In his book “I ACCUSE’ Frank Ainslie has described how Storm Financial and certain banks conspired together to exploit their clients by adopting a policy of reckless overleveraging and imprudent lending.
When so doing, they were aided and abetted by a poorly regulated financial system, and a number of consumer laws that invariably protect the wrongdoers rather than the victims.
In his recent “CONFLICT OF INTEREST” submission to the Attorney General of Australia, (see below covering letter and submission) Frank is now alleging that ASIC acted outside its powers when it lodged an Appeal with the Federal Court in relation to the Macquarie Bank Class Action Settlement. He further maintains that when this Appeal was upheld, the Federal Court then compounded this wrong by acting incorrectly in Law when approving the revised settlement agreement because its “terms” had been changed without the approval of the Group Funder Members. Frank and Helen were two of the Group Funder Members involved.
Frank believes that the legal issues involved in this case are important to all Australians because the common law rights of all individuals are under threat if Courts and lawyers can act arbitrarily in order to contrive a result.
“Does the end really justify the means or should the Law prevail in all such instances?” That is the question that Frank is now asking of the Attorney General.
Frank has circulated this submission to the legal fraternity in Australia including the Federal Court Justices, the major class action law firms, the law universities, and those that have written papers about the class action system in Australia. So far, their silence has been deafening. You make up your own mind.”
"CONFLICT OF INTEREST" By FRANK AINSLIE A former Group Funder Member of the Macquarie Bank Class Action
"COVERING LETTER" By Frank AINSLIE To the Attorney-General’s Department
WARNING to all Investors and Would-Be Investors in Australia
Frank Ainslie is one of the thousands of Victims who lost everything in the STORM FINANCIAL BANKING SCANDAL.
He has written the book "I ACCUSE" as a Financial Health WARNING to all investors and would-be investors in Australia to think twice before signing on the dotted line.
"I ACCUSE" is a factual account of the true reasons why Storm FINANCIAL collapsed, and the roles major banks played in its demise.
This book should serve as a watershed for all investors because it highlights the dangers of placing your trust in those in the financial sector that may not have your best interests at heart.
Below is Frank's story of his involvement with Storm Financial, and how ASIC and the Government failed to protect consumers before and after the Storm. "
This is Frank's story.
Helen and I first met in 1997. She owned a convenience store and sub-news at the time situated in Woodridge, a Brisbane suburb.
In 2002 we purchased half of the shopping centre in which her shop was located. In 2005 we sold the shop and used the proceeds to pay off the mortgage on the shopping centre. We then sold the shopping centre in 2007 for $1.1 million.
At that time we had no debts and our assets totaled $1.64 million. We thought carefully about what we would do with the million dollars in cash we had in the bank. Then, we were earning 7% on this amount that was in an account with the Suncorp Bank.
Helen wanted to leave a legacy for her children (three grown up daughters) and her grand children, so we started looking around for a sound investment that was “low risk” but would give us sustained growth over a period of time. That’s when some friends of ours told us about Storm Financial. They had been with Storm for some years and they were very happy with what Storm had done for them.
After attending some seminars at Storm’s premises in Brisbane, we decided that Storm’s strategy, as sold to us, was both sound and secure. Storm informed us that the shares we would purchase through them would be spread over a broad spectrum in the share market, and the controls they had in place would insulate us against any marked fluctuations that can be expected in the share markets from time to time.
What we didn’t know then was that Storm’ policy of over-leveraging its clients’ assets was a self-serving one. It was a ‘high risk’ policy when we and countless others in Storm were looking for a “low risk” strategy. Unfortunately, we were not aware at the time of the risks involved in such a strategy because we were, to use Bernie Ripoll’s words, “unsophisticated investors.” I had been employed around the world in higher management within the freight forwarding industry for nearly 30 years, and Helen had been in retail since 1983. Therefore, we were both highly experienced business people. However, we knew little about investing and that is why we employed the services of Storm Financial.
We paid Storm $145,000 in fees because we thought that we were buying the best advice that money could buy. In fifteen months, Storm managed to lose it all and leave us with a half a million-dollar debt. The occurrence of the GFC in late 2008 didn’t help our cause, but our losses and those of many other Storm clients were not due solely to this event. Rather, our losses came about because Storm and the Banks had covert agreements that “cut across” our margin loan agreements with the banks These secret agreements were the real reason why our shares were sold down only after many weeks had passed.
When a Black Swan event occurs such as the GFC thereby causing the share markets to crash, any delays in the selling down of shares by even a few days can mean the difference between solvency and bankruptcy. The CBA took 10-12 weeks to contact its customers and the Macquarie Bank took 3-4 weeks to do the same. THAT was the reason why these losses occurred in such epic proportions.
