Storm Financial Group

[Judd]

"95% Storm, 5% Banks"

If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because

"several houses have been sold recently in your area so we can lend you $140K"

this happened without me stepping into a bank to produce/sign any paperwork and the bank had not laid eyes on my house (it may have been a tin shed for all they knew) - I would tend to reconsider those percentages

And this is what I cannot understand no matter how hard I try. Why not simply reject the loan offer? Just because a bank says that will lend that amount of money you're not forced at gunpoint to take it up. You surely agreed to take it up even though you didn't have to.

This is what my mindset is unable to comprehend.

 

[doobsy]

"95% Storm, 5% Banks"

If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because

"several houses have been sold recently in your area so we can lend you $140K"

this happened without me stepping into a bank to produce/sign any paperwork and the bank had not laid eyes on my house (it may have been a tin shed for all they knew) - I would tend to reconsider those percentages

I don't see a need to re-consider anything. If you read other posts you will see that I have clearly outlined the case for retirees with no income sources to have the debts forgiven.

The banks didn't knock on the Storm doors saying "have we got a product for you". Cassimatis dreamt up a way he could tip every client upside down, shake them as hard as he could for every last cent of available cash and equity and then via "creative disclosure" borrow against that sum. He then dreamt up a way to convince people they were better off paying him upfront for the priviledge.

I am not arguing that the banks had no knowledge (we ALL know they did) but this was a strategy put together by storm using lending products that were legal and available on the market. If you honestly had "nil" income then whoever completed the loan docs disclosing otherwise is who you should be after not the bank for processing them. The fact of the matter is that using equity in the home OR using a margin loan are both legal strategies, using them together is a strategy that Cassimatis knew would provide the largest fee base from each client.

Goodness knows how many tens of thousands of people around Australia have margin loans. None of them needed to provide details of where the equity came from either, that was the way they were structured and why they have always been risky. It is not the job of the bank to tell you this, although they do in their disclosures. Those loans only care about the equity protecting the loan. If the equity came from tapping into the family home then the margin lender isn't to know, the people who know are the guys recommending it.

Storm 95%

By the way, if a house is worth $400K and I go to a bank and ask for $140K and show that I WILL have income (supposedly through investment dividends etc), then why is that illegal? Plenty of people draw back down on their home loans, some to go on holidays which wastes money - do they get to have their debt forgiven?, some to do renovations which might not add any value - do they get to have their debt forgiven?, some to go to the Casino because Tony Windsor wasn't quick enough - do they get to have their debts forgiven? Some people drew down money assuming the stock market would never drop more than 30% (where the protection levels promised started to unwind) - yet they expect everyone to give the money back. If markets had only had a 15% hiccup and went on to new highs would the same people be saying "No no, we don't deserve all this upside because you probably should never have lent to me in the first place" I doubt it, they would be telling their best friends to get in their too.

NOBODY at the bank recommended this. Storm recommended this!!!!! People need to remember where the advice came from.

 

[banco]

It seems to me that (particuarly with an aging population) we need to have either a robust "buyer beware" policy in relation to investment products or heavily restrict the kinds of investments that retail investors can enter into.

 

[McLovin]

You accepted Storm’s advice at face value, you failed to adequately research that advice, consequently you believed their claim that it was a safe and conservative strategy, when in fact it was aggressive and highly risky.
You should accept your share of the fault in getting duped by Storm.

I agree. There's too much buck passing. It's your money, not the banks' and not your financial planner's.

 

[Julia]

And this is what I cannot understand no matter how hard I try. Why not simply reject the loan offer? Just because a bank says that will lend that amount of money you're not forced at gunpoint to take it up. You surely agreed to take it up even though you didn't have to.

This is what my mindset is unable to comprehend.

+1.

 

[basilio]

And this is what I cannot understand no matter how hard I try. Why not simply reject the loan offer? Just because a bank says that will lend that amount of money you're not forced at gunpoint to take it up. You surely agreed to take it up even though you didn't have to.

This is what my mindset is unable to comprehend.

I think that obviously people should have their wits about them when financial advisors are trying to get them to take up their offers. They should be checking the figures that are presented, reading the contacts documents carefully, perhaps investigating the integrity of the companies behind the deal..

That's what every sensible person does don't they ?

