Storm Financial Group

[pilots]

Sorry but your argument falls down once you accept that the people in Storm were conned. People went to Storm for financial advice and were deceived. That's the issue here, not their motivation for using the services of Storm which you have assumed was greed. Incidentally, this is an assumption rather than a fact! The law doesn't work on assumptions although the CBA resolution scheme seems to be one exception.

There is no excuse for conning thousands of elderly people out of their life savings! If people in our society can condone such behavior, then I'm afraid they are as morally bankrupt as the rogues that are in the dock.

At the end of the day this is about wrongdoing, pure and simple. I can just see the Judge's face if one of the lawyers from the Banks were to stand up and say, "The fact of the matter, my lord, is that these people that invested in Storm were just plain greedy and should have known that financial advisers and banks can't be trusted! After all, common sense and history tells us that greed is good! My clients (the banks) just acted on their primal instincts! After all, why do old people need money at their age? They'll all be dead shortly anyway!"

Silly? Exactly! So let's stay focused on what really happened rather than make it up as we go along!

Frank in my books conned and deceived is the same.

 

[Frank Ainslie]

You're assuming that the adviser you hired to investigate Storm did their job the way you expected them to (I see a pattern forming here). There are two possibilities - One is that, now hold on, this might come as a shock to you - the other adviser didn't do their job properly. The other possibility is that the other adviser didn't understand that you thought this was a conservative strategy.

Honestly Frank, what do you stand to gain from convincing other people that it's impossible to determine the risk involved in a strategy? I'm not asking you to admit that you should have avoided being where you are now. You've already explained why you shouldn't have needed to do your own research and I accept your personal opinion even if I don't agree.

Why do you feel the need to go one step further and try to prevent us from helping other investors monitor their risk level? You claim that it's utterly impossible for anyone other than a trained professional to understand the risks of borrowing money. Anyone who thinks they can is apparently "up themselves". Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not. You have never once explained why you think those simple steps won't uncover a high risk strategy. If you can't explain why it won't work, how are you in a position to comment?

Hi Lone Wolf,

You sound as though you are speaking for the financial industry in general?

“Honestly Frank, what do you stand to gain from convincing other people that it's impossible to determine the risk involved in a strategy? I'm not asking you to admit that you should have avoided being where you are now.”

During my business life I was involved in endless strategies where clients were concerned. We moved everything from personal effects to massive generators (60 tonnes and more) to and fro around the world. Among my many positions, I was the General Manager for the Brambles Steamship Joint Venture in PNG. Therefore, I was also involved in strategies to generate and promote business. There were many who invested in Storm that had similar backgrounds so for people to try and group us as financially inept have missed the point completely.

There is nothing wrong with any strategy providing it is honestly thought out and is based on sound principles. However, any strategy can fail because none of us are infallible. Unfortunately, the strategy adopted by Storm was neither honest or sound. Rather, it was one based on the best interests of those that devised it rather than those it was devised for!

Certainly, there are financial advisory firms out there that are honest in their dealings, but they have been roped into the Storm holocaust, being found guilty by association which is most unfair. However, it is now up to the honest ones to rid themselves of those charlatans that exist in their industry. Until then, my message is clear to all would-be investors. “BEWARE!”

Need I also remind you and others that the ONUS is on a professional financial adviser to give honest and sound advice rather than those receiving it. How can anyone evaluate a financial strategy if it has been designed to mislead investors by leaving out the bad news whilst highlighting benefits that are unfounded?

If financial advisers in general cannot be trusted, perhaps they should be made to issue a financial health warning, “USE THIS SERVICE AT YOUR OWN RISK!”

I’m sorry but until those within the financial sector have the will to fix what to me (and thousands of other ‘Stormies’, I dare say) seems like a morally corrupt self–interested industry, I will continue to warn others to go elsewhere.

"Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not." Perhaps someone should have explained that to the various Banks around the world that have plunged the world into financial chaos. If the Banks can’t get it right, what’s the use of explaining it to investors who for the most part will be seeking loans from them?

I know! I know! I’m just another bitter and twisted ‘Stormie’ that just happened to walk in the wrong door and got finacially mugged for his trouble. If I had bothered to look properly then I would have been able to work out that Storm’s advisers were a bunch of con artists. How many clients did Storm have by the way? I think it was between 12,500 and 13,000. It’s a funny thing but when you hear a number like that one doesn’t feel so bad. However, if it happened to you, your parents or someone you know personally, the magnitude is only then brought home to you.

