Storm Financial Group

[Igetit]

So the client gets to keep their profits from when the UMIS made them money (because they would have earned that money had they been in a RMIS), but they don't suffer the losses because it is a UMIS? They also then get to claim for a lost opportunity for not being in the market since November 2008? So they get the best of both worlds....ride the tails of the bull market, get to keep their profits, enjoy the types of holidays and the like that most only dream of, and then recover their losses because they were in a UMIS? And whats more, they can make a claim because the market went up and they weren't in it?

How do I invest in one of these UMIS? Money for jam if you ask me....high returns, no risk.



Are you not playing a guessing game with the previous quote above?

"they would not, therefore, be required to refund any earnings, as those earnings will be treated as the earnings they would have received had the Investment Scheme been registered and legal). "

Isn't that a guess? Perhaps a registered scheme would have lost money over the period, or certainly not made as much if gearing wasn't used. Lucky bastards....get the good part of the gearing strategy with the profits, and miss out on the bad stuff.

"with a further calculation to be made for lost opportunity as a result of being denied access to the markets since Nov, Dec 2008 to the present."

Isn't that a guess- so what opportunity did they miss- how would their money have been invested, would they have stayed invested? what if they did this? What if they did that? Pure guesswork. If they are compensated for the losses leading up to late 2008, they get a second bit because they weren't in the market after that? Nice work.

So how can they have it both ways? How can the clients benefit from the UMIS in the good times by getting to retain their profits, and yet they get to claim back everything they lost when the UMIS goes bad?

Again, where can I invest in one of these things?

Hi SJG 1974,

Now, that's certainly a lot of commentary and questions. I can understand your consternation. However, to deal with the latter half of your thread first. You do have to acknowledge that as a result of their unwitting participation in a scheme that ultimately resulted in the loss of their entire asset base, Storm victims were left unable to reparticipate in the market during its recovery (commencing April 2009). You do have to understand and accept that this constitutes a "loss of opportunity". There are means by which these losses are calculated that are acceptable to the Court. The figures determined will not be "guesses" - just trust me. Too long to explain.

In my view, YES I DO THINK IT IS FAIR, that this constitutes part of the assessment of damage. But, even more importantly, so does the Court.

With respect to your other burning gripe:"How can the clients of the UMIS benefit during the good times by getting to keep their profits, and yet they get to claim back everything they lost when the UMIS goes bad?"

The short answer is, because that is what the law allows for. To expand just a little. They, understandably, would be allowed to retain any profits they made - because those profits (dividends and distributions) were reinvested through the purchase of additional units within the UMIS umbrella. This is likely to be the same approach that would have been adopted by these investors within a RMIS.

With respect to the losses. These would be reflected through a drop in the unit price of the particular index (s) held within the portfolio. In the majority of situations within a RMIS, these would be paper losses, as it is unlikely clients in a RMIS would have had a margin loan account with an allowable LVR greater than 90%.

This begins to get quite technical now and I am not sure how much benefit any explanation I offer at this stage is going to soothe your angst. The Court will now begin to deal with these questions. The formulae for the calculations exist and will be applied.

Rest assured a fair outcome will be achieved. The compensation may be more than it appears you would be happy with. However, had you been in the UMIS - as you seem to think would have been a good thing - ask yourself what you consider would be fair compensation for you and your family. Having sunk everything you had worked for into what turns out to be an illegitimate scheme. I know, I know....You would never have done that. But that is not the question I put to you.

Finally - and I know you mean no harm; but this is not a trivial matter. A man has taken his own life, so overwhelmed was he by what has taken place. Many others, and I know them, have considered this path. This is a tragedy.

You would not wish to be a party to a UMIS. This or any other. You would not wish to be living the lives that many of these elderly Australians are currently living. This is NOT a great lark. There is nothing amusing about what has happened here.

Anything these people receive back in compensation for what has been done to them, will never be enough.

 

[maccka]

Dear SJG,

I am going to try to keep emotion out of this (however I strongly suspect I may fail).

Lucky bastards....get the good part of the gearing strategy with the profits, and miss out on the bad stuff.

Even if the UMIS case is found in favour of Storm clients and there is some/any remuneration ...
My parents have lost their retirement.
One family member is losing his vision as a result of stress.
Friends of ours have lost their homes and farms and marriages have been destroyed.
Other friends have had strokes, heart attacks.

My family have lost a precious family member. He'll never be around again. He won't see his children graduate and marry; won't see grandchildren. He won't celebrate anything ever again with our loving family and he died before his mother who was in her late 80s. Stopping now as I am getting emotional and I need to keep this on topic.

I don't think Stormers are lucky bastards and I absolutely don't think they've missed out on the bad stuff.

