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Storm Financial Group

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OK Frank, thanks for the reply.

Devils advocate #2

My firm have certain preferred products that we use. We like them for their competitiveness in the fee area whilst maintaining a high level of usability and ease of reporting etc.

Extending your logic does this constitute pooling? We have never been a big enough group to receive volume discounts etc but I know they are available in the industry. If a dealer group promotes certain platforms/products to their adviser base because they will then receive a volume discount and therefore make more from the product helping cover costs, can that be argued to be a UMIS in disguise?

There is much talk about these behind the scenes discounts as "ripping off the client" and that any discount should be passed on. My understanding is that if it was passed on then some other fee would need to be increased as the licencee must remain profitable to retain the licence.

Plus is it all that different from an industry fund who automatically gets access to the full pool of monies from members and can negotiate a special price with a fund manager to manage the monies? One gets a discount if they hit certain hurdles, the other walks in with an amount already over the hurdles and negotiates the discount up front.

I guess the other question is exactly what is it in the agreement that you feel triggers a pooling situation? Is it the use of the valuation software? Is it the extra LVR? Storm had so many varied client situations as explained, how many fell under the CBA Home Loan / Colonial Margin Loan combination?

I ask this because if the extra LVR is the supposed trigger I could argue that any agreement made no difference to the advice. Storm always geared clients up to 50% or there abouts unless the client specifically requested a lower LVR. The change in the Margin Call LVR did not result in Storm recommending more borrowing in their advice, it was simply sold as additional "protection" they had arranged.

If I go to our providers and negotiate a better deal in some form for our clients (extra protection, lower fees etc) does that automatically mean I have entered into a UMIS?
 

Hi Doobsy!

Look! At this stage I am endeavouring to isolate the issues that will, I feel, be considered when our cases are considered in Court. I cannot state that "pooling" definitely occurred or what I have stated will be construed as "pooling" because this is a question for the Court to decide. What's more, it is a complex issue that a number of "suits" will be considering at length.

As for the 18th May 2008 agreement, my further postings will help to clarify its importance in my eyes - its influence for one on what occurred at the end of 2008!
 

Hi Frank,

Will your further posts explain why you borrowed against your house, given you admitted it was unnecessary and provided no benefit? Will they do that?

Given your repeated claims that you had absolutely no say or responsibility for anything that happened when you were involved with Storm, I am guessing that you have a case against the banks for MAKING you borrow against your home?
 

Doobsy!

One further point on this. The Court will not be testing the legality of the scheme in terms of how it operated. Rather, the Court will merely need to establish whether it has all the ingredients of a managed investment scheme. If is is found to be so, then its illegality will stem from the fact that it wasn't registered. Any pooling that took place constitutes just one of the ingredients that make up a managed investment scheme. If all the boxes are ticked, then our case is proven.
 

This is a post of 3 years ago, exactly to the day, from a former client of Storm.

I can understand how Wizard_73 felt. It would be interesting to know whether he or she is any further on in certainty that their money will be recovered.

gg
 

Frank, i guess what i am looking at is even if umis is proven what do storm clients expect from it? Compensation from that point on? From day 1? ????
 
Garpal Gumnut said:
This is a post of 3 years ago, exactly to the day, from a former client of Storm.

I can understand how Wizard_73 felt. It would be interesting to know whether he or she is any further on in certainty that their money will be recovered.

gg
Click to expand...

GG

It would be great to have input from other Stormers who could contribute to this thread. I know my mate reads this thread but doesn't post as he feels it will only open him up to a tirade of criticism for his actions. I hope there are other Stormers out there who will run the gauntlet and add some new life and perspective by posting about their journey and experiences in this Storm saga.

And remember Stormers, you never have to respond to anybody or defend your position unless you choose to. That is a very powerful position.

S
 

Unfortunately Solly, I daresay there are many who, like myself more recently, have decided that putting up with immature and/or nasty posts is simply not worth the effort. Why open oneself up to attack merely to provide amusement or some form of self-gratification for total strangers who often seem thoroughly unlikeable people? Most of us are still hurting in one way or another, and quite frankly don't need any extra stress or irritations. Reliving the past can be cathartic - but most responses on this thread seem to seek only to rub salt into the wounds.

I'm not bothered by posts directed at me personally, but I'm quite disgusted by some of the venom and condescension shown towards some posters who are obviously still hurting quite badly.

I do know that members of ASF have the right to post what and where they feel - but you can't then wonder why you're left mainly talking to each other when those who fail to genuflect to you are met with derision and venom. Why would any ex-storm client reading this thread feel that their story or opinions would be met with an understanding or sympathetic attitude? I realise that some, like yourself, have been empathetic and helpful - but one has to wade through a good bit of muck to get to the posts of value. You only need to scroll up a little to find an interesting discussion between Frank and Doobsy, that is of actual value to the thread, interrupted by yet another rude and immature post from SJG1974.

I suspect your mate is not the only ex-stormer to decide not to engage with people he'd probably go to great lengths to avoid in the real world.
 
doobsy said:
Frank, i guess what i am looking at is even if umis is proven what do storm clients expect from it? Compensation from that point on? From day 1? ????
Click to expand...

