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I wish I'd stop reading the word 'victims' in this thread. They were people looking for profit, took a punt with some of their own money and a hell of a lot of the banks monies, and lost the lot.
Storm Financial Group
- Thread starter Garpal Gumnut
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Garpal Gumnut
Ross Island Hotel
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Many did as you say, many didn't, it caused a fair bit of anguish to the battlers caught out by Storm's spin and scheme to be described as greedy.
So I myself on my posts elected to not call them mugs, greedy etc., as many were genuinely not ignorant nor greedy, but just caught out by some very smart rich people who knew how to scam people out of their hard earned money.
In Townsville, as well, there was a fair bit of word of mouth referrals and this caused families to split and workmates to fall out depending on when they got dragged into the scam.
They even fed the poor bastards oxygen to keep them perky.
I think they were victims. We are all greedy in one way or another.
gg
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"Storm clients accuse CBA of legal breaches
Bank to defend claims"
"Former clients of Storm Financial have released their statement of claim against CBA, which includes a number of damaging allegations."
....accuse the CBA & CGI of breaching at least five sections of the Corporations Act.
More by Kate Kachor in Investor Daily here;
http://www.investordaily.com.au/cps/rde/xchg/id/style/9571.htm
Bank to defend claims"
"Former clients of Storm Financial have released their statement of claim against CBA, which includes a number of damaging allegations."
....accuse the CBA & CGI of breaching at least five sections of the Corporations Act.
More by Kate Kachor in Investor Daily here;
http://www.investordaily.com.au/cps/rde/xchg/id/style/9571.htm
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"Storm Financial class action against CBA"
"THE actions of the Commonwealth Bank in the Storm Financial debacle are to be tested in court after Sydney law firm Levitt and Robinson filed a class action yesterday alleging the bank breached corporations laws by operating an unregistered managed investment scheme."
More by Tony Raggatt in the Townsville Bulletin here;
http://www.townsvillebulletin.com.au/article/2010/07/03/151271_news.html
"THE actions of the Commonwealth Bank in the Storm Financial debacle are to be tested in court after Sydney law firm Levitt and Robinson filed a class action yesterday alleging the bank breached corporations laws by operating an unregistered managed investment scheme."
More by Tony Raggatt in the Townsville Bulletin here;
http://www.townsvillebulletin.com.au/article/2010/07/03/151271_news.html
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gg, after seeing what my mate was wanting to draw down from his structure I wouldn't call him greedy either, I'd call it a very modest existence.
Also regarding the recent actions regarding the statement of claim against CBA, it makes me wonder what evidence is at hand. I've never spoken to Sgt Sean but I did observe him being questioned at Harry's. He appeared to me to present very well, methodical, deliberate and sure.
This make me believe that he wouldn't be taking this action if it wasn't backed by substance. Surely his training as a scientific officer would be standing by him. Makes we wonder what other evidence he could have in back of the Hi-Lux.
As I've learned in life it's always better not to upset coppers. It never is beneficial, it's a bit like trying to argue your way out of a speeding ticket on the M1 with Traffic Branch by claiming that the accelerator stuck in the Crown. It's better to just pull over when you seen the flashing lights of the red XR6 Highway Patrol car in the rear-vision mirror and cop it sweet, the watchhouse can be a cold and lonely place..
Garpal Gumnut
Ross Island Hotel
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Sorry MLC , not Nat Mut, but all those creeps in their Kingswoods looked the same calling in at 730pm to flog useless life insurance to young kids starting out.
You sound like an ok bloke irish, look after the lost.
gg
Take your point poverty, but many of these people were sold the impossible dream and can't be held entirely responsible. Some I have dealt with are very simple folk who trusted a very smooth operator with a silver tongue.
I totally agreee that there are also many who frankly should have known better and for them I hold no sympathy.
Julia
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Irish Joe, I don't know anyone who is so utterly 'simple' that they wouldn't appreciate that borrowing against their home to buy something that often falls in value is risky.
Then to further take out a margin loan over the shares bought by that borrowed money was imo pure madness for retirees.
Then to further take out a margin loan over the shares bought by that borrowed money was imo pure madness for retirees.
