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$20 million missing: Broker's client money used to cover losses

One of Australia's largest brokers, Halifax Investment Management, is set to head into liquidation after administrators discovered that some of the $210 million of client money was used to cover off losses on bad bets on investment products by other clients.


Investigations by administrators from Ferrier Hodgson have found that just under $20 million of customers' money is missing.


Ferrier Hodgson has likened the collapse of Halifax, which had 12,000 clients in Australia and New Zealand, to other high-profile stockbroker collapses in recent years including BBY, Sonray and Opes Prime.


Action against the company by the corporate regulator is a distinct possibility, with sources saying the Australian Securities and Investments Commission was taking a close interest in the outcome of the administration.


More than $190 million of client money remains frozen as the administrators seek court approval for distributing the money back to clients.


Given the "co-mingling" of client funds, this could see all customers of Halifax receiving less money than they had placed into their trading accounts, despite not being responsible for how their money was used by the company.


The missing money is equivalent to 9 per cent of the total customer funds held by Halifax ahead of its collapse. Halifax called in administrators just before Christmas, freezing customer funds.


Halifax's clients can still close out trades (i.e. sell shares in a particular entity, or close off a bet on the oil price falling, etc) but they are not able to recoup their funds.


read more - https://www.theage.com.au/business/banking-...313-p513tp.html

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Agree. Not sure why people still use a broker - might benefit sophisticated high net worth investors who get special treatment in IPO allocations


I prefer to be in control of my money :biggrin: although confess I did use a broker briefly when I first started to invest - learnt quickly he was not better than I in picking stocks and charged like a wounded bull.

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Millions withheld from Australian online traders as broker has licence stripped and accounts frozen

A muscle-flaunting Melburnian who boasts about his sports car collection and playing poker with underworld figure Mick Gatto is at the centre of a company holding millions of dollars in clients' money that can not be accessed.


Key points:

Australians are trading millions in the risky world of forex trading

The accounts of forex trading broker Berndale Capital Securities and their former director Stavro D'Amore have been frozen by authorities

Berndale clients are chasing hundreds of thousands from the company and Mr D'Amore, who are appealing against ASIC's decision

Stavro D'Amore is the former director and chief executive of Melbourne-based Berndale Capital Securities, a company whose activities have caused such alarm that ASIC has intervened to freeze their accounts.


Prior to having its licence stripped late last year, Berndale operated as a broker operating in the opaque world of online foreign exchange âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€šÃ‚ or forex âââہ¡Ãƒâ€šÃ‚¬ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€šÃ‚ trading

read more - https://www.abc.net.au/news/2019-03-20/mill...ection=business

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AFP raids broker's offices as retiree loses $270k in superannuation

Key points:

Australians are trading millions in the risky world of forex trading

A retiree in his 70s lost hundreds of thousands of dollars of superannuation through investments

Another client complained to authorities, but his case has dragged on for more than seven months

read more - https://www.abc.net.au/news/2019-03-21/reti...ection=business


]Forex trading is a highly complex and risky form of investment, which experts say is actually more akin to gambling[/u].


Terribly sad but I cannot understand people investing in something they have no experience in


$120,000 lost in one night

Fransisco Marques said he was cold-called by a ForexCT representative in April last year. Although he has no experience in forex trading, he was convinced to invest $500 with the offer that ForexCT would match it.


Within weeks, the 73-year-old former rigger, who lives in Melbourne's northern suburbs, was locked in a spiral that ultimately led to him investing $270,000 of his superannuation with the broker.

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  • 11 months later...

If you go back to the initial stages of the GFC, there some complications with accounts.

There was a limit to the amount of withdrawals for some funds, some balk accounts, and limits on how much the govt would guarantee bank deposits with the big four (thinkl from memory it was up to 1 mill).

It would be prudent to look at putting money into multiple accounts to with multiple institutions to spread the risk.


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