Another week, another round of bad news for margin lending clients of Storm Financial.
It emerged on Monday that the Townsville-based group has gone into voluntary administration.
Emmanuel Cassimatis, joint managing director of Storm, was quick to point the finger of blame at Commonwealth Bank for what he described as an “extremely aggressive demand” – essentially the repayment, in just one day, of tens of millions of dollars on corporate facilities owed to the bank.
(The fact that CBA insists Storm was in fact given one week’s notice is beside the point).
“This is obviously a deeply distressing event and both Julie and myself are devastated,” Cassimatis said in a statement on Monday.
“Our personal losses are of little consequence to us at this stage: it is the interests of our clients that are at the front of our minds.”
Ah, it’s a little late for that now, isn’t it? After all, at ASIC’s last count there were 300 clients who owed their margin lender more than the value of their portfolio – a not so insignificant sum of $20 million.
I doubt the sentiment of Storm’s directors is those clients’ main concern right now.
Cassimatis went on to imply that if it wasn’t for CBA’s request for repayment (of money it was rightfully entitled to, I might add), Storm may well have emerged from the financial crisis unscathed.
“We were steering the business through these tough economic times but the bank’s demand put that beyond us,” he said.
Could the firm have “steered” its way through the maelstrom? That we will never know, but one thing’s for sure; it is the clients who will be left to clean up the damage.
*Should Storm be held accountable for the advice provided to its margin lending clients? Click on the comment button below to join the debate