It only takes a comment or two to get a discussion rolling, Skybeau.
Feel free to lead the way – is there some comment you’d like to make in relation to the latest developments in the Storm saga?
Storm Financial Group
- Thread starter Garpal Gumnut
- Start date
It only takes a comment or two to get a discussion rolling, Skybeau.
Feel free to lead the way – is there some comment you’d like to make in relation to the latest developments in the Storm saga?
Sure Bunyip, here is a question.
Why do you think Levitt Robinson have come up with a deal with Macquarie Bank for 42% (ASIC are appealing) for paying class action members and 17% for non paying members? I find this quite odd considering Levitt arranged a deal with the Commonwealth Bank for 55% for class action members. I am just curious to hear what people think.
By the way, I am not a member of the class action group.
Why do you think Levitt Robinson have come up with a deal with Macquarie Bank for 42% (ASIC are appealing) for paying class action members and 17% for non paying members? I find this quite odd considering Levitt arranged a deal with the Commonwealth Bank for 55% for class action members. I am just curious to hear what people think.
By the way, I am not a member of the class action group.
I really have no idea – it doesn’t interest me enough to even form an opinion. Have you attempted to clarify the matter by contacting Levitt Robinson?
I think it's pretty simple to answer the first part of your question Skybeau. 42% goes to paying class action members because they paid to fund the legal action. They acted as fund litigators who would normally claim a large portion of any settlements.
Cheers
Maccka
Most people here aren't Storm investors and the current legal proceedings are fairly boring for anyone without vested interest. Law doesn't get most people off and really there's not much to learn except the extent at which those well capitalized can be hit disproportional to their true blame and how easily crooks tend to get off but that's nothing new to see. If you conclude guilt proportional to the dollar values extracted from the banks in these legal proceedings you need your head checked IMHO. Unfortunately that is largely what I am seeing occur among ex Storm clients, forever helped along by what remains of the Storm marketing machine that are all too happy to take you on in their new financial advice ventures. This thread will fire up if and when Storm directors actually get some of what should be coming for them. Personally I'm not holding my breath though.
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More by Anthony Marx here http://shar.es/xNvaL
Also http://buff.ly/12regUa
and http://buff.ly/12rewCA
And are reminder that this is a Civil case.
Here is the response from ASIC http://buff.ly/12rf9w1
I look forward to this trial.
I am quite sure you're not alone there, Solly! I hope they get at least a fraction of what they deserve :behead:
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DocK I find these words from @couriermail and The Hon. Justice J Reeves rather interesting.
source: http://shar.es/xNvaL
I hope they get all of what they deserve, which in my opinion is serious jail time and a lifetime ban from ever again giving investment advice.
The heat went off them there for a while, and was redirected at the banks because they have the deepest pockets. But it's the Storm mob who are the true culprits in the pitiful debacle that was Storm Financial.
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It would be great to see some serious justice delivered to the Storm Financial Group schemers.
But if so where would that leave the CBA financial planners who also systematically cleaned out their clients in pursuit of extra fees, bonuses and profits ? I found that story equally breathtaking .
Anyone here on the receiving end of their advice ?
http://www.theage.com.au/business/b...nside-the-cba-boiler-room-20130621-2oo9w.html
But if so where would that leave the CBA financial planners who also systematically cleaned out their clients in pursuit of extra fees, bonuses and profits ? I found that story equally breathtaking .
Anyone here on the receiving end of their advice ?
http://www.theage.com.au/business/b...nside-the-cba-boiler-room-20130621-2oo9w.html
A very interesting article, basilio. Even as I was reading of the "sales at all costs" culture rampant at the time, the forgeries, lost files, lack of ethics and the fleecing of the elderly in order to reach a sales target - I was hoping that some of those people in the community who were reluctant to believe that the CBA would stoop to such behaviour in their lending departments in relation to the Storm matter would read the article.
Garpal Gumnut
Ross Island Hotel
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As I said when I presaged this loss of battlers investments.
