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Opes prime debacle continues to trickle down the bad news


so " what is this opes prime fall out all about  "

THE collapse of Opes Prime will wreak havoc on the small to mid-cap sector over the next couple of weeks as its main creditors, ANZ Bank and Merrill Lynch, retrieve their money by liquidating a $1.5 billion portfolio of Australian shares filled with stocks, including ABC Learning Centres, Allco, Clive Peeters, Hedley Group and Just Group.


 The opes prime website  >

FALLOUT from the first collapse of an Australian stockbroker in a decade will hang over financial markets today, as the banks behind Opes Prime order the sale of more shares in an effort to recover $1 billion in loans to the failed business.

Federal Treasurer Wayne Swan says he does not think the market will be adversely affected by the collapse of stockbroking firm Opes Prime.

Mr Swan met this morning with the Australian Securities and Investments Commission (ASIC) after the firm's collapse.

The Melbourne-based company has gone into receivership and is being investigated by the commission.

Administrators were called in Thursday night after cash and stock movement irregularities. 

About Opes Prime

Opes Prime Group Ltd is an Australian unlisted public company providing a range of financial services and products for high net worth individuals, stockbrokers and financial advisors, asset managers, banks and other firms, both for themselves and their clients.

Group conducts business via a number of operating subsidiaries based in Melbourne, Sydney and Singapore.

Opes Prime Stockbroking Limited is a full Market Participant of the Australian Stock Exchange Ltd, and holds an Australian Financial Services Licence (#247408) which enables it to deal and advise in financial services and products to retail and wholesale clients. The company was first registered on 10 March 1999, and started business with its current shareholders in 2005.


Administrators were appointed to Opes Prime on Thursday night and, before the market opened on Friday, ANZ and Merrill Lynch had wasted no time dumping stocks at massive discounts.

The result: at least four companies were placed in a trading halt as a result of the collapse.

These include Admirality Resources, Hedley Leisure, manufacturer Austin Group and Reco Financial Services.

Not surprisingly, Reco went into a trading halt. The Australian reported three weeks ago that Opes Prime was using Reco for a backdoor listing on to the ASX, which would have valued the company at $100 million.

The Australian Securities and Investments Commission (ASIC) has formed a special team to investigate whether the activities of Opes Prime Group were in breach of the Corporations Act.

Late last week directors of the financial services firm appointed John Lindholm of Ferrier Hodgson as voluntary administrator.

The administrator was called in when Opes Prime Group directors became aware of a number of cash and stock movement irregularities in relation to a small number of accounts. 

As a result of shortfalls in the accounts the directors felt that trading operations should cease. 

The company's secured creditor ANZ has appointed Deloitte Corporate Reorganisation Group members Sal Algeri and Chris Campbell as receivers and managers of Opes Prime Group Ltd, Opes Prime Stockbroking Ltd, Leveraged Capital Pty Ltd and Hawkswood Investments Pty Ltd.

The receivers have taken steps in conjunction with the Australian Securities Exchange to suspend all on market trading activity of both Opes Prime Stockbroking and Leverage Capital. 

Opes Prime specialised in small to mid-cap stocks so most of the securities lending it did was in the less liquid end of the sector, where most damage can be caused when hedge funds short the stock. This will add to the volatility in the stock market and no doubt trigger more margin calls on these types of stocks.

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