Opes Prime: bear’s latest share market victim 10:17am 31.03.08

From a billion dollar company to nothing in less than a week, Melbourne stockbroking firm Opes Prime is the latest failure in the current stockmarket downturn. The collapse of the company sees its clients, including ANZ Bank, owed $650 million, and Merrill Lynch, owed $400 million, scrambling for whatever they can get.

Opes reportedly used margin loans, a form of credit, to buy shares, which works well when times are good but is a risky practice in a bear economy, such as in the current volatile market. It is believed that some superannuation funds had lent stock to Opes, leaving their members exposed to the consequences of the collapse.
 
ASIC prevented Opes’ chief executive Laurie Emini from leaving the country by obtaining his passport late last week.