what effect a similar slump would have on your portfolio?

2. You would have been meticulous in your research before making a considerable investment in your shopping center - you would have left no stone unturned in your effort to uncover every detail that could possibly affect the success of your venture. 
Why could you not have used the same care in evaluating the Storm strategy?

3. Why didn’t you think for yourself, rather than handing over the responsibility to someone else to do your thinking for you? Yes, I know you were paying for a professional service, but the same can be said when you deal with a professional real estate firm or a professional motor dealer. No matter what these people tell you, if you have any intelligence you still think for yourself to evaluate the pros and cons of their proposal. 
So why didn’t you do the same with Storm?

4. You keep repeating that ordinary people had no chance of seeing through the Storm strategy. Yet three out of four people who looked at it walked away. Sure, there could have been any number of reasons why they walked. But do you really expect this forum to believe that none of them saw the pitfalls?
And if other people saw the pitfalls, why didn’t you?
It’s not as if you didn't have experience with investment and debt. It’s not as if you spent your life in occupations that required no thinking on your part. 
So why was it Frank, that you couldn’t see what many others saw? Were they a lot smarter than you? Were you blinded by greed? Were you dazzled by dollar signs dancing before your eyes? Are you just plain stupid? Are you just a habitual risk taker? Did you think the gamble was worth the risk?

5. And the most intriguing question of all, one that you’ve been completely unable to answer....
Considering that you were 65 years old with a net worth of 1.7 million dollars, no debt whatsoever and plenty of money for a very comfortable and enjoyable retirement, why did you even consider mortgaging your home and going heavily into debt to make even more money that you didn’t need anyway?

So come on Frank, you who accuses others of dodging questions – let’s see how you go with these questions.


----------



## DocK (10 April 2012)

bunyip said:


> Oh I don't know - the way I read it, you attempted to rap Julia over the knuckles in the first instance, and she simply responded.




Where would we be without our White Knights in this world? 

Actually I made what I thought to be a polite _suggestion_ that a tv show (or its underlying message) shouldn't be written off on the basis of watching only a very little of it and forming a judgement based on only a small part, and not the whole.  There is probably a parallel in there somewhere for the whole Storm client vs bank situation.  

I did not presume to tell Julia what she could or could not comment on - as she seems to have taken exception to this time - merely suggested that had she watched a little more she may have formed a different opinion.  Or not.


----------



## Frank Ainslie (10 April 2012)

SJG1974 said:


> Are you serious Frank?
> 
> This has to be one of the more bizarre posts you have written…and believe me, you have written some absolute doozies that still have me scratching my head in bewilderment.
> 
> ...




Stop prevaricating and simply answer the question! If you don't, nothing you say on this forum in the future will have any credence because people will simply see you for what you are - an empty vessel.  I'm leaving the kitchen door open!


----------



## Frank Ainslie (10 April 2012)

DocK said:


> Where would we be without our White Knights in this world?
> 
> Actually I made what I thought to be a polite _suggestion_ that a tv show (or its underlying message) shouldn't be written off on the basis of watching only a very little of it and forming a judgement based on only a small part, and not the whole.  There is probably a parallel in there somewhere for the whole Storm client vs bank situation.
> 
> I did not presume to tell Julia what she could or could not comment on - as she seems to have taken exception to this time - merely suggested that had she watched a little more she may have formed a different opinion.  Or not.




Dock, 

It's not a good thing to contradict Julia because she is a sensitive soul. She can give it out but she just hates getting it back! Shame on you!

Incidentally, you wrote a terrific piece about the 4 corners show. I didn't see it myself but your explanation was first rate.


----------



## Julia (10 April 2012)

bunyip said:


> Oh I don't know - the way I read it, you attempted to rap Julia over the knuckles in the first instance, and she simply responded.



Correct.



DocK said:


> Actually I made what I thought to be a polite _suggestion_ that a tv show (or its underlying message) shouldn't be written off on the basis of watching only a very little of it and forming a judgement based on only a small part, and not the whole.



I made no comment whatsoever on the program or what you interpret as its 'underlying message'.

I did not write it off.

I formed no judgement on the program *because I didn't see most of it*.

I remarked only on the stupidity of anyone making a commitment to buy a business which they had not checked out for themselves.

You can carry this silliness on if you wish, Dock.  I won't be further responding to your non-points.


----------



## Julia (10 April 2012)

SJG1974 said:


> Are you serious Frank?
> 
> This has to be one of the more bizarre posts you have written…and believe me, you have written some absolute doozies that still have me scratching my head in bewilderment.
> 
> ...



SJG, try this.
https://www.aussiestockforums.com/account/ignored


----------



## bunyip (10 April 2012)

DocK said:


> Where would we be without our White Knights in this world?
> 
> Actually I made what I thought to be a polite _suggestion_ that a tv show (or its underlying message) shouldn't be written off on the basis of watching only a very little of it and forming a judgement based on only a small part, and not the whole.  There is probably a parallel in there somewhere for the whole Storm client vs bank situation.
> 
> I did not presume to tell Julia what she could or could not comment on - as she seems to have taken exception to this time - merely suggested that had she watched a little more she may have formed a different opinion.  Or not.




I don’t give a damn if you tell Julia that perhaps she shouldn’t comment etc etc. But if you give someone a rap over the knuckles like that, mild though it was, it’s a bit rich that you then accuse them of rapping _*you*_ over the knuckles when they respond to what you said.


----------



## SJG1974 (10 April 2012)

Julia said:


> SJG, try this.
> https://www.aussiestockforums.com/account/ignored




Thanks Julia.

The funny thing is, I have a mobid fascination in seeing just how far Frank can get his foot into his mouth.  By my reckoning, he is about knee deep by now.


----------



## DocK (10 April 2012)

Julia said:


> Correct.
> 
> 
> I made no comment whatsoever on the program or what you interpret as its 'underlying message'.
> ...




Your condescension leaves me, once again, breathless.  

Please put me on your ignore list.


----------



## Solly (11 April 2012)

Gee, I've been sitting on the sidelines watching the recent interactions.
I'm glad that this is just a discussion group and nobody here holds any authority. I believe it could be a rather messy view from the bench if they did !

On other matters, is there anybody here who attended and has any further comments about the Directions and Interlocutory Hearings from last Thursday ?

S


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## bunyip (11 April 2012)

doobsy said:


> No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:
> 
> 1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.
> 
> 2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem.





Here you go Frank - here's the two perfectly reasonable and relevant questions that Doobsy asked you recently. We're still waiting for you to answer them. And don't treat this forum like fools by telling us that these are not relevant questions. They're very relevant, as you well know.

You'd love to convince everyone that your losses were caused by margin calls not being made on time, by faulty data, by secret deals between Storm and the banks. 
But you've never been honest enough to acknowledge that even if all the systems had worked as they were supposed to work, even if the margin calls were made on time, even if everything was legal and above board with no collusion or skullduggery, you still would have suffered catastrophic losses due to the combined effects of a collapsing market and crazy levels of borrowing.

Come on Frank, answer the two questions above. You snap and snarl at people and demand that they answer your questions, but you run away like a frightened hyena when someone puts confronting questions to you. Your attitude is weak and hypocritical, to say the least.
*Answer the questions Frank - answer the questions.*


----------



## maccka (11 April 2012)

bunyip said:


> Come on Frank, answer the two questions above. You snap and snarl at people and demand that they answer your questions, but you run away like a frightened hyena when someone puts confronting questions to you. Your attitude is weak and hypocritical, to say the least.
> *Answer the questions Frank - answer the questions.*




Bunyip,

Frank actually doesn't have to answer any questions to anyone on this forum.  There is no obligation for him to do so.  

An interesting point to note might be that while you think his attitude is weak and hypocritical there are others that admire his strength and ability to stick to his beliefs and continually fight for them when others would have given up on being continually bullied (both by large institutions and opinionated people with no idea of the reality he's living) and walked away years ago.

Bunyip, some would see your attitude as confrontational and that of a bully.  Others would see it as identical to Frank's in many ways - continually pushing the same point of view.  Still others would have other ideas.

cheers
Maccka


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## maccka (11 April 2012)

Stormers with SICAG have likely seen these.  This post is for those that haven't.

Here are a couple of videos worth watching.

Finish Strong!
http://www.youtube.com/watch?v=wOlTdkYXuzE&feature=fvwrel

Never Give Up!
http://www.youtube.com/watch?v=AW579icDRSA


cheers
Maccka


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## Mash (11 April 2012)

Solly said:


> Gee, I've been sitting on the sidelines watching the recent interactions.
> I'm glad that this is just a discussion group and nobody here holds any authority. I believe it could be a rather messy view from the bench if they did !
> 
> On other matters, is there anybody here who attended and has any further comments about the Directions and Interlocutory Hearings from last Thursday ?
> ...




Judge Reeve immediately raised the D.Mc/CBA/Colonial issue as he had heard part of a story on the ABC before coming to Court. He expressed deep concern should the report be shown to have any basis of fact and requested more information to be supplied.

Then the usual argy bargy ensued however a new issue involved a request by Levitts silk Ron Merkel for “Linked Credit Provider” to be included in the evidence for trial. The Bank under no circumstances wanted the Linked Credit Provider issue to be allowed to be part of the trial. Merkel succeeded in having it included.

A good day in court for Stormies!!! Again !! Bring it ON !!!


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## bunyip (11 April 2012)

maccka said:


> Bunyip,
> 
> Frank actually doesn't have to answer any questions to anyone on this forum.  There is no obligation for him to do so.
> 
> ...




Quite right Macca – Frank doesn't have to answer questions from me or anyone else. But if you want to be fair-minded about this, then you should point out to Frank that nobody is obliged to answer _*his*_ questions either.
I refer you to Post 7068 on Page 354 in which Frank demanded answers to his question, and in fact used quite aggressive and derogatory language in doing so. It’s quite unreasonable that Frank should demand answers when he himself has continually refused to answer dozens of perfectly reasonable and relevant questions.
I answered Frank’s question anyway, but I’m still waiting for him to answer mine. Knowing Frank, I don’t think I’ll hold my breath.
Frank seems to fancy himself as a bit of a brawler, but it doesn’t take long for his courage to dessert him when he comes up against someone who throws punches in return.

As for my attitude being identical to Frank’s – I partly agree. We’re both tenacious and stick doggedly to our views. The big difference between us is that I try to have some balance in my views, whereas Frank has none whatsoever in his. Franks’ agenda is clearly based on getting compensation any way he can. If that means distorting the true cause of his losses, then he’s demonstrated that he’s quite prepared to do so.
As for _*my*_ agenda, I don’t have one – I’m not affected by the Storm disaster and I don’t care which way the court case goes, as long as the outcome is fair. If the banks are proven to have done anything illegal, then I and every other fair-minded person will have no objection to them receiving appropriate penalties. All I want is for _*everyone*_ involved to take responsibility for their actions - Storm and Storm investors very much included. 

Me confrontational? You’re right – I’ll confront anyone on this forum who refuses to take responsibility for their actions, who distorts the truth for what they hope will be financial gain, and who resorts to name-calling as Frank has done on various occasions.

Cheers to you too Maccka
Bunyip


----------



## Solly (11 April 2012)

Mash said:


> Judge Reeve immediately raised the D.Mc/CBA/Colonial issue as he had heard part of a story on the ABC before coming to Court. He expressed deep concern should the report be shown to have any basis of fact and requested more information to be supplied.
> 
> Then the usual argy bargy ensued however a new issue involved a request by Levitts silk Ron Merkel for “Linked Credit Provider” to be included in the evidence for trial. The Bank under no circumstances wanted the Linked Credit Provider issue to be allowed to be part of the trial. Merkel succeeded in having it included.
> 
> A good day in court for Stormies!!! Again !! Bring it ON !!!




Thanks Mash,

The “Linked Credit Provider” matter is an interesting development. I suppose it highlights the value of having a knowledgeable, experienced practitioner on your team presenting items that need to be tested. 

I shall now sit back and be entertained by the static until other factual matters of substance and real consequence to these actions arise into the public domain.

S


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## Harleyquin (12 April 2012)

I watched the Four Corners program called Happy Banking on Monday night and thought exactly the same thing GG.  This is exactly what they've done to storm and clients.  When you add some of the evidence, which hasn't been put on this forum for obvious reasons, you are looking at the same scenario believe me.

For heavens sake Julia read what I've said instead of again twisting my words around.. Again and yes to your own advantage.  I'm sure you know exactly what I mean.  You can carry on about childish prattle all you like...just read your own posts for a prime example.  I ask the hard question and suddenly you Bunnyip and co are all retired at 40 ummm excuse me if I suddenly feel very doubtful...again.

We see professional dishonesty taken to extremes and you all excuse it so blatantly...why I wonder?  As I'm sure many others are wondering the same thing.  Blaming the client just doesn't cut it anymore.  What are you people hiding behind?

We have two choices when it comes to our financial future.  One is to do it yourself...as some of you have chosen to do.  The other is to employ a professional...as many others have chosen to do.  It's a free country and we still have the freedom to make that choice.  There is no excuse for criminals in the financial world just because their clients choose to focus on what they are good at.


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## Harleyquin (12 April 2012)

Doobsy those questions you've posed are for storm to answer.  Storm the company may be gone but the storm operators are still out there alive and kicking.  Ask them they were paid to monitor their clients investments.


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## Harleyquin (12 April 2012)

While you're putting DoK on your ignore list Julia put me on there as well.  I prefer to discuss/ debate with someone who knows what they're talking about.


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## doobsy (12 April 2012)

Harleyquin said:


> Doobsy those questions you've posed are for storm to answer.  Storm the company may be gone but the storm operators are still out there alive and kicking.  Ask them they were paid to monitor their clients investments.





No HQ, the questions are very much relevant to storm clients. 

I am in no way saying that every storm client knew exactly what was happening. Storm spent many years wearing certain clients down and slowly drip feeding the borrowing levels into their portfolio. Markets were heading North and I can see why clients would sign paperwork prepared by their trusted adviser who had done the right thing to that point. I know I have clients who trust me and don't really question or look at every detail of what I am doing for them. Lucky for them it is all above board.

The questions were posed to point out that the Storm strategy was massively flawed. I agree the advisers are the ones that ultimately should take the fall for the advice. The strategy was flawed to the point that no matter what protections, what trigger points, what cash dams Storm had put in place it was all predicated on the fact the market would never fall as far as it did over 2008.

As I mentioned my wife had money invested. We had spoken about where I saw markets heading vs what she was being told from Storm. She was willing to take the risk with the money and when her margin call came she ended up with $2,000 out of a $20,000 investment. She does however acknowledge that she knew the risk, she saw the portfolio dropping and she made the decision to stay in under Storms advice in the hope the market would bounce before a margin call was made.

HQ there is a clear obsession by some on the forum that the banks are to blame. I believe they played their part but they cannot be seen to be completely to blame. I have been over this ad nauseum. You can't put all clients in one category. To expand on this, Storm clients I know of include:


Clients who withdrew super and used a margin loan
Clients who borrowed against their home only
Clients who borrowed against the home and had a margin loan
Clients who had money from another source and then got a margin loan
Clients who borrowed against the house and withdrew their super but no margin loan

Now out of these, only the ones with the margin loans were completely wiped out. Others like the ones that only borrowed against the home or the last one have had massive hits to their situation but weren't wiped out. They still have their homes in both cases but their super is caput.

My other point that I am sick of typing is that in no way was ALL of the bank lending imprudent. I know of ex storm clients that are in their 40s and 50s that were working mining jobs on wages over $150Kpa. They could and can afford this. They invested using borrowed money and lost that bet that the market would go up by more than the cost to borrow.

How then can we say the banks are the only people to blame in this whole thing? 

My point was that no matter which financial advice firm, which bank, which margin lender, ANY client who used borrowed or double borrowed money to invest in Australian shares between late 2007 - early 2009 was wiped out. 

Storm clients need to have a good look at what category they fall into. If HQ you were a fully retired, no significant income client who Storm misled and the banks should not have lent to then keep up the fight. If not, a bit of self reflection is required.


----------



## bunyip (12 April 2012)

Here’s a scenario worth considering due to its parallels with the Storm situation......

I’m looking for an investment property to add to my real estate portfolio. A real estate agent shows me a house for sale on a flood plain beside a creek. I could easily check out past flood levels for the area – flood records are readily available to the general public, as are stock market records. Or I could simply use a bit of common sense to recognize that a flood plain is subject to flooding. But I don’t do either, preferring instead to trust the real estate agent when he tells me it’s a safe area with no flood problem. After all, he’s a licensed real estate agent with professional qualifications, has been in business for thirty years, and is a member of a reputable professional body, the REIQ (Real Estate Institute of Queensland). He has thousands of satisfied clients of long standing, and he can arrange finance through a bank that’s will lend me the money if I give them a mortgage over my family home.

I buy the house, only to have it washed away by a flood a few months later. My insurance policy doesn’t cover the damage. With no house, no tenant, and hence no income from the property, I’m unable to service the loan. The bank forecloses on my family home.

Time for the finger pointing to begin. But who should I point my finger at – who’s at fault here?
The bank for lending me the money to invest in a high risk area?
The bank for foreclosing on my family home in an effort to recover their loan?
The real estate agent for conning me into believing it was a safe area with no flood problem?
The REIQ for endorsing a shonky operator by allowing him membership of their organization?
The local council for allowing residential development in a flood-prone area?
The insurance company for not paying out on my policy?

Or does the fault lie mainly with me because I was too trusting and didn’t think for myself, and I wasn’t astute enough to do a bit of independent research to find out the readily-available facts, instead of just blindly believing what a salesman told me?


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## Harleyquin (12 April 2012)

Doobsy I disagree those questions need to asked of storm.  At the end of the day it was their financial advice and monitoring.

On the issue of clients in a range of categories you are spot on.

Also they also had a range of understanding ie some knew exactly what was involved and asked for this high risk strategy.  I have spoken to stormies who asked for this high risk strategy and could afford to take the risk.  They have no problem with storms advice and agreed with it   is their right.

They do not agree with CBA s treatment of storm or it's clients and I believe that they have good reasons for this as they understand exactly what has happened...and they've explained this to me.



Many others asked for different types of risks yet were all placed in a high risk category.  If a client doesn't understand what is being suggested and is paying for advice then I believe the advisor has an obligation to explain to ensure that their clients do understand  .

Let's just say that hasn't happened.  I will accept that it would be best for us all to be financially educated so that we are not in a position to be taken advantage of.  So many of us just trusted that these advisors were helping us, it's been a dreadful shock to discover how deceptive they've been and   To discover that the banks were in league with them.


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## doobsy (12 April 2012)

Harleyquin said:


> Doobsy I disagree those questions need to asked of storm.  At the end of the day it was their financial advice and monitoring.
> 
> On the issue of clients in a range of categories you are spot on.
> 
> ...




HQ - from an industry point of view - yes we should always be working to ensure the result is the best for the client. I think some storm advisers did believe this though so how do you cover an adviser who is working in his clients best interests and truly believes what they are doing is the right way to go.

As a reverse - if an adviser believes the world is about to go into the second great depression and advises his clients to cash out and the market doesn't fall, then the client has a grievance for lost opportunities. This is where you can't have rules covering everything, especially when it involves markets which are out of the control of the adviser anyway. Back to one of my previous posts - any adviser selling a return is a liar. We add value through strategy and technical expertise.

The forum will jump on you about this so sorry but I do need to point out that EVERY storm client signed EVERY page of their SOAs. This unfortunately comes back to the herd mentality and not wanting to look silly by saying 'no I don't understand' I can't sign yet.

Think my points are now exhausted for a while. No point harping on.


----------



## Julia (12 April 2012)

Harleyquin said:


> Many others asked for different types of risks yet were all placed in a high risk category.  If a client doesn't understand what is being suggested and is paying for advice then I believe the advisor has an obligation to explain to ensure that their clients do understand



I have absolutely no wish to defend any so called adviser who misled clients in any way, but the adviser is necessarily dependent on a client making it clear that he/she does not understand a suggested strategy if that's the case.
Salespeople are adept at phrasing their story so that you're obliged to interrupt the patter and say, "Wait, I do not understand what you are proposing here."



> I will accept that it would be best for us all to be financially educated so that we are not in a position to be taken advantage of.



Well, that's a great step forward so good for you.  Hope you'll not feel daunted at the proposition of seeking out that financial education.  As I've said so often, HQ, it's not as difficult as you probably imagine.

You earlier chose to disbelieve that I withdrew from the paid workforce in my 40's.
That's OK.  I don't mind if you believe or not.

I would just suggest to you that you find it difficult to believe because you lack the understanding of how possible it is to make money once one has a reasonable level of base capital.  It's a matter of taking advantage of the cyclical nature of markets to a large extent.  e.g. in a time of high inflation when property values were going massively upward, it was hugely worthwhile to negatively gear into several properties, and in a relatively short time, double your capital investment.

You would not, however, find that so easy in today's environment.

Alternatively, if someone's understanding of making money is just what they can earn from an employer, then I can quite see how that person would find early retirement a difficult concept to comprehend.

I have no wish to place you on Ignore, Harleyquin.  Feel free, however, to use the Ignore function for my posts if my contributions are so worthless to you.
I don't mind either way.


----------



## bunyip (13 April 2012)

Harleyquin said:


> I ask the hard question and suddenly you Bunnyip and co are all retired at 40 ummm excuse me if I suddenly feel very doubtful...again.




Doubt all you want, HQ – it makes no difference to me.
But here’s a rough outline of my story if you’re interested.
I was self employed in my own business with a substantial amount of money invested, and working sometimes 7 days and up to 80 hours a week, averaging 55 – 60 hours.
For some years my wife and I had felt that there had to be more to life than working like trojans and having limited time for family and leisure. So at 42 we cashed out our assets, moved to an area that offered a better lifestyle for our family, and put our money into passive investments that require almost no work. It turned out to be the right move for us. 

People who’ve worked for wages all their lives without investing tend to have little understanding of what’s achievable if you start investing at an early age and make your money work for you. 
You should read ‘The Richest Man In Babylon’ – maybe it’s too late for you to get much benefit from it, but your children or grandchildren may find it very beneficial.


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## drmb (13 April 2012)

bunyip said:


> You should read ‘The Richest Man In Babylon’ – maybe it’s too late for you to get much benefit from it, but your children or grandchildren may find it very beneficial.




Invest wisely with advice from experts - don’t trust the knowledge of a brickmaker about jewels or a baker about the stars (Risk Management 101)

Start your purse to fattening  Regularly save a tenth of your income and as much more as you can afford it and make the savings work. Simple truth, hard to believe

Study to become wiser

Control expenditures - Budget expenses without spending more than nine-tenths of earnings.

Make your money  multiply - put your savings to work earning interest. 

Own your own home - don't rent. 

Buy insurance (Risk Management 101)

Set concrete goals and work to achieve them - 

Have compassion on those injured and or come to misfortune and help them within reasonable limits.

More or less from the Richest Man in Babylon  G S Clason


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## Julia (13 April 2012)

This discussion with Scott Pape ("The Barefoot Investor") on the Tony Delroy radio program earlier this week was quite interesting.  The focus is on how to choose a good financial adviser.
Storm Financial comes in for a few brief mentions.

http://mpegmedia.abc.net.au/local/nightlife/nightlife_m2074664.mp3

Scott Pape emphasises the importance of individuals having a reasonable personal level of financial literacy, even if only (as I've been on about here many times) in order to discern the competence or otherwise of advisers.


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## DocK (13 April 2012)

doobsy said:


> No HQ, the questions are very much relevant to storm clients.
> 
> (could not quote entire post for some reason, so snipped a large section)
> 
> ...




I don't disagree with anything in the above post.  I'm actually on record on this thread for accepting that I share the responsibility for the unhappy outcome of my Stormy experience, along with my FP whose advice I initially acted upon and the bank who funded the excercise.  My margin lender I actually excuse altogether as in my case I was out before a margin call would have become necessary, so therefore don't have a complaint about not having received one - unlike so many others.  Macquarie certainly weren't easy to deal with, as they made it as difficult as they could for me to actually sell down my portfolios and clear my debt without involving Storm - but I was able to prevail in the end.

What Doobsey hasn't covered in his take on the situation are the issues of bank val'ns and the looming UMIS issue.  In my case servicing of our bank debt could be proven at a stretch, with a bit of finessing - in any case we are managing to cover the ongoing interest costs.  We would not, however, have had a loan of the size extended to us if not for a shonky desktop val'n - the CBA have admitted fault in this area, and offered compensation based on their calculation of what a correct val'n would have been.

As to the UMIS issue - I see this as being at the crux of the Storm saga.  If not for the backing of the banks, CBA in particular, and the united front put forward by Storm and their financial partners, the number of people who would have proceeded with the flawed strategy would have been far, far less.  Technicalities aside, the legitimacy of Storm and therefore the strategy they promoted was enhanced tenfold by the very close relationship they enjoyed with their funding partner - and this factor definately weighed heavily in influencing me towards accepting their advice.  Clearly, with hindsight, it shouldn't have - but mere humans who are used to trusting their very reputable banks are prone to believing them.  

So I guess the way I see things is that even if a client could afford the possibly inflated loan they were given, and freely followed the advice they were given, does that then excuse the behaviour of the protected corporate giants who _allegedly_ formed a parnership with Storm to sell a one-fits-all product and then pulled the rug out from under their business partners and clients alike, far too late to avoid anything but total catastrophe, when the heat got too much for their liking?

I'll admit I've made up my mind on the ethics.  It's yet to be seem what the legal system will decide on the legalities.  In no way does my opinion on the banks involved let the Cassimatii off the hook - my opinion on them has also been made quite clear before.


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## doobsy (13 April 2012)

Good post.

Yes I excluded UMIS mainly because it isn't yet fact and also it won't cover all clients. I think CBA and BOQ will be seriously nervous but they have had almost 4 years to get their story straight and look into the VERY fine detail of their arrangement to find a way to prove they were at arms length.

I think the overlend due to the desktop software is one area that needs further investigation, not only for Storm clients. Banks were falling over themselves from 04-08 to release "Equity Mate" from everyone's homes. There may be a broader case for them to answer on this issue. How many people pulled money out for renovations, boats, holidays etc based on inflated values only to find now they owe almost as much as the place is worth.

Dock I agree that CBA were liberal in their lending to Storm clients, as were BOQ North Ward. The critical piece will come down to servicability. How many like yourself could and can afford the loan provided to them. This might be the fly in the ointment for some of the Storm claims.


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## Harleyquin (14 April 2012)

We do fall into that group who have worked for an employee all our life.

I think our experience is a warning to anyone else out there if you are just working for wages.  If we take Julia and Bunyip at their word then your financial future is firstly and foremostly up to you.  

If you take my advice you will never trust a financial planner or major bank in Australia again. This is because, if you do and things go wrong, they and others will consider that it's pretty much all your fault for believing them.  Any future financial adviser clients and that particularly includes bankfinancial advisors, be very careful.  If you don't understand ... Don't go there.


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## SJG1974 (14 April 2012)

Harleyquin said:


> Any future financial adviser clients and that particularly includes bankfinancial advisors, be very careful.  If you don't understand ... Don't go there.




Sage advice HQ. It should form the basis of pretty much every decision we make about money (and probably most things in life).


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## bunyip (14 April 2012)

Harleyquin said:


> There were storm clients who may have made big money during the best years however there were many of us who didn't.  Its interesting that ex storm clients are now going to other advisors asking for a high risk option.  When we went to storm we were given a high risk option, in fact we were given four options to choose from and I've copied that information below.
> 
> The question I ask is 'why were we given these options and then they ignored them as not all of us asked for a risky option.'
> 
> ...




HQ

It looks to me like the four ‘risk options’ in the PERSONAL PROFILE were not being offered as investment options at all, but rather were just questions about what level of risk you felt comfortable with. I suspect that Storm’s reason for compiling this ‘PERSONAL PROFILE’ was to make it look like they would tailor a personalised strategy according to the risk tolerance of clients. It appears to have been just a bit of a sales pitch to make them look professional and caring. However, Storm offered just one strategy as far as I’m aware, not the choice of four different investment strategies that each had a different risk level.

Whatever strategy was offered and however it was presented,  the prospective client was responsible for evaluating the strategy to determine it strengths and weaknesses, and whether it was suited to their personal situation.
This is no different to any other investment proposal – the client is ultimately responsible for evaluating the proposal before committing investment funds to it.


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## Julia (14 April 2012)

Harleyquin said:


> We do fall into that group who have worked for an employee all our life.
> 
> I think our experience is a warning to anyone else out there if you are just working for wages.  If we take Julia and Bunyip at their word then your financial future is firstly and foremostly up to you.
> 
> If you take my advice you will never trust a financial planner or major bank in Australia again. This is because, if you do and things go wrong, they and others will consider that it's pretty much all your fault for believing them.  Any future financial adviser clients and that particularly includes bankfinancial advisors, be very careful.  If you don't understand ... Don't go there.



I understand that this has been a difficult realisation for you to come to.  And, yes, you would quite reasonably think that if you go to a licensed financial planner, they are going to act with your best interests as a priority.

But sadly it's just not necessarily so, as you've discovered to your considerable cost.

As SJG suggests, this attitude of wariness really needs to go with us in all our dealings if we're to avoid being done over.

You'd probably assume, e.g. that a professional person who has done good work for you at a reasonable cost in the past could be depended on to provide similar in the future.  Just as an example I've approached two legal firms with whom I've been completely happy for past matters and asked for quote on conveyancing.
Both were much too expensive and about 40% more than I was able to find elsewhere.  So we cannot even assume that past good service is any guarantee of future value.

On a separate front, this article in today's "Weekend Australian" is interesting.


> Many of the nation's biggest banks - including Westpac and Macquarie - are being forced to forgive debts granted on the basis of false information about lenders supplied by mortgage brokers during the last property boom.
> 
> Under the scam, which draw parallels with US subprime lending practices, a number of mortgage brokers have been found to have substantially inflated incomes of low income earners to allow them to borrow far more than they were able to repay.
> 
> ...




Quite a bit more along the same lines.
So it seems Storm's practices were not exactly unique.


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## bunyip (14 April 2012)

Harleyquin said:


> We do fall into that group who have worked for an employee all our life.
> 
> I think our experience is a warning to anyone else out there if you are just working for wages.  If we take Julia and Bunyip at their word then your financial future is firstly and foremostly up to you.
> 
> If you take my advice you will never trust a financial planner or major bank in Australia again. This is because, if you do and things go wrong, they and others will consider that it's pretty much all your fault for believing them.  Any future financial adviser clients and that particularly includes bankfinancial advisors, be very careful.  If you don't understand ... Don't go there.





HQ 

With all due respect for your opinions about the major banks, anyone taking your advice not to trust them will find it difficult to ever build up enough investments to become financially independent. You can invest only your own money if you want, but you can get ahead much faster by investing other peoples money as well. Most wealthy people have taken out investment loans at one time or another to fast-track the wealth creation process.
But of course you must be careful and prudent with investments, particularly when there’s borrowed money involved. If you let the blood rush to your head by borrowing recklessly, then you obviously increase the likelihood of coming unstuck.

I pretty much agree with your advice of ‘If you don’t understand...don’t go there’.
But I’ll add that sometimes the only way to understand something is by having a go at it and learning from your mistakes. If you go down this road then it’s imperative that you make your mistakes with only very small amounts of money until you become proficient. 
I’ve traded the Foreign Exchange market for the last eight years or so. I  read and learnt as much as I could before attempting to trade, but I fast-tracked my understadning of currencies by opening an account with just 2 grand and having a go at trading them, learning from my mistakes as I went. Good job I was only playing with small money – my losses would have been catastrophic if I’d committed 2 million dollars to it instead of two thousand. 
 I eventually got to understand currencies and learn what works and what doesn’t in trading them.
I may never have learnt about this market if I'd stayed away from it  because I didn’t understand it.


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## Frank Ainslie (14 April 2012)

maccka said:


> Bunyip,
> 
> Frank actually doesn't have to answer any questions to anyone on this forum.  There is no obligation for him to do so.
> 
> ...




Thanks Maccka! I appreciate your understanding!

The trouble with people like Bunyip is that they are completely one-eyed. Of course, he will say the same thing about me and many will agree with him here. So be it!

He has accused me of not answering the questions people have posed to me on this forum. However, if he takes the trouble to read back through all my postings he will see that I have answered every question that has been posed to me these last few months. In fact, I would go as far as to say that no one from our side has offered more explanations than I have on this forum about our mind-set and circumstances at the time. Therefore, what Bunyip is stating when he claims that I am avoiding questions that have been posted is complete hog-wash and anyone that has read all my past postings will know this to be so. 

What gets up Bunyip's nose and some others on this forum is not that I have not responded to their questions, but rather that my responses have not been to their liking. Such individuals are found everywhere. If you don't agree with them, they will try and pour scorn on your opinions and twist your words for your own ends. They work on the premise that the truth should never get in the way of a good argument or the facts deter one from  promoting a set of beliefs that do not conform with the facts. They answer a question with a question and blow their own trumpet at regular intervals in the hope that the walls of Jericho will come tumbling down, and the rest of us will be buried beneath falling rubble. If this line of attack doesn’t work ,and it usually doesn't when intelligent and well-informed people, are present, then there is the age old ploy of attacking someone on a personal level. The ALP recently tried the same thing up here in Queensland and they copped a serve because the Queensland public saw through such tactics.

Their theme is always the same. “_We were foolish to invest using the services of Storm and anyone with an ounce of nous could have seen through Storm’s theme from the start.”_ Yet, in the past when I have raised two important points in this regard, they have been completely evasive.

Until they can answer these two fundamental questions, they cannot sustain their lines of reasoning without sounding biased. 

*(1) Were Stormies justified in relying entirely on their Storm Financial Advicers*

When I asked some time ago how many on this forum had any knowledge of the law, many if not all were found wanting. Some have actually admitted since that they have consulted lawyers at some stage in the past. We are entitled to ask such individuals whether  they actually boned up on the law at that time or did they leave it to their lawyers? I'm betting a pound to a penny that those people left it entirely to their lawyer because they, the lawyers are the professionals, and not them.

Yet, these same people are also now insisting that we should not have left it entirely to our Storm Financial advisers who were also professionals. This implies that financial advisers despite their qualifications and experience in financial matters do not merit the same respect as professionals in other fields of endeavour. I was not aware, and I am certain no one else that invested using the services of Storm was either, that professionals are ranked according to the industry they work in? Does anyone know if such a ranking in fact exists?  Does a doctor or lawyer have a five-star rating whilst financial advisers only have a one-start rating is something we would dearly like to know. Unless the detractors can produce such a ranking, I cannot see how they can argue that we were wrong to accept financial advice from Storm’s advisers?

*2. How could we know that Storm's plan was not viable or had been misrepresented when ASIC, the Regulator, just 12 months before, examined such and gave it the all-clear?*

People have claimed that we should have acquired the necessary investment awareness beforehand so that we could have avoided what to them was an obvious _“high risk”_ scheme with a _“one’fit”_ for all that was doomed to fail. Yet, ASIC, the Regulator, who employs people trained in financial matters and compliance, failed to see anything wrong until after Storm collapsed? In other words, ordinary Australians, many of them elderly, were expected to discern the flaws in Storm’s scheme when those qualified to do so could not! Should we now be sending the staff of ASIC back to school for some further education or is this suggestion as daffy as it sounds?

These issues strike at the heart of this matter because (1) they demonstrate that we were fully entitled to rely on professional financial advisers, duly qualified, for any financial advice and guidance we received, and (2) this was not “_a transparent high risk"_ scheme as many claim. The charges now levelled by ASIC in the Courts against Storm and the Banks emphasize the duplicity that was involved in persuading people to invest in a scheme that was _"misleading and deceptive"._ It was sold as a “_low risk long term growth scheme”_ with _“built in safeguards" _to protect investors’ assets”. The statement of charges drawn up by ASIC that will also be pursued by our lawyers bear testimony to this fact.

Isn't it a bit like saying a woman is asking for it because she wears a low cut dress. This argument has no more basis than those being used against us now.And please, for those that read this remark as an attack on women rather than as an example, let's start using a bit of commonsense. Enough foolishness has been said on this forum already and we can do without more of the same.

Bunyip and others on this forum choose to ignore these important questions because they cannot be answered sensibly without undermining their contentions that we are somehow to blame..

I have no objections to discussing any matter to do with Storm if people are willing to consider my remarks in an objective way. I do however, take umbrage when matters are introduced that have no real bearing on the issues involved or are not germane in our fight against the Banks.  For instance, our motivation for originally investing using Storm will not arise in Court because it will be assumed quite rightly that we acted in good faith whilst the accused did not! For that reason, the Court will not be grouping us with them. 

Why, therefore, should we accept such a suggestion from some members of this forum when they cannot state a plausible case for their assertions to start with? Perhaps, if they can sensibly answer the questions I have posed here, then I will be willing to debate with them further. Until then, I will treat their accusations as ill-founded and uninformed. To prove me wrong, they will have to provide substantive reasoning to the contrary when answering these questions, and their past record does not suggest that they can do this.

Fortunately, we do not have to rely on members of this forum to render a verdict in the forthcoming trials. The Banks enjoy a presumption of innocence until they have been found guilty. A certain faction on this forum have already found us guilty although I still can't figure out how they arrived at this conclusion. After all, we have not been charged with any wrongdoing, but rather those that have robbed us of our money are now squarely in the dock.  I haven't to date been asked to stand alongside them?

Where's the logic in such reasoning? It certainly beats me! You may rest assured that some will try and find some though. 

You are quite right, makka, when you state that I or anyone else for that matter doesn't have to answer any questions on this forum if they don't want to, and people can draw their own conclusions from such silence. I will therefore leave it to the forum members to draw their own conclusions if this challenge is not taken up. 

What did Doobsy say a little while ago? Let's see "_who is brave enough among you"_ to answer these questions I have asked? Until you do, you should not continue to pursue a line of argument that you cannot substantiate.


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## bunyip (14 April 2012)

Frank Ainslie said:


> *(1) Were Stormies justified in relying entirely on their Storm Financial Advicers*
> 
> 
> *2. How could we know that Storm's plan was not viable or had been misrepresented when ASIC, the Regulator, just 12 months before, examined such and gave it the all-clear?*




1. Of course they weren’t. Astute people don’t just accept investment proposals from commission salesmen without doing some independent research of their own before committing millions of dollars, much of it borrowed, to the investment.
To do so is foolish and risky, as has been proven by the wipeout of Storm clients.

2. This one has already been answered dozens of times, but I'll answer it again.
You could have known that Storm's plan was not viable if you'd been astute enough to simply ask yourself one question.......'What would the effect be on my proposed portfolio if there was another market crash of similar magnitude to the 1987 crash'?

The answer to this question would have warned you that in your case you could take a 500 grand hit in one day, and a 1 million dollar hit in a little over a month.
If Storm had given you this information you would have changed your mind immediately about their plan being viable.
Well Frank, you could have easily uncovered this information for yourself if you'd had enough 'get up and go' in you to scratch slightly below the surface instead of just blindly believing everything that Storm told you.


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## Frank Ainslie (15 April 2012)

bunyip said:


> 1. Of course they weren’t. Astute people don’t just accept investment proposals from commission salesmen without doing some independent research of their own before committing millions of dollars, much of it borrowed, to the investment.
> To do so is foolish and risky, as has been proven by the wipeout of Storm clients.
> 
> 2. This one has already been answered dozens of times, but I'll answer it again.
> ...




Thank you 'Buniyip' for brightening my day! Where would we all be without your sense of humour! I'll now try and lighten your day because fair's fair!

Look down and check whether you have any feet left because every time you write, you keep shooting yourself in one foot or the other! I think it's called _"footicide" _ or some such thing! Let's see now what banality you have prepared for us this morning!

1)	_Were Stormies justified in relying entirely on their Storm Financial Advicers_
You have responded by stating, "Of course they weren't". Pardon???????????? I guess that's what comes of being in a "head-banging" club - long term concussion!

What rubbish and you know it! That’s exactly what this is all about! In law it’s called _“misrepresentation”_ but then I forgot, you know nothing about the law so I will forgive you for your ignorance. Let me therefore educate you where the law is concerned although I really feel you should have learned all about the law in school as some here have suggested. 

When you enter into any agreement, one party is not allowed to _"misrepresent" _in order to persuade the other party to agree. It’s one of the tenets of contract. If our society were to operate as you seem to suggest, anarchy would reign everywhere rather than just in your mind. 

You know, Bunyip, it really does amaze me how you can dismiss financial advisers’ duties and responsibilities in such an arbitrary way as if their opinion doesn’t count for anything in the final analysis. Why the heck should people pay financial advisers if they are only there to be part of the furniture? Should 'Doobsy' never be paid again for any financial advice he gives out to his clients because such advice is really meaningless anyway and serves little purpose because it cannot be relied on?

One more thing, Bunyip! Describing financial advisers as “_commission salesmen”_ is an obvious attempt by you to obviate their primary function which is to give sound financial advice to their clients based on their experience and training in financial matters. Dismissing them merely as_ “commissioned salesmen”_ to suit your argument once again reflects your deviousness when commenting on such matters.

Here's another example of this:

_*2. How could we know that Storm's plan was not viable or had been misrepresented when ASIC, the Regulator, just 12 months before, examined such and gave it the all-clear?*

This one has already been answered dozens of times, but I'll answer it again._

That’s the point! You have never answered it at all and even now you choose to ignored what I asked, but rather have deflectedf the question back to us when that is not the issue. This time it is not about what we did but what ASIC did or rather what ASIC didn't do!  By avoiding the question I must either conclude that you are  being deliberately evasive or you have a problem interpreting the question you have been asked. Therefore, to make it a little easier, I have now highlighted the question in bold to make it a little clearer!

_“You could have known that Storm's plan was not viable if you'd been astute enough to simply ask yourself one question....... 'What would the effect be on my proposed portfolio if there was another market crash of similar magnitude to the 1987 crash?”_

Wasn’t that really the question financial advisers should be asking themselves before they give advice to an unsuspecting public? Isn’t that also a factor that should be taken into account by Banks before they lend money for investment purposes. Yet, somehow, you now want to throw all this back on unsophisticated investors who relied on advice they had paid good money to obtain. What sort of ****-eyed reasoning is this?

_"If Storm had given you this information you would have changed your mind immediately about their plan being viable."_

That’s a big word “IF”. If my Aunty had nuts she’d be my Uncle!  You have said one right thing though! _“If Storm had given us the information..”_ because that’s exactly what they didn’t give us; the correct information on which we could have made an informed decision before signing up with them. In fact most of the information we received was "misleading and deceptive" and that is what all the parties involved are being charged with among a plethora of other things! 

Now do you see, Bunyip, why you are such a frustrating fellow as far as we are 'Stormies' are concerned! You are constantly contradicting yourself and you have not come to grips with the real issues.


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## SJG1974 (15 April 2012)

Frank Ainslie said:


> However, if he takes the trouble to read back through all my postings he will see that I have answered every question that has been posed to me these last few months.




Frank,

Can you point me to your answers to the questions below which were posed to you within the past few weeks??  I must have missed them, given you have said that you have answered every question posed to you. 



doobsy said:


> No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:
> 
> 1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.
> 
> 2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem.






SJG1974 said:


> As has been pointed out, the stock market didn't just fall off the edge of a cliff overnight, it fell over a period of 12 months. From the highs of late 2007, the market was down by 20% by the start of March 2008 (and given the powers of gearing, your portfolio would have been down by significantly more by then).
> 
> I am guessing that you wouldn't expect to lose more than 20% in a matter of months by taking on a low risk strategy.  So you should have known full well by this time (and much earlier in reality) that this wasn’t a low risk strategy at all.
> 
> ...




As I said, please point out where the answers to these questions appear Frank.


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## Frank Ainslie (16 April 2012)

_In the Eye of the Storm: The Collapse of Storm Financial
Paul Barry - Feb 2011

[Extract]


"Licensing is the rock on which ASIC’s regulation of the financial planning industry is founded. If you visit the regulator’s website you’ll see dire warnings of the dangers of taking advice from an unlicensed financial planner. But the experience of the Storm case suggests a licence from ASIC doesn’t necessarily make investors safe. Those who lost hundreds of millions of dollars in property group Westpoint also found little protection.
In its defence, ASIC says it can’t be expected to police everyone, *but if its army of public servants were unable to notice there was something very wrong with Storm,* you wonder why it’s in business. Storm was one of the biggest financial planning networks in Australia, with 115 staff, $4.5 billion of funds under management and 14,000 clients (of whom 4000 were already ‘Stormified’ and using the one-size-fits-all model of investment). The group had a highly visible and aggressive marketing campaign, with TV ads, weekly seminars and enthusiastic endorsement from the ex-Australian cricket coach John Buchanan.
Its founder was also high profile. He lived in a white, five-level house on the most prominent hill in Townsville and commuted to Brisbane in his personal Learjet. In 2007 he harvested $24 million in dividends for him and his wife. All of this was financed by the highest fees in the marketplace.
On top of this, A*SIC actually received complaints about companies associated with Cassimatis and his high-risk approach in the early 1990s but did nothing. It then received further complaints about Storm in 2006 and again sat on its hands.* Even in late 2008, by which time Storm’s investors had lost their shares, their houses and their super, and the company was on the brink of insolvency, ASIC still wasn’t interested. In mid December that year I rang ASIC to ask what action they were taking and was told: “We’ve had a few complaints but we’re not investigating.” They eventually got their boots on two days before Christmas 2010.
As BoQ said on the day ASIC’s legal actions were finally announced, roughly 18 months after Slater & Gordon filed its first damages suit on behalf of Storm investors, “We have every sympathy for customers who lost money … *We too put faith in the regulatory system and can understand our customers’ frustration at the collapse of a financial planner that had the tick of approval from government regulators.”*
On that point at least, you have to agree. It’s time for some answers on what’s wrong with ASIC and why it can’t do better"._


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## Frank Ainslie (16 April 2012)

Hey Stormies! 

Does this sound familiar to you? It seems that the Banks didn't confine their dirty deeds to Storm alone! Anyone out there that still maintains that the Banks are to be trusted and are working in the interests of their customers rather than themselves are, to my mind, suitable cases for treatment.

*From Weekend Australian*

_"MANY of the nation's biggest banks - including Westpac and Macquarie are being forced to forgive debts granted on the basis of false information about borrowers supplied by mortgage brokers during the last property boom.

Under the scams, which draw parallels with US sub-prime lending practices, a number of mortgage brokers have been found to have substantially inflated incomes of low-income earners to allow them to borrow far more than they were able to repay.

The Weekend Australian has also obtained dozens of emails between lenders and brokers that show the aggressive tactics of lenders used during the boom before the global financial crisis.

There include spruiking "ABN for one day" strategies, which helped borrowers on low incomes get bigger loans by providing them with an Australian Business Number to give the impression they were self-employed.

Under other schemes, typically asset-rich but income-poor homeowners were encouraged by brokers to "unlock" the equity in their homes by borrowing against them to buy investment properties. Because banks require evidence of a borrower's ability to repay loans, information such as income levels have in many cases been falsely inflated by brokers before being submitted to banks.

*...A string of recent court cases have found in favour of borrowers caught out by such behaviour, and ordered the banks -- who ultimately made the loans -- to forgive the debts on the basis they did not abide by their own lending practices in too easily accepting falsified broker applications.*

In light of such findings, banks are scrambling to settle with those borrowers who are aware they have been wronged. In many such cases banks have agreed to a reduction in debt owed, rather than a full waiving of mortgages as judges have ordered in some cases.

Westpac spokesman Danny John yesterday confirmed the bank had received "a number of claims" and that "these were resolved on a confidential basis".

Denise Brailey of the Banking and Finance Consumers Support Association, who has been tracking loan application fraud over the last six years, said she had received about 200 such complaints and there were likely to be "thousands" of such cases across the country.

Financial Ombudsman Service director Philip Field said the organisation had received a number of such complaints.

In a worrying turn for Australian banks, which have long held themselves out as having the most stringent lending practices in the world, Mr Field said the problem involved "a range of lenders".

"These sorts of complaints are made across a range of brokers and lenders, its not confined to any particular lender," he said.

An investigation by The Weekend Australian, in conjunction with Ms Brailey, has uncovered hundreds of emails illustrating aggressive practices of the lenders during the property boom.

In the emails, some lenders, including Macquarie Bank, spruik a low-documentation loan, which requires only a "1 Day ABN".

Lo-Doc loans were created to be used by self-employed borrowers who were unable to show traditional proof of income, such as pay slips or income statements. To safeguard against abuse of such products, borrowers are required to show they have an ABN to prove they are self employed. However many borrowers were encouraged to apply for and hold an ABN for just one day so as to meet that legal requirement. Macquarie Bank declined to comment yesterday."
_


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## Frank Ainslie (16 April 2012)

*QUESTIONS AND ANSWERS*

Okay! Let’s get these issues out of the way once and for all! I will answer the questions that some claim I haven’t responded to in the hope that these will satisfy those that have not accepted any explanations I have offered to date. I realize in so doing that I am once again inviting negative comment but I am prepared to take that chance. 

Originally posted by Doobsy:
_“No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1.	Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone._

If the Storm trigger-points *THAT HAD BEEN AGREED TO BY US* had been activated we would certainly have lost a great deal of money, but we wouldn’t have been wiped out! After all, these _'trigger-points' _were safety devices designed to protect what was left in our portfolios in a worst-case scenario. We would certainly not have agreed to them in the first place if such trigger-points were set at a _'point of no return' _which seems to be the assumption many here have made. It’s therefore logical to assume that such trigger-points had been set at an acceptable level that we had agreed to when we signed up with Storm.

It’s important to bear in mind when discussing _'trigger-points' _that the ones we agreed to were not the ones that Storm and the Banks subsequently agreed among themselves in separate agreements with the CBA and the Macquarie Bank. Further, unbeknown to Storm’s clients, the ratios that Storm worked on did not factor in such borrowings as investment loans on clients’ houses. Therefore, the 'trigger-points' ratios were completely distorted and, as a consequence, removed the level of safety that we had been assured by Storm was in place.

_2.	Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem._

No one in their right mind would have remained unaware that any borrowing we had made would have to be repaid. At the same time, however, such borrowings would have been covered if the trigger-points had kicked in when the ratios had been reached that we originally agreed to in Storm's SOA.

At the time when all this was occurring in late 2008, Storm was insistent that they had everything under control and we had nothing to worry about. We had paid Storm a great deal of money to act responsibly, and we therefore assumed that they were telling us the truth. We were at that time completely reliant on Storm  to advise us of the true position, and the best course of action to be take if and when such was needed. After all, they were the reputed experts in these matters, not us.

Storm never once asked us to hold on because they thought the markets would bounce back. It is evident now that Storm and the Banks thought exactly that, but we were never a party to such risk taking which is borne out by the fact that we were never consulted about or agreed to such a strategy. Our prime concern at that time was the safety of our portfolios and the minimization of any losses brought on by the GFC.   

Originally posted by SJG1974  
_As has been pointed out, the stock market didn't just fall off the edge of a cliff overnight; it fell over a period of 12 months. From the highs of late 2007, the market was down by 20% by the start of March 2008 (and given the powers of gearing, your portfolio would have been down by significantly more by then). 

I am guessing that you wouldn't expect to lose more than 20% in a matter of months by taking on a low risk strategy. So you should have known full well by this time (and much earlier in reality) that this wasn’t a low risk strategy at all. _

Not at all! During that period Storm’s clients were asked to bolster their investments to off-set market falls. After all, this was the Storm strategy that had been agreed to by us. If everything was as bad as you say it was, wasn’t it Storm’s responsibility as our financial advisers to monitor the markets and take any remedial action that they deemed necessary long before they did? 

The Storm setup was such that it was nigh on impossible to establish what the true position was because Storm did not have the software to do so. Of course, we didn’t know that at the time! 

Because Storm could never obtain a true position for any of us, being reliant on the Banks for additional information (margin loans) that would reflect the overall positions of Storm's clients, everyone was basically in the dark. This is bourne out by the fact that Storm was using spreadsheets in the latter part of 2008 based on information that was being drip fed from the CBA and the Macquarie Bank. Unbelievable but true!

_“So my first question is, when did you start to realise that this low risk, conservative gearing to the gills into shares strategy was nothing of the sort?”_

For the reasons mentioned above, we never realized until later that Storm’s strategy was a “high risk” one. It should also be remembered that it only became a “high risk” one because Storm did not have the inbuilt safety devices they claimed they had in place, and they did not take the appropriate action when they should have done!  

_“And secondly, upon realising it was not low risk (and given you have been very firm in saying you did not want a high risk strategy and didn’t think you were getting one) why did you elect to stay invested and to even increase risk by taking on more debt along the way?_”

As I have said before, Storm’s strategy was to invest more when the markets fell. In  doing just that, we were abiding by the agreement we had with them. Having said that, we relied on Storm to activate the _'trigger-points' _if this strategy became untenable.

_“Why didn’t you bail out at the first sign that things weren’t what you had been led to believe they were?”_
At no time did we become aware that a crisis point had been reached within Storm. How could we when no one had mentioned that our 'trigger-points' ratios had been exceeded and it was time to bail out. If we had known then what was happening behind closed doors we would certainly have taken matters into our own hands. However, we were not aware of any such thing, and furthermore we were constantly being assured that Storm had everything well in hand.

People tend to forget that we had paid Storm a considerable amount of money for handing our investments, and we expected them to do just that! That included everything from monitoring our portfolios, advising us of the courses of actions that we needed to take, and keeping our assets safe. 

Now, many may think that we were foolish, many may believe that we should have been more vigilant, and some may question why we went with Storm in the first place. However, at the end of the day, this is not about our motivation at the time or our reasons for deciding to go with Storm. Rather, it is about the motivation of those that were entrusted with our monies and the reasons why they did not act in our best interests. 

Whatever conclusions you draw about us is unimportant. The fact of the matter is that Storm and the Banks that were involved with that company were involved in wrongdoing. The maleficence that Storm and the Banks involved with that company were a party to when handling our assets has no part in any law-abiding society and should never be condoned by anyone that is fair minded. 

At the end of the day, this is not merely about a financial advisory firm handing out poor advice or Banks that were sucked in by that company. Rather, it is about a financial advisory firm that deliberately set out with intent to use its clients' assets to serve its own ends, and Banks that aided and abetted in such a scheme because it generated a source of income (a river of gold as it has been aptly described) that generated enormous profits for all concerned to the detriment of Storm’s clients. Storm's clients certainly didn’t benefit from such antics but instead incurred more and more debt and furthermore their assets were put at increasing risk. 

The fact that the PJC and the Worrells enquiry have all been strident in their condemnations of all concerned in this scheme, and ASIC (together with our lawyers) have now laid charges against the parties involved, is proof enough that this alliance was beneficial to no one other than those that concocted this rort. It may well have started as a financial advice with some merit but, like a lot of other schemes of its ilk, it ended up being perverted by people that were primarily motivated by greed! It is therefore ironic that we have some now saying  that we, the investors that used Storm, were the greedy ones when nothing could be further from the truth. Most of us that invested using the services of Storm were conservative types with an eye to the future and thoughts of a fruitful retirement, free from financial worry.

If we therefore seem a trifle grumpy at times and rail at the world in general, and more particularly the rogues that have placed us in this position, you will have to bear with us. However, if you were in our place, I somehow suspect that you would be just as jacked off as we are!

For those that will still remain unsatisfied by this explanation, well I really have nothing more to add. That’s the way it was so you can believe it or not! However, it just happens to be true!

Now that I have answered these questions perhaps someone would care to answer those I have asked?


----------



## Solly (16 April 2012)

> *"Storm case grapples with definition of 'customer'*
> 
> A CASE brought by the corporate regulator over the collapse of Storm Financial is shaping up as a battle over how far consumer laws protect bank customers."




More by Elizabeth Sexton @ smh.com.au


----------



## Julia (16 April 2012)

Frank Ainslie said:


> Hey Stormies!
> 
> Does this sound familiar to you? It seems that the Banks didn't confine their dirty deeds to Storm alone! Anyone out there that still maintains that the Banks are to be trusted and are working in the interests of their customers rather than themselves are, to my mind, suitable cases for treatment.
> 
> *From Weekend Australian*



Don't you actually read the thread?
I posted that on the 14th April.


----------



## Frank Ainslie (17 April 2012)

Solly said:


> More by Elizabeth Sexton @ smh.com.au




Hi Solly,

The Banks have always assumed that they are above the law where margin loans are concerned because no one has seriously challenged them on this issue. Of course, irrespective of whether consumer protection laws apply, there are also contractual laws to consider. However, if the Banks can prevail in their assertions that margin loans are not covered by consumer laws, it would be a telling set-back and make our cases that much harder to win. I am confident, however, that the Banks will lose this legal argument too!

You may recall that at a hearing in July last year, in the case of two Sydney doctors, Mark Irving and Anthony Oliver, the bank argued that the pair were not entitled to rely on the consumer credit law because their loans did not fit its definition of goods or services '_'ordinarily acquired for personal, domestic or household use''._
Justice Perram said he had ''_some sympathy with the idea that a margin loan facility is not for household or domestic purposes''_ but the bank had been unable to point to any legal precedent which established it. _''In those circumstances, this appears to me to be a triable issue,'' _he said.


----------



## bunyip (17 April 2012)

Frank Ainslie said:


> (1)	_*Were Stormies justified in relying entirely on their Storm Financial Advicers*_
> You have responded by stating, "Of course they weren't". Pardon???????????? I guess that's what comes of being in a "head-banging" club - long term concussion!
> 
> What rubbish and you know it! That’s exactly what this is all about! In law it’s called _“misrepresentation”_ but then I forgot, you know nothing about the law so I will forgive you for your ignorance. Let me therefore educate you where the law is concerned although I really feel you should have learned all about the law in school as some here have suggested.
> ...




(1) Of course Storm are guilty of misrepresentation – nobody on this forum, least of all me, has said any different.  After all, Storm led you to believe that their strategy was conservative, when in fact it was aggressive and highly risky. That alone was clearly a case of misrepresentation.
Nor have we said that it was OK for them to misrepresent the facts. 

But your question didn’t raise the issue of misrepresentation, your question was_* ‘Were Stormies justified in relying entirely on their Storm Financial Advisers’?*_
The answer to that question is clearly No – instead of accepting Storms plan at face value, prospective clients should have thoroughly evaluated the strategy before committing big money to it, much of it borrowed. 75% of prospective Storm clients did so, and walked away. 25% didn’t bother, and got caught as a result.
You don’t build a shopping center because someone tells you what a great investment it will be, you don’t buy a car or an investment property or a business because someone tells you how good it is. You listen to their views, but then do your own research and evaluation before committing your money. Stormers should have done the same instead of relying entirely on their Storm advisers. It’s called being astute and thinking for yourself.


(2) Storm misrepresented the facts in more ways than one, the simplest and most obvious example being in leading you to believe that a highly aggressive and risky strategy was safe and conservative.
If you’d conducted the simple research of looking at past market slumps, and considering how a similar slump would affect you, you would have known that Storm were deceiving you in selling their plan as safe and conservative.
Regardless of whether they were approved by ASIC or the FPA or whoever, a bit of simple research on your part would have revealed that Storm were misrepresenting the truth, and their plan was unviable.

Just for the record....In no way do I dismiss the responsibilites that financial advisers have to their clients. Storm clearly didn't live up to their responsibilities. 
So sue the former owners of Storm, and perhaps the advisers who worked for them.


----------



## SJG1974 (17 April 2012)

Frank,

I appreciate you taking the time to answer the questions.  

But I must say I am still confused.




Frank Ainslie said:


> Not at all! During that period Storm’s clients were asked to bolster their investments to off-set market falls. After all, this was the Storm strategy that had been agreed to by us. If everything was as bad as you say it was, wasn’t it Storm’s responsibility as our financial advisers to monitor the markets and take any remedial action that they deemed necessary long before they did?
> 
> The Storm setup was such that it was nigh on impossible to establish what the true position was because Storm did not have the software to do so. Of course, we didn’t know that at the time!




We know Storm stuffed up Frank.  We all accept that and I for one hope they pay. And in no way do I excuse their or the banks actions on any illegal wrongdoings.  But again, you have completely wiped your hands of any responsibility you had with your own money.

I take it from your post that you didn’t know your portfolio was losing value by the day until the very end?  That you never received statements from Colonial, never logged onto the Internet to see how it was going, never once saw the headlines in the paper shouting that so many billion dollars had been wiped off people’s superannuation portfolios, and never once wondered what was happening to your money during this time?

You claim you didn’t understand shares.  But you knew you had them. And yet when the All Ordinaries was shown on the nightly news losing another couple of percent a day, you never even thought you may be losing money? You never even thought to check?

There is a big difference between a conservative strategy that doesn’t want to put your money at risk and double gearing into shares.  A massive difference.  In your case, in excess of $1 million dollars difference.  And yet you couldn’t see this difference until you were completely wiped out?  All through the GFC you couldn’t see this difference…how much money did your conservative portfolio have to lose before you worked out it wasn’t conservative after all?  20%?  30%? 50%?  100%?

You see Frank, if I wanted a conservative strategy, and I saw my portfolio fall by say 20% in a matter of months (which is what the sharemarket did between late 2007 and March 2008- and bear in mind yours would have fallen by much more given the power of gearing), then I would be on the phone to my adviser asking him what the **** was going on and how the **** could my conservative portfolio lose so much money in such a short space of time. And I would have accused them of misrepresenting the risks, and I would have asked them to take my money out.  And I would have had a go at them about getting a refund of my fees.  And I would have sought legal action then and there to recover my losses. I wouldn’t have agreed to go back to the bank and borrow more to plonk on shares.  That much I can assure you.

I would have done everything imaginable to get out of a strategy that I didn’t want to be in, and be compensated for being misled then and there.  I would not have waited until it was all gone.



Frank Ainslie said:


> It should also be remembered that it only became a “high risk” one because Storm did not have the inbuilt safety devices they claimed they had in place, and they did not take the appropriate action when they should have done!




No Frank, it was high risk the day you signed your life away.  It doesn’t matter what triggers are in place to try and protect your money.  If you wake up one morning and the sharemarket is down 20% like it was in 1987, it doesn’t matter what trigger points you have.  So it wasn’t Storm’s inaction that made it risky.  It was just risky.  Full stop.

You have been kind enough to attempt to answer my questions, so I will answer yours.

You wanted to know how you could have been expected to see through all of this even when ASIC couldn’t?  Well, for a start, you didn’t need to see through all of it.  All you needed to see was that gearing into shares is not conservative.  That’s all.  Because as you have stated, you wanted low risk.  If you had have known it was high risk, you would not have gone there.

No one is saying you and other Stormies should have been able to uncover the intricate deals and relationships that Storm had with others behind the scene.  Its ridiculous to suggest you should have been able to see through all of that. I am not even sure that it is ASIC’s role to do that (it could be, I don't know...I haven't really got much interest in what they do)  But as we have heard and seen, they have a history of incompetence so it is hardly surprising that Storm slipped through the net.

The strategy itself was not illegal.  It was high risk, but not illegal.  I doubt it is ASIC’s job to quash every high risk strategy that is out there, because there will always be people willing to take the risk.  That was the case with Storm…we have heard from some Stormers that they knew the risks and went ahead. And I am sure that Storm would have been meticulous in taking file notes, in noting down that the risks were explained to the clients and they wanted to take these risks.  At the end of the day, you signed every page of the SoA saying you understood the risks, it isn’t ASIC’s job to go out and questions every Storm client as to whether they really understood what they were doing.  It has become he said/she said…Stormers saying they didn’t understand and Storm itself saying they did.  Who do we believe???

But what YOU should have been able to see was the difference between the low risk you wanted and high risk.  Because there is a difference…a massive difference….you know that now I’m sure.

Its been said probably one hundred times but I will say it again.  Some simple independent research by you would have uncovered the fact that this wasn’t low risk at all….and that should have been enough for you to stay away. Like it or not Frank, you dropped the ball on that one.


----------



## bunyip (17 April 2012)

SJG1974 said:


> Its been said probably one hundred times but I will say it again.  Some simple independent research by you would have uncovered the fact that this wasn’t low risk at all….and that should have been enough for you to stay away.
> Like it or not Frank, you dropped the ball on that one.




Too bloody right Frank dropped the ball. In fact, in one of the few posts in which he was honest about the role he played in helping to create the mess that he now finds himself in, Frank admitted *‘To be honest, we took our eye off the ball’.*

I have no doubt that Frank was an astute and capable man at some stage of his life – after all, he held responsible jobs, invested in a shopping center, and got himself into a position where he could enjoy a self-funded and deb-free retirement.
But once Frank walked into that Storm office and they dangled those dollar signs in front of his eyes, the astute and capable man became reckless and imprudent, and his capacity for clear thinking abandoned him.


----------



## bunyip (17 April 2012)

Frank Ainslie said:


> One more thing, Bunyip! Describing financial advisers as “_commission salesmen”_ is an obvious attempt by you to obviate their primary function which is to give sound financial advice to their clients based on their experience and training in financial matters. Dismissing them merely as_ “commissioned salesmen”_ to suit your argument once again reflects your deviousness when commenting on such matters.




Have a look at the numerous services provided by financial planners, then ask yourself how many of those services were offered to you by Storm. 
What Stom offered you instead of the usual FP services was a specialist yet very simple investment strategy of mortgaging your home and borrowing to the eyeballs to invest into the stock market.
Their 7% upfront fees structure, and their advice to borrow increasingly more money though ‘steps’ regardless of the condition of the market (7% of which was skimmed off the top to line their pockets) should have alerted you that this wasn't your usual financial planning firm offering the usual range of services, but was instead a bunch of commission salesmen with a vested interest in getting you to borrow heavily despite the risks.

A man like you who claims to have been astute and circumspect should have seen straight through it.
It almost beggars belief that someone of your experience with investment and debt could have been so pathetically naÃ¯ve that you were completely incapable of seeing Storm for what they were, and further were incapable of seeing the glaringly obvious risks in the strategy.

You’re living proof of the old adage...*’A fool and his money are easily parted’.*


----------



## Garpal Gumnut (17 April 2012)

I am going to whisper this.

You are all starting to really piss me off with this conversation of the deaf. I and most posters on ASF are sick and tired of aimless posts going over and over and over these "conversations" between Stormers and Investors discussing the motivations of Storm victims, their financial intelligence and motives. I myself am a greedy bastard and admit it. Some can't. That is it. Finito. Let us move on to more substantial elements of this saga. 

ps  Long posts also piss me off.

If this does not deter the conversation of the deaf I shall have to get Nanny Whip to visit you all and spank your botties.

gg


----------



## jjtebj12 (17 April 2012)

Garpal Gumnut said:


> I am going to whisper this.
> 
> You are all starting to really piss me off with this conversation of the deaf. I and most posters on ASF are sick and tired of aimless posts going over and over and over these "conversations" between Stormers and Investors discussing the motivations of Storm victims, their financial intelligence and motives. I myself am a greedy bastard and admit it. Some can't. That is it. Finito. Let us move on to more substantial elements of this saga.
> 
> ...




Agree the conversations are boring and with no substance!


----------



## Ijustnewit (17 April 2012)

jjtebj12 said:


> Agree the conversations are boring and with no substance!



 + 1


----------



## Garpal Gumnut (17 April 2012)

Could someone update me on the upcoming legal actions in relation to Storm.

And I do not want any bush lawyers giving me their expertise.

Just the different actions coming up, about Storm, perhaps on a timeline, e.g Investor Actions, ASIC, CBA, BOQ, Storm, Cassimatis', Failed Financial Advisers and any others , so that we can dissect the action.

gg


----------



## bunyip (18 April 2012)

Here’s some advice for those of you who are critical of the recent posts on here...

1. Don’t read the posts of people who annoy you. 
Or better still, block their posts by using the ‘Ignore’ function mentioned by Julia. https://www.aussiestockforums.com/for...?do=ignorelist

2. Start contributing something worthwhile yourselves, instead of criticising those who make an effort to contribute to this thread. 
Anyone can lurk in the background, and come out occasionally to criticise. But it takes a bit more substance to put forward your own views on the causes of the Storm debacle, and how future investors can avoid getting caught by dodgy investment schemes.
You say the posts are boring and lacking in substance. OK then, I look forward to your interesting and stimulating posts that have some substance.


----------



## Solly (18 April 2012)

Garpal Gumnut said:


> Could someone update me on the upcoming legal actions in relation to Storm.
> 
> And I do not want any bush lawyers giving me their expertise.
> 
> ...





Standby GG, 

There's some interesting material coming in the pipeline.

Agree, Bush Lawyers are dangerous, especially when they prove their lack of grasp and go on record in the Public Domain.

S


----------



## Frank Ainslie (18 April 2012)

Garpal Gumnut said:


> I am going to whisper this.
> 
> You are all starting to really piss me off with this conversation of the deaf. I and most posters on ASF are sick and tired of aimless posts going over and over and over these "conversations" between Stormers and Investors discussing the motivations of Storm victims, their financial intelligence and motives. I myself am a greedy bastard and admit it. Some can't. That is it. Finito. Let us move on to more substantial elements of this saga.
> 
> ...




Hi GG,

Nothing like a bit of flagellation in the mornings! Seriously though, I couldn't agree with you more!

For my part I am perfectly willing to move on and therefore will ignore any further postings addressed to me that are covering old ground. 

There are going to be many interesting aspects of this case arising in the future, particularly when the trial starts and I, and I am sure many others, would like to focus our discussions on such rather than continually discuss what happened in the past! Such past happenings have been done to death by now anyway! 

So I say, let's do just that!


----------



## Garpal Gumnut (18 April 2012)

Frank Ainslie said:


> Hi GG,
> 
> Nothing like a bit of flagellation in the mornings! Seriously though, I couldn't agree with you more!
> 
> ...




You are a good bloke Frank.

Take the guilty as you find them.

gg


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## Frank Ainslie (19 April 2012)

Garpal Gumnut said:


> Could someone update me on the upcoming legal actions in relation to Storm.
> 
> And I do not want any bush lawyers giving me their expertise.
> 
> ...




Hi GG,

I'll tell you what I know!

In the last hearing, directions and orders were made by His Honour, Mr Justice Reeves, for the further  conduct of the Richards -v- Macquarie Bank, the Sherwood et Ors -v- CBA and Colonial First State, and the ASIC Proceedings (namely the Levitt Robinson Class Actions, and the ASIC Proceedings), in the months leading up to 10 September, 2012, which is the scheduled trials' start date. 

Apparently, there are several directions hearings, and many issues to be determined and applications to be made and heard, all prior to 10 September, 2012.

The matters next come back before His Honour on 24 May, 2012 in Sydney. All of the pending Class Action and ASIC proceedings will be listed before Justice Reeves *in Sydney *on that day.

The Bank of Queensland Class Action will be commencing within the week and it should be well under way in the Federal Court of Australia *in Sydney *by that date.

With regard to the Cassimatises, the proposed summary judgment and strike-out applications are, I believe, set down for hearing for three days, commencing 15 May 2012 at 10:15am. The proceedings are listed for any further directions on that day.

I'll keep the forum further posted as more details come to hand.


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## bunyip (19 April 2012)

Frank Ainslie said:


> Hi GG,
> 
> Nothing like a bit of flagellation in the mornings! Seriously though, I couldn't agree with you more!
> 
> For my part I am perfectly willing to move on and therefore will ignore any further postings addressed to me that are covering old ground.




LOL....Frank, this must be about the twentieth time you’ve said you’ll ignore postings and won't be responding any further, etc etc. But you always come  back to fight another round!

Just a couple of points from one of your previous post that I want to comment on.......

You claimed that Storm’s strategy only became high risk when Storm failed to put in place the inbuilt safety devices that you and they agreed on, and when they failed to take the appropriate action that they should have taken.
And yet in the same post you admit that you would have lost ‘a great deal of money’ even if the trigger points that had been agreed to by you had been activated.
It’s a bit of a stretch to suggest that the strategy wasn’t high risk, despite the fact that you admit would have lost ‘a great deal of money’ even if Storm had acted precisely in accordance with your agreement.
Any strategy that could lose you ‘a great deal of money’ sure looks high risk to me.

The strategy was always risky, Frank, irrespective of what Storm did or didn’t do in relation to trigger points. 
It was risky because it invested in just one market, rather than spreading the money around between different investment areas.
It was risky because it put the family home at risk at a time in life when most Stormers would have no time to recover if things went wrong.
It was risky because the market chosen for investment is volatile with a history of spectacular crashes, some of which have taken a quarter of a century for the market to recover from.
It was risky because the high level of borrowing greatly magnified losses when the market started falling. 
It was risky because a bear market would destroy the strategy, and bear markets are inevitable.
It was risky because if the market had opened 20% lower than its close of the previous day (as happened in ‘87) the safety devices that were supposedly in place would have been completely useless.


----------



## Frank Ainslie (19 April 2012)

bunyip said:


> LOL....Frank, this must be about the twentieth time you’ve said you’ll ignore postings and won't be responding any further, etc etc. But you always come  back to fight another round!
> 
> Just a couple of points from one of your previous post that I want to comment on.......
> 
> ...




Please refer to GG's posting a little earlier

_"You are all starting to really piss me off *with this conversation of the deaf*. I and most posters on ASF are sick and tired of aimless posts going over and over and over these "conversations" between Stormers and Investors discussing the motivations of Storm victims, their financial intelligence and motives."_

He whispered it so perhaps you had trouble hearing him? Therefore, I am now repeating it loud and clear! 

Have a good day!


----------



## SJG1974 (19 April 2012)

Frank Ainslie said:


> Please refer to GG's posting a little earlier
> 
> _"You are all starting to really piss me off *with this conversation of the deaf*. I and most posters on ASF are sick and tired of aimless posts going over and over and over these "conversations" between Stormers and Investors discussing the motivations of Storm victims, their financial intelligence and motives."_
> 
> ...




No, we wouldn't want to piss gg off now would we Frank? 

He plays his flute and the mice start to follow.  Interesting.


----------



## bunyip (19 April 2012)

Frank Ainslie said:


> Please refer to GG's posting a little earlier
> 
> _"You are all starting to really piss me off *with this conversation of the deaf*. I and most posters on ASF are sick and tired of aimless posts going over and over and over these "conversations" between Stormers and Investors discussing the motivations of Storm victims, their financial intelligence and motives."_
> 
> ...




Thanks Frank – I knew you’d take another swing at me despite all your talk of ignoring me.
And I didn’t really think you’d address the points I’ve raised, even though they’re perfectly relevant to a discussion of the Storm debacle.

You have a good day too, ol’ mate.


----------



## Frank Ainslie (19 April 2012)

SJG1974 said:


> No, we wouldn't want to piss gg off now would we Frank?
> 
> He plays his flute and the mice start to follow.  Interesting.




Frankly, I think you have already pissed him off and quite a few others on this forum as well by continually using the same material and pursuing the same theme. 

Let's be quite frank! You are not going to change your opinion and neither am I so what's the point of you and some others _"pushing your barrow"_ when we all know full well how you feel by now? 

In Chess parlance, its called a '_stalemate'_.I can live with that and so must you.

Incidentally, deafness is defined as:

1. Partially or completely lacking in the sense of hearing.
2  Of or relating to the Deaf or their culture.
3. Unwilling or refusing to listen.
4. A community of deaf people who use Sign Language as a primary means of communication.

I will not be answering any more questions that I have been asked countless times before. It would be unfair anyway because I can't do sign language and you can't read my lips. 

I think GG has made it plain enough! It's his forum and he makes the rules! If you don't agree with them so be it. I'm sure there are other forums around that would be glad to hear your views on we Stormies - just not this one because we already know them, word for word, and there are far more interesting things to discuss.

I know it's frustrating for you but you'll just have to get over it. You can, of course, persist but you will only be wasting your time because THEY WILL REMAIN UNANSWERED BY ME! There, I'm shouting now because I know you and 'Bunyip' have a hearing problem.

Go and have a beer. It's really too hot (in Brisbane, that is) to get all upset and a few drops always makes the world seem a better place anyway.


----------



## SJG1974 (19 April 2012)

Frank Ainslie said:


> In Chess parlance, its called a '_stalemate'_.I can live with that and so must you.




Fair call Frank.  I will go and down that beer now...maybe more than one.


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## bunyip (19 April 2012)

Frank Ainslie said:


> Frankly, I think you have already pissed him off and quite a few others on this forum as well by continually using the same material and pursuing the same theme.
> 
> I think GG has made it plain enough! It's his forum and he makes the rules! If you don't agree with them so be it.
> 
> Go and have a beer. It's really too hot (in Brisbane, that is) to get all upset and a few drops always makes the world seem a better place anyway.




Frank ol’ son.....I think most of us who are forthright in expressing our views on a public forum are always going to piss off someone. But judging by the lambasting you’ve copped from so many people on this thread, it’s pretty clear that you’ve pissed off more people than the rest of us put together. 

As for _'pushing your barrow'_ and _‘continually using the same material and pursuing the same theme’ _– I reckon you’ve done that as much as anyone has.

Just for the record, let me correct your misconceptions about GG......this is _*not*_ his forum, and he _*does not*_ make the rules. He started this thread, but he’s not a moderator and he's no more entitled to make the rules than you or I are.
It wasn’t so long ago that GG himself was embroiled in many a spirited exchange with a number of Stormers who thought he was a complete pain in the a*se.

Read the other threads on the forum and you’ll see many a fiery exchange. If you or anyone else can’t handle it, you can always leave.

Hope you enjoy that beer - I might even have one myself!


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## Frank Ainslie (19 April 2012)

bunyip said:


> Frank ol’ son.....I think most of us who are forthright in expressing our views on a public forum are always going to piss off someone. But judging by the lambasting you’ve copped from so many people on this thread, it’s pretty clear that you’ve pissed off more people than the rest of us put together.
> 
> As for _'pushing your barrow'_ and _‘continually using the same material and pursuing the same theme’ _– I reckon you’ve done that as much as anyone has.
> 
> ...




Good on you! Have one or two for me as well!


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## Julia (19 April 2012)

Frank Ainslie said:


> I think GG has made it plain enough! It's his forum and he makes the rules!



Wherever did you get that idea???
Joe Blow owns and runs the forum.

gg has no more authority here than any of the rest of us, so there's probably no really good reason to suck up to him.

He has, however, started many interesting threads, has great facility with the succinct phrase, and can be relied on to make most of us laugh during the course of any given day.  If for no other reason, that makes me grateful for his frequent presence.

He also demonstrates extreme skill at playing both sides of the fence.


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## explod (19 April 2012)

Those who were caught up in this dreadful business need to mull it over and let off steam.

I lost a fortune some nine years ago now to a dreadful property investment and I am still angry and trying to reconcile the rotten side of society.

So patience and latitude ought to be a regulation in this particular thread and those who have not made mistakes and are pure are best to bypass.

And I also, from a number of experiences, not just my own, realise that the *boss* may have a few hands.


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## StumpyPhantom (20 April 2012)

explod said:


> Those who were caught up in this dreadful business need to mull it over and let off steam.
> 
> I lost a fortune some nine years ago now to a dreadful property investment and I am still angry and trying to reconcile the rotten side of society.
> 
> ...




Good one - Explod. Disagree with your politics elsewhere but furiously agree here. I feel extremely sorry for Stormers who have spent their whole life getting to this point.

Going through all the emotions is one thing (and necessary). But leave a little space and energy to do something constructive and let that occupy a bigger space over time.

This might never be completely behind you but also need to make the best of the time left. Any Stormers with ideas on that front to take this thread forward for awhile?


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## Junior (20 April 2012)

Great post explod, I too, furiously agree.

I'm very interested in this whole Storm saga, and keen to learn about any outcomes still to be determined.  Personally I believe all involved parties deserve a portion of blame for what has occurred.  I sincerely hope the banks absorb a decent whack of the losses, as they have the resources to do so, and at the end of the day engaged in some unethical lending practises.

It's unfortunate that this thread has been going round in circles for a while now, because this is an intriguing story which has yet to be resolved.

For the victims of Storm, I hope you can eventually move on from all of this.  You cannot change what has happened, but you can take lessons from it and determine your future.  In the meantime continue your battle against the banks and achieve the best possible outcome there.


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## DocK (20 April 2012)

Junior said:


> Great post explod, I too, furiously agree.
> 
> I'm very interested in this whole Storm saga, and keen to learn about any outcomes still to be determined.  Personally I believe all involved parties deserve a portion of blame for what has occurred.  I sincerely hope the banks absorb a decent whack of the losses, as they have the resources to do so, and at the end of the day engaged in some unethical lending practises.
> 
> ...




The moving on aspect is very worthy of discussion imo.  I think it might be easier for some than others, obviously depending on the degree of financial devastation experienced, but also I think on personality type, support from family and friends, age and experience.  Accepting that you can't change what has happened and not only your financial wellbeing but also your hopes and aspirations for the future, your way of life and sometimes your standing in your family/community has changed irrevocably is something that takes time to get your head around.  Sadly, some ex-stormers have found it impossible or just too painful, while others continue to experience poor health as a side-effect.  

Personally, after a period of bitter self-recrimination and mourning for the loss of my money, self-esteem and plans for the future, I realised that bitterness and depression weren't going to help me in the slightest.  Gaining knowledge, confidence, and formulating a plan to try to recover some of what has been lost is far more productive than looking back at what might have been, for me.  Fighting legal battles is what motivates some to get out of bed in the morning.  I say do whatever makes you feel better about yourself and your situation and to hell with those who would put you down and seek to make you feel small.  We might all take different lessons from our stormy experience - from a better grasp of the perils of leverage to a more cynical and distrusting attitude towards so-called "experts", or maybe just a discovery of what's really most important in life.  For most of us life goes on - focussing on determining our futures is far more important imo than dwelling on what we shoulda/coulda done.

Good post Junior - and those from explod and stumpy.  It's nice to read some input that differs from the norm on this thread, as its circular nature of late has no doubt been frustrating to many.


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## Julia (20 April 2012)

DocK said:


> The moving on aspect is very worthy of discussion imo.  I think it might be easier for some than others, obviously depending on the degree of financial devastation experienced, but also I think on personality type, support from family and friends, age and experience.  Accepting that you can't change what has happened and not only your financial wellbeing but also your hopes and aspirations for the future, your way of life and sometimes your standing in your family/community has changed irrevocably is something that takes time to get your head around.




Yes, hugely difficult, but necessary if your life is not going to be submerged.  



> Personally, after a period of bitter self-recrimination and mourning for the loss of my money, self-esteem and plans for the future, I realised that bitterness and depression weren't going to help me in the slightest.  Gaining knowledge, confidence, and formulating a plan to try to recover some of what has been lost is far more productive than looking back at what might have been, for me.



Much wisdom here.  And, as you have pointed out, age makes a difference.  Your being able to work for some while before retirement must help in the recovery process.
Good luck.


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## Frank Ainslie (21 April 2012)

Junior said:


> Great post explod, I too, furiously agree.
> 
> I'm very interested in this whole Storm saga, and keen to learn about any outcomes still to be determined.  Personally I believe all involved parties deserve a portion of blame for what has occurred.  I sincerely hope the banks absorb a decent whack of the losses, as they have the resources to do so, and at the end of the day engaged in some unethical lending practises.
> 
> ...




Hi Junior,

There are many like you that are interested in this whole Storm saga and want to get to the bottom of what really occurred! Until the full facts are revealed in Court none of us will know the complete story so we can only comment on the evidence to hand. However, in the last few years a picture is emerging that does enable us to make a fair assessment of the situation.

There are certainly lessons that can be learnt by any would-be investors in the future from what did occur, and anyone that is now considering investing using financial advisors should be mindful of these so that they can avoid another Storm.

It would be foolish of us that have been caught up in this disaster to completely dismiss the comments of those on this forum that have been critical of people that invested in Storm because some of their criticism has some merit. In business, I have always worked on the premise that you should never operate in a market that you do not fully understand or give complete control to another party without having a means of monitoring that party’s performance. We were certainly too trusting where Storm was concerned, and we did not realize the many pitfalls that existed such as poor regulatory controls, inadequate PI insurance, the Banks’ lack of concern for their customers’ welfare and so on. History teaches us that if people do not learn from what occurred in the past, others are doomed to make the same mistakes again. Make no mistake! There will be another Storm somewhere down the tracks because this Government has still not set the bar high enough!

It is unfortunate that many of the important issues in this saga have been buried in postings on this forum that are aimed at _“winning points” _(I too have been guilty of this!) rather than concentrating on what occurred and establishing HOW would-be investors can benefit from our mistakes. People may respond to this by saying, “_This is exactly what we have been trying to do!”_ However, when so doing, they fail to realize that they are commenting from a position where they are not fully informed of the facts. Only when they are can they make informed judgements or suggestions based on what actually occurred that will be productive. 

I welcome your recent posting and those of explod, Stumpy, Dock and Julia because they demonstrate a degree of understanding and echo Explod’s sentiments,_ “So patience and latitude ought to be a regulation in this particular thread” _because there are thousands caught up in this disaster and they are not coping well! Further, they are not encouraged to post if they are then lambasted for their views. In my case, people can say all they want because I have the skin of an elephant. Others are in a more fragile state, and are in more desperate circumstances than me so they find it difficult to fight back. That’s perfectly understandable! I would probably be the same in their position. However, in order to fully understand what really did occur, I believe more 'Stormies' need to post on this forum telling us how it was for them. 

There is a delete button if some posters still persist in going over old ground that I have now hooked up to some TNT to give their arguments a little more force! On second thoughts, the Banks make a far more enticing target. Seriously though, this is a public forum and all are welcome that have something to say. We also live in a democracy so everyone’s views should never be discouraged. Fortunately, we have the DELETE button handy and, when all is said and done, we don’t have to respond either!

At the end of the day, we, the people that have suffered in this financial disaster are not seeking anyone's approval for what we have done in the past, but rather their understanding of what happened to us. No one is immune from those in our society that set out to deceive. No institution in our society is above the law and we, the people, should never allow them to be.


----------



## DocK (21 April 2012)

Well said Frank.


----------



## Ijustnewit (21 April 2012)

Yes nice stuff Frank. I've also been guilty of getting a little hot under the collar as well. Bitter pills are hard to swallow.Some days It just seems like a mountain or one hill too far, knowing for one year of Financial Advice that I would be working till they carry me out in a bag. I think some days, gee some criminals get a lesser sentence than this . Anyway one foot after the next and just keep going I guess.
A tiny little bit of understanding goes a long way on moving forward. I think the recent posts are evidence of this.


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## Julia (21 April 2012)

DocK said:


> Well said Frank.




I totally agree. 

  Frank, when you put up a sincere and thoughtful post like that, my reaction is respect and sympathy.   

Although some of us have emphasised the need for taking personal responsibility in all investment decisions, I do understand that the financial world can appear immensely complex and therefore the willingness to trust someone you expect to be giving you advice which is genuinely in your best interests is probably understandable.

I think some of the bad feeling on this thread has been for the usual reason on forums, i.e. heated feelings provoke personal attacks instead of sticking with the impersonal financial issues.
No one likes being insulted.

I don't underestimate how difficult it is to admit on a public forum that you could have managed a situation better.   It takes insight and courage.
Please accept my appreciation and best wishes.


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## StumpyPhantom (21 April 2012)

Frank Ainslie said:


> At the end of the day, we, the people that have suffered in this financial disaster are not seeking anyone's approval for what we have done in the past, but rather their understanding of what happened to us. No one is immune from those in our society that set out to deceive. No institution in our society is above the law and we, the people, should never allow them to be.




Frank, IjustnewitT, as a recent surfer into this thread, I - like Julia - recoiled with horror at the criticism I read from a (presumably) non-Stormer.

I decided to add my voice, not just in sympathy, but in support.  The reality is that every lifetime sees a at least a dozen scammers at your door (I'm currently the victim of a builder that went bust in January!), so it's about 50/50 the ratio of falling victim to such people, whatever one's state of naivity, trust etc..

So, I'm practising what I'm preaching about looking forward, with a constructive mindset, slowly leaving the bitterness behind by opening up blue boxes every day, and planning ahead.

But especially for Stormers, it will be a matter of 2 steps forward, 1 step back because of the scale and enormity of the disaster, and its timing relative to the GFC.

And whilst it's hard to put the money issue to one side, it's also the case that the most constructive repair work can be done around the human relationships that were scarred because of this disaster.

It's very very hard to tame and harness that internal spirit of forgiveness (for your loved ones) when the only impulse out of the whole Storm saga is overwhelming bitter recrimination and the need for vengeance.

But therein lies the challenge, so no time to waste!  And all the best of luck.


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## Frank Ainslie (22 April 2012)

Julia said:


> I totally agree.
> 
> Frank, when you put up a sincere and thoughtful post like that, my reaction is respect and sympathy.
> 
> ...




Hi Julia,

Your posting is spot on! As you say, _“No one likes to be insulted”_ and our first inclination is to hit back. 

In the years since Storm’s collapse I have striven to get to the bottom of what really happened to us. In that time I have aired my views in public and on various forums. When so doing, I have been subjected at times to personal abuse from various quarters even within our own ranks. People have often sought to impugn my actions and have also questioned my motives for acting as I do. I can live with that because I know deep down that our cause is a just one and any efforts I personally expend will be worthwhile in the end.

There are many stories of personal deprivation that people have experienced as a result of the Storm collapse that will never be mentioned on this forum. The crushing circumstances that they now find themselves in are just too painful for them to convey to others. They are in a black hole mentally and they can see no way back at this time. And yet, I say to them now that the worst of it is behind us all and our day in Court is fast approaching. I urge them to _“Hold on!”_ because there is now light at the end of the tunnel. I am confident that we will all eventually emerge from these shadow lands and walk again in the sun.

Personally, I have never been able to understand how some human beings can put their welfare before others. How their insatiable appetite for the acquisition of wealth can override their consideration for the well being of those that they use to acquire such. The end never justifies the means if a wake of human misery is left as a result. In their quest for personal aggrandizement, they have missed the whole point of what our lives are really all about.

As Dock has quite rightly said, _“For most of us life goes on - focussing on determining our futures is far more important imo than dwelling on what we shoulda/coulda done”. _What’s done is done and we cannot undo it! Rather, we should now be looking to give it everything we have. If we fail, then so be it, but we will do so knowing that we could have done no more. We will fail while daring greatly. What more can any of us ask of ourselves than that?

I thank you for your considered posting and your understanding. Let’s hope we can now all move forward and use this forum in a productive way so that those follow can benefit from our experiences and avoid the pitfalls that still exist within the financial sector.


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## Garpal Gumnut (22 April 2012)

Julia said:


> I totally agree.
> 
> Frank, when you put up a sincere and thoughtful post like that, my reaction is respect and sympathy.
> 
> ...






Frank Ainslie said:


> Hi Julia,
> 
> Your posting is spot on!
> As Dock has quite rightly said, _“For most of us life goes on - focussing on determining our futures is far more important imo than dwelling on what we shoulda/coulda done”. _What’s done is done and we cannot undo it! Rather, we should now be looking to give it everything we have. If we fail, then so be it, but we will do so knowing that we could have done no more. We will fail while daring greatly. What more can any of us ask of ourselves than that?
> ...




Two great posts.

gg


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## SJG1974 (22 April 2012)

Frank Ainslie said:


> Hi Junior,
> 
> There are many like you that are interested in this whole Storm saga and want to get to the bottom of what really occurred! .........




Frank, without a doubt that is the best post you have made on this forum (the quoter would not enable me to post the whole post).

As i have said to you before, I sincerely hope you get justice for what has happened to you.  We have had our disagreements, but that in no way means that I believe people deserved to be screwed by anyone, nor does it mean I want to rub your nose in the dirt.  It is a terrible scenario for all involved....one I wouldn't wish on anyone.

Hopefully everyone on here has learned something, no matter how hard it may be to take.  I certainly know I have.

Best of luck to all...I sincerely mean that.

And Frank, the Stormers are lucky to have someone as hard working, diligent and single (bloody!) minded in their corner working for them.  Whilst we may disagree on different things, I don't think anyone could possibly criticise you for the work you are doing behind the scenes to recover what was taken from you.


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## Julia (22 April 2012)

Goodness, I can feel a group hug coming on!


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## Frank Ainslie (22 April 2012)

SJG1974 said:


> Frank, without a doubt that is the best post you have made on this forum (the quoter would not enable me to post the whole post).
> 
> As i have said to you before, I sincerely hope you get justice for what has happened to you.  We have had our disagreements, but that in no way means that I believe people deserved to be screwed by anyone, nor does it mean I want to rub your nose in the dirt.  It is a terrible scenario for all involved....one I wouldn't wish on anyone.
> 
> ...




Hi SJG1974

Thanks! I really do appreciate your good wishes for our future success, and I am sure many others on this forum that have suffered in this ordeal do so as well. 

The Storm debate no doubt will rage for many years to come and a book or two will be written about Storm and the Banks in the course of time. Further, many of us of my generation will fade away literally and it will be left to our children and grandchildren to remember; those same children and grandchildren that prompted many of us to invest in Storm to start with so their futures could be assured. Life is certainly full of ironies because many of these same folk now have their children looking after them instead of the other way around. 

Normally the victims of a disaster such as this would evaporate and the Banks involved would go blissfully on doing business unmindful of the devastation they have wrought on people’s lives. This time, however, they have miscalculated because there are just too many of us! They also made the mistake of inflicting this on a good many elderly people that are parents and grandparents. The ripple affect where their families are concerned should never be underestimated by those Banks that were involved with Storm because it will carry across generations.

_“Hopefully everyone on here has learned something, no matter how hard it may be to take. I certainly know I have.”_

That’s really an insightful statement to make because it says a lot about you personally. Every day presents us all with the ability to grow if we open our minds to others and are willing to listen and duly consider their position as well as ours. That doesn't mean that you need accept such because we all have our own opinions and that is as it should be.

I have no doubt that we will lock horns again because we have differing views about all this, and this is not a bad thing because it does open up any debate. However, I believe such discourse should always be tempered with mutual respect, and the acceptance that we are all entitled to our opinions. There is no doubt that opinions can change, but they only do so, if at all, by cogent argument and sound reasoning. I am hopeful that we have now reached that point where we can all discuss anything that arises amicably in the months ahead without resorting to personal abuse. I will do my bit in this regard!

As for the remarks you have made about me personally, I thank you once again. However, as I have said before, there are many out there that are doing it far tougher than I am, and they are the ones that merit the most praise. Actually, one of my heroes although she doesn't know it, is Helen, my other half, who works back in the shop we use to own (in the shopping centre we use to own) twice a week. How humiliating that must be and yet she never complains and is always cheery. In her spare time she strives to help others with their health and has never once stopped putting in. Can I afford to do less? She is indeed the wind beneath my wings!


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## Solly (22 April 2012)

Hi Frank

Don't forget, if required, there are still plenty of spare seats in this George Street Special Maxi-Taxi for those proven to be guilty.


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## Frank Ainslie (23 April 2012)

StumpyPhantom said:


> Frank, IjustnewitT, as a recent surfer into this thread, I - like Julia - recoiled with horror at the criticism I read from a (presumably) non-Stormer.
> 
> I decided to add my voice, not just in sympathy, but in support.  The reality is that every lifetime sees a at least a dozen scammers at your door (I'm currently the victim of a builder that went bust in January!), so it's about 50/50 the ratio of falling victim to such people, whatever one's state of naivity, trust etc..
> 
> ...




Hi Stumpy!

Great name, that!

Welcome to the debate! I see that your legs have been cut off too by those that set out to deceive. In life most of us will have a similar experience that will either make or break us. However, I have always found that it is pointless to be bitter or condemn human kind when something like this happens because for every charlatan, there is always someone out there that is truly in inspiring and seeks after good. Our family and friends (true friends, that is) have really stood by us in all this, and we have much to be thankfully for! I will certainly not forget them when all this is over and the support they have provided that has made the way forward all that much easier.

There are many ‘Stormies’ that have chosen a different path by keeping their troubles to themselves, and by so doing, have chosen the most difficult path of all. _“A trouble shared is a trouble halved!”
_
_“But therein lies the challenge, so no time to waste!_

That’s a great attitude to have! When all is said and done, money is not the be-all of everything but rather a means to an end. Life goes on and so must we. It’s still a wonderful world and we should be grateful for the fact that we are all part of it. We can survive anything if we stay positive and see any set back as a challenge rather than an end of things.

May you be successful in your future endeavours and I look forward to your future postings.


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## jjtebj12 (24 April 2012)

CBA it's been nearly 4 years since you sold my asset without my authority. Now you are hellbent on squeezing my financial capability as you push to end the class action with your endless amounts of money.  Well I'm in control this time and will stay in control. I and many others have saved for this rainy day so we will run this case and all the deception before and after the Storm collapse will be revealed.


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## StumpyPhantom (24 April 2012)

jjtebj12 said:


> CBA it's been nearly 4 years since you sold my asset without my authority. Now you are hellbent on squeezing my financial capability as you push to end the class action with your endless amounts of money.  Well I'm in control this time and will stay in control. I and many others have saved for this rainy day so we will run this case and all the deception before and after the Storm collapse will be revealed.




That's the critical thing, dear colleague.  CONTROL!  That element alone is empowering so it's important to keep hold of.  The other thing a mentor taught me a long time ago is to focus only on those things that you CAN control.

That - and the fact that when you're in a pitched battle.  Choose the right guys to be on your side.  For mine, I choose you Stormers!!


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## jjtebj12 (24 April 2012)

I don't trust too many people these days, however I do trust my legal people as I know its disgraceful from the compiled evidence what has gone on.


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## Garpal Gumnut (24 April 2012)

StumpyPhantom said:


> That's the critical thing, dear colleague.  CONTROL!  That element alone is empowering so it's important to keep hold of.  The other thing a mentor taught me a long time ago is to focus only on those things that you CAN control.
> 
> That - and the fact that when you're in a pitched battle.  Choose the right guys to be on your side.  For mine, I choose you Stormers!!






jjtebj12 said:


> I don't trust too many people these days, however I do trust my legal people as I know its disgraceful from the compiled evidence what has gone on.




jjtebj12,

Mate just follow Stumpy's advice. Stay in control. The legal people are last in line to take their bite out of Storm investors.

And read all the posts from the first on this thread, to this one.

gg


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## Frank Ainslie (26 April 2012)

jjtebj12 said:


> I don't trust too many people these days, however I do trust my legal people as I know its disgraceful from the compiled evidence what has gone on.




Hi jjtebj12!

An interesting article by Chris Merritt – Legal Affairs Editor appeared in the THE AUSTRALIAN on 23rd April entitled _‘Chief justice blasts ethos of `the billable hour'_: This article outlines NSW Chief Justice Tom Bathurst's attack on Australia's largest law firms 

I am not a subscriber to this newspaper and therefore could not provide an Internet link. I have therefore scanned it and have quoted it in full at the end of this posting. 

GG has stated _“The legal people are last in line to take their bite out of Storm investors.” _His cynicism is not totally unjustified. The aforementioned article if nothing else highlights the fact that the Law is a business and lawyers are in it primarily to wring money out of clients. It is becoming even more so as time goes on. There are few if any lawyers that ply their trade for altruistic purposes because they need to make a profit. 

I have had some unfortunate experiences with incompetent lawyers during the course of my business life which has left me just as cynical as GG. Like some doctors, they can be very condescending to their clients and many of them display a certain hubris – a _“we know best”_ attitude when often times they don’t. Our experiences with Storm have made me even more mistrustful when dealing with so-called experts in  any field.

Since this all began, we (Helen and I) have fired one law firm and have been let-go by another. We started off using a company called Holman Webb on the recommendation of our accountants. Unfortunately, they left me to do all the work whilst they did all the charging! When Slater & Gordon appeared on the scene, we thought that they were a more viable option and switched to them. It seemed a good idea at the time! 

It became apparent to me sometime in 2009 that S & G who had been employed by many ‘Stormies’ to negotiate on their behalf with the CBA seemed to be acting in their own interests rather than the interests of their clients. I think this is one of the law firms NSW Chief Justice Tom Bathurst is referring to in the aforementioned article. To my mind, they fit the bill nicely!

When I wrote a letter of complaint to Damien Scattini pointing out that the CBA resolution scheme was a joke, listing my reasons in law for arriving at this conclusion, he responded as any good legal mercenary would by firing us as clients. Fortunately, Levitt-Robinson, who had always impressed me with their zeal, were on hand to catch our file. LR had, I felt, been making the right noises from the start whilst the others were going through the motions.

That doesn’t mean, however, that I am going to leave it entirely to them as our lawyers, because they are not sacrosanct and you should never treat them as such. If Storm taught us nothing else, it should have taught us to ask questions when we have doubts and ensure that we fully understand the answers provided. Fortunately, this time I know something about the law whilst I still know very little about investing. 

Let’s not kid ourselves or underestimate the task ahead for any law firm we employ. This is going to be a “David and  Goliath” battle! The Banks have the MIGHT because they have an inexhaustible amount of money (some of which is ours) and time means nothing to them. We on the other hand, whilst we have RIGHT on our side, are an exhausted people with limited means and time is not our friend. The Banks know this and they will do anything in order to try and weaken our resolve. They also know that they must break us or lose. There are billions of dollars at stake here and reputations to preserve so it’s going to be a fight to the bitter end.

There are some key elements that we do have going for us, and there is a smorgasbord of wrongdoings to choose from! Apparently, there are millions (Yes, I did say millions) of documents in existence and many of these evidence the machinations that ensued in the dealings between Storm and the Banks  that worked in conjunction with them.  Further, many that worked within those organizations have now come forward and will testify for our side. What’s more, our lawyers have recruited a formidable legal team including a former judge. Therefore, I am confident that we are now ready to meet any challenge the Banks will mount. 

It’s not going to be cheap and it’s not going to be easy. Nothing worth fighting for ever is! 

In the coming months our resolve will be tested fully so we need to remain strong at all times. Just maybe, this time, the Banks have bitten off more than they can chew! If so, let’s hope they choke to death from the result of their gluttony! But not before they pay us back first!

Here's that article!

_CHIEF JUSTICE BLASTS ETHOS OF 'THE BILLABLE HOUR' 

Law giants 'create 

CHRIS MERRITI  LEGAL AFFAIRS EDITOR 

NSW Chief Justice Tom Bathurst has attacked the nation's largest law firms -warning that their emphasis on commercial success leaves lawyers and clients open to exploitation, creates tension with legal ethics and could limit them to recruiting "mindless drones". 

He warned that the best law graduates were already avoiding "megafinms" that placed too much emphasis Ijn "billable hours",requiring lawyers to account for 
their time in six -minute units. 

Those firms could "end up with a series of mindless drones adding six minutes here, six minutes there, to the general dissatisfaction of their clients and to the distress of the court when they bring litigation that shows no discernment to the matters necessary", Chief Justice Bathurst said. 

He said the commercialisation of legal practice was not inherently evil, but the conflict between profit and ethics was at the core of the concerns over this development. The Australian legal market had been invaded or colonised by large overseas firms, mainly from the northern hemisphere. 

The sheer size of the mega*firms, with hundreds of partners and thousands of employees, meant it would be difficult to assess the skills and qualities of individual lawyers, other than through revenue generation. 

"This may not be a problem in a non-legal corporate entity but it creates serious ethical challenges for a law firm," Chief Justice Bathurst said. "1 regret that in some cases young lawyers are left with the impression that the be-all and end-all of legal practice is the billable hour. 

"The ethical future of an industry in which young people are exploited and indoctrinated into a culture in which professional duties may be superseded for personal gain is of real concern." 

Chief Justice Bathurst's critique came ahead of yesterday's announcement that one of the nation's oldest law firms, Allens Arthur Robinson, is entering a joint venture in Asia with British based global firm Linklaters. 

The move by Aliens, which will be known in Asia as AlIens Linklaters, means Clayton Utz is the only large Australian law firm that has not formed an international business alliance, merged internationally or is negotiating the terms of an alliance with one of the global giants of the legal profession. 

Chief Justice Bathurst's extraordinary attack was delivered at the Commonwealth Lawyers Association's regional conference in Sydney and has been rejected by Stuart Clark, who leads an industry lobby group made up of the nation's largest law firms. 

Mr Clark, a senior partner at Clayton Utz, told the same conference that large law firms were relatively under-represented among the complaints lodged with the legal services industry's independent regulators. 

They were also over represented in the provision of free legal services for public- interest cases. 

"But for the economic strength of the large law firms ... it would not be possible to do anything like the level of pro bono work that is done in many countries, particularly the US, Australia and other parts of the Commonwealth," Mr Clark said. 

However, Chief Justice Bathurst said young lawyers at large firms had little or no interaction with clients. 

"Rather than taking carriage of a matter and seeing value for a client through work completion, they are motivated to bill as much as possible in the interests of career advancement. 

"This leaves both client and young lawyer open to exploitation in the pursuit of profit."
_


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## jjtebj12 (26 April 2012)

Thanks Frank for the article. Blind Freddy could see Slater and Gordon were always in it for themselves. They got paid from CBA how on earth could anyone think they were in it for their clients. This in itself was wrong but thats another story. 

My legal fight started long before Slater & Gordon got involved and my advice has always been the same from day one. The only thing that has changed is the depth of deception. Some of the evidence would make a grown man cry. How do these people sleep at night. 

Yes CBA has deep pockets but they need to fight or else they look silly on so many fronts.


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## SJG1974 (27 April 2012)

Now that everyone around here is friends again, it has become a bit boring!! 

A seriuous question though....does anyone know what Manny and Julie Cassimatis are up to these days? Will they be hauled before the courts to defend the provision of inappropriate advice and misleading investors?


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## Mash (27 April 2012)

https://storm.asic.gov.au/storm/sto...simatis civil penalty proceeding?opendocument

The above link is to the ASIC site with details of the proceedings and their next court appearance is scheduled for May 15 in Brisbane. Note these are only civil proceedings by ASIC. Unfortunately no criminal charges have been laid .....yet !


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## Frank Ainslie (28 April 2012)

Mash said:


> https://storm.asic.gov.au/storm/sto...simatis civil penalty proceeding?opendocument
> 
> The above link is to the ASIC site with details of the proceedings and their next court appearance is scheduled for May 15 in Brisbane. Note these are only civil proceedings by ASIC. Unfortunately no criminal charges have been laid .....yet !




Hi Mash!  

_"Note these are only civil proceedings by ASIC". _

We should all be mindful of the fact that these are civil proceedings by ASIC rather than criminal proceedings. Certainly, the C’s could also be charged later if actions of a criminal nature are revealed during these proceedings. In such circumstances, ASIC would then refer these matters to the DPP for further action. 

_“Unfortunately no criminal charges have been laid .....yet!”_

We must not forget that the financial investment model offered by Storm was an investment scheme that on the surface was operating within the framework of the law. Of course, if _“unregistered managed investment schemes”_ can be proven, the situation will altogether change. Therefore, anything I say now will carry this proviso.

If Storm and the Banks had acted appropriately in the latter part of 2007 and pulled us out when they had the chance, then I wouldn’t be sitting here today writing to you because the machinations of Storm and the Banks involved would never have come to light. We would certainly have lost a great deal of money, but so did many others that had investments at that time. Indeed, we have been constantly reminded of this fact by some on this forum and they are quite correct when stating this. 

ASIC and our lawyers are now pursuing Storm and the Banks for civil law wrongs that have now been identified. The ‘Consumer protection and the Australian Consumer Law’ best sums this up:

_“It is unlawful for traders to engaging in conduct which is misleading or deceptive, or which is likely to mislead or deceive. This covers conduct that is likely to create a misleading overall impression among the audience about, for example, the price, value or quality of goods or services. Failing to disclose relevant information relevant information, promises, opinions and predictions can also be misleading or deceptive. A trader’s conduct can be misleading or deceptive even if it is not intended to.

It is unlawful for a trader to make false or misleading representations about goods or services when supplying, offering to supply or promoting goods or services. There are some specific prohibitions against false or misleading representations.”_

We have discussed some of these civil wrongs at length on this forum. Therefore, I will now focus on possible wrongdoings (yet to be proven) that may have repercussions in the criminal court. Let’s consider some such possible wrongdoings:

Fraud

_“In criminal law, a fraud is an intentional deception made for personal gain or to damage another individual. Fraud is a crime, and also a civil law violation. Defrauding people or entities of money or valuables is a common purpose of fraud.” _

Can it be argued that Storm was guilty of _“intentional deception” _when procuring clients? Certainly, there is evidence to support this charge. The SOA’s for instance only supported the notion that investing solely in the share markets to the detriment of real estate was the way to go. It further suggested that it was a scheme designed to be conservative and therefore _“low risk”_ and it was anything but that. It also stated that effective software systems were in place to protect clients’ portfolios when they were not. All of these factors were promoted to clients in order to reassure them and obtain their signatories. The only question remaining is, _“Was it done intentionally?”_

Again, I believe that it was because, I believe, that the evidence will show that it was done for the sole purpose of generating monies for Storm rather than protecting the interests of or generating material benefits for those clients. 

_“Someone who commits fraud has acted dishonestly or by omission to deliberately deceive someone. Fraud is regulated under various acts, including state and territory criminal legislation and under Australia’s common law. There may be overlap between misleading and deceptive conduct under the consumer protection laws, and fraud in criminal law.”_

Forgery

_“The creation of a false written document or alteration of a genuine one, with the intent to defraud is called ‘forgery’. It also includes filling in blanks on a document containing a genuine signature, or materially altering or erasing an existing instrument. An underlying intent to defraud, based on knowledge of the false nature of the instrument, must accompany the act. Punishment generally consists of a fine or imprisonment, or both."_

Sifting through the evidence to hand, it is clear that _“filling in blanks on a document containing a genuine signature, or materially altering or erasing an existing instrument” _were among some of the activities that took place within Storm or the Banks involved or by both. The shenanigans within the Bank of Queensland in North Ward point to such malpractice. 

In the end though, what those involved are charged with or the sentences they receive will make no material difference to us. Our sole aim should be to get our money back and leave their fate to the Law. Looking back now, I have no real hatred for the C’s or the financial advisers that misled us. Rather, I HATE THE SYSTEM that they were able to use for their own ends – a system that has been allowed to function because governments have been too indolent to protect us from those within the financial sector that have been ripping people off since Federation and before . There will always be those avaricious people among us who will spot loop-holes in any loose system, Whilst we have sloppy government controls, and silly people at the helm, we Australian  will always suffer as a consequence. The system needs to be fixed but when is anyone's guess! Certainly, the new regulations do not go far enough and those in Government show little intent or commonsense for that matter to do anything constructive that will fully protect would-be investors in the future. Maybe, it's not in their interests to do so?! 

The ultimate irony is that we now have ASIC charging the C’s with failing to abide by the provisions within the Corporations Act when ASIC itself failed so many times to ensure that Storm did just that. It’s a bit like the Gas Company suing Hitler for not paying the gas bill!


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## StumpyPhantom (28 April 2012)

Frank - re your ultimate aim of getting your money back.  I take it it's the banks that hold the purse strings here?  And further that there is a large divide between you (as a group) and the banks such that they are in defensive/confrontation/legal mode and won't budge an inch?

If this has been their position, has it been so all along and are there any sigs or strategy that has seen them soften at all along the way?


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## Julia (28 April 2012)

Frank Ainslie said:


> ....it be argued that Storm was guilty of _“intentional deception” _when procuring clients? Certainly, there is evidence to support this charge. The SOA’s for instance only supported the notion that investing solely in the share markets to the detriment of real estate was the way to go. It further suggested that it was a scheme designed to be conservative and therefore _“low risk”_ and it was anything but that.



Did the SOA's detail the strategy of borrowing to X% on the family home and then obtaining a margin loan on the shares purchased with that borrowed money?

You may have already addressed this previously and I have missed it.


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## bunyip (29 April 2012)

Gees it’s dull around here since you lot decided to kiss and make up...can’t somebody start another brawl or something to liven things up a bit!!


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## StumpyPhantom (29 April 2012)

bunyip said:


> Gees it’s dull around here since you lot decided to kiss and make up...can’t somebody start another brawl or something to liven things up a bit!!




 The bunyip or kianpraty is a large mythical creature from Aboriginal mythology, said to lurk in swamps, billabongs, creeks, riverbeds.  A mythical animal denizen of Australian swamps. Its ogreish reputation makes it a threatening figure to children.

There you go - in Western mythology, you are a TROLL!!

Happy now?


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## Julia (29 April 2012)

bunyip said:


> Gees it’s dull around here since you lot decided to kiss and make up...can’t somebody start another brawl or something to liven things up a bit!!



 Imo it's a lot more constructive.  The unpleasant personal insults and mudslinging were never going to do anything other than cause damage all round.


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## Frank Ainslie (30 April 2012)

Julia said:


> Did the SOA's detail the strategy of borrowing to X% on the family home and then obtaining a margin loan on the shares purchased with that borrowed money?
> 
> You may have already addressed this previously and I have missed it.




Yes, it did! I don’t think any of us were unaware of Storm’s strategy at the time because anyone investing the kind of money that we did would have read the SOA from cover to cover. (I did a number of times!) We were trusting but not that trusting!

I agree with you that borrowing against one's house to invest in the share market is a risky business but it was one that was actively promoted by others as well as Storm. 

Further, for us personally it didn't seem too much of a risk at the time because we had $1.3 million in assets aside from our house. It should be remembered that three months after joining Storm, we received $1 million from the sale of our shopping centre which was unencumbered money at that! In theory, therefore, we should have been safe from any type of market fluctuations and our house should have been secure too. 

Actually, what blew us away and many more as well, I suspect, was the impact made to our assets by the costs incurred for adopting Storm's financial plan. Storm's fees, housing loan repayments, margin loan fees and a cash reserve rapidly ate into our asset bases. In a falling market, these assets were simply being eroded away. This continual fall was something that Storm's financial model was never designed to deal with in practical terms. 

Unfortunately, the devil lay in the detail of the SOA itself. Storm's financial model was, I believe, akin to a Ponzi scheme rather than a genuine financial model designed to benefit us. In other words, Storm wound up using our money to service their own ends. Further, Storm had no effective systems in place to monitor our portfolio which was a prime element, and one of the main reasons why we personally went with Storm in the first place. 

Are my words too harsh? I think not! I'll be doing a report for ASIC next week outlining why I consider Storm's financial model to be no more than a scam - at least as far as we were concerned. It was never going to benefit us because it created a treadmill of spiraling debt based on market projections that could never be sustained.


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## Frank Ainslie (30 April 2012)

StumpyPhantom said:


> Frank - re your ultimate aim of getting your money back.  I take it it's the banks that hold the purse strings here?  And further that there is a large divide between you (as a group) and the banks such that they are in defensive/confrontation/legal mode and won't budge an inch?
> 
> If this has been their position, has it been so all along and are there any sigs or strategy that has seen them soften at all along the way?




Stumpy! Yes! The Banks are the only game in town, I’m afraid! No doubt the Cassimatises have some loot stored away somewhere but finding it is another thing altogether. They may not look after other peoples' money too well but you can bet they know how to look after theirs! Where to look? Down some well in Mykonos might be a good start!

As far as the Banks are concerned, we did, of course, have a _“mediation period”_ but nothing came of it. The CBA thought that when it came up with its _“resolution scheme”_ basically giving back about one tenth of what it foisted out of its clients, this was all _“done and dusted_”. The other Banks, in particular, the BOQ and the Macquarie Bank have just sat back and waited to see what eventuated. Now, all three are trying desperately to limit any collateral damage because the trial is less than six months away.

As I see it the Banks are stuck between a rock and a hard place because they know full well that they have been involved in wrongdoing. Therefore, they are now presenting legal interpretive argument aimed at the provisions of the Corporations Act under which they are bound. 

As I see it, they, the Banks, have three ways to go or three lines of defense: (1) Conditions of contract, (2) agency, and (3) provisions of the various acts that they will argue, preclude rather than include them.

At the end of the day, it should be noted that the CBA has already confessed and has negotiated under its resolution scheme. Does anyone really believe that it did this because it was feeling generous at the time? No! The Banks are worried alright but what can they do? If they concede, the costs to them will be considerable. If they hold out, they may lose anyway both in monetary terms and reputation wise. 

For the Banks, the key issue is UMIS. This is the thing they fear the most because this will cost them the most. In my opinion, if the Banks believe they can successfully defend their positions in relation to UMIS, they will fight us all the way. However, if they think UMIS can be proven, I would expect them to make overtures to our lawyers between now and the trial date. I have heard nothing so far in this regard so I must presume nothing has yet been forthcoming.

That’s my reading of the situation as it stands. Whether it’s the right one is anyone’s guess!


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## bunyip (2 May 2012)

Julia said:


> Imo it's a lot more constructive.  The unpleasant personal insults and mudslinging were never going to do anything other than cause damage all round.




I agree with you, Julia.
My comments were made in jest.


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## Frank Ainslie (2 May 2012)

THE WAY AHEAD

Hopefully we have reached a point on this forum where we can all now consider the issues involved dispassionately without attacking one another. That doesn’t mean, however, that we are now all of one mind because there still remains a divergence of opinion as to what occurred and where the blame lies. That is perfectly understandable! 

For my part, I have found some of the postings particularly frustrating because it is obvious that many members are not fully aware of all the facts and what really did take place. Indeed, until the trials take place, none of us will know the full story. However, the evidence to hand does enable us to gauge a good deal of what occurred and identify the shortcomings of those involved.

Between now and the trial dates, there will be a hiatus when little is happening and  perhaps this period can be used to do a forensic analysis of the roles Storm and the Banks that worked in conjunction with that firm played which culminated in some of the worst investor  losses seen in this country. 

To date this forum has discussed various issues in dribs and drabs and I propose therefore that we go back to the beginning which begins with Storm’s ‘Statement of Advice’ which was the fulcrum on which everything else revolved. By isolating the faults of this documents, I believe the public at large will gain a greater understanding as to why so many investors that placed their trust in Storm were misled into believing that their money was safe from the vagaries of the share markets.

This exercise should be of particular interest to people like ‘Doobsy’ who are involved in the financial sector and are dealing with would-be investors on a daily basis. 

The Statement of Advice that Storm completed for us is 107 pages long. I will use extracts from that together with commentary from other sources such as the Worrells enquiry to draw a picture for those that were not caught up in this financial disaster. At the end of my commentary on the SOA, I will state the lessons that I believe can be learnt from our mistakes. 

I hasten to add that I will not be trying to defend our position when so doing but rather say it as it was! In so doing, GG, I'm afraid that any in-depth analysis of something like this cannot be done in short postings which you prefer. However, we do have a delete button for anyone that has no interest in such matters. I must wonder though why such people are on this forum if they do not want to fully understand the ‘WHY’ and ‘HOW” of all this? We have been dealing in suppositions long enough. I think it’s time we examined the facts and got to the bottom of all this in an objective way! 

The considerable role the Banks played in the Storm saga will be dealt with later.


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## Frank Ainslie (3 May 2012)

STORM'S STATEMENT OF ADVICE (Part 1)

*Preamble*

I have read back through Storm’s SOA a number of times since Storm collapsed. Of course, when reading it now, I am looking at it from a different perspective because its faults are somewhat more evident now whereas when I first read it, the strategy outlined in it seemed to make sense. I wasn’t to know then that Storm’s SOA was derived from a standard template and was a _“one-fit”_ financial plan for all rather than one based on our own personal needs. I also didn’t know then that the information in this SOA had not basically changed since 2002 so the content in many places was some 5 years old when it was presented to us. 

It is evident now that Storm’s SOA was comprised of a mishmash of information taken from various sources to support Storm’s notion that investing in the share market was the only way to go. It’s tendency to be contradictory in parts and only bring good news to the table, which was not obvious to us at the time, supports this view.

To fully comprehend why the Storm Financial disaster occurred and what caused it, I believe it is necessary to go back to the beginning and derive an understanding of what that company offered its clients and what those clients actually received. The _‘hype’ _if you like versus the _‘reality’_!

The way to do this is to examine the Statement of Advice in which Storm outlined what it was offering and see whether such claims and benefits contained in it were justifiable, viable or reasonable. This is what I now intend to do!

It would be fair to say that the majority of people that retire with money are basically looking for three things to ensure their future financial welfare. First and foremost, they want to protect what money they have worked all their lives to acquire. Secondly, they want to put their money into something to offset inflation and promote growth, and thirdly, they want to be able to draw down enough to live in comfort and do those things that freeing up their time now allows them to do such as travelling and the like.  Certainly, these were our aims, and I would think the majority of people (75% or so being past retirement age) that signed up with Storm had similar goals. 

I will therefore deal with these three key issues first, namely, ‘Security’, ‘Growth’ & ‘Viability’ when conducting this exercise, and then examine other elements of the SOA such as ‘Cash Reserves’ and so on that played a key role in Storm’s clients’ losses 

In so doing, I will endeavour to deal only with the known facts, not assumptions or suppositions, leaving all emotional issues aside, so that objective and reasoned conclusions BY ALL can be drawn from these findings.


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## bunyip (3 May 2012)

Frank Ainslie said:


> It would be fair to say that the majority of people that retire with money are basically looking for three things to ensure their future financial welfare.
> First and foremost, they want to protect what money they have worked all their lives to acquire.





I look forward to Frank’s extracts from Storm’s SOA – hopefully his insights will provide answers to a question that’s perplexed me ever since I first heard of the Storm debacle, that question being...

_Why on earth did people at or near retirement age think that the best way to protect the assets and money they’d worked all their lives to acquire was to mortgage their homes to raise large margin loans to combine with their own savings to sink into the most volatile and risky of all markets, and then use double gearing, and later on ‘steps’, to further increase borrowings to sink into the market?_

I’ve read every single post of this thread, but for the life of me I just haven’t been able to see how people were justified in committing their life savings and assets, plus huge sums of borrowed money, to such a high-risk strategy.

So I welcome Frank’s insights into the details of Storm’s SOA if it can help me to see something I’ve previously missed that might justify the decisions and actions of Stormers.


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## Frank Ainslie (3 May 2012)

STORM’S STATEMENT OF ADVICE (Part 2)

*Security*

The most important consideration of all for us when investing using the services of Storm was that our investments would be protected from fluctuations within the share markets. Therefore, we relied completely on Storm’s assurances that systems were in place to monitor our share portfolio and take concerted action when situations arose that could possibly endanger our investments.

There are two elements of Storm’s SOA that need to be examined in this regard, namely (*1) monitoring* and *(2) trigger-points*.

*1. Monitoring*
The SOA was contradictory at times in respect of this. In parts of the SOA, it seemed to put the onus back on the clients whilst in other sections, it accepted that Storm would carry out this task?

In my fax to Storm dated 27th July 2007 I asked Stuart Drummond, our Storm Adviser, to give me a written confirmation of Storm’s responsibility regarding trigger-points as nothing had been forthcoming.

In point 2 of my fax it was quite plain what I was asking for, _“State clearly in writing that the statement contained in your SOA on page 62, namely ‘If the market index moves through your trigger-point, simply call us and we will review your position in light of the new market conditions’ is correct? During a meeting prior to our signing the SOA, you assured us that Storm, not we, would be monitoring this. Bear in mind that we decided to use your services on the basis that you would confirm this in writing.”_

Although confirmation of this was never sent by him to us, I later received a letter dated 30th April 2008 from a Storm employee, one Jodie Geissmann, in Storm’s compliance section thanking me for my input into Storm’s proposed new ‘statement of advice’. Her letter was in response to my letter dated 13th December 2007 containing my views on the new SOA - (Bear in mind that I was only commenting on its structure rather than on any advice contained therein because I am not equipped to do so where the financial strategy was concerned.) In this letter, I again requested that Storm confirm that it was they, not us, who were responsible for monitoring. Again, my question was ignored. 

Incidentally, we were overseas from 15th April 2008 until the 20th July 2008 so I did not read this letter until after we returned. By then this matter was being overtaken by world events that would shape our future.

Looking back now, it seems ludicrous that to me that a company that had been in existence for many years would issue a ‘Statement of Advice’ that was both ambiguous and misleading with regard to monitoring. Surely, someone else must have spotted this anomaly before me? After all, I assumed that such wording was a standard part of Storm’s SOA and a legal eye had been run over the SOA before it was first implemented?

It’s interesting to note the Cassimatises' attitude to monitoring when they were questioned at length about this during the Worrells’ enquiry. 

On Page 46 to 49 of the Worrells Report it deals with this aspect which I will now quote at length:

_“THE EXTENT TO WHICH STORM INDICATED TO CLIENTS THAT STORM WOULD ACTIVELY MANAGE THEIR INVESTMENTS 

In the prospectus issued by Storm the following statement relating to monitoring and managing clients debt positions was shown: 

“Storm recognises the need to preserve its clients' core assets and lifestyle and takes an active approach to monitoring its clients' financial situation. Consequently, Storm establishes what it considers to be conservative MLVRs for clients and actively manages client debt positions (including maintaining and managing cash reserves as appropriate) to avoid margin call events and other risks associated with using leverage”. _

NB: This statement is an important one because it states within, (including maintaining and managing cash reserves as appropriate) which I will be referring to again later in this SOA exercise.

_"Also the prospectus stated: 

Storm monitors the MLVR position of its clients on an ongoing basis, and Storm is able to actively manage its client's portfolios by using a purpose built software system called Phormula, which enables Storm to efficiently assess and monitor each client’s borrowing and investing capacity.

It is of course likely that clients of Storm did not rely on statements contained in the prospectus when making investment decisions. Nevertheless, the contents of a prospectus are usually subject to close scrutiny by directors, and it may therefore be assumed that by authorising the inclusion of that statement in the prospectus the directors believed it to be true. 

In the liquidators' opinion, the statement included in the prospectus regarding monitoring and management of client debt positions (including maintaining and managing cash reserves as appropriate) must include monitoring of the worth of the client investment if the aim" to avoid margin call events and other risks associated with using leverage was to succeed. Indeed the use of the term "manages it 
clients portfolio" reflects that. 

The standard SOA issued by Storm dealt with what clients received in exchange for what was acknowledged to be higher than normal upfront fees. One of the things which clients were said to receive for the higher than normal upfront fees was: 

‘Regular monitoring and updating of your investments’ 

The statements included in the prospectus and in the SOA may be contrasted with a statement which Emmanuel Cassimatis included in an affidavit sworn in December 2008 and which was filed in the Federal Court. That statement was: 

‘As appears from the affidavit of my wife, Julie, Storm's business did not involve providing, monitoring or management for its client's margin loans, at least in the usual situation. An integral part of Storm's business model was the education of clients in relation to their own personal situations and investment profiles suitable for their own individual circumstances." _

Mr Cassimatis was then questioned with regard to the apparent contradiction between what was stated in the prospectus and Storm's standard SOA, and what was sworn to in the affidavit. 

It concluded with the Liquidator's Barrister saying to E. Cassimatis, _“I suggest to you that it would be a fair reading of these pages that I've been showing you that Storm Financial promises in return for its large up-front fees that one of the things that it will do for the client is to monitor the client's investments You'd agree with that, wouldn't you?” _

E Cassimatis responded by saying,  “Yes!”

Worrells' conclusions were as follows:

_“The liquidators find it difficult to say with certainty what was the true position regarding Storm's ability and practice to monitor and manage clients' debt and portfolios, and also what was told to clients about this. 

It seems possible that a client reading the SOA received by them might well conclude that, in return for higher upfront fees, his or her investments would be actively monitored and managed. Such a view would no doubt be reinforced in the event that the client read the prospectus issued by Storm. One client who assisted the liquidators by agreeing to appear at the public examination put it this way in his evidence: 

Liquidator's Barrister: And you mentioned a couple of times that people from Storm - Drummond told you this, and I think you may have also said Mr Cassimatis told you as well, but I will ask you who told you these things - but you mentioned that you were told things about the computer program, the software Storm was using. Can I just get you to try and remember it and put a bit more detail on the things that you were told about the computer program?

Client: Emmanuel Cassimatis always maintained between themselves and the lenders, they were in touch with our position at all times. They had the software that could - was capable of doing that, which was part of the trust that we invested with both companies.”_

I have already mentioned Drummond’s duplicity where we were concerned. This client’s statement gives further weight to this! 

_“The liquidators understanding of the evidence given by Mr and Mrs Cassimatis on this topic is that, despite the statement made in the SOA and the prospectus, Storm never had the capacity, or the intention of closely monitoring and managing client's debts and portfolios. It seems that the monitoring that did occur was undertaken primarily to identify opportunities for Storm to persuade clients to take further "step" investments (as mentioned in section 7 of this report) rather than in pursuance of a policy of ensuring that the clients loan to security ratio was not placed at risk. Further, it seems Storm was totally reliant on receiving accurate "data feeds" from at least one major source to carry out even the limited monitoring role mentioned.” _

I think there is little more to say as to whose responsibility it was for monitoring Storm’s clients’ investments because it is clear that Storm was responsible for carrying out this role and failed to do so. Further, the software that Storm were using to do so was inadequate for this purpose and the directors of Storm must have been aware of this when offering this facility. 

No doubt, this will be part of the_ ‘misleading and deceptive conduct charges’ _case that ASIC is now bringing against the Cassimatises. 

(To be continued )


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## bunyip (3 May 2012)

Frank Ainslie said:


> I think there is little more to say as to whose responsibility it was for monitoring Storm’s clients’ investments because it is clear that Storm was responsible for carrying out this role and failed to do so.




Frank

I don’t think anyone on this thread doubts that Storm had a responsibility to monitor and manage your investments. Indeed, that’s exactly what they stated they would do on their website. 
Clearly they failed in that responsibility.
However, investors also have responsibilities, one of them being to keep their finger on the pulse by keeping themselves in touch with what’s happening to their investments, and with what their manager is doing, and just as importantly, isn’t doing.
I know a number of business owners who employ managers for their business, in fact I employed a manger myself in one of the businesses I owned, but none of them ever gives his manger free rein to do whatever he pleases, without any input from the owner.
Since your investment was solely in index funds that mirror the performance of the market, and since the market figures are broadcast several times a day in the media, it was a simple matter for Storm clients to have an overview at all times of the performance of their investments.

I note, as has been noted before by others in this thread, that you still went ahead with Storm despite your concerns about the contradictions regarding whose responsibility it was to monitor your investments, and despite Storm ignoring your letters requesting clarification on this point.


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## Frank Ainslie (3 May 2012)

STORM’S STATEMENT OF ADVICE (Part 2) (Continued)

*Security*

*2. Trigger-points*

The system Storm claimed was in place to safeguard our investments, namely _“trigger-points” _that would be activated if the loan to value ratios set by Storm were exceeded was another prime reason why we signed up with Storm. No doubt, it was also the motivating force for many others to do likewise. 

