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Storm Financial Group

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Solly said:
I found this submission rather interesting,

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf

This submission alleges that some loan document details were falsified.
Click to expand...

Solly

The interesting thing about this one is that it was a broker originated deal not a deal directly from Storm to the Bank.

So in this instance Storm passed the deal to the broker who passed the deal to the Bank's Broker credit team.

Would think the aggrieved party should be making significant complaints to the Broker, Mortgage Choice and Mortgage Choice's IDR as it was the broker who it would seem made the misrepresentations not the Bank, they just accepted them. They should be able to obtain some satisfaction from this process or broker's PI.

Storm's relationship with the CBA in Townsville was not a broker relationship as this would have had a seriously deterimental effect on the their (Storm's) ability to get the loans approved on the terms required and in the time frames demanded. There is also the potential liability that would stem from originating loans of the nature that they got the CBA approve.

In short, and generally, if referrer sends dodgy loan to CBA and loan goes bad it is CBA in firing line while if a broker sends a dodgy loan to CBA and loan goes bad, broker is in firing line.
 
Interesting, one account overdrawn $45k, home loan overdrawn $100k, a business which ran at a loss for several years, relatively low salaries, limited assets other than a house, then go out and borrow a heap to invest in Storm on credit.

How do we protect people in these situations? Maybe some truth in the forms would have prevented a loan.
 
With my 'let's see reason' hat on, these people should have never even contemplated taking such a huge loan out noting their financial situation. If you were to be rendered unemployed tomorrow, would you go and take out a six-figure loan to throw on the share market?

At the end of the day, these people signed for the amount they were given. Had they been making a crap-tin of money, they'd have no drama with the banks. Because they made a loss, now they demand compensation and their gamble back.

Sorry, as bad as the falsification on the loan docs is, at some point they would have been sat down, and told what the total amount of the debt was, as well as their fortnightly/monthly payment obligation.

I have little sympathy, although I am annoyed at the blatant forgery on the docs.
 
An interesting article... I ove the Macquarie banner above the article, slight irony that they advertise on a page with bad press that they were involved in, perhaps not many know they were also in on it??


http://www.investordaily.com.au/cps/rde/xchg/id/style/7090.htm?rdeCOQ=SID-3F579BCE-7CC657B8


While I appreciate the media coverage in relation to CBA/CGI, I think there need sot be a little more press on the others involved. Macquarie, Bank of Qld. Challenger!!
 

Sorry for my bad typing, I should resort to index fingers only rather than touch typing when i am posting on here at 4am... Yaawn!!!
 


In Kate Kachor's article Gus Dalle Cort states that ASIC did had hand EC & JC an enforceable undertaking against the company and the advisers were gagged in December 2008....I wonder what was the reasoning behind this ?
 
Solly said:
In Kate Kachor's article Gus Dalle Cort states that ASIC did had hand EC & JC an enforceable undertaking against the company and the advisers were gagged in December 2008....I wonder what was the reasoning behind this ?
Click to expand...

That is a long story.

ASIC (in front of hundreds of people in Margate) denied gagging Storm.

It has since been determined that the EU was provided to Storm directors in December, although Storm refused to be gagged for 12 months as demanded.

Apparently ASIC sought this EU on the assertion of the CBA believing that Storm was advising their clients not to pay the negative equity that resulted from the late sell down.

Clearly the independent regulator is not as independent as it would have everyone believe!
 

So Prime, if the first lot of margin calls and associated sell downs occured in September 2008 (ASX200 approx. 4,500 points), but the Enforceable Undertaking didn't come into play until December 2008, why didn't Storm Financial adviser's get in touch with their clients to make arrangements?

Why were adviser's not taking appointments? Or even phone calls?

That's right, there were arrangements. Sell down letters. But, why were these sell down letters not lodged (even though they were returned) after they were practically demanded by Storm?

Why was Julie Cassimatis writing letters to clients stating ...

"By sticking with your plan (which is in a good position for recovery) and with Storm we will together do the very best to meet your needs both long and short term".

