Storm Financial Group

[Smiley]

"Luke Vogel, who is on the steering committee of the Storm Investors Consumer Action Group, said he was glad a court battle had been avoided but wary about how adequate settlements will be determined."

Me thinks Luke also had close ties to storm and is actually an-ex storm employee.

Great work Carey Ramm and Slater and Gorden.

The support Carey has given so many stormified clients has helped people weather months of challenging times - his optimism, concern, expertise and behind the scene negotiations on behalf of the stormified is so appreciated . . . .

Now BoQ trolls - your turns to convince those in power to do the right thing.

 

[manorleas]

Andrew O'Brien and Luke Vogel were both employees of Ron Jelich, prior to the busines being sold to Storm, and were both in an "advisory" capacity. Andrew & Ron went on to be employed by Storm when the business was sold, whereas Luke did not. Mr Noel O'Brien (who is Andrew's father) is a very very long time friend of Ron's. I believe a couple of other ex Storm employees were involved in the creation of the SICAG website and initial establishment of the group but I'm not sure about their current level of involvement.

It is also well known in the industry that quite a few of the ex Storm advisors are now working for In Focus (another financial planning practice), spruiking the Storm message under a different banner.

 

[Onlooker]

Thank you, "Stung", for replying to my question:

QUOTE What bothers me most about this model of endless greed is that there seemed to have been no end-point. Did the individuals who engaged in this debt-upon-debt arrangement have any specific target in mind when they would sell out, pay off their loans, and be happy with what they had got? UNQUOTE

and making this admission:

QUOTE Speaking of end points Onlooker I make this point. After the initial buy-in with Storm I expected maybe two or three added steps over several years. Instead we were advised at least 5 or 6 times in the first 18 months to add to our margin loan.

In one of the meetings I asked our advisor "when does this all end? when does the time come when we sit back and say enough?" Astonishingly he replied that it "never ends"!

I knew with that reply that I needed to start taking some control over my situation and perhaps not follow the advisor's strong recommendations to the letter. Alas the market declined and I never got my chance to develop a backbone.UNQUOTE

So it wasn't just an 'automatic' process! All those Storm 'victims' decided time and again to go deeper and deeper into the market. Whether they were talked into it is not so much the point as the fact that it was their decision and their decision only.

Now the Forum seems to evolve entirely about the Banks and what they did or did not do. Has anybody gone past the victim-mentality and tried to figure out what the situation would have been six months down the track if the Banks had not pulled the pin? Has anybody bothered to look at the All Ords and figured out that all those Stormers would have lost their pants anyway?

At the nadir of the shake-out in October 2008 the All Ords was around 3300. It was even lower in March 2009 when it hit 3111 on the 6th of March. Even now, in June, it is still only around 3800. Those who suffered the most were the ones who were sucked into the market in the months leading up to May 2008 when the All Ords hit a high of 6033. In hindsight, it was bad advice to buy in then, and it was shocking advice to do so with borrowed money. It proves the old adage that the average punter buys near the top and sells near the bottom.

Not only Stormers did this, others did, too, or else the All Ords would never have gone as high as 6033 as it was those fully invested, highly-leveraged - or "stormified" - punters who caused this bubble in the first place. Those who did buy are now licking their wounds! Only the Stormers seem to think they are entitled to some sort of redress!

Why don't they vent their anger and direct their questions to Mr Cassimatis? I have not seen any demonstrations on the frontlawn of the Cassimatis's mansion! On what well-reasoned and logically-derived-at professional analysis or stockmarket insight did Mr Cassimatis base his advice to them to add more and more money at the top of the market - AND BORROWED MONEY AT THAT! And don't forget the bottom-line (I hate that phrase!): the ultimate responsibility rested with the Stormers! They signed on the dotted line and didn't have the backbone that "Stung" now regrets not having had to say 'No" and to get off the merry-go-round in time.

