Bunyip,
I can only speak for my own family, and we would like to see justice, and only justice.
I also believe that justice is what many of the former storm clients we've met, who've had dealings with some of the biggest, and who we thought were the most trustworthy, banks in Australia.
We've never expected anyone to pay our way through life. Like many former storm clients we've met since this all went down the tube, we were all just trying to make sure that we could retire with no monetary worries, and at no burden to the Australian taxpayers of the future.
I am being very careful of what I say here. I have to be that way because one of the biggest banks in Australia is holding my family to ransom right now, and I have a further fight with another of their ilk in the future.
We have to do exactly what they say, or suffer their full wrath.
They have more money than us, (their shareholders, so they are not gambling with their own money!), they are more powerful than us, what would you advise us to do?
We 'stormers' as you call us, have been taken to the wall, financially, emotionally, physically, (health wise), and not neccessarily in that order. We live on a rollercoaster, we never know from one day to the next what will be asked or expected of us.
Do you really believe that the majority of us would have put ourselves through of all this anguish if we had not been duped by storm and the banks, and that we felt that we had not been TRULY represented by those who we trusted?
Sure, even I have to admit that there were Storm clients who were already financially secure, and yes, they were greedy to want more than they needed to fund a secure retirement.
But, Bunyip, those clients are a very small minority in the scheme of things.
Please try to look at the bigger picture.
I don't want, and never expected, to find myself in the position where YOU were funding MY retirement. I thought I had that base covered.
In fighting for my family to get justice from the banks, I am also fighting for YOU so that you don't have to pay for my/our retirement.
MS
Mindstorm
I'd be wanting justice too if I felt that somebody had done the wrong thing by me and caused me to lose a lot of money.
But justice is only good if it's dealt out to the right people.
Whenever there's talk of justice for Storm causalities, it invariably seems to be centred around taking action against the banks.
I'm no apologist for the banks, nor am I naive enough to claim they're blameless. But I cannot see that they're the main reason why Storm clients were wiped out. Therefore I feel they shouldn't be copping all the blame or bearing the brunt of the legal action to get justice for former Storm clients.
Here are a couple of criticisms that I've seen repeatedly levelled at the banks in relation to their dealings with Storm Financial clients......
1.
The banks shouldn't have lent us so much money.
Well OK, perhaps they shouldn't have. But like all businesses, banks have a product to sell, and that product is loans. The more product they sell, the more profit they make, just like any other business.
If I approach a furniture shop to buy a new dining room suite, and they end up talking me into a time payment plan that allows me to buy a new lounge suite and a new bedroom suite as well, plus a couple of grands worth of outdoor furniture for my entertainment area, whose fault is that? Can I blame them for selling me more product than I really wanted or could reasonably afford? Or should I blame myself for recklessly purchasing so much furniture that I'll be battling to pay it off?
If Storm clients or their representative applied for a bank loan, and figures were provided to the bank to show how the loan commitments would be met, have the bank really done anything wrong in granting the loan?
If the bank falsified figures such as the clients income or house valuation, then certainly the bank is guilty of immoral and illegal conduct, and should be brought to account.
But I've never seen any Storm client who can provide evidence of a bank falsifying figures on loan applications. Without evidence, how can the bank be seen as guilty?
2.
The banks sold down our investments near the bottom of the market.
The bank shut down the fund we were invested in.
OK - I can well imagine the shock and anger you'd feel if your investment was sold out from under you, particularly if you weren't even in margin call and had never defaulted on your loan commitments.
But here again, we need to ask if the bank had good reasons for taking this action, and if they were legally entitled to do so.
In regard to the funds that were closed down - I'd be pretty sure that under the terms and conditions of the funds, the banks were legally entitled to close the funds at their discretion.
With regard to margin calls, many Storm clients have stated that nobody told them they were in margin call.
The banks claim they told Storm when clients were in margin call, and that Storm failed to pass this information on to their clients.
A few months ago on this thread, someone posted a copy of a bank document on margin loans - as I recall, the document clearly stated that it was the clients responsibility to monitor their investments to ensure that they didn't go into margin call, and if they did go into margin call, to deposit funds into their accounts within a defined time to cover the margin call. Otherwise the bank would exercise its right to sell down the investment.
This appears to be what happened. Accounts went into margin call, margin calls were not met because clients were not told about them, and had not monitored their situations themselves to know when a margin call was imminent. So the banks sold down the investments to protect themselves from further downside risk.
Here again, the question is whether this action was fair and reasonable by the banks, and was it legal? As near as I can tell from the copy of the loan documents I've seen, it appears that the banks were well within their rights to sell down the investments if they were in margin call that hadn't been met.
I can't claim to know the exact details of the dealings and the agreements between Storm clients and banks. I'm happy to concede that some of what I've said above may not be entirely correct. I can only offer an opinion based on the information I've seen so far.
One thing I do know with certainty, however, is that if you invest in any business, as the owner of that business you have significant responsibility to make sure you know something about the business, and to ensure you keep yourself updated with developments in your business. This holds true regardless of whether you manage the business yourself, or employ a manager to run it for you.
Employing a manger does not absolve the business owner from the responsibility of keeping his finger on the pulse, particularly in regard to risk management.
Anyone who knows investment and finance will be aware that poor risk management was the primary reason for the wipe-out of Stormers portfolios.
Risk management was the responsibility of Storm Financial first and foremost - you were paying them to manage your business, after all.
Secondly, risk management was the responsibility you, the owner of the business. Part of risk management involved, or at least should have involved, keeping a very close eye on your manager to make sure he was doing the job you were paying him for.
I owned and managed a grazing property in western Queensland. One of my neighbours was a fifty thousand acre property that employed a manager.
The owners of the property flew out from Brisbane once a month to check up on the manager and make sure he was running the property to their satisfaction. Had he let their livestock start dying in a drought, or in some other way mismanaged their business and started losing them money, there's no doubt that they would have over-ruled his management decisions, or probably even fired him.
The problems of Storm clients began when their business manager, Storm Financial, allowed their business to be decimated once the global financial meltdown set in.
Storm could have taken action to protect their clients from catastrophic downside risk. For whatever reason, they failed to do so. Clients themselves also failed to do so.
Practically no risk management during a major stockmarket crash and economic meltdown = wipe-out for Storm clients.
For that, I don't think the bulk of the blame can be levelled at the banks.
If the pursuit of justice rather than money is really what motivates Storm clients to continue the fight, then I'd say you should have the principals of Storm Financial squarely in your sights, rather than the banks.
If the banks can be proven to have done anything illegal, then they should definitely be pursued for compensation. But the bulk of the blame clearly does not belong to the banks.