Storm Financial Group

[Harleyquin]

Thanks for the links Solly, I'll read them shortly, and hope that other stormies also read the information.

No Doobsy I can't give you one example because I know that unfortunately you're right, but that doesn't necessarily make it right, or mean that any of us shouldn't consider any proposal which may improve the situation. I know we're all human and we have a rotten side, some of the rotten sides though have little on the other side.

Bunyip we all know now that you're right re storm. We're all much wiser after the event, doesn't make it any easier to accept that it's right though, and I''m bloodyminded enough to continue to push for change, if that's possible, and I'd like to see everyone seeking advice to read a thread like this so that prospective finance seekers have a more balanced view and more information on making that all important decision, and how bad it can be if you get it wrong.

What hasn't escaped me though is the number of investors who don't use advisors, there's a good reason for that I suspect. I know there are good advisors out there, I'm prepared though to take the advice of others and 'do it for myself'. I don't speak for other stormies or group/s, however the few that I do have regular contact with, feel as I do, don't trust again.

Agree totally with your second paragraph Bunyip, however once again it doesn't necessarily make it right either. As I see it we have two main options, accept the situation or push for hopefully a more positive change.

Yes agree Julia well said, I do realise what some of my problems are so will make a note of what you've said and try and take them on board. This may also be true for some other stormies, as I said yesterday, it's not easy being a storm survivor and it's taken quite a toll and taking a long time to get back to any form of a normal existence.

We've all suffered dreadfully, and I don't like 'comparing our anguish' with other disasters in life, it just feels too hard at present, that's not to say that I, and other stormies I presume, don't think about the awful things that happen to others and feel for them. As another stormie said to me in a recent PM 'we have to remember that we've only lost money'. Initially that was true however after three years of stress many of us have lost far far more than 'just money'.

It's not all bad though, three years ago we were all in absolute shock and in a black hole/tunnel, today we can see a light at the end of the tunnel and most of us are determined to enjoy the simple things in life. The stormies that I've meet are the nicest people you could ever hope to meet and we all support each other as best we can. Personally I now have more good days than bad because I can 'talk' about it and am determined to 'get over it as best as I can'

 

[Solly]

Good news for some Stormers now that Justice John Reeves has approved amendments to original class action claim and is expanded to now include a new breach of contract claim, misleading & deceptive conduct & unconscionable conduct.

I am sure there is much more to come...

 

[Mash]

CBA counsel Robert Hollo SC has described the new claims against CBA as "tectonic"..... earth-shattering.

ASIC won't do it so we will.

 

[Igetit]

Good news for some Stormers now that Justice John Reeves has approved amendments to original class action claim and is expanded to now include a new breach of contract claim, misleading & deceptive conduct & unconscionable conduct.

I am sure there is much more to come...

Hi Solly,

Yes indeed. The net seems to be being cast wider and wider for the poor old Banks. Was advised of Reeves J's directions late yesterday afternoon. Seems to be a bit of a trend emerging in these proceedings.

Interestingly, to this point, not a single mention of any Storm victim being: gullible, lazy, stupid or greedy. These descriptors (inaccurate as they are), of course, are not crimes. The Banks find themselves in this ever more precarious position because - prima facie at least - they appear to have broken a number of laws; for which the Court now requests they offer up their defences. To the sideline observer, it seems that it is only the Banks behaviour that is being brought into focus as the matter now gains momentum. Why is that we have to wonder?

I think the strategy of the Banks going forward has been well anticipated. To date things don't seem to being running their way; I suspect any preconceptions they have about how things are going to play out going forward might end up being unfounded. Seeking to delay the inevitable march to judgement, rather than frustrating a band of people who have demonstrated vast reserves of resilience in the face of overwhelming hardship, I feel will only succeed in making an angry mob angrier. Might not end up being a good idea going there. Just a thought.

 

[doobsy]

The bloke who ran the original enquiry gets it.

http://www.wealthprofessional.com.au/article/blame-poor-advice-not-product-failure-120230.aspx

 

[SJG1974]

Does anyone know what compensation will be sought from the banks?

Will clients be trying to recover all their losses?

Will clients be trying to recover losses sustained after the margin calls were supposed to be made?

Will they be claiming losses on the hypothetical model that would have seen them supposedly recover some of the losses if the Storm Index Funds weren't closed down and the clients (along with their trusted Storm adviser) could manage their way out of it (so that they remain screwed today, but not completely wiped out)?

Does anyone know???

