Storm Financial Group

"Fiery Storm resolution meeting tipped"

"LAWYERS delivering the detail of a Commonwealth Bank resolution scheme offer to devastated Storm Financial clients may find they get a cool reception today."

More by Tony Raggatt in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/02/27/118735_news.html

Julia said:

It's Julia.

Apologies !!


It just seems to me that there is one remedy for those involved in the big failures, and none for those whose loss has been only as part of a much smaller operation.

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Alot of this media attention has come about due to the tireless efforts of SICAG hounding polilies and seeking legal advice. Without that I suspect this would be alot more focussed on Manny etc. You are right however that the people power behind larger failures inevitably means they recieve larger coverage.

Further, the major players are less able to dismiss the victims concerns. Whether you agree with effectiveness of the Ripoll inquiry in highlighting and fixing broader issues, no one can dismiss the role it played in bringing the CBA to account. Infact, if a little more pressure was put on Westpac, ANZ and BOQ to appear and harder questions asked of them, then maybe the lawyers would not be needing to "go after them now".

What this country really needs i a broader inquiry into the banking industry. I suspect that we would find as many anti- competitive behaviours as are hidden in the oil industry...

I do wonder if with our population will ever be large enough to allow for true competition...any thoughts ???

Julia said:

It's Julia.


I have no 'animosity' toward any Storm clients. Just disbelief that so many people would engage in such risky investing at such a late stage in their lives, e.g. double gearing.
Much has been lamented about the possibility of people losing their homes.
Well, why put them at risk in the first place? Not to mention then borrowing further against that loan to buy more shares!!

If the banks have been less than professional in their lending criteria, then of course they should make amends.

I was simply making the point that there are thousands of other people over decades who, despite not taking the obvious risks that Storm clients took, have been victims of criminal behaviour, and who did not have the benefit of a huge media interest to spur class action and taxpayer funded investigations.

It just seems to me that there is one remedy for those involved in the big failures, and none for those whose loss has been only as part of a much smaller operation.

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Julia, You make all of your comments based on the benefit of hind sight. One thing I have learnt over time is hind sight creates a new reality and opinions. Being in a situation is different to reflecting back and forming an outside opinion.

pegasus said:

Julia, You make all of your comments based on the benefit of hind sight. One thing I have learnt over time is hind sight creates a new reality and opinions. Being in a situation is different to reflecting back and forming an outside opinion.

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Pegasus, In my opinion, Julia has generally spoken from her personal experience and has learnt from it. I think MC and his so called "Qualified" staff might have used a lot of hindsight in his plans and ignored any "Bad" history.

Anyway, whilst the Banks may have done some wrong and they should and will be held accountable, all of the Storm customers who were destroyed by double gearing were in a world of hurt well before the margin calls came. My In-laws were at 100% (including their BOQ loan) in July 2008 when the B@#*ards at Storm financial Rocky (and you know who you are) did another SOAA To increase debt and get a bit more commision). Yes I know.... JULY 2008. They followed the Storm request to Cash out at the end of October 2008 when the were left with $1.157M in and $1.406M in debt. Now to add more hurt to the equation (AND also in my opinion Macquarie has something to answer for) the shares were then put into a Cash Management Account earning 3 or 4%. This is to cover the interest accruing on the loans at 8-9%. Look at the debts, do the maths. The In-laws were going backwards..and no-one cared. The Margin lender wasn't he had $ for $ security and it would take some time to chew through the small surplus available. What about the interest accruing on the BOQ loan... sorry we all forgot about that. Whan I got involved in mid December it took until mid January to get the Cash into the Margin Loan from the SAME Bank. They didn't care there was no rush. Macquarie, I haven't started yet but it will be soon I'm just waiting to see what ASIC are going to do. BOQ have come some way to helping.....but the fact remains that they lent a couple of pensioners a lot of money that they could NEVER afford. Now as any prudent lender would know (I doubt if there were any at their branch in Townsville) a pension of around $400pw is insufficient to meet the repayments on a $200K loan and actually live. In any case they should have been contacted which they were'nt. Once again I'm waiting on ASIC.

Now if any storm financial supporters can tell me how my in-laws were going to get back into the market when it eventually turned around then let me know. The silence will be deafening I think.