I'd also be interested in knowing what those who are involved in the Levitt action feel the outcome might be, should their action be successful.

I'd also value any opinions on why some have 'opted out' of the Levitt action - is it because they feel they won't be able to claim compensation from an ASIC win? Or do I have this backwards?
 


And Frank - will your further posts divulge whether you'll accept a court ruling, unlikely though it is, that the banks must refund 100% refund of your losses?
Why I've asked this question before and am asking it again now is to check if you're genuine in your claim that for you, this is about justice, not money.

You see Frank, some people suspect that you're just on a money-grabbing campaign, that the pursuit of justice is not your main motivation at all. I mean, you’re constantly slinging mud at the banks, no doubt in the hope that some of it will stick, yet the real culprits, Storm Financial, rarely get a mention in your posts. At the same time you refuse to admit any responsibility for your own actions even though they were made of your own free will.

Now, anyone with the power to think clearly understands that the banks are not solely responsible for your losses, therefore it would clearly be a travesty of justice if a court ruling ordered them to compensate you for 100% of those losses.
And since you claim that you want justice to prevail, then can I reasonably assume that as a man of complete honesty and integrity, you'd refuse to accept a clearly unjust situation whereby the banks are judged 100% responsible for the Storm debacle, and are ordered to compensate you accordingly?

If you can tell this forum, in all honesty, that you’d take the moral and ethical course of action by refusing 100% compensation from the banks, then we can have some faith that you’re a man of decent principles whose pursuit of justice is genuine.
On the other hand, if you admit that you’d grab the money with both hands without any concern over the fairness of the ruling, then it will prove correct the suspicions that money-grabbing, not justice, is what motivates you.

Is this question too confronting for you, Frank – will you run and hide from it?
 

Doobsy, hope you don't mind me butting in here, but my reading of the bit I've bolded leads me to wonder if you think the desktop VAS software was owned and run by Storm, rather than by the bank? My understanding is that this was software developed, owned and used soley by the CBA for its own purposes. My understanding is that they used this method to revalue properties held by them as security for loans to Storm clients in order to expedite further lending to those clients. I believe the CBA even went so far as to provide Storm head office with a list of those mutual clients of both CBA and Storm who had equity available for further borrowings, following a revaluation using their VAS system, so that they could be directly "targeted" for a further "step". I would like to see this aspect investigated further through the legal system as I feel it was crucial in adding to the losses suffered by those Storm clients who also had home loans with CBA.

To the best of my knowledge, and I certainly could be wrong, the VAS system was used only by CBA on their own clients, and would not have been available for use by Storm on their clients who had loans at other banks - other banks presumably carried out valuations using their own methods, probably an actual inspection by a valuer.
 

Yes DocK,

I understand, I have heard a lot of positive feedback about this forum and am grateful to Joe for maintaining a place for our views to be aired. The mainstream media, broadcast environment and social media contexts are evolving so quickly in this digitally interconnected world. It's a far cry from just a few years ago when the only people with a voice needed to be part of a media conglomerate and with access to a newsroom and a broadcast licence. Even with my background I couldn't be directly involved in a targeted repository of all things about Storm until this thread appeared on ASF.

I too look forward to more valued added interesting discussion and dissection of the mechanisms behind this event. I also look forward to observing a few more sittings at Harry's over the next few weeks.

Very interesting times ahead.

S
 

I would agree totally Solly,

It is difficult for people to post on forums even if they have no monetary interest in the topics discussed, and to deal with the criticism and sometimes trolling that accompanies posts.

As you say "silence is golden " , it is a very powerful tactic against persistent insults.

I would encourage posters such as Wizard_73 to post again so that information can be shared which will hopefully lead to gaol for the culprits and recompense for losses incurred.

There is a wider interest here as well, that Storm Investor posters are not aware of, from my reading of the posts.

That is to educate investors of the present and future, to ensure that they are better educated and do not make the mistakes that investors in Storm did.

This results in a conflict in the content of different subtexts of the posts which is unhelpful and which will probably continue without closer moderation. The position of Moderator is difficult and I'm glad I am not one, and to be fair it is a reasonably well ordered thread given the high emotional content of some posts.


Opinions from those who have opted out of the Levitt action would be useful. In Townsville opinions on the Principal and agents of Levitt is mixed.

The opinions of Stormers would be very useful, more for they themselves than non-interested parties.

gg
 

Dock

Not at all. Maybe my devils advocate position leads the forum to believe that I am here to defend the banks. That is not it at all. I would expect and hope that BOQ North Ward and whichever was the main CBA TVL branch that they dealt with to have people strung up. I just don't think that CBA overall knew as much as people here automatically think they did.

My understanding of the valuation software was that due to the VERY close relationship between the townsville branch of CBA and Storm, they either had access at all times (even for non CBA clients) or maybe even a copy of the software loaded on computers at Storm HQ. If the second is true I will bet that CBA QLD and Australia did not know about that.

So I was inferring that if Storm did in fact have full easy access to the CBA software they could use it for all clients in their book and use it as a justification for "steps" even if it wasn't a CBA or Colonial Margin Lending client.
 
