The lawyer's comments came as a senator called for an inquiry into the role of banks in the current financial crisis.
Many investors face losing their homes after Townsville-based Storm Financial went into administration earlier this month.
Investors were encouraged to take out high-risk margin loans to buy shares, which have now fallen in value.
Damian Scattini, of the law firm Slater and Gordon, took aim at finance industry players, accusing them of being "drunk at the wheel'' as the crisis grew.
"It was very sad to see so many mums and dads sitting in the audience all of whom have lost, or are about to lose, everything they worked for for their whole lives,'' he said, speaking at a meeting for hundreds of investors.
"There were 300 or 400 in the room, all with a diabolical problem.''
Mr Scattini said the collapse was brought about by "the greed of Storm and the banks''.
Investors in Storm Financial were given bad advice by banks that should have known better, he said.
NSW National Party Senator John Williams has called for a Senate inquiry into the banking system after the collapse.
Senator Williams said such a probe could determine whether banks had acted appropriately, an identify any need for legislative change.
"The whole world economy has been brought to its knees because of greed and stupid banking,'' Senator Williams said.
Mr Scattini said the financial crisis was "an absolute catastrophe, as was the foreign loans situation 20 years ago''.
"The financial industry, or large parts of it, for the last five years or so have been drunk at the wheel,'' Mr Scattini said.
He said Storm Financial investors, the company's insurers and the banks all shared responsibility.
Commonwealth Bank lodged a $27 million debt claim at a meeting of Storm Financial creditors yesterday.
Administrators Worrells Solvency & Forensic Accountants could not comment on the amount of money that could be recovered through asset sales.
The Australian Securities and Investments Commission last year launched its own investigation into Storm Financial.
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