the Opes fiasco has shown that some investors are really dumb.
why would you transfer your shares into a facility where you could lose your capital because of counter party risk? It suggests to me that the people who where using Opes didnt really know the risks involved in giving their stock to Opes.
i feel sorry for the investors that had no debt against their stock and are going to get nothing back once ANZ and Merrills get their cash back. As an ANZ shareholder i would hope they sell the stocks down to get their cash back because you can bet your bottom dollar on a bank like ANZ having a team of lawyers writing up the contracts that Opes signed. the fact the administrators have control tells you that their is very little chance of a class action stopping the selling.
at the end of the day ANZ and Merrill will sell what they need to and get their cash and then whats left over will go to other creditors and then to the actual owners of the shares.
this is going to take a long time to work through, for those that think ANZ and Merrills are not able to sell the stock, think again because they have every right to.
the big question is, if all accounts are frozen, how are they going to get the shares back that were lent out? how are they going to inforce their return? if i had borrowed shares i wouldnt be giving anything back.
if i was a shorter would i have to provide some sort of security before i was lent the stocks? if so it might be the case that the administrators are making a profit on those positions so they might want to enter the market to close them out and keep the security and commence proceedings individually against the shorters to recover cash. this might actually be positive for some stocks.
at the end of the day you can bet that the administrators are going to go after those investors that didnt meet the margin calls that casued these problems and if there was any missing money or shares then those guys are gona get caught as well. the big problem is that its gona take time for them to sort it all out, dont tell me the guys that caused this mess havent already started to hide assets etc.
look at westpoint, we are 2 yrs down the track and the only people making any money are the Lawyers and administrators.
the only chance i think anyone has is if they approach it from the point of view that they didnt know all the risks they were getting into. ie they were not fully informed of the specific risks they were up for. if its below $100k i think you can call FICS, anything above $100k and you will need a lawyer.
even if the FSG sets out all of the risks, it could be argued that it wasnt appropriate for an individual invetsor given their circumstances, so you might have some recourse against the individual brokers as well.
this is going to be a very interesting case for ASIC as it will shake up the way advice is provided to stock broking clients from now on.
for anyone out there that still has an account like Tricom or Opes, get your loans refinanced somewhere else and get your shares out of these structures. You are being exposed to risk that is not yours.