Not really. A financial planner is a salesman selling a product that will make him and his boss a lot of money. From my experience and I suspect most others the pitch is always very confident, the documents are deliberately indecipherable and there is almost no way to actually check the credentials of the companies.

And we were in long boom with no apparent end in sight. In those circumstances I could see many people being vulnerable to a story that promised to produce a truly magnificent retirement package. And after all the bank was supporting the deal ? And the share market and property market was going gang busters ?

In my view it was calculated con job. I suggest the industry itself could bear some blame for not having the strength to call the practices to account. But then I suspect most planners were guilty of the behavior in some form and at some level.

I really feel for all the people who have been devastated by this scam and the collapse of many other investment schemes.

 

[bunyip]

Hi Bunyip,


Should we accept out share of the blame because Storm hit us over the head and took our money? No! We accept no blame whatsoever! The perpetrators are Storm and the Banks that dealt with that company. Our state of mind at the time has nothing to do with it!

Frank

I can see that no matter what anyone says to you, you’ll persist with your attitude that ‘Stormers bear no responsibility for what happened – it’s all the fault of someone else’.
OK then, if that’s what you choose to believe, no problem – it’s makes no difference to me.

Incidentally, I wonder who you’re referring to when you say ‘we’ accept no blame whatsoever’.
If you’re referring to your wife and yourself, then OK. But if you’re referring to Stormers generally, then I think you may be out of touch. There have been a number of Stormers who have openly admitted on this thread that they were gullible and naïve and they should have checked things out more thoroughly before signing with Storm.
Last year at a school reunion I was talking to a Storm victim. One of the things he said to me was “Looking back on the Storm debacle, I can see that I should have looked into it much more closely. I still don’t know how I could have been so downright f*****g stupid.”

When my wife and I were raising our kids we drummed into them over and over again the importance of doing their own thinking rather than letting others think for them. We hoped this advice would help them to resist peer group pressure in their teen years, and help them to make the right decisions in adult life.
Now that they’re responsible young adults in their early twenties, we still stress the importance of doing their own thinking.

And so Frank, in relation to the Storm debacle I’ll leave you with this thought ........
You wouldn’t be in your current predicament if you’d put sufficient effort into thinking for yourself instead of relying on others to do your thinking for you.

 

[Solly]

I'm very interested to hear from the Stormers about what preceptions they held about the monitoring systems and software that was tracking their portfolios.

Did they feel confident that this was being done or was it not a concern?

 

[DocK]

I'm very interested to hear from the Stormers about what preceptions they held about the monitoring systems and software that was tracking their portfolios.

Did they feel confident that this was being done or was it not a concern?

Hi Solly,

Speaking only for myself, my adviser always assured us that our investments were being closely monitored and all necessary safeguards were in place to ensure that we would never be in any danger of losing our home. He was quite keen to brag about their state-of-the-art software (what a joke that turned out to be) and all the levels of protection that were in place. When things started to go pear-shaped and I was unable to get in contact with anyone from Storm, I dealt with Challenger and Macquarie directly to have our managed funds withdrawn and margin loan cleared, with our remaining capital (decimated though it was) paid to me directly. As I am probably younger (late 40's) than the average Storm client, and had access to the various websites etc required, I was able to do this. I'm guessing quite a few older/less computer literate clients either did not know how to go about this or didn't have a clue they even could deal directly with Challenger/Colonial. I really feel for those clients who wound up in negative equity on their margin loans because they either were not able to monitor their situations themselves or trusted their advisers to be doing it for them. I'm aware that quite a few thought they had "gone to cash" several weeks before receiving a margin call, as they had signed instructions to that end.

 

[Solly]

Hi Solly,

Speaking only for myself, my adviser always assured us that our investments were being closely monitored and all necessary safeguards were in place to ensure that we would never be in any danger of losing our home. He was quite keen to brag about their state-of-the-art software (what a joke that turned out to be) and all the levels of protection that were in place. When things started to go pear-shaped and I was unable to get in contact with anyone from Storm, I dealt with Challenger and Macquarie directly to have our managed funds withdrawn and margin loan cleared, with our remaining capital (decimated though it was) paid to me directly. As I am probably younger (late 40's) than the average Storm client, and had access to the various websites etc required, I was able to do this. I'm guessing quite a few older/less computer literate clients either did not know how to go about this or didn't have a clue they even could deal directly with Challenger/Colonial. I really feel for those clients who wound up in negative equity on their margin loans because they either were not able to monitor their situations themselves or trusted their advisers to be doing it for them. I'm aware that quite a few thought they had "gone to cash" several weeks before receiving a margin call, as they had signed instructions to that end.

