Storm Financial Group

[Harleyquin]

A lack of ethics by financial planners and their financial backers caused the problems with storm. The bank spokespeople on this forum can come up with whatever excuses they like. The fact is that these people had no ethics and still don't.

 

[Frank Ainslie]

The good ship “Storm”

I see that there have been some responses to my article about that cruise ship that hit rocks recently somewhere off the coast of Italy. For what it's worth, here are my answers to the questions posed. Bunyip and son are excused because they have not been able to see any similarities. Why doesn't that surprise me?

The operative word that springs to mind where this cruise ship is concerned and those in Storm is "confusion" because it reigned supreme in both cases. Chaos then ensued which resulted in the disaster scenario.

With regard to the questions posed, I will now endeavor to answer such.

1. Were the passengers justified in booking this cruise?
The answer to that is, “Of course they were because they had no idea, nor could they have, that the Captain would run the ship onto rocks.” People that invested in Storm were not gifted (as many on this forum claim to be) with hindsight. Nor did they have any reason to suspect that the advice they received was “high risk” and further, that safety measures were not in place to ensure their financial safety.

2. Were the passengers justified in placing their trust in the Captain of this ship?
Of course they were because one assumes that the captain of any ship is a responsible individual that would always act in the interests of his passengers. The fact is that the behavior of the captain of this cruise vessel could not be foreseen by anyone with the exception of God and Bunyip. Likewise, the future behavior of Manny Cassimatis could not be foreseen by those that invested in Storm because he gave no indications that he was anything other than what he represented. He was after all a qualified financial adviser as were many of his colleagues; his company had a track record of success; Storm’s infra-structure was substantial ( or so we thought); they were one of the biggest financial advisory firms in Queensland, and they had the backing of major banks. Why would we not therefore put our trust in Storm Financial and it’s captain?

3. Were the passengers justified in waiting for an official order to abandon ship?
Of course they were! They had been told that the situation with regard to the ship wasn’t a serious one and there was no cause for concern. The passengers, who relied on the captain and crew of this vessel to supply them with truthful information, then quite rightfully assumed that everything was in hand and did nothing until the ship began to sink beneath their feet. We, ‘Stormies’ relied on Manny and his crew to keep us up to date and abreast of what was happening. After all, that what we were paying them for and that is what we were entitled to receive. After all, we had placed our trust in that company to manage our financial affairs and had signed an agreement to that effect which imposes duties and obligations on both parties. Storm did not fulfill its end of the bargain.

4. Are the passengers now justified in claiming compensation?
Of course they are because the people that they placed their trust in and paid good money to sail aboard this ship did not carry out their responsibilities to ensure their safety. Instead they put the passengers in harm’s way. The same can be said of Storm and its clients. The people within Storm did not do what they said they would and so endangered and in some cases completely destroyed their clients’ financial well beings. Deaths in both disasters have occurred as a consequence.

5. Were the passengers in a position to tell the Captain how to chart a course?
Everyone on board that ship would had some idea of where they were going because they would be fools to get on any ship if they didn’t know where it was bound. Further, they would have agreed to those ports of call beforehand before boarding. However, they all would have placed their trust in the captain to steer a safe course. The fact that he didn’t cannot therefore reflect in any way on any of the passengers because it was his job, not theirs to bring them safe home.
The same can be said of Storm. We signed on with that company on the provisos that they we investing in a “low risk” venture for a long voyage and adequate safety measures were built into the system that would protect our assets at all times from the likelihood of "ending up on the rocks".

6. Were the passengers in a position to know that the Captain had himself already abandoned ship?
Not unless they were in the same lifeboat as him! It would be unfair to say that Manny Cassimatis abandoned us but he did nothing to save us either. He will claim that it was the banks that were at fault for not honoring their agreements with Storm. However, they were his agreements with the banks, not ours! When he and the banks failed to act precipitously to save what assets we had left, they basically abandoned us to our fate.

7. Were the passengers in a position to fully understand the extent of damage?
How could they when they were being told lies by the captain and his crew for the sole purpose of reassuring people, keeping the real facts from them until it was all too late. The same thing occurred where the clients of Storm were concerned. “Don’t worry! We have everything under control!. You leave it to us to do the worrying!” and so forth.
8. Were the passengers liable in any way for what occurred?
Of course not because they had no control over what actually occurred or the actions of the captain and crew that followed the ship's running up on rocks. Were we the clients of Storm to blame for any of this? Apart from a few on this forum that claim divine prescience, I doubt that any fair minded individual would hold us in any way accountable for the actions of those parties with vested interests that put their own welfare first and ours last.

