Storm Financial Group

bunyip said:

It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated.
That is the main question he should have been asked, in my opinion.
If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.

The banks, the global financial crisis, the level of gearing, have all been blamed for the demise of Storm and their clients. The real blame lies with the sheer incompetence of Storm in that they failed to manage the situation.
The economic meltdown and market crash didn't wipe out everyone who had margin loans. Those who were more switched on that Cassamatis had the good sense to retreat to cash in plenty of time to avoid disaster. Cassamatis didn't, and it was this failure on his part, more than any other factor, that caused the wipeout of so many of his clients.
To my way of thinking, this is criminal neglect and he should go on trial for it.

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I think he badly misread the situation, and his ego wouldn't allow him to consider he might have been on the wrong track. The storm website used to have a weekly market commentary (which towards the end wasn't being updated weekly at all). I recall reading lots of positive sentiment about China and other developing nations having a huge appetite for Oz resources, and how this was expected to continue for several years. Australia could simply keep selling to China, India etc and it'd be all good. The situation with the sub-prime lending and bank weaknesses in the USA was downplayed as not being that relevant to our market as our banks were so much stronger. I think he totally misunderstood the impact that events in USA would have on our own market - as if Australia's economy was completely disconnected. I also think he failed to grasp the global nature of the downturn until it was well and truly underway, and by then he couldn't afford to get everybody out as he'd be cutting off his income stream. The rest, as they say, is history.
I think this is the kinder option, as otherwise he knew full well what was likely to happen and just didn't care about his clients at all - that makes no sense from a business point of view if he wanted to retain a customer base for the future. Either way, for the fees they charged I expected a much higher level of professionalism. We'd all be better off if he'd used a portion of our fees to educate himself and his advisers in economics and market history instead of wishful thinking.

I must say, all this ranting is becoming quite therapeutic

And some tell it they way they see it.

http://business.smh.com.au/business/big-bad-bank-ploy-cant-convince-20090903-f9a1.html

Big bad bank ploy can't convince
STUART WASHINGTON IN BRISBANE
September 3, 2009 - 2:18PM

Comment

The way Emmanuel Cassimatis tells it, what faced Storm Financial was an accident brought on by extreme and unpredictable events - until the big bad bank pulled the rug.

Cassimatis, the founder of Storm, said today the Commonwealth Bank panicked when its systems failed to cope with the precipitous market collapses in October and November last year, and it withdrew credit.

But even in his evidence to a federal parliamentary committee in Brisbane, Cassimatis reveals the edifice he built was far from robust and was at the leading edge of debt-induced collapses.

He outlined the cookie cutter nature of his Townsville-headquartered financial advice business - a car plant that sold only one model of vehicle.

Continued......

Pleading ignorance of the clients' predicament didn't wash with the committee. It shouldn't wash with the broader public.

Cassimatis got rich building a business that had $4.5 billion in investments. It is emerging it had few if any systems that would protect customers in times of extreme events.

And it seems a large number of those 4000 clients who had margin loans should never have had them in the first place.

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Well I did not make it to the inquiry today I was just too tired after my shift!!

But now I wish I had made the extra effort to hear him say he told his clients we could lose our homes... WHAT A D*#K I would say the only reason a big portion of his clients hung in until the end was the fact that they were assured they would not lose them...

I wish I could see him Face to Face and have him say it to me just to see how thick his hide really is.....

Steve Borden said:

Has any one actually confirmed that the forms 'cashing out' the investments were actually sent?

Is it possible the reason why people didn't receive margin calls and were sold down was because it was as result of the 'cashing out' and not a margin call?

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Steve, My In laws were moved into 100% cash in late October. Still had the margin loan. Their equity (Exc Home loan) was around $80K. They would have been well over margin call levels but as it went into cash the margin went to 100%. But the problem was they were earning 4% and paying 8.5% and therfore going backwards. All on the say of Storm advisers to enable them to maintain their income stream.

"Crash waiting to happen"

"The submissions rolling in to the parliamentary inquiry into financial products and services is sobering reading. They tell of how financially unsophisticated people seeking a self-funded retirement were left exposed to unscrupulous financial planners and their reckless advice. These were not the unlicensed shonks knocking on doors; they were, in fact, licensed planners."

More by John Collett in the SMH

http://www.smh.com.au/news/business/money/superannuation/crash-waiting-to-happen/2009/09/02/1251570744251.html?page=fullpage#contentSwap1

Storm Investors Consumer Action Group Inc

Supplementry submission to the

Inquiry into Financial Products and Services in Australia.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub276a.pdf

Ron Jelich's

Supplementry submission to the

Inquiry into Financial Products and Services in Australia.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub54a.pdf

I will be brief as I am quite tired from travelling coach to and from Brisbane, attending the Inquiry and other brief activities not suitable to expand upon on this forum.