Thanks DocK,

That monitoring scenario is very similar to what has been relayed to me by my Stormer mate.

It makes me wonder whether there has been any breach of Section 178BA of the Crimes Act, the Federal Law regarding obtaining benefit by deception.

S

 

[bunyip]

Some Stormers have stated that one of the reasons they accepted Storms financial plan was that Storm was ASIC approved.

Frankly I doubt if ASIC could spot an elephant in a pumpkin patch – they’re well known to have a poor track record over many years when it comes to spotting dodgy investment schemes and shutting them down.
The incompetence of ASIC was widely reported in the media long before Storm Financial started making the headlines.

Learning that ASIC approved a financial advisory company would not have been reason enough to have any faith that company, in my opinion.

 

[doobsy]

More comments from the darkside

If someone approached the banks with a business plan to draw equity from their home to provide capital for say a coffee shop and were lent the money then the coffee shop fell on tough times and the business went under, should the person have to pay back that debt or was it the obligation of the bank to know that he wasn't very good at managing his money and had assumed the business would grow? Was it the banks fault the customers didn't come as expected? Or should he harden up, and start paying off the debt again?

Also on the "selling" by fin planners. If you step on a car lot expect to be sold a car. Providing advice is how planners make money. You wouldn't take everything a car salesman said at face value without a bit of research on the model, the financing etc.

 

[Frank Ainslie]

Frank

I can see that no matter what anyone says to you, you’ll persist with your attitude that ‘Stormers bear no responsibility for what happened – it’s all the fault of someone else’.
OK then, if that’s what you choose to believe, no problem – it’s makes no difference to me.

Incidentally, I wonder who you’re referring to when you say ‘we’ accept no blame whatsoever’.
If you’re referring to your wife and yourself, then OK. But if you’re referring to Stormers generally, then I think you may be out of touch. There have been a number of Stormers who have openly admitted on this thread that they were gullible and naïve and they should have checked things out more thoroughly before signing with Storm.
Last year at a school reunion I was talking to a Storm victim. One of the things he said to me was “Looking back on the Storm debacle, I can see that I should have looked into it much more closely. I still don’t know how I could have been so downright f*****g stupid.”

When my wife and I were raising our kids we drummed into them over and over again the importance of doing their own thinking rather than letting others think for them. We hoped this advice would help them to resist peer group pressure in their teen years, and help them to make the right decisions in adult life.
Now that they’re responsible young adults in their early twenties, we still stress the importance of doing their own thinking.

And so Frank, in relation to the Storm debacle I’ll leave you with this thought ........
You wouldn’t be in your current predicament if you’d put sufficient effort into thinking for yourself instead of relying on others to do your thinking for you.

Hi Bunnyip (Part 1)

Last year I served on a jury in the Supreme Court. At that time, I was amazed at the prejudices other jurors brought with them. “The accused’ relatives look sus to me! He is Croatian and we know they can’t be trusted!” and other such nonsense. Someone even said they had to go to a function on a certain day and wanted us to finish a day or two early for that reason. And so on and so on! They didn’t consider the evidence but rather let their prejudices get in the way of the evidence. They also let their prejudices get in the way of the truth!

This forum is a little like that! No one so far has tried to establish the facts, but rather they have focussed on the unimportant things. For instance, our reasons for being in Storm, our motivation for doing so, our gullibility, our naivety and so forth. Why we went to Storm is our business! What happened to us as a result and the reasons why we lost our money when Storm collapsed should really be the focus of attention in this debate. Instead you all want to adopt a superior attitude. You cannot explain away what happened by being glib, ignoring the facts or remaining ignorant of the issues. So far, many of you have chosen to do just that.

At times, some of the postings I have read here have me wondering if we have a few bankers among us who are trying to disseminate misinformation.

Some of the comments are so way off the mark that they defy belief.

It is not about us, the victims, but rather about the Banks involved with Storm and their wrongdoings. Until you can comprehend this fact and stop trying to analyse our motivations for being in Storm, you will never grasp the fundamentals or the issues that are paramount.

