Australian (ASX) Stock Market Forum

Storm Financial Group

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Solly said:
Source: http://www.moneymanagement.com.au/a...c-storm-financial-intervention-outcry-lawyers
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Hi Solly,

The truth of the matter is that both the CBA and the Macquarie settlements are basically unfair because they only provide for partial compensation.

Consider the facts:
ASIC did not act to protect us in the first place,
Storm gave misleading and deceptive advice which violated sections of the Corporations Act
the Banks involved ignored their contractual obligations to their Storm customers
and the Banks lent imprudently which breached their banking codes.

Therefore, the compensation should be commiserate with the extent of the wrongdoings and those responsible should be punished. Just giving back part of the loot and giving the banks a slap on the wrist is hardly my idea of justice.
 
Frank Ainslie said:
Just giving back part of the loot and giving the banks a slap on the wrist is hardly my idea of justice.
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Noting that we (and I say we, I was invested in Storm as well) shouldered our share of the risk, and didn't complain when the profits were rolling in, I say partial compensation was more than fair. I am happy with what I got back.
 
Ironhalo said:
Noting that we (and I say we, I was invested in Storm as well) shouldered our share of the risk, and didn't complain when the profits were rolling in, I say partial compensation was more than fair. I am happy with what I got back.
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This wasn't about accepting risk. This was about fraud!

Mr. Stuart Drummond, our Storm financial adviser, was banned by ASIC because he deliberately misled us and in doing so violated sections of the Corporations Act:
“11-32AD ASIC bans former Storm Financial adviser Thursday 24 February 2011
A former authorised representative of Storm Financial Ltd has been banned from providing financial services for four years after an ASIC investigation found he made false and misleading statements and provided inappropriate advice to a number of his clients.
Mr Stuart Craig Drummond, of Clayfield in Brisbane, Queensland, was employed as an authorised representative of Storm Financial Ltd and its predecessor, Ozdaq Securities Pty Ltd, between 31 May 2004 and 18 June 2009.
ASIC’s investigation found that Mr Drummond failed to comply with financial services laws in relation to advice he provided to a number of his clients between October 2004 and July 2008. In particular, ASIC found Mr Drummond:
§ made false and misleading statements in breach of s1041E of the Corporations Act 2001,
§ engaged in misleading and deceptive conduct under s1041H of the Corporations Act 2001,
§ promoted the Storm strategy without considering the suitability of the strategy for individual clients,
§ provided Statements of Advice and Statements of Additional Advice containing misleading and deceptive information in order to induce them to invest using the Storm strategy, and
§ didn’t have an understanding of the nature and risks of financial products recommended on the basis of the Storm strategy.”

If you believe that partial compensation is fair in the circumstances, I would ask you to study the law in this regard.
Don't bother! I'll quote it for you:
Fraud
Definition - Noun
[Latin fraud- fraus]
1 a : any act, expression, omission, or concealment calculated to deceive another to his or her disadvantage
specif
: a misrepresentation or concealment with reference to some fact material to a transaction that is made with knowledge of its falsity or in reckless disregard of its truth or falsity and with the intent to deceive another and that is reasonably relied on by the other who is injured thereby
b : the affirmative defense of having acted in response to a fraud
2 : the crime or tort of committing fraud <convicted of securities ~>
see also misrepresentation

A tort action based on fraud is also referred to as an action of deceit.

Need I go on? If you are happy with your lot, good on you! I'm not and I believe I have a good reason for feeling as I do!
 
He didn't mislead you. I have the same paperwork that you do, and it details very clearly that investing in shares is a risky practice...even if that risk is only 1%, we copped the 1%.

You are not going to get all your money back + extra, no matter what rationale you try and espouse my friend. I suggest you divert your energy into enjoying the rest of your life, the Storm is over; and as GG has said numerous times now, the only winners from here on in are the lawyers.

Getting half your money back is actually a blessing.
 
Macquarie and Storm victims settlement "wrong": Court
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Levitt Robinson estimated that under the settlement, around 315 investors who funded the class action would have been reimbursed their legal costs and also compensated for approximately 42% of their losses.