_Page 29 of the SOA – “Trigger Points far Next Stage of Investment 
As has been explained 'during our discussions, our procedure for reviewing your Investment is primarily driven by changes to' the value of your Investment, and this is related to' movements in the Sharemarket.”_

_Page 30 of the SOA – “lt is important to recognise that the real trigger point is determined by the loan to value ratios (LVR).”_

_Page 62 of the SOA – “You will be informed of your trigger points on implementation of the plan, and at each step in your Journey to Capitalism. If the market index moves through your trigger point, *simply call us and we will review your position in light of the new market conditions. If there is no activity on the portfolio for any significant length of time, we will arrange to review your position to ensure that the plan is still optimal for your financial and personal circumstances. Of course, you can request a review of the portfolio at any time, or you are always welcome to discuss any issues impacting on your finances with us.”_

*I have dealt with this issue in my previous posting!

This is all well and good but any trigger-points can only work if (1) they are activated when need be, and (2) they are based on a TRUE loan to value ratio over the total portfolio accounting for ALL borrowings made by clients in such calculations. We now know that Storm’s software system did not take into account the borrowings clients had made for house loans and margin loans – such information being sourced from the Banks making these loans. In order to establish the _“big picture”_ Storm’s software would have required a facility to tap into the Banks involved so that housing and margin loans could be included in the LVR calculations.

You are reminded of what the Liquidator said in this respect: _“The liquidators understanding of the evidence given by Mr and Mrs Cassimatis on this topic is that, despite the statement made in the SOA and the prospectus, Storm never had the capacity, or the intention of closely monitoring and managing client's debts and portfolios. It seems that the monitoring that did occur was undertaken primarily to identify opportunities for Storm to persuade clients to take further "step" investments (as mentioned in section 7 of this report) rather than in pursuance of a policy of ensuring that the clients loan to security ratio was not placed at risk. Further, it seems Storm was totally reliant on receiving accurate "data feeds" from at least one major source to carry out even the limited monitoring role mentioned.” _

If this situation existed (and I for one believe it did) then one must question how Storm expected to establish true loan to value ratios if a vital component such as a housing loan were missing? We all know how difficult it was for Storm to establish its clients’ positions at the end of 2008 when they were using spreadsheets to do so and were reliant on the Banks concerned to fill in the gaps. So how they expected to activate accurate _“trigger-point”_ alerts for individual clients when that client’s LVR ratio was deemed to be exceeded is beyond me! 

I think we all agree that it is vital for any investor to be able to establish at all times how their investments are fairing. If a financial advisory firm has been entrusted with that task, it is crucial that the systems it employs can establish a true picture of an individual’s financial position quickly and that position should be an accurate one. 

The harm that ensued to Storm’s clients from this defect in Storm’s system cannot be emphasised enough! I have extracted the following from a submission made to the PJC (person’s name not submitted to the public) which is one of the best submissions I have read and explains the situation in relation to LVR inaccuracies in a very succinct way:  

_“The Loan to Value Ratio - The LVR Deception 

The main indicator of our debt/asset position was the gearing level or LVR which was available via Macquarie Margin Lending Summary. 

During any advice session this was always a reference point. Whenever our advisor reviewed our position, the Macquarie Margin Lending L VR was always referred to and used as a key and current indicator of our true position and whether further investment should be undertaken. 

Sadly it is only now and in hindsight that we have come to understand more exactly the degree of obfuscation that clouded our understanding and judgement in relation to the all important LVR (Loan to Value Ratio) which was used when planning our 'Next Steps' i.e. additional investments. The LVR was so critical in determining whether the step was judicious. 

When advising us our level of debt was always represented only by the LVR as per 
Macquarie Margin Lending's Summary. 

There was no account taken of the $380,000.00 loan from the Bank of Queensland which was derived from the debt against the house. 

This was hot 'visible' as part of the debt/loan balance/LVR of our Margin Loan and was not ever referred to in discussion about our LVR. 

Perhaps this was not Macquarie Banks's responsibility to separately flag the $380,000 debt from the Bank of Queensland which was drawn against equity in our house. But perhaps it should have been. 

However we now realize that it certainly should have been STORM and our advisor's 
duty to take account of this additional borrowing by incorporating this into the account alongside Macquarie Margin Loan LVR so that we had a true and accurate picture of our total debt level when considering the next investment step. This was never done. 

This omission and failure to consider the WHOLE debt position obviously gave a false and misleading reading of our actual investment situation. 

So we are now of the view that every investment step we took was actually based on a false statement of our real debt position as only the Macquarie Margin Loan LVR was used as the debt indicator. 

Consequently we were being put further and further into debt that we were not actually being made aware of, a debt that could not possibly be safely supported by the investments. 

It now seems to us that from very outset we were advised to invest more and more based on the 'visible LVR' alone, when in fact our real debt level ( i.e. the L VR as per our Macquarie Margin Lending Summaries + the $380,000.00 derived from home loan) should have signalled otherwise. 

A real example of the misleading LVR is as follows:

In the period from October to December 2007 our "Current Gearing Level' was showing as: 61.54% (Current Loan Balance $1,686,153.00: Market value $2,739,735.00) which, according to STORM and our advisor, would represent a very acceptable situation - a safe gearing level, a no worry situation and an ideal time to further invest. 

In fact we took another 'step' and invested a further $66,000.00 in December 2007. 

BUT it seems to us that what really should have been not only visible, but also added to the loan balance to see the REAL LVR and true level of debt, was the additional $380,000.00 debt of borrowings against the house. This was after all borrowed along with the Macquarie Margin Loan with the sole purpose for investment into the Indexed Trusts. 

Thus in the period from October to December 2007 the real LVR was in actual fact 75.06% i.e. Current Loan Balance: $1,686,153.00 + Home Loan of $380,000.00 = $2,066,153.00 versus Market Value $2,739,735.00. It was not the touted acceptable 61.54% - Current Loan of$1,686,153.00 versus Market Value $2,739,735.00. 

Why then were we advised to invest when the gearing level, taking into account the real level of debt, was in fact at a very dangerous and unacceptable level of 75.06% 

So, even when matters were under control and markets were still behaving in early 2007 and our 'visible' yet 'deceptive LVR' was showing on our MML Summary at a mere and supposedly safe and conservative 46.02%. the 'real and actual, but invisible and not taken account or LVR i.e. the one taking into account the home loan debt (invested into the market) should have read as 64.4% i.e. Loan value of $950,818.00 + Home Loan of $380,000.00 = 1,330,818.00 versus Market value $2,066,077.00 and not as 46.02% i.e. 

Loan Balance of $950,818.00 versus Market Value of $2,066,077.00”_

It seems inconceivable to me that a firm like Storm that was handling thousands of client accounts worth hundreds of millions of dollars would have software systems that were so woefully inadequate and incapable of producing a client’s true financial position quickly and accurately. Further, how could its financial advisers be expected to give good advice when Storm's systems were so defective?

In the end days, how could Storm’s clients be expected to know what their true position was if Storm was incapable of establishing such?

To summarise, any security that Storm professed to offer in its SOA in relation to our investments was non-existent because Storm had no effective controls in place to ensure such. 

When two parties enter into a contract there has to be a clear understanding of the duties each party has to one another. Anything that is inserted into an agreement that is incapable of being fulfilled and is a prime condition of contract subjects that contract to breach. 

Again, this falls under _“misleading and deceptive conduct”_ or contractual _“misrepresentation"._ Take you pick! Either way, Storm did not deliver. STRIKE ONE!


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## Frank Ainslie (3 May 2012)

STORM’S STATEMENT OF ADVICE (Part 2) Continued 

*Security*

*3. Risk*
It occurs to me that I should also include ‘risk’ in my comments on *“Security’’ * before proceeding with Part 3 of this exercise. The _‘high-risk”_ nature of Storm’s plan has been been debated on this forum at length so I feel that it is worth mentioning at this point.

The SOA was, I believe, designed in part to ease the fears of those investors that may have had concerns about any risks that might be involved. 

You will note that the following statements were made by Storm in its SOA to play down the risks associated with this scheme. In so doing, Storm made _"all the right noise"s_ but then ignored its own advice:

_“Page 10 of the SOA
“Safety depends on information. Our models and engineering is to give this information clearly. Proper testing is done on all aspects of a recommended plan to ensure informed decisions can be made.”_

_"Page 37 of the SOA
By ensuring that your funds are spread across many companies, your portfolio is at once exposed to the low-risk, medium-risk, and high-risk companies that will do very well, and to the low-risk, medium-risk, and high-risk companies that will do poorly, and some will inevitably collapse. By diversifying across all of the companies in the market, your exposure to each of these companies is indexed to ensure that default risk represents a negligible danger for your portfolio. Share selection risk and default risk will be explained further in the section entitled The Index Approach.

Page 42 of the SOA
Recommended Debt Levels 

The ratio of liabilities to total assets gives us a measure of the extent to which the portfolio is geared. We recommend that this ratio be above 40% so that sufficient leverage can be used to speed the wealth creation process. However it is important that the level of borrowings is low enough to maintain safety; we suggest that no more than 60% of the asset base is represented by borrowed funds. The liability ratio that is suggested in your individual circumstances will take into account your stage of life and the stage you are at in your investment process.

*Liabilities that exceed 70% of the value of assets are very difficult to manage, and leave no margin for error. *The volatility that we must accept in markets would have the potential to cause a situation of negative equity i.e. falling asset values may mean that you have borrowed more than the value of assets. This situation is dangerous to the viability of the investment program, and may leave the investor worse off than before they invested. It also induces anxiety in investors and this tends to cloud decision-making. This level of debt should be avoided. 

*The optimal liability to asset ratio is between 40% and 60%*. These levels give sufficient leverage into a growing asset to increase returns while maintaining safety and guarding against the effects of volatility in asset prices. Recall that a debt incurred to buy high quality liquid assets can be repaid at any time, and this reduces its significance. Providing the debt is used to buy such assets and the level of cash reserves is sufficient, we consider the range of liability to asset ratios to be prudent when used as a part of this overall plan, including the safety parameters upon which it has been based.

In his book Scams & Swindlers: Investment disasters and how to avoid them, True stories from ASIC, Bruce Brown gives us some very useful advice. 

For most investors, particularly if you have an average income, it is wise to only borrow a limited percentage of the price of 'the shares or units if you want to gear into the market. Although this means the number of shares or units you can buy will be less, so the value of the potential profits and tax breaks will be less, it also means there is less chance you will suffer a margin. 

We have used strict guidelines on the amount of those borrowings, and have related them to the size of your asset base. As has been explained within this document, should you implement these Recommendations in full your overall debt ratio would be 48%, which is made up of liabilities of 80% of the value of your home and other Property assets, and 49.17% of the value of your Share*based assets. 

These debt levels are well within our guidelines as being prudent. Adequate arrangements have been made to handle market volatility and the associated potential for margin call - these have been fully described and explained in the section of this document entitled Your Post-Plan Position.

Page 76 of the SOA

Successful negative gearing has 3 essential elements: 

1.	A careful selection of the asset to be purchased to try to ensure maximum capital gain 

2.	A borrowing plan tailored to minimise risk 'Fail safe' strategies in case things go wrong

3.	Negative gearing is usually undertaken to buy property and shares, and we can expect the values of both to rise in the long term, but this may not occur in the short term. Negative gearing should produce good results over the long term, but anybody going into negative gearing must ensure they can accommodate the risks involved; primarily the risk in negative gearing into shares is that the asset values vary by large amounts over the short term."_

When I first evaluated the SOA Storm had provided for us, I found these statements reassuring, as I’m sure many others did. For one, these statement implied that Storm were mindful of our desire not to invest in anything that carried a high degree of risk. Indeed, we had stressed this on more than one occasion, as indeed, I am sure many others did! I assumed (a dangerous thing to do, I know, in any business venture) that Storm would act on their own advice, and in so doing adequately insure our investments against rises and falls in the share markets by monitoring our portfolio and advise us appropriately when action was deemed necessary

Storm, to my mind,  by making these statements were mindful of our wishes in this respect and had confirmed that it had the necessary systems in place to ensure that our investments would be adequately protected and any risks would be minimized. Therefore, for some on this forum to state that we had an overwhelming desire to gamble with our money by entering into a high risk strategy with Storm is completely false. 

How did one member put it, _“But once Frank walked into that Storm office and they dangled those dollar signs in front of his eyes, the astute and capable man became reckless and imprudent, and his capacity for clear thinking abandoned him.” _Anyone that knows me well enough will tell you that I am circumspect by nature so short of having a complete mental aberration, the last thing on my mind when employing Storm as my financial adviser was to give them_ “carte blanche”_ with the money Helen and I had taken a life-time to acquire. I think I can speak for most ‘Stormies’ when I say this!

Incidentally, I can see nowhere in Storm's SOA that this was a _"high risk scheme"_ that we had agreed to adopt. Storm's SOA suggests just the opposite!

Unfortunately, we now know that Storm _“talked the talk but didn’t walk the walk!”_


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## Julia (3 May 2012)

Frank, I find even just the volume of words used by Storm in these extracts from the SOA offputting.  It's as though Storm's intention has been to so overwhelm clients with impressive sounding, but obfuscating, verbosity that the client will agree rather than appear foolish if they are actually bewildered by what it all means.

They have repeated their soothing sounding assurances of 'monitoring your investments' and clearly this has worked for those who went ahead.

Regarding the extract from another client's submission:



> In the period from October to December 2007 our "Current Gearing Level' was showing as: 61.54% (Current Loan Balance $1,686,153.00: Market value $2,739,735.00) which, according to STORM and our advisor, would represent a very acceptable situation - a safe gearing level, a no worry situation and an ideal time to further invest.
> 
> In fact we took another 'step' and invested a further $66,000.00 in December 2007.
> 
> BUT it seems to us that what really should have been not only visible, but also added to the loan balance to see the REAL LVR and true level of debt, was the additional $380,000.00 debt of borrowings against the house. This was after all borrowed along with the Macquarie Margin Loan with the sole purpose for investment into the Indexed Trusts.




yes, of course the home loan should have constituted part of the calculation.

But I just cannot comprehend how anyone who has borrowed $380,000 against their home could fail to take this into account when considering their position.

Did anyone even say to their advisor:  *But what about our home loan?*
Shouldn't this be taken into consideration when we're discussing the LVR?

I'm not here wishing to be critical.  I'm just totally puzzled that such an integral part of the whole deal was apparently just ignored.

On the risk aspect, the extracts you have provided show how they diverted concern about the risk involved in the double gearing (which so far at least doesn't really seem to be referred to much at all) by waffling on about diversification in the market.
It all sounds pretty good but imo diversification of itself is absolutely not enough to ensure safety.  If the whole market falls, as it did, you are not at all protected.

When some of us here have discussed risk we have been referring to the double gearing for people at or near retirement.  Storm seem to have glossed over this and offered glib sounding reassurance that just being in a diversified index fund would be protective.  Sadly, you now all know otherwise.


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## Frank Ainslie (4 May 2012)

Julia said:


> Frank, I find even just the volume of words used by Storm in these extracts from the SOA offputting.  It's as though Storm's intention has been to so overwhelm clients with impressive sounding, but obfuscating, verbosity that the client will agree rather than appear foolish if they are actually bewildered by what it all means.
> 
> They have repeated their soothing sounding assurances of 'monitoring your investments' and clearly this has worked for those who went ahead.
> 
> ...




Hi Julia,

Because this will be a long exercise, I will not be answering any questions from posters until it is finished so I hope you and everyone else will bear with me on this. However, that doesn't mean that I will not be heeding what posters are saying in their postings to me on this subject. In fact, I would encourage people to raise questions such as you have done because I intend to cover these questions when I eventually summarize the SOA and state what lessons I and others should have learnt from our dealings with Storm.

I also believe that by the end of this exercise everyone will better understand WHY people used the services of Storm and HOW they were basically deceived. This will, I trust, then lead to a more constructive and objective discussion based on the facts rather than on assumptions or suppositions. 

Whatever, there are certainly lessons to be learnt. In order to give some meaning to the Storm debacle, I think we all have to understand the mistakes that were made, admit to them, and hope that others can learn from our mistakes and avoid another Storm.


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## Frank Ainslie (4 May 2012)

STORM’S STATEMENT OF ADVICE (Part 3)

*Growth*

The second reason for our investing using the services of Storm Financial was to offset inflation and promote growth of our asset base over time. Helen wanted to leave a legacy for her children and grandchildren and we thought this was one way of achieving this. Our financial welfare was already secure at that time. However, we wanted to ensure that _"down the track"_ they, the children and grandchildren, had an easier passage through life. There were many people in Storm that were past retirement age, and I am sure many of them shared our sentiments too.

Contrary to what many may think, we did look at other alternatives before deciding to use the services of Storm. Allocated pensions were considered and we paid Westpac to provide a financial plan for us as well. However, the emphasis always appeared to be on an erosion of our capital over time rather than growth and Storm’s financial plan seemed to offer a viable alternative to this erosion. 

Some years down the track, people still ask, _“But why Storm? It was obviously a con!”_ That’s just the point. It wasn’t! What we know about Storm today is a far cry from what was known then. Storm had a track record of success. In fact Storm’s business relied to a large extent upon referrals. This meant that people that were in Storm then had to be happy with what Storm was doing or they wouldn’t have recommended that firm. We, ourselves, knew people that were in Storm for some years and their capital had grown as a consequence. Whether their capital had grown in a real sense is something I will be commenting on in due course. For now, I will stick with the subject in question, namely _"growth"_.

We were not concerned that Storm’s plan was long-term because our goal of leaving a legacy was a long-term objective anyway. Besides, we were not big-spenders (as some would believe) but had a fairly modest lifestyle. Indeed, at that time we had no debt and we certainly didn’t have any financial worries so _“getting rich quickly”_ was certainly not a consideration when we thought about signing up with Storm! Why should it be when we were already rich with $1.7 million in assets? 

Storm’s SOA had this to say about growth and investing for the long haul:

_“Page 24 of the SOA

Investment Growth 

The viability test assumes NO GROWTH in the share investment for the remainder of this financial year, and for the next 2 years. This shows that even without sharemarket growth, the Cashflow remains viable and does not depend on growth in the share Investment. Following this period of time, modest growth of 6.55% per annum in the Sharemarket is required to keep your Cash Reserves growing. 

Please refer to the below graph, which shows that from 1st January, 1980 to recent, the All Ordinaries has returned 9.69% Growth and further 4.63% dividends per annum making a total combined return of 14.32% pa. Please note these returns do not include any additional value our Build/Recovery steps would enhance on the return. _

Now it’s important to understand that any growth mentioned here was over and above the plan’s other benefits; namely all expenses met in relation to the plan and $100,000 per year in _“living expenses” _which would be met by the returns on our investments. Sound good to you? It sounded good to us as well! If our cash was being eroded away by everyday living anyway, why not put it to work growing over time by investing as Storm had suggested. To us it seemed like an ideal situation. 

And please, for those that can't get their heads around $100,000 per year, that doesn't mean that we would be spending that much money in any given year! Many 'Stormies' including us saved much of this for _"a rainy day!"_ Unfortunately, the Storm that eventually arrived has been lasting for some years now, and any money put aside is well and truly gone! But I digress!

Unfortunately, we all know NOW that Storm’s projections were doomed to failure in a falling market. Quite frankly, in retrospect, I have severe doubts whether Storm’s forecasts of growth were sustainable in markets that continually kept rising (and we know they don’t) but more on that later in the posting I will make dealing with “Viability”. 

For those members that have insisted that this was a _“get rich quick scheme” _the SOA is proof enough that people signed up for the long-term with steady growth in mind:

_“Page 40 of SOA
In order for the benefits of these higher average returns to be exploited, the investment must be held long enough to allow us to discount the volatility of returns, and allow us to anticipate benefiting from the general upward trend in the market. It is crucial that the investment horizon be distant enough for the increased volatility of returns of a geared investment to be accommodated, both by the portfolio and the investor. We suggest that a minimum timeframe of 5-10 years is appropriate for this kind of investment.

Page 44 of SOA
The key to successful investing in the medium to long-term is consistency. 

Page 51 of SOA

Timeframe '" 

This is a medium to long-term plan for building wealth. A minimum of 5 to 7 years should be allowed before you expect to be spending profit from the investment. Furthermore, we advise that when using gearing a time frame of 7 to 10 years is even more appropriate.
_
If nothing else this makes a bit of nonsense of those that claim that we were all in it for a quick buck! If such were the case, we sure had our wires crossed!


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## bunyip (4 May 2012)

Frank Ainslie said:


> Incidentally, I can see nowhere in Storm's SOA that this was a _"high risk scheme"_ that we had agreed to adopt. Storm's SOA suggests just the opposite!




It’s not at all surprising that Storm wouldn’t tell you their strategy was high risk....their objective was to sign you up, not frighten you away.
Storm Financial was a licensed Financial Planning firm, yet the service they offered bore little if any resemblance to the range of services offered by most Financial Planners.
The reality was that Storm were basically a bunch of commission salesmen with a vested interest in signing up clients so they could milk them for 7% commission on every dollar invested.
To that end, they were always going to make their product sound good, just like any salesman does.

I’ve never yet come across a salesman who told me the worst features of the product he was trying to sell. Sales people would never make a sale if they did that.
This highlights the importance of doing your own research to find out if the product you’re considering is seriously risky or defective in design. The salesman certainly isn’t going to tell you.


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## bunyip (4 May 2012)

Frank Ainslie said:


> If nothing else this makes a bit of nonsense of those that claim that we were all in it for a quick buck! If such were the case, we sure had our wires crossed!





 I may be wrong, but I can’t recall anyone suggesting that you were in it ‘for a quick buck’.

We have however, made the quite reasonable suggestion that by using heavy borrowing to greatly increase your market stake, you were obviously hoping for a corresponding increase in the level of profits.


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## bunyip (4 May 2012)

Frank Ainslie said:


> Some years down the track, people still ask, _“But why Storm? It was obviously a con!”_ *That’s just the point. It wasn’t!*






Frank 

I have no wish to rub salt in your wound or to hurt your feelings in any way, but I have a very different view to your belief that Storm wasn’t a con.
And because this forum encourages expression and discussion of views, I’m going to express mine. If my views upset you or anyone else, then I’m sorry, but there’s not much I can do about that.

I don’t see any possible way that you could have known that Storm wouldn’t act on the trigger points in accordance with your agreement. Nor can I see any way that you could have known that Storm would not manage your investment as they agreed to do, but instead would sit on their hands and do nothing while the market caved in and the value of your investments evaporated.
I don’t see how you, I or anyone else, no matter how smart they were, could have known these things in advance.

However, there’s one thing you could have known that would have shown the Storm strategy to be a high risk con scheme that completely misrepresented the facts in regard to the safety measures that were supposedly going to protect your capital from major loss.
The ‘thing’ I refer to that you could have known about was past market crashes. In particular, I refer to the 1987 crash that wiped 20% off the market overnight, 25% in one day, and 50% in a little over a month.
If you’d looked at the ‘87 crash and asked yourself_* ‘OK, what effect would a similar crash have on my proposed portfolio’?*_...you would have discovered that the result of such a crash would be catastrophic loss of your capital before the market reached the trigger points that supposedly would safeguard the bulk of your capital.

You obviously spent considerable time and effort evaluating Storm’s SOA, but I believe your real focus should have been on researching the history of the stock market to make yourself fully aware of just what the market was capable of dishing out to you.
If you’d done that, and discovered the enormity of the ‘87 crash and many others before it, and then considered the very real possibility of such crashes repeating, I believe you would have made the prudent decision to walk away from Storm without even bothering to look into their SOA.
I can see how their SOA made the strategy look appealing to investors, I can see how it was skillfully worded to downplay the risks. But a few minutes of market research via the internet, or by talking to a stockbroker, would have quickly shown the ‘safe and conservative’ Storm strategy to be high-risk and downright farcical.


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## doobsy (4 May 2012)

I would love to point out some of the "key points" in Franks posts as an education for others in the forum but happily am VERY busy here at work. I will look to get back in here soon.


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## SJG1974 (4 May 2012)

Frank,

What exactly were the trigger points (regardless of who was expected to monitor them)?

Did Storm set them as say a $$ value of the portfolio, or an LVR as such?  Did they put these in writing? How were you to know when your portfolio reached them?

Did they explain to you why they didn't act on them when they were hit, or did they pass the buck back to you?


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## Frank Ainslie (4 May 2012)

SJG1974 said:


> Frank,
> 
> What exactly were the trigger points (regardless of who was expected to monitor them)?
> 
> ...




SJG,

I'll answer everyone's questions when I've finished this exercise! I'm old and I'm therefore easily distracted!

I would ask everyone to keep these questions coming though because it gives me a reference point for my summary later.


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## Frank Ainslie (4 May 2012)

STORM’S STATEMENT OF ADVICE (Part 4)

*Lifestyle*

Our third objective was to _“live in comfort and do those things that freeing up our time now allows us to do such as travelling and the like."_ Certainly, these were our aims, and I would think the majority of people (75% or so being past retirement age) that signed up with Storm had similar goals”. 

With the assets we already had, we could have achieved these aims anyway and still have had enough money left over for the grandchildren. Furthermore, sticking our money in the bank (which would have been risk free) and just live off the interest of our capital would have gone a long way to doing this. However, the fact is that we didn’t and we are now paying for our mistake. Dwelling on this is a pointless exercise in futility because we invested using the services of Storm and we must now live with the consequences.

Having said this, this does not excuse what Storm and the Banks have done because anyone that entrusts their money to financial advisers and financial institutions have a right to expect that any dealings with financial advisers and Banks is “above board” and their assets will be protected  because these parties have a fundamental “duty of care” which is obligatory. Therefore, if any dishonest, deceptive or misleading conduct is identified, then those that entrusted their monies to such parties have the right in Law to recover what they have lost. To live in a society where such practices are tolerated or condoned is unacceptable to any law-abiding or fair-minded citizen. Fortunately, we live in a country where the rule of law still prevails and consumer laws are prevalent. We are therefore hopeful that the wrongs that have been done will be identified and those that have broken the Law will be suitably punished and we will be compensated accordingly. 

One of the things that the courts will now have to decide is whether the financial model Storm offered to its clients was, *(1) ‘suitable’, (2) ‘viable’ and (3) whether it was ‘conscionable’*.  By ‘conscionable’ I mean was it legally or ethically right, proper or fitting?

How does this relate to _'lifestyle'_? Well, when all is said and done, Storm was offering its clients a lifestyle whereby they could live out their lives financially free and in comfort. We need therefore to consider whether what they offered to achieve this was indeed suitable to their clients' needs, viable in the long term, and was within the Law. Therefore, I will now deal with these three aspects.

*1. Suitability*

A “one-fit” financial plan (we now know) was not a suitable vehicle for Storm’s clients because investors have individual needs and their circumstances are not all the same. This is a tenet where financial advice is concerned and should have been a prerequisite when Storm was handing out advice. That is one of the charges that ASIC has now laid against Storm and one the former directors of Storm will have great difficulty defending.

Because the majority of Storm’s clients were past retirement age, the overall philosophy of Storm’s financial model, and its suitability for their individual needs, bearing in mind that they did not agree to the “high risk” nature of Storm’s plan, and thought instead that the risks were nominal, will play a key role in establishing whether the directors of Storm were reckless or even worse in adopting such an approach.

Mr. Brett Walker (a financial expert) prepared a report on Storm's investment model at the behest of the Liquidator, Worrells, which was placed into evidence during the public examination process carried out by in 2009. 

In relation to whether clients of Storm should have ever been advised to mortgage their home for the purpose of investing the loan proceeds in index funds (as was Storm's advice to many clients) Mr Walker stated: 

_“I believe the risk capacity of the clients would have excluded their primary residence from any investment-related strategy unless there was clear evidence before the advice provider that the clients were people with a risk tolerance significantly higher than the average retail investor. 

It is my opinion that the level of risk tolerance required of a person being asked to embark on a gearing strategy using their primary residence as collateral whilst also borrowing funds and securing that loan against the assets being invested into (in this case unlisted index funds) is such that fewer than 1 % of the population would be considered a suitable "fit". 

And It is my observation that the majority of financial advisers specifically exclude each client's primary residence from their assessment of "available" investment assets for the very simple reason that, to recommend someone use their home as collateral to invest in potentially volatile investment markets would not be in the interests of the majority of clients. 

And I am of the view that gearing to meet one's financial objectives is an option that should only be proposed to people who (in the advice provider's sincere and objective view) have the appetite for the risks associated. 

And in my opinion there are very few people (especially those who would be characterised as "retail clients") who would be a good fit for this type of investment strategy. 

In my opinion the inclusion of the family home in any investment strategy is an indication that the investment strategy is unsound unless there is clear evidence of the attendant risks (e.g. losing the home due to falling markets) being within the risk appetite of the client. 

In order to reach that conclusion a professional advice provider would need to establish through some objective means that they had tested and assessed the client's attitudes and psychology in relation to such a risk-taking scenario (i.e. pledging their primary residence in pursuit of speculative gain) and that testing and assessment would need to have displayed a clear preference for the assumption of that risk. 

In my opinion the suggestion that a client include and thus employ their primary residence in their investment portfolio can rarely be in the interest of the client. 

In my opinion suggesting to the clients that their residence created an exposure of any kind to the investment property sector was fallacious in the context I have seen it used in the Statement of Advice 

In my experience the primary residence is most often considered by professional financial advisers to be an "excluded asset" when it comes to designing investment portfolios. The reason for this approach is that for most advisers the risk of a client losing their primary residence in pursuit of an investment objective the adviser has recommended is a risk too great for them (the adviser and the client) to contemplate. 

As stated in the prospectus issued by Storm, new and existing clients were subject to "an extensive education process", relating to the proposed investment. Further the formal advice which clients received was long and detailed. The accuracy and relevance of the material included in the education process and the formal investment advice was closely examined during the public examination process. 

In section 6 of this Report we summarised the relevant statues governing the contents of Statements of Advice (SOA) and in the annexure to this report we reproduced the relevant legislation. In short the statues make it an offence to provide a SOA which is defective or misleading in a material particular. 

The SOA that Storm normally provided to clients included propositions with which Mr Walker, the liquidator's expert, disagreed. Among the propositions which Mr Walker disagreed with were the following. 

• The proposition that it is necessary for a client to gear to meet his or her financial objective, 

• The proposition that a clients family home should generally be treated as an investment asset, as opposed to treating it as sacrosanct 

• The use of the term "claytons debt" by Storm when referring to funds borrowed by clients in pursuance of the advice given by Storm. In that connection Mr Walkers observes: 

Given the likely public awareness of the term "clayton's" as a term that implies the opposite of "real" or "actual" it seems likely to me that the use of the phrase "Clayton's debt" would have suggested to Storm clients that the use of debt to finance the acquisition of income-generating capital was preferable to the use of debt to do anything
else within the context of their investment goals. In my view the use of such a term would suggest to a reasonable person that anything labelled "Clayton's debt" was not really a form of debt at all. In my view that is an inappropriate use of the term. 

• The inclusion of a chart which compares growth and dividends on shares to just growth (without rent) on property. In that connection Mr Walkers observes: 

I am of the view that it is a flawed comparison. In my opinion you cannot competently compare asset classes (especially assets within the growth sector} unless you compare growth and income components of each. It is clear to me that the table creates the distinct impression that Shares are an asset class far more likely to provide capital growth over the long term than Property (even Sydney*based residential property). I am unaware of the precise impact including rental income would have on the numbers in the table but am of the view that such information would tend to show Property in a more favourable light than is implied in the table as it appears in the SOA. 

• The prediction that it is likely "property prices will remain flat or decline over the next 5 to 15 years in real terms". 
In my opinion this is a sweeping statement that appears (whether deliberately or inadvertently) to include cyclical property sectors like commercial and industrial as well as residential sectors._ (To be continued)


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## Julia (4 May 2012)

bunyip said:


> I don’t see any possible way that you could have known that Storm wouldn’t act on the trigger points in accordance with your agreement. Nor can I see any way that you could have known that Storm would not manage your investment as they agreed to do, but instead would sit on their hands and do nothing while the market caved in and the value of your investments evaporated.
> I don’t see how you, I or anyone else, no matter how smart they were, could have known these things in advance.



Agree.  Therefore you were indeed 'conned'.  This is an evaluation against the integrity of Storm.

These con artists are everywhere.  I have just escaped being conned myself.
Deciding to have a new house built I sought plans and prices from 7 builders.
Chose one on the basis of (a) his good reputation, (b) his capacity to create a good plan from my sketch, (c) his estimate of cost, taking into account the standard inclusions.

Gave the go ahead to have the designer do the detailed drawings a few weeks ago, making sure the builder knew I wanted the specifications completed and the contract ready for signing well prior to 30 April which was the cut off date for a $10,000 building grant from the Qld government.  

With the designer's advice I agreed to an extension of the outdoor patio area which builder advised would cost around $4000 more.  There was also some manipulation of the actual house space making some rooms larger and others smaller, but absolutely remaining within the same total sq metres.

The specifications and contract failed to appear until I was about to give up on these arriving prior to 30 April.  They were finally emailed on Saturday late afternoon, 28 April and consisted of around 50 closely printed pages, much of it in jargon unfamiliar to me.

Reading through the specifications I noticed that an item included in the list of inclusions supplied with the original estimate (security screens to all doors) was not included in the final document and instead only fly screens were allowed for.

Further, although the only extension of sq metres was the above mentioned approx $4000 for the additional patio area, the final price was over $35,000 more than the estimate.  No breakdown of this considerable amount was given.
I phoned and asked for this.  The response was surprise and some resentment.
It did, however, arrive via email a few hours later.  
There had been an additional 7sqm added to the house itself according to the list of additional costs.   There was no detail as to where this was supposed to have occurred and I am quite certain the plan had not been extended in any such way.

Some of the other additional costs were reasonable, e.g. retaining wall in front of house to cope with sloping block.

I sent an email pointing out the discrepancy between the originally included security screened doors all round and the fly screens quoted for in the final document, and asked if he wanted me to make a note correcting this on the copies I had of the specifications or if he wished to replace that page, making the appropriate correction.
Whichever, I made it clear that I expected the originally quoted inclusion to appear in the final document.

No response.

So it seems all the documentation was intentionally left to the last minute on the assumption that I'd just sign off on it all without actually checking it thoroughly.
When it was made clear that wasn't going to happen, he has apparently decided I'm not the sort of client he wants after all.

So a lucky escape probably.   Faced with that mountain of paper with time being so short, I did consider just assuming it would all be OK, but am very glad I didn't.

I don't mean to divert the essential focus of the thread but offer the above anecdote as yet another example of how it is reasonable to take the view that many people have as their guiding principle in life the willingness to rip off others.






Frank Ainslie said:


> STORM’S STATEMENT OF ADVICE (Part 4)
> 
> *Lifestyle*
> With the assets we already had, we could have achieved these aims anyway and still have had enough money left over for the grandchildren. Furthermore, sticking our money in the bank (which would have been risk free) and just live off the interest of our capital would have gone a long way to doing this. However, the fact is that we didn’t and we are now paying for our mistake. Dwelling on this is a pointless exercise in futility because we invested using the services of Storm and we must now live with the consequences.



Yes, and this is the great pity of Storm's willingness to take advantage of you.
An honourable adviser would have pointed out what you now realise, i.e. that you could have invested very conservatively and still absolutely achieved your aims.



> Having said this, this does not excuse what Storm and the Banks have done because anyone that entrusts their money to financial advisers and financial institutions have a right to expect that any dealings with financial advisers and Banks is “above board” and their assets will be protected  because these parties have a fundamental “duty of care” which is obligatory.



I'd have once thought so too.  But the very fact that that the government enquiry came up with the '*revelation*' that '*advisers should act in the client's best interests'*
is testament to the fact that no such ethical approach existed in the case of Storm.

We've ad infinitum made the point that a few simple calculations would have allowed you to see that you could have just stuck the funds in the bank and still achieved your desired level of income, so no need to labour this again, especially as you now are obviously very aware of this.




> In relation to whether clients of Storm should have ever been advised to mortgage their home for the purpose of investing the loan proceeds in index funds (as was Storm's advice to many clients) Mr Walker stated:
> 
> _“I believe the risk capacity of the clients would have excluded their primary residence from any investment-related strategy unless there was clear evidence before the advice provider that the clients were people with a risk tolerance significantly higher than the average retail investor.
> 
> It is my opinion that the level of risk tolerance required of a person being asked to embark on a gearing strategy using their primary residence as collateral whilst also borrowing funds and securing that loan against the assets being invested into (in this case unlisted index funds) is such that fewer than 1 % of the population would be considered a suitable "fit". ............_



_
Good for Mr Walker.  Hope his testimony carries the appropriate weight.  Completely agree with his comments._


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## bunyip (5 May 2012)

Julia said:


> So a lucky escape probably.   Faced with that mountain of paper with time being so short, I did consider just assuming it would all be OK, but am very glad I didn't.




Not a ‘lucky’ escape, Julia – you avoided being conned because you thought for yourself, were prudent, astute and circumspect, and you didn’t just accept something at face value without thoroughly looking into it.

Fortunately, three out of four people who approached Storm were careful like you were, and they walked away after reviewing the strategy.


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## StumpyPhantom (5 May 2012)

bunyip said:


> Not a ‘lucky’ escape, Julia – you avoided being conned because you thought for yourself, were prudent, astute and circumspect, and you didn’t just accept something at face value without thoroughly looking into it.
> 
> Fortunately, three out of four people who approached Storm were careful like you were, and they walked away after reviewing the strategy.




+1

It's a sad indictment of our society today that I consider my propensity to think the best of people I come across to be a personal failing


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## Solly (5 May 2012)

bunyip said:


> Not a ‘lucky’ escape, Julia – you avoided being conned because you thought for yourself, were prudent, astute and circumspect, and you didn’t just accept something at face value without thoroughly looking into it.
> 
> Fortunately, three out of four people who approached Storm were careful like you were, and they walked away after reviewing the strategy.





bunyip

"three out of four people *'allegedly'* walked away after reviewing the strategy"

This also has not been tested.

S


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## Julia (5 May 2012)

bunyip said:


> Not a ‘lucky’ escape, Julia – you avoided being conned because you thought for yourself, were prudent, astute and circumspect, and you didn’t just accept something at face value without thoroughly looking into it.



Bunyip, I consider I was lucky that he displayed his greed where I could discover it and withdraw.  Otherwise I'd have gone ahead with the project and would not have known where I was being ripped off, viz poor quality materials etc or building practice not up to what it should be.  I'd have had to trust him on this.

You could say that this would have been a similar situation to the Storm investors trusting Storm's assurance that their investments would have been monitored to prevent catastrophic loss.

I don't know.  Perhaps it's a meaningless comparison.


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## bunyip (6 May 2012)

Solly said:


> bunyip
> 
> "three out of four people *'allegedly'* walked away after reviewing the strategy"
> 
> ...



Fair point – but it doesn’t really matter what percentage walked away. A former Storm adviser said it was 75%. OK, it might have been 60% or 50% or 80% – the point is that many people walked away after reviewing the Storm strategy. 
It’s been stated on this forum that ‘even savvy investors couldn't have seen through the Storm strategy’ (or words to that effect) – but clearly many people _*did*_ see through it – the story of one of them appears in Post 6940 on page 347 of this thread.

Whatever the figure, it’s clear that there are some investors out there who avoided being conned by Storm because they're astute and switched on like Julia is. Perhaps the only positive in the entire debacle is that the number of people burnt would have been much higher if it wasn’t for the prudence of the many investors who rejected Storm’s strategy.


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## Frank Ainslie (6 May 2012)

STORM’S STATEMENT OF ADVICE (Part 4)  

*Lifestyle *(Continued)

Mr. Brett Walker went on to say:

"_I say this even though the content of page 15 appears to be focused exclusively on residential property. The term "property prices" is unqualified and might therefore suggest to a retail client that property as an asset class was unlikely to be as effective an investment option as the managed funds Storm was recommending to them. 

In my opinion the statement seems aimed at eliminating property as an option for consideration under the "Journey to Capitalism" concept being promoted by Storm. When considered in the context of page 9 of the SOA and the advice provider's presumed expertise in investment decision making it seems highly likely to have put paid to any consideration by the client that property was a viable alternative for investment gearing or other purposes. Given the sheer breadth of the property market (by State, region, sector (commercial, industrial, residential}, structure - listed, unlisted, individually held, pooled etc.,and the very real likelihood that different sectors within it will experience different demand and supply impacts over time I find the blanket prediction at page 15 to be an unreasonable prediction, particularly given the apparent context of its use. 

Mr Walker also states in his report: 

Since 1992 I have reviewed hundreds of both Statements of Advice (since 2002) and Financial Plans (prior to that). ln that time I can recall only one other instance of a piece of written advice that the advice provider required the client to sign an acknowledgement at each page that they had read and understood it. In the context of a 110 page document such as the Storm SOA, I find it extremely difficult to believe that a client (even one who has been drilled in the process through a course of meetings over 183 days) could make sense of the majority of the content within the SOA. 

I am not aware of the context in which each page was signed but would be surprised to be told that the advice provider read and explained the import of every word of every page to every client as they signed each page in acknowledgement of their understanding. 

One of the cornerstone rules in relation to SOA content is contained in sections 9478(6} and 947C(6} which requires that "the statements and information included in the Statement of Advice must be worded and presented in a clear, concise and effective manner. '*In my view the SOA is unclear, verbose and ineffective'*. 

I mean *"unclear"* in that the SOA fails to establish in my mind what the relevant personal circumstances of the client are, hence rendering its advisory content invalid. I mean *"verbose"* in the sense that the 110 pages (plus appendices) does not appear to do anything more than deliver the message I summarised above: That is 

(a) Re-finance your home loan to enable those borrowed funds (net of any existing mortgage debt repayment) to be applied to the acquisition of unlisted managed investments - presumably outside of the superannuation environment. 

(b) Make sure the new loan is "interest only" in order to minimise the repayment amount. 

(c) Take out a margin loan that will be secured against the value of investments into unlisted managed investments. 

(d) Invest any income generated (net of repayment of interest on each of the above loans) by the above investments back into the same unlisted managed investments. 

I mean *"ineffective"* in the sense that the SOA appears to avoid or ignore any need to assess what the clients actually want to achieve and to then assess that in terms of what they can afford to risk and what they can bear to risk in pursuit of that objective.” _

I think it is safe to say that a prima-facie case has clearly been made for the _“unsuitability”_ of the Storm plan in respect of the majority of (if not all of) Storm’s clients that were double geared in this way. I doubt whether Clarence Darrow (a famous American defense lawyer) could successfully defend Storm’s directors’ against these charges, but it will be interesting to see Storm’s lawyers try! There may yet be more charges to come if it is shown that Storm’s directors’ _“misleading and deceptive conduct" _was intentional and their financial strategy was consequently promoted for an ulterior motive? Profit could well be one such motive!” 

*2. Viability
*
For me, the question that has been on my lips these last few years has been, _“If Storm’s plan was not a viable one, how was it that it seemed to succeed long term for many investors that had been with Storm for a number of years leading up to the GFC?” _After all, these long time clients of Storm had been singing its praises for some considerable time and were telling others to join Storm too! As I have already stated, much of Storm’s business came from referrals.

This is a genuine question by the way for those out there that insist this was a _‘con’ _because one would think that if it were, such would have been exposed long before the GFC came along? The definition of a confidence trick is, _“an attempt to defraud a person or group by gaining their confidence”_. At the end of this exercise you will need to decide whether Storm’s scheme was just that! For now though, we need to figure out why Storm’s scheme appeared to be successful on the surface - (after all, Storm was not around for ‘two minutes’ but rather for some years!). We also need to understand how the plan actually worked in practice, and why it eventually led to such catastrophic losses for many that invested using Storm Financial.

(a) Storm’s success before the GFC.
Looking back, what gave us the confidence in Storm was the ‘feed back’ we received from many of its clients. I remember sitting in the reception area of Storm’s Office in Brisbane on more than one occasion listening to people there telling us how pleased they were with Storm and how their portfolios had grown considerably over time. I’m sure many other _‘Stormies’ _had the same experience. What really was the state of that company then and did anything in its financials give us any clue?

The Worrells Report (23rd March 2009) supplies this information:

_“A financial snap shot of the Storm Group taken at 30 June 2008 provides a very positive view of its financial position. In regard to the year ended 30 June 2008 the Group:
• Earned gross revenue of $69.9 million, which was an increase of nearly 57% over the prior year.
• Recorded a net gain in value of $7.08 million from assets available for sale.
• Disclosed a profit before tax of $37.5 million, which represented an increase of 263% from 2008.
• Had net assets of $13.72 million
• Had cash and equivalent resources of $24.9 million
It also appears that at that time the Group had excellent relations with its bankers and clients. Further, internal marketing reports submitted to the board of directors suggested that the “pipeline” of potential clients remained healthy, and consequently an ongoing income stream could be anticipated."_

It doesn't sound like a shaky company to me?

_"And yet, just over six months later, Storm was insolvent and had appointed Voluntary Administrators,which culminated in a cessation of business, the Commonwealth Bank of Australia (the Groups bankers) had appointed Receivers to take control of most of the Group’s assets and many clients held Storm liable for losses on the share market that they had incurred amounting to many millions of dollars.
The initial catalyst for the dramatic reversal of Storm’s financial position was, without a doubt, the very large and sustained drop in the Australian share market. Whether the company could have withstood the drop in the share market with the assistance of its bankers; whether the investments recommended by Storm to its clients were appropriate in most cases; whether the Fund Managers managing client investments acted appropriately and whether the actions of Storm and its directors following the drop were appropriate, are all issues that have been called into question. They are also issues which will require detailed and sustained inquiry, perhaps with the assistance of the courts, before a final judgment can be made.”_

The words stated above, _“And yet, just over six months later, Storm was insolvent and had appointed Voluntary Administrators, which culminated in a cessation of business” _are most telling. Was this due to the GFC alone or was there something more sinister at work here? That’s what we will try to decide at the end of this exercise. 

Incidentally, the question must also be posed, _“What would anyone have uncovered about Storm prior to its collapse?”_ Very little if anything, I suspect. The company was in good shape and had a history of success. ‘Cassandra’ might have been dubious but there was nothing to suggest to us mere mortals, that invested using the services of Storm, that this was a big scam. Whether it was or not is something else again and one that still needs to be determined in the Courts. I will draw my own conclusions at the end of this exercise, but we need always to remember that people in this country are innocent until they are proven guilty. Anything I therefore state in this regard under ‘_Consionability’_ which follows on from this topic is merely speculation and should be treated as such. However, on the evidence to date, things are not looking too flash for the directors of Storm.

(To be continued.)


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## Julia (6 May 2012)

Frank Ainslie said:


> For me, the question that has been on my lips these last few years has been, _“If Storm’s plan was not a viable one, how was it that it seemed to succeed long term for many investors that had been with Storm for a number of years leading up to the GFC?” _After all, these long time clients of Storm had been singing its praises for some considerable time and were telling others to join Storm too! As I have already stated, much of Storm’s business came from referrals.
> 
> This is a genuine question by the way for those out there that insist this was a _‘con’ _because one would think that if it were, such would have been exposed long before the GFC came along?



There shouldn't be any mystery about this.  The happy investors referred to above were participating in the strategy during a bull market.  Of course with that massive leverage they were doing well.

A whole different story when the market turned and the leverage meant  your losses were magnified in contrast to the profits being magnified during an uptrending market.


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## Ijustnewit (6 May 2012)

Here are some ideas for thought of why many people walked away from Storm without signing up . I will base these ideas on my 25 years plus experience in Sales and Marketing in the Retail Sector . I think some of these ideas and marketing facts can be also be applied to any product from a can of baked beans to financial services. Everyone is open to their own opinion, so believe what you will and no offence. I am not trying to incite another riot as this Forum as it is heading in a most positive direction and would like to keep it that way
So here goes, Fact 1: Retail sales conversions (from the customer making and inquiry to placing a purchase ) runs at approx at about 30 %. That means 70 % will walk away and not follow through or purchase elsewhere. 
No one has a 100% conversion rate. That's why advertising has to be constant and sometimes abrasive I think a good example is all those Harvey Norman adds we love 24/7.
Also that's why Retail Managements set the K.P.I 's ( key performance indicators ) at around 50% conversion rates for staff. It's the old carrot and stick trick for the hope of that bonus. Give them a target above the Fact 30% but not too far away, and yes sometimes they will achieve this. But on average it will fall back to the magic 30%. They get the best from the staff and don't have to pay as many bonuses.
Fact 2 : Modern Marketing now mainly uses three main ways to bring increased sales.

The first is what we call Ego based or need based marketing. As in The flashy car , The nice shoes. 

The second and most popular is Fear Base Marketing . As in Funeral Insurance Plans and creating a need and putting doubt out there.

The third and greatest growing is Word Of Mouth . As in My mate told me , You can Like Us on Facebook , Can I have you email at the completion of a sale , And those Gift vouchers that encourage previous customers to come back for % off , the list goes on and on.
So I believe that most people (70%) that walked away from Storm just where shopping   and that's it. Sure there may have been the occasional Financial Guru that saw through the Plan and dismissed it as a Scam. No different to somebody that has a heads up on certain cars and their problems and won't buy that make. But remember on average only 30% of people convert their need into reality.
It's very clear to me now that Storm where well ahead on their Marketing when it came to Fear based Marketing. Remember most people took up the offer of Storm to manage their finances because they wanted to secure their future and their kid's and grand children's.(incidentally it's the same type of avenue Labour and the Greens are taking to sell the Carbon Tax) Fear based,  Storm took advantage of this factor by putting the fear of god that into people.
Word of Mouth , probably the most used method. It was in my case and I know Frank has mentioned it as well. Here is fact!! I know Storm paid a finders fee to clients to direct business to their door. This is unfortunate as it meant that whole families and the next generation have been wiped out as well as friends. 
I wish I'd been in that 70% but as they say **** Happens. I'll be working when I should be retired but what is done is done. Compensation if any would be great and it would help me on cutting back on the sell out bin at Woolies and I found some great clothes at vinnes so it hasn't been all bad. I believe in reincarnation, so there is always the next life for all those dreams.


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## bunyip (7 May 2012)

Ijustnewit

Thanks for those insights into retail marketing...interesting. 
Based on what you’ve said, I’m happy to acknowledge that some of the people who walked away from Storm probably did so for the reasons you’ve mentioned.
There are, however, others who walked away because they spotted the risks.

One thing I've never been able to agree with on this thread is the repeated assertions that nobody could have seen through the Storm strategy, that the information necessary to spot the con wasn’t available to the average person, that if ASIC couldn’t see through it then how could anyone else be expected to see through it, that even savvy investors couldn’t have seen through it, that the average man in the street couldn’t be expected to know that an asset class such as shares has a history of volatility, that if somebody like Frank with his financial accounting background couldn’t see through it then what chance did anyone else have....and so on and so on and so on.

The fact is that the simplest of research into past stock market plunges would have shown the strategy to be risky in the extreme, regardless of how safe Storm made it sound by speaking about their trigger points and the ‘conservative’ index funds that were their investment of choice.
Over the years I’ve been regularly targeted by one con after another via emails and letters in the post, mostly from people pushing highly leveraged investments in options, futures, currencies, stocks, property – you name it.
God knows how they get my contact details – I certainly don’t supply them – but in one way or another these cons all seem to have a similar theme to Storm......they espouse the virtues of magnifying your returns through the use of gearing, they downplay the enormous risks, they try to scare you with talk of how doing nothing with your money is the greatest risk of all due to the erosion effect of inflation, and they talk about the great lifestyle you’ll have as a result of building yourself into a wealthy capitalist (with their help of course!).

Whenever I read their rubbish I think back to the 1987 market crash and the enormous number of people who were devastated by it. 
I’m still perplexed as to why Storm investors who were adults in 1987 wouldn’t have thought back to that well-publicized crash, and considered how a similar crash would effect them if they implemented a strategy of risking their homes to raise massive loans to sink into the stock market.
Do people just have short memories? Or did they think that '87 was just a one-off crash that wouldn’t happen again? I once asked Frank _‘Did you consider the 1987 market crash before sinking all that money into the stock market’?_
 But I received no answer.
Ijustnewit, now that you and I are being civil to each other, can you tell me if the ‘87 crash, and more specifically the possibility of another similar crash, was something you considered when you were deciding whether or not to sign on with Storm?


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## Frank Ainslie (7 May 2012)

STORM’S STATEMENT OF ADVICE (Part 4) 

Lifestyle (Continued – posting 3)

(b) Storm’s strategy of double-gearing its clients

Mr. Waler in his report submitted in evidence at the Worrells’ enquiry stated that Storm’s strategy for its clients was to:

_"1. Re-finance your home loan to enable those borrowed funds (net of any existing mortgage debt repayment) to be applied to the acquisition of unlisted managed investments - presumably outside of the superannuation environment. 

2. Make sure the new loan is "interest only" in order to minimise the repayment amount. 

3. Take out a margin loan that will be secured against the value of investments into unlisted managed investments. 

4. Invest any income generated (net of repayment of interest on each of the above loans) by the above investments back into the same unlisted managed investments.”_

We have already established the _“unsuitability” _of the plan and its _“high risk”_ nature that was never knowingly agreed to or now deemed appropriate for Storm’s clients. I think we will all agree that because it was a _“double-gearing plan” _and therefore classified as _“high risk”_, its was beholden on Storm to have systems in place whereby effective monitoring could take place, and the _“triggerpoints”_ activated when circumstances demanded it. We now know that the _LVR’s_ Storm used were inaccurate and further that Storm did not act on them anyway in the latter part of 2008 when the affects of the GFC impacted on Storm’s clients.

Having identified these critical defects in Storm's plan, we now need to ask ourselves whether Storm’s plan was actually viable even when all the planets aligned? Did the stock market gains in those “_happy times”_ cover over any cracks in the Storm scheme, or did the plan have some merit, and could have succeeded long-term if the GFC had not occurred? 

In order to test its viability, we need to look at the plan in depth and see whether its structure was sound, its objectives realistic and its recommendations practical. This should help us to identify whether it was designed to ultimately benefit Storm’s clients or, as I suspect, to help Storm achieve its own ends, and Storm’s clients’ needs were a secondary consideration.

Before I begin, it might be worthwhile to consider how many of Storm’s clients were double-geared in the same way we were? One would, of course, need to carry out an analysis of Storm’ data base of clients to establish the exact numbers and that is not possible. Therefore, I will work on the information that is at hand which may be inaccurate but will allow us at least to get some idea. If anyone has more accurate data on this, please let me know.

_“In August 2008, Storm’s clients had $4.8 Australian billion invested in the company's sponsored share funds. By October 2008, that had dropped to A$3.5 billion, primarily as a result of falling share values. In August 2008, approximately 37 percent of investments were being funded by margin lending. In October 2008 it had about 13,000 clients.”_(Media report)

Another source stated that _"4000 clients suffered losses estimated to be $3 billion?"_

Let’s work on the premise that about one third of Storm's clients incurred most of the losses! The fact that so many Storm clients are still loyal to Storm despite what occurred suggests to me that Storm’s loyal band of followers are part of the other two-thirds that merely invested in Storm without being double geared as we were. This may also explain why some of Storm’s former clients despite the _“hue” and “cry”_ about Storm still remain devotees. 

Why some were selected by Storm for double-gearing and others were not, or if they were, declined remains uncertain. Maybe they saw something that the rest of us didn’t or we were targeted and they were not? – who knows! Whatever, a considerable number of Storm’s clients were double-geared; Helen and I being among them. 

Okay! Let's have a look at Storm's vaunted plan in depth:

One of the features of this plan and a corner stone on which it rested was its reliance on "_cash reserves"_.

In one of my previous postings dealing with _“triggerpoints”_ I quoted from a submission made to the PJC by an unnamed party and I will be using further extracts from this submission that I will hereafter refer to "as Mr. X’s submission". I am using this submission for the most part rather than quoting our own circumstances because many that were double-geared were not as fortunate as us - for one, they did not have the same asset base and were therefore far more vulnerable.

Part of Mr. X’s submission: 

_*“STORM's failure to take initiative & respond appropriately; monitoring of LVR's and cash dam.* 

1. Taking investment steps on the cusp of the Global financial Crisis 

On 11th August '07 we expressed in writing our concern about taking a recommended investment step. 

We calculated that if we took this step we would be geared to what was for us an uncomfortable LVR of 71.4% if markets fell by the then optimistically predicted 15% as the world experienced the first ugly rumblings of the 'sub - prime' mortgage crises' surfacing in the USA. 

We expressed our concern in a fax to STORM's head office in which we said that we thought it would be best to defer the step until we could be sure that, in view of these events and the press reports that this contagion would undoubtedly spread and that Australia would not be immune. We said in our fax to STORMS Head Office that we felt the timing of the investment $188,788 may not be judicious or perhaps the best advice at that time given the predicted fallout and that we did not want to proceed with this investment step. 

We were however told that Australia and the rest of world were quite safe and we would be quite OK and should proceed. Even without the benefit of hindsight this seems to have been either naive or ill considered advice given the closely wired and global nature of the world, its current banking systems and practices. 

We should have heeded our own counsel. 

2. Our monthly Income allowance 

Many times we suggested to our advisor that we could actually take less income than what we were being 'paid' and that we had a preference for this to be changed as we did not need to draw $7000.00 plus a month. 

We were however always told that this would upset the cash flows and it was best to leave things as they were. 

3. Who was really monitoring our situation apart from us? 

Cash Dam levels. 

On 11 August 2008 we were very concerned about our cash dam level which had fallen below $8000.00 - a level that would not cover our next income payment due 15/8 or interest due to the Bank of Queensland on 22/8. We took numerous steps alerting STORM to this critical situation. Their failure to respond in a timely manner was very disappointing and disturbing. By 21 August, the day before the interest was due nothing had been done and our cash dam was then at $627.88 

On 21 August we emailed, as follows, Bernardine Frawley, also a STORM Authorised Representative with whom we had met in the absence of our usual advisor: (*email advice underlined*)

‘As we are really concerned about the lack of available funds still evident in our MCMT account (available balance as at 21/8/08 is only $627.88) and as it also appears to us that we may have been left in a position of defaulting on interest due to Bank of Qld, we have tonight transferred $3,000.00 of our own funds to MCMT account. Hopefully this will cover the interest that will be due to Bank of Queensland on 22 August. However as we did not do this transfer until after 6.00pm we are not sure whether it will hit the Macquarie account in time.’’ 

We have previously brought the situation of the low MCMT balance to STORM's attention at our meeting of 14/7 and again on 11/8 when we were assured that the matter would be addressed as matter of priority. On Tuesday 19/8 we followed up our enquiry of 11/8, our main concern being the critical lack of funds to cover Bank of Qld interest due. Today we were advised that there would be an answer tomorrow (22/8/08) from STORM. However tomorrow, 22nd of the month and the usual due date that interest to Bank of Qld is debited, seems far too late to be just talking about an action plan for the cash dam ( MCMT). 

We are sorry to say that we are feeling just a little less happy than we would like. We feel that in this instance a solution has been left to the11th hour and that it is we who seem always to have to take the initiative to find out what is going to be done about the situation. You have assured us that STORM is there to look after us and so we don't feel that it is entirely appropriate that we should have to constantly follow up matters ... especially one like this. 

Perhaps you do have the 'Ace's' in place already and we need not be feeling the way we do .. if so it would be good to know sooner rather than later.’ 

On 8 December 2008 we again took the initiative and advised STORM'S North Sydney office by email that "before Christmas (our) funds will drop to about $5,000.00" 

We also advised STORM as to what we estimated we might have at the end of January 2009  However by this time it was clear to that the STORM organisation and its hardworking North Sydney staff were under enormous pressure and that the Financial Plan was falling apart as clearly there was either no strategy in place apart from using the Quarterly interest from the cashed down trusts. This interest would barely cover our interest repayments and income for January 2009. 

We thought we had been promised that our situation would always be carefully monitored and for $96,630.00 up front fees this was not an unreasonable expectation. But who was monitoring, apart from us, we would like to know?"_

To be continued..


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## Frank Ainslie (7 May 2012)

STORM’S STATEMENT OF ADVICE (Part 4) 

Lifestyle (Continued – posting 4)

(b) Storm’s strategy of double-gearing its clients (Continued)

The aforementioned comments by Mr. X clearly indicate that Storm were completely out of touch in relation to their clients’ immediate needs and had no way of monitoring their clients' Dam’ (cash reserves) accounts’. Yet the monitoring of the ‘Dam’ account was a fundamental part of this plan if it were to operate efficiently. It is also apparent from the gobbledegook language used in the SOA that Storm was always vague or contradictory when it came to whose responsibility it was for monitoring parts of its plan. However, the Cassimatises have now been forced to admit in Court that they were responsible so we’ll work on that basis. 

Let’s see what Storm’s SOA said in relation to cash reserves.

_“Page 60 of the SOA
We manage the volatility of your Investment by ensuring that you have adequate Cash Reserves to use for your Plan when the income and capital growth from Shares is low. When the returns from your Share Investment rise, we will replenish the Cash Reserves; in this way they act as a 'dam' to ensure that the variability of returns becomes insignificant to the operation of your Plan. It is very important that these Cash Reserves be maintained for the purpose described above - they are not provided to finance private spending, and should not be used for any purpose without prior consultation with us.

When the market goes down losses are also magnified. For this reason, your gearing level must be prudent, and your Cash reserves sufficient to allow you to persevere during periods of negative returns. We have addressed both of these issues in detail in this document. Our Viability Testing evaluates your ability to handle the variability of returns associated with a Share Investment. The Cash flow attached as Appendix B shows that we have made provision for adequate Cash Reserves to act as a buffer between the changing value of your investment and the requirement to consistently meet your commitments. 

Page 88 of the SOA - Review of Your Journey 
It is essential that your progress be reviewed regularly. This will allow us to reassess your position in the light of any changes that may arise. These may be due to the legislative, economic or other environmental areas that will impact on the effectiveness of the plan. Reviews will ensure that your Portfolio keeps pace with changing circumstances as you move through life and allows us to monitor and take advantage of these changes for the purpose of your basic objective of increasing the SIZE and QUALITY of your capital base. "_

These statements imply (1) that the ‘cash reserves’ are an amount of money set aside for any emergencies and must be left undisturbed so that they are able to be called on at all times if need be, and (2) they are critical to the plan’s success.  Yet, paradoxically, our living expenses, margin loan interest and housing loan repayments were all drawn down from this account.

In Mr. X’s submission he  stated the following about cash reserves:

_"Insufficient depth of cash reserves. 
“As already stated above we were retired at the time of investing in STORM. There was an increased risk to us as retirees with no other source of income or cash reserve outside of the Storm basket. 

In our book 'The Business of Making Money '(Statement of Advice') which was prepared for us as our Financial Plan it says that uncommitted cash reserves were an important component of the Plan. Despite this there was no advice or diligence to ensure that we should, as a safety net, also have cash funds outside of and unrelated to the 'STORM basket', available and set aside additional security - just in case. 

From our asset and liability situation STORM knew we had no other funds of significance as all our finances went into the Storm Investment. There were some monies about $53K set aside as 'pending outlays' but this was really from our own original funds that we had contributed to the whole scheme. 

Our Plan states that 'Cash reserves of around $180,000.00 will be your primary form of protection from the effects of varying returns from you Share Investment...'

This was in fact the monies in our 'cash dam'. All this cash was already dedicated to the Plan and so could not be a source of security. It was already' spoken for' as it was to be used to cover interest payments to the Macquarie Margin Lending, Bank of Queensland and for our monthly income (cash flow) 

Our uncommitted cash Reserves 

What we did not utilize from our monthly income of over $7000.00 per month, we saved as we did not live extravagantly. 

We were not actively advised or encouraged to save or be conservative with our cash but our own instincts told us we should be preserving our cash long before the rather late advice from Emmanuel Cassimatis in late 2008 to be doing the same. In fact had we not been more frugal than we were - STORM was not 'big' on frugality and encouraged us to indulge - we would not have been able to pledge additional security to our Margin Loan. 

In July 2008 we pledged a further $100K of our own savings as security against our Margin Loan to reduce the LVR to a safer level. 

Experience 

As we lacked any experience when it came to margin lending and we did not have the real life hands on experience to assist us in grasping the main risks in relation to the debt borrowed- that it could massively escalate if stock values fall. Whilst these risks were referred to in the 100 plus pages we had to read to understand the strategy, we do not recall significant focus or detailed attention to this by our advisor. It was discussed, but the best way that we can describe these discussions is that the risks, even the worst case scenarios were minimized 'played down' and portrayed as being unlikely to ever happen. Only the positives were dwelt on and we were not knowledgeable or experienced enough to know at the time (2006) what questions we should have been asking or what issues we should have been more alert to or insistent in having clarified.” _

Looking back, the _‘cash reserves’_ that we _“needed to protect at all costs”_ according to Storm were not cash reserves at all but rather an account whereby we were paying ourselves (which had been allowed for in the SOA) but was always reliant on top ups. If one didn’t have the additional cash, tough! But then again, Storm could always arrange for you to borrow more for a fee.

Naturally, if no cash was coming in, the cash reserves quickly dwindled which is exactly what happened. That minor detail was left out of the SOA. It therefore makes a mockery of the following statements contained in the SOA:

_Page 89 of the SOA 
Build Portfolio 

Generally, a movement upwards in the sharemarket will decrease your debt ratio and will therefore allow further borrowing to enable the debt ratio to regain its previous level. This extra debt will enable the purchase of extra share units for your investment portfolio and indirectly allow you to increase your cash reserves through the taking of profits in your portfolio. The replenishing of cash reserves plays an important role in allowinjg you the opportunity of taking additional steps when the markets fall.

Recovery Portfolio
In the case of a downward movement in the market and hence in the value of your investment portfolio, your debt ratio will rise. To take up the opportunity to purchase extra share units in this case it will be necessary to use some of your cash reserves and less debt to finance acquisition. This will minimise the impact on your debt ratio. This may mean that on average your share purchases may be smaller when you purchase in a market fall but the benefit will be large because the shares will be cheaper. Once the market rises again, the rate of return on the portfolio will be higher than if the assets were not purchased while the price was relatively low.”_

The cash reserves or ‘Dam’ account (like the margin loan account) was a separate bank account that we took out on Storm’s advice. It is apparent now that Storm had no way of monitoring this account (or the margin loan account) through its software system, and yet sold us a _“total control” _concept as part of the package. The cash reserves and margin loans were important elements of the plan and unless Storm had this information readily available, its monitoring and safeguards were _"pie in the sky"_!

The ‘Dam’ account or cash reserves did not work in practice because we had to keep replenishing this account from our own resources (if we had any left after Storm got through with us) as our reserves of cash inexorably shrank. In a market that continued to fall for some time, it was a recipe for disaster.

I think we can mark down the _‘cash reserves’ _part of this plan as impractical and I think we can also say that the SOA’s statements related to this were entirely misleading.

(To be continued.)


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## Julia (7 May 2012)

> Part of Mr. X’s submission:
> 
> “STORM's failure to take initiative & respond appropriately; monitoring of LVR's and cash dam.
> 
> ...




The above from Mr X and your own similar concerns, Frank, leave me simply unable to comprehend why you, Mr X, and any others who would have felt similarly, did not just pull out all your investments and part company from Storm

The global storm clouds were gathering more intensely every day.  Mr X makes clear that he was aware of the potential fall out from the US subprime mess, but he just sent emails expressing his concern rather than take definitive action.

This is what I just don't get.  People like Mr X had their entire financial asset base in this situation, yet they just stood by, and - despite expressing concern - did nothing to save themselves.

Why?   Were people so impressed by Storm's gold plated bathrooms and the high flying lifestyle exhibited by those who were invested in the bull market, that they were intimidated out of trusting their own judgment?

Just the flowery, verbose nature of so much of the SOA would have put me off in a minute.  It seems to have been very specifically designed to suggest the reader was unintelligent and uninformed as against Storm's sophisticated market knowledge and experience, and thus to render the client's basic instincts invalid.


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## SJG1974 (7 May 2012)

Julia said:


> The above from Mr X and your own similar concerns, Frank, leave me simply unable to comprehend why you, Mr X, and any others who would have felt similarly, did not just pull out all your investments and part company from Storm
> 
> The global storm clouds were gathering more intensely every day.  Mr X makes clear that he was aware of the potential fall out from the US subprime mess, but he just sent emails expressing his concern rather than take definitive action.




This.


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## Frank Ainslie (8 May 2012)

STORM’S STATEMENT OF ADVICE (Part 4) 

Lifestyle (Continued – posting 5)

(b) Storm’s strategy of double-gearing its clients (Continued)

*Margin Loans*

One of the key components of the Storm plan offered to us and thousands of others was that of the margin loan concept. 

Here’s some extracts from  CHOICE ONLINE about margin loan borrowing: 

_“Guide to margin loans
(a)	Borrowing to invest can make your money work harder but it's a risky strategy in a volatile market. 
(b)	Borrowing to invest ”” for example, a margin loan ”” can be a very effective strategy to build your wealth, but it’s not for everyone. You need to have excess income, be a savvy investor and happy to take risks.
(c)	Because you’ve more money to invest, your investment gets a 'turbo boost' and gains are magnified. But if your investment loses money, losses are magnified too. Not only have you made a loss but you still have to pay back the loan.
(d)	Be aware of the current volatile share market environment, get financial advice and have a strategy in place for meeting a margin call.
(e)	A margin loan allows you to borrow money to invest. The margin loan is secured against the investment you make with it and/or other investments you have…
(f)	Borrowing to invest is a high-risk strategy. You need to be a savvy investor or get good advice from your adviser or broker to find a good investment in the current volatile share market climate. 
(g)	Before committing yourself to a margin loan, ask yourself if you have the following:
*Enough excess income to cover the interest payments, even if the interest rate suddenly goes up or your investment makes a loss.
*A long-term investment perspective and the ability to cope with making a loss for some time.
*A secure job ”” or the ability to cover the interest payments if you lost your job.”_

Let’s look at these factors in relation to the Storm plan:

*(a) Borrowing to invest can make your money work harder but it's a risky strategy in a volatile market.*
Did we know this? Here’s what Mr. X had to say that may throw some light on the subject:

_“STORM as a company was sold to us as an industry leader, one of the largest independently owned financial planning firms in Australia with a professional and highly educated staff (most to Masters Degree level) whose philosophy and style of business would enhance our futures 
Our Financial Plan did outline the risks involved in Geared Investing however it was 
expected that "positive outcome would outweigh the negative outcome of gearing in a falling market" 
However the STORM investment model was not ever really described to us as a 'high risk high return model. 
It was emphasised to us as being safe and conservative as it did not try to 'beat' the market returns, which were for safety sake, underestimated. The fact that the investment was in Top 200 ASX companies was further justification of its safety and near infallibility. Whilst it was pointed out that the stock market was beyond anyone's control, it was also stated that whatever the state of the market, the STORM model would not fail us as it was robust, stress tested, and had been proven to work in all market conditions - past, present and future.
The general approach was to 'gloss over' any doubts that we might appear to have. The possibility of the market falling to the point of a margin call was so unlikely as to never happen and this was justified by historical data to date, so we should not have real concerns about serious market falls ever becoming an eventuality. And STORM would always be there for us! 
It was always emphasized that LVR' S would always be kept at safe and conservative levels. 
No more than 60% of our asset base was to be represented by borrowed funds.”_

This was the same line most others including us were sold as well. 

*(b) Borrowing to invest ”” for example, a margin loan ”” can be a very effective strategy to build your wealth, but it’s not for everyone. You need to have excess income, be a savvy investor and happy to take risks.*
We had excess income but we were not savvy investors and certainly did not want to take any risks. No where in the Storm plan did it state that it was _"high risk"_

*(c) Because you’ve more money to invest, your investment gets a 'turbo boost' and gains are magnified. But if your investment loses money, losses are magnified too. Not only have you made a loss but you still have to pay back the loan.*
Actually, this was one of the biggest misnomers about the Storm model because the housing and margin loans did not in reality advantage us at all, quite the contrary, and I will be commenting on this particular aspect in my forthcoming posting on _‘Conscionability’._

*(d) Be aware of the current volatile share market environment, get financial advice and have a strategy in place for meeting a margin call.*
It would be naÃ¯ve to suggest that we were unaware that the share markets were subject to falls as well of rises. We did however employ a financial advisory that was well aware of this fact and we quite rightfully expected that adviser, namely Storm, to have a strategy in place to cater for such. That is what we were led to believe and the directors of Storm are now being held to account for failing to do this.

*“Page 61 of the SOA*_
We have advised that you use borrowings to facilitate the purchase of business assets. In so doing, we have used strict guidelines on the amount of those borrowings, and have related them to the size of your asset base. As has been explained within this document, should you implement these Recommendations in full your overall debt ratio would be 48%, which is made up of liabilities of 80% of the value of your home and other Property assets, and 49.17% of the value of your Share*based assets. 
These debt levels are well within our guidelines as being prudent. Adequate arrangements have been made to handle market volatility and the associated potential for margin call - these have been fully described and explained in the section of this document entitled Your Post-Plan Position.”_

*(e) A margin loan allows you to borrow money to invest. The margin loan is secured against the investment you make with it and/or other investments you have…*
We certainly understood what a margin loan was but we were assured that Storm had systems in place to protect us if the markets took a turn for the worst. Don’t forget that we were told that the risks were minimal because Storm had all the bases covered. At no time, were we told that this was a  _‘high risk’_ policy  it was mandatory on Storm’s part to tell us this before we signed up with them. In Law its called ‘_misrepresentation’_ which is a common theme throughout Storm’s SOA.

*“Page 40 of the SOA - Geared Investing *_
Borrowing to invest magnifies market returns, but it is important to be aware that while gearing increases investment returns above the market average in a rising market, there is also a magnification of negative returns. In a falling sharemarket, the dollar value of losses is greater with a geared investment, so in percentage terms, losses will be greater than that experienced by the market.”However, it is important for investors to understand the negative as well as the positive effects of owning leveraged assets, and that there are strategies and protection in place to deal with the inevitable downturns._

*(f) Borrowing to invest is a high-risk strategy. You need to be a savvy investor or get good advice from your adviser or broker to find a good investment in the current volatile share market climate.*
We were certainly not aware that this was a “high-risk strategy because the risk was played down by Storm. We certainly were not savvy investors and relied entirely on Storm to assess the risks and devise a plan that was suitable to our needs and carried minimal risk. That is what we asked for of Storm and that is what we didn’t get.

*(g)  Before committing yourself to a margin loan, ask yourself if you have the following: (1) Enough excess income to cover the interest payments, even if the interest rate suddenly goes up or your investment makes a loss, (2) A long-term investment perspective and the ability to cope with making a loss for some time. (3) A secure job ”” or the ability to cover the interest payments if you lost your job.”*

* We certainly started off having enough excess income to cover the interest payments, even if the interest rate suddenly went up or our investments made a loss. 

* We rightfully thought Storm had our long-term investment perspective in mind when they devised a plan for us and claimed that the plan had the capacity to cope with any downturns. 

* We had the ability to cover the interest payments because of the assets we had at the time despite the fact that we were retirees.

As in the case of _'cash reserves'_, unbeknown to us Storm had no monitoring system in place for margin loans. Therefore, Storm had no ability to effectively control our portfolios overall and never did have! Again, this was a blatant misrepresentation of the facts which can now be added to our list.


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## Frank Ainslie (8 May 2012)

We still have a ways to go! I will then endeavor to answer all your posts. Please keep them coming though!! Even the negative ones!


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## Julia (8 May 2012)

Frank Ainslie said:


> We still have a ways to go! I will then endeavor to answer all your posts. Please keep them coming though!! Even the negative ones!




Hopefully we are now at the stage where questions raised are not considered necessarily 'negative' and rather a genuine wish to understand the thought processes that allowed Storm investors to be persuaded they were buying a safe strategy.


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## Frank Ainslie (8 May 2012)

STORM’S STATEMENT OF ADVICE (Part 4) 

Lifestyle (Continued – posting 6)

(b) Storm’s strategy of double-gearing its clients (Continued)

*Growth*

Once again I will call on part of Mr. X’s excellent submission because he ran the Storm model past other financial advisers(unfortunately, after the fact) and his observations therefore carry some weight. I would appreciate Doobsy’s input on this as well when he has sufficient time to do so. 

_“Page 24 of the SOA - Cash Flows 

The SOA states: "We have prepared a cash flow that tracks estimated revenues and 
expenses .... .This analysis assures us that the plan is viable and that the associated borrowings are manageable." 

Clearly, we can now see that this statement is incorrect as discussed in the analysis below. 

Page 32 of the SOA

The SOA states: "The estimated level of cash reserves is documented for each of the 17 financial years detailed in the Cash Flow. Recall that your Cash Reserves Dam is the amount that remains after all the revenue of the Plan is received and all of the expenses associated with the portfolio have been paid." 

Earlier in the SOA, the adviser had suggested that dividends should usually be reinvested. 

In the last paragraph on Page 32, the SOA states: ‘See the graphical representation of the rising value of these Cash Reserves over the medium term on page 2 of the Cash flow." This Cash flow analysis is included in Appendix B. 

The graph clearly shows Cash Reserve Levels starting at around $190,000 then falling to around $65,000 after a year and a half. The Cash Reserve Levels then turn sharply and show a continued rise over the full period of the projection to 2022. 

The Cash Reserves shown in the graph do not agree at all with the Cash Reserves shown in the table that follows two pages later. We now realise that the Cash Reserve Levels in the graph are in fact the Total Reserves in the table. These Total Reserves are made up of the growing overdraft offset by the unrealised Accumulated Investment Growth". 

In fact, the cash flow table shows a VASTLY different story to the Cash Reserve Levels graph as summarised in the table below; that is, the level of cash reserves actually declines into a growing overdraft for the life of the Plan: 

Date Cash Reserves 
To:		                      

July 2006 	               $187,205 
July 2007 	                 $72,042
July 2008 	              - $29,047
July 2009 	              - $130,372 
July 2010 	              -$238,010
Through to July 2022 - $2,425,300


This outcome is not surprising when you look at the income and expenditure figures as shown below for July 2007, July 2008 and July 2009: 


                                                     2006/2007 	2007/2008	      2008/2009
Opening balance July 2006:                $187,205	$72,042		$-29,047
Plus: 
Annual interest      		$4,867		$1,873		        - 3,108 
Annual distributions 		62,860	62,860		67,103
Tax credits 			        0		19,578		20,080
Sub-total 			       254,932	156,353	        55,028
Less: 
Yearly living expenditure    - 85,000	       - 85,000	      - 85,000
Margin loan interest) 	    - 60,450        - 62,000	      - 62,000
Bank repayments 		    - 37,440	        -38,400	       -38,400
Net cash reserves              72,042 	 78,372	        91,716
- year end

As each year progresses, the situation becomes increasingly worse. 
Very simply, outgoings continue to far exceed the income that the portfolio generates. 
The cash flow projection brings to account a line titled "Accumulated Investment Growth" and another titled "Total Reserves" as shown: 

Accumulated Investment Growth 	0		107,419	222,088
Cash reserves				72,042		- 29,047	- 130,372
Total Reserves			72,042		78,372		91,716

The way it is presented gave us the impression that we would be in a positive situation each year. At no time, were we advised that we would have to draw down against our loan and/or capital to fund the shortfall between outgoings and income. 

By 2022, the Accumulated Investment Growth is shown as $2,647,915 which is the theoretical increase in the value of our investments. If the investments were to be redeemed to offset the rising overdraft, then it is likely that capital gains tax would have been payable. There is no mention of this possibility in the plan. 

By 2022, the Cash Reserves are shown as being - $2,425,300; that is, we would have an accumulated debt of $2,425,300 in addition to our original bank loan of $480,000 and margin loan of $775,000 - a total debt of $3,680,300. 

One would have to question whether we would be able to sustain this end level of debt at the ages of 80 and 78 respectively, let alone be able to cope with it along the way. In fact, it was this rising level of debt by the second year that led us to draw on a small amount of other cash reserves to pay down some of the debt. 

The net gain over the 17 years is just $222,614, although, theoretically, along the way, we would have sustained a lifestyle of $85,000 per year. 

Page 43 of the SOA

The SOA states: "Borrowings are never to be used for consumption purposes." However, the only way for us to meet our $85,000 per year lifestyle expenditure was to draw down further against our capital and/or our loan facilities.

Page 44 of the SOA
"…gearing should not exceed 60% of your asset base". However, the cash flow  report shows initial gearing is 79%. 

Throughout, the SOA refers to the "purchasing of Business Assets" and "your Share Investment Business". This really gave us the feeling that we would be in full control and that we were effectively starting and running a "business" that followed a proven model. 

Page 63 of the SOA

"We manage the volatility of your investment by ensuring that you have 
adequate Cash Reserves to use for your Plan when the income and growth from Shares is low. When the returns from your Share investment rise, we will replenish the Cash Reserves: in this way they act as a "dam" to ensure that the variability of returns becomes insignificant to the operation of your Plan. It is very important that these Cash Reserves be maintained for the purpose described above - they are not provided to finance private spending, and should not be used for any purpose without prior consultation with us. Please ensure you recognise that these funds must be regularly placed into the Cash Reserves dam." 

As outlined earlier, at no stage in the estimated cash flow projections does the Cash 
Reserve increase. In fact, the table clearly shows the "Cash Reserves" to be in the negative and they are even printed in red. Clearly, we now realise that after just two years, we would have been into an overdraft. This overdraft figure is "offset on paper" by the supposed increase in the value of the investment portfolio; that is, unrealised capital gains. 

Page 64 Of the SOA "should you implement these Recommendations in full your overall debt ratio would be 49%, which is made up of liabilities of 60% of the value of your home and other property assets and 48.7% of the value of your Share-based assets." 

Surely this would make our overall combined level of liabilities as being much greater than 48.7% and less than 60%.”_

It therefore seems that the plan was not only flawed in its design but it was also misleading and deficient in its content. 

How many strikes is that now?

Incidentally, if there are any Storm advisers out there that can shed some light on all this, please feel free to comment. We would certainly like to hear your side of the story. This forum can be somewhat judgemental though so be warned.

I will deal with  ‘Conscionability’ in my next posting.


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## Frank Ainslie (8 May 2012)

Perhaps stating that this forum was somewhat judgmental in my last  posting on "Growth is a bit harsh. Maybe the word 'robust' is more apt!

See, I can be nice sometimes!


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## Julia (8 May 2012)

Frank Ainslie said:


> However the STORM investment model was not ever really described to us as a 'high risk high return model.



Of course it wasn't.  They'd hardly have expected to sell you the idea if they outlined the high risk.  That was the bit you had to work out for yourselves.



> It was emphasised to us as being safe and conservative as it did not try to 'beat' the market returns, which were for safety sake, underestimated.



To suggest that just because the scheme 'did not try to beat the index' it was therefore safe is a total crock.  
It was the double gearing that was the problem, far less to do with whether the resulting funds were invested in the top 200 or not.



> The fact that the investment was in Top 200 ASX companies was further justification of its safety and near infallibility.



So no company in the top 200 has ever fallen over?  Just think about ABC Learning, Centro and many others for a start.



> Whilst it was pointed out that the stock market was beyond anyone's control, it was also stated that whatever the state of the market, the STORM model would not fail us as it was robust, stress tested, and had been proven to work in all market conditions - past, present and future.



Did they show you a demonstration of how their 'strategy' would in its stress testing prevent losses in a falling market?




> It was always emphasized that LVR' S would always be kept at safe and conservative levels.
> No more than 60% of our asset base was to be represented by borrowed funds.”[/I]



Do you still think 60% of your asset base comprising borrowings was 'conservative' for a retiree?
I wouldn't be risking even 10% in retirement.



> We were certainly not aware that this was a “high-risk strategy because the risk was played down by Storm. We certainly were not savvy investors and relied entirely on Storm to assess the risks and devise a plan that was suitable to our needs and carried minimal risk. That is what we asked for of Storm and that is what we didn’t get.



We have been over this dozens of times.   Most potential investors would have still accepted the personal responsibility of evaluating the risk level for themselves rather than just taking the word of someone in whose interest it was to have you adopt their strategy.

Again, the above comments are not made in any spirit of condemnation.  Rather, an attempt to get answers to why you were so accepting of whatever Storm told you.


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## Frank Ainslie (9 May 2012)

STORM’S STATEMENT OF ADVICE (Part 5) 

*Conscionability*

We now need to ask, _“Did the people that constructed and implemented the Storm double-gearing financial model act in good conscience when so doing, or did they have some ulterior motive for so doing that, whilst beneficial to them, proved ultimately to be detrimental to Storm’s clients?” _

To arrive at a conclusion we need to look at the conduct of those in Storm and try and gauge their intentions and motivations for acting as they did.

1. Storm Financial – Overview

_“In 1994 Emmanuel and Julie Cassimatis established the "Storm" business in Townsville. The company was originally called Cassimatis Securities Pty Ltd but changed its name to Ozdaq Securities Pty Ltd in April 2000. In December 2003 a further change of name occurred, this time to Storm Financial Pty Ltd. 
As part of Storm's shareholders attempt to sell off part of their ownership to the public by way of an initial public offering (IPQ), in June 2007, Storm converted to a public company and changed its name to Storm Financial Limited. 
As early as 1994 clients were charged for Storm's services using, predominantly, the upfront fee-for*service model and this appears to have generated positive trading results from inception. Storm continued to rely on the upfront fee approach to generate the great majority of its income throughout its trading life. 
In 2000 Storm began its geographical expansion program by opening an office in Brisbane. A Sydney office was opened in 2005 and in 2006 Storm acquired Victorian Families in Geelong. 
During 2007 Storm sought to expand its client base by acquiring ten financial advising firms which were located in Cairns, Mackay, Rockhampton, Redcliffe, the Gold Coast, Brisbane and Sydney. 
Strategically these acquisitions were intended to provide an established client base of some 10,000 clients, which Storm could exploit with a view to converting those clients from the more traditional investment products to Storm's model of investment. No doubt it would be obvious that the conversion of clients from the traditional approach to Storm's model would involve those clients paying substantial fees to Storm. 
In the Prospectus registered by Storm in support of its IPQ this strategy was expressed in these words: 
‘Storm had approximately 13,000 clients across Australia with $4.5 billion of funds under management as at 30 June 2007. Of Storm's 13,000 clients, approximately 3,080 have chosen to invest in Storm branded indexed products. The remaining clients are clients of financial advice firms acquired by Storm (predominantly from ten firms acquired in March 2007) that have yet to convert to the Storm model. The clients of these acquired firms provide Storm with an extensive client base, which Storm is seeking to convert to the Storm model and which represents a significant growth opportunity for Storm". 
Bearing in mind the losses incurred by those clients that did convert to the Storm model, it seems fortunate that the great majority of those included in the "extensive client base" had not been persuaded to abandon their more traditional investment approach by the date on which Storm ceased business.” _Worrells Report

Maybe this answers a question I posed earlier as to why Storm did not convert all its clientele instead of just some? Perhaps Storm just didn’t have enough time to sufficiently '_Stormify_' many of the clients of the firms Storm acquired?

2. The Storm Financial model.

(a) Is it reasonable to suppose that Storm’s plan with its many inherent flaws was basically designed to deceive? After all, the people that designed it were experienced in financial matters and, one would assume, knew what they were doing. 

_"The prospectus issued by Storm described the executive directors in these terms: _
_Emmanuel Cassimatis is a Founder and Joint CEO of Storm (with Julie Cassimatis) with over 30 years of experience in the financial advice industry. Prior to Storm, Emmanuel formed one of MLC's strongest performing life insurance agencies in Australia for 14 years; he was awarded MLC's Garvan medal three times and inducted into its Hall of Fame. He received his Masters of Applied Finance from the University of Western Sydney in 1999". 
"Julie Cassimatis is a Founder and joint CEO of Storm with over 20 years experience in the financial advice industry. Julie previously led an MLC life insurance agency and was one of MLC's Top Ten Earners. She received her Masters of applied Finance from the University of Western Sydney in 1999 and is currently studying for a Masters in Commercial Law at Macquarie University". _- Worrells Report

(b) Is it reasonable to conclude that Storm's inability to fully control the managing of their clients’ portfolios by having an effective monitoring system with built-in safeguards in place was irresponsible and unacceptable behavior by Storm's directors?? 

“_Apart from holding and or getting the income from the "Storm" trademarks, Ignite also developed and retained ownership of a computer program called "Phormula", which was used by Storm in connection with its business. Although Ignite was tasked with the development of "Phormula" it seems that Ignite did not initially have the financial resources to pay the development costs. An analysis of the financial records 
of Storm shows that Storm progressively advanced the required funds to Ignite by way of an unsecured and interest free loan. As at 30 June 2007 Ignite owed Storm $3.44 million.”_ - Worrells Report

_“In addition to the agreements outlined above Ignite also charged Storm for the occasional use of an aircraft that Ignite had acquired under finance. Emmanuel Cassimatis was asked a series of questions regarding that aircraft during his public examination. An extract from the transcript is set out below: 

Liquidator's Barrister: Can I ask you this: why was the decision made to have Ignite acquire the jet?--- 
E Cassimatis: Because I wanted a jet, and we were able to acquire it. 
Liquidator's Barrister: All right. Now, why did you want a jet?--- 
E Cassimatis: It's - privilege. It's been a long-term goal of mine to acquire a jet.” _-Worrells Report 

It seems that it was more important that Manny have his jet than it was to develop a software system that would have saved thousands of Storm’s clients’ portfolios!

Why did the Directors of Storm not ensure that its software could cope with every eventuality and was capable of fully monitoring all borrowings such as house and margin loan borrowings? After all, the Directors of Storm already owned a software company, namely Ignite, that developed “Phormula" in the first place? We know that money was being poured into Ignite by Storm, so where did it all go, and why wasn’t this money used to develop a state-of-the art-system that could be used by Storm?

(c) Is it reasonable to assume that the Directors of Storm knew full well the corrosive asset nature of the financial model they were promoting? 'Ipso facto" they therefore knowingly deceived people into believing it was sound and attractive so that those people would sign up with Storm? 

_“Liquidator's Barrister: Now, the Storm Financial wealth creation model: it normally required double gearing, didn't it?--- 
E Cassimatis: Please explain "double gearing." 
Liquidator's Barrister: Well, the first would usually be that the client would borrow upon the security of real property, correct?--- 
E Cassimatis: Privilege. Correct. 
Liquidator's Barrister: And then the second step would be that the client, armed with the cash generated from borrowing upon the real property, could then go to a margin lender and say, "Margin lender, I would like to buy units in an indexed fund using this cash and the cash that you, the margin lender, will lend me, based upon the security of the units to be acquired, " and then the margin loan will be made on the security of those units?--- 
E Cassimatis: Privilege. Correct. 
Liquidator's Barrister: And you have heard the expression "double gearing" before, haven't you?--- 
E Cassimatis: Yes, I have. 
Liquidator's Barrister: And have I explained it, in your opinion, correctly?--*
E Cassimatis: Privilege. No. 
Liquidator's Barrister: All right. How would you explain it?--- 
E Cassimatis: The way I understand you to have explained it says to me that regardless of anything, two debts of 5000 is different to one debt of 10,000 on the same security, and accordingly, that's double gearing. Presumably, if you extend that, three debts is triple gearing, so I don't understand that to be double gearing. I know it's a popular expression, but that's not my understanding. 
Liquidator's Barrister: Is your - I see. Well, perhaps I could ask this, then: am I right in thinking you don't think it's double gearing unless you use the same security as a means of borrowing against twice, like a first and second mortgage on the same property, for example ?--- 
E Cassimatis: Privilege. No. In my view, double gearing is when someone borrows funds and then invests into an asset that, itself, is geared internally."_ 

PriceWaterhouseCoopers acted as an independent auditor for Storm since the year 2000. In an internal document, PWC described the personalities of the two owners of Storm, as _"Described by many as naÃ¯ve in terms of believing strongly in their model but may not have the broad judgement to run a large listed company or deal with capital market players.”_ Further, they were also _“Described as entrepreneurial in their philosophy. Sometmes do not listen to advice.”_

(To be continued)


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## Frank Ainslie (10 May 2012)

STORM’S STATEMENT OF ADVICE (Part 5) 
Continued (Posting 2)

*Conscionability* (Continued)

_“Described as entrepreneurial in their philosophy. Sometimes do not listen to advice.”_

I came across many that could be described like this when I worked in management. They tended to make wonderful salesmen but, for the most part, lousy administrators. Consequently, when they were promoted up the management chain and put in charge of other people, they ran a very loose ship. From what I have come to learn about Storm, (particularly E. Cassimatis) I suspect that the focus of Storm's owners was entirely on sales and customers’ needs were a secondary consideration. Was this just poor judgement though or was this a deliberate policy adopted by Storm’s directors because they were only concerned with making money?

Whatever, I find it hard to believe that a financial advisory firm this large that had been operating for many years could be this inept. I must therefore conclude that the flaws in Storm’s financial model would have been apparent to the Directors of Storm but they deliberately chose to ignore them because it suited their purpose. 

3. Purpose
The bottom-line in most businesses sometimes dictates the way a business is run and its primary objectives. Unfortunately, in many instances, this goal of making profit blinds a company to its obligations, duties, and responsibilities where its clients are concerned. Storm, to my mind, is a classic example of this. The Directors of Storm saw clients as a means to an end and tended to ignore their clients' needs in the process.

(a) Storm’s fees

_“Storm received Up Front Fees, of up to approximately 7%, of the sum invested by clients, for the advice given to client and also received an ongoing commission from Fund Managers. The amounts collected by Storm by way of such fees in 2007/8 and in the first half of 2008/9 have been set out earlier in this report. The schedule shown below is taken from an internal report submitted to Storm’s board of directors on the
27 November 2008.
The schedule shows that by the end of August 2008 Storm’s clients had invested an aggregate amount of$4.862 billion (at the share values then applying) into the various Share Funds sponsored by Storm. Of that amount $1.786 million (36.7%) appears to have been funded by way of margin lending.
The schedule also shows that by the end of October 2008 the value of the investments had dropped to $3.463 billion, a drop of approximately 28%. While some of the drop resulted from clients “cashing in” their investments almost certainly the greater part of the drop in value resulted from reductions in share values. Although the value of the investments dropped by approximately 28%, the amount of margin
lending dropped by only 14% .These figures suggest that the loan to value ratio of margin loans increased significantly over that period”. –_  Worrells Report

What Mr. X had to say about fees:
_“Commissions 
After our experience we are now firmly of the view that Financial advisors should be retained and not be paid any commission. This is the only way to ensure the elimination of a conflict of interests and that advice can remain impartial and in truly in the best interests of the client. 
We paid the fees as itemised 


Source of fee 		Amount $ 
Margin Loan 		$59,730.00 
Home Loan 		        $60,406.00 * 
Superannuation 	        $36,224.00*
TOTAL FEES 		$156,359.00

* $96,630.00 of the above is the 'upfront fee' to Storm. 

Our initial attitude to fees was that as the up front fees were for a lifetime of retained advice say for the next 20 years and as a one off, once and only fee was high but perhaps acceptable for advice "at call' (Our advisor had indicated to us that the fees were higher than average but this was a better than average company!)” This was not the case as every step involved a further fee. This was stated in our plan but we 
had interpreted 'Future Investments' (P56) differently. 
We also rationalised the fees as a tax deduction as we recall our advisor agreeing that these fees were tax deductable. And, despite the usual disclaimer, we also thought we had understood as much from our Plan: 
Page 80 of The Plan also states:" Sometimes, portions of fees you pay your advisor are also considered to be tax deductable against income earned in the year they are paid. This is the portion of fees considered to be for ongoing general advice in regard to your investment portfolio " This now appears to us to be just generic statement 'cut and pasted' from somewhere and we now see there was no effort taken or research done to provide accurate advice relevant to the Plan that had (supposedly?) been specifically tailored for us. Not much chop for fees of $96K! 
To date we have not been able to claim any STORM fees as tax deductions.” _

Let's look some more at what Storm stated in the SOA about its fees and what its clients got for such.

_Page 51, 52 and 53 of the SOA - Fees 
What Do You Get For Your Fees? ... 
The fee payable is a one off cost to you and it pays for the following: 
• Professional fees for the advice given [in the same way as you would pay an accountant, solicitor, engineer, surveyor or doctor for services rendered). 
• Ongoing professional advice including unrestricted future access to your advisor [in other words there is no additional costs to you for future visits be it for semi-annual reviews of your position, for additional investment advice or for ongoing financial education).
• Access to continuing financial education and Storm Financial research. 
Your current investment is not the end of the financial education process. It is only the beginning. Periodically we will host investor update evenings designed to deliver our latest economic and financial research in an educational format. 
• Regular monitoring and updating of your investments. 
• Access to superior and cheaper loans. Storm Financial is one of the largest originators of margin loans in Australia and a substantial originator of bank loans. Due to our expertise and size in the margin lending area we are able to negotiate directly with the largest margin lenders in Australia to provide better loan products than can be achieved either individually or with any other advisor. For example Storm Financial is Commonwealth Bank's single largest margin lending client (please note: we do not deal exclusively with the Commonwealth Bank but rather we recommend the margin loan which best suits your needs). As a result we receive a substantially better loan with higher buffers, larger LVR's, longer lead times to margin call and at vastly superior interest rates. For small loans we achieve for our clients a 0.65% per annum interest rate deduction and on larger loans this discount increases up to 1.85% per annum. Similarly, we are able to achieve discounted bank loans for our customers. Additionally, Storm Financial does not receive ongoing (trailing) commissions on loan products (such as margin loans), instead we pass on to you any such commission in the form of lower interest rates. 
• Lower per annum cost structure on' your investments. Again using our negotiating power we have been able to provide to our clients retail investment products with prospectus protection at wholesale prices. The normal fee associated with investing in a managed fund is in the order of 1 .5% to 2.5% per annum where as the index funds we recommended will have fees in the order of 0.79% to 1.55% per annum. 
• It pays for the purchase of the Brokerage on Investments we recommend and their growth, so you incur no costs in switching funds, or redeeming and reinvesting those same funds. The right to the Brokerage is a valuable asset as it is valid on the Investment and its growth for an unlimited number of transactions, and for an indefinite period of time (while you remain a client of Storm Financial Pty Ltd)”_

Sounds good but how true was it and did it hide the hidden benefits to Storm?

Here’s something that was stated in 2009 to a former client of Storm by a former employee of Storm who held a managerial position in that company: 

_“I was disturbed when I read comments attributed to you regarding fees and commissions paid to financial advisors. It has been worrying me ever since, hence this letter.
It gave me the impression that you believed that it wouldn't have helped Storm Financial clients had these proposed new laws been in place before the Storm collapse.
I would like you to know that it was precisely this issue of commissions which caused the demise of Storm Financial and thus their clients.
The Cassimatis's great con was that Storm charged low trailing commissions and large up-front fees.
The "commission rate" may have been a little lower than some other advisor charges, however they were proud to point out that Storm got people to invest more than twice as much as other advisors.. (by convincing people to mortgage their homes, plunder their superannuation etc, and put all that into the 'market' and then leveraging with Margin loans). In effect Storm was making much more than twice what other advisor groups were receiving much more from commissions, even with the supposedly lower rates.
Storm's attempt to float the company was the source of their biggest sales push. The idea was to get clients to borrow more and margin up (thus increasing LVR's) to increase their commissions so that this increase in income would show that business strategies were so sound and profitable.
I believe the directors’ obsession of becoming billionaires so increased their greed that they took unnecessary risks with their clients security._

(To be continued.)


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## Frank Ainslie (10 May 2012)

STORM’S STATEMENT OF ADVICE (Part 5) 
Continued (Posting 3)

*Conscionability *

(Continuation of statement in 2009 to a former client of Storm by a former employee of Storm who held a managerial position in that company): 

_“The next driver for business was commission based incentives for advisors and staff to enjoy Storm Holidays.
With the Global Financial Crisis marching on, the prudent thing would have been to manage their clients LVR's and convert to cash or other securities to protect them.
Storm's commission income was already being reduced by the falling value of their clients investments. The directors did not want this income to reduce further, and so kept clients in the market with dangerously high LVRs.
The further fall in the market caused hundreds of their most valuable clients to lose their entire investments. I need not mention the heartache, suffering and despair this has caused their clients.
Had the proposed laws been in place regarding trailing commissions, the Storm model would never have been so viable, and Storm would have had to change it's business models to knowing and looking after their clients.
There were Storm advisors, who's personal lifestyles depended on their ongoing commission cheques. This drove them to adhere strongly to Storm policy and recommend increases in borrowings and investments, even during the final days.
I can't imagine what it would have been like as an advisor to have to tell their clients that they had lost their entire investment portfolios and in many cases, their homes.
Storm should have been pro-active in ensuring client investments were safe and protected from 1 in 15 year market fluctuations. Storm's greed for commisions overode the practice of giving the best advice for their clients.
I sincerely believe that the practice of commission based advice is seriously flawed for the consumer. The Financial Planning industry can still ensure a regular income from their clients by charging for service. Example: by providing up to date on-line information and recommendation in the form of platform fees etc.
Storm's fatal policies loaded their clients with excessive debt and CBA etc just pulled the trigger. This entire mess will be costly for CBA etc, but let us not lose sight of who's greed put us in this position in the first place.”_

Now, one must bear in mind that these comments came from a person (he was not a former financial adviser by the way) that actually worked in the Storm management hierarchy and would therefore have seen first-hand what went on. We must therefore  give some credence to his remarks which supports the evidence at hand.

This drive for profit by Storm is apparent when you examine the financials of Storm:

“_The following table sets out net profit after tax (NPAT) earned by Storm during the years ended June 2004 through to June 2007 using the international accounting standards. It also shows the position using the more traditional accounting method. The profit calculated using the traditional approach is shown as "Adjusted Earnings" 
_
_A$ million                                         FY 2004   FY 2005   FY 2006   FY 2007   

NPAT                                              3.6         7.6            18.3          28.6   
Remove impact of                   
Future Value of Trail Commissions        (4.1 )      (7.3)          (17.0)       (33.4)   
Changes   in   2007   estimate   
of   value   of   Trail                                                                        13.4   
Commissions                     
Tax Effect Adjustment                       1.2          2.2             5.1            6.0   
Adjusted Earnings                             0.7          2.5             6.4          14.6
__To the non accountant the earnings and adjustments in the above table may be more confusing than enlightening. However the essential point to be grasped is that it was not until the year ended 30 June 2006 (at the earliest), that is only 30 months before its collapse, that Storm earned more than what might be regarded as relativity modest after tax profit. Almost certainly the growth in recorded profits was directly related to the boom in the Australian share market, which boom in turn encouraged more clients to invest using the Storm investment model. 
The following schedule compares the results of trading for the Storm Group for the six months ended 31 December 2008 with the audited results for the twelve months ended 30 June 2008, and provides an insight into the changing income and expense between the two periods. _

_6 months        12 months   
to 31 Dec 08   to 30 Jun 08   
$'000               $'000   

Income       
Upfront Fees     $7,320      $53,863   
Trailing commissions   $4,939   	        $14,066   
Investment profit / (Loss)  $-7,187   	        $7,083   
Other   		 $427   		$2,009   
Totals            $5,499   	        $77,021   
[Expenses in total (profit before tax) -$12,603	        $37,502
_ 
_Perhaps the most striking feature of the results for the two periods can be found in a comparison of the Upfront Fees paid to Storm by clients investing fresh funds in the share market. For the year ended 30 June 2008 Storm earned $53.863 million in Upfront Fees (an average of almost $4.5 million per month). In the six months ended 31 December 2008 these Upfront Fees dropped to $7.320 million in total, which is equal to a seventy-three percent (73%) drop calculated on an annual basis. _

_The trend of decreasing Up Front Fees is clearly shown in the following schedule of monthly Upfront Fees and Trailing Commission for the six months ended 31 December 2008: _

_
Upfront Fees   Trailing Commissions   
 						 $'000   		$'000   
July   					$1,516   		$1,052   
August   					$2,026   		$1,149   
September   				$1,535   		$1,149   
October   					$1,173   		$1,010   
November   				$739   		$460   
December   				$331   		$174
__The four non executive directors of Storm received directors fees at the rate of $80,000 (plus superannuation) each per annum. Mr And Mrs Cassimatis did not receive director's fees from Storm but were each paid a salary of $500,000 p.a. plus superannuation. 

During the last six months of trading the board of directors reduced operating cost in an effort to offset the fall in income levels which were occurring. For example, the employment of twenty-eight staff members An internal report (dated November 2008) obtained by the administrators states that Emmanuel and Julie Cassimatis agreed to reduce their annual salaries by half (50%), however the administrators were advised, during their investigations, that the reduction did not in fact occur.”_ Worells Report

The rise in Storm’s fortunes was, of course, due to the the gains that were being made on the Australian share markets from 1995 to its collapse in the latter half of 2008 when Storm crashed and burned.  During that period of almost unbroken growth the index rose from 1800 at the beginning of 1995 to a high of about 6800 during 2007.

I believe that around 2006 the Directors of Storm began to realize the leveraging power they had with the banks because of the dollar value they controlled in the portfolios they were managing. Consequently, they struck fresh deals with the Macquarie bank and the CBA that bolstered Storm’s revenue significantly. These deals in the form of agreements will be discussed by me when I eventually complete an exercise on the Banks that were involved with Storm. The deal that Storm had with the CBA is now well documented but I have never seen the details of the one Storm had with Macquarie. However, I have no doubt that it would be on similar lines.

These deals whilst beneficial to Storm, cut across the obligations Storm had to its clients and, I feel, contributed greatly to those clients’ losses because they blurred lines of responsibility, led to confusion within Storm and the Banks involved, and resulted in procrastination when immediate action to retrieve clients’ positions was demanded.

The Banks and Storm have claimed that the GFC was a ‘Black Swan’ event that could not have been foreseen by anyone. 

The fact of the matter is that the market was showing worrying signs on and off through 2008. Further, it didn't just collapse overnight so there was still time to act. Storm was still taking its clients' money as late as September and probably beyond knowing full well that the financial climate was volatile and sinking fast. They also knew full well that many of their clients’ portfolios were leveraged to the hilt. Yet, they still advised people to invest more whilst reassuring everyone that _"all was well and there was nothing to worry about!"_ They basically sat on their hands and did nothing until the situation was well beyond the point of no return. 

Why did they act in this way? I think the answer is obvious! They knew that a good many of their clients were up to their eye-balls in debt and  realized that if there were a mass sell-down, Storm would lose a substantial part of its business, and one that generated the most profit. Therefore, the Directors felt that they had no choice but to gamble that the share market would come good. They were aided in this by the Banks, particular by the CBA and Macquarie Banks who had recognized a good thing in the way Storm did business and didn't want to lose the benefits of such that came their way.

Naturally, until all this comes out in Court, we can only guess! However, the unacceptable delay that occurred before anything was done has no other logical explanation. At least none that I can find!


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## bunyip (10 May 2012)

Frank Ainslie said:


> The bottom-line in most businesses sometimes dictates the way a business is run and its primary objectives. Unfortunately, in many instances, this goal of making profit blinds a company to its obligations, duties, and responsibilities where its clients are concerned. Storm, to my mind, is a classic example of this. The Directors of Storm saw clients as a means to an end and tended to ignore their clients' needs in the process.




Yet despite your management experience showing you that companies sometimes put profits before customer service, you never once suspected that Storm was just another company doing exactly that. 
Think about it Frank......here was a company that was encouraging its clients who were mostly at or near retirement age to mortgage their homes to launch an aggressive borrowing campaign to invest heavily in the most volatile and risky of markets, double gear on top of that, keep adding more borrowed money to the investment through the use of ‘steps’, skimmed 7% off the top of every dollar invested, and didn’t offer the usual range of financial planning services despite calling themselves financial planners. 
And yet you trusted them implicitly, pretty much believing everything they told you, not bothering to conduct the simplest and most elementary of research to check the veracity of Storm’s claims.

I’m not trying to grind my boot into your face, but I hope now you’re starting to see that a big part of the reason you got done over is simply that you just didn’t put enough effort into thinking things through before signing on with Storm.


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## Frank Ainslie (10 May 2012)

bunyip said:


> Yet despite your management experience showing you that companies sometimes put profits before customer service, you never once suspected that Storm was just another company doing exactly that.
> Think about it Frank......here was a company that was encouraging its clients who were mostly at or near retirement age to mortgage their homes to launch an aggressive borrowing campaign to invest heavily in the most volatile and risky of markets, double gear on top of that, keep adding more borrowed money to the investment through the use of ‘steps’, skimmed 7% off the top of every dollar invested, and didn’t offer the usual range of financial planning services despite calling themselves financial planners.
> And yet you trusted them implicitly, pretty much believing everything they told you, not bothering to conduct the simplest and most elementary of research to check the veracity of Storm’s claims.
> 
> I’m not trying to grind my boot into your face, but I hope now you’re starting to see that a big part of the reason you got done over is simply that you just didn’t put enough effort into thinking things through before signing on with Storm.




By tomorrow, I will be finished with this exercise and will then be posting a piece entitled "Mindset" which will deal with all the questions you and others have raised. I can't say now that they will satisfy you entirely but they will be honest answers.

Get the boot polish out because I bleed easily!


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## Frank Ainslie (10 May 2012)

STORM’S STATEMENT OF ADVICE (Part 5) 
Continued (Posting 4)

*The law as it applies to financial advisers.*

I have outlined the many offences that the Directors of Storm have committed when dealing with Storm’s clients. The Cassimatises have been charged by ASIC with breaches of the Corporations Act and their lawyers will, I believe, be hard pressed to present a reasonable defence. This may be a good opportunity to outline what sections of the Act apply to financial advisers in general, and what Sections  of the Act might apply where the Directors of Storm are concerned.

_“RELEVANT LAW FOR INVESTMENT ADVISORS 

Financial advisors in Australia do not operate in a regulatory vacuum. Rather the licensing, the disclosure requirements, the basis on which advice may be given, the requirement to give a Statement of Advice and identification of offences are all codified in some detail in Chapter 7 of the Corporations Act, which part is headed "Financial Services and Markets". 

Given Storm's business was that of financial advice, the liquidators feel it prudent to outline for the benefit of creditors what they consider to be relevant law. 

Section 760A of the Corporations Act defines the object of Chapter 7 as follows: 

The main object of this Chapter is to promote: 

(a) confident and informed decision making by consumers of financial products and services while facilitating efficiency, flexibility and innovation in the provision of those products and services; and 

(b) fairness, honesty and professionalism by those who provide financial services; and 

(c) fair, orderly and transparent markets for financial products; and 

(d) the reduction of systemic risk and the provision of fair and effective services by clearing and settlement facilities. 

The Australian Securities & Investment Commission (ASIC) has the responsibility of policing, investigating and, where appropriate, prosecuting apparent breaches of Chapter 7. Liquidators have a responsibility, pursuant to section 533 of the Corporations Act, to provide the ASIC with a detailed report in circumstances where it appears to them that a relevant person may be guilty of an offence, or may be guilty of breach of duty or of negligence in relation to the company. 

In any review of the activities of Storm it is useful to have an understanding of the regulatory framework under which the company operated. For that reason we set out below summaries of the most relevant sections of Chapter 7. 

Reproductions of the relevant legislation are included in this report as an annexure, for the information of creditors. This should not be taken to imply that the liquidators believe that any person is guilty of breaching the sections referred to. 

In Summary: 

Section 945A 

Adherence by financial advisors to the requirements of section 945A is fundamental to the proper conduct of a financial advising business. The section requires that a financial advisor, when giving advice, must: 

a. By reasonable inquiries determine, and consider, the clients personal circumstance 

b. In the light of those inquiries and that consideration give advice which is appropriate to the client 

Section 9458 

This section states that if the advice given by a financial advisor is incomplete or inaccurate the client must be warned of that fact. 

Sections 9520, 952E,952F, 952G 

The normal procedure for financial advisors is to provide their clients with a written Statement of Advice. Storm followed that procedure. The term "disclosure document or statement" is defined by section 952B of the Corporation Act to include a Statement of Advice. 

Section 9520 makes it an offence to give a disclosure document or statement knowing it to be defective. Section 952E makes it an offence to give a defective disclosure statement recklessly 

Section 952F makes it an offence for a financial service licencee to knowingly provide a defective disclosure document or statement Section 952G makes it an offence for a financial services licensee to provide an authorised representative with a defective disclosure statement 

The provisions of sections 9520 and 952E apply to a financial services licencee and to the authorised representatives of a licencee. 

Section 1 041 E 

Section 1041 E makes it an offence for a person (which includes a company) to make a statement or disseminate information if it is false in a material particular. It is only an offense if the statement was likely to induce a person to apply for, or dispose of a financial product, and the person making the statement did not care if the information was true or false, or the person knew or ought to have known the information was false in a material particular.”_ Worrells Report

Reading through these sections, it seems to me to be fairly obvious that the Directors of Storm have breached some if not all these Sections in some shape or form.

These are civil offences but ASIC can refer any matters to the DPP if any criminal activity is detected. Fraud, for instance, is a criminal offence.


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## Julia (10 May 2012)

Frank Ainslie said:


> Reading through these sections, it seems to me to be fairly obvious that the Directors of Storm have breached some if not all these Sections in some shape or form.
> 
> These are civil offences but ASIC can refer any matters to the DPP if any criminal activity is detected. Fraud, for instance, is a criminal offence.




I haven't read thoroughly all the above post so apologise if you've already offered an answer:   What - amongst all your dealings with Storm - do you feel can be categorised as fraud?

Again, I'm not aware of all the detail, but I'd have thought entering fictitious client details on loan applications would qualify.



> Our initial attitude to fees was that as the up front fees were for a lifetime of retained advice say for the next 20 years and as a one off, once and only fee was high but perhaps acceptable for advice "at call' (Our advisor had indicated to us that the fees were higher than average but this was a better than average company!)” This was not the case as every step involved a further fee. This was stated in our plan but we
> had interpreted 'Future Investments' (P56) differently.



This is an area which suggests to me that Storm clients were unreasonably trusting.
To assume that any firm would provide 100% satisfactory service in any industry for the forthcoming 20 years, seems naive to me.

Again, this is an observation, not necessarily a criticism, and an indication that the Storm personnel were exceptionally good salespeople.

Thank you for posting the extracts from the SOA and the comments of Mr X in addition to your own remarks, Frank.  It is all enlightening, if bitterly sad for those affected.


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## Frank Ainslie (10 May 2012)

STORM’S STATEMENT OF ADVICE (Part 5) 
Continued (Posting 5)

In my next posting entitled *“Mindset”* I will answer the questions posed to me in your postings since I began this exercise. 

I’ll end this commentary with the following:

_*“REASONS FOR FAILURE AND LOSSES* 

The reason for the failure of Storm as a company is easily ascertained and can be simply stated. 

Storm's business was one where the majority of income was earned as clients invested fresh funds in the Australian share market through indexed funds, using Storm's geared up investment model. It seems reasonable to assume that clients could only be expected to make such investment decisions when they could be persuaded that the market was free of high levels of volatility and would rise within a relatively short period. Evidently Storm's greatest period of expansion coincided with a period of almost continual growth in the value of the Australian share market. 

During 2008 values in share markets worldwide including Australia, plummeted. As a consequence retail investors were reluctant to invest fresh funds in the market. This in turn had an almost immediate effect on the "upfront fee" income of Storm, which progressively fell from an average of $4.5 million a month during 2007/08 to $331,000 in December 2008. This was a drop of approximately 93%. 

The effect of a possible sustained share market downturn on Storm's business was something which the directors of Storm had foreseen, as shown in the following extract from the minutes of a Storm Board of Directors meeting held in October 2007: 

‘We can then perceive that a sustained share market downturn will affect Storm's business. However, Storm's client strategy is appropriate to apply during counter-cyclical periods. Whilst the frequency of a sustained share market downturn is very limited, Storm employees are following methods to reduce risk during those times that will inevitably come, despite the infrequency. Storm retains a minimum of 6 to 12 months' operating expenses in the company reserve accounts to ensure, should income reduce, the operating teams do not require reductions in labour force or other resources. Storm's operational teams are very efficient with their time and ensure there are consistently projects within the wish list to enable a refocus on building new 
systems during business downturns. 
That is, Storm can quickly go from being in full-on building mode during high activity periods to laying the foundation work in quieter times. Our LVR bands are consistently reducing in good times to ensure in sustained difficult times that clients can appropriately continue to build their investments in those sustained downturns. The balance between these things is carefully monitored by management and has proven over the history of the firm to be a way to maintain a safe and sustainable business during these infrequent times.' 

The management accounts of Storm show that in the six months to December 2008 the Storm Group lost $12.6 million through trading and expended a further $3.4 million by way of preferred dividends. The preferred dividends represent income share due to the vendors of businesses acquired by Storm and are thus effectively a cost of the business and bring the trading loss to $16 million. Additionally Storm elected to make unsecured advances to clients totaling approximately $2 million, which advances were subsequently lost. These losses, combined with a loss of support from the Storm Group's bankers and inadequate working capital, and in the absence of an expectation of an almost immediate return to profitable trading, mandated the appointment of external administrators. 

The failure of Storm was thus a direct result of the overwhelming reduction in upfront fees which was suffered as a consequence of the drop on the value of the share market. Although Storm had foreseen the possibility of such a down turn and had created reserves for just that purpose, it seems that the reserves were, in the circumstances, insufficient. 

The losses which clients of Storm incurred were the result of a combination of factors. Although the liquidators are able to identify some of the major factors which contributed to the losses incurred by clients, it is not their role to apportion blame or to prosecute any possible offences. Apportioning blame is the function of a court or other properly constructed tribunal, and the prosecution of any offences which 
may have occurred is the responsibility of the ASIC. 

Almost any investor with an ongoing position in the Australian share market during 2008 stood to lose substantial value as the market dropped during that year. Thus, all investors who failed to liquidate their investments at an early date were assured of incurring losses. Given that the market dropped almost continually during the second half of 2008 it is obvious that any delay in liquidating investments would add 
to the loss accruing. 

Clients of Storm who had invested using Storm's leveraged investment model and who had insufficient cash resources to meet margin calls, were potentially more exposed than those investors who were not subject to leverage. But that potential would only be realised if prompt action to realise share investments or pay the expected margin calls was not taken. 

The evidence presented at the public examination suggests that both Storm and CGI were aware that client's positions were deteriorating and each sought to take what they individually regarded as appropriate action. 

It seems from the evidence provided at the public examination that CGI's view was that CGI was not contractually required to send margin call notices directly to clients. Rather CGI's approach was to provide Storm with a series of prompts and spread sheets detailing the position of clients. This was done, it appears, on the basis that Storm as the authorised agent of the client was best placed to advise the client on what action should be taken to regularise the position. CGI may have been fortified in that belief as a result of the involvement which Storm appears to have actually had in assisting many clients to manage their exposure to CGI, and the representations which Storm made on behalf of all clients. It was not until late November 2008 that CGI decided to contact clients directly. 

Again, from the evidence presented, it appears that Storm's position was that it expected CGI would send formal margin call notices directly to clients, noting that this had happened in previous years. Storm did not believe, the evidence suggests, that the ongoing series of spread sheets received by Storm amounted to a formal margin call notice for any client or group of clients. Further, the evidence given by Storm's executives was that in their view it was never Storm's role to closely monitor and or manage client's position. Despite holding those views the evidence appears to be that Storm nevertheless attempted to assist clients both on an individual basis and on an all client basis. The evidence given by the Storm executives was that Storm was, to a degree, frustrated in its attempts to assist as the data provided by CGI was said to be unreliable during critical periods. 

It seems at least possible that both Storm and CGI had never contemplated clients' positions deteriorating in the numbers and to the degree which actually occurred. If this was so it would be understandable that both Storm and CGI would be unprepared to deal with that occurrence. 

It appears that a significant number of Storm's clients may not have been fully appraised, in a timely way, of the ongoing deterioration in the value of their investments, and as a result did not have the opportunity to initiate appropriate action leading to reduced losses. As mentioned above it is for the courts to assess if any blame attaches to any party for the way in which they conducted themselves during this critical time.”_ Worrells Report


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## bunyip (10 May 2012)

Frank Ainslie said:


> By tomorrow, I will be finished with this exercise and will then be posting a piece entitled "Mindset" which will deal with all the questions you and others have raised. I can't say now that they will satisfy you entirely but they will be honest answers.
> 
> Get the boot polish out because I bleed easily!





Fair enough Frank, I'll look forward to it.
And I echo Julia's comments in saying thanks for posting all this - it provides some interesting insights into your thinking and your decisions and actions in relation to Storm.


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## Solly (10 May 2012)

When matters are next in Court

Proceedings are being held in public so anyone interested may attend.


*15 May 2012* 
ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

*24 May 2012*
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


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## Frank Ainslie (11 May 2012)

*Mindset* Part 1

To best write about any disaster (and I think we can classify the collapse of Storm as a major disaster for many of the people that were its clients) and fully understand how people affected by such a disaster truly feel, people need to have experienced it themselves or something similar. Being one of those caught up in this I alone know how I truly felt at the time, my motivation for originally investing using the services of Storm, and my reasons for believing that we were doing the right thing in do doing. I (and I am certain many other ‘Stormies like me) don’t really want to listen to others telling us how it was when they weren’t involved themselves. 

Certainly, people are entitled to their opinions but those opinions must be based on what actually happened as opposed to what they think occurred. Only by having the facts before them can they formulate views that I believe are worth considering.

To date this forum has discussed various issues relating to Storm and the Banks aligned to that company piece meal. I have therefore conducted this exercise so people can better recognize the full duplicity of Storm, and fully understand that our ‘beef’ with that firm and the Banks is not about bad advice, but rather about inappropriate and unlawful conduct that ultimately led to our losses. 

Those that have actually read through IN FULL what I have written should now be mindful of what actually occurred and have some sense of the wrongdoings the directors of Storm, through their policies and misconduct, inflicted on the clients of Storm. Of course, ALL the facts will not come out until these matters are discussed in Court and there may be some vital ingredients I have missed. However, what we do know so far based on the evidence at hand should be sufficient for members of this forum to form some objective opinions. Not suppositions or assumptions based on personal opinions which can be self-serving, but rather on the events that actually took place.

There are some questions that have been posed to me along the way and I will attempt in my following comments to answer these in a general sense rather than deal with them individually. I’m sure that if I miss any particular point, I will be quickly reminded of this!

I think we can start by take *“greed”* as our prime reason for signing up with Storm out of the equation because it should be apparent by now that people signed up with Storm because they genuinely thought that Storm’s approach to their needs was in line with their primary desire to grow their assets over time and secure them    financially. The fact that 75% of those clients were past retirement age and had worked hard all their lives to compile their asset bases just doesn’t support the notion that they had a gambling problem and knowingly became involved in a _“high-risk”_ scheme that could put their assets in jeopardy. Storm’s SOA if nothing else supports  this view.

_“So why were people sucked in by Storm and why didn’t they do their homework?” _some on this forum have asked of me. Why indeed! That’s something we ‘Stormies’ will be asking ourselves for the rest of our lives.

There have been many suggestions as to what ‘Stormies’ might have done before committing themselves to Storm. Some have said that any would-be investors should always acquaint themselves with the market place and learn something about investing first. Others have suggested trawling the Internet to see what options there are out there, and so on and so on! 

There’s some truth in all of this because they are aimed at forearming investors against making the kind of mistakes that we made. However, not everyone has the interest, time, inclination or capacity to do this. Further, how many people past retirement age can use a computer to start with? I do not believe therefore that any of these suggestions (that seem reasonable to those on this forum that have taken the time to acquire investing knowledge and see these as solutions) are practical in the real world because would be investors come from all walks of life and have varied backgrounds. So what is the answer then?

Professional financial advisers have been much maligned on this forum and I am one of the culprits. However, much of my wrath has stemmed from my experiences of using Storm and anger, I know, can sometimes blur rational thinking. It is completely illogical to bracket all financial advisers together and assume that they are all from the same mould. It is therefore quite wrong to condemn all financial advisers because of what happened to us in Storm. Professionals are a necessary part of our society and they perform an invaluable function. We need professionals in various fields because we neither have the time or capacity in many cases to sit down and acquire knowledge about every facet of our lives because it is just not feasible.  

Okay! Then how does one know whether what a financial adviser is telling you is in your best interests? You don’t which is why, I now firmly believe, we ‘Stormies’ should have sought a second and indeed a third opinion from other financial advisers as to the merit of Storm’s financial model and, for those that had an accountant, run it past him or her as well. Yes, it would have cost us more money and financial advice does not come cheap but with the amount of money we were investing, it would have made little difference to us. After all, if one can’t afford the small amount of money it would have cost, one shouldn’t be in investing anyway. 

Often, when you consult with more than one professional you pick up some useful advice anyway in your search for the best solution to your particular needs, whatever they may be. This is commonsense after all! As it was, our failure to apply some commonsense and test Storm’s plan independently cost us all that we had in the end.

Even when dealing with tradesmen, you don’t accept the first quote submitted but obtain two or more others as well. We all know this! The fact that we ’Stormies’ never went down this path was a major failing on our part and one that is inexcusable

So my first first advice to any would-be investors out there is not to take anyone’s word for it but rather to get a second or third opinion. Someone said on this forum some time ago, _“If something sounds too good to be true, it normally is!”_ It’s a well known maxim and one we should have been mindful of before we signed up with Storm.  

Some people on this forum have said that Storm’s plan was an obvious con and we ‘Stormies’ should have seen through it. I don’t go along with this. I think it was ‘Doobsy’ that said Storm’s plan was legitimate and fell within the boundaries of financial advice that is permitted. Therefore, it was our choice to use the services of Storm. We were not to know then, of course, that when Storm was giving us such advice they were infringing on certain sections of the Corporations ACT and are now being duly charged for doing so. Certainly, if we had sought alternative advice, the ‘high-risk” nature of the scheme and its forecasts would have been exposed as being unrealistic; something that was not self evident to us then.

Bunnyip has said,_ “However, there’s one thing you could have known that would have shown the Storm strategy to be a high risk con scheme that completely misrepresented the facts in regard to the safety measures that were supposedly going to protect your capital from major loss.
The ‘thing’ I refer to that you could have known about was past market crashes. In particular, I refer to the 1987 crash that wiped 20% off the market overnight, 25% in one day, and 50% in a little over a month.If you’d looked at the ‘87 crash and asked yourself ‘ OK, what effect would a similar crash have on my proposed portfolio’?...you would have discovered that the result of such a crash would be catastrophic loss of your capital before the market reached the trigger points that supposedly would safeguard the bulk of your capital.
If you’d done that, and discovered the enormity of the ‘87 crash and many others before it, and then considered the very real possibility of such crashes repeating, I believe you would have made the prudent decision to walk away from Storm without even bothering to look into their SOA.”_

I’m not clear on your line of thinking here? Are you suggesting that people shouldn’t invest in the share markets because all share markets have a past history of crashing? If that’s the case, the economy would fall flat on its face tomorrow because people would simply stop investing.

The trigger-points that Storm put in place (but didn’t act on) were designed for major falls in the share markets.  Clearly, when the markets fell, the activation of these trigger-points would have protected us from just this type of situation. Any share values we would have lost to that point were acceptable because these trigger-points were set at conservative levels. Or at least, we thought they were! First and foremost, the trigger-points were incorporated into Storm’s plan to protect us from just the sort of losses you mention. The fact that they were not acted on led to our final demise.

Julie has said that, “_We've ad infinitum made the point that a few simple calculations would have allowed you to see that you could have just stuck the funds in the bank and still achieved your desired level of income, so no need to labour this again, especially as you now are obviously very aware of this.”_

There was nothing simple about Storm”s financial model so I believe _“a few simple calculations”_ is understating the complexity of it. Certainly, we wished now that we had stuck our money in the bank but it’s no good dwelling on what might have been.

(To be continued.)


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## Frank Ainslie (11 May 2012)

*Mindset* - Part 2

Some have said that borrowing against the house was a complete no-brainer. I’ll admit now that this was an unwise thing to do, but it is not a concept that is completely unheard of in financial circles. This type of advice was not only being handed out by Storm but by other financial advisers as well and was condoned by ASIC and the Banks. When Helen borrowed money to buy her shop, she mortgaged the house to do so which is a legitimate way of obtaining funds needed for a business venture. Today, people are amazed that we did this but they need to remember that this approach was neither illegal or restricted to Storm.

I am not recommending such a practice to anyone because it can prove lethal as we found out! Merely commenting on the legitimacy of such. 

It’s easy now to say that Storm’s strategy was a con because their activities have been exposed to public scrutiny these last three years. There was no way of knowing then that Storm was being deceptive or misleading in its conduct or that they would not abide by their contractual obligations; namely to monitor and keep a tight rein on our portfolios and ensure that the safe-guards that they assured us were in place were triggered when the circumstances demanded it. People also need reminding that Storm had a data-base of thousands of clients, an impressive infra-structure that had been built over a number of years, a past history of success reflected in the fact that most of their business came from referrals and were handling hundreds of millions of dollars in client portfolios. They were not some shonky mob bailed up in a backroom in Shonksville with a shingle stating, “Financial Advice for Those that Want to Lose Their Lifesavings!” I think we therefore need to get real about this if we are ever to get to grips with the real story!

There is no question that what Storm offered and the way the directors of Storm went about their business was very slick. Here’s what Anne Lampse said about this in part of her article “Storm Lessons” published in the “Money” magazine in March of 2010. 

_“Storm Financial client Liz Watts acknowledges that her investment experience with Storm was a clever seduction. From the moment she and her Barrie walked into the glitzy top floor of Storm's North Sydney offices, with its 360-degree view of Sydney's skyline, and experienced the warm hospitality of Storm's friendly and attractive staff, Liz was hooked: ‘The overwhelming message was that this is the style in which we live and we can do the same for you.’
There is no doubt that Storm Financial's Emmanuel and Julie Cassimatis were masterful in their duchessing of clients, imparting comfortable and relaxed’ feelings and membership of a clever, wealth-generating group. ‘We knew we were being duchessed but the people were so genuinely nice,’ Liz recalls. ‘And they all said they were Storm investors too.’
Attending a couple of swish Storm cocktail parties where everyone appeared happy, content and shared their stories of investment success reinforced this view.
Liz was shown charts and statistics about sharemarket behaviour, figures on sharemarket recoveries from previous downturns, and verbally assured of the relentless rise in the real estate market and the continuing wealth of a fast-growing China.
All of this reinforced the investment strategy put in front of her. Her daughter, who also was with Storm, had originally asked to invest only part of her total assets in the scheme. She was told: "The Storm model is not for you then." The push-off worked, and both threw everything into the Storm investment model. Liz said there was never any pressure to invest or to force them to join the scheme. It just sounded almost too good to be true.
Previously a cautious investor who directed her savings into super and bank deposits, Liz and her husband ploughed all their savings into Storm, and borrowed more from the Bank of Queensland, using some home equity to build a bigger investment portfolio.
Soon they had a margin loan as well as a mortgage on a previously unencumbered home. This was all part of the Storm investment template.
Her aim was to have enough for a comfortable and independent retirement and for the first two years of the investment she couldn't have been happier with the result. Returns exceeded 30% a year; the share portfolio was growing with top-ups. They had holidays abroad.
It came to an end at the end of 2008 after the global financial crisis (GFC) tore through the sharemarket, wiping more than 50% of its value over a few months. Now their retirement savings are gone and the couple is left with a mortgage on their home, living on the pension and the odd bit of casual work…
With the wisdom of hindsight, Liz is stunned that she risked her house.
"But it was so slick, so slick. It just seemed to be that they were so into it; that they were such believers themselves."_

Julie has said, “_Why? Were people so impressed by Storm's gold plated bathrooms and the high flying lifestyle exhibited by those who were invested in the bull market, that they were intimidated out of trusting their own judgment?”_

I must confess that I too was impressed by the Storm toilets in Storm’s Brisbane Office. But, then that was part of Storm’s sell. If I had walked into such and someone had handed me a pot beforehand to use, I don’t think I would have been too willing to listen to anything Storm told me. If you want to convey success to anyone, you need to be seen to be successful and this is conveyed by the wealth you exhude.