Going back to my first post
The winners will be ::
Lawyers
Lucky investors with a paper trail
The Banks
Financial Planners
Lawyers.
Prove me wrong.
Anyone on ASF who has a Financial Planner is a muppet.
gg
Going back to my first post
The winners will be ::
Lawyers
Lucky investors with a paper trail
The Banks
Financial Planners
Lawyers.
Prove me wrong.
Anyone on ASF who has a Financial Planner is a muppet.
gg
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It's now almost six years since Storm and their clients bit the dust - I wonder how much longer the lawyers will keep playing this thing along.
Seems to me like the legal eagles see the Storm debacle as a nice little cash cow to be milked for all it's worth.
Garpal Gumnut
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My first post was 31 Oct 2008.
It all blew up shortly after that.
Just on 5 years ago, close to Xmas from memory.
gg
You’re probably right there Maccka, although it does seem longer.
How ever long it is, who would have thought that the legal battles would still be going on today. I always knew it would be a drawn out affair, but I thought it would be over before this. Some people didn’t even think it would get to court at all, as the following link shows.
http://www.couriermail.com.au/news/...eye-of-the-storm/story-e6frep2o-1225945522770
Anyway, it’s been a nice little cash cow for the lawyers who, as law firms do, are playing it out as long as they can. I wonder when the final resolution will be.
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Does anyone know what ASIC stands for? "A SYSTEM IN CRISIS!"
Bernie Ripoll, the Chairman of the Parliamentary Joint-Committee, once said when referring to the people that used the services of Storm Financial, “A fool and his money are soon parted!” What he meant by this is that he was of the belief that people should know what they are doing before they invested. I couldn't agree more! That’s why we sought professional advice from Storm Financial because we thought that financial advisory firm knew what it was doing! That seemed the prudent thing to do at the time!
Mr. Bernie Ripoll’s words would also seem to suggest that Storm Financial’s investment plan was an obvious swindle that anyone with an ounce of sense could see through. My question to Mr. Ripoll is this, “If this were so, why did ASIC fail to identify the apparent flaws in Storm’s business model?” After all, ASIC had been overseeing Storm’s operations for years, and not only did it give it a “clean bill of health” but actually endorse the way Storm operated. How bigger fool is ASIC then?
Where Storm was concerned, investors were soon parted from their money because a fool of a man was in charge of the cash box, and the people that should have made sure they knew what he was doing were looking the other way. ASIC and this government, of which Mr. Ripoll is a part (for now), spring readily to mind.
In my submission to the Senate Inquiry (see 'Submission to the Senate Inquiry into ASIC'.doc)
https://sites.google.com/site/stormingonbanks/asic
I have outlined my reasons why I believe ASIC caused the Storm Financial disaster in the first place by its failure to act responsibly in its past dealings with Storm. Further, that since the end of 2008 ASIC has been more interested in covering up its part in what occurred than it is in protecting the interests of those that suffered as a consequence.
Investors in Australia need to be protected from the excesses that take place in the financial sector that have a devastating impact on peoples’ lives. They need to be protected from those people that take advantage of the loopholes that still exist in the regulations, and ASIC is incapable of doing this. If something is not done to rectify this situation, people will continue to suffer at the hands of financial piranhas.
In my submission, I have raised some important questions that this Senate Inquiry should be asking ASIC to answer. Here are some extracts:
QUESTION: Why didn’t ASIC do something about the way Storm operated before its collapse?
“…following the meeting on 13 November 2007, ASIC was satisfied that Storm’s prospectus accurately set out the material elements of its business model. In addition, Ms Koromilas from ASIC, informed Storm that ASIC wished other advisors had procedures and processes that were as good as Storm’s”
QUESTION: Why were those bank executives that lied before the Parliamentary Joint-Commission never taken to task?
BANK OF QUEENSLAND
Mr ROBERT - “That's the model. 'We will take money from clients, we will leverage the absolute guts out of it, then we'll leverage the unrealised gain out of it. We will give everyone the same advice. ' That is their model-just use that term.”
