Berndale Capital Securities

Hi.
There were a few ASIC brokers that had their licensed pulled or gone under administration in 2018.
Halifax AU & NZ, DirectFx, AGM markets and now Berndale capitals.
Since 1 April, the requirements for reconciling trust bank accounts on a weekly basis has put pressure on brokers. This is to ensure that trust accounts are not used for hedging purposes which brokers can do before April 1.
Smaller brokers find doing the additional paperwork a burden unless it is fully automated. If brokers don't comply, their license will be suspended or cancelled after warnings.

ASIC nor anyone else knows the status of Berndale's Trust account until after an audit. At this stage their license is cancelled for non compliance.

In Australia, it is not necessary to engage a lawyer as all clients are treated equal. You can always lodge your complaint via Financial Ombudsman services website, preferably in English. FOS can explained to you the process to recover your funds.

Do keep us up to date on the outcome. In the meantime, choose bigger Aussie brokers.

Thanks to everyone that has commented on this topic. Chowie, I did get onto the FOS (Financial Ombudsman Service) website at https://www.fos.org.au/ but they say that since 1 Nov 2018 all new financial services complaints are dealt with by AFCA https://www.afca.org.au/. I have lodged a complaint against Berndale Securities (AKA Berndale Group) with AFCA online via their website. Now waiting to see what happens.

hillderek posted:
Thanks to everyone that has commented on this topic. Chowie, I did get onto the FOS (Financial Ombudsman Service) website at https://www.fos.org.au/ but they say that since 1 Nov 2018 all new financial services complaints are dealt with by AFCA https://www.afca.org.au/. I have lodged a complaint against Berndale Securities (AKA Berndale Group) with AFCA online via their website. Now waiting to see what happens.

Okay all the best! Keep updating us if you face any problem.

I got a reply on 31 Jan 2019 from AFCA which included these comments I have selected:

'AFCA has found it difficult to engage with Berndale in relation to disputes. It has, so far, failed to respond to AFCA’s requests for information in some complaints received by AFCA.'

also,

'There is a chance that Berndale may not have sufficient financial resources to fully pay compensation that may be awarded by AFCA, and previously by FOS. We have communicated our concerns to ASIC.'

and

'AFCA is not a government department or agency, and we are not a regulator of the financial services industry and therefore cannot punish or impose fines. AFCA is also not a court of law. AFCA provides an independent and impartial dispute resolution service. Therefore, we cannot advocate on behalf of anyone who brings a complaint to us.
We recommend that you obtain independent legal advice about the options you may have about your claim against Berndale.'

In my case my account is $1700 probably too small to warrant engaging independent legal advice, and I even wonder how that would help me given that they are already going through the courts with ASIC.

AFCA say I should regularly check this page: https://www.afca.org.au/news/current-matters/important-information-for-consumers-about-berndale-capital-securities-pty-ltd/

I also have reported 3 other points to AFCA that are of concern for me. I do not know if AFCA has forwarded this information on to ASIC so I am about to do that in any case. Namely:

1. For a week approximately 2018.10.04 until 2018.10.10 my account was disabled. When my account came back I was given a new account number. I wonder if this was done in order to transfer my money from the segregated account into the account of Stavro D’Amore the owner of Berndale?

2. On 2018.12.21 Berndale closed my open trade without my knowledge prior to rendering my account disabled and becoming out of contact. Surely closing client's trades is not allowed without good reason.

3. I received a phone call from Ana Milos (Berndale representative/employee) on Nov 27 2018 asking me if I would like to:
 'deposit $10,000 into my account with them as they had a bonus offer on at the moment'.
I would have thought that this was going against the orders of 18-390MR, which says ' ...its Australian Financial Services licence was cancelled on 22 November 2018. At the same time, Mr D’Amore was banned from providing financial services for a period of six years '.
Ana Milos called from 03 8609 9789 which is the Berndale main number which they no longer answer (just a voice recording system). (I did not deposit any more funds with them, by the way).

Wow that's scary stuff. I wonder how many other brokers are running this kind of way

MontaBill posted:
Wow that's scary stuff. I wonder how many other brokers are running this kind of way

Basically, it’s really tough to work with a market maker broker! But all of the brokers are not market maker.

I do not get that , if they are regulated there should be still some sort of escrow from which people would get the money anyway. Can we please make something with it totally and completely. I do not see it entirely. I do not want to be there anyway.

jonpearce posted:

Professional4X posted:

hillderek posted:
Can anyone advise on how to get one's money back from this broker? Their website has gone (404-Not Found), the don't reply to emails or answer the phone.

