Storm Financial Group

[awg]

to clarify some previous questions from self and other posters

Could each client log on and check the daily balance and structure of their account??

There are enough posters on this list who are Storm clients to answer this.

I have think the answer might be yes!?

Most/all Master trust style investments can, showing daily balance and structure of all MINs, Margin loan balance as well, I would have thought
(delayed by 24-48 hrs usually).

In my case , I could and did log on most days to see what was happening. ( not Storm)

I certainly did not wait for him to ring me.

I would ring him and ask if anything was not understood by me.

I have a relative with good assets in a fund with a private FP org, they never check the balance, over the net, even though they can, just wait for their regular review with FP. Cause they dont profess to understand the markets.

Every single person with geared share investments, has had to review their positions on an almost daily basis IMO, and make difficult decisions, to either cut their losses or hold..or even average down

The geared MINS like Colonial geared Aus equites and most of the like, returned around 50% for each of the last 3 years proceeding the last.

 

[cuttlefish]

I can understand people with long term investments through a financial advisor only giving their portfolio's an occasional cursory glance a few times a year ... in normal circumstances.

But the newspaper and television was blaring non stop about a global financial collapse and the government was seeing it as necessary to guarantee money in banks and there were record falls every second day on the australian and global markets.

In those circumstances I can't understand why someone wouldn't start to closely monitor their investments and push to get all of the information they needed to understand their personal position - particularly if they know that the roof over their heads is underpinned by those investments.

 

[beachbum]

Calls to secure passport of Storm Financial's Emmanuel Cassimatis

"As creditors of Storm Financial count the cost, founder Emmanuel Cassimatis is facing calls to surrender his passport to prevent him fleeing overseas.

Devastated former clients, mostly retirees and many who have lost their homes and entire life savings in the $100 million collapse of the Queensland-based business, also want him banned from obtaining a new financial licence."

"His private jet has been seized by liquidators and he says he has only "modest means", despite paying himself a $2 million dividend shortly before the collapse."

Peter Michael's story is here;

http://www.news.com.au/couriermail/story/0,23739,24980495-3122,00.html

Rumour has it that the above mentioned person was busy buying his daughter a residence in the past year also. He obviously knew the writing was on the wall long before his clients or was it just the act of a loving father. Who knows if this is true. If it is this is sounding like a Quintrex all over again. I hope it isn't but no doubt it will come out in the wash. Lots of others would love to own their house. It's just devastating.

 

[cuttlefish]

The loan contract setting out the terms and conditions of the loan was signed by us but not the 7 page income/debt data collection form.

I meant to reply to this the other day but forgot - but I could see that situation potentially occurring. Its quite likely that you did sign the cover sheet of an application letter at some stage, but its quite possible the final contents (income, assets etc.) weren't all collated in the one document at the time you signed it. I find this particular aspect of what has gone on very interesting because if it is the case then the implications are that we will have a lot more of this sort of unserviceable debt out there in the australian banking landscape.

 

[cuttlefish]

As a former Storm client i dont remember actually providing any evidence of my wages or extra income. We provided a bank statement to prove we had an iniatial investment amount (proceeds of a house sale) and gave verbals of wages. After the initial paperwork any additional steps (storm speak for extra investment via margin loans) were in the form of several one page forms for us to sign plus a bigger statement to initial that outlined the process. However after having recently borrowed money for both house and car loans the paperwork we received to borrow margin loans required only one signature whereas the home and car required multiple. It does seem very possible to me that the loan documents might be fishy and if thats the case both storm and the banks have to be held responsible for potentially shoddy loan approvals. However i still maintain that individual investors are responsible for there own losses. People who are scratching their heads wondering how they ended up with so much negative equity need to take responsibility for their own finances. I would check the value of our storm badged challenger investments several times a week against the value of our margin loans. Once the difference between the two got close to the level where we would start to have less left over than our initial investment amount we decided to get out. I should also mention that a year peviously we wished to cash out once we had more than doubled our initial investmant amount but were very firmly discouraged not to. You would go into your meeting with a stratrgy in mind and they would talk you out of it. If people paid attention to their investments which you are an idiot if you dont do even if only in a casual fashion then there is lees chance they would be in this predicament We set our selves a limit of what we were prepared to lose and that was out initial investment amount it turns out we ended up with about 10% more in the end. It is a tragedy for everone involved but it seems to from reading the papers and the internet that very few people involved be it clients, FA's, banks ot the Cassimatis's are willing to take responsibility. I freely admit that i loved the tax perks involved in having big tax deuctions for my investment loans and so would every other storm client. Life is not easy and no-one gives you anything for free but ultimately the buck stops with us for our individual choices

Cheers for this post - I think its well balanced and gives a good insight into how things could have unfolded. You did well to monitor your situation and have the courage to go against their 'advice' and extract yourself from the situation. Given the high pressure sales tactics that Storm used, I can see that there could have been people that were aware/nervous about what was going on, but weren't confident enough to push past the high pressure tactics from Storm to 'stay in'.