Mr Kangatharan - “There is no way we could actually become aware of that, based on…”
Mr ROBERT - “I did not ask that; I just asked when you became aware of it.”
Mr Kangatharan - “I think with everyone else, in the papers.”
Mr Liddy - “I think when Storm collapsed.” [PJ-C hearings]
Bruce Auty, (Bank of Queensland's group executive for group risk), told the Storm Financial public examination in the Federal Court in Brisbane that, one of his staff called for a review of loan approvals at the bank's North Ward branch, managed by Matthew Buchanan. But two formal reviews and another three informal inquiries failed to change the way BOQ's North Ward branch operated. The first review in September 2006 concluded that incomes of Storm investors were routinely overstated…”
QUESTION: Why did ASIC permit Storm to have inadequate “Professional Indemnity Insurance?”
In ASIC’s letter to me dated 13/2/2012 it states, “The arrangements that have been set in place by regulations are that licensees that provide financial services to retail clients must hold professional indemnity (PI) insurance cover that is adequate. Adequacy is measured with regard to factors such as the size of the licensee's business (reg 7.6.02AAA).”
In my reply, I said, “The first thing to consider, and it should be an object lesson for all, is that when a scenario such as Storm Financial occurs, it is impossible for claimants to lodge claims until wrong doings are identified which makes a nonsense of PI insurance such as that held by Storm. Not making it compulsory still for financial advisers to hold “run-off” insurance leaves a glaring hole through which more investors will continue to fall like those before them. Further, it brings into question the value of PI insurance in its current form as an effective security device for anyone that is seeking to invest using financial advisers when so doing. This loophole has not been addressed under the new regulations, which means that lessons still have not been learnt.”
QUESTION: Why did ASIC not charge the CBA with (1) breach of contract, (2) unconscionable conduct, and (3) linked credit provider of Storm under section 73 of the Trade Practices Act 1974?
The BOQ and the MBL were charged by ASIC with such so why was the CBA (the worst offender) not so charged?
Mr Bailey, based in Sydney with a Master's Degree in Business Administration, was Head of Credit and Market Risk in CBA between mid-2002 and mid-2004. He had been overseeing the implementation of CALIA, at CBA, a single credit assessment process devised for home investment loans and margin loans, in use at the bank from at least June, 2002.
Recalling his meeting with Julia and Emmanuel Cassimatis, Ian Bailey says he asked them, ‘But when the market goes down, what happens then?' and I was somewhat taken aback by the answer, 'Oh, it's a great time to buy'. That's when I started to think, 'Ok, these are not the sort of people that I am comfortable with, in terms of risk management. I continued: 'Hang on!’. The market has taken a big fall. You now have a margin call. What do you do now?' The answer was, 'You buy more shares.' My brain was going, ‘Great! Where do you get the money from? This doesn't make sense. You should actually be going in the opposite direction, and these guys are saying, 'Charge!'".
QUESTION: Why did ASIC only seek from the MBL and the BOQ compensation for the “Doyles” and not for the rest of the Storm investors who took out loans with these Banks?
“At its meeting on 24 November 2010 …the Commission (ASIC) also decided that it would commence compensation proceedings against parties including the Commonwealth Bank of Australia (“CBA”), Bank of Queensland Limited (“BoQ”) and Macquarie Bank Limited (“MBL”) seeking compensation for investors arising out of the collapse of Storm. The compensation proceedings were not filed immediately, in order to allow a short further period for the commercial resolution discussions to continue.
NB: The above statement says, “…seeking compensation for investors arising out of the collapse of Storm.” It doesn’t state that these proceedings were exclusively for the “Doyles” but rather for all the investors concerned. Yet, those Storm investors who were with the BOQ and the MBL have now been waiting four years for ASIC to do something on their behalf! If ASIC believes that nearly three years from the above date is “a short further period” then I would suggest that ASIC’s thinking is seriously defective.”
QUESTION: WHY HAS IT TAKEN ASIC SO LONG TO GET THE CASSIMATIS INTO COURT?
