Storm Financial Group

Another submission of interest to the

Inquiry into Financial Products and Services in Australia

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub111.pdf

Solly said:

Another submission of interest to the

Inquiry into Financial Products and Services in Australia

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub111.pdf

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If this lady's account, of her treatment by Storm, can be verified there may very well be grounds for criminal charges.

gg

maccka said:

I believe that over time many ex-Storm clients (and I am in contact with many many of them on a regular basis) are coming to the realization that things were not as they believed/expected in the Storm camp. But most of the ones I talk to believe that Storm and the banks were in it together and that had the banks (particularly the CBA and its affiliates) not behaved as badly as they did most of the Storm clients would now be starting to come out of this situation.

Cheers
Maccka

and

I personally believe the majority of the ex-Storm people I come into contact with understood that there were risks in their investment vehicles (as told to them by Storm) but believed that there were multiple layers of protection (as told to them by Storm) that would allow time to protect against the losses of their investment (as told to them by Storm). I also believe, that the great majority of people believed that their houses were not at risk (as told to them by Storm) due to the layers of protection (as told to them by Storm).

I also believe that there are a small number of people that had no understanding of any of the risks.

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Hi all,
(as told to them by Storm) inserted by me in the above.

It is as simple as this:

1. Storm (MC/JC/Jelich and co) hit upon an idea to supercharge an investment vehicle - aka gearing into shares. They get paid every time people add to this investment vehicle and whilst the vehicle is on the road. Giving Storm excellent profits.

2. To make the investment vehicle go quicker they pitch to the banks to make available stronger fuel with larger petrol tanks (read loans/facility/ higher LVR ratios) outside of the normal unleaded fuel they sell. Banks (being profit driven institutions they are) provide the fuel (pats on back all round!).

3. People (in varying degrees) invest in these vehicles based on the following facts:
- they like supercharged investment vehicles to get from a to b quickly (aka greed).
- Storm gets them to buy a supercharged investment vehicle based on it's safety record and perceived low risk (aka trust). Storm are salespeople.
- some people are wood ducks and will never learn (aka wood ducks)

The investment roads get slippery - there is a crash!

The carsales people (read Storm) say their car is not at fault - it was the fuel (read Banks). The Petrol co (Banks) says it just supplied the fuel and has no duty of care to Roadworthy the Investment Vehicle. Main Roads (ASIC) had received complaints about dodgy unroadworthy cars but did not stop the car dealership from selling more.

Summary
1. The cars were overpriced, unroadworthy and promoted by slick without morals salepeople. Blame Storm 80%.

2. Fuel Companies should at least checkout would they sell petrol to.
Blame Banks 5%.

3. Drivers continue to take risks in poor conditions - some pay a heavy price.
Blame investors 10% (except wood ducks they will always be wood ducks and will never even know it).

4. Main Roads should have banned these modified death traps way before innocent people got hurt. Blame ASIC 5%

Storm will cry foul on the Banks to shift blame and avoid hard time and financial ruin. Question "whilst others have suffered in this Crash why are there way more Storm Victims with more serious injuries than any other vehicle?"

Investors will blame Banks as Storm as no money and you may as well chase someone who has got some dough to settle.

"Storm loan agreements set to expire"

"Pre-paid loan agreements at the centre of the Storm Financial investment scheme expire at the end of today."

More by Murray Cornish from the ABC;

http://www.abc.net.au/news/stories/2009/06/30/2612013.htm

Garpal Gumnut said:

If this lady's account, of her treatment by Storm, can be verified there may very well be grounds for criminal charges.

gg

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This lady highlights the very thing that was "Storm" - I doubt the bank filled out her loan application....me thinks Mr Storm may have questions to answer, of course this sort of deception would have been a one off er sorry I mean "a black swan" event.

Ps blame the banks!

maccka said:

I think perhaps what Mash is suggesting here is that many of the events that have occurred over the last couple of weeks have only come about because of an absolutely dogged and relentless determination by the SICAG team.

If SICAG had not been formed then it is likely that there would now be a very unorganized group of investors who could not have the collective power that they have now with an action group to work on the behalf of its members.

It is also likely that there would have been a lot more forced house sales and deaths.

Without this incredibly dedicated group of people a lot of the explosive evidence that will be revealed in the coming months would not have been uncovered and banks such as the CBA would not have made the statements they made last week.

There is an argument that many of the newsworthy events of a financial nature have for the most part come about as a result of the work of SICAG.

The parliamentary inquiry that is occurring is a DIRECT result of the good work of SICAG. It is a simple thing to look back at the posts to this forum and see how many in recent weeks have come about as a result of people reading the submissions to this inquiry.

Many of the reputable financial newspapers and journals are basing their articles on the research and work done by SICAG. Why? This group has made it their business to uncover answers related to this financial event. They have nothing to gain by not investigating every possible lead. Whether individuals on this forum (or other fora) believe it or not is irrelevant - SICAG is a reputable organisation with credibility in the places that it counts - with its members as well in the nation's parliamentary, legal and financial systems. Yes - even with the banks who are becoming increasingly nervous about SICAG.