"Why do you feel the need to go one step further and try to prevent us from helping other investors monitor their risk level?" Are you kidding me? The Storm debacle occurred because Storm did not monitor people’s risk levels. They went against our wishes because it suited them to do so because they received financial benefits from doing so. Now you are saying that somehow we should trust others in the industry to act differently! Funny, how that word, “trust” keeps cropping up. What the heck are we paying therm for if we have to do all the work ourselves? Why are we paying them for their expertise if we have to check to see whether what they are telling us is correct? Why do we need financial advisers in the first place if we can do it all ourselves?

"If you can't explain why it won't work, how are you in a position to comment?" I’m in a position to comment because I lost my life savings by trusting financial advisers. Let me say it once again. IT DOESN”T WORK IF THE PEOPLE GIVING YOU FINANCIAL ADVICE ARE LYING THROUGH THEIR BACK TEETH! How can I or any other Stormie ever again trust anyone in the financial advisory sector! Would you if you were in our shoes? But then I forgot, you would never be in our shoes to start with because you are able to spot a con? It’s a pity the thousands that invested in Storm did not have your prescience. That's all I can say! For that matter it's a pity the financial sector in general around the world does not take a leaf out of your book. It's a bloody mess out there and the consumers didn't cause it! Those working in the financial industry did! "Those in glass houses and all that..!"

Have a good day! I'm off now and shall return on Monday week.

 

[Julia]

"Numerous times now people have explained the simple steps that can be taken to determine if a strategy is conservative or not." Perhaps someone should have explained that to the various Banks around the world that have plunged the world into financial chaos. If the Banks can’t get it right, what’s the use of explaining it to investors who for the most part will be seeking loans from them?

You are deluded if you genuinely think the banks that participated in the dodgy subprime loans, and the CDO's and CDS's that followed, were claiming it to be a conservative strategy. Of course it wasn't.
Any more than Storm's 'strategy' of having retirees double gear into the market was.

 

[SJG1974]

You are deluded if you genuinely think the banks that participated in the dodgy subprime loans, and the CDO's and CDS's that followed, were claiming it to be a conservative strategy. Of course it wasn't.
Any more than Storm's 'strategy' of having retirees double gear into the market was.

Yep a lot of the Storm saga revolves around the issue of "conservative vs aggressive".

We have many clients claiming it was sold to them as conservative, Storm have claimed the clients knew the risks. Two sides, two different stories.

We have heard clients on this forum who went into it to build their wealth and knew the risks of gearing into shares, yet many went into the same strategy thinking it was conservative and was designed to protect their money.

And we know that many more people walked away than proceeded with the strategy, so they obviously saw something they didn't like. If it was impossible to uncover the risks, then I wonder why these people didn't jump on board? How could they unravel the mystery?

In simple terms, all a great deal of clients needed to know was that double gearing into shares is not conservative. If they knew this, then many wouldn't have touched it with a barge pole, and they wouldn't be in this mess, like the 3 in 4 who walked away.

Thats all their own research and second opinions needed to uncover, nothing more, nothing less. Is double gearing into shares conservative? Ridiculously simple really. And unfortunately for these people, the answer to that question is not hard to find, if you are prepared to look for it.

 

[bunyip]

Hi Bunyip,

This tendency to put self-interest first manifests itself in the financial sector (financial advisers and Banks) I believe, far more than it does in other service industries because of its very nature. At its centre investors assets act as a light that attracts the harmless and the unsavory that operate within. In my own industry, if we did not provide a service, clients would simply switch to another forwarder. Because we knew this, service was everything although we always ensured that the service was cost effective to both our company and the clients involved. Nobody gave us secret commissions or incentives to use their particular airlines or shipping companies, but rather any incentives that were offered were always passed on to our clients. A completely different mindset seems to exist in the financial sector. Certainly, my business experience was a far cry from what I have now discovered about the financial sector in general.

In other words, we had to put our clients interests first or we would not retain their business. We always worked on the premise that our service fees would give us the necessary profit to operate effectively with a decent bottom line, not an outrageous one! Clients knew up front what they were getting and we knew what we were getting.

The way financial advisers like Storm operated is something else again! I had no experience of such methodology because it is an alien concept in my industry.

Ethics and integrity in the financial advisory industry, it would seem, very much depend on the individual financial adviser concerned. Unfortunately, as we have seen over the years, many in that industry that have failed the test. To my mind, it is an indictment of the advisory industry and the way it functions.

