Extract from Business Spectator Article
Four Opes clients appeared before the Federal Court Justice Raymond Finkelstein seeking an injunction to prevent ANZ selling shares they believe they, not the bank, rightfully own.
Court documents from the case show exactly how Opes Prime clients could have become confused as to whether or not they retained ownership of their shares under Opes’ stock lending agreements.
The documents state that in May 2005 the clients entered into stock lending agreements with an entity then known as Opes Prime Securities Limited (it is now known as Southeastern Capital Limited), a company incorporated in the British Virgin Islands. The agreements were entered into by completing an application form attached to an Opes Prime Securities financial services guide. On page five of the version of the FSG tendered to the court (dated April 2005) are the magic words at the heart of this case:
“The [individual applicants] retain beneficial and economic ownership of the lent stock, including full exposure to dividends and corporate actions, and exposure to market risk. The transaction can be reversed at any time.”
In other words, the clients – not Opes Prime, or its bankers, or its eventual receivers – owned the stock that was lent
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3 comments:
When was the FSG updated I signed in mid 2007
I'm not sure at this stage, although I have read that is was updated Feb 2008. Will be getting some legal advice this afternoon and will report back
There are 2 FSGs. The first dated 2005 and a new Feb 2008 version. The documents are significantly different. The former states that the client retain beneficial ownership of their shares. This has also been confirmed by emails from Dean Boyle, the Opes Chief Operating Officer, to CMG Capital, an Opes client, in both 2006 and most recently in Jan 2008. Then the Feb 2008 FSG is released, which is less specific. Clients who signed up under the old 2005 FSG were not informed about the new FSG published in Feb 2008.
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