9. Were the passengers morons who had a gambling habit?
If the passengers on this ship were subsequently categorized in such a way, think of the outcry there would be, and rightfully so. Yet some here have sought to label us as just that for investing our money using an investment advisory firm that had all the credentials, a record of safe investment,(they had been around for some years, not a few minutes as some on this forum would have everyone believe), a strong data base of clients (many of them prominent) and strong affiliations with such banks as the CBA.

The only real difference between this example and us is that the Banks were heavily involved with Storm. Indeed, Storm would have been impotent without the assistance of banks who were willing to churn money out of Storm’s clients for mutual gain. Manny may have been the captain but the Banks employed him to serve their purposes. They gave him the money to build a fleet of ships so Storm and the banks could reap their mutual rewards. In any partnership, when one goes under, the other partner has to shoulder the blame. That’s the way the law works! It’s called justice I believe, or more correctly in this case, poetic justice!

Remember a passage from this article? “Whatever an investigation finally finds, the Costa Concordia tragedy has highlighted concerns about coping with emergencies on the new generation of mega-ships carrying thousands of passengers.” The same can be said about double-gearing financial models such as Storm’s. They just cannot cope with major disasters.

 

[Harleyquin]

We have a more than reasonable idea how those passengers are feeling. Which is more than I can say about some posters on here. They will come up with every available excuse to try and take the spotlight off the real culprits.

Unless you were on that ship "storm" when it floundered against the rocks, you have no real idea what it's like.

 

[SJG1974]

Why does there have to be a comparison? Storm's situation is unique, even in financial disasters...we have seen the Madeoff affair, Allen Stanford, Westpoint, the collpase of Lehmanns and many more in the past few years. All were different, but the similarity is all left a trail of devastation, just like Storm did.

We have seen Stormers compared to holocaust victims, rape victims and victims of the Costa Concordia crash. What's next....the Japanese tsunami, September 11? I can't wait to find out. Comparing apples with oranges. Whats the point? Its ridiculous.

The analogy with the Costa Concordia is just as ludicrous as the claims that Stormers' CHOICE to invest EVERYTHING in a high risk strategy, and their CHOICE not to do independent research, and their CHOICE not to monitor their investments closely, and their CHOICE to believe everything Storm told them even though some had a gut feel all was not right, their CHOICE to accept the debt the bank threw at them, and their CHOICE to throw common sense out the window had nothing to do with their ultimate loss.

 

[Harleyquin]

SJG you've obviously made a CHOICE to try and divert the spotlight away from the perpetrators of this crime. One wonders why???

 

[SJG1974]

SJG you've obviously made a CHOICE to try and divert the spotlight away from the perpetrators of this crime. One wonders why???

Wonder away HQ...I have been pretty clear from day dot about my view that people need to take responsibility for the choices they make...its a view that not too many seem to share around here, which is a sad reflection on society.

I have also been clear in stating I have no vested interest in anything to do with this saga. But if you want to add my name to those of Storm, the banks, the FPA, ASIC, the government and anyone else who had conspired against you in causing your financial ruin, then be my guest....whatever floats your boat.

 

[Solly]

"ASIC action list lifts curtain on hits and misses

Three financial advisers who invested hundreds of thousands of dollars of clients' funds in the Storm Financial investment scheme, which collapsed in 2009 owing $4.8 billion, also avoided any substantial legal action"

More by Anthony Klan @ theaustralian.com.au


Here are the enforceable undertakings referred to in the article:

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136481.pdf/$file/025136481.pdf

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136480.pdf/$file/025136480.pdf

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136479.pdf/$file/025136479.pdf

Source: http://www.asic.gov.au/asic/asic.nsf/byheadline/Enforceable+undertaking+register:+list?openDocument

 

[Solly]

When matters are next in Court

Below are the dates and venues when proceedings ASIC have commenced in relation to the collapse of Storm are next in Court.

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

5 April 2012
ASIC unregistered managed investment scheme proceedings
Federal Court, Brisbane
Justice Reeves
Level 7, Harry Gibbs Commonwealth Law Courts Building
119 North Quay
Brisbane QLD 4000

Source: https://storm.asic.gov.au/storm/storm.nsf/byheadline/Next Court Dates?opendocument

 

[Frank Ainslie]

More by Anthony Klan @ theaustralian.com.au


Here are the enforceable undertakings referred to in the article:

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136481.pdf/$file/025136481.pdf

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136480.pdf/$file/025136480.pdf

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/025136479.pdf/$file/025136479.pdf

Source: http://www.asic.gov.au/asic/asic.nsf/byheadline/Enforceable+undertaking+register:+list?openDocument

Thanks, Solly!