Some of you have rendered your verdict based on preconceived notions. You have assumed that the Banks have acted within the law and these loans were extended on purely commercial grounds, and in accordance with normal banking practice and principles contained in Banking Codes. In assuming such a position you are choosing to ignore what really happened. Your remarks are therefore uninformed.

Let commonsense prevail if nothing else. Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time?

When people accept that the Banks have a case to answer, a sensible debate can then ensue. Bear in mind that ASIC started litigation proceedings against these Banks after conducting one of the most exacting investigations in its history which has cost millions. ASIC has gathered literally millions of documents on its central data-base to draw on. If there isn’t a case to answer, why does ASIC believe otherwise?? ASIC has spent millions to bring these Banks to account? Do you know something that ASIC doesn’t?

If ASIC believes it has a case, it should be good enough for you? What evidence have you really considered when you think about it? What facts have you acquainted yourself with? What insider knowledge do you possess that makes your opinions more valid than ASIC’s or our lawyers for that matter. (See Part 2)

 

[Julia]

Let commonsense prevail if nothing else. Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time?

When people accept that the Banks have a case to answer, a sensible debate can then ensue. Bear in mind that ASIC started litigation proceedings against these Banks after conducting one of the most exacting investigations in its history which has cost millions. ASIC has gathered literally millions of documents on its central data-base to draw on. If there isn’t a case to answer, why does ASIC believe otherwise?? ASIC has spent millions to bring these Banks to account? Do you know something that ASIC doesn’t?

If ASIC believes it has a case, it should be good enough for you? What evidence have you really considered when you think about it? What facts have you acquainted yourself with? What insider knowledge do you possess that makes your opinions more valid than ASIC’s or our lawyers for that matter. (See Part 2)

Maybe consider the number of cases into which ASIC has poured resources and taken to court, and lost.
If I were you, I wouldn't be betting my soul on the competence or judgment of ASIC.

 

[Solly]

More comments from the darkside

If someone approached the banks with a business plan to draw equity from their home to provide capital for say a coffee shop and were lent the money then the coffee shop fell on tough times and the business went under, should the person have to pay back that debt or was it the obligation of the bank to know that he wasn't very good at managing his money and had assumed the business would grow? Was it the banks fault the customers didn't come as expected? Or should he harden up, and start paying off the debt again?

Also on the "selling" by fin planners. If you step on a car lot expect to be sold a car. Providing advice is how planners make money. You wouldn't take everything a car salesman said at face value without a bit of research on the model, the financing etc.

Re point 1, I believe that it may depend on whose advice the decision to buy was based.

Re point 2, you may not take all that was said on face value but it is reasonable to expect that there is implied statutory protection in place. Maybe it is comforting that there are consumer protection provisions in Part V and VC of the Trade Practices Act and that there are remedies available for breaches.

 

[bunyip]

Hi Bunnyip


Let commonsense prevail if nothing else. Ask yourself why ASIC is now litigating against these banks? Do you think ASIC is doing this for kicks? Do you think ASIC has nothing better to do with its time?

When people accept that the Banks have a case to answer, a sensible debate can then ensue. Bear in mind that ASIC started litigation proceedings against these Banks after conducting one of the most exacting investigations in its history which has cost millions. ASIC has gathered literally millions of documents on its central data-base to draw on. If there isn’t a case to answer, why does ASIC believe otherwise?? ASIC has spent millions to bring these Banks to account? Do you know something that ASIC doesn’t?

If ASIC believes it has a case, it should be good enough for you? What evidence have you really considered when you think about it? What facts have you acquainted yourself with? What insider knowledge do you possess that makes your opinions more valid than ASIC’s or our lawyers for that matter. (See Part 2)

Frank

I say to you – again - that I’m not in the camp that automatically assumes the banks are without guilt. Frankly I don’t know whether they're guilty of anything illegal - I’ll let the courts decide on that. What I do know for sure though is that the banks alone are not entirely responsible for what happened. The fault lies with a number of parties including Storm clients, and particularly with Storm Financial itself.

My comments have been primarily about the fact that the guilt or innocence of the banks would not be an issue to you if you’d properly done your homework by thoroughly investigating the strategy that Storm offered you. If you’d done that, then you would have avoided Storm like the plague, and you’d now be watching all this from the sidelines like I and many others are doing, instead of being embroiled in it yourself.

