By PAUL PANCKHURST
Thousands of sharemarket investors are waiting anxiously to be reunited with $43 million frozen by the liquidators of Auckland sharebroking firm Access Brokerage.
About 700 investors were originally believed to be involved, but it emerged yesterday that thousands more have been caught up in the broker's collapse.
A key
legal issue is whether investors with money in an on-call account with Access should bear some of the losses from a $5 million shortfall in the firm's settlement account.
The latter account was used for settling share trades.
A source familiar with the case said the main question was: if these were both trust accounts - and they seemed to be - then should the money be treated as a single pool?
Liquidator Michael Stiassny said last night: "It's frozen. We understand it's stressful for people. We're dealing with it."
But he reassured investors with the $43 million in the on-call account - numbered on Bank of New Zealand deposit cards as 0067340-84 - that the shortfall was connected with settlements.
That will be a big relief for investors who, unable to access their on-call accounts, were fearing the worst.
Access, owned by former Olympic and Commonwealth Games Association boss Bill Garlick, went into liquidation on Monday, with the Serious Fraud Office asked to investigate.
The BNZ confirmed that thousands of investors had money in the on-call account, versus the 700-plus caught up in the settlement shortfall.
The stock exchange has said it may reach into its own pocket for investors.
Mr Stiassny could not say how long the funds would remain frozen.
"If we can find a resolution from a legal perspective, I expect funds would flow almost immediately."
A retired investor said he was waiting to hear if his $303,000 was safe, after he discovered on Monday that his on-call account with Access was frozen.
He did not want to be named.
"If at my stage of life you lose this amount of money, you never make it back," he said. "You can't go out and get a job."
He was shocked to learn the company had collapsed and described their accounting service in the past as "impeccable".
He expected that his money was with the BNZ as all correspondence in relation to the account came from the bank, but phone calls to BNZ staff had resulted in conflicting information about whether he would get his money back.
One woman had assured him that clients who had not traded last week were fully protected by the BNZ but he had since been told by someone else that the money would not be returned if it had been taken from the client trust fund account.
"One doesn't know how much money, if any, has gone from this trust account."
The investor said that after the sharemarket crash in 1987 and the subsequent Government bail-out of the BNZ, checks and balances were supposedly put in place to create a more robust financial system.
"What this indicates is the financial system has got as many holes in it as it ever had. I was shocked and surprised that we don't seem to have learned any lessons from the 1987-92 period."
After the Access collapse was reported in Monday's Herald, many concerned investors emailed the paper asking for more information.
Some were overseas and eager to know if their money was safe. Others questioned who they could trust.
"I'm a small-time sharemarket investor," said one. "I trade over the internet using BNZ's online trading facility; this in turn uses Access. How am I, a financial neophyte, supposed to pick a sound broker if an institution like the BNZ can't?"
Another investor wrote in support of Access, saying it had served private investors well by helping to keep commission rates down.
With the company's closure, investors could expect to see commission rates and fees start to rise.
By PAUL PANCKHURST
Thousands of sharemarket investors are waiting anxiously to be reunited with $43 million frozen by the liquidators of Auckland sharebroking firm Access Brokerage.
About 700 investors were originally believed to be involved, but it emerged yesterday that thousands more have been caught up in the broker's collapse.
A key
AdvertisementAdvertise with NZME.