Maccka

 

[Igetit]

Dear SJG,

I am going to try to keep emotion out of this (however I strongly suspect I may fail).



Even if the UMIS case is found in favour of Storm clients and there is some/any remuneration ...
My parents have lost their retirement.
One family member is losing his vision as a result of stress.
Friends of ours have lost their homes and farms and marriages have been destroyed.
Other friends have had strokes, heart attacks.

My family have lost a precious family member. He'll never be around again. He won't see his children graduate and marry; won't see grandchildren. He won't celebrate anything ever again with our loving family and he died before his mother who was in her late 80s. Stopping now as I am getting emotional and I need to keep this on topic.

I don't think Stormers are lucky bastards and I absolutely don't think they've missed out on the bad stuff.

Maccka

The meek shall inherit the earth. It will never be OK Maccka; but it will get a lot better.

 

[Julia]

So the client gets to keep their profits from when the UMIS made them money (because they would have earned that money had they been in a RMIS), but they don't suffer the losses because it is a UMIS? They also then get to claim for a lost opportunity for not being in the market since November 2008? So they get the best of both worlds....ride the tails of the bull market, get to keep their profits, enjoy the types of holidays and the like that most only dream of, and then recover their losses because they were in a UMIS? And whats more, they can make a claim because the market went up and they weren't in it?

How do I invest in one of these UMIS? Money for jam if you ask me....high returns, no risk.

+1.
It's pretty much like the much larger game being played on world markets where the investment banks, the authors of many of the shonky CDOs and CDSs, got to privatise the profits and nationalise the losses.
Moral hazard at its best.

So how can they have it both ways? How can the clients benefit from the UMIS in the good times by getting to retain their profits, and yet they get to claim back everything they lost when the UMIS goes bad?

As above. The global example has already been set. Never mind that as a result many European nations are bankrupt as essentially is the US. It's all good so long as someone will pick up the tab.
But eventually, as we are currently seeing, the squawking chickens have nowhere to go but home to roost.

Hi SJG 1974,

Now, that's certainly a lot of commentary and questions. I can understand your consternation. However, to deal with the latter half of your thread first. You do have to acknowledge that as a result of their unwitting participation in a scheme that ultimately resulted in the loss of their entire asset base,

Um, "unwitting participation"??? How does anyone unwittingly participate in anything, especially if it concerns the provision of their life savings and/or their own home as collateral? You simply cannot unwittingly participate if you agree to provide your home as collateral.

Storm victims were left unable to reparticipate in the market during its recovery (commencing April 2009). You do have to understand and accept that this constitutes a "loss of opportunity".

OK. But why doesn't the same principle apply to anyone invested in e.g. Vanguard if they also remained in the market and did not withdraw their funds as the GFC became impossible to ignore? Do you think these investors should also be compensated?

You would not wish to be living the lives that many of these elderly Australians are currently living. This is NOT a great lark. There is nothing amusing about what has happened here.

You've overall been very polite and reasonable in the way you have presented your argument. Until the above paragraph. Absolutely nowhere that I have seen has SJG suggested there is anything remotely amusing about anyone's life being turned upside down by the loss of a significant amount of money, regardless of that person's responsibility or otherwise in such a loss.

 

[SJG1974]

Dear SJG,

I am going to try to keep emotion out of this (however I strongly suspect I may fail).



Even if the UMIS case is found in favour of Storm clients and there is some/any remuneration ...
My parents have lost their retirement.
One family member is losing his vision as a result of stress.
Friends of ours have lost their homes and farms and marriages have been destroyed.
Other friends have had strokes, heart attacks.

My family have lost a precious family member. He'll never be around again. He won't see his children graduate and marry; won't see grandchildren. He won't celebrate anything ever again with our loving family and he died before his mother who was in her late 80s. Stopping now as I am getting emotional and I need to keep this on topic.

I don't think Stormers are lucky bastards and I absolutely don't think they've missed out on the bad stuff.

Maccka

Apologies Maccka and to others- that was a flippant remark not meant to offend. Should not have gone there and was obviously ignoring the personal side of things and focusing on the financial with my remark. Poor form on my part.

Again apologies.


And Igetit,

I am not against compensation. And I am not treating this as a lark, and I certainly don't think there is anything funny about this. No matter how much my views or opinions may differ from your and others', including those here who are victims of Storm, I feel sorry for them, becuase they have been sold up the river. I wouldn't wish that upon anyone. And I am frankly disappointed that after all of our dialogue you would think that I would be treating this as a laugh.

I have no agendas, I am not on anyone's side. I am just an outsider looking in on this whole mess. I have my opinions like everyone does. I feel sorry for the clients, but I also feel that having taken a risk, a big risk by doing what they have done, that they need to accept some of the consequences of the choice they made.

