Trader Dealer gone Bankrupt
- Thread starter mr_fred
- Start date
- Joined
- 28 May 2004
- Posts
- 10,858
- Reactions
- 5,258
Can you please post a link to this news. I am unable to find any confirmation of it.
Sydney - Friday - March 28: (RWE Aust Business News) - The
Australian Securities and Investments Commission (ASIC) this morning
commenced an investigation into Opes Prime Stockbroking Ltd.
A receiver and an administrator were appointed to Opes Prime
yesterday evening and it has been suspended as a trading, settlement and
clearing participant of the Australian Securities Exchange (ASX:ASX).
ASIC has formed a special team to investigate any potential
breaches of the Corporations Act.
The ASIC investigation team will also work closely with ASX and
the receivers.
The Deloitte Corporate Reorganisation Group were appointed
receivers of Opes Prime and Ferrier Hodgson appointed as administrators
on Thursday 27th March 2008.
thats their parent company, I got confirmation as a client.
Australian Securities and Investments Commission (ASIC) this morning
commenced an investigation into Opes Prime Stockbroking Ltd.
A receiver and an administrator were appointed to Opes Prime
yesterday evening and it has been suspended as a trading, settlement and
clearing participant of the Australian Securities Exchange (ASX:ASX).
ASIC has formed a special team to investigate any potential
breaches of the Corporations Act.
The ASIC investigation team will also work closely with ASX and
the receivers.
The Deloitte Corporate Reorganisation Group were appointed
receivers of Opes Prime and Ferrier Hodgson appointed as administrators
on Thursday 27th March 2008.
thats their parent company, I got confirmation as a client.
- Joined
- 31 May 2006
- Posts
- 1,941
- Reactions
- 2
mr_fred thanks for the info. As a client what sort of impact has/will it have on you? Do you have an existing margin facility with them, and if so is it still in place? Do you have chess registered holdings with them?
I'm just curious how the demise of these things impacts the clients of them. (I know its early days so will probably continue trading until the receiver decides what to do but would be interested in hearing how the unfolding of it impacts clients).
I'm just curious how the demise of these things impacts the clients of them. (I know its early days so will probably continue trading until the receiver decides what to do but would be interested in hearing how the unfolding of it impacts clients).
the receivers have put a hold on everything, no trading or sellin!!! thank goodness I didn't have margin lending with them so I am not sure how that side is effected.
My understanding from talking to a dealer, is that I can transfer my chessing holdings to another broker, they arent sure how long that will take, as everything is in shambles.
My understanding from talking to a dealer, is that I can transfer my chessing holdings to another broker, they arent sure how long that will take, as everything is in shambles.
Re: Opes gone bankrupt
messy business..
http://www.businessspectator.com.au/bs.nsf/Article/Billion-dollar-bust-D64HQ?OpenDocument
This would be the most worrying thing for margined clients, may not be so easy to simply transfer to another broker... they do not own the stock.. the article implies Opes does.. or in fact ANZ/MER now do.
Opes has at least one thing in common with Tricom – investors who use the firm to buy shares on margin have assigned beneficial ownership of their entire holdings to the broker – including their original collateral (whether they know it or not, and often they don’t).
Opes’ business model is, or rather was, that it lends as a finance broker on commission on behalf of ANZ and Merrill Lynch and takes full ownership of the scrip provided as collateral. It then lends that stock for a fee to short sellers, along with stock provided by institutional investors – for another fee.
Now that Opes is in receivership, its secured lender, ANZ, now effectively owns all of the shares that had been put up as collateral. Some of it is already being sold, the rest has to be recovered from those who borrowed it.
messy business..
http://www.businessspectator.com.au/bs.nsf/Article/Billion-dollar-bust-D64HQ?OpenDocument
This would be the most worrying thing for margined clients, may not be so easy to simply transfer to another broker... they do not own the stock.. the article implies Opes does.. or in fact ANZ/MER now do.
Opes has at least one thing in common with Tricom – investors who use the firm to buy shares on margin have assigned beneficial ownership of their entire holdings to the broker – including their original collateral (whether they know it or not, and often they don’t).
Opes’ business model is, or rather was, that it lends as a finance broker on commission on behalf of ANZ and Merrill Lynch and takes full ownership of the scrip provided as collateral. It then lends that stock for a fee to short sellers, along with stock provided by institutional investors – for another fee.
Now that Opes is in receivership, its secured lender, ANZ, now effectively owns all of the shares that had been put up as collateral. Some of it is already being sold, the rest has to be recovered from those who borrowed it.