At the same time, around 735 Macquarie borrowers would only get back about 18% of their losses.

The Court determined that the levies were not calculated mathematically and that the amounts were not proportional to the losses suffered by the investors. However, it didn't question the size of the settlement pool.

"The principal issue on appeal is whether the primary judge erred in finding that the distribution of the settlement sum as between all group members was fair and reasonable," the Court said.
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http://www.financialstandard.com.au/news/view/33869542
 
Oh dear, more angst with 315 probably sad and 735 probably happy. Litigation; nasty stuff and you can never be certain of the final outcome.
 
Ironhalo said:
He didn't mislead you. I have the same paperwork that you do, and it details very clearly that investing in shares is a risky practice...even if that risk is only 1%, we copped the 1%.

You are not going to get all your money back + extra, no matter what rationale you try and espouse my friend. I suggest you divert your energy into enjoying the rest of your life, the Storm is over; and as GG has said numerous times now, the only winners from here on in are the lawyers.

Getting half your money back is actually a blessing.
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Good advice, Ironhalo.

It’s been interesting to observe the different reactions of people affected by the Storm debacle.
Some of them have the character to accept that they themselves are among the many people who stuffed up. From my observation of the comments on here, these people are grateful for whatever compensation they can get, and are moving on and making the most of their lives.

Then there’s the other type of person who accepts no responsibility for their actions, but is intent on shoveling all the blame on to anyone within reach. This type of person tears him/herself apart by constantly fuming about a situation that was partly of their own making. I almost feel sorry for them – it can’t be much fun living life in constant anger, frustration, and resentment.
Maybe some professional counseling would help them to come to terms with their situation and allow them to live happier lives.
 
That's it mate. While the banks did play a part, their role wasn't 100% for blame. I should have rang the bank myself and converted to cash/made the margin call payment before it went too far. As it was, I did manage to avoid quite a large amount of hurt by doing that same thing after I realised that the clowns at Storm probably didn't care about my little investment when their jobs and larger clients were getting savaged. That's not how it should work, but that's what it was.

Getting half my cash back was considered a good deal, and I certainly am equipped now to not repeat my same mistakes again.
 
Frank Ainslie said:
The truth of the matter is that both the CBA and the Macquarie settlements are basically unfair because they only provide for partial compensation.
Click to expand...



Frank Ainslie said:
Just giving back part of the loot and giving the banks a slap on the wrist is hardly my idea of justice.
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Frank – I wonder if you could clarify a couple of points for me?

Do you believe that you should get back every single dollar you lost by acting on the investment advice of Storm Financial?

And if you don’t believe you should get back 100% of your losses, then what percentage do you think you should get back?
 
Judd said:
Federal Court of Australia decision in relation to Storm.

The transcript of the Full Court's decision is below.

http://www.austlii.edu.au/cgi-bin/s...ml?stem=0&synonyms=0&query="Storm Financial "
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Well that made for interesting reading..... I especially liked this part of the ruling:

The fourth difficulty with the Funders’ Premium was that it was payable to Funding Group Members. The Settlement Distribution Scheme defined that as “group members who were clients of Levitt Robinson as at 15 March 2013 who contribute to the funding of the Class Action up to the date of the Approval”: see [29] above. As noted earlier, it included any group member who was a client of Levitt Robinson who made a contribution of at least $500 so long as they were a client of Levitt Robinson prior to the date the Settlement was approved. As a result, 13 clients of Levitt Robinson became Funding Group Members even though they did not contribute $500 until after the settlement was reached. That step, of itself, was not fair or reasonable. It was not fair or reasonable because none of the group members who were not clients of Levitt Robinson were afforded the same opportunity to participate at such a late stage for as little as $500. Why should those 13 Levitt Robinson clients be afforded that opportunity at the expense of the Unrepresented Group Members? The answer is they should not. The matter may be tested this way – if there had been a prospect of a premium as a reward for funding the litigation, some of the Unrepresented Group Members may well have decided to fund the litigation. Indeed, it is likely that there may have been a rush of Unrepresented Group Members if they had been given the same opportunity at that time. They were not given that choice. The terms of the distribution of the Settlement Pool should not prejudice the Unrepresented Group Members for having made an informed decision on one basis which the Funding Group Members now seek to change to their advantage but to the disadvantage of the Unrepresented Group Members. That is neither fair nor reasonable.
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Ironhalo said:
He didn't mislead you. I have the same paperwork that you do, and it details very clearly that investing in shares is a risky practice...even if that risk is only 1%, we copped the 1%.
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Ironhalo