You may say they were poor defenceless retirees, but that doesn't wash with me. They had a choice to go with Storm or not- and plenty didn't...if they chose to believe what a salesman told them without getting a second opinion or properly understanding the risks involved, then quite frankly they weren't giving their life savings the respect they deserved in my opinion. Others did and walked away.

As a result, I believe getting compensated fully because the scheme was unregistered is just wrong. The law may say otherwise, but thats my view, and I know its different to yours, and probably everyone else's around here. But I am sticking with it. It would be pretty boring around here if we all agreed on everything!

 

[maccka]

Apologies Maccka and to others- that was a flippant remark not meant to offend. Should not have gone there and was obviously ignoring the personal side of things and focusing on the financial with my remark. Poor form on my part.

Again apologies.

Thank you SJG. I appreciate your apologies. There are so many concepts tied up in this sorry mess that it is easy to focus on one concept or idea and not on others. You recognized that quickly and were big enough to say so in a public forum.

Thank you for your apology SJG.

 

[Igetit]

+1.
It's pretty much like the much larger game being played on world markets where the investment banks, the authors of many of the shonky CDOs and CDSs, got to privatise the profits and nationalise the losses.
Moral hazard at its best.


As above. The global example has already been set. Never mind that as a result many European nations are bankrupt as essentially is the US. It's all good so long as someone will pick up the tab.
But eventually, as we are currently seeing, the squawking chickens have nowhere to go but home to roost.


Um, "unwitting participation"??? How does anyone unwittingly participate in anything, especially if it concerns the provision of their life savings and/or their own home as collateral? You simply cannot unwittingly participate if you agree to provide your home as collateral.

OK. But why doesn't the same principle apply to anyone invested in e.g. Vanguard if they also remained in the market and did not withdraw their funds as the GFC became impossible to ignore? Do you think these investors should also be compensated?


You've overall been very polite and reasonable in the way you have presented your argument. Until the above paragraph. Absolutely nowhere that I have seen has SJG suggested there is anything remotely amusing about anyone's life being turned upside down by the loss of a significant amount of money, regardless of that person's responsibility or otherwise in such a loss.

Hi Julia,

"WHERE DO I SIGN UP; .....MONEY FOR JAM".

Review and have another moment of reflection. What exactly was he implying then?
Lots and lots of people would like to know.

With respect to Vanguard investors - they should review their own situation and see what recourse they have. Was VANGUARD involved in an UMIS with a third party? I am not sure where you are going with this.

You do appreciate that the two situations are somewhat different? Right? Earth to Julia - come in! The comparison you seem to be making will leave many here scratching their heads. You perhaps don't getit just yet. You will. Vanguard - and its allies - are not in the dock. The relevant BANKS, however, are preparing their defences. Really and truly, you need to take a breath and have a look at what is going on (some call it a reality check). The dogs have barked and the caravans have moved on. So should you. Please no more: "you should have known, you should have understood" - stuff. Variations on the one theme that we are all so weary of. The focus may not be what you want. But it is what it is.

"You should have known Dr Patel was not a good surgeon and your husband would have died under his care. It's all your fault." Come on, Julia, really.....Give up.

After 10,000 odd posts - this is clearly a passion of yours. We wait with baited breath for each new entry. I wonder what comes next....Rhetorical - we all know! Is there anybody else out there. You know, like a substitute. ANYBODY. PLEASE!!!!! I think many of us would like Julia to "go home to roost." That's not fair. Your commentary is greatly appreciated by many. Though not all. And I suspect the "many" are in the minority.

I am waiting.....I have noticed that you have the capacity to be a little nasty in your dialogue at times and I am sure you will be offended by this response. As people who like to give it but not take it generally are.

I am looking out for the interests of many right now. You, however, well....no one will ever know what you are really on about. Sad really.

 

[Julia]

Hi Julia,

"WHERE DO I SIGN UP; .....MONEY FOR JAM".

OK. Agreed. I didn't particularly notice that and was more focused on his point about the comparison of index funds.

Review and have another moment of reflection. What exactly was he implying then?
Lots and lots of people would like to know.

As above. Don't take me to task for the comments of another poster. I thought he made an objectively realistic point. You are welcome to disagree.

With respect to Vanguard investors - they should review their own situation and see what recourse they have. Was VANGUARD involved in an UMIS with a third party? I am not sure where you are going with this.

I'm not going anywhere with it. I'm simply acknowledging that SJG made a reasonable point in his comment about other index funds.

You do appreciate that the two situations are somewhat different? Right? Earth to Julia - come in! The comparison you seem to be making will leave many here scratching their heads. You perhaps don't getit just yet.

Not sure what you believe the sarcasm is achieving.
Again, I'm not originating any 'comparisons'. Simply acknowledging point made by SJG.