If Storm and ther bank are guilty of running an unlicenced MIS, can clients claim all of their losses back (even though this "scheme" was a simple index fund)? Will Storm clients be forced to pay back their earnings when the market was going gangbusters?

The level of compensation that is granted to victims could open up a whole can of worms.

 

[Solly]

Hi Solly,

Yes indeed. The net seems to be being cast wider and wider for the poor old Banks. Was advised of Reeves J's directions late yesterday afternoon. Seems to be a bit of a trend emerging in these proceedings.

Interestingly, to this point, not a single mention of any Storm victim being: gullible, lazy, stupid or greedy. These descriptors (inaccurate as they are), of course, are not crimes. The Banks find themselves in this ever more precarious position because - prima facie at least - they appear to have broken a number of laws; for which the Court now requests they offer up their defences. To the sideline observer, it seems that it is only the Banks behaviour that is being brought into focus as the matter now gains momentum. Why is that we have to wonder?

I think the strategy of the Banks going forward has been well anticipated. To date things don't seem to being running their way; I suspect any preconceptions they have about how things are going to play out going forward might end up being unfounded. Seeking to delay the inevitable march to judgement, rather than frustrating a band of people who have demonstrated vast reserves of resilience in the face of overwhelming hardship, I feel will only succeed in making an angry mob angrier. Might not end up being a good idea going there. Just a thought.

Hi Igetit

Yes I agree, the Stormers are a resilient collective and when I have been amongst them at Harry's I have definitely sensed the underlying anger and restlessness.

I am wondering if the Levitt video is out of post yet ?

I am looking forward to seeing this and hope it portrays an unbiased factual representation of the saga to date.

S

 

[Igetit]

Does anyone know what compensation will be sought from the banks?

Will clients be trying to recover all their losses?

Will clients be trying to recover losses sustained after the margin calls were supposed to be made?

Will they be claiming losses on the hypothetical model that would have seen them supposedly recover some of the losses if the Storm Index Funds weren't closed down and the clients (along with their trusted Storm adviser) could manage their way out of it (so that they remain screwed today, but not completely wiped out)?

Does anyone know???

If Storm and ther bank are guilty of running an unlicenced MIS, can clients claim all of their losses back (even though this "scheme" was a simple index fund)? Will Storm clients be forced to pay back their earnings when the market was going gangbusters?

The level of compensation that is granted to victims could open up a whole can of worms.

Hi SJG 1974,

It seems that should the UMIS claim get up all contributions made by individuals to the scheme - including prepayment of interest - and all earnings generated as a result of investing in the scheme (dividends, distributions and capital growth), will be refundable to the individual investor. That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present.

You are correct, SJG, the worm can is beginning to shake. The payout to the investor, will of course be fair, as it will reflect their position had they been invested in a legal scheme. No more, no less.

 

[SJG1974]

To the sideline observer, it seems that it is only the Banks behaviour that is being brought into focus as the matter now gains momentum. Why is that we have to wonder?

You have answered this previously, because the banks are the only party still in operation and therefore the only ones that can be brought to account. Storm is dead. Manny and Julie still have their day of reckoning to come.

They are the only party left who APPEAR to have broken any laws and have the capacity to pay for it. As you say, whatever people may say about the victims (and you know my views, which obviously differ from yours, so no need to go there), they haven't broken any laws.

 

[SJG1974]

Hi SJG 1974,

It seems that should the UMIS claim get up all contributions made by individuals to the scheme - including prepayment of interest - and all earnings generated as a result of investing in the scheme (dividends, distributions and capital growth), will be refundable to the individual investor. That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present.

You are correct, SJG, the worm can is beginning to shake. The payout to the investor, will of course be fair, as it will reflect their position had they been invested in a legal scheme. No more, no less.

Thanks Igetit,

So am I right in assuming that, given the scheme was a simple index fund, subject to a margin loan which, despite some special provision increasing the LVR, was just a typical margin loan, the kind of which is available from many different providers, and was operated as such, that they would not have suffered any loss from being in an UMIS compared to a RMIS from the time they invested up to late 2008? Therefore compensation for this period would be minimal?

 

[Igetit]

Thanks Igetit,

So am I right in assuming that, given the scheme was a simple index fund, subject to a margin loan which, despite some special provision increasing the LVR, was just a typical margin loan, the kind of which is available from many different providers, and was operated as such, that they would not have suffered any loss from being in an UMIS compared to a RMIS from the time they invested up to late 2008? Therefore compensation for this period would be minimal?