Could it be that their evidence would further illustrate ASIC’s central role in causing this financial catastrophe, and it wasn’t in ASIC’s best interest to have them appear first?
ASIC’s part in the Storm Financial affair has raised more questions than answers. It’s time those that lost their life savings by investing using the services of Storm Financial had closure. It’s time ASIC came clean!
Bernie Ripoll, the Chairman of the Parliamentary Joint-Committee, once said when referring to the people that used the services of Storm Financial, “A fool and his money are soon parted!” What he meant by this is that he was of the belief that people should know what they are doing before they invested. I couldn't agree more! That’s why we sought professional advice from Storm Financial because we thought that financial advisory firm knew what it was doing! That seemed the prudent thing to do at the time!
Mr. Bernie Ripoll’s words would also seem to suggest that Storm Financial’s investment plan was an obvious swindle that anyone with an ounce of sense could see through. My question to Mr. Ripoll is this, “If this were so, why did ASIC fail to identify the apparent flaws in Storm’s business model?” After all, ASIC had been overseeing Storm’s operations for years, and not only did it give it a “clean bill of health” but actually endorse the way Storm operated. How bigger fool is ASIC then?
Where Storm was concerned, investors were soon parted from their money because a fool of a man was in charge of the cash box, and the people that should have made sure they knew what he was doing were looking the other way. ASIC and this government, of which Mr. Ripoll is a part (for now), spring readily to mind.
In my submission to the Senate Inquiry (see 'Submission to the Senate Inquiry into ASIC'.doc)
https://sites.google.com/site/stormingonbanks/asic
I have outlined my reasons why I believe ASIC caused the Storm Financial disaster in the first place by its failure to act responsibly in its past dealings with Storm. Further, that since the end of 2008 ASIC has been more interested in covering up its part in what occurred than it is in protecting the interests of those that suffered as a consequence.
Investors in Australia need to be protected from the excesses that take place in the financial sector that have a devastating impact on peoples’ lives. They need to be protected from those people that take advantage of the loopholes that still exist in the regulations, and ASIC is incapable of doing this. If something is not done to rectify this situation, people will continue to suffer at the hands of financial piranhas.
In my submission, I have raised some important questions that this Senate Inquiry should be asking ASIC to answer. Here are some extracts:
QUESTION: Why didn’t ASIC do something about the way Storm operated before its collapse?
“…following the meeting on 13 November 2007, ASIC was satisfied that Storm’s prospectus accurately set out the material elements of its business model. In addition, Ms Koromilas from ASIC, informed Storm that ASIC wished other advisors had procedures and processes that were as good as Storm’s”
QUESTION: Why were those bank executives that lied before the Parliamentary Joint-Commission never taken to task?
BANK OF QUEENSLAND
Mr ROBERT - “That's the model. 'We will take money from clients, we will leverage the absolute guts out of it, then we'll leverage the unrealised gain out of it. We will give everyone the same advice. ' That is their model-just use that term.”
Mr Kangatharan - “There is no way we could actually become aware of that, based on…”
Mr ROBERT - “I did not ask that; I just asked when you became aware of it.”
Mr Kangatharan - “I think with everyone else, in the papers.”
Mr Liddy - “I think when Storm collapsed.” [PJ-C hearings]
Bruce Auty, (Bank of Queensland's group executive for group risk), told the Storm Financial public examination in the Federal Court in Brisbane that, one of his staff called for a review of loan approvals at the bank's North Ward branch, managed by Matthew Buchanan. But two formal reviews and another three informal inquiries failed to change the way BOQ's North Ward branch operated. The first review in September 2006 concluded that incomes of Storm investors were routinely overstated…”
QUESTION: Why did ASIC permit Storm to have inadequate “Professional Indemnity Insurance?”
In ASIC’s letter to me dated 13/2/2012 it states, “The arrangements that have been set in place by regulations are that licensees that provide financial services to retail clients must hold professional indemnity (PI) insurance cover that is adequate. Adequacy is measured with regard to factors such as the size of the licensee's business (reg 7.6.02AAA).”