 

[Solly]

From: Fairfax Business Day

http://www.businessday.com.au/business/the-cassimatis-crusade-20090130-7tvs.html

The Cassimatis crusade

Storm Financial co-founders Emmanuel and Julie Cassimatis are on a crusade to find justice for their clients, according to a media release from the husband and wife.

Here is the full text of the media release, which was sent out today:

MEDIA RELEASE

30 January 2009

Emmanuel and Julie Cassimatis, founders of Storm Financial, today refuted "ridiculous'' claims that their passports should be surrendered and that their private jet had been seized by liquidators.

"I have said over and over again that my crusade is now to find justice for these clients, and I will continue that crusade until my dying breath,'' said Emmanuel Cassimatis. "We're not going anywhere.''

Julie Cassimatis also answered allegations that liquidators had seized Cassimatis assets. "That's simply not true,'' she said. "As of right now there are no liquidators involved in the situation. We have voluntarily put the plane on the market for sale - that was our decision and our action.''

The couple are calling on the Federal government and ASIC to rein in what they see as irresponsible action by the Commonwealth Bank of Australia, who they say sold Storm clients out of assets without consultation and then blamed Storm.

The bank said they were acting under instruction from Storm, and also claimed that Storm had 'sole responsibility' for the margin loans in question, both of which Emmanual Cassimatis says are blatantly untrue. He points to an injunction hearing on 24th December 2008, where Justice Greenwood said: "I am satisfied that solely for interlocutory purposes, Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive......''.

"The banks have been handed all this money, this lifeline, by the Government, and they're not passing it on to customers,'' said Mr Cassimatis. "They are happy to take the profits in good times and the government assistance in bad times, but when their customers - some of them very loyal customers of nearly 20 years - need them, where are they?''

"This could all have been avoided by the bank working with us. Instead they panicked and now the results are catastrophic. I am absolutely shattered. All I care about now is finding justice for these clients.''

 

[Julia]

Gee suing me would be a worthwhile exercise!

Stung, it's pretty impressive that you haven't lost your sense of humour!
Goodonya.

 

[Solly]

"FPA found basis for charges against Storm Financial"

"The Financial Planning Association’s (FPA) investigation into Storm Financial provided it with a basis to lay charges against the collapsed financial planning group, but the details of the group’s breaches of professional conduct will not emerge in this particular forum as the group’s membership to the industry body has been terminated.

The FPA has taken criticism in recent weeks for what some have perceived to be too soft a stance on the issues surrounding the advice given to clients of Storm Financial. In recent weeks FPA chief executive Jo-Anne Bloch has maintained that all members of the industry body deserve a fair and thorough investigation before conclusions are drawn."

Full story by Lucinda Beaman is here:

http://www.moneymanagement.com.au/article/FPA-found-basis-for-charges-against-Storm-Financial/436369.aspx

 

[Julia]

"FPA found basis for charges against Storm Financial"

"The Financial Planning Association’s (FPA) investigation into Storm Financial provided it with a basis to lay charges against the collapsed financial planning group, but the details of the group’s breaches of professional conduct will not emerge in this particular forum as the group’s membership to the industry body has been terminated.

So what sort of charges can be laid by the FPA against Storm? Do they actually have any teeth? What can they do other than expel Storm from their esteemed membership?
Isn't it up to either the police or ASIC to lay any formal charges?

 

[Solly]

From: Fairfax Business Day

http://www.businessday.com.au/business/the-cassimatis-crusade-20090130-7tvs.html

The Cassimatis crusade

Storm Financial co-founders Emmanuel and Julie Cassimatis are on a crusade to find justice for their clients, according to a media release from the husband and wife.............................

He points to an injunction hearing on 24th December 2008, where Justice Greenwood said: "I am satisfied that solely for interlocutory purposes, Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive......''.

I believe the key words in Justice Greenwood's statement are "allegedly" and "are capable" ...............just my opinion.

 

[Solly]

So what sort of charges can be laid by the FPA against Storm? Do they actually have any teeth? What can they do other than expel Storm from their esteemed membership?
Isn't it up to either the police or ASIC to lay any formal charges?

Julia,
It may refer to internal breaches of the FPA's rules of conduct http://www.fpa.asn.au/files/PolicyCodeOfEthicsFINAL.pdf
with reference to their Constitution http://www.fpa.asn.au/files/FPAConstitution.pdf

But I suppose we will never know....

