Stockbroker collapse traps $200 million from thousands of investors

Discussion in 'Sharemarket Investing Platforms, Tools & Services' started by trinity168, 12th Jan, 2019.

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  1. trinity168

    trinity168 Well-Known Member

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    trinity168, 12th Jan, 2019
    #1
  2. Noobieboy

    Noobieboy Well-Known Member

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    The issue has been brewing since 2013 it seems.
     
    Noobieboy, 12th Jan, 2019
    #2
  3. trinity168

    trinity168 Well-Known Member

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    I don't use their platform but out of curiosity and trying to understand this ...

    From the article:
    "All client money invested in Halifax's investment platforms has been frozen as Ferrier Hodgson pores over the stockbroker's business affairs."

    Q#1: Does that mean - the clients are unable to withdraw their own money, whether sitting in a transit account, or when they sell their position?
    Can clients use a different broker to sell their stock?


    "So far, Ferrier Hodgson believes it has located shares, derivatives and other products representing $190 million of client funds.
    But more than $210 million was invested by thousands of Australians meaning the administrator expects customers funds may have been left short by between $15 million and $20 million."

    Q#2: Where is the shortfall of $15-$20 million? Or that is what the administrators are trying to find?

    "One of Halifax's assets located by the administrators is a 2008 Maserati Granturismo with balding tyres."

    Q#3: WTF?

    Thank you.
     
    trinity168, 12th Jan, 2019
    #3
  4. Cityman

    Cityman Well-Known Member

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    This obviously isnt a 'stockbroker' in the traditional sense.

    "Both the MT4 and MT5 platforms had "A" books for large bets and "B" books for smaller ones. Halifax only hedged the larger bets, Ferrier Hodgson partner Stewart McCallum told the recent meeting of creditors in Sydney."

    Equity derivatives, CFD's etc - obviously these trading platforms were purchasing positions in the market, but not the shares directly themselves - ie Chess sponsored etc.

    There is absolutely no need to 'hedge' books if the stock is purchased on the buyers behalf on the market.

    I just hope the 'investors' were aware of what they were doing, thats all.
     
    Cityman, 12th Jan, 2019
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  5. Mike A

    Mike A Well-Known Member

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    Once you deposit funds into another entities account it is now a loan. It is generally an unsecured loan.

    Similar to a bank. The funds are actually not yours. Its an asset of the banks and a debt to you. And hopefully that debt can be repaid.

    Many have realised later on they cant.
     
    Mike A, 12th Jan, 2019
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  6. datto

    datto Well-Known Member

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    Banks have a govt guarantee of 250K. So there is some reassurance there I suppose.

    The mattress bank may make you sleep easier. Just don't smoke in bed lol.
     
    datto, 12th Jan, 2019
    #6
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  7. balwoges

    balwoges Well-Known Member

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    The above ^ is the reason I would never let anyone else handle my money even if I make the occasional mistake ... :eek:
     
    balwoges, 15th Jan, 2019
    #7