Anyway, whilst their has been a lot of blame going around I can only hope that the blow torch soon turns onto Mr & Mrs C and their bunch of aiders and abetters. I know my in-laws are hurting in ways that I can only imagine but they are proud people and I know they will get through it. We help all we can, but damn it, it hurts and I'm not sure what to do now but I will continue to fight the good fight though.

Anyway, sorry for the rant but this forum has been a great help at times.

Solly, were would we be without your updates.. thanks mate.

GG, you started this thread before it all went to crap. Some people forget that...I don't...Thanks also.

To everyone else... Keep the debate going, try not to get personal ...

I do think, in the end, that the truth will come out.... I just hope it is in time for my family and all of the others affected by this.
Cheers & good luck
Jifromoz
ps I liked The Angels in my earlier days so this is apt for me

specialed said:

.any thoughts ???

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Just that it would be much appreciated if you learned to use the QUOTE Tags properly so that it didn't appear that I was the one offering apologies.
With thanks.

pegasus said:

Julia, You make all of your comments based on the benefit of hind sight. One thing I have learnt over time is hind sight creates a new reality and opinions. Being in a situation is different to reflecting back and forming an outside opinion.

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I don't wish to be rude, Pegasus, but that's complete nonsense.

If any of the Stormers had - before engaging in Storm's 'plan' - asked me if it was a good idea to (in or close to retirement) mortgage their homes to buy shares, especially when they didn't intend to check what valuation had been put on these homes, or to check what income had been stated as available to service the loan, I would have without question have suggested they stay away.

Moreover, if they had further suggested they were then going to once again borrow for a margin loan on those shares bought with borrowed money, I'd have been in a state of disbelief.

So hindsight has nothing to do with it.

The one fortunate fact is that with hindsight most of the Stormers now realise how risky the 'strategy' was and thankfully will not repeat the process.

There will always be the Cassimatises out there, just waiting to take advantage of naivete and blind trust. To imagine that such 'advisers' are primarily motivated by the welfare of their clients is to attribute to them a decency and humanity foreign to their conniving natures.

thanks JFO

The truth will out.

Manny will go for litigation and it will all come out then, not as he hopes though imho.

Awaiting ASIC as well, mob of muppets usually, but may come good on this one. They need a win.

gg

Solly said:

"The Liquidation of Storm Financial "

"Salutory lessons for investors.
Tucker & Cowen Solicitors have been recently engaged by the liquidators of Storm Financial Limited, one of the largest financial services companies in Australia. "

http://www.prwire.com.au/pr/16762/the-liquidation-of-storm-financial

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Thanks for that link, Solly. Most interesting, especially this extract with respect to the need for margin calls:

Salutory lessons for investors

Tucker & Cowen Solicitors have been recently engaged by the liquidators of Storm Financial Limited, one of the largest financial services companies in Australia.

The Lessons

Of particular interest was the rapidity of the collapse in this particular case. As noted above, the company had an extensive client base and considerable net profits at 30 June 2008, and yet six months and nine days later was insolvent, in administration with many of its clients financially ruined for the rest of their lives. It was particularly distressing in that a number of the clients of Storm who took financial advice were elderly or retired persons, who quite literally lost all of their life savings, and more in the collapse.

The lessons seem to be:-

1. Storm had a consistent model of advice whereby substantially the same advice was given to most of their clients. Storm’s directors argue that this is because the advice was only given to the sort of clients that the advice suited. Nevertheless, the losses suffered by many clients demonstrate that there were serious risks involved with the advice.

2. Although it is perhaps a lesson that has been learned many times before, everyone needs to be aware of the dangers of gearing. Gearing or leverage can certainly rapidly increase returns when times are good and markets are rising. It has an equal and opposite effect when markets are falling.

3. The rate of the fall in stock markets in late 2008 around the world was such that margin calls and stop losses did not operate as they ought to have, and clients who thought they had reserve or protected positions because of stop losses or margin calls, found that they in fact lost everything and those did not work.

