On Thursday 28th March 2008 at 4:30pm directors of Opes Prime Stockbroking placed the company in voluntary administration. Half an hour later the main creditor, the ANZ bank, called in receivers Deloittes.
Opes Prime Stockbroking were a, let's say, boutique broking firm that had a rather unique business model which specialised in margin lending. Any customer that used their services and thereby deposited cash or shares in their accounts effectively gave up ownership of those assets REGARDLESS of if they were borrowing any money to buy shares. Typically assets are used as collateral to cover outstanding loans only. In this case Opes pooled all the assets and used them as collateral for loans from the ANZ bank and also loaned out the shares to hedge funds for a fee (which clients didn't see any of)
Now there is a 32 page financial disclosure statement that contains some very ambiguous language but not even professional investors or their lawyers fully understood this, because if anyone had understood this then Opes would have ZERO CLIENTS. For all intents and purposes it looked like a normal broking arrangement with a margin lending facility.
The upshot is that at 4:30pm on Thursday 28th March all clients of Opes Prime, regardless of whether they used their margin loan facility or not, became unsecured creditors. There are stories of clients who had only just deposited funds ready for trading a few days before and will now most likely not see a cent.
And as the story unfolds the ANZ bank are becoming more complicit in the destruction of investor funds, not only during the liquidation phase but in the days, weeks and months leading to the collapse. We can't let these institutions get away with this...time to make a stand as next time it could be you!
Subscribe to:
Post Comments (Atom)
5 comments:
Others starting to form the same view:
Front article in The Australian
http://www.theaustralian.news.com.au/story/0,25197,23464162-601,00.html
"Mr Murphy made it clear he held the ANZ, which lent $650million to Opes, responsible for much of the damage associated with the collapse.
He believes that if margin calls had been made by ANZ, he would now be in a far more favourable position."
I would not rely on any statements made by Mr Murphy. I do not believe he was unaware of how bad his loan position was, as he stated in the press to having retired from the legal profession and become a professional trader, starting his activities at 4am every morning. As a professional trader, he would have seen his daily account position each day on his trading platform, otheerwise how would he know what position size he could afford to take on a trade. He had a close relationship with the CEO of OP, who was using round robin movement of stock to cover the accounts of Murphy plus 5other rich persons, a total of 6 accounts. Refer press stataement regarding ASIC injunction on CEO leaving country. Therefore, Murphy could have been a part of the scheme to protect the 6 rougue accounts from going over margin limits.
Murphy would have been 100% aware of his position dont for 1 second think that he didnt know down to the cent what his mark to market position was. I have no doubt that he is one of the ring leaders in this and hope he spends time in gaol.
Where there is smoke there is fire! Why would the MD take such reckless and illegal action if it wasn't to help out mates who asked him to do it?
re Murphy's comments. I don't like him for the fact that he has received some help with his account but I wonder if he will be taking ANZ to court?
Post a Comment