I agree on the madness piece but believe me there are people out there who based their actions purely on trust and trust alone. They were referred to storm by family and friends. I am talking about people who had a combined education of grade 10 and the old scholarship(gr 8) and subsequently a household income sub 30k. For heavens sake some of them can hardly spell!!. They were only contacted because an old endowment policy matured. They literally had no idea what they were entering in to.
As I stated before there are many who were greedy and deserve no sympathy but equally there are also many who were genuinley duped by slick salesmanship dessed up as advice. These people need help to get the best outcome possible
Julia
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Given some of the woeful spelling on this very forum, that's no indication of financial acumen. I know plenty of people with minimal education who nevertheless have an adequate measure of common sense.
Are you telling me they had no idea they were borrowing money with their family home as surety?
They knew they were borrowing against their home, but the real inherent risk was not explained hence my previous comments about the quality of the advice.
Julia I have read every single one of your posts in this forum and am aware of your loss at the hands of a charletain ( forgive spellin) however i have not had the pleasure of meeting you so cannot comment on your financial acumen or indeed your intelligence. On my observance I would speculate that you have an above average intelligence and have educated yourself in the financial spectrum. Unless however you are at the coalface in terms of dealing with people who have been devasated by this whole debacle I think it is dangerous to make assumptions about the financial acumen of the Affected( would have said victims but refrained out of respect for "poverty"
I also rejected a spellcheck
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"A Greek rich man lost the money of 14000 investors"
"Little has been seen of the couple since early last year when Cassimatis promised in a media release he would continue a ”crusade” for justice for his clients ”until my dying breath”."
Posted by Anny Tzotzadini on Greek Reporter here;
http://au.greekreporter.com/2010/07/04/a-greek-rich-man-lost-the-money-of-14000-investors/
"Little has been seen of the couple since early last year when Cassimatis promised in a media release he would continue a ”crusade” for justice for his clients ”until my dying breath”."
Posted by Anny Tzotzadini on Greek Reporter here;
http://au.greekreporter.com/2010/07/04/a-greek-rich-man-lost-the-money-of-14000-investors/
It appears that many of those who WERE NOT clients of storm, or suffered a loss in this mess have often taken to describing the clients as one of two distinct groups, those who were "simple" and really did not have a good comprehension of what they were undertaking. For these people Storm in particular needs to be bought to account, as at very simplistic level it would there advice to these clients was as least immoral, probably dishonest and possibly illegal.
The other group seem to typically be described as "greedy" and looking for a quick lottery win. This is despite many being long term investors with storm or with the planners who took up with them. I find this description also very simplistic. These investors analysed the model and made informed decisions. Implicit in this decision making was their understanding of the use of the margin call as a stop loss mechanism. There can be endless debate hear (and rightly so) as to the use of this as a risk protection measure. The fact is however that it is these clients who appear to feel that the blame is shared between the CBA and Storm (predominately by the CBA). An example, might be Sean McCardle. He does not strike me as a man driven by greed, nor does he strike me as simple. However, he does strike me a s someone who was anticipating a course of action to be undertaken when the market took a major dive. He understood, or thought he understood what he could expect contractually, as well as his own contractual obligations. This is the issue of the Margin call, and this appears to lie firmly at the foot of CGI and the CBA. Let the courts decide if the McCardle’s and others beliefs about their contracts is true.
This forum is a great place to discuss the merits of the storm model, but to attempt to describe the personality types and characteristics of the storm investor it is not. This is just presumptuous, and as I have often read hear, offensive. Maybe the personality analyses should be left to the psyc’s....
Well said! I'm sure I'm not the only one who has mostly stopped posting on this forum recently due to a disinclination to continue beating my head against a solid wall of condescension and accusations of greed and/or immorality for seeking any form of compensation.
I do sometimes wonder why some posters, who clearly have very rigid views on what methods of wealth accumulation are acceptable and which are foolish and irresponsible (those would be the ones they don't consider prudent), bother to continue to post on this thread. Some (Julia for instance) have clearly made up their minds as to what ex-storm clients deserve and nothing, not even an admission of partial responsibility from one of the banks involved, will convince them that any compensation should be paid to such undeserving foolish/greedy people. This is despite having any first-hand knowledge of any dealings between client/advisor/banker.