None of the Stormers will learn anything from this experience unless they accept responsibility for their own action. But perhaps they don't want to learn anything. Maybe all they want to do is wait for the next Messiah to lead you to another 'Promised Land of Plenty." And right now they seem to be punting on another Messiah, those legal firms who hold out the hope for them that they will get their money back.

 

[Onlooker]

To "Stung" and other Stormers:

It would indeed be interesting to learn more about the modus operandi of Storm Financial in its glory days. How did they approach you? What were you told? Was this a business transaction between equals or more like a "give us your money and we'll do the rest" situation? What choice of investment strategies were you offered, if any, given your particular circumstances? Was a financial snapshot taken of your particular circumstances so as to tailor your investments to your needs? Did you have the risks of gearing (i.e. borrowing money to fund your investments and the possibility of margin calls) explained to you?

Mr Cassimatis obviously earned huge sums of money from this business but, given the number of clients, he couldn't have done it all by myself. Others must have partaken of the bounty. What did those other salespeople - sorry, Financial Advisers - earn? Where are they now? Can they sleep at night? I hear that some of them are now involved with the Action Group. Poachers turned gamekeepers? Did they do what they preached and and got into the scheme up to their eyeballs? Did Mr Cassimatis? How much did any of them lose?

 

[Julia]

As stated in the above referenced article by Solly, Mr. D'Aloisio refers to potential "compensataion action". This possible action would be initiated under section 50 powers of the ASIC Act where ASIC fund the action by way of the tax payer. The main criterion for ASIC to declare a section 50 action is that it is considered to be "in the publc interest".

If a section 50 action is declared by ASIC it doesn't mean that compensation is automatically paid to affected investors. It just means that ASIC will use its own nominated legal people and funds to purse the so called "wrong doers".

ASIC would still have to go through the same process as say eg. Slater & Gordon in pursuing recovery litigation. It is a possibility that ASIC won't be able to recover any funds.

Hopefully for Storm investors, ASIC will declare a section 50 action and be successful in obtaining some compensation.

So the taxpayer would fund this process. If there is no money to be found from the Cassimatises (and I'd imagine they will have found a suitable means of , um, disposing of their own funds some long time ago) are you saying if compensation is deemed (by whom? ASIC?) to be payable, the taxpayer is also going to be up for paying this?

I don't think I'd be exactly ecstatic about my tax dollars being paid to people who didn't exert personal responsibility over what happened to their money. No one is going to compensate most of us for the wrong decisions we make.

Onlooker, you make valid points. If you read through this whole thread (a considerable undertaking by this point) you'll see that we've been through all this and asked all your questions re risk profile etc etc before.
Few answers were offered.

 

[Onlooker]

People travel overseas and stuff up. Then they cry, "The Government must help us!" Please note: we are the government; we are to pay for their follies.

People get caught out without adequate insurance. Then they cry, "The Government must help us!" Please note: we are the government; we are to pay for their stupidity.

People engage in harmful acivities (smoking, drug-taking, ec.) Then they cry, "The Government must help us!" Please note: we are the government; we can't live their lives for them.

People make high-risk investments. Then they cry ..... need I go on?

I don't want a nanny-State! I don't want to be anybody's nanny!

Please use MY tax-dollars for building better roads, better schools, better hospitals! And to give a modicum of support to those who have truly become dependent on the State - which, I imagine, means that we are already paying for those ex-Stormers who are now on a support pension.

 

[Kez180]

So the taxpayer would fund this process. If there is no money to be found from the Cassimatises (and I'd imagine they will have found a suitable means of , um, disposing of their own funds some long time ago) are you saying if compensation is deemed (by whom? ASIC?) to be payable, the taxpayer is also going to be up for paying this?

I don't think I'd be exactly ecstatic about my tax dollars being paid to people who didn't exert personal responsibility over what happened to their money. No one is going to compensate most of us for the wrong decisions we make.

