Storm Financial Group

[Judd]

Bunyip,

"And of the small minority burnt, it’s fair to say that it’s not the system alone that’s burnt them, but how they used the system."

If you think that a 3 billion dollar loss by a small minority (if 12,000 or so investors can be considered such) isn't something to be concerned about, they must have put too much Sherry in your Christmas pudding!

I find numbers fascinating. It certainly is a very big deal for those affected by the Storm debacle but Bunyip is possibly correct in saying that the numbers are a minority; a mere blip.

According to the firm which bought Storms fund book, the original client numbers of around 14,000 included those who had purchased an insurance product when EC was with MLC and had absolutely nothing to do with Storm since then. The number of active clients was subsequently revised to about 3,000 to 4,000.

When you compare this with the number of margin loans (RBA Bulletin December 2009) being 217,000 as at September 2009 (and it would have been higher at the time Storm collapsed) the 3,000 would have accounted for less than 1.5% of the total of margin loans.

As for the $4 billion of "Storm" funds which went whoosh over 2008, the amount of outstanding margin loan debt halved during that year and at September 2009 the debt stood at $18 billion. The number of margin calls over 2008 averaged 5 per 1,000 clients.

For June 2007, the average daily turnover on the ASX was $7,441 million and as at June 2008, it was $6,917 million. (www.rba.gov.au/statistics/tables)

So, Bunyip's proposition that Storm was comparatively small beer has some legs.

Again, however, for those involved that is certainly not the perception and understandably so.

 

[bunyip]

Bunyip,

If you think that a 3 billion dollar loss by a small minority (if 12,000 or so investors can be considered such) isn't something to be concerned about, they must have put too much Sherry in your Christmas pudding!

It is not the investors that need to adopt a prudent and cautious approach, but rather those that we place our trust in to do what we ask of them rather than play Russian roulette with our money.

Frank

I agree with some of your post, I disagree with other parts. But I can’t be bothered giving you a detailed synopsis on which parts I agree or disagree with, and why.

As for the Christmas pudding, I must admit that I did indulge in a couple of helpings of Trifle laced with sherry on Christmas day. And one of my presents was a bottle of fine matured port - we launched a fierce assault on that as well.
However, my post that you disagree with was written the day after Christmas when I’d drunk nothing but tea, and the effects of Christmas day had departed. Whatever, I’ll stick with my opinion that the number of Stormers burnt represents only a tiny minority of the overall investing public. And that the same system that is accused of letting them down is the very same system that millions upon millions of investors have used successfully for decades in capitalist societies around the world.

For the record, I didn’t say the thousands of Storm investors were nothing to be concerned about. It’s just that I think your proposed changes to legislation, if they occur, will fail to produce the result you’re hoping for. Imprudent investors will continue to get stung by uncrupulous people who figure out ways to take advantage of them.

Incidentally Frank, considering your attitude that investors don’t need to be prudent and cautious, I have a strong suspicion that your Christmas pudding must have been laced with enough sherry to kill an Afghan camel herder with one sniff from three hundred paces!
With that sort of attitude, my friend, you’ll end up getting yourself fleeced again if you have some money to invest as a result of a payout from the Storm debacle.

 

[bunyip]

Agreed...along with a number of other aspects of the entire model, alarm bells were sounding all over the place and yet investors seemingly ignored them and went ahead anyway.

It's intriguing just how adept some people are at tuning out when the alarm bells start sounding.

Several years ago a local bloke asked me if I knew of such and such a company. I said I’d never heard of it, and in answer to my questions about the company, he said he’d never heard of it either. So I asked him why he was enquiring about this company, and he told me it was because he’d just bought five thousand dollars worth of shares in it.
Our following conversation went something like this...

