Storm Financial Group

[Solly]

I believe it was quite an enlightening day at the Hearing and it doesn't pay to upset a Forensic police officer.

A very well constructed email to your Financial Adviser stating your concerns about the Storm strategy never goes astray either......

 

[Garpal Gumnut]

Yianni Cassimatis has begun giving evidence at a public examination into the company's collapse.

More to follow.

From the ABC;
http://www.abc.net.au/news/stories/2009/10/21/2720574.htm

Yianni Cassimatis has told the Federal Court he was a researcher at Storm Financial prior to 2006, looking at financial products, including index funds.

Mr Cassimatis has claimed privilege from self-incrimination throughout his evidence.

What does this mean? I'm not a lawyer.

gg

 

[Sunder]

What does this mean? I'm not a lawyer.

gg

Pretty sure that just means that nothing he says can be taken as a confession. If he indicts himself, they still need to find evidence to prove he is guilty.

 

[Garpal Gumnut]

Pretty sure that just means that nothing he says can be taken as a confession. If he indicts himself, they still need to find evidence to prove he is guilty.

Wasn't Manny trying to present documents to the inquiry in brisbane that would enable them not to be presented as evidence in later court hearings, and Bernie refused to allow him to do so..

Is this similar?

gg

 

[Garpal Gumnut]

"Storm Financial boss Emmanuel Cassimatis told clients they were 'screwed' "

"STORM Financial boss Emmanuel Cassimatis told clients late last year they were "screwed" after their $8 million portfolio had evaporated, an inquiry into the failed advisory firm was told yesterday."

More by Anthony Marx in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26238068-952,00.html

Ms Lock also told the public examination into Storm's collapse that Mr Cassimatis was contemptuous of clients who did not want to borrow against their home equity to invest. She claimed he dismissed "bloody women and their houses" and attacked their "sentimental attachment" to their dwellings.

Ms Lock said that, after two years of pressure, she gave in and borrowed against her home.

I merely include Mrs Lock's testimony in case anyone from SICAG.info is unaware of the Federal court evidence being reported in the Courier Mail.

It might fill in the large spaces now occupying that site, which all but hide the disclaimer about having the connection with the Cassimatises at the bottom of a very empty page.

gg

 

[Mindstorm]

Mindstorm

I admire you for having the character to make a public apology.
Your apology is accepted - no hard feelings at all on my part.

Is your personal situation really as dire as you seem to think? Can you really not see any prospects for your future?
I recall that in an earlier post you spoke of the retirement you'd planned in 20 years or so. That suggests to me that you're in your forties, with a good 20 years or more left in the workforce.
20 years X 50 grand a year means you can earn 1 million dollars before retirement - more if your wife works as well, even part time. More again if you save money along the way and invest it in growth assets like residential real estate and blue chips shares.
You don't know anything about share investment? LEARN.
You don't know anything about real estate investment? LEARN.
There's lots of information available - some of it is in the form of books costing only $30 - $40, much of it is free. It's just a matter of opening your mind and putting in some effort to educate yourself.
For information about share investment, Google Stan Weinstein and Alan Hull. From these two men you can learn how to safely invest in stocks without losing your shirt.
Unlike Storm Financial, they employ strict risk management, they trade with the trend, they trade in the strongest sectors of the market, and they don't adopt a HAH (hold and hope) attitude when a bear market sets in.
For information about real estate investment, I'm sure you'll find something of value if you Google Margaret Lomas and read some of her books.

You don't earn 50 grand a year? Then start earning it! Go back to 'school' if necessary. With two years of solid study you can become a registered nurse in Queensland. Maybe you don't want to be a nurse, but you get my drift.....if your current job or income are not satisfactory, there are various courses you can do to improve your employment and income prospects. Get your wife to work part time as well, if she's not already doing so, even if it's some ordinary job such as a domestic in a hospital or whatever. Between the two of you there should be no problem in pulling an income of 50 or 60 grand a year or higher.
Have you considered a job in the mining industry? Machine operators can earn 100 grand a year, and the rapidly expanding iron ore industry in WA will need an additional 6000 staff over the next few years. Many people with no machinery experience get trained as machine operators in the mines.
Many interstate people work in WA on a FIFO basis (fly in fly out). I beleive some of them work two weeks on and one week off, and fly home to their home state every few weeks.
I know all this because just a few days ago I spoke to a young woman who works in one of the WA mines - one of my daughters has considered going over there for a few years to set herself up financially.
Here again, maybe a mining job wouldn't suit you, or maybe you already have a good job. All I'm doing is pushing a few ideas your way to get you to see the possibilities.
Taxation? Your losses from your investment with Storm can be offset against your income, reducing income tax or perhaps even putting you in a tax-free situation for a number of years.