 

[Solly]

It may be worth summarising some lessons from this debacle.

1. don't trust financial advisers/financial houses/lawyers.
2. don't trust banks
3. do your own research
4. don't put your house up as collateral for a margin loan.
5. if you don't know anything about investing don't invest.
6. don't trust anybody.
7. don't believe people based on emotion, gut feeling.
8. avoid cults
9. read all posts on aussiestockforums and then read again before investing.
10. those who have been ripped off are also likely to be further ripped off by some of those offering to help. (go to 1. and keep on repeating.)

gg

gg

Your list is brilliant, succinct and to the point.

 

[chrisgee]

From: Fairfax Business Day

http://www.businessday.com.au/business/the-cassimatis-crusade-20090130-7tvs.html

The Cassimatis crusade

Storm Financial co-founders Emmanuel and Julie Cassimatis are on a crusade to find justice for their clients, according to a media release from the husband and wife.

Here is the full text of the media release, which was sent out today:

MEDIA RELEASE

30 January 2009

Emmanuel and Julie Cassimatis, founders of Storm Financial, today refuted "ridiculous'' claims that their passports should be surrendered and that their private jet had been seized by liquidators.

"I have said over and over again that my crusade is now to find justice for these clients, and I will continue that crusade until my dying breath,'' said Emmanuel Cassimatis. "We're not going anywhere.''

Julie Cassimatis also answered allegations that liquidators had seized Cassimatis assets. "That's simply not true,'' she said. "As of right now there are no liquidators involved in the situation. We have voluntarily put the plane on the market for sale - that was our decision and our action.''

The couple are calling on the Federal government and ASIC to rein in what they see as irresponsible action by the Commonwealth Bank of Australia, who they say sold Storm clients out of assets without consultation and then blamed Storm.

The bank said they were acting under instruction from Storm, and also claimed that Storm had 'sole responsibility' for the margin loans in question, both of which Emmanual Cassimatis says are blatantly untrue. He points to an injunction hearing on 24th December 2008, where Justice Greenwood said: "I am satisfied that solely for interlocutory purposes, Storm has demonstrated a sufficient likelihood of success in terms of Australian Broadcasting Corporation v O'Neill demonstrating that the statement as to sole management of the margin loan accounts and instructions allegedly given in the meeting on 4 December 2008 are capable of being misleading or deceptive or likely to mislead or deceive......''.

"The banks have been handed all this money, this lifeline, by the Government, and they're not passing it on to customers,'' said Mr Cassimatis. "They are happy to take the profits in good times and the government assistance in bad times, but when their customers - some of them very loyal customers of nearly 20 years - need them, where are they?''

"This could all have been avoided by the bank working with us. Instead they panicked and now the results are catastrophic. I am absolutely shattered. All I care about now is finding justice for these clients.''

I can't help but think that this an attempt to but their spin on what has happened. I am so happy to see that he is on a "Crusade to find justice" that's exactly what all those impacted need. How could the company allow it to get to this stage ?? All the assurances etc and look where we all are.
Somebody has stuffed up in a big way. Who is to blame for this mess?
Will the courts get it right ?? Will little guy be screwed over again??
Let's hope his statements are sincere and follow through with action.
My friends are in a bad way, call them dumb, call them stupid, they don't have fancy degrees or qualifications, they just put their trust in someone who promised that all will be ok. They didn't want fancy homes, jets, fancy clothes, they just didn't want to live in poverty in their retirement. Now this looks exactly what they will have. The stress on them has been enormous and has affected their friends and family. I'm so happy to see that the Crusade has begun, but I'm starting to realise there now may be no winners except lawyers, accountants and all those who hang off them.
I know this rant probably means nothing but I feel a bit better now

 

[Pindibog]

I was told in a room of 300 odd people in Mackay in Nov by EC that if Storm went under we would not loose our shares. We still owned the units in various shares. I had a large amount that were not Storm Badged shares also from 18yrs of investing/saving. My issue is I had the capacity to meet margin call if one was ever made??? But all shares were sold by Colonial without notifying me. They claim they notified Storm??? Storm claim from Oct on that I had not reached margin call yet. Colonial state I had been in MC since 10/10. If I had known and offered the extra security I would still have lost as they closed down the Storm Badged funds and looking like doing same with Challenger at the worst time.

 

[shibby]

I have been with my advisor for over 18yrs. She had changed from MLC to Ozdaq securities and then Storm until she retired. . .

If anyone out there has had a similar experience with their financial advisor could they tell me approximately when that move to storm took place?
I am really interested because I am trying to work out when mine did the move accross.

Does any one know if one has to be officially advised that the shift took place?

Any help would be appreciated.

