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Storm Financial Group
- Thread starter Garpal Gumnut
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A really huge turnout at Harry's today. Many Stormers wearing "Angry Ant" badges and they really do look angry.
I was a bit surprised that they allowed the larger pinned on protest signs like "Pigs in the trough" into the court room.
Stewart's crew were really busy. Let's hope we get a few teasers uploaded on YouTube.
A suited Sergeant Sean was looking very dapper, I'm interested to hear an update on the saga from his perspective.
I was a bit surprised that they allowed the larger pinned on protest signs like "Pigs in the trough" into the court room.
Stewart's crew were really busy. Let's hope we get a few teasers uploaded on YouTube.
A suited Sergeant Sean was looking very dapper, I'm interested to hear an update on the saga from his perspective.
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They need to make an example of them. their actions were unconscionable. they may have started out with good intentions but greed is a powerful motivator and many people lost their retirement savings because of Storms actions. 
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Australian Securities and Investments Commission v Storm Financial Limited (Receivers and Managers Appointed) (In Liq) (No 2) [2011] FCA 858 (2 August 2011)
Read the reason for judgement by Justice John Reeves here.
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2011/858.html
Read the reason for judgement by Justice John Reeves here.
http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2011/858.html
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Hi Frank
After seeing the Stormers at Harry's, for the first time I certainly had a sense that there is real hope on the horizon. Their mood was definitely upbeat and positive.
Do you have any observations about the proceedings that you feel are appropriate to share at this time?
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Hi Solly,
Frankly, last week's hearings could not have gone better for us.
Stormies are understandably elated at the result. They are also happy that something is happening at long last. The waiting has been Interminable! Now, the door has finally been opened and we will have "our day" in court. At long last we are on the front foot.
Mark my words! I believe this will not run its full course because the Banks have much to hide. The CBA didn't implement a resolution scheme out of the kindness of its heart. It did it to minimize its costs and hide its wrongdoings. The other banks have been sitting on the sidelines waiting to see what would happen. You can bet your life, they will not be happy with the events of last week.
If they had any sense they would realize that they are in a "no-win" situation. The secret agreements alone between Storm and these banks will provide enough evidence to hang them. It will also establish "pooling" (unregistered management schemes). As if this is not enough, there are enough contractual breaches to fill a law book.
Solly! This is a long-winded way of saying, "We are very happy indeed! Bring it on!"
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Storm and the Banks. (Part 1)
People went to Storm Financial for financial advice because it was a reputable financial advisory firm with a track record, and it was endorsed by some of the major banks in this country.
For some years people had prospered with Storm so there were no indicators that Storm was about to go "off the rails”. Some have called us gullible. Calling us, the investors that went to Storm for financial advice, ‘gullible’ in such circumstances, is doing a disservice to all those financial advisers out there that are providing a genuine and above-board financial service. Why? Because it implies that anyone that seeks financial advice from someone in the financial sector is gullible! None of them can be trusted, so to speak!
Hindsight is a wonderful thing but few, I'm afraid, are blessed with the ability to foresee the future. To claim that 3,000 or so investors were gullible and should have known better is easy enough to do, but such an opinion is uninformed! People in reproving Storm’s clients in this way tend to forget a number of important facts:
(1) ASIC as late as 12 months before Storm collapsed examined the Storm stratagem in depth and found nothing wrong! This was part of an ongoing compliance audit that had been taking place for years.
(2) Banks such as the CBA, the Macquarie Bank and the Bank of Queensland endorsed Storm’s financial model and lent substantial sums of money based on Storm's concepts. The Macquarie Bank also supported Storm’s bid to go public nine months before Storm’s demise.
(3) Storm’s own financial advisors and those advisory firms that Storm had purchased along the way, believed in and vigorously promoted Storm’s financial model. Some of these former disciples of Storm are now participants in the class actions that are being launched against the banks
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Storm and the Banks. (Part 2)
If we are considered 'gullible', how gullible then are all those various bodies and individuals mentioned in ‘Part 1’ in the scheme of things? They have no excuses whatsoever because they are supposed to be financial experts
If this were just a “get rich” scheme as many have suggested, why was it allowed to go on for so long and why were the aforementioned parties so readily involved?