There was no question that an awful lot of brainwashing took place where Storm’s clients were concerned. Indeed, today there are still some that believe the Casimatises were not to blame for what happened to us despite what has now been revealed. 

There are some on this forum that will never accept our explanation for signing up with Storm. They are not alone. When people pick up a newspaper and read about an event such as this, they are apt to remark, _“How could people be taken in like this? Stupid buggers! They only have themselves to blame!”_ We ‘Stormies sometimes endure the same comments from friends or people we meet that learn of our involvement with Storm. I do not condemn them for their views because like many on this forum they are unaware (until now, that is) of all the facts. 

Certainly, such epithets as ‘_foolish’_, ‘_unwise’_, _‘imprudent_’, _'too trusting_', or just_ ‘plain stupid’_ can be ascribed to our behaviour because we made some fundamental mistakes. I can live with this! One of these mistakes was our failure to ensure that we understood every aspect of Storm’s plan. Our failure to do that and our failure to get alternative opinions as suggested earlier are things we must now live with and we do. 

At the end of the day though the people that lost everything in Storm were not mindless automatons that marched like lemmings until they ran out of land and plunged into the sea. They were people that grew up in a time when trust and integrity meant something. A time when one could leave your door open and no one would steal everything you had. Today, we live in a _"dog-eat-dog"_ world where all the old values have disappeared. People can no longer be trusted and ‘Stormies shortcomings were that they did not insulate themselves accordingly.

There are many ‘Stormies’ that now blame themselves for what happened to them. There is a difference, however, between making an honest mistake in good faith and laying the blame on yourself. The words _‘Mistake’_ and _‘Blame’ _have two completely different meanings The word _‘blame’_ means _"to hold responsible" _whereas the word _‘mistake’ _means _'to make an error in action, calculation, opinion, or judgment caused by poor reasoning, carelessness, insufficient knowledge, etc."_ Certainly we showed poor judgement when we employed the services of Storm, and this was a mistake on our part. We  must therefore be honest enough to say so. We stuffed up big time and we are the ones that are now paying the ultimate price for doing so! However, we all also need to understand that to err is human! If I look back on my life, I have made many mistakes in both my private and business life because I’m fallible like everyone else. I am not the Pope as some suspect although I may come across like him. 

The four thousand or so Storm clients that marched into Hell and found no heavenly cause when they arrived there were ordinary Australians from a cross section of our society. They could have easily been family members, friends or acquaintances and some well may have been.  

Sometimes, we get lucky in life and our mistakes do not result iin our being hurt or do harm to others. Julia, I believe, had one such moment recently where luck played a part in her avoiding making a bad decision. We ‘Stormies’ should by now be well aware of our mistakes when it comes to Storm. We know many who are aware also, our families for instance -– it’s in our face every day. However, when we joined Storm, our intentions were pure and we never set out to harm anyone. The activities of Storm and the Banks in their dealings with us were neither pure or honest, and were conducted in an unconscionable and self–serving way that is unacceptable. They are the ones that are now being held to account, not us. If the Banks’ lawyers ever stood up in Court and declared, _“Storm’s clients are partly to blame!”_ think how that would go down? You should therefore hold that thought!

That's it folks! I'll now give you some rest for a while!


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## Garpal Gumnut (11 May 2012)

Thanks Frank.

gg


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## Julia (11 May 2012)

Thank you, Frank, for an articulate account into which you have clearly put a lot of effort and thought.   Certainly, I for one have found it enlightening.



> Okay! Then how does one know whether what a financial adviser is telling you is in your best interests? You don’t which is why, I now firmly believe, we ‘Stormies’ should have sought a second and indeed a third opinion from other financial advisers as to the merit of Storm’s financial model and, for those that had an accountant, run it past him or her as well. Yes, it would have cost us more money and financial advice does not come cheap but with the amount of money we were investing, it would have made little difference to us. After all, if one can’t afford the small amount of money it would have cost, one shouldn’t be in investing anyway.



You perhaps were not aware at the time of the existence of several stock market forums such as ASF.  Had you put up the Storm 'strategy ' and explained that you were considering it as a retiree, I guarantee that within 24 hours you'd have received several responses explaining why you should walk away.



> Often, when you consult with more than one professional you pick up some useful advice anyway in your search for the best solution to your particular needs, whatever they may be. This is commonsense after all! As it was, our failure to apply some commonsense and test Storm’s plan independently cost us all that we had in the end.
> 
> Even when dealing with tradesmen, you don’t accept the first quote submitted but obtain two or more others as well. We all know this! The fact that we ’Stormies’ never went down this path was a major failing on our part and one that is inexcusable
> 
> So my first first advice to any would-be investors out there is not to take anyone’s word for it but rather to get a second or third opinion. Someone said on this forum some time ago, _“If something sounds too good to be true, it normally is!”_ It’s a well known maxim and one we should have been mindful of before we signed up with Storm.



Hopefully your experience will at least save some others from a similar awful mistake.
That must be cold comfort at this stage.



> Bunnyip has said,_ “However, there’s one thing you could have known that would have shown the Storm strategy to be a high risk con scheme that completely misrepresented the facts in regard to the safety measures that were supposedly going to protect your capital from major loss.
> The ‘thing’ I refer to that you could have known about was past market crashes. In particular, I refer to the 1987 crash that wiped 20% off the market overnight, 25% in one day, and 50% in a little over a month.If you’d looked at the ‘87 crash and asked yourself ‘ OK, what effect would a similar crash have on my proposed portfolio’?...you would have discovered that the result of such a crash would be catastrophic loss of your capital before the market reached the trigger points that supposedly would safeguard the bulk of your capital.
> If you’d done that, and discovered the enormity of the ‘87 crash and many others before it, and then considered the very real possibility of such crashes repeating, I believe you would have made the prudent decision to walk away from Storm without even bothering to look into their SOA.”_
> 
> I’m not clear on your line of thinking here? Are you suggesting that people shouldn’t invest in the share markets because all share markets have a past history of crashing? If that’s the case, the economy would fall flat on its face tomorrow because people would simply stop investing.



I don't want to speak for Bunyip but I can't see where he ever suggested people should not invest in the share market because all share markets have a history of crashing.
He rather pointed out that your double gearing strategy certainly magnified profits in a rising market, but explained that when the market inevitably turned downward at some stage that same double gearing would hugely magnify your losses.

Let's say you had not engaged in any gearing at all, just invested your basic capital into the market.  You would still need to have worked out a point at which you would sell to protect your profits (and your capital) when the market turned down.
Hundreds of thousands of people did not understand this when the GFC occurred, and as a result - even without any gearing - lost up to 50% of their investment.

So many people, Storm investors apparently included, seemed to just ignore the fact that markets fall, often severely, and therefore it's absolutely necessary to have a plan to cover this.

I think this is essentially what Bunyip was explaining.  He will of course correct me if I'm wrong.  It's certainly what I'd be saying.


----------



## Julia (11 May 2012)

> The trigger-points that Storm put in place (but didn’t act on) were designed for major falls in the share markets.  Clearly, when the markets fell, the activation of these trigger-points would have protected us from just this type of situation. Any share values we would have lost to that point were acceptable because these trigger-points were set at conservative levels. Or at least, we thought they were! First and foremost, the trigger-points were incorporated into Storm’s plan to protect us from just the sort of losses you mention. The fact that they were not acted on led to our final demise.



OK.  They let you down badly here and it seems to be another area where you showed a trust that wasn't justified in the end.   



> Julia has said that, “_We've ad infinitum made the point that a few simple calculations would have allowed you to see that you could have just stuck the funds in the bank and still achieved your desired level of income, so no need to labour this again, especially as you now are obviously very aware of this.”_
> 
> There was nothing simple about Storm’s financial model so I believe _“a few simple calculations”_ is understating the complexity of it. Certainly, we wished now that we had stuck our money in the bank but it’s no good dwelling on what might have been.



You are misinterpreting or misunderstanding what I said.  I meant nothing to do with the simplicity or otherwise of Storm's model.  What I was saying is that - long before you ever consulted Storm - if you'd just done some simple calculations on what X% offered on term deposit or at call funds on your available capital - you'd have seen in about one minute that you could easily have generated considerably in excess of your stated desired $45,000 p.a. income.
Alternatively you could have just bought e.g. bank shares with their excellent yield and franking credits, though this would have exposed you to the market fall along with almost all other stocks.


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## Frank Ainslie (15 May 2012)

*Storm's mindset*

_"STORM FINANCIAL NEWS 

Storm Financial Investor Newsletter September 2007 

Market to Market 

Bulls Keep Bears at Bay…

What a roller coaster month we have experienced on the Australian sharemarket. 

The US sub-prime market collapse sparked major concerns throughout the globe recently, triggering sell-offs in most global equities markets, however the Australian sharemarket had already experienced a slight "cooling off' period in the week prior to 
the US economic development. 

Realistically, our sharemarket had already fallen slightly (approx. 5%) in the week leading up to the US sub*prime market downward spiral, which exacerbated Australia's already "cooling" sentiment. This caused further selling, taking our sharemarket to a new low of approximately -12% from record highs set on the 24th July 2007. 

Below is an illustration of the share market's performance and its major sectors as measured by Storm's leading investable indices and Australia's leading sharemarket 
indicator, the S&P/ASX All Ordinaries Index.

As you can see, our sharemarket as measured by the All Ordinaries Index (the blue line) has fallen approximately -2.60% in total. Much of the fall has been driven by our 
inherently volatile resources and technology sectors, however both sectors have been trading blows as the best performing sector for the last 4-5 years and they often recover just as quickly. 

The key insight is that our industrials sector (70% of the total sharemarket (capitalization) sentiment is not overly affected, having merely washed off approximately 3% of the gains in the past month. 

Economically speaking, many expert analysts and economists (including Storm Financial) hold the view that economic fundamentals in Australia have not changed, remaining very strong and stable overall. 

This means that it is highly unlikely that underlying upward trends have changed in the economy and by association, our sharemarket, which is a reflection of the best profitable part of the economy - Business Enterprise. 

Yes, this was a bigger than normal blip relative to the past 5 years. Storm has always maintained that the further we get into this bullish cycle, the higher the volatility will become. This recent blip is therefore unlikely to be a fundamental change in economic/sharemarket trend. 

What this blip is likely to mean, for those with foresight, is the opportunity to have invested relatively low and take advantage of one of Storm's unique approaches to wealth creation, which is to accept the market average but attempt to outperform it pockets of value present themselves, i.e. buying low to outperform the averages. 

With relatively linear sharemarket growth over the last 5 years, it has been difficult to find these little pockets of value but as volatility begin to increase, falls such as these may continue to provide us with further opportunities. 

Consider this, the normally conservative Reserve Bank of Australia (RBA) still finds our economy a little too hot for their liking, thus the recent 25 basis point hike in interest rates. 

They would most certainly not want to be hiking rates in an economy that had fundamentally changed for the worse, especially leading into an election. So this brings us full circle, back to the US sub-prime development, which realistically is not materially relevant for Australia and even less so for the Storm style of investing. 

*Remember, we are investors and not speculators*. *We believe in economic investments and the material elimination of asset default risk and the elimination of the subjectivity of selection risk.* 

We attempt to focus on maximizing the right investment principals, *which is why Storm is focusing as much as possible on advising clients to invest now*, *whilst the industry itself is reeling from a mere - 2.60% (12% at its worst point) aggregate sharemarket fall **and receiving record numbers of margin calls*. "_


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## Julia (16 May 2012)

There was a story plus an interview with Bill Shorten on "7.30" this evening which I'm sure would be of interest to Storm investors.
It focused on Trio but much of what Shorten said has relevance to Frank's contention about the lack of appropriate action by ASIC/APRA.

I'd have put up a link but this evening's program is not yet up on the ABC website.
Should be there by tomorrow.

If you just do a search on the ABC website for "7.30" you should be able to access the program in Archives.


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## DocK (17 May 2012)

Frank,

I've just read your "Mindset" posts and want to congratulate you for your honesty.  It takes guts to admit to failings and mistakes when posting under your real name, and I commend you for it.


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## basilio (17 May 2012)

Thank you Frank for your ongoing education/explanation of how the Storm fiasco evolved.

It was a very convincing story wasn't it ? In my view the overall story of financial planners and most investment advisors follows similar if not such extreme lines. I think that many people on this forum can point to their own experience or friends where the returns on investing with planners and super funds just havn't eventuated and in effect ended up being meal tickets for the salesmen and the funds. Hence the role  of  ASF.

A bigger problem IMO is whether the whole stock market and financial system  is capable of offering smaller investors a fair return. The more I see the more I become aware of the sheer amount of gambling that is being done on various indices and shares.  The risk is that simply using stock market as a casino risks the money we have tied up in super funds and individual companies.

I'm also noting just how much money seems to flow to company directors in terms of wages and shares.  Again in my view there it seems unbalanced and the real money in the stock market comes from continually setting up new companies attracting capital and then redistributing  it to directors and self appointed majority shareholders (they give themselves 10-40% of the shares before IPO)

The rest of us are reduced to trying make bucks from short term rises and falls dominated by promotion, some actual activity and the aggressive work of the stock market industry that want to see turnover rather than long term investment. 

This is not a good way to run industry, a country or our financial future


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## Garpal Gumnut (17 May 2012)

I would agree with the comments about ASIC. They are quite muppets when it comes to protecting investors and pursuing criminals.

Frank, if you do not get any joy out of suing the banks and the Storm principals and advisers, I'd have a go at ASIC, if I were you.

gg


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## Frank Ainslie (17 May 2012)

Garpal Gumnut said:


> I would agree with the comments about ASIC. They are quite muppets when it comes to protecting investors and pursuing criminals.
> 
> Frank, if you do not get any joy out of suing the banks and the Storm principals and advisers, I'd have a go at ASIC, if I were you.
> 
> gg




Hi GG,

The biggest scandal is ASIC's going soft on the CBA who were the biggest culprits. I have just written to ASIC reminding that organisation of Storm's role in all this  I will shortly be writing to ASIC outlining the part CBA had in sending their Storm customers into financial oblivion. This follows on from numerous letters to ASIC requesting its reasons for not pursuing the CBA for anything other than that of possibly operating an unregistered management scheme in conjunction with Storm.

What is really needed is for '4 Corners', '60 Minutes' or some such show to run with this. There is nothing like public exposure to get the Government off it backside!

One never knows! If I keep banging away, someone may eventually open the door.

There is no doubt that ASIC has fallen down on the job and continues to fall down. We 'Stormies' are leading the way by suing the banks and ASIC is content to follow in our footsteps. No wonder we tear our hair out sometimes. You only get justice if you can afford it. That's probably why the banks have had a free rein until now.


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## maccka (18 May 2012)

I've been a bit unwell lately and haven't been out much.  I decided to go for a virtual stroll around some of the places I visit from time to time and was quite surprised to see the remake on the Commonwealth Bank Deception website and quite interested to find that they also have a twitter handle @theplaintruth1 

Have to say that they are obviously attempting to gear themselves up.

Cheers
Maccka


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## Frank Ainslie (19 May 2012)

maccka said:


> I've been a bit unwell lately and haven't been out much.  I decided to go for a virtual stroll around some of the places I visit from time to time and was quite surprised to see the remake on the Commonwealth Bank Deception website and quite interested to find that they also have a twitter handle @theplaintruth1
> 
> Have to say that they are obviously attempting to gear themselves up.
> 
> ...




Hi Macca,

According to THE PLAIN TRUTH it was all the CBA's fault and the Casimatises are innocent! ? I wonder if the Courts will buy that? Certainly the CBA is as guilty as Hell but something tells me that Storm had a part to play as well! Just joking! 

The PLAIN TRUTH site is touting the Cassimatis line. It just doesn't wash. How does that equate with what we now know about Storm and the way it operated? It doesn't!

Accusations must be based on clear evidence. Our lawyers have the evidence. THE PLAIN TRUTH hasn't produced anything that backs up its claims. 

I think this site may be useful for gathering information about the CBA but claims without proof  is purely supposition. 

Here are some extracts which indicate that's site's aims:

_"Faceless and nameless individuals within the CBA made the unlawful decisions that led to the destruction of thousands of former Storm clients, the destruction of Storm itself, its advisors and staff and the good reputations of Storms advisors and staff. The contemptible behaviour of these CBA individuals was so pervasive that it was able to taint other organisations such as the Financial Planning Association (FPA), Macquarie Bank, Wesptac, National, ANZ, Bank of Queensland etc?

A typical example of this phenomenon became apparent when The Plain Truth did an analysis on the frequency of negative press about Storm. We found that there was a statistically significant correlation between when negative Storm press was published and the inclusion of large expensive Commonwealth Bank advertising spots?

They did this by lobbying Ralph Norris’ mates within the Labor Party and government and in particular induced Bernie Ripoll to hijack the inquiry from the Senate and make it a Parliamentary Joint Inquiry which he as a member of the Labor government chaired, rather than a Senate Inquiry which the more impartial opposition would have chaired?

Clearly had the Cassimatis’ formalised this undertaking by signing, it would have eventually rendered Storm insolvent given that Storm would have been prevented in doing business with most of their clients by volume of business.  We understand that although Storm had approximately 14,000 clients overall, something like 90% of Storms revenue was derived from approximately the 3,000 clients who would have been subjected to this undertaking.

These differences between the CBA’s claims to the borrower and the reality of the borrowers situation made the difference between financial life and death.  The CBA was completely responsible for this, not the borrower, not the advisor and not Storm as the CBA attempted to make this borrower believe?

The Plain Truth has conducted hundreds of similar analyses on Storm client portfolios showing that CBA’s data was wrong in all cases. For the purpose of clarity and to remove all doubt The Plain Truth stands behind the view that each and every CBA borrowers margin loan data details was profoundly defective?"
_


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## bunyip (21 May 2012)

GG....You’ve stated that you don’t like long posts. In that case son, you’d better stop reading right now – this one is not for you.

Well Frank – what a difference a month or two of reflection combined with some clear thinking has made in your attitude. Now you’re agreeing with some of the views which only a short time ago you to reacted to with hostility and derogatory comments towards the people who expressed them.

It’s heartening to see you now agreeing that investors should have taken the precaution of checking out a number of Financial Planners rather than plunging right in with Storm – this is a pleasing departure form your former statement of_ ‘investors don’t need to be prudent and cautious’. _
As you now acknowledge....._.Even when dealing with tradesmen, you don’t accept the first quote submitted but obtain two or more others as well. We all know this! The fact that we ’Stormies’ never went down this path was a major failing on our part and one that is inexcusable._

Also pleasing is to see you finally agreeing that you should have used more common sense. In fact you put it much better than I ever could have by saying_ ‘Often, when you consult with more than one professional you pick up some useful advice anyway in your search for the best solution to your particular needs, whatever they may be. This is commonsense after all! As it was, our failure to apply some commonsense and test Storm’s plan independently cost us all that we had in the end.’_

I and others have copped a regular blasting on here for daring to suggest that it was largely a lack of common sense that brought you undone. But when you think about it, all the dishonesty and immorality and incompetence of Storm, all the alleged illegality of the banks, all of that could have been easily avoided by Storm investors if only they’d used a decent measure of common sense when checking out what Storm was offering.
We’ve heard often enough_ ‘But we weren’t experienced or sophisticated investors – how were we to know’?_
The fact is that seeing through dodgy planners and dangerous advice requires common sense and independent thinking rather than sophisticated investment knowledge. Of all the successful investors I know (and there are quite a few) none of them are using sophisticated or high-tech methodology, they’re all just using very basic common sense stuff that anyone can use to invest profitably and safely. 

It’s good to see you’ve changed you attitude towards Financial Planners, now acknowledging that your anger blurred your rational thinking. You have now, quite rightly, acknowledged the valuable role of Financial Planners.
I recall you saying several months ago that you were scheduled to give an address to a gathering of retirees, and you stated your intention of advising them to steer clear of all Financial Planners. If you did in fact address that meeting and give that advice, I hope you will now, as a matter of principle and integrity, contact those same retirees and tell them that you were a little hasty in condemning all planners on the basis of what Storm did.

On the subject of investors forearming themselves with the sort of knowledge that could have helped them to avoid the pitfalls of investing through the likes of Storm............
I note your comments that many Storm investors were past retirement age and may not have had the interest, time or capacity to learn about investing. I must, however, completely disagree. We make time for the important things in life – or we suffer the consequences of neglecting them. Health and fitness, family, finances, personal relationships......neglect them at your peril!
Most Storm investors had more than six decades to avail themselves of the wealth of information and resources that are freely available to anyone who wants to equip themselves with some basic investment knowledge. Those who were computer illiterate had the opportunity to learn computers through free TAFE courses and adult education courses, same as I did. Those without access to an internet connection could have availed themselves of free ASX courses, stockbroker information sessions, and public libraries (which always carry a good selection of investment books). Suffice to say that plenty of resources have been available to anyone who chose to make use of them. Nobody has any excuse for arriving at retirement age without knowing anything at all about investment and finance. If they don’t know the basis, then they should stay away from investment. Sometimes we should just admit our limitations, and accordingly stay away from particular activities. 
I know absolutely nothing about sailing a boat, so there’s no way I’m going to suddenly decide to buy a boat and sail up the Queensland coast. I’d soon get into trouble if I tried it.
There are many Storm investors who should have simply realized their limitations, and stayed away from investing, particularly in the stock market.

The stock market does funny things to people – it seems to convince them that the normal rules of running a business don’t apply to stock investment, that they can safely invest in the market without any knowledge of the business. These same people wouldn’t dream of investing in a paper mill if they had no knowledge in that area, they wouldn’t dream of investing in a tourist park without first putting in considerable effort to learn something about that industry. Yet in the stock market business they think they can just jump in without any prior knowledge or experience. Well they probably can......*IF* they poke in slowly with only small amounts of capital which they can afford to lose. That’s how I learnt to invest in stocks and currencies myself. 
But to charge into the stock market with mega bucks, most of it borrowed, without any knowledge of the business, is just inviting disaster. Even if you put a manager on to run the business for you, you still need some knowledge and input yourself, same as you would with any other business. My grandfather had a saying ......_’The best fertilizer for any business is the footprints of its owner’._
This of course applies even if you employ a manager to operate your business. 

I note your repeated efforts to convince this forum that Storm investors didn’t have a gambling problem. Well Frank, nobody of this forum has ever suggested that Storm investors did have a gambling problem. We have, however, quite correctly pointed out that Stormers took a number of gambles, apparently without realizing it.
They took a big gamble in not bothering to get themselves financially and investment literate. 
They took a big gamble in placing blind trust in Storm, rather than consulting a number of planners to compare against each other.
They took a big gamble in mortgaging their homes when they were at retirement age.
They took a big gamble in throwing massive amounts of borrowed money at an investment which they clearly didn’t understand. 

And so on and so on......I could go on but I’m sure you get my point. I’m not suggesting that Storm investors are the sort of people who were always throwing money at the horses or the pokies. Nevertheless, they gambled in a big way. The tragedy is that they appear to have had little understanding of the gambles they were taking. If they had understood, most of them would have avoided Storm like the plague.

Greed.......I notice, Frank, that you’re at pains to point out that you weren’t greedy. The definition of greed is..... _An excessive desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth:_
You acknowledged that you had more than enough money to provide you with a very comfortable retirement. From memory, you stated that one of the reasons you aimed for more money was because your partner wanted to provide something for her children (I can’t think what it was). 
I’ll let you work out whether you think you were being greedy or not. To be perfectly honest, I don’t care why you invested with Storm, or whether you were greedy or not. I don’t entirely oppose greed, it’s a great motivating force to help us to higher achievements, as long as we don’t become silly and imprudent in our efforts to achieve more.
Nobody on this forum that I’m aware of has tarred all Stormers with the same brush by saying ‘YOU WERE ALL GREEDY’. But we have pointed out that some people were already wealthy pre-Storm, and therefore had no reasonable justification for mortgaging their homes and borrowing heavily at retirement age in an effort to greatly boost their wealth. For these particular people, greed appears to have played a part in their decisions. 
One woman on this thread stated that through Storm she got up to a net worth of 12 million dollars. Yet even at that level of wealth she kept investing with Storm in an effort to make even more money, rather than shifting some of her wealth into safe secure assets that were out of reach of the banks. 
Readers of this thread can make up their own minds as to whether greed was a factor in her case.

Frank – you’ve gone to considerable effort to convince us that Storm was a dodgy outfit. But we already knew that – we were saying it long before you started posting on this thread – I don’t know why you felt the need to convince us all over again. 

In summary, Frank, it’s good to see that you’re now starting to get some balance in your thinking. I must confess that at one stage I had formed the view that you lacked the capacity to comprehend even the simplest things. I’m pleased that your recent posts have given me cause to modify that view. Not that I think you and I are ever going to agree on everything, but at least now we agree on _some_ things.


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## bunyip (21 May 2012)

Frank Ainslie said:


> *Mindset*
> 
> 
> Bunnyip has said,_ “However, there’s one thing you could have known that would have shown the Storm strategy to be a high risk con scheme that completely misrepresented the facts in regard to the safety measures that were supposedly going to protect your capital from major loss.
> ...




No Frank, I’m not suggesting that people shouldn’t invest in the stock market. 

What I’m suggesting is precisely what I said......that if you’d looked at what happened in the ‘87 crash, and then considered what effect a similar crash would have on your proposed heavily geared portfolio, you would have been forewarned that you were setting yourself up for catastrophic losses if the ‘87 crash was repeated.
And that these losses would have occurred long before Storm’s safety triggers were supposed to kick in and save you from big losses.

Not everyone who invested in the market was setting themselves up for catastrophic losses, but then again, not every market investor mortgaged their home and geared themselves to the eyeballs to triple or quadruple their market stake, as you Stormers did.
And not every market investor chose the stock market as their sole investment, like you Stormers did. Prudent investors spread their money over different assets classes, and used conservative levels of borrowing.

Stock market investment is for prudent people who spend as much time considering the downside risk as they spend considering the profit potential. 
You Stormers failed to do that. You saw how much money you could potentially make, you spoke to Storm investors who told you how well they were doing, but you just didn’t do your homework on the downside risk.


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## SJG1974 (23 May 2012)

Been some good stuff on this site recently.  Thanks everyone.

Frank, been an interesting read about the inner goings on.  I too admire your honesty in these recent posts concerning your mindset.

I also agree about the PLAIN TRUTH stuff.  Very one sided.  

Storm get away scott free in all of that. A heap of garbage in my opinion.


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## Solly (26 May 2012)

Solly said:


> When matters are next in Court
> 
> Proceedings are being held in public so anyone interested may attend.
> 
> ...




Are there any Stormers who wish to comment on the recent Directions Hearings at the Federal Court, regarding Mac Bank, Comm Bank & ASIC's action?

I believe that there is quite an air of confidence around. 

S


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## Frank Ainslie (6 June 2012)

Hope for mortgage 'victims' with homeowners winning battle against banks
by: Anthony Klan
From:The Australian
June 04, 201212:00AM


THOUSANDS of struggling homeowners could walk away from their mortgages as a series of court cases helps to expose widespread improper lending practices involving some of the nation's biggest financial institutions.
Finance industry giants are spending millions of dollars on legal fees fighting homeowners who have successfully exited their mortgages because they were stung by sub-prime-style lending practices during the last property boom. An investigation by The Australian has revealed several mortgage providers and mortgage brokers engaged in improper lending practices in the years before the global financial crisis hit in 2008, including inflating borrowers' income and ability to repay debts to secure so-called "low-doc" loans.
Courts in several states have sided with homeowners who have defaulted on their loans, extinguishing their mortgages. The rulings have encouraged other lenders to reach settlements with borrowers that are saving homeowners hundreds of thousands of dollars. And the issue could be tested in the High Court in coming months.
MAY has transformed the global economic outlook like no other month since September 2008 brought the collapse of Lehman Brothers.
Award-winning consumer advocate Denise Brailey, who runs the Banking and Finance Consumers Support Association, said she was dealing with more than 100 alleged victims of improper lending. "What this means is that if you are a struggling homeowner and the bank comes knocking you may well not have to hand over your keys," Ms Brailey said.
The declining health of loans could have ramifications for the federal government, which has put about $14 billion into securitised mortgage investments - packages of home loans known as "residential mortgage backed securities" - since the GFC.
In October 2008, Wayne Swan announced the government would invest $4bn to shore up the RMBS market, but that figure has ballooned and in April last year he increased the obligation to $20bn.
Australian Office of Financial Management chief executive Rob Nicholl said the government had invested in superior-quality loans with relatively low defaults rates and that it was "very cognisant of all the risks involved".
However, default rates among some mortgage securities, which include low-doc loans, have surged to as much as 7 per cent of loans.
According to Fitch Ratings, low-doc loans comprise about 8-10 per cent of every mortgage in the Australian securitised mortgage market.
Fitch analyst James Zanesi said that proportion of low-doc loans was similar in the wider, $1.2 trillion Australian mortgage market.
According to Fitch, low-doc loans were more than four times as likely to be in default than standard loans, with 5.5 per cent of all "prime" low-doc loans in default compared with 1.26 per cent of all standard loans.
The group said low-doc loans were experiencing "considerable deterioration" and there was "no relief in sight" for low-doc loan delinquencies.
The Australian has amassed evidence of widespread improper lending activity based around abuse of low-documentation lending products.
In the race to provide credit - and earn commissions - major lenders such as Macquarie, Suncorp and GE Money spruiked imprudent lending practices to mortgage brokers, highlighting loopholes in their own lending requirements.
Low-doc or "no-doc" loans were supposed to be only for self-employed business owners who could not provide standard loan information. Borrowers typically pay a higher interest rate to reflect their lack of a regular credit and income history.
But in scores of emails those lenders - and many others - told mortgage brokers that borrowers needed only to register an Australian Business Number "for one day" to secure low-doc or no-doc loans.
One email from a Macquarie Bank business development manager to brokers says: "Why not try Macquarie for the below reasons . . . No docs - Client only needs to be self-employed for 1 day or more . . . No assets and liabilities required, no income needs to be stated!!!"
Macquarie Bank and GE Money declined to comment. Suncorp spokesman Jamin Smith defended similar emails sent by Suncorp staff, saying business development managers did not have the power to authorise loans.
The Australian has also discovered cases of mortgage brokers, loan originators and others inflating borrowers' stated incomes on loan application forms without their knowledge.
Precedent-setting court cases have recently found that, where borrowers were given loans they could never afford, lenders must extinguish part or all of those mortgages. Nine judges before six courts have to date found in favour of homeowners affected by improper loan applications, and in almost all cases courts have ordered lenders to fully extinguish mortgages within 30 days.
The most clear-cut cases have occurred in NSW because of the 1980 Contracts Review Act in that state. However, courts in Victoria and Western Australia have found in favour of borrowers under existing legislation. Major mortgage securitiser First Mac - which has issued $9.5bn in Australian mortgages since 2003 - lost a NSW Supreme Court bid to repossess the family homes of three borrowers on the grounds those borrowers were victims of loan application schemes.
The judges found lenders had acted inappropriately by engaging in "asset lending" - that is, lending money based solely on the fact that the loan is secured by an asset, usually a person's home, and paying little or no regard as to whether the borrower could afford the loan.
First Mac appealed against the decision and in December the judges again sided with borrowers, ordering that mortgages against two family homes be rescinded completely, and reduced by three-quarters in a third case. First Mac was ordered to pay court costs.
In light of those judgments, lenders such as Westpac are scrambling to settle with borrowers who claim to have been wronged. In many cases, hundreds of thousands of dollars are being wiped from mortgages.
In every court case heard, lenders had failed to make simple checks, such as calling prospective borrowers to verify their stated incomes or employment status.
First Mac, based in Brisbane, has now sought to take its case to the High Court, and a hearing as to whether the case will be heard will take place later this month.
A High Court spokesman said between 8 per cent and 10 per cent of applications for such "special leave to appeal" applications were granted.
First Mac founder and managing director Kim Cannon did not respond to calls last week.
In most instances, the precedent-setting cases against the deep-pocketed financial institutions are being funded by consumer groups or lawyers working for little or no pay because the borrower victims are often close to bankruptcy. Lawyers said the vast majority of the thousands of homeowners affected by improper or unconscionable lending activities had no idea they could legally walk away from their mortgages.
"Lenders have been throwing everything they have at these cases because they know there are thousands, probably tens of thousands, of people who have been affected," said Geoff Roberson of Champion Legal, who has run the cases against First Mac. "The problem for many borrowers is they don't know they have been wronged and simply roll over when the banks come knocking."
Consumer advocates said borrowers who believed they had been affected should approach their lender for a copy of their loan application form, which they were entitled to by law, and check the income levels stated.
Ms Brailey said not being provided with a copy of the loan application form was a key indicator borrowers may have been subject to loan application irregularities.
"In every single case of the 100-plus I am dealing with, the person has not been provided with a copy of their loan application form by their mortgage broker or lender," she said.
She said borrowers were entitled to such information by law. However, banks and other lenders had "stonewalled" such requests.
"Every time the borrowers receive the forms they are blown away," Ms Brailey said. "Incomes have been grossly exaggerated, false employment job descriptions have been entered or they have been stated as being employed when they're not.
"In one case, a lowly-paid deckhand was described as a ship's captain and described as earning $150,000 a year."
Ms Brailey, who has been tracking low-doc loans and loan application issues with The Australian for several years, said she had uncovered examples of loan application irregularities in loans approved by 14 banks and other lenders.
She obtained emails illustrating imprudent lending practices by 36 banks and non-bank lenders, including all of the major banks.
"We're about to see a major train wreck," she said.


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## Glen48 (6 June 2012)

Its USA sub prime all over again post it in Aus property poast as well Frank


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## Frank Ainslie (6 June 2012)

Hi All,

At the moment I am somewhat preoccupied with other matters. However, before our case is heard In September I will be outlining for everyone the many issues that lie at the heart of Storm's clients' legal actions against the Commonwealth Bank, the Mac Bank and the Bank of Queensland. 

By my identifying the many known transgressions of these particular Banks, it should enable you all to have a clearer understanding of our position.


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## Garpal Gumnut (10 June 2012)

Frank Ainslie said:


> Hi All,
> 
> At the moment I am somewhat preoccupied with other matters. However, before our case is heard In September I will be outlining for everyone the many issues that lie at the heart of Storm's clients' legal actions against the Commonwealth Bank, the Mac Bank and the Bank of Queensland.
> 
> By my identifying the many known transgressions of these particular Banks, it should enable you all to have a clearer understanding of our position.




Thanks Frank,

I trust all is well with you and yours.

gg


----------



## Frank Ainslie (11 June 2012)

Garpal Gumnut said:


> Thanks Frank,
> 
> I trust all is well with you and yours.
> 
> gg




Hi GG,

Yes, all is well! Thanks for asking!

The moment of truth is fast approaching for we Stormies! I guess now is the time to be philosophical about our fate and accept that this now all lies in the lap of the gods. 

For all those like us that are wondering what their futures hold, I have always found the following words comforting:

_" It is my fate to be in between Heaven and Earth. If I resist my fate, I suffer. If I accept it, I am happy. I have time in abundance, an eternity to repeat my mistakes, but I need only once correct my mistake, and at last I will hear the song of enlightenment… It's the song my spirit has been singing since the moment of my birth. If nothing happens without cause, then the gift of suffering is to bring us closer to God, to teach us to be strong when we are weak, to be brave when we are afraid, to be wise in the midst of confusion, and to let go of that which we can no longer hold. Lasting victories are won in the heart rather than external.”_

Whatever happens, it is up to us as individuals to make the best of it and go on. Helen and I will do just that. 

Between now and the trial there is little more to say. However, the trial itself promises to be a battle royal and there should be much to discuss once the preliminaries are out of the way. Before then, I will outline our position as far as the Banks are concerned.


----------



## StumpyPhantom (11 June 2012)

All the best to you and your family, Frank.  Thank you for your informative posts, I have learnt a lot, and I couldn't help feeling right through it that the fraud being perpetrated was through the glitzy marketing efforts Storm went to, right down to the cheery faces in their waiting room spruiking their product.  It would be interesting if the marketing/PR organisation that got the Storm gig received written instructions about how to create the psychological forces to induce this, and even more interesting if the banks were brought into the loop on this.


----------



## bunyip (20 June 2012)

Harleyquin said:


> When I pay someone who advertises on TV as storm did to come in and see them and they would look after us financially, I expected just that and paid them darn good money for their so called 'expertise.'




I’m surprised to hear that Storm advertised on TV. I never saw Storm ads in any of the media outlets. One of their claims was that they didn’t advertise, but relied on word of mouth recommendations from clients. But then Storm was always pretty good at saying things that weren’t true.


----------



## maccka (25 June 2012)

bunyip said:


> I’m surprised to hear that Storm advertised on TV. I never saw Storm ads in any of the media outlets. One of their claims was that they didn’t advertise, but relied on word of mouth recommendations from clients. But then Storm was always pretty good at saying things that weren’t true.




Storm definitely did advertise on TV.  The advert I particularly remember had EC sitting at his desk saying something along the lines of "Even if you don't see us make sure you see someone!"

They did a lot of blitz advertising.  You'd go through periods where you would see a lot of their ads and then nothing for a while.  Sometimes you'd see the same advertisement twice in the same commercial break.

cheers
Maccka


----------



## asproboy (26 June 2012)

maccka said:


> Storm definitely did advertise on TV.  The advert I particularly remember had EC sitting at his desk saying something along the lines of "Even if you don't see us make sure you see someone!"
> 
> cheers
> Maccka




Wow, that's devilishly clever - befitting Manny's manipulative prowess. Not only does he present a pious image for potential clients, he becomes a benefactor to other financial planners in the region who dare not speak up against the person with the deep pockets, even if they're stymied by how he can be making so much money!


----------



## Solly (26 June 2012)

Heads up.

Keep your ears to the ground and keep your eyes peeled.


----------



## Solly (28 June 2012)

It was a very interesting day in the Federal Court in Brisbane yesterday.

Are there any Stormers who wish to pass a view on the Hearing?


----------



## Julia (28 June 2012)

Solly said:


> It was a very interesting day in the Federal Court in Brisbane yesterday.
> 
> Are there any Stormers who wish to pass a view on the Hearing?



Perhaps you could tell us what happened?


----------



## Harleyquin (2 July 2012)

Our local storm firm advertised regularly on TV, had a radio spot and in the local paper.  Ive only heard this 'by word of mouth' accusation since the collapse.


----------



## Solly (11 July 2012)

> "LAWYERS running a class action on the $3 billion collapse of Storm Financial will put to the test claims that banks issuing low-doc loans have breached their own industry code of practice."




More here: http://www.theaustralian.com.au/bus...orm-class-action/story-fn91wd6x-1226422932175


----------



## Solly (11 July 2012)

> "Storm investors urged to regroup as trial loomsTrial to begin in September
> The Storm Investors Consumer Action Group has called on former Storm clients to get in contact with it so as not to miss out on the potential recovery of lost funds."




More by Kate Kachor here: http://www.investordaily.com.au/14630.htm


----------



## Solly (11 July 2012)

> "Lawyers against Storm Financial buoyed"




More @ ABC PM http://www.abc.net.au/news/2012-07-...orm-financial-buoyed/4124470?section=business


----------



## Frank Ainslie (12 July 2012)

Solly said:


> More here: http://www.theaustralian.com.au/bus...orm-class-action/story-fn91wd6x-1226422932175




Hi Solly,

Interesting! 

Here's an extract that caught my eye!

_"Slater & Gordon lawyer Ben Hardwick denied there were substantial issues not covered by that law firm in negotiating settlement for "over 1000" victims of the Storm collapse.
Mr Hardwick said there were very low numbers of low-doc loans among those victims. But he said loose lending practices by lenders to Storm investors was a key issue, regardless of how the lending product was branded.
"All of those issues were examined at the time," Mr Hardwick said_

Sufficient doubt lingers in my mind as to whether Slater and Gordon’s approach to their clients' legal positions was ever fully considered or for that matter whether the 'Panel' of Judges set up to oversee the process considered the facts in their entirety. Further, the whole of the CBA's legal argument rested on the CBA's contention that Storm was an authorised agent for its clients. This notion was supported rather than challenged by S & G even though it is an assumption rather than a fact. In fact the CBA controlled the whole of the CBA 'Resolution Scheme' process, and S & G stood by content to let the Bank dictate the terms. They got $5,000 a pot for each client so S & G weren't too worried anyway.

It seems to me that S & G were only interested in an easy and quick settlement, quite content to accept the CBA carrot of some $250 million as an equitable outcome.. Whilst this may seem a lot to the uninitiated, it is about one tenth of what the CBA may be up for if it loses! The web these banks weave to deceive! 

Can anyone out there ever recall any Bank being compassionate or magnanimous? The definition of an 'oxymoron' these days must surely be _"An honest bank!'_

When I tried to point out to Slater & Gordon the error of their ways back in 2009, Helen and I were promptly shown the door. I raised what I considered were some relevant legal questions which they as my lawyers should have addressed. Instead, it was "If you are not satisfied you basically know what you can do!" Indeed, it was the only time they acted with any haste dispatching my file back to me by express post in 24 hrs like a hot potato.

Frankly, I believe that questions must be raised about the CBA resolution scheme and the way it was handled by Slater & Gordon if legal wrongs are established during this trial that were not considered by that law firm at the time, but should have been evident to any law firm that gave its Storm CBA clients legal advice that they then duly acted on? For that matter, just how sound legally are any agreements reached between CBA’s customers and that Bank under the resolution scheme particularly if an UMIS is found to have existed? Can a contract or agreement be considered legal if it is based on a previous agreement that is subsequently declared to be illegal?

Perhaps S & G will come up with the _“Sergeant Schultz Defence?”_ “I know nothing! I see nothing!”

Time for a lawyer joke, I think! _“What’s the difference between a prostitute and a lawyer? A prostitute screws you while you are alive! A lawyer continues to screw you even after you are dead!”_

Sorry about that but dealing with various dirt bags for the last four years has tended to make me a little cynical about the Law profession as a whole. Let’s hope our justice system, an honest law firm who is putting itself "on the line", and the collective will of those strong enough to fight back can overcome an apathetic Government in the form of Ministers that stand by and do nothing, and the Regulator that does not have the inclination or will to prosecute the CBA for anything other than UMIS. Perhaps a Royal Commission to investigate ASIC’s part in all this is called for because something certainly needs to be done to get this moribund institution to show some fight where the CBA is concerned. But then the PM only earns $350,000 or so whereas Ralph Norris got 16.2 million. Why would anyone take notice of the maid when the Master earns a fortune and she only gets ‘petty cash”? 

What a way to run a country! The Banks do indeed rule!

*Incidentally, for anyone that is interested, Directions Hearings at Brisbane, before His Honour, Justice Reeves, are fixed for Monday, 16 July, 2012, Tuesday, 17 July, 2012 and Wednesday, 18 July 2012.*


----------



## Solly (12 July 2012)

Frank Ainslie said:


> Hi Solly,
> 
> Interesting!
> 
> ...




Hi Frank,

I too look forward to the Directions Hearings. Yes, it has been a long road, you mention Slater & Gordon, I couldn't help but think of Damian Scattini. I find it interesting that he fails to mention his success with the "Resoloution Scheme" in his current online biography with his current tenure;
*http://www.mauriceblackburnnsw.com.au/our-people/professional/damian-scattini.aspx

*S


----------



## Solly (15 July 2012)

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Monday, 16 July 2012

Justice Reeves Court No. 1, Level 7

10:15 AM Judgment

1 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

Directions and Interlocutory Hearings

2 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

3 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED

4 NSD811/2010 LESLIE JAMES SHERWOOD & ORS v COMMONWEALTH BANK OF AUSTRALIA & ANOR


----------



## maccka (16 July 2012)

Solly said:


> FEDERAL COURT OF AUSTRALIA
> Queensland Registry
> Monday, 16 July 2012
> 
> ...




It's a busy week in court this week.  Busy times ahead in the coming months....

Cheers
Maccka


----------



## Solly (16 July 2012)

FEDERAL COURT OF AUSTRALIA
Queensland Registry
Tuesday, 17 July 2012

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000

Justice Reeves Court No. 1, Level 7

Not Before 11:30 AM Directions

6 QUD590/2010 TRACEY RICHARDS v MACQUARIE BANK LIMITED

7 QUD577/2010 ASIC v STORM FINANCIAL LIMITED (RECEIVERS AND MANAGERS APPOINTED) (IN LIQUIDATION) & ORS

8 NSD811/2010 LESLIE JAMES SHERWOOD & ORS v COMMONWEALTH BANK OF AUSTRALIA & ANOR


----------



## bunyip (23 July 2012)

Came across the following from a few years back – interesting to see EC claiming that Storm had neither the capacity nor desire to completely manage the loans.

That’s quite a turnaround from EC, considering that Storm’s website talked about how they monitor/manage their clients investments so that clients don’t have to, (or words to that effect). I would have thought that managing the loans would have come under the banner of managing/monitoring clients investments.

http://www.brisbanetimes.com.au/business/storm-boss-blames-banks-for-margin-calls-20090929-ga4h.html


----------



## Frank Ainslie (2 August 2012)

Solly said:


> Hi Frank,
> 
> I too look forward to the Directions Hearings. Yes, it has been a long road, you mention Slater & Gordon, I couldn't help but think of Damian Scattini. I find it interesting that he fails to mention his success with the "Resoloution Scheme" in his current online biography with his current tenure;
> *http://www.mauriceblackburnnsw.com.au/our-people/professional/damian-scattini.aspx
> ...




Hi Solly,

Just a quick few words to keep in touch!

Four years ago, almost to the day, I was sunning myself on a beach in Fiji wondering what the poor people were doing? As it turned out I didn’t have long to wait before finding out the hard way!

To the young, time is no big deal. However, to the elderly it is everything because they start to run out of time fast. The miscreants, be they with Storm or the Banks involved with that firm, that mishandled our money and abused our trust for their own nefarious ends continue to remain untouched by this financial disaster. Why?  Largely because our judiciary system is unwieldily, ponderous and designed for the most part to make those operating within it richer rather than focussing on establishing swift and deserving justice. Basically, it is all about making money and the law comes a poor second. Nowhere was this more apparent than in the last Court session I attended. 

Unfortunately, I was only able to attend on the Monday but I gather from my brother-in-law that I missed little on the Tuesday and Wednesday because in the context of the forthcoming trial these are merely the preliminaries where everyone on both sides is vying or manoeuvring for a legal advantage. A bit like a battle if you like where the generals are seeking out the best ground. 


As I have already stated, much of what was discussed in Court to my mind results from a legal system designed to make money rather than seek out justice for those that have been wronged. If we all start from that premise, we are inclined to become less disillusioned about it all. 


It was mentioned that some 96 witnesses would be called? "Sleepy time and the living is easy!" Combine that with countless numbers of documents that will be produced and points of law argued and you have what threatens to be a case that will drag on for ever! 


For what it is worth, the day commenced with the ASIC lawyer outlining ASIC's charges against the Banks in relation to UMIS. The BOQ lawyer basically had 4 objections to this and had documented these to the Judge.The Judge, however, upon reading such stated that he was unable to actually define what the BOQ's lawyer was actually objecting to, which given the track record of these jokers should come as no surprise to any of us. The BOQ lawyer said he would clarify such at the next meet. 


The lawyer for the CBA (a pugnacious little fellow that was probably an ankle biter when he was a nipper) then got into a running argument with Tony Morrison (acting for our side) over our pleadings asserting that their should be greater clarity as to what was actually being alleged. Lees (also on our side) then took up the reins suggesting that his particular brief could be used as the framework for how these proceedings should be conducted. 


You will gather from all this that confusion still reigns supreme within the Court because not only are legal arguments complex, but a number of different legal issues are being considered at the same time; legal issues, incidentally that may conflict with one another.  For instance, if UMIS is found, it must have an impact on the cases before the Court which hinge on contractual breach etc. To my mind, running UMIS and these cases at the same time rather than establishing the question of UMIS'  first is a bit like putting the cart before the horse but what do I know? Whatever, I do know that the waters have been muddied considerably and this is slowing down the process!


In the latter part of the day, Lees and the Macquarie Bank's lawyer were arguing to and fro about the witnesses that our side intended to call that would include among them employees from the Mac Bank. Mac's lawyer seemed anxious to limit or have some of these witnesses barred for reasons which I was not able to discern at that time because I had to catch a train home. By this time I was past caring anyway.

Trying to apply commonsense to the way our court system works is somewhat difficult. It seems to me that it is designed primarily to churn money out of people (victims) in much the same way as the banks do. Most of the matters now being discussed to my mind could have been clarified outside a court room between the lawyers and the judge to save time and money. However, that's not, it would seem,  the object of the exercise but rather the reverse. 

The law has always fascinated me but from what I have seen of it in action these past few years, I would never survive in such a system which is staid, stodgy, lumbering and somewhat out of date in a modern world. Let's at least hope that this farcical system can eventually lead those that operate within it to a fair and equitable solution for us all. Hope springs eternal!


For those of us that will be sitting through most of these proceedings, let's hope that we not only obtain justice but also keep our sanity. Quite frankly, to date, these proceedings have been as boring as all Hell! What happened to Perry Mason? Can someone put a call in!

Apparently, there's another session today but I got the message too late to put in an appearance. No doubt my brother-inlaw will let me know what transpired if anything!


Frank


----------



## Glen48 (2 August 2012)

Feel for you Frank and others, the legal system is nothing more than a boys club who have some secret code to make money and commonsense is not an issue as it will destroy their income.
 I often wonder how many sit over  beers discussing a case  and who will win after all they are all from the same mold.
 They must be the only profession who do not produce any thing good for society like Doctors, engineers etc do.

When it is all boiled down there is not much that two people could not settle between themselves and many do out side the courts every day with a handshake.

They need all these points of law to justify their existence and make them sound important.
The main victims in any court are the true facts.
One thing a lot will be worse off once the depression hits and would have lost it all regardless of Storm or not.
 Need to press on and accept you and other were dealt a bad hand.
Good luck


----------



## Judd (3 August 2012)

Actually, most law (>90%) is about property (who owns/owes what) and not about people.  Don't know where you folks get the silly idea that justice comes into it except, possibly, from the concept of "to act or treat justly or fairly" but that can only apply within the principles of law.  Which is why there are lawyers.


----------



## bunyip (4 August 2012)

Since the inception of this thread a number of us have said that the Storm case will drag out for years and the big winners will be the law firms.


----------



## Solly (12 August 2012)

> *"Low-doc fraud rampant in boom*
> 
> THE practice of mortgage brokers and others fraudulently filling out personal financial information on behalf of low-doc loan borrowers was rampant in the years leading up the financial crisis, according to legal experts"




More by Anthony Klan @ theaustralian.com.au


----------



## Solly (15 August 2012)

> *Storm Financial clients urged to reject pre-trial cash*





From ABC AM @ www.abc.net.au/am


----------



## Frank Ainslie (15 August 2012)

Hi All,

This forum has been a little quite of late but then so have I for that matter. It is not a case so much of running out of steam as taking time out to smell the poppies! It's amazing how psychedelic the world can look after doing so! _"LSD induces extreme sensory distortions, altered perceptions of reality, and intense emotional states, that may also produce delusions or paranoia, and that may sometimes cause panic reactions in response to the effects experienced."_ Sounds about right although in our case LSD stands for_ 'Lost Savings Disaster'_ and we still owe the dealer. The fact that we can still laugh provides hope for us yet!

To more serious matter now. In a short while we, some of the former investors of Storm Financial, will be locking horns in Court with the CBA, the Macquarie Bank and the Bank of Queensland. Four years will have passed by then and possibly one or two more will transpire by the time all this is settled. 

Much debate has occurred both in the Media and among the general public as to who the guilty parties are and the measure of their involvement. From this certain factions have arisen that either lay the blame at Storm’s doorstep, blame the Banks that were involved with that company entirely or have decided that both Storm and the Banks are equally at fault. 

For my part, I cannot see how Storm or the Banks involved with that firm can claim to have acted honestly in their dealings with their clients/customers because the facts tell us otherwise. In the last few years prior to the GFC the Banks lent imprudently and to excess. The many media articles that have appeared since lend substance to this. Storm who acted as the catalyst for this financial disaster is no more so the investors involved (of which Helen and I are two) cannot seek recompense from that company. However, their partners in crime, namely the Banks still survive and continue to grow and they are now very much in the firing line.

So, how strong is our case and what can we expect when the legal fireworks start? Frankly, if I hadn’t made a point of investigating for myself during the time that has passed, I would be little the wiser because our legal team has not divulged what evidence it has or its forthcoming ‘modus operandi’. Whilst I can appreciate our solicitors’ reasons for secrecy bearing in mind that the Banks would love to be forewarned, it does reflect the disadvantage of those involved in a class action of this nature because we are left guessing. In such circumstances, people’s individual cases are offshoots of the collective whole where the focus is on the test cases that have been chosen to test the legal principles involved. My forthcoming comments regarding the legal issues that will arise should therefore be considered in isolation because they are my own personal views that have not been endorsed by our lawyers or for that matter anyone else in the legal profession. Further, I do not have access to the hard evidence and can therefore only use conjecture and Media comment backed up by known principles of Law without the benefit of access to legal precedents. However, for those that are interested and for those that are directly involved, I will now try in the forthcoming weeks to outline the legal issues involved and the possible arguments that the Banks will use in their defence.


----------



## Frank Ainslie (16 August 2012)

*“Let justice be done, though the heavens fall.” - (Fiat justitia, ruat coelum.)* (Part 1)

Time can be a balm that assuages the senses and dilutes even the most heinous acts. It can dim recollection and caste shadows over our memories to the point where past wrongs against us can lose their impact and our natural instincts for revenge are dulled as a consequence. 

I think it would be fair to say that for most of us that had the misfortune to invest using the services of Storm Financial we now just want an end to all this! If the Law fails us in the same way that this Government and the Regulator has then so be it 

So what of this Law that we all hold so dear? Where do we stand and what are our chances? This is the burning question that dominates our thoughts as we approach the trial date. As I have recently stated, we have little idea of the hard evidence to hand because our lawyers are playing everything close to their chests. We do, however, have a notion of the charges being laid, and I will now endeavour to discuss these various accusations with a view to putting them in context and give them some clarity. When so doing, I do not profess to be a lawyer although I have studied commercial law both in the UK and here in Australia. I have also spent the last four years delving through various aspects of this case. I doubt that many lawyers now involved can lay the same claim? Whatever, the reader will be the ultimate judge of my competency in this regard. I think that in the end, you will not find my conclusions too short of the mark!

Before stating our case, let’s consider what possible defence the Banks can offer. The Banks know that UMIS aside, which is a matter that will be settled under the existing Corporate Law, they must deflect their portion of the blame by laying the fault fully at Storm’s doorstep. In other words, they were innocent parties that did everything by the book and were aghast when they found out what Storm had done to its clients. _“We gave the bullets to Storm but thought they were blanks!”_

This sounds perfectly feasible to me but then I believe everything the Banks say! This seems at odds though with the CBA’s later actions in confessing that they had been at fault and offered their Storm customers a ‘resolution scheme’ that was worth about one tenth of what they had filched out of their customers to start with? This would have to be the first time in history that any Bank offered its customers some of their money back without being taken to court. But then I forget – the CBA cares!

_“We had separate contracts with Storm’s clients and what Storm did had nothing to do with us!”
_
“_We left it to Storm to issue margin calls (even though the margin loan contracts were solely between the CBA and its customers) because Storm was an agent for its clients!” _

The CBA have opted for more positions on this matter than those outlined in the ‘Karma Sutra’. In the end though they will have to adopt one position only. Were they operating in close co-operation with Storm or were they operating at arms length? Either way, their position is tenuous and they and the other Banks know it. Make no mistake! The CBA, the Macquarie Bank, the Bank of Queensland and all those other banks involved in this sorry mess are fully aware of their culpability and have been bunkered down until now hoping that the bombs are not going to drop on them. For the three banks in question, the bombs are already on the way and its now merely a question of hitting the target. How much actual damage that will be caused when they do is anyone’s guess at this stage.

So, what can the Banks do in their defense? In my opinion the banks have nowhere to go other than to fall back on their contractual conditions and contend that Storm had the permission of its clients to act fully on their behalf in any dealings with the banks. Indeed, the CBA’s Resolution Scheme is founded on this premise with the blessing of Slater and Gordon and ‘The Panel’ who saw fit to agree with this contention. Time and again in S & G’s Booklet which explains the RS, it expounds on this theme. For example:

_“CLAUSE 10: THE OTHER DOCUMENT THAT FORMS PART OF THE MARGIN LOAN CONTRACT IS AN AGREEMENT REACHED BETWEEN STORM AND THE BANK IN MAY 2007,WHICH PROVIDED THAT THE BANK WOULD EFFECTIVELY INCREASE THE MARGIN CALL LOAN-TO-SECURITY RATIOS (MCLSR) FOR STORM CLIENTS' MARGIN LOANS THAT WERE SECURED BY STORM-BADGED INDEX FUNDS UP TO 90% (SEE BELOW AT PARAGRAPH 13 FOR FURTHER DETAILS). THE EFFECT OF THIS AGREEMENT WAS TO VARY THE TERMS OF THE EXISTING MARGIN LOAN CONTRACTS TO ALLOW FOR, AMONG OTHER THINGS, THE INCREASED MARGIN CALL LOAN-TO-SECURITY RATIOS. IT'S COMMON FOR PARTIES TO A CONTRACT TO VARY ITS TERMS BY AGREEMENT IN THIS WAY. ALTHOUGH YOU WEREN'T INVOLVED IN THE MAY 2007 AGREEMENT PERSONALLY, IT'S LIKELY THAT A COURT WOULD FIND THAT STORM WAS ACTING AS YOUR AGENT IN ENTERING INTO THIS AGREEMENT WITH THE BANK, SO IT COULD AGREE TO THE VARIATION ON BEHALF OF ITS CLIENTS (SEE BELOW AT PARAGRAPH 12). FROM MAY 2007 ONWARDS, THEREFORE, THIS AGREEMENT WOULD FORM APART OF THE MARGIN LOAN CONTRACT.”_

This clause alone is one of the worst perversions of contractual law I have had the misfortune to witness and speaks volumes for the law firm that went along with this premise and ‘The Panel’ that endorsed it.  To my mind, this is a complete and deliberate misrepresentation of the tenets of commercial law designed to mislead CBA’s Storm customers in order to persuade them that their legal position was weak. I implied as much in my complaint to ‘THE LEGAL COMMISSION’ but that body is about as weak as ASIC and as irrelevant.

The banks can argue all they want that we, Storm’s clients, gave the banks permission to act on our behalf but this is a long way from appointing Storm as our agent in all dealings with the banks (particularly contractual ones) because ‘AGENCY’ in and of itself imposes conditions on anyone that adopts such a position. For one ‘fiduciary responsibility’ figures prominently where agency is concerned and financial advisers do not have a fiduciary responsibility. Our ‘intention’ when appointing Storm to act on our behalf will also be examined. It is one thing to give Storm permission to liaise for us with Banks but quite another to allow Storm to intercede where contractual matters were concerned. Of course, the Banks lawyers will be fully aware of this and know they will have a hard time in a court of law trying to make this stick. Good luck is all I can say! 

Why S & G and ‘The Panel’ of judges, no less went along with such a notion is beyond my comprehension bearing in mind that the predominant theme in the CBA resolution scheme was the one of ‘agency’ – something that was assumed and presented without a modicum of evidence to support this contention. Makes one wonder sometimes whether the contagion that affected those financial advisers in Storm filtered through to some within our legal ranks as well?

Switching now to the conditions of contract that existed between us and the Banks in the form of housing and margin loans, it must be remembered that although statute law has some bearing, the principles of such agreements are enshrined in contract law. The foundations of contract are ‘offer’ ‘acceptance’ and ‘consideration’. However, this does not mean that once someone has accepted the conditions outlined in an agreement that is the end of the matter. The conditions imposed must stand up in Law because both parties to the agreement must not be disadvantaged as far as their right are concerned. Therefore if you introduce ambiguity into a contract such as in the ‘Goodridge’ case where the word _“May’"_used in the agreement left some doubt in the mind, the Judge ruled that the word _"Shall"_ be substituted. ‘Intent’ is invariably the key issue in such matters and equity is foremost.

The Banks however do not have to merely contend with contractual issues but also the banking codes they have adopted that are contractually binding. This is going to be a major issue for the Banks because it is clear that for some time leading up to the GFC the Banks totally ignored their responsibilities in this regard and lent money willy-nilly to anyone. The Courts have now started reversing some of these loans that were in many cases ‘low-doc’. Therefore, anyone in Storm with a ‘low-doc housing loan’ backed up by few assets and no real income at the time the loan was taken out can in my opinion feel confident that such loans will eventually be quashed. I will elaborate on banking codes in more detail when outlining our case against the Banks.

There is no question to my mind that the Banks in law have a shaky defense. Further, there are millions of documents, rogue employees, internal bank reports and the like that will expose their involvement with Storm and prove that the relationships they all enjoyed with that advisory firm went way beyond a normal commercial arms length venture. Indeed, it could be argued at times that Storm  acted as an agent for the Banks by seemingly taking on many of the responsibilities that the Banks had to their Storm customers. One aspect namely _“linked creditor”_ may be upheld when these relationships have been fully explored in Court. 

In my next posting, I will deal briefly with the issues from our side of the fence. For a fuller explanation of all the legal matters that I will be outlining in these postings, you are referred to my website:
https://sites.google.com/site/stormingonbanks/home


----------



## Solly (21 August 2012)

> *"Commonwealth Bank 'knew of Storm losses'*
> 
> LAWYERS say they have uncovered new information which proves the Commonwealth Bank knew Storm Financial investors would likely lose their money during the global economic meltdown."




Source : theaustralian.com.au


----------



## bunyip (21 August 2012)

Solly said:


> Source : theaustralian.com.au




In this article we see yet another attempt to blame CBA for not doing for Storm investors what Storm investors should have done for themselves.....namely, to assess the risk of their proposed investment before committing their own funds plus lots of borrowed money.

The banks are lenders, not business consultants. They have neither the time, the resources, nor the expertise to assess every business or investment proposal which they’re asked to finance.

It was within the capacity of every Storm investor to understand that if you mortgage your home to borrow heavily for stock market investment, and there’s a global economic meltdown, the stock market is going to take a heavy hit which will obviously put you in a perilous financial situation.
Why investors would need a bank to point this out to them is a mystery to me. To suggest that banks kept this information 'secret' is nothing more than the legal eagles clutching at any straw in an attempt to smear mud on the banks.
Investors need to take responsibility for researching their own investment proposals.


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## sailteam30 (22 August 2012)

You play your games, the banks play their games and the lawyers play their games - but hey its good "bank bashing" material a month out of court.

A friend of mine went to court many years ago and his summation of it all - they lied but we lied the BEST. 

What does that say of our justice system!


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## Frank Ainslie (22 August 2012)

Solly said:


> Source : theaustralian.com.au




Hi Solly,

This is most encouraging! Just another nail in the CBA's coffin. With the money Norris has now got, perhaps a pyramid for him would be more in order! His barn is certainly the biggest around!

As for the CBA, I can see them settling before this trial runs its course. 

Frank


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## Solly (22 August 2012)

Frank Ainslie said:


> Hi Solly,
> 
> This is most encouraging! Just another nail in the CBA's coffin. With the money Norris has now got, perhaps a pyramid for him would be more in order! His barn is certainly the biggest around!
> 
> ...




Hi Frank

Yes, I can see that there are very interesting times ahead. I share your view that some participants may be eager to settle before a long and protracted public trial eventuates. Maybe it is better to keep some matters off the public record, not to have the body of evidence displayed and then have determinations made for others to scrutinise.

I again find Bunyip's view interesting. I understand that the matters before the bench make no reference of the failure of any actions that investors were bound to have performed.

I hope that the pending outcomes are beneficial to those affected.

S


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## Ijustnewit (22 August 2012)

Solly said:


> Hi Frank
> 
> Yes, I can see that there are very interesting times ahead. I share your view that some participants may be eager to settle before a long and protracted public trial eventuates. Maybe it is better to keep some matters off the public record, not to have the body of evidence displayed and then have determinations made for others to scrutinise.
> 
> ...



+ 1


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## doobsy (23 August 2012)

Might as well dive back in.

I am with bunyip. I read that story and this is what I take from it:

1. "Keeping secret the impending risk of economic meltdown" - No storm investor was paying any bank for advice. They were paying Storm. Not like Storm clients were excluded and all other investors were told of the "impending risk". Does that make them liable for every client who had invested through them or one of their subsidiaries? Pretty sure if there was no loan involved they are still invested. What if the "impending meltdown" did not eventuate and they were all told and all sold out. Would they then be liable for lost opportunity? Bunyip is correct. It is the investors money - take advice from whereever you like but the decision is yours.

Google search "economists predictions all ordinaries 2008" and see the smattering of predictions from markets heading to 7000 points to the smarties who got it right but underestimated and thought we might be about where we are now. NO ONE said 3100 lows.

2. Even if you prove UMIS then the argument has to be had as to who was in charge of the investment strategy for the UMIS. I cannot see how ANYONE can possibly pass the buck from storm to the banks on this count.


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## doobsy (23 August 2012)

Oh, just an example of how stupid the argument really is.

I have a client with over $4M in his SMSF. You will all be happy to know he pays me less than $3,000 for purely technical and strategic advice. Why, because he has 90% in the market in top 200 stocks. This generates an income of around $200,000. He and his wife spend about $120,000 per annum.

His portfolio value during the crisis dropped to about $2.7M at the worst time. His income at it's worst was $180,000. 

Even assuming some expert knew of the "impending meltdown" and how nasty it would be is it good advice or bad advice to tell him to ride it out?

My advice - ride it out - the portfolio is designed up to provide income (tick) and growth over time (still waiting) but in retirement 90% of the focus is income. He did not have to sell a single share. He actually used the $60-80K extra to buy more shares through the process. That is a portfolio that is doing exactly what it should do in all conditions. If the income suddenly dropped by a half then you may need to re-consider but even then how much of the capital are you eating into and for how long?

Storm portfolios were designed to be sustainable in markets going north. When they went south or sideways the costs build in (advice, borrowing) made them too expensive. Trying to say they should have been told to sell by the people who never ever ever offered them investment advice is dumb.

The banks will laugh and should point straight to the defense that EC, JC and the other advisers are using - look at the SOA, look at the review meeting notes - we showed them projections that included what would happen if markets dropped and how far they would have to drop before a margin call would be placed. Clients were aware at all times.


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## Frank Ainslie (23 August 2012)

doobsy said:


> Oh, just an example of how stupid the argument really is.
> 
> I have a client with over $4M in his SMSF. You will all be happy to know he pays me less than $3,000 for purely technical and strategic advice. Why, because he has 90% in the market in top 200 stocks. This generates an income of around $200,000. He and his wife spend about $120,000 per annum.
> 
> ...




Doobsy & Bunyip

If “The banks will laugh…” as you say and they have nothing to answer for, why is it that: 

1.	The CBA offered a $200 million dollar settlement to its Storm customers in 2009?
2.	ASIC (the appointed Regulator in Australia) is litigating against them for UMIS, breach of contract (banking codes) linked creditor and breaches of the Trade Practices Act?
3.	The Law firm representing us have employed some of the best legal minds in this country who have advised them that our case is solid?

What some doom and gloom merchants on this Forum think about our chances _“doesn’t amount to a hill of beans” _quite frankly.  It is not a question of whether we have a case but rather what wrongdoings will be proven, and the compensation that will be forthcoming as a consequence. To suggest that the Banks do not have a case to answer knowing what has transpired and the evidence on hand is somewhat puzzling? Let's see what plays out in Court! I think you scoffers will be in for a bit of a shock.  

Bunyip has said, “The banks are lenders, not business consultants. They have neither the time, the resources, nor the expertise to assess every business or investment proposal which they’re asked to finance.” That may well be but banks are expected to conduct their business in a professional and honest way. They have adopted banking codes to ensure that their approach to their customers is ethical and above board. There was nothing ethical or honest about the way the banks in conjunction with Storm went about their business with their Storm customers. 

If people were to transact their business dealings in our society without the protection of the law as Bunyip seems to suggest commercial anarchy would reign supreme. _“Let the buyer beware!”_ is okay as long as the buyer is fully aware of all the facts and knows exactly what he or she is buying. Once _“misrepresentation”_ enters the equation, then this simplistic attitude is no longer applicable. Further, it should never be condoned by our acceptance of such behavior.

Bunyip has also said, “_To suggest that banks kept this information 'secret' is nothing more than the legal eagles clutching at any straw in an attempt to smear mud on the banks.”_ No, my friend, it is not! Acting in an unfair, unreasonable, harsh or oppressive way, or a way that is contrary to the concepts of fair dealing, fair-trading, fair play, good faith and good conscience is termed _“unconscionable behaviour”_. Anyone that suggests otherwise is either completely out of touch or is trying to introduce polemics to try and stir the pot? I thought by now we had all progressed beyond this point? Let’s try and deal now with the facts instead of making unsubstantiated statements that are clearly intended to bait rather than produce anything meaningful!

Yes, you are all entitled to your opinions but let’s get beyond arguing about the righteousness of banks. The world is a financial basket case today because of banks. If you don’t get it now you never will.


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## pilots (23 August 2012)

Dodosh, 100PC correct, the only people making money out of this now is the lawyers, what  happened the storm holders is still going on today, you will all ways get suckers, and you will ALLWAYS get people who will milk the suckers. The storm holders have no hope of getting any money back from the big 4.


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## doobsy (23 August 2012)

Wow - the Frank of old back in full force. Not actually reading what people say just jumping up onto that high horse without thought.

The article is about whether CBA knew the markets were going to tank and the impacts that would have on Storm customers knowing how highly geared they were.

So the argument is:

1. Just how much did they know? Based on Comsec (CBA) Cheif Economist Craig James' track record (there is even a spoof website on how badly he gets it wrong) they didn't know squat. My old boss was talking it down more than any bank was (it is in their interests to talk it up so people invest and they make fees) - does that make him liable in some way? There may have been some in the CBA who were nervouse but I bet not a single person thought markets would correct by 50%.

2. Even if they did think markets would correct by 50% - so what!!!

They did not offer the advice. They had nothing to do with the investments put together. As I mentioned in my example is it their responsibility to tell EVERY person who was invested that they thought markets would correct and they should sell?

What about other investments? If they lent money to a business to start a restaurant on the Cairns Esplanade and it had been going well for 2 years from 2005-2007 is it the banks responsiblity to tell them we might have a financial crisis in 2008 and the AUD was going to climb from $0.70 to $1.10US to make the impact twice as bad? 

The banks will laugh because they had NOTHING to do with the investments. You could have been advised by Storm to puchase Australian Corporate Bonds with the monies lent to you by the banks. That would have resulted in small losses initially followed by a bull run. Is it up to the bank to tell you not to invest in bonds? Shares? an Investment property? your best mates business enterprise? 

The lawyer in question has a snowballs chance in hell of making this stick as what the bank thought of markets is immaterial unless they are the contracted adviser to the client. They weren't, Storm were.

Frank your talk of 1,2,3 and settlements all is based around the agreed screw ups with margin calls and dodgey lending, nothing to do with the investment. And don't let ANY storm investor tell me they didn't know they were in 100% Aussie Shares as that was the whole sales pitch from wo to go. So I am pretty sure they all "knew all the facts" on that point.

The article is interesting but will be a dud argument.


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## Frank Ainslie (23 August 2012)

*“Let justice be done, though the heavens fall.” - (Fiat justitia, ruat coelum.) (Part 2)*

Rather than get into a series of pointless arguments about the rights and wrongs of those banks involved with Storm which seems to be the direction certain people on this forum are leading us in, I will state as I see the issues that have been established to date. But before I do, let me say this!

Doobsy! With respect you may be well versed in financial matters but you know very little about the Law it would seem. You have made some really wild statements in your recent postings that have no bearing on our case. They are based solely on investment principles which if the banks use your arguments will be laughed out of Court. For goodness sake, get off the “investment bandwagon”. This case has nothing to do with investment principles but rather with legal tenets enshrined in commercial and statute law and the wrongdoings that will be identified by our lawyers that relate to such.  If it were about investment as you suggest and the merits of such, we wouldn’t have a case and the Banks wouldn’t be before the Court! 

To consider our case objectively, you and others need to consider the known facts to date? Not something plucked out of the air but rather things we have all come to learn these past four years. I will state them now  for those that missed them the first time around or those that have failed to understand what the principles are and for that matter what really is at stake.  

Argue them by all means when replying but do so within the boundaries the laws of the land impose - not based on your own personal feelings dictated by some mysterious notion of right and wrong that has no place in any legal discussion of the issues involved. In other words, set aside your bias of all things ‘Storm’ including its clients’ lack of investment forethought for the moment and focus only on the facts in relation to the Banks' wrongdoings. 

I also respectfully suggest that you look up the finer points of the law both statute and common because any defense of the banks’ positions demand such! Frankly, “_you don’t have a snowballs chance in hell”_ of understanding the legal points involved until you do! . 

Here are some matters for your consideration that are simple enough. You will note by the way that they have  nothing to do with investing but everything to do with the law. The Banks guilt or innocence will be based on the law alone and that's how it should be.

*1. Contractual breach*
The CBA resolution scheme alone is an admission by that Bank of its guilt. Indeed, it has admitted as much  so where you get your _'holier than thou"_ view of banks from is beyond me? This should, of course, have been a beacon for the other banks to follow suit. I hasten to add however that the CBA's resolution scheme was such a dull beacon that the other banks missed it!

I now going to examine the legal issues (from our prospective) that relate to those Banks that were heavily involved with Storm Financial. In this posting I am going to consider contractual breach without boring everyone with the nitty-gritty. Consider it an overview at best! If you don’t agree with it, so be it but present a cogent argument rather than a personal opinion based on nothing substantive in law. 

The banks have to my mind breached our contracts with them in a number of ways. In other words they have not met their obligations to us under such contracts and by so doing they have violated our contractual rights. No matter how much the banks will protest (and those within our ranks that have decided that the banks do not have a case to answer) there is no escaping the fact that the banks involved with Storm have for the most part done the wrong thing by their Storm customers. The fact that only three of these banks are now currently being sued hinges more on expediency than it does on other banks’ wrongdoings. As they say in the Classics, “Their turn will come!” 

Much of what I have written about in relation to all the parties involved relates to the law of contract. This is an aspect of the law that I am most familiar with having had a grounding in commercial law early on in my career.  Having said that, anything I say is merely here say based on my understanding of the principles enshrined in contractual law. Certainly, they are not espoused by anyone to my knowledge other than myself and should therefore be consider as my personal opinion only, although I will preface that by saying that such opinion is informed! I would ask your replies to be likewise.

It should also be borne in mind that I have no access to the evidence other than that discussed in the public domain or for that matter the legal precedents and statutory laws that may well apply. Therefore, this overview will be no more than a superficial one and should be treated as such. Now that I have got this out of the way, let’s begin.

Contractual issues (breaches) form an important part of our claim against the banks. However, they are only one element of our case against the Banks because ‘UMIS’, ‘unlinked creditor’ and breaches of the ‘Trade Practices ACT’ also form a part of the total brief.

A breach of contract is defined in Law as a breach of a legal duty or failure to do something that is required in a contract. Breaches to be considered in relation to our agreements with the Banks will probably fall into the following:

* Breach’ - a failure to perform some promised act or obligation
* ‘Breach of trust’ - violation (either through fraud or negligence) by a trustee of a duty that equity requires of him
* ‘Material breach’ - a breach serious enough to destroy the value of the contract and to give a basis for an action for breach of contract
* Partial breach’ - a breach that does not destroy the value of the contract but can give rise to a claim for damages

Casting a giant shadow over all contractual issues will be the _‘Banking Codes’_ adopted by Banks that form an integral part of any contract between Banks and its customers. Why?  Because customers rely on both the conditions of contract and the Bank’s conduct which banking codes govern. These two aspects cannot in Law be isolated from one another as the Banks will shortly find out! Mind you, they have tried long enough to convince us otherwise.

There are two types of contracts or agreements in the frame. One is the ‘housing loan’ (low doc or mortgage) and the other is the ‘margin loan’. I will now discuss these separately:

Housing Loans

Statutory laws aside, a housing loan is a legal contract between the Bank (the Lender) and its customer (the Borrower) and it carries the same rights and obligations as any other contract. The Banks are particular vulnerable by their very nature when making such loans because their banking codes dictate that they must use due prudence when lending so that the borrower involved is not financially compromised. Indeed, any prudent Banker should not lend money to anyone that is a credit risk because it could cause a loss for its shareholders. However, we all know now that attitudes changed within the banking circles some years back when the financial markets were booming and Banks, throwing caution to the wind, jumped on the gravy train. The sub-prime fiasco is proof enough of this!

If anyone wants further proof of this, go to my website https://sites.google.com/site/boqnorthward/ which outlines the wrongdoings of the owner managers in the BOQ North Ward, Townsville. The CBA through its Colonial Home outlet was no different. 

I would also ask them to read the comments that have been made in the Media recently about low-doc loans and how they were used by Banks to circumvent their own lending requirements. Again, the BOQ led the way. Paperwork was altered (a criminal offence under The Crimes Act) so that internal credit “checks and balances” could be by-passed, incomes over estimated, liabilities understated and assets inflated. Indeed, in a number of cases, staff at the Bank just made it up as they went along.

Some think that it is up to the Banks to lend money because it is theirs to lend, and if they lose on the deal so be it! This is an erroneous argument because its not their money to lose and their own banking codes prohibit such an approach anyway. Of course, the Banks thought they were not really running any risk because they always had the borrowers’ houses to fall back on. Such items made a nice provision on their Balance Sheets under ‘Assets” until the market started falling out of the housing market and housing prices plummeted. Repossessed properties then quickly went from being assets to liabilities. We are now up to our armpits in the financial mess the Banks have created around the world because Governments have little control over them and they went on a rampage of greed. They make Cassimatis and company seem like rank amateurs.

When considering housing loans that were made to Storm’s clients or more to the point, the Banks’ customers, the relationship between Storm and these Banks will be thoroughly examined by the Court. It certainly was no _“arms length” _relationship as the Banks would have everyone believe. Its influence in persuading Storm’s clients to take out these loans will be a major consideration as will the promotion of Storm’s services by these banks. This should not be taken lightly because if pooling is proven for mutual gain, then UMIS will be a given. 

Then you have the small matter of the Banks not sitting down with the borrowers when making such loans but rather leaving it to Storm to do their work for them. Contractual obligations will figure prominently here! Need I go on or are you now getting the picture? 

2. Margin Loans
The relationship between these Banks and Storm will also figure in contractual breach where margin loans are concerned because it is obvious even to the most one-eyed among us that the Banks and Storm colluded in October and November 2008 to delay notifying their customers/clients (issuing margin calls) because they thought they could ride out the crisis. They (Storm and the Banks) basically gambled with our money! How can any bank justify issuing margin calls so many weeks after such should have been made in the first place? - (Macquarie Bank  – 3 to 4 weeks and the CBA 10 to 11 weeks) It will be interesting to see what the Court makes of that! _“Fair and reasonable! Give me a break!”_

The agreements between the CBA and Storm and the Macquarie Bank and Storm will also receive some scrutiny in order to gauge whether such affected the terms of the margin loan contracts between the margin loan borrowers and the Banks. Did these separate agreements (that were never part of the original margin loan contracts between the Banks and their margin loan borrowers) impact on the conduct of the banks and Storm in October and November 2008? I personally believe that they did by blurring the areas of responsibility and causing confusion. I also believe that the Banks could not assign their obligations over to Storm in this way (novation) without consulting with and obtaining the permission of the Banks’ Storm customers’ beforehand. The CBA's 18th May 2005 agreement between Storm and the CBA and the one between the Macquarie Bank that goes back even further will, I believe, form the basis of an unregistered managed investment scheme because its purpose was to pool for a common purpose. Whatever, these agreements are damaging pieces of evidence that will be discussed at length in Court and should have a marked bearing on any judgments made.

Then there is the little matter of the Banks selling out some margin loan customers that were not even in margin call or those that could have met a margin call if such had been made. 

There is no doubt that margin loans issued by banks have been an untouchable area to date. The Law has been uncertain and banks have played on this. However, the banks forget that margin loans are legal agreements and sooner or later someone was going to challenge the margin loan concept. We now have! The banks have relied on the inability of most borrowers to fight them under the Law because of the prohibitive costs involved so they haven’t worried until now. _“We have the deal so you can take it or shove it!”_ In fact this remains the banks’ attitude to most things when they are dealing with the public. Therefore, why people on this forum are still defending them is beyond me? Every day some bank or other is screwing someone. Don’t take my word for it. Read your newspapers or surf the Internet. I can give you a pile of cases if you want? 

In my next posting, I will deal with the subject of unconscionability and how it may have implications for our case against the Banks. 

You know the one thing that worries me. It's not winning but how long and how much it's going to cost just listing and broaching so many transgressions in a court of law. Schindler would have his work cut out matching such!


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## Julia (23 August 2012)

Frank Ainslie said:


> Doobsy! With respect you may be well versed in financial matters but you know very little about the Law it would seem.



Equally, with respect, you may have auto didactically acquired some understanding about some legal matters (though you have no legal qualifications), but you probably should cede to Doobsy the expertise in investment and financial matters, these being, as I understand his comments, all he is quite reasonably commenting on.


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## doobsy (24 August 2012)

Apart from a personal interest and a professional interest for ex storm clients that are now with my firm I really don't care apart from a hope that EC and JC will get some sort of punishment that reflects the seriousness of what they put people through.

Frank my last few comments have had NOTHING to do with the overall case. They were a comment on the argument put forward in the Australian article which I truly believe has no legs at all. I am not taking away from any other aspect of the current case as has been discussed to death.

I will be clear. I do not believe that the argument put forward by Barrister Tony Morris, QC has any legs. That is not to say the overall case is invalid, it is to say that you can only draw the bow so long. Trying to say the banks should have "pre-warned" Storm clients about an "impending (maybe/maybe not) crisis that might/might not wipe them out because they were stupid enough to double gear into Australian shares and just happen to have chosen that bank to facilitate the borrowing (home, margin, both) when they have an adviser they are already paying tens to hundreds of thousands of dollars to monitor their investments is a MASSIVE stretch.

You keep going on about buyer beware. Every Storm client signed each page of the SOA presented. Surely the bank was allowed to figure they knew what was going on and that they as owners of the investment and responsible for the debt and their advisers would be on top of the markets direction.

This still to today amazes me that people that in the most part had been so responsible all their lives, had taken risks but had controlled those risks, had borrowed but made sure they could always pay it off, had known where and how their money was or was not working and made changes could possibly think it is a banks responsibility to tell them not to be dip****s


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## doobsy (24 August 2012)

Actually stuff it - they did pre warn you - when they gave you all a margin call. It is not their fault you did not have the capacity to meet it. If Storm had not re-invested all distributions, not offered clients 30-40% in living expenses more than they needed or wanted, had chosen "just in case of an inpending disaster" to cash some down at 6000, 5000, 4000 points, or maybe not capitalise the interest then all Stormies would still be invested and slowly be riding things back up.

Was it the banks responsibility to tell clients not to do all those STUPID things as well?


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## pilots (24 August 2012)

doobsy said:


> Actually stuff it - they did pre warn you - when they gave you all a margin call. It is not their fault you did not have the capacity to meet it. If Storm had not re-invested all distributions, not offered clients 30-40% in living expenses more than they needed or wanted, had chosen "just in case of an inpending disaster" to cash some down at 6000, 5000, 4000 points, or maybe not capitalise the interest then all Stormies would still be invested and slowly be riding things back up.
> 
> Was it the banks responsibility to tell clients not to do all those STUPID things as well?




The storm clients was happy to go on funded expensive weekends, now that the tables have turned they are crying its not fair, or it's not my fault.  This whole nightmare was based on the ASX, what gos up, can also come down, I know, my super still has not caught up yet.


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## Frank Ainslie (24 August 2012)

*“Let justice be done, though the heavens fall.” - (Fiat justitia, ruat coelum.) (Part 3)*

*Unconscionable Conduct*

An article entitled _“Commonwealth Bank knew of Storm losses” _that appeared in the Australian  has provided the catalyst for an awakening on this forum. The game is now afoot once again!

In this article it states that _“LAWYERS say they have uncovered new information which proves the Commonwealth Bank knew Storm Financial investors would likely lose their money during the global economic meltdown.” _It also goes on to state that _“Mr Morris told the court he would be arguing during the trial in September that the bank had acted ‘unconscionably’ by keeping secret from investors details about the impending risk of the economic meltdown.”_

Mr. Tony Morris incidentally is one of the barristers (QC) acting on our behalf. He is reputed to be one of the best in Australia so one would think that when he makes a statement about the possibility of the CBA acting in an unconscionable way he would be taken seriously by members of this forum. The CBA obviously did because they tried to close this avenue down. However, it appears that there are some here that think they know more than he does?

_“To suggest that banks kept this information 'secret' is nothing more than the legal eagles clutching at any straw in an attempt to smear mud on the banks.”_ Bunyip

_“The article is interesting but will be a dud argument.”_ Doobsy

_“The lawyer in question has a snowballs chance in hell of making this stick as what the bank thought of markets is immaterial unless they are the contracted adviser to the client. They weren't, Storm were.” _Doobsy

Our case has long passed Storm by and it's time people realized this. The Banks are under the microscope now not Storm and that is where the focus should be. It’s all about the conduct of the Banks acting in conjunction with Storm and whether they were guilty of wrongdoing! I'm sorry to disappoint all the Storm knockers but that's where we are at the moment. The Courts will deal with the Cassimatises in due course. 

Readers will note that Bunyip and Doobsy in their postings have not given any sound reasons for dismissing the comments of an eminent QC other than suggesting that this is mud raking or we were not paying the banks for financial advice. What that has to do with “unconscionable conduct” beats me? Why they feel that they know more than Tony Morris is beyond me but I have no doubt that they will be endeavouring to explain themselves shortly! Meanwhile, perhaps they would care to read the following and grasp what “unconscionable conduct” in the eyes of the law really means and how it may apply in our dealings with the banks. 

Make no mistake, unconscionable conduct lies at the heart of our case, overlaps with some common issues such as contractual breach and if upheld, would be the worst possible result for the banks in terms of public relations. Will such be easy to prove? No it will not because there are a lot of grey areas when it comes to what is termed unconscionable conduct under the law. And ladies, you will not be finding it under "Fifty shades of Grey" which seems to be a very popular book at the moment. 

Seriously though, if the CBA knew well in advance (and it can be proven) of an impending meltdown and it did nothing to minimize its Storm customers’ risks, then this fits quite nicely into the framework of “unconscionable conduct” under the law. It may be grey but it's not that grey!

Remember this! The margin loans extended to the CBA’s Storm customers had dangerously high ratios. Add that to the length of time  it took the CBA to actually make margin calls (in many cases it didn’t) 10 – 11 weeks and you can arrive at only one conclusion. _“Guilty as charged!”_ To try and fob it off as Doobsy has done by saying, _“that it was immaterial”_ is completely and utterly wrong!

The impact of proving that “unconscionable conduct” existed for the CBA and others in terms of this case could be quite severe. The courts have long recognised the need to intervene to set aside transactions where one party has acted unconscionably.

What defines “Unconscionable Conduct” under the Law? 
The courts have described unconscionable conduct as:
* serious misconduct or something clearly unfair or unreasonable
* conduct which shows no regard for conscience 
* conduct which is irreconcilable with what is right or reasonable.  

Three sections in Part IVA of the Trade Practices Act address unconscionable conduct. They are SECTIONS 51AA, 51AB and 51AC. 

Section 51AB prohibits unconscionable conduct in consumer transactions”” that is, it relates to the supply of goods or services which are ordinarily acquired for personal, domestic or household use or consumption. It does not apply, for example, to goods acquired for resupply or to be used in a business capacity.Section 51AB provides that a corporation shall not, in trade or commerce, in connection with the supply or possible supply of goods or services to a person, engage in conduct that is, in all the circumstances, unconscionable.

Factors that are taken into consideration: 
 §	the relative bargaining strengths of the business and the consumer
 §	whether the business required the consumer to comply with conditions 
 §	that were not reasonably necessary to protect the legitimate interests of the business
 §	whether the consumer understood any documentation that may have been used
 §	whether the business used undue influence or pressure, or unfair tactics
 §	the price and terms on which the consumer could have acquired the same or equivalent goods elsewhere.

However, the court can take into account any other matter it considers relevant.

So how does all this apply to the Banks involved with Storm?

As I see it the following actions  or lack of may well constitute _“unconscionable conduct”_ by the Court as well as overlapping with contractual breach:

(a)	Unreasonable delays in effecting (and in some cases not effecting) margin calls.
(b)	Completing banking documentation relating to loans that were designed to by-pass credit checks to the detriment of the borrowers.
(c)	Pooling arrangements based on incentives that benefited the Banks and Storm rather than the customers/clients.
(d)	Selling down shares without giving the Bank’s Storm customers the opportunity to meet margin calls.
(e)	Increasing the risk to the Bank’s customers portfolios by leaving margin loan borrowers’ ratios at the high end in a volatile and falling market.
(f)	Assigning rights and obligations to Storm that effectively destroyed their customers’ portfolios.

I’m sure with a little more thought, further examples could be produced. However, this is enough to be getting on with!

There is another factor that may well feature when it comes to unconscionable behaviour and that is with regard to the age of the majority of people involved (about 75%) past retirement age. Did the Storm concept of which the Banks were a major part focus on a vulnerable sector of our society? The Court will not go lightly on the Banks if this can be shown. 

I'll close this posting by saying this. The banks are not above the law although they often conduct their business as if they are! To believe that banks are white knights that do nothing wrong is naive in the extreme. Only last night a program on TV spoke about cities in America whose councils speculated with Barclays and five other overseas banks in 2008. The losses they incurred (Baltimore was a case in point) are in the region of 300 trillion which makes our combined losses of 3 billion seem like chickenfeed. Get a grip people! Banks are bad news and have been since they were deregulated. Unfortunately, they are a necessary evil but see them for what they are: rapacious wolves!


----------



## bunyip (24 August 2012)

So the banks should have informed Storm investors of the risk, should they? The responsibility for risk assessment lies with the financiers, does it, not with the investor?
Does that apply to every investment and every investor, or only to Storm investors?

Grain farming enterprises can be financially decimated by drought, excessive wet weather, heat waves, frosts, locust plagues, wild pigs, insects, poor grain prices, rapidly rising costs.....suffice to say that the risks in grain farming are many. Does a bank have the responsibility to point out all these risks to every grain farmer who applies for a loan? Is a bank being deliberately secretive if they don’t point out the risks? 

A couple of weeks ago while holidaying in the Northern Territory, I drove out through the old Humpty Doo rice-growing fields on my way to the jumping crocodile cruise on the Adelaide River. The locals told me the fledgling rice-growing industry in the NT in the 1960’s was wiped out by millions of magpie geese, resulting in huge financial losses. Should the financiers of the project have been prosecuted for failing to assess the risk of farming in the top end? Or if they knew the risks, should they have been prosecuted for not making them known to the developer? How about the developer – did he have any responsibility to assess the risk, or was that the bank’s job?

Many houses were damaged or destroyed in the Queensland floods last year. Are the banks who financed those houses liable for prosecution for not pointing out the flood risk to the people who borrowed to buy the houses?
How about real estate investors in mining towns, many of whom are now in trouble on account of having paid inflated prices for houses that they’re now struggling to find tenants for due to mine closures and shrinking populations in some mining towns. Are the banks criminally negligent for not pointing out the risk of investing in a one-industry town? Were they being secretive if they failed to point out the risks? Or should the investors have assessed the risks for themselves?

Most of us on this forum have bought a house or two in our time. Did the bank who financed us point out the various factors that could adversely affect house values in future? 
If you buy a house in Darwin or along the QLD coast, do you think the banks will point out the cyclone risk to you? Should they have to? Do you, as the investor, have any responsibility for risk assessment, or is it totally the bank’s responsibility?

I agree with Doobsy – I can’t see a valid argument that banks were involved in some sort of cover-up about the risks that a global financial meltdown would pose to an investor who heavily geared into the stock market.
Nor can I see a valid argument that the banks have a responsibility to point out the risks in an investment. Investors and their advisers are the ones who should assess the risk, not the financiers.
Every investment carries risk. Prudent investors asses those risks before proceeding with the investment. *Careless and lazy investors do not. *
After all that’s transpired in the Storm debacle, we still see an underlying attitude among some Storm investors and their lawyers that somebody else should have done their thinking for them.

Like Doobsy, I’m not commenting on whether the overall case against the banks is valid. My comments are solely in regard to the comments made by the lawyer in that article.


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## Judd (24 August 2012)

So let me get this straight.  The argument is that the banks knew of the impending downturn and so were remiss in not advising clients of Storm Financial of this prediction, despite Storm Financial being paid by the clients to be their financial adviser.

I am a shareholder in various banks and in the light of the argument above, I am most grieved that the CBA and others did not write and tell me to sell their shares as “We're all dooooomed I tell ye.”  And that applies to every other listed company to which the banks may or may not have been the financiers of any debt facility.

Bugger, I'll need to start a class action now.


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## doobsy (24 August 2012)

_Seriously though, if the CBA knew well in advance (and it can be proven) of an impending meltdown and it did nothing to minimize its Storm customers’ risks, then this fits quite nicely into the framework of “unconscionable conduct” under the law. It may be grey but it's not that grey!_

I QUOTE CRAIG JAMES - SENIOR ECONOMIST at CBA

http://www.theaustralian.com.au/business/this-time-its-different-says-87-crash-victim-john-spalvins/story-e6frg8zx-1111114632595

http://www.theaustralian.com.au/business/bourse-gets-the-wall-street-blues/story-e6frgak6-1111115098151

http://www.news.com.au/business/share-market-expected-to-bounce/story-e6frfm1i-1111117029277#ixzz1U6ycyyPJ

Others can be found at http://www.simplesustainable.com/topic/4221-craig-james-predictions/

Not sure the muppets at CBA saw anything that was coming.

Lets for arguments sake look at what would have happened if they had advised clients:

1. Storm is pissed when they get 3000-4000 phone calls asking if they should be selling down. Based on advisers response during the crisis a graph is wheeled out showing markets heading north and clients accept the adviser knows best.

2. Clients sell out - what if the bank got it wrong and Craig James got it right. Class Action for lost growth anyone?

3. BY LAW - You cannot give advice in this area unless you meet the "know your client rule" and the client has engaged you as an adviser. ASIC charges anybody?


_Remember this! The margin loans extended to the CBA’s Storm customers had dangerously high ratios. Add that to the length of time it took the CBA to actually make margin calls (in many cases it didn’t) 10 – 11 weeks and you can arrive at only one conclusion. _

OK, sorry but pretty sure by the time clients hit margin call territory the market had already fallen 40%+. Not sure that comes under "impending". Pretty sure the crisis had arrived.


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## bunyip (24 August 2012)

Judd said:


> So let me get this straight.  The argument is that the banks knew of the impending downturn and so were remiss in not advising clients of Storm Financial of this prediction, despite Storm Financial being paid by the clients to be their financial adviser.
> 
> I am a shareholder in various banks and in the light of the argument above, I am most grieved that the CBA and others did not write and tell me to sell their shares as “We're all dooooomed I tell ye.”  And that applies to every other listed company to which the banks may or may not have been the financiers of any debt facility.
> 
> Bugger, I'll need to start a class action now.





LOL....nice one Judd!
Let's all start a class action for all the times we've invested money and our horrible, nasty, sneaky, secretive financier has failed to inform us of the risk!
Hell, we're only investors - it's completely unreasonable to expect us to look into the risks before committing our and the bank's money. That's the bank's job, not the investor's. 
As Frank pointed out in one his posts several months ago....._'Investors don't need to be prudent and cautious'!_


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## bunyip (24 August 2012)

doobsy said:


> OK, sorry but pretty sure by the time clients hit margin call territory the market had already fallen 40%+. Not sure that comes under "impending". Pretty sure the crisis had arrived.






This pretty much fits in with what I've said previously......the aggressive levels of gearing ensured that Storm clients had already suffered catastrophic losses well before they got into margin call territory. Even if the margin calls been made on time by whoever had the responsibility to make them, the losses would have still be catastrophic. Once the market started heading decisively south they weren't facing an impending crisis, they were in the midst of a full blown crisis prior to margin call territory.
The much-vaunted 'safety triggers' that Storm supposedly had in place to protect clients were about as useful as a bikini in a snow field. 
Storm investors might have figured this out for themselves if only they'd done the most basic risk assessment of looking at past market crashes.
Investors are on dangerous ground when they expect others to do the risk assessment for them.


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## Julia (24 August 2012)

There were probably hundreds of thousands of investors and traders with margin loans.  Should they also be reasonably able to extract compensation from the banks who provided these margin loans for failing to warn them of the risks?


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## maccka (24 August 2012)

pilots said:


> The storm clients was happy to go on funded expensive weekends...




Pilots,

I am not aware of any funded expensive weekends that were offered to Storm clients.  Can you please elaborate as to when when you believe such a thing happened?

Cheers
Maccka


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## Julia (24 August 2012)

> In this article it states that “LAWYERS say they have uncovered new information which proves the Commonwealth Bank knew Storm Financial investors would likely lose their money during the global economic meltdown.” It also goes on to state that “Mr Morris told the court he would be arguing during the trial in September that the bank had acted ‘unconscionably’ by keeping secret from investors details about the impending risk of the economic meltdown.”



The above is a quote from your lengthy post above, Frank.
Could you please answer one simple question?  I would really appreciate your answer instead of your usual practice of ignoring some questions and just proceeding with another lengthy opinion piece.

If the bank was liable to inform Storm investors of "impending risk of economic meltdown" (and I've yet to find any justification that the CBA or any other bank had any such knowledge), would it equally be reasonable to assume they had the same obligation to so advise every single one of their customers to whom they had loaned money?


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## Solly (24 August 2012)

I have been a passive observer of this thread of late and have been hesitant in passing a view.

It amazes me that some participants of this thread display a lack of understanding of what are the current matters that are before the bench. 

There has been no breach of any law, act, regulation or subordinate legislation by an investor who made the decision to invest in Storm.

What is being tested is not the investors decision to invest.

Opinions of what actions investors should have taken are of no consequence, carry no authority and are not enforceable in regard to the current actions that are underway.

I am of the view that it would be beneficial if matters do go to trial. It would also be extremely beneficial to observe the transparency and the body of evidence.

S


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## bunyip (25 August 2012)

Solly said:


> I have been a passive observer of this thread of late and have been hesitant in passing a view.
> 
> It amazes me that some participants of this thread display a lack of understanding of what are the current matters that are before the bench.
> 
> ...




And I’m amazed, Solly, by your apparent lack of comprehension that this is a forum whose purpose is to encourage and facilitate discussion on a wide range of issues. The issue of this particular thread is Storm Financial. Accordingly, when I and others have an opinion on any aspect of the Storm case, *regardless of **whether or not it relates specifically to the upcoming court proceedings*, we’re at liberty to discuss it and give our opinions, *with or without your approval.*
Unlike you and Frank, some of us on here are not solely fixated on the coming court proceedings. That doesn’t mean that we have no understanding of the matters before the court, just that we’re interested in different aspects of the Storm situation to those that interest you and Frank.


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## Judd (25 August 2012)

Solly said:


> .....I am of the view that it would be beneficial if matters do go to trial....




Absolutely.  The outcome, whatever it may be for former clients of Storm Financial, will hopefully, in my view at least, have the beneficial results of determining the rights and obligations of all involved, ie lenders, borrowers and intermediaries such as financial advisers.

I am not particularly interested if former clients of Storm get any or no compensation.  Either they will or they wont.


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## Lone Wolf (25 August 2012)

Solly said:


> Opinions of what actions investors should have taken are of no consequence, carry no authority and are not enforceable in regard to the current actions that are underway.




Which is exactly why these opinions should be raised here in a public discussion forum rather than in the courts. 

There are two main topics at hand. One is the investor mindset at the time, why did they decide to do what they did and how do others learn from it? The second topic is on the current legal proceedings. Which of the two do you feel is more relevant to discuss in a public discussion forum? This thread is a good place to keep people informed of the current legal situation. It's also a good place for those interested in the law to discuss how it unfolds. But at the end of the day the opinions of armchair legal experts on this forum are irrelevant to the final outcome.

Where this thread could be far more useful is in teaching new investors browsing the forum how to avoid going to court in the first place. Which is exactly what some of the participants above have been trying to do. The decisions of investors will not be discussed in court because it's not illegal to make bad investment decisions. This is something that should be discussed here as this is the only place it will ever be discussed.


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## Ijustnewit (25 August 2012)

Lone Wolf said:


> Which is exactly why these opinions should be raised here in a public discussion forum rather than in the courts.
> 
> There are two main topics at hand. One is the investor mindset at the time, why did they decide to do what they did and how do others learn from it? The second topic is on the current legal proceedings. Which of the two do you feel is more relevant to discuss in a public discussion forum? This thread is a good place to keep people informed of the current legal situation. It's also a good place for those interested in the law to discuss how it unfolds. But at the end of the day the opinions of armchair legal experts on this forum are irrelevant to the final outcome.
> 
> Where this thread could be far more useful is in teaching new investors browsing the forum how to avoid going to court in the first place. Which is exactly what some of the participants above have been trying to do. The decisions of investors will not be discussed in court because it's not illegal to make bad investment decisions. This is something that should be discussed here as this is the only place it will ever be discussed.




I think the* Bad Investment decision* could be placed at the feet of the so called Professional Advisers that gave the Financial Advice and those who funded it. It should be illegal to make bad investment decisions with clients monies. However it is not illegal to make an Unlucky investment decisions . The clients I believe were Unlucky to choose Bad Financial Advisers. That's why they are before the Courts and not us. This Forum and all it's various opinions is fantastic. If it saves just one person the same grief and stress it's worth it.


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## Judd (25 August 2012)

Ijustnewit said:


> I think the* Bad Investment decision* could be placed at the feet of the so called Professional Advisers that gave the Financial Advice and those who funded it. It should be illegal to make bad investment decisions with clients monies. However it is not illegal to make an Unlucky investment decisions . The clients I believe were Unlucky to choose Bad Financial Advisers. That's why they are before the Courts and not us. This Forum and all it's various opinions is fantastic. If it saves just one person the same grief and stress it's worth it.




Indeed.  One of the factors as to why the court outcomes will be very interesting.

As I understand it, currently a  financial adviser provides advice or recommendation to the client who makes the decision whether or not to accept that advice.  Will it now be that the advice is the decision and, if so, is the client obliged to accept that even if he or she disagrees with the advice/decision?  Especially so since the financial planner has formal qualifications and the client none even if the client has, say, 20 years of investment experience and has only  consulted a planner to establish an SMSF.  Fascinating stuff.


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## Lone Wolf (25 August 2012)

Ijustnewit said:


> I think the* Bad Investment decision* could be placed at the feet of the so called Professional Advisers that gave the Financial Advice and those who funded it. It should be illegal to make bad investment decisions with clients monies. However it is not illegal to make an Unlucky investment decisions . The clients I believe were Unlucky to choose Bad Financial Advisers. That's why they are before the Courts and not us. This Forum and all it's various opinions is fantastic. If it saves just one person the same grief and stress it's worth it.




I don't intend to fight about it. I just thought Solly was a bit off the mark criticizing others for discussing matters unrelated to the legal case. Yes, the Storm model was flawed and the advisers should have known that it was flawed. The storm model was their bad decision. But clients made their own bad decisions that new investors can learn from. The three things most Storm clients did that I believe make it a bad investment decision:

1. Trusting someone else to manage your life savings without understanding / monitoring their actions is a bad decision. - Everyone knows that there are bad people out there. To the best of your ability you need to mitigate the risk of loss should you encounter one of these people. 

2. Investing in something you don't understand is a bad decision. If you don't understand how the underlying investment operates then you can't know the risks involved and you can't monitor the performance of your investment. Others will say that this was their advisers job - See point number 1.

3. Using a financial product you don't understand is a bad decision. People often take out loans without understanding the repayments required, the effect of leverage on their capital or the risks associated with the loans. Once again, see point 1.

So blindly trusting someone else to invest your money in something you don't understand using borrowed money on terms you don't understand is a bad investment decision. Not all storm clients did all three of these things, but most did at least one. If the advisers and lenders did do wrong then it will all come out in the wash and they will hopefully get a deserving punishment for their crimes. But even if they are found guilty and made to pay, that doesn't change the fact that the three things I listed above are bad decisions which should and could be avoided.

Remember that this forum is primarily here to educate people on financial matters, not to make people feel better about their mistakes. If I was having a private conversation with an ex storm client I'd never point out their mistakes to them unless they asked. There's no point rubbing salt into the wound. But this is a public forum that new investors come to learn form. Every time you try to lay 100% of the blame at the feet of the advisers and lenders it sends a message to new investors that it's unnecessary to monitor your own investments. That's not a message we should encourage. Unless of course you want someone else to get caught in the next flawed investment scheme that pops up, because I guarantee you there will be another.


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## Julia (25 August 2012)

Lone Wolf said:


> Remember that this forum is primarily here to educate people on financial matters, not to make people feel better about their mistakes. If I was having a private conversation with an ex storm client I'd never point out their mistakes to them unless they asked. There's no point rubbing salt into the wound. But this is a public forum that new investors come to learn form. Every time you try to lay 100% of the blame at the feet of the advisers and lenders it sends a message to new investors that it's unnecessary to monitor your own investments. That's not a message we should encourage. Unless of course you want someone else to get caught in the next flawed investment scheme that pops up, because I guarantee you there will be another.



+1.    This has been the case throughout this thread.  i.e. when any of us have contradicted the notion offered that the investors had no responsibility for accepting advice offered we have been targeted with abuse.
That doesn't help anyone and is entirely counterproductive.  As is criticism that ASF members are ignorant with regard to the exact nature of matters before the court.   Solly, you have previously been politely asked to share your understanding of what has happened in court and you have been unresponsive.  

I don't know, but I'd imagine that the recent publicity about how widespread were the dodgy lodoc loans would add to the Storm investors' case.   It's still totally unclear to me who was responsible for the altering of client details on the application forms.  I'd have thought this was a very significant point.


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## Solly (25 August 2012)

bunyip, 
The advice I have received indicates that the content of my posts are fully compliant. I have received no direction to the contrary. I have no understanding of the intent of your statement where you mention "approval".
Like yours, my amazement will always be, my amazement. You possess no direct knowledge of my fixations. 
I make no amendment or retractions to my initial post.

Lone Wolf,
Expressing amazement with respect to the understanding of the implementation of due process, is not expressing criticism. 

Julia,
It is not prudent for me, at this stage, to pass commentary on the daily proceedings. Although I do invite comment from other interested parties.

S


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## Lone Wolf (25 August 2012)

Solly said:


> Lone Wolf,
> Expressing amazement with respect to the understanding of the implementation of due process, is not expressing criticism.




You expressed amazement at the lack of understanding other poster have about legal matters when it was clear that they weren't discussing legal matters. My apologies if I mistook your comment as an attempt to belittle others.

Carry on.


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## jjtebj12 (26 August 2012)

Solly said:


> I have been a passive observer of this thread of late and have been hesitant in passing a view.
> 
> It amazes me that some participants of this thread display a lack of understanding of what are the current matters that are before the bench.
> 
> ...




100% agree! It is about the relationships and agreements that investors were not aware of. In so many ways I hope this goes the distance as I know the media will be crawling all over it as the evidence  will demonstrate the shocking behaviour by the banks and Cassimatis.  The evidence will outline everything. For the bank supporters-I  will await your comments in the coming months.
As for margin call - there wasn't one!  
Also if you think banks offer settlements because they are nice people, think again-they know they have failed, they just want to minimise the financial payout.


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## ASICK (26 August 2012)

Sometimes genuine efforts are made by a party to settle a dispute in order to limit potential damage to business even if that party feels it has no legal obligation to make such a effort (on the basis of 'no admitted liability' or an a 'without prejudice' basis) - sometimes when such efforts are made, the other party, to its detriment,  mistakenly sees the effort as a sign of weakness.

I sincerely hope that there is no mistake on the part of Storm investors who didn't take up bank offers in preference to a court order which may not be to their collective liking.


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## Ironhalo (26 August 2012)

Hi gang, it's been a while.

Frankly, I'm surprised this is still being talked about, and from about two years ago, it appears this forum thread moves in circles, with the same arguments rearing their head over and over again. Most Storm victims have simply realised that this is a lost cause and that putting faith in the legal system is just going to lead to disappointment.

I got out of Storm when the sheet was hitting the fan (after demanding to be sold out when I realised that Storm/the bank wasn't going to inform me of a margin call), but still came away with a loss. I've learned my lesson about paying for a service and not getting that service doesn't mean you are protected by law.

Personally, I want to see the Cassimatis's get their come-uppence. The only winners at the moment are going to lawyers sadly.


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## Solly (26 August 2012)

Ironhalo said:


> Hi gang, it's been a while.
> 
> Frankly, I'm surprised this is still being talked about, and from about two years ago, it appears this forum thread moves in circles, with the same arguments rearing their head over and over again. Most Storm victims have simply realised that this is a lost cause and that putting faith in the legal system is just going to lead to disappointment.
> 
> ...




Welcome back Ironhalo,

Regarding the only winners being the lawyers, I hold a different view. I believe that there will be some pleasant surprises forthcoming.

S


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## Solly (26 August 2012)

Lone Wolf said:


> You expressed amazement at the lack of understanding other poster have about legal matters when it was clear that they weren't discussing legal matters. My apologies if I mistook your comment as an attempt to belittle others.
> 
> Carry on.




Thank you Lone Wolf,

I suppose because I have had many touch points with the ongoing events in this saga, 
I have formed a view that not many others in this thread may share.

I have always held the belief that it is reasonable to expect that when a person engages a qualified professional organisation for expert advice, the advice offered should be of the highest impeccable standard. 

I realise others may feel that forums such as this offer a platform to educate, inform and bring awareness of the strengths and pitfalls of investing. Unfortunately I believe the real impact of platforms such as this are limited in their effectiveness by lack of reach.

My view is that a more effective form of protection can only be effected through legislation, regulation and enforcement. Then followed by punitive measures for breaches and non-compliance.

S


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## maccka (26 August 2012)

Solly said:


> Thank you Lone Wolf,
> 
> I suppose because I have had many touch points with the ongoing events in this saga,
> I have formed a view that not many others in this thread may share.
> ...




+1 Great post thanks Solly!

The value I see in all this going to court is that evidence which has previously been unavailable (and in some cases hidden) will be placed in the public arena.  This information can only better inform the legislation, regulation and enforcement processes.  

Here's hoping that Christmas 2012 wipes out the horror that Christmas time currently brings many Storm families.

Cheers
Maccka


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## Lone Wolf (27 August 2012)

Solly said:


> Thank you Lone Wolf,
> 
> I suppose because I have had many touch points with the ongoing events in this saga,
> I have formed a view that not many others in this thread may share.
> ...




I don't believe anyone disagrees with that. Yes, if you pay for a service you deserve to get what you paid for. Yes, if the service you receive does not match what was promised then there needs to be compensation. Yes, there should be regulation and enforcement of financial advice. And yes, forums like these have limited ability to educate people due to their lack of reach.

So here we are on this forum. You seem to suggest that attempting to educate people is mostly a wasted effort due to lack of reach. But this forum has absolutely zero impact on legislation. So do we give up trying to help people altogether and hope that someday legislation will actually protect people before they get hurt rather than after? It is my personal belief that many more people will be hurt by bad financial advice before your ideal world becomes a reality. So until that time, I am in favor of trying to reach out to the few people we can. If even one person avoids the hardship of financial devastation due to comments on this thread, is that not worthwhile?

I also believe legislation and regulation won't fix 100% of the problem. There is a lot of bad financial advice out there that's technically all above board. Many financial advisers are more like financial product salesmen. If you go in blind you could end up with something that is likely to damage your finances, yet at the same time it's a perfectly legitimate strategy that you won't be compensated for if it goes bad. How does legislation, regulation and enforcement help people who simply received bad advice?


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## Solly (27 August 2012)

Lone Wolf said:


> I don't believe anyone disagrees with that. Yes, if you pay for a service you deserve to get what you paid for. Yes, if the service you receive does not match what was promised then there needs to be compensation. Yes, there should be regulation and enforcement of financial advice. And yes, forums like these have limited ability to educate people due to their lack of reach.
> 
> So here we are on this forum. You seem to suggest that attempting to educate people is mostly a wasted effort due to lack of reach. But this forum has absolutely zero impact on legislation. So do we give up trying to help people altogether and hope that someday legislation will actually protect people before they get hurt rather than after? It is my personal belief that many more people will be hurt by bad financial advice before your ideal world becomes a reality. So until that time, I am in favor of trying to reach out to the few people we can. If even one person avoids the hardship of financial devastation due to comments on this thread, is that not worthwhile?
> 
> I also believe legislation and regulation won't fix 100% of the problem. There is a lot of bad financial advice out there that's technically all above board. Many financial advisers are more like financial product salesmen. If you go in blind you could end up with something that is likely to damage your finances, yet at the same time it's a perfectly legitimate strategy that you won't be compensated for if it goes bad. How does legislation, regulation and enforcement help people who simply received bad advice?




My concern is that many people only end up on forums such as this, post financial trauma, as evidenced by comments posted by some of those impacted by the Storm event. If the value of legislation, regulation and enforcement is seen to be diminished, I have no other suggestion that will offer protections. 

My view is that the only action that those who have been harmed by "bad advice" is to seek remedy through the judicial system. Maybe it is the simplified access to this system by those in dire need that would be most beneficial. Alas I am not a legislator, but improvements would be most welcomed.

S


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## bunyip (27 August 2012)

Julia said:


> +1.    This has been the case throughout this thread.  i.e.* when any of us have contradicted the notion offered that the investors had no responsibility for accepting advice offered we have been targeted with abuse.*
> That doesn't help anyone and is entirely counterproductive. .




Julia

This phenomenon has occurred throughout history - I believe it's called 'shooting the messenger'.


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## bunyip (27 August 2012)

Ijustnewit said:


> I think the* Bad Investment decision* could be placed at the feet of the so called Professional Advisers that gave the Financial Advice and those who funded it.





I think the bad investment decision can be placed at the feet of the people who made it – the Storm clients themselves.

The banks funded your investments at your request. But they didn’t make the investment decision for you. 
*That decision was made by you*, and you’d already made it before you approached the banks.

Storm gave you bad advice. But they didn’t make the investment decision for you.* The decision to accept their advice and act upon it was made by you.*


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## Julia (27 August 2012)

bunyip said:


> Julia
> 
> This phenomenon has occurred throughout history - I believe it's called 'shooting the messenger'.



OK.  I regret raising it again, however.  We've been through it over and over.  The thread had moved on to being more constructive so I apologise for discussing the issue again.


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## Frank Ainslie (27 August 2012)

*“Let justice be done, though the heavens fall.” - (Fiat justitia, ruat coelum.) (Part 4)*

*Linked credit provider *

Anyone who believes that the charges we and ASIC have brought against the CBA, the Macquarie Bank and the Bank of Queensland are frivolous and lightweight should think again. Certainly, the banks involved are taking these charges seriously because they fully realize that their past dealings with Storm could well be construed as unlawful in both statute and commercial law.

For those Storm investors that were caught up in this financial disaster, *(and I am really writing these postings for them*) they should take heart from the fact that ASIC has deemed that the Banks have indeed broken the law in a number of ways.  The very fact that ASIC is pursuing the banks should be proof enough to even the biggest skeptics that these banks have not always acted in good faith where we are concerned. The body of evidence that ASIC has gathered over the last four years (which has been made freely available to our legal team as well) combined with that our lawyers have accumulated will provide more than enough proof to substantiate all of these charges.

We should be mindful however that ASIC and our lawyers are coming at this from different perspectives. ASIC is concerned with breaches of Corporate Law whereas our lawyers will focus on the whole which encompasses breaches in commercial law. This dual approach does however provide us with a two-pronged attack much like a snake’s tongue. We hope the affect is just as lethal! 

Despite what some have suggested on this Forum in the past, the charges against the three banks in question are solid and real. The banks therefore have good reason to be worried.  Personally, I believe that the Banks may be able to deflect a few boulders if their lawyers are up to the job but some rocks will definitely get through. Just how damaging the impact of these will be for the banks concerned depends upon what is upheld by the Court. ‘UMIS’ and ‘Linked Credit Provider’ if proven will impact very heavily whereas some other charges will not be as damaging if upheld in terms of overall compensation. 

The charge of _“linked credit provider”_ if proven is one such charge that could do some real damage to these banks. This particular aspect has not got a real mention by me until now but that doesn’t mean that I do not consider it a serious threat as far as the banks go.

The relationship between these Banks and Storm is the key to establishing _“linked credit provider”_. Some on this Forum (for reasons I have not really been able to work out) have long argued that the actions of Storm should not reflect on the banks that Storm dealt with! The Law deems otherwise and so it should because the Storm debacle arose because ALL the parties involved did the wrong thing; not just Storm on its own! Storm did not operate in a vacuum but rather enticed investors with deals that the Banks endorsed and supported both by their extending loans and promoting the Storm brands. 

If we examine the relationship between the CBA and Storm for instance, it reeks of mutual interest and collusion. For one Colonial First State (CBA) was a fund manager for the index funds (Storm Badged Funds) so the CBA could hardly be called a disinterested party. At June 30, 2008, the Storm-Colonial (CBA) margin lending book totalled $1.1 billion and the _"traditional bank lending book" _totalled just over $1 billion. Storm-badged funds with Colonial totalled $1 billion. 

Then you have the CBA/Storm formulated agreement dated 18th May 2005 which dictated how they would jointly operate and administer their mutual CBA customers/clients. Macquarie Bank had a similar arrangement in place.

No, I would say that the CBA and Storm were up close and personal rather than on nodding terms, and had been for some years!

The Banks in the dock, namely the CBA, the Macquarie Bank and the Bank of Queensland continue to maintain that their relationship with Storm was an _“arm’s length”_ one and the business they received from Storm was treated no differently than that received from other quarters. Funny, that, when the known facts tell us otherwise.

The definition of an _“arm's length”_ relationship in law is a commercial arrangement between two parties free and independent of each other, and without some special relationship (such as being a relative for instance), having another deal on the side or one party having complete control of the other” In other words, no “undue influence” exists!

The relationship between the three banks in questions and Storm was such that they all became closely linked in their dealings with Storm and this could have serious ramifications for these Banks if it can be shown that they qualified as _“linked credit providers”_ under the Act.

The TRADE PRACTICES REVISION ACT 1986 No. 17 of 1986 - SECT 37 States among other things that:
_“a consumer enters into a contract with a linked credit provider of a corporation (in this section also referred to as the 'supplier') for the provision of credit in respect of the supply by the supplier of goods or services, or goods and services, to the consumer, and the consumer suffers loss or damage as a result of misrepresentation, breach of contract, or failure of consideration in relation to the
contract, or as a result of a breach of a condition that is implied in the contract by virtue of section 70, 71 or 72 or of a warranty that is implied in the contract by virtue of section 74, the supplier and the linked credit provider are, subject to this section, jointly and severally liable to the consumer for the amount of the loss or damage, and the consumer may recover that amount by action in accordance with this section in a court of competent jurisdiction.

(3) A linked credit provider of a particular supplier is not liable to a consumer by virtue of sub-section (1) in proceedings arising under that sub-section if the credit provider establishes-

(a)	that the credit provided by the credit provider to the consumer was the result of an approach made to the credit provider by the consumer that was not induced by the supplier…”_

I won’t bore you with the rest but you will get the general drift. 

Incidentally, it should be understood that any sections of the law quoted by me here or previously relates to the Law as it stood then. Some laws have been amended since 2008, no doubt, to plug up the “loopholes” that the collapse of Storm highlighted. For one, _"The ACL has replaced consumer protection provisions in 17 pieces of State and Territory legislation and in the Trade Practices Act 1974 (TPA). Related to these reforms, as of 1 January 2011, the TPA has been renamed the Competition and Consumer Act 2010 (CCA). Several provisions that were previously in the TPA have been repealed and replaced with new provisions in the ACL." _

These amendments will not affect what happened in 2008 or before because the Laws that existed then will be the only consideration as far as these matter are concerned.

So what does all this all mean for the banks if _“linked credit provider”_ is established? For one it means that if the Court decides that the CBA or any other bank involved with Storm can be classified as a linked credit provider, that Bank will become liable for the actions of Storm as well as there own. Any losses that resulted from such actions should then fall back on those banks – _“the consumer may recover that amount by action in accordance with this section in a court of competent jurisdiction”_. Just how much that will mean in the way of damages is anyone’s guess but it will be substantial. Indeed, the compensation that may be forthcoming if the charge of_ “unlinked credit provider”_ is upheld by the Court may be as good as or exceed that if UMIS is proven. Therefore, it remains an important part of our case and one, I feel,  that the Banks will have to defend vigorously.


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## ASICK (29 August 2012)

Good afternoon Frank - do you have a copy of the banks' defences you're able to post? Either way, I'd be interested if you'd give an outline of those defences. [blow by blow, claim <--> defence,  just briefly is fine]


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## Frank Ainslie (30 August 2012)

Solly said:


> Thank you Lone Wolf,
> 
> I suppose because I have had many touch points with the ongoing events in this saga,
> I have formed a view that not many others in this thread may share.
> ...




Hi Solly,

I couldn't agree with you more!

Some on this forum just don’t get it! In fact I have come to the conclusion from reading through the recent comments of some posters that they never will which makes my efforts to explain any wrongdoings in law that have taken place somewhat pointless. 

_“Never let the truth get in the way of my opinion!”_ seems the order of the day on this forum judging by the commentary to date.  It seems that people have reverted to their familiar mantra, _“If people had used their commonsense, none of this would have happened!”_

It’s not a lesson in the Law that people need here on this Forum but rather a history lesson on what actually occurred in 2008 that led to a financial meltdown around the world because this is the only way they are going to lose their naÃ¯ve view of banks and investment brokers. They also seem to believe that Banks are not subjected to the law in the same way the rest of us are so any law suits we bring against them are doomed to failure. In fact they are so insistent that we will lose our case against the banks that we might as well pack up and go home now. But then I forgot, few of us have homes to go back to!

You also have a certain number of people here that rather fancy themselves as financial gurus and are predisposed to expound their notions at the least pretext. They seem to think that only by our fully confessing to our complete lack of financial know-how will we "Stormies' receive absolution from them. After all, what happened to us  was all our fault because we should have been blessed with precognition and have armed ourselves with lie detectors before entering the badlands where shonky financial advisers and dubious bank managers reside.

Am I being silly! Quite but then so are they for expounding this nonsense and expecting sensible people to swallow it. The Law is supposed to protect investors from charlatans and thieves and if it doesn’t do so, it needs amending a.s.a.p. We are taking these banks to Court because they have broken the law. They wouldn’t be facing these charges IF the Court felt that the banks did not have a case to answer. The fact that ASIC is on board only lends weight to this argument. Whether some of those on this Fourm in their infinite wisdom decide otherwise is completely immaterial. So for that matter are their opinions because this will be settled in a court of law rather than in the public forum. We wouldn't have it any other way. 

Quite frankly, it is not the people that lost money in Storm or any would be investors that need educating on this Forum, but rather those that are prone to give financial advice but have yet not come to grips with what occurred in 2008 and why the financial meltdown occurred.  Until they do they will never comprehend the financial chaos banks around the world created because they were out of control and risk management played second fiddle to the bottom line. Neither will they comprehend the part banks played in that meltdown and the part the banks associated with Storm also played in the losses that Storm's clients incurred when that firm collapsed.

What also has become obvious to me is that some people that claim that they know better than we when it comes to financial matters are not across the consumer laws that govern such. If they were, they would better understand the issues at play here and we would have moved on a long time ago.


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## doobsy (30 August 2012)

Are you going to sue Lehman Brothers as well Frank?


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## Solly (30 August 2012)

When matters are next in Court

Proceedings are being held in public so anyone interested may attend.

4 September 2012
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

19 September 2012	ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


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## Solly (30 August 2012)

Frank Ainslie said:


> Hi Solly,
> 
> I couldn't agree with you more!
> 
> ...




Hi Frank

I sense that matters are now on the downhill run and resolution for the those affected is on the horizon. Laws are the rules that keep order in our society, they often overrule unqualified opinion and they bestow us rights. I look with great anticipation to the next phase in this saga. Sometimes when I've got some spare time and kicking back on the deck at the Broadwalk I find this refreshing reading. http://www.austlii.edu.au/au/legis/cth/consol_act/ea199580/ 
Maybe others would find it interesting reading as well 

S


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## Ijustnewit (30 August 2012)

So now they tell us.

http://moneyland.time.com/2012/03/29/your-financial-adviser-might-be-a-lemon/


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## Frank Ainslie (30 August 2012)

ASICK said:


> Sometimes genuine efforts are made by a party to settle a dispute in order to limit potential damage to business even if that party feels it has no legal obligation to make such a effort (on the basis of 'no admitted liability' or an a 'without prejudice' basis) - sometimes when such efforts are made, the other party, to its detriment,  mistakenly sees the effort as a sign of weakness.
> 
> I sincerely hope that there is no mistake on the part of Storm investors who didn't take up bank offers in preference to a court order which may not be to their collective liking.




Good evening ASICK!

Do you really believe that Banks will settle their disputes with us if they feel that they have nothing to answer for? The CBA Resolution Scheme was not offered by the CBA because it felt any compassion for those that lost money through Storm and were customers of that bank. Rather, it did so because it allowed them to offer 10% of what they churned out of their Storm clients and this seemed an easy solution for them and a cheap one as well. In this way, the CBA also sought to avoid the fall out in bad publicity that follows an event like this. But most of all, they decided to go down this road because they are fully aware (and have admitted as such) that they have been guilty of a number of breaches in statute and commercial law where Storm’s CBA customers were concerned. 

As to whether people were wise to settle or not that is a decision for each individual involved because everyone has a different set of circumstances to consider. Further, if they were strapped for cash they had little choice. The CBA knows this only too well and has used this as a hammer!

It is not easy to spend whatever money we have left on legal fees but that’s the only hope we have of obtaining justice. Sure, we can cave in and take the money! Sure we can sit back and let others find the money and wait for the compensation they obtain for us through the justice system. Sure we can sit back and curse our luck but that doesn’t get it done. 

For me personally, if we lose, so be it, but not to have tried at all, be deterred by detractors, decide that it’s all too hard or leave it to others is not in my nature. There are many among us like me that will see this through until the end, no matter how long it takes or whatever it costs. It's a matter of principle.

In a later posting you stated that _“I'd be interested if you'd give an outline of those defences. (blow by blow, claim <--> defence, just briefly is fine)."_

I have outlined some defences that I anticipate the banks might employ in my posting _“Let justice be done, though the heavens fall.” - (Fiat justitia, ruat coelum.) (Part 1)._ Then again, some members feel that the banks do not have anything to defend. They seem to feel that we would all be better off accepting the _‘status quo’_ rather than try to change it because that’s the way it is, and that’s the way it will always be! I often wonder how they would react if they found themselves in our shoes?  Would they be so conciliatory then? I doubt it!


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## Frank Ainslie (31 August 2012)

doobsy said:


> Are you going to sue Lehman Brothers as well Frank?




Hi Doobsy!

No because the queue would be too long! Here's some recommended reading matter for you!

"*What Have We Learned From Lehman's Monumental Failure?*

_"As the fourth anniversary of the failure of Lehman Brothers approaches, investors are no more protected than they were during the bubble mania.

The megabanks have gotten bigger as behemoths like Bank of America swallowed up troubled firms like Merrill Lynch. They’ve gotten so big that old Wall Street lions like Sandy Weill have called to break them up, which is one way to stem systemic risk."_

See full article at web site http://www.forbes.com/sites/johnwasik/2012/08/29/what-have-we-learned-from-lehmans-failure/

Some quotes from such"

_"Fiduciary duty, which would’ve compelled brokers to take legal responsibility for their recommendations, is seemingly dead in its tracks. ...the industry succeeded in curbing this profound investor protection rule, perhaps indefinitely."_

_"As if Wall Street wasn’t doing enough in its unrelenting fusillade to shut down any meaningful regulation, it got through a provision in the JOBS Act that will ease the rules for anybody raising money for initial offerings on the Internet. Now virtually anyone can become an investment bank. How’s that for democratic capitalism?"_

_"What Dodd-Frank would’ve done for investors is immeasurable. Brokers would be forced to act in their clients’ best interests instead of bowing to their firm’s bottom line. If fiduciary duty was in place prior to the crash, Lehman would not have sold billions of dollars of structured investments laughingly called “principal protected notes,” which swindled countless older investors thinking they were buying secure bank vehicles. Since the notes were linked to Lehman’s creditworthiness, they became worthless and thousands of investors are still trying to get their money back. Thousands of these products are still being sold by brokers and banks with scant warnings to investors.."_

_"Some of the most indelible insights on the Lehman failure have come from Lawrence McDonald, who wrote A Colossal Failure of Common Sense:"_ *Boy, that word "commonsense sounds familiar!*

_"...none of the Lehman brigands were ever sent to jail, nor any of their cohorts in the other investment banks and derivatives houses."