What's the sentence these days for robbing a bank? Yet, these guys rob their clients by misleading and deceptive practices and get a tap on the wrist?

Question: "Looking at the charge sheet, surely all the Storm Financial advisers could be accused, to a lesser or greater degree, of doing the same thing!" After all, they all sold the "Storm line" to their clients too. I wonder how ASIC differentiates one from the other when selecting certain individuals such as these? No doubt, Doobsy can enlighten us in this regard?

Could it be perhaps that complaints were only lodged by former Storm clients in relation to these individuals? Seems doubtful to me!

Where ASIC is concerned, nothing surprises me any more.

 

[Frank Ainslie]

Why does there have to be a comparison? Storm's situation is unique, even in financial disasters...we have seen the Madeoff affair, Allen Stanford, Westpoint, the collpase of Lehmanns and many more in the past few years. All were different, but the similarity is all left a trail of devastation, just like Storm did.

We have seen Stormers compared to holocaust victims, rape victims and victims of the Costa Concordia crash. What's next....the Japanese tsunami, September 11? I can't wait to find out. Comparing apples with oranges. Whats the point? Its ridiculous.

The analogy with the Costa Concordia is just as ludicrous as the claims that Stormers' CHOICE to invest EVERYTHING in a high risk strategy, and their CHOICE not to do independent research, and their CHOICE not to monitor their investments closely, and their CHOICE to believe everything Storm told them even though some had a gut feel all was not right, their CHOICE to accept the debt the bank threw at them, and their CHOICE to throw common sense out the window had nothing to do with their ultimate loss.

Hi SJG 1974

You are vexing to the spirit and no mistake!

"Why does there have to be a comparison? Storm's situation is unique, even in financial disasters...we have seen the Madeoff affair, Allen Stanford, Westpoint, the collpase of Lehmanns and many more in the past few years. All were different, but the similarity is all left a trail of devastation, just like Storm did."

Do you consider the individuals that were victims of these particular events “greedy” or “gullible" too or were they just unfortunate? That was a rhetorical question by the way because I already know your answer to this. Your mantra is unforgettable!

We have seen Stormers compared to holocaust victims, rape victims and victims of the Costa Concordia crash. What's next....the Japanese tsunami, September 11? I can't wait to find out. Comparing apples with oranges. Whats the point? Its ridiculous.

Any argument that people present to you on this forum from our side would in your eyes be ridiculous because you have closed your mind long ago. This is evident because you concede nothing in your statements and insist that your position is the correct one and nothing else is worthy of consideration! I think it’s called being an “unmoveable object!” Woe betide anyone if you ever get a jury ticket because you would have already made your mind up before the trial began and nothing would ever shift you.

The analogy with the Costa Concordia is just as ludicrous as the claims that Stormers' CHOICE to invest EVERYTHING in a high risk strategy, and their CHOICE not to do independent research, and their CHOICE not to monitor their investments closely, and their CHOICE to believe everything Storm told them even though some had a gut feel all was not right, their CHOICE to accept the debt the bank threw at them, and their CHOICE to throw common sense out the window had nothing to do with their ultimate loss.

What really are you and some others on this forum trying to prove by persisting with this line? Whatever the reason for any investor to invest in the share market, he or she has a right to be protected under the law. They also have a right to expect that all parties handling their monies will ensure that they do everything possible to safe-guard their assets.

Your continuing attack on ‘Stormies’ when the real villains have been identified suggest to me that you resent anyone with more money than you and can’t wait to see them fall. Now you going to tell me how rich you are, no doubt!

Everyone is entitled to have their views and I respect that. However, your views are so jaundiced as far as ‘Stormies’ are concerned that they defy logic. What you seem to forget is that 75% of people that lost everything when Storm collapsed were past retirement age. They had been working all their lives to live their dream and leave something to their grand kids. To do this they had to make sacrifices along the way and much of this was in time spent to achieve their financial goals. They were certainly not as you and others have portrayed on this forum, “money grubbing” individuals that wanted to gamble with their futures. Helen and I are two of them!

Incidentally, it could easily have been your parents that now find themselves in this mess! For that matter, it could easily have been anyone's. I wonder what your attitude would have been then? "On no! My parents are different!"

Therefore, I suggest that you get off your bandwagon and start directing the blame where it truly belongs. Unless you do, you will continue to support a corrupt society where Banks and rogues in the guise of financial advisers roam freely with the sole intent of pooling the wool over the eyes of the general public and shafting them for everything they have.

The older generation didn't win their freedom and yours by fighting through wars and depressions to now have this society fleece them. That's why we are fighting now! It's called "having a set of principles and values". Something that some of the younger generation of today could well do with!