... even as the market continued to decline (ASX200 3,500 points). Surely, if there were margin calls at 4,500 points, sticking to the plan (whatever that was) at 3,500 points you were in big trouble????

Another investor and former Storm staffer, Luke Vogel, said he remembers his adviser, Andrew O'Brien, saying that "if I went into margin call not to worry … because Storm would not allow it to happen because Storm had a central 'dam' of money". Source:

What happended to this central dam of money? Why were Storm telling clients not to worry ...

Tell me how the banks are at fault here again?

Source: http://business.theage.com.au/business/storms-weird-demise-20090619-cra9.html?page=-1
 
Exactly. I couldn't even get my Storm advisor to ring me back from Sep-Dec 08.

If the gag was placed in Dec, what were they doing for the other 3 months? Taking bets to see which clients could get into the worst situation?

In terms of the central money dam, I think we'll find that that may have disappeared in the following ways:
1. EC/JC giving themselves (well attempting to give themselves) nice big bonuses before it all fell in a heap; and
2. The 117 clients who they gave 'no specified payback' loans to at the vinegar stroke. I'll hazard a guess and state that 117 of those clients will be ex-advisers (they all made a point of telling us they were invested in the Storm model) and other hangers-on who frequented the Storm world trips/functions. I seem to remember that Storm had 113 employees on the books when they folded....a convenient number as well?
 

I wait in expectation for the legal action to commence, surely Mr Vogel will be suing Mr O'Brien given the nature of this 'advice'.

My guess is though it will all be the Bank's fault.
 
The CBA submission to the parliamentary enquiry is up and makes solid reading. Whilst i dont agree with some of their recommendations for moving the financial planning industry forward, their commentary on the storm relationship and lessons they have learned and how they will stop this occurring again is very welcome. It is blunt and to the point - pity we dont have the Storm Directors submission to compare with.

This submission clearly shows the leadership of Norris and their intent to fix this problem.

Now the other banks need to follow suit.
 
Noting Luke Vogel is in the SICAG committee with the father of his adviser, I can't see it happening.
 

And yet the rusted-on Cassimatis supporters who now double as SICAG executives can't understand why ASIC stopped the sales reps from talking to clients.

This is a prime example of the rubbish they were telling people, if in fact they bothered to return their calls.
 
It is timely to note that I actually did get a meeting with my adviser late in 2008 - probably because I was sending many emails and she knew I would not let up.
She tried to make excuses and claimed that she was just following Manny's instructions and this is why she had not sold down my portfolio earlier as I had requested to cover my loan.
Tried to blame banks in America for the market falling - though this was in direct contradiciton to her saying months earlier that our market movements did not relate to what happened in the USA.
She also tried to blame Macquarie for not putting the cash loan into my CMT when the portfolio was sold down; it was somehow floating around the bank not earning interest- admitted this was not true in face to face meeting.
Then she lied and told me the portfolio had been sold down in positive equity - was down at least 5% I later learned.
She wanted me to not shut down the margin loan and claimed I would be "killing my chickens" - I told her "the chickens have been cremated".
Storm is on the front line for bad advice, too highly gearing clients and not following our instructions.
I look forward to any investigations, prosecutions.:
 
Luke Vogel used to 'work' at Storm Redcliffe. Andrew O'Brien's father (his old advisor) is one of the head SICAG committee members.
 
Carey, is the CBA submission available for public reading?
If so, could you kindly post a link?
Thanks.
 
Thanks Carey.

From the submission by CBA:
At no time did we provide any personal financial advice to Storm’s clients. The advice provided and the associated duties and obligations were unquestionably the responsibility of Storm.

Im sure that Prime et al would like the opportunity to rebut the above here on this very forum full of ignorant posters.

Lastly from the same submission:

"We have been working with ASIC since December 2008, when we proactively notified them
regarding our concerns in relation to Storm. We are also working constructively with the
Storm Investors Consumers Action Group (SICAG) to assist our customers."

Now the reason is clear why the banks are so evil, it was the CBA that contacted ASIC - gee if only they had shut up and given Manny the 60 million he needed, all would still be sweet.

A big thankyou to the CBA for protecting the rest of their shareholders!!
 
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