Just a side note on CBA

From what I can find, they held only about 1/3 of the home loans associated with Storm. Considering the size of CBA in the Australian market, this isn't all that high I would say.

It has almost 500 local branches around Australia. 1 (0.20%) of those branches had a relationship with Storm that was too close for comfort.
 


Well! That's very interesting indeed. That is the first I've heard of the possibility that even the VAS software may have been shared, and if true (and I've no reason to doubt you on this) gives further weight to the argument that the CBA and Storm were almost acting as one - albeit maybe only one branch of the CBA. I certainly don't dispute that the vast majority of individual CBA branches had either nothing or very little to do with Storm or its clients. I think it is beyond doubt though, that at least one branch in Townsville had an extremely close relationship, maybe much more so over the years immediately preceding Storm's demise. I'd be interested to know how much of Storm-related business was written by CBA vs other banks from 2007 or so onwards - if this info is known?

I guess another question for the courts will be along the lines of "Even if only one branch of the CBA was rogue, and the CBA top executive were ignorant of its actions, does this excuse the organisation or not? Where does the buck stop? Who is responsible? The branch manager is simply an employee of a very large organistion and reported to a regional manager, who reported to a state manager who reported up the line and so on. We do know that one branch in FNQ was writing record lending business and being rewarded for it at various CBA functions, so I guess a pertinent question might be "If one branch was performing well above any expectations, wouldn't/shouldn't someone at an executive level within the CBA have been interested to see how?" What about their audit system? Just my personal opinion, but all the claims of ignorance made by various execs are a bit on the nose. Not saying the CEO was intimately familiar with the dealings of each and every branch of course, but at least the state execs should have been imo. I'm not as familiar with the BOQ system, as their branches are more like franchises I think?, but presumably a branch manager/owner still has set guidelines they're allowed to operate within?

I'm self-employed. If I had one employee who was bringing in a multitude of business, over and above normal expectations, I'd be delighted. I'd probably give him a bonus. I'm sure a lot of business owners would do likewise. But I'd also be very interested in his methods as ultimately as the business owner, I'm responsible if he's using unethical or illegal methods to generate that business. Should this not also be the case for CBA, BOQ or any other bank IF they are found to have a case to answer?
 

Hey Doobsy.... what you say here is exactly what the CBA has been paying their spin doctors to have the majority of you believe (they have obviously done their job well).... it was not just 1 ROGUE branch of CBA..... these arangements/deals were signed sealed and delivered from the very top.... Yes Ralph & co did know exactly what was going on...... hence the claim of UMIS... funny I thought that had been made abundantly clear.......Perhaps that is just an inconvenient truth !!!! And yes I know this is yet to be proven however we may not yet get to court..... with any luck the banks will fold at the "mediation" on Feb 23 & 24.
 

Hi Mash,

It was actually my post that used the words "one rogue branch of CBA" although I was posing the question that "even if" it was only one, does that let the entire bank off the hook?

I'm an ex-storm client, and very interested in the details regarding the nature of the relationship between the banks and Storm, and I must admit I was unaware that it has been made abundantly clear that Ralph and Co did know exactly what was going on. It certainly wouldn't be an inconvenient truth for me, and I would appreciate it if you could post further details in this regard. Are there any transcripts from court or enquiry sessions, or media articles etc that point to Ralph Norris being aware of the closeness of the relationship between any of his branches and Storm? If so, I'd be very grateful if you could provide a link please. I must admit to thinking this aspect was still a matter of dispute.

I would love to see the mediation meeting be the end of proceedings, but fear your hopes that the banks will "fold" may be a bit optomistic. I'm more of a pessimist - the banks have very deep pockets and are well able to fund ongoing legal action for several years if it suits them to drag the matter out. It may come down to a matter of publicity - their bottom line is likely to be the most important factor to a bank's board, and if profits may be threatened due to poor PR, that's more likely to spur them towards a mediation imvho. In the absence of negative media attention, I see no reason for the banks to make life any easier for those taking action against them - rather the opposite in fact.
 

Dock - don't quote me on the VAS use but that was the understanding I got from my sources. They were not based at HQ however.

Maybe it is the cynic in me but I don't think Storm really were that important to CBA overall. Don't get me wrong, it was a big book and important to the branch and like mentioned should have been important to regional and state managers but as an overall I don't think so. Ralph Norris was running a multi billion $ bank that has exposure in Australia, Asia, NZ. It runs banking, insurance, funds management.

It has a home loan book of over $300 billion. Now assuming Storm had $5B under management, at least $2B would have been margin loans, and probably another $1B or more would have been just straight equity rather than the home borrowings. That leaves $1-2B at most in a book of $300B (0.33-0.66%). I doubt Ralph Norris could have given a flying F about SF until it all hit the fan.

I think EC thought he was important but in the grand scheme of things with the serious players like the property and business operators (Stockland, Westfield) and the private operators that don't flaunt their money, CBA would have considered EC a handy pickup but not a make or break account to retain.
 
Oh, of the $2B remaining, only a third was CBA apparently so more like 0.11 - 0.22% of their total mortgage book was Storm exposure.
 
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