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Ex league star Gibbs facing ruin

Discussion in 'Rugby League Forum' started by Guest, Jan 29, 2009.

  1. Guest

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    RADIO 2UE sportscaster and celebrity agent John Gibbs is facing financial ruin and the loss of his family home in the wake of an $88 million corporate collapse.

    Gibbs confirmed yesterday he is among more than 230 creditors who invested heavily with Storm Financial Services, which was placed in administration this month.

    Who is John Gibbs?

    The former Manly Sea Eagles rugby league stalwart and player manager is battling to save his Seaforth home after mortgaging the property to secure investments four years ago.

    A "devastated" Gibbs told media writer Holly Byrnes he had "suffered immensely" since the market downturn and company default.

    "I, like many, sought good financial advice and obviously it hasn't had a happy ending. It's sad. I feel sorry for all the Storm clients and the effects of what has happened."

    Gibbs read on-air commercials spruiking Storm during his nightly UE sports show two years ago but denied he was paid by Storm Financial to do so.

    "I was a client before I started reading ads. I did so in good faith and only after I became an investor myself," he said.

    Gibbs, who manages best mate and The Footy Show star Paul Vautin, declined to comment on the extent of his liability.

    However it is understood it could be as much as $6 million. "My loss is profound but I will work through it by working hard and with the support of my family," Gibbs said.

    "We're battling on and determined but I am a victim like everyone else."

    He shouldn't have been so greedy. 
     
  2. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

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    Gambling.  Trying for the overs never works.
     
  3. ManlyBacker

    ManlyBacker Winging it Staff Member

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    The financial guidance provided by Storm was absolutely outrageous and moreso for any client who was close to or retired. I doubt that Gibbs falls into this category as he was in full-time employment. The CBA, Bank of Queensland and Macquarie all have some serious questions hanging over them by approving these loans and the closeness of their relationship with Storm Financial. I would not be surprised if the upcoming class actions by clients prove to be a very expensive lesson for these organisations.
     
  4. CC_Eagle

    CC_Eagle Member

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    With a name like "Storm" being dodgy is expected right?
     
  5. Guest

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    2008 was certainly a bad year for anything named storm.

    I agree MB that the bank's appear to have got too close to this company and it sounds like a lot of dodgy low doc loans were written for pensioners and retirees. 

    Storm was a mortgage broker as well as a finanical planner (conflict?) and if the broker has written the income amount on the income declaration then I reckon that Slater and Gordon would go storm for fraud as well because the clients will claim that they are old and didn;t know what they were signing (which si probably true). 

    On the upside there will be quite a few cheap houses for sale shortly in Townsville which will probably be bought by wealthy litigation lawyers.
     
     
  6. The Wheel

    The Wheel Well-Known Member

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    From the Herald Sun - some facts for Tookey & MB on the CBAs involvement


    Bluster from Storm

    by John Beveridge on money,markets and mishaps.

    NOBODY should be fooled by the public relations hype being drummed up around the mammoth collapse of financial planning group Storm Financial.

    As hundreds of former clients begin to sell their homes to pay for monster debts built up in the debacle, Storm founders Emmanuel and Julie Cassimatis (pictured) are
    busy pointing the finger at the Commonwealth Bank.

    That's like blaming a car maker after you have successfully driven one of their products off a cliff. There was nothing inherently wrong with the margin lending products supplied by
    Commonwealth and its subsidiary Colonial - as long as they were in the hands of the right people.

    It turns out that they weren't, with the financial equivalent of a finely tuned Ferrari being driven by pensioners and retirees who would have been much more safe and
    comfortable in a small, fully owned Holden.
     
  7. CliffyIsGod

    CliffyIsGod Well-Known Member

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    Gibbs chased something with a hgiher risk, wanting a higher return and it didn't work out.

    It happens.
     
  8. ManlyBacker

    ManlyBacker Winging it Staff Member

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    This isn't facts! The reality is that CBA wrote over a billion dollars of loans through one office and didn't think it prudent to look closely at who and their circumstances they were lending to. 95% margin lending is almost immoral. I'm no expert in the law but I am positive there will be a class action and its main target won't be an insolvent Storm.
     
  9. Guest

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    Why was CBA lending 90% LVR on a margin loan?  The nomal LVR is 50-60%.