Me....’So why did invest five grand in a company you’ve never heard of”?
Him...’I got a phone call at 3am from someone with a foreign accent, and he told me this was a great company and it’s share price was set to quadruple’.
Me...’So on the basis of a phone call at 3am from some foreigner you’d never heard of, you sunk five grand into a company you’ve never heard of’!?
Him...’Um – yeah.....sounds pretty silly doesn't it’?
Me...’Just a little!! Is the company listed on the ASX, is is it an overseas company’?
Him....’Not sure – I didn’t think to ask that’!

Three months later.

Me.....’So how did you go with the five grand you sunk into that company – has your investment quadrupled in value yet’?
Him...’I can’t seem to find that company – it doesn’t seem to be listed on the ASX or in the US market either. Do you think it could be listed on some other stock exchange’?
Me....’Wave goodbye to your five grand – you’ve been conned’.

This is a true story. The bloke I speak of doesn’t come across as being a mug (until he told me this story) – he runs a successful small earth moving business and owns a small cattle property.
But it just shows you how gullible people can be when a juicy looking financial carrot is dangled in front of their noses.
Alarm bells should have been sounding loud and clear for this bloke, but if they were, then the lure of big money caused him to tune them out.
The one thing that Storm were good at was dangling a nice juicy carrot in front of people’s noses and dressing it up as safe and conservative investment advice.

 

[Harleyquin]

G'day Mindstorm have just read your post No. 6351 and your story is almost to a word the same as ours. I wonder how many other stormies have a similar story.

The sad part is the Storm / Bank scam will end up costing the Australian people and government far more than they realize. They are now supporting us.

 

[Judd]

G'day Mindstorm have just read your post No. 6351 and your story is almost to a word the same as ours. I wonder how many other stormies have a similar story.

The sad part is the Storm / Bank scam will end up costing the Australian people and government far more than they realize. They are now supporting us.

HQ,

If the 3,000 former Storm clients were actually couples, and received the "aged" pension, the cost pa would be $75million. In the context of the Australian economy, that is almost, but not quite, a rounding error.

Please stop making it out to be a bigger deal than it actually is. To those affected by this matter, it is huge and rightly so but the vast majority of the Australian population barely know anything about the matter and couldn't care less.

 

[bunyip]

HQ,

If the 3,000 former Storm clients were actually couples, and received the "aged" pension, the cost pa would be $75million. In the context of the Australian economy, that is almost, but not quite, a rounding error.

Please stop making it out to be a bigger deal than it actually is. To those affected by this matter, it is huge and rightly so but the vast majority of the Australian population barely know anything about the matter and couldn't care less.

A 'Storm in a tea cup', perhaps, eh Judd? (pardon the pun)

 

[Judd]

A 'Storm in a tea cup', perhaps, eh Judd? (pardon the pun)

I'll allow the pun, bunyip, although others may not.

It is simply that when people go on about how big an issue this or that is, I am reminded of the poem Musee des Beaux Art by WH Auden. He used the fall of Icarus as background and the last lines are "the expensive delicate ship that must have seen something amazing, a boy falling out of the sky, had somewhere to get to and sailed calmly on."

As it was, so it will be.

 

[bunyip]

I'll allow the pun, bunyip, although others may not.

It is simply that when people go on about how big an issue this or that is, I am reminded of the poem Musee des Beaux Art by WH Auden. He used the fall of Icarus as background and the last lines are "the expensive delicate ship that must have seen something amazing, a boy falling out of the sky, had somewhere to get to and sailed calmly on."

As it was, so it will be.

Yes indeed Judd......’as it was, so it will be’.

I don’t doubt that most Stormers will be wiser for their experience and will avoid repeating their mistakes.
Yet still we see a hard core on here who exhibit pretty much the same attitudes that brought them undone in the first place. It’s probable that some of them will get burnt again if they get their hands on some investment dollars through a compensation payout.
They think that changes to legislation will fix everything by getting rid of the shonks and making it safe for everyone to invest. So strong is their faith in this idea, that we’re even seeing comments along the lines of ‘investors don’t need to adopt a prudent and cautious approach’.
Well OK – they’re welcome to that sort of view. But I’ve been an investor for a number of decades and in that time I’ve got to know many investors personally. And all the successful ones I know share a number of common traits – they’re prudent and cautious, meticulous in their research, accept nothing at face value (particularly from salesmen) always think for themselves, never get too greedy or take silly risks, etc etc etc.
Any investor who thinks he can ignore these simple common sense rules is more than a little naïve.