You're drowning under heavy mortgage payments? If your mortgage payments are considerably more than it would cost you to rent a house, then perhaps you should consider telling the bank to take your house, and you walk away and start again from scratch.
With 20 years of working life in front of you and your wife, you could achieve a lot financially in that time if you play your cards right. That comfortable retirement you dreamed of is still within your reach.

Look - I'm no stock market or real estate or investment guru, I'm just an ordinary bloke whose been up a few dry gullies in his time. I've known adversity, and I've come through it by being positive, by looking ahead at what can be, rather than looking backwards at what was.
I don't know your personal situation. I don't have all the answers for you. I'm just trying to give you hope for the future by showing you your potential.
I feel pretty sure that you'd still have the love and support of your family. What an asset that is.....with them behind you, and some determination and positive thinking on your part, who knows what you can achieve!

Mate, I don't want to hear any more of that destructive self-criticism crap that you've been going on with. Every minute spent in denigrating yourself about how stupid you've been, is one less minute you have for planning your future.
Now get stuck into it
And any time you're feeling a bit down, remember that the old Bunyip has faith in your ability to get your life back on track.

All the best
Bunyip

Bunyip,

Thank you for your kind comments, and for accepting my apology.

I apologised in public so that anyone reading the thread could see that I knew that I was wrong to 'speak' to you as I had done.

There is no excuse that I can offer for this other than I was feeling raw. I am embarrassed that I did it, and am very glad that you accepted my apology.

Mindstorm

 

[Solly]

What does this mean? I'm not a lawyer.

gg

gg,

This may be interesting reading for you.

http://www.austlii.edu.au/au/legis/cth/num_act/ea199580/s128.html

 

[Mash]

Rest assured GG... sicag knows all too well what is going on in the federal court as most of them are there to support those who are brave enough to expose themselves. WE will finish strong !!!! and quite frankly your constant diatribe is of little use or importance to any one.

 

[Julia]

Bunyip I can't imagine anything worse than living in rented accommodation on the old age pension.

Nothing worse? How about being on an unemployment benefit which isn't even enough to pay for that rental accommodation, let alone any other expenses.

In comparison the age pension for a couple is fairly reasonable. I know plenty of people who have a perfectly reasonable life on this, even play golf and go out for dinner once a week or so.

If you continue to tell yourself your situation is dire and hopeless, then it will be.

 

[Solly]

From the article above.

Oh dear Solly, it looks as if 2011 is on.

I had to go down to a meeting in Lennons today and was given a room to freshen up. I must admit I was shocked by the state of the hotel. Much below my standards.

May we change the venue for the get together to the Marriott on the upper floors. There is an elite area with wifi, free brekkie, newspapers and drinks after a long day, I am told.

I have a mate who runs a limo service and he can get us up to the courts in 5 minutes.

gg

gg, the Marriott does look very flash, and there's special drink deals in the Lobby Bar as well. It's in a nice quite part of town, quick access along the river walk to the Riverside Centre, I even noticed a strange cell like structure just near Customs House. I wonder if this is an omen ?

 

[Solly]

"Referral fee at core of Storm Financial advice, court hears"

"A STORM Financial client alleged in Brisbane Federal Court yesterday that his accountant had recommended an investment scheme only after receiving a $10,000 "referral fee" from the advisory firm.

Sean McArdle told an inquiry into Storm's collapse that his accountant initially had concerns about Storm in late 2006 and suggested alternative investments.

But in a subsequent meeting with Storm, the 42-year-old Sunshine Coast police officer alleged his accountant said the firm offered a good and affordable product with no downsides or elevated risk."


More by Anthony Marx in The Couriers Mail here;

http://www.news.com.au/couriermail/story/0,23739,26243366-3122,00.html

 

[Solly]

"CBA denies incomplete Storm information
Storm founder makes claims"

"CBA has denied it provided incomplete information to a parliamentary committee regarding email correspondence it had with Storm Financial's founders."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7678.htm

 

[Solly]

"Storm paid accountants a referral fee"

"Failed advisory firm Storm Financial paid referral fees of $10,000 to accountants who recommended the company's investment model to their clients, a court has heard."

