The companies watchdog is talking to those involved in the Storm Financial collapse to see if a commercial resolution can be reached.

The Australian Securities and Investments Commission said in a statement on Friday that it had completed a major phase of its investigation into Storm Financial and now was entering another.

That would involve confidential discussions with the individuals and entities which were the subject of ASIC’s investigation to see whether a commercial resolution could be reached.

ASIC said a commercial resolution would be preferable to protracted litigation.

ASIC would consider launching compensation actions if a commercial resolution wasn’t possible.
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Financially devastated clients of failed investment firm Storm Financial are supporting a lawsuit by the company’s owners against the Commonwealth Bank.

Storm principals Emmanuel and Julie Cassimatis last week launched a $17 million claim against the bank for losses in their personal investment portfolio.

They have accused CBA of negligence and breach of its contract for failing to provide accurate account statements regarding the value of their portfolio.

Storm Investors Consumer Action Group (SICAG) co-chairman Noel O’Brien said if the couple were successful it would set a precedent for future legal action by affected clients.

“It will set a precedent for the rest of the members,” he told AAP.
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The chairman of the parliamentary inquiry into the financial services sector says he is more concerned about the quality of advice and educational level of advisers than how they are paid.

Bernie Ripoll, chair of the financial services inquiry, which was established in response to the collapse of Storm Financial, says the inquiry will be making recommendations on whether commissions for financial advice ought to be banned.

“I wouldn’t agree with you that it’s the most important part” of the inquiry, Mr Ripoll said in an interview with ABC Television’s Inside Business program on Sunday.

“The quality of advice really has turned out to be the most important part.
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Storm Financial victims are calling on banks to pull their heads out of the sand and settle claims for loans that were struck by “con men”.

The Commonwealth Bank of Australia (CBA) has settled claims for 53 out of more than 2,000 clients who took out loans with failed financial planners Storm Financial.

Law firm Slater and Gordon announced the breakthrough on Wednesday evening, but lawyer Damian Scattini said it was only the beginning.

“So far so good, but we’re not popping the champagne … it’s only 53 (clients) of over 2,000, so we’re a long way from home,” said Mr Scattini, whose firm is representing the Storm victims.

“They’ve got a sustainable future now that they didn’t have before.”
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The Association of Financial Advisers (AFA) has told a parliamentary inquiry into the collapse of Storm Financial that there is no need to change legislation regulating the industry.

The federal parliamentary Inquiry into Financial Products and Services moved to Sydney on Friday after hearing from former Storm staff, including its boss, Emmanuel Cassimatis, in Queensland earlier this week.

The inquiry has heard Storm customers were encouraged to take out mortgages against their homes to secure margin loans to invest in indexed share funds.

When the stock exchange plummeted late last year, thousands of clients’ share portfolios were sold out at negative equity leaving them with debts they could not meet.
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The founders of Storm Financial have been summonsed to appear at a public examination into the failed advisory firm.

During a brief hearing in the Federal Court in Brisbane on Monday, registrar Heather Baldwin ordered Emmanuel and Julie Cassimatis appear in court to give evidence about their company.

Storm Financial, which claimed to have about $4.7 billion of funds under management and more than 14,000 clients, went into administration in January.

The Federal Court ordered the company’s winding up in March, with debts of around $80 million, leaving investors with huge losses and fears they may never recoup their money.
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Litigation over Bank of Queensland’s (BOQ) involvement with the failed financier Storm Financial could substantially eat into the bank’s profit just as losses from bad debts peak.

BOQ revealed last Thursday it had a total lending exposure of $105 million from 319 Storm Financial clients - $20 million more than the bank’s interim 2009 cash profit.

However, BOQ has said the majority of the customers were repaying their loans and no margin loans were provided to Storm customers.