4. Terms and conditions need to be read carefully. Most of Storm’s clients had margin loans through the Commonwealth Bank of Australia. The Commonwealth Bank’s terms and conditions provide the bank is not actually obliged to make any margin calls at all, and it is up to clients to monitor their own investments. Therefore, as always, be aware of the fine print.

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Jifromoz said:

Now if any storm financial supporters can tell me how my in-laws were going to get back into the market when it eventually turned around then let me know. The silence will be deafening I think.

Anyway, whilst their has been a lot of blame going around I can only hope that the blow torch soon turns onto Mr & Mrs C and their bunch of aiders and abetters. I know my in-laws are hurting in ways that I can only imagine but they are proud people and I know they will get through it. We help all we can, but damn it, it hurts and I'm not sure what to do now but I will continue to fight the good fight though.

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Jifromoz, that's just a dreadful story. I'm so glad to see your raising the need for the focus to turn to the Cassimatises. I'm so far astonished by the few Stormers (or others) who have attributed an appropriate proportion of blame to them. I'm no apologist for any bank, but it seems that the banks have been the focus of all the anger simply because they have the capacity to pay, where the so called advisers may appear not to.

(I'd be very surprised, however, if said advisers had not long ago planned for their own personal future, regardless of the demise of their clients.)

specialed said:

Julie,

This comment appears on face value to indicate that much of what seemed like a general animosity towards the storm clients (victims) by you is based more on the fact that you were unable to get compensation for your failed investment decisions, rather then a genuine understanding of the role a number of the parties and in particular the role of the CBA played in this affair.

The basis for the compensation is an admission of some culpability in this affair. Further, as the compensation is based on 6 “test cases” bought before some highly respected legal experts, The decision to offer compensation is a reflection of the CBA's belief that the legal interpretation in these test cases is correct. This is after the CBA would have also gotten their own legal advice. Surely they therefore believe that if it were to go to court they risk losing substantially more than the current estimate of $ 300 million. A few cases here and there will ultimately cost them a lot less then a class action involving 2000 odd people, should they lose.

I hope some do “take it to the courts”, and some have indicated they will be. Although there is a risk it may well be locked in the legal system for some time I believe this needs to be tested in actual court, not just in a hypothetical one....

However, I doubt even this will change your opinion, that unfortunately appears to be quite dogmatic and not always based on an objective analysis...

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First point - show enough respect for Julia to address her by her correct name.

Second point - Far from showing animosity towards ex Storm clients, Julia has in fact shown considerable empathy and compassion towards them on various occasions, and has offered some very helpful advice. If you'd read through all her posts, you'd know this yourself without me needing to point it out to you.

But it's not your style to get your facts straight before opening your mouth....you have a track record on this thread of speaking out without first activating the thought process.
If anyone has consistently shown animosity towards others on this thread, it's you - one of your posts has already been removed by forum management because of your completely unjustified personal attack on another member.

Julia is well within her rights to express the opinion that a majority of Stormers bear a significant part of the responsibility for the mess they find themselves in. Anyone with the power to think clearly will agree with her. At no time has she suggested that 100% of the blame lies with the clients themselves. She's been fair minded enough to share the blame with the other parties involved - the banks and Storm Financial itself.
She is expressing a balanced and objective viewpoint, which is her right. Her views make a lot more sense than some of the ill-considered views that you've expressed on here at times.
It's absurd of you to accuse her of animosity towards Stormers just because she points out that they employed reckless borrowing practices including dangerous levels of gearing, and consequently should not be entitled to massive compensation payouts.

Disagree with her all you want, but leave the personal accusations out of it.

Deja vu anyone?

Julia said:

Just that it would be much appreciated if you learned to use the QUOTE Tags properly so that it didn't appear that I was the one offering apologies.
With thanks.


I don't wish to be rude, but that's complete nonsense.

.

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WOW, are you serious ?

Jifromoz, no probs mate hope the links help out.

I believe the more information that is out there, will hopefully assist to get to the root cause of what really happened in this event.

There are many inputs to this saga, the challenge is reassembling the true sequence and determining the actual role the participants played.

I believe a satisfactory remedy for all those impacted will take great determination, planning, patience, persistence and fortitude.

Julia said:

So forgive my view that Stormers are being quite fortunate in receiving compensation from anyone.