Onlooker, you make valid points. If you read through this whole thread (a considerable undertaking by this point) you'll see that we've been through all this and asked all your questions re risk profile etc etc before.
Few answers were offered.

The taxpayers would fund the litigation not the compensation...

I assume that if ASIC was to sue Storm it would be as a sort of token kick to the head...

If they go ahead it will be after the banks simply because they are solvent and could pay compensation if ordered to.

 

[Farencue]

This thread has taken a turn for the better, now we are hearing a bit more about what really went on and who was involved in this scam instead of all the boohoo stories from people who "only wanted a comfortable life".
We all want a comfortable life but some of us dont believe there is such a thing as an easy or free ride.

SICAG was a stinking fish from the start - an old boys club determined to take down the banks because they thought that would take the focus off themselves and the fact they were nothing but greedy and were enticed by members of their own family as well as their "associates" and "close friends". I guess it is a bit hard to explain to your close friends that you essentially involved them in a scam.

And Manorleas: Thankyou very much for this information:
"It is also well known in the industry that quite a few of the ex Storm advisors are now working for In Focus (another financial planning practice), spruiking the Storm message under a different banner".

Take heed you Stormers, dont get caught out again! Stung and Onlooker, thankyou for your contribution here.

 

[Onlooker]

Yes, "Julia", quite a thread and over a hundred pages already! It seems to confirm one of Schopenhauer's sayings:

"There are few ways by which you can make more certain of putting people into a good humour than by telling them of some trouble that has recently befallen you, or by disclosing some personal weakness of yours."

And what greater weakness is there than greed?

The sharemarket mirrors the sort of society we live in. And for each one of us, the way we operate in this market is a very good indicator of the sort of person we are: avaricious or cautious, stupid or disciplined.

It's a game! Would you have bet everything you had on a game?

In quite recent times, we have had the Bernie Madoff and the Allan Stanford (sorry, SIR Allan Stanford!) scandals in the USA; we have our own Financial Storm here. In times past, we have had the Tulip Boom, the South Sea Bubble and hundreds more ... and there will be many more in the future because you cannot legislate against greed! And nor can, or should, you help those who engage in it.

As I wrote in a previous post:

"Had things gone their way, had the market gone UP by 50%, they would no doubt have rubbed their hands with glee and regarded the rest of us, who conducted their financial affairs with a little more caution, as complete simpletons. However, now that the party is over for them, they're desperately trying to portrait themselves as innocents who have been had. As my Canadian friend Chris put is rather succinctly, "Playing dumb is not an option!" They were all playing "double-or-nothing" - and got it, one way or the other!"

 

[Onlooker]

oh, and I forgot, here's a Public Appeal to assist Mr Cassimatis and all his super-charged salespeople who are also suffering:

http://www.youtube.com/watch?v=qDC0qcf0kzE&feature=player_embedded

(Who said you couldn't smile even with tears in your eyes?

 

[Onlooker]

The same people who gave us the lovely word "Schadenfreude", also have the very fitting saying, "Geteiltes Leid ist halbes Leid", meaning that a loss shared is only half a loss.

So allow me to tell you of my experience as we went through the 2008 shake-out:

The high-point was the 1st of July 2007 when the All Ords stood at 6853. We were all financial geniuses who had just found the secret of everlasting prosperity!

The euphoria lasted until December 2007 by which time the market had ever-so-slowly declined by about 10%.

By March 2008 it had declined 20% in slow, small, incremental steps. Nothing to worry about as we were still flying high. In fact, all throughout the next three months things improved slightly but then the rot set in in July 2008.

By October 2008 I was down 45% from the all-time high in July 2007.

By November 2008 I was 55% down!

The new year brought the tiniest of recoveries, and as recently as March and April I was still 30% to 40% down.

As of today, when the All Ords is at 3802, I am still 29% off my best and all indications are that the recovery will be long and slow. The All Ords may be back at 4000 by Christmas!

