Storm Financial Group

[Solly]

"Some fall a long way after collapse"

"SYDNEYSIDERS caught up in the collapse of Storm Financial have found themselves alone, vulnerable and nearly penniless in battles with banks that are admitting no wrong.

Ian Jones, 65, a retiree who worked in middle management with Telstra, lives in a two-bedroom unit in Bexley. His unit is now under threat after his disastrous brush with Storm.

''I have just been decimated. I couldn't talk about it for weeks, I would burst into tears,'' Mr Jones said. ''It just sort of paralyses you, your mind just closed off.'' "

More by Stuart Washington in the SMH here;

http://business.smh.com.au/business/some-fall-a-long-way-after-collapse-20090911-fkrl.html

 

[Garpal Gumnut]

"Storm Financial found fast track to degrees"

"FOR many investors with Storm Financial, it was a source of some comfort that the principals of the North Queensland company and its senior staff all had masters degrees in finance.

But what they weren't told about the course, undertaken through the University of Western Sydney, was that normal entry requirements were waived for Storm personnel.

Furthermore, Storm staff did a maximum of four years' part-time study to get a qualification that normally takes at least five years of full-time study."


More by Andrew Fraser in The Australian here;

http://www.theaustralian.news.com.au/business/story/0,28124,26061644-5017996,00.html

Now why doesn't that surprise me.

You can put lipstick on a pig, but its still a pig.

At least Storm went **** up before Manny could establish a university to give out dodgy degrees to every Financial Planner and insurance salesman in Australia.

gg

 

[Solly]

It would appear that from what has gone down in the evidence to the Inquiry that Manny should have kept to flogging MLC products from an old Ford Cortina around the Tablelands.

Surely with the answers he has given he was not in charge of millions of hardworking battlers money over the last 15 or 20 years.

Sadly he was.

And the moneyspidercentral aka SICAG.INFO still have not a peep out of themselves about Storm's culpability.

I wonder how many of them were invited in to the Cave for the "Secret Meeting".

gg

gg, I had a lunchtime chat with a Stormer friend yesterday, we discussed Duncan's article in the Fin Review about the reported secret meeting.

He was a bit perplexed about the article and why this action was being taken with a select few. This is a Stormer who months earlier told me that there is nothing to worry about as EC will fix everything. This was just before Storm Air was heading past mach 1 with a little too much nose up, hit stall attitude and the mighty clear air GFC tore the wings from the roots.

I must admit he's looking pretty grey and worn down, waiting for any glimer of hope the banks and others can do to extradite him from this quagmire. He recalled the interest he paid the banks and the fees he paid Storm. To me, these were quite substantial amounts and he said they sure made some money out of him. He is now pushing it daily to just feed the family and exist but reckons he's so lucky to be able to just hold on to his house.

He's lost his trust in many people, banking institutions, regulators and politicians. I'd say he's always lived a modest lifestyle, worked hard all his life and put the family first above everything.

He asked me what he had done wrong to deserve where he is at the moment. What do you say when some one you have known for most of your adult life looks you straight in the eyes and asks that question.

Do you say, "It was your fault and you should have kept a closer eye on things." or " You should have known it was too good to be true, you should known better".

I couldn't answer that question, I shook my head and said I honestly don't know.

There are two people who the know the real story, I look forward to the day where Sir Ralph and Capt'n Manny lay all cards on the table so the root cause of this whole event is visible for all to see. Maybe they will take up this challenge, just maybe.

 

[Judd]

It is possible that any review the CBA is undertaking in response to Storm may have wider implications than a number realise. Whatever one may think of Ralph Norris he is not stupid and he probably has the CBA board on his back as well (Has anyone noticed that Dr John Schubert has so far been silent in the matter?)

A review of any lending practices in regard to Storm leads to even further questions. For example, if CBA considered that there was inappropriate use of its VAS in Townsville, it leads to the logical question of what is happening at other CBA branches? And that is only one issue. There are probably a myriad of others. Aside from any compensation for ex-Storm clients, I will be watching with interest for the overall outcomes.

 

[Steve Borden]

It is possible that any review the CBA is undertaking in response to Storm may have wider implications than a number realise. Whatever one may think of Ralph Norris he is not stupid and he probably has the CBA board on his back as well (Has anyone noticed that Dr John Schubert has so far been silent in the matter?)

A review of any lending practices in regard to Storm leads to even further questions. For example, if CBA considered that there was inappropriate use of its VAS in Townsville, it leads to the logical question of what is happening at other CBA branches? And that is only one issue. There are probably a myriad of others. Aside from any compensation for ex-Storm clients, I will be watching with interest for the overall outcomes.

