Storm Financial Group

"Financial crash scuppered Storm plans to buy Melbourne broker"

"Mr Fenech - under questioning from Craig Wilkins, representing Storm liquidators Worrells - agreed the plane was not profitable.

He also said Ignite's ''Phormula'' software, a database of Storm clients which also gave customer profiles, did not report margin calls. The system ''didn't get into the margin call side'', he said."

More by Liam Walsh in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26125055-3122,00.html

Specialed, it costs nothing for SICAG to make a post or two, or apportion and lay some blame on Storm and Cassimatis' as well.

I have intimated and re-iterated the stupidity of this many times in this thread, but it appears that Storm/Cassimatis is a revered figure coated in Teflon when it comes to SICAG, and many of the SICAG faithful see any effort to bring him to justice as getting between them and free cash off the bank. And there is no conspiracy regarding some of the people SICAG have waving their flag; Mr O'Brien's son Andrew was on of the key Redcliffe advisors, and Ron Jelich has appeared in the Redcliffe Herald on occasion extolling the work of SICAG. I have no doubt the banks are to blame, but it takes two to tango, and all those ex-Storm advisers and Storm principals are just as much to blame. Instead, they have jumped on SICAG's hard work/bandwagon, and are now crying poor themselves.

I wish you all the best in your fight against the 'evil banks'; I hope it brings you some satisfaction. Personally, I can't wait to see Cassimatis' assets seized.

theres been alot to read here again-yep things are happening with the family-lets hope mr norris is true to his word-i wonder what the king and queen of the shire of belmont will come up with next week-thats if they have enough guts to front up-im still fired up about this-you know what its like when you cant sleep-you start thinking about all of this -every fibre of your body is wondering why the hell its got to this stage-we arent dumbarses or half wits maybe just a bit too trusting-you know i just want it to go back to the way it was- a time that you looked forward to a time knowing that your future had some certainity because you put your faith and trust in peoplee that said all will be ok- I WANT ANSWERS- I WANT THE TRUTH OF WHAT HAPPENED - I WANT THOSE LOCKED UP IF THERES BEEN ANY CRIMINAL STUFF DONE - THIS CAN NEVER BE ALLOWED TO HAPPEN AGAIN-NEVER.

specialed said:

What an idiotic comment...the evidence is now clearly showing (by CBA's admission in Sydney) that the data on the CGI website was inaccurate much of the time. How could Storm investors have monitored their inventments and taken "defensive action" when the data they had available was days out of date at a time when the market was droping by 400 points a day. If CBA and CGI cant "sell" and supply a product that works effectively then they shouldn't be able to sell it, or should be held accountable for its failure...

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What an idiotic excuse for failing to manage an investment!
People like you can't see the forest for the trees.
Pity your mental capacity is too limited to comprehend that focusing solely on your day to day balance is no way to manage your investments.
Prudence dictates that you keep an eye on the bigger picture, i.e. the overall market and the world economic situation, to guide your investment decisions.
The market had been going downhill for the best part of 12 months before it really went into freefall late last year with the 400 point daily ranges you mentioned.
You'd have to be blind or deaf or living under a rock in the middle of a desert, to be unaware of the economic meltdown and market crash.
It was in every media outlet every day of the week while it was happening, and even before it started. There were warning bells aplenty - you only had to listen to them and react accordingly to protect your investments.
Investors had all the time in the world to get out, and that's exactly what they should have done long before the market hit panic mode and the data systems became overloaded in the last few months of 2008.

'Ah yes', I hear you say - 'but that's what Storm investors were paying Storm Financial for - to manage their investments.'

But Storm weren't doing their job - they were sitting on their hands and doing nothing while the value of their clients portfolios was evaporating month after month.
Investors should have recognised this simple fact, and they should have done something about it.
Business owners who employ managers have a responsibility to keep an eye on those managers to ensure they're doing their job.
If the owner foregoes this responsibility, then they'll lose a lot of money if their manager is incompetent.

The faulty data late last year is in no way responsible for the fact that many Storm clients had already been decimated by sitting on heavily geared portfolios through almost 12 months of a severe bear market.
Accurate data would not have changed this fact one iota.

Question for Storm Victims:

Did you read the Statement of Advice, Financial Services Guide and Product disclosure statement?