The only additional comment I've made is your suggestion that people unwittingly put up their homes and/or savings as collateral. My comment in that regard stands.

. So should you. Please no more: "you should have known, you should have understood" - stuff. Variations on the one theme that we are all so weary of. The focus may not be what you want. But it is what it is.

If you don't want anyone to challenge what you write, then perhaps best not to use descriptors such as "unwittingly".

"You should have known Dr Patel was not a good surgeon and your husband would have died under his care. It's all your fault." Come on, Julia, really.....Give up.

That's a totally ridiculous analogy and you know it. To suggest a patient is in a position to judge the skill of a surgeon they may have met for the first time and to compare this with agreeing to participate in a financial scheme you don't understand is just silly.

After 10,000 odd posts - this is clearly a passion of yours. We wait with baited breath for each new entry.

I don't keep count of my or anyone else's posts. If there are 10,000 over about six or seven years, they're across a wide variety of topics. Not just Storm, for heaven's sake. The forum has an "Ignore" facility. By all means apply it to my posts.
Or if you're really upset with me, make a complaint to Joe. You have various remedies available.

I wonder what comes next....Rhetorical - we all know! Is there anybody else out there. You know, like a substitute. ANYBODY. PLEASE!!!!! I think many of us would like Julia to "go home to roost." That's not fair. Your commentary is greatly appreciated by many. Though not all. And I suspect the "many" are in the minority.

Feel quite free to dislike me as much as you wish.
I don't return the sentiment, but rather accept that you're motivated genuinely by concern for people who have been so damaged by their relationship with Storm. As such I completely appreciate that you're saying whatever you say for the best possible reasons.


I also feel for all of them, particularly those who got sucked into "just sign here and we'll fill in all the details" when presented with a complex document and a reassuring adviser. Only to later discover their details had been horribly misrepresented.

I am waiting.....I have noticed that you have the capacity to be a little nasty in your dialogue at times and I am sure you will be offended by this response. As people who like to give it but not take it generally are.

No, not at all offended. You are absolutely entitled to express your dislike of me.

I wish you well.

 

[Solly]

Civil penalty proceedings against the Cassimatises

Proceedings are being held in public so anyone interested may attend.

25 November 2011
ASIC civil penalty proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building
119 North Quay
Brisbane QLD 4000

From https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next%20Court%20Dates?opendocument

 

[doobsy]

Questions from the darkside for the believers

I have a small issue with fully compensation as well. I hope the court will treat the situation as follows:

WHAT IF: The client went to adviser #2 and they outlined the risks with the Storm strategy and how a margin call could destroy them. They however point out that if they really want to borrow against their homes, there are legal simple geared share funds available.

So the client could still rip out the equity from the home and put it in say the Colonial Geared Aust Share fund which has internal gearing of around 50% but which they manage internally.

The client would never have gone through the margin call fiasco but at the same time would be down around 60% (markets down 40% + 50% gearing on this) on their original capital invested.

To me the storm clients should be put back at a maximum to a situation like this.

I look forward to being shot down in flames for daring to say people did deserve to lose some of their money the same as everyone that stepped out of cash / fixed interest leading up to the crisis did. Again with the analogy "they took the punt".

I know there was more to it than most understood but not a SINGLE storm client did not know they were invested in Australian shares. NOT ONE!!!! Therefore they should at least wear the same loss as every other Aussie share investor.

 

[SJG1974]

"You should have known Dr Patel was not a good surgeon and your husband would have died under his care. It's all your fault." Come on, Julia, really.....Give up.

That is ridiculous Igetit, it really is. And surely you know it is.

Storm quoted something like 8 out of every 10 people that attended their seminars and meetings walked away. Were they just lucky? Or did they give thier life savings the respect they deserved and actually look into the grandiose claims that the Storm salesmen made and decide the risk was too much to bear? People had a choice- they knew they were borrowing against their house, they knew they were margin lending, they knew they were investing in shares. They SHOULD have known the risks....some people did and walked away...the Others???? I guess ignorance can be used as a defence in yours and others' eyes.

I guess thats society now isn't it- people don't take responsibility for their own decisions and its always 100% someone else's fault.

With each post you become more and more condescending. This is a public forum where people get to speak freely and voice their opinions. No need to belittle others based on their views. Poor form.

People don't have to agree with everything you say. You speak from a position of authority, yet no-one knows who you are or what your involvement in all of this is. We certainly know you have an agenda against the banks. That much is certain. You seem to know all the facts. You seem to have all the inside knowledge, and good for you. You seem to know the laws the banks have broken and the compensation that will be claimed. You are obviously very close to this, and you have the blinkers on. If it was all so straight forward, then the banks would have conceeded by now and the Storm victims would have received their money back.

