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Storm Financial Group

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"BoQ risk report on Storm Financial under scrutiny"

"Bank of Queensland’s involvement with Storm Financial could tomorrow come under renewed scrutiny when the federal parliamentary committee that investigated the advice group’s collapse meets ASIC officials."

More by Duncan Hughes in the Australian Financial Review of June 22, 2010.
 
Jifromoz said:
Sonray Capital, collapsed at 11pm yesterday, freezing 3000 client accounts.

Full story is here http://www.businessday.com.au/business/broker-collapse-hits-3000-clients-20100623-yxd3.html

I hear some ex Storm Planners joined this mob. Birds of a feather???
Click to expand...

Jifromoz, here's a quote from the article in the SMH about Sonray's sudden collapse.

"Some of Sonray's staff include former advisers of Storm Financial. Indeed, one of Sonray's products Back to Basics, has a lot of similarities to the Storm Financial model, in terms of high leverage."

http://www.smh.com.au/business/from-buyout-to-busted-in-a-week-20100623-yz6o.html
 
"Rumbles over Storm probe"

"A federal parliamentary committee has warned ASIC it is losing patience with the 19-month investigation into the collapse of financial adviser Storm Financial."

More by Duncan Hughes in the AFR June 23, 2010.
 
"Parliamentary committee orders ASIC to give details on BoQ"

"ASIC has been ordered to provide details about the Bank of Queensland's involvement in the collapse of Storm Financial.

The Parliamentary Joint Committee on Corporations and Financial Services last night asked Australian Securities & Investments Commission chairman Tony D'Aloisio to update it on the regulator's investigation into BoQ within the next fortnight."


More by Sara Rich in The Australian here;

http://www.theaustralian.com.au/business/parliamentary-committee-orders-asic-to-give-details-on-boq/story-e6frg8zx-1225883408149
 
Solly said:
"Truth will come out, says Cassimatis"

"Mr Cassimatis maintained the actions of the Commonwealth Bank were to blame for his company's demise.

"But eventually the truth will come out and I think soon," he said."

More in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/06/23/148551_news.html
Click to expand...

Typical Cassamatis - never missing a chance to blame someone else while accepting no blame himself.
I'm disgusted to hear this weak person continually bleating and whimpering about how it's the banks fault that he and his clients were wiped out.

Before he locked on to the idea of diverting attention away from himself by blaming the banks, he ranted about the 'black swan event' and the 'unprecedented market crash' and global financial meltdown, and claimed that nobody saw them coming.
He conveniently forgot to mention that, far from being unprecedented, the 2008 crash had various precedents in the form of major market crashes in 1929, 1987, and many others.
Likewise, he conveniently forgot to mention that hundreds of media outlets around the world had been warning virtually every day for months that economic indicators were showing ominous clouds building up on the financial horizon.

Many confronting questions were asked of him on the website that he set up after the Storm collapse. For the most part, he either ignored the questions entirely or he gave evasive answers.
Some of the questions that I personally asked him, and got no reply to, were.....

*You claim that this market crash was unprecedented - how about 1929 and 1987?
*Why did you charge clients the astronomical up front fee of 7%?
*Why did you advise them to gear so heavily into the stockmarket, irrespective of their age and personal circumstances?
*Why did you sit on your hands and do nothing for a full 12 months while the stockmarket crash unfolded, instead of managing your clients investments by advising them to convert to cash long before they suffered catastrophic damage to their portfolios?

These were fair and reasonable questions, but they were too confronting for Cassmatis so he chose to ignore them.

I'm not a Storm victim - I was completely unaffected by what happened to Storm Financial clients. But I dislike dishonesty and cowardice, and Cassamatis has repeatedly shown prodigious talent for both.
I get heartily sick of hearing Cassamatis and others putting all the blame on the banks, while accepting none themselves. He shouldn't be allowed to get away with it. That's why I speak out against him and his kind.
If we keep the pressure on him by exposing him for what he is and what he did, maybe he just might be brought to justice. If we say nothing, we increase his chances of getting off with a slap over the wrist.
 
I'm SO with you, Bunyip - and I'm guessing we're not alone. For all the rhetoric of SICAG (and much on-the-ground emotional support), the efforts seem to be diversionary rather than aiding the identification of the true architects of this fiasco. It's been such a long time and I fear EC & JC's ongoing freedoms are still not being met with the rage I feel they are due.

The financial manufacturers minted the bullets, to be sure, but Storm sold the guns (at a premium) with a compelling story of need, rejecting all the risks and failing to disarm the vulnerable when the environment was more fraught with danger.

Worst of all, this flies in the face of how the financial services is set up to operate. Few people on this forum will be sympathetic, I know, but the reputation of many honorable, client-focused professionals has suffered at the hands of one (or a few) scheming w@nkers who perfected a system and wallowed in their ill-gotten wealth like the pigs they are.
<end rant>
 
"Investors run out of patience"

"An impassioned series of emails from investor Sean McArdle to Labor MP Bernie Ripoll late last week drove home the message that investors have had enough of promises from authorities that justice would be served."


