More Old Articles from the front page.

Late Breaking News!

The following is an extract from the Sunday Mail article of 24th May 2009 by Daryl Passmore and and Mitch Gaynor.

This may provide some direction to those who are contemplating deals with the CBA at this time.

…  Meanwhile, some Storm investors are being pressed to waive the right to sue their bank in return for knocking as little as $2000 off loans worth hundreds of thousands of dollars.

A Commonwealth Bank "hardship" team was sent to Townsville last week to meet hundreds of investors facing crippling debts from the Storm collapse.

Investors who spoke to The Sunday Mail said they had been contacted by phone and in person by CBA employees offering deals.

One investor was offered just $2000 off a loan worth more than $300,000 in return for signing away their right to sue the bank.

Another, with a similar-size debt, was offered a five-year interest rate discount of 2 per cent and a 1 per cent discount off the life of the loan.

Storm investor advocate Mark Weir said there was no "rhyme or reason" to the offers.

"The bottom line is they are being asked to make unreasonable decisions with a gun against their head," he said.

Behind the scenes, it was understood the Commonwealth Bank and law firm Slater and Gordon were on the verge of a deal that could see thousands of investors escape from their crippling financial situation.

Slater and Gordon's Damian Scattini said the two organisations had "very recently" ramped up negotiations, but he could not comment on the discussions beyond an agreed statement between the firm and the CBA, which merely confirmed the talks and emphasised they were confidential.

Flowchart: Multidocument: Check out the New Testimonials page!
Flowchart: Multidocument: Check out the New Senator Williams speech page!

Storm fallout—Townsville Bulletin


May 30th, 2009

THE Commonwealth Bank is facing mounting pressure for its part in the Storm Financial debacle amid speculation the Cassimatises will re-ignite their legal battle against the bank.

Meanwhile, devastated Storm clients point to the bank's tactic of insisting on indemnity against any future legal action in settlements as evidence the bank knows it is in the wrong.

Storm Investors Consumer Action Group co-chairman Mark Weir said most people would interpret the bank's demand for indemnity as evidence of some culpability.

"I think the court of public opinion would very much find that to be the case," he said.

Storm founders Emmanuel and Julie Cassimatis, understood to be back in Townsville this weekend for a family gathering, would not comment on their moves.


After campaigning against the bank, they have gone to ground and are declining interviews.

They had led actions against the bank in the days before the wealth adviser collapsed, arguing the bank was responsible for management of margin loans.

That action remains on the books, with the liquidators for Storm, Worrells, last month replacing the Cassimatises' legal team.

A spokesman for Worrells could not say what would become of the action but said it would be for receivers and liquidators to decide and not the Cassimatises.

More than 470 Storm clients, all clients of the Commonwealth Bank, fell into negative equity where the value of their margin loans exceeded the value of their investments.

Loan to Valuation Ratios (LVRs), which for Storm clients were not to exceed 90 per cent, blew out to as much as 150 per cent as redemptions stalled amid the panic selling of last year's sharemarket collapse.

For clients, the blow-out meant the difference between losing most of their investments and losing the investments and their homes that were used as security.

Some are claiming the difference is as much as $1 million.

Mr Weir said the LVR blow-out for him meant an extra loss of around $800,000.

"I don't believe (Commonwealth Bank margin lender) Colonial Geared Investments had adequate staff to handle the situation," he said.

"If (regulator) ASIC are able to prove that then one of the upshots could be that Colonial Geared Investments will have to restore all the portfolios.

"ASIC ... have assured us they will investigate that."

However, the Commonwealth Bank yesterday continued to blame Storm, saying LVRs exceeded 100 per cent because of `Storm's delay and intervening market falls'.

The bank also denied claims there were flaws in Colonial Geared Investments' reporting of LVRs, that its website where the LVRs were reported were out of date and that they had been busy fixing the website to avoid further criticism.

"The claims are totally false," a bank spokesman said.


(You should read this before signing ANY deals!)

ASIC queries CBA offer to Storm-struck
 Patrick Durkin

The corporate regulator is investigating Commonwealth Bank of Australia  for approaching investors in the collapsed Storm Financial Services to offer them settlement deals on their debts if they waived their legal rights.

Australian Securities and Investments Commission chairman Tony D'Aloisio  told Senate Estimates last night the regulator was considering using its  public interest power under section 50 of the ASIC Act to start proceedings to recover compensation for investors.

He said he was aware of CBA's approaches to investors "and we are in discussions with that bank and we are conscious of the issues in terms of the fairness of any sort of arrangement that would have been entered into".