As someone mentioned before, was the Statement of Advice very general or misleading? without consideration of your personal financial situation?

I would very much go through it and was wondering if anyone can be bothered posting it up?

Thanks.

As for my two cents, I see clearly from both sides. I mean, in the end, it is all a matter of priorities.

Some just want compensation - which Storm cannot give so there is not much point chasing up storm.

Some want accountability and justice - so they are angry as to why the people who have caused the mess are starting up a support group for the victims and using it as a vehicle to allay liability.

I think with the amount of embarrassment ASIC has suffered from this fiasco, it will definitely pursue those responsible. Before that happens, I hope those ruined could get some compensation from the banks for their unsavory lending practices. Ultimately EC and all related will get what's coming to them.

Skyquake, I'm pretty sure someone did post up their full SOA several weeks ago.

Bunyip, I agree with your comments. To suggest that the failure of investments was solely due to some possible inaccuracies in data just before it all fell to bits is simply silly.

That was partly why I previously asked Specialed if the daily TV report was his/her only access to market information. As you say, heaps of warning for months and months that a downturn was happening. Even if data from CGI was unavailable briefly, there is always the ASX website which is free and available to everyone.

Julia said:

Skyquake, I'm pretty sure someone did post up their full SOA several weeks ago.

Bunyip, I agree with your comments. To suggest that the failure of investments was solely due to some possible inaccuracies in data just before it all fell to bits is simply silly.

That was partly why I previously asked Specialed if the daily TV report was his/her only access to market information. As you say, heaps of warning for months and months that a downturn was happening. Even if data from CGI was unavailable briefly, there is always the ASX website which is free and available to everyone.

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Julia, I spent some time with a very distressed Stormer during the week. I know I'm probably covering some old ground here, but I asked a similar question, with all the press about the market downturn why didn't they take more direct action with Storm in regard to the preservation of their portfolio and position. The answer I got was that because of the length of time they had been with EC they trusted that Strom had all the right methodologies and mitigation strategies in place to avert disaster. After all EC had a strong track record, owned lots of property etc and appeared to have a successful business that was benefiting many people. This Stormer is not stupid, very successful and well regarded in their own field.

I believe the main reason they were with Storm was because of the trust they had in the whole setup and had been looked after very well for many years. It was the hands off, leave it to EC & Storm theme that was brought up many times during our meeting after all that is why they were paying the fees for the advice. In their current predicament they now are very distrusting of banks, fin advisers, solicitors etc, although I'm sure many of these are genuinely trying to assist, after lining their pocket a bit along the way was well.

It's hard for me to see the toll that this whole episode is taking on them, they are becoming grey, hunched and gaunt before their time. They aren't greedy highflyers, they have worked hard all their life and hoped for a modest, safe comfortable retirement based on the promises of Storm. Looks like they backed the wrong horse but they shouldn't be getting punished to this extent for their decisions. Again they reiterated to me that they felt secure in knowing that CGI & The Comm Bank were involved and this close association with Storm gave them confidence. They weren't investing in some Internet Ponzi scheme run by a Northern European crime syndicate, they believed they were investing in strong reputable local organisations who genuinely had their interests at heart and that is where the real hurt is with them. I can't bag them for that belief.

I read during the week that Michael Fenech, the ex chief executive and director of Ignite Financial Systems & Research said that, "Ignite's ''Phormula'' software, a database of Storm clients which also gave customer profiles, did not report margin calls. The system ''didn't get into the margin call side'' "

I find this statement amazing after I read this about Phormula in Storm's prospectus for the failed listing attempt.

"Storm is able to actively manage its clients’ portfolios by
using a purpose-built software system called Phormula, which
enables Storm to efficiently assess and monitor each client’s
borrowing and investing capacity.

Phormula identifies clients with Step Investment opportunities
and automatically generates Statements of Additional Advice
(“SoAAs”), which are sent to clients to be authorised. "

I'm am positive that with dutiful foresenic examination of the ordreal more will come to light.