Judd

The CBA also significantly changed their policy with regard to the treatment of investment income yesterday, so much so in one instance I have seen under the old policy the client 'earned' $62k while under the new policy the assessed income is $9k.

Under the new policy none of the self-funded retirees would have received a home loan from the CBA.

 

[Quincy]

"BoQ denies dishonesty in Storm debacle"

"Bank of Queensland chief executive David Liddy yesterday declared his bank had done nothing dishonest or illegal in its involvement with collapsed planner Storm Financial but left open the possibility of major changes to its internal procedures."

Read more by Duncan Hughes in The Australian Financial Review of Saturday, 12 September 2009

Here is the article : - View attachment AFR - 12-13 SEP 2009.pdf

 

[Julia]

He's lost his trust in many people, banking institutions, regulators and politicians. I'd say he's always lived a modest lifestyle, worked hard all his life and put the family first above everything.

To lose trust in all such institutions doesn't seem altogether realistic.

He asked me what he had done wrong to deserve where he is at the moment. What do you say when some one you have known for most of your adult life looks you straight in the eyes and asks that question.

Do you say, "It was your fault and you should have kept a closer eye on things." or " You should have known it was too good to be true, you should known better".

I couldn't answer that question, I shook my head and said I honestly don't know.

Wasn't that rather disingenuous of you, Solly? Of course you wouldn't have needed to respond to him in such pejorative terms, as you have suggested above, but wouldn't it have been more helpful for his future to just explain where he did in fact go wrong?

e.g. the multi layered borrowing on borrowing which few Stormers appear to have understood.

Yes, of course the banks appear to have been guilty of shonky behaviour, but the foundation of all that has happened is an 'investment strategy' that was simply wrong for many of Storm's investors.

 

[Judd]

Judd

The CBA also significantly changed their policy with regard to the treatment of investment income yesterday, so much so in one instance I have seen under the old policy the client 'earned' $62k while under the new policy the assessed income is $9k.

Under the new policy none of the self-funded retirees would have received a home loan from the CBA.

My, my. Upping the lending criteria equals tighter credit. Some could be in for a very rude shock when they apply for a loan. Bye, bye the dream home in Brighton, hello the shack at Upper Lurg. Funny thing when people and regulators have stern looks and words about lenders being slack or unfair with customers. It can have ramifications they don't even expect.

PS: Julia, face to face, I couldn't tell someone who has been sent to the doghouse by Storm, CBA or whoever, where it all went wrong for them. Doubt many could. Solly's friend has probably had all his beliefs shattered beyond repair.

 

[Julia]

PS: Julia, face to face, I couldn't tell someone who has been sent to the doghouse by Storm, CBA or whoever, where it all went wrong for them. Doubt many could. Solly's friend has probably had all his beliefs shattered beyond repair.

Even if meant that as a result they would be saved from making a similar mistake in the future?

If burned investors genuinely don't know what went wrong, I think you are doing them a genuine service by explaining.

Life is full of manipulative and selfish people. To allow that fact to colour how we feel about humanity in general is imo a mistake. Better to become educated so we are in a position to make better judgements.

 

[Garpal Gumnut]

Even if meant that as a result they would be saved from making a similar mistake in the future?

If burned investors genuinely don't know what went wrong, I think you are doing them a genuine service by explaining.

Life is full of manipulative and selfish people. To allow that fact to colour how we feel about humanity in general is imo a mistake. Better to become educated so we are in a position to make better judgements.

Many of the Storm victims I have met, Julia, have no idea about finance.

They have accumulated wealth through hard work and following simple algorithms, whaich have served them well, e.g. pay off your house, get your super up, get an investment property or a beach house.

I still feel that Storm, Cassimatis and the Financial Planning industry alone are primarily responsible for getting these people in debt.

They were the sheepdogs for the banks.

These Storm victims would be the definition of unsophisticated investors.

Trying to explain to them where they went wrong is well nigh impossible.

gg

 

[Julia]

Why is it impossible? I have the impression that they simply went ahead with Manny & Co in blind trust, and didn't ask how it all was supposed to work.

If you were to explain that they borrowed against their homes to fund the purchase of shares/units in Storm Fund, then on top of that borrowed on those shares to buy more shares, and the resulting debt was unsustainable if the market fell, even the most financially unsophisticated person could understand the risk involved.

We've all made mistakes. I think that only by understanding how these happened will we avoid being similarly stung in the future.