 

[awg]

I was told in a room of 300 odd people in Mackay in Nov by EC that if Storm went under we would not loose our shares. We still owned the units in various shares. I had a large amount that were not Storm Badged shares also from 18yrs of investing/saving. My issue is I had the capacity to meet margin call if one was ever made??? But all shares were sold by Colonial without notifying me. They claim they notified Storm??? Storm claim from Oct on that I had not reached margin call yet. Colonial state I had been in MC since 10/10. If I had known and offered the extra security I would still have lost as they closed down the Storm Badged funds and looking like doing same with Challenger at the worst time.

Seems your story is a bit different to others, regrettable nonetheless.

Did/Do you have documentation from Storm called a "Statement of Advice"?

Did you have the capacity to check the details of your investment online?

(PLEASE someone answer this, it is fundamental to the whole issue IMO).

 

[Pindibog]

Seems your story is a bit different to others, regrettable nonetheless.

Did/Do you have documentation from Storm called a "Statement of Advice"?

Did you have the capacity to check the details of your investment online?

(PLEASE someone answer this, it is fundamental to the whole issue IMO).

I have a Financial plan with Ozdac securities dated 11/12/2000. Then reconciliation letter dated 12 Feb. 2001. After that a quarterly reveiw report dated 3rd Oct. 2001. From 2004 was the next time I took a "next step" and Ozdaq was now called "Storm" They call them "statement of addititional advice". I did not apply to check my investment online. I would think Challenger and Storm badged would have had that facility. Bulk of my other shares were MLC. No online facility set up there either. ###@@@@

 

[awg]

I have a Financial plan with Ozdac securities dated 11/12/2000. Then reconciliation letter dated 12 Feb. 2001. After that a quarterly reveiw report dated 3rd Oct. 2001. From 2004 was the next time I took a "next step" and Ozdaq was now called "Storm" They call them "statement of addititional advice". I did not apply to check my investment online. I would think Challenger and Storm badged would have had that facility. Bulk of my other shares were MLC. No online facility set up there either. ###@@@@

Thankyou for answering those questions to the best of your knowledge.

It would seem from your answer that Storm probably followed the letter of the FPA guidelines, but if it is true you were not notified about your margin situation by Storm, that would be incredibly lax of them.

Surely I would expect an official email from my margin manager, advising immediate action by me needed, as margin "buffer" is entered.

They automatically sell within 24 hrs if you enter the buffer itself, but dont cough up. (Commsec)

I have absolutely no doubt, that Storm principles,and many of their advisors, were pathetically inept if they did not advise clients to at least monitor the situation daily, with regard to margin....their houses were on the line its morally criminal.

I can understand many older clients in particular, would not elect to register and monitor their "managed" investments online, its a drag

At the end of the day the client must make the decisions, but needs decent advice in order to do that.

I guess many people were caught in a paralysis, clients, advisors, others, this market situation, whilst being statistically predictable, only happens a few times each century.

Business disasters around xmas are fraught as well.

 

[Pindibog]

Thankyou for answering those questions to the best of your knowledge.

It would seem from your answer that Storm probably followed the letter of the FPA guidelines, but if it is true you were not notified about your margin situation by Storm, that would be incredibly lax of them.

Surely I would expect an official email from my margin manager, advising immediate action by me needed, as margin "buffer" is entered.

They automatically sell within 24 hrs if you enter the buffer itself, but dont cough up. (Commsec)

I have absolutely no doubt, that Storm principles,and many of their advisors, were pathetically inept if they did not advise clients to at least monitor the situation daily, with regard to margin....their houses were on the line its morally criminal.

I can understand many older clients in particular, would not elect to register and monitor their "managed" investments online, its a drag

At the end of the day the client must make the decisions, but needs decent advice in order to do that.

I guess many people were caught in a paralysis, clients, advisors, others, this market situation, whilst being statistically predictable, only happens a few times each century.

Business disasters around xmas are fraught as well.

Just had a read of the plans/advice......Looks like I will need to see a lawyer

 

[Solly]

"Storm Financial's Emmanuel and Julie Cassimatis to sell"

"THE co-founders of collapsed investment firm Storm Financial, Emmanuel and Julie Cassimatis, owe $16 million and face personal bankruptcy.

Mr Cassimatis said yesterday all their assets were for sale or to be listed – Townsville and Brisbane mansions, private jet, cars and boats.

The once high-flying entrepreneur and his wife had a fortune last year estimated at $450 million on The Sunday Mail Top 100 Rich List.

But yesterday he said: "I don't even know whether we're going to survive financially."

The bad news continues for them, with some clients lining up to sue them personally."


Full Story by Mitch Gaynor here;

http://www.news.com.au/couriermail/story/0,23739,24989406-5007190,00.html