Commonwealth Bank Statement To AFR re: Storm Financial
23 April 2009
Re: Storm brews for CBA offshoot (AFR, 21 April 2009)
The Commonwealth Bank is seeking a correction to the allegation in Duncan Hughes’ story that the Bank or its subsidiary Colonial Margin Lending paid Storm Financial Services “an 8 per cent initial commission…for arranging margin loans”.
This is absolutely incorrect. The 8 per cent ‘commission’ to which Mr Hughes refers is the fee Storm Financial charged its customers for providing advice. These fees are negotiated by Storm for Storm's advice and specifically outlined in the statement of advice as required by law and which the clients sign.
Mr Hughes suggests that the Bank paid these exorbitant costs as a commission to Storm which is untrue and therefore misleading.
Mr Hughes states that the information in his story emanates from a former senior Storm executive. The leaked “information” seeks to paint the Bank as being responsible for Storm’s failings.
This has been a consistent theme of former Storm executives since Storm’s collapse as they seek to whitewash their responsibility for the failure of Storm. This is emphasised by the self-serving information in the final paragraph of the article.
The article’s claims about an autographed cricket bat are also misleading. The souvenir mini-bats referred to were part of a job lot of autographed souvenir mini-bats acquired by Storm from Andrew Symonds for Storm’s promotional purposes. Three souvenir bats were given to different Bank officers by Storm as a “thank you” from Storm for a good job by the Bank.
Contrary to the false material in the report, the supply of the mini-bats was not a precondition for any alterations of any loan conditions between the Bank and its customers.
Senior Media Adviser
The Commonwealth Bank