How a Rocky family lost $8 million

KEVIN and Debbie Lock spent their lives building their wealth.

If they hadn't trusted Storm Financial, the Rockhampton family might still have their $8 million portfolio.

They trusted the financial advice company because it was backed by the pillars of Australia's banks.

One year after the company failed, Mr and Mrs Lock were left owing $188,000. They've told an inquiry into the Storm collapse that the banks are as much to blame for their loss.

Mrs Lock this week gave evidence in the Brisbane Federal Court.

Mr and Mrs Lock worked strenuously over 25 years to build their wealth, operating Red Rooster franchises and rental properties.

Their portfolio of $8 million was invested by Storm after the couple's local financial adviser pointed them to Emmanuel Cassimatis's plan, which was backed by major banks including the Commonwealth Bank.

Mr and Mrs Lock said they thought, with the banks backing it, that Storm was a company they could trust.

On November 28 last year, the Locks had a video link-up with Mr Cassimatis, when the situation became clear.

“You're screwed,” Mr Cassimatis allegedly told them.

However, before the video conference the pair had been told they were “fine”, that they had money and were encouraged to “just hang in there”.

Mr Cassimatis had a different story, revealing their $8 million portfolio had evaporated and the Locks owed the Commonwealth Bank $188,000.

Mr and Mrs Lock said the banks had a lot of questions to answer and were just as much to blame.

“They enabled Storm,” Mrs Lock said.

“Without the banks, Storm wouldn't have been able to fulfil their model. And the banks knew full well what Storm's model was.”

Mrs Lock said their investments were “double-geared” so they were borrowing money against their homes and then more against their initial loans.

“It was something we had never heard of before. It certainly wasn't explained. But the banks obviously knew what it was.

“The fact that our local ANZ branch manager had attended the Storm office, he knew the model was double-geared.

“A former ANZ financial planner told us ANZ would never double-gear their clients. But they obviously did for Storm Clients.”

Mrs Lock said double-geared investments had led them to “negative equity”, where they had lost their entire wealth and ended up owing the bank.

She told the hearing there was an agreement between Storm and the CBA, but when the market kept plummeting the CBA changed its mind and wanted to be paid out.

“They let us get to negative equity ... they then sold our shares, paid off the loan that we had and said, 'Oh, by the way, you owe us more money',” she said.



REVEALED: The hot property suburb surging ahead in sales

premium_icon REVEALED: The hot property suburb surging ahead in sales

PRICES soar nearly 20% as buyers hone in on best location

New pool product gives you the Dead Sea in your backyard

premium_icon New pool product gives you the Dead Sea in your backyard

No need to travel overseas with this exciting new product

Local Partners