Report : Ron Burgandy
Tuesday 15th November 2011
Contents : CBA CEO Ian Narev, Storm Financial, CGI margin lending
The continuing delivery of half-truth statements under oath again pulls the wool over the Parliamentary Committees eyes.
The Plain Truth has no doubt that Mr Ian Narev, the future CEO of the Commonwealth Bank, is an extremely smart man of many talents. Mr Narev has multiple law degree’s, won the University of Auckland’s prestigious senior prize in law and was awarded a scholarship to Cambridge. He was the top graduate in his Masters of Law degree class, has also obtained a Masters degree from New York University and an advanced degree from the University of Half-Truths (UHT). Mr Narev will need all the leadership skills he learnt at school on an Israeli kibbutz if he is to successfully and ethically complete putting right what his pending predecessor had done (and is probably still doing) wrong although on his current form Mr Narev isn’t looking promising.
Today’s release of pages 6, 7 & 8 of the letter sent by the Commission against Bank Atrocities to the CBA Board on 15 Aug 2008 further focus on the mistakes by the Commonwealth Bank and the crafty responses from Messers Narev, Cohen and co.
Pages 6 & 7 explain how Colonial Geared Investments (CGI’s) Empire margin loan management system could not possibly handle multiple definition contracts with different methodologies for calculating the point at which a margin call should be triggered. Given the CBA was and remains unable to explain away its margin loan systemic deficiencies without admitting it simply got it all wrong, the bank chose to adopt the position that all the bad consequences to Storm clients of the Empire system deficiencies should be blamed on someone else.
This brings us to page 7 of the letter – enter stage left Mr Narev…don’t address the system deficiencies, just tell the world that “we” the CBA sent Storm 3 files a day and paint a picture that “we” the CBA gave Storm all the information to enable it to make margin calls that “we” the CBA should have made. That inaccurate perception should divert the magnifying glass away from “us” the CBA. I mean after all, it is highly unlikely that the world would question us and ask to actually test the integrity of the data we sent.
Whilst Mr Narev contends that the ‘3 files a day sent to Storm were for the purpose of issuing margin calls’, The Plain Truth has uncovered the following:-
- Industry standard is that ONLY margin lenders can issue margin call notices, maintain margin loan account records and issue statements among other things.
- Samples of file notes viewed from the Storm database, which was provided to The Plain Truth by a source in the receivers offices, clearly show that the CBA’s ‘margin call response work’ allegedly performed by Storm was in fact buffer work aimed at preventing the possibility of margin calls. This is further supported by the 8 Oct Storm letter to clients.
- Contributing to overall deficient data, the “market values of securities were not updated by CGI in a timely manner resulting in information being delayed or not correctly available on the day it was required”. This was important particularly in the cases where clients were nearing margin call and made it difficult if not impossible for a client to make an informed decision. The table below illustrates this deficiency.
Finally when all is said and done Mr Narev, the above statements matter little because the data sent to Storm by your company was “profoundly defective”. This fact coupled with the non-issuance of margin call notices from CGI (to Storm clients) meant that the Commonwealth Banks destruction of Storm clients was inevitable. Please Mr Narev stop the half-truths and tell the full story. Three files a day you said were sent to Storm, on the surface seems to cover your position. However your story comes apart when the truth, which you conveniently omitted to mention, about how defective the data was, emerges.
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