I don't know how many posters here have ever sat opposite a Stormer and had a long chat about what happened to them but it is very different to having the annominity of a forum such as this. I been told things that I'd never post publicly out of respect to those impacted but it truly amazed me how some of these Stormers have been able to keep it together for so long and as well as they have. The stress and carrying the constant pressure of what has happened has been quite horrendous for many. If I was in their shoes I'd be doing whatever it takes to improve my position, try any avenue of assistance, seek any opinion that may be beneficial and never ever give up until I retrieved whatever I could to get some security and sense of hope for me and my family. Nothing would stop me until I got back to a position that I would accept. I would use every avenue and every glimmer of hope to my advantage.

People have been harmed, damaged and disadvantaged, let the Federal and State courts and the court of public opinion fully hear the evidence from all parties pertaining to this debacle, hand down a determination and administer the appropriate sentencing.

After all with public statements like these I'm sure the "Truth will out".

Solly, I don't believe any of us commenting on this thread have suggested we don't feel very sorry for people who now find themselves in very distressing situations.

That is one issue.

The other is the folly of ever demonstrating complete trust in any individual or organisation, no matter what they might promise, to the exclusion of keeping a personal watch over something as important as investments.

On a slightly lighter note, I see in today's paper there is now available a
"Smash Manny" doll. The company makes revenge dolls of the most hated man in America, Bernie Madoff.

"We are making a new one covered in Teflon - it is the limited edition 'It was the banks' fault, so don't smash me' Manny Doll", he said. Just the sort of thing to take with you to the Federal Court to witness Manny and Julie getting grilled on Monday.

Julia said:

Solly, I don't believe any of us commenting on this thread have suggested we don't feel very sorry for people who now find themselves in very distressing situations.

That is one issue.

The other is the folly of ever demonstrating complete trust in any individual or organisation, no matter what they might promise, to the exclusion of keeping a personal watch over something as important as investments.

On a slightly lighter note, I see in today's paper there is now available a
"Smash Manny" doll. The company makes revenge dolls of the most hated man in America, Bernie Madoff.

"We are making a new one covered in Teflon - it is the limited edition 'It was the banks' fault, so don't smash me' Manny Doll", he said. Just the sort of thing to take with you to the Federal Court to witness Manny and Julie getting grilled on Monday.

Click to expand...

I wonder if Jules will pull another sickie. Maybe they both will.

bunyip said:

What an idiotic excuse for failing to manage an investment!
People like you can't see the forest for the trees.
Pity your mental capacity is too limited to comprehend that focusing solely on your day to day balance is no way to manage your investments.
Prudence dictates that you keep an eye on the bigger picture, i.e. the overall market and the world economic situation, to guide your investment decisions.
The market had been going downhill for the best part of 12 months before it really went into freefall late last year with the 400 point daily ranges you mentioned.
You'd have to be blind or deaf or living under a rock in the middle of a desert, to be unaware of the economic meltdown and market crash.
It was in every media outlet every day of the week while it was happening, and even before it started. There were warning bells aplenty - you only had to listen to them and react accordingly to protect your investments.
Investors had all the time in the world to get out, and that's exactly what they should have done long before the market hit panic mode and the data systems became overloaded in the last few months of 2008.

'Ah yes', I hear you say - 'but that's what Storm investors were paying Storm Financial for - to manage their investments.'

But Storm weren't doing their job - they were sitting on their hands and doing nothing while the value of their clients portfolios was evaporating month after month.
Investors should have recognised this simple fact, and they should have done something about it.
Business owners who employ managers have a responsibility to keep an eye on those managers to ensure they're doing their job.
If the owner foregoes this responsibility, then they'll lose a lot of money if their manager is incompetent.

The faulty data late last year is in no way responsible for the fact that many Storm clients had already been decimated by sitting on heavily geared portfolios through almost 12 months of a severe bear market.
Accurate data would not have changed this fact one iota.

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Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers. It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...

specialed said:

Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers. It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...

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Specialed,

Wow, unfortunately that last post of yours is going to haunt you, had you have been around this site long enough to realise that "Storm" was a giant Ponzi scheme and people were betting their house at the Cassimatis Casino you would know that Bunyip and quite a few others here did actually have a good handle on the impending GFC and it's rammifications.

I am not pointing this out as a "i told you so", but more to the point of , before you "badmouth someone" maybe just check your facts.