The Inquiry restored my faith in democracy in Australia.

Manny Cassimatis looked older than when I last saw him at Peppers Hidden Vale tucking in to a Waigu steak, just five moths ago.

Manny Cassimatis was unconvincing and repetitive in his evidence to the Inquiry much as a McDonald's executive would be in denying that a lifetime of big Macs in no way contributed to his terminal bowel cancer.

His lawyer bobbed up briefly to earn his $5000 for the day but was swatted by Sen. John Williams and thereafter attended to his hose.

The Inquiry members in particular Bernie Ripoll and John Williams were magnificent. They cut to the chase in a forensic manner and let Manny tighten the rope, challenging his bizarre take on financial planning appropriately.

The public , media and Storm victims were scathing about the Storm model and the SICAG model.

I was greatly surprised that nearly all Stormers had heard of Aussiestockforums and were now getting their information and advice from ASF rather from the SICAG site.

Some expressed disgust at the former Storm Logo on the SICAG site, the connection of committee members to Storm and Storm advisers, the advice on the SICAG site to seek out financial advisers who followed Storm principles and the failure of SICAG to in any way attribute blame to Storm or the Cassimatis.

I doubt if next January SICAG will have enough people renew their membership to afford a candle to shine a light on a moneyspider.

The victims were scathing about the banks and look forward to Norris of CBA fronting the Inquiry.

The Storm victims were one and all good people, battlers, hard workers, the backbone of our country.

They have been let down by Storm, SICAG and the Banks.

The only shining light for them are their Lawyers, Scattini et al, and the Inquiry.

gg

bunyip said:

It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated.
That is the main question he should have been asked, in my opinion.
If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.

The banks, the global financial crisis, the level of gearing, have all been blamed for the demise of Storm and their clients. The real blame lies with the sheer incompetence of Storm in that they failed to manage the situation.
The economic meltdown and market crash didn't wipe out everyone who had margin loans. Those who were more switched on that Cassamatis had the good sense to retreat to cash in plenty of time to avoid disaster. Cassamatis didn't, and it was this failure on his part, more than any other factor, that caused the wipeout of so many of his clients.
To my way of thinking, this is criminal neglect and he should go on trial for it.

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Yes, I completely agree.

Solly said:

Storm Investors Consumer Action Group Inc

Supplementry submission to the

Inquiry into Financial Products and Services in Australia.

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/supsub276a.pdf

Click to expand...

Ironhalo.

read this submission through and tell me who you think wrote it , i will give you a clue, t's all the evil banks fault , EC hardly rates a mention and of course the people helping are "men of high quality "

Have a guess , or anyone else can jump in for that matter and guess.

No surprise to see Mark Weir (or the Mouth of Sauron, as myself and my g/f refer to him/SICAG as) or Baron Jelich not point any blame at Storm.

Everything in their submissions is 'CBA/CGI this, CBA/CGI that.' Yes, the banks were at fault, but they were in a symbiotic relationship with Storm, and both were playing their clients for money printing presses. Not once in the submissions was it alluded to that Storm was also negligent, nor any mention of the fact that Storm advisers were in fact the ones seeking extra margin loans for their clients to gain more cash flow during the GFC. My mother actually commented to me today that at one point, her Storm adviser (Andrew O'Brien....son of the committee member of the same name) was phoning her weekly telling her 'we can borrow an extra few thousand due to the revaluation of your assets.' Mum felt like it was a matter of Storm 'clutching at straws'. It was and thank god she drew a line in the sand.

Andrew O'Brien rang my brother recently asking him permission to sign him on as his financial adviser, and my brother (who puts up with even less excreta then me) told him where to stick it. So it looks like the ex-Storm employees were waiting in the wings ready to pick off their vulnerable ex-clients, particularly in Redcliffe where the prime SICAG membership seems to lie. Well that explains Noel O'Brien's interest in being on the SICAG committee, look out for your son and all that?

I like the disclaimer that Mark Weir threw in about the advisers not knowing these things were taking place. Bullcrap. They knew it, and they were using it to full advantage to gain their 10% commission from the Storm fees.

SICAG, truly you make me sick.

Quincy said:

Storm Financial product 'like ordering Big Mac'

3/09/2009 12:21:01 PM

http://money.ninemsn.com.au/article.aspx?id=857822

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I'm astounded at EC's evidence today in only blaming 1. - the banks and 2. - the economic situation. He and the CBA had a cosy little relationship going for a long time and he arrogantly assumed when things went belly up that they would stand by him. He liked his debt even called it a 'clayton's debt', well I'd like to serve him up our claytons debt and see how he likes the claytons repayments.