"...it wasn’t Lehman’s size and 40 times leverage that was the systemic problem. It was their $7 trillion of counter-party derivative risk, exposing banks across the world to incalculable destructive forces, this time the dominoes moved only inches apart."_ *My, my! It seems that we weren't the only ones overleveraged?*

_"Last week, 60-Minutes re-aired a shocking revelation that the SEC was actually inside Lehman Brothers for most of 2008. What did they learn? Did the critical information die on the vine?   Many people feel the reason there have been no criminal charges filed against Lehman executives is because the SEC is actually culpable, since they were inside the bank! In 2008, there were 3,798 people working at the SEC. Only 24 people were assigned to regulate the ten largest investment and commercial banks.” *Shades of ASIC here!*

"Unless the derivatives market is policed, banks are reduced in size and speculative trading separated from other banking activities, there won’t be a bailout next time. Then the global economy won’t be too big to fail and we’ll all get stung by the nuclear-force swindle"  _

We are talking here about America but “ditto” in Australia as well because “_we just love everything American!”_

*What message does this send to any would be investors out there! Don’t even think about it!* The cowboys are still operating in our financial sector in the guise of bankers and financial advisory firms - regulated by an uncaring government and policed by an omnipotent Regulator. How do you pick the good from the bad? You can't because they all look the same. Therefore, instead of contacting any of them, financial advisers that is,  my advice to any would be investors would be to visit a casino and have a punt. It’s the same thing really but at least you can watch your money being lost rather than have a bunch of clowns do it for you whilst you are kept in the dark.


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## Frank Ainslie (31 August 2012)

doobsy said:


> Are you going to sue Lehman Brothers as well Frank?




In my reply to this, make it "impotent" instead of "omnipotent" for ASIC. A senior moment!


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## Frank Ainslie (31 August 2012)

*ASIC - Is it time for a Royal Commission?*

_"Mackay grandma bankrupts businessman"
BY: ANTHONY KLAN From: The Australian August 28, 2012 12:00AM

AFTER presiding over seven multi-million-dollar company collapses spanning the past decade, failed businessman Leslie Freeman has been bankrupted by a Mackay grandmother._

See full article at
http://www.theaustralian.com.au/bus...upts-businessman/story-e6frg97x-1226459351188

Extract:
_“ASIC said it was not investigating Your Trading Room or Mr Freeman and that it planned to take no further action regarding the company or allegations Mr Freeman operated it while banned as a director.

That stance has angered YTR customers such as Lynne Fairhall, who has led the charge against the company and Mr Freeman and is in contact with many other customers associated with the scheme via internet chatrooms.

"What's the point ... if the authorities aren't willing to do anything about it when people alert them to problems and give them evidence?" Ms Fairhall said.

"Many of the group were saying why bother with contacting ASIC and filling out their forms given they're just a toothless tiger."

Up to 2000 small investors worldwide had paid between $5000 and $20,000 to YTR to be instructed in foreign currency trading, a high-risk strategy. Some investors invested $US300,000 or more with the company.

*The collapse of Your Trading Room raises serious questions for ASIC, such as why it registered a company that had no directors and no shareholders, and why it failed to monitor such a company despite its extremely close connections to Mr Freeman.*

ASIC repeatedly has refused to comment when asked those questions.”_


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## doobsy (31 August 2012)

Frank Ainslie said:


> Hi Doobsy!
> 
> No because the queue would be too long! Here's some recommended reading matter for you!
> 
> "*What Have We Learned From Lehman's Monumental Failure?*




Frank, I am well versed in the wall st failures but thanks for the link.

Not sure of the relevance. What companies based overseas do is up to them and their regulations. Maybe we should chase Bill Clinton as he has plenty of money and it was him that pushed for the investment banks to be allowed to gear at such levels in the hope "All Americans that want a home should be able to get one".

Aussie banks were geared around 4 x less due to great regulation by APRA and is the reason we powered through with such a small impact (in an overall sense).

I think I am done here, I will go back to viewing only for my clients sakes.

Good luck with your fight and chase to blame the banks for everything that has happened. As a final note I will re-instate my position:

The banks DO have areas that need to be answered and addressed but that does not include the overall strategy put together by EC and JC, adopted by the clients and put in place with the HELP of the financiers.

The banks are NOT to blame for the margin calls - clients or Storm could have sold out at any time - they are at fault for screwing up the margin call process.

Storm clients were all done in even if there had been no secret arrangements to change to margin call levels. They rode a falling market all the way to the bottom because their advisers were too stupid or scared to get them off a sinking ship.


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## jez47 (1 September 2012)

_The banks are NOT to blame for the margin calls -_

I thought the banks had a contractual obligation to issue a margin call. (Goodridge case comes to mind).
Lack of margin call is also one of the grounds Levitt Robinson is suing CBA.


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## Frank Ainslie (2 September 2012)

doobsy said:


> Frank, I am well versed in the wall st failures but thanks for the link.
> 
> Not sure of the relevance. What companies based overseas do is up to them and their regulations. Maybe we should chase Bill Clinton as he has plenty of money and it was him that pushed for the investment banks to be allowed to gear at such levels in the hope "All Americans that want a home should be able to get one".
> 
> ...




Doobsy,

_“Not sure of the relevance. What companies based overseas do is up to them and their regulations.” _

The GFC started in the States but its affects were felt right around the world because the banks in the States set the trend for banks globally and when they went under, the domino effect kicked in. To try and isolate what happened in the States from the rest of the world is therefore like trying to say that Adam fell from grace without Eve’s intervention. If you believe in all that to begin with, that is?

_“Good luck with your fight and chase to blame the banks for everything that has happened.”_

Anyone who reads back through my posts can hardly construe that I have let Storm off the hook where blame is concerned. In fact I’ve been one of their most vocal critics. So to suggest otherwise is somewhat bemusing. No one in their right mind would blame the banks for everything! It takes two to tango and Storm and the banks were pretty nifty at it. They must share the blame equally!

_"The banks DO have areas that need to be answered and addressed but that does not include the overall strategy put together by EC and JC, adopted by the clients and put in place with the HELP of the financiers."_

When people on this forum discuss these matters they tend to forget that the financial world was a different place back in 2008. Then it was the norm for banks and financial advisers to play hard and fast with investors money. The advice Storm gave to its clients to over-leverage their assets by taking out unnecessarily risky loans wasn’t in and of itself illegal. Certainly, it was _“bad advice”_ but Storm’s directors and the Banks have not ended up in Court because they simply gave _“bad advice”_. If that were an offence half the financial advisers in this country would be locked up by now! 

It is also a fact that the Banks mixed up in this debacle were never paid to give out financial advice as you have been quick to point out. So why then, you must ask yourself, have Storm’s directors and the Banks aligned with Storm ended up in the dock? I would have thought that people like yourself that have a vested interest in this matter would be curious about that? Particularly so when the Regulator, ASIC, has laid such charges! Yet, you persist in your argument that the fault really lies with the investors who believed in what Storm offered.  

If the strategy that Storm used or the way the Banks went about supporting that strategy transgressed the laws that have been put in place to protect investors, then those in the dock will be found guilty. On the other hand, if they behaved within the confines of the law they will not. It’s as simple as that! 

There are no _“maybes”_ or _“only if I feel like it”_ options open to people where the law is concerned, nor should there be. There is, however, doubt where we are concerned because nothing is simple in law and sometimes it is subjugated by money and influence that can ride roughshod over people’s rights. We can but hope that this doesn’t happen here.

_“Storm clients were all done in even if there had been no secret arrangements to change to margin call levels. They rode a falling market all the way to the bottom because their advisers were too stupid or scared to get them off a sinking ship.”_ 

I don’t believe that Storm or the banks _“rode a falling market all the way to the bottom because their advisers were too stupid or scared to get them off a sinking ship.”_ I think they knew what a wonderful vein of gold they had found and didn’t want to let it go. Therefore they gambled that the markets would come good. When they didn’t the likes of the CBA jumped ship and laid all the blame on Storm. They have been doing so ever since.

_"The banks are NOT to blame for the margin calls - clients or Storm could have sold out at any time - they are at fault for screwing up the margin call process."_

You make it sound as if Storm alone was on the sinking ship. You make no mention of the banks’ responsibilities to make margin calls not only when such are considered warranted but also in _“reasonable”_ time. Not in _"their own good time"_ when the water has closed over their customers' heads! According to your argument Storm was in a position to dictate to the banks what they should do. That will be the day!

I’ll go along with one thing though! There is no question that because many investors in Storm were over-leveraged and were therefore in the _“high risk”_ category, the GFC would have been terminal in many of their cases irrespective of what the Banks could have done. However, this is not about what the banks could have done but all about what they didn’t do at the end of 2008. Combine that with their wrongdoings when handling their Storm customers’ monies and you arrive at where we all are today.

I believe there are some (I think you are one of them) on this forum that think it unfair that so many investors were wiped out in 2008 when the share markets collapsed and yet those that were in Storm appear to have a second chance. 

Frankly, I believe that the only reason Storm’s clients were any different from the rest was in the sheer weight of numbers. I believe there are many poor devils out there that have a case against their financial advisers and the banks that lent money at that time because recklessness was rife within the financial sector then. Unfortunately for them they are isolated and are bereft of the means to fight back. We that were in Storm do have the numbers and collectively we have found the monetary means to litigate. That, and that alone is why we have made it this far and they have not. It has nothing to do with justice and everything to do with being able to pay so that justice can be served. That, unfortunately is the way our society works.

There are also many on this forum that have pushed the barrow that “Storm investors must be held responsible for their own actions” because did they not arm themselves sufficiently with the necessary financial awareness to see through these nefarious schemes that Storm and its buddies in the Banks had concocted for mutual gain to the detriment of their clients/customers”. 

In business there is a maxim! _“If you know nothing about the business your in, either get expert advice or don’t have a bar of it!”_ We ‘Stormies’ now know that the so-called _“expert advice”_ we obtained at the time from qualified professional financial advisers was tainted because they had ulterior motives for giving out this advice. The financial sector was replete with such individuals at the time so Storm was not alone. Does that situation still exist? Probably because the will to change from within seems somewhat lacking. 

If we ‘Stormies’ had been astute as many here claim we should have been, then we should have seen through Storm’s overtures. _“Beware the Greeks bearing gifts!”_. Certainly, if we had been educated beforehand in _“criminal profiling”_, which is now a must do course for any would-be-investors, then we might easily have perceived that our financial advisers were shifty characters who could not be trusted. Actually I remember saying to Helen at the time, _“Drummond’s eyes are to close together and he keeps saying ‘sux’ instead of ‘six’”_ A clear indication to my mind that he was another malefactor from the land of the long white cloud. 

Is this deep mistrust of _financial advisers” _that Storm and it cohorts has engendered in our psyche justified? I believe it is because the term _“professional”_ and those that operate within the financial sector do not seem to equate. A professional is defined as follows:

_“Of, relating to, engaged in, or suitable for a profession: lawyers, doctors, and other professional people.
Conforming to the standards of a profession: professional behavior.
Engaging in a given activity as a source of livelihood or as a career: a professional writer.
Performed by persons receiving pay: professional football.
Having or showing great skill; expert: a professional repair job.”_

When anyone hangs out their shingle professing to be a _“professional”_ having gained the appropriate qualifications that evidence such, it is reasonable to assume that he or she has these attributes? I don’t believe any amount of training given to would-be-nvestors would prepare them for spotting shonky financial advisers. 

_“No, but the advice they handed out was so off the planet that no one with an ounce of common sense would have believed it!”_ I can hear ‘Bunyip’s wheels ticking over as I write.

As I remember our money was invested in the entire market. For an index fund to _“go bad”_, it requires the entire market to go bad as it did in late 2008. No one could foresee the way the market would collapse. Certainly, not the Banks it appears who kept lending and the financial advisers that kept advising people to invest whilst black clouds were gathering. Why then should Storm’s investors have been any the wiser?

_“Storm over-leveraged their clients to unacceptable levels which any fool knows is courting disaster.” _(Again, Bunyip, I am anticipating your next response!) Really! Perhaps someone should have told Lehmann Bros and the rest including some of the largest banks in the world because they were the biggest offenders where over-leveraging was concerned in 2008 and the years before.

_“Who would take out an investment loan on their house?”_ (Bunyip! How many out of three did I get right!) The banks such as the CBA and the Bank of Queensland considered it safe enough because they had no qualms about lending money to people on their houses even when the borrowers had little or no collateral and were in their dotage. 

So, if it was all right for them, and professional financial advisers told clients to invest in this way why now claim that Storm’s investors were taking unacceptable risks and should have known about it whilst excusing banks from any blame?   I’ve heard no one so far condemning the banks for doing the same? Oh, but I forgot! They are immune from criticism because they are the _“untouchables”_ that operate outside the law. Funnily enough, that’s exactly what they did in our particular case and they are about to find out just how sacrosanct they really are!

So what am I really saying? If you want to advise any would be investor on this forum how to avoid what we Stormies experienced then you need to identify the real culprits and the reasons why this all occurred. Not seek to blame those that were the victims but examine the behaviour of those that are now before the Court. Until you fully understand what they have done and how it affected the investments of those Storm’s clients who were the Banks’ customers, you will never be able to identify and come to grips with the Storm saga. Yes, there are lessons to be learnt but you need to understand the reasons why the Storm occurred before you can comment on how to avoid another one. 

One more thing! We paid a great deal of money for professional financial advice. Therefore, our actions thereafter in following that advice can never be the issue in this debate because we acted solely on that professional advice. Therefore, the focus for any debate on Storm and the Banks should never centre on those that were deceived, but rather on the actions of those that did the deceiving; namely Storm and the Banks. In other words, we need to identify the real villains rather than pick on those that got caught in the cross fire.


----------



## Julia (2 September 2012)

What exactly is the point of repeating yet again everything that has already been alleged several times before?
Maybe it's like so called positive thinking, i.e. if you repeat something positive to yourself sufficiently often, you imprint on your brain the indelible belief that it is so.

Not saying any Storm investor is doing this.  I'm just puzzled about the apparent need to continue repeating the same stuff.

Good, Frank, that you recognise that large numbers of ordinary people have seen their asset base diminished significantly because of the GFC .  Some of those people, at least, have as a result engaged in some financial education and realised it's not especially complicated or difficult to acquire sufficient understanding of financial markets to avoid being burned again.


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## Lone Wolf (2 September 2012)

I regret making my recent post. Nothing more can be achieved here. Frank's primary concern is bringing the banks to justice, my primary concern is preventing people from being in the situation where they need to be involved in legal action. But since Frank has touched on the very point I was making I'll have one last go.



Frank Ainslie said:


> The advice Storm gave to its clients to over-leverage their assets by taking out unnecessarily risky loans wasn’t in and of itself illegal. Certainly, it was _“bad advice”_ but Storm’s directors and the Banks have not ended up in Court because they simply gave _“bad advice”_. If that were an offence half the financial advisers in this country would be locked up by now!
> 
> ...
> 
> There is no question that because many investors in Storm were over-leveraged and were therefore in the _“high risk”_ category, the GFC would have been terminal in many of their cases irrespective of what the Banks could have done.




This was exactly my point and you obviously agree. Even if Storm and the banks had followed every letter of the law, many of the Storm clients would still have gone down the drain. The advice was just that bad. So should criminals be prosecuted for their crimes? Absolutely, go get em. But it doesn't solve the problem that no amount of laws will protect people from bad advice. That's where people need to learn that you can't trust others with your life savings. If you don't have the time to research the business yourself then don't do it.

I personally lost money in 2008 by taking my advisers advice to leverage up to the eyeballs and "ride it out". No laws were broken in my case, just plain bad advice and I made a poor business decision when I agreed to it. What I want is for others to avoid what happened to me. Bringing the banks to justice in the Storm case won't help people avoid plain bad advice. This is more than simply a case of broken laws.



Frank Ainslie said:


> No one could foresee the way the market would collapse.




Why not? Market collapses have happened many times before. I was given plenty of reasons why it was unlikely to happen again, but you can't say you thought it was impossible when it stands out so clearly on any long term index chart. The risk was clear.

The issue isn't about investors having the ability to see through bad advice, it's very easy to see if you look. The real issue is that many people are under the misconception that "professional" advice is automatically good advice. They don't believe they need to understand because they paid someone else to understand for them. This is simply not true. I fail to see how anyone who has been burnt by bad advice can remain an advocate of blindly trusting in professional advice.

Another thing is that you tend to read things that aren't there. Just because people aren't attacking the banks on this thread doesn't mean they support the banks. Lets look at an unrelated scenario so you don't get defensive about it. People have lost large sums on money when their broker illegally used client funds to trade with, lost it all and closed up shop. The discussion then becomes - How do you avoid the risk of loss due to broker failure? Discussing this question does not in any way excuse the brokers illegal actions. They are criminals and should be brought to justice. But you can only change what you can change. You can't prevent people from breaking laws, do business long enough and you'll find a criminal. You can however take actions to minimise the potential loss should you ever encounter a criminal. Who wants to be involved in legal action? Are you having fun? I think not. That's all I'm trying to point out when I mention bad business decisions. There is risk involved in trusting professional advice. Good business practice would be to minimise that risk as much as possible.



Frank Ainslie said:


> If you want to advise any would be investor on this forum how to avoid what we Stormies experienced then you need to identify the real culprits and the reasons why this all occurred.




The reason why this occurred - Bad advice compounded by criminal actions. By your own admission, many Stormies would have suffered greatly even if the laws were followed. So to avoid what Stormies experienced requires more than simply identifying broken laws. It also requires the investor to take actions to either identify bad advice, or take measures to reduce the potential impact of bad advice.

Once again, to be perfectly clear - Any criminal actions in the Storm case must be uncovered and the appropriate penalties applied. But this alone will not prevent future losses due to bad advice.

There, I've said all I can say. Best of luck to you all.


----------



## Frank Ainslie (3 September 2012)

Hi Lone Wolf,

Your response is thoughtful and I have no doubt that you are sincere in your views. I have a somewhat different view however of where solutions can be found. For one, they cannot be found on this forum because the heart of the problem lies elsewhere. 

You stated in an earlier posting that, “_Where this thread could be far more useful is in teaching new investors browsing the forum how to avoid going to court in the first place.”_ How pray can you do that when bad financial investors do not have a label on them?

Basically your argument is that in the end it is up to would-be investors to make the right choices by listening to advice that they believe is sound and is in their best interests. In other words, they need to do some homework to avoid fly-by-nights whose schemes are obviously detrimental rather than beneficial. We assume by that you are referring to Storm among others. 

I have already expounded on why people invested using Storm so I do not intend to go over old ground. Suffice to say that I do not agree with your premise that in the end it is all up to the investors. Your recent comments suggest that the onus should be upon investors rather than the financial industry as a whole? This to my mind this is putting the _“cart before the horse”_ because it does nothing to rectify the problems that exist in the financial sector other than issuing warnings to would-be investors that they exist and how best to avoid them.

The GFC and the Storm’s of this world were not caused by the investors who were inadvertently caught up in them, but rather by the laxity that existed within the financial sector that allowed the excesses that led to our current state of affairs.

Why were the regulations in place at the time inadequate? Why was the professional indemnity insurance cover that Storm had taken out ineffective? Why did the Banks throw their credit control systems out the window? Why had margin loans flown under the radar as far as statutory regulations were concerned? Why was Storm allowed to give _“one fit for all”_ advice” to their clients? Why did ASIC compliance fail?
Why! Why! Why! These and other factors that contributed to this financial debacle are the questions that should be asked because they are factors that led us all here! 

_“…The real issue is that many people are under the misconception that "professional" advice is automatically good advice. They don't believe they need to understand because they paid someone else to understand for them. This is simply not true. I fail to see how anyone who has been burnt by bad advice can remain an advocate of blindly trusting in professional advice.”_

I was once a professional myself in the field of international logistics. I had the qualifications and experience to prove it and I was duty bound to give expert advice based on the needs of those that sought my advice. After all, that is what I had been trained to do. That was what was expected of me as a professional! Should financial advisers be treated any differently? The truth of the matter is that there is something sadly lacking where financial advisers are concerned. Their standards both ethically and professionally need to be raised to the acceptable levels of professionals in other industries. They need to meet investors' expectations as well as those standards demanded of any specialized field of endeavour. 

One more thing in this regard! My training included subjects such as ‘commercial law’, ‘law of carriage’ and ‘marine insurance’ that were not areas I would have any direct involvement in on an every-day basis because my field was freight movements. However, by studying such, it gave me an understanding of the basics of these subjects which led to an awareness of how they could impact from time to time on my profession. The Institutes where I did my studies included these in their courses for this reason. To my mind, there are many financial advisers operating today that do not seem to have a grasp of consumer laws because they have never been taught them. It’s time they were because they do impact on their business!

_“That's where people need to learn that you can't trust others with your life savings.”_

To my mind it’s a sad commentary on the financial advisory sector if you are now saying that you can’t trust them with your life savings. I thought that was part of their function? But then I get it! You mean find the ones that can be trusted! 

_“You can't prevent people from breaking laws, do business long enough and you'll find a criminal.” _

This is exactly why everything should be done to make it harder for those that take advantage of the loopholes in the financial sector. Simply accepting the _“status quo” _or saying that it is all too hard when something can be done about it will only encourage people to offend again and again.

_“I have always held the belief that it is reasonable to expect that when a person engages a qualified professional organisation for expert advice, the advice offered should be of the highest impeccable standard.”_ Solly 

”_My view is that a more effective form of protection can only be effected through legislation, regulation and enforcement. Then followed by punitive measures for breaches and non-compliance.”_ Solly

Solly has it absolutely right on both counts. The industry itself is where the problems lie rather than with those investors that place their trust in people that operate within it. Until these problems are fixed (and I doubt that they ever will be because _“loose allows abuse”_ and some just love operating in such an environment) no would-be investors can feel safe. There is no roadmap that by-passes “shonks”. Therefore, until the minefield is cleared of montebanks by introducing and enforcing controls and punishing those that transgress with appropriate sentences, investors will in many cases continue to be stung and another Storm is just around the corner.

_“…my primary concern is preventing people from being in the situation where they need to be involved in legal action”_.

I‘m posting on this forum for the same reason! We just see things differently where prevention is concerned. 

_“I personally lost money in 2008 by taking my advisers advice to leverage up to the eyeballs and "ride it out". No laws were broken in my case, just plain bad advice and I made a poor business decision when I agreed to it. What I want is for others to avoid what happened to me.” _

You are not alone. There are many on this forum including some that were not with Storm that have lost money because financial advisers gave them _“bad advice”_. To accept that _“bad advice”_ is something that we must live with  because standards are low is unacceptable. The truth of the matter to my mind is that the financial sector needs a drastic overhaul because it has been out of control for some time. Until those within accept that notion, my message to all would-be investors is this, _“Avoid the pitfalls of investing by keeping your money in a safe place! The financial sector is unsafe and will continue to be until they clean it up! So far there is little sign of that! ‘Prevention is better than cure!’”_

Hold that thought, you would-be investors and you can’t go far wrong! Until the people in the financial sector show some good faith by doing something about the problems that exist there, you should look elsewhere. They need your business to survive so it is up to them to get their house in order - not lecture to others on good housekeeping! 


_"There, I've said all I can say. Best of luck to you all!"_

Thanks for that! I respect your views! I just don't agree with them! Then again, if we all thought the same way, what a boring world this would be! Good luck to you as well!


----------



## Lone Wolf (3 September 2012)

I'm pretty busy at the moment so writing longwinded forum replies on topics that have been discussed to death isn't high on my list. But Frank, your reply in this case was so well mannered and sensibly constructed that I don't want to do you the discourtesy of not responding. So grab a coffee because this goes on a bit.



Frank Ainslie said:


> You stated in an earlier posting that, “_Where this thread could be far more useful is in teaching new investors browsing the forum how to avoid going to court in the first place.”_ How pray can you do that when bad financial investors do not have a label on them?




By listening to the advice, then going away and doing your own research to determine if the advice is sound. The question then is - What's the point of paying for advice if you're going to go to the effort of confirming it yourself? That's a different topic. You can't avoid bad advisers, but you can ignore bad advice.



Frank Ainslie said:


> This to my mind this is putting the _“cart before the horse”_ because it does nothing to rectify the problems that exist in the financial sector other than issuing warnings to would-be investors that they exist and how best to avoid them.




This is exactly what I want to see happen. You consider it putting the cart before the horse. I see it as a vital part of a two part solution. Even if you rework the financial advice industry you still won't be able to eliminate all bad advice. People need to be know that there is no guarantee that the advice they are given is good advice. In a way, I believe you are the one putting the cart before the horse. This forum has zero impact on the financial industry or the law. We can't fix that here. What we can do here is warn people about the sorry state the financial advice industry is in. Ask them to spread the word that people need to understand and monitor their own investments. If you come across a wet slippery patch on the floor what should you do? First you should warn others of the hazard so they don't get hurt by it, then you go off and find a way to eliminate the hazard.



Frank Ainslie said:


> Why were the regulations in place at the time inadequate? Why was the professional indemnity insurance cover that Storm had taken out ineffective? Why did the Banks throw their credit control systems out the window? Why had margin loans flown under the radar as far as statutory regulations were concerned? Why was Storm allowed to give _“one fit for all”_ advice” to their clients? Why did ASIC compliance fail?




All very valid questions that all need addressing. No argument there. My personal gripe with the system is that many people who call themselves financial advisers are simply financial product salesmen. They don't give you true advice based on your situation. They have a number of products on the shelf and they sell you the one that's a close enough fit. They also usually charge an entrance fee based on the total investment amount including borrowed money. I see this a a conflict of interests as the more money they convince you to borrow, the more they get paid. Believe me I have no love for the industry and it really needs an overhaul. However, there are also things individuals can do to avoid falling into the trap.



Frank Ainslie said:


> I was once a professional myself in the field of international logistics. I had the qualifications and experience to prove it and I was duty bound to give expert advice based on the needs of those that sought my advice. After all, that is what I had been trained to do. That was what was expected of me as a professional! Should financial advisers be treated any differently?




No, they are no different. But what stopped you from providing bad advice? Nothing but your personal moral code. Sure there are laws in place and there are consequences for you if you don't do your job properly. But that is merely a deterrent, not a prevention. Just as there were (or will be?) consequences for the managers of Storm. But you don't find out that a so called professional is rotten until it's too late. In all professions you occasionally hear of professionals who have been found to be incompetent or criminal. You'll never eliminate it. That's my message, you can't eliminate the bad, so take precautions against it.



Frank Ainslie said:


> To my mind it’s a sad commentary on the financial advisory sector if you are now saying that you can’t trust them with your life savings. I thought that was part of their function? But then I get it! You mean find the ones that can be trusted!




No! I'm certainly not saying find the ones that can be trusted. You can't tell until it's too late. I'm saying don't trust them blindly at all. Understand what they are doing with your money and monitor it. If you can't do that then don't invest at all. Financial advisers shouldn't be there to take over complete control of your money. They should be there to offer advice on how to best make use of your money. This is the public perception that I want to change. Go to people for advice by all means, but never, never hand over your money and walk away.



Frank Ainslie said:


> This is exactly why everything should be done to make it harder for those that take advantage of the loopholes in the financial sector. Simply accepting the _“status quo” _or saying that it is all too hard when something can be done about it will only encourage people to offend again and again.




Absolutely something should be done about loopholes in the financial sector. But telling investors that falling into the Storm trap was unavoidable doesn't help them avoid falling into another trap. I'm sure many Storm clients went to other financial advisers when Storm collapsed. Rather than simply hope that their new adviser is better, I'd like to think they took the time to understand the advice given by their new adviser and now monitor it regularly.



Frank Ainslie said:


> The industry itself is where the problems lie rather than with those investors that place their trust in people that operate within it.




The problem is that people are trusting in something that can't be trusted. There are two solutions, make the thing trustworthy (in my opinion it can never be 100% trustworthy), or inform people that it can't be trusted. Or better yet, inform people that it can't be trusted then work on making it more trustworthy.



Frank Ainslie said:


> my message to all would-be investors is this, _“Avoid the pitfalls of investing by keeping your money in a safe place! The financial sector is unsafe and will continue to be until they clean it up! So far there is little sign of that! ‘Prevention is better than cure!’”_




Exactly! This is the message Frank. This is what I want the public to know. One slight difference in opinion between us though - You believe it's possible to overhaul the financial sector in a way that makes it safe to blindly trust them with your money. I believe you will never achieve that level of security and we should encourage people to always take personal responsibility for their investments. In the same way that we expect people to take steps to secure their home.

I'll also say that people don't necessarily need to completely avoid financial advisers, they just need to understand that it is advice only. It's up to you to determine if that advice is good. If you are unable to make that call then stay away.

Well that was certainly more than I had intended to write. But I want us both to get our point across here (and I think we have) then we can go our separate ways. Honestly Frank, I believe there is very little difference between what you want and what I want. We both want to see the financial sector overhauled. We both want increased transparency and professionalism. We both want any criminal actions to be uncovered and criminals brought to justice. The difference seems to be that I want people to do everything they can to protect themselves rather than rely on others to protect them.

Maybe you'd call it pessimism, but I firmly believe that every time you rely on someone else to do something for you, you run the risk of them letting you down. So if there's something you can't afford to lose, protect it yourself.


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## Solly (4 September 2012)

> *"Fury as Commonwealth Bank sues Storm Financial victim*
> THE Commonwealth Bank has sued Storm Financial victims at the heart of a highly anticipated court battle set to kick off next week."




More by Anthony Marx @ couriermail.com.au


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## Solly (4 September 2012)

When matters are next in Court

Proceedings are being held in public so anyone interested may attend.

4 September 2012
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

19 September 2012	ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument


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## ASICK (4 September 2012)

Solly said:


> More by Anthony Marx @ couriermail.com.au




If I was an investor in Storm, I wouldn't take too much comfort from the SMH's biased reporting.   The bank is entitled to cross-claim (or, as the plaintiffs' lawyers call it, 'sabre rattling') - actually, I'm surprised it took so long.

The litigant who stated, "I asked our solicitors to send them a message: You have just driven a steel rod down the spine of my resolve." clearly hasn't recognized that his side has already 'driven a steel rod down the spine' of the bank's resolve.


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## Judd (4 September 2012)

ASICK said:


> If I was an investor in Storm, I wouldn't take too much comfort from the SMH's biased reporting.   The bank is entitled to cross-claim (or, as the plaintiffs' lawyers call it, 'sabre rattling') - actually, I'm surprised it took so long.
> 
> The litigant who stated, "I asked our solicitors to send them a message: You have just driven a steel rod down the spine of my resolve." clearly hasn't recognized that his side has already 'driven a steel rod down the spine' of the bank's resolve.




And then there is the possible appeals process.  Sends a shudder down my spine simply thinking about it.  Litigation is somethng I will avoid if at all possible.

But it will change nothing.  People will still hand their money over to others, it will be lost and again the wail will go up it wasn't my fault.  Usually it is because most are not prepared to put their feet up for a few hours or days, doodle around with numbers using a $10 calculator from the nearest supermarket - and think, what if?

Sad, because the vast majority have average intelligence although that does not necessarily translate to each has the same ability.  Maybe it is because some investors are curious about things and continually ask questions.


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## Julia (4 September 2012)

Judd said:


> But it will change nothing.  People will still hand their money over to others, it will be lost and again the wail will go up it wasn't my fault.  Usually it is because most are not prepared to put their feet up for a few hours or days, doodle around with numbers using a $10 calculator from the nearest supermarket - and think, what if?



+1.  As you suggest, Judd, a few simple "what if?" calculations will negate any suggestion that one needs to be a financial wizard to avoid getting into trouble.

The court case seems to have been a very long time coming.  Hope it's completely over soon so that people can get on with their lives.  Living with ongoing stress and anxiety is dreadful.


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## bunyip (4 September 2012)

Judd said:


> And then there is the possible appeals process.  Sends a shudder down my spine simply thinking about it.  Litigation is somethng I will avoid if at all possible.
> 
> But it will change nothing.  People will still hand their money over to others, it will be lost and again the wail will go up it wasn't my fault.  Usually it is because most are not prepared to put their feet up for a few hours or days, doodle around with numbers using a $10 calculator from the nearest supermarket - and think, what if?
> 
> Sad, because the vast majority have average intelligence although that does not necessarily translate to each has the same ability.  Maybe it is because some investors are curious about things and continually ask questions.




As always Judd, you’ve once again hit the nail on the head. 

No amount of legal action or legislation will eliminate the potential to get burnt if investors are not prepared to put at least a small amount of effort into appraising the advice they’re given.
Even the simple precaution of consulting two or three financial planning firms, rather than just consulting one firm and believing everything they say, would go a long way towards helping investors to spot the sort of flawed investment advice that brought Storm investors undone.


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## Solly (4 September 2012)

> *"Storm Financial trial could last five months: court*
> Lawyers will hold an emergency meeting this week in hopes of avoiding a five-month blow-out in the trial over the collapse of Storm Financial."




More by Christine Flatley @ brisbanetimes.com.au


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## Judd (4 September 2012)

Solly said:


> More by Christine Flatley @ brisbanetimes.com.au




If you have a God, pray to that entity some agreement is reached soon.

Those who prefer a vendetta, go for it but I really do wish that the small fry in this saga get some form of closure soon.  An elderly relative of mine who lives up past Cairns knows a few who are involved and she has told me that they are not traveling well at all.  Very much on the borderline health wise.  According to me Mama (she isn't but I call her that 'cause I love her), they understand that a lot of what has happened was of their own doing but still, not a pleasant way to be at the end of your years


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## Julia (4 September 2012)

Are any of the Storm investors involved in the class action against the banks able/prepared to say how it's being funded?  If it's going to run for five months or more, the cost is going to be huge.
Clearly the taxpayer is funding ASIC's action.  Are the legal firms acting on a 'no win/no fee' basis?
Or are Storm investors finding the funds to pay the lawyers regardless of the outcome?


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## maccka (5 September 2012)

Julia said:


> Are any of the Storm investors involved in the class action against the banks able/prepared to say how it's being funded?  If it's going to run for five months or more, the cost is going to be huge.
> Clearly the taxpayer is funding ASIC's action.  Are the legal firms acting on a 'no win/no fee' basis?
> Or are Storm investors finding the funds to pay the lawyers regardless of the outcome?




Hi Julia,

I'm pretty sure that I'm not breaking any confidences here.  The Storm investors are funding the action.  

Whatever the result I believe this set of class actions and legal actions will be earth breaking in many ways.  I strongly believe lots of information will come to light that the public doesn't know and banking/financial advice firms will have to change their practices as a result of it.  

Also, I believe the 5 months quoted includes the break over Christmas/New Year.

Cheers
Maccka


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## maccka (5 September 2012)

It seems that Macquarie Group and ASIC aren't enjoying a comfortable relationship at the moment. 

http://www.smh.com.au/business/regulator-eyes-millionaires-factory-20120905-25dpl.html

Cheers
Maccka


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## Julia (5 September 2012)

maccka said:


> Hi Julia,
> 
> I'm pretty sure that I'm not breaking any confidences here.  The Storm investors are funding the action.



Thank you, maccka.


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## jjtebj12 (5 September 2012)

maccka said:


> It seems that Macquarie Group and ASIC aren't enjoying a comfortable relationship at the moment.
> 
> http://www.smh.com.au/business/regulator-eyes-millionaires-factory-20120905-25dpl.html
> 
> ...





80% in breach - that sums Macquarie up!


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## Julia (5 September 2012)

jjtebj12 said:


> 80% in breach - that sums Macquarie up!



I'd be surprised if such behaviour is confined to Macquarie.


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## jjtebj12 (5 September 2012)

Julia said:


> I'd be surprised if such behaviour is confined to Macquarie.




Ralf Norris & others can confirm that when they are on the stand!!! Their answers will be interesting.


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## Judd (5 September 2012)

bunyip said:


> As always Judd, you’ve once again hit the nail on the head.
> 
> No amount of legal action or legislation will eliminate the potential to get burnt if investors are not prepared to put at least a small amount of effort into appraising the advice they’re given.
> Even the simple precaution of consulting two or three financial planning firms, rather than just consulting one firm and believing everything they say, would go a long way towards helping investors to spot the sort of flawed investment advice that brought Storm investors undone.




No I haven't, bunyip.  I probably was not very clear.

If people consider there is a need to consult with a financial planner then do so by all means.  I have no doubt that sound advice can and is being provided, such as the interrelationship between assets/income and Centerlink some of which can be complicated.

I just don't believe that people should had funds over and consider that is the end of the issue and all is well now and in the future.  That is being complacent and I disagree with that attitude.  No matter what course individuals take I simply feel they should not stop doodling around with the numbers using that hypothetical $10 calculator.

But I can understand the attitude as the populace is bombarded about seeking financial advice.  Silly example is an article I read while waiting for a friend to have coffee.  Article was about the cost of children, blah, blah, blah.  It concluded by suggesting that when a woman is pregnant she should consult a financial planner as soon as possible.  I would have thought that an obstetrician would have been more appropriate.

Almost every article on finance concludes with "consult a financial planner" as if that is the panacea for all your financial woes.  It ain't bloody true.

Only my view of life.  Each to their own.


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## Solly (6 September 2012)

maccka said:


> Whatever the result I believe this set of class actions and legal actions will be earth breaking in many ways.  I strongly believe lots of information will come to light that the public doesn't know and banking/financial advice firms will have to change their practices as a result of it.




Hi Maccka 

I've bookmarked the above paragraph. I hold the view that your statement is an accurate representation of outcomes.

S


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## Solly (6 September 2012)

*Cop v bank*


"He's the police officer used to taking on criminals and being faced with tough situations, but Sean Mcardle is tackling something that would scare the toughest of men ”” he is going into battle against the Commonwealth Bank."


A Current Affair  
Air date: Thursday, September 6, 2012 

http://soc.li/EGKqbbJ


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## jjtebj12 (6 September 2012)

Solly said:


> *Cop v bank*
> 
> 
> "He's the police officer used to taking on criminals and being faced with tough situations, but Sean Mcardle is tackling something that would scare the toughest of men ”” he is going into battle against the Commonwealth Bank."
> ...





If I were the banks I would be having urgent talks to have evidence not admitted. Lets the bombs explode!


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## Frank Ainslie (7 September 2012)

Hi Lone Wolf!

I've just finished my coffee!

Once again a very thoughtful reply. We agree on a number of points and where we differ you have explained your reasons fully. I can ask no more than that.

One last thing though. There are many (and you are one of them I surmise) that have assumed that the people that invested in Storm didn't do their homework beforehand. If they had, they would have avoided this mess, you believe! In fact the majority of people did shop around for investment advice including Helen and me. 

The insidious thing about Storm was that its strategy did appear sound. People tend to forget that Storm sold us something that turned out to be fiction rather than fact. They told us lies and did not do what they said they would do. How does one allow for that? That's why the directors of that firm have now been charged with deceptive and misleading practice as too have the banks. 

No amount of homework  will identify those within out society that do unlawful things. We can only ensure that when they transgress we have punitive measures in place to punish them. Let the punishment fir the crime rather than giving these people a slap on the wrist, I say. Further, the CEO's in banks that devise or oversee crooked practices should also not avoid punishment.  Unfortunately, many of them do! Unfortunately, at the end of the day, many in the banks who conducted the Storm orchestra will!


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## Frank Ainslie (7 September 2012)

maccka said:


> It seems that Macquarie Group and ASIC aren't enjoying a comfortable relationship at the moment.
> 
> http://www.smh.com.au/business/regulator-eyes-millionaires-factory-20120905-25dpl.html
> 
> ...




Hi Maccka,

We hear a lot about the CBA where Storm is concerned but little about the Macquarie Bank. It may well be, however, that the Mac Bank is in deeper than the CBA although that seems hard to believe. I know there were secret agreements between this bank and Storm but we have no real details of such.

Extract from this article:

_“For years, ASIC and the industry-funded Financial Ombudsman Service (FOS) had been fielding, and mostly fended off, complaints about faulty advice, breaches of the “know thy client” rule, failures to formalise advice via Statements of Advice (SOAs) and so forth.” _

I rest my case regarding my comments on the financial sector earlier. This says it all!

Extract from another source:

_“Sep 05, 2012 (The Australian - ABIX via COMTEX News Network) -- The Australian Securities & Investments Commission has begun an investigation into the private wealth division of Macquarie Group. It is thought that complaints prompted the investigation into possible compliance breaches by advisers between 2006 and 2008. The investment bank also faces litigation stemming from the failure of Storm Financial.”_

It looks as though ASIC has suddenly woken up to the fact that it has a duty to protect ordinary Australians rather than big business. Let's hope its resolve is not short lived!


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## Frank Ainslie (7 September 2012)

Julia said:


> Are any of the Storm investors involved in the class action against the banks able/prepared to say how it's being funded?  If it's going to run for five months or more, the cost is going to be huge.
> Clearly the taxpayer is funding ASIC's action.  Are the legal firms acting on a 'no win/no fee' basis?
> Or are Storm investors finding the funds to pay the lawyers regardless of the outcome?




Hi Julia,

SOME former clients of Storm are funding this action. The people that were devastated by Storm fall into the following category as far as our class action is concerned:

1.	Some were so ravaged financially that they ended up with a mountain of debt. These have no choice but to rely on ASIC as a possible avenue of compensation.
2.	Some consider that any money they have left is better spent trying to survive. They too rely on ASIC for compensation.
3.	Some have the money but prefer to let others fight their battles. It’s less expensive that way! These too rely on ASIC but have a bet both ways because it’s not costing them anything.
4.	Some have found the money through borrowing or by other means because they know that having “all your eggs in one basket” by relying on ASIC alone is unwise. If they lose, then they will fall into category one. However, they are willing to take this chance because they believe this is the best way of ensuring that they will obtain justice.

Helen and I are in Category 4. We that are in this class action are paying our own legal costs rather than employ a third party to fund us because “no win, no pay” cases see those that offer such recover more than those who use them! Because there are a number of us involved in this class action, our costs will be reduced. However, they will still be considerable! 

We have employed a lawyer firm with scruples so we trust our legal fees will be kept as reasonable as possible.

Some have asked, “_Why employ lawyers when ASIC is pressing charges?”_ The problem there is that it’s sometimes hard to work out whose side ASIC is on. We would love to be able to trust in the system but then again, that’s how we got here in the first place.

You have stated, _"Clearly the taxpayer is funding ASIC's action."_ We pay taxes among other things to fund bodies like ASIC so we can be protected from law breakers. We also pay for the boats that patrol our waters and pick up boat people when their boats sink under them. We could, of course, leave them to drown but that would make us as bad as the people that sell them the idea to start with and take their money. We might not agree with them for getting on the boats but we can't leave them in the water either. 

There's probably an analogy there somewhere between them and those that invested in Storm. If those on foreign shores did everything possible to ensure that they didn't get on the boats in the first place, would we be faced with this dilemma today? Conversely, if this and previous governments had done everything possible to have the necessary laws in place, would we _'Stormies' _be drowning now? 

As I've said before, you cannot allow for wrongdoings but you should do everything possible to make those wrongdoings harder to perform!


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## Julia (7 September 2012)

Thanks for the explanation of the funding of actions, Frank.

Be assured I have no problem with the taxpayer funding ASIC's action.  I hope ASIC are somewhat better prepared in this instance than they have been in some others.

Who actually hears the case?  Is it one judge?  A panel?


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## Harleyquin (7 September 2012)

I came across this website - I thought I'd seen and read everything pertaining to Storm.. but not this

http://www.independentaustralia.net...monwealth-bank-drives-investors-into-a-storm/

I thought you might be interested - IF you haven't already seen it.

The above information has just been passed onto me.

Well explained Frank, like you, we are also in category 4.  Our last legal team's 'no win no pay' scenario left a lot to be desired!!!

Admire Sean no end for standing up for what he believes in, and there's a lot of us who agree with him


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## Frank Ainslie (8 September 2012)

*THE DARK SIDE OF THE COMMONWEALTH BANK – PART TWO* For full article go to:
http://www.independentaustralia.net...monwealth-bank-drives-investors-into-a-storm/

Don’t forget to read Part One as well!

Extract:

_“This was intrinsically a ‘dodgy brothers’ scenario, guaranteed to fail.

The Storm Financial model represents variations on a theme of the two-tier property marketing scam. The model would have been impossible without bank funding, especially from the CBA. Without the CBA, other lenders (especially Bank of Queensland, Macquarie Bank) could not have joined in as marginal vultures. I have a colleague who is of the opinion that the CBA was the driving force in the transformation of Storm Financial from a two-bit provincial outfit to the large-scale ‘get rich quick’ enterprise; this is a not unreasonable proposition.

As I have written elsewhere:

‘The bank had been involved with Storm since 1994, but the transformed Storm was evidently viewed within the bank as a profit bonanza. The CBA fuelled Storm’s fantasy – home loans, margin loans through subsidiary Colonial Geared Investments, and ‘wealth management’ of the loans into index funds through Colonial First State. … The CBA’s desktop ‘VAS’ remote valuation system, introduced in March 2008, gave increasingly generous valuations of client property [albeit vigorously denied by the bank], readily leveraged into a higher margin loan and more fees for Storm.  The CBA extended Storm clients’ loan to valuation ratio to an unprecedented 80% plus 10% ‘buffer’, and a unique office outlet was established in Townsville to service Storm business. The Colonial arms even paid for a ‘gala ball’ in Italy in 2008 for the smooching of clients. Such was the success that the CBA yearly raised sales targets of the Storm-servicing cell, including for 2008-09.’

The CBA effectively defaulted the whole Storm apparatus in late 2008 (Storm went into administration on 9 January 2009). It sold many Storm clients’ portfolios without them receiving a margin call (the haggle over who was responsible for the margin calls is an irrelevant diversion). It unilaterally dropped the loan to valuation ratio on Storm loans from 80% to 70% in early December, triggering margin calls to clean out any remaining Storm clients. On 10 December the bank unilaterally shut down all Storm-badged products. Yet, as late as 29 October, the bank lent Storm a further $10.165 million to pay out a debt to Macquarie Bank and ‘provide funding for further acquisitions’ (Ripoll Storm Report, p.200). As the dominant lender, the CBA was ultimately in control of the whole Storm apparatus, indifferent to (benefiting from?) the loose cannon that was the Storm’s modus operandi.

The CBA has (atypically) acknowledged some culpability regarding its involvement, which has performed valuable service in quelling any potential political hostility. In June 2009 this:

‘The Bank acknowledges that the position in which some Storm Financial clients find themselves, while not caused directly by the Bank, involves the Bank to some degree. … Said CEO Ralph Norris: “In some cases we have identified shortcomings in how we lent money to our customers involved with Storm Financial … We are not proud of our involvement in some of these issues and we are working toward a fair and equitable outcome for our affected customers.”’

Well might the bank acknowledge culpability. But the CBA has claimed responsibility for some ‘irregularities’, nature unspecified, with promises to make amends, details unspecified. Townsville-based economic consultant Carey Ramm told ABC Radio:

“Certainly I haven’t seen all 2,500 clients of Storm [the number was closer to 2,800] that are held by the Commonwealth Bank, but in the vast majority of the loan documents I have seen out of the Commonwealth Bank, I have been amazed at just how bad the loan documentation has been and a vast majority of those will have to be written off.”

Simultaneously, CEO Ralph Norris claimed:

“The bank is not responsible for the financial advice provided independently by Storm Financial to the bank’s customers. That was clearly the responsibility of Storm Financial, a licensed financial advisory company.”

 The CBA’s David Cohen (appearing before the Ripoll Storm Inquiry in September 2009) maintained the mantra:

“… it needs to be recognised that there are other parties significantly involved in the hardship suffered by Storm clients. CBA is not responsible for either those parties or their contribution to the hardship being experienced.”

The CBA’s Matthew Comyn at the same hearings:

“It was not a relationship that ran to the highest levels of CBA. It was an association whereby Storm did refer customers to the CBA … The relationship was no more than a referral of business to us, and we in turn serviced the business.”

Journalist Ben Butler noted comparable disavowals in ASIC’s pursuit of the CBA in the courts (‘CBA links to finance group under scrutiny’, The Age, 6 September 2011):

‘… ASIC alleges CBA, together with Macquarie Bank and Bank of Queensland, were involved in running managed investment schemes, which are required to be registered with the regulator, in partnership with Storm. In a bid to show a managed investment scheme existed, ASIC alleges in its statement of claim the banks ”had a close commercial relationship with Storm”, and then goes on to list three pages of dealings and contact between the banks and Storm.

‘“The meaning of the term ‘close’ is unclear,” CBA says in its defence.’

Your Honour, we might have had several thousand children together but, really, there was nothing to it. On the contrary; the meaning of ‘close’ is utterly transparent. All power and no responsibility – the two-tier property marketing scam revisited.

Seasoned journalist Alan Kohler claimed, at the height of the dÃ©nouement in February 2009:

“Storm Financial in Townsville was not so much a Ponzi scheme … as a scandalous partnership between spivs and a bank, that should have known better, to place ordinary people in harm’s way.”

A bank, that should have known better, placing ordinary people in harm’s way? Unthinkable? Rather, Storm Financial was a scandalous ‘close’ partnership between low level spivs and high level spivs, with the latter institutionalising the spivvery on an industrial scale.

The CBA’s formal apology is just words. The Ripoll Committee swooned in gratitude:

‘The committee certainly welcomes the CBA’s readiness to admit its mistakes in the way it transacted business with Storm and Storm’s clients who are also clients of the bank. The committee appreciates the bank making the effort to establish an innovative and fast-tracked resolution scheme for affected clients.’ [par.3.118]

Craven. A few shekels aside, the bank has declined to give substance to the words by stymieing Storm clients’ claims. Witness the bank’s fight against two Sydney doctors, Mark Irving and Anthony Oliver, in the courts during 2011, with the bank arguing that margin lending falls outside the consumer credit code and so anything goes.

The regulators and the political class oblige. The Australian Securities and Investments Commission had earlier audited Storm Financial and given it the OK. ASIC’s submission to the Storm Inquiry was a shocker. It generalised ‘that the current standards in the advice industry are adequate’ (p.37). More, the submission tacitly acknowledges the retail investments sector as corrupted, yet it refers merely to ‘potential systemic issues that have arisen in relation to the role played by lending institutions in recent retail investor losses’ (p.87). Potential? Disgraceful. ASIC has since lifted its game, but many Storm victims remain disgruntled by the impasse.

As for the politicians, the November 2009 Ripoll Storm Report gave the CBA yet another imperceptible slap on the wrist: “The committee is concerned that close relationships and integrated systems, at least at the branch level, and perhaps in combination with bank sales and lending targets discussed at paragraph 3.54, may have caused some bank staff to lose sight of who their true customer was and to fail in their obligations under the Code of Banking Practice to exercise prudence and diligence in their lending decisions [par.3.52].” And that’s it. Margin lending per se is fine, buyer beware, but advisors and lenders should display professionalism in their relationships with clients. It will be business as usual. Fairfax journalist Michael West noted accurately that “This report carries all the weight and ferocity of a wet lettuce.

Colonial First State

If the CBA had really meant business, it would have acted to clean up the culture of its Storm agent, ‘wealth manager’ Colonial First State. No such house-cleaning has taken place. Journalist Colin Kruger elaborates on the essential character of CFS (Sydney Morning Herald, 21 February 2011), a piece that demands to be quoted at length, and the story is not pretty.

‘The Commonwealth Bank-owned Colonial [First State] has collected more than $17 million in fees from the Mortgage Income Fund since it was frozen more than two years ago, locking up $852 million of investor’s money. A year ago, rising loan losses led Colonial to wind up the fund as it could no longer pay distributions to investors. … In a statement the company said: … “The steps taken by us in managing the fund are in the best interests of investors as a whole.” ….

‘The financial statement shows the fund’s income of $14.8 million for the year was wiped out by a $17.2 million write-down in the value of its loans. Adding in $7.9 million worth of management fees paid to Colonial last year, the fund made a loss of $10.3 million. The losses decrease the chance of investors getting back their initial investment.

‘The accounts show the fund’s investments are worth $509.7 million, less than the $518.2 million needed to pay out investors in full. … Colonial has said it may take four years to wind up the fund and return money to investors.  Until then, Colonial will collect a management fee of 1.15 per cent of funds under management.’

Veteran journalist Robert Gottliebsen (Business Spectator, 28 October 2008) expressed shock that the “Commonwealth Bank [had] stepped back from the undertakings of one of its wholly owned subsidiaries.” Quite.

Said Gottliebsen:

“Among the likely consequences of the CBA decision is that all bank owned operations that are not directly part of a bank, including their finance companies, will be questioned.”

Not quite. The discretion available to Head Office with these ‘arm’s length’ relationship appears to be well understood upstairs. Nobody who matters, especially prospective customers looking for integrity in the financial services sector, has yet to join the dots.

The only thing that CFS has done since the Storm fiasco is to up its advertising budget, falsely and ludicrously claiming expertise in funds management.”_

Anyone who still thinks banks have clean hands in all this needs their head examined!


----------



## Frank Ainslie (8 September 2012)

*LAST BUT NOT LEAST - THE BANK OF QUEENSLAND*

It would be somewhat unfair of me to leave the Bank of Queensland out of this exercise when that Bank is one of the prime candidates for the ‘Storm Customers Busting Award’.

Rather than comment myself, I think it only fair that someone that had a franchise with that Bank speak on their behalf. Here is what that person recently told me (in emails) about the way this Bank went about its dealings with Storm and its former CEO’s involvement. I have omitted that person’s name to protect the source:

Date: Mon, 27 Aug 2012 18:56:30 

_“Dear Mr. Ainslie,
 I have been reading your websites re the Storm fiasco and certain of your comments, including quotes from the Hansard transcript, on Messrs. Liddy and Kangatharan's comments to the Committee.

I don’t know whether you actually captured the following passage however it very clearly states that the Bank had a formalised policy developed to deal with Storm applications and take into account the earning from the investment funds which were being purchased through Storm via a BOQ home loan. This was to facilitate loan approval and essentially stop the application having to be dealt with at BOQ HO on an exception basis.

CHAIRMAN””If you discount down to four or five per cent, how does a pensioner even cover the cost of the funds? How is that possible? How does that work in numbers? That $104,000 per annum would have been their total earnings from the portfolio

Mr. Kangatharan””To clarify, in terms of that discounting back, there was a policy variation that was applied and approved. Before that approval, if any of the income from the Storm financial plan was to be included in an application it would go through an exception process. That is where the independent head office staff in risk assessment would give authorisation for the inclusion of that income. Where that was the case, it is possible that it is more than five per cent that was actually included. In this particular case, it is quite possible that on a $712,000 investment that the return component was calculated at eight or nine per cent.

 In other words the Bank was clearly aware of the North Ward branch's activities and had developed policies to allow them to turn around loans quicker than normally might be the case.

In other parts of the Hansard report Mr. Liddy refers to the Bank's automated credit decision process for home lending as a branch's "delegated authority". A real delegated authority allows the branch to approve a loan without referral to a higher authority regardless of whether or not the loan is approved by the system._

Date: Fri, 31 Aug 2012 11:45:57 

_"Hi Frank,
We were told by the Banks that the co-owners of North Ward were the most successful OMB in terms of performance, ie new loan business. It was often the case that these guys were used as the role models for all aspiring OMBs to mimic.

How did they do it?

The Bank said they (the OMBs in North Ward) were always out of their offices visiting clients, getting off and on planes etc, etc. Note: no substantial reasons for success were ever provided just "fluff". If we did what the boys at North Ward did we would all be rich etc, etc.

Our own view, of course, is that this scruffy little branch which wasn't even on street level in Townsville (a small rural city in FNQ), could not have "honestly" produced these types of lending results without bending/shattering the Bank's policies.

For example, irrespective of what Liddy said it was a hard and fast rule of the Bank's that the branch had to interview any borrower on a face-to-face basis. We know this as the Bank knocked back deals for friends we had interstate as no face-to-face contact had occurred.

Secondly, whilst the OMB did not have a "territory" as such the Bank was not keen on local branches going interstate to get business.

These rules make good sense from a lending quality perspective.

OMBs were also not supposed to be dealing with brokers regardless of whether or not they received a commission. We were allowed to pay a couple of hundred dollars to introducers, eg real estate firms, accountants etc but were expressly forbidden to deal with brokers for housing loans. NB for certain types of commercial lending the bank still used various brokers to source new business but in mid 2004 stopped using any brokers for home lending applications. Home lending for the purpose of the discussion includes lending against the home for investment purposes. The Bank and not North Ward would have had to formally approve the document (not a Bank form) which the borrower provided to the Bank to allow North Ward to deal directly with Storm and not with the customer

So the North Ward branch breached a number of the Banks prime policies which were enforced against virtually all other OMBs.

It is inconceivable that the Bank did not know precisely what was going on at that branch (and possibly others) as, at least in theory, Liddy stated that HQ had to approve all loans. Kangatharan also stated that they had developed a process to streamline applications so they could be approved by the system.

Almost none of the OMBs we knew had the power to personally approve a loan application. It was punched into the Bank's auto approval system and if it was approved the branch had all the authority it needed. If the system declined the application then the branch could not proceed with the deal unless the defects in the application were corrected.

The system had checks built in to ensure that incomplete applications were not even processed - instead the system would highlight the missing data which had to be inserted before it would fully load up and assess the application.

If the application was declined then it had to be referred to a centralised credit unit, presumably in Brisbane, who would examine the application and revert to the branch for more information.

If the correct application details especially in relation to the borrowers assets and liabilities and income and expenses had been input to the system there is no way it could have been approved under normal circumstances.

For example, the Bank always wanted to know the reason for the loan although Liddy said he wasn't sure. (NB Elsewhere Liddy says he didn't even know what a margin loan was so pardon my scepticism). Good lending practice demands you know why a person is borrowing the money.

If its going to be used to repay other debt, buy a holiday house, investment property add an extension etc the Bank wants to know.

In the case of purchasing an investment property the bank wants to know all the details of the new property and discounts the rental flow to add a more conservative view of the additional income which will be produced  to balance off the additional loan repayments which are almost always higher if the maximum tax benefits are to be enjoyed. The bank would also want a mortgage over the new property. Even if the borrower already had a home loan with BOQ and wanted to release the equity to make the purchase they would have insisted on encumbering the new property.

In other words a very conservative approach.

Contrast that with the way Storm applications were handled and all the Bank's conservative rules go out the window.

There are a number of questions which need answering.

1. If the borrower owned a home free and clear and came to the Bank and asked for a loan of 80% of the value would the bank have provided it to them if their pension and other income would not cover the repayments. Answer is no.

2. If the same borrower approached with a low doc loan application which allowed 60% of the value of the property to be loaned would the bank do that for a pensioner? Not impossible but many questions would be asked. PS Low doc customers had to have, according to the Bank's own policy, an ABN. How many pensioners do you know who had one of these.

3. If a pensioner rocked up and asked for a $300k loan against their property and told the Bank they were going to invest the funds into shares through a margin lending program what would the Bank do? Whilst it cannot provide financial advice it would have to determine if the customer would be in a position to repay the loan that it was providing. If their pension entitlements precluded their capacity to pay the loan should be declined. 

Let's say they had the income to repay the BOQ debt then the application passed the first hurdle. The next question would be how high will the applicant gear the $300k loan using a margin facility. Let's say 3 times. The borrower now has a debt of $1.2m and assets of $900k in a share portfolio The property provides no income). The loan rate is always going to be higher than the deemed earning rate on the funds provided that the funds earning rates are assessed prudently. At that point the income/loan payment ratio fails the test and the loan should be declined. That's before you get into the margin call issues which I would bet were never fully understood by most borrowers.

4. How did the Bank get around this - by using the low doc process in which they had the borrower sign a statement that they had the capacity to repay the debt. This statement however in no way excuses the Bank's lending practices and its implicit requirement to deal with its customers appropriately. We often speculated how North Ward could write this volume of lending as they only had a relatively small staff - obviously if Storm completed all of the applications then all North Ward had to do was input them to the system and also fill in the blanks as required. An interview(s) with a client and preparation of an application and all the other docuemnts is a very time consuming job as the process always never goes smoothly

5 The reason the Bank entered into this arrange with Storm and BOQ did this is that it needed to lend as much money as possible and given that the margins on low doc loans were approx. 1% higher than the more competitive home product types it was profitable and very safe business as they only loaned 60% of the property value. They also knew that the types of borrowers involved were the solid, honest types who would do the right thing by the Bank even if they ate cat food for the rest of their lives.

6. In my view North Ward and the Bank were in this business completely together and both were fully aware of the risks that were being taken. At the end of the day if the share market crashed then they still had a mortgage on the borrowers property which they could always exercise and even if the property market crashed they had a 40% buffer.

7. Like most schemes founded on the connivance of the likes of BOQ and North Ward the customer was always the one to cop it sweet with all the other players getting away Scott free. I feel the Bank is the most culpable as it was in a position right from the start to deal with loan applications from North Ward/Storm in a proper manner and introduce policies to apply much more prudent rules to protect the Bank and borrower. That they willingly participated in this venture makes them the prime mover in the scheme and the most culpable."_

Date: Fri, 31 Aug 2012 19:18:17 

_"Hi Frank,

The other point I failed to mention is that it is my understanding that the lending volumes being achieved by North Ward were perhaps as much as 8 or 10 times better than the average lending performance for the balance of OMBs located throughout the country.

That is why Liddy made them branch of the year on a couple of occasions - no other reason.

In my experience when you have a branch, or anything else, outperforming the mean by that much you either copy exactly what the staff are doing to roll it out elsewhere so everyone can benefit or if you cant do that thoroughly investigate why such performance is occurring.

If, upon investigation you determine that the success is based on shonky practice then you either kill it or embrace it and tell no one the truth.

As I say, I think that both the branch and the BOQ are up to their necks in it.

There may have been one other branch in the network that had similarly high volumes and it was very suddenly and very unexpectedly closed without hardly any notice and no fanfare."_

Date: Sat, 1 Sep 2012 08:13:16 

_"Hi Frank,

I suspect that the rules (of the Bank) pertaining to low doc loans, under which policy , as I understand it, most of the investment loans were written, were changed as a result of the Storm fiasco.

It's important to note that the prime reason for offering low doc loans, other than the increased margin and lower risk (60% LVR) was to accommodate self employed customers who hadn't filed tax returns or who couldn't prove their incomes generally due to the nature of their employment and somewhat loose bookkeeping practices.

This is why low doc loan applicants had to have either an ACN or ABN (cant remember which).

In other words the low doc loan process was bastardised to allow pensioners, who could obviously prove their income with documentation and who certainly would not have not either an ABN or ACN, to borrow money without making a full application.

My gut feeling is that the Bank will try to use this line to say that they didn't know either the applicant's current or future income or expenses. That of course falls in a heap with Kangatharan's admission they developed a special policy to streamline these particular loan applications plus the other policy breaches I outlined in a different email.

In my view the North Ward office was in a position of knowledge when it came to understanding why and for what precise purpose the money they were lending was to be employed. Back to the low doc scenario, had they input the pensioner's income (provable) into the system the application would likely have been rejected as the income would have been too low to support repayments and other expenses. The bank's low approval system like every other banks' is a complex algorithm which determines the customers ability to make the payments and still have a life. Banks do this to ensure they are protected against risk and are seen to be responsible lenders.

Remember the low doc loan process bypasses all these safeguards.

To answer your question the low doc loan policy was "bent" by North Ward branch with the complete cooperation of the Bank in order to approve loans against real property which would not have been able to have been approved in most cases based on the pensioner's declared income. NB presumably not all applicants were pensioners. It would be interesting to see if the bank used the normal application process (ie not the low doc policy) for working applicants whose income would be sufficient to service the loan - if you could find such applicants it would go a long way towards proving the bank/North Ward was bending their own policies to ensure the loans were approved one way or another."_


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## Frank Ainslie (8 September 2012)

Julia said:


> Thanks for the explanation of the funding of actions, Frank.
> 
> Be assured I have no problem with the taxpayer funding ASIC's action.  I hope ASIC are somewhat better prepared in this instance than they have been in some others.
> 
> Who actually hears the case?  Is it one judge?  A panel?




One Judge Julia. From what we have seen so far he seems to be fair and reasonable. Certainly, he realizes that this is a complex case and if he doesn't get it right, the Banks will appeal his decision if it goes in our favour. They probably will anyway but it has to be on a point of law. I feel he is striving hard to avoid this happening.

Some info about the man that some 'Stormies' may find of interest:

_"John Edward Reeves (born 2 January 1952) is an Australian politician, lawyer and judge. He was a Labor member of the Australian House of Representatives from 1983 to 1984, a prominent barrister in Darwin afterwards, the author of the controversial 1999 Reeves Report on Aboriginal land rights, and has been a Judge of the Federal Court of Australia since November 2007.

Reeves remained a prominent figure in the Northern Territory legal community, serving as President of the Northern Territory Bar Association from 2000 to 2005 and Vice-President of the Australian Bar Association from 2003 to 2004. He also served as Deputy Chair of the Legal Practitioner's Complaints Committee, and as Chairman of the Northern Territory division of the Australian Red Cross. He was also appointed to the taskforce of the Northern Territory National Emergency Response in 2007.
Reeves was appointed to the Federal Court of Australia in November 2007, as one of the last judicial appointments of the Howard government. He was the first judge to be specifically based in Darwin, which had previously been served by interstate judges in an acting capacity. In March 2009, however, he was transferred to Brisbane, following concerns that the judicial workload in Darwin was not sufficient to warrant a resident judge, and a number of cases from which he had to withdraw due to potential conflicts of interest with his past legal work as a barrister.
Reeves is one of only six politicians to have served in both the Parliament of Australia and the Federal Court of Australia, alongside Nigel Bowen, Robert Ellicott, Merv Everett, Tony Whitlam and Duncan Kerr.
His notable decisions include (in no particular order); Stoddart v Boulton [2009] FCA 1108 regarding spousal privilege at common law in Australia and QGC Pty Limited v Bygrave [2011] FCA 1457 dealing with the role and registration of Indigenous Land Use Agreements. Reeves is currently the docket Judge for the Australian Securities and Investment Commission's litigation against the collapsed Storm Financial Ltd. The litigation also involves the Commonwealth Bank, Macquarie Bank and the Bank of Queensland. The case is due to be heard in the second half of 2012 and will involve Australia's most prominent barristers.
On 1 May 2009 Justice Reeves was appointed as an Additional Judge of the Supreme Court of the Northern Territory. Justice Reeves travels to both Darwin and Alice Springs in this capacity."

_


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## DocK (8 September 2012)

Frank Ainslie said:


> Hi Lone Wolf!
> 
> I've just finished my coffee!
> 
> ...



+1 Well said Frank.



Harleyquin said:


> I came across this website - I thought I'd seen and read everything pertaining to Storm.. but not this
> 
> http://www.independentaustralia.net...monwealth-bank-drives-investors-into-a-storm/
> 
> ...




Thanks for that link Harlequin - it made for enlightening reading!  I thought this bit deserved a direct quote as it speaks to the idea that the banks were simply carrying out business as usual and not an intrinsic, if not essential, component that the strategy revolved around:  (see next post)


----------



## DocK (8 September 2012)

Here's the quote (must have been too long for 1st post) 


> The Storm Financial model represents variations on a theme of the two-tier property marketing scam. The model would have been impossible without bank funding, especially from the CBA. Without the CBA, other lenders (especially Bank of Queensland, Macquarie Bank) could not have joined in as marginal vultures. I have a colleague who is of the opinion that the CBA was the driving force in the transformation of Storm Financial from a two-bit provincial outfit to the large-scale ‘get rich quick’ enterprise; this is a not unreasonable proposition.





> As I have written elsewhere:
> 
> ‘The bank had been involved with Storm since 1994, but the transformed Storm was evidently viewed within the bank as a profit bonanza. The CBA fuelled Storm’s fantasy – home loans, margin loans through subsidiary Colonial Geared Investments, and ‘wealth management’ of the loans into index funds through Colonial First State. … The CBA’s desktop ‘VAS’ remote valuation system, introduced in March 2008, gave increasingly generous valuations of client property [albeit vigorously denied by the bank], readily leveraged into a higher margin loan and more fees for Storm.  The CBA extended Storm clients’ loan to valuation ratio to an unprecedented 80% plus 10% ‘buffer’, and a unique office outlet was established in Townsville to service Storm business. The Colonial arms even paid for a ‘gala ball’ in Italy in 2008 for the smooching of clients. Such was the success that the CBA yearly raised sales targets of the Storm-servicing cell, including for 2008-09.’
> 
> ...



http://www.independentaustralia.net/2012/independent-australia-journal/investigations/commonwealth-bank-drives-investors-into-a-storm/


----------



## Lone Wolf (8 September 2012)

Frank Ainslie said:


> Hi Lone Wolf!
> 
> I've just finished my coffee!
> 
> ...




And this is where we diverge again.

Most Storm clients say they thought this was a safe, conservative strategy. While I can accept the argument that Storm clients didn't feel the need to do their homework due to trusting in the expertise of their advisors, I can't for a moment believe the claim that Storm clients thoroughly researched the strategy themselves. It doesn't take many calculations to work out the potential risks of borrowing large sums of money to invest in an instrument that has previously had sudden and severe falls.

If you were after higher reward and were willing to tolerate higher (but controlled) risk I could possibly understand. If you trusted your adviser and didn't do your own research I'd understand. But I can't imagine what could possibly convince you (after thorough research) that this strategy was conservative. So we'll have to agree to disagree on that. However, I will end by saying that this is only my opinion which is based on what I now know. I wasn't there to hear exactly what lies you were told or what research you really did. So although I have my own opinion on the matter, I do have to admit that I could be wrong.

Once again Frank, disagree as we might, I honestly do wish you well and hope that there comes a time when everyone affected can put this behind them and move on with their lives.


----------



## bunyip (9 September 2012)

Lone Wolf said:


> And this is where we diverge again.
> 
> Most Storm clients say they thought this was a safe, conservative strategy. While I can accept the argument that Storm clients didn't feel the need to do their homework due to trusting in the expertise of their advisors,* I can't for a moment believe the claim that Storm clients thoroughly researched the strategy themselves. It doesn't take many calculations to work out the potential risks of borrowing large sums of money to invest in an instrument that has previously had sudden and severe falls.*







Exactly.....a quick perusal of past market slumps and a few figures done on a pocket calculator would have revealed the shortcomings of the Storm strategy, and warned Storm investors of the deadly risk they'd be taking.
Very few if any Storm investors appear to have done that, preferring instead to believe the sales pitch that it was a conservative strategy with effective safety nets in place.

There seems to be a misconception among some people that researching a stock market investment is difficult and complex and requires sophisticated knowledge and ability.
It doesn't - the stock market is one of the simplest of investments to research when index funds are the investment vehicle. All the information to make prudent choices is readily available to anyone willing to spend a small amount of times accessing it.

Storm investors simply didn't do their homework, apparently believing that it wasn't necessary. I still shake my head in amazement that people at or near retirement age would risk their homes and commit huge amounts of borrowed money to an investment without thoroughly looking into it first. Particularly when the investment vehicle chosen has a well documented history of wild plunges.


----------



## bunyip (9 September 2012)

Frank Ainslie said:


> The insidious thing about Storm was that its strategy did appear sound.





 Frank

Storm’s strategy may have looked sound to you and the other Storm investors.
But the strategy must have looked anything but sound to many of the 75% of people who reportedly walked away after consulting Storm.
I believe you would have been among this 75% if you’d properly assessed the strategy by looking at past market crashes and asking yourself some ‘what if’ questions......

‘What if’ the market crashes 25% in one day like in 1987 – what effect will that have on my proposed 2 million dollar investment?

‘What if’ the banks suddenly call in my loan when my portfolio is down by half a million or one million dollars – can I cope with that?

What if’ the market takes 25 years to recover its losses, as the US market took to recover after the 1929 crash?

‘What if’ I wake up one morning to find the market opens 20% lower than where it closed the previous day, as it did in 1987 – will Storm’s safety triggers save me from catastrophic loss in that situation?

‘What if’ gearing works against me instead of for me – how much will that magnify my losses if the market turns seriously bearish?

To those who chose to place their faith in Storm without researching the strategy and asking some ‘what if’ questions, I can see how they thought the strategy was sound. 
But to anyone who bothered to do a small amount of research, crunch a few numbers, and consider the very real possibilities that I’ve outlined above, the Storm strategy was clearly an accident waiting to happen.


----------



## Frank Ainslie (9 September 2012)

DocK said:


> +1 Well said Frank.
> 
> 
> 
> Thanks for that link Harlequin - it made for enlightening reading!  I thought this bit deserved a direct quote as it speaks to the idea that the banks were simply carrying out business as usual and not an intrinsic, if not essential, component that the strategy revolved around:  (see next post)




Hi Dock,

I suspect that from here on in, the CBA, Macquarie Bank and BOQ are going to unravel at a rate of knots. With all the evidence that has been gathered how the heck are they going to defend themselves? There are reputations on the line here. If this goes the full distance it's going to be a PR nightmare for these banks. Surely, commonsense will prevail in their Board rooms!

If they are waiting for us to blink they are mistaken. We have employed some of the best silks in Australia. Bring it on you bastards! What did Sean say! _"Until Hell freezes over!"_


----------



## Frank Ainslie (10 September 2012)

Lone Wolf said:


> And this is where we diverge again.
> 
> Most Storm clients say they thought this was a safe, conservative strategy. While I can accept the argument that Storm clients didn't feel the need to do their homework due to trusting in the expertise of their advisors, I can't for a moment believe the claim that Storm clients thoroughly researched the strategy themselves. It doesn't take many calculations to work out the potential risks of borrowing large sums of money to invest in an instrument that has previously had sudden and severe falls.
> 
> ...




Okay, Lone Wolf! Explain this! Why would people who have retired after working hard all their lives invest using Storm if they thought what Storm was offering wasn't safe? Storm offered an investment strategy based on a broad front investment policy with safeguards in place to protect our assets. It was one of the largest investment advisory firms in Australia with supposedly millions of dollars in assets to back it up and had a portfolio of clients second to none. Most of the elderly that invested in Storm were ultra conservative because they were aware of the value of a dollar, having worked hard all their lives to save for their retirements. They didn't fritter away their lives on surfboards expecting the workers in this country to foot the bill.

Have we forgotten our _"values"_ in this country? Has _"trust"_ suddenly become a non-acceptable commodity? Are _"ethics"_ dead and buried? Should would-be investors now mutter, _"Be afraid! Be very afraid"_ whenever they pay a visit to a financial adviser? _"Yes, Yes, Yes"_, if our experience is anything to go by.

To get to the bottom of the Storm debacle you need to understand the nature of the bulk of Storm's clientele. They were trusting, honest and reliant on Storm to act ethically with their monies. Instead they were deceived from the start. 

Let me remind you and others of what is expected in Law of those that offer goods or services:



_[*]Sellers must accept responsibility for the consequences of their activities and make every effort to ensure that their decisions, recommendations, and actions function to identify, serve, and satisfy all relevant publics: customers, organizations and society.
[*]Seller's dealings must be honest and fair
[*]Sellers (professionals) should uphold and advance the integrity, honor and dignity of their profession.
[*]Sellers must protect the rights of those they deal with.
[*]Sellers should fulfill their duties in the marketing exchange process.
[*]Buyers should be able to expect that products and services are safe and fit for intended uses; that communications about offered products and services are not deceptive; that all parties intend to discharge their obligations, financial and otherwise, in good faith; and that appropriate internal methods exist for equitable adjustment and/or redress of grievances concerning purchases.
[*]Sellers should be aware of how their behavior influences the behavior of others in organizational relationships. They should not demand, encourage, or apply coercion to encourage unethical behavior in their relationships with others.
[*]_

'_Let the buyer beware'_ only applies to those that are in a position to discern at the time they purchased a product or service that such was offered in an honest way and such fulfilled the agreement reached. Short of beating the crap out of financial advisers with a rubber hose, (thousands now exist on our side that would gladly volunteer) what do you suggest? 

The principal of contract demands that prime conditions such as _"having safe-guards in place" _when so stated must be fact rather than fiction. Need I go on? Probably, because I suspect that many will still continue to tout the _"you should have avoided what was obviously a scam" _line when the jokers involved are marched away in chains. 

Until people in the financial sector identify the shortcomings that exist there, investors will continue to be duped because the standards of advice they receive are tainted by self interest and greed. Not by the naivety of investors as some here have claimed but rather by those that lack ethics in our society and use crooked means to defraud others of their wealth.


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## pilots (10 September 2012)

Every time I see the word STORM come up I think of WOOD DUCKS, no matter what law is in place you can not protect the wood ducks from getting screwed. We have living in our street a financial adviser, our street is a very well to do street, the adviser is renting his house and his car is a lease car, he has on most nights clients come to his house, now this adviser is letting people thing he is doing very well when in fact he has NOTHING to his name, yet here we have people putting all there trust in him. What I would like to see is some one go after the sales people that sold this scam and made a **** load doing it, not the heads of the company, go after the guys who conned the people out of there money.


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## bunyip (10 September 2012)

Frank Ainslie said:


> Okay, Lone Wolf! Explain this! Why would people who have retired after working hard all their lives invest using Storm if they thought what Storm was offering wasn't safe?




Frank

No doubt Lone Wolf will give you his opinion. And I’ll give you mine too, since this is a public forum that encourages sharing of views.

Stormers invested using Storm Financial because Storm sold the strategy as a safe and conservative way to personal wealth creation. And Storm investors believed them instead of doing their own simple research that would have revealed the extreme risk in the strategy.

Storm had a good sales pitch just like all good sales people. Some people are sucked in by a good sales pitch, some are not. Unfortunately you were one of the ones who were.


----------



## Judd (10 September 2012)

I haven't read Frank's posts for awhile because they are too long winded and life's too short but I assume he is banging on about trust.

In regard to trust by all means trust people and institutions if you wish but individuals should not allow that trust to lead to complacency.  That is abnegating personal responsibility in my opinion.  Companies and organisations have 'trusted" people but they still have fraud controls and even those systems do not work all the time.  Households effectively do the same (I hope) when checking bank or credit card statements.  So why would it not also apply when investing your funds through any organisation including Storm Financial?

Trust in the Lord and get a signature from everybody else.  Sorry, motto of friend who was an auditor.


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## ASICK (10 September 2012)

I think it's a fine thing to fight for your rights, and if you've got the resourses, it makes good sense to do it without a litigation funder.  However, in my view, one should run a case on facts, and not on principle - to my mind, in most cases when principle enters the front door of the 'house' of life, common sense jumps out of a side window.  

I've read a lot about what the banks have allegedly done wrong, but I've read nothing about the banks' defences, and as a result I feel that readers are getting no more than a lop-sided view of what's really going on.

Lawyers business is law.  While they try to win for their clients, winning is clearly not mandatory: There can only be one winner and that means the advice given to the loser has been plainly wrong.  I recall a matter brought against my business by two former employees where a magistrate found against them - one of them said to the magistrate, "but our solicitor said the money was owing!" - the magistrate retorted, "I hope you didn't pay for that advice". The lesson? advice tendered is not necessarily right.

I read the profile on the judge and he seems a right leftie - but that shouldn't lead anyone to a conclusion that he's 'soft' on the plight of investors in Storm, in my view, he'll decide on the law and the facts - no more, no less.  While I'm sure judges at first instance like to get it right, I'm not convinced they give a hoot if their decisions are appealed. 

I'm sure many of us (me included) made investments which we felt were secure and well regulated only to find out those same investments were poorly managed (and sometimes worse) and sloopily regulated within laws which were nothing more than a framework for some (eg. managers) to make fortunes at the total risk of others (eg. investors): We've learnt and I'm sure we can accept how stupid many of us were, 20-20 hindsight is a insight gained only by losers.

But, putting that aside, if some are willing to sue for recovery of losses as a consequence of what they feel is a breach (or breaches) of applicable law/s then I say good luck to those who dare, providing they keep in the forefront of their minds that they should never propel their case on principle, and most importantly, they are prepared to face the financial consequences of a loss.


----------



## SJG1974 (10 September 2012)

Looks like things are heating up again around here!

Been away for a while, and good to see the debate heating up again.

Personally, I don't blame Frank or anyone else for pursuing compensation and chasing after parties who have wronged them.  For me, the real bad eggs are Storm Financial for selling a high risk strategy as anything but and falling asleep at the wheel when they were paid (handsomely) to monitor and manage their clients' portfolios.  If they had have done their job properly, and done what they said they would/could do, then people may have lost money, but not the whole lot.  Period.

Problem is Storm no longer exists, and it can be hard to get blood from a stone.  So the banks with their deep pockets are the next cab off the rank.  And it would appear from what I have read that they have some serious questions to answer. Fair enough. The courts will decide their guilt and their penalties.  I am pretty sure this forum won't have much bearing on that.

But, in my opinion, nothing that Storm or the Banks did should ever cover the real reason as to why Stormers find themselves in the position they are now in....that being that the majority did not take sufficient steps to properly understand how their life savings were being invested.  Information on everything is available at the touch of a keypad these days...there is no excuse for not taking the time to do your research, particularly with so much at stake.   

If you don't understand it, then make every effort to ensure you do, otherwise don't go there. Or, at the very least, don't commit the farm to it.


----------



## Frank Ainslie (10 September 2012)

Judd said:


> I haven't read Frank's posts for awhile because they are too long winded and life's too short but I assume he is banging on about trust.
> 
> In regard to trust by all means trust people and institutions if you wish but individuals should not allow that trust to lead to complacency.  That is abnegating personal responsibility in my opinion.  Companies and organisations have 'trusted" people but they still have fraud controls and even those systems do not work all the time.  Households effectively do the same (I hope) when checking bank or credit card statements.  So why would it not also apply when investing your funds through any organisation including Storm Financial?
> 
> Trust in the Lord and get a signature from everybody else.  Sorry, motto of friend who was an auditor.




Hi Judd,

_"I haven't read Frank's posts for awhile because they are too long winded and life's too short but I assume he is banging on about trust."_

I'll therefore make this short in view of your limited attention span. 

_"Trust in the Lord and get a signature from everybody else.  Sorry, motto of friend who was an auditor."_

Good advice! We did that when we signed agreements! They didn't keep their end of the bargain!I don't think I can make it any simpler than that for you or any shorter!


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## Julia (10 September 2012)

Frank Ainslie said:


> Hi Judd,
> 
> _"I haven't read Frank's posts for awhile because they are too long winded and life's too short but I assume he is banging on about trust."_
> 
> I'll therefore make this short in view of your limited attention span.



To be fair, Frank, most of your posts are a repetition of what you have said before.
I get that repeating over and over that you should have been able to trust someone is helpful to you, but perhaps consider that it makes for somewhat tedious reading.

The reality is, and I'm sure you really know this, that we are constantly offered advice by people duly authorised to provide this.  That doesn't remove from us, as reasonably intelligent people, the obligation to assess that advice.  I get that you were promised all sorts of safeguards etc, but the basic premise that you could consider borrowing so heavily against your home, using those funds to buy into the market, and then further gearing on those borrowed funds to be a 'safe, conservative strategy' lacks credibility, at least for someone at or near retirement.


----------



## bunyip (10 September 2012)

Frank Ainslie said:


> There are many (and you are one of them I surmise) that have assumed that the people that invested in Storm didn't do their homework beforehand. If they had, they would have avoided this mess, you believe! In fact the majority of people did shop around for investment advice including Helen and me.




Frank

I was amused to read your comments above.
Particularly in view of the fact that just a couple of months ago you admitted that you should have sought advice from more than one firm.
And you admitted the fact that you never went down this path was a major failing on your part that is inexcusable
And you admitted that your failure to apply some commonsense and test Storm’s plan independently cost you all that you had in the end.

Refer to post 7222 on page 362 if you'd like to read more of what you said. 
Suffice to say that what you said back then was very different to what you're saying now.

I have to tell you Frank, you do seem rather confused at times.


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## Reasons (10 September 2012)

Trust is an interesting word as it is not normally given if there is substantial risk without a track record known intimately by a person. People usually allocate trust based on different risk levels...

At a low level, we trust a parking meter timer is accurate so that we don't get back late and fined, but the risk to our financial future is not destroyed if it isn't and we are fined - and next time we are circumspect about all parking meter timers.


At a higher level we trust that schools are teaching our kids properly, but if we have any respect for our children's educational outcomes, we are constantly diligent and monitoring the competence and ability of the teachers and that school initially to deliver expected outcomes. We then continue to do so on an regular basis, checking to make sure that our trust remains well allocated as it is critical to our children being able to go to uni or whatever and we are getting a commensurate return on the investment. 


When it comes to our life savings it becomes quite critical that trust is only allocated at an empirical level - what have YOU determined about this company's credentials and investing strategy that gives them the absolute right to earn your trust to invest your money with sensible levels of risk.
The Dictionary Definition of Trust...

Trust [truhst] noun 
1. reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence. 
2. confident expectation of something; hope. 
3. confidence in the certainty of future payment for property or goods received; credit: to sell merchandise on trust. 

The definition itself is split into HOPE (a desire, want or need) and ABILITY (proficiency, expertness).

If you relied on the integrity of a company and HOPED that you would get whatever vision they told you at face value without recognising what trust actually means - I am sure you lost a lot of money.


If you did due diligence on their ABILITY by closely checking that the advice they provided did not put you at significant risk for your age and asset allocation, I am equally sure you would have not lost much money.
Trust, in things that matter greatly to us, is earned through track record and detailed understanding of someone’s ABILITY. 

Trust cannot be blindly bought and abdicated to others - that is confused trust - and at its best could be called HOPE.


----------



## Lone Wolf (10 September 2012)

The objective of discussion isn't for one side to win. The objective of discussion should be for both sides to understand each other. It therefore saddens me greatly to read this post from you which misses my point by so much that it seems deliberate. Then you proceed to reiterate the points we've already gone over at length in previous posts. And I thought we were doing so well.



Frank Ainslie said:


> Okay, Lone Wolf! Explain this! Why would people who have retired after working hard all their lives invest using Storm if they thought what Storm was offering wasn't safe?




To summarise, I said - "Storm clients believed they could trust their advisors and therefore they didn't feel the need to do their own research. Had they done any research into the strategy for themselves they would have realised that it was not at all conservative." You responded with - "Explain this! Why would people invest in something they don't believe is safe?"

I did just explain that Frank. That was my whole point. They invested because they were mislead into believing that it was a safe strategy. Their advisor lied to them and they believed every word without checking for themselves. I didn’t say clients invested despite knowing the risks. I said they didn’t understand the risks because they didn’t do their own research. Your post does nothing to combat that claim. You simply list all the reasons why clients shouldn’t have needed to do any research of their own. It was unnecessary for you to go over that again as we’ve discussed it already.



Frank Ainslie said:


> Short of beating the crap out of financial advisers with a rubber hose, (thousands now exist on our side that would gladly volunteer) what do you suggest?




As previously suggested, if you don't understand the risks involved, don't do it.



Frank Ainslie said:


> Need I go on? Probably, because I suspect that many will still continue to tout the _"you should have avoided what was obviously a scam" _line when the jokers involved are marched away in chains.




Indeed they will continue to say that even if the banks are found guilty. If you believe that the outcome of the legal battle will have any impact on my opinion then you really do miss my point completely.



Frank Ainslie said:


> Until people in the financial sector identify the shortcomings that exist there, investors will continue to be duped because the standards of advice they receive are tainted by self interest and greed.




Correction, even after the financial sector is overhauled investors will still continue to be duped because the standards of advice they receive are tainted by self interest and greed. There will always be criminals out there Frank, always. You can allow yourself to be an easy target or you can take simple steps to reduce your risk of becoming a victim. That choice is and always was yours to make.

There is nothing more to be gained here, we've both said everything we want to say. It looks like if we continue we’ll just be reiterating previous points. I'm done.


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## Solly (10 September 2012)

> *"Storm Financial trial likely to be over by Christmas
> *
> A TRIAL over the collapse of Storm Financial has been set back a week but should be over by Christmas."




More @ couriermail.com.au


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## Vixs (10 September 2012)

Lone Wolf said:


> And this is where we diverge again.
> 
> Most Storm clients say they thought this was a safe, conservative strategy. While I can accept the argument that Storm clients didn't feel the need to do their homework due to trusting in the expertise of their advisors, I can't for a moment believe the claim that Storm clients thoroughly researched the strategy themselves. It doesn't take many calculations to work out the potential risks of borrowing large sums of money to invest in an instrument that has previously had sudden and severe falls.
> 
> ...




'Sound' and 'conservative' are far from the same. Frank said 'sound', you say 'conservative'.

Be sure to compare apples to apples. Gearing is not part of any conservative strategy I've ever laid eyes on, but it can be and often is 'sound'.


----------



## jjtebj12 (10 September 2012)

Solly said:


> More @ couriermail.com.au





There seems to be the same negativity to posts that suggest the bank shouldn't be in the firing line. My situation which isn't the same as others is as follows:

-  I had my accountant check it out. He also sought external advice from another party which was positive (this is in writing):
-  My Bank which held all my accounts for over 20 years (one of the big 4) and I was told "sound investment as they had many clients investing using this strategy"! Yes they have settled out of court!!!!!!!

I really do not think people on this site understand what happened. Yes it's easy to sit on the sideline and make assumptions  however the evidence will be forthcoming in the upcoming trial which will see some on this site understand that we were not "wood ducks" we are real people who in my case did seek advice from many professionals. 

I sought advice from professionals.


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## Lone Wolf (10 September 2012)

Vixs said:


> 'Sound' and 'conservative' are far from the same. Frank said 'sound', you say 'conservative'.
> 
> Be sure to compare apples to apples. Gearing is not part of any conservative strategy I've ever laid eyes on, but it can be and often is 'sound'.






Frank Ainslie said:


> Most of the elderly that invested in Storm were ultra conservative...




I could also trawl trough the thread to find where Frank stated that the strategy itself was sold to him as conservative, but it's not worth my time.

Apart from having a go at me for not comparing apples to apples, everything else you said is correct. Gearing to invest in the markets can in no way be considered conservative. Gearing certainly can be used as part of a sound strategy focusing on higher risk, higher return.


----------



## bunyip (10 September 2012)

bunyip said:


> Frank
> 
> 
> 
> Storm had a good sales pitch just like all good sales people. Some people are sucked in by a good sales pitch, some are not. Unfortunately you were one of the ones who were.





I said in the post above that Storm had a good sales pitch. But having thought about it a bit more today, I'm not so sure they did.

Storm managed to sign up only one in every four people to whom they gave financial advice. 
The other 75% walked away.
A one in four strike rate might be OK, but I hardly think it rates as sensational.

Whatever the standard of the sales pitch, it obviously sounded sufficiently attractive to lure 25% into signing on as Storm clients.


----------



## SJG1974 (10 September 2012)

jjtebj12 said:


> There seems to be the same negativity to posts that suggest the bank shouldn't be in the firing line. My situation which isn't the same as others is as follows:
> 
> -  I had my accountant check it out. He also sought external advice from another party which was positive (this is in writing):
> -  My Bank which held all my accounts for over 20 years (one of the big 4) and I was told "sound investment as they had many clients investing using this strategy"! Yes they have settled out of court!!!!!!!
> ...




Was it sold to you as a conservative strategy though...and if so did your accountant and the other professional party confirm that it was conservative?

The reason I ask is that many of the Storm victims who have posted here have claimed the strategy was sold to them as a conservative strategy, when obviously it was far from it. 

There is obviously a big difference between taking on the storm strategy to enhance your asset base using gearing, which is perfectly legitimate and sound (but risky), compared to using the strategy to protect your asset base in a conservative manner (which is what some have claimed) which is so far from sound it's not funny.


----------



## Solly (10 September 2012)

Frank Ainslie said:


> Hi Judd,
> 
> _"I haven't read Frank's posts for awhile because they are too long winded and life's too short but I assume he is banging on about trust."_
> 
> ...




Hi Frank

A good succinct and factual post in my view. On another matter I believe it was bunyip who likened the Storm event to "an accident waiting to happen". If this view is plausible, it does contain some merit. Let's deconstruct the scenario, accidents don't just happen, they are the result of various inputs, actions and usually a chain of events that results in harm or loss. 

If a party to the event has experienced harm or loss there a mechanisms available for those aggrieved to make a claim for restitution or compensation. If this claim progresses the application for compensation or restitution is accessed, examined and evaluated. Compensation for pain, harm or loss usually follows. Also if it is deemed that an unlawful act contributed to the event this is referred for further examination and charges are laid and innocence or guilt is determined. 

If guilt is ultimately established a determination is made and punishment or penalty is then administered to the guilty. This may not be dissimilar to the Storm scenario that many find themselves involved with presently.

S


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## Julia (10 September 2012)

jjtebj12 said:


> There seems to be the same negativity to posts that suggest the bank shouldn't be in the firing line.



You might like to quote any posts which have claimed that the banks should not be culpable in any way.
I do not recall any member making such a statement, so it would be good not to distort what has been said.

To suggest that Storm investors had a personal responsibility to ensure the strategy they were buying was suited to their circumstances is not to say that no other person or organisation also had responsibility in the ultimate mess.


----------



## Solly (11 September 2012)

> David Robinson, acting for ASIC, asked the court to remember it was a trial and the organisation should still have the right to call evidence not negotiated in advance.
> 
> He said ASIC wanted investors to have "every chance to put their evidence before the court".





More by Rae Wilson, APN Newsdesk @ www.qt.com.au


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## jjtebj12 (11 September 2012)

SJG1974 said:


> Was it sold to you as a conservative strategy though...and if so did your accountant and the other professional party confirm that it was conservative?
> 
> The reason I ask is that many of the Storm victims who have posted here have claimed the strategy was sold to them as a conservative strategy, when obviously it was far from it.
> 
> There is obviously a big difference between taking on the storm strategy to enhance your asset base using gearing, which is perfectly legitimate and sound (but risky), compared to using the strategy to protect your asset base in a conservative manner (which is what some have claimed) which is so far from sound it's not funny.





My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date . 

We actually had several meetings and didn't enter into this without doing our homework.


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## Vixs (11 September 2012)

Lone Wolf said:


> I could also trawl trough the thread to find where Frank stated that the strategy itself was sold to him as conservative, but it's not worth my time.
> 
> Apart from having a go at me for not comparing apples to apples, everything else you said is correct. Gearing to invest in the markets can in no way be considered conservative. Gearing certainly can be used as part of a sound strategy focusing on higher risk, higher return.




I apologise, the response I quoted came straight after a post where the word 'conservative' wasn't mentioned. After catching up on the next 15 posts there was indeed a lot of talk about conservatism, I can see where your position came from.

I would find it hard to believe that anyone was sold on the 'conservative' nature of Storm's strategy too.


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## Judd (11 September 2012)

jjtebj12 said:


> My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .
> 
> We actually had several meetings and didn't enter into this without doing our homework.




LOL.  That is so precious.  What a dumb thing to do unless they were specifically employed and paid by you to offer financial advice on the Storm product.


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## SJG1974 (11 September 2012)

jjtebj12 said:


> My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .
> 
> We actually had several meetings and didn't enter into this without doing our homework.




There would appear to be two broad types of Storm clients- 

1) those that were looking to build their wealth over time using gearing (which would appear to include you), and 

2) those that wanted to protect their wealth (which covers a lot of the posters in this forum).  

Yet, with these two vastly different client types, they were all sold the same thing....a high risk double gearing strategy  That is where the problems start and where Storm failed in its duty to provide appropriate advice to its clients. The strategy was appropriate for those who knew the risks and were prepared to take them, but not for others who thought it was low risk and wanted to protect their wealth.

Did the professionals you consulted with tell you that it was a risky strategy? I would hope they were competent enough to at least get that part right.

Because that seems to be at the heart of the whole thing....people somehow went into this double gearing strategy believing it was low risk, even conservative, and designed to protect their wealth, when the truth was something completely different and should have been uncovered with even the most basic of research.


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## Frank Ainslie (11 September 2012)

Interesting grab from another site! http://www.bfcsa.com.au/index.php/entry/why-we-should-be-following-the-storm-financial-case-trial

_Tuesday, 28 August 2012
STORM - BANK MAKES CUSTOMERS FRAUDULENT LOAN "DISAPPEAR".
I have recently been given this information from my advisor, a very reliable, honest, ethical business advisor with many contacts in Parliament & Government.
It relates to one of the people that lost a lot of money in the Storm Finance / Bank rip off. He has personally helped the lady by investigating her case thoroughly. Same method of fraud, with the banks using altered / forged / fraudulent documents either through Macquarie Bank or Bank of Queensland.

Due to his constant & diligent efforts, the BANK HAS MADE HER LOAN "DISAPPEAR". 

She had received her usual monthly statement - and THE LOAN WAS REMOVED FROM HER ACCOUNT - IT WAS NOT SHOWING ON HER STATEMENT! They contacted the bank involved to make sure that there was no mistake and were told that there was no mistake -sure enough the loan was gone.

There was no explanation from the bank.

My/ her advisor then contacted the bank involved around a week later to make sure that the mortgage was discharged & the title handed back to her.

My advisor has told me that the reason that the bank has done it this way was to effectively ensure that nothing comes out publicly & therefore it is does not go ON RECORD against them! _


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## pilots (11 September 2012)

jjtebj12 said:


> My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .
> 
> We actually had several meetings and didn't enter into this without doing our homework.




Your trouble was that all the people you was talking to was getting a kick back from Storm, what did you think they was going to tell you?????.


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## jjtebj12 (11 September 2012)

pilots said:


> Your trouble was that all the people you was talking to was getting a kick back from Storm, what did you think they was going to tell you?????.






YOU ARE TOTALLY INCORRECT AND YOU DO  KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE SHOOTING OFF YOUR MOUTH WITHOUT ANY KNOWLEDGE!


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## Frank Ainslie (11 September 2012)

Reasons;727813]Trust is an interesting word as it is not normally given if there is substantial risk without a track record known intimately by a person. People usually allocate trust based on different risk levels...

At a low level, we trust a parking meter timer is accurate so that we don't get back late and fined, but the risk to our financial future is not destroyed if it isn't and we are fined - and next time we are circumspect about all parking meter timers.


At a higher level we trust that schools are teaching our kids properly, but if we have any respect for our children's educational outcomes, we are constantly diligent and monitoring the competence and ability of the teachers and that school initially to deliver expected outcomes. We then continue to do so on an regular basis, checking to make sure that our trust remains well allocated as it is critical to our children being able to go to uni or whatever and we are getting a commensurate return on the investment. 


When it comes to our life savings it becomes quite critical that trust is only allocated at an empirical level - what have YOU determined about this company's credentials and investing strategy that gives them the absolute right to earn your trust to invest your money with sensible levels of risk.
The Dictionary Definition of Trust...

Trust [truhst] noun 
1. reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence. 
2. confident expectation of something; hope. 
3. confidence in the certainty of future payment for property or goods received; credit: to sell merchandise on trust. 

The definition itself is split into HOPE (a desire, want or need) and ABILITY (proficiency, expertness).

If you relied on the integrity of a company and HOPED that you would get whatever vision they told you at face value without recognising what trust actually means - I am sure you lost a lot of money.


If you did due diligence on their ABILITY by closely checking that the advice they provided did not put you at significant risk for your age and asset allocation, I am equally sure you would have not lost much money.
Trust, in things that matter greatly to us, is earned through track record and detailed understanding of someone’s ABILITY. 

Trust cannot be blindly bought and abdicated to others - that is confused trust - and at its best could be called HOPE.

Hi Reasons!

Hmm! I can't fault you on your reasoning where 'trust' is concerned! However, this is not just about trust! If it were the Banks and Storm's directors wouldn't be in the dock. Whenever one employs a professional one trusts that that person is qualified/experienced enough to give sound advice. That's just the way it is! There is nothing wrong with that! 

*However, this is about DECEPTIVE AND MISLEADING CONDUCT!*

Let me repeat this once again because the message is still not getting through to some on this forum. This is about *deceptive and misleading conduct!* It is not about the mindset of those that invested in Storm. If people want to make themselves feel better by believing it couldn't happen to then because they are far too astute, well good luck to them! They'll find however that there were many Storm investors with a background in business and IQ's far above theirs that were taken in by all this. 

The truth of the matter is that anyone can be duped if they are presented by someone with sound credentials with something that seems creditable, but used misleading and deceptive conduct in so doing!  If other financial advisers that were asked to view Storm's plan couldn't see its flaws (a financial planner from Westpac who was asked by us to come up with something better saw our Storm proposal before we signed with Storm) how the heck can so called financial experts on this forum now claim that it was easy to see through it. Quite frankly,they are up themselves.

Oh, and by the way, here are some definitions for you:

_'DECEIVE'  
v. de·ceived, de·ceiv·ing, de·ceives
v.tr.
1. To cause to believe what is not true; mislead.
2. Archaic To catch by guile; ensnare.
v.intr.
1. To practice deceit.
2. To give a false impression: appearances can deceive._

'Misleading' which equates in this case with fraud

_'FRAUD' (Legal)
A false representation of a matter of fact””whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed””that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury._

Nice to hear from you. Keep the comments coming because we need more input. My steam was not directed at you by the way!


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## Julia (11 September 2012)

Frank Ainslie said:


> If other financial advisers that were asked to view Storm's plan couldn't see its flaws (a financial planner from Westpac who was asked by us to come up with something better saw our Storm proposal before we signed with Storm) how the heck can so called financial experts on this forum now claim that it was easy to see through it. Quite frankly,they are up themselves.



On the contrary, so called financial planners offered by the banks are simply salespeople put there to sell the bank's products.  I've met a few of them over the years and wondered how on earth they can be in such a position.  They have known nothing of long term wealth creation strategies and just look blank when asked to discuss anything other than their bank's products.  

So maybe refrain from suggesting anyone finding it obvious that you were offered a high risk strategy is 'up themselves'.

Frank, if you want to reply to someone's particular post, such as that from "Reasons" if you click on the "Reply with Quote" icon you'll get their post up in italics.  The way you're attempting to do it, it looks as though the entire post has come from you.


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## pilots (11 September 2012)

jjtebj12 said:


> YOU ARE TOTALLY INCORRECT AND YOU DO  KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE SHOOTING OFF YOUR MOUTH WITHOUT ANY KNOWLEDGE!




Well friend, we know of a bank employe who WAS getting a kick back from Storm.


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## Julia (11 September 2012)

It might be wise not to count too much on ASIC achieving a result for Storm clients.
After much publicity and assurances Eddie Groves would be in a heap of trouble over the collapse of ABC Learning, apparently ASIC have backed right off.
http://www.businessspectator.com.au...ent=101920&utm_campaign=kgb&modapt=commentary


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## Ijustnewit (11 September 2012)

As it now seems that according to this forum we can no longer trust any Professional as they are just salesman , I have taken to doing my own electrical , plumbing , tested my own eyes and whipped up some specs . Today I found a bargain on a drill and some bits at Bunnings  , so the quote and advice I got from my Dentist will soon be a thing of the past. Does anyone have some advice about a Boeing 737 as I'm travelling to Melbourne for business next week and flying one of those things can't be that hard, can it ?:1zhelp:


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## Judd (11 September 2012)

A bit unfair there, pilots.  Maybe true in one case but it does not necessarily apply to all.

jjtebj12, says he/she consulted bank managers and an accountant.  Would have done so in all good faith.  And it could be the case that the bank managers and accountant, also in good faith, gave their respective views on the proposal by Storm Financial.

Only one small potential problem.  And that would occur if neither the bank managers or the accountant had any authority to give financial planning advice.  Bank manager advise on the banks deposit and lending products but for financial advice go and see a planner.  Accountant the numbers go here and this bit is tax deductible but for financial advice go and see a planner.  No “know your client”, no Statement of Advice as per Storm Financial.

However, why would jjtebj12 actually know the ins and outs of that?  I need opinion.  Oh, I know, I'll talk to a bank manager and the accountant as they know about finances.

Oh dear, all the rules and regulatory structures that have been introduced by Governments in the past to protect the consumer have just been rendered ineffective because the poor downtrodden consumer is not fully aware of those ins and outs.  The game shifted years ago but I suspect that the public is not really aware of the shift.


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## ASICK (11 September 2012)

I wonder how much notice the defendants in the court action take in this forum.  Perhaps little, but I could just imagine peering eyes looking in from time to time.


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## jjtebj12 (11 September 2012)

Judd said:


> A bit unfair there, pilots.  Maybe true in one case but it does not necessarily apply to all.
> 
> jjtebj12, says he/she consulted bank managers and an accountant.  Would have done so in all good faith.  And it could be the case that the bank managers and accountant, also in good faith, gave their respective views on the proposal by Storm Financial.
> 
> ...




The bank passed on all the Storm information to their internal department (I'll have to check the department name as it's been so long). Admitting after the collapse that their advice was incorrect, hence quiet settlement.  As for my accountant, inside his large firm they do have qualified financial advisers who also got it wrong. Banks and larger accountancy firms offer a broad range of services these days - but accordingly to you we shouldn't seek their services.


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## SJG1974 (11 September 2012)

jjtebj12 said:


> The bank passed on all the Storm information to their internal department (I'll have to check the department name as it's been so long). Admitting after the collapse that their advice was incorrect, hence quiet settlement.  As for my accountant, inside his large firm they do have qualified financial advisers *who also got it wrong.* Banks and larger accountancy firms offer a broad range of services these days - but accordingly to you we shouldn't seek their services.




How did they get it wrong?

As mentioned, the strategy is perfectly legit.  Nothing illegal.  It was a strategy that I understand many non Stormers also employed. The problem isn't the strategy itself...it is how it was sold to the clients, the clients it was sold to and further on, how Storm's advisers managed everything when the **** hit the fan during the GFC.

For all intents and purposes it is a sound strategy provided the client understands it and is prepared to accept the risks they are taking for the potential returns they are getting. Just like any legal financial strategy.

No professional when reviewing the strategy could be expected to identify that Storm were completely unable (or unwilling) to do what they said they would and properly manage your investments as they fell down the drain.  Noone could have forseen that, and it is a separate issue.

But they should be able to identify that this is not a conservative strategy that will protect your hard earned as some have claimed they thought it was, and that the strategy itself is on the high risk side of things because shares and gearing, by their very nature, are high risk....no matter how you use them.

Did the professionals point this out to you, or could they not even see this themselves?


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## Solly (11 September 2012)

pilots said:


> Well friend, we know of a bank employe who WAS getting a kick back from Storm.




Was this a dubious arrangement? And did you inform the police?


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## Julia (11 September 2012)

jjtebj12 said:


> As for my accountant, inside his large firm they do have qualified financial advisers who also got it wrong. Banks and larger accountancy firms offer a broad range of services these days - but accordingly to you we shouldn't seek their services.



Another example of distortion of what has been said.  Perhaps you could quote any posts which suggest people should never seek the services of banks, accountants or financial planners.

It is quite wrong to infer from assertions that clients had a responsibility to ensure advice offered was appropriate to their circumstances   =  advice that those clients should never consult any financial professional.

If, however, I wanted advice about wealth creation I would never expect to get it from an accountant or a bank manager, and only from a very few financial planners.
No one, absolutely no one, has your best interests at heart as you do yourself.  Most 'professionals' will have an eye to what's in it for them.  Why else do you think there has been all the consternation about commission based advice?

Learn how to make valid decisions for yourself.  If you need basic factual information go to see a Centrelink Financial Information Services officer.  You do not need to be a customer of Centrelink to do this.  These people are extremely knowledgeable and helpful.


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## pilots (11 September 2012)

Solly said:


> Was this a dubious arrangement? And did you inform the police?




Why call the police, every ones knows that if you don't grease the wheels, they wont turn.


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## Lone Wolf (12 September 2012)

Frank Ainslie said:


> If other financial advisers that were asked to view Storm's plan couldn't see its flaws (a financial planner from Westpac who was asked by us to come up with something better saw our Storm proposal before we signed with Storm) how the heck can so called financial experts on this forum now claim that it was easy to see through it. Quite frankly,they are up themselves.




You're assuming that the adviser you hired to investigate Storm did their job the way you expected them to (I see a pattern forming here). There are two possibilities - One is that, now hold on, this might come as a shock to you - the other adviser didn't do their job properly. The other possibility is that the other adviser didn't understand that you thought this was a conservative strategy. 

Honestly Frank, what do you stand to gain from convincing other people that it's impossible to determine the risk involved in a strategy? I'm not asking you to admit that you should have avoided being where you are now. You've already explained why you shouldn't have needed to do your own research and I accept your personal opinion even if I don't agree.

Why do you feel the need to go one step further and try to prevent us from helping other investors monitor their risk level? You claim that it's utterly impossible for anyone other than a trained professional to understand the risks of borrowing money. Anyone who thinks they can is apparently "up themselves". Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not. You have never once explained why you think those simple steps won't uncover a high risk strategy. If you can't explain why it won't work, how are you in a position to comment?


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## Lone Wolf (12 September 2012)

Ijustnewit said:


> As it now seems that according to this forum we can no longer trust any Professional as they are just salesman , I have taken to doing my own electrical , plumbing , tested my own eyes and whipped up some specs . Today I found a bargain on a drill and some bits at Bunnings  , so the quote and advice I got from my Dentist will soon be a thing of the past. Does anyone have some advice about a Boeing 737 as I'm travelling to Melbourne for business next week and flying one of those things can't be that hard, can it ?:1zhelp:




A misinterpretation of what is being said. Deliberate or not I don't know.

We are talking about blindly trusting professionals when it is unnecessary to do so. Looking at your examples:
- You can't do your own electrical work because it's illegal.
- It's pretty safe to trust a professional to test your eyes and make glasses for you. Worst case scenario you get a headache due to the glassed not being made correctly. Hardly life shattering stuff.
- Dentist, if he recommends extracting a tooth but the tooth feels fine to you, will you let him do it or seek a second opinion? Easy enough to double check and once again, not life shattering stuff if he's wrong.
- Flying a plane without a licence, not only is it illegal but you are putting others at risk with your own stupidity. 

The point is you should seek professional advice while keeping in mind that the advice could potentially be incorrect. If the consequence of it being incorrect is minimal, who cares? But if the consequence of bad advice is life changing then it seems reasonable not to blindly take their word for it if you don't have to.

Professional electricians end up in court for poor wiring burning buildings down. Doctors end up in court for doing the wrong thing. There is a misconception that professional means guaranteed high quality. The sooner people realise that this is untrue the better.

Here, I looked up 'professional' in the dictionary for you:
"following an occupation as a means of livelihood or for gain: a professional builder."

Professional simply means they get paid to do it. No guarantee they do it well. How easily you trust them should depend on the consequence of their actions.

However I'll say it again, you should still seek professional advice. They can explain things to you and alert you to things you haven't previously considered. Not only is there nothing wrong with seeking a professional opinion but it is recommended that you do so. Just use some commonsense and if the advice is critical then do everything within your power to verify it.


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## Solly (12 September 2012)

pilots said:


> Why call the police, every ones knows that if you don't grease the wheels, they wont turn.




So does this mean you condone allegedly criminal activity?


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## Judd (12 September 2012)

jjtebj12 said:


> The bank passed on all the Storm information to their internal department (I'll have to check the department name as it's been so long). Admitting after the collapse that their advice was incorrect, hence quiet settlement.  As for my accountant, inside his large firm they do have qualified financial advisers who also got it wrong. Banks and larger accountancy firms offer a broad range of services these days - but accordingly to you we shouldn't seek their services.




Thank you for responding, jjtebj12.

I posted assuming that both the bank manager(s) and the accountant were not accredited financial planners when providing you with advice.  However, from your reply, it appears they sort an opinion from those in their respective organisations who were.  If that is the case, then it puts a slightly different perspective on the matter.

All the best.


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## bunyip (12 September 2012)

So five years after the start of the bear market that wiped out investors who trusted Storm and/or bank managers and/or accountants because they were so called ‘professionals’, we still have a handful of diehards telling us that we’re talking through our hats by saying that if you consult someone for professional investment advice, it is *YOU*, not someone else, *YOU* who must thoroughly evaluate their advice before you commit serious money to it.

These amusing little people tell us we’re ‘up ourselves’, they seem to think our policy is to never consult or trust a professional. 
So let me spell it out for them in an effort to clear up their confusion.....
We’re not suggesting there’s anything wrong with consulting a professional. But put in some effort to thoroughly evaluate the advice they give you, particularly if the advice is to mortgage your home and borrow vast sums of money to sink into an investment like the stock market that every man and his dog knows is high risk.

The above holds true for any professional advice, not just investment advice.

Years ago I consulted my doctor about a growth on my eye. The eye was constantly burning and watering, but my GP told me nothing could be done about it and I’d just have to use eye drops and learn to live with it. I was a 22 year old with no medical training. My GP was a professional doctor with a medical degree and 15 years in private practice.
I should have trusted his judgment implicitly, right? WRONG. What I should have done, and what I did do, is evaluate his advice, doubt that it was correct, and consult another GP for a second opinion. This GP told me the growth could be surgically removed, and he referred me to an eye specialist who performed the surgery within the week. Problem solved. He told me I would have eventually lost most of the sight in my eye if I hadn’t had the surgery.

My sister has a friend whose leg was badly mangled in a motorbike accident. His orthopedic surgeon told him the leg was beyond repair and would have to be amputated. 
Should he have trusted the opinion of this doctor, and allowed him to amputate the leg? Or should he have evaluated the advice, and sought to establish whether or not it was correct?
He consulted another orthopedic surgeon for a second opinion. He now walks with a limp, but at least he still has two legs.

Get the idea, all you diehards on here who think the rest of us don’t know what we’re talking about? There’s nothing wrong with consulting a professional – but *YOU* have a responsibility to evaluate that advice before accepting it and acting upon it.  Let me repeat....it’s *YOUR* responsibility, not someone else’s, to evaluate the advice you’re given.


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## pilots (12 September 2012)

Solly said:


> So does this mean you condone allegedly criminal activity?




No I do not condone criminal activity, but if you had ever been in business you would know that the wheels WONT turn if you don't grease them. One of the sad things with Storm was the old people that was conned in to investing millions of dollars that they could have lived on with out getting conned in to this scam, you could say a lot of the people that got coned here was just plain GREEDY. Whats that old saying, if it looks to good to be true????????????????????????????


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## Frank Ainslie (12 September 2012)

Judd said:


> A bit unfair there, pilots.  Maybe true in one case but it does not necessarily apply to all.
> 
> jjtebj12, says he/she consulted bank managers and an accountant.  Would have done so in all good faith.  And it could be the case that the bank managers and accountant, also in good faith, gave their respective views on the proposal by Storm Financial.
> 
> ...




Judd,

Do I detect a note of sarcasm when you refer to consumers as _'downtrodden'?_Those downtrodden consumers you refer to keep financial advisers in business. If the goal posts have shifted don't you believe that it is up to financial advisers to fully inform consumers, who rely on them to protect their interests?"

Incidentally, those rules and regulatory structures mentioned by you have been given a shake-up since Storm collapsed. I wonder why? 

Your attitude towards consumers seems to be shared by many in the financial industry who merely see consumers as a means to an end - THEIR END!


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## pilots (12 September 2012)

Frank, how true, you must NEVER for get that financial advisers or ONLY sale people, first and for most, WHATS IN IT FOR ME. Look at it this way, xyz give me 5% commission, abc gives me 10%, now who am I going to sell most.


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## bunyip (12 September 2012)

Frank Ainslie said:


> Your attitude towards consumers seems to be shared by many in the financial industry who merely see consumers as a means to an end - THEIR END!




Frank

I have no doubt you're correct in saying that consumers are seen as a means to an end by many in the financial industry. 
Clearly, those who receive a commission on the financial products they sell would have an incentive to sell the products that pay the highest commissions. Obviously this is good for the salesman but the consumer may not be getting the best product for his purposes.

But on the other side of the coin, let's be fair by acknowledging that there are many in the financial industry, such as Doobsy for example, who do not operate on a commission-based fees structure, but rather are paid a set fee for their services. These advisers are not chasing commissions, and are therefore in a position to look after the best interests of both themselves _*and *_their clients.

This tendency among some advisers to see clients as a means to an end is not limited to the financial services industries either, as you well know. 
You said yourself in one of your posts that your experience in business management showed you that businesses often put their own interests first and their client's interests second.

Given your awareness of this culture of _'business interests first, client interests second'_, it's rather surprising that you didn't pick up on the fact that this was exactly the way that Storm operated. I'm sure you can see that now, but I wonder why your experience didn't alert you to it when you were in discussions with Storm prior to signing up.


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## Frank Ainslie (12 September 2012)

SJG1974 said:


> How did they get it wrong?
> 
> As mentioned, the strategy is perfectly legit.  Nothing illegal.  It was a strategy that I understand many non Stormers also employed. The problem isn't the strategy itself...it is how it was sold to the clients, the clients it was sold to and further on, how Storm's advisers managed everything when the **** hit the fan during the GFC.
> 
> ...




Hi SJG 1974

Nice to see you back! 

_"As mentioned, the strategy is perfectly legit.  Nothing illegal.  It was a strategy that I understand many non Stormers also employed. The problem isn't the strategy itself...it is how it was sold to the clients, the clients it was sold to and further on, how Storm's advisers managed everything when the **** hit the fan during the GFC"_

Exactly! You’ve just about got it spot on this time! 

As for people being able to see that it was _‘high risk’_, in our case, bearing in mind that we had 1.5 or more in unencumbered assets, the policy never seemed risky because we thought we had plenty of capital to back up the loans and the safe guards that Storm said it had in place would allow us to sell down if those limits were reached. We were only in Storm for 15 months and in that time Storm managed to over-leverage us needlessly because they saw us and many other clients as cash cows for them. Fees and commissions were everything to Storm and we, Storm’s customers, ran a poor second.

No professional ever pointed out to us the dangers of over-leveraging. Not our accountant or others whom we approached. I think we must all remember that over-leveraging was the norm in those days. Storm was hardly the exception as everyone here would have us believe. Everyone did it from banks right the way through. See the movie “Too Big To Fail!” which is doing the rounds at the moment.

Storm was not alone though in deceiving us. The Banks involved were fully complicit in the deception and they will be exposed in Court.

From tomorrow, I will be unavailable until Monday week so if anybody addresses any postings to me, don’t be surprised if you don’t get a response until then.


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## Frank Ainslie (12 September 2012)

bunyip said:


> Frank
> 
> I have no doubt you're correct in saying that consumers are seen as a means to an end by many in the financial industry.
> Clearly, those who receive a commission on the financial products they sell would have an incentive to sell the products that pay the highest commissions. Obviously this is good for the salesman but the consumer may not be getting the best product for his purposes.
> ...




Hi Bunyip,

This tendency to put self-interest first manifests itself in the financial sector (financial advisers and Banks) I believe, far more than it does in other service industries because of its very nature. At its centre investors assets act as a light that attracts the harmless and the unsavory that operate within. In my own industry, if we did not provide a service, clients would simply switch to another forwarder. Because we knew this, service was everything although we always ensured that the service was cost effective to both our company and the clients involved. Nobody gave us secret commissions or incentives to use their particular airlines or shipping companies, but rather any incentives that were offered were always passed on to our clients. A completely different mindset seems to exist in the financial sector. Certainly, my business experience was a far cry from what I have now discovered about the financial sector in general.

In other words, we had to put our clients interests first or we would not retain their business. We always worked on the premise that our service fees would give us the necessary profit to operate effectively with a decent bottom line, not an outrageous one! Clients knew up front what they were getting and we knew what we were getting. 

The way financial advisers like Storm operated is something else again! I had no experience of such methodology because it is an alien concept in my industry.

Ethics and integrity in the financial advisory industry, it would seem, very much depend on the individual financial adviser concerned. Unfortunately, as we have seen over the years, many in that industry that have failed the test. To my mind, it is an indictment of the advisory industry and the way it functions. 

Whatever, it is not something my past business experience would prepare me for! If it had, I wouldn't be in this position today!


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## Solly (12 September 2012)

pilots said:


> No I do not condone criminal activity, but if you had ever been in business you would know that the wheels WONT turn if you don't grease them. One of the sad things with Storm was the old people that was conned in to investing millions of dollars that they could have lived on with out getting conned in to this scam, you could say a lot of the people that got coned here was just plain GREEDY. Whats that old saying, if it looks to good to be true????????????????????????????




It is refreshing that you do not condone criminal activity. Regarding your statement, "wheels WONT turn if you don't grease them", the greasing of wheels is either lawful or unlawful. I have gained the understanding from your words that you would only endorse "greasing" if it was lawful. If people were "conned", should not that allegation be fully examined ? I also ask the question, is being "GREEDY" unlawful ?


----------



## pilots (12 September 2012)

Solly said:


> It is refreshing that you do not condone criminal activity. Regarding your statement, "wheels WONT turn if you don't grease them", the greasing of wheels is either lawful or unlawful. I have gained the understanding from your words that you would only endorse "greasing" if it was lawful. If people were "conned", should not that allegation be fully examined ? I also ask the question, is being "GREEDY" unlawful ?




Solely, it is not unlawful to be GREEDY, but some of storms wood ducks was just to GREEDY, as to the people getting conned, it Is real easy to con a wood duck. I read some place that 75PC of the investors that went to storm walked away, bet they are real happy today. Looked at TV tonight and saw a sad case of what looked very much it could have been a storm deal gone wrong, now they believed the adviser and what have they got now???.


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## Frank Ainslie (13 September 2012)

pilots said:


> Solely, it is not unlawful to be GREEDY, but some of storms wood ducks was just to GREEDY, as to the people getting conned, it Is real easy to con a wood duck. I read some place that 75PC of the investors that went to storm walked away, bet they are real happy today. Looked at TV tonight and saw a sad case of what looked very much it could have been a storm deal gone wrong, now they believed the adviser and what have they got now???.




Sorry but your argument falls down once you accept that the people in Storm were conned. People went to Storm for financial advice and were deceived. That's the issue here, not their motivation for using the services of Storm which you have assumed was greed. Incidentally, this is an assumption rather than a fact! The law doesn't work on assumptions although the CBA resolution scheme seems to be one exception. 

There is no excuse for conning thousands of elderly people out of their life savings! If people in our society can condone such behavior, then  I'm afraid they are as morally bankrupt as the rogues that are in the dock. 

At the end of the day this is about wrongdoing, pure and simple. I can just see the Judge's face if one of the lawyers from the Banks were to stand up and say, _"The fact of the matter, my lord, is that these people that invested in Storm were just plain greedy and should have known that financial advisers and banks can't be trusted! After all, common sense and history tells us that greed is good! My clients (the banks) just acted on their primal instincts! After all, why do old people need money at their age? They'll all be dead shortly anyway!"_

Silly? Exactly! So let's stay focused on what really happened rather than make it up as we go along!


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## ASICK (13 September 2012)

*What's Wrong with Greed?*

http://static.justchristians.com/abundantLife/061997/5.html

"The truth is, few of us are "satisfied with . . . a little silver and a little gold." We want new cars, new homes, new clothes, new toys, new this and new that."

(I'm not religious - just thought some of the content was pertinent)


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## Ijustnewit (13 September 2012)

This from 2007 , Areas of interest Section 4 and Section 5.

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Submission-Inquiry%20into%20older%20people%20and%20the%20law.pdf/$file/Submission-Inquiry%20into%20older%20people%20and%20the%20law.pdf

Just might add some substance as to why elderly investors have been taken in by the likes of Storm.
Seems Asic and the Government where quite aware that elderly Australians knew little about finance and the risks in 2007 , and yet they where driving business to the doors of the like telling them they should do something about there finances rather than rely on pensions. In allot of cases it wasn't greed, it was trying to do the thing for there future and there grand kids futures. Little understanding about money and finances as backed up in the report of 2007. As I think Bunyip has said, "an accident waiting to happen".


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## pilots (13 September 2012)

Frank Ainslie said:


> Sorry but your argument falls down once you accept that the people in Storm were conned. People went to Storm for financial advice and were deceived. That's the issue here, not their motivation for using the services of Storm which you have assumed was greed. Incidentally, this is an assumption rather than a fact! The law doesn't work on assumptions although the CBA resolution scheme seems to be one exception.
> 
> There is no excuse for conning thousands of elderly people out of their life savings! If people in our society can condone such behavior, then  I'm afraid they are as morally bankrupt as the rogues that are in the dock.
> 
> ...



Frank in my books conned and deceived is the same.


----------



## Frank Ainslie (13 September 2012)

Lone Wolf said:


> You're assuming that the adviser you hired to investigate Storm did their job the way you expected them to (I see a pattern forming here). There are two possibilities - One is that, now hold on, this might come as a shock to you - the other adviser didn't do their job properly. The other possibility is that the other adviser didn't understand that you thought this was a conservative strategy.
> 
> Honestly Frank, what do you stand to gain from convincing other people that it's impossible to determine the risk involved in a strategy? I'm not asking you to admit that you should have avoided being where you are now. You've already explained why you shouldn't have needed to do your own research and I accept your personal opinion even if I don't agree.
> 
> Why do you feel the need to go one step further and try to prevent us from helping other investors monitor their risk level? You claim that it's utterly impossible for anyone other than a trained professional to understand the risks of borrowing money. Anyone who thinks they can is apparently "up themselves". Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not. You have never once explained why you think those simple steps won't uncover a high risk strategy. If you can't explain why it won't work, how are you in a position to comment?




Hi Lone Wolf,

You sound as though you are speaking for the financial industry in general? 

_“Honestly Frank, what do you stand to gain from convincing other people that it's impossible to determine the risk involved in a strategy? I'm not asking you to admit that you should have avoided being where you are now.”_

During my business life I was involved in endless strategies where clients were concerned. We moved everything from personal effects to massive generators (60 tonnes and more) to and fro around the world. Among my many positions, I was the General Manager for the  Brambles Steamship Joint Venture in PNG. Therefore, I was also involved in strategies to generate and promote business. There were many who invested in Storm that had similar backgrounds so for people to try and group us as financially inept have missed the point completely. 

There is nothing wrong with any strategy providing it is honestly thought out and is based on sound principles. However, any strategy can fail because none of us are infallible. Unfortunately, the strategy adopted by Storm was neither honest or sound. Rather, it was one based on the best interests of those that devised it rather than those it was devised for! 

Certainly, there are financial advisory firms out there that are honest in their dealings,  but they have been roped into the Storm holocaust, being found guilty by association which is most unfair. However, it is now up to the honest ones to rid themselves of those charlatans that exist in their industry. Until then, my message is clear to all would-be investors. “BEWARE!”

Need I also remind you and others that the ONUS is on a professional financial adviser to give honest and sound advice rather than those receiving it. How can anyone evaluate a financial strategy if it has been designed to mislead investors by leaving out the bad news whilst highlighting benefits that are unfounded?

If financial advisers in general cannot be trusted, perhaps they should be made to issue a financial health warning, “USE THIS SERVICE AT YOUR OWN RISK!” 

I’m sorry but until those within the financial sector have the will to fix what to me (and thousands of other ‘Stormies’, I dare say) seems like a morally corrupt self–interested industry, I will continue to warn others to go  elsewhere. 

_"Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not." _ Perhaps someone should have explained that to the various Banks around the world that have plunged the world into financial chaos. If the Banks can’t get it right, what’s the use of explaining it to investors who for the most part will be seeking loans from them? 

I know! I know! I’m just another bitter and twisted ‘Stormie’ that just happened to walk in the wrong door and got finacially mugged for his trouble. If I had bothered to look properly then I would have been able to work out that Storm’s advisers were a bunch of con artists. How many clients did Storm have by the way? I think it was between 12,500 and 13,000. It’s a funny thing but when you hear a number like that one doesn’t feel so bad. However, if it happened to you, your parents or someone you know personally, the magnitude is only then brought home to you.

_"Why do you feel the need to go one step further and try to prevent us from helping other investors monitor their risk level?"_ Are you kidding me? The Storm debacle occurred because Storm did not monitor people’s risk levels. They went against our wishes because it suited them to do so because they received financial benefits from doing so. Now you are saying that somehow we should trust others in the industry to act differently! Funny, how that word, “trust” keeps cropping up. What the heck are we paying therm for if we have to do all the work ourselves? Why are we paying them for their expertise if we have to check to see whether what they are telling us is correct? Why do we need financial advisers in the first place if we can do it all ourselves?

_"If you can't explain why it won't work, how are you in a position to comment?" _I’m in a position to comment because I lost my life savings by trusting financial advisers. Let me say it once again. IT DOESN”T WORK IF THE PEOPLE GIVING YOU FINANCIAL ADVICE ARE LYING THROUGH THEIR BACK TEETH! How can I or any other Stormie ever again trust anyone in the financial advisory sector! Would you if you were in our shoes? But then I forgot, you would never be in our shoes to start with because you are able to spot a con? It’s a pity the thousands that invested in Storm did not have your prescience. That's all I can say! For that matter it's a pity the financial sector in general around the world does not take a leaf out of your book. It's a bloody mess out there and the consumers didn't cause it! Those working in the financial industry did! _"Those in glass houses and all that..!"_

Have a good day! I'm off now and shall return on Monday week.


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## Julia (13 September 2012)

Frank Ainslie said:


> _"Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not." _ Perhaps someone should have explained that to the various Banks around the world that have plunged the world into financial chaos. If the Banks can’t get it right, what’s the use of explaining it to investors who for the most part will be seeking loans from them?



You are deluded if you genuinely think the banks that participated in the dodgy subprime loans, and the CDO's and CDS's that followed, were claiming it to be a conservative strategy.  Of course it wasn't.
Any more than Storm's 'strategy' of having retirees double gear into the market was.


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## SJG1974 (13 September 2012)

Julia said:


> You are deluded if you genuinely think the banks that participated in the dodgy subprime loans, and the CDO's and CDS's that followed, were claiming it to be a conservative strategy.  Of course it wasn't.
> Any more than Storm's 'strategy' of having retirees double gear into the market was.




Yep a lot of the Storm saga revolves around the issue of "conservative vs aggressive".

We have many clients claiming it was sold to them as conservative, Storm have claimed the clients knew the risks. Two sides, two different stories.  

We have heard clients on this forum who went into it to build their wealth and knew the risks of gearing into shares, yet many went into the same strategy thinking it was conservative and was designed to protect their money.

And we know that many more people walked away than proceeded with the strategy, so they obviously saw something they didn't like. If it was impossible to uncover the risks, then I wonder why these people didn't jump on board?  How could they unravel the mystery?

In simple terms, all a great deal of clients needed to know was that double gearing into shares is not conservative.  If they knew this, then many wouldn't have touched it with a barge pole, and they wouldn't be in this mess, like the 3 in 4 who walked away.

Thats all their own research and second opinions needed to uncover, nothing more, nothing less. Is double gearing into shares conservative? Ridiculously simple really. And unfortunately for these people, the answer to that question is not hard to find, if you are prepared to look for it.


