February, 25, 2010

A Smart Investing reader has reacted with seemingly harsh words to the Commonwealth Bank’s compensation scheme for Storm Financial clients who had taken large margin loans through the bank.Here’s a little of what he wrote to Smart Investing: “These people should accept responsibility for their own stupidity or greed.“Sorry, but you live by the sword, die by the sword … and gearing is indeed a two-edged responsibility,” he added.

Details of the dispute involving clients of failed financial planner Storm Financial, who had taken substantial margin loans on its advice, and the bank is once again being widely discussed in the media.In short, the bank promises to “put things right where we had done wrong” in relation to the margin loans. Depending upon the level of acceptance, more than 2000 investors could be compensated – costing the bank hundreds of millions of dollars.

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