    "A vast number of Storm clients were advised by Storm to use margin loans as a way to turbo-charge their investment returns. Many of these margin loans were taken out with Colonial Geared Investments, a subsidiary of Commonwealth Bank.

    Cassimatis claims CBA should have acted quicker as the portfolios of Storm clients were decimated by the financial crisis. He says margin loans should have been called in when the debt-to-value ratio of the loans hit 90%. Instead, Cassimatis claims, CBA waited until the loans reached a point where they fell into negative equity.

    “"My finger points squarely at the Commonwealth Bank," Cassimatis earlier told the Nine Network.

    "The cause of what has happened is where they dropped the ball."

    He told The Australian that CBA lacked the personnel or the systems to handle the volume of margin loans from Storm clients.

    "On the 20th of November, the data caught up with them, they had a panic moment and they sold everyone out, crystallising negative equity, destroying the portfolio of investors."

    CBA and other banks are likely to face legal action on behalf of a large group of former Storm clients. Law firm Slater & Gordon already has more than 250 Storm clients signed up to its class action and will hold a meeting in Townsville tonight to marshal more support.


    And the CBA gave storm one day to refiunance its debt.  No matter how small the loan was it is impossible to orgainsie a refinance in 24 hours.  

    Storm Financial has said it called in administrators earlier this month after receiving a notice from Commonwealth Bank of Australia Ltd that gave the financial planning firm one day to repay its debt.

    The Bank's shouldn't have been lending hundreds of thousands of dollars to pensioners and retirees with limited fixed income which was inadadequate to repay the debt.  

    Storm chiefs 'drunk at the wheel'January 21, 2009

    A lawyer for more than 350 clients of collapsed investment advisory service Storm Financial says the greed of the company and the banks saw hundreds lose the fruits of their life's work.

    The lawyer's comments came as a senator called for an inquiry into the role of banks in the current financial crisis.

    Many investors face losing their homes after Townsville-based Storm Financial went into administration earlier this month.

    Investors were encouraged to take out high-risk margin loans to buy shares, which have now fallen in value.

    Damian Scattini, of the law firm Slater & Gordon, took aim at finance industry players, accusing them of being "drunk at the wheel'' as the crisis grew.

    Mr Scattini spoke at a meeting of hundreds of investors on Tuesday night at a restaurant at Margate, near Brisbane.

    "It was very sad to see so many mums and dads sitting in the audience all of whom have lost, or are about to lose, everything they worked for for their whole lives,'' he said.

    "There were 300 or 400 in the room, all with a diabolical problem.''

    Mr Scattini said the collapse was brought about by "the greed of Storm and the banks''.

    He said Storm Financial investors were given bad advice by banks that should have known better.

    Mr Scattini backed a call from NSW National Party senator John Williams for a Senate inquiry into the banking system.

    Catastrophe

    Senator Williams said such a probe could determine whether banks had acted appropriately, and identify any need for legislative change.

    "The whole world economy has been brought to its knees because of greed and stupid banking,'' Senator Williams said.

    Mr Scattini said the financial crisis was "an absolute catastrophe, as was the foreign loans situation 20 years ago''.

    Unless there was legal reform another crisis was on the cards, he said.

    "The financial industry, or large parts of it, for the last five years or so have been drunk at the wheel,'' Mr Scattini said.

    He said Storm Financial investors, the company's insurers and the banks all shared responsibility.

    "Hopefully we can sit down and work through those problems without having to all head off to the Supreme Court, but if that's where we have to go to have the independent umpire work it out, that's where we'll go,'' Mr Scattini said.

    Senator Williams said he would raise the issue of an inquiry into the banking system at a National Party meeting next week.

    The Commonwealth Bank lodged a $27 million debt claim at a meeting of Storm Financial creditors on Tuesday.

    Administrators Worrells Solvency & Forensic Accountants could not comment on the amount of money that could be recovered through asset sales.

    The Australian Securities and Investments Commission last year launched its own investigation into Storm Financial.
     
  10. The Wheel

    The Wheel Well-Known Member

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    Once again Storm badly advised and handled their financial affairs not the CBA
     
  11. Matabele

    Matabele Well-Known Member

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    Phil Blake was recently dudded $200k by a bloke with a fake MBA I believe.
     