The truth of the matter is that whatever was going on beneath the surface, there was nothing outwardly that could possibly alert unwary investors, or savvy ones for that matter, in advance of the dangers inherent in the system.
People ask, “How could you consider mortgaging your house to further invest when such a policy is fraught with danger?” This question deserves an answer because it is one that is often raised. We paid Storm Financial $145,000 to obtain what we thought was the best financial advice available. Why pay this sort of money to a financial adviser, and then ignore the very advice you have paid good money to hear?
It’s easy to say now that borrowing on one’s house is a recipe for disaster, but people should remember that ASIC and the banks at that time condoned such a policy. In fact, the banks enthusiastically promoted this strategy along with Storm. How then could we simple investors be expected to identify that such an approach was unsound when our financial advisers and the banks were urging us to invest in this way? I was under the impression that these people were supposed to be looking after our interests?
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Storm and the Banks. (Part 3)
At times we have been referred to as "unsophisticated investors" which has some derogatory undertones. That's exactly what we were though! If we had the expertise to invest ourselves in the share markets, why would we need to have sought financial advice in the first place?
We realized our limitations and we did the prudent thing by seeking professional financial advice! Crooks do not hang up shingles saying, "Crooks!" Instead, they can call themselves professional financial advisers these days.
If it were considered to be the sensible thing to do then, why are we now being condemned by some for doing so? Our only mistake was putting our trust in the wrong people.
People tend to forget that some of those that invested in Storm were sophisticates in their own field, be it in ‘management’ as in my case, ‘business ownership’, 'careers' and so on. What Storm offered us in the beginning seemed sound enough to even the most discerning among us.
(1) How were we to know then that Storm's financial model and its assurances were merely “window dressing” and Storm had no intention of doing what it said it would?
(2) How were we to know that Storm had no real systems in place to protect our financial portfolios?
(3) How were we to know that Storm had secret deals with certain banks that would ultimately lead to our losses when the global financial crisis hit in late 2008?
We had no way of knowing any of these things and it is therefore unreasonable to assume that we should have known!
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Storm and the Banks. (Part 4)
Some members of the PJ-C at one stage during the Committee's investigations suggested that would-be investors should take a course in financial investing prior to their investing their money. "Then this sort of thing wouldn’t occur!"
This is just another loopy suggestion that has no practicality in a modern world. Does one have to learn how a piston engine works in order to drive a car? Does one have to learn about the law in order to employ a lawyer? Doesn’t this defeat the whole purpose of the exercise when professionals are available for the sole purpose of giving you advice in these various areas?
Perhaps instead investors in the future should take a course in criminology so they can spot criminal types in the financial system before they think about entrusting their life savings to financial advisors and banks?
No! The people who invested using the services of Storm and the banks were not gullible. They were simply victims of inveterate liars and greedy organizations that came in the guise of Storm Financial and its partners in deception; namely the banks that assisted them in fleecing their Storm clients.
These Storm investors were people who placed their trust in a financial system and the people that operate within only to find that the financial sector and some of the people that inhabit it are flawed from go to woe!
The Storm investors fell through the cracks when the global financial crisis occurred at the end of 2008 because no one, be it Storm Financial, the banks associated with them, ASIC or this Government, bothered to check for any structural failure
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Storm and the Banks (Part 5)
Not one former Storm Financial investor out there should blame himself or herself for anything these financial criminals have done to them. We are victims! No more, no less! We placed our trust in people, financial institutions, and a financial system that was deplorable. We paid a fortune to obtain the best financial advice possible and we got monkeys instead! We deserved better! We deserved more!
We are not ashamed of what has occurred because it was not our fault in any way. We were sold a financial plan that we had no way of knowing was flawed. No one else involved, such as Storm’s own financial advisers, the banks, ASIC and this government picked up on its defects so why should we now take the rap for their obvious failings. We do not accept such a proposition! Nor should we! We are not to blame! Rather, they are!