I am sure if we had someone from the bank here arguing their defence, he would come up with good arguements why it isn't an unregistered MIS. So who is right?

Perhaps we should let the courts decide? And the last time I looked, this forum wasn't a courtroom.

But give up on belittling others who don't share your opinion on things. Its petty.

 

[Igetit]

OK. Agreed. I didn't particularly notice that and was more focused on his point about the comparison of index funds.


As above. Don't take me to task for the comments of another poster. I thought he made an objectively realistic point. You are welcome to disagree.


I'm not going anywhere with it. I'm simply acknowledging that SJG made a reasonable point in his comment about other index funds.


Not sure what you believe the sarcasm is achieving.
Again, I'm not originating any 'comparisons'. Simply acknowledging point made by SJG.

The only additional comment I've made is your suggestion that people unwittingly put up their homes and/or savings as collateral. My comment in that regard stands.


If you don't want anyone to challenge what you write, then perhaps best not to use descriptors such as "unwittingly".


That's a totally ridiculous analogy and you know it. To suggest a patient is in a position to judge the skill of a surgeon they may have met for the first time and to compare this with agreeing to participate in a financial scheme you don't understand is just silly.


I don't keep count of my or anyone else's posts. If there are 10,000 over about six or seven years, they're across a wide variety of topics. Not just Storm, for heaven's sake. The forum has an "Ignore" facility. By all means apply it to my posts.
Or if you're really upset with me, make a complaint to Joe. You have various remedies available.


Feel quite free to dislike me as much as you wish.
I don't return the sentiment, but rather accept that you're motivated genuinely by concern for people who have been so damaged by their relationship with Storm. As such I completely appreciate that you're saying whatever you say for the best possible reasons.


I also feel for all of them, particularly those who got sucked into "just sign here and we'll fill in all the details" when presented with a complex document and a reassuring adviser. Only to later discover their details had been horribly misrepresented.


No, not at all offended. You are absolutely entitled to express your dislike of me.

I wish you well.

Thankyou Julia,

You remain one of most loved Beatle's songs. Happy to leave it there. Have a great day.

 

[Igetit]

Apologies Maccka and to others- that was a flippant remark not meant to offend. Should not have gone there and was obviously ignoring the personal side of things and focusing on the financial with my remark. Poor form on my part.

Again apologies.


And Igetit,

I am not against compensation. And I am not treating this as a lark, and I certainly don't think there is anything funny about this. No matter how much my views or opinions may differ from your and others', including those here who are victims of Storm, I feel sorry for them, becuase they have been sold up the river. I wouldn't wish that upon anyone. And I am frankly disappointed that after all of our dialogue you would think that I would be treating this as a laugh.

I have no agendas, I am not on anyone's side. I am just an outsider looking in on this whole mess. I have my opinions like everyone does. I feel sorry for the clients, but I also feel that having taken a risk, a big risk by doing what they have done, that they need to accept some of the consequences of the choice they made.

You may say they were poor defenceless retirees, but that doesn't wash with me. They had a choice to go with Storm or not- and plenty didn't...if they chose to believe what a salesman told them without getting a second opinion or properly understanding the risks involved, then quite frankly they weren't giving their life savings the respect they deserved in my opinion. Others did and walked away.

As a result, I believe getting compensated fully because the scheme was unregistered is just wrong. The law may say otherwise, but thats my view, and I know its different to yours, and probably everyone else's around here. But I am sticking with it. It would be pretty boring around here if we all agreed on everything!

Hi SJG 1974,

It's not so much that your views are "different to everyone else's around here" - it's that they are different to what the law allows for. That's all. I think, for example, a person might have the right to take another persons life as an act of revenge (think Daniel Morcombe's parents) - but the law doesn't allow for that.

If people are entitled to compensation in this matter - whether they did or did not understand what they were getting themselves into - they should be entitled to all that the law allows for. As we speak, there are another group of people now being asked to take responsibility for what they were doing. They are the Banks and the Court will have some challenging questions for them. We should be all very pleased that this stage has been reached. Things within the corporate world will improve. The world will still be a dangerous place for the unsuspecting and trusting - but new safeguards are now in the pipeline to help improve things. Safeguards introduced in recognition of the fact that people have been taken advantage of. Not because they were: greedy, gullible, naiive, stupid or lazy - but because they were guilty of trusting. This will eventually sink in I am sure.

 

[Igetit]

That is ridiculous Igetit, it really is. And surely you know it is.