Can't the man see that it was his ideas which instigated this whole fiasco. He claims clients were told they could lose their homes - rubbish. We were given a sheet to fill out so they knew what level of risk we were prepared to take. We specifically asked for a low risk, conservative investment and storms paperwork will prove that what I am saying is correct. Our advisor said nothing about a one size fits all approach, we are only hearing about this since the collapse. There was no emphasis put on 'you could lose your house.' as he has incorrectly stated today. Quite the opposite in fact happened. Our main concern was 'Can we lose our home' Storm's reply 'You will never lose your home.' The man doesn't know when to stop lying.

1. - My concern with all of the banks involved and CBA in particular - is why did they support him during the good times, they are supposed to be the financial experts so they knew that his plans were flawed and yet they lent his company massive amounts of money just as they lent storms clients massive amounts of money. I know banks lend money but not irresponsibly, they helped to finance his dodgy plans at our expense. What they have done is criminal and

2. - We were all told that they knew the market went up and down and would take advantage of the dips. OK it was a big dip but the point I'm making is storm never took advantage of it. Quite the opposite in fact. Our storm advisor told us that they would be the ones monitoring our portfolios and they knew when to take money out and put money in. Total lies just like EC today. He should have known there was a big dip coming and should have been prepared for it. What he has done is criminal.

3. - The advisors, those who had financial planning degrees would most certainly have known that we all wanted a different approach and yet they told us a pack of lies to get us into this financial scheme. Most of the advisors slinked off like scalded cats after storm closed up shop, a couple at least have realised the consequences of storms actions and are trying to help our situation and have put submissions in telling us their side of the story. Where are the rest of them. Most are now working as advisors again, some even offering to help storm clients. I spoke to our advisor on his last day and asked if we could lost our home and he said 'no one is losing their home.' What they did was criminal.

4. - The clients - we were the big fat jewfish who took the bait and got ourselves hauled into the boat. We blame ourselves for getting sucked in and we blame all of the above for doing it. Nobody goes into a financial planner and takes on a financial plan that they know is risky, unless you are Bill Gates and Mates. While everything was going down the gurgler the CBA 'forgot' to contact clients about their margin loans until it was too late and now have the gall to say they didn't have to, Storm weren't watching the market and looking out for anyones financial interests except their own and the advisors were being told to tell us a pack of lies, again, by storm central and thought nothing of following their boss' orders. Why didn't they dob him in at that point? Clients were watching the market and wanting to get out and couldn't because storm wouldn't allow it. What a disgusting mess. The more we find out the worse it becomes. Wish we knew exactly what did happen - they are all out there covering their own bums and hoping their pants don't catch on fire...

If you are reading this and think 'I knew not to get involved with these mongrels' then good on you, wish we'd known to do the same and one of you could have warned us. Our lives have been changed forever.

Quincy said:

Storm boss under fire from inquiry

By David Barbeler | September 03, 2009 -4:02pm



http://www.theaustralian.news.com.au/business/story/0,28124,26021601-36418,00.html


Hmmm . . . .

http://cassimatis.com.au/

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Utter garbage - EC didn't give two hoots what happened to clients before and a leopard never changes his spots, the man is a wolf in sheeps clothing. Hope the three little pigs catch him and cook him...or maybe that only happens in fairy stories.

darkside said:

Ironhalo.

read this submission through and tell me who you think wrote it , i will give you a clue, t's all the evil banks fault , EC hardly rates a mention and of course the people helping are "men of high quality "

Have a guess , or anyone else can jump in for that matter and guess.

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Well I have to say, from a first assessment, it appears our good mate Big Max might have had a hand in this.

He is ex-military (from about a decade+ ago I would presume), which would explain the unnecessary line numbering and the fact that his submission finished with 'ends'....for no apparent reason. I know when I write a military signal the final line is 'transmission ends'. Bizarre format for a financial submission to parliament, see my point below.

It also says 'signed by', which indicates to me that the signatories didn't write it.

It also references Ron Jelich's supplementary submission, which indicates to me that SICAG and Jelich colluded on their responses, to get 'their story straight'. Gee, SICAG having planning meetings with the Redcliffe ex-principal of Storm? I thought SICAG was about getting justice for the clients and not about cavorting/discussing plans with the architects of Storm's failures and the Storm Redcliffe figure who sat by and did nothing as his client's fortunes disappeared down the gurgler?

And we get attacked for suggesting SICAG is biased towards Storm/Manny? Spare me.

