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"The Bank of Queensland (BOQ) is believed to have threatened to sue the clients of financial planning group Storm Financial for misrepresenting their income levels in loan applications, according to a lawyer close to the issue.........But BOQ head of corporate affairs Caroline Dunworth refuted the suggestion that the bank would take such action against individual clients."

I wonder why they don't wish to sue former "now destitute" clients of Storm Financial!!!!!

Full story in Money Management today
A tale of two banks 18 June 2009 by Lucinda Beaman
 
"Tears of joy as Commonwealth Bank admits fault in Storm Financial collapse"

``I am relieved, speechless and very pleased.’’
Those were the words of former Storm director Ron Jelich after news broke that the Commonwealth Bank of Australia has admitted partial responsibility for the Storm Financial collapse..

More by Paul Lancaster in the Redcliffe and Bayside Herald;

http://redcliffe-and-bayside-herald.whereilive.com.au/news/story/tears-of-joy-as-commonwealth-bank-admits-fault-in-storm-financial-collapse/

I've never met Ron but I read he wasn't too well earlier in the year, good to see he's looking happier.....

44322a12601da8906cd50f2c149ab005_resized.JPG
 
"Storm Financial incomes at Bank of Queensland branch 'all alike' "

"A FINANCIAL planner claims loan applications from the failed Storm Financial group, processed through a Townsville branch of the Bank of Queensland, consistently showed the same income, regardless of the person's real income or circumstances.

Townsville financial planner Andrew Cook said documentation he had seen showed many of the loans made through the North Ward branch of the Bank of Queensland put a person's income at about $100,000."

More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/story/0,25197,25657828-5006786,00.html
 
"BoQ next stop for Storm fight"

"CLIENTS of the failed Storm Financial who took out margin loans with the Bank of Queensland are unlikely to avoid a court battle, unlike those who dealt with the Commonwealth Bank."

"Storm founder Emmanuel Cassimatis told The Australian yesterday he did not think the bank had gone far enough in its admission. "The main point is the bank's system did not make the margin calls to its clients as it had always done ... in the past," he said. "The consequence of this was that Storm clients were fatally wounded rather than battered and bruised as they would have been under normal circumstances, as were most investors during the global financial crisis." "

More by Sara Rich in The Australian;

http://www.theaustralian.news.com.au/business/story/0,,25656974-36418,00.html
 
For those storm victims out there who have loans with the BOQ this is what u have been waiting for:

Storm investors take BoQ to court
Friday, 19 June 2009 | The Australian Financial Review | Duncan Hughes duhughes@afr.com.au

Bank of Queensland will face legal action today from about 1300 former Storm Financial Services investors, after its refusal to follow Commonwealth Bank of Australia's lead by offering compensation.

It has been a busy week...
 
"Storm: bank did not check"

"THE Bank of Queensland has admitted it did not check people's incomes when lending them millions of dollars in the Storm Financial debacle.

However, it steadfastly denies it has done anything wrong and is now threatening to sue customers for signing loan application documents with incorrect information about their incomes."

More here from Tony Raggatt in the Townsville Bulletin;

http://www.townsvillebulletin.com.au/article/2009/06/19/59831_hpnews.html
 
Todays AFR

Storm investors take B0Q to court
Duncan Hughes duhughesafr.com.au

The Australian Financial Review 119 Jun 2009 I Page: 54 I Financial Services
Bank of Queensland will face legal action today from about 1300 former Storm Financial Services investors, after its refusal to follow Commonwealth Bank of Australias lead by offering compensation.

The board of law firm Slater & Gordon last night approved the case, which seeks damages for an alleged breach of Bank of Queenslands duty of care and alleged unconscionable and misleading conduct in its treatment of customers.

Lawyer Damian Scattini, who has been representing Storm clients, said representative rather than class actions would be brought because of the difficulty in establishing sufficient common ground between investors. A representative action usually involves using an individual case for future settlements.

It follows the admission by CBA chief executive Ralph Norris on Wednesday that the bank had made mistakes, and the suspension of repayment obligations until August 31 and an undertaking that existing settlements would not preclude more payments.

“In stark contrast, Bank of Queensland has been completely bloody-minded and impractical,” Mr Scattini said. “Its like a bunch of schoolboys refusing to admit fault after being caught smoking behind a shed. If they want to play that way, so be it. We like an outing [in court].”

Mr Scattini claimed the bank had threatened to countersue the law firm for costs and launch a counterclaim against the former investors for providing misleading information about income when making loan applications.
A spokesman for the bank denied the claim.

The Australian Financial Review has previously revealed the intimate relationship between Storm Financial and the Bank of Queenslands north ward Townsville branch that allegedly enabled massive amounts of money to be lent to investors who had little, if any, chance of paying the interest unless stockmarkets provided double-digit returns.

Andrew Cook, a former CBA Townsville bank manager turned financial adviser, claims Bank of Queenslands lending practices to Storm investors were worse than those of CBA.

“CBAs loans had some semblance of reason. The Bank of Queensland plucked figures out of the air, there was no reason in many of their loans,” said Mr Cook, who has spent several months working pro bono with former Storm victims. “If the CBA has admiffed defeat, then surely its time for Bank of Queensland to follow.”

An internal report submitted to Storms board of directors shows that by August 2008 Storms clients had invested about $4.9 billion in its various self-branded index funds, with about 37 per cent, or $1 .8 billion, funded by margin lending. Investors are believed to have lost about $3 billion in the collapse.

Labor MP Bernie Ripoll, chairman of the parliamentary joint commiffee on corporations and financial services, which begins public hearings next Wednesday, has also stepped up pressure.

“The CBA has now admitted to making mistakes and now is the time for the other banks involved in this unmitigated disaster to act in good faith towards their clients and follow suit,” Mr Ripoll said.