Read more by Michelle Singer in The Australian Financial Review of October 22 2009


"Storm spin doctors take the wheel - and the money"

"When it comes to solid self-belief, few public relations firms have anything on crisis management experts FD Third Person, which were engaged by failed advisory firm Storm Financial for a prepaid sum of $74,000 in December prior to the company's collapse."

Read more by Andrew White in The Australian Financial Review of October 22 2009

 

[Harleyquin]

I hope you're right Julia as I've no doubt we will find out for sure how easy it is to live on the old age pension. I'm slowly trying to get my head into a better place than it has been this past few months and I realise that I need to change my way of thinking as you have suggested but I find it is one small step at a time at the present time.

With everyone's support hopefully all the storm survivors will make it and continue to enjoy their life but I think it's important for others out there to realise that it is far from easy. Life as we planned it and knew it, is now gone forever and has been replaced by a life which is very different from the one we envisaged.

 

[bunyip]

gg,

If it doesn't look like things are making progress with the inquiry, examinations, etc why don't we invite EC & JC down to Gloria Jeans at Cannon Hill Plaza for a friendly chat, a couple of cappuccinos and some filo pastries.

We could then get the real inside story of what actually happened and we could then post the transcripts on ASF for all to see. I could pick you up from the Airport in my Toyota Crown, pick up EC & JC and head off to the Plaza. I'm sure we could get to the bottom of what happened by the end of the second filo. It shouldn't take long and this could all be done on a day trip and no need for the inconvenience of an overnighter.

If you think this is a good idea I could drop an invite in their letter box in London Rd.

This could be a real scoop, may be we could ask fellow forum members & Stormers if there are any questions we should pose....

Solly

When or if you come face to face with Cassamatis, you can ask him a couple of questions from me. I already asked him these questions on his website, but in his typically weak and cowardly way he didn't respond.

If you were managing your clients portfolios, why did you let them evaporate into thin air? Why did you let them sit through more than 12 months of one of the worst bear markets in history, without taking any defensive action that would have saved their portfolios from being decimated?

Well of course we all know the answer - selling clients out would have dried up his cash flow, firstly by eliminating Storm's ongoing management fees, secondly by effectively preventing new clients from coming on board with Storm. I mean, if word had got out that Storm were evacuating their clients from the stockmarket, then nobody in their right mind would have walked into Storm and asked to be put into the market.

There were many faults with the Storm model......
too much gearing
excessive borrowings relative to clients capacity to service their loans
no diversification
excessive up front fees.

But the biggest failing of all was Storm's total lack of risk management.
None of the above shortcomings by itself, or even collectively, would have wiped out Storm clients if only there had been prudent risk management in place.

We can blame the banks for selling down the portfolios, we can blame them for excessive lending, we can blame the faulty data late last year, we can blame the stokmarket crash, if we're really gullible we can allow Cassamatis to pull the wool over our eyes with his claim that the economic meltdown and market crash were 'unprecedented', and if we're extremely naive we can believe that nobody saw the crash coming.

But the truth is that if Storm Financial had been doing their job they would have hauled their clients out of the market long before they got anywhere near margin call.
When it's all said and done, it was the gross incompetence of Storm Financial, and in particular their total lack of risk control, that brought Storm clients undone.

So Solly.....if you or anyone else ever come face to face with Cassamatis, ask him that question for me....Why didn't you take your clients out of the market before their portfolios were decimated?
I'm surprised that nobody has yet asked him that question during the Parliamentary Enquiry.
I challenge SICAG to put my second last paragraph on their website.

 

[bunyip]

I hope you're right Julia as I've no doubt we will find out for sure how easy it is to live on the old age pension.

Harleyquin

Julia didn't claim it was 'easy' to live on the old age pension. She merely pointed out that some people are doing it and are still managing to lead quite enjoyable lives.
Julia and I are trying to put across the message that it's not the end of the world if people have to rely on government welfare during their retirement.
It's a situation that all of us could handle if we had to, while at the same time still being reasonably contented.
I know I know.....you'd prefer to have a higher standard of living than that - we all would. But if that's how it pans out for some of us, it's not the end of the world.