In my reply, I said, “The first thing to consider, and it should be an object lesson for all, is that when a scenario such as Storm Financial occurs, it is impossible for claimants to lodge claims until wrong doings are identified which makes a nonsense of PI insurance such as that held by Storm. Not making it compulsory still for financial advisers to hold “run-off” insurance leaves a glaring hole through which more investors will continue to fall like those before them. Further, it brings into question the value of PI insurance in its current form as an effective security device for anyone that is seeking to invest using financial advisers when so doing. This loophole has not been addressed under the new regulations, which means that lessons still have not been learnt.”
QUESTION: Why did ASIC not charge the CBA with (1) breach of contract, (2) unconscionable conduct, and (3) linked credit provider of Storm under section 73 of the Trade Practices Act 1974?
The BOQ and the MBL were charged by ASIC with such so why was the CBA (the worst offender) not so charged?
Mr Bailey, based in Sydney with a Master's Degree in Business Administration, was Head of Credit and Market Risk in CBA between mid-2002 and mid-2004. He had been overseeing the implementation of CALIA, at CBA, a single credit assessment process devised for home investment loans and margin loans, in use at the bank from at least June, 2002.
Recalling his meeting with Julia and Emmanuel Cassimatis, Ian Bailey says he asked them, ‘But when the market goes down, what happens then?' and I was somewhat taken aback by the answer, 'Oh, it's a great time to buy'. That's when I started to think, 'Ok, these are not the sort of people that I am comfortable with, in terms of risk management. I continued: 'Hang on!’. The market has taken a big fall. You now have a margin call. What do you do now?' The answer was, 'You buy more shares.' My brain was going, ‘Great! Where do you get the money from? This doesn't make sense. You should actually be going in the opposite direction, and these guys are saying, 'Charge!'".
QUESTION: Why did ASIC only seek from the MBL and the BOQ compensation for the “Doyles” and not for the rest of the Storm investors who took out loans with these Banks?
“At its meeting on 24 November 2010 …the Commission (ASIC) also decided that it would commence compensation proceedings against parties including the Commonwealth Bank of Australia (“CBA”), Bank of Queensland Limited (“BoQ”) and Macquarie Bank Limited (“MBL”) seeking compensation for investors arising out of the collapse of Storm. The compensation proceedings were not filed immediately, in order to allow a short further period for the commercial resolution discussions to continue.
NB: The above statement says, “…seeking compensation for investors arising out of the collapse of Storm.” It doesn’t state that these proceedings were exclusively for the “Doyles” but rather for all the investors concerned. Yet, those Storm investors who were with the BOQ and the MBL have now been waiting four years for ASIC to do something on their behalf! If ASIC believes that nearly three years from the above date is “a short further period” then I would suggest that ASIC’s thinking is seriously defective.”
QUESTION: WHY HAS IT TAKEN ASIC SO LONG TO GET THE CASSIMATIS INTO COURT?
Could it be that their evidence would further illustrate ASIC’s central role in causing this financial catastrophe, and it wasn’t in ASIC’s best interest to have them appear first?
ASIC’s part in the Storm Financial affair has raised more questions than answers. It’s time those that lost their life savings by investing using the services of Storm Financial had closure. It’s time ASIC came clean!
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And why is ASIC taking the stormies who funded the Macquarie fight to court objecting to them receiving a higher percentage as Litigation Funders??? ASIC took Mac to court last year and we are still waiting for an outcome.
Has ASIC ever taken another Litigation Funder/s to court ... No ... And one has to ask WHY / WHY NOW???
It will be 5 years at the tail end of 2013 Bunyip but feels more like 60 years due to ASICs continued incompetence.
Great post Frank.
Has ASIC ever taken another Litigation Funder/s to court ... No ... And one has to ask WHY / WHY NOW???
It will be 5 years at the tail end of 2013 Bunyip but feels more like 60 years due to ASICs continued incompetence.
Great post Frank.
Legal niceties and nitpicking I'm afraid, Harleyquin. As for the impact on those affected? Mere collateral damage.