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## bunyip (13 September 2012)

Frank Ainslie said:


> Hi Bunyip,
> 
> This tendency to put self-interest first manifests itself in the financial sector (financial advisers and Banks) I believe, far more than it does in other service industries because of its very nature. At its centre investors assets act as a light that attracts the harmless and the unsavory that operate within. In my own industry, if we did not provide a service, clients would simply switch to another forwarder. Because we knew this, service was everything although we always ensured that the service was cost effective to both our company and the clients involved. Nobody gave us secret commissions or incentives to use their particular airlines or shipping companies, but rather any incentives that were offered were always passed on to our clients. A completely different mindset seems to exist in the financial sector. Certainly, my business experience was a far cry from what I have now discovered about the financial sector in general.
> 
> ...



So your past business experience didn’t prepare you for Storm, eh Frank?

That sounds like a pretty damn poor excuse to me. You were 65 years old - you’d experienced a decent chunk of life, you’d met a wide cross section of people, you’d heard and read about many a con scheme that separated the gullible and unwary from their money. You’d been a private investor, you’d worked with debt before, you’d dealt with businesses on hundreds of occasions, from the simple act of buying a pair of shoes or a new TV, to more important transactions like buying a house or a car or whatever. 

Were things always as they were made to seem by the business that was trying to sell you something? Was every person you dealt with honest and up front and completely on the level with you? If they were, then they were very different to some of the salespeople and businesses I’ve dealt with!
Did all your life experiences teach you nothing about the world, nothing about human nature, nothing about the lack of ethics that we see all around us every day??

You lived through the ‘87 stock market crash and saw how it wrecked people financially and emotionally.  In October of 1987 you would have seen how far our market fell in one day, you would have seen all the panic and turmoil on TV and in the papers. Did you learn nothing from that historic event? When Storm told you how their wonderful safety triggers were going to keep you safe in the event of a market fall, did you bother to check into things to find out if they were telling you the truth? Did you consider the possibility of another 1987 style crash, then crunch a few numbers on your pocket calculator to find out how Storm’s safety triggers would perform in that situation?
You almost appear to have had the gullibility and innocence of a small child in your dealings with Storm.....the way you trusted them implicitly and thought they had your best interests at heart, despite the clear warning signs that they were feathering their own nest by getting you to borrow like crazy to fund heavy investment in one of the most risky of all markets, and then creaming 7% off every dollar you invested.

Frank, if it helps you to cope emotionally by telling yourself over and over again that you got fleeced  because your experience in business didn’t equip you to see straight through Storm Financial, then so be it. 
But if you keep trying get this forum to believe this myth, then people like me are going to challenge you and point out a few facts that you're in denial about. 
One of these facts is that your six and a half decades of day to day life experiences should have warned you that we don’t live in a perfect world populated with people of impeccable character. And for that reason, Frank, you should have been far more circumspect and cautious and far less trusting in your dealings with Storm.


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## pilots (13 September 2012)

SJG1974, No mater how hard you try you can not protect the wood ducks, look at the 7:30 report tonight, people invested $150k in a on line betting deal, they now have lost every thing they had including the house. I rest my case.


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## maccka (13 September 2012)

I look forward to a change in the circular  nature of the 'discussions' on this thread over the coming months as the court cases progress.

cheers
Maccka


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## Solly (13 September 2012)

maccka said:


> I look forward to a change in the circular  nature of the 'discussions' on this thread over the coming months as the court cases progress.
> 
> cheers
> Maccka




Maccka, 
The presentation of evidence and subsequent cross-examinations will be of great interest to me.
I'm sure the transcripts will make riveting reading.

S


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## Judd (14 September 2012)

Saves the hassle of extended court action.  The effect on the CBA's bottom line?  Minimal probably.

http://www.brisbanetimes.com.au/bus...36m-in-storm-compensation-20120914-25xan.html



> The Commonwealth Bank has agreed to pay $136 million to compensate thousands of mums and dads who invested in Townsville-based Storm Financial.
> 
> The payment, made by the bank without admitting liability, comes on top of $132 million Commonwealth Bank has already paid to the victims of Storm's collapse.
> 
> ...


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## Julia (14 September 2012)

Judd said:


> Saves the hassle of extended court action.  The effect on the CBA's bottom line?  Minimal probably.



Sure.  Just petty cash to the CBA.
However, if I were a shareholder, I'd like an explanation of what this payout is actually deemed to be for.
Is CBA admitting it ran a UMIS, or is it 'go away money' because a drawn out court case would probably cost them the same as the payout and be more damaging to their reputation?


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## Solly (15 September 2012)

> *Relief for Storm Financial victims*
> 
> Three years after the collapse of Storm Financial, there is some relief for the victims of one of Australia's biggest financial collapses.
> The Commonwealth Bank has agreed to pay another 136 Million dollars in compensation to thousands of investors.





ABC PM abc.net.au


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## Solly (15 September 2012)

> *Lawyer Stewart Levitt of Levitt Robinson *-- who is running a separate Storm class action representing about 300 victims -- said the settlement represented a "disgraceful surrender" by ASIC.




More from Anthony Klan & Jamie Walker @ theaustralian.com.au


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## Solly (15 September 2012)

> *The Commonwealth Bank* said the agreement with ASIC has been reached without any admission of liability.




Source : http://www.couriermail.com.au/busin...-136m-to-victims/story-fn7kjcme-1226474356331


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## Solly (15 September 2012)

Julia said:


> Sure.  Just petty cash to the CBA.
> However, if I were a shareholder, I'd like an explanation of what this payout is actually deemed to be for.
> Is CBA admitting it ran a UMIS, or is it 'go away money' because a drawn out court case would probably cost them the same as the payout and be more damaging to their reputation?




Julia

One view is that the payment of another $136 Million to Storm victims, is proof that there was nothing wrong with their conduct in this matter. A return of 55 cents in the dollar appears to be a charitable action and consistent with their Statement of Professional Practice and Customer commitment. However, Stewart Levitt may hold another view.

S


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## jjtebj12 (15 September 2012)

Asic were always going to surrender, they always do. But if anyone thinks for one minute that CBA are handing out this money because they are kind hearted - think again. One thing we will not do is roll over like Asic. The general feel from the Class Action is for the case to run its course so the public will know the real story. Then and only then will the opinions of some be changed.

I say thank you to Asic for holding on as long as they did because it enabled us to further strengthen our case!


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## Julia (15 September 2012)

Solly said:


> More from Anthony Klan & Jamie Walker @ theaustralian.com.au



That link makes the story only available to subscribers.

Below are some excerpts:


> "This is a fair outcome," ASIC chairman Greg Medcraft told The Weekend Australian.
> "Many of the Storm (victims) are elderly and retirees and this way we won't spend years in court".
> 
> However, ASIC's decision to drop action against the CBA over its role in the Storm Financial disaster was seen by many as a cop out by the corporate regulator.
> ...




Good to have Mr Levitt's clarification as above.  The ABC's radio story was woefully inadequate.  Listening to it, I had no idea what the CBA were paying 55% of, i.e. the home loan, the margin loan, both????

Hope some more Storm investors will give us their response to this latest news.


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## Solly (15 September 2012)

jjtebj12 said:


> Asic were always going to surrender, they always do. But if anyone thinks for one minute that CBA are handing out this money because they are kind hearted - think again. One thing we will not do is roll over like Asic. The general feel from the Class Action is for the case to run its course so the public will know the real story. Then and only then will the opinions of some be changed.
> 
> I say thank you to Asic for holding on as long as they did because it enabled us to further strengthen our case!




jjtebj12

I believe the term for this in the vernacular is "game on".
You are under excellent direction. 

S


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## Mindstorm (15 September 2012)

Julia said:


> Hope some more Storm investors will give us their response to this latest news.




Hi Julia,

I hope I've done the 'quote' thing correctly.

Link to ASIC Media Release, and their Q&As regarding the agreement that they've reached with CBA:


https://storm.asic.gov.au/storm/sto...d CBA Storm Financial Settlement?opendocument


Sorry, I'm not very 'computer literate', so you may have to copy and paste to your browser to read what's available to all if they visit the ASIC website.

I can't say how anyone else will comprehend these documents, but it's my understanding that it's not only CBA margin loan clients who will 'benefit' from this agreement.  

Mindstorm


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## Solly (16 September 2012)

> *"Storm Financial victim anger over Australian Securities and Investments Commission*
> ANGRY Storm Financial victims have slammed Australia's corporate watchdog for selling them out in a settlement deal with the Commonwealth Bank."




More by Kay Dibben @ couriermail.com.au


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## jjtebj12 (16 September 2012)

Solly said:


> jjtebj12
> 
> I believe the term for this in the vernacular is "game on".
> You are under excellent direction.
> ...




This whole Asic/CBA deal reeks of another underhanded "back door"deal similar to the Slater & Gordan deal where the only one's who received a fair payout were Slater & Gordan.

Waiting to find out how much Asic received towards their legal bills???


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## Lone Wolf (16 September 2012)

Frank Ainslie said:


> Now you are saying that somehow we should trust others in the industry to act differently!






Frank Ainslie said:


> IT DOESN”T WORK IF THE PEOPLE GIVING YOU FINANCIAL ADVICE ARE LYING THROUGH THEIR BACK TEETH!




Hi Frank. I have no idea what you're talking about above. I've been stressing the importance of understanding the strategy for yourself, yet you keep talking about trusting someone else to accurately explain the risk to you. Either you have me confused with someone else, have completely misunderstood what I've said, or you simply haven't read what I've written. You also frequently put words in my mouth that I strongly disagree with. The only way for me to stop being misrepresented by you is to stop talking to you. 

Good bye Frank. It's a shame that we couldn't reach a mutual understanding even if we were never going to reach an agreement.


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## Judd (16 September 2012)

jjtebj12 said:


> This whole Asic/CBA deal reeks of another underhanded "back door"deal similar to the Slater & Gordan deal where the only one's who received a fair payout were Slater & Gordan.
> 
> Waiting to find out how much Asic received towards their legal bills???




Depends on how much the Federal Government, ie the taxpayer, funds the coffers of ASIC through the budgetary appropriations process.


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## Julia (16 September 2012)

Mindstorm said:


> Hi Julia,
> 
> I hope I've done the 'quote' thing correctly.



Perfectly.



> Link to ASIC Media Release, and their Q&As regarding the agreement that they've reached with CBA:
> 
> 
> https://storm.asic.gov.au/storm/sto...d CBA Storm Financial Settlement?opendocument
> ...



Many thanks, Mindstorm.  The links worked well.



> I can't say how anyone else will comprehend these documents, but it's my understanding that it's not only CBA margin loan clients who will 'benefit' from this agreement.



I've only scanned through them quickly but got the same impression.  This is different from what Mr Levitt described.
The documents seem pretty complex.  It's not difficult to imagine at least some weary Storm investors will accept the settlement without question, particularly as it's clearly a done deal and no amount of protest will make any difference.


----------



## Julia (16 September 2012)

Lone Wolf said:


> Hi Frank. I have no idea what you're talking about above. I've been stressing the importance of understanding the strategy for yourself, yet you keep talking about trusting someone else to accurately explain the risk to you. Either you have me confused with someone else, have completely misunderstood what I've said, or you simply haven't read what I've written. You also frequently put words in my mouth that I strongly disagree with. The only way for me to stop being misrepresented by you is to stop talking to you.
> 
> Good bye Frank. It's a shame that we couldn't reach a mutual understanding even if we were never going to reach an agreement.



Despite your valiant attempts to be rational and more than civil in your remarks, you have reached the same conclusion many of us have.
Your posts were nonetheless appreciated for their sensible contribution to the thread.


----------



## bunyip (17 September 2012)

Frank Ainslie said:


> During my business life I was involved in endless strategies where clients were concerned. We moved everything from personal effects to massive generators (60 tonnes and more) to and fro around the world. Among my many positions, I was the General Manager for the  Brambles Steamship Joint Venture in PNG. Therefore, I was also involved in strategies to generate and promote business. There were many who invested in Storm that had similar backgrounds so for people to try and group us as financially inept have missed the point completely.




What you or anyone else did in their business life is completely irrelevant to a discussion on how or why you were cleaned out in the Storm debacle.
In your career you may well have been as adept as you keep telling us. 
But when Storm presented you with a highly risky strategy, you were grossly inept in not considering past stock market performance as a guide to the potential for disaster if you went ahead and mortgaged your home and borrowed to the hilt, then double geared on top of that, to invest in the market.
All it was going to take to put you in serious financial difficulty was one decent market plunge in combination with the loss-magnifying effect of heavy gearing.
You would have seen this very clearly if you were as financially adept and astute and circumspect as you would have this forum believe.
And don't waste any more of your time or mine by raving on about what Storm told you about their safety triggers or any other aspect of their model. You weren't investing in Storm, you were investing in the stock market, therefore you should have been using the stock market as your main source of information. A quick investigation of past market slumps would have enabled you to see that Storm was misleading you by claiming their strategy was safe and conservative. That fact alone would have given you sufficient reason to walk away.
It almost beggars belief that someone who was considering investing a couple of million dollars in the market would not even bother to thoroughly investigate past market performance, for the purpose of getting some idea of how future market performance may effect his investment.


----------



## maccka (17 September 2012)

> It almost beggars belief that





What beggars belief is that there are STILL people who cannot see that this matter is not a simple one. 

What beggars belief is that there are STILL people who refuse to see that there is enough smoke to cause people to need to go to a court to see where the fire actually started and have a high level court work out what actually happened and whether it was/is legal or not.

What beggars belief is that the bullying and carrying on that we see on this forum is worse than any school yard carry on.  Just like in the school yard, it goes in cycles.  It has been relatively quiet of late and now it is ramping up again.  It is worse because at least in a school yard the students concerned are not adults and are full of raging hormones that make their brains behave in an irrational fashion. Honestly, sometimes you remind me of the scene in Harry Potter 5 where Dudley and his pack attempt to verbally attack Harry in the playground. You are all theoretically adults ... theoretically sensible, intelligent adults.  Please behave like sensible, intelligent adults.  

This is in court.  It is not simple.  People have been harmed.  It actually has nothing to do with many of you.  A number of the people who participate in this particular thread of the ASF have no personal involvement at all and have very little factual knowledge (although they have LOTS of opinion) about what happened.  Perhaps it might be wise for you to stop attacking (either overtly or covertly) people who have different views to you at least until a decision has been made by people who are far more qualified than most of the people on this forum.

Thank you 
Maccka

_And for the record, before you jump on me, Julia, I am aware that I have not quoted strictly correctly.  I have done so deliberately as I was trying to distance my comments from the person from whom I was 'borrowing' their written turn of phrase.  I did not want to appear to be attacking that poster as that is not my intention.  I was simply trying to use their turn of phrase as a lead to my own post. _


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## Ijustnewit (17 September 2012)

Agree here  Maccka , certainly "the wheels on the bus go round and round and round ......"
As in life and forums there will always be differing opinions . Can be healthy , can be unhealthy . What's important is not to eat too much of it and not put to much on others plates so they can feed off the leftovers.
 Like Frank and yourself and myself and others we are living through this as a very real experience , a little different to standing on the sidelines and yelling out " you should have passed the ball !!" .

"Facts do not cease to exist because they ignored. "
Aldous Huxley

Take care my Friend


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## Julia (17 September 2012)

maccka said:


> What beggars belief is that there are STILL people who cannot see that this matter is not a simple one.
> 
> What beggars belief is that there are STILL people who refuse to see that there is enough smoke to cause people to need to go to a court to see where the fire actually started and have a high level court work out what actually happened and whether it was/is legal or not.
> 
> ...



I have no interest in jumping on you or anyone else, Maccka.

You make a very reasonable point.  It's quite true that many of us who comment on this miserable mess have no personal involvement.   That is surely to be expected when one posts on a public forum designed to garner opinions widely on markets, money, investments, Super et al.

When Storm investors make various allegations on such a public forum, it's surely reasonable that any other member who disagrees should be free to say so.
Presumably there must be other avenues for Storm investors to collectively say whatever they wish, i.e. support groups, where disagreement is less likely to occur, as that seems to be what you are objecting to.

I'd be the first to agree that the Storm situation is complex.   Throughout now three years of discussion I still have no idea who filled in the details of the loan applications.  It is not clear whether Storm investors know and are not saying, or they do not know either.

I do genuinely feel for the financial and emotional distress of anyone personally affected by this fiasco.
Many people have been good enough to tell us of their involvement and how they have been affected.

It can, however, be frustrating and irritating to see the same absurd claims (that double gearing into a volatile share market was conservative strategy) aired over and over again.  If someone does this on a public forum relating to investments I don't know why you would not expect others to contradict such an unreasonable assertion.

I gather there is now a delay to the start of the court case as a result of the ASIC/CBA agreement.
Hopefully it will not be for too long.  My sympathy to all the Storm clients further frustrated by this.
The sooner the whole mess is concluded, the better.


----------



## DocK (17 September 2012)

maccka said:


> What beggars belief is that there are STILL people who cannot see that this matter is not a simple one.
> 
> What beggars belief is that there are STILL people who refuse to see that there is enough smoke to cause people to need to go to a court to see where the fire actually started and have a high level court work out what actually happened and whether it was/is legal or not.
> 
> ...






Ijustnewit said:


> Agree here  Maccka , certainly "the wheels on the bus go round and round and round ......"
> As in life and forums there will always be differing opinions . Can be healthy , can be unhealthy . What's important is not to eat too much of it and not put to much on others plates so they can feed off the leftovers.
> Like Frank and yourself and myself and others we are living through this as a very real experience , a little different to standing on the sidelines and yelling out " you should have passed the ball !!" .
> 
> ...




It is for reasons such as those you outline above that I very rarely post on this thread anymore.  It's largely a waste of time conversing with someone whose ears are firmly shut and mind firmly closed.  I do want to thank you though as I just won a little bet on both the content and author of the anticipated response - I just knew Julia wouldn't let me down


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## doobsy (17 September 2012)

I am interested to see what opinions people have here.

Just spoke to an ex storm client we occasionally do some strategy work for. I asked who their margin loan was through in light of the recent CBA scheme announcement.

They borrowed against the home from NAB as it was where there mortgage was (Yes, the investment loan was on top to take them back to 80% borrowing against the house) and the margin loan was through St George as it was offering a good interest rate at the time.

Now those are 2 names of financial institutions that rarely get mentioned in this forum. Maybe NAB weren't competitive on the home loans and they are the first I have seen to use St George through the Storm strategy.

They have been just as devastated as the rest.

They will NOT however have any chance of a UMIS decision or out of court settlement as the 2 financiers involved are to all apparent views "innocent" of most of the claims against some of the others.

They got their margin call processed in a timely fashion but I fear will be in a far worse position at the end of this than those through CBA, Macquarie, BOQ based on assumption of who will cut deals with ASIC and will probably receive some compensation.

My question to the whole forum (for and against the banks paying out) is: Is it fair that these Storm clients end up worse off simply because their adviser chose different banks?


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## bunyip (17 September 2012)

maccka said:


> What beggars belief is that there are STILL people who cannot see that this matter is not a simple one.
> 
> What beggars belief is that there are STILL people who refuse to see that there is enough smoke to cause people to need to go to a court to see where the fire actually started and have a high level court work out what actually happened and whether it was/is legal or not.
> 
> ...



Macca

You have a history of being very one-sided in your views about who is bullying whom. 
If you go through Franks posts, both recent and not so recent, you’ll see that on many occasions he’s resorted to name-calling, ridicule, derogatory comments, sarcastic remarks, personal abuse, and open hostility towards various people who have disagreed with his views.
In the last week or so, for example, he stated that people were ‘up themselves’ if they thought they could have seen the pitfalls in the Storm strategy.
If you’re so concerned about bullying, you would have rebuked Frank for the many times he’s resorted to behavior that’s disrespectful of other forum members and is clearly in breach of forum rules.

Furthermore, you seem to hold the rather queer view that people are being bullies by responding to allegations which are not supported by any reasonable argument or logic. The same tired old statements are repeated over and over again by Storm victims, and the recurring theme is ‘I’m not responsible for my decisions and actions – it’s all someone else’s fault’.
And yet you seem to think that people are unreasonable and are resorting to bullying by voicing their disagreement with those statements. 

On a different note, I’m perplexed by your statement_ ‘What beggars belief is that there are STILL people who cannot see that this matter is not a simple one.’_
I’d like to know who you’re referring to in making that statement? Nobody that I’m aware of has stated that the Storm matter overall is a simple one. Perhaps you’ve misunderstood what we’ve been saying in relation to simplicity.  
We’ve stated quite correctly that the Storm strategy was very simple.....mortgage homes, borrow to the hilt to buy index funds, use double gearing to raise further loans to invest in index funds. Further down the track as assets increase in value, use this additional value as collateral to raise even more loans to invest further in index funds. Never sell out, never reduce debt, hang in there for the long haul.
There is NOTHING complex in this strategy – it’s just about as simple as it gets. 
What we’ve also said is that it was a simple matter to do some basic research to uncover the huge risk in the strategy.......a small amount of time spent looking into past stock market slumps, and a bit more time spent investigating the pros and cons of margin loans, would have provided investors with all the info needed to spot the danger is Storm’s proposal.

However, the Storm strategy itself, and the research that would have uncovered the risk, are just two aspects (albeit very simple ones) of the overall Storm matter. Obviously that are many other aspects to the Storm business, some of which are clearly quite complex and need to be sorted out in a court of law. I don’t claim to know what these other aspects are. But I do know with absolute certainty that Storm had a simple strategy, and finding the risk in the strategy was a simple matter for anyone who put a small amount of effort into looking for it.

Macca, I understand that you are not a Storm victim, but your family is. You’re in a unique position to help future investors avoid what happened to Storm investors, by explaining the traps that ensnared your family, and how those traps can, with the benefit of hindsight, be avoided from here on. And yet we hear nothing at all from you in this regard. Not only do you seem to have little interest in helping people to avoid the next Storm that comes along, but you appear intent on rebuking those of us who do.
I think you need a change in attitude – your actions would be far more commendable if you tried to help people instead of selectively accusing a small number of people of being bullies because they express their views and challenge some peoples’ attitudes and beliefs.


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## Solly (17 September 2012)

bunyip,

I wish to put this proposition to you. 

If you found yourself in a situation where your deliberate actions put you in a position that caused direct harm to you, would you seek a remedy ? 

I understand if do choose not to respond.

S


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## Julia (17 September 2012)

DocK said:


> It is for reasons such as those you outline above that I very rarely post on this thread anymore.  It's largely a waste of time conversing with someone whose ears are firmly shut and mind firmly closed.  I do want to thank you though as I just won a little bet on both the content and author of the anticipated response - I just knew Julia wouldn't let me down



It's good to know that your happiness can be derived so easily.
Perhaps you'd care to explain exactly what in my post you take issue or disagree with.
I will, of course, understand if you find it too difficult.


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## DocK (17 September 2012)

Julia said:


> It's good to know that your happiness can be derived so easily.
> Perhaps you'd care to explain exactly what in my post you take issue or disagree with.
> I will, of course, understand if you find it too difficult.




Nothing difficult about it - and nothing worth taking issue with either - simply entirely predictable.  Upon reading Maccka's post it was pretty good odds that you'd feel the need to remind him that "this is a public forum and not a support group and if a group of us wish to repeat ourselves ad nauseum re the absurdity etc etc etc...."  

Didn't say I was happy - although I will admit to being horribly smug when proven correct.  Perhaps you know the feeling?


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## bunyip (18 September 2012)

DocK said:


> Nothing difficult about it - and nothing worth taking issue with either - simply entirely predictable.  Upon reading Maccka's post it was pretty good odds that you'd feel the need to remind him that "this is a public forum and not a support group and if a group of us wish to repeat ourselves ad nauseum re the absurdity etc etc etc...."
> 
> Didn't say I was happy - although I will admit to being horribly smug when proven correct.  Perhaps you know the feeling?




And you know what, DocK....when I read Macca’s post I thought it was pretty good odds that you would respond with one of your _‘That’s why I rarely post on here any more etc etc etc’ posts. _
And you didn’t disappoint me.

I’m sure there’s been many a time when you’ve anticipated some of my responses too.
So I guess we’re all predictable to some extent.


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## bunyip (18 September 2012)

Solly said:


> bunyip,
> 
> I wish to put this proposition to you.
> 
> ...



Yes Solly, of course I’d seek to remedy the situation. 
And as a man of honesty and integrity, my remedy would *not* involve blaming others and attempting to get compensation from them for MY deliberate actions that were the cause of the harm.


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## Julia (18 September 2012)

DocK said:


> Didn't say I was happy - although I will admit to being horribly smug when proven correct.  Perhaps you know the feeling?



Not particularly.  I'm often wrong and am always prepared to admit that if someone can genuinely show me that I'm in error.
I guess I just get a bit sick of your own predictability on this thread when I know you're capable of thoughtful and intelligent commentary, such as I recently enjoyed reading in your exchange with Duckman on another thread.  It was a great example of two people intelligently considering something from different points of view and was conducted with civility on both sides.


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## Solly (18 September 2012)

bunyip said:


> Yes Solly, of course I’d seek to remedy the situation.
> And as a man of honesty and integrity, my remedy would *not* involve blaming others and attempting to get compensation from them for MY deliberate actions that were the cause of the harm.




bunyip, Thank you for responding.

What actions would you apply in seeking this remedy ?

S


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## Solly (18 September 2012)

> *"Storm bank offer angers woman*
> A FORMER Rockhampton businesswoman vows not to give up the fight to get full compensation for Storm Financial victims."




More by Kerri-Anne Mesner @ themorningbulletin.com.au


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## Solly (18 September 2012)

> *"A week of calm before Storm Financial battle in court*
> THE latest chapter in the long-running Storm Financial saga will not be written for at least another week while victims digest the ramifications of an 11th-hour deal by one of the accused parties."




More by Anthony Marx @ heraldsun.com.au


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## Solly (18 September 2012)

> *"Storm trial stalls amid reaction to surprise Commonwealth Bank offer*
> THE start of the Storm Financial trial in Brisbane has been pushed back another week so victims can decide whether to accept a surprise Commonwealth Bank settlement struck late last week with the corporate regulator."




More by Anthony Marx @ couriermail.com.au


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## Solly (18 September 2012)

*ASIC and CBA Storm Financial Settlement*

Full overview and Q and A here.

Source: https://storm.asic.gov.au/storm/sto...d CBA Storm Financial Settlement?opendocument


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## Judd (19 September 2012)

Some of the statements in ASIC's media release, leads me to suspect that it is feverishly working away with BoQ and Macquarie attempting to reach an agreement before the matter goes to court.


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## Judd (19 September 2012)

http://www.couriermail.com.au/news/...c-case-dismissed/story-e6freon6-1226477293036



> *Storm Financial founders Emmanuel and Julie Cassimatis want ASIC case dismissed *
> 
> LAWYERS for Storm Financial heads Emmanuel and Julie Cassimatis have urged a Federal Court judge to dismiss the case brought against them by the corporate regulator.
> 
> Counsel Shane Doyle, SC, attacked the Australian Securities and Investments Commission case as having "no reasonable prospects of succeeding".


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## bunyip (19 September 2012)

ASIC calculates the total loss suffered by all investors who borrowed monies from various banks to invest through Storm to be approximately $832 million.
Someone will surely correct me if I’m wrong, but didn’t I see a figure of three billion dollars being quoted as the amount that Storm investors supposedly lost?

It’s pleasing to see that Storm directors and Storm financial advisers will not benefit from the agreement between ASIC and CBA. Nor should they – nobody could be less deserving of financial compensation than these people who promoted the highly risky Storm model as safe and conservative.

Another interesting point.....as I read it, investors have until October 17 to abandon any further court proceedings against CBA, otherwise CBA will not be obliged to pay them any compensation. 
That’s less than a month – not much time for investors to make such an important decision.

All in all it looks like this UMIS thing has been a bit of a fizzer so far. ASIC would be proceeding with its UMIS allegation against CBA if it felt it could get a conviction. I think it’s a reasonable assumption that ASIC’s agreement with CBA will set the tone for similar agreements to be reached with the other banks in question.
As for CBA, I suspect that their agreement to pay out $136 million is simply the cheapest and most expedient option for them. If they refused to pay out and instead went to court, the cost to them would likely be more than 136 million even if they won the case.


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## doobsy (19 September 2012)

bunyip said:


> ASIC calculates the total loss suffered by all investors who borrowed monies from various banks to invest through Storm to be approximately $832 million.
> Someone will surely correct me if I’m wrong, but didn’t I see a figure of three billion dollars being quoted as the amount that Storm investors supposedly lost?
> 
> It’s pleasing to see that Storm directors and Storm financial advisers will not benefit from the agreement between ASIC and CBA. Nor should they – nobody could be less deserving of financial compensation than these people who promoted the highly risky Storm model as safe and conservative.
> ...




Think you will find the $832M is the nominated figure of losses caused by having a CBA linked (Colonial) margin loan.

Will be interesting to see if Macquarie figures are similar and what is seen to be losses from BOQ home loans.


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## bunyip (19 September 2012)

Solly said:


> More by Kerri-Anne Mesner @ themorningbulletin.com.au




I can’t be certain, but I strongly suspect that the anonymous Rockhampton woman is none other than one of the abusive firebrands who is a member of this forum and has posted a number of times on this thread.
The person I refer to sent me and a number of other members PM’s in which she identified herself, told us where she was from, and outlined her background and the circumstances surrounding her unfortunate experience with Storm. Her language was very strongly worded and her tone very pugnacious, to say the least.
Many of her posts to this forum have been extremely aggressive and in some cases downright abusive and bullying towards other members. 
Interestingly, Maccka has never once rebuked her for her bullying.

I stress again that I’m not certain that the person I’m talking about is the same Rockhampton woman mentioned in that article.


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## doobsy (19 September 2012)

bunyip said:


> ASIC calculates the total loss suffered by all investors who borrowed monies from various banks to invest through Storm to be approximately $832 million.
> Someone will surely correct me if I’m wrong, but didn’t I see a figure of three billion dollars being quoted as the amount that Storm investors supposedly lost?
> 
> It’s pleasing to see that Storm directors and Storm financial advisers will not benefit from the agreement between ASIC and CBA. Nor should they – nobody could be less deserving of financial compensation than these people who promoted the highly risky Storm model as safe and conservative.
> ...




Actually scrap that - further reading is the $832M is loss suffered by investors who borrowed monies. One must then assume that what makes up the other $2B lost is a mix of monies bought to the table by investors and not borrowed. I wonder if there is an allocation they have assigned to Storm as having caused loss.

The thing that I think will upset many Stormies is that if CBA are "enemy #1" and ASIC has pushed as hard as they can and are happy with 55c in the $ then the likely result for the others is that level at worst. 50 or 45% might be more likely.

Personally I think that is probably a fair reflection.


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## doobsy (19 September 2012)

doobsy said:


> Actually scrap that - further reading is the $832M is loss suffered by investors who borrowed monies. One must then assume that what makes up the other $2B lost is a mix of monies bought to the table by investors and not borrowed. I wonder if there is an allocation they have assigned to Storm as having caused loss.
> 
> The thing that I think will upset many Stormies is that if CBA are "enemy #1" and ASIC has pushed as hard as they can and are happy with 55c in the $ then the likely result for the others is that level at worst. 50 or 45% might be more likely.
> 
> Personally I think that is probably a fair reflection.




Section 12 is the interesting section. They have offset the loss by adding part of monies realised for living expenses + tax benefits etc received over the time they were in the market. As plenty were living the high life as discussed before this has now come back to bite them.


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## Pindibog (19 September 2012)

doobsy said:


> Section 12 is the interesting section. They have offset the loss by adding part of monies realised for living expenses + tax benefits etc received over the time they were in the market. As plenty were living the high life as discussed before this has now come back to bite them.




Once again stating what you have no knowledge of. So tell me about my high life living and that of my parents?!

Bunyip what's with the precise on the rockhamptons woman? This turned into a match making page?


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## Solly (19 September 2012)

bunyip said:


> I can’t be certain, but I strongly suspect that the anonymous Rockhampton woman is none other than one of the abusive firebrands who is a member of this forum and has posted a number of times on this thread.
> The person I refer to sent me and a number of other members PM’s in which she identified herself, told us where she was from, and outlined her background and the circumstances surrounding her unfortunate experience with Storm. Her language was very strongly worded and her tone very pugnacious, to say the least.
> Many of her posts to this forum have been extremely aggressive and in some cases downright abusive and bullying towards other members.
> Interestingly, Maccka has never once rebuked her for her bullying.
> ...




bunyip, 

I invite you to state the user name of the poster who you claim is "one of the abusive firebrands". 
Then others on this forum will have clarity and certainty.
Accusations of abuse and bullying are of a most serious nature.
Bullying is a criminal act in some jurisdictions and this can then be referred.
Without clarity your post appears to be superfluous.

S


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## Solly (19 September 2012)

doobsy said:


> Section 12 is the interesting section. They have offset the loss by adding part of monies realised for living expenses + tax benefits etc received over the time they were in the market. As plenty were living the high life as discussed before this has now come back to bite them.




doobsy,

Where you state, *"As plenty were living the high life"*, I invite you to please cite your references and define what *"high life" *actually is.

S


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## Julia (19 September 2012)

http://www.abc.net.au/pm/content/2012/s3593796.htm

This evening's account from the ABC of counsel for Julie and Manny's request that the case against them be dropped on the basis that there was no reasonable likelihood of it succeeding.

Extract:


> Mr Doyle told the court the pair could not have breached their directors' duties to shareholders, as they were the sole shareholders and sole directors of a company he said was solvent at the time in question. He said if the Cassimatis had exposed Storm Financial to harm, they were entitled to do as the sole directors and shareholders.
> 
> Mr Doyle also argued that ASIC had audited Storm in 2005 - three years before the company collapsed with $3 billion in debts - and the watchdog did not raise any concerns that Storm was at risk of contravening the Corporations Act.
> 
> ...



Justice Reeves is considering his response.


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## SJG1974 (20 September 2012)

We hear repeated references to ASIC having audited Storm pre the GFC and finding nothing wrong with the business.  This appears to be used as a defence by the Cassimatii.

Does anyone know what an ASIC audit entails? Do they audit the viability of the business itself, or do they look specifically at the advice they provide, and more specifically, who it is provided to?

I am guessing that in 2005 the company would have been doing quite well...the market had been good, no risk of margin calls (so no way of telling whether Storm's method of managing the risk of the portfolios was actually capable of being put into practice).  Clients portfolios going up with the rising market...most clients would have been happy you would think....most people are when they are making money...and due to the effects of gearing these people would have been making more than most.

As far as I can tell, at that time, the only thing wrong with the strategy from a legal sense would appear to be appropriateness of it to the people who it was sold to.  Do ASIC go through client files and dig to determine whether the strategy is appropriate for these clients?  Do they review Statements of Advice and pick up how difficult it is to wade through the gobbledegook and get to the facts?  And if it wasn't appropriate, how could it be proven? Clients sign every page of the SoA, Storm advisers I assume would take detailed file notes.  

How can ASIC know that the clients (as many here have claimed) didn't really understand the risks they were taking, and that they thought it was a conservative strategy rather than a high risk one? Because that seems to be at the heart of the whole mess.

Does anyone know what these audits are meant to uncover?


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## doobsy (20 September 2012)

Solly said:


> doobsy,
> 
> Where you state, *"As plenty were living the high life"*, I invite you to please cite your references and define what *"high life" *actually is.
> 
> S




Certainly - high life being living a life they could not afford.

As I fully expect to be jumped on I will go on to explain as I have once or twice before. Please excuse the simplicity.

As an example - Couple, both aged 65, $400,000 home unencumbered, $400,000 in super($200K each), $30,000 in the bank. $10,000 contents and $40,000 in vehicles.

They come to us - the advice is to start an account based pension with the super monies and each draw 5% ($10,000pa) and apply for Age Pension.

Expected outcome:

ABP Income          $20,000
Centrelink            $21,542
Bank Interest        $1,500
*Total               $43,042*

Now this is a modest lifestyle but nothing special. You would probably look to maybe kick up the ABP Income a bit. Living within their means however.

SAME CLIENT WALKS INTO STORM.

Advice: Draw 80% from the home ($320,000), Withdraw the super ($400,000). Invest that into Aust Share Index Fund ($720,000). Take out a margin loan with a loan to value ratio of 50% ($720,000). Capitalise all interest.

Investment value = $1,440,000.

Assumed dividend rate on Aussie Shares - 4%, therefore income generated = $57,600

Interest cost of home loan @ 7% = $22,400
Interest cost of margin loan @ 8% = $57,600

Net position = $57,600 - $80,000 = NEGATIVE $22,400 so therefore no tax

I could add in Franking credits but why complicate things.

But aren't we losing money? NO because we will CAPITALISE the interest which still allows us to claim the tax deduction but we don't actually have to pay it. Lets ASSUME that growth in the assets over time will cover it.

So lets just take the earnings as our living expenses shall we. $57,600 pa. Add the bank interest = $59,100.

That is 37% more than the first client.

But is it sustainable? Since we are capitalising all interest the $80,000 needs to be funded by capital growth. This equates to 5.55% growth needed ($80,000 / $1,440,000) just to cover the interest costs.

ALL of the storm clients I saw after the event were promised and were taking more than just the cash earnings of the fund. They were living beyond what their REAL (not artificially debt inflated) asset base could and should provide.

They were living lives that had incomes between the 37% outlined and 70-80% more than their peers with the same start point. 

I applaud the forensic accountants for taking this into account.


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## bunyip (20 September 2012)

Solly said:


> bunyip,
> 
> I invite you to state the user name of the poster who you claim is "one of the abusive firebrands".
> Then others on this forum will have clarity and certainty.
> ...





Thank you Solly, for your kind invitation to state the username of the person I referred to.
However, I don’t need invitations from you or anyone else. And since I see no point in divulging the username, I won’t be doing so.

Your views about my post being ‘superfluous’ are of no interest to me, since I have little regard for your opinions.

However, if you want to read some truly superfluous posts then I suggest you go back over the many exchanges between yourself and GG in which you discussed flying business class, and booking suites in top hotels so that you could attend the Storm court proceedings. As I read through those posts I gave you both 10 out of 10 for your dilligent efforts to portray yourselves as high rollers with money to burn. Unfortunately I was only able to give you 1 out of 10 for sincerity.


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## Junior (20 September 2012)

SJG1974 said:


> We hear repeated references to ASIC having audited Storm pre the GFC and finding nothing wrong with the business.  This appears to be used as a defence by the Cassimatii.
> 
> Does anyone know what an ASIC audit entails? Do they audit the viability of the business itself, or do they look specifically at the advice they provide, and more specifically, who it is provided to?
> 
> ...




I was involved in an ASIC audit. They provided a list of client's names, and asked for a copy of our files for those clients.  File being everything we stored for that client, including SOA, Fact Find, Authority to proceed, application forms etc. etc.

I'd say with an audit of Storm they probably thought it all looked fine, as they ticked the boxes for having completed the required compliance documents.  i.e. SOA, fact find, disclosure of all fees etc.


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## jjtebj12 (20 September 2012)

Has anyone done a calculation from the Asic deal. ie. if you have a margin loan with cba and a term deposit with cba - how is the calculated.

If you have a home loan with the cba and a margin loan - how is it calculated. Asic have been inundated and they will get back to you in five days. 

Surely there is a simple formula that can be applied.


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## SJG1974 (20 September 2012)

Junior said:


> I was involved in an ASIC audit. They provided a list of client's names, and asked for a copy of our files for those clients.  File being everything we stored for that client, including SOA, Fact Find, Authority to proceed, application forms etc. etc.
> 
> I'd say with an audit of Storm they probably thought it all looked fine, as they ticked the boxes for having completed the required compliance documents.  i.e. SOA, fact find, disclosure of all fees etc.




Cheers Junior.


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## Judd (20 September 2012)

jjtebj12 said:


> Has anyone done a calculation from the Asic deal. ie. if you have a margin loan with cba and a term deposit with cba - how is the calculated.
> 
> If you have a home loan with the cba and a margin loan - how is it calculated. Asic have been inundated and they will get back to you in five days.
> 
> Surely there is a simple formula that can be applied.




jjtebj12,  just a guess but the calculations may not be a simple one.

Here is a link about a secure Storm Financial web-site.  Apparently if ASIC has not already contacted you about access, you need to contact ASIC to get the relevant application form to access the site.

https://storm.asic.gov.au/storm/storm.nsf



> Clients of Storm who suffered financial loss as a result of a Storm investment can gain access to a secure, personal "My Storm Investment" web page.
> 
> The "My Storm Investment" web page provides Storm investors who suffered financial loss a personal extract of their Storm investment, based on information from Storm's computer system. Where you invested in Storm with other investors jointly (e.g. spouse, other family member, family trust or family company) then the information contained in this web page relates to you and those investors collectively. ASIC will be requesting investors for whom personal web pages have been provided to update their personal information. ASIC will also be sending each investor who applies to access their personal web page a questionnaire designed to verify and gather information to assist ASIC in its investigations and commercial resolution discussions.




All the best


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## Judd (20 September 2012)

SJG1974 said:


> ... Because that seems to be at the heart of the whole mess....




Junior has already responded.  So it appears that side of an ASIC audit was, at least at that time, just to tick the boxes to ensure compliance and not whether the strategy was risky or not.  Maybe, maybe not.  I've no idea on that aspect.  I am assuming that any ASIC audit of the Company itself has a different perspective and/or objective.

For me, the heart of the matter is a little different.  A group of individuals of differing ages, generally of the same intelligence and opportunities, some working, family issues, bills to pay, children to care for, concern about future retirement income.  And then there are former clients of Storm Financial.  In other words, people no different from anybody else.

So, loans and borrowing aside, why one person can quickly pick up that $7 per 100 in commission just to be placed in an index fund is an absolute and total ripoff and another cannot see that, is where I fail to understand.  DocK attempted to explain it but I still cannot get my mind around it.  And I say it is at the heart of the matter because if many had been able to identify that at the beginning, they probably would have run away as opposed to merely walking away.

For all the words about needing to trust or not trust, how on earth are investors to be educated in order to be able to identify a ripoff very quickly and not go there?  As for risk, show them an interactive chart or table on what happens if gearing is involved or not.  But as for the first part, it may not be possible unfortunately.  Just a factor in the way each person thinks I suppose.


----------



## jjtebj12 (20 September 2012)

Judd said:


> jjtebj12,  just a guess but the calculations may not be a simple one.
> 
> Here is a link about a secure Storm Financial web-site.  Apparently if ASIC has not already contacted you about access, you need to contact ASIC to get the relevant application form to access the site.
> 
> ...




Cheers - got hold of further details. 

Shouldn't of bothered it is beyond description. Actually it's funny cause 55% is so far removed from the actual offer. Asic should hang their heads in shame. It is worse than Slater & Gordon deal. Asic, Storm, CBA they are all the same - none can be trusted.


----------



## DocK (20 September 2012)

Judd said:


> Junior has already responded.  So it appears that side of an ASIC audit was, at least at that time, just to tick the boxes to ensure compliance and not whether the strategy was risky or not.  Maybe, maybe not.  I've no idea on that aspect.  I am assuming that any ASIC audit of the Company itself has a different perspective and/or objective.
> 
> For me, the heart of the matter is a little different.  A group of individuals of differing ages, generally of the same intelligence and opportunities, some working, family issues, bills to pay, children to care for, concern about future retirement income.  And then there are former clients of Storm Financial.  In other words, people no different from anybody else.
> 
> ...




Perhaps the clearest way of explaining the commission issue is this:  the upfront commission was much higher than what other financial planners charged, but the ongoing charges and trail commissions were either much lower or rebated back.  This had the effect of making the total fees paid lower _provided_ the investment ran for a period in excess of approx 5 - 7 years.  Most clients were looking for a long-term arrangement so _if _all had progressed as outlined it would have been in the client's favour in the long run.  Of course, that didn't eventuate for most and there clearly was an immediate benefit for Storm who no doubt envisaged many years of initial commissions to keep the income rolling in. 

It's probably fair to say that most clients were either unaware that direct investment into indexed funds was quite a simple thing to do for oneself, or were aware but lacked the ability/confidence/willingness/time to do this for themselves.  I realise it's difficult for some on this forum who are used to running their own investments to "get", but there is a large portion of the population who lack either the time/motivation/ability/interest or any combination thereof to attain the ability to manage their own investments.  In my case, I certainly didn't know how  easy it actually is to directly invest into an ETF or LIC.  

There were also, of course, many promises made re management and protection of the investments - but history has shown those were simply never intended to be honoured or became inconvenient to Storm's ultimate agenda.  Until it all went pear-shaped Storm were able to point to the many very satisfied clients and excellent results achieved for many investors,  in justification of their high up-front fees.  It is probably unfair to assume that the average investor blindly handed over their fee without seeing other FPs or doing their sums - I know I ran the numbers and had the GFC not come along to upset our plans we would have been about even fee-wise by now.


----------



## ASICK (20 September 2012)

ASIC has made it quite clear on a number of occasions that it's not a prudential regulator.  For ASIC, it's all about form, nothing at all about substance.


----------



## Solly (20 September 2012)

bunyip said:


> Thank you Solly, for your kind invitation to state the username of the person I referred to.
> However, I don’t need invitations from you or anyone else. And since I see no point in divulging the username, I won’t be doing so.
> 
> Your views about my post being ‘superfluous’ are of no interest to me, since I have little regard for your opinions.
> ...




Thank you bunyip,for your response. 
It is unfortunate that you declined my invitation and that you have little regard of my opinion. I do have regard for your opinion and views and it is disappointing to me that you prefer to not engage. 
I suppose it is because of my craft I find it stimulating to scrutinise when propositions are put forward. I do like to test.

I possess no direct knowledge of GG's financial position and I do not burn money. Your perception, is a matter for you. I find nothing detracting with superfluous posts some may even add value when they entertain with a little irony and deliberate satire. 

When the Storm saga is finalised, I will disappear from this forum forever and will cause no more angst.

S


----------



## Solly (20 September 2012)

doobsy said:


> Certainly - high life being living a life they could not afford.
> 
> As I fully expect to be jumped on I will go on to explain as I have once or twice before. Please excuse the simplicity.
> 
> ...




Thank you doobsy for your effort that gives us your comprehensive view. My understanding is that you are of the belief that there is flaw in the strategy, a flaw that may have been well beyond the understanding of the client. If this is a factual representation, who in your opinion is liable for the losses and subsequent collapse?

S


----------



## Solly (21 September 2012)

> "*Storm lawyers eye legal challenge*
> 
> LAWYERS acting for Storm Financial victims are considering a legal challenge against the 11th-hour deal Australia's corporate watchdog struck with the Commonwealth Bank."




More by Rae Wilson @ qt.com.au


----------



## doobsy (21 September 2012)

Solly said:


> Thank you doobsy for your effort that gives us your comprehensive view. My understanding is that you are of the belief that there is flaw in the strategy, a flaw that may have been well beyond the understanding of the client. If this is a factual representation, who in your opinion is liable for the losses and subsequent collapse?
> 
> S




Solly

My position I think is clear and has been stated previously.

The strategy was unsound. The strategy was 100% the domain of Storm and its advisers. Taking out Franks arguments of UMIS etc and the people behind the client losses are Storm.

Now let me clarify something. For a long time I have said that the banks lent certain groups of clients (retirees, low income earners) money and they shouldn't have. I am all for them getting their money back. I have seen however plenty of clients who could meet all lending criteria and therefore the lending was legitimate. If it is legitimate then the losses are also in my eyes. The second point is the banks need to address the shamozzle that happened around the margin calls. In a simple sense I think they should be put in a position where had the margin call process be enacted at the correct levels they would have some equity left.

Where does that leave us?

1. Client with legitimate lending - some equity back that is in line with the margin call being triggered and processed correctly.

2. Clients who should not have been lent money against their home - re-imbursed for the debt that should never have happened however sustain losses on any other monies involved.

3. Clients who bought all their own money and did not have property to lend against - re-imbursed for margin call stuff ups to the correct level.

I think the forensic accountants (the ones I have met a smart cookies) have it right. Any additional benefits (higher income levels, return of franking credits, other tax deductions triggered that would not have been available if they hadn't geared so highly) should be taken into account. Plenty of clients have fogotten all the little "bonuses" they got along the way.

The 'flaw' you talk about is my belief that markets don't give people averages, they give them +20% one year and -20% the next. The strategy relied on markets continuing to provide the "average" during what we know was a debt driven, high interest rate to low interest rate, high inflation to low inflation environment perfect for asset price appreciation (see residential housing as well). Who put that strategy together and plugged in those assumptions so their figures looked good? Storm.


----------



## Judd (21 September 2012)

DocK said:


> Perhaps the clearest way of explaining the commission issue is this:  the upfront commission was much higher than what other financial planners charged, but the ongoing charges and trail commissions were either much lower or rebated back.  This had the effect of making the total fees paid lower _provided_ the investment ran for a period in excess of approx 5 - 7 years.  Most clients were looking for a long-term arrangement so _if _all had progressed as outlined it would have been in the client's favour in the long run.  Of course, that didn't eventuate for most and there clearly was an immediate benefit for Storm who no doubt envisaged many years of initial commissions to keep the income rolling in.




Thank you for the clarification, DocK.  It was probably not an easy thing  for you to go through again.

From your post I gather the presentation was apparently slick.  I assume that Storm did not point out that for every “step up” I believe it was called, there would be another 7% fee gouge and the clock would start ticking again and the overall time to reach the breakeven point meant the five years would become six years and so on.  All based on an assumption that nothing would go wrong with the plan.  Yep, I can now see how that could be sold to individuals with little experience in financial matters.  Clever.

And you are correct concerning the lack of awareness about investing.  Working part time I do overhear the occasional discussion from my co-workers on the subject.  On a face-to-face basis I steer well clear when such matters are raised because I have no qualifications to provide advice and, more importantly, it would not be well received.  Learnt that particular lesson long ago.

Thank you again and all the best.


----------



## Solly (22 September 2012)

doobsy said:


> Solly
> 
> My position I think is clear and has been stated previously.
> 
> ...




Thank you doobsy for your post. I believe that there are a couple of ex-Storm clients who have just started to read this forum again. I appreciate you re-stating your view, especially your assessment of the three categories of client exposure. Hindsight for them is a wonderful thing, the future is still uncertain for them like many others.

Regarding the 'flaw', I have previously put the proposition to them that they did not possess a depth of understanding of the Storm strategy. Their response to me was that they did not hold a firm understanding of the strategy but had a belief that it was sound based on the reassurances that they had received. I hold the view that they still don't fully understand how the strategy was being implemented and why Storm collapsed. They totally but their trust in others. A lesson learned for them and consequences that their family continues to bear.

S


----------



## Solly (24 September 2012)

> *"Storm victims unite for day in court*
> ...Now she's on a pension and her home is a caravan parked in the Brisbane backyard of two other Storm victims..."




More by Andrew Fraser @ theaustralian.com.au


----------



## Solly (24 September 2012)

> *"Storm banks'motivated by profits': court*
> Banks were "motivated by profits" when they involved themselves in an unregistered financial scheme that cost investors billions of dollars, a court has heard."




More by Christine Flatley @ finance.ninemsn.com.au


----------



## Solly (24 September 2012)

> *"Storm Financial victims to Federal Court*
> Dozens of investors have arrived at the Federal Court in Brisbane for a hearing into the collapse of Storm Financial."




Source: www.skynews.com.au


----------



## Solly (25 September 2012)

> *'"Trial told victims of Storm Financial fed 'nonsense*'
> 
> BANKS earned huge profits while clients of investment firm Storm Financial lost their life savings, a court heard yesterday.
> Mr Myers attacked the Townsville-based operation as a "well-oiled system" like a production line that was highly profitable but also peddled "nonsense" at seminars."




More by Anthony Marx @ couriermail.com.au


----------



## Solly (25 September 2012)

> "*Storm banks 'motivated by profits' court told*
> 
> A court has heard banks were "motivated by profits" when they involved themselves in an unregistered financial scheme that cost investors billions of dollars."




More @ afr.com


----------



## Solly (25 September 2012)

> *'Storm treated clients like numbers' ASIC council Allan Myers QC says*
> 
> The corporate regulator has accused the Bank of Queensland and Macquarie Bank of wanting to "wash their hands" of involvement in the Storm financial disaster.




More by Anthony Marx @ couriermail.com.au


----------



## Solly (25 September 2012)

> *"Storm targets "baby boomers*"
> 
> COLLAPSED financial company Storm Financial targeted "baby boomers" at retirement age and used the lending power of Australian banks "motivated by profit", a court has heard.




More by Rae Wilson @ frasercoastchronicle.com.au


----------



## bunyip (25 September 2012)

Solly said:


> More by Christine Flatley @ finance.ninemsn.com.au




_Storm would then effectively double-mortgage these assets by investing the money in indexed funds and margin loans._

I wonder if Christine Flatley can explain how you *'invest money in margin loans'. *
I know what she's trying to say, but she didn't say it very well.


----------



## bunyip (25 September 2012)

Solly said:


> More by Rae Wilson @ frasercoastchronicle.com.au




_"A person generally not experienced in financial matters but who is comfortably off, in a home not mortgaged or mortgaged to a modest extent and perhaps having other assets such as superannuation, is put into the Storm system,"
 he said._

I can understand that Alan Myers, as a lawyer acting for ASIC against Storm and the banks, is trying to make it look as bad as possible for them.
While I agree with some of what he's saying, he makes one statement that's less than accurate when he says that people were *'put into the Storm system'.*

I'm sure that lawyers for Storm and the banks will quite correctly argue that rather than being ‘put into the Storm system’, Storm clients joined the system completely of their own free will after approaching Storm, seeing what they offered, and signing every page of the SOA to say they understood the strategy.
No doubt the lawyers for the defendants will also argue that there was no pressure from either Storm or the banks, that prospective clients were encouraged to go away and take time to consider the strategy before making a decision on whether to sign up.


----------



## Solly (25 September 2012)

> *Storm spun investors nonsense, court told*
> 
> STORM FINANCIAL lured investors by peppering them with nonsensical financial information at their seminars, a court has heard.
> Allan Myers, QC, representing the Australian Securities and Investments Commission, told the Federal Court in Brisbane yesterday that investors were told they ''can't lose'' if they joined the ''foolproof'' scheme.




Source:smh.com.au


----------



## Solly (25 September 2012)

> *"Storm Financial collapse left wealthy clients destitute, court told*
> 
> ONCE-affluent Storm Financial clients have been left destitute by the collapse of their investments, a Brisbane Federal Court heard this morning.
> 
> On the second day of the corporate regulator's case against two banks, counsel Allan Myers, QC, said inexperienced investors were seduced by Storm's image of "luxury, lavishness and success"




Source: heraldsun.com.au


----------



## SJG1974 (25 September 2012)

Would love to see the slides they used at their induction seminars. Would be some interesting stuff in them no doubt.


----------



## Solly (25 September 2012)

bunyip said:


> _"A person generally not experienced in financial matters but who is comfortably off, in a home not mortgaged or mortgaged to a modest extent and perhaps having other assets such as superannuation, is put into the Storm system,"
> he said._
> 
> I can understand that Alan Myers, as a lawyer acting for ASIC against Storm and the banks, is trying to make it look as bad as possible for them.
> ...




bunyip, it is a brave action to add meaning to a statement reportedly made by Senior Counsel and to also question accuracy. It may be prudent to read the full transcript for context and to confirm the actual wording. If the quote is accurate the actual meaning may be only the words. It is refreshing that this forum is not a court room.  

S


----------



## maccka (25 September 2012)

Solly said:


> bunyip, it is a brave action to add meaning to a statement reportedly made by Senior Counsel and to also question accuracy. It may be prudent to read the full transcript for context and to confirm the actual wording. If the quote is accurate the actual meaning may be only the words. It is refreshing that this forum is not a court room.
> 
> S




Solly,

How would one obtain a copy of the transcripts?  How long does it take for them to be released after each court day?

I am looking forward to visiting the courtroom in October for a day or two as I plan to see firsthand the difference between reality (as portrayed in the courtroom), the reality of friends and family and the 'reality' of the media and the interpretation of this forum.

On a sad note, a precious friend of mine who is fighting to keep her farm from the CBA has been diagnosed with a type of brain tumour on the same day that ASIC allowed CBA to remove itself from the courtroom with such an insulting offer.  It goes without saying that that day was a Black Friday for her.  It's yet another example of the toll that this situation is taking on the health and well being of Stormies. 

Maccka


----------



## Frank Ainslie (26 September 2012)

bunyip said:


> _"A person generally not experienced in financial matters but who is comfortably off, in a home not mortgaged or mortgaged to a modest extent and perhaps having other assets such as superannuation, is put into the Storm system,"
> he said._
> 
> I can understand that Alan Myers, as a lawyer acting for ASIC against Storm and the banks, is trying to make it look as bad as possible for them.
> ...




Hi Bunyip,

_"Storm clients joined the system completely of their own free will after approaching Storm, seeing what they offered, and signing every page of the SOA to say they understood the strategy."_

At it again I see? 

You keep repeating the same old line, _"Storm was an obvious scam and people should have seen through it!"_ Yet ASIC and the Banks involved with Storm saw nothing wrong with the scheme at the time. After all it was a legitimate financial scheme so why are you always trying to make out otherwise?

It's true that nobody twisted any investor's arm so that they would use Storm. However,  people in Storm employed deception (something you seem to conveniently forget because it doesn't suit your contention) and the banks turned a blind eye to such because their eyes were full of dollars. 

IMPORTANT NOTE: In any agreement, if deception is used by one party, *free will is taken out of the equation* because there is no meeting of the minds. You cannot therefore as you have repeatedly tried to do judge the mindset of the investors at the time they invested because duplicity was used to get them to sign up to this scheme.

I'll repeat this for the umpteenth time! This trial is not about what the investors did with their money. It's about what Storm and the Banks involved did with their Storm clients/customers' money. It's not about the mindset of those Storm investors but rather about the mindset of those that shafted them! It's not about what you personally think but rather about the facts! It's not about investing in the share market but rather about wrongdoings! It takes a peculiar type of thinking to ignore these pertinent issues and focus on things that are not applicable in this trial. Let's hope the Judge is not likewise distracted!

If you can find any article that lays the blame in any way at the feet of those that invested, please refer me to such. Until then, I suggest that you sit back, listen/read and learn about what really happened because it will be educational, not only for you but for all those that are thinking about investing in the future. _"The truth will set you free!" _

In the scheme of things your opinion of those that invested counts for nothing. As Solly says, _"Thank God this is not a jury trial..."_ because many members of the public that sit in on such matters are uninformed and bring their prejudices with them. Having served on a jury some two years ago, I have witnessed this first hand. I am happy to leave it to a Judge to decide our fate because he/she has the training and experience to identify wrongdoing under the law! He/she also has the ability to identify the perpetrators; namely the Banks and Storm Financial rather than trying to put the investors in the loop. 

If you can't recognize by now with all that has been revealed who the wrongdoers really are, then there's nothing I or others can say that will convince you otherwise.


----------



## Frank Ainslie (26 September 2012)

maccka said:


> Solly,
> 
> How would one obtain a copy of the transcripts?  How long does it take for them to be released after each court day?
> 
> ...




Hi Maccka!

I'm sorry to hear about your friend. The human cost is often forgotten when discussing all this. Quite frankly, people that perpetuate schemes that are designed to make them richer and you poorer are totally unconscionable and lacking in common decency. I think _"low-life"_ is an apt description for them!

I attended Court on Monday and Tuesday and intend to show up most days because I want to see some of these jokers squirming in the dock. 

Allan Myers, the QC for ASIC, is doing a wonderful job to date. He has kept the Judge amused (onside) with his description of the Storm scheme and its blatant deceptions, and he has highlighted the major roles the Macquarie Bank and the Bank of Queensland had in the overall scheme. I particularly like the humorous way he has disparaged the Banks’ parts in the Storm saga whilst restraining himself from “kicking them to death” which will, no doubt, come later. (We hope!)

Whilst on the subject of what occurred in the Court these last two days, I must admit that I was surprised by the damning evidence that has already been presented that for me proves beyond doubt the special relationship that Storm had with the Macquarie Bank and the BOQ. Based on what I have seen so far, bearing in mind that we are only on day three, the Banks cannot profess that their relationship with these banks were _“arms length”_ because the evidence is so overwhelmingly to the contrary.

On the first day, Allan Myers defined for the Court what constituted an ‘unregistered managed investment scheme’. I have always thought that this might be difficult to prove but from what I have seen so far, I feel that our chances of proving such have risen from 50/50 to 60/40 in our favour. I am confident that these odds will continue to rise as further evidence is presented. There is no question that _“pooling” _did take place and it now remains for ASIC and our legal team to pull the pieces into place to prove UMIS. I sense that ASIC has a strong case for UMIS and is holding nothing back. Unfortunately, as we all know, the same can’t be said of ASIC where the CBA is concerned.

I firmly believe that ASIC at some stage went to the Board of the CBA and said, “_You guys are going to lose on UMIS and the other charges so why not cough up some more compensation money to appease everyone! That let’s us off the hook as far as you are concerned and you have successfully buried your part in all this.” _

This, of course, implies that some special relationship exists between the CBA and ASIC that other banks do not enjoy. I believe that there is enough evidence on hand to support this notion.

Confidence is high in our camp. One way or the other, the banks are going down. It just remains to see how far they sink and what they will be liable for in the end.

Incidentally, the Media has been fairly accurate to date in relation to what has occurred. For those doubters among us, it might pay to follow closely what is happening and also what revelations occur. Sooner or later the penny should drop. _"Banks have been allowed to get out of control and unless something is done now, all Australians will find themselves out of pocket as a consequence."_ Therefore, if as a result of this case, controls are exerted on these banks, it will benefit everyone.


----------



## Frank Ainslie (27 September 2012)

bunyip said:


> ASIC calculates the total loss suffered by all investors who borrowed monies from various banks to invest through Storm to be approximately $832 million.
> Someone will surely correct me if I’m wrong, but didn’t I see a figure of three billion dollars being quoted as the amount that Storm investors supposedly lost?
> 
> It’s pleasing to see that Storm directors and Storm financial advisers will not benefit from the agreement between ASIC and CBA. Nor should they – nobody could be less deserving of financial compensation than these people who promoted the highly risky Storm model as safe and conservative.
> ...




Hi Bunyip! 

_"ASIC calculates the total loss suffered by all investors who borrowed monies from various banks to invest through Storm to be approximately $832 million. Someone will surely correct me if I’m wrong, but didn’t I see a figure of three billion dollars being quoted as the amount that Storm investors supposedly lost?"_

It makes you wonder about the ASIC compensation model if they can't even get the extent of the loss right?

_"All in all it looks like this UMIS thing has been a bit of a fizzer so far."_ 

Your logic at times leaves me somewhat bewildered! The charge of UMIS is very real and I believe the CBA caved in because it knows this! The fact that ASIC is not now pursuing the CBA for UMIS resulted from the CBA's offer of more compensation and has absolutely nothing to do with UMIS being a fizzer. Indeed, from what I have observed in the last few days in Court, I would say that there is a very good chance that UMIS will be proven. Incidentally, I couldn't see you anywhere in Court which may account for your confusion?

_"As for CBA, I suspect that their agreement to pay out $136 million is simply the cheapest and most expedient option for them. If they refused to pay out and instead went to court, the cost to them would likely be more than 136 million even if they won the case."_

I can't quite see how it would cost the CBA $136 million if they won the case? Certainly legal costs would only be a fraction of this amount. I certainly agree that it is the cheapest and most expedient option because the CBA is as guilty as Hell and it knows it! Banks don't give away this amount of money unless they have plenty to hide! The fact that ASIC has aided and abetted the CBA to buy itself out of trouble is to ASIC's ever lasting shame. The CBA was on the run! Make no mistake about that. It had everything to lose by allowing this matter to be settled in Court. This agreement to offer additional compensation is a last minute bid to avoid exposure and censure.

As for the agreement, 'Stormies' that are members of this forum should look closely at what the CBA is actually offering. I have read through the _“ASIC and CBA Storm Financial Settlement”_ offer and it seems on face value to have some merit. However, if you look at it carefully there is no real substance to the offer. For one it doesn’t offer you certainty! What exactly will you receive back in compensation in _“dollar terms”_. What does _“55% of the amount of loss allocated to CBA under the ASIC Compensation Model_ really mean when it comes to money in your hands? Has ASIC provided anyone with the total amount of their individual losses so you can verify such? I haven’t heard of anyone that has been so informed! Have you? 

Anyone that signs off on any agreement without knowing the exact amount they can receive back hasn’t learnt anything from the lessons of Storm. ASIC and the CBA, to my mind, concocted this deal some time ago.  It is therefore up to those parties to provide exact details of the agreed compensation in dollar terms to you before the cut-off date of 17th October 2012. 

When’s all is said and done, ask yourself these questions: "_Are you going to rely on ASIC getting it right? Are you going to rely on a nebulous 55% when you don’t know what it will be based on dollar wise? Are you going to rely on the accuracy of ASIC’s compensation Model when that organization has been seen to be shoddy and inefficient to date? And finally, are you going to rely on ASIC protecting you from the CBA’s beating down of compensation (and mark me, that bank will) once you are hooked?" _ 

United, we are strong! Divided, we may fall over! The Banks know this and they will do everything possible to test our resolve. _“Divide and cnquer!”_ is the CBA’s prime motivation for making this offer now.


----------



## Solly (27 September 2012)

> *"Storm Financial: Bank 'failed to check' repayment prospects*
> 
> Macquarie Bank signed off on multi-million dollar margin loans without considering whether Storm Financial clients could repay them, a court has heard"




More by Christine Flatley @ brisbanetimes.com.au


----------



## Solly (27 September 2012)

> *'Very difficult to get out of Storm'*
> 
> STORM Financial induction sessions have been likened to Scientology or "other species of odd belief" on day two of a lengthy trial into the company's practices.




More by Rae Wilson @ frasercoastchronicle.com.au


----------



## Solly (27 September 2012)

> *"Close ties create storm as ASIC takes on banks*
> 
> STORM Financial had such a tight relationship with banks that it was able to secure a range of discounts and even the waiver of credit checks for its clients, a Federal Court in Brisbane heard yesterday."




More by Anthony Marx @ couriermail.com.au


----------



## DocK (27 September 2012)

maccka said:


> Solly,
> 
> (snip)
> 
> ...




So sorry to hear of your friend's troubles.  The impact on both the physical and mental health of those directly affected is something that no court can put a price on, and no compensation can put right, unfortunately.

All the best.


----------



## Julia (27 September 2012)

From one of Solly's links above:


> The court heard today that Macquarie lent $2 million to Tracey Richards - a mother-of-three on a $24,000 annual salary - in 2006, without assessing her ability to service the loan, paying interest or meeting margin calls.
> 
> The court heard Ms Richards, who has since lost everything, applied for the margin loan on the advice of Storm, with whom she had been dealing with since 2001.
> 
> Her lawyer said she will give evidence that if Macquarie had refused the margin loan, her fears about Storm's financial advice would have been reignited and she would have left their scheme.



So did Storm suggest to such a client that the interest on the $2 million loan would have been paid by the returns earned on the index fund which presumably was funded by that loan?
Was the impossibility of the servicing of such a loan on a salary of $24,000 just ignored, by Storm and by the client?

Hopefully some of this essential background will come out as Ms Richards and others give their evidence.


----------



## Julia (27 September 2012)

"Brisbane Times Money" has a list of examples of what "strategies" to avoid and an example of each.
They include a reference to Storm as follows:


> STORM FINANCIAL
> 
> The high-profile collapse of Storm Financial was a textbook lesson in the dangers of gearing and one-size-fits-all financial plans. The Storm model was simple - build wealth through borrowing, in some cases gearing up twice by borrowing once against their homes and then through a margin loan.
> 
> ...


----------



## Solly (27 September 2012)

> *"ASIC case against Storm inaccurate: banks*
> 
> TWO banks have told a court the Australian corporate watchdog's case against them over the collapse of Storm Financial was full of "irrelevance and inaccuracy".




More by Christine Flatley @ theaustralian.com.au


----------



## Solly (27 September 2012)

> *'Single mum with few assets in financial strife after $2m line of credit to invest with Storm Financial turns sour*
> 
> A SINGLE mother with few assets and huge loans was trapped in "a dreadful debt spiral" after Macquarie Bank granted her a $2 million line of credit to invest in Storm Financial, a Brisbane Federal Court heard this morning.'




More @ heraldsun.com.au


----------



## Solly (27 September 2012)

maccka said:


> Solly,
> 
> How would one obtain a copy of the transcripts?  How long does it take for them to be released after each court day?
> 
> Maccka




Hi Maccka

I sent a DM to you on the other platform, being a non-party you may need deep pockets 

S


----------



## Frank Ainslie (28 September 2012)

_*"The Storm Financial system was one of considerable merit and worthy of emulation by others in the financial sector?"*_ *ASIC 2008*

It appears that when ASIC did a full compliance audit of Storm in 2008 when that firm was considering a float, ASIC commented that _"The Storm Financial system was one of considerable merit and worthy of emulation by others in the financial sector?"_ This came out in Court yesterday when the Macquarie Bank's lawyer was giving his opening address.

If the Regulator at that time came to this conclusion how the heck can people now say after the event that the investors that placed their trust in Storm should have known better when ASIC didn't? 

There has been so much rubbish talked about Storm since that firm collapsed by the Media, some on this forum, the Banks, the Banks' lawyers, the politicians and the public in general about how foolish we all were! If that is so, how foolish were ASIC, the Banks that dealt with Storm, and this and former Governments that allowed inadequate regulatory laws to exist that permitted financial advisers and Banks to operate unchecked?

If the Regulator was unable to identify any wrongdoing by Storm shortly before that firm collapsed, how can the Storm investors that relied on Storm's financial advisers (so-called experts in their field) be expected to know any differently? Here we have a firm that was lauded by the Regulator as a shining light then and is now being described by ASIC's lawyer as something akin to Scientology! This has to be one of the biggest about-faces in ASIC's history!

The truth of the matter is that we should be suing ASIC as well as the Banks because they are equally to blame. Better still, if the watchdog has no teeth and sleeps all the time, maybe it's time to put it to sleep permanently and get another watchdog that is alert and can give the wrongdoers a considerable bite?

What a _"Mickey Mouse"_ financial system this really is! What a piss poor way to control the people in it! What a way to run a country!


----------



## Judd (29 September 2012)

http://www.couriermail.com.au/money...stors-in-control/story-e6freqox-1226483437690



> *Storm praised by ASIC Investors 'in control' *
> Liam Walsh
> The Courier-Mail
> September 28, 2012
> ...





Only going by what has been reported in the media but it seems to be a neat piece of covering of collective backsides by Storm.  Praised for providing supplementary advice statements.

According to the article a model that can be used by other licensees to assist in servicing the mass market a [ASIC] letter of 2007 advised. 

How wonderful but ticking off advice statements still don't mean that the strategy, which Storm Financial devised all by its lil' old self, was also ticked off by ASIC.  Not its role and never has been.  Upto the investor to consider and accept or reject advice.  Whatever rules which have been imposed or are about to be introduced will not change that aspect one iota.


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## Frank Ainslie (30 September 2012)

Judd said:


> http://www.couriermail.com.au/money...stors-in-control/story-e6freqox-1226483437690
> 
> 
> 
> ...




Hi Judd

_"Up to the investor to consider and accept or reject advice. Whatever rules which have been imposed or are about to be introduced will not change that aspect one iota."_

Have you ever signed an agreement with anyone or any corporation? If so, does it state on such what you are actually agreeing to? To extend the argument further, if what you have agreed to is misleading or incorrect, do you have a legal recourse? The answer is, of course, that you do because in contract law it's know as _"MISREPRESENTATION"_.

I don't understand why you and others continue to ignore such a fundamental aspect of all this? Giving bad advice is not a crime! On the other hand, misleading people intentionally or otherwise is a breach of contract. That's why Storm and, by default, the Banks are now facing the music. 

Is there anyone else on this forum that has missed this fundamental point of contract law? Is there anyone else on this forum that cannot differentiate between giving _"financial advice"_ and giving _"misleading advice and "misleading statements of facts"_? Is there anyone on this forum that really understands what is taking place in the Court at this time? 

This _"advice" _argument has been done to death. The day Storm misled its clients was the day this argument died. Bury it and let it rest in peace!


----------



## Judd (30 September 2012)

Frank Ainslie said:


> Hi Judd
> 
> _"Up to the investor to consider and accept or reject advice. Whatever rules which have been imposed or are about to be introduced will not change that aspect one iota."_
> 
> ...




No Frank.  We shall need to agree to disagree.  I totally reject your spurious arguments.  Under NO circumstances should the person signing on the bottom line and handing over their money totally abnegate responsibility.  That is what you seem to be suggesting.  Advice is not a decision.  The decision to accept or reject advice rests with the investor.

Now off to prepare for a more exciting time to visit my daughter who is overseas.  Farewell, Frank.  I shall probably not think of you in my absence.


----------



## bunyip (1 October 2012)

Frank Ainslie said:


> _"All in all it looks like this UMIS thing has been a bit of a fizzer so far."_
> 
> Your logic at times leaves me somewhat bewildered! The charge of UMIS is very real and I believe the CBA caved in because it knows this! The fact that ASIC is not now pursuing the CBA for UMIS resulted from the CBA's offer of more compensation and has absolutely nothing to do with UMIS being a fizzer. Indeed, from what I have observed in the last few days in Court, I would say that there is a very good chance that UMIS will be proven.




Frank

Maybe your idea of a ‘a bit of a fizzer’ is different to mine.
*So far* the only result that ASIC has achieved with its UMIS allegation is a paltry out of court settlement from CBA that amounts to nothing more than small change for this massive company that earns thousands of millions of dollars in half yearly profits.
Clearly this is a very different outcome to what ASIC was hoping to achieve with CBA.
One disgusted Storm victim described the CBA settlement as _‘two fifths of bugger all’._ Judging by this and other angry comments from disgruntled Storm investors, they too appear to consider ASIC’s settlement with CBA to have been ‘a bit of a fizzer’.

Will ASIC’s UMIS allegation against the other banks turn out to be a bit of a fizzer as well? Who knows – we’ll just have to wait and see.


----------



## Frank Ainslie (1 October 2012)

bunyip said:


> Frank
> 
> Maybe your idea of a ‘a bit of a fizzer’ is different to mine.
> *So far* the only result that ASIC has achieved with its UMIS allegation is a paltry out of court settlement from CBA that amounts to nothing more than small change for this massive company that earns thousands of millions of dollars in half yearly profits.
> ...




Bunyip,

$260 million is not small change! In fact it is a significant amount although it falls far short of what the CBA's Storm customers lost. 

The problem with the amount now being offered by the CBA is that it is unclear in dollar terms what is actually being offered. From some of the remarks being made by disgruntled former CBA Storm customers, it is apparent that they neither understand what exactly is being offered or what it covers. I have read through this agreement and it is vague in some areas. Certainty is required, not guess work in such important matters. Who can blame them therefore if they reject such a nebulous offer that gives no certainty where compensation is concerned.


----------



## bunyip (1 October 2012)

Frank Ainslie said:


> Bunyip,
> 
> $260 million is not small change! In fact it is a significant amount although it falls far short of what the CBA's Storm customers lost.
> 
> The problem with the amount now being offered by the CBA is that it is unclear in dollar terms what is actually being offered. From some of the remarks being made by disgruntled former CBA Storm customers, it is apparent that they neither understand what exactly is being offered or what it covers. I have read through this agreement and it is vague in some areas. Certainty is required, not guess work in such important matters. Who can blame them therefore if they reject such a nebulous offer that gives no certainty where compensation is concerned.




It's small change to a company whose half yearly profits are thousands of millions of dollars.
It's clearly a different outcome to what ASIC hoped for.
It's clearly a very different outcome to what many Storm investors hoped for.
It's clearly a very disappointing result for many Stormers.

Let's see if ASIC can do any better with their UMIS allegation against the other banks. I don't have an opinion on whether they will or won't do any better. 
Nor do I really care.
I'm not the one who's getting all hot and bothered and stressed out over this - I'm just an interested and frequently amused observer.
I say the deal between ASIC and CBA has shown that the UMIS allegation against CBA has been a bit of a fizzer.
You can see it any way you want - it makes no difference to me.


----------



## Frank Ainslie (1 October 2012)

Judd said:


> No Frank.  We shall need to agree to disagree.  I totally reject your spurious arguments.  Under NO circumstances should the person signing on the bottom line and handing over their money totally abnegate responsibility.  That is what you seem to be suggesting.  Advice is not a decision.  The decision to accept or reject advice rests with the investor.
> 
> Now off to prepare for a more exciting time to visit my daughter who is overseas.  Farewell, Frank.  I shall probably not think of you in my absence.




It grieves me Judd that you will not be thinking about me whilst you are away.

When you come back maybe you can explain why my arguments are spurious? I have put a perfectly fair and reasonable proposition to you and all you can do is repeat yourself. If we lived by your proposition, our society would fall in a heap because it would be lawless. 

I have based my contention on the Law. You have based yours on your own view of the world according to Judd. Yours is not a pretty view because it smacks of one eyed thinking. 

I'll let those with a more sensible outlook be the judge - the law as it stands or Judd's_ "guilty by default"_ law. 

Have you ever thought about being a politician? With this type of thinking, you can't go far wrong!


----------



## bunyip (1 October 2012)

Frank Ainslie said:


> _*
> Here we have a firm that was lauded by the Regulator as a shining light then and is now being described by ASIC's lawyer as something akin to Scientology! This has to be one of the biggest about-faces in ASIC's history!
> 
> The truth of the matter is that we should be suing ASIC as well as the Banks because they are equally to blame. *_



_*

LOL! 
Why don’t you then, Frank....you seem to thrive on these class actions, in fact I almost get the impression that you’ll be sorry when this one is over and this thread fizzles out and you’ll have nothing more to rant about!
What better way to save yourself from such an awful fate than to organize a class action against ASIC just to keep the legal wheels spinning!

For what it’s worth, I agree with your less than flattering opinion of ASIC. I’ve known for years about their poor track record – their incompetence was well documented in the media for years before the Storm debacle came along. Beats me why you ever thought they were a trustworthy organization whose opinion was worth placing any faith in. Maybe you didn’t read the papers or listen to the news back in those days.*_


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## Ijustnewit (1 October 2012)

Oh Dear , our Number One pot stirrer and Forum Troll is back at it again. It will be a pity when this fizzles out , they will have to go and find someone else to kick in the head while they are on the ground . sad really


----------



## bunyip (2 October 2012)

Ijustnewit said:


> Oh Dear , our Number One pot stirrer and Forum Troll is back at it again. It will be a pity when this fizzles out , they will have to go and find someone else to kick in the head while they are on the ground . sad really






I’m not trying to kick Frank in the head – just having a bit of a dig at him, much the same as he had a dig at Judd. Frank dishes it out on a regular basis, he should be able to cop a bit in return.

If you want to see some real head kicking, there’s been plenty of it going on in the form of a handful of Stormers on this forum who are attempting to kick hell out of the banks by blaming them for the mess that Storm investors find themselves in.
Now ASIC is coming in for some head-kicking as well. Mind you, in their case they probably deserve it.
Maybe the banks deserve some of it too – that’s for a court to decide – but there are plenty of other causes of the Storm debacle apart from what the banks are alleged to have done.

A couple of years back it was the government who was the target of the head-kickers.....some Stormers (not all of them) blamed the government for allowing the Storm debacle to happen, and petitioned them to compensate Stormers for their losses.
Had the government been silly enough to cave in to their demands, it would have been the Australian public who took the kick in the head in the form of billions of dollars of funding being pulled from essential services such as health, police, education, roads etc, and handed instead to Storm victims.

Another example of head-kicking can be found in Post 7298 on page 365 of this thread, in which *you* attempted to kick the professional advisers and the banks for the bad investment decision that YOU made.

Head-kicking comes in many different forms – something to keep in mind next time before you accuse anyone of head-kicking.


----------



## doobsy (2 October 2012)

Just looking further into the compensation announcement to get my head around it for clients.

_The ASIC Compensation Model also contains a method of allocating the loss suffered by an investor or investor group between the banks who funded that investor or investor group’s investments in Storm. The allocation is based on interest and fees charged by the bank to that investor or investor group for loans used to invest through Storm, and the proportion of that investor or investor group’s total Storm-related lending that was provided by that bank._

This seems to be the key statement.

We have 4 main parties by all reports - Storm, BOQ, Macquarie, CBA.

Total loss by investors = $3 billion (approx). Now part of that monies was not borrowed. What do I mean? It was equity from other sources - money in the bank (see Frank), superannuation withdrawn, sale of existing investments.

Storm were big on telling people not to own their home as that dovetailed into their "shares will outperform property" speeches and it was seen as adopting the strategy in its fullest form to sell your house and rent.

How much did this form of the $5 billion invested? I would estimate around half considering that when it all got sold down at 50% the banks got their money back - so about $2.5 billion was borrowed. The question is then are the forensic guys apportioning 50% of the losses to borrowing and 50% to investment of other monies? This would drop the figure the UMIS parties are up for to $1.5 billion if that is the logic.

The second thing it mentions is _The allocation is based on interest and fees charged by the bank_. This is where it gets interesting. Storm charged fees on all monies, private or borrowed. $5 billion under management = $350 million in fees. When allocating based on interest and fees charged I would think this would equate to between 40-50% of total fees generated by the UMIS parties. That makes STORM liabile for between $600M -$750M (40-50% of $1.5B) to $1.2B - $1.5B (40-50% of $3B) of the losses.

I have no idea of the breakdown of the other lending (CBA, Macquarie, BOQ) but if we look at the $268M that CBA have agreed to being 55% then the total loss aportioned to CBA is $487M. This is 1/3 of the $1.5B figure or 16% of the $3B figure. It sound about right to me. 

The next question is why was ASIC happy to take 55c in the $???? Is the case as strong as investors hope?


----------



## GaryC (2 October 2012)

Hello all. 

My name is Gary and I was a client of Storm Financial and the Commonwealth Bank. As it has been with many Storm clients I initially accepted the conventional wisdom that 'Storm let me down'.  

I feel like a bit of an intruder coming in late on this thread however I only recently became aware of its existence and feel after having a quick scan of some of the comments that I could contribute in a positive way given my familiarity with Storm and its practices over many years as well as my distressing experiences since late 2008.

I joined Storm with a $100k investment in early 1995 after attending their workshops on 3 separate occasions before I invested.  By November 2007 at its peak my portfolio had grown to $3.7M of which the amount I had actually invested from all sources including debt was $1.2M.  By Dec 2008 my entire $3.7M was gone and I was left with amount still outstanding to the margin lender of around $50k not to mention still owing the bank on my housing loan.

My dilemma is this... After looking over my notes taken at the Storm workshops, I (and my lawyer) have been unable to fault anything.  Similarly after having looked over my numerous statements of advice, we have been unable to fault them either.  I am however still left with the feeling that I should hate Storm but don't know why.  CBA did NOT send me a margin call notice as they should have done and as they did on numerous occasions in the past which allowed me to stay out of trouble.  So clearly the CBA screwed me on this occasion.

As my temper cools, I am thinking that my reaction to Storm has been overly harsh.

Can somebody tell me; 
- what it is that Storm did wrong, and 
- what I should look for in my documentation to show this?

Gary


----------



## bunyip (2 October 2012)

Frank Ainslie said:


> _“So why were people sucked in by Storm and why didn’t they do their homework?” _some on this forum have asked of me. Why indeed! That’s something we ‘Stormies’ will be asking ourselves for the rest of our lives.
> 
> 
> I now firmly believe, we ‘Stormies’ should have sought a second and indeed a third opinion from other financial advisers as to the merit of Storm’s financial model and, for those that had an accountant, run it past him or her as well. Yes, it would have cost us more money and financial advice does not come cheap but with the amount of money we were investing, it would have made little difference to us. After all, if one can’t afford the small amount of money it would have cost, one shouldn’t be in investing anyway.
> ...




Frank

I see that  in some of your recent posts you’re once again plugging away with the same tired old line about how prospective Storm investors had no chance of seeing the risk in the Storm strategy if ASIC couldn’t see it.

Experienced investors have explained to you over and over the simple steps you could have taken to spot the risk. Doobsy, an experienced financial adviser and planner, has also explained it to you. But you’re not interested in listening. 
So rather than waste time explaining  it all over again, this time I thought I’d try a different approach by enlisting the help of a ‘pal’ of mine to give you some pointers on how you and other Stormers could have seen what ASIC apparently couldn’t see. 
The ‘pal’ is refer to is none other than yourself. That’s right Frank – if you read through the quoted post above my post, you’ll see that _*you*_ have done quite a good job in explaining some of the simple steps you could have taken to help spot the risk in what Storm was offering.
Enjoy!


----------



## Solly (2 October 2012)

GaryC said:


> Hello all.
> 
> My name is Gary and I was a client of Storm Financial and the Commonwealth Bank. As it has been with many Storm clients I initially accepted the conventional wisdom that 'Storm let me down'.
> 
> ...




Gary, 

For me, it is refreshing to hear a new voice on this forum.

Regarding your above questions, have you considered why ASIC alleges that Emmanuel and Julie Cassimatis breached their duties as directors under Australia’s corporate law?

Have you considered allowing a Silk or a Junior to run their eye over your material for an opinion? 

S


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## Lone Wolf (2 October 2012)

GaryC said:


> Can somebody tell me;
> - what it is that Storm did wrong, and
> - what I should look for in my documentation to show this?
> 
> Gary




I'd be very interested to hear what other ex-Storm clients have to say here. What, if anything, do you think Storm did wrong and what evidence is there to support this?


----------



## Lone Wolf (2 October 2012)

GaryC said:


> My dilemma is this... After looking over my notes taken at the Storm workshops, I (and my lawyer) have been unable to fault anything.  Similarly after having looked over my numerous statements of advice, we have been unable to fault them either.  I am however still left with the feeling that I should hate Storm but don't know why.  CBA did NOT send me a margin call notice as they should have done and as they did on numerous occasions in the past which allowed me to stay out of trouble.  So clearly the CBA screwed me on this occasion.
> 
> As my temper cools, I am thinking that my reaction to Storm has been overly harsh.
> 
> ...




Hi Gary,

From what we (the general public) can see from the outside, the Storm strategy seems to be a valid high risk, high reward strategy. What seems to be wrong is that most ex-Storm clients on here have stated that it was sold as a very conservative strategy.

Were you (or are you) under the impression that this was a conservative strategy?

Two most basic things that I believe Storm should have done:
1 - They should have made sure you understood the risks involved. Only you can say if they did that or not.
2 - They should have actually monitored your portfolio. The market didn't dive overnight, it slid down gradually. Storm could and should have informed you of an impending margin call long before the bank ever did. There was no reason at all to rely on the bank to sell you out. I had a margin loan during that time (not through Storm), I can tell you that I knew the exact market level that would result in a margin call and I was talking to the bank before it happened. I question why Storm was unable to do this?

It appears that you are very angry at the banks for not issuing a margin call soon enough, but you don't seem to blame Storm for not monitoring your portfolio and taking action where required. Can you explain why?


----------



## Lone Wolf (2 October 2012)

While I'm in a posting mood - There are a couple of issues that I've always wanted clarity on. Perhaps this has been answered already, my apologies if they have.

- Who was responsible for informing clients of margin calls? Has the court gotten to this yet? Last I read the banks said Storm was responsible for passing on the message and Storm said the bank should do it directly.

- Apparently (I've never seen evidence) documents were falsified to make it look like clients could afford larger loans than they really could. Who filled out these documents with incorrect information? Or was this just a false accusation?


----------



## Julia (2 October 2012)

Lone Wolf said:


> - Apparently (I've never seen evidence) documents were falsified to make it look like clients could afford larger loans than they really could. Who filled out these documents with incorrect information? Or was this just a false accusation?



'I have asked this on several occasions and have yet to receive an answer.
It seems a very fundamental question imo.


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## Solly (2 October 2012)

Julia said:


> 'I have asked this on several occasions and have yet to receive an answer.
> It seems a very fundamental question imo.




Julia,

Do you believe that it is prudent to post material, such as what you have requested and to make accusations in a public forum? Would not these matters be better dealt with by an unbiased judiciary?

S


----------



## Julia (2 October 2012)

Solly said:


> Julia,
> 
> Do you believe that it is prudent to post material, such as what you have requested and to make accusations in a public forum? Would not these matters be better dealt with by an unbiased judiciary?
> 
> S



Considering all the various accusations made by so many across this thread, I don't see that commenting on this would be any different.
I have rather had the impression that, of those Storm clients posting here, they are simply not sure who inserted their details in the application forms.

Why not also address your question to the other poster who raised this tonight?
viz from Lone Wolf:


> - Apparently (I've never seen evidence) documents were falsified to make it look like clients could afford larger loans than they really could. Who filled out these documents with incorrect information? Or was this just a false accusation?


----------



## Jifromoz (2 October 2012)

Julia said:


> 'I have asked this on several occasions and have yet to receive an answer.
> It seems a very fundamental question imo.




Page 251 posting by me. I know it was a long time ago now. BOQ said their policy was to interview all applicants.. Did not happen in this instance as they lived over 600km's away. as with a lot of loan applications they are filled out by the Bank or Broker or Storm employees. Applicants only sign the back page and never see the preceeding pages. I know this from the fact that I have copies of the application and it is riddled with simple errors that would have been corrected by my In-Laws if they had seen it. In fact according to the application they lived three houses apart in the same street. Income noted in the application had no relevance to reality present or future. Who completed this..I don't know but I know it wasn't the borrowers. Did they see this...I doubt it.


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## Lone Wolf (2 October 2012)

Solly said:


> Julia,
> 
> Do you believe that it is prudent to post material, such as what you have requested and to make accusations in a public forum? Would not these matters be better dealt with by an unbiased judiciary?
> 
> S




Solly, 

I'm not sure what you think you read or who you think said it. I seem to have a great deal of trouble with people misunderstanding me. Allow me to clarify. 

Previously on this thread there were claims of falsified documents. Seeing as how the case is underway and ASIC has come to an agreement with the CBA, I simply asked what the conclusion was regarding this issue. Julia responded saying that the question remains open, and that it's an important question.

I'm not sure what your problem with this exchange is? I didn't ask for accusations or opinions, I asked for facts. If there have been no facts found as yet then a simple "The issue has not yet been raised/resolved in the courts." would have been helpful.

I realise the case is ongoing. But seeing as how ASIC has settled its case against the CBA, I had (wrongly) assumed that any claims of falsified documents would have already been investigated. 

No matter, thanks to Julia I have my answer - We still don't know.


----------



## Lone Wolf (2 October 2012)

Jifromoz said:


> Page 251 posting by me. I know it was a long time ago now. BOQ said their policy was to interview all applicants.. Did not happen in this instance as they lived over 600km's away. as with a lot of loan applications they are filled out by the Bank or Broker or Storm employees. Applicants only sign the back page and never see the preceeding pages. I know this from the fact that I have copies of the application and it is riddled with simple errors that would have been corrected by my In-Laws if they had seen it. In fact according to the application they lived three houses apart in the same street. Income noted in the application had no relevance to reality present or future. Who completed this..I don't know but I know it wasn't the borrowers. Did they see this...I doubt it.




Thank you Jifromoz, I hope we the public eventually find out the truth behind this. It seems an important matter to me, but somehow I fear it's going to fall through the cracks and we'll never know.


----------



## SJG1974 (3 October 2012)

Lone Wolf said:


> Two most basic things that I believe Storm should have done:
> 1 - They should have made sure you understood the risks involved. Only you can say if they did that or not.
> 2 - They should have actually monitored your portfolio. The market didn't dive overnight, it slid down gradually. Storm could and should have informed you of an impending margin call long before the bank ever did. There was no reason at all to rely on the bank to sell you out. I had a margin loan during that time (not through Storm), I can tell you that I knew the exact market level that would result in a margin call and I was talking to the bank before it happened. I question why Storm was unable to do this?




Agree 100%.

The conservative vs risky argument has gone on ever since this mess started....investors claiming it was sold as a conservative strategy yet Storm themselves have said that the clients understood the risks.  

And the monitoring of the portfolios has been excused away by Storm due to the "jumbled data" coming through late in the piece, despite as you rightly point out, the market having fallen not overnight but over almost 12 months from its highs in late 2007 to margin call territory in late 2008.

Its seems from Storm's perspective, and even some of their research notes which I believe doobsy may have relayed in this forum previously, there was this flawed thinking by Storm that the market will always revert back to its long term uptrend and what we went through in early to mid 2008 was nothing more than a blip, despite the numerous events that indicated it was much more serious than that.  They even kept getting clients to go back to the well and gear up further as the market fell.  Then, when Lehmann Brothers occurs and the market really dives at the end of 2008, Storm put up their hands and say its not our fault, the data we get from Colonial was so jumbled we had no way of knowing what the clients' positions were.

Absolute bulldust.  They were index funds, the market was going down, Storm would have known full well the portfolios were in a lot of strife.  It should have been averted long before they hit margin call territory. Particularly if, as claimed, it was sold as a conservative strategy.

The banks didn't sell the strategy, nor did they charge fees to monitor clients' portfolios- that was Storm. the only monitoring the banks were required to do was to protect themselves by issuing margin calls at the right time.

In this case, by the time the margin calls were/should have been made, the clients were already down the hole and in negative equity, due to the double gearing effect. They were screwed by Storm long before the margin call fiasco, because Storm rather than protecting the portfolios from further losses by managing the position during 2008, kept clients invested (and actually increased their debt) in the blind hope that the market would turn around before it was too late.  And unfortunately the rest is history.


----------



## Julia (3 October 2012)

Jifromoz said:


> Page 251 posting by me. I know it was a long time ago now. BOQ said their policy was to interview all applicants.. Did not happen in this instance as they lived over 600km's away. as with a lot of loan applications they are filled out by the Bank or Broker or Storm employees.



Thank you Jifromoz.  You're confirming what I had previously understood, i.e. that some of the applications were filled out by "*the Bank or Broker or Storm employees"*.  In other words, no one seems clear about who actually did this.


> Income noted in the application had no relevance to reality present or future. Who completed this..I don't know but I know it wasn't the borrowers. Did they see this...I doubt it.



And again, it seems to me a very important point in the whole question of attributing blame for what happened.



Lone Wolf said:


> Thank you Jifromoz, I hope we the public eventually find out the truth behind this. It seems an important matter to me, but somehow I fear it's going to fall through the cracks and we'll never know.



I hope not, even if for no better purpose than it clears any party which did not behave inappropriately.


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## DocK (3 October 2012)

Perhaps it bears repeating that some ex-storm clients have already received some compensation via the Slater & Gordon arrangement, and are prevented from discussing the basis of those payments by confidentiality clauses.  So hypothetically, even _if_ a bank had made a payment due to information filled in by a bank employee, _or_ even a bank employee operating from an office in Storm's offices, _or_ if it was unclear whether information had been filled in or provided by a bank employee or a Storm employee - any ex-storm client who accepted the first amount of compensation offered has essentially been silenced.  Again hypothetically, a bank with exposure in this area would be smart to keep such matters out of public court hearings, wouldn't they?  Hypothetically, of course.

There are obviously many ex-storm clients who did not accept the S&G deal - if I were one of them and had proof or facts that my legal reps were aware of - I daresay the last thing I'd be doing would be to show my hand on a public forum just to satisfy the curiosity of the posters.  

Sometimes, when the courts are involved, the truth plays second fiddle to the deal that eventually gets done.


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## doobsy (3 October 2012)

GaryC said:


> Hello all.
> 
> My name is Gary and I was a client of Storm Financial and the Commonwealth Bank. As it has been with many Storm clients I initially accepted the conventional wisdom that 'Storm let me down'.
> 
> ...




Gary

When you say in November 07 your portfolio was 3.7M, what was the debt level? If I read you correctly you are saying that you invested (your money and borrowed money) 1.2M yet this doesn't make sense.

What makes up the 1.2M you quote?


----------



## Solly (3 October 2012)

Julia said:


> Considering all the various accusations made by so many across this thread, I don't see that commenting on this would be any different.
> I have rather had the impression that, of those Storm clients posting here, they are simply not sure who inserted their details in the application forms.
> 
> Why not also address your question to the other poster who raised this tonight?
> viz from Lone Wolf:






Lone Wolf said:


> Solly,
> 
> I'm not sure what you think you read or who you think said it. I seem to have a great deal of trouble with people misunderstanding me. Allow me to clarify.
> 
> ...




Thank you Julia and Lone Wolf for your responses. 
I appreciate reading the posts from those who claim to be ex-Storm clients. I have no way of verifying what is truthful or if these posters are in fact genuine. Stated "facts" without verification are just unsupported claims.
My view is that examination of these matters is better held away from public forums and safer for those involved. Unreasonable, malicious or spurious claims can cause a multitude of pain for those who make them. I believe it is better not to be placed in that position in the first instance.

S


----------



## Julia (3 October 2012)

Solly said:


> Thank you Julia and Lone Wolf for your responses.
> I appreciate reading the posts from those who claim to be ex-Storm clients. I have no way of verifying what is truthful or if these posters are in fact genuine. Stated "facts" without verification are just unsupported claims.
> My view is that examination of these matters is better held away from public forums and safer for those involved. Unreasonable, malicious or spurious claims can cause a multitude of pain for those who make them. I believe it is better not to be placed in that position in the first instance.
> 
> S



That's a reasonable point, Solly, and politely expressed which is appreciated.


----------



## bunyip (4 October 2012)

GaryC said:


> As my temper cools, I am thinking that my reaction to Storm has been overly harsh.
> 
> Can somebody tell me;
> - what it is that Storm did wrong
> ...




Gary

There are a number of factors that contributed to the big losses of Storm clients. But the primary factor is that they were heavily invested with borrowed money in the stock market when the market went through one of its biggest plunges in history.
And they stayed invested throughout most of the plunge, rather than limiting the damage by getting out early in the piece before the market went into free fall.

Who concocted the risky plan that was doomed to failure in the event of a major market meltdown?  STORM
Who recommended this ‘one size fits all’ strategy to prospective clients, irrespective of their personal circumstances? STORM
Who failed to do the right thing by getting their clients out of the market before the damage became catastrophic? STORM
Who gave a commitment to manage their clients portfolios, but then failed to honor that commitment during 2008 while the market was crashing? STORM
Who passed off a highly risky strategy as conservative? STORM
Who gave misleading information about the performance of certain investment classes? STORM
Who failed to explain that the trigger points would be incapable of saving clients from horrific losses in the event of a sudden market plunge such as occurred in 1987? STORM
Who failed to adequately explain to prospective clients the risk of having all their eggs in one basket by being invested in just one asset class? STORM

In my opinion, Gary, you have good reason to feel extremely angry and disgusted with Storm.


----------



## bunyip (4 October 2012)

Earlier this week, ASIC came off second best when it lost its long legal battle with Andrew Forrest of Fortescue Metals.

The Fortescue vs ASIC court case is unrelated to the current court case between ASIC and the banks who financed Storm investors. But it does serve to illustrate that ASIC don’t always come out on top when they go to court.
Now, I’m not saying they’ll lose their UMIS case against the banks. But I believe it would be premature to think that a win for ASIC is a foregone conclusion. Given that ASIC has lost many a court case, it will be interesting to see how they fare in this one.

More on the ASIC vs Fortescue Metals case can be found on this link. 

http://au.news.yahoo.com/thewest/a/-/national/15012203/asic-case-against-twiggy-fails/


----------



## ASICK (4 October 2012)

Don't forget ASIC v. Jodie Rich
http://en.wikipedia.org/wiki/ASIC_v_Rich
"_The trial concluded on 18 November 2009 in which Justice Robert Austin declared that ASIC had “failed in every aspect of their case”, “failed to call key witnesses” and “exaggerated the effect of evidence or misleadingly took passages of evidence out of context”. It was also decided that ASIC's summary of Mr Rich's evidence in the witness box was inaccurate."_


----------



## bunyip (4 October 2012)

I assume that the avenue of appeal is open to the banks if the judgment goes against them in the UMIS case. Can anyone confirm whether or not this is correct?


----------



## Solly (5 October 2012)

> *"Storm collapse was triple whammy for the little people who lost all*
> 
> THE Australian Securities & Investments Commission is there to protect us from the spivs, crooks, charlatans and fraudsters who operate in the corporate world.
> 
> As for Cassimatis, he is laughing. All ASIC is prepared to do, apparently, is to mount a civil case against him. He will continue to live in luxury while his despairing dupes wonder why he isn't facing a far less attractive future."




More by Graham Richardson @ theaustralian.com.au


----------



## bunyip (5 October 2012)

SJG1974 said:


> Agree 100%.
> 
> The conservative vs risky argument has gone on ever since this mess started....investors claiming it was sold as a conservative strategy yet Storm themselves have said that the clients understood the risks.
> 
> ...



Exactly.
Storm's excuse about the allegedly scrambled data has a very hollow ring to it.
Index funds mirror the All Ordinaries Index, the performance of which is updated at least two or three times a day in the media. Getting an overview of how index funds were performing was as simple as watching the finance section of the ABC news at 7pm each day for an update on what the All Ords was doing.

Scrambled data or not, if Storm had honored their commitment to manage their clients portfolios, they would have advised their clients to convert to cash long before the supposedly scrambled data allegedly occurred. By that time the market was in freefall and clients had already suffered horrendous damage from the combination of collapsing market and heavy gearing that magnified the losses.
When the market is heading decisively south and you’re heavily invested through big margin loans, you just don’t have the luxury of hanging around and waiting for a few more weeks or months to see what will happen. Storm should have known this, and taken action early in the bear market to protect their clients from big losses.
Storm has no reasonable excuses.


----------



## bunyip (6 October 2012)

GaryC said:


> CBA did NOT send me a margin call notice as they should have done and as they did on numerous occasions in the past which allowed me to stay out of trouble.  So clearly the CBA screwed me on this occasion.




Gary

Did the conditions of your margin loan state that CBA would advise you of margin calls? If so, and CBA failed to do so, then you appear to have grounds for compensation from CBA.

Why I’m asking is because someone posted on here the conditions of their margin loan - unfortunately I can’t find the post to give you the exact wording – but I recall one part of it stating that it was the client’s responsibility to monitor their position, including margin calls.

Also, shouldn’t Storm have kept themselves abreast of the situation and notified their clients as soon as they hit margin call? I know Cassamatis is now saying that advising clients of margin calls was the bank’s responsibility, not Storm’s.
But Storm said on their website that they monitor their client’s portfolios – one would reasonably assume that this would include monitoring margin calls.


----------



## Frank Ainslie (11 October 2012)

GaryC said:


> Hello all.
> 
> My name is Gary and I was a client of Storm Financial and the Commonwealth Bank. As it has been with many Storm clients I initially accepted the conventional wisdom that 'Storm let me down'.
> 
> ...




Hi Gary!

Look back through my past postings or go to my websites if you can't find anything wrong with the advice Storm gave or its motivation for doing so. 

Frankly, I find it hard to believe that anyone by now that had any interest in this would be unmindful of Storm's transgressions because they have been broadcast far and wide. I find it particularly incredible that anyone connected with Storm and lost a great deal of money through doing so would still be asking such a question?

I suggest that you review the evidence that will be presented in Court carefully because it will demonstrate the part Storm had in all this! I know! I was there! I together with thousands of others can fully vouch for Storm's duplicity! 

The evidence is out there and is freely available. I suggest that you avail yourself of such!


----------



## Frank Ainslie (11 October 2012)

Lone Wolf said:


> And this is where we diverge again.
> 
> Most Storm clients say they thought this was a safe, conservative strategy. While I can accept the argument that Storm clients didn't feel the need to do their homework due to trusting in the expertise of their advisors, I can't for a moment believe the claim that Storm clients thoroughly researched the strategy themselves. It doesn't take many calculations to work out the potential risks of borrowing large sums of money to invest in an instrument that has previously had sudden and severe falls.
> 
> ...




Thanks! If we all agreed with one another, life would be boring!  People have a right to their opinion. Discussion is good as long as it remains healthy. Good luck to you as well!


----------



## Frank Ainslie (11 October 2012)

bunyip said:


> I’m not trying to kick Frank in the head – just having a bit of a dig at him, much the same as he had a dig at Judd. Frank dishes it out on a regular basis, he should be able to cop a bit in return.
> 
> If you want to see some real head kicking, there’s been plenty of it going on in the form of a handful of Stormers on this forum who are attempting to kick hell out of the banks by blaming them for the mess that Storm investors find themselves in.
> Now ASIC is coming in for some head-kicking as well. Mind you, in their case they probably deserve it.
> ...




Hi Bunyip,

How many times have you been kicked in the head? A great number I would think judging from you comments in relation to governments and banks. 

You claim to have a lot of financial nous. Let's hope it doesn't match your nous when it comes to institutions that are ripping people off every day. You asked me whether I read the newspapers! Do you? If you did, you would not be insulting our intelligence with statements that have no bearing on the facts at large. 

For goodness sake, get real and post something that you didn't find in a Christmas cracker. It may give us food for thought rather than dull our minds with the same old dribble.

What  part of "THE BANKS AND STORM HAVE BEEN CHARGED WITH WRONGDOINGS" don't you understand? How many times must we repeat it until it sinks in or are you one of these conspiracy nuts that thinks that this is just another conspiracy!  

Do you know what a wrong is? It means:
1. Not in conformity with fact or truth; incorrect or erroneous.
2. a. Contrary to conscience, morality, or law; immoral or wicked. b. Unfair; unjust.

If nothing else, at least invest in a dictionary. It should help you to understand the words that will be used in Court over and over again. But then I forgot, it's all a conspiracy anyway!


----------



## Frank Ainslie (11 October 2012)

ASICK said:


> Don't forget ASIC v. Jodie Rich
> http://en.wikipedia.org/wiki/ASIC_v_Rich
> "_The trial concluded on 18 November 2009 in which Justice Robert Austin declared that ASIC had “failed in every aspect of their case”, “failed to call key witnesses” and “exaggerated the effect of evidence or misleadingly took passages of evidence out of context”. It was also decided that ASIC's summary of Mr Rich's evidence in the witness box was inaccurate."_




Hi ASICK!

From the way ASIC is proceeding so far I think it has already lost its way! It's a worry and no mistake!


----------



## Frank Ainslie (11 October 2012)

bunyip said:


> Earlier this week, ASIC came off second best when it lost its long legal battle with Andrew Forrest of Fortescue Metals.
> 
> The Fortescue vs ASIC court case is unrelated to the current court case between ASIC and the banks who financed Storm investors. But it does serve to illustrate that ASIC don’t always come out on top when they go to court.
> Now, I’m not saying they’ll lose their UMIS case against the banks. But I believe it would be premature to think that a win for ASIC is a foregone conclusion. Given that ASIC has lost many a court case, it will be interesting to see how they fare in this one.
> ...




Hi Bunyip! You again! 

_"Now, I’m not saying they’ll lose their UMIS case against the banks. But I believe it would be premature to think that a win for ASIC is a foregone conclusion. "_

Has anyone mentioned that a win against the Banks is a foregone conclusion? Anyone that believes that is off their chump! We know exactly what we are up against and are relying on our own lawyers rather than ASIC to reveal the truth. If we had left it to ASIC we would have all jumped over a cliff long ago!


----------



## Frank Ainslie (11 October 2012)

Solly said:


> More by Graham Richardson @ theaustralian.com.au




Hi Solly,

The Regulator has such an important function to perform in the financial world and yet it fails us at every turn. Public apathy where ASIC is concerned doesn't help either. It's the same old story! 

_"Unless, ASIC does something wrong that doesn't affect you directly, why give a stuff!"_ It's human nature! People will talk of course but when it comes to taking action, it's just all too hard! 

That's the way of it, I'm afraid. It always will be until someone in power does something about it. At the moment our Government and the Opposition seem more intent on point scoring than running the country efficiently by ensuring that bodies such as ASIC are administered efficiently. 

Until I came to this country I never knew what the word _"rooted"_ meant when it's used in a certain way by ordinary Australians. The word seems apt now though when describing ASIC.


----------



## bunyip (11 October 2012)

Frank Ainslie said:


> Hi Bunyip,
> 
> How many times have you been kicked in the head? A great number I would think judging from you comments in relation to governments and banks.
> 
> You claim to have a lot of financial nous.



I’ve never claimed to have ‘a lot of financial nous’. 
I’ve simply stated that I’ve made it my business over the years to get myself reasonably knowledgable in financial and investment matters. And that I try to think for myself and use common sense when dealing in same.

I’ve never claimed the banks are squeaky clean. I’ve said they should be penalized if they can be proven in a court of law to have done anything illegal. I’ve stated that I personally don’t like banks, I feel they’ve ripped me off at every opportunity and continue to do so to this day.

I’ve never claimed the government is squeaky clean either, or that they can’t or shouldn’t improve laws and regulations relating to investment.

What I do claim though is that no amount of laws or regulations will eliminate every crook who’s selling a dodgy investment scheme. And no amount of laws and regulations will prevent people from getting caught if they don’t thoroughly look into an investment proposal before committing all their money and loads of borrowed money to it. If people are going to take crazy risks in an effort to dramatically boost their financial position, as you did,  then they’ll come unstuck sooner or later..........just like you did.

You love to portray me as a dumb bastard, don’t you Frank? No problem – I’m happy to be the dumb bastard who made excellent money in 2008 thanks to the same plunging stock market that sent you broke.


----------



## Frank Ainslie (11 October 2012)

*What is expected in Law of those that offer services or products?*

For those on this forum that still cannot distinguish between what is acceptable and what is not acceptable under the laws that govern financial transactions in this country, let me clarify the position for you. Anyone that offers goods or services must abide by the following conditions:

1. They must accept responsibility for the consequences of their activities and make every effort to ensure that their decisions, recommendations, and actions function to identify, serve, and satisfy all relevant publics: customers, organizations and society.
2. Their dealings must be honest and fair
3. They should uphold and advance the integrity, honor and dignity of their profession.
4. They must protect the rights of those they deal with.
5. They should fulfill their duties in the marketing exchange process.
6. Buyers should be able to expect that products and services are safe and fit for intended uses; that communications about offered products and services are not deceptive; that all parties intend to discharge their obligations, financial and otherwise, in good faith; and that appropriate internal methods exist for equitable adjustment and/or redress of grievances concerning purchases.
7. Sellers should be aware of how their behavior influences the behavior of others in organizational relationships.
 8. They should not demand, encourage, or apply coercion to encourage unethical behavior in their relationships with others.

The Banks in the dock and Storm who will soon be in the dock did not abide by these rules. That's all that you need to consider. Anything else as the Court is always quick to point out is irrelevant. That means that the Court will not consider anything other than the facts and how they relate to this case. I know that for some this is never enough. Thankfully, we that have been duped by so-called professionals do not have to rely on your verdict but rather on a court of law that will act only on the law as it stands and not on public opinion that is for the most part misinformed. 

Have a good day!


----------



## bunyip (11 October 2012)

Frank Ainslie said:


> *What is expected in Law of those that offer services or products?*
> 
> For those on this forum that still cannot distinguish between what is acceptable and what is not acceptable under the laws that govern financial transactions in this country, let me clarify the position for you. Anyone that offers goods or services must abide by the following conditions:
> 
> ...



LOL.....another of your rants eh Frank – although thankfully a shorter version than usual this time.

You say you don’t have to rely on our verdict. So tell us Frank.....what exactly is _‘our verdict’_ that you speak of?
That the banks did nothing wrong? I’ve haven’t said that, and I can’t think of anyone else who has either. I haven’t even implied it. And I certainly don’t think it.
That Storm did nothing wrong? I haven’t said that either, and I don’t know of anyone else who has.
That Storm investors are entitled to no compensation whatsoever? That's another thing I haven't said.

You have this demented view that anyone who doesn’t agree with 100% of your opinions must somehow disagree with you entirely. 

Thankfully the court doesn’t have to rely on your verdict either, Frank. The outcome will depend in no small measure upon how strongly the lawyers for each side can present their arguments and evidence. 
You told this forum that your lawyers were some of the best in Australia. 
That may well be the case. But the banks with their plentiful financial resources will no doubt have ensured that they too have hired some of the best lawyers in the country.

Thank you Frank, for your nice wishes to ‘have a good day’. I always have a good day, Frank. In fact I'd be pretty confident that my days are much nicer than yours are. I rise at dawn for a two hour walk in a quiet country area before breakfast, I have a nice leisurely breakfast with my wife out on the deck overlooking our large garden as we throw bits of food to the magpies. Then I come inside and download my currency data, and catch up with whatever interests me on ASF. My office window overlooks our acreage property where I can see the cattle grazing in our back paddock and listen to the magpies chorusing in the garden. We go camping and fishing and bushwalking, we eat out at our favorite haunt in town whenever the mood takes us, and we regularly visit our grown up children, even the ones who live thousands of km away from us.
All in all Frank, I'm a pretty contented bloke. I didn’t get into this position by taking crazy risks with borrowed money on the stock market.

You have a nice day too, Frank.


----------



## bunyip (13 October 2012)

Frank Ainslie said:


> We know exactly what we are up against and are relying on our own lawyers rather than ASIC to reveal the truth. If we had left it to ASIC we would have all jumped over a cliff long ago!




You’re learning, Frank – rather slowly, but you _*are*_ learning.

A few years back you trusted ASIC without reservation.....ASIC gave Storm the thumbs up, so you jumped in boots and all. After all, if ASIC was endorsing a company whose strategy was to get its clients to risk their homes by borrowing heavily to invest in the riskiest of all markets, than double gear on top of that to invest even more heavily, well heck, it had to be a sound strategy, right?

Now you know better than to trust ASIC. Well done Frank – it’s good to see you’re finally starting to think for yourself.


----------



## joku (16 October 2012)

Bunyip, if nothing else I can at least tell you without doubt that many clients still have their strings being pulled by their old Storm advisers. The directors have split off and pointed the finger at each other - each acting as the innocent ill-treated and emotionally devastated saint (despite still holding extreme wealth) to their own direct client base. They play this card to as many existing clients as will listen. They had strong bonds with these clients - many hours spent together on golf courses, parties, and for some an exotic holiday or two. These bonds aren't always easily broken especially not when what they will have them believe is a whole lot more convenient than the hard truth you and others have laid down in this thread. This is still big business don't forget. Storm was very large and only a minority have been bent for all they're worth. Many have since seen the light but a considerable fraction of a very large pool of money is still a large pool of money. There is also a large sum of money up for grabs from the banks. Where do you think this money is going to go? Fact: Ex-Storm-advisers are drooling. These guys are strong marketers with plenty of wealth and little care for those around them. They haven't the intellect to get ahead other ways or the emotional intellect to really care for the devastation they create. Despite appearances they have copped little more than a slap on the wrist from our financial systems. Not many of them got ASIC bans and those at the top who did have proved long ago that they have little if any ethical grounding - only a fool would assume such a loosely monitored ban from a largely-incompetent regulator will stop them in a world where profit and equity is mostly disguise-able through family, friends and complex and poorly documented business activities. While there is money left to be earned (maybe not the right word  it is still the old Storm marketing machine - morphed and fragmented as it may be - that you are really fighting against in this thread.


----------



## joku (16 October 2012)

I should add in falsely documented business activities to that last bit too.. they have plenty of experience to draw on there :frown:


----------



## Frank Ainslie (20 October 2012)

joku said:


> Bunyip, if nothing else I can at least tell you without doubt that many clients still have their strings being pulled by their old Storm advisers. The directors have split off and pointed the finger at each other - each acting as the innocent ill-treated and emotionally devastated saint (despite still holding extreme wealth) to their own direct client base. They play this card to as many existing clients as will listen. They had strong bonds with these clients - many hours spent together on golf courses, parties, and for some an exotic holiday or two. These bonds aren't always easily broken especially not when what they will have them believe is a whole lot more convenient than the hard truth you and others have laid down in this thread. This is still big business don't forget. Storm was very large and only a minority have been bent for all they're worth. Many have since seen the light but a considerable fraction of a very large pool of money is still a large pool of money. There is also a large sum of money up for grabs from the banks. Where do you think this money is going to go? Fact: Ex-Storm-advisers are drooling. These guys are strong marketers with plenty of wealth and little care for those around them. They haven't the intellect to get ahead other ways or the emotional intellect to really care for the devastation they create. Despite appearances they have copped little more than a slap on the wrist from our financial systems. Not many of them got ASIC bans and those at the top who did have proved long ago that they have little if any ethical grounding - only a fool would assume such a loosely monitored ban from a largely-incompetent regulator will stop them in a world where profit and equity is mostly disguise-able through family, friends and complex and poorly documented business activities. While there is money left to be earned (maybe not the right word  it is still the old Storm marketing machine - morphed and fragmented as it may be - that you are really fighting against in this thread.




Hi Joku,

Any proof of this? I'm not saying you are wrong because nothing would surprise me any more! For one, why is it that 4 years down the track the Cassimatises have still not fronted up in Court? It would have made our case and ASIC's so much easier if the duplicity of Storm had already been proven in a court of law. 

Further, there has always been a groundswell of support for Storm among our ranks which I have never been able to understand. I can quite believe that only a certain number of Storm clients were shafted because we (the ones that were) have never really had the numbers of protesters that one would have expected from such a financial fall-out!

Some proof would be good though! Without it, this is all merely supposition!


----------



## Frank Ainslie (20 October 2012)

bunyip said:


> You’re learning, Frank – rather slowly, but you _*are*_ learning.
> 
> A few years back you trusted ASIC without reservation.....ASIC gave Storm the thumbs up, so you jumped in boots and all. After all, if ASIC was endorsing a company whose strategy was to get its clients to risk their homes by borrowing heavily to invest in the riskiest of all markets, than double gear on top of that to invest even more heavily, well heck, it had to be a sound strategy, right?
> 
> Now you know better than to trust ASIC. Well done Frank – it’s good to see you’re finally starting to think for yourself.




Hi Bunyip,

I was reminded of you yesterday when our neighbour dropped in for a quick natter. She is a long time friend of Helen's dating back from when they all lived in Morwell, Victoria. She, like you, believes that we shouldn't be entitled to get any money back because others lost money in the GFC through investing and they can't get theirs back! Needless to say, she and her husband numbered among those that lost money when the GFC hit! It should be added that they could have pulled out when the market was falling but decided to stay in and left it all too late.

I started to defend our position but then realized that this was an exercise in futility because she wasn't ready to listen. Much like a few on this forum that already have decided for themselves and nothing is going to shift them! That's okay though because they are welcome to their views as are we.

The thing is this! Human nature being what it is, we are more likely to fight if the cause we have taken up affects us personally. For instance, we all know that there is much wrong existing in our society but until we are affected personally by it, we remain complacent. There are a few among us that will get involved anyway but they are like diamonds. 

We that have suffered at the hands of the banks and Storm know the truth of it because we have experienced this firsthand. People like you that air your views constantly haven't been there, done that! Therefore, whatever you or people like you have to say doesn't really affect us because we know what happened whilst you do not! 

I think no less of our friend for holding such views because she is misinformed. At the same time, I do not feel the need to set her straight because I know this is a fruitless exercise. People will go on believing what they choose to believe because it makes them feel good. We will go believing what we believe because it makes us feel good! That's the way we all operate! Never the twain shall meet!

Gee! I've just had a thought! Does this mean that at long last I am starting to think for myself? I was rather under the impression that  I had been doing that all along? Thanks for the tip! What are friends for!


----------



## Julia (20 October 2012)

Where is this case in the courts at the moment?  I've not heard anything for a couple of weeks.

Frank, agree that we will personally fight hard for what affects us personally.  Would be unnatural not to.


----------



## bunyip (20 October 2012)

Frank Ainslie said:


> Hi Bunyip,
> 
> I was reminded of you yesterday when our neighbour dropped in for a quick natter. She is a long time friend of Helen's dating back from when they all lived in Morwell, Victoria. She, like you, believes that we shouldn't be entitled to get any money back




Frank

Please quote the post where I expressed a belief that you shouldn’t be entitled to get any money back.


----------



## bunyip (20 October 2012)

Frank Ainslie said:


> Further, there has always been a groundswell of support for Storm among our ranks which I have never been able to understand. I can quite believe that only a certain number of Storm clients were shafted because we (the ones that were) have never really had the numbers of protesters that one would have expected from such a financial fall-out!





Only a certain number of Storm clients were shafted?

You all got milked to the tune of an outrageous 7% on every dollar invested.
You all got sold a highly risky strategy as conservative.
You all got abandoned when the market was crashing and you needed the help and direction that Storm committed to giving you on your _‘journey to capitalism’._

Seems to me that all Storm clients were shafted, not just some of them.

I too am amazed that some ex-Storm clients still come out in support of Storm.


----------



## bunyip (20 October 2012)

Frank Ainslie said:


> Hi Bunyip,
> 
> Gee! I've just had a thought! Does this mean that at long last I am starting to think for myself? I was rather under the impression that  I had been doing that all along? Thanks for the tip! What are friends for!




Frank

If you’d been thinking for yourself all along, I mean really thinking properly, then you would never have believed it was a safe and conservative strategy to mortgage your home at age 65 to borrow and then borrow even more to invest heavily in the riskiest of all markets.

If you were really thinking for yourself then you would have realised that at age 65 and with 1.7 million dollars of net worth, the sensible thing to do would be to put your money into safe and conservative investments, then kick back and enjoy the rest of your life in peace and comfort.


----------



## Mindstorm (20 October 2012)

Hi Frank,

Just curious, in this post you said:

"there has always been a groundswell of support for Storm among our ranks which I have never been able to understand"

Can you tell me what ranks you're speaking of?

MS









Frank Ainslie said:


> Hi Joku,
> 
> Any proof of this? I'm not saying you are wrong because nothing would surprise me any more! For one, why is it that 4 years down the track the Cassimatises have still not fronted up in Court? It would have made our case and ASIC's so much easier if the duplicity of Storm had already been proven in a court of law.
> 
> ...


----------



## Mindstorm (20 October 2012)

Hi Julia,

The trial is on a two week break, and commences again on Monday 22 October.

It will then run, hopefully, until 21 December.

Then?  Who knows?

MS




Julia said:


> Where is this case in the courts at the moment?  I've not heard anything for a couple of weeks.
> 
> Frank, agree that we will personally fight hard for what affects us personally.  Would be unnatural not to.


----------



## Julia (20 October 2012)

Thank you, Mindstorm.


----------



## Frank Ainslie (21 October 2012)

Mindstorm said:


> Hi Frank,
> 
> Just curious, in this post you said:
> 
> ...




I can but I won't! Suffice to say that some people that were in Storm long held the view that the Storm scheme was sound and it was entirely the fault of the banks for breaking their agreements with Storm. 

Whether these people were or are still in denial (or just plain stupid) I've never been able to work out. Whether they still feel this way after all that we have learnt I have no idea either. 

I know this attitude exists because I personally have encountered it over the past four years. That's what leads me to believe that not everyone in Storm was as adversely affected. Anyone that was burnt knows full well where the fault lies because we were lied to from the start by Storm. 

Storm came up with the strategy and the banks supplied the means. In any partnership, when one party is no longer around, the other partner in law cops the blame. It's not exactly the best example but it will do in the circumstances.

I might add that if there were not so many of us, we would have had Buckley's chance of recovering anything and would have gone down the same path as our friend from Morwell. I guess we can therefore think ourselves lucky that Storm and the banks shafted so many!

"Never was so much owed to so many by so few?" Perhaps we ought to create a monument in Townsville with those words on it?


----------



## Frank Ainslie (21 October 2012)

bunyip said:


> Frank
> 
> If you’d been thinking for yourself all along, I mean really thinking properly, then you would never have believed it was a safe and conservative strategy to mortgage your home at age 65 to borrow and then borrow even more to invest heavily in the riskiest of all markets.
> 
> If you were really thinking for yourself then you would have realised that at age 65 and with 1.7 million dollars of net worth, the sensible thing to do would be to put your money into safe and conservative investments, then kick back and enjoy the rest of your life in peace and comfort.





Bunyip,

If you continue to view everything in black and white, you will miss the grey areas in between. Perhaps you should read _"Fifty Shades of Grey"_? As most women will attest, it is the grey areas that are the most interesting! Seriously though, you cannot put what happened in simple terms. You need to understand the dynamics opf any situation and the reasons why a financial disaster of this nature occurred. 

You say, _"the sensible thing to do would be to put your money into safe and conservative investments."_ People thought they were doing just that when they entrusted their money to one of the biggest financial advisory firms in this country. A financial advisory firm incidentally whose scheme was endorsed by ASIC as being exemplary in a compliance report ASIC did when that firm tried to float the company. A year or so later it went west!

Storm professed to offer a strategy that was _"safe and conservative"_ because it was a broad market based one with safeguards in place. Why would the elderly (75% were past retirement age) invest in anything that was unsafe unless they were duped into believing it were so? Logic if nothing else tells you that these people now find themselves destitute because the people that operated this scheme, namely Storm and the Banks, used deceptive practices.

Now you are asking people to be wise after the event?  

_"The difference between perseverance and obstinacy is that one comes from a strong will, and the other from a strong won't." _ ~Henry Ward Beecher


----------



## Frank Ainslie (21 October 2012)

bunyip said:


> LOL.....another of your rants eh Frank – although thankfully a shorter version than usual this time.
> 
> You say you don’t have to rely on our verdict. So tell us Frank.....what exactly is _‘our verdict’_ that you speak of?
> That the banks did nothing wrong? I’ve haven’t said that, and I can’t think of anyone else who has either. I haven’t even implied it. And I certainly don’t think it.
> ...




Thanks Bunyip!

I write fiction too! I can't see anyone wasting their time on this forum if their life is so idyllic! I only post here to inform people but you post here to be controversial. Why do so unless you have an axe to grind? People that are rich have better things to do with their time. I know because I was once rich myself. 

Do I believe a word you tell me? The answer is _"No!"_ If like me, you have the guts to give us you real name so we can check some facts about you, then I will be the first to apologize. Until then, you are a faceless person that can claim anything and we have no way of knowing any different. I have nothing to hide and that is why I have given you my name. What's yours? Somehow or other, I don't think it's Palmer although you would like it to be!


----------



## Solly (21 October 2012)

joku said:


> I should add in falsely documented business activities to that last bit too.. they have plenty of experience to draw on there :frown:






Frank Ainslie said:


> Hi Joku,
> 
> Any proof of this? I'm not saying you are wrong because nothing would surprise me any more! For one, why is it that 4 years down the track the Cassimatises have still not fronted up in Court? It would have made our case and ASIC's so much easier if the duplicity of Storm had already been proven in a court of law.
> 
> ...





Hi Frank,

That is an interesting statement made by joku, I suggest that it would prudent for joku to advise the appropriate authorities so that this claim can be scrutinised.

I have also observed the support for Storm and for certain individuals that you mention. It may have some basis in  that foundational beliefs are challenged.

It is also interesting to note that www.cassimatis.com.au appears to now be unreachable.

S


----------



## SJG1974 (21 October 2012)

It would not surprise me to know that there are still Stormers who are Cassimatis sympathisers.

I remember there seemed to be a pro Manny feeling on the SICAG website at least in the early days. Manny was obviously a very charismatic man and very persuasive...so it stands to reason there would be a selection of Stormers who agree with his banks are to blame for everything line.

I just hope he and his cronies don't get away with what they did to these people.


----------



## Mindstorm (21 October 2012)

Frank,

I'd have been happy (?) if you had just stopped at "I can but I won't".  

It's my opinion that you speak for a very limited amount of people. Are these the people who you think are in denial or just plain stupid? 

It serves no purpose to cast aspersions on other storm clients, and I guess that says more about you than it does about them.

As for your Churchill quote....

Get a grip Frank.

We lost money, it can't be compared to loss of life.

MS





Frank Ainslie said:


> I can but I won't! Suffice to say that some people that were in Storm long held the view that the Storm scheme was sound and it was entirely the fault of the banks for breaking their agreements with Storm.
> 
> Whether these people were or are still in denial (or just plain stupid) I've never been able to work out. Whether they still feel this way after all that we have learnt I have no idea either.
> 
> ...


----------



## bunyip (21 October 2012)

Frank Ainslie said:


> Thanks Bunyip!
> 
> 
> Do I believe a word you tell me? The answer is _"No!"_




Fine by me, Frank – whether or not you believe me doesn’t interest me in the slightest.


----------



## bunyip (21 October 2012)

Frank Ainslie said:


> Bunyip,
> 
> If you continue to view everything in black and white, you will miss the grey areas in between.
> 
> ...




Storm clients came undone because they were geared to the hilt in the stockmarket when the market crashed.
Now, you can call that a black and white summary of what happened, but it’s accurate nevertheless. 

Yes, I do realize there were other aspects to the case, such as what the banks are alleged to have done, who had the responsibility to advise of margin calls etc. 
These matters will be dealt with in court. 
But I know, and you know and have admitted, that your average Storm client had already sustained huge losses by the time their accounts got into margin call territory.

Yes, of course they were duped by Storm – the ‘safe and conservative’ strategy that Storm offered them was a farce. 

Do I expect people to be wise after the event? Not really – I expect them to be wise *before* the event.....

* wise enough to look into the history of the stock market, (since that’s what they were investing in)
* wise enough to learn from the lessons of the 1987 market crash
* wise enough not to put all their eggs in one basket
* wise enough not to hand over astronomical upfront fees that were far in excess of normal
* wise enough to do a bit of research on the investment product being recommended (index funds) to find out that you can easily invest in them yourself without paying some bushranger 7% upfront for the privilege
* wise enough to read up on margin loans so they understood exactly how they work
* wise enough not to accept loans so big that they were going to struggle with the loan commitments
* wise enough to check out and compare a number of financial planning firms
* wise enough to heed the old adage _‘If it sounds too good to be true, it probably is’._
* wise enough not to place their trust in a corporate regulator that had a publicly documented track record of failures and incompetence over many years
* wise enough to have availed themselves of the readily available opportunities to acquire some basic knowledge of investment and financial matters
* wise enough not to invest in something which they didn't understand
* wise enough not to sign blank documents and then trust others to fill in the details
* wise enough to get a copy of everything they signed 
* wise enough to take the simple, common sense precautions that you outlined so well in your post No.7222 on page 362 of this thread......precautions that you yourself admit you should have and could have taken.

In fact, Frank, that post No. 7222 of yours is one of the best on this thread because it tells future investors how they can be wise _*before*_ the event so they don’t fall into the same traps that ensnared you. Below in red is a brief extract from that post...... 