 

[Solly]

Solly

When or if you come face to face with Cassamatis, you can ask him a couple of questions from me. I already asked him these questions on his website, but in his typically weak and cowardly way he didn't respond.

If you were managing your clients portfolios, why did you let them evaporate into thin air? Why did you let them sit through more than 12 months of one of the worst bear markets in history, without taking any defensive action that would have saved their portfolios from being decimated?

Well of course we all know the answer - selling clients out would have dried up his cash flow, firstly by eliminating Storm's ongoing management fees, secondly by effectively preventing new clients from coming on board with Storm. I mean, if word had got out that Storm were evacuating their clients from the stockmarket, then nobody in their right mind would have walked into Storm and asked to be put into the market.

There were many faults with the Storm model......
too much gearing
excessive borrowings relative to clients capacity to service their loans
no diversification
excessive up front fees.

But the biggest failing of all was Storm's total lack of risk management.
None of the above shortcomings by itself, or even collectively, would have wiped out Storm clients if only there had been prudent risk management in place.

We can blame the banks for selling down the portfolios, we can blame them for excessive lending, we can blame the faulty data late last year, we can blame the stokmarket crash, if we're really gullible we can allow Cassamatis to pull the wool over our eyes with his claim that the economic meltdown and market crash were 'unprecedented', and if we're extremely naive we can believe that nobody saw the crash coming.

But the truth is that if Storm Financial had been doing their job they would have hauled their clients out of the market long before they got anywhere near margin call.
When it's all said and done, it was the gross incompetence of Storm Financial, and in particular their total lack of risk control, that brought Storm clients undone.

So Solly.....if you or anyone else ever come face to face with Cassamatis, ask him that question for me....Why didn't you take your clients out of the market before their portfolios were decimated?
I'm surprised that nobody has yet asked him that question during the Parliamentary Enquiry.
I challenge SICAG to put my second last paragraph on their website.

bunyip, these are excellent questions, what do you think gg ?

Anybody else got any questions to pose ?

 

[Out Too Soon]

Just noticed this thread waiting for market to open. Just like to say I'm lucky to have been sucked into meeting Emmanual many years & name changes ago at a time when his main interest seemed to be selling Life Insurance & I didn't have 2 brass razoos to rub together.
At least he wouldn't discuss a financial plan for me until I purchased some Life Insurance & I am very anti Life Ins' so our discussions went no further.
It has been of passing interest over the years to watch the name changes & eventually the building of the pack of cards that have come crashing down so spectacularly. I hear Majorca is a nice place to live, do they still have their passports? :

PS: This is a light-hearted post but I still feel sorry for all those that lost so much.

 

[Julia]

Out too Soon, do you mean Manny has changed his personal name, or that he has had various business names for his various enterprises?

Good to know you didn't provide fodder for him.

 

[DocK]

bunyip, these are excellent questions, what do you think gg ?

Anybody else got any questions to pose ?

Indeed I do, and quite a few..., however the main one would be:

I read in one of the many recent articles about the ongoing enquiry that Manny has apparently claimed that it was not their job to constantly monitor clients' lvrs, and indeed this was only looked at when reviewing a portfolio - perhaps three or four times a year (read " when looking to see if storm could induce further borrowing/investment by client in order to generate fees for storm"). I also think I recall one of their IT people admitting their "state-of-the-art" computer system wasn't capable of doing this as yet - yet apparently it was worth the oodles of moolah storm paid to ignite (yes, owned by Manny & Julie of course!). I quite clearly recall their website promising constant monitoring of their client's portfolios, and the claim that clients were not to worry about the performance of the sharemarket or lvrs etc - that's what they were there for - something along the lines of "Let us worry about your money so you don't have to". (I guess I've got less to worry about now, don't I?) So, to sum up, my question would be:

If storm didn't think it was their job to monitor their client's positions, and spent very little time or effort doing so, and if everyone received the same simple advice to invest in the same simple products - WHAT THE HELL DO THEY THINK THEY WERE BEING PAID FOR????

Sorry to shout, but if I were face to face with them then that is what I would do, so I'd appreciate it greatly Solly if you could deliver my question in a loud belligerent tone, and if you could "accidentally" spill your cappuccino all over his "lap" so much the better: