The last sentence of that looks rather odd. Nothing left over for the stock lenders ?
This is how I would see it.
Suppose the clients (in aggregate) start with 300M worth of stock. They move it into a margin loan account at Opes. Opes borrows 700M from ANZ, lends it at a higher rate to the clients, and the clients buy 700M worth of shares.
So now the clients got margin loan accounts with 1000M of shares, 700M of debt and 300M of "net worth". 70 percent gearing ( they are not lending more than that, are they ) . ANZ has security over the 1000M of shares for a 700M debt.
Opes lends a lot of the 1000M of shares to short-sellers, but the short-sellers sooner or later have to return it.
Now to unwind this. ANZ seizes the 1000M of shares, sells them, gets its 700M back, and the receiver of Opes should have the 300M thats left over. Unless there is some other severe funnybusiness, the broking clients should get most of that money back, being the 300M worth of cash or shares they started with.
Now Giles Parkinson is suggesting that there is NOTHING AT ALL left over for the "stock lenders" ( by which I assume he means the margin-borrowing-broking-clients of Opes ).
For this to happen: (a) there would have to be some other undisclosed creditor or (b) Opes has accumulated operating losses of 300M or (c) ANZ did not successfully sell the shares for 1000M or (d) ANZ did not successfully seize the shares because the stock borrowers did not return them or (e) the receiver will charge 300M for his services.
For the investors to get nothing back, there would have to be some serious fraud involved. The weak market would not be enough to cause a total loss.