But anyway, good luck to anyone who thinks he or she can invest with safety and peace of mind as long as the correct legislation and penalties are in place. One wake up call hasn’t been enough for some – chances are they’ll be getting a second one.

As it was, so it will be.

 

[Frank Ainslie]

Yes indeed Judd......’as it was, so it will be’.

I don’t doubt that most Stormers will be wiser for their experience and will avoid repeating their mistakes.
Yet still we see a hard core on here who exhibit pretty much the same attitudes that brought them undone in the first place. It’s probable that some of them will get burnt again if they get their hands on some investment dollars through a compensation payout.
They think that changes to legislation will fix everything by getting rid of the shonks and making it safe for everyone to invest. So strong is their faith in this idea, that we’re even seeing comments along the lines of ‘investors don’t need to adopt a prudent and cautious approach’.
Well OK – they’re welcome to that sort of view. But I’ve been an investor for a number of decades and in that time I’ve got to know many investors personally. And all the successful ones I know share a number of common traits – they’re prudent and cautious, meticulous in their research, accept nothing at face value (particularly from salesmen) always think for themselves, never get too greedy or take silly risks, etc etc etc.
Any investor who thinks he can ignore these simple common sense rules is more than a little naïve.

But anyway, good luck to anyone who thinks he or she can invest with safety and peace of mind as long as the correct legislation and penalties are in place. One wake up call hasn’t been enough for some – chances are they’ll be getting a second one.

As it was, so it will be.

Bunyip! Still at it I see?

Despite the evidence to the contrary you still insist that Storm's investors were partly to blame despite the fact that they went to qualified financial advisers, asked for a "low risk" plan with long-term growth. Further, you and some others seem to want to downgrade the biggest financial disaster to investors in Australian history.

In so doing you are reinforcing the message to people out there that are considering using financial advisers that these would-be investors need to accept that by doing so they must be prepared to accept the risk of ending up with a bodgie one. How comforting is that?

Instead of accepting the status quo as you seem to suggest, don't you think that finding ways to instil some confidence back in investors is the way to go. Your negativity is not encouraging or helpful. When things go wrong in this life there are many such as you that are quite willing to sit on the side-lines being critical but ask them for some solutions and they are bereft of ideas! And don't throw "cautious" and "prudent" out again because it addresses nothing. Investors deserve to be protected and the system has failed them time and time again.

In the next few years, people in the financial sector are going to find it harder and harder to earn a living. If they can't steal a march on their opposition, then they will be going to the wall just like we did.

Despite what you and others say, investors in this country are tired of reading about financial disasters that could have been avoided. They will respond by investing their capital elsewhere. This will be reinforced by the flack that the financial industry and banks will be receiving if the Banks do not capitulate now in our cases against them.

Don't underestimate people out there. These are scary times and they don't want to be entrusting their money to people that can't be trusted. Frankly, I wouldn't like to be a financial adviser in the years ahead because it promises to be a very lean time indeed. Therefore, if the financial sector wants to win hearts and minds, fix the problems now or suffer the consequences.

Bunyip, old mate! You are part of the problem, not the solution because you offer no viable alternatives. Whether we are partly to blame or not is no longer the issue. I suggest therefore that you move on with the program.

 

[Garpal Gumnut]

The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.

If posters can contain their entrenched opinions re investor responsibility, could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle, or were they just hit by as they say a "black swan event".

gg

 

[Solly]

The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.

If posters can contain their entrenched opinions re investor responsibility, could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle, or were they just hit by as they say a "black swan event".


gg

GG

I'm pleased you have highlighted this issue of responsibility, as it has been a recent topic of discussion in my professional circle.