In business, one should be able to trust those to whom one entrusts money, particularly if they are financial institution such as banks.
"DAVID SAY, 71, is no fool. The now-retired, former managing director of James Hardie and former chairman of HSBC Bank Australia is a smart, well-travelled and successful businessman but even he had trouble choosing the right financial adviser. He eventually settled on David Gibson and Larry Fingleson of Priority Planners in Sydney in 2005 but not before losing "heaps of money" at the hands of a private bank adviser."[ INVESTORS BEWARE" "'A little knowledge is a dangerous thing'].
Was Mr. Say gullible? I wouldn't think so! Were we therefore gullible who had far less knowledge in financial investing than he? No, we were not! Were we trusting? Too bloody right!
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Storm and the Banks. (Part 6)
All the parties involved in the Storm Financial debacle, other than the Storm investors, were found to be wanting in every way! They should now be made to pay both in compensation and 'under the law' for what they have done. Only then will they learn that crime doesn't pay!"
For anyone that still has their doubts, ask yourself:
(1) Why has a raft of fresh financial regulations now been introduced by this Government following the Storm Financial fiasco?
(2) Why have the banks now been forced to reconsider their margin loan conditions?
(3) Why is ASIC charging the Banks with wrongdoings?
(4) Why has the Court now thrown out the Banks' strike-out motions?
The people that lost money in Storm didn't lose everything because there was a global financial crisis in 2008. They lost money because Storm and the Banks did not act in sufficient time to protect their customers’ assets! The banks did so where their other margin loan customers were concerned, but because they had secret agreements (unbeknown to their Storm customers) with Storm, they delayed acting until it was all too late.
Margin calls by banks are normally made within 5 days. The CBA took between 10 and 11 weeks to make margin calls. The Macquarie bank took between 3 to 4 weeks to make margin calls. In volatile markets where even hours can sometimes be critical, the result of the banks’ actions was catastrophic for their Storm customers.
These banks, the CBA, Macquarie and the BoQ, violated their own banking codes of conduct, various statutory Acts, trampled on their Storm customers’ rights, illegally assigned their contractual obligations to Storm, and altered their contracts with their Storm customers by entering into covert agreements with Storm.
Anyone that still believes you can trust banks is delusional. The facts speak for themselves
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Storm and the Banks (Part 7)
The Media only gives one side of the story because all the facts have not come out yet. If the banks have their way, they never will.
So, for people that like to throw the first stone, I suggest that you have a rethink.
(1) The people that invested in Storm Financial did so in good faith.
(2) For the most part they were elderly people (Aussie battlers) that had worked hard all their lives to be self-funded in their old age.
(3) They are proud people who were not content to live off the welfare system, but instead went out and did a job of work.
(4) Many worked their hearts out to put away a nest egg for their old age. Today, in a world where "hard work" appears to be a crime, their striving to do better all their lives is looked down on! It's no wonder then that they are upset.
(5) Not, only have they now lost everything, but they also find themselves condemned rather than the thieves that took all their money, when their only failing is that they put their trust in financial institutions that were found to be completely lacking in integrity or principles.
One thing though! If it takes the rest of our lives (it has taken the lives of some already) we will bring these miscreants to account. You can put money on that! It’s a surer bet than putting it in any bank! We know because we've been there! Done that!
Frank Ainslie - 6th September 2011
Julia
In Memoriam
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I've not seen anyone suggest that moderate leverage on one's house is stupid, though personally I don't like the idea for people who are no longer working and who have just the one property.
But what we have been told many Storm investors did was to mortgage their homes to up to 90%, use those funds to buy shares, and then further take out a margin loan against those shares!
I just can't see how anyone could do that and not understand how much risk they were taking.
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I agree Julia but the advisor I dealt with was such a good salesman and I was made to feel an idiot when I did not want to follow his advice. I did not follow his advice but can see how easy it was for many to do so because they were so convinced that these experts knew the answer. In being fair the advisors also invested and lost most of their assets as well so they did also believe in their own product.
