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Opes Prime Fiasco

Interested to hear people's view on this failed stock-broker - Opes Prime...

ANZ as the main creditor is selling off millions of dollars worth of shares, and after selling off a truck-load of them Justice Ray Finkelstein is now determining if the shares really do belong to ANZ or the original share holders.

The matter was in court again today but the verdict has once again been put off to a later date.

What do you think...
Will ANZ (with their $13,000 a day lawyer) beat the 1200 little guys and retain title of the shares....

OR

Will ANZ have to buy back the shares (at inflated prices) that they had no right to sell, and give them back to the original owners.

???
I'd like to see the second option!
 
Re: Opes Prime Fiasco

farout; said:
Interested to hear people's view on this failed stock-broker - Opes Prime...

ANZ as the main creditor is selling off millions of dollars worth of shares, and after selling off a truck-load of them Justice Ray Finkelstein is now determining if the shares really do belong to ANZ or the original share holders.

The matter was in court again today but the verdict has once again been put off to a later date.

What do you think...
Will ANZ (with their $13,000 a day lawyer) beat the 1200 little guys and retain title of the shares....

OR

Will ANZ have to buy back the shares (at inflated prices) that they had no right to sell, and give them back to the original owners.

???
I'd like to see the second option!
Click to expand...

I'd like to see the second option!

WHY - are you a Opes client? What a strange comment to make without backing it up with some rationale as to why you feel like this, or is it just to have ago at a large bank?
 
Haha... I think you will find your comment was a little stranger.

Perhaps you are just naive, but this issue is going to affect many many people. Maybe you, maybe me... and no I am not an opes client.

If ANZ has to return sold stock to their owners this will help claw back the losses on some opes-related illiquid 'dead stocks' out there (ie BOE).

For those stocks (ie. MEE) who have remained relatively stable during the sell-off, if ANZ is forced to buy these tightly held parcels, these stocks will likely produce very large rallies. Smart investors will be flocking to these shares.

The pending decision will affect the market in many ways, including the way future contracts are drawn up.
 
farout; said:
Haha... I think you will find your comment was a little stranger.

Perhaps you are just naive, but this issue is going to affect many many people. Maybe you, maybe me... and no I am not an opes client.

If ANZ has to return sold stock to their owners this will help claw back the losses on some opes-related illiquid 'dead stocks' out there (ie BOE).

For those stocks (ie. MEE) who have remained relatively stable during the sell-off, if ANZ is forced to buy these tightly held parcels, these stocks will likely produce very large rallies. Smart investors will be flocking to these shares.

The pending decision will affect the market in many ways, including the way future contracts are drawn up.
Click to expand...

Understand your point, but the point is, (if ANZ are correct) is that the 'owners' are no longer such - they signed away their ownership.

If anything is to learnt from this mess is it's best to not deal with these small players who offer the magic sauce of extra returns via 'special' situations. How do you think they paid for the piss ups they put on for the elite of the stock brokers etc.

BTW I have myself been ripped for over $20,000 many years ago. But, if these sophisticated investors didn't read the details then its hardly the fault of ANZ - if ANZ loaned money backed by these securities then they have every right to sell the stock. You must agree with this - right?
 
I thought this was a good read in that it talks about the different loaning arrangements.

http://news.smh.com.au/court-mulls-over-anz-beconwood-case/20080421-27hr.html

I think each side has a case to be heard, and that is why the decision keeps getting post-poned. I just wish Justice Ray would make his decision so people can get on with their lives.

I'm not anti-bank, but perhaps I just like to see the little guys win occasionally. That along with the fact I would be mighty pissed if someone took away my shares.
 
farout; said:
I thought this was a good read in that it talks about the different loaning arrangements.

http://news.smh.com.au/court-mulls-over-anz-beconwood-case/-27hr.html

I think each side has a case to be heard, and that is why the decision keeps getting post-poned. I just wish Justice Ray would make his decision so people can get on with their lives.

I'm not anti-bank, but perhaps I just like to see the little guys win occasionally. That along with the fact I would be mighty pissed if someone took away my shares.
Click to expand...

Farout - my sympathies are with you and the small guy (being one myself), however I fear that ANZ will have a good case.

And as for the wheels of justice turning slowly , not sure if you have followed the Sirtex SRX case, being sued by the University of WA. Action started in 2004 - court case started in March 2005 and complected in June 2005 and judgment result last week. Nearly a year for the judge to write the case up!!!
 
farout; said:
Can't say I've followed that case, however this is what was said by the Opes judge.

"Justice Finkelstein has said that he wants this to be done as a one-day hearing and they want to, as much as they possibly can, within the confines of the Federal Court, get a decision today."

http://www.abc.net.au/am/content/2008/s.htm
Click to expand...

If it really is a one dayer then ANZ have it in the bag - no contest. In fact ANZ will love this case as it will give then legitimacy for their actions.

Of course in the unlikely event... ANZ will appeal to the Supreme Court.

PS Siretx won and will now get their cost of >$4m back. 3 month update on 6th may - should be interesting.
 
The news reports state there should be a verdict before the end of this month. Wishing Opes clients the very best :)
 
farout; said:
The news reports state there should be a verdict before the end of this month. Wishing Opes clients the very best :)
Click to expand...

Sounds as if the judge was a tad simplistic when he said it was a one day deal. There will be mountains of paperwork to go over and my guess is that there were individual contracts issued which may take some considerable time to resolve.

Interesting to see the CEO's comments (ANZ), about being 'somehwat pissed off' about the reputational aspects of this deal, and accepting that they should never have been involved with a 'bunch of day trader Opes clients'.

Tell me Farout, do you think there are ANY users of this forum that had accounts with Opes. My money says very, very few if any. I bet more of them have investments with ANZ either directly or via managed funds.