 

[Harleyquin]

Solly your 'stormer mate' who you refer to in post 5576 took the words right out of my mouth.

As for all the other arguments regarding the 'why did you or why didn't you' I can certainly understand now. Prior to this I trusted because I didn't understand. I also thought we could trust what they were saying, when a planner told me this or that was going to happen I believed. Our biggest mistake to date has been to place our trust in those whom we thought that we could trust. It's a huge huge shock to discover otherwise. Now when I read your posts I understand that many of you have been 'taken for a ride' at some point and you no longer trust. Now there's a few thousand others , called ex stormies , who are now part of your 'group of disbelievers for want of a better word.

Doobsy I've been told by a legal person that what you're saying is in fact incorrect. Whoever filled out the banks documents have to legally supply paperwork to back up all claims and the banks have to legally ask for that documentation. If anyone else knows if this is right or wrong let me know. I would assume that storm filled out the paperwork.

As for why we went to storm, we went because we didn't trust anyone with our money and a family member said they'd been with them for some time and recommended them. We asked around too and everyone who was with them said how good they were. They certainly seemed professional enough to us. Not one person mentioned that they only had a high risk strategy and the advisors certainly didn't mention it. Is that our fault. Some of you will say so and that's fine that's your call.

Sail...30 do I totally agree or what. Storm Financial was indeed the corner store and the banks elevated them to Myer status so obviously it was in the banks best financial interest to do so. The shareholders no doubt would be happy, the banks have been just a huge money making machine for themselves and their shareholders and I don't see that changing anytime soon.

Bunyip loved your off topic subject I'm very interested in aboriginal mythology. I love Ion Idriess and reckon he should be on top of everyone's to read list. I have an old drover friend who lends me his considerable collection of Ion Idriess books and have been slowly making my way through them all. Recommended reading to anyone interested in the early years of Australia. Have you read the one based on his experiences during World War 1 and his time at Gallipoli in the trenches and his experiences in Egypt as he was a light horseman. Highly recommend it to anyone interested in how these men survived, can't remember the title of it, but you wonder 'how did these men bath, eat, sleep etc,..he explains it all so well you feel like you're in the trench with him, just amazing. I'm interested as my grandfather was one of the original ANZACS.

As for getting off topic sometimes that 's not such a bad thing as life is good and we should all enjoy every moment of it and stuff all the other stuff that gets in the way. When you think about what the men went through in the wars that this country has been involved in perhaps our little problems are just that little, at least we're still alive to fight on.

 

[Garpal Gumnut]

As for why we went to storm, we went because we didn't trust anyone with our money and a family member said they'd been with them for some time and recommended them. We asked around too and everyone who was with them said how good they were. They certainly seemed professional enough to us. Not one person mentioned that they only had a high risk strategy and the advisors certainly didn't mention it. Is that our fault. Some of you will say so and that's fine that's your call.

Hq,

Early on in this thread there were many Storm investors who believed that the Cassimatis were blameless in all of this.

Are there any who still believe this?

gg

 

[bunyip]

"95% Storm, 5% Banks"

If it were not for the support of the banks then Storm would be a small corner store in the suburbs of Townsville - I had retired, had nil income yet a bank, thanks to Storm, loaned me $140 large on my house because

"several houses have been sold recently in your area so we can lend you $140K"

this happened without me stepping into a bank to produce/sign any paperwork and the bank had not laid eyes on my house (it may have been a tin shed for all they knew) - I would tend to reconsider those percentages

Why apply for a 140k loan in the first place if if you had no income and therefore no capacity to service the loan? And why accept the loan when it was approved?

Someone must have supplied the bank with figures (false or otherwise) to show how the loan would be serviced. That someone should have been you – after all, it was your loan, not someone else's.
If you entrusted someone else to apply for a loan on your behalf, attend to the documentation, supply the figures etc - did you not see that as an unnecessary and foolish risk?
If you borrowed money without signing any paperwork, or if you signed but didn't get a copy of what you signed, then again did you not see this as unnecessary and risky?

Using a bit of prudence and common sense is not illegal.

 

[Solly]

Hq,

Early on in this thread there were many Storm investors who believed that the Cassimatis were blameless in all of this.

Are there any who still believe this?

gg

GG

Do you think Manny ever trawls this forum ?

Maybe he's responding but I suppose a data rate of 1200 baud probably takes quite a while to authenticate.

S