Colourful Sydney lawyer and self-professed gun share trader, Chris Murphy, has had better months. The man who Kerry Packer once called a “market genius” was, apparently, a market dud, somehow managing to lose $100 million of other Opes Prime clients’ money on stocks like Challenger and Australian Pharmaceutical Industries.
By all accounts, Murphy owes Opes Prime creditors (who now include a swathe of innocent Opes clients) upwards of $100 million. It has been widely reported that Murphy was able to lose so much because he was being protected from margin calls by Opes boss, Laurie Emini, who just happened to be a co-investor of Murphy.
Murphy’s claims since the collapse have ranged from the absurd to the ridiculous. For Murphy, an experienced share-trader (he allegedly was given a share trading terminal by Opes) to claim that he wasn’t aware he had exceeded his margin is completely preposterous. Either he is a complete fool or he’s not being fully frank. Neither scenario places the man known as “Syringe” on trading site, HotCopper, in a particularly positive light. Even the most amateur of share traders will have a vague idea of where their equity position lies. Given that Murphy was trading with loan-to-valuation ratios approaching 100%, it isn’t difficult to realise that if the share price drops even by a small percentage, the equity position will be swamped by the large debt stake, precipitating a margin call.
The question which hasn’t been asked though is what will happen to one of Sydney’s most renowned criminal lawyers? It would appear likely that Opes administrators will take legal action against Murphy to recover the $100 million or so that he managed to lose. Murphy claims he has assets of $40,000, so unless his creditors agree to accept one twenty-fifth of a cent-in-the-dollar, Murphy may be forced to declare bankruptcy.
If Murphy declares bankruptcy, he may be stripped of his legal practising certificate and be barred from acting as a lawyer. The good news for Murphy is, according to the NSW Law Society, bankruptcy in itself isn’t a trigger for the immediate loss of a practising certificate. Rather, the legal regulator will look at the factors which lie behind the bankruptcy, for example, whether the bankruptcy was a personal matter (as it appears to be in Murphy’s case) or whether it related to their legal practice. While the majority of bankrupt solicitors and barristers are able to continue to practise in some form, a serious issue will arise with regards to the ability of the bankrupt to handle trust monies.
Admittedly, the looming spectre of bankruptcy and the possibility of losing his practising certificate may not be Murphy’s biggest concern at the moment, with The Age noting today that:
Melbourne Finance broker Tom Karas, who has links with underworld figure, Mick Gatto, told BusinessDay on the day of the Opes Prime collapse “Chris Murphy is the black hole. Chris Murphy and Sarah Brown – that where all the money’s gone.”
Legal career aside, at the moment, avoiding a cameo appearance in Underbelly 2 may be Chris Murphy’s biggest problem.
errata:
‘the margin calls did not come when the market price of my shares were not exceeded by my equity’ and the typo ‘$40,00.’ should read ‘$40,000’.
This isn’t another Irish joke is it ? and then there’s the one about the Italian debt collector
C’mon Chris, yes, maybe you didn’t actually get ‘margin called’ (a telephone call) but you knew exactly what was going on in your portfolios and you know your margin call exceeded $150million across your cross margin group.
If only you paid up and weren’t dodgy, how things could have been different.
Thanks a lot
While I consider my remedies you should consider speaking to people you write about or do you fear the truth? I have never called myself a ‘gun’ trader. I have never said to anyone I have assets of $40,00. Kerry Packer did not call me a ‘market genius’ but rather said ‘You know nothing about markets. You’ve got big balls and you are lucky’.
I was once lucky but things change and I can handle it. Oh yes, in addition I have never said my accounts did not exceed their margins. I said that I did not get ‘margin calls’ . The fool here Mr Schwab is your self. I am frank and I’m no fool. The margin calls did not come when the market price of my shares exceeded my equity. Why? You’ll have to ask someone else that. I can’t help you. Try picking up the telephone, other journalists aren’t phobic about it!
Perhaps you should leave this stuff to real journaiists with proper jobs who do not avoid their subjects for fear the truth will ruin a mocking article.
Christopher Murphy
Sure Chris