I believe that over time many ex-Storm clients (and I am in contact with many many of them on a regular basis) are coming to the realization that things were not as they believed/expected in the Storm camp. But most of the ones I talk to believe that Storm and the banks were in it together and that had the banks (particularly the CBA and its affiliates) not behaved as badly as they did most of the Storm clients would now be starting to come out of this situation.

Cheers
Maccka

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I'm not sure why you have become the spokesperson for Mash. Clearly you're very pro SICAG and your information above is naturally biased.
That's fine.

I disagree that all that has occurred has been as a result of SICAG.
To assert this is to underplay the role of the financial press.

Anyway, I'm not especially interested iin SICAG.
But I am interested in how Mash personally regards Mr and Mrs Cassimatis.

Solly said:

Another submission of interest to the

Inquiry into Financial Products and Services in Australia

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub111.pdf

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Reading through this submission, it's clear this person had misgivings about the advice she received at every stage. Yet, against her better judgement she went ahead.

This is the point I just can't get over. It was clear to this lady that she was in way over her head, yet she persisted.

I feel very sorry for her. It looks fairly obvious that Storm inflated her earnings and assets, and the bank failed to check this with her, such was the deliciously trusting relationship between Storm and the bank.

However, apart from that, it's clear that she herself was aware of the figures involved in every step of the increased borrowings, knew it was unsustainable, but went ahead anyway.

Hard to see why she is not responsible for the situation in which she now finds herself.

Julia said:

I'm not sure why you have become the spokesperson for Mash. Clearly you're very pro SICAG and your information above is naturally biased.
That's fine.

I disagree that all that has occurred has been as a result of SICAG.
To assert this is to underplay the role of the financial press.

Anyway, I'm not especially interested iin SICAG.
But I am interested in how Mash personally regards Mr and Mrs Cassimatis.

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There are Manny believers about, in large numbers, and they will ensure he rises again in a bigger and better Storm.

I'm actually starting to get a sneaking admiration for Manny, reading some of the posts on ASF.

His Storm logo is back on the SICAG site, and no politicians have said boo to a monkey about him.

He may actually come out of this intact and start off again.

gg

maccka said:

Hi Bunyip,

I am not an ex-Storm client although I have a large number of family and friends who were and am a member of SICAG.


Maccka

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Maccka

Why join SICAG yourself if you're not an ex-Storm client?

You could be right GG.

The appearance of the Storm logo on the SICAG site is quite strange.

And Bunyip....that's a bloody good question.

How about it Maccka? Why pay $50 to join something that you have no need to?

I too would like to know why the Storm logo/ business card is at the top of the SICAG web site given the disclaimer at the bottom of the very same web page:
"SICAG does not have an affiliation with E.and J. Cassimatis and there is no influence being made on committee decisions by the directors of Storm Financial et.etc."

Please explain.......

Ironhalo said:

You could be right GG.

The appearance of the Storm logo on the SICAG site is quite strange.

And Bunyip....that's a bloody good question.

How about it Maccka? Why pay $50 to join something that you have no need to?

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Hi Guys,

Re - the logo on the SICAG site...

I suspect it is there not to show support for Storm Financial but to show a little irony and use their (SF) own slogan to show the emotion that people are feeling. The members of SICAG are pretty cranky and have been sending out warnings for months now.

Re - the bloody good question...

That's really pretty simple to answer.

I see it as a way to support people who are supporting my family and friends. I see it as a way to start to find out what happened.

I am certainly pro-SICAG (have never pretended not to be). I don't believe (as some members of this forum do) that there are sinister links between SICAG and others.

I don't think I have a problem with ex-Storm staff (advisors or others) being members of the group. They have also been devastated (financially and emotionally) and I suspect that they are a very valuable (and probably very willing) source of information.

Storm traded on relationships. It encouraged advisors/staff to be friendly with clients. It encouraged potential clients to talk to current clients to learn about the products/process. One of the outcomes of the amazing Storm trips were the firm friendships that were formed by the people traveling together. It used these relationships to build its business. In many ways it is a clever marketing and business strategy. "Word of mouth is the best advertising". It also contributed hugely to the devastation of whole communities of people eg small towns like those on the Atherton tablelands and regional cities.

The firm friendships and networks that ex-Storm clients created are one of the very few remaining positives that exist for many. To be connected with others experiencing similar feelings is an important way to overcome the adversity you are facing. Knowing you are not alone and that you can talk to others who really truly understand is an important part of healing and moving on.

SICAG works as a group because it is built on these relationships and common experiences. It's one of the reasons the social events (that some on this forum like to "poo poo") are an important part of the group's culture. It has taken this positive aspect of the Storm culture and applied it to their own advantage in building an organisation that is strong enough to ask tough questions and not be afraid of loud distracting squeaks in the public arena, bullies and isn't being sidetracked by red herrings.

For the record - I am not an EC or JC fan. I am not an EC or JC hater either. I am happy to ignore the court of public opinion on this and wait to hear what really happened backed by evidence and not conjecture before I make up my own mind.

