Gold Coast Business: Investors poured $211m into failed stockbroking firm Halifax

INVESTORS have ploughed million into trading accounts of failed stockbroking firm Halifax Investment Services — every cent of which will remain frozen indefinitely while investigations continue.

INVESTORS have ploughed $211 million into trading accounts of failed stockbroking firm Halifax Investment Services — every cent of which will remain frozen indefinitely while investigations continue.

Administrators at a four-hour creditor meeting said while $211 million had been invested with Halifax, the company only held cash and securities of $190-$200 million, leaving a shortfall of up to $20 million.

Jeff Worboys from Halifax Investment Services

They have so far been unable to account for the missing millions and say the deficit could swell as more information is uncovered.

Creditors heard Halifax’s sole director, Gold Coast man Jeff Worboys, had surrendered his passport to the administrators Ferrier Hodgson, who were in “daily contact” with corporate regulator ASIC and its New Zealand counterpart.

Mr Worboys said he’d surrendered the passport as a gesture of good will and could get it back at any time.

Ferrier Hodgson partner Stewart McCallum warned investors the process of finding and returning their money would be “a long haul”.

Pat & Jeff Worboys. Picture: Regina King

As many as 12,500 trading accounts belonging to up to 10,000 active clients in three countries have been frozen in the collapse of the firm, which has since closed its offices in Southport, Perth and Melbourne and terminated six staff.

Administrators said the company was trading through various platforms in Australia and New Zealand before it was placed in administration last month.

ASIC released a statement confirming it was “in close contact with Ferrier Hodgson as the voluntary administrator”.

“ASIC will consider further the circumstances surrounding the voluntary administration, particularly those concerning compliance with financial services laws” the regulator said.

Patricia and Jeff Worboys.

“Under the law, including the Corporations Act, licensees must keep client money separate from their own. This is an important safeguard to protect the interests of retail investors.”

Investors were sent pre-filled proxy voting forms on the letterhead of Australian Mutual Holdings, another investment firm directed and managed by Mr Worboys.

Mr McCallum said the pre-filled voting forms were unauthorised and votes on them would not towards resolutions decided at the meeting.

Asked what he knew of the unauthorised forms, Mr Worboys said “people can vote they way they wish”.

He said he planned to continue to own and manage AMH and an American company called Halifax LLC.

“I will share my time between Sydney where AMH is based, Los Angeles, Chicago (where Halifax America is based) and the family home on the Gold Coast,” he said via email.

“I am disappointed that after 18 years of tenure that Halifax has ceased operation, and I am working with the administrators in coming up with a resolution to repatriate moneys back to the clients as soon as possible.”

Pat and Jeff Worboys‘ home Picture: JERAD WILLIAMS

Some shareholders were horrified to hear shares they thought were held in their names were in fact held through a series of companies and custodians.

As the Bulletin revealed today, AMH has been drawn into what has been described as “Australia’s biggest Ponzi scheme”.

Australian Mutual Holdings was formerly the responsible entity for collapsed firm Courtenay House Capital Trading — which took $209 million from 780 investors, including the Mayor of Sydney’s Sutherland Shire.

Mr Worboys said AMH was “a separate non related entity, and is not a subsidiary of Halifax or visa versa”.

“Courtenay House Capital Fund is one of dozens of different funds that AMH had provided admin services over the years,” he said.

Jeff Worboys & Pat Worboys. Picture: Regina King

“There has been no inferences from ASIC that AMH is responsible for their actions in a Ponzi scheme.”

AMH still oversees a number of funds, including the Trident Global Growth Fund which had a $5.5 million investment with Halifax.

Trident’s product disclosure statement said its Halifax investment was “illiquid” and represented 12 per cent of the Trident fund.

“The investment in Halifax is not secured and ranks behind all secured and unsecured creditors of Halifax,” it said.

The Halifax administrators survived a bid by shareholder and former director Andrew Baxter to replace them with a different insolvency firm.