_ I now firmly believe, we ‘Stormies’ should have sought a second and indeed a third opinion from other financial advisers as to the merit of Storm’s financial model and, for those that had an accountant, run it past him or her as well. Yes, it would have cost us more money and financial advice does not come cheap but with the amount of money we were investing, it would have made little difference to us. After all, if one can’t afford the small amount of money it would have cost, one shouldn’t be in investing anyway. 

Often, when you consult with more than one professional you pick up some useful advice anyway in your search for the best solution to your particular needs, whatever they may be. This is commonsense after all! As it was, our failure to apply some commonsense and test Storm’s plan independently cost us all that we had in the end.

Even when dealing with tradesmen, you don’t accept the first quote submitted but obtain two or more others as well. We all know this! The fact that we ’Stormies’ never went down this path was a major failing on our part and one that is inexcusable

So my first first advice to any would-be investors out there is not to take anyone’s word for it but rather to get a second or third opinion. Someone said on this forum some time ago, “If something sounds too good to be true, it normally is!” It’s a well known maxim and one we should have been mindful of before we signed up with Storm. 

_


----------



## joku (24 October 2012)

Frank Ainslie said:


> Hi Joku,
> 
> Any proof of this? I'm not saying you are wrong because nothing would surprise me any more! For one, why is it that 4 years down the track the Cassimatises have still not fronted up in Court? It would have made our case and ASIC's so much easier if the duplicity of Storm had already been proven in a court of law.
> 
> ...




I thought Cassimatis had been in court and claimed he couldn't remember pretty much anything except his name? ASIC is still after him AFAIK but then I don't really follow anything about him. I know he's the main story when people think Storm but he's not the only director or adviser nor was he the only one to get an ASIC ban. 

When you say "our ranks" I assume you mean a group formed for legal action? I only know a couple such groups and they both have ex-storm staff and directors among them.. maybe even helping coordinate them that much I don't know but also wouldn't be surprised. This is partially legit of course because some staff were also clients and maybe have equal right to take legal action. There could be plenty more groups for all I know but maybe it could be another thing that explains the groundswell of support for Storm you mention as well as the existing and ongoing relationships clients built with their advisers as I already mentioned. 

I'd say I have second-hand proof that's also only in my memory and its probably mild compared to what they should already be facing. I'm not really interested in getting involved. I just have a few friends who worked at Storm and some other friends and their families who were clients - together you overhear a passing question or comment from time to time and they tend to add up.


----------



## Garpal Gumnut (25 October 2012)

joku said:


> I thought Cassimatis had been in court and claimed he couldn't remember pretty much anything except his name? ASIC is still after him AFAIK but then I don't really follow anything about him. I know he's the main story when people think Storm but he's not the only director or adviser nor was he the only one to get an ASIC ban.
> 
> When you say "our ranks" I assume you mean a group formed for legal action? I only know a couple such groups and they both have ex-storm staff and directors among them.. maybe even helping coordinate them that much I don't know but also wouldn't be surprised. This is partially legit of course because some staff were also clients and maybe have equal right to take legal action. There could be plenty more groups for all I know but maybe it could be another thing that explains the groundswell of support for Storm you mention as well as the existing and ongoing relationships clients built with their advisers as I already mentioned.
> 
> I'd say I have second-hand proof that's also only in my memory and its probably mild compared to what they should already be facing. I'm not really interested in getting involved. I just have a few friends who worked at Storm and some other friends and their families who were clients - together you overhear a passing question or comment from time to time and they tend to add up.




Best post on this thread for 12 months joku.

Read every word Storm victims.

gg


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## Solly (29 October 2012)

Garpal Gumnut said:


> Best post on this thread for 12 months joku.
> 
> Read every word Storm victims.
> 
> gg




Very wise counsel GG.

S


----------



## Solly (29 October 2012)

> *"Storm staff urged to chase clients always*
> 
> Storm Financial employees were encouraged to spend "every working, living, breathing minute" chasing more investors, a court has heard.
> 
> ...




More by Christine Flatley @ www.smh.com.au


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## bunyip (30 October 2012)

Solly said:


> More by Christine Flatley @ www.smh.com.au





_
Storm's clients lost about $830 million 
_

$830 million is substantially less than the $3 billion I've seen quoted as the amount that Storm victims are reputed to have lost. 
I wonder what the true figure is?


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## SJG1974 (31 October 2012)

Storm Financial clients told investment model 'fail proof', Brisbane Federal Court hears

"Under questioning by counsel for the corporate regulator, Mr McCulloch said he was trained by Storm head Emmanuel Cassimatis to tell wavering clients that "the biggest risk" was themselves."

Read more: http://www.news.com.au/business/companies/storm-financial-clients-told-investment-model-fail-proof-brisbane-federal-court-hears/story-fnda1bsz-1226506684131#ixzz2AqBwe6Kv


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## maccka (1 November 2012)

bunyip said:


> _
> Storm's clients lost about $830 million
> _
> 
> ...




You wouldn't be the only one wondering Bunyip.  I think we all are...  I suspect it depends on who is doing the quoting as some include some details but not others depending on their agenda or experience. 

cheers
Maccka


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## bunyip (1 November 2012)

maccka said:


> You wouldn't be the only one wondering Bunyip.  I think we all are...  I suspect it depends on who is doing the quoting as some include some details but not others depending on their agenda or experience.
> 
> cheers
> Maccka




Whatever the figure, Maccka, it was clearly a heck of a lot of money lost – a tragedy for so many people who were deserving of better from a financial planner who charged like the Light Brigade. I sincerely hope the architect of the scheme, and his unscrupulous sales reps who helped him sell it it, get far more than just a slap over the wrist for treating people so shabbily.


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## Frank Ainslie (15 November 2012)

It quite amazing to me that some people still seem to feel that we investors that relied solely on Storm’s  expertise because they were professional financial advisers should be held to account by some members of the public for not seeing through Storm’s scheme. Yet, ASIC, the CBA, the Macquarie Bank, the BOQ, the FPA and no one in the financial sector including Uncle Tom Cobbly failed to do just that! Is it reasonable to suppose that Storm's investors should have been more astute than them? Of course not! The assertion is downright stupid! 

_“31 January 2000 - ASIC ESTABLISHES KEY TRAINING ADVISORY BODY FOR FINANCIAL SERVICES INDUSTRY
The Australian Securities and Investments Commission (ASIC) today announced the establishment of an advisory body to provide guidance on education and training issues in the financial services sector.The Committee will provide input from the financial services and training industries on ASIC’s policies for education and training of licensees and principals and their authorised representatives.
The roles of the new Training Advisory Committee will include:
· assessing and making recommendations to ASIC about the accreditation of professional and industry associations that want to become authorised assessors of training courses, in accordance with ASIC Interim Policy Statement 146 - Training of Authorised Assessors;
· providing guidance on the consistency of training programs accredited by the various types of authorised assessors;
· advising ASIC on education and training issues generally associated with the regulation of licensees and authorised representatives.”_

Seven years later the Regulator not only gave Storm’s financial model  a “_clean bill of heath”_ in 2007 but actually held it up as a model of excellence?

High ranking executives from the CBA, the Macquarie Bank and the Bank of Queensland attended Storm seminars during which the Storm financial model was explained to them. This has come out in Court by the way so it cannot be denied. No one said at the time that Storm's scheme could contravene the Bank's codes or they might be breaking statutory regulations? Why?  Because there was no way of knowing this unless you were one of the enlightened ones on this forum! Don't you still get it? It was sold to us at minimal risk and on a long term basis. This too can be found in the Court transcripts.

Incidentally, I know of no instance where the 'Financial Planning Association' alerted anyone to the fact that Storm was operating illegally? Isn't one of its key roles to _“set and enforce professional and ethical standards for members to make sure that they conduct business to the highest quality.”_ Where was the FPA when all this was going on. For that matter where was ASIC, the Regulator' and the so-called responsible people in the financial sector that now claim that Storm Financial was a maverick that broke every rule in the book. 

Some people on this forum are talking through their backside. Storm Financial and the Banks involved with that advisory firm are the wrongdoers because they used misleading and deceptive conduct in their dealings with their clients in respect of Storm and their customers in respect of the banks. With all that is going on in the Court at the moment and all the evidence that is being presented, anyone that still believes that Storm’s clients are partly to blame need their heads examined. To hold such a view, you must really feel that anyone that has any money to invest should avoid financial advisers like the plague because this really is all anyone can expect that seeks advice from a financial adviser. You must also hold the view that we should have seen through Storm's scheme when so-called professionals within the financial sector could not! That's ridiculous and you know it!

Do yourself a favour. Get a few law books from the library dealing with consumer law and also spend some time sitting in the Brisbane court. It may help you to understand that any agreement with any other party that is legally binding must be entered into where both parties have been _“aboveboard"_ in their dealings and have not misrepresented what they are offering. That’s fundamental! That is the law! That allows for a society where the law applies rather than opinion. 

If some of you were running the joint, to me Afganistan would seem like a good option!


----------



## Defender (16 November 2012)

Thought I'd come back and check this forum for updates on the status, as it had been a long since I last did so.

I think those are very good points you make, Frank, regarding ASIC & FPA's lack of action before the crash. If they couldn't see the risk, how could Storm clients? Or, if they could, why were Storm allowed to continue business?

Also, nowhere have I heard that any Storm clients were told the investment funds were not registered. Whether or not it is proven to be an illegal unregistered MIF or not, I think if Storm or the banks alerted their clients to the fact that the funds were unregistered with ASIC records (or where ever it has to be registered), they would be unlikely to invest with Storm. 

At any rate, the banks would surely have known the funds were not registered. That's just basic due diligence to check that out! Or negligence not to check it out!

I'll be very interested to see how that pans out in court.


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## Julia (16 November 2012)

Defender said:


> At any rate, the banks would surely have known the funds were not registered. That's just basic due diligence to check that out! Or negligence not to check it out!



What an excellent suggestion.


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## SJG1974 (16 November 2012)

Defender said:


> Thought I'd come back and check this forum for updates on the status, as it had been a long since I last did so.
> 
> I think those are very good points you make, Frank, regarding ASIC & FPA's lack of action before the crash. If they couldn't see the risk, how could Storm clients? Or, if they could, why were Storm allowed to continue business?
> 
> ...




And yet many many prospects could apparently see the risk and didnt proceed. I think it speaks more about the incompetence of the watchdog and the relevant governing bodies than it does about the strategy itself, which was really ridiculously straight forward. So simple that 75% apparently saw enough risk to walk away. How else could one explain so many people walking away from what was marketed as a failproof strategy? How did these people avoid the disaster? Were they just lucky? I doubt it.

And given the apparent lack of due dilligence that so many investors undertook in taking on the "failproof" strategy, i seriously doubt it being registered or unregistered would have made one iota of difference to most.


----------



## ASICK (16 November 2012)

SJG1974 said:


> ... And given the apparent lack of due dilligence that so many investors undertook in taking on the "failproof" strategy, i seriously doubt it being registered or unregistered would have made one iota of difference to most.




But isn't it  the case if it was an unregistered scheme then ASIC will chase losses?  After all, that's ASIC's expertise, form: isn't it the case that substance only matters if form isn't complied with (eg. losses arising out of an unregistered scheme).  Since ASIC is not a prudential regulator, mere losses arising out of a compliant registered scheme is of no concern to it.


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## Ijustnewit (16 November 2012)

SJG1974 said:


> And yet many many prospects could apparently see the risk and didnt proceed. I think it speaks more about the incompetence of the watchdog and the relevant governing bodies than it does about the strategy itself, which was really ridiculously straight forward. So simple that 75% apparently saw enough risk to walk away. How else could one explain so many people walking away from what was marketed as a failproof strategy? How did these people avoid the disaster? Were they just lucky? I doubt it.
> 
> And given the apparent lack of due dilligence that so many investors undertook in taking on the "failproof" strategy, i seriously doubt it being registered or unregistered would have made one iota of difference to most.




This argument is another constantly bought up Storm Urban Myth. Can you provide any proof of the 75% seeing the risk ? How many people on this Forum alone would have gone to sales / investment seminars and walked away due to lack of interest , money or just went for the free feed or giveaways ? As I have tried to point out before using the example of Harvey Norman, how many people walk in looking for a TV and walk out without one ? Why do you think Gerry blasts you out of the lounge room with adverts . Because no one has a 100% strike rate all the time.
Now I'm NOT saying there wasn't the odd individual that run because they thought it was a Scam , but I really think putting the figure at 75% is just a myth. The rest were simply Window Shopping nothing more nothing less.


----------



## bunyip (17 November 2012)

Ijustnewit said:


> Now I'm NOT saying there wasn't the odd individual that run because they thought it was a Scam




Just the odd one?


----------



## Ijustnewit (17 November 2012)

bunyip said:


> Just the odd one?




I sincerely hope that Forums like this can help stop more people getting done over next time. I hope next time the odd one does become 75% .Through public awareness and self education as many on here including yourself have suggested.
The concern that I'm having now is more investors , mainly in that same age group that most Storm clients fell into, are being drawn into taking unforeseen risks in what they perceive to be safe investments. For example on the Banksia thread and Equitrust thread. The lower the interest rates go on term deposits and combined with extremely poor returns on Superannuation ect. the more of these vulnerable people will be drawn into trying something that offers a better return for their hard earned dollar.
Lets hope we can all put the word out before anyone else comes across this Website and Forum in the same circumstance as the people above.
Cheers


----------



## bunyip (19 November 2012)

Defender said:


> Thought I'd come back and check this forum for updates on the status, as it had been a long since I last did so.
> 
> I think those are very good points you make, Frank, regarding ASIC & FPA's lack of action before the crash. If they couldn't see the risk, how could Storm clients? Or, if they could, why were Storm allowed to continue business?
> 
> ...




Have a read of post No.7222 on page 362 of this thread, in which Frank outlines the simple steps that Storm investors should have and could have taken to sniff out the risk in the strategy. Then come back and tell us whether you still think Storm clients had no way of seeing the risk.

As for the responsibility of ‘basic due diligence’ that you mention – did that responsibility extend to Storm clients, or were they exempt from any such responsibility? 
Was it negligence on the part of Storm investors that they failed to thoroughly look into the strategy?
As an experienced investor myself, I can tell you that before proceeding with any investment it’s essential to conduct a thorough evaluation of the pros and cons of that investment to minimize the risk of getting burnt. 
It doesn’t matter if we call it due diligence or research or whatever. The simple fact is that people who don’t do it before investing money are greatly stacking the deck against themselves. Nowhere has this been shown more clearly than in the Storm debacle.


----------



## jjtebj12 (20 November 2012)

bunyip said:


> Have a read of post No.7222 on page 362 of this thread, in which Frank outlines the simple steps that Storm investors should have and could have taken to sniff out the risk in the strategy. Then come back and tell us whether you still think Storm clients had no way of seeing the risk.
> 
> As for the responsibility of ‘basic due diligence’ that you mention – did that responsibility extend to Storm clients, or were they exempt from any such responsibility?
> Was it negligence on the part of Storm investors that they failed to thoroughly look into the strategy?
> ...




RESEARCH, DUE DILIGENCE??? I banked for over 10 years with one of the big four (not CBA). It took me months in research. My personal banker along with another, so called expert in investing met with Storm and went through the same process as us. My accountant also went through the same process as the bank. They then prepared a report and sent it to their internal department for Risk Analysis. Guess what they confirmed that the structure of Storm works and they had other clients of the bank who had been involved with Storm. In their words "yes this works with minimal risk"! They also stated that Storm had the necessary steps and experience to manage our portfolio. They have since settled quietly. I work long hours and was looking for long term investing strategies and professional advice on my situation and a plan for my comfortable retirement. There is no one in the finance industry that you can trust. Every where you turn it's all hidden agendas. So please do not tell me I didn't do any research or due diligence because as you can see I did.


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## bunyip (20 November 2012)

jjtebj12 said:


> RESEARCH, DUE DILIGENCE??? I banked for over 10 years with one of the big four (not CBA). It took me months in research. My personal banker along with another, so called expert in investing met with Storm and went through the same process as us. My accountant also went through the same process as the bank. They then prepared a report and sent it to their internal department for Risk Analysis. Guess what they confirmed that the structure of Storm works and they had other clients of the bank who had been involved with Storm. In their words "yes this works with minimal risk"! They also stated that Storm had the necessary steps and experience to manage our portfolio. They have since settled quietly. I work long hours and was looking for long term investing strategies and professional advice on my situation and a plan for my comfortable retirement. There is no one in the finance industry that you can trust. Every where you turn it's all hidden agendas.* So please do not tell me I didn't do any research or due diligence because as you can see I did.*




What I can see is that you handed over the responsibility of researching the strategy to others, rather than conducting the research yourself. 

Did you call into a stockbrokers office and ask about the performance of the All Ordinaries Index over many years?
Did you bother to find out that any stockbroker can arrange for you to invest in index funds, and they won’t charge you anywhere near 7% to do it?
Did you look at a graph that every stockbroker and many real estate agents have that shows the performance of the All Ords since it first began?
Did you take the trouble to find out that although the stockmarket has averaged x percentage annual return since it began, it can be up 15 or 20% one year and down by twice that much next year, or flat for several years with virtually no movement at all?
Did you consider how you’d meet your loan commitments if the market stayed flat and gave you no return for a prolonged period? Or worse still, collapsed spectacularly like it’s done many times before, and stayed down for years like it’s done since late 2007?
Did you bother to find out (or remember) that the market collapsed 25% in a single day back in 1987? Did you crunch a few figures on your pocket calculator to find out what effect another crash of that magnitude would have on your financial position if you were heavily invested with a lot of borrowed money in the market? Did you consider that in such a situation the banks might foreclose on your house over which they held a mortgage? Or did you just accept Storm’s assurance that you couldn’t lose your home?
Did you research margin loans to find out exactly how they work, what the risks were? It was pretty easy to do......you only had to jump on the internet, or better still go and have a yarn with a lending officer at the bank, and ask him or her to explain in detail everything about margin loans.
When Storm presented you with performance figures for different asset classes, showing that shares outperform the others, did you bother to dig a little deeper by consulting one of the real estate organizations such as REIQ? Or did you just accept what Storm told you?
Did you compare three or four financial planning firms, or did you only go to Storm?

*If you’re the investor putting up the money, then you, not someone else, should do the research*. All the information you need is readily available to you at no cost. 
Handing over the responsibility to someone else to do your research for you is fraught with danger. Unfortunately you’ve had to learn that the hard way.


----------



## bunyip (20 November 2012)

jjtebj12 said:


> RESEARCH, DUE DILIGENCE??? I banked for over 10 years with one of the big four (not CBA). It took me months in research. My personal banker along with another, so called expert in investing met with Storm and went through the same process as us. My accountant also went through the same process as the bank. They then prepared a report and sent it to their internal department for Risk Analysis. Guess what they confirmed that the structure of Storm works and they had other clients of the bank who had been involved with Storm. In their words "yes this works with minimal risk"! They also stated that Storm had the necessary steps and experience to manage our portfolio. They have since settled quietly. I work long hours and was looking for long term investing strategies and professional advice on my situation and a plan for my comfortable retirement. There is no one in the finance industry that you can trust. Every where you turn it's all hidden agendas. So please do not tell me I didn't do any research or due diligence because as you can see I did.





Another thing (and I've already asked you this a few months ago but you didn't reply)....would I be correct in assuming that your finance was provided by the same bank that conducted your research for you?

And if this was the case, did it not occur to you that they had a vested interested in telling you it was a good safe investment?
Would you consider this to be a conflict of interest?
I certainly would, if that was in fact what happened.

The conflict of interest extended to Storm as well.......naturally they were going to tell you how wonderful and safe their strategy was, naturally they were going to encourage you to borrow heavily and then double gear on top of that, toss in all your super as well, and any other money you could get your hands on. Why wouldn't they, when they were creaming a hefty 7% from every dollar you invested!!

Did it not occur to you that they could hardly give you impartial advice that was in your best interests, given that their business revolved around biting you for 7% every time you opened your wallet?


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## jjtebj12 (20 November 2012)

bunyip said:


> Another thing (and I've already asked you this a few months ago but you didn't reply)....would I be correct in assuming that your finance was provided by the same bank that conducted your research for you?
> 
> And if this was the case, did it not occur to you that they had a vested interested in telling you it was a good safe investment?
> Would you consider this to be a conflict of interest?
> ...




Well haven't I made you cracky!!!!

Monies were borrowed from two of the big four banks. Also one of which has settled for a sizeable sum. The other has made a good offer.  But next time I'm thinking of investing I will seek you out because you have all the answers as you are the ultimate expert!!!!!

Next time you need a Doctor, diagnose yourself because what would a Doctor know....


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## Ijustnewit (20 November 2012)

jjtebj12 said:


> Well haven't I made you cracky!!!!
> 
> Monies were borrowed from two of the big four banks. Also one of which has settled for a sizeable sum. The other has made a good offer.  But next time I'm thinking of investing I will seek you out because you have all the answers as you are the ultimate expert!!!!!
> 
> Next time you need a Doctor, diagnose yourself because what would a Doctor know....




Hey jjtebj12, I was thinking the same thing. 
Maybe we should send Wayne Swann and the Reserve Bank board over to get some advice as well . Man, they could really need some help in the States and Europe as well . All the worlds financial problems solved forever.Yipeee


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## bunyip (20 November 2012)

jjtebj12 said:


> Well haven't I made you cracky!!!!
> 
> Monies were borrowed from two of the big four banks. Also one of which has settled for a sizeable sum. The other has made a good offer.  But next time I'm thinking of investing I will seek you out because you have all the answers as you are the ultimate expert!!!!!





LOL!   No need to seek me out, my friend.  Learn to paddle your own canoe – it’s really not that hard. 
You don't need experts - you just need to think for yourself and use a bit of common sense instead of expecting others to do your thinking and research for you. 
That way you just might avoid repeating the costly mistakes you made last time.


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## bunyip (20 November 2012)

Ijustnewit said:


> Hey jjtebj12, I was thinking the same thing.
> Maybe we should send Wayne Swann and the Reserve Bank board over to get some advice as well . Man, they could really need some help in the States and Europe as well . All the worlds financial problems solved forever.Yipeee




Not a bad idea – Swan, Gillard and Co. have proven themselves to be money-wasting, incompetent fools who splash money around like drunken sailors – they could surely use some good advice!


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## Ijustnewit (20 November 2012)

bunyip said:


> Not a bad idea – Swan, Gillard and Co. have proven themselves to be money-wasting, incompetent fools who splash money around like drunken sailors – they could surely use some good advice!




You are spot on this time.


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## jjtebj12 (20 November 2012)

bunyip said:


> LOL!   No need to seek me out, my friend.  Learn to paddle your own canoe – it’s really not that hard.
> You don't need experts - you just need to think for yourself and use a bit of common sense instead of expecting others to do your thinking and research for you.
> That way you just might avoid repeating the costly mistakes you made last time.





I'm paddling my own canoe - don't worry about that. 

Also who said I've made costly repeated mistakes - you the misinformed ranter!!!! 

Both banks I've dealt with have made offers much to your disgust. Maybe you should take over as chief negotiator for the banks because you are the ultimate expert!


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## matty77 (20 November 2012)

hey bunyip,

clearly you seem to be one of those high performing people that never make a mistake and always does 100% due diligence before doing any deal, you must go "above and beyond" the normal scope?

I find your comments quiet rude to be honest, yes a certain amount of blame does have to go to the investor, but do you honestly think people should do that amount of "research" when investing in something? He isnt a financial adviser, he isnt a financial wizz like you obviously are so therefore he relies on other peoples advise as well as his own to make a decision.

You are being harsh, and you are placings YOURSELF on a Pedestal and you do have a pretty ignorant attitude I must say.


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## bunyip (21 November 2012)

jjtebj12 said:


> I'm paddling my own canoe - don't worry about that.
> 
> Also who said I've made costly repeated mistakes - you the misinformed ranter!!!!
> 
> Both banks I've dealt with have made offers much to your disgust. Maybe you should take over as chief negotiator for the banks because you are the ultimate expert!





You should read more carefully what was written. 
I didn’t say you’ve made _‘costly repeated  mistakes_’. I said that by thinking for yourself and using a bit of common sense, you just might be able to ‘avoid repeating the costly mistakes you made last time’.
And you did make some costly mistakes....not even you would deny that.

I have no reason to be disgusted that you’ve received offers from the banks who gave you a favourable opinion of the Storm strategy – people who endorse highly risky investments as ‘minimal risk’ should be held accountable.

Once you’ve cooled down a bit and have exhausted your repertoire of petty, scornful comments such as ‘you are the ultimate expert’, I suggest you go back and re-read my comments in Post 1673 where I outlined the steps that you could have taken to properly evaluate the Storm strategy. You’ll see that all of those steps are simple, common sense measures that were well within your capabilities. The information you needed was available free of charge, and it would have taken you no more than a few days of your time to find it. 
While it’s probably too late for you to benefit from these tips, there will be plenty of readers of these pages in years to come who may save themselves some grief if they know how to properly evaluate investment proposals.
Storm is gone, but other reckless investment schemes will spring up to replace it. More people will be burnt, but the number can be minimized if the general public have some basic investment education that seems to have been lacking in Storm investors.


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## bunyip (21 November 2012)

matty77 said:


> hey bunyip,
> 
> clearly you seem to be one of those high performing people that never make a mistake and always does 100% due diligence before doing any deal, you must go "above and beyond" the normal scope?
> 
> ...




I may seem to you like ‘_a high performing person who never makes mistakes’_. But I can assure you that I’m just an ordinary bloke whose made plenty of mistakes as well as some good decisions. Overall I’ve done OK from investment, but I make no claims to be filthy rich, and I never have. I have modest financial means that have allowed me to retire early to a nice little acreage property where my wife and I lead a simple, inexpensive and very contented lifestyle. 
I personally know many high performing people, and every one of them has made mistakes. The important thing is that we all learn from our mistakes so that we do better next time.

Some people like yourself may find my comments ‘quite rude’. Some others find them honest and helpful. This includes some Storm victims who have contacted me in person and thanked me for giving them information that they can pass on to their kids and grandkids to help them avoid falling into the same traps that caught Storm investors.
When you’re honest and forthright like I am, it’s inevitable that some people will get their feathers ruffled while others will appreciate you.

Do I really think people ‘should do that amount of research when investing in something’? Too right I do!
Storm was recommending two products to their clients – index funds as the investment, and margin loans to fund the investment. Don’t you think it would have been wise to thoroughly look into both to learn how they worked, how they’d performed in the past, what the risks were? 
jjtebj12 told us he spent months in research. The kind of research I’ve outlined could have been done in just 1 or 2 days, or even in just a couple of hours by using the wonderful resource called the internet.
He didn’t need to be a financial wizz. There’s nothing complex or high tech about the sort of research I’ve outlined. It’s just a case of putting a bit of thought into it and spending a couple of days getting the right information.
I’d say it’s worth spending a couple of days researching an investment proposition before committing millions of dollars or even a few hundred grand to it, wouldn’t you??

I’m not much interested in your comments that I’m being ignorant and I’m putting myself on a pedestal.  You can see it any way you like. But I’ll continue to give information that I believe can help future investors to avoid being burnt. If that gets up your nose, then don’t read my posts from here on.


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## SJG1974 (21 November 2012)

The research needed wasn't overly comprehensive to be honest. And you didn't need to be a financial wizard to untangle the risks.  Far from it.

Many went to Storm wanting a conservative strategy, and the Storm "advisers" recommended these people borrow and invest 100% in shares.

These people needed to ask themselves two straight forward questions, the answers to which can be found very easily-

1. Is investing in shares low risk?  Answer NO, it is high risk.
2. Does gearing reduce the risk of investing in shares to a conservative level?  Answer NO, its the complete opposite.

Two simple questions, two easy to find answers, one giant disaster averted.

The people who sold this as low risk need to be held accountable for their misleading conduct, and I would go a step further and say that any "independent" experts clients saw for a second opinion who looked over the strategy and said it was acceptable and low risk should be run out of the industry for failing to grasp even the most basic of investment fundamentals.


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## Julia (21 November 2012)

jjtebj12 said:


> RESEARCH, DUE DILIGENCE??? I banked for over 10 years with one of the big four (not CBA). It took me months in research.




jjtebj12, no obligation to respond, of course, but could you give us an idea of what actually you were researching that took months?


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## jjtebj12 (21 November 2012)

Julia said:


> jjtebj12, no obligation to respond, of course, but could you give us an idea of what actually you were researching that took months?




Well we met with Storm, then our Bank (of over 10 years business and private)  then our accountant (over 10 years with us) then our broker who was looking after our current investments in the stock market. We had further meetings with our bank who had conducted research into Storm. 

Our personal business banker along with his manager went and met with Storm for over four hours on two occasions. Our Accountant met with Storm following this. Following all these meetings both my accountant and my bank representatives sought independent advice (internally from a major bank). My banks advice along with my accountant came back 3-4 weeks later that it was sound advice that we received from Storm, nothing to be concerned with as any falls in the market both Banks would manage to ensure the safety of my assets. Following this we had several meetings with our bank managers and my accountant about our reservations. My bank said it would be beneficial for us to invest.  No-one stated a risk or conveyed concerns quite the contrary both my bank and  my accountant said it was a "sound scheme" (hence the reasons they settled). Our banks also said that we needed financial security and Storm could offer that. They  the bank "off the record admitted their mistakes". The other bank has made a offer which is being sorted through.

You can all say I should of, could of done more however we extensively conducted our due diligence (well documented). Our Bank admitted they failed us, hence immediate settlement. Please don't think that I'm a person who will sit here and blame someone for my mistakes. I've made plenty of errors and moved forward quietly. However I believe there was nothing more I could of done as I needed advice for financial security(as it wasn't my expertise and it's a mindfield) and for an comfortable retirement.

Don't return mail as I'm not interested. The above is a small snap shot of our investigations into Storm. No one will ever know unless you are privi to our Court documents. We ask our associate experts who we had faith in, however trust isn't in our vocabulary any more!!

NOT INTERESTED IN ANY REPLIES, SO PLEASE DON'T BOTHER!


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## Julia (21 November 2012)

jjtebj12 said:


> Well we met with Storm, then our Bank (of over 10 years business and private)  then our accountant (over 10 years with us) then our broker who was looking after our current investments in the stock market. We had further meetings with our bank who had conducted research into Storm.
> 
> Our personal business banker along with his manager went and met with Storm for over four hours on two occasions. Our Accountant met with Storm following this. Following all these meetings both my accountant and my bank representatives sought independent advice (internally from a major bank). My banks advice along with my accountant came back 3-4 weeks later that
> Following this we had several meetings with our bank managers and my accountant about our reservations. My bank said it would be beneficial for us to invest.  No-one stated a risk or conveyed concerns quite the contrary both my bank and  my accountant said it was a "sound scheme" (hence the reasons they settled). Our banks also said that we needed financial security and Storm could offer that. They  the bank "off the record admitted their mistakes". The other bank has made a offer which is being sorted through.
> ...



Despite your instruction above, I do want to thank you for responding to my question in such detail.

What seems to be a common factor amongst all Storm clients posting here is this, from your account above:


> it was sound advice that we received from Storm, nothing to be concerned with as any falls in the market both Banks would manage to ensure the safety of my assets.




i.e. that Storm had systems in place to ensure you were protected from market volatility.

What we've learned from this thread - and many others - is that so called professional advice was anything but.

It's easy for us to say "oh, all you needed to do was look at the gyrations of the market over a few decades" etc., but I do understand that someone lacking any experience of financial markets will feel less than confident making any such assessments, will have no idea how to access charts which so clearly show that the market does not always go up, and will therefore think "OK, I am investing a lot of money here so I need to get specialist advice."

I'll always maintain that borrowing money to invest and then borrowing again for a margin loan on those borrowed funds  *when one is retired or close to retirement age* is clearly fraught with risk. 
It's a strategy, however, which probably would make at least some sense for a young investor who had many years to recover losses.  
I have no interest in defending ASIC who are largely a waste of taxpayer funds, but perhaps when they 'approved' the Storm strategy, it was with a younger investor in mind.  And that's being generous to them.

I can, however, remember a time when I thought the so called advisers really did have a monopoly on wisdom,and that their experience must outweigh my own common sense instincts.
Such a great pity that trust in such advisers, and those banks which apparently supported such a flawed strategy, prevailed over what must have been common sense misgivings on the part of investors.

I'm genuinely glad to hear you are being offered settlements in the matter.


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## jjtebj12 (22 November 2012)

Julia said:


> Despite your instruction above, I do want to thank you for responding to my question in such detail.
> 
> What seems to be a common factor amongst all Storm clients posting here is this, from your account above:
> 
> ...




I'm still a long way off retirement. That's has been our saviour over the last few years.


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## Ijustnewit (22 November 2012)

Can anyone tell me if Storm and the Banks had kept their end of the bargain ie . selling down when they said they would. Is it feasible that an investment in a managed fund covering the ASX200 and using a Margin loan with a maximum LVR at 60 % would have worked ? This includes paying down the loan and handing it in so as not to incur any more interest. Also moving the leftovers if any ? to a term deposit for example. I understand there would be losses but would it be possible to walk away with something and play another day ?
I'm just curious as all the above scenarios and all the previous crashes dating back to 1929 / 30 and including the 1987 stock market crash and 9/11 were all covered in the Storm seminars . And at the time before the last crash the history of the ASX showed it had returned an average of 14%? ( correct me if I'm wrong ). 
I have not included loans against property , just someone turning up with a sack of cash.
Cheers.


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## DocK (22 November 2012)

Ijustnewit said:


> Can anyone tell me if Storm and the Banks had kept their end of the bargain ie . selling down when they said they would. Is it feasible that an investment in a managed fund covering the ASX200 and using a Margin loan with a maximum LVR at 60 % would have worked ? This includes paying down the loan and handing it in so as not to incur any more interest. Also moving the leftovers if any ? to a term deposit for example. I understand there would be losses but would it be possible to walk away with something and play another day ?
> I'm just curious as all the above scenarios and all the previous crashes dating back to 1929 / 30 and including the 1987 stock market crash and 9/11 were all covered in the Storm seminars . And at the time before the last crash the history of the ASX showed it had returned an average of 14%? ( correct me if I'm wrong ).
> I have not included loans against property , just someone turning up with a sack of cash.
> Cheers.




The hypothetical scenario you've posed is very close to my situation.  I bypassed Storm and dealt directly with Macquarie and got out of both the Storm indexed funds and my margin loan at just over 70% lvr.  Later than I should have (it was initially around 50%), but much better than leaving it to my Storm adviser or I would no doubt have wound up in negative equity.  Since then I slowly and tentatively fed the "leftovers" into the market (unfortunately missing a big chunk of the rise off the March '09 low due to "sharemarketphobia"), then got out  and put the funds into a set-off account against left-over debt against property, and started reinvesting some earlier this year.  I'm not following an index-based approach this time, but a trend-following system on individual shares that I exit without fail if an uptrend falters.  To date I'm up a very modest amount, including divs, but given the lack of any sustainable uptrend in the overall market I'm OK with that - it's more important to me to protect capital and be placed to take advantage of the next bull market - if that ever happens again!  I see this as the best way of clearing my residual debt on my home - given I have several years to retirement age.  

So I guess the short answer to your hypothetical is:  had Storm/margin lender/ got all margin loan customers out when they should have, their capital would have taken an absolute hiding, but they'd have a chance of replacing it given enough time and an obliging market.


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## bunyip (22 November 2012)

SJG1974 said:


> The research needed wasn't overly comprehensive to be honest. And you didn't need to be a financial wizard to untangle the risks.  Far from it.
> 
> Many went to Storm wanting a conservative strategy, and the Storm "advisers" recommended these people borrow and invest 100% in shares.
> 
> ...



An excellent post, SJ. I particularly agree with your succinct appraisal of how simple it was to see that the Storm model was exactly the opposite of the ‘safe, conservative and fail-proof strategy’ that it was touted to be.

Unfortunately, many of the incompetent and unscrupulous people who sold the strategy as ‘safe and conservative’ are still working in the industry. Many of them will receive no penalty at all, others will get off with a slap over the wrist.
It's doubtful that any of them will do jail time, though they surely deserve it.


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## Ijustnewit (22 November 2012)

Yes Bunyip this seems to be the case. There was an article in my local Tasmanian paper on Saturday by the Barefoot Investor Scott Pape . The article was titled "Beware Of False Profits ". Unfortunately I can not find a link anywhere.
The story was about The Reverend Alan Colyer who according to the article lost $250,000 with Storm when it collapsed. The Reverend then followed the *SAME* advisor over to Sonray Capital Markets who advised him to invest with Sonray to recoup his Storm losses . He lost another $500,00 when Sonray collapsed.
Now not withstanding the Reverend must have some real faith in people , *WHY*in Gods name was this advisor allowed to continue to work in the industry. Certainly there is something fundamentally and ethically wrong with the financial advice sector when something like this is allowed to happen. How many more of these advisers are still out there working and giving advice ?


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## Julia (22 November 2012)

jjtebj12 said:


> I'm still a long way off retirement. That's has been our saviour over the last few years.



Good.  That means your situation is at least not as bad as those already in retirement or close to it.

Having had this experience, how will you now approach investing for the future?


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## jjtebj12 (22 November 2012)

Julia said:


> Good.  That means your situation is at least not as bad as those already in retirement or close to it.
> 
> Having had this experience, how will you now approach investing for the future?




That's the million dollar question because if you were in my shoes - how would you approach investing in the stock market, or more importantly who would you trust with your hard earned? My answer - noone at the moment!!!!!


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## Julia (22 November 2012)

jjtebj12 said:


> That's the million dollar question because if you were in my shoes - how would you approach investing in the stock market, or more importantly who would you trust with your hard earned? My answer - noone at the moment!!!!!



If you'd read any of my posts throughout this thread you'd know the answer.  I would educate myself.
Absolutely no one will act as diligently on your behalf as you will yourself.
Financial literacy is not difficult.

Have a read of DocK's post:


> The hypothetical scenario you've posed is very close to my situation. I bypassed Storm and dealt directly with Macquarie and got out of both the Storm indexed funds and my margin loan at just over 70% lvr. Later than I should have (it was initially around 50%), but much better than leaving it to my Storm adviser or I would no doubt have wound up in negative equity. Since then I slowly and tentatively fed the "leftovers" into the market (unfortunately missing a big chunk of the rise off the March '09 low due to "sharemarketphobia"), then got out and put the funds into a set-off account against left-over debt against property, and started reinvesting some earlier this year. I'm not following an index-based approach this time, but a trend-following system on individual shares that I exit without fail if an uptrend falters. To date I'm up a very modest amount, including divs, but given the lack of any sustainable uptrend in the overall market I'm OK with that - it's more important to me to protect capital and be placed to take advantage of the next bull market - if that ever happens again! I see this as the best way of clearing my residual debt on my home - given I have several years to retirement age.




DocK has adopted a simple trend following approach.  If you spend around $30 and acquire a copy of Stan Weinstein's "How to Profit in Bull and Bear Markets" you will quickly and easily understand this.
While you're waiting for the book to arrive, work your way through the online education about the market supplied by the ASX:   http://www.asx.com.au/resources/shares-education.htm .

What happens from here is up to you.


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## SJG1974 (22 November 2012)

Ijustnewit said:


> Yes Bunyip this seems to be the case. There was an article in my local Tasmanian paper on Saturday by the Barefoot Investor Scott Pape . The article was titled "Beware Of False Profits ". Unfortunately I can not find a link anywhere.
> The story was about The Reverend Alan Colyer who according to the article lost $250,000 with Storm when it collapsed. The Reverend then followed the *SAME* advisor over to Sonray Capital Markets who advised him to invest with Sonray to recoup his Storm losses . He lost another $500,00 when Sonray collapsed.
> Now not withstanding the Reverend must have some real faith in people , *WHY*in Gods name was this advisor allowed to continue to work in the industry. Certainly there is something fundamentally and ethically wrong with the financial advice sector when something like this is allowed to happen. How many more of these advisers are still out there working and giving advice ?




Yeah I read that article.  Scott Pape is generally quite good I feel with his opinions...I enjoy his articles.  He takes a common sense approach.

I have noticed recently a few ex-Stormers have been in the news for being banned....not sure why it has taken so long.  You would think any adviser with Storm on their CV would have a black mark against his/her name, and people would avoid them like the plague, yet some people, like the good Reverend, are just too trusting unfortunately.


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## bunyip (23 November 2012)

Ijustnewit said:


> Yes Bunyip this seems to be the case. There was an article in my local Tasmanian paper on Saturday by the Barefoot Investor Scott Pape . The article was titled "Beware Of False Profits ". Unfortunately I can not find a link anywhere.
> The story was about The Reverend Alan Colyer who according to the article lost $250,000 with Storm when it collapsed. The Reverend then followed the *SAME* advisor over to Sonray Capital Markets who advised him to invest with Sonray to recoup his Storm losses . He lost another $500,00 when Sonray collapsed.
> Now not withstanding the Reverend must have some real faith in people , *WHY*in Gods name was this advisor allowed to continue to work in the industry. Certainly there is something fundamentally and ethically wrong with the financial advice sector when something like this is allowed to happen. How many more of these advisers are still out there working and giving advice ?




My initial reaction when I heard about Storm investors getting cleaned out was_ ‘Serves them bloody well right for taking such ridiculous risks with vast sums of borrowed money in the always risky and volatile stock market’._

However, as more information came to light and I learnt about the blatant dishonesty of the so-called ‘experts’ who advised them, I modified my view to some extent. 

But really, there comes a time when the actions of some people reach such a level of foolishness that when they come to grief you really do have to think ‘_It serves them bloody well right’._ 
The good reverend must surely be one such person. Perhaps he placed his faith in God to guide him. If so, his faith appears to have been rather misplaced.


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## Frank Ainslie (25 November 2012)

jjtebj12 said:


> RESEARCH, DUE DILIGENCE??? I banked for over 10 years with one of the big four (not CBA). It took me months in research. My personal banker along with another, so called expert in investing met with Storm and went through the same process as us. My accountant also went through the same process as the bank. They then prepared a report and sent it to their internal department for Risk Analysis. Guess what they confirmed that the structure of Storm works and they had other clients of the bank who had been involved with Storm. In their words "yes this works with minimal risk"! They also stated that Storm had the necessary steps and experience to manage our portfolio. They have since settled quietly. I work long hours and was looking for long term investing strategies and professional advice on my situation and a plan for my comfortable retirement. There is no one in the finance industry that you can trust. Every where you turn it's all hidden agendas. So please do not tell me I didn't do any research or due diligence because as you can see I did.




Hi jjtebj12! 

I think what Bunyip is telling you is that if you use his crystal ball, you can avoid all the financial pitfalls out there! He also has a device you could borrow that goes _'tick_' when you meet a shonky financial adviser and it starts _'beeping'_ when you meet a shifty banker.  The downside is that you might end up going deaf but that's the price you have to pay for good advice these days.


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## bunyip (26 November 2012)

Yes Frank, as a matter of fact I do have such a device. But rather than ticking or beeping, mine rings alarm bells when it senses danger or smells fraud or dishonesty. In fact it rang the alarm bells loud and clear only yesterday when I got an email from someone claiming to have won 130 million Euro in Europe’s largest lottery, and offering to share the prize with me by transferring 2.5 million Euro to my bank account if I’d give them my account details.
My device is called CST (Common Sense Thinking), and it’s steered me clear of many a trap that has snared the unwary and imprudent.
The good news is that you too have your very own CST device. Everyone does. But some people, like yourself for example, have their CST switched off more often than switched on. 
And that’s unfortunate, because people with their CST switched off do some crazy things. 

Being a Queenslander, you’ll recall the Dragon Rapide vintage aircraft that crashed near Gympie about a month ago, killing all six people on board. Despite his vast flying experience, the pilot obviously had his CST switched off when he took off during atrocious weather, radioed that he was lost in cloud, and slammed into a hillside shortly after. He apparently had no ELB with him either (emergency locator beacon) , so it took several days to locate the wreckage. 
From my own experience as a private pilot I know that pilots with their CST switched on choose to stay on the ground during inclement weather, and they carry ELB’s with them on every flight.

How often do we see people swimming in crocodile infested waters, drink driving, wiping themselves out on booze or drugs, putting their health at risk through poor diet, lack of exercise, and obesity. These people all have their CST switched off.

Most devices like TV’s, computers etc, start costing you money as soon as you switch them on. CST is different in that it costs you nothing while it’s switched it on, but it can be extremely costly when you have it switched off. 
You found that out the hard way, didn’t you Frank, by switching off your CST during you dealings with Storm!



Frank Ainslie said:


> I now firmly believe, we ‘Stormies’ should have sought a second and indeed a third opinion from other financial advisers as to the merit of Storm’s financial model and, for those that had an accountant, run it past him or her as well.
> 
> Often, when you consult with more than one professional you pick up some useful advice anyway in your search for the best solution to your particular needs, whatever they may be. This is commonsense after all! As it was, our failure to apply some commonsense and test Storm’s plan independently cost us all that we had in the end.



As you can see from the above quote, you admit that your failure to apply some common sense cost you all that you had in the end.
If you’d had your CST switched on you may spotted the risk by asking yourself just a couple of simple questions like those outlined by SJG in his recent post.......

_1. Is investing in shares low risk? Answer NO, it is high risk.
2. Does gearing reduce the risk of investing in shares to a conservative level? Answer NO, its the complete opposite._

Just think of how different your present situation would be if only you’d asked and answered a couple of simple questions like those.

I firmly believe that most people who approached Storm walked away because their CST told them that neither gearing nor the stock market was safe and conservative, as was being claimed. Sure, some may have walked because they were just window shopping.. But most would have been aware of the wild swings and murderous plunges that are common in the market, and most would be well aware of how easy it is to get into trouble if you load up with too much debt. On that basis they saw straight through Storm’s ridiculous claim that their model was safe and conservative. So they turned their back on it and walked away.

Frank ol’ son, take a tip from your old sparring partner - switch on your CST. You’ll find it’s a lot cheaper to have it on than off, and it just might save you from further grief.


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## doobsy (27 November 2012)

Ijustnewit said:


> Can anyone tell me if Storm and the Banks had kept their end of the bargain ie . selling down when they said they would. Is it feasible that an investment in a managed fund covering the ASX200 and using a Margin loan with a maximum LVR at 60 % would have worked ? This includes paying down the loan and handing it in so as not to incur any more interest. Also moving the leftovers if any ? to a term deposit for example. I understand there would be losses but would it be possible to walk away with something and play another day ?
> I'm just curious as all the above scenarios and all the previous crashes dating back to 1929 / 30 and including the 1987 stock market crash and 9/11 were all covered in the Storm seminars . And at the time before the last crash the history of the ASX showed it had returned an average of 14%? ( correct me if I'm wrong ).
> I have not included loans against property , just someone turning up with a sack of cash.
> Cheers.




IJustNewit - you have to make some assumptions to get an answer but I will put something up.

Lets say gearing level was a more conservative 50% (which was Storms preferred level) when the market peaked at around 6750.

If margin call was triggered at the 80% level and not the 90% level the if required a fall of 37.5% on the market. This would equate to 4220.

Now the important thing is where did the equity come from to see what impact it had on clients. There are 2 scenarios:

1. Client came in with available equity and no house or was not willing to borrow against the house. This would include super monies withdrawn.

2. Client came with a house that was mortgaged against to provide capital.

Starting with 1. Lets use basic numbers. Client brings $100K to Storm, storm arrange the margin loan for a further $100K so 50% geared. When the margin call triggers and the investments are sold (80% LVR) the $200,000 investment is now worth $125,000. Pay back the margin loan of $100K and client left with $25K of their original $100K. A 75% loss. Yes they have monies to play another day but you need to see the $25K go up by 4x just to get back to even. Pretty hard considering you would assume they would be gunshy of borrowing again to leverage the return.

Scenario 2. Same result of $25K but they still owe $100K on the house (which provided the initial capital) so they are actually in a much worse position as there is no way to turn off the interest on the home loan and if they use the $25K remaining to minimise the interest they don't have anyway of getting a return on the monies to hopefully see them grow a bit again.

The strategy only worked if clients were NEVER sold out. If the markets fell and they stayed in then Storm assumed it would rebound and losses would be recovered as they still had the same amount of units invested. This is why Storm arranged higher LVRs, without them it would have gone to mud even quicker. Clients would have been better off but still hopelessly screwed.

We have also seen that markets have not rebounded so even if they had some way of keeping them in and avoiding the margin call we are still down around 35% and their interest would have kept on compounding for 4 years meaning they would need markets to run even higher than last time to get back to that magical 50% gearing level. 

Before I get a run of responses let me be clear about a couple of things. The STRATEGY was legal. Storm and the banks arrangements may be found to be otherwise but I can still give the same advice to a client and not be in breach should they fall under the right risk tolerance. So ASIC were never going to say the strategy was illegal. What ASIC missed was who it was being sold to. The same with the banks, the strategy is legal so no one in their compliance arm would say otherwise based on purely the advice. What they missed was how it was being funded.


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## doobsy (27 November 2012)

Can I also make this point.

If a client walks into my office with $500,000 and no debt on their house (worth $500,000) and I invest that for them into shares I need the share market to drop 100% (ie not exist anymore, BHP, Woolworths, ANZ all not be worth anything) before I can lose all of that clients money.

If that client walked into Storm. They get to redraw $400,000 from the house, use the $500,000 and then gear at 50% for a total investment of $1.8M. The value only needs to drop to $1.3M (28%) before that client has on paper lost all of their capital.

Be very careful with ALL debt.


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## bunyip (28 November 2012)

doobsy said:


> Can I also make this point.
> 
> If a client walks into my office with $500,000 and no debt on their house (worth $500,000) and I invest that for them into shares I need the share market to drop 100% (ie not exist anymore, BHP, Woolworths, ANZ all not be worth anything) before I can lose all of that clients money.
> 
> ...




And just to elaborate a little more to further illustrate the enormous risk.....
If a client has a 1.8 million dollar portfolio, of which 1.3 million is borrowed money and half a million is his own money, just one day of  precipitous decline such as the 25% market collapse on 20/10/87 would wipe out 450k or 90% of his base capital of 500k. *IN ONE DAY*. And 80% of that decline would have occurred the instant the market the opened, assuming a repeat of the ‘87 crash. Margin calls would have been useless in saving him from catastrophic loss in that situation.
That’s how risky the Storm model was. And to spot that risk,  the client only had to divide his proposed portfolio value by 4 to find out how much it would decline in one day if there was a 25% drop, and then work out what percentage of his base capital he’d be left with.

It really was that quick and simple to find out that they were having a lend of you by selling this as a safe and conservative strategy.


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## Frank Ainslie (28 November 2012)

Hi Doobsy!

Time to pick your brain!

The scheme that Storm operated was to my mind simply a device for churning money out of clients with substantial assets that Storm used for their own purposes. It was clever because few if any saw through the scheme from the simplest investor right the way through to ASIC. As you say it was legal in nature but illegal in its design and purpose. 

I am pressed for time at the moment because I am in court most days. However, I’ll start with the LVR deception and comment on other flawed aspects in this scheme when time permits.

Because you seem to know what you are talking about, I would welcome your comments.

What do I mean by the LVR Deception? I am referring to the distortion that arose in the LVR’s due to Storm’s failure to include all investors’ liabilities and assets in the necessary equation. The result for any Storm clients that were over-leveraged (and most were) was catastrophic when this extension in risk was combined with the inordinate delays that occurred in selling clients down in late 2008.

In the Liquidator report (Worrells) it said in this respect: _“The liquidators understanding of the evidence given by Mr and Mrs Cassimatis on this topic is that, despite the statement made in the SOA and the prospectus, Storm never had the capacity, or the intention of closely monitoring and managing client's debts and portfolios. It seems that the monitoring that did occur was undertaken primarily to identify opportunities for Storm to persuade clients to take further "step" investments (as mentioned in section 7 of this report) rather than in pursuance of a policy of ensuring that the clients loan to security ratio was not placed at risk. Further, it seems Storm was totally reliant on receiving accurate "data feeds" from at least one major source to carry out even the limited monitoring role mentioned.” _

One of the reasons that Storm never had the capacity to _“closely monitor and manage client's debts and portfolios” _was because its _‘software’_ was not designed to cater for the monitoring of any bank loans be they _‘housing loans’ _or _‘margin loans’_. For such information Storm relied entirely on data fed to it by the banks involved. The LVR’s used by Storm were consequently distorted because the housing loans were never taken up and margin loan data had to be fed in from bank information to hand. Invariably, it was late.

The following was taken from an investor’s statement that was presented to the PJ-C. It tallies with my own findings

_“The Loan to Value Ratio - The LVR Deception 
The main indicator of our debt/asset position was the gearing level or LVR which was available via Macquarie Margin Lending Summary. 
During any advice session this was always a reference point. Whenever our advisor reviewed our position, the Macquarie Margin Lending LVR was always referred to and used as a key and current indicator of our true position and whether further investment should be undertaken. 
Sadly it is only now and in hindsight that we have come to understand more exactly the degree of obfuscation that clouded our understanding and judgement in relation to the all important LVR (Loan to Value Ratio) which was used when planning our 'Next Steps' i.e. additional investments. The LVR was so critical in determining whether the step was judicious. 
When advising us our level of debt was always represented only by the LVR as per 
Macquarie Margin Lending's Summary. 
There was no account taken of the $380,000.00 loan from the Bank of Queensland which was derived from the debt against the house. 
This was not 'visible' as part of the debt/loan balance/LVR of our Margin Loan and was not ever referred to in discussion about our LVR. 
This omission and failure to consider the WHOLE debt position obviously gave a false and misleading reading of our actual investment situation. 
A real example of the misleading LVR is as follows:
In the period from October to December 2007 our "Current Gearing Level' was showing as: 61.54% (Current Loan Balance $1,686,153.00: Market value $2,739,735.00) which, according to STORM and our advisor, would represent a very acceptable situation - a safe gearing level, a no worry situation and an ideal time to further invest. 
In fact we took another 'step' and invested a further $66,000.00 in December 2007. 
BUT it seems to us that what really should have been not only visible, but also added to the loan balance to see the REAL LVR and true level of debt, was the additional $380,000.00 debt of borrowings against the house. This was after all borrowed along with the Macquarie Margin Loan with the sole purpose for investment into the Indexed Trusts. 
Thus in the period from October to December 2007 the real LVR was in actual fact 75.06% i.e. Current Loan Balance: $1,686,153.00 + Home Loan of $380,000.00 = $2,066,153.00 versus Market Value $2,739,735.00. It was not the touted acceptable 61.54% - Current Loan of $1,686,153.00 versus Market Value $2,739,735.00. 
Why then were we advised to invest when the gearing level, taking into account the real level of debt, was in fact at a very dangerous and unacceptable level of 75.06% 
So, even when matters were under control and markets were still behaving in early 2007 and our 'visible' yet 'deceptive LVR' was showing on our MML Summary at a mere and supposedly safe and conservative 46.02%. the 'real and actual, but invisible and not taken account or LVR i.e. the one taking into account the home loan debt (invested into the market) should have read as 64.4% i.e. Loan value of $950,818.00 + Home Loan of $380,000.00 = 1,330,818.00 versus Market value $2,066,077.00 and not as 46.02% i.e. Loan Balance of $950,818.00 versus Market Value of $2,066,077.00”_

MBL’s failure to notify its Storm clients in reasonable time of margin calls because of its prior arrangements with Storm and its failure to ensure that the clients’ true LVR’s could be accurately established by Storm at any time largely contributed to the losses that followed. These deficiencies within a system that Storm and the MBL operated jointly (Alliance’ agreement)effectively jammed the escape hatch at a time when extrication was still possible.

Clearly Storm could not deliver and the MBL among others are now being held accountable for this. The MBL assigned the margin loan contractual obligations they had to their customers to Storm, and in so doing violated their customers' rights. For the MBL to simply say now that,_ 'We didn't know that Storm could not do what they told us they could do!' _isn't good enough. The MBL should have made it its business to know!

I will finish by saying this. Once banks such as the CBA and Macquarie Bank made separate arrangements with outside parties such as Storm WITHOUT NOTIFYING THEIR CUSTOMERS AND OBTAINING APPROVAL they effectively breach their contracts with their margin loan clients because they are assigning their obligations without novation. That is a fundamental part of contract law.

Be that as it may, the LVR's were set high enough as it was and the fact that they were also inaccurate just shortened the fuse even further. Let's hope this all comes out in Court!


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## Julia (28 November 2012)

Frank Ainslie said:


> . As you say it was legal in nature but illegal in its design and purpose.



I don't think Doobsy said it was illegal in its design and purpose.



doobsy said:


> Before I get a run of responses let me be clear about a couple of things. The STRATEGY was legal. Storm and the banks arrangements may be found to be otherwise but I can still give the same advice to a client and not be in breach should they fall under the right risk tolerance. So ASIC were never going to say the strategy was illegal. What ASIC missed was who it was being sold to. The same with the banks, the strategy is legal so no one in their compliance arm would say otherwise based on purely the advice. What they missed was how it was being funded.




How you could just ignore the home loan in your total LVR calculations is beyond me.
What did you think had happened to that debt?


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## Harleyquin (28 November 2012)

It never ceases to amaze me that some non stormies assume that stormies in their 30s and 40s can easily start again. I know a stormie couple in their early 40s who are both working just to pay the interest on their loan. How can they start again. How many others are in this same position.


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## doobsy (29 November 2012)

Harleyquin said:


> It never ceases to amaze me that some non stormies assume that stormies in their 30s and 40s can easily start again. I know a stormie couple in their early 40s who are both working just to pay the interest on their loan. How can they start again. How many others are in this same position.




Going to make the mistake of getting involved in this forum again.

HQ, they can start again by selling things, going bankrupt, whatever. Harsh I hear, yep. Are they all that different from the tourism operators that have gone under in recent times in FNQ? Some of them no doubt had equity from their house invested in their businesses and were having a fair dinkum crack at making a business work. They will have debt to repay too.

How about the contractors that were owed tens to hundreds of thousands of dollars when developers went under. Most of them have their house as equity against their business. Bet there are plenty that had their homes taken when it was nothing they did wrong, they just never got paid for work they had done.

Stormies in their earlier years have been taught a nasty lesson on getting rich quick. I was talking to a client who had his best mate sell up his business machinery, invest with Storm and retire at 45. What was he thinking? That isn't normal. It sounded great but as with most schemes promising the world there is always a catch.


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## SJG1974 (29 November 2012)

Julia said:


> How you could just ignore the home loan in your total LVR calculations is beyond me.
> What did you think had happened to that debt?




Exactly.  How can one suddenly "forget" they have a $380,000 debt against their home? 

So let me get this straight....we have heard Storm clients who...

Paid massive fees for cookie cutter advice
Borrowed to the gills under the impression it is conservative
Invested the whole lot in shares under the impression it is conservative
Were blissfully unaware that we were going through a Global Financial Crisis
Didn't take the slightest bit of interest in the fact that the portfolio is losing money hand over fist on an almost daily basis during 2008 or at least didn't think to check
Borrowed more as the market continued to fall
Overlooked the massive debts against their homes

It beggars belief. Cassimatis and his minions must have been some amazing salespeople to get people into this under the guise of it being "conservative".


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## doobsy (29 November 2012)

Frank - I was waiting for a question but there wasn't one.

Lets be clear here. It was not a requirement of a margin lender to find out where the equity offered as security came from. It is now. Back then all the rules said were that you had to offer security to the margin lender. In doing so you were giving them the right to take that security should the loan go bad and you could not meet the margin call.

I refuse to go back over the same ground of special deals and special LVR levels. The courts will sort this.

Lets take a step back. For a NON storm client who had a margin loan - they offered equity (in the form of shares/managed funds/cash) to the margin lender and the ML then gave them a loan against that equity. Why is it the ML responsibility to ensure the equity offered is legit and wasn't sourced from other borrowing? SURELY the guy applying for the loan knows where the equity came from and knows whether part of it was funded from their house equity. Surely they know that if the margin loan gets triggered and the ML takes the equity offered to protect that loan that they are left with little to no equity to pay back the other loan and therefore the equity (whether borrowed or taken from super or cash from a property sale) is going to be lost.

In all this the Margin Lender will only get in trouble for the special deal, not the lending. ML lending is all about equity and all clients came to the ML with equity.

On the monitoring of loans. BS BS BS BS BS BS. Lets look at LVR on the margin loan. Loan value - pretty frickin simple to get from the lender. As most pre-paid interest the value did not change throughout the year unless there was another step taken. This was TOO EASY to know correct values.

Value of Investments - Colonial or Challenger would have been providing daily unit pricing. Units x unit price = value. Again nothing complex there. If they claim they were getting value from the ML I ask why as it isn't the investment manager.

LVR - Loan as per above divided by Value as per above. HOW HARD WAS IT???????????????????????????????

I could set up an excel spreadsheet in about 15 minutes to do that let alone give me a couple of million $ to develop some BS software system. Funnily enough they were quick and accurate on LVR when it dropped and that triggered the system to tell them someone should be taking another step.

*Overall LVR*

This was surely Storm that should have as the ones in charge of and the ones who recommended the strategy that should have known all available information and therefore what the Overall debt position to overall asset position was. Again - I don't think home loans (investment withdrawal components as opposed to legit home debt) were changing unless Storm arranged it and recommended it and interest was prepaid were possible to max the tax deduction so they had a bloody good idea. 

Do not believe the lies of EC and JC, they are playing as dumb as possible. Are you telling me people smart enough to get to $5B under their management did not know what their clients had? Clients took 6 months to get on board because of how thorough the fact finding was and how they needed every last detail to plug into their fancy modelling to fool everyone into thinking all was well.


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## Julia (29 November 2012)

doobsy said:


> HQ, they can start again by selling things, going bankrupt, whatever. Harsh I hear, yep. Are they all that different from the tourism operators that have gone under in recent times in FNQ? Some of them no doubt had equity from their house invested in their businesses and were having a fair dinkum crack at making a business work. They will have debt to repay too.
> 
> How about the contractors that were owed tens to hundreds of thousands of dollars when developers went under. Most of them have their house as equity against their business. Bet there are plenty that had their homes taken when it was nothing they did wrong, they just never got paid for work they had done.



And dozens more similar examples.  The people running legitimate businesses with insulation who were done over when the government's pink batts scheme turned into such a fiasco.  

I don't know anyone who hasn't experienced some sort of significant setback in their lives, often through absolutely no fault of their own as distinct from people who took what should have been an obvious risk.

First step to recovery is to not get attached to the mantle of victimhood.


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## ASICK (29 November 2012)

*The Seven Stages of Grief*

Loss of a substantial part of one's life's saving can be quite a shock and there are established "stages" of recovering (mentally) from such a loss:-
http://www.recover-from-grief.com/7-stages-of-grief.html


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## bunyip (29 November 2012)

SJG1974 said:


> Exactly.  How can one suddenly "forget" they have a $380,000 debt against their home?
> 
> So let me get this straight....we have heard Storm clients who...
> 
> ...




SJG.....There’s one thing you forgot to mention – *none of this is their fault*!! LOL
At least, that’s what a handful of diehards on this forum keep trying to tell us!

As for the Storm mob being great salespeople – perhaps, yet of the many thousands of people who consulted Storm, three out of four of them for whatever reason didn’t take the bait. So maybe the Storm sales team wasn’t so great after all.


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## bunyip (30 November 2012)

doobsy said:


> Before I get a run of responses let me be clear about a couple of things. The STRATEGY was legal. Storm and the banks arrangements may be found to be otherwise but I can still give the same advice to a client and not be in breach should they fall under the right risk tolerance. So ASIC were never going to say the strategy was illegal. What ASIC missed was who it was being sold to.





Fair enough that ASIC didn't shut down what was a legal strategy. 
But what really condemns them is the glowing endorsement they publicly gave to the Storm model. It's unforgivable that ASIC were so effusive in their priase of a 'get rich quick' strategy that was highly risky and downright farcical.


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## Jifromoz (1 December 2012)

This was in the paper this morning.

http://www.dailytelegraph.com.au/ne...financial-advice/story-fndo2j43-1226527878811

It appears he has been banned for life.


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## bunyip (1 December 2012)

Jifromoz said:


> This was in the paper this morning.
> 
> http://www.dailytelegraph.com.au/ne...financial-advice/story-fndo2j43-1226527878811
> 
> It appears he has been banned for life.




Sounds like Fullerton Smith well and truly deserves his permanent ban from providing financial services. I believe that many thousands of people would be delighted if EC and JC copped the same. Not that it’s likely to happen.


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## bunyip (1 December 2012)

Someone sent this to me, not sure where he got it. It's quite long but is well worth a read. Many of these truths are evident when we examine the Storm debacle. The comments in red are mine.

15 biases that make you a bad investor..........

Investing shouldn’t be hard. Buy quality companies at good prices and hold them for a long time. Not much more to it than that. Yet so many investors ”” maybe most ”” fail to beat a basic index fund. Why?Blame your brain. We come hardwired with all kinds of biases that cause us to misinterpret information and push us into regrettable decisions. Here are 15 of the biggest.

Confirmation bias
Starting with an answer, and then searching for evidence to back it up.

If you start with the idea that hyperinflation is imminent, you’ll probably read lots of literature by those who share the same view. If you’re convinced an economic recovery is at hand, you’ll probably search for other bullish opinions. Neither helps you separate emotions from reality.

Berkshire Hathaway (NYSE: BRK-B) vice-chairman Charlie Munger is a fierce advocate of the intellectual strategy of Charles Darwin, who regularly tried to disprove his own theories, and was especially sceptical of his own ideas that seemed most compelling. The same logic should apply to investment ideas.

Recency bias
Letting recent events skew your perception of the future.

When we’re in a bull market, you think it’ll last forever.

(The success of the Storm strategy was heavily dependent upon the bull market lasting indefinitely. The strategy was always going to implode once the next bear market arrived.)

When we’re in a recession, you think we’ll never recover. After a banking crisis, you think another is right around the corner. Rarely is that actually the case ”” it’s usually the other way around ”” but it’s what feels right when memories are fresh in our minds.

Backfiring effect
When presented with information that goes against your viewpoints, you not only reject challengers, but double down on your original view.

(On this Storm thread we have frequently seen people attacked and ridiculed and denigrated because they put forward opposing views to those held by some Storm investors.)



Voters often view the candidate they support more favourably after the candidate is attacked by the other party. In investing, shareholders of companies facing heavy criticism often become fanatical, die-hard supporters for reasons totally unrelated to the company’s performance.

Anchoring
Letting one piece of irrelevant information govern your thought-process.

Best example: Investors anchor to the idea that a fair price for a stock must be more than they paid for it. It’s one of the most common, and dangerous, biases that exists.

 “People do not get what they want or what they expect from the markets; they get what they deserve,” writes Bill Bonner.

(If you go into the marekt with your eyes closed and start taking serious risks, you’ll end up getting seriously burnt. Harsh but true.)

Framing bias
Reacting differently to the same information depending on how it’s presented. Example:

“Google shares surge to highest level in five years.”

“Google shares haven’t gone anywhere in five years.”

Both statements are true.

Skill bias
When education and training causes confidence to increase faster than ability.

The best example is the hedge fund Long Term Capital Management. Staffed thick with PhDs and two Nobel laureates, the fund exploded in 1998 under an incomprehensible amount of leverage. Behind the failure was raging overconfidence. “The young geniuses from academe felt they could do no wrong,” Roger Lowenstein wrote in the book When Genius Failed.

Warren Buffett said this about the firm’s sixteen-person management team:

They probably have as high an average IQ as any sixteen people working together in one business in the country … just an incredible amount of intellect in that group. Now you combine that with the fact that those sixteen had extensive experience in the field they were operating in … in aggregate, the sixteen probably had 350 or 400 years of experience doing exactly what they were doing. And then you throw in the third factor: that most of them had virtually all of their very substantial net worths in the business …And essentially they went broke. That to me is absolutely fascinating.

(Sound familiar? Storm owners and Storm financial advisers invested heavily in the Storm strategy. Apparently they were fully convinced that it was the way to riches, despite all the evidence to the contrary.)

Hindsight bias
Out of literally millions, only a handful of investors truly saw the financial crisis coming.

If you disagree with that statement and respond, “No, any idiot could have seen it coming from a mile away,” you’re suffering from hindsight bias. Only after the fact do all the puzzle pieces make sense. That’s why bankruptcies outnumber billionaires.

(I disagree with their opinion on this one. Almost every media outlet was giving dire warnings almost every day for a good 12 months before the economic crisis hit with full force. To be unaware of what was coming you’d have to be blind or deaf or just plain disinterested.)

Pessimism bias
Underestimating the odds of something going right. Financial advisor Carl Richards writes:

We focus so much on protecting ourselves from negative surprises (job loss, disability, divorce, death .. the whole catastrophe) that we forget to factor in the positive ones (a raise, a business that works out, a new career, a new bull market) that can sometimes change our entire outlook.

Halo effect
“If we see a person first in a good light, it is difficult subsequently to darken that light,” writes the Economist.

(The combination of heavy gearing and a bull market produced outstanding results for Storm investors from 2003 to late 2007. Many of them appear to have regarded EC as a genius who could do no wrong. Accordingly, they appear to have believed in him with almost religious fervor, even accepting the outrageous advice to keep borrowing and investing more and more money despite the fact that the stock market was collapsing and the world was in the grip of a full-on economic crisis. Even after they were wiped out, some Storm investors continued to throw their support behind EC, refusing to hold him in any way responsible for their downfall.)

Mutual fund manager Bill Miller beat the S&P 500 for 15 years in a row ”” one of the best track records ever. He became, and largely remains, an investment legend.

Yet Miller’s flagship fund fell so hard over the last few years that his career-long track record just barely squeezed by an index fund. Jason Zweig of the Wall Street Journal wrote last year: “Over the full stretch since Mr. Miller became lead manager of the fund in 1990, he has gained an average of 9.39% annually, versus 9.14% for the S&P 500.”

Does this hurt his reputation? Yes. But not as much as you might think. Despite a distinctly mediocre long-term record, I suspect Miller will always be remembered as a legendary investor.

Illusion of control
Thinking that your decisions and skill led to a desired outcome, when luck was likely a big factor.

If you’ve ever made money day trading and patted yourself on the back for a job well done, you’re probably a victim of the illusion of control.

Escalation of committment
The classic “throwing good money after bad.”

(Storm investors were losing money hand over fist once the market turned bearish, yet some continued throwing good money after bad by repeatedly increasing their borrowings and piling even more heavily into the market.) 

Doubling down on a plunging stock, not because you believe in its future, but because you feel the need to make back losses. Happens all the time at blackjack tables, too.

Negativity bias
Assuming perpetual doom, that problems will never be fixed, and that all hope is lost.

This bias has been rampant for the last four years, and has caused many to forgo investing opportunities of a lifetime.

Ostrich bias
Ignoring reality when it’s screaming in your face, usually in an attempt to rationalise a certain viewpoint.

(Both Storm management and Storm clients ignored reality when it was screaming in their faces, by staying in the market while it collapsed, and in many cases borrowing even more money to further increase their investment.)

Great example: A recent survey of 1,000 investors showed an average of more than half of respondents said the market declined in each of the last three years. But it didn’t. The S&P 500 rose 26.5% in 2009, 15.1% in 2010, and 2.1% last year. Pessimism trumped reality.

Risk perception bias
Attempting to eliminate one risk, but exposing yourself to another, potentially more harmful, risk.

Here’s an example I’ve written about before: In the year after 9/11, air travel fell, and car travel jumped. Understandably, people suddenly felt planes were more dangerous than cars.

But statistically, the opposite is true. In his book The Science of Fear, Daniel Gardner notes that if there were a 9/11 every day for an entire year, the odds that you’d be killed by terrorists are one in 7,750. By comparison, the annual odds of dying in a traffic accident are one in 6,498. German professor Gerd Gigerenzer estimates that the increase in automobile travel in the year after 9/11 resulted in 1,595 more traffic fatalities than would have otherwise occurred. Add in the impact stress had on our health, and the reaction to 9/11 may have been more deadly than the attack itself. “People jump from the frying pan into the fire” said Gigerenzer.

Today, an untold number of investors are choosing the perceived “riskless” safety of bonds trading at record high valuations, because they don’t want the risk of volatile stocks. Ten years from now, there’s an uncomfortably high chance they will be victims of risk perception bias. From the frying pan of stocks right into the fire of bonds.


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## Julia (1 December 2012)

That's very good, Bunyip.  
Everything we do is coloured by our existing biases, most of which we don't recognise.
Then the need to rationalise our mistakes just extends these biases.
As a result we learn little.



> Great example: A recent survey of 1,000 investors showed an average of more than half of respondents said the market declined in each of the last three years. But it didn’t. The S&P 500 rose 26.5% in 2009, 15.1% in 2010, and 2.1% last year. Pessimism trumped reality.



On this, I think perhaps the pessimism derives mostly from the ongoing global uncertainty, with no apparent solution for the debt problems of the US and Europe.

Thanks for posting.  A good reminder to us all.


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## bunyip (1 December 2012)

Julia said:


> That's very good, Bunyip.
> Everything we do is coloured by our existing biases, most of which we don't recognise.
> Then the need to rationalise our mistakes just extends these biases.
> As a result we learn little.
> ...




No problem, Julia. 

I’ll probably cop the usual scornful, sneering comments from the usual people. But what the heck – someone needs to post something useful on here to help educate investors.....it may as well be people like you and me and Doobsy and SJG and Judd, and one or two others who try to help.


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## bunyip (1 December 2012)

Ijustnewit said:


> Can anyone tell me if Storm and the Banks had kept their end of the bargain ie . selling down when they said they would. Is it feasible that an investment in a managed fund covering the ASX200 and using a Margin loan with a maximum LVR at 60 % would have worked ? This includes paying down the loan and handing it in so as not to incur any more interest. Also moving the leftovers if any ? to a term deposit for example. I understand there would be losses but would it be possible to walk away with something and play another day ?
> I'm just curious as all the above scenarios and *all the previous crashes dating back to 1929 / 30 and including the 1987 stock market crash and 9/11 were all covered in the Storm seminars . *




I’d be very interested to know the details of the Storm strategy back in 1987. 
Storm claimed their strategy withstood the ‘87 crash. If this is correct, then there were clearly some significant differences in the strategy in 1987, as opposed to the strategy which was so disastrous in 2008.
Remember that the 2007/08 crash was tame compared to the crash in October, 1987. Once the market peaked and then stated falling in late 2007, it took several months to shed the first 20% of its value. 
Compare that to 1987 when it plunged 25% in one day, and 50% in just over a month. No way in the world could the Storm strategy have withstood such a sudden and brutal plunge if it had occurred in 2007/08, without inflicting brutal losses on Storm clients.  And there’s no way it could have withstood the same plunge back in 1987 either.......unless it was a substantially different strategy back then compared to what it was in the last few years of Storm’s life.


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## Frank Ainslie (2 December 2012)

bunyip said:


> No problem, Julia.
> 
> I’ll probably cop the usual scornful, sneering comments from the usual people. But what the heck – someone needs to post something useful on here to help educate investors.....it may as well be people like you and me and Doobsy and SJG and Judd, and one or two others who try to help.




Hi Bunyip!

Do I detect a hint of sensitivity? Get a life! We've been copping sneering comments from all quarters for four years now.

_"...someone needs to post something useful on here to help educate investors.....it may as well be people like you and me and Doobsy and SJG and Judd, and one or two others who try to help."_

I agree with the sentiment but not with your method of going about helping people. The only way this forum will be useful to would-be investors is to make clear to them what caused the Storm Financial disaster so that they can avoid  what we could not. 

You were not involved! Therefore, you are not in a position to inform them of anything because you weren't there. Only those that were caught up in this financial debacle can say it as it really is because we know what really happened. We are not using conjecture or uninformed opinion. We are talking from personal experience. Why, therefore, do you believe that anyone should listen to what you say?

With respect no one is interested in what you and others would have done. That is not the issue. The focus of this forum should be on what really happened and how any future would-be investors  can avoid the same happening to them. 

*"If people are not prepared to learn from history, the same mistakes will continue to occur." * We know what happened. I suggest therefore that you listen to what we have to say rather than give us your version of something you know little about.

Have a good day!


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## Frank Ainslie (2 December 2012)

Julia said:


> I don't think Doobsy said it was illegal in its design and purpose.
> 
> 
> 
> ...




Hi Julia,

It has already been ascertained in Court that the people that invested in Storm relied for the most part on Storm managing their financial affairs. Remember that not everyone is share literate like you. 

Was it unreasonable for unsophisticated investors to place such reliance on Storm? After all, people had paid Storm good money to manage their portfolios.  That included ascertaining the correct LVR's relating to their portfolios. How could anyone for one moment think that Storm was not doing the right thing by them? 

I think people out there have to understand that trying to apply their own standards to what occurred is unproductive. This is one of the most complicated cases in legal history and its outcome will set new precedents. 

The one thing that many on this forum want to do is to take deceptive conduct and misleading advice out of the equation. You cannot! The Banks are in the dock now because they aided and abetted Storm in a scheme designed to churn money out of Stormies. They placed their own interests above those of their clients/customers. There are laws in place that are designed to cater for this. That's why the Banks are being prosecuted and the directors of Storm will be. 

This Court case is costing millions. I think it's time people asked why the Banks are in Court rather than asking why people invested in Storm to start with or why they relied on Storm to manage their affairs. Was Storm's scheme as daft as many on this forum profess. Of course it wasn't. Go to any bank site in Australia today and look at what those banks have to say about margin loans. Almost all of them without exception still talk about using the equity in one's house to buy shares.  

People that still keep pushing the _"What were you thinking of?_" or _"Why didn't you keep close tabs on what Storm was doing?_" bandwagon have missed the point altogether. It's not about that! Rather, it's about the one-fit advice that Storm gave everyone and their arrangements with the CBA and MBL that cut across their contractual obligations to their Storm customers. Never more so than in the Banks'approach to margin calls.


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## Julia (2 December 2012)

Deja vu.


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## Frank Ainslie (2 December 2012)

Hi Doobsy,

_“Going to make the mistake of getting involved in this forum again.”_ Perhaps you like Ricky Ponting should reconsider because your batting is not improving!

Before dealing with your comments which I think are surprisingly harsh for someone that is a financial adviser, I will make some general observations about your industry and its attitude to Storm. In so doing I am doing what quite a few on this forum do and that is using conjecture without any real evidence. I can only base it for the large part on your attitude and your readiness to label Storm as a rogue operator whilst defending your industry at every available opportunity despite that industry’s obvious failings. Storm Financial was a financial advisory firm that had everyone's approval whilst it existed.

I believe that Storm was a thorn in the side of most other financial advisers in the industry because it became a dominant player in the market. Storm had the infrastructure in place and arrangements with certain major banks that very few could match. It was also selling a commodity that few could match. What Storm was doing was not illegal in its self because it seemed to be operating within the legal parameters laid down. However, appearances can be deceiving as we have all found out since.

When Storm collapsed in early 2009 it must have come as a great relief to some of its competitors. _“How the mighty have fallen!” _There were also some who would have said, _“I told you so!” _whilst conveniently forgetting  that they had been dumb and dumber until that point.

What you and your ilk forget, Doobsy, is that when you  give people advise you play with their lives. They rely on you for sound advice, and if that advice is perverted because you as a financial adviser are putting your interest above theirs, the consequences can be appalling. The death count in Redcliffe alone from the Storm fall-out is 10 to date so what must it be in Queensland and other States? 

What was that you said? _“Stormies in their earlier years have been taught a nasty lesson on getting rich quick.”_ In the circumstances this is not only an uninformed statement to make but one that contradicts an earlier statement by you. It seems that your opinion differs depending on your mood. Rather than chiseling on people’s grave stones, _“Greed is good!”_ my advice to you is to revamp the wording to read, _“I trusted the wrong people and paid the price!”_

_“Lets be clear here. It was not a requirement of a margin lender to find out where the equity offered as security came from. It is now. Back then all the rules said were that you had to offer security to the margin lender. In doing so you were giving them the right to take that security should the loan go bad and you could not meet the margin call.”_

You sound like a mouthpiece for the banks! And why, may I ask are you constantly talking theory which has no place in any discussion concerning Storm. It’s what happened that counted; not what should have happened or how things all work in normal practice.  There was nothing normal about what Storm and the banks did. If there were, the cuprits would not find themselves in the dock today. 

_“Lets take a step back. For a NON storm client who had a margin loan - they offered equity (in the form of shares/managed funds/cash) to the margin lender and the ML then gave them a loan against that equity. Why is it the ML responsibility to ensure the equity offered is legit and wasn't sourced from other borrowing? SURELY the guy applying for the loan knows where the equity came from and knows whether part of it was funded from their house equity. Surely they know that if the margin loan gets triggered and the ML takes the equity offered to protect that loan that they are left with little to no equity to pay back the other loan and therefore the equity (whether borrowed or taken from super or cash from a property sale) is going to be lost.”_

Again you are talking theory. In the ‘Appliance’ document it outlines conditions that breach the margin loan borrowers’ conditions of contract with MBL. The assigning of the responsibility by the MBL to Storm for making margin calls is one such instance. 

_“On the monitoring of loans. BS BS BS BS BS BS. Lets look at LVR on the margin loan. Loan value - pretty frickin simple to get from the lender. As most pre-paid interest the value did not change throughout the year unless there was another step taken. This was TOO EASY to know correct values.”_

Everything seems pretty _“frickin simple”_ to you! Is it because you’re a financial adviser perhaps? Is it because you are trained in these things? Is it because you are paid for giving clients advice because you are a professional and your clients are not?  If everything is _"fricking simple"_ as you claim, why do people need you in the first place? 

Nothing was simple as far as Storm’s clients were concerned so stop trying to say that it was! By claiming that it was, you and others in the industry are trying to pass the buck. Storm managed our portfolios and Storm was responsible for everything connected with that process. We didn’t pay them a fortune to just pick their noses! 

I say to you now that you and others in the industry are guilty by association. You have let greed get in the way of your clients’ interests and you are protected by inept laws and leniency when any of you does the wrong thing. The bitter pill for investors is that you blame your clients for your own inadequacies when anything goes wrong.

If you want to get any runs on the board this years, focus on the ball, and not on pet theories that do not match the facts. Better still, sit for a while in Court with me and find out what really went on. For that matter, some on this forum should join you because there is a lot of cant still being expounded here which does not tally with what really occurred.


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## cynic (3 December 2012)

bunyip said:


> ....
> Risk perception bias
> Attempting to eliminate one risk, but exposing yourself to another, potentially more harmful, risk.
> 
> ...




I agree that risk perception bias exists, but believe this was not the best example on offer,though it does happen to illustrate bias in a manner which seems somewhat removed from Gigerenzer's intent.
Basically this is a classic example of statistics painting a distorted picture whilst providing insufficient data to support those assertions. 

No account is given of the aggregate travel time by air compared to road when assessing the true level of comparative risk. Most people with whom I am personally acquainted spend many more hours on the road than they do in the air, so the fact that the number of road fatalities exceeds the number of air fatalities alone is hardly surprising. Incidentally, I went to school with a couple of people whom later became pilots. One of them was a commercial pilot until his last fateful flight. (Of course pilots do spend a lot more time in the air than many other professionals, so again, hardly surprising!). I've known relatives of two people whom died on the road, but of the six road/roadside fatalities personally known to me, four were vehicular suicides, one lost a game of chicken with a train and the other was shot with his own service revolver (he'd just booked the same motorist twice on the same night). As for hijackings, a girl I knew back in 1985 was on a plane when it was hijacked by terrorists.

So, Gigerenzer's example illustrates how a small data omission can result in a grossly inacurrate representation of risk! I see evidence of these types of distortions almost every time I read one of our popular tabloids. There've been articles by academic "genii" making wildly inacurrate deductions and declaring them as proven facts! It would seem that the only people left in the world with a working appreciation of statistics are those whom exploit the inherent flaws when marketing their products to the unsuspecting public. I'm sure Storm's financial salespeople/planners had plenty of statistical information (and pretty graphs) to support their claims regarding the efficacy of their scheme.

When it comes to crtical thinking and analysis, our education systems appear to have failed us dismally! For decades now, I've witnessed uncritical thinkers in IT,education,government, media,medicine and academia! What hope is there for the future generations when our society is so analytically and statistically myopic? Whom will teach the importance of considering the sufficiency of data first, before gravitating to potentially erroneous conclusions?

Based upon my personal experiences of a relatively small cross-section of the populace, I am not at all surprised that people continue to be duped by "experts" painting artificial perceptions of risk.

@Frank, please don't misinterpret this as support for your claims regarding the "victim" status of Storm's clients. I am largely in agreeance with Julia,Bunyip and other dissenters - life's far too short to spend torturing oneself over past betrayals. 
All clients had a vulnerability which I believe is symptomatic of deficiencies within our society. Any number of unscrupulous financial products marketers would have been more than happy to oblige by exploiting those same vulnerabilities. Storm simply got to ex-"Storm"-inate them first!


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## doobsy (3 December 2012)

Might as well have some fund so here we go



> Before dealing with your comments which I think are surprisingly harsh for someone that is a financial adviser, I will make some general observations about your industry and its attitude to Storm. In so doing I am doing what quite a few on this forum do and that is using conjecture without any real evidence. I can only base it for the large part on your attitude and your readiness to label Storm as a rogue operator whilst defending your industry at every available opportunity despite that industry’s obvious failings. Storm Financial was a financial advisory firm that had everyone's approval whilst it existed.




Who? The regulators? Some pencil pushers with a checklist that have never offered advice? Speak to advisers in FNQ and you would have found some 90% loathed Storm and warned clients consistently of the dangers of the strategies. I know advisers that wrote letters to ASIC letting them know that although the strategy was legitimate it was dangerous and they should re-look at the rules. I laugh at your ability to generalise.



> I believe that Storm was a thorn in the side of most other financial advisers in the industry because it became a dominant player in the market. Storm had the infrastructure in place and arrangements with certain major banks that very few could match. It was also selling a commodity that few could match. What Storm was doing was not illegal in its self because it seemed to be operating within the legal parameters laid down. However, appearances can be deceiving as we have all found out since.




Storm was a force in NQ, nowhere else. It was expanding but most people south of the tweed had never heard of them.

It was selling a commodity? It was selling a promise. Hope is not a strategy and they hoped markets would continue on the "exponential" growth trend of 1980 - 2007

I will say it again - it was not illegal. What may be found to be illegal is the special deals, the lending, etc but the strategy was not illegal.

To prove this I have just taken on a client from another planner that has the same set up. It was done to reduce non-deductible debt on the house using borrowing (redraw on home loan  + margin loan) to ramp up distributions and pay down the non ded debt. Borrowing was done on the margin loan at a much more conservative level but it is the SAME strategy. Has it worked? Yes and No. They have no more non-deductible debt however now have deductible debt of about the same and an investment that is still down about 35% from when they started (2006). 



> What you and your ilk forget, Doobsy, is that when you  give people advise you play with their lives. They rely on you for sound advice, and if that advice is perverted because you as a financial adviser are putting your interest above theirs, the consequences can be appalling. The death count in Redcliffe alone from the Storm fall-out is 10 to date so what must it be in Queensland and other States?




I forget nothing Frank but I am realistic. If there is guilt that you want to lay on someone call your mate Stuart Drummond.

Your hatred runs so deep that you can't see that in every aspect of your life people offer you services and you can CHOOSE to accept them or not. They are there to help but ALL of them need to make a dollar or they would be considered charities. Show me an industry people use in day to day life where the client self interest is put first in all cases?



> What was that you said? _“Stormies in their earlier years have been taught a nasty lesson on getting rich quick.”_ In the circumstances this is not only an uninformed statement to make but one that contradicts an earlier statement by you. It seems that your opinion differs depending on your mood.




Frank I deal with the younger ones. I am helping them back on their feet, not by flaming a hatred of all things financial but by offering a service that is relevant and sustainable.



> You sound like a mouthpiece for the banks! And why, may I ask are you constantly talking theory which has no place in any discussion concerning Storm. It’s what happened that counted; not what should have happened or how things all work in normal practice.  There was nothing normal about what Storm and the banks did. If there were, the cuprits would not find themselves in the dock today.




As I have shown above, plenty of clients out there who engaged in the same strategy just not as aggressively. Using your logic then all of their strategies are illegal too. This forum spends an inordinate amount of time on the strategy so I am just ensuring the understanding that it was not illegal. From day dot I have kept the same line about the lending, special deals etc so try another way to paint me as a lover of all things banks and storm.

Let me also just clarify something. I just went through my client book, we have 3 margin loans listed. 3. That is 1% of my client base. That is why I am still here and still have all my clients.



> The assigning of the responsibility by the MBL to Storm for making margin calls is one such instance.




Has this been proven in court yet? I may have missed it!



> _“On the monitoring of loans. BS BS BS BS BS BS. Lets look at LVR on the margin loan. Loan value - pretty frickin simple to get from the lender. As most pre-paid interest the value did not change throughout the year unless there was another step taken. This was TOO EASY to know correct values.”_
> 
> Everything seems pretty _“frickin simple”_ to you! Is it because you’re a financial adviser perhaps? Is it because you are trained in these things? Is it because you are paid for giving clients advice because you are a professional and your clients are not?  If everything is _"fricking simple"_ as you claim, why do people need you in the first place?




Again, step down from the high horse before replying. It may help you from looking silly in front of the forum. I have never said it was the clients job. I have always said Storm had this responsibility. I was referencing their "claim" that they did not have up to date data and didn't know clients positions. Subject dropped.



> Nothing was simple as far as Storm’s clients were concerned so stop trying to say that it was! By claiming that it was, you and others in the industry are trying to pass the buck. Storm managed our portfolios and Storm was responsible for everything connected with that process. We didn’t pay them a fortune to just pick their noses!




See above. You got it, just a bit slow.



> I say to you now that you and others in the industry are guilty by association. You have let greed get in the way of your clients’ interests and you are protected by inept laws and leniency when any of you does the wrong thing. The bitter pill for investors is that you blame your clients for your own inadequacies when anything goes wrong.




Awesome - thanks for that. You know the funny thing is that I don't care and neither do my clients who are happy and don't need to vent on forums so don't ever show up on something like this. They do show up to meetings and pay my fees so I will assume they are ok with what I do.



> If you want to get any runs on the board this years, focus on the ball, and not on pet theories that do not match the facts. Better still, sit for a while in Court with me and find out what really went on. For that matter, some on this forum should join you because there is a lot of cant still being expounded here which does not tally with what really occurred.




I'm busy helping people. I'd rather be ensuring the strategy I put in place to ensure a widow gets paid an anti-detriment payment from her husbands superannuation fund if triggered and she gets the cash so she can go down to the sunshine coast and see her new grandson. Sitting with you would just be depressing.


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## bunyip (4 December 2012)

Frank Ainslie said:


> Hi Bunyip!
> 
> Do I detect a hint of sensitivity? Get a life! We've been copping sneering comments from all quarters for four years now.
> 
> ...




Poor Frank.......disillusioned and deluded, angry and disgusted, resentful and bitter – a tormented life. It was an unfortunate day when you allowed greed to replace common sense.

I liked your comment_* ‘If people are not prepared to learn from history, the same mistakes will continue to occur.’ *_
But when I go back over some of your posts and see you scoffing at the value of basic investment education for private investors, when I see you making crazy statements such as_ ‘investors don’t need to be prudent and cautious’_, when I see you telling people there was no way to spot the risks........well Frank, I suspect that you’ve learnt nothing from history and you’re a prime candidate to make the same mistakes all over again if you get your hands on some compensation money.

Anyway, I hope you can put your troubles aside for a few days to celebrate the joy of the festive season with your family and friends.

Merry Christmas to you Frank.


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## bunyip (4 December 2012)

Frank Ainslie said:


> I believe that Storm was a thorn in the side of most other financial advisers in the industry because it became a dominant player in the market. Storm had the infrastructure in place and arrangements with certain major banks that very few could match.
> It was also selling a commodity that few could match.





So tell us, Frank.......what was this wondrous commodity that Storm was selling that very few could match?

They were certainly adept at selling bull**** – I doubt if many financial planning firms could match them in that department. Was that the commodity you’re referring to?
All that stuff about how safe and conservative it was to mortgage your home when you’re near retirement age and borrow loads of money to chuck into the market along with your own money. Then borrow loads more through double gearing, and chuck that into the market as well.
All that crap about helping you ‘on your journey to capitalism’. 

Promises and bull**** – those were the main two commodities that Storm were selling. But anyway, it was tempting enough to entice you to take the bait.


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## Defender (4 December 2012)

bunyip said:


> I’d be very interested to know the details of the Storm strategy back in 1987.
> Storm claimed their strategy withstood the ‘87 crash. If this is correct, then there were clearly some significant differences in the strategy in 1987, as opposed to the strategy which was so disastrous in 2008.
> Remember that the 2007/08 crash was tame compared to the crash in October, 1987. Once the market peaked and then stated falling in late 2007, it took several months to shed the first 20% of its value.
> Compare that to 1987 when it plunged 25% in one day, and 50% in just over a month. No way in the world could the Storm strategy have withstood such a sudden and brutal plunge if it had occurred in 2007/08, without inflicting brutal losses on Storm clients.  And there’s no way it could have withstood the same plunge back in 1987 either.......unless it was a substantially different strategy back then compared to what it was in the last few years of Storm’s life.




From what I also was told, Storm had a successful track record, which included the 1987 crash. Operating under a different name then, of course. 

My opinion is that when Cassimatis's goal of floating Storm (and making a mega motza) became his holy grail, and all consuming passion, he needed to maximize funds under management to make the float as desirable as possible for potential investors, in the float (not his client base investors).

Existing clients borrowings and investments were then maxed out. LVR's became higher, and more risky. I doubt this level of risk characterized Storm's early years. I suspect there were special arrangements with banks, that clients new nothing about. Some banks lending to clients may also have had vested interests in financing the float. Just my speculations, for what they're worth. 

I am confident that Storm could have easily managed their clients investments safely through the GFC, if it was their first priority.


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## doobsy (4 December 2012)

Defender said:


> From what I also was told, Storm had a successful track record, which included the 1987 crash. Operating under a different name then, of course.
> 
> My opinion is that when Cassimatis's goal of floating Storm (and making a mega motza) became his holy grail, and all consuming passion, he needed to maximize funds under management to make the float as desirable as possible for potential investors, in the float (not his client base investors).
> 
> ...




Storm didn't exist until 03/04 ish. Before that he tried out the strategy as OzDaq which got him in trouble with Nasdaq (the stockmarket) as people thought he was more than he actually was (sound familiar).

Before that he was an MLC planner and before that an MLC insurance agent. Stories I have been told were that he has always been very good at finding ways to get some extra fees while making it look like he was doing you a favour. But those are stories.

He may have back tested his theories on 1987 but the strategy didn't exist then. Does anyone remember how hard it was to get a bank loan then let alone re-finance a place and withdraw equity?


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## doobsy (4 December 2012)

View attachment duncan_hughes.pdf


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## Julia (4 December 2012)

Does anyone know what is happening with the court action(s)?
Is it ongoing?
Is there any suggestion of a date when a conclusion to the whole affair will be reached?


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## matty77 (5 December 2012)

bunyip said:


> Hindsight bias
> Out of literally millions, only a handful of investors truly saw the financial crisis coming.
> 
> If you disagree with that statement and respond, “No, any idiot could have seen it coming from a mile away,” you’re suffering from hindsight bias. Only after the fact do all the puzzle pieces make sense. That’s why bankruptcies outnumber billionaires.
> ...




great post Bunyip, there are some things in there that I have done in the past, it was good to be reminded of those things so I dont do them again.

The above comments... may be relevant to a few people here. Its easy in hindsight to say anyone could see Storm was a disaster that was always going to happen.. but would you have had the same opinion before it all turned to ****? And of course everyone will say yes, but we know that aint the truth.


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## SJG1974 (5 December 2012)

doobsy said:


> View attachment 49833




Doobsy, do you have the rest of the article?


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## doobsy (5 December 2012)

SJG1974 said:


> Doobsy, do you have the rest of the article?




Sorry

that was all that came up


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## Defender (5 December 2012)

Julia said:


> Does anyone know what is happening with the court action(s)?
> Is it ongoing?
> Is there any suggestion of a date when a conclusion to the whole affair will be reached?




Heard from a reliable source in court yesterday that the Levitt Robinson lawyers presented some "damning evidence" against Macquarie Bank...regarding special conditions Storm required if they were to supply margin lending services. Numerous email communications tendered as evidence, I gather.


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## Julia (5 December 2012)

Thank you, Defender.  The news media seems to have lost interest.


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## bunyip (6 December 2012)

doobsy said:


> View attachment 49833




Thanks for that link, Doobsy.
So Storm didn’t even exist in 1987. In which case the claim that the model had withstood the ‘87 crash was just a load of bunkum, like so many of their other claims.


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## bunyip (6 December 2012)

matty77 said:


> great post Bunyip, there are some things in there that I have done in the past, it was good to be reminded of those things so I dont do them again.
> 
> The above comments... may be relevant to a few people here.
> _*Its easy in hindsight to say anyone could see Storm was a disaster that was always going to happen.. but would you have had the same opinion before it all turned to ****? And of course everyone will say yes, but we know that aint the truth*_.




For the life of me I can’t see why some people continue to hold the view that very few people could have seen risk in the Storm model. 

Apart from bull**** and promises, the Storm strategy was about debt, and lots of it. 
There’s not a single one of us who isn’t wary of debt. And it didn’t take the Storm debacle or the GFC or the stock market crash to instill this caution in us. All of us were wary of debt long before we even heard of Storm, and long before 2007/08 when the economic crisis hit.
We’ve all taken out loans at one time or another, whether it was to buy a house or a business or a car or whatever. All of us considered the size of the loans before we applied for them, all of us were wary of taking on too much debt in case we ran into difficulty in meeting our loan commitments. The bigger the loan, the bigger the loan commitments, the bigger the risk of getting into trouble if something goes wrong. 
Do big loans sound safe and conservative to you? Of course not – they’re exactly the opposite. Nobody has to be a sophisticated investor or a market wiz to work that one out....it’s just common sense.
Why then do some quarters continue to insist that very few people could have seen that Storm’s high debt model was just the opposite of the safe and conservative strategy it was claimed to be?

Storm recommended a strategy of taking out big loans.....a risky strategy in its own right. Then they compounded the risk by getting people to mortgage their homes so as to increase the size of the loans they could raise. They further compounded the risk by recommending this strategy to clients of all ages, including those near/at/past retirement age. In other words, people with limited time left to recover if things went wrong.
The risk was compounded yet again by recommending that clients sink all this borrowed money into the riskiest of all markets - the stock market. 
But the risk didn’t stop there. In addition to borrowings, clients were advised to put all their own savings and super etc into the market as well.
Get the idea so far?.....risk was being heaped upon risk which was heaped upon even more risk, thereby compounding the overall risk situation enormously. 
But it didn’t stop there. Clients were advised to liquidate homes and businesses and investment properties to generate more funds to sink into the stock market. And then to top it all off, once all these personal funds were combined with heavy borrowings, and the whole lot sunk into the market, the next recommendation was to use double gearing to hugely increase the already huge debt situation. 

So to summarize.........Storm recommended debt upon debt upon debt upon debt, with all of it plus personal funds to be sunk into just one investment vehicle that has a long history of volatility and horrific crashes. Forget about diversification to spread the risk, forget about the old axiom of ‘don’t put all your eggs in the same basket’. Just shove the whole lot into the stock market, and then sit back and hope like hell it keeps going up. And God help you if it doesn’t!
Are you honestly telling me that it was difficult to see the risk in such a strategy??

Forget about those silly claims that the market crash and economic meltdown were unprecedented. How about 1987, how about 1929, how about at least a dozen or more major market plunges in the eighty odd years since then – that’s roughly one every seven years on average. How about the various economic recessions over the decades. 
Unprecedented my foot!!! Of course the 2007/08 crash wasn’t unprecedented – it had all happened before and it was always going to happen again. And it will all happen again in the future.
And as for the nonsense that nobody saw it coming.....how about all the media outlets that warned us virtually every day for a good 12 months beforehand of the dire economic situation that was brewing. Against this background of ominous economic warnings, Storm kept recommending that their clients take step after step to further increase their investments by taking on more debt. I recall the newspaper report of the Townsville couple on limited income who increased their borrowings eleven times despite all the warnings in the lead up to the bear market.

Is there anyone on this forum who is seriously suggesting that most people couldn’t see the risk in continuing to borrow and invest heavily in the face of the impending disaster as the economic situation continued to deteriorate?

Forget the nonsense that very few could have spotted the risk. There are millions of investors in this country, many of them using a similar strategy to the Storm strategy of borrowing investment funds by using existing assets as collateral for loans. 
Storm didn’t invent this strategy, it’s been around for centuries.
 If so many people are using this strategy, why didn’t they all suffer the same fate as Storm investors?
Simple – they respected debt and they used it wisely by not taking silly risks and getting over-committed. Contrast these people with Storm investors who, because Storm told them to, took on massive debts which in many cases were completely out of proportion to their loan-servicing ability. Debts so large that the leverage made them massive gains while the market performed well, but wiped them out in quick time when the inevitable market collapse came.
Why did they take on such massive risk? Was it because the risk was almost impossible to see. No – in many cases they took on such risk because Storm told them it was OK to do so, and they believed it rather than thinking things through and properly evaluating the strategy, or by getting opinions from other planning firms.

The risk in the Storm strategy was glaringly obvious if only people had asked themselves two question as outlined by SJG in his recent post.......
1. Is investing is shares low risk?
2. Does gearing reduce the risk of investing in shares to a safe level?

It really was that simple.


----------



## Ferret (7 December 2012)

bunyip said:


> There’s not a single one of us who isn’t wary of debt. And it didn’t take the Storm debacle or the GFC or the stock market crash to instill this caution in us. All of us were wary of debt long before we even heard of Storm, and long before 2007/08 when the economic crisis hit.




I agree with most of what you say, bunyip, but not this.

There were plenty who had grown overly comfortable with debt up until the GFC.  Lots of credit card debt, redrawing on mortages to fund holidays, houses being bought at top prices with the minimum of deposit, booming business in margin loans etc etc.  This was one of the main factors that brought about the GFC.  It took the GFC to remind people how dangerous debt can be.


----------



## bunyip (7 December 2012)

Ferret said:


> I agree with most of what you say, bunyip, but not this.
> 
> There were plenty who had grown overly comfortable with debt up until the GFC.  Lots of credit card debt, redrawing on mortages to fund holidays, houses being bought at top prices with the minimum of deposit, booming business in margin loans etc etc.  This was one of the main factors that brought about the GFC.  It took the GFC to remind people how dangerous debt can be.




That’s fair comment, Ferret – I guess that attitudes towards debt have relaxed to some extent over the years. 
All the same, most people give some consideration to how much debt they can handle and how they’ll service their loans. That’s why when they go to a motor dealer to buy a 35 thousand dollar car, they don’t allow themselves to get talked into a 250 grand Jag or BMW instead. They’d like to drive around in a prestige car as much as the next person would, but they know they could never afford the repayments.
Same story with houses. A young couple work out that they’ll be able to meet their loan commitments if they buy a house for 350 grand. Are they likely to go to the top end of town and buy a million dollar property instead? Of course not – they’re well aware that they’d never afford the loan repayments. 
Of course, there are always some people who do buy cars and houses that they can’t afford, and end up getting them repossessed. And people who get into credit card debt too that they can’t handle. There will always be people like that. And in the years prior to the GFC, those people were certainly on the increase.

What intrigues me is why Storm investors appear to have thrown caution to the wind in relation to debt. Some of them were successful business people who had prior experience working with debt and investment. 
Some of them were on the other end of the scale, with incomes far below the basic wage, yet they were granted loans that ran to seven figures. Sure it was immoral lending practice for the banks to grant them loans of that magnitude when they clearly had limited loan-servicing capacity. But why in the name of creation did investors accept those loans, without knowing how they were going to service them?
One Storm investor was asked by a reporter _‘Why did you accept such a big loan when you clearly had insufficient income to service it’? _
His reply was ‘_Storm told me it would be OK’._


----------



## matty77 (7 December 2012)

Bunyip do you know what your problem is? You think everyone has common sense... from my experience a lot of people have none! Which may help explain a few things.


----------



## bunyip (7 December 2012)

matty77 said:


> Bunyip do you know what your problem is? You think everyone has common sense... from my experience a lot of people have none! Which may help explain a few things.



I think everyone has common sense?? 
No mate, I think almost the opposite. Many people either have no common sense, or else they have their common sense switched off. I’ve given examples by mentioning people who swim in crocodile habitat, and pilots who fly in bad weather. I could fill a book with day to day examples of people who exhibit a lack of common sense.

If you’d been reading my posts all along you would have seen me say many times that it was mainly a lack of common sense that started Storm investors on the road to ruin.
Of course I’ve been criticized no end for saying it, particularly by Frank. Interestingly, Frank later did a complete turnaround by admitting that a lack of common sense cost Storm investors everything they had in the end.


----------



## doobsy (7 December 2012)

bunyip said:


> I think everyone has common sense??
> No mate, I think almost the opposite. Many people either have no common sense, or else they have their common sense switched off. I’ve given examples by mentioning people who swim in crocodile habitat, and pilots who fly in bad weather. I could fill a book with day to day examples of people who exhibit a lack of common sense.
> 
> If you’d been reading my posts all along you would have seen me say many times that it was mainly a lack of common sense that started Storm investors on the road to ruin.
> Of course I’ve been criticized no end for saying it, particularly by Frank. Interestingly, Frank later did a complete turnaround by admitting that a lack of common sense cost Storm investors everything they had in the end.




Thoughts from the darkside again

I think it was the scope of the falls most people didn't appreciate.

2007-2009 was a slow moving train wreck but I think people believed that governments, central banks etc would step in with fixes earlier than they did.

We were probably in the top 5% of conservative planners in Queensland and were concerned from early 2006 on where the market was at but even we thought that a fall back to 4200 - 4500 points was a worst case. If that had been the situation the Storm clients may have avoided the margin call and therefore still be in the market. 

I have outlined how the strategy would have blown up anyway because with no growth in the following 3-4 years as we have seen it would have all unwound anyway but it would have been alot different to them getting sold out the way they were.

Talking to many with margin loans (friends, colleagues etc, thank goodness not clients) most held on and have continued to hold on. Now most avoided margin calls because the starting LVR was lower but they stuck it out so I don't know that Stormies should have been selling at 20% fall or 30% fall when no one else was. 

Hindsight is a wonderful thing and dropping LVR levels and increasing cash might have saved a few from the devastation but when your adviser is telling you the last 5 corrections have been no more than 30% and the media is spruiking how good Australian mining is etc etc and you are only exposed to Aussie shares then I can see how they might have said it was best to hold on. 

The funny thing I have seen is those who borrowed are now wanting to get out. We have taken over a few in the last 6 months with loans we are unwinding and they are ready to take a loss just to know the debt is gone because all the promises made by the previous adviser have come to nought as markets have been range bound for 3 years and down significantly over 5 years.


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## bunyip (11 December 2012)

Frank Ainslie said:


> Was Storm's scheme as daft as many on this forum profess. Of course it wasn't. Go to any bank site in Australia today and look at what those banks have to say about margin loans. Almost all of them without exception still talk about using the equity in one's house to buy shares.




What you seem to have trouble comprehending, Frank, is that the strategy itself wasn’t the problem – the problem was in the reckless and imprudent way the strategy was used. 

The concept of using equity in your home and other assets to raise loans for investment in shares or whatever is centuries old.
The concept itself is legitimate and it makes a lot of sense. In simple terms it enables you to get into a bigger investment than you could afford by using just your own money.

Nobody is saying it’s daft to use this strategy......as long as you use it sensibly and responsibly. 
Driving a car isn’t daft either.....as long as you do it sensibly and responsibly.
But it’s certainly daft to drive at 100 kph in a 60 zone when you’ve got half a dozen rums under your tail.
Similarly, borrowing crazily against your house and plowing all the borrowed funds into the market, adding all your own money to the pool, then borrowing another load of money through double gearing and sinking that into the market as well, then taking step after step after step to increase the borrowings even further down the track.......now that really is daft. 
Particularly when you’re at an age that allows you no time to recover if the share market runs out of steam and stays flat for years, or worse still collapses in spectacular fashion like it did in 1929, 1987, 2008 and at least another dozen times in between.
And particularly if you do it in the face of daily warnings about the dire economic circumstances that were brewing.
Even more daft is if you do it when you’re near retirement age and you’re already wealthy. 

The Storm strategy was sold as safe and conservative. 
It may well have been relatively safe and conservative if borrowings were kept to conservative levels. But there was nothing safe and conservative about heaping debt upon debt upon debt, with all of it plus personal funds being sunk into the riskiest market of them all.
That really was daft.


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## Ferret (14 December 2012)

Anyone know when the court proceedings might conclude?  A while back I heard that it was to be by Christmas.


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## Defender (14 December 2012)

Ferret said:


> Anyone know when the court proceedings might conclude?  A while back I heard that it was to be by Christmas.




Certainly won't happen before Christmas. I heard it has finished for the year & to resume around 15 Feb.


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## Garpal Gumnut (15 December 2012)

We are now in the endgame of the Storm Financial Saga, when Judges, Barristers and Forensic Auditors make their quid from the misery of Investors.

Let us hope that some recover some of their equity.

To quote Shakespeare.

Brutus:
There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

Julius Caesar Act 4, scene 3, 218–224

gg


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## bunyip (18 December 2012)

Wasn’t Cassamatis talking of personally suing the CBA a couple of years back?

Has anyone heard anything further on that?


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## Garpal Gumnut (23 December 2012)

May I wish all Storm Investors a Merry Christmas, and hope for you all that 2013 will see some justice done.

gg


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## Ijustnewit (24 December 2012)

Garpal Gumnut said:


> May I wish all Storm Investors a Merry Christmas, and hope for you all that 2013 will see some justice done.
> 
> gg




Same to you GG , glad your back !! and I hope you don't get too burnt on The Strand and have a mud crab and a prawn for me.


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## Garpal Gumnut (30 December 2012)

Ijustnewit said:


> Same to you GG , glad your back !! and I hope you don't get too burnt on The Strand and have a mud crab and a prawn for me.




Thanks mate, and we have a Myer now in Townsville, since I've been away. I'll stick to Trade Secret though. 

Just something I posted in relation to Banksia, another Financial Advising Outfit, which has gone **** up and taken many good peoples money as Storm Financial did.

I thought I's add it in here.

A good 2013 to all Stormies.



> Another mob of muppets with a similar range of "expertise" have just opened a new financial centre on one of our major thoroughfares in Townsville, usual bling and awning out the front, and a webpage costing at least $120.
> 
> Next time I'm over that way I'll take some prunes before I go and visit the ablutions.
> 
> ...




gg


----------



## basilio (22 January 2013)

Came across a couple of Storm stories that might be of interest..



> *In the Eye of the Storm: The Collapse of Storm Financial*
> Paul Barry
> 
> The Monthly | The Monthly Essays | February 2011 | Add a Comment
> ...




http://www.themonthly.com.au/collapse-storm-financial-eye-storm-paul-barry-2980
\
http://www.moneymanagement.com.au/n...er-storm-financial-adviser-permanently-banned

Particularly nasty piece of work here.


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## bunyip (24 January 2013)

More former Storm advisers being ordered by ASIC to undertake further training.
One of the buggers is manager of a private wealth firm, of all things! Let’s hope he doesn’t use the Storm strategy as his template for helping his clients to build their wealth.

Too little too late from ASIC....a classic case of shutting the gate after the horse got out.

http://www.moneymanagement.com.au/n...rm-financial-adviser-terence-edward-webb-asic

http://www.moneymanagement.com.au/news/financial-planning/2012/storm-financial-james-mousa-asic-eu


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## Ijustnewit (4 February 2013)

bunyip said:


> More former Storm advisers being ordered by ASIC to undertake further training.
> One of the buggers is manager of a private wealth firm, of all things! Let’s hope he doesn’t use the Storm strategy as his template for helping his clients to build their wealth.
> 
> Too little too late from ASIC....a classic case of shutting the gate after the horse got out.
> ...




Thanks for putting these links up. I missed them originally .
Cheers
IJN


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## Julia (5 February 2013)

Does anyone know what is happening with the court action(s)?  Solly seems to have disappeared after regularly putting up links.


----------



## Solly (6 February 2013)

Julia said:


> Does anyone know what is happening with the court action(s)?  Solly seems to have disappeared after regularly putting up links.




Hi Julia 

GG contacted me by bush telegraph advising that my absence has been noted. It's been very busy on George St lately, I've been juggling many matters that have consumed my time. 

I hopefully will be able to add some value to this forum in the coming months. 
I have formed the view that there will be some very interesting determinations and actions this year.

I hope the links below are of interest.

S


----------



## Solly (6 February 2013)

> *ASIC to pursue MacBank*
> 
> ONE of the country's largest wealth groups may be forced to compensate millions to investors after it was accused of "poor record-keeping".




More @ www.heraldsun.com.au


----------



## Solly (6 February 2013)

When matters are next in Court

Below are the dates and venues when proceedings ASIC have commenced in relation to the collapse of Storm are next in Court.

Proceedings are being held in public so anyone interested may attend.


Oral closing submissions for the Trial will commence on 18 February 2013
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000


Proceedings adjourned	ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building 
119 North Quay
Brisbane QLD 4000


Hearing is scheduled for 3 weeks commencing 3 June 2013	ASIC and Doyle proceedings 
Federal Court, Sydney
Queens Square
Level 18, Law Courts Building
Queens Square
Sydney NSW 2000


Source : https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument


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## Julia (6 February 2013)

Thank you, Solly.  May we depend on you to keep us advised of the results of the forthcoming court proceedings?


----------



## Solly (7 February 2013)

Julia said:


> Thank you, Solly.  May we depend on you to keep us advised of the results of the forthcoming court proceedings?




I'll post info when possible Julia. I'm involved in some other issues at the moment.


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## Frank Ainslie (6 March 2013)

*Let the truth be known or the heavens fall.*

An oxymoron is an apparent contradiction in terms; for instance, _“definite possibility”_. 

In relation to the victims of Storm Financial and its lackeys, the Banks, terms such as _“clearly misunderstood”_ or _“conscionable bankers” _fit the bill.

The people that were unfortunate enough to be caught up in the financial disaster caused by Storm and the banks associated with that unscrupulous outfit have had to endure continuous flack from those in our community and on this forum because the facts have not been fully known. However, we that were there and know what happened are now at long last having our day in court. 

Despite the CBA’s attempts to buy its way out of trouble it now finds itself in a position where its double dealings as far as its Storm customers were concerned are finally coming to light.

The centerpiece of this case will focus on statutory, contractual and unconscionability matters that  our detractors have chosen to ignore because it doesn’t fit their arguments. It would seem that they view these essential issues as unimportant in the scheme of things. I feel confident, however, that the Court will not be so tolerant.

Anyone that has read the transcript of the opening address by Mr. R. Dubler SC, acting on behalf of the CBA’s Storm clients that are involved in the CBA class action will be struck at once by the extraordinary and unique relationship that existed between the CBA and Storm that transgressed the bounds of any acceptable commercial propriety. The partnership that arose which led to that Bank and Storm shamelessly churning money out of people who were for the most part retirees, rivals that of Burke and Hare who choked people to death so they could sell the bodies to anatomists. Any semblance of fair practice has long gone and if you ask me, so has the CBA!

If that bank feels alone, it shouldn’t because the Macquare Bank and the BOQ are just as guilty.

For those on this forum that still cling to the notion that these banks were only acting within the framework of proper and ethical banking, you need to think again. This was an orchestrated self-serving unconscionable unethical scam that has no place in our society. Anyone that condones such behavior is at odds with the laws as they relate to consumers and the conduct that we should demand as a free society.

In the coming weeks I suggest that the knockers pay close attention to what is revealed in court because it will be the truth, the whole truth and nothing but the truth. Hearsay and conjecture based on uninformed personal opinion will have no part in these proceedings because they are not part of the laws under which our society functions. To live otherwise would be to invite anarchy.


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## DocK (6 March 2013)

I'm looking forward to reading of court proceedings - should be interesting....


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## Ijustnewit (6 March 2013)

DocK said:


> I'm looking forward to reading of court proceedings - should be interesting....




+1  Thanks for posting Frank.


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## Garpal Gumnut (8 March 2013)

Frank or Solly, any update on proceedings?

gg


----------



## inyaface (10 March 2013)

Yes, interested in proceedings update as well. So many general population was affected but I think news update has not been to upcoming recently.


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## DocK (10 March 2013)

http://au.finance.yahoo.com/news/judge-adjourns-storm-financial-case-054801106.html



> A Federal Court judge in Brisbane has adjourned a case involving the collapse of Storm Financial.
> 
> The Australian Securities and Investments Commission (ASIC) is pursuing Storm Financial, the Macquarie Bank and the Bank of Queensland.
> 
> ...


----------



## Solly (11 March 2013)

> *Court hears of Commonwealth Bank's part in Storm collapse*
> THE Commonwealth Bank provided the "fuel and oxygen" to the Storm Financial business and knew it was a "dangerous, risky investment strategy", lawyers for the class action against it have argued.




http://www.gattonstar.com.au/news/court-hears-commonwealth-banks-part-storm-collapse/1786706/


----------



## Solly (13 March 2013)

> *ASIC denies Storm compensation error*
> 
> ASIC has denied it made errors while calculating compensation offers for former clients of Storm Financial with $136 million of Commonwealth Bank of Australia’s (CBA) settlement funds.
> 
> Late last month, litigator Levitt Robinson Solicitors distributed an information bulletin to members of its Storm class action claiming the offer calculated by the corporate regulator contained flaws




More by Kate Kachor @ http://www.financialobserver.com.au...storm-compensation-error#sthash.pXjIHOgp.dpuf


----------



## Solly (13 March 2013)

> *Court hears Storm Financial case*
> 
> A STORM Financial client told a Brisbane court yesterday that he would not have invested if the Commonwealth Bank had warned him of the risks and potential for irrevocable losses.
> 
> Les Sherwood said in Federal Court that he would have followed the bank's advice over Storm's and looked for another financial adviser




More by Anthony Marx @ http://www.couriermail.com.au/business/court-hears-storm-financial-case/story-fnefl294-1226595932959


----------



## bunyip (13 March 2013)

Solly said:


> More by Anthony Marx @ http://www.couriermail.com.au/business/court-hears-storm-financial-case/story-fnefl294-1226595932959



Before Storm clients approached their banks they’d already received investment advice from Storm, for an agreed fee of 7% of whatever money was invested according to Storm’s advice.

Banks have lending departments for providing loans. They have investment departments for providing investment advice. 
If any Storm client was wanting investment advice beyond what Storm had already provided, then the bank’s lending department would have been happy to provide it.


----------



## bunyip (14 March 2013)

bunyip said:


> Before Storm clients approached their banks they’d already received investment advice from Storm, for an agreed fee of 7% of whatever money was invested according to Storm’s advice.
> 
> Banks have lending departments for providing loans. They have investment departments for providing investment advice.
> If any Storm client was wanting investment advice beyond what Storm had already provided, then the bank’s *lending* department would have been happy to provide it.




The word highlighted in bue above was meant to be 'investment', not 'lending'.

To clarify.....If Stormers wanted investment advice from their banks then I believe they should have consulted the banks investment advisers.


----------



## Solly (14 March 2013)

> *Storm letter calls on the CBA to engage in new negotiations*
> 
> STORM Financial victims in the Sherwood class action against the Commonwealth Bank are rejecting the compensation deal made on the eve of a trial in the Federal Court last year.
> 
> Class action group members will participate in a mass mail-out to the Australian Securities and Investment chairman and CBA chief legal officer charging that the compensation deal they announced on September 14 was the product of ASIC's conflict of interest.





More @ http://www.frasercoastchronicle.com.au/news/storm-letter-calls-cba-engage-new-negotiations/1792080/


----------



## Defender (15 March 2013)

I've heard that there has been a major development in the Storm case...Macquarie Bank have offered a substantial out of court settlement, which the class action lawyers believe is good enough to accept.


----------



## DocK (15 March 2013)

Defender said:


> I've heard that there has been a major development in the Storm case...Macquarie Bank have offered a substantial out of court settlement, which the class action lawyers believe is good enough to accept.




http://www.theaustralian.com.au/business/financial-services/macquarie-settles-storm-financial-investor-suit-for-825m/story-fn91wd6x-1226598313633



> *Macquarie settles Storm Financial investor suit for $82.5m *
> 
> MACQUARIE Group has agreed to settle for $82.5 million a case brought against the firm by investors advised by Storm Financial, the Queensland financial advice business that collapsed in the global financial crisis.
> 
> ...


----------



## Garpal Gumnut (15 March 2013)

Congratulations, all Storm investors with loans from Macquarie.

This is great news, and an incredible sea-change.

You will be the first large group of small investors in the history of Australian Financial Advisory debacles, to actually get a victory over the big guys.

This will set a precedent, and protect your children and grandchildren.

I never thought you would achieve it.

Well done.

Let us hope you invest wisely in the future and stay away from financial advisers.

gg


----------



## Ijustnewit (15 March 2013)

Garpal Gumnut said:


> Congratulations, all Storm investors with loans from Macquarie.
> 
> This is great news, and an incredible sea-change.
> 
> ...



  Yes invest wisely in the future and stay away from financial advisers .. Ahmen to that.


----------



## Julia (15 March 2013)

I'm all for people educating themselves, have harped on about it all through this thread, but to imply that all financial advisers are shonks is a bit unreasonable and unfair to those who genuinely have their clients' interests at heart.  To assume they are all like Storm is not right.


----------



## Garpal Gumnut (15 March 2013)

Garpal Gumnut said:


> Congratulations, all Storm investors with loans from Macquarie.
> 
> This is great news, and an incredible sea-change.
> 
> ...






Ijustnewit said:


> Yes invest wisely in the future and stay away from financial advisers .. Ahmen to that.






Julia said:


> I'm all for people educating themselves, have harped on about it all through this thread, but to imply that all financial advisers are shonks is a bit unreasonable and unfair to those who genuinely have their clients' interests at heart.  To assume they are all like Storm is not right.




Quite close to the hotel is another iteration of Storm.

As the weeks go by the car park gets more full.

More unfortunate muppets in to the snare.

How can the average citizen, Julia, know the competence of a financial adviser?

ASIC don't know.

The Financial Advisers mob don't know.

At this very moment in time a new Storm is brewing, and muppets are being harvested.

gg


----------



## Harleyquin (16 March 2013)

Unfortunately GG I think that you're 100% right. 

Financial advisors will always pose a risk as they can use their financial knowledge against those who need financial advice. There are still too many sharks in the industry for the ordinary man/ woman to risk taking anyone's financial advice.

And in the case of Storm Financial, we saw all the major banks prepared to give them the financial ammunition that they needed to put their dodgy plan into action. 

Had the banks refused to fund storm financial this debacle would never have occurred, but they were prepared to break their own rules of conduct for financial gain, and then had the audacity to call their victims greedy.

The FPA don't care and our Government and their lapdog don't have the strength of their convictions to stop it happening again. ASIC have let the CBA off the hook with a slap on the wrist so they'll be the first in line to fund another dodgy scheme IMHO.


----------



## Frank Ainslie (16 March 2013)

*‘The Macquarie Bank settlement’ - A victim’s perspective!’*

It has been a long road for many of us since we were shafted by Storm and the banks back in 2008. Now that a settlement has been reached between the people in the Macquarie Bank class action and that ****house bank one would think that the likes of us who were in the class action would be celebrating? However, I personally have mixed feelings this morning. Certainly, I am pleased that we can at long last have closure but I am left with an empty feeling that the job was only half done. At the end of the day the bad guys were able once again to buy themselves out of trouble and all the rhetoric tht has gone before didn’t really amount to a hill of beans in the final analysis. 

Quite frankly we remain ignorant of what this settlement will mean for us personally because this agreement caught all of us by surprise. What will we do with any money that we get back under this settlement?  Live, simply live!

We personally will never again trust anyone with our money. They simply can’t be trusted! By they, I mean the banks, financial advisers,  this government  and its appointed regulator and all those _“so called experts”_  that profess to have our interests at heart but really only serve their own interests in the end. 

There may be some of you reading this that will get stung yourselves by such people in the course of your lives. My advice to you is to trust no one! 

During the last four years I have encountered many that have been completely destroyed by what happened to them when they placed their trust in a financial advisory firm and some of the major banks in this country. Many have ended their lives because they just couldn’t take it any more. And for what? We won’t even be a glitch on the Macquarie Bank’s balance sheet this year.

As for our legal system I have seen it in action first-hand in the past few months. It no longer serves the people but instead provides a means of sucking people even further dry. Yes, we obtained a settlement by using this avenue but if the Law really served the people, it would pursue these criminals come what may and not allow them to escape by buying their way out of jail. 

Oh, and by the way, don’t even bother to try and find justice in a courtroom unless you have a few million to spare. It costs $15,000 a day just to be heard before you throw in the legal fat cats for good measure. 

Many on this forum have been critical of us that entrusted Storm with our life savings. You haven’t been alone because many of our friends share your point of view. It is not my intention to explore the merits of such an argument further. I will only say this. If trust is a commodity that no longer can be relied on in business here in Australia where do we sit as a nation morally? For that matter if we are willing to tolerate those among us that target the unsuspecting, and never seek to curtail their actions, what does that make us?

Above all else, we that settled missed a unique opportunity to strike a blow for all those that have been shafted by banks. Hopefully, one day these pillars of vice will be brought into line. Until that day comes we all remain potential victims of their greed.


----------



## Judd (16 March 2013)

The article is a tad confusing in some respects.  It reports that investors lost $290M which varies from other amounts reported to have been lost.  Taking it at face vale, I'll assume that it relates only to Macquarie so the settlement is about $0.28 in the dollar.  After the lawyers slice out their cut (no pro bono there!) what does that leave?  15c to 20c in the dollar?  After all that stress and angst.  Seems to me that the investors still lost and not only in monetary terms.  As was stated ages ago in this thread, most of the law is about property, ie who owns or owes what, and not about people and you can never be certain about the final outcome.

As for the bank(s) a one-off (relatively miniscule) hit to the bottom line (and probably tax deductible) after which who cares.


----------



## bunyip (16 March 2013)

DocK said:


> http://www.theaustralian.com.au/business/financial-services/macquarie-settles-storm-financial-investor-suit-for-825m/story-fn91wd6x-1226598313633





_In a statement to the stock exchange today, the financial services giant said the settlement included an acknowledgement by the investors - who had margin loan facilities provided by Macquarie - that there was no wrongdoing by Macquarie._

In reference to the statement above in blue......
I’m not here to judge whether or not there was wrongdoing by Macquarie. 
I’ve said many times on this forum that if any wrongdoing can be proven against the banks, then they should be penalised accordingly.
But what I find myself wondering is this......
If investors acknowledge that there was no wrongdoing by Macquarie, then why was that company sued by investors?


----------



## pilots (16 March 2013)

bunyip said:


> _In a statement to the stock exchange today, the financial services giant said the settlement included an acknowledgement by the investors - who had margin loan facilities provided by Macquarie - that there was no wrongdoing by Macquarie._
> 
> In reference to the statement above in blue......
> I’m not here to judge whether or not there was wrongdoing by Macquarie.
> ...




How true, once AGAIN the wood ducks got screwed big time, and the lawyers walked away with the money


----------



## bunyip (16 March 2013)

Judd said:


> The article is a tad confusing in some respects.  It reports that investors lost $290M which varies from other amounts reported to have been lost.  Taking it at face vale, I'll assume that it relates only to Macquarie so the settlement is about $0.28 in the dollar.  After the lawyers slice out their cut (no pro bono there!) what does that leave?  15c to 20c in the dollar?  After all that stress and angst.  Seems to me that the investors still lost and not only in monetary terms.  As was stated ages ago in this thread, most of the law is about property, ie who owns or owes what, and not about people and you can never be certain about the final outcome.
> 
> As for the bank(s) a one-off (relatively miniscule) hit to the bottom line (and probably tax deductible) after which who cares.




As many of us said on this thread years ago, the law firms will be the big winners from the Storm debacle.
And the real culprits - the unsrupulous people at Storm Financial - will quite likely get little more than a slap over the wrist.


----------



## pilots (16 March 2013)

Bunyip, We have living in our street a Financial Adviser, our street is a high $ street, this adviser is over 60 years old, he rents his house and car, I find it unbelievable that he who has NOTHING should be allowed to advise people what to do with their life savings.


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## Julia (16 March 2013)

pilots said:


> Bunyip, We have living in our street a Financial Adviser, our street is a high $ street, this adviser is over 60 years old, he rents his house and car, I find it unbelievable that he who has NOTHING should be allowed to advise people what to do with their life savings.




Do you necessarily know that he doesn't have a string of investment properties or various other sources of income?
Just finds, as many people do, that renting is a more financially viable option?
Ditto leasing a car, it's tax deductible, and an easy way to turn it over more frequently.
I have no idea of his circumstances, just suggesting what you see on the surface may not be the whole picture.


----------



## Julia (16 March 2013)

Harleyquin said:


> Financial advisors will always pose a risk as they can use their financial knowledge against those who need financial advice.



That's a good perspective.  People who have not acquired some basic financial literacy will not be in a position to question what they're being told.
At least, since the Storm debacle, there have been several exposes of shonky financial advice and hopefully more people will equip themselves with at least enough knowledge to avoid being fleeced.



Frank Ainslie said:


> It has been a long road for many of us since we were shafted by Storm and the banks back in 2008. Now that a settlement has been reached between the people in the Macquarie Bank class action and that ****house bank one would think that the likes of us who were in the class action would be celebrating? However, I personally have mixed feelings this morning. Certainly, I am pleased that we can at long last have closure but I am left with an empty feeling that the job was only half done. At the end of the day the bad guys were able once again to buy themselves out of trouble and all the rhetoric tht has gone before didn’t really amount to a hill of beans in the final analysis.



There must almost be a sense of anticlimax amongst the relief.  
Frank, your expectations, understandably given your situation, have probably always been too high.
Sure, it would be nice to see what you would view as 'justice', but I doubt it was ever going to happen.



> We won’t even be a glitch on the Macquarie Bank’s balance sheet this year.



True enough.



> As for our legal system I have seen it in action first-hand in the past few months. It no longer serves the people but instead provides a means of sucking people even further dry. Yes, we obtained a settlement by using this avenue but if the Law really served the people, it would pursue these criminals come what may and not allow them to escape by buying their way out of jail.
> 
> Oh, and by the way, don’t even bother to try and find justice in a courtroom unless you have a few million to spare. It costs $15,000 a day just to be heard before you throw in the legal fat cats for good measure.



