A family investment fund led by a former nightclub owner is preparing to take legal action against CommSec after the popular broker allegedly froze its trading account in the middle of a busy session on the ASX.<\/p>\n
Unable to complete open positions in Magellan Financial, AMP, Titan Minerals, and Greenstone Resources, the Paton Family Trust is now claiming the broker caused the trust losses of nearly $290,000.<\/p>\n
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Alistair Paton at M1NT, Shanghai, in 2008. <\/span>Credit:<\/span>Philip Gostelow<\/cite><\/p>\n The founder of the family fund, Alistair Paton, has engaged Arnold Bloch Leibler to represent the trust, which was opened in early 2013 and traded under the name M1NT Property, named after nightclubs Mr Paton used to run in Hong Kong, Shanghai and London.<\/p>\n Mr Paton, a former Brighton Grammar student in Melbourne, said his planned case could join the Australian Securities and Investments Commission\u2019s (ASIC) civil proceedings against CommSec that is set for hearings in the Federal Court in March. In that case, ASIC alleges CommSec and its former subsidiary AUSIEX breached market integrity rules and overcharged brokerage for many years. The brokers have already admitted to overcharging clients $4.4 million in fees and other breaches of the Market Integrity Rules and have repaid customers.<\/p>\n \u201cIt\u2019s staggering that CommSec conducts itself in a prehistoric way and it is no surprise the Australian Securities and Investments Commission is taking them to the Federal Court in March,\u201d Mr Paton said.<\/p>\n CommSec declined to comment about the matter, which was being handled internally and has not yet reached the courts.<\/p>\n In a letter to CommSec, Mr Paton\u2019s lawyers argue the broker disabled the trading account without warning on December 16 despite open buy and sell orders and active algorithms.<\/p>\n The account had been trading up to $10 million worth of transactions every quarter and was applying for a lower-fee Commonwealth Direct Investment Account, but was having trouble getting paperwork signed by directors who were unable to travel interstate during pandemic-related border closures.<\/p>\n The account was disabled following a phone call with CommSec and Mr Paton about the directors of the company.<\/p>\n CommSec and its former subsidiary AUSIEX have been caught up in an ASIC case alleging breaches of market integrity rules that sits before the Federal Court in March. <\/span>Credit:<\/span>Andrew Quilty<\/cite><\/p>\n The open orders included a $500,000 position on Magellan Financial, where the Paton account was buying for $28.88 and selling at $29.55. The legal letter claims freezing the account led to losses of about $145,000.<\/p>\n The trust also alleges a $12,000 purchase of Titan Minerals shares were deleted, and the fund was prevented from selling $35,000 worth of Greenstone Resources.<\/p>\n Mr Paton immediately called CommSec, which is alleged to have promised to make good any errors but then cancelled all live orders on the account.<\/p>\n \u201cOur client continues to suffer loss and damage as a result and the quantum of its claim will continue to increase accordingly,\u201d Arnold Bloch Leibler said.<\/p>\n The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. <\/i><\/b>Sign up to get it every weekday morning<\/i><\/b>.<\/i><\/b><\/p>\n<\/p>\n
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