There are also quite a few others on this site that took money out of the market before it plummeted because of Bunyips insight.

Same can probably be said for GG, love him or hate him, he does seem to know whats going on, but it's the delivery that hurts those who like to be told what they want to hear, rather than the truth.

Sometimes cold hard reality , although not nice , may save lots of "hard earned" in the long run .

It seems then that I have egg on my face, and will take it as stated the previous advice of bunyip and others. It is great to here that this forum has saved some from the effects of the GFC. As for checking my facts, I am merely continuing the tradition of this great forum. As I have pointed out on numerous occasions this forum is littered with comments that are based little on fact, but instead on rumour, hearsay or innuendo. In particular the attempts to “badmouth” and discredit the work or motives of SICAG.

Let free speech, filled with its lies, live on

I have had a very hard weekend. It started Friday night and I am still battling the depths of true despair. I have for ten months tried to remain strong and positive for my husband and my survival from this catastrophe. I work full time in a difficult environment. I am carrying the home and keeping my unwell husband going as he has had to go back to work to help me pay the "bills". All the hours of litigation/CBA/ Worrells paperwork I have done on my own into the late hours of the night. I am exhausted and feel like the fight is too hard. And there seems no end in sight.

I sit here and think of all the things we had planned to do very shortly when we both would have retired. Not big things. Just enjoying a few of the fruits of our hard labour-filled lives. We were going to lock up our unit and go visit my sister down south and if we liked it there, sell our unit and re-locate there. And somewhere we would have done a little not-too-strenuous travelling overseas if my husband was up to it.

But our dreams have all gone. My husbands superannuation has gone. And if we are unsuccessful with a resolution of sorts, our home too will go. It probably will anyway.

Yes we are largely to blame for the position we are now in. We were so stupid to place so much trust in Storm and the banks the way we did. And we should have watched our investment closer despite our demanding jobs and ailing parent commitments.

But I ask one question. Why do we have to pay for this one mistake so dearly..we never hurt anyone, cheated anyone, harmed anyone. We have worked hard our whole lives, been upstanding citizens, children who made our parents proud. We never took big gambles with anything, payed off our home (pre Storm) through many sacrifices and extra hours of overtime at work.

So why have we to pay for this one error - trusting - with our home, our old age securities, our retirement, our lives more or less. This seems like a huge penalty for our one mistake, a penalty that I am losing the battle in trying to come to terms with.

specialed said:

Statements about my mental capacity, like most of your contributions to this forum add little to this discussion but do continue to make me chuckle...cheers. It is a pity that obviously where you were able to foresee the impending financial disaster that occurred, no one else worldwide could. With your economic credentials surely you must be under utilised in whatever capacity it is that you work. Maybe you should become a financial advisor, in the meantime, please continue your contributions for my ammusement...

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This sort of sarcasm simply demonstrates that you have not read the whole thread where many of us attested to being sufficiently aware of the global situation to exit the market when it was obvious things were going from bad to worse.
Bunyip (and others of us) have many successful years of trading and investing.

For you to say "where you were able to foresee the impending financial disaster that occurred, no one else worldwide could" simply underlines your own financial illiteracy. There were reports on the news every single day for months about the subprime mess in the US, the ramifications of the credit default swaps and other derivatives, and not least the unprecedented collapse of Lehman's. Did all this mean nothing to you?
Did you just close your eyes and ears and think it was all not relevant to your investments?

That's your privilege. But don't go bagging members of this forum who were possessed of a greater degree of awareness.

specialed said:

It seems then that I have egg on my face, and will take it as stated the previous advice of bunyip and others. It is great to here that this forum has saved some from the effects of the GFC. As for checking my facts, I am merely continuing the tradition of this great forum. As I have pointed out on numerous occasions this forum is littered with comments that are based little on fact, but instead on rumour, hearsay or innuendo. In particular the attempts to “badmouth” and discredit the work or motives of SICAG.

Let free speech, filled with its lies, live on

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I fail to see what this post contributes in any way.

Anastasia said:

I have had a very hard weekend. It started Friday night and I am still battling the depths of true despair. I have for ten months tried to remain strong and positive for my husband and my survival from this catastrophe. I work full time in a difficult environment. I am carrying the home and keeping my unwell husband going as he has had to go back to work to help me pay the "bills". All the hours of litigation/CBA/ Worrells paperwork I have done on my own into the late hours of the night. I am exhausted and feel like the fight is too hard. And there seems no end in sight.