Even if it was a "black swan event" wouldn't it be reasonable to expect, that a highly qualified model of a modern "Master"-General would have risk mitigation strategies in place, to implement and execute a back out plan in a worst case scenario?

I believe that a common theme with the double/triple geared Stormers was that they were lead to believe that there were fail safe fiscal mechanisms in place to protect their nest eggs.

My present main interest is whether it will be proven if there has been any unlawful actions by any of the prime participants and whether there will be any punitive consequences.

S

 

[bunyip]

Oh come now Frank....don’t tell me you’re still trying to convince us that you bear no responsibility for your actions and that your predicament is all someone else’s fault!
Al Capone said exactly the same thing at his trial – he blamed other people entirely for the mess he found himself in, while flatly refusing to take any responsibility for his actions.

Your claim that you are in no way responsible for your predicament simply does not hold water.

You had the option of properly scrutinizing the advice that Storm gave you. For various reasons which you’ve outlined already, you failed to do so. More fool you.
You claim to have been circumspect and astute. But a circumspect and astute man would have left no stone unturned in his efforts to consider all circumstances and possible consequences instead of just accepting everything he was told as being gospel truth.

You implicitly trusted the word of salesmen. The fact that they had qualifications in financial planning appears to have blinded you to the fact that they were still salesmen, and like all salesmen they had a vested interest in making their product sound wonderful and selling you as much of it as possible.

You went to Storm for financial planning advice, but received nothing of the kind. The sort of strategies and products and advice that you’d expect from a financial planner were not even remotely similar to the aggressive investment strategy that Storm put to you. They dressed up their strategy as safe and conservative, and you foolishly believed them. That was your fault, nobody else’s.


You mortgaged your home to raise a large loan to sink into the market alongside your personal funds. Then used double gearing to raise another big loan for more market investment. You had absolutely no need to do any of this – your financial position was more than sufficient to provide you with a very comfortable self-funded retirement. You were just plain greedy.

While Storm and the banks sat on their hands and did nothing while you burned, you too sat on your hands and did nothing. As the owner of your business, it was your right and indeed your responsibility to take defensive action to save your business from complete disaster when your manager was clearly letting you down.

Need I go on?
Most of the Storm victims I’ve corresponded with take responsibility for their actions and the choices they made. That big ego of yours prevents you from doing the same.
Nobody, Storm victim or otherwise, says Stormers are 100% responsible for getting burnt. Nor should they - clearly there are other parties as well who bear some responsibility for the Storm debacle.
I try to bring some balance to this discussion.....there’s no balance in saying it’s all Storm’s fault or all the banks fault or all the fault of ASIC or the FPA or of the Storm investors themselves.
The only balanced way to see this situation is that a number of parties were involved, and all of them bear some responsibility for their decisions and actions. Storm investors very much included.

Neither I nor anyone else I know of is downgrading the Storm situation – we’re merely putting it in perspective. In no way do we make light of the obvious distress the Storm debacle has caused to its victims. But as Judd pointed out, in the overall context of things it’s barely even a blip on the screen. The average Australian knows little or nothing about it and couldn’t care less even if they did.

No Frank, I’m not reinforcing the message that would-be investors must be prepared to accept the risk of ending up with a bodgie financial planner. What I’m saying to all investors as loudly and clearly as I possibly can is this......
‘Don’t copy Frank Ainslie and Co by blindly trusting a financial planner in the hope that you’ll be lucky enough to get one who’s legitimate.
Don’t place blind trust in someone just because he has a piece of paper saying he’s qualified to give investment advice.
Don’t accept at face value what anyone tells you, no matter what qualifications he has. Be meticulous in your research just the same as you would be before committing a lot of money to any other business. Don’t think that the normal rules of business don’t apply to share investment – they most certainly do.
Don’t think you can rely on laws and regulations to keep you out of harms way – if you take silly risks then you’ll end up paying a heavy price for your imprudence.