Restoring Storm investors to their original position could cost CBA about $800 million and Bank of Queensland between $250 million and $300 million, according to estimates by Carey Ramm, the Townsville-based principal economist at AEC Group, a consultancy with offices in four states.

Northern exposure Stephen Reynolds
"CBA needed some good publicity before next week?s public hearings in federal parliament, where it is going to cop a bucketful. Those bastards at the Bank of Queensland are also up to their neck in it", said Mr Reynolds, a 70-year-old Vietnam War veteran who was geared to $1 .2m through a Bank of Queensland home loan and Colonial Geared Investments margin loan.

Barry Peace
"Talk is cheap, lets see some action," said Mr Peace, a 54-year-old grandfather and retired panel beater who lost $1 40,000 on a CBA margin loan. Peace, who lives in Townsville, also has a $500,000 mortgage with the Bank of Queensland

Elizabeth Corcoran
"l hope Bank of Queensland will offer a moratorium on payments," said Ms Corcoran a 62-year-old florist and marriage celebrant who lives on Magnetic Island, off the coast of Queensland. The mortgage on her house was used to invest in Storm andleft her $273,000 in debt.
 
Sure the banks have a small part to play in all this, but hearing Storm Financial clients blaming all their problems on the banks disgusts me. Storm Financial themselves were always the main blame. Their fake customer income/financial reports were happening on a large enough scale that only a couple of weeks after starting work for Storm, my mate was already telling me about the consistent fake reporting going on around him. Not to mention the blatantly irresponsible hype they were putting out to get their customers to agree to massive leverage.

This report about Ron Jelich above and the concern for his health also sickens me. The guy spends his life on luxury holiday trips from the quick dirty money he made. Poor guy.

The banks are just easy targets for lawsuits while the criminals walk away with their pockets full.
 
What rubbish by EC: "The main point is the bank's system did not make the margin calls to its clients as it had always done ... in the past," he said.
I never heard this happening for clients - stormy advisers did this in the past . . .again EC just thought the Cwth bank would carry clients who were in negative equity, if they'd run out of funds to put into the portfolio.
Agree, put the blame where it lies with storm for giving the advice and the whole plan, but the banks bear a responsibility too; doing the loans, working in conjunction with storm.
Some clients signed documents which were altered afterwards - by storm or bank - who knows if anyone will ever get to the bottom of this debacle.
I hope all stormy advisers are named and called to account.
Clients who ahve been stormified do take responsibility for asking for, accepting and trusting shonky advice.
:banghead:
 
I did get a small laugh out of Mr C suddenly returning to the scene via the newspaper report.
Now that the banks have admitted their dodgy checks and balance system for loan approvals - Mr C figures that absolves him of all responsibility ie: "its safe to come out now".
I still find it very strange that there appears to be a major backlash against the banks and not a peep against Mr C.

Does anyone have any theories?
 
joku said:
Sure the banks have a small part to play in all this, but hearing Storm Financial clients blaming all their problems on the banks disgusts me. Storm Financial themselves were always the main blame. Their fake customer income/financial reports were happening on a large enough scale that only a couple of weeks after starting work for Storm, my mate was already telling me about the consistent fake reporting going on around him. Not to mention the blatantly irresponsible hype they were putting out to get their customers to agree to massive leverage.

This report about Ron Jelich above and the concern for his health also sickens me. The guy spends his life on luxury holiday trips from the quick dirty money he made. Poor guy.

The banks are just easy targets for lawsuits while the criminals walk away with their pockets full.
Click to expand...

Your mate could be a good whistle blower and provide the enquiry/SICAG with valuable information. I am sure he contributed too for clients getting large loans!!:cautious:
 
joku said:
Sure the banks have a small part to play in all this, but hearing Storm Financial clients blaming all their problems on the banks disgusts me. Storm Financial themselves were always the main blame. Their fake customer income/financial reports were happening on a large enough scale that only a couple of weeks after starting work for Storm, my mate was already telling me about the consistent fake reporting going on around him. Not to mention the blatantly irresponsible hype they were putting out to get their customers to agree to massive leverage.

This report about Ron Jelich above and the concern for his health also sickens me. The guy spends his life on luxury holiday trips from the quick dirty money he made. Poor guy.

The banks are just easy targets for lawsuits while the criminals walk away with their pockets full.
Click to expand...

Thank you, i thought it was just me being cynical when i read Ron Jelich's story in the paper, it was like "he was the victim" yet when he was taking the money from his clients and and even though he felt like he wasn't doing the right thing by them he continued to take their "hard earned" and margin them to the hilt !!!!! No he was just as guilty as all the others involved , even more so , if he genuinely knew it was wrong but did nothing , thats attrocious.
 
Another interesting submission to Inquiry into Financial Products and Services in Australia:

Submission number 72.

"I'm 46 this year. I was hoping to semi-retire in a motorhome, and travel and work around Australia.

Instead, I have lost my entire share portfolio and am saddled with $300,000 of debt. Rather than travelling from caravan park to caravan park, I live in one permanently and won't be going around Australia anytime soon thanks to Storm Financial's advice and Macquarie Bank's actions."

The full submission is here;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub72.pdf
 
The bright light of investigation will stay on the banks for a while but the Storm "model" was the real cause of the loss of the Stormers capital.

An irrational belief in a never ending bull market and the delusion that buy and hold was the gospel of market strategies and that one could time the bottom.

Manny seems to have escaped scot free. The politicians would not dare try to corner him.

He is a charming fellow and deserves by his very survival, to continue his valuable financial advisory business in a new company structure. Manny ex Stormers would follow him again I am told.

The 2000th post on this thread.

gg
 

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