 

[Harleyquin]

SJ you may be able to dismiss the lack of ethics by the financial planner and banks so easily by simply blaming their clients. Personally I think it's about time that you and others like you accepted that they had a responsibility to their clients.

 

[SJG1974]

OK let me be blunt.

1. I do not for a second believe anyone who says they signed on to the strategy thinking it was low risk. I don’t buy it. To be frank, if anyone on this forum thought that double gearing into shares is low risk, then they are incredibly naive or liars. And I don’t think people are that naïve.

And on that, just when did clients realise that their supposed low risk strategy was in fact high risk? When their portfolio was down 10%, 20%, 30%, 40%, 50%, 60%? When $1 million of investments had been turned into $100,000? When did the penny finally drop? And what did they do about it? Oh yeah that’s right, just stuck it out until the bitter end. Yep, that makes sense.

2. I also don’t believe people who say there was no carrot dangled in front of them. People don’t pay hundreds of thousands of dollars in fees to simply receive financial advice. You don’t pay hundreds of thousands of dollars in fees to have a third party protect the money you already have. Go back through the website…it talks about putting you in touch with strategies that are the domain of the rich. Again, I don’t buy it.

3. Yes the strategy was flawed, but I also don’t entirely buy the line that Storm was out to fleece its clients. We have heard that many Storm advisers invested in exactly the same strategy as the clients did. Why, if they KNEW the strategy was flawed would they invest in it themselves? Why would they risk their own livelihood in undertaking the same strategy you did? I truly believe that they thought it was a legitimate strategy. This makes them bad financial advisers…it doesn’t mean they were out to solely screw clients.

So where does that leave me? It leaves me believing that clients knew they were taking a risk with what they were doing. They took the risk because the rewards on offer were so attractive. It doesn’t mean they were greedy, it just means they were prepared to take a risk to chase a better life. A big risk. Risk vs reward…a concept as old as investing itself.

And now that they have lost everything, they “play dumb”…I didn’t know it was risky, I only wanted a conservative strategy, I didn’t want to make money, I only wanted to protect what I had. Again, I don’t buy it. Not for one minute. And you don’t keep believing it as your wealth gets eroded by the day over a 12 month period….as the debts mount and the investments fall. Again, people aren’t that naïve.

Its kind of funny that throughout this forum Stormers have been passionate in questioning the motives of the banks and Storm in all of this, of the key players and how their reason for being is to screw people over. They have questioned the truthfulness of the things key players have said. Yet we are expected to believe everything Stormers have said about their motivations and involvement with Storm because they are the victims. Again, to be blunt, just because people are “victims” doesn’t mean I believe everything they say, particularly when it flies in the face of common sense.

To repeat myself for the umpteenth time, IF the banks and/or Storm are proven in court to have broken the law, then I have no issue, NO ISSUE AT ALL with them paying the price for this. NONE WHATSOEVER. No matter what the industry, no matter what the company, consumers should expect that the laws will be followed.

I have no issue with people pursuing justice and compensation. None whatsoever. I would do the same if I were in your shoes.

The thing for me is that the banks and Storm didn’t CAUSE 100% of Stormers losses...clients agreeing to go ahead with a risky strategy and a small matter of a GFC played a very big role, yet people are prepared to blame them 100% for the losses they suffered. And I don’t think that’s right.

Stormers made the choice to take up the strategy. They took the risk. They stuck with a “conservative” strategy as their losses kept on building up over time when they could have jumped out. They should be prepared to accept at least some responsibility for what happened…not full, but at least some, because everything they did, from taking on the strategy, to borrowing from the bank, to investing in shares, to sticking it out as their investments fell over time, it was their choice to do….no one else’s.

 

[Frank Ainslie]

To SJG 1974

"OK let me be blunt.

1. I do not for a second believe anyone who says they signed on to the strategy thinking it was low risk. I don’t buy it. To be frank, if anyone on this forum thought that double gearing into shares is low risk, then they are incredibly naive or liars. And I don’t think people are that naïve.

And on that, just when did clients realise that their supposed low risk strategy was in fact high risk? When their portfolio was down 10%, 20%, 30%, 40%, 50%, 60%? When $1 million of investments had been turned into $100,000? When did the penny finally drop? And what did they do about it? Oh yeah that’s right, just stuck it out until the bitter end. Yep, that makes sense.

2. I also don’t believe people who say there was no carrot dangled in front of them. People don’t pay hundreds of thousands of dollars in fees to simply receive financial advice. You don’t pay hundreds of thousands of dollars in fees to have a third party protect the money you already have. Go back through the website…it talks about putting you in touch with strategies that are the domain of the rich. Again, I don’t buy it.