Ironhalo said:

Well I have to say, from a first assessment, it appears our good mate Big Max might have had a hand in this.

He is ex-military (from about a decade+ ago I would presume), which would explain the unnecessary line numbering and the fact that his submission finished with 'ends'....for no apparent reason. I know when I write a military signal the final line is 'transmission ends'. Bizarre format for a financial submission to parliament, see my point below.

It also says 'signed by', which indicates to me that the signatories didn't write it.

It also references Ron Jelich's supplementary submission, which indicates to me that SICAG and Jelich colluded on their responses, to get 'their story straight'. Gee, SICAG having planning meetings with the Redcliffe ex-principal of Storm? I thought SICAG was about getting justice for the clients and not about cavorting/discussing plans with the architects of Storm's failures and the Storm Redcliffe figure who sat by and did nothing as his client's fortunes disappeared down the gurgler?

And we get attacked for suggesting SICAG is biased towards Storm/Manny? Spare me.

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Well , i think it was Max's handy work and he does speak in terms of "men of honour" when it comes to Luke Vogel, Ron Jelich and Noel O'Brien all ex storm advisors or heavily involved with storm .

Now in this submission, we get the term "men of high quality" coincidence , me thinks not.

Now after EC's testimony today SICAG should stand up and say storm and EC screwed their clients in the name of greed and incompetence.

Once again , i dare you to say it .

Oh and the new term . Do the right thing :behead:

Garpal Gumnut said:

I was greatly surprised that nearly all Stormers had heard of Aussiestockforums and were now getting their information and advice from ASF rather from the SICAG site.

Some expressed disgust at the former Storm Logo on the SICAG site, the connection of committee members to Storm and Storm advisers, the advice on the SICAG site to seek out financial advisers who followed Storm principles and the failure of SICAG to in any way attribute blame to Storm or the Cassimatis.

I doubt if next January SICAG will have enough people renew their membership to afford a candle to shine a light on a moneyspider.


gg

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excuse me for quoting my own post.

The number of views of this ASF thread as of now is

266,919

It will be interesting to see how many views we get over the next weeks and months as opposed to the SICAG MODEL.

gg

Garpal Gumnut said:

excuse me for quoting my own post.

The number of views of this ASF thread as of now is

266,919

It will be interesting to see how many views we get over the next weeks and months as opposed to the SICAG MODEL.

gg

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GG excuse my ignorance, but what is a moneyspider?

Firstly, I would like to say that it is nice to see more constructive posts on this forum, we seem to have finaly weeded out the majority of " it yours fault for what happened deal with it" types and are now focusing on the real issues, thank you to all who are resposible for recent posts...

In light of the last few weeks happenings, expecially todays hearing of EC, I am sure many peoples eyes have been opened to the real cause of this debacle and the greedy high ups througout both Storm and the Banks who when the times were good clearly could only see bright neon dollar signs flashing in front of them.

I only hope that some justice comes form all this and also some reform, I also pray that the ex storm advisors who are still operating, some of which using the same investment model are shut down in the short term..

I know there are a number out there, and the advice these FP's are providing to already financialy devastated ex Storm investors MUST BE STOPPED, I only wish I knew how to...

The ones I know of appear to have setup under the same priciples as storm, and are sucking the same percentage style commsions out of clients that storm did... I also feel that this style of FEE structure would have to be one of the items reformed under any new laws..

I continually hear stories of manny Sucking large sums in Fee's out everyday, one instance today was 150K in fees on a new investment... I do not understand how this behaviour can possibly be allowed to happen...

I hope some serious changes in this industry are just around the corner, or I might just take out one of those FP licenes myself and make a mint!!

bunyip said:

It appears that nobody asked Cassamatis why he didn't to convert his clients to cash rather than do nothing while the value of their portfolios was decimated.
That is the main question he should have been asked, in my opinion.
If he'd managed the situation by moving clients to cash when the market had fallen by say 25%, and put them back into the market when the recovery got underway, many of them would now be in a pretty good position.

.

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True Bunyip, but in doing so Manny would have also been reducing his income stream from the commsions he was recieving, would he not? A pure conflict of interest.

The comment he made also about taking over his clients loans also seems to me to point to the fact that he would have lost these commisions, why else would anyone take on such a large, bad debt? surely it had to be the fact that the debt would have been creating an income..

"Storm Financial boss Emmanuel Cassimatis provides no answers"

"FEAR turned to anger turned to tears and the room turned to Emmanuel Cassimatis for answers.

He had none, just a black zip-up folder full of personal research rejected by the parliamentary inquiry into the crippling collapse of his advisory firm, Storm Financial, which financially wiped out thousands of people."

More from Trent Dalton in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26023405-952,00.html