BOQ was caught off guard last week when the Australian Securities and Investments Commission (ASIC) placed the bank under investigation for matters relating to Storm one day after BOQ issued a denial over a regulatory probe.
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Bank of Queensland Ltd (BoQ) says there is no evidence of dishonest practices by the bank in connection with Storm Financial clients.

BOQ sought on Thursday to clarify its position given what it said was “significant misinformation” in the media about its dealings with Storm Financial and Storm customer accounts.

Based on “the bank’s knowledge and enquiries to date”, it said, “there is no evidence of improper or dishonest practices or conduct by the bank in connection with Storm clients”.

BoQ said in a statement to the Australian stock exchange that there also was “no evidence that the bank has engaged in any misleading and deceptive conduct or unconscionable conduct in relation to its lending to Storm clients”.
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Commonwealth Bank Ltd (CBA) and legal firm Slater & Gordon say they will negotiate over former Storm Financial clients who entered into loan agreements with the bank.

As part of the accelerated resolution process, former High Court judge Ian Callinan will act as an independent arbitrator where the CBA cannot reach agreement with Storm Financial clients.

CBA and Slater & Gordon said they would implement the “accelerated resolution process” to achieve a fair and equitable outcome for Storm Financial clients who entered into loan agreements with CBA and or its Colonial Geared Investments offshoot.

“The bank remains committed to an accelerated resolution process for its customers,” CBA said in a statement on Wednesday.
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Australia’s biggest lender will worsen the situation for investor clients of collapsed financial adviser Storm Financial, the government says.

Commonwealth Bank of Australia announced last week it would suspend all repayment obligations for loans taken out by Storm Financial customers until August 31.

In some cases, borrowers took out margin loans against the equity in their homes.

Labor MP Bernie Ripoll, who chairs the Parliamentary Joint Committee on Corporations and Financial Services, said the bank wanted to accrue interest within a three-month window, and add that to outstanding loan amounts after that time.
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Commonwealth Bank of Australia Ltd (CBA) has acknowledged that some of the bank’s lending practices contributed to the hardship faced by clients of collapsed financial adviser Storm Financial Ltd.

Australia’s biggest lender will suspend all repayment obligations until August 31 for all loans in relation to Storm Financial, Sydney-based CBA said in a statement on Wednesday.

“We are not proud of our involvement in some of these issues and we are working toward a fair and equitable outcome for our affected customers,” chief executive Ralph Norris said.

“Our customers can be assured that where we have done wrong, we will put it right.
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Investors are poised to fork out more than $6.5 million for two properties owned by failed investment firm Storm Financial to cover outstanding bank debts.

The luxury Townsville headquarters of the firm was passed in at auction, in front of a crowd of about 40 people, for $5 million on Thursday.

It came a day after Storm’s Cairns office sold for $1.55 million.

The highest bidder on the Townsville property is now in talks with the company’s receivers on a final price.
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The Federal Court has ordered the wind-up of Storm Financial company Victorian Families Retirement and Investment Group Pty Ltd.

Provisional liquidators Ivor Worrell and Raj Khatri of Worrells Solvency and Forensic Accountants have been appointed as the official liquidators of the Geelong-based financial adviser.

Mr Worrell said the application to formally place the company into official liquidation was inevitable given the demise of its parent company, Storm Financial.
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Administrators for the failed investment company Storm Financial have recommended it be placed in liquidation.

Administrators Raj Khatri and Ivor Worrell of Worrell’s Solvency and Forensic Accountants said that liquidation would give creditors a better and more certain outcome.

Their report reveals that Storm owed the Commonwealth Bank of Australia (CBA) $27,094,574 at the time of its closure.
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An inquiry into collapsed investment advisory business Storm Financial Services has been welcomed by Corporate Law Minister Nick Sherry.

Storm is estimated to have lost $1 billion late last year, affecting its 450-plus client base.

A parliamentary joint committee on corporations and financial services has been set up to explore corporate collapses such as Storm and other recent high-profile failures, including Opes Prime.
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