Commonwealth Bank – Determined to be different

Bank grabs PJC ‘lifeline of ignorance’

Report : Ron Burgandy

Content : Colonial Margin Calls, PJC Bernie Ripoll, CGI Terms & Conditions, Margin Lending policies and procedures

Monday 16th April 2012

The ability of the Commonwealth Bank to make self-serving statements which are false and misleading knows no bounds. The merry dance into which the CBA has led the Parliamentary Joint Committee with respect to margin call notice requirements to Storm clients had culminated in one of the greatest travesties of justice in Australia’s financial history.

Bernie Ripoll … the chairman
of the federal parliament’s joint
committee on corporations
and financial services shows
his interest during damning
evidence against the CBA.

If the situation were not so tragic for the thousands of Storm clients then it would be a fun exercise popping the CBA’s bubbles. Throughout the Parliamentary Joint Committee’s Inquiry into Financial Services & Products the Commonwealth Bank consistently asserted that it had no strict contractual obligation to issue margin call notices to Storm clients. This is in spite of the fact that the CBA issued specific margin call notices to all investors who were non-Storm clients and CBA promotional material consistently implied that clients in margin call would receive a margin call notice outlining the appropriate remedies. One only needs to read the CGI PDS and advertising material to confirm this. It should also be noted that prior to 2008 Storm clients received ‘proper margin call notices’ directly from the CBA.

It appears to have been pretty much determined that CBA in fact had no strict contractual obligation to issue margin call notices. The Parliamentary Joint Committee accepted the CBA’s assertion that it had no contractual obligation to issue a margin call notice as proof that the CBA had fulfilled its margin call notice obligations. There has been mass debate about this point over the last 3 years however The Plain Truth is satisfied that a strict reading of the CGI terms & conditions confirms that in fact the CBA was not obliged to issue margin call notices. Why the CBA felt the need to insist vehemently that they did in fact issue margin call notices was a mystery…until now.

The inconvenient (for the CBA) truth is that whilst the CBA may not have had the strict contractual obligation to issue a margin call notice it was STRICTLY and CONTRACTUALLY OBLIGATED to issue a notice PRIOR to selling any of the client assets. This obligation explains the CBA’s obsessive need to justify that it did issue margin call notices to clients when it did not. The CBA craftily has asserted that it sent ’3 files a day’ to Storm and that these files constituted margin call notices.

If CBA contends that they were in fact issuing margin call notices to Storm advisors in 2008 then many, many copies of such notices should exist on the Storm Financial servers. The Plain Truth once again exhausted itself in this regard searching for evidence that ultimately doesn’t exist.

The Plain Truth has been able to obtain copies of margin call notices sent by CGI to non-Storm advisors. A copy of such a notice is included here for your reference.

Given that the CBA has been unable or unwilling to produce a similar example (to the one above) that was sent to a Storm advisor or client then clearly either the CBA appointed receivers have either tampered with the Storm database and erased all margin call notices (which does not help their cause and therefore seems unlikely) OR…no margin call notices were actually sent to Storm from CBA – which is in fact what happened.

The amount of detailed information included in CGI’s ‘proper’ notice of margin call is obvious and a far cry from the desperate spin that the CBA is trying to represent to its victims. The above non-Storm margin call notice is similar to CGI margin call notices previously issued. It clearly contains information such as BPAY codes, amounts to pay, reference numbers and options available to the borrower to remedy the margin call.

Below is CBA’s desperate response to one of its victims who requested many times for a copy of the alleged margin call notice the CBA claims to have made to Storm. After these many requests the CBA finally offered the following as evidence of margin call notices being issued. This is part of the information CBA forwarded to Storm in its ‘3 files a day’. The claim that this is a margin call notice is a complete fabrication and a despicable attempt to avoid accountability.

The above pitiful information (even if it was correct – which it wasn’t) did not constitute a margin call notice. Simply compare this with the notices that went out to Storm advisors prior to 2008 and non-Storm advisors prior to and including 2008.

These most important points were not investigated by the PJC and completely ignored by the Parliamentary Joint Committee Chairman Bernie Ripoll. A possible reason why Mr Ripoll failed to probe these critical issues may have been because he lacked sufficient intellect to understand the matter of the Inquiry. A more sinister view and one to which The Plain Truth subscribes, may be that Mr Ripoll deliberately and knowingly side-stepped these most relevant CGI terms and conditions in order to shield the CBA. Either way a monumental miscarriage has occurred desperately requiring a proper and better focused Parliamentary Inquiry for justice to be served.

The Editor
The Plain Truth,
PO Box 2783
New Farm QLD 4005

Content : Colonial Margin Calls, PJC Bernie Ripoll, CGI Terms & Conditions, Margin Lending policies and procedures

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