Whatever, it is not something my past business experience would prepare me for! If it had, I wouldn't be in this position today!

So your past business experience didn’t prepare you for Storm, eh Frank?

That sounds like a pretty damn poor excuse to me. You were 65 years old - you’d experienced a decent chunk of life, you’d met a wide cross section of people, you’d heard and read about many a con scheme that separated the gullible and unwary from their money. You’d been a private investor, you’d worked with debt before, you’d dealt with businesses on hundreds of occasions, from the simple act of buying a pair of shoes or a new TV, to more important transactions like buying a house or a car or whatever.

Were things always as they were made to seem by the business that was trying to sell you something? Was every person you dealt with honest and up front and completely on the level with you? If they were, then they were very different to some of the salespeople and businesses I’ve dealt with!
Did all your life experiences teach you nothing about the world, nothing about human nature, nothing about the lack of ethics that we see all around us every day??

You lived through the ‘87 stock market crash and saw how it wrecked people financially and emotionally. In October of 1987 you would have seen how far our market fell in one day, you would have seen all the panic and turmoil on TV and in the papers. Did you learn nothing from that historic event? When Storm told you how their wonderful safety triggers were going to keep you safe in the event of a market fall, did you bother to check into things to find out if they were telling you the truth? Did you consider the possibility of another 1987 style crash, then crunch a few numbers on your pocket calculator to find out how Storm’s safety triggers would perform in that situation?
You almost appear to have had the gullibility and innocence of a small child in your dealings with Storm.....the way you trusted them implicitly and thought they had your best interests at heart, despite the clear warning signs that they were feathering their own nest by getting you to borrow like crazy to fund heavy investment in one of the most risky of all markets, and then creaming 7% off every dollar you invested.

Frank, if it helps you to cope emotionally by telling yourself over and over again that you got fleeced because your experience in business didn’t equip you to see straight through Storm Financial, then so be it.
But if you keep trying get this forum to believe this myth, then people like me are going to challenge you and point out a few facts that you're in denial about.
One of these facts is that your six and a half decades of day to day life experiences should have warned you that we don’t live in a perfect world populated with people of impeccable character. And for that reason, Frank, you should have been far more circumspect and cautious and far less trusting in your dealings with Storm.

 

[pilots]

SJG1974, No mater how hard you try you can not protect the wood ducks, look at the 7:30 report tonight, people invested $150k in a on line betting deal, they now have lost every thing they had including the house. I rest my case.

 

[maccka]

I look forward to a change in the circular nature of the 'discussions' on this thread over the coming months as the court cases progress.

cheers
Maccka

 

[Solly]

I look forward to a change in the circular nature of the 'discussions' on this thread over the coming months as the court cases progress.

cheers
Maccka

Maccka,
The presentation of evidence and subsequent cross-examinations will be of great interest to me.
I'm sure the transcripts will make riveting reading.

S

 

[Judd]

Saves the hassle of extended court action. The effect on the CBA's bottom line? Minimal probably.

http://www.brisbanetimes.com.au/bus...36m-in-storm-compensation-20120914-25xan.html

The Commonwealth Bank has agreed to pay $136 million to compensate thousands of mums and dads who invested in Townsville-based Storm Financial.

The payment, made by the bank without admitting liability, comes on top of $132 million Commonwealth Bank has already paid to the victims of Storm's collapse.

The payment settles a case brought by the Australian Securities and Investments Commission, which claimed CBA was operating an unregistered managed investment scheme. ASIC's case proceeds against Storm - founded by Emmanuel Cassimatis - Macquarie Bank and the Bank of Queensland, on Monday.

More.

 

[Julia]

Saves the hassle of extended court action. The effect on the CBA's bottom line? Minimal probably.

Sure. Just petty cash to the CBA.
However, if I were a shareholder, I'd like an explanation of what this payout is actually deemed to be for.
Is CBA admitting it ran a UMIS, or is it 'go away money' because a drawn out court case would probably cost them the same as the payout and be more damaging to their reputation?

 

[Solly]

Relief for Storm Financial victims

Three years after the collapse of Storm Financial, there is some relief for the victims of one of Australia's biggest financial collapses.
The Commonwealth Bank has agreed to pay another 136 Million dollars in compensation to thousands of investors.

ABC PM abc.net.au

 

[Solly]

Lawyer Stewart Levitt of Levitt Robinson -- who is running a separate Storm class action representing about 300 victims -- said the settlement represented a "disgraceful surrender" by ASIC.