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Oh, Anastasia, I do really feel for you. Your exhaustion is almost palpable.
All I can say - and I understand how useless it is - is how much you deserve credit for managing to keep supporting your husband, hold down what sounds like a difficult job, and attend to all the paperwork as well.
No wonder you feel as though there's no end to it.

But there will be an end eventually, hopefully one where Manny and Julie are called to account for their heartless exploitation of people like yourself.

I've sent you a PM, Anastasia.

Likewise Anastacia. Check your inbox.

And hang in there, doing the paperwork was tough for a lot of people (one of my rellies included) but it WILL be worth it.

Julia said:

Oh, Anastasia, I do really feel for you. Your exhaustion is almost palpable.
All I can say - and I understand how useless it is - is how much you deserve credit for managing to keep supporting your husband, hold down what sounds like a difficult job, and attend to all the paperwork as well.
No wonder you feel as though there's no end to it.

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Anastasia - Julia has described the same sentiment that I feel. Fate has dealt you a harsh blow and you are dealing with it so well, and it makes me feel so sad that there is no simple end to your situation. Its an easy thing to say, and difficult to believe if on the other end of it, but time will heal, but in the meantime please know that there are people that hear what you are going through and respect how you are dealing with it. I wish you all the best.

"Time for Macquarie to imbue its explanation on Storm margins with a little compassion"

"Macquarie Bank's managing director, Richard Sheppard, must have had a lot on his mind when he signed the covering letter to Macquarie Group's submission to the parliamentary inquiry investigating Storm Financial.

It is hard to imagine a conservative, cautious and well-respected banker such as Mr Sheppard putting his name anywhere near the document if he had been given the full information necessary to judge its contents."

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/time-for-macquarie-to-imbue-its-explanation-on-storm-margins-with-a-little-compassion-20090927-g7oy.html

"Storm clients angry at Macquarie"

"A SURVEY of former Storm Financial clients who obtained Macquarie Bank margin loans has exposed serious deficiencies in Macquarie's submission to a parliamentary inquiry.

Macquarie's submission, lodged with a cover letter signed by the Macquarie Bank managing director Richard Sheppard, states Macquarie's margin loan business "ensured that all affected clients were made aware of their margin call obligations, and were in a position to take action in a timely manner". "

More by Stuart Washington in the SMH here;

http://www.smh.com.au/business/storm-clients-angry-at-macquarie-20090927-g7oh.html

"Penalty for faulty advice to soar"

"The corporate regulator is poised to almost double the maximum amount of compensation the Financial Ombudsman Service can award aggrieved investors for negligent advice from financial planners."

Read more by Leng Yeow in The Australian Financial Review of Monday, 28 September 2009.

Anastasia said:

.....We were so stupid to place so much trust in Storm and the banks the way we did.

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I don't consider that you were stupid. Unwise perhaps but not stupid. After all, Storm appeared to be sound for quite sometime. Friends, family and acquaintances were extolling its virtues. The organisation appears to have beaten its drum about how good it was and how the banks supported it. Pretty hard in a community setting for anyone to resist such a siren call, especially if you did not have some knowledge of investing. No need to be so hard on yourself for past decisions.

One sad aspect is that people believed at the time that banks supported Storm. At a corporate level they provided funding to the Storm, as they do with any business. Equally, as they demonstrated, they are just as prepared to pull the plug on if they consider their funds are at risk, as they do with any other business. In that context, the customers of the business are not the bank's concern.

As for shoddy lending practices to Storm clients, well, I hope the banks rectify that and the CBA is at least doing something constructive in that regard. Although they exist to lend money and charge interest for that (paying interest does not equate to buying financial advice; Storm was there for that and was paid to do so) not to ensure people could repay and allowing negative equity on investments is really beyond the pale.

It is still totally beyond my comprehension how any financial adviser could push a position that "good" debt should never be repaid but only increased. It's debt no matter whether "good" or "bad". To allow their clients to get to this situation is execrable, dumb and plain theft of client's money. Cowards and completely without honour.