- Joined
- 31 May 2006
- Posts
- 1,941
- Reactions
- 2
Thats quite scary - I would certainly hope that unencumbered chess registered holdings with a broker could be transferred away regardless of the status of the broking entity - otherwise it would raise serious questions about title when buying/selling stock. But a scary thought for margin traders and quite an odd situation.
Counterparty risk - to be avoided at the moment.
Counterparty risk - to be avoided at the moment.
- Joined
- 14 April 2007
- Posts
- 104
- Reactions
- 0
My question is - how can a broker that claims say they are fine a month or so ago, now be decimated? Take a look Trader Dealer's web site TODAY - and they are still highlighting links to articles about Opes Primes ongoing growth etc. Absurd!
- Joined
- 16 June 2005
- Posts
- 4,281
- Reactions
- 6
Wow, what a shock! Fortunately I have not traded with them for a few weeks now due to switching to US options. Such a shame for Trader Dealer and their staff - I found their service fantastic when trading with them.
- Joined
- 19 November 2007
- Posts
- 551
- Reactions
- 0
Quite scary?????
It's an absolute nightmare! It means people's whole accounts and portfolio is lost, because their broker went bankrupt. Some parcels of their shares are being liquidated at half market prices! Anyone using these sorts of brokerages are crazy. (or sadly, if they have never seen, or heard or considered the risk, then they are just incredibly mis-informed and I feel very sorry for them.)
Just another bunch of sheep being fleeced, defrauded, and sucked dry, by criminal bankster types.
Why do white-collar criminals get of scott-free usually, compared to blue-collar ones, and yet their theiving normally has a few more zeroes on it. Because they steal politely, and apologise profusely for any inconvenience?
- Joined
- 5 February 2006
- Posts
- 121
- Reactions
- 0
Hi gfresh,
This quote from your posted article:
"And the second reason this collapse will be spectacular and messy is that about 1200 retail clients of Opes are about to be traumatised by the sudden and utterly unexpected loss of their wealth – up to $1 billion."
OK, as we don't have an account with "Opes" we may feel safe from the inevitable storm to unfold.
Think again.
Remember the Eddy Groves saga?
Director of a company, has a large percentage of shares in his own company.
Takes out a Margin Loan. Price goes down. Eddy and every ABC learning holder shares the pain.
With Opes, it is the bigger Retail Investor. Who are they?
I would suggest Directors of companies as being some of the clients of OPES.
If that turns out to be the case, a fair few companies would have had higher than expected volume yesterday as the OPES Clients shares were sold of at 40% of their true value.
I know of a couple of companies where some large chunks were sold onto the market through Opes.
The point is: What is ASIC doing about this?
How much risk is there when a Director of a company holds a significant stake and decides to leverage that risk. It might be his shares. However, he also has a responsibility of Duty of Care to the shareholders.
IMO, it should never be allowed.
This is only the tip of the iceberg.
Anyone checked their Super lately?
Did you know that Hedgefunds invest your shares with Superfunds for a fee so that they can shortsell on the market.
Nice isn't it.
They use your shares to speculate within that particular company and then sellout which drives the shareprice down. Then they give back the Superfund's shares and say thank you very much and goes onto the next one.
You don't think this is happening?
Think again!
I had 2 Superfunds.
One being my SMSF.
The other being a Retail Superfund.
Had planned on rolling over the Retail one to my SMSF.
Shock - Horror. The Retail one is equal to where i was at in early 2006.
Transferred it immediately.
Wait till a CFD house falls, then we will see some real sparks fly.
You don't think it can't happen?
I would suggest you have a closer look into the Derivatives Market.
Even the US does not allow CFD's.
Why is that you may ask?
ASIC needs to clean up the Hedgefunds before something really major happens IMO.
Cheers markcoinoz
This quote from your posted article:
"And the second reason this collapse will be spectacular and messy is that about 1200 retail clients of Opes are about to be traumatised by the sudden and utterly unexpected loss of their wealth – up to $1 billion."
OK, as we don't have an account with "Opes" we may feel safe from the inevitable storm to unfold.
Think again.
Remember the Eddy Groves saga?
Director of a company, has a large percentage of shares in his own company.
Takes out a Margin Loan. Price goes down. Eddy and every ABC learning holder shares the pain.
With Opes, it is the bigger Retail Investor. Who are they?
I would suggest Directors of companies as being some of the clients of OPES.
If that turns out to be the case, a fair few companies would have had higher than expected volume yesterday as the OPES Clients shares were sold of at 40% of their true value.
I know of a couple of companies where some large chunks were sold onto the market through Opes.
The point is: What is ASIC doing about this?
How much risk is there when a Director of a company holds a significant stake and decides to leverage that risk. It might be his shares. However, he also has a responsibility of Duty of Care to the shareholders.
