Close To $20 Million Misappropriated By Aussie FX Broker

March 14, 2019 by Petar Markoski

Halifax Investment ServicesAustralian and New Zealand investors were left shaken up this week after it emerged that a popular online investment broker had misused their money to cover up losses.

Halifax Investment Services has a large client base spread across the two countries and reportedly handles more than $211 million in total investments.

The investment firm has a client base of over 12,000 investors and handled large sums of money on their behalf which was invested in different enterprises.

Recent investigations into the brokerage firm show that they misappropriated close to A$20 million in order to cover its many losses.

An investigation into the matter was launched late 2018 and the results show that the firm deliberately used client money in order to cover its operating losses. There were multiple irregularities found with the accounting and a total of 9 percent of investors’ money had been used to make up for the losses.

The firm is working together with the Australian Securities and Investments Commission (ASIC) to sort things out and help investors recover the money they lost.

Halifax To Be Placed In Liquidation

Ferrier Hodgson has been the man spearheading the investigation. More than 10,000 transactions have been examined and it is clear that the firm has borrowed and mixed monies to balance different investments. The firm had three trading platforms known as Interactive Brokers (IB) investors, Meta Trader (MT) which was split into MT4 and MT5.

The money from investors were spread across a number of products including equity derivatives, indexed contracts and equities foreign exchange derivatives.

In a statement, Ferrier Hodgson said

Our investigations indicate that while the IB platform may appear to be ‘whole‘ in that it is fully funded, we have determined that investor funds may have been mixed or co-mingled in a way that affects the claims of all investors on all three platforms in both the Australian and New Zealand businesses

Hodgson tried initially to see if Halifax could go through a deed of company arrangement (DOCA) where investors would have agreed to take a proportional deficiency in order to expedite their payment process. However, that did not work out and Halifax will now be placed in liquidation in order for investors to be able to recover their cash.

The entire process could take another 12 months and it is not certain at this point in time if investors will be able to recover all of their money.