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Storm Financial Group

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Solly said:
"Storm inquiry eyes CBA chief"

"Commonwealth Bank chief executive Ralph Norris is facing the threat of being compelled to appear before a federal parliamentary committee's inquiry into Storm Financial after the committee was formally notified yesterday he would not appear at hearings on Friday."

More from STUART WASHINGTON IN CAIRNS from the SMH
Click to expand...

Unfortunately this is starting to follow a predictable pattern. First E and J Cassimatis are no shows and now despite previously mouthing conciliatory platitudes about mistakes made by the CBA Ralph Norris is refusing to come out of his bank vault and we haven't even got to the BOQ yet who have dug in even more. I'm not sure what powers this inquiry has to compel people to appear before it but I think they'll need everything they've got to have any chance of getting them to front.
There is a lot of manuevering yet to go on about who is actually going to front it. For the sake of all the stormies out there I hope all the big players in this disaster are compelled to front even if they have to be dragged in if necessary:bbat:
 
This is getting like the Scahpelle Corby thread, there are so many new posters in the last few days.

Refreshing to get folk out from behind their curtains and give their views.

Storm will be up front in the media over the next few weeks.

Let us hope the truth will out.

Manny's site is still down. The "Crusade" foundered.

gg
 
Mr Dalle Cort also told the committee that products offered by Storm had not been the responsibility of Storm Financial's advisers, and that documentation for loans had been handled by Storm's Townsville headquarters.

The chairman of the committee, Bernie Ripoll, asked Mr Dalle Cort what his clients had received for their fees if the banks were entirely responsible for the lending.
Click to expand...

http://business.smh.com.au/business/im-a-big-loser-too-storm-boss-20090901-f6gk.html

Bernie sounds like he has his finger on the pulse.


gg
 
I see that Gus Dalle Cort is still defending Storm's debt-focused investment model....another clown who can't seem to face up to reality.
 
bunyip said:
1. The 'marriage' between CBA and Storm was going to last only while there was money in it for CBA. The marriage was over as soon as CBA decided that the security of their loans was at risk. The financial meltdown and ensuing market crash, combined with the absurd levels of gearing of Storm clients, meant that the banks became increasingly edgy as clients approached margin call. My guess is that margin calls were made to Storm, since Storm apparently were acting on behalf of clients.
For whatever reason, Storm didn't notify clients of those margin calls. Hence, margin calls were not met, so the bank sold clients down to recover its money.

2. It's been virtually impossible to find out who had the responsibility of notifying Storm clients of margin calls. The banks say it was Storm's responsibility, and Storm claim it was the banks responsibility. Storm clients themselves don't seem to know. The question has been asked a number of times on this thread.....'Did you authorise Storm to act on your behalf'?

As far as I'm aware, no Storm client has yet answered that question.

3. How long Storm had been trading while insolvent? - this is another question that has no clear answer at this stage. Perhaps the truth will come out once the enquiry gets underway.

4. Storms failure to comply with requests to move clients to cash was almost certainly a result of their fear of losing their income stream. Every client moved to cash would have meant a loss of ongoing management fees for Storm. And it would have been bad publicity - had the story got around that Storm clients were cashing out en masse, new clients would have been loathe to sign on with Storm. The number of new clients had already dwindled alarmingly as the market crash took hold. To lose thousands of existing clients as well would have been the death knell for Storm.

5. Smooth-talking Cassamatis has shown considerable talent for inventing reasons to justify his massive dividend grabs while he was busy watching his clients get wiped out. The simple fact is that the big dividends cannot be justified.
As for signing Julie's sister on as a director so they could get their grubby hands on another 2 million dollar dividend when they knew their company was finished.....this low act really shows the true character of these people.

6. The 'war chest' (if it ever existed) was problem much smaller than Storm led clients to believe. More likely, however, is that the war chest was nothing but a figment of Storm's imagination.

7. I'd be pretty sure that the Cassamatisis and their former Storm advisers have had many sleepless nights. But I suspect that they're worrying more about themselves than about their former clients. I doubt if many of them have feelings of guilt and remorse for the clients lives they've wrecked.
Click to expand...