During all this time I remained pretty much fully invested. It was all my own money and I did not need any of it as the dividend income from the underlying shares gave me an adequate income (of course, it took a toll on my nerves but that's another story for another time

THAT is the difference between investing and gambling!
THAT is the difference between me and Storm!

Had I been 'stormified' and in the market with other people's money, I would've lost my pants, too, as those other people would've wanted their money back - and who can blame them?

I'm still down many hundreds of thousands of dollars! Money I regret not having, not because I want it for myself but for what it could've done for some of the charities I support in India and in Bali.

I can't sue anybody for my own folly! Perhaps I should've sued my parents for putting such a dumb bastard into the world but, alas, they're already both dead.

 

[Farencue]

Julia, I thought you might be interested to know that not all publications are reporting that the CBA is compensating the Stormers.
This article calls it a dispute resolution process, which of course is not the same thing as being compensated. For some reason I cant post the link, so have copied the article from www.moneymanagement.com.au

CBA in mediation with Storm clients
25 June 2009 | by Benjamin Levy

The Commonwealth Bank (CBA) is trying to avoid a lengthy litigation process with former clients of Storm Financial by instituting a dispute resolution process. The bank is working with Slater and Gordon, which is representing many former Storm clients, to institute the process.

A statement by Slater and Gordon affirmed that the CBA would review clients' circumstances on a case-by-case basis, including full disclosure of documents relevant to each client. An initial group of Slater and Gordon clients have been selected at random to take part in the process.

Former High Court Justice Ian Callinan will work as an independent arbitrator if CBA and former clients cannot reach an agreement.

The CBA said any client who is dissatisfied with the dispute resolution process is free to pursue other legal outcomes, according to a statement released by the bank.

Slater and Gordon practice group leader Damian Scattini said there had been no change in previous statements from the Bank of Queensland, but the door was still open for them. Slater and Gordon has not called on Macquarie Bank for comment.

The Bank of Queensland is believed to have threatened to sue former Storm clients for misrepresenting their income, but the head of corporate affairs Caroline Dunworth denied the allegation. BOQ has said it is not reviewing its lending practices in relation to former Storm clients.

Manorleas, again a problem with linking but I have just read an article in the Redcliffe & Bayside Herald dated 11th February 2009 where the Redcliffe Leagues Club denied links with Storm.

Redcliffe Leagues Club denies Storm connection
11 Feb 09 @ 01:42pm by Paul Lancaster
KIPPA-RING:
THE Redcliffe Leagues Club has hit back at ``ugly rumours’’ it is involved with the collapsed financial adviser Storm Financial Group.
General manager Tony Murphy dismissed ``bad gossip’’ that the club had links to Storm Financial, through club director Bob Jones and other Storm agents.
``The club is not broke, is not closing its doors and does not have any investments with Storm,’’ Mr Murphy said.
``Under our charter we have the power to invest money back into the club or with community groups.’’
He said there had been no board discussion about the Storm Financial collapse.
``These guys worked with Storm and Bob Jones on the club board, but that’s all,’’ he said. ``It is OK to invest in shares but the club has no links or investments with Storm Financial.’’
Mr Murphy said the club was looking forward to the Dolphins` football season launch on February 21.
Some Storm Financial representatives were thrown a lifeline by financial planning company Infocus Money Management. Infocus, a Sunshine Coast-based firm with 42 offices Australia-wide, has employed Redcliffe-based Storm advisers and has given advice to former Storm clients.
Infocus managing director Darren Steinhardt said the financial planning industry needed to help rather than ``sit back and watch the fallout from Storm’s demise’’.
One of Storm Financial Redcliffe’s high profile directors, Bob Jones, has taken a job as a financial planner with Infocus .
Mr Steinhardt said the decision to employ Mr Jones, along with two other ex-Storm advisers, and Dolphins greats Wally Fullerton-Smith and Trevor Benson, was not taken lightly.
``It’s commercially very risky considering the negative publicity surrounding Storm Financial but the risk of not doing anything is even greater,’’ Mr Steinhardt said.
Mr Jones was unavailable for comment.