3. Yes the strategy was flawed, but I also don’t entirely buy the line that Storm was out to fleece its clients. We have heard that many Storm advisers invested in exactly the same strategy as the clients did. Why, if they KNEW the strategy was flawed would they invest in it themselves? Why would they risk their own livelihood in undertaking the same strategy you did? I truly believe that they thought it was a legitimate strategy. This makes them bad financial advisers…it doesn’t mean they were out to solely screw clients.

So where does that leave me? It leaves me believing that clients knew they were taking a risk with what they were doing. They took the risk because the rewards on offer were so attractive. It doesn’t mean they were greedy, it just means they were prepared to take a risk to chase a better life. A big risk. Risk vs reward…a concept as old as investing itself.

And now that they have lost everything, they “play dumb”…I didn’t know it was risky, I only wanted a conservative strategy, I didn’t want to make money, I only wanted to protect what I had. Again, I don’t buy it. Not for one minute. And you don’t keep believing it as your wealth gets eroded by the day over a 12 month period….as the debts mount and the investments fall. Again, people aren’t that naïve.

Its kind of funny that throughout this forum Stormers have been passionate in questioning the motives of the banks and Storm in all of this, of the key players and how their reason for being is to screw people over. They have questioned the truthfulness of the things key players have said. Yet we are expected to believe everything Stormers have said about their motivations and involvement with Storm because they are the victims. Again, to be blunt, just because people are “victims” doesn’t mean I believe everything they say, particularly when it flies in the face of common sense.

To repeat myself for the umpteenth time, IF the banks and/or Storm are proven in court to have broken the law, then I have no issue, NO ISSUE AT ALL with them paying the price for this. NONE WHATSOEVER. No matter what the industry, no matter what the company, consumers should expect that the laws will be followed.

I have no issue with people pursuing justice and compensation. None whatsoever. I would do the same if I were in your shoes.

The thing for me is that the banks and Storm didn’t CAUSE 100% of Stormers losses...clients agreeing to go ahead with a risky strategy and a small matter of a GFC played a very big role, yet people are prepared to blame them 100% for the losses they suffered. And I don’t think that’s right.

Stormers made the choice to take up the strategy. They took the risk. They stuck with a “conservative” strategy as their losses kept on building up over time when they could have jumped out. They should be prepared to accept at least some responsibility for what happened…not full, but at least some, because everything they did, from taking on the strategy, to borrowing from the bank, to investing in shares, to sticking it out as their investments fell over time, it was their choice to do….no one else’s.

Okay! You have left no one in any doubt how you feel. You are entitled to your opinion and I think we must all respect that, daft as it appears to us in the present circumstances. Why do you therefore feel that you have to repeat this mantra ad nauseam? After all, you claim that its starting to tire you out! If you want to think this way, so be it! Frankly, who cares what you “buy” anyway? We certainly don’t! Give yourself a rest by all means because you thoroughly deserve one.

We, of course, are entitled to our opinion too and, needless to say, it doesn't agree with yours.

Where Storm is concerned, my argument has always been that we ‘Stormies’ had no reason to suppose that we could not TRUST Storm to do the right thing by us. We had no reason not to TRUST the advice that firm gave us. We had no way of KNOWING that Storm’s “triggerpoints” would not be acted on. We had no way of KNOWING that Storm would go against our wishes and place our assets at ‘high risk’. (This was not what we agreed to when we signed up with Storm - our agreement was for "low risk" with "growth over the long term"). We had no way of KNOWING that Storm had formulated separate agreements with the Macquarie Bank and the CBA that would dictate how they all reacted in a crisis. We had no way of KNOWING that Storm’s emergency plans were non-existant. We had no way of KNOWING that Storm’s PI insurance wasn't worth the paper it was written on. We had no way of KNOWING that ASIC’s compliance audits were inadequate. We had no way of KNOWING that the Government’s regulations at that time in relation to the financial sector did not fully protect investors against the likes of Storm. Therefore, there’s no bloody way I’m going to concede that I or any other "Stormies' were in any way to blame for what these rogues and their accomplices, the Banks, did to us. They are all now in the dock, not us, and no one should forget this. If there’s any recriminations involved, it should lie squarely with them for using our assets for their own selfish ends.

I therefore suggest that you stop twisting the facts to suit your argument or deem to tell us what our motivations were when we signed up with Storm. Nor try to tell us what we did and didn't do at that time. How can you when you weren't there?