Better still, avail yourself of the many free opportunities to get yourself some basic knowledge and investment skills so that you can handle your own investment affairs instead of needing someone else to handle them for you.’

Do I think that instilling confidence back into investors is the way to go? Yes I do, but the way you’re proposing is not going to produce the glowing results you’re hoping for. I’m not saying don’t try to make improvements, but I’ll telling you that you will never solve the problem entirely by changing legislation and introducing harsher penalties. Investors who are imprudent and reckless are still going to get burnt.
For example, what’s to stop someone from bypassing all financial planners and taking exactly the same silly risks you took through Storm? They could mortgage their home to get a loan, combine it with their personal finances, and plonk the whole lot in the stock market. Then double gear on top of that, and hope like hell the market keeps going up. Just like you did.
No need to involve a crowd like Storm, no need to get advice from anyone, just do it all themselves.
Let’s assume that such a person doesn’t run up against any collusion or skullduggery that you allege took place between Storm and the banks. Let’s assume that everything is legal and above board.
Along comes a 2008 style market crash. Our investor gets his margin call when he should get it. He’s still going to get hammered, with nobody to blame but himself for being so imprudent and reckless. If the market keeps going down, he may be required to meet more than one margin call. If the market stays down for years, he’ll be under water and struggling at best, with every likelihood of being be wiped out.
So what sort of legislation can possibly protect such a person who, completely of his own volition, adopts such an aggressive and risky strategy? Answer – nothing, unless double gearing is outlawed. Even then, there would be ways around it for anyone who is intent on borrowing suicidal amounts of money for suicidal purposes such heavy investment in shares, and hoping like hell for a continuously rising stock market to make the strategy work.

You say that investors are tired of reading about financial disasters that could have been avoided. Perhaps you’re right, but I wonder what the numbers are in percentage terms. As has been pointed out to you, many millions of investors have prospered from the same system that you seem to think is the scourge of the investment world.
As for these ‘financial disasters that could have been avoided’......I’d rate the Storm debacle as one of those. People like you could have easily avoided being caught up in the Storm fiasco if you’d put in some effort by looking into their strategy thoroughly instead of just believing everything they told you. By your own admission, you took your eye off the ball. In other words, you got careless and complacent and didn’t think enough for yourself. And you were greedy as well, otherwise you would never have gone chasing the larger than average returns of the Storm strategy when you had absolutely no need to. You’re a scaled down version of those two greedy doctors who had the income and asset base to set themselves up for life, but risked it all by borrowing 11 million and 13 million dollars.

You may be right about lean times ahead for investment advisers. But that won’t bother me, and it needn’t bother you either if you take some responsibility and learn the basics of handing your own investments.
If, as you say, people don’t want to be entrusting their money to people who can’t be trusted, maybe that’s not such a bad thing. Maybe then they’ll have an incentive to take some responsibility for their own lives and their own investment education, so that they can join the millions of investors who prosper from the current system that your small minority claims is so badly broken.

You think I’m part of the problem, not the solution because I offer no viable alternatives.
OK then, how about this for a viable alternative?........adopt the very same vigilance towards share investment as you’d adopt towards any other kind of investment. You failed to do that, Frank.......your attitudes and actions in the Storm situation were very different to the attitudes and actions you adopted towards your shopping center business.

Until you take a leaf out of the book of many other Storm investors by facing up to the fact that you were a large part of the problem by being pretty damned stupid in what you did with Storm, you’ll continue to delude yourself with the belief that legislation can ensure safety for all investors, even those as imprudent and reckless as you were.
You’re going to be sorely disappointed when you find out that regardless of any changes to legislation that you and like-minded people may bring about, future investors are still going to get mauled when they didn’t need to if they follow your example of failing to exercise a modicum of prudence and common sense in investment matters.

 

[Garpal Gumnut]

The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.

If posters can contain their entrenched opinions re investor responsibility, could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle, or were they just hit by as they say a "black swan event".

gg

GG

I'm pleased you have highlighted this issue of responsibility, as it has been a recent topic of discussion in my professional circle.