I'm also continually annoyed by the desire of several posters to lump all ex-storm investors into one generic "type". As there were several thousand, it would be expected that individual goals, motives, understanding and financial acumen or otherwise would vary greatly. Some are no doubt quite "simple" and some were no doubt "greedy", - but I know there is a diverse range of ex-storm clients with many differing backgrounds and dealings with storm and their bank. There is no "one size fits all" and the desire of the media, sections of the community and quite a few posters on this thread to persist in this assumption is bloody frustrating!
The repetition gets a bit boring after a while as well
Julia
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Sorry, but I just don't get how anyone can think they can buy something on the basis of a loan against their home and not consider that there is any risk.
I am not at all imagining that every Storm client had similar levels of financial or other education, or similar motives.
I'm simply saying they engaged in a risky strategy.
Dock, you yourself have said this about your own involvement with Storm.
It's just less palatable if someone else says it, apparently.
And no, I have never said that gearing for investments is a bad wealth policy. I have just said that's not one which is appropriate for retirees who apply their entire asset base to such a strategy. So please don't twist what I have and have not said.
I'm very sorry for all the people who were burned by Storm. Many of them seem like thoroughly decent folk. But - like poverty - I'm a bit tired of hearing them described as victims.
And Dock, I will continue to post in this thread if I want to (unless Joe suggests otherwise). It's not just a thread for those who feel aggrieved - it's a discussion forumwhich means an alternate point of view may be expressed.
Even if I'd not spent the years educating myself financially (and still having a lot to learn), I'd have recognised that taking out a loan against my home to buy shares was to be taking a risk. That is all I am saying.
I have not suggested that every Storm investor is a bad and greedy person.
And, fyi, Irish Joe, I've spent some 15 years working as a volunteer with people who have minimal education and life skills, so I'd appreciate not being labelled as someone with no experience of those dissimilar to myself.
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DoK I agree wholeheartedly with your comments, well said.
Most contributors to this forum have too many bank shares and worried about their future earnings to be truly bothered about the fact that this storm debacle has caused one major point to become apparent.
Whether the banks are proved culpable or not the fact remains that storm was a registered financial institution. One would think that you could go to these people for genuine financial advice.
Financial planners are not to be trusted in the same way as other professionals.
Storm Financial has proved this without a shadow of doubt or something would be done about it, nothing is.
Most contributors to this forum have too many bank shares and worried about their future earnings to be truly bothered about the fact that this storm debacle has caused one major point to become apparent.
Whether the banks are proved culpable or not the fact remains that storm was a registered financial institution. One would think that you could go to these people for genuine financial advice.
Financial planners are not to be trusted in the same way as other professionals.
Storm Financial has proved this without a shadow of doubt or something would be done about it, nothing is.
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They may have believed that there were adequate safeguards in place to protect their home - I've read many an SOA in my time and some of them can be ridiculously long, complex and convoluted which would give a lay person the impression there was strong scientific/calculated approach to the advise that was being given (not just a few percentage figures plugged into an overpriced piece of software)
Given the natural human adherance to people in positions of authority, I'm not willing to deride the people who were caught up in the Storm fiasco with a "serves them right" attitude; should some have known better? Yes absolutely, but treating them all with a lack of compassion isn't particularly helpful.
Julia,
I dont think all of the investors believed the were entering into a risk free scheme. However, they believed the risk associated with the margin loans (coupled with the margin call if used as they believed it would be) was worth the return.
For many it proved an effective way to enter into retiremtn and was used over was over a considerable period of time. Im sure not all investors thought this but many did, hence the issue with the margin call. Inherent in the choice of any strategy, and albeit the associated risk is the ability to manage and control what is happening. For storm investors (at least those who understood the model and risk) taking away their ability to deal with the margin call lies at the heart of this matter.
As I stated early, this forum is a great place for reflecting on the storm model. But how can it be analysed properly if a key apect of it, the activation of the margin call TO the investor was not carried out. Had it been this would forum would merely be discussing the merits of a model that saw thousands of investors have to make margin calls at a very late stage because of the high LVR rather then being desimated at the hands of the CBA.
Has it been asked why if this strategy was such a great way to earn extra returns why wasn't it used in a widespread manner throughtout the financial planning industry. It's not like it is a hard strategy to replicate and 7% fees sure sounds sweet. I have little to no respect for the investment skills of financial planners and yet most realise strategy like this are guarateed to blow up their clients.
