The Federal Court has said that Australian investors are not adequately protected while ruling that clients of failed stockbroker Opes Prime have no legal ownership over shares seized by the ANZ Bank. In a boost to the stock-lending industry, Justice Ray Finkelstein said that the standard-form stock-lending agreement meant that the securities are owned by the lender and that the argument that the agreement could be characterised as a mortgage was unsustainable. Justice Finkelstein pointed out that other countries have regulations that provide a measure of investor protection that is missing in Australia. In the US the Securities and Exchange Commission regulates the solvency of brokers and claims by investors were governed by specific legislation which reduces the risk.