The enlightened ones on this forum that consider themselves far too intelligent to be taken in by Storm tend to forget that when we invested in Storm, that financial advisory firm had a track record; were sanctioned by ASIC; had affiliations with major banks; had a considerable data-base of clients; had sizeable assets; and were touted by all as a progressive financial advisory firm. We were assured that Storm had the latest software and systems that would keep them and us abreast of our financial position at all times. We now know that we were lied to from "go to woe!".

Today, the enlightened ones on this forum call us financial speculators that were blinded by greed. Why? Because they have the benefit of hindsight which, we all know, is a wonderful thing! It’s a pity that no one in the financial industry or ASIC voiced their concerns during the years before the Storm collapse so that we could have been warned well in advance?

You are now trying to paint a picture that is completely at odds with the facts. I therefore suggest that you take the time to read through the Worrells report, the PJC findings, the transcripts taken when the Banks' executives appeared before the PJC, the ASIC reports and so on. Nowhere in any of this documentation does it describe Storm's investors as "high fliers" and "risk takers" and seek to lay some of the blame at their door! I prefer to rely on this body of evidence rather than consider anything you have to say seriously particularly when such comment is ill-informed.

Having one's head in the sand does not allow anyone to see what is going on around them. Then again, perhaps they prefer the sand to the truth anyway?

In the end the court will decide whether the Banks and Storm’s directors for that matter have a case to answer. Not you or anyone else on this forum! Therefore you can keep repeating yourself to you are blue in the face. It will have no impression on us because your opinion doesn’t matter one iota in the end. It's just your opinion and carries no weight at all.

The only thing that matters to ‘Stormies’ now is our forthcoming court case. We will place our faith in the Law because at the end of the day it is there to protect people like us; not those that have done the wrong thing by us. We are content to let those that are better equipped to judge and decide who is right and who is wrong, laying the blame accordingly. I seriously doubt though that no matter what the outcome, any court will rule that we Storm investors were a bunch of "risk takers" that deserved everything we got! Justice may be blind at times, but she will never be as blind as those that refuse to see on this forum, no matter what is said or the body of evidence that is presented to them.

 

[doobsy]

Opinion from the darkside

Having read the last 2 posts I think I can offer something.

Firstly

Where Storm is concerned, my argument has always been that we ‘Stormies’ had no reason to suppose that we could not TRUST Storm to do the right thing by us. We had no reason not to TRUST the advice that firm gave us.

No problem there, as a planner I can see the reasons people did trust Storm. It was all very slick and they had made sure the sales process ensured the ducks all lined up nicely.

We had no way of KNOWING that Storm’s “triggerpoints” would not be acted on.

No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.

We had no way of KNOWING that Storm would go against our wishes and place our assets at ‘high risk’. (This was not what we agreed to when we signed up with Storm - our agreement was for "low risk" with "growth over the long term").

There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily.

We had no way of KNOWING that Storm had formulated separate agreements with the Macquarie Bank and the CBA that would dictate how they all reacted in a crisis. We had no way of KNOWING that Storm’s emergency plans were non-existant. We had no way of KNOWING that Storm’s PI insurance wasn't worth the paper it was written on. We had no way of KNOWING that ASIC’s compliance audits were inadequate. We had no way of KNOWING that the Government’s regulations at that time in relation to the financial sector did not fully protect investors against the likes of Storm.

I agree

Therefore, there’s no bloody way I’m going to concede that I or any other "Stormies' were in any way to blame for what these rogues and their accomplices, the Banks, did to us. They are all now in the dock, not us, and no one should forget this. If there’s any recriminations involved, it should lie squarely with them for using our assets for their own selfish ends.

That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses. Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum.

No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.

2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem.

 

[doobsy]

Just to stress a point to the rest of the forum about borrowing to invest

On some really simple calculations using Excel - based on end of financial year numbers for the stock market, home loan interest rates and margin loan interest rates, IF a client invested $1M on 1 July 2006 and borrowed $1M either through a home loan or a margin loan to add to that investment and the client simply rode out the markets (no margin calls, no buying or selling at any stage) then:

Growth/Loss in the investment + income from dividends - interest costs shows the client would be down $552,000 on their $1M if they used a home loan and about $650K if they used a higher cost margin loan.

To even get back to square 1 - Markets would need to rise to around 6100 points should they continue to pay the same dividend and interest rates remain at similar levels to now.

On 8% growth and 4.5% dividend this would take another 4 years.

Result for the client - 10 years to break even in a market that has risen 20%.

It is amazing what happens when your first few years are non performing or worse go backwards when using borrowed money.

 

[SJG1974]

Fair enough Frank. Fair enough.