I don't think anyone is going to argue with your cynicism on this front.  It's difficult to have much respect for the whole legal system, including the decisions of the judiciary in many instances.



> Above all else, we that settled missed a unique opportunity to strike a blow for all those that have been shafted by banks. Hopefully, one day these pillars of vice will be brought into line. Until that day comes we all remain potential victims of their greed.



By settling you took the only reasonable option.  Your opponents would never have run out of money to fight you.   To have the whole miserable business finished with some return of your funds is surely better than the continued stress of fighting a battle you were never going to win.

It has been awful for so many people.  I sincerely hope it's now possible to make the best of the wash-up and restore some calm to your lives.  Good luck.


----------



## pilots (16 March 2013)

Julia said:


> Do you necessarily know that he doesn't have a string of investment properties or various other sources of income?
> Just finds, as many people do, that renting is a more financially viable option?
> Ditto leasing a car, it's tax deductible, and an easy way to turn it over more frequently.
> I have no idea of his circumstances, just suggesting what you see on the surface may not be the whole picture.




He has nothing, has been behind with his rent, when you talk to him you would thing he has it all.


----------



## Garpal Gumnut (16 March 2013)

I see no reason why Financial Advice should not be included in the Education Curriculum from Grade 1, complete with free " piggy banks " for students.

Many of the Storm investors were not muppets in other areas of their lives, many were from a business background, or held high paying positions in the public service and industry. 

Many were at the top of their relevant craft, train drivers, doctors and engineers.

Many were ordinary hardworking people who had saved to provide for their retirement in the jobs that provide the glue that keeps Australia together as a nation, nurses, carers, firemen and policemen, and women too.

Being good at a thing does not make one a financial whiz.

And I would agree that many Financial Advisers would struggle to find a job in any other endeavour.

So, do not depend on ASIC, the Courts, Banks or Institutions to protect you from ill advice.

Another Storm brews as I type.

gg


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## Vixs (16 March 2013)

pilots said:


> Bunyip, We have living in our street a Financial Adviser, our street is a high $ street, this adviser is over 60 years old, he rents his house and car, I find it unbelievable that he who has NOTHING should be allowed to advise people what to do with their life savings.




Can doctors smoke? Can lawyers break the law? What a stupid bloody analogy.


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## Julia (16 March 2013)

pilots said:


> He has nothing,



How do you know? Re late rent, he might be a sloppy administrator


----------



## explod (16 March 2013)

Garpal Gumnut said:


> I see no reason why Financial Advice should not be included in the Education Curriculum from Grade 1, complete with free " piggy banks " for students.
> 
> gg




Not on your topic, but absolute Amen to that gg.


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## Julia (16 March 2013)

Agree in principle, but, heavens, no wonder kids are leaving school semi-literate, given the number of subjects teachers are expected to cram into the curriculum.  That, amongst what seems to be their prime function in the public schools of managing woefully bad and disrespectful behaviour.

Just as an aside, the latest weird thing that was reported on Radio National today is primary school kids having their urine tested at school so that the researchers can determine if their diet contains too much salt!!!

Someone, please deliver us from the nanny state.


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## ASICK (17 March 2013)

*As an Aside: Salt*



Julia said:


> ... Just as an aside, the latest weird thing that was reported on Radio National today is primary school kids having their urine tested at school so that the researchers can determine if their diet contains too much salt!!!  Someone, please deliver us from the nanny state.




http://www.abc.net.au/radionational/programs/rnfirstbite/australian-children-and-salt/4573400

Yes, heaven help us from fools - enjoy your salt.


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## Dinah (17 March 2013)

Julia said:


> Just as an aside, the latest weird thing that was reported on Radio National today is primary school kids having their urine tested at school so that the researchers can determine if their diet contains too much salt!!!
> 
> Someone, please deliver us from the nanny state.




Sounds like an invasion of privacy to me.

Amazing that they can find the resources to do this but seem unable to monitor financial services properly.


----------



## Smiley (17 March 2013)

Being familiar with legal costings, Levitt's $6-$7 million, seems quite high for a case that saw hardly any court dates. . . Richards that is. As GG and so many others have commented, it is the lawyers who are the big winners in this.  I hope his clients are going to ask for invoices and transperancy re all charges/costs.

I am hoping that since MBL hardly sees this as a blip on their earnings, intense negotiations happened around the final amount of $82.5 million. Frank? Were there barristers at the negotiations with MBL?


----------



## maccka (17 March 2013)

bunyip said:


> _
> 
> But what I find myself wondering is this......
> If investors acknowledge that there was no wrongdoing by Macquarie, then why was that company sued by investors?_



_

Hi Bunyip,

Perhaps the statement could also be turned around thus...

If there is no wrongdoing by Macquarie, then why are they paying out $82.5 million??



Smiley said:



			Being familiar with legal costings, Levitt's $6-$7 million, seems quite high for a case that saw hardly any court dates. . . Richards that is. As GG and so many others have commented, it is the lawyers who are the big winners in this.  I hope his clients are going to ask for invoices and transperancy re all charges/costs.

I am hoping that since MBL hardly sees this as a blip on their earnings, intense negotiations happened around the final amount of $82.5 million. Frank? Were there barristers at the negotiations with MBL?
		
Click to expand...



Hi Smiley,

Yes - I believe there were barristers involved.  There may not have been many court dates but there was a HUGE amount of out of court work.  Huge hours, millions of pages of documents were read and a large amount of travel was logged by the legal teams.

Cheers
Maccka_


----------



## Judd (18 March 2013)

Yeah, I don't think we will ever really know why each side decided to settle. It's not as if either the plaintiffs or defendants legal teams are going to come out and declare "We reckon we're gonna lose this big time, so we cut the best deal we could." 

In any case, they probably have better things to do such as finishing a game of canasta or whist.


----------



## bunyip (18 March 2013)

maccka said:


> Hi Bunyip,
> 
> Perhaps the statement could also be turned around thus...
> 
> ...




Yes, Maccka - that question could also be asked.
In fact the same quesiton was asked when CBA (if my memory serves me correctly) made a payout late last year.

I had a girlfriend years ago who negotiated to buy a ballet school. A verbal aggreement was reached about the price and the conditions of sale, the contract was in the process of being drawn up, then the owner of the ballet school decided she wanted some additional conditions included in the contract.
 My girlfriend said _“No, that wasn’t part of what we agreed on, either you stick to our original aggreement, or the sale is off.” _
The owner of the school held fast, and the deal fell through.
My girlfriend decided to start her own ballet school from scratch, in competition to the ballet school she’d tried to buy. Her new ballet school immediately made serious inroads into the business of the other school – more than half the students moved across to the new one.
The owner of the other ballet school sued my girlfriend for breach of agreement. 
She was advised by her lawyer to settle out of court. 
She said _“No way, it was the other party who broke the aggreement, not me, and apart from that we never signed a contract. Why should I pay when I’ve done nothing wrong?”._
Her lawyer said yes, he knew all that, nevertheless there was no certainty that she’d win the case, fighting it would be costly, and if she lost she’d be up for the other party’s legal costs as well as her own.
His professional advice was that they negotiate an out of court settlement, which he was sure would be a relatively trivial amount. He felt that was the most expedient way around the problem.
She she settled out of court for a small sum relative to the income from her new ballet school.
The story got around the small town of 10000 people, the other ballet school continued to lose students to the new one, and closed down inside of 12 months. My girlfriend came out of it all with a smile on her face, a small dent in her bank account from the payout, and her new ballet school continued to flourish.

The morals of the story? 
The innocent party doesn’t always win the court case.
The guilty party isn’t necessarily the one that loses.
Innocent or guilty, an out of court settlement is often the most expedient option for the accused.

*IF* Macquarie is guilty of any wrongdoing (and Storm investors have acknowledged that they are not), then the law has allowed them to buy their way out of trouble for a relatively paltry sum that amounts to small change for a company of that size, while at the same time enabling investors to recoup a small percentage of their losses.

_*IF *_Macquarie is innocent of any wrongdoing (as has been acknowledged by investors), then I assume their legal advice has been that irrespective of their innocence, the most expedient course of action is to make a small out of court settlement.

I don’t think you could really pick a winner and a loser, but all things considered, I’d say that Macquarie has come out of it better than investors have done.


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## bunyip (19 March 2013)

Ijustnewit said:


> Yes invest wisely in the future and stay away from financial advisers .. Ahmen to that.



IJN
After the way Storm treated you I guess I can understand your reluctance to ever again get involved with a financial planner. 

But on the other hand it’s not reasonable to tar all planners with the same brush because of the unscrupulous actions of one dodgy outfit. Not all financial planners are rogues, some are decent moral people who can give valuable advice across a range of finance and investment issues such as estate planning, taxation minimization, retirement planning etc.
You may be doing yourself a disservice by not utilizing their professional advice.

The question of course is how do you know which ones are giving you decent advice.
I believe Ainslie has made a pretty good suggestion in that regard by advising investors to use a bit of common sense by consulting a number of different planning firms, and comparing what they’re offering.



Frank Ainslie said:


> Okay! Then how does one know whether what a financial adviser is telling you is in your best interests? You don’t which is why, I now firmly believe, we ‘Stormies’ should have sought a second and indeed a third opinion from other financial advisers as to the merit of Storm’s financial model and, for those that had an accountant, run it past him or her as well. Yes, it would have cost us more money and financial advice does not come cheap but with the amount of money we were investing, it would have made little difference to us. After all, if one can’t afford the small amount of money it would have cost, one shouldn’t be in investing anyway.
> 
> Often, when you consult with more than one professional you pick up some useful advice anyway in your search for the best solution to your particular needs, whatever they may be. This is commonsense after all! As it was, our failure to apply some commonsense and test Storm’s plan independently cost us all that we had in the end.
> 
> ...



Further to Ainslie’s comments about common sense, I’d stress the importance of applying some common sense thinking to any advice you get, regardless of whether it’s from a doctor, a financial planner, or anyone else.
Doctors a couple of centuries ago prescribed opium for pain relief. But if our doctor gave us the same advice today we’d have enough knowledge and common sense to know the advice was badly flawed and highly risky. We wouldn’t just blindly act on his advice without even thinking about it.
Similarly, we all know the stock market is risky, and it didn’t take the GFC to prove it – we knew it well before then. The spectacular rises and falls of the stockmarekt and of individual companies have always been publicly documented in our newspapers and TV news programs. We couldn’t avoid reading or hearing about it even if we wanted to.
When the advice from a financial planning firm is to get your hands on as much money as possible by cashing out your assets, your business, your super, and borrow heavily against your home, sinking all the money into the always risky stock market, then double gearing to raise even more investment funds for the same purpose, then taking step after step to keep ramping up the borrowings for more market investment, and they clearly have a vested interest in getting you to invest as heavily as possible so they can pull 7% from ever dollar you invest, they’re advising you to put all your eggs in the same basket, no diversification to spread your risk, they’re not taking into account your age......I mean really, let’s be honest and realistic here – wouldn’t just a little bit of common sense thinking have set your alarm bells ringing? Was it really that difficult to work out that you were being given a bum steer? Was it truly so hard to see that they were putting their own interests before yours?

My purpose of going over this again is not to rub salt into any wounds, but merely to point out that it need not be as scary or difficult as some of you seem to think to evaluate the advice from financial planners to sort the good from the bad,  
If any of you Storm victims were to consult with a number of planners these days, I very much doubt that you’d be so prone to being taken for a ride as you were last time. I think you’d make a better effort to evaluate the advice on offer.


----------



## Solly (23 March 2013)

> *Macquarie settles on Storm claim*
> 
> Some investors who lost everything through their involvement with storm financial are angry an out of court settlement has been agreed with Macquarie Group and concerned they've been sold short.




More by Annie Guest @ http://www.abc.net.au/news/2013-03-22/macquarie-settles-on-storm-claim/4589882?section=qld


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## Ijustnewit (23 March 2013)

I can see that some investors will not be happy with the amounts they will be offered , but as they say " a bird in the hand is worth two in the bush". This was certainly the case also with the CBA settlements.
This is ONLY my opinion but I feel some investors still can not relate losses back to what they started with, for example. 
You start with $ 600,00 and the bank gives you another $600, 000 so the investment is worth 1.2 million give and take market ups and downs . Now some early investors saw their investment grow to around 3 million at the height of the market. So I think some may be upset when receiving an offer of around 50 % of their initial investment that is $300,00. I think some still think they should be getting a slice of the 3 million. 
Maybe it's still hard to work out for some , but I think it's a chance to move on and rebuild , and let's face it I think your health is worth more than any money . 

Cheers
IJN


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## Judd (24 March 2013)

An interesting viewpoint, Ijustnewit.  It is one that hadn't crossed my mind in all of this.


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## Solly (25 March 2013)

> *Storm collapse fighter faces losing home to bank*
> 
> A PALMWOODS couple facing eviction from their family home have accused one of Australia's big four banks of bullying tactics.
> 
> Mark and Ann Weir have described the past four years as a rollercoaster of emotions as they battled Westpac Bank over a loan debt.




More @ http://www.sunshinecoastdaily.com.au/news/bank-stand-no-shelter-from-storm/1803506/


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## bunyip (25 March 2013)

Solly said:


> More @ http://www.sunshinecoastdaily.com.au/news/bank-stand-no-shelter-from-storm/1803506/




Banks are companies owned by shareholders, and shareholders want their company management to run a tight ship, not operate as charity organizations that give out freebies by writing off loans to people who can’t repay them. It’s not victimization when banks exercise their right to recover loans by foreclosing on mortgaged assets. It’s simply the way they have to operate, otherwise they’d go out of business. 
I can understand that it’s a bitter pill to swallow for people whose homes or other assets are repossessed. But such are the cold harsh realities of borrowing money.


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## bunyip (26 March 2013)

Solly said:


> More @ http://www.sunshinecoastdaily.com.au/news/bank-stand-no-shelter-from-storm/1803506/




I thought long and hard about whether I’d comment on some of the things that Mark Weir is reported to have said. At first I thought ‘why bother’, but as I read and re-read the article above I felt that someone should correct some of the ill-considered views and allegations that are being bandied around in relation to the Storm debacle.

The first thing I take issue with is Mr. Weir’s statement in which he refers to his _‘unavoidable financial circumstances brought on by Storm Financial.’_
The circumstances that Mr. Weir or any other Storm investors find themselves in were not ‘unavoidable’.
On the contrary, what happened to Storm investors was absolutely avoidable. Nobody forced anyone to borrow heavily to invest in the stock market, mortgage their homes to raise loans, use double gearing, sink all their own money and all the borrowed money into just one risky investment. Nobody forced anyone to sit by and do nothing to address their debt crisis while the stock market collapsed. Nobody forced anyone to accept Storm’s advice. Nobody prevented anyone from consulting a number of financial planning firms to compare their offerings. (this move alone would have revealed the risky nature of Storm’s strategy compared to the more conservative advice that most planning firms offer.)
Many thousands of people approached Storm to see what they were offering. Most of them rejected Storms’ advice, thereby avoiding getting caught up in the financial disaster that destroyed Storm investors. 
So for any Storm investor to describe their financial circumstances as ‘unavoidable’......well, it simply is not correct.

Mr. Weir describes Westpac’s action as ‘corporate bastardry’. I have to wonder if he’s really being fair here, or if he’s just lashing out from emotional stress. 
Banks usually consult with clients who are in financial difficulties, in an attempt to help them find a way around their problems. I have no doubt that Westpac has done so in this case. Foreclosure would be a last resort.
When we take out a bank loan we usually don’t think about where the bank gets the money they lend us. It’s borrowed money – they borrow the money from someone else, then lend it to us. The bank has to meet loan commitments just like the people they lend to have to meet loan commitments. If they can’t meet their loan commitment then they go out of business, just like us ordinary investors go out of business if we can’t meet our loan commitments.
Clearly then, banks have to insist that clients honor the terms and conditions of their loans. If they don’t, then the bank moves to recover the money. It has nothing to do with ‘corporate bastardry’ – it’s just standard and necessary business practice.
No thinking person wants to see our banks go broke. But they’d go broke quick and lively if they adopted a complacent attitude to debt recovery.

I note the claim that the Weirs lost their life savings when Storm Financial collapsed in 2008.
The fact is that Storm investors were wrecked regardless of whether Storm Financial collapsed or survived. Investors lost their life savings because of the stock market crash and because of their extreme levels of gearing, not _because_ Storm collapsed, and not _when_ Storm collapsed. Their savings were lost long before then – the damage was already done by the time Storm folded.

In summary.....
* The financial circumstances of Storm investors were avoidable.
* Banks moving to recover loans are simply following necessary business practice – otherwise they’d soon go out of business.
* Storm investors were wiped out by a combination of heavy gearing and a collapsing stock market – not by the collapse of Storm Financial.


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## bunyip (27 March 2013)

Ijustnewit said:


> I can see that some investors will not be happy with the amounts they will be offered , but as they say " a bird in the hand is worth two in the bush". This was certainly the case also with the CBA settlements.
> This is ONLY my opinion but I feel some investors still can not relate losses back to what they started with, for example.
> You start with $ 600,00 and the bank gives you another $600, 000 so the investment is worth 1.2 million give and take market ups and downs . Now some early investors saw their investment grow to around 3 million at the height of the market. So I think some may be upset when receiving an offer of around 50 % of their initial investment that is $300,00. I think some still think they should be getting a slice of the 3 million.
> *Maybe it's still hard to work out for some , but I think it's a chance to move on and rebuild , and let's face it I think your health is worth more than any money *.
> ...




I think that’s good advice......move on and rebuild, your health is worth more than money.

Can anyone tell me......Was the Macquarie case related to an allegation that they were involved in a UMIS?

Are there any outstanding class actions in relation to banks allegedly being involved in a UMIS?

Also, can anyone tell me or at least give a hint as to what percentage of the settlement money is taken by a law firm that operates on a ‘no win no fee’ basis? If you get a 300 grand settlement from a bank, does 50% of it go to the law firm? 40%? 30%?
A fellow down the road from me has engaged a law firm to represent him in a legal case regarding a workplace injury. The firm is working on a ‘no win no fee’ basis. 
He tells me that if he wins the case the bulk of the settlement will go to the law firm, and he wonders if there will be enough left over for him to make it worthwhile.


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## Ijustnewit (28 March 2013)

Something that may be not well know is that many clients had more than enough money at the height of the markets to pay off their mortgage. This did not occur in most cases and the complete opposite took place.
 Why ? because Storm were dead against property investment of any kind. Most advisers would themselves rent or have extra margin loans out against any bricks and mortar held. Why wouldn't you pay out your mortgage in the good times ? The answer probably has more to do with Storm missing out on some fees and opportunity to get more cash to ramp up margin loans. As far as I'm aware many retired and sometimes elderly investors where encouraged to renegotiate their current mortgages with a more Storm friendly bank. To my good fortune I was never in this position , and if I had been I would have made sure that my house was secured and the mortgage was paid out in full when the cash was available to do so. To allot unfortunately they took every word from Storm and their advisers as gospel and did anything they asked . After all they where paying top dollar for that advice , and at the height of the market that advice seemed to be working. I don't know if this was the case with the couple in the article Bunyip refers to .


IJN


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## Solly (28 March 2013)

> *Storm Financial investors meet to discuss settlement offer*
> More than 100 former Storm Financial investors met at Redcliffe, north of Brisbane, last night to get details on the latest settlement offer.




http://www.abc.net.au/news/2013-03-...-discuss-settlement-offer/4599670?section=qld


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## Garpal Gumnut (28 March 2013)

Solly said:


> http://www.abc.net.au/news/2013-03-...-discuss-settlement-offer/4599670?section=qld




Thanks Solly.

From that link 



> Former investors say the only way to stop another disaster like Storm Financial is for the courts to discipline the banks and set a precedent.




I would dispute this. 

My mate who lost the lot with Storm is back with a similar Financial Adviser, and ecstatic with his returns.

Nobody can convince him to rein in, smell the flowers and enjoy life.

He has swallowed the hook, and is borrowing again.

Is it the Financial Adviser's fault.

Or is it the Muppets' ?

gg


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## Julia (28 March 2013)

"Discipline the banks"???
For what exactly?


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## chops_a_must (28 March 2013)

Julia said:


> "Discipline the banks"???
> For what exactly?




Perhaps it has something with fractional banking?

And regulating for the lowest common denominator.


I'm all for lenders exercising a duty of care, but I think those days have passed where lenders have individual relationships. And I doubt whether those days were much different.


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## bunyip (29 March 2013)

chops_a_must said:


> I'm all for lenders exercising a duty of care





How far do you go in making businesses responsible for exercising a duty of care? Should a duty of care apply only to businesses that sell loans, or should it also apply to businesses that sell other products?

Should a motor dealer exercise a duty of care by ensuring that you can afford the car you want to buy?
Before Harvey Normal loads you up with furniture or electrical gear, do they have a duty of care to ensure you can afford it without putting yourself in financial hardship?
Before your bank offers to increase your credit card limit, does it have a duty of care to ensure that you’ll be able to handle the additional debt you’re likely to run up?

*Investors should exercise a duty of care to themselves* by borrowing responsibly. Most investors already do so, but the Storm debacle has shown us that some do not.


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## SJG1974 (29 March 2013)

Julia said:


> I'm all for people educating themselves, have harped on about it all through this thread, but to imply that all financial advisers are shonks is a bit unreasonable and unfair to those who genuinely have their clients' interests at heart.  To assume they are all like Storm is not right.




Yep.  Lets not confuse financial advice with the promise of riches by investing in a certain manner or in certain products. 

Financial advice is much more that investing your money. Much much more.  And good advisers will charge fee for service rather than a % of the money you give them to invest.

There is more to financial advice than the recommendation of investments....its about maximising the amount of capital you have to invest.  It can be via gearing, if the investor is comfortable with the risk, it can be through structuring salary in a way to minimise tax and therefore increase disposable (investable) income.  It can be via using the the legal tax haven which is our superannuation system to build wealth in a tax effective environment.  It can be through owning assets in structures that enable the streaming of income and the protection of those assets against risk. It can be through structuring assets and income to maximise government benefits, to reduce the costs of aged care, to access benefits if you are sick or injured. Its not about getting rich in the shortest time possible.

How do i know? I use one who does all of the above.  And i trust him 100%. And i choose all my investments in my SMSF myself. My relationship with my adviser has nothing to do with investment returns. Its about finding solutions to my financial problems, and educating me in the process.

We have seen how financially illeterate so many people are.  Hell people have claimed they didn't understand that gearing into shares was risky.  These people need help...how are they going to build the necessary wealth to live comfortably in retirement when all the facts and figures suggest that the 9% SG contributions employers make will be inadequate for most people to live a comfortable retirement? Answer, they wont.

So my advice...dont just avoid advisers because of places like Storm, who aren't advisers at all.

There are plenty of good ones out there who actually help people....you just have to look.

One last thing...i just hope the "advisers" at Storm and particularly Manny and Julie face their day of reckoning for the rubbish they peddled out to people under the guise of "financial advice".


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## bunyip (30 March 2013)

SJG1974 said:


> i just hope the "advisers" at Storm and particularly Manny and Julie face their day of reckoning for the rubbish they peddled out to people under the guise of "financial advice".




Me too, but those of us who would like to see these unscrupulous people doing serious jail time are likely to be disappointed.

A fake ‘Tahitian prince’, Joel Barlow, ripped off Queensland Health to the tune of 16.6 million dollars. He was sentenced to 14 years in jail, but will be eligible for parole in five years if he behaves himself in the slammer. (one news report said he’d be eligible for parole in just over two years)
Such is the very unfunny joke that is our legal system.

Now, the Storm people were dishonest and unscrupulous and greedy, they breached the code of conduct that financial planners are supposedly bound to, and a lot of people have been devastated by following their advice. But to the best of my knowledge there is no evidence that they actually stole anything. 
So if Barlow will end up serving only five years in the pen for knocking off 16.6 million, what chance of Cassamatis or any of his associates doing jail time? I’d say it’s unlikely.

http://www.theaustralian.com.au/new...ueensland-health/story-e6frg6nf-1226600526411


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## bunyip (2 April 2013)

Anyone see ABC’s ‘7.30’ program tonight?

Another Storm-style spruiker has been uncovered – a bloke by the name of Peter Spann.
Another bunch of gullible and trusting investors have done their dough.
Another failure on the part of ASIC to close him down before people got burnt.

Just like the Storm Financial mob, this character knew that the one sure way to reel people in is to tell them what they want to hear.


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## Julia (2 April 2013)

bunyip said:


> Anyone see ABC’s ‘7.30’ program tonight?
> 
> Another Storm-style spruiker has been uncovered – a bloke by the name of Peter Spann.
> Another bunch of gullible and trusting investors have done their dough.
> ...



One of the sucked in investors said:  "you just trusted him:  you didn't have to think about it".
Oh my!


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## buffet (2 April 2013)

bunyip said:


> Anyone see ABC’s ‘7.30’ program tonight?
> 
> Another Storm-style spruiker has been uncovered – a bloke by the name of Peter Spann.
> Another bunch of gullible and trusting investors have done their dough.
> ...




Yes but isn't it funny all these guys look and sound the same and why are all scams and shisters out of the gold coast ???


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## bunyip (3 April 2013)

Julia said:


> One of the sucked in investors said:  "you just trusted him:  you didn't have to think about it".
> Oh my!



The mark of the master conman/salesman.....that a lot of people believed and trusted him without reserevation. Just as they did with Cassamatis.



buffet said:


> Yes but isn't it funny all these guys look and sound the same and why are all scams and shisters out of the gold coast ???




Yes, the Gold Coast seems to have been a breeding ground for crooks and shysters for many decades. 
Maybe it's an image thing....the way to appear successful is to live in the most expensive area of Queensland.

Somebody lent me a short Peter Spann video about 15 years ago. 
It was of one of his free introductory seminars that was designed to dangle a carrot under your nose so you’d fork out several thousand dollars for one of his full on wealth creation seminars.
He told his story of how he went from having little money and a very ordinary job to multi-millionaire in quite a short time. He harped on about his fabulous lifestyle and his 300 thousand dollar Ferrari. His basic message was ‘You can do it too – just buy a ticket to one of my seminars and I’ll teach you how’.
The impression I immediately formed was that he knew little about investment and he’d made his money from selling seminars to people for thousands of dollars per ticket, not from astute investment decisions.


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## Ijustnewit (3 April 2013)

"Queensland beautiful one day full of scammer's the next "


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## Ijustnewit (3 April 2013)

ASIS's report into financial advice from 2010. Pages 13 and 14 may go some way giving an insight why certain groups/profiles seem to get caught up in these scams. The whole report makes an interesting read.

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rep224.pdf/$file/rep224.pdf


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## bunyip (3 April 2013)

Ijustnewit said:


> "Queensland beautiful one day full of scammer's the next "




No no no, IJN, you’ve got it wrong. 
Queensland is beautiful *every* day and full of scammers every day as well. I should know – I’m a born and bred Queenslander!

I could name you many other scammers who have operated or are currently operating here in Queensland. But I’d probably end up in court – so I’ll leave it to the media to sniff them out and publicly expose them – they’re far better than ASIC are at that sort of thing!


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## pilots (3 April 2013)

Ijustnewit said:


> ASIS's report into financial advice from 2010. Pages 13 and 14 may go some way giving an insight why certain groups/profiles seem to get caught up in these scams. The whole report makes an interesting read.
> 
> http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rep224.pdf/$file/rep224.pdf




We know a sales man in the white goods, he will tell you  look for the suckers, they are the best ones to make money from.


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## Ijustnewit (3 April 2013)

bunyip said:


> No no no, IJN, you’ve got it wrong.
> Queensland is beautiful *every* day and full of scammers every day as well. I should know – I’m a born and bred Queenslander!
> 
> I could name you many other scammers who have operated or are currently operating here in Queensland. But I’d probably end up in court – so I’ll leave it to the media to sniff them out and publicly expose them – they’re far better than ASIC are at that sort of thing!




It's the great climate that attracts allot of retirees , ripe for the picking . I wonder if they have similar problems in places like Florida in the USA ?, I've seen TV programs where retirees from the UK are being scammed on the sunny shores of Spain as well.
As you have said financial education is the key , but it may take a few generations to get the message through.

Cheers 
IJN


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## Julia (3 April 2013)

bunyip said:


> I could name you many other scammers who have operated or are currently operating here in Queensland. But I’d probably end up in court – so I’ll leave it to the media to sniff them out and publicly expose them – they’re far better than ASIC are at that sort of thing!



This was an interesting point raised in the item last night.  ASIC offer the excuse that they are understaffed ad under funded.  But, as Neil Jenman said, he can raise awareness of this latest con man, and the journalist could follow it up, coming up with obvious scamming, so why can't ASIC who presumably must have at least equivalent resources?


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## bunyip (3 April 2013)

Julia said:


> This was an interesting point raised in the item last night.  ASIC offer the excuse that they are understaffed ad under funded.  But, as Neil Jenman said, he can raise awareness of this latest con man, and the journalist could follow it up, coming up with obvious scamming, so why can't ASIC who presumably must have at least equivalent resources?





Same story with the Federal police......it's become commonplace to see journos sniffing out crooks and corruption that the FP have missed.

It’s not like this Peter Spann character has only recently arrived on the scene – his wealth creation seminars have been run for at least the last 15 years, maybe longer. And he’s quite a high profile character who surely would have come to ASIC’s attention years ago. 
I can’t really explain ASIC’s limited ability to sniff out these dodgy operators. Apparently ASIC themselves can’t offer any reasonable explanation either.


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## Garpal Gumnut (3 April 2013)

Garpal Gumnut said:


> Anyone know anything about these guys. A few of my mates are clients. They are Townsville based . I don't use advisers.
> 
> gg






bunyip said:


> Same story with the Federal police......it's become commonplace to see journos sniffing out crooks and corruption that the FP have missed.
> 
> It’s not like this Peter Spann character has only recently arrived on the scene – his wealth creation seminars have been run for at least the last 15 years, maybe longer. And he’s quite a high profile character who surely would have come to ASIC’s attention years ago.
> I can’t really explain ASIC’s limited ability to sniff out these dodgy operators. Apparently ASIC themselves can’t offer any reasonable explanation either.




I enclose the first post on this Storm thread and the last above.

I first researched Storm in October 2008, way before ASIC did.

I did it on a Commodore 64, which I still proudly own.








I cannot see how ASIC can be under resourced, they just have **** for brains, and sit on their arses doing bugger all, all day. 

If I can suss out suss shows like Storm on a Commodore 64, I do not see why they cannot do more.

gg


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## bunyip (3 April 2013)

Ijustnewit said:


> It's the great climate that attracts allot of retirees , ripe for the picking . I wonder if they have similar problems in places like Florida in the USA ?, I've seen TV programs where retirees from the UK are being scammed on the sunny shores of Spain as well.




I’ve bought a few eBooks on Forex trading over the years, fortunately didn’t outlay big dollars, only paid 60 to 100 bucks for them – a number of them came from outfits in Florida. So yes, Florida, like QLD, may well be a magnet for seedy operators.


Ijustnewit said:


> As you have said financial education is the key , but it may take a few generations to get the message through.
> 
> Cheers
> IJN




Yes, basic knowledge and education on finance and investment matters are our best safeguard against getting rolled by scammers.
And I’d add awareness and interest as being equally as important. To elaborate a little.....be interested in and aware of what’s going on in the world around you - read the papers, watch the news programs, learn from what’s happening around the globe, and store the information away for future reference.
If there’s a stockmarekt crash, file it away in your memory, don’t just forget about it like so many people had apparently forgotten about the ‘87 crash when they signed on with Storm. Tell your kids and grandkids about it so they don’t go charging blind into one of the many dodgy stockmarket investment schemes that we’ve seen in recent times, and will see again no matter what laws are put in place to close them down.
If you read about ASIC having endorsed some scheme that turned out to be a con, remember it – that way you know not to place too much faith in ASIC’s opinion, as many Stormers apparently did. 

It’s really not all that difficult to get yourself some basic skills and awareness in investment matters. You don’t even have to pay for anything if you don’t want to – there are loads of good websites, ASX educational events, forums, and plenty of investment books that cost less than some people spend on booze in a week.
Once you start taking an interest in finance and investment matters, you’ll find yourself bumping into people who are more than happy to help out. The old saying is true....’_*Seek knowledge, and your teacher will appear’.*_


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## Ijustnewit (3 April 2013)

Garpal Gumnut said:


> I enclose the first post on this Storm thread and the last above.
> 
> I first researched Storm in October 2008, way before ASIC did.
> 
> ...



GG never throw that Commodore 64 away , they are highly collectable now and bring good money on E-bay.
Saw one recently on a trip to the Chapel Street Bazaar in Melbourne going for a nice roll of yellows.
Revenge of the nerds


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## Defender (8 April 2013)

This has been an interesting thread to follow, but I can't help thinking that there are some basic inconsistencies in the Storm story. There are other investment advisers who used a method like Storm, to promote double gearing into the share market (ie property loans used to purchase shares/funds, which is then used as equity for a margin loan). The interesting thing is that they did not all fail like Storm did.

I know of one firm who specialize in this method exclusively (AFAIK), and successfully managed their clients through the GFC. I know of another firm who also endorse this double gearing method, and still operate today. The former had trigger points to act on, in a falling market, and did so reducing client exposure in increments along the way. They are still operating under the same type of plan as Storm today. As far as I understand, none of their clients were margined out. What this tells me is that the Storm model was not basically flawed, as seems to be the conclusion the media and a lot of forum contributors believe. Storm failed their clients, because they went too far with their gearing, and did not implement a strategy to manage a falling market. To put all proponents of a Storm type model in the same basket, and accuse them all of being shonkies, when some of them have looked after their clients investments well, would be an injustice.

Just thought I'd put a bit of balance to the discussion, but don't think for a moment I condone Storm's actions, lack of actions and deals with banks, that their clients knew nothing about.

Storm promoted that they had a strategy in place, if the market went into decline. It seems quite possible that they did have a strategy (since other planners did), but chose not to use it. I don't pretend to know all the facts, but I do know the Cassimatis's were keen to publicly list Storm and some of their banking cohorts were supporting them. I think listing was their main goal, and they thought this was a big enough carrot for the banks to look after them. 

The whole enquiry into Storm seemed to conclude that Storm's computer system could not provide accurate data on portfolio valuations...so was completely useless. To me this is total garbage! The funds tracked the major indicies, so a very good indication of clients positions could be easily assessed, at any moment in the day. Certainly, this would have been just just as useful as accurate data, when the market was falling quickly.


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## bunyip (10 April 2013)

Defender said:


> This has been an interesting thread to follow, but I can't help thinking that there are some basic inconsistencies in the Storm story. There are other investment advisers who used a method like Storm, to promote double gearing into the share market (ie property loans used to purchase shares/funds, which is then used as equity for a margin loan). The interesting thing is that they did not all fail like Storm did.
> 
> I know of one firm who specialize in this method exclusively (AFAIK), and successfully managed their clients through the GFC. I know of another firm who also endorse this double gearing method, and still operate today. The former had trigger points to act on, in a falling market, and did so reducing client exposure in increments along the way. They are still operating under the same type of plan as Storm today. As far as I understand, none of their clients were margined out. What this tells me is that the Storm model was not basically flawed, as seems to be the conclusion the media and a lot of forum contributors believe. Storm failed their clients, because they went too far with their gearing, and did not implement a strategy to manage a falling market. To put all proponents of a Storm type model in the same basket, and accuse them all of being shonkies, when some of them have looked after their clients investments well, would be an injustice.
> 
> ...




As I see it, the success or failure of a double gearing strategy like Storm used is dependent on three main components....

*1. The amount of gearing.*
Storm’s strategy used ridiculous level of gearing, and kept revving up the gearing even further by the use of ‘steps’.  I’ll take a guess that other firms using a similar strategy would have geared to more conservative levels – therefore less damage to their clients accounts when the market caved in. 

*2. The action taken once the market starts falling.*
Storm took no action to lighten off client’s positions as the bear market set in. On the contrary, they kept gearing their clients further even when the market was in serous decline and dire economic warnings were plastered across the media every day.
Contrast this with the prudent action other firms took in lightening off their clients positions in increments as the market fell.

*3. The size and the speed of the fall.*
Trigger points sound good in theory, but they offer no defense against a situation where the market gaps downs severely from the closing price one day to the opening price next day. 
1987 is good example – the crash was brutal right from the start, with the US market losing 22% on ‘Black Monday’ October 19, 1987.  Next morning in response to the huge hit on the US market, our market opened 20% lower than the closing price of the previous day. By the end of the day it was down another 5%, making a total fall of 25% in a single day -  the biggest one day fall in history in percentage terms.
By comparison the 2008 bear market saw a slow decline over about 18 months, except towards late 2008 when sheer panic sent it into free-fall. 
Lightening off clients positions worked well enough in such a slowly declining market. It would have been a different story though if the sharp and sudden plunge of 1987 had ben repeated.




Defender said:


> The whole enquiry into Storm seemed to conclude that Storm's computer system could not provide accurate data on portfolio valuations...so was completely useless. To me this is total garbage! The funds tracked the major indicies, so a very good indication of clients positions could be easily assessed, at any moment in the day. Certainly, this would have been just just as useful as accurate data, when the market was falling quickly.




And there was the scrambled bank data allegation used by Cassamatis to excuse his failure to manage his client’s portfolios. Some Storm clients agreed with him, I suspect in an attempt to gather ammunition to fire at the banks whose data was supposedly scrambled. 
The reality was that the performance of the All Ords was mirrored by the index funds that Storm clients invested in, and the latest All Ordinaries figures are published and broadcast in the media several times a day. Therefore it was simple for Storm and their clients to know every day how their investments were performing.


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## doobsy (17 April 2013)

I know the group is much smaller but is there any additional information for investors that meet the criteria of being "class members" of the Levitts settlement agreement with MBL?

I know a few who did not sign up with Levitts but would meet the "member" status.


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## Ralph80 (17 April 2013)

doobsy said:


> I know the group is much smaller but is there any additional information for investors that meet the criteria of being "class members" of the Levitts settlement agreement with MBL?
> 
> I know a few who did not sign up with Levitts but would meet the "member" status.




Take a look at the following from the ASIC website:- 
https://storm.asic.gov.au/storm/sto...egarding-the-ASIC-CBA-settlement?opendocument

The way I read Point 18 the Macquarie settlement will include all investors, not just those in the Class Action.  Any thoughts?


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## doobsy (18 April 2013)

Ralph80 said:


> Take a look at the following from the ASIC website:-
> https://storm.asic.gov.au/storm/sto...egarding-the-ASIC-CBA-settlement?opendocument
> 
> The way I read Point 18 the Macquarie settlement will include all investors, not just those in the Class Action.  Any thoughts?




No - my understanding is you obviously have to meet the "member" status. That is investment into Storm indexed fund FUNDED by Macq Margin Loan between 2005-08

The people who funded the action will receive more than those who did not but are still eligible under the "member status"


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## bunyip (23 April 2013)

The post below in blue is post 5770 on page 289, by Frank.
I've had to do a copy and paste to reproduce this post, because the qote tags won't work for me.

_
Just had a quick look to see if anything has changed! In general, sentiment still seems about the same.

I’m afraid no one on this site that may be working in the financial sector as a financial adviser or in some other capacity quite realizes the impact the collapse of Storm Financial has had, and will continue to have on his or her industry. One of the issues that financial advisers now have to deal with is “trust” or rather, lack of it.

All we hear about on this forum are the foibles of Storm and the foolishness of the people that used that firm to invest. Whilst this may instil in some the feeling that they cannot be blamed for what a rogue financial advisory firm did, I’m afraid that is what ordinary Australians will think. It’s called being guilty by association.

So, I believe, it will be the financial advisers and those within the investment markets that will be feeling the pinch in the foreseeable future, not us. After all, our fate will be decided in a court of law, not on this site so we are not really concerned by what you say or think. You, however, should be concerned though by what we think because that word-of-mouth business that once existed will dry up if it hasn’t already done so. We are many mouths and our generation has children and grand-children that will preach our mantra, “They cannot be trusted!”

You may level abuse on us for now but it’s going to come back to bite you. The Storm collapse will leave a smell for years and rightfully so. No matter how you dress it up, qualified financial advisers that were FPA approved gave Storm investors bad financial advice full-stop! The professional indemnity insurance was a chimera, the compliance regulations were inadequate, systems were non-existent, and our trust was met with lies and subterfuge. Yet, you have endeavoured to shift some of the blame to the Storm investors. No doubt, you think that by so doing people will think this was a one off aberration, and the public will not condemn the financial sector in general for what occurred with Storm.

Good luck if you believe that because many would-be investors will be now looking elsewhere rather than using financial advisers. Once people out there (some of them could be potential investors) have assessed the evidence, for themselves they are just going to be too wary of being burnt like us. After all, they are going to ask themselves, “What guarantees are there that this won’t happen again?”

I believe that anyone on this forum that is connected with the financial sector would be far better off concentrating on how they are going to win back some “minds and hearts”, rather than mocking us at every opportunity. This type of ploy will just alienate us further! Remember that we, the victims of Storm and the Banks, number in the thousands, and that’s a very wide sphere of influence

The Storm affair has already generated a lot of bad publicity to date about financial advisers in general, not just Storm, and there will certainly be a lot more before all this has finished. Every single piece of bad publicity will be just another nail in your coffin so it’s time you started seeing the bigger picture.

One of the many things that Storm investors were led to believe was that Storm had adequate 'professional indemnity insurance'. If people on this forum want to have a constructive debate with a view to winning back some of that lost trust, I am quite willing to start with what I consider to be one of the key features that might, if the industry now gets it right, enable financial advisers to reassure their would-be investors that their investments are safe- not from market downturns but rather from shonky financial advisers. If you cannot convince them that you have this under control, and you have safeguards in place to protect their assets from crooks, you won’t have a business because you won’t have any clients left. You’ll then be the ones looking for work, not us. _

Doobsy

I came across the above post from Frank - the stronger points of which I've underlined. 

Given Frank's dire warnings to the financial planning sector, I thought maybe you could give us an overview of the state of the financial planning industry these days. 
Any sign that Frank’s dire prophesies for financial planners are coming true? Or is it business as usual in your industry?

I recently bumped into a financial planner at a traders meeting, and asked him how business was these days. He told me that since the GFC took hold he’s had more people than ever before seeking investment and planning advice to better utilize their income and assets.
He's just one plannner though, and may not necessarily be representative of the industry as a whole.


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## doobsy (24 April 2013)

Bunyip

I can't speak for the industry but we are busier than ever. I see this as a result of a number of factors:


Governments changing rules and creating confusion
Cash rates providing inadequate returns
Herd mentality coming forward as markets improved over the past 12 months

There is always a run of business as a new group of people retire or get close to retiring. Let me stress something - 90% of our business is referred by business partners - mostly accountants. They do not send them over unless they need advice.

Storm had a hit rate of 3/10 (7/10 walked away is thrown around alot on this forum). Since the crisis I would say our hit rate is closer to 80%. We don't get the tyre kickers.

The last couple of years have been tough with markets underperforming but we grew our client numbers and our revenue. The last 4 months we have written more businss than we did in the previous 12 months so this year looks good.

Plenty of "older" advisers stuck in the old school ways and processes might be struggling a bit but we are pretty happy with where we are at.

I think any adviser who has focussed on their advice and service rather than "return" would be very comfortable and their clients happy they have a plan to achieve their goals.

Can I also add that good luck to those who can do it themselves and watch out those who can't but try to. Most clients that handle their own affairs lose money because they don't have an outside party who is clear minded about when to buy and sell and because they can't keep up with the rules and so miss great opportunities to use strategy to maximise how their assets are working. Advisers that rely on money invested to generate a fee have a vested interest to keep it invested. There should always be a "relationship" fee which covers the strategic and technical advice no matter what is invested. If there is also a fee based on monies managed then that is fine also but it should not be the only source of income as it creates conflict.


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## bunyip (24 April 2013)

doobsy said:


> Bunyip
> 
> I can't speak for the industry but we are busier than ever. I see this as a result of a number of factors:
> 
> ...




Thanks Doobsy for your insights – that pretty much ties in with what I was told by the planner I bumped into recently.

It would have been a shame if Frank’s prophesies had come true, and financial planners were treated like the plague because of one bad apple called Storm Financial. I’m pleased that hasn’t happened.


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## Judd (2 May 2013)

http://www.couriermail.com.au/news/...lio-crash-likely/story-e6freoof-1226633409728



> *Bank 'warned' Storm portfolio crash likely*
> 
> by: Anthony Marx
> From: The Courier-Mail
> ...


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## Julia (3 May 2013)

Court approves settlement between Storm investors and Macquarie Bank
http://www.couriermail.com.au/news/...t-macquarie-bank/story-e6freoof-1226634877272


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## bunyip (7 May 2013)

Julia said:


> Court approves settlement between Storm investors and Macquarie Bank
> http://www.couriermail.com.au/news/...t-macquarie-bank/story-e6freoof-1226634877272




_
Judge approves $82.5 million settlement of class action by Storm Financial victims against Macquarie Bank

    by: Anthony Marx

A FEDERAL Court judge in Brisbane has approved an $82.5 million settlement of a class action launched by Storm Financial victims against Macquarie Bank.
The decision by Justice John Logan, announced late today, will assist 1050 Storm clients who had taken out about $275 million worth of high-risk margin loans to invest in the doomed company, which collapsed in 2009._

Sloppy journalism here from Anthony Marx.

He makes it sound like investors sunk their money into Storm Financial, and were wiped out when that company collapsed.

In reality they invested in Index Funds _*through*_ Storm Financial, but they didn’t invest _*in*_ Storm Financial itself. They weren’t wiped out when or because that company collapsed. They were wiped out when and because the share market collapsed, and because their losses were magnified by their heavy gearing levels.


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## kevvo (7 May 2013)

are people still talking about these guys?? aren't they in jail? they were a bonofide scam!


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## bunyip (7 May 2013)

kevvo said:


> are people still talking about these guys?? aren't they in jail? they were a bonofide scam!



Despite the widely held view that they deserve to spend some time in the slammer, they’re not in there yet and it’s not looking very likely that they ever will be.


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## Solly (10 May 2013)

bunyip said:


> Despite the widely held view that they deserve to spend some time in the slammer, they’re not in there yet and it’s not looking very likely that they ever will be.




bunyip, some may hold the view that the principals as well, may in fact be victims of the banks as well. 

Discuss?


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## Steve Borden (11 May 2013)

Solly said:


> bunyip, some may hold the view that the principals as well, may in fact be victims of the banks as well.
> 
> Discuss?




Hubris rather than the banks would be my view.


----------



## bunyip (11 May 2013)

Solly said:


> bunyip, some may hold the view that the principals as well, may in fact be victims of the banks as well.
> 
> Discuss?




Cassamatis would be in complete aggreement I'm sure, regardless of wheter or not he really believes it.

At one stage he was hell bent on taking legal action against the CBA - I haven't heard wheter he's proceeding or whether that plan has just fizzled out.


----------



## Solly (11 May 2013)

bunyip said:


> Cassamatis would be in complete aggreement I'm sure, regardless of wheter or not he really believes it.
> 
> At one stage he was hell bent on taking legal action against the CBA - I haven't heard wheter he's proceeding or whether that plan has just fizzled out.




Indeed it will be interesting to see if any actions are in fact launched. 

Also as ASIC are seeking a pecuniary penalty to be imposed by the courts in a civil, rather than in a criminal jurisdiction, it appears to me that there may be further scope for entertaining times ahead for observers.

I hold the view that this saga is not winding down but is now entering its next phase. 

S


----------



## Ijustnewit (20 May 2013)

Word on the grapevine today is the court cases are in recess for two weeks due to illness .


----------



## doobsy (29 May 2013)

Massive ASIC announcement today.

Not sure of the full implications yet and not sure I agree that they are necessarily right but could be huge for Stormies that were linked to Macquarie, BOQ.


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## Julia (29 May 2013)

Here is the news release re the above:
http://www.asic.gov.au/asic/asic.ns...s in Storm Financial proceedings?opendocument


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## Solly (30 May 2013)

Here is a good summary from The Australian regarding yesterday's event.

ASIC settles $1.1m Storm Financial case for couple 
http://www.theaustralian.com.au/bus...7292cffa08871da1a4b39d7c#.UaZwTYTLBJI.twitter

There are still some very interesting times ahead.


----------



## Skybeau (2 June 2013)

My first post on this site, but the Storm thread is what I am interested in due to the fact I am a former Storm client.
I am quite surprised things are a little quiet in here considering the latest developments the last few days?


----------



## Julia (2 June 2013)

Skybeau said:


> My first post on this site, but the Storm thread is what I am interested in due to the fact I am a former Storm client.
> I am quite surprised things are a little quiet in here considering the latest developments the last few days?



Well, perhaps you'd be good enough to inform us what we've missed?


----------



## Skybeau (2 June 2013)

Julia, I am not saying anyone has missed anything, I just thought there would be a little more discussion considering the link Solly has provided a few posts above.


----------



## bunyip (2 June 2013)

Skybeau said:


> My first post on this site, but the Storm thread is what I am interested in due to the fact I am a former Storm client.
> I am quite surprised things are a little quiet in here considering the latest developments the last few days?




It only takes a comment or two to get a discussion rolling, Skybeau. 
Feel free to lead the way – is there some comment you’d like to make in relation to the latest developments in the Storm saga?


----------



## Skybeau (2 June 2013)

Sure Bunyip, here is a question. 
Why do you think Levitt Robinson have come up with a deal with Macquarie Bank for 42% (ASIC are appealing) for paying class action members and 17% for non paying members? I find this quite odd considering Levitt arranged a deal with the Commonwealth Bank for 55% for class action members. I am just curious to hear what people think.
By the way, I am not a member of the class action group.


----------



## bunyip (3 June 2013)

Skybeau said:


> Sure Bunyip, here is a question.
> Why do you think Levitt Robinson have come up with a deal with Macquarie Bank for 42% (ASIC are appealing) for paying class action members and 17% for non paying members? I find this quite odd considering Levitt arranged a deal with the Commonwealth Bank for 55% for class action members. I am just curious to hear what people think.
> By the way, I am not a member of the class action group.




I really have no idea – it doesn’t interest me enough to even form an opinion. Have you attempted to clarify the matter by contacting Levitt Robinson?


----------



## maccka (6 June 2013)

Skybeau said:


> Sure Bunyip, here is a question.
> Why do you think Levitt Robinson have come up with a deal with Macquarie Bank for 42% (ASIC are appealing) for paying class action members and 17% for non paying members? I find this quite odd considering Levitt arranged a deal with the Commonwealth Bank for 55% for class action members. I am just curious to hear what people think.
> By the way, I am not a member of the class action group.




I think it's pretty simple to answer the first part of your question Skybeau.  42% goes to paying class action members because they paid to fund the legal action.  They acted as fund litigators who would normally claim a large portion of any settlements.

Cheers
Maccka


----------



## joku (6 June 2013)

Skybeau said:


> I am quite surprised things are a little quiet in here considering the latest developments the last few days?




Most people here aren't Storm investors and the current legal proceedings are fairly boring for anyone without vested interest. Law doesn't get most people off and really there's not much to learn except the extent at which those well capitalized can be hit disproportional to their true blame and how easily crooks tend to get off but that's nothing new to see. If you conclude guilt proportional to the dollar values extracted from the banks in these legal proceedings you need your head checked IMHO. Unfortunately that is largely what I am seeing occur among ex Storm clients, forever helped along by what remains of the Storm marketing machine that are all too happy to take you on in their new financial advice ventures. This thread will fire up if and when Storm directors actually get some of what should be coming for them. Personally I'm not holding my breath though.


----------



## Solly (29 June 2013)

> *"THE former heads of failed Storm Financial will go to trial after a Federal Court judge in Brisbane on Friday dismissed their bid for a summary judgment to have the entire case thrown out."*




More by Anthony Marx here http://shar.es/xNvaL

Also  http://buff.ly/12regUa

and   http://buff.ly/12rewCA

And are reminder that this is a Civil case. 

Here is the response from ASIC  http://buff.ly/12rf9w1

I look forward to this trial.


----------



## DocK (29 June 2013)

Solly said:


> I look forward to this trial.




I am quite sure you're not alone there, Solly!  I hope they get at least a fraction of what they deserve :behead:


----------



## Solly (29 June 2013)

DocK said:


> I am quite sure you're not alone there, Solly!  I hope they get at least a fraction of what they deserve :behead:




DocK I find these words from @couriermail and The Hon. Justice J Reeves rather interesting. 



> Justice Reeves said the Cassimatises had failed to persuade him "that ASIC does not have reasonable prospects of successfully prosecuting these proceedings.''




source: http://shar.es/xNvaL


----------



## bunyip (2 July 2013)

DocK said:


> I am quite sure you're not alone there, Solly!  I hope they get at least a fraction of what they deserve :behead:





I hope they get _*all*_ of what they deserve, which in my opinion  is serious jail time and a lifetime ban from ever again giving investment advice. 
The heat went off them there for a while, and was redirected at the banks because they have the deepest pockets. But it's the Storm mob who are the true culprits in the pitiful debacle that was Storm Financial.


----------



## basilio (2 July 2013)

It would be great to see some serious justice delivered to the Storm Financial Group schemers.

But if so where would that leave the CBA financial planners who also systematically cleaned out their clients in pursuit of extra fees, bonuses and profits ?  I found that story equally breathtaking .

Anyone here on the receiving end of their advice ?

http://www.theage.com.au/business/b...nside-the-cba-boiler-room-20130621-2oo9w.html


----------



## DocK (4 July 2013)

basilio said:


> It would be great to see some serious justice delivered to the Storm Financial Group schemers.
> 
> But if so where would that leave the CBA financial planners who also systematically cleaned out their clients in pursuit of extra fees, bonuses and profits ?  I found that story equally breathtaking .
> 
> ...




A very interesting article, basilio.  Even as I was reading of the "sales at all costs" culture rampant at the time, the forgeries, lost files, lack of ethics and the fleecing of the elderly in order to reach a sales target - I was hoping that some of those people in the community who were reluctant to believe that the CBA would stoop to such behaviour in their lending departments in relation to the Storm matter would read the article.  







> It was the ''sales at all costs'' culture insiders and former staff close to the situation believe was the cause of the problem at CBA. They warn that FOFA will deal with hidden fees and disclosure but it won't change the quest to drive sales.
> 
> Geoff Derrick, national assistant secretary at the Finance Sector Union, said FOFA was a step forward but continuing dependence on commission-based remuneration and sales targets meant banking culture remains ''a numbers game''.
> 
> ...


----------



## Garpal Gumnut (10 July 2013)

As I said when I presaged this loss of battlers investments. 

Going back to my first post

The winners will be ::

Lawyers

Lucky investors with a paper trail

The Banks

Financial Planners

Lawyers.

Prove me wrong.

Anyone on ASF who has a Financial Planner is a muppet.

gg


----------



## Solly (16 July 2013)

> *Storm claim unfair and baseless: CBA*
> 
> Commonwealth Bank (CBA) has strongly reacted to the news that Storm Financial victims' lawyer will start legal proceedings against the $136 million settlement that the bank reached with the Australian Securities and Investments Commission (ASIC) last year.





Source: http://www.financialstandard.com.au/news/view/33335299


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## bunyip (19 July 2013)

Solly said:


> Source: http://www.financialstandard.com.au/news/view/33335299





It's now almost six years since Storm and their clients bit the dust - I wonder how much longer the lawyers will keep playing this thing along.
Seems to me like the legal eagles see the Storm debacle as a nice little cash cow to be milked for all it's worth.


----------



## maccka (2 August 2013)

bunyip said:


> It's now almost six years since Storm and their clients bit the dust




While it feels like a lifetime, I'm pretty sure it less than 5 years.

cheers
Maccka


----------



## Garpal Gumnut (2 August 2013)

maccka said:


> While it feels like a lifetime, I'm pretty sure it less than 5 years.
> 
> cheers
> Maccka




My first post was 31 Oct 2008.

It all blew up shortly after that.

Just on 5 years ago, close to Xmas from memory.

gg


----------



## bunyip (5 August 2013)

maccka said:


> While it feels like a lifetime, I'm pretty sure it less than 5 years.
> 
> cheers
> Maccka




You’re probably right there Maccka, although it does seem longer.
How ever long it is, who would have thought that the legal battles would still be going on today. I always knew it would be a drawn out affair, but I thought it would be over before this. Some people didn’t even think it would get to court at all, as the following link shows.
http://www.couriermail.com.au/news/...eye-of-the-storm/story-e6frep2o-1225945522770

Anyway, it’s been a nice little cash cow for the lawyers who, as law firms do, are playing it out as long as they can. I wonder when the final resolution will be.


----------



## Frank Ainslie (5 August 2013)

Does anyone know what ASIC stands for? "*A* *S*YSTEM *I*N *C*RISIS!"

Bernie Ripoll, the Chairman of the Parliamentary Joint-Committee, once said when referring to the people that used the services of Storm Financial, _“A fool and his money are soon parted!”_ What he meant by this is that he was of the belief that people should know what they are doing before they invested. I couldn't agree more! That’s why we sought professional advice from Storm Financial because we thought that financial advisory firm knew what it was doing! That seemed the prudent thing to do at the time! 

Mr. Bernie Ripoll’s words would also seem to suggest that Storm Financial’s investment plan was an obvious swindle that anyone with an ounce of sense could see through. My question to Mr. Ripoll is this, _“If this were so, why did ASIC fail to identify the apparent flaws in Storm’s business model?” _After all, ASIC had been overseeing Storm’s operations for years, and not only did it give it a _“clean bill of health”_ but actually endorse the way Storm operated. How bigger fool is ASIC then?

Where Storm was concerned, investors were soon parted from their money because a fool of a man was in charge of the cash box, and the people that should have made sure they knew what he was doing were looking the other way. ASIC and this government, of which Mr. Ripoll is a part (for now), spring readily to mind.  

In my submission to the Senate Inquiry (see 'Submission to the Senate Inquiry into ASIC'.doc)
https://sites.google.com/site/stormingonbanks/asic
I have outlined my reasons why I believe ASIC caused the Storm Financial disaster in the first place by its failure to act responsibly in its past dealings with Storm. Further, that since the end of 2008 ASIC has been more interested in covering up its part in what occurred than it is in protecting the interests of those that suffered as a consequence. 

Investors in Australia need to be protected from the excesses that take place in the financial sector that have a devastating impact on peoples’ lives. They need to be protected from those people that take advantage of the loopholes that still exist in the regulations, and ASIC is incapable of doing this. If something is not done to rectify this situation, people will continue to suffer at the hands of financial piranhas. 

In my submission, I have raised some important questions that this Senate Inquiry should be asking ASIC to answer. Here are some extracts:

*QUESTION: Why didn’t ASIC do something about the way Storm operated before its collapse? *
_“…following the meeting on *13 November 2007*, ASIC was satisfied that Storm’s prospectus accurately set out the material elements of its business model. In addition, Ms Koromilas from ASIC, informed Storm that ASIC wished other advisors had procedures and processes that were as good as Storm’s”_

*QUESTION: Why were those bank executives that lied before the Parliamentary Joint-Commission never taken to task?*
BANK OF QUEENSLAND
_Mr ROBERT - “That's the model. 'We will take money from clients, we will leverage the absolute guts out of it, then we'll leverage the unrealised gain out of it. We will give everyone the same advice. ' That is their model-just use that term.” 
Mr Kangatharan - “There is no way we could actually become aware of that, based on…” 
Mr ROBERT - “I did not ask that; I just asked when you became aware of it.” 
Mr Kangatharan - “I think with everyone else, in the papers.” 
Mr Liddy - “I think when Storm collapsed.”_ [PJ-C hearings]
Bruce Auty, (Bank of Queensland's group executive for group risk), told the Storm Financial public examination in the Federal Court in Brisbane that, one of his staff called for a review of loan approvals at the bank's North Ward branch, managed by Matthew Buchanan. But two formal reviews and another three informal inquiries failed to change the way BOQ's North Ward branch operated. The first review in *September 2006* concluded that incomes of Storm investors were routinely overstated…”

*QUESTION: Why did ASIC permit Storm to have inadequate “Professional Indemnity Insurance?”*
In ASIC’s letter to me dated 13/2/2012 it states, _“The arrangements that have been set in place by regulations are that licensees that provide financial services to retail clients must hold professional indemnity (PI) insurance cover that is adequate. Adequacy is measured with regard to factors such as the size of the licensee's business (reg 7.6.02AAA).” _

In my reply, I said, _“The first thing to consider, and it should be an object lesson for all, is that when a scenario such as Storm Financial occurs, it is impossible for claimants to lodge claims until wrong doings are identified which makes a nonsense of PI insurance such as that held by Storm. Not making it compulsory still for financial advisers to hold “run-off” insurance leaves a glaring hole through which more investors will continue to fall like those before them.  Further, it brings into question the value of PI insurance in its current form as an effective security device for anyone that is seeking to invest using financial advisers when so doing. This loophole has not been addressed under the new regulations, which means that lessons still have not been learnt.” _

*QUESTION: Why did ASIC not charge the CBA with (1) breach of contract, (2) unconscionable conduct, and (3) linked credit provider of Storm under section 73 of the Trade Practices Act 1974? *
The BOQ and the MBL were charged by ASIC with such so why was the CBA (the worst offender) not so charged?
Mr Bailey, based in Sydney with a Master's Degree in Business Administration, *was Head of Credit and Market Risk in CBA between mid-2002 and mid-2004*. He had been overseeing the  implementation of CALIA, at CBA, a single credit assessment process devised for home investment loans and margin loans, in use at the bank from at least June, 2002. 
Recalling his meeting with Julia and Emmanuel Cassimatis, Ian Bailey says he asked them, ‘But when the market goes down, what happens then?' and I was somewhat taken aback by the answer, 'Oh, it's a great time to buy'. That's when I started to think, 'Ok, these are not the sort of people that I am comfortable with, in terms of risk management. I continued: 'Hang on!’. The market has taken a big fall. You now have a margin call. What do you do now?' The answer was, 'You buy more shares.' My brain was going, ‘Great! Where do you get the money from? This doesn't make sense. You should actually be going in the opposite direction, and these guys are saying, 'Charge!'".

*QUESTION: Why did ASIC only seek from the MBL and the BOQ compensation for the “Doyles” and not for the rest of the Storm investors who took out loans with these Banks?*
_“At its meeting on 24 November 2010 …the Commission (ASIC) also decided that it would commence compensation proceedings against parties including the Commonwealth Bank of Australia (“CBA”), Bank of Queensland Limited (“BoQ”) and Macquarie Bank Limited (“MBL”) seeking compensation for investors arising out of the collapse of Storm. The compensation proceedings were not filed immediately, in order to allow a short further period for the commercial resolution discussions to continue. _
NB: The above statement says, _“…seeking compensation for investors arising out of the collapse of Storm.” It doesn’t state that these proceedings were exclusively for the “Doyles” _but rather for all the investors concerned. Yet, those Storm investors who were with the BOQ and the MBL have now been waiting four years for ASIC to do something on their behalf! If ASIC believes that nearly three years from the above date is “a short further period” then I would suggest that ASIC’s thinking is seriously defective.”

*QUESTION:  WHY HAS IT TAKEN ASIC SO LONG TO GET THE CASSIMATIS INTO COURT?*
Could it be that their evidence would further illustrate ASIC’s central role in causing this financial catastrophe, and it wasn’t in ASIC’s best interest to have them appear first?

ASIC’s part in the Storm Financial affair has raised more questions than answers. It’s time those that lost their life savings by investing using the services of Storm Financial had closure. It’s time ASIC came clean!


----------



## Harleyquin (5 August 2013)

And why is ASIC taking the stormies who funded the Macquarie fight to court objecting to them receiving a higher percentage as Litigation Funders???  ASIC took Mac to court last year and we are still waiting for an outcome.  

Has ASIC ever taken another Litigation Funder/s to court ... No ... And one has to ask WHY / WHY NOW???

It will be 5 years at the tail end of 2013 Bunyip but feels more like 60 years due to ASICs continued incompetence.

Great post Frank.


----------



## Judd (6 August 2013)

Harleyquin said:


> And why is ASIC taking the stormies who funded the Macquarie fight to court objecting to them receiving a higher percentage as Litigation Funders???  ASIC took Mac to court last year and we are still waiting for an outcome.
> 
> Has ASIC ever taken another Litigation Funder/s to court ... No ... And one has to ask WHY / WHY NOW???
> 
> ...




Legal niceties and nitpicking I'm afraid, Harleyquin.  As for the impact on those affected?  Mere collateral damage.


----------



## Solly (6 August 2013)

> *ASIC’s Storm Financial intervention prompts outcry from lawyers*
> 
> A recent Storm Financial settlement caused quite a bit of controversy and resulted in an appeal from the regulator. Milana Pokrajac finds many in the legal community deem the regulator’s intervention unwarranted and unnecessary.




Source: http://www.moneymanagement.com.au/a...c-storm-financial-intervention-outcry-lawyers


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## Frank Ainslie (9 August 2013)

Solly said:


> Source: http://www.moneymanagement.com.au/a...c-storm-financial-intervention-outcry-lawyers




Hi Solly,

The truth of the matter is that both the CBA and the Macquarie settlements are basically unfair because they only provide for partial compensation.

Consider the facts:
ASIC did not act to protect us in the first place, 
Storm gave misleading and deceptive advice which violated sections of  the Corporations Act 
the Banks involved ignored their contractual obligations to their Storm customers 
and the Banks lent imprudently which breached their banking codes.

Therefore, the compensation should be commiserate with the extent of the wrongdoings and those responsible should be punished. Just giving back part of the loot and giving the banks a slap on the wrist is hardly my idea of justice.


----------



## Ironhalo (10 August 2013)

Frank Ainslie said:


> Just giving back part of the loot and giving the banks a slap on the wrist is hardly my idea of justice.




Noting that we (and I say we, I was invested in Storm as well) shouldered our share of the risk, and didn't complain when the profits were rolling in, I say partial compensation was more than fair. I am happy with what I got back.


----------



## Frank Ainslie (12 August 2013)

Ironhalo said:


> Noting that we (and I say we, I was invested in Storm as well) shouldered our share of the risk, and didn't complain when the profits were rolling in, I say partial compensation was more than fair. I am happy with what I got back.




This wasn't about accepting risk. This was about fraud!

Mr. Stuart Drummond, our Storm financial adviser, was banned by ASIC because he deliberately misled us and in doing so violated sections of the Corporations Act: 
_“11-32AD ASIC bans former Storm Financial adviser Thursday 24 February 2011
A former authorised representative of Storm Financial Ltd has been banned from providing financial services for four years after an ASIC investigation found he made false and misleading statements and provided inappropriate advice to a number of his clients. 
Mr Stuart Craig Drummond, of Clayfield in Brisbane, Queensland, was employed as an authorised representative of Storm Financial Ltd and its predecessor, Ozdaq Securities Pty Ltd, between 31 May 2004 and 18 June 2009. 
ASIC’s investigation found that Mr Drummond failed to comply with financial services laws in relation to advice he provided to a number of his clients between October 2004 and July 2008. In particular, ASIC found Mr Drummond:
 §	made false and misleading statements in breach of s1041E of the Corporations Act 2001,
 §	engaged in misleading and deceptive conduct under s1041H of the Corporations Act 2001,
 §	promoted the Storm strategy without considering the suitability of the strategy for individual clients,
 §	provided Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, and
 §	didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.”_

If you believe that partial compensation is fair in the circumstances, I would ask you to study the law in this regard.
Don't bother! I'll quote it for you:
Fraud
Definition	- Noun
[Latin fraud- fraus]
1 a  : any act, expression, omission, or concealment calculated to deceive another to his or her disadvantage 
specif 
: a misrepresentation or concealment with reference to some fact material to a transaction that is made with knowledge of its falsity or in reckless disregard of its truth or falsity and with the intent to deceive another and that is reasonably relied on by the other who is injured thereby 
b  : the affirmative defense of having acted in response to a fraud 
2  : the crime or tort of committing fraud <convicted of securities ~> 
see also misrepresentation 

A tort action based on fraud is also referred to as an action of deceit. 

Need I go on? If you are happy with your lot, good on you! I'm not and I believe I have a good reason for feeling as I do!


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## Ironhalo (12 August 2013)

He didn't mislead you. I have the same paperwork that you do, and it details very clearly that investing in shares is a risky practice...even if that risk is only 1%, we copped the 1%.

You are not going to get all your money back + extra, no matter what rationale you try and espouse my friend. I suggest you divert your energy into enjoying the rest of your life, the Storm is over; and as GG has said numerous times now, the only winners from here on in are the lawyers. 

Getting half your money back is actually a blessing.


----------



## DocK (13 August 2013)

> Macquarie and Storm victims settlement "wrong": Court





> Levitt Robinson estimated that under the settlement, around 315 investors who funded the class action would have been reimbursed their legal costs and also compensated for approximately 42% of their losses.
> 
> At the same time, around 735 Macquarie borrowers would only get back about 18% of their losses.
> 
> ...




http://www.financialstandard.com.au/news/view/33869542


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## Judd (13 August 2013)

Oh dear, more angst with 315 probably sad and 735 probably happy.  Litigation; nasty stuff and you can never be certain of the final outcome.


----------



## bunyip (13 August 2013)

Ironhalo said:


> He didn't mislead you. I have the same paperwork that you do, and it details very clearly that investing in shares is a risky practice...even if that risk is only 1%, we copped the 1%.
> 
> You are not going to get all your money back + extra, no matter what rationale you try and espouse my friend. I suggest you divert your energy into enjoying the rest of your life, the Storm is over; and as GG has said numerous times now, the only winners from here on in are the lawyers.
> 
> Getting half your money back is actually a blessing.




Good advice, Ironhalo.

It’s been interesting to observe the different reactions of people affected by the Storm debacle. 
Some of them have the character to accept that they themselves are among the many people who stuffed up. From my observation of the comments on here, these people are grateful for whatever compensation they can get, and are moving on and making the most of their lives. 

Then there’s the other type of person who accepts no responsibility for their actions, but is intent on shoveling all the blame on to anyone within reach. This type of person tears him/herself apart by constantly fuming about a situation that was partly of their own making. I almost feel sorry for them – it can’t be much fun living life in constant anger, frustration, and resentment. 
Maybe some professional counseling would help them to come to terms with their situation and allow them to live happier lives.


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## Ironhalo (13 August 2013)

That's it mate. While the banks did play a part, their role wasn't 100% for blame. I should have rang the bank myself and converted to cash/made the margin call payment before it went too far. As it was, I did manage to avoid quite a large amount of hurt by doing that same thing after I realised that the clowns at Storm probably didn't care about my little investment when their jobs and larger clients were getting savaged. That's not how it should work, but that's what it was.

Getting half my cash back was considered a good deal, and I certainly am equipped now to not repeat my same mistakes again.


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## bunyip (13 August 2013)

Frank Ainslie said:


> The truth of the matter is that both the CBA and the Macquarie settlements are basically unfair because they only provide for partial compensation.








Frank Ainslie said:


> Just giving back part of the loot and giving the banks a slap on the wrist is hardly my idea of justice.




Frank – I wonder if you could clarify a couple of points for me?

Do you believe that you should get back every single dollar you lost by acting on the investment advice of Storm Financial?

And if you don’t believe you should get back 100% of your losses, then what percentage do you think you should get back?


----------



## Judd (13 August 2013)

Federal Court of Australia decision in relation to Storm.

The transcript of the Full Court's decision is below.

http://www.austlii.edu.au/cgi-bin/s...ml?stem=0&synonyms=0&query="Storm Financial "


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## Ironhalo (13 August 2013)

Just found this useful timeline detailing events as they stand:
http://www.moneymanagement.com.au/a...c-storm-financial-intervention-outcry-lawyers

And this just in today:
http://www.moneymanagement.com.au/news/financial-planning/2013/asic-wins-appeal-in-storm-settlement


----------



## DocK (13 August 2013)

Judd said:


> Federal Court of Australia decision in relation to Storm.
> 
> The transcript of the Full Court's decision is below.
> 
> http://www.austlii.edu.au/cgi-bin/s...ml?stem=0&synonyms=0&query="Storm Financial "




Well that made for interesting reading.....  I especially liked this part of the ruling:



> The fourth difficulty with the Funders’ Premium was that it was payable to Funding Group Members. The Settlement Distribution Scheme defined that as “group members who were clients of Levitt Robinson as at 15 March 2013 who contribute to the funding of the Class Action up to the date of the Approval”: see [29] above. As noted earlier, it included any group member who was a client of Levitt Robinson who made a contribution of at least $500 so long as they were a client of Levitt Robinson prior to the date the Settlement was approved. *As a result, 13 clients of Levitt Robinson became Funding Group Members even though they did not contribute $500 until after the settlement was reached. That step, of itself, was not fair or reasonable. It was not fair or reasonable because none of the group members who were not clients of Levitt Robinson were afforded the same opportunity to participate at such a late stage for as little as $500. Why should those 13 Levitt Robinson clients be afforded that opportunity at the expense of the Unrepresented Group Members? The answer is they should not.* The matter may be tested this way – if there had been a prospect of a premium as a reward for funding the litigation, some of the Unrepresented Group Members may well have decided to fund the litigation. Indeed, it is likely that there may have been a rush of Unrepresented Group Members if they had been given the same opportunity at that time. They were not given that choice. The terms of the distribution of the Settlement Pool should not prejudice the Unrepresented Group Members for having made an informed decision on one basis which the Funding Group Members now seek to change to their advantage but to the disadvantage of the Unrepresented Group Members. That is neither fair nor reasonable.


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## bunyip (14 August 2013)

Ironhalo said:


> He didn't mislead you. I have the same paperwork that you do, and it details very clearly that investing in shares is a risky practice...even if that risk is only 1%, we copped the 1%.




Ironhalo

According to your paperwork, which is the same paperwork that every Storm investor was given, Storm stated very clearly that investing in shares is a risky practice.

A couple of Storm victims have said on here that Storm told them it was a safe and conservative strategy. One or two others have said they asked Storm for a ‘no-risk’ investment, and Storm assured them that this is what they’d be getting. (I still find it incredible that anyone could believe there is a such a thing as a risk-free investment – the only way that could happen is if the investment was guaranteed to rise in value, and never to fall, which of course is impossible)

Does any part of your paperwork state that the Storm strategy was ‘no risk’, or that it was safe and conservative?


----------



## Solly (16 August 2013)

An interesting view from King & Wood Mallesons' 
Moira Saville and Alexander Morris.

*Premium to funding group members causes Storm Financial class action settlement to fail*

Source http://www.lexology.com/library/detail.aspx?g=33045752-27ed-4d78-b35f-9f9e4d8ec70b


----------



## Ironhalo (17 August 2013)

bunyip said:


> Does any part of your paperwork state that the Storm strategy was ‘no risk’, or that it was safe and conservative?




While they certainly pushed that their model was 'safe' (I remember our advisor telling us comprehensively that if Storm went belly up for any reason, our funds would be safe as they were invested in Macquarie Index Funds etc....which he was correct about to a degree), as soon as shares are involved, you know that wasn't always going to be the case. I was lucky in that I only lost money that I had originally ponied up and a rather modest margin loan that was very low in terms of risk/LVR; I hadn't leveraged against property etc. 

But in saying that, the fact that investing in share was a risky practice was in the first few pages of our financial plan. They made sure they covered themselves in that regard. 

I do feel sorry for those older clients who seemed to think they were privy to some magic 30% p.a. wealth creation cult, but people really needed to take more of an active interest in their own finances; especially in regards to the fact that in many cases, 7 figure debts were involved.


----------



## bunyip (20 August 2013)

Ever since this thread began we’ve seen a small handful of Storm investors making such claims as........

_* We weren’t sophisticated investors – we couldn’t be expected to spot the risk in the Storm strategy.
* If ASIC couldn’t spot the risk, what chance did we have of seeing it.
* Even sophisticated investors couldn’t have spotted the risk.
* We were lied to – Storm told us their strategy was safe._

And now, thanks to Ironhalo’s posts, we see that _*Storm investors didn’t have to spot the risk for themselves – Storm Financial spotted the risk for them, then told them about it by stating clearly in their paperwork that share investment is risky.*_
Despite having been told that share investment is risky, these investors were still willing to mortgage their homes to raise big loans to sink into this risky investment, then use double gearing to invest even more heavily, and to pour all their own savings and super into this risky investment as well.
Then when the market collapses and their risky investment caves in, they deny all responsibility for their actions, and they complain about only getting half their money back!
Not only that, but they attack and ridicule the government for allowing this to happen, they attack and ridicule all financial planners even though most of them would never have condoned the Storm model, they attack the banks for giving them the loans they applied for, and they accuse the banks of corporate bastardy for wanting their loans repaid.

Now to be fair, some Storm investors have copped it on the chin by admitting they are responsible for the choices they made of their own free will, and the unfortunate outcomes that resulted from those choices.

But there still seems to be that hard core of Stormers who are determined to blame everyone but themselves as they whine and moan about the perceived injustice of it all.


----------



## Judd (20 August 2013)

Aww, man, no need to rub peoples' noses in it.  Unnecessary.


----------



## bunyip (20 August 2013)

Judd said:


> Aww, man, no need to rub peoples' noses in it.  Unnecessary.



Perhaps so, Judd. But also unnecessary are the posts a few days ago from a Storm investor who complained about having been treated unjustly by being granted only partial recovery of his losses.

As long as he or anyone else continues with this bull, I’ll continue to point out the realities that he chooses to ignore.


----------



## Harleyquin (23 August 2013)

Anyone can 'claim' to be storm affected on this site, and some of the more recent posts fall into this rather doubtful category..

Clients of any financial planner are a diverse lot who range from the highly knowledgeable to the highly unknowledgeable.  It is impossible to characterise a 'typical' storm investor.


----------



## bunyip (23 August 2013)

Harleyquin said:


> Anyone can 'claim' to be storm affected on this site, and some of the more recent posts fall into this rather doubtful category..



Please name the person or post/s you're referring to.



Harleyquin said:


> Clients of any financial planner are a diverse lot who range from the highly knowledgeable to the highly unknowledgeable.  It is impossible to characterise a 'typical' storm investor.




Yes, Storm investors are no doubt a diverse lot. But one thing they all appear to have in common is that they risked borrowed money in an investment which they were clearly told was risky.


----------



## Solly (15 September 2013)

> *Storm founders make bid to have ASIC claims dismissed*
> 
> Justice John Reeves has reserved his decision in the matter with a date yet to be finalised.





Source: http://www.abc.net.au/news/2013-09-...bid-to-have-asic-claims/4950484?&section=news


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## Grey Ghost (23 September 2013)

This will be a test of the justice system.

The fact that the judge didn't throw out the application straight away is a concern.


----------



## Judd (23 September 2013)

Grey Ghost said:


> This will be a test of the justice system.
> 
> The fact that the judge didn't throw out the application straight away is a concern.




Not sure why it is considered to be a test of the justice system.  The judiciary tend to decide on matters according to law and not perceptions of what the outcome should be.


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## Grey Ghost (24 September 2013)

What I meant was that ASIC should be entitled to have their case against the cassimatis' heard.

ASIC obviously think they have some things to answer for.

I'm not trying to pre-empt what the outcome may or should be I just feel that the matter should be heard.

I also think there will be quite a few other people with a relevant interest in these proceedings should they go ahead although I realise the court  can't take that into account in deciding what to do.  

Just my two cents worth.


----------



## DocK (24 September 2013)

Is anyone able to let me know what the current situation is re the Macquarie Bank  settlement process?


----------



## doobsy (25 September 2013)

DocK said:


> Is anyone able to let me know what the current situation is re the Macquarie Bank  settlement process?




Dock

Last I heard they were still looking at it. I spoke with the general line at ASIC and they could give me no more than the ASIC Storm Website information. I emailed a couple of months ago asking if it would be applied across all clients after the doyle decision and have received nothing back at this stage.

I also spoke with a contact at Macquarie and he was unaware of any new information regarding a payout at this point in time.

I think investors won't see anything for a little while yet mostly because each situation is so different.


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## DocK (25 September 2013)

doobsy said:


> Dock
> 
> Last I heard they were still looking at it. I spoke with the general line at ASIC and they could give me no more than the ASIC Storm Website information. I emailed a couple of months ago asking if it would be applied across all clients after the doyle decision and have received nothing back at this stage.
> 
> ...




Thank you Doobsy


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## Judd (26 September 2013)

Grey Ghost said:


> What I meant was that ASIC should be entitled to have their case against the cassimatis' heard.
> 
> ASIC obviously think they have some things to answer for.
> 
> ...





Apologies.  I completely misinterpreted your previous post.

Yeah, probably a lot would like to see the ASIC case proceed.  However, as you are likely to know, the law allows the other [aka dark] side to take alternative action.  It's the best we got.

It is a weird thing with litigation and stuff like that.  When looking at the outcomes of case law, I noticed that it was almost a 50/50 split for those who commenced the legal challenges.  One of the reasons why I become a tad surprised that the apparent enthusiasm displayed by participants in class actions.  Oh well, at least I am only involved in watching events unfold.


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## Ironhalo (28 September 2013)

Harleyquin said:


> Anyone can 'claim' to be storm affected on this site, and some of the more recent posts fall into this rather doubtful category..




I might be wrong here, but if you are inferring I am lying, I can assure you you'd be wrong.

My family got smashed by Storm, and my mother is still working now to repay the $140k she lost. I can assure you I'm not making anything up.


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## Harleyquin (8 October 2013)

I have no interest in referring specifically to anyone in my previous comments Ironhalo. 

You say you were a Stormie and I have no reason not to believe you. 

I do believe though that anyone can claim to be storm affected on a forum such as this and we have no way of knowing whether it's true or not. It's a generic statement and one which is quite true in my humble opinion.


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## Garpal Gumnut (15 October 2013)

As it is now 5 years less just over 2 weeks since I started this thread, may I ask someone to bring us up to speed with where Investors, Storm identities, the Banks, ASIC and Judicial Proceedings, now sit.

The investigation and proceedings of this rampant destruction of people's savings, as I indicated years ago would drag on, and on and on.

Has there been any justice or finality for the Investors, or any decisions made as to where the fault or faults lay.

How much money have the lawyers and accountants made out of the distress cause as opposed to monies returned to Investors?

gg


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## Harleyquin (15 October 2013)

I know a number of Stormies and don't know of anyone who has received any financial compensation.

After 5 years of discussion / argument etc on this thread and in the media generally we are all still waiting.

There is one thing however which I now believe:

ASIC could and should have prevented this occurring

All of the Banks were aware of Storms agenda and 'created' the problem by financing it to the level they did

Then there's Storm!!!!???

Then there's us, the suckers, who believed that we could trust ASIC, the major banks and a FPA approved financial planner.

The majority of legal eagles and politicians have contributed to the problems by ignoring them.

So much for seeking financial security with the help of a 'professional'

We are now on a pension as our health has suffered far too much to work and you my fellow Aussies are paying, and will continue to pay our living expenses for the rest of our life...and we haven't as yet reached retirement age.

Thank you ASIC, The Banks, Storm, FPA ... For nothing.
:1zhelp:


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## pilots (16 October 2013)

Garpal Gumnut said:


> As it is now 5 years less just over 2 weeks since I started this thread, may I ask someone to bring us up to speed with where Investors, Storm identities, the Banks, ASIC and Judicial Proceedings, now sit.
> 
> The investigation and proceedings of this rampant destruction of people's savings, as I indicated years ago would drag on, and on and on.
> 
> ...




Once again the lawyers walk away with the money, the suckers who lost on this one was sucked in by the lawyers again.


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## Judd (16 October 2013)

pilots said:


> Once again the lawyers walk away with the money, the suckers who lost on this one was sucked in by the lawyers again.




It does appear that way, pilots.  It is only a gut feeling I have that most of these cases are settled out of court because the lawyers:


have in the back of their mind that the costs are going up the longer it goes on and so their proportion of their profit from the 30% success fee is reducing; while at the same time they,


are never too sure whether or not they will have a judgement handed down in their favour.

Whatever, but the clients never appear to be the winners.  Just look at the outcome for Great Southern.  Those clients still owe the banks some $450m I understand.


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## bunyip (18 October 2013)

Harleyquin said:


> I do believe though that anyone can claim to be storm affected on a forum such as this and we have no way of knowing whether it's true or not. It's a generic statement and one which is quite true in my humble opinion.



Why would anyone claim to be 'Storm affected' if in fact they were not?




Harleyquin said:


> ASIC could and should have prevented this occurring
> 
> All of the Banks were aware of Storms agenda and 'created' the problem by financing it to the level they did
> 
> ...




As usual usual you’re blaming the banks and ASIC and the FPA but taking no responsibility for your own actions. Certainly ASIC failed Storm investors – nothing new there – their publicly documented record of failing people dates back to long before the Storm debacle.

Ironhalo has told us that his Storm paperwork details very clearly that investing in shares is a risky practice. Yet Storm reportedly sold their strategy as ‘safe and conservative’.
So on the one hand they’re warning you that share market investment is risky, and on the other hand they’re telling you it’s safe and conservative to mortgage your home to raise substantial loans to add to your personal savings, and then sink the whole lot into an investment that they’ve already described as risky. Not only that, but the next part of their advice was to use double gearing to load up even further in this risky investment. 

Didn’t the obvious contradiction give you cause to doubt that Storm were on the level? How could it possibly have been safe and conservative to invest a lot of money, much of it borrowed, in an investment that Storm described as risky?
Most people would have run a mile if someone tried to ‘put one over them’ like that. In fact most people who approached Storm did ‘run a mile’ after hearing Storm’s proposal.


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## Solly (19 October 2013)

*An update re : Civil penalty proceedings against the Cassimatises*

4 October 2013

The Federal Court today ruled on a strike out application of ASIC’s statement of claim in its civil penalty proceedings against Storm Financial founders Emmanuel and Julie Cassimatis, following the hearing of the application by Justice Reeves on 10 September 2013.

The Cassimatises were unsuccessful in their application to have the statement of claim struck out. However, the court did make orders *that ASIC either re-plead some parts and provide further particulars of some parts of its statement of claim.*

Source: https://storm.asic.gov.au/storm/sto...simatis civil penalty proceeding?opendocument

These orders are of interest.


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## Ijustnewit (19 October 2013)

Harleyquin said:


> I know a number of Stormies and don't know of anyone who has received any financial compensation.
> 
> After 5 years of discussion / argument etc on this thread and in the media generally we are all still waiting.
> 
> ...




It's interesting that you state that you know no person that has received financial compensation ? Can I ask what about the couple of hundred people plus that have received some compensation from the Commonwealth bank and other banks that have followed the Commonwealth's lead ? As far as I know only one bank the Bank of Qld has not offered some sort of compensation to the Storm clients.
Of course there are still a hand full of Storm clients out there that think they will get 100 % of their losses back and refuse to accept any less and move on in their lives to a more happy place. Look I still know people that can't get their head around the compensation deal , they still think they should get all the money they borrowed as well as their initial investment dollars all back.  I guess that's the choice of those people to fight this to the bitter end regardless of the price they are paying on their health.


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## Judd (20 October 2013)

I know it is probably my warped thinking, but sometimes I get the impression that a view developed in a few of Storm's former client base that when investing in the share market you cannot lose but you are not allowed to lose.

Never was the situation, is not the situation and never will be the situation in my opinion.

As an aside, investing is an exercise in self-interest.  We do it to improve or at least maintain our financial position either on an individual basis or with regard to our families.  It is not undertaken to improve the financial position of other investors.  So when some come a cropper, the will be a general view of "That's not good, hope things work out" and those of us still in the game move on.


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## bunyip (20 October 2013)

Judd said:


> I know it is probably my warped thinking, but sometimes I get the impression that a view developed in a few of Storm's former client base that when investing in the share market you cannot lose but you are not allowed to lose.
> 
> Never was the situation, is not the situation and never will be the situation in my opinion.




Yes, that appears to have been the case with some Storm investors who apparently believed quite seriously that they were immune from losses when investing through Storm. And having lost, that  they should be entitled to recoup 100% of their losses.
Their view seems to be based on nothing more binding than word of mouth from Storm salespeople who told them the strategy was safe and conservative, that there’s no way they could lose their houses, etc etc. I’m certain that the Storm paperwork gave no such assurances.

A dangerous precedent would be set if a court ruled that Storm investors were entitled to recoup 100% of their losses – it could become difficult or near impossible to get loans or advice from anyone for investment purposes. 
Banks would be most reluctant to lend money for a business venture if they knew they could be liable for the full amount of their client’s losses in the event of the business failing. No stockbroker would be game to give clients advice if they knew they could be legally bound to make good any losses the client incurred from the stock going down instead of up. No financial advisory firm would be too keen on handing out advice either.
Any lending institution that has financed investments that failed could be sent broke by having to refund any losses made by those investments.

In short, the view of a handful of Stormers on entitlement to recover 100% of their losses is completely unrealistic, and is never going to happen. As Ijustnewit suggests, they’d be better off to forget such fanciful notions and simply move on to a happier place in their lives.


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## cynic (20 October 2013)

bunyip said:


> A dangerous precedent would be set if a court ruled that Storm investors were entitled to recoup 100% of their losses – it could become difficult or near impossible to get loans or advice from anyone for investment purposes.
> Banks would be most reluctant to lend money for a business venture if they knew they could be liable for the full amount of their client’s losses in the event of the business failing. No stockbroker would be game to give clients advice if they knew they could be legally bound to make good any losses the client incurred from the stock going down instead of up. No financial advisory firm would be too keen on handing out advice either.
> Any lending institution that has financed investments that failed could be sent broke by having to refund any losses made by those investments.



+1

I am increasingly surprised by the variety of people that I am meeting whom exhibit the characteristics and sentiments that would typically give rise to a "Storm" like financial incident. 

Recently, a friend of mine whom has decades of experience as a successful landlord/owner builder, and full time businessman, suggested to me that I might benefit from undertaking a course in forex. He explained that he'd been to an introductory seminar where the guy offering the course had demonstrated the ease of a particular strategy by performing the trade from within an airborne helicopter! It was on the basis of this, coupled with the fact that the trader sounded intelligent, that my friend assured me that this (rather expensive) forex course would be of benefit! I made a preliminary effort to educate my friend but quickly realised that he was probably more in need of a financially and emotionally costly semester in the school of life. My recounted experiences of actually trading in financial markets with real money didn't seem to rate as highly in his mind as the grandiose promises of the intro seminar that he'd attended.

Until such time as critical thinking and/or business acumen become key parts of our education curriculum, this situation is unlikely to improve. The general media has been adding fuel to the fire (of financial complacency and naivete) by continually extolling the virtues of fully entrusting one's financial affairs to the care of licensed "professionals". This only serves to further promote the illusions of  "efficacy" and "integrity" within our regulated financial services industry. 

Whilst I do believe that the Stormies are victims of a sort (they'd unwittingly been duped for decades before Storm availed itself of their susceptibility), I would certainly not support any claim for material compensation beyond that which can be legally demonstrated to the satisfaction of the courts. Nor would I encourage entertaining the victim perception beyond a reasonable period of grief/despair. It is for each individual to, in their own good time, discover their way to move forward with their lives.


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## bunyip (21 October 2013)

cynic said:


> Until such time as critical thinking and/or business acumen become key parts of our education curriculum, this situation is unlikely to improve. The general media has been adding fuel to the fire (of financial complacency and naivete) by continually extolling the virtues of fully entrusting one's financial affairs to the care of licensed "professionals". This only serves to further promote the illusions of  "efficacy" and "integrity" within our regulated financial services industry.




It’s been said before so many times on this thread that some people are sick of hearing it. But I’m going to say it again anyway, because it’s just so important. It’s too late to help people avoid the Storm debacle, but they can avoid getting caught out by other similar catastrophes if only they’ll take a simple piece of advice on board.
The advice is simply ‘*Think for yourself before acting on the advice of other people’.*

There’s nothing wrong with getting advice and opinions from professionals, but it’s a mistake to just accept that advice without first thinking about it and evaluating it. 
I would have lost the sight in one eye if I’d accepted the advice of the GP who told me nothing could be done about the growth that was spreading across my eye. He was the professional who should have known what he was talking about, I was a 22 year old with no medical training or knowledge. But I got an opinion from a second doctor rather than just blindly believe the first one. I was referred to an eye specialist, and the growth was surgically removed a couple of weeks later.

I should have been able to trust that professional doctor, just as investors should have been able to trust a professional financial planning firm called Storm Financial.
But we live in an imperfect world where people, including professionals, are not always as competent or as trustworthy as they should be. Therefore it’s imperative that we always think about their advice and make a real effort to evaluate it before acting upon it, otherwise we’re easy meat for the shonks and incompetents.
Storm described stock market investment as risky, then reportedly led investors to believe that it was safe and conservative to mortgage homes and borrow a lot of money to sink into this risky investment. 
A small amount of the ‘critical thinking’ that Cynic talks about would have shown that this advice was seriously flawed.


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## Vixs (21 October 2013)

Financial advice certainly does need to be evaluated before being implemented. There are too many that still do not deserve the responsibility of overseeing people's life savings.  2013...Still getting there.


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## Garpal Gumnut (22 October 2013)

There needs to be respect on this thread for all Storm victims.

Many were completely financially illiterate and sucked in by the hype.

Some were greedy, and greed is a human condition.

Some lacked any impression of risk.

Many were in between all of the above.

There is no "typical" Storm investor.

The whole affair is a judgement on 




Financial Advisers

Banks 

Lawyers

ASIC

Tort

Media 


gg


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## bunyip (25 October 2013)

Garpal Gumnut said:


> There needs to be respect on this thread for all Storm victims.




In that case, GG, I take it there will be no repeat of your referring to Storm victims as 'muppets'?


----------



## bunyip (25 October 2013)

Garpal Gumnut said:


> There is no "typical" Storm investor.
> 
> The whole affair is a judgement on
> 
> ...




This whole affair is a judgment on human nature. 

Greed, arrogance, stupidity, dishonesty, selfishness, incompetence, pride, lack of consideration for other people, cowardice – you name it - all the worst aspects of human nature have been on display in the Storm debacle.


----------



## DocK (25 October 2013)

bunyip said:


> This whole affair is a judgment on human nature.
> 
> Greed, arrogance, stupidity, dishonesty, selfishness, incompetence, pride, lack of consideration for other people, cowardice – you name it - all the worst aspects of human nature have been on display in the Storm debacle.




Quite a few have also been on display in this thread....


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## bunyip (29 October 2013)

DocK said:


> Quite a few have also been on display in this thread....




Indeed they have, and _*you*_ have been no more an innocent party than anyone else.


----------



## DocK (29 October 2013)

bunyip said:


> Indeed they have, and _*you*_ have been no more an innocent party than anyone else.




Indeed - but I've never claimed to be infallible.  I'm happy enough to admit that I'm human, and in possession of quite a few human reactions - and I've certainly had quite a few of them whilst reading this thread!

It's been several years since some of us, who were actually Storm clients, experienced an event that was catastrophic for most of us.  Some of us have moved on and found a way to get on with life, some haven't.  Some have received some form of compensation, some have the possibility of more in the works, some don't.  Most of us have long since given up on this particular thread, and the most frequent posters to it are now those that weren't directly involved.  

Maybe it's time to let it go.....


----------



## Solly (31 October 2013)

DocK said:


> Indeed - but I've never claimed to be infallible.  I'm happy enough to admit that I'm human, and in possession of quite a few human reactions - and I've certainly had quite a few of them whilst reading this thread!
> 
> It's been several years since some of us, who were actually Storm clients, experienced an event that was catastrophic for most of us.  Some of us have moved on and found a way to get on with life, some haven't.  Some have received some form of compensation, some have the possibility of more in the works, some don't.  Most of us have long since given up on this particular thread, and the most frequent posters to it are now those that weren't directly involved.
> 
> Maybe it's time to let it go.....




Well articulated Dock,

ASF has been a brilliant forum for me to express my views, I'm a guest here and I'm appreciative of Joe who has allowed me to contribute to his platform.

I hold the view that no one needs to justify a position to anybody, unless you are before the bench, that is.  

S


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## Garpal Gumnut (31 October 2013)

bunyip said:


> In that case, GG, I take it there will be no repeat of your referring to Storm victims as 'muppets'?




I would not think so.

I myself have been a muppet in some of my investment decisions.

As have the majority on ASF.

It is a statement of fact not a derogatory term as I use it.

gg


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## Garpal Gumnut (15 November 2013)

As we fast approach the 5 year anniversary of the Storm Financial debacle, does anyone have an update on the present state of litigation and return of monies to Storm investors?

gg


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## bunyip (16 November 2013)

Garpal Gumnut said:


> As we fast approach the 5 year anniversary of the Storm Financial debacle, does anyone have an update on the present state of litigation and return of monies to Storm investors?
> 
> gg




GG
I can only tell you that I’ve been in private contact with a couple of Stormers who’ve told me they’ve got half their money back.
Presumably that was from the bank/s who financed their investments. 

I think they did extremely well, considering that the banks cannot reasonably be considered as 50% responsible for the losses of Storm investors.


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## Solly (19 November 2013)

*FULL COURT OF THE FEDERAL COURT OF AUSTRALIA*

FEDERAL COURT OF AUSTRALIA

Queensland Registry

Wednesday, 20 November 2013

Harry Gibbs Commonwealth Law Courts Building
Level 6, 119 North Quay
BRISBANE, 4000


Justice Rangiah                                                                                           Court No. 5, Level 7
10:15 AM                                        Interlocutory Hearing

1   QUD709/2013                         EMMANUEL GEORGE CASSIMATIS & ANOR v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

3   QUD460/2013                         EMMANUEL GEORGE CASSIMATIS & ANOR v ASIC


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## Garpal Gumnut (15 December 2013)

*Re: Ignorance*



pennywise said:


> Upon recently stumbling across this web site I was pleasently surprised, although reading some of the recent postings on your site regarding Storm Financial I have found that most of your members seem to be ill informed. I have been an investor with Storm for the last 4 years and have found this company to be nothing less than fantastic. Anyone that finds themselves invested in the stock market in these economic times will be finding it difficult, some more than others. Whilst reading some of the comments made by members of this site it sickens me to think that you can be so ignorant to the facts in this matter. Throughout this ordeal we have been in constant contact with Storm with updates on ours and their postion. I'm sure if you asked Coloniel lending some of the tougher questions being thrown Storms way you would have a greater understading of the mess in which Storm finds themselves. As for Storm taking it's clients on a fully paid for overseas holiday to Africa, this is nothing but utter rubbish. Anyone who choose to go on this trip was self funded. Remember not everthing that the media writes is gosspel. We should all be aware of the gossip mongering that has been created throughout this controversay. I, as a client of Storm Financial will be with them all the way.
> Here's to a better economic year ahead!




I stumbled across this post from pennywise, 5 years ago, as Storm Financial was going down the gurgler.

Does anyone know how pennywise is atm, and what their opinion is on Storm Financial?

It doesn't seem like 5 years.

gg


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## Judd (18 December 2013)

A little snippet from the Fairfax newspapers.  A bit late on a number of levels.



> Rugby league legend and former Storm Financial adviser Wally Fullerton-Smith was forced to surrender his passport to the corporate watchdog on Tuesday, and faces five years' jail, after he was charged with making a false or misleading statement to obtain financial advantage.
> 
> The former Queensland and Australian rugby league rep is now on conditional bail after he allegedly ''misled an elderly couple from NSW in 2007 with the intent to obtain a financial advantage'', according to ASIC.


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## Solly (19 December 2013)

Judd said:


> A little snippet from the Fairfax newspapers.  A bit late on a number of levels.




The Commonwealth Director of Public Prosecutions is pursuing the matter.

Further mention will be on 11 February 2014.

Another interesting case to observe.


----------



## bunyip (19 December 2013)

*Re: Ignorance*



Garpal Gumnut said:


> I stumbled across this post from pennywise, 5 years ago, as Storm Financial was going down the gurgler.
> 
> Does anyone know how pennywise is atm, and what their opinion is on Storm Financial?
> 
> ...



GG

I suspected at the time that Pennywise was EC in disguise, but of course I had no way of knowing for sure.

If PW was someone else, than I imagine that he or she isn’t faring too well. And I daresay that his opinion has changed considerably since his glowing endorsement of Storm Financial five years ago.


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## Solly (19 December 2013)

I note that EC has been scathing in his submission to the Senate inquiry into ASIC.
He alleges wrongdoings by ASIC & CBA.
Some of the other submissions by those impacted by the Storm collapse are also an interesting read.


----------



## Judd (19 December 2013)

Solly said:


> I note that EC has been scathing in his submission to the Senate inquiry into ASIC.
> He alleges wrongdoings by ASIC & CBA.
> Some of the other submissions by those impacted by the Storm collapse are also an interesting read.




As does Ron Jelich's - and a few others.


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## Solly (19 December 2013)

I've had a few questions via twitter re the submissions so I feel it is appropriate to post this here as well.

*The performance of the Australian Securities and Investments Commission*

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/ASIC

*Submissions received by the Committee*

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/ASIC/Submissions

Search via Organisation/Individual for submission goodness. Look out for the names of familiar Storm participants in this saga. Be amazed. 

S


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## Garpal Gumnut (20 December 2013)

It would appear that nothing has changed or will, in relation to innocent gullible marks, being taken by dodgy Financial Advisers.

The Financial Advice industry has regrouped since Storm.

They now charge fees, and ASIC is a toothless tiger.

It has been reported that I once many years ago allegedly threw an AMP Insurance Jockey in to a creek near Ingham (G'day Ron) to expedite a claim he wa lagging on for me, allegedly saving him from a prehistoric meeting, when I had garnered his signature. 

In this day and age, this is no longer possible.

Nonetheless, Financial Advisers here in Townsville again have large carparks and shiny reception areas, sucking retirees in with vague promises, gilded in disclaimers and lawyertalk.

Mugs are mugs, and Financial Advisers are there to scrape em up.

As did Storm Financial.

gg


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## bunyip (20 December 2013)

_FOR THE PURPOSE OF LEVERAGING INTO EQUITIES, Storm’s approach to financial planning was conservative and any impression formed otherwise can only have been done by avoiding the case facts._

I extracted the above from EC’s submission. 
It’s incredible to see him still claiming that ‘*Storm’s approach to financial planning was conservative’.*

Since when is it a conservative investment approach for people around retirement age to mortgage their homes to raise investment loans, then combine this borrowed money with their own savings and super etc, and shove the lot into the always risky stockmarket.
Then load up the borrowings even more through the use of double gearing, and by taking out additional loans against increasing asset values, and pile this money into the stockmarket as well??
How on earth can this possibly be conservative??!!


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## Judd (20 December 2013)

bunyip, sometimes things just is.  We can wonder How on earth....? but it will not alter anything.

I'd have to agree with GG's implied position in that you can have as many rules and regulations you want but sooner or later, someone is going to get taken to the cleaners.  It is a given in my opinion and all we can do is watch in awe followed by a few well chosen   plus exclaiming :holysheep:.

Cheers


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## Solly (20 December 2013)

> *"Storm CEO alleges ASIC-CBA cover-up"*
> 
> The former chief executive of Storm Financial has accused the corporate regulator and Commonwealth Bank of teaming up to perpetuate a “blame Storm message”.




Source: http://www.ifa.com.au/news/12648-storm-ceo-alleges-asic-cba-cover-up


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## bunyip (20 December 2013)

Judd said:


> bunyip, sometimes things just is.  We can wonder How on earth....? but it will not alter anything.
> 
> I'd have to agree with GG's implied position in that you can have as many rules and regulations you want but sooner or later, someone is going to get taken to the cleaners.  It is a given in my opinion and all we can do is watch in awe followed by a few well chosen   plus exclaiming :holysheep:.
> 
> Cheers




Dead right, and that’s one of the issues that produced spirited debate on this forum over the last year or two. One view put forward vigorously by a particular person was that rules and regulations need to be changed ‘_so this can’t happen again’._
But the fact is that it can and will happen again no matter how much new or altered legislation is put in place to stop it. 
You simply can’t legislate to stop people from borrowing money for investment, and you can’t legislate to stop them investing that money in a risky venture. A percentage of risky ventures invariably come undone sooner or later.


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## Garpal Gumnut (20 December 2013)

Judd said:


> bunyip, sometimes things just is.  We can wonder How on earth....? but it will not alter anything.
> 
> I'd have to agree with GG's implied position in that you can have as many rules and regulations you want but sooner or later, someone is going to get taken to the cleaners.  It is a given in my opinion and all we can do is watch in awe followed by a few well chosen   plus exclaiming :holysheep:.
> 
> Cheers






bunyip said:


> Dead right, and that’s one of the issues that produced spirited debate on this forum over the last year or two. One view put forward vigorously by a particular person was that rules and regulations need to be changed ‘_so this can’t happen again’._
> But the fact is that it can and will happen again no matter how much new or altered legislation is put in place to stop it.
> You simply can’t legislate to stop people from borrowing money for investment, and you can’t legislate to stop them investing that money in a risky venture. A percentage of risky ventures invariably come undone sooner or later.




Agree Judd and Bunyip.

I do feel sorry for people who believe the system is out to protect them via ASIC, an old boys club, so inefficient as being close to redundancy.

Unfortunately these same people tend to be taken in by Financial Planning spivs, with Gold plated dunnies, duty free aftershave, fresh faced receptionists and obscene meditarranean furniture. 

A dose of Oxygen during seminars never goes astray.

After the bust, the Financial Adviser has usually squirreled enough moula away via family and cash, to live a reasonable life.

It is unfair, and why some seem willing to respond with direct action to seek redress. The system however then rolls over, and the mark's money is further diluted by lawyers, public servants and more financial advisers.

I have never used financial advisers, except when I need to use a toilet in a major city, and/or replace a fitting in my gold plated dunny.

gg


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## bunyip (21 December 2013)

Garpal Gumnut said:


> Agree Judd and Bunyip.
> 
> I do feel sorry for people who believe the system is out to protect them via ASIC, an old boys club, so inefficient as being close to redundancy.
> 
> ...





If EC cranks up again as a financial planner/adviser under a different name (and I believe it’s quite on the cards that he will sooner or later after a brief ASIC-imposed period in the sin bin) I won't be at all suprised if there's a small hard core of his former Storm clients who will sign on with him again.


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## Solly (21 December 2013)

bunyip said:


> If EC cranks up again as a financial planner/adviser under a different name (and I believe it’s quite on the cards that he will sooner or later after a brief ASIC-imposed period in the sin bin) I won't be at all suprised if there's a small hard core of his former Storm clients who will sign on with him again.





bunyip

As at this point in time, 5 years post collapse, EC hasn't be found guilty of any crime or even a misdemeanor, it could even be viewed that EC is also a victim of the system that brought the whole house crashing down. 

Remember, even revolutionary figures like Che Guevara were ridiculed at some point in time.

 S


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## Garpal Gumnut (22 December 2013)

Solly said:


> bunyip
> 
> As at this point in time, 5 years post collapse, EC hasn't be found guilty of any crime or even a misdemeanor, it could even be viewed that EC is also a victim of the system that brought the whole house crashing down.
> 
> ...




Manny is certainly innocent of any crimes thus far, and should be afforded the presumption of innocence.

I will be in what is left of Lennons for NY Eve and will sachay up Burnett La. to drop a bitcoin in to his collection box.

Poor misunderstood bastard.

I am driven to sing.

"Che sera, sera, whatever shall be shall be, the future's not ours to see, Che sera sera."

gg


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## Solly (22 December 2013)

Garpal Gumnut said:


> Manny is certainly innocent of any crimes thus far, and should be afforded the presumption of innocence.
> 
> I will be in what is left of Lennons for NY Eve and will sachay up Burnett La. to drop a bitcoin in to his collection box.
> 
> ...




GG

It's been some time since I've ventured north of latitude 23 ° 26' 14.908" on the mainland. It concerns me that you report of the reemergence of large carparks and shiny reception areas. Red flags should immediately be raised if at these said premises it is found that the dunnies are adorned with gold plated taps, imported spring water bum washers and if there is a wafting smell of espresso and oxygen enhanced freshly baked muffins propagating though the joints.

Yes, I cannot believe it has been 5 years, it only seems like yesterday that my Stormer mate was telling me that there's nothing to worry about when I raised concerns in Nov 08. I remember him telling me "Emmanuel knows what he's doing. He owns heaps of places. He owns a jet. They've got degrees. The Comm Bank backs things". This response did sensitise my inquisitive and scrutinising nature. IRL I have come face to face with many scoundrels, many I was happy to see dragged away in manacles and given time to reflect on their antisocial behaviours as a guest of Her Majesty. Given the luxury of time, looking back at events, to me, the list of scoundrels is rather extensive.

This saga still has legs and I believe there is much more to observe. Wheels often turn slowly, pockets need to be deep when seeking the desired outcome. I wish those still seeking a remedy, enduring resilience and persistence. 


Yes Lennon's is getting quite a work-over. I often observe the progress while walking down The Lane to have a morning caffÃ¨ latte and pretzel at the German Sausage Hut. It appears Lennon's new owners are attempting to restore the classic landmark to its former imperial glory. I informally know one of the foreman working on the site, I should ask if the refurbishment does include a mahogany & chesterfield kitted cigar lounge. I'm sure that would impress you.


Yes I agree with the Doris Day sentiments. As I reside in the South East and spend much my time between Pacific Motorway M1 - Exit 54 and George St, for some strange reason I have been playing this Doris Day classic on high rotation on Black Beauty's mp3 player, often while evading Coomera Traffic Branch ....

http://www.youtube.com/watch?v=fz8PpSHvBfQ


It's probably because of my close proximity, to legislators, regulators, legal practitioners, prosecutors, enforcers, politicians and those with a shady past  

S


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## Solly (7 January 2014)

> *Former Storm Financial boss blames failure on ASIC manipulation*
> 
> Former Storm Financial head Emmanuel Cassimatis has alleged the failure of the group was brought about by the Australian Securities and Investments Commission (ASIC) manipulating evidence to achieve a predetermined outcome.





Source: http://www.moneymanagement.com.au/n...r-storm-financial-boss-blames-failure-on-asic

Some interesting reader comments after the article.


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## Garpal Gumnut (7 January 2014)

Solly said:


> Source: http://www.moneymanagement.com.au/n...r-storm-financial-boss-blames-failure-on-asic
> 
> Some interesting reader comments after the article.




And the quotes are :



> Gerry Lenihan
> • 9 hours ago
> 
> Oh sure Emmanuel, it was all the fault of ASIC. I totally disagree. As a CFP I helped several poor (in more ways than one) Storm clients when you collapsed. The advice given to them was pathetic. Designed purely to generate maximum income for the adviser. Just because a client signs the SOA and documents, doesn't mean they understand the advice they are getting.
> ...




gg


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## Solly (7 January 2014)

Garpal Gumnut said:


> And the quotes are :
> 
> 
> 
> gg





GG

That article states that Manny is alleging that ASIC manipulated evidence. This is a very serious matter. I wonder if the Senate will refer the matter to be investigated by the Federal authorities to see if any impropriety or criminal activities can be found?

I wonder why he has not previously made a complaint to the Federal Police so that these matters can be investigated? Maybe he has?

Whenever I have any suspicion of a Commonwealth crime, I find this website beneficial.

http://www.afp.gov.au/contact/report-a-crime.aspx


S


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## bunyip (10 January 2014)

Solly said:


> Source: http://www.moneymanagement.com.au/n...r-storm-financial-boss-blames-failure-on-asic
> 
> Some interesting reader comments after the article.




I can imagine the disgust that Storm investors must feel when they see Cassamatis still blaming others while refusing to admit any failure on his part.


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## bunyip (15 January 2014)

mrfmad said:


> I am also a storm financial client & agree with above comments.
> You all must be idiots to believe in your advisers, media etc etc.
> If i had a shop that sold milk, why would i send my customers down the road to buy milk off someone else. So the only person to promote storm would be clients & themselves dont you think.
> Storm Clients Pay for their own holidays which is another quoted error.
> ...




I wonder if this person is still '_*a very happy Storm client who would like to say thank you to Storm for being so upfront and honest with everyone'*._


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## mrfmad (23 January 2014)

bunyip said:


> I wonder if this person is still '_*a very happy Storm client who would like to say thank you to Storm for being so upfront and honest with everyone'*._




Still taking everything out of context I see Bunyip. Still have incorrect facts. The fact is that I support that very wrong doings were going on & that you & I would never know true facts about. (perhaps not ALL to do with storm) You still keep arguing on here your point. So valuable is your information YOU SHOULD BE AN ADVISER! 

Yes I thanked Storm for being up front & honest with us & telling us that the carpet was ripped from under them & all information & access was ceased to clients because ASIC put a legal hold on all.  I have an understanding of the laws they were GAGGED under. But you would know that Bunyip as you know exactly what happened. 
They were up front & honest with me. So don't split hairs in something that I cannot write a novel here to explain. Of course I was not happy with what had happened back then to all investors.  I just was not going to rub salt into the wounds like you were.

That same governing body ASIC APPROVED this financial institute in fact it was highly recommended financial Planning company by financial planners, the banks, & all with university degrees. Yes of course Bunyip you know that's not true & will come back at we are idiots, greedy, etc We have heard all your facts before. Have you ever heard of compassion? I was trying to show my support for the investors that know they are not greedy & just simply seeking professional advise. 

My comment of milk purchase etc is in reference to all having different advice & accountability & that Holden is not going to recommend Ford etc.  

If I hire an qualified electrician who is licensed by a Governing body & trade certified at my house & he/she electrocutes someone, or the house burns down. He/she is held accountable for it. I do not go & get another electrician to make sure he did his job properly before I turn the power on. Do I Bunyip? But I'm sure you will have a negative reply comment. There are governing bodies that assure me the electrician is qualified. Just like with Storm. But hey that would be your fault hey Bunyip.

I have been investing for years & with an adviser. My portfolio was now to large for me to look after. So I handed the reins over to a ASIC approved professional Financial service. Like other clients did.
We are all put in the same basket by the forum. Some of us are not retired, & not on a pension, & did not invest our super, or unable to pay our margins etc.

Storm factored margins into the model. Most of us had $50 - $100,000 in offset accounts to account for this crisis. You put all clients in the one group.  Miss informed Bunyip. I think so. 

The banks were to call margins its on the documents that the BANKS will make the call. They didn't call anyone. They just sold down. How would you like it if someone took your house when you have not missed a payment? Oh that's right Investing in a home is ok? But not shares. The banks also increased our LVR to ensure we lost more money without permission or knowledge to any clients. 

I cant believe you would take my quotes out of context that I am happy with the advice. Storm investors had already lost everything & people like you Bunyip have no compassion at all. You just keep arguing & dissing all STORM CLIENTS. You have been very ill informed & I feel for you. 

Lets clear the air some more. They paid for our holidays Oh that was another false one hey Bunyip. Storm clients could if they wanted to PAY FOR THEIR OWN holiday & yes the toilets were gold. If you think for a minute that a ****ter would make me invest you are clearly mistaken. 

These comments above are to imply to all other forum members that any idiot could see it was a scam etc & how we must be fooled by a gold toilet. Just like your comment here Bunyip is only to antagonize. If it was not why would you be bringing it up after 4 years?

I have no doubt I will get another back lashing or more rubbish from you to promote Debate rather than a discussion on this forum wont I Bunyip? In fact many forum members are tired of your JERK attitude. 
Let it go Bunyip it was 4 years ago. Find a new hobby rather than bullying!

The fact that you don't want to have open minded discussions on a forum & know everything tells me you have a hidden agenda?  I can't see any good come from what you are doing on here & it couldn't be for any other reason apart from....You only post comments to antagonize storm investors to cause forum fights. Well this speaks volumes of the type of person you are Bunyip.

Oh yeah & the courts. Not Bunyip but the Courts also agree with the wrong doing by the banks to the storm investors. Could it be sour grapes Bunyip? Could you be wrong? For just once? 

See courts look at the facts Bunyip & the fact is WRONG DOINGS by banks...I rest my case!!!! 

VOTE! 1 BUNYIP He thinks he's the SMARTEST FINANCIAL ADVISER AROUND!


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## bunyip (24 January 2014)

mrfmad said:


> Yes I thanked Storm for being up front & honest with us & telling us that the carpet was ripped from under them & all information & access was ceased to clients because ASIC put a legal hold on all.




And while you were in such an appreciative mood, did you also thank Storm for dudding you? Because dudding you is what they did. 
You should direct some of your anger towards Storm. 
But anyway, I’m sure Storm were pleased to hear some appreciative comments from ‘a very happy Storm client’ at a time when they were copping heavy criticism from disgruntled clients who felt that Storm had failed them.


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## bunyip (27 January 2014)

_*The quote tags won't work for me today, so I'll put my comments in bold below each of your points that I wish to address.

I'll start off by saying stating that everything we say on this forum is on public record and can easily be checked. If you’d taken the trouble to check what I’ve said on here, you could have avoided making yourself look silly by attacking me over comments that I didn’t make and views that I don’t hold.*_


mrfmad said:


> Yes I thanked Storm for being up front & honest with us & telling us that the carpet was ripped from under them & all information & access was ceased to clients because ASIC put a legal hold on all.  I have an understanding of the laws they were GAGGED under.
> 
> _*Far from being ‘upfront and honest’, Storm kept their clients in the dark through more than 12 months of bear market by neglecting to advise them of their true positions, assuring them that everything was under control and there was nothing to worry about, telling them they couldn’t lose their homes, and downplaying the risks by putting some of them into further investments even as the market collapsed.
> Finally when they could no longer hide the true state of their clients accounts, Storm was given a convenient excuse for keeping clients clients in the dark by informing them that they could say nothing because ASIC had gagged them.
> ...



_*Why people like you keep implying that I think the banks are blameless is beyond me. The view that I’ve expressed on here many times is that if a court of law finds the banks guilty of any illegal activity, then they should be penalized accordingly.
The banks may not be without fault, but nor are they the primary reason for your losses. The primary reason that Storm investors lost so heavily is that they allowed Storm to talk them into a highly risky geared investment strategy that made good money while the market was bullish, but caused horrific losses when the market collapsed. *_


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## Garpal Gumnut (27 January 2014)

bunyip said:


> If EC cranks up again as a financial planner/adviser under a different name (and I believe it’s quite on the cards that he will sooner or later after a brief ASIC-imposed period in the sin bin) I won't be at all suprised if there's a small hard core of his former Storm clients who will sign on with him again.






Solly said:


> bunyip
> 
> As at this point in time, 5 years post collapse, EC hasn't be found guilty of any crime or even a misdemeanor, it could even be viewed that EC is also a victim of the system that brought the whole house crashing down.
> 
> ...




bunyip and Solly and mrfmad, all make excellent points in isolation.

I tend towards bunyip's analysis in the end. 

As my late departed mate Joh Bjelke-Petersen used say to me.

"Garpal, if it walks like a chook, sounds like a chook and looks like a chook, it is a chook"

Storm Financial on the majority opinion, opinion I respect, was an obscenity, sucking in unsophisticated investors in to highly geared speculation on one index. 

Whether the Banks, ASIC or other entity should have protected investors is moot.

It was a crook show from one end of the Golden Dunny on Sturt St. to the Ross Creek where investors money ended.

Storm Investors in the Bull Run were pulling friends and family in to the madness.  

There is no single cause for the loss of Investor assets. 

The Courts will decide, and they don't decide very well in matters such as this in my opinion.

gg


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## Harleyquin (24 February 2014)

We all want to be in the best financial position possible in our retirement. Investors on ASF are the same, you are all trying to get the best investments possible. I don't believe that's greed, I believe that it's commonsense. Who wants to find themselves in the poorhouse in retirement? Nobody. 

When we reached out for help from storm, that's all we were doing, wanting help to get in the best financial position possible. Instead we've been left physically, mentally and financially drained, with nothing to look forward to. If we were younger and working it might be possible to get over this hump, but for those of us of retirement age, it's too late.

The storm strategy has often been referred to as 'criminal' on this forum yet those same forum members are happy to defend the banks who funded this criminal advice. I fail to understand this. One can only assume that those who defend the loudest have the largest cache of bank shares.


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## pilots (25 February 2014)

mrfmad said:


> Still taking everything out of context I see Bunyip. Still have incorrect facts. The fact is that I support that very wrong doings were going on & that you & I would never know true facts about. (perhaps not ALL to do with storm) You still keep arguing on here your point. So valuable is your information YOU SHOULD BE AN ADVISER!
> 
> Yes I thanked Storm for being up front & honest with us & telling us that the carpet was ripped from under them & all information & access was ceased to clients because ASIC put a legal hold on all.  I have an understanding of the laws they were GAGGED under. But you would know that Bunyip as you know exactly what happened.
> They were up front & honest with me. So don't split hairs in something that I cannot write a novel here to explain. Of course I was not happy with what had happened back then to all investors.  I just was not going to rub salt into the wounds like you were.
> ...



Well he did NOT invest in storm, that make him a lot smarter than you.


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## pilots (25 February 2014)

Harleyquin said:


> We all want to be in the best financial position possible in our retirement. Investors on ASF are the same, you are all trying to get the best investments possible. I don't believe that's greed, I believe that it's commonsense. Who wants to find themselves in the poorhouse in retirement? Nobody.
> 
> When we reached out for help from storm, that's all we were doing, wanting help to get in the best financial position possible. Instead we've been left physically, mentally and financially drained, with nothing to look forward to. If we were younger and working it might be possible to get over this hump, but for those of us of retirement age, it's too late.
> 
> The storm strategy has often been referred to as 'criminal' on this forum yet those same forum members are happy to defend the banks who funded this criminal advice. I fail to understand this. One can only assume that those who defend the loudest have the largest cache of bank shares.




You say you don't believe in greed, then why did you invest in storm? You say we reached out for help from storm, did you reach out to any other financial mobs, when storm was in full swing you could find many financial people telling you this is going to end bad, sorry for all of them who lost, but you did NOT have to invest in storm, you can NOT blame the banks for you loss, if you was to buy a house on a street corner and later the roads dept want to take some of your land your house value will drop, sure you will get some compo from the roads dept, but when you sell you will not get all your money back, now is that the banks fault??.


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## bunyip (25 February 2014)

Harleyquin said:


> We all want to be in the best financial position possible in our retirement. Investors on ASF are the same, you are all trying to get the best investments possible. I don't believe that's greed, I believe that it's commonsense. Who wants to find themselves in the poorhouse in retirement? Nobody.
> 
> When we reached out for help from storm, that's all we were doing, wanting help to get in the best financial position possible. Instead we've been left physically, mentally and financially drained, with nothing to look forward to. If we were younger and working it might be possible to get over this hump, but for those of us of retirement age, it's too late.
> 
> The storm strategy has often been referred to as 'criminal' on this forum yet those same forum members are happy to defend the banks who funded this criminal advice. I fail to understand this. One can only assume that those who defend the loudest have the largest cache of bank shares.




These same people who you think are ‘defending’ the banks have on many occasions stated clearly that they support appropriate penalities being imposed on the banks IF a court of law proves the banks guilty of doing anything illegal.

However, lending money for investment is not illegal, not even if the investor intends to take serious risks with the money.
Let’s say you get a bank loan to buy an investment property in a one-industry town like like a coal town. It’s a risky investment because a downturn in the coal industry could cause mine closures resulting in people leaving town, and you as an investor facing plummeting property values and shrinking rental returns. Worse still, no rental income at all because you can’t find a tenant for your house. So the bank forecloses on your rental property when you can’t meet your loan commitments, and if the sale of that property gives the bank insufficient money to recoup what you owe them, then they may foreclose on other property that you’ve given them a mortgage over. Like your family home, for example.

Now seriously HQ, do you think the bank has done anything illegal here? It was up to you, the investor, to conduct risk assessment before getting a loan and buying the property. The bank has no responsibility to evaluate your proposed investment for you and advise you of the negatives and positives. If you ask a bank for investment advice then they’ll happily provide it by referring you to one of their investment advisers. But my understanding is that you approached Storm for investment advice, and *then you approached the bank for a loan, not for investment advice. *

Here’s a couple more examples for you to think about.
You’re from a cane-farming area, therefore you’d be well aware of the ups and downs in the sugar industry. Someone gets bank finance to buy a cane farm, the sugar price falls severely, and he loses the farm because he can’t meet his loan commitments.
Is it the banks fault? It’s not the bank who wiped him out, it’s the downturn in the sugar industry combined with too much debt to enable him to ride out the slump.

Someone gets a bank loan to buy a rental house on a flood plain, the house get severely damaged in a flood, no rental income for a prolonged period while the house is being rebuilt. Investor gets into financial difficulty as a result. Bank forecloses.
Nobody can reasonably say it’s all the banks fault. The investor should have evaluated the situation properly, considered the risks more carefully.

HQ – it’s understandable that you’re upset at suddenly finding yourself in a difficult financial situation at an age when you’d like to be enjoying a comfortable retirement. But don’t destroy yourself with resentment and bitterness towards the banks for doing what you asked them to do, which was to lend you money to invest in the stock market. You weren’t wiped out by the banks, you were wiped out by a combination of bad advice from Storm, a stock market collapse, and too much gearing.


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## Mash (25 February 2014)

Really...all you non stormers think the banks were not the biggest wankers on the block.. yep Mannie and Julie brought the lambs to the slaughter ( I want them to hang high but ASIC still have no idea how to go about that)... but the banks totally orchestrated what they were doing and ASIC were happy to back them while they were flying high... we looked at other planners before signing up and our "original" plan was basically what storm was offering but the long term fee calculations was what sucked us in, high up front but less in the long run (we were looking at 15-20 years).The basic plan was our money geared to a maximum of 50% ... it was the devil in the detail and the "wankers" willing to bend the rules that totally screwed us over. The "wankers" deciding to bend/break their own "code of conduct" to do whatever Storm wanted to get their "business".... all are crims and all deserve to be in jail...but that won't happen because the bankers screw the client and then make the parliamentarians bend over further to take whatever they give in whatever way they want... Believe what you want but knowing now what I do this country is run by the banks, not the government and not the people but the banks. Sad but true.


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## pilots (26 February 2014)

Mash said:


> Really...all you non stormers think the banks were not the biggest wankers on the block.. yep Mannie and Julie brought the lambs to the slaughter ( I want them to hang high but ASIC still have no idea how to go about that)... but the banks totally orchestrated what they were doing and ASIC were happy to back them while they were flying high... we looked at other planners before signing up and our "original" plan was basically what storm was offering but the long term fee calculations was what sucked us in, high up front but less in the long run (we were looking at 15-20 years).The basic plan was our money geared to a maximum of 50% ... it was the devil in the detail and the "wankers" willing to bend the rules that totally screwed us over. The "wankers" deciding to bend/break their own "code of conduct" to do whatever Storm wanted to get their "business".... all are crims and all deserve to be in jail...but that won't happen because the bankers screw the client and then make the parliamentarians bend over further to take whatever they give in whatever way they want... Believe what you want but knowing now what I do this country is run by the banks, not the government and not the people but the banks. Sad but true.




Mash, you did not have to invest with storm, you could have gone to many others who are still going today, if it's to good to be true, you know the rest. We was told about storm long ago, only needed ONE meeting to see it was set up to suck in the wankers.


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## bunyip (26 February 2014)

Mash said:


> Really...all you non stormers think the banks were not the biggest wankers on the block.. yep Mannie and Julie brought the lambs to the slaughter ( I want them to hang high but ASIC still have no idea how to go about that)... but the banks totally orchestrated what they were doing and ASIC were happy to back them while they were flying high... we looked at other planners before signing up and our "original" plan was basically what storm was offering but the long term fee calculations was what sucked us in, high up front but less in the long run (we were looking at 15-20 years).The basic plan was our money geared to a maximum of 50% ... it was the devil in the detail and the "wankers" willing to bend the rules that totally screwed us over. The "wankers" deciding to bend/break their own "code of conduct" to do whatever Storm wanted to get their "business".... all are crims and all deserve to be in jail...but that won't happen because the bankers screw the client and then make the parliamentarians bend over further to take whatever they give in whatever way they want... Believe what you want but knowing now what I do this country is run by the banks, not the government and not the people but the banks. Sad but true.



Like I’ve always said, if a court of law proves the banks acted illegally, then I support you in condemning their illegal actions and wanting them to be penalized accordingly. 
But I don’t support the idea that lending you money to invest in the stock market was illegal or immoral just because there was considerable risk of loss to investors.

My bush contacts tell me that in the last 18 months or so the banks have foreclosed on a number of western QLD cattle properties after the owners got into financial difficulties due to severe drought and the slump in cattle prices. 
Would it be fair and reasonable to say that the banks should not have financed these graziers because of the considerable risk in agriculture? Of course not. Nobody would ever get finance for any business investment if the banks refused to lend because there was risk involved. 

If after lending you the money the banks bent the rules or broke their own code of conduct as you claim, and they did so illegally, then by all means go after them with legal action. If you’ve already done that but haven’t got the result you’re looking for, then either keep after them or else cut your losses and walk away. Your choice.

But remember this. You chose to go to Storm for investment advice, chose to take their advice and act upon it, chose to ask the banks to help you do it by granting you loans. Then you chose to use that money to invest heavily in the market despite two very clear warnings that you should proceed with caution rather than go charging in boots and all.
The first of these warnings was 20 years earlier when the 1987 stock market crash showed just how extremely risky it can be to sink your money into the market, let alone mortgage your home to borrow a pile of money to sink into the market as well.
The second warning was when Storm clearly stated in their Statement Of Advice that stock market investment is risky.
Both of these warnings gave you good reason to turn your back on Storm’s advice and walk away.


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## Harleyquin (27 February 2014)

Totally agree Mash. I read your post Pilots and thought, this person has no idea what he/ she is talking about.  By this stage we all know that Bunyip is only out to protect his horde of bank shares at any cost.  

There were people within the banks who broke all their own rules, as Mash so rightly stated, and the banks themselves need to acknowledge the fact. However they won't. This is all about greed on the part of storm, the banks and the shareholders. A lot of ex stormies own bank shares too and we don't want the banks to go out of business, we only want them to right their wrongs. Admit and pay for their mistakes, move on and make sure it never happens again.

If ASIC were doing the job they are paid for it would never have happened in the first place.


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## bunyip (27 February 2014)

Harleyquin said:


> By this stage we all know that Bunyip is only out to protect his horde of bank shares at any cost.




HQ
Owners of shares in the major banks don’t have and never have had any reason to fear any ruling in regard to payouts to Storm clients.
As I explained to you more than a year ago, the major banks make thousands of millions of dollars in half yearly profits. If between them they were forced to refund every single dollar lost by Storm investors, it would make barely a blip in their share price, and any blip would be temporary only.