Even if it was a "black swan event" wouldn't it be reasonable to expect, that a highly qualified model of a modern "Master"-General would have risk mitigation strategies in place, to implement and execute a back out plan in a worst case scenario?

I believe that a common theme with the double/triple geared Stormers was that they were lead to believe that there were fail safe fiscal mechanisms in place to protect their nest eggs.

My present main interest is whether it will be proven if there has been any unlawful actions by any of the prime participants and whether there will be any punitive consequences.

S

Thanks Solly,

Good points.

Let us examine one.

Did Manny and Julie Cassimatis have risk mitigation strategies in place, to implement and execute a back out plan in a worst case scenario?

If they had was any attempt made to execute them?

Perhaps Frank and Harlequin and others may be able to comment on this one facet of Storm Financial.

gg

 

[Julia]

I'm not sure why you're asking the above question, gg.

Much of this thread has been devoted to Storm investors saying they were assured that risk mitigation was absolutely in place, and much also to their saying these strategies failed to ever appear.

 

[Solly]

The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.

If posters can contain their entrenched opinions re investor responsibility, could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle, or were they just hit by as they say a "black swan event".

gg

GG

Just one more observation regarding the "conversation of the deaf", I have at times felt a bit sorry for the bollocking poor Frank cops. I think that he is only one of the three posters on this thread who actually uses their real name and is publicly identifiable.

A bit of a brave move when you can open yourself up to anonymous vitriol. Anyway sometimes I need to remind myself that this is just a public discussion forum and thankfully supported by Joe and an inviting safe place to air our views.

I suppose it doesn't really matter if those with opposing views never agree or capitulate in this arena, as the only place with real authority and judgement in these matters resides on the 7th Level of Harry's Place.

S

 

[Solly]

Thanks Solly,

Good points.

Let us examine one.

Did Manny and Julie Cassimatis have risk mitigation strategies in place, to implement and execute a back out plan in a worst case scenario?

If they had was any attempt made to execute them?

Perhaps Frank and Harlequin and others may be able to comment on this one facet of Storm Financial.

gg

I'm not sure why you're asking the above question, gg.

Much of this thread has been devoted to Storm investors saying they were assured that risk mitigation was absolutely in place, and much also to their saying these strategies failed to ever appear.

GG & Julia

I am interested to know if there was any written certified methodology for such scenarios.

S

 

[Garpal Gumnut]

I'm not sure why you're asking the above question, gg.

Much of this thread has been devoted to Storm investors saying they were assured that risk mitigation was absolutely in place, and much also to their saying these strategies failed to ever appear.

Thanks Julia,

Assurances are heresay. I would like to delve in to the facts.

gg

GG

Just one more observation regarding the "conversation of the deaf", I have at times felt a bit sorry for the bollocking poor Frank cops. I think that he is only one of the three posters on this thread who actually uses their real name and is publicly identifiable.

A bit of a brave move when you can open yourself up to anonymous vitriol. Anyway sometimes I need to remind myself that this is just a public discussion forum and thankfully supported by Joe and an inviting safe place to air our views.

I suppose it doesn't really matter if those with opposing views never agree or capitulate in this arena, as the only place with real authority and judgement in these matters resides on the 7th Level of Harry's Place.

S

I would agree totally with the above comment Solly, totally, however it tends to compartmentalise the thread, and it would be good to get some movement and new information that may help the Storm investors at Harry's Place.

GG & Julia

I am interested to know if there was any written certified methodology for such scenarios.

S

And so am I.

gg

 

[Julia]

GG

Just one more observation regarding the "conversation of the deaf", I have at times felt a bit sorry for the bollocking poor Frank cops. I think that he is only one of the three posters on this thread who actually uses their real name and is publicly identifiable.

A bit of a brave move when you can open yourself up to anonymous vitriol.