We are at odds and that won't change. No one has tried to put you in the dock. All I am trying to do is show that you made choices and most people take responsibility for the choices they make. If you don't think you should then fair enough. We have been through this so many times my head is spinning. So lets leave that there.

You have a vested interest in this, I actually don't. So I think the biases in all this are really coming from your side of the fence, not mine, given you have so much riding on it.

One final point I would like to raise, and question I would like to ask. You and others have said ad nauseum that you thought gearing into shares was low risk. As I have said, I don't know how anyone with your years of worldly experiences could possibly think that, despite what Storm or anyone told you. Anyhow that’s by the by.

So you borrowed against your home, borrowed again through the margin loan, and plonked it all into shares....thereby investing your life savings in a "low risk" strategy (just read that again and see how ridiculous that all sounds- yet that is what you will have us believe).

As has been pointed out, the stock market didn't just fall off the edge of a cliff overnight, it fell over a period of 12 months. From the highs of late 2007, the market was down by 20% by the start of March 2008 (and given the powers of gearing, your portfolio would have been down by significantly more by then).

I am guessing that you wouldn't expect to lose more than 20% in a matter of months by taking on a low risk strategy. So you should have known full well by this time (and much earlier in reality) that this wasn’t a low risk strategy at all.

So my first question is, when did you start to realise that this low risk, conservative gearing to the gills into shares strategy was nothing of the sort?

And secondly, upon realising it was not low risk (and given you have been very firm in saying you did not want a high risk strategy and didn’t think you were getting one) why did you elect to stay invested and to even increase risk by taking on more debt along the way?

Why didn’t you bail out at the first sign that things weren’t what you had been led to believe they were?

 

[Harleyquin]

It's all very well to quote all these wonderful figures in hindsight. Storm did the same. Those of you who seem to know or think you know what you're talking about all do the same thing. You'll have to argue those points with the storm financial planners.

It certainly wasn't as simplistic as you choose to put it. What proof have we got that you know what you're talking about. Your long winded so called explanations mean nothing to me.

 

[Garpal Gumnut]

Confucius said.

By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest.

gg

 

[Frank Ainslie]

doobsy;694705]Opinion from the darkside

Having read the last 2 posts I think I can offer something.

Firstly

Where Storm is concerned, my argument has always been that we ‘Stormies’ had no reason to suppose that we could not TRUST Storm to do the right thing by us. We had no reason not to TRUST the advice that firm gave us.

No problem there, as a planner I can see the reasons people did trust Storm. It was all very slick and they had made sure the sales process ensured the ducks all lined up nicely.

We had no way of KNOWING that Storm’s “triggerpoints” would not be acted on.

No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.

We had no way of KNOWING that Storm would go against our wishes and place our assets at ‘high risk’. (This was not what we agreed to when we signed up with Storm - our agreement was for "low risk" with "growth over the long term").

There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily.

We had no way of KNOWING that Storm had formulated separate agreements with the Macquarie Bank and the CBA that would dictate how they all reacted in a crisis. We had no way of KNOWING that Storm’s emergency plans were non-existant. We had no way of KNOWING that Storm’s PI insurance wasn't worth the paper it was written on. We had no way of KNOWING that ASIC’s compliance audits were inadequate. We had no way of KNOWING that the Government’s regulations at that time in relation to the financial sector did not fully protect investors against the likes of Storm.

I agree

Therefore, there’s no bloody way I’m going to concede that I or any other "Stormies' were in any way to blame for what these rogues and their accomplices, the Banks, did to us. They are all now in the dock, not us, and no one should forget this. If there’s any recriminations involved, it should lie squarely with them for using our assets for their own selfish ends.

That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses. Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum.

No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.

2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem.

Hi Doobsy,

Need a light over there? On the dark side, that is!

“No you did not know that but ANY personal monitoring would have had plenty of alarm bells ringing.”
Don't financial advisers have any responsibilities whatsoever? Why would we pay a fortune to Storm and then be expected to do Storm’s job for them? It was Storm’s business to manage our investments and advise us of the situation, not the other way around. If they had done so at the start, we could then have been in a position to take any remedial action Storm deemed necessary. Instead, Storm left it all too late and the rest as they say is history.

Is that what you do with your clients by the way? Take their money and then leave them to fend for themselves? Would you seriously expect your clients to act independently of you? People were certainly concerned at the time, but it would be fair to say that very few had any idea of what was going on at the end. Storm didn’t tell us until we were well under water.