 

[Solly]

.....Solly's friend has probably had all his beliefs shattered beyond repair.

Spot on mate, after years of investing with EC and with most of his money in CBA and then it all goes tango uniform.....

It took me two hours of suggesting that he keeps what little cash he has in a bank and not to bury it in a poly out the back.

Once you see the fear and desperation in the eyes of these Stormers, the more you understand.

I'm pleased to read that CBA maybe trying to really help. And still after seeing EC's performance at the BNE hearing I cannot at this stage pass a published opinion.

 

[Garpal Gumnut]

Why is it impossible? I have the impression that they simply went ahead with Manny & Co in blind trust, and didn't ask how it all was supposed to work.

If you were to explain that they borrowed against their homes to fund the purchase of shares/units in Storm Fund, then on top of that borrowed on those shares to buy more shares, and the resulting debt was unsustainable if the market fell, even the most financially unsophisticated person could understand the risk involved.

We've all made mistakes. I think that only by understanding how these happened will we avoid being similarly stung in the future.

Again Julia these people were unsophisticated.

Probably greedy as well like every other human being.

They saw people who had made 4-500% profits with Manny, neighbours, friends, relatives.

They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.

gg

 

[Solly]

....They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.

gg

gg, A very wise observation IMHO

 

[ngardiner]

They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.

One gold plated dunny, and one t**d rolled in glitter. It might be toilet humour, but it worked wonders. Manny is a walking, talking example of how to profit from the depths of human behaviour and this is tolerated because investors could never expect to seek recourse from this man.

Seriously, SICAG and Storm investors - tell me, what's to stop me from purporting this same scam to make myself rich? You folk dismiss the civil liability perspective on the low potential of recovery, yet people buy lottery tickets every day on far less favourable odds.

I almost feel duty bound to scam you folks like SICAG do to prove a point. Grow a set, pursue the real source of this issue and ensure that rather than a focus on profit (hey guys, how did you get here in the first place?) you send a strong message to those who purport these scams. "I am mad as hell, and I won't take this anymore"

PLEASE. We have a forum of disaffected but yet concerned and involved protesters begging for Storm victims to take a stand and yet most choose to forgo their rights to an organisation which has repeatedly failed to achieve any worthwhile goal. Read every submission from SICAG and reach your own conclusion.

 

[Grey Ghost]

Here is the article : - View attachment 33140

I have read this report as well as the BOQ submission to the inquiry. It could be very illustrative if a stormer who had dealings with this bank could give their side of the story. (I know there may be a submission by some to the inquiry but I haven't come across one yet - haven't had time to read them all).
A very disturbing thing in the report is the possible threat buy the bank to countersue anyone who seeks legal redress against them. That is really playing hardball! I hope Bernie and his mates bring this issue up when the CEO David Liddy gives evidence at the inquiry.

 

[bunyip]

Again Julia these people were unsophisticated.

Probably greedy as well like every other human being.

They saw people who had made 4-500% profits with Manny, neighbours, friends, relatives.

They went in with their eyes closed, impressed by Manny's relationship with the banks and his gold plated dunny, and the rest is history.

gg

Sure, they went in with their eyes closed - apparently many of them had no idea what they were letting themselves in for.
But I don't see why their mistakes can't be explained to them in a way they can understand, so that hopefully they won't repeat them.

I mean, isn't that what some of us have done in this thread?
Some Stormers have got their noses out of joint, as you'd expect, and told us we were kicking them when they were down and rubbing salt into their wounds, etc etc.
But most of them have been mature enough to graciously accept constructive criticism from those of us who were prudent enough to stay clear of the Storm Financials of this world.

You don't do any favours to someone who was burnt by a scammer, and appears not to understand how or why he was burnt, if you say nothing or pretend you don't know what went wrong.
Better to be straight with him, tell him where he stuffed up so he can avoid falling into the same trap again.

 

[Joe Blow]

This thread has now been permanently moved to the "General Investment and Economics" forum.

 

[Solly]

"KordaMentha denies Storm fee claim"

"No secret transactions
KordaMentha has dismissed claims it made secret transactions while carrying out its duties as Storm Financial's receiver."

More by Kate Kachor in Investor Daily here;

http://www.investordaily.com.au/cps/rde/xchg/id/style/7380.htm

 

[Solly]

"BoQ denies wrongdoings in Storm debacle"

"Bank has $86m exposure
Bank of Queensland said it did not act against the law in servicing Storm clients."

More by Wouter Klijn in Investor Daily here;

http://www.investordaily.com.au/7386.htm