I addressed that question in an earlier post of mine when I stated I absolutely never gave storm the authority to act on my behalf in any way with my margin lender - but in my case it was Macquarie and not CGI and I was not in margin call, hence no call to be made. There appears to be a great deal of debate about whether CGI took it upon themselves to appoint storm as the agent for their clients or whether storm requested that it be so - and from reading several submissions it would appear that a good deal of CGI clients expected direct contact from CGI in the event of a call.

I don't mean any offence Bunyip, and I don't disagree with your comments above, but the main point of my post/rant was that I personally want to see Emmanuel & Julie answer the questions I posed. I'm sure most of us are quite aware of the reasons for most of their actions - I want to see them have to stand in front of a room full of ex-clients and account for themselves. I have a cynical feeling that this enquiry may amount to little more than satisfying politician's desire for currying favour with the public in a "let's be seen to be doing the right thing" way - and for all the hype it may actually achieve very little. I hope not. At the very least I dearly wish to see E & J try to justify what we all know is unjustifiable.

Petty of me, but I want something for my fees :eek:
 
gg, (I tried to quote your post but am not allowed to until I have made 5 posts)

I don't want to appear rude, but I asked you to explain a phrase that you used, "The Storm model", and another poster also asked.

You have posted since, but not explained to us what your explanation of your phrase is.

So, I will ask you again.

What is "The Storm model"?
 
Harleyquin said:
The CBA submission contradicts what almost everyone else's submission has stated. Interesting days ahead for the CBA Solly and about time. I look forward to seeing him try to squirm out of this one.
Click to expand...

Harleyquin

I get the preoccupation with having Mr Norris in front of the inquiry, I'm sure it would be a great spectacle but it's not like he is going to get sliced and diced by a group of mid-level, career politicians. Any specific questions will simply be deferred to his colleague who was in charge of that area.

All he would have done was give an overview and re-state righting the wrongs, etc and provide a summary the submission.

Wouldn't you rather hear from the bloke in charge of margin lending or the bloke in charge of CFS or even the bloke in charge of the bloke in charge of the North Qld Area Office. They are the ones who knew what was going on and went on.

It's the same with BoQ, the CEO will push the company line, Carnes and Buchanan and the former auditor are the only ones who really know what they were up to.

Of equal interest is whether Cassimatis acolyte McCulloch will continue to be his master's mouthpiece or finally show some fortitude and let everyone know just how flawed the model was and how unethical Storm and its salespeople were.

Ain't going to happen though.
 
Garpal Gumnut said:
Max, you are getting a bit emotional and tired.

Save your energies for the Inquiry.

Things are hotting up and the truth will out for the Storm victims.

gg
Click to expand...

Gumnut,

As a Townsville local I am surpised you have not yet twigged to just who "Big Max" is.

I think you will find he used to be quite high up in the local sausage wrapper TD Bulletin.

Do you still ride a Harley Max?

Landyman
 
DocK said:
This is what I don't get. I'm not at all knowledgeable about the ins and outs of parliamentary enquiries, but surely it's all pointless if the Cassimatises (sp?)(Cassimatisii (?)- sounds like a disease - quite apt:D) aren't made to front up and answer the hard questions we all want answers to? Same with CBA.

I want to know:

1. What went wrong in the "marriage" to make CBA file for divorce with such haste? Had the relationship been going sour for some months (a fact storm would have been at pains to keep private from their clients) or was it prompted by panic?

2. Who was really responsible for communicating margin calls to clients?

3. For how long had storm been trading whilst knowing they were insolvent, or nearly so. Clearly they were still gouging new clients for fees until the bitter end - and should have known they had no hope of covering liabilities to ATO and CBA at that stage, let alone the rest

4. Why didn't storm act on the written requests to cash out of the managed funds?

5. How do they justify taking such a massive dividend on 30 June 2008 (when the ship must have been starting to list a bit, if not already taking on water) and how do they justify signing on Julie's sister as a director in order to pay another 2mill div to themselves in the dying days prior to being wound up, as well as pre-paying PR firms, law firms etc for costs they knew they'd incur after being wound up - presumably in an attempt to reincarnate themselves?