  12. Guest

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    Storm financial's methodology was very aggressive and encouraged clients be be highly geared.  However they didn't lend them the money the bank's like CBA did.

    Why a 90% LVR for a margin loan just for storm clients?  Normal clients cannot obtain that LVR so CBA did special deals for storm clients and now they pay the penalty.  I have heard that as the market rose they continue to leverage to 90% LVR.  A receipe for disaster as soon as the market takes a fall.

    The Bank obviously got too close to storm and it will be interesting to see what eventuates out of the investigation into the loan book.  Judges don't take too kindly to bank's lending hundreds of thousands of dollars to old age pensioners. 

    No matter what the CBA will be dragged in to lengthy and costly litigation and even if they win it will still cost them and their shareholders plenty. 
     
  13. Chip and Chase

    Chip and Chase True Supporter Staff Member Administrator Premium Member 2016 Tipping Competitor

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    Did any of these clowns who geared themselves so highly ever stop to think what would happen if the market dropped ?? I'm sure Storm are liable in some way (seriously, after seeing that Cassimatis fool interviewed the other day it's got me beat how anyone would take financial advice from him....he's got snake oil salesman written all over him). As may well be the CBA for allowing such high leverage.....but the bottom line is that no one held a gun to these peoples' heads. If you want the high returns you've got to accept the risk, no point crying like a b!tch when it all goes pear shaped.
     
  14. PONTIAN SEA EAGLE

    PONTIAN SEA EAGLE Well-Known Member

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    Maybe this company should have been run by bellamy & that dickhead ceo the storm had.
     
  15. Lachie

    Lachie New Member

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    I have very little pity for these (ex rich) guys whinging about losing money on the markets.

    What these people seem to forget is that the markets are a gamble, not a guarenteed return.

    When I go to the races and have a punt and lose I cant go and sue the bookie because I lost. The stock market is the same, put the money in that you can afford to lose, if you cant and you take out loans then dont bitch when your horse doesnt get past the post first.

    Cheers
     
  16. Canteen Worker

    Canteen Worker Well-Known Member 2016 Tipping Competitor

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    Anyone who is looking for quick, easy money must understand there are risks and sometimes it is easy come and easy go. If something looks too good to be true, it usually is.
     
  17. ManlyBacker

    ManlyBacker Winging it Staff Member

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    There will have been clients who saw greedy dollar signs and they paid the penalty. Other Storm clients will have been elderly, frail of mind and trusting. These ones would probably have heard Gibbsy on the radio, or had friends who recommended them. They would have little knowledge of handling money, had saved all their lives to pay off their house or had available to them superannuation. They would have attended a financial planning session where they were utterly convinced that it was all safe, the returns were guaranteed and that this was normal practise by the smarties in the know. Yes, they were fools but the bottom line is they were seriously misled by (put in your own words here, I'm not going to get sued). These people are entitled to protection!
     
  18. DSM5

    DSM5 Well-Known Member 2016 Tipping Competitor

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    Look MB I know what you're getting at, but the bottom line is 'protection' from what.  Higher dividends means higher risk.  I can't imagine any of these old fools would ever vote for a Socialist Party or one that talks about the redistribution of income to flatten out the wealth creation and spread it around.  No, for these old folks to gain a larger percentage on their borrowings must have known that someone along the food chain was going to lose out, surely they thought of this when borrowing to throw at these speculative ventures.  Sure throw the creators in the can and throw out the capitalist system while you're at it.  But anyone, even old anyones', must have known that going for the big dividends means 'speculation' and speculation means gambling. 
     
  19. ManlyBacker

    ManlyBacker Winging it Staff Member

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    They would have been told that it was normal practise, absolutely everyone is doing it, there is no threat to your homes. My guess is that it was sold as a succesful way to guarantee income through retirement rather than a 'here you go get-rich scheme'. I don't see it any differently to protecting the elderly from unscrupulous car salesmen, shoddy travel agents or door-to-door roof repairers. The question will be just how gullible all of them were, but if you help the elderly like I do you will know just how easily they could be misled or how trusting they can be.
     
  20. byso

    byso Well-Known Member

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    And how long were Storm stopping investors from getting their money out/back. Prior to the collapse?

    Too be honest I have little remorse for Gibbs the fact he was advertising this crap, is indefensible.
     

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