Hi SJG 1974,

The answer is the answer I previously gave. Very simply put, whatever the individual contributed to the scheme over their period of involvement is refundable to them. This includes all personal monies contributed, interest paid on any attached margin loan and dividend/distribution/capital growth.

How "minimal" or otherwise their loss may have been is not relevant to the calculation. The compensation amount is based on contributions and returns on investment over the life of the scheme. Whether or not an UMIS gains or loses money over the course of its operation is not the key to the assessment of damage.

Your tone, if you don't mind me saying, suggests a preference on your part that the compensation payment be minimal. Is that correct or am I reading too much into things? Doesn't really matter, just curious.

 

[SJG1974]

Your tone, if you don't mind me saying, suggests a preference on your part that the compensation payment be minimal. Is that correct or am I reading too much into things? Doesn't really matter, just curious.

Igetit,

As you know, I think the victims need to accept some responsibility for taking on a high risk strategy. You take a risk, you have to accept some of the consequences if it doesn;t work out. I won't argue about this any more.

Technically, you have one investor who undertook the same strategy, say using a Vangaurd Index Fund, who has to accept his losses, while Storm victims, because their index fund was unregistered, get to get their original capital back? Am I reading that correctly?

So they take a hige risk, get wiped out, but due to a technicality (I know it is more than that), they get to start again.

Do you think this is fair?

Based on that, and it may seem callous, I hope it can be proven that it wasn't an unregistered fund. Because in the end, the fund itself behaved like an index fund, because it was an index fund, just as all the other index funds did. The clients werent burned by being in an unregistered fund in my opinion, so they shouldn't be compensated for investing in one. Sure compensation should come for the non issuing of margin calls and things that happened after that, but as far as I can tell, from the times the unregistered index fund started to when it stopped, it was a simple index fund and behaved as such.

 

[Igetit]

Igetit,

As you know, I think the victims need to accept some responsibility for taking on a high risk strategy. You take a risk, you have to accept some of the consequences if it doesn;t work out. I won't argue about this any more.

Technically, you have one investor who undertook the same strategy, say using a Vangaurd Index Fund, who has to accept his losses, while Storm victims, because their index fund was unregistered, get to get their original capital back? Am I reading that correctly?

So they take a hige risk, get wiped out, but due to a technicality (I know it is more than that), they get to start again.

Do you think this is fair?

Based on that, and it may seem callous, I hope it can be proven that it wasn't an unregistered fund. Because in the end, the fund itself behaved like an index fund, because it was an index fund, just as all the other index funds did. The clients werent burned by being in an unregistered fund in my opinion, so they shouldn't be compensated for investing in one. Sure compensation should come for the non issuing of margin calls and things that happened after that, but as far as I can tell, from the times the unregistered index fund started to when it stopped, it was a simple index fund and behaved as such.

Hi SJG 1974,

What I think is fair or not fair is probably not that important. I think that the law will be interpreted correctly and a decision will be made. The compensation available to unwitting investors who have participated in an UMIS is not of my making. Whether the payment be too much or too little is not really worth us wasting our time on. It is, as they say, what it is.

Another question SJG perhaps worth pondering is this:

What if the Storm investors were pulled aside at the beginning of their "investment journey of discovery" and told - look guys, this thing you are embarking on with these guys (Bank and Storm) is pretty dodgy. Double gearing, borrowing against your home and borrowing some more, and then getting your mortgaged home revalued to borrow more and then being compelled to remain in a falling market by reckless manipulation of your margin account LVR - not so smart. But, and here's the kicker, they've got a system set up that churns this process along no holds barred. You might find it pretty tough to get off this merry go round the way these folks have organized things for you. Importantly, your lender is taking no risk in any of this and is fully supportive of the doctrine being espoused by your adviser. The reason - they've decided that it is a great model for them to make a profit; so the two have joined forces as it were. The relationship they have needs to be fully explained to you - the pros and cons of it all. Because it is dangerous. If they haven't, they are probably involved in the running of an UMIS.

Had this been explained - nobody would have participated in this scheme. Nobody. Therefore, they do need to have everything returned to them. Because the money invested would have been invested in another vehicle with different guidance - maybe they would have sustained losses elsewhere. Maybe not. But now we are playing a guessing game. All we can really legitimately calculate is what was invested in the UMIS. That is the loss. Get it!

You seem like a nice enough bloke. What we (you and I) think about what the quantum of compensation should be - doesn't matter.

 

[Solly]

Follow-up on the auction;

Storm mansion attracts few bids
THE mansion of Storm Financial founders Emmanuel and Julie Cassimatis is expected to be sold today after being passed in at auction for $1.35 million at the weekend.

