In 2003, Opes Prime Stockbroking was founded in a growing margin lending market, where investors borrow money to invest in forms of shares or managed funds, with the security of their existing cash, shares or managed funds. The amount that they are able to borrow depends on their securities on their portfolio, and the Loan to Value Ratio (LVR) and the credit limit depend on the investors’ financial position.
Opes Prime Stockbroking lent with a high LVR up to 95%, meaning that a client could borrow up to 95% of the value of the speculative shares he owned. As more speculative shares were invested by clients, and this also added the credit risk to the company. It did not follow the margin lending rule, instead, it managed agreements with external …show more content…
There were two major actions taken by the ASIC, one was an allege to Opes Prime’s contravention of Corporate Act, and the other one was to investigate about the directors’ intentionally dishonesty and the breach of their duties and power as directors that fail to be in the best interests of Opes Prime Group and Opes Prime Stockbroking.
Later on 4 April, under the order of the court, the ASIC prevented the three directors of Opes Prime from leaving Australia by having Laurie Emini’s passport surrendered, while the passports of the other two directors, Anthony Blumberg and Julian Smith were handed over to their legal adviser.
ASIC provided the evidence of Opes Prime’s irregularities to the court. The investors would not know that under the security lending agreement they had signed, the Opes Prime had the ultimate power of doing “whatever we want”, said by Laurie Emini. Laurie Emini attempted to cover up a shortfall of $115 million by double-counting the money in the account of Sydney lawyer, Chris Murphy’s account, before the collapse of the Opes Prime, and he also instructed the staff to transfer the benefit of cash or share from another client’s account to Mr Murphy’s account. In addition, Laurie Emini used the shares of the mining identity Norm Seckold to cover positions elsewhere, and he also committed that he had a relationship with
Opes Prime Stockbroking lent with a high LVR up to 95%, meaning that a client could borrow up to 95% of the value of the speculative shares he owned. As more speculative shares were invested by clients, and this also added the credit risk to the company. It did not follow the margin lending rule, instead, it managed agreements with external …show more content…
There were two major actions taken by the ASIC, one was an allege to Opes Prime’s contravention of Corporate Act, and the other one was to investigate about the directors’ intentionally dishonesty and the breach of their duties and power as directors that fail to be in the best interests of Opes Prime Group and Opes Prime Stockbroking.
Later on 4 April, under the order of the court, the ASIC prevented the three directors of Opes Prime from leaving Australia by having Laurie Emini’s passport surrendered, while the passports of the other two directors, Anthony Blumberg and Julian Smith were handed over to their legal adviser.
ASIC provided the evidence of Opes Prime’s irregularities to the court. The investors would not know that under the security lending agreement they had signed, the Opes Prime had the ultimate power of doing “whatever we want”, said by Laurie Emini. Laurie Emini attempted to cover up a shortfall of $115 million by double-counting the money in the account of Sydney lawyer, Chris Murphy’s account, before the collapse of the Opes Prime, and he also instructed the staff to transfer the benefit of cash or share from another client’s account to Mr Murphy’s account. In addition, Laurie Emini used the shares of the mining identity Norm Seckold to cover positions elsewhere, and he also committed that he had a relationship with