IMO, it should never be allowed.
This is only the tip of the iceberg.
Anyone checked their Super lately?
Did you know that Hedgefunds invest your shares with Superfunds for a fee so that they can shortsell on the market.
Nice isn't it.
They use your shares to speculate within that particular company and then sellout which drives the shareprice down. Then they give back the Superfund's shares and say thank you very much and goes onto the next one.
You don't think this is happening?
Think again!
I had 2 Superfunds.
One being my SMSF.
The other being a Retail Superfund.
Had planned on rolling over the Retail one to my SMSF.
Shock - Horror. The Retail one is equal to where i was at in early 2006.
Transferred it immediately.
Wait till a CFD house falls, then we will see some real sparks fly.
You don't think it can't happen?
I would suggest you have a closer look into the Derivatives Market.
Even the US does not allow CFD's.
Why is that you may ask?
ASIC needs to clean up the Hedgefunds before something really major happens IMO.
Cheers markcoinoz
As far as we are concerned the last paragraph sais it all.
http://business.smh.com.au/now-for-the-opes-washup/20080328-223z.html
With ANZ and Merrill Lynch expecting to take only a small haircut, that suggests there will be not a whole lot left to the stock lenders. When it comes to insolvency, receivers come first, staff come second, secured creditors (usually banks) rank third and ... you know the rest.
http://business.smh.com.au/now-for-the-opes-washup/20080328-223z.html
With ANZ and Merrill Lynch expecting to take only a small haircut, that suggests there will be not a whole lot left to the stock lenders. When it comes to insolvency, receivers come first, staff come second, secured creditors (usually banks) rank third and ... you know the rest.
- Joined
- 16 June 2005
- Posts
- 4,281
- Reactions
- 6
In that same article Alan Kohler gives an example of the plight of Opes Prime's margin loan clients:
http://www.businessspectator.com.au/bs.nsf/Article/Billion-dollar-bust-D64HQ?OpenDocument
These risks must have been buried somewhere in small print somewhere. Surely a major risk such as this should have been clearly pointed out to potential borrowers. But, not ever having used their margin lending, I don't know how it was handled.
http://www.businessspectator.com.au/bs.nsf/Article/Billion-dollar-bust-D64HQ?OpenDocument
These risks must have been buried somewhere in small print somewhere. Surely a major risk such as this should have been clearly pointed out to potential borrowers. But, not ever having used their margin lending, I don't know how it was handled.
- Joined
- 31 May 2006
- Posts
- 1,941
- Reactions
- 2
What if they purchased through opes but DIDN'T have a margin loan? Surely their stock isn't owned by opes in that case?
This sounds shocking and completely criminal if it is as described in the previous posts.
This sounds shocking and completely criminal if it is as described in the previous posts.
- Joined
- 31 May 2006
- Posts
- 1,941
- Reactions
- 2
Just had a quick look through their financial services guide posted on the web site. In it there is a section titled "Credit Risk".
It states:
In the event of insolvency by Opes Prime then you will rank as an unsecured creditor in respect of any excess value of collateral you have lodged with Opes Prime over and above the value of any securities you have borrowed from Opes Prime or the excess of the value of securities you have loaned to Opes Prime and the cash that has been delivered to you as collateral.
It states:
In the event of insolvency by Opes Prime then you will rank as an unsecured creditor in respect of any excess value of collateral you have lodged with Opes Prime over and above the value of any securities you have borrowed from Opes Prime or the excess of the value of securities you have loaned to Opes Prime and the cash that has been delivered to you as collateral.
- Joined
- 19 November 2007
- Posts
- 551
- Reactions
- 0
Totally criminal, but don't expect anything to be done. Fancy lawyers, mates in high places, etc.
- Joined
- 13 June 2007
- Posts
- 1,203
- Reactions
- 2
The banks are taking their bat & ball & going home,notwithstanding its their horrendous lending to ninja's that have this house of cards falling over.Banks....dead set robbers..tb
I was having a think about all of this.
1. If you had signed the margin loan papers (contract) but not actually used the facility, you would probably also be caught up.
2. Chess registered with them - legal title should not have passed to the broker one would assume. If it has, then we are all in trouble!
1. If you had signed the margin loan papers (contract) but not actually used the facility, you would probably also be caught up.
2. Chess registered with them - legal title should not have passed to the broker one would assume. If it has, then we are all in trouble!
- Joined
- 19 November 2007
- Posts
- 551
- Reactions
- 0
I ordered paper certificates for all my overseas shares a few months ago, except for trading ones, the ASX doesn't do paper certificates anymore, but the idea is to remove as many intermediaries between your assets and you as possible. This is only the beginning unfortunately.
Similar threads