Interestingly, the previous director of In Focus who I wont name here (but I did pay to find out his name so I do have the facts) has a very bad name in a certain part of the Northern Territory and North Queensland. He has passed himself off as an accountant when he is in fact not one.
His brother who is a qualified accountant is a very dodgy character who caused extreme distress to me and others in the area of finances.

Ah, gotta love a small world.

 

[Judd]

The Bank of Queensland has virtually told Slater & Gordon and Stormers to rack off.

See today's BOQ announcement on ASX web-site.

 

[Farencue]

Thanks onlooker for outlining your situation. All the best to you.

 

[Julia]

The same people who gave us the lovely word "Schadenfreude", also have the very fitting saying, "Geteiltes Leid ist halbes Leid", meaning that a loss shared is only half a loss.

So allow me to tell you of my experience as we went through the 2008 shake-out:

The high-point was the 1st of July 2007 when the All Ords stood at 6853. We were all financial geniuses who had just found the secret of everlasting prosperity!

The euphoria lasted until December 2007 by which time the market had ever-so-slowly declined by about 10%.

By March 2008 it had declined 20% in slow, small, incremental steps. Nothing to worry about as we were still flying high. In fact, all throughout the next three months things improved slightly but then the rot set in in July 2008.

By October 2008 I was down 45% from the all-time high in July 2007.

By November 2008 I was 55% down!

The new year brought the tiniest of recoveries, and as recently as March and April I was still 30% to 40% down.

As of today, when the All Ords is at 3802, I am still 29% off my best and all indications are that the recovery will be long and slow. The All Ords may be back at 4000 by Christmas!

During all this time I remained pretty much fully invested. It was all my own money and I did not need any of it as the dividend income from the underlying shares gave me an adequate income (of course, it took a toll on my nerves but that's another story for another time

THAT is the difference between investing and gambling!
THAT is the difference between me and Storm!

Had I been 'stormified' and in the market with other people's money, I would've lost my pants, too, as those other people would've wanted their money back - and who can blame them?

I'm still down many hundreds of thousands of dollars! Money I regret not having, not because I want it for myself but for what it could've done for some of the charities I support in India and in Bali.

I can't sue anybody for my own folly! Perhaps I should've sued my parents for putting such a dumb bastard into the world but, alas, they're already both dead.

Onlooker, you've outlined the situation and philosophy of many of us who've been posting on this thread, whether we've held on through the downturn, or cashed out when the market fell. Whichever, we took responsibility and made a decision, the results of which we accept today.

This is why any notion of our taxes paying 'compensation' to Stormers is less than welcome.

Keiran, thank you for info that the taxpayer wouldn't actually be doing this.
I hope you're right.

Julia, I thought you might be interested to know that not all publications are reporting that the CBA is compensating the Stormers.
This article calls it a dispute resolution process, which of course is not the same thing as being compensated. For some reason I cant post the link, so have copied the article from www.moneymanagement.com.au

Farencue, thanks for that. I might be quite wrong, but I had the impression that the process referred to in Quincy's earlier post wasn't to do with the CBA but rather to do with a separate consideration by ASIC.

 

[Onlooker]

Thanks for your best wishes, Farencue, but I'm okay. "What does not kill me, makes me stronger." (Friedrich Nietzsche, Twilight of the Idols, 1888)

My point in setting out my own position was to illustrate to all those ex-Stormers that, had they done without gearing and worked entirely with their own money (or just the borrowed money on their houses which wasn't subject to margin calls), they could have sat out the Financial Storm (if you will pardon the pun), notched up paper losses of about 50% at its worst moments, and perhaps be no more than 30% down today. Having 70% left is better than having less than nothing, don't you think?

Without preempting anything, my guess is that this whole thing will turn on how this gearing-up-to-the-gills business was presented and explained to the punters.