Be brave and stand up anyone who every had an Opes account.
 
farout; said:
I think if there were opes clients in this forum, it would be very few. However, it's been said that the Opes fiasco has affected a quarter of all stocks traded in some way or another.

Interestingly, with the ANZ boss being pissed off they are now looking at a deed of company arrangement. Could mean no more 'years of litigation'.

http://business.smh.com.au/opes-deal-may-turn-out-to-be-a-good-deed-indeed/-285o.html
Click to expand...

I hope you are right.

The problem with this sort of situation is that if ANZ refuse to consider it then they are slaughtered in the press as being uncaring and stubborn. So they have to (for PR reasons if nothing else) have to consider all aspects - any good lawyer would advise their client to say this.

I really would not put too much value on public consumption 'speakees' from any public company. Cynical - for sure :)
 
farout said:
The news reports state there should be a verdict before the end of this month. Wishing Opes clients the very best :)
Click to expand...

I don't know how many former Opes clients are/were members of this forum, but I would think there are numerous ANZ shareholders, like myself, who are members.

While I sympathasize with their plight, I certainly do not subscribe to offering Opes clients best wishes and sincerely trust that ANZ will perform its' duty to its' shareholders to the fullest, by recovering maximum value, as allowed by the law.
 
Yes, I'm sure ANZ will do what they can, however new cracks in ANZ's case are emerging everyday! Say what you will, but ANZ aren't in that strong position as previously believed. Hence the reason they are now looking at doing deals.

Just today, it was uncovered that Opes changed the client contracts just weeks before it collapsed.

Like many others, I believe Opes was trying to hide the fact they were using margin lending instead of security lending.

Another read for those following this debacle;
http://www.theaustralian.news.com.au/story/0,25197,23594650-16941,00.html
 
This may be interesting to some, from the CQT announcement released on 24/04/08, where CQT director outlines his case against ANZ - http://www.asx.com.au/asxpdf/20080424/pdf/318rn90pq2jh2y.pdf


Without prejudice, Mr Terpu's view is that he retains an equitable interest in the shares. Facts which support that view include, inter alia :

● For the purposes of a Company General Meeting held on 19 March 2008 :
- ANZ Bank, through Opes Prime Stockbroking Ltd sought proxy voting instructions from Mr Terpu for the relevant parcels of shares which were referred to as "your holdings",
- Mr Terpu provided his voting directions on 10 March 2008, and
- a proxy form completed by ANZ Bank (via ANZ Custodian Services) with Mr Terpu's voting instructions was received by the Company on 14 March 2008.

● On 23 April 2008 the ANZ Bank lodged a Form 603 "Notice of Initial Substantial Holder" for a quantity of shares in Conquest which included the 15,209,000 shares the subject of the proceedings. The date the Bank became a substantial holder is noted as "Not Applicable". Failure by the ANZ Bank to make a disclosure with a date its interest was acquired casts doubt over the bank's claim of ownership.

● Had the Bank disclosed to the market in September 2007 that it purported to have acquired a substantial holding in the Company's issued shares by virtue of his shares being transferred into the ANZ Nominee account, Mr Terpu advises that he would have been alerted and would have acted immediately to close down the margin loan arrangement.
 
Yet another update..

---------------------------

ANZ broke law on Opes, Panel declares

Date 29/4/2008
Author Richard Gluyas
Source The Australian --- Page: 21

ANZ Banking has inadvertently contravened Australian corporations law in assuming stock parcels held by debtor Opes Prime. The collapsed stockbroker had acquired the scrip as collateral from its margin loan customers, and after the shares were transferred to ANZ, the latter suddenly found itself with controlling stakes in some listed companies or holdings above the 20% threshold that mandates an official takeover move. One entity, BioProspect, has appealed to the Takeovers Panel, which has ordered ANZ to divest its 26% stake and reduce it to under 5% by April 2009. The watchdog also found an exemption from the Corporations Act for ANZ by the Australian Securities & Investments Commission did not apply to the margin lending

-----------------------------

Not that shareholders in BioProspect would gain any great solace by this announcement. I'd be surprised if ANZ's mega-paid corporate lawyers didn't add this one to their burgeoning "to be vigourously defended at-all-costs-for-as-long-as-it-takes" list.

AJ
 
The biggest questions here are: why was ANZ a party to the misleading situation whereby clients were under the belief that they still 'owned' the stock? Why were they exempt from declaring substantial shareholder notices?Why didn't the Opes FSG have any reference to the fact that securities pledged may then become involved in AMSLA's? Why did ASIC allow this complete farce to occur? Why hasn't the court system supported the injunctions to allow the whole mess to be unravelled before damage was done to holdings, families, companies, the ASX market reputation etc.?

ASIC is the biggest problem in this situation. How can ASIC allow a situation to occur whereby a bank can take assets from somebody that owed nobody any money?

I'm not an Opes client and like to think I would have read the fine print had I ever considered becoming one, but I can completely understand why they feel ripped off, and I have plenty of sympathy for them.

If I were an ANZ shareholder my response would be to sell ANZ stock because any bank that can have a situation like this happen under management's noses is not managing their risk properly.
 
Well said cuttlefish... totally agree with what you said about the court injunctions! The judge is supposedly preparing his verdict at present.
 
cuttlefish said:
....Why did ASIC allow this complete farce to occur? ... ASIC is the biggest problem in this situation. How can ASIC allow a situation to occur whereby a bank can take assets from somebody that owed nobody any money?...
Click to expand...

Would I be correct in assuming there is no effective body providing accountability or oversight of ASIC's operations or performance?

If there is, can anyone tell me who ASIC kow-tows to? Who regulates the regulator?


AJ
 

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