6. What happened to the "war chest" and on what basis was it determined that some clients were "helped out" with unsecured, interest-free loans from company funds, and others weren't?

7. How do they sleep at night? Seriously. I'd be interested to know if they care at all about the lives they've helped to ruin because they either believed their own ego-fuelled lies, or were simply too busy looking out for themselves to care.

I'm sure other questions will come to me, and I'm sure there are very, very many other ex-clients who would like the same answers. I don't really see the point in having lots of devastated people with very similar stories to tell have to go through the pain of publicly "baring their souls" and having to endure the humiliation and scorn of some sections of the community, if the main players in this tragedy aren't going to be made to account for themselves. I may be bitter and twisted, but I want my pound of flesh! Monetary compensation would be welcome if it comes, but I won't be happy until Manny & Julie are made to stand up and account for their decisions and actions. If they really feel they've done nothing wrong - why are they hiding?? Bring back the stocks I say - and let me load up!

Rant over - I feel better now :eek:
Click to expand...
Re: No 2 Margin Calls
Email from a ex stormie says

'We had no margin calls from Storm or CGI in 2008-9. We eventually had a letter from Clothier saying margin calls were never sent to clients - only to storm. This is untrue as we had margin calls a few years ago and the letter states after all the figures "and a copy has been sent to your financial adviser." If there was to be any change in margin call arrangements then we should have been notified. Also - if storm negotiated higher LVRs - we also should have been informed. So Dallecort is the biggest loser in Cairns? Well our losses are greater than his.

Where does the lying begin and where does it end? I bet my left arm that this ex stormie is telling the truth. Many who have been in storm for some time received these same letters from the CBA/CGI in the past and have the original letters to prove it and yet this time they didn't send them out. WHY??? Many ex stormies who received these letters are now saying the same thing - clients were never informed but should have been informed of any changes, if there were any, and yet the CBA now say that it has never been their policy to send these letters out to clients now or in the past. Unbelieveable but true.

Clients had LVR's go as high as 137% no wonder they found themselves in negative equity. Whose fault is this??? Storm directors and the big boys from the top end of town were all in it up to their necks. The money was too good to say no to. Dok if they bring in the stocks you'll have plenty of mates helping you load up.

I don't know exactly what happened and I doubt anyone of us do but someone in their mansion does and they need to get them and their cronies out of there and face the music and the quicker the better so we can all move on. This is white collar fraud at the highest level. We already know it they just have to prove it and it shouldn't be too hard. Once they start lying they have to make sure that they continue with that same lie or they'll soon get caught out and with everyone of the players telling a different version of the story the next couple of months should prove to be very interesting indeed.

Real Peyton Place stuff this. Where is Magnum PI when you need him. Probably in darn Hawaii enjoying himself and good on him.
 
Harley you gave me a laugh with your Magnum PI reference, he's probably back-mouthing Higgins while driving around the island in his 80's Ferrari mate!

For those new to the thread (welcome), the Storm model consisted of a husband and wife team who headed up a company called Storm, and they were very active in the Townsville area. Along the way they acquired a few other interstate/Brisbane financial advice firms with the promise that they would pay for the acquisitions with millions of dollars by floating the company on the ASX. The plan failed, but business continued, and by all accounts was doing well. Storm HQ still owed their acquired companies millions, but since everyone was earning a great profit, the issue wasn't pressed, and it was intimated that when the company successfully floated in the future, these owners would be paid.

Storm's main model was rather tame at first, small margin loans to help clients invest in the stock market (primarily investing in the ASX200 index funds) with the promise that clients would make on average 13.5% p.a. (taking into account bad years) on the stock market with a long term view over say, 20-30 years. Storm charged 7% fees on all investments (roughly speaking, and abnormally high for the industry regardless) but boasted of second-to-none customer service and client relations. Most referrals to the business were by word-of-mouth, such was the fervour of their client base.