Storm quoted something like 8 out of every 10 people that attended their seminars and meetings walked away. Were they just lucky? Or did they give thier life savings the respect they deserved and actually look into the grandiose claims that the Storm salesmen made and decide the risk was too much to bear? People had a choice- they knew they were borrowing against their house, they knew they were margin lending, they knew they were investing in shares. They SHOULD have known the risks....some people did and walked away...the Others???? I guess ignorance can be used as a defence in yours and others' eyes.

I guess thats society now isn't it- people don't take responsibility for their own decisions and its always 100% someone else's fault.

With each post you become more and more condescending. This is a public forum where people get to speak freely and voice their opinions. No need to belittle others based on their views. Poor form.

People don't have to agree with everything you say. You speak from a position of authority, yet no-one knows who you are or what your involvement in all of this is. We certainly know you have an agenda against the banks. That much is certain. You seem to know all the facts. You seem to have all the inside knowledge, and good for you. You seem to know the laws the banks have broken and the compensation that will be claimed. You are obviously very close to this, and you have the blinkers on. If it was all so straight forward, then the banks would have conceeded by now and the Storm victims would have received their money back.

I am sure if we had someone from the bank here arguing their defence, he would come up with good arguements why it isn't an unregistered MIS. So who is right?

Perhaps we should let the courts decide? And the last time I looked, this forum wasn't a courtroom.

But give up on belittling others who don't share your opinion on things. Its petty.

Hi SJG 1974,

Not to labour the issue. But this last series of exchanges stemmed from commentary by you regarding the "money for jam" position you felt that the Storm victims now find themselves in and your wish to "sign me up" - as if this was some great situation these people find themselves in. I note that you have apologized for that. I note also that this is not the first time you have felt moved to apologize to someone for something you've said. A lesson there perhaps.

In highlighting the lack of sensitivity associated with those observations I have obviously upset you. You will get over that though. Or not. Keep the faith.

Incidentally, the only point being made about the legal proceedings is that they are afoot and the Bank has some difficult questions to answer in regard to the UMIS matter. There is overwhelming evidence available to support the view that such a scheme was, indeed, in place. The matter is certainly not resolved yet though. No one has implied it is. Things are, however, beginning to move forward - everyone associated with this matter is happy about that. Well, nearly everyone.

 

[Solly]

Hi SJG1974,

I understand your position regarding the Stormers taking some responsibly for their losses. I too have been involved in some quite spectacular speculative losses in the past. Yes, I took the risk, evaluated the position and sometimes things did not turn out as I envisaged. I too looked from blame, conducted something I call a post incident analysis, looking to identify and correct weaknesses in my approach and looking for root causes for the strategy failure.

I asked how I could apportion blame, transfer, mitigate or just accept responsibility for the failure. So when I firstly become aware of the Storm collapse and how it directly impacted on a friend and associate, I initially thought, well that's the way things happen, you take a punt and if it doesn't work, you pick up your kit and try again. Basically the methodology I use. Why should the Stormers be treated any differently ?

As I became aware of the scope and multitude of inputs contributing to this collapse and impacts on the investors, I took a closer examination of the event. To me this collapse is very complex, involving many participants with various agendas, even some self-serving and others with dubious motives.

Let me put this proposition to you. If you were faced with complete financial devastation, with no chance of recovery using your own available resources, what would do ? Would you just accept this or would you respond and fight in any manner possible to find a way to improve your position ?

I'm sure I would know your response. Would you admit any contributory fault even if it didn't initially appear to weaken your chance of an acceptable remedy ?

If I was in the position of the Stormers, I too would be seeking any avenues for recovery using the legal and judicial framework that was available to me.

The world is a very tough place and sometimes very tough and decisive actions are required just to survive. This is the life that some Stormers I know are currently living.

S

 

[Judd]

....Things are, however, beginning to move forward - everyone associated with this matter is happy about that. Well, nearly everyone.

I for one would be happy with it. The situation must be resolved one way or the other. If it is through the judicial process, so be it.
I do believe though that former Storm clients, such as Solly's mate, still lose in a way.

 

[SJG1974]

Hi SJG 1974,

Not to labour the issue.

But you will anyway....

But this last series of exchanges stemmed from commentary by you regarding the "money for jam" position you felt that the Storm victims now find themselves in and your wish to "sign me up" - as if this was some great situation these people find themselves in. I note that you have apologized for that. I note also that this is not the first time you have felt moved to apologize to someone for something you've said. A lesson there perhaps.

You know full well that was a flippant remark. But my underlying opinion still stands. And that wasn't what I apologised for. I apologised for using a certain term which I know offended Maccka and possibly others and that wasn't the intention. I am man enough to say sorry if I think I need to, I have no shame in that. No lessons there, but thanks anyway.

In highlighting the lack of sensitivity associated with those observations I have obviously upset you. You will get over that though. Or not. Keep the faith.

Not at all. It takes more to upset me than a remark from an anonymous poster on an internet forum. I have a thicker hide than that.