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specialed said:

Julie,

This comment appears on face value to indicate that much of what seemed like a general animosity towards the storm clients (victims) by you is based more on the fact that you were unable to get compensation for your failed investment decisions, rather then a genuine understanding of the role a number of the parties and in particular the role of the CBA played in this affair.

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bunyip said:

First point - show enough respect for Julia to address her by her correct name.


It's absurd of you to accuse her of animosity towards Stormers just because she points out that they employed reckless borrowing practices including dangerous levels of gearing, and consequently should not be entitled to massive compensation payouts.

Disagree with her all you want, but leave the personal accusations out of it.

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Agreed, I should have been more carefull with my typing and spelt her name correctly. Also it appears that I also have alot to learn about multiquote.

Julia did not state that stormers were not entitled to massive compensation payouts. As quoted above, she stated they are fortunate to recieve a payout from anyone.

The basis for the pay out is not restricted to the levels of grearing the customer had, but Im sure is in part a reflection of the poor banking practices that enabled such a high level of gearing to be taken by some who were in no position to support it, and with little understanding of what they were doing. As we are aware there a plenty of stormers who were not highly geared at all. Even these with very low levels of gearing will still recieve payouts as the payout is based on a range of factors.

I agree, Julie is welcome to her opinion and so am I. I clearly stated a personal comment where I FEEL she has shown an amimosity towards storm clients seeking compensation, or more specifically a frustration with the fact that they are recieving payouts where she could not. Further, it was Julia who drew the link between her not getting compensated in seemingly small collapse versus those in larger collapses who do seek out and recieve compensation..

Finally, I didnt know I had a comment withdrawn by the moderator. It surprises me that I did not receive an email so at least I know when I crossed a line. Can you tell me what specifically I wrote that was removed ?

Julia said:

Just that it would be much appreciated if you learned to use the QUOTE Tags properly so that it didn't appear that I was the one offering apologies.
With thanks.


I don't wish to be rude, Pegasus, but that's complete nonsense.

If any of the Stormers had - before engaging in Storm's 'plan' - asked me if it was a good idea to (in or close to retirement) mortgage their homes to buy shares, especially when they didn't intend to check what valuation had been put on these homes, or to check what income had been stated as available to service the loan, I would have without question have suggested they stay away.

Moreover, if they had further suggested they were then going to once again borrow for a margin loan on those shares bought with borrowed money, I'd have been in a state of disbelief.

So hindsight has nothing to do with it.

The one fortunate fact is that with hindsight most of the Stormers now realise how risky the 'strategy' was and thankfully will not repeat the process.

There will always be the Cassimatises out there, just waiting to take advantage of naivete and blind trust. To imagine that such 'advisers' are primarily motivated by the welfare of their clients is to attribute to them a decency and humanity foreign to their conniving natures.

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Your definition of "nonsense" is not the one I hold.

Human beings are full of thier own judgment on circumstances they know very little about. They wrap this judgement around the percieved facts and make it thier reality.

specialed said:

Agreed, I should have been more carefull with my typing and spelt her name correctly. Also it appears that I also have alot to learn about multiquote.

Julia did not state that stormers were not entitled to massive compensation payouts. As quoted above, she stated they are fortunate to recieve a payout from anyone.

The basis for the pay out is not restricted to the levels of grearing the customer had, but Im sure is in part a reflection of the poor banking practices that enabled such a high level of gearing to be taken by some who were in no position to support it, and with little understanding of what they were doing. As we are aware there a plenty of stormers who were not highly geared at all. Even these with very low levels of gearing will still recieve payouts as the payout is based on a range of factors.

I agree, Julie is welcome to her opinion and so am I. I clearly stated a personal comment where I FEEL she has shown an amimosity towards storm clients seeking compensation, or more specifically a frustration with the fact that they are recieving payouts where she could not. Further, it was Julia who drew the link between her not getting compensated in seemingly small collapse versus those in larger collapses who do seek out and recieve compensation..

Finally, I didnt know I had a comment withdrawn by the moderator. It surprises me that I did not receive an email so at least I know when I crossed a line. Can you tell me what specifically I wrote that was removed ?

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specialed,

You are a very annoying person, spelling someone's name persistently wrong.

