Smith, a British national, had emigrated to Australia in 1993, and ran the securities and investments division of the stock brokerage firm Ord Minnett.
Melbourne underworld figure Mick Gatto made headlines when he travelled to Singapore on behalf of an anonymous group of investors in an attempt to retrieve their money.
Ferrier Hodgson then tenaciously pursued ANZ Bank and Merrill Lynch for restitution in relation to their dealings with the companies immediately prior to and in receivership.
The actions of ASIC and Ferrier Hodgson resulted in a settlement[5] which included the payment of compensation and enforceable undertakings by ANZ Bank.
[citation needed] Laurie Emini, Julian Smith and a third director, Anthony Blumberg were each charged with four offences in late 2009 in relation to the collapse of the group.
In bringing these charges ASIC alleged that shortly before Opes Prime collapsed, the directors signed financial documentation with ANZ Bank to obtain a term loan for Opes Prime Stockbroking Limited (OPSL) and Opes Prime Group Limited (OPGL) and pledged the companies' assets as security to meet the obligations of a third company, Leveraged Capital Pty Ltd. ASIC alleged that in doing so, the directors were intentionally dishonest and failed to exercise their powers and discharge their duties in good faith in the best interests of OPGL and OPSL.
It was further alleged that Messrs Emini, Smith and Blumberg dishonestly used their position as directors of OPGL and OPSL with the intention of directly or indirectly gaining an advantage for themselves or for someone else.
ASIC further alleged that in causing the false recordings to be made, Emini was intentionally dishonest and failed to exercise and discharge his duties in good faith in the best interests of OPSL and Leveraged Capital.
Ten of the charges brought by ASIC allege that Emini used his position with Opes "dishonestly with the intention of directly gaining an advantage for yourself or someone else".
[9] There was a significant delay in bringing the three accused to trial because of the length of time prosecutors believed that a committal hearing would require - some three to four weeks.
[11] His counsel, Peter Fitzgerald also told the court, "My client's pleading not guilty, but as indicated ... there will be a plea to an appropriately worded indictment".
He indicated that, "It is now my belief that the arrangement entered into with the ANZ provided absolutely no benefit at all to Opes Prime and was to the total detriment of its clients, creditors and employees."
He indicated that he had been informed about a $100 million "hole", but despite regarding the matter as extremely serious, he felt it could be rectified because Murphy was "able to obtain assistance from the Packers in receiving guarantees" as had been revealed in earlier evidence.
I was well aware that this variation might cause significant detriment to the companies, in light of the make-up of the securities pool held by ANZ, and therefore we resisted that change during late February and early March.''
The Australian article also revealed that Blumberg eventually withdrew his objections and allegations of potential fraud in exchange for ANZ Bank releasing him from a personal guarantee which they had required him to provide as part of the agreement.
[23] Blumberg's counsel and the prosecutor both indicated that fruitful discussions had taken place between them and that there was every likelihood that they too would reach agreement in relation to a plea prior to 9 May 2011.
[27] Emini pleaded guilty to: Blumberg pleaded guilty to: In an agreed statement of facts presented to the hearing, the prosecuting counsel, Dr Gregory Lyon SC, indicated that control was taken of Riqueza in 2006 in order to provide "financial engineering" via the Opes Prime balance sheet in breach of ASX Rules to enable Leveraged Capital to continue to operate despite a reduction in its borrowing limit by ANZ Bank.
"[30] He indicated that the settlement with ANZ and Merrill Lynch made it ''difficult to quantify any loss to [Opes Prime's] creditors as a result of the criminal conduct of each of you.
Justice Beach commented, "Ultimately I accept that you knowingly engaged in this improper and dishonest transaction for the purpose of attempting to keep OPSL, a company in which you had a substantial interest, in business.
"[30] In mitigation, Justice Beach noted in respect of Emini that, "Your disclosures not only assisted the Crown's case against you but also against Mr Blumberg and another accused who is yet to stand trial.
"[30] He found that Emini's co-operation with ASIC, including providing a 64- page statement and a 125-page folder of important emails, had been "at the highest level".
[31] He also indicated that Blumberg's co-operation had helped Opes Prime's liquidators recover $226 million from the broker's financiers, ANZ and Merrill Lynch, which was distributed to victims.
[37] In support of his allegations, Dr Lyon referenced a number of emails which he contended showed that Smith was clearly aware of the true position of the company.
[40] In a new revelation, Dr Lyon indicated that Smith had been warned that accounts held by Norm Seckold and Chris Murphy were a risk to the company.
The committee recommended placing limits on Murphy's account, removing his ability to borrow 100% of the value of his stock and seeking more diversity in his holdings.
The committee further indicated that the company would be "significantly impacted" if Seckold sought the return of his shares because Leveraged Capital had been using the free margin on the account as a buffer.
[42][43] Mr Regan told the court the evidence will show that in the lead-up to signing the lifeline deal with ANZ, that Smith took "reasonable and appropriate steps based on the information that was available to him".
"One has to wonder whether the ANZ Bank's loss of appetite for continued support had anything to do with the fact that they had got the long sought-after change to the AMSLA (Australian Master Securities Lending Agreement) on March 20.
Emini, however, indicated that Smith was communicating with him in early 2008 despite his move to Sydney, had knowledge of the problem accounts and was involved from the first meeting with financier ANZ Bank.
Emini told the court that he had nowhere to move at that time, because Opes had insufficient cash - only about $12 million - to cover the shortfall and would therefore fail the ASX liquid capital requirements.