According to your paperwork, which is the same paperwork that every Storm investor was given, Storm stated very clearly that investing in shares is a risky practice.

A couple of Storm victims have said on here that Storm told them it was a safe and conservative strategy. One or two others have said they asked Storm for a ‘no-risk’ investment, and Storm assured them that this is what they’d be getting. (I still find it incredible that anyone could believe there is a such a thing as a risk-free investment – the only way that could happen is if the investment was guaranteed to rise in value, and never to fall, which of course is impossible)

Does any part of your paperwork state that the Storm strategy was ‘no risk’, or that it was safe and conservative?
 
bunyip said:
Does any part of your paperwork state that the Storm strategy was ‘no risk’, or that it was safe and conservative?
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While they certainly pushed that their model was 'safe' (I remember our advisor telling us comprehensively that if Storm went belly up for any reason, our funds would be safe as they were invested in Macquarie Index Funds etc....which he was correct about to a degree), as soon as shares are involved, you know that wasn't always going to be the case. I was lucky in that I only lost money that I had originally ponied up and a rather modest margin loan that was very low in terms of risk/LVR; I hadn't leveraged against property etc.

But in saying that, the fact that investing in share was a risky practice was in the first few pages of our financial plan. They made sure they covered themselves in that regard.

I do feel sorry for those older clients who seemed to think they were privy to some magic 30% p.a. wealth creation cult, but people really needed to take more of an active interest in their own finances; especially in regards to the fact that in many cases, 7 figure debts were involved.
 
Ever since this thread began we’ve seen a small handful of Storm investors making such claims as........

* We weren’t sophisticated investors – we couldn’t be expected to spot the risk in the Storm strategy.
* If ASIC couldn’t spot the risk, what chance did we have of seeing it.
* Even sophisticated investors couldn’t have spotted the risk.
* We were lied to – Storm told us their strategy was safe.

And now, thanks to Ironhalo’s posts, we see that Storm investors didn’t have to spot the risk for themselves – Storm Financial spotted the risk for them, then told them about it by stating clearly in their paperwork that share investment is risky.
Despite having been told that share investment is risky, these investors were still willing to mortgage their homes to raise big loans to sink into this risky investment, then use double gearing to invest even more heavily, and to pour all their own savings and super into this risky investment as well.
Then when the market collapses and their risky investment caves in, they deny all responsibility for their actions, and they complain about only getting half their money back!
Not only that, but they attack and ridicule the government for allowing this to happen, they attack and ridicule all financial planners even though most of them would never have condoned the Storm model, they attack the banks for giving them the loans they applied for, and they accuse the banks of corporate bastardy for wanting their loans repaid.

Now to be fair, some Storm investors have copped it on the chin by admitting they are responsible for the choices they made of their own free will, and the unfortunate outcomes that resulted from those choices.

But there still seems to be that hard core of Stormers who are determined to blame everyone but themselves as they whine and moan about the perceived injustice of it all.
 
Judd said:
Aww, man, no need to rub peoples' noses in it. Unnecessary.
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Perhaps so, Judd. But also unnecessary are the posts a few days ago from a Storm investor who complained about having been treated unjustly by being granted only partial recovery of his losses.

As long as he or anyone else continues with this bull, I’ll continue to point out the realities that he chooses to ignore.
 
Anyone can 'claim' to be storm affected on this site, and some of the more recent posts fall into this rather doubtful category..

Clients of any financial planner are a diverse lot who range from the highly knowledgeable to the highly unknowledgeable. It is impossible to characterise a 'typical' storm investor.
 

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