People need to remember that Storm didn’t just give us “bad advice”. It’s no crime to give “bad advice” if it’s done in good faith. Storm’s advice went further than this because it was “misleading and deceptive advice”. There are still many in our community that don’t understand the difference between the two. Many still insist that the victims of Storm were partly to blame for their own troubles because they should have been able to see through Storm’s duplicity from the start. If that were the case, why were ASIC also misled into believing that Storm was operating within the boundaries of the Corporations Act right up until the end? If ASIC didn’t know what Storm was up to, how could anyone with any commonsense expect Storm’s clients to spot the deception?
By acting in the way it did, Storm breached certain sections of the Corporations Act and ASIC has charged the former directors of Storm accordingly. Our Storm Financial adviser, Mr. Stuart Drummond was also suspended by ASIC for the same reason. He is now probably back out there practising again or soon will be so watch out!
When Storm collapsed, we thought that we would be protected under the Law. I have found out since that when something like this happens to you, you have little or no protection at all because the consumer laws in this country are defective.
In 'I ACCUSE' I have documented my path to seeking justice and the many obstacles I have encountered along the way. My mission is a simple one. I want to warn others of what can befall them when they put their trust in those within the financial sector. I also want to challenge the consumer laws in this country because they, in my opinion, subjugate the common law rights that each individual in our democracy is entitled to rely on as an Australian citizen.
I have studied commercial law both in the UK and Australia so I am not exactly a novice in this area. For six years I have been researching the collapse of Storm and the reasons why so many of Storm's clients lost everything. Many that lost their life savings when Storm went under have been left with nothing. Even their will to fight has been emasculated by a system of justice that seeks to protect the wrongdoers whilst isolating the victims. In I ACCUSE, I have given the victims a voice.
I am also a published author: My book, 'THE THIRD SECRET' can be downloaded free at:
I formulated my own 'Google' Group in 2010 which I named 'SOB' (Storming on Banks). I also have two websites devoted to the machinations of the banks associated with Storm:
(1) Storming on Banks https://sites.google.com/site/stormingonbanks/home
(2) Bank of Queensland Class Action https://sites.google.com/site/boqnorthward/
Banks such as the CBA, the Macquarie Bank and the BOQ figure prominently in 'I ACCUSE' because they play a major role in the Storm Financial saga. These banks aided and abetted Storm by supplying bank loans to Storm's clients that were in many cases "imprudent" and did not conform with the banking codes adopted by these banks. The fact that these banking codes are never enforced despite the many breaches of the codes by these banks and others is a prime example of why the financial system in this country has failed to meet the needs of consumers.
The Judiciary by failing to bring these banks to account has perverted rather than preserved the rule of law. Further, in the case of the Macquarie Bank Class Action Group Funder Members, the courts have actually tarnished the law by ignoring the contractual rights of those individuals. By allowing the Macquarie Bank settlement agreement to be amended rather than having it declared "void", the Judiciary's decision is at odds with the common law rights of persons that enter into a legal contract. The rules governing the occurrence of "frustration" in a contractual agreement have been sacrificed for the sake of expediency.
The Government and ASIC have failed to protect consumers by not insisting that all financial advisers have an effective 'Professional Indemnity Insurance' cover in place (mandatory under the Corporations Act as it stands). By their failure to ensure that Storm had an adequate PI insurance cover, the Government and ASIC stand accused as the principal instigators of the Storm Financial disaster. Needless to say, the Government and ASIC have been doing everything possible ever since to cover up their failings in this regard.
In 'I ACCUSE' I have detailed the various aspects of our case so that people can readily understand that the Government and the consumer laws it has introduced are weak and ineffectual. Further, the Regulator, ASIC, has been asleep on the job for far too long. Any other watchdog would have been put down a long time ago.
The truth of the matter is that vested interests rather than the rights of the consumers always comes first, and it will remain so until this Government is prepared to act to implement changes that can offer investors the protection they deserve. Our rights should be paramount in all things. That is not currently the case in this country.
Let ‘I ACCUSE’ stand as a reminder to all investors and potential investors in Australia that their money isn’t safe when they invest using financial advisers. Nor is it safe when they take out loans from banks for investment purpose. Why? Because if you are deceived or parties such as banks grant loans to you that you may be incapable of paying back, all the ‘rights’ and the ‘might’ are on their side, and your chance of seeking justice is ‘out of sight’ unless you have more money than you lost to fight your case in a court of law. Even then, the odds are not stacked in your favour.