On a lighter note (and please forgive me my levity), they may discover having been bullied at school:

QUOTE
A New South Wales man has successfully sued the state's Education Department for the bullying he suffered as a schoolboy in the 1990s. David Gregory, 30, from Mollymook, south of Sydney, suffers obsessive compulsive disorder and agoraphobia and has blamed his condition on bullying he was subject to while at the Farrer Agricultural High School in Tamworth. He was seeking more than $2 million in lost earnings, but Justice Elizabeth Fullerton has awarded him almost $470,000 for losses connected to his inability to work. The court heard Mr Gregory was subjected to six years of bullying at the school in the NSW's north-west. He was called a "poof" and a "Nazi" and he was hit and publicly humiliated. He alleged that teachers had done nothing to deal with complaints and had not intervened to stop him being socially ostracised. Mr Gregory will also be paid for future medical costs relating to his mental illnesses, but the amount of damages has not been set.
UNQUOTE

Isn't it a funny world we live in? By the way, this may be my last post for quite a while as Im off to Europe to sue my old school

 

[Quincy]

The taxpayers would fund the litigation not the compensation...

I assume that if ASIC was to sue Storm it would be as a sort of token kick to the head...

Yes, that's it.

Also, ASIC, as part of their process, will be continuing to look at the circumstances surrounding the Storm collapse with the possible outcome being the pursuit of Storm / Storm directors (under its various powers as a regulator) to enforce compliance with the Corporations Act. They can seek from a court, declarations of contravention and orders against various parties which may result in restricting the "wrong-doer's" business activities for a period of time or issuing fines or applying for a custodial sentence.

These potential courses of action (and I'm not saying that they will come to pass) may not result in any financial compensation for Storm investors as such but ASIC might consider itself justified in commencing such proceedings as its objectives include the deterrence of corporate misconduct.

 

[manorleas]

Farencue, I believe that a number of directors and staff of the Redcliffe Leagues Club were Storm clients on an individual level, however the club itself was not involved.

“Some Storm Financial representatives were thrown a lifeline by financial planning company Infocus Money Management. Infocus, a Sunshine Coast-based firm with 42 offices Australia-wide, has employed Redcliffe-based Storm advisers and has given advice to former Storm clients. “

This should read, the advisers have been contacting their old Storm clients to get them to change their adviser to In Focus. In this way, the trail commission on thousands of life insurance and superannuation policies (which weren’t affected by the margin loan debacle) will now be paid to In Focus and then on to the advisers. When Storm went belly up the trail most probably wasn’t being paid to anyone. I hope the purchasers of the Storm book got a good price – it's a diminishing source of revenue.

``It’s commercially very risky considering the negative publicity surrounding Storm Financial but the risk of not doing anything is even greater,’’ Mr Steinhardt said.

If these advisers eventually get banned from practicing, In Focus has increased its trail book with very little risk to themselves.

 

[Onlooker]

And that, "Quincy" (do you still live in your houseboat? , should be ASIC's main aim: to deter would-be offenders! With criminality in these cases being so difficult to prove, the few who do get caught ought to be dealt with most severely (cutting off their goolies comes to mind).

Does anyone know how difficult it is to obtain a Financial Planner's license? Is it just another one of those multiple-question tests? I mean, there ought to be several different grades of license which would limit license-holders to specific values. After all, being the Master of the Universe over a BILLION dollars is quite a different responsibility to being in charge of a mere MILLION.

Road users are required to undergo different tests and hold different licenses depending on the type of vehicle they drive (motorbike, car, truck, bus, commercial use, etc.)

 

[Big Max]

Did anyone listen to the first of the public hearings into the collapse of Storm , Opes Prime and others as ASIC appeared? I missed it.

Yes, I listened to the hearings. Nothing sensational. Most of the questions relating to Storm were fended off by D'Aloisio on the basis on ASIC's on-going investigation into Storm. He did say his 30 agents were poring over 9 million pages of Storm-related documents!