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Storm Financial Group

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GumbyLearner said:
Someone did indeed drop the ball. But I think what's more important is to play the ball and not the man!
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I wasn't playing the man instead of the ball.
I simply used the story of one man to highlight a problem that seems to have been a common factor in Storm clients getting into trouble.....namely, that many of them had a poor understanding, and in some cases virtually no understanding at all, of the effects of gearing, the risks it involved as well as the potential rewards it offered, and what level of gearing was appropriate to their individual circumstances.
Discussion of this sort of stuff on the forum will hopefully make Storm victims more financially savvy so they won't repeat their mistakes next time around. And for some of them, those who are young enough to start again, there will be a next time.
 

I was equally disappointed as well. I suppose that CBA maintaining the no comment stance is because of the potential proceedings.
Maybe the 4 Corners investigation with Chris Masters will be more in depth.

I spent some time today talking with an ex-storm client, they saw the report and are still bewildered that their money is gone. The first they knew that things were coming off the rails was when they got a call from Colonial. They were always assured by Storm that they'd never get a margin call or be at risk of losing their house. Of course there is nothing in writing. They really don't even know what is in their SoA. They were just baffled by the hype and caught up in the belief that their future was safe and secure. Now they feel really stupid and embrassed about it all and very very down.
They asked for help but the only thing I can give them is a hard case of reality, their only hope lies within themselves. They will never have the multi millionaire life style they envisaged, but just maybe they are "richer" with out it.
 
Another Article by Michael West

Storm warning of 'seismic consequences'

"AS THE banks were closing in and desperate clients had twigged to their impending ruin from a plunging stock market and its effect on their margin loans, the founder of Storm Financial Group wrote to the head of the Commonwealth Bank cautioning "seismic consequences" if the bank did not help.

It is understood Storm separately asked for an unsecured loan of $60 million from the bank to dig its clients out of trouble until the market recovered."

The full story is here:


http://business.theage.com.au/business/storm-warning-of-seismic-consequences-20090128-7s1v.html
 
Storm Financial fallout – short on salvation

"MORE than 500 people crushed by the Storm Financial meltdown crammed a Catholic church hall at Kirwan last night to hear a message of hope for salvation.

If sheer numbers were any guide, then as Townsville Mayor Les Tyrell told the meeting, they could feel some comfort they were not alone.

Yes, there were remedies, they were told, legally and through other means – because financial planner Storm Financial, at best, had acted irresponsibly. The banks were also at fault, they were told.

However, lawyer Damian Scattini of litigation specialists Slater and Gordon told them straight that there would be no full recovery from positions where they had lost homes and lifesavings.".....................



"Mr Scattini said it was his guess that Storm Financial would be liquidated.

He said Storm Financial did have indemnity insurance but that the aggregate figure of coverage would `spread thin on the toast' for clients. Also, the insurance did not cover for acts of dishonesty which were now being revealed in their investigations."



Tony Raggatt's full story is here:

http://www.townsvillebulletin.com.au/article/2009/01/29/35735_hpphoto.html
 

Thats dissappointing but not unexpected - most PI policies default to around $20 million (or is it $40 million?). Either way with it sounds like at least a thousand people affected we're talking well under $100k per person (even at $40 million its less than $50k if there are a thousand in the queue for compensation). PI was the only likely recourse I could see (and a justifiable one as well by the sounds of it).

Something else that is mentioned in the article is falsification of incomes. It sounds like Storm advisors may have encouraged people to make misleading statements about their incomes to apply for larger loans (this wouldn't surprise me - my experience with mortgage brokers and no-doc loans is that if you have adequate LVR you were able to get finance simply by signing a stat dec and no other proof of income was required). The unfortunate thing is that any investor that signed a stat dec or document that they knew had an incorrect income on it are potentially parties to fraud (I'm not a lawyer so this is just an opinion, but this seems like commonsense). - it would be very hard to defend a case against a bank from that position in my view.

Given that a lot of retirees with low incomes seem to have far more debt than they can afford to repay it would seem that somehow income statements have been produced that don't reflect their true income.

Another possibility is that the high incomes were real, but a large component of the income was based on profits from realised capital gains and from investment incomes.
 
It is a sad ending to see just what happens to people that have very little knowledge of investing. The saddest part is that the same people will be getting told right now we can help you get most of that money back.
 
In the age of technology we live in, there is NO excuse for not being at least a bit financially savvy. There are books, magazines, internet, TV programs daily on investing and wealth building. You would either have to live in a cave or watch the shopping channel 24/7 to not have picked up at least some knowledge.