More @ http://www.townsvillebulletin.com.au/article/2011/11/21/285051_news.html

GG
Have a look at the third comment posted. Looks like Byrnsie has at least one big fan
S

 

[Julia]

What if the Storm investors were pulled aside at the beginning of their "investment journey of discovery" and told - look guys, this thing you are embarking on with these guys (Bank and Storm) is pretty dodgy. Double gearing, borrowing against your home and borrowing some more, and then getting your mortgaged home revalued to borrow more....

This is where you come to the fundamental argument on this thread, viz. why would anyone need to explain to anyone that the above is massively risky for people at or near retirement, even if less of a problem for younger people?

 

[Igetit]

This is where you come to the fundamental argument on this thread, viz. why would anyone need to explain to anyone that the above is massively risky for people at or near retirement, even if less of a problem for younger people?

Hi Julia,

Because the elderly and defenseless sometimes need to have things explained to them. Not only the true extent of the risk of the proposal, but the true nature of the relationship between the two parties pulling the puppet strings. This latter issue, I dare say in light of what is now transpiring in the Federal Court, is in fact the "fundamental argument" of this matter. Indeed, it grows ever more apparent that it is the only issue of interest to the Court.

That is where most people's attention is now directed incidentally. Feel free to make another comment though.

 

[Solly]

This is where you come to the fundamental argument on this thread, viz. why would anyone need to explain to anyone that the above is massively risky for people at or near retirement, even if less of a problem for younger people?

Julia,
This was a question I posed directly to my friend. His response to me was that with all the checking he did he believed that the strategy was sound and as presented it had all the safeguards in place for a worst case scenario.

It was his basic belief that allowed him to proceed. I accepted this but the strategy would never have passed my "smell test" but then again I have a wider and more varied background than my friend and have also met many dubious spruikers and dream-makers both on and offshore.

I suppose we are all different in the manner we assess risk and have varied life experiences to draw on when making major decisions. As the action has now taken a different direction in the courts, the focus will now be on those matters and I am looking forward to the next episodes in this saga.

S

 

[SJG1974]

That is to say, the aim is to put the individual in the position they would have been in had they been investing in a RMIS (they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). The value will be calculated from the date the Scheme is deemed to have come into effect - variously reported at 2001, 2005 and 2007; with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present.

So the client gets to keep their profits from when the UMIS made them money (because they would have earned that money had they been in a RMIS), but they don't suffer the losses because it is a UMIS? They also then get to claim for a lost opportunity for not being in the market since November 2008? So they get the best of both worlds....ride the tails of the bull market, get to keep their profits, enjoy the types of holidays and the like that most only dream of, and then recover their losses because they were in a UMIS? And whats more, they can make a claim because the market went up and they weren't in it?

How do I invest in one of these UMIS? Money for jam if you ask me....high returns, no risk.

Therefore, they do need to have everything returned to them. Because the money invested would have been invested in another vehicle with different guidance - maybe they would have sustained losses elsewhere. Maybe not. But now we are playing a guessing game. All we can really legitimately calculate is what was invested in the UMIS. That is the loss. Get it!

Are you not playing a guessing game with the previous quote above?

"they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). "

Isn't that a guess? Perhaps a registered scheme would have lost money over the period, or certainly not made as much if gearing wasn't used. Lucky bastards....get the good part of the gearing strategy with the profits, and miss out on the bad stuff.

"with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present."

Isn't that a guess- so what opportunity did they miss- how would their money have been invested, would they have stayed invested? what if they did this? What if they did that? Pure guesswork. If they are compensated for the losses leading up to late 2008, they get a second bit because they weren't in the market after that? Nice work.

So how can they have it both ways? How can the clients benefit from the UMIS in the good times by getting to retain their profits, and yet they get to claim back everything they lost when the UMIS goes bad?

Again, where can I invest in one of these things?

 

[Mash]

The forensic accountants have been engaged......

 

[maccka]

The bloke who ran the original enquiry gets it.

http://www.wealthprofessional.com.au/article/blame-poor-advice-not-product-failure-120230.aspx

Sorry Doobsy,

I am not sure Ripoll did actually 'get it'. I'd like to think that if he did 'get it' he would have worked harder to expose the lies told by bank executives. Since the PJC enquiry a large number of documents have been turned up that clearly show a number of bank execs lied. All of these documents existed at the time of the inquiry.

I witnessed at least one (possibly two) occasions when Ripoll refused to accept documentary evidence that might have assisted the inquiry get to the bottom of it.

Cheers
Maccka