It shows a certain lack of respect, manners and is a reflection on your upbringing, education or environment.

You do not deserve to be a rich Aussiestock person and your misfortune with Storm is to me not a surprise.

Are you a Financial Adviser?

gg

Garpal Gumnut said:

specialed,

You are a very annoying person, spelling someone's name persistently wrong.

It shows a certain lack of respect, manners and is a reflection on your upbringing, education or environment.

You do not deserve to be a rich Aussiestock person and your misfortune with Storm is to me not a surprise.

Are you a Financial Adviser?

gg

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I pride myself on my ability to annoy...it is equalled only by the annoyance I feel reading the comments of those who presume to understand storm investors, their financial understanding, their ability to meet margin calls, their understanding of double gearing etc etc, based solely, or largely on what has been written in this forum by a very small percentage of Storm investors. Whilst it is obvious the large number of contributers to this forum, the number of storm contributors, as a percentage of the total number os storm investors caught up in this mess is very small.

My upbringing, education and environment, both past and present is of little concern to anyone, however now that you have bought it up; Is one that I am proud of and would be the envy of most. Thankyou for your concern.

As stated time and time again…I have had no misfortune with storm…quite the opposite, I do however know of the devastation it has caused both financially and emotionally to others. Thankfully it has also shown to me the power of the human spirit and demonstrated tine and time again the noble character of those who have been affected.

An no, whilst annoying, I am definitely no financial planner, or accountant of lawyer for that matter…..

specialed said:

Agreed, I should have been more carefull with my typing and spelt her name correctly. Also it appears that I also have alot to learn about multiquote.

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I agree, Julie is welcome to her opinion

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specialed said:

I pride myself on my ability to annoy

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Obviously. Hence your determination to use my name incorrectly again.
Pretty sad, really.
NB. careful is spelt with one 'l'. Not two.

specialed said:

WOW, are you serious ?

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This above comment is made in apparent response to your combining two of my earlier completely unrelated comments in the one quote as below.
They were responses to yourself and later to Pegasus on quite different topics.
What is the matter with you that you are so determined to be a troublemaker that you will attempt to combine the two unrelated remarks into one quote, and then make the utterly irrelevant comment "WOW, are you serious?"

Yes, I have been. But from now on I have better uses of my time than to indulge your petty behaviour.

"Storm Financial compensation scheme rolls out"

"STORM Financial investors will start receiving compensation offers in the mail this week following a series of meetings over the weekend advising clients on the resolution scheme with the Commonwealth Bank."

More by Mitch Gaynor and Nathan Paull in The Courier Mail here;

http://www.news.com.au/couriermail/story/0,23739,26782708-3122,00.html

"No joy for old faithful of Colonial"

"FUND manager Colonial First State is battling to orchestrate an orderly wind-down of its mortgage trust business as it emerges that an estimated 17,000 elderly pensioners are being told to wait four years to have their money returned."

"Class action lawyers Slater & Gordon have been contacted by Colonial clients and are reviewing the situation."

More by James Kirby in The Age.

http://www.theage.com.au/business/no-joy-for-old-faithful-of-colonial-20100227-pa6c.html

Maybe S&G's Storm experience will be of benefit.

"Former Storm clients talkin' 'bout a resolution"

"ABOUT 500 Townsville-based Storm financial victims heard from lawyers at Rydges South Bank yesterday, who outlined a Commonwealth Bank resolution scheme offer designed to save clients drawn-out court battles."

More by Nathan Paull in the Townsville Bulletin here;

http://www.townsvillebulletin.com.au/article/2010/02/27/118785_news.html

specialed said:

Finally, I didnt know I had a comment withdrawn by the moderator. It surprises me that I did not receive an email so at least I know when I crossed a line. Can you tell me what specifically I wrote that was removed ?

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That's the problem with your kind - you never have the gumption to realise when you're 'crossing the line'.
You didn't have a comment removed, you had an entire post removed. Yes, I could tell you what it was, but I won't - do your own detective work if you wish to find out what was removed and why.

Talking of 'crossing the line' - some of your recent posts have also crossed the line. I'd tread very carefully from now on if I were you, otherwise you just might find yourself looking for another forum to join.