Storm boasted of 'strong links' to the banks, and clients were given favourable loan considerations due to this 'relationship', not to mention that LVRs on the Storm badged index funds were set 10% higher than the market average to reflect the faith Storm and the banks had in each other. The link was allegedly so strong (both the banks and Storm were cleaning up) that Storm took large groups of clients on overseas holidays (which were paid for by clients) but subsidised heavily by the banks. One client was famously quoted as stating, when asking Emmanuel Cassimatis overseas at a glitzy function 'who was paying for most of this?' got the reply 'enjoy it mate, it's on the banks!'

Of course greed got the better of the company, and soon they were urging people to take out massive loans, often in excess of what they could ever pay back to gamble on the normally stable ASX200 index. There are reports that pensioners on <$20k a year, were signing loan docs for margin loans for over $900k-1mil. Of course Storm and the banks were making their cash from this, and the market was on the up so everyone was happy.

Of course all went awry when the GFC hit. The Cassimatis's, desperate to save the business/make some quick cash (as their profits were now going backwards), through Storm advisers phoned trusting elderly and soon to be retired clients and informed them that 'hey guess what, good news, you can afford to borrow more money as we have just found more equity in your assets/homes!' This was to prove the last nail in the coffin for many Storm clients. The GFC turned disasterous, with the ASX200 losing up to 40% over one/two weeks. Client's had sent letters to Storm demanding Storm sold their investments down, but under apparent orders from Townsville HQ, this didn't happen, despite Storm advisors having a day to day feed of how much deepening trouble their client's were getting into. Still they did nothing. Storm went into shutdown mode, and clients weren't able to access their accounts (due to the banks not returning calls) and Storm advisors were gagged/trying to bail from the sinking ship. No one got given any status updates as to their margin LVR levels, and when the smoke cleared, people found that the banks had called in their margin loans, and in some cases, had sold down their investments at the lowest end of the market without consultation and taken the proceeds for the margin loans. Regardless, people were still left owing the banks up to 30% more then what they borrowed/saved during their entire lives....all payable within a few weeks before and over Christmas.

And that is where the situation is, and that should explain the 'Storm model' hopefully as accurately as I can make it out to be.

SICAG is a group of people/clients/ex-employees (cough)/relatives of Storm employees (cough, cough) who banded together to try and remedy the situation, support each other, and get justice for the victims. This has proven successful, with a class action by Slater and Gordon forcing the banks to admit some of the blame in not informing clients of their margin loan calls and selling their shares without consultation.

HOWEVER, there are some discrepancies in terms of what some people feel is a conflict of interest in terms of SICAG not putting any of the blame onto Emmanuel/Julie Cassimatis, or any of the ex-Storm employees/Storm executives. Many in this forum believe that some of the individuals rallying behind the good work of SICAG are hypocritically the same people (or relatives of the same people) that propagated and knowingly exacerbated the situation by placing their trusting and vulnerable clients into more debt. I have defined the SICAG model (albeit rather sarcastically) below.

In saying that, I fully endorse the good work that SICAG have done in providing moral support to the Storm victims. There have been many stories of SICAG people talking people back from the edge.

I just don't agree with the company they keep.

SICAG Model (noun) a system of actions performed by SICAG

1. To blame the banks/ASIC solely for the implosion of Storm Financial, at the exclusion of anyone who was also responsible, thereby attempting to ensure questions are not asked of people who are morally bankrupt (see also: Emmanuel Cassimatis and Storm Employees) "SICAG is about getting a decent outcome for all its members and furthermore ensuring that both the banking and financial services industry act ethically and can be held responsible for their actions. Additionally, we here in Australia need to be confident that the regulators are doing their jobs and not simply sitting on their hands."
2. To provide a means of moral support to victims and their families.
3. While doing a good job at the above, sadly concurrently dodging questions pertaining to links and conflict of interest between key SICAG members and ex-Storm employees responsible for skimming clients while driving them into financial ruin. (see also: hypocrisy, Ron Jelich and Andrew O'Brien)

Hope that is of assistance.
 
"Macquarie says not a Storm advice giver
Firm supports margin lending proposal"

"Macquarie has used its submission to the parliamentary inquiry into Storm Financial to distance itself from the collapsed advice group."

More by Kate Kachor from Investor Daily here;

http://www.investordaily.com/7286.htm
 

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