Hi guys, long time reader of this thread (back on about page 20-30 odd), but due to having a filthy hotmail account, I wasn't able to comment. Alas, all is good now.
Just wanted to throw some insight into this debacle from someone who probably should have known better, but hindsight is a wonderful thing.
Solly posted what was my submission into the Parliamentary Inquiry earlier, I won't link it again, but you can probably piece together which one it was noting my hatred of a certain Colonial Margin Lending....
Emotional rhetoric aside, I am still bloody livid over the whole affair. Both with Storm and the CBA/Colonial. Most of the whole story in terms of getting involved with Storm is in my submission, but there were a few things that may prove interesting little asides:
1. Risk management. Risk was discussed at length, and the plethora of paperwork we were given outlined that investing in 'shares was an inherently risky activity' quite plainly. So why we now have people bleating about not being a little nervous when they had 1.2+ million dollar margin loans is beyond me. We had to view and sign EVERY page of the Storm documentation which explained the entire process clearly. In my anger post-collapse I double checked it to see if I had had the wool pulled over my eyes....alas, I couldn't really fault it. We had signed it saying we understood it. We were given the option of taking it to an accountant/lawyer before signing. We even took it all home and digested it before returning it.
For people to say 'oh I was tricked into it! Give me my financial position pre-Storm back' is laughable. Don't get me wrong, I wouldn't urinate on EC if he was on fire in the street, but people have themselves to blame for their level of debt.
2. Colonial/CBA. My biggest bugbear with these clowns is that they happily lent us what I consider a modest increase based on our assets ($27 000) one week for the purposes of increasing our Index Fund, but then sold it all down ONE and FOUR weeks later, when we weren't even in Margin Call. No matter your position, the whole fund got sold at basement prices. Who the hell 'bought' these shares? I had NO way of checking my LVR and received NO bank statements from Colonial for the months of Oct-Nov. People say 'oh well you should have known' but let's get one thing clear, I PAID a licensed body to look after my affairs and was paying monthly repayments to an establishment that prides itself on 'having a personal relationship with their customers'. ONE phonecall would have saved my investment and I would have either shifted to cash (as I had previously directed them to), or injected more into it. Blaming people for going 120% into Margin Call is like paying a doctor to operate on you, but then cutting yourself open to 'check' his/her work. I accept the losses I made, and I have learned some very good lessons.
3. The 'Bank/Storm' Relationship. A few little interesting things have come up that we remember since we started going in there. I remember that the Storm staff had just gotten back from Europe and our advisor was telling us about how much fun him and his g/f had. I asked 'how much was it?' and his reply was 'apparently the banks picked up a lot of the tab mate, no idea why. I'm not going to complain, we'll have to get you guys along next year!'
While I don't feel particularly sorry for my advisor (he was about late-20's, same age as us and had just started at Storm) I asked him in Dec 08 what his feelings were regarding his future job prospects with Storm. He told me, 'mate, I've been told that we are all fine and that there is enough money to get us through this downturn. I'm abotu to go overseas with the g/f for Christmas and I can tell you now I wouldn't be leaving without having a job to come back to.' Poor bastard, he probably found out overseas that he was unemployed with no benefits/salary paid. Oh well, his price for his involvement in Storm is a now no-doubt toxic resume.
4. SICAG. Pretty dodgy if you ask me, and some good points raised by previous posters. The whole 'it was the evil banks, EC/JC are innocent!' reeks of sycophants dining at a certain table in Belmont every other week. My family in Brisbane (who recommended Storm to me) went through O'Brien/Jelich and Co. and they dropped their clients like a hot potato when it all went down.
My brother realised there were warning signs with the Redcliffe branch of Storm (and how cavalier they were getting) when a certain house on the Redcliffe shoreline went up for sale and my brother's adviser was telling him how Ron Jelich was going to buy this 'edifice' for the new Brisbane Storm HQ.
I think the house is the epitome of architectual evil; a huge yellow monstrosity that looks like it was designed by a kindergarden student, but it sold a few years ago via auction for ~$2.6 million. Apparently O'Brien told my brother that Jelich rang the auctioneer (realising he had missed the auction) and said 'is the buyer still there?' to which it was responded 'yes'. The story goes that Jelich told the buyer to wait there, walked up to him and offered him another $400-600k on top of the price he just bought it at. The final scary nail in the coffin was that the hose wasn't zoned half commercial, so it proved useless to Storm. Alas, this was pretty much a sign of their attitude to their perceived unending supply of money in the end.
I even heard that one Storm employee was using the infamous company jet for flying lessons at some point....but I can't back that up in concrete.
Anyway, someone I know has just been offered a very large sum (six figures) from the CBA to make this whole thing go away. It doesn't get them back where they were (and neither should it noting again, the RISK they willingly took) but it has allowed them to retire with peace of mind. So for thsoe saying the banks aren't at fault, clearly the banks lawyers don't seem to think so....
If you have any more questions, let me know....I'm happy to rain on Storm's parade as a disgruntled customer.