Harleyquin said:


> If ASIC were doing the job they are paid for it would never have happened in the first place.



I agree – ASIC failed as they so often do.
And as Mash pointed out they're continuing to fail.

And it wouldn’t have happened if Storm were doing their job either. 

And it wouldn’t have happened if investors had learnt the lessons from the 1987 market crash. Or if they’d have smelt a rat, as they should have done, when Storm on the one hand told them stock market investment is risky, then on the other hand encouraged them to jump into this risky investmet boots and all by mortgaging homes and shoving all their money plus a pile of borrowed money into the market.

And it wouldn’t have happened if Storm investors throughout their lives had availed themselves of the many free opportunities to get some basic education in finance and investment.

A lot of people let you down – no doubt about it. 
And I agree that they should be brought to justice _*if they broke any laws in the process.*_
But you let yourselves down too. I’d like to see you at least being honest enough to acknowledge that, instead of constantly pointing the finger while attempting to absolve yourself off all responsibility for your actions and their consequences.


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## Harleyquin (27 February 2014)

Bunyip I agree that storm weren't doing their job and the major banks make billions, not millions. I also know that they could re emberse all stormies and it wouldn't cause a ripple. Where you are wrong is that storm couldn't do this by themselves, but then you know that already, even if you decide not to admit it.

I have never 'just blamed the banks for this'.  The blame is multi faceted and I blame myself for being so trusting that those who should know. I'm also far more aware now of what not to do.  Had we had a computer and internet access prior to joining storm it would have been easier to do some research.


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## pilots (27 February 2014)

Harleyquin said:


> Bunyip I agree that storm weren't doing their job and the major banks make billions, not millions. I also know that they could re emberse all stormies and it wouldn't cause a ripple. Where you are wrong is that storm couldn't do this by themselves, but then you know that already, even if you decide not to admit it.
> 
> I have never 'just blamed the banks for this'.  The blame is multi faceted and I blame myself for being so trusting that those who should know. I'm also far more aware now of what not to do.  Had we had a computer and internet access prior to joining storm it would have been easier to do some research.




I blame myself for being so trusting, BINGO!!!!!!, we all so looked at storm, it took only one meeting to know this is TOO good to be true, thank god we ran.


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## Judd (27 February 2014)

Harleyquin said:


> ......... Had we had a computer and internet access prior to joining storm it would have been easier to do some research.(




$200-$300 spent at any bookstore or borrowed from a public library.  Sensible Share Investing, Austin Donnelly 1995 $15.95.  Research done and dusted.


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## Harleyquin (27 February 2014)

In hindsight Judd I know you're right, isn't hindsight a wonderful thing. Pilots if you knew it was too good to be true on the first visit then that's great, we didn't think it was too good to be true, we thought we were being sensible seeking advice.


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## bunyip (27 February 2014)

Harleyquin said:


> Bunyip I agree that storm weren't doing their job and the major banks make billions, not millions. I also know that they could re emberse all stormies and it wouldn't cause a ripple.(



Yes but why should they reimburse you for your losses if they were not the cause of them? You might argue that the banks caused some of your losses, and perhaps you’re right. But no logical or rational person would suggest that the banks caused _*all*_ your losses. Most of your losses were caused by you having a load of borrowed money in the market when the market crashed. And for that you can thank Storm for talking you into such a high risk venture, and yourself for being so trusting that you accepted their advice despite 1987 having showed you the extreme risk of investing heavily in the market, particularly with loans that were secured by mortgaging your home. 
As a point of interest, HQ, what percentage of your losses do you think should be reimbursed to you by the bank/s that provided your finance?



Harleyquin said:


> Where you are wrong is that storm couldn't do this by themselves, but then you know that already, even if you decide not to admit it.(



Storm needed clients so they could milk them for 7% of money invested, and they needed bank finance for those clients. Without either of them Storm would have been unable to operate.



Harleyquin said:


> I have never 'just blamed the banks for this'. (



No, but you and Frank and a couple of others have denied that you’re in any way responsible for what happened to you. And that’s absurd, give that you readily admit you were too trusting. Too trusting is what caused you to take the crazy risks that largely brought you undone.

On the subject of trust – I’ve always wondered why you were so trusting of Storm. Yes, I know they were a professional financial planning firm. But lots of firms have professional qualifications in their field, nevertheless I’m sure you’ve come across many over the years who were less than honest or competent. Was every real estate agent you ever dealt with honest and trustworthy? I doubt it. How about the hundreds of retailers you’ve dealt with – surely you must have come across some shonky ones despite their belonging to a professional body with clearly stated ethical guidelines and codes of conduct.
How about the dentists, doctors, lawyers, accountants, electricians, builders and plumbers you’ve dealt with, and a few dozen other professionals I could name? They were all competent and honest and trustworthy, were they, every single one of them? I very much doubt it. 
Your life experiences over the years surely would have taught you not to take people at face value and just trust them blindly, no matter what their occupation or professional qualifications. Why then were you so trusting of Storm?


Harleyquin said:


> Had we had a computer and internet access prior to joining storm it would have been easier to do some research.



Sure, a computer would have helped. But there are lots of ways to learn the basics of investment and finance without owning a computer. The ‘investment and finance’ sections of bookshops contain many inexpensive and useful books.
Over the years I’ve been to numerous workshops and presentations on investment-related subjects. These were all free and in most cases were advertised in the local paper or on radio or TV. Sometimes they were put on by shonks wanting me to part with big money for their course, sometimes they were put on by stockbrokers, sometimes they were put on by the Australian Stock Exchange. Sometimes they were great, other times hardly worth attending, but even the almost useless contained one or two useful pieces of information.
The greatest teacher of all though was the stock market crash of October 1987 that showed how quickly you can come undone if you have a lot of money in the market, particularly money borrowed through margin loans. And yet many people appear to have completely forgotten this lesson by the time Storm came on the scene less than 20 years later.


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## Harleyquin (28 February 2014)

Despite the rights and wrongs discussed on this forum regarding the storm financial collapse and it's aftermath, there is one thing to remember and that is, hundreds of peoples lives are ruined financially and they will never recover.  Now five years down the track we are seeing heart attacks, strokes, cancers, severe depression, suicide, major trust issues just to name a few... Also the majority are finding it very difficult to find any joy in their lives. It is a major problem irrespective of where the blame lies. I find this total destruction of so many lives quite unforgivable and unnecessary.


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## DocK (28 February 2014)

Harleyquin said:


> Despite the rights and wrongs discussed on this forum regarding the storm financial collapse and it's aftermath, there is one thing to remember and that is, hundreds of peoples lives are ruined financially and they will never recover.  Now five years down the track we are seeing heart attacks, strokes, cancers, severe depression, suicide, major trust issues just to name a few... Also the majority are finding it very difficult to find any joy in their lives. It is a major problem irrespective of where the blame lies. I find this total destruction of so many lives quite unforgivable and unnecessary.




Try to hang in there, Harleyquin.  I believe a lot of ex-stormies are going through something akin to the "7 stages of grief" - mourning the loss of their dreams and future (and livelihood).  Counseling and support groups may be of help to some.  Please urge any you know who are doing it tough to seek help - there have been enough lives ruined already!


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## Judd (28 February 2014)

DocK said:


> Try to hang in there, Harleyquin.  I believe a lot of ex-stormies are going through something akin to the "7 stages of grief" - mourning the loss of their dreams and future (and livelihood).  Counseling and support groups may be of help to some.  Please urge any you know who are doing it tough to seek help - there have been enough lives ruined already!




Yes, that is the aspect which is the most distressing.  I was completely hardline when I first read about Storm Financial but after reading most of the submissions to Parliamentary review, I've moderated somewhat.

I still cannot comprehend many aspects, such as plonking down $100k of borrowed money to again borrow the equivalent amount with the mongrel adviser taking $14k leaving the client with $186k to invest and interest on the debt on $200k.

I never will understand a number of matters associated with Storm Financial.  Pretty sure though some variation of it will occur at some point in the future.  Always does.


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## sailteam30 (28 February 2014)

I would like to share some GOOD news on StormFinancial - Yes, I borrowed, Yes I trusted an ASIC accredited financial adviser and Yes I lost a bomb - but the good news is the original deal gave me an incentive, confidence and initiative to quit my 9-5 job (gave me great pleasure telling the boss what she could do with her job) and start my own business which has gone very well indeed.

 I work 2 days a week and make 3 times what I made in the 9-5, I am my own boss, I employ someone part time to assist me and have recouped a lot of what I lost.

Thank you Storm Financial but I am disappointed with ASIC and the lawyers who are feeding sumptuously on the storm carcass - as someone said many posts ago, the only ones to profit from this will be the lawyers.

I am now more discerning and will never trust anyone again with my money - I make my own investments now so I now know who to blame if it goes belly up. 

But I would like to see someone join Bernie Madoff in the clink, but with ASIC running it then I doubt it very much.


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## pilots (28 February 2014)

What stoped us was that they wanted 7% of our life's savings and then wanted us to borrower a load more and take 7% of that as well, as we walked out the wife said to me our best investment would be for me to get a job at Storm.


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## Harleyquin (3 March 2014)

It's great to read success stories after the storm collapse. Five years down the track we are all tired and sick, and just want some enjoyment in our life. I don't want anyone else to suffer the way we have all suffered. Whether we were right in trusting these people for financial help is now beside the point, we did and thought we could. We now know we can't trust and shouldn't trust anyone with our financial decisions.

I understand those who are saying you only had to read a book on the subject, that may very well be true, but every person and situation is different.  If you are busy working and doing other things and don't feel confident in making major financial decisions what do you do? Some of the anti Stormie posters have recommended books on here, I made a list of them bought them and read them, and would also recommend some reading before investing, I just never thought of it before.


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## Julia (3 March 2014)

Harleyquin, an honest post.  Thousands of people will be as you were.

I wish you whatever sort of recovery you're able to make and hope time treats you with more kindness than in the last few years.

Julia


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## bunyip (4 March 2014)

sailteam30 said:


> I would like to share some GOOD news on StormFinancial - Yes, I borrowed, Yes I trusted an ASIC accredited financial adviser and Yes I lost a bomb - but the good news is the original deal gave me an incentive, confidence and initiative to quit my 9-5 job (gave me great pleasure telling the boss what she could do with her job) and start my own business which has gone very well indeed.
> 
> I work 2 days a week and make 3 times what I made in the 9-5, I am my own boss, I employ someone part time to assist me and have recouped a lot of what I lost.
> 
> ...




Sailteam

Well done on having the courage and initiative to branch out on your own – may your success continue.


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## Judd (4 March 2014)

It's a good question, Harleyquin.  I don't have an answer for you unfortunately.  You're no different from many in that you're busy, rushing around and the like.  I was in the same situation.  Some simply think and view things from another perspective.

As silly example, I was at a friend's home and the lady was enthused about her new dishwasher.  I assumed the old one had broken but no they had updated as the new one would save 8,000 litres of water a year.  Laudable objective.  Yet on the way home I wondered how much 8,000 litres would cost.  Turns out around $18.  So the lady disposed of a perfectly good dishwasher, spent say $800 in order to save $18 a year and thought the purchase was on the upside.  Sure looked nice but...........

Not a clue as to why some people think in different ways.  Just happens.


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## Harleyquin (12 March 2014)

Bunyip I have never 'asked for all my money back'. I knew there was some risk, however we thought with an ASIC backed planner and major banks involved PLUS asking for a low risk financial plan, would guarantee us that we would find ourselves in the best possible financial position in retirement. We were never going to have enough money to be a fully self funded retiree even with a financial plan in place.

I now realise that my lack of financial 'know how' and placing our trust in these people to give us the best possible financial results have made me the ideal 'muppet' as GG has often called us. Since the storm collapse we have all found out that there was a great deal going on behind closed doors that could very well be called 'highly unethical' at best. Hindsight is wonderful, had any of us known what was really going on, we would have run a mile.

Instead of the instigators of this collapse acknowledging any complicity, it has been 'easier' for all concerned to ' just blame the victims' by calling them greedy etc, which I know is not true.

The other big problem with this collapse has been the lack of support for the victims. One day we have a home, a job, our health and a financial plan in place. The next we have it all taken away, the distress has been horrific, far worse than anyone who has never experienced it, to even imagine. Unless it happened to you, you would have no idea. Suicides have and are continuing to occur because so many have been left with nothing and nothing to look forward too.

Most of us have contacted all the support organisations, but with this level of devastation they are really unable to help. We have been left to continue to take high dosages of anti depressants and sleeping tablets so that we can try and cope somehow.  If this type of collapse occurs again, and I believe that it will, there needs to be a specialist group in place where we can get some real support and not just some bandaid solution.

Now that the present government has reversed most of the recommendations put in place by the previous government, they are guaranteeing that a similar crash will occur. The banks have the money to fight any allegations in court, the victims don't have anything to fight for justice.


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## bunyip (19 March 2014)

Harleyquin said:


> Now that the present government has reversed most of the recommendations put in place by the previous government, they are guaranteeing that a similar crash will occur.




Further market crashes will occur regardless of which political party is in government, and regardless of what policies, rules, or regulations they have in place.
As always, some people will get badly burned by these crashes while others will profit from them.

Can you elaborate on which of the previous government's recommendations have been reversed by the Abbot government?



Harleyquin said:


> The banks have the money to fight any allegations in court, the victims don't have anything to fight for justice.



A number of people pointed out many times on this forum that this would be the case.


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## Harleyquin (20 March 2014)

I'm well aware, as you are, that market crashes can occur under any government Bunyip.

I don't need to elaborate on the changes that the Abbott government have reversed, they have been well documented in the media..

The last comment was well worth stating again.... and again and again if necessary.


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## DocK (21 March 2014)

http://www.smh.com.au/federal-politics/political-news/tony-abbotts-proposed-financial-advice-red-tape-cuts-could-raise-risk-20140319-352vv.html

The above article covers the gist of it.  I understand that a lot of financial planners are themselves against a return to commission-based remuneration rather than a fee-for-service as they feel it gives the large banks a vast advantage over them.


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## bunyip (21 March 2014)

Harleyquin said:


> I don't need to elaborate on the changes that the Abbott government have reversed, they have been well documented in the media..




I recall hearing something about it, but I didn’t take much notice because in my opinion  the ‘recommendations’ put in place by the previous Labor government did little or nothing to stop people from getting caught up in another investment debacle.
So I think it would have made little difference whether Abbot kept Labor's recommendations or scrapped them.


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## poverty (22 March 2014)

'Stormies' took a punt on the stock market with borrowed funds and lost, just like many have before them and many will after.  When you make a wager and you lose you sack up and pay the man.  No crying for your money back, you lost fair and square.  'Oh but I didn't know!'  'Oh I came to Storm for 'help' and they took advantage of me!'.  I just don't buy it, it was either greed or ignorance that led people down this path and they can't blame anyone but themselves.  If you feel the need to lodge a complaint the first place to look is in your bathroom mirror.


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## pilots (22 March 2014)

poverty said:


> 'Stormies' took a punt on the stock market with borrowed funds and lost, just like many have before them and many will after.  When you make a wager and you lose you sack up and pay the man.  No crying for your money back, you lost fair and square.  'Oh but I didn't know!'  'Oh I came to Storm for 'help' and they took advantage of me!'.  I just don't buy it, it was either greed or ignorance that led people down this path and they can't blame anyone but themselves.  If you feel the need to lodge a complaint the first place to look is in your bathroom mirror.




This has to be the best post on storm ever.


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## Harleyquin (27 March 2014)

Your callous comment 'poverty' shows how little you know or care about what really occurred before the crash.

We all have a far better idea now, what was really going on behind the scenes, so it's easy for you to make assumptions.

Had I been aware of just what was occurring I would not have had anything to do with Storm Financial.

The salesmen at SF were far more skilled at selling their product than you can imagine. We have been accused many times of not asking all the questions, believe me, I wrote down everything I could think of, to ask them. The answers we were given, and accepted, were simply not true.

None of us wanted to just risk everything on the stock market, quite the opposite in fact.

'What happened' and ' what we were told would happen' were very different scenarios.

Also it was easy to fool us, as we had no experience with the stock market and how it all worked.


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## Ferret (27 March 2014)

Harleyquin said:


> None of us wanted to just risk everything on the stock market, quite the opposite in fact.
> 
> 'What happened' and ' what we were told would happen' were very different scenarios.




That's very interesting, Harleyquin.  So did they tell you your money would be invested in a mix of asset classes?

My understanding was that Storm only used share market index funds and if they told you otherwise it would have been an outright lie.


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## joku (28 March 2014)

Ferret said:


> That's very interesting, Harleyquin.  So did they tell you your money would be invested in a mix of asset classes?
> 
> My understanding was that Storm only used share market index funds and if they told you otherwise it would have been an outright lie.




You've missed what he was trying to say there. He meant not risking it all on the stock market as in not risking house / livelihood due to leverage. I think most would have walked into storm planning to invest some spare cash they'd prefer not to lose but ultimately could. Whether it be greed, ignorance, stupidity, gulibility etc etc many left with their financial livelihood on the line. They had to have some idea but it's fair to say few would have left with anything even close to a good understanding of the relatively high probabilty for loss or the real potential extent of those losses.


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## Judd (28 March 2014)

joku said:


> You've missed what he was trying to say there. He meant not risking it all on the stock market as in not risking house / livelihood due to leverage. I think most would have walked into storm planning to invest some spare cash they'd prefer not to lose but ultimately could. Whether it be greed, ignorance, stupidity, gulibility etc etc many left with their financial livelihood on the line. They had to have some idea but it's fair to say few would have left with anything even close to a good understanding of the relatively high probabilty for loss or the real potential extent of those losses.




Regarding the part I have underlined, after many attempts at understanding, this is the overall view I arrived at in regard to the vast majority of former clients of Storm Financial.

The power of advertising is amazing when only the good aspects are stressed and the not-so-good aspects are muted.  Storm was about advertising in my view.  All done legally with every single compliance box ticked and checked as required.  What on earth could go wrong?


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## bunyip (28 March 2014)

joku said:


> They had to have some idea but it's fair to say few would have left with anything even close to a good understanding of the relatively high probabilty for loss or the real potential extent of those losses.




Which is why ‘poverty’ stated realistically that it was either ignorance or greed that led Storm investors down the path they chose. Yet he was labelled as 'callous' for making that statement.


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## Harleyquin (10 April 2014)

Sorry I don't understand exactly what those all are as I've never had anything to do with shares, all I know is that they weren't just ordinary shares, they were supposed to be safer, but I don't understand how or why.  That's why we asked someone who knew what they were talking about. I still don't understand why they are now considered so dangerous? All I do know is that you ask for help, think you're doing the right thing, and next thing you're being accused of being greedy etc etc, I'm sooo over all the corruption involved in this case.  I do wonder if the people at ASIC who are supposed to regulate this industry and those banking people who were prepared to lend the storm advisers unlimited funds, realise just how much damage they've done to so many, who went to a financial adviser thinking they were all trustworthy if they had all the right bits of paper. Today we know different. If we had just lost some money because of the GFS that we could accept, but to lose everything when you think you've got a conservative plan is soul destroying. So many lives have been destroyed. I know that those of you who do understand storms investment strategy will disagree with me and the more I try and understand exactly what they were up to, the more I understand why some would think we were just being greedy. None of us and our families will ever forget or forgive what these people have allowed to happen.


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## Judd (10 April 2014)

Harelyquin,

Yes, it can be very difficult and confusing especially where it is not clearly explained to you the possible ramifications.

It wasn't the shares.  Their prices go up, they go down, they go sideways.  My understanding is that the advisers of Storm Financial placed the clients into index funds which are just a baskets of shares reflecting the sharemarket itself.  Nothing particularly special or dangerous about them.  There really isn't.

The major danger you faced, and this was the part which was obviously not explained in full, was the amount of debt Storm encouraged people to take on to buy those index funds.  That is what wiped people out.  The more the market fell, the lower the value of index funds went but the debt you owed didn't.  In the end the amount you owed to buy the index funds was way more than the value of those funds.  And the banks wanted the money they lent to you even though you didn't have any.

I really cannot explain it in more simpler terms.


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## Harleyquin (22 April 2014)

Thanks Judd appreciate the explanation. My most pressing problem at the moment is that I need some financial advice desperately and have no idea who to trust. Our whole life has been turned on it's head. I regret the day I ever decided to seek financial advice.  So what's my next step???


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## DocK (22 April 2014)

Harleyquin said:


> Thanks Judd appreciate the explanation. My most pressing problem at the moment is that I need some financial advice desperately and have no idea who to trust. Our whole life has been turned on it's head. I regret the day I ever decided to seek financial advice.  So what's my next step???




I have no idea if they're what you're looking for, or whether their services are top quality or not, but here's a link to a free financial counseling site that may be useful:  http://www.financialcounsellingaustralia.org.au/Home


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## Harleyquin (24 April 2014)

Thank you Doc appreciate the link.


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## Harleyquin (18 May 2014)

The Four Corners program on cba, highlighted the tip of the iceberg into corruption. It may not have been the cba that is the problem, but those employees within the bank prepared to do so much that wasn't right. I don't understand how they could get away with this. Their actions allowed storm to do what they did to their clients. We thought we were getting a genuine financial plan. It is only when storm collapsed that we were being told that it was too good to be true.  That hurt because I though that we were doing the right thing taking for financial advice, I had no idea that it was too good to be true.  Obviously we were hoping to get ahead financially by seeking advice, but "too good to be true" no that was never the case.


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## Garpal Gumnut (18 May 2014)

Harleyquin said:


> The Four Corners program on cba, highlighted the tip of the iceberg into corruption. It may not have been the cba that is the problem, but those employees within the bank prepared to do so much that wasn't right. I don't understand how they could get away with this. Their actions allowed storm to do what they did to their clients. We thought we were getting a genuine financial plan. It is only when storm collapsed that we were being told that it was too good to be true.  That hurt because I though that we were doing the right thing taking for financial advice, I had no idea that it was too good to be true.  Obviously we were hoping to get ahead financially by seeking advice, but "too good to be true" no that was never the case.




Excellent comments HQ.

I have before advocated that Financial Management should be a core subject at school from Y1 to Y12.

Investment is a zero sum game, one wins as a consequence of another's loss, unless expansion occurs in the economy. 

Expansion usually stops when a bubble bursts as with the GFC, which destroyed Storm's model of "no losers".

gg


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## bunyip (6 June 2014)

Anyone see Jordan Belfort, aka ‘the Wolf Of Wall St’, interviewed on ‘60 Minutes’ a couple of week ago?

Belfort set up a stock brokerage company in the US that cold called thousands of wealthy investors every day to give them a sales pitch about penny stocks that supposedly had enormous upside potential that was about to be realized.
So good was the sales pitch that many investors gave the go ahead on the spot for staggering amounts of these stocks to be purchased on their behalf. His brokerage firm made huge commissions on these transactions. 
No questioning of the advice being given, no research into the stocks – Belfort and his brokers said the stocks were a great buy, so the gullible investors bought up big.
One character blew 250 grand on one stock alone without even bothering to check into what he was buying.
At the height of his ‘success’, the unscrupulous Belfort made almost a million dollars a week over a 12 month period.
The law caught up with him eventually and put him in prison where he belonged.

Yesterday I got cold called by someone with a foreign accent telling me that I should buy gold. I hung up on him shortly after he began his sales pitch.

A few years ago a backhoe operator who was doing a job for me asked me if I knew of such and such a company. I told him I’d never heard of it, what did they do? He said he’d never heard of it either, didn’t know what the company did, but he’d just sunk six grand into it.
In answer to my query as to why he’d invest in a company he’d never heard of, he said he’d been cold called at three in the morning by a foreign accent telling him what a great investment this stock was. So he took a punt and invested six grand. 
Of course his money is gone – he can’t even find any record of the company having ever existed.

Moral of the story.....look into investments carefully before spending your money, otherwise run the risk of falling victim to the next Jordan Belfort, Storm Financial, or someone else who will happily line their pockets at your expense. 
Unscrupulous people are everywhere, but you don’t need to fall victim to them if only you think things through carefully before you act.


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## Frank Ainslie (26 June 2014)

Garpal Gumnut said:


> Excellent comments HQ.
> 
> I have before advocated that Financial Management should be a core subject at school from Y1 to Y12.
> 
> ...




Hi All,

It's been along time between drinks!

Gumnut! It's not about educating financial advisers or would be investors. It's about putting in place a set of rules that financial advisers must follow. The penalties for not doing so must be severe enough to make them think twice before deceiving people. Of course, this is a pipe dream because the powers that be don't want to fix the problems in the financial sector Think about it for a moment. A whole new industry has grown up out of other people's misery. Lawyers, for instance, are having a field day because the abuse is growing rather than abating. Read THE AUSTRALIAN if you don’t believe me. 

I am currently writing a book called, 'THEY PRACTISE TO DECEIVE' which is not so much about Storm Financial or us for that matter, but rather about what happened to us afterwards. The ‘aftermath’, so to speak!

In my book everyone gets a mention; Storm, the Banks, ASIC, the Judiciary, the lawyers, the Government, the Media etc. My book is aimed at the general public in Australia who need to be informed about the hidden dangers that exist in the financial sector, and the lack of protections that still exists today for the unwary. 

We, the people that lost our money in Storm, will never get it back. So be it! However, if I can stop others from placing their trust in an industry that cannot be trusted, then the experience will have been worth it. 

This Government and ASIC will never do anything about fixing the financial sector until people wake up to themselves and stop investing. I hope that my book will make them do just that. 

What's that old saying, 'The truth will set you free!' Well it's time the people of Australia learnt about the weak-kneed approach this government and ASIC has to the wrongdoers. Band aid solutions to the problems that are inherent in the financial sector are not the answer. 

Public perception is everything. For those in the financial sector, there's a STORM coming your way now. Let's see how you cope with it?

Every politician, media outlet, bank CEO, ASIC, social media platform, (this forum ) etc will be sent a copy. 

Yes, this is 'payback' time. If I can cause the same misery to the financial sector, and the people that control this area, that they have caused to the people that placed their trust in Storm , I will die a happy man.  

_“Bitter and twisted? You betcha!” _Since we invested using Storm, we have been lied to and deceived not only be Storm but by everyone else as well. If I had a sword, I would have dispatched a few of these miscreants long before now. Since I do not, a pen will have to suffice. I’m told it’s mightier than the sword anyway.


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## Julia (26 June 2014)

> This Government and ASIC will never do anything about fixing the financial sector until people wake up to themselves and stop investing. I hope that my book will make them do just that.



You seem to miss the reality that hundreds of thousands of people, millions in fact, have been successfully investing for much of their adult lives.  They are the ones who have taken the steps to become financially literate and have no need of advisers.

Good luck with the book.  And even more good luck if you think any book will upend the financial services industry.


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## Knobby22 (26 June 2014)

Frank 

It was "The Age' that outed CBA for their dodgy practises.
As a result CBA will no longer advertise with any Fairfax radio station or paper.
You can see why The Australian prefer to cuddle up.


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## Judd (26 June 2014)

Frank Ainslie said:


> I am currently writing a book called, 'THEY PRACTISE TO DECEIVE'...........




I look forward to coming across it while browsing through the remainders bin.


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## bunyip (28 June 2014)

Frank Ainslie said:


> It's not about educating financial advisers or would be investors. It's about putting in place a set of rules that financial advisers must follow. The penalties for not doing so must be severe enough to make them think twice before deceiving people.




You're dreaming if you think we can entirely fix up the financial planning industry and eliminate the crooks simply by increasing penalties and introducing new regulations. Rules and regulations and severe penalties for offenders haven’t stopped corruption or incompetence or dodgy practices among unions, police, politicians, doctors, the building industry, and all manner of other industries. 
I’m not saying that improvements can’t be made. But unless investors carefully evaluate the advice they’re given, there will still be people who’ll get caught by the odd shonky planner.





Frank Ainslie said:


> We, the people that lost our money in Storm, will never get it back.



And nor should you. If you punt your money on an extremely risky investment, mortgage your home to borrow more money to punt on the same risky investment, then use double gearing to borrow even more money which once again you punt on this risky investment.....then there’s no way in the world that you should be entitled to get your money back if if the market crashes and you lose everything.
Nobody forced you to take the risk, Storm informed you in their statement of advice that the stock market is a risky investment. The bank you dealt with was your financier, not your financial adviser. 
If you think you should be entitled to get your money back, then who exactly do you think should have to give it back to you?




Frank Ainslie said:


> Public perception is everything. For those in the financial sector, there's a STORM coming your way now. Let's see how you cope with it?



Ah yes....you’ve been hoping for and predicting dire outcomes for the financial planning industry for quite some time now. And yet financial planners across the board have reported a significant increase in business since the 2008 financial crash.
Your hate campaign against financial planners will be viewed with amusement by many. It will take a lot more to bring down the financial planning industry than a vindictive book written by a disgruntled investor who was largely the architect of his own problems.



Frank Ainslie said:


> Yes, this is 'payback' time. If I can cause the same misery to the financial sector, and the people that control this area, that they have caused to the people that placed their trust in Storm , I will die a happy man.



You’ll die a happy man? I doubt it. I think it’s more likely that you’ll die a bitter, resentful, twisted old man because you’ll spend the rest of your life ranting and raving about the perceived injustices of the system, rather than having enough character to face the fact that you are largely responsible for the decisions you made, and the outcomes of those decisions.


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## basilio (28 June 2014)

Bunyip I think you are being really rough on Frank.

I suggest there are very real concerns about the quality of advice given by Financial Advisors. Many people on this forum have offered their own experiences on just how questionable or down right deceitful the industry has been in their experience.

The Storm experience is one particular example.  But even as that is unpacked we can see just how culpable the CBA has been with it's treatment of people via it's financial planners.

On a personal level I have seen a number of friends very badly advised through the financial planning industry.
*
I have a lot of respect for Frank to being prepared to fight  and keep fighting on behalf of the thousands of people who have been misled or just plain ripped off by financial planners. * You certainly have to be a bit of a fanatic to keep going when "commonsense" or external pressure is brought to bear to back off.  In the end however I hope that his book does pull together not only his experiences *but  the work of other people who have also been campaigning to  clean up the industry.* (_You there Frank ?_) I suggest there is value in a collaborative approach that brings a number of voices to the table and exposes this industry in ways that finally do force action.  Journalist like Michael West for example and there is a woman in West Australia who has been hammering for years on the issue.

I do not think the average Joe is  really able to ask the type of questions that will bring a dodgy planner to account.  The industry is based on getting people to sign over their money.  They are very good at it.

Cheers.


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## bunyip (29 June 2014)

basilio said:


> Bunyip I think you are being really rough on Frank.




Yes, it can be rough on a person to be confronted with unpalatable truths that he’s in denial about. But that shouldn’t stop honest and fair-minded people from speaking out.



basilio said:


> I suggest there are very real concerns about the quality of advice given by Financial Advisors. Many people on this forum have offered their own experiences on just how questionable or down right deceitful the industry has been in their experience.




Of course there are concerns about some of the advice being given. But I object to one embittered old man trying to blacklist the entire financial services industry because he got done over by a shonk. 
One bad apple doesn’t mean the entire case of apples is bad.
While you and Frank and others were getting the wool pulled over your eyes by one greedy operator, thousands of other investors were getting good advice from their financial planners. 
In one of the few honest and realistic posts that Frank has sent to this forum, he admitted he lost everything because he didn’t have enough common sense to check out a number of financial advisers and compare their advice, rather than consulting just one firm and blindly believing everything they told him.

I have no objection to making changes for the better. But I still maintain that the best protection for investors is to get some basic investment education that’s freely available (a suggestion which Frank scoffs at, incidentally),  to use a bit of common sense by comparing a number of planners, then evaluating their advice to the best of your ability before proceeding.
Better regulations could help, but are no guarantee against investors getting dudded. They need to have some basic knowledge and they need to employ a fair measure of common sense. 



basilio said:


> The Storm experience is one particular example.  But even as that is unpacked we can see just how culpable the CBA has been with it's treatment of people via it's financial planners.




Yes, that’s a bad business and the CBA must be held accountable for the poor advice they gave. But that’s a separate issue to the Storm debacle where CBA was the financier, not the financial adviser. It was Storm who gave the advice – it’s Storm who should have been sued. But of course there was no point is suing someone who was incapable of paying compensation anyway. So you Storm investors decided to target the banks because they have deep pockets and therefore the capacity to pay.
Whether or not they were the cause of your losses was apparently of no importance. You were just on a money grab from whoever you thought you could get money out of. Hell, at one time a bunch of Storm investors even petitioned the government to use taxpayers money to refund the losses of Stormers. Again, it was apparently irrelevant that Aussie taxpayers hadn’t caused your losses. Money grabbers will grab money from anyone they can, and to hell with fairness.
Tell me, Basilio, if I borrowed a grand from you to put on a ‘sure thing’ in Race 4 at Flemington, and my sure thing came home in last place, would you understand if I told you the loss wasn’t mine, it was yours because it was you who lent me the money?
Of course you wouldn’t. You’d tell me the loss was mine because it was me who took a punt.
Why then should your financers, the banks, have been expected to make good the losses of a group of people who took a punt on the stockmarket. It’s nonsensical to even suggest it.



basilio said:


> I have a lot of respect for Frank to being prepared to fight  and keep fighting on behalf of the thousands of people who have been misled or just plain ripped off by financial planners.




OK. And do you have a lot of respect for someone who admits he’s so bitter and twisted that he wants to cause misery to the financial sector, despite the fact that it was only one bad apple in the financial sector that led him astray. And despite the fact that many thousands of people have had good service from financial planning firms.
Do you have a ‘lot of respect’ for a man who scoffs at suggestions that basic financial literacy which can be taught in schools could go a long way towards empowering people to make a reasonable evaluation of any financial advice they’re given. Or better still, empower them to make their own investment decisions like so many successful investors are doing.


basilio said:


> I do not think the average Joe is  really able to ask the type of questions that will bring a dodgy planner to account.



And yet we have people who oppose the suggestion that basic investment and financial education should be taught in schools so as to better equip people to ask questions of financial planners, and evaluate the advice they give.

For years I’ve been hearing people claim that Storm investors couldn’t possibly have seen the pitfalls in the Storm model. To these people I say.......
Was the average Joe, prior to investing through Storm, able to look at the 1987 market crash that happened only 20 years earlier, and ask him/herself how a similar crash would affect him if he went ahead and followed Storm’s advice?
Do you think the average Joe is able understand that the volatility of the stockmarket gives you potential for both profits and losses, and that profit and loss potential is greatly magnified if you borrow a load of money to invest in the market?
Do you think the average Joe was able to watch a TV news program once a day and heed the dire warnings of an impending financial crash that were given in every media outlet every day for at least a year before the crash happened?
Do you think the average Joe was able to read Storm’s statement of advice and take note that Storm described the stockmarket as a risky investment?
Do you think it was within the mental capacity of the average Joe to see the obvious contradiction in Storm advising people to get their hands on every available dollar by cashing out super and assets, mortgaging homes and borrowing to the hilt, double gearing, and then shoving all that money into an investment which Storm themselves had already described as risky?

I say it’s well within the mental capacity of the average Joe to do all of the above, if only they bother to think things through and use a modicum of common sense. Teach some basic investment education in schools so that people are even better equipped to deal with financial planners, or better still, can handle their own financial affairs like millions are already doing.


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## Glen48 (29 June 2014)

At at present to become a financial adviser it is an 8 day course.
Day 1 would be a video preservation how so set up a web site and search for Merc's/Rollers to impress your victims.


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## Julia (29 June 2014)

Glen48 said:


> At at present to become a financial adviser it is an 8 day course.
> Day 1 would be a video preservation how so set up a web site and search for Merc's/Rollers to impress your victims.



8 days?   Really?   That sounds incredible.  Are you saying they would come out of those 8 days properly qualified as financial advisers?  Could you provide a link to this information?


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## Julia (29 June 2014)

This looks like it, Glen?



> ASIC RG146 Diploma of Financial Planning
> 
> RG146 Financial Products – Diploma of Financial Planning Course Options
> 
> ...




Is there some sort of qualifier over this or is it really correct that someone knowing nothing can - in eight days - be legally eligible to advise people on how to invest their money???
Just can't believe that it can be so.


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## basilio (29 June 2014)

Lots of heat in this discussion isn't there ?

Bunyip you dissected my overall support for Franks tenacity in much detail.  As I read it you believe that "the average Joe" really should be able to make a better judgment call on Financial advisors if they simply use their own judgement.

You also (I think) have some sort of excuse for CBA in the sense that the Storm investors only went after the bank because they had deeper pockets than the principals of Storm.

I disagree with a basic premise of your statement - that there are only a few bad apples in the Financial planning system and that overall thousands of planners are giving people good advice. It's my view that in fact there are only a relatively few quality independent Financial Planners and that the majority of the people in the industry are glorified and reinvented  Insurance salesmen.

Why do I think this ?

1) Choice magazine has spent 20 years campaigning against the vested interest structure of the current financial planning industry. Check out the reference and see just how conflicted the advice given to people actually is.

2) I have had a number of friends who have been given advice and I know a few Financial planners. Interestingly enough the few independent planners I know struggle to make a living. They are simply swamped by a sea of salesmen who are employed by the big funds to keep their products being sold.

3) The fact that one can be a Financial planner in an 8 day course  should sound extreme warning bells.  

4) I read the description of how the CBA allowed/encouraged it's best (most profitable) planners to sell products in whatever way necessary to keep the funds afloat - just before they crashed. It was a horrific story that resulted in many people losing their life savings unnecessarily

5)* Finally and most significantly.*  I have watched for many years the regular emergence of totally dodgy  investments in the agricultural and building areas. These were areas of real damage where  Financial planners were partners in directing clients into quite dangerous investments based on the 5-8 10% commission they were receiving.  Now if the industry had the remotest respect for it's clients and the ethics of its advice they would have taken action to expose these shonks and refused to promote them.  Never did, never would, totally corrupted.

If you want clear and honest advice Bunyip take on board the following thoughts.

The Financial planning industry in Australia is the creature of the industry and it's employees. There is no commitment to clients beyond ensuring they are clipped as ruthlessly as possible. As a consequence of that the customers  are essentially overcharged at every point and  if they actually obtain some financial return it is* despite* rather than because of these services.

http://www.choice.com.au/reviews-an...cial-advice/page/20 years of campaigning.aspx


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## basilio (29 June 2014)

Couldn't resist adding adding this comment from another Forum member re Financial planners



> My ex-Financial Advisor sold nothing but MLC Products. They were so successful that they were able to cull their least profitable clients i.e. clients with low balances in MLC. At the time I was upset at being rejected but it was a blessing in disguise. I removed the other advisor they recommended and stopped their trailing commissions. Then I learned one or two things about Super and switched my low balance to an Industry Fund. Had I not being culled, I would have foolishly believed that my advisor had my best interest at heart. It is a strange thing to thank GFC for reducing my balance so that I was not good enough to be part of my ex-Financial Advisor's client list.
> 
> (I currently receive no advice on my current Super but it has performed way better than my previous Super - with MUCH less fees. Pity I do not have enough to justify SMSF - not worth, rather keep a minimum in Super. This thread is influencing my decision
> https://www.aussiestockforums.com/for...=24666&page=35
> ...




It reminded me that I have helped 3 different friends with financial advice/analysis over the years who were involved with MLC. Each incident opened my eyes to the costs, lack of return and bad value from their products.


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## Iggy_Pop (29 June 2014)

It is not just Australia, looking at this link

http://www.wealthdaily.com/articles/retirement-scams/5223?lloct=2

Retirement Scams
It's Legal Robbery


By Briton Ryle
Wednesday, June 25th, 2014
It's sickening how far Wall Street will go to line its pockets with the money of unsuspecting Americans. I would call this latest revelation a scandal, except it's hardly making headlines ”” even though it involves fraud. The story involves rolling over 401(k) accounts into IRAs.
As a long-term income/dividend investor, I love IRA accounts, especially the Roth variety. They are powerful tools that allow the individual investor to avoid taxes as they invest for retirement.
And Wall Street has found a way to pervert them for its own gain.
You probably know that when you change jobs or retire, you have the option to roll your 401(k) account into an IRA. It's usually a good idea because you can get your money into an account that avoids certain taxes and also offers you a much better assortment of investment choices.
For instance, most 401(k) plans only offer you mutual and index funds, while you can buy individual stocks in IRA accounts.
But you can also gain access to a lot of non-stock investments that may have higher fees and not be as easy to buy or sell.
This is where the problems start. Bloomberg recently told the story of a few people who rolled their 401(k) accounts into managed IRAs and got totally shafted.
One such investor, Manuel Gonzalez Martinez, put his $150,000 nest egg in Puerto Rican municipal bonds on the advice of his broker. These bonds had a 3% upfront sales fee and annual fees of 1% a year.
In one year, that's $6,000 in fees. Outrageous. And it gets worse.
Puerto Rico's economy tanked after the financial crisis. Now those bonds are worth only $90,000. Throw in all the fees, and Manuel's retirement savings have been devastated by more than $50,000 in losses.
Know Your Investments: Non-Traded REITs
Another investor, Maria Lew, watched her IRA account balance fall from $390,000 to $100,000 after some of her money was put into non-traded REITs.
I love REITs as a dividend investment. And my Wealth Advisory income newsletter has seen some excellent returns from top-quality REITs. But you should know that even though they may sound similar, there are some big differences between a regular REIT and a non-traded REIT.
A non-traded REIT is a real estate investment trust (REIT) that doesn't trade on a stock exchange like the New York Stock Exchange or the Nasdaq. Because of this, it can be very hard to sell your shares when the price starts dropping.
Not only that, but non-traded REITs can carry a huge 10% commission right off the top. Of that, 7% goes to the broker that recommends them.
Also, non-traded REITs don't have to report estimated per-share value until 18 months after they are done raising funds. The fund raising might take two or three years. In other words, it could be years before an investor in a non-traded REIT has any idea what the REIT is actually worth.
How is this even legal?
If you ever have a broker suggest a non-traded REIT to you, you can be pretty sure he or she is ripping you off.
In 2013, broker-dealers sold $20 billion in non-traded REITs. That's $1.4 billion in commissions that came out of some people's retirement savings and went right into brokers' pockets. I'd call it a $1.4 billion rip-off.
Legal Robbery
Bloomberg also told the story of how nine investors lost over $1 million after rolling over their 401(k) plans. This time, their broker put their retirement savings into highly risky ventures like oil and gas private placements.
Another popular retirement scam to separate individual retirement investors from their money is variable annuities.
Now, many retirees understand that an annuity provides insured income. A variable annuity preys on the perception of the safety in a regular annuity, and at the same time, it offers upside potential. A variable annuity invests like a mutual fund, so your income is variable as to whether the stocks go up or down.
The insurance component of the variable annuity usually assures you that you'll receive at least your principle back if you die ”” but that may be it. The problem with variable annuities is fees. There's a 7%-8% up-front commission, and annual fees can run 3% a year. Plus, the insurance component can take another 1% a year.
Variable annuities exist to generate fees for the broker and the sponsor company.
Non-traded REITs, Puerto Rican muni bonds, oil and gas private placements, variable annuities ”” none of these investments has any business being in your retirement account. They are all much more risky than they sound and carry high fees and even commissions to the broker that sells them to you.
So why are they pushed so hard on unsuspecting investors? It's mainly because, from a legal perspective, the broker is not held to a fiduciary standard ”” that is, his is not required to put his clients' interest above his own.
Normally, if you have money in a trust, for instance, the trustee is required by law to uphold his or her fiduciary duty ”” to put your interest above his or her own. Brokers aren't held to that reasonable standard.
Surprised? Well, brokers are only required to sell products that are suitable for clients. The standard for what is suitable seems to be whether they can afford the particular investment product ”” and the fees and commissions.

In 2010, the Dodd-Frank financial regulation law gave the SEC the authority to propose a rule requiring brokers to act as fiduciaries. The SEC has done nothing.
The Department of Labor, which oversees retirement plans, has yet to act on the fiduciary issue, either. It was supposed to have a proposal out in August, but it recently pushed the date to January 2015. The Labor Department had already proposed a fiduciary standard in 2010 but then withdrew it in 2012 after Wall Street protested.
The Securities Industry and Financial Markets Association (SIFMA) is one of the financial industry's main groups working against a fiduciary rule for brokers.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said: “From day one, [the fiduciary rule proposal] has been a troubled proposal by DOL that will harm the ability of everyday American investors and small business owners to save for retirement.”
The Insured Retirement Institute (IRI) is another.
IRI President and CEO Cathy Weatherford said, “IRI continues to be concerned that a forthcoming [fiduciary] rule proposal from the DOL could have unintended consequences that would ultimately deprive lower and middle-income Americans from accessing affordable retirement planning services and advice.”
Wall Street is spending millions lobbying Congress to kill this fiduciary rule. Their message is clear: American investors need to be gouged by unscrupulous brokers in order to save for retirement.
My message should be clear too: be aware that Wall Street is targeting your retirement savings. Be aware that they want to trap you in bad investments with high fees and commissions.
And be aware that it is perfectly legal for them to do so.
Until next time,


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## Julia (29 June 2014)

I think, fwiw, that basilio and bunyip are both right.

The self interested actions of the financial services industry are what they are.  The government seems little interested in improving this and even the most stringent rules will not preclude clever salespeople taking advantage of ignorant clients.  Mostly they are not acting illegally.  Even the approach of Storm of the double gearing was quite legal and indeed would have made clients very, very happy whilst the market was rising.

So, rather than railing against the miserable unfairness of it all, the pragmatic approach would surely seem to be to acquire enough financial literacy to be able to call these so called planners on their dodgy approaches if this occurs. 
Even if you decline to take full control of your own finances, at least educate yourself enough to know when you're being used.  Some of the Storm clients said they just didn't understand what they were becoming involved in.
Never, ever invest in anything you do not understand.
Always believe that you will yourself have your own interests at heart in a way that no 'expert' will.


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## cynic (29 June 2014)

Julia said:


> I think, fwiw, that basilio and bunyip are both right...



+1



Frank Ainslie said:


> ...I am currently writing a book called, 'THEY PRACTISE TO DECEIVE' which is not so much about Storm Financial or us for that matter, but rather about what happened to us afterwards. The ‘aftermath’, so to speak!
> 
> In my book everyone gets a mention; Storm, the Banks, ASIC, the Judiciary, the lawyers, the Government, the Media etc. My book is aimed at the general public in Australia who need to be informed about the hidden dangers that exist in the financial sector, and the lack of protections that still exists today for the unwary.
> 
> ...




There are those that share some of your opinions. However, I do wonder about the efficacy (or lack thereof) of your approach to this matter. 

What do you believe yourself capable of expressing with your mighty pen strokes that hasn't already been expressed many times before?

How receptive do you think those, like you once were, will be to your warnings?

Do you truly believe that Frank "Past" would have paid the slightest bit of attention to any of the warnings issued by Frank "Present"?


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## bunyip (30 June 2014)

basilio said:


> Lots of heat in this discussion isn't there ?



Not really...I think the discussion has proceeded in a calm and reasonable manner so far. There’s no reason it can’t continue calmly and reasonably as long as nobody resorts to the ranting and raving and name-calling that has marred this thread in the past.



basilio said:


> Bunyip you dissected my overall support for Franks tenacity in much detail.  As I read it you believe that "the average Joe" really should be able to make a better judgment call on Financial advisors if they simply use their own judgement.



I believe the average Joe who invested through Storm could have made a far better judgment call if they’d followed the common sense guidelines I outlined in my previous post. And I believe it was well within the ability of every one of them to do so.
I also believe that some basic finance and investment knowledge is a powerful ally for any investor regardless of whether they handle their own affairs or use a financial advisor/planner.
Think of it this way - if I have some basic mechanical knowledge and you have none at all, am I better equipped than you when it comes to assessing the advice a mechanic gives me about my car? Of course I am.
Mechanical knowledge doesn’t come easy, but finance and investment knowledge does. They’re available free to anyone who wishes to avail themselves of the opportunity to learn. At the very most you might want to invest in a couple of thirty dollar books.
If the basics of finance and investment were taught in schools, then so much the better.



basilio said:


> You also (I think) have some sort of excuse for CBA in the sense that the Storm investors only went after the bank because they had deeper pockets than the principals of Storm.



I make no excuses for any bank. I simply attempt to speak truthfully in saying that the banks were your financiers, not your financial advisers, and are therefore not the primary cause of what happened to Storm investors. 
Believe me, I’m no fan of banks. They’re greedy bastards at the very least, and often incompetent as well. But they cannot and should not be blamed for your losses which were caused by a combination of dodgy advice from Storm, acceptance and application of that advice by Storm investors, and a meltdown in the stock market. 


basilio said:


> I disagree with a basic premise of your statement - that there are only a few bad apples in the Financial planning system and that overall thousands of planners are giving people good advice. It's my view that in fact there are only a relatively few quality independent Financial Planners and that the majority of the people in the industry are glorified and reinvented  Insurance salesmen.



I made no claim that there are ‘only a few bad apples’ in the financial planning industry. On the contrary, I’ve spoken out in more than one post against the commission salesmen who masquerade as financial planners, but  in reality are simply glorified salesmen who have a vested interest in putting you into the investment products that pay them the highest commissions. 
I do, however, reiterate my view that Frank is not being reasonable in his stated objective of causing misery to the financial sector because he got poor advice from just one firm.
If he’d consulted a number of firms and compared their advice, he may have achieved a very different outcome.
Also, if the market had continued rising then Frank would have been wearing a smile as big as a carpark, and he would have had glowing praise for the very same advice which has so embittered him that he’s embarked on a personal vendetta to cause misery to the entire financial sector.



basilio said:


> If you want clear and honest advice Bunyip take on board the following thoughts.
> 
> The Financial planning industry in Australia is the creature of the industry and it's employees. There is no commitment to clients beyond ensuring they are clipped as ruthlessly as possible. As a consequence of that the customers  are essentially overcharged at every point and  if they actually obtain some financial return it is* despite* rather than because of these services.



Thank you Basilio, for your ‘_clear and honest’_ advice.
And since you were one of the people who were caught by Storm Financial, whereas I was one of the people who avoided getting caught, then I think it’s only fitting that I reciprocate by giving you some ‘clear and honest’ advice of my own.

* By all means push for some changes to the financial advice industry if you think they can help. But be careful of over-regulating the financial industry to the extent that it becomes unworkable. Despite its imperfections, many investors are doing very nicely in the current system.  Over-regulation has stuffed up too many industries already. 

*  Don’t kid yourself that rules and regulations and penalties for offenders can ever guarantee to eliminate incompetence and crooked operators. We have rules and regulations that supposedly govern the conduct of the police force, with stiff penalties for those who break them. And yet corruption has been endemic at the highest levels of the NSW police force in the years since former Queensland police commissioner Terry Lewis copped a 14 year jail sentence for corruption. 

* Don’t underestimate the value of common sense and clear thinking when it comes to investing. You and I both know that Storm investors could have achieved a very different outcome if they’d used a modicum of common sense and clear thinking before signing on with Storm.

* Don’t underestimate the value of equipping yourself with basic finance and investment knowledge. And don’t overestimate the difficult of achieving it. It’s not at all difficult to learn the basics and it’s completely free. 
Every intelligent person will see the benefit of making this education part of the school curriculum. Just an hour or two a week is all it would take to teach the basics.


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## Hodgie (30 June 2014)

Julia said:


> Is there some sort of qualifier over this or is it really correct that someone knowing nothing can - in eight days - be legally eligible to advise people on how to invest their money???
> Just can't believe that it can be so.





Its not correct. They estimate that it will take around 9 months to a year, 3 separate modules which they each give you 3 months to complete, however you can pay to extend the time period. The 8 days may be about showing up for in person workshops. If you know nothing your not going to pass any of the assessments. You need to get 70-80% on all of the exams to be considered competent. 

I have the text books, there are thousands of pages of material to read. you have to complete an exam as well as an assignment for each module. So 6 assessments in total. 

It probaly took me around 6-7 months (I cannot remember exactly). But I only got it as it was a work requirement to be RG146 compliant as part of a job I had at the time (and im not going to turn down education if work is paying for it!). I did not practise financial planning myself though (just audit them). 

With the basic qualification it does not allow you to provide advice on just anything. There is also the advance diploma as well as specialists subjects which must be completed in addition to the basic diploma before you can cover all the areas. (direct equities, margin lending, SMSF are all examples of additional subjects)

On top of that, someone who gets the qualifications will need to then become a representative of a holder of an Australian Financial Services License. the AFSL holder should be doing their background checks on any potential persons who would represent their company and provide financial advice. If you have never provided financial advice to anyone before and merley have the qualification it is very unlikely that they will take you up as an authorised representative, you will have to first undergo a training period and learn how to deal with clients and how things work in the real world etc. If there is a dodgy planner, the compliance department of the AFSL needs to be tightened up!


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## Julia (30 June 2014)

Thank you, hodgie.  Much appreciated reassurance.  Even then, just six or seven months of theoretical stuff seems a bit inadequate but hopefully considerable training will be given before letting the newly 'qualified' loose on real clients.

How is it, though, that the organisation whose link I provided earlier claim someone can be RG146 compliant in just eight days?


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## basilio (30 June 2014)

> And since you were one of the people who were caught by Storm Financial,



  Bunyip.

Never said I was caught up in Storm.  Never was and would never, *ever* have considered jumping in.  
I would have thought the rest of my comments on Financial planners and the industry as a whole would have given some indication of my position.

I'll cut the chase.  The superannuation industry represents the biggest swag of money in this country. It is teh cornerstone of  finance investment, development and people's lives. It also represents the security of millions of people.

I believe these funds are not invested as well as they should be. I suggest that the driving forces of financial planners, commission salesman and spivs has allowed too many dodgy  investments to be sold and ultimately fail.  The winnersin this case are the salesmen and the crooks who develop the schemes. Chief amongst these schemes have been the agricultural programsm that have almost always fallen over and were generally a glorified tax dodge.

Secondly I believe the overall management of these funds is an excuse for rent seekers everywhere to gouge the clients - us.  The practice of churning people in and out of funds, trailing commissions, commissions on entire funds all conspire to reduce the amount finally available to teh customer. This was the principal reason for industry funds to emerge as unionists realized their compulsory super was being hacked by  the MLC's and AMPS of this world.

My belief is that it would be in Australia's interest as a nation and individual citizens interest to take action on both the investments and the management of these funds.


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## Hodgie (1 July 2014)

Julia said:


> Thank you, hodgie.  Much appreciated reassurance.  Even then, just six or seven months of theoretical stuff seems a bit inadequate but hopefully considerable training will be given before letting the newly 'qualified' loose on real clients.
> 
> How is it, though, that the organisation whose link I provided earlier claim someone can be RG146 compliant in just eight days?




I said it took me 6-7 months, they give you 9-12 months. I had already studied finance and economics at universifty for 4 years so I spent minimal time studying. I only got the diploma because it was a work requirement to be RG146 compliant. But yeah I agree that even then it's not a whole lot of time being educated to be taking control of someones finances. The on the job training is far more important. Keep in mind that the average age of a financial planner in Australia is around 58, so its not like we are usually letting freshly educated students provide advice. 

In response to the 8 day thing, im not familiar with the course offered by IBI because I used Kaplan so I cannot say for certain but they are all ASIC regulated courses so I would imagine that they would be much the same. The way I read it is that there are 8 workshops you have to show up to in person which would be amoungst completing all the other assessments and study. It's probaly just an optional choice of how the student wishes to complete the course, you can either do it in person or online. When I did mine it was all 100% online, I never saw or spoke to anyone from the learning institution so I don't know what goes on at those workshops.


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## bunyip (1 July 2014)

basilio said:


> Bunyip.
> 
> Never said I was caught up in Storm.  Never was and would never, *ever* have considered jumping in.




Well I'm pleased to hear that, Basilio – it must have been someone else I was thinking of.



basilio said:


> I'll cut the chase.  The superannuation industry represents the biggest swag of money in this country. It is teh cornerstone of  finance investment, development and people's lives. It also represents the security of millions of people.
> 
> I believe these funds are not invested as well as they should be. I suggest that the driving forces of financial planners, commission salesman and spivs has allowed too many dodgy  investments to be sold and ultimately fail.  The winnersin this case are the salesmen and the crooks who develop the schemes. Chief amongst these schemes have been the agricultural programsm that have almost always fallen over and were generally a glorified tax dodge.
> 
> Secondly I believe the overall management of these funds is an excuse for rent seekers everywhere to gouge the clients - us.



I’m not disagreeing with your views that there are dodgy practices within the industry. I have never and will never argue against trying to make changes for the better.
But I _*will*_ argue with the view that regulating the industry is all that’s needed to stop people getting ripped off or given inappropriate advice. There will still be investors who get caught if they believe  they don’t need to think, don’t need to be cautious, don’t need to use a bit of judgment and common sense, that all they need to do is hand all the responsibility over to the professionals.

Basic literacy in financial and investment matters, and plain common sense, are just as important as rules and regulations when it comes to investing without tears.
Talking of common sense – I’ve seen the prospectus on a number of those agricultural investment schemes you mentioned, and for the life of me I can’t see why anyone would consider them a good investment. As with Storm, I believe modicum of common sense and clear thinking should have caused people to run a mile from those schemes. 
If we take ostriches as an example – there wasn’t even a decent market or a reliable demand for ostrich products, and yet investors waded in and paid up to ninety thousand dollars for a breeding pair. That’s just crazy stuff, a good example of people not bothering to do some basic homework before jumping in.


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## luutzu (1 July 2014)

bunyip said:


> Well I'm pleased to hear that, Basilio – it must have been someone else I was thinking of.
> 
> 
> I’m not disagreeing with your views that there are dodgy practices within the industry. I have never and will never argue against trying to make changes for the better.
> ...




I think the problem is that most people, understandably, assume the professional planners are actually professionals - they are regulated after all, there are Watchdogs etc. - so it's easy to assume that planners with no skill won't be licensed, or if dodgy, ASIC or the law will already lock them up.

Since we assume a professional knows what they're doing, who are we to question them... and if people do questions, it's a certainty the dodgy, smooth talking "pro" already have answers to all of the questions.

I mean, how many of us question a doctor's prescription?

If an investor could know enough about the risk (assuming it was told to them without sugar coating), know a lie or a blatantly false promise when they hear one, then the pro isn't doing their job and the investor won't be needing advice in the first place.

---

I think the Financial Planning Association should put across all its licensed planners certificate a warning:  "We think this guy is OK, but that's only because he hasn't screwed anyone up and taken to court yet. Take advice at your own risk."

ASIC: We will only [try to ] go after bad eggs once they screwed enough people over. Else, we're only charging fees for licensing renewal.


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## basilio (1 July 2014)

Ok Bunyip we have a reasonable degree of agreement. I do agree that simply regulating the finance industry is  not all that is required to stop people getting ripped off.  Certainly people can be greedy or stupid.  

*But regulation in itself is useless if it isn't policed. *  From my perspective i have seen scores of obvious or dubious investments that are simply allowed to progress until they inevitably collapse taking  millions of dollars in the process.  It appears to me that perhaps the biggest legal entities in the country are also involved in many illegal practices or otherwise benefit from them.  In that sense it is a real challenge for governments to attempt to stop the practices - even when they have clear notice.

A few examples.

1) In the 80's and 90's the insurance and superannuation industry was rife with unconscionable schemes that acted against the interests of customers. For example there  were 10 year savings plans  sold by insurance companies that had minimal payout for the first 3 years and only got into the black around year 8.  If for any reason you stopped paying your premiums before Year 7 you effectively lost money.  Insurance actuaries are very aware that for a range of reasons people have to stop paying premiums and banked on this. 

2) Again in the 80's and later the relentless promotion of agricultural schemes by shonks and financial planners on commission was a bad joke.  It led to really poor consequences  in many farming areas, cost hundreds of millions in tax revenue and then, ultimately,  led to thousands of investors losing their money.  We still have hundreds of farms covered with  inappropriate blue gum forests as a result of some of these schemes.

On a personal note in 2004  I came across a scheme called PIPS (People in Profit  ).  It was obviously a Ponzi scheme but what took my breath away was the creativity of the con and the way it had seduced some of my friends. It was very, very good..

I got a bit zealous and actively trawled the net for evidence to prove it's criminality.  When I found it I put together a story and contacted ASIC and attempted to get them to take action on what was clearly a very effective scam.

*Nothing happened..* The response was that "they couldn't do anything until it fell over" .  PIPS did fall over in the end but it's collapse was as a result of private citizens taking action. The financial authorities took no action until it was over and then gave warnings  - many months after they had been informed.

I had a simple question which was never answered.  *If ASIC is given information about a dubious investment/scheme why can't it contact the principals involved and check out the bone fides of the operation? *  Bit like an audit. Why do they have to wait until a  very suspect or clearly criminal scheme collapses before they take action ? I have never had a sensible answer (and I did ask ..)

http://quatloos.com/people_in_profit_system_pips.htm
http://www.accountantforums.com/people-profit-system-pips-t129269.html

http://www.thinkfn.com/wikibolsa/PIPS_-_A_Modern_Day_Ponzi
(an excellent description of the PIPS scam before it collapsed)


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## Hodgie (1 July 2014)

basilio said:


> *If ASIC is given information about a dubious investment/scheme why can't it contact the principals involved and check out the bone fides of the operation? *  Bit like an audit. Why do they have to wait until a  very suspect or clearly criminal scheme collapses before they take action ? I have never had a sensible answer (and I did ask ..)




The short answer to that is that they don't have enough funding and resources to investigate every tip they get about a scam. They will prioritose their investigations from warnings or tips they get from organisations within the industry itself, it is unlikely that a tipoff from the general public will be investigated thouroughly.

Think how many people from the general public would have complaints an issues with an organisation within the finance industry, if ASIC were to investigate every one of them they would get less accomplished than they currently do. Most of the complaints would simply be because an investor has lost money and the company has not even done anything illegal.

Also alot of the agribusiness schemes have been incentivised by the government, providing product rulings to give investors an added tax bonus. I'm not saying that those products were not managed poorly and that the only ones who benefited were the advisers getting commission im just saying that the government was essentially backing these products by enticing investors to get involved due to the tax releif they would get. For many of these products, every dollar invested is able to be claimed as a tax deduction due to the product ruling, in fact there are still some of these products around today. Those sort of things were not just happening in the 80s and 90s they are much more recent then that. The regulations set up are in fact doing the opposite of detering investors from going into these products where the planners are getting 10% commissions.


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## basilio (1 July 2014)

> =Hodgie;830701]The short answer to that is that they don't have enough funding and resources to investigate every tip they get about a scam. They will prioritose their investigations from warnings or tips they get from organisations within the industry itself, it is unlikely that a tipoff from the general public will be investigated thouroughly.



I take your point ... maybe. I have to say that I offered my original tipoff on PIPS* because* it was such a convincing scam. I also took a lot of trouble to back up my observation with quite convincing facts.  It was on a platter. Incidentally when that particular Ponzi scheme collapsed it was in fact one of the largest seen for many years.

There is a difference between a clearly obvious scam and a dodgy agricultural investment project. The first ones I suggest should be jumped on immediately. In that sense clearly named as scams and warnings given to all and sundry. ASIC declines to do this because of fear of being sued. 

As far as the cost of this ? Frankly it wouldn't have to be a lot. Simply being prepared to name and shame scammers without having to laboriously investigate each one would be a start. This clearly happens now with 411 scams and romance scams. 

I think you reinforced my comments on the nature of the agricultural schemes. As far as i can see most are just legitimized tax rorts  which favour the wealthier sections of teh community -- who also happen to have a fair bit of pull with governments.


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## Garpal Gumnut (1 July 2014)

Frank Ainslie said:


> Hi All,
> 
> It's been along time between drinks!
> 
> ...




I would in no way agree with any of your conclusions or thoughts, Frank.

You may be able to raise a kerfuffle and get some vengeance for your losses, but I worry more about my children and grandchildren when they invest.

As Storm and the recent CBA and Macquarie scandals have illustrated, there is a dearth of intelligence and common sense amongst the Financial Advice sector. They are either too stupid or too driven by kickbacks to provide adequate advice to investors. 

There are thousands more marks like you, Frank , out there to be plucked by unscrupulous Banks and Financial Advisers. 

ASIC is a complete disgrace, driven by KPA's rather than justice, allowing criminal financial advisers and financial organisations to escape the legal consequences of their theft and collusion.

Our Government needs to hold a Royal Commission in to ASIC, the Banks and the Financial Advice industry to prosecute and jail those responsible for an unacceptable criminal erosion of wealth.

Beware of Financial Advisers in any form.

gg


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## DeepState (1 July 2014)

via Towers Watson


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## Harleyquin (16 July 2014)

when Storm collapsed i said then, that five years down the track we would see a spate of cancer, heart attack and stroke caused by this level of stress. i hoped it wouldnt happen to us but i was wrong. watching our loved ones pass away due to this disaster caused by this insideous industry has been horrific.  i ve seen how this affected my beloved husband and watching him suffer healthwise until he died is something that i can never forgive storm asic and the banks for.


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## Glen48 (16 July 2014)

Harleyquin said:


> when Storm collapsed i said then, that five years down the track we would see a spate of cancer, heart attack and stroke caused by this level of stress. i hoped it wouldnt happen to us but i was wrong. watching our loved ones pass away due to this disaster caused by this insideous industry has been horrific.  i ve seen how this affected my beloved husband and watching him suffer healthwise until he died is something that i can never forgive storm asic and the banks for.




Sadly the Government has taken the side of big banks and water down the rules. So more heartache and drama to come.


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## Defender (16 July 2014)

Harleyquin said:


> when Storm collapsed i said then, that five years down the track we would see a spate of cancer, heart attack and stroke caused by this level of stress. i hoped it wouldnt happen to us but i was wrong. watching our loved ones pass away due to this disaster caused by this insideous industry has been horrific.  i ve seen how this affected my beloved husband and watching him suffer healthwise until he died is something that i can never forgive storm asic and the banks for.




My condolences, Harleyquin. I'm very sorry to hear of your sadness.


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## bunyip (16 July 2014)

Harleyquin said:


> when Storm collapsed i said then, that five years down the track we would see a spate of cancer, heart attack and stroke caused by this level of stress. i hoped it wouldnt happen to us but i was wrong. watching our loved ones pass away due to this disaster caused by this insideous industry has been horrific.  i ve seen how this affected my beloved husband and watching him suffer healthwise until he died is something that i can never forgive storm asic and the banks for.




Harleyquin

Losing someone close to you is always hard. I’m sorry to hear about your loss – but I’m not sure that it can be attributed to anyone or anything in particular.

My uncle recently died of cancer. My cousin in his fifties has had major heart surgery and more recently suffered a stroke. My wife and I have both had cancer. I have many friends who’ve succumbed to deadly illnesses.
None of the people mentioned above were Storm Financial clients.


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## pilots (16 July 2014)

My wife has survived cancer twice, we both looked at Storm, as we walked out of the flash office, the wife said to me our best investment would be for myself to get a job with Storm, it was going to cost us over $30,000 just to invest with them, HOW any one could invest with them tells me we have a lot of suckers out in the market place.


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## Harleyquin (22 July 2014)

I saw first hand what the stress did to my husband. I don't need anyone to tell me that it didn't affect him. He was never the same man after storm collapsed and we started hearing all the negativity.  The old adage 'if it was too good to be true...' Was never mentioned by anyone prior to the crash, we certainly didn't think that 'it was too good to be true..,'.  Yet this seems to be the first load od rubbish that has been thrown in our face.  Why wasn't it considered to be too good to be true before 2009? If you sought financial advice you were told that you were doing something wise. We are not investors? We had no experience with investments of any kind so we considered that we were doing the right thing by seeking advice. 

The ramifications of this financial disaster will be felt for a long time.  My children know that storm/ banks were ultimately responsible for their dad's death, and he is one of so many.


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## cynic (22 July 2014)

Harleyquin said:


> I saw first hand what the stress did to my husband. I don't need anyone to tell me that it didn't affect him...



+1

I quite agree that any unduly stressful event (or circumstance) can certainly impact the healthy functioning of one's body (especially the immune system) leading to serious chronic and/or terminal diseases of the nature described.

Without wishing to sound callous, I hope you'll agree that the attribution of responsibility for the precipitation of said event is a separate matter.

You have my sincerest condolences for the loss of your spouse.


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## Garpal Gumnut (22 July 2014)

I still reckon there should have been a Royal Commission over Storm Financial.

Storm is the perfection of fancy suited Advisers , conning gullible citizens , in to losing money.

It is what they do.

They are up and running again in Townsville.

Gullible mugs, drive in to their cupolas, and their golden dunnies.

Avoid Financial Advisers at all costs.

gg


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## doobsy (23 July 2014)

Garpal Gumnut said:


> I still reckon there should have been a Royal Commission over Storm Financial.
> 
> Storm is the perfection of fancy suited Advisers , conning gullible citizens , in to losing money.
> 
> ...




Comments from the darkside since I have been quiet for a while.

GG lets rephrase what you said. What should be avoided is ANYONE be it financial adviser, stockbroker, realestate spruikers who tell you that they have a sure fire way to make above average returns with little or less risk because they are "in the know".

People get lucky, whether it be lotto, an RSL raffle, a penny mining stock that becomes the next BHP but they are not the norm. They are the stories salesman (not advisers) will tell you but they are not the norm.

You want to make money on shares here is the best advice I can give. Buy good quality companies that can grow the business and their earnings sustainably and hold them for a LONG time. It is that simple. If they can do it with little to no borrowings themselves even better.

True Financial Advisers are not in the business of making people rich. They are in the business of maximising what people get out of what they have. To prove a point I will give a synopsis of my last 2 new clients.

1. 67 yr old with good asset base, still working part time with some rental income as well. Because she got no advice she was not running a transitional pension from her super monies and therefore has been paying roughly $7,000 in tax every year that could have been avoided. Add to that the fact her super earnings could have been tax free also and the cost of no advice was closer to $10,000 pa.

She gets advice and for $1320 it is now set up correctly, she pays us $1650 pa to manage the whole shebang inclduing getting her the Comm Seniors Health Card and over the next few years assist with stopping work and making sure her cashflow is correct. We did a re-contribution as part of the set up and now her estate will pay around $22,000 less in tax when she passes away. If anyone says she is getting ripped off then good luck staying up to date with strategic and technical changes and doing it yourself.

2. Clients both in their 60s, one over pension age and both working part time. We re-structured the portfolios, moving monies between the super accounts and now they receive nearly the full age pension for the next 3 years while her super remains hidden from assessment. Cost to do so, $1,650 ongoing to help manage the ongoing situation. Benefit - roughly $450 / fortnight or $12,000 in extra Centrelink benefit meaning their asset base is well protected for as long as possible.

Again - no talk of how much we will make on their investments, no talk of how they will be millionaires one day. What we did was use strategy and our technical knowledge to improve their situation. We charge a fee for this and they get ongoing service to ensure the situation is maximised at all times. 

I dunno, maybe I am wrong but I don't have a problem justifying my fees for the value I add.

If you could pay a doctor to monitor things on an ongoing basis and let you know what changes are needed rather than only seeing them in a reactive manner when something is wrong, wouldn't you expect your health to improve?

It all comes down to whether people are getting the service they are paying for.

The industry needs a massive shakeup to break the link between advice and product floggers in the institutions but true advisers do add value.


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## Hodgie (23 July 2014)

doobsy said:


> Comments from the darkside since I have been quiet for a while.
> 
> GG lets rephrase what you said. What should be avoided is ANYONE be it financial adviser, stockbroker, realestate spruikers who tell you that they have a sure fire way to make above average returns with little or less risk because they are "in the know".
> 
> ...




Could not agree more. There is a massive difference between good financial planners and planners out there who will say or do anything to get you to invest as much money as possible into a certain product paying good commissions.

A financial planner is not supposed to be like a fund manager who promises above average returns. They should be putting a sound strategy in place based on current laws which will help the client maximise what they have for the amount of risk that client is willing to take. It should be more about the strategy than the products.

The people working for Storm may have had the title of financial planner but they were not. They were simply salesmen flogging off their products. To tarnish everyone working in that industry with the same brush is just not fair.

There are alot of people out there who have absolutely no idea what they are doing with their finances and need assistance. It's just unfortunate that there are people out there who take advantage of this.

The other thing is that you only hear about all the bad stuff, you are not going to hear in the media about all the financial planners out there who have greatly improved their clients retirement and set them up with a comfortable plan where they can sleep easy at night with no worries, but you will always hear about when things go wrong.


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## Defender (23 July 2014)

Garpal Gumnut said:


> I still reckon there should have been a Royal Commission over Storm Financial.
> 
> Storm is the perfection of fancy suited Advisers , conning gullible citizens , in to losing money.
> 
> ...




I know of another financial advisory firm who put their clients into managed funds, using property equity, and additional margin lending in a similar way to Storm. But unlike Storm, they got all their clients through the GFC successfully (according to my advice). 

Both Storm and this firm told their clients they could manage them through a major correction. The big difference was that this firm did just that with stepped trigger points as the market fell, so that they were able to reenter the market, at lower prices later on...and not lose the lot. There probably are also other similar advisory firms who managed it as well, but what this demonstrates to me is that Storm had the ability and knowledge to manage it properly, but failed to do so. Why? is the big question!

It also demonstrates that Storm clients did not necessarily behave irrationally. By contrast, the clients of the successful firm could be viewed as wise investors...


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## Hodgie (23 July 2014)

Defender said:


> I know of another financial advisory firm who put their clients into managed funds, using property equity, and additional margin lending in a similar way to Storm. But unlike Storm, they got all their clients through the GFC successfully (according to my advice).
> 
> Both Storm and this firm told their clients they could manage them through a major correction. The big difference was that this firm did just that with stepped trigger points as the market fell, so that they were able to reenter the market, at lower prices later on...and not lose the lot. There probably are also other similar advisory firms who managed it as well, but what this demonstrates to me is that Storm had the ability and knowledge to manage it properly, but failed to do so. Why? is the big question!
> 
> It also demonstrates that Storm clients did not necessarily behave irrationally. By contrast, the clients of the successful firm could be viewed as wise investors...




I do not know the ins and outs of what was going on at Storm but I do know from experience that a huge part to play in whether or not certain clients come out of the GFC ok had to do with the level of gearing involved. That is where a good financial planner needs to make sure that they are not over extending their clients.

With any gearing strategy the adviser needs to make sure that the client can afford the interest payments without the need of dividends/distributions and they need to be able to meet the margin calls. 

Over the GFC, clients which were over extended and borrowed more than they should have got hit hard because of the fact that distributions stopped coming in and they couldnt make the interest payments because of lack of surplus income so the interest starts to capitalise. Then the margin calls come which the client cannot meet, the assets need to be sold down at a depressed price which crystalises their losses and they are still stuck with large amounts of debt which they cannot afford to pay. They are the ones that truely get hit hard.

I am not generalising that this as the case that happened to everyone involved in storm im just pointing out that you can have 2 different investors in the same product and they can come out completely different depending on the gearing strategy recommended to them from their adviser.

And all this is still ignoring the internal gearing levels on the products recommended, just because 2 products are managed funds do not mean that they carry the same risk.


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## Glen48 (23 July 2014)

CBA are dropping rates which means  home sales are down and the banks feeling the pinch.
This will kick off another bubble and investors will be looking for a better return more fuel for Storm style scams.


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## bunyip (24 July 2014)

doobsy said:


> Comments from the darkside since I have been quiet for a while.
> 
> GG lets rephrase what you said. What should be avoided is ANYONE be it financial adviser, stockbroker, realestate spruikers who tell you that they have a sure fire way to make above average returns with little or less risk because they are "in the know".
> 
> ...




Doobsy

Great to see you back on this thread, and speaking your usual good sense.
I think GG  is a little cheesed off because he once got done over by some crook in the financial advisory game, and now like Frank Ainslie he's inclined to think that all FP's are tarred with the same dirty brush.
But I doubt if GG, or Frank either for that matter, could fail to see merit in the advice and service you've provided to the two clients you mentioned.

I hope you'll continue to contribute to this thread from time to time - not everybody thinks that one bad apple called Storm is proof that the entire case of apples is bad.

Hodgie - an excellent post from you as well.


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## Glen48 (24 July 2014)

you want to make money on shares here is the best advice I can give. Buy good quality companies that can grow the business and their earnings sustainably and hold them for a* LONG time.* It is that simple. If they can do it with little to no borrowings themselves even better.

The feds are printing money all over the world..the feds are taking super out to stay afloat..???


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## bunyip (24 July 2014)

Harleyquin said:


> The old adage 'if it was too good to be true...' Was never mentioned by anyone prior to the crash



It was actually......for more than half a century I’ve been hearing _‘If it sounds too good to be true, etc etc.’_
It's always been common knowledge that investments offering higher returns invariably carry higher risk.



Harleyquin said:


> we certainly didn't think that 'it was too good to be true..,'.  Yet this seems to be the first load od rubbish that has been thrown in our face.  Why wasn't it considered to be too good to be true before 2009?



It was – most of the people who looked at the Storm strategy turned their backs and walked away from it. 
I understand that a number of financial planners contacted ASIC to express their concern about the Storm strategy. But ASIC appears to have paid little heed.
I wonder how many people were approached for their opinions as to whether Storm’s strategy was sound or was simply too good to be true. I have no doubt that such a question posed to this forum prior to the GFC would have prompted many responses from people pointing out the extreme risk in sinking all your money and a pile of borrowed money into the stock market, and mortgaging your home to do it.
Even if investors didn't know about this forum prior to investing through Storm, there were plenty of other people, including many financial planners, who could have and would have ventured that opinion if they'd been asked.


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## poverty (25 July 2014)

bunyip said:


> the extreme risk in sinking all your money and a pile of borrowed money into the stock market, and mortgaging your home to do it.




The real kicker for Storm was the fees, being charged exorbitant amounts to manage not only every dollar you have but all the dollars you can borrow too, adding up to tens of thousands of dollars a year?  I just don't even...  There is some massive disconnect people have when it comes to their money.  If they had to pay $1.60/litre for petrol they're jumping up and down and screaming at the clerk, if a slab of beer costs $45 instead of $38 they feel personally insulted, but if it comes to blowing tens of thousands and risking everything they've ever made in their life on a product from an 'advisor' they're all for it, after all, they certainly hadn't heard it was 'too good to be true'.  They've never invested before, they thought they were doing the right thing.  Just what in the actual....?


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## Judd (25 July 2014)

poverty said:


> The real kicker for Storm was the fees, being charged exorbitant amounts to manage not only every dollar you have but all the dollars you can borrow too, adding up to tens of thousands of dollars a year?  I just don't even...  There is some massive disconnect people have when it comes to their money.  If they had to pay $1.60/litre for petrol they're jumping up and down and screaming at the clerk, if a slab of beer costs $45 instead of $38 they feel personally insulted, but if it comes to blowing tens of thousands and risking everything they've ever made in their life on a product from an 'advisor' they're all for it, after all, they certainly hadn't heard it was 'too good to be true'.  They've never invested before, they thought they were doing the right thing.  Just what in the actual....?




I gave up long ago trying to understand that aspect.  Obtain $100k by mortgage, use it to get another $100k on margin, adviser takes 14k leaving the investor with 186K to invest and paying interest on 200k.  Couldn't understand how those numbers could work then and still don't.  Not worth the effort trying to either.


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## Glen48 (25 July 2014)

OR worse buy a property and hold for yrs thinking they will double for decades.
When the answer is to watch the market and sell at a peak or better rent and invest your money wisely


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## Ijustnewit (25 July 2014)

I still firmly believe that Storm was fear based marketing at it's very best. Selling something to unwary consumers based on financial security and success. 
For those interested , follow the current ABC series documentary "The Men Who Made Us Spend". Apply this same marketing to the financial sector and there you have it.


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## Glen48 (25 July 2014)

Every one has survival fear and will do any thing to make sure they survive, that's why they buy all sorts of drugs and other junk thinking what they are doing is the right thing to help them live long and stay rich.
But fail to realise all are being manipulated by big pharma or finical advisers.


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## Hodgie (25 July 2014)

Judd said:


> I gave up long ago trying to understand that aspect.  Obtain $100k by mortgage, use it to get another $100k on margin, adviser takes 14k leaving the investor with 186K to invest and paying interest on 200k.  Couldn't understand how those numbers could work then and still don't.  Not worth the effort trying to either.




It was cases like this that led to changes in legislation so that the adviser could no longer charge commission on borrowed funds. Back then, for a dodgy adviser it was directly in their own best interest to gear every client up as much as possible using any asset as a security because it would mean more commission for them.

The banks had a part to play in this to, they would happy let a typical mum and dad borrow well over what they could afford as it ment more revenue for them to. The banks would allow low doc loans to go through, which required no evidence to show that the amount of borrowings were affordable, they would then allow the borrowed funds to be used as security into a margin loan (known as double gearing) which they would then use to invest The banks did not do their due dilligence letting the adviser and the client borrow to these extents when they did not have the capacity to make the payments if the market went into a decline.

I have seen commissions charged of up to 16% of the amount invested on agribusiness products prior to 2007. They also offered gearing facilities as well to boost that investment amount up.

That being said I have also seen advisers charge unconscionable fees on other things. Such as a simple super rollover into a retail fund and insurance plan for 25k upfront.

The thing is if your a dodgy person your just always going to be dodgy in any occupation, these people are just out for themselves and will do anything to better their own lives, it gets highlighted in financial planning because of the GFC, all these strategies that they had been running came undone during hard times. Absolutely terrible risk management. It was a massive money grab by all parties involved back then, they would have continued doing it today if the economy continued running well.


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## Judd (25 July 2014)

True,  Hodgie.

It is bemusing to me how the entrepreneurs of these arrangements do not always follow their own advice.  In the case of Storm Financial, it was fascinating to see the Principal attempt to take out a $2m dividend cheque made out to the Family Trust Fund rather than gearing up as much as the firms clients had been.  Strange that.  However, after being involved in investing in one form or another for around 30 years nothing much surprises me for some reason.


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## bunyip (28 July 2014)

Hodgie said:


> The banks had a part to play in this to, they would happy let a typical mum and dad borrow well over what they could afford as it ment more revenue for them to. The banks would allow low doc loans to go through, which required no evidence to show that the amount of borrowings were affordable, they would then allow the borrowed funds to be used as security into a margin loan (known as double gearing) which they would then use to invest The banks did not do their due dilligence letting the adviser and the client borrow to these extents when they did not have the capacity to make the payments if the market went into a decline.




Yes, banks are unscrupulous buggers who, just like any other business, will sell you as much of their product as possible. 
Harvey Normal doesn’t really care whether you can afford the goods you’re buying without putting yourself into financial hardship. A car dealer doesn’t really care if his client will be hard-pressed to afford the payments on the car he’s buying. And the banks don’t care much whether the loan you’re about to take out will stretch you financially......they’re happy to sign you up as long as they have security arrangements in place so they can recoup their money in the event of loan default.

All of which only reinforces the message that it’s important for borrowers to think things through for themselves, rather than just believing everything they’re told.
The Storm debacle revealed many unfortunate stories of people taking on loans that were out of all proportion to their loan-servicing capacity, because Storm told them ‘_it would be OK’._


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## Glen48 (28 July 2014)

Also with IR's coming down and staying down for years to come banks can lend more and increase their bottom line.


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## Frank Ainslie (20 August 2014)

I’ve written a book called ‘I ACCUSE’ in which I have detailed the reasons why people in Australia should think twice before:
(1) They seek advice from financial advisers 
(2) They borrow money from banks for investment purposes.
The latest CBA scandal that has erupted in which many financial advisers acting for that Bank have given harmful advice to their clients is just one in a series of events that has been occurring for many years in the financial sector.
We, ourselves, were caught up six years ago in the Storm Financial disaster. In August 2008, Storm’s clients had AU$4.8 billion invested in that company's share funds. Some six months later, Storm Financial was placed in administration.  My book is not so much about what occurred then, but what happened to us afterwards.
Like many others that invest, we thought that the:
*consumer laws in this country would protect us against fraud – not so!
*professional indemnity insurance that all financial advisers must take out was valid – not so!
*ASIC would fight our case – not so!
*Law would ensure that the wrongdoers were punished – not so!
*compensation would be adequate – not so!
The fact of the matter is that “we were not given a fair go” and nor will you be if you find yourself in a similar position. Thinking it can’t happen to you is a certain recipe for disaster. Believe me, it can happen to anyone in this country that invests believing that this Government and ASIC will protect them if anything goes wrong. Both ASIC and this Government protect the ‘Big End’ of town, and the consumer laws are framed to do the same.
There is only one sure way you can make certain that your money is safe. Don’t invest it in the first place.
Ask yourself this!
*Do you really want to trust banks like the CBA, the Macquarie Bank and the BOQ who have proven that they can’t be trusted?
*Do you really want to trust financial advisers when so little control is exerted over them?
*Do you really want to trust this Government and ASIC when they can’t control themselves?
Then you need to ask yourself whether you can trust what I am telling you in ‘I ACCUSE’. Well, for one I am offering you this advice in my book “free of charge”. Therefore, I have no reason to mislead you. Further, this book is based on my own personal experiences. I have been there, done that, and I have survived (just).
My motivation in writing this book is a simple one. I do not want anyone else to go through what we, Helen and I, have been through these last six years. I have written ‘I ACCUSE’ because I want to warn everyone about the risks they run if they entrust others with their money. Once you leave your money in someone else’s hands, you lose control of it and that is when the problems arise.
And if you think for one minute that the new regulatory laws will protect you, think again. These consumer laws have been tweaked a bit to keep people happy, but the loopholes still exist. Make sure that you are not one of those that will fall through the cracks created by this Government when another financial disaster occurs.
The choice is yours! I have done what I set out to do – warn you. The rest is up to you.

Frank Ainslie

My book can be down-loaded at my web site ‘Storming on Banks’ https://sites.google.com/site/stormingonbanks/victims-corner/court-time

PS: To all our ‘Stormie’ friends, this one is for you. 
“If we can’t keep the bastards honest, at least we can try and reduce the pig feed we put in the trough!” 

This email will be sent to every email contact I have, every media outlet, every bank, every law firm including those law sections in universities, every politician, every group dealing with the elderly who have investments, every person on social media and anyone else I can think of in passing. 
I want those that have a grievance with a financial adviser or a bank to do the same by sending a copy of my book to anyone you feel may be at risk. Let’s get the message out there that this Government has to protect us from the predators in the financial sector. How many victims do they require before this realisation sinks in?

These rogues may have taken our money but its now their turn to pay. If this Government and ASIC won’t do anything about it, we can do something about it by voting with our feet.  If this Government is still not listening, let’s vote them out of Office.


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## Harleyquin (6 September 2014)

Doobsy good to hear from you, I don't check in very often so have just seen your last post.  You made the best of points when you said that it all comes down to whether the client is getting the service that they paid for.  Apologies in advance if I haven't got that quite word perfect. Hodge you're quite right in your remarks re banks playing their part.


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## mrfmad (6 September 2014)

Frank Ainslie said:


> I’ve written a book called ‘I ACCUSE’ in which I have detailed the reasons why people in Australia should think twice before:
> (1) They seek advice from financial advisers
> (2) They borrow money from banks for investment purposes.
> The latest CBA scandal that has erupted in which many financial advisers acting for that Bank have given harmful advice to their clients is just one in a series of events that has been occurring for many years in the financial sector.
> ...




Thank you Frank. This is a great Idea & I think that's exactly how many stormers feel I am sure. If you can help just 1 person then it was a success.  
Your support & bravery to remain on here & still try to get your point across to warn others speaks volumes. I & many others will not do this as we all know if you are a stormer on this forum YOU ARE BURNED AT THE STAKE for the strangest reasons or ANY comment, in fact you are set upon. Hardly a forum where discussions occur.

Being on here its almost like fighting the courts again accept the courts were easier to communicate with. Or posters on here must have had a vested interest like it was coming from their pocket & were only happy laying the boot in & always want it to remain one sided. Yet have NO FACTS! A bit like the media.

Yes this could happen to ANYONE Frank & YES it WILL happen again. Hopefully we can help warn others & we agree with you. You cant invest with ANYONE EVER NO FINANCIAL ADVISER EVER!! Including BANKS! They are all protected by the same laws. 

Thank you again for your support & the book but most of all having the balls to post on here!!!!
Let the fools keep saying that it was because we were fools/greed etc, at the end of the day they are all the same.

Very sad to see how much compassion/respect certain repeat posters have for their fellow Aussies, continuously taking posters quotes out of context & twisting them to WHAT??? & for WHAT?? Support of your fellow man or to KICK him whilst hes down. SHAME!!! I would hate to go to battle with someone like you by my side, but Frank Id have you in my regiment any time. 

All the best.


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## Harleyquin (15 September 2014)

Agree with GG there should have been a Royal Commission into storm financial.  The true facts need to be exposed.

Thank you Frank for your link, you've told it like it should be told.

There are posters on here with a vested interest who have tried at every turn to try and water down and divert the blame, and they will continue to do so.

We know what happened.  We know where the blame lies.


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## Julia (16 September 2014)

What 'vested interests' are you suggesting, harleyquin?


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## Judd (16 September 2014)

Julia said:


> What 'vested interests' are you suggesting, harleyquin?




The usual suspects of course, Julia.  Not worth loosing any sleep over it, or anything else for that matter.  I've reached the situation where I simply don't care anymore.


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## Julia (16 September 2014)

Judd said:


> The usual suspects of course, Julia.  Not worth loosing any sleep over it, or anything else for that matter.  I've reached the situation where I simply don't care anymore.




You're right, of course, Judd.  It's just so silly.   Presumably the supposition is that - should anyone here hold bank shares - they are ipso facto bound to defend the banks.   It has already been established that, even if that were not too ridiculous to be true, any payout by the banks to ex Storm clients will affect their bottom line unnoticeably.

None of that, however, will diminish the pain of those who lost money.  I can understand that directing blame anywhere will probably at least feel helpful.


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## Judd (16 September 2014)

Julia said:


> You're right, of course, Judd.  It's just so silly.   Presumably the supposition is that - should anyone here hold bank shares - they are ipso facto bound to defend the banks.   It has already been established that, even if that were not too ridiculous to be true, any payout by the banks to ex Storm clients will affect their bottom line unnoticeably.
> 
> None of that, however, will diminish the pain of those who lost money.  I can understand that directing blame anywhere will probably at least feel helpful.




Yep.  I made my feelings known about the matter to those financial bodies in which I hold shares but that is as far as I am prepared to go.  I'm certainly not going to trash my financial situation merely to feel good in support of the angst of others.

The investing landscape is littered with investors who lost from Tulip mania, the original ponzi scheme, the Melbourne property madness of the late 1800's, Cambridge Credit, Bond Corporation, Hooker, HIH, Pyramid Building Society, Estate Mortgage, ACR, Westpoint and the 2000 tech wreck where margin loans scorched many an investor.  Debt, debt, debt, debt.  It will grind you to dust unless it is properly managed.  It surely wasn't with Storm and there were many players involved in that game; not only the banks.

End of rant and nothing further will I be saying on this thread - for which many will probably be grateful.

Amen.  It's beer o'clock guys.


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## Joe Blow (22 September 2014)

A Storm Financial update today: Bank of Queensland to pay $17m to Storm Financial clients


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## bunyip (24 September 2014)

I wonder if BOQ’s Storm clients are happy with this outcome – it seems like a smallish amount of money relative to magnitude of the losses they must have incurred.
The size of the payout is perhaps a result the law firms and ASIC failing to bring a watertight case against BOQ to prove any illegal activity - hence the ‘acknowledgment by all parties that the bank denied any wrongdoing in relation to both proceedings.’


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## Julia (24 September 2014)

It wasn't bothering those of us who are shareholders apparently, bunyip.  The SP actually went up following the announcement.


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## bunyip (26 September 2014)

Julia said:


> It wasn't bothering those of us who are shareholders apparently, bunyip.  The SP actually went up following the announcement.




Yes Julia, I noted the share price. In fact the share prices of the major banks have gone from strength to strength regardless of the payouts over the Storm debacle. It kind of adds amusement value to the silly assertions that some investors have a secret agenda to talk down the involvement of the banks in the storm shemozzle because of the fear that their bank shares will be decimated by the payouts.
As I tried to explain to HQ a number of times, companies that make billions in profits won’t be affected by payouts that amount to little more than small change for them.


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## Hodgie (26 September 2014)

bunyip said:


> hence the ‘acknowledgment by all parties that the bank denied any wrongdoing in relation to both proceedings.’




I think that you will find that this is quite common in any settlement agreement. I deal with claims in my current position working for a FSP and every single deed of settlement we create states that we do not admit any liability for any wrongdoing. Even if we are in fact paying the client out on their claim.

Its just so that the settlement is full and final, there is no chance for the claimants to bring more claims in the future and they cannot say anything to the media. The BOQ would never agree to settle unless that was a clause in the deed.


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## bunyip (26 September 2014)

Hodgie said:


> I think that you will find that this is quite common in any settlement agreement. I deal with claims in my current position working for a FSP and every single deed of settlement we create states that we do not admit any liability for any wrongdoing. Even if we are in fact paying the client out on their claim.
> 
> Its just so that the settlement is full and final, there is no chance for the claimants to bring more claims in the future and they cannot say anything to the media. The BOQ would never agree to settle unless that was a clause in the deed.




I realize that. My point was that ASIC and the law firms wouldn’t have agreed to this relatively small settlement by BOQ, and certainly wouldn't have been willing to acknowledge that BOQ denied any wrong doing, if a watertight case had been presented to prove illegal activity by BOQ. They would have rejected this offer and ‘gone for the juggler’, so to speak, if they considered their case was strong enough to achieve a considerably larger payout.
Now, I’m not suggesting that BOQ and all the other banks didn’t bend some rules here and there, in fact I think it was pretty damned disgraceful of them to lend so much money on such a risky investment to people who were clearly out of their depth in regard to loan-servicing capacity.
But I always felt it was overly optimistic of ASIC and the law firms, and indeed Storm investors themselves, to believe they had a cut and dried case against the banks that would result in most of the losses being refunded.
For better or for worse, our legal system allows a considerable amount of ‘rule bending’ before it’s deemed illegal by a court of law. So it was always going to be tough to present a case strong enough to result in compensation of the bulk of Storm investor’s losses.
I’m sure the lawyers were well aware of this at the outset, but were happy to proceed anyway because they saw it as a lucrative little cash cow for their firms.

ASIC probably deserves to be sued as much as anyone, given their miserable performance in this whole sorry debacle. But suing them would have been as much a waste of time as suing Storm Financial.
Below is an extract from an article written by Paul Barry – it paints a pretty damning picture of abject failure and gross incompetence by ASIC.

The Collapse of Storm Financial
In the Eye of the Storm
By Paul Barry  

It seems Storm’s clients did exactly as they were told. They stumped up cash again and again, even as the market fell. Trusting their advisers, they walked into the fire. Quite reasonably, they may also have put their faith in ASIC, which gave Storm the government’s tick of approval by licensing Manny and his boys to dispense financial advice.

Licensing is the rock on which ASIC’s regulation of the financial planning industry is founded. If you visit the regulator’s website you’ll see dire warnings of the dangers of taking advice from an unlicensed financial planner. But the experience of the Storm case suggests a licence from ASIC doesn’t necessarily make investors safe. Those who lost hundreds of millions of dollars in property group Westpoint also found little protection.

In its defence, ASIC says it can’t be expected to police everyone, but if its army of public servants were unable to notice there was something very wrong with Storm, you wonder why it’s in business. Storm was one of the biggest financial planning networks in Australia, with 115 staff, $4.5 billion of funds under management and 14,000 clients (of whom 4000 were already ‘Stormified’ and using the one-size-fits-all model of investment). The group had a highly visible and aggressive marketing campaign, with TV ads, weekly seminars and enthusiastic endorsement from the ex-Australian cricket coach John Buchanan.

Its founder was also high profile. He lived in a white, five-level house on the most prominent hill in Townsville and commuted to Brisbane in his personal Learjet. In 2007 he harvested $24 million in dividends for him and his wife. All of this was financed by the highest fees in the marketplace.

On top of this, ASIC actually received complaints about companies associated with Cassimatis and his high-risk approach in the early 1990s but did nothing. It then received further complaints about Storm in 2006 and again sat on its hands. Even in late 2008, by which time Storm’s investors had lost their shares, their houses and their super, and the company was on the brink of insolvency, ASIC still wasn’t interested. In mid December that year I rang ASIC to ask what action they were taking and was told: “We’ve had a few complaints but we’re not investigating.” They eventually got their boots on two days before Christmas 2010.

As BoQ said on the day ASIC’s legal actions were finally announced, roughly 18 months after Slater & Gordon filed its first damages suit on behalf of Storm investors, “We have every sympathy for customers who lost money … We too put faith in the regulatory system and can understand our customers’ frustration at the collapse of a financial planner that had the tick of approval from government regulators.”

On that point at least, you have to agree. It’s time for some answers on what’s wrong with ASIC and why it can’t do better.


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## Hodgie (29 September 2014)

bunyip said:


> I realize that. My point was that ASIC and the law firms wouldn’t have agreed to this relatively small settlement by BOQ, and certainly wouldn't have been willing to acknowledge that BOQ denied any wrong doing, if a watertight case had been presented to prove illegal activity by BOQ. They would have rejected this offer and ‘gone for the juggler’, so to speak, if they considered their case was strong enough to achieve a considerably larger payout.




Yeah fair enough. Cannot argue with that.


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## bunyip (10 October 2014)

Banks Of Queensland’s payout to Storm Financial clients has been shrugged off by investors – BOQ shares rose 2.7% yesterday on the back of a record yearly profit that was up 21% on the previous years result.

http://www.theaustralian.com.au/bus...084659761?nk=3fa2997e2c8b0f76f90ecad7713d8852


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## Solly (11 November 2014)

> *Cassimatis civil penalty proceeding*
> 
> 
> Court appearances
> ...




http://www.storm.asic.gov.au/proceedings/cassimatis-civil-penalty-proceeding/


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## Garpal Gumnut (12 November 2014)

I still reckon the problem lies with Financial Advisers.

They are muppets.

I wouldn't send one down to the local 7/11 for a packet of smokes. They would probably come back with Tim Tams and tell you it was better for you.

gg


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## Solly (17 November 2014)

> *Charge against Walter John Fullerton-Smith withdrawn*
> 
> .... following a reassessment of the evidence due to the recent death of an elderly prosecution witness (whose evidence was considered to be vital in proving its case) and other developments, the CDPP has withdrawn the charge.




Source: http://www.asic.gov.au/about-asic/m...gainst-walter-john-fullerton-smith-withdrawn/


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## bunyip (18 November 2014)

Solly said:


> Source: http://www.asic.gov.au/about-asic/m...gainst-walter-john-fullerton-smith-withdrawn/




ASIC has banned Wally Fullerton-Smith for life from the financial services industry. And it sounds like he deserves it. 
But how about EC– wouldn't he be equally deserving of the same penalty? It’ll be interesting to see if ASIC shows some consistency by giving him a lifetime ban from the financial services industry too.


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## Solly (21 December 2014)

> *Storm Financial victims take class action against ASIC for negligence claiming it didn’t act when it knew risk*
> 
> AUSTRALIA’S corporate watchdog is being sued for negligence over its role in the Storm Financial scandal.
> Thousands of mum and dad investors lost their life savings and, in some cases their homes, in the $3 billion collapse of the Townsville-based financial planning company in 2009.





Source: www.couriermail.com.au/business/sto...163094086?nk=f879c1755c146b3524b6b5ed2a44e57c


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## sailteam30 (17 February 2015)

Given ASICs track record what does the "brains trust" think about taking ASIC to court to answer for "negligence of there duty to the Australian citizen in favour of the banks". 

The argument being that ASIC gave Storm a tick of approval in December 2007 yet puts them out of business in December 2008 - is that protecting the citizen or the banks?


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## Garpal Gumnut (30 May 2015)

Garpal Gumnut said:


> I still reckon the problem lies with Financial Advisers.
> 
> They are muppets.
> 
> ...




Lest we Forget.

The Storm Victims are still suffering.

Some of the banks have capitulated.

New , younger and less experienced Financial Advisers are setting up the next generation for rip offs.

gg


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## Jifromoz (30 May 2015)

http://www.townsvillebulletin.com.a...orth-ward-branch/story-fnjfzs4b-1227375567269


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## Garpal Gumnut (30 May 2015)

Jifromoz said:


> http://www.townsvillebulletin.com.a...orth-ward-branch/story-fnjfzs4b-1227375567269




Thanks Ji.

I thought I would post the full text of the Townsville Bulletin article, lest any of our ASF Members, if there are such,  consider going to see a Financial Planner for advice.



> Bank shuts down controversial North Ward branch
> 
> TONY RAGGATT
> Townsville Bulletin
> ...




Stay away from Financial Planners.

gg


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## bunyip (17 March 2016)

The Storm Financial story is now history, but other equally dodgy investment schemes have replaced it, one of them being property investment schemes run by unscrupulous opportunists who, just like Storm Financial was, are out to feather their nest at others peoples expense by selling/promoting highly risky investment schemes.
I came across one such mob of opportunists a few years back at the height of the coal mining boom. They had an information stand set up at a home and leisure show, showing people how to create wealth-building returns through positively gearing into property.
The strategy involved using existing homes or other assets as security for investment loans to cover 100% of the purchase price of various properties which this company had on its books. The rental return and tax deductions of these properties was more than sufficient to cover loan interest and repayments, council rates and letting agents fees etc, with income left over.
I told them I’d invested in property for some years but had never found any that offered this sort of positive gearing, to which they responded by naming half a dozen Queensland coal mining towns including Moranbah in Central Queensland, in which houses could be bought that would indeed be positively geared even if 100% of the purchase price was borrowed.
I suggested that sooner or later there would be a serious downturn in coal prices, and these houses that were selling for 600k to 800k and bringing in rents of $1500 to $2000 per week would collapse to their real value of 150 to 200k, with a corresponding fall in rental returns, .
Their response was to tell me that China was in a boom that would last for at least another four or five decades, ensuring buoyant prices for Australian coal.

Some of you may have watched ‘60 Minutes’ a few weeks ago in which they ran a story about a couple of property investors who’d been caught out by the current slump in house values in QLD coal mining towns. One was a  woman in her 20’s who’d bought a swag of houses in Moranbah, and had run up debt of 5 or 6 million dollars in the process. And another couple who had borrowed heavily to build a large block of townhouses, also in a coal mining town. In both cases their investments had become virtually unsalable unless they were willing to accept prices 70 to 80% lower than they’d paid. And virtually un-rentable as well, due to a massive population exodus from mining towns due to mine closures. 
Someone who knows some of these mining towns well told me one of them has ‘for rent’ signs on more than 600 houses, with no tenants to be found.

A couple of years back we had some spirited discussions on this thread about how to prevent dodgy investment schemes from fleecing people. In particular there was much debate between those who thought the solution was in tougher legislation to make it harder for rogue investment advisors to operate, and those who thought that dodgy advisors would always find a way to operate regardless of legislation.
I was firmly in the latter camp and I still am. 
How do you stop some investment mob, for example, from telling people quite truthfully that property investment in coal mining towns is generating 10% rental returns, which is more than sufficient to finance the commitments on 7% loans for the full purchase price of the property?
How do you stop banks from financing this sort of investment, and would it make any sense to do so even if it was possible? Mining towns and all sorts of other investments are financed by bank loans, in the full knowledge of both borrower and lender that every investment carries an element of risk.
How do you force someone running an investment scheme to disclose that their strategy relies on the completely unrealistic expectation that coal prices won’t suffer a serious downturn? 
How can you stop someone from expressing an opinion (genuine or not) that a continuing boom in China will keep coal prices buoyant for another half a century or more? These are the things I was told by that mob at the home and leisure show, and unscrupulous as I believe they were, the information they gave me at the time was largely correct, except for their view about the coming 50 year boom in coal prices.

Fortunately they didn’t succeed in catching me, but no doubt there were many people who did get caught because they failed to fully evaluate the risks in the strategy.

http://www.macrobusiness.com.au/201...vestor-of-the-year-slams-banks-on-60-minutes/

http://www.9jumpin.com.au/show/60minutes/stories/2016/home-groans/


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## Glen48 (17 March 2016)

Strange we have all the trading laws and consumer rights .warranties etc but nothing to stop all this sort of false advertising... dare say there is a bit of fine print on the contracts to cover the crooks,,,,Maybe any investor should be made to attend some sort of say 1hr course and given a _investors card_so they have some grounding on trading...At present we all know housing doubles every 7 yrs and RE never goes down ...this myth help sell RE,


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## Garpal Gumnut (17 March 2016)

It is interesting that I thought of Storm Financial, just two days ago, driving past a fancy Financial Adviser's "gin palace " replete with a large car park filling up with fresh gulls and fancy colonnaded entrance.

I repeat my advice and comment on Storm from a few years ago. 

*I still reckon there should have been a Royal Commission over Storm Financial.

Storm is the perfection of fancy suited Advisers , conning gullible citizens , in to losing money.

It is what they do.

They are up and running again in Townsville.

Gullible mugs, drive in to their cupolas, and their golden dunnies.

Avoid Financial Advisers at all costs.*

gg


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## Junior (17 March 2016)

Garpal Gumnut said:


> It is interesting that I thought of Storm Financial, just two days ago, driving past a fancy Financial Adviser's "gin palace " replete with a large car park filling up with fresh gulls and fancy colonnaded entrance.
> 
> I repeat my advice and comment on Storm from a few years ago.
> 
> ...




Ethics and quality of advice in the financial advice industry has improved over the past few years, and it will step up dramatically over the 5 years or so, in my opinion.

FOFA brought in many positive changes for consumers, and with the slated increase in minimum education requirements, eventually it will become a true profession.  AMP have mandated that all advisers must have post-grad qualifications by 2019...other banks have and will follow suit on this.  It will lead to a lot of bad eggs leaving and being squeezed out of the industry, and the quality of advice will be much higher.

I know this is hard to believe at the moment with the media constantly running negative news stories, but often financial advisers cop unfair flack and the burden of the blame, even when the failure is with product providers (see Comminsure), or other participants.

For example, the property salesmen you speak of above, have nothing to do with financial planning.  A financial adviser cannot recommend direct property.

In the case of Storm....it is now illegal to receive commissions on investment products.  It is illegal to charge asset-based fees on geared investments.  Hence, the Storm model will not happen again.  In the case of Timbercorp and Great Southern, again, this will not happen again as commissions have been banned - furthermore these products were largely recommended by accountants masquerading as advisers - searching for tax deductions for their clients.  The fact that most financial planners wouldn't touch MIS is often lost.

Commissions on insurance products are also being dramatically scaled back, this will squeeze out many of those old-school insurance salesmen, and increase the quality of advice in this area.

Don't get me wrong, there are A LOT of sh!tty financial advisers in Australia, the industry has a long way to go, but things are changing and will continue to improve over the coming years.

Disclosure:  I am not a financial adviser, but have been in the industry for 10+ years.


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## Garpal Gumnut (17 March 2016)

I take your points Junior. 

I believe however that Financial Management is as important in the present day as English or Maths for young people. It should be taught in schools. 

There are still too many rogues out there, and many people are gullible and under educated about managing their finances.

gg


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## Junior (17 March 2016)

Garpal Gumnut said:


> I take your points Junior.
> 
> I believe however that Financial Management is as important in the present day as English or Maths for young people. It should be taught in schools.
> 
> ...




Certainly agree with the above.  

In this internet age I hope that more folk will educate themselves on-line and become financially literate to some degree.

But unfortunately there will always be the gullible masses, and there will always be someone to take advantage of them!


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## bunyip (17 March 2016)

Garpal Gumnut said:


> It is interesting that I thought of Storm Financial, just two days ago, driving past a fancy Financial Adviser's "gin palace " replete with a large car park filling up with fresh gulls and fancy colonnaded entrance.
> 
> I repeat my advice and comment on Storm from a few years ago.
> 
> ...




Really? Storm Financial is back in business in Townsville??


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## Garpal Gumnut (17 March 2016)

bunyip said:


> Really? Storm Financial is back in business in Townsville??




No not storm. No.

Just fancy suited Financial Advisers. 

People forget. 

New "Storms" get up and running, and the gulls flock in. 

gg


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## bunyip (17 March 2016)

As usual it's the banks who are copping most of the blame for the predicament that some of these property investors now find themselves.
Note the comments in relation to the dilemma of the woman in her 20's who is mentioned in the following link. http://www.news.com.au/finance/busi...k/news-story/57af9a6edf85528f5fa38beddd7bb2e3

_The 24-year-old featured in the 60 Minutes report doesn’t entirely blame the bank for the millions she borrowed, admitting to being greedy.
But she said while she didn’t look closely enough at her capacity to repay the loan, she believes the banks also had a duty of care.
“What this has taught her is banks are throwing money at people in the good times and now in the bad times banks will blame the borrower and say it’s their fault for borrowing all this money,” Mr Coulthart said.
“To some degree that’s true, but they should have a duty of care to make sure people have the capacity to repay.”_

The point that Mr Coulthart seems to be missing is that borrowers _*did*_ have the capacity to repay when they borrowed money and got returns well in excess of bank interest. 
Their inability to repay is not so much that the banks financed them into investments which, like all investmetns, carried an element of risk. Their repayment difficulties are mostly the result of the severe downturn in the coal industry that has decimated rental returns and property values in coal mining towns.
The same thing can happen in any industry. I remember back in 1974 when buoyant cattle prices dived by about 75% and took four years to recover. Many cattlemen were bankrupted, not because the banks had financed them during the good times, but simply because their industry was suddenly unprofitable and they no longer had income to service their loans.
Back then I don’t recall the media or anyone else laying into the banks for providing finance to a risky industry. Different story these days though, now it’s become fashionable to immediately point the finger at the banks any time some reckless investor goes broke by over-reaching him/herself in a risky industry.


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## Jifromoz (26 August 2016)

In the Morning Bulletin earlier this week.

http://www.themorningbulletin.com.a...ppropriate-advice-vulnerable-investo/3082665/

THE directors of Storm Financial contravened the Corporations Act when they allowed vulnerable investors to receive "inappropriate advice". 

Justice James Edelman found Storm Financial indiscriminately applied its investment model to clients without considering whether they could rebuild after a significant loss. 

He said Emmanuel Cassimatis and his wife Julie, as directors of the company, should have concluded "an appropriately conservative approach to investment" for these clients. 

The Australian Securities and Investments Commission took the Cassimatises to court after investors, many retired or about to retire, lost their homes and superannuation in the wake of the Global Financial Crisis. 

After the company collapsed in 2008, the corporate watchdog calculated investors lost about $830 million. 

While the collapse affected thousands of investors, the contraventions decided in the Federal Court on Friday afternoon concerned 11 investors, or six instances if couples were treated jointly. 

Each of the investors was more than 50 years old; was retired or approaching and planning for retirement and had little or limited income. 

They had few assets, generally comprising their home, limited superannuation and limited savings. 

These investors had little or no prospect of rebuilding their financial position if they suffered significant loss. 

In his 215-page judgment, Justice Edelman concluded reasonable directors with Mr or Mrs Cassimatis's responsibilities would have been aware of a strong likelihood of contravening the Corporations Act if they did not prevent or prohibit the Storm model from being applied to clients who were retired or near retirement with few assets and limited income. 

"The extent of the adverse consequences that occurred for the investors was undoubtedly a result of the GFC which was an event with a magnitude which could not have reasonably been foreseen by a director in the position of Mr or Mrs Cassimatis," he said. 

"... other causes may have included difficulties that the banks had in managing margin loans, margin calls not being received when they should have been received, the timing of the fall of the share market coinciding with the quarterly distribution in the index funds, delays in the banks updating their securities, volatile data from the banks, and mistaken calculations of LVRs (loan to value ratio) by Colonial." 

But Justice Edelman said these other possible causes did not detract from Storm's "inappropriate advice". 

"If Storm had not inappropriately advised the relevant investors to mortgage their home and invest using the Storm model then they would not have invested in this way (in) the first place and would not have been exposed," he said. 

"Although many of the relevant investors suffered significant, life-altering, losses after the GFC, these losses were neither necessary nor sufficient for Storm's breach. 

"The simple point is that they omitted to take any action at all to redress the likely breaches of the Corporations Act which they had caused or permitted by the creation and manner of operation of the Storm model." 

ASIC commissioner Greg Tanzer said this was an important decision that emphasised the importance of directors' duties not to allow companies in their control to breach the law. 

"The decision also highlights the significant obligation on financial services licensees to provide financial advice that is appropriate to the persons to whom it is given," he said. 

The matter will be listed for a further hearing at a later date to determine what civil penalties and disqualification orders should be imposed on the Cassimatises. 

Palmwoods investor Mark Weir, from the Storm Investors Consumer Action Group, said many investors, including himself, did not know the strategy was one-size-fits-all. 

"It's civil, not criminal. There are some who will take the view that ... it's a minor breach," he said. 

"However, the consequences of it across the board for Storm investors was catastrophic and it'll be interesting to see what kind of penalty applies." 

ASIC also took action against BOQ, CBA and Macquarie in the wake of Storm Financial collapse, alleging the banks supported Storm's unregistered managed investment scheme. 

The banks still deny the allegations but all settled before a ruling was handed down. 

The long-running case involved hundreds of witnesses and thousands of exhibits. -ARM NEWSDESK


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## mjim (7 September 2016)

*Re: Storm Financial Group regulators*

"In particular there was much debate between those who thought the solution was in tougher legislation to make it harder for rogue investment advisors to operate, and those who thought that dodgy advisors would always find a way to operate regardless of legislation.

I take your point about "it is impossible" to foolproof and protect investors point

But does that mean we should not have tough regulations?
What regulations does is try and prevent widespread dodgy operators to come in
SO you don;t see what Regulations have prevented and people only latch on those who escaped

It is fashionable ( or cool or whatever the word is) to blame regulators and portray tough regulations as meddling in peoples affair and anybody who suggest tougher regulation is labeled as some sort of lefty!
This is a typical north american dog eat dog mentality

Imagine no regulations or thin regulation in following 
- Food safety ( imagine no labeling laws or food safety std)
- Medical field including device / drugs ( Imagine a UBER aged care anybody can offer aged care or child care or a anybody offering implantable devices )
- Construction ( Imagine non need for Reg Engg status to sign off on bridge design)
- Transport ( Imagine Backyard aviation operators)

Why financial services should be exempt from that
Take for example Broker failure and "Client money safety" except HIN nos identified Direct stock investment which is normally covered by countries security insurance (FSA / SIPC AFG etc)
ALL clients of OTC products in Australia like FX/ CFD become UNSECURED CREDITORS  in case of broker failure!
If we water down whatever ASIC regulations are there there will be more casualties 

If we care about society we should make tough laws not water them down ! IMHO


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## Jifromoz (8 September 2016)

Here is an interesting story from Michael West

http://www.michaelwest.com.au/revealed-cbas-secret-deal-with-storm-victims-lawyer/

The Commonwealth Bank secretly struck a deal with class action lawyers for Storm Financial Group which left victims in a $1 billion claim against the bank with a return of just $34 million.

Of that $34 million in compensation for Australia’s most devastating financial scandal, legal fees came to almost $10 million.

Emails obtained by michaelwest.com.au show the bank had engaged the victims’ lawyer Stewart Levitt of Levitt Robinson with a “personal restraints” arrangement in October 2010.

However, Sean McArdle, the lead litigant in the Storm class action lawsuit against the bank confirmed over the weekend he and other Storm victims were not made aware that any deal had been struck with the bank.

“He never spoke to us about that deed,” said McArdle who was formerly a forensic crime scene policeman. “To this day, it has only come out in a recent dossier of documents sent to me because I requested them … the paperwork pertaining to the matter”.

McArdle says he was never happy with the CBA settlement and only signed it “under duress”.

The Commonwealth Bank declined to respond to detailed questions. Stewart Levitt was not available for comment.

storm-stewart-levitt
Storm lawyer Stewart Levitt
Storm, the speculative Townsville-based financial advice firm, collapsed in January 2009 amid the global financial crisis and was shunted into liquidation shortly afterwards. It owed $3.6 billion to some 14,000 investors who had been recklessly advised to use high levels of debt to invest in shares during the bull market.   

CBA, Macquarie and Bank of Queensland had provided the margin loans to Storm clients.

In the email to the CBA’s group general counsel David Cohen of June 6, 2014, Stewart Levitt wrote:

“You will recall that in October, 2010, CBA and I entered into a Deed of Settlement and Release in which I agreed to certain personal restraints in order to ensure that I could continue to represent my clients in a Resolution Scheme with the Bank – although not the original Resolution Scheme.

“I specifically refer you to clause 2.4 of the Deed (attached) which I have continued to honour”.

storm-david-cohen
CBA general counsel David Cohen
The email goes on to remind the bank’s top lawyer: “True to the form which I demonstrated back in October 2010, when I was prepared to accept a restraint on some actions which I could take on behalf of my clients against CBA, I would again, albeit with understandable reluctance, be prepared, as part of a fair and reasonable settlement by CBA with my Storm clients, to undertake not to act in any representative proceedings against CBA arising out of the BankWest episode”.

Levitt Robinson had been acting for BankWest borrowers whose loans had been called in when CBA took over the embattled BankWest.   

Another email from Levitt to Cohen on April 1, 2014 says “My own keenness to resolve the matter (which I do not deny) is not necessarily shared by those whom I represent”.


Email from Levitt to Cohen
That was preceded by an email sent by accident from Cohen to Levitt a few minutes earlier saying: “Now he’s sounding a bit desperate. I will email him tomorrow to suggest a time to speak”.

The settlement between CBA and Stewart Levitt’s Storm clients was made in July 2015 for $33.7 million – the same offer they had received three years earlier minus legal costs of $9.8 million.

It is not unusual for funders of representative actions to take a third of the settlement but there was no external litigation funder bankrolling this case. Levitt was also engaged in the lawsuit for Storm clients against the Bank of Queensland which was settled for $20 million in 2014.


Cohen email to Levitt sent by accident
Deflecting calls by Labor and the Greens for a Royal Commission into the banks, the government announced last week a new inquiry into small business lending to be headed up by Small Business Ombudsman Kate Carnell.

Ironically, one of the committee members to oversee the inquiry is the controversial One Nation senator Rodney Culleton. Culleton, who has hitherto been one of the more strident advocates of a Royal Commission, is also a client of Levitt Robinson which, in December 2015, had his bankruptcy annulled, smoothing his path to the Senate.

Editor’s Note: Stewart Levitt could not be contacted prior to publication. He has made contact since and, while declining to respond to specific questions, has rejected this story in strong language and vowed to take legal action.


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## bunyip (18 September 2016)

*Re: Storm Financial Group regulators*



mjim said:


> "In particular there was much debate between those who thought the solution was in tougher legislation to make it harder for rogue investment advisors to operate, and those who thought that dodgy advisors would always find a way to operate regardless of legislation.
> 
> I take your point about "it is impossible" to foolproof and protect investors point
> 
> ...




Of course we should have tough regulations to provide maximum deterrent to dodgy operators who are out to fleece people. I think we all agree on that.
What some of us disagree with, however, is that tough laws alone will be enough to safeguard investors. They’ll still end up getting hammered if they wade into the stock market, or any other high-risk investment, with all their savings and super, plus a load of borrowed money secured by a mortgage over their homes or other assets. 
I suspect that a dodgy operator like Storm could get around tough legislation simply by saying something along the lines of ‘_Stock market investment carries the potential for significant loss as well as significant profit. Our strategy involves investing in the stock market  by using your own money, plus borrowed money secured against your home and/or other assets. Accordingly, this strategy may or may not be suitable for you. You should conduct your own independent research before proceeding with this investment strategy.’_

No doubt a law firm could word it better than I have, but you get the idea. The dodgy operator could additionally do what all dodgy operators seem to do....talk about financial independence and the importance of achieving it, put out glossy brochures and glitzy websites with photos of yachts and expensive cars and happy, smiling people to subtly convey the message that all this could be yours if you follow our investment strategy.
And people would be drawn in like moths to a light, just like some always are any time a slick operator appears to offer them an opportunity to make a lot of money.


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## Junior (18 September 2016)

*Re: Storm Financial Group regulators*



bunyip said:


> Of course we should have tough regulations to provide maximum deterrent to dodgy operators who are out to fleece people. I think we all agree on that.
> What some of us disagree with, however, is that tough laws alone will be enough to safeguard investors. They’ll still end up getting hammered if they wade into the stock market, or any other high-risk investment, with all their savings and super, plus a load of borrowed money secured by a mortgage over their homes or other assets.
> I suspect that a dodgy operator like Storm could get around tough legislation simply by saying something along the lines of ‘_Stock market investment carries the potential for significant loss as well as significant profit. Our strategy involves investing in the stock market  by using your own money, plus borrowed money secured against your home and/or other assets. Accordingly, this strategy may or may not be suitable for you. You should conduct your own independent research before proceeding with this investment strategy.’_
> 
> ...




Regulation has changed since the Storm days.  An advice firm used to be able to charge an asset-based fee on a geared portfolio of investments.  They used to be able to receive commissions on investment products (i.e. great southern, timbercorp etc.).

These things are now illegal, which really removes the incentive to recommend high levels of gearing.

The real estate industry, and instances where financial advisers team up with real estate businesses to recommend off-the-plan property in SMSF, are areas of concern these days.


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## bunyip (20 September 2016)

*Re: Storm Financial Group regulators*



Junior said:


> Regulation has changed since the Storm days.  An advice firm used to be able to charge an asset-based fee on a geared portfolio of investments.  They used to be able to receive commissions on investment products (i.e. great southern, timbercorp etc.).
> 
> These things are now illegal, which really removes the incentive to recommend high levels of gearing.
> 
> The real estate industry, and instances where financial advisers team up with real estate businesses to recommend off-the-plan property in SMSF, are areas of concern these days.




Thanks Junior. As I recall, you were/are a financial advisor yourself. So what’s your opinion about tough legislation – is it or can it ever be sufficient deterrent to get rid of dodgy operators once and for all, or will a few sharks always find a way around it?
Will it ever be safe for investors to base their investment decisions one hundred percent on what their advisor tells them, secure in the knowledge that legislation will remove the possibility of getting fleeced? Or will they still need to conduct their own due diligence on the advice they’re given?
And will some operators simply ignore the legislation and employ dodgy practices anyway, as seems to happen to some extent will all rules/laws/regulations?


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## Junior (20 September 2016)

*Re: Storm Financial Group regulators*



bunyip said:


> Thanks Junior. As I recall, you were/are a financial advisor yourself. So what’s your opinion about tough legislation – is it or can it ever be sufficient deterrent to get rid of dodgy operators once and for all, or will a few sharks always find a way around it?
> Will it ever be safe for investors to base their investment decisions one hundred percent on what their advisor tells them, secure in the knowledge that legislation will remove the possibility of getting fleeced? Or will they still need to conduct their own due diligence on the advice they’re given?
> And will some operators simply ignore the legislation and employ dodgy practices anyway, as seems to happen to some extent will all rules/laws/regulations?




I think it will significantly reduce the instances of dodgy advice, over time.

The vast majority of licensees are now screening potential advisers with far more rigour than before.  Making it difficult for dodgy advisers to move around and deliver poor advice under a number of different licensees.

As I said, the fact incentives to recommend high levels of gearing have been removed, is a big win and should ensure what happened following GFC does not happen again in financial advice (i.e. large-scale margin lending, agribusiness etc).

There are still plenty of below-par operators in the industry (primarily in insurance advice & SMSF gearing into property), and clients should definitely conduct their own due diligence and not rely on legislation alone.  ASIC is still poorly resourced, and limited in their ability to enforce the law in a timely manner.

Higher education standards are very important in my view, and when these come into effect the quality of advice will improve.


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## Garpal Gumnut (12 January 2017)

For those of you still wondering what penalties will apply to Manny and Julie Cassimatis for their proven misconduct as directors of Storm Financial, you only have to wait until Feb 1st 2017.

A fellow barfly at the Ross Island Hotel alerted me to this information from ASIC. 

*Court appearances*
*7 September 2016*
On 7 September 2016, Justice Edelman ordered that the proceeding be set down for a hearing on remedies and costs on 1 February 2017.

http://storm.asic.gov.au/proceedings/cassimatis-civil-penalty-proceeding/

gg


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## No Trust (20 April 2017)

Have a look at what happened at Equititrust... Former company Lawyer *David Tucker* and former CEO *David Kennedy* in all sorts of Sh#t...


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## Garpal Gumnut (29 June 2017)

Storm Financial

As I await the Thursday "Road Kill" aka "Mixed Grill" here at the Ross Island Hotel, my thoughts turn to Manny "Emanuel" "Emmanuel" Cassimatis and his lovely wife, the second one. 

Where is ASIC up to with this obscenity of wealth loss for investors?

I haven't seen any mention of Manny in legal reports although having biblically many solicitors in my humble room here at the Ross Island Hotel. 

This is an illustration of the major defect in our investing culture in Australia.

Spivs and the Rich hold sway.

The average guy gets rooted.

Stay away from financial advisers. 

ASIC is a joke.

gg


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## Garpal Gumnut (29 November 2017)

I have heard on the Townsville grapevine that "Storm Financial" is about to start up again under another name.

It will spruik "safe" shares such as Banks and Listed EPF's.

Just thought I'd let y'all know that a market correction don't always start in New York.

Pray for the gulls. 

gg


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## doobsy (1 December 2017)

Garpal Gumnut said:


> I have heard on the Townsville grapevine that "Storm Financial" is about to start up again under another name.
> 
> It will spruik "safe" shares such as Banks and Listed EPF's.
> 
> ...



Double Digit returns over the past 2 years on the markets and people a quick to forget GG. It has been over 12 months since I have been on here and am not surprised to see your comment. While punters chase the get rich quick schemes and the likes of bitcoin makes them believe it can happen, we will see the next run of overpromise, underdeliver "advisers" with a can't lose strategy.

Get rich slowly I say.


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## Garpal Gumnut (11 December 2017)

Will Storm Financial be an item on the forthcoming Royal Commission in to the big 4 Banks?


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## sptrawler (11 December 2017)

Garpal Gumnut said:


> Will Storm Financial be an item on the forthcoming Royal Commission in to the big 4 Banks?




Jeez is it still going? I thought that all finished years ago.


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## chickenbumflaps (8 February 2018)

Hi all,
Long time watcher, first time poster.  For full disclosure I have been in the financial services now for nearly 20 years.  I did work for a Big 4 bank as a financial adviser, since medically retired.
I have loved reading this page with some very good  info posted.
As for storm, my 2 cents worth, the only person/people/company responsible for this is Storm  and the 2 owners.  I was working for a mob during the time when the GFC hit and we recieved the margin calls every day for  the clients and we actioned them to prevent the margin call taking place.  Storm chose not to do this and there is no way they did not receive the margin calls as every adviser that I know and was working  during this period received  margin calls as well.  Storm for whatever reason chose to do nothing (arrogance me  thinks).  Unfortunately I don't think one red cent will come from the two owners.  They were wealthy enough to put money away which no one can touch.  They will continue to live of life fully funded.  Nor do I think anything will happen to them either

As for double gearing, this can still be a very successful strategy if the structure is correct and the clients and advisers run it  very strictly. It is definately not for everyone.  Double gearing is still everywhere including  in townsville where a few major player are still doing it.  They must have done  something right during the GFC (actioned margin calls)

As for the upcoming royal commission, some of the big 4 have taken major action in correcting the wrongs that have happened as well as changed the way they provide advice.  I can only vouch for the bank i worked for.  There have been  no commissions  paid for quite a few years now.  They charge an advice fee based on the complexity involved, not a percentage of the money invested.  They are now very strict on customer service and audit reports.  If an adviser receives 2 bad customer service scores (only scores of 8/10 and above are a pass), they  can loose their  full  potential   bonus  for the whole year.  The same for audit reports which happen very frequently, except if you receive one really bad report you are DONE.

For  those who think this will prove the superiority of industry funds, if the commission is done correctly, you may find yourself surprised.  The ISF's don't show a lot of things (fees and charges) when they do their comparisons of funds.  Now industry  super funds have outperformed retail returns just slightly when these undisclosed fees   are taken from the the ISF returns.  They just don't  disclose it during their advertising.  Also, the comparisons only look at a single  fund return, and not an investors total return over their investing  timeframe, 2 very different things.

If they also  look into  the advice offerred by the ISF they may find it  coming up surprisingly short of what people consider good advice.  And the argument that advisers won't recommend an ISF is complete and utter bollocks.  We recommended what ever fund met the clients need.  Obviously this was not a rule followed by all advisers hence all the ****  storms

The majority of my clients were approaching retirement and the advice was regarding  maximising centrelink, aged pension, disability pensions, aged care and tax. I also did a lot of insurance advice as well.  Without this advice these near pensioners/pensioners would  have lost some or all of their potential centrelink benefits.  So the notion that all adviser are bad and too stay away is pure fear mongering.  I actually hope this royal commission digs a bit deeper than just the banks.  there  are a lot of smaller businesses out there giving dodgy advice and servie, but  if a group with 7 advisers are fined or shut  down it doesn't have the same headline of one of the big banks being fined for millions

There are always going to be cowboys in every industry and the sooner they are gotten rid of the better off all will be

Just my 2 cents work all.   I know everyone won't agree with me but there are a lot of people who DO need advice.  Hopefully they can get quality advice across the board one day

Cheers


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## Garpal Gumnut (9 February 2018)

Agree totally.


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## Jifromoz (22 March 2018)

http://www.abc.net.au/news/2018-03-...fined-140k-over-800m-company-collapse/9576418


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## greggles (1 April 2018)

Jifromoz said:


> http://www.abc.net.au/news/2018-03-...fined-140k-over-800m-company-collapse/9576418




After nine years since the collapse of Storm Financial and eight years of civil litigation by ASIC against Emmanuel and Julie Cassimatis, the whole sorry saga ends not with a bang, but a whimper.


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## Garpal Gumnut (27 April 2018)

Storm Financial can be difficult to dissect but one thing for sure is that ASIC dropped the ball, even when the ball and their gloves were made from velcro.

ASIC needs to have a Royal commission set upon it.

gg


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## nethanpaul (1 July 2022)

Hi,

I own a small business,

1) Do i need to apply for a tradmark to get a load?

If yes then can i do it myself?


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## nethanpaul (1 July 2022)

Or do i need trademarking lawyers to get my business register?


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## Tropico (1 July 2022)

nethanpaul said:


> Or do i need trademarking lawyers to get my business register?



You can find most of the answers at https://business.gov.au/guide/starting
Section 4 will give you info on ABN, Business name, Tax registration and Trade mark.
All of these can be done without lawyers, although an account may help.


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