At the end of the day, investors who borrowed borrowed borrowed are the crux of the problems facing us all ATM. Whether you know it or not ..YOU are affected and picking up the tab for these people, when the debts don't get paid.

They weren't whinging when they thought the $ were rolling in, they were happy to keep on borrowing, without knowing what they were doing, if you ask them! Oh please, I get in a car and have no idea how to drive, I get by on sheer good luck till I hit a pole, and then plead I didn't know what I was doing!

I'm over it, used to have sympathy but the FACTS are they are all dragging everyone else down with their greed!

There are going to be many many more before this is over. With everyone running to the court house to sue everyone else over their greed and stupid decisions ... Wonder who the last man standing will be?
 

I’ve mentioned it before and I’ll mention it again,

Why should the taxpayer bail out storm clients who where more than happy to claim huge interest cost deductions on double geared portfolios during the good times. As far as I’m concerned this type of aggressive strategy is a burden to our tax system, why should the taxpayer now cough up bailout?

There are more important things to worry about like hospitals, welfare , public transport ect. These are the areas that need cash injections.
 

I strongly agree!

I fnd it quite annoying that people & companies that got it wrong expect (and some succeed) to be bailed out - whilst those that acted more responsibly, even with some (but sensible) leverage may get nothing! Any government initiatives using tazpayer monies should be equitable! Unfortunately politics rears it head(s).
 

Absolutely agree there cutz, as sad as the situation is for some we have to remember that history is littered with people who have lost most or all of there life savings due to poor investments decisions, they should leave any possible recovery up to the courts or insurance but don't use taxpayers money to bailout storm clients.
 

If Mr & Mrs Cassimatas are so concerned about their clients, lets see them put all their personnel assets in the pot for their clients who lost all due to a "Black Swan Event". The Melton Terrace house is on the market. Let's see where the proceeds go.
 
Cutz, how true, what up sets me is that we help the first ones that go's to the wall, the first ones to go to the wall is the weakest one, let them burn, look after the strong with good management.
 
We did not see any one from the Comm Bank when we applied for our investment loan. We were interviewed by Storm and they applied on our behalf.
I applied to the bank to have a copy of the form and it arrived today.
This form has been filled in by Storm and does not contain our signatures.

There are a few anomalies but I do not know whether they are significant or not.

1) When we provided proof of income I asked that mine be downgraded on the loan application because I had a larger than normal income that year and that income would not continue. The higher income was listed on the submitted form.

2) No dependent children were listed yet we have one and he is very costly due to a chronic illness.

3) No other personal debts are listed yet I told the advisor that I owed my Mother $25 000.

4) Under a column entitled other income, $1 850 a month is listed yet aisde from our wages we have no other income at all. I have no idea where this figure has come from.



I have now come to terms with my heavy debt ($630 000) and admit that I was financially naive when it came to margin loans but I will never let Storm off the hook because they told us so many lies. I still hate them.
 

I agree.

I wrote him a letter enclosed a photo of my only child, told him of my son's illness (awaiting a lung transplant) and asked him for some money (desperate times call for desperate measures).

Let me tell you... all shame goes out the window when you go broke.

I did not get a reply.
 
Cassimatis line has changed. He states in the radio interview
http://www.abc.net.au/local/audio/2009/01/28/2476149.htm?site=northqld
and several times in the media blaming commonwealth bank and Quote" if the banks rang people when they should have"
Insenuating that the banks should have sold down people before they went into negative equity......
But in the storm investor update which happened late last year he told people if they had received phone calls from the bank that they should refer the bank back to storm. That they would handle everything and that the bank shouldn't be contacting anyone.
They were the ones stalling in the sell down process.
 

I am a Storm client and I agree.
I will not join SICAG because they blame the banks and I do not think they are at fault. I will not join a class action either if they are to persue the banks. I will if they chase the Storm executives though. I do not expect to see any money and do not care but I would love to see Mr C go to jail and some of the advisors lose their licences.

As for Mr C asking for the govt to help us out. It will never happen and we all know it including him. He is just trying to deflect the spotlight from himself.


Come on Mr C I have admitted to being a fool to invest in this way and have accepted my debt. Why can't you admit you're a crook for having your advisors lie to us all.
 


I understand your position regarding joining a class action.

I suppose it's over to the regulators and legal system to make a determination about this event.
The system may not be perfect, but it's the only one we've got.
I just wish it would move at a faster rate.
 
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