Sorry for poor Frank? As someone who has been in receipt of some of his particularly distasteful vitriol, I do not share your compassion. He has made some extraordinarily nasty remarks to various people.

 

[Garpal Gumnut]

Sorry for poor Frank? As someone who has been in receipt of some of his particularly distasteful vitriol, I do not share your compassion. He has made some extraordinarily nasty remarks to various people.

Thanks Julia,

With a New Year upon us soon, let us draw a line under the differences between us and rather share some solid facts about Storm, so that we and others will not lose our hard earned in future Financial Adviser disasters.

It is to everyone's credit that knowledge has been held and shared, and some feel more strongly than others about their position, and others' strategies, wins or mistakes.

I for one have on the odd occasion been guilty of cutting remarks about others, often due to misinformation, so my intent on this change in direction was to look at uncontestable facts and not opinions.

I do read all your posts and value your opinions and wish you and puppy a Happy and Prosperous wave 3 in 2012.

gg

 

[Frank Ainslie]

The thread is turning in to a conversation between posters who do not agree and at length push their own barrow, without any movement or agreement, a conversation of the deaf.

The issue of Storm investors responsibility is particularly contentious, so would it be possible to move off that topic and discuss the other players in this debacle.

If posters can contain their entrenched opinions re investor responsibility, could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle, or were they just hit by as they say a "black swan event".

gg

Hi GG,

I couldn't agree more! We Stormies don't mind opening up but we have no intention of listening to the same old stuff over and over again! It's just too boring! We are members of this forum because we choose to be, not because we have to be!

We have been there so we know what happened - not what some on this forum tell us happened! We have been patient with the knockers and have explained at length why we invested with Storm. This doesn't seem to be enough however. Therefore, let me make this loud and clear once and for all. I am not going to change my position and nor are you that believe otherwise, so let's move on! As GG says, "It really is getting us nowhere!"

He also said:

"If posters can contain their entrenched opinions re investor responsibility, could we first discuss and if possible establish whether or not, Manny and Julie Cassimatis bear any responsibility for the debacle, or were they just hit by as they say a "black swan event"

To my mind, they are ultimately responsible because it was Storm's advice that landed us in this mess to start with. Further, it needs to be remembered that Storm's financial model was not designed to cope with a GFC. Storm's directors should have been aware of this. Personally, I believe that the C's were fully aware of this but were looking to the Banks to bail them out because of the agreements in place. However, this does not lessen the responsibilities of the Banks that co-operated fully with them, struck up these agreements, and gave Storm the means to further their own ends by issuing imprudent loans to Storm's clients.

I do not accept the notion that they were hit by "a black swan" event because this is a feeble excuse for not having the foresight or will to protect investors' assets when Storm should have done. If one looks at the chain of events, this didn't happen overnight. I firmly believe that Storm and the Banks used a "wait and see" policy when all around them was crumbling. The "trigger-points" had long passed and so had the "point of no return" before anyone acted.

By allowing this to happen , both Storm and the Banks were gambling with our money and we subsequently lost everything as a consequence! No other explanation fits in with what happened unless you believe that the Banks and Storm were a bunch of idiots. Certainly, they acted like idiots but there was some method in their madness. They were banking on the markets turning so that they could salvage something for themselves. They had found a wonderful gold mine and didn't want to give it up easily even though the waters were rising in the shaft.

The directors of Storm should have realized though that when you sup with the Devil (or devils in this particular instance) you have a good chance of going straight to Hell. Unfortunately, in the process, they dragged us there with him!

Consider this! The CBA and other banks were making margin calls to some of their customers (other than Storm) in September before the "Black Swan" event occurred, and Storm were still accepting clients' monies right up to the end. What does that tell you about Storm and the Banks' failures to act in a responsibility manner when it came to their mutual clients?

To my mind, both Storm and the Banks' behaviour are inexcusable. This Government and former goverments aided and abetted them by failing to protect investors by having the necessary legislation in place to ensure this type of behaviour couldn't occur!

That's my spin on all this.