Professional4X posted:
Consider how many people got their money back when Bernard L. Madoff Investment Securities defrauded their customers for somewhere between $20 billion and $65 billion (reports vary on final value of fraud claims). Overall around $11 billion was recovered via various means has been distributed to a portion of their investors, however most of their investors will never see their funds again.

Contact the regulatory agency for the country in question and get an attorney.

Pretty much all scenarios would indicate you are out of luck and your money is gone.

jonpearce posted:
Not true.........ASIC requires that client funds are kept in segregated accounts. Clients that had funds deposited should contact ASIC: https://asic.gov.au/ and the Australian Financial Complaints Authority: https://www.afca.org.au/

How is what I said NOT TRUE?

That is ABSOLUTELY what they should do.

As I clearly stated above, they should be contact the regulatory and governing bodies, in addition, the OP needs to contact an attorney immediately.

NOTHING I said was untrue.

As per the notice on the government website.

Following an administrative hearing, ASIC found that Berndale:

    failed to take reasonable steps to ensure that its representative complied with financial services laws;
    failed to have adequate financial and human resources;
    failed to maintain an appropriate internal dispute resolution system;
    failed to provide financial services efficiently, honestly and fairly;
    failed to comply with the client money reporting requirements;
    failed to lodge annual financial statements, and audit reports; and
    is likely to contravene its general obligations as an AFS licensee.

ASIC also found Mr D’Amore:

    was involved in contraventions of financial services laws by Berndale;
    is not adequately trained, or is not competent, to provide financial services; and
    is likely to contravene a financial services law.

As for what I said about the clients that got funds stolen by Madoff, that too is absolutely correct.
Madoff still owes BILLIONS of dollars to the people he ripped off.


As for actually recovering any funds that a specific client lost due to being defrauded by the now closed brokerage.
The license was pulled and they were shut down because they mishandled the funds and didn't have adequate financials resources available. The most likely scenario is that the funds are gone and the client will probably be out the investment capital.

I was referring to this statement you made: 'Pretty much all scenarios would indicate you are out of luck and your money is gone.'

This is incorrect. Client funds are kept in segregated accounts and unless someone has absconded with the funds they will still be there. Berndale did not go broke, their licence was revoked.

I agree with your opinion

jonpearce posted:

Professional4X posted:

hillderek posted:
Can anyone advise on how to get one's money back from this broker? Their website has gone (404-Not Found), the don't reply to emails or answer the phone.

Professional4X posted:
Consider how many people got their money back when Bernard L. Madoff Investment Securities defrauded their customers for somewhere between $20 billion and $65 billion (reports vary on final value of fraud claims). Overall around $11 billion was recovered via various means has been distributed to a portion of their investors, however most of their investors will never see their funds again.

Contact the regulatory agency for the country in question and get an attorney.

Pretty much all scenarios would indicate you are out of luck and your money is gone.

jonpearce posted:
Not true.........ASIC requires that client funds are kept in segregated accounts. Clients that had funds deposited should contact ASIC: https://asic.gov.au/ and the Australian Financial Complaints Authority: https://www.afca.org.au/

How is what I said NOT TRUE?

That is ABSOLUTELY what they should do.

As I clearly stated above, they should be contact the regulatory and governing bodies, in addition, the OP needs to contact an attorney immediately.

NOTHING I said was untrue.

As per the notice on the government website.

Following an administrative hearing, ASIC found that Berndale:

    failed to take reasonable steps to ensure that its representative complied with financial services laws;
    failed to have adequate financial and human resources;
    failed to maintain an appropriate internal dispute resolution system;
    failed to provide financial services efficiently, honestly and fairly;
    failed to comply with the client money reporting requirements;
    failed to lodge annual financial statements, and audit reports; and
    is likely to contravene its general obligations as an AFS licensee.

ASIC also found Mr D’Amore:

    was involved in contraventions of financial services laws by Berndale;
    is not adequately trained, or is not competent, to provide financial services; and
    is likely to contravene a financial services law.

As for what I said about the clients that got funds stolen by Madoff, that too is absolutely correct.
Madoff still owes BILLIONS of dollars to the people he ripped off.


As for actually recovering any funds that a specific client lost due to being defrauded by the now closed brokerage.
The license was pulled and they were shut down because they mishandled the funds and didn't have adequate financials resources available. The most likely scenario is that the funds are gone and the client will probably be out the investment capital.

I was referring to this statement you made: 'Pretty much all scenarios would indicate you are out of luck and your money is gone.'

This is incorrect. Client funds are kept in segregated accounts and unless someone has absconded with the funds they will still be there. Berndale did not go broke, their licence was revoked.

I agree with you