If you feel the need to belittle people over their opinions, throw in little snide remarks throughout posts and take a holier than thou attitude, then frankly, thats your issue.

I was just passing comment, and the fact you ignored it and turned it back on me suggests you don't see a problem there. I think that says a lot.

Incidentally, the only point being made about the legal proceedings is that they are afoot and the Bank has some difficult questions to answer in regard to the UMIS matter. There is overwhelming evidence available to support the view that such a scheme was, indeed, in place. The matter is certainly not resolved yet though. No one has implied it is. Things are, however, beginning to move forward - everyone associated with this matter is happy about that. Well, nearly everyone.

And as if to further highlight my point, you sign off like that!

Good luck with your work Igetit, whatever that is.

I hope the guilty parties are found to be, and I hope the victims are compensated in a way that is fair and reasonable. But in my opinion, the compensation you have highlighted is not fair and reasonable. Far from it. I guess the courts will decide.

 

[Frank Ainslie]

The question of compensation!

I think it would be more beneficial if we all put this matter into context. Some have stated that in their opinion it would be unfair if the people that invested using Storm were to get everything back. This won’t happen!

Statistics for investment compensation are as follows:

Full compensation 0%
Part compensation 17%
Still waiting for result 21%
Chose not to apply 7%
Not able to apply 17%
Did not know they could apply 31%
Applied but refused 7%

Significant financial services collapses

Action Reported number of investors affected Reported investor losses
Basis Capital 800 $320 million
Opes Prime 1400 $100 million
Fincorp 8102 $100 million
Sonray 4500 $46 million
Storm Financial 3000 $3 billion
Westpoint 2000 $310 million

No legal action 59%
Individual legal action 7%
Joined a class action 34%

So for those that think it unfair that people in Storm may receive full compensation – relax! It’s not going to happen even on a good day. What the majority of us are seeking is enough compensation to pick up the shattered pieces of our lives and be able to live out the remainder without starting all over - something that time for many of us does not permit.

If the truth be known, no amount of compensation could make up for the losses in mental and physical terms that many that invested using Storm have suffered since the Storm collapse. People that were not involved on this forum simply have no idea.

Many have the attitude that if you make your bed, you should lie in it! They miss one essential truth. We left it to Storm and the Banks to make the bed and they didn't do so - pure and simple.

This country has laws in place to protect its citizens. Unfortunately those laws did not then and still today do not protect ordinary Australians. We, the people that were in Storm only have a case today because there are so many of us.

Consider this for a moment. How can people litigate if the culprits have taken all their money? This is the premise under which many including the Banks operate. Fortunately, because we are many, we can join class actions that reduce our costs significantly. At the end of the day though, we will still have to pay substantial legal costs if we lose.

We are prepared to take this chance because the parties involved have violated our rights under the contracts we took out with them and assigned their contractual obligations to others that were not parties to our contracts with the Banks.

The “poor banks” (an oxymoron if ever I saw one) as someone called them have breached commercial law tenets that are written into the laws of this country to protect people or organizations that contract with one another. Therefore, we should take the emotional issues out of the debate and consider what has occurred in those terms.

In other words, this is not about the people that invested using Storm but rather about the wrongs that have been perpetrated against them. The Courts when deciding this issue will not be putting these investors on trial (thank God) but rather the wrongdoers that have deceived them.

Your personal opinion therefore of the people that invested in Storm is not going to count for a hill of beans in the final analysis. The only thing that will count in the long run is, “Who has done the wrong thing by the people that invested using Storm?”

I would remind everyone therefore that we are not in the dock - the banks are! You can then better understand our annoyance if people on this forum want to place us in the dock alongside the Banks. We are not the guilty party! The banks are although this fact seems to have escaped quite a few. Whether we were gullible, simpletons, weak minded, stupid or anything else (in your opinion) is not the issue. The guilt or otherwise of the Banks is and I feel it would be far more worthwhile to explore those issues than keep regurgitating things that are of no importance in the long run. It will make for a more constructive forum and a more objective one as well.

 

[Julia]

Not to labour the issue.

No?

I note that you have apologized for that. I note also that this is not the first time you have felt moved to apologize to someone for something you've said. A lesson there perhaps.

SJG has conceded his remark was inappropriate. He has apologised.
He at least has shown the good grace to recognise when something he said was poorly expressed and to make amends.
You don't even do that, so maybe consider your own behaviour

 

[SJG1974]

Hi SJG1974,

I understand your position regarding the Stormers taking some responsibly for their losses. I too have been involved in some quite spectacular speculative losses in the past. Yes, I took the risk, evaluated the position and sometimes things did not turn out as I envisaged. I too looked from blame, conducted something I call a post incident analysis, looking to identify and correct weaknesses in my approach and looking for root causes for the strategy failure.

