Julia, I appoligise for repeating the above message but my computer decided to blow up before I had finished editing.
Julia,
Ammended message below
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 retirement and was used over a considerable period of time. Im sure not all investors now think this however 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 decisions regarding margins at a very late stage because of the high LVR (maybe to high). It may also be discussing the investors who were sold the idea of a margin call but not given advice as to how to maintain a pool of funds to meet it, if it came. The storm investment model would probably be analysed around this high LVR and not much else, and also the ability of investors to meet it. Rather the discussion is now for many, who made the call, when and to whom, What were the contractual obligations of all the parties and were these carried out.
The issue for the courts is not whether the investor could have met the call if they recieved it. It is in determining if the contract was broken in not issueing the client directly with the call in the first place. Everything after this is speculation and this was supported in the recent Macquarie decision.
This lies at the heart of my personnal frustration with ASIC, if they were doing their job effectiely, and efficiently in terms of their investigation then there may not be a need for the victims to seek legal advice or seek a legal remedy as ASIC would be doing this for them in a timely manner. There would be nothing fo the vultures to feed on. Even slater and gordon have stated that they investigated the prospect of a class action but decided on the resoultion process instead as a more timely and efficient matter. I dont think they minded the headlins at the time about a "ground breaking new process". I dont recall them stating publicly that they didnt feel a class action would win, just that the resolution process was more timely.
If there is no fault in what the CBA have done then so be it, let them payout victims as part of a resolution scheme just for the fun it. If there is an issue that ASIC are aware of with regards to anyone then this needs to be bought into the public forum. This way current investors and clients / customers (of the CBA inparticular) are aware of what has gone on, can make their own judgement and then make informed decisions about whether to continue using this company. To me this is beginning to reak of "the banks are to big to fail". For ASIC to seek a "commercial resolution" may ?? help the current investors but does little to expose the practices the required a "commercial resolution". This resolution is surely not about getting anything from storm, they are insolvent, so ask yourself who possibly could this commercial agreement pertain to...... CBA, BOQ, Macquarie.... Either ASIC has something and should be disclosing it or they have nothing in which case this should also be made public. The shroud of secrecy is doing nothing for their credability, nor the banks for that matter.
Julia,
Ammended message below
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 retirement and was used over a considerable period of time. Im sure not all investors now think this however 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 decisions regarding margins at a very late stage because of the high LVR (maybe to high). It may also be discussing the investors who were sold the idea of a margin call but not given advice as to how to maintain a pool of funds to meet it, if it came. The storm investment model would probably be analysed around this high LVR and not much else, and also the ability of investors to meet it. Rather the discussion is now for many, who made the call, when and to whom, What were the contractual obligations of all the parties and were these carried out.
The issue for the courts is not whether the investor could have met the call if they recieved it. It is in determining if the contract was broken in not issueing the client directly with the call in the first place. Everything after this is speculation and this was supported in the recent Macquarie decision.
This lies at the heart of my personnal frustration with ASIC, if they were doing their job effectiely, and efficiently in terms of their investigation then there may not be a need for the victims to seek legal advice or seek a legal remedy as ASIC would be doing this for them in a timely manner. There would be nothing fo the vultures to feed on. Even slater and gordon have stated that they investigated the prospect of a class action but decided on the resoultion process instead as a more timely and efficient matter. I dont think they minded the headlins at the time about a "ground breaking new process". I dont recall them stating publicly that they didnt feel a class action would win, just that the resolution process was more timely.
If there is no fault in what the CBA have done then so be it, let them payout victims as part of a resolution scheme just for the fun it. If there is an issue that ASIC are aware of with regards to anyone then this needs to be bought into the public forum. This way current investors and clients / customers (of the CBA inparticular) are aware of what has gone on, can make their own judgement and then make informed decisions about whether to continue using this company. To me this is beginning to reak of "the banks are to big to fail". For ASIC to seek a "commercial resolution" may ?? help the current investors but does little to expose the practices the required a "commercial resolution". This resolution is surely not about getting anything from storm, they are insolvent, so ask yourself who possibly could this commercial agreement pertain to...... CBA, BOQ, Macquarie.... Either ASIC has something and should be disclosing it or they have nothing in which case this should also be made public. The shroud of secrecy is doing nothing for their credability, nor the banks for that matter.
