CBA close to ending Storm saga
Commonwealth Bank has dealt with the majority of customers caught up in the failure of Storm Financial, the bank reported yesterday.According to the CBA's 2010 sustainability report, 60 per cent of offers made to customers who suffered financial difficulty or loss as a result of advice given to them by Storm had been accepted at June 30. The bank expects the compensation scheme to be concluded by the end of this month.Storm Financial recommended an investment strategy based on double gearing. Clients were advised to take out a home equity loan and use the funds raised as security for a margin loan.Commonwealth Bank was one of the lenders that worked with Storm.According to the Australian Securities and Investments Commission, 450 of Storm's clients ended up owing their margin lender more than the value of their portfolios.In the worst cases, involving about 300 clients, a total of $20 million was owing after the onset of the bear market in 2008 and the collapse of Storm.CBA's offers include loan reductions and write-offs, restructures, reduced or zero interest for the life of the loan and permanent tenancy arrangements.