Irked investors sue Ord Minnett

In claims lodged with the Federal Court on Christmas Eve, the clients have accused the firm's former Canberra-based broker, Eric Hawley, of negligently using their money to trade in unhedged or uncovered options without their knowledge or permission.

The group is seeking damages from Ord Minnett and not Mr Hawley, who is living in the Swiss town of Montreux.

The suits follow 15 other cases worth a combined $13 million in damages launched against the firm in September on behalf of other investors who lost money on the advice of Mr Hawley. They included a surgeon, two dentists, a farmer, a retired pharmacist and a retired solicitor.

Ord Minnett has already reached settlements with many of Mr Hawley's former clients.

Ten former clients of Brisbane-based Ord Minnett broker Ben Leeden have also sued the firm for $2.3 million in compensation in Queensland.

The seven who launched their case on December 24 are mostly retired professionals with an average age of 72. They allege the broker was negligent and breached its duty of care to them because they were not properly informed of the risks inherent in options trading.

They believed their money was in safe hands with an experienced broker who was using blue-chip shares and other low-risk investments to ride the soaring sharemarket.

Six of the seven say they asked for "balanced" or "moderate" investment profiles, which are for investors who prefer low-risk and less aggressive strategies as they near retirement.

While the investors' trading started out well, the increasingly risky options trading later turned sour, and they now allege they were misled by Mr Hawley's repeated reassurances that their investments were "going well".

Mr Hawley left Ord Minnett in October 2004 after many of his clients lost their money, moving to rival firm Patersons Securities.

The group of seven includes retired Sydney-based optometrist Kevin Oswald Everett and his wife Jean May Everett, retired small business owner Bruce Booth and Hereford breeder Sidney Reynolds and his wife Rosemary.

Others who lost money include Sydney retiree Hugh Taylor, and Ingrid Davis, who runs a farm in Gundaroo, NSW.

It is not known how much money the group lost, but it is believed to be substantial. Details are contained in a report by expert forensic accountant Rod Ferrier which will be filed as evidence in the case.

Ord Minnett has not filed a defence as yet.