"That is well and good but to an average person you were willing to borrow money that was not yours to invest into an asset class that has a history of gains followed by losses."
Com’on! What would the average man in the street be expected to know about whether an asset class had a history of gains and losses? You can’t approach these issues based on your own personal knowledge of the financial sector. Rather, you must approach them based on what common folk are expected to know! You must be mindful of why people went to Storm in the first place. They simply were not investment savvy (and that includes me) and relied entirely on Storm for guidance and advice. That’s why people employ financial advisers to start with because they lack the necessary knowledge to invest themselves. That's the wise thing to do although we are all lambasted now because we did just that. That’s what professionals are there for after all, and that is why they get paid.

Let’s turn this question around for the moment. Do you not think that Storm’s clients had the right themselves to expect that Storm and the Banks had sufficient awareness of “a certain asset class that has a history of gains followed by losses” and would expect them to use some prudence when recommending such? After all, Storm was giving the advice and the Banks were lending the money. By the way, I see no mention by you of the fact that the Banks had no compunction about lending the money to Storm’s investors in the first place. Furthermore, I don’t see anyone on this forum calling the Banks gullible for running such risks?

Our lawyers, of course have an expression for this type of lending. It’s called “imprudent lending” which is in contravention of their banking codes. Just another misdeed among many that the Banks have been guilty of but whose counting?

“There was a Statement of Advice provided saying that you were borrowing money to invest 100% in Australian Shares. It may have been sold as "low risk" but I think forum posters are allowed to have some disbelief that the whole thing was "bought" so easily."

Why? You and the rest in your industry bought it! I didn’t hear any cries of protest then! You and other people in the industry were quite happy to go with the flow when the markets were up.

SJG1974’s claim that we were all seeking to make a quick buck in Storm makes no sense at all. You only have to look at the age of most of Storm’s clients to understand that they were elderly people that had no intention of gambling with their hard earned money that it had taken them a life time to earn. Rather, they were looking for a safe haven where there investments could grow over time.

Helen and I were already rich. Why would we therefore risk our money in a "high risk" scheme knowingly? Such a notion is completely ludicrous and defies logic.

"Should you get bailed out 100% because you picked a bad time and you sustained losses is the question presented by the forum."

No one can deny that the GFC was ruinous for many people that had invested. However, if our case was based on this fact alone, the Banks and Storm’s directors wouldn’t be facing charges today. Therefore your choosing to use the words “because you picked a bad time” is totally misleading and you know it.

As for "getting bailed out 100%" you make it sound like a crime? Surely wrongdoers, be they the Banks, Storm or anyone else cannot expect that if they put everything right, it is then ‘okay’, and they can simply walk away without any form of punishment or obligation to pay compensation. We will have spent four years of our lives waiting around before these matters go to trial. What sort of compensation do you feel is warranted for placing us in this position to start with and then dragging this all out? Any compensation we get now over and above what we would have received at the time is not unjust in the circumstances. Wrongdoers need to be punished and their victims need to be compensated. That's the law. It's called Justice in some quarters.

If a motorist through his own fault runs over a pedestrian and breaks the legs of that person in so doing, should the person that has been injured only be compensated for his broken legs or should he also get compensated for time lost in his work, and pain and anguish?

"No one argues that compensation is due for wrongdoing. My questions to you and any other stormie who is brave:

1. Do you acknowledge that if the storm systems had worked and you had been sold down at the trigger points you would still have sustained SERIOUS losses and most of your capital would be gone.

2. Do you acknowledge that you knew you had borrowed money to invest and as the market fell this meant that your capital was disappearing as the borrowings would need to be repaid at some stage. Or did you simply believe Storm when they said markets would bounce and therefore it would not be a problem."

“Any Stormie who is brave?” Okay! I’ll try and find the courage from somewhere!

With respect, the two questions you have posed are purely hypothetical and speculative. Therefore, they have no place in any discussion relating to our case. We are not dealing in "What ifs" but rather in “What actually occurred”. We are not dealing in “What we should have done” but rather “What others did!” This is all about what the parties responsible for handling our investments did at that time or more to the point, what they didn’t do. Trying to include scenarios that didn’t occur or draw conclusions based on our supposed behaviour is an exercise in futility and has no relevance to our legal position whatsoever. I suggest that we therefore stick to what actually occurred as opposed to dealing in suppositions.

 

[Harleyquin]

GG I've heard that Confucious quote before and love it. We've all had time to reflect on what it has meant to be caught in this storm...and it's a well known fact that reflecting / writing reflective journals are a great way to cope with what life throws at you.

One of my reflections is " if storm and the banks working along side them had the experience they were supposed to have then this shouldn't have happened"

Or perhaps another reflection might be " these people all had the experience they needed to rip everyone of their clients off..". I could go on but I'll stop there!!!