"For richer or poorer, battlers fight on"

"The hundreds of people who turned out to the Cassimatis wedding yesterday were a stark reminder to former Storm Financial clients of the nightmare they have led since the collapse of the company"

Read more by Mitch Gaynor on Page 7 of The Sunday Mail, June 27, 2010.
 
The flaunting of wealth this weekend by the engineers of this debacle which has affected the savings, health and futures of so many battlers, I find extremely distasteful.

The good people whose money has disappeared must wonder where and when the regulators will make the guilty pay.

gg
 
Garpal Gumnut said:
The flaunting of wealth this weekend by the engineers of this debacle which has affected the savings, health and futures of so many battlers, I find extremely distasteful.

The good people whose money has disappeared must wonder where and when the regulators will make the guilty pay.

gg
Click to expand...

gg, it's getting towards the end of the month, I wonder if ASIC has anything to announce?
 
Solly said:
specialed I am very interested in the 'unlawful scheme' that is mentioned in the article.
Click to expand...

I agree...Surely this would be an avenue that ASIC should have explored also. Can the details or the ASIC or Worrels investigations be subpoenaed for a case of this type ? I understand this may relate to the nature of the Storm product and how it was registered or otherwise....

Anyone giving odds that this will never get to court... What are the CBA afraid of.....
 
Garpal Gumnut said:
The flaunting of wealth this weekend by the engineers of this debacle which has affected the savings, health and futures of so many battlers, I find extremely distasteful.

The good people whose money has disappeared must wonder where and when the regulators will make the guilty pay.

gg
Click to expand...


have had a strange premonition for some time that the perpetrator of this fraud will meet an untimely end.

I have no Storm connection
 
Hi All,
I have observed this thread with much interest almost from when it began.

A couple of disclosures.

1. I am a financial Planner and have been since the early 1990s in an area that has seen much storm damage

2. My practice is fee for service and we focus on strategic and holistic advice. We have done pro bono work for some storm victims and have had some very good outcomes with a few (resolution scheme) and also are close to some others

3. My practice is large and self licenced,with about 60% of clients benig retirees or those nearing retirement. As such we do not have large exposures to margin lending but younger clients whom we do have margin laons for are predominantly with CGI and as such I have an intimate knowledge of the processes.

Observations

I am not going to repeat much of what is already well articulated elsewhere in this thread suffice to say that I agree with the sentiments of GG and Solly in that the genesis of the entire disaster and as such the culpability lies with cassimatis and his team of salesmen who exposed their clients to unacceptable levels of risk through the double gearing strategy and in many cases these clients should have not had borrowings at all. Rather I would like to share ny observations as to the likely outcomes of the variuos legal proceedings occurring at the moment

The banks are not blameless and indeed some of the lending is unconscionable with regards to the equity extended against people's homes but the margin loans were all granted within the rules of the day ( ie no requirement to ask where funds were sourced). The advisers though had a duty of care to explain any and all risk to the borrower.

With respect to the margin call process, I had clients experience margin calls with CGI. The process which has been in place as long as I can remember is that CGI (AND MAcquarie) contacted the adviser to contact the client to rectify the situation. This is for two very good reasons. The adviser has the primary relationship with the client and is licenced to give the advice as to what options the client has with respect to lodging additional security, cash or selling down. Staff in call centres for any margin lender are generally not licenced to recommend that a client sell stock/managed funds. Frankly I would be incenced if CGI contacted my clients without first contacting me

So I was recieving emails from CGI when my clients went into buffer and or margin call. I am aware through a discussion with a former CGI staff member that these same emails were provided to storm head office. I am also aware through discussions with a former storm adviser that this was the process he experienced until his business was sold to storm, JC was the one who issues the edict that all correspondence come to HO and not to the advisers.

It is true that CGI should have stepped in earlier and not let the margin loans blow out to where they did however it is my understanding that some clients have had their position restored to where they would have been if the margin call had been issued at the correct time. For levitts and SICAG to be arguing for full restitution is reckless and unfounded and frankly misleading to the victims of cassimatis. Essentially what they are seeking is for the bank to also compensate for market risk as well as storm's negligent and reckless advice. If this course had any chance then many others would seek to sup at Ralphs diner.

The chances of CGI being found to have not followed due process are about as good as those of the proverbial snowflake.

On the complicity of others at ANZ,BOQ and CBA, I believe there is ample evidence (some of which i have intimate knowledge of through said pro bono work) that home loans written were done so on less than accurate information supplied to them via storm and also that the internal processes and risk management were compromised by the sheer volume of lending being generated by storm.

On the sell down of the index funds, I don't believe that CGI or colonial first state had much choice. Cassimatis sent a letter to all clients recommending they move to cash well before colonial made their call. If he had of followed through with the letter then the same would have happened anyway. I question though wy he (manny) did not act on his recommendation as all victims I have had contact with actually signed the letter and returned it. I suspect that Manny may have realised after the letter was sent that because of the ridiculous gearing levels he had exposed his clients to, a move to cash would mean few if any of them would have sufficient equity to reenter the market anyway.(There goes the fees old boy)

I am hopeful like many of you that ASIC come out with their findings soon so that stormers can stop chasing Don quixotes rainbows and get on with life.
 

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