I asked how I could apportion blame, transfer, mitigate or just accept responsibility for the failure. So when I firstly become aware of the Storm collapse and how it directly impacted on a friend and associate, I initially thought, well that's the way things happen, you take a punt and if it doesn't work, you pick up your kit and try again. Basically the methodology I use. Why should the Stormers be treated any differently ?

As I became aware of the scope and multitude of inputs contributing to this collapse and impacts on the investors, I took a closer examination of the event. To me this collapse is very complex, involving many participants with various agendas, even some self-serving and others with dubious motives.

Let me put this proposition to you. If you were faced with complete financial devastation, with no chance of recovery using your own available resources, what would do ? Would you just accept this or would you respond and fight in any manner possible to find a way to improve your position ?

I'm sure I would know your response. Would you admit any contributory fault even if it didn't initially appear to weaken your chance of an acceptable remedy ?

If I was in the position of the Stormers, I too would be seeking any avenues for recovery using the legal and judicial framework that was available to me.

The world is a very tough place and sometimes very tough and decisive actions are required just to survive. This is the life that some Stormers I know are currently living.

S

Hi Solly,

Let me clarify by saying that I do not begrudge Stormers for taking legal avenues to recover whatever they can. I would be doing the same. While I haven't seen evidence, it seems the banks have a case to answer, and if they were at fault, then they should pay. Unfortunately Storm, being no longer, won't pay the hefty price it should for having sold clients a dream that was infact a ticking timebomb. In my eyes, they are the main party in all of this.

My view is more from a fairness point of view (in my eyes). Investors have lost money throughout the world during the GFC. People who took any sort of risk have been hit, and the recovery is still a long, long way away.

When people take a risk, they have to be prepared for the downside of that risk. And if they didn't fully understand the risk, then they have not given their life savings the respect they deserved (again in my opinion). These people had a choice. As I mentioned in a previous post, I believe Storm quoted that 8 out of every 10 people who came through their door did not proceed with the strategy.

So it appears that a high percentage of people were prepared to look beyond what the Storm salesmen and women told them and decide for themselves that the strategy was too risky. Why the people who became clients couldn't see this is probably due to a combination of reasons, but again, the decision to go with Storm was theirs and theirs alone, as was the decision by the 8 out of 10 not to.

Now the motives for those clients going with Storm I am sure are varied. And I know that people, in the position they are in now, will be reluctant to disclose any motives beyond the simple seeking of financial advice and security. But when certain posters come on here and say that everyone from the industry to the government is corrupt and are to blame for their demise, without taking at least some responsibility for the choices they made, well I feel that demands some response.

As for the level of compensation, my view on it is this:

My opinion is that the clients should not be compensated for going into the scheme. The scheme was clearly explained to them (even if the relationship between the parties, which seems to be the issue) was not. They knew they were borrowing against their home, they knew they were buying shares, and they knew it was being geared into a margin loan. They took a big risk. And some were able to enjoy a very good lifestyle as a result when the market went up. But when it went down, they suffered, like everyone did. And in my opinion, they have to wear that, becuase that was the risk inherent in the whole scheme, and they should have been aware of that. And if they weren't aware, well Im sorry, but they have themselves to blame for that side of it.

I get a scond opinion on everything that is going to cost a decent amount of money. If I buy a tv, I will shop around. If I see a book I like, I will go on the net and compare prices. If I pay for a service like financial advice, I will compare with others to see whether what I am getting and paying for it is reasonable. I know people can be too trusting, but the world is a dangerous place. That trusting attitude belongs in a bygone era unfortunately. And you just can't afford to trust something as significant as your life savings to someone else without understanding what they will do with it. The victims know that now.

However, if it is proven that the banks erred in not issuing margin calls when they should have, then I think clients should be compensated for this, because they should have expected that the margin call was their stop loss so to speak (even though they were effectively decimated at that point). If it can be proven that a strategy could have been implemented at the time that would see clients able to trade their way out of it, then that should also be considered (however I am a bit dubious on this, relying on hindsight to provide a workable strategy).

If it can be proven that the sudden winding up of the index funds and the forced selling of the units caused loss, then they should be compensated.

I know people have suffered. I know the devastation that has occurred. I have read so much about this, and despite how some of my posts may have been interpreted, I feel for these people. I wouldn't wish this upon anyone.

But the fact remains they chose to take on the risk- does it mean they deserved to be completely wiped out and lose their homes? No, they didn't deserve it, but they should have known that it was a possibility.

Still what I think doesn't really mean much. It is what the court thinks that is what is most important.

Very long winded, and not to the point, but I hope the answer to your question lies somewhere in there!!