you might be onto something there Jason re Chris Murphy, after...

you might be onto something there Jason re Chris Murphy, after all he lost a heap of money in the Opes Prime collapse, maybe he has the incentive to take ASIC on for failing to meet THEIR obligations in protecting all shareholders in ALL public companies !

Murphy: I tried to halt share lending Mark Hawthorne
April 15, 2008.

THE high-profile Sydney lawyer Chris Murphy, one of the men caught in the fallout of the Opes Prime collapse, says he warned more than 60financial institutions about the shorting of Challenger Financial Services shares in February.

Mr Murphy became a substantial holder in the James Packer-controlled Challenger on July 30 - a holding he bought with a 95 per cent margin loan facility with Opes Prime.

Mr Murphy's massive exposure to Challenger, and the subsequent collapse of its share price, sent his share portfolio into the red and contributed to the fall of stockbroker Opes Prime.

Advertisement: Story continues below Mr Murphy says that once his Opes Prime accounts were in the red, he no longer traded any shares.

"The company [Opes Prime] stepped in when I got to nil equity and made corporate decisions, and for its own reasons did not margin-call me and close out the account.

"The company decided to back the position. I owned not one cent of it. They made it theirs and they dealt with it by backing it with apparently unencumbered stock in a single company that they owned or borrowed, presumably with the consent of its owners. Eventually, instead of selling it back to me, they flogged it to the ANZ.

"I still have no accounting for it all."

Mr Murphy believes the very shares he bought in Challenger through his Opes Prime account were lent to hedge funds, via ANZ Bank and Merrill Lynch, and were then used to short the stock, sending its price into a downward spiral.

He told the Herald he wrote an email on February 7 with the subject: "Shareholder action right now".

"I sent that email to over 60 people in the financial world, including Opes itself," Mr Murphy said.

In the email Mr Murphy writes: "I have spoken to the holders of over 8 million Challenger Financial Services shares and I have asked them to contact their brokers and to demand that their holdings not be lent out for short-selling purposes.

"At this stage clients have contacted ABN Amro, Citi, Merrills, Comsec and Credit Suisse to inform them their shares are not to be lent out.

"Why? Over 200 million shares have been borrowed and churned in [Challenger] through share lending to hedge funds attempting to force the share price down.

"At present, if there is no share lending to shorters, there will be a need for the shorters to buy back 15 million shares in [Challenger] in very quick time and that will blast the stock price skyward.

"This is no joke. This seriously strong company has been attacked and it has reduced the value of shareholders stock by borrowing it from stockholders and selling it down and, in some cases, forcing margin calls on some of the original stockholders.

"Make that call to your broker and demand that if your [Challenger] stock has been lent out, it has to come back immediately!"

On July 13 last year Mr Murphy's private company, Cardiac Jolt, owned more than 9.96 million Challenger shares, worth in excess of $57.2 million at market value, with a margin loan of $54.4 million.

Sarah Brown, the company he owned with the Opes Prime chief executive, Laurie Emini, held 7.9 million Challenger shares, worth $45.4 million. They had a margin loan of $43.1 million on those shares.

He says his private Opes account held more 10.66 million shares.