Clients of collapsed stockbroking firm BBY had some good news Friday after five years of not knowing whether they would get any of their money back.
The liquidator, KPMG, announced that the first interim cash distribution would be made to former customers who have claimed owed money.
There are about 6,000 former clients who are claiming a total of $64 million. They won’t receive 100% of what they’re owed but will receive a partial repayment as shown:
| Product | Equities | Exchange-traded options | Pooled accounts | Interactive Brokers (online platform) |
| Estimated total cents in the dollar return | 73 | 59 | 26 | 44 |
| First/interim distribution (cents in the dollar) | 63 | 50 | 22 | 38 |
BBY was a popular Australian stockbroking company that went into administration in 2015, owing its clients millions of dollars in invested monies.
Its troubles started after a botched deal in 2014 to acquire $192 million of Aquila Resources Limited (ASX: AQA) shares on behalf of a client.
BBY was unable to meet a margin call related to that transaction, with the ASX Ltd (ASX: ASX) also getting into hot water over bending its rules to prevent a default.
Later investigations by the liquidator triggered allegations of misuse of client funds.
Tennis legend taken to court for $3.3 million
Some of the unusual practices at BBY allegedly included executive chair Glenn Rosewall’s hiring of a psychic to come up with investment strategies.
Rosewall is the son of legendary tennis player, Ken Rosewall, who was himself a director of BBY.
The liquidator is now taking the senior Rosewall to court to claw back a $3.3 million loan repayment he received from BBY.
It is alleged that payment was received when BBY was insolvent and when other creditors had not been paid out. Rosewall is “strenuously” denying the accusation.
The civil case is scheduled for the Supreme Court starting on 8 September.
Rosewall won 8 Grand Slam singles titles over the 1950s, 1960s and 1970s.
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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