Storm collapsed last year leaving an estimated $3 billion in losses for investors. CBA provided loans for Storm customers. Mr D'Aloisio said the regulator had to be careful in acting on the bank's approaches because "if an investor genuinely wants to settle or do  something in relation to a potential claim and has proper advice, then one has to  respect the right of that investor." He said ASIC "would want investors to be able to make those sort of decisions with full knowledge of whether there's a potential other action or other things that ASIC may or may not do."


The regulator has an August 31 deadline to start legal proceedings to recover investors' funds. It is under pressure to launch proceedings to aid investors who are considering whether to sign the settlement deals with CBA.

 Wednesday, June 12, 2009

Storm action group sees hardship team as ‘wolves  in sheeps’ clothing’

OFFERS being made to former Storm Financial clients by the Commonwealth Bank’s Hardship Team should be treated with extreme caution, according to SICAG (Storm Investors Consumer Action Group).

“From what we’ve seen so far, the Hardship Team are like wolves in sheep's clothing,” said SICAG Co-Chairman Mark Weir.

“They are offering desperate people what appear on the surface to be attractive deals, but when you look closely at the fine print, they are simply rearranging the deck chairs on The Titanic.

“The deals also require the distressed person to sign a release indemnifying the bank from any further legal action,” he said.

“Most of the people we’ve spoken to are in no position to make an informed decision on such weighty matters and therefore we urge them to seek professional legal and financial advice before they sign anything.

“The banks played a major role in the financial disaster these people now find themselves in and now it appears they want another chomp at whatever assets are left,” he said.

“They are forcing fragile people into taking either the money or the box and are creating a situation of ‘haves’ and ‘have-nots’ – that is, people who have received an offer and those who haven’t.

“It appears to be a very selective process,” he said.

Mr Weir welcomed ASIC’s (Australian Securities and Investments Commission) decision to investigate the Hardship Team’s offers.

ASIC Chairman Tony D'Aloisio told Senate Estimates this week the organisation was getting advice on its public interest powers under section 50 of the ASIC Act to start proceedings to recover compensation for investors.

“We are in discussions with that bank (CBA) and we are conscious of the issues in terms of the fairness of any sort of arrangement that would have been entered into,” he said.

Mr D’Aloisio expressed a note of caution: "If an investor genuinely wants to settle or do something in relation to a potential claim and has proper advice, then one has to respect the right of that investor."

He said ASIC "would want investors to be able to make those sorts of decisions with full knowledge of whether there's a potential other action or other things that ASIC may or may not do."

ASIC has over 40 agents working on the Storm Financial case and has until August 31 to start proceedings to recover investors' funds.

SICAG is in the process of preparing a submission to the Parliamentary Joint Committee on Corporations and Financial Services on behalf of its 1000 members. Individuals and former Storm agents are also submitting statements to the Inquiry.

ASIC may take CBA to court


June 14th, 2009

THE corporate regulator is considering proceedings against the Commonwealth Bank to recover damages on behalf of investors in Storm Financial.

Australian Securities and Investments Commission (ASIC) chairman Tony D'Aloisio has told a Senate Estimates committee hearing the regulator is looking at a potential case under its public interest powers of section 50 of the ASIC Act.

The Act allows for civil proceedings for the recovery of damages for fraud, negligence, default, breach of duty or other misconduct committed in connection with matters it is investigating.

Mr D'Aloisio said they were looking after the interests of investors, many of whom have been left destitute in the wake of the sharemarket rout and the selling out of their investment funds by the Commonwealth Bank.

"They are not in a position to look after their own interests and they have rights that we feel as a matter of public policy we should pursue for them," Mr D'Aloisio said.

While Storm Financial `stormified' its clients into highly leveraged sharemarket funds, opening them to high risk in the event of a market collapse, it is the involvement of the banks, particularly the Commonwealth in its home lending and margin lending, which is now under much closer scrutiny.

There are claims a VAS computer valuation system developed by the CBA and linked to Storm's computer systems in March 2008 allowed the bank to provide sight-unseen property valuations and increase lending for investment.

The full Townsville Bulletin article can be found here ...

Storm inquiry targets banks

Mitch Gaynor
June 14, 2009 12:00am

THE head of the federal parliamentary inquiry which is investigating the failed Storm Financial investment advisory company says he will work with corporate regulators to bring the banks to account for their part in the collapse.

The chairman of the inquiry into the financial services industry, Bernie Ripoll, said he was "completely satisfied" the inquiry's terms of reference had enough firepower to target the banks if they were found to have done anything wrong.

On Friday, a Storm key adviser detailed a "cosy relationship" which had developed between Storm and the Commonwealth Bank over the past decade.

Ron Jelich wrote of relaxed loan terms and the development of software linking Storm's computer systems, which allowed the bank to remotely value clients' assets.

"The sole aim of this process was to generate more loans, meaning more fees for the banks and Storm," he wrote in his submission to the inquiry.

The full Courier Mail Article can be found Here ...