More from Anthony Klan & Jamie Walker @ theaustralian.com.au

 

[Solly]

The Commonwealth Bank said the agreement with ASIC has been reached without any admission of liability.

Source : http://www.couriermail.com.au/busin...-136m-to-victims/story-fn7kjcme-1226474356331

 

[Solly]

Sure. Just petty cash to the CBA.
However, if I were a shareholder, I'd like an explanation of what this payout is actually deemed to be for.
Is CBA admitting it ran a UMIS, or is it 'go away money' because a drawn out court case would probably cost them the same as the payout and be more damaging to their reputation?

Julia

One view is that the payment of another $136 Million to Storm victims, is proof that there was nothing wrong with their conduct in this matter. A return of 55 cents in the dollar appears to be a charitable action and consistent with their Statement of Professional Practice and Customer commitment. However, Stewart Levitt may hold another view.

S

 

[jjtebj12]

Asic were always going to surrender, they always do. But if anyone thinks for one minute that CBA are handing out this money because they are kind hearted - think again. One thing we will not do is roll over like Asic. The general feel from the Class Action is for the case to run its course so the public will know the real story. Then and only then will the opinions of some be changed.

I say thank you to Asic for holding on as long as they did because it enabled us to further strengthen our case!

 

[Julia]

More from Anthony Klan & Jamie Walker @ theaustralian.com.au

That link makes the story only available to subscribers.

Below are some excerpts:

"This is a fair outcome," ASIC chairman Greg Medcraft told The Weekend Australian.
"Many of the Storm (victims) are elderly and retirees and this way we won't spend years in court".

However, ASIC's decision to drop action against the CBA over its role in the Storm Financial disaster was seen by many as a cop out by the corporate regulator.

Lawyer Stewart Levitt of Levitt Robinson - who is running a separate Storm class action representing about 300 victims - said the settlement represented a 'disgraceful surrender' by ASIC.

Mr Levitt said ASIC's statement about the settlement - which was released at 4.22pm yesterday - was highly misleading in terms of the amount of relief Storm victims would receive.

Those investors introduced to Storm via the CBA would not recover 55% of all money they lost, but just 55% of the money they had lost that was borrowed from the bank in the form of margin loans to invest in Storm.

"This doesn't cover any of the investor's savings, any of their superannuation benefits or any money they were encouraged to borrow against their homes to iinvest in Storm" Mr Levitt said.

Good to have Mr Levitt's clarification as above. The ABC's radio story was woefully inadequate. Listening to it, I had no idea what the CBA were paying 55% of, i.e. the home loan, the margin loan, both????

Hope some more Storm investors will give us their response to this latest news.

 

[Solly]

Asic were always going to surrender, they always do. But if anyone thinks for one minute that CBA are handing out this money because they are kind hearted - think again. One thing we will not do is roll over like Asic. The general feel from the Class Action is for the case to run its course so the public will know the real story. Then and only then will the opinions of some be changed.

I say thank you to Asic for holding on as long as they did because it enabled us to further strengthen our case!

jjtebj12

I believe the term for this in the vernacular is "game on".
You are under excellent direction.

S

 

[Mindstorm]

Hope some more Storm investors will give us their response to this latest news.

Hi Julia,

I hope I've done the 'quote' thing correctly.

Link to ASIC Media Release, and their Q&As regarding the agreement that they've reached with CBA:


https://storm.asic.gov.au/storm/sto...d CBA Storm Financial Settlement?opendocument


Sorry, I'm not very 'computer literate', so you may have to copy and paste to your browser to read what's available to all if they visit the ASIC website.

I can't say how anyone else will comprehend these documents, but it's my understanding that it's not only CBA margin loan clients who will 'benefit' from this agreement.

Mindstorm

 

[Solly]

"Storm Financial victim anger over Australian Securities and Investments Commission
ANGRY Storm Financial victims have slammed Australia's corporate watchdog for selling them out in a settlement deal with the Commonwealth Bank."

More by Kay Dibben @ couriermail.com.au

 

[jjtebj12]

jjtebj12

I believe the term for this in the vernacular is "game on".
You are under excellent direction.

S

This whole Asic/CBA deal reeks of another underhanded "back door"deal similar to the Slater & Gordan deal where the only one's who received a fair payout were Slater & Gordan.

Waiting to find out how much Asic received towards their legal bills???