I am too busy trying to help friends and family (and ex-Storm clients including SICAG members) to waste energy on being either a "Manny believer" or a "Manny hater".

Cheers
Maccka

Julia said:

I'm not sure why you have become the spokesperson for Mash. Clearly you're very pro SICAG and your information above is naturally biased.
That's fine.

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Hi Julia,

I'm not trying to be a spokesperson for Mash or SICAG. I am just expressing a view like other people on this forum. Yes - it is biased towards SICAG but in many ways I believe it is actually quite open to a range of possibilities.

Julia said:

I disagree that all that has occurred has been as a result of SICAG.
To assert this is to underplay the role of the financial press.

Click to expand...

I didn't actually say that I believed that ALL that has occurred has been as a result of SICAG. I said "many" and "for the most part".

There is an argument that many of the newsworthy events of a financial nature have for the most part come about as a result of the work of SICAG. (Should have multiquoted - Sorry)

I certainly didn't intend to underplay the role of the financial press as they have been a very important part even critical part of getting the message out. What I was trying to say was that many of the very reputable articles put out by them are using the research (whether it is referenced in the article or not) done by SICAG. The journalists obviously have the ability to research further than SICAG's work and they do.

cheers
Maccka

Inquiry into Financial Products and Services in Australia
Public hearings and transcripts

Details are here;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/hearings/index.htm


Canberra 24/06/2009 transcript is here;

http://www.aph.gov.au/hansard/joint/commttee/J11928.pdf

We know what really happened, ego driven by a gambling attitude was instrumental in the downfall of EC and Storm (i.e. it was well known that EC, Jelich, Royes and other advisers in Strom had a penchant for heavy gambling - just look at the $10,000s thrown away on the European and African trips in gambling at the casinos). EC seems to have had an inflated ego and thought: the share market would not keep dropping, and even if it did the banks (esp CWB) would carry Storm, and even if it didn't he could start again - as he had when things went bust in the 90s. To not acknowledge his role in the downfall of Storm and the way people were mainpulated to take out big loans in the second half of 2008, is to be an apologist for a crook.

maccka said:

Storm traded on relationships. It encouraged advisors/staff to be friendly with clients. It encouraged potential clients to talk to current clients to learn about the products/process. One of the outcomes of the amazing Storm trips were the firm friendships that were formed by the people traveling together. It used these relationships to build its business. In many ways it is a clever marketing and business strategy. "Word of mouth is the best advertising". It also contributed hugely to the devastation of whole communities of people eg small towns like those on the Atherton tablelands and regional cities.

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maccka, this is one thing that amazed me, referrals that were made to family, friends, neighbours, work colleagues, etc.. I suppose this is just the basic human behaviour of wanting to assist and share something that is perceived to be good..

Solly said:

maccka, this is one thing that amazed me, referrals that were made to family, friends, neighbours, work colleagues, etc.. I suppose this is just the basic human behaviour of wanting to assist and share something that is perceived to be good..

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I'm sure that this is what it is.

cheers
Maccka

Garpal Gumnut said:

If this lady's account, of her treatment by Storm, can be verified there may very well be grounds for criminal charges.

gg

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Yeah, it would make my day to see the storm crew go to jail...

hehe

Been reading the submissions to the parliamentary inquiry. Some of those make you weep. Not only at the devastation wrought upon people but also weeping in frustration at the foolish actions displayed by supposedly mature adults.

One example is a person with public and private work experience essentially signing blank mortgage documents. How how how could you do that when the person's work experience would involve at some level and some stage the need to exchange contracts? Just hand a signed blank copy to the counterparty and hope they complete it properly? Beyond belief. Storm must have had an absolute wow of a sales pitch, almost cult like. Don't know how you prevent people from following false Messiahs.

Insistence that something be done to "protect us from ourselves." Why? I don't want the level of protection they probably envisage. How? Enact legislation making stupidity and greed illegal?

Expectations that lenders should offer advice. Hmmm, maybe but the next step is to insist that your mortgagor be required to provide advice if you wish to redecorate your home before selling in order to improve the sale price.

And for goodness sake these witness to the Committee. Still mixing up LVR versus gearing and the whole damn lot implicitly assuming that every person living in this country wants or needs financial advice. I have no wish to go near a financial adviser and yet the inference is that I should be forced to.

Grrrr. Flucking nanny state from that aspect.

Solly said:

Inquiry into Financial Products and Services in Australia
Public hearings and transcripts

Canberra 24/06/2009 transcript is here;

http://www.aph.gov.au/hansard/joint/commttee/J11928.pdf

Click to expand...

It is interesting reading this and will be even more interesting to see the result. There seems to be a focus already on the low level of education required to become a "Financial Adviser" as well as a lot of discussion about the complexity of renumeration and relationships between advisors, products and financiers.

Unfortunately it is likely to be some time before anything results and it is probable that it will lead to a more complex (and more expensive) regulatory system - which (cynically) means punters will need to pay more to lose their money.

I have read a lot of the submissions and find them heartbreaking. I can imagine how the 'victims' feel, especially as many seemed to start from a relatively secure and financially responsible position ........ but were lead astray.