SEVEN mostly elderly former clients of stockbroking firm Ord Minnett have sued the broker for damages believed to worth several million dollars, alleging the firm ignored their requests for conservative investments and instead put their money into high-risk derivatives.
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.
Frequently Asked Questions about this Article…
What is the Ord Minnett lawsuit about and who filed it?
Seven mostly elderly former clients have sued stockbroking firm Ord Minnett in the Federal Court, alleging the firm ignored requests for conservative investments and instead put their money into high‑risk derivatives and unhedged or uncovered options. The claims, lodged on December 24, seek damages believed to be worth several million dollars.
Who do the investors accuse of mishandling their accounts?
The group alleges their Canberra‑based former broker Eric Hawley negligently used their money to trade in unhedged or uncovered options without their knowledge or permission. The investors are seeking damages from Ord Minnett rather than suing Mr Hawley directly.
What kinds of investments and risks are at the centre of the claims?
The suits focus on derivatives and options trading, specifically unhedged or uncovered options. The investors say they were not properly informed about the risks of options trading and were told their investments were 'going well' despite increasing risk.
What investor profiles did the clients ask for, and why does that matter?
Six of the seven investors say they asked for 'balanced' or 'moderate' investment profiles, which the article describes as suited to investors who prefer low‑risk, less aggressive strategies as they near retirement. The claim is that their stated conservative preferences were not respected.
How many related cases have been launched against Ord Minnett and what settlements exist?
The December 24 suit follows 15 other cases launched in September worth a combined $13 million. Separately, ten former clients of Ord Minnett broker Ben Leeden have sued for $2.3 million in Queensland. The article also says Ord Minnett has already reached settlements with many of Mr Hawley’s former clients.
Who are some of the investors involved in the December 24 case?
The group is mostly retired professionals with an average age of 72. Named members include retired optometrist Kevin Oswald Everett and his wife Jean May Everett, retired small business owner Bruce Booth, Hereford breeder Sidney Reynolds and his wife Rosemary, Sydney retiree Hugh Taylor, and farmer Ingrid Davis.
Where did Eric Hawley go after leaving Ord Minnett and has Ord Minnett responded?
According to the article, Mr Hawley left Ord Minnett in October 2004 and moved to rival firm Patersons Securities; he is said to be living in Montreux, Switzerland. Ord Minnett had not filed a defence at the time of the report.
What evidence is being referenced in the case about investor losses?
The article notes a report by forensic accountant Rod Ferrier will be filed as evidence in the case. It says the exact amount the seven investors lost is not known publicly, but